Exhibit 10.2
ROMANIA GSM
COOPERATION AGREEMENT
THIS ROMANIA GSM COOPERATION AGREEMENT (this "Agreement") is entered into as of
November 29, 1996 by and between TELESYSTEM INTERNATIONAL WIRELESS CORPORATION
N.V. ("TIWC"), a company incorporated under the laws of The Netherlands, having
its registered office at Xxxxxxxxx 000, 00-00 XX Xxxxxxxxx, Xxx Xxxxxxxxxxx, and
AIRTOUCH EUROPE B.V. ("ATE"), a company incorporated under the laws of The
Netherlands, having its registered office at Xxxxxxxxxx 00-00, 0000 XX Xxx
Xxxxx, Xxx Xxxxxxxxxxx. (TIWC and ATE are herein referred to individually as a
"Party" and collectively as the "Parties".)
RECITALS
WHEREAS the Romanian Ministry of Communications (the "Ministry") has indicated
its intention to award licences for GSM cellular mobile telephony services in
Romania ("GSM Licence");
WHEREAS the Parties desire to pursue a GSM license together with other partners
through an unincorporated association which will be incorporated as a Romanian
joint stock company following an announcement by the Romanian government that it
will receive a GSM license (for the purposes of this Agreement, the
unincorporated association and joint stock company shall be both referred to as
"MobiFon", as the case may be):
a) to form a core group (the "TIWC-ATE Core Group") to establish the
principles for cooperation in pursuit of the GSM License;
b) to form a larger group (the "Consortium") that would include Romanian
Partners (as defined below) and possibly an Additional Foreign Partner (as
defined below); and
c) to develop a GSM License application ("GSM Application") to win the GSM
License that would be filed by the Consortium;
WHEREAS, on July 21, 1996, the Parties reached a preliminary understanding of
the basic terms of their cooperation, which are contained in a non-binding term
sheet ("TIWC-ATE Term Sheet") that serves as the basis for this Agreement;
WHEREAS the Parties also agreed that the terms of the TIWC-ATE Term Sheet (other
than the funding terms provided to ATE by TIWC) has served as the basis for the
preparation of additional term sheets to be offered to potential Romanian
Partners and the Additional Foreign Partner, if any;
WHEREAS the Parties have entered into an agreement (the "Contract of
Association" with a number of other partners which sets forth the terms and
conditions pursuant to which they will operate MobiFon;
WHEREAS the Parties agree to be bound by the terms and conditions of this
Agreement;
NOW, THEREFORE, the Parties hereby acknowledge agreement on the following:
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TERMS AND CONDITIONS
ARTICLE I -- THE PARTIES
1. TIWC-ATE CORE GROUP AND CONSORTIUM
The Parties agree to coordinate and govern their activities hereunder through
the TIWC-ATE Core Group. The purposes of the TIWC-ATE Core Group are as follows:
a) to seek potential Romanian Partners and an Additional Foreign Partner, if
any, that will significantly increase the chances of winning the GSM
Licence:
b) to form a Consortium with such additional partners;
c) to prepare and file a winning GSM Application with the Ministry;
d) to establish a Romanian joint stock company ("MobiFon") prior to the award
of the GSM license; and
e) to manage the operation of MobiFon.
2. EQUITY INTERESTS
a) The initial ownership of MobiFon as of the filing date of the GSM
Application by MobiFon shall be as follows:
ATE 10% share ownership
TIWC 39.9% share ownership
Romanian Partners 50.1% share ownership
b) The foregoing 50.1% equity interest in MobiFon may be owned directly or
indirectly by one or more Romanian entities unrelated to TIWC or ATE (the
"Romanian Partners"). ATE acknowledges that certain Romanian entities may
hold shares of MobiFon on behalf of TIWC for its own purposes or to be
transferred to third parties. ATE and TIWC agree that, should it be in the
best interests of MobiFon, EBRO may be added as a shareholder. In that
event, ATE and TIWC agree that all MobiFon shareholders should be diluted
on a pro rata basis up to a level sufficient to provide EBRO with a 5%
ownership interest. If it is necessary to provide equity participation to
EBRO in excess of this amount, the source of the equity shall require the
mutual agreement of ATE and TIWC.
3. CAPITALIZATION
a) MobiFon Shares
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The Initial Shares held by ATE shall have a liquidation preference (as
described below) which will lapse upon the earlier of (i) the exercise by
ATE of the Option as set forth in Article III, or (ii) at the option of
ATE, or (iii) the repayment of the Loan Amount.
b) Liquidation Preference
In the event of any liquidation, dissolution or winding up of MobiFon,
either voluntary or involuntary, ATE shall be entitled to receive, prior
and in preference to any distribution of any of the assets of MobiFon to
the other MobiFon shareholders, an amount per share equal to the sum of:
(i) the subscription price for each outstanding share of its Initial Shares
(the "Initial Share Issue Price") and (ii) any declared but unpaid
dividends on such shares.
TIWC covenants, in the event that the payment to ATE pursuant to the above
liquidation preference cannot or will not be made for any reason by the Romanian
partners, that it will make separate payment to ATE in amount sufficient to put
ATE in the same position as if such payment had been made. Any such payment made
by TIWC shall be used to offset the Loan Amount.
4. ROMANIAN PARTNERS
a) The Romanian and non-Romanian Partners shall be selected by TIWC following
consultation with and approval by ATE. ATE may only veto a Romanian Partner
on the basis of grounds concerning its business ethics or character.
b) It is agreed that TIWC may participate in funding the investments of the
Romanian Partners and may take an indirect interest in one or more Romanian
Partners.
c) Each Romanian Partner shall, as a precondition to share ownership, agree to
the terms of the Contract of Association.
d) ATE shall be kept fully informed at all times of any discussions or
negotiations with potential Romanian Partners and shall have the
opportunity to participate in discussion and negotiations with them.
e) All agreements and understandings (drafts and final versions, verbal and
written) between the Romanian Partners and TIWC shall be promptly disclosed
in full to ATE.
ARTICLE II -- ATE SUBSCRIPTION AND LOAN
5. SUBSCRIPTION
ATE shall be issued Shares representing 10% of the outstanding total equity of
MobiFon as of the date of the formation of the MobiFon joint stock company (the
"Initial Shares").
6. LOAN
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a) During the three (3) year-period commencing from the date of the
announcement of the awarding of the GSM Licence (the "Award"), TIWC shall
loan to ATE (or an affiliate of ATE) funds equivalent to the total capital
calls applicable to the Initial Shares (the "Loan").
b) Shareholder Guarantees - At the election of ATE, TIWC shall also provide
ATE's portion of the shareholder guarantees applicable to the Initial
Shares.
c) Rate - The Loan shall be denominated in U.S. dollars and shall bear
interest at the rate of eleven percent (11%) per annum compounded
quarterly (the "Rate").
d) Loan Amount - The Loan and the interest payable thereon and the amount of
shareholder guarantee fees, if any, shall be collectively referred to
herein as the "Loan Amount".
e) Right of First Refusal - ATE shall not exercise any rights of first refusal
which would have as effect to increase its percentage ownership in MobiFon
to greater than 10% of the stock of MobiFon, without having first paid the
entire Loan Amount to TIWC.
7. REPAYMENT OF THE LOAN AMOUNT
a) Except for the Put (as defined below), the Loan Amount shall be repayable
at ATE's discretion on either the first (1st), second (2nd) or third (3rd)
anniversary of the Award, but no later than the third (3rd) anniversary of
the Award.
b) In the event the Agreement is terminated under Section 24, then ATE shall
have no obligation to repay the Loan Amount.
8. FORM OF REPAYMENT - PUT
a) The Loan Amount may be repaid, at the election of ATE (or its affiliate, as
the case may be), as follows:
(i) Cash denominated in U.S. dollars; or
(ii) Shares in MobiFon representing the Loan Amount, based on the Fair
Market Value (the "FMV"). Such FMV shall be determined as set forth in
Attachment A attached hereto;
provided, however, that ATE (or its affiliate, as the case may be) may at
any time repay the Loan Amount by tendering all of its initial Shares to
TIWC (the "Put"). In this case, the Put shall not be exercised by ATE for a
period of nine (9) months commencing from the Award except in the case of
an event which may be reasonably deemed to affect the reputation of ATE.
b) In the event that ATE exercises the Put, it shall have no further
obligations to MobiFon, TIWC, or the MobiFon shareholders with respect to
the Initial Shares.
c) Any shareholder guarantees attributable to the Initial Shares shall be
assumed on a pro rata basis by ATE at the time of the repayment of the Loan
Amount.
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d) ATE shall have no liability to meet any capital calls nor provide
shareholder guarantees in favour of MobiFon relating to the Initial Shares
unless and until the Loan Amount is repaid.
e) Upon repayment of the Loan Amount, ATE shall be obligated under the terms
of the Shareholders Agreement to fund or provide capital calls or other
obligations and shall be responsible for loan guarantees with respect to
ATE's remaining Shares in MobiFon.
9. SECURITY
Until the full Loan Amount is repaid, all dividends and distributions (including
distribution on shareholders' loans) accruing on the Initial Shares are assigned
to TIWC in repayment of the Loan and ATE's Initial Shares shall be pledged in
favour of TIWC.
10. PREMIUM
a) Upon repayment of the Loan Amount as set forth in Section 9(a), ATE (or its
affiliate, as the case may be) shall also pay to TIWC, in addition to the
payment of the Loan Amount, an additional amount equal to the following
percentage multiplied by the then FMV of the Initial Shares less the Loan
Amount, based on the following internal rate of return table ("IRR") (the
"Premium"):
IRR
---
less than 11% 0%
11% to 20.9% 20%
21% to 30.9% 30%
31% to 40.9% 40%
41% and above 50%
Such amount shall be repaid in U.S. currency.
b) For the purposes hereof, IRR shall be calculated taking into consideration
the timing of all capital contributions, in equity and shareholders' loans,
translated into U.S. dollars at the historical U.S. exchange rate, the FMV
of the capital contributions at the date of the payment of the Premium, and
taking into account the accrued interest paid at the time of repayment of
the Loan.
c) ATE shall have the right to exercise at the time of the payment of the
Premium set forth above to sell to TIWC the Initial Shares for an amount
equal to the excess of 75% of their FMV over the sum of the Loan Amount and
the Premium. The purchase price shall be payable ninety (90) days following
notice by ATE of its intent to exercise this right. In such event,
repayment of the Loan Amount shall be extended by ninety (90) days.
ARTICLE III -- ATE OPTION
11. OPTION
a) The Parties covenant that the MobiFon governance documents shall provide
that ATE shall have an option (the "Option"), exercisable within ten (10)
days after the repayment of the Loan Xxxxxx,
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to acquire from MobiFon ten percent (10%) of the total equity of MobiFon on
a fully diluted basis in the form of MobiFon Shares, for a consideration
equal to the cumulative contributed equity capital of said shares made to
MobiFon and the assumption of a pro rata share of the shareholder
guarantees and the issuance of a pro rata share of the shareholder loans,
if any, at the date of the exercise of the Option.
b) In addition to the consideration set forth above, upon the closing of the
payment for the Option shares, ATE shall also pay to MobiFon an amount
equal to ATE's pro rata share after giving effect to the exercise of the
Option (i.e. based on its full interest in MobiFon) of such bid expenses,
plus interest calculated at the Rate, to the extent that expenses
associated with the preparation and submission of the GSM Application were
not otherwise included in such capital calls.
ARTICLE IV -- PRE-FILING PERIOD
12. STEERING COMMITTEE
a) Between the date hereof and the date that the MobiFon joint stock company
is formed, TIWC and ATE shall conduct all matters relating to the GSM
Application through the authority of a steering committee (the "Steering
Committee") and a project team (the "Project Team").
b) The Steering Committee will be made of one representative of TIWC and ATE
(together with a representative of certain mutually agreeable Romanian
Partners), with the Chairman of the Committee being a representative of
TIWC.
c) Decisions of the Steering Committee, including the filing of the GSM
Application, shall be by unanimous vote.
d) The principal functions of the Steering Committee will be:
(i) to negotiate with other MobiFon shareholders the terms of a
Shareholders' Agreement to be entered into by all equity participants
in MobiFon;
(ii) to supervise the activities of the Project Team;
(iii) to oversee the expenditure of funds in connection with the
preparation and submission of the GSM Application; and
(iv) to decide on all important matters related to the GSM Application
process, including matters relating to budget and funding.
e) Matters that require the approval of the Steering Committee shall include,
but not be limited to, the following:
(i) marketing strategy and business planning for the preparation of the
Initial Business Plan;
(ii) designing of the wireless voice and data cellular telecommunication
systems, including the interconnection with the public telephone
network and between each GSM License area and operations site;
(iii) financial planning and structuring for the Initial Business Plan;
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(iv) any proposal to, or agreement with, governmental authorities which
are inconsistent with, previously unaddressed, or reflect changes in,
concepts, policies, and principles previously agreed to among the
Shareholders or in relevant rules and regulations currently in
effect;
(v) analyzing the advisability of and making the final decision
concerning the admission of additional partners to the Consortium and
establishing their future voting and non-equity interests; and
(vi) coordinating the negotiation of the terms, conditions and other items
of the License contracts.
13. PROJECT TEAM
a) The principal functions of the Project Team will be to examine, discuss and
prepare all aspects of the GSM Application in accordance with the decisions
taken by the Steering Committee.
b) The leader of the Project Team shall be appointed by TIWC.
c) ATE shall be entitled to designate any number of its representatives to be
members of the Project Team.
d) Decisions of the Project Team shall be by unanimous vote.
14. GSM APPLICATION PREPARATION
The GSM Application and the related bid documents shall be prepared under the
supervision and final decision of the Steering Committee, utilizing the
resources of each of the Parties.
15. EXCLUSIVITY
a) The Parties and their Affiliates (as defined below) shall not, either
individually or through participation in or support of another consortium
or any other third party, compete with the purpose hereof by taking part in
the preparation or the financing of another GSM Application for Romania
(which restriction shall extend until one year following the Award), or by
competing with the business of the joint venture.
b) The Parties and their Affiliates shall not join or participate in any other
consortium or joint venture which owns or operates a GSM business in
Romania for a period of one (1) year following the liquidation of MobiFon.
c) The Parties acknowledge that the breach or threatened breach of this
exclusive commitment may result in irreparable harm to the Consortium
and/or the other Party. Accordingly, in such circumstances, the aggrieved
Party shall be entitled to injunctive or other similar relief restraining
the threatened or continued breach of this commitment.
d) Notwithstanding the provisions of this Section, each of the Parties is free
to pursue in Romania, individually or jointly, any telecommunications
project other than mobile communication services projects, which mobile
project shall be subject to a right of first refusal from one Party to the
other. Furthermore, ATE and its Affiliates are free to pursue its
Globalstar mobile satellite services
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venture and TIWC and its Affiliates are free to pursue its Odyssey or
Orbcomm mobile satellite services venture.
e) Should any Party or Affiliate wish to join in a consortium within the one
(1) year period, it shall offer such opportunity to the other Party on a
pro-rata basis based on MobiFon ownership and on equivalent terms and
conditions which are offered to such shareholder. Other than the preceding
sentence, any new opportunity shall not be subject to the terms and
conditions of this Agreement.
f) As used herein, the term "Affiliate" in relation to any Shareholder means
any individual or corporate entity which directly or indirectly controls
such party, or is controlled by such party, or is under common control of
such party.
g) The Parties covenant that the MobiFon governance documents will contain
provisions consistent with Section 16(a) through (f) above.
16. COST-SHARING
The Steering Committee shall establish and approve a project budget ("Project
Budget") to plan and account for all of the expenses envisioned as necessary to
submit a competitive GSM Application and to prepare for the awarding of the GSM
License. In conjunction with such project budget, the Parties agree that:
a) all GSM Application expenses, as well as those expenditures of the
Shareholders that are otherwise approved by the Steering Committee, shall
be borne by MobiFon, and shall be shared on a pro rata basis by the MobiFon
shareholders;
b) if the Consortium decides to hire a financial, legal or strategic advisor,
such costs shall likewise be shared on a pro rata basis by the MobiFon
shareholders;
c) the project budget shall be pre-funded on a quarterly basis; and
d) individual Party expenses related to Steering Committee costs and
Consortium formation shall not be regarded as GSM Application expenses.
ARTICLE V -- MOBIFON
17. BUSINESS PLANS
The scope and definition of "Business Plan" and "Major Deviation" from a
Business Plan shall be as described in Attachment B.
18. GUARANTEES BY PARTIES
The Parties covenant that MobiFon shall aim to get non-recourse project
financing. However, in case such financing is not feasible, the Parties covenant
that the holders of Initial Shares shall provide for
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guarantees on a pro rata basis, together with the other shareholders, in
proportion to their equity interests for funding contained in the Business
Plans.
19. TRANSFER OF SHARES
a) Neither party may assign, sell, transfer, or otherwise dispose of (any such
transfer being referred to as a "transfer"), except in accordance with the
terms of this Article V.
b) Either Party may, without the consent of the other, transfer ownership of
its Shares to an affiliate which is at least 75% owned, provided such
affiliate becomes a party to this Agreement.
c) Until the Loan Amount is repaid, ATE may not transfer its shares, directly
or indirectly, without the consent of TIWC.
d) Any direct transfer of MobiFon shares by ATE or TIWC shall require the
buyer to become a party to this Agreement, with the buyer made subject to
the obligations of the transferring shareholder.
e) Notwithstanding Section I 9(b) above, any indirect transfer (through the
sale of any intermediate company which holds, directly or indirectly, the
MobiFon shares) shall be subject to the requirement that the seller remain
in control of the voting of the MobiFon shares held directly or indirectly
by the seller, unless the buyer becomes a party to this Agreement.
f) Until the third anniversary of the grant of the License to MobiFon,
(i) If ATE or TIWC wishes to transfer its shares in MobiFon
("Transferor") to a bona fide third party, the Transferor shall give
notice in writing ("the Notice") to the other (the "Non-transferring
Party") that it desires to transfer its shares (the "Offered
Shares"). The Notice shall contain: (a)) a full description as to the
identity of the proposed transferee; (b) the minimum terms and
conditions for the transfer and (c) an offer for the Non-transferring
Party to acquire the Offered Shares on the same terms and conditions
("the Offer").
(ii) If the Non-transferring Party wishes to accept all of the Offer, it
shall, at the latest, fifteen (15) days following receipt of the
Notice ("the Time Limit") notify the Transferor in writing to this
effect. The acceptance of the Offer must be made unconditionally.
(iii) If the Non-transferring Party has not accepted the Offer in full
within the Time Limit, the Transferor shall be free to transfer the
Offered Shares to the proposed transferee on the same terms and
conditions (at an equivalent or better price) as contained in the
Offer within 180 days counted from the expiry of the Time Limit.
g) After the third anniversary of the grant, of the License to MobiFon, any
transfer of shares by ATE or TIWC shall be subject to rights of first
refusal held by the non-transferring party, under the procedures as set
forth in Section 4.6 of the MobiFon Contract of Association dated November
22, 1996.
20. TECHNICAL ASSISTANCE AGREEMENTS
The MobiFon governance documents shall provide that TIWC and ATE shall each be
permitted to provide cellular network design and construction project management
services to MobiFon in
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accordance with a technical services agreement, on a basis which permits full
reimbursement of the service provider's fully loaded costs plus a premium to be
agreed to first by TIWC and ATE, and then by the MobiFon shareholders. The
Parties agree to consider all qualified applicants from TIWC and ATE to perform
the services under the services agreements with the objective of having a
reasonable balance in staffing by TIWC and ATE. The Parties agree to give a six
(6) month notice prior to terminating their respective services provided under
the technical services agreement. AirTouch shall be allowed to terminate its
services in the event that it has exercised its Put for the reason of an event
occurring which may be reasonably deemed to affect the reputation of ATE.
ARTICLE VI -- GOVERNANCE AND MANAGEMENT
The decisions made by MobiFon, either in the General Assembly, before the Board
of Administrators or by the management of the Company, pertaining to those
decisions set forth in Attachment C, shall require the approval of both TIWC and
ATE. Accordingly, the Parties covenant that they will use their best efforts to
achieve agreement on those issues. Failing agreement, the Parties will cause the
matter to be defeated, either by defeating the matter before the General
Assembly, before the Board of Administrators, or by causing senior management of
the Company to defeat the matter.
21. CHIEF EXECUTIVE OFFICER AND CHIEF TECHNICAL OFFICER
a) The Chief Executive Officer of MobiFon (or its equivalent under Romanian
law) shall be a nominee of TIWC, while the Chief Technology Officer ("CTO")
shall be a nominee of ATE.
b) The CTO shall be responsible for customer care and billing systems, GSM and
transmission networks and information technology in general.
c) The continuing appointment of the respective nominees to these positions
shall be subject to a periodic review and a performance evaluation every 12
months.
d) However, the Chief Executive Officer may not be removed without the
approval of TIWC, and the CTO may not be removed without the approval of
ATE.
e) If either such officer is duly removed, the party originally appointing
such officer shall be entitled to exclusively nominate his or her
replacement.
ARTICLE VII -- GENERAL PROVISIONS
22. TERM
This Agreement shall remain in effect until the occurrence of one or more of the
following events:
a) the GSM Licence is awarded to a party other than MobiFon;
b) the GSM License is not awarded to any bidder, for any reason whatsoever,
within a period of (6) months following the submission deadline for the GSM
Application; or
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c) the Agreement is terminated by the written mutual agreement of all of the
Parties.
23. AMENDMENT AND WAIVER
Any provision of this Agreement may be amended and the observance of any
provision of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively) only with the written
consent of all of the Parties.
24. PUBLICITY
No press release or other public disclosure by any of the Parties regarding this
Agreement and the transactions contemplated thereby shall be authorized without
the prior consent of the Parties.
25. ASSIGNMENT
The rights and obligations of the Parties under this Agreement shall not be
assigned or transferred without the prior written consent of the
non-transferring Party; provided, however, that transfers to affiliates shall be
permitted and shall not require the prior written consent of the
non-transferring Party.
26. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the laws of
the State of California, U.S.A., and shall benefit and be binding upon the
Parties hereto and their respective successors and assigns.
27. DISPUTE RESOLUTION
The parties shall make a good faith effort to resolve amicably any dispute,
controversy or difference between the parties which arises from or in connection
with this Agreement.
28. ARBITRATION
If such attempt is unsuccessful, then such dispute, controversy or difference
shall be finally resolved under the Rules of UNCITRAL ("Rules") by one or more
arbitrators in accordance with the Rules. Such proceedings shall be held in the
United Kingdom, and shall be conducted in the English language, based upon the
English version of this Agreement. The arbitral award made by the arbitrators
shall be rendered in English. The arbitral award shall be final and binding upon
the parties, and such award may be enforced in any court of competent
jurisdiction. The arbitrators shall have the ability to grant all relief
available. The costs of arbitration, including the cost of legal counsel, shall
be awarded in the discretion of the arbitrators.
29. LANGUAGE
This Agreement shall be prepared and executed in English. As to any
inconsistencies between the two versions, the English language version shall
prevail.
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30. COMPLIANCE WITH LAWS
a) The Parties agree that they and their respective Agents (as defined below)
shall comply with the U.S. Foreign Corrupt Practices Act. The Parties also
agree that the future joint venture documentation (or Shareholders'
Agreement, as the case may be) to be negotiated shall contain a provision
stating that MobiFon and its shareholders shall comply with the U.S.
Foreign Corrupt Practices Act. As used herein, the term "Agent" shall mean
any individual or entity legally appointed or hired by such party.
b) The Parties shall not intentionally take any action that would violate.
c) Following the receipt and acceptance of the GSM License by MobiFon, the
MobiFon shareholders shall not intentionally take any action that would
cause the Romanian government to revoke MobiFon's GSM License.
31. NOTICE
Unless otherwise provided, any notice required or permitted under this Agreement
shall be given in writing and shall be deemed to be effectively given (a) upon
personal delivery to the Party to be notified, (b) upon deposit with the
official governmental postal service, return receipt requested, and addressed to
the Party to be notified at the address indicated for such Party on the first
page of this Agreement, and (c) upon transmission via facsimile to the Party to
be notified and addressed to the facsimile numbers listed below:
TIWC Xxxxx Xxxxxxxx (000) 000-0000
with a copy to: Legal Department (000) 000-0000
ATE Xxxxx Xxxxxxx (000) 000-0000
with a copy to: Legal Department (000) 000-0000
32. AFFILIATE DEFINED
The term "affiliate" as used herein shall mean any person or entity controlling,
controlled by, or under common control with, a Party.
33. ENTIRE AGREEMENT
This Agreement (and any attachments hereto) constitute the entire understanding
and agreement among the Parties and supersede any and all prior or
contemporaneous, oral or written, representations, communications,
understandings and agreements among the Parties with respect to the subject
matter hereof including but not limited to the Term Sheet dated July 21, 1996,
to the extent that such representations, communications, understandings and
agreements are inconsistent with or contradictory to the provisions hereof.
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34. SEVERABILITY
If any provision hereof is found invalid, illegal or unenforceable pursuant to
any executive, legislative, judicial or other public decree or decision, such
invalidity, illegality, or unenforceability shall not affect the validity or
enforceability of any remaining portion of this Agreement, and such remaining
portion shall remain in full force and effect as if the invalid, illegal or
unenforceable portion was never a part of this Agreement when it was executed.
If the invalid, illegal or unenforceable term or provision can be made valid,
legal or enforceable by reasonable modification, then such invalid, illegal or
unenforceable term or provision shall be modified to make it valid, legal or
enforceable. If the severance or modification of any such part of this Agreement
materially affects any other rights and obligations of the Parties, the Parties
shall use all reasonable efforts to replace any invalid, illegal or
unenforceable provision with a valid, legal and enforceable one which leads to
the same legal and/or economic result.
35. NO AGENCY
No Party shall be considered an agent of any other Party, and no Party shall
have the right, power or authority to create any obligation or duty, express or
implied, on behalf of any other Party. The Company shall not be considered an
agent of any Party, and MobiFon shall not have any right, power or authority to
create any obligation or duty, express or implied, on behalf of any Party.
36. FORCE MAJEURE
The failure or delay of any Party to perform any obligation under this Agreement
solely by reason of force majeure shall not be deemed to be a breach of this
Agreement so long as the Party so prevented from complying with this Agreement
shall not have contributed to such force majeure, and shall continue to take all
actions within its power to comply as fully as possible with the terms of this
Agreement. In the event of any such default or breach, performance of the
obligations shall be deferred until the force majeure ceases. Except where the
nature of the event shall prevent it from doing so, the Party suffering from
such force majeure shall notify the other Parties in writing immediately upon
the occurrence of such force majeure and shall in every instance use all
reasonable efforts to remove or remedy such cause with all reasonable dispatch.
37. HEADINGS AND CAPTIONS
The section headings and captions contained in this Agreement are for purposes
of reference and convenience only and shall not in any way affect the meaning or
interpretation of this Agreement.
38. RELATIONSHIP
Other than the obligations contained herein, no legal entity, or relationship of
any kind shall be deemed to arise herefrom, between the Parties themselves, or
any other individuals, organization or companies. The Parties agree that this
Agreement is entered into for the sole purpose of obtaining GSM Licenses and
providing wireless telecommunication services under such GSM Licenses, and all
Parties are free to pursue other business opportunities in accordance with
Section 4 ("Exclusivity") without violating this Agreement, and are joint
venturers for the purposes of this Agreement only.
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39. COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.
40. ORIGINALS
This Agreement shall be executed in two (2) duplicate originals, one for each
Party.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed and do
hereby warrant and represent that their respective signatory whose signature
appear below has been and is on the date of this Agreement duly authorized by
all necessary corporate action to execute and deliver this Agreement.
TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V. (TIWC)
/s/ Xxxx XxXxxxxx
-----------------------------------------------------
Name: Xxxx XxXxxxxx
Title: Managing Director
AIRTOUCH EUROPE B.V. (ATE)
/s/ Xxxxxxx Xxxxx
-----------------------------------------------------
Name: Xxxxxxx Xxxxx
Title: Managing Director of
AirTouch Netherlands B.V.,
a Managing Director of
AirTouch (Europe) B.V.
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ATTACHMENT A
"FAIR MARKET VALUE" DEFINED
The term "Fair Market Value" shall mean the cash price in U.S. dollars
determined by mutual agreement of TIWC and ATE (the "Parties"), or if no such
agreement is reached within ten (10) days of the relevant date, the appraised
price ("Appraised Price") determined as follows:
(i) Within ten (10) days after the relevant date, the Parties shall jointly
designate one firm of recognized international standing familiar with
appraisal techniques applicable to assets of the type being evaluated to
serve as an appraiser ("Appraiser").
(ii) The Appraiser shall be directed to determine the cash price at which a
willing seller would sell and a willing buyer would buy the asset (each
being apprised of all relevant facts and neither acting under compulsion)
in an arm's length negotiated transaction with an unaffiliated third party
without time constraints and taking into account:
a) the real value of all tangible and intangible assets including
goodwill; all financial and other obligations whether contingent or
actual; the present and future earnings;
b) all financial and other obligations whether contingent or actual;
c) the present and future earnings;
d) the tax treatment which the Parties would encounter upon such
transfer;
e) a commercially reasonable risk-adjusted rate of return;
f) the rights and restrictions which apply to the asset; and
g) such other factors as are generally taken into account when such
assets are valued for sale.
(iii) The Parties will cooperate in causing the Romanian joint venture company
to supply information reasonably necessary to conduct such appraisal.
(iv) In the event that the Parties are unable within ten (10) days after the
relevant date to select a single Appraiser that is satisfactory to both
Parties, then each Party shall be entitled to designate one Appraiser.
Each Appraiser shall perform the Appraisal in accordance with subparagraph
(ii) above. If the appraisal providing the higher value is not more than
110% of the appraisal providing the lower value, the Appraised Price shall
be the average of the two values. Otherwise, a mutually acceptable third
Appraiser shall be selected within ten (10) days.
(v) In the event that a third Appraiser is selected, it shall determine the
Appraised Price of the relevant asset within thirty (30) days. The
Appraised Price shall then be (i) the lower of the first two appraisals,
if the third Appraiser value is less than the lower value; (ii) the
average of the third Appraiser value and the other value that is closer to
the third Appraiser value if it lies between the first two appraised
values; and (iii) the higher of the first two appraisals, if the third
Appraiser Value is higher than the higher value.
(vi) In the event that the Parties designate a single Appraiser, the fees shall
be borne equally by each of ATE and TIWC. In the event that the Parties
each designate an Appraiser, each Party shall bear
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the fees of the Appraiser designated by such Party. In the event that a
third Appraiser is designated, then the fees of such third Appraiser shall
be borne equally by each of ATE and TIWC.
(vii) The appraisal process shall be completed within sixty (60) calendar days
after its commencement.
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ATTACHMENT B
BUSINESS PLANS
The approved Initial Business Plan and each subsequent approved Business Plan
(i.e., a rolling plan for ongoing operations) are referred to herein as
"Business Plan" and shall contain the following:
Each Business Plan will address the following timeframes:
o Long range strategic planning
o Five (5) year operational plan
o First year detailed Business Plan
Each Business Plan will contain:
o A detailed budget by month for the first year
o Financial forecasts (profit and loss statement, balance sheet, cash flow
statements by month for first year, by year for the four subsequent years)
o Financial structure and funding requirements for MobiFon and the GSM
Licence, including the methods, sources, timing and terms of debt and
equity financing and any related guarantees, whether internal or external,
public or private, including the issuance and/or registration of any newly
issued securities of MobiFon in the primary market; and working capital and
cash management plans.
o Major business strategies and plans, including:
- Marketing and sales plans (including designation and compensation of
distribution channels, market analysis, product planning, pricing and
communication programs)
- Customer care, billing, technical assistance, and customer operations
plans
- Technical system design, construction and network operation plans
- System capital expenditures and proposed expansions or improvement
plans
- Management information systems plans
- Departmental budgets including capital expenditures and projected
personnel requirements
o Annual key performance milestones for the business for the following year
The Business Plans will be prepared by management each year on a rolling basis
and the Business Plan cycle will require each year.
o Submission of the Business Plan by the President of the joint venture
company to the Shareholders by the third week in September for approval by
the third week in October.
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A "Major Deviation" from a Business Plan shall mean:
i) any decision which contradicts or which represents a new decision
relating to the strategies and plans documented in such Business Plan;
ii) any material addition or modification (or series of additions or
modifications) to any individual Business Plan line-item; and
iii) a change in the total capital requirements for any year of a Business
Plan exceeding US$10 million.
iv) "Revisions of the Capital Structure" as that term is defined in the
Contract of Association in section 7.3.1a of said Contract of
Association.
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ATTACHMENT C
SUPERMAJORITY VOTING ISSUES
a) Filing of the GSM application (or any related document) with the Romanian
government;
b) approval of any of the terms and conditions contained in the GSM License
contract not contained in the GSM License application;
c) amendment of the GSM License contract or conduct of negotiations as to the
terms of or with a view to amending such contract;
d) any dealings with the Ministry on any substantive matters regarding the GSM
License or the business of the joint venture company;
e) any plan to participate in any invitations to apply or bid with other
companies, consortia or partnerships regarding the GSM Licence or the
Business of the joint venture company;
f) approval of any Business Plan (including modifications, amendments, and
Major Deviations thereto);
g) all major financial and technical decisions not previously specifically
approved in the Business Plan;
h) admission of any additional shareholders (unless such admission is
specifically provided for in this Agreement);
i) declaration of dividends;
j) the issuance of securities of the joint venture company;
k) any reduction in the equity capital of the joint venture company;
l) the admission of the joint venture company to any stock exchange and the
listing and quotation thereon of the Shares (or any other securities of the
joint venture company);
m) transfer of any Shares or any other securities of the joint venture company
(other than those transfers specifically permitted by this Agreement);
n) amalgamation, merger, winding up, or dissolution or voluntary liquidation
of the joint venture company;
o) any change in the corporate status of the joint venture company;
p) any change in the purpose or Business of the joint venture company;
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q) entry into new lines of business or the pursuit of additional GSM Licences
in other areas;
r) the setting up or acquisition of subsidiary companies or otherwise
investing in any other entity or business or the entry into a partnership,
joint venture, profit sharing or cooperation agreement with any person or
the disposition or disinvestment of any shares or interest therein or the
modification or termination thereof;
s) the opening, transfer or closing of branches, agencies, offices, and
warehouses;
t) any alteration of or amendment to the Articles of Association and Bylaws,
including any change in the corporate name of the joint venture company
and/or the convening of any extraordinary general meeting of the joint
venture company for any such purpose;
u) external financing and shareholder debt financing (whether or not requiring
guarantees or securities);
v) acquisition or disposal of shares or assets in excess of 5% of the Company
assets in other companies or formation of a new company;
w) any agreement or series of related agreements under which the joint venture
company undertakes liabilities or grants guarantees that exceed, in the
aggregate, the lesser of 5% of its total assets or the equivalent in
Romanian currency to US$15,000,000.00;
x) any proposal to (a) create, assume or incur, or become liable in respect of
any indebtedness or (b) make loans or provide guarantees, indemnities or
other securities or otherwise extend or pledge credit to others;
y) approval or amendment of Related Party Transaction, or any series of
Related Party Transactions, not previously approved in the Business Plan of
an amount exceeding in the aggregate the equivalent in Romanian currency to
US$250,000.00 in any year;
z) any transaction (or series of related transactions) for the disposal,
transfer, sale, mortgage or creation of liens of any nature on assets of
the joint venture company that exceed, in the aggregate, the lesser of 5%
of its total assets or the equivalent in Romanian currency to
US$15,000,000.00;
aa) the creation of any fixed or floating charge, mortgage, pledge, lien (other
than a lien arising by operation of law) or any other encumbrance over the
whole or part of the undertaking or assets of the joint venture company
except as required by the terms of the GSM License;
bb) the institution or settlement of any arbitration, litigation or similar
proceedings relating to any claim totaling more than US$5 million;
cc) any proposal regarding contracts and licenses for the acquisition or
transfer of or sub-sale or sub-license of technology, trademarks, patents,
copyrights or other intellectual property rights;
dd) any change in the total number of Directors on the Board (as well as the
matters that are subject to its approval);
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ee) change in the form of calls for the meetings of the Board of Directors, and
voting requirements for the decisions and the powers of the Directors of
the Board of Directors;
ff) any proposal to pay any Director's fee or other remuneration to a Director;
gg) appointment and removal of any officers of the joint venture company, or
change to any of their duties and responsibilities (subject to the terms
agreed to in the Shareholders' Agreement);
hh) the appointment and replacement of the joint venture company's independent
auditors, who shall be chosen from among the six largest international
independent auditing firms;
ii) the revaluation of any assets for accounting purposes; and
jj) addition, deletion, or amendment to the list of matters described above.
