Exhibit 2
EXECUTION COPY
TELESYSTEM INTERNATIONAL WIRELESS INC.
as Company
and
THE INVESTORS IDENTIFIED WITHIN
as Investors
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INVESTOR RIGHTS AGREEMENT
November ______, 2001
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INVESTOR RIGHTS AGREEMENT
Investor Rights Agreement dated November ____, 2001 made by and among
the Investors identified in Schedule "A" (each an "INVESTOR" and collectively,
the "INVESTORS") and Telesystem International Wireless Inc. (the "COMPANY").
RECITALS:
(1) Pursuant to the transactions contemplated by a master and purchase
agreement dated November ____, 2001 (the "MASTER AGREEMENT") among the
Investors and the Company, the Parties have entered into various
agreements and arrangements in connection with the recapitalization of
the debt and equity of the Company (the "RECAPITALIZATION").
(2) To facilitate the future viability of the Company following the
Recapitalization, the Investors have deemed it advisable to set forth
their respective rights and obligations in respect of certain matters.
(3) Pursuant to the covenant of the Company specified in Section
8.2(i)(iii) of the Master Agreement, the Company is required to enter
into this Agreement with each of the Investors.
(4) By agreeing to become a Party to this Agreement, each Investor has
agreed that it will cause all voting Shares (as defined herein)
beneficially owned or controlled by it to be voted in accordance with
the terms set out below.
In consideration of the foregoing and the mutual representations,
warranties, agreements and covenants contained herein and other good and
valuable consideration (the receipt and sufficiency of which are hereby
acknowledged), the Parties agree as follows:
ARTICLE 1
INTERPRETATION
SECTION 1.1 DEFINITIONS.
Unless otherwise provided for herein, capitalized terms used and not
defined in this Agreement shall have the meanings ascribed to such terms in the
Master Agreement. In addition, in this Agreement, the following terms shall be
given the following meanings:
"AFFILIATE" means, save as follows, any Person directly or indirectly
controlling, controlled by or under common control with any other
Person. For the purpose of this definition, "CONTROL" means the power
to direct (by contract or otherwise) the operations, policies or
management of a Person.
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Notwithstanding any provision of this Agreement to the contrary, X.X.
Xxxxxx Xxxxx & Co. and its subsidiaries and affiliates (other than XX
Xxxxxx and the subsidiaries of XX Xxxxxx) (all of whom are collectively
referred to as the "OTHER XX XXXXXX ENTITIES") shall be deemed not to
be Affiliates of the JPMorgan Investors and under no circumstances
whatsoever shall the JPMorgan Investors be responsible or liable
hereunder for the acts or omissions of the Other JPMorgan Entities.
Notwithstanding any other provision of this Agreement to the contrary,
Caisse de depot et placement du Quebec and its subsidiaries and
affiliates (other than CDPQ and the subsidiaries of CDPQ) (all of whom
are collectively referred to as the "OTHER CAISSE ENTITIES") shall be
deemed not to be Affiliates of CDPQ for the purposes hereof, and under
no circumstances whatsoever shall CDPQ be responsible or liable
hereunder for the acts or omissions of the Other Caisse Entities.
"AGREEMENT" means this Investor Rights Agreement and all schedules and
instruments in amendment or confirmation of it; "HEREOF", "HERETO" and
"HEREUNDER" and similar expressions mean and refer to this Agreement
and not to any particular Article, Section, Subsection or other
subdivision; "ARTICLE", "SECTION", "SUBSECTION" or other subdivision of
this Agreement followed by a number refers to the specified Article,
Section, Subsection or other subdivision of this Agreement.
"BOARD" means the board of directors of the Company.
"BUSINESS PLAN" means the business plan of the Company and its
Subsidiaries (on a consolidated basis) to be prepared by senior
management of the Company, which business plan (and any amendments,
revisions or other modifications thereto) shall be submitted to the
Board for prior approval in accordance with Section 3.2 from time to
time; provided, however, that the new Business Plan to be implemented
as of the Effective Date shall be consistent with the Strategic
Direction, shall be formalized in writing and shall be submitted,
promptly following the Effective Date, to the Board for approval in
accordance with Section 3.2(2). Pending such approval, the Strategic
Direction shall govern the management and operations of the Company and
its Subsidiaries.
"CBCA" means the Canada Business Corporations Act, as in effect on the
date hereof.
"CDPQ" means Capital Communications CDPQ Inc.
"COMPANY" has the meaning specified in the preamble hereof.
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"CO-SALE GROUP" has the meaning specified in Section 6.1(1).
"CO-SALE OFFEREE" has the meaning specified in Section 6.1(1).
"CO-SALE OFFEROR" has the meaning specified in Section 6.1(1).
"CO-SALE NOTICE" has the meaning specified in Section 6.1(1).
"EFFECTIVE DATE" means the later of (i) the Units Issuer Bid Closing
and (ii) the date of conversion of the Convertible Debentures pursuant
to the CD Indenture, as amended by the Supplemental CD Indenture, all
as more particularly described in the Master Agreement.
"INVESTORS" means, collectively, the Persons identified in Schedule
"A", together with their Affiliates, and "INVESTOR" means any one of
them.
"JPMORGAN INVESTORS" means those Persons listed in Schedule "A" and
identified as "JPMORGAN INVESTORS" and "JPMORGAN INVESTOR" means any
one of them.
"MASTER AGREEMENT" has the meaning specified in the recitals above.
"MINIMUM CONDITION 1" has the meaning specified in Section 3.2(1)(d).
"MINIMUM CONDITION 2" has the meaning specified in Section 3.2(1)(e).
"NOMINATING PARTY" has the meaning specified in Section 3.2(1)(b).
"NON-VOTING SHARES" means the non-voting participating preferred Shares
of the Company that may in certain circumstances be issued to JPMP, UFI
and CDPQ pursuant to the Master Agreement.
"OFFERED SHARES" has the meaning specified in Section 6.1(1).
"ORGANIZATIONAL DOCUMENTS" has the meaning specified in Section 5.1.
"PARTIES" means, collectively, each of the JPMorgan Investors, UFI,
CDPQ, Telesystem and the Company, and any other Person who may at any
time become a party to this Investor Rights Agreement pursuant to the
terms hereof, and "PARTY" means any one of them.
"PERMITTED TRANSFER" means (i) any pledge, hypothecation or other
encumbrance on any of the Shares of an Investor, provided such Person
or Persons in favour of whom such Shares have been so pledged,
hypothecated or otherwise encumbered signs a joinder to this Agreement
agreeing to become a party to, to be bound by, to comply with and to be
subject to the
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terms and conditions hereof, (ii) one or more sales by an Investor in
any given 12-month period, on The Toronto Stock Exchange and/or NASDAQ
and/or any other nationally recognized securities market on which the
Shares are traded, of not more than 5% of the issued and outstanding
Shares of the Company (based on the number of Shares issued and
outstanding at the commencement of such period) and only if such
transactions are otherwise exempt from the take-over bid rules under
applicable corporate and securities laws and regulations, (iii) any
Transfer of Shares between any Investor and its Subsidiaries or
Affiliates or to any other Investor or such Investor's Subsidiaries or
Affiliates, or (iv) any Transfer of Shares under a non-exempt take-over
bid under applicable corporate and securities laws and regulations.
"PRO RATA AMOUNT" means, as of any given date and with respect to any
Investor, the quotient obtained by dividing (i) the number of Shares
then held by such Investor, by (ii) the aggregate number of Shares then
held by all Investors, assuming in each case that, in the calculation
of such number of Shares, all securities held by Investors which by
their terms are convertible or exercisable into or exchangeable for
Shares, have been so converted, exercised or exchanged on such date.
"RECAPITALIZATION" has the meaning specified in the recitals above.
"REGULATORY PROBLEM" has the meaning specified in the Regulatory
Sideletter.
"REGULATORY SIDELETTER" has the meaning specified in Section 5.1.
"SHARES" has the meaning specified in Section 2.1, and more
particularly described in Article 2.
"STRATEGIC DIRECTION" means the maximization and realization of
shareholder value of the Company and its Subsidiaries (on a
consolidated basis) in the medium term and in a manner consistent with
the Business Plan, and in the event such value is realized, the
distribution of such value to all of the shareholders of the Company.
"SUBSIDIARY" has the meaning specified in the CBCA, as in effect on the
date hereof.
"TAG-ALONG NOTICE" has the meaning specified in Section 6.1(3).
"TELESYSTEM" means Telesystem Ltd.
"THIRD PARTY" means any Person that is not (i) the Company (ii) an
Investor or (iii) any of their respective Affiliates.
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"TRANSFER" means to sell, transfer, pledge, hypothecate, encumber,
assign or otherwise dispose of, either voluntarily or involuntarily and
with or without consideration.
"UFI" means U.F. Investments (Barbados) Ltd.
SCHEDULES
SCHEDULE "A" Investors
SCHEDULE 4.1(a) Shares
SCHEDULE 5.1 Regulatory Sideletter
ARTICLE 2
SHARES
SECTION 2.1 SHARES.
For purposes of this Agreement, "SHARES" includes any outstanding
equity securities of the Company (or of a successor or continuing corporation of
the Company) or of any corporation into whose shares such equity securities of
the Company (or of a successor or continuing corporation of the Company) may be
consolidated, subdivided, exchanged, converted, changed, reclassified or
redesignated provided, however, that except as specifically provided in the
definition of "PRO RATA AMOUNT", "Share" shall not include unexercised options,
warrants or convertible securities.
SECTION 2.2 APPLICATION OF AGREEMENT.
For purposes of this Agreement, all references to "SHARES" beneficially
owned by an Investor on the date hereof and set forth in Schedule 4.1(a), and
any Shares beneficially acquired, directly or indirectly, by any Investor, or
Shares over which any Investor has control, at any time and from time to time
hereafter until the expiry or other termination of this Agreement shall be
subject to the terms and conditions of this Agreement (including without
limitation, the representations and warranties contained in Article 4 hereof).
To the extent that a Person who is controlled by such Investor shall at any time
and from time to time beneficially acquire, directly or indirectly, any such
Shares, such Investor shall cause such controlled Person to agree to sign a
joinder hereto and to comply with the terms hereof, effective as of the date of
such acquisition.
SECTION 2.3 BENEFICIAL OWNERSHIP.
For purposes of this Agreement, all references to "SHARES" owned by any
Investor shall include all Shares owned legally or beneficially; all Shares over
which control is exercised; and all Shares owned or controlled by any Subsidiary
or other entity controlled by such Investor, in each case whether such interest
is held directly
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or indirectly, including without limitation subsequently acquired Shares
referred to in Section 2.2.
ARTICLE 3
VOTING OF SHARES AND RELATED MATTERS
SECTION 3.1 COMMENCEMENT AND DURATION.
(1) The rights and obligations of (i) each Investor that beneficially owns
Shares and (ii) the Company, pursuant to this Article 3 shall be
effective as of and from the Effective Date and shall continue to be
enforceable by or on behalf of (in the case of rights) and to be
binding upon and enforceable against (in the case of obligations) such
Investor and the Company:
(a) until this Agreement is terminated by mutual agreement of all
Investors bound by the Agreement at that time; or
(b) until only one Investor is bound by the Agreement; or
(c) until the Investors bound by the Agreement own, in aggregate,
less than one third (1/3) of the issued and outstanding Shares
(including Non-Voting Shares).
SECTION 3.2 VOTING OF SHARES.
During the term of this Agreement, each Investor and the Company agree
as follows:
(1) BOARD MATTERS
(a) SIZE OF BOARD OF DIRECTORS: On or prior to the
Effective Date, the Company shall cause a reduction
of the size of its Board to eight (8) members, shall
cause the appointment to the Board of any nominees of
the Investors or of the Board provided for under
Section 3.2(1)(b) who are not already members of the
Board, and shall prepare and cause to be executed
such documentation as is legally or otherwise
required to effect the foregoing. The Company shall
not increase or decrease the size of the Board,
without the prior written consent of each Investor,
which consent may be arbitrarily and/or unreasonably
withheld.
(b) ENTITLEMENT TO NOMINATE BOARD MEMBERS:
(i) Upon and after the Effective Date, (y) each
of the JPMorgan Investors, collectively and
(z) each of UFI,
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Telesystem and CDPQ, individually (each such
Persons or group of Persons a "NOMINATING
PARTY") shall, subject to the requirements
of Section 3.2(1)(c), Section 3.2(1)(h) and
Section 3.2(1)(i), have the right to
nominate candidates for appointment or
election to the Board as follows:
CDPQ 1 Board member
Telesystem 2 Board members
JPMorgan Investors 2 Board members
UFI 1 Board member;
(ii) Subject to (y) the requirements of the CBCA
and the rules of The Toronto Stock Exchange
and NASDAQ (or the NASD), as applicable, and
(z) Section 3.2(1)(b)(iii), the Board shall
have the right to nominate for election or
appointment to the Board any other
individual persons required to bring the
number of directors on the Board to eight
(8), provided, however, that such other
individual persons so nominated for election
or appointment by the Board shall at all
times consist of, to the extent practicable,
persons who (i) are independent of Company
management, the Investors and the Company,
and (ii) possess substantial industry or
other experience relevant or applicable to
the Strategic Direction; and
(iii) If at any time during the term of this
Agreement in connection with a transaction
or series of transactions approved by the
Board in accordance with Section 3.2(2) (and
in particular, Part (A) of Schedule 3.2), a
Third Party has been granted the right to
nominate an individual to the Board, the
Board shall exercise its rights in Section
3.2(1)(b)(ii)to appoint or nominate for
election to the Board the individual
nominated by such Third Party, provided such
Third Party executes a joinder to this
Agreement agreeing to be bound by the terms
and conditions hereof.
(c) MINIMUM CONDITIONS: Until this Agreement terminates
in accordance with Section 3.1, each Nominating Party
shall have the right to nominate:
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(i) one individual person for appointment or
election to the Board if and whenever and
for so long as such Nominating Party
satisfies Minimum Condition 1; and
(ii) one additional individual person for
appointment or election to the Board if and
whenever and for so long as such Nominating
Party satisfies Minimum Condition 2.
For greater certainty, the Parties acknowledge and
agree that the requirements of Section 3.2(1)(d)(i)
and Section 3.2(1)(d)(ii), and Section 3.2(1)(e)(i)
and Section 3.2(1)(e)(ii), respectively, are
disjunctive and not cumulative.
(d) MINIMUM CONDITION 1: For purposes of Section
3.2(1)(c)(i), Minimum Condition 1 will be satisfied
by a Nominating Party if and whenever and for so long
as it owns at least:
(i) 75% of the number of Shares (including
Non-Voting Shares) it acquired pursuant to
the Recapitalization (including shares
acquired after the Effective Date upon
conversion or exercise of securities, rights
or obligations received or imposed pursuant
to the Master Agreement) as adjusted
pursuant to Section 3.2(1)(f); or
(ii) (A) in the case of all Nominating Parties
other than Telesystem, 10% of the issued and
outstanding Shares (including Non-Voting
Shares) of the Company and (B) in the case
of Telesystem, 5% of the issued and
outstanding Shares (including Non-Voting
Shares) of the Company.
(e) MINIMUM CONDITION 2: For purposes of Section
3.2(1)(c)(ii), Minimum Condition 2 will be satisfied
by a Nominating Party if and whenever and for so long
as it owns at least:
(i) 75% of the number of Shares (including
Non-Voting Shares) it acquired pursuant to
the Recapitalization (including shares
acquired after the Effective Date upon
conversion or exercise of securities, rights
or obligations received or imposed pursuant
to the Master Agreement) as adjusted
pursuant to Section 3.2(1)(f), if that
number represented 20% or more of the issued
and outstanding Shares (including Non-Voting
Shares) of the Company
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on the Effective Date, as adjusted pursuant
to Section 3.2(1)(f); or
(ii) 20% of the issued and outstanding Shares
(including Non-Voting Shares) of the
Company.
(f) ADJUSTMENTS: The Parties acknowledge and agree that
the number of Shares (including Non-Voting Shares)
referred to in Section 3.2(1)(d)(i) and Section
3.2(1)(e)(i) shall be equitably adjusted as necessary
to reflect any consolidation, subdivision,
reclassification, capital reorganization of or other
change to the outstanding Shares (including
Non-Voting Shares), or any payment by the Company of
a stock dividend, in each case occurring after the
Effective Date. Such adjustment shall be effected by
the Company upon the consent of all of the Investors,
failing which it shall be decided by a nationally
recognized independent firm of chartered accountants
in Canada, whose decision shall be final and binding
upon the Parties.
(g) REQUIRED VOTING: Each Investor covenants and agrees
with the other Investors to vote all of its Shares in
favour of the nominees put forward for election by
each Nominating Party and the Board in accordance
with Section 3.2(1)(b) at each of the Company's duly
constituted shareholders' meetings at which members
of the Board are to be elected, and each Investor and
the Company shall use their respective best efforts
to cause any vacancy on the Board to be filled by a
nominee of the Nominating Party, or the Board, as the
case may be, entitled to fill that vacancy. For
greater certainty, nothing in this Agreement shall
require a Party to grant a proxy in favour of another
Party or to management of the Company.
(h) DIRECTOR QUALIFICATIONS: Only individuals qualified
to act as directors of the Company under applicable
law, except as to Canadian residency, shall be
nominated to the Board by any Nominating Party or the
Board. Unless otherwise agreed by the JPMorgan
Investors and UFI, each of CDPQ, Telesystem and the
Board shall put forward among their nominees such
number of resident Canadians as may be required to
satisfy the resident Canadian director requirements
under the CBCA.
(i) BOARD VACANCIES: In the event that there
shall be any vacancy on the Board resulting
from the resignation, death or incapacity
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of a director selected hereunder by a
Nominating Party or the Board, or if a
nominee of a Nominating Party or the Board
hereunder fails to stand for election or
re-election as director for whatever reason,
the Parties shall take whatever reasonable
action is within their control to appoint or
elect or cause to be appointed or elected to
the Board as soon as possible a successor or
a nominee, as the case may be, selected by
such Nominating Party or the Board, as the
case may be.
(2) MAJOR DECISIONS
All decisions of the Board, save as follows, shall be decided by a
majority of votes cast (or by such greater percentage of votes as may be
required by the CBCA) by the directors present and eligible to cast votes at a
duly constituted meeting of the Board. The taking of any of the decisions or
actions or the implementation of any of the matters listed or described in
Schedule 3.2 shall, in addition to any other approval required by law, require
the approval of (A) in the case of those items listed or described in part (A)
of Schedule 3.2, not less than two - thirds (2/3) of the votes cast by the
directors present and eligible to cast votes at a duly constituted meeting of
the Board, and (B) in the case of those items listed or described in part (B) of
Schedule 3.2, not less than three - quarters (3/4) of the votes cast by the
directors present and eligible to cast votes at a duly constituted meeting of
the Board.
For greater certainty, in respect of all references in this Section
3.2(2) and Schedule 3.2 to minimum numbers of votes to be cast at Board meetings
which would, with respect to any such vote, result in a fraction of a vote, such
fraction shall be deemed to be rounded up to the next highest whole vote.
The Company agrees that it will not, and each Investor agrees that it
will use its best efforts to cause the Company not to, act on any decision of
the Board which has not been passed in accordance with this Section 3.2(2).
(3) CHAIRPERSON
The Board will appoint as Chairperson of the Board a nominee of
Telesystem. In no circumstances shall the Chairperson of the Board have a
casting vote.
SECTION 3.3 CONVERSION OF NON-VOTING SHARES.
During the term of this Agreement, any Investor holding Non-Voting
Shares shall, prior to any conversion thereof (in whole or in part) (a "NVS
CONVERSION") into common or other voting Shares of the Company in accordance
with the terms thereof, deliver to the Company and the other Investors a notice
(the "NVS CONVERSION NOTICE"), stipulating the number of Non-Voting Shares to be
converted
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under the NVS Conversion, together with the proposed closing date
thereof. Such Investor shall consult with the other Investors and the Company in
order to collectively determine whether such NVS Conversion (i) would trigger a
Potential Group Determination, or (ii) would create a Regulatory Problem. If
within ten days of receipt of the NVS Conversion Notice the Investors and the
Company have not agreed with such Investor to permit the NVS Conversion, such
matter shall be finally determined by a committee of the Board consisting of
those independent members designated pursuant to Section 3.2(1)(b)(ii).
SECTION 3.4 VOTING RIGHTS OTHERWISE UNAFFECTED.
Other than in respect of the matters referred to in this Article 3,
this Agreement shall have no effect on any voting rights attaching to the Shares
and, for greater certainty, each Investor shall otherwise retain the right to
consent to or to vote in person or by proxy the Shares, on any item of business,
resolution, matter, question or proposition whatsoever that may come before the
shareholders of the Company in its sole discretion.
ARTICLE 4
REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 4.1 REPRESENTATIONS AND WARRANTIES OF THE INVESTORS.
(1) Each Investor, severally and not jointly and severally and not
solidarily, represents and warrants as the date hereof (and in respect
of itself and none of the other Investors) as follows to the other
Investors and acknowledges and confirms that each such other Investor
is relying on such representations, warranties and covenants in
connection with the entering into of this Agreement:
(a) OWNERSHIP OF SHARES, ETC. Schedule 4.1 lists, in respect of
each Investor, the number of Subordinate Voting Shares or
Multiple Voting Shares of the Company, or Special Warrants
exercisable into Subordinate Voting Shares or Multiple Voting
Shares of the Company, as the case may be, or Purchase Warrant
or Dividend Warrants exercisable into Subordinate Voting
Shares of the Company, as the case may be, of which such
Investor is on the date hereof, or will be at the Effective
Date, the beneficial owner, directly or indirectly, or on
which it has or will then have direction and control over or
otherwise has or will then have the right to vote or deal
with, or direct the voting or dealing with. Except as
disclosed on Schedule 4.1(a), such Investor does not own on
the date hereof, nor will it own at the Effective Date,
directly or indirectly, or otherwise has or will then have
direction and control over or the right to vote or deal with,
or direct the voting or
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dealing with, any other voting securities or securities
convertible or exchangeable or exercisable into voting
securities of the Company. In respect of any Investor,
references in this Section 4.1(1)(a) to "direction" or
"directing the voting or dealing with" shall be limited to
those circumstances in which such Investor possesses or enjoys
an affirmative right, pursuant to an agreement, to direct
votes of or otherwise deal with Subordinate Voting Shares or
Multiple Voting Shares of the Company, or Purchase Warrants or
Dividend Warrants exercisable into Subordinate Voting Shares
of the Company.
(b) NO VOTING ARRANGEMENTS. Except as set out in this Agreement,
such Investor has no written or oral agreement, or any right
or privilege (whether by Law, pre-emptive or contractual)
capable of becoming an agreement, relating to or restricting
the exercise of any of the voting rights attaching to the
Shares and, for greater certainty, such Investor has and will
have with respect to after-acquired Shares the unfettered and
absolute right to exercise the votes attaching to such
Investor's Shares.
(c) NO CONTRAVENTION. The fulfilment of such Investor's
obligations hereunder does not and will not breach, contravene
or constitute a default under any contract, agreement or
instrument to which such Investor is a party or by which it is
bound.
(d) NO ACTIONS. Such Investor knows of no action, proceeding or
investigation, pending or threatened, involving such Investor
which places in question the validity or enforceability of
this Agreement.
(2) The representations and warranties of each Investor specified in
Section 4.1(1) shall be deemed to be repeated as of the Effective Date.
SECTION 4.2 REQUESTS.
Each Investor (a "REQUESTING INVESTOR") has the right, exercisable at
any time, to request in writing from each other Investor a disclosure, by way of
statutory declaration:
(a) as to the number of Shares beneficially owned, directly or
indirectly, by it and any of its Subsidiaries or Affiliates;
and
(b) if a Board nominee of the Requesting Investor has not been
elected in accordance with the terms hereof at a duly
constituted shareholders' meeting, as to the manner in which
such other Investor's Shares were voted at such meeting (but
only in respect of votes cast to elect directors),
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and such Investor shall provide such information in writing, within five (5)
Business Days of receipt of such request.
ARTICLE 5
REGULATORY MATTERS (JPMORGAN INVESTORS)
SECTION 5.1 CO-OPERATION OF OTHER INVESTORS.
Subject to Section 5.3, each Investor agrees to cooperate with the
Company in all reasonable respects in complying with the terms and provisions of
the letter agreement between the Company and the JPMorgan Investors, a duly
executed copy of which is attached as Schedule 5.1, regarding regulatory matters
(the "REGULATORY SIDELETTER"), including without limitation voting to approve
any amendment to the Company's Articles of Incorporation, the Company's By-laws
or other comparable corporate documents (collectively the "ORGANIZATIONAL
DOCUMENTS") or this Agreement in a manner reasonably acceptable to UFI,
Telesystem, CDPQ and each JPMorgan Investor or any Affiliate of any JPMorgan
Investor entitled to make such request pursuant to the Regulatory Sideletter in
order to remedy a Regulatory Problem (as defined in the Regulatory Sideletter)
in the manner provided in the Regulatory Sideletter. Anything contained in this
Section 5.1 to the contrary notwithstanding, no Investor shall be required under
this Section 5.1 to take any action that would adversely affect in any material
respect such Investor's rights, obligations or liabilities under this Agreement
or as a shareholder of the Company.
SECTION 5.2 COVENANT NOT TO AMEND.
Subject to Section 5.3, the Company and each Investor (other than the
XX Xxxxxx Investors) agree to provide the JPMorgan Investors with notice of its
or their intention to amend, or effectively amend by permanently foregoing its
rights under, the voting or other provisions of any Organizational Document or
this Agreement and agree not to amend, or effectively amend by permanently
foregoing its rights under, the voting or other provisions of any Organizational
Document or this Agreement until the JPMorgan Investors determine that such
amendment, or such effective amendment, would not itself, or would not following
the exercise by the JPMorgan Investors or their Affiliates of commercially
reasonable efforts, cause any JPMorgan Investor or any of its Affiliates to have
a Regulatory Problem (as defined in the Regulatory Sideletter). The JPMorgan
Investors agree to notify the Company and each other Investor as to whether or
not it would have a Regulatory Problem within ten (10) Business Days after the
JPMorgan Investors have received notice of such proposed amendment or such
effective amendment.
SECTION 5.3 REIMBURSEMENT.
The JPMorgan Investors shall be fully responsible for and shall
reimburse each of the Company, UFI, Telesystem and CDPQ, as the case may be, for
all of their
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respective costs and documented and incurred losses or expenses associated with
(i) any action requested to be taken by the JPMorgan Investors, or (ii) any
action caused to be taken by the JPMorgan Investors, in each case by the
Company, UFI, Telesystem and CDPQ, respectively, in connection with or pursuant
to Section 5.1 or Section 5.2.
ARTICLE 6
CO-SALE RIGHTS
SECTION 6.1 CO-SALE RIGHTS.
(1) If an Investor, either individually or as part of a group (the "CO-SALE
GROUP") of two or more Investors acting jointly and in concert (such
individual Investor or Co-Sale Group member being the "CO-SALE
OFFEREE") proposes to Transfer, or receives an offer to Transfer (that
it wishes to accept), to any Third Party (the "CO-SALE OFFEROR") Shares
of such Investor that either alone, or together with any other Co-Sale
Offeree, represent more than 15% of the total equity securities of the
Company issued and outstanding as of the date of such offer, the
Co-Sale Offeree, either for itself or on behalf of the Co-Sale Group,
shall, at least ten (10) Business Days before such Transfer, deliver a
notice (the "CO-SALE NOTICE") to each other Investor that sets forth:
(A) the number of Shares to which the offer relates (the "OFFERED
SHARES") and the name and address of the Co-Sale Offeror, (B) the name
and address of the proposed Co-Sale Offeree(s), (C) the proposed amount
and type of consideration (including without limitation, if the
consideration consists in whole or in part of non-cash consideration,
such information available to the Co-Sale Offeree(s) as may be
reasonably necessary for the Company and each Investor to properly
analyze the economic value and investment risk of such non-cash
consideration) and (D) the terms and conditions of payment offered by
the Co-Sale Offeror; provided, however, that such Co-Sale Notice shall
indicate that the Co-Sale Offeror has been informed of the co-sale
rights provided for in this Section 6.1(1) and has agreed in writing to
purchase Shares in accordance with the terms hereof.
(2) No Co-Sale Offeree shall Transfer any Shares to the Co-Sale Offeror
unless each Investor (other than any Co-Sale Offeree) who desires to do
so is permitted to Transfer its respective Pro Rata Amount (based upon
the aggregate number of Shares of the Company outstanding at such time
and held by all Investors) of the aggregate number of Shares to which
the Co-Sale Offer relates.
(3) Within ten (10) Business Days after delivery of the Co-Sale Notice,
each Investor may elect to participate in the proposed Transfer by
delivering to such Co-Sale Offeree a notice (the "TAG-ALONG NOTICE")
specifying the
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number of Shares (up to its Pro Rata Amount) with respect to which each
Investor shall exercise its rights under this Section 6.1(3).
(4) Any Shares specified in a Tag-Along Notice shall be Transferred on the
same terms and conditions as are set forth in the Co-Sale Notice in
respect of the Offered Shares.
(5) The provisions of this Article 6 (i) shall not apply to Permitted
Transfers and (ii) shall apply to all Shares including Non-Voting
Shares.
ARTICLE 7
MISCELLANEOUS
SECTION 7.1 ASSIGNMENT; SUCCESSORS.
This Agreement shall not be assigned by any Party without the prior
written consent of the other Parties, except that each Party may assign its
rights and obligations hereunder to any Subsidiary or Affiliate of such Party
which owns or receives Shares, provided that such Subsidiary or Affiliate agrees
to be bound by the terms hereof. Subject as aforesaid, this Agreement shall be
binding upon and enure to the benefit of the Parties and their respective heirs,
executors, administrators, successors and permitted assigns, as the case may be.
SECTION 7.2 GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with
the laws of Quebec and the federal laws of Canada applicable therein. Any legal
action or proceeding with respect to this Agreement may be brought exclusively
in the courts of the Province of Quebec. Each Party hereby irrevocably accepts
for itself and in respect of its property and assets, generally and
unconditionally the jurisdiction of the aforesaid courts.
SECTION 7.3 SEVERABILITY.
Any provision or provisions of this Agreement which contravene any
applicable law or which are found to be unenforceable shall, to the extent of
such contravention or unenforceability, be deemed severable and shall not cause
this Agreement to be held invalid or unenforceable or affect any other provision
or provisions of this Agreement.
SECTION 7.4 COUNTERPARTS.
This Agreement may be executed in any number of counterparts, including
counterparts by facsimile, and all of such counterparts taken together shall be
deemed to constitute one and the same instrument.
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SECTION 7.5 SPECIFIC PERFORMANCE.
Each Party hereby recognizes and acknowledges that a breach by it of
any covenants or agreements contained in this Agreement will cause the other
Parties to sustain damages for which they would not have adequate remedy at law
for money damages, and, therefore, each Party agrees that in the event of any
such breach, the aggrieved Party shall be entitled to the remedy of specific
performance of such covenants and agreements and injunctive and other equitable
relief in addition to any other remedy to which it may be entitled, at law or in
equity.
SECTION 7.6 NOTICES.
(1) Any notice, direction or other communication to be given under this
Agreement shall be in writing and given by delivering it or sending it
by telecopy or other similar form of recorded communication but not by
e-mail, addressed as follows:
(a) If to the Company, to it at:
1000 de la Gauchetiere Street West
16th Floor
Montreal, Quebec
H3B 4W5
Attention: Chief Financial Officer, and
the General Counsel and Secretary
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(b) If to UFI, to it at:
U.F. Investments (Barbados) Ltd.
The Ernst & Young Building
Xxxx Xxxx Bay Street
Bridgetown, Barbados
Attention: The Managing Director
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
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(c) with a copy to:
Xxxxxxxxx Whampoa Limited
00xx Xxxxx, Xxxxxxxxx Xxxxx
00 Xxxxxxxx Xxxx
Xxxx Xxxx
Attention: Group General Counsel
Telephone: (000) 0000-0000
Telecopier: (000) 0000-0000
(d) if to any of the XX Xxxxxx Investors, to any of them at:
c/o X.X. Xxxxxx Partners, LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Official Notices Clerk
(FBO: Xxxxxxx X. Xxxxxx)
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(e) with a copy to:
X'Xxxxxxxx LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
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(f) if to Telesystem, to it at:
0000 Xxxx-Xxxxxxxx Xxxx. Xxxx
00xx Xxxxx
Xxxxxxxx, Xxxxxx
X0X 0X0
Attention: Senior Vice-President and CFO
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(g) with a copy to:
0000 Xxxx-Xxxxxxxx Xxxx. Xxxx
00xx Xxxxx
Xxxxxxxx, Xxxxxx
X0X 0X0
Attention: Vice-President Legal Affairs and
Assistant-Secretary
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(h) if to CDPQ, to it at:
0000 Xxxxxx XxXxxx Xxxxxxx
Xxxxxxxx, Xxxxxx
X0X 0X0
Attention: President
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
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(i) with a copy to:
XxXxxxxx Xxxxxxxx LLP
0000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxx
X0X 0X0
Attention: Xxxxx Xxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Any such communication shall be deemed to have been validly and
effectively given (i) if personally delivered, on the date of such delivery if
such date is a Business Day and such delivery was made prior to 4:00 p.m. (local
time in the place of the recipient) and otherwise on the next Business Day, or
(ii) if transmitted by telecopy or similar means of recorded communication on
the Business Day following the date of transmission. Any Party may change its
address for service from time to time by notice given in accordance with the
foregoing and any subsequent notice shall be sent to such Party at its changed
address.
(CONTINUED OVERLEAF)
SECTION 7.7 LANGUAGE.
The Parties acknowledge and are satisfied that this Agreement be
initially drawn up in the English language. Notwithstanding the foregoing, the
Company undertakes to have this Agreement translated into the French language
and to circulate such translated version among all Investors forthwith following
the date hereof and in any event by no later than January 7, 2002, whereupon all
Investors shall have 15 days to comment thereon in writing to the Company and
all other Investors (such comments to be limited to issues of translation only
and not of substance). Upon agreement as to the final French translation of this
Agreement by the Company and all Investors, each of whom shall act diligently
and in good faith in respect thereof, the English and French versions of this
Agreement shall together be deemed to constitute one and the same agreement.
IN WITNESS WHEREOF the Parties have caused this Investor Rights
Agreement to be executed effective as described herein.
TELESYSTEM INTERNATIONAL WIRELESS INC.
By:
----------------------------------------
Authorized Signing Officer
By:
----------------------------------------
Authorized Signing Officer
U.F. INVESTMENTS (BARBADOS) LTD.
By:
----------------------------------------
Authorized Signing Officer
X.X. XXXXXX PARTNERS (BHCA), L.P.
By: JPMP Master Fund Manager, L.P.,
its General Partner
By: JPMP Capital Corp.,
its General Partner
By:
----------------------------------------
Name:
Title:
ASIA OPPORTUNITY FUND, L.P.
By: Asia Opportunity Company,
its General Partner
By:
----------------------------------------
Name:
Title:
CAIP CO-INVESTMENT FUND PARALLEL FUND
(I) C.V.
By: Asia Opportunity Company,
its General Partner
By:
----------------------------------------
Name:
Title:
CAIP CO-INVESTMENT FUND PARALLEL FUND
(II) C.V.
By: Asia Opportunity Company,
its General Partner
By:
----------------------------------------
Name:
Title:
X.X. XXXXXX ASIA INVESTMENT PARTNERS, L.P.
By: X.X. Xxxxxx Asia Equity Partners, L.P.,
its General Partner
By: X.X. Xxxxxx Asia Equity Company,
a Managing General Partner
By:
----------------------------------------
Name:
Title:
CAPITAL COMMUNICATIONS CDPQ INC.
By:
----------------------------------------
Authorized Signing Officer
By:
----------------------------------------
Authorized Signing Officer
TELESYSTEM LTD.
By:
----------------------------------------
Authorized Signing Officer
SCHEDULE "A"
INVESTORS
UFI
U.F. Investments (Barbados) Ltd.
XX Xxxxxx Investors
X.X. Xxxxxx Partners (BHCA), L.P.
Asia Opportunity Fund, L.P.
CAIP Co-Investment Fund Parallel Fund (I), C.V.
CAIP Co-Investment Fund Parallel Fund (II), C.V.
J.P. Xxxxxx Asia Investment Partners, L.P.
Telesystem
Telesystem Ltd.
CDPQ
Capital Communications CDPQ Inc.
SCHEDULE 3.2
MAJOR DECISIONS
(A) DECISIONS TO BE APPROVED BY NOT LESS THAN TWO THIRDS (2/3) OF VOTES
CAST BY DIRECTORS PRESENT AND ELIGIBLE TO CAST VOTES AT A DULY
CONSTITUTED BOARD MEETING:
Except as specifically provided for in the Master Agreement, the Business Plan
and consistent with the Strategic Direction:
(1) the issuance of any rights, warrants, options or underlying
securities or other equity securities (other than such
securities as may be granted or securities issued pursuant to
the Company Stock Incentive Plan, as amended, in force on the
date hereof and the Company Stock Incentive Plan to be
implemented pursuant to the Master Agreement ), the issuance
of equity or equity-linked securities, any redemption of any
equity or equity-linked securities, repurchase or acquisition
of equity or equity-linked securities, or the re-pricing (or
adjustment of the strike/exercise price) of any rights,
warrants or options, in each case by the Company or any
Subsidiary (including Subsidiaries of Subsidiaries);
(2) material changes in the Articles of Incorporation or By-laws
(or comparable constating documents) of the Company or any
Subsidiary;
(3) incurring any debt or pledging of assets of the Company or any
Subsidiary;
(4) the creation of any Subsidiary by the Company (or any
Subsidiary), except for the creation of any such Subsidiary
which is wholly-owned by the Company (or any such Subsidiary,
as applicable);
(5) the entering into by the Company or any Subsidiary of any
contract or agreement for an amount in excess of Cdn. $200,000
in any calendar year with any Affiliate, officer, director,
stockholder, consultant or employee of the Company or any
Subsidiary, or any Affiliate of any officer, director,
stockholder, consultant or employee of the Company or any
Subsidiary, including, without limitation, for the sale or
repurchase of any of the Company's or any Subsidiary's
outstanding capital stock, or rights, warrants or options
therefor (other than (A) existing repurchase rights, (B) any
contract or agreement entered into with such person on an
arms-length basis or (C) equity-based compensation approved
pursuant to A(1) above);
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(6) the granting of any exclusive rights to any intellectual
property of the Company or any Subsidiary;
(7) the granting of any exclusive distribution or offtake rights
by the Company or any Subsidiary;
(8) any material changes in the Company's or any Subsidiary's
accounting methods or policies (other than as required by U.S.
or Canadian generally accepted accounting principles), and any
change in the Company's or any Subsidiary's auditors;
(9) any other matter which pursuant to the CBCA, is to be approved
by a special resolution of shareholders of the Company;
(10) the sale of the Company (whether by sale of assets, stock or
merger) in circumstances in which the subject transaction or
transactions do not, in the respective opinions of each
Investor (and by written notice thereof to the Board), treat
such Investor in a fair and equitable manner; and
(11) the Company or any Subsidiary, as applicable, agreeing, or
offering, as the case may be, to take any of the foregoing
actions.
(B) DECISIONS TO BE APPROVED BY NOT LESS THAN THREE QUARTERS (3/4) OF VOTES
CAST BY DIRECTORS PRESENT AND ELIGIBLE TO CAST VOTES AT A DULY
CONSTITUTED BOARD MEETING:
(1) The approval of the Business Plan or any modification of the
Business Plan and/or of the Strategic Direction;
Except as specifically provided for in the Business Plan and consistent
with the Strategic Direction:
(2) the repurchase of debt by the Company or any Subsidiary (other
than out of the proceeds of a sale of businesses or assets, in
which case such repurchase of debt shall be subject to the
approval required by part (A) of Schedule 3.2, provided such
approval will not be withheld if the failure to so repurchase
debt would result in a breach of the Company's existing debt
covenants);
(3) any investment, acquisition, capital expenditure or
development project by the Company or any Subsidiary;
(4) the modification of the dividend policy of the Company (as
stated in the Business Plan);
-3-
(5) the discontinuance of the Company's status as a public company
with disclosure and filing obligations under the Securities
Exchange Act of 1934, as amended, or any comparable Canadian
law and/or otherwise stop or impair trading in the Company's
securities on The Toronto Stock Exchange, or any other
nationally recognized securities exchange in Canada;
(6) commencing or effecting a tender or exchange offer made by the
Company or any Subsidiary for all or a portion of the
securities of the Company or any Subsidiary;
(7) the Company or any Subsidiary commencing or terminating the
employment of, or amending or revising the terms of any
employment or other compensation agreement with, the CEO and,
on the recommendation of the CEO or Chairman, any of the other
executive officers named in a management proxy circular mailed
in connection with any Annual General Meeting; and
(8) the Company or any Subsidiary, as applicable, agreeing, or
offering, as the case may be, to take any of the foregoing
actions.
SCHEDULE 4.1(a)
OWNERSHIP OF SHARES, ETC.
(a) Multiple Voting Shares
Telesystem - 817,462 Multiple Voting Shares
(b) Subordinate Voting Shares
JPMorgan Investors - 27,493 Subordinate Voting Shares
UFI - 331,193 Subordinate Voting Shares
Telesystem - 1,938,018 Subordinate Voting Shares (796,946 of which are
pledged to and in favour of Computershare Trust Company of Canada, as
trustee for CDPQ)
CDPQ - 1,244,514 Subordinate Voting Shares
(c) Special Warrants Exercisable into Multiple Voting Shares
Telesystem - 8,108,170 Special Warrants exercisable into 8,108,170
Multiple Voting Shares
(d) Special Warrants Exercisable into Subordinate Voting Shares
JPMorgan Investors - 53,063,260 Special Warrants exercisable into
53,063,260 Subordinate Voting Shares
CDPQ - 59,708,413 Special Warrants exercisable into 59,708,413
Subordinate Voting Shares
Telesystem - 26,064,570 Special Warrants exercisable into 26,064,570
Subordinate Voting Shares
(e) Purchase Warrants Exercisable into Subordinate Voting Shares
15,000,000 Purchase Warrants exercisable into 15,000,000 Subordinate
Voting Shares
(f) Convertible Debentures
JPMorgan Investors - U.S.$150 million face amount of Convertible
Debentures, together with accrued and unpaid interest thereon
-2-
UFI - U.S.$150 million face amount of Convertible Debentures, together
with accrued and unpaid interest thereon
(g) ESDs/Units.
Telesystem - 16,820, 000 Units (all of which are pledged to and in
favour of Caisse de Depot et Placement du Quebec)
CDPQ - 3,111,286 Units
SCHEDULE 5.1
REGULATORY SIDELETTER
