Exhibit 10.7
SHAREHOLDERS AGREEMENT
THIS AGREEMENT is made in Madrid on this 16th day of November, 2000
BETWEEN
(1) SONERA CORPORATION, duly represented in this act by Ms. Pirjo
Kekalainen-Xxxxxxxx, holding Finnish passport number 1444320, by virtue of
special authorization from the Board of Directors of said company dated
November 3, 2000 (hereinafter referred to as "SONERA");
(2) SONERA HOLDING B.V., duly represented in this act by Ms. Pirjo
Kekalainen-Xxxxxxxx, holding Finnish passport number 1444320,
by virtue of special authorization from the Board of Directors
of SONERA dated November 3, 2000 (hereinafter referred to as
"SONERA HOLDING").
(3) ACS, ACTIVIDADES DE CONSTRUCCION Y SERVICIOS, S.A., duly represented in
this act by Xx. Xxxxx Xxxxxx Altozano, with identity card number 139328-V,
by virtue of powers of attorney granted in his favour and formalized in a
notarial deed granted before, the Notary Public of Madrid, Xx. Xxxxx
Xxxxx-Xxxxxxxxx Conde, on April 20, 1998 under number 1.280 of her
notarial files (hereinafter referred to as "ACS"); and
(4) ACS, TELEFONIA MOVIL, S.A., duly represented in this act by Xx. Xxxxx
Xxxxxx Altozano, with identity card number 139328-V, in his capacity as
representative of the Sole Director, by virtue of notarial deed authorised by
the Notary Public of Madrid, Mr. Xxxx Xxxx Xxxxxxx Xxxxxxx, on 4 February, 2000,
under number 298 of his notarial files(hereinafter referred to as "ACSTM");
SONERA, SONERA HOLDING, ACS, and ACSTM are hereinafter jointly referred to as
the "Parties" or, individually, referred to as the "Party".
WHEREAS:
I. SONERA and ACS wish to confirm their agreement with respect to,
inter alia, the incorporation of a Spanish or otherwise
mutually-convenient vehicle, to be jointly-owned between SONERA (75%)
and ACS (25%), ("NewCo") and to serve as the holding entity of the
shares heretofore held by SONERA in MOBI JAZZ-Servicos de
Telecomunicacoes, S.A. ("MOBI JAZZ"), the company through which SONERA
and certain other entities are jointly participating in the ongoing
public tender called by the Portuguese Ministry of EQUIPAMENTO SOCIAL
for the award of four individual licenses (each, a "Licence") to
establish and operate third-generation mobile telephony communications
in Portugal, and with respect to certain matters involving SONERA's and
ACS' respective participations in NewCo, including the terms and
conditions under which SONERA shall have the right to put its stake in
NewCo to ACS in the event that a License is awarded to MOBI JAZZ;
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II. SONERA HOLDING, ACS and ACSTM wish to confirm their agreement
with respect to, inter alia, the conversion of ACSTM into a
limited liability company (SOCIEDAD LIMITADA) to be
incorporated on or after the date hereof under the terms of the
Spanish Limited Liabilities Companies Act ("Ley de Sociedades
Limitadas") and that shall bear the name "ACS-SONERA, Telefonia
Movil, S.L." ("ACSTMSL") and the subsequent contribution to
ACSTMSL by SONERA HOLDING of its 14.2215% shareholding stake in
XFERA MOVILES, S.A. ("XFERA"), holder of one of the licenses
awarded by the Spanish MINISTERIO DE FOMENTO in March 10, 2000
for the establishment and exploitation of third generation
mobile telecommunications services in Spain, with SONERA
HOLDING's stake in ACSTMSL to be 41.6058395% and ACS' stake to
be 58.3941605%, and with respect to certain matters involving
SONERA HOLDING's and ACS' respective participations in ACSTMSL,
including the terms and conditions under which ACS shall have a
call option over SONERA HOLDING's stake in ACSTMSL on the
occurrence of certain events involving SONERA;
NOW, THEREFORE, in consideration of the mutual undertakings and representations
and warranties herein contained, the Parties, intending to be legally bound,
hereby agree as follows:
CLAUSES
1. DEFINITIONS AND INTERPRETATION.
1.1. DEFINITIONS. In this Agreement, the following words and expressions
shall have the following meanings:
(i) "THIS AGREEMENT" means this Agreement together with
the Exhibits attached hereto.
(ii) "ARTICLES OF ASSOCIATION" means the By-Laws of each of NewCo
and ACSTMSL without prejudice to
their registration at the respective
Mercantile Registry.
(iii) "BOARD OF DIRECTORS" means the Board of Directors of each
of NewCo and ACSTMSL.
(iv) "CLOSING" means the consummation of the actions
contemplated herein, in particular,
the contribution by SONERA of its
stake in MOBI JAZZ to NewCo and the
contribution by SONERA HOLDING of its
stake in XFERA to ACSTMSL.
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(v) "CLOSING DATE" means the date on which the Closing
takes place.
(vi) "DIRECTORS" means any of the directors of NewCo
or ACSTMSL that may be appointed to
such office from time to time.
(vii) "SHARE CAPITAL" means the share capital of NewCo or
ACSTMSL from time to time.
(viii) "SHARE" means each and every one of the
shares in which the share capital of
each of NewCo and ACSTMSL is divided
and "SHARES" shall be construed
accordingly.
(ix) "SHAREHOLDERS" shall mean, with respect to NewCo,
SONERA and, with respect to ACSTMSL,
SONERA HOLDING and ACS.
1.2 INTERPRETATION.
(i) References in this Agreement to any statutory provision
shall be deemed to include reference to any statutory
provision which updates, consolidates or replaces the
same, provided that such updating, consolidating or
replacing legislation does not alter the substance of the
existing provision and shall be deemed to refer to any
other regulation, instrument or other subordinate
legislation made under such updating provision.
(ii) Reference to a clause or sub-clause shall be a reference to a clause
or sub-clause of this Agreement.
(iii) The clause or sub-clause headings in this Agreement are inserted for
convenience only and shall not be deemed to affect the construction
or interpretation hereof.
(iv) Where the context so admits words importing the singular shall
include the plural (and vice versa), words importing masculine shall
include the feminine and neuter (and vice versa) and words importing
persons shall include corporate bodies, partnerships, companies and
other business or governmental entities or instrumentalities,
whether registered or not, as well as individuals.
2. CAPITALIZATION AND FUNDING OF NEWCO.
2.1 SONERA and ACS hereby agree to form NewCo on or before the Closing Date
for the purposes set forth herein. Its Articles of Association shall be
substantially in the form attached as Exhibit A hereto.
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2.2 SONERA and ACS agree that they shall make the contributions described
below to the capitalization of NewCo. Consequently, they shall subscribe
and pay-up the Shares in the following manner:
---------------------------------------------------------------------
SHAREHOLDER % PARTICIPATION CONSIDERATION
---------------------------------------------------------------------
SONERA 75% 31.7% of MOBI JAZZ at its
nominal value
---------------------------------------------------------------------
ACS 25% The proportional nominal
amount in pesetas
---------------------------------------------------------------------
TOTAL 100%
---------------------------------------------------------------------
3 DIRECTORS, OFFICERS AND MANAGEMENT OF NEWCO.
3.1 The Board of Directors will be at all times composed of five (5) members.
Upon incorporation of NewCo, SONERA will name three (3) Directors of the
Board of Directors and ACS will name two (2) Directors of such Board of
Directors.
3.2 There will be no Board compensation for Board of Directors members other
than reimbursement for actual costs incurred in attending Board meetings.
Each of the Directors shall be properly covered in their capacity by a
responsibility insurance policy paid by NewCo.
3.3 SONERA as long as it owns Shares representing more than fifty per cent
(50%) of NewCo's Shares will have the right to name the following
officers positions on the Board of Directors of NewCo and ACS will vote in
favor of those nominated by SONERA.
- Chairman, (PRESIDENTE);
- Secretary of the Board, (SECRETARIO).
3.4 In the event of death, resignation or inability to act of any Director,
such Director shall be replaced on the Board of Directors with a nominee
of the Shareholder which nominated such nominee's predecessor.
4 ARTICLES OF ASSOCIATION OF NEWCO.
The Parties undertake to take such steps as may be necessary in order to
adopt as by-laws of NewCo those attached as Exhibit A hereto. They further
undertake that they will not vote their shares as shareholders or
otherwise make any decision or take any action in any manner or capacity
whatsoever for the purpose of amending or repealing the Articles of
Association, unless they do so by majority of eighty (80) percent of the
paid in capital of NewCo.
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In the event that the Mercantile Registry in which NewCo is to be
registered considers that any part of the Articles of Association should
be changed from the form contained in Exhibit A, the parties will amend
them in such a way that the change is in accord with the letter and the
spirit of this Agreement.
In the event of any difference between the terms of this Agreement and the
Articles of Association, except with respect to the enforceability of the
agreements contained herein as to third parties, the terms hereof shall
prevail.
5 FINANCIAL INFORMATION OF NEWCO.
NewCo will have its yearly financial accounts audited by an
internationally recognised accounting firm. The audits must be made
available to the Board of Directors no later than five (5) months after
the end of the fiscal year of each company.
6 BOARD OF DIRECTORS AND GENERAL SHAREHOLDERS MEETINGS OF NEWCO.
6.1 Board of Directors Meetings shall be held no less than two times in every
year and at no more than quarterly intervals unless a special meeting is
requested by at least two (2) Directors or by the Chairman to address
matters where expediency, in the opinion of such Directors, is necessary.
Unless otherwise agreed by all the Directors unanimously, fifteen (15)
calendar days' written notice shall be given to each of the Directors of
all meetings of the Board of Directors at the address notified from time
to time by each Director to the Secretary of NewCo. The meetings shall be
called by the Chairman. Each such notice shall contain, inter alia, an
agenda specifying in reasonable detail the matters to be discussed at the
relevant meeting, shall be accompanied by any relevant information for
discussion at such meeting and, if sent to an address outside Spain, shall
be sent by courier or by telefax.
6.2 All matters voted upon at General Shareholders Meetings of NewCo shall be
validly adopted by a simple majority vote except those referred to the
amendments of the by-laws of NewCo which shall be adopted by majority of
not less than eighty (80) percent of the paid in capital of NewCo.
6.3 All matters voted upon at a Board of Directors Meeting shall be validly
adopted by simple majority vote.
7 DISTRIBUTION POLICY AND DETERMINATION OF NET PROFIT OF NEWCO.
7.1 The Board of Directors will, at the Annual Shareholders Meeting of NewCo,
submit to the Shareholders audited accounts or consolidated audited
accounts (as the case may be) in respect of the preceding financial year;
such Shareholders Meeting will be held not later than six months after the
end of the relevant financial year.
7.2 The Board of Directors will request the auditors of NewCo to report as to
the amount of the net profits for each accounting reference period which
are available for
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distribution by NewCo at the same time as they sign their report on the
audited accounts for the accounting reference period in question.
7.3 The Shareholders will distribute at least seventy five per cent (75%) of
its profits lawfully available for distribution in each financial year as
the Board of Directors shall from time to time resolve, subject to the
legal reserve, when appropriate, and/or such reasonable and proper
reserves for working capital or otherwise as the Board of Directors may,
in its sole discretion, deem appropriate.
8 TRANSFER OF SHARES OF NEWCO.
8.1 Each Shareholder shall have a right of first refusal should the other
Shareholder decides to transfer all or part of its shares, such right to
be regulated in the by-laws of NewCo attached as Exhibit A; provided,
however, that each Shareholder shall have the right to sell, assign,
transfer or dispose any portion of its Shares to one or more affiliates of
such Shareholder without prior written consent of the other Shareholder.
8.2 SONERA'S PUT OPTION.
ACS irrevocably grants to SONERA, which accepts, an option to sell to ACS
all but not less all of SONERA's Shares in NewCo, free and clear from any
lien or encumbrance, under the terms and conditions specified below (the
"SONERA's Put Option"), and ACS irrevocably agrees to purchase the
same, under the terms and conditions specified below.
The SONERA's Put Option may only be exercised if a License is awarded
to MOBI JAZZ.
The exercise period for the SONERA's Put Option will be of three (3)
months commencing on the date on which a License is awarded to MOBI JAZZ.
The exercise of the SONERA's Put Option shall be notified to ACS by
SONERA in writing within the foregoing exercise period and shall indicate
(i) the date for the completion of the transfer of the Share, which shall
not be less than fifteen (15) days from the date of the exercise notice,
(ii) the Notary Public before whom the deed of transfer must be executed,
where appropriate and (iii) the exercise price provided below.
The exercise price for the Shares shall be equal to all amounts disbursed
by SONERA through the date of completion of the SONERA's Put Option in
connection with its investment in MOBI JAZZ and participation in the
tender process aimed at obtaining a License.
Payment of the exercise price for the Shares shall be made in Euros in
cleared funds by bank transfer to the bank account specified by SONERA or
by banking cheque, unless agreed otherwise in writing.
The price shall be paid on the date of completion of the transfer of the
Shares.
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8.3 RECIPROCAL OPTIONS.
Once expired the exercise period for the SONERA's Put Option without
SONERA having exercised it, ACS will have an option to sell to SONERA all,
but not less than all, of the Shares of NewCo owned by ACS free and clear
from any lien or encumbrance. ACS shall send to SONERA within two (2)
months from the date of expiration of the SONERA's Put Option an
option notice (the "Option Notice"). The Option Notice will indicate (i)
the date for the completion of the transfer of the Shares, which shall not
be less than forty-five (45) calendar days from the date of the Option
Notice; (ii) the proposed sale price per Share of its Shares in NewCo and
(iii) the Notary Public before whom the deed of transfer must be executed,
where appropriate. Within thirty (30) calendar days from receipt by SONERA
of the Option Notice:
(i) SONERA will be entitled to notify ACS of its intention to sell to
ACS, in which case ACS will be bound to buy from SONERA, all but not
less than all of the Shares of NewCo owned by SONERA, free and clear
from any lien or encumbrance, at the same price per share notified
by ACS in the Option Notice; or
(ii) If SONERA accepts the offer made by ACS or fails to reply to such
offer in the above thirty days term, SONERA will be bound to buy,
and ACS will be bound to sell, all the Shares of NewCo owned by ACS
at the price offered by ACS in the Option Notice.
Payment of the exercise price for the Shares shall be made in Euro in
cleared funds by bank transfer to the bank account specified by ACS or
SONERA, as appropriate, or by banking cheque, unless agreed otherwise in
writing.
The price shall be paid on the date of completion of the transfer of the
relevant Shares.
9 MAJORITY SHAREHOLDER OF MOBI JAZZ.
SONERA and ACS confirm that it is their intention and understanding that
NewCo will be a "Majority Shareholder" (in lieu of SONERA) for purposes of
the
shareholders agreement among the shareholders of MOBI JAZZ.
10 CAPITALIZATION AND FUNDING OF ACSTMSL.
SONERA HOLDING, ACS and ACSTMSL hereby agree that ACMSTM shall be
transformed into a limited liability company (Sociedad Limitada) on or
before the
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Closing Date for the purposes set forth herein. Its revised Articles of
Association shall be substantially in the form attached as Exhibit B
hereto.
SONERA HOLDING agrees that on the Closing Date shall contribute its
14.2215% shareholding stake in XFERA to ACSTMSL in consideration of a
41.6058395% shareholding stake in the latter company. Consequently, the
shareholdings of ACSTMSL shall be as follows:
-----------------------------------------------------
SHAREHOLDER % PARTICIPATION
-----------------------------------------------------
ACS 58.3941605
-----------------------------------------------------
SONERA HOLDING 41.6058395
-----------------------------------------------------
TOTAL 100%
-----------------------------------------------------
ACS represents and guarantees to SONERA HOLDING that, as of the date of
contribution of SONERA HOLDING's shares of Xfera to ACSTMSL, there
will be no hidden nor contingent liability in ACSTMSL and ACS will
indemnified and hold harmless SONERA HOLDING of whatever liability that
may arise in ACSTMSL should such liability be a consequence of acts or
omissions prior to the date of such contribution of shares. Further, ACS
represents and guarantees to SONERA HOLDING that ACSTMSL was incorporated
as a special purpose vehicle to hold ACS's shares in Xfera and that
ACSTMSL only asset is and has been since incorporation ACS's shares in
Xfera.
11 DIRECTORS, OFFICERS AND MANAGEMENT OF ACSTMSL.
11.1 The Board of Directors will be at all times composed of five (5) members.
Upon the Closing Date, ACS will name three (3) Directors of the Board of
Directors and SONERA HOLDING will name two (2) Directors of such Board of
Directors.
11.2 There will be no Board compensation for Board of Directors members other
than reimbursement for actual costs incurred in attending Board meetings.
Each of the Directors shall be properly covered in their capacity by a
responsibility insurance policy paid by ACSTMSL.
11.3 The Board of Directors will only have the positions of Chairman
(PRESIDENTE) and Secretary (SECRETARIO), there will be no Vice-Chairman or
Vice-Secretary positions. ACSTMSL will not have a CEO (CONSEJERO
DELEGADO).
ACS will have the right to name the Chairman (PRESIDENTE) AND SONERA
HOLDING will vote in favor of the person nominated by ACS. SONERA HOLDING
will have the right to name the Secretary of the Board (SECRETARIO) and
ACS will vote in favour of the person nominated by SONERA.
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11.4 In the event of death, resignation or inability to act of any Director,
such Director shall be replaced on the Board of Directors with a nominee
of the Shareholder which nominated such nominee's predecessor.
12 ARTICLES OF ASSOCIATION OF ACSTMSL.
ACS undertakes to take such steps as may be necessary in order to adopt as
by-laws of ACSTMSL before the Closing Date those attached as Exhibit B
hereto. Each of ACS and SONERA HOLDING undertake that they will not vote
their shares as shareholders or otherwise make any decision or take any
action in any manner or capacity whatsoever for the purpose of amending or
repealing the Articles of Association, unless they do so by majority of
seventy five (75) percent of the paid in capital of ACSTMSL.
In the event that the Mercantile Registry in which ACSTMSL is to be
registered considers that any part of the Articles of Association should
be changed from the form contained in Exhibit A, the parties will amend
them in such a way that the change is in accord with the letter and the
spirit of this Agreement.
In the event of any difference between the terms of this Agreement and the
Articles of Association, except with respect to the enforceability of the
agreements contained herein as to third parties, the terms hereof shall
prevail.
13 FINANCIAL INFORMATION OF ACSTMSL.
ACSTMSL will have its yearly financial accounts audited by an
internationally recognised accounting firm. The audits must be made
available to the Board of Directors no later than five (5) months after
the end of the fiscal year of each company.
14 BOARD OF DIRECTORS AND GENERAL SHAREHOLDERS MEETINGS OF ACSTMSL.
14.1 Board of Directors Meetings shall be held no less than two times in every
year and at no more than quarterly intervals unless a special meeting is
requested by at least two (2) Directors or by the Chairman to address
matters where expediency, in the opinion of such Directors, is necessary.
Unless otherwise agreed by all the Directors unanimously, fifteen (15)
calendar days' written notice shall be given to each of the Directors of
all meetings of the Board of Directors at the address notified from time
to time by each Director to the Secretary of ACSTMSL. The meetings shall
be called by the Chairman. Each such notice shall contain, inter alia, an
agenda specifying in reasonable detail the matters to be discussed at the
relevant meeting, shall be accompanied by any relevant information for
discussion at such meeting and, if sent to an address outside Spain, shall
be sent by courier or by telefax.
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14.2 All matters voted upon at General Shareholders Meetings of ACSTMSL shall
be validly adopted by a reinforced majority vote of sixty percent (60%).
14.3 All matters voted upon at a Board of Directors Meeting shall be validly
adopted by a reinforced majority vote consisting of no less than four
Directors voting in favour.
15 DISTRIBUTION POLICY AND DETERMINATION OF NET PROFIT OF ACSTMSL.
15.1 The Board of Directors will, at the Annual Shareholders Meeting of
ACSTMSL, submit to the Shareholders audited accounts or consolidated
audited accounts (as the case may be) in respect of the preceding
financial year; such Shareholders Meeting will be held not later than six
months after the end of the relevant financial year.
15.2 The Board of Directors will request the auditors of ACSTMSL to report as
to the amount of the net profits for each accounting reference period
which are available for distribution by ACSTMSL at the same time as they
sign their report on the audited accounts for the accounting reference
period in question.
15.3 The Shareholders will distribute at least seventy five per cent (75%) of
its profits lawfully available for distribution in each financial year as
the Board of Directors shall from time to time resolve, subject to the
legal reserve, when appropriate, and/or such reasonable and proper
reserves for working capital or otherwise as the Board of Directors may,
in its sole discretion, deem appropriate.
16 TRANSFER OF SHARES OF ACSTMSL.
16.1 Each Shareholder will have a preferential right to acquire the shares to
be transferred by the other Shareholder as regulated in the by-laws of
ACSTMSL attached as Exhibit B; provided, however, that each Shareholder
shall have the right to sell, assign, transfer or dispose any portion of
its Shares to one or more affiliates of such Shareholder without prior
written consent of the other Shareholder.
16.2 ACS'S CALL OPTION
SONERA HOLDING irrevocably grants to ACS, which accepts, an option to
purchase from SONERA HOLDING all but not less than all of SONERA HOLDING's
Shares in ACSTMSL free and clear from any lien or encumbrance, under the
terms and conditions specified below (the "Call Option").
The Call Option may only be exercised if either of the following
circumstances occurs:
(a) any change of control in SONERA shall have occurred that will
require, by reason of Spanish regulation, SONERA to sell its
indirect participation in XFERA; or
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(b) SONERA shall have been acquired by Vivendi/FCC or an affiliate or
group member of either thereof.
The exercise period for the Call Option will be of three (3) months,
commencing on the date on which either of the triggering events referred
to above occurs.
The exercise of the Call Option shall be notified by ACS to SONERA
HOLDING, within the foregoing exercise period, indicating (i) the date for
the completion of the transfer of the Shares, which shall not be less than
fifteen (15) days from the later of the date of the exercise notice or the
date as of which the price shall have been determined as provided below
and (ii) the Notary Public before whom the deed of transfer must be
executed, where appropriate.
The exercise price for the Shares will be the "fair market value" as
defined in and as determined by the procedure set forth in Clause 10.2 of
the
shareholders agreement among the shareholders of XFERA.
Payment of the exercise price for the Shares shall be made in Euros in
cleared funds by bank transfer to the bank account specified by SONERA
HOLDING or by banking cheque, unless agreed otherwise in writing.
The exercise price shall be paid on the date of completion of the transfer
of the relevant Shares.
17 OPTIMIZATION.
Notwithstanding the foregoing clauses 10 to 16, SONERA HOLDING and ACS
agree that at any time either of them as Shareholders of ACSTMSL shall be
entitled to require ACSTMSL to deliver to them directly their respective
indirect shareholding in XFERA in the form which such Shareholder deems
most tax-efficient, whether by split-off, liquidation or otherwise.
18 FOUNDING SHAREHOLDERS OF XFERA.
SONERA HOLDING wishes to enter into this agreement in the understanding
that its rights and privileges as "Founding Shareholder" of XFERA (as such
term is defined in Recital V of the aforementioned
shareholders agreement)
are not going to be lost, diminished or affected in any manner. In order
to ensure that SONERA HOLDING continues to enjoy the rights and privileges
of Founding Shareholder of XFERA, SONERA, SONERA HOLDING, ACS and ACSTMSL
shall procure that, before December 15, 2000, all the Shareholders and
Guarantors of Xfera (as such terms are defined in the aforementioned
shareholders agreement) enter into a new Supplemental Agreement in order
to acknowledge and expressly accept the contribution of SONERA
HOLDING's shares of Xfera to ACSTMSL (as per clause 10 above) and to
expressly recognize SONERA HOLDING's rights as Founding Shareholder
under the new structure. The execution of the Supplemental Agreement shall
be condition precedent for SONERA HOLDING's obligation to contribute
its shares in Xfera to ACSTMSL
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Should the above mentioned Supplemental Agreement not be entered into by
all the Shareholders and Guarantors of Xfera before December 15, 2000 and
should SONERA HOLDING freely decide to wave such condition precedent and
to contribute its shares in Xfera to ACSTMSL as per clause 10 above, and
notwithstanding the foregoing clauses 10 to 16, ACS and ACSTMSL shall
ensure that SONERA HOLDING shall continue to enjoy the rights and
privileges of "Founding Shareholders" of XFERA as such term is defined in
Recital V of the aforementioned
shareholders agreement. For this purpose,
ACS shall vote in the Shareholders Meetings (and its representatives shall
vote in the Board of Directors Meetings) of ACSTMSL, and ACSTMSL shall
vote in the Shareholders Meetings (and its representatives shall vote in
the Board of Directors Meetings) of XFERA so as to defend and protect the
rights of SONERA HOLDING as Founding Shareholder and/or to procure for its
equivalent rights and privileges as those it currently enjoys.
Any breach by ACS and/or ACSTMSL of the obligations contained in this
clause shall constitute a substantial breach of this agreement.
19 DURATION OF AGREEMENT.
The rights and obligations of a Shareholder under this Agreement shall
terminate at such time as such Shareholder no longer is the owner
(beneficial or otherwise) of any Shares.
20 REPRESENTATIONS AND WARRANTIES.
20.1 Each of the Parties hereby represents and warrants to the other
Parties that it:
20.1.1 has full power and authority to execute and enter into this
Agreement and to perform the transactions contemplated therein;
20.1.2 all corporate acts and other proceedings required to be taken by
or on behalf of such Party to authorize it or execute and carry
out this Agreement and the transactions contemplated herein have
been properly taken;
20.1.3 this Agreement constitutes a legal, valid and binding agreement,
enforceable against such Party in accordance with its terms;
20.1.4 the execution and delivery of, and the performance by said Party
of its obligations under this Agreement, and the transactions
contemplated herein do not and will not:
a) result in a breach of any provision of law, statute, rule or
regulation or any, writ, injunction, order, judgment or decree of
any court or governmental authority;
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b) result in a breach of any deed, indenture, mortgage, lease or
other agreement, contract or instrument to which such Party is
a party or by which any of the Shares are or may be bound or
affected; and
c) require the consent or approval by, notice to or registration
with any public or private person or governmental authority.
20.2 Each of the Parties shall indemnify and hold harmless the other Parties
from and against any and all "damages" arising out of any breach by
such Party of any of its representations and/or warranties and/or
undertakings made and contained in this Agreement.
21 NOTICES.
Any and all notices, claims, demands or other communications required
or permitted to be served pursuant to or in connection with any of the
provisions of this Agreement shall be in writing and delivered
personally, by facsimile or by certified notarial mail.
If to SONERA to:
Xxxxxxxxxxxxxx 00
Xxxxxxxx
Xxxxxxx
Fax: 00 000 00 00 00 000
Attn: Ms. Pirjo Kekalainen-Xxxxxxxx
If to SONERA HOLDING to:
Rivium Quadrant 58
(NL-2909 LC) Xxxxxxx aan den Ijssel
The Netherlands
Fax: 00 000 00 00 00 000
Attn: Ms. Pirjo Kekalainen-Xxxxxxxx
If to ACS to:
ACS, Actividades de Cosntruccion y Servicios, S.A.
Xxxx. xx Xxx XXX, 000
00000 Xxxxxx
Xxxxx
Fax: 00-00-000 92 22
Attn: Xx. Xxxxx Xxxxxx Altozano
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If to ACSTMSL to:
ACS, Telefonia Movil, S.A.
Xxxx. Xxx XXX, 000
00000 Xxxxxx
Xxxxx
Fax: 00-00-000 92 22
Attn: Xx. Xxxxx Xxxxxx Altozano
Or at such other address as the Parties may specify by written notice
to the other. Any notice which is delivered in the manner provided
herein shall be deemed to have been duly given to the Party to whom it
is directed upon actual receipt at such address (evidenced, in the case
of facsimile, by the receipt of the correct answer back).
22 CONFIDENTIALITY.
The contents of this Agreement shall not be disclosed to any third
party without the previous consent of the Parties to this Agreement
except as may be required by law or by obligations pursuant to any
listing agreement with, or the regulations imposed by, any securities
exchange.
23 COSTS AND EXPENSES.
Except as otherwise provided in this Agreement, each of the Parties
hereto shall pay all costs and expenses incurred by such Party or on
its behalf in connection with the negotiation, preparation, execution
and performance of this Agreement and the transactions contemplated
hereby, including, without limitation, fees and expenses of accountants
and legal counsel.
24 COUNTERPARTS.
This Agreement may be executed in four or more counterparts each of
which shall be deemed as an original, but all the counterparts shall
together constitute one and the same instrument.
25 ENTIRE AGREEMENT.
This Agreement and the Exhibits attached hereto constitute the whole
agreement between the Parties on the subject matter hereof and
supersedes any prior agreement or understandings, whether oral or
written, relating thereto, and this Agreement shall not be modified
unless in writing and signed by the Parties hereto.
26 INVALIDITY.
14
If any term or provision in this Agreement shall be held to be illegal
or unenforceable, in whole or in part, such term or provision or part
shall to the extent be deemed not to form part of this Agreement but
the enforceability of the remainder shall continue in full force and
effect.
27 ASSIGNMENT.
This Agreement may not be assigned without the approval of the other
Parties provided, however, that a Party may assign its rights under
this Agreement to any of its affiliates.
28 GOVERNING LAW AND SUBMISSION TO JURISDICTION.
This Agreement and the documents to be entered into pursuant to it
shall be governed by and construed in accordance with Spanish law and
the Parties hereto irrevocably agree that all disputes and claims
arising from or relating to this Agreement, including failure to
comply, its termination or nullification, shall be finally settled by
the International Chamber of Commerce and according to its Rules, and
the Parties agree to voluntarily comply (in Spanish, "estar y pasar")
with the arbitration award as soon as they have been duly notified
thereof. The arbitration proceedings shall be held in the city of
Geneva. The arbitration proceedings shall be conducted in English.
As an expression of their consent the Parties sign below:
SONERA COPORATION ACS, ACTIVIDADES DE
CONSTRUCCION Y SERVICIOS, S.A.
By: By:
----------------------------- --------------------------
Ms. Pirjo Kekalainen-Xxxxxxxx Xx. Xxxxx Xxxxxx Altozano
SONERA HOLDING B.V. ACS, TELEFONIA MOVIL, S.A.
By: By:
----------------------------- --------------------------
Ms. Pirjo Kekalainen-Xxxxxxxx Xx. Xxxxx Xxxxxx Altozano
15
This exhibit represents a "fair and accurate" English translation of the
Spanish-language exhibit to this agreement within the meaning of Rule 306 under
S-T under the Securities Act of 1933.
/s/ Xxxxx Xxxxxxxx
------------------
Xxxxx Xxxxxxxx
General Councel
Sonera Corporation
EXHIBIT A
BY-LAWS
TITLE I - GENERAL PROVISIONS
ARTICLE 1. NAME AND GOVERNING REGULATIONS. The name of the Company will be
"SONERA-ACS, TELEFONIA MOVIL, S.L." and will be governed by the following
by-laws, the Limited Liability Companies Law and all other applicable legal
regulations.
ARTICLE 2. PURPOSE. The purpose of the Company is the holding of stock or the
holding of share participation in the companies dedicated to the mobile
telephone business.
If there is a requirement by law to obtain either an administrative
license for this activity, registration in the public registrar, or any other
requisite, the Company will not be able to start the specific activity until
such legal requirement has been fulfilled.
All activities for which the law establishes special requisites and
are not fulfilled by the Company are expressly excluded.
ARTICLE 3. DURATION. The duration of the Company will be indefinite and will
begin on the date of execution of the articles of incorporation of the
Company.
ARTICLE 4. DOMICILE. The Company will be domiciled in Madrid, at Xxxxxxx xx
Xxx XXX Xx. 000.
Corresponds to the Administration of the Company the duty to create,
eliminate or translate branch offices or agencies, both in the national
territory as well as internationally, according to the applicable valid
legislation.
The sole approval of the Company's administration will suffice to
transfer the corporate domicile among the same municipal territory. For
transferring the domicile out of the municipal territory the approval of the
General Partners Board is required.
TITLE II CAPITAL AND SHARE PARTICIPATION
ARTICLE 5. CAPITAL. The capital stock of the Company is set in the amount of
[( )] EUROS, fully paid, and divided in [( )] share participations of [( )] EURO
nominal value each, numerated from one (1) to [( )], both inclusive, which
shall not be represented by means of titles or account annotations nor be
denominated shares.
ARTICLE 6. REGISTER BOOK. The Company will have a register book for partners, in
which all voluntary and involuntary, original and subsequent, transfers of the
Company's share participations will be recorded, as well as any encumbrances on
them. On each annotation the identity and domicile of the holder of such
participation will be indicated as well as the encumbrances established. All
partners are authorized to review this book which is the responsibility of the
administration to manage and care. The partners and the holders of such
encumbrances and rights over the share participations will only have the right
to obtain certificates of the share participations or encumbrances registered in
their name.
The personal information of the partners can be modified without
causing effects on the Company.
ARTICLE 7. TRANSFER OF PARTICIPATIONS
I. VOLUNTARY TRANSFER INTER VIVOS
1. The transfer of share participations by the partners is authorized, in
favor of their spouse, the ascendants and descendants of the partner or the
companies that belong to the same group (art. 42, 1 Commercial Code) from the
transferor.
2. For all other remaining situations, the partner that intends to transfer
share participations must inform the administration of the Company in writing,
which in turn will notify such intention to the partners in a term of seven (7)
days. The partners can decide to purchase during the seven days after being
notified; if various partners opt to enter into this purchase, the
participations will be distributed pro-rata according to their existing share
participation in the Company.
If no partner decides to exercise this right of first refusal, the
Company, through its administration, can present during the following 15 days
one or more third parties interested in acquiring the share participations
offered. If such term expires and the offering partner has not received by means
of a notarized communication the acceptance to his offer, he will be free to
transfer such participations under the same terms initially offered and during
the next two months after expiration of the last term indicated. The purchase
price or consideration that the transferring partner must receive in the event
of donation or transfer under a different title than that of a sale, will be the
one that the parties agree, and in case they do not reach an agreement, will be
that determined by a certified technician selected by the parties, by means of
review and update of the last balance sheet approved.
II. INVOLUNTARY TRANSFER
In case of auction or transfer of share participations as a consequence of
any legal proceeding, the partners or in defect the Company, will be allowed to
substitute themselves for the auctioneer or the creditor, while the auction is
not yet in force, according to article 31 of the L.S.R.L; if the Company is the
subrogated party it shall amortize the participations acquired in the form and
under the terms provided in article 40 of the cited law.
2
III. MORTIS CAUSA TRANSFER
In the event of a mortis causa transfer of share participation, if the
heir or beneficiary entitled to them where not the spouse or descendants of the
deceased, the remaining partners will be allowed to acquire them during a term
of thirty (30) days from the communication to the Company of such hereditary
acquisition, paying to the holders the amount agreed or in case of disagreement
the real value at the day of death, this is the one established by the auditor
according to article 32 of the law.
IV. GENERAL PROVISIONS
1. If share participations are issued with accessory obligations, the special
rules for this kind of participations shall be applied.
2. The rules transcribed here will also apply, although with the necessary
adjustments and under the terms established in article 75 of the law, to the
transmissions of preferential rights in case of the creation of new share
participations.
3. The transfer of share participations will be formalized according to
the law; their acquisition under any title shall be notified in writing to
the Company for its registration in the partners' registrar book. Without
fulfillment of this requirement the partner will not be able to exercise the
rights to which he is entitled to in the Company.
4. The transfer of share participations that do not follow this rules will
have no effect whatsoever with respect to the Company.
5. The Company shall not acquire its own share participations with the
exception of the events described on article 40 of the law.
ARTICLE 8. CO-OWNERSHIP. In case of co-ownership over the share participations
or the rights over them, the co-owners must notify the Company their designated
representative for the exercise of their rights; the co-owners will remain
jointly and severally liable with respect to their obligations before the
Company.
ARTICLE 9. RIGHT OF ENJOYMENT AND LIEN. In the event of right of enjoyment or
lien over the share participations, the right to vote will correspond to the
title-holder of the share participations.
TITLE III SOCIAL STRUCTURE
Section 1.
ARTICLE 10. BODIES. The Company will be governed by the General Partner Board
while the administration and representation will be held by the Administrative
Body designated by the Board.
ARTICLE 11. MAJORITIES. The partners will, represented by the majority, govern
the operations of the Company.
3
All partners, including the dissidents and the absent, will remain
subject to the agreement of the Board, bearing in mind the right of
partnership separation which will remain valid whenever applicable.
Majority will occur when a number of partners representing 55% of the
capital stock vote in favor of the agreement, with the exception of the events
mentioned in the following paragraph and the applicable legislation.
Notwithstanding the above, in order to increase or decrease the capital
stock of the Company, extend, merge, transform, break-up or liquidate the
Company, waive the first refusal right for cases of increase in the capital
stock, partner exclusion, waiver of non-compete prohibitions for the
administrators, by-laws' modifications and in any other instances as required by
law, a vote representing at least 80% of the capital stock will be required.
A majority of valid votes representing at least a third of the capital
stock of the Company will suffice to determine the enforcement of a
responsibility action against the administrators of the Company.
ARTICLE 12. NOTICE OF MEETING. A majority shall be formed necessarily for a
General Board Meeting, notified for such purpose by the Administration body (or
liquidation body as applicable).
The notice of meeting for the Board will be done by certified mail to all
the partners at their registered domiciles in the registrar book. Between the
delivery of the last notice and the date provided for the Board's meeting there
shall be a term of at least (15) days, with the exception of merger or corporate
break-ups where the term should be of at least one month and in those instances
where the law determines otherwise. The notice will mention the name of the
Company, the date, time and place of the meeting, the person sending such
notice, as well as the topics to be discussed in detail as well as any
additional required issues to be mentioned according to the law. If the place of
the meeting is not mentioned, it shall be understood that the place of the
meeting will be the Company's corporate domicile. For the partners who reside
outside Spain, the notice of the meeting must be delivered to their domicile in
Spain which they must have registered in the registrar book.
The administration body is under the obligation to call the General Board
meeting during the first six (6) months of each exercise period in order to
guarantee the review of the Company's management, the approval of the semester's
balances and decide with respect to the distribution of revenues; if such task
is not done, any partner is entitled to request the General Board meeting to be
called by the First Instance Judge of the Company's corporate domicile.
The General Board will also be called by the administration whenever it
considers it necessary or convenient, and in any case when the partners
representing at least five (5) percent of the capital stock demand it; in this
case the General Board meeting shall be called to be held during the month
following the date it was called by notarial notice, and if it is not called it
can also be requested to be called by the First Instance Judge of the Company's
corporate domicile.
4
ARTICLE 13. UNIVERSAL BOARD. Notwithstanding the above, the Board will be
validly conformed to deal with any matter, without the requirement of previous
notice, whenever the total capital stock of the Company is represented and the
attendees accept unanimously the meeting's celebration and the points to be
discussed in the meeting. The Universal Board can meet anywhere in the national
or international territory.
ARTICLE 14. RIGHT OF ATTENDANCE. Every partner is entitled to attend the General
Board meeting. Partners can be represented by other partners, their spouses,
ascendants, descendants or person holding a power of attorney, in publicly
executed form, to administer all the partner's patrimony in the national
territory. If such representation is not in publicly executed form, it shall be
specific for each Board meeting and it shall always be in writing.
ARTICLE 15. The members of the Administration Council, if any, will act as
President and Secretary of the General Board Meeting, and if not the partners
designated at the beginning of the session by the attending partners.
Deliberations will be led by the President and each issue will be voted upon
separately.
The agreements among the partners shall be contained in minutes that must
include necessarily the list of attendees and must be approved by the Board at
the end of the session, or during the following 15 days, by the President of the
General Board and to intervening partners, one representing the majority and the
other one representing the minority.
Section 2. Administrative Body
ARTICLE 16. The Company will be administered and represented by an
Administration Council of five members all of which can be partners or not, as
well as natural or legal persons.
It is expressly stated the prohibition that incompatible persons will ever
occupy any positions in the Company according to the valid State dispositions.
ARTICLE 17. The Administration Council shall meet, at the President's request or
his replacement, whenever the social interest requests it or any of its members;
the notice for the meeting shall be in written form (letter, telegram or fax) to
all the counselors; it shall be understood as validly constituted when at least
four of its members attend the meeting, being any of the counselors authorized
to grant another counselor its representation in such meeting; the deliberations
will be held separately for each issue and will be moderated by the President;
in order to adopt any resolutions which require a separate vote for each issue,
the vote of at least four of the counselors is required unless determined
otherwise by applicable law.
If not elected by the Board, the Council can elect its own President and
Secretary without the requirement of being a member of the council, and to one
or various delegated counselors among the Council members. The discussions and
resolutions of the Council will be included in minutes which shall be signed by
the President and Secretary or by their replacements. The certifications of the
resolutions will be issued by the individuals designated to do so according to
article 109 of R.R.M.
5
The formalization in public document can be done by the persons mentioned
in article 108 of the mentioned regulation and also by any member of the
Council, if any, with a valid position, without any express delegation.
ARTICLE 18. The meetings of the Administrative Council will be called twenty
four (24) hours in advance, but if the person calling the meeting considers the
topics to be discussed urgent, such notice can be of only six (6) hours.
ARTICLE 19. DURATION. The members of the Council will remain in their duties for
an indefinite period of time, but can be replaced at any time even if their
replacement is not contained as an issue to be discussed in the meetings.
ARTICLE 20. REPRESENTATION. The Administrative Council will have the
representation of the Company both for judicial and any other instances,
according to the guidelines established in article 63 of the Limited Liability
Companies Law.
ARTICLE 21. RETRIBUTION. The position of Administrator is gratuitous.
However, if any of the Administrators renders to the Company services for
any professional work or any other kind of work, the consideration paid by the
Company will be with respect to such services only according to the ordinary
mercantile and labor existing legislation.
ARTICLE 22. NON-COMPETITION. The Administrators shall not, directly
or indirectly, dedicate to any activity analogous or complimentary to
that of the Company's purpose unless expressly authorized to do so by
the General Board.
ARTICLE 23. MINUTES BOOK. The Company will keep a book or books with the minutes
containing, at least, all the agreements entered into by the bodies of the
Company, with mention of the relative information related to the notice for the
meetings and the establishment of the various bodies, a summary of the topics
discussed, the interventions from which certification has been requested, the
adopted agreements and the voting results.
Any partner or individuals that attended a General Board meeting in
representation of the absent partners can obtain at any time certification of
the agreements and the minutes of the General Board meetings.
ARTICLE 24. FINANCIAL TERM. The annual close of business for purposes
of determining the Fiscal Exercise of the Company will be December 31
of each year.
ARTICLE 25. ANNUAL BALANCES. During a maximum term of three (3) months starting
from the close of each yearly financial term, the Administrative Council shall
formulated a balance with the gains and losses, and the proposal for the
distribution of revenues.
From the moment of the call for the General Board's meeting to be held
before June 30 of each year and to which they must be submitted for approval,
any partner can obtain
6
gratuitously from the Company this documents and the report from the
auditors; in the Board's meeting call this right will be reminded. The
partners who represent at least five (5) percent of the Company's capital
stock can also review, with an accounting expert, the Company's accounting in
the corporate domicile.
ARTICLE 26. DISTRIBUTION OF REVENUES. The Board will decide the distribution of
revenues with strict observance of the legal dispositions with respect to
reserves, previsions and amortizations. The liquid benefits will be distributed
among the partners proportionally according to their participation in the
capital stock of the Company.
TITLE V- DISSOLUTION AND LIQUIDATION
ARTICLE 27. DISSOLUTION. The Company will dissolve by any of the causes
enumerated in the law, and once agreed upon, the liquidation period will be
opened, procedure that will be held by the Administrative Body if the General
Board does not designate other liquidator.
ARTICLE 28. INVENTORY AND INITIAL BALANCE. The initial liquidators will prepare
an inventory and a balance of the Company with reference to the date established
for dissolution of the Company, during a term no longer than 3 months from the
opening of the liquidation process.
ARTICLE 29. FINAL BALANCE. Once all liquidatory operations are finalized, the
liquidators will submit for the General Board's approval a final balance, a
report from such operations and a distribution proposal among the partners of
the remaining assets.
The liquidation quota shall be proportional to each partner's
participation in the capital stock of the Company and can not by satisfied
without the previous payment to the creditors of their credits or a deposit for
an amount equal to such credits if the creditors are not available, in a
financial entity from the municipal corporate domicile.
ARTICLE 30. The final balance of the liquidation and relation of the partners,
where their identity and the value of their corresponding liquidation quota must
be determined, shall be incorporated to the public deed of the Company's
extinction.
7
This exhibit represents a "fair and accurate" English translation of the
Spanish-language exhibit to this agreement within the meaning of Rule 306 under
S-T under the Securities Act of 1933.
/s/ Xxxxx Xxxxxxxx
------------------
Xxxxx Xxxxxxxx
General Councel
Sonera Corporation
EXHIBIT B
BY-LAWS
TITLE I - GENERAL PROVISIONS
ARTICLE 1. NAME AND GOVERNING REGULATIONS. The name of the Company will be
"ACS-SONERA, TELEFONIA MOVIL, S.L." and will be governed by the following
by-laws, the Limited Liability Companies Law and all other applicable legal
regulations.
ARTICLE 2. PURPOSE. The purpose of the Company is the holding of stock or the
holding of share participation in the companies dedicated to the mobile
telephone business.
If there is a requirement by law to obtain either an administrative
license for this activity, registration in the public registrar, or any other
requisite, the Company will not be able to start the specific activity until
such legal requirement has been fulfilled.
All activities for which the law establishes special requisites and are
not fulfilled by the Company are expressly excluded.
ARTICLE 3. DURATION. The duration of the Company will be indefinite and will
begin on the date of execution of the articles of incorporation of the
Company.
ARTICLE 4. DOMICILE. The Company will be domiciled in Madrid, at Xxxxxxx xx
Xxx XXX Xx. 000.
Corresponds to the Administration of the Company the duty to create,
eliminate or translate branch offices or agencies, both in the national
territory as well as internationally, according to the applicable valid
legislation.
The sole approval of the Company's administration will suffice to
transfer the corporate domicile among the same municipal territory. For
transferring the domicile out of the municipal territory the approval of the
General Partners Board is required.
TITLE II CAPITAL AND SHARE PARTICIPATION
ARTICLE 5. CAPITAL. The capital stock of the Company is set in the amount of
[ ( )] EUROS, fully paid, and divided in [ ( )] share participations of [ ( )]
EURO nominal value each, numerated from one (1) to [ ( )], both inclusive,
which shall not be represented by means of titles or account annotations nor
be denominated shares.
ARTICLE 6. REGISTER BOOK. The Company will have a register book for partners,
in which all voluntary and involuntary, original and subsequent, transfers of
the Company's share participations will be recorded, as well as any
encumbrances on them. On each annotation the identity and domicile of the
holder of such participation will be indicated as well as the encumbrances
established. All partners are authorized to review this book which is the
responsibility of the administration to manage and care. The partners and the
holders of such encumbrances and rights over the share participations will
only have the right to obtain certificates of the share participations or
encumbrances registered in their name.
The personal information of the partners can be modified without
causing effects on the Company.
ARTICLE 7. TRANSFER OF PARTICIPATIONS
I. VOLUNTARY TRANSFER INTER VIVOS
1. The transfer of share participations by the partners is authorized, in
favor of their spouse, the ascendants and descendants of the partner or the
companies that belong to the same group (art. 42, 1 Commercial Code) from the
transferor.
2. For all other remaining situations, the partner that intends to transfer
share participations must inform the administration of the Company in
writing, which in turn will notify such intention to the partners in a term
of seven (7) days. The partners can decide to purchase during the seven days
after being notified; if various partners opt to enter into this purchase,
the participations will be distributed pro-rata according to their existing
share participation in the Company.
If no partner decides to exercise this right of first refusal, the
Company, through its administration, can present during the following 15 days
one or more third parties interested in acquiring the share participations
offered. If such term expires and the offering partner has not received by
means of a notarized communication the acceptance to his offer, he will be
free to transfer such participations under the same terms initially offered
and during the next two months after expiration of the last term indicated.
The purchase price or consideration that the transferring partner must
receive in the event of donation or transfer under a different title than
that of a sale, will be the one that the parties agree, and in case they do
not reach an agreement, will be that determined by a certified technician
selected by the parties, by means of review and update of the last balance
sheet approved.
II. INVOLUNTARY TRANSFER
In case of auction or transfer of share participations as a consequence
of any legal proceeding, the partners or in defect the Company, will be
allowed to substitute themselves for the auctioneer or the creditor, while
the auction is not yet in force, according to article 31 of the L.S.R.L; if
the Company is the subrogated party it shall amortize the participations
acquired in the form and under the terms provided in article 40 of the cited
law.
2
III. MORTIS CAUSA TRANSFER
In the event of a mortis causa transfer of share participation, if the
heir or beneficiary entitled to them where not the spouse or descendants of
the deceased, the remaining partners will be allowed to acquire them during a
term of thirty (30) days from the communication to the Company of such
hereditary acquisition, paying to the holders the amount agreed or in case of
disagreement the real value at the day of death, this is the one established
by the auditor according to article 32 of the law.
IV. GENERAL PROVISIONS
1. If share participations are issued with accessory obligations, the special
rules for this kind of participations shall be applied.
2. The rules transcribed here will also apply, although with the necessary
adjustments and under the terms established in article 75 of the law, to the
transmissions of preferential rights in case of the creation of new share
participations.
3. The transfer of share participations will be formalized according to the
law; their acquisition under any title shall be notified in writing to the
Company for its registration in the partners' registrar book. Without
fulfillment of this requirement the partner will not be able to exercise the
rights to which he is entitled to in the Company.
4. The transfer of share participations that do not follow this rules will
have no effect whatsoever with respect to the Company.
5. The Company shall not acquire its own share participations with the
exception of the events described on article 40 of the law.
ARTICLE 8. CO-OWNERSHIP. In case of co-ownership over the share
participations or the rights over them, the co-owners must notify the Company
their designated representative for the exercise of their rights; the
co-owners will remain jointly and severally liable with respect to their
obligations before the Company.
ARTICLE 9. RIGHT OF ENJOYMENT AND LIEN. In the event of right of enjoyment or
lien over the share participations, the right to vote will correspond to the
title-holder of the share participations.
TITLE III SOCIAL STRUCTURE
Section 1.
ARTICLE 10. BODIES. The Company will be governed by the General Partner Board
while the administration and representation will be held by the Administrative
Body designated by the Board.
ARTICLE 11. MAJORITIES. The partners will, represented by the majority, will
govern the operations of the Company.
3
All partners, including the dissidents and the absent, will remain
subject to the agreement of the Board, bearing in mind the right of
partnership separation which will remain valid whenever applicable.
Majority will occur when a number of partners representing 60% of the
capital stock vote in favor of the agreement, with the exception of the
events mentioned in the following paragraph and the applicable legislation.
Notwithstanding the above, in order to increase or decrease the capital
stock of the Company, extend, merge, transform, break-up or liquidate the
Company, waive the first refusal right for cases of increase in the capital
stock, partner exclusion, waiver of non-compete prohibitions for the
administrators, by-laws' modifications and in any other instances as required
by law, a vote representing at least 75% of the capital stock will be
required.
A majority of valid votes representing at least a third of the capital
stock of the Company will suffice to determine the enforcement of a
responsibility action against the administrators of the Company.
ARTICLE 12. NOTICE OF MEETING. A majority shall be formed necessarily for a
General Board Meeting, notified for such purpose by the Administration body
(or liquidation body as applicable).
The notice of meeting for the Board will be done by certified mail to
all the partners at their registered domiciles in the registrar book. Between
the delivery of the last notice and the date provided for the Board's meeting
there shall be a term of at least (15) days, with the exception of merger or
corporate break-ups where the term should be of at least one month and in
those instances where the law determines otherwise. The notice will mention
the name of the Company, the date, time and place of the meeting, the person
sending such notice, as well as the topics to be discussed in detail as well
as any additional required issues to be mentioned according to the law. If
the place of the meeting is not mentioned, it shall be understood that the
place of the meeting will be the Company's corporate domicile. For the
partners who reside outside Spain, the notice of the meeting must be
delivered to their domicile in Spain which they must have registered in the
registrar book.
The administration body is under the obligation to call the General
Board meeting during the first six (6) months of each exercise period in
order to guarantee the review of the Company's management, the approval of
the semester's balances and decide with respect to the distribution of
revenues; if such task is not done, any partner is entitled to request the
General Board meeting to be called by the First Instance Judge of the
Company's corporate domicile.
The General Board will also be called by the administration whenever it
considers it necessary or convenient, and in any case when the partners
representing at least five (5) percent of the capital stock demand it; in
this case the General Board meeting shall be called to be held during the
month following the date it was called by notarial notice, and if it is not
called it can also be requested to be called by the First Instance Judge of
the Company's corporate domicile.
4
ARTICLE 13. UNIVERSAL BOARD. Notwithstanding the above, the Board will be
validly conformed to deal with any matter, without the requirement of
previous notice, whenever the total capital stock of the Company is
represented and the attendees accept unanimously the meeting's celebration
and the points to be discussed in the meeting. The Universal Board can meet
anywhere in the national or international territory.
ARTICLE 14. RIGHT OF ATTENDANCE. Every partner is entitled to attend the
General Board meeting. Partners can be represented by other partners, their
spouses, ascendants, descendants or person holding a power of attorney, in
publicly executed form, to administer all the partner's patrimony in the
national territory. If such representation is not in publicly executed form,
it shall be specific for each Board meeting and it shall always be in writing.
ARTICLE 15. The members of the Administration Council, if any, will act as
President and Secretary of the General Board Meeting, and if not the partners
designated at the beginning of the session by the attending partners.
Deliberations will be led by the President and each issue will be voted upon
separately.
The agreements among the partners shall be contained in minutes that
must include necessarily the list of attendees and must be approved by the
Board at the end of the session, or during the following 15 days, by the
President of the General Board and to intervening partners, one representing
the majority and the other one representing the minority.
Section 2.- Administrative Body
ARTICLE 16. The Company will be administered and represented by an
Administration Council of five members all of which can be partners or not,
as well as natural or legal persons.
It is expressly stated the prohibition that incompatible persons will
ever occupy any positions in the Company according to the valid State
dispositions.
ARTICLE 17. The Administration Council shall meet, at the President's request
or his replacement, whenever the social interest requests it or any of its
members; the notice for the meeting shall be in written form (letter,
telegram or fax) to all the counselors; it shall be understood as validly
constituted when at least four of its members attend the meeting, being any
of the counselors authorized to grant another counselor its representation in
such meeting; the deliberations will be held separately for each issue and
will be moderated by the President; in order to adopt any resolutions which
require a separate vote for each issue, the vote of at least four of the
counselors is required unless determined otherwise by applicable law.
If not elected by the Board, the Council can elect its own President
and Secretary without the requirement of being a member of the council, and
to one or various delegated counselors among the Council members. There will
be no permanent delegation of functions in favor of one or various
Counselors. The discussions and resolutions of the Council will be included
in minutes which shall be signed by the President and Secretary or by their
replacements. The certifications of the resolutions will be issued by the
individuals designated to do so according to article 109 of R.R.M.
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The formalization in public document can be done by the persons
mentioned in article 108 of the mentioned regulation and also by any member
of the Council, if any, with a valid position, without any express delegation.
ARTICLE 18. The meetings of the Administrative Council will be called twenty
four (24) hours in advance, but if the person calling the meeting considers
the topics to be discussed urgent, such notice can be of only six (6) hours.
ARTICLE 19. DURATION. The members of the Council will remain in their duties
for an indefinite period of time, but can be replaced at any time even if
there replacement is not contained as an issue to be discussed in the
meetings.
ARTICLE 20. REPRESENTATION. The Administrative Council will have the
representation of the Company both for judicial and any other instances,
according to the guidelines established in article 63 of the Limited
Liability Companies Law.
ARTICLE 21. RETRIBUTION. The position of Administrator is gratuitous.
However, if any of the Administrators renders to the Company services
for any professional work or any other kind of work, the consideration paid
by the Company will be with respect to such services only according to the
ordinary mercantile and labor existing legislation.
ARTICLE 22. NON-COMPETITION. The Administrators shall not, directly or
indirectly, dedicate to any activity analogous or complimentary to that of
the Company's purpose unless expressly authorized to do so by the General
Board.
ARTICLE 23. MINUTES BOOK. The Company will keep a book or books with the
minutes containing, at least, all the agreements entered into by the bodies
of the Company, with mention of the relative information related to the
notice for the meetings and the establishment of the various bodies, a
summary of the topics discussed, the interventions from which certification
has been requested, the adopted agreements and the voting results.
Any partner or individuals that attended a General Board meeting in
representation of the absent partners can obtain at any time certification of
the agreements and the minutes of the General Board meetings.
ARTICLE 24. FINANCIAL TERM. The annual close of business for purposes of
determining the Fiscal Exercise of the Company will be December 31 of each
year.
ARTICLE 25. ANNUAL BALANCES. During a maximum term of three (3) months
starting from the close of each yearly financial term, the Administrative
Council shall formulated a balance with the gains and losses, and the
proposal for the distribution of revenues.
From the moment of the call for the General Board's meeting to be held
before June 30 of each year and to which they must be submitted for approval,
any partner can obtain
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gratuitously from the Company this documents and the report from the
auditors; in the Board's meeting call this right will be reminded. The
partners who represent at least five (5) percent of the Company's capital
stock can also review, with an accounting expert, the Company's accounting in
the corporate domicile.
ARTICLE 26. DISTRIBUTION OF REVENUES. The Board will decide the distribution
of revenues with strict observance of the legal dispositions with respect to
reserves, previsions and amortizations. The liquid benefits will be
distributed among the partners proportionally according to their
participation in the capital stock of the Company.
TITLE V- DISSOLUTION AND LIQUIDATION
ARTICLE 27. DISSOLUTION. The Company will dissolve by any of the causes
enumerated in the law, and once agreed upon, the liquidation period will be
opened, procedure that will be held by the Administrative Body if the General
Board does not designate other liquidator.
ARTICLE 28. INVENTORY AND INITIAL BALANCE. The initial liquidators will
prepare an inventory and a balance of the Company with reference to the date
established for dissolution of the Company, during a term no longer than 3
months from the opening of the liquidation process.
ARTICLE 29. FINAL BALANCE. Once all liquidatory operations are finalized, the
liquidators will submit for the General Board's approval a final balance, a
report from such operations and a distribution proposal among the partners of
the remaining assets.
The liquidation quota shall be proportional to each partner's
participation in the capital stock of the Company and can not by satisfied
without the previous payment to the creditors of their credits or a deposit
for an amount equal to such credits if the creditors are not available, in a
financial entity from the municipal corporate domicile.
ARTICLE 30. The final balance of the liquidation and relation of the
partners, where their identity and the value of their corresponding
liquidation quota must be determined, shall be incorporated to the public
deed of the Company's extinction.
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