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EXHIBIT 10.3
SHAREHOLDERS AGREEMENT
BY AND AMONG
VALORCOM S.A.,
NEXTEL INTERNATIONAL (PERU), LLC,
MOTOROLA INTERNATIONAL DEVELOPMENT CORPORATION,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ COZ
AND
NEXTEL INTERNATIONAL, INC.
DATED AS OF JANUARY 29, 1998
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TABLE OF CONTENTS
PAGE
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1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitional Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2. Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.1 Election and Removal of Members of Board of Directors . . . . . . . . . . . . . . . . 5
2.2 Board Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.3 Board Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.4 Shareholder Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.5 Affiliate Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.6 By-laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.7 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.8 Changes in Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3. Transferability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.1 Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.2 Right of First Refusal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.3 Tag-Along Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.4 Drag-Along Rights of Nextel . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.5 No Other Transfer Effective . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.6 Transfer of Capital Stock of Subsidiaries . . . . . . . . . . . . . . . . . . . . . 14
4. Preemptive Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5. Capital Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.1 Notice of Capital Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.2 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.3 Failure to Make Capital Contributions . . . . . . . . . . . . . . . . . . . . . . . 15
5.4 Call Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.5 Exceptions from Call . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.6 Guarantees; Pledges of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6. Call by Shareholders and the Company upon Breach . . . . . . . . . . . . . . . . . . . . . . . 18
7. Acquisition of ESMR Infrastructure Equipment . . . . . . . . . . . . . . . . . . . . . . . . . 19
8. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9. Noncompetition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
10. NII Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
12. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
13. Regulatory Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
14. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
14.1 Specific Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
14.2 Delivery of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
14.3 Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
14.4 Environmental Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
14.5 Employment Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
14.6 Quality Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ▇▇
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14.7 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
14.8 Entire Agreement; Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . 25
14.9 Governing Law; Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . 25
14.10 Dispute Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
14.11 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
14.12 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
14.13 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
14.14 Nextel's Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . 26
14.15 Government Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ▇▇
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VALORCOM S.A.
SHAREHOLDERS AGREEMENT
THIS SHAREHOLDERS AGREEMENT (this "AGREEMENT") is made as of January
29, 1998, by and among VALORCOM S.A., a Peruvian corporation (to be renamed
NEXTEL del PERU S.A.) (the "COMPANY"), and the Persons listed as Shareholders
on Exhibit I attached hereto, as amended from time to time, including as of the
date hereof NEXTEL INTERNATIONAL (PERU), LLC, a Cayman Islands limited life
company (including any successor thereto, "NEXTEL"), MOTOROLA INTERNATIONAL
DEVELOPMENT CORPORATION, a Delaware corporation, ("MOTOROLA") and ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ COZ, a Peruvian citizen ("▇▇▇▇▇▇▇▇▇▇") (collectively, the
"SHAREHOLDERS" and, individually, a "SHAREHOLDER"), and NEXTEL INTERNATIONAL,
INC., a Washington corporation and indirect owner of 100% of the capital stock
of Nextel ("NII").
RECITALS
A. The Company was formed as a corporation under the laws of
Peru, effective November 18, 1997.
B. The outstanding Shares are held as follows:
Shareholder Percentage
----------- ----------
Nextel 70.05%
Motorola 19.95%
▇▇▇▇▇▇▇▇▇▇ 10.00%
C. The Shareholders and the Company desire to enter into this
Agreement to provide for Nextel's day-to-day operational control of the Company
and its subsidiaries and the transferability of the shares of Common Stock of
the Company, S/.1.00 each (the "SHARES").
AGREEMENT
NOW, THEREFORE, for good and valuable consideration the receipt and
sufficiency of which are acknowledged and to further the interests of the
Company and its present and future Shareholders, the parties agree as follows:
1. DEFINITIONS.
1.1 DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings:
"AFFILIATE" of any Person (the "SUBJECT") means any
other Person which, directly or indirectly, Controls or is Controlled by or is
under common Control with the Subject. Notwithstanding the foregoing, unless
otherwise set forth herein the Company
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shall be deemed not to be an Affiliate of any Shareholder of the Company for
purposes of this Agreement.
"AGREEMENT" has the meaning set forth in the
introductory paragraph.
"APPRAISED FAIR MARKET VALUE" means the price that
an unrelated third party would pay if it were to acquire all outstanding Shares
(including all outstanding vested options at the stated exercise price thereof)
in an arm's-length transaction (assuming that the Shares were being sold in a
manner designed to attract all possible participants and taking into
consideration a control premium or a minority discount, as appropriate) as
determined by the appraisal procedures set forth in Section 2.2(c).
"▇▇▇▇▇▇▇▇▇▇" has the meaning set forth in the
introductory paragraph.
"BOARD" means the Board of Directors of the Company.
"BREACH NOTICE" has the meaning set forth in Section
6(a).
"BREACHING SHAREHOLDER" has the meaning set forth in
Section 6(a).
"BREACHING SHAREHOLDER'S SHARES" has the meaning set
forth in Section 6(a).
"BUSINESS DAY" means any day other than a Saturday,
Sunday or a day on which commercial banks in New York, New York or Lima, Peru
are authorized to close.
"BUSINESS PLAN" has the meaning set forth in Section
2.2(a)(ii).
"BUYER" has the meaning set forth in Section 3.4(a).
"CALL PRICE" has the meaning set forth in Section
5.3(d).
"CALL RIGHT" has the meaning set forth in Section
5.3(d).
"CALLING SHAREHOLDER" has the meaning set forth in
Section 5.4(a).
"COMPANY" has the meaning set forth in the
introductory paragraph.
"CONFIDENTIALITY AGREEMENT" has the meaning set froth
in the Stock Purchase Agreement.
"CONFIRMATION DATE" has the meaning set forth in
Section 6(a).
"CONTROL" (including, with correlative meanings, the
terms "Controlled by" and "under common Control with"), as used with respect to
any Person,
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means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through
the ownership of voting securities or by contract or otherwise; provided that
any Shareholder which together with its Affiliates owns more Shares than any
other Shareholder (together with its Affiliates) shall be deemed to Control the
Company.
"CONTRIBUTED CAPITAL" has the meaning set forth in
Section 2.8.
"DEFAULTING SHAREHOLDER" has the meaning set forth in
Section 5.3.
"DIRECTOR" means a member of the Board.
"DISPUTING SHAREHOLDER" has the meaning set forth in
Section 2.2(c).
"ESMR" means enhanced SMR.
"ESMR EQUIPMENT" has the meaning set forth in Section
7(a).
"EXERCISING SHAREHOLDER" has the meaning set forth in
Section 5.3(c).
"FIRST APPRAISER" has the meaning set forth in
Section 2.2(c).
"FREE CASH FLOW" means the sum of net income and
depreciation and amortization of the Company, less (i) capital expenditures and
(ii) changes in working capital, all in accordance with U.S. GAAP.
"ICC" has the meaning set forth in Section 14.10(a).
"INFLATION INDEX" has the meaning set forth in
Section 2.2(b).
"MINORITY SHAREHOLDER" means any Shareholder that
does not Control the Company.
"MOTOROLA" has the meaning set forth in the
introductory paragraph.
"MOTOROLA NOTICE" has the meaning set forth in
Section 7(c).
"NEXTEL" has the meaning set forth in the
introductory paragraph.
"NII" has the meaning set forth in the Recitals.
"NONBREACHING SHAREHOLDER" has the meaning set forth
in Section 6(a).
"NONDEFAULTING SHAREHOLDERS" has the meaning set
forth in Section 5.3(c).
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"NOTICE" has the meaning set forth in Section 5.3(c).
"OBJECTING SHAREHOLDER" has the meaning set forth in
Section 2.2(b).
"OFFER" has the meaning set forth in Section 3.2(b).
"OFFERED SHARES" has the meaning set forth in Section
3.2(b).
"OFFEREE" has the meaning set forth in Section
3.2(b).
"PAYMENT DATE" has the meaning set forth in Section
5.1.
"PERSON" means any individual, partnership, limited
liability company, joint-stock company, firm, corporation, association,
unincorporated organization, joint venture, trust or other entity.
"PERUVIAN GAAP" has the meaning set forth in Section
14.2(a).
"PLEDGE AGREEMENTS" has the meaning set forth in the
Stock Purchase Agreement.
"PROPOSED SHARES" has the meaning set forth in
Section 3.3(b).
"REGISTRATION RIGHTS AGREEMENT" has the meaning set
forth in the Stock Purchase Agreement.
"SALE" has the meaning set forth in Section 3.4(a).
"SECOND APPRAISER" has the meaning set forth in
Section 2.2(c).
"SELLING SHAREHOLDER" has the meaning set forth in
Section 3.1(a).
"SHAREHOLDER" has the meaning set forth in the
introductory paragraph.
"SHARES" has the meaning set forth in the Recitals.
"SMR" means specialized mobile radio ("servicio
troncalizado").
"STOCK PURCHASE AGREEMENT" means the Stock Purchase
Agreement dated as of January 29, 1998 by and among Nextel, MIDC, ▇▇▇▇▇▇▇▇▇▇
and the Company.
"SUCCESSOR SHAREHOLDER" has the meaning set forth in
Section 3.1(c).
"TAG-ALONG OFFER" has the meaning set forth in
Section 3.3(a).
"TAG-ALONG SHARES" has the meaning set forth in
Section 3.3(a).
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"THIRD APPRAISER" has the meaning set forth in
Section 2.2(c).
"TRANSACTION AGREEMENTS" means this Agreement, the
Stock Purchase Agreement, the Registration Rights Agreement and the Pledge
Agreements.
"TRANSFER" has the meaning set forth in Section
3.1(a).
"U.S. GAAP" means U.S. generally accepted accounting
principles.
1.2 OTHER DEFINITIONAL MATTERS.
(a) The words "this Agreement," "hereby,"
"herein," "hereof," "hereunder" and words of similar import refer to this
Agreement as a whole and not to any particular provisions of this Agreement,
and the words "Article," "Section," "Schedule," "Exhibit" and like references
are to this Agreement unless otherwise specified.
(b) Singular and plural forms, as the case may
be, of terms defined herein have correlative meanings.
(c) Any defined term which relates to a document
includes within its definition any amendments, modifications, renewals,
restatements, extensions, supplements or substitutions which may heretofore
have been or which may hereafter be executed in accordance with the terms
thereof and as may be permitted by this Agreement.
(d) All references to "$" or "dollars" are to the
legal tender currency of the United States of America. All references to
"Nuevos Soles" are to the legal tender currency of Peru.
2. CORPORATE GOVERNANCE.
2.1 ELECTION AND REMOVAL OF MEMBERS OF BOARD OF DIRECTORS.
(a) The Board shall be composed of seven
Directors. In elections of Directors, the Shareholders shall vote for the
election of a list of candidates, whom the Company's Shareholders shall take
all necessary steps to nominate, as set forth below:
(i) so long as Nextel Controls the
Company, Nextel shall designate five candidates for election to the Board;
provided that if Nextel Controls the Company and owns at any time 60.05% or
less of the outstanding Shares, Nextel shall designate four candidates for
election to the Board,
(ii) so long as it owns 10% or more of
the outstanding Shares, each of Motorola, ▇▇▇▇▇▇▇▇▇▇ and any other Shareholder
owning 10% or more of the outstanding Shares, other than Nextel, shall
designate one candidate for election to the Board; provided that if Motorola
owns 29.95% or more of the outstanding Shares and no Shareholder other than
Nextel or ▇▇▇▇▇▇▇▇▇▇ owns 10% or more of the outstanding Shares, Motorola may
designate an additional candidate for election to the Board. If at any time
any
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Shareholder shall own less than 10% of the outstanding Shares, such Shareholder
shall cause the resignation of the Director who was designated for election by
such Shareholder, and the Shareholders shall elect a new Director, designated
for election by vote of a majority of the Shares owned by the Minority
Shareholders, to fill the resulting vacancy.
(b) Each Shareholder shall have the right to
remove any or all of the Directors designated for election by it at any time
and from time to time. If the Director who has been requested to resign by the
Shareholder that designated him or her refuses or fails to tender resignation
to the Company, then all of the Shareholders shall take appropriate action to
remove such Director from his or her office in accordance with the provisions
of the By-laws. If a Director designated for election by a Shareholder shall
be removed by such Shareholder or shall die or otherwise become incapable of
serving as a Director, then such Shareholder may designate a candidate for
election to fill the resulting vacancy.
2.2 BOARD APPROVALS.
(a) The following actions shall require the
approval at least five Directors (including each Director or Directors
designated for election by each Shareholder owning, individually or together
with its Affiliates, 19% or more of the outstanding Shares):
(i) participate in the selection of
senior management and approve (which approval shall not be unreasonably
withheld) such selection and the establishment of compensation for the members
of senior management (the Board shall give due consideration to any expatriate
employee of any Shareholder who is nominated for appointment to the senior
management team by any of the Shareholders);
(ii) adopt any three-year business plan
and budget, including any three-year budget for capital expenditures and
expenses, and any amendments thereto (collectively, the "BUSINESS PLAN"); the
initial Business Plan is attached hereto as Exhibit II and by their signature
hereto, each Shareholder hereby approves such Business Plan; and
(iii) approve any expenditures for any
year that would cause Free Cash Flow for such year to be more than 15% less
than that shown in the Business Plan then in effect;
provided, however, if at the expiration of any Business Plan, such Directors
shall not have agreed to a new Business Plan, the previous Business Plan shall
remain in effect for an additional six-month period while such Directors seek
to agree to a new Business Plan. At the end of such additional six-month
period, if such Directors still have not agreed to a new Business Plan, then
the Shareholders (other than the Minority Shareholder or Shareholders that
designated for election the Director or Directors that have not approved the
new Business Plan (each, an "OBJECTING SHAREHOLDER")) shall have the right to
purchase all, but not less than all, of the Objecting Shareholder's Shares at a
price equal to the Appraised Fair Market Value (as set forth below) of such
Shares (determined as of the end of such additional six- month period) owned by
the Objecting Shareholder upon ten days notice to
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the Objecting Shareholder. Any such purchase shall be on a pro rata basis
based on the number of Shares owned by the Shareholders electing to exercise
such purchase right. If payment is required under any guarantees provided by
the Objecting Shareholder pursuant to Section 5.6, the Shareholders electing to
exercise their purchase rights hereunder shall severally, based on the number
of Shares acquired by each purchasing Shareholder, indemnify the Objecting
Shareholder for up to 50% of any amounts paid by the Objecting Shareholder
under such guarantees.
(b) During the period that any new Business Plan
is being negotiated, each Director and each Shareholder shall be deemed to have
consented to, and each Shareholder will make, any capital contributions to the
Company to the minimum extent necessary to fund operating expenses, including
but not limited to working capital and capital expenditures, during such fiscal
year in an amount not to exceed 105%, increased to reflect the annual inflation
rate based on the Peruvian index of wholesale prices as determined by the INEI
(Indice de Precios al por Mayor) (the "INFLATION INDEX"), of the Company's
operating expenses shown in the approved Business Plan for the preceding fiscal
year (or if there was no approved Business Plan for the preceding fiscal year,
in an amount not to exceed the amount of operating expenses for the last full
fiscal year with an approved Business Plan, multiplied by 105% per annum,
increased to reflect the annual inflation rate based on the Inflation Index,
for each year since the date of such fiscal year). The Company shall provide a
draft Business Plan to the Shareholders at least three months prior to
expiration of the preceding Business Plan.
(c) "APPRAISED FAIR MARKET VALUE" shall be
determined in accordance with the following procedures:
(i) The Company shall select an
investment banking firm of recognized international standing (the "FIRST
APPRAISER"), which shall appraise the Appraised Fair Market Value and deliver
its appraisal to the Company and the Shareholders within 60 days of its
engagement. In reaching its determination of Appraised Fair Market Value, such
appraiser shall take into account the amount of financial leverage in the
Company's capital structure and shall consider whatever factors deemed
relevant, including actual and projected earnings, the price to earnings ratio,
the debt to equity ratio, the market value to book value ratio and the market
value to cash flow ratio of companies in the same industry in comparable
markets that are deemed reasonably comparable for this purpose.
(ii) If any Shareholder or Shareholders
having an interest therein shall disagree with the Appraised Fair Market Value
determined by such appraiser (a "DISPUTING SHAREHOLDER"), then the Disputing
Shareholder (or Shareholders acting jointly) shall have the right to appoint an
additional investment banking firm of recognized international standing (the
"SECOND APPRAISER"). If the Disputing Shareholder or Shareholders do not
engage a Second Appraiser within 30 days of the First Appraiser's delivery of
its appraisal, the First Appraiser's appraisal shall be the Appraised Fair
Market Value. If the Disputing Shareholder or Shareholders engage a Second
Appraiser, the Second Appraiser will appraise the Appraised Fair Market Value,
and deliver its appraisal to the
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Company and the Shareholders within 60 days of its engagement. If the
difference between the two appraisals is less than 10% of the lower appraised
value, then the Appraised Fair Market Value shall be the average of the two
appraisals.
(iii) If the difference is greater than or
equal to 10% of the lower appraised value and the Disputing Shareholder and the
Company cannot reach an agreement within ten (10) days, the two appraisers
shall engage a third independent investment banking firm of recognized
international standing (the "THIRD APPRAISER"), which shall appraise the
Appraised Fair Market Value within 60 days of its engagement. The Appraised
Fair Market Value shall be the average of the two of the three appraised values
which are closest in absolute U.S. dollars.
(iv) All appraisals of Appraised Fair
Market Value shall be as of the date of notice of exercise of the right. The
expenses of the First Appraiser shall be borne by the Company. Any investment
banking firm selected as an appraiser shall have no business, financial or
other relationship with any Shareholder unless consented to by each party in
interest. The expenses of the Second Appraiser, if any, shall be borne by the
Disputing Shareholder or Shareholders; and the expenses of the Third Appraiser,
if any, shall be borne equally by the Company and the Disputing Shareholder or
Shareholders.
2.3 BOARD MEETINGS. The Board shall meet at least once
each quarter. If any Director acts in violation of this Agreement, all the
Shareholders hereby agree to vote to remove such Director and the Shareholder
who designated such Director shall designate a replacement Director.
2.4 SHAREHOLDER MEETINGS. At all meetings of the
Shareholders, the parties hereto hereby agree to vote their respective Shares
in accordance with the provisions of this Agreement. Any Shareholder which
together with its Affiliates owns at least 19% of the outstanding Shares may
request that any of the actions approved by the Board of Directors in
accordance with Section 2.2 be ratified by a special Shareholder meeting;
provided that the approval by any Shareholder of any matter referred to in
Section 2.2(a)(i) shall not be unreasonably withheld. Upon receiving such
request in writing, the Company shall cause a special Shareholder meeting to be
held a soon as practically possible.
2.5 AFFILIATE TRANSACTIONS. All agreements between the
Company and its Affiliates (including for purposes of this Section 2.5
Shareholders and their Affiliates) will be entered into on such terms and
conditions as the Company would obtain in a disinterested, third party
transaction and must be approved by a majority of the Directors not designated
for election by the relevant Affiliate of the Company; provided that the
Director or Directors representing such Affiliate may participate in any
meetings at which such approval is considered; provided further that any such
Director or Directors will leave such meeting during discussion of such
approval if requested by a majority of the remaining Directors.
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2.6 BY-LAWS.
(a) The Shareholders hereby agree to amend the
By-laws within 45 days of the date hereof in order for the By-laws to comply
with both this Agreement and the recently amended Peruvian corporate law and
each Shareholder hereby agrees to take all action necessary to adopt such
amended By-laws. The By-laws shall reflect to the extent legally possible
under Peruvian corporate law all terms and conditions related to the Company
under this Agreement. In case of any discrepancy between the text of this
Agreement and the Company's By-laws, this Agreement shall prevail as between
the parties.
(b) So long as any Shareholder has satisfied its
obligations to make capital contributions to the Company, the Shareholders
shall not amend the By-laws in any manner that would have a material adverse
effect on the rights of such Shareholder without the consent of such
Shareholder, except as contemplated by Section 2.6(a).
2.7 SUBSIDIARIES. The Company and each Shareholder
hereby agree to use their best efforts to ensure that the Company's
subsidiaries comply with the provisions set forth herein.
2.8 CHANGES IN CAPITAL. Notwithstanding any other
provision of this Agreement to the contrary, if because of fluctuations in
foreign exchange rates, the sum of Nextel's payments to the Company in
accordance with Section 2.1(b)(vi) and Exhibit 2.1(b)(vi) of the Stock Purchase
Agreement, after converting such amounts into Nuevos Soles, and the payments
and capital contributions made by Motorola and ▇▇▇▇▇▇▇▇▇▇ pursuant to this
Section 2.1(b) (such sum being referred to as the "CONTRIBUTED CAPITAL") is
greater than the authorized capital of the Company after giving effect to the
Capital Increase (as defined in the Stock Purchase Agreement), each of the
parties hereto agrees to authorize an increase in the capital of the Company to
cover such excess and to issue without additional consideration such new share
capital of the Company to Nextel, Motorola and ▇▇▇▇▇▇▇▇▇▇ such that after such
issuance, their relative ownership of the Company is identical to the relative
ownership set forth on Exhibit I hereto. Notwithstanding any other provision
of this Agreement to the contrary, if because of fluctuations in foreign
exchange rates, the Contributed Capital is less than the authorized capital of
the Company after giving effect to the Capital Increase, each of Motorola and
▇▇▇▇▇▇▇▇▇▇ agree, on a pro rata basis, to transfer without additional
consideration shares of Common Stock of the Company to Nextel such that after
such transfer the relative ownership of the Company is identical to the
relative ownership set forth on Exhibit I hereto.
3. TRANSFERABILITY.
3.1 TRANSFERS.
(a) A Shareholder may sell, assign, transfer,
pledge, hypothecate, mortgage, encumber, contribute to any Person, set in
usufruct or otherwise transfer to any Person (collectively, "TRANSFER,"
including, with correlative meanings, the terms "Transferring" and
"Transferred") all or any part of the Shares or other securities of the
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Company convertible into or exercisable for Shares only if (i) such Transfer is
the grant of a security interest to secure a bona fide third party financing
for the benefit of the Company or as contemplated by the Stock Purchase
Agreement, or (ii) such Transfer is to an Affiliate of such Shareholder or
(iii) the Shareholder proposing such a Transfer (the "SELLING SHAREHOLDER") has
complied with the provisions of this Agreement, including without limitation,
Section 3. A reference to these restrictions on transfer shall be noted on the
corporate charter, share registry and share certificates of the Company.
(b) If any Shareholder Transfers all or any part
of its Shares to an Affiliate, the transferor Shareholder shall remain
responsible to the other Shareholders for all of its duties and obligations
hereunder and hereby guarantees the performance by its transferee of all of
such transferor Shareholder's duties and obligations hereunder. If an
Affiliate to which Shares have been Transferred ceases to be an Affiliate of
such Shareholder, then such Affiliate shall, upon or prior to ceasing to be an
Affiliate, transfer such Shares back to the Shareholder from which it acquired
the Shares or to another Affiliate of such Shareholder.
(c) If, in accordance with the provisions of this
Agreement, a Shareholder Transfers its Shares to a transferee other than a
Shareholder (the "SUCCESSOR SHAREHOLDER"), the admission of the Successor
Shareholder as a shareholder of the Company shall be conditioned upon the
receipt by the Company of the following: (i) the Successor Shareholder's
agreement in writing to be bound by all of the terms of this Agreement,
assuming the rights, duties and obligations of the transferor Shareholder
hereunder and (ii) such other documents or instruments as may be required in
order to effect its admission as a Shareholder under this Agreement and
applicable law. Upon such Transfer, the transferor Shareholder shall cease to
be a Shareholder of the Company and shall have no further obligations
hereunder, except as set forth in Section 3.1(b).
(d) Notwithstanding the provisions of this
Article 3, in no event shall a Transfer be permitted to any Person who is
prohibited by law or regulation from being a participant in the Business.
(e) NII agrees that this Article 3 shall apply,
mutatis mutandis, to the Transfer of equity securities of Nextel as if such
securities were Shares and NII shall take all actions necessary to cause its
direct and indirect subsidiaries to comply with the provisions of this
Agreement in connection with any such Transfer.
(f) Notwithstanding any other provision of this
Article 3, during the six-month period beginning on the date hereof, Nextel or
its Affiliates may Transfer up to 20% of the outstanding Shares (the "AVAILABLE
SHARES") to any third party that is based in Peru and that is reasonably
acceptable to both Nextel and Motorola (a "NEW PERUVIAN PARTNER"), and such
Transfer shall not be subject to the restrictions set forth in this Article 3.
(g) Subject to Section 3.1(h), notwithstanding
any other provision of this Article 3, to the extent that a New Peruvian
Partner does not purchase all of the
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Available Shares during the six-month period beginning on the date hereof,
Nextel or its Affiliates may, by written notice delivered to Motorola within 30
days following the six-month anniversary of the date hereof, sell to Motorola
or its Affiliates, and Motorola or its Affiliates shall purchase from Nextel,
up to one-half of the Available Shares not purchased by a New Peruvian Partner
at a price payable in dollars equal to the aggregate consideration (taking into
account both cash payments and obligations to make future cash payments) paid
by Nextel for the Shares to be purchased by Motorola pursuant to the Stock
Purchase Agreement (the "ADDITIONAL MOTOROLA SHARES") plus an additional amount
per Share calculated by multiplying each Carried Payment (as defined below) by
7% per annum, calculated from the date such Carried Payment was made until the
date of payment by Motorola. "CARRIED PAYMENT" shall mean the amount of each
cash payment made by Nextel or its Affiliates pursuant to Section 2.1(b)(v) of
the Stock Purchase Agreement multiplied by a fraction, the numerator of which
is the number of Additional Motorola Shares and the denominator of which is the
number of Shares outstanding following registration of the Capital Increase (as
defined in the Stock Purchase Agreement). Any Transfer to Motorola pursuant to
this Section 3.1(g) shall not be subject to the restrictions set forth in this
Article 3.
(h) Notwithstanding Section 3.1(g), if Motorola
introduces to Nextel a third party based in Peru that agrees in writing to
purchase any or all of the Additional Motorola Shares at a price per share
equal to or greater than the price per share that Motorola is obligated to pay
pursuant to Section 3.1(g) and Nextel unreasonably refuses to Transfer such
Additional Motorola Shares to such third party, then Motorola's obligation to
purchase Additional Motorola Shares shall be reduced by 50% of the number of
Additional Motorola Shares that such third party agreed in writing to purchase.
3.2 RIGHT OF FIRST REFUSAL.
(a) TRANSFERS BY SHAREHOLDER. Except as
otherwise provided in this Agreement, no Shareholder may Transfer any interest,
direct or indirect, in all or any part of the Shares owned by such Shareholder,
unless (i) the Selling Shareholder shall have made an offer to sell such Shares
to the other Shareholders and the Company as provided in this Section 3.2 and
(ii) such offer shall not have been accepted in the manner described in this
Section 3.2. No Shareholder having beneficial ownership of less than 5% of the
Shares at the time of any proposed Transfer by any other Shareholder shall have
rights of first refusal as provided in this Section 3.2.
(b) OFFER BY SELLING SHAREHOLDER. The offer
referred to in Section 3.2(a) shall consist of a written offer (the "OFFER") to
the other Shareholders entitled to rights of first refusal (the "OFFEREES") and
to the Company to sell the Shares proposed to be Transferred (the "OFFERED
SHARES"). The Offer shall set forth (a) a statement of intention to effect a
Transfer, (b) the number and class of Offered Shares, (c) the terms and
conditions of the proposed Transfer, including (i) the purchase price and terms
of payment for the Offered Shares and (ii) the identity and beneficial
ownership of the third party or parties
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having made a bona fide offer to purchase the Offered Shares on such terms and
conditions, and (d) the desired closing date of the transaction.
(c) ACCEPTANCE OF OFFER. Within 30 days after
its receipt of the Offer, each Offeree may, at its option, accept the Offer as
to all or less than all of the Offered Shares by giving irrevocable written
notice to the Selling Shareholder, the Company and the other Shareholders prior
to the expiration of such 30-day period.
(d) PRO RATA PORTION. To the extent that more
than one Offeree shall have elected to purchase Offered Shares pursuant to
Section 3.2(c), each such Offeree may purchase up to its pro rata portion of
such Offered Shares as determined in accordance with this Section 3.2(d). Each
Offeree's pro rata portion of the Offered Shares is that proportion of the
Offered Shares as the number of Shares held by such Offeree bears to the
aggregate number of Shares held by such Offeree and all other Offerees who have
exercised their rights of first refusal under this Section 3.2. If the
Offerees shall not have offered to purchase all the Offered Shares, the Company
may elect to redeem or purchase any remaining Offered Shares by written notice
to the Selling Shareholder and the Offerees within ten (10) days after the
expiration of the 30-day period set forth in Section 3.2(c).
(e) CLOSING. If the Offer is accepted as to the
Offered Shares, the parties shall use their best efforts to complete the
closing of such purchase within 30 days after acceptance of the Offer. If,
after expiration of such 30-day period, the closing of such purchase of Offered
Shares shall not have occurred (unless closing is subject only to receipt of
required governmental or regulatory approvals) through no fault of the Selling
Shareholder, then the Selling Shareholder may treat the Offer as having been
rejected in its entirety. If the Offer is not accepted as to all the Offered
Shares as provided in this Section 3.2, or is deemed to be rejected as set
forth in the previous sentence, the Selling Shareholder may for a period of 60
days after such nonacceptance or deemed rejection Transfer the Offered Shares
to the third party or parties designated in the Offer and on the terms and
conditions specified in the Offer. A proposed Transfer after the expiration of
such 60-day period or on any other terms shall again be subject to the rights
of first refusal and other provisions of this Section 3.
3.3 TAG-ALONG RIGHTS.
(a) TRANSFERS BY NEXTEL. Except as otherwise
provided in this Agreement, neither Nextel nor any Affiliate of Nextel may
Transfer all or any part of the Shares owned by Nextel such that Nextel and its
Affiliates would no longer Control the Company unless (a) Nextel or such
Affiliate shall have sent to each Minority Shareholder a written offer (the
"TAG-ALONG OFFER") to include in such Transfer any or all of such Minority
Shareholder's Shares (the "TAG-ALONG SHARES") at the same price and on the same
terms as Nextel or such Affiliate shall Transfer its Shares and (b) such offer
shall not have been accepted in the manner described in this Section 3.3. The
Minority Shareholders shall not be entitled to the rights of first refusal set
forth in Section 3.2 with respect to the Shares proposed to be Transferred by
Nextel and its Affiliates pursuant to this Section 3.3.
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(b) TAG-ALONG OFFER. The Tag-Along Offer shall
consist of a written offer to the Minority Shareholders to include the
Tag-Along Shares in the Shares proposed to be Transferred (the "PROPOSED
SHARES"). The Tag- Along Offer shall set forth (a) a statement of intention to
effect such a Transfer, (b) the number and class of Proposed Shares, (c) the
terms and conditions of the proposed Transfer, including (i) the purchase price
and terms of payment for the Proposed Shares and (ii) the identity and
beneficial ownership of the party or parties having made a bona fide offer to
purchase the Proposed Shares on such terms and conditions, and (d) the desired
closing date of the transaction.
(c) ACCEPTANCE OF TAG-ALONG OFFER. Within 30
days after its receipt of the Tag-Along Offer, each Minority Shareholder may,
at its option, accept the Tag-Along Offer as to any or all of such Minority
Shareholder's Tag-Along Shares by giving irrevocable written notice to Nextel,
the Company and the other Shareholders prior to the expiration of such 30-day
period. Any Tag-Along Shares to be Transferred by Minority Shareholders shall
be substituted for an equal number of Proposed Shares; provided, however, that
if the number of Tag-Along Shares exceeds the number of Proposed Shares and the
purchaser of such Proposed Shares is unwilling to purchase such excess
Tag-Along Shares, the Tag-Along Shares of each Shareholder shall be reduced pro
rata. Each Shareholder's pro rata portion of the Tag-Along Shares is that
proportion of the Tag-Along Shares as the number of Shares held by such
Shareholder bears to the aggregate number of Shares held by such Shareholder
and all other Shareholders who have elected to participate in the Tag-Along
Offer pursuant to this Section 3.3. If the purchaser of the Proposed Shares
elects to purchase all of the Tag-Along Shares and the Proposed Shares, Nextel
may participate in such Transfer.
(d) CLOSING. Nextel and those Minority
Shareholders having accepted the Tag-Along Offer shall use their best efforts
to complete the closing of any such Transfer within 30 days after the end of
the 30-day offering period. If Nextel and the Minority Shareholders shall fail
to complete such Transfer within such 30-day closing period (unless closing is
delayed due to the need for required governmental or regulatory approvals), or
if Nextel and the Minority Shareholders propose to effect a Transfer on
different terms than those permitted by the Tag- Along Offer pursuant to
Section 3.3(b), then any proposed Transfer shall again be subject to all the
Transfer restrictions set forth in this Section 3.
3.4 DRAG-ALONG RIGHTS OF NEXTEL.
(a) RIGHT TO REQUIRE SALE OF MINORITY
SHAREHOLDERS' SHARES. Notwithstanding the other provisions of this Section 3,
if Nextel and its Affiliates seek to effect a transaction involving a bona fide
sale of all of the outstanding Shares, including their entire interest in the
Company, to an unrelated third party or parties (a "BUYER"), whether by sale of
shares, sale of all or substantially all assets, merger or otherwise (a
"SALE"), all of the Minority Shareholders will, upon notice from Nextel after
compliance with the provisions of this Section 3.4, take all commercially
reasonable actions required to assist in effecting such Sale, including,
without limitation, (i) Transferring or agreeing to
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Transfer all, but not less than all, the Shares owned by them at a price equal
to that at which Nextel is Transferring Shares and otherwise on identical terms
and (ii) voting in favor of a transaction that results in such a Transfer. In
exercising its drag-along rights, Nextel will comply with its fiduciary duties
under Peruvian law as the majority shareholder of the Company and will ensure
that the Directors designated by it comply with their fiduciary duties under
Peruvian law.
(b) PROCEDURE. Nextel shall give written notice
to the Board and the Minority Shareholders of Nextel's intent to effect a Sale.
If the Company or Nextel becomes aware of an unsolicited proposal to purchase
all of the outstanding Shares that the Company or Nextel believes may be
acceptable to the Board and the Shareholders or if the Company or if Nextel
intends to solicit such a proposal, then the Company or Nextel, as the case may
be, shall promptly provide notice to the Board of such event and discuss such
event with the Board. Nextel may for a period beginning ten days after such
notice and ending 180 days after such notice seek to effect a Sale of the
Company to a Buyer. If such Sale shall not have closed within such 170-day
period (unless closing is delayed due to the need for required governmental or
regulatory approval), any proposed Transfer shall again be subject to all the
Transfer restrictions set forth in this Section 3.
3.5 NO OTHER TRANSFER EFFECTIVE. Except as provided in
this Section 3, no Transfer of any right, title or interest in the Shares shall
be effective, and the Company shall not record or recognize any such Transfer,
until there has been compliance with the provisions of this Agreement. If no
Offer or Tag-Along Offer is made as herein required, the Shareholders may
nevertheless exercise their rights hereunder as to the Shares subject to any
proposed Transfer, and they may do so at any time, including after the
purported Transfer of the Shares, prior to six months following such
Shareholder's obtaining knowledge of the defect in such purported Transfer.
3.6 TRANSFER OF CAPITAL STOCK OF SUBSIDIARIES . The
Company shall not Transfer or permit the Transfer of any shares of capital
stock of any of its subsidiaries to any Person other than the Company or any of
its wholly owned subsidiaries without the prior written consent of each holder
of 15% or more of the Company's capital stock.
4. PREEMPTIVE RIGHTS. Each Shareholder shall have preemptive
rights with respect to the subscription of capital increases by the Company as
provided by Peruvian law in effect on the date of this Agreement. Except for a
failure by a Shareholder to make a capital contribution as required by Section
5, failure by a Shareholder to exercise its preemptive rights shall not
constitute an event of default under or a breach of this Agreement, but shall
result in dilution of the ownership percentage of such Shareholder. Except for
a failure by a Shareholder to make a capital contribution as required by
Section 5, failure by a Shareholder to exercise its preemptive rights with
respect to an issuance of securities shall not act as a waiver of such
Shareholder's right to exercise its preemptive rights for subsequent issuances.
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5. CAPITAL CONTRIBUTIONS.
5.1 NOTICE OF CAPITAL CONTRIBUTIONS. Each Shareholder
shall make cash capital contributions in the form of equity to the Company on
or before any date (a "PAYMENT DATE") upon written notice delivered to such
Shareholder at least ten (10) Business Days prior to such Payment Date;
provided that (a) the Company shall not make any capital calls until the
initial capital of the Company provided by Nextel shall have been used to meet
the capital requirements of the Company and (b) Nextel may make its capital
contribution (other than the initial capital contribution) in the form of
assets (valued at the invoiced cost plus direct associated out-of-pocket
expenses incurred by Nextel to acquire such assets) if the acquisition of such
assets by the Company has been provided for in the Business Plan or has
otherwise been approved by the Board (including at least one Director
designated for election by a Minority Shareholder). Such notice shall set
forth the aggregate amount of the capital contributions required as of such
date, as well as each Shareholder's required capital contribution. Each
Shareholder's capital contribution shall be made pro rata based on such
Shareholder's percentage ownership of the Company on the date of such notice.
5.2 TAXES. Each Shareholder's capital contribution (and
each component thereof) shall be made free of all withholding with respect to
taxes of any nature, and if any Shareholder is required by applicable law to
make any such withholding with respect to any such contribution, such
Shareholder's capital contribution shall be increased, if necessary, so that
after making all required withholdings, the Company shall receive an amount
equal to the amount it would have received had such withholdings not been made.
5.3 FAILURE TO MAKE CAPITAL CONTRIBUTIONS. If any
Shareholder fails to make its required capital contribution by the Payment Date
(a "DEFAULTING SHAREHOLDER"), then:
(a) DILUTION. Subject to Section 5.5, such
Shareholder's interests in dividends and other cash or noncash distributions by
the Company and in voting shall be diluted and shall thereafter be
proportionate to its respective shareholdings in the Company, based on the
paid-in capital contributed by the Shareholders to the Company (as set forth
below).
(b) RESIGNATION OF BOARD MEMBERS. The Director
(or Directors) nominated by such Shareholder, if any, shall resign and the
Shareholders shall elect a new Director (or Directors), designated for election
by vote of a majority of the Shares owned by the Minority Shareholders who are
not Defaulting Shareholders, to fill the resulting vacancy (or vacancies).
(c) CAPITAL CONTRIBUTION BY NONDEFAULTING
SHAREHOLDERS. The General Manager of the Company shall promptly notify the
other Shareholders (the "NONDEFAULTING SHAREHOLDERS") no later than the day
following the Payment Date (the "NOTICE") of the failure by the Defaulting
Shareholder to make the required capital contribution and of the right of the
Nondefaulting Shareholders to elect to make the capital
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contribution and to exercise their call rights. Any Shareholder may within
eight days following delivery of the Notice notify the Company of its
willingness to make all or any part of a capital contribution required to be
made by the Defaulting Shareholder (each, an "EXERCISING SHAREHOLDER"). To the
extent more than one Exercising Shareholder shall have elected to make all or
any part of such capital contribution, each Exercising Shareholder's pro rata
portion of such capital contribution is that percentage of such capital
contribution equal to the number of Shares held by such Exercising Shareholder
divided by the aggregate number of Shares held by such Exercising Shareholder
and all other Exercising Shareholders. If all the other Shareholders do not
subscribe and pay for their pro rata portion of the Shares to be subscribed by
the Defaulting Shareholder within such eight days following delivery of the
Notice, the Company shall be entitled to offer to a third party the right to
subscribe to any Shares not issued to Shareholders during a period not to
exceed six months from the Payment Date.
(d) CALL ON DEFAULTING SHAREHOLDER. In
accordance with Section 5.4 and subject to Section 5.5, the Nondefaulting
Shareholders and the Company shall have the right (the "CALL RIGHT") to
purchase and redeem, respectively, any or all of the Shares owned by the
Defaulting Shareholder at the following price (the "CALL PRICE"):
(i) if the Payment Date was prior to the
second anniversary of the date hereof, the Call Price shall be equal to the
total paid-in capital of the Defaulting Shareholder; and
(ii) if the Payment Date was on or after
the second anniversary of the date hereof, the Call Price shall be equal to 75%
of the Appraised Fair Market Value of the Shares that are owned by the
Defaulting Shareholder as of the Payment Date.
For purposes of this Agreement, the total
paid-in capital of Motorola for the Shares owned by it as of the date hereof
shall be $7,960,000, the total paid-in capital of ▇▇▇▇▇▇▇▇▇▇ for the Shares
owned by him as of the date hereof shall be $3,980,000, and the total paid-in
capital of Nextel for the Shares owned by it as of the date hereof shall be
$27,860,000.
5.4 CALL PROCEDURES.
(a) If the Nondefaulting Shareholders shall
exercise their rights pursuant to Section 5.3(d), the Nondefaulting
Shareholders shall be entitled to purchase any or all of the Shares owned by
the Defaulting Shareholder (each Nondefaulting Shareholder electing to purchase
the Defaulting Shareholder's Shares shall be referred to as a "CALLING
SHAREHOLDER"). To the extent more than one Calling Shareholder elects to
purchase such Shares, each Calling Shareholder's pro rata portion of such
Defaulting Shareholder's Shares is that percentage of such Shares equal to the
number of Shares held by such Calling Shareholder divided by the aggregate
number of Shares held by such Calling Shareholder and all other Calling
Shareholders; provided that if the Calling Shareholders do not elect to
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purchase all of the Defaulting Shareholder's Shares, the Company may elect to
redeem or purchase all remaining such Shares.
(b) Each Nondefaulting Shareholders desiring to
exercise its Call Right must give written notice to the General Manager of the
Company within 10 days of delivery of the Notice of the maximum number of
Shares that it is willing to purchase from the Defaulting Shareholder. Failure
by a Nondefaulting Shareholder to deliver its notice within 10 days following
delivery of the Notice shall constitute a waiver by such Nondefaulting
Shareholder of its Call Right. If any Calling Shareholder shall fail to
consummate the exercise of its Call Right within 30 days of the notice required
by the first sentence of this paragraph, the remaining Calling Shareholders
shall have an additional 10 days from the expiration of such 30-day period to
complete the purchase of all Shares owned by the Defaulting Shareholder, pro
rata in accordance with Section 5.4(a).
(c) A Nondefaulting Shareholder shall not be
deemed to be a Defaulting Shareholder or otherwise subject to Section 5.3(d)
because it does not elect to exercise its Call Right.
(d) A Defaulting Shareholder whose Shares have
been acquired following the exercise of the Call Right shall not be subject to
any other claim or remedy from another Shareholder as a result of such
Defaulting Shareholder's failure to make a required Shareholder Contribution.
(e) If payment is required under any guarantees
provided by the Defaulting Shareholder pursuant to Section 5.6, the Calling
Shareholders shall severally, based on the number of Shares acquired by each
Calling Shareholder, indemnify the Defaulting Shareholder for up to 50% of any
amounts paid by the Defaulting Shareholder under such guarantees.
5.5 EXCEPTIONS FROM CALL. If the Free Cash Flow during
any of the following calendar years is less than the amount for such year set
forth in the table below, then during such year none of the Shareholders shall
be subject to any of the remedies provided to the other Shareholders in Section
5.3(d) for its failure to make capital contributions.
1998 (US$64,209,597)
1999 (US$38,982,207)
2000 (US$1,549,328)
5.6 GUARANTEES; PLEDGES OF SHARES. If Nextel or the
Company or any of its subsidiaries shall enter into a financing arrangement for
the exclusive benefit of the Company or any of its subsidiaries, then (a) each
Shareholder and each of their Affiliates shall take all actions necessary as
may be required to permit the Company to obtain such financing and, if required
by the lender, shall guarantee a portion of such financing, pro rata in
accordance with such Shareholder's Share ownership of the Company, such
guarantee to be reasonably satisfactory in all respects to the lender, and (b)
if Nextel and its Affiliates
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shall have agreed to pledge the Shares owned by them, each Minority Shareholder
and each of their Affiliates shall simultaneously pledge the Shares owned by it
on the same terms and conditions as Nextel and its Affiliates and, if
necessary, execute a power of attorney over such Shares in favor of the lender
or such other entity as the lender may designate in order to comply with the
requirements for the delivery of the Shares by the debtor to the lender or such
other entity as the lender may designate in guarantee of such financing
arrangement. Any pledge by a Shareholder pursuant to this Section 5.6 shall be
senior to and have priority over any pledge of Shares by one Shareholder to
another Shareholder, and each Shareholder agrees to execute any intercreditor
or subordination agreement required to effect such subordination.
6. CALL BY SHAREHOLDERS AND THE COMPANY UPON BREACH.
(a) If any Shareholder (a "BREACHING
SHAREHOLDER") materially breaches any provision of this Agreement, the Company
or any other Shareholder (each a "NONBREACHING SHAREHOLDERS") may send written
notice to each of the parties hereto of such breach (the "BREACH NOTICE"). If
the Breaching Shareholder does not cure such breach within 30 days of delivery
of the Breach Notice (the earlier of the expiration of such 30-day period and
the date the Breaching Shareholder notifies the Company it will not cure such
breach shall be referred to as the "CONFIRMATION DATE"), the Nonbreaching
Shareholders shall have the right to purchase any or all Shares owned by the
Breaching Shareholder (the "BREACHING SHAREHOLDER'S SHARES") at the following
price:
(i) if the date of breach was prior to
the second anniversary of the date hereof, the price shall be equal to the
total paid-in capital of the Breaching Shareholder; and
(ii) if the date of breach was on or
after the second anniversary of the date hereof, the price shall be equal to
75% of the Appraised Fair Market Value.
(b) Each Nonbreaching Shareholder shall be
entitled to purchase all or less than all of the Breaching Shareholder's
Shares. To the extent that more than one Nonbreaching Shareholder shall have
elected to purchase the Breaching Shares, each such Nonbreaching Shareholder
may purchase up to its pro rata portion of such Breaching Shareholder's Shares
as determined in accordance with this Section 6(b). Each Nonbreaching
Shareholder's pro rata portion of the Breaching Shareholder's Shares is that
proportion of the Breaching Shareholder's Shares as the number of Shares held
by such Nonbreaching Shareholder bears to the aggregate number of Shares held
by such Nonbreaching Shareholder and all other Nonbreaching Shareholders who
have exercised their right to purchase Breaching Shareholder's Shares under
this Section 6. If the Nonbreaching Shareholders shall not have offered to
purchase all the Breaching Shareholder's Shares within 15 days of the
Confirmation Date, the Company shall have ten days to elect to redeem or
purchase any remaining Breaching Shareholder's Shares. The
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closing(s) of the sales of Breaching Shareholder's Shares under this Section 6
shall take place within 30 days of the Confirmation Date.
7. ACQUISITION OF ESMR INFRASTRUCTURE EQUIPMENT. If the Company
intends to acquire infrastructure equipment, whether by purchase or lease, and
Motorola and its Affiliates in the aggregate own at least 19% of the Shares,
the Company will take the following actions:
(a) The Company will acquire ESMR infrastructure
equipment (excluding handsets or any analog SMR equipment) (the "ESMR
EQUIPMENT") from Motorola, Inc. or its Affiliates, provided such equipment is
competitive in terms of technology, price and delivery, taken as a whole, as
determined by the Board in accordance with this Section 7. The Director(s)
designated by Motorola may participate in any Board meetings at which such ESMR
Equipment acquisition is considered; provided, however, that any such
Director(s) will leave such meeting during discussion of such acquisition if
requested by a majority of the remaining Directors.
(b) The Board, by the vote of at least a majority of the
Directors (excluding the Director designated for election by Motorola), shall
decide whether the ESMR Equipment offered by Motorola, Inc. or its Affiliates
satisfies the requirements set forth in Section 7(a). If the Board does not
determine in the manner set forth in this Section 7(b) that the ESMR Equipment
offered by Motorola, Inc. or its Affiliates satisfies such requirements, the
Board shall, by the vote of a majority of the Directors, appoint a third party
to resolve whether the proposal submitted by Motorola, Inc. or its Affiliates
for the supply of the ESMR Equipment satisfies such requirements, which third
party shall be an internationally recognized engineering firm generally
regarded as experienced with respect to matters involving telecommunications
infrastructure and shall have no material relationship with any Shareholder or
any competitors of Motorola or its Affiliates which manufacture
telecommunications infrastructure equipment.
(c) If (i) ESMR Equipment is acquired by the Company from
a Person other than from Motorola, Inc. or its Affiliates and (ii) the third
party referred to in Section 7(b) above determines that the ESMR Equipment
offered by Motorola, Inc. or its Affiliates satisfies the requirements set
forth in Section 7(a), Motorola shall have the right to cause the Company to
acquire the Shares (including any shareholder loans by Motorola and its
Affiliates, which shall be converted into Shares at the Appraised Fair Market
Value) then held by Motorola and its Affiliates at the Appraised Fair Market
Value of such Shares as of the date of delivery of notice to the Company. Each
Shareholder hereby agrees to approve any action required to permit the Company
to carry out its obligations pursuant to this Section 7(c). If Motorola elects
to exercise such right, Motorola shall give written notice (the "MOTOROLA
NOTICE") to the Company no later than 30 days following the date of the
decision that the ESMR Equipment satisfied the requirements set forth in
Section 7(a). The transfer of such Shares and payment of the sales price shall
take place no later than 60 days from the date of the Motorola Notice.
Following receipt of the Motorola Notice by the Company, the Company and the
Shareholders shall use their best efforts to cause any
PERU SHAREHOLDERS AGREEMENT
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guarantees previously provided by Motorola or its Affiliates pursuant to
Section 5.6 hereof to be released. If such guarantees are not so released, the
Company hereby agrees that if payment is required pursuant to such guarantees,
the Company shall indemnify Motorola and its Affiliates for any amounts
actually paid by Motorola and its Affiliates under such guarantees. If
Motorola shall not have delivered the Motorola Notice within the time period
specified in this Section 7(c), Motorola will be deemed to have waived its
right pursuant to this Section 7(c) to have the Company acquire the Shares held
by Motorola and its Affiliates, but such right shall continue for all future
purchases.
8. COMPLIANCE WITH LAWS. Each Shareholder represents, warrants
and covenants that neither it nor any director, officer, agent, employee or
other Person acting on its behalf or on behalf of any Affiliate of it,
including in each case the Company, in connection with activities of the
Company (a) has been or will be involved in the offering, paying or giving of
anything of value, either directly or indirectly, to a government official,
political party or candidate for political office intended to influence such
Person in the discharge of his, her or its official duties or (b) has engaged
or will engage in any such unlawful conduct during the time of carrying out its
respective duties. The Company shall maintain accounting books and records in
reasonable detail and institute and maintain internal controls to ensure that
such books and records accurately reflect corporate transactions and the
disposition of assets. In addition, subject to the approval of all
Shareholders, the Company shall adopt a code of conduct, using Motorola's code
of conduct as a reference.
9. NONCOMPETITION. Each Shareholder agrees that, until one year
following termination of this Agreement with respect to such Shareholder,
neither such Shareholder nor any Affiliate of such Shareholder (except that in
the case of Nextel, only Persons directly or indirectly Controlled by Nextel
Communications, Inc. shall be deemed Affiliates of Nextel) shall in any way, by
action or inaction, directly or indirectly, for itself or for the benefit of
any other Person, own, manage, operate, join, Control or participate in the
ownership, management, operation or Control of any Person that competes with
the Company or any Affiliate thereof, or agrees to do any of the foregoing, in
the business of SMR or ESMR anywhere in Peru; provided that nothing contained
herein shall prevent any Shareholder or its Affiliates from selling or
financing the sale of equipment used in the business of SMR or ESMR in Peru to
third parties.
10. NII GUARANTEE. NII shall be responsible to the Shareholders
for all of Nextel's duties and obligations hereunder and hereby guarantees the
performance by Nextel of all of Nextel's duties and obligations hereunder. If
Nextel shall have defaulted in the payment when due of any amount required to
be paid by Nextel under this Agreement, and such default shall remain uncured
10 days following written notice by the Company or any other Shareholder, then
NII shall within five days after delivery of written notice by such other
Shareholder pay the amount not so paid.
PERU SHAREHOLDERS AGREEMENT
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11. CONFIDENTIALITY.
(a) DEFINITION OF CONFIDENTIAL INFORMATION.
"Confidential Information" means any oral, written, graphic or machine-readable
information including, but not limited to, that which relates to patents,
patent applications, research, product plans, products, developments,
inventions, processes, designs, drawings, engineering, formulae, markets,
software, hardware configuration, computer programs, cellular, SMR or ESMR
network design, algorithms, regulatory information, business plans, agreements
with third parties, services, customers, marketing or finances of the
disclosing party, which Confidential Information is designated in writing to be
confidential or proprietary, or if given orally, is confirmed in writing as
having been disclosed as confidential or proprietary within a reasonable time
(not to exceed thirty (30) days) after the oral disclosure.
(b) NONDISCLOSURE OF CONFIDENTIAL INFORMATION.
(i) Each of the Company and the Shareholders
agree not to use any Confidential Information disclosed to it by any other
Shareholder or the Company for its own use or for any purpose other than in
connection with and for the benefit of the business of the Company. No
Shareholder shall disclose or permit disclosure of any Confidential Information
of the other Shareholders or the Company to third parties or to employees of
the party receiving Confidential Information, other than directors, officers,
employees, consultants and agents who are required to have the information in
order to carry out the business of the Company. Each party agrees that it
shall take all reasonable measures to protect the secrecy of and avoid
disclosure or use of Confidential Information of the other parties in order to
prevent it from falling into the public domain or the possession of persons
other than those persons authorized under this Agreement to have any such
information. Such measures shall include, but not be limited to, the highest
degree of care that the receiving party utilizes to protect its own
Confidential Information of a similar nature, which shall be no less than
reasonable care. Each party agrees to notify the other parties in writing of
any actual or suspected misuse, misappropriation or unauthorized disclosure of
Confidential Information of the disclosing party which may come to its
attention.
(ii) Exceptions. Notwithstanding the above,
neither party shall have liability to the other with regard to any Confidential
Information of the other which the receiving party can prove:
(A) was in the public domain at the time
it was disclosed or has entered the public domain through no fault of the
receiving party;
(B) was known to the receiving party,
without restriction, at the time of disclosure, as demonstrated by files in
existence at the time of disclosure;
(C) is disclosed with the prior written
approval of the disclosing party;
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-▇▇-
▇▇
(▇) becomes known to the receiving
party, without restriction, from a source other than the disclosing party
without breach of this Agreement by the receiving party and otherwise not in
violation of the disclosing party's rights; or
(E) is disclosed pursuant to the order
or requirement of a court, administrative agency, or other governmental body;
provided, however, that the receiving party shall provide prompt notice of such
court order or requirement to the disclosing party to enable the disclosing
party to seek a protective order or otherwise prevent or restrict such
disclosure.
(c) RETURN OF MATERIALS. Any materials or documents that
have been furnished by one party to any other party hereto in connection with
the Company shall be promptly returned by the receiving party, accompanied by
all copies of such documentation, within ten (10) days after (a) such party is
no longer a Shareholder or (b) the written request of the disclosing party.
(d) TERM. The foregoing commitments of each party shall
survive any termination of the relationship between the parties, and shall
continue for a period terminating one year following the date such party,
including its Affiliates, is no longer a Shareholder.
12. TERMINATION.
(a) This Agreement shall lapse and be of no further force
or effect upon the first of the following to occur:
(i) MERGER, SALE OR LIQUIDATION. The merger of
the Company with any other company as a result of which securities representing
all or substantially all of the voting power of the Company are held by Persons
that had less than a majority interest, directly or indirectly, in such
securities prior to such merger, or of the sale of all or substantially all of
the assets of the Company, or of its liquidation, or the appointment by a
creditor's assembly of (i) a new administration which supersedes the
administration appointed by the Shareholders and takes Control of the Company,
or (ii) the appointment of an entity (or individual) which shall be in charge
of its liquidation pursued under Peruvian insolvency laws (which is currently
regulated by Legislative Decree 845, Ley de Reorganizacion Patrimonial).
(ii) AGREEMENT OF SHAREHOLDERS. The written
agreement of holders of not less than 99% of the Shares to the termination of
this Agreement.
(iii) INITIAL PUBLIC OFFERING. An initial offering
of Shares to the public in Peru or the United States after the consummation of
which at least 50% of the then outstanding Shares are held by the public.
PERU SHAREHOLDERS AGREEMENT
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(b) With respect to any individual Shareholder, this
Agreement shall lapse and be of no further force at such time as such
Shareholder and its Affiliates no longer own or control any Shares.
13. REGULATORY COOPERATION.
The parties hereto will cooperate to take any actions necessary for
the Company to obtain any regulatory approval or filings required or desirable
for the implementation of the iDEN service.
14. MISCELLANEOUS.
14.1 SPECIFIC ENFORCEMENT. Each Shareholder expressly
agrees that the Company and the other Shareholders will be irreparably damaged
if this Agreement is not specifically enforced. Upon a breach or threatened
breach of the terms, covenants and/or conditions of this Agreement by any
Shareholder, each of the Company and the other Shareholders shall, in addition
to all other remedies, be entitled to a temporary or permanent injunction,
without showing any actual damage, and/or a decree for specific performance or
other equitable relief to prevent violation of any provision of this Agreement.
14.2 DELIVERY OF INFORMATION. In addition to any
mandatory shareholders' information rights provided by Peruvian law, the
Company shall deliver to each Shareholder holding at least 5% of the
outstanding Shares:
(a) as soon as practicable, but in any event
within 80 days after the end of each fiscal year of the Company, an income
statement for such fiscal year, a balance sheet of the Company as of the end of
such year and a statement of cash flows for such year, such financial
statements to be prepared in two forms, one in accordance with Peruvian
generally accepted accounting principles ("PERUVIAN GAAP") and one in
accordance with U.S. GAAP, audited by independent certified public accountants
of internationally recognized standing selected by the Company, and
(b) as soon as practicable, but in any event
within 60 days after the end of each of the first three fiscal quarters, an
income statement for such fiscal quarter, a balance sheet of the Company as of
the end of such quarter and a statement of cash flows for such quarter, such
financial statements to be prepared in two forms, one in accordance with
Peruvian GAAP and one in accordance with U.S. GAAP, and any other operating
information provided to the Board.
14.3 INSPECTION. In addition to any mandatory
shareholders' information rights provided by Peruvian law, the Company shall
permit each Shareholder owning at least 19% of the Shares at such Shareholder's
expense to visit and inspect the Company's properties, to audit its books of
accounts and records and to make copies and extracts therefrom, and to discuss
the Company's business prospects, affairs, finances and accounts with its
officers, all at such reasonable times as may be requested by such Shareholder
and for purposes reasonably related to the business of the Company, but no more
than once in
PERU SHAREHOLDERS AGREEMENT
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any fiscal year and only so long as such examination does not impose any undue
burden or expense on the Company.
14.4 ENVIRONMENTAL POLICY. The Company shall adopt an
environmental policy which complies with applicable Peruvian laws.
14.5 EMPLOYMENT POLICIES. The Company shall use
commercially reasonable efforts to deal directly with its employees, without
any intermediary parties, and will use commercially reasonable efforts to adopt
such personnel policies and practices as appropriate in order to reasonably
achieve such results. The Company shall seek to develop personnel practices
that fairly reward employees for services rendered in a manner consistent with
common business practice in Peru.
14.6 QUALITY REPORTING. The Company shall employ
commercially reasonable efforts to adopt quality reporting processes consistent
with Motorola's practices in its Worldwide Network Services Division joint
ventures.
14.7 NOTICES. Notices given hereunder shall be deemed to
have been duly given on the date of personal delivery, on the date of facsimile
transmittal (provided the address or confirms receipt of any facsimile by the
addressee), three days after delivery by overnight courier or three days after
mailing if mailed by certified or registered mail, return receipt requested,
postage prepaid, to the party being notified at his, her or its address
specified on the applicable signature page or such other address of which the
addressee may subsequently notify the other parties in writing.
14.8 ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS. This
Agreement, the Stock Purchase Agreement, the Registration Rights Agreement, the
Usufruct Agreements and the Pledge Agreements and their respective schedules
and exhibits constitute the entire and only agreement of the parties with
respect to the subject matter hereof, and neither this Agreement nor any
provision hereof may be waived, modified, amended or terminated except by a
written agreement signed by the Company and holders of 99% of the Shares. No
waiver of any breach or default hereunder shall be considered valid unless in
writing, and no such waiver shall be deemed a waiver of any subsequent breach
or default of the same or similar nature.
14.9 GOVERNING LAW; SUCCESSORS AND ASSIGNS. This
Agreement shall for all purposes be governed by and construed in accordance
with the laws of the State of Delaware, U.S.A. and shall be binding upon the
heirs, personal representatives, executors, administrators, successors and
permitted assigns of the parties.
PERU SHAREHOLDERS AGREEMENT
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14.10 DISPUTE RESOLUTION.
(a) ARBITRATION. All disputes arising out of or
in connection with this Agreement or the performance hereof shall be resolved
by submission to binding arbitration under the Rules for Arbitration of the
International Chamber of Commerce (the "ICC").
(b) NOTICE OF DEMAND FOR ARBITRATION. Notice of
demand for arbitration shall be filed in writing with the other party and with
the ICC. In no event shall the demand for arbitration be made after the date
when the applicable statute of limitations would bar institution of a legal or
equitable proceeding based on such claim, dispute or other matter in question.
(c) ARBITRATION PROCEEDINGS. Unless the parties
agree otherwise, the arbitration hearing shall be conducted in Miami, Florida,
United States, in the English language, before a panel of three arbitrators,
one selected by each of the Shareholders involved in the arbitration proceeding
and the third selected by mutual agreement of such parties, and failing their
agreement, pursuant to the rules of the ICC. The arbitrators shall not be
empowered to grant exemplary or punitive damages. Upon the request of either
party, the arbitrators' written decision shall include an explanation of the
factual and legal grounds for the decision.
(d) MOTIONS TO RECONSIDER. Within fifteen days
of receipt of the arbitrators' decision, either party may file with the
arbitrators and serve on the other party a written motion to reconsider. The
arbitrators may request the non-moving or responding party to file a written
response within ten days after receipt of that request, and the arbitrators
thereupon will reconsider the issues raised by the motion and response (if any)
and either confirm or alter their decision, which will then be final, binding
and conclusive upon the parties. The costs of such a motion for
reconsideration, including attorneys' fees, will be awarded against the moving
party if it does not prevail.
(e) FINALITY. The decision rendered by the
arbitrators shall be final, and judgment may be entered upon it in accordance
with applicable law in any court having jurisdiction thereof.
(f) CONSOLIDATION, JOINDER AND THIRD PARTY CLAIM.
Any arbitration arising out of or related to this Agreement or any other
agreements between the parties or their Affiliates relating to the wireless
telecommunications business in Peru may, upon demand of either party, include
by consolidation, joinder or third-party claims any other party involved in a
common question of law or fact whose presence is required if complete relief is
to be accorded in arbitration or who is alleged to be liable to a party for all
or part of a claim in the arbitration. Each party agrees that the other
parties may join it as a party to any litigation or arbitration involving the
alleged fault of such party.
14.11 HEADINGS. The headings of the sections of this
Agreement are for convenience of reference only and shall not affect the
interpretation of this Agreement.
PERU SHAREHOLDERS AGREEMENT
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14.12 COUNTERPARTS. This Agreement may be executed in one
or more counterparts, which together shall constitute one and the same
instrument. Facsimile signatures shall have the same legal effect as original
signatures.
14.13 SEVERABILITY. If any provision of this Agreement
shall be held to be illegal, invalid or unenforceable, such illegality,
invalidity or unenforceability shall attach only to such provision and shall
not in any manner affect or render illegal, invalid or unenforceable any other
provision of this Agreement, and this Agreement shall be carried out as if any
such illegal, invalid or unenforceable provision were not contained herein.
14.14 NEXTEL'S INTELLECTUAL PROPERTY. The Parties
acknowledge that the name "Nextel" is or will be a registered trade name and
trademark of Nextel Communications, Inc. If Nextel ceases to be a Shareholder,
the Company shall immediately change its name to another name that does not
include "Nextel" or any modification thereof.
14.15 GOVERNMENT FILINGS. From time to time, the Company
shall execute and cause to be filed, and the Shareholders agree to execute,
such certificates, filings and documents in such jurisdictions as may be
necessary or appropriate in connection with the conduct of the Business.
[Signature page follows]
PERU SHAREHOLDERS AGREEMENT
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IN WITNESS WHEREOF, this Agreement has been executed as of the date
and year first above written.
THE COMPANY:
VALORCOM S.A.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Its DIRECTOR
-----------------------------------------
Address: c/o Nextel International, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇
NEXTEL INTERNATIONAL, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Its VICE PRESIDENT
-----------------------------------------
Address: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇
THE SHAREHOLDERS:
NEXTEL INTERNATIONAL (PERU), LLC
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Its VICE PRESIDENT
-----------------------------------------
Address: c/o Nextel International, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇
MOTOROLA INTERNATIONAL DEVELOPMENT CORPORATION
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Its ATTORNEY-IN-FACT
-----------------------------------------
Address: c/o Motorola, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇
[SIGNATURE PAGE TO SHAREHOLDERS AGREEMENT]
31
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ COZ
-----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ COZ
Address: c/o Mastercom S.A.
▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇
Facsimile number: 011-51-1-442-9483
[SIGNATURE PAGE TO SHAREHOLDERS AGREEMENT]
32
Exhibit I
SCHEDULE OF SHAREHOLDERS
SHAREHOLDER PERCENTAGE
----------- ----------
Nextel International (Peru), LLC 70.05%
Motorola International Development Corporation 19.95%
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Coz 10%