Exhibit 2.C
AMENDED AND RESTATED SHAREHOLDERS AGREEMENT
THIS AMENDED AND RESTATED SHAREHOLDERS AGREEMENT dated as of February
18, 1997 by and among (i) Grupo Iusacell, S.A. de C.V., a corporation
organized under the laws of Mexico with its principal office located at
Xxxxxx Urales Xx. 000 (0xx Xxxxx), Xxxxxxx Xxxxx xx Xxxxxxxxxxx, Xxxxxx, D.F.
11000 (the "Corporation"), (ii) Xxxx Atlantic Latin America Holdings, Inc., a
Delaware corporation with its principal office located at 0000 Xxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxx, XX 00000 ("BALAH"), (iii) Xxxx Atlantic International,
Inc., a Delaware corporation with its principal office located at 0000 Xxxxx
Xxxxx Xxxxx Xxxx, Xxxxxxxxx, Xxxxxxxx 00000 ("BAII"), (iv) Ing. Xxxxx Xxxxxxx
y Xxxx Xxxxxxxx ("Xxxxx Xxxxxxx"), a Mexican citizen whose address is Xxxxxx
Urales Xx. 000 (0xx Xxxxx), Xxxxxxx Xxxxx xx Xxxxxxxxxxx, Xxxxxx, D.F. 11000,
(v) Ing. Xxxxxx Xxxxxxx Xxxxxxxx ("Xxxxxx Xxxxxxx"), a Mexican citizen whose
address is Xxxxxx Urales Xx. 000 (0xx Xxxxx), Xxxxxxx Xxxxx xx Xxxxxxxxxxx,
Xxxxxx, D.F. 11000, (vi) IUSA Grupo Comunicaciones, S.A. de C.V. (formerly
known as Grupo Industrial Iusa, S.A. de C.V.), a corporation organized under
the laws of Mexico with its principal office located at Xxxxxx Urales Xx. 000
(0xx Xxxxx), Xxxxxxx Xxxxx xx Xxxxxxxxxxx, Xxxxxx, D.F. 11000 ("Grupo Iusa"),
(vii) FIUSA Pasteje, S.A. de C.V., a Mexican corporation with its principal
office located at Xxxxxx Urales Xx. 000, 0xx xxxxx, Xxx. Xxxxx xx
Xxxxxxxxxxx, Xxxxxx, D.F., 11000 ("FIUSA"), (viii) Xxxxxxxx Investments
Limited, a corporation organized under the laws of the Isle of Man with its
principal office located at St. Xxxxx Xxxxxxxx, Athol Street, Xxxxxxx, Isle
of Man ("Xxxxxxxx"), (ix) Commander Mexicana, S.A. de C.V., a corporation
organized under the laws of Mexico with its principal office located at
Xxxxxx Urales Xx. 000 (0xx Xxxxx), Xxxxxxx Xxxxx xx Xxxxxxxxxxx, Xxxxxx, D.F.
11000 ("Commander Mexicana"), (x) Inmobiliaria Reforma Lomas Altas, S.A. de
C.V., a corporation organized under the laws of Mexico with its principal
office located at Xxxxxx Urales Xx. 000 (0xx Xxxxx), Xxxxxxx Xxxxx xx
Xxxxxxxxxxx, Xxxxxx, D.F. 11000 ("Inmobiliaria Reforma"), (xi) Fraccionadora
y Constructora Mexicana, S.A. de C.V., a corporation organized under the laws
of Mexico with its principal office located at Xxxxxx Urales Xx. 000 (0xx
Xxxxx), Xxxxxxx Xxxxx xx Xxxxxxxxxxx, Xxxxxx, D.F. 11000 ("FCM"), (xii)
Confecciones Pasteje, S.A. de C.V., a corporation organized under the laws of
Mexico with its principal office located at Xxxxxx Urales Xx. 000 (0xx
Xxxxx), Xxxxxxx Xxxxx xx Xxxxxxxxxxx, Xxxxxx, D.F. 11000 "Confecciones
Pasteje"), and (xiii) Interelec, S.A. de C.V., a corporation organized under
the laws of Mexico with its principal office located at Xxxxxx Urales Xx. 000
(0xx Xxxxx), Xxxxxxx Xxxxx xx Xxxxxxxxxxx, Xxxxxx, D.F. 11000 ("Interelec"
and, together with Commander Mexicana, Inmobiliaria Reforma, FCM and
Confecciones Pasteje, the "Grupo Iusa Transferees").
W I T N E S S E T H:
WHEREAS, pursuant to the terms and provisions of the Share Purchase
Agreement (as hereinafter defined), BALAH has subscribed to and purchased
Shares from the Corporation, Administracion y Control de Industrias, S.A. de
C.V. and Xxxxxxxx; and
WHEREAS, because the voting stock of the Corporation was and is
currently beneficially owned by a relatively small group, the parties hereto
(other than BAII, Xxxxxxxx, FIUSA and the Grupo Iusa Transferees) entered
into the Original Shareholders Agreement (as hereinafter defined) to ensure
continuity of, and avoid disruption to, the harmonious and successful
management and control of the Corporation by certain agreements with respect
to the control and management of the Corporation and certain other agreements
set forth therein; and
WHEREAS, on December 27, 1996 the parties hereto (other than BAII and
the Grupo Iusa Transferees) entered into the 1996 Share Conversion Agreement
(as defined herein) pursuant
to which the BEL Shareholder Group (as defined herein) would acquire the
right to elect a majority of the members of the Board of Directors (as
defined herein); and
WHEREAS, BAII has acquired 5,562,450 Series B Shares by means of a
return of capital from BALAH and pursuant to the provisions of Section 6.9 of
the Original Shareholders Agreement and has acquired Series A Shares pursuant
to the conversion of the Subordinated Chase Note (as such term is defined in
the 1996 Share Conversion Agreement); and
WHEREAS, the Grupo Iusa Transferees, pursuant to the provisions of
Section 6.9 of the Original Shareholders Agreement, have become the direct
beneficial owners of an aggregate of 100,000,000 Series D Shares pursuant to
contributions by Grupo Iusa of Series A Shares to their social capital and
their subsequent conversion into Series D Shares; and
WHEREAS, in order to reflect the enhanced rights of the BEL Shareholder
Group acquired pursuant to the 1996 Share Conversion Agreement, the parties
hereto desire to enter into this Amended and Restated Shareholders Agreement
to set forth herein certain of their amended rights, duties and obligations.
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
1.1. Defined Terms. In addition to the terms defined elsewhere in this
Shareholders Agreement, the following terms shall have the meanings set forth
for them below when used in this Shareholders Agreement:
"1996 Share Conversion Agreement" means that certain agreement dated
December 27, 1996 by the parties hereto (other than BAII and the Grupo Iusa
Transferees) pursuant to which, among other provisions, the BEL Shareholder
Group acquired the right to nominate and elect a majority of the Board of
Directors.
"Accountants" means (whether one or more) such firm or firms of
independent certified public accountants as shall be engaged from time to
time by the Corporation or any Subsidiary.
"Affiliate" means, when used with reference to a specific Person, any
Person that at the time of determination of Affiliate status directly or
indirectly, whether through one or more intermediaries, controls, is
controlled by or is under common control with such specific Person; provided,
however, that, without limiting the foregoing, for purposes of this
Agreement, the Corporation, the Subsidiaries, Xxxxx Xxxxxxx, Xxxxxx Xxxxxxx,
Grupo Iusa, FIUSA, Langness, Commander Mexicana, Immobiliaria Reforma, FCM,
Confecciones Pasteje and Interelec are deemed to be Affiliates of each other
and the Corporation, the Subsidiaries, BALAH and BAII are deemed to be
Affiliates of each other. For purposes of this Agreement, the term "control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agreement" means this Amended and Restated Shareholders Agreement, as
originally executed and as the same may be amended, modified and supplemented
from time to time in accordance with the terms hereof.
"Annual Plan" means, collectively, the annual operating and capital
budgets and business plan of the Corporation and the Subsidiaries.
"BEL/Xxxxxxx Trust" means that certain trust dated as of November 30,
1993 created by agreement by and among The Corporation, BALAH, Xxxxx Xxxxxxx,
Grupo Iusa and Banco del Atlantico,S.A., institucion de banca multiple, Grupo
Financiero GBM-Atlantico, as trustee.
"BEL Shareholder Group" means BALAH, BAII, any Affiliate of
BALAH, or BAII who becomes the beneficial owner of Shares pursuant to
the 1996 Share Conversion Agreement or upon conversion of any Indebtedness
issued by the Corporation and any of their respective transferees or
successive transferees, pursuant to the terms of Section 6.2 hereof.
"Board of Directors" means the Board of Directors of the Corporation.
"Business Day" means any day other than a Saturday, Sunday or federal
holiday for national banks in Mexico.
"Bylaws" means the estatutos sociales of the Corporation in effect from
time to time.
"Concession" means any concession, permit, license, approval or
authorization granted by any Governmental Entity to the Corporation or any of
its Subsidiaries that permits the Corporation or a Subsidiary to engage in
the Telecommunications Business or a related business.
"Contract" means (i) any written lease, agreement, contract, commitment
or license or (ii) any enforceable understanding or enforceable oral lease,
agreement, contract, commitment or license.
"Corporation Officer" means an Officer of the Corporation (including,
without limitation, the Chairman of the Board, the Vice Chairman of the
Board, the Chief Executive Officer, the Chief Operating Officer and the
President of the Corporation). For purposes of this Agreement, an individual
shall be deemed a "Corporation Officer" or an "Officer of the Corporation" if
he meets the definition of "Officer" with respect to the Corporation,
notwithstanding the fact that he is not formally elected as an officer within
the meaning of the Bylaws or the Ley General de Sociedades Mercantiles.
"estatutos sociales" means the corporate organizational and governance
documents bearing such name under Mexican legal principles.
"Exchange Act" means the United States Securities Exchange Act of 1934,
as amended.
"GAAP" means generally accepted accounting principles, applied on a
consistent basis.
"Governmental Entity" means any nation or sovereign entity, or any
state, territory, possession, county, municipality or other subdivision
thereof, or any court, tribunal, department, commission, ministry, agency,
board, bureau, dependency or other instrumentality thereof (including,
without limitation, all functionaries and representatives thereof acting in
their official or authorized capacity).
"Indebtedness" of any Person means all obligations, contingent or
otherwise, which in accordance with GAAP should be classified upon a Person's
balance sheet as liabilities and shall include, in any event and without
limitation, (i) indebtedness for borrowed money, (ii) indebtedness incurred
or assumed in connection with the acquisition of assets, (iii) liabilities
secured by any Lien on property owned or acquired by such Person, whether or
not the liability secured thereby shall have been assumed by such Person,
(iv) capitalized lease obligations and (v) all guarantees by such Person of
Indebtedness of another Person.
"Lien" means, whether absolute, accrued, contingent or otherwise, any
mortgage, lien, lease, pledge, encumbrance, charge, restriction, security
interest, judgment lien, claim, license, easement, purchase option, call or
similar right of a third party, preemptive right of a third party, right of a
third party under any voting or shareholder agreement or other restriction,
proxy, limitation on voting rights or adverse claim.
"Material" as to any matter relating to the Corporation or Subsidiaries
means a matter (including, without limitation, any act, omission, occurrence,
transaction, event, obligation, breach of obligation, situation or
governmental action) the effect of which to the Corporation and the
Subsidiaries (taken as a whole, and including the business, assets,
operations, results of operations or financial condition thereof) in the
event of the occurrence or non-occurrence of such matter (whether
individually or together with any related or similar matters) is, or could
reasonably be expected to be, more than U.S.$5,000,000.
"Mexican GAAP" means GAAP, as applied in Mexico.
"Mexico" means the United Mexican States.
"Officer" (whether or not such term is capitalized) means an individual
with significant responsibilities for operations or policy making duties for
any Person that is not an individual.
"Original Shareholders Agreement" means that certain Shareholders
Agreement
dated November 30, 1993 among the BALAH, Xxxxx Xxxxxxx, Xxxxxx
Xxxxxxx, Grupo Iusa and the Corporation.
"Xxxxxxx Family Member" means Xxxxx Xxxxxxx, Xxxxxx Xxxxxxx and their
respective siblings, spouses, children or grandchildren (whether by birth or
adoption); provided, however, that with respect to Xxxxx Xxxxxxx'x
grandchildren, the term "Xxxxxxx Family Member" shall only include those
grandchildren who, as of the date of the Original Shareholders Agreement or
at any time thereafter, were employed by Grupo Iusa or any of its corporate
Affiliates.
"Xxxxxxx Shareholder Group" means, collectively and individually, Xxxxx
Xxxxxxx, Xxxxxx Xxxxxxx, Grupo Iusa, FIUSA, Langness, Commander Mexicana,
Inmobiliaria Reforma, FCM, Confecciones Pasteje, Interelec and any of their
respective transferees or successive transferees pursuant to the terms of
Section 6.2 hereof.
"Xxxxxxx Shareholder Group Notice Party" means the Person elected by
the beneficial owners of seventy percent (70%) of the Series A Shares, Series
D Shares and Series L Shares beneficially owned by members of the Xxxxxxx
Shareholder Group at the time of such election to serve in such capacity;
provided, however, that such Person shall be Xxxxxx Xxxxxxx until such time
as the members of the BEL Shareholder Group and the Corporation each receives
written notice that Xxxxxx Xxxxxxx'x successor as the Xxxxxxx Shareholder
Group Notice Party has been duly elected by the beneficial owners of seventy
percent (70%) of the Series A Shares, Series D Shares and Series L Shares
beneficially owned by members of the Xxxxxxx Shareholder Group at the time of
such election and also receives the name and notice address of such successor.
"Person" (whether or not such term is capitalized) means any
individual, partnership, corporation, joint venture, trust, business trust,
Governmental Entity, union, association, instrumentality, commission or other
entity.
"Prospectus" means a prospectus within the meaning of the Securities
Act or its closest equivalent under the securities laws of a country other
than the United States.
"Region" means each of the nine geographic regions in Mexico for
cellular telephony.
"Registrable Securities" means any and all of (i) the Shares
beneficially owned as of the date hereof by the BEL Shareholder Group and the
Xxxxxxx Shareholder Group, (ii) the Shares for or into which any of the
Shares referred to in clause (i) immediately above are converted pursuant to
the 1996 Share Conversion Agreement, (iii) any Shares hereafter transferred
by a Shareholder to any transferee or successive transferee who is an
Affiliate of such Shareholder pursuant to Section 6.2 hereof, (iv) the Shares
into which any Indebtedness of the Corporation outstanding as of the date
hereof is converted by the BEL Shareholder Group and/or the Xxxxxxx
Shareholder Group pursuant to the agreements contained in the 1996 Share
Conversion
Agreement, (v) any Shares issued to a Shareholder or an Affiliate of a
Shareholder upon conversion of the debentures of that Corporation may issue
pursuant to the 1996 Share Conversion Agreement, and (vi) other securities
issued or issuable with respect to any such Registrable Securities by way of
stock dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or otherwise;
provided, however, that to the extent such securities to be received are
convertible or exercisable into stock of the issuer thereof, then any such
shares of stock as are issued or issuable upon conversion or exercise of said
convertible or exercisable securities also shall constitute Registrable
Securities; and provided further that securities shall cease to be
Registrable Securities when they are transferred pursuant to an effective
Registration Statement or in a public offering.
"Registration Rightsholder" means any beneficial owner of outstanding
Registrable Securities.
"Registration Statement" means a registration statement within the
meaning of the Securities Act or its closest equivalent under the securities
laws of a country other than the United States.
"SEC" means the United States Securities and Exchange Commission, or
any successor agency thereto.
"Securities Act" means the United States Securities Act of 1933, as
amended.
"Series A Directors" means those members of the Board of Directors who,
pursuant to the Bylaws or this Agreement, are nominated and elected by the
beneficial owners of Series A Shares; provided, however, that such term does
not include the Series B Directors, Series D Directors or Series L Directors.
"Series A Shares" has the meaning ascribed to the term "New Series A
Shares" in the Share Purchase Agreement.
"Series B Designated Director" means the Series B Director elected by
the beneficial owners of seventy percent (70%) of the Series B Shares
beneficially owned by the BEL Shareholder Group at the time of such election
to serve in such capacity.
"Series B Directors" means those members of the Board of Directors who,
pursuant to the Bylaws or this Agreement, are nominated and elected by the
beneficial owners of Series B Shares; provided, however, that such term does
not include the Series A Directors, Series D Directors or Series L Directors.
"Series B Officers" means the Chief Financial Officer of the
Corporation and the two principal Corporation Officers responsible for
strategic planning and network planning.
"Series B Shares" has the meaning ascribed to the term "New Series B
Shares"
in the Share Purchase Agreement.
"Series D Directors" means those members of the Board of Directors who,
pursuant to the Bylaws or this Agreement, are nominated and elected by the
beneficial owners of Series D Shares; provided, however, that such term does
not include the Series A Directors, Series B Directors or Series L Directors.
"Series D Shares" has the meaning ascribed to the term "New Series D
Shares" in the Share Purchase Agreement.
"Series L Directors" means those members of the Board of Directors who,
pursuant to the Bylaws or this Agreement, are nominated and elected by the
beneficial owners of Series L Shares; provided, however, that such term does
not include the Series A Directors, Series B Directors or Series D Directors.
"Series L Shares" has the meaning ascribed to the term "New Series L
Shares" in the Share Purchase Agreement.
"Shareholder" means each member of the BEL Shareholder Group and the
Xxxxxxx Shareholder Group.
"Share Purchase Agreement" means that certain Share Purchase Agreement
dated October 10, 1993 among BALAH, Xxxxx Xxxxxxx, Xxxxxx Xxxxxxx, Xxxxxxxx
and the Corporation.
"Shares" means the Series A Shares, the Series B Shares, the Series D
Shares and/or the Series L Shares.
"Subsidiaries" means the Persons in which the Corporation shall at any
time, directly or indirectly, beneficially own an equity interest equal to or
more than 50%, or which the Corporation shall, at any time, directly or
indirectly control.
"Subsidiary Officer" means an Officer of a Subsidiary.
"Supermajority Vote" means, with respect to action by the Board of
Directors, the affirmative vote of a majority of the Directors, including at
least one Series A Director, one Series B Director and one Series D Director,
and with respect to actions by the Shareholders, the affirmative vote of the
beneficial owners of a majority of the outstanding Series A Shares, a
majority of the outstanding Series B Shares and a majority of the outstanding
Series D Shares. For purposes of calculating any Supermajority Vote, the
votes of directors other than Series A Directors, Series B Directors and
Series D Directors shall be excluded.
"Taxes" means all federal, state, local or foreign net income,
alternative or add-on minimum, assets, gross income, gross receipts, sales,
use, ad valorem, value-added, franchise, profits, license, withholding,
communications, payroll, employment,
excise, severance, stamp, occupation, premium, profit-sharing payments,
property, social benefits contribution, windfall profits or similar taxes,
duties, assessments, fees, levies or other similar governmental charges of
any kind whatsoever, together with any interest, penalties, additions to tax
or additional amounts imposed thereon or imposed with respect to any such
interest, penalties, additions to tax or other additional amounts.
"Telecom Act" means the Telecommunications Act of 1996 enacted by the
United States Congress.
"Telecommunications Business" means any of the following: (a) the
ownership, management, operation or maintenance of a network for the
transmission, by any means, of data, voice or video signals, (b) the
provision of transmission services, by any means, of data, voice, or video
signals, (c) the provision of customer premises equipment, and (d) the
provision of value added services (including, by way of example and not of
limitation, "intelligent network" services and private lines). The marketing
of such goods and services on a wholesale, retail or reseller basis shall
constitute the operation of the Telecommunications Business.
"Transfer" means any transfer, assignment, sale, pledge, hypothecation
or change of ownership of any kind, including without limitation, by bequest
or intestate succession.
"United States" and "U.S." mean the United States of America.
"U.S. GAAP" means GAAP as applied in the United States.
1.2. Construction. As used in this Agreement, (i) each term defined in
this Agreement has the meaning assigned to it, (ii) each accounting term not
otherwise defined in this Agreement has the meaning assigned to it in
accordance with Mexican GAAP, if any, and if such term has no meaning under
Mexican GAAP, then under U.S. GAAP, (iii) as the context may require, words
in the singular include the plural and words in the plural include the
singular, (iv) as the context may require, words in the masculine or neuter
gender include the masculine, feminine and neuter genders, (v) all references
to Schedules or Exhibits refer to Schedules or Exhibits delivered herewith or
attached hereto (each of which is deemed to be a part of this Agreement),
(vi) all references to Sections or Articles refer to Sections or Articles of
this Agreement, (vii) all references to "U.S. $", "$" or "dollars" refer to
United States dollars, (viii) any amount to be paid in "$" or "dollars" shall
be paid in U.S. dollars, but any amount to be measured for purposes of
determining compliance with a standard set forth in this Agreement in "$" or
"dollars" may be so measured in a foreign currency and shall be translated
into U.S. dollars at the average of the then prevailing free market buy and
sell rates published in the Wall Street Journal or, if not published therein,
in another newspaper of wide circulation in the United States and (ix) the
terms "herein," "hereunder," "hereby," "hereto" and terms of similar import
refer to
this Agreement in its entirety, and not to any particular Article, Section,
paragraph or subparagraph. No provision of this Agreement will be construed
in favor of, or against, any of the parties hereto by reason of the extent to
which such party or its counsel participated in its drafting or by reason of
the extent to which this Agreement or any provision hereof is inconsistent
with any prior draft hereof or thereof. All references in this Agreement to
the beneficial ownership of Shares shall be deemed to include the Shares
deposited in the BEL/Xxxxxxx Trust, or held of record by any member of the
BEL Shareholder Group or by any member of the Xxxxxxx Shareholder Group and,
with respect to all references to other Persons being a beneficial owner, the
parties agree that such term shall be translated as "beneficiario". For
purposes of this Agreement, references to the office of President of the
Corporation are deemed to be references to the office of the Corporation
currently held by Xxxxxxxxx Xxxxx (i.e., the "Director General").
ARTICLE II
ORGANIZATIONAL MATTERS
2.1. Establishment of Amended and Restated Shareholders Agreement. The
Shareholders hereby establish and enter into this Amended and Restated
Agreement for the purpose of revising certain agreements stated in the
Original Shareholders Agreement (including, without limitation, agreements
regarding the governance of the Corporation and the Subsidiaries) to reflect
the enhanced rights of the BEL Shareholder Group acquired pursuant to the
1996 Share Conversion Agreement.
2.2. Term of Agreement. The term of this Agreement shall commence on
the date hereof. The terms of Articles III (other than Section 3.4), IV, V
(other than Section 5.6) and Section 6.2 shall terminate upon the first date
on which either (i) the BEL Shareholder Group in the aggregate beneficially
owns less than twenty-five percent (25%) of the aggregate outstanding Shares
of the Corporation, or (ii) the Xxxxxxx Shareholder Group in the aggregate
beneficially owns less than twenty-five percent (25%) of the aggregate
outstanding Shares of the Corporation. The terms of Article VII shall
terminate as to any Registration Rightsholder whose Registrable Securities
represent less than five percent (5%) of the outstanding capital stock
(exclusive of Series L Shares) of the Corporation.
ARTICLE III
GOVERNANCE OF THE CORPORATION
3.1. Board of Directors and Certain Officers.
(a) Subject to the terms of this Section 3.1(a) and Section
3.2(b) and (c), the Board of Directors will consist of twenty-one (21)
Directors, ten (10) of whom shall be Series A Directors nominated and elected
by the holders of a majority of the Series A Shares, and nine (9) of whom
shall be Series B Directors nominated and elected by the holders of a
majority of the Series B Shares. Each of the BEL
Shareholder Group and the Xxxxxxx Shareholder Group shall nominate two (2) of
the ten (10) Series A Directors and their alternates and shall vote their
Series A Shares to elect all such nominees. With respect to the remaining six
(6) Series A Directors and their alternates, the BEL Shareholder Group and
the Xxxxxxx Shareholder Group shall meet and attempt to agree upon twelve
(12) Persons of high repute from the Mexican business and financial
communities and, if they are able to agree upon such Persons, the BEL
Shareholder Group and the Xxxxxxx Shareholder Group agree to vote their
Series A Shares to elect such Persons as Series A Directors; provided that,
absent such agreement, the majority of the Series A Shares shall nominate and
elect the remaining six (6) Series A Directors and their respective
alternates.
The beneficial owners of the Series B Shares shall be entitled to
nominate and elect nine (9) Series B Directors and their alternates. The
beneficial owners of the Series D Shares shall be entitled to nominate and
elect one (1) Series D Director and such Series D Director's alternate, and
the beneficial owners of the Series L Shares shall be entitled to nominate
and elect one (1) Series L Director and such Series L Director's alternate;
provided, however, that the beneficial owners of the Series D Shares shall be
entitled to nominate and elect two (2) Series D Directors and their
alternates in the event the total number of Series D Shares which are
authorized under the Bylaws or outstanding equals or exceeds 20% of the
number of authorized or outstanding shares of capital stock of the
Corporation, and the beneficial owners of the Series L Shares shall be
entitled to nominate and elect two (2) Series L Directors and their
alternates in the event the total number of Series L Shares which are
authorized under the Bylaws or outstanding equals or exceeds 20% of the
number of authorized or outstanding shares of capital stock of the
Corporation.
The Series A Directors shall serve at the pleasure of the
beneficial owners of the Series A Shares (the majority of which shall have
the right to remove and replace Series A Directors, other than the two (2)
Series A Directors nominated by the Xxxxxxx Shareholder Group, who may be
removed and replaced only by the holders of the majority of Series A Shares
held by the Xxxxxxx Shareholder Group), and the Series B Directors shall
serve at the pleasure of the beneficial owners of the Series B Shares (the
majority of which shall have the right to remove and replace Series B
Directors). Alternate Directors for each Series shall be appointed as set
forth above (which alternates shall serve in place of any Director or
Directors for whom such alternate has been elected as an alternate) and, in
the event that for any reason whatsoever a Director ceases to or is unable to
continue or perform in his capacity as Director, he will be replaced by an
alternate so appointed. The quorum for meetings of the Board of Directors
held following any call shall be a majority of all Directors, one of whom
must be a Series A Director and one of whom must be a Series B Director.
(b) Subject to the other provisions of this Agreement, the Board
of Directors, by majority vote, shall elect or appoint, or cause to be
elected or appointed, the Corporation Officers, Subsidiary Officers (to the
extent not restricted by law, contract or otherwise) and employees or agents
of the Corporation or any Subsidiary
in any manner it deems appropriate; provided, however, that (i) the Chairman
of the Board of Directors shall be Xxxxx Xxxxxxx until his resignation or
retirement from such position, disability or death, (ii) the Vice Chairman of
the Board of Directors shall be Xxxxxxxx X. Xxxxxx, Xx. until his resignation
or retirement from such position, disability or death (provided that in any
such case a successor shall be nominated by the Series B Directors and
elected by the holders of a majority of the Series A Shares and Series B
Shares and the Xxxxxxx Shareholder Group shall vote the Series A Shares
beneficially owned by them in favor of such nominees), or his or one of his
successors' promotion to Chairman of the Board of Directors pursuant to the
next clause (at which time the office of Vice Chairman of the Board of
Directors shall terminate), (iii) in the event Xxxxx Xxxxxxx resigns or
retires from the position of Chairman of the Board of Directors or becomes
disabled or deceased, Xxxxxxxx X. Xxxxxx, Xx. or a successor as Vice Chairman
of the Board of Directors shall automatically become Chairman of the Board of
Directors (at which time the office of Vice Chairman of the Board of
Directors shall terminate); and (iv) in the event Xxxxxxxx X. Xxxxxx, Xx., or
a successor as Vice Chairman of the Board of Directors shall become Chairman
of the Board of Directors and thereafter resigns or retires from the position
of Chairman of the Board of Directors or becomes disabled or deceased at any
time, his successor shall be nominated by the Series B Directors and elected
by the holders of a majority of the Series A Shares and Series B Shares, and
the Xxxxxxx Shareholder Group shall vote the Series A Shares beneficially
owned by them in favor of such nominee. Notwithstanding anything to the
contrary herein or in the Bylaws, neither the Chairman of the Board of
Directors nor the Vice Chairman of the Board of Directors shall have any
right or power to cast any additional vote to break a tie or deadlock. The
number and types of employees hired, retained or dismissed by the Corporation
and the Subsidiaries shall be consistent with the scope of the operations of
the Corporation and the Subsidiaries and the Annual Plan. Subject to the
other provisions of this Agreement, the Board of Directors shall use its best
efforts to elect or appoint, or cause to be elected or appointed, the
Subsidiary Officers of Subsidiaries that are not wholly-owned.
(c) The Shareholders or, if so authorized, the Board of Directors
shall appoint such committees as they deem appropriate, with the authority to
act on all matters delegated to such committee in accordance with the Bylaws.
Such committees shall be comprised of members of the Board or Directors
and/or their alternates who shall be nominated by the majority of the members
of the Board of Directors elected pursuant to Section 3.1(a), and the Xxxxxxx
Shareholder Group shall vote the Shares beneficially owned by them in favor
of such nominees; provided, however, that the Xxxxxxx Shareholder Group shall
have the right to nominate two (2) members of the Executive Committee and one
(1) member of each other committee and the BEL Shareholder Group shall vote
the Shares beneficially owned by them in favor of such nominees. Committee
action will be effective only if (i) approved by a majority of the members of
such committee present at such meeting and voting thereon, and (ii) at least
one Series A Director and one Series B Director shall have voted to approve
such action as part of said majority; provided, however, where any
such action would, if considered by the Board of Directors, require a
Supermajority Vote, such action will be effective only if approved by a
Series A Director or Series D Director nominated by the Xxxxxxx Shareholder
Group pursuant to Section 3.1(a). The quorum for each committee meeting shall
be a majority of the members of such committee, one of whom must be a Series
A Director and one of whom must be a Series B Director. Such committees shall
include an executive committee, a finance and audit committee, a human
resources and compensation committee, and a strategic planning and technology
committee, the duties and functions of which committees are set forth in the
Bylaws. The Executive Committee shall meet monthly, provided that one out of
every two Executive Committee meetings may be held by telephone conference
call.
(d) The Series A Directors and Series B Directors shall consult
with each other and, when appropriate, with the Corporation's Chief Executive
Officer, President and Chief Operating Officer in connection with the
nomination, hiring, reassignment or dismissal of the other Officers of the
Corporation. The power to appoint and dismiss the Chief Executive Officer,
the President, the Chief Operating Officer and the Director of the Cellular
Division of the Corporation shall reside with Xxxxxxxx X. Xxxxxx, Xx. or any
of his successors as Vice Chairman of the Board of Directors or as Chairman
of the Board of Director after Xxxxxxxx X. Xxxxxx, Xx. or one of his
successors becomes Chairman of the Board of Directors in accordance with
clause (b) above, provided that the Series B Designated Director must agree
in writing to such appointment or dismissal. The power to dismiss all other
Officers shall reside with the Chief Executive Officer, subject to clause (e)
below.
(e) The Series B Officers shall be nominated by the Series B
Directors and the Series A Directors must vote to elect such nominees. The
power to nominate replacements for any Series B Officer (whether he has been
dismissed, has resigned or his term has expired) shall reside with the Series
B Directors, and the Series B Directors (acting by majority vote) can dismiss
any of the Series B Officers. Any replacement for a Series B Officer who was
dismissed by any Person other than the Series B Directors shall have a
minimum tenure of one year before such replacement may be dismissed by any
Person other than the Series B Directors.
(f) The Xxxxxxx Shareholder Group shall be entitled to nominate
one (1) Director of the board of directors of each wholly-owned Subsidiary,
and the BEL Shareholder Group and the Xxxxxxx Shareholder Group shall cause
the Corporation to elect each such Person so nominated as a director of the
corresponding wholly-owned Subsidiary; provided, however, that such nominee
shall not be Xxxxxx Xxxxxxx.
3.2. Actions of Board of Directors and Shareholders.
(a) Except as otherwise expressly provided herein, by law or in
the Bylaws, all actions of the Board of Directors or shareholders of the
Corporation shall be taken upon or pursuant to a majority vote of the Board
of Directors or of the
beneficial owners of Shares entitled to vote, respectively.
(b) The Corporation, the Board of Directors and the Shareholders
shall not (and, where specified below, the Corporation shall cause the
wholly-owned Subsidiaries to not, and shall use its best efforts to cause,
subject to the rights of minority shareholders, the Subsidiaries that are not
wholly-owned to not) take any of the actions, enter into any commitment to
take any of the actions, or otherwise agree to take any of the actions,
specified below unless such action has been first approved by a Supermajority
Vote:
(i) the acquisition by the Corporation or any Subsidiary of
any business which is not a Telecommunications Business for a purchase
price in excess of U.S.$30,000,000 in the aggregate;
(ii) the entering into or approval by the Corporation or any
Subsidiary of any joint venture, partnership or merger plan or transaction
within the Telecommunications Business which involves the investment of
more than, or the merger with a business with assets which exceed,
U.S.$100,000,000 in the aggregate (other than any plan to merge or
consolidate with the properties controlled by Affiliates of Motorola, Inc.
in Regions 1, 2, 3 and 4);
(iii) the making by the Corporation or any Subsidiary, within
any twelve month period, of sales of assets (other than sales of inventory
in the ordinary course of business) or businesses for consideration which,
in the aggregate, exceeds U.S.$30,000,000;
(iv) the incurrence, from and after January 1, 1998, in a
single transaction or in a series or related transactions within any
twelve month period, of any Indebtedness by the Corporation or any
Subsidiary in an amount exceeding U.S.$100,000,000 in the aggregate (other
than Indebtedness which constitutes financing for commitments of the
Corporation or any Subsidiary existing as of the date hereof, the
refinancing or successive refinancing of Indebtedness of the Corporation
or any Subsidiary existing as of the date hereof, Indebtedness which
constitutes vendor financing, Indebtedness which constitutes project
financing and the Indebtedness contemplated to be issued by the
Corporation pursuant to the 1996 Share Conversion Agreement);
(v) the issuance of capital stock of the Corporation or any
Subsidiary, in a single transaction or in a series of related transactions
within any twelve month period, in an amount exceeding U.S.$50,000,000 in
the aggregate (other than capital stock of the Corporation issued pursuant
to the 1996 Share Conversion Agreement or any of the transactions
contemplated therein or any plan to merge or consolidate with the
properties controlled by Affiliates of Motorola, Inc. in Regions 1, 2, 3
and 4);
(vi) the Corporation or any Subsidiary's entering into,
amending
the terms of or terminating Contracts or transactions with or for the
benefit of: (A) any of their respective Affiliates (other than
transactions solely between or among wholly-owned Subsidiaries or solely
between or among the Corporation and one or more of its wholly owned
Subsidiaries); (B) any of the signatories hereto or their Affiliates, or
(C) any Xxxxxxx Family Member; provided, however, that no Supermajority
Vote approval shall be required for any renewal, extension, successive
renewal or successive extension, on substantially similar terms and
conditions (provided that the parties thereto may be Affiliates of the
current parties), of (x) the Master Technical Services Agreement by and
between Xxxx Atlantic International, Inc. and Sistecel, S.A. de C.V.
effective as of January 1, 1994, and (y) the Agreement for the
Reimbursement of Compensation Expense (Secondment Agreement) by and
between Xxxx Atlantic International, Inc. and Sistecel, S.A. de C.V.
effective as of January 1, 1995; provided further, however, that the
aggregate payments to Xxxx Atlantic International, Inc. or one of its
Affiliates in any one calendar year under the Master Technical Services
Agreement referred to in clause (x) above or any renewal, extension,
successive renewal or successive extension thereof cannot exceed U.S.
$3,000,000 without a Supermajority Vote and that the aggregate payments to
Xxxx Atlantic International, Inc. or one of its Affiliates in any one
calendar year under the Agreement for the Reimbursement of Compensation
(Secondment Agreement) referred to in clause (y) above or any renewal,
extension, successive renewal or successive extension thereof cannot
exceed U.S. $10,000,000 without a Supermajority Vote;
(vii) the termination or disposition by the Corporation or any
Subsidiary of the cellular, fixed wireless, long distance or satellite
transmission business in which it is engaged (or the related assets),
including the termination by the Corporation or any Subsidiary of the
provision of cellular, fixed wireless local telephony, long distance or
satellite transmission services in any Region or in any other contiguous
geographic area from which consolidated annual revenues from the service
proposed to be terminated by the Corporation or a Subsidiary in each of
the two most recent fiscal years were more than U.S. $10,000,000; and
(viii) the making by the Corporation or any Subsidiary of any
request or application, or the taking by the Corporation or any Subsidiary
of any other action, to terminate any Concession relating to cellular,
fixed wireless local telephony, long distance or satellite transmission
service, including, without limitation, any application to eliminate radio
spectrum licensed or granted to the Corporation or any Subsidiary for such
services.
(c) The Corporation, the Board of Directors and the Shareholders
shall not (and, where specified below, the Corporation shall cause the
wholly-owned Subsidiaries to not, and shall use its best efforts to cause,
subject to the rights of minority shareholders, the Subsidiaries that are not
wholly-owned to not) take any of
the actions, enter into any commitment to take any of the actions, or otherwise
agree to take any of the actions, specified below unless such action has been
first approved by the Series B Designated Director:
(i) the issuance of capital stock of the Corporation or any
Subsidiary (other than capital stock of the Corporation issued pursuant to
the Share Purchase Agreement or any of the transactions contemplated
thereby, and the 1996 Share Conversion Agreement or any of the
transactions contemplated thereby), or any recapitalization or other
change in the capital or capital structure of the Corporation or any
Subsidiary (including, without limitation, any stock split or conversion
of stock to another Series or any determination that the Corporation or
any Subsidiary requires additional financial support from the
Shareholders, whether by means of additional capital contributions, loans,
guarantees or otherwise or any granting of registration rights with
respect to the capital stock of the Corporation or any Subsidiary;
(ii) the acquisition by the Corporation or any Subsidiary of
any of its respective securities or any of each other's securities;
(iii) the declaration or payment of dividends or other
distributions to any security holder of the Corporation either (A) in any
fiscal year, in excess of twenty-five percent (25%) of consolidated net
income for the prior fiscal year (consolidated net income shall be
calculated in accordance with Mexican GAAP provided that if such amount is
more than one hundred and ten percent (110%) of consolidated net income
under U.S. GAAP for the same period, then consolidated net income shall be
calculated in accordance with U.S. GAAP for purposes of subclause (A) of
this clause (iii) and for purposes of Section 3.7) or (B) except as
otherwise contemplated in Section 3.7, which would trigger a Mexican tax
upon payment to any Shareholder;
(iv) the declaration or payment of dividends (except as
otherwise required by any Contract listed on Schedule 3.2(b)(iv) of the
Original Shareholders Agreement and any future Contract approved by a
Supermajority Vote or by the Series B Designated Director pursuant to this
Section 3.2(c)) or other distributions to any security holder (other than
the Corporation or a wholly-owned Subsidiary of the Corporation) of any
Subsidiary;
(v) the increase or decrease of the number of Directors
comprising the Board of Directors, or any such change to the board of
directors of any Subsidiary;
(vi) the termination or disposition of a business or a line of
business (or the related assets) of the Corporation or any Subsidiary,
including the termination, by the Corporation or any Subsidiary, of the
provision of goods or services in a geographic area; provided, however,
that the termination of a
line of business, from which consolidated annual revenues in each of the
two most recent fiscal years of the Corporation were less than
U.S.$1,000,000, shall not require approval of the Series B Designated
Director;
(vii) the commencement of any business or line of business by
the Corporation or any Subsidiary (by start-up, acquisition, expenditure
or otherwise), or the expansion of the scope of any business or line of
business into any country other than Mexico, except for the following
businesses or lines of business in the following countries: (A) the
ownership, management, operation and maintenance of networks for the
transmission by the Corporation or any Subsidiary, wholly within the
national borders of Mexico, of data and voice signals using cellular
technology and spectrum in the 000-000 XXx xxx 000-000 XXx xxxxxx, (X) any
action or transaction in any country contemplated under an Annual Plan
approved in accordance with clause (xx) of this Section 3.2(c); and (C)
the provision of domestic cellular service and long distance to customers
receiving such cellular service in Ecuador;
(viii) the incurrence, in a transaction or series of related
transactions, of any Material Indebtedness by the Corporation or any
Subsidiary, the incurrence within any twelve-month period of Indebtedness
by the Corporation or the Subsidiaries which in the aggregate exceeds
U.S.$20,000,000, the extension of any loan or guaranty, or series of
related loans or guaranties, by the Corporation or any Subsidiary in an
amount exceeding U.S.$5,000,000 or the extension, within any twelve-month
period, of loans or guaranties by the Corporation or any Subsidiary which
in the aggregate exceed U.S.$20,000,000;
(ix) the making by the Corporation or any Subsidiary, in a
transaction or series of related transactions, of any Material sale of
assets or sale of business or any Material acquisition of or investment in
assets, or a business, or, whether or not Material, any acquisition of or
investment in equity securities (including securities convertible into
equity securities) issued by, or an equity interest in, any Person;
(x) the making by the Corporation or any Subsidiary, within
any twelve-month period, of sales of assets (other than sales of inventory
in the ordinary course of business), or businesses which in the aggregate
exceed U.S.$20,000,000, or of acquisitions of or investments in assets
(other than inventory acquired in the ordinary course of business) or
businesses which in the aggregate exceed U.S.$20,000,000;
(xi) the Corporation's or any Subsidiary's entering into,
amending the terms of or terminating Contracts or transactions with or for
the benefit of (A) any of their respective Affiliates (other than
transactions solely between or among wholly-owned Subsidiaries or solely
between or among the Corporation
and one or more of its wholly-owned Subsidiaries), (B) any of the
signatories hereto or their Affiliates or (C) any Xxxxxxx Family Member;
(xii) the entering into or approval by the Corporation or any
Subsidiary of any transaction or plan of merger, consolidation,
dissolution or liquidation;
(xiii) the subjection of any Concession to any Lien, or,
except in the ordinary course of business to secure an obligation of the
Corporation or a Subsidiary that is not for a Material amount, the
subjection of any other property or assets of the Corporation or any
Subsidiary to any Lien;
(xiv) the making by the Corporation or any Subsidiary of any
request or application to obtain, modify or terminate any Concession
including, without limitation, any application to eliminate, add to or
modify radio spectrum licensed or granted to the Corporation or any
Subsidiary, or the taking of any other action to obtain, modify or
terminate any Concession granted to the Corporation or any Subsidiary or
the willful failure to take any action necessary to maintain or protect
any such Concession;
(xv) the amendment or modification of the Bylaws or the
estatutos sociales of any Subsidiary, or the amendment or modification, or
consent or approval thereto or thereof, to the organizational or governing
documents (including, without limitation, estatutos sociales) of any
Person in which the Corporation or any Subsidiary has a direct or indirect
equity interest (including, without limitation, the amendment or
modification of the stated purpose of any such Person as stated in any
such documents);
(xvi) the appointment, nomination, election, removal,
dismissal or replacement of the Corporation's Officers or any Subsidiary
Officer (subject to the terms of, and except as otherwise provided in,
Section 3.1), or a change in the remuneration of the Chairman of the Board
of Directors, the Vice Chairman of the Board of Directors, the Chief
Executive Officer or any other employee of the Corporation or a Subsidiary
who is a Xxxxxxx Family Member and who would be compensated, following the
taking of such action, at a rate in excess of U.S.$50,000 on an annualized
basis (which amount shall be calculated to include the value of any fringe
benefits not given to substantially all employees of the Corporation and
the Subsidiaries);
(xvii) any appointment or removal of Accountants or any
approval of financial statements of the Corporation or any Subsidiary;
(xviii) the entering into of any Material Contract (or series
of related Contracts that together are Material) by the Corporation or any
Subsidiary;
(xix) the making of any Tax election or the adoption of any
Tax accounting method by the Corporation or any Subsidiary for Tax
purposes, or any agreement or settlement with any Governmental Entity in
connection with the Tax returns or Tax obligations of the Corporation or
any Subsidiary;
(xx) the approval or modification of the annual three-year
strategic plan or the Annual Plan or any deviation from actions required
to be taken under the Annual Plan;
(xxi) (A) the approval of the terms or the making of any
private or public offering or sale by the Corporation or any Subsidiary of
securities of the Corporation or any Subsidiary or (B) the approval of any
documentation or communication prepared or otherwise made by or in the
name of the Corporation or any Subsidiary for any private or public
offering or sale of securities of the Corporation or any Subsidiary;
(xxii) the authorization or granting of any general or limited
power of attorney to any Person by the Corporation or any Subsidiary;
(xxiii) the sharing with any Person or disposition of any
non-public or proprietary technology of the Corporation or any Subsidiary;
(xxiv) except for the gifts and donations set forth in
Schedule 3.2(b)(xxv) of the Original Shareholders Agreement, the making of
any gift or donation, or series of related gifts or donations, in an
amount exceeding U.S.$5,000 in any calendar year to any Person by the
Corporation or any Subsidiary;
(xxv) any institution, settlement or default with regard to
any Material (or potentially Material) litigation involving the
Corporation or any Subsidiary, or any settlement or default with regard to
any litigation (whether or not Material) in which any Shareholder, any of
the signatories hereto or their Affiliates, or any Xxxxxxx Family Member
has interests adverse to the Corporation or any Subsidiary; and
(xxvi) the agreement by the Corporation or any Subsidiary to
be bound by any Contract to not compete with another Person or otherwise
not engage in any business.
3.3 Annual Plan and Three-Year Strategic Plan. The Shareholders will
cooperate to cause the majority of the Directors to agree upon an annual
three-year strategic plan and an Annual Plan that is acceptable to the
Shareholders.
An action which requires a Supermajority Vote and/or the approval of the
Series B Designated Director and which is contemplated under an Annual Plan
shall not be deemed to have been approved by Supermajority Vote and/or the
approval of the
Series B Designated Director, as appropriate, unless (a) the subsection of
Section 3.2(b) and/or Section 3.2(c) which pertains to such action explicitly
states that approval by Supermajority Vote and/or the Series B Designated
Director is unnecessary because of approval of the Annual Plan, (b) the action
was clearly and accurately described in the Annual Plan, and (c) the Annual Plan
presented to the Board of Directors and approved by it explicitly stated that
the particular action, as approved, is a "Supermajority Action Item."
3.4. Contracts with Affiliates. The Corporation will not, and will not
permit any Subsidiary to, enter into any Contract or transaction with or for the
benefit of any of their Affiliates (other than transactions with, between or
among wholly-owned Subsidiaries), any of the signatories hereto or their
Affiliates, or any Xxxxxxx Family Member which is not at prices and on other
terms at least as favorable to the Corporation or the Subsidiary as those which
could be obtained on an arms-length basis from an unaffiliated third party.
3.5. Limitation on Acts of Shareholders. Except to the extent expressly
provided herein, no Shareholder in such capacity shall have the power to bind or
commit the Corporation or any other Shareholder to any obligation or Contract
with any third party.
3.6 Conditions to Offerings. The parties acknowledge and agree that, among
other conditions that the Series B Directors may establish from time to time in
connection with their vote on any matter, the Series B Directors shall have the
right to condition any approval regarding any private or public offering or sale
of securities of the Corporation or any Subsidiary upon the timely receipt prior
to the closing of any such transaction by the BEL Shareholder Group of a
"comfort letter" from the Accountants relating to such transaction in form and
substance reasonably acceptable to the Series B Directors or the BEL Shareholder
Group, and upon the Series B Directors' satisfaction with the form and substance
of any documentation or communication proposed to be used in connection with any
such offering or sale.
3.7 Dividends. Each of the BEL Shareholder Group and the Xxxxxxx
Shareholder Group shall have the right to unilaterally require that the
Corporation pay dividends during any fiscal year in an amount of up to twenty
five percent (25%) of the Corporation's consolidated net income (calculated in
accordance with Section 3.2(c)(iii)) for such fiscal year; provided that such
payment of dividends is not prohibited by applicable law or any contract of the
Corporation and does not adversely affect the reasonably foreseeable cash flow
or capital requirements of the Corporation. Each time that the BEL Shareholder
Group or the Xxxxxxx Shareholder Group exercises its rights pursuant to this
Section 3.7, the Shareholders shall vote, and shall cause the Series A
Directors, Series B Directors and Series D Directors to vote, in favor of the
prompt payment of the required dividend.
ARTICLE IV
ACCOUNTS, REPORTS, RIGHT OF INSPECTION
AND OTHER FINANCIAL MATTERS
4.1. Fiscal Year. The fiscal year of the Corporation and each Subsidiary
shall end on December 31 of each year.
4.2. Books, Records and Reports.
(a) The Corporation shall maintain, and shall cause each Subsidiary
to maintain, proper books and accounts on an accrual basis and in accordance
with Mexican GAAP. Such books and records shall also be maintained in such a
manner as to permit the preparation of quarterly and annual reports in
accordance with U.S. GAAP. The books and records of the Corporation and the
Subsidiaries shall be kept in the Spanish language, except that books and
records maintained in a country, other than Mexico, in connection with the
Corporation's or a Subsidiary's conduct of business in such country may be
maintained in the official language of such country. This Agreement, the minute
books, the reports referenced in Section 4.2(b) below, any special reports a
Shareholder shall from time to time request and the Annual Plans and three-year
strategic plans shall be kept in both the Spanish and English languages and as
between the Shareholders, or as between the Shareholders and the Corporation or
any Subsidiary, the English language version of any such documents, other than
the minute books, shall govern and be controlling. As to the minute books, as
between the Shareholders, or as between the Shareholders and the Corporation or
any Subsidiary, the Spanish language version shall govern and be controlling.
Each director and Shareholder shall be permitted to bring an interpreter to any
meeting attended by such director or shareholder. Annually upon the close of the
year (and at such other times as shall be approved by the Board of Directors),
all such books and accounts shall be audited by the Accountants.
(b) Each Shareholder shall be furnished with the following:
(i) within 21 days after the end of each calendar month, an
unaudited monthly consolidated and consolidating statement of income,
sources and uses of cash, and an unaudited consolidated and consolidating
month-end balance sheet for the Corporation and each Subsidiary;
(ii) within 30 days after the end of each of the first three
quarters of each fiscal year, an unaudited consolidated and consolidating
balance sheet of the Corporation and each Subsidiary as of the end of such
quarter and the related unaudited statements of income, shareholders'
equity and changes in financial situation for such quarter and for the
year to date, in each case prepared in accordance with Mexican GAAP,
setting forth all adjustments necessary to convert to U.S. GAAP, and
setting forth in comparative form the figures as at the end of and for the
comparable period in the previous fiscal year and such other unaudited
financial and operating informa-
tion as may be reasonably requested by any Shareholder;
(iii) within 60 days after the end of each fiscal year,
audited consolidated and consolidating financial statements, including a
consolidated and consolidating balance sheet of the Corporation and each
Subsidiary as at the end of such year, and the related statement of
income, shareholders' equity and changes in financial situation for such
year, in each case prepared in accordance with each of Mexican GAAP and
U.S. GAAP and setting forth in each case in comparative form the figures
as at the end of and for the previous fiscal year, together with all
necessary footnotes, and the report of the Accountants on such financial
statements; and
(iv) promptly after the sending or receipt thereof, copies of
all communications between the Corporation or any Subsidiary and any
Governmental Entity that relate to any Concession or to compliance with
applicable securities laws.
4.3. Right of Inspection. Each of the Shareholders or its duly authorized
representatives shall have full and complete access, at any time during normal
business hours and upon reasonable notice, to the books and records, accounts,
properties and/or operations of the Corporation and each Subsidiary for the
purposes of inspection, examination or copying or for any other purpose
including, without limitation, an audit of the Corporation or any Subsidiary.
The full cooperation of the Corporation, each Subsidiary, its respective
directors, officers and employees and the Accountants will be extended for such
purposes. Such examination and inspection may be conducted by a Shareholder's
employees, by its independent certified public accountants and/or by its other
agents. The Corporation shall also furnish, and shall cause each Subsidiary to
furnish, to each Shareholder such other records, reports and data as such
Shareholder may reasonably require for compliance with legal and contractual
obligations, including Mexican and U.S. tax reporting requirements.
4.4. Financial Policy Control.
(a) Overall Policy. The overall financial policy of the Corporation
and each Subsidiary shall be established by the Board of Directors in accordance
with the provisions of Section 3.2.
(b) Annual Operating and Capital Budgets. The Annual Plan and a
three-year strategic plan forecasting annual financial performance for such
period will be prepared by the President pursuant to policies established by the
Board of Directors and submitted to the Board of Directors for approval pursuant
to Section 3.2. All plans and budgets will be divided by Region for Mexico and
by country elsewhere. The President shall circulate successive drafts of each
year's Annual Plan and three-year strategic plan to the Shareholders for review
prior to submission to the Board of Directors. The President shall submit to the
Board of Directors no later than October
15 of each year his final proposed Annual Plan and three-year strategic plan for
the period beginning on the next January 1st. The President shall consult with,
and afford all Shareholders reasonable opportunity to comment on, each
successive draft as well as the final version of the Annual Plan and the
three-year strategic plan to be submitted to the Board of Directors.
4.5 Dividend Instructions. The Corporation shall comply with any and all
lawful instructions of any Shareholder as to the method of making any dividend
payment or payments to or on behalf of said Shareholder or of depositing or
utilizing such payment or payments.
ARTICLE V
NON-COMPETITION; CERTAIN CORPORATE
OPPORTUNITIES; CONFIDENTIALITY
5.1 Certain Definitions. For purposes of this Article V only:
(a) The term "Acquisition" means the acquisition, in a single transaction
or series of related transactions, of some or all of the equity securities or
assets of a Person or a Group (as hereinafter defined), if such Person or Group
(in the case of an acquisition of securities) engages in the Telecommunications
Business in Mexico or if such assets (in the case of an acquisition of assets)
are used and/or are contemplated to be used following such acquisition to engage
in the Telecommunications Business in Mexico.
(b) The term "Merger" means the merger or consolidation with or into a
Person or Group if such Person or Group engages in the Telecommunications
Business in Mexico.
(c) The term "Group" means a group of Persons who are Affiliates of each
other.
(d) To "engage in" the Telecommunications Business means: (i) actively
engaging in, supervising or managing such business; or (ii) entering into or
attempting to enter into such business, either alone or with any other Person or
Group.
(e) The term "Publicly Traded" shall mean, as to securities, securities
listed on the Mexican Bolsa de Valores, registered under the Exchange Act, or
listed or traded on any European or Asian stock exchange.
(f) Xxxxxxx Family Members shall be considered to be Affiliates of members
of the Xxxxxxx Shareholder Group.
5.2. Non-Competition. Except as otherwise set forth in this Section 5.2
and in Section 5.3, each Shareholder covenants and agrees that neither it nor
any of its Affiliates (other than the Corporation and the Subsidiaries) will,
directly or indirectly,
on behalf of itself or on behalf of any other Person, engage in the
Telecommunications Business in Mexico. Notwithstanding anything to the contrary
contained in this Article V (other than the immediately succeeding paragraph
except for subparagraph (d)), each Shareholder covenants and agrees that neither
it nor any of its Affiliates (other than the Corporation and the Subsidiaries)
shall (i) provide consulting services, advisory services or software with
respect to the Telecommunications Business in Mexico to Telefonos de Mexico,
S.A. de C.V., its successors, or any of its or their subsidiaries, or any other
major direct competitor of the Corporation in Mexico, or (ii) directly or
indirectly market, on a wholesale, retail or reseller basis, any services with
respect to the Telecommunications Business in Mexico provided by Telefonos de
Mexico, S.A. de C.V., it successors, or any of its or their subsidiaries, or any
other major direct competitor of the Corporation in Mexico. Except as stated in
the preceding sentence, nothing in this Section 5.2 shall be deemed to prohibit
a Shareholder or any of its Affiliates from providing consulting services,
advisory services or software with respect to the Telecommunications Business in
Mexico.
The preceding paragraph of this Section 5.2 shall not prohibit the
Shareholders from directly or indirectly engaging in the Telecommunications
Business in the following instances:
(a) A Shareholder and/or any of its Affiliates may own, in the
aggregate, not more than 5% of any Publicly Traded securities of a Person,
provided that such ownership represents a passive investment and neither such
Shareholder nor its Affiliates in any way, either directly or indirectly,
manages or exercises control over any such Person, guarantees any of such
Person's financial obligations, otherwise takes any part in such Person's
business (other than exercising the rights of the Shareholder or Affiliate as a
passive shareholder), or seeks to do any of the foregoing, except as otherwise
permitted under this Article V.
(b) Subject to Section 5.5, a Shareholder or any of its Affiliates
may engage in a Telecommunications Business in Mexico if such engagement in a
Telecommunications Business results from an Acquisition by, or Merger involving,
such Shareholder or any of its Affiliates, unless a significant part of the
assets directly or indirectly acquired in such Acquisition or Merger are used to
engage in Telecommunications Businesses in Mexico. Such test for significance
shall be met only if both of the following conditions are met: (A) the net book
value of any such assets directly or indirectly acquired in such Acquisition or
Merger that are used primarily to engage in Telecommunications Business in
Mexico exceeds ten percent (10%) of the net book value of all assets directly or
indirectly acquired in such Acquisition or Merger; and (B) the total revenues
derived in the calendar year immediately preceding such Acquisition or Merger
primarily from the Telecommunications Business in Mexico acquired in such
Acquisition or Merger exceeds ten percent (10%) of the total revenues during
such year of the Person or Group whose assets or securities the Shareholder (or
any Affiliate) acquired in any such Acquisition or with or into which the
Shareholder (or any Affiliate) merged or consolidated with or into as a result
of such Merger.
(c) The Shareholders and their respective Affiliates may provide
telecommunications goods in Mexico.
(d) Subject to the first paragraph of this Section 5.2, a
Shareholder or any of its Affiliates may engage in a Telecommunications Business
in Mexico if the Opportunity (as defined below) was brought to the Corporation
in accordance with Section 5.3 and the terms of such Section permit such
Shareholder or Affiliate to engage in such Telecommunications Business.
(e) The Xxxxxxx Shareholder Group or its Affiliates may engage in a
Telecommunications Business in Mexico if and to the extent the BEL Shareholder
Group has determined that the Corporation and the Subsidiaries may not engage in
such Telecommunications Business pursuant to Section 10.2(c).
(f) The Shareholders and their Affiliates may provide to, or
purchase from, any Person tariffed services and any other services which must be
provided by virtue of the provider's status as a common carrier or by virtue of
a legal or regulatory requirement.
(g) A Shareholder's Affiliate that, at the time hereof or in the
future, provides telecommunications services in countries outside of Mexico,(i)
may provide transit to or through Mexican carriers, (ii) may provide facilities
for the termination of traffic outside of Mexico that originates within Mexico,
(iii) may provide facilities for the origination of traffic outside of Mexico
that terminates in Mexico and (iv) may freely obtain transit facilities within
Mexico. A Shareholder's Affiliate may also freely contract for and provide
roaming services for its own subscribers in Mexico, and may provide roaming
services within its own service area for subscribers of other cellular carriers.
(h) Subject to Section 5.2(a) and 5.5, a Shareholder and/or any of
its Affiliates may continue to own and hold (and need not Transfer in whole or
in part) any interest in a Person which has Publicly Traded equity securities
if, at the time such interest was acquired, such Person did not engage, and to
the knowledge of the Shareholder or its Affiliates did not intend to engage, in
the Telecommunications Business in Mexico but after such interest was acquired
such Person began to engage in the Telecommunications Business in Mexico.
5.3. Corporate Opportunities. Each Shareholder agrees that it shall bring
to the Corporation any and all opportunities in respect of the
Telecommunications Business in Mexico (each an "Opportunity") available to it or
its Affiliates other than the Opportunities described in Sections 5.2(a)-(c) and
(e)-(h) above.
Once an Opportunity is brought to the Corporation by written notice to the
Chairman of the Board of Directors and the Vice Chairman of the Board of
Directors describing the terms of such Opportunity in reasonable detail, the
Shareholder and/or any Affiliate shall be free to engage in the
Telecommunications Business to which
such Opportunity relates either (i) to the full extent of such Opportunity, if
the Corporation declines to participate in such Opportunity pursuant to this
Section 5.3 and Section 5.4 or, (ii) in the event the Corporation elects to
participate only in part in such Opportunity, to the extent of any interest the
Corporation does not take pursuant to this Section 5.3 and Section 5.4.
If with respect to an Opportunity that the Shareholder is required to
bring to the Corporation pursuant to this Section 5.3, the investment
Opportunity available to the Shareholder (or Affiliate of the Shareholder) is
not at the corporate or entity level of the Telecommunications Business in
Mexico (but is rather at the parent company level or at another level between
the parent company level and the corporate or entity level of such
Telecommunications Business in Mexico) the Shareholder shall offer to sell the
required interest to the Corporation at the corporate or entity level of such
Telecommunications Business in Mexico unless, in the opinion of the Shareholder,
it is impracticable to make such offer at such level, in which case such offer
shall be made at the level at which the Opportunity is available to the
Shareholder (or Affiliate). If such offer is made at the level at which the
Opportunity is available to the Shareholder (or Affiliate), the offered interest
shall equal 100% of the quotient of the value of such Telecommunications
Business in Mexico divided by the total value of the Opportunity available to
the Shareholder (or Affiliate), determined as of the date of such Acquisition or
Merger. The price to be paid by the Corporation for any such interest offered to
it shall equal the proportional price paid for such Opportunity by the
Shareholder (or Affiliate), if readily determinable from the total Acquisition
or Merger price, or, if not readily determinable therefrom, shall equal the fair
market value of the Opportunity presented to the Corporation.
5.4. Special Vote. The Chairman of the Board of Directors, the Vice
Chairman of the Board of Directors or the Executive Committee shall promptly
call a special meeting of the Board of Directors to be held within 15 days
following written notice of any Opportunity offered by a Shareholder pursuant to
Section 5.3 or any offer pursuant to Section 5.4(a) or (b). At such meeting, the
Board of Directors, acting pursuant to a Special Vote (as hereinafter defined),
shall determine whether the Corporation wishes to pursue such Opportunity (in
whole or in part or not at all) and shall give written notice of such
determination to such Shareholder. If the Corporation gives notice that it does
not wish to pursue such Opportunity or accept such offer, if it gives no notice
within the 15-day period following written notice of any Opportunity, or if it
gives notice of intention to pursue the Opportunity or accept such offer but
then fails to do so within a reasonable period of time, then the Shareholder may
engage in the Telecommunications Business described in its notice without regard
to the terms of Section 5.3. A "Special Vote" means (a) an affirmative vote of
the majority of the Series A Directors and the Series D Directors (not including
the two (2) Series A Directors nominated by the BEL Shareholder Group in
accordance
with Section 3.1(a)) in the case of Opportunities brought by the BEL Shareholder
Group or an Affiliate thereof or (b) an affirmative vote of the Series B
Directors and the two (2) Series A Directors nominated by the BEL Shareholder
Group in accordance with Section 3.1(a) in the case of Opportunities brought by
the Xxxxxxx Shareholder Group, an Affiliate thereof or a Xxxxxxx Family Member;
for purposes of this Section, a Special Vote may occur at a meeting of the Board
of Directors that does not meet the quorum requirements if such quorum
requirements are not met due to the absence of (i) any Series B Director and/or
the two (2) Series A Directors nominated by the BEL Shareholder Group in
accordance with Section 3.1 (a) in the case of Opportunities brought by the BEL
Shareholder Group or an Affiliate thereof or (ii) any Series A Director and/or
Series D Director in the case of Opportunities brought by the Xxxxxxx
Shareholder Group, an Affiliate thereof or a Xxxxxxx Family Member.
5.5 Disposition Requirement. If a Shareholder or any of its Affiliates
shall engage in the Telecommunications Business in Mexico as permitted by
Sections 5.2(b) or 5.2(h) and the Person engaging in such Telecommunications
Business becomes a major direct competitor of the Corporation, the Corporation
may notify the Shareholder of such fact. If such notice is given, the
Shareholder shall, within 60 days of receipt of such notice, either (a) offer
(or cause the relevant Affiliate to offer) the Corporation the opportunity to
purchase a 100% interest in the Shareholder's or such Affiliate's share of such
Telecommunications Business in Mexico at a price equal to 100% of the fair
market value of the Shareholder's (or its Affiliate's) interest and otherwise on
the same terms and conditions as are then applicable to the Shareholder or such
Affiliate, (b) if the Telecommunications Business in Mexico is not at the
corporate or entity level of the Person in whom the Shareholder or its Affiliate
owns an interest, but is rather at a subsidiary level, and it is impractical for
the Shareholder to offer to sell the required interest to the Corporation at the
corporate or entity level of such Telecommunications Business in Mexico, offer
(or cause the relevant Affiliate to offer) the Corporation the opportunity to
purchase an interest at the level at which the opportunity is available to the
Shareholder or Affiliate (in which case the offered interest shall equal 100% of
the quotient of the value of such Telecommunications Business in Mexico divided
by the total value of the interest owned by and opportunity available to the
Shareholder (or Affiliate), determined as of the date of the proposed sale, and
the price shall be the fair market value of the offered interest), or (c) agree
to divest itself of its interest in such Telecommunications Business in Mexico
within one year of the date of the Corporation's notice, or (d) in the case of
the Xxxxxxx Shareholder Group, offer to sell to the BEL Shareholder Group or its
designee all of its Shares and, in the case of the BEL Shareholder Group, offer
to sell to any one or more members of the Xxxxxxx Shareholder Group all of its
Shares, in each case, at a price equal to the then current market value of such
Shares, or if no market exists for such Shares, at the then fair market value
thereof, in which case the Xxxxxxx Shareholder Group or the BEL Shareholder
Group, as the case may be, shall have 15 days following written notice of such
offer to accept such offer. The fair market value of any series of Shares for
which no market exists shall be the average closing market prices on the New
York Stock Exchange of the Series D American Depositary Shares and the Series L
American Depositary Shares, in each case divided by the number of shares
represented by such American Depositary Share, over the ten trading days
immediately preceding the date of the written notice of such offer.
5.6. Confidentiality.
(a) For purposes of this Agreement, "Confidential Information"
shall mean any financial, technical, operational or other information
(including,without limitation, trade secrets, inventions, processes, customer
lists and know-how) which (i) originates from the Corporation or a Subsidiary in
the course of its business activities and either is conspicuously marked
"confidential", "proprietary" or words of similar meaning, (ii) is provided to
the Corporation or a Subsidiary by a Shareholder or its Affiliates, and is
conspicuously marked "confidential," "proprietary" or words of similar meaning,
(iii) is orally disclosed to a Shareholder or its Affiliates by the Corporation
or a Subsidiary and is identified at the time of disclosure as being
confidential or (iv) is orally disclosed to the Corporation or its Subsidiary by
a Shareholder or its Affiliates and is identified at the time of disclosure as
being confidential.
(b) Any Confidential Information provided to the Corporation or a
Subsidiary by a Shareholder, regardless of whether such information originates
from the Shareholder or any of its Affiliates, shall be and remain the
disclosing Shareholder's exclusive property. For the three (3) year period
following the date of disclosure (or such longer period as the Shareholder
making such disclosure shall reasonably require prior to any such disclosure)
the recipient Shareholder and the Corporation shall (i) keep such Confidential
Information confidential and provide the same to their respective employees and
agents only on a need-to-know basis, (ii) not publish or disclose such
Confidential Information to others without the prior consent of the disclosing
Shareholder, (iii) use such Confidential Information only in connection with the
business of the Corporation and the Subsidiaries, and (iv) promptly return such
Confidential Information to the supplying Shareholder upon the latter's written
request.
(c) For the three-year period after the disclosure by the
Corporation or any Subsidiary of its Confidential Information (or such longer
period as the Corporation shall reasonably require prior to any such disclosure)
the recipient Shareholder and/or its Affiliates, as the case may be, shall (i)
keep such Confidential Information confidential, (ii) not publish or disclose
such Confidential Information to anyone other than its Affiliates without the
prior written consent of the Corporation, and (iii) promptly return such
Confidential Information to the Corporation upon the latter's written request.
(d) The restrictions set forth in clauses (b) and (c) shall cease to
apply or not apply, as the case may be, to any Shareholder, Shareholder's
Affiliate or the Corporation, as the case may be, regarding any Confidential
Information which or whose substance (i) is already in the possession of such
recipient Person without accompanying use or disclosure restrictions prior to
such Person's receipt from the supplying Shareholder, Shareholder's Affiliates
or the Corporation, as the case may be; (ii) becomes or has been made publicly
available by any Person other than the
recipient Shareholder, Shareholder's Affiliate or the Corporation; or (iii) has
been independently developed by the recipient Shareholder, Shareholder's
Affiliate or the Corporation prior to such Person's receipt of the related
Confidential Information. Additionally, neither any Shareholder or Shareholder's
Affiliate nor the Corporation shall be deemed in breach of this Section 5.6 if
it discloses Confidential Information in the course of any legal or regulatory
proceeding or to any Governmental Entity pursuant to lawful demand made therein
or thereby or if such disclosure is otherwise required by law (including
applicable securities laws); provided however, that if a Shareholder, such
Shareholder's Affiliate or the Corporation receives any such demand or otherwise
believes it is compelled by law to disclose Confidential Information of the
other Shareholder or the Corporation, such recipient shall give written notice
thereof to the party (the Shareholder, Shareholder's Affiliates or the
Corporation) which supplied the Confidential Information sought by such demand,
so as to afford the supplying party an opportunity to contest the demand or
legal requirement.
ARTICLE VI
TRANSFERS OF SHARES
6.1. Prohibited Transfers. Notwithstanding anything to the contrary
herein, no Shareholder may Transfer any Shares to a Governmental Entity that is
not Mexican at any time hereafter if such Transfer is not permissible under
Mexican law or regulations.
6.2 Transfers to Affiliates. The BEL Shareholder Group may at any time
after the date hereof Transfer any of the Shares beneficially owned by it to any
direct or indirect subsidiary of Xxxx Atlantic Corporation, and the Xxxxxxx
Shareholder Group may at any time after the date hereof Transfer any of the
Shares beneficially owned by them to any Affiliate or Xxxxxxx Family Member;
provided, however, that any such transferee must agree in writing to be bound by
all of the provisions of this Agreement before such Transfer may occur or be
committed to, and such transferee shall be deemed a Shareholder and a party
hereto immediately upon such Transfer.
ARTICLE VII
REGISTRATION RIGHTS
7.1. Demand Registration.
7.1.1. Demand Registration. Beginning on January 1, 1998, (a)
BALAH or BAII may request on behalf of any member of the BEL Shareholder Group
or any Affiliate of the BEL Shareholder Group beneficially owning Registrable
Securities that the Corporation on two separate occasions file a Registration
Statement with the SEC and/or any other Governmental Entity for a bona-fide
underwritten public offering and on one occasion a "shelf" registration for sale
in a bona-fide public offering for a period not to exceed 180 days and (b) the
Xxxxxxx Shareholder Group Notice Party may request on behalf of any member of
the Xxxxxxx Shareholder Group or any Affiliate of the Xxxxxxx
Shareholder Group beneficially owning Registrable Securities that the
Corporation on two separate occasions file a Registration Statement with the SEC
and/or any other Governmental Entity for a bona-fide underwritten public
offering and on one occasion a "shelf" registration for sale in a bona-fide
public offering for a period not to exceed 180 days; provided however that an
"occasion" shall be deemed to have occurred for purposes of this sentence only
if such offering went effective and closed or failed to close after going
effective because of the failure by the Registration Rightsholder that requested
the subject registration to satisfy a closing condition that was in its sole
control. In case the Corporation shall receive from either BALAH or BAII
or the Xxxxxxx Shareholder Group Notice Party, at any time on or after January
1, 1998, a written request that the Corporation file a Registration Statement
with the SEC and/or any other Governmental Entity and effect any registration,
qualification or compliance with applicable federal, state or other securities
laws, with respect to all or a part of the Registrable Securities, the
Corporation will:
(i) promptly give written notice of the proposed registration,
qualification or compliance to all Registration Rightsholders; and
(ii) use its diligent good faith efforts to effect, as soon as
practicable, all such registrations, qualifications and compliances
(including, without limitation, the execution of an undertaking to file
post-effective amendments, appropriate qualification under the applicable
state or other securities laws and appropriate compliance with exemptive
regulations issued under any law (including, without limitation, the
Securities Act) and any other governmental requirements or regulations) as
may be so requested and as would permit or facilitate the sale and
distribution of all or such portion of such Registrable Securities as is
specified in such request, together with all or such portion of the
Registrable Securities of any other Registration Rightsholder or
Registration Rightsholders joining in such request as is specified in a
written request received by the Corporation within 30 days after such
written notice by the Corporation is delivered.
Subject to the foregoing, the Corporation shall prepare and file a
Registration Statement with the SEC and/or any other Governmental Entity
covering the Registrable Securities so requested to be registered as soon as
practicable and, in any event, within 90 days after such request is received.
7.1.2. Underwriting. BALAH, BAII and the Xxxxxxx Shareholder
Group Notice Party shall include in each of their respective requests for any
underwritten public offering made pursuant to Section 7.1.1 the name of the
managing underwriter or underwriters that the requesting parties propose to
employ in connection with the public offering proposed to be made pursuant to
the registration requested. The Corporation shall include in the written notice
referred to in paragraph (a) of Section 7.1.1 the name or names of such
underwriter or
underwriters to be employed. If any sale proposed pursuant to Section 7.1.1 is
to be effected pursuant to an underwritten public offering, the right of any
Registration Rightsholder to registration pursuant to Section 7.1 shall be
conditioned upon such Registration Rightsholder's participation in such
underwriting and the inclusion of such Registration Rightsholder's Registrable
Securities in the underwriting to the extent provided herein. The Corporation
shall (together with all Registration Rightsholders proposing to distribute
their securities through such underwriting) enter into an underwriting agreement
in customary form (which form must be reasonably acceptable to the Shareholder
Group requesting such registration) with the underwriter or underwriters
selected for such underwriting in the manner set forth above. Notwithstanding
any other provisions of Section 7.1, if the managing underwriter advises the
Corporation in writing that marketing factors require a limitation of the number
of Registrable Securities to be underwritten, then the Corporation shall so
advise all beneficial owners of Registrable Securities which would otherwise be
registered and underwritten pursuant hereto, and the number of shares of
Registrable Securities that may be included in the registration and underwriting
shall be allocated first among the members of the Shareholder Group requesting
such registration in proportion, as nearly as practical, to the respective
amounts of Registrable Securities that were proposed to be sold by such
Registration Rightsholders and second, to the extent that the limitation
established by the managing underwriter is not exhausted by the members of such
Shareholder Group, among the Corporation and other Persons that are not members
of such Shareholder Group in proportion, as nearly as practical, to the
respective amounts of Registrable Securities that were proposed to be sold by
such Persons. No Registrable Securities excluded from the underwriting by reason
of the underwriter's marketing limitation shall be included in such
registration. If any Registration Rightsholder disapproves of the terms of the
underwriting, he may elect to withdraw therefrom by written notice to the
Corporation and the managing underwriter. The Registrable Securities so
withdrawn shall also be withdrawn from registration; provided, however, that, if
--------- -------
by the withdrawal of such Registrable Securities a greater number of Registrable
Securities beneficially owned by other Registration Rightsholders may be
included in such registration (up to the maximum of any limitation imposed by
the underwriters), then the Corporation shall offer to all Registration
Rightsholders who have included Registrable Securities in the registration the
right to include additional Shares in the same proportion used in effecting the
limitation referred to above in this Section 7.1. The Corporation shall
undertake any reasonable measures within its control to cause the Registrable
Securities sold in any underwritten public offering to be widely disseminated.
7.2. Piggyback Registration.
7.2.1. Right to Inclusion. If at any time or from time to time on or
after January 1, 1998, the Corporation shall determine to register any of its
equity securities (including securities that are convertible into equity
securities) pursuant to a Registration Statement filed with the SEC and/or any
other Governmental Entity in a bona-fide underwritten public offering, whether
for its own account or the account
of a security holder or security holders, then the Corporation will:
(i) promptly deliver to each Registration Rightsholder written
notice thereof (which shall include a list of the jurisdictions in which
the Corporation intends to attempt to qualify the offer and sale of such
securities under the applicable state or other securities laws); and
(ii) include in such registration (and any related qualification
under state or other securities laws or other compliance), and in any
underwriting involved therein, all the Registrable Securities specified in
any written request or requests by any Registration Rightsholder or
Registration Rightsholders received by the Corporation within 30 days
after such written notice by the Corporation is delivered.
7.2.2. Underwriting. If the applicable sale of securities is to be
effected pursuant to an underwritten public offering, the right of any
Registration Rightsholder to registration pursuant to Section 7.2 shall be
conditioned upon such Registration Rightsholder's participation in the
underwriting and the inclusion of such Registration Rightsholder's Registrable
Securities in the underwriting to the extent provided herein. All Registration
Rightsholders proposing to distribute their securities through such underwriting
(together with the Corporation and other beneficial owners distributing their
securities through such underwriting) shall enter into an underwriting agreement
in customary form with the underwriter or underwriters selected for such
underwriting.
Notwithstanding any other provisions of Section 7.2, if the managing
underwriter advises the Corporation in writing that marketing factors require a
limitation of the number of shares to be underwritten, the Registrable
Securities and the other securities to be included in any registration and
underwriting may be limited. In such event, the Corporation shall so advise all
Registration Rightsholders and all beneficial owners of such other securities
which would otherwise be registered and underwritten pursuant hereto, and the
number of shares of Registrable Securities and such other outstanding securities
(if any) that may be included in the registration and underwriting shall be
allocated among all Registration Rightsholders and other beneficial owners
thereof in proportion, as nearly as practicable, to the respective amounts of
Registrable Securities and such other securities that were proposed to be sold
by such Registration Rightsholders and other beneficial owners. In the event of
any conflict between the terms of Section 7.1.2 and the terms of this Section
7.2.2, the terms of Section 7.1.2 shall prevail.
No Registrable Securities excluded from the underwriting by reason of the
managing underwriter's marketing limitation shall be included in such
registration. If any Registration Rightsholder disapproves of the terms of the
underwriting, he may elect to withdraw therefrom by written notice to the
Corporation and the managing underwriter. The Registrable Securities so
withdrawn shall also be withdrawn from
registration; provided, however, that, if by the withdrawal of such Registrable
Securities a greater number of Registrable Securities beneficially owned by
other Registration Rightsholders may be included in such registration (up to the
maximum of any limitation imposed by the underwriters), then the Corporation
shall offer to all Registration Rightsholders who have included Registrable
Securities in the registration the right to include additional shares in the
same proportion used in effecting the limitation referred to above in this
Section 7.2. The Corporation shall undertake any reasonable measures within its
control to cause the Registrable Securities sold in any underwritten public
offering to be widely disseminated.
7.3. Expenses of Registration. To the fullest extent permitted by law, all
expenses incurred by the Registration Rightsholders in connection with any
registration, qualification or compliance pursuant to this Article VII other
than fees and disbursements of counsel to the Registration Rightsholders,
including, without limitation, all registration, filing and qualification fees,
printing expenses, escrow fees, fees and disbursements of counsel for the
Corporation and fees and expenses of accountants incidental to or required by
such registration, shall be borne by the Corporation.
7.4. Registration Procedures. In the case of such registration,
qualification or compliance effected by the Corporation pursuant to this Article
VII, the Corporation will keep each Registration Rightsholder participating
therein advised in writing as to the initiation of each registration,
qualification and compliance and as to the completion thereof. At its expense,
the Corporation will:
(a) Keep such registration, qualification or compliance pursuant to
Sections 7.1 or 7.2 effective until the Registration Rightsholder or
Registration Rightsholders have completed the distribution described in
the Registration Statement relating thereto or for a period of at least
180 days for any underwritten public offering, whichever occurs first; and
(b) Furnish such number of Prospectuses and other documents incident
thereto as any Registration Rightsholder from time to time may reasonably
request.
7.5. Related Registration Matters. The Corporation shall enter into an
underwriting agreement in connection with any registration of an underwritten
public offering subject to the provisions of Sections 7.1 and 7.2, which
agreement shall contain such terms, provisions and agreements as are customary
and appropriate for such registration. In connection with the registration, to
the extent not provided in the underwriting agreement related to such
registration, the Corporation also shall:
(a) List the Registrable Securities included in such registration on
any national securities exchange on which the Registrable Securities are
approved for listing;
(b) Engage a bank or other company to act as transfer agent and
registrar for the Registrable Securities;
(c) Cause customary opinions of counsel, comfort letters of
accountants and other appropriate documents to be delivered by
representatives of the Corporation; and
(d) As soon as practicable after the effective date of the
Registration Statement, and, in any event, within 45 days after the end of
the 12-month period beginning with the first day of the Corporation's
first fiscal quarter commencing after the effective date of the
Registration Statement, make "generally available to its security holders"
(within the meaning of Rule 158 under the Securities Act) an earnings
statement complying with Section 11(a) of the Securities Act and covering
the 12-month period set forth above.
7.6. Indemnification and Contribution. In connection with any registration
of Registrable Securities pursuant to this Article VII, the Corporation and each
Registration Rightsholder (and the underwriters, if any) will enter into an
agreement (which shall be the underwriting agreement in the case of an
underwritten offering) containing mutual indemnification and contribution rights
and procedures in form and substance satisfactory to the beneficial owner or
owners of at least a majority of the Registrable Securities to be included in
the registration; provided, however, that in any event the liability of each
seller of Registrable Securities pursuant to such indemnification and
contribution provisions shall be limited to the net proceeds (after all expenses
are paid by such seller) from the disposition of the Registrable Securities
disposed of by such seller pursuant to such registration.
7.7. Information by Registration Rightsholders. Each Registration
Rightsholder requesting to be included in any registration shall furnish to the
Corporation such information regarding such Registration Rightsholder and the
distribution proposed by such Registration Rightsholder as the Corporation may
request in writing and as shall be required in connection with any registration,
qualification or compliance referred to in this Article VII.
7.8. Transfer of Registration Rights. The rights to cause the Corporation
to register Registrable Securities under Sections 7.1 and 7.2 may be assigned by
any Registration Rightsholder of Registrable Securities to an Affiliate of such
Registration Rightsholder to whom Registrable Securities are transferred
pursuant to Section 6.2 hereof; provided that the Corporation shall be given
written notice by such Registration Rightsholder of Registrable Securities at
the time of or within 60 days after said Transfer, setting forth the name and
address of said transferee or assignee and identifying the Registrable
Securities with respect to which such registration rights are being assigned.
7.9. Restrictions on Public Sale by the Corporation; Future Rights. The
Corporation agrees not to effect any public sale or distribution of any
securities similar to those being registered, or any securities convertible into
or exchangeable or exercisable for such securities, during the 21 days prior to,
and during the 90 days following, the effective date of any Registration
Statement in which the Registration Rightsholders are participating (except
pursuant to such Registration Statement). The Registration Rightsholders agree
not to exercise their rights under Section 7.1 for 90 days after the effective
date of any Registration Statement filed by the Corporation pursuant to which
the Corporation is selling shares of its capital stock for its own account and
the gross proceeds to the Corporation exceed, or are expected to exceed,
U.S.$30,000,000.
The Corporation represents and warrants that it has not on or prior to the
date of this Agreement granted any registration rights to any Person (other than
the registration rights granted pursuant to this Article VII) and, after the
date of this Agreement, the Corporation will not grant to any Person any
registration rights with respect to securities of the Corporation other than
registration rights that (a) are subordinate to and of a lesser priority than
the registration rights granted herein, (b) are approved in writing by BALAH,
BAII and the Xxxxxxx Shareholder Group Notice Party (on behalf of the
Xxxxxxx Shareholder Group) and (c) are not inconsistent with this Agreement.
Additionally, no such future registration rights can be used by any Person
before January 1, 1998.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES; COVENANTS
8.1. The BEL Shareholder Group. Each member of the BEL Shareholder Group
represents and warrants that (i) it is duly organized, validly existing and in
good standing in the jurisdiction of its incorporation and it has full power and
authority to enter into this Agreement and to perform its obligations hereunder,
(ii) the execution of this Agreement by it has been duly authorized by all
necessary action, (iii) this Agreement constitutes its legal, valid and binding
obligation, enforceable against it in accordance with the terms hereof, except
as may be limited by bankruptcy, insolvency and the availability of equitable
remedies and (iv) the execution of this Agreement and performance of its
obligations hereunder will not conflict with, or result in a breach of or
default under, any agreement or instrument to which it is a party or by which it
is bound, or any order, decree or judgment of any Governmental Entity.
8.2. Other Signatories. Each of the signatories hereto other than BALAH
and BAII represents and warrants that (i) if it is a corporation or a
sociedad anonima, it is duly organized, validly existing and in good standing
in the jurisdiction of its incorporation, and, regardless of whether it is a
corporation or a sociedad anonima, it has full power and authority to enter
into this Agreement and to perform its obligations hereunder, (ii) the
execution of this Agreement by it has been duly authorized by all necessary
action, (iii) this Agreement constitutes its legal, valid and
binding obligation, enforceable against it in accordance with the terms hereof,
except as may be limited by bankruptcy, insolvency and the availability of
equitable remedies, and (iv) the execution of this Agreement and performance of
its obligations hereunder will not conflict with, or result in a breach of or
default under, any agreement or instrument to which it is a party or by which it
is bound, or any order, decree or judgment of any Governmental Entity.
8.3. Covenant. The signatories to this Agreement agree to vote their stock
of the Corporation in a manner consistent with the terms and intent of this
Agreement (including, without limitation, in order to elect a Board of Directors
in accordance with the terms hereof) notwithstanding the terms of the Bylaws. In
connection with Section 3.2(b) and (c), each member of the BEL Shareholder Group
and the Xxxxxxx Shareholder Group hereby acknowledges its intention to comply
with the terms of such Section and waives any rights it may have pursuant to
Section 198 of the General Law on Mercantile Companies.
ARTICLE IX
NOTICES
All notices, requests, demands, and other communications (herein
collectively called a "Notice") under this Agreement shall be in writing and
shall be delivered personally, sent by overnight courier or mailed by certified
mail, postage prepaid and return receipt requested, or by telegram or
telecopier, as follows:
To the Corporation: GRUPO IUSACELL, S.A. DE X.X.
Xxxxxx Urales 460 (3rd Floor)
Col. Xxxxx xx Xxxxxxxxxxx
Xxxxxx, X.X. 00000
Attn.: Director General
Telecopy No.: (525) 104-4106
With a copy to: XXXXXX & XXXXX
Two Hundred Park Avenue
New York, N.Y. 10166-0153
Attn.: Xxxx Xxxxx, Esq.
Telecopy No.: (000) 000-0000
With a copy to: XXXX ATLANTIC LATIN AMERICA HOLDINGS, INC.
0000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Attn.: Xxxxxx X. XxXxxxxx, Esq.
Telecopy No. (000) 000-0000
With a copy to: ING. XXXXXX XXXXXXX XXXXXXXX
Xxxxxx Urales 460 (0xx Xxxxx)
Col. Xxxxx xx Xxxxxxxxxxx
Xxxxxx, X.X. 00000
Telecopy No.: (525) 104-4045
With a copy to: XXXXXXX ASESORIA JURIDICA, S.A. de C.V.
Xx. Xxxxxxxxxxx Xx. 000-X Xxxxxxxx
Xxx. xxx Xxxxx
00000 Xxxxx Xxxxxx, N.L. Mexico
Attn: Lic. Xxxxxxx Xxxxxxx
Telecopy No.: (000)000-0000
To the BEL XXXX ATLANTIC LATIN AMERICA HOLDINGS, INC.
Sharholder Group: XXXX ATLANTIC INTERNATIONAL, INC.
0000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Attn.: Xxxxxx X. XxXxxxxx, Esq.
Telecopy No. (000) 000-0000
With a copy to: XXXXXX & XXXXXX L.L.P.
2300 First City Tower
0000 Xxxxxx
Xxxxxxx, Xxxxx 00000-0000
Attn.: Xxxxxxx X. Xxxxxxx, Esq.
Telecopy No.: (000) 000-0000
To Xxxxx Xxxxxxx: ING. XXXXX XXXXXXX Y XXXX XXXXXXXX
Xxxxxx Urales 460 (0xx Xxxxx)
Col. Xxxxx xx Xxxxxxxxxxx
Xxxxxx, X.X. 00000
Telecopy No.: (525) 104-4045
With a copy to: XXXXXXX ASESORIA JURIDICA, S.A. de C.V.
Xx. Xxxxxxxxxxx Xx. 000-X Xxxxxxxx
Xxx. xxx Xxxxx
00000 Xxxxx Xxxxxx, N.L., Mexico
Attn: Lic. Xxxxxxx Xxxxxxx
Telecopy No.: (000)000-0000
With a copy to: XXXXXX XXXXXX & XXXXXXX
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn. Xxxxx Xxxxxx, Esq.
Telecopy No.: (000)000-0000
To Xxxxxx Xxxxxxx: ING. XXXXXX XXXXXXX XXXXXXXX
Xxxxxx Urales 460 (0xx Xxxxx)
Col. Xxxxx xx Xxxxxxxxxxx
Xxxxxx, X.X. 00000
Telecopy No.: (525) 104-4045
With a copy to: XXXXXXX ASESORIA JURIDICA, S.A. de C.V.
Xx. Xxxxxxxxxxx Xx. 000-X Xxxxxxxx
Xxx. xxx Xxxxx
00000 Xxxxx Xxxxxx, N.L., Mexico
Attn: Lic. Xxxxxxx Xxxxxxx
Telecopy No.: (000)000-0000
With a copy to: XXXXXX XXXXXX & XXXXXXX
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxxx Xxxxxx, Esq.
Telecopy No.: (000)000-0000
To the corporate IUSA GRUPO COMUNICACIONES, S.A. DE C.V.
members of the XXXXXXXX INVESTMENTS LIMITED
Xxxxxxx Shareholder FIUSA PASTEJE, S.A. DE C.V.
Group: COMMANDER MEXICANA, S.A. DE C.V.
INMOBILIARIA REFORMA LOMAS ALTAS,
S.A. DE C.V.
FRACCIONADORA Y CONSTRUCTORA
MEXICANA, S.A. DE C.V.
CONFECCIONES PASTEJE, S.A. DE C.V
INTERELEC, S.A. DE X.X.
Xxxxxx Urales 460 (0xx Xxxxx)
Col. Xxxxx xx Xxxxxxxxxxx
Xxxxxx, X.X. 00000
Telecopy No.: (525)104-4045
With a copy to: XXXXXXX ASESORIA JURIDICA, S.A. de C.V.
Xx. Xxxxxxxxxxx Xx. 000-X Xxxxxxxx
Xxx. xxx Xxxxx
00000 Xxxxx Xxxxxx, N.L., Mexico
Attn: Lic. Xxxxxxx Xxxxxxx
Telecopy No.: (000)000-0000
With a copy to: XXXXXX XXXXXX & XXXXXXX
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxxx Xxxxxx, Esq.
Telecopy No.: (000)000-0000
Notice given by personal delivery, mail or overnight courier shall be
effective upon actual receipt. Notice given by telegram or telecopier shall be
effective upon actual receipt if received before 5:00 p.m., local time, or at
8:00 a.m., local time, on
the beginning of the next Business Day after receipt if not received before 5:00
p.m. All Notices by telegram or telecopier shall be confirmed promptly after
transmission in writing by certified mail or personal delivery. Any party may
change any address to which Notice is to be given to it by giving Notice as
provided above of such change of address. The above-named counsel for the
parties should be provided with a copy of all Notices given to their respective
clients, but the failure to provide such a copy to counsel does not affect the
validity of any Notice given.
Any notice required or desired to be given under this Agreement shall be
in the English language, unless the parties hereto in any specific case
otherwise agree.
Any Notice required or desired to be given to the Xxxxxxx Shareholder
Group or any member thereof shall be deemed to have been duly given if given to
the Xxxxxxx Shareholder Group Notice Party pursuant to the terms of this Article
IX; and any such Notice shall initially be given as follows:
To the Xxxxxxx Shareholder
Group Notice Party : ING. XXXXXX XXXXXXX XXXXXXXX
Xxxxxx Urales 460 (0xx Xxxxx)
Col. Xxxxx xx Xxxxxxxxxxx
Xxxxxx, X.X. 00000
Telecopy No.: (525)104-4045
With a copy to: XXXXXXX ASESORIA JURIDICA, S.A. de C.V.
Xx. Xxxxxxxxxxx Xx. 000-X Xxxxxxxx
Xxx. xxx Xxxxx
00000 Xxxxx Xxxxxx, N.L., Mexico
Attn: Lic. Xxxxxxx Xxxxxxx
Telecopy No.: (000)000-0000
ARTICLE X
GENERAL PROVISIONS
10.1. Compliance with Laws - Generally. The signatories to this Agreement
acknowledge that the BEL Shareholder Group is subject to the laws of the United
States and agree to use their reasonable efforts not to cause the BEL
Shareholder Group to fail to be in compliance with the provisions of any
national, federal, state, provincial and local laws, rules, ordinances and
regulations of the United States, including without limitation, all provisions
of the U.S. Foreign Corrupt Practices Act, the U.S. Trading With the Enemy Act,
the U.S. Cuban Democracy Act, the U.S. Cuban Assets Control Regulations, the
Cuban Liberty and Democratic Solidarity (Libertad) Act of 1996, the Securities
Act and the Exchange Act (all as amended from time to time), and all U.S. Export
Control regulations and licenses issued thereunder covering, for example, the
export or reexport of technical data. In addition, each party agrees to comply
with the provisions of all applicable national, federal, state,
provincial and local laws, rules, ordinances and regulations of Mexico, the
United States and any other country in which activities are being carried out
under this Agreement or by the Corporation or any Subsidiary, including without
limitation, all provisions of the Mexican Ley de Competencia Economica, the
Mexican Ley del Xxxxxxx de Valores, the U.S. Foreign Corrupt Practices Act, the
U.S. Trading With the Enemy Act, the U.S. Cuban Democracy Act, the U.S. Cuban
Assets Control Regulations, Cuban Liberty and Democratic Solidarity (Libertad)
Act of 1996, the Securities Act and the Exchange Act (all as amended from time
to time), and all U.S. Export Control regulations and licenses issued thereunder
covering, for example, the export or reexport of technical data. Each party
agrees to advise all of its and its Affiliates' employees and representatives
engaged in implementing this Agreement of the terms of such laws, rules,
ordinances and regulations, and to take appropriate steps to ensure that it and
its Affiliates, and their respective employees and representatives, comply with
such laws, rules, ordinances and regulations with respect to the subject matter
of this Agreement and the activities of the Corporation or any Subsidiary.
10.2. Telecommunications Act of 1996.
(a) Each member of the Xxxxxxx Shareholder Group and the Corporation
acknowledge that the BEL Shareholder Group and their parent Xxxx Atlantic
Corporation are subject to the terms of the Telecom Act, and that the activities
of the Corporation, the Subsidiaries, entities in which the Corporation or any
Subsidiary has an equity interest, and entities over which the Corporation or
any Subsidiary has, directly or indirectly, the power or ability to influence or
control the management thereof, may be attributed to the BEL Shareholder Group
and Xxxx Atlantic Corporation under the Telecom Act. Accordingly, the parties
shall cause the Corporation and each Subsidiary to act in conformity and
compliance with the Telecom Act, and to not undertake any activities, or own any
assets, that would be prohibited to any member of the BEL Shareholder Group
under the Telecom Act.
(b) The BEL Shareholder Group shall provide to the Corporation and
the Subsidiaries advice and direction with respect to compliance with the
Telecom Act. Such advice and direction shall include written guidelines
("Guidelines"), to be provided by BALAH or BAII from time to time,
setting forth a description of those assets in which the Corporation should not
acquire a direct or indirect interest, and those activities in which the
Corporation should not directly or indirectly engage, without first receiving
"Guidance." "Guidance" shall mean (i) a written memorandum, opinion or similar
writing, prepared by counsel to the BEL Shareholder Group, stating that the
Corporation may acquire the asset, or engage in the activity, in question; or
(ii) the affirmative vote by the "Telecom Act Board Member," in his capacity as
a Director, approving the acquisition of the asset, or the undertaking of the
activity, in question, unless he is given inaccurate information with respect to
such acquisition or undertaking in connection with such affirmative vote. The
"Telecom Act Board Member" shall mean a Series B Director who is designated from
time to time by the
holders of the majority of Series B Shares as the "Telecom Act Board Member."
(c) In the event that any member of the BEL Shareholder Group or
Xxxx Atlantic Corporation determines that the Corporation or any Subsidiary is
directly or indirectly engaging in any activity or owns any asset which could
cause any member of the BEL Shareholder Group or Xxxx Atlantic Corporation to
not be in compliance with the Telecom Act, or which could cause a Governmental
Entity to so allege, members of the BEL Shareholder Group may require that the
Corporation's shareholders and Board of Directors cause the Corporation or the
relevant Subsidiary to rescind or otherwise cancel the transaction which
constitutes a violation of the Telecom Act or take such other action as may be
required to assure compliance. Alternatively, if in the BEL Shareholder Group
member's sole discretion, such cancellation or rescission will not adequately
cure the potential or alleged Telecom Act violation, the BEL Shareholder Group
member may require the Corporation or relevant Subsidiary to immediately divest
itself of the Corporation's or Subsidiary's ownership interest in the assets
which gave rise to the potential or actual Telecom Act violation. If immediate
divestiture is not feasible, the members of the BEL Shareholder Group may
require the Xxxxxxx Shareholder Group to acquire the prohibited interest at the
then-current net book value of such assets, and to assume the liabilities
associated with such assets. In that event, the Xxxxxxx Shareholder Group shall
be indemnified by the Corporation against losses and liabilities it may incur as
a result of such acquisition and assumption. If the Corporation or any
Subsidiary, or any Person in which the Corporation or any Subsidiary owns an
equity interest or has the power to control, shall acquire an asset or engage in
an activity in reliance upon the Guidelines or Guidance, and such Guidelines or
Guidance were in error, the BEL Shareholder Group shall reimburse the
Corporation for any direct damages caused by such a rescission, cancellation or
divestiture described in the preceding two sentences, including any indemnity
payments the Corporation must make to the Xxxxxxx Shareholder Group. If two or
more actions that would effect a cure of an actual or potential Telecom Act
violation equally meet the BEL Shareholder Group's needs for speed and
completeness in cure, the action which is in the best economic interest of the
Corporation shall be taken.
If in the written opinion of the General Counsel to Xxxx Atlantic
Corporation none of the actions set forth in the preceding paragraph would
remedy the alleged Telecom Act violation or satisfy the relevant Governmental
Entities, the BEL Shareholder Group may Transfer the Shares without compliance
with any of the provisions of Article VI. In the event of such a proposed
Transfer, BALAH and BAII shall have the rights set forth in Section 7.1
without regard to whether it shall have already exhausted the number of demand
registrations provided for therein.
10.3. Dispute Resolution. Any controversy or claim arising out of or
relating to this Agreement or any document or instrument delivered in connection
herewith, or any breach hereof or thereof, shall be settled by binding
arbitration as provided for herein. The arbitration shall be held in Paris,
France and, except to the extent
inconsistent with this Agreement, shall be conducted in accordance with the
Rules of Arbitration of the International Chamber of Commerce in effect at the
time of the arbitration. The arbitration shall be conducted in the English
language, although documentary evidence and/or testimony may be submitted in
either English or Spanish. The arbitration proceedings, all documents and all
testimony, written or oral, produced in connection therewith, and the
arbitration award shall be confidential. The arbitration panel shall consist of
three arbitrators. The party or parties initiating the arbitration (whether one
or more, the "Claimant") shall appoint its or their arbitrator in its or their
demand (the "Demand"). The other party or parties (whether one or more, the
"Respondent") shall appoint its or their arbitrator within thirty (30) days
after receipt of the Demand (whether the Demand is received from the Claimant or
from the International Chamber of Commerce) and shall notify the Claimant of
such appointment in writing. If the Respondent fails to appoint an arbitrator
within such thirty (30) day period, the arbitrator named in the Demand shall
decide the controversy or claim as a sole arbitrator. Otherwise, the two
arbitrators appointed by the parties shall appoint a third arbitrator with
experience in international commecial disputes within forty-five (45) days after
the Respondent has notified the Claimant of the appointment of the Respondent's
arbitrator. When the arbitrators appointed by the Claimant and the Respondent
have appointed a third arbitrator and the third arbitrator has accepted such
appointment, the two arbitrators shall promptly notify the parties and the
International Chamber of Commerce of the appointment of the third arbitrator. If
the two arbitrators appointed by the parties fail or are unable to appoint a
third arbitrator within the time period provided above, they shall so notify the
parties, and any party may request the appropriate official of the International
Chamber of Commerce to appoint an impartial third arbitrator with experience in
international commercial disputes. That official shall appoint the third
arbitrator within thirty (30) days after such request and shall notify the
parties of the appointment. The third arbitrator shall act as chairman of the
panel. In addition to the authority conferred on the arbitrators by the Rules of
the International Chamber of Commerce, which the parties agree governs, the
arbitrators shall have the authority to order such discovery and to make such
orders for interim relief, including temporary and preliminary injunctive
relief, as they may deem just and equitable. The arbitral award may grant any
relief deemed by the arbitrators to be just and equitable, including without
limitation, injunctive relief and/or specific performance, together with
damages. The arbitral award shall state the reasons for the award and relief
granted, shall be final and binding upon the parties to the arbitration, and may
include an award of costs, including reasonable attorney's fees and
disbursements. Any award rendered by the arbitration panel may be confirmed,
judgment upon any award rendered may be entered, and such award of the judgment
thereon may be enforced in any court of any state or country having jurisdiction
over the parties and/or their assets.
10.4. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
10.5. Severability. If any term or provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of law or public policy, all
other terms and provisions of this Agreement shall nevertheless remain in full
force and effect and such invalid, illegal or unenforceable term or provision
shall be reformed automatically so as to comply with the applicable law or
public policy and to effect the original intent of the parties as closely as
possible.
10.6. Specific Performance. The obligations of the parties hereto under
this Agreement are unique. If any party should default in its obligations under
this Agreement, the defaulting party acknowledges that it would be extremely
impracticable to measure the resulting damages. Accordingly, in addition to any
other available rights or remedies, the nondefaulting party or parties may make
a claim in equity for specific performance and each defaulting party expressly
waives the defense that a remedy in damages will be adequate.
10.7. Rights of Parties. No Person not a party hereto will have any rights
hereunder, except that any provision hereof which is expressly stated to be for
the benefit of, or in which an obligation is expressly undertaken to, an
Affiliate of a party, a transferee of a party or a Registration Rightsholder is
intended to be enforceable by them.
10.8. Assignment. The provisions of this Agreement will be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns; provided, that the terms of this Section 10.8 shall not limit or
modify the terms of Section 6.2.
10.9. Headings. The subject headings of the Articles, Sections, paragraphs
and subparagraphs of this Agreement are included for purposes of convenience
only, and shall not affect the construction or interpretation of any of its
provisions.
10.10. Modification and Waiver. This Agreement constitutes the entire
agreement among the parties pertaining to the subject matter contained herein
and supersedes all prior agreements, representations and understandings of the
parties, whether written or oral. No supplement to, or modification, or
amendment of, this Agreement shall be binding unless it is in writing and
executed by all of the parties hereto. No waiver shall be binding unless
executed in writing by the party against whom the waiver is to be effective. No
waiver of any of the provisions of this Agreement shall be deemed, or shall
constitute, a waiver of any other provision, whether or not similar, nor shall
any waiver constitute a continuing waiver. No failure or delay by any party in
exercising any right, power or privilege hereunder will operate as a waiver
thereof nor will any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
10.11. Remedies Cumulative. The remedies provided in this Agreement shall
be cumulative and shall not preclude assertion by any party hereto of any other
rights or the seeking of any other
remedies against any other party hereto.
10.12. Further Assurances. The signatories hereto shall promptly take the
necessary actions, execute such further or other documents and exercise all
voting rights conferred upon them by any stock of the Corporation, whether
currently beneficially owned by them or acquired subsequent to the execution of
this Agreement, in such manner as to ensure that the provisions, intent and
spirit of this Agreement shall be complied with and carried into full effect.
10.13. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of Mexico.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date and year first written above.
GRUPO IUSACELL, S.A. DE C.V.
Witness:
/s/ Xxxxx X. Xxxxxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
------------------------- --------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President and
Chief Financial
XXXX ATLANTIC LATIN AMERICA
HOLDINGS, INC.
Witness:
/s/ Xxxxx X. Xxxxxxxxxx By: /s/ Xxxxxx X. XxXxxxxx
------------------------- --------------------------------
Name: Xxxxxx X. XxXxxxxx
Title: Vice President
XXXX ATLANTIC NEW ZEALAND HOLDINGS, INC.
Witness:
/s/ Xxxxx X. Xxxxxxxxxx
------------------------ By /s/ Xxxxx X. Xxxxxxx
-----------------------
Name: Xxxxx X. Xxxxxxx
Title: President
XXXX ATLANTIC INTERNATIONAL, INC.
Witness:
/s/ Xxxxx X. Xxxxxxxxxx
----------------------- By /s/ Xxxxxx X. XxXxxxxx
-------------------------
Name: Xxxxxx X. XxXxxxxx
Title: Vice President
Witness:
/s/ Xxxxxxx Xxxxxxx Xxxxxx /s/ Xxxxx Xxxxxxx y Xxxx Xxxxxxxx
------------------------- --------------------------------
XXXXX XXXXXXX Y XXXX XXXXXXXX
By: Xxxxxx Xxxxxxx Xxxxxxxx, as
Attorney-in-Fact
Witness:
/s/ Xxxxxxx Xxxxxxx Xxxxxx /s/ Xxxxxx Xxxxxxx Xxxxxxxx
------------------------- --------------------------------
XXXXXX XXXXXXX XXXXXXXX
IUSA GRUPO COMUNICACIONES, S.A. DE C.V.
Witness:
/s/ Xxxxxxx Xxxxxxx Xxxxxx By: /s/ Xxxxxx Xxxxxxx Xxxxxxxx
------------------------- ------------------------------------
Name: Xxxxxx Xxxxxxx Xxxxxxxx
Title: Vice Chairman
XXXXXXXX INVESTMENTS LIMITED
Witness:
/s/ Xxxxxxx Xxxxxxx Xxxxxx By: /s/ Xxxxxx Xxxxxxx Xxxxxxxx
------------------------- ------------------------------------
Name: Xxxxxx Xxxxxxx Xxxxxxxx
Title: Director
FIUSA PASTEJE, S.A. DE C.V.
Witness:
/s/ Xxxxxxx Xxxxxxx Xxxxxx By: /s/ Xxxxxx Xxxxxxx Xxxxxxxx
------------------------- ------------------------------------
Name: Xxxxxx Xxxxxxx Xxxxxxxx
Title: Attorney-in-fact
COMMANDER MEXICANA, S.A. DE C.V.
Witness:
/s/ Xxxxxxx Xxxxxxx Xxxxxx By: /s/ Xxxxxx Xxxxxxx Xxxxxxxx
------------------------- ------------------------------------
Name: Xxxxxx Xxxxxxx Xxxxxxxx
Title: Attorney-in-fact
INMOBILIARIA REFORMA LOMAS ALTAS,
S.A. DE C.V.
Witness:
/s/ Xxxxxxx Xxxxxxx Xxxxxx /s/ Xxxxxx Xxxxxxx Xxxxxxxx
-------------------------- ------------------------------------
Name: Xxxxxx Xxxxxxx Xxxxxxxx
Title: Attorney-in-fact
FRACCIONADORA Y CONSTRUCTORA
MEXICANA, S.A. DE C.V.
Witness:
/s/ Xxxxxxx Xxxxxxx Xxxxxx /s/ Xxxxxx Xxxxxxx Xxxxxxxx
-------------------------- ------------------------------------
Name: Xxxxxx Xxxxxxx Xxxxxxxx
Title: Attorney-in-fact
CONFECCIONES PASTEJE, S.A. DE C.V.
Witness:
/s/ Xxxxxxx Xxxxxxx Xxxxxx /s/ Xxxxxx Xxxxxxx Xxxxxxxx
-------------------------- --------------------------------
Name: Xxxxxx Xxxxxxx Xxxxxxxx
Title: Attorney-in-fact
INTERELEC, S.A. DE C.V.
Witness:
/s/ Xxxxxxx Xxxxxxx Xxxxxx By: /s/ Xxxxxx Xxxxxxx Xxxxxxxx
-------------------------- -------------------------------
Name: Xxxxxx Xxxxxxx Xxxxxxxx
Title: Attorney-in-fact
