1
EXHIBIT 10.27D
Final Draft
_____________, 1997
International Wireless Communications
Pakistan Limited
P.O. Box 1130
3rd Floor
00 Xxxx Xxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxxxxxx
Saif Telecom (Pvt.) Limited
4th Floor
Xxxxxx Xxxxx
00 Xxxx Xxxx
Xxxxxxxxx
Pakistan
Pakistan Mobile Communications (Pvt.) Limited
(the "Company")
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Ladies and Gentlemen:
Reference is made to the Restated and Amended Shareholders Agreement,
dated as of even date herewith (the "Shareholders Agreement"), among
International Wireless Communications Pakistan Limited, a company organized
under the laws of Mauritius ("Newco"), Saif Telecom (Pvt.) Limited, a company
organized under the laws of Pakistan ("SAIF"), and Motorola International
Development Corporation, a company organized under the laws of the State of
Delaware, United States of America ("MIDC"). All capitalized terms used but not
defined herein shall have the respective meanings assigned to them in the
Shareholders Agreement.
The parties hereto agree that the execution and delivery of this
letter agreement by each of them is a condition precedent to the execution and
delivery of the Shareholders Agreement.
Accordingly, in consideration of the mutual promises and undertakings
contained herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. FIVE YEAR BUSINESS PLAN.
Each Shareholder agrees that, at the meeting of the board of directors
of the Company (the "Board") to be held on the date of this letter agreement or
immediately thereafter,
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it shall cause its representatives on the Board to vote in favor of the
approval and adoption of the Five Year Business Plan which is attached hereto
as Annex A.
2. DEBT TO EQUITY RATIO.
The Shareholders agree that they intend to procure non-recourse
project financing for the Company as soon as is feasible. Accordingly, the
Shareholders anticipate that the debt to equity ratio of the Company will be
adjusted to 60:40 or, if the Shareholders think necessary, 50:50 in 1997 and
1998, through a combination of additional capital contributions and loans to be
made by the Shareholders ("Shareholder Loans") to the Company as more fully
described in Paragraph 3 of this letter agreement. For the purpose of
determining the Company's debt-to-equity ratio, all Shareholder Loans shall be
treated as equity.
3. RECAPITALIZATION OF THE COMPANY.
(a) On the date hereof, the Shareholders shall make additional
capital contributions in the aggregate amount of US$8,100,000 and Shareholder
Loans in the aggregate amount of US$5,900,000, each such capital contributions
and Shareholder Loans to be made on a pro rata basis in respect of the Shares
that are held by them as of the date hereof.
(b) For the purpose of Paragraph 3(a), SAIF has, concurrently
with the execution of the Shareholders Agreement and this letter agreement,
remitted or caused to be remitted on its behalf the amount of US$2,000,000 (the
"Base Amount") to the bank account of the Company. The portion of the Base
Amount in excess of the additional capital contributions required to be made by
SAIF under Paragraph 3(a) shall be treated as a Shareholder Loan made by SAIF to
the Company (the "SAIF Loan").
(c) The Shareholders agree that, from the date hereof through
December 31, 1999 (the "Carry Period"), SAIF shall not be obligated to provide
its pro rata share of any additional capital contributions or Shareholder Loans
that the Board calls for in excess of the Base Amount, and with respect to the
SAIF pro rata share of any such additional capital contributions or Shareholder
Loans, the matter shall be handled in accordance with Paragraphs 3(d), (e), (f),
(g), (h), (i) and (j), as the case may be.
(d) If, during the Carry Period, the Company requires additional
funds, then except where applicable Pakistan law requires, or the Board
determines that it is necessary or desirable, that such funding be made in the
form of capital contributions, such funding shall be made in the form of
Shareholder Loans. All Shareholder Loans (including the SAIF Loan) shall bear
interest at 15% per annum compounded annually or, if less, the maximum interest
rate permitted by the State Bank of Pakistan, and shall be evidenced by a
promissory note in form and substance reasonably acceptable to the Company and
the Shareholders.
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(e) Subject to Paragraph 3(i), if, during the Carry Period, the
Board makes calls for Shareholder Loans and SAIF declines to make its pro rata
share of the Shareholder Loans called for by the Board, each of MIDC and Newco
shall, in addition to the pro rata Shareholder Loans that are required to be
made by them, make an additional Shareholder Loan on a pro rata basis based on
their then respective shareholdings in the Company without taking into account
the shareholding percentage of SAIF (such ratio, the "MIDC/Newco Ratio") in an
aggregate principal amount of the pro rata Shareholder Loan that would otherwise
have been made by SAIF. Such Shareholder Loans made by MIDC and Newco shall be
non-convertible loans bearing interest at 15% per annum compounded annually or,
if less, the maximum interest rate permitted by the State Bank of Pakistan, and
shall be evidenced by a promissory note in form and substance reasonably
acceptable to the Company, MIDC and Newco.
(f) If the Board calls for additional capital contributions to
be made by the Shareholders after the date hereof and during the Carry Period, a
corresponding principal amount of the SAIF Loan shall be automatically converted
as of the due date of the capital contributions into SAIF's pro rata share of
the capital contributions that have been called for by the Board.
(g) To the extent that, during the Carry Period, (i) the Company
requires additional funds, (ii) applicable Pakistan law requires or the Board
determines that it is necessary or desirable for such additional funding to be
in the form of additional capital contributions and (iii) the Board makes calls
for additional capital contributions after the entire principal amount of the
SAIF Loan has theretofore already been converted into capital contributions by
SAIF to the Company as contemplated by Paragraph 3(f), at SAIF's request made on
or before the due date of the capital call, MIDC and Newco shall lend funds to
SAIF in United States dollars based on the MIDC/Newco Ratio in the amount of
SAIF's pro rata share of the additional capital contributions that have been
called for (the "MIDC/Newco Loans"). If SAIF does not request or incur a
MIDC/Newco Loan for the applicable capital call, it shall be diluted
accordingly. The MIDC/Newco Loans shall be evidenced by promissory notes to be
in form and substance reasonably acceptable to the Shareholders, which shall
contain the following principal terms: (i) the proceeds of the MIDC/Newco Loans
shall be used solely by SAIF to make its pro rata share of the capital
contributions called for by the Board, (ii) the MIDC/Newco Loans shall bear
interest at 15% per annum compounded annually or, if less, the maximum interest
rate permitted by the State Bank of Pakistan, and all principal of and interest
on the MIDC/Newco Loans shall be payable in United States dollars, (iii) the
final maturity date of all amounts outstanding under any MIDC/Newco Loan shall
be the eighth anniversary of the making of each such MIDC/Newco Loan, (iv) SAIF
shall, as of the making of any such MIDC/Newco Loan, instruct the Company in
writing to pay directly to MIDC and Newco in accordance with the MIDC/Newco
Ratio (A) all of the cash dividends or distributions that SAIF is entitled to
receive from the Company in respect of the Shares that are subscribed for by
XXXX and paid for with the proceeds of such MIDC/Newco Loan, and (B) half of all
cash dividends or distributions that SAIF is entitled to receive from the
Company in respect of all of the Shares held by it that are not encumbered or
pledged in any way in favor of MIDC or Newco, which
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payments shall be applied in the order set forth in clause (vi), (v) SAIF
shall, on the date of receipt of any cash proceeds from any sale, transfer or
other disposition of any or all of its Shares pay such amounts to MIDC and
Newco in accordance with the MIDC/Newco Ratio, which amounts shall be applied
in the order set forth in clause (vi), and (vi) any amounts received by MIDC
or Newco pursuant to clauses (iv) and (v) shall be applied first to the
payment of interest accrued but unpaid on, and then to the outstanding
principal amount of, all of their respective MIDC/Newco Loans, and to the
extent that more than one MIDC/Newco Loan has been made by MIDC and Newco,
then payment of interest or principal shall be made with respect to the
MIDC/Newco Loans in the order that they were made. In addition, XXXX shall
pledge to each of MIDC and Newco the applicable number of Shares, determined
on the basis of the MIDC/Newco Ratio on which the applicable MIDC/Newco Loans
were made, that were subscribed to and acquired by SAIF with the additional
capital contributions made by it using the proceeds of the MIDC/Newco Loans,
which pledge shall be pursuant to a pledge agreement in form and substance
reasonably satisfactory to the Shareholders.
If either MIDC or Newco fails to make its respective MIDC/Newco Loan
to SAIF as provided in this Paragraph 3(g), then MIDC or Newco (as the case may
be) shall be a defaulting Shareholder, such default shall be deemed to
constitute an Event of Default under Clause 16.3(d) of the Shareholders
Agreement and the provisions of Clause 16.5 of the Shareholders Agreement shall
apply MUTATIS MUTANDIS with respect to such default, except that as between MIDC
or Newco (as the case may be) and SAIF as the non-defaulting Shareholders, SAIF
shall have the right to first acquire from MIDC or Newco (as the case may be),
as the defaulting Shareholder, without paying any consideration to the
defaulting Shareholder, such number of Shares of the defaulting Shareholder so
as to preserve its shareholding percentage in the Company as if the requisite
MIDC/Newco Loans had been made under this Paragraph 3(g) and SAIF had made its
pro rata share of the additional capital contributions that had been called for
using the proceeds of such MIDC/Newco Loans. Thereafter, SAIF and MIDC or Newco
(as the case may be) shall have the right under Clause 16.5 of the Shareholders
Agreement to purchase the remaining Shares of the defaulting Shareholder on a
pro rata basis as set forth therein.
(h) With respect to any call for additional capital
contributions made by the Board after the date hereof and during the Carry
Period, there shall be an increase in the share capital of the Company, with
each Shareholder subscribing for additional Shares in cash at the subscription
price determined by the Board in proportion to the number of Shares then held by
them.
(i) Notwithstanding anything to the contrary contained in this
letter agreement, if the aggregate amount of calls for additional capital
contributions or Shareholder Loans made by the Board after the date hereof
exceed, at any time prior to December 31, 1998, the aggregate commitments of any
party to make capital contributions and Shareholder Loans to the Company through
to December 31, 1998 as set forth in the Five Year Business Plan attached hereto
as Annex A, then such party shall have no obligation to make any capital
contributions or Shareholder Loans in excess of its commitments and the making
of any such capital contributions or Shareholder Loans in excess of its
commitments shall be handled in accordance
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with Clause 9.2 and Clause 9.3 of the Shareholders Agreement, respectively,
except that in order to ensure that XXXX's interest in the Company during the
Carry Period is not diluted: (x) with respect to the application of Clause
9.2 of the Shareholders Agreement, MIDC and Newco shall lend funds to SAIF in
United States dollars based on the MIDC/Newco Ratio to enable SAIF to make
its pro rata share of the capital contributions called for pursuant to Clause
9.2 of the Shareholders Agreement, and the provisions of Paragraph 3(g) of
this letter agreement shall apply MUTATIS MUTANDIS to such loans from MIDC
and Newco; and (y) with respect to the application of Clause 9.3 of the
Shareholders Agreement, the maker of any convertible Shareholder Loan
thereunder shall enter into arrangements, including, but not limited to the
loan mechanism set out in Paragraph 3(g), reasonably satisfactory to SAIF as
of the date of the making of such Shareholder Loan to ensure that XXXX's
interest in the Company is not diluted by virtue of the right to convert such
Shareholder Loan into Shares of the Company (even though such right of
conversion may be exercised after the expiration of the Carry Period).
(j) For the avoidance of doubt, if the aggregate amount of calls
for additional capital contributions or Shareholder Loans made by the Board
after the date hereof through to December 31, 1998 is less than the aggregate
commitments of any party to make capital contributions and Shareholder Loans to
the Company through to December 31, 1998 as set forth in the Five Year Business
Plan attached hereto as Annex A, then all such unfulfilled commitments shall
automatically terminate as of December 31, 1998.
4. SAIF SALE OF SHARES.
(a) If, during the Carry Period and in accordance with the
provisions of the Shareholders Agreement, XXXX accepts a bona fide offer from an
unrelated third party for the purchase of its Shares after the Remaining
Shareholders have waived their rights of first refusal under Clause 12 of the
Shareholders Agreement with respect to such proposed sale of the Shares held by
XXXX, then as of the date of XXXX's acceptance of such offer:
(i) the Carry Period shall automatically terminate;
(ii) the proposed transferee of the Shares shall not be
entitled to any of the rights of SAIF contained in this letter agreement,
except that any Shareholder Loans made by MIDC and Newco pursuant to
Paragraph 3(e) shall continue in effect and remain outstanding in
accordance with their terms; and
(iii) any future needs of the Company for Shareholders
Loans shall be handled in accordance with Clause 9.3 of the Shareholders
Agreement.
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PROVIDED, HOWEVER, that if XXXX fails to consummate the sale of its Shares to
the unrelated third party, then this letter agreement shall continue in full
force and effect as though XXXX had never accepted any such offer.
(b) In addition to the provisions of Paragraph 4(a), on the date
of the closing of the sale and purchase of the Shares held by SAIF to such
unrelated third party, SAIF shall repay the principal of all outstanding
MIDC/Newco Loans used for the purchase of such Shares, together with any
interest accrued but unpaid thereon, and upon receipt of all amounts due and
owing with respect thereto, MIDC and Newco shall deliver to SAIF the applicable
promissory notes evidencing such MIDC/Newco Loans marked "canceled," together
with the share certificates evidencing the Shares that were purchased with the
proceeds of such MIDC/Newco Loans and which were pledged by XXXX to MIDC and
Newco to secure the MIDC/Newco Loans made by them, respectively.
(c) For the avoidance of doubt, the anti-dilution provisions in
this letter agreement in favor of SAIF shall not inure to the benefit of an
unrelated third party transferee of the Shares held by XXXX.
5. SHAREHOLDER GUARANTIES.
Notwithstanding anything contained to the contrary in Clause 9.4
of the Shareholders Agreement and other than with respect to the third party
debt of the Company existing as of the date hereof which is dealt with
separately in Paragraph 6 of this letter agreement, if the Company needs to
borrow money from third party lenders and it is a condition precedent to the
extension of such credit that the Shareholders issue guaranties with respect
thereto, SAIF shall not be required to issue any such Shareholder guaranty, but
each of MIDC and Newco shall issue a Shareholder guaranty in accordance with the
MIDC/Newco Ratio in respect of the amounts that are required to be so
guaranteed. The provisions of Clause 9.4 of the Shareholders Agreement granting
an option to purchase additional Shares at par to Shareholders that provide
disproportionate Shareholder guaranties shall not apply to the Shareholder
guaranties made by MIDC and Newco under this Paragraph 5.
6. MOTOROLA GUARANTY.
(a) The parties hereto acknowledge that an Associate of MIDC,
Motorola Inc. ("Motorola Parent"), has heretofore issued (i) two guaranties for
the benefit of Citibank, N.A., the first dated December 20, 1993 and the second
dated June 7, 1994 (together, the "Citibank Guaranties") and (ii) a guaranty for
the benefit of Sanwa Bank, dated February 14, 1997 (the "Sanwa Guaranty", and
together with the Citibank Guaranties, the "Motorola Guaranties") to guarantee
the payment of the principal of, and interest on, loans made by Citibank, N.A.
and Sanwa Bank, respectively (together, the "Lenders") to the Company and all
other amounts payable by the Company to the Lenders with respect thereto
(together, the "Obligations"). As of the date of this letter agreement, the
aggregate outstanding Obligations guaranteed under the Motorola Guaranties is
US$42,700,000, consisting of outstanding
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Obligations of US$15,000,000 under the first Citibank Guaranty and
US$7,700,000 under the second Citibank Guaranty and outstanding Obligations
of US$20,000,000 under the Sanwa Guaranty.
(b) The parties agree that if, on or before the first
anniversary of the Closing (as defined in the Share Purchase Agreement, dated
_______________________, 1997, between MIDC and Newco (the "Share Purchase
Agreement")), Newco has not made any arrangements reasonably satisfactory to the
Shareholders, the Lenders and Motorola Parent, with effect as of such date (i)
to terminate the Motorola Guaranties, or (ii) to reduce the liability of
Motorola Parent or any of its Associates under the Motorola Guaranties or any
guaranty or guaranties issued in substitution thereof to only a portion of the
then outstanding Obligations in an amount equal to its pro rata share thereof
based on the MIDC/Newco Ratio (such arrangements, the "Guaranty Solution"),
then, on the first anniversary of the Closing, subject to the Paragraph 6(c),
Shares representing 4% of the total issued share capital of the Company as
determined as of the date of this letter agreement (the "Subject Shares") that
have been placed in escrow with an escrow agent (the "Escrow Agent") as provided
in Clause 2(d) of the Share Purchase Agreement shall be transferred to MIDC.
(c) The parties acknowledge and agree that all of the Subject
Shares are to be transferred to MIDC if, on or before the first anniversary of
the Closing, Newco has failed to arrange any Guaranty Solution and the amount of
the aggregate outstanding Obligations as set forth in Paragraph 6(a) has not
been reduced. However, if Newco has arranged any partial Guaranty Solution
under which the disproportionate nature of the Motorola Guaranties has been
reduced so as to more closely proximate the MIDC/Newco Ratio or the aggregate
outstanding Obligations have been reduced from the amount set forth in Paragraph
6(a), then Newco shall only be obligated to transfer to MIDC, and MIDC shall
only be entitled to receive from Newco through the Escrow Agent, a corresponding
proportion of the Subject Shares. On the first anniversary of the Closing,
Newco shall deliver to MIDC a statement setting forth in reasonable detail its
calculation of the number of the Subject Shares to be transferred to MIDC
pursuant to this Paragraph 6(c). Subject to the immediately following sentence,
Newco and MIDC shall then issue joint instructions to the Escrow Agent to
release to MIDC share certificates evidencing such number of Subject Shares
(which shall have been duly endorsed for transfer to MIDC); PROVIDED, HOWEVER,
that if Newco is required to apply to the Company to issue new share
certificates in the requisite number of Subject Shares to be transferred to MIDC
and to the relevant Pakistan authorities for approval to export out of Pakistan
such new share certificates, then the Escrow Agent shall promptly deliver the
share certificates to MIDC for the requisite number of Subject Shares after the
appropriate share certificates have been issued by the Company in substitution
for the share certificates held by the Escrow Agent and such approval has been
obtained and until such events have occurred MIDC shall enjoy all beneficial
ownership of such Subject Shares, including the right to receive dividends and
distributions with respect thereto and the right to vote such Subject Shares.
Any dispute between Newco and MIDC regarding the number of Subject Shares to be
transferred to MIDC that cannot be resolved through consultation shall be
handled in accordance with Clause 18.4 of the Shareholders Agreement. If Newco
shall fail to instruct the Escrow Agent to release and transfer the requisite
number of Subject Shares to MIDC (except, however, where such failure is
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due to a BONA FIDE dispute between MIDC and Newco regarding the requisite
number of Subject Shares to be transferred), then such breach shall
constitute an Event of Default and MIDC shall have the rights set forth in
Clause 16.5 of the Shareholders Agreement, except that in lieu of an
appraisal of the value of the Shares held by Newco, MIDC shall have the right
to purchase the Shares held by Newco at 50% of the Purchase Price (as defined
in the Share Purchase Agreement) per Share that was paid by Xxxxx at the
Closing.
(d) If, on or before the date that is eighteen months after the
date of the Closing, no Guaranty Solution has been made, then Newco shall be
obligated to provide, at its option, a Shareholder guaranty (which shall be
acceptable to the third party lenders of the loans that are being so
guaranteed), a Shareholder Loan or a combination of the foregoing, in an
aggregate amount equal to its pro rata share based on the MIDC/Newco Ratio of
the then outstanding Obligations, and the liability of Motorola Parent under the
Motorola Guaranties shall accordingly be reduced to its pro rata share based on
the MIDC/Newco Ratio of the then outstanding Obligations. If at any time
thereafter the Obligations are reduced, then to the extent that Newco shall have
provided any Shareholder Loans under this Paragraph 6(d) and the Company has not
repaid such Shareholder Loans in such amount as to preserve the pro rata nature
of MIDC's and Newco's obligations to guarantee the Obligations, then MIDC shall
make a Shareholder Loan to the Company so that, when taking into account the
then outstanding Obligations as so reduced, MIDC and Newco shall each continue
to guarantee such Obligations on a pro rata basis based on the MIDC/Newco Ratio,
whether through the provision of Shareholder guaranties and/or Shareholder
Loans.
(e) If Newco shall fail to perform its obligations described in
Paragraph 6(d), then MIDC shall have the right, but not the obligation, to
purchase up to such number of the Shares held by Newco, which when purchased at
50% of the Purchase Price (as defined in the Share Purchase Agreement) per Share
would result in a purchase price equal to the amount of Newco's pro rata share
of the then outstanding Obligations with respect to which it failed to perform
its obligations under Paragraph 6(d). If MIDC exercises its right to purchase
any such Shares held by Newco, then Newco shall be obligated to make a
Shareholder Loan to the Company with the purchase price paid to it for such
Shares so as to cause the obligation of MIDC and Newco to guarantee the
outstanding Obligations to be made on a pro rata basis based on the MIDC/Newco
Ratio or, if MIDC has not purchased the maximum number of Shares held by Newco
that it is entitled to purchase under this Paragraph 6(e), then as closely
thereto as possible.
(f) Any Shareholder Loans made pursuant to Paragraph 6(d) or (e)
shall be non-convertible loans bearing interest at 15% per annum compounded
annually or, if less, the maximum interest rate permitted by the State Bank of
Pakistan, and shall be evidenced by a promissory note in form and substance
reasonably acceptable to the Company, MIDC and Newco. Such Shareholder Loans
shall be used to reduce the then outstanding Obligations in such manner as the
Company thinks fit for the sole purpose of preserving the pro rata shares, based
on the MIDC/Newco Ratio, of MIDC's and Newco's obligations to guarantee the
Obligations.
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(g) In addition to the foregoing, if, as of the first
anniversary of the Closing, no Guaranty Solution has been made, then the parties
agree that the Company shall pay a fee to Motorola Parent to compensate it for
continuing to maintain the Motorola Guaranties on a disproportionate basis.
Such fee shall accrue from the date of the first anniversary of the Closing
until a Guaranty Solution has been made and shall be payable in United States
dollars quarterly in arrears. The fee shall be the greater of (x) the average
of the fees quoted by three banks or other financial institutions of
international standing reasonably acceptable to MIDC and Newco for the issuance
of guaranties of like tenor or (y) the difference between (i) the amount in
interest payable to Newco for any Shareholder Loans it may provide pursuant to
Paragraphs 6(d) and (e) and (ii) the interest that is payable by the Company on
the third party loans that are the subject of the Motorola Guaranties. The fee
payable to Motorola Parent under this Paragraph 6(g) shall be appropriately
adjusted from time to time if a partial Guaranty Solution is made or the
aggregate outstanding Obligations are reduced from the amount set forth in
Paragraph 6(a). If, for whatever reason, the State Bank of Pakistan does not
approve the payment of such fee to be paid to Motorola Parent or approves a fee
that does not fully compensate Motorola Parent as contemplated under this
Paragraph 6(g), then the parties agree to seek alternative solutions with which
to equitably compensate Motorola Parent for continuing to maintain the Motorola
Guaranties on a disproportionate basis.
7. DEFAULT OF A NEWCO INVESTOR.
(a) The parties acknowledge that, under Clause 16.3(d) of the
Shareholders Agreement, the failure by a Shareholder to provide capital
contributions or Shareholder loans which it has agreed to provide pursuant to
Clause 9.1 of the Shareholders Agreement on the due date or within the cure
period stipulated in Clause 16.3(d) of the Shareholders Agreement constitutes an
Event of Default which will give the non-defaulting Shareholders the right to
purchase the Shares held by the defaulting Shareholder at a purchase price of
50% of their fair market value.
(b) The parties acknowledge that Newco has been newly-formed by
a group of investors (the "Newco Investors") and that, whenever Newco is
obligated to make capital contributions or Shareholder loans to the Company
pursuant to Clause 9.1 of the Shareholders Agreement, the Newco Investors shall
fund the requisite amounts to Newco in proportion to their shareholding
percentages in Newco so as to enable Newco to fulfil such obligations. If any
Newco Investor (the "Defaulting Newco Investor") shall so fail to provide its
pro rata share of any such funding that is required for Newco to make capital
contributions or Shareholder loans to the Company pursuant to Clause 9.1 of the
Shareholders Agreement, but the other Newco Investors (the "Non-defaulting Newco
Investors") shall have done so and where none of the Non-defaulting Newco
Investors have elected to make up the funding that the Defaulting Newco Investor
has failed to provide as provided in the shareholders agreement among the
shareholders of Newco, then Newco shall, on the due date of the making of the
capital contributions or the Shareholder loans to the Company or within the cure
period stipulated in Clause 16.3(d) of the Shareholders Agreement, make such
part of its required capital contributions or Shareholder loans with the funds
that have been provided by the Non-defaulting Newco Investors, and in so doing
and notwithstanding Paragraph 7(a) of this letter
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agreement, no Event of Default shall be deemed to have occurred with respect
to Newco. Instead, the parties agree that Newco shall have the right to
purchase the shares held by the Defaulting Newco Investor in Newco or to
otherwise cause the Defaulting Newco Investor to divest its shares in Newco
in consideration for the transfer by Newco to the Defaulting Newco Investor
of such number of Shares that is attributable and corresponds to the
shareholding percentage in Newco of the Defaulting Newco Investor, with the
result that the Defaulting Newco Investor shall become a direct Shareholder
of the Company. In connection therewith, Newco shall cause the Defaulting
Newco Investor to execute and deliver a deed of adherence substantially in
the form of Exhibit C to the Shareholders Agreement. The parties hereby agree
that Clause 12 of the Shareholders Agreement shall not apply to any such
transfer of Shares by Newco. Immediately following the transfer of Shares to
the Defaulting Newco Investor, the Defaulting Newco Investor shall be deemed
to have been in default under Clause 16.3(d) of the 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 Newco, and
MIDC, SAIF and Newco (as so constituted with only the Non-defaulting Newco
Investors as its shareholders) shall all have the right to purchase the
Shares held by the Defaulting Newco Investor in accordance with Clause 16.5
of the Shareholders Agreement.
8. OPTION SHARES. Notwithstanding anything to the contrary
contained in the Shareholders Agreement or in this letter agreement, until the
First Option or the Second Option (each as defined in the Share Purchase
Agreement), as applicable, is exercised or otherwise lapses, Motorola shall not
be obligated to make any capital contributions or Shareholder loans to the
Company in respect of the First Option Shares or the Second Option Shares (each
as defined in the Share Purchase Agreement); it being understood that (i) if the
First Option or the Second Option is exercised, then, concurrently with the
closing thereof, Newco shall make the capital contributions and Shareholder
loans to the Company that should have been made in respect of the First Option
Shares or the Second Option Shares during the period from and after the Closing
of the Sale Shares (each as defined in the Share Purchase Agreement) until the
closing of the First Option or Second Option, as applicable, (ii) if the First
Option is not exercised or lapses, then, upon the expiration of the First Option
Period (as defined in the Share Purchase Agreement), Motorola shall make the
capital contributions and Shareholder loans to the Company that should have been
made in respect of the 7.69% shareholding in the Company that it has retained
and which has not been reserved for the exercise of the Second Option during the
period from and after the Closing of the Sale Shares until the expiration of the
First Option Period, and (iii) if neither the First Option nor the Second Option
is exercised, then, in addition to clause (ii) hereof, upon the expiration of
the Second Option Period (as defined in the Share Purchase Agreement), Motorola
shall make the capital contributions and Shareholder loans that should have been
made in respect of the Second Option Shares during the period from and after the
Closing of the Sale Shares until the expiration of the Second Option Period.
9. SHAREHOLDERS AGREEMENT. This letter agreement shall be read
together with the Shareholders Agreement.
10. GOVERNING LAW. This letter agreement shall be governed by and
construed in accordance with the laws of Pakistan.
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11. COUNTERPARTS. This letter agreement may be executed in
counterparts, each of which shall be an original and all of which, when taken
together, shall constitute one and the same instrument.
If the foregoing accurately reflects our agreements relating to the
subject matter thereof, please indicate by signing in the spaces indicated
below.
Yours sincerely,
MOTOROLA INTERNATIONAL
DEVELOPMENT CORPORATION
By______________________
Name:
Title:
AGREED TO AND ACCEPTED
AS OF THE DATE SET FORTH
ABOVE BY:
INTERNATIONAL WIRELESS
COMMUNICATIONS PAKISTAN
LIMITED
By_______________________
Name:
Title:
SAIF TELECOM (PVT.) LIMITED
By_______________________
Name:
Title:
AGREED TO AND ACCEPTED AS OF
THE DATE SET FORTH ABOVE WITH
RESPECT TO PARAGRAPH 6 ONLY BY:
MOTOROLA INC.
By_______________________
Name:
Title:
