EXHIBIT 10.27E
EXECUTION COPY
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SHAREHOLDERS' AGREEMENT
among
INTERNATIONAL WIRELESS COMMUNICATIONS
PAKISTAN LIMITED,
INTERNATIONAL WIRELESS COMMUNICATIONS LIMITED
and
SOUTH ASIA WIRELESS COMMUNICATIONS
(MAURITIUS) LIMITED
Dated as of July 17, 1997
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TABLE OF CONTENTS
ARTICLE/SECTION PAGE
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1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Certain Definitions. . . . . . . . . . . . . . . . . . . . . . 1
1.2 Principles of Interpretation . . . . . . . . . . . . . . . . . 2
2. Business of the Company . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 General. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 PMCL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3. Restrictions on Transfer of Shares. . . . . . . . . . . . . . . . . . 3
3.1 Limitation on Transfer . . . . . . . . . . . . . . . . . . . . 3
3.2 Transfers in Compliance with Law . . . . . . . . . . . . . . . 3
3.3 Affiliate Transfers. . . . . . . . . . . . . . . . . . . . . . 4
3.4 Right of First Refusal . . . . . . . . . . . . . . . . . . . . 5
3.5 Veto Rights. . . . . . . . . . . . . . . . . . . . . . . . . . 6
4. Right of First Offer. . . . . . . . . . . . . . . . . . . . . . . . . 6
5. First Option. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.1 Exercise of First Option . . . . . . . . . . . . . . . . . . . 8
5.2 IWC Option . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.3 SA Put Right . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.4 Closing of IWC Option or SA Put Right. . . . . . . . . . . . . 9
5.5 Second Option Shares.. . . . . . . . . . . . . . . . . . . . .10
6. Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
6.1 General. . . . . . . . . . . . . . . . . . . . . . . . . . . .10
6.2 Shareholder Votes. . . . . . . . . . . . . . . . . . . . . . .11
6.3 Board of Directors . . . . . . . . . . . . . . . . . . . . . .13
6.4 Board Meetings . . . . . . . . . . . . . . . . . . . . . . . .14
6.5 PMCL Board . . . . . . . . . . . . . . . . . . . . . . . . . .14
6.6 PMCL Affairs . . . . . . . . . . . . . . . . . . . . . . . . .15
6.7 Management of PMCL . . . . . . . . . . . . . . . . . . . . . .15
6.8 Non-Competition. . . . . . . . . . . . . . . . . . . . . . . .16
6.9 Deadlock with respect to PMCL. . . . . . . . . . . . . . . . .16
6.10 Directors' Access. . . . . . . . . . . . . . . . . . . . . . .16
7. Financial Reports and Auditing. . . . . . . . . . . . . . . . . . . .17
7.1 Right of Inspection. . . . . . . . . . . . . . . . . . . . . .17
7.2 Books and Records. . . . . . . . . . . . . . . . . . . . . . .17
7.3 Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . .17
ARTICLE/SECTION PAGE
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7.4 PMCL Reports . . . . . . . . . . . . . . . . . . . . . . . . .18
8. Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
8.1 Additional Capital Contributions; Shareholder Loans. . . . . .18
8.2 Failure to Subscribe for Additional Shares or Provide
Shareholder Loans. . . . . . . . . . . . . . . . . . . . . . .19
8.3 Procedures.. . . . . . . . . . . . . . . . . . . . . . . . . .19
8.4 Divestment . . . . . . . . . . . . . . . . . . . . . . . . . .20
8.5 Dilution of Breaching Shareholder. . . . . . . . . . . . . . .21
9. Memorandum and Articles of Association. . . . . . . . . . . . . . . .22
10. Representations and Warranties. . . . . . . . . . . . . . . . . . . .22
11. Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . .23
12. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . .23
12.1 General Obligation . . . . . . . . . . . . . . . . . . . . . .23
12.2 Exceptions . . . . . . . . . . . . . . . . . . . . . . . . . .23
12.3 Disclosure to Third Parties. . . . . . . . . . . . . . . . . .23
13. Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
14. U.S. Investment Company Act of 1940.. . . . . . . . . . . . . . . . .24
15. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
15.1 Legend . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
15.2 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . .24
15.3 Discrepancies. . . . . . . . . . . . . . . . . . . . . . . . .25
15.4 Severability . . . . . . . . . . . . . . . . . . . . . . . . .26
15.5 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . .26
15.6 Term of Agreement. . . . . . . . . . . . . . . . . . . . . . .26
15.7 Amendment and Waiver . . . . . . . . . . . . . . . . . . . . .26
15.8 Consent to Specific Performance. . . . . . . . . . . . . . . .26
15.9 Assignment; Binding on Transferee. . . . . . . . . . . . . . .26
15.10 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . .26
15.11 Arbitration. . . . . . . . . . . . . . . . . . . . . . . . . .27
15.12 Shareholder Obligations; Further Assurances. . . . . . . . . .27
15.13 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . .28
Annex A: Pro Rata Share of Capital Contributions and Shareholder Loans to
be made to PMCL
Exhibit A: Form of Deed of Adherence
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SHAREHOLDERS' AGREEMENT, dated as of July 17, 1997 (this "Agreement"),
among INTERNATIONAL WIRELESS COMMUNICATIONS PAKISTAN LIMITED, a Mauritius
company with its registered offices at X.X. Xxx 0000, 0xx Xxxxx, 00 Xxxx Xxxxxx
Street, Port Louis, Mauritius (the "Company"), INTERNATIONAL WIRELESS
COMMUNICATIONS LIMITED, a Mauritius corporation with its principal offices at
000 Xxxxx Xx Xxxxxx Xxxx, Xxx Xxxxx, XX 00000, U.S.A. ("IWC") and SOUTH ASIA
WIRELESS COMMUNICATIONS (MAURITIUS) LIMITED, a Mauritius corporation with its
principal offices at Xxxxx 0000-00, Xxxx Xxxxx'x Xxxx Xxxxxxx, Xxxx Xxxx ("SA
Wireless").
As of the date of this Agreement, the authorized share capital of the
Company is US$1,000,000, comprised of 1,000,000 ordinary shares, nominal value
US$1.00 each ("Shares").
The Company has issued and allotted to IWC, and IWC has subscribed
for, 26 Shares, and the Company has issued and allotted to SA Wireless, and SA
Wireless has subscribed for, 20 Shares.
The parties have agreed to enter into this Shareholders' Agreement to
provide for certain matters relating to the transfer of Shares and the
management and operation of the Company.
In consideration of the foregoing and of the mutual covenants
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. DEFINITIONS.
1.1 CERTAIN DEFINITIONS. The following capitalized terms
shall have the following meanings for purposes of this Agreement:
"AFFILIATE" means, in relation to any Shareholder, a Person
controlling, controlled by or under common control with such Shareholder. For
purposes of this Agreement, "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.
"AIF" means the Asian Infrastructure Fund.
"BOARD" means the board of directors of the Company.
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"BUSINESS DAY" means any day (excluding Saturday and Sunday) on
which banks in the State of New York, USA, Hong Kong and Mauritius are open for
business.
"CHARTER DOCUMENTS" means, collectively, the Memorandum of
Association and the Articles of Association of the Company.
"DIRECTOR" means a director of the Company (including any duly
appointed alternate director).
"FINANCIAL YEAR" means the financial year of the Company, which
shall end on December 31.
"PERSON" means any natural person, corporation, partnership,
firm, joint venture, association, joint stock company, trust, unincorporated
association, governmental authority or other legal entity.
"PMCL" means Pakistan Mobile Communications (Pvt.) Limited, a
company incorporated under the laws of Pakistan.
"SECURITIES" means shares in the share capital of the Company and
any options, warrants or other securities that are directly or indirectly
convertible into, or exercisable or exchangeable for, such share capital.
"SHAREHOLDER" means (i) each of IWC and SA Wireless for so long
as such Shareholder remains a shareholder of the Company, and (ii) any other
Person who becomes a shareholder of the Company in accordance with the terms of
this Agreement and executes a Deed of Adherence substantially in the form
attached hereto as Exhibit A, for so long as such Person remains a shareholder
of the Company.
"SUBSIDIARY" means any corporation, partnership or other entity
in which the Company directly or indirectly holds a majority interest in the
form of shares, membership, partnership interests or otherwise.
"US DOLLARS" or "US$" means United States dollars, the lawful
currency of the United States of America.
1.2 PRINCIPLES OF INTERPRETATION.
(a) Any reference herein to any Article, Section or
Exhibit shall refer to such Article or Section of, or Exhibit to, this
Agreement. The words "herein," "hereof" and "hereunder," and words of like
import, shall refer to this Agreement as a whole and not to any particular
provision hereof.
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(b) All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine or neuter, singular or plural, as the
identity of the antecedent Person may require.
(c) The headings in this Agreement are intended solely
for convenience of reference and shall be given no effect in the interpretation
of this Agreement.
2. BUSINESS OF THE COMPANY.
2.1 GENERAL. The business of the Company shall be restricted
to its holding of shares in the capital of PMCL. Unless the Shareholders
unanimously agree, the Company shall not form or establish any other
Subsidiaries.
2.2 PMCL.
(a) Promptly after the date hereof, the Company will
enter into separate share purchase agreements with Motorola International
Development Corporation ("Motorola") and Continental Communications Limited to
acquire, in the aggregate, a 46% interest in PMCL. Under the share purchase
agreement to be entered by and between the Company and Motorola (the "Motorola
Share Purchase Agreement"), (i) Motorola will grant an option to the Company to
acquire up to a further 12.69% interest in PMCL from Motorola (the "First
Option") and (ii) if the First Option is not exercised, then the Company shall
have an option (the "Second Option") to purchase from Motorola the Second Option
Shares (as defined in the Motorola Share Purchase Agreement).
(b) At the closing of the transactions contemplated by
the Motorola Share Purchase Agreement, the Company will enter into a
Shareholders Agreement with the other shareholders of PMCL relating to certain
rights and obligations of the shareholders of PMCL (the "PMCL Shareholders
Agreement").
3. RESTRICTIONS ON TRANSFER OF SHARES.
3.1 LIMITATION ON TRANSFER. No Shareholder shall sell, give,
transfer, assign, charge, mortgage, hypothecate, pledge, encumber, grant a
security interest in or otherwise dispose of (whether by operation of law or
otherwise) (each, a "Transfer") any Securities, or any right, title or interest
therein or thereto, except as expressly permitted by this Article 3. Any
attempt to Transfer any Securities or any rights therein or thereto in violation
of this Article 3 shall be null and void AB INITIO, and the Company shall not
register any such Transfer.
3.2 TRANSFERS IN COMPLIANCE WITH LAW. Notwithstanding any
other provision of this Agreement, no Transfer may be made pursuant to this
Article 3 unless (a) the transferee has agreed in writing to be bound by the
terms and conditions of this Agreement
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pursuant to a Deed of Adherence substantially in the form attached hereto as
Exhibit A, (b) the transferee assumes all shareholder loans that have been
made by the transferor to the Company on or prior to the Transfer, (c) the
Transfer complies in all respects with the applicable provisions of this
Agreement and (d) the Transfer complies in all respects with applicable
securities laws. If requested by the Company in its reasonable discretion,
an opinion of counsel to such transferring Shareholder shall be supplied to
the Company, at such transferring Shareholder's expense, to the effect that
such Transfer complies with applicable securities laws.
3.3 AFFILIATE TRANSFERS.
3.3.1 PERMITTED TRANSFEREES. Any Shareholder may
Transfer some or all of the Securities held by such Shareholder to an Affiliate
of such Shareholder without compliance with the provisions of Section 3.4;
PROVIDED that the Shareholder shall remain liable for any and all of its
obligations under this Agreement.
3.3.2 CHANGE IN STATUS. If Securities are Transferred by
a Shareholder to an Affiliate of such Shareholder and such transferee shall at
any time cease to be an Affiliate of such Shareholder, such Shareholder shall
notify the other Shareholders of such an event within five Business Days after
the occurrence of such an event, and such Securities shall be transferred
(i) back to the original Shareholder or (ii) to another Affiliate of that
Shareholder without compliance with the provisions of Section 3.4.
3.3.3 COMBINED HOLDINGS. The Securities held by a
Shareholder and such Shareholder's Affiliates shall for all purposes of this
Agreement be treated as Securities held by a single Shareholder.
3.3.4 IWC TRANSFERS. Notwithstanding the foregoing,
within 120 days after the date of this Agreement, IWC may, with notice to SA
Wireless, Transfer 6.52% of the then total issued Shares that are held by IWC to
Vanguard Cellular Systems Inc. ("Vanguard") without compliance with the
provisions of Section 3.4, but so long as Section 3.2 is complied with and so
long as IWC provides SA Wireless with evidence reasonably satisfactory to SA
Wireless that a voting arrangement has been entered into between IWC and
Vanguard pursuant to which IWC shall vote all the Shares held by Vanguard and
that such voting arrangement will be in full force and effect at all times while
Vanguard is a Shareholder, and thereafter or concurrently therewith, IWC may,
with notice to, and the prior written agreement of, SA Wireless, Transfer all,
but not less than all, of the remaining Securities held by it to one of its
Affiliates without compliance with the provisions of Section 3.4 and, upon such
Transfer to its Affiliate, IWC shall no longer be liable for any of its
obligations under this Agreement and all references in this Agreement to "IWC"
shall automatically be deemed a reference to such Affiliate.
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3.4 RIGHT OF FIRST REFUSAL. Each Shareholder (each, a
"Transferor") who proposes to Transfer Securities to a third party (a "Third
Party Purchaser") other than pursuant to Section 3.3, grants to each other
Shareholder (a "Section 3.4 Rightholder") a right of first refusal ("Right of
First Refusal") to purchase such Section 3.4 Rightholder's pro-rata share of the
Transferor's Securities, exercisable at the option of each Section 3.4
Rightholder in accordance with Section 3.4(b).
(a) Each Transferor shall furnish to each Section 3.4
Rightholder written notice (the "Transferor Notice") of the intended
disposition, including the identity of the Third Party Purchaser, the number of
Securities to be Transferred (the "Offered Securities"), the price at which the
Securities are proposed to be Transferred and the general terms upon which such
Transfer is proposed to be made.
(b) Subject to Sections 3.4(c) and 3.4(d), each
Section 3.4 Rightholder shall have 21 calendar days (the "Notice Period") after
the receipt of the Transferor Notice to agree irrevocably to purchase up to its
pro-rata share of the Offered Securities for the price and upon the general
terms specified in the Transferor Notice by giving written notice to the
Transferor and stating therein the quantity of the Offered Securities to be
purchased (each such Section 3.4 Rightholder exercising such right being
referred to herein as a "Section 3.4 Purchaser"). Failure by a Section 3.4
Rightholder to respond within such Notice Period shall be regarded as a waiver
of its Right of First Refusal with respect to the Transfer of the Offered
Securities.
(c) Each Transferor shall, promptly after the end of
the Notice Period, give written notice (the "Last-Chance Notice") to all Section
3.4 Rightholders stating whether the Offered Securities have been taken up by
the Section 3.4 Purchasers, and, if not, the number of Offered Securities not so
taken up (the "Remaining Offered Securities"). Subject to Section 3.4(d), each
Section 3.4 Purchaser shall have the right, but not the obligation, to purchase
all, but not less than all, of the Remaining Offered Securities. The right of
each Section 3.4 Purchaser to purchase the Remaining Offered Securities shall be
exercisable irrevocably by written notice delivered to each Transferor, with a
copy to the Company, given within ten calendar days (the "Last Chance Period")
after receipt of the Last-Chance Notice. If more than one Section 3.4 Purchaser
timely elects to exercise its right to purchase the Remaining Offered
Securities, the right to purchase the Remaining Offered Securities shall be
allocated pro rata among those Section 3.4 Purchasers electing to purchase the
Remaining Offered Securities, based on the proportion that the number of
Securities owned by such Section 3.4 Purchaser bears to the total number of
Securities owned by all Section 3.4 Purchasers that elect to purchase the
Remaining Offered Securities. A failure of any Section 3.4 Purchaser to
exercise such right within the Last Chance Period shall be regarded as a waiver
of its right to purchase such Remaining Offered Securities as provided herein.
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(d) Notwithstanding anything in this Article 3 to the
contrary, the right of the Section 3.4 Purchasers to purchase any of the Offered
Securities pursuant to this Article 3 shall be exercisable if and only if the
Section 3.4 Purchasers collectively have exercised their rights to purchase all,
but not less than all, of the Offered Securities pursuant to this Section 3.4.
Any exercise by any Shareholder of a Right of First Refusal pursuant to this
Section 3.4 shall be final and irrevocable.
(e) If the Section 3.4 Purchasers collectively have
exercised their Rights of First Refusal with respect to all of the Offered
Securities, then the closing of such sale and purchase shall take place promptly
after the final allocation with respect to such Offered Securities has been
determined, at the principal offices of the Company or such other place and time
as the relevant parties may agree. If the Section 3.4 Purchasers collectively
have not exercised their Rights of First Refusal with respect to all of the
Offered Securities, then the Transferor shall have 120 calendar days after the
end of the Last Chance Period to make the Transfer of the Offered Securities to
the Third Party Purchaser at the price and upon the terms specified in the
Transferor Notice. In the event the Transferor does not Transfer such
Securities to the Third Party Purchaser within such 120-day period, the
Transferor shall not thereafter make a Transfer of such Offered Securities
without again complying with the Right of First Offer provisions in this
Section 3.4.
(f) The exercise or non-exercise of the Right of First
Refusal by a Section 3.4 Rightholder with respect to a Transfer of Securities by
a Transferor shall not affect such Section 3.4 Rightholder's Right of First
Refusal with respect to subsequent Transfers of Securities.
(g) A change in the beneficial ownership of any
Shareholder or any Person that controls a Shareholder shall not constitute a
Transfer of Securities that causes the Right of First Refusal to arise hereunder
so long as such Shareholder's ownership interest in the Company does not
constitute the primary asset of such Shareholder or other Person in respect of
which such change in beneficial ownership occurs.
3.5 VETO RIGHTS. If a Shareholder proposes to Transfer
Securities to a Third Party Purchaser that is engaged in a business directly
competing with that of the Company or PMCL at the time of the proposed Transfer,
non-Transferring Shareholders holding in the aggregate at least 25% of the
issued Shares shall each have the right to prohibit such Transfer,
notwithstanding compliance by the Transferor with Section 3.4. For the
avoidance of doubt, this provision shall not apply to Transfers made pursuant to
Section 3.3.1.
4. RIGHT OF FIRST OFFER. Except as provided in Articles 5 and 8,
the Company hereby grants to each Shareholder a right of first offer ("Right of
First Offer") to subscribe for such Shareholder's pro-rata share of any New
Securities (as defined in Section 4(e) below) that the Company may from time to
time propose to issue, and the provisions of this Article 4 shall apply to such
issuances.
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(a) In the event that the Company proposes to undertake an
issuance of New Securities, the Company shall give written notice (the "Company
Notice") of its intention to so issue such New Securities to each Shareholder.
The Company Notice shall include the type and number of such New Securities, the
price and the general terms upon which such New Securities are proposed to be
issued, the number of such New Securities for which each Shareholder is entitled
to subscribe pursuant to this Article 4 and the identity of the Person(s) to
whom such New Securities are proposed to be issued (the "Proposed Acquirers").
(b) Each Shareholder shall have 28 calendar days after the
receipt of the Company Notice to agree irrevocably to subscribe for up to its
pro-rata share of such New Securities for the price and upon the general terms
specified in the Company Notice by giving written notice to the Company and
stating therein the number of New Securities for which such Shareholder shall
subscribe. If any Shareholder fails to exercise or waives its Right of First
Offer hereunder (a "Non-Exercising Shareholder"), the Company shall give notice
to all Shareholders who do exercise their Right of First Offer (the "Exercising
Shareholders") of such failure or waiver.
(c) Each Exercising Shareholder shall have a right of over
allotment to subscribe for up to its pro-rata portion of any New Securities not
subscribed for by a Non-Exercising Shareholder hereunder. Each Exercising
Shareholder may exercise irrevocably such right of over allotment by giving
written notice to the Company within 28 calendar days of receipt of the notice
of non-exercise or waiver from the Company described in Section 4(b) and stating
therein the number of New Securities for which such Exercising Shareholder shall
subscribe. Upon exercises of the Right of First Offer hereunder in connection
with any proposed issuance of New Securities, the Company shall simultaneously
issue such New Securities pursuant to such exercises at such time and place as
the Company shall determine. Any exercise by any Shareholder of a right of
subscription pursuant to this Article 4 shall be final and irrevocable.
(d) If the Shareholders waive or fail to exercise in full the
Right of First Offer set forth in Sections 4(b) and (c) with respect to all of
the New Securities within the above-mentioned time periods, then the Company
shall have 120 calendar days thereafter to sell any New Securities with respect
to which the Shareholders did not exercise their Right of First Offer at a price
and upon general terms no more favorable to the Proposed Acquirers than those
specified in the Company Notice. In the event the Company does not sell the New
Securities within such 120-day period, the Company shall not thereafter issue or
sell such New Securities without first offering such New Securities to the
Shareholders in accordance with this Article 4.
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(e) For the purposes of this Article 4, the term "New
Securities" shall mean any Securities, whether now authorized or authorized in
the future, that are offered for subscription or sale by the Company.
(f) The exercise or non-exercise of the Right of First Offer
by a Shareholder hereunder with respect to an issuance of New Securities shall
not affect such Shareholder's Right of First Offer with respect to subsequent
issuances of New Securities.
(g) Any Proposed Acquirer to whom New Securities are issued
pursuant to this Article 4 shall become a party to and shall be bound by the
restrictions on Transfer and the other restrictions and obligations set forth in
this Agreement to the same extent and with the same force and effect as if such
person were an original signatory hereto. Each Proposed Acquirer shall, as a
condition to subscribing for such New Securities, execute a Deed of Adherence
substantially in the form of Exhibit A upon or before the consummation of the
issuance of such New Securities.
5. FIRST OPTION; IWC OPTION SHARES; SECOND OPTION SHARES.
5.1 EXERCISE OF FIRST OPTION. The parties hereto agree and
acknowledge that the decision to exercise the First Option shall be made by SA
Wireless. If SA Wireless wishes to exercise the First Option, it shall notify
the other Shareholders and the Company, and each Shareholder shall cause the
Company to exercise the First Option in accordance with the provisions of
Clauses 9(a) to (d) of the Motorola Share Purchase Agreement. The parties agree
that the cost of the acquisition of the First Option Shares (as defined in the
Motorola Share Purchase Agreement) shall be funded entirely by SA Wireless
through the subscription by SA Wireless of new Shares at an aggregate
subscription price equal to the amount of the First Option Purchase Price (as
defined in the Motorola Share Purchase Agreement). The number of new Shares to
be issued to SA Wireless for this purpose shall be such number of Shares as to
cause IWC (together with Vanguard (if applicable)) and SA Wireless to have a
shareholding in the Company immediately prior to or concurrently with the First
Option Closing (as defined in the Motorola Share Purchase Agreement) of 44.3%
and 55.7%, respectively.
5.2 IWC OPTION.
(a) SA Wireless hereby irrevocably and unconditionally
grants an option to IWC (the "IWC Option"), effective upon the exercise of the
First Option, exercisable on one occasion only at any time in the 12 month
period commencing from January 1, 1998 (the "IWC Option Period") to purchase
from SA Wireless such number of Shares held by SA Wireless so as to enable IWC
(together with Vanguard (if applicable)) to have a shareholding in the Company
of 50.01% (the "IWC Option Shares") on the terms and subject to the conditions
of this Section 5.2 and Section 5.4; PROVIDED, HOWEVER, that notwithstanding the
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foregoing, IWC may exercise the IWC Option on one occasion at any time prior to
the commencement of the IWC Option Period if it pays to SA Wireless the IWC
Option Share Price (as defined in Section 5.4(a)) calculated as if the IWC
Option had been exercised as of January 1, 1998.
(b) Subject to this Section 5.2 and Section 5.4, IWC
may, at any time during the IWC Option Period, exercise the IWC Option by
serving on SA Wireless written notice of such exercise. The notice of exercise
of the IWC Option once served shall be irrevocable and binding on IWC and may
not be withdrawn without the prior written consent of SA Wireless.
5.3 SA PUT RIGHT.
(a) SA Wireless shall have the right (the "SA Put
Right"), effective upon the exercise of the First Option, exercisable on one
occasion only at any time in the 12 month period commencing from January 1, 1998
(the "SA Put Period") and so long as the IWC Option has not theretofore been
exercised, to sell the IWC Option Shares to IWC and IWC shall be obligated to
purchase the IWC Option Shares from SA Wireless on the terms and subject to the
conditions of this Section 5.3 and Section 5.4.
(b) Subject to this Section 5.3 and Section 5.4, SA
Wireless may, at any time during the SA Put Period and so long as the IWC Option
has not theretofore been exercised, exercise the SA Put Right by serving on IWC
written notice of such exercise. The notice of exercise of the SA Put Right
once served shall be irrevocable and binding on SA Wireless and may not be
withdrawn without the prior written consent of IWC.
5.4 CLOSING OF IWC OPTION OR SA PUT RIGHT.
(a) The purchase price (the "IWC Option Share Price")
payable by IWC for the IWC Option Shares, whether pursuant to the exercise of
the IWC Option under Section 5.2 or the exercise of the SA Put Right under
Section 5.3, shall be the sum of the amounts that have been paid by the Company
in respect of the underlying shares of PMCL that are attributable and correspond
to the IWC Option Shares (the "Underlying PMCL Shares") by way of the original
Purchase Price (as defined in the Motorola Share Purchase Agreement) per share
of the Underlying PMCL Shares, any amounts funded by the Company as additional
capital contributions or shareholder loans to PMCL in respect of the Underlying
PMCL Shares, the amounts of any loans that the Company may have made to Saif
Telecom (Pvt.) Limited, a shareholder of PMCL ("SAIF"), to enable SAIF to
respond to any shareholder loans to, or any capital call of, PMCL which are
attributable to the Underlying PMCL Shares and the pro rata share based on the
percentage of the IWC Option Shares to the total issued Shares of the fees,
costs and expenses of third party advisers and consultants engaged on behalf of
the Company in connection with evaluating the proposed acquisition of shares in
PMCL and of any fees (if any) required to have been paid in connection with the
consummation of the acquisition by the
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Company of shares in PMCL (such amounts, collectively, the "Actual Investment
Cost"), plus a return in United States dollars terms on the Actual Investment
Cost calculated at a rate equal to 40% internal rate of return. The
calculation of the internal rate of return shall be made with respect to each
separate amount that constitutes the Actual Investment Cost commencing on the
date each such separate amount was paid by the Company in respect of the
Underlying PMCL Shares. For the purposes of this Section 5.4(a), "internal
rate of return" means the discount rate which, when applied, constitutes the
present value, as of the date of closing of the sale and purchase of the IWC
Option Shares, of the Actual Investment Cost that is equal to the present
value of all the proceeds generated from the Actual Investment Cost.
(b) Following the exercise of the IWC Option in
accordance with Section 5.2 or the exercise of the SA Put Right in accordance
with Section 5.3, the closing of the sale and purchase of the IWC Option Shares
shall take place at the principal offices of the Company or such other place as
IWC and SA Wireless mutually agree on the seventh Business Day after the date of
the exercise of the IWC Option or the SA Put Right, as the case may be. At the
closing, (i) SA Wireless shall deliver share certificates to IWC totalling the
number of the IWC Option Shares, together with instruments of transfer in
respect thereof, and (ii) IWC shall pay the IWC Option Share Price in cash by
wire transfer of immediately available funds to the bank account designated by
SA Wireless in writing.
5.5 SECOND OPTION SHARES. If the First Option is not
exercised and the provisions of Clause 9 of the Motorola Share Purchase
Agreement relating to the Second Option apply, the parties hereto agree and
acknowledge that the decision to exercise the Second Option shall be made by
IWC. If IWC wishes to exercise the Second Option, it shall notify the other
Shareholders and the Company, and each Shareholder shall cause the Company to
exercise the Second Option in accordance with the provisions of Clauses 9(e) to
(h) of the Motorola Share Purchase Agreement. The parties agree that the cost
of the acquisition of the Second Option Shares shall be funded entirely by IWC
through the subscription by IWC of new Shares at an aggregate subscription price
equal to the amount of the Second Option Purchase Price (as defined in the
Motorola Share Purchase Agreement). The number of new Shares to be issued to
IWC for this purpose shall be such number of Shares as to cause IWC (together
with Vanguard (if applicable)) and SA Wireless to have a shareholding in the
Company immediately prior to or concurrently with the closing of the sale and
purchase of the Second Option Shares of 60.8% and 39.2%, respectively.
6. MANAGEMENT.
6.1 GENERAL. From and after the date hereof, each Shareholder
shall vote its Shares at any ordinary general meeting or extraordinary general
meeting of Shareholders (a "Shareholders' Meeting") or in any written resolution
executed in lieu of such a meeting of Shareholders (a "Written Resolution"), and
shall take all other actions necessary, to give effect to the provisions of this
Agreement (including, without limitation, Section 6.3.2) and to ensure that the
Charter Documents do not, at any time hereafter, conflict in any respect with
the provisions
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of this Agreement. In addition, each Shareholder shall vote its Shares at
any Shareholders' Meeting, or act by Written Resolution with respect to such
Shares, upon any matter submitted for action by the Shareholders or with
respect to which such Shareholder may vote or act by Written Resolution, in
conformity with the specific terms and provisions of this Agreement and the
Charter Documents.
6.2 SHAREHOLDER VOTES.
(a) The following matters in relation to the Company
shall require the unanimous consent of all of the Shareholders in a Written
Resolution or the unanimous consent of representatives of all of the
Shareholders present at a duly convened Shareholders' Meeting:
(i) any amendment, modification or waiver of
the Charter Documents;
(ii) the formation or establishment of any
Subsidiary;
(iii) any change to the scope of business of the
Company or any Subsidiary;
(iv) any sale or other disposition of all or
substantially all of the assets of the Company or any Subsidiary;
(v) the liquidation, winding up or dissolution
of the Company, the making or entry into by the Company of any general
assignment, arrangement or composition with or for the benefit of its
creditors, or the cessation by the Company to carry on its business or any
material part of its business;
(vi) the settlement, waiver or discontinuance of
any litigation or arbitration proceedings involving a claim exceeding the
equivalent of US$500,000 per claim and US$1,000,000 in the aggregate in any
financial year or the commencement of any litigation or arbitration
proceedings involving a claim exceeding the equivalent of US$500,000;
(vii) any merger, amalgamation or consolidation
of the Company or any Subsidiary with any other entity;
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(viii) issuance of any Securities of the Company
or any Subsidiary other than pursuant to Articles 5 and 8;
(ix) the acquisition or disposition of any
material assets by the Company or any Subsidiary other than in the ordinary
course of business;
(x) any of the matters referred to in the PMCL
Shareholders Agreement that require a Supermajority (as defined therein)
vote of the board of directors of PMCL (the "PMCL Board") or the
shareholders of PMCL;
(xi) any decision of the Company with respect to
the making of (i) additional capital contributions to PMCL pursuant to
Clause 9.2 of the PMCL Shareholders Agreement, (ii) shareholder loans to
PMCL pursuant to Clause 9.3 of the PMCL Shareholders Agreement, and (iii)
shareholder guarantees for the obligations of PMCL pursuant to Clause 9.4
of the PMCL Shareholders Agreement; and
(xii) other than pursuant to Section 6.9 or 8.4,
any decision of the Company with respect to the sale or other disposition
of all or a part of its shares in PMCL or the exercise of rights of first
refusal to acquire shares of PMCL pursuant to Clause 12 of the PMCL
Shareholders Agreement or the exercise of rights to acquire shares of a
defaulting shareholder of PMCL pursuant to Clause 16.5 of the PMCL
Shareholders Agreement.
(b) Notwithstanding the provisions of Section
6.2(a)(vi), where litigation or arbitration proceedings are or are proposed to
be brought by or against the Company against or by any Shareholder or any
Affiliate of any Shareholder, irrespective of the amount involved, such
Shareholder, and the Directors appointed by such Shareholder to the Board, shall
have no vote in determining whether such litigation or arbitration proceedings
shall be commenced, settled or discontinued or how the same shall be conducted.
(c) Any decision of the Company to exercise its right
to postpone the Closing (as defined in the Motorola Share Purchase Agreement) of
the transactions contemplated by the Motorola Share Purchase Agreement pursuant
to Clause 11 thereof or to terminate the Motorola Share Purchase Agreement prior
to the Closing (as defined therein) pursuant to Clause 12 thereof may be made by
SA Wireless by notice to the other Shareholders, whereupon all of the
Shareholders shall cause the Company to postpone the Closing or terminate the
Motorola Share Purchase Agreement in accordance with the provisions of Clause 11
or 12, respectively, thereof.
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(d) The parties acknowledge that if IWC exercises its
right to Transfer a portion of its Shares to Vanguard as provided in Section
3.3.4, IWC will enter into a voting arrangement with Vanguard pursuant to which
IWC shall vote the Shares held by Vanguard.
6.3 BOARD OF DIRECTORS.
6.3.1 AUTHORITY OF BOARD. Subject only to the provisions
of this Agreement and the Charter Documents, the Board shall have ultimate
responsibility for management and control of the Company.
6.3.2 NUMBER AND COMPOSITION. The number of members
constituting the entire Board shall be six; PROVIDED, HOWEVER, that if the
Second Option is exercised and IWC funds the purchase by the Company of the
Second Option Shares pursuant to Section 5.3, then the number of members
constituting the Board shall be reduced to five. Each Shareholder shall vote
its Shares at any Shareholders' Meeting called for the purpose of filling the
positions on the Board or in any Written Resolution executed for such purpose to
elect, and shall take all other actions necessary to ensure the election to the
Board of initially, (i) three nominees of IWC and (ii) three nominees of SA
Wireless, and if the number of members constituting the Board is reduced to five
as provided in the proviso to the first sentence of this Section 6.3.2, then (i)
three nominees of IWC and (ii) two nominees of SA Wireless. Each Shareholder
who has a right to nominate a director (a "Nomination Right") pursuant to this
Section 6.3.2 shall not be permitted to transfer its Nomination Right in
connection with any Transfer of its Securities without the prior written consent
of all other Shareholders who have Nomination Rights at the time of such
Transfer.
6.3.3 REMOVAL AND REPLACEMENT OF DIRECTORS.
(a) A Director shall be removed from the Board,
with or without cause, upon, and only upon, the affirmative vote of the
Shareholders in accordance with this Section 6.3.3. Each Shareholder shall vote
its Shares for the removal of a Director upon the request of the Shareholder
that nominated such Director. Otherwise, no Shareholder shall vote for the
removal of a Director.
(b) In the event any Director resigns or is
removed in accordance with Section 6.3.3(a), the Shareholders shall, before the
transaction of any other business by the Shareholders or the Board, elect a
successor or replacement nominated by the Shareholder that nominated such
Director. Such successor or replacement Director shall be elected on or as soon
as possible after the date of such resignation or removal.
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6.3.4 ALTERNATE DIRECTORS. A Director may at any time
appoint another person (including another Director) to be his alternate
Director, and may at any time terminate such appointment. Any person so
appointed shall be entitled to receive notices of and to attend and vote at
meetings of the Board and count towards a quorum and shall automatically vacate
his office on the expiration of the term for, or the happening of the event,
until which he is by the terms of his appointment to hold office or if the
appointor in writing terminates the appointment or if the appointor himself
ceases for any reason to hold office as a Director. An appointment of an
alternate Director shall not prejudice the right of the appointor to receive
notices of and to attend and vote at meetings of the Board, and the powers of
the alternate Director shall automatically be suspended during such time as the
Director appointing him is himself present in person at a meeting of the Board.
6.4 BOARD MEETINGS.
6.4.1 NOTICE. Meetings of the Board may be called by the
Chairman of the Board or any two Directors. Not less than 14-days' notice of
any Board meeting shall be given to all Directors; PROVIDED, HOWEVER, that such
notice period may be reduced if approved by all of the Directors in writing.
The venue for Board meetings shall be the principal offices of the Company
unless otherwise approved by the Board.
6.4.2 QUORUM. All meetings of the Board shall require a
quorum consisting of at least three Directors, including at least one Director
nominated by IWC and at least one Director nominated by SA Wireless.
Notwithstanding the foregoing, if such a quorum is not present within one hour
from the time appointed for the meeting, the meeting shall adjourn to such place
and time (which is at least 14 days later) as those Directors who did attend
shall decide or, if no such decision is reached, at the same place and time 14
days later, at which time any three Directors present shall constitute a quorum;
PROVIDED that not less than seven days' notice of such adjourned meeting of the
Board shall be given to all the Directors.
6.4.3 TELEPHONIC MEETINGS. Directors may participate in
a meeting of the Board by means of conference telephone or similar
communications equipment whereby all persons participating in the meeting can
hear each other at the same time.
6.4.4 VOTING. The adoption of any resolution of the
Board shall require the affirmative vote of Directors holding a majority of the
votes held by Directors present at a duly constituted meeting of the Board at
which a quorum is present. The Chairman of the Board shall have no casting
vote.
6.4.5 WRITTEN RESOLUTION. By notice and copy to all
Directors, resolutions may be adopted in writing by a majority of Directors.
15
6.5 PMCL BOARD. The parties agree that (a) so long as the
beneficial ownership of Shares owned by SA Wireless is not less than 30% of the
total issued Shares, AIF shall have the right to directly nominate two directors
to the PMCL Board where the PMCL Board has eight members but if the number of
directors constituting the PMCL Board is increased to 10, then AIF shall have
the right to directly nominate three directors to the PMCL Board, and (b) if the
beneficial ownership of Shares owned by SA Wireless is less than 30%, but more
than 15%, of the total issued Shares, then AIF shall have the right to directly
nominate one director to the PMCL Board where the PMCL Board has eight members
and two directors to the PMCL Board where the PMCL Board has 10 members. Each
of the Shareholders shall cause the Company to vote its shares in PMCL for the
election of the SA Wireless nominees nominated in accordance with this Section
6.5.
6.6 PMCL AFFAIRS.
(a) If any of the matters referred to in Section
6.2(a)(x) fails to obtain a unanimous vote of the Shareholders, then the
Shareholders shall cause the Company acting in its capacity as a shareholder of
PMCL or the nominees of the Company on the PMCL Board, as the case may be, to
vote at the applicable shareholders' meeting of PMCL or applicable PMCL Board
meeting, as the case may be, to maintain the status quo.
(b) Except for the matters referred to in Section 6.2,
the Shareholders and the Board shall discuss matters concerning the business of
PMCL with a view to achieving a unanimous position of IWC and SA Wireless in
respect of decisions of the shareholders of PMCL or of the PMCL Board. If a
unanimous position cannot be reached then (i) in the case of a PMCL shareholder
decision, the Company in its capacity as a shareholder of PMCL shall vote the
shares held by it in PMCL in such manner to reflect the differing positions of
IWC (which shall have the right to vote the Shares held by Vanguard (if
applicable)), on the one hand, and SA Wireless, on the other hand, and (ii) in
the case of a PMCL Board decision, each of IWC and SA Wireless shall be free to
direct their nominees on the PMCL Board to vote as IWC or SA Wireless, as the
case may be, may determine.
(c) With respect to a unanimous decision of the
Shareholders in respect of the matters referred to in Section 6.2(a)(x), (xi)
or (xii), if at any meeting of the PMCL Board, any nominee of any Shareholder to
the PMCL Board shall not vote on any matter in accordance with the specific
resolution of the Shareholders on such matter thereby resulting in the PMCL
Board passing a resolution contrary to such specific resolution of the
Shareholders, then the Shareholder nominating such nominee shall be deemed to
have committed a material breach of this Agreement.
6.7 MANAGEMENT OF PMCL. The parties hereto acknowledge and
agree that IWC or an Affiliate wishes to enter into a management services
agreement with PMCL pursuant to which IWC or its Affiliate will provide such
management services as are required to ensure the proper day-to-day management
and operation of PMCL and at such a level and to
16
such an extent so as to enable IWC and its Affiliates to comply with the
requirements of the U.S. Investment Company Act of 1940 so as not to be
deemed an "investment company" thereunder. The parties hereto acknowledge
that any such management services agreement will be in a form to be agreed
between IWC and SA Wireless and will require a Supermajority vote of the
shareholders of PMCL. SA Wireless hereby agrees to take all such actions to
support and encourage the shareholders of PMCL to vote in favor of PMCL
entering into any such management services agreement.
6.8 NON-COMPETITION. With respect to Clause 14.1(b) of the
PMCL Shareholders Agreement, if another consortium is formed without SA Wireless
or an Affiliate thereof as contemplated in subclause (y) of the second paragraph
of Clause 14.1(b) and such consortium is successful in bidding for a license or
other rights that are offered by the Government of Pakistan, then IWC agrees
that as soon as it is practicable, it will transfer to SA Wireless or an
Affiliate designated by it part of the equity interest of IWC in such
consortium, which shall reflect the then current shareholding of IWC and SA
Wireless in the Company. The purchase price of such equity interest in the
consortium to be transferred by IWC to SA Wireless or its Affiliate shall be
equal to the subscription price per share that IWC originally paid for such
interest, plus any additional capital contributions or shareholder loans
subsequently made by IWC in respect of such interest. Notwithstanding the
foregoing, IWC shall not be required to make any transfer to SA Wireless of
equity interests in such consortium if such transfer would result in (i) a
violation of any order, decree, award or injunction of any governmental or
administrative authority or (ii) the revocation, restriction or imposition of
conditions on the license or rights that have been acquired by the consortium.
6.9 DEADLOCK WITH RESPECT TO PMCL.
(a) If the requisite vote of the Shareholders pursuant
to Section 6.2(a)(x), 6.2(a)(xi) or 6.2(a)(xii) cannot be obtained or there
occurs an irreconcilable difference of opinion or interest among the
Shareholders or the Directors with respect to a subject on which their
concurrence is required and which relates to the management or operations of the
Company or PMCL, then a deadlock (a "Deadlock") shall be deemed to arise.
(b) If a Deadlock occurs and shall continue for more
than 30 days, the Company shall notify PMCL of the existence of the Deadlock and
the Shareholders shall cause the Company to transfer the shares of PMCL held by
it to each of the Shareholders on a pro rata basis based on their shareholding
in the Company, with the result that each of the Shareholders shall become
direct shareholders of PMCL.
17
6.10 DIRECTORS' ACCESS. Each Director shall be entitled to
examine the books and accounts of the Company. The Company shall provide to each
Director, within 30 days after the end of each month, a monthly operating report
of the Company and each Subsidiary containing such information as may be
specified by the Board and such information relating to the business affairs and
financial position of the Company as such Director may require. Any Director
may provide such information to a Shareholder.
7. FINANCIAL REPORTS AND AUDITING.
7.1 RIGHT OF INSPECTION. The Company shall allow the
Shareholders and their authorized representatives the right during normal
business hours to inspect its books and accounting records and those of the
Subsidiaries, to make extracts and copies therefrom at their own expense and to
have full access to all of the Company's and each of the Subsidiaries' property
and assets. Notwithstanding the foregoing in this Section 7.1, the Company
shall not be obligated to provide any information to any Shareholder or
Shareholder's representatives or to any competitor of the Company pursuant to
this Section 7.1 that the Company considers to be a trade secret or similar
confidential information unless such Shareholder and such Shareholder's
representatives agree not to use such information and to keep such information
confidential. The foregoing rights of visitation and inspection shall be in
addition to any other similar rights the Shareholders may have under the laws of
Mauritius.
7.2 BOOKS AND RECORDS. The Company and the Subsidiaries shall
keep proper, complete and accurate books of account in US dollars in accordance
with international accounting standards and shall have their accounts audited
annually in accordance with such standards by a reputable firm of international
accountants appointed by the Shareholders. The audited financial statements
shall be prepared in US dollars and reconciled according to United States
generally accepted accounting principles.
7.3 REPORTS. The Company shall provide to each Shareholder
(i) within 60 days after the end of each Financial Year, the annual audited
consolidated financial statements of the Company for such Financial Year, (ii)
within 15 days after the end of each month, monthly unaudited consolidated
financial statements of the Company for such month, (iii) within 30 days after
the end of each quarter, quarterly unaudited consolidated financial statements
of the Company for such quarter which have been reconciled according to United
States generally accepted accounting principles, and (iv) such other reports as
the Board may determine. The Company shall furnish to the Shareholders and
their auditors such financial and other information relating to the business of
the Company and its Subsidiaries as any of them may reasonably require.
18
7.4 PMCL REPORTS.
(a) If any Shareholder wishes to obtain financial or
other information relating to the business of PMCL that is not otherwise being
provided by PMCL, upon its request, the Shareholders shall cause the Company to
make a request pursuant to Clause 7.7 of the PMCL Shareholders Agreement for
such financial or other information.
(b) Upon the request of any Shareholder, the
Shareholders shall cause the Company to take all such actions or do all such
things as may be necessary or desirable to procure that the books and records,
financial affairs and internal audits of PMCL comply with the provisions of
Clauses 7.1 and 7.2 of the PMCL Shareholders Agreement.
8. FUNDING.
8.1 ADDITIONAL CAPITAL CONTRIBUTIONS; SHAREHOLDER LOANS.
(a) To the extent that the Company is required to make
capital contributions or shareholder loans to PMCL as provided in Clause 9.1 of
the PMCL Shareholders Agreement, each Shareholder shall make its pro rata share,
as set forth in Annex A attached hereto, of the required capital contributions
or loans to the Company to enable the Company to fulfil its obligations with
respect to PMCL.
(b) Except as provided in Section 8.1(a), if the
Shareholders unanimously approve the making of capital contributions or
shareholder loans by the Company as referred to in Section 6.2(a)(xi), then each
Shareholder shall make its pro rata share of the approved capital contributions
or loans to the Company to enable the Company to fulfil its obligations with
respect to PMCL.
(c) For the avoidance of doubt, all equity capital
contributions required to be made pursuant to this Agreement shall be made by
way of subscription for additional Shares by the Shareholders. The aggregate
subscription price for such additional Shares shall be equal to the aggregate
amount of the capital contributions required to be made by the Company to PMCL.
If it shall be necessary to increase the authorized share capital of the Company
to issue additional Shares in connection with the making of any additional
equity capital contributions, then each Shareholder shall vote its Shares in
favor of a resolution to increase appropriately the share capital of the Company
and to allot such additional Shares in accordance with this Agreement, and shall
cause its Directors to adopt a resolution authorizing such increase and the
allotment of such additional Shares in accordance with this Agreement.
(d) If shareholder loans are required to be made
pursuant to this Agreement to enable the Company to provide a shareholder loan
to PMCL, then the terms
19
and conditions of the loans made by the Shareholders to the Company shall be
the same as the terms and conditions on which the shareholder loan of the
Company to PMCL is being made.
8.2 FAILURE TO SUBSCRIBE FOR ADDITIONAL SHARES OR PROVIDE
SHAREHOLDER LOANS.
(a) If any Shareholder (the "Defaulting Shareholder")
fails to (i) subscribe and pay for its pro rata portion of any additional Shares
required to be subscribed by such Shareholder pursuant to Sections 8.1(a) and
(c) within 20 Business Days after receiving notice from the Company of the
Shares to be offered by the Company pursuant to Sections 8.1(a) and (c) and the
subscription price therefor, or (ii) provide its pro rata portion of any
shareholder loans required to be made by such Shareholder pursuant to Section
8.1(a) within 20 Business Days after receiving notice from the Company of a call
for such loans, then the other Shareholders (the "Non-Defaulting Shareholders")
shall have the right (the "Section 8.2 Right") to purchase all, but not less
than all, of the Shares of the Defaulting Shareholder (the "Subject Shares") at
a purchase price equal to 50% of their fair market value as established in
accordance with Section 8.3(c).
(b) Any Non-Defaulting Shareholders who exercise their
Section 8.2 Right shall make up the share of the capital contributions or
shareholder loans to the Company that the Defaulting Shareholder failed to make,
and shall make the requisite capital contributions or shareholder loans on the
original due date thereof, notwithstanding that the closing of the sale and
purchase of the Subject Shares may occur after such date as provided in Section
8.3. If there are more than one such Non-Defaulting Shareholders, they shall
make up the capital contributions or shareholder loans that the Defaulting
Shareholder failed to make in proportion to the Shares of the Defaulting
Shareholder that they have each elected to purchase.
8.3 PROCEDURES.
(a) Upon the expiration of the 20-Business Day period
referred to in Section 8.2(a), the Company shall notify the Non-Defaulting
Shareholders in writing of their Section 8.2 Right. Within five Business Days
after delivery of such notice from the Company, the Non-Defaulting Shareholders
shall decide whether they wish to purchase the Subject Shares, and shall notify
the Company and the Defaulting Shareholder of their decision. If more than one
Non-Defaulting Shareholder wishes to purchase the Subject Shares, then they
shall have the right to purchase a pro rata portion of the Subject Shares based
on the proportion that the number of Shares owned by each such Non-Defaulting
Shareholder bears to the total number of Shares owned by all such Non-Defaulting
Shareholders that elect to purchase the Subject Shares. Failure by a Non-
Defaulting Shareholder to respond within such five-Business Day period shall be
regarded as a waiver of its right to purchase the Subject Shares.
20
(b) If the Non-Defaulting Shareholders decline to
exercise their Section 8.2 Right or otherwise fail to elect to purchase all of
the Subject Shares within the five-Business Day period referred to in Section
8.3(a), then the right to exercise the Section 8.2 Right shall lapse and the
provisions of Section 8.4 shall apply.
(c) If the Non-Defaulting Shareholders elect to
exercise their Section 8.2 Right, then the Company shall, within two Business
Days after receipt of the Non-Defaulting Shareholders' notice of election,
notify the Defaulting Shareholder and the Non-Defaulting Shareholders. Within
10 Business Days of the date of the Company's notice, an appraiser (the
"Appraiser"), which shall be an internationally recognized investment banking
firm that has not had a substantial relationship with any of the Shareholders or
any of their Affiliates in the immediately preceding five years, shall be
selected in the following manner to determine the fair market value of the
Subject Shares. The Non-Defaulting Shareholders, on the one hand, and the
Defaulting Shareholder, on the other hand, shall each select an investment
banking firm and the investment banking firms so selected shall designate the
Appraiser; PROVIDED that if either the Non-Defaulting Shareholders or the
Defaulting Shareholder shall fail to select an investment banking firm within
such 10-Business Day period, then the appraisal shall be conducted by the
investment banking firm that is so selected. The Appraiser shall be instructed
to make its determination and to deliver its report within 20 Business Days of
its appointment. In addition, the Appraiser shall be instructed to take into
account the dilution of the Defaulting Shareholder's shareholding in the Company
as a result of its failure to make its share of the required capital
contributions or shareholder loans to the Company. The fees and expenses of the
Appraiser shall be borne by the Defaulting Shareholder. The Appraiser shall act
as an expert and not an arbitrator, and the determination of the Appraiser shall
be final and binding on all parties.
(d) The Company shall determine the date for the
closing of the sale and purchase of the Subject Shares (which date shall not be
more than 10 days after the date of receipt of the report of the Appraiser) and
shall notify all the Shareholders thereof. The closing shall take place at the
principal office of the Company on the date so specified.
8.4 DIVESTMENT. In the case of capital contributions or
shareholder loans that are required to be made by the Company to PMCL pursuant
to Clause 9.1 of the PMCL Shareholders Agreement, if the Non-Defaulting
Shareholders have not elected to purchase all of the Subject Shares, the Company
shall, on the due date of the making of the capital contributions or the
shareholder loans to PMCL or within the cure period stipulated in Clause 16.3(d)
of the PMCL Shareholders Agreement, make such part of its required capital
contributions or shareholder loans with the funds that have been provided by the
Non-Defaulting Shareholders. The parties agree that thereupon the Company shall
have the right to purchase the Shares held by the Defaulting Shareholder or to
otherwise cause the Defaulting Shareholder to divest its Shares in consideration
for the transfer by the Company to the Defaulting Shareholder of such number of
shares of PMCL that is attributable and corresponds to the shareholding
21
percentage in the Company of the Defaulting Shareholder, with the result that
the Defaulting Shareholder shall become a direct shareholder of PMCL. Each
Shareholder covenants that, if it is a Defaulting Shareholder, it shall execute
and deliver a deed of adherence, substantially in the form of Exhibit C to the
PMCL Shareholders Agreement. Immediately following the transfer of shares of
PMCL to the Defaulting Shareholder, the Defaulting Shareholder shall be deemed
to have been in default under Clause 16.3(d) of the PMCL Shareholders Agreement
by virtue of having failed to fund its share of the capital contributions or
shareholder loans that should have been made by it originally to the Company,
and the Company (as so constituted with only the Non-Defaulting Shareholders as
its shareholders) shall, together with the other shareholders of PMCL, have the
right to purchase the shares of PMCL held by the Defaulting Shareholder in
accordance with Clause 16.5 of the PMCL Shareholders Agreement.
8.5 DILUTION OF BREACHING SHAREHOLDER. In the case of capital
contributions or shareholder loans that are required to be made by the Company
pursuant to Clause 9.2 or 9.3 of the PMCL Shareholders Agreement following the
unanimous approval of the Shareholders as required under Section 6.2(a)(xi), if
a Shareholder (the "Breaching Shareholder") fails to (i) subscribe and pay for
its pro rata portion of any additional Shares required to be subscribed by such
Shareholder pursuant to Sections 8.1(b) and (c) or (ii) provide its pro rata
portion of any shareholder loans required to be made by such Shareholder
pursuant to Section 8.1(b), then the Company shall, on the due date of the
making of the capital contributions or the shareholder loans to PMCL, make such
part of its required capital contributions or shareholder loans with the funds
that have been provided by the other Shareholders (the "Non-Breaching
Shareholders"). The parties agree, however, that any dilution of the Company's
shareholdings in PMCL resulting from the failure of the Company to make its
required capital contributions or shareholder loans in full to PMCL shall
require a corresponding dilution of the shareholding of the Breaching
Shareholder in the Company. Accordingly, in the case of the Breaching
Shareholder's failure to make its pro rata share of capital contributions, the
number of Shares to be issued to the Non-Breaching Shareholders for their
capital contributions and the subscription price therefor shall be determined
based upon the extent of such dilution and the aggregate amount of the capital
contributions made by the Non-Breaching Shareholders. In the case of the
Breaching Shareholder's failure to make its pro rata shareholder loan, such
dilution shall be effected through the issuance by the Company of additional
Shares to the Non-Breaching Shareholders at no cost. Each of the Shareholders
agrees that it shall vote its Shares in favor of a resolution to increase
appropriately the share capital of the Company (if required) and to allot such
additional Shares to the Non-Breaching Shareholders in accordance with this
Section 8.5, and shall cause its Directors to adopt a resolution authorizing
such increase (if required) and the allotment of such additional Shares in
accordance with this Section 8.5.
22
9. MEMORANDUM AND ARTICLES OF ASSOCIATION. The parties agree,
promptly after the date hereof, to take all necessary actions and execute all
documents and instruments necessary to amend the Charter Documents to conform to
the terms of this Agreement.
10. REPRESENTATIONS AND WARRANTIES. Each party hereto represents
with respect to itself, severally and not jointly, to the other parties hereto
that:
(a) such party has the full power and authority to enter into,
execute and deliver this Agreement and to perform the transactions contemplated
hereby and such party is duly organized and existing under the laws of the
jurisdiction of its organization and that the execution and delivery by such
party of this Agreement and the performance by such party of the transactions
contemplated hereby have been duly authorized by all necessary corporate or
other action of such party;
(b) assuming the due authorization, execution and delivery
hereof by the other parties, this Agreement constitutes the legal, valid and
binding obligation of such party, enforceable against such party in accordance
with its terms;
(c) the execution, delivery and performance of this Agreement
by such party and the consummation of the transactions contemplated hereby will
not (i) violate any provision of the Memorandum or Articles of Association or
By-laws (or comparable instruments) of such party; (ii) require such party to
obtain any consent, approval or action of, or make any filing with or give any
notice to, any governmental authority in such party's country of organization or
any other person pursuant to any instrument, contract or other agreement to
which such party is a party or by which such party is bound other than such
filings as may be required under applicable securities laws and such notices and
copies of documents as it may be required to provide its or its Affiliates'
lenders; (iii) conflict with or result in any material breach or violation of
any of the terms and conditions of, or constitute (or with notice or lapse of
time or both constitute) a default under, any instrument, contract or other
agreement to which such party is a party or by which such party is bound; (iv)
violate any order, judgment or decree against, or binding upon, such party or
upon its respective securities, properties or businesses; or (v) violate any law
or regulation of such party's country of organization or any other country in
which it maintains its principal office; and
(d) with respect to Clause 3(b)(iv) of the Motorola Share
Purchase Agreement, neither it nor any of its Affiliated Entities (as defined in
the Motorola Share Purchase Agreement), directors, employees or agents have been
advised of or have knowledge of facts or circumstances involving the Condition
of the Company (as defined in the Motorola Share Purchase Agreement) that
demonstrate an existing material misrepresentation by Motorola pursuant to the
Motorola Share Purchase Agreement that would give rise to an ability of the
Company to terminate the Motorola Share Purchase Agreement or to a claim for
indemnification pursuant to Clause 10(b)(i) of the Motorola Share Purchase
Agreement.
23
11. FEES AND EXPENSES. Except as otherwise specifically provided in
this Agreement, each of the parties hereto shall bear its respective fees and
expenses incurred in connection with the preparation, execution and performance
of this Agreement and the transactions contemplated hereby and thereby,
including, without limitation, all fees and expenses of agents, representatives,
counsel and accountants.
12. CONFIDENTIALITY.
12.1 GENERAL OBLIGATION. Each party undertakes that it shall
not reveal, and shall cause its directors, officers and employees not to reveal,
to any third party any information acquired by it or them in connection with
this Agreement or confidential or proprietary information concerning the
organization, business, technology, finance, transactions or affairs of the
Company or the Subsidiaries or any other party hereto without the prior written
consent of the other parties.
12.2 EXCEPTIONS. The provisions of Section 12.1 shall not
apply to:
(a) information that is publicly available (except by
virtue of a breach of this Agreement);
(b) a disclosure to legal, financial or professional
advisors or bankers of any party;
(c) a disclosure, after giving prior notice to the
other parties to the extent practicable under the circumstances and subject to
any practicable arrangements to protect confidentiality, to the extent required
under the rules of any stock exchange or by applicable laws or governmental
regulations or judicial or regulatory process or in connection with any judicial
process regarding any legal action, suit or proceeding arising out of or
relating to this Agreement;
(d) a disclosure by the Company reasonably necessary in
the ordinary course of business or otherwise in connection with transactions or
proposed transactions of the Company; or
(e) a disclosure required by the lenders of any
Shareholder or of any Shareholder's Affiliates.
12.3 DISCLOSURE TO THIRD PARTIES. Upon any Shareholder
entering into negotiations with any Person with a view to selling any Shares to
such Person, information in respect of the Company or any Subsidiary that is
reasonably necessary to permit such Person to evaluate the business of the
Company or such Subsidiary may be provided to such Person, provided that such
Person has executed a binding confidentiality letter in a form approved by the
24
Board; PROVIDED that where such Person is involved in a business directly
competing with that of the Company, the Board may prohibit the disclosure of any
such confidential information as the Board may reasonably determine.
13. PUBLICITY. Except for a publicity release or public announcement
(after giving prior notice to and consulting with the other parties to the
extent practicable under the circumstances), to the extent required under the
rules of any stock exchange or by applicable laws or governmental regulations or
judicial or regulatory process, and except for disclosures permitted by Article
12, no publicity release or public announcement concerning the Company any
Subsidiary or the relationship or involvement of the parties shall be made by
any party without advance approval thereof by the Board; PROVIDED that no
disclosure of a party's identity may be made without the prior approval of such
party, except as permitted by Article 12.
14. U.S. INVESTMENT COMPANY ACT OF 1940. Each of the parties hereto
agrees that the Company and the Subsidiaries shall conduct their business at all
times such that the Company or any present or future Subsidiary is not deemed to
be an "investment company" under the U.S. Investment Company Act of 1940.
15. MISCELLANEOUS.
15.1 LEGEND. Each certificate for any Shares now held or
hereafter acquired by any Shareholder shall, for as long as this Agreement is
effective, bear a legend as follows:
"International Wireless Communications Pakistan Limited (the "Company") is
a company organized under the laws of Mauritius, and the shares represented
by this certificate may not be sold, assigned, transferred, exchanged,
mortgaged, pledged or otherwise disposed of or encumbered without
compliance with the provisions of that certain Shareholders' Agreement,
dated as of ______________________________, 1997 among the Company and the
shareholders of the Company named therein. A copy of such Shareholders'
Agreement is on file at the registered offices of the Company. The Company
will not register the transfer of such shares on the register of members of
the Company unless and until the transfer has been made in compliance with
the terms of such Shareholders' Agreement."
15.2 NOTICES. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally or
sent by registered mail or international courier service, in either case postage
prepaid, or delivered by facsimile or similar telecommunications equipment. Any
such notice shall be deemed given when so delivered personally or, if sent by
registered mail, five days after the date of deposit in the mails or, if sent by
international courier service, three days after the date of deposit with the
courier service or, if delivered by facsimile or similar telecommunications
equipment, at the time of receipt thereof, as follows:
25
(a) if to the Company, to:
International Wireless Communications
Pakistan Limited
P.O. Box 1130
3rd Floor
12 Xxxx Xxxxxx Street
Port Louis
Mauritius
Attention: _____________
Facsimile No.: _________
(b) if to IWC, to:
International Wireless Communications Limited
000 Xxxxx Xx Xxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
United States of America
Attention: Xx. Xxxx Xxxxxxxx
Facsimile No.: 0-000-000-0000
(c) if to SA Wireless, to:
South Asia Wireless Communications
(Mauritius) Limited
Xxxxx 0000-00
Xxxx Xxxxx'x Xxxx Xxxxxxx
Xxxx Xxxx
Attention: ___________________
Facsimile No.: ________________
Any party may, by notice to the other parties, designate another
address or person for receipt of notices hereunder.
15.3 DISCREPANCIES. If there is any discrepancy between any of
the provisions of the Charter Documents or documents analogous to the Charter
Documents of any of the Subsidiaries and this Agreement, the provisions of this
Agreement shall prevail, and the parties shall thereupon procure that the
Charter Documents or relevant analogous documents, as the case may be, are
promptly amended, to the extent permitted by applicable law, in order to conform
with this Agreement.
26
15.4 SEVERABILITY. In the event any provision hereof is held
void or unenforceable by any court, such provision shall be severable and shall
not affect the remaining provisions hereof.
15.5 ENTIRE AGREEMENT. This Agreement, together with the other
agreements referred to herein, reflects the entire agreement among the parties
and supersedes all prior agreements and communications, either oral or in
writing, among the parties hereto with respect to the subject matter hereof.
15.6 TERM OF AGREEMENT. This Agreement shall become effective
upon the execution hereof by all of the parties hereto and shall continue in
effect until the earlier to occur of (a) the date on which at least 30% of the
Shares in issue on a fully diluted basis are publicly traded on an
internationally recognized stock exchange and (b) any date agreed upon in
writing by all of the Shareholders.
15.7 AMENDMENT AND WAIVER. This Agreement may be amended,
superseded, canceled, renewed or extended, and the terms hereof may be waived,
only by a written instrument signed by all of the parties hereto or, in the case
of a waiver, by the party waiving compliance. No delay on the part of any party
in exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of any party of any such right, power
or privilege, nor any single or partial exercise of any such right, power or
privilege, preclude any further exercise thereof or the exercise of any other
such right, power or privilege. The rights and remedies herein provided are
cumulative and are not exclusive of any rights or remedies that any party may
otherwise have at law or in equity.
15.8 CONSENT TO SPECIFIC PERFORMANCE. The parties hereto
declare that it is impossible to measure in money the damages that would be
suffered by a party by reason of the failure by any other party to perform any
of the obligations hereunder. Therefore, if any party shall institute any
action or proceeding to enforce the provisions hereof, any party against whom
such action or proceeding is brought hereby waives any claim or defense therein
that the other party has an adequate remedy at law.
15.9 ASSIGNMENT; BINDING ON TRANSFEREE. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted transferees from and after the
effective date hereof.
15.10 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF ENGLAND AND WALES.
27
15.11 ARBITRATION.
(a) Any dispute or claim arising out of or relating to
this Agreement, or the breach, termination or invalidity hereof, shall be
finally settled by arbitration under the Rules of Conciliation and Arbitration
of the International Chamber of Commerce (the "Rules") as are currently in force
and as may be amended by the rest of this Section 15.11. For the purpose of
such arbitration, there shall be one or more arbitrators appointed in accordance
with the Rules (such single arbitrator or board of arbitrators, as the case may
be, are referred to below as the "Arbitration Board"). The place of arbitration
shall be Hong Kong. All arbitration proceedings shall be conducted in the
English language. The arbitrators shall decide any such dispute or claim
strictly in accordance with the governing law specified in Section 15.10 of this
Agreement. Judgment upon any arbitral award rendered hereunder may be entered
in any court having jurisdiction, or application may be made to such court for a
judicial acceptance of the award and an order of enforcement, as the case may
be.
(b) Each party shall cooperate in good faith to
expedite (to the maximum extent practicable) the conduct of any arbitral
proceedings commenced under this Agreement.
(c) The costs and expenses of the arbitration,
including, without limitation, the fees of the Arbitration Board, shall be borne
equally by each party to the dispute or claim, and each party shall pay its own
fees, disbursement and other charges of its counsel.
(d) Any award made by the Arbitration Board shall be
final and binding on the parties hereto. The parties expressly agree to waive
the applicability of any laws and regulations that would otherwise give the
right to appeal the decisions of the Arbitration Board so that there shall be no
appeal to any court of law for the award of the Arbitration Board, and a party
shall not challenge or resist the enforcement action taken by another party in
whose favor the award of the Arbitration Board was given.
15.12 SHAREHOLDER OBLIGATIONS; FURTHER ASSURANCES. The parties
hereto shall comply with the provisions of this Agreement in relation to their
investment in the Company and in transacting business with the Company and shall
exercise their respective rights and powers in accordance with and so as to give
effect to this Agreement. Each of the parties shall execute such documents and
other papers and take such further actions as may be reasonably required or
desirable to carry out the provisions hereof and the transactions contemplated
hereby.
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15.13 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
INTERNATIONAL WIRELESS
COMMUNICATIONS PAKISTAN LIMITED
By: /s/ Xxxxxxx Xxxxx
--------------------------------------------------
Name: Xxxxxxx Xxxxx
Title: Director
INTERNATIONAL WIRELESS
COMMUNICATIONS LIMITED
By: /s/ Xxxxx Xxxxx
--------------------------------------------------
Name: X. Xxxxx
Title: Director
SOUTH ASIA WIRELESS
COMMUNICATIONS (MAURITIUS)
LIMITED
By: /s/ Xxxxxxx Xxxxx
--------------------------------------------------
Name: Xxxxxxx Xxxxx
Title: Director
EXHIBIT A
29
DEED OF ADHERENCE
THIS DEED OF ADHERENCE is made the day of 199
BETWEEN:
(1) International Wireless Communications Pakistan Limited, a company
incorporated in Mauritius (the "Company"); and
(2) [Name of New Shareholder] (the "New Shareholder").
WHEREAS:
(A) On the [ ] day of [ ] 1997, the Company and its
shareholders entered into a Shareholders' Agreement (the "Shareholders'
Agreement") to which a form of this Deed is attached as Exhibit A.
(B) The New Shareholder wishes to [be allotted/have transferred to him/her/it]
[ ] shares (the "Shares") in the share capital of the Company from [ ]
(the "Former Shareholder") and in accordance with the Shareholders'
Agreement has agreed to enter into this Deed.
(C) The Company enters this Deed on behalf of itself and as agent for all the
existing Shareholders of the Company.
NOW THIS DEED WITNESSES as follows:
1. INTERPRETATION.
In this Deed, except as the context may otherwise require, all words and
expressions defined in the Shareholders' Agreement shall have the same
meanings when used herein.
2. COVENANT.
The New Shareholder hereby covenants to the Company as trustee for all
other persons who are at present or who may hereafter become bound by the
Shareholders' Agreement, and to the Company itself to adhere to and be
bound by all the duties, burdens and obligations of a shareholder holding
the same class of share capital as the Shares imposed pursuant to the
provisions of the Shareholders' Agreement and all documents expressed in
writing to be supplemental or ancillary thereto as if the New Shareholder
had been an original party to the Shareholders' Agreement since the date
thereof.
30
3. ENFORCEABILITY.
Each existing shareholder and the Company shall be entitled to enforce the
Shareholders' Agreement against the New Shareholder, and the New
Shareholder shall be entitled to all rights and benefits of the Former
Shareholder (other than those that are non-assignable) under the
Shareholders' Agreement in each case as if the New Shareholder had been an
original party to the Shareholders' Agreement since the date thereof.
4. GOVERNING LAW.
THIS DEED OF ADHERENCE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF ENGLAND AND WALES.
IN WITNESS WHEREOF, this Deed of Adherence has been executed as a deed
on the date first above written.
INTERNATIONAL WIRELESS
COMMUNICATIONS PAKISTAN
LIMITED
By:______________________________
Name:
Title:
[NAME OF NEW SHAREHOLDER]
By:______________________________
Name:
Title:
ANNEX A
PRO RATA SHARE OF CAPITAL CONTRIBUTIONS
AND SHAREHOLDER LOANS TO BE MADE TO PMCL
I. Capital Contributions and Shareholder Loans to be made by the Company as at
THE CLOSING (AS DEFINED IN THE MOTOROLA SHARE PURCHASE AGREEMENT).
1. CAPITAL CONTRIBUTIONS.
US$___________________________ in the aggregate.
SHAREHOLDER SHARE OF CAPITAL CONTRIBUTIONS
IWC US$________________________
SA Wireless US$________________________
2. SHAREHOLDER LOANS.
US$___________________________ in the aggregate.
SHAREHOLDER SHARE OF SHAREHOLDER LOANS
IWC US$________________________
SA Wireless US$________________________
