EXHIBIT 4.1
Portions of this Exhibit have been omitted and the information omitted has been
separately filed with the Commission with a request for confidential treatment.
The locations of the omitted information have been indicated by [ ].
<PAGE>
-----------------------------------
SHAREHOLDERS AGREEMENT
-----------------------------------
among
BELL CANADA INTERNATIONAL
INVESTMENTS LIMITED,
AM LATIN AMERICA, LLC,
SBC INTERNATIONAL - BRAZIL HOLDING, LTD.,
and
TELECOM AMERICAS LTD.
Dated as of November 16, 2000
================================================================================
<PAGE>
<TABLE>
<CAPTION>
ARTICLE I
DEFINITIONS
<S> <C>
Section 1S.01. Certain Defined Terms.............................................................2
ARTICLE II
ORGANIZATIONAL DOCUMENTS; REPRESENTATIONS AND WARRANTIES
Section 2.01. Memorandum of Association and Bye-Laws...........................................13
Section 2.02. Representations and Warranties of the Shareholders and Sponsor Party.............13
Section 2.03. Representations and Warranties of BCI Investments and BCI........................14
Section 2.04. Representation and Warranty of SBCI Brazil Holding and SBCI......................15
ARTICLE III
CORPORATE GOVERNANCE
Section 3.01. Corporate Purpose; Powers of the Board...........................................15
Section 3.02. Number of Directors..............................................................15
Section 3.03. Composition of Board and Chairman of the Board...................................15
Section 3.04. Subsequent Nominations...........................................................16
Section 3.05. Removal of Directors.............................................................18
Section 3.06. Vacancies........................................................................19
Section 3.07. Covenant to Vote.................................................................20
Section 3.08. Action by the Board..............................................................20
Section 3.09. Action by Shareholders...........................................................23
Section 3.10. Business Plan....................................................................25
Section 3.11. Management.......................................................................25
Section 3.12. Removal of Senior Officers.......................................................25
Section 3.13. Transferability of Certain Governance Rights.....................................25
ARTICLE IV
RESTRICTIONS ON TRANSFER
Section 4.01. General Restriction..............................................................27
Section 4.02. Legends..........................................................................27
Section 4.03. Rights of First Offer............................................................28
<PAGE>
Section 4.04. Right to Participate in Certain Dispositions.....................................30
Section 4.05. Permitted Transfers..............................................................33
Section 4.06. Prospective Transferees; Guarantee and Share Retention Agreement.................33
Section 4.07. Improper Sale or Encumbrance.....................................................34
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.01. Financial Statements.............................................................34
Section 5.02. Access to Information............................................................34
Section 5.03. Confidential Information.........................................................34
Section 5.04. Certain Issuances of New Securities..............................................35
Section 5.05. Referral of Opportunities........................................................35
Section 5.06. Affiliate Transactions...........................................................38
Section 5.07. Consolidation of the Company and BCI.............................................38
Section 5.08. Registration Rights..............................................................42
Section 5.09. Voting Structure.................................................................42
Section 5.10. Additional Capital Contributions.................................................42
Section 5.11. Unwind...........................................................................42
Section 5.12. Future Acquisitions..............................................................43
Section 5.13. Default..........................................................................43
Section 5.14. Additional Tax Matters...........................................................44
Section 5.15. BCE and SBCI Parent Guarantee and Share Retention Agreement......................45
Section 5.16. Subnewco4........................................................................46
Section 5.17. Compliance with ANATEL Written Confirmation......................................46
Section 5.18. Reserve of Promissory Notes......................................................46
ARTICLE VI
MISCELLANEOUS
Section 6.01. Conflict with Memorandum of Association or Bye-Laws..............................47
Section 6.02. Expenses.........................................................................47
Section 6.03. Notices..........................................................................47
Section 6.04. Headings.........................................................................51
Section 6.05. Severability.....................................................................51
Section 6.06. Entire Agreement.................................................................51
Section 6.07. Assignment.......................................................................51
Section 6.08. No Third Party Beneficiaries.....................................................51
Section 6.09. Amendment........................................................................51
<PAGE>
Section 6.10. Governing Law....................................................................52
Section 6.11. Counterparts.....................................................................52
Section 6.12. Specific Performance.............................................................52
Section 6.13. Waiver of Jury Trial.............................................................53
Section 6.14. Dispute Resolution...............................................................53
Section 6.15. Arbitration......................................................................53
Section 6.16. Termination......................................................................55
Section 6.17. Minimum Interests................................................................55
Section 6.18. Aggregating Interests............................................................55
</TABLE>
<TABLE>
<CAPTION>
SCHEDULES
<S> <C>
Schedule A - Initial Capitalization
Schedule 2.03(a) - Other Registration Rights Agreements
Schedule 2.03(b) - Equity Interests of BCI Investments in Subnewco1, Subnewco2
and Subnewco3
Schedule 2.04 - Equity Interests of SBCI Brazil Holding in
Subnewco4
Schedule 3.13 - Transferees Requiring Consent
Schedule 5.11 - Unwind Procedures Schedule
Schedule 5.13 - List of Investment Banks
EXHIBITS
Exhibit A - Memorandum of Association of the Company and each of the Subnewcos
Exhibit B - Amended and Restated Bye-Laws of the Company and Amended and Restated Bye-Laws or
Articles of Association, as the case may be, of each of the Subnewcos
Exhibit C - Initial Business Plan of the Company
Exhibit D - Form of Guarantee and Share Retention Agreement
Exhibit E - Form of Accession Certificate
Exhibit F - Form of Registration Rights Agreement
Exhibit G - Form of BCE Indemnity Agreement
Exhibit H - Form of Legal Opinion
Exhibit I - Consents and Approvals
Exhibit J - Initial Structure
Exhibit K - Alternate Tax Structures
</TABLE>
<PAGE>
SHAREHOLDERS AGREEMENT, dated as of November 16, 2000, among
BELL CANADA INTERNATIONAL INVESTMENTS LIMITED, a corporation incorporated under
the laws of the British Virgin Islands ("BCI Investments"), AM LATIN AMERICA,
LLC, a limited liability company organized under the laws of Delaware ("AM Latin
America"), SBC INTERNATIONAL - BRAZIL HOLDING, LTD., a company incorporated
under the laws of the Cayman Islands ("SBCI Brazil Holding" and, together with
BCI Investments and AM Latin America, the "Initial Shareholders"), and TELECOM
AMERICAS LTD., a company incorporated under the laws of Bermuda (the "Company").
WHEREAS, each of the Initial Shareholders through its
investments in the Contributed Operating Companies (as defined in the Amended
and Restated Joint Venture Agreement (as defined below)), is engaged in the
operation of mobile wireless ("Mobile Wireless"), competitive local exchange
carrier ("CLEC"), or other voice and data communications businesses in the
Communications Sector (as such term is defined in Section 1.01(a) below) in
South America and Central America, excluding the Caribbean and Mexico (such
territory, the "Joint Venture Area");
WHEREAS, subject to the express terms and limitations
contained in this Agreement, the Initial Shareholders intend that the Company
will be their principal vehicle for the pursuit of business opportunities in the
Joint Venture Area in the Communications Sector;
WHEREAS, the Company has issued 22,309.858 shares of voting
common stock, par value $1.00 per share (the "Common Stock") and 1,690.142
shares of preferred shares, Series C, par value US$1.00 per share (the "Series C
Shares");
WHEREAS, on the date hereof, the Initial Shareholders are
consummating the transactions contemplated by the Amended and Restated Joint
Venture Agreement, dated as of September 25, 2000 (the "Amended and Restated
Joint Venture Agreement"), among BCI, America Movil (as successor in interest to
Telmex) and SBCI (each, as defined in Section 1.01(a) below), pursuant to which,
among other things, the Company will issue such number of shares of its Common
Stock and Series C Shares to the Initial Shareholders, as set forth in Schedule
A attached hereto;
WHEREAS, pursuant to the Amended and Restated Joint Venture
Agreement, each of the Initial Shareholders will on the date hereof contribute
its direct and indirect interests in its Contributed Operating Companies (as
such term is defined in the Amended and Restated Joint Venture Agreement) as
indicated in Schedules 1.01(a) and (b) to the Amended and Restated Joint Venture
Agreement and, in the case of BCI Investments and AM Latin America, will
contribute capital and promissory notes to the Company in the amounts indicated
in Sections 2.02 and 2.03 of the Amended and Restated Joint Venture Agreement;
and
WHEREAS, as a condition to the consummation of the
transactions contemplated by the Amended and Restated Joint Venture Agreement
and in order to make certain agreements with respect to their respective rights
and obligations as holders of the Common Stock and Series C Shares, the parties
hereto have determined that it is in their best interests to enter into this
Agreement;
<PAGE>
NOW, THEREFORE, in consideration of the premises and the
mutual agreements and covenants hereinafter set forth, the parties hereto hereby
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms. (a) As used in this
Agreement, the following terms shall have the following meanings:
"Affiliate" means, with respect to any specified Person, any
other Person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by, or is under Common Control with, such specified
Person.
"Agreement" or "this Agreement" means this Shareholders
Agreement, dated as of November 16, 2000, and all amendments hereto made in
accordance with the provisions of Section 6.09.
"America Movil" means America Movil, S.A. de C.V., a sociedad
anonima de capital variable organized under the laws of Mexico.
"AM Latin America Director" means any member of the Board
nominated by AM Latin America in accordance with Sections 3.03 or 3.04.
"BCE" means BCE Inc., a corporation organized under the laws
of Canada.
"BCI" means Bell Canada International Inc., a corporation
incorporated under laws of Canada.
"BCI Director" means any member of the Board nominated by BCI
Investments in accordance with Section 3.03 or 3.04.
"BCI Proportion" means an amount equal to the number of Shares
owned by BCI Investments, divided by the total number of Outstanding Shares.
"Beneficial Owner" (including the terms "beneficially owns" or
"beneficially owned") has the meaning given to such term in Rule 13d-3 under the
Exchange Act.
"Board" means the Board of Directors of the Company.
"Business Day" means any day that is not a Saturday, a Sunday
or other day on which banks or stock exchanges are required or authorized by Law
to be closed in the City of New York, the City of Montreal, Canada, or the City
of Sao Paulo, Brazil.
"Capital Stock" means, with respect to any Person at any time,
any and all shares, interests, participations or other equivalents (however
designated, whether voting or non-voting) of capital stock, partnership
interests (whether general or limited), membership interests or equivalent
ownership interests in or issued by such Person.
P "Cash Equivalents" means (a) marketable direct obligations
issued or unconditionally guaranteed by the United States government or issued
by any agency thereof and backed by the full faith and credit of the United
States, in each case maturing within one year from the date of acquisition
thereof, (b) marketable direct obligations issued by any state of the United
States or any political subdivision or public instrumentality thereof maturing
within one year from the date of acquisition thereof and, at the time of
acquisition, having the highest rating obtainable from any of Standard & Poor's
Ratings Services, Moody's Investors Service, Inc. or Duff & Phelps Credit Rating
Co. or (c) commercial paper maturing not more than one year from the date of
issuance thereof and, at the time of acquisition, having the highest rating
obtainable from either Standard & Poor's Ratings Services or Moody's Investors
Service, Inc.
"Closing" has the meaning specified in Section 2.06 of the
Amended and Restated Joint Venture Agreement.
"Closing Date" has the meaning specified in Section 2.06 of
the Amended and Restated Joint Venture Agreement.
"Closing Price" means, with respect to any Marketable Security
or Cash Equivalent, the average of the daily closing prices of such security for
the thirty (30) Trading Day period ending on the relevant date of determination.
The closing price for each day shall be the last reported sale price regular way
or, in case no such reported sale takes place on such day, the average of the
reported closing bid and asked prices regular way, in either case, on The New
York Stock Exchange (the "NYSE"), or, if such security is not listed or admitted
to trading on the NYSE, on the American Stock Exchange, or if such security is
not listed or admitted to trading on the American Stock Exchange, the average of
the closing bid and asked prices of such security in the over-the-counter market
as reported on the NASDAQ system of the National Association of Securities
Dealers, Inc., or if such security is not so quoted, the average of the closing
bid and asked prices of such security in the over-the-counter market as
furnished by any nationally recognized New York Stock Exchange member firm
selected by the Company for such purposes.
"Commission" means the U.S. Securities and Exchange
Commission, and any successor commission or agency having similar powers.
"Communications Sector" means (a) telecommunications service,
(b) cable service, (c) wireless cable television service using local and
multichannel multipoint distribution services (also referred to as LMDS and
MMDS) or their equivalent, (d) internet access service, and (e) the following
information services (excluding the provision of the content and excluding
electronic publishing, transaction processing and application service providers
(ASP) or any business opportunity that represents the provision of electronic
commerce solutions, including value-added applications and electronic commerce
exchanges and ancillary services and the provision or use of data resulting from
such electronic commerce solutions): voicemail, electronic mail, facsimile
store-and-forward, interactive voice response, protocol processing, videotext
and audiotext communication services, internet navigation and gateway services,
IP telephony (including voice over IP) alarm monitoring and other security alarm
services and intranet management services; all as such terms set forth in
clauses (a) through (d) inclusive may be defined by the U.S. Communications Act
of 1934 and the regulations promulgated thereunder by the Federal Communications
Commission, as amended and in effect at the date hereof.
<PAGE>
"Company Subsidiary" or "Company Subsidiaries" means any
Subsidiary of the Company.
"Control" (including the terms "Controlled by" and "under
Common Control with"), with respect to the relationship between or among two or
more Persons, means the possession, directly or indirectly, or as trustee or
executor, of the power to direct or cause the direction of the affairs or
management of a Person, whether through the ownership of voting securities, as
trustee or executor, by contract or otherwise, including, without limitation,
the ownership, directly or indirectly, of securities having the power to elect a
majority of the board of directors or similar body governing the affairs of such
Person; provided, however, that a Person shall not be deemed to Control any
Person that is a publicly traded company if its ownership of voting securities
does not constitute a majority of the voting securities of such Person. For the
avoidance of doubt, for purposes of this definition no person shall be deemed to
Control Carso Global Telecom, S.A. de C.V. or Grupo Carso, S.A. de C.V. by
reason of the ownership of shares by one or more trusts or other entities for
the benefit of a group of natural persons.
"Danish Structure" means the alternate tax structure described
in Part I of Exhibit K.
"Defaulting Shareholder" means any Shareholder that, (i) has
failed to pay its Outstanding Obligations within ten (10) Business Days of when
due, (ii) is in material breach of its obligations under Section 3.07 or Article
IV or (iii) has willfully failed to refer a material business opportunity to the
Company in breach of its obligations under Section 5.05 and such material
business opportunity is pursued by such Shareholder or any Affiliate
independently of the Company; provided, however, that a Shareholder shall cease
to be a Defaulting Shareholder upon payment of such Outstanding Obligations or
upon the curing of any such material breach; and provided, further, that any
such material breach of Section 5.05 will be considered cured if such business
opportunity is referred to the Company in accordance with Section 5.05 on terms
no less favorable than those originally obtained by such Shareholder or its
Affiliate, as the case may be. Notwithstanding the foregoing, no Shareholder
shall be deemed to be a Defaulting Shareholder based on any material breach of
its obligations hereunder (other than a failure to pay or perform its
Outstanding Obligations in accordance with the terms of this Agreement and, if
applicable, the Promissory Notes and the Special Notes) unless such Shareholder
has received express written notice of such material breach from Shareholders
holding at least fifty percent (50%) of the Equity Interests of the Company, and
such Shareholder fails to cure such material breach within thirty (30) days
after receipt of such notice.
"Encumbrance" means any security interest, pledge, mortgage,
lien (including, without limitation, environmental and tax liens), charge,
encumbrance or adverse claim.
"Equity Interests" means, with respect to any Person, all of
the shares of Capital Stock of (or other ownership or profit interests in) such
Person, all of the warrants, options or other rights for the purchase or
acquisition from such Person of shares of Capital Stock of (or other ownership
or profit interests in) such Person, all of the securities (including loans,
notes, debentures or other debt instruments) convertible into or exchangeable
for shares of Capital Stock of (or other ownership or profit interests in) such
Person or warrants, rights or options for the purchase or acquisition from such
Person of such shares (or such other interests), and all of the other ownership
or profit interests in such Person (including, without limitation, partnership,
member or trust interests therein), whether voting or non-voting.
<PAGE>
"Exchange Act" means the U.S. Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated by the Commission
thereunder.
"Exchange Ratio" means an amount equal to the New Surviving
Entity Shares Issued, divided by the total number of Shares held by Shareholders
other than BCI Investments or its Permitted Transferees.
"Financial Statements" means, with respect to any fiscal year
of the Company, true and complete copies of the audited consolidated balance
sheet of the Company as of the last day of such fiscal year and the related
audited consolidated statements of income, retained earnings, shareholders'
equity and cash flow of the Company, together with all related notes and
schedules thereto, prepared in accordance with U.S. GAAP (except as noted
therein), accompanied by the report thereon of the Company's independent
accountants.
"Fully Diluted Shares" means the aggregate of (a) the number
of Shares issued and outstanding (other than Shares held by any wholly owned
Subsidiary of the Company) and (b) the number of Shares issuable upon (c) the
exercise of any outstanding options, warrants or similar instruments (other than
such instruments held by any wholly owned Subsidiary of the Company) and (d) the
exercise of any conversion or exchange rights with respect to any outstanding
securities or instruments (other than such securities or instruments held by any
wholly owned Subsidiary of the Company).
"Governmental Authority" means, in any applicable
jurisdiction, any federal, provincial, state or local government, any
governmental, regulatory or administrative authority, agency or commission, or
any court or tribunal, or judicial or arbitral body.
"Governmental Order" means any order, writ, judgment,
injunction, decree, agreement, stipulation, determination or award of any
Governmental Authority.
"Indebtedness" means, with respect to any Person, and in the
case of clauses (a) through (h) below, whether secured or unsecured, (a) all
indebtedness of such Person, whether or not contingent, for borrowed money, (b)
all obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments, (c) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the sellers or
lenders under such agreement in the event of default are limited to repossession
or sale of such property), (d) all obligations of such Person as lessee under
leases that have been or should be, in accordance with U.S. GAAP, recorded as
capital leases, (e) all obligations, contingent or otherwise, of such Person
under acceptance, letter of credit or similar facilities, (f) all obligations of
such Person to purchase, redeem, retire, defease or otherwise acquire for value
any Equity Interests of such Person, valued, in the case of redeemable preferred
stock, at the greater of its voluntary or involuntary liquidation preference,
plus accrued and unpaid dividends, (g) all obligations of such Person for the
deferred purchase price of property or services (other than current trade
payables incurred in the ordinary course of business), (h) all obligations of
such Person in respect of interest rate swaps, caps or collar agreements or
similar arrangements, and (i) all Indebtedness of others referred to in clauses
(a) through (h) above guaranteed directly or indirectly in any manner by such
Person or secured by any Encumbrance on property (including accounts and
contract rights) owned by such Person.
<PAGE>
"Initial Joint Venture Agreement" means the Joint Venture
Agreement between Telmex and BCI, dated as of June 7, 2000.
"Interim Financial Statements" means true and complete copies
of the unaudited consolidated balance sheet of the Company and the related
unaudited consolidated statements of income, retained earnings, shareholders'
equity and cash flows of the Company, together with all related notes and
schedules thereto, if any, prepared in accordance with U.S. GAAP (except as
noted therein).
"Intermediate Company" means any Person (other than a
Regulated Opco) that is a Subsidiary or Minority Investee of the Company.
"Law" means, in any applicable jurisdiction, any federal,
provincial, state, local or foreign statute, law, treaty, ordinance, regulation,
rule, code, order, other requirement or rule of law.
"Marketable Securities" means securities that are (a) (i)
equity securities of or other interests in any Person that are traded on a U.S.
national securities exchange or reported on by the National Association of
Securities Dealers Automated Quotation System ("Nasdaq"); provided, however,
that the average daily trading volume of such equity securities on any such
national securities exchange or Nasdaq for the seven trading days immediately
preceding the relevant payment date is at least equal to the number of
Marketable Securities proposed to be delivered pursuant to any offer or sale, or
(ii) debt securities on market terms of an issuer that has debt or equity
securities that are so traded or so reported on and in which Marketable
Securities an internationally recognized securities firm has agreed to make a
market; provided, however, that such debt securities are rated at least "A-" by
Standard & Poor's Ratings Group, a division of McGraw Hill, Inc., or "A3" by
Moody's Investors Service, Inc., and (b) not subject to restrictions on transfer
as a result of any applicable contractual provisions or the provisions of the
Securities Act at the time of such transfer.
"Minority Investee" means any Person (other than a Subsidiary
of the Company) in which the Company, directly or indirectly, holds an Equity
Interest.
"Netherlands-Danish Structure" means the alternate tax
structure set forth in Part II of Exhibit K.
"New Securities" means any Capital Stock of the Company,
whether or not now authorized, and rights, options or warrants to purchase such
Capital Stock, and securities of any type whatsoever that are, or may become,
convertible into or exchangeable or exercisable for Capital Stock of the
Company; provided, however, that the term "New Securities" does not include (a)
securities of the Company or any of the Company Subsidiaries issued to
employees, consultants, officers or directors of the Company in their capacity
as such, or which have been reserved for issuance, pursuant to any employee
share option, share purchase, share bonus plan, or other similar share agreement
or arrangement approved by the Board, (b) securities of the Company issued in
connection with any share subdivision, consolidation, bonus issue or
recapitalization of the Company and (c) securities of the Company issued in
connection with an initial public offering.
<PAGE>
"New Surviving Entity Shares Issued" means an amount equal to
the total number of Surviving Entity Shares outstanding as of the date of the
Qualified Offer, divided by the BCI Proportion, minus the total number of
Surviving Entity Shares outstanding as of the date of the Qualified Offer.
"Non-Passive Interest" means an Equity Interest held by any
Person in another Person which has the purpose, or the effect of, changing or
influencing Control of such other Person, or is held in connection with or as a
participant in any transaction having that purpose or effect.
"Opco" means any of (i) the Regulated Opcos, (ii) Genesis
Telecom C.A., a company organized under the laws of Venezuela, or Comunicaciones
2163 C.A., a company organized under the laws of Venezuela, and (iii) any other
operating company in which the Company now or hereafter, directly or indirectly,
holds an Equity Interest.
"Outstanding" means, with respect to the Shares or the
Surviving Entity Shares, as the case may be, as of any date of determination,
Shares or Surviving Entity Shares that have been issued on or prior to such date
(other than Shares or Surviving Entity Shares redeemed, repurchased or otherwise
reacquired by the Company (or held by any Subsidiary of the Company) or the
Surviving Entity (or held by any Subsidiary of the Surviving Entity), as the
case may be, on or prior to such date.
"Outstanding Obligations" means, with respect to any Initial
Shareholder, the obligations of such Shareholder under (i) such Shareholder's
Promissory Note, (ii) additionally, in the case of BCI Investments, the
obligations of BCI Investments under the Special Notes, including, [ ] upon such
obligations becoming due and payable in accordance with the terms of such
Promissory Note or Special Notes, as the case may be, and (iii) additionally, in
the case of AM Latin America, the obligation to contribute the Techtel Amount
(as defined in the Amended and Restated Joint Venture Agreement) to the Company
pursuant to Section 2.03(c) of the Amended and Restated Joint Venture Agreement.
"Permitted Transferee" means with respect to any Shareholder,
any Person (a "transferee") with respect to which the Sponsor Party of such
Shareholder maintains a majority economic and voting interest; provided, that no
such Person shall be deemed to be a Permitted Transferee if any Person other
than the Sponsor Party is permitted, by contract or otherwise, to direct or
influence the exercise by such transferee of any rights under this Agreement,
including, without limitation, rights pursuant to Section 3.08 hereunder; and,
provided, further, that such Shareholder and its Sponsor Party comply with their
respective obligations set forth in Section 4.05 hereof.
<PAGE>
"Person" means any individual, partnership, firm, limited
liability company, corporation, association, trust, unincorporated organization
or other entity, as well as any syndicate or group that would be deemed to be a
person under section 13(d)(3) of the Exchange Act.
"Pro Rata Number" means:
(a) for purposes of the procedures set forth in Section 4.03
relating to the Sale of Offered Shares to First Offer Shareholders, with respect
to each First Offer Shareholder, a number of Shares equal to the product of the
total number of Offered Shares, multiplied by a fraction (1) the numerator of
which shall be the total number of Fully Diluted Shares then owned by a First
Offer Shareholder and (2) the denominator of which shall be the total number of
Fully Diluted Shares then owned by all of the First Offer Shareholders who wish
to purchase Offered Shares; and
(b) for purposes of the procedures set forth in Section 4.04
relating to participation in a Sale by one or more Divesting Shareholders, with
respect to each Divesting Shareholder or Tag-Along Shareholder, as the case may
be, a number of Shares equal to the product of the total number of Shares the
offeror under Section 4.04 is willing to buy (which will not be less than the
number of Solicited Shares), multiplied by a fraction (1) the numerator of which
shall be the number of Fully Diluted Shares then owned by such Shareholder and
(2) the denominator of which shall be the total number of Fully Diluted Shares
then owned by all Shareholders who wish to sell Shares pursuant to the Offer.
"Promissory Note" means (a) with respect to BCI Investments,
the promissory note dated November 16, 2000 between BCI Investments and the
Company in the principal amount of $427,500,000, and (b) with respect to AM
Latin America, the promissory note dated November 16, 2000 between AM Latin
America and the Company in the principal amount of $1,007,500,000, in each case
as the principal amount of such promissory note may be adjusted pursuant to
Section 2.05 or Article VI of the Amended and Restated Joint Venture Agreement.
"Qualified Offer" shall mean an offer to exchange Surviving
Entity Shares for all but not less than all Outstanding Shares, which offer is
made pursuant to Section 5.07 and pursuant to which the number of Surviving
Entity Shares offered to each Shareholder (other than BCI Investments and its
Permitted Transferees) for each Share then held by each such Shareholder is
equal to the Exchange Ratio.
"Regulated Opcos" means Americel S.A., a corporation
(sociedade por acoes) organized under the laws of Brazil, ATL-Algar Telecom
Leste, S.A., a corporation (sociedade por acoes) organized under the laws of
Brazil, Canbras Participacoes Ltda., a corporation (sociedad por quotas de
responsabilidade limitada) organized under the laws of Brazil, Comunicacion
Celular S.A., Comcel S.A., a corporation (sociedad anonima) organized under the
laws of Colombia, Telet S.A., a corporation (sociedade por acoes) organized
under the laws of Brazil, TV Mogno Ltda., a corporation (sociedade por quotas de
responsabilidade limitada) organized under the laws of Brazil, TV Eucalipto
Ltda., a corporation (sociedade por quotas de responsabilidade limitada)
organized under the laws of Brazil, TVA Jacaranda Ltda., a corporation
(sociedade por quotas de responsabilidade limitada) organized under the laws of
Brazil, and Walberg Comunicacoes Ltda., a corporation (sociedade por quotas de
responsabilidade limitada) organized under the laws of Brazil,; provided,
however, that each such Person shall cease to be deemed a Regulated Opco upon
expiration or termination of applicable contractual or regulatory requirements
restricting the transfer of control of such Person and, in the case of
regulatory requirements, upon approval by the relevant Governmental Authorities
of the transfer of control of such Person to the Company.
<PAGE>
"Restricted Period" means the period during which a
Shareholder owns any Shares and a period of two years after the date such
Shareholder no longer owns any Shares.
"Restricted Shares" means all Shares other than (a) Shares
that have been registered under a registration statement pursuant to the
Securities Act; (b) Shares with respect to which a Sale has been made in
reliance upon, and in accordance with, Rule 144; or (c) Shares with respect to
which the holder thereof shall have delivered to the Company either (i) a
written opinion, of counsel, reasonably satisfactory to the Company and in form
and substance reasonably satisfactory to the Company, or (ii) a "no-action"
letter from the Commission, to the effect that subsequent transfers of such
Shares may be effected without registration under the Securities Act.
"Rule 144" means Rule 144 (or any successor provision) under
the Securities Act.
"Sale" means any sale, assignment, transfer, distribution or
other disposition of Shares or of a participation, including the grant of an
irrevocable option or put in respect of Shares, or other right therein, whether
voluntarily or by operation of law.
"SBCI" means SBC International, Inc., a corporation
incorporated under the laws of Delaware.
"SBCI Director" means any member of the Board nominated by
SBCI Brazil Holding in accordance with Section 3.04.
"SBCI Parent" means SBC Communications Inc., a corporation
organized under the laws of the State of Delaware.
"Securities Act" means the U.S. Securities Act of 1933, as
amended, and the rules and regulations promulgated by the Commission thereunder.
"Senior Officers" means the Chief Executive Officer and the
Chief Financial Officer of the Company.
"Share" means any share of Common Stock or Series C Shares.
"Shareholder" means each Initial Shareholder and each other
Person that becomes a party to this Agreement in accordance with Section 4.06
hereof.
"Special Notes" means (a) the Exchangeable Promissory Note,
Series A, dated November 16, 2000 between BCI Investments and the Company in the
principal amount of $300,000,000, and (b) the Redeemable and Exchangeable
Promissory Note, Series B, dated November 16, 2000 between BCI Investments and
the Company in the principal amount of $275,000,000.
"Specified Assignees" means, with respect to any Shareholder,
(a) successors and assigns in connection with a merger, consolidation or sale of
all or substantially all of the assets of such Shareholder or (b) Permitted
Transferees.
<PAGE>
"Sponsor Party" means, in the case of SBCI Brazil Holding and
its Permitted Transferees, SBCI Parent; in the case of AM Latin America and its
Permitted Transferees, America Movil; and, in the case of BCI Investments and
its Permitted Transferees, BCE and, with respect to each Shareholder other than
an Initial Shareholder or Permitted Transferee of an Initial Shareholder, the
ultimate parent company of such Shareholder.
"Standstill Period" means with respect to any Initial
Shareholder, the earlier to occur of (i) the date three years following the
Closing Date and (ii) if applicable, the first date on which such Initial
Shareholder's Promissory Note is paid in full, but in no event prior to two
years following the Closing Date.
"Strategic Plan" means the statement of strategic direction
contained in, and forming a part of, the Initial Business Plan.
"Subnewco" means any of Subnewco1, Subnewco2, Subnewco3 and
Subnewco4.
"Subnewco1" means Bell Canada International BVI V Limited, a
company organized under the laws of the British Virgin Islands.
"Subnewco2" means Ivey Wireless Ltd., a company organized
under the laws of Bermuda.
"Subnewco3" means Ivey CLEC Ltd., company organized under the
laws of Bermuda.
"Subnewco4" means SBCI Brasil Ltda., a limited liability
company (sociedad por quotas de responsabilidade limitada) organized under the
laws of Brazil.
"Subsidiary" or "Subsidiaries" of any Person means any other
Person of which (a) the first mentioned Person or any Subsidiary thereof is a
general partner, (b) voting power to elect a majority of the board of directors
or others performing similar functions with respect to such other Person is held
by the first mentioned Person and/or by any one or more of its Subsidiaries, or
(c) more than 50% of the voting Equity Interests of such other Person is,
directly or indirectly, owned or Controlled by such first mentioned Person
and/or by any one or more of its Subsidiaries.
"Surviving Entity" means the entity, as among (i) BCI, (ii)
the Company or (iii) a newly formed holding company or successor entity to BCI
and/or the Company to be formed in connection with the Consolidation, which
entity immediately after consummation of the Consolidation, holds directly or
indirectly the equivalent of all of the Equity Interests in the Company held by
the Shareholders immediately prior to the Consolidation, and in which entity the
Shareholders (other than BCI or any of its Affiliates) directly hold the same
percentage Equity Interests as were held by them in the Company immediately
prior to consummation of the Consolidation.
<PAGE>
"Surviving Entity Shares" means a single class of common
shares of the Surviving Entity, which shall represent all of the Capital Stock
of the Surviving Entity.
"Techtel" means Techtel LMDS Comunicaciones Interactivas S.A.,
a corporation (sociedad anonima) organized under the laws of Argentina.
"Telmex" means Telefonos de Mexico, S.A. de C.V., a sociedad
anonima de capital variable organized under the laws of Mexico.
"Trading Day" means, with respect to any security, any day on
which the NYSE is open for trading, or if the shares of such security are not
listed or admitted to trading on the NYSE, any day on which the principal
national securities exchange or national quotation system on which the shares of
such security are listed, admitted to trading or quoted is open for trading.
"Transaction Documents" has the meaning set forth in the
Amended and Restated Joint Venture Agreement.
"Unwind Date" shall mean the date on which the transactions
contemplated in Section 5.11 hereof are consummated.
"U.S. GAAP" means United States generally accepted accounting
principles and practices, as in effect from time to time, and applied
consistently throughout the periods involved.
"Vespers" means (i) Vesper S.A., a corporation (sociedade por
acoes) organized under the laws of Brazil, (ii) Vesper Sao Paulo S.A., a
corporation (sociedade por acoes) organized under the laws of Brazil, and (iii)
BR Home Shopping Internet S.A., a corporation (sociedade por acoes) organized
under the laws of Brazil.
"Vesper Net Sale Proceeds" [ ].
"Veto Shareholder" means any Shareholder that is entitled to
nominate two (2) or more directors to the Board pursuant to Section 3.04(a) and
entitled to exercise veto rights pursuant to Section 3.08(b).
(b) Each of the terms set forth below shall have the meaning
ascribed thereto in the following sections:
<TABLE>
<S> <C>
Accession Certificate.............................................. ss. 4.06
Advancing Party.................................................... ss. 5.13(b)
Alternate Structure................................................ ss. 5.14(a)
Amended and Restated Joint Venture Agreement....................... Recitals
AM Latin America................................................... Recitals
ANATEL Letter...................................................... ss. 5.17
Approval Date...................................................... ss. 5.07(c)
Assumption Agreement............................................... ss. 5.18
BCE Indemnity Agreement............................................ ss. 5.07(a)
BCI Investments.................................................... Preamble
Business Plan...................................................... ss. 3.08(b)(i)
<PAGE>
Bye-Laws........................................................... ss. 2.01
Chairman........................................................... ss. 3.03(b)
CLEC............................................................... Recitals
Common Stock....................................................... Recitals
Company............................................................ Preamble
Confidential Information........................................... ss. 5.03
Consolidation...................................................... ss. 5.07(a)
Consolidation Conditions........................................... ss. 5.07(a)
Consolidation Notice............................................... ss. 5.07(a)
Default Amount..................................................... ss. 5.13(a)
Defaulting Party................................................... ss. 5.13(a)
Default Interest Amount............................................ ss. 5.13(c)
Default Rate....................................................... ss. 5.13(a)
Defeasance Amount.................................................. ss. 5.07(d)(ii)
Deputy Chairman.................................................... ss. 3.03(b)
Director Transferee................................................ ss. 3.13(b)
Dispute............................................................ ss. 6.14
Dispute Notice..................................................... ss. 6.14
Divesting Shareholder.............................................. ss. 4.04(a)
Due Date........................................................... ss. 5.13(a)
First Offer Price.................................................. ss. 4.03(a)(i)
First Offer Shareholder Option Period.............................. ss. 4.03(a)(ii)
First Offer Shareholders........................................... ss. 4.03(a)(i)
Guarantee and Share Retention Agreement............................ ss. 4.05
Home Market Customers.............................................. ss. 5.05(c)
ICC................................................................ ss. 6.15(a)
Initial Business Plan.............................................. ss. 3.10
Initial Shareholders............................................... Preamble
Initial Structure.................................................. ss. 5.14(a)
Joint Venture Area................................................. Recitals
Material Tax Change................................................ ss. 5.14(b)(v)
Memorandum of Association.......................................... ss. 2.01
Mobile Wireless.................................................... Recitals
Neutral Provisions................................................. ss. 5.14(a)
Notice of Exercise................................................. ss. 4.03(a)(ii)
Notice of Intention................................................ ss. 4.03(a)(i)
Notice of Interest................................................. ss. 4.04(a)
Notice of Issuance................................................. ss. 5.04(b)
Notice Period...................................................... ss. 4.04(a)
Offer.............................................................. ss. 4.04(a)
Offer Notice....................................................... ss. 4.04(a)
Offered Shares..................................................... ss. 4.03(a)(i)
One Director Date.................................................. ss. 3.04(b)
Payment Period..................................................... ss. 5.16
Prospective Transferee............................................. ss. 4.06
Qualified Offer Conditions......................................... ss. 5.07(d)
<PAGE>
Qualified Vote..................................................... ss. 3.08(b)
Reorganization ss. 5.07(j)
Registration Rights Agreement...................................... ss. 5.07(d)(vii)
Selling Shareholder................................................ ss. 4.03(a)(i)
Series C Shares.................................................... Recitals
Settlement Date.................................................... ss. 4.03(a)(iv)
Sister Transferee.................................................. ss. 4.05
Solicited Shares................................................... ss. 4.04(a)
SBCI Brazil Holding................................................ Preamble
Structure Notice................................................... ss. 5.14(a)
Tag-Along Shareholder.............................................. ss. 4.04(a)
Two Director Date.................................................. ss. 3.04(a)(iii)
Veto Transferee.................................................... ss. 3.13(a)
</TABLE>
ARTICLE II
ORGANIZATIONAL DOCUMENTS;
REPRESENTATIONS AND WARRANTIES
Section 2.01. Memorandum of Association and Bye-Laws. Attached
hereto as Exhibit A and Exhibit B, respectively, are the Memorandum of
Association of the Company (the "Memorandum of Association") and the Amended and
Restated Bye-Laws of the Company and Amended and Restated Bye-laws or Amended
Articles of Association, as the case may be, of each of Subnewco1, Subnewco2 and
Subnewco3 (collectively, the "Bye-Laws") as in effect on the date hereof. The
provisions of such Exhibits are hereby approved by the parties hereto.
Section 2.02. Representations and Warranties of the
Shareholders and Sponsor Party. Each Shareholder and Sponsor Party, as of the
date it becomes a party hereto, represents and warrants as to itself as follows:
(a) It is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation or
organization and has all necessary power and authority to enter into this
Agreement and each of the Transaction Documents to which it is a party, to carry
out its obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery by it of this
Agreement and each of the Transaction Documents to which it is a party, the
performance by it of its obligations hereunder and thereunder and the
consummation by it of the transactions contemplated hereby and thereby have been
duly authorized by all requisite action on its part. This Agreement has been and
upon their execution the Transaction Documents shall have been, duly executed
and delivered by it, and (assuming due authorization, execution and delivery by
the other parties thereto) this Agreement constitutes and upon their execution
the Transaction Documents will constitute, legal, valid and binding obligations
of it enforceable against it in accordance with their respective terms.
<PAGE>
(b) The execution, delivery and performance of this Agreement
and the Transaction Documents by it do not and will not (i) violate, conflict
with or result in the breach of any provision of its Memorandum of Association
or Bye-Laws (or equivalent organizational documents), (ii) conflict with or
violate any Law or Governmental Order applicable to it or any of its assets,
properties or businesses, or (iii) conflict with, result in any breach of,
constitute a default (or event which with the giving of notice or lapse of time,
or both, would become a default) under, require any consent under, or give to
any other Person any rights of termination, amendment, acceleration, suspension,
revocation or cancellation of rights of first refusal, rights of first offer,
change of control put, obligation to tender or other similar rights, or result
in the creation of any Encumbrance on any of its assets or properties pursuant
to, any note, bond, mortgage or indenture, contract, agreement, lease, sublease,
license, permit, franchise or other instrument or arrangement to which it is a
party or by which any of such assets or properties are bound or affected which
would have a material adverse effect on its ability to consummate the
transactions contemplated by this Agreement or by the Transaction Documents.
Section 2.03. Representations and Warranties of BCI
Investments and BCI. Each of BCI Investments and BCI represents and warrants as
follows:
(a) Except as set forth in Schedule 2.03(a) hereto, as of the
date hereof there is not any agreement with any Person providing for
registration rights with respect to the Capital Stock of BCI.
(b) Schedule 2.03(b) hereto sets forth a complete and accurate
description of the Equity Interests of BCI Investments in each of Subnewco1,
Subnewco2 and Subnewco3, including the number and type of each class of Equity
Interests in each of such Subnewcos that are authorized, issued and outstanding
and the percentage of each such class of Equity Interests outstanding that are
owned directly by BCI Investments. Except for Equity Interests owned directly by
the Company in such Subnewcos, BCI Investments owns directly of record and
beneficially all of the issued and outstanding Equity Interests of each of such
Subnewcos, free and clear of all Encumbrances. Except as set forth in Schedule
2.03(b) hereto, there are no outstanding or authorized options, warrants, calls,
convertible securities, preemptive (statutory or contractual), subscription
rights, commitments or other rights, agreements, arrangements or commitments of
any character currently in effect, including, without limitation, rights of
first refusal, rights of first offer, or other comparable rights relating to
such Equity Interests or obligating BCI Investments to issue or sell any Equity
Interests in such Subnewcos, and there are no securities outstanding which, upon
conversion or exchange, would require the issuance, sale or transfer of any
additional Equity Interests in such Subnewcos.
Section 2.04. Representation and Warranty of SBCI Brazil
Holding and SBCI. Each of SBCI Brazil Holding and SBCI represents and warrants
as follows: Schedule 2.04 hereto sets forth a complete and accurate description
of the Equity Interests of SBCI Brazil Holding in Subnewco4, including the
number and type of each class of Equity Interests in Subnewco4 that are
authorized, issued and outstanding and the percentage of each such class of
Equity Interests outstanding that are owned directly by SBCI Brazil Holding.
Except for Equity Interests owned directly by the Company in Subnewco4 and
except as set forth in Schedule 2.04, SBCI Brazil Holding owns directly of
record and beneficially all of the issued and outstanding Equity Interests of
Subnewco4, free and clear of all Encumbrances. Except as set forth in Schedule
2.04 hereto, there are no outstanding or authorized options, warrants, calls,
convertible securities, preemptive (statutory or contractual), subscription
rights, commitments or other rights, agreements, arrangements or commitments of
any character currently in effect, including, without limitation, rights of
first refusal, rights of first offer, or other comparable rights relating to
such Equity Interests or obligating SBCI Brazil Holding to issue or sell any
Equity Interests in Subnewco4, and there are no securities outstanding which,
upon conversion or exchange, would require the issuance, sale or transfer of any
additional Equity Interests in Subnewco4.
<PAGE>
ARTICLE III
CORPORATE GOVERNANCE
Section 3.01. Corporate Purpose; Powers of the Board. The
parties hereto confirm that it is their intention that the business and affairs
of the Company shall be managed by the Board which may exercise all the powers
of the Company. The Board shall have the power and authority to take all actions
that are not by Law, the Memorandum of Association, the Bye-Laws, or this
Agreement required to be exercised or done by the Shareholders.
Section 3.02. Number of Directors. The Board shall initially
consist of six (6) directors, with three (3) directors nominated by each of BCI
Investments and AM Latin America.
Section 3.03. Composition of Board and Chairman of the Board.
(a) As of the date hereof, the members of the Board shall be as follows:
Name of Director
1. Jean C. Monty (Director nominated by BCI Investments)
2. Michael J. Sabia (Director nominated by BCI Investments)
3. Louis A. Tanguay (Director nominated by BCI Investments)
4. Carlos Slim Helu (Director nominated by AM Latin America)
5. Daniel Hajj Aboumrad (Director nominated by AM Latin America)
6. Carlos Henrique Moreira (Director nominated by AM Latin America)
Each director shall hold office until the next annual meeting of Shareholders
next succeeding his or her election and until his or her successor is elected
and qualified or until his or her resignation or removal in accordance with the
terms of this Agreement.
(b) The Board shall be initially chaired by Carlos Slim Helu
(the "Chairman"). The initial deputy chairman ("Deputy Chairman") of the Board
shall be Louis Tanguay. After the initial one-year term, each of the Chairman
and the Deputy Chairman shall be designated by the Shareholders at the annual
meeting of Shareholders on a rotating basis in the following order: BCI
Investments, SBCI Brazil Holding (in the event that SBCI Brazil Holding has the
right to nominate two (2) directors to the Board pursuant to Section
3.04(a)(iii) hereof) and AM Latin America.
<PAGE>
Section 3.04. Subsequent Nominations. (a) (i) Subject to
Section 3.04(a)(ii) each of BCI Investments and AM Latin America shall be
entitled to nominate for election three (3) directors to the Board for so long
as BCI Investments or AM Latin America, as the case may be, holds at least 20%
of the Outstanding Shares of the Company; provided, however, that neither BCI
Investments nor AM Latin America may exercise such right at any time when it is
a Defaulting Shareholder. If at any time either BCI Investments or AM Latin
America shall hold less than 20% of the Outstanding Shares of the Company, BCI
Investments or AM Latin America, as the case may be, shall forfeit its right to
nominate for election three (3) directors to the Board pursuant to this Section
3.04(a)(i); provided, however, that, subject to Section 3.04(a)(ii), if: (A) at
any time subsequent to forfeiting such right, either BCI Investments or AM Latin
America, as the case may be, holds at least 20% of the Outstanding Shares of the
Company, and (B) BCI Investments or AM Latin America, as the case may be, has
not previously transferred its right to nominate for election three (3)
directors to the Board to a Veto Transferee pursuant to Section 3.13(a), then
the other Initial Shareholders shall vote their Shares in order to permit BCI
Investments or AM Latin America, as the case may be, to regain its right to
nominate for election three (3) directors to the Board pursuant to this Section
3.04(a)(i).
(ii) At any time when SBCI Brazil Holding shall have the right to
nominate for election one (1) director to the Board pursuant to Section
3.04(b) hereof or two (2) directors to the Board pursuant to Section
3.04(a)(iii) hereof, each of BCI Investments and AM Latin America shall be
entitled to nominate for election two (2) directors to the Board for so
long as it holds at least twenty percent (20%) of the Outstanding Shares of
the Company; provided, however, that no such Shareholder may exercise such
right at any time when it is a Defaulting Shareholder. If at any time
either BCI Investments or AM Latin America shall hold less than twenty
percent (20%) of the Outstanding Shares of the Company, BCI Investments or
AM Latin America, as the case may be, shall forfeit its right to nominate
for election two (2) directors to the Board pursuant to this Section
3.04(a)(ii); provided, however, that if: (A) at any time subsequent to
forfeiting such right, either BCI Investments or AM Latin America, as the
case may be, holds at least 20% of the Outstanding Shares of the Company,
(B) at such time SBCI Brazil Holding has the right to nominate for election
one (1) director to the Board pursuant to Section 3.04(b) hereof or two (2)
directors to the Board pursuant to Section 3.04(a)(iii) hereof, and (C) BCI
Investments or AM Latin America, as the case may be, has not previously
transferred its right to nominate for election two (2) directors to the
Board to a Veto Transferee pursuant to Section 3.13(a), then the other
Initial Shareholders shall vote their Shares in order to permit BCI
Investments or AM Latin America, as the case may be, to regain its right to
nominate for election (2) directors to the Board pursuant to this Section
3.04(a)(ii).
(iii) If at any time after the date hereof, SBCI Brazil Holding holds
twenty percent (20%) or more of the Outstanding Shares of the Company (the
date on which such interest is acquired, the "Two Director Date"), it shall
be entitled to nominate for election two (2) directors to the Board for so
long as it continues to hold at least twenty percent (20%) of the
Outstanding Shares of the Company; provided that SBCI Brazil Holding may
not exercise such right at any time when it is a Defaulting Shareholder. If
at any time prior to the Two Director Date SBCI Brazil Holding shall hold
less than ten percent (10%) of the Outstanding Shares of the Company, or if
at any time after the Two Director Date SBCI Brazil Holding shall hold less
than twenty percent (20%) of the Outstanding Shares of the Company, it
shall forfeit its right to nominate for election two (2) directors to the
Board pursuant to this Section 3.04(a)(iii); provided, however, that if:
(A) at any time subsequent to forfeiting such right, SBCI Brazil Holding
holds at least 20% of the Outstanding Shares of the Company, and (B) SBCI
Brazil Holding has not previously transferred its right to nominate for
election two (2) directors to the Board to a Veto Transferee pursuant to
Section 3.13(a), then the other Initial Shareholders shall vote their
Shares in order to permit SBCI Brazil Holding to regain its right to
nominate for election two (2) directors to the Board pursuant to this
Section 3.04(a)(iii).
<PAGE>
(b) Each of BCI Investments and AM Latin America shall be
entitled hereunder to nominate for election one (1) director to the Board for so
long as it holds at least ten percent (10%) of the Outstanding Shares of the
Company; provided that neither BCI Investments nor AM Latin America may exercise
such right at any time when it is a Defaulting Shareholder. If at any time such
Initial Shareholder shall hold less than ten percent (10%) of the Outstanding
Shares of the Company, it shall forfeit such right; provided, however, that if:
(i) at any time subsequent to forfeiting such right, either BCI Investments or
AM Latin America, as the case may be, holds at least 10% of the Outstanding
Shares of the Company, and (ii) BCI Investments or AM Latin America, as the case
may be, has not previously transferred its right to nominate for election one
(1) director to the Board to a Director Transferee pursuant to Section 3.13(b)
or its right to nominate for election two (2) or three (3) directors to the
Board to a Veto Transferee pursuant to Section 3.13(a), then the other Initial
Shareholders shall vote their Shares in order to permit BCI Investments or AM
Latin America, as the case may be, to regain its right to nominate for election
one (1) director to the Board pursuant to this Section 3.04(b). Subject to the
immediately succeeding sentence, if at any time after the date hereof, SBCI
Brazil Holding increases its ownership interest in the Company such that it
holds fifteen percent (15%) or more of the Outstanding Shares of the Company
(the date on which such interest is acquired, the "One Director Date"), SBCI
Brazil Holding shall be entitled to nominate for election one (1) director to
the Board for so long as it continues to hold at least ten percent (10%) of the
Outstanding Shares of the Company; provided that SBCI Brazil Holding may not
exercise such right at any time when it is a Defaulting Shareholder. If at any
time SBCI Brazil Holding shall hold less than ten percent (10%) of the
Outstanding Shares of the Company, it shall forfeit its right to nominate for
election one (1) director to the Board pursuant to this Section 3.04(b);
provided, however, that if: (i) at any time subsequent to forfeiting such right,
SBCI Brazil Holding holds at least 10% of the Outstanding Shares of the Company,
and (ii) SBCI Brazil Holding has not previously transferred its right to
nominate for election one (1) director to the Board to a Director Transferee
pursuant to Section 3.13(b) or its right to nominate for election two (2)
directors to the Board to a Veto Transferee pursuant to Section 3.13(a), then
the other Initial Shareholders shall vote their Shares in order to permit SBCI
Brazil Holding to regain its right to nominate for election (1) director to the
Board pursuant to this Section 3.04(b). The rights granted to each Initial
Shareholder pursuant to this Section 3.04(b) shall not be effective with respect
to any Initial Shareholder that has the right to nominate for election two (2)
or more directors to the Board pursuant to Section 3.04(a), or that has
transferred its rights under Section 3.04(a) pursuant to Section 3.13(a).
<PAGE>
(c) If at any time a Shareholder shall hold more than fifty
percent (50%) of the Outstanding Shares of the Company, all of the Shareholders
shall promptly take such actions as may be reasonably required to increase the
number of directors on the Board to such number as to permit such Shareholder to
nominate for election a majority of the directors of the Board; provided, that
any increase in the number of directors on the Board pursuant to this Section
3.04(c) shall be effected without detriment to the rights of Shareholders under
Sections 3.04(a) and 3.04(b) above. Upon the occurrence of the One Director
Date, if the number of directors on the Board is six (6) and there are two Veto
Shareholders, all of the Shareholders shall promptly take such actions as may be
reasonably required to decrease the number of directors on the Board to five
(5). Thereafter, all of the Shareholders shall promptly take such action as may
be necessary to increase the number of directors on the Board by one (1) member
to a total of six (6) members if the number of Veto Shareholders is increased to
three (3).
(d) No failure to elect a director at an annual or special
meeting of the shareholders of the Company shall prevent any Shareholder from
thereafter nominating a director to fill such vacancy or shall constitute a
waiver of such party's rights under this Section 3.04.
(e) Each Shareholder agrees to vote any Shares owned by it to
cause the election of each director nominated to the Board in accordance with
this Section 3.04, and the Company agrees to take all necessary action
reasonably necessary to cause the election of each such nominee to the Board.
Section 3.05. Removal of Directors. (a) Upon the written
request of BCI Investments, each Shareholder shall consent in writing to the
removal of any of the BCI Directors and shall take or cause to be taken all
actions necessary to remove such BCI Directors, and any replacement for such
removed BCI Directors shall be nominated and elected as provided in Sections
3.06(a) and 3.06(c).
(b) Upon the written request of AM Latin America, each
Shareholder shall consent in writing to the removal of any of the AM Latin
America Directors and shall take or cause to be taken all actions necessary to
remove such AM Latin America Directors, and any replacement for such removed AM
Latin America Directors shall be nominated and elected as provided in Sections
3.06(a) and 3.06(c).
(c) Upon the written request of SBCI Brazil Holding, each
Shareholder shall consent in writing to the removal of any of the SBCI Directors
(if any) and shall take or cause to be taken all actions necessary to remove
such SBCI Directors, and any replacement for such removed SBCI Directors shall
be nominated and elected as provided in Section 3.06(a) and 3.06(c).
(d) In the event that (A) the percentage of Outstanding Shares
held by any Initial Shareholder is reduced from twenty percent (20%) or greater
to below twenty percent (20%) (but such percentage is equal to or exceeds ten
percent (10%) of the Outstanding Shares of the Company, and as a result such
Initial Shareholder forfeits its existing rights under Section 3.04(a) (and its
rights under Section 3.04(b) become effective), or (B) the percentage of
Outstanding Shares held by (x) BCI Investments or AM Latin America is reduced
from a percentage that is less than twenty percent (20%) but at least ten
percent (10%) to less than ten percent (10%) of the Outstanding Shares, or (y)
SBCI Brazil Holding is reduced after the One Director Date from a percentage
that is less than twenty percent (20%) but at least ten percent (10%) to less
than ten percent (10%) of the Outstanding Shares, and, in either case, as a
result such Initial Shareholder forfeits its existing rights under Section
3.04(b), upon the written request of any Shareholder, such Initial Shareholder
shall be deemed to have consented in writing to the removal of one (1) of the
directors nominated by it (or if the case of sub-clause (A) arises prior to the
earlier of the One Director Date or the Two Director Date, two (2) directors
nominated by it), and all Shareholders shall take such action as may be
necessary to remove such director or directors. Any replacement for such removed
director shall be nominated and elected as provided in Sections 3.06(b) and
3.06(c).
<PAGE>
(e) In the event that the percentage of Outstanding Shares
held by any Initial Shareholder is reduced from twenty percent (20%) or greater
to less than ten percent (10%) of the Outstanding Shares, and as a result such
Initial Shareholder forfeits its existing rights under Section 3.04(a) and
potential rights under Section 3.04(b), upon the written request of any
Shareholder, such Initial Shareholder shall be deemed to have consented in
writing to the removal of two (2) of the directors nominated by it (or, prior to
the occurrence of the earlier of the One Director Date or the Two Director Date,
three (3) directors nominated by it), and all Shareholders shall take such
action as may be necessary to remove such directors. Any replacements for such
removed directors shall be nominated and elected as provided in Sections 3.06(b)
and 3.06(c).
(f) For so long as any Shareholder is a Defaulting
Shareholder, any other Shareholder may request in writing the removal of the
directors nominated by such Defaulting Shareholder pursuant to Section 3.03,
3.04(a) or 3.04(b). Upon such request, each Shareholder shall consent in writing
to the removal of such directors and shall take or cause to be taken all actions
necessary to remove such directors. Any replacements for such directors shall be
nominated and elected as provided in Sections 3.06(b) and 3.06(c).
(g) In the event that the number of directors on the Board is
reduced to five (5) pursuant to Section 3.04(c), or if the Two Director Date
occurs on or prior to the One Director Date, each Veto Shareholder shall be
deemed to have consented in writing to the removal of one of the directors
nominated by it, and all Shareholders shall take such action as may be necessary
to remove such director.
Section 3.06. Vacancies. (a) In the event that a vacancy is
created on the Board at any time by the death, disability, retirement,
resignation or removal of any director (other than removal pursuant to Sections
3.05(d) or 3.05(e) or 3.05(f)), the Shareholder that nominated such director
shall have the right to nominate a replacement director to fill such vacancy.
(b) Subject to the provisions of Section 3.13, in the event
that a vacancy is created on the Board at any time by the removal of any
director or directors pursuant to Section 3.05(d) or 3.05(e) or 3.05(f), the
determination as to which Shareholder or Shareholders shall have the right to
nominate a replacement director or directors to fill such vacancy shall be made
on the basis that representation on the Board shall be proportionate to each
Shareholders' percentage holdings of the Outstanding Shares, subject to the
rights of any Shareholder under Section 3.04.
<PAGE>
(c) Each Shareholder agrees to vote any and all Shares owned
by it to cause the election of each such replacement nominee to the Board, and
the Company agrees to take all necessary action promptly to cause the election
of each such replacement nominee to the Board. In the event the Shareholder
having the right to nominate a replacement director shall not have nominated a
replacement director to fill such vacancy at the time of the next following
meeting of the Board and such replacement director is necessary in order for a
quorum of the Board to be present, the other Shareholders shall have the right
to nominate a director to serve on the Board until such Shareholder shall
nominate the replacement.
Section 3.07. Covenant to Vote. Each Shareholder shall use,
from and after the date hereof, its best efforts and take all actions necessary
to call, or cause the Company and the appropriate officers and directors of the
Company to call, a special or annual meeting of the Shareholders and to vote all
Shares owned or held of record by such Shareholder at any such annual or special
meeting in favor of all actions, or take all actions by written consent in lieu
of any such meeting, necessary to effect the intent of this Article III. In
addition, each Shareholder agrees to vote the Shares owned or held of record by
such Shareholder upon any other matter arising under this Agreement submitted to
a vote of the Shareholders in a manner so as to implement the terms of this
Agreement.
Section 3.08. Action by the Board. (a) Except as otherwise
provided in this Section 3.08 or by Law:
(i) meetings of the Board shall be held at least quarterly;
(ii) a majority of directors shall be present in person or by
telephone at any meeting of the Board, with at least one (1) director
nominated by each Veto Shareholder present, in order to constitute a quorum
for the transaction of business at such meeting; provided, however, that in
the event a quorum is not present at any meeting of the Board at which the
transaction of business does not require a Qualified Vote pursuant to
Section 3.08(b), then such matter shall be postponed to a Board meeting to
be held five (5) Business Days after the first meeting at which the
presence of a majority of directors in person or by telephone shall
constitute a quorum for the transaction of business at such second Board
meeting; and
(iii) all actions of the Board shall require the affirmative vote of
the majority of the directors present and entitled to vote on the action
then being considered at a duly convened meeting of the Board at which a
quorum is present or, in lieu of a meeting, by the unanimous written
consent of the members of the Board.
(b) Notwithstanding the provisions of Section 3.08(a) and
notwithstanding that no vote may be required, or that a lesser percentage vote
may be required, by Law or otherwise, the Company (except as provided below at
the end of this subsection or in Section 5.05(b) or (e)) shall not take, and no
party to this Agreement shall cause the Company to take, any action without the
affirmative vote of at least one (1) director nominated by each Shareholder
permitted to nominate two (2) or more directors to the Board pursuant to Section
3.04(a) and, in the case of a meeting of Shareholders called to approve such
actions, the affirmative vote of each Veto Shareholder (the "Qualified Vote")
with respect to the following actions:
<PAGE>
(i) the approval of (A) any material amendments to the Initial
Business Plan, (B) from time to time after the term of the Initial Business
Plan, the annual budget and multi-year business plan for the Company; which
shall include (1) projected statements of income, cash flows and balance
sheet; (2) all material capital expenditures for the Company and the
Intermediate Companies; and (3) all borrowing plans and other plans to
incur Indebtedness, and significant changes to either (each a "Business
Plan"), and (C) material amendments to any future Business Plan; provided
that if a Business Plan or proposed material amendment to an existing
Business Plan has not been adopted by a Qualified Vote one (1) month prior
to the first fiscal year corresponding to such Business Plan, a Business
Plan (or amendment) providing for an annual budget with expenses and
capital expenditures not in excess of 110% of those set forth in the
Business Plan for the immediately preceding fiscal year may be approved by
the affirmative vote of the majority of directors present; provided,
further, that, for the avoidance of doubt, no Business Plan approved by the
Board shall impede the exercise by any Person that controls any Regulated
Opco of its voting rights with respect to such Regulated Opco.
(ii) a public offering of the Capital Stock of the Company or any
Intermediate Company (it being understood that the BCI Directors shall not
prevent any public offering of the Capital Stock of the Company supported
by the AM Latin America Directors and the SBCI Directors (if any) primarily
for the purpose of preserving the opportunity of making a Qualified Offer
and BCI Investments shall comply with the provisions set forth in Section
5.07(c));
(iii) the issuance or sale of any Capital Stock of the Company;
(iv) the issuance or sale of any notes, bonds, debt instruments or
other securities, or any option, warrant or other right to acquire the
same, of, or any other interest in, the Company or any Intermediate
Company, or any securities of any type whatsoever that are, or may become,
convertible into or exchangeable or exercisable for Capital Stock of the
Company or any Intermediate Company;
(v) except as otherwise provided by Section 5.07, the amalgamation or
merger of the Company or any Intermediate Company into or with any other
Person, the consolidation with any Person by the Company or any
Intermediate Company, or the sale, reorganization or restructuring of the
Company or any Intermediate Company (or any similar transaction);
(vi) the acquisition of assets or businesses of any Person by the
Company or any Intermediate Company which exceeds $100 million or which
would be reasonably likely to delay the Unwind Date;
(vii) the sale, assignment, transfer, lease, sublease, charge,
mortgage, pledge, grant of security interest in, sublicense or other
disposition of any material license of the Company or any Intermediate
Company;
<PAGE>
(viii) the sale, assignment, transfer, lease, sublease, mortgage,
pledge, grant of security interest in, license or other disposition of any
assets of the Company or any Intermediate Company that exceeds $50 million;
(ix) (a) any incurrence, assumption or issuance by the Company or any
Intermediate Company of Indebtedness (i) if, after giving effect to such
incurrence, assumption or issuance (including the application of the net
proceeds therefrom), the Company's or any Intermediate Company's ratio of
Indebtedness to shareholders' equity (based upon book value) would exceed,
as of the date of determination, 2.34:1, or (ii) in excess of $50 million,
(b) the guaranteeing of any Indebtedness of any Subsidiary of the Company
in excess of $50 million, or (c) the guaranteeing of any Indebtedness of
any other Person;
(x) the entering by the Company or any Intermediate Company into of
any agreement, arrangement or transaction with any Affiliate of the Company
or any Shareholder or any Affiliate of any Shareholder or Sponsor Party;
(xi) any amendment to the Memorandum of Association and Bye-Laws or to
the memorandum of association and Bye-Laws (or similar instruments) of the
Company or any Intermediate Company;
(xii) the establishment or termination of any committee of the Board;
(xiii) the commencement, settlement, payment, discharge or
satisfaction of any litigation, claim, liability or obligation (absolute,
accrued, asserted or unasserted, contingent or otherwise) by the Company or
any Intermediate Company other than where such litigation, claim, liability
or obligation is only for money damages that do not exceed $50 million;
(xiv) the declaration or payment of dividends or distributions on or
with respect to any Capital Stock of the Company or any Intermediate
Company;
(xv) except as otherwise permitted by the Business Plan, approving any
capital expenditure by the Company or any Intermediate Company which
exceeds, individually or in the aggregate, $25 million;
(xvi) approving any matter to be voted upon at any meeting of the
shareholders of the Company;
(xvii) instructing the Company with respect to the voting of the
shares of any Intermediate Company held directly or indirectly by the
Company with respect to any matter listed in Section 3.08(b)(ii), (iv)
through (xvi) and (xx); and
(xviii) requesting payment under the Promissory Notes or reducing the
principal amount of the Promissory Notes prior to the stated maturity of
such Promissory Notes (which, in each case, shall be effected on a pro rata
basis based on the initial principal amount of each Promissory Note);
<PAGE>
(xix) approving the operation of the Company in any manner contrary to
the first sentence of Section 5.14(a); and
(xx) the taking of any action, directly or indirectly, in
contemplation of any of the foregoing; provided, that, for the avoidance of
doubt, no such action shall impede the exercise by any Person that controls
any Regulated Opco to exercise its voting rights with respect to such
Regulated Opco.
provided, however, that a Qualified Vote will not require the affirmative vote
of a Defaulting Shareholder or a director nominated by any Shareholder that, at
the time of such vote, is a Defaulting Shareholder and such Shareholder need not
be present at a meeting of the Shareholders, in order to achieve a quorum for a
meeting to take action on a matter requiring a Qualified Vote; [ ].
Section 3.09. Action by Shareholders. (a) Except as otherwise
provided in this Section 3.09:
(i) meetings of the Shareholders will only be held when action by the
Shareholders is required by Law or if called by the Board to obtain any
approval of a matter requiring a Qualified Vote;
(ii) Shareholders holding a majority of the Outstanding Shares
entitled to vote (which majority shall include all of the Veto
Shareholders) shall be present in person, by proxy or by telephone at any
meeting of the Shareholders in order to constitute a quorum for the
transaction of business at such meeting and all actions of the Shareholders
shall require the affirmative vote of the majority of Shareholders present
and entitled to vote determined by voting interests at a duly convened
meeting of the Shareholders at which a quorum is present; provided,
however, that in the event any Veto Shareholder is not present at --------
------- any duly called meeting of Shareholders at which the transaction of
business does not require a Qualified Vote pursuant to Section 3.08(b),
then any such matters to be submitted to a vote of Shareholders at such
meeting shall be postponed to a meeting of Shareholders to be held five (5)
Business Days after the first meeting at which second meeting the presence
of Shareholders holding a majority of the Outstanding Shares of the Company
shall constitute a quorum for the approval of such matters; and
(iii) notwithstanding any other provision to the contrary, the Company
shall not take any action without the approval of each Veto Shareholder
with respect to any action that requires the approval of Shareholders by
Law and, subject to Section 3.08(b), the Company shall not take any action
on any matter requiring a Qualified Vote of the Shareholders without the
approval of each Veto Shareholder.
<PAGE>
(b) Each of the Shareholders shall use its best efforts to
cause any proposal with respect to any action to be taken by the shareholders or
directors of any Regulated Opco, analogous to those described in Section
3.08(b), to be presented to the Board for discussion and a non-binding vote
recommending that such proposal be adopted or declined; provided, that a
recommendation that any such proposal be adopted must be approved by a Qualified
Vote of the Board. Nothing in this Section 3.09(b), however, shall obligate the
shareholders or the board of directors of any Regulated Opco, or any member of
such a board of directors, to vote in favor of any particular position or in any
particular manner.
(c) Each of the Shareholders shall use its best efforts to
cause information that is made generally available to the shareholders and/or
directors of each of the Opcos (including any monthly or other periodic
management reports delivered to the respective boards of directors of each of
the Opcos) to be provided to the Board on a timely basis, except to the extent
that confidentiality restrictions with respect to such information would prevent
the Opcos, their respective boards of directors or the Shareholders from
delivering such information to the Board.
(d) Notwithstanding any other provision of this Agreement and
notwithstanding that no vote may be required, or that a lesser percentage vote
may be required, by Law or otherwise, the Company shall not take, and no party
to this Agreement shall cause the Company to take, any action without the
affirmative vote of each Initial Shareholder holding at least ten percent (10%)
of the Outstanding Shares of the Company with respect to the following actions:
(i) a material change in the nature or scope of the business or
corporate strategy of the Company or any Intermediate Company or the
entering into a joint venture or similar strategic alliance by any thereof
with any Person; and
(ii) the winding up or dissolution of the Company or any Intermediate
Company; the adoption of a plan of liquidation of the Company or any
Intermediate Company; any action by the Company or any Intermediate Company
to commence any suit, case, proceeding or other action (A) under any
existing or future law of any jurisdiction relating to bankruptcy,
insolvency, reorganization or relief of debtors seeking to have an order
for relief entered with respect to the Company or any Intermediate Company,
or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to the Company or any
Intermediate Company or (B) seeking appointment of a receiver, trustee,
custodian or other similar official for the Company or any Intermediate
Company, or for all or any part of its assets, or making a general
assignment for the benefit of the creditors of the Company or any
Intermediate Company;
provided, however, that the affirmative vote of any Initial Shareholder holding
at least ten percent (10%) of the Outstanding Shares of the Company shall not be
required if such Initial Shareholder, at the time of such vote, is a Defaulting
Shareholder, and such Initial Shareholder need not be present at a meeting of
the Shareholders, in order to achieve a quorum for a meeting to take action on
any of the matters specified in this Section 3.09(d).
Section 3.10. Business Plan. Attached hereto as Exhibit C is
the initial Business Plan of the Company for the period through December 31,
2002 (the "Initial Business Plan"). The Initial Business Plan has been approved
by the parties hereto.
Section 3.11. Management. (a) During the term of this
Agreement the Senior Officers shall be selected by mutual agreement of the Veto
Shareholders; provided, that for so long as AM Latin America is a Veto
Shareholder, AM Latin America shall have the sole right to nominate the chief
executive officer of the Company and, for so long as BCI Investments is a Veto
Shareholder, BCI Investments shall have the sole right to nominate the chief
financial officer of the Company.
<PAGE>
(b) The Senior Officers shall report to the Board. The Senior
Officers shall nominate the remaining senior management of the Company and shall
nominate the senior management of the Intermediate Companies; provided, however,
for the avoidance of doubt, that members of senior management so nominated at
any Intermediate Company shall receive instructions solely from the board of
directors of the Intermediate Company to which such persons are appointed as
manager . To the extent permitted by applicable contractual and regulatory
restrictions, the chief executive officer, chief financial officer and chief
operating officer of each Opco (other than the Regulated Opcos) shall be
nominated by a majority of directors of the Board present at any meeting of the
Board.
(c) Accounting Matters. The parties agree that the Company and
each Subnewco shall be a calendar year company, will keep its books in
accordance with U.S. GAAP and will prepare the Financial Statements and the
Interim Financial Statements in accordance with U.S. GAAP. The initial auditors
of the Company shall be Deloitte & Touche LLP. Subsequent auditors shall be
appointed by decision of a majority of directors of the Board present at any
meeting of the Board.
Section 3.12. Removal of Senior Officers. Upon the written
request of Shareholders that hold, in the aggregate, a majority of the Equity
Interests of the Company, any Senior Officer may be removed, and each
Shareholder shall take or cause to be taken all actions necessary to remove any
such Senior Officer. Any replacement for such removed Senior Officer shall be
selected in accordance with Section 3.11.
Section 3.13. Transferability of Certain Governance Rights.
(a) In connection with the transfer by an Initial Shareholder to any one (1)
Person of twenty percent (20%) or more of the Outstanding Shares in one or more
transactions in accordance with the requirements of Article IV, such Initial
Shareholder by prior written notice to all of the parties hereto, and upon
transfer of such twenty percent (20%) interest, may transfer its existing right
(if any) to nominate three (3) directors or, as the case may be, two (2)
directors, to the Board as provided in Section 3.04(a) to such Person (the "Veto
Transferee"); provided, however, that the right of an Initial Shareholder to
regain the right to nominate three (3) directors or, as the case may be, two (2)
directors, to the Board following a forfeiture of such right pursuant to Section
3.04(a) shall not be transferable, and any purported transfer of such right to
any Person shall be null and void. In the event such Initial Shareholder validly
transfers its transferable rights under Section 3.04(a), such rights may be
subsequently transferred by any subsequent Veto Transferee, subject to the
restrictions applicable to an Initial Shareholder under this Section 3.13(a). On
transferring such right, the transferring Initial Shareholder shall forfeit any
rights it may have enjoyed under Section 3.04(b) and, for the avoidance of
doubt, Section 3.04(a). Veto Transferees shall enjoy the rights, subject to the
obligations, of the transferring Initial Shareholder under Sections 3.04, 3.05,
3.06, 3.08, 3.09, 3.11 and 3.13 hereof and shall otherwise be subject to the
obligations of a Shareholder in accordance with Section 4.06 hereof; provided,
that the rights of the transferring Initial Shareholder under Section 3.08 may
not be transferred to a Person listed in Schedule 3.13 hereto (or to any
Affiliate or successor of any such Person) without the prior written consent of
each Veto Shareholder. For the avoidance of doubt, in no event shall there ever
be more than two (2) Veto Shareholders, except if SBCI Brazil Holding becomes a
Veto Shareholder, in which case there shall never be more than three (3) Veto
Shareholders.
<PAGE>
(b) In connection with the transfer (x) by BCI Investments or
AM Latin America at any time, or (y) by SBCI Brazil Holding after the earlier to
occur of the One Director Date or the Two Director Date, to any one (1) Person
of less than twenty percent (20%) but more than ten percent (10%) of the
Outstanding Shares in one or more transactions in accordance with the
requirements of Article IV, such Initial Shareholder by prior written notice to
all of the parties hereto, and upon transfer of such interest, may transfer to
such Person (the "Director Transferee") its existing right (if any) to nominate
one director to the Board set forth in Section 3.04(b); provided, however, that
the right of an Initial Shareholder to regain the right to nominate one (1)
director to the Board following a forfeiture of such right pursuant to Section
3.04(b) shall not be transferable, and any purported transfer of such right to
any Person shall be null and void. On transferring such right, the transferring
Initial Shareholder (and any subsequent transferring Director Transferee) shall
forfeit any rights it may have enjoyed under Section 3.04(b) and, for the
avoidance of doubt, Section 3.04(a). In the event such Initial Shareholder
validly transfers its transferable rights under Section 3.04(b), such rights, in
addition to all rights as a Shareholder, may be subsequently transferred by any
subsequent Director Transferee, subject to the restrictions applicable to an
Initial Shareholder under this Section 3.13(b). The Director Transferee shall
enjoy the rights, subject to the obligations, of the transferring Initial
Shareholder under Sections 3.04(b), 3.05, 3.06, 3.09(d) and 3.13 hereof and
shall otherwise be subject to the obligations of a Shareholder in accordance
with Section 4.06 hereof; provided, that the rights of the transferring Initial
Shareholder under 3.09(d) may not be transferred to a Person listed in Schedule
3.13 hereto (or to any Affiliate or successor of any such Person) without the
prior written consent of each Veto Shareholder.
ARTICLE IV
RESTRICTIONS ON TRANSFER
Section 4.01. General Restriction. (a) Except as provided in
Section 4.05, each Shareholder agrees that it will not, directly or indirectly,
make or solicit any Sale of, or create, incur, solicit or assume any Encumbrance
with respect to, any Equity Interest in the Company beneficially owned, directly
or indirectly, by such Shareholder other than (i) any Sale by an Initial
Shareholder or Permitted Transferee of such Initial Shareholder of, in the
aggregate, not more than ten percent (10%) of the total Equity Interests of the
Company during the Standstill Period that is made in compliance with the
procedures, and subject to the limitations, set forth in Sections 4.01, 4.03 and
4.06; or (ii) any Sale of Shares (or other Equity Interests of the Company)
after the expiration of the Standstill Period that is made in compliance with
the procedures, and subject to the limitations, set forth in Sections 4.01, 4.03
and 4.06 and, if applicable, Section 4.04. Any and all Sales of Equity Interests
in the Company shall be made in compliance with the Securities Act and other
applicable securities Laws of any other country.
(b) Notwithstanding anything to the contrary contained herein,
each Shareholder agrees that it will not, directly or indirectly, make or
solicit any Sale of any Equity Interest in the Company or any Intermediate
Company or Regulated Opco beneficially owned, directly or indirectly, by such
Shareholder which would be reasonably likely to result in a change of control of
any Regulated Opco in conflict with any Law applicable to the Company or any
Intermediate Company or Regulated Opco or any of their respective properties,
including, without limitation, applicable Brazilian Law, without the prior
written consent of the other Shareholders, which consent may be withheld in such
other Shareholders' sole discretion. Other than by means of a sale of Shares, no
Shareholder shall, directly or indirectly, make or solicit the Sale of, or
create, incur or assume any Encumbrance with respect to, any Equity Interest in
any Subnewco, any Intermediate Company listed in Schedule 3.03(a) of the
Disclosure Schedules of each Venturer (as defined in the Joint Venture
Agreement) or any Regulated Opco, which Equity Interest is beneficially owned,
directly or indirectly, by such Shareholder, except as provided in Section 5.11
or with the prior express written consent of each Veto Shareholder.
<PAGE>
Section 4.02. Legends. (a) The Company shall affix to each
certificate evidencing Shares a legend in substantially the following form:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
UNDER THE SECURITIES LAWS OF ANY CANADIAN PROVINCE OR
TERRITORY. NO REGISTRATION OF TRANSFER OF SUCH SECURITIES WILL
BE MADE ON THE BOOKS OF THE ISSUER UNLESS SUCH TRANSFER IS
MADE IN CONNECTION WITH AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT OR SUCH ACT DOES NOT
APPLY.
THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER AS SET FORTH IN A
SHAREHOLDERS AGREEMENT, DATED AS OF NOVEMBER 16, 2000, AS IT
MAY THEREAFTER BE AMENDED, A COPY OF WHICH IS ON FILE AT THE
PRINCIPAL EXECUTIVE OFFICES OF THE ISSUER. NO REGISTRATION OF
TRANSFER OF SUCH SECURITIES WILL BE MADE ON THE BOOKS OF THE
ISSUER UNLESS AND UNTIL SUCH RESTRICTIONS SHALL HAVE BEEN
COMPLIED WITH.
THE HOLDER OF THE SECURITIES EVIDENCED BY THIS CERTIFICATE IS
ENTITLED TO CERTAIN RIGHTS AND SUBJECT TO CERTAIN OBLIGATIONS
AS SET FORTH IN A SHAREHOLDERS AGREEMENT, DATED AS OF NOVEMBER
16, 2000, AS IT MAY THEREAFTER BE AMENDED, A COPY OF WHICH IS
ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE ISSUER.
(b) In the event that any Shares shall cease to be Restricted
Shares, the Company shall, upon the written request of the holder thereof, issue
to such holder a new certificate evidencing such Shares without the first
paragraph of the legend required by Section 4.02(a) endorsed thereon; provided,
however, that such holder shall furnish the Company or its transfer agent such
certificates, legal opinions or other information as the Company or its transfer
agent may reasonably require to confirm that the legend is not required on such
certificate.
<PAGE>
(c) If any Shares held by a Shareholder shall cease to be
subject to the restrictions on transfer set forth in this Agreement, the Company
shall, upon the written request of such Shareholder, issue to such Shareholder a
new certificate evidencing such Shares without the second paragraph of the
legend required by Section 4.02(a). If any Shares shall cease to be entitled to
any rights and subject to any obligations set forth in this Agreement, the
Company shall, upon the written request of any Shareholder, issue to the holder
thereof a new certificate evidencing such Shares without the third paragraph of
the legend required by Section 4.02(a).
Section 4.03. Rights of First Offer. (a) (i) If, at any time,
any Shareholder (the "Selling Shareholder") shall desire to sell, directly or
indirectly, any or all of the Shares (or other Equity Interests in the Company)
owned by it (the "Offered Shares"), such Selling Shareholder shall deliver a
written notice of its intention to engage in such a Sale of the Offered Shares
(a "Notice of Intention"), accompanied by a copy of a proposal relating to such
Sale, to each of the other Shareholders (the "First Offer Shareholders"), as
well as to the Company, setting forth such Selling Shareholder's intention to
make such Sale, the number of Offered Shares, the price at which such Selling
Shareholder proposes to sell the Offered Shares (the "First Offer Price"),
whether such Selling Shareholder is only prepared to sell all and not part of
the Offered Shares and all other material terms and conditions of the offer. A
Notice of Intention, once given, shall be irrevocable. The Notice of Intention
shall be dated the date it is delivered by the Selling Shareholder to the First
Offer Shareholders and the Company.
(ii) Upon receipt of the Notice of Intention, each First Offer
Shareholder shall have the right to purchase at the First Offer Price (it
being specifically agreed that the consideration may be in the form of
cash, Cash Equivalents or Marketable Securities), subject to any
requirement by the Selling Shareholder that it is willing only to sell all
and not part of the Offered Shares, such number of Shares up to the Pro
Rata Number for such Shareholder; provided, however, that the First Offer
Shareholder may request the right to purchase an additional amount of
Offered Shares as indicated in the Notice of Exercise (as defined below)
given by such First Offer Shareholder. The right of the First Offer
Shareholders pursuant to this Section 4.03(a)(ii) shall be exercisable by
written notice to the Selling Shareholder (the "Notice of Exercise"), which
notice shall state the maximum number of Offered Shares the First Offer
Shareholder is willing to buy, with copies to each of the other First Offer
Shareholders and the Company, within 20 days from the date of the Notice of
Intention (the "First Offer Shareholder Option Period"). The right of the
First Offer Shareholders pursuant to this Section 4.03(a)(ii) shall
terminate if it is not exercised within 20 days of the date of the Notice
of Intention. A Notice of Exercise, once given, shall be irrevocable.
(iii) Upon receipt of the Notices of Exercise, the Selling Shareholder
shall promptly calculate the number of Offered Shares which each First
Offer Shareholder is entitled to purchase. If the Notices of Exercise
indicate that each First Offer Shareholder wishes to purchase at least its
Pro Rata Number, the Offered Shares shall be allocated among the First
Offer Shareholders pro rata. If the Notices of Exercise indicate that one
or more First Offer Shareholders do not wish to purchase their Pro Rata
Number, such of the Offered Shares as are not taken up shall be allocated
on a pro rata basis among the First Offer Shareholders who shall have
indicated that they wish to purchase more than their Pro Rata Number;
provided, however, that no such Shareholder shall be obligated to purchase
more Offered Shares than such Shareholder shall have indicated it is
willing to purchase in its Notice of Exercise.
<PAGE>
(iv) In the event the calculations made in accordance with Section
4.03(a)(iii) would result in the First Offer Shareholders purchasing all or
(except where the Notice of Intention stated that the Selling Shareholder
was prepared to sell all but not part of the Offered Shares) part of the
Offered Shares, the Selling Shareholder shall sell the Offered Shares to
such First Offer Shareholders on the date one hundred ten (110) days
following the date of the Notice of Intention, or such other date as may be
agreed by the Selling Shareholder and the relevant First Offer Shareholders
(the "Settlement Date").
(v) Upon the consummation of any purchase and Sale pursuant to this
Section 4.03(a), the Selling Shareholder shall deliver certificates
evidencing the Offered Shares sold duly endorsed, or accompanied by written
instruments of transfer, in form and substance satisfactory to the
purchaser, duly executed by the Selling Shareholder, free and clear of any
Encumbrance, against delivery of the purchase price for such shares payable
in (i) immediately available funds by wire transfer or check, (ii) Cash
Equivalents or (iii) Marketable Securities. Notwithstanding the foregoing
provisions of this Section 4.03(a), unless the Selling Shareholder shall
have consented to the purchase of less than all of the Offered Shares, no
First Offer Shareholder may purchase any Offered Shares unless all of the
Offered Shares are to be purchased.
(vi) In the event that payment with respect to the Offered Shares is
to be made in whole or in part in Cash Equivalents or Marketable
Securities, the value of such Cash Equivalents or Marketable Securities
shall be the Closing Price of such Cash Equivalents or Marketable
Securities as of the Settlement Date.
(b) In the event the First Offer Shareholders do not exercise
their options to purchase any or all of the Offered Shares and the Selling
Shareholder receives a bona fide offer or offers to purchase or otherwise
acquire the Offered Shares held by such Shareholder, then the Selling
Shareholder shall have the right (subject to the requirements of this Article
IV), for a period of ninety (90) days from the expiration of the First Offer
Shareholder Option Period, to enter into an agreement to sell the Offered Shares
for cash, Cash Equivalents or Marketable Securities at a price not less than the
First Offer Price and on such other terms as set forth in the Notice of
Intention. The Selling Shareholder shall as promptly as practicable sell the
Offered Shares or any remaining Offered Shares, as the case may be, after it
enters into an agreement to sell such Offered Shares, but in any event not later
than ninety (90) days after the date on which the Selling Shareholder enters
into an agreement to sell such Offered Shares.
(c) In the event the Selling Shareholder for any reason shall
not have entered into an agreement to sell all or the remaining Offered Shares
before the expiration of the first ninety (90)-day period described in Section
4.03(b) or shall not have sold the Offered Shares or the remaining Offered
Shares, as the case may be, before the expiration of the second ninety (90)-day
period described in Section 4.03(b), such Selling Shareholder shall not sell the
remaining Offered Shares without again complying with the provisions of this
Section 4.03.
<PAGE>
Section 4.04. Right to Participate in Certain Dispositions.
(a) Subject to Section 4.03, at any time a Shareholder or group of Shareholders
(the "Divesting Shareholder(s)") receives or solicits a bona fide offer or
offers to purchase or otherwise acquire (an "Offer") Shares (or other Equity
Interests in the Company) representing more than forty percent (40%) of the
Outstanding Shares (or other Equity Interests in the Company) and beneficially
owned by such Divesting Shareholder(s) (the "Solicited Shares"), and the
Divesting Shareholder intends to sell such Solicited Shares, the Divesting
Shareholder(s) shall provide written notice (the "Offer Notice") of such Offer
to each of the other Shareholders (the "Tag-Along Shareholders") not later than
the 30th day prior to the consummation of the sale or other disposition
contemplated by the Offer. The Offer Notice shall identify the Solicited Shares,
the price offered for such Solicited Shares (it being specifically agreed that
the consideration may be in the form of cash, Cash Equivalents or Marketable
Securities) and all other material terms and conditions of the Offer (including
any estimated fees or expenses to be shared among the Divesting Shareholder(s)
and any Tag-Along Shareholders pursuant to Section 4.04(c) below), as well as a
copy of the Offer. Each of the Tag-Along Shareholders shall have the right and
option, for a period of twenty-five (25) days after the date the Offer Notice is
given to such Tag-Along Shareholders (the "Notice Period"), to notify the
Divesting Shareholder(s) of such Tag-Along Shareholder's interest in selling or
otherwise disposing of up to the Pro Rata Number of such Tag-Along Shareholder's
Shares (or other Equity Interests) pursuant to the Offer. Each Tag-Along
Shareholder desiring to exercise such option shall, prior to the expiration of
the Notice Period, provide the Divesting Shareholder(s) with a written notice
specifying the number of Shares (or other Equity Interests) which such Tag-Along
Shareholder has an interest in selling or otherwise disposing of pursuant to the
Offer (a "Notice of Interest"), and shall deliver to the Divesting
Shareholder(s) the certificate or certificates evidencing the Shares (or other
Equity Interests) to be sold or otherwise disposed of pursuant to such Offer by
such Tag-Along Shareholder duly endorsed in blank or accompanied by written
instruments of transfer in form satisfactory to the Divesting Shareholders(s)
executed by such Tag-Along Shareholder and delivery of such certificate or
certificates evidencing the Shares (or other Equity Interests) to be sold, shall
constitute an irrevocable election by such Tag-Along Shareholder to authorize
and permit the Divesting Shareholder(s) to sell such Shares (or other Equity
Interests), on behalf of such Tag-Along Shareholder, pursuant to the Offer.
<PAGE>
(b) If the Person(s) making the Offer is or are unwilling to
buy all the Solicited Shares plus all the Shares tendered by Tag-Along
Shareholders in their Notices of Interest, then the Divesting Shareholder(s) and
each Tag-Along Shareholder who wishes to sell shall be entitled to sell a number
of Shares equal to the Pro Rata Number. If any Tag-Along Shareholder wishes to
sell less than all the Shares it is entitled to sell in accordance with the
preceding sentence, the Shares it declines to sell shall be allocated among the
Divesting Shareholder(s) and the Tag-Along Shareholders who wish to sell
additional Shares according to the same formula, mutatis mutandis. The Divesting
Shareholder(s) shall not effect the Sale of any Shares pursuant to the Offer
unless all the Solicited Shares and all of the Shares tendered to the Divesting
Shareholder(s) and entitled to be sold pursuant to this Section 4.04 are
simultaneously sold.
(c) As promptly as practicable after the consummation of the
sale or other disposition of the Shares of the Divesting Shareholder(s) and the
Shares of the Tag-Along Shareholders pursuant to the Offer, the Divesting
Shareholder(s) shall remit to each of the Tag-Along Shareholders the total sales
price of the Shares of such Tag-Along Shareholders sold or otherwise disposed of
pursuant thereto less a pro rata portion of the reasonable out-of-pocket fees
and expenses payable to any Person other than the Divesting Shareholder(s) and
its Affiliates (including, without limitation, reasonable legal expenses)
incurred by the Divesting Shareholder(s) in connection with such sale or
disposition.
(d) If at the end of the Notice Period any Tag-Along
Shareholder shall not have given a Notice of Interest (and delivered all other
required documents) with respect to some or all of the pro rata portion of such
Tag-Along Shareholder's Shares, such Tag-Along Shareholder will be deemed to
have waived all its rights under this Section 4.04. If, at any time the
Divesting Shareholder(s) abandons the proposed sale pursuant to the offer or at
the end of the 45-day period following the giving of the Offer Notice, the
Divesting Shareholder(s) has not completed the sale of all the Solicited Shares
and the Shares with respect to which Tag-Along Shareholders shall have given
Notices of Interest pursuant to this Section 4.04, the Divesting Shareholder(s)
shall promptly return to such Tag-Along Shareholders all certificates evidencing
the unsold Shares that such Tag-Along Shareholders delivered for sale or other
disposition pursuant to this Section 4.04 and the provisions of this Section
4.04 shall apply to any subsequent Sale by the Divesting Shareholder(s) of any
of the Shares initially proposed to be sold in the Offer; provided, however,
that if a Tag-Along Shareholder is unable, notwithstanding its best efforts, to
obtain any necessary consents to the sale of its Shares with respect to which it
has given a Notice of Interest pursuant to this Section 4.04 prior to the
anticipated consummation of the sale, the Divesting Shareholder shall not sell
any of the Solicited Shares prior to the 60th day following the date of the
Offer Notice unless (i) such Tag-Along Shareholder has ceased to use best
efforts to obtain such consents or (ii) such delay would prevent a Divesting
Shareholder from consummating the sale of its Solicited Shares.
(e) Except as expressly provided in this Section 4.04, no
Divesting Shareholder(s) shall have any obligation to any Tag-Along Shareholder
with respect to the Sale or other disposition of any Shares owned by such
Tag-Along Shareholder in connection with this Section 4.04. Anything herein to
the contrary notwithstanding and irrespective of whether any Notice of Interest
shall have been given, no Divesting Shareholder(s) shall have any obligation to
any Tag-Along Shareholder to sell or otherwise dispose of any Solicited Shares
pursuant to this Section 4.04 as a result of any decision by such Divesting
Shareholder(s) not to accept or consummate any Offer or Sale or other
disposition with respect to the Solicited Shares (it being understood that any
and all such decisions shall be made by such Divesting Shareholder(s) in its
sole discretion). No Tag-Along Shareholder shall be entitled to sell or
otherwise dispose of Shares directly pursuant to an Offer (it being understood
that all such sales and other dispositions shall be made only on the terms and
pursuant to the procedures set forth in this Section 4.04).
<PAGE>
Section 4.05. Permitted Transfers. The first sentence of
Section 4.01(a), and Sections 4.03 and 4.04, and subclauses (b) and (c) of the
first sentence of Section 4.06, shall not be applicable to a Sale of Shares by a
Shareholder pursuant to which (a) such Shareholder transfers Shares to a
Permitted Transferee of such Shareholder in compliance with the terms hereof and
(b) the Sponsor Party of the transferring Shareholder (or BCI, if the Sponsor
Party of the transferring Shareholder is BCE, or SBCI, if the Sponsor Party of
the transferring Shareholder is SBCI Parent) guarantees the obligations of the
Permitted Transferee of the transferring Shareholder and enters into a guarantee
and share retention agreement, substantially in the form of Exhibit D to this
Agreement (the "Guarantee and Share Retention Agreement"); provided, that if BCI
or SBCI, as the case may be, does not hold, directly or indirectly, a majority
of economic and voting interest of their respective Permitted Transferees (a
"Sister Transferee"), the share retention obligations set forth in the Guarantee
and Share Retention Agreement shall not apply to such Sister Transferee and the
Guarantee and Share Retention Agreement entered into by BCI or SBCI in respect
of such Sister Transferee shall be modified accordingly; provided, further, that
in the event any transferee acquiring Shares pursuant to this Section 4.05 would
for any reason cease to be a Permitted Transferee, the Sponsor Party of such
transferee shall, prior to such cessation, cause such transferee to transfer all
Shares so acquired to a Permitted Transferee of such Sponsor Party, which
transfer shall comply with the terms of this Section 4.05 and clause (a) of the
first sentence of Section 4.06. The transferring Shareholder shall notify the
other Shareholders of any transfer of Shares to a Permitted Transferee and shall
provide evidence of its compliance with the provisions of this Section 4.05 and
clause (a) of the first sentence of Section 4.06, including delivery of an
executed Guarantee and Share Retention Agreement in accordance with this Section
4.05.
Section 4.06. Prospective Transferees; Guarantee and Share
Retention Agreement. Each Shareholder agrees that it will not directly or
indirectly make any Sale of, or create, incur or assume any Encumbrance with
respect to, any Shares held by such Shareholder unless, prior to the
consummation of any such Sale or the creation, incurrence or assumption of any
such Encumbrance, the Person to whom such Sale is proposed to be made or the
Person in whose favor such Encumbrance is proposed to be created, incurred or
assumed (for purposes of this Section 4.06, a "Prospective Transferee") (a)
executes and delivers to the Company an Accession Certificate in the form
attached as Exhibit E hereto (the "Accession Certificate"), whereby such
Prospective Transferee confirms that, with respect to the Shares that are the
subject of such Sale or Encumbrance, it shall be deemed to be a Shareholder for
the purposes of this Agreement and agrees to be bound by all the terms of this
Agreement, (b) causes its ultimate parent company to execute and deliver a
Guarantee and Share Retention Agreement, in form and substance reasonably
satisfactory to the Company and to agree to be bound by the provisions of
Sections 4.05, 5.05 and 5.07 and Article VI hereof, and (c) delivers to the
Company a written opinion of counsel, satisfactory in form and substance to the
Company, to the effect that the agreements referred to above are the legal,
valid and binding obligation of such Prospective Transferee and its ultimate
parent company, enforceable against such Prospective Transferee and its ultimate
parent company in accordance with their terms. The Company shall execute such
Accession Certificate upon verification that the terms of this Article IV have
been satisfied. Upon (i) satisfaction of the requirements of this Article IV,
(ii) the execution and delivery by such Prospective Transferee, the transferring
Shareholder and the Company of the Accession Certificate referred to in clause
(a) above, (iii) the execution and delivery of the agreement referred to in
clause (b) above, and (iv) the delivery of the opinion of counsel referred to in
clause (c) above, such Prospective Transferee shall be deemed a "Shareholder"
for the purposes of this Agreement, and shall have the rights and be subject to
the obligations of a Shareholder hereunder with respect to the Shares held by
such Prospective Transferee or in respect of which such Encumbrance shall have
been created, incurred or assumed.
<PAGE>
Section 4.07. Improper Sale or Encumbrance. Any attempt to
make any Sale of, or create, incur or assume any Encumbrance with respect to,
any Shares not in compliance with this Agreement shall be null and void and the
Company shall not be required to give any effect in the Company's register of
members to such attempted Sale or Encumbrance.
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.01. Financial Statements. The Company shall prepare
and deliver to each Shareholder (i) monthly Interim Financial Statements for
each fiscal month within 30 days of the end of each fiscal month and (ii)
quarterly Interim Financial Statements for each fiscal quarter within 45 days of
the end of each fiscal quarter. The Company shall prepare and deliver Financial
Statements to each of the Shareholders within 60 days of the end of each fiscal
year.
Section 5.02. Access to Information. From and after the date
of the Closing, the Company and each of the Company Subsidiaries will permit
representatives of any of the Shareholders, at such Shareholder's expense and
upon reasonable notice, to obtain all documents and other information in the
possession of the Company as may reasonably be requested in order to enable any
such Shareholder to monitor its investment in the Company and exercise its
rights under this Agreement.
Section 5.03. Confidential Information. During the Restricted
Period applicable to each Shareholder, each Shareholder agrees to keep all
Confidential Information confidential, except Confidential Information that (a)
is or becomes generally available to the public (other than as a result of a
disclosure by such Shareholder or any Affiliate of such Shareholder in breach of
this Agreement), (b) the Company agrees in writing may be disclosed, (c) the
Company or any Shareholder is required, pursuant to Law, regulation, legal
process or regulatory authority to disclose, (d) is developed independently by
such Shareholder and is not based on or derived from Confidential Information
previously disclosed by other Shareholders, or (e) is known to such Shareholder
prior to its disclosure to the Company. The term "Confidential Information"
means all information relating to trade secrets, price, customer and supplier
lists, pricing and marketing plans, policies and strategies, details of client
and consultant contracts, operations methods, product development techniques,
business acquisition plans, new personnel acquisition plans, investment
processes, systems, strategies and related data and all other confidential
information with respect to the Company or any Company Subsidiary. The parties
hereto agree and acknowledge that remedies at Law for any breach of their
obligations under this Section 5.03 are inadequate and that in addition thereto
the Company shall be entitled to seek equitable relief, including injunction and
specific performance, in the event of any such breach.
<PAGE>
Section 5.04. Certain Issuances of New Securities. (a) If the
Company proposes to issue New Securities, other than pursuant to a bonus issue,
an initial public offering or other pro rata distribution to Shareholders, the
Company hereby grants to the Shareholders the right to purchase, in accordance
with Section 5.04(b), New Securities which the Company proposes to issue pro
rata, based on each Shareholder's Equity Interests in the Company.
(b) In the event that the Company proposes to issue New
Securities, subject to Section 5.04(a), the Company shall give each Shareholder
a written notice (a "Notice of Issuance") of its intention, describing all
material terms of the New Securities and the price and all material terms upon
which the Company proposes to issue such New Securities. Each Shareholder shall
have ten (10) Business Days from the date of the Notice of Issuance to agree to
purchase all or any portion of its pro rata share of such New Securities;
provided, however, that if the Company is proposing to issue New Securities for
consideration other than all cash, the Company shall accept from the
Shareholders either non-cash consideration that is reasonably comparable to the
non-cash consideration specified in the Notice of Issuance or cash in an amount
equal to the fair market value of the non-cash consideration which shall be
specified in the applicable Notice of Issuance. Any purchase by any Shareholder
of New Securities shall be consummated on the date on which all other New
Securities described in the applicable Notice of Issuance are issued.
(c) In the event that any Subnewco proposes to issue any
Capital Stock, each Shareholder shall, and shall cause each Subnewco to, grant
to the Company the right to purchase all such Capital Stock.
(d) In the event that any Intermediate Company or Regulated
Opco proposes to issue any Capital Stock, each Shareholder agrees, and shall
cause the Company and each Subnewco to agree, subject to Section 3.08(b), that
it shall cause the Company or the relevant Company Subsidiary to subscribe the
amount of such Capital Stock offered to it sufficient to prevent the reduction
of the percentage of the Capital Stock of such Intermediate Company or Regulated
Opco held by the Company or such Company Subsidiary.
Section 5.05. Referral of Opportunities. (a) The Shareholders
and their respective Sponsor Parties agree that they intend for the Company to
be their principal vehicle for the pursuit of business opportunities arising in
the Communications Sector in the Joint Venture Area.
[One and a half pages of materials omitted.]
Section 5.06. Affiliate Transactions. Each Shareholder agrees
to use its best efforts to ensure that any transaction or agreement between or
among such Shareholder or any of its Affiliates and the Company, any Company
Subsidiary or any Minority Investee shall be on terms no less favorable to the
Company or any such Company Subsidiary or Minority Investee than the terms and
conditions generally offered by such Shareholder and its Affiliates, as the case
may be, to the most favored non-affiliated customers of such Shareholder or
Affiliates for transactions or agreements of a similar nature.
<PAGE>
Section 5.07. Consolidation of the Company and BCI. (a) The
Shareholders agree that as between the Company and BCI, there shall only ever be
one public company subject to the ongoing reporting obligations of sections 13
or 15(d) of the Exchange Act, except as may otherwise be provided in subsection
(c) of this Section 5.07. If BCI proposes that the Company pursuant to a
Qualified Offer be consolidated with, merged into, amalgamated with or otherwise
become controlled by the Surviving Entity pursuant to any merger, consolidation,
amalgamation, reorganization, exchange offer or similar transaction (the
"Consolidation"), BCI shall deliver to the parties hereto a written notice (the
"Consolidation Notice") setting forth all proposed material terms of such
Consolidation. Such proposed Consolidation may be effected by BCI in accordance
with this Section 5.07 only if (i) no adverse tax consequences arise from such
transaction which are material for any of the Shareholders or their successors,
assigns and transferees or a substantial portion of the other public
shareholders, if any, of the Company relative to their respective investment in
the Company, and (ii) all of the Qualified Offer Conditions set forth in Section
5.07(d) have been satisfied (the conditions set forth in subclauses (i) and
(ii), the "Consolidation Conditions"). To the extent reasonably requested by any
Shareholder after consideration of (i) any potential adverse tax consequences
arising from or related to such Consolidation and (ii) the ability of BCE to
discharge all of its obligations under the BCE Indemnity Agreement (as defined
below) based on the financial condition of BCE at the date of the Consolidation
Notice, BCI shall provide the Shareholders with (A) the written opinion of legal
counsel reasonably satisfactory to the Shareholders or (B) a ruling from the
applicable taxing authorities regarding the tax-free nature of the Consolidation
(which, in the case of each of (A) and (B), shall be reasonably satisfactory to
the Shareholders); failure to provide such requested ruling or opinion shall be
deemed to be a failure to satisfy the Consolidation Conditions. BCE shall agree
to indemnify the Shareholders (other than BCI Investments), their respective
Affiliates and Specified Assigns and certain successors, assigns and transferees
from any Losses associated with any adverse tax consequences arising as a result
of or relating to any such Consolidation by execution prior to Consolidation of
a separate instrument in respect thereof in the form set forth in Exhibit G
hereto (the "BCE Indemnity Agreement"). Unless the Shareholders unanimously
agree otherwise, the accounting policies, headquarters location, name,
management practices and other material characteristics of the Company in effect
prior to the Consolidation will be preserved following the Consolidation. Each
of BCE, BCI and BCI Investments shall permit each Shareholder and their
respective representatives and advisors to conduct reasonable due diligence
investigations of BCE, BCI and BCI Investments and their Subsidiaries relating
to the Consolidation to evaluate the tax consequences of any such transaction
and to determine whether the Qualified Offer Conditions have been satisfied.
(b) If BCI delivers a Consolidation Notice and the
Consolidation Conditions have been satisfied, the Shareholders agree that they
shall negotiate in good faith regarding the timing of consolidating the Company
into the Surviving Entity with the objective of causing the Company to effect
the Consolidation within one year from the date that the Consolidation
Conditions have been satisfied. If, after consultation with BCI Investments, any
Veto Shareholder reasonably concludes that market conditions are then adverse to
the Consolidation of the Company and BCI, each of AM Latin America and SBCI
Brazil Holding shall have the right to postpone such Consolidation until the
earlier of (i) such time as the Shareholders unanimously agree that market
conditions are favorable to such Consolidation or (ii) the first year
anniversary of the date that such Qualified Offer Conditions were first
satisfied in full. If such Consolidation has not occurred on or prior to the
termination of the period referred to in clause (ii) in the immediately
preceding sentence, subject to satisfaction of the Consolidation Conditions,
BCI, directly or indirectly, may deliver a Consolidation Notice and acquire all,
but not less than all, of the Shares pursuant to the Qualified Offer.
<PAGE>
(c) If prior to satisfaction of the Consolidation Conditions,
the AM Latin America Directors and the SBCI Directors (if any) have voted in
favor of an initial public offering of the Capital Stock of the Company at a
duly convened meeting of the Board (the "Approval Date"), and the BCI Directors
shall have voted against such initial public offering at such meeting of the
Board, the chief financial officer of BCI shall certify in writing to AM Latin
America and SBCI Brazil Holding whether it has reasonable commercial grounds
(other than its desire to preserve its opportunity hereunder to make a Qualified
Offer) for opposing such initial public offering, detailing any such grounds in
such certification within fifteen (15) days after exercising its veto right
under Section 3.08(b)(ii). If BCI Investments does not have reasonable
commercial grounds for opposing such initial public offering or otherwise fails
to deliver such certification, BCI Investments will have 180 days from the
Approval Date to satisfy the Consolidation Conditions and, subject to
satisfaction of the Consolidation Conditions, to make a Qualified Offer to the
Shareholders. In the event BCI Investments is unable to satisfy the
Consolidation Conditions within 180 days of the Approval Date, the Company shall
be permitted to undertake such initial public offering and BCI Investments,
together with the other Shareholders, shall take all necessary action to cause
the Company to undertake such initial public offering. If the Company completes
an initial public offering in accordance with the terms of this Section 5.07(c)
and the Consolidation Conditions are met at a future date, BCI Investments will
be entitled, subject to satisfaction of the Consolidation Conditions, to make a
Qualified Offer to the Shareholders. For greater certainty, except as
specifically set forth in this Section 5.07(c), each Veto Shareholder shall
retain its veto right under Section 3.08(b)(ii).
(d) Shareholders shall only be obliged to accept a Qualified
Offer if each of the conditions listed below (the "Qualified Offer Conditions")
are satisfied at the time of the Qualified Offer and at the time of
Consolidation. The Qualified Offer Conditions are:
(i) BCI does not have any interests in any business or own any
operating assets other than the Company;
(ii) BCI has sufficient cash to meet all remaining obligations for
payment under the terms of all of its outstanding Indebtedness, including
any remaining obligations under its Promissory Note and Special Notes (the
"Defeasance Amount") and shall have established a cash reserve in the
amount of the Defeasance Amount to be used exclusively to pay such
liabilities;
(iii) BCI is listed on either the New York Stock Exchange or Nasdaq
National Market System (or any other exchange acceptable to all the
Shareholders);
<PAGE>
(iv) Subject to Section 5.07(f) below, the number of Surviving Entity
Shares offered to each Shareholder (other than BCI Investments and its
Permitted Transferees) for each Share then held by each such Shareholder is
equal to the Exchange Ratio and no new Surviving Entity Shares are offered
or issued to BCI Investments in respect of its Shares;
(v) all disproportionate voting rights shall have terminated, the
voting rights of each Shareholder shall be commensurate with their economic
interest in the Company and the transactions described in Section 5.11
shall have been consummated;
(vi) BCI Investments shall have complied with the provisions of
Section 5.07(a) hereof;
(vii) the Veto Shareholders and BCE will have entered into a
registration rights agreement in the form of Exhibit F to this Agreement
(the "Registration Rights Agreement"), which Registration Rights Agreement
shall supercede the registration rights agreement, dated October 6, 1997,
between BCE and BCI;
(viii) BCI Investments is a Veto Shareholder and shall not have
entered into any contract or other agreement to sell or otherwise dispose
of its Shares;
(ix) BCE and BCI shall have duly executed and delivered to each of the
Shareholders, as indemnitees thereunder, the BCE Indemnity Agreement, and
shall have delivered the related legal opinion of counsel reasonably
acceptable to the Shareholders (other than BCI Investments) substantially
in the form set forth in Exhibit H hereto;
(x) BCE has consented in writing to the Consolidation; and
(xi) BCE has entered into a Guarantee and Share Retention Agreement in
a form reasonably acceptable to the Shareholders; provided, that BCE shall
not be obligated to enter into such agreement if it is a direct shareholder
of the Company (or the Surviving Entity) and covenants to enter into such
an agreement in the event it ceases to be a direct shareholder of the
Company or the Surviving Entity while maintaining a direct or indirect
ownership interest in the Company or the Surviving Entity.
(e) Immediately following the Consolidation, BCE shall enter
into a shareholders agreement with the Shareholders hereunder, containing rights
and obligations substantially similar to those set forth in this Agreement, and
the rights and obligations of BCI Investments in the Transaction Documents shall
become the rights and obligations of BCE (other than BCI Investments's
obligations under its Promissory Note and its Special Notes, which shall have
been defeased by BCI on or prior to Consolidation).
(f) To the extent that, prior to the time of calculation of
the Exchange Ratio for purposes of Section 5.07(d)(iv), the Company has issued
any Equity Interests other than Common Stock or Series C Shares, or the
Surviving Entity has issued any Equity Interests other than Surviving Entity
Shares, the Shareholders will agree to amend the terms hereof and the BCE
Indemnity Agreement in such a manner as to give effect to the original intention
of the Shareholders with regard to (i) the ownership of economic and voting
interests in the Surviving Entity after the Consolidation and (ii) the economic
terms of, and the parties rights and obligations under, the BCE Indemnity
Agreement.
<PAGE>
(g) Promptly after receiving a Consolidation Notice, the
Shareholder and the Sponsor Parties shall make good faith efforts to consult
with BCI regarding any potential adverse tax consequences which may arise with
respect to the proposed Consolidation.
(h) In the event any Material Tax Change occurs after the date
of the Amended and Restated Joint Venture Agreement, the form of the BCE
Indemnity Agreement shall be amended by BCE and the parties hereto to provide
indemnification to the Shareholders regarding such Material Tax Change. If the
parties fail, after engaging in good faith negotiations, to agree to such
amendments or to the amendments referred to in Section 4.05(c) of the Initial
Joint Venture Agreement, BCI shall not be permitted to deliver a Consolidation
Notice or cause the Consolidation to be consummated.
(i) The Shareholders shall not implement any tax planning
measures designed solely to cause any proposed Consolidation to fail to satisfy
the first Consolidation Condition set forth in Section 5.07(a).
(j) AM Latin America and SBCI Brazil Holding shall have the
right to cause a redomiciliation and/or reorganization (the "Reorganization") of
the Company (or the Surviving Entity) either prior or subsequent to the
Consolidation if the Canadian corporate resident status of such entity creates
or would create any adverse Tax or other business, financial or economic
consequences (as determined by the Initial Shareholders, other than BCI
Investments) to any of such Shareholders, their respective Sponsor Parties, or
other Shareholders holding at least ten percent (10%) of the Outstanding Shares,
which consequences are material for any of such Shareholders or their respective
Sponsor Parties relative to their respective investments in the Company. For the
avoidance of doubt, if such Shareholders determine prior to the Consolidation
that the Canadian corporate resident status of the Company (or the Surviving
Entity) would create such adverse consequences, the Consolidation shall not be
effected until agreement has been reached with respect to the Reorganization;
provided, however, if BCI Investments agrees with SBCI Brazil Holding and AM
Latin America in respect of the Reorganization, nothing set forth in this
Section 5.07(j) shall otherwise permit SBCI Brazil Holding and AM Latin America
to prevent the Consolidation. The new situs of the Surviving Entity outside of
Canada and form of Reorganization shall be determined by negotiation among the
Shareholders holding at least ten percent (10%) of the Outstanding Shares acting
in good faith, with a view toward implementing the most Tax efficient corporate
structure for the Shareholders, their respective Sponsor Parties and the Company
(or the Surviving Entity) as a going concern. In considering the form of any
such Reorganization, the liabilities of all the parties that would arise in
connection with such Reorganization shall be taken into account. Any costs or
liabilities related to the Reorganization shall be borne by the Company (or the
Surviving Entity). If the Shareholders are unable to agree on the new situs
outside of Canada and/or the form of the Reorganization after good faith
negotiations, any party shall have the right to treat such lack of agreement as
a Dispute subject to Sections 6.14 and 6.15.
(k) Each Shareholder undertakes to cooperate with each other
Shareholder and to act in good faith with respect to the consummation of the
Consolidation and Reorganization (if any), including, without limitation, to
enter into any arrangement with a Tax authority if such arrangement would be
necessary to avoid any material Tax liabilities of such Shareholder and would
not otherwise have any significant adverse consequences to such Shareholder, its
Sponsor Party or any Affiliate of its Sponsor Party.
<PAGE>
Section 5.08. Registration Rights. None of the Company, BCI
Investments, BCE or BCI, without the prior written consent of each of the Veto
Shareholders, shall enter into any agreement providing for registration rights
with respect to the Capital Stock of BCI or the Company other than the
Registration Rights Agreement.
Section 5.09. Voting Structure. [ ].
Section 5.10. Additional Capital Contributions. Subject to the
identification of appropriate business opportunities and the decision by each
Shareholder to pursue such opportunities, the Shareholders' current intention is
to consider opportunities to make available to the Company an additional $1.0
billion of investment capital to support the development of new projects,
subject to any veto rights of any of the Shareholders and, subject further, to
each Shareholder's absolute and unconditional right, in its sole discretion, to
change its current intention to consider making additional capital available to
the Company. It is understood that the first sentence of this Section 5.10 shall
not create any obligation on the part of any Shareholder or Sponsor Party to
make any additional investment capital available or to approve any capital
increase or create any right of the Company or any Shareholder to receive any
capital.
Section 5.11. Unwind. [ ].
Section 5.12. Future Acquisitions. Subject to applicable Law,
until the Unwind Date, all future acquisitions made by the Company or any
Company Subsidiary shall, to the extent permitted by applicable Law, be held by
the Company directly.
Section 5.13. Default. (a) If any Shareholder (a "Defaulting
Party") fails to make payment with respect to or to perform any Outstanding
Obligation or any share issuance approved pursuant to Section 3.08(b) and to
which such Shareholder has agreed to subscribe pursuant to Section 5.04(b)
within ten (10) Business Days of the date due (the "Due Date"), interest shall
accrue on any unpaid amount or, in the case of America Movil's Outstanding
Obligation to contribute the Techtel Amount (as defined in the Amended and
Restated Joint Venture Agreement) to the Company pursuant to Section 2.03(c) of
the Amended and Restated Joint Venture Agreement, on the value attributed to
such obligation (the "Default Amount") at a rate per annum of 200%, or, if
lower, the maximum rate permitted by applicable law (the "Default Rate") from
the Due Date until the date paid in full together with all interest accrued
thereon (based on the actual number of days elapsed over a 360-day year).
(b) Any Shareholder (an "Advancing Party") may upon written
notice to the other Shareholders and the Company, advance all or a portion of
the Default Amount in lieu of the Defaulting Party. If more than one Shareholder
provides such a notice, such Shareholders shall have the right to fund their pro
rata portion of the Default Amount, based on the percentage of Outstanding
Shares held by such Shareholders, or such other portion as may be agreed by such
Shareholders. In the event that any Shareholder advances all or a portion of the
Default Amount in lieu of a Defaulting Party, the obligation of the Defaulting
Party to make payment to the Company of the Default Amount, together with
accrued interest, shall be deemed assigned to the Advancing Party or Parties in
proportion to the percentage of the Default Amount advanced by such Advancing
Party.
<PAGE>
(c) In the event that the Defaulting Party has not made
payment in full of the Default Amount, together with all accrued interest, or
performed its Outstanding Obligations and paid all accrued interest owed
thereunder, to the Company or the Advancing Parties, as appropriate, within one
hundred eighty (180) days after the Due Date, the Company shall issue new Shares
to the Advancing Parties and, in the case of a default by a Defaulting
Shareholder under its Promissory Note or, if applicable, its Special Notes,
purchase, for a total amount of $1.00, an equal number of Shares previously
issued to the Defaulting Party in amounts sufficient to dilute the Equity
Interests of the Defaulting Party in the Company, and reflecting (i) any
advances made by Advancing Parties, (ii) amounts paid by other Shareholders
pursuant to the Outstanding Obligations or share issuance, as the case may be,
(iii) all interest accrued on the Default Amount pursuant to Section 5.13(a),
(iv) the fair market value of the Company at the Due Date, as determined in
accordance with clause (d) below, and (v) Equity Interests, if any, issued to
the other Shareholders at the time of such payment. All Shareholders will be
deemed to have consented to such issuance of Shares. For the purpose of
effecting a purchase of Shares in accordance with this Section 5.13(c), each
Shareholder hereby irrevocably appoints the Company to be its attorney, and in
its name and on its behalf to do all acts and things, execute any document or
complete any transfer that the Company may require in order to complete such
purchase, and each Shareholder hereby agrees to ratify and confirm any act of
the Company in connection therewith. Notwithstanding any such issuance of
Shares, all interest accrued on the Default Amount pursuant to Section 5.13(a)
at the time of such issuance (the "Default Interest Amount") shall be deemed due
and owing by the Defaulting Shareholder to the Company and interest shall accrue
on the Default Interest Amount at the Default Rate until the Default Interest
Amount, together with all interest accrued thereon, is paid in full.
(d) For purposes of the preceding clause (c), the fair market
value of the Company shall be determined in accordance with the following
procedure. Within ten (10) Business Days following the 180-day period referred
to in clause (c) above, the Defaulting Party shall select one of the investment
banks listed in Schedule 5.13, and the Company shall select one of the
investment banks listed in Schedule 5.13. In the event that none of the
investment banks listed in Schedule 5.13 accepts an engagement from the
Defaulting Party or the Company, as the case may be (through no fault of the
Defaulting Party or the Company, as the case may be) and there are no other
investment banks listed in Schedule 5.13 from whom such party may choose and
which are prepared to accept selection or referral, as the case may be, the
Defaulting Party or the Company, as the case may be, shall choose an investment
banking firm of international standing in the United States which does not, and
whose directors, officers, employees or Affiliates do not, have a direct or
indirect material financial interest for its proprietary account in the
Defaulting Party or the Company, as the case may be, or any of their respective
Affiliates. Within thirty (30) days of its acceptance of such selection, each
selected investment bank shall determine independently the fair market value of
the Company and provide such valuation in writing to each of the Shareholders
and the Company. If the difference between such two valuations is twenty percent
(20%) or less, the fair market value of the Company shall be deemed to be the
average of such two valuations. If the difference between such two valuations is
greater than twenty percent (20%), and if the Defaulting Party and the Company
are otherwise unable to agree which valuation is correct, within 270 days after
the Default Date the matter shall be referred by the Company to the Company's
accountants, which accountants shall select one of the two valuations as being
closest to the fair market value of the Company as of the Default Date. Such
accountants shall make such selection within thirty (30) days after such
referral. The decision of such accountants shall be final, conclusive and
binding on all parties, and shall not be subject to arbitration pursuant to
Section 6.15. All costs incurred by the non-defaulting Shareholders and the
Company in connection with obtaining the valuations referred to above shall be
borne by the Defaulting Party.
<PAGE>
Section 5.14. Additional Tax Matters. (a) For so long as the
tax structure in respect of the Company and its Subsidiaries described in
Exhibit J is in effect (the "Initial Structure"), except as approved by a
Qualified Vote in accordance with Section 3.08(b), the Company shall be operated
so that neither it nor any of its Subsidiaries that is located in a tax haven
for purposes of the Mexican income tax law (Ley de Impuestos Sobre la Renta,
Titulo 1, Disposiciones Generales, Articulo 5(b) (the "Neutral Provisions") will
have any income that gives rise to any Mexican income tax payable by America
Movil or any of its Mexican Subsidiaries. In addition, for so long as the
Initial Structure is in effect, notwithstanding any other provision contained
herein, AM Latin America, on behalf of itself and America Movil may elect at any
time, in its sole discretion to cause the Company and certain of its
Subsidiaries to adopt, either the Danish Structure or the Netherlands-Danish
Structure, set forth in Exhibit J hereto (the "Alternate Structure") by
delivering the Structure Notice (as defined below) to the other Shareholders and
the Shareholders shall take all necessary actions to give effect to such
election; provided, however, if any change or modification in the tax laws of
Denmark (in the case of the Danish Structure) or Denmark or the Netherlands (in
the case of the Netherlands-Danish Structure) takes place after the date hereof
but prior to the date of the Structure Notice which would materially adversely
affect the tax position of any Veto Shareholder as a Shareholder of the Company
under the relevant Alternate Structure, the Veto Shareholders shall negotiate in
good faith to agree to a substitute tax structure, and until such agreement is
reached, no Structure Notice may be given that specifies an Alternate Structure
based in the tax jurisdiction in which such change or modification has occurred;
provided, further, that each Shareholder shall be deemed to have agreed to any
proposed substitute tax structure under which its net tax obligations are equal
to or less than the net tax obligations it would have incurred under the Danish
Structure or the Netherlands-Danish Structure absent any such change in law. For
purposes of this Section 5.14, "Structure Notice" shall mean a certificate
signed by a senior officer of AM Latin America, on behalf of itself and America
Movil, stating that implementation of the Alternate Structure specified therein
will avoid adverse tax consequences for America Movil and its Mexican
Subsidiaries. Such Alternate Structure shall be implemented within 30 days
following the date of such notice or as soon as practicable thereafter. The
costs, expenses and losses incurred by the Company or any Shareholder in
implementing such Alternate Structure shall be borne by the Company.
<PAGE>
(b) Notwithstanding Section 3.08(b), in the event of a
Material Tax Change (as defined below) after Consolidation, the Veto
Shareholders (other than any Affiliate of BCE) acting jointly shall have the
right to cause the Company to reorganize or redomicile in a new jurisdiction,
and the other Shareholders shall take all action necessary to cause the Company
to effect such reorganization or redomicilation. The costs, expenses and losses
incurred by the Company or any Shareholder in carrying out any such
reorganization or redomicilation shall be borne by the Company. Any change or
modification in any tax Laws (including treaties) of Canada or any political or
taxing subdivision thereof that would materially adversely affect any of SBCI or
America Movil or any of its Mexican Subsidiaries (as shareholders in a Canadian
company) or the Company (including, without limitation, any change in (i) the
effective income tax rate applicable to the Company, (ii) withholding taxes
applicable to dividends paid to SBCI, AM Latin America or America Movil or any
of its Mexican Subsidiaries, or the Company, (iii) taxes incurred upon the Sale
by SBCI or AM Latin America or America Movil or any of its Mexican Subsidiaries,
directly or indirectly, of any Equity Interests in the Company, (iv) taxes
assessed upon interest income earned by SBCI, AM Latin America or America Movil
or any of its Mexican Subsidiaries, or the Company, or (v) taxes payable by the
Company in respect of interest payments made) shall be deemed a "Material Tax
Change";
Section 5.15. BCE and SBCI Parent Guarantee and Share
Retention Agreement. (a) In the event that BCI owns no material assets other
than its interest in the Company, BCE shall execute a Guarantee and Share
Retention Agreement substantially in the form set forth in Exhibit D hereto,
guaranteeing the obligations of any of its Subsidiaries which are Shareholders
hereunder.
(b) In the event that SBCI owns no material assets other than
its interest in the Company, SBCI Parent shall execute a Guarantee and Share
Retention Agreement substantially in the form set forth in Exhibit D hereto,
guaranteeing the obligations of any of its Subsidiaries which are Shareholders
hereunder.
<PAGE>
Section 5.16. Subnewco4. Effective as of the date hereof and
for so long as the Exchangeable Debenture Agreement dated as of November 16,
2000 among SBCI Brazil Holding, the Company and Subnewco4 remains outstanding
(such period, the "Payment Period"), SBCI Brazil Holding hereby assigns and
sells to the Company any and all rights of SBCI Brazil Holding or any Affiliate
of SBCI Brazil Holding to receive any distribution, whether in cash or in kind
or in the form of a dividend or otherwise, in respect of the Equity Interests of
Subnewco4, and the Company hereby accepts such assignment from SBCI Brazil
Holding. Any such distribution received by SBCI Brazil Holding or any Affiliate
during the Payment Period or, if received following the Payment Period, to which
SBCI Brazil Holding or any Affiliate became entitled during the Payment Period,
shall be received and held in trust for the benefit of the Company, shall be
segregated from other property and funds, and shall forthwith be paid or
delivered to the Company in the same form so received (with any necessary
endorsement and assignment).
Section 5.17. Compliance with ANATEL Written Confirmation.
Each of the parties hereto shall take all necessary action to amend the terms of
this Agreement and the other Transaction Documents, as applicable, to (i) comply
with the terms of the letter to SBCI, BCI and America Movil (as successor in
interest to Telmex), dated November 10, 2000, from Sr. Amadeu de Paula Castro
Neto, Executive Superintendent of ANATEL (the "ANATEL Letter"), including,
without limitation, with respect to the issue of control by BCI over Subnewco4
and by SBCI and America Movil over Subnewco1 contained in the third paragraph of
the ANATEL Letter, and (ii) comply with the terms of that certain letter to the
Executive Superintendent of ANATEL, dated November 9, 2000, from BCI, America
Movil and SBCI concerning reducing the Company's ownership of the voting capital
of each of Subnewco1 and Subnewco4 to 19.99% within twenty (20) days following
the Closing Date. Furthermore, the parties hereto agree that, to the fullest
extent permitted by applicable Brazilian law and regulations, including, without
limitation, the terms of the ANATEL Letter, in structuring the reduction of the
Company's ownership of each of Subnewco1 and Subnewco4 as contemplated in the
ANATEL Letter, the parties will use their reasonable best efforts to transfer or
otherwise provide for the right to acquire all or a portion of the voting
capital in Subnewco1 and Subnewco4 held by the Company in excess of 19.99% to AM
Latin America or its Permitted Transferee, and will negotiate in good faith the
terms of any such transfer, including the structuring of such transfer in such a
manner as to avoid any Taxes applicable to the Company, AM Latin America or AM
Latin America's Permitted Transferee as a result of such Transfer.
Section 5.18. Reserve of Promissory Notes. The Company shall,
and each of the Shareholders shall cause the Company to, hold in reserve the
Promissory Notes to cover certain obligations of each of SBCI and America Movil
assumed by the Company pursuant to an Assumption Agreement, dated as of November
16, 2000, among SBCI, America Movil and the Company (the "Assumption
Agreement"), as set forth in this Section 5.18. For the period during which any
Promissory Note shall remain outstanding, the Company shall, and each of the
Shareholders shall cause the Company to, hold in reserve and not draw upon or
otherwise encumber or utilize the Promissory Notes in respect of the aggregate
principal amount of $200,000,000, comprised as follows: (i) $100,000,000 with
respect to the SBCI Assumed Obligations (as such term is defined in the
Assumption Agreement); and (ii) $100,000,000 with respect to the AM Assumed
Obligations (as such term is defined in the Assumption Agreement). The aggregate
principal amount of the Promissory Notes prior to their repayment or prepayment
as set forth above shall be held in reserve by the Company and may not be drawn
upon or otherwise encumbered or utilized by the Company without the prior
written consent of each of SBCI and America Movil until (A) all the SBCI Assumed
Obligations and AM Assumed Obligations have been paid in full and fully
discharged or (B) the Company has obtained the unconditional release of each of
SBCI and America Movil with respect to all of the SBCI Assumed Obligations and
AM Assumed Obligations covered by the Assumption Agreement.
<PAGE>
ARTICLE VI
MISCELLANEOUS
Section 6.01. Conflict with Memorandum of Association or Bye-Laws. In the event
that any provision of this Agreement conflicts with any provision of the
Memorandum of Association or the Bye-Laws, the terms of this Agreement shall
prevail, and each Shareholder shall vote all of the shares of Common Stock and
Series C Shares that it holds of record, and shall take all actions necessary,
to ensure that at all times that the Memorandum of Association and the Bye-Laws
of the Company do not conflict with any provision of this Agreement.
Section 6.02. Expenses. Except as otherwise specified in this Agreement, all
costs and expenses, including, without limitation, fees and disbursements of
counsel, financial advisors and accountants, incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses.
Section 6.03. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made (and
shall be deemed to have been duly given or made upon receipt) by delivery in
person, by courier service, by facsimile, or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties at the
following addresses (or at such other address for a party as shall be specified
in a notice given in accordance with this Section 6.03):
(a) if to BCI Investments or BCI:
Bell Canada International Investments Limited/
Bell Canada International Inc.
c/o Bell Canada International Inc.
1000, rue de La Gauchetiere Ouest
Suite 1100
Montreal, Quebec
H3B 4Y8 Canada
Facsimile: (514) 392-2470
Attention : Chief Executive Officer
<PAGE>
with a copy to:
Bell Canada International Inc.,
1000, rue de La Gauchetiere Ouest
Suite 1100
Montreal, Quebec
H3B 4Y8 Canada
Facsimile: (514) 392-2342
Attention: Vice President Law and Corporate Secretary
and with a further copy to:
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Facsimile: (212) 848-7179
Attention: Alberto Luzarraga, Esq.
(b) if to BCE:
BCE Inc.
1000 de La Gauchetiere Ouest
Suite 3700
Montreal, Quebec
H3B 4Y7 Canada
Facsimile: (514) 870-4877
Attention : Chief Legal officer
with a copy to:
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Facsimile: (212) 848-7179
Attention: Alberto Luzarraga, Esq.
(c) if to AM Latin America:
AM Latin America, LLC
1105 North Market Street, Suite 1300
Wilmington, DE 19801
Facsimile: (302) 651-8422
Attention: William R. Bechstein
(Delaware Corporate Management Inc.)
with a copy to:
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006
Facsimile: (212) 225-3999
Attention: Nicolas Grabar, Esq.
with a further copy to:
Franck, Galicia, Duclaud y Robles, S.C.
Avenida Paseo de las Palmas
No. 405 - 3rd Floor
Colonia Lomas de Chapultepec
Mexico D.F. 11000
Facsimile: (525) 540-9202
Attention: Rafael Robles
<PAGE>
(d) if to America Movil:
America Movil, S.A. de C.V.
Lago Alberto 366
Colonia Anahuac
11320 Mexico, D.F. Mexico
Facsimile: (525) 625-3852
Attention: Daniel Hajj
with a copy to:
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006
Facsimile: (212) 225-3999
Attention: Nicolas Grabar, Esq.
with a further copy to:
Franck, Galicia, Duclaud y Robles, S.C.
Avenida Paseo de las Palmas
No. 405 - 3rd Floor
Colonia Lomas de Chapultepec
Mexico D.F. 11000
Facsimile: (525) 540-9202
Attention: Rafael Robles
<PAGE>
(e) if to SBCI Brazil Holding or SBCI:
SBC International, Inc.
175 East Houston Street
San Antonio, TX 78205
Facsimile: (210) 351-5034
Attention: Senior Executive Vice President, Corporate Development
with a copy to:
SBC International, Inc.
175 East Houston Street
San Antonio, TX 78205
Facsimile: (210) 351-3488
Attention : General Attorney, Mergers and Acquisitions
with a further copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Facsimile: (212) 310-8007
Attention: Howard Chatzinoff, Esq.
(f) if to SBCI Parent:
SBC International, Inc.
175 East Houston Street
San Antonio, TX 78205
Facsimile: (210) 351-5034
Attention : Senior Executive Vice President, Corporate Development
with a copy to:
SBC International, Inc.
175 East Houston Street
San Antonio, TX 78205
Facsimile: (210) 351-3488
Attention : General Attorney, Mergers and Acquisitions
With a further copy to :
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Facsimile : (212) 310-8007
Attention : Howard Chatzinoff, Esq.
<PAGE>
(g) if to the Company:
Telecom Americas Ltd.
Cedar House
41 Cedar Avenue
Hamilton HM 12
Bermuda
Facsimile: (441) 292-8666
Attention: Corporate Secretary
Section 6.04. Headings. The descriptive headings contained in
this Agreement are for convenience of reference only and shall not affect in any
way the meaning or interpretation of this Agreement.
Section 6.05. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any Law,
governmental regulation or public policy, all other terms and provisions of this
Agreement shall nevertheless remain in full force and effect as long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby are consummated as originally contemplated to the greatest extent
possible.
Section 6.06. Entire Agreement. This Agreement and the
Transaction Documents constitute the entire agreement of the parties hereto with
respect to the subject matter hereof and thereof and supersede all prior
agreements and undertakings, both written and oral, between the parties with
respect to the subject matter hereof and thereof.
Section 6.07. Assignment. This Agreement may not be assigned
without the express written consent of the parties (which consent may be granted
or withheld in the sole discretion of any party), except that any Shareholder
may assign its rights hereunder as permitted by Section 3.13 and Article IV
hereof; provided, however, that any Sponsor Party may, without the written
consent of any other party, assign and delegate this Agreement and its rights
and obligations hereunder in connection with a merger, consolidation or sale of
all or substantially all of its assets.
Section 6.08. No Third Party Beneficiaries. This Agreement
shall be binding upon and inure solely to the benefit of the parties hereto and
their permitted assigns and successors and nothing herein, express or implied,
is intended to or shall confer upon any other person or entity, any legal or
equitable right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement.
Section 6.09. Amendment. Subject to Section 6.17, this
Agreement may not be amended or modified, except by an instrument in writing
signed by, or on behalf of, each of the parties bound by, or subject to the
provision to be amended or modified.
<PAGE>
Section 6.10. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York
applicable to contracts executed in and to be performed in that State without
regard to conflicts of law.
Section 6.11. Counterparts. This Agreement may be executed and
delivered in one or more counterparts, and by the different parties hereto in
separate counterparts, each of which when executed and shall be deemed to be an
original but all of which taken together shall constitute one and the same
agreement.
Section 6.12. Specific Performance. The parties hereto agree
that irreparable damage would occur in the event any provision of this Agreement
was not performed in accordance with the terms hereof and that the parties shall
be entitled to specific performance of the terms hereof, in addition to any
other remedy at Law or in equity.
Section 6.13. Waiver of Jury Trial. Each of the parties hereto
irrevocably and unconditionally waives trial by jury in any legal action or
proceeding relating to this Agreement, the Transaction Documents or the
transactions contemplated hereby and thereby and for any counterclaim therein.
<PAGE>
Section 6.14. Dispute Resolution. The parties agree that any
controversy, claim or dispute arising out of or relating to or in connection
with this Agreement including, without limitation, any dispute regarding its
breach, termination, enforceability or validity hereof (each, a "Dispute")
should be regarded as a business problem to be resolved promptly through
business-oriented negotiations before resorting to arbitration pursuant to
Section 6.15. The parties therefore agree to attempt in good faith to resolve
any Dispute promptly by negotiation between the executives of the parties who
have authority to settle the Dispute. Such negotiations shall commence upon the
mailing of a notice (the "Dispute Notice") from the appropriate executive of the
requesting party to an appropriate executive of the responding party. If the
Dispute has not been resolved by these Persons within forty-five (45) days of
the date of the Dispute Notice, unless the parties agree in writing to a longer
period, the Dispute shall be referred to the chief executive officer of each of
BCI and America Movil, for discussion and negotiation among them. In the event
the Dispute has still not been resolved by negotiation within forty-five (45)
days of such referral, then such Dispute shall be settled pursuant to binding
arbitration pursuant to Section 6.15. All negotiations pursuant to this Section
6.14 shall be confidential and shall be treated as compromise and settlement
negotiations for purposes of applicable rules of evidence and shall not be used
for, or admitted in, any arbitration or court proceedings under this Agreement.
Section 6.15. Arbitration . (a) Any Dispute that has not been
resolved pursuant to Section 6.14 shall be finally settled by binding
arbitration in The City of New York, New York County, before a panel of three
arbitrators. The arbitration shall be administered by the International Court of
Arbitration of the International Chamber of Commerce (the "ICC") under its Rules
of Arbitration as in effect at the time of this Agreement, except as they may be
modified herein by agreement of the parties and shall be conducted in the
English language. Each party shall nominate one arbitrator, obtain its nominee's
acceptance of such nomination, and deliver written notification of such
nomination and acceptance to the other party within thirty (30) days after
delivery of the request for arbitration. In the event a party fails to nominate
an arbitrator or deliver notification of such nomination to the other party
within this time period, upon request of any party, such arbitrator shall
instead be appointed by the ICC within thirty (30) days of receiving such
request. In the event there are two Shareholders who are parties to the dispute,
the two arbitrators nominated in accordance with the above provisions shall
nominate the third arbitrator, obtain the nominee's acceptance of such
nomination and notify the parties in writing of such nomination and acceptance
within thirty days of their nomination. If the first two nominated arbitrators
fail to nominate a third arbitrator or notify the parties of that nomination
within this time period, then, upon request of either party, the third
arbitrator shall be appointed by the ICC within thirty (30) days of receiving
such request. Nonetheless, in no event shall any such arbitrator nominated by
the other arbitrators be a resident in, or a domicile of, any country in which a
shareholder is domiciled or has its principal place of business. In the event
that more than two Shareholders are parties to the Dispute, each such
Shareholder shall be entitled to nominate an arbitrator in the manner and time
period referred to above. In the event a party fails to nominate an arbitrator
or deliver notification of such nomination to the other parties within this time
period, upon request of any party, such arbitrator shall instead be appointed by
the ICC within thirty (30) days of receiving such request. The arbitrators
appointed in accordance with the previous two sentences shall mutually agree to
designate one of them to act as chair within thirty days of their appointment.
For the sake of clarity, it is expressly understood that the function of such
chair is administrative only and shall not signify that such chair has greater
or different powers as arbitrator from the other arbitrators. In the event that
the arbitrators nominated in accordance with the above provisions fail to agree
upon the selection of a chair within this time period, upon request of any
party, the chair shall instead be designated by the ICC within thirty days of
receiving such request. The award of the arbitrators shall be final and binding
upon the parties, and shall not be subject to any appeal or review. The parties
agree to submit to the non-exclusive personal jurisdiction of the federal and
state courts sitting in The City of New York, New York for the purpose of
enforcing this agreement to arbitrate.
<PAGE>
(b) No provision of, nor the exercise of any rights under,
this Section 6.15 shall limit the right of any party to request and obtain from
a court of competent jurisdiction in The City of New York (which shall have
exclusive jurisdiction for purposes of this Section 6.15(b)) before, during or
after the pendency of any arbitration, provisional or ancillary remedies and
relief including, but not limited to, injunctive or mandatory relief or the
appointment of a receiver. The institution and maintenance of an action or
judicial proceeding for, or pursuit of, provisional or ancillary remedies shall
not constitute a waiver of the right of any party, even if it is the plaintiff,
to submit the dispute to arbitration if such party would otherwise have such
right. Each of the parties hereby submits unconditionally (to the extent
permitted by applicable law) to the exclusive jurisdiction of the state and
federal courts located in The City of New York, County of New York for purposes
of this provision, waives objection to the venue of any proceeding in any such
court or that any such court provides an inconvenient forum and consents to the
service of process upon it in connection with any proceeding instituted under
this Section 6.15(b) in the same manner as provided for the giving of notice
hereunder.
(c) Judgment upon the award rendered may be entered in any
court having jurisdiction. The parties hereby expressly consent to the
nonexclusive jurisdiction of the state and federal courts situated in The City
of New York, County of New York for this purpose and waive objection to the
venue of any proceeding in such court or that such court provides an
inconvenient forum.
(d) Each of the parties participating in an arbitration
pursuant to the terms of this Agreement shall, subject to the award of the
arbitrators, pay an equal share of the arbitrators' fees. The arbitrators shall
have the power to award recovery of all costs (including reasonable attorneys'
fees, administrative fees, arbitrators' fees and court costs) to the prevailing
party.
(e) Each of:
(i) BCI Investments, BCI and BCE hereby irrevocably designates CT
Corporation, with offices situated at present at 111 Eighth Avenue, New
York, New York 10011;
(ii) SBCI Brazil Holding, SBCI and SBCI Parent hereby irrevocably
designates CT Corporation, with offices situated at present at 111 Eighth
Avenue, New York, New York 10011; and
(iii) America Movil and AM Latin America hereby irrevocably designates
CT Corporation, with offices situated at present at 111 Eighth Avenue, New
York, New York 10011
<PAGE>
as its authorized agent, respectively, to accept and acknowledge on its behalf
service of any process which may be served in any proceeding in New York.
Section 6.16. Termination. This Agreement shall terminate with
respect to any Shareholder on the date on which such Shareholder no longer owns
any Shares; provided that any liabilities or obligations of such Shareholder
arising hereunder on or prior to such date, or based on any event or
circumstance arising on or prior to such date, shall survive termination of this
Agreement.
Section 6.17. Minimum Interests. Notwithstanding any provision
to the contrary set forth herein (except as set forth in Sections 3.04(a),
3.04(b) and 5.05(h)), if any Shareholder holds less than ten percent (10%) of
the total Equity Interests in the Company, such Shareholder shall have all of
the obligations, but none of the rights, of a Shareholder hereunder; provided,
that this Agreement may not be amended in any manner that materially adversely
affects such Shareholder without the written consent of such a Shareholder.
Section 6.18. Aggregating Interests. To the extent that any
Shareholder's rights or obligations hereunder are conditioned upon such
Shareholder maintaining ownership of a specified percentage of the Outstanding
Shares or Equity Interests in the Company, the Equity Interests owned by such
Shareholder may, without duplication, be aggregated with the Equity Interests
owned by Permitted Transferees of such Shareholder for purposes of calculating
such percentages.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized signatories
thereunto duly authorized as of the date first written above.
BELL CANADA INTERNATIONAL INVESTMENTS LIMITED
By
--------------------------------------------
Name:
Title:
AM LATIN AMERICA, LLC
By
--------------------------------------------
Name:
Title:
SBC INTERNATIONAL - BRAZIL HOLDING, LTD.
By
--------------------------------------------
Name:
Title:
TELECOM AMERICAS LTD.
By
--------------------------------------------
Name:
Title:
<PAGE>
ACKNOWLEDGED and, with respect to Sections 2.03, 4.05, 5.05,
5.07 and 5.08 and Article VI, AGREED as of the date first written above.
BELL CANADA INTERNATIONAL INC.
By
--------------------------------------------
Name:
Title:
ACKNOWLEDGED and, with respect to Sections 2.02, 4.05, 5.05,
5.07, 5.08 and 5.15 and Article VI, AGREED as of the date first written above.
BCE INC.
By
--------------------------------------------
Name:
Title:
ACKNOWLEDGED and, with respect to Sections 2.04, 4.05 and 5.05
and Article VI, AGREED as of the date first written above.
SBC INTERNATIONAL, INC.
By
--------------------------------------------
Name:
Title:
<PAGE>
ACKNOWLEDGED and, with respect to Sections 2.02, 4.05, 5.05
and 5.07 and Article VI, AGREED as of the date first written above.
AMERICA MOVIL, S.A. de C.V.
By
--------------------------------------------
Name:
Title:
ACKNOWLEDGED and, with respect to Sections 2.02, 4.05, 5.05,
5.07 and 5.15 and Article VI, AGREED as of the date first written above.
SBC COMMUNICATIONS, INC.
By
--------------------------------------------
Name:
Title:
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE A
INITIAL CAPITALIZATION OF THE COMPANY
Shares of Percentage Interest
Voting Common Stock Shares of In the Company
Series C Shares
<S> <C> <C> <C>
Bell Canada International Investments 8,936.338 1,690.142 44.277%
Limited
AM Latin America , LLC 10,626.48 0 44.277%
SBC International - Brazil Holding, 2,747.04 0 11.446%
Ltd.
</TABLE>
<PAGE>
SCHEDULE 2.03(a)
OTHER REGISTRATION RIGHTS AGREEMENTS
Registration Rights Agreement between Bell Canada International Inc. and BCE
Inc. dated October 6, 1997.
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE 2.03(b)
EQUITY INTERESTS OF BCI INVESTMENTS IN SUBNEWCO1,
SUBNEWCO2 AND SUBNEWCO3
Equity Interests of Subnewco1
<S> <C>
Authorized Capital: 12,000 voting common shares ("Subnewco1 Common Shares")
12,001 voting non-participating preferred shares with nominal
economic value ("Subnewco1 Preferred Shares")
Issued and Outstanding Capital: 12,000 Subnewco1 Common Shares held by the Company
12,001 Subnewco1 Preferred Shares held by BCI Investments
Percentage Held Directly by BCI Investments holds 0% of Subnewco1 Common Shares and 100% of
BCI Investments: Subnewco1 Preferred Shares.
Equity Interests of Subnewco2
Authorized Capital: 12,000 voting common shares ("Subnewco2 Common Shares")
12,001 voting non-participating preferred shares with nominal
economic value ("Subnewco2 Preferred Shares")
Issued and Outstanding Capital: 12,000 Subnewco2 Common Shares held by the Company
12,001 Subnewco2 Preferred Shares held by BCI Investments
Percentage Held Directly by BCI Investments holds 0% of Subnewco2 Common Shares and 100% of
BCI Investments: Subnewco2 Preferred Shares.
Equity Interests of Subnewco3
Authorized Capital: 12,000 voting common shares ("Subnewco3 Common Shares")
12,001 voting non-participating preferred shares with nominal
economic value ("Subnewco3 Preferred Shares")
Issued and Outstanding Capital: 12,000 Subnewco3 Common Shares held by the Company
12,001 Subnewco3 Preferred Shares held by BCI Investments
Percentage Held Directly by BCI Investments holds 0% of Subnewco3 Common Shares and 100% of
BCI Investments: Subnewco3 Preferred Shares.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE 2.04
EQUITY INTERESTS OF SBCI BRAZIL HOLDING IN SUBNEWCO4
<S> <C>
Equity Interests of SBCI Brasil Ltda.
Authorized Capital: The Articles of Association of SBCI Brasil Ltda. ("Subnewco4") do not provide
for an authorized capital. An unlimited number of quotas may be issued, as
decided upon by the Quotaholders.
Issued and Outstanding 890,062,346 quotas are issued and outstanding, of which
Capital: 445,031,172 are Class A quotas (voting stock) and 445,031,174 are Class
B quotas (non-voting stock).
294,587,527 Class A quotas are held by SBC International - Brazil Holding,
Ltd. ("SBCI Brazil Holding").
150,443,645 Class A quotas and 445,031,170 Class B quotas are held by Telecom
Americas Ltd. (the "Company").
1 Class B quota is held by Michael A. Meyer.
1 Class B quota is held by Phillip C. Essman.
1 Class B quota is held by Luiz Fernado Teixeira Pinto.
1 Class B quota is held by Daniel Hajj Aboumrad.
Percentage held directly by SBCI Brazil Holding holds 66.195% of the Class A quotas and 0% of the Class B
SBCI Brazil Holding: quotas of Subnewco4.
</TABLE>
Options, Warrants, Calls, Etc.
1. 5th Amendment to the Articles of Association of Subnewco4, dated as of
November 16, 2000.
2. Exchangeable Debenture Agreement, dated as of November 16, 2000, by and
among SBCI Brazil Holding, the Company and Subnewco4.
<PAGE>
SCHEDULE 3.13
TRANSFEREES REQUIRING CONSENT
[ ]
<PAGE>
SCHEDULE 5.11
UNWIND PROCEDURES
Capitalized terms used but not otherwise defined herein shall have the
meaning as set forth in the Shareholders Agreement.
[Four pages of materials omitted.]
<PAGE>
Attachment 1 to Schedule 5.11
FORM OF OPTION AGREEMENT
[Ten pages of materials omitted.]
<PAGE>
SCHEDULE 5.13
LIST OF INVESTMENT BANKS
Credit Suisse First Boston
Goldman Sachs & Co.
Salomon Smith Barney
<PAGE>
EXHIBIT A
MEMORANDUM OF ASSOCIATION OF THE COMPANY
AND THE SUBNEWCOS
<PAGE>
FORM NO. 2 [GRAPHIC OMITTED]
BERMUDA
THE COMPANIES ACT 1981
MEMORANDUM OF ASSOCIATION OF
COMPANY LIMITED BY SHARES
(Section 7(1) AND (2)
MEMORANDUM OF ASSOCIATION
OF
Ivey Holdco Ltd.
(hereinafter referred to as "the Company")
1. The liability of the members of the Company is limited to the amount (if
any) for the time being unpaid on the shares respectively held by them.
2. We, the undersigned, namely,
<TABLE>
<CAPTION>
NAME ADDRESS BERMUDIAN NATIONALITY NUMBER OF
STATUS SHARES
(Yes/No) SUBSCRIBED
<S> <C> <C> <C> <C>
Timothy J. Counsell
Cedar House, 41 Cedar Avenue
Hamilton, HM 12, Bermuda Yes British 1
Ruby L. Rawlins
Cedar House, 41 Cedar Avenue
Hamilton HM 12, Bermuda Yes British 1
Rachael M. Lathan
Cedar House, 41 Cedar Avenue
Hamilton HM 12, Bermuda Yes British 1
Antoinette Simmons
Cedar House, 41 Cedar Avenue
Hamilton HM 12, Bermuda Yes British 1
</TABLE>
do hereby respectively agree to take such number of shares of the Company
as may be allotted to us respectively by the provisional directors of the
Company, not exceeding the number of shares for which we have respectively
subscribed, and to satisfy such calls as may be made by the directors,
provisional directors or promoters of the Company in respect of the shares
allotted to us respectively.
<PAGE>
3. The Company is to be an exempted Company as defined by the Companies Act
1981.
4. The Company, with the consent of the Minister of Finance, has power to hold
land situate in Bermuda not exceeding in all, including the following
parcels-
Not Applicable
5. The authorised share capital of the Company is $12,000.00 divided into
12,000 shares of U.S. one dollar each. The minimum subscribed share capital
of the Company is $12,000.00 in United States currency.
6. The objects for which the Company is formed and incorporated are -
As set forth in paragraphs (b) to (n) and (p) to (u) inclusive of the
Second Schedule to The Companies Act, 1981.
7. The Company has the powers set out in the Schedule annexed hereto.
Signed by each subscriber in the presence of at least one witness attesting
the signature thereof -
(Subscribers) (Witnesses)
SUBSCRIBED this day of
<PAGE>
STAMP DUTY (To be affixed)
Not Applicable
<PAGE>
FORM No. 2
[GRAPHIC OMITTED]
BERMUDA
THE COMPANIES ACT 1981
MEMORANDUM OF ASSOCIATION OF COMPANY LIMITED BY SHARES
Section 7(1) and (2)
MEMORANDUM OF ASSOCIATION
OF
Ivey CLEC Ltd.
--------------------------------------------------------------------------------
(hereinafter referred to as "the Company")
1. The liability of the members of the Company is limited to the amount (if
any) for the time being unpaid on the shares respectively held by them.
2. We, the undersigned, namely,
Name and Address Bermudian Status Nationality Number of Shares
(Yes or No) Subscribed
Timothy J. Counsell
Cedar House
41 Cedar Avenue
Hamilton HM 12, Bermuda Yes British 1
Ruby L. Rawlins
Cedar House
41 Cedar Avenue
Hamilton HM 12, Bermuda Yes British 1
Rachael M. Lathan
Cedar House
41 Cedar Avenue
Hamilton HM 12, Bermuda Yes British 1
Antoinette Simmons
Cedar House
41 Cedar Avenue
Hamilton HM 12, Bermuda Yes British 1
do hereby respectively agree to take such number of shares of the Company as may
be allotted to us respectively by the provisional directors of the Company, not
exceeding the number of shares for which we have respectively subscribed, and to
satisfy such calls as may be made by the directors, provisional directors or
promoters of the Company in respect of the shares allotted to us respectively.
3. The Company is to be an exempted Company as defined by the Companies Act
1981.
4. The Company, with the consent of the Minister of Finance, has power to hold
land situate in Bermuda not exceeding ___ in all, including the following
parcels:-
Not Applicable
5. The authorised share capital of the Company is $12,000.00 divided into
12,000 shares of US$1.00 each. The minimum subscribed share capital of the
Company is $12,000.00 in United States Currency.
6. The objects for which the Company is formed and incorporated are:-
As set forth in paragraphs (b) to (n) and (p) to (u) inclusive of the
Second Schedule to the Companies Act 1981.
7. The Company has the powers set out in The Schedule annexed hereto.
Signed by each subscriber in the presence of at least one witness attesting the
signature thereof:-
(Subscribers) (Witnesses)
Subscribed this day of
<PAGE>
FORM No. 2
[GRAPHIC OMITTED]
BERMUDA
THE COMPANIES ACT 1981
MEMORANDUM OF ASSOCIATION OF COMPANY LIMITED BY SHARES
Section 7(1) and (2)
MEMORANDUM OF ASSOCIATION
OF
Ivey Wireless Ltd.
--------------------------------------------------------------------------------
(hereinafter referred to as "the Company")
1. The liability of the members of the Company is limited to the amount (if
any) for the time being unpaid on the shares respectively held by them.
2. We, the undersigned, namely,
Name and Address Bermudian Status Nationality Number of Shares
(Yes or No) Subscribed
Timothy J. Counsell
Cedar House
41 Cedar Avenue
Hamilton HM 12, Bermuda Yes British 1
Ruby L. Rawlins
Cedar House
41 Cedar Avenue
Hamilton HM 12, Bermuda Yes British 1
Rachael M. Lathan
Cedar House
41 Cedar Avenue
Hamilton HM 12, Bermuda Yes British 1
Antoinette Simmons
Cedar House
41 Cedar Avenue
Hamilton HM 12, Bermuda Yes British 1
do hereby respectively agree to take such number of shares of the Company as may
be allotted to us respectively by the provisional directors of the Company, not
exceeding the number of shares for which we have respectively subscribed, and to
satisfy such calls as may be made by the directors, provisional directors or
promoters of the Company in respect of the shares allotted to us respectively.
3. The Company is to be an exempted Company as defined by the Companies Act
1981.
4. The Company, with the consent of the Minister of Finance, has power to hold
land situate in Bermuda not exceeding ___ in all, including the following
parcels:-
Not Applicable
5. The authorised share capital of the Company is $12,000.00 divided into
12,000 shares of US$1.00 each. The minimum subscribed share capital of the
Company is $12,000.00 in United States Currency.
6. The objects for which the Company is formed and incorporated are:-
As set forth in paragraphs (b) to (n) and (p) to (u) inclusive of the
Second Schedule to the Companies Act 1981.
7. The Company has the powers set out in The Schedule annexed hereto.
Signed by each subscriber in the presence of at least one witness attesting the
signature thereof:-
(Subscribers) (Witnesses)
Subscribed this day of
<PAGE>
TERRITORY OF THE BRITISH VIRGIN ISLANDS
THE INTERNATIONAL BUSINESS COMPANIES ACT
(CAP. 291)
AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION
OF
BELL CANADA INTERNATIONAL BVI V LIMITED
1. The name of the Company is Bell Canada International BVI V Limited.
2. The registered office of the Company will be situated at Arawak Chambers,
Sea Meadow House, P.O. Box 173, Blackburne Highway, Road Town, Tortola,
British Virgin Islands or at such other place in the British Virgin Islands
as the directors may from time to time determine.
3. The registered agent of the Company will be Arawak Trust Company Limited of
Arawak Chambers, Sea Meadow House, P.O. Box 173, Blackburne Highway, Road
Town, Tortola, British Virgin Islands or such other person or company being
a person or company entitled to act as a registered agent as the directors
may from time to time determine.
4. The objects for which the Company is established are:-
(1) To invest in telecommunications services and operations and the
provisioning of telecommunications services anywhere outside the
British Virgin Islands.
(2) To buy, sell, mortgage, lease, manage, build, develop, possess and
generally deal in real properties; to buy, sell, underwrite, invest
in, exchange or otherwise acquire, and to hold, manage, develop, deal
with and turn to account any bonds, debentures, shares (whether fully
paid or not), stocks, options, commodities, futures, forward
contracts, notes, or securities of all types, precious metals, gems,
works of art and other articles of value.
(3) To borrow or raise money by the issue of debentures, debenture stock
(perpetual or terminable), bonds, mortgages, or any other securities
founded or based upon all or any of the assets or property of the
Company or without any such security and upon such terms as to
priority or otherwise as the Company shall think fit.
(4) To guarantee loans and to lend money with or without guarantee or
security to any persons, firms or corporation.
(5) To engage in any other business or businesses whatsoever, or in any
acts or activities, which are not prohibited under any law for the
time being in force in the British Virgin Islands.
(6) To do all such other things as are incidental to, or the Company may
think conducive to the attainment of, all or any of the above objects.
And it is hereby declared that the intention is that each of the objects
specified in each paragraph of this clause shall, except where otherwise
expressed in such paragraph, be an independent main object and be in no ways
restricted by reference to any inference from the terms of any other paragraph
or the name of the Company.
5. The Company has no power to:-
(1) carry on business with persons resident in the British Virgin Islands;
(2) own an interest in real property situate in the British Virgin
Islands, other than a lease of property for use as an office from
which to communicate with members or where books and records of the
Company are prepared or maintained;
(3) carry on banking or trust business, unless it is licensed under the
Banks and Trust Companies Act, 1990;
(4) carry on business as an insurance or re-insurance company, insurance
agent or insurance broker, unless it is licensed under an enactment
authorising it to carry on that business;
(5) carry on the business of company management unless it is licensed
under the Company Management Act, 1990; or
(6) carry on the business of providing the registered office or the
registered agent for companies incorporated in the British Virgin
Islands.
6. The shares of the Company shall be issued in the currency of the United
States of America.
7. The authorised capital of the Company is US$95,316.33.
8. The authorised capital of the Company is made up of two classes of shares
as follows:
(1) 12,000 Common Shares (the "Common Shares") with a par value of
US$1.00 per share; and
(2) 48,301 Preferred Shares (the "Preferred Shares") with a par value
of US$1.72494 per share.
9. The rights attaching to the Common Shares and Preferred Shares are as
follows:
(1) The holders of the Common Shares shall, subject to the provisions of
this Memorandum:
(a) be entitled to one vote per share and, for so long as the
Preferred Shares are entitled to vote, to vote with the
Preferred Shares as if they were a single class, in all
matters, including discontinuation, except as otherwise
provided in this Memorandum;
(b) be entitled to such dividends as the Board may from time to
time declare;
(c) in the event of a winding-up or dissolution of the Company,
whether voluntary or involuntary or for the purpose of a
reorganisation or otherwise or upon any distribution of
capital, be entitled to the surplus assets of the Company;
and
(d) generally be entitled to enjoy all of the rights attaching
to shares of the Company.
(2) The holders of the Preferred Shares shall, subject to the provisions
of this Memorandum:
(a) prior to the occurrence of the Redemption Condition, be
entitled to one vote per share and to vote with the Common
Shares as if they were a single class in all matters,
including discontinuation, except as otherwise provided in
this Memorandum, PROVIDED THAT upon the occurrence of the
Redemption Condition, the Preferred Shares shall immediately
cease to have any voting rights regardless of whether the
Company has given notice of any meeting of members;
(b) not be entitled to dividends or other distributions or
otherwise participate in the profits of the Company;
(c) in the event of a winding-up or dissolution of the Company,
whether voluntary or involuntary or for the purpose of a
reorganisation or otherwise or upon any distribution of
capital, be entitled solely to the par value per share of
the Preferred Shares in priority to any payment to the
holders of the Common Shares;
(d) the Preferred Shares shall only be held by BCI Investments
and shall not be transferred to any Person other than (i)
Telecom Americas, or its successors and assigns, or (ii) to
a Permitted Transferee of BCI Investments holding Telecom
Americas Shares transferred to it pursuant to and in
accordance with Section 4.05 of the Joint Venture
Shareholders Agreement (PROVIDED THAT such Permitted
Transferee shall be permitted to hold Preferred Shares only
for so long as it continues to hold Telecom Americas Shares
and remains a Permitted Transferee of BCI Investments).
(1) Upon the occurrence of the Redemption Condition, the Company shall
redeem all, but not less than all, of the Preferred Shares outstanding
at the time of such redemption. On any such redemption, the Company
shall pay a price in cash equal to U.S.$0.01 per share to the Members
holding the Preferred Shares. Not more than five days after the
occurrence of the Redemption Condition, the Company shall deliver a
written notice to all Members holding Preferred Shares indicating: (i)
that it intends to redeem the shares pursuant to this sub-clause, (ii)
that payment will be made upon surrender of the certificates
representing the Preferred Shares, and (iii) specifying the
consideration to be paid to each holder and the place, manner and date
of such payment and the surrender of the certificates evidencing the
Preferred Shares, which shall be within ten days of the date of such
notice.
(2) The Members holding the Preferred Shares shall surrender the share
certificates representing the Preferred Shares to the Company and
shall receive the redemption price in accordance with the written
notice delivered by the Company. Any Preferred Shares not surrendered
in a timely manner shall be automatically redeemed by the Company, and
the Company shall segregate and hold in trust the consideration to
which such holders are entitled for a period of six years.
(3) The failure of the Company to redeem the shares upon the occurrence of
the Redemption Condition shall not constitute a waiver of the
Company's right and obligation to redeem the Preferred Shares.
Shares in the Company may only be issued shares as registered shares and
may not be exchanged for shares issued to bearer.
No Section of this Memorandum and no Regulation of the Articles of
Association shall be rescinded, altered or amended and no new section of
this Memorandum or new Regulation shall be made until the same has been
approved by a resolution of the Board in accordance with Regulation 9 of
the Articles of Association and by a resolution of the majority of the
Members holding Common Shares voting as a class, and for so long as the
Preferred Shares are entitled to voting rights, a resolution of a majority
of the Members holding Preferred Shares voting as a class.
The meaning of words in this Memorandum are as defined in the Regulations
to the Articles of Association.
We, ARAWAK TRUST COMPANY LIMITED of Road Town, Tortola, British Virgin Islands
for the purpose of incorporating an International Business Company under the
laws of the British Virgin Islands hereby subscribe our name to this Memorandum
of Association the 21st day of July, 1995:-
--------------------------------------------------------------------------------
NAME, ADDRESS AND DESCRIPTION OF SUBSCRIBER
--------------------------------------------------------------------------------
ARAWAK TRUST COMPANY LIMITED
P O Box 173
Road Town
Tortola
British Virgin Islands
Trust Company
(Sgd.) David A. Raworth
-------------------------------------------
Arawak Trust Company Limited
-------------------------------------------
Witness to the above signature:
(Sgd.) M. Fahie
----------------------------------
Marsha Fahie
P.O. Box 173
Road Town
Tortola
British Virgin Islands
<PAGE>
EXHIBIT B
AMENDED AND RESTATED BYE-LAWS OF THE COMPANY
AND AMENDED AND RESTATED BYE-LAWS OR ARTICLES
OF ASSOCIATION, AS THE CASE MAY BE,
OF EACH OF THE SUBNEWCOS
<PAGE>
AMENDED AND RESTATED B Y E - L A W S
of
TELECOM AMERICAS LTD.
<PAGE>
TABLE OF CONTENTS
Page
1. Interpretation............................................................1
2. Board of Directors........................................................9
3. Management of the Company.................................................9
4. Chairman of the Board....................................................10
5. Power to authorise specific actions......................................10
6. Power to appoint attorney and auditors...................................10
7. Power to delegate to a committee.........................................11
8. Power to appoint and dismiss employees...................................11
9. Power to borrow and charge property......................................11
10. Exercise of power to purchase shares of
or discontinue the Company...............................................11
11. Matters Requiring a Qualified Vote of the Board..........................12
12. Nomination of Directors..................................................14
13. Number of Directors......................................................17
14. Defects in appointment of Directors......................................18
15. Alternate Directors......................................................18
16. Removal of Directors.....................................................18
17. Vacancies on the Board...................................................20
18. Notice of meetings of the Board..........................................21
19. Quorum at meetings of the Board..........................................22
20. Meetings of the Board....................................................22
21. Unanimous written resolutions............................................23
22. Contracts and disclosure of Directors' interests.........................23
23. Remuneration of Directors................................................23
24. Officers of the Company..................................................24
25. Appointment of Officers..................................................24
26. Remuneration of Officers.................................................24
27. Duties of Officers.......................................................24
28. Removal of Chief Executive Officer and Chief Financial Officer...........25
29. Chairman of meetings.....................................................25
30. Register of Directors and Officers.......................................25
31. Obligations of Board to keep minutes.....................................25
32. Indemnification of Directors and Officers of the Company.................26
33. Waiver of claim by Member................................................26
34. Notice of annual general meeting; Postponement of Meetings...............27
35. Notice of special general meeting........................................27
36. Accidental omission of notice of general meeting.........................27
37. Meeting called on requisition of Members.................................27
38. Short notice.............................................................28
39. Quorum for general meeting...............................................28
40. Adjournment of meetings..................................................29
41. Attendance at meetings...................................................29
42. Written resolutions......................................................29
43. Attendance of Directors..................................................30
44. Voting at meetings.......................................................30
45. Voting on show of hands..................................................31
46. Other Matters Requiring a Special Vote...................................31
47. Decision of chairman.....................................................32
48. Demand for a poll........................................................32
49. Seniority of joint holders voting........................................33
50. Instrument of proxy......................................................34
51. Representation of corporations at meetings...............................34
52. Rights of shares.........................................................34
53. Power to issue shares....................................................35
54. Variation of rights, alteration of share capital
and purchase of shares of the Company....................................36
55. Registered holder of shares..............................................37
56. Death of a joint holder..................................................37
57. Share certificates.......................................................37
58. Calls on shares..........................................................38
59. Forfeiture of shares.....................................................38
60. Defaulting Shareholders..................................................39
61. Certain Issuances of New Securities......................................42
62. Contents of Register of Members..........................................42
63. Inspection of Register of Members........................................42
64. Determination of record dates............................................43
65. Transfer of Certain Veto Rights..........................................43
66. Transfer of Rights to Nominate Directors.................................44
67. Instrument of transfer...................................................45
68. Restriction on transfer..................................................45
69. Transfers by joint holders...............................................45
70. Representative of deceased Member........................................46
71. Registration on death or bankruptcy......................................46
72. Declaration of dividends by the Board....................................47
73. Other distributions......................................................47
74. Reserve fund.............................................................47
75. Deduction of Amounts due to the Company..................................47
76. Issue of bonus shares....................................................47
77. Records of account.......................................................48
78. Financial year end.......................................................48
79. Financial statements.....................................................48
80. Appointment of Auditor...................................................49
81. Remuneration of Auditor..................................................49
82. Vacation of office of Auditor............................................49
83. Access to books of the Company...........................................49
84. Report of the Auditor....................................................49
85. Notices to Members of the Company........................................50
86. Notices to joint Members.................................................50
87. Service and delivery of notice...........................................50
88. The seal.................................................................50
89. Manner in which seal is to be affixed....................................51
90. Winding-up/distribution by liquidator....................................51
91. Alteration of Bye-laws...................................................51
<PAGE>
INTERPRETATION
1. Interpretation
(1) In these Bye-laws the following words and expressions shall, where not
inconsistent with the context, have the following meanings respectively:
(a) "Act" means the Companies Act 1981 as amended from time to time;
(b) "Affiliate" means, with respect to any specified Person, any other
Person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by, or is under Common
Control with, such specified Person;
(c) "Alternate Director" means an alternate Director appointed in
accordance with these Bye-laws;
(d) "AM Latin America" means AM Latin America, LLC, a limited liability
company organized under the laws of the State of Delaware;
(e) "Auditor" includes any individual or partnership;
(f) "BCE" means BCE Inc., a corporation organized under the laws of
Canada;
(g) "BCI" means Bell Canada International Inc., a corporation incorporated
under laws of Canada;
(h) "BCI Investments" means Bell Canada International Investments Limited,
a company incorporated under the laws of the British Virgin Islands;
(i) "Board" means the Board of Directors appointed or elected pursuant to
these Bye-laws and acting by resolution in accordance with the Act and
these Bye-laws or the Directors present at a meeting of Directors at
which there is a quorum;
(j) "Business Day" means any day that is not a Saturday, a Sunday or other
day on which banks or stock exchanges are required by Law to be closed
in the City of New York, New York, the City of Montreal, Canada, or
the City of Sao Paulo, Brazil;
(k) "Capital Stock" means, with respect to any Person at any time, any and
all shares, interests, participations or other equivalents (however
designated, whether voting or non-voting) of capital stock,
partnership interests (whether general or limited), membership
interests or equivalent ownership interests in or issued by such
Person;
(l) "Common Shares" shall have the meaning as set forth in Bye-law 52(1).
(m) "Company" means the company for which these Bye-laws are approved and
confirmed;
(n) "Control" (including the terms "Controlled by" and "under Common
Control with"), with respect to the relationship between or among two
or more Persons, means the possession, directly or indirectly, or as
trustee or executor, of the power to direct or cause the direction of
the affairs or management of a Person, whether through the ownership
of voting securities, as trustee or executor, by contract or
otherwise, including, without limitation, the ownership, directly or
indirectly, of securities having the power to elect a majority of the
board of directors or similar body governing the affairs of such
Person; PROVIDED THAT a Person shall not be deemed to Control any
Person that is a publicly traded company if its ownership of voting
securities does not constitute a majority of the voting securities of
such Person;
(o) "Defaulting Shareholder" means any Shareholder that (i) has failed to
pay its Outstanding Obligations within ten (10) Business Days of when
due, (ii) is in material breach of its obligations under Section 3.07
of the Shareholders Agreement or Bye-law 68 or (iii) has willfully
failed to refer a material business opportunity to the Company in
breach of its obligations under Section 5.05 of the Shareholders
Agreement and such material business opportunity is pursued by such
Shareholder or any Affiliate independently of the Company; PROVIDED
THAT a Shareholder shall cease to be a Defaulting Shareholder upon
payment of such Outstanding Obligations or upon the curing of any such
material breach; and PROVIDED FURTHER THAT any such material breach of
Section 5.05 of the Shareholders Agreement will be considered cured if
such business opportunity is referred to the Company in accordance
with Section 5.05 of the Shareholders Agreement on terms no less
favorable than those originally obtained by such Shareholder or its
Affiliate, as the case may be. Notwithstanding the foregoing, no
Shareholder shall be deemed to be a Defaulting Shareholder based on
any material breach of its obligations under the Shareholders
Agreement or Bye-law 68 (other than a failure to pay or perform its
Outstanding Obligations in accordance with the terms of the
Shareholder's Agreement and, if applicable, its Promissory Note or
Special Notes) unless such Shareholder has received express written
notice of such material breach from Shareholders holding at least
fifty percent (50%) of the Equity Interests of the Company, and such
Shareholder fails to cure such material breach within thirty (30) days
after receipt of such notice;
(p) "Director" means a director of the Company and shall include an
Alternate Director;
(q) "Encumbrance" means any security interest, pledge, mortgage, lien
(including, without limitation, environmental and tax liens), charge,
encumbrance or adverse claim;
(r) "Equity Interests" means, with respect to any Person, all of the
shares of Capital Stock of (or other ownership or profit interests in)
such Person, all of the warrants, options or other rights for the
purchase or acquisition from such Person of shares of Capital Stock of
(or other ownership or profit interests in) such Person, all of the
securities (including loans, notes, debentures or other debt
instruments) convertible into or exchangeable for shares of Capital
Stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such
Person of such shares (or such other interests), and all of the other
ownership or profit interests in such Person (including, without
limitation, partnership, member or trust interests therein), whether
voting or non-voting;
(s) "Fully Diluted Shares" means the aggregate of (i) the number of Shares
issued and outstanding (other than Shares held by any wholly owned
Subsidiary of the Company) and (ii) the number of Shares issuable upon
(A) the exercise of any outstanding options, warrants or similar
instruments (other than such instruments held by any wholly owned
Subsidiary of the Company) and (B) the exercise of any conversion or
exchange rights with respect to any outstanding securities or
instruments (other than such securities or instruments held by any
wholly owned Subsidiary of the Company);
(t) "Governmental Authority" means , in any applicable jurisdiction, any
federal, provincial, state or local government, any governmental,
regulatory or administrative authority, agency or commission, or any
court or tribunal, or judicial or arbitral body;
(u) "Indebtedness" means, with respect to any Person, and in the case of
clauses (a) through (h) below, whether secured or unsecured, (a), all
indebtedness of such Person, whether or not contingent, for borrowed
money, (b) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (c) all indebtedness created
or arising under any conditional sale or other title retention
agreement with respect to property acquired by such Person (even
though the rights and remedies of the sellers or lenders under such
agreement in the event of default are limited to repossession or sale
of such property), (d) all obligations of such Person as lessee under
leases that have been or should be, in accordance with U.S. GAAP,
recorded as capital leases, (e) all obligations contingent or
otherwise, of such Person under acceptance, letter of credit or
similar facilities, (f) all obligations of such Person to purchase,
redeem, retire, defease or otherwise acquire for value any Equity
Interests of such Person, valued, in the case of redeemable preferred
stock, at the greater of its voluntary or involuntary liquidation
preference, plus accrued and unpaid dividends, (g) all obligations of
such Person for the deferred purchase price of property or services
(other than current trade payables incurred in the ordinary course of
business), (h) all obligations of such Person in respect of interest
rate swaps, caps or collar agreements or similar arrangements, and (i)
all Indebtedness of others referred to in clauses (a) through (h)
above guaranteed directly or indirectly in any manner by such Person
or secured by any Encumbrance on property (including accounts and
contract rights) owned by such Person.
(v) "Initial Business Plan" means the initial business plan of the Company
attached as Exhibit C to the Shareholders Agreement;
(w) "Initial Shareholder" means each of BCI Investments, AM Latin America
and SBCI Brazil Holding.
(x) "Initial Structure" means the tax structure in respect of the Company
and its Subsidiaries described in Exhibit J to the Shareholders
Agreement;
(y) "Interim Financial Statements" means true and complete copies of the
unaudited consolidated balance sheet of the Company and the related
unaudited consolidated statements of income, retained earnings,
shareholders' equity and cash flows of the Company, together with all
related notes and schedules thereto, if any, prepared in accordance
with U.S. GAAP (except as noted therein).
(z) "Intermediate Company" means any Person (other than a Regulated Opco)
that is a Subsidiary or Minority Investee of the Company;
(aa) "Joint Venture Agreement" means the Amended and Restated Joint Venture
Agreement dated as of September 25, 2000 among BCI, America Movil,
S.A. de C.V., as successor in interest to Telefonos de Mexico, S.A. de
C.V., and SBCI.
(bb) "Law" means, in any applicable jurisdiction, any federal, provincial,
state, local or foreign statute, law, treaty, ordinance, regulation,
rule, code, order or other requirement or rule of law;
(cc) "Member" means the person registered in the Register of Members as the
holder of shares in the Company and, when two or more persons are so
registered as joint holders of shares, means all of such persons;
(dd) "Minority Investee" means any Person (other than a Subsidiary of the
Company) in which the Company, directly or indirectly, holds an Equity
Interest;
(ee) "New Securities" means any Capital Stock of the Company, whether or
not authorized at the time of adoption of these Bye-laws, and rights,
options or warrants to purchase such Capital Stock, and securities of
any type whatsoever that are, or may become, convertible into or
exchangeable or exercisable for Capital Stock of the Company; PROVIDED
THAT the term "New Securities" does not include (i) securities of the
Company or any of the Company's Subsidiaries issued to employees,
consultants, officers or directors of the Company in their capacity as
such, or which have been reserved for issuance, pursuant to any
employee share option, share purchase, share bonus plan, or other
similar share agreement or arrangement approved by the Board, (ii)
securities of the Company issued in connection with any share
subdivision, consolidation, bonus issue or recapitalization of the
Company and (iii) securities of the Company issued in connection with
an initial public offering;
(ff) "notice" means written notice as further defined in these Bye-laws
unless otherwise specifically stated;
(gg) "Officer" means any person appointed by the Board to hold an office in
the Company;
(hh) "Opco" means any of (i) the Regulated Opcos, (ii) Genesis Telecom
C.A., a company organized under the laws of Venezuela, or
Comunicaciones 2163 C.A., a company organized under the laws of
Venezuela, and (iii) any other operating company in which the Company
now or hereafter, directly or indirectly, holds an Equity Interest;
(ii) "Outstanding" means, with respect to the common shares of the Company,
as of any date of determination, common shares that have been issued
on or prior to such date, other than common shares redeemed,
repurchased or otherwise reacquired by the Company (or held by any
Subsidiary of the Company) on or prior to such date.
(jj) "Outstanding Obligations" means, with respect to any Initial
Shareholder, the obligations of such Shareholder under (i) such
Shareholder's Promissory Note, (ii) additionally, in the case of BCI
Investments, the obligations of BCI Investments under the Special
Notes, including, without limitation, the obligation to deliver to the
Company the Vesper Net Sale Proceeds (as defined in the Joint Venture
Agreement), in each case upon such obligations becoming due and
payable in accordance with the terms of such Promissory Note or
Special Notes, as the case may be, and (iii) additionally, in the case
of AM Latin America, the obligation to contribute the Techtel Amount
(as defined in the Joint Venture Agreement) to the Company pursuant to
Section 2.03(c) of the Joint Venture Agreement;
(kk) "Permitted Transferee" means, with respect to any Shareholder, any
Person (a "transferee") with respect to which the Sponsor Party of
such Shareholder maintains a majority economic and voting interest;
PROVIDED THAT no such Person shall be deemed to be a Permitted
Transferee if any Person other than the Sponsor Party is permitted, by
contract or otherwise, to direct or influence the exercise by such
transferee of any rights under the Shareholders Agreement or these
Bye-laws, including, without limitation, rights pursuant to Bye-law
11; and, PROVIDED FURTHER THAT such Shareholder and its Sponsor Party
comply with their respective obligations set forth in clause (6) of
Bye-law 68;
(ll) "Person" means any individual, partnership, firm, limited liability
company, corporation, association, trust, unincorporated organization
or other entity, as well as any syndicate or group that would be
deemed to be a person under section 13(d)(3) of the U.S. Securities
Exchange Act of 1934, as amended, and the rules and regulations
promulgated by the U.S. Securities and Exchange Commission thereunder;
(mm) "Promissory Note" means (a) with respect to BCI Investments, the
promissory note dated November 16, 2000 between BCI Investments and
the Company in the principal amount of $427,500,000, and (b) with
respect to AM Latin America, the promissory note dated November 16,
2000 between AM Latin America and the Company in the principal amount
of $1,007,500,000, in each case as the principal amount of such
promissory note may be adjusted pursuant to Section 2.05 or Article VI
of the Joint Venture Agreement;
(nn) "Qualified Vote" means (a) with respect to any vote of the Board, the
affirmative vote of at least one Director nominated by each Veto
Shareholder that (i) is not a Defaulting Shareholder at the time of
such vote, and (ii) is not prohibited from voting pursuant to the last
proviso of Section 3.08(b), the last sentence of Section 5.05(b) or
the last sentence of Section 5.05(e) of the Shareholders Agreement and
(b) with respect to any vote of the Members, the affirmative vote of
each Veto Shareholder that (i) is not a Defaulting Shareholder at the
time of such vote, and (ii) is not prohibited from voting pursuant to
the last proviso of Section 3.08(b), the last sentence of Section
5.05(b) or the last sentence of Section 5.05(e) of the Shareholders
Agreement.
(oo) "Register of Directors and Officers" means the Register of Directors
and Officers referred to in these Bye-laws;
(pp) "Register of Members" means the Register of Members referred to in
these Bye-laws;
(qq) "Regulated Opcos" means Americel S.A., a corporation (sociedade por
acoes) organized under the laws of Brazil, ATL-Algar Telecom Leste,
S.A., a corporation (sociedade por acoes) organized under the laws of
Brazil, Canbras Participacoes Ltda., a corporation (sociedad por
quotas de responsabilidade limitada) organized under the laws of
Brazil, Comunicacion Celular S.A., Comcel S.A., a corporation
(sociedad anonima) organized under the laws of Colombia, Telet S.A., a
corporation (sociedade por acoes) organized under the laws of Brazil,
TV Mogno Ltda., a corporation (sociedade por quotas de
responsabilidade limitada) organized under the laws of Brazil, TV
Eucalipto Ltda., a corporation (sociedade por quotas de
responsabilidade limitada) organized under the laws of Brazil, TVA
Jacaranda Ltda., a corporation (sociedade por quotas de
responsabilidade limitada) organized under the laws of Brazil and
Walberg Comunicacoes Ltda., a corporation (sociedade por quotas de
responsabilidade limitada) organized under the laws of Brazil;
provided, however, that each such Person shall cease to be deemed a
Regulated Opco upon expiration or termination of applicable
contractual or regulatory requirements restricting the transfer of
control of such Person and, in the case of regulatory requirements,
upon approval by the relevant Governmental Authorities of the transfer
of control of such Person to the Company.
(rr) "Resident Representative" means any person appointed to act as
resident representative and includes any deputy or assistant resident
representative;
(ss) "Sale" means any sale, assignment, transfer, distribution or other
disposition of Shares, including the grant of an irrevocable option or
put in respect of such Shares, or other rights therein, whether
voluntarily or by operation of law;
(tt) "SBCI" means SBC International, Inc., a corporation incorporated under
the laws of the State of Delaware;
(uu) "SBCI Brazil Holding" means SBC International - Brazil Holding Ltd., a
company incorporated under the laws of the Cayman Islands;
(vv) "SBCI Parent" means SBC Communications Inc., a corporation organized
under the laws of the State of Delaware;
(ww) "Secretary" means the person appointed to perform any or all the
duties of secretary of the Company and includes any deputy or
assistant secretary;
(xx) "Securities Act" means the U.S. Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder;
(yy) "Series C Shares" shall have the meaning as set forth in Bye-law
52(1).
(zz) "Shareholder" means each of BCI Investments, AM Latin America and SBCI
Brazil Holding and each other Person that becomes a party to the
Shareholders Agreement in accordance with Section 4.06 thereof;
(aaa) "Shareholders Agreement" means the Shareholders Agreement, dated as
of November 16, 2000, among Bell Canada International Investments
Limited, AM Latin America, LLC, SBC International - Brazil Holding,
Ltd. and Telecom Americas Ltd., as such Agreement may be amended from
time to time in accordance with the terms thereof;
(bbb) "Shares" means any common share of the Company;
(ccc) "Special Notes" means (a) the Exchangeable Promissory Note, Series A,
dated November 16, 2000 between BCI Investments and the Company in the
principal amount of $300,000,000, and (b) the Redeemable and
Exchangeable Promissory Note, Series B, dated November 16, 2000
between BCI Investments and the Company in the principal amount of
$275,000,000;
(ddd) "Sponsor Party" means, in the case of SBCI Sub and its Permitted
Transferees, SBCI Parent; in the case of AM Latin America and its
Permitted Transferees, America Movil; and, in the case of BCI Sub and
its Permitted Transferees, BCE and, with respect to each Shareholder
other than an Initial Shareholder or Permitted Transferee of an
Initial Shareholder, the ultimate parent company of such Shareholder.
(eee) "Subsidiary" or "Subsidiaries" of any Person means any other Person
of which (i) the first mentioned Person or any Subsidiary thereof is a
general partner, (ii) voting power to elect a majority of the board of
directors or others performing similar functions with respect to such
other Person is held by the first mentioned Person and/or by any one
or more of its Subsidiaries, or (iii) more than 50% of the voting
Equity Interests of such other Person is, directly or indirectly,
owned or Controlled by such first mentioned Person and/or by any one
or more of its Subsidiaries.
(fff) "Unwind Date" means the date on which the transactions contemplated
in Section 5.11 of the Shareholders Agreement are consummated; and
(ggg) "Veto Shareholder" means any Shareholder that is entitled to nominate
two or more directors to the Board pursuant to clause (1) of Bye-law
12.
(2) In these Bye-laws, each of the terms set forth below shall have the
meaning ascribed thereto in the following Bye-laws:
Term: Bye-law:
---- -------
Advancing Party............................................... 60(2)
Business Plan................................................. 11(a)
Default Amount................................................ 60(1)
Defaulting Party.............................................. 60(1)
Default Interest Amount....................................... 60(3)
Default Rate.................................................. 60(1)
Director Transferee........................................... 66
Due Date...................................................... 60(1)
One Director Date............................................. 12(2)
Redemption Date............................................... 52(3)(d)
Redemption Price Per Share.................................... 52(3)(d)
Series C Amount............................................... 52(3)(e)
Series C Conversion Date...................................... 52(3)(f)
Special Note, Series B........................................ 52(3)(d)
Two Director Date............................................. 12(1)(c)
Veto Transferee............................................... 65
(3) In these Bye-laws, where not inconsistent with the context:
(a) words denoting the plural number include the singular number and
vice versa;
(b) words denoting the masculine gender include the feminine gender;
(c) words importing persons include companies, associations or bodies
of persons whether corporate or not;
(d) the word:
(i) "may" shall be construed as permissive;
(ii) "shall" shall be construed as imperative; and
(e) unless otherwise provided herein words or expressions defined in the
Act shall bear the same meaning in these Bye-laws.
(4) Expressions referring to writing or written shall, unless the contrary
intention appears, include facsimile, printing, lithography, photography and
other modes of representing words in a visible form.
(5) Headings used in these Bye-laws are for convenience only and are not to
be used or relied upon in the construction hereof.
(6) In the event that any provision of these Bye-laws conflicts with any
provision of the Shareholders Agreement, the terms of the Shareholders Agreement
shall prevail.
BOARD OF DIRECTORS
2. Board of Directors
The business of the Company shall be managed and conducted by the Board.
3. Management of the Company
(1) Subject to Bye-law 11, in managing the business of the Company, the
Board may exercise all such powers of the Company as are not, by statute or by
these Bye-laws, required to be exercised by the Company in general meeting
subject, nevertheless, to these Bye-laws, the provisions of any statute and to
such directions as may be prescribed by the Company in general meeting.
(2) No regulation or alteration to these Bye-laws made by the Company in
general meeting shall invalidate any prior act of the Board which would have
been valid if that regulation or alteration had not been made.
(3) The Board may procure that the Company pays all expenses incurred in
promoting and incorporating the Company.
4. Chairman and Deputy Chairman of the Board
Each of the Chairman and Deputy Chairman of the Board shall be designated
by the Shareholders at the annual general meeting on a rotating basis in the
following order: BCI Investments, SBCI Brazil Holding (in the event that SBCI
Brazil Holding has the right to nominate two (2) Directors to the Board pursuant
to Bye-law 12) and AM Latin America, for a term ending at the next annual
general meeting. The Chairman of the Board from the date of adoption of these
Bye-laws until the election of a successor shall be Carlos Slim Hely. The Deputy
Chairman of the Board from the date of adoption of these Bye-laws until the
election of a successor shall be Louis Tanguay.
5. Power to authorise specific actions
Subject to Bye-law 11, the Board may from time to time and at any time
authorise any company, firm, person or body of persons to act on behalf of the
Company for any specific purpose and in connection therewith to execute any
agreement, document or instrument on behalf of the Company.
6. Power to appoint attorney and auditors
Subject to Bye-law 11, the Board may from time to time and at any time by
power of attorney appoint any company, firm, person or body of persons, whether
nominated directly or indirectly by the Board, to be an attorney of the Company
for such purposes and with such powers, authorities and discretions (not
exceeding those vested in or exercisable by the Board) and for such period and
subject to such conditions as it may think fit and any such power of attorney
may contain such provisions for the protection and convenience of persons
dealing with any such attorney as the Board may think fit and may also authorize
any such attorney to sub-delegate all or any of the powers, authorities and
discretions so vested in the attorney. Such attorney may, if so authorized under
the seal of the Company, execute any deed or instrument under such attorney's
personal seal with the same effect as the affixation of the seal of the Company.
7. Power to delegate to a committee
Subject to Bye-law 11, the Board may delegate any of its powers to a
committee appointed by the Board which may consist partly or entirely of
non-Directors and every such committee shall conform to such directions as the
Board shall impose on them. The meetings and proceedings of any such committee
shall be governed by the provisions of these Bye-laws regulating the meetings
and proceedings of the Board, so far as the same are applicable and are not
superceded by directions imposed by the Board.
8. Power to appoint and dismiss employees
Subject to Bye-law 25, the Board may appoint, suspend or remove any
manager, secretary, clerk, agent or employee of the Company and may fix their
remuneration and determine their duties.
9. Power to borrow and charge property
Subject to Bye-law 11, the Board may exercise all the powers of the Company
to borrow money and to mortgage or charge its undertaking, property and uncalled
capital, or any part thereof, and may issue debentures, debenture stock and
other securities whether outright or as security for any debt, liability or
obligation of the Company or any third party.
10. Exercise of power to purchase shares of or discontinue the Company
(1) Subject to Bye-law 11, the Board may exercise all the powers of the
Company to purchase all or any part of its own shares pursuant to Section 42A of
the Act.
(2) Subject to Section 5.14 of the Shareholders Agreement, the Board may
exercise all the powers of the Company to discontinue the Company to a named
country or jurisdiction outside Bermuda pursuant to Section 132G of the Act.
11. Matters Requiring a Qualified Vote of the Board
Notwithstanding anything to the contrary in these Bye-laws and
notwithstanding that no vote may be required, or that a lesser percentage vote
may be required, by Law or otherwise, the Company shall not take any action with
respect to the following actions without a Qualified Vote of the Board and, if
approval of such action by the Members is required by Law, without a Qualified
Vote of the Members:
(a) the approval of (i) any material amendments to the Initial
Business Plan, (ii) from time to time after the term of the
Initial Business Plan, the annual budget and multi-year business
plan for the Company which shall include (A) projected statements
of income, cash flows and balance sheet; (B) all material capital
expenditures for the Company and the Intermediate Companies; and
(C) all borrowing plans and other plans to incur Indebtedness,
and significant changes to either (each a "Business Plan"), and
(iii) material amendments to any future Business Plan; PROVIDED
THAT if a Business Plan or proposed material amendment to an
existing Business Plan has not been adopted by a Qualified Vote
one (1) month prior to the first fiscal year corresponding to
such Business Plan, a Business Plan (or amendment) providing for
an annual budget with expenses and capital expenditures not in
excess of 110% of those set forth in the Business Plan for the
immediately preceding fiscal year may be approved by the
affirmative vote of the majority of directors present; PROVIDED
FURTHER THAT, for the avoidance of doubt, no Business Plan
approved by the Board shall impede the exercise by any Person
that controls any Regulated Opco of its voting rights with
respect to such Regulated Opco
(b) a public offering of the Capital Stock of the Company or any
Intermediate Company;
(c) the issuance or sale of any Capital Stock of the Company;
(d) the issuance or sale of any notes, bonds, debt instruments or
other securities, or any option, warrant or other right to
acquire the same, of, or any other interest in, the Company or
any Intermediate Company, or any securities of any type
whatsoever that are, or may become, convertible into or
exchangeable or exercisable for Capital Stock of the Company or
any Intermediate Company;
(e) except as otherwise provided in Section 5.07 of the Shareholders
Agreement, the amalgamation or merger of the Company or any
Intermediate Company into or with any other Person, the
consolidation with any Person by the Company or any Intermediate
Company, or the sale, reorganization or restructuring of the
Company or any Intermediate Company (or any similar transaction);
(f) the acquisition of assets or businesses of any Person by the
Company or any Intermediate Company the purchase price for which
exceeds US$100 million or which would be reasonably likely to
delay the Unwind Date;
(g) the sale, assignment, transfer, lease, sublease, charge,
mortgage, pledge, grant of security interest in, sublicense or
other disposition of any material license of the Company or any
Intermediate Company;
(h) the sale, assignment, transfer, lease, sublease, mortgage,
pledge, grant of security interest in, license or other
disposition of any assets of the Company or any Intermediate
Company the value of which assets exceeds US$50 million;
(i) (i) any incurrence, assumption or issuance by the Company or any
Intermediate Company of Indebtedness (A) if, after giving effect
to such incurrence, assumption or issuance (including the
application of the net proceeds therefrom), the Company's or any
Intermediate Company's ratio of Indebtedness to shareholders'
equity (based upon book value) would exceed, as of the date of
determination, 2.34:1, or (B) in excess of US$50 million, (ii)
the guaranteeing of any Indebtedness of any Subsidiary of the
Company in excess of US$50 million, or (iii) the guaranteeing of
any Indebtedness of any other Person;
(j) the entering by the Company or any Intermediate Company into of
any agreement, arrangement or transaction with any Affiliate of
the Company or any Shareholder or any Affiliate of any
Shareholder or Sponsor Party;
(k) any amendment to the Memorandum of Association of the Company or
these Bye-Laws or to the Memorandum of Association and Bye-Laws
(or similar instruments) of any Intermediate Company;
(l) the establishment or termination of any committee of the Board;
(m) the commencement, settlement, payment, discharge or satisfaction
of any litigation, claim, liability or obligation (absolute,
accrued, asserted or unasserted, contingent or otherwise) by the
Company or any Intermediate Company other than where such
litigation, claim, liability or obligation is only for money
damages that do not exceed US$50 million;
(n) the declaration or payment of dividends or distributions on or
with respect to any Capital Stock of the Company or any
Intermediate Company;
(o) except as otherwise permitted by the Business Plan, approving any
capital expenditure by the Company or any Intermediate Company
which exceeds, individually or in the aggregate, US$25 million;
(p) approving any matter to be voted upon at any meeting of the
Members of the Company;
(q) instructing the Company with respect to the voting of the shares
of any Intermediate Company held directly or indirectly by the
Company with respect to any matter listed in clause (b) and
clauses (d) through (p) above and clause (t) below;
(r) requesting payment under the Promissory Notes or reducing the
principal amount of the Promissory Notes prior to the stated
maturity of such Promissory Notes (which, in each case, shall be
effected on a pro rata basis based on the initial principal
amount of each Promissory Note);
(s) approving the operation of the Company in any manner contrary to
the first sentence of Section 5.14(a) of the Shareholders
Agreement; and
(t) the taking of any action, directly or indirectly, in
contemplation of any of the foregoing; PROVIDED THAT, for the
avoidance of doubt, no such action shall impede the exercise by
any Person that controls any Regulated Opco of its voting rights
with respect to such Regulated Opco.
12. Nomination of Directors
(1) (a) Subject to subclause (b) below, each of BCI Investments and AM
Latin America shall be entitled to nominate for election three (3) directors to
the Board for so long as BCI Investments or AM Latin America, as the case may
be, holds at least twenty percent (20%) of the Outstanding Shares; PROVIDED THAT
neither BCI Investments nor AM Latin America may exercise such right at any time
when it is a Defaulting Shareholder. If at any time either BCI Investments or AM
Latin America shall hold less than twenty percent (20%) of the Outstanding
Shares, BCI Investments or AM Latin America, as the case may be, shall forfeit
its right to nominate three (3) directors for election to the Board pursuant to
this subclause (a); PROVIDED THAT, subject to subclause (b) below, if: (A) at
any time subsequent to forfeiting such right, either BCI Investments or AM Latin
America, as the case may be, holds at least 20% of the Outstanding Shares of the
Company, and (B) BCI Investments or AM Latin America, as the case may be, has
not previously transferred its right to nominate three (3) directors for
election to the Board to a Veto Transferee pursuant to Bye-law 65, then BCI
Investments or AM Latin America, as the case may be, shall regain its right to
nominate three (3) directors for election to the Board pursuant to this
subclause (a).
(b) At any time when SBCI Brazil Holding shall have the right to
nominate one (1) director for election to the Board pursuant to
clause (2) below or two (2) directors for election pursuant to
subclause (c) below, each of BCI Investments and AM Latin America
shall be entitled to nominate two (2) directors for election to
the Board for so long as it holds at least twenty percent (20%)
of the Outstanding Shares; PROVIDED THAT no such Shareholder may
exercise such right at any time when it is a Defaulting
Shareholder. If at any time either BCI Investments or AM Latin
America shall hold less than twenty percent (20%) of the
Outstanding Shares, BCI Investments or AM Latin America, as the
case may be, shall forfeit its right to nominate two (2)
directors for election to the Board pursuant to this subclause
(b); PROVIDED THAT if: (A) at any time subsequent to forfeiting
such right, either BCI Investments or AM Latin America, as the
case may be, holds at least 20% of the Outstanding Shares, (B) at
such time SBCI Brazil Holding has the right to nominate one (1)
director for election to the Board pursuant to clause (2) of this
Bye-law 12 or two (2) directors for election to the Board
pursuant to subclause (c) below, and (C) BCI Investments or AM
Latin America, as the case may be, has not previously transferred
its right to nominate two (2) directors for election to the Board
to a Veto Transferee pursuant to Bye-law 65, then BCI Investments
or AM Latin America, as the case may be, shall regain its right
to nominate (2) directors for election to the Board pursuant to
this subclause (b).
(c) If at any time after the date hereof, SBCI Brazil Holding holds
twenty percent (20%) or more of the Outstanding Shares (the date
on which such interest is acquired, the "Two Director Date"), it
shall be entitled to nominate two (2) directors for election to
the Board for so long as it continues to hold at least twenty
percent (20%) of the Outstanding Shares; PROVIDED THAT SBCI
Brazil Holding may not exercise such right at any time when it is
a Defaulting Shareholder. If at any time prior to the Two
Director Date SBCI Brazil Holding shall hold less than ten
percent (10%) of the Outstanding Shares, or if at any time after
the Two Director Date SBCI Brazil Holding shall hold less than
twenty percent (20%) of the Outstanding Shares, it shall forfeit
its right to nominate two (2) directors for election to the Board
pursuant to this subclause (c); PROVIDED THAT if: (A) at any time
subsequent to forfeiting such right, SBCI Brazil Holding holds at
least 20% of the Outstanding Shares, and (B) SBCI Brazil Holding
has not previously transferred its right to nominate two (2)
directors for election to the Board to a Veto Transferee pursuant
to Bye-law 65, then SBCI Brazil Holding shall regain its right to
nominate two (2) directors for election to the Board pursuant to
this subclause (c).
(2) Each of BCI Investments and AM Latin America shall be entitled
hereunder to nominate one (1) director for election to the Board for so long as
it holds at least ten percent (10%) of the Outstanding Shares; PROVIDED THAT
neither BCI Investments nor AM Latin America may exercise such right at any time
when it is a Defaulting Shareholder. If at any time such Initial Shareholder
shall hold less than ten percent (10%) of the Outstanding Shares, it shall
forfeit such right; PROVIDED THAT if: (i) at any time subsequent to forfeiting
such right, either BCI Investments or AM Latin America, as the case may be,
holds at least 10% of the Outstanding Shares of the Company, and (ii) BCI
Investments or AM Latin America, as the case may be, has not previously
transferred its right to nominate one (1) director for election to the Board to
a Director Transferee pursuant to Bye-law 66 or its right to nominate two (2) or
three (3) directors for election to the Board to a Veto Transferee pursuant to
Bye-law 65, then BCI Investments or AM Latin America, as the case may be, shall
regain its right to nominate one (1) director for election to the Board pursuant
to this clause (2). Subject to the immediately succeeding sentence, if at any
time after the date hereof, SBCI Brazil Holding increases its ownership interest
in the Company such that it holds fifteen percent (15%) or more of the
Outstanding Shares (the date on which such interest is acquired, the "One
Director Date"), SBCI Brazil Holding shall be entitled to nominate one (1)
director for election to the Board for so long as it continues to hold at least
ten percent (10%) of the Outstanding Shares; PROVIDED THAT SBCI Brazil Holding
may not exercise such right at any time when it is a Defaulting Shareholder. If
at any time SBCI Brazil Holding shall hold less than ten percent (10%) of the
Outstanding Shares, it shall forfeit its right to nominate one (1) director for
election to the Board pursuant to this clause (2); PROVIDED THAT if: (i) at any
time subsequent to forfeiting such right, SBCI Brazil Holding holds at least 10%
of the Outstanding Shares of the Company, and (ii) SBCI Brazil Holding has not
previously transferred its right to nominate one (1) director for election to
the Board to a Director Transferee pursuant to Bye-law 66 or its right to
nominate two (2) directors for election to the Board to a Veto Transferee
pursuant to Bye-law 65, then SBCI Brazil Holding shall regain its right to
nominate (1) director for election to the Board pursuant to this clause (2). The
rights granted to each Initial Shareholder pursuant to this clause (2) shall not
be effective with respect to any Initial Shareholder that has the right to
nominate two (2) or more directors for election to the Board pursuant to clause
(1) above, or that has transferred its rights under clause (1) above pursuant to
Bye-law 65.
(3) No failure to nominate or elect a director at an annual or special
general meeting of the Company shall prevent any Shareholder from thereafter
nominating a director to fill such vacancy or shall constitute a waiver of such
party's rights under this Bye-law 12.
(4) Except as otherwise provided in these Bye-laws, all Directors shall be
nominated by Members holding a majority of Outstanding Shares entitled to vote
generally in the election of Directors.
13. Number of Directors
(1) Subject to Subclause (2) below, the Board shall consist of six
directors, with three directors nominated by BCI Investments and three directors
nominated by AM Latin America. Such directors shall be elected or appointed at
the annual general meeting or at any special general meeting called for the
purpose and shall hold office for such term as the Members may determine or, in
the absence of such determination, until the next annual general meeting or
until their successors are elected or appointed, their resignation or removal in
accordance with these Bye-laws, or their office is otherwise vacated, and,
except as otherwise provided herein, any general meeting may authorise the Board
to fill any vacancy in their number left unfilled at a general meeting.
(2) If at any time a Shareholder shall hold more than fifty percent (50%)
of the Outstanding Shares, the number of directors on the Board shall be
increased to such number as to permit such Shareholder to nominate a majority of
the directors of the Board; PROVIDED THAT any increase in the number of
directors on the Board pursuant to this clause (2) shall be effected without
detriment to the rights of Shareholders under Bye-law 12. Upon the occurrence of
the One Director Date, if the number of directors on the Board is six (6) and
there are two Veto Shareholders, the number of directors on the Board shall be
decreased to (5). Thereafter, the number of directors on the Board shall be
increased by one (1) member to a total of six (6) members if the number of Veto
Shareholders is increased to three (3).
14. Defects in appointment of Directors
Subject to Bye-law 60, all acts done bona fide by any meeting of the Board
or by a committee of the Board or by any person acting as a Director shall,
notwithstanding that it be afterwards discovered that there was some defect in
the appointment of any Director or person acting as aforesaid, or that they or
any of them were disqualified, be as valid as if every such person had been duly
appointed and was qualified to be a Director.
15. Alternate Directors
(1) Unless the Members otherwise resolve, any Director may appoint a person
or persons to act as a Director in the alternative to himself or herself by
notice in writing deposited with the Secretary. Any person so appointed shall
have all the rights and powers of the Director or Directors for whom such person
is appointed in the alternative; PROVIDED THAT such person shall not be counted
more than once in determining whether or not a quorum is present.
(2) An Alternate Director shall be entitled to receive notice of all
meetings of the Board and to attend and vote at any such meeting at which a
Director for whom such Alternate Director was appointed in the alternative is
not personally present and generally to perform at such meeting all the
functions of such Director for whom such Alternate Director was appointed.
(3) An Alternate Director shall cease to be such if the Director for whom
such Alternate Director was appointed ceases for any reason to be a Director.
16. Removal of Directors
(1) Subject to any provision to the contrary in these Bye-laws, including,
without limitation, clause (2) below, the Members may, at any special general
meeting convened and held in accordance with these Bye-laws, remove a Director,
PROVIDED THAT notice of the meeting convened for the purpose of removing a
Director shall be delivered to such Director not less than three (3) days before
the meeting and contain a statement of such intention.
(2) In the event that (a) the percentage of Outstanding Shares held by any
Initial Shareholder is reduced from twenty percent (20%) or greater to below
twenty percent (20%) (but such percentage is equal to or exceeds ten percent
(10%) of the Outstanding Shares), and as a result such Initial Shareholder shall
forfeit its existing rights under clause 1(a) of Bye-law 12 (and its rights
under clause 1(b) of Bye-law 12 become effective), or (b) the percentage of
Outstanding Shares held by (x) BCI Investments or AM Latin America is reduced
from a percentage that is less than twenty percent (20%) but at least ten
percent (10%) to less than ten percent (10%) of the Outstanding Shares, or (y)
SBCI Brazil Holding is reduced after the One Director Date from a percentage
that is less than twenty percent (20%) but at least ten percent (10%) to less
than ten percent (10%) of the Outstanding Shares, and, in either case, as a
result such Initial Shareholder shall forfeit its existing rights under clause
(2) of Bye-law 12, upon the written request of any Shareholder, the office of
one (1) Director nominated by such Initial Shareholder (or if the case of
subclause (a) arises prior to the earlier of the One Director Date or the Two
Director Date, the offices of two (2) directors nominated by such Initial
Shareholder) and specified in such request shall be vacated in accordance with
Bye-law 17(5). Any replacement for such removed director shall be nominated and
elected as provided in Bye-law 17(3).
(3) In the event that the percentage of Outstanding Shares held by any
Initial Shareholder is reduced from twenty percent (20%) or greater to less than
ten percent (10%) of the Outstanding Shares, and as a result such Initial
Shareholder shall forfeit its existing rights under clause (1) of Bye-law 12 and
potential rights under clause (2) of Bye-law 12, upon the written request of any
Shareholder, the offices of two (2) of the directors nominated by such Initial
Shareholder (or, prior to the occurrence of the earlier of the One Director Date
or the Two Director Date, the offices of three (3) directors nominated by such
Initial Shareholder) and specified in such request shall be vacated in
accordance with By-law 17(5). Any replacements for such removed directors shall
be nominated and elected as provided in Bye-law 17(3).
(4) In the event that the number of directors on the Board is reduced to
five (5) pursuant to clause (2) of Bye-Law 13, or if the Two Director Date
occurs on or prior to the One Director Date, the respective offices of one (1)
of the directors nominated by each Veto Shareholder shall be vacated in
accordance with Bye-law 17(5).
(5) For so long as any Shareholder is a Defaulting Shareholder, any other
Shareholder may request in writing the removal of the directors nominated by
such Defaulting Shareholder pursuant to Bye-law 12. Upon such request, the
offices of such Directors shall be vacated in accordance with Bye-law 17(5). Any
replacements for such directors shall be nominated and elected as provided in
Bye-law 17(3).
17. Vacancies on the Board
(1) In the event that a vacancy is created on the Board at any time by
death, disability, retirement, resignation, disqualification or removal of any
director (other than removal pursuant to clauses (2), (3) or (5) of Bye-law 16),
the Shareholder that nominated such director shall have the right to nominate a
replacement director to fill such vacancy. In the event a Shareholder having the
right to nominate a replacement Director shall not have nominated a replacement
Director to fill such vacancy at the time of the next following meeting of the
Board, the other Shareholders shall have the right to nominate a Director to
serve on the Board until such Shareholder shall nominate a replacement, and such
nominee shall be elected as a Director.
(2) Subject to any provision to the contrary in these Bye-laws, a vacancy
on the Board created by the removal of a Director may be filled by the Members
at the meeting at which such Director is removed.
(3) Subject to the provisions of Bye-laws 65 and 66, in the event that a
vacancy is created on the Board at any time by the removal of any Director or
Directors pursuant to clauses (2), (3) or (5) of Bye-law 16, the determination
as to which Shareholder or Shareholders shall have the right to nominate a
replacement Director or Directors to fill such vacancy shall be made on the
basis that representation on the Board shall be proportionate to each
Shareholders' percentage holdings of the Outstanding Shares, subject to the
rights of any Shareholder under Bye-law 12.
(4) The Board may act notwithstanding any vacancy in its number but, if and
so long as its number is reduced below the number fixed by these Bye-laws as the
quorum necessary for the transaction of business at meetings of the Board, the
continuing Directors or Director may act for the purpose of (i) summoning a
general meeting of the Company or (ii) preserving the assets of the Company.
(5) The office of Director shall be vacated if the Director:
(a) is removed from office pursuant to these Bye-laws or is
prohibited from being a Director by law;
(b) is or becomes bankrupt or makes any arrangement or composition
with his creditors generally;
(c) is or becomes of unsound mind or dies;
(d) resigns his or her office by notice in writing to the Company; or
(e) ceases to hold office by application of Bye-law 16.
18. Notice of meetings of the Board
(1) A Director may, and the Secretary on the requisition of a Director
shall, at any time summon a meeting of the Board.
(2) Notice of a meeting of the Board shall be given to each Director at
least two days prior to such meeting and shall be given to such Director
verbally in person or by telephone or otherwise communicated or sent to such
Director by post, cable, telex, telecopier, facsimile or other mode of
representing words in a legible and non-transitory form at such Director's last
known address or any other address given by such Director to the Company for
this purpose. Any Director may consent to a shorter notice period for any
meeting.
19. Quorum at meetings of the Board
A majority of Directors shall be present at any meeting of the Board, with
at least one Director nominated by each Veto Shareholder present, in order to
constitute a quorum for the transaction of business at such meeting; PROVIDED
THAT no Director nominated by a Veto Shareholder that is a Defaulting
Shareholder need be present in order to constitute a quorum for the transaction
of business at such meeting; PROVIDED FURTHER THAT in the event a quorum is not
present at any meeting of the Board at which the transaction of business does
not require a Qualified Vote pursuant to these Bye-laws, or at which certain
matters require a Qualified Vote and certain matters do not require a Qualified
Vote, then those matters not requiring a Qualified Vote shall be postponed to a
Board meeting to be held on the date that is five (5) Business Days after the
date on which the meeting was to be held, at which meeting the presence of a
majority of Directors shall constitute a quorum for the transaction of such
business that does not require a Qualified Vote pursuant to these Bye-laws.
20. Meetings of the Board
(1) The Board may meet for the transaction of business, adjourn and
otherwise regulate its meetings as it sees fit; PROVIDED THAT meetings of the
Board shall be held at least quarterly. Meetings of the Board shall not be held
in Mexico; PROVIDED THAT any Director may participate in telephonic meetings
while present in Mexico if a majority of the Directors participating in such
meeting are outside of Mexico.
(2) Directors may participate in any meeting of the Board by means of such
telephone or video conference facilities as permit all persons participating in
the meeting to communicate with each other simultaneously and instantaneously,
and participation in such a meeting shall constitute presence in person at such
meeting.
(3) Subject to any provision to the contrary in these Bye-laws, including,
without limitation, Bye-laws 11 and 46, a resolution put to the vote at a duly
convened meeting of the Board shall be carried by the affirmative votes of a
majority of the Directors present and entitled to vote on the action then being
considered, and in the case of an equality of votes the resolution shall fail.
(4) The provisions of the last sentence of Section 5.05(b) and the last
sentence of Section 5.05(e) of the Shareholders Agreement are hereby
incorporated by reference in their entirety in these Bye-laws.
21. Unanimous written resolutions
A resolution in writing signed by all the Directors which may be in
counterparts, shall be as valid as if it had been passed at a meeting of the
Board duly called and constituted, such resolution to be effective on the date
on which the last Director signs the resolution. For the purposes of this
Bye-law only, "Director" shall not include an Alternate Director.
22. Contracts and disclosure of Directors' interests
(1) Any Director, or any Director's firm, partner or any company with whom
any Director is associated, may act in a professional capacity for the Company
and such Director or such Director's firm, partner or such company shall be
entitled to remuneration for professional services as if such Director were not
a Director, PROVIDED THAT nothing herein contained shall authorise a Director or
Director's firm, partner or such company to act as Auditor of the Company.
(2) A Director who is directly or indirectly interested in a contract or
proposed contract or arrangement with the Company shall declare the nature of
such interest as required by the Act.
(3) Following a declaration being made pursuant to this Bye-law, and unless
disqualified by the chairman of the relevant Board meeting, a Director (other
than a Director nominated by a Defaulting Shareholder) may vote in respect of
any contract or proposed contract or arrangement in which such Director is
interested and may be counted in the quorum at such meeting.
23. Remuneration of Directors
The remuneration (if any) of the Directors shall be determined by the
Company in general meeting and shall be deemed to accrue from day to day. The
Directors may also be paid all travel, hotel and other expenses properly
incurred by them in attending and returning from meetings of the Board, any
committee appointed by the Board, general meetings of the Company, or in
connection with the business of the Company or their duties as Directors
generally.
OFFICERS
24. Officers of the Company
The Officers of the Company shall include a Chief Executive Officer, Chief
Financial Officer, a Secretary and such additional Officers as the Board may
from time to time determine all of whom shall be deemed to be Officers for the
purposes of these Bye-laws.
25. Appointment of Officers
During the term of the Shareholders Agreement, the Chief Executive Officer
and the Chief Financial Officer shall be selected by mutual agreement of the
Veto Shareholders; PROVIDED THAT for so long as AM Latin America is a Veto
Shareholder, AM Latin America shall have the sole right to nominate the Chief
Executive Officer, and for so long as BCI Investments is a Veto Shareholder, BCI
Investments shall have the sole right to nominate the Chief Financial Officer.
The Chairman and Deputy Chairman shall be appointed in accordance with Bye-law
4.
26. Remuneration of Officers
The Officers shall receive such remuneration as the Board may from time to
time determine.
27. Duties of Officers
The Officers shall have such powers and perform such duties in the
management, business and affairs of the Company as may be directed to them by
the Board from time to time. Notwithstanding the foregoing, the Chief Executive
Officer shall be responsible solely for overseeing the implementation of the
decisions of the Board by other officers of the Company and for proposing
resolutions for consideration of the Board. The Chief Executive Officer and
Chief Financial Officer shall report to the Board, and shall nominate the
remaining senior management of the Company for appointment by the Board and
shall nominate the senior management of the Intermediate Companies; PROVIDED
THAT, for the avoidance of doubt, members of senior management so nominated at
any Intermediate Company shall receive instructions solely from the board of
directors of the Intermediate Company to which such persons are appointed as
manager.
28. Removal of Chief Executive Officer and Chief Financial Officer
Upon the written request of Shareholders that hold, in the aggregate, a
majority of the Equity Interests of the Company, either the Chief Executive
Officer or the Chief Financial Officer of the Company shall be removed. Any
replacement for such removed Officer shall be nominated and appointed in
accordance with Bye-law 25.
29. Chairman of meetings
Unless otherwise agreed by a majority of those attending and entitled to
attend and vote thereat, the Chairman shall act as chairman at all meetings of
the Members and of the Board at which such person is present. In his absence the
Deputy Chairman, if present, shall act as chairman and in the absence of both of
them a chairman shall be appointed or elected by those present at the meeting
and entitled to vote.
30. Register of Directors and Officers
The Board shall cause to be kept in one or more books at the registered
office of the Company a Register of Directors and Officers and shall enter
therein the particulars required by the Act.
MINUTES
31. Obligations of Board to keep minutes
(1) The Board shall cause minutes to be duly entered in books provided for
the purpose:
(a) of all elections and appointments of Officers;
(b) of the names of the Directors present at each meeting of the
Board and of any committee appointed by the Board; and
(c) of all resolutions and proceedings of general meetings of the
Members, meetings of the Board, meetings of senior managers and
meetings of committees appointed by the Board.
(2) Minutes prepared in accordance with the Act and these Bye-laws shall be
kept by the Secretary at the registered office of the Company.
INDEMNITY
32. Indemnification of Directors and Officers of the Company
The Directors, Chairman, Vice Chairman, Chief Executive Officer, Chief
Financial Officer, Secretary and other Officers (such term to include, for the
purposes of Bye-laws 32 and 33, any person appointed to any committee by the
Board) for the time being acting in relation to any of the affairs of the
Company and the liquidator or trustees (if any) for the time being acting in
relation to any of the affairs of the Company and every one of them, and their
heirs, executors and administrators, shall be indemnified and secured harmless
out of the assets of the Company from and against all actions, costs, charges,
losses, damages and expenses which they or any of them, their heirs, executors
or administrators, shall or may incur or sustain by or by reason of any act
done, concurred in or omitted in or about the execution of their duty, or
supposed duty, or in their respective offices or trusts, and none of them shall
be answerable for the acts, receipts, neglects or defaults of the others of them
or for joining in any receipts for the sake of conformity, or for any bankers or
other persons with whom any moneys or effects belonging to the Company shall or
may be lodged or deposited for safe custody, or for insufficiency or deficiency
of any security upon which any moneys of or belonging to the Company shall be
placed out on or invested, or for any other loss, misfortune or damage which may
happen in the execution of their respective offices or trusts, or in relation
thereto, PROVIDED THAT this indemnity shall not extend to any matter in respect
of any fraud or dishonesty which may attach to any of said persons.
33. Waiver of claim by Member
Each Member agrees to waive any claim or right of action such Member might
have, whether individually or by or in the right of the Company, against any
Director or Officer on account of any action taken by such Director or Officer,
or the failure of such Director or Officer to take any action in the performance
of his duties with or for the Company, PROVIDED THAT such waiver shall not
extend to any matter in respect of any fraud or dishonesty which may attach to
such Director or Officer.
MEETINGS
34. Notice of annual general meeting; Postponement of Meetings
(1) The annual general meeting of the Company shall be held in each year
other than the year of incorporation at such time and place as the Chief
Executive Officer or any two Directors or any Director and the Secretary or the
Board shall appoint. At least ten (10) Business Days' notice of such meeting
shall be given to each Member stating the date, place and time at which the
meeting is to be held, that the election of Directors will take place thereat,
and as far as practicable, the other business to be conducted at the meeting.
(2) The Secretary may postpone any general meeting called in accordance
with the provisions of these Bye-laws (other than a meeting requisitioned under
these Bye-laws) provided that notice of postponement is given to each Member
before the time for such meeting. Fresh notice of the date, time and place for
the postponed meeting shall be given to each Member in accordance with the
provisions of these Bye-laws.
35. Notice of special general meeting
The Board may convene a special general meeting of the Company whenever by
decision of a majority of the Board such a meeting is required by Law or is
required pursuant to Bye-law 46, upon not less than ten (10) Business Days'
notice which shall state the date, time, place and the general nature of the
business to be considered at the meeting.
36. Accidental omission of notice of general meeting
The accidental omission to give notice of a general meeting to, or the
non-receipt of notice of a general meeting by, any person entitled to receive
notice shall not invalidate the proceedings at that meeting.
37. Meeting called on requisition of Members
Notwithstanding anything herein, the Board shall, on the requisition of
Members holding at the date of the deposit of the requisition not less than
one-tenth of such of the paid-up share capital of the Company as at the date of
the deposit carries the right to vote at general meetings of the Company,
forthwith proceed to convene a special general meeting of the Company and the
provisions of Section 74 of the Act shall apply.
38. Short notice
A general meeting of the Company shall, notwithstanding that it is called
by shorter notice than that specified in these Bye-laws, be deemed to have been
properly called if it is so agreed by (i) all the Members entitled to attend and
vote thereat in the case of an annual general meeting; and (ii) by a majority in
number of the Members having the right to attend and vote at the meeting, being
a majority together holding not less than 95% in nominal value of the shares
giving a right to attend and vote thereat in the case of a special general
meeting.
39. Quorum for general meeting
Shareholders holding a majority of the Outstanding Shares entitled to vote
(which majority shall include each Veto Shareholder) shall be present at any
meeting of the Members in order to constitute a quorum for the transaction of
business at such meeting; PROVIDED THAT no Veto Shareholder that is a Defaulting
Shareholder need be present at any meeting of the Members in order to constitute
a quorum for the transaction of business at such meeting (and any Shares held by
any such Defaulting Shareholder shall not be considered "entitled to vote" for
these purposes); PROVIDED FURTHER THAT in the event any Veto Shareholder (other
than a Defaulting Shareholder) is not present at any duly called meeting of
Shareholders at which the transaction of business does not require a Qualified
Vote pursuant to these Bye-laws, or at which certain matters require a Qualified
Vote and certain matters do not require a Qualified Vote, then any matter to be
submitted to a vote of Members at such meeting that does not require a Qualified
Vote shall be postponed to a meeting of Members to be held on the date that is
five Business Days after the date on which the original meeting was to be held,
at which meeting the presence of Shareholders holding a majority of the
Outstanding Shares shall constitute a quorum for the approval of those matters
not requiring a Qualified Vote.
40. Adjournment of meetings
The chairman of a general meeting may, with the consent of the Members at
any general meeting at which a quorum is present (and shall if so directed),
adjourn the meeting. Unless the meeting is adjourned to a specific date and
time, fresh notice of the date, time and place for the resumption of the
adjourned meeting shall be given to each Member in accordance with the
provisions of these Bye-laws.
41. Attendance at meetings
Members may participate in any general meeting by means of such telephone
or video conference facilities so as to permit all persons participating in the
meeting to communicate with each other simultaneously and instantaneously, and
participation in such a meeting shall constitute presence in person at such
meeting.
42. Written resolutions
(1) Subject to clause (6) below, anything which may be done by resolution
of the Company in general meeting or by resolution of a meeting of any class of
the Members of the Company, may, without a meeting and without any previous
notice being required, be done by resolution in writing signed by, or, in the
case of a Member that is a corporation whether or not a company within the
meaning of the Act, on behalf of, all the Members who at the date of the
resolution would be entitled to attend the meeting and vote on the resolution.
(2) A resolution in writing may be signed by, or, in the case of a Member
that is a corporation whether or not a company within the meaning of the Act, on
behalf of, all the Members, or any class thereof, in as many counterparts as may
be necessary.
(3) For the purposes of this Bye-law, the date of the resolution is the
date when the resolution is signed by, or, in the case of a Member that is a
corporation whether or not a company within the meaning of the Act, on behalf
of, the last Member to sign and any reference in any Bye-law to the date of
passing of a resolution is, in relation to a resolution made in accordance with
this Bye-law, a reference to such date.
(4) A resolution in writing made in accordance with this Bye-law is as
valid as if it had been passed by the Company in general meeting or by a meeting
of the relevant class of Members, as the case may be, and any reference in any
Bye-law to a meeting at which a resolution is passed or to Members voting in
favour of a resolution shall be construed accordingly.
(5) A resolution in writing made in accordance with this Bye-law shall
constitute minutes for the purposes of Sections 81 and 82 of the Act.
(6) This Bye-law shall not apply to
(a) a resolution passed pursuant to Section 89(5) of the Act, or
(b) a resolution passed for the purpose of removing a Director before
the expiration of his term of office under these Bye-laws.
43. Attendance of Directors
The Directors of the Company shall, upon written request deposited at the
registered office of the Company, be entitled to receive notice of and to attend
and be heard at any general meeting.
44. Voting at meetings
(1) Subject to the provisions of the Act and these Bye-laws, any question
proposed for the consideration of the Members at any general meeting shall be
decided by the affirmative votes of a majority of the votes cast in accordance
with the provisions of these Bye-laws and in the case of an equality of votes
the resolution shall fail. Notwithstanding the foregoing, any action of the
Company that is required by Law to be approved by the Members or that requires a
Qualified Vote pursuant to Bye-law 11 shall require the approval of each Veto
Shareholder (other than a Defaulting Shareholder), and any of the matters set
forth in Bye-law 46 shall require the approval of each Initial Shareholder
(other than a Defaulting Shareholder) holding at least ten percent (10%) of the
Outstanding Shares.
(2) No Member shall be entitled to vote at any general meeting unless such
Member has paid all the calls on all shares held by such Member.
(3) Any Sale of Shares not permitted by the provisions of these Bye-laws
shall result in the loss of all voting rights of the Shares that were the
subject of such Sale, and no Member holding such Shares shall be entitled to
vote at any general meeting.
(4) The provisions of the last sentence of Section 5.05(b) and the last
sentence of Section 5.05(e) of the Shareholders Agreement are hereby
incorporated by reference in their entirety in these Bye-laws.
45. Voting on show of hands
At any general meeting a resolution put to the vote of the meeting shall,
in the first instance, be voted upon by a show of hands and, subject to any
rights or restrictions for the time being lawfully attached to any class of
shares and subject to the provisions of these Bye-laws, every Member present in
Person and every person holding a valid proxy at such meeting shall be entitled
to one vote and shall cast such vote by raising his or her hand.
46. Other Matters Requiring a Special Vote
Notwithstanding any other provision of these Bye-laws and notwithstanding
that no vote may be required, or that a lesser percentage vote may be required,
by Law or otherwise, the Company shall not take any action without the
affirmative vote of each Initial Shareholder holding at least ten percent (10%)
of the Outstanding Shares with respect to the following actions:
(a) a material change in the nature or scope of the business or
corporate strategy of the Company or any Intermediate Company or
the entering into a joint venture or similar strategic alliance
by any thereof with any Person; and
(b) the winding up or dissolution of the Company or any Intermediate
Company; the adoption of a plan of liquidation of the Company or
any Intermediate Company; any action by the Company or any
Intermediate Company to commence any suit, case, proceeding or
other action (i) under any existing or future law of any
jurisdiction relating to bankruptcy, insolvency, reorganization
or relief of debtors seeking to have an order for relief entered
with respect to the Company or any Intermediate Company, or
seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to the
Company or any Intermediate Company or (ii) seeking appointment
of a receiver, trustee, custodian or other similar official for
the Company or any Intermediate Company, or for all or any part
of its assets, or making a general assignment for the benefit of
the creditors of the Company or any Intermediate Company;
PROVIDED THAT the affirmative vote of any Initial Shareholder holding at
least ten percent (10%) of the Outstanding Shares shall not be required if such
Initial Shareholder, at the time of such vote, is a Defaulting Shareholder, and
such Initial Shareholder need not be present at a meeting of the Shareholders,
in order to achieve a quorum for a meeting to take action on any of the matters
specified in this Bye-law 46.
47. Decision of chairman
At any general meeting a declaration by the chairman of the meeting that a
question proposed for consideration has, on a show of hands, been carried, or
carried unanimously, or by a particular majority, or lost, and an entry to that
effect in a book containing the minutes of the proceedings of the Company shall,
subject to the provisions of these Bye-laws, be conclusive evidence of that
fact.
48. Demand for a poll
(1) Notwithstanding the provisions of the immediately preceding two
Bye-laws, at any general meeting of the Company, in respect of any question
proposed for the consideration of the Members (whether before or on the
declaration of the result of a show of hands as provided for in these Bye-laws),
a poll may be demanded by any of the following persons:
(a) the chairman of such meeting; or
(b) at least three Members present in Person or represented by proxy;
or
(c) any Member or Members present in Person or represented by proxy
and holding between them not less than one-tenth of the total
voting rights of all the Members having the right to vote at such
meeting; or
(d) any Member or Members present in Person or represented by proxy
holding shares in the Company conferring the right to vote at
such meeting, being shares on which an aggregate sum has been
paid up equal to not less than one-tenth of the total sum paid up
on all such shares conferring such right.
(2) Where, in accordance with the provisions of clause (1) of this Bye-law,
a poll is demanded, subject to any rights or restrictions for the time being
lawfully attached to any class of shares, every person present at such meeting
shall have one vote for each share of which such person is the holder or for
which such person holds a proxy and such vote shall be counted in the manner set
out in clause (4) of this Bye-Law or in the case of a general meeting at which
one or more Members are present by telephone in such manner as the chairman of
the meeting may direct and the result of such poll shall be deemed to be the
resolution of the meeting at which the poll was demanded and shall replace any
previous resolution upon the same matter which has been the subject of a show of
hands.
(3) A poll demanded in accordance with the provisions of clause (1) of this
Bye-law, for the purpose of electing a chairman of the meeting or on a question
of adjournment, shall be taken forthwith and a poll demanded on any other
question shall be taken in such manner and at such time and place as the
Chairman (or acting chairman) may direct and any business other than that upon
which a poll has been demanded may be proceeded with pending the taking of the
poll.
(4) Where a vote is taken by poll, each person present and entitled to vote
shall be furnished with a ballot paper on which such person shall record his or
her vote in such manner as shall be determined at the meeting having regard to
the nature of the question on which the vote is taken, and each ballot paper
shall be signed or initialled or otherwise marked so as to identify the voter
and the registered holder in the case of a proxy. At the conclusion of the poll,
the ballot papers shall be examined and counted by a committee of not less than
two Members or proxy holders appointed by the chairman for the purpose and the
result of the poll shall be declared by the chairman.
49. Seniority of joint holders voting
In the case of joint holders the vote of the senior who tenders a vote,
whether in person or by proxy, shall be accepted to the exclusion of the votes
of the other joint holders, and for this purpose seniority shall be determined
by the order in which the names stand in the Register of Members.
50. Instrument of proxy
The instrument appointing a proxy shall be in writing in the form, or as
near thereto as circumstances admit, of Form "A" in the Schedule hereto, under
the hand of the appointor or of the appointor's attorney duly authorised in
writing, or if the appointor is a corporation, either under its seal, or under
the hand of a duly authorised officer or attorney. The decision of the chairman
of any general meeting as to the validity of any instrument of proxy shall be
final.
51. Representation of corporations at meetings
A corporation which is a Member may, by written instrument, authorise such
person as it thinks fit to act as its representative at any meeting of the
Members and the person so authorised shall be entitled to exercise the same
powers on behalf of the corporation which such person represents as that
corporation could exercise if it were an individual Member. Notwithstanding the
foregoing, the chairman of the meeting may accept such assurances as he or she
thinks fit as to the right of any person to attend and vote at general meetings
on behalf of a corporation which is a Member.
SHARE CAPITAL AND SHARES
52. Rights of shares
(1) Subject to any resolution of the Members to the contrary and to the
terms and conditions of Series C Shares (as hereinafter defined) and without
prejudice to any special rights previously conferred on the holders of any
existing shares or class of shares, the share capital of the Company shall
consist of 48,000 shares which, prior to June 30, 2001, shall be comprised of
two (2) classes: (a) one class of 46,309.858 common shares with a par value of
US$1.00 per share (the "Common Shares") and (b) one class of 1,690.142 preferred
shares, Series C, par value US$1.00 per share (the "Series C Shares"). From and
after June 30, 2001, the share capital of the Company shall consist of a single
class of 46,309.858 Common Shares plus such number of Common Shares into which
any Series C Shares have been converted in accordance with these Bye-laws.
(2) The holders of Common Shares shall, subject to the provisions of these
Bye-laws:
(a) be entitled to one vote per share and, for so long as the Series
C Shares are outstanding, to vote with the Series C Shares as if
a single class in all matters including discontinuation of the
Company to another jurisdiction, except as otherwise provided in
these Bye-laws;
(b) be entitled to effect a Sale of Shares only in accordance with
the provisions of these Bye-laws and the Shareholders Agreement;
(c) be entitled to the rights set forth in Bye-law 61;
(d) be entitled to such dividends as the Board may from time to time
declare;
(e) in the event of a winding-up or dissolution of the Company,
whether voluntary or involuntary or for the purposes of
reorganization or otherwise or upon any distribution of capital,
be entitled to the surplus assets of the Company; and
(f) generally be entitled to enjoy all of the rights attaching to
shares.
(3) The holders of Series C Shares shall, subject to the provisions of
these Bye-laws, have the following rights:
(a) Voting Rights. Each Series C Share entitles the holder to one (1)
vote at all meetings of the Members of the Company (except
meetings at which only holders of another specified class of
shares are entitled to vote pursuant to these bye-laws).
(b) Subject to clauses (d), (f) and (g) below, the holders of the
Series C Shares are entitled to receive, as and when declared by
the Board, non-cumulative dividends at a fixed rate of 0.5
percent per month calculated on the Series C Amount of each such
share. These dividends are payable in money, property or by the
issue of fully paid shares of any class of the share capital of
the Company, at the option of the Company. The holders of the
Series C Shares are not entitled to any dividend in excess of
these dividends. These dividends are payable always in preference
and priority to any payment of dividends on the common shares or
any other shares ranking junior to the Series C Shares.
(c) Liquidation, Dissolution and Winding-up. This provision applies
in the event of the voluntary or involuntary liquidation,
dissolution or winding-up of the Company or other distribution of
assets of the Company among Members for the purpose of winding-up
its affairs. In this event, subject to clauses (d), (f) and (g)
below, the holders of the Series C Shares are entitled to receive
for each Series C Share an amount equal to the Series C Amount
plus all declared and unpaid dividends on each such Series C
Share. The holders are not entitled to share any further in the
distribution of the property or assets of the Company. This
distribution is payable in preference and priority to any
distribution of the property or assets of the Company to the
holders of the Common Shares or any other shares ranking junior
to the Series C Shares.
(d) Redemption. A holder of Series C Shares shall be entitled to
redeem all or any part of the Series C Shares registered in the
name of such holder on any date (a "Redemption Date") which is
June 30, 2001, or which is any prior date on which the holder
proposes to make a payment in whole or in part of the principal
amount of the Redeemable and Exchangeable Promissory Note, Series
B issued by BCI Investments on November 16, 2000, with a
principal amount of USD$275,000,000 (the "Special Note, Series
B"); PROVIDED THAT a holder shall have no such redemption rights
under this clause (d) and the Company shall not be required to
redeem any Series C Shares (i) if the principal amount of the
Special Note, Series B has been paid in full or (ii) to the
extent that the number of Series C Shares sought to be redeemed
on a particular Redemption Date multiplied by the Redemption
Price Per Share is greater than the outstanding principal amount
of the Special Note, Series B as of that Redemption Date. The
holder will exercise this right by delivering to the Company at
its registered office, on or before noon Bermuda time on a
Redemption Date, the share certificates representing the Series C
Shares to be redeemed along with a notice specifying the number
of Series C Shares that the registered holder desires to have
redeemed by the Company on that Redemption Date. Upon receipt of
such a notice, the Company shall redeem the Series C Shares
specified in such notice, with effect as of noon Bermuda time on
that Redemption Date, by at its option either (i) paying cash in
the amount of USD$162,708.222149 per share (the "Redemption Price
Per Share") or (ii) canceling an equal
amount of indebtedness of the holder under the Special Note,
Series C. Notwithstanding the above, the Company will only be
obliged to redeem Series C Shares so tendered for redemption on a
particular Redemption Date to the extent that this redemption
would not be contrary to any applicable law, and if the
redemption of any such Series C Shares would be contrary to any
applicable law, the Company will only be obliged to redeem such
Series C Shares to the extent that moneys applied to the
redemption will be an amount (rounded to the next lower multiple
of one hundred United States dollars (USD$100.00)) that it would
not be contrary to such law for the Company to pay. In this case
the Company will pay to each holder his pro rata share of the
allocable redemption proceeds. If less than all of the Series C
Shares represented by any certificate are redeemed on a
particular Redemption Date, a new certificate for the balance
will be issued to the holder by the Company.
(e) Series C Amount. For the purposes of the above paragraph (c), the
"Series C Amount" of each Series C Share will be an amount equal
to the aggregate of, if the Series C Share was issued for money
or a promissory note, the monetary consideration received by the
Company, including for these purposes the amount of any
promissory note received by the Company, upon the issuance of the
Series C Share (denominated in the currency in which the
consideration was received by the Company) or, if the Series C
Share was issued for a consideration other than money or a
promissory note, the fair market value of the consideration
received by the Company (including, without limitation, shares of
another class of the Company) upon the issuance of the Series C
Share, in each case less (iii) all amounts paid in respect of the
Series C Share on account of reductions of stated capital.
(f) Optional Conversion. Subject to clause (g) below, a holder of
Series C Shares will be entitled to convert into Common Shares at
any time all, or from time to time any part, of the Series C
Shares registered in the name of the holder, at a ratio of one
Common Share for each Series C Share so converted. The holder
will exercise this right by tendering to the Company at its
registered office the share certificate(s) representing the
Series C Share(s) that the registered holder desires to have so
converted together with a notice in writing, a copy of which
shall be sent to the other holders of Common Shares, specifying
(i) the number of Series C Shares that the registered holder
desires to have so converted and (ii) the Business Day (in this
paragraph referred to as the "Series C Conversion Date") on which
the holder desires to have such Series C Shares so converted.
Upon receipt by the Company of the share certificate(s)
representing such Series C Share(s) together with this notice,
each Series C Share specified in this notice will on the Series C
Conversion Date automatically be converted into, and shall
thereupon become, one validly issued and outstanding, fully-paid
Common Share. From and after this date the Series C Shares
tendered to the Company cease to be entitled to dividends and
their holders are not entitled to exercise any of the rights of
the holders of Series C Shares. If less than all of the Series C
Shares represented by any certificate are converted, a new
certificate for the balance will be issued.
(g) Mandatory Conversion. As of 5:00 p.m. in Bermuda on June 30,
2001, each issued and outstanding Series C Share shall
automatically be converted into, and shall thereupon become, one
validly issued and outstanding, fully-paid Common Share, and the
Company shall on that date issue to each registered holder of the
Series C Shares a certificate representing the Common Shares into
which the Series C Shares held by such registered holder are so
converted, and the holders of the Series C Shares shall
immediately tender the certificates representing all of the
outstanding Series C Shares to the Company From and after 5:00
p.m. in Bermuda on June 30, 2001 the Series C Shares shall cease
to be entitled to dividends or any other distribution and their
holders are not entitled to exercise any of the rights of the
holders of Series C Shares.
(h) Amendments. No change to any of the provisions of clauses (a) to
(g) or of this Bye-law 52(3) will have any force or effect until
it has been approved by either (i) a majority of not less than
two-thirds (2/3) of the votes cast by the holders of the Series C
Shares, voting separately as a class at a meeting of such holders
specially called for that purpose, or (ii) a resolution in
writing signed by all the holders of the Series C Shares. This
approval is in addition to any other approval required by the
Act.
(i) No rights after cancellation or conversion. In the event of any
redemption by the Company or at the option of the holder or any
redemption or purchase by the Company or conversion or any other
event which would result in the cancellation of the Series C
Shares, the holder of the Series C Shares shall cease to have any
rights or preferences in the Series C Shares.
53. Power to issue shares
(1) Subject to these Bye-laws, including without limitation Bye-law 11, and
to any resolution of the Members to the contrary, and without prejudice to any
special rights previously conferred on the holders of any existing shares or
class of shares, the Board shall have power to issue any unissued shares of the
Company on such terms and conditions as it may determine and any shares or class
of shares may be issued with such preferred, deferred or other special rights or
such restrictions, whether in regard to dividend, voting, return of capital or
otherwise as the Company may from time to time by resolution of the Members
prescribe.
(2) The Board shall, in connection with the issue of any share, have the
power to pay such commission and brokerage as may be permitted by law.
(3) The Company shall not give, whether directly or indirectly, whether by
means of loan, guarantee, provision of security or otherwise, any financial
assistance for the purpose of a purchase or subscription made or to be made by
any person of or for any shares in the Company, but nothing in this Bye-Law
shall prohibit transactions mentioned in Sections 39A, 39B and 39C of the Act.
(4) Subject to Bye-law 11, the Company may from time to time do any one or
more of the following things:
(a) make arrangements on the issue of shares for a difference between
the Members in the amounts and times of payments of calls on
their shares;
(b) accept from any Member the whole or a part of the amount
remaining unpaid on any shares held by him, although no part of
that amount has been called up;
(c) pay dividends in proportion to the amount paid up on each share
where a larger amount is paid up on some shares than on others;
and
(d) issue its shares in fractional denominations and deal with such
fractions to the same extent as its whole shares and shares in
fractional denominations shall have in proportion to the
respective fractions represented thereby all of the rights of
whole shares including (but without limiting the generality of
the foregoing) the right to vote, to receive dividends and
distributions and to participate in a winding up.
54. Variation of rights, alteration of share capital and purchase of shares of
the Company
(1) Subject to Bye-law 11 and, for the avoidance of doubt, Bye-law 54(2),
and subject to the provisions of Sections 42 and 43 of the Act, any preference
shares may be issued or converted into shares that, at a determinable date or at
the option of the Company, are liable to be redeemed on such terms and in such
manner as the Company before the issue or conversion may by resolution of the
Members determine.
(2) If at any time the share capital is divided into different classes of
shares, the rights attached to any class (unless otherwise provided by the terms
of issue of the shares of that class) may, whether or not the Company is being
wound-up, be varied with the consent in writing of the holders of three-fourths
of the issued shares of that class or with the sanction of a resolution passed
by a majority of the votes cast at a separate general meeting of the holders of
the shares of the class in accordance with Section 47(7) of the Act. The rights
conferred upon the holders of the shares of any class issued with preferred or
other rights shall not, unless otherwise expressly provided by the terms of
issue of the shares of that class, be deemed to be varied by the creation or
issue of further shares ranking pari passu therewith.
(3) Subject to Bye-law 11, the Company may from time to time by resolution
of the Members change the currency denomination of, increase, alter or reduce
its share capital in accordance with the provisions of Sections 45 and 46 of the
Act. Where, on any alteration of share capital, fractions of shares or some
other difficulty would arise, the Board may deal with or resolve the same in
such manner as it thinks fit including, without limiting the generality of the
foregoing, the issue to Members, as appropriate, of fractions of shares and/or
arranging for the sale or transfer of the fractions of shares of Members.
(4) The Company may from time to time purchase its own shares in accordance
with the provisions of Section 42A of the Act; PROVIDED, HOWEVER, that any such
purchase shall be pro rata based on the percentage of Outstanding Shares held by
each Member.
55. Registered holder of shares
(1) The Company shall be entitled to treat the registered holder of any
share as the absolute owner thereof and accordingly shall not be bound to
recognise any equitable or other claim to, or interest in, such share on the
part of any other person.
(2) Any dividend, interest or other moneys payable in cash in respect of
shares may be paid by cheque or draft sent through the post directed to the
Member at such Member's address in the Register of Members or, in the case of
joint holders, to such address of the holder first named in the Register of
Members, or to such person and to such address as the holder or joint holders
may in writing direct. If two or more persons are registered as joint holders of
any shares, any one can give an effectual receipt for any dividend paid in
respect of such shares, unless the Company is otherwise notified in writing by
any of such joint holders prior to the payment of such dividend.
56. Death of a joint holder
Where two or more persons are registered as joint holders of a share or
shares then in the event of the death of any joint holder or holders the
remaining joint holder or holders shall be absolutely entitled to the said share
or shares and the Company shall recognise no claim in respect of the estate of
any joint holder except in the case of the last survivor of such joint holders.
57. Share certificates
(1) Every Member shall be entitled to a certificate under the seal of the
Company (or a facsimile thereof) specifying the number and, where appropriate,
the class of shares held by such Member and whether the same are fully paid up
and, if not, how much has been paid thereon. The Board may by resolution
determine, either generally or in a particular case, that any or all signatures
on certificates may be printed thereon or affixed by mechanical means.
(2) The Company shall be under no obligation to complete and deliver a
share certificate unless specifically called upon to do so by the person to whom
such shares have been allotted.
(3) If any such certificate shall be proved to the satisfaction of the
Board to have been worn out, lost, mislaid or destroyed the Board may cause a
new certificate to be issued and request an indemnity for the lost certificate
if it sees fit.
58. Calls on shares
(1) Subject to clause (r) of Bye-law 11, the Board may from time to time
make such calls as it thinks fit upon the Members in respect of any monies
unpaid on the shares allotted to or held by such Members and, if a call is not
paid on or before the day appointed for payment thereof, the Member may at the
discretion of the Board be liable to pay the Company interest on the amount of
such call at such rate as the Board may determine, from the date when such call
was payable up to the actual date of payment. The joint holders of a share shall
be jointly and severally liable to pay all calls in respect thereof.
(2) Subject to clause (r) of Bye-law 11, the Board may, on the issue of
shares, differentiate between the holders as to the amount of calls to be paid
and the times of payment of such calls.
59. Forfeiture of shares
(1) Without limiting any rights of the Company under Bye-law 60, if any
Member fails to pay, on the day appointed for payment thereof, any call in
respect of any share allotted to or held by such Member, the Board may, at any
time thereafter during such time as the call remains unpaid, direct the
Secretary to forward to such Member a notice in the form, or as near thereto as
circumstances admit, of Form "B" in the Schedule hereto.
(2) If the requirements of such notice are not complied with, any such
share may at any time thereafter before the payment of such call and the
interest due in respect thereof be forfeited by a resolution of the Board to
that effect, and such share shall thereupon become the property of the Company
and may be disposed of as the Board shall determine.
(3) A Member whose share or shares have been forfeited as aforesaid shall,
notwithstanding such forfeiture, be liable to pay to the Company all calls owing
on such share or shares at the time of the forfeiture and all interest due
thereon.
60. Defaulting Shareholders
(1) If any Shareholder (a "Defaulting Party") fails to make payment with
respect to or perform any Outstanding Obligation or any share issuance approved
in accordance with these Bye-laws and in respect of which such Shareholder has
agreed to subscribe pursuant to Bye-law 61 within ten (10) Business Days of the
date due (the "Due Date"), interest shall accrue on any unpaid amount or, in the
case of AM Latin America's Outstanding Obligation to contribute the Techtel
Amount (as defined in the Joint Venture Agreement) to the Company pursuant to
Section 2.03(c) of the Joint Venture Agreement, on the value attributed to such
obligation (the "Default Amount") at a rate per annum of 200%, or, if lower, the
maximum rate permitted by applicable law (the "Default Rate") from the Due Date
until the date paid in full together with all interest accrued thereon (based on
the actual number of days elapsed over a 360-day year).
(2) Any Shareholder (an "Advancing Party") may upon written notice to the
other Shareholders and the Company, advance all or a portion of the Default
Amount in lieu of the Defaulting Party. If more than one Shareholder provides
such a notice, such Shareholders shall have the right to fund their pro rata
portion of the Default Amount, based on the percentage of Outstanding Shares
held by such Shareholders, or such other portion as may be agreed by such
Shareholders. In the event that any Shareholder advances all or a portion of the
Default Amount in lieu of a Defaulting Party, the obligation of the Defaulting
Party to make payment to the Company of the Default Amount, together with
accrued interest, shall be deemed assigned to the Advancing Party or Parties in
proportion to the percentage of the Default Amount advanced by such Advancing
Party.
(3) In the event that the Defaulting Party has not made payment in full of
the Default Amount, together with all accrued interest, or performed its
Outstanding Obligations and paid all accrued interest owed thereunder, to the
Company or the Advancing Parties, as appropriate, within one hundred eighty
(180) days after the Due Date, the Company shall issue new Shares to the
Advancing Parties and, in the case of a default by a Defaulting Shareholder
under its Promissory Note, or, if applicable, its Special Notes, purchase, for a
total amount of US$1.00, an equal number of Shares previously issued to the
Defaulting Party in amounts sufficient to dilute the Equity Interests of the
Defaulting Party in the Company, and reflecting (i) any advances made by
Advancing Parties, (ii) amounts paid by other Shareholders pursuant to the
Outstanding Obligations or share issuance, as the case may be, (iii) all
interest accrued on the Default Amount pursuant to clause (1) of this Bye-law
60, (iv) the fair market value of the Company at the Due Date, as determined in
accordance with clause (4) below, and (v) Equity Interests, if any, issued to
the other Shareholders at the time of such payment. The consideration for such
repurchase shall be the release of the Defaulting Shareholder from its
obligations under the Promissory Note to repay the Default Amount. All
Shareholders will be deemed to have consented to such issuance of Shares. For
the purpose of effecting a purchase of Shares in accordance with this subclause
(c), each Shareholder hereby irrevocably appoints the Company to be its
attorney, and in its name and on its behalf to do all acts and things, execute
any document or complete any transfer that the Company may require in order to
complete such purchase, and each Shareholder hereby agrees to ratify and confirm
any act of the Company in connection therewith. Notwithstanding any such
issuance of Shares, all interest accrued on the Default Amount pursuant to
clause (1) of this Bye-law 60 at the time of such issuance (the "Default
Interest Amount") shall be deemed due and owing by the Defaulting Shareholder to
the Company and interest shall accrue on the Default Interest Amount at the
Default Rate until the Default Interest Amount, together with all interest
accrued thereon, is paid in full.
(4) For purposes of the preceding clause (3), the fair market value of the
Company shall be determined in accordance with the following procedure. Within
ten (10) Business Days following the 180-day period referred to in clause (3)
above, the Defaulting Party shall select one of the investment banks listed in
Schedule 5.13 to the Shareholders Agreement, and the Company shall select one of
the investment banks listed in such Schedule 5.13. In the event that none of the
investment banks listed in Schedule 5.13 to the Shareholders Agreement accepts
an engagement from the Defaulting Party or the Company, as the case may be
(through no fault of the Defaulting Party or the Company, as the case may be)
and there are no other investment banks listed in such Schedule 5.13 from whom
such party may choose and which are prepared to accept selection or referral, as
the case may be, the Defaulting Party or the Company, as the case may be, shall
choose an investment banking firm of international standing in the United States
which does not, and whose directors, officers, employees or Affiliates do not,
have a direct or indirect material financial interest for its proprietary
account in the Defaulting Party or the Company, as the case may be, or any of
their respective Affiliates. Within thirty (30) days of its acceptance of such
selection, each selected investment bank shall determine independently the fair
market value of the Company and provide such valuation in writing to each of the
Shareholders and the Company. If the difference between such two valuations is
twenty percent (20%) or less, the fair market value of the Company shall be
deemed to be the average of such two valuations. If the difference between such
two valuations is greater than twenty percent (20%), and if the Defaulting Party
and the Company are otherwise unable to agree which valuation is correct, within
270 days after the Default Date the matter shall be referred by the Company to
the Company's accountants, which accountants shall select one of the two
valuations as being closest to the fair market value of the Company as of the
Default Date. Such accountants shall make such selection within thirty (30) days
after such referral. The decision of such accountants shall be final, conclusive
and binding on all parties, and shall not be subject to arbitration. All costs
incurred by the non-defaulting Shareholders and the Company in connection with
obtaining the valuations referred to above shall be borne by the Defaulting
Party.
61. Certain Issuances of New Securities
(1) If the Company proposes to issue New Securities, other than pursuant to
a bonus issue, an initial public offering or other pro rata distribution to
Shareholders, the Shareholders shall have the right to purchase, in accordance
with clause (2) below, New Securities which the Company proposes to issue pro
rata, based on each Shareholder's Equity Interests in the Company.
(2) In the event that the Company proposes to issue New Securities, subject
to clause (1) above, the Company shall give each Shareholder a written notice (a
"Notice of Issuance") of its intention, describing all material terms of the New
Securities and the price and all material terms upon which the Company proposes
to issue such New Securities. Each Shareholder shall have ten (10) Business Days
from the date of the Notice of Issuance to agree to purchase all or any portion
of its pro rata share of such New Securities; PROVIDED THAT if the Company is
proposing to issue New Securities for consideration other than all cash, the
Company shall accept from the Shareholders either non-cash consideration that is
reasonably comparable to the non-cash consideration specified in the Notice of
Issuance or cash in an amount equal to the fair market value of the non-cash
consideration which shall be specified in the applicable Notice of Issuance. Any
purchase by any Shareholder of New Securities shall be consummated on the date
on which all other New Securities described in the applicable Notice of Issuance
are issued.
REGISTER OF MEMBERS
62. Contents of Register of Members
The Board shall cause to be kept in one or more books a Register of Members
and shall enter therein the particulars required by the Act.
63. Inspection of Register of Members
The Register of Members shall be open to inspection at the registered
office of the Company on every business day, subject to such reasonable
restrictions as the Board may impose, so that not less than two hours in each
business day be allowed for inspection. The Register of Members may, after
notice has been given by advertisement in an appointed newspaper to that effect,
be closed for any time or times not exceeding in the whole thirty days in each
year.
64. Determination of record dates
Notwithstanding any other provision of these Bye-laws, the Board may fix
any date as the record date for:
(a) determining the Members entitled to receive any dividend; and
(b) determining the Members entitled to receive notice of and to vote
at any general meeting of the Company.
TRANSFER OF GOVERNANCE RIGHTS
65. Transfer of Certain Veto Rights
In connection with the transfer by an Initial Shareholder to any one Person
of twenty percent (20%) or more of the Outstanding Shares in one or more
transactions in accordance with these Bye-laws, such Initial Shareholder by
prior written notice to the Company and all Shareholders, and upon transfer of
such twenty percent (20%) interest, may transfer its existing right (if any) to
nominate three (3) directors or, as the case may be, two (2) directors, to the
Board as provided in clause (1) of Bye-law 12 to such Person (the "Veto
Transferee"); PROVIDED THAT the right of an Initial Shareholder to regain the
right to nominate three (3) directors or, as the case may be, two (2) directors,
to the Board following a forfeiture of such right pursuant to clause (1) of
Bye-law 12 shall not be transferable, and any purported transfer of such right
to any Person shall be null and void. In the event such Initial Shareholder
validly transfers its transferable rights under clause (1) of Bye-law 12, such
rights may be subsequently transferred by any Veto Transferee, subject to the
restrictions applicable to an Initial Shareholder under this Bye-law 65. On
transferring such right, the transferring Initial Shareholder shall no longer
have any rights it may have enjoyed under clause (2) of Bye-law 12 and, for the
avoidance of doubt, clause (1) of Bye-law 12. Veto Transferees shall enjoy the
rights, subject to the obligations of a Veto Shareholder under these Bye-laws
and shall otherwise be subject to the obligations of a Shareholder under Section
4.06 of the Shareholders Agreement; PROVIDED THAT the rights of the transferring
Initial Shareholder under Bye-law 12 may not be transferred to a Person listed
in Schedule 3.13 to the Shareholders Agreement (or to any Affiliate or successor
of any such Person) without the prior written consent of each Veto Shareholder.
For the avoidance of doubt, in no event shall there ever be more than two (2)
Veto Shareholders, except if SBCI Brazil Holding becomes a Veto Shareholder, in
which case there shall never be more than three (3) Veto Shareholders.
66. Transfer of Rights to Nominate Directors
In connection with the transfer (x) by BCI Investments or AM Latin America
at any time, or (y) by SBCI Brazil Holding after the earlier to occur of the One
Director Date or the Two Director Date, to any one Person of less than twenty
percent (20%) but more than ten percent (10%) of the Outstanding Shares in one
or more transactions in accordance with these Bye-laws, such Initial Shareholder
by prior written notice to the Company and all Shareholders, and upon transfer
of such interest, may transfer to such Person (the "Director Transferee") its
existing right (if any) to nominate one director to the Board set forth in
clause (2) of Bye-law 12; PROVIDED THAT the right of an Initial Shareholder to
regain the right to nominate one (1) director to the Board following a
forfeiture of such right pursuant to clause (2) of Bye-law 12 shall not be
transferable, and any purported transfer of such right to any Person shall be
null and void. On transferring such right, the transferring Initial Shareholder
(and any subsequent transferring Director Transferee) shall no longer have any
rights it may have enjoyed under clause (2) of Bye-law 12 and, for the avoidance
of doubt, clause (1) of Bye-law 12. In the event such Initial Shareholder
validly transfers its transferable rights under clause (2) of Bye-law 12, such
rights, in addition to all rights as a Shareholder, may be subsequently
transferred by any subsequent Director Transferee, subject to the restrictions
applicable to an Initial Shareholder under this Bye-law 66. The Director
Transferee shall enjoy the rights, subject to the obligations, of the
transferring Initial Shareholder under clause (2) of Bye-law 12 and Bye-laws 16,
17, 46 and 66, and shall otherwise be subject to the obligations of a
Shareholder under Section 4.06 of the Shareholders Agreement; PROVIDED THAT the
rights of the transferring Initial Shareholder under Bye-law 46 may not be
transferred to a Person listed in Schedule 3.13 to the Shareholders Agreement
(or to any Affiliate or successor of any such Person) without the prior written
consent of each Veto Shareholder.
TRANSFER OF SHARES
67. Instrument of transfer
(1) An instrument of transfer shall be in the form or as near thereto as
circumstances admit of Form "C" in the Schedule hereto or in such other common
form as the Board may accept. Such instrument of transfer shall be signed by or
on behalf of the transferor and transferee; PROVIDED THAT, in the case of a
fully paid share, the Board may accept the instrument signed by or on behalf of
the transferor alone. The transferor shall be deemed to remain the holder of
such share until the same has been transferred to the transferee in the Register
of Members.
(2) The Board may refuse to recognise any instrument of transfer unless it
is accompanied by the certificate in respect of the shares to which it relates
and by such other evidence as the Board may reasonably require to show the right
of the transferor to make the transfer.
68. Restriction on transfer
(1) The Board shall refuse to register a transfer unless all applicable
consents, authorisations and permissions of any governmental body or agency in
Bermuda have been obtained. The Board also shall refuse to register a transfer
not in compliance with the provisions of these Bye-laws or the Shareholders
Agreement.
(2) If the Board refuses to register a transfer of any share the Secretary
shall, within three months after the date on which the transfer was lodged with
the Company, send to the transferor and transferee notice of the refusal.
(3) The provisions of Article IV of the Shareholders Agreement are hereby
incorporated in their entirety into these Bye-laws.
69. Transfers by joint holders
The joint holders of any share or shares may transfer such share or shares
to one or more of such joint holders, and the surviving holder or holders of any
share or shares previously held by them jointly with a deceased Member may
transfer any such share to the executors or administrators of such deceased
Member.
TRANSMISSION OF SHARES
70. Representative of deceased Member
In the case of the death of a Member, the survivor or survivors where the
deceased Member was a joint holder, and the legal personal representatives of
the deceased Member where the deceased Member was a sole holder, shall be the
only persons recognised by the Company as having any title to the deceased
Member's interest in the shares. Nothing herein contained shall release the
estate of a deceased joint holder from any liability in respect of any share
which had been jointly held by such deceased Member with other persons. Subject
to the provisions of Section 52 of the Act, for the purpose of this Bye-law,
legal personal representative means the executor or administrator of a deceased
Member or such other person as the Board may in its absolute discretion decide
as being properly authorised to deal with the shares of a deceased Member.
71. Registration on death or bankruptcy
Any person becoming entitled to a share in consequence of the death or
bankruptcy of any Member may be registered as a Member upon such evidence as the
Board may deem sufficient or may elect to nominate some person to be registered
as a transferee of such share, and in such case the person becoming entitled
shall execute in favour of such nominee an instrument of transfer in the form,
or as near thereto as circumstances admit, of Form "D" in the Schedule hereto.
On the presentation thereof to the Board, accompanied by such evidence as the
Board may require to prove the title of the transferor, the transferee shall be
registered as a Member but the Board shall, in either case, have the same right
to decline or suspend registration as it would have had in the case of a
transfer of the share by that Member before such Member's death or bankruptcy,
as the case may be.
DIVIDENDS AND OTHER DISTRIBUTIONS
72. Declaration of dividends by the Board
The Board may, subject to these Bye-laws (including, without limitation,
Bye-law 11), and in accordance with Section 54 of the Act, declare a dividend to
be paid to the Members, in proportion to the number of shares held by them, and
such dividend may be paid in cash or wholly or partly in specie in which case
the Board may fix the value for distribution in specie of any assets.
73. Other distributions
Subject to these Bye-laws (including, without limitation, Bye-law 11), the
Board may declare and make such other distributions (in cash or in specie) to
the Members as may be lawfully made out of the assets of the Company.
74. Reserve fund
The Board may from time to time before declaring a dividend set aside, out
of the surplus or profits of the Company, such sum as it thinks proper as a
reserve fund to be used to meet contingencies or for equalising dividends or for
any other special purpose.
75. Deduction of Amounts due to the Company
The Board may deduct from the dividends or distributions payable to any
Member all monies due from such Member to the Company on account of calls or
otherwise.
CAPITALISATION
76. Issue of bonus shares
(1) The Board may resolve to capitalize any part of the amount for the time
being standing to the credit of any of the Company's share premium or other
reserve accounts or to the credit of the profit and loss account or otherwise
available for distribution by applying such sum in paying up unissued shares to
be allotted as fully paid bonus shares pro rata to the Members.
(2) The Company may capitalize any sum standing to the credit of a reserve
account or sums otherwise available for dividend or distribution by applying
such amounts in paying up in full partly paid shares of those Members who would
have been entitled to such sums if they were distributed by way of dividend or
distribution.
ACCOUNTS AND FINANCIAL STATEMENTS
77. Records of account
The Board shall cause to be kept proper records of account with respect to
all transactions of the Company and in particular with respect to:-
(a) all sums of money received and expended by the Company and the
matters in respect of which the receipt and expenditure relates;
(b) all sales and purchases of goods by the Company; and
(c) the assets and liabilities of the Company.
Such records of account shall be kept at the registered office of the
Company or, subject to Section 83 (2) of the Act, at such other place as the
Board thinks fit and shall be available for inspection by the Directors during
normal business hours.
78. Financial year end
The financial year end of the Company may be determined by resolution of
the Board and failing such resolution shall be 31st December in each year.
79. Financial statements
Subject to any rights to waive laying of accounts pursuant to Section 88 of
the Act, financial statements as required by the Act shall be laid before the
Members within sixty (60) days of the end of each fiscal year. In addition to
the foregoing, the Company shall prepare and deliver to each Member (i) monthly
Interim Financial Statements for each fiscal month within thirty (30) days of
the end of each fiscal month and (ii) quarterly Interim Financial Statements for
each fiscal quarter within forty-five (45) days of the end of each fiscal
quarter.
AUDIT
80. Appointment of Auditor
Subject to Section 88 of the Act, at the annual general meeting or at a
subsequent special general meeting in each year, an independent representative
of the Members shall be appointed by them as Auditor of the accounts of the
Company. Such Auditor may be a Member but no Director, Officer or employee of
the Company shall, during his or her continuance in office, be eligible to act
as an Auditor of the Company.
81. Remuneration of Auditor
The remuneration of the Auditor shall be fixed by the Company in general
meeting or in such manner as the Members may determine.
82. Vacation of office of Auditor
If the office of Auditor becomes vacant by the resignation or death of the
Auditor, or by the Auditor becoming incapable of acting by reason of illness or
other disability at a time when the Auditor's services are required, the Board
shall, as soon as practicable, convene a special general meeting to fill the
vacancy thereby created.
83. Access to books of the Company
The Auditor shall at all reasonable times have access to all books kept by
the Company and to all accounts and vouchers relating thereto, and the Auditor
may call on the Directors or Officers of the Company for any information in
their possession relating to the books or affairs of the Company.
84. Report of the Auditor
(1) Subject to any rights to waive laying of accounts or appointment of an
Auditor pursuant to Section 88 of the Act, the accounts of the Company shall be
audited at least once in every year.
(2) The financial statements provided for by these Bye-laws shall be
audited by the Auditor in accordance with generally accepted auditing standards.
The Auditor shall make a written report thereon in accordance with generally
accepted auditing standards and the report of the Auditor shall be submitted to
the Members in general meeting.
(3) The generally accepted auditing standards referred to in subparagraph
(2) of this Bye-law may be those of a country or jurisdiction other than
Bermuda. If so, the financial statements and the report of the Auditor must
disclose this fact and name such country or jurisdiction.
NOTICES AND RECORDS
85. Notices to Members of the Company
A notice may be given by the Company to any Member either by delivering it
to such Member in person or by sending it to such Member's address in the
Register of Members or to such other address given for the purpose. For the
purposes of this Bye-law, a notice may be sent by mail, courier service, cable,
telex, telecopier, facsimile or other mode of representing words in a legible
and non-transitory form.
86. Notices to joint Members
Any notice required to be given to a Member shall, with respect to any
shares held jointly by two or more persons, be given to each of such persons.
87. Service and delivery of notice
Any notice shall be deemed to have been served at the time when the same
would be delivered in the ordinary course of transmission and, in proving such
service, it shall be sufficient to prove that the notice was properly addressed
and prepaid, if posted, and the time when it was posted, delivered to the
courier or to the cable company or transmitted by telex, facsimile or other
method as the case may be.
88. Records and Correspondence
All original records of the Company shall be maintained by the Company at
the Company's offices in Bermuda, and the official address for correspondence to
the Company shall be the Company's address in Bermuda.
SEAL OF THE COMPANY
89. The seal
The seal of the Company shall be in such form as the Board may from time to
time determine. The Board may adopt one or more duplicate seals for use outside
Bermuda.
90. Manner in which seal is to be affixed
The seal of the Company shall not be affixed to any instrument except
attested by the signature of a Director and the Secretary or any two Directors,
or any person appointed by the Board for the purpose, PROVIDED THAT any
Director, Officer or Resident Representative, may affix the seal of the Company
attested by such Director, Officer or Resident Representative's signature to any
authenticated copies of these Bye-laws, the incorporating documents of the
Company, the minutes of any meetings or any other documents required to be
authenticated by such Director, Officer or Resident Representative.
WINDING-UP
91. Winding-up/distribution by liquidator
If the Company shall be wound up the liquidator may, with the sanction of a
resolution of the Members, divide amongst the Members in specie or in kind the
whole or any part of the assets of the Company (whether they shall consist of
property of the same kind or not) and may, for such purpose, set such value as
he or she deems fair upon any property to be divided as aforesaid and may
determine how such division shall be carried out as between the Members or
different classes of Members. The liquidator may, with the like sanction, vest
the whole or any part of such assets in trustees upon such trusts for the
benefit of the Members as the liquidator shall think fit, but so that no Member
shall be compelled to accept any shares or other securities or assets whereon
there is any liability.
ALTERATION OF BYE-LAWS
92. Alteration of Bye-laws
No Bye-law shall be rescinded, altered or amended and no new Bye-law shall
be made until the same has been approved by a Qualified Vote in accordance with
Bye-law 11.
******
***
*
<PAGE>
SCHEDULE - FORM A (Bye-law 50)
------------------------------
..............................................
P R O X Y
I/We
of
the holder(s) of share(s) in the above-named company hereby appoint
........................... or failing him/her
.................................. or failing him/her
............................. as my/our proxy to vote on my/our behalf at the
general meeting of the Company to be held on the day of , 2000, and at any
adjournment thereof.
Dated this day of , 2000
*GIVEN under the seal of the Company
*Signed by the above-named
..............................................................
..............................................................
Witness
*Delete as applicable.
<PAGE>
SCHEDULE - FORM B (Bye-law 59)
------------------------------
NOTICE OF LIABILITY TO FORFEITURE FOR NON PAYMENT OF CALL
---------------------------------------------------------
You have failed to pay the call of [amount of call] made on the ...... day
of ........, 2000 last, in respect of the [number] share(s) [numbers in
figures] standing in your name in the Register of Members of the Company,
on the ...... day of ........., 2000 last, the day appointed for payment of
such call. You are hereby notified that unless you pay such call together
with interest thereon at the rate of .......... per annum computed from the
said ....... day of ........., 2000 last, on or before the ....... day of
........., 2000 next at the place of business of the Company the share(s)
will be liable to be forfeited.
Dated this ....... day of .............., 2000
[Signature of Secretary]
By order of the Board
<PAGE>
SCHEDULE - FORM C (Bye-law 67)
------------------------------
TRANSFER OF A SHARE OR SHARES
FOR VALUE RECEIVED ......................................... [amount]
.............................................................[transferor]
hereby sell assign and transfer unto ........................[transferee]
of...........................................................[address]
.............................................................[number of shares]
shares of....................................................[name of Company]
...........................
(Transferor)
Dated .....................
In the presence of:
..............................................................
(Witness)
...........................
(Transferee)
In the presence of:
..............................................................
(Witness)
<PAGE>
SCHEDULE - FORM D (Bye-law 71)
------------------------------
TRANSFER BY A PERSON BECOMING ENTITLED ON DEATH/BANKRUPTCY
----------------------------------------------------------
OF A MEMBER
-----------
I/We having become entitled in consequence of the [death/bankruptcy]
of [name of the deceased Member] to [number] share(s) standing in the
register of members of [Company] in the name of the said [name of
deceased Member] instead of being registered myself/ourselves elect to
have [name of transferee] (the "Transferee") registered as a
transferee of such share(s) and I/we do hereby accordingly transfer
the said share(s) to the Transferee to hold the same unto the
Transferee his or her executors administrators and assigns subject to
the conditions on which the same were held at the time of the
execution thereof; and the Transferee does hereby agree to take the
said share(s) subject to the same conditions.
WITNESS our hands this ........ day of ..........., 2000
Signed by the above-named )
[person or persons entitled] )
in the presence of: )
Signed by the above-named )
[transferee] )
in the presence of: )
<PAGE>
AMENDED AND RESTATED BYE - LAWS
of
Ivey CLEC Ltd.
<PAGE>
TABLE OF CONTENTS
1. Interpretation.......................................................4
2. Board of Directors..................................................11
3. Management of the Company...........................................11
4. Power to authorise specific actions;
Power to delegate to a Committee....................................12
5. Power to appoint attorney...........................................12
6. Power to appoint and dismiss employees..............................12
7. Power to borrow and charge property.................................12
8. Exercise of power to purchase shares of or
discontinue the Company.............................................13
9. Board Decision on Qualified Matters.................................13
10. Election of Directors...............................................15
11. Defects in appointment of Directors.................................16
12. Alternate Directors.................................................16
13. Removal of Directors................................................17
14. Vacancies on the Board..............................................18
15. Notice of meetings of the Board.....................................18
16. Quorum at meetings of the Board.....................................19
17. Meetings of the Board...............................................19
18. Unanimous written resolutions.......................................19
19. Contracts and disclosure of Directors' interests....................20
20. Remuneration of Directors...........................................20
21. Officers of the Company.............................................21
22. Appointment of Officers.............................................21
23. Remuneration of Officers............................................21
24. Duties of Officers..................................................21
25. Chairman of meetings................................................22
26. Register of Directors and Officers..................................22
27. Obligations of Board to keep minutes................................22
28. Indemnification of Directors and Officers
of the Company......................................................23
29. Waiver of claim by Member...........................................23
30. Notice of annual general meeting....................................24
31. Notice of special general meeting...................................24
32. Accidental omission of notice of general meeting....................24
33. Meeting called on requisition of Members............................24
34. Short notice........................................................25
35. Postponement of meetings............................................25
36. Quorum for general meeting..........................................25
37. Adjournment of meetings.............................................26
38. Attendance at meetings..............................................26
39. Written resolutions.................................................26
40. Attendance of Directors.............................................27
41. Voting at meetings..................................................28
42. Voting on show of hands.............................................29
43. Decision of chairman................................................29
44. Demand for a poll...................................................29
45. Seniority of joint holders voting...................................31
46. Instrument of proxy.................................................31
47. Representation of corporations at meetings..........................31
48. Rights of shares....................................................32
49. Redemption of Preference Shares.....................................33
50. Power to issue shares...............................................34
51. Variation of rights, alteration of share capital
and purchase of shares of the Company...............................35
52. Registered holder of shares.........................................36
53. Death of a joint holder.............................................37
54. Share certificates..................................................37
55. Calls on shares.....................................................38
56. Forfeiture of shares................................................38
57. Contents of Register of Members.....................................39
58. Inspection of Register of Members...................................39
59. Determination of record dates.......................................39
60. Instrument of transfer..............................................40
61. Restriction on transfer.............................................40
62. Transfers by joint holders..........................................41
63. Representative of deceased Member...................................41
64. Registration on death or bankruptcy.................................42
65. Declaration of dividends by the Board...............................42
66. Other distributions.................................................42
67. Reserve fund........................................................43
68. Deduction of Amounts due to the Company.............................43
69. Issue of bonus shares...............................................43
70. Records of account..................................................44
71. Financial year end..................................................44
72. Financial statements................................................44
73. Appointment of Auditor..............................................45
74. Remuneration of Auditor.............................................45
75. Vacation of office of Auditor.......................................45
76. Access to books of the Company......................................45
77. Report of the Auditor...............................................46
78. Notices to Members of the Company...................................46
79. Notices to joint Members............................................46
80. Service and delivery of notice......................................47
81. The seal............................................................47
82. Manner in which seal is to be affixed...............................47
83. Winding-up/distribution by liquidator...............................47
84. Alteration of Bye-laws..............................................48
<PAGE>
INTERPRETATION
1. Interpretation
(1) In these Bye-laws the following words and expressions shall, where
not inconsistent with the context, have the following meanings respectively:
(a) "Act" means the Companies Act 1981 as amended from time to time;
(b) "Affiliate" means, with respect to any specified Person, any
other Person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by, or is under Common
Control with, such specified Person;
(c) "Alternate Director" means an alternate Director appointed in
accordance with these Bye-laws;
(d) "AM Latin America" means AM Latin America, LLC, a limited
liability company incorporated under the laws of the State of
Delaware; and
(e) "Auditor" includes any individual or partnership;
(f) "BCI Investments" means Bell Canada International Investments
Limited, a company incorporated under the laws of the British
Virgin Islands;
(g) "BCI" means Bell Canada International, Inc., a corporation
organised under the laws of Canada.
(h) "Board" means the Board of Directors appointed or elected
pursuant to these Bye-laws and acting by resolution in accordance
with the Act and these Bye-laws or the Directors present at a
meeting of Directors at which there is a quorum;
(i) "Capital Stock" means, with respect to any Person at any time,
any and all shares, interests, participations or other
equivalents (however designated, whether voting or non-voting) of
capital, capital stock, partnership interests (whether general or
limited), membership interests or equivalent ownership interests
in or issued by such Person;
(j) "Common Shares" shall have the meaning as set forth in Bye-law
48(1).
(k) "Company" means the company for which these Bye-laws are approved
and confirmed;
(l) "Control" (including the terms "Controlled by" and "under Common
Control with"), with respect to the relationship between or among
two or more Persons, means the possession, directly or
indirectly, or as trustee or executor, of the power to direct or
cause the direction of the affairs or management of a Person,
whether through the ownership of voting securities, as trustee or
executor, by contract or otherwise, including, without
limitation, the ownership, directly or indirectly, of securities
having the power to elect a majority of the board of directors or
similar body governing the affairs of such Person; PROVIDED THAT
a Person shall not be deemed to Control any Person that is a
publicly traded company if its ownership of voting securities
does not constitute a majority of the voting securities of such
Person;
(m) "Director" means a director of the Company and shall include an
Alternate Director;
(n) "Equity Interests" means, with respect to any Person, all of the
shares of Capital Stock of (or other ownership or profit
interests in) such Person, all of the warrants, options or other
rights for the purchase or acquisition from such Person of shares
of Capital Stock of (or other ownership or profit interests in)
such Person, all of the securities (including loans, notes,
debentures or other debt instruments) convertible into or
exchangeable for shares of Capital Stock of (or other ownership
or profit interests in) such Person or warrants, rights or
options for the purchase or acquisition from such Person of such
shares (or such other interests), and all of the other ownership
or profit interests in such Person (including, without
limitation, partnership, member or trust interests therein),
whether voting or non-voting;
(o) "Governmental Authority" means, in any applicable jurisdiction,
any federal, provincial, state or local government, any
governmental, regulatory or administrative authority, agency or
commission, or any court or tribunal, or judicial or arbitral
body;
(p) "Indebtedness" means, with respect to any Person, and in the case
of clauses i) through viii) below, whether secured or unsecured,
i) all indebtedness of such Person, whether or not contingent,
for borrowed money, ii) all obligations of such Person evidenced
by notes, bonds, debentures or other similar instruments, iii)
all indebtedness created or arising under any conditional sale or
other title retention agreement with respect to property acquired
by such Person (even though the rights and remedies of the
sellers or lenders under such agreement in the event of default
are limited to repossession or sale of such property), iv) all
obligations of such Person as lessee under leases that have been
or should be, in accordance with United States generally accepted
accounting principles, recorded as capital leases, v) all
obligations, contingent or otherwise, of such Person under
acceptance, letter of credit or similar facilities, vi) all
obligations of such Person to purchase, redeem, retire, defease
or otherwise acquire for value any Equity Interests of such
Person, valued, in the case of redeemable preferred stock, at the
greater of its voluntary or involuntary liquidation preference,
plus accrued and unpaid dividends, vii) all obligations of such
Person for the deferred purchase price of property or services
(other than current trade payables incurred in the ordinary
course of business), viii) all obligations of such Person in
respect of interest rate swaps, caps or collar agreements or
similar arrangements, and ix) all indebtedness of others referred
to in clauses i) through ii) above guaranteed directly or
indirectly in any manner by such Person or secured by any
security interest, pledge, mortgage, lien (including, without
limitation, environmental and tax liens), charge, encumbrance or
adverse claim, on property (including accounts and contract
rights) owned by such Person;
(q) "Intermediate Company" means any Person (other than a Regulated
Opco) that is a Subsidiary or Minority Investee of the Company;
(r) "Joint Venture Shareholder" means each of BCI Investments, AM
Latin America and SBCI Brazil Holding, and each other Person that
becomes a party to the Joint Venture Shareholders Agreement, as
such agreement may be amended from time to time in accordance
with the terms thereof;
(s) "Joint Venture Shareholders Agreement" shall mean the
Shareholders Agreement dated as of November 16, 2000 among BCI
Investments, AM Latin America, SBCI Brazil Holding and Telecom
Americas Ltd. as amended from time to time pursuant to the terms
thereof;
(t) "Joint Venture Sponsor Party" means, in the case of SBCI Brazil
Holding, SBC Communications, Inc.; in the case of AM Latin
America, America Movil, S.A. de C.V.; in the case of BCI
Investments, BCE Inc. and, with respect to any other Joint
Venture Shareholder, the ultimate parent company of such Joint
Venture Shareholder;
(u) "Member" means the Person or Persons registered in the Register
of Members as the holder of shares in the Company or all of such
Persons as the context so requires;
(v) "Minority Investee" means any Person (other than a Subsidiary of
the Company) in which the Company, directly or indirectly, holds
an Equity Interest;
(w) "Notice" means written notice as further defined in these
Bye-laws unless otherwise specifically stated;
(x) "Officer" means any person appointed by the Board to hold an
office in the Company;
(y) "Permitted Transferee" means, with respect to BCI Investments,
any Person (a "transferee") with respect to which BCE, Inc.
maintains a majority economic and voting interest; PROVIDED THAT
no such Person shall be deemed to be a Permitted Transferee if
any Person other than BCE, Inc. is permitted, by contract or
otherwise, to direct or influence the exercise of such transferee
of any rights under the Joint Venture Shareholders Agreement,
including, without limitation, rights pursuant to Section 3.08
thereunder; PROVIDED, FURTHER, THAT BCI Investments and BCE, Inc.
comply with their respective obligations set forth in Section
4.05 of the Joint Venture Shareholders Agreement.
(z) "Person" means any individual, partnership, firm, limited
liability company, corporation, association, trust,
unincorporated organization or other entity, as well as any
syndicate or group that would be deemed to be a person under
section 13(d)(3) of the U.S. Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the U.S.
Securities and Exchange Commission thereunder;
(aa) "Preference Shares" shall have the meaning as set forth in
Bye-law 48(1).
(bb) "Qualified Matter" shall have the meaning set forth in Bye-law 9;
(cc) "Redemption Condition" shall mean the occurrence of any of the
following: (i) receipt by Telecom Americas Ltd., the Company or
any of the Company's Minority Investees, Subsidiaries or
Affiliates of the approval by Agencia Nacional de
Telecomunicacoes of Brazil ("ANATEL") under Resolution 101 of
such agency or any successor regulation thereto which effectively
permits the Member or Members holding Common Shares to Control
the Company; (ii) a change in applicable Brazilian regulations or
laws that results in such approval no longer being required in
the opinion of the Board, (iii) the delivery to the Company of a
notice signed by, or on behalf of, the Member or Members holding
a majority of the Common Shares stating that, in its or their
reasonable judgment, the redemption of 100% of the Preference
Shares of the Company as contemplated herein without ANATEL's
approval will not result in a violation of Resolution 101 of such
agency or any successor regulation thereto; (iv) the Sale of the
Preference Shares by BCI Investments (or by any Permitted
Transferee of BCI Investments) to any party other than (a)
Telecom Americas Ltd. or its successors and assigns or (b) a
Permitted Transferee of BCI Investments holding Telecom Americas
Shares transferred to it pursuant to and in accordance with
Section 4.05 of the Joint Venture Shareholders Agreement, and (v)
BCE, Inc. shall fail to hold directly or indirectly legal and
beneficial ownership of a majority of the issued and outstanding
Capital Stock and Equity Interests, of BCI Investments or of any
Person holding Preference Shares.
(dd) "Register of Directors and Officers" means the Register of
Directors and Officers referred to in these Bye-laws;
(ee) "Register of Members" means the Register of Members referred to
in these Bye-laws;
(ff) "Regulated Opcos" means Americel S.A., a corporation (sociedade
por acoes) organized under the laws of Brazil, Canbras
Participacoes Ltda., a corporation (sociedad por quotas de
responsabilidade limitada) organized under the laws of Brazil,
Comunicacion Celular S.A., Comcel S.A., a corporation (sociedad
anonima) organized under the laws of Colombia, Telet S.A., a
corporation (sociedade por acoes) organized under the laws of
Brazil, TV Mogno Ltda., a corporation (sociedade por quotas de
responsabilidade limitada) organized under the laws of Brazil, TV
Eucalipto Ltda., a corporation (sociedade por quotas de
responsabilidade limitada) organized under the laws of Brazil,
TVA Jacaranda Ltda., a corporation (sociedade por quotas de
responsabilidade limitada) organized under the laws of Brazil,
Walberg Comunicacoes Ltda., a corporation (sociedade por quotas
de responsabilidade limitada) organized under the laws of Brazil;
provided, however, that each such Person shall cease to
be deemed a Regulated Opco upon expiration or termination
of applicable contractual or regulatory requirements restricting
the transfer of control of such Person and, in the case of
regulatory requirements, upon approval by the relevant
Governmental Authorities of the transfer of control of such
Person to the Company;
(gg) "Resident Representative" means any person appointed to act as
resident representative and includes any deputy or assistant
resident representative;
(hh) "Sale" means any sale, assignment, transfer, distribution or
other disposition of shares of the Company or of a participation,
including the grant of an irrevocable option or put in respect of
shares of the Company, or other rights therein, whether
voluntarily or by operation of law;
(ii) "SBCI Brazil Holding" means SBC International - Brazil Holding,
Ltd., a company incorporated under the laws of the Cayman
Islands;
(jj) "Secretary" means the person appointed to perform any or all the
duties of secretary of the Company and includes any deputy or
assistant secretary;
(kk) "Subsidiary" of any Person means any other Person of which (a)
the first mentioned Person or any Subsidiary thereof is the
general partner, (b) voting power to elect a majority of the
board of directors or others performing similar functions with
respect to such other Person is held by the first mentioned
Person and/or by any one or more of its Subsidiaries, or (c) more
than 50% of the voting Equity Interests of such other Person is,
directly or indirectly, owned or Controlled by such first
mentioned Person and/or by one or more of its Subsidiaries;
(ll) "Telecom Americas Shares" means (i) voting shares, par value
US$1.00 per share, and (ii) preferred shares, Series C, par value
US$1.00 per share, in each case of Telecom Americas Ltd., a
company incorporated under the laws of Bermuda.
(2) In these Bye-laws, where not inconsistent with the context:
(a) words denoting the plural number include the singular number
and vice versa;
(b) words denoting the masculine gender include the feminine
gender;
(c) words importing persons include companies, associations or
bodies of persons whether corporate or not;
(d) the word:
(i) "may" shall be construed as permissive;
(ii) "shall" shall be construed as imperative; and
(e) unless otherwise provided herein words or expressions
defined in the Act shall bear the same meaning in these
Bye-laws.
(3) Expressions referring to writing or written shall, unless the
contrary intention appears, include facsimile, printing, lithography,
photography and other modes of representing words in a visible form.
(4) Headings used in these Bye-laws are for convenience only and are
not to be used or relied upon in the construction hereof.
BOARD OF DIRECTORS
2. Board of Directors
The business of the Company shall be managed and conducted by the
Board.
3. Management of the Company
(1) Subject to Bye-law 9, in managing the business of the Company, the
Board may exercise all such powers of the Company as are not, by statute or by
these Bye-laws, required to be exercised by the Company in general meeting
subject, nevertheless, to these Bye-laws, the provisions of any statute and to
such directions as may be prescribed by the Company in general meeting.
(2) No regulation or alteration to these Bye-laws made by the Company
in general meeting shall invalidate any prior act of the Board which would have
been valid if that regulation or alteration had not been made.
(3) The Board may procure that the Company pays all expenses incurred
in promoting and incorporating the Company.
4. Power to authorise specific actions; Power to delegate to a Committee
(1) Subject to Bye-law 9, the Board may from time to time and at any
time authorise any company, firm, person or body of persons to act on behalf of
the Company for any specific purpose and in connection therewith to execute any
agreement, document or instrument on behalf of the Company.
(2) The Board shall not delegate any of its powers to a committee.
5. Power to appoint attorney
Subject to Bye-law 9, the Board may from time to time and at any time
by power of attorney appoint any company, firm, person or body of persons,
whether nominated directly or indirectly by the Board, to be an attorney of the
Company for such purposes and with such powers, authorities and discretions (not
exceeding those vested in or exercisable by the Board) and for such period and
subject to such conditions as it may think fit and any such power of attorney
may contain such provisions for the protection and convenience of persons
dealing with any such attorney as the Board may think fit and may also authorise
any such attorney to sub-delegate all or any of the powers, authorities and
discretions so vested in the attorney. Such attorney may, if so authorised under
the seal of the Company, execute any deed or instrument under such attorney's
personal seal with the same effect as the affixation of the seal of the Company.
6. Power to appoint and dismiss employees
The Board may appoint, suspend or remove any manager, secretary, clerk,
agent or employee of the Company and may fix their remuneration and determine
their duties.
7. Power to borrow and charge property
Subject to Bye-law 9, the Board may exercise all the powers of the
Company to borrow money and to mortgage or charge its undertaking, property and
uncalled capital, or any part thereof, and may issue debentures, debenture stock
and other securities whether outright or as security for any debt, liability or
obligation of the Company or any third party.
8. Exercise of power to purchase shares of or discontinue the Company
(1) Except for the redemption of the Preference Shares pursuant to
Bye-law 49 hereof, the Company shall not purchase all or any part of its own
shares for so long as the Preference Shares are entitled to vote, PROVIDED THAT
at such time as the Preference Shares cease to have any voting rights, the Board
may exercise all the powers of the Company to purchase all or any part of its
own shares pursuant to Section 42A of the Act.
(2) Subject to Bye-law 9 hereof, the Board may exercise all the powers
of the Company to discontinue the Company to a named country or jurisdiction
outside Bermuda pursuant to Section 132G of the Act.
9. Board Decision on Qualified Matters
Notwithstanding anything to the contrary in these Bye-laws and
notwithstanding that no vote may be required, or that a lesser percentage vote
may be required, by Law or otherwise, the Company shall not take any action with
respect to the following actions (each a "Qualified Matter"), without a vote of
the majority of Directors, which majority shall include the affirmative vote of
the Director elected by the Members holding Common Shares:
(a) a public offering of the Capital Stock of the Company or any
Intermediate Company;
(b) the issuance or sale of any Capital Stock of the Company;
(c) the issuance or sale of any notes, bonds, debt instruments or
other securities, or any option, warrant or other right to
acquire the same, of, or any other interest in, the Company or
any Intermediate Company, or any securities of any type
whatsoever that are, or may become, convertible into or
exchangeable or exercisable for Capital Stock of the Company or
any Intermediate Company;
(d) the amalgamation, consolidation, or merger of the Company or any
Intermediate Company into or with any other Person, the
consolidation with any Person by the Company or any Intermediate
Company, or the sale, reorganization or restructuring of the
Company or any Intermediate Company (or any similar transaction);
(e) the acquisition of assets or businesses of any Person by the
Company or any Intermediate Company the purchase price for which
exceeds US$100 million or which would be reasonably likely to
delay the occurrence of the Redemption Condition;
(f) the sale, assignment, transfer, lease, sublease, charge,
mortgage, pledge, grant of security interest in, sublicense or
other disposition of any material license of the Company or any
Intermediate Company;
(g) the sale, assignment, transfer, lease, sublease, mortgage,
pledge, grant of security interest in, license or other
disposition of any assets of the Company or any Intermediate
Company the value of which exceeds US$50 million;
(h) any incurrence, assumption or issuance by the Company or any
Intermediate Company of Indebtedness (A) if, after giving effect
to such incurrence, assumption or issuance (including the
application of the net proceeds therefrom), the Company's or any
Intermediate Company's ratio of Indebtedness to shareholders'
equity (based upon book value) would exceed, as of the date of
determination, 2.34:1, or (B) in excess of US$50 million, (ii)
the guaranteeing of any Indebtedness of any Subsidiary of the
Company in excess of US$50 million, or (iii) the guaranteeing of
any Indebtedness of any other Person;
(i) the entering by the Company or any Intermediate Company into of
any agreement, arrangement or transaction with any Affiliate of
the Company or any Joint Venture Shareholder or any Affiliate of
a Joint Venture Shareholder or Joint Venture Sponsor Party;
(j) any amendment to the Memorandum of Association of the Company or
these Bye-laws or to the Memorandum of Association and Bye-laws
(or similar instruments) of any Intermediate Company;
(k) the commencement, settlement, payment, discharge or satisfaction
of any litigation, claim, liability or obligation (absolute,
accrued, asserted or unasserted, contingent or otherwise) by the
Company or any Intermediate Company other than where such
litigation, claim, liability or obligation is only for money
damages that do not exceed US$50 million;
(l) the declaration or payment of dividends or distributions on or
with respect to any Capital Stock of the Company or any
Intermediate Company;
(m) approving any capital expenditure by the Company or any
Intermediate Company which exceeds, individually or in the
aggregate, US$25 million;
(n) approving any matter to be voted upon at any meeting of the
Members of the Company;
(o) instructing the Company with respect to the voting of the shares
of any Intermediate Company held directly or indirectly by the
Company with respect to any matter listed in clause (a) and
clauses (c) through (n) above and clause (p) below; and
(p) the taking of any action, directly or indirectly, in
contemplation of any of the foregoing; PROVIDED THAT, for the
avoidance of doubt, no such action shall impede the exercise by
any Person that controls any Regulated Opco to exercise its
voting rights with respect to such Regulated Opco.
10. Election of Directors
The Board shall consist of three Directors. The Members holding Common
Shares shall be entitled to elect one Director so that, at all times, at least
one member of the Board has been elected by the Members holding Common Shares.
The Directors shall be elected or appointed in the first place at the statutory
meeting of the Company and thereafter, except in the case of casual vacancy, at
the annual general meeting or at any special general meeting called for the
purpose and shall hold office for such term as the Members may determine or, in
the absence of such determination, until the next annual general meeting or
until their successors are elected or appointed, their resignation or removal in
accordance with these Bye-laws, or their office is otherwise vacated, except as
otherwise provided herein, and any general meeting may authorise the Board to
fill any vacancy in their number left unfilled at a general meeting, PROVIDED
THAT the Members holding Common Shares shall be entitled to elect a Director to
fill a vacancy left unfilled if such Members have not elected one of the
Directors then in office.
11. Defects in appointment of Directors
All acts done bona fide by any meeting of the Board or by any person
acting as a Director shall, notwithstanding that it be afterwards discovered
that there was some defect in the appointment of any Director or person acting
as aforesaid, or that they or any of them were disqualified, be as valid as if
every such person had been duly appointed and was qualified to be a Director.
12. Alternate Directors
(1) Any Director may appoint a person or persons to act as a Director
in the alternative to himself or herself by notice in writing deposited with the
Secretary. An Alternate Director appointed by a Director elected by the Members
holding Common Shares shall be considered a Director elected by the Members
holding Common Shares for purposes of these Bye-laws. Any person so appointed
shall have all the rights and powers of the Director or Directors for whom such
person is appointed in the alternative provided that such person shall not be
counted more than once in determining whether or not a quorum is present.
(2) An Alternate Director shall be entitled to receive notice of all
meetings of the Board and to attend and vote at any such meeting at which a
Director for whom such Alternate Director was appointed in the alternative is
not personally present and generally to perform at such meeting all the
functions of such Director for whom such Alternate Director was appointed.
(3) An Alternate Director shall cease to be such if the Director for
whom such Alternate Director was appointed ceases for any reason to be a
Director but may be re-appointed by the Board as alternate to the person
appointed to fill the vacancy in accordance with these Bye-laws.
13. Removal of Directors
(1) Prior to the occurrence of the Redemption Condition and subject to
any provision to the contrary in these Bye-laws, Members may at any special
general meeting convened and held in accordance with these Bye-laws, remove a
Director by a majority vote, or in the case of a Director elected by the Members
holding Common Shares, by a majority vote of the Common Shares, PROVIDED THAT
the notice of any such meeting convened for the purpose of removing a Director
shall contain a statement of the intention so to do and be served on such
Director not less than 14 days before the meeting and at such meeting such
Director shall be entitled to be heard on the motion for such Director's
removal.
(2) Notwithstanding the foregoing, at any time after the occurrence of
the Redemption Condition, the Members holding Common Shares may, at any special
general meeting convened and held in accordance with these Bye-laws, remove any
Director by a majority vote of the Common Shares, PROVIDED THAT the notice of
any such meeting convened for the purpose of removing a Director shall contain a
statement of the intention so to do and be served on such Director not less than
14 days before the meeting and at such meeting such Director shall be entitled
to be heard on the motion for such Director's removal.
(3) A vacancy on the Board created by the removal of a Director under
the provisions of clause (1) or clause (2) of this Bye-law may be filled by the
Members at the meeting at which such Director is removed and, in the absence of
such election or appointment, the Board may fill the vacancy, PROVIDED THAT the
Members holding Common Shares shall be entitled to elect any such Director if
such Members have not elected one of the Directors then in office.
14. Vacancies on the Board
(1) The Board shall have the power from time to time and at any time to
appoint any person as a Director to fill a vacancy on the Board occurring as the
result of the death, disability, disqualification or resignation of any Director
and to appoint an Alternate Director to any Director so appointed, PROVIDED THAT
the Members holding Common Shares shall be entitled to elect a Director to fill
such a vacancy if such Members have not elected one of the Directors then in
office.
(2) The Board may act notwithstanding any vacancy in its number but, if
and so long as its number is reduced below the number fixed by these Bye-laws as
the quorum necessary for the transaction of business at meetings of the Board,
the continuing Directors or Director may act for the purpose of (i) summoning a
general meeting of the Company or (ii) preserving the assets of the Company.
(3) The office of Director shall be vacated if the Director:-
(a) is removed from office pursuant to these Bye-laws or is
prohibited from being a Director by law;
(b) is or becomes bankrupt or makes any arrangement or composition
with his creditors generally;
(c) is or becomes of unsound mind or dies; or
(d) resigns his or her office by notice in writing to the Company.
15. Notice of meetings of the Board
(1) A Director may, and the Secretary on the requisition of a Director
shall, at any time summon a meeting of the Board.
(2) Notice of a meeting of the Board shall be deemed to be duly given
to a Director if it is given to such Director verbally in person or by telephone
or otherwise communicated or sent to such Director by post, cable, telex,
telecopier, facsimile or other mode of representing words in a legible and
non-transitory form at such Director's last known address or any other address
given by such Director to the Company for this purpose.
16. Quorum at meetings of the Board
The quorum necessary for the transaction of business at a meeting of
the Board shall be two Directors, at least one of which shall be a director
elected by the Members holding Common Shares.
17. Meetings of the Board
(1) The Board may meet for the transaction of business, adjourn and
otherwise regulate its meetings as it sees fit.
(2) Directors may participate in any meeting of the Board by means of
such telephone, electronic or other communication facilities as permit all
persons participating in the meeting to communicate with each other
simultaneously and instantaneously, and participation in such a meeting shall
constitute presence in person at such meeting.
(3) Except as otherwise provided in these Bye-laws, a resolution put to
the vote at a meeting of the Board shall be carried by the affirmative votes of
a majority of the votes cast and in the case of an equality of votes the
resolution shall fail.
18. Unanimous written resolutions
A resolution in writing signed by all the Directors which may be in
counterparts, shall be as valid as if it had been passed at a meeting of the
Board duly called and constituted, such resolution to be effective on the date
on which the last Director signs the resolution. For the purposes of this
Bye-law only, "Director" shall not include an Alternate Director.
19. Contracts and disclosure of Directors' interests
(1) Any Director, or any Director's firm, partner or any company with
whom any Director is associated, may act in a professional capacity for the
Company and such Director or such Director's firm, partner or such company shall
be entitled to remuneration for professional services as if such Director were
not a Director, PROVIDED THAT nothing herein contained shall authorise a
Director or Director's firm, partner or such company to act as Auditor of the
Company.
(2) A Director who is directly or indirectly interested in a contract
or proposed contract or arrangement with the Company shall declare the nature of
such interest as required by the Act.
(3) Following a declaration being made pursuant to this Bye-law, and
unless disqualified by the chairman of the relevant Board meeting, a Director
may vote in respect of any contract or proposed contract or arrangement in which
such Director is interested and may be counted in the quorum at such meeting.
20. Remuneration of Directors
The remuneration (if any) of the Directors shall be determined by the
Company in general meeting and shall be deemed to accrue from day to day. The
Directors may also be paid all travel, hotel and other expenses properly
incurred by them in attending and returning from meetings of the Board, any
committee appointed by the Board, general meetings of the Company, or in
connection with the business of the Company or their duties as Directors
generally.
OFFICERS
21. Officers of the Company
The Officers of the Company shall consist of a President, a Vice
President, a Secretary and such additional Officers as the Board may from time
to time determine, all of whom shall be deemed to be Officers for the purposes
of these Bye-laws.
22. Appointment of Officers
(1) The Board shall, as soon as possible after the statutory meeting of
Members and after each annual general meeting, appoint a President and a Vice
President who shall be Directors.
(2) The Secretary and additional Officers, if any, shall be appointed
by the Board from time to time.
23. Remuneration of Officers
The Officers shall receive such remuneration as the Board may from time
to time determine.
24. Duties of Officers
The Officers shall have such powers and perform such duties in the
management, business and affairs of the Company as may be delegated to them by
the Board from time to time.
25. Chairman of meetings
Unless otherwise agreed by a majority of those attending and entitled
to attend and vote thereat, the President shall act as chairman at all meetings
of the Members and of the Board at which such person is present. In his or her
absence the Vice President, if present, shall act as chairman and in the absence
of both of them a chairman shall be appointed or elected by those present at the
meeting and entitled to vote. For the sake of clarity, nothing in this Bye-law
shall be interpreted to authorize anyone other than a Director or Member to vote
at a meeting of the Board or Members, as applicable.
26. Register of Directors and Officers
The Board shall cause to be kept in one or more books at the registered
office of the Company a Register of Directors and Officers and shall enter
therein the particulars required by the Act.
MINUTES
27. Obligations of Board to keep minutes
(1) The Board shall cause minutes to be duly entered in books provided
for the purpose:
(a) of all elections and appointments of Officers;
(b) of the names of the Directors present at each meeting of the
Board and of any committee appointed by the Board; and
(c) of all resolutions and proceedings of general meetings of the
Members, meetings of the Board, meetings of senior managers and
meetings of committees appointed by the Board.
(2) Minutes prepared in accordance with the Act and these Bye-laws
shall be kept by the Secretary at the registered office of the Company.
INDEMNITY
28. Indemnification of Directors and Officers of the Company
The Directors, Secretary and other Officers for the time being acting
in relation to any of the affairs of the Company and the liquidator or trustees
(if any) for the time being acting in relation to any of the affairs of the
Company and every one of them, and their heirs, executors and administrators,
shall be indemnified and secured harmless out of the assets of the Company from
and against all actions, costs, charges, losses, damages and expenses which they
or any of them, their heirs, executors or administrators, shall or may incur or
sustain by or by reason of any act done, concurred in or omitted in or about the
execution of their duty, or supposed duty, or in their respective offices or
trusts, and none of them shall be answerable for the acts, receipts, neglects or
defaults of the others of them or for joining in any receipts for the sake of
conformity, or for any bankers or other persons with whom any moneys or effects
belonging to the Company shall or may be lodged or deposited for safe custody,
or for insufficiency or deficiency of any security upon which any moneys of or
belonging to the Company shall be placed out on or invested, or for any other
loss, misfortune or damage which may happen in the execution of their respective
offices or trusts, or in relation thereto, PROVIDED THAT this indemnity shall
not extend to any matter in respect of any fraud or dishonesty which may attach
to any of said persons.
29. Waiver of claim by Member
Each Member agrees to waive any claim or right of action such Member
might have, whether individually or by or in the right of the Company, against
any Director or Officer on account of any action taken by such Director or
Officer, or the failure of such Director or Officer to take any action in the
performance of his duties with or for the Company, PROVIDED THAT such waiver
shall not extend to any matter in respect of any fraud or dishonesty which may
attach to such Director or Officer.
MEETINGS
30. Notice of annual general meeting
The annual general meeting of the Company shall be held in each year
other than the year of incorporation at such time and place as the President or
any two Directors or any Director and the Secretary or the Board shall appoint.
At least five days notice of such meeting shall be given to each Member stating
the date, place and time at which the meeting is to be held, that the election
of Directors will take place thereat, and as far as practicable, the other
business to be conducted at the meeting.
31. Notice of special general meeting
The President or any two Directors or any Director and the Secretary or
the Board may convene a special general meeting of the Company whenever in their
judgment such a meeting is necessary, upon not less than five days' notice which
shall state the date, time, place and the general nature of the business to be
considered at the meeting.
32. Accidental omission of notice of general meeting
The accidental omission to give notice of a general meeting to, or the
non-receipt of notice of a general meeting by, any person entitled to receive
notice shall not invalidate the proceedings at that meeting, provided that the
quorum requirements of these Bye-laws are met.
33. Meeting called on requisition of Members
Notwithstanding anything herein, the Board shall, on the requisition of
Members holding at the date of the deposit of the requisition not less than
one-tenth of such of the paid-up share capital of the Company as at the date of
the deposit carries the right to vote at general meetings of the Company,
forthwith proceed to convene a special general meeting of the Company and the
provisions of Section 74 of the Act shall apply.
34. Short notice
A general meeting of the Company shall, notwithstanding that it is
called by shorter notice than that specified in these Bye-laws, be deemed to
have been properly called if it is so agreed by (i) all the Members entitled to
attend and vote thereat in the case of an annual general meeting; and (ii) by a
majority in number of the Members having the right to attend and vote at the
meeting, being a majority together holding not less than 95% in nominal value of
the shares giving a right to attend and vote thereat in the case of a special
general meeting.
35. Postponement of meetings
The Secretary may postpone any general meeting called in accordance
with the provisions of these Bye-laws (other than a meeting requisitioned under
these Bye-laws) PROVIDED THAT notice of postponement is given to each Member
before the time for such meeting. Fresh notice of the date, time and place for
the postponed meeting shall be given to each Member in accordance with the
provisions of these Bye-laws.
36. Quorum for general meeting
At any general meeting of the Company, two persons present in Person
and representing in Person or by proxy in excess of both 50% of the outstanding
Common Shares and, prior to the occurrence of the Redemption Condition, 50% of
the outstanding Preference Shares, if any, in the Company throughout the meeting
shall form a quorum for the transaction of business, PROVIDED THAT if the
Company shall at any time have only one Member, one Member present in Person or
by proxy shall form a quorum for the transaction of business at any general
meeting of the Company held during such time. If within half an hour from the
time appointed for the meeting a quorum is not present, the meeting shall stand
adjourned to the same day one week later, at the same time and place or to such
other day, time or place as the Secretary may determine.
37. Adjournment of meetings
The chairman of a general meeting may, with the consent of a majority
of the Members at any general meeting at which a quorum is present (and shall if
so directed by a majority of the Members at such meeting), adjourn the meeting.
Unless the meeting is adjourned to a specific date and time, fresh notice of the
date, time and place for the resumption of the adjourned meeting shall be given
to each Member in accordance with the provisions of these Bye-laws.
38. Attendance at meetings
Members may participate in any general meeting by means of such
telephone, electronic or other communication facilities as permit all persons
participating in the meeting to communicate with each other simultaneously and
instantaneously, and participation in such a meeting shall constitute presence
in person at such meeting.
39. Written resolutions
(1) Subject to subparagraph (6), anything which may be done by
resolution of the Company in general meeting or by resolution of a meeting of
any class of the Members of the Company, may, without a meeting and without any
previous notice being required, be done by resolution in writing signed by, or,
in the case of a Member that is a corporation whether or not a company within
the meaning of the Act, on behalf of, all the Members who at the date of the
resolution would be entitled to attend the meeting and vote on the resolution.
(2) A resolution in writing may be signed by, or, in the case of a
Member that is a corporation whether or not a company within the meaning of the
Act, on behalf of, all the Members, or any class thereof, in as many
counterparts as may be necessary.
(3) For the purposes of this Bye-law, the date of the resolution is the
date when the resolution is signed by, or, in the case of a Member that is a
corporation whether or not a company within the meaning of the Act, on behalf
of, the last Member to sign and any reference in any Bye-law to the date of
passing of a resolution is, in relation to a resolution made in accordance with
this Bye-law, a reference to such date.
(4) A resolution in writing made in accordance with this Bye-law is as
valid as if it had been passed by the Company in general meeting or by a meeting
of the relevant class of Members, as the case may be, and any reference in any
Bye-law to a meeting at which a resolution is passed or to Members voting in
favour of a resolution shall be construed accordingly.
(5) A resolution in writing made in accordance with this Bye-law shall
constitute minutes for the purposes of Sections 81 and 82 of the Act.
(6) This Bye-law shall not apply to:
(a) a resolution passed pursuant to Section 89(5) of the Act; or
(b) a resolution passed for the purpose of removing a Director before
the expiration of his term of office under these Bye-laws.
40. Attendance of Directors
The Directors of the Company shall be entitled to receive notice of and
to attend and be heard at any general meeting.
41. Voting at meetings
(1) Subject to the provisions of the Act and these Bye-laws, any
question proposed for the consideration of the Members at any general meeting
shall be decided by the affirmative vote of a majority of the votes cast in
accordance with the provisions of these Bye-laws and in the case of an equality
of votes the resolution shall fail, PROVIDED THAT, without the affirmative vote
of the Common Shares, the Members shall not take any action with respect to a
Qualified Matter.
(2) Notwithstanding any other provision of these Bye-laws and
notwithstanding that no vote may be required, or that a lesser percentage vote
may be required, by Law or otherwise, the Company shall take no action with
respect to any of the following without the affirmative vote of a majority of
the Common Shares:
(a) material change in the nature or scope of the business or
corporate strategy of the Company or any Intermediate
Company or the entering into a joint venture or similar
strategic alliance by any thereof with any Person; and
(b) the winding up or dissolution of the Company or any
Intermediate Company; the adoption of a plan of liquidation
of the Company or any Intermediate Company; any action by
the Company or any Intermediate Company to commence any
suit, case, proceeding or other action (i) under any
existing or future law of any jurisdiction relating to
bankruptcy, insolvency, reorganization or relief of debtors
seeking to have an order for relief entered with respect to
the Company or any Intermediate Company, or seeking to
adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with
respect to the Company or any Intermediate Company or (ii)
seeking appointment of a receiver, trustee, custodian or
other similar official for the Company or any Intermediate
Company, or for all or any part of its assets, or making a
general assignment for the benefit of the creditors of the
Company or any Intermediate Company.
(3) No Member shall be entitled to vote at any general meeting unless
such Member has paid all the calls on all shares held by such Member. No Member
holding Preference Shares shall be entitled to vote at any general meeting after
the occurrence of the Redemption Condition, as set forth in Bye-law 48.
42. Voting on show of hands
At any general meeting a resolution put to the vote of the meeting
shall, in the first instance, be voted upon by a show of hands and, subject to
any rights or restrictions for the time being lawfully attached to any class of
shares and subject to the provisions of these Bye-laws, every Member present in
Person and every person holding a valid proxy at such meeting shall be entitled
to one vote and shall cast such vote by raising his or her hand.
43. Decision of chairman
At any general meeting a declaration by the chairman of the meeting
that a question proposed for consideration has, on a show of hands, been
carried, or carried unanimously, or by a particular majority, or lost, and an
entry to that effect in a book containing the minutes of the proceedings of the
Company shall, subject to the provisions of these Bye-laws, be conclusive
evidence of that fact.
44. Demand for a poll
(1) Notwithstanding the provisions of the immediately preceding two
Bye-laws, at any general meeting of the Company, in respect of any question
proposed for the consideration of the Members (whether before or on the
declaration of the result of a show of hands as provided for in these Bye-laws),
a poll may be demanded by any of the following persons:-
(a) the chairman of such meeting; or
(b) at least three Members present in Person or represented by
proxy; or
(c) any Member or Members present in Person or represented by
proxy and holding between them not less than one-tenth of
the total voting rights of all the Members having the right
to vote at such meeting; or
(d) any Member or Members present in Person or represented by
proxy holding shares in the Company conferring the right to
vote at such meeting, being shares on which an aggregate sum
has been paid up equal to not less than one-tenth of the
total sum paid up on all such shares conferring such right.
(2) Where, in accordance with the provisions of subparagraph (1) of
this Bye-law, a poll is demanded, subject to any rights or restrictions for the
time being lawfully attached to any class of shares, every person present at
such meeting shall have one vote for each share entitled to vote of which such
person is the holder, or for which such person holds a proxy, and such vote
shall be counted in the manner set out in sub-paragraph (4) of this Bye-law or
in the case of a general meeting at which one or more Members are present by
telephone in such manner as the chairman of the meeting may direct and the
result of such poll shall be deemed to be the resolution of the meeting at which
the poll was demanded and shall replace any previous resolution upon the same
matter which has been the subject of a show of hands.
(3) A poll demanded in accordance with the provisions of subparagraph
(1) of this Bye-law, for the purpose of electing a chairman of the meeting or on
a question of adjournment, shall be taken forthwith and a poll demanded on any
other question shall be taken in such manner and at such time and place as the
President (or acting chairman) may direct and any business other than that upon
which a poll has been demanded may be proceeded with pending the taking of the
poll.
(4) Where a vote is taken by poll, each person present and entitled to
vote shall be furnished with a ballot paper on which such person shall record
his or her vote in such manner as shall be determined at the meeting having
regard to the nature of the question on which the vote is taken, and each ballot
paper shall be signed or initialled or otherwise marked so as to identify the
voter and the registered holder in the case of a proxy. At the conclusion of the
poll, the ballot papers shall be examined and counted by a committee of not less
than two Members or proxy holders appointed by the chairman for the purpose and
the result of the poll shall be declared by the chairman.
45. Seniority of joint holders voting
In the case of joint holders the vote of the senior who tenders a vote,
whether in person or by proxy, shall be accepted to the exclusion of the votes
of the other joint holders, and for this purpose seniority shall be determined
by the order in which the names stand in the Register of Members.
46. Instrument of proxy
The instrument appointing a proxy shall be in writing in the form, or
as near thereto as circumstances admit, of Form "A" in the Schedule hereto,
under the hand of the appointor or of the appointor's attorney duly authorised
in writing, or if the appointor is a corporation, either under its seal, or
under the hand of a duly authorised officer or attorney. The decision of the
chairman of any general meeting as to the validity of any instrument of proxy
shall be final.
47. Representation of corporations at meetings
A corporation which is a Member may, by written instrument, authorise
such person as it thinks fit to act as its representative at any meeting of the
Members and the person so authorised shall be entitled to exercise the same
powers on behalf of the corporation which such person represents as that
corporation could exercise if it were an individual Member. Notwithstanding the
foregoing, the chairman of the meeting may accept such assurances as he or she
thinks fit as to the right of any person to attend and vote at general meetings
on behalf of a corporation which is a Member.
SHARE CAPITAL AND SHARES
48. Rights of shares
(1) The share capital of the Company shall be divided into two classes:
(a) 12,000 common shares with a par value of US$1.00 per share (the "Common
Shares") and, (b) 12,001 preference shares with a par value of US$.02499791684
per share (the "Preference Shares").
(2) The holders of the Common Shares shall, subject to the provisions
of these Bye-laws:
(a) be entitled to one vote per share and, for so long as the
Preference Shares are entitled to vote, to vote with the
Preference Shares as if they were a single class, in all matters,
including discontinuation, except as otherwise provided in these
Bye-laws;
(b) be entitled to such dividends as the Board may from time to time
declare;
(c) in the event of a winding-up or dissolution of the Company,
whether voluntary or involuntary or for the purpose of a
reorganisation or otherwise or upon any distribution of capital,
be entitled to the surplus assets of the Company; and
(d) generally be entitled to enjoy all of the rights attaching to
shares of the Company.
(3) The holders of the Preference Shares shall, subject to the
provisions of these Bye-laws:
(a) prior to the occurrence of the Redemption Condition, be entitled to
one vote per share and to vote with the Common Shares as if they were a single
class in all matters, including discontinuation, except as otherwise provided in
these Bye-laws, PROVIDED THAT upon the occurrence of the Redemption Condition,
the Preference Shares shall immediately cease to have any voting rights
regardless of whether the Company has given notice of any meeting of Members;
(b) not be entitled to dividends or other distributions or otherwise
participate in the profits of the Company;
(c) in the event of a winding-up or dissolution of the Company, whether
voluntary or involuntary or for the purpose of a reorganisation or otherwise or
upon any distribution of capital, be entitled solely to the par value per share
of the Preference Shares in priority to any payment to the holders of the Common
Shares;
(d) the Preference Shares shall only be held by BCI Investments and
shall not be transferred to any Person other than (i) Telecom Americas Ltd., or
its successors and assigns, or (ii) to a Permitted Transferee of BCI Investments
holding Telecom Americas Shares transferred to it pursuant to and in accordance
with Section 4.05 of the Joint Venture Shareholders Agreement (PROVIDED THAT
such Permitted Transferee shall be permitted to hold Preference Shares only for
so long as it continues to hold Telecom Americas Shares and remains a Permitted
Transferee of BCI Investments).
49. Redemption of Preference Shares
(1) Upon the occurrence of the Redemption Condition, the Company shall
redeem all, but not less than all, of the Preference Shares outstanding at the
time of such redemption. On any such redemption, the Company shall pay a price
in cash equal to U.S.$0.01 per share to the Members holding the Preference
Shares. Not more than five days after the occurrence of the Redemption
Condition, the Company shall deliver a written notice to all Members holding
Preference Shares indicating: (i) that it intends to redeem the shares pursuant
to this Bye-law 49, (ii) that payment will be made upon surrender of the
certificates representing the Preference Shares, and (iii) specifying the
consideration to be paid to each holder and the place, manner and date of such
payment and the surrender of the certificates evidencing the Preference Shares,
which shall be within ten days of the date of such notice.
(2) The Members holding the Preference Shares shall surrender the share
certificates representing the Preference Shares to the Company and shall receive
the redemption price in accordance with the written notice delivered by the
Company. Any Preference Shares not surrendered in a timely manner shall be
automatically redeemed by the Company, and the Company shall segregate and hold
in trust the consideration to which such holders are entitled for a period of
six years.
(3) The failure of the Company to redeem the shares upon the occurrence
of the Redemption Condition shall not constitute a waiver of the Company's right
and obligation to redeem the Preference Shares.
50. Power to issue shares
(1) Prior to the redemption of all of the outstanding Preference Shares
pursuant to Bye-law 49, the Board shall not issue any shares, including any
additional Preference Shares or any other class of shares, other than to Telecom
Americas Ltd. and shall not alter the rights of any shares, without an amendment
to these Bye-laws. After all such Preference Shares have been redeemed or
cancelled, and subject to these Bye-laws and to any resolution of the Members to
the contrary and without prejudice to any special rights previously conferred on
the holders of any existing shares or class of shares, the Board shall have
power to issue any unissued shares of the Company on such terms and conditions
as it may determine and any shares or class of shares may be issued with such
preferred, deferred or other special rights or such restrictions, whether in
regard to dividend, voting, return of capital or otherwise as the Company may
from time to time by resolution of the Members prescribe.
(2) The Board shall, in connection with the issue of any share, have
the power to pay such commission and brokerage as may be permitted by law.
(3) The Company shall not give, whether directly or indirectly, whether
by means of loan, guarantee, provision of security or otherwise, any financial
assistance for the purpose of a purchase or subscription made or to be made by
any person of or for any shares in the Company, but nothing in this Bye-law
shall prohibit transactions mentioned in Sections 39A, 39B and 39C of the Act.
(4) The Company may from time to time issue its shares in fractional
denominations and deal with such fractions to the same extent as its whole
shares and shares in fractional denominations shall have in proportion to the
respective fractions represented thereby all of the rights of whole shares
including (but without limiting the generality of the foregoing) the right to
vote, to receive dividends and distributions and to participate in a winding up.
51. Variation of rights, alteration of share capital and purchase of shares of
the Company
(1) Subject to Bye-laws 9 and 50 and, for the avoidance of doubt,
Bye-law 51(2), and subject to the provisions of Sections 42 and 43 of the Act,
any preference shares may be issued or converted into shares that, at a
determinable date or at the option of the Company, are liable to be redeemed on
such terms and in such manner as the Company before the issue or conversion may
by resolution of the Members determine.
(2) If at any time there are different classes of shares outstanding,
the rights attached to any class (unless otherwise provided by the terms of
issue of the shares of that class) may, in addition to any vote of the Members
or the Board otherwise required for the taking of such action, whether or not
the Company is being wound-up, be varied with the consent in writing of the
holders of three-fourths of the issued shares of that class or with the sanction
of a resolution passed by a majority of the votes cast at a separate general
meeting of the holders of the shares of the class in accordance with Section 47
(7) of the Act. The rights conferred upon the holders of the shares of any class
issued with preferred or other rights shall not, unless otherwise expressly
provided by the terms of issue of the shares of that class, be deemed to be
varied by the creation or issue of further shares ranking pari passu therewith.
(3) The Company may from time to time by resolution of the Members
change the currency denomination of, increase, alter or reduce its share capital
in accordance with the provisions of Sections 45 and 46 of the Act and subject
to Bye-laws 9 and 50 hereof. Where, on any alteration of share capital,
fractions of shares or some other difficulty would arise, the Board may deal
with or resolve the same in such manner as it thinks fit including, without
limiting the generality of the foregoing, the issue to Members, as appropriate,
of fractions of shares and/or arranging for the sale or transfer of the
fractions of shares of Members.
(4) Except for the redemption of the Preference Shares pursuant to
Bye-law 49 hereof, the Company may not purchase all or any part of its own
shares for so long as the Preference Shares possess voting rights, PROVIDED THAT
at such time as the Preference Shares cease to have any voting rights, the
Company may from time to time purchase its own shares in accordance with the
provisions of Section 42A of the Act.
52. Registered holder of shares
(1) The Company shall be entitled to treat the registered holder of any
share as the absolute owner thereof and accordingly shall not be bound to
recognise any equitable or other claim to, or interest in, such share on the
part of any other person.
(2) Any dividend, interest or other moneys payable in cash in respect
of shares may be paid by cheque or draft sent through the post directed to the
Member at such Member's address in the Register of Members or, in the case of
joint holders, to such person and to such address as the holder or joint holders
may in writing direct. If two or more persons are registered as joint holders of
any shares any one can give an effectual receipt for any dividend paid in
respect of such shares.
53. Death of a joint holder
Where two or more persons are registered as joint holders of a share or
shares then in the event of the death of any joint holder or holders the
remaining joint holder or holders shall be absolutely entitled to the said share
or shares and the Company shall recognise no claim in respect of the estate of
any joint holder except in the case of the last survivor of such joint holders.
54. Share certificates
(1) Every Member shall be entitled to a certificate under the seal of
the Company (or a facsimile thereof) specifying the number and, where
appropriate, the class of shares held by such Member and whether the same are
fully paid up and, if not, how much has been paid thereon. The certificates for
the Common Shares and Preference Shares shall be in the form of Forms "E" and
"F" in the Schedule hereto. The Board may by resolution determine, either
generally or in a particular case, that any or all signatures on certificates
may be printed thereon or affixed by mechanical means.
(2) The Company shall be under no obligation to complete and deliver a
share certificate unless specifically called upon to do so by the person to whom
such shares have been allotted.
(3) If any such certificate shall be proved to the satisfaction of the
Board to have been worn out, lost, mislaid or destroyed the Board may cause a
new certificate to be issued and request an indemnity for the lost certificate
if it sees fit.
(4) The following legend shall be affixed to the share certificates for
the Preference Shares:
THE PREFERENCE SHARES EVIDENCED BY THIS SHARE CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER SET FORTH IN THE BYE-LAWS OF THE COMPANY. NO
REGISTRATION OF TRANSFER OF THESE SHARES WILL BE MADE ON THE BOOKS OF THE
COMPANY OTHER THAN TO (a) Telecom Americas Ltd. and its successors and assigns
or (B) TO A PERMITTED TRANSFEREE OF BCI INVESTMENTS PURSUANT TO AND IN
ACCORDANCE WITH THE BYE-LAWS OF THE COMPANY. THE PREFERENCE SHARES REPRESENTED
BY THIS SHARE CERTIFICATE ARE SUBJECT TO REDEMPTION OR CANCELLATION FOR A PRICE
OF U.S.$0.01 pER SHARE BY THE COMPANY ON THE OCCURRENCE OF CERTAIN CONDITIONS
AND ON THE TERMS SET FORTH IN THE BYE-LAWS of the company.
55. Calls on shares
Subject to Bye-law 9 hereof, the Board may from time to time make such
calls as it thinks fit upon the Members in respect of any monies unpaid on the
shares allotted to or held by such Members and, if a call is not paid on or
before the day appointed for payment thereof, the Member may at the discretion
of the Board be liable to pay the Company interest on the amount of such call at
such rate as the Board may determine, from the date when such call was payable
up to the actual date of payment. The joint holders of a share shall be jointly
and severally liable to pay all calls in respect thereof.
56. Forfeiture of shares
(1) If any Member fails to pay, on the day appointed for payment
thereof, any call in respect of any share allotted to or held by such Member,
the Board may, at any time thereafter during such time as the call remains
unpaid, direct the Secretary to forward to such Member a notice in the form, or
as near thereto as circumstances admit, of Form "B" in the Schedule hereto.
(2) If the requirements of such notice are not complied with, any such
share may at any time thereafter before the payment of such call and the
interest due in respect thereof be forfeited by a resolution of the Board to
that effect, and such share shall thereupon become the property of the Company
and may be disposed of as the Board shall determine.
(3) A Member whose share or shares have been forfeited as aforesaid
shall, notwithstanding such forfeiture, be liable to pay to the Company all
calls owing on such share or shares at the time of the forfeiture and all
interest due thereon.
REGISTER OF MEMBERS
57. Contents of Register of Members
The Board shall cause to be kept in one or more books a Register of
Members and shall enter therein the particulars required by the Act.
58. Inspection of Register of Members
The Register of Members shall be open to inspection at the registered
office of the Company on every business day, subject to such reasonable
restrictions as the Board may impose, so that not less than two hours in each
business day be allowed for inspection. The Register of Members may, after
notice has been given by advertisement in an appointed newspaper to that effect,
be closed for any time or times not exceeding in the whole thirty days in each
year.
59. Determination of record dates
Notwithstanding any other provision of these Bye-laws, the Board may
fix any date as the record date for:
(a) determining the Members entitled to receive any dividend; and
(b) determining the Members entitled to receive notice of and to vote
at any general meeting of the Company.
TRANSFER OF SHARES
60. Instrument of transfer
(1) An instrument of transfer shall be in the form or as near thereto
as circumstances admit of Form "C" in the Schedule hereto or in such other
common form as the Board may accept. Such instrument of transfer shall be signed
by or on behalf of the transferor and transferee provided that, in the case of a
fully paid share, the Board may accept the instrument signed by or on behalf of
the transferor alone. The transferor shall be deemed to remain the holder of
such share until the same has been transferred to the transferee in the Register
of Members.
(2) The Board may refuse to recognise any instrument of transfer unless
it is accompanied by the certificate in respect of the shares to which it
relates and by such other evidence as the Board may reasonably require to show
the right of the transferor to make the transfer.
61. Restriction on transfer
(1) The Preference Shares shall be issued solely to and held initially
by BCI Investments and shall not be transferred to any other Person except to
either (a) Telecom Americas Ltd. and its successors and assigns or (b) to a
Permitted Transferee of BCI Investments holding Telecom Americas Shares
transferred to it pursuant to and in accordance with Section 4.05 of the Joint
Venture Shareholders Agreement (PROVIDED THAT such Permitted Transferee shall be
permitted to hold Preference Shares only for so long as it continues to hold
Telecom Americas Shares and remains a Permitted Transferee of BCI Investments).
There shall be no restriction on the Sale of the Common Shares.
(2) Except for transfers of Preference Shares permitted under Bye-law
61(1), the Board shall refuse to register the transfer of the Preference Shares.
The Board shall refuse to register a transfer unless all applicable consents,
authorisations and permissions of any governmental body or agency in Bermuda
have been obtained.
(3) If the Board refuses to register a transfer of any share in
accordance with this Bye-law 61, the Secretary shall, within fifteen days after
the date on which the transfer was lodged with the Company, send to the
transferor and transferee notice of the refusal.
62. Transfers by joint holders
The joint holders of any share or shares may transfer such share or
shares to one or more of such joint holders, and the surviving holder or holders
of any share or shares previously held by them jointly with a deceased Member
may transfer any such share to the executors or administrators of such deceased
Member.
TRANSMISSION OF SHARES
63. Representative of deceased Member
In the case of the death of a Member, the survivor or survivors where
the deceased Member was a joint holder, and the legal personal representatives
of the deceased Member where the deceased Member was a sole holder, shall be the
only persons recognised by the Company as having any title to the deceased
Member's interest in the shares. Nothing herein contained shall release the
estate of a deceased joint holder from any liability in respect of any share
which had been jointly held by such deceased Member with other persons. Subject
to the provisions of Section 52 of the Act, for the purpose of this Bye-law,
"legal personal representative" means the executor or administrator of a
deceased Member or such other person as the Board may in its absolute discretion
decide as being properly authorised to deal with the shares of a deceased
Member.
64. Registration on death or bankruptcy
Any person becoming entitled to a share in consequence of the death or
bankruptcy of any Member may be registered as a Member upon such evidence as the
Board may deem sufficient or may elect to nominate some person to be registered
as a transferee of such share, and in such case the person becoming entitled
shall execute in favour of such nominee an instrument of transfer in the form,
or as near thereto as circumstances admit, of Form "D" in the Schedule hereto.
On the presentation thereof to the Board, accompanied by such evidence as the
Board may require to prove the title of the transferor, the transferee shall be
registered as a Member but the Board shall, in either case, have the same right
to decline or suspend registration as it would have had in the case of a
transfer of the share by that Member before such Member's death or bankruptcy,
as the case may be.
DIVIDENDS AND OTHER DISTRIBUTIONS
65. Declaration of dividends by the Board
The Board may, subject to these Bye-laws (including, without
limitation, Bye-law 9) and in accordance with Section 54 of the Act, declare a
dividend to be paid to the Members holding shares entitled to receive such
dividends, in proportion to the number of shares held by them, and such dividend
may be paid in cash or wholly or partly in specie in which case the Board may
fix the value for distribution in specie of any assets.
66. Other distributions
Subject to these Bye-laws (including, without limitation, Bye-law 9),
the Board may declare and make such other distributions (in cash or in specie)
to the Members holding shares entitled to receive such dividends as may be
lawfully made out of the assets of the Company.
67. Reserve fund
Subject to these Bye-laws (including, without limitation, Bye-law 9),
the Board may from time to time before declaring a dividend set aside, out of
the surplus or profits of the Company, such sum as it thinks proper as a reserve
fund to be used to meet contingencies or for equalising dividends or for any
other special purpose.
68. Deduction of Amounts due to the Company
The Board may deduct from the dividends or distributions payable to any
Member all monies due from such Member to the Company on account of calls or
otherwise.
CAPITALISATION
69. Issue of bonus shares
(1) The Board may resolve to capitalise any part of the amount for the
time being standing to the credit of any of the Company's share premium or other
reserve accounts or to the credit of the profit and loss account or otherwise
available for distribution by applying such sum in paying up unissued shares to
be allotted as fully paid bonus shares pro rata to the Members holding Common
Shares.
(2) The Company may capitalise any sum standing to the credit of a
reserve account or sums otherwise available for dividend or distribution by
applying such amounts in paying up in full partly paid shares of those Members
who would have been entitled to such sums if they were distributed by way of
dividend or distribution.
ACCOUNTS AND FINANCIAL STATEMENTS
70. Records of account
The Board shall cause to be kept proper records of account in
accordance with United States generally accepted accounting principles with
respect to all transactions of the Company and in particular with respect to:
(a) all sums of money received and expended by the Company and the
matters in respect of which the receipt and expenditure relates;
(b) all sales and purchases of goods by the Company; and
(c) the assets and liabilities of the Company.
Such records of account shall be kept at the registered office of the Company
or, subject to Section 83 (2) of the Act, at such other place as the Board
thinks fit and shall be available for inspection by the Directors during normal
business hours.
71. Financial year end
The financial year end of the Company may be determined by resolution
of the Board and failing such resolution shall be the 31st December in each
year.
72. Financial statements
Subject to any rights to waive laying of accounts pursuant to Section
88 of the Act, financial statements as required by the Act shall be laid before
the Members in general meeting.
AUDIT
73. Appointment of Auditor
Subject to Section 88 of the Act, at the annual general meeting or at a
subsequent special general meeting in each year, an independent representative
of the Members shall be appointed by them as Auditor of the accounts of the
Company. Such Auditor may be a Member but no Director, Officer or employee of
the Company shall, during his or her continuance in office, be eligible to act
as an Auditor of the Company.
74. Remuneration of Auditor
The remuneration of the Auditor shall be fixed by the Company in
general meeting or in such manner as the Members may determine.
75. Vacation of office of Auditor
If the office of Auditor becomes vacant by the resignation or death of
the Auditor, or by the Auditor becoming incapable of acting by reason of illness
or other disability at a time when the Auditor's services are required, the
Board shall, as soon as practicable, convene a special general meeting to fill
the vacancy thereby created.
76. Access to books of the Company
The Auditor shall at all reasonable times have access to all books kept
by the Company and to all accounts and vouchers relating thereto, and the
Auditor may call on the Directors or Officers of the Company for any information
in their possession relating to the books or affairs of the Company.
77. Report of the Auditor
(1) Subject to any rights to waive laying of accounts or appointment of
an Auditor pursuant to Section 88 of the Act, the accounts of the Company shall
be audited at least once in every year.
(2) The financial statements provided for by these Bye-laws shall be
audited by the Auditor in accordance with United States generally accepted
auditing standards. The Auditor shall make a written report thereon in
accordance with generally accepted auditing standards and the report of the
Auditor shall be submitted to the Members in general meeting.
(3) The generally accepted auditing standards referred to in
subparagraph (2) of this Bye-law may be those of a country or jurisdiction other
than Bermuda. If so, the financial statements and the report of the Auditor must
disclose this fact and name such country or jurisdiction.
NOTICES
78. Notices to Members of the Company
A notice may be given by the Company to any Member either by delivering
it to such Member in person or by sending it to such Member's address in the
Register of Members or to such other address given for the purpose. For the
purposes of this Bye-law, a notice may be sent by mail, courier service, cable,
telex, telecopier, facsimile or other mode of representing words in a legible
and non-transitory form.
79. Notices to joint Members
Any notice required to be given to a Member shall, with respect to any
shares held jointly by two or more Persons, be given to each of such Persons.
80. Service and delivery of notice
Any notice shall be deemed to have been served at the time when the
same would be delivered in the ordinary course of transmission and, in proving
such service, it shall be sufficient to prove that the notice was properly
addressed and prepaid, if posted, and the time when it was posted, delivered to
the courier or to the cable company or transmitted by telex, facsimile or other
method as the case may be.
SEAL OF THE COMPANY
81. The seal
The seal of the Company shall be in such form as the Board may from
time to time determine. The Board may adopt one or more duplicate seals for use
outside Bermuda.
82. Manner in which seal is to be affixed
The seal of the Company shall not be affixed to any instrument except
attested by the signature of a Director and the Secretary or any two Directors,
or any person appointed by the Board for the purpose, provided that any Director
or Officer, may affix the seal of the Company attested by such Director or
Officer's signature to any authenticated copies of these Bye-laws, the
incorporating documents of the Company, the minutes of any meetings or any other
documents required to be authenticated by such Director, Officer or Resident
Representative.
WINDING-UP
83. Winding-up/distribution by liquidator
If the Company shall be wound up the liquidator may, with the sanction
of a resolution of the Members, divide amongst the Members holding Common Shares
in specie or in kind the whole or any part of the assets of the Company (whether
they shall consist of property of the same kind or not) and may, for such
purpose, set such value as he or she deems fair upon any property to be divided
as aforesaid and may determine how such division shall be carried out as between
the Members holding Common Shares. The liquidator may, with the like sanction,
vest the whole or any part of such assets in trustees upon such trusts for the
benefit of the Members holding Common Shares as the liquidator shall think fit,
but so that no Member shall be compelled to accept any shares or other
securities or assets whereon there is any liability.
ALTERATION OF BYE-LAWS
84. Alteration of Bye-laws
No Bye-law shall be rescinded, altered or amended and no new Bye-law
shall be made until the same has been approved by a resolution of the Board in
accordance with Bye-law 9 hereof and by a resolution of the majority of the
Members holding Common Shares voting as a class, and for so long as the
Preference Shares are entitled to voting rights, a resolution of a majority of
the Members holding Preference Shares voting as a class.
<PAGE>
******
***
*
<PAGE>
SCHEDULE - FORM A
(Bye-law 46)
-----------------
............................................
P R O X Y
I/We
of
the holder(s) of share(s) in the above-named company hereby appoint
....................... or failing him/her ....................... or failing
him/her ....................... as my/our proxy to vote on my/our behalf at the
general meeting of the Company to be held on the day of , 2000, and at any
adjournment thereof.
Dated this day of , 2000
*GIVEN under the seal of the Company
*Signed by the above-named
......................................
......................................
Witness
*Delete as applicable.
<PAGE>
SCHEDULE - FORM B (Bye-law 56)
------------------------------
NOTICE OF LIABILITY TO FORFEITURE FOR NON PAYMENT OF CALL
You have failed to pay the call of [amount of call] made on the ...... day of
........, 2000 last, in respect of the [number] share(s) [numbers in figures]
standing in your name in the Register of Members of the Company, on the ......
day of ........., 2000 last, the day appointed for payment of such call. You are
hereby notified that unless you pay such call together with interest thereon at
the rate of .......... per annum computed from the said ....... day of
........., 2000 last, on or before the ....... day of ........., 2000 next at
the place of business of the Company the share(s) will be liable to be
forfeited.
Dated this ....... day of .............., 2000
[Signature of Secretary]
By order of the Board
<PAGE>
SCHEDULE - FORM C (Bye-law 60)
------------------------------
TRANSFER OF A SHARE OR SHARES
FOR VALUE RECEIVED ...........................................[amount]
..............................................................[transferor]
hereby sell assign and transfer unto .........................[transferee]
of............................................................[address]
..............................................................[number of shares]
shares of....................................................[name of Company]
Dated .......................
.............................
(Transferor)
In the presence of:
..................................
(Witness)
.............................
(Transferee)
In the presence of:
.................................
(Witness)
<PAGE>
SCHEDULE - FORM D (Bye-law 64)
------------------------------
TRANSFER BY A PERSON BECOMING ENTITLED ON DEATH/BANKRUPTCY
OF A MEMBER
I/We having become entitled in consequence of the [death/bankruptcy] of
[name of the deceased Member] to [number] share(s) standing in the register
of members of [Company] in the name of the said [name of deceased Member]
instead of being registered myself/ourselves elect to have [name of
transferee] (the "Transferee") registered as a transferee of such share(s)
and I/we do hereby accordingly transfer the said share(s) to the Transferee
to hold the same unto the Transferee his or her executors administrators
and assigns subject to the conditions on which the same were held at the
time of the execution thereof; and the Transferee does hereby agree to take
the said share(s) subject to the same conditions.
WITNESS our hands this ........ day of ..........., 2000
Signed by the above-named )
[person or persons entitled] )
in the presence of: )
Signed by the above-named )
[transferee] )
in the presence of: )
<PAGE>
AMENDED AND RESTATED BYE - LAWS
of
Ivey Wireless Ltd.
<PAGE>
TABLE OF CONTENTS
1. Interpretation.......................................................4
2. Board of Directors..................................................11
3. Management of the Company...........................................11
4. Power to authorise specific actions;
Power to delegate to a Committee....................................12
5. Power to appoint attorney...........................................12
6. Power to appoint and dismiss employees..............................12
7. Power to borrow and charge property.................................12
8. Exercise of power to purchase shares of
or discontinue the Company..........................................13
9. Board Decision on Qualified Matters.................................13
10. Election of Directors...............................................15
11. Defects in appointment of Directors.................................16
12. Alternate Directors.................................................16
13. Removal of Directors................................................17
14. Vacancies on the Board..............................................18
15. Notice of meetings of the Board.....................................18
16. Quorum at meetings of the Board.....................................19
17. Meetings of the Board...............................................19
18. Unanimous written resolutions.......................................19
19. Contracts and disclosure of Directors' interests....................20
20. Remuneration of Directors...........................................20
21. Officers of the Company.............................................21
22. Appointment of Officers.............................................21
23. Remuneration of Officers............................................21
24. Duties of Officers..................................................21
25. Chairman of meetings................................................22
26. Register of Directors and Officers..................................22
27. Obligations of Board to keep minutes................................22
28. Indemnification of Directors and Officers of
the Company.........................................................23
29. Waiver of claim by Member...........................................23
30. Notice of annual general meeting....................................24
31. Notice of special general meeting...................................24
32. Accidental omission of notice of general meeting....................24
33. Meeting called on requisition of Members............................24
34. Short notice........................................................25
35. Postponement of meetings............................................25
36. Quorum for general meeting..........................................25
37. Adjournment of meetings.............................................26
38. Attendance at meetings..............................................26
39. Written resolutions.................................................26
40. Attendance of Directors.............................................27
41. Voting at meetings..................................................28
42. Voting on show of hands.............................................29
43. Decision of chairman................................................29
44. Demand for a poll...................................................29
45. Seniority of joint holders voting...................................31
46. Instrument of proxy.................................................31
47. Representation of corporations at meetings..........................31
48. Rights of shares....................................................32
49. Redemption of Preference Shares.....................................33
50. Power to issue shares...............................................34
51. Variation of rights, alteration of share capital
and purchase of shares of the Company...............................35
52. Registered holder of shares.........................................36
53. Death of a joint holder.............................................37
54. Share certificates..................................................37
55. Calls on shares.....................................................38
56. Forfeiture of shares................................................38
57. Contents of Register of Members.....................................39
58. Inspection of Register of Members...................................39
59. Determination of record dates.......................................39
60. Instrument of transfer..............................................40
61. Restriction on transfer.............................................40
62. Transfers by joint holders..........................................41
63. Representative of deceased Member...................................41
64. Registration on death or bankruptcy.................................42
65. Declaration of dividends by the Board...............................42
66. Other distributions.................................................42
67. Reserve fund........................................................43
68. Deduction of Amounts due to the Company.............................43
69. Issue of bonus shares...............................................43
70. Records of account..................................................44
71. Financial year end..................................................44
72. Financial statements................................................44
73. Appointment of Auditor..............................................45
74. Remuneration of Auditor.............................................45
75. Vacation of office of Auditor.......................................45
76. Access to books of the Company......................................45
77. Report of the Auditor...............................................46
78. Notices to Members of the Company...................................46
79. Notices to joint Members............................................46
80. Service and delivery of notice......................................47
81. The seal............................................................47
82. Manner in which seal is to be affixed...............................47
83. Winding-up/distribution by liquidator...............................47
84. Alteration of Bye-laws..............................................48
<PAGE>
INTERPRETATION
1. Interpretation
(1) In these Bye-laws the following words and expressions shall,
where not inconsistent with the context, have the following meanings
respectively:
(a) "Act" means the Companies Act 1981 as amended from time to
time;
(b) "Affiliate" means, with respect to any specified Person, any
other Person that directly, or indirectly through one or
more intermediaries, Controls or is Controlled by, or is
under Common Control with, such specified Person;
(c) "Alternate Director" means an alternate Director appointed
in accordance with these Bye-laws;
(d) "AM Latin America" means AM Latin America, LLC, a limited
liability company incorporated under the laws of the State
of Delaware; and
(e) "Auditor" includes any individual or partnership;
(f) "BCI Investments" means Bell Canada International
Investments Limited, a company incorporated under the laws
of the British Virgin Islands;
(g) "BCI" means Bell Canada International, Inc., a corporation
organised under the laws of Canada.
(h) "Board" means the Board of Directors appointed or elected
pursuant to these Bye-laws and acting by resolution in
accordance with the Act and these Bye-laws or the Directors
present at a meeting of Directors at which there is a
quorum;
(i) "Capital Stock" means, with respect to any Person at any
time, any and all shares, interests, participations or other
equivalents (however designated, whether voting or
non-voting) of capital, capital stock, partnership interests
(whether general or limited), membership interests or
equivalent ownership interests in or issued by such Person;
(j) "Comcel" means Comunicacion Celular S.A., a sociedad anonima
existing under the laws of Colombia.
(k) "Comcel Bonds" means the 14-1/8% Deferred Coupon Bonds Due
2005 issued by Comcel pursuant to the Comcel Indenture.
(l) "Comcel Indenture" means the Indenture dated as of December
23, 1998 among Comcel and the Bank of New York, as
subsequently amended from time to time.
(m) "Common Shares" shall have the meaning as set forth in
Bye-law 48(1).
(n) "Company" means the company for which these Bye-laws are
approved and confirmed;
(o) "Control" (including the terms "Controlled by" and "under
Common Control with"), with respect to the relationship
between or among two or more Persons, means the possession,
directly or indirectly, or as trustee or executor, of the
power to direct or cause the direction of the affairs or
management of a Person, whether through the ownership of
voting securities, as trustee or executor, by contract or
otherwise, including, without limitation, the ownership,
directly or indirectly, of securities having the power to
elect a majority of the board of directors or similar body
governing the affairs of such Person; PROVIDED THAT a Person
shall not be deemed to Control any Person that is a publicly
traded company if its ownership of voting securities does
not constitute a majority of the voting securities of such
Person;
(p) "Director" means a director of the Company and shall include
an Alternate Director;
(q) "Equity Interests" means, with respect to any Person, all of
the shares of Capital Stock of (or other ownership or profit
interests in) such Person, all of the warrants, options or
other rights for the purchase or acquisition from such
Person of shares of Capital Stock of (or other ownership or
profit interests in) such Person, all of the securities
(including loans, notes, debentures or other debt
instruments) convertible into or exchangeable for shares of
Capital Stock of (or other ownership or profit interests in)
such Person or warrants, rights or options for the purchase
or acquisition from such Person of such shares (or such
other interests), and all of the other ownership or profit
interests in such Person (including, without limitation,
partnership, member or trust interests therein), whether
voting or non-voting;
(r) "Governmental Authority" means, in any applicable
jurisdiction, any federal, provincial, state or local
government, any governmental, regulatory or administrative
authority, agency or commission, or any court or tribunal,
or judicial or arbitral body;
(s) "Indebtedness" means, with respect to any Person, and in the
case of clauses i) through viii) below, whether secured or
unsecured, i) all indebtedness of such Person, whether or
not contingent, for borrowed money, ii) all obligations of
such Person evidenced by notes, bonds, debentures or other
similar instruments, iii) all indebtedness created or
arising under any conditional sale or other title retention
agreement with respect to property acquired by such Person
(even though the rights and remedies of the sellers or
lenders under such agreement in the event of default are
limited to repossession or sale of such property), iv) all
obligations of such Person as lessee under leases that have
been or should be, in accordance with United States
generally accepted accounting principles, recorded as
capital leases, v) all obligations, contingent or otherwise,
of such Person under acceptance, letter of credit or similar
facilities, vi) all obligations of such Person to purchase,
redeem, retire, defease or otherwise acquire for value any
Equity Interests of such Person, valued, in the case of
redeemable preferred stock, at the greater of its voluntary
or involuntary liquidation preference, plus accrued and
unpaid dividends, vii) all obligations of such Person for
the deferred purchase price of property or services (other
than current trade payables incurred in the ordinary course
of business), viii) all obligations of such Person in
respect of interest rate swaps, caps or collar agreements or
similar arrangements, and ix) all indebtedness of others
referred to in clauses i) through ii) above guaranteed
directly or indirectly in any manner by such Person or
secured by any security interest, pledge, mortgage, lien
(including, without limitation, environmental and tax
liens), charge, encumbrance or adverse claim, on property
(including accounts and contract rights) owned by such
Person;
(t) "Intermediate Company" means any Person (other than a
Regulated Opco) that is a Subsidiary or Minority Investee of
the Company;
(u) "Joint Venture Shareholder" means each of BCI Investments,
AM Latin America and SBCI Brazil Holding, and each other
Person that becomes a party to the Joint Venture
Shareholders Agreement, as such agreement may be amended
from time to time in accordance with the terms thereof;
(v) "Joint Venture Shareholders Agreement" shall mean the
Shareholders Agreement dated as of November 16, 2000 among
BCI Investments, AM Latin America, SBCI Brazil Holding and
Telecom Americas Ltd. as amended from time to time pursuant
to the terms thereof;
(w) "Joint Venture Sponsor Party" means, in the case of SBCI
Brazil Holding, SBC Communications, Inc.; in the case of AM
Latin America, America Movil, S.A. de C.V.; in the case of
BCI Investments, BCE Inc. and, with respect to any other
Joint Venture Shareholder, the ultimate parent company of
such Joint Venture Shareholder;
(x) "Member" means the Person or Persons registered in the
Register of Members as the holder of shares in the Company
or all of such Persons as the context so requires;
(y) "Minority Investee" means any Person (other than a
Subsidiary of the Company) in which the Company, directly or
indirectly, holds an Equity Interest;
(z) "Notice" means written notice as further defined in these
Bye-laws unless otherwise specifically stated;
(aa) "Officer" means any person appointed by the Board to hold an
office in the Company;
(bb) "Permitted Transferee" means, with respect to BCI
Investments, any Person (a "transferee") with respect to
which BCE, Inc. maintains a majority economic and voting
interest; PROVIDED THAT no such Person shall be deemed to be
a Permitted Transferee if any Person other than BCE, Inc. is
permitted, by contract or otherwise, to direct or influence
the exercise of such transferee of any rights under the
Joint Venture Shareholders Agreement, including, without
limitation, rights pursuant to Section 3.08 thereunder;
PROVIDED, FURTHER, THAT BCI Investments and BCE, Inc. comply
with their respective obligations set forth in Section 4.05
of the Joint Venture Shareholders Agreement.
(cc) "Person" means any individual, partnership, firm, limited
liability company, corporation, association, trust,
unincorporated organization or other entity, as well as any
syndicate or group that would be deemed to be a person under
section 13(d)(3) of the U.S. Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated
by the U.S. Securities and Exchange Commission thereunder;
(dd) "Preference Shares" shall have the meaning as set forth in
Bye-law 48(1).
(ee) "Qualified Matter" shall have the meaning set forth in
Bye-law 9;
(ff) "Redemption Condition" shall mean the occurrence of any of
the following: (i) the satisfaction and discharge of the
obligations of Comcel under the Comcel Indenture with
respect to the Comcel Bonds, (ii) any amendment of or waiver
made pursuant to the terms of the Comcel Indenture such that
Comcel is not required to make an offer to purchase the
Comcel Bonds pursuant to Section 3.07 of the Comcel
Indenture in the event that the Member or Members holding
Common Shares Control the Company, (iii) the delivery to the
Company of a notice signed by, or on behalf of, the Member
or Members holding a majority of the Common Shares requiring
the Company to redeem the Preference Shares, (iv) the Sale
of the Preference Shares by BCI Investments (or by any
Permitted Transferee of BCI Investments) to any party other
than (a) Telecom Americas Ltd. or its successors and assigns
or (b) a Permitted Transferee of BCI Investments holding
Telecom Americas Shares transferred to it pursuant to and in
accordance with Section 4.05 of the Joint Venture
Shareholders Agreement, and (v) BCE, Inc. shall fail to hold
directly or indirectly legal and beneficial ownership of a
majority of the issued and outstanding Capital Stock and
Equity Interests, of BCI Investments or of any Person
holding Preference Shares;
(gg) "Register of Directors and Officers" means the Register of
Directors and Officers referred to in these Bye-laws;
(hh) "Register of Members" means the Register of Members referred
to in these Bye-laws;
(ii) "Regulated Opcos" means Americel S.A., a corporation
(sociedade por acoes) organized under the laws of Brazil,
Canbras Participacoes Ltda., a corporation (sociedad por
quotas de responsabilidade limitada) organized under the
laws of Brazil, Comunicacion Celular S.A., Comcel S.A., a
corporation (sociedad anonima) organized under the laws of
Colombia, Telet S.A., a corporation (sociedade por acoes)
organized under the laws of Brazil, TV Mogno Ltda., a
corporation (sociedade por quotas de responsabilidade
limitada) organized under the laws of Brazil, TV Eucalipto
Ltda., a corporation (sociedade por quotas de
responsabilidade limitada) organized under the laws of
Brazil, TVA Jacaranda Ltda., a corporation (sociedade por
quotas de responsabilidade limitada) organized under the
laws of Brazil, Walberg Comunicacoes Ltda., a corporation
(sociedade por quotas de responsabilidade limitada)
organized under the laws of Brazil; provided, however, that
each such Person shall cease to be deemed a Regulated Opco
upon expiration or termination of applicable contractual or
regulatory requirements restricting the transfer of control
of such Person and, in the case of regulatory requirements,
upon approval by the relevant Governmental Authorities of
the transfer of control of such Person to the Company;
(jj) "Resident Representative" means any person appointed to act
as resident representative and includes any deputy or
assistant resident representative;
(kk) "Sale" means any sale, assignment, transfer, distribution or
other disposition of shares of the Company or of a
participation, including the grant of an irrevocable option
or put in respect of shares of the Company, or other rights
therein, whether voluntarily or by operation of law;
(ll) "SBCI Brazil Holding" means SBC International - Brazil
Holding, Ltd., a company incorporated under the laws of the
Cayman Islands;
(mm) "Secretary" means the person appointed to perform any or all
the duties of secretary of the Company and includes any
deputy or assistant secretary;
(nn) "Subsidiary" of any Person means any other Person of which
(a) the first mentioned Person or any Subsidiary thereof is
the general partner, (b) voting power to elect a majority of
the board of directors or others performing similar
functions with respect to such other Person is held by the
first mentioned Person and/or by any one or more of its
Subsidiaries, or (c) more than 50% of the voting Equity
Interests of such other Person is, directly or indirectly,
owned or Controlled by such first mentioned Person and/or by
one or more of its Subsidiaries;
(oo) "Telecom Americas Shares" means (i) voting shares, par value
US$1.00 per share, and (ii) preferred shares, Series C, par
value US$1.00 per share, in each case of Telecom Americas
Ltd., a company incorporated under the laws of Bermuda.
(2) In these Bye-laws, where not inconsistent with the context:
(a) words denoting the plural number include the singular number
and vice versa;
(b) words denoting the masculine gender include the feminine
gender;
(c) words importing persons include companies, associations or
bodies of persons whether corporate or not;
(d) the word:
(i) "may" shall be construed as permissive;
(ii) "shall" shall be construed as imperative; and
(e) unless otherwise provided herein words or expressions
defined in the Act shall bear the same meaning in these
Bye-laws.
(3) Expressions referring to writing or written shall, unless the
contrary intention appears, include facsimile, printing, lithography,
photography and other modes of representing words in a visible form.
(4) Headings used in these Bye-laws are for convenience only and are
not to be used or relied upon in the construction hereof.
BOARD OF DIRECTORS
2. Board of Directors
The business of the Company shall be managed and conducted by the
Board.
3. Management of the Company
(1) Subject to Bye-law 9, in managing the business of the Company,
the Board may exercise all such powers of the Company as are not, by statute or
by these Bye-laws, required to be exercised by the Company in general meeting
subject, nevertheless, to these Bye-laws, the provisions of any statute and to
such directions as may be prescribed by the Company in general meeting.
(2) No regulation or alteration to these Bye-laws made by the Company
in general meeting shall invalidate any prior act of the Board which would have
been valid if that regulation or alteration had not been made.
(3) The Board may procure that the Company pays all expenses incurred
in promoting and incorporating the Company.
4. Power to authorise specific actions; Power to delegate to a Committee
(1) Subject to Bye-law 9, the Board may from time to time and at any
time authorise any company, firm, person or body of persons to act on behalf of
the Company for any specific purpose and in connection therewith to execute any
agreement, document or instrument on behalf of the Company.
(2) The Board shall not delegate any of its powers to a committee.
5. Power to appoint attorney
Subject to Bye-law 9, the Board may from time to time and at any time
by power of attorney appoint any company, firm, person or body of persons,
whether nominated directly or indirectly by the Board, to be an attorney of the
Company for such purposes and with such powers, authorities and discretions (not
exceeding those vested in or exercisable by the Board) and for such period and
subject to such conditions as it may think fit and any such power of attorney
may contain such provisions for the protection and convenience of persons
dealing with any such attorney as the Board may think fit and may also authorise
any such attorney to sub-delegate all or any of the powers, authorities and
discretions so vested in the attorney. Such attorney may, if so authorised under
the seal of the Company, execute any deed or instrument under such attorney's
personal seal with the same effect as the affixation of the seal of the Company.
6. Power to appoint and dismiss employees
The Board may appoint, suspend or remove any manager, secretary,
clerk, agent or employee of the Company and may fix their remuneration and
determine their duties.
7. Power to borrow and charge property
Subject to Bye-law 9, the Board may exercise all the powers of the
Company to borrow money and to mortgage or charge its undertaking, property and
uncalled capital, or any part thereof, and may issue debentures, debenture stock
and other securities whether outright or as security for any debt, liability or
obligation of the Company or any third party.
8. Exercise of power to purchase shares of or discontinue the Company
(1) Except for the redemption of the Preference Shares pursuant to
Bye-law 49 hereof, the Company shall not purchase all or any part of its own
shares for so long as the Preference Shares are entitled to vote, PROVIDED THAT
at such time as the Preference Shares cease to have any voting rights, the Board
may exercise all the powers of the Company to purchase all or any part of its
own shares pursuant to Section 42A of the Act.
(2) Subject to Bye-law 9 hereof, the Board may exercise all the
powers of the Company to discontinue the Company to a named country or
jurisdiction outside Bermuda pursuant to Section 132G of the Act.
9. Board Decision on Qualified Matters
Notwithstanding anything to the contrary in these Bye-laws and
notwithstanding that no vote may be required, or that a lesser percentage vote
may be required, by Law or otherwise, the Company shall not take any action with
respect to the following actions (each a "Qualified Matter"), without a vote of
the majority of Directors, which majority shall include the affirmative vote of
the Director elected by the Members holding Common Shares:
(a) a public offering of the Capital Stock of the Company or any
Intermediate Company;
(b) the issuance or sale of any Capital Stock of the Company;
(c) the issuance or sale of any notes, bonds, debt instruments
or other securities, or any option, warrant or other right
to acquire the same, of, or any other interest in, the
Company or any Intermediate Company, or any securities of
any type whatsoever that are, or may become, convertible
into or exchangeable or exercisable for Capital Stock of the
Company or any Intermediate Company;
(d) the amalgamation, consolidation, or merger of the Company or
any Intermediate Company into or with any other Person, the
consolidation with any Person by the Company or any
Intermediate Company, or the sale, reorganization or
restructuring of the Company or any Intermediate Company (or
any similar transaction);
(e) the acquisition of assets or businesses of any Person by the
Company or any Intermediate Company the purchase price for
which exceeds US$100 million or which would be reasonably
likely to delay the occurrence of the Redemption Condition;
(f) the sale, assignment, transfer, lease, sublease, charge,
mortgage, pledge, grant of security interest in, sublicense
or other disposition of any material license of the Company
or any Intermediate Company;
(g) the sale, assignment, transfer, lease, sublease, mortgage,
pledge, grant of security interest in, license or other
disposition of any assets of the Company or any Intermediate
Company the value of which exceeds US$50 million;
(h) any incurrence, assumption or issuance by the Company or any
Intermediate Company of Indebtedness (A) if, after giving
effect to such incurrence, assumption or issuance (including
the application of the net proceeds therefrom), the
Company's or any Intermediate Company's ratio of
Indebtedness to shareholders' equity (based upon book value)
would exceed, as of the date of determination, 2.34:1, or
(B) in excess of US$50 million, (ii) the guaranteeing of any
Indebtedness of any Subsidiary of the Company in excess of
US$50 million, or (iii) the guaranteeing of any Indebtedness
of any other Person;
(i) the entering by the Company or any Intermediate Company into
of any agreement, arrangement or transaction with any
Affiliate of the Company or any Joint Venture Shareholder or
any Affiliate of a Joint Venture Shareholder or Joint
Venture Sponsor Party;
(j) any amendment to the Memorandum of Association of the
Company or these Bye-laws or to the Memorandum of
Association and Bye-laws (or similar instruments) of any
Intermediate Company;
(k) the commencement, settlement, payment, discharge or
satisfaction of any litigation, claim, liability or
obligation (absolute, accrued, asserted or unasserted,
contingent or otherwise) by the Company or any Intermediate
Company other than where such litigation, claim, liability
or obligation is only for money damages that do not exceed
US$50 million;
(l) the declaration or payment of dividends or distributions on
or with respect to any Capital Stock of the Company or any
Intermediate Company;
(m) approving any capital expenditure by the Company or any
Intermediate Company which exceeds, individually or in the
aggregate, US$25 million;
(n) approving any matter to be voted upon at any meeting of the
Members of the Company;
(o) instructing the Company with respect to the voting of the
shares of any Intermediate Company held directly or
indirectly by the Company with respect to any matter listed
in clause (a) and clauses (c) through (n) above and clause
(p) below; and
(p) the taking of any action, directly or indirectly, in
contemplation of any of the foregoing; PROVIDED THAT, for
the avoidance of doubt, no such action shall impede the
exercise by any Person that controls any Regulated Opco to
exercise its voting rights with respect to such Regulated
Opco.
10. Election of Directors
The Board shall consist of three Directors. The Members holding
Common Shares shall be entitled to elect one Director so that, at all times, at
least one member of the Board has been elected by the Members holding Common
Shares. The Directors shall be elected or appointed in the first place at the
statutory meeting of the Company and thereafter, except in the case of casual
vacancy, at the annual general meeting or at any special general meeting called
for the purpose and shall hold office for such term as the Members may determine
or, in the absence of such determination, until the next annual general meeting
or until their successors are elected or appointed, their resignation or removal
in accordance with these Bye-laws, or their office is otherwise vacated, except
as otherwise provided herein, and any general meeting may authorise the Board to
fill any vacancy in their number left unfilled at a general meeting, PROVIDED
THAT the Members holding Common Shares shall be entitled to elect a Director to
fill a vacancy left unfilled if such Members have not elected one of the
Directors then in office.
11. Defects in appointment of Directors
All acts done bona fide by any meeting of the Board or by any person
acting as a Director shall, notwithstanding that it be afterwards discovered
that there was some defect in the appointment of any Director or person acting
as aforesaid, or that they or any of them were disqualified, be as valid as if
every such person had been duly appointed and was qualified to be a Director.
12. Alternate Directors
(1) Any Director may appoint a person or persons to act as a Director
in the alternative to himself or herself by notice in writing deposited with the
Secretary. An Alternate Director appointed by a Director elected by the Members
holding Common Shares shall be considered a Director elected by the Members
holding Common Shares for purposes of these Bye-laws. Any person so appointed
shall have all the rights and powers of the Director or Directors for whom such
person is appointed in the alternative provided that such person shall not be
counted more than once in determining whether or not a quorum is present.
(2) An Alternate Director shall be entitled to receive notice of all
meetings of the Board and to attend and vote at any such meeting at which a
Director for whom such Alternate Director was appointed in the alternative is
not personally present and generally to perform at such meeting all the
functions of such Director for whom such Alternate Director was appointed.
(3) An Alternate Director shall cease to be such if the Director for
whom such Alternate Director was appointed ceases for any reason to be a
Director but may be re-appointed by the Board as alternate to the person
appointed to fill the vacancy in accordance with these Bye-laws.
13. Removal of Directors
(1) Prior to the occurrence of the Redemption Condition and subject
to any provision to the contrary in these Bye-laws, Members may at any special
general meeting convened and held in accordance with these Bye-laws, remove a
Director by a majority vote, or in the case of a Director elected by the Members
holding Common Shares, by a majority vote of the Common Shares, PROVIDED THAT
the notice of any such meeting convened for the purpose of removing a Director
shall contain a statement of the intention so to do and be served on such
Director not less than 14 days before the meeting and at such meeting such
Director shall be entitled to be heard on the motion for such Director's
removal.
(2) Notwithstanding the foregoing, at any time after the occurrence
of the Redemption Condition, the Members holding Common Shares may, at any
special general meeting convened and held in accordance with these Bye-laws,
remove any Director by a majority vote of the Common Shares, PROVIDED THAT the
notice of any such meeting convened for the purpose of removing a Director shall
contain a statement of the intention so to do and be served on such Director not
less than 14 days before the meeting and at such meeting such Director shall be
entitled to be heard on the motion for such Director's removal.
(3) A vacancy on the Board created by the removal of a Director
under the provisions of clause (1) or clause (2) of this Bye-law may be filled
by the Members at the meeting at which such Director is removed and, in the
absence of such election or appointment, the Board may fill the vacancy,
PROVIDED THAT the Members holding Common Shares shall be entitled to elect any
such Director if such Members have not elected one of the Directors then in
office.
14. Vacancies on the Board
(1) The Board shall have the power from time to time and at any time
to appoint any person as a Director to fill a vacancy on the Board occurring as
the result of the death, disability, disqualification or resignation of any
Director and to appoint an Alternate Director to any Director so appointed,
PROVIDED THAT the Members holding Common Shares shall be entitled to elect a
Director to fill such a vacancy if such Members have not elected one of the
Directors then in office.
(2) The Board may act notwithstanding any vacancy in its number but,
if and so long as its number is reduced below the number fixed by these Bye-laws
as the quorum necessary for the transaction of business at meetings of the
Board, the continuing Directors or Director may act for the purpose of (i)
summoning a general meeting of the Company or (ii) preserving the assets of the
Company.
(3) The office of Director shall be vacated if the Director:-
(a) is removed from office pursuant to these Bye-laws or is
prohibited from being a Director by law;
(b) is or becomes bankrupt or makes any arrangement or
composition with his creditors generally;
(c) is or becomes of unsound mind or dies; or
(d) resigns his or her office by notice in writing to the
Company.
15. Notice of meetings of the Board
(1) A Director may, and the Secretary on the requisition of a
Director shall, at any time summon a meeting of the Board.
(2) Notice of a meeting of the Board shall be deemed to be duly given
to a Director if it is given to such Director verbally in person or by telephone
or otherwise communicated or sent to such Director by post, cable, telex,
telecopier, facsimile or other mode of representing words in a legible and
non-transitory form at such Director's last known address or any other address
given by such Director to the Company for this purpose.
16. Quorum at meetings of the Board
The quorum necessary for the transaction of business at a meeting of
the Board shall be two Directors, at least one of which shall be a director
elected by the Members holding Common Shares.
17. Meetings of the Board
(1) The Board may meet for the transaction of business, adjourn and
otherwise regulate its meetings as it sees fit.
(2) Directors may participate in any meeting of the Board by means of
such telephone, electronic or other communication facilities as permit all
persons participating in the meeting to communicate with each other
simultaneously and instantaneously, and participation in such a meeting shall
constitute presence in person at such meeting.
(3) Except as otherwise provided in these Bye-laws, a resolution put
to the vote at a meeting of the Board shall be carried by the affirmative votes
of a majority of the votes cast and in the case of an equality of votes the
resolution shall fail.
18. Unanimous written resolutions
A resolution in writing signed by all the Directors which may be in
counterparts, shall be as valid as if it had been passed at a meeting of the
Board duly called and constituted, such resolution to be effective on the date
on which the last Director signs the resolution. For the purposes of this
Bye-law only, "Director" shall not include an Alternate Director.
19. Contracts and disclosure of Directors' interests
(1) Any Director, or any Director's firm, partner or any company with
whom any Director is associated, may act in a professional capacity for the
Company and such Director or such Director's firm, partner or such company shall
be entitled to remuneration for professional services as if such Director were
not a Director, PROVIDED THAT nothing herein contained shall authorise a
Director or Director's firm, partner or such company to act as Auditor of the
Company.
(2) A Director who is directly or indirectly interested in a contract
or proposed contract or arrangement with the Company shall declare the nature of
such interest as required by the Act.
(3) Following a declaration being made pursuant to this Bye-law, and
unless disqualified by the chairman of the relevant Board meeting, a Director
may vote in respect of any contract or proposed contract or arrangement in which
such Director is interested and may be counted in the quorum at such meeting.
20. Remuneration of Directors
The remuneration (if any) of the Directors shall be determined by the
Company in general meeting and shall be deemed to accrue from day to day. The
Directors may also be paid all travel, hotel and other expenses properly
incurred by them in attending and returning from meetings of the Board, any
committee appointed by the Board, general meetings of the Company, or in
connection with the business of the Company or their duties as Directors
generally.
OFFICERS
21. Officers of the Company
The Officers of the Company shall consist of a President, a Vice
President, a Secretary and such additional Officers as the Board may from time
to time determine, all of whom shall be deemed to be Officers for the purposes
of these Bye-laws.
22. Appointment of Officers
(1) The Board shall, as soon as possible after the statutory meeting
of Members and after each annual general meeting, appoint a President and a Vice
President who shall be Directors.
(2) The Secretary and additional Officers, if any, shall be appointed
by the Board from time to time.
23. Remuneration of Officers
The Officers shall receive such remuneration as the Board may from
time to time determine.
24. Duties of Officers
The Officers shall have such powers and perform such duties in the
management, business and affairs of the Company as may be delegated to them by
the Board from time to time.
25. Chairman of meetings
Unless otherwise agreed by a majority of those attending and entitled
to attend and vote thereat, the President shall act as chairman at all meetings
of the Members and of the Board at which such person is present. In his or her
absence the Vice President, if present, shall act as chairman and in the absence
of both of them a chairman shall be appointed or elected by those present at the
meeting and entitled to vote. For the sake of clarity, nothing in this Bye-law
shall be interpreted to authorize anyone other than a Director or Member to vote
at a meeting of the Board or Members, as applicable.
26. Register of Directors and Officers
The Board shall cause to be kept in one or more books at the
registered office of the Company a Register of Directors and Officers and shall
enter therein the particulars required by the Act.
MINUTES
27. Obligations of Board to keep minutes
(1) The Board shall cause minutes to be duly entered in books
provided for the purpose:
(a) of all elections and appointments of Officers;
(b) of the names of the Directors present at each meeting of the
Board and of any committee appointed by the Board; and
(c) of all resolutions and proceedings of general meetings of
the Members, meetings of the Board, meetings of senior
managers and meetings of committees appointed by the Board.
(2) Minutes prepared in accordance with the Act and these Bye-laws
shall be kept by the Secretary at the registered office of the Company.
INDEMNITY
28. Indemnification of Directors and Officers of the Company
The Directors, Secretary and other Officers for the time being acting
in relation to any of the affairs of the Company and the liquidator or trustees
(if any) for the time being acting in relation to any of the affairs of the
Company and every one of them, and their heirs, executors and administrators,
shall be indemnified and secured harmless out of the assets of the Company from
and against all actions, costs, charges, losses, damages and expenses which they
or any of them, their heirs, executors or administrators, shall or may incur or
sustain by or by reason of any act done, concurred in or omitted in or about the
execution of their duty, or supposed duty, or in their respective offices or
trusts, and none of them shall be answerable for the acts, receipts, neglects or
defaults of the others of them or for joining in any receipts for the sake of
conformity, or for any bankers or other persons with whom any moneys or effects
belonging to the Company shall or may be lodged or deposited for safe custody,
or for insufficiency or deficiency of any security upon which any moneys of or
belonging to the Company shall be placed out on or invested, or for any other
loss, misfortune or damage which may happen in the execution of their respective
offices or trusts, or in relation thereto, PROVIDED THAT this indemnity shall
not extend to any matter in respect of any fraud or dishonesty which may attach
to any of said persons.
29. Waiver of claim by Member
Each Member agrees to waive any claim or right of action such Member
might have, whether individually or by or in the right of the Company, against
any Director or Officer on account of any action taken by such Director or
Officer, or the failure of such Director or Officer to take any action in the
performance of his duties with or for the Company, PROVIDED THAT such waiver
shall not extend to any matter in respect of any fraud or dishonesty which may
attach to such Director or Officer.
MEETINGS
30. Notice of annual general meeting
The annual general meeting of the Company shall be held in each year
other than the year of incorporation at such time and place as the President or
any two Directors or any Director and the Secretary or the Board shall appoint.
At least five days notice of such meeting shall be given to each Member stating
the date, place and time at which the meeting is to be held, that the election
of Directors will take place thereat, and as far as practicable, the other
business to be conducted at the meeting.
31. Notice of special general meeting
The President or any two Directors or any Director and the Secretary
or the Board may convene a special general meeting of the Company whenever in
their judgment such a meeting is necessary, upon not less than five days' notice
which shall state the date, time, place and the general nature of the business
to be considered at the meeting.
32. Accidental omission of notice of general meeting
The accidental omission to give notice of a general meeting to, or
the non-receipt of notice of a general meeting by, any person entitled to
receive notice shall not invalidate the proceedings at that meeting, provided
that the quorum requirements of these Bye-laws are met.
33. Meeting called on requisition of Members
Notwithstanding anything herein, the Board shall, on the requisition
of Members holding at the date of the deposit of the requisition not less than
one-tenth of such of the paid-up share capital of the Company as at the date of
the deposit carries the right to vote at general meetings of the Company,
forthwith proceed to convene a special general meeting of the Company and the
provisions of Section 74 of the Act shall apply.
34. Short notice
A general meeting of the Company shall, notwithstanding that it is
called by shorter notice than that specified in these Bye-laws, be deemed to
have been properly called if it is so agreed by (i) all the Members entitled to
attend and vote thereat in the case of an annual general meeting; and (ii) by a
majority in number of the Members having the right to attend and vote at the
meeting, being a majority together holding not less than 95% in nominal value of
the shares giving a right to attend and vote thereat in the case of a special
general meeting.
35. Postponement of meetings
The Secretary may postpone any general meeting called in accordance
with the provisions of these Bye-laws (other than a meeting requisitioned under
these Bye-laws) PROVIDED THAT notice of postponement is given to each Member
before the time for such meeting. Fresh notice of the date, time and place for
the postponed meeting shall be given to each Member in accordance with the
provisions of these Bye-laws.
36. Quorum for general meeting
At any general meeting of the Company, two persons present in Person
and representing in Person or by proxy in excess of both 50% of the outstanding
Common Shares and, prior to the occurrence of the Redemption Condition, 50% of
the outstanding Preference Shares, if any, in the Company throughout the meeting
shall form a quorum for the transaction of business, PROVIDED THAT if the
Company shall at any time have only one Member, one Member present in Person or
by proxy shall form a quorum for the transaction of business at any general
meeting of the Company held during such time. If within half an hour from the
time appointed for the meeting a quorum is not present, the meeting shall stand
adjourned to the same day one week later, at the same time and place or to such
other day, time or place as the Secretary may determine.
37. Adjournment of meetings
The chairman of a general meeting may, with the consent of a majority
of the Members at any general meeting at which a quorum is present (and shall if
so directed by a majority of the Members at such meeting), adjourn the meeting.
Unless the meeting is adjourned to a specific date and time, fresh notice of the
date, time and place for the resumption of the adjourned meeting shall be given
to each Member in accordance with the provisions of these Bye-laws.
38. Attendance at meetings
Members may participate in any general meeting by means of such
telephone, electronic or other communication facilities as permit all persons
participating in the meeting to communicate with each other simultaneously and
instantaneously, and participation in such a meeting shall constitute presence
in person at such meeting.
39. Written resolutions
(1) Subject to subparagraph (6), anything which may be done by
resolution of the Company in general meeting or by resolution of a meeting of
any class of the Members of the Company, may, without a meeting and without any
previous notice being required, be done by resolution in writing signed by, or,
in the case of a Member that is a corporation whether or not a company within
the meaning of the Act, on behalf of, all the Members who at the date of the
resolution would be entitled to attend the meeting and vote on the resolution.
(2) A resolution in writing may be signed by, or, in the case of a
Member that is a corporation whether or not a company within the meaning of the
Act, on behalf of, all the Members, or any class thereof, in as many
counterparts as may be necessary.
(3) For the purposes of this Bye-law, the date of the resolution is
the date when the resolution is signed by, or, in the case of a Member that is a
corporation whether or not a company within the meaning of the Act, on behalf
of, the last Member to sign and any reference in any Bye-law to the date of
passing of a resolution is, in relation to a resolution made in accordance with
this Bye-law, a reference to such date.
(4) A resolution in writing made in accordance with this Bye-law is
as valid as if it had been passed by the Company in general meeting or by a
meeting of the relevant class of Members, as the case may be, and any reference
in any Bye-law to a meeting at which a resolution is passed or to Members voting
in favour of a resolution shall be construed accordingly.
(5) A resolution in writing made in accordance with this Bye-law
shall constitute minutes for the purposes of Sections 81 and 82 of the Act.
(6) This Bye-law shall not apply to:
(a) a resolution passed pursuant to Section 89(5) of the Act; or
(b) a resolution passed for the purpose of removing a Director
before the expiration of his term of office under these
Bye-laws.
40. Attendance of Directors
The Directors of the Company shall be entitled to receive notice of
and to attend and be heard at any general meeting.
41. Voting at meetings
(1) Subject to the provisions of the Act and these Bye-laws, any
question proposed for the consideration of the Members at any general meeting
shall be decided by the affirmative vote of a majority of the votes cast in
accordance with the provisions of these Bye-laws and in the case of an equality
of votes the resolution shall fail, PROVIDED THAT, without the affirmative vote
of the Common Shares, the Members shall not take any action with respect to a
Qualified Matter.
(2) Notwithstanding any other provision of these Bye-laws and
notwithstanding that no vote may be required, or that a lesser percentage vote
may be required, by Law or otherwise, the Company shall take no action with
respect to any of the following without the affirmative vote of a majority of
the Common Shares:
(a) material change in the nature or scope of the business or
corporate strategy of the Company or any Intermediate
Company or the entering into a joint venture or similar
strategic alliance by any thereof with any Person; and
(b) the winding up or dissolution of the Company or any
Intermediate Company; the adoption of a plan of liquidation
of the Company or any Intermediate Company; any action by
the Company or any Intermediate Company to commence any
suit, case, proceeding or other action (i) under any
existing or future law of any jurisdiction relating to
bankruptcy, insolvency, reorganization or relief of debtors
seeking to have an order for relief entered with respect to
the Company or any Intermediate Company, or seeking to
adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with
respect to the Company or any Intermediate Company or (ii)
seeking appointment of a receiver, trustee, custodian or
other similar official for the Company or any Intermediate
Company, or for all or any part of its assets, or making a
general assignment for the benefit of the creditors of the
Company or any Intermediate Company.
(3) No Member shall be entitled to vote at any general meeting unless
such Member has paid all the calls on all shares held by such Member. No Member
holding Preference Shares shall be entitled to vote at any general meeting after
the occurrence of the Redemption Condition, as set forth in Bye-law 48.
42. Voting on show of hands
At any general meeting a resolution put to the vote of the meeting
shall, in the first instance, be voted upon by a show of hands and, subject to
any rights or restrictions for the time being lawfully attached to any class of
shares and subject to the provisions of these Bye-laws, every Member present in
Person and every person holding a valid proxy at such meeting shall be entitled
to one vote and shall cast such vote by raising his or her hand.
43. Decision of chairman
At any general meeting a declaration by the chairman of the meeting
that a question proposed for consideration has, on a show of hands, been
carried, or carried unanimously, or by a particular majority, or lost, and an
entry to that effect in a book containing the minutes of the proceedings of the
Company shall, subject to the provisions of these Bye-laws, be conclusive
evidence of that fact.
44. Demand for a poll
(1) Notwithstanding the provisions of the immediately preceding two
Bye-laws, at any general meeting of the Company, in respect of any question
proposed for the consideration of the Members (whether before or on the
declaration of the result of a show of hands as provided for in these Bye-laws),
a poll may be demanded by any of the following persons:-
(a) the chairman of such meeting; or
(b) at least three Members present in Person or represented by
proxy; or
(c) any Member or Members present in Person or represented by
proxy and holding between them not less than one-tenth of
the total voting rights of all the Members having the right
to vote at such meeting; or
(d) any Member or Members present in Person or represented by
proxy holding shares in the Company conferring the right to
vote at such meeting, being shares on which an aggregate sum
has been paid up equal to not less than one-tenth of the
total sum paid up on all such shares conferring such right.
(2) Where, in accordance with the provisions of subparagraph (1) of
this Bye-law, a poll is demanded, subject to any rights or restrictions for the
time being lawfully attached to any class of shares, every person present at
such meeting shall have one vote for each share entitled to vote of which such
person is the holder, or for which such person holds a proxy, and such vote
shall be counted in the manner set out in sub-paragraph (4) of this Bye-law or
in the case of a general meeting at which one or more Members are present by
telephone in such manner as the chairman of the meeting may direct and the
result of such poll shall be deemed to be the resolution of the meeting at which
the poll was demanded and shall replace any previous resolution upon the same
matter which has been the subject of a show of hands.
(3) A poll demanded in accordance with the provisions of subparagraph
(1) of this Bye-law, for the purpose of electing a chairman of the meeting or on
a question of adjournment, shall be taken forthwith and a poll demanded on any
other question shall be taken in such manner and at such time and place as the
President (or acting chairman) may direct and any business other than that upon
which a poll has been demanded may be proceeded with pending the taking of the
poll.
(4) Where a vote is taken by poll, each person present and entitled
to vote shall be furnished with a ballot paper on which such person shall record
his or her vote in such manner as shall be determined at the meeting having
regard to the nature of the question on which the vote is taken, and each ballot
paper shall be signed or initialled or otherwise marked so as to identify the
voter and the registered holder in the case of a proxy. At the conclusion of the
poll, the ballot papers shall be examined and counted by a committee of not less
than two Members or proxy holders appointed by the chairman for the purpose and
the result of the poll shall be declared by the chairman.
45. Seniority of joint holders voting
In the case of joint holders the vote of the senior who tenders a
vote, whether in person or by proxy, shall be accepted to the exclusion of the
votes of the other joint holders, and for this purpose seniority shall be
determined by the order in which the names stand in the Register of Members.
46. Instrument of proxy
The instrument appointing a proxy shall be in writing in the form, or
as near thereto as circumstances admit, of Form "A" in the Schedule hereto,
under the hand of the appointor or of the appointor's attorney duly authorised
in writing, or if the appointor is a corporation, either under its seal, or
under the hand of a duly authorised officer or attorney. The decision of the
chairman of any general meeting as to the validity of any instrument of proxy
shall be final.
47. Representation of corporations at meetings
A corporation which is a Member may, by written instrument, authorise
such person as it thinks fit to act as its representative at any meeting of the
Members and the person so authorised shall be entitled to exercise the same
powers on behalf of the corporation which such person represents as that
corporation could exercise if it were an individual Member. Notwithstanding the
foregoing, the chairman of the meeting may accept such assurances as he or she
thinks fit as to the right of any person to attend and vote at general meetings
on behalf of a corporation which is a Member.
SHARE CAPITAL AND SHARES
48. Rights of shares
(1) The share capital of the Company shall be divided into two
classes: (a) 12,000 common shares with a par value of US$1.00 per share (the
"Common Shares") and, (b) 12,001 preference shares with a par value of
US$.01666527789 per share (the "Preference Shares").
(2) The holders of the Common Shares shall, subject to the provisions
of these Bye-laws:
(a) be entitled to one vote per share and, for so long as the
Preference Shares are entitled to vote, to vote with the
Preference Shares as if they were a single class, in all
matters, including discontinuation, except as otherwise
provided in these Bye-laws;
(b) be entitled to such dividends as the Board may from time to
time declare;
(c) in the event of a winding-up or dissolution of the Company,
whether voluntary or involuntary or for the purpose of a
reorganisation or otherwise or upon any distribution of
capital, be entitled to the surplus assets of the Company;
and
(d) generally be entitled to enjoy all of the rights attaching
to shares of the Company.
(3) The holders of the Preference Shares shall, subject to the
provisions of these Bye-laws:
(a) prior to the occurrence of the Redemption Condition, be entitled
to one vote per share and to vote with the Common Shares as if they were a
single class in all matters, including discontinuation, except as otherwise
provided in these Bye-laws, PROVIDED THAT upon the occurrence of the Redemption
Condition, the Preference Shares shall immediately cease to have any voting
rights regardless of whether the Company has given notice of any meeting of
Members;
(b) not be entitled to dividends or other distributions or otherwise
participate in the profits of the Company;
(c) in the event of a winding-up or dissolution of the Company,
whether voluntary or involuntary or for the purpose of a reorganisation or
otherwise or upon any distribution of capital, be entitled solely to the par
value per share of the Preference Shares in priority to any payment to the
holders of the Common Shares;
(d) the Preference Shares shall only be held by BCI Investments and
shall not be transferred to any Person other than (i) Telecom Americas Ltd., or
its successors and assigns, or (ii) to a Permitted Transferee of BCI Investments
holding Telecom Americas Shares transferred to it pursuant to and in accordance
with Section 4.05 of the Joint Venture Shareholders Agreement (PROVIDED THAT
such Permitted Transferee shall be permitted to hold Preference Shares only for
so long as it continues to hold Telecom Americas Shares and remains a Permitted
Transferee of BCI Investments).
49. Redemption of Preference Shares
(1) Upon the occurrence of the Redemption Condition, the Company
shall redeem all, but not less than all, of the Preference Shares outstanding at
the time of such redemption. On any such redemption, the Company shall pay a
price in cash equal to U.S.$0.01 per share to the Members holding the Preference
Shares. Not more than five days after the occurrence of the Redemption
Condition, the Company shall deliver a written notice to all Members holding
Preference Shares indicating: (i) that it intends to redeem the shares pursuant
to this Bye-law 49, (ii) that payment will be made upon surrender of the
certificates representing the Preference Shares, and (iii) specifying the
consideration to be paid to each holder and the place, manner and date of such
payment and the surrender of the certificates evidencing the Preference Shares,
which shall be within ten days of the date of such notice.
(2) The Members holding the Preference Shares shall surrender the
share certificates representing the Preference Shares to the Company and shall
receive the redemption price in accordance with the written notice delivered by
the Company. Any Preference Shares not surrendered in a timely manner shall be
automatically redeemed by the Company, and the Company shall segregate and hold
in trust the consideration to which such holders are entitled for a period of
six years.
(3) The failure of the Company to redeem the shares upon the
occurrence of the Redemption Condition shall not constitute a waiver of the
Company's right and obligation to redeem the Preference Shares.
50. Power to issue shares
(1) Prior to the redemption of all of the outstanding Preference
Shares pursuant to Bye-law 49, the Board shall not issue any shares, including
any additional Preference Shares or any other class of shares, other than to
Telecom Americas Ltd. and shall not alter the rights of any shares, without an
amendment to these Bye-laws. After all such Preference Shares have been redeemed
or cancelled, and subject to these Bye-laws and to any resolution of the Members
to the contrary and without prejudice to any special rights previously conferred
on the holders of any existing shares or class of shares, the Board shall have
power to issue any unissued shares of the Company on such terms and conditions
as it may determine and any shares or class of shares may be issued with such
preferred, deferred or other special rights or such restrictions, whether in
regard to dividend, voting, return of capital or otherwise as the Company may
from time to time by resolution of the Members prescribe.
(2) The Board shall, in connection with the issue of any share, have
the power to pay such commission and brokerage as may be permitted by law.
(3) The Company shall not give, whether directly or indirectly,
whether by means of loan, guarantee, provision of security or otherwise, any
financial assistance for the purpose of a purchase or subscription made or to be
made by any person of or for any shares in the Company, but nothing in this
Bye-law shall prohibit transactions mentioned in Sections 39A, 39B and 39C of
the Act.
(4) The Company may from time to time issue its shares in fractional
denominations and deal with such fractions to the same extent as its whole
shares and shares in fractional denominations shall have in proportion to the
respective fractions represented thereby all of the rights of whole shares
including (but without limiting the generality of the foregoing) the right to
vote, to receive dividends and distributions and to participate in a winding up.
51. Variation of rights, alteration of share capital and purchase of
shares of the Company
(1) Subject to Bye-laws 9 and 50 and, for the avoidance of doubt,
Bye-law 51(2), and subject to the provisions of Sections 42 and 43 of the Act,
any preference shares may be issued or converted into shares that, at a
determinable date or at the option of the Company, are liable to be redeemed on
such terms and in such manner as the Company before the issue or conversion may
by resolution of the Members determine.
(2) If at any time there are different classes of shares outstanding,
the rights attached to any class (unless otherwise provided by the terms of
issue of the shares of that class) may, in addition to any vote of the Members
or the Board otherwise required for the taking of such action, whether or not
the Company is being wound-up, be varied with the consent in writing of the
holders of three-fourths of the issued shares of that class or with the sanction
of a resolution passed by a majority of the votes cast at a separate general
meeting of the holders of the shares of the class in accordance with Section 47
(7) of the Act. The rights conferred upon the holders of the shares of any class
issued with preferred or other rights shall not, unless otherwise expressly
provided by the terms of issue of the shares of that class, be deemed to be
varied by the creation or issue of further shares ranking pari passu therewith.
(3) The Company may from time to time by resolution of the Members
change the currency denomination of, increase, alter or reduce its share capital
in accordance with the provisions of Sections 45 and 46 of the Act and subject
to Bye-laws 9 and 50 hereof. Where, on any alteration of share capital,
fractions of shares or some other difficulty would arise, the Board may deal
with or resolve the same in such manner as it thinks fit including, without
limiting the generality of the foregoing, the issue to Members, as appropriate,
of fractions of shares and/or arranging for the sale or transfer of the
fractions of shares of Members.
(4) Except for the redemption of the Preference Shares pursuant to
Bye-law 49 hereof, the Company may not purchase all or any part of its own
shares for so long as the Preference Shares possess voting rights, PROVIDED THAT
at such time as the Preference Shares cease to have any voting rights, the
Company may from time to time purchase its own shares in accordance with the
provisions of Section 42A of the Act.
52. Registered holder of shares
(1) The Company shall be entitled to treat the registered holder of
any share as the absolute owner thereof and accordingly shall not be bound to
recognise any equitable or other claim to, or interest in, such share on the
part of any other person.
(2) Any dividend, interest or other moneys payable in cash in respect
of shares may be paid by cheque or draft sent through the post directed to the
Member at such Member's address in the Register of Members or, in the case of
joint holders, to such person and to such address as the holder or joint holders
may in writing direct. If two or more persons are registered as joint holders of
any shares any one can give an effectual receipt for any dividend paid in
respect of such shares.
53. Death of a joint holder
Where two or more persons are registered as joint holders of a share
or shares then in the event of the death of any joint holder or holders the
remaining joint holder or holders shall be absolutely entitled to the said share
or shares and the Company shall recognise no claim in respect of the estate of
any joint holder except in the case of the last survivor of such joint holders.
54. Share certificates
(1) Every Member shall be entitled to a certificate under the seal of
the Company (or a facsimile thereof) specifying the number and, where
appropriate, the class of shares held by such Member and whether the same are
fully paid up and, if not, how much has been paid thereon. The certificates for
the Common Shares and Preference Shares shall be in the form of Forms "E" and
"F" in the Schedule hereto. The Board may by resolution determine, either
generally or in a particular case, that any or all signatures on certificates
may be printed thereon or affixed by mechanical means.
(2) The Company shall be under no obligation to complete and deliver
a share certificate unless specifically called upon to do so by the person to
whom such shares have been allotted.
(3) If any such certificate shall be proved to the satisfaction of
the Board to have been worn out, lost, mislaid or destroyed the Board may cause
a new certificate to be issued and request an indemnity for the lost certificate
if it sees fit.
(4) The following legend shall be affixed to the share certificates
for the Preference Shares:
THE PREFERENCE SHARES EVIDENCED BY THIS SHARE CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER SET FORTH IN THE BYE-LAWS OF THE COMPANY. NO
REGISTRATION OF TRANSFER OF THESE SHARES WILL BE MADE ON THE BOOKS OF THE
COMPANY OTHER THAN TO (a) Telecom Americas Ltd. and its successors and assigns
or (B) TO A PERMITTED TRANSFEREE OF BCI INVESTMENTS PURSUANT TO AND IN
ACCORDANCE WITH THE BYE-LAWS OF THE COMPANY. THE PREFERENCE SHARES REPRESENTED
BY THIS SHARE CERTIFICATE ARE SUBJECT TO REDEMPTION OR CANCELLATION FOR A PRICE
OF U.S.$0.01 pER SHARE BY THE COMPANY ON THE OCCURRENCE OF CERTAIN CONDITIONS
AND ON THE TERMS SET FORTH IN THE BYE-LAWS of the company.
55. Calls on shares
Subject to Bye-law 9 hereof, the Board may from time to time make
such calls as it thinks fit upon the Members in respect of any monies unpaid on
the shares allotted to or held by such Members and, if a call is not paid on or
before the day appointed for payment thereof, the Member may at the discretion
of the Board be liable to pay the Company interest on the amount of such call at
such rate as the Board may determine, from the date when such call was payable
up to the actual date of payment. The joint holders of a share shall be jointly
and severally liable to pay all calls in respect thereof.
56. Forfeiture of shares
(1) If any Member fails to pay, on the day appointed for payment
thereof, any call in respect of any share allotted to or held by such Member,
the Board may, at any time thereafter during such time as the call remains
unpaid, direct the Secretary to forward to such Member a notice in the form, or
as near thereto as circumstances admit, of Form "B" in the Schedule hereto.
(2) If the requirements of such notice are not complied with, any
such share may at any time thereafter before the payment of such call and the
interest due in respect thereof be forfeited by a resolution of the Board to
that effect, and such share shall thereupon become the property of the Company
and may be disposed of as the Board shall determine.
(3) A Member whose share or shares have been forfeited as aforesaid
shall, notwithstanding such forfeiture, be liable to pay to the Company all
calls owing on such share or shares at the time of the forfeiture and all
interest due thereon.
REGISTER OF MEMBERS
57. Contents of Register of Members
The Board shall cause to be kept in one or more books a Register of
Members and shall enter therein the particulars required by the Act.
58. Inspection of Register of Members
The Register of Members shall be open to inspection at the registered
office of the Company on every business day, subject to such reasonable
restrictions as the Board may impose, so that not less than two hours in each
business day be allowed for inspection. The Register of Members may, after
notice has been given by advertisement in an appointed newspaper to that effect,
be closed for any time or times not exceeding in the whole thirty days in each
year.
59. Determination of record dates
Notwithstanding any other provision of these Bye-laws, the Board may
fix any date as the record date for:
(a) determining the Members entitled to receive any dividend;
and
(b) determining the Members entitled to receive notice of and to
vote at any general meeting of the Company.
TRANSFER OF SHARES
60. Instrument of transfer
(1) An instrument of transfer shall be in the form or as near thereto
as circumstances admit of Form "C" in the Schedule hereto or in such other
common form as the Board may accept. Such instrument of transfer shall be signed
by or on behalf of the transferor and transferee provided that, in the case of a
fully paid share, the Board may accept the instrument signed by or on behalf of
the transferor alone. The transferor shall be deemed to remain the holder of
such share until the same has been transferred to the transferee in the Register
of Members.
(2) The Board may refuse to recognise any instrument of transfer
unless it is accompanied by the certificate in respect of the shares to which it
relates and by such other evidence as the Board may reasonably require to show
the right of the transferor to make the transfer.
61. Restriction on transfer
(1) The Preference Shares shall be issued solely to and held
initially by BCI Investments and shall not be transferred to any other Person
except to either (a) Telecom Americas Ltd. and its successors and assigns or (b)
to a Permitted Transferee of BCI Investments holding Telecom Americas Shares
transferred to it pursuant to and in accordance with Section 4.05 of the Joint
Venture Shareholders Agreement (PROVIDED THAT such Permitted Transferee shall be
permitted to hold Preference Shares only for so long as it continues to hold
Telecom Americas Shares and remains a Permitted Transferee of BCI Investments).
There shall be no restriction on the Sale of the Common Shares.
(2) Except for transfers of Preference Shares permitted under Bye-law
61(1), the Board shall refuse to register the transfer of the Preference Shares.
The Board shall refuse to register a transfer unless all applicable consents,
authorisations and permissions of any governmental body or agency in Bermuda
have been obtained.
(3) If the Board refuses to register a transfer of any share in
accordance with this Bye-law 61, the Secretary shall, within fifteen days after
the date on which the transfer was lodged with the Company, send to the
transferor and transferee notice of the refusal.
62. Transfers by joint holders
The joint holders of any share or shares may transfer such share or
shares to one or more of such joint holders, and the surviving holder or holders
of any share or shares previously held by them jointly with a deceased Member
may transfer any such share to the executors or administrators of such deceased
Member.
TRANSMISSION OF SHARES
63. Representative of deceased Member
In the case of the death of a Member, the survivor or survivors where
the deceased Member was a joint holder, and the legal personal representatives
of the deceased Member where the deceased Member was a sole holder, shall be the
only persons recognised by the Company as having any title to the deceased
Member's interest in the shares. Nothing herein contained shall release the
estate of a deceased joint holder from any liability in respect of any share
which had been jointly held by such deceased Member with other persons. Subject
to the provisions of Section 52 of the Act, for the purpose of this Bye-law,
"legal personal representative" means the executor or administrator of a
deceased Member or such other person as the Board may in its absolute discretion
decide as being properly authorised to deal with the shares of a deceased
Member.
64. Registration on death or bankruptcy
Any person becoming entitled to a share in consequence of the death
or bankruptcy of any Member may be registered as a Member upon such evidence as
the Board may deem sufficient or may elect to nominate some person to be
registered as a transferee of such share, and in such case the person becoming
entitled shall execute in favour of such nominee an instrument of transfer in
the form, or as near thereto as circumstances admit, of Form "D" in the Schedule
hereto. On the presentation thereof to the Board, accompanied by such evidence
as the Board may require to prove the title of the transferor, the transferee
shall be registered as a Member but the Board shall, in either case, have the
same right to decline or suspend registration as it would have had in the case
of a transfer of the share by that Member before such Member's death or
bankruptcy, as the case may be.
DIVIDENDS AND OTHER DISTRIBUTIONS
65. Declaration of dividends by the Board
The Board may, subject to these Bye-laws (including, without
limitation, Bye-law 9) and in accordance with Section 54 of the Act, declare a
dividend to be paid to the Members holding shares entitled to receive such
dividends, in proportion to the number of shares held by them, and such dividend
may be paid in cash or wholly or partly in specie in which case the Board may
fix the value for distribution in specie of any assets.
66. Other distributions
Subject to these Bye-laws (including, without limitation, Bye-law 9),
the Board may declare and make such other distributions (in cash or in specie)
to the Members holding shares entitled to receive such dividends as may be
lawfully made out of the assets of the Company.
67. Reserve fund
Subject to these Bye-laws (including, without limitation, Bye-law 9),
the Board may from time to time before declaring a dividend set aside, out of
the surplus or profits of the Company, such sum as it thinks proper as a reserve
fund to be used to meet contingencies or for equalising dividends or for any
other special purpose.
68. Deduction of Amounts due to the Company
The Board may deduct from the dividends or distributions payable to
any Member all monies due from such Member to the Company on account of calls or
otherwise.
CAPITALISATION
69. Issue of bonus shares
(1) The Board may resolve to capitalise any part of the amount for
the time being standing to the credit of any of the Company's share premium or
other reserve accounts or to the credit of the profit and loss account or
otherwise available for distribution by applying such sum in paying up unissued
shares to be allotted as fully paid bonus shares pro rata to the Members holding
Common Shares.
(2) The Company may capitalise any sum standing to the credit of a
reserve account or sums otherwise available for dividend or distribution by
applying such amounts in paying up in full partly paid shares of those Members
who would have been entitled to such sums if they were distributed by way of
dividend or distribution.
ACCOUNTS AND FINANCIAL STATEMENTS
70. Records of account
The Board shall cause to be kept proper records of account in
accordance with United States generally accepted accounting principles with
respect to all transactions of the Company and in particular with respect to:
(a) all sums of money received and expended by the Company and
the matters in respect of which the receipt and expenditure
relates;
(b) all sales and purchases of goods by the Company; and
(c) the assets and liabilities of the Company.
Such records of account shall be kept at the registered office of the Company
or, subject to Section 83 (2) of the Act, at such other place as the Board
thinks fit and shall be available for inspection by the Directors during normal
business hours.
71. Financial year end
The financial year end of the Company may be determined by resolution
of the Board and failing such resolution shall be the 31st December in each
year.
72. Financial statements
Subject to any rights to waive laying of accounts pursuant to Section
88 of the Act, financial statements as required by the Act shall be laid before
the Members in general meeting.
AUDIT
73. Appointment of Auditor
Subject to Section 88 of the Act, at the annual general meeting or at
a subsequent special general meeting in each year, an independent representative
of the Members shall be appointed by them as Auditor of the accounts of the
Company. Such Auditor may be a Member but no Director, Officer or employee of
the Company shall, during his or her continuance in office, be eligible to act
as an Auditor of the Company.
74. Remuneration of Auditor
The remuneration of the Auditor shall be fixed by the Company in
general meeting or in such manner as the Members may determine.
75. Vacation of office of Auditor
If the office of Auditor becomes vacant by the resignation or death
of the Auditor, or by the Auditor becoming incapable of acting by reason of
illness or other disability at a time when the Auditor's services are required,
the Board shall, as soon as practicable, convene a special general meeting to
fill the vacancy thereby created.
76. Access to books of the Company
The Auditor shall at all reasonable times have access to all books
kept by the Company and to all accounts and vouchers relating thereto, and the
Auditor may call on the Directors or Officers of the Company for any information
in their possession relating to the books or affairs of the Company.
77. Report of the Auditor
(1) Subject to any rights to waive laying of accounts or appointment
of an Auditor pursuant to Section 88 of the Act, the accounts of the Company
shall be audited at least once in every year.
(2) The financial statements provided for by these Bye-laws shall be
audited by the Auditor in accordance with United States generally accepted
auditing standards. The Auditor shall make a written report thereon in
accordance with generally accepted auditing standards and the report of the
Auditor shall be submitted to the Members in general meeting.
(3) The generally accepted auditing standards referred to in
subparagraph (2) of this Bye-law may be those of a country or jurisdiction other
than Bermuda. If so, the financial statements and the report of the Auditor must
disclose this fact and name such country or jurisdiction.
NOTICES
78. Notices to Members of the Company
A notice may be given by the Company to any Member either by
delivering it to such Member in person or by sending it to such Member's address
in the Register of Members or to such other address given for the purpose. For
the purposes of this Bye-law, a notice may be sent by mail, courier service,
cable, telex, telecopier, facsimile or other mode of representing words in a
legible and non-transitory form.
79. Notices to joint Members
Any notice required to be given to a Member shall, with respect to
any shares held jointly by two or more Persons, be given to each of such
Persons.
80. Service and delivery of notice
Any notice shall be deemed to have been served at the time when the
same would be delivered in the ordinary course of transmission and, in proving
such service, it shall be sufficient to prove that the notice was properly
addressed and prepaid, if posted, and the time when it was posted, delivered to
the courier or to the cable company or transmitted by telex, facsimile or other
method as the case may be.
SEAL OF THE COMPANY
81. The seal
The seal of the Company shall be in such form as the Board may from
time to time determine. The Board may adopt one or more duplicate seals for use
outside Bermuda.
82. Manner in which seal is to be affixed
The seal of the Company shall not be affixed to any instrument
except attested by the signature of a Director and the Secretary or any two
Directors, or any person appointed by the Board for the purpose, provided that
any Director or Officer, may affix the seal of the Company attested by such
Director or Officer's signature to any authenticated copies of these Bye-laws,
the incorporating documents of the Company, the minutes of any meetings or any
other documents required to be authenticated by such Director, Officer or
Resident Representative.
WINDING-UP
83. Winding-up/distribution by liquidator
If the Company shall be wound up the liquidator may, with the
sanction of a resolution of the Members, divide amongst the Members holding
Common Shares in specie or in kind the whole or any part of the assets of the
Company (whether they shall consist of property of the same kind or not) and
may, for such purpose, set such value as he or she deems fair upon any property
to be divided as aforesaid and may determine how such division shall be carried
out as between the Members holding Common Shares. The liquidator may, with the
like sanction, vest the whole or any part of such assets in trustees upon such
trusts for the benefit of the Members holding Common Shares as the liquidator
shall think fit, but so that no Member shall be compelled to accept any shares
or other securities or assets whereon there is any liability.
ALTERATION OF BYE-LAWS
84. Alteration of Bye-laws
No Bye-law shall be rescinded, altered or amended and no new Bye-law
shall be made until the same has been approved by a resolution of the Board in
accordance with Bye-law 9 hereof and by a resolution of the majority of the
Members holding Common Shares voting as a class, and for so long as the
Preference Shares are entitled to voting rights, a resolution of a majority of
the Members holding Preference Shares voting as a class.
******
***
*
<PAGE>
SCHEDULE - FORM A (Bye-law 46)
------------------------------
............................
P R O X Y
---------
I/We
of
the holder(s) of share(s) in the above-named company hereby appoint
......................... or failing him/her ......................... or
failing him/her ................................. as my/our proxy to vote on
my/our behalf at the general meeting of the Company to be held on the day of ,
2000, and at any adjournment thereof.
Dated this day of , 2000
*GIVEN under the seal of the Company
*Signed by the above-named
....................................
....................................
Witness
*Delete as applicable.
<PAGE>
SCHEDULE - FORM B (Bye-law 56)
------------------------------
NOTICE OF LIABILITY TO FORFEITURE FOR NON PAYMENT OF CALL
---------------------------------------------------------
You have failed to pay the call of [amount of call] made on the ...... day
of ........, 2000 last, in respect of the [number] share(s) [numbers in
figures] standing in your name in the Register of Members of the Company,
on the ...... day of ........., 2000 last, the day appointed for payment of
such call. You are hereby notified that unless you pay such call together
with interest thereon at the rate of .......... per annum computed from the
said ....... day of ........., 2000 last, on or before the ....... day of
........., 2000 next at the place of business of the Company the share(s)
will be liable to be forfeited.
Dated this ....... day of .............., 2000
[Signature of Secretary]
By order of the Board
<PAGE>
SCHEDULE - FORM C (Bye-law 60)
------------------------------
TRANSFER OF A SHARE OR SHARES
FOR VALUE RECEIVED .....................................................[amount]
....................................................................[transferor]
hereby sell assign and transfer unto ...............................[transferee]
of.....................................................................[address]
..............................................................[number of shares]
shares of .................................................[name of Company]
Dated .............................
.............................
(Transferor)
In the presence of:
..............................................................
(Witness)
.............................
(Transferee)
In the presence of:
..............................................................
(Witness)
<PAGE>
SCHEDULE - FORM D (Bye-law 64)
------------------------------
TRANSFER BY A PERSON BECOMING ENTITLED ON DEATH/BANKRUPTCY
OF A MEMBER
I/We having become entitled in consequence of the [death/bankruptcy]
of [name of the deceased Member] to [number] share(s) standing in the
register of members of [Company] in the name of the said [name of
deceased Member] instead of being registered myself/ourselves elect
to have [name of transferee] (the "Transferee") registered as a
transferee of such share(s) and I/we do hereby accordingly transfer
the said share(s) to the Transferee to hold the same unto the
Transferee his or her executors administrators and assigns subject to
the conditions on which the same were held at the time of the
execution thereof; and the Transferee does hereby agree to take the
said share(s) subject to the same conditions.
WITNESS our hands this ........ day of ..........., 2000
Signed by the above-named )
[person or persons entitled] )
in the presence of: )
Signed by the above-named )
[transferee] )
in the presence of: )
<PAGE>
TERRITORY OF THE
BRITISH VIRGIN ISLANDS
THE INTERNATIONAL BUSINESS COMPANIES ACT
(CAP. 291)
AMENDED AND RESTATED
ARTICLES OF ASSOCIATION
OF
BELL CANADA INTERNATIONAL BVI V LIMITED
<PAGE>
TABLE OF CONTENTS
1. Interpretation........................................................1
2. Board of Directors....................................................7
3. Management of the Company.............................................8
4. Power to authorise specific actions;
Power to delegate to a Committee......................................8
5. Power to appoint attorney.............................................9
6. Power to appoint and dismiss employees................................9
7. Power to borrow and charge property...................................9
8. Exercise of power to purchase shares
of or discontinue the Company........................................10
9. Board Decision on Qualified Matters..................................10
10. Election of Directors................................................12
11. Defects in appointment of Directors..................................13
12. Alternate Directors..................................................13
13. Removal of Directors.................................................14
14. Vacancies on the Board...............................................15
15. Notice of meetings of the Board......................................16
16. Quorum at meetings of the Board......................................16
17. Meetings of the Board................................................16
18. Unanimous written resolutions........................................17
19. Contracts and disclosure of Directors' interests.....................17
20. Remuneration of Directors............................................18
21. Officers of the Company..............................................18
22. Appointment of Officers..............................................18
23. Remuneration of Officers.............................................18
24. Duties of Officers...................................................19
25. Chairman of meetings.................................................19
26. Register of Directors and Officers...................................19
27. Obligations of Board to keep minutes.................................19
28. Indemnification of Directors and
Officers of the Company..............................................20
29. Waiver of claim by Member............................................21
30. Intentionally Omitted..................................................
31. Notice of general meetings...........................................21
32. Accidental omission of notice of general meeting.....................21
33. Meeting called on requisition of Members.............................22
34. Short notice.........................................................22
35. Postponement of meetings.............................................22
36. Quorum for general meeting...........................................23
37. Adjournment of meetings..............................................23
38. Attendance at meetings...............................................23
39. Written resolutions..................................................24
40. Attendance of Directors..............................................25
41. Voting at meetings...................................................25
42. Voting on show of hands..............................................26
43. Decision of chairman.................................................27
44. Demand for a poll....................................................27
45. Seniority of joint holders voting....................................29
46. Instrument of proxy..................................................29
47. Representation of corporations at meetings...........................29
48. Intentionally Omitted..................................................
49. Intentionally Omitted..................................................
50. Power to issue shares................................................30
51. Variation of rights, alteration of share
capital and purchase of shares of the Company........................31
52. Registered holder of shares..........................................32
53. Death of a joint holder..............................................32
54. Share certificates...................................................33
55. Intentionally Omitted..................................................
56. Forfeiture of shares.................................................34
57. Contents of Register of Members......................................35
58. Inspection of Register of Members....................................35
59. Determination of record dates........................................35
60. Instrument of transfer...............................................35
61. Restriction on transfer..............................................36
62. Transfers by joint holders...........................................36
63. Representative of deceased Member....................................36
64. Registration on death or bankruptcy..................................37
65. Declaration of dividends by the Board................................37
66. Other distributions..................................................37
67. Reserve fund.........................................................37
68. Deduction of Amounts due to the Company..............................38
69. Issue of bonus shares................................................38
70. Records of account...................................................38
71. Financial year end...................................................39
72. Financial statements.................................................39
73. Appointment of Auditor...............................................39
74. Remuneration of Auditor..............................................39
75. Vacation of office of Auditor........................................40
76. Access to books of the Company.......................................40
77. Report of the Auditor................................................40
78. Notices to Members of the Company....................................41
79. Notices to joint Members.............................................41
80. Service and delivery of notice.......................................41
81. The seal.............................................................41
82. Manner in which seal is to be affixed................................42
83. Winding-up/distribution by liquidator................................42
<PAGE>
INTERPRETATION
1. Interpretation
(1) In these Articles of Association the following words and
expressions shall, where not inconsistent with the context, have
the following meanings respectively:
(a) "Act" means the International Business Companies Act, 1984
as amended from time to time;
(b) "Affiliate" means, with respect to any specified Person, any
other Person that directly, or indirectly through one or
more intermediaries, Controls or is Controlled by, or is
under Common Control with, such specified Person;
(c) "Alternate Director" means an alternate Director appointed
in accordance with these Articles of Association;
(d) "AM Latin America" means AM Latin America, LLC, a limited
liability company incorporated under the laws of the State
of Delaware;
(e) "Auditor" includes any individual or partnership;
(f) "BCI Investments" means Bell Canada International
Investments Limited, a company incorporated under the laws
of the British Virgin Islands;
(g) "BCI" means Bell Canada International, Inc., a corporation
organised under the laws of Canada;
(h) "Board" means the Board of Directors appointed or elected
pursuant to these Articles of Association and acting by
resolution in accordance with the Act and these Articles of
Association or the Directors present at a meeting of
Directors at which there is a quorum;
(i) "Capital Stock" means, with respect to any Person at any
time, any and all shares, interests, participations or other
equivalents (however designated, whether voting or
non-voting) of capital, capital stock, partnership interests
(whether general or limited), membership interests or
equivalent ownership interests in or issued by such Person;
(j) "Common Shares" shall have the meaning as set forth in
section 8 of the Memorandum;
(k) "Company" means the company for which the Memorandum and
these Articles of Association are approved and confirmed;
(l) "Control" (including the terms "Controlled by" and "under
Common Control with"), with respect to the relationship
between or among two or more Persons, means the possession,
directly or indirectly, or as trustee or executor, of the
power to direct or cause the direction of the affairs or
management of a Person, whether through the ownership of
voting securities, as trustee or executor, by contract or
otherwise, including, without limitation, the ownership,
directly or indirectly, of securities having the power to
elect a majority of the board of directors or similar body
governing the affairs of such Person; PROVIDED THAT a Person
shall not be deemed to Control any Person that is a publicly
traded company if its ownership of voting securities does
not constitute a majority of the voting securities of such
Person;
(m) "Director" means a director of the Company and shall include
an Alternate Director;
(n) "Equity Interests" means, with respect to any Person, all of
the shares of Capital Stock of (or other ownership or profit
interests in) such Person, all of the warrants, options or
other rights for the purchase or acquisition from such
Person of shares of Capital Stock of (or other ownership or
profit interests in) such Person, all of the securities
(including loans, notes, debentures or other debt
instruments) convertible into or exchangeable for shares of
Capital Stock of (or other ownership or profit interests in)
such Person or warrants, rights or options for the purchase
or acquisition from such Person of such shares (or such
other interests), and all of the other ownership or profit
interests in such Person (including, without limitation,
partnership, member or trust interests therein), whether
voting or non-voting;
(o) "Governmental Authority" means, in any applicable
jurisdiction, any federal, provincial, state or local
government, any governmental, regulatory or administrative
authority, agency or commission, or any court or tribunal,
or judicial or arbitral body;
(p) "Indebtedness" means, with respect to any Person, and in the
case of clauses i) through viii) below, whether secured or
unsecured, i) all indebtedness of such Person, whether or
not contingent, for borrowed money, ii) all obligations of
such Person evidenced by notes, bonds, debentures or other
similar instruments, iii) all indebtedness created or
arising under any conditional sale or other title retention
agreement with respect to property acquired by such Person
(even though the rights and remedies of the sellers or
lenders under such agreement in the event of default are
limited to repossession or sale of such property), iv) all
obligations of such Person as lessee under leases that have
been or should be, in accordance with United States
generally accepted accounting principles, recorded as
capital leases, v) all obligations, contingent or otherwise,
of such Person under acceptance, letter of credit or similar
facilities, vi) all obligations of such Person to purchase,
redeem, retire, defease or otherwise acquire for value any
Equity Interests of such Person, valued, in the case of
redeemable preferred stock, at the greater of its voluntary
or involuntary liquidation preference, plus accrued and
unpaid dividends, vii) all obligations of such Person for
the deferred purchase price of property or services (other
than current trade payables incurred in the ordinary course
of business), viii) all obligations of such Person in
respect of interest rate swaps, caps or collar agreements or
similar arrangements, and ix) all indebtedness of others
referred to in clauses i) through ii) above guaranteed
directly or indirectly in any manner by such Person or
secured by any security interest, pledge, mortgage, lien
(including, without limitation, environmental and tax
liens), charge, encumbrance or adverse claim, on property
(including accounts and contract rights) owned by such
Person;
(q) "Intermediate Company" means any Person (other than a
Regulated Opco) that is a Subsidiary or Minority Investee of
the Company;
(r) "Joint Venture Shareholder" means each of BCI Investments,
AM Latin America and SBCI Brazil Holding, and each other
Person that becomes a party to the Joint Venture
Shareholders Agreement, as such agreement may be amended
from time to time in accordance with the terms thereof;
(s) "Joint Venture Shareholders Agreement" shall mean the
Shareholders Agreement dated as of November 16, 2000 among
BCI Investments, AM Latin America, SBCI Brazil Holding and
Telecom Americas Ltd. as amended from time to time pursuant
to the terms thereof;
(t) "Joint Venture Sponsor Party" means, in the case of SBCI
Brazil Holding, SBC Communications, Inc.; in the case of AM
Latin America, America Movil, S.A. de C.V.; in the case of
BCI Investments, BCE Inc. and, with respect to any other
Joint Venture Shareholder, the ultimate parent company of
such Joint Venture Shareholder;
(u) "Member" means the Person or Persons registered in the
Register of Members as the holder of shares in the Company
or all of such Persons as the context so requires;
(v) "Memoradum" means the Memorandum of Association of the
Company;
(w) "Minority Investee" means any Person (other than a
Subsidiary of the Company) in which the Company, directly or
indirectly, holds an Equity Interest;
(x) "Notice" means written notice as further defined in these
Articles of Association unless otherwise specifically
stated;
(y) "Officer" means any person appointed by the Board to hold an
office in the Company;
(z) "Permitted Transferee" means, with respect to BCI
Investments, any Person (a "transferee") with respect to
which BCE, Inc. maintains a majority economic and voting
interest; PROVIDED THAT no such Person shall be deemed to be
a Permitted Transferee if any Person other than BCE, Inc. is
permitted, by contract or otherwise, to direct or influence
the exercise of such transferee of any rights under the
Joint Venture Shareholders Agreement, including, without
limitation, rights pursuant to Section 3.08 thereunder;
PROVIDED, FURTHER, THAT BCI Investments and BCE, Inc. comply
with their respective obligations set forth in Section 4.05
of the Joint Venture Shareholders Agreement;
(aa) "Person" means any individual, partnership, firm, limited
liability company, corporation, association, trust,
unincorporated organization or other entity, as well as any
syndicate or group that would be deemed to be a person under
section 13(d)(3) of the U.S. Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated
by the U.S. Securities and Exchange Commission thereunder;
(bb) "Preferred Shares" shall have the meaning as set forth in
section 8 of the Memorandum;
(cc) "Qualified Matter" shall have the meaning set forth in
Regulation 9;
(dd) "Redemption Condition" shall mean the occurrence of any of
the following: (i) receipt by Telecom Americas Ltd., the
Company or any of the Company's Minority Investees,
Subsidiaries or Affiliates of the approval by Agencia
Nacional de Telecomunicacoes of Brazil ("ANATEL") under
Resolution 101 of such agency or any successor regulation
thereto which effectively permits the Member or Members
holding Common Shares to Control the Company; (ii) a change
in applicable Brazilian regulations or laws that results in
such approval no longer being required in the opinion of the
Board, (iii) the delivery to the Company of a notice signed
by, or on behalf of, the Member or Members holding a
majority of the Common Shares stating that, in its or their
reasonable judgment, the redemption of 100% of the Preferred
Shares of the Company as contemplated herein without
ANATEL's approval will not result in a violation of
Resolution 101 of such agency or any successor regulation
thereto; (iv) the Sale of the Preferred Shares by BCI
Investments (or by any Permitted Transferee of BCI
Investments) to any party other than (a) Telecom Americas
Ltd. or its successors and assigns or (b) a Permitted
Transferee of BCI Investments holding Telecom Americas
Shares transferred to it pursuant to and in accordance with
Section 4.05 of the Joint Venture Shareholders Agreement,
and (v) BCE, Inc. shall fail to hold directly or indirectly
legal and beneficial ownership of a majority of the issued
and outstanding Capital Stock and Equity Interests, of BCI
Investments or of any Person holding Preferred Shares;
(ee) "Register of Directors and Officers" means the Register of
Directors and Officers referred to in these Articles of
Association;
(ff) "Register of Members" means the Register of Members referred
to in these Articles of Association;
(gg) "Regulated Opcos" means Americel S.A., a corporation
(sociedade por acoes) organized under the laws of Brazil,
Canbras Participacoes Ltda., a corporation (sociedad por
quotas de responsabilidade limitada) organized under the
laws of Brazil, Comunicacion Celular S.A., Comcel S.A., a
corporation (sociedad anonima) organized under the laws of
Colombia, Telet S.A., a corporation (sociedade por acoes)
organized under the laws of Brazil, TV Mogno Ltda., a
corporation (sociedade por quotas de responsabilidade
limitada) organized under the laws of Brazil, TV Eucalipto
Ltda., a corporation (sociedade por quotas de
responsabilidade limitada) organized under the laws of
Brazil, TVA Jacaranda Ltda., a corporation (sociedade por
quotas de responsabilidade limitada) organized under the
laws of Brazil, Walberg Comunicacoes Ltda., a corporation
(sociedade por quotas de responsabilidade limitada)
organized under the laws of Brazil; provided, however, that
each such Person shall cease to be deemed a Regulated Opco
upon expiration or termination of applicable contractual or
regulatory requirements restricting the transfer of control
of such Person and, in the case of regulatory requirements,
upon approval by the relevant Governmental Authorities of
the transfer of control of such Person to the Company;
(hh) "Resident Representative" means any person appointed to act
as resident representative and includes any deputy or
assistant resident representative;
(ii) "Sale" means any sale, assignment, transfer, distribution or
other disposition of shares of the Company or of a
participation, including the grant of an irrevocable option
or put in respect of shares of the Company, or other rights
therein, whether voluntarily or by operation of law;
(jj) "SBCI Brazil Holding" means SBC International - Brazil
Holding, Ltd., a company incorporated under the laws of the
Cayman Islands;
(kk) "Secretary" means the person appointed to perform any or all
the duties of secretary of the Company and includes any
deputy or assistant secretary;
(ll) "Subsidiary" of any Person means any other Person of which
(a) the first mentioned Person or any Subsidiary thereof is
the general partner, (b) voting power to elect a majority of
the board of directors or others performing similar
functions with respect to such other Person is held by the
first mentioned Person and/or by any one or more of its
Subsidiaries, or (c) more than 50% of the voting Equity
Interests of such other Person is, directly or indirectly,
owned or Controlled by such first mentioned Person and/or by
one or more of its Subsidiaries;
(mm) "Telecom Americas Shares" means (i) voting shares, par value
US$1.00 per share, and (ii) preferred shares, Series C, par
value US$1.00 per share, in each case of Telecom Americas
Ltd., a company incorporated under the laws of Bermuda
(2) In these Articles of Association, where not inconsistent with the
context:
(a) words denoting the plural number include the singular number
and vice versa;
(b) words denoting the masculine gender include the feminine
gender;
(c) words importing persons include companies, associations or
bodies of persons whether corporate or not;
(d) the word:
(i) "may" shall be construed as permissive;
(ii) "shall" shall be construed as imperative; and
(e) unless otherwise provided herein words or expressions
defined in the Act shall bear the same meaning in these
Articles of Association.
(3) Expressions referring to writing or written shall, unless the
contrary intention appears, include facsimile, printing,
lithography, photography and other modes of representing words in
a visible form.
(4) Headings used in these Articles of Association are for
convenience only and are not to be used or relied upon in the
construction hereof.
BOARD OF DIRECTORS
2. Board of Directors
The business of the Company shall be managed and conducted by the
Board.
3. Management of the Company
(1) Subject to Regulation 9, in managing the business of the Company,
the Board may exercise all such powers of the Company as are not,
by statute or by these Articles of Association, required to be
exercised by the Company in general meeting subject,
nevertheless, to these Articles of Association, the provisions of
any statute and to such directions as may be prescribed by the
Company in general meeting.
(2) No regulation or alteration to these Articles of Association made
by the Company in general meeting shall invalidate any prior act
of the Board which would have been valid if that regulation or
alteration had not been made.
(3) The Board may procure that the Company pays all expenses incurred
in promoting and incorporating the Company.
4. Power to authorise specific actions; Power to delegate to a Committee
(1) Subject to Regulation 9, the Board may from time to time and at
any time authorise any company, firm, person or body of persons
to act on behalf of the Company for any specific purpose and in
connection therewith to execute any agreement, document or
instrument on behalf of the Company.
(2) The Board shall not delegate any of its powers to a committee.
5. Power to appoint attorney
Subject to Regulation 9, the Board may from time to time and at any
time by power of attorney appoint any company, firm, person or body
of persons, whether nominated directly or indirectly by the Board, to
be an attorney of the Company for such purposes and with such powers,
authorities and discretions (not exceeding those vested in or
exercisable by the Board) and for such period and subject to such
conditions as it may think fit and any such power of attorney may
contain such provisions for the protection and convenience of persons
dealing with any such attorney as the Board may think fit and may
also authorise any such attorney to sub-delegate all or any of the
powers, authorities and discretions so vested in the attorney. Such
attorney may, if so authorised under the seal of the Company, execute
any deed or instrument under such attorney's personal seal with the
same effect as the affixation of the seal of the Company.
6. Power to appoint and dismiss employees
The Board may appoint, suspend or remove any manager, secretary,
clerk, agent or employee of the Company and may fix their
remuneration and determine their duties.
7. Power to borrow and charge property
Subject to Regulation 9, the Board may exercise all the powers of the
Company to borrow money and to mortgage or charge its undertaking,
property and uncalled capital, or any part thereof, and may issue
debentures, debenture stock and other securities whether outright or
as security for any debt, liability or obligation of the Company or
any third party.
<PAGE>
8. Exercise of power to purchase shares of or discontinue the Company
(1) Except for the redemption of the Preferred Shares pursuant to the
Memorandum, the Company shall not purchase all or any part of its
own shares for so long as the Preferred Shares are entitled to
vote, PROVIDED THAT at such time as the Preferred Shares cease to
have any voting rights, the Board may exercise all the powers of
the Company to purchase all or any part of its own shares
pursuant to Section 33 of the Act.
(2) Subject to Regulation 9 hereof, the Board may exercise all the
powers of the Company to discontinue the Company to a named
country or jurisdiction outside the British Virgin Islands
pursuant to Section 84 of the Act.
9. Board Decision on Qualified Matters
Notwithstanding anything to the contrary in these Articles of
Association and notwithstanding that no vote may be required, or that
a lesser percentage vote may be required, by Law or otherwise, the
Company shall not take any action with respect to the following
actions (each a "Qualified Matter"), without a vote of the majority
of Directors, which majority shall include the affirmative vote of
the Director elected by the Members holding Common Shares:
(a) a public offering of the Capital Stock of the Company or any
Intermediate Company;
(b) the issuance or sale of any Capital Stock of the Company;
(c) the issuance or sale of any notes, bonds, debt instruments
or other securities, or any option, warrant or other right
to acquire the same, of, or any other interest in, the
Company or any Intermediate Company, or any securities of
any type whatsoever that are, or may become, convertible
into or exchangeable or exercisable for Capital Stock of the
Company or any Intermediate Company;
(d) the amalgamation, consolidation, or merger of the Company or
any Intermediate Company into or with any other Person, the
consolidation with any Person by the Company or any
Intermediate Company, or the sale, reorganization or
restructuring of the Company or any Intermediate Company (or
any similar transaction);
(e) the acquisition of assets or businesses of any Person by the
Company or any Intermediate Company the purchase price for
which exceeds US$100 million or which would be reasonably
likely to delay the occurrence of the Redemption Condition;
(f) the sale, assignment, transfer, lease, sublease, charge,
mortgage, pledge, grant of security interest in, sublicense
or other disposition of any material license of the Company
or any Intermediate Company;
(g) the sale, assignment, transfer, lease, sublease, mortgage,
pledge, grant of security interest in, license or other
disposition of any assets of the Company or any Intermediate
Company the value of which exceeds US$50 million;
(h) any incurrence, assumption or issuance by the Company or any
Intermediate Company of Indebtedness (A) if, after giving
effect to such incurrence, assumption or issuance (including
the application of the net proceeds therefrom), the
Company's or any Intermediate Company's ratio of
Indebtedness to shareholders' equity (based upon book value)
would exceed, as of the date of determination, 2.34:1, or
(B) in excess of US$50 million, (ii) the guaranteeing of any
Indebtedness of any Subsidiary of the Company in excess of
US$50 million, or (iii) the guaranteeing of any Indebtedness
of any other Person;
(i) the entering by the Company or any Intermediate Company into
of any agreement, arrangement or transaction with any
Affiliate of the Company or any Joint Venture Shareholder or
any Affiliate of a Joint Venture Shareholder or Joint
Venture Sponsor Party;
(j) any amendment to the Memorandum or these Articles of
Association or to the Memorandum of Association and Articles
of Association (or similar instruments) of any Intermediate
Company;
(k) the commencement, settlement, payment, discharge or
satisfaction of any litigation, claim, liability or
obligation (absolute, accrued, asserted or unasserted,
contingent or otherwise) by the Company or any Intermediate
Company other than where such litigation, claim, liability
or obligation is only for money damages that does not exceed
US$50 million;
(l) the declaration or payment of dividends or distributions on
or with respect to any Capital Stock of the Company or any
Intermediate Company;
(m) approving any capital expenditure by the Company or any
Intermediate Company which exceeds, individually or in the
aggregate, US$25 million;
(n) approving any matter to be voted upon at any meeting of the
Members of the Company;
(o) instructing the Company with respect to the voting of the
shares of any Intermediate Company held directly or
indirectly by the Company with respect to any matter listed
in clause (a) and clauses (c) through (n) above and clause
(p) below; and
(p) the taking of any action, directly or indirectly, in
contemplation of any of the foregoing; PROVIDED THAT, for
the avoidance of doubt, no such action shall impede the
exercise by any Person that controls any Regulated Opco to
exercise its voting rights with respect to such Regulated
Opco.
10. Election of Directors
The Board shall consist of three Directors. The Members holding
Common Shares shall be entitled to elect one Director so that, at all
times, at least one member of the Board has been elected by the
Members holding Common Shares. The Directors shall be elected or
appointed at a general meeting called for the purpose and shall hold
office for such term as the Members may determine or, in the absence
of such determination, until their successors are elected or
appointed, their resignation or removal in accordance with these
Articles of Association, or their office is otherwise vacated, except
as otherwise provided herein, and any general meeting may authorise
the Board to fill any vacancy in their number left unfilled at a
general meeting, PROVIDED THAT the Members holding Common Shares
shall be entitled to elect a Director to fill a vacancy left unfilled
if such Members have not elected one of the Directors then in office.
11. Defects in appointment of Directors
All acts done bona fide by any meeting of the Board or by any person
acting as a Director shall, notwithstanding that it be afterwards
discovered that there was some defect in the appointment of any
Director or person acting as aforesaid, or that they or any of them
were disqualified, be as valid as if every such person had been duly
appointed and was qualified to be a Director.
12. Alternate Directors
(1) Any Director may appoint a person or persons to act as a Director
in the alternative to himself or herself by notice in writing
deposited with the Secretary. An Alternate Director appointed by
a Director elected by the Members holding Common Shares shall be
considered a Director elected by the Members holding Common
Shares for purposes of these Articles of Association. Any person
so appointed shall have all the rights and powers of the Director
or Directors for whom such person is appointed in the alternative
provided that such person shall not be counted more than once in
determining whether or not a quorum is present.
(2) An Alternate Director shall be entitled to receive notice of all
meetings of the Board and to attend and vote at any such meeting
at which a Director for whom such Alternate Director was
appointed in the alternative is not personally present and
generally to perform at such meeting all the functions of such
Director for whom such Alternate Director was appointed.
(3) An Alternate Director shall cease to be such if the Director for
whom such Alternate Director was appointed ceases for any reason
to be a Director but may be re-appointed by the Board as
alternate to the person appointed to fill the vacancy in
accordance with these Articles of Association.
13. Removal of Directors
(1) Prior to the occurrence of the Redemption Condition and subject
to any provision to the contrary in these Articles of
Association, Members may at any general meeting convened and held
in accordance with these Articles of Association, remove a
Director by a majority vote, or in the case of a Director elected
by the Members holding Common Shares, by a majority vote of the
Common Shares, PROVIDED THAT the notice of any such meeting
convened for the purpose of removing a Director shall contain a
statement of the intention so to do and be served on such
Director not less than 14 days before the meeting and at such
meeting such Director shall be entitled to be heard on the motion
for such Director's removal.
(2) Notwithstanding the foregoing, at any time after the occurrence
of the Redemption Condition, the Members holding Common Shares
may, at any general meeting convened and held in accordance with
these Articles of Association, remove any Director by a majority
vote of the Common Shares, PROVIDED THAT the notice of any such
meeting convened for the purpose of removing a Director shall
contain a statement of the intention so to do and be served on
such Director not less than 14 days before the meeting and at
such meeting such Director shall be entitled to be heard on the
motion for such Director's removal.
(3) A vacancy on the Board created by the removal of a Director under
the provisions of clause (1) or clause (2) of this Regulation may
be filled by the Members at the meeting at which such Director is
removed and, in the absence of such election or appointment, the
Board may fill the vacancy, PROVIDED THAT the Members holding
Common Shares shall be entitled to elect any such Director if
such Members have not elected one of the Directors then in
office.
14. Vacancies on the Board
(1) The Board shall have the power from time to time and at any time
to appoint any person as a Director to fill a vacancy on the
Board occurring as the result of the death, disability,
disqualification or resignation of any Director and to appoint an
Alternate Director to any Director so appointed, PROVIDED THAT
the Members holding Common Shares shall be entitled to elect a
Director to fill such a vacancy if such Members have not elected
one of the Directors then in office.
(2) The Board may act notwithstanding any vacancy in its number but,
if and so long as its number is reduced below the number fixed by
these Articles of Association as the quorum necessary for the
transaction of business at meetings of the Board, the continuing
Directors or Director may act for the purpose of (i) summoning a
general meeting of the Company or (ii) preserving the assets of
the Company.
(3) The office of Director shall be vacated if the Director:-
(a) is removed from office pursuant to these Articles of
Association or is prohibited from being a Director by law;
(b) is or becomes bankrupt or makes any arrangement or
composition with his creditors generally;
(c) is or becomes of unsound mind or dies; or
(d) resigns his or her office by notice in writing to the
Company.
15. Notice of meetings of the Board
(1) A Director may, and the Secretary on the requisition of a
Director shall, at any time summon a meeting of the Board on
not less than three days notice.
(2) Notice of a meeting of the Board shall be deemed to be duly
given to a Director if it is given to such Director verbally
in person or by telephone or otherwise communicated or sent
to such Director by post, cable, telex, telecopier,
facsimile or other mode of representing words in a legible
and non-transitory form at such Director's last known
address or any other address given by such Director to the
Company for this purpose.
16. Quorum at meetings of the Board
The quorum necessary for the transaction of business at a meeting of
the Board shall be two Directors, at least one of which shall be a
director elected by the Members holding Common Shares.
17. Meetings of the Board
(1) The Board may meet for the transaction of business, adjourn and
otherwise regulate its meetings as it sees fit.
(2) Directors may participate in any meeting of the Board by means of
such telephone, electronic or other communication facilities as
permit all persons participating in the meeting to communicate
with each other simultaneously and instantaneously, and
participation in such a meeting shall constitute presence in
person at such meeting.
(3) Except as otherwise provided in these Articles of Association, a
resolution put to the vote at a meeting of the Board shall be
carried by the affirmative votes of a majority of the votes cast
and in the case of an equality of votes the resolution shall
fail.
18. Unanimous written resolutions
A resolution in writing signed by all the Directors which may be in
counterparts, shall be as valid as if it had been passed at a meeting
of the Board duly called and constituted, such resolution to be
effective on the date on which the last Director signs the
resolution. For the purposes of this Regulation only, "Director"
shall not include an Alternate Director.
19. Contracts and disclosure of Directors' interests
(1) Any Director, or any Director's firm, partner or any company with
whom any Director is associated, may act in a professional
capacity for the Company and such Director or such Director's
firm, partner or such company shall be entitled to remuneration
for professional services as if such Director were not a
Director, PROVIDED THAT nothing herein contained shall authorise
a Director or Director's firm, partner or such company to act as
Auditor of the Company.
(2) A Director who is directly or indirectly interested in a contract
or proposed contract or arrangement with the Company shall
declare the nature of such interest as required by the Act.
(3) Following a declaration being made pursuant to this Regulation,
and unless disqualified by the chairman of the relevant Board
meeting, a Director may vote in respect of any contract or
proposed contract or arrangement in which such Director is
interested and may be counted in the quorum at such meeting.
20. Remuneration of Directors
The remuneration (if any) of the Directors shall be determined by the
Company in general meeting and shall be deemed to accrue from day to
day. The Directors may also be paid all travel, hotel and other
expenses properly incurred by them in attending and returning from
meetings of the Board, any committee appointed by the Board, general
meetings of the Company, or in connection with the business of the
Company or their duties as Directors generally.
OFFICERS
21. Officers of the Company
The Officers of the Company shall consist of such Officers as the
Board may from time to time determine, all of whom shall be deemed to
be Officers for the purposes of these Articles of Association.
22. Appointment of Officers
The Board may appoint such persons as it may from time to time
determine as Officers.
23. Remuneration of Officers
The Officers shall receive such remuneration as the Board may from
time to time determine.
24. Duties of Officers
The Officers shall have such powers and perform such duties in the
management, business and affairs of the Company as may be delegated
to them by the Board from time to time.
25. Chairman of meetings
Unless otherwise agreed by a majority of those attending and entitled
to attend and vote thereat, the President, if any, shall act as
chairman at all meetings of the Members and of the Board at which
such person is present. In his or her absence the Vice President, if
any and if present, shall act as chairman and in the absence of both
of them a chairman shall be appointed or elected by those present at
the meeting and entitled to vote. For the sake of clarity, nothing in
this Regulation shall be interpreted to authorize anyone other than a
Director or Member to vote at a meeting of the Board or Members, as
applicable.
26. Register of Directors and Officers
The Board shall cause to be kept in one or more books a Register of
Directors and Officers, shall enter therein the particulars required
by the Act and shall cause a copy of the Register of Directors and
Officers to be kept at the registered office of the Company.
MINUTES
27. Obligations of Board to keep minutes
(1) The Board shall cause minutes to be duly entered in books
provided for the purpose:
(a) of all elections and appointments of Officers;
(b) of the names of the Directors present at each meeting of the
Board and of any committee appointed by the Board; and
(c) of all resolutions and proceedings of general meetings of
the Members, meetings of the Board, meetings of senior
managers and meetings of committees appointed by the Board.
(2) Minutes prepared in accordance with the Act and these Articles of
Association shall be kept by the Secretary.
INDEMNITY
28. Indemnification of Directors and Officers of the Company
The Directors, Secretary and other Officers for the time being acting
in relation to any of the affairs of the Company and the liquidator
or trustees (if any) for the time being acting in relation to any of
the affairs of the Company and every one of them, and their heirs,
executors and administrators, shall be indemnified and secured
harmless out of the assets of the Company from and against all
actions, costs, charges, losses, damages and expenses which they or
any of them, their heirs, executors or administrators, shall or may
incur or sustain by or by reason of any act done, concurred in or
omitted in or about the execution of their duty, or supposed duty, or
in their respective offices or trusts, and none of them shall be
answerable for the acts, receipts, neglects or defaults of the others
of them or for joining in any receipts for the sake of conformity, or
for any bankers or other persons with whom any moneys or effects
belonging to the Company shall or may be lodged or deposited for safe
custody, or for insufficiency or deficiency of any security upon
which any moneys of or belonging to the Company shall be placed out
on or invested, or for any other loss, misfortune or damage which may
happen in the execution of their respective offices or trusts, or in
relation thereto, PROVIDED THAT this indemnity shall not extend to
any matter in respect of any fraud or dishonesty which may attach to
any of said persons.
29. Waiver of claim by Member
Each Member agrees to waive any claim or right of action such Member
might have, whether individually or by or in the right of the
Company, against any Director or Officer on account of any action
taken by such Director or Officer, or the failure of such Director or
Officer to take any action in the performance of his duties with or
for the Company, PROVIDED THAT such waiver shall not extend to any
matter in respect of any fraud or dishonesty which may attach to such
Director or Officer.
MEETINGS
30. Intentionally Omitted
31. Notice of general meetings
The President or any two Directors or any Director and the Secretary
or the Board may convene a general meeting of the Company whenever in
their judgment such a meeting is necessary, upon not less than seven
days' notice which shall state the date, time, place and the general
nature of the business to be considered at the meeting.
32. Accidental omission of notice of general meeting
The accidental omission to give notice of a general meeting to, or
the non-receipt of notice of a general meeting by, any person
entitled to receive notice shall not invalidate the proceedings at
that meeting, provided that the quorum requirements of these Articles
of Association are met.
33. Meeting called on requisition of Members
Notwithstanding anything herein, the Board shall, on the requisition
of Members holding at the date of the deposit of the requisition not
less than one-tenth of such of the paid-up share capital of the
Company as at the date of the deposit carries the right to vote at
general meetings of the Company, forthwith proceed to convene a
general meeting of the Company.
34. Short notice
A general meeting of the Company shall, notwithstanding that it is
called by shorter notice than that specified in these Articles of
Association, be deemed to have been properly called if Members
holding a 90 percent majority of (i) the total number of shares
entitled to vote on all the matters to be considered at the meeting;
or (ii) the votes of each class or series of shares where Members are
entitled to vote thereon as a class or series together with an
absolute majority of the remaining votes, have waived notice of the
meeting; and, for this purpose, the presence of a Member at the
meeting shall be deemed to constitute waiver on his part.
35. Postponement of meetings
The Secretary may postpone any general meeting called in accordance
with the provisions of these Articles of Association (other than a
meeting requisitioned under these Articles of Association) PROVIDED
THAT notice of postponement is given to each Member before the time
for such meeting. Fresh notice of the date, time and place for the
postponed meeting shall be given to each Member in accordance with
the provisions of these Articles of Association.
36. Quorum for general meeting
At any general meeting of the Company, two persons present in Person
and representing in Person or by proxy in excess of both 50% of the
outstanding Common Shares and, prior to the occurrence of the
Redemption Condition, 50% of the outstanding Preferred Shares, if
any, in the Company throughout the meeting shall form a quorum for
the transaction of business, PROVIDED THAT if the Company shall at
any time have only one Member, one Member present in Person or by
proxy shall form a quorum for the transaction of business at any
general meeting of the Company held during such time. If within half
an hour from the time appointed for the meeting a quorum is not
present, the meeting shall stand adjourned to the same day one week
later, at the same time and place or to such other day, time or place
as the Secretary may determine.
37. Adjournment of meetings
The chairman of a general meeting may, with the consent of a majority
of the Members at any general meeting at which a quorum is present
(and shall if so directed by a majority of the Members at such
meeting), adjourn the meeting. Unless the meeting is adjourned to a
specific date and time, fresh notice of the date, time and place for
the resumption of the adjourned meeting shall be given to each Member
in accordance with the provisions of these Articles of Association.
38. Attendance at meetings
Members may participate in any general meeting by means of such
telephone, electronic or other communication facilities as permit all
persons participating in the meeting to communicate with each other
simultaneously and instantaneously, and participation in such a
meeting shall constitute presence in person at such meeting.
39. Written resolutions
(1) Subject to subparagraph (6), anything which may be done by
resolution of the Company in general meeting or by resolution of
a meeting of any class of the Members of the Company, may,
without a meeting and without any previous notice being required,
be done by resolution in writing signed by, or, in the case of a
Member that is a corporation, on behalf of, all the Members who
at the date of the resolution would be entitled to attend the
meeting and vote on the resolution.
(2) A resolution in writing may be signed by, or, in the case of a
Member that is a corporation, on behalf of, all the Members, or
any class thereof, in as many counterparts as may be necessary.
(3) For the purposes of this Regulation, the date of the resolution
is the date when the resolution is signed by, or, in the case of
a Member that is a corporation, on behalf of, the last Member to
sign and any reference in any Regulation to the date of passing
of a resolution is, in relation to a resolution made in
accordance with this Regulation, a reference to such date.
(4) A resolution in writing made in accordance with this Regulation
is as valid as if it had been passed by the Company in general
meeting or by a meeting of the relevant class of Members, as the
case may be, and any reference in any Regulation to a meeting at
which a resolution is passed or to Members voting in favour of a
resolution shall be construed accordingly.
(5) This Regulation shall not apply to a resolution passed for the
purpose of removing a Director before the expiration of his term
of office under these Articles of Association.
40. Attendance of Directors
The Directors of the Company shall be entitled to receive notice of
and to attend and be heard at any general meeting.
41. Voting at meetings
(1) Subject to the provisions of the Act and these Articles of
Association, any question proposed for the consideration of the
Members at any general meeting shall be decided by the
affirmative vote of a majority of the votes cast in accordance
with the provisions of these Articles of Association and in the
case of an equality of votes the resolution shall fail, PROVIDED
THAT, without the affirmative vote of the Common Shares, the
Members shall not take any action with respect to a Qualified
Matter.
(2) Notwithstanding any other provision of these Articles of
Association and notwithstanding that no vote may be required, or
that a lesser percentage vote may be required, by Law or
otherwise, the Company shall take no action with respect to any
of the following without the affirmative vote of a majority of
the Common Shares:
(a) material change in the nature or scope of the business or
corporate strategy of the Company or any Intermediate
Company or the entering into a joint venture or similar
strategic alliance by any thereof with any Person; and
(b) the winding up or dissolution of the Company or any
Intermediate Company; the adoption of a plan of liquidation
of the Company or any Intermediate Company; any action by
the Company or any Intermediate Company to commence any
suit, case, proceeding or other action (i) under any
existing or future law of any jurisdiction relating to
bankruptcy, insolvency, reorganization or relief of debtors
seeking to have an order for relief entered with respect to
the Company or any Intermediate Company, or seeking to
adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with
respect to the Company or any Intermediate Company or (ii)
seeking appointment of a receiver, trustee, custodian or
other similar official for the Company or any Intermediate
Company, or for all or any part of its assets, or making a
general assignment for the benefit of the creditors of the
Company or any Intermediate Company.
(3) No Member shall be entitled to vote at any general meeting unless
such Member has paid up the shares held by such Member. No Member
holding Preferred Shares shall be entitled to vote at any general
meeting after the occurrence of the Redemption Condition, as set
forth in Regulation 48.
42. Voting on show of hands
At any general meeting a resolution put to the vote of the meeting
shall, in the first instance, be voted upon by a show of hands and,
subject to any rights or restrictions for the time being lawfully
attached to any class of shares and subject to the provisions of
these Articles of Association, every Member present in Person and
every person holding a valid proxy at such meeting shall be entitled
to one vote and shall cast such vote by raising his or her hand.
43. Decision of chairman
At any general meeting a declaration by the chairman of the meeting
that a question proposed for consideration has, on a show of hands,
been carried, or carried unanimously, or by a particular majority, or
lost, and an entry to that effect in a book containing the minutes of
the proceedings of the Company shall, subject to the provisions of
these Articles of Association, be conclusive evidence of that fact.
44. Demand for a poll
(1) Notwithstanding the provisions of the immediately preceding two
Regulations, at any general meeting of the Company, in respect of
any question proposed for the consideration of the Members
(whether before or on the declaration of the result of a show of
hands as provided for in these Articles of Association), a poll
may be demanded by any of the following persons:-
(a) the chairman of such meeting; or
(b) at least three Members present in Person or represented by
proxy; or
(c) any Member or Members present in Person or represented by
proxy and holding between them not less than one-tenth of
the total voting rights of all the Members having the right
to vote at such meeting; or
(d) any Member or Members present in Person or represented by
proxy holding shares in the Company conferring the right to
vote at such meeting, being shares on which an aggregate sum
has been paid up equal to not less than one-tenth of the
total sum paid up on all such shares conferring such right.
(2) Where, in accordance with the provisions of subparagraph (1) of
this Regulation, a poll is demanded, subject to any rights or
restrictions for the time being lawfully attached to any class of
shares, every person present at such meeting shall have one vote
for each share entitled to vote of which such person is the
holder, or for which such person holds a proxy, and such vote
shall be counted in the manner set out in sub-paragraph (4) of
this Regulation or in the case of a general meeting at which one
or more Members are present by telephone in such manner as the
chairman of the meeting may direct and the result of such poll
shall be deemed to be the resolution of the meeting at which the
poll was demanded and shall replace any previous resolution upon
the same matter which has been the subject of a show of hands.
(3) A poll demanded in accordance with the provisions of subparagraph
(1) of this Regulation, for the purpose of electing a chairman of
the meeting or on a question of adjournment, shall be taken
forthwith and a poll demanded on any other question shall be
taken in such manner and at such time and place as the President
(or acting chairman) may direct and any business other than that
upon which a poll has been demanded may be proceeded with pending
the taking of the poll.
(4) Where a vote is taken by poll, each person present and entitled
to vote shall be furnished with a ballot paper on which such
person shall record his or her vote in such manner as shall be
determined at the meeting having regard to the nature of the
question on which the vote is taken, and each ballot paper shall
be signed or initialled or otherwise marked so as to identify the
voter and the registered holder in the case of a proxy. At the
conclusion of the poll, the ballot papers shall be examined and
counted by a committee of not less than two Members or proxy
holders appointed by the chairman for the purpose and the result
of the poll shall be declared by the chairman.
45. Seniority of joint holders voting
In the case of joint holders the vote of the senior who tenders a
vote, whether in person or by proxy, shall be accepted to the
exclusion of the votes of the other joint holders, and for this
purpose seniority shall be determined by the order in which the names
stand in the Register of Members.
46. Instrument of proxy
The instrument appointing a proxy shall be in writing in the form, or
as near thereto as circumstances admit, of Form "A" in the Schedule
hereto, under the hand of the appointor or of the appointor's
attorney duly authorised in writing, or if the appointor is a
corporation, either under its seal, or under the hand of a duly
authorised officer or attorney. The decision of the chairman of any
general meeting as to the validity of any instrument of proxy shall
be final.
47. Representation of corporations at meetings
A corporation which is a Member may, by written instrument, authorise
such person as it thinks fit to act as its representative at any
meeting of the Members and the person so authorised shall be entitled
to exercise the same powers on behalf of the corporation which such
person represents as that corporation could exercise if it were an
individual Member. Notwithstanding the foregoing, the chairman of the
meeting may accept such assurances as he or she thinks fit as to the
right of any person to attend and vote at general meetings on behalf
of a corporation which is a Member.
SHARE CAPITAL AND SHARES
48. Intentionally Omitted
49. Intentionally Omitted
50. Power to issue shares
(1) Prior to the redemption of all of the outstanding Preferred
Shares, the Board shall not issue any shares, including any
additional Preferred Shares or any other class of shares, other
than to Telecom Americas Ltd. and shall not alter the rights of
any shares, without an amendment to the Memorandum. After all
such Preferred Shares have been redeemed or cancelled, and
subject to these Articles of Association and to any resolution of
the Members to the contrary and without prejudice to any special
rights previously conferred on the holders of any existing shares
or class of shares, the Board shall have power to issue any
unissued shares of the Company on such terms and conditions as it
may determine and any shares or class of shares may be issued
with such preferred, deferred or other special rights or such
restrictions, whether in regard to dividend, voting, return of
capital or otherwise as the Company may from time to time by
resolution of the Members prescribe.
(2) The Board shall, in connection with the issue of any share, have
the power to pay such commission and brokerage as may be
permitted by law.
(3) The Company may from time to time issue its shares in fractional
denominations and deal with such fractions to the same extent as
its whole shares and shares in fractional denominations shall
have in proportion to the respective fractions represented
thereby all of the rights of whole shares including (but without
limiting the generality of the foregoing) the right to vote, to
receive dividends and distributions and to participate in a
winding up.
51. Variation of rights, alteration of share capital and purchase of
shares of the Company
(1) Subject to Regulations 9 and 50 and, for the avoidance of doubt,
Regulation 51(2), any Preferred Shares may be issued or converted
into shares that, at a determinable date or at the option of the
Company, are liable to be redeemed on such terms and in such
manner as the Company before the issue or conversion may by
resolution of the Members determine.
(2) If at any time there are different classes of shares outstanding,
the rights attached to any class (unless otherwise provided by
the terms of issue of the shares of that class) may, in addition
to any vote of the Members or the Board otherwise required for
the taking of such action, whether or not the Company is being
wound-up, be varied with the consent in writing of the holders of
three-fourths of the issued shares of that class or with the
sanction of a resolution passed by a majority of the votes cast
at a separate general meeting of the holders of the shares of the
class. The rights conferred upon the holders of the shares of any
class issued with preferred or other rights shall not, unless
otherwise expressly provided by the terms of issue of the shares
of that class, be deemed to be varied by the creation or issue of
further shares ranking pari passu therewith.
(3) The Company may from time to time by resolution of the Members
change the currency denomination of, increase, alter or reduce
its authorised share capital in accordance with the provisions of
Section 24 of the Act and subject to Regulations 9 and 50 hereof.
Where, on any alteration of share capital, fractions of shares or
some other difficulty would arise, the Board may deal with or
resolve the same in such manner as it thinks fit including,
without limiting the generality of the foregoing, the issue to
Members, as appropriate, of fractions of shares and/or arranging
for the sale or transfer of the fractions of shares of Members.
(4) Except for the redemption of the Preferred Shares pursuant to the
Memorandum, the Company may not purchase all or any part of its
own shares for so long as the Preferred Shares possess voting
rights, PROVIDED THAT at such time as the Preferred Shares cease
to have any voting rights, the Company may from time to time
purchase its own shares in accordance with the provisions of
Section 33 of the Act.
52. Registered holder of shares
(1) The Company shall be entitled to treat the registered holder of
any share as the absolute owner thereof and accordingly shall not
be bound to recognise any equitable or other claim to, or
interest in, such share on the part of any other person.
(2) Any dividend, interest or other moneys payable in cash in respect
of shares may be paid by cheque or draft sent through the post
directed to the Member at such Member's address in the Register
of Members or, in the case of joint holders, to such person and
to such address as the holder or joint holders may in writing
direct. If two or more persons are registered as joint holders of
any shares any one can give an effectual receipt for any dividend
paid in respect of such shares.
53. Death of a joint holder
Where two or more persons are registered as joint holders of a share
or shares then in the event of the death of any joint holder or
holders the remaining joint holder or holders shall be absolutely
entitled to the said share or shares and the Company shall recognise
no claim in respect of the estate of any joint holder except in the
case of the last survivor of such joint holders.
54. Share certificates
(1) Every Member shall be entitled to a certificate under the seal of
the Company (or a facsimile thereof) specifying the number and,
where appropriate, the class of shares held by such Member and
whether the same are fully paid up and, if not, how much has been
paid thereon. The certificates for the Common Shares and
Preferred Shares shall be in the form of Forms "E" and "F" in the
Schedule hereto. The Board may by resolution determine, either
generally or in a particular case, that any or all signatures on
certificates may be printed thereon or affixed by mechanical
means.
(2) The Company shall be under no obligation to complete and deliver
a share certificate unless specifically called upon to do so by
the person to whom such shares have been allotted.
(3) If any such certificate shall be proved to the satisfaction of
the Board to have been worn out, lost, mislaid or destroyed the
Board may cause a new certificate to be issued and request an
indemnity for the lost certificate if it sees fit.
(4) The following legend shall be affixed to the share certificates
for the Preferred Shares:
THE PREFERRED SHARES EVIDENCED BY THIS SHARE CERTIFICATE ARE
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER SET FORTH IN THE
MEMORANDUM AND ARTICLES OF ASSOCIATION OF THE COMPANY. NO
REGISTRATION OF TRANSFER OF THESE SHARES WILL BE MADE ON THE
BOOKS OF THE COMPANY OTHER THAN TO (A) TELECOM AMERICAS LTD.
AND ITS SUCCESSORS AND ASSIGNS OR (B) TO A PERMITTED
TRANSFEREE OF BCI INVESTMENTS PURSUANT TO AND IN ACCORDANCE
WITH THE MEMORANDUM AND ARTICLES OF ASSOCIATION OF THE
COMPANY. THE PREFERRED SHARES REPRESENTED BY THIS SHARE
CERTIFICATE ARE SUBJECT TO REDEMPTION OR CANCELLATION FOR A
PRICE OF U.S.$0.01 PER SHARE BY THE COMPANY ON THE
OCCURRENCE OF CERTAIN CONDITIONS AND ON THE TERMS SET FORTH
IN THE MEMORANDUM AND ARTICLES OF ASSOCIATION OF THE
COMPANY.
55. Intentionally Omitted
56. Forfeiture of shares
(1) If any Member fails to pay up, on the day appointed for payment
thereof, any share allotted to or held by such Member, the Board
may, at any time thereafter during such time as the call remains
unpaid, direct the Secretary to forward to such Member a notice
in the form, or as near thereto as circumstances admit, of Form
"B" in the Schedule hereto.
(2) If the requirements of such notice are not complied with, any
such share may at any time thereafter before payment and the
interest due in respect thereof be forfeited by a resolution of
the Board to that effect, and such share shall thereupon become
the property of the Company and may be disposed of as the Board
shall determine.
(3) A Member whose share or shares have been forfeited as aforesaid
shall, notwithstanding such forfeiture, be liable to pay to the
Company all calls owing on such share or shares at the time of
the forfeiture and all interest due thereon.
REGISTER OF MEMBERS
57. Contents of Register of Members
The Board shall cause to be kept in one or more books a Register of
Members and shall enter therein the particulars required by the Act.
58. Inspection of Register of Members
The Register of Members shall be open to inspection as required under
the Act.
59. Determination of record dates
Notwithstanding any other provision of these Articles of Association,
the Board may fix any date as the record date for:
(a) determining the Members entitled to receive any dividend; and
(b) determining the Members entitled to receive notice of and to vote
at any general meeting of the Company.
TRANSFER OF SHARES
60. Instrument of transfer
(1) An instrument of transfer shall be in the form or as near thereto
as circumstances admit of Form "C" in the Schedule hereto or in
such other common form as the Board may accept. Such instrument
of transfer shall be signed by or on behalf of the transferor and
transferee provided that, in the case of a fully paid share, the
Board may accept the instrument signed by or on behalf of the
transferor alone. The transferor shall be deemed to remain the
holder of such share until the same has been transferred to the
transferee in the Register of Members.
(2) The Board may refuse to recognise any instrument of transfer
unless it is accompanied by the certificate in respect of the
shares to which it relates and by such other evidence as the
Board may reasonably require to show the right of the transferor
to make the transfer.
61. Restriction on transfer
(1) The Preferred Shares shall be issued solely to and held initially
by BCI Investments and shall not be transferred to any other
Person except to either (a) Telecom Americas Ltd. and its
successors and assigns or (b) to a Permitted Transferee of BCI
Investments holding Telecom Americas Shares transferred to it
pursuant to and in accordance with Section 4.05 of the Joint
Venture Shareholders Agreement (PROVIDED THAT such Permitted
Transferee shall be permitted to hold Preferred Shares only for
so long as it continues to hold Telecom Americas Shares and
remains a Permitted Transferee of BCI Investments). There shall
be no restriction on the Sale of the Common Shares.
(2) Except for transfers of Preferred Shares permitted under
Regulation 61(1), the Board shall refuse to register the transfer
of the Preferred Shares.
(3) If the Board refuses to register a transfer of any share in
accordance with this Regulation 61, the Secretary shall, within
fifteen days after the date on which the transfer was lodged with
the Company, send to the transferor and transferee notice of the
refusal.
62. Transfers by joint holders
The joint holders of any share or shares may transfer such share or
shares to one or more of such joint holders, and the surviving holder
or holders of any share or shares previously held by them jointly
with a deceased Member may transfer any such share to the executors
or administrators of such deceased Member.
TRANSMISSION OF SHARES
63. Representative of deceased Member
In the case of the death of a Member, the survivor or survivors where
the deceased Member was a joint holder, and the legal personal
representatives of the deceased Member where the deceased Member was
a sole holder, shall be the only persons recognised by the Company as
having any title to the deceased Member's interest in the shares.
Nothing herein contained shall release the estate of a deceased joint
holder from any liability in respect of any share which had been
jointly held by such deceased Member with other persons., For the
purpose of this Regulation, "legal personal representative" means the
executor or administrator of a deceased Member or such other person
as the Board may in its absolute discretion decide as being properly
authorised to deal with the shares of a deceased Member.
64. Registration on death or bankruptcy
Any person becoming entitled to a share in consequence of the death
or bankruptcy of any Member may be registered as a Member upon such
evidence as the Board may deem sufficient or may elect to nominate
some person to be registered as a transferee of such share, and in
such case the person becoming entitled shall execute in favour of
such nominee an instrument of transfer in the form, or as near
thereto as circumstances admit, of Form "D" in the Schedule hereto.
On the presentation thereof to the Board, accompanied by such
evidence as the Board may require to prove the title of the
transferor, the transferee shall be registered as a Member but the
Board shall, in either case, have the same right to decline or
suspend registration as it would have had in the case of a transfer
of the share by that Member before such Member's death or bankruptcy,
as the case may be.
DIVIDENDS AND OTHER DISTRIBUTIONS
65. Declaration of dividends by the Board
The Board may, subject to the Memorandum and these Articles of
Association (including, without limitation, Regulation 9) and in
accordance with Section 36 of the Act, declare a dividend to be paid
to the Members holding shares entitled to receive such dividends, in
proportion to the number of shares held by them, and such dividend
may be paid in cash or wholly or partly in specie in which case the
Board may fix the value for distribution in specie of any assets.
66. Other distributions
Subject to the Memorandum and these Articles of Association
(including, without limitation, Regulation 9), the Board may declare
and make such other distributions (in cash or in specie) to the
Members holding shares entitled to receive such dividends as may be
lawfully made out of the assets of the Company.
67. Reserve fund
Subject to the Memorandum and these Articles of Association
(including, without limitation, Regulation 9), the Board may from
time to time before declaring a dividend set aside, out of the
surplus or profits of the Company, such sum as it thinks proper as a
reserve fund to be used to meet contingencies or for equalising
dividends or for any other special purpose.
68. Deduction of Amounts due to the Company
The Board may deduct from the dividends or distributions payable to
any Member all monies due from such Member to the Company on account
of calls or otherwise.
CAPITALISATION
69. Issue of bonus shares
(1) The Board may resolve to capitalise any part of the amount for
the time being standing to the credit of any of the Company's
surplus or other reserve accounts or to the credit of the profit
and loss account or otherwise available for distribution by
applying such sum in paying up unissued shares to be allotted as
fully paid bonus shares pro rata to the Members holding Common
Shares.
(2) The Company may capitalise any sum standing to the credit of a
reserve account or sums otherwise available for dividend or
distribution by applying such amounts in paying up in full partly
paid shares of those Members who would have been entitled to such
sums if they were distributed by way of dividend or distribution.
ACCOUNTS AND FINANCIAL STATEMENTS
70. Records of account
The Board shall cause to be kept proper records of account in
accordance with United States generally accepted accounting
principles with respect to all transactions of the Company and in
particular with respect to:
(a) all sums of money received and expended by the Company and the
matters in respect of which the receipt and expenditure relates;
(b) all sales and purchases of goods by the Company; and
(c) the assets and liabilities of the Company.
Such records of account shall be kept at the registered office of the
Company or at such other place as the Board thinks fit and shall be
available for inspection by the Directors during normal business
hours.
71. Financial year end
The financial year end of the Company may be determined by resolution
of the Board and failing such resolution shall be the 31st December
in each year.
72. Financial statements
Subject to the Members waiving this requirement, financial accounts
and records as required by section 66(1) of the Act shall be laid
before the Members in general meeting.
AUDIT
73. Appointment of Auditor
Subject to the Members waiving this requirement, at a general
meeting, an independent representative of the Members shall be
appointed by them as Auditor of the accounts of the Company. Such
Auditor may be a Member but no Director, Officer or employee of the
Company shall, during his or her continuance in office, be eligible
to act as an Auditor of the Company.
74. Remuneration of Auditor
The remuneration of the Auditor shall be fixed by the Company in
general meeting or in such manner as the Members may determine.
75. Vacation of office of Auditor
If the office of Auditor becomes vacant by the resignation or death
of the Auditor, or by the Auditor becoming incapable of acting by
reason of illness or other disability at a time when the Auditor's
services are required, the Board shall, as soon as practicable,
convene a general meeting to fill the vacancy thereby created.
76. Access to books of the Company
The Auditor shall at all reasonable times have access to all books
kept by the Company and to all accounts and vouchers relating
thereto, and the Auditor may call on the Directors or Officers of the
Company for any information in their possession relating to the books
or affairs of the Company.
77. Report of the Auditor
(1) Subject to the Members waiving this requirement, the accounts of
the Company shall be audited at least once in every year.
(2) The financial statements provided for by these Articles of
Association shall be audited by the Auditor in accordance with
United States generally accepted auditing standards. The Auditor
shall make a written report thereon in accordance with generally
accepted auditing standards and the report of the Auditor shall
be submitted to the Members in general meeting.
(3) The generally accepted auditing standards referred to in
subparagraph (2) of this Regulation may be those of a country or
jurisdiction other than the British Virgin Islands. If so, the
financial statements and the report of the Auditor must disclose
this fact and name such country or jurisdiction.
NOTICES
78. Notices to Members of the Company
A notice may be given by the Company to any Member either by
delivering it to such Member in person or by sending it to such
Member's address in the Register of Members or to such other address
given for the purpose. For the purposes of this Regulation, a notice
may be sent by mail, courier service, cable, telex, telecopier,
facsimile or other mode of representing words in a legible and
non-transitory form.
79. Notices to joint Members
Any notice required to be given to a Member shall, with respect to
any shares held jointly by two or more Persons, be given to each of
such Persons.
80. Service and delivery of notice
Any notice shall be deemed to have been served at the time when the
same would be delivered in the ordinary course of transmission and,
in proving such service, it shall be sufficient to prove that the
notice was properly addressed and prepaid, if posted, and the time
when it was posted, delivered to the courier or to the cable company
or transmitted by telex, facsimile or other method as the case may
be.
SEAL OF THE COMPANY
81. The seal
The seal of the Company shall be in such form as the Board may from
time to time determine. The Board may adopt one or more duplicate
seals for use outside the British Virgin Islands.
82. Manner in which seal is to be affixed
The seal of the Company shall not be affixed to any instrument
except attested by the signature of a Director and the Secretary or
any two Directors, or any person appointed by the Board for the
purpose, provided that any Director or Officer, may affix the seal of
the Company attested by such Director or Officer's signature to any
authenticated copies of these Articles of Association, the
incorporating documents of the Company, the minutes of any meetings
or any other documents required to be authenticated by such Director
or Officer.
WINDING-UP
83. Winding-up/distribution by liquidator
If the Company shall be wound up the liquidator may, with the
sanction of a resolution of the Members, divide amongst the Members
holding Common Shares in specie or in kind the whole or any part of
the assets of the Company (whether they shall consist of property of
the same kind or not) and may, for such purpose, set such value as he
or she deems fair upon any property to be divided as aforesaid and
may determine how such division shall be carried out as between the
Members holding Common Shares. The liquidator may, with the like
sanction, vest the whole or any part of such assets in trustees upon
such trusts for the benefit of the Members holding Common Shares as
the liquidator shall think fit, but so that no Member shall be
compelled to accept any shares or other securities or assets whereon
there is any liability.
SCHEDULE - FORM A (Regulation 46)
---------------------------------
............................................
P R O X Y
I/We
of
the holder(s) of share(s) in the above-named company hereby appoint
............................ or failing him/her ............................ or
failing him/her ............................................ as my/our proxy to
vote on my/our behalf at the general meeting of the Company to be held on the
day of , 2000, and at any adjournment thereof.
Dated this day of , 2000
*GIVEN under the seal of the Company
*Signed by the above-named
.............................
.............................
Witness
*Delete as applicable.
<PAGE>
SCHEDULE - FORM B (Regulation 56)
---------------------------------
NOTICE OF LIABILITY TO FORFEITURE FOR NON PAYMENT OF CALL
You have failed to pay up the [number] share(s) [numbers in figures]
standing in your name in the Register of Members of the Company, on the
...... day of ........., 2000 last, the day appointed for payment. You are
hereby notified that unless you pay up such shares together with interest
thereon at the rate of .......... per annum computed from the said .......
day of ........., 2000 last, on or before the ....... day of .........,
2000 next at the place of business of the Company the share(s) will be
liable to be forfeited.
Dated this ....... day of .............., 2000
[Signature of Secretary]
By order of the Board
<PAGE>
SCHEDULE - FORM C (Regulation 60)
---------------------------------
TRANSFER OF A SHARE OR SHARES
FOR VALUE RECEIVED .....................................................[amount]
....................................................................[transferor]
hereby sell assign and transfer unto ...............................[transferee]
of.....................................................................[address]
..............................................................[number of shares]
shares of .................................................[name of Company]
Dated ......................
......................
(Transferor)
In the presence of:
..............................................................
(Witness)
......................
(Transferee)
In the presence of:
..............................................................
(Witness)
<PAGE>
SCHEDULE - FORM D (Regulation 64)
---------------------------------
TRANSFER BY A PERSON BECOMING ENTITLED ON DEATH/BANKRUPTCY
OF A MEMBER
I/We having become entitled in consequence of the [death/bankruptcy]
of [name of the deceased Member] to [number] share(s) standing in the
register of members of [Company] in the name of the said [name of
deceased Member] instead of being registered myself/ourselves elect
to have [name of transferee] (the "Transferee") registered as a
transferee of such share(s) and I/we do hereby accordingly transfer
the said share(s) to the Transferee to hold the same unto the
Transferee his or her executors administrators and assigns subject to
the conditions on which the same were held at the time of the
execution thereof; and the Transferee does hereby agree to take the
said share(s) subject to the same conditions.
WITNESS our hands this ........ day of ..........., 2000
Signed by the above-named )
[person or persons entitled] )
in the presence of: )
Signed by the above-named )
[transferee] )
in the presence of: )
<PAGE>
SCHEDULE - FORM E (Regulation 54)
---------------------------------
FORM OF SHARE CERTIFICATE FOR COMMON SHARES
<PAGE>
SCHEDULE - FORM F (Regulation 54)
---------------------------------
FORM OF SHARE CERTIFICATE FOR PREFERRED SHARES
<PAGE>
We, ARAWAK TRUST COMPANY LIMITED, of Road Town, Tortola, British Virgin Islands
for the purpose of incorporating an International Business Company under the
laws of the British Virgin Islands hereby subscribe our name to these Articles
of Association the 21st day of July, 1995:
--------------------------------------------------------------------------------
NAME, ADDRESS AND DESCRIPTION OF SUBSCRIBER
--------------------------------------------------------------------------------
ARAWAK TRUST COMPANY LIMITED
P.O. Box 173
Road Town
Tortola
British Virgin Islands
Trust Company
(Sgd.) David A. Raworth
----------------------------
Arawak Trust Company Limited
--------------------------------------------------------------------------------
Dated this 21st day of July, 1995 Witness to the above signature:
(Sgd.) M. Fahie
------------------------
Marsha Fahie
P.O. Box 173
Road Town
Tortola
British Virgin Islands
Legal Secretary
<PAGE>
EXECUTION COPY
5(a) ALTERACAO CONTRATUAL DA
"SBCI BRASIL LTDA."
Pelo presente instrumento particular, as partes a seguir qualificadas,
I SBC INTERNATIONAL-BRAZIL HOLDING, LTD., sociedade organizada e existente de
acordo com as leis das Ilhas Cayman, com sede em Ugland House P.O. Box 309 GT,
Grand Cayman, Ilhas Cayman, neste ato representada por seu bastante procurador,
Sr. ALBERTO DE ORLEANS E BRAGANCA, brasileiro, casado, advogado, residente e
domiciliado na Cidade e Estado do Rio de Janeiro, com escritorio na Av. Rio
Branco n(0) 1, 14(0) andar, ala "A", inscrito na OAB/RJ sob o n(0) 39.678 e no
CPF/MF sob o n(0) 416047507-82;
II AM LATIN AMERICA, LLC (anteriormente denominada Telmex Wireless Brazil, LLC),
sociedade de responsabilidade limitada, constituida e existente em conformidade
com as leis do Estado de Delaware, Estados Unidos da America, com sede na North
Market Street, n(0) 1105, Suite 1300, Wilmington, Delaware, 19801, neste ato
representada por seu bastante procurador, Sr. LUIZ FERNANDO TEIXEIRA PINTO,
brasileiro, casado, advogado, residente e domiciliado na Av. Almirante Barroso,
n(0) 139, 8(0) andar, Cidade e Estado do Rio de Janeiro, portador da carteira de
identidade n(0) 659/A, emitida pela Ordem dos Advogados do Brasil, Secao do
Distrito Federal (OAB/DF), inscrito no CPF/MF sob o n(0) 011.898.837-91;
III MICHAEL A. MEYER, norte-americano, casado, advogado, portador do passaporte
norte-americano n(0) 132301750, residente e domiciliado na 43 Champions Run, San
Antonio, Texas 78258, Estados Unidos da America, neste ato representado por seu
bastante procurador, Sr. ALBERTO DE ORLEANS E BRAGANCA, acima qualificado;
IV PHILLIP C. ESSMAN, norte-americano, casado, executivo, portador do passaporte
norte-americano n(0) 700710260, residente e domiciliado na 216 Branch Oak Way,
San Antonio, Texas 78230, Estados Unidos da America, neste ato representado por
seu bastante procurador, Sr. ALBERTO DE ORLEANS E BRAGANCA, acima qualificado;
<PAGE>
V DANIEL HAJJ ABOUMRAD; mexicano, casado, empresario, portador do passaporte
mexicano n(0) 97370024017, residente e domiciliado em Alpes, 1260, Col. Lomas de
Chapultepec, Cidade do Mexico, DF 11000, Mexico, neste ato representado por seu
bastante procurador LUIZ FERNANDO TEIXEIRA PINTO, acima qualificado;
VI LUIZ FERNANDO TEIXEIRA PINTO, acima qualificado;
Unicos Socios-quotistas representando a totalidade do capital social da SBCI
brasil ltda., sociedade por quotas de responsabilidade limitada, com sede na Av.
Rio Branco n(0) 1, 14(0) andar - parte, Cidade e Estado do Rio de Janeiro,
inscrita no CNPJ/MF 03.542.959/0001-47 (a "Sociedade"), cujo contrato social
encontra-se arquivado na Junta Comercial do Estado do Rio de Janeiro, sob o n(0)
33206420304, por despacho de 09 de dezembro de 1999, e
VII TELECOM AMERICAS LTD., sociedade organizada segundo as leis das Bermudas,
com sede em Cedar House, 41 Cedar Avenue, Hamilton HM 12, Bermuda, neste ato
representada por seu bastante procurador, Sr. ALBERTO DE ORLEANS E BRAGANCA,
acima qualificado, por este ato admitida como socia-quotista da Sociedade, tem
entre si justo e acordado alterar o Contrato Social da Sociedade nos termos e
condicoes abaixo:
(i) A socia-quotista SBC INTERNATIONAL-BRAZIL HOLDING, LTD. neste ato cede
e transfere todas as suas 150.443.644 (cento e cinquenta milhoes,
quatrocentos e quarenta e tres mil, seiscentos e quarenta e quatro)
quotas "B", totalizando R$ 150.443.644 (cento e cinquenta milhoes,
quatrocentos e quarenta e tres mil, seiscentos e quarenta e quatro
reais) para TELECOM AMERICAS LTD.
(ii) A socia-quotista AM LATIN AMERICA, LLC neste ato cede e transfere todas
as suas 445.031.171 (quatrocentos e quarenta e cinco milhoes, trinta e
um mil, cento e setenta e uma) quotas na Sociedade, totalizando R$
445.031.171 (quatrocentos e quarenta e cinco milhoes, trinta e um mil,
cento e setenta e um reais), 150.443.645 (cento e cinquenta milhoes,
quatrocentos e quarenta e tres mil, seiscentos e quarenta e cinco)
sendo quotas "A" e 294.587.526 (duzentos e noventa e quatro milhoes,
quinhentos e oitenta e sete mil, quinhentos e vinte e seis) sendo
quotas "B" para TELECOM AMERICAS LTD.
<PAGE>
(iii) Como resultado das decisoes acima, a AM LATIN AMERICA, LLC deixa de ser
quotista da Sociedade e TELECOM AMERICAS LTD., e admitida em seu lugar
como quotista da Sociedade.
(iv) Os demais socios-quotistas renunciam, neste ato, seus respectivos
direitos de preferencia a transferencia de quotas ora realizada.
(v) Alem das alteracoes ao capital social da Sociedade, acima, os
socios-quotistas decidem promover uma serie de outras alteracoes no
Contrato Social da Sociedade visando refletir os acordos havidos entre
os socios-quotistas.
(vi) Em razao das deliberacoes acima decidem os socios quotistas consolidar
o contrato social da Sociedade, passando o mesmo a vigorar com a
seguinte redacao:
"CONTRATO SOCIAL DA
SBCI brasil ltda."
CLAUSULA I
DENOMINACAO
Sob a denominacao de SBCI brasil ltda. fica constituida uma sociedade por quotas
de responsabilidade limitada, regida pelas clausulas e condicoes deste Contrato
e pelas leis que lhe forem aplicaveis.
CLAUSULA II
OBJETO
A Sociedade tera por objetivo a participacao em outras sociedades civis ou
comerciais, como acionista ou socia-quotista, bem como de "joint ventures" e
outros tipos de parceria.
CLAUSULA III
DURACAO
A duracao da Sociedade sera por tempo indeterminado.
CLAUSULA IV
SEDE
A Sociedade tem sede na Av. Rio Branco n(0) 1, 14(0) andar - parte, Cidade e
Estado do Rio de Janeiro. A Sociedade, por deliberacao dos socios-quotistas,
podera abrir outras filiais, agencias, escritorios e demais dependencias no
Brasil e no exterior.
<PAGE>
CLAUSULA V
CAPITAL SOCIAL
O capital social da Sociedade e de R$ 890.062.346,00 (oitocentos e noventa
milhoes, sessenta e dois mil, trezentos e quarenta e seis reais), dividido em
890.062.346 (oitocentos e noventa milhoes, sessenta e dois mil, trezentas e
quarenta e seis) quotas, no valor nominal de R$1,00 (hum real) cada uma,
totalmente subscritas e integralizadas em moeda corrente nacional, assim
distribuidas entre os socios-quotistas:
I. SBC INTERNATIONAL-BRAZIL HOLDING, LTD., possui 294.587.527 (duzentos e
noventa e quatro milhoes, quinhentos e oitenta e sete mil, quinhentos e vinte e
sete) quotas "A", totalizando R$ 294.587.527 (duzentos e noventa e quatro
milhoes, quinhentos e oitenta e sete mil, quinhentos e vinte e sete reais);
II. TELECOM AMERICAS LTD. possui 595.474.815 (quinhentos e noventa e cinco
milhoes, quatrocentos e setenta e quatro mil, oitocentos e quinze) quotas,
totalizando R$595.474.815 (quinhentos e noventa e cinco milhoes, quatrocentos e
setenta e quatro mil, oitocentos e quinze reais), sendo 150.443.645 (cento e
cinquenta milhoes, quatrocentos e quarenta e tres mil, seiscentos e quarenta e
cinco) quotas "A" e 445,031,170 (quatrocentos e quarenta e cinco milhoes, trinta
e um mil, cento e setenta) Quotas "B";
III. MICHAEL A. MEYER possui 1 (uma) quota "B", totalizando R$ 1,00 (um real);
<PAGE>
IV. PHILLIP C. ESSMAN possui 1 (uma) quota "B", totalizando R$ 1,00 (um real);
V. DANIEL HAJJ ABOUMRAD possui 1 (uma) quota "B", totalizando R$ 1,00 (um real);
VI. LUIZ FERNANDO TEIXEIRA PINTO possui 1 (uma) quota "B", totalizando R$ 1,00
(um real).
PARAGRAFO PRIMEIRO: A responsabilidade dos socios-quotistas e limitada ao valor
total do capital social da Sociedade.
PARAGRAFO SEGUNDO: As quotas da Sociedade sao indivisiveis e cada quota "A"
confere ao seu titular, o direito a um voto nas deliberacoes das Assembleias
Gerais dos Socios-Quotistas.
PARAGRAFO TERCEIRO: As quotas "B" nao conferem a seus titulares qualquer direito
de voto nas deliberacoes tomadas nas Assembleias Gerais de Socios-Quotistas,
exceto naquilo que afetar o disposto nos paragrafos quarto e quinto desta
Clausula V.
PARAGRAFO QUARTO: Cada quota "B" tera direito a um dividendo minimo cumulativo
garantido de R$0.40 (quarenta centavos) por ano, que sera acrescido
trimestralmente, e atualizado anualmente pela variacao do Indice Geral de Precos
- Disponibilidade Interna (IGP-DI) ou qualquer outro indice que venha a
substitui-lo. Antes do pagamento do montante total dos dividendos minimos
cumulativos garantidos as quotas "B", a Sociedade nao fara qualquer outra
distribuicao relativa as quotas. Uma vez pago o montante total dos dividendos
minimos cumulativos garantidos as quotas "B", a Sociedade fara as distribuicoes
subsequentes a cada quota "A" e "B" na mesma proporcao. No caso de a Sociedade
ser liquidada, os ativos deverao ser usados para pagar as obrigacoes da
Sociedade e quaisquer ativos remanescentes deverao ser assim distribuidos:
(a) os lucros, se houver, serao distribuidos as quotas "B" ate que todos
os dividendos minimos cumulativos garantidos tenham sido pagos e, em
seguida, a cada quota "A" e "B" em bases iguais; e
(b) as quotas "B" terao prioridade sobre as quotas "A" no reembolso de
capital, limitado ao valor nominal de cada quota.
<PAGE>
A fim de dirimir eventuais duvidas, as quotas "A" nao terao direito ao
recebimento de qualquer distribuicao, inclusive por ocasiao da liquidacao da
Sociedade, para o efeito de compensar quaisquer distribuicoes feitas as quotas
"B" a titulo de dividendo minimo cumulativo.
PARAGRAFO QUINTO: As quotas "A" detidas pela socia-quotista SBC INTERNATIONAL -
BRAZIL HOLDING, LTD. nao serao transferidas a quaisquer Pessoas exceto a TELECOM
AMERICAS LTD. e seus sucessores e cessionarios, na forma estipulada na Escritura
de Debenture Permutavel ("Exchangeable Debenture Agreement") datada de 16 de
Novembro, 2000 entre SBC INTERNATIONAL - BRAZIL HOLDING, LTD., TELECOM AMERICAS
LTD. e a Sociedade, com copia devidamente depositada na sede social. Nao ha
restricoes a transferencia de quotas "A" ou "B" detidas pela TELECOM AMERICAS
LTD.
CLAUSULA VI
GERENCIA
A gerencia da Sociedade sera responsabilidade das socias-quotistas SBC
INTERNATIONAL-BRAZIL HOLDING, LTD. e TELECOM AMERICAS LTD., as quais exercerao
as funcoes de gerencia por meio de delegacao de poderes a um Conselho de
Administracao da Sociedade e a um Gerente, residente e domiciliado no Brasil,
nomeado por indicacao do Conselho de Administracao, ao qual serao atribuidos
todos os poderes necessarios ao exercicio daquela funcao, na forma prevista no
Artigo 13 do Decreto n(0) 3.708 de 10.01.1919.
PARAGRAFO UNICO: A remuneracao do Gerente sera determinada pelos
socios-quotistas, representando a maioria das quotas "A", devendo o respectivo
pagamento ser debitado como parte das despesas gerais da Sociedade. Os membros
do Conselho de Administracao nao farao jus a qualquer remuneracao.
<PAGE>
CLAUSULA VII
CONSELHO DE ADMINISTRACAO
O Conselho de Administracao e orgao de deliberacao colegiada, sendo a
representacao da Sociedade, nos termos do art. 13 do Decreto n(0) 3.708/19, da
competencia privativa do Gerente da Sociedade.
PARAGRAFO PRIMEIRO: O Conselho de Administracao sera composto por 4 (quatro)
membros, residentes ou nao no pais, com mandato de 1 (um) ano, permitida a
reeleicao, dos quais 2 (dois) serao indicados pela socia-quotista SBC
INTERNATIONAL-BRAZIL HOLDING, LTD. e os outros 2 (dois) serao indicados pela
socia-quotista TELECOM AMERICAS LTD., por meio de instrumento particular de
delegacao de poderes, devidamente arquivado no Registro do Comercio,
destituiveis a qualquer tempo pela respectiva socia-quotista que os houver
indicado.
PARAGRAFO SEGUNDO: Quando da designacao dos membros do Conselho de
Administracao, cabera as socias-quotistas indicar o seu presidente, por maioria
de votos dos detentores das quotas "A".
PARAGRAFO TERCEIRO: O Conselho de Administracao reunir-se-a sempre que convocado
por qualquer de seus membros, por meio de comunicacao escrita com aviso de
recebimento, entregue com antecedencia minima de 15 (quinze) dias, juntamente
com a ordem do dia, sendo certo que a falta de convocacao sera sempre remediada
pela presenca da totalidade dos membros.
PARAGRAFO QUARTO: As deliberacoes do Conselho de Administracao serao sempre
tomadas pela maioria de votos de seus membros, em pessoa, ou devidamente
representados por seus procuradores.
PARAGRAFO QUINTO: As reunioes do Conselho de Administracao serao sempre
presididas por seu Presidente, ou por qualquer outro membro designado pelo
Conselho, a quem cabera a organizacao dos trabalhos e a tomada dos votos. Em
caso de empate nas deliberacoes do Conselho de Administracao, ao Presidente
cabera o voto de qualidade.
PARAGRAFO SEXTO: Da reuniao realizada pelo Conselho de Administracao sera
lavrada ata com o conteudo da decisao tomada, que so produzira efeitos perante
terceiros apos o seu arquivamento no Registro do Comercio.
<PAGE>
PARAGRAFO SETIMO: Compete ao Conselho de Administracao:
(i) fixar a orientacao geral dos negocios da Sociedade;
(ii) fiscalizar o desempenho do Gerente na administracao da Sociedade,
examinando, a qualquer tempo, os livros e papeis da Sociedade; solicitar
informacoes sobre contratos celebrados ou em via de celebracao, bem como
qualquer outra informacao sobre quaisquer outros atos;
(iii) manifestar-se sobre o relatorio e as contas da gerencia da Sociedade;
(iv) manifestar-se previamente sobre a realizacao ou nao de operacoes envolvendo
valores superiores a R$150.000,00 (cento e cinquenta mil reais),
atualizados segundo os indices de variacao do IGP-DI ou outro indice que o
substitua;
(v) aprovar o orcamento anual da Sociedade preparado e proposto pelo Gerente;
Clausula VIII
GERENTE
O Gerente, indicado pelo Conselho de Administracao da Sociedade, devera praticar
todos os atos necessarios e convenientes a administracao da Sociedade e tera
todos os poderes necessarios a representacao da mesma, em juizo ou fora dele,
ativa ou passivamente, perante terceiros, reparticoes e autoridades publicas
federais, estaduais e municipais e, ainda, perante qualquer orgao governamental,
devendo permanecer no seu cargo ate que venha a ser substituido.
CLAUSULA IX
ATOS DA SOCIEDADE
Todos os atos que envolvam responsabilidades e obriguem a Sociedade, a sua
representacao ativa e passiva, bem como o uso da firma ou denominacao social,
caberao sempre:
a) ao Gerente isoladamente;
b) a dois procuradores, agindo em conjunto, nomeados na forma do Paragrafo
Terceiro abaixo; ou
c) a um procurador, isoladamente, indicado pela Sociedade e de acordo com os
termos da procuracao, observado o disposto nos Paragrafos Segundo e
Terceiro abaixo.
<PAGE>
PARAGRAFO PRIMEIRO: A denominacao social somente devera ser usada em atos ou
transacoes relacionadas com os objetivos e interesses da Sociedade.
PARAGRAFO SEGUNDO: A representacao individual prevista no caput desta Clausula,
item "c", devera ser limitada aos atos que envolvam a representacao da Sociedade
perante a Justica do Trabalho, quaisquer reparticoes e orgaos publicos federais,
estaduais e municipais, correios, sindicatos de trabalhadores, Banco Central do
Brasil, na emissao de faturas, endosso de cheques e duplicatas, desconto e
garantia, recebimento de qualquer montante, exclusivamente para deposito em
conta bancaria da Sociedade, tendo poderes para assinar recibos, dar quitacao e
qualquer outro poder conferido em um instrumento de mandato especifico a ser
outorgado nos termos do Paragrafo Terceiro desta Clausula.
PARAGRAFO TERCEIRO: A Sociedade representada pelo Gerente podera indicar
procuradores para a execucao de atos ou transacoes especificos, os quais deverao
ter poderes para assinar isoladamente ou em conjunto, dependendo dos poderes
conferidos pelo respectivo instrumento de mandato. Os instrumentos de mandato
concedidos pela Sociedade devem estabelecer expressamente os poderes outorgados
e terao um prazo limitado de duracao, exceto aqueles conferidos com o poder da
clausula "ad judicia", cujo prazo de duracao devera ser indefinido. E vedada a
delegacao de poderes em instrumentos de mandato outorgados com os poderes da
clausula "ad negotia".
CLAUSULA X
DEMONSTRACOES FINANCEIRAS
O exercicio social iniciar-se-a em 1(0)de janeiro e terminara em 31 de dezembro.
O primeiro exercicio social encerrou-se em 31 de dezembro de 1999.
PARAGRAFO PRIMEIRO: Ao final do exercicio social devera ser levantado o Balanco
Geral da Sociedade.
PARAGRAFO SEGUNDO: A destinacao do lucro liquido da Sociedade, apurado
anualmente ou em periodo inferior, devera ser alocado conforme deliberacao dos
socios-quotistas detentores da maioria das quotas "A".
<PAGE>
PARAGRAFO TERCEIRO: Se for o caso, a Sociedade deduzira dos lucros os prejuizos.
Os lucros remanescentes deverao ser alocados por deliberacao dos
socios-quotistas detentores da maioria das quotas "A", na forma do Paragrafo
Quarto da Clausula V deste instrumento.
PARAGRAFO QUARTO: Os socios-quotistas poderao decidir pela criacao de uma conta
de reserva, observado o quorum deliberativo previsto no Paragrafo Segundo acima.
PARAGRAFO QUINTO: Os prejuizos apurados deverao ser transferidos para o ano
fiscal subsequente, segundo a legislacao vigente.
PARAGRAFO SEXTO: Os socios-quotistas poderao decidir sobre o levantamento de
balancos parciais, a qualquer tempo, (a) com a finalidade de distribuir lucros
num periodo inferior a um ano completo, e (b) para qualquer outra finalidade.
CLAUSULA XI
ASSEMBLEIA GERAL DE SOCIOS-QUOTISTAS
A Assembleia Geral dos Socios-Quotistas devera reunir-se sempre que necessario
para o interesse da Sociedade e para os seguintes fins:
a) discutir e aprovar as demonstracoes financeiras da Sociedade;
b) decidir quanto a distribuicao de dividendos;
c) discutir e votar outros assuntos de interesse da Sociedade; e
d) decidir sobre outras materias de competencia dos socios-quotistas.
<PAGE>
CLAUSULA XII
DELIBERACOES NAS ASSEMBLEIAS GERAIS
Todas as deliberacoes ou assuntos que forem submetidos aos socios-quotistas,
deverao ser aprovados por aqueles titulares da maioria das quotas "A", exceto
nos casos expressamente previstos neste Contrato Social.
CLAUSULA XIII
DISSOLUCAO E LIQUIDACAO
A Sociedade nao se dissolvera ou sera liquidada por falencia ou retirada de
qualquer dos seus socios-quotistas. A Sociedade continuara a existir com os
socios-quotistas remanescentes, que deverao adquirir ou indicar um terceiro para
adquirir estas quotas, observado o direito de preferencia dos socios-quotistas
remanescentes e na proporcao das quotas possuidas de adquirirem as quotas de
socio-quotista falido ou retirante. A referida aquisicao devera ser feita
segundo o valor patrimonial contabil das quotas fixadas em um balanco
especialmente levantado para esse fim.
CLAUSULA XIV
ALTERACAO DO CONTRATO SOCIAL
O presente contrato social podera ser alterado, total ou parcialmente, inclusive
no caso de retirada de algum dos socios-quotistas e liquidacao da Sociedade, por
decisao aprovada pelos socios-quotistas que representem a totalidade do capital
social.
PARAGRAFO UNICO: A Sociedade podera ser transformada em sociedade anonima, a
qualquer tempo, por decisao dos socios-quotistas que representem a totalidade do
capital social.
CLAUSULA XV
ACORDOS DE QUOTISTA
A Sociedade e seus administradores deverao dar cumprimento a qualquer acordo de
quotistas, devidamente depositado na sede social, e a Sociedade e os orgaos da
administracao obrigam-se a agir sempre em conformidade com os ditames do mesmo e
a rejeitar qualquer ato contrario ao disposto em qualquer acordo de quotistas.
Na hipotese de qualquer conflito entre o presente Contrato Social e qualquer
acordo de quotistas, os termos do acordo de quotistas deverao prevalecer.
<PAGE>
E por estarem assim justos e contratados, firmam os socios-quotistas o presente
instrumento em 5 (cinco) vias de mesmo teor e efeito na presenca das testemunhas
abaixo.
Rio de Janeiro, 16 de Novembro de 2000.
--------------------------------------
SBC INTERNATIONAL-BRAZIL HOLDING, LTD.
pp. Alberto de Orleans e Braganca
---------------------------------------
AM LATIN AMERICA, LLC
pp. Luiz Fernando Teixeira Pinto
---------------------------------------
TELECOM AMERICAS LTD.
pp. Alberto de Orleans e Braganca
--------------------------------------
MICHAEL A. MEYER
pp. Alberto de Orleans e Braganca
-------------------------------------
PHILLIP C. ESSMAN
pp. Alberto de Orleans e Braganca
--------------------------------------
DANIEL HAJJ ABOUMRAD
pp. Luiz Fernando Teixeira Pinto
-------------------------------------
LUIZ FERNANDO TEIXEIRA PINTO
Visto do Advogado Responsavel:
--------------------------
Alberto de Orleans e Braganca
OAB/RJ 39.678
Testemunhas:
1. ____________________________ 2. __________________________
Nome: ___________ Nome: _____________
RG: _____________ RG: _______________
<PAGE>
EXECUTION COPY
5TH AMENDMENT TO THE ARTICLES OF ASSOCIATION OF
"SBCI BRASIL LTDA."
By means of this instrument, the parties hereinbelow:
I SBC INTERNATIONAL-BRAZIL HOLDING, LTD., a company organized and existing in
accordance with the laws of the Cayman Islands, with its main office in Ugland
House P.O. Box 309, GT, Grand Cayman, the Cayman Islands, herein represented by
its lawful attorney-in-fact ALBERTO DE ORLEANS E BRAGANCA, Brazilian citizen,
married, attorney, resident and domiciled in the city and state of Rio de
Janeiro, with offices at Av. Rio Branco 1, 14th floor-A, registered at OAB/RJ
under n. 39.678 and enrolled at CPF/MF under n. 416047507-82;
II AM LATIN AMERICA, LLC (formerly known as Telmex Wireless Brazil, LLC), a
limited liability company organized and existing in accordance with the laws of
the state of Delaware, United States of America, headquartered at 1105 North
Market Street, Suite 1300, Wilmington, Delaware 19801, herein represented by its
lawful attorney-in-fact, LUIZ FERNANDO TEXEIRA PINTO, Brazilian citizen,
married, attorney, resident and domiciled at Av. Almirante Barroso, n. 139, 8th
floor, city and state of Rio de Janeiro, bearer of the identity card n. 659/A,
issued by the Brazilian Bar Association, Distrito Federal (OAB/DF), enrolled at
CPF/MF under n. 011.898.837-91;
III MICHAEL A. MEYER, U.S. citizen, married, attorney, holder of the American
Passport n. 132301750, resident and domiciled at 43 Champions Run, San Antonio,
Texas, 78258, United States, herein represented by its lawful attorney-in-fact,
ALBERTO DE ORLEANS E BRAGANCA, qualified above;
IV PHILLIP C. ESSMAN, U.S. citizen, married, business executive, holder of the
American passport n. 700710260, resident and domiciled at 216 Branch Oak Way,
San Antonio, Texas, 78230, United States, herein represented by its lawful
attorney-in-fact, ALBERTO DE ORLEANS E BRAGANCA, qualified above;
V DANIEL HAJJ ABOUMRAD, Mexican citizen, married, businessman, bearer of the
Mexican passport n. 97370024017, resident and domiciled at Alpes n. 1260, Col.
Lomas de Chapultepec, Mexico City, DF 11000, Mexico, herein represented by its
lawful attorney-in-fact, LUIZ FERNANDO TEIXEIRA PINTO, qualified above; and
VI LUIZ FERNANDO TEIXEIRA PINTO, qualified above;
sole quotaholders of SBCI BRASIL LTDA., a limited liability company, with main
offices at Av. Rio Branco 1, 14(0)andar - parte, city and state of Rio de
Janeiro, enrolled at CNPJ/MF under n. 03.542.959/0001-47 (the "Company"), whose
Articles of Association are filed with the Board of Trade of Rio de Janeiro
under n. 33206420304 pursuant to an order issued on December 09, 1999, and
VII TELECOM AMERICAS LTD., a company organized under the laws of Bermuda,
headquartered at Cedar House, 41 Cedar Avenue, Hamilton, HM12, Bermuda, herein
represent by its lawful attorney-in-fact, ALBERTO DE ORLEANS E BRAGANCA,
qualified above, hereby admitted as a quotaholder of the Company, have agreed to
amend the Company's Articles of Association as follows:
(i) The quotaholder SBCI INTERNATIONAL - BRAZIL HOLDING, LTD. shall
transfer all of its 150,443,644 (one hundred fifty million four hundred
forty three thousand six hundred forty four) "B" quotas, totaling
R$150,443,644 (one hundred fifty million four hundred forty three
thousand six hundred forty four reais), to TELECOM AMERICAS LTD.;
(ii) The quotaholder AM LATIN AMERICA, LLC shall transfer all of its
445,031,171 (four hundred forty five million thirty one thousand one
hundred seventy one) quotas in the Company, totaling R$445,031,171
(four hundred forty five million thirty one thousand one hundred
seventy one reais), 150,443,645 (one hundred fifty million four hundred
forty three thousand six hundred forty five) being "A" quotas and
294,587,526 (two hundred ninety four million five hundred eighty seven
thousand five hundred twenty six) being "B" quotas, to TELECOM AMERICAS
LTD.
(iii) As a result of the above resolutions, AM LATIN AMERICA, LLC hereby
withdraws as a quotaholder of the Company and TELECOM AMERICAS LTD., in
turn, is hereby admitted as a quotaholder of the Company.
(iv) Each of the other quotaholders hereby waive their respective rights of
first refusal to the transfer herein.
(v) In addition to the above changes relating to the capital stock of the
Company, the quotaholders hereby amend several other provisions of the
Articles of Association of the Company in order to reflect the
agreements between the quotaholders.
(vi) As a result of the above resolutions, the quotaholders hereby amend and
restate the Company's Articles of Association, which shall now read as
follows:
ARTICLES OF ASSOCIATION OF
"SBCI BRASIL LTDA."
ARTICLE I
NAME
The name of the Company is SBCI BRASIL LTDA., organized as a limited
liability company and governed by the provisions of these Articles of
Association and by applicable laws.
ARTICLE II
PURPOSE
The corporate purposes of the Company are to hold equity in other civil or
commercial companies or corporations, whether as quotaholder or shareholder, as
well as to participate in joint ventures and other forms of partnership.
ARTICLE III
DURATION
The duration of the Company is indefinite.
ARTICLE IV
MAIN OFFICE
The main office of the Company is located at Av. Rio Branco n. 1, 14th
floor, city and state of Rio de Janeiro. The Company may, by decision of the
quotaholders, open other branches, agencies, offices and other facilities in
Brazil and abroad.
ARTICLE V
CAPITAL STOCK
The Company's capital stock is R$ 890,062,346 (eight hundred ninety million
sixty two thousand three hundred forty six reais), divided into 890,062,346
(eight hundred ninety million sixty two thousand three hundred forty six) quotas
with a par value of R$1.00 (one real) each, fully subscribed and paid up in
Brazilian currency, and distributed among the quotaholders as follows:
I. SBC INTERNATIONAL - BRAZIL HOLDING, LTD. holds 294,587,527 (two hundred
ninety four million five hundred eighty seven thousand five hundred twenty
seven) "A" quotas, totaling R$294,587,527 (two hundred ninety four million five
hundred eighty seven thousand five hundred twenty seven reais);
II. TELECOM AMERICAS LTD. holds 595,474,815 (five hundred ninety five million
four hundred seventy four thousand eight hundred fifteen) quotas, totaling
R$595,474,815 (five hundred ninety five million four hundred seventy four
thousand eight hundred fifteen reais), 150,443,645 (one hundred fifty million
four hundred forty three thousand six hundred forty five) being "A" quotas and
445,031,170 (four hundred forty five million thirty one thousand one hundred
seventy) being "B" quotas;
III. MICHAEL A. MEYER holds 1 (one) quota "B" in the total amount of R$ 1.00
(one real);
IV. PHILLIP C. ESSMAN holds 1 (one) quota "B" in the total amount of R$ 1.00
(one real);
V. DANIEL HAJJ ABOUMRAD holds 1 (one) quota "B" in the total amount of R$ 1.00
(one real);
VI. LUIZ FERNANDO TEIXEIRA PINTO holds 1 (one) quota "B" in the total amount of
R$ 1.00 (one real).
PARAGRAPH ONE: The liability of the quotaholders is limited to the total
value of the capital stock of the Company,
PARAGRAPH TWO: The quotas of the Company are indivisible and each quota "A"
confers its holder the right to one vote in the resolutions of the Quotaholders
General Meetings.
PARAGRAPH THREE: Quotas "B" are not entitled to any vote in the resolutions
of the Quotaholders General Meetings, except any vote affecting the rights or
restrictions provided in paragraphs four and five of this Article V.
PARAGRAPH FOUR: Each quota "B" shall have a guaranteed minimum
cumulative dividend thereon of R$0.40 (forty cents of a real) per annum, which
shall accrue quarterly as adjusted annually for inflation by the variation of
the "Indice Geral de Precos - Disponibilidade Interna" (IGP-DI) index or any
other index that may come to replace it. Prior to the payment of all accrued
guaranteed minimum cumulative dividends in full to the quotas "B", the Company
shall not make any other distributions with respect to the quotas. Once all such
accrued guaranteed minimum cumulative dividends have been paid on the quotas
"B", the Company shall make all subsequent distributions on each quota "A" and
quota "B" on an equal basis. In the event the Company is liquidated, the assets
shall be used to pay the obligations of the Company and any remaining assets
shall be distributed as follows:
(a) the profits, if any, will be distributed in respect of the quotas
"B" until all accrued guaranteed minimum cumulative dividends shall
have been paid and thereafter to each quota "A" and quota "B" on an
equal basis; and
(b) the quotas "B" shall have priority over the quotas "A" in the
reimbursement of capital, limited to the par value of each quota.
For the avoidance of doubt, the quotas "A" shall not be entitled to receive any
distribution, including upon liquidation of the Company, in order to offset any
distributions made to the quotas "B" as a minimum cumulative dividend.
PARAGRAPH FIVE: The quotas "A" held initially by SBC INTERNATIONAL - BRAZIL
HOLDING, LTD. shall not be transferred to any other Person except to TELECOM
AMERICAS LTD. and its successors and assigns, pursuant to the Exchangeable
Debenture Agreement dated as of November 16, 2000 by and among SBC INTERNATIONAL
-BRAZIL HOLDING, LTD., TELECOM AMERICAS LTD. and the Company, with a copy duly
filed at the Company's main office. There shall be no restriction on the
transfer of the quotas "A" or the quotas "B" held by TELECOM AMERICAS LTD.
ARTICLE VI
MANAGEMENT
Management of the Company shall be the responsibility of the quotaholders
SBC INTERNATIONAL - BRAZIL HOLDING, LTD. and TELECOM AMERICAS LTD., which shall
perform the management functions through delegation of powers to a Board of
Directors of the Company and to a Manager, resident and domiciled in Brazil,
appointed by the Board of Directors, being such Manager vested with all the
powers necessary to perform such functions, as set forth in article 13 of Decree
3.708 of January 10, 1919.
SOLE PARAGRAPH: The remuneration of the Manager will be determined by the
quotaholders representing a majority of quotas "A", and the payment thereof
shall be debited as part of the Company's general expenses. The members of the
Board of Directors shall not be entitled to any kind of remuneration.
ARTICLE VII
BOARD OF DIRECTORS
The Board of Directors is the collective deciding corporate
body of the Company, and the representation of Company is, under the provisions
of art. 13 of Decree 3.708/19 specifically the responsibility of the Manager of
the Company.
PARAGRAPH ONE: The Board of Directors shall be comprised of 4
(four) members, resident in the country or not, for a term of 1 (one) year,
reelection permitted, of which 2 (two) members shall be appointed by the
quotaholder SBC INTERNATIONAL - BRAZIL HOLDING, LTD. and the other 2 (two) by
the quotaholder TELECOM AMERICAS LTD. through instrument of delegation of
powers, duly filed with the Board of Trade, being such board members dismissable
at any time by the respective quotaholder who appointed them.
PARAGRAPH TWO: At the time the members of the Board of
Directors are appointed, the quotaholders shall appoint the chairman of the
Board of Directors, by the holders of a majority of quotas "A".
PARAGRAPH THREE: The Board of Directors shall convene whenever
a meeting is called by any of its members, by delivery of a written notice with
receipt to all members containing a proposed agenda for such meeting at least 15
(fifteen) days prior to the proposed meeting. Any defect in the calling of the
meeting shall be cured by the attendance of all the members of the Board of
Directors.
PARAGRAPH FOUR: Resolutions of the Board of Directors shall be made by the
majority of the votes of its members, in person or through duly appointed
attorneys-in-fact.
PARAGRAPH FIVE: The meetings of the Board of Directors shall always be
chaired by its Chairman, or by such other member designated by the Board of
Directors who shall be responsible for organizing the meeting and taking votes.
In the event of a tie vote, the Chairman shall cast the deciding vote.
PARAGRAPH SIX: The resolutions taken in the meetings of the Board of
Directors shall be recorded in minutes, which shall only become effective with
respect to third parties after being duly filed with the Board of Trade.
PARAGRAPH SEVEN: The Board of Directors has the following responsibilities:
(i) to set the overall business strategy of the Company;
(ii) to supervise management performance, examining, at any time, the
Company's books, papers and other documents; to request information on
contracts, either signed or to be signed, and any other information on
any other acts;
(iii) to review management's reports and accounts;
(iv) to approve transactions involving amounts in excess of R$150,000 (one
hundred fifty thousand reais), as adjusted for inflation by the
variation of the IGP-DI index or any other index that may come to
replace it; and
(v) to approve the annual budget of the Company proposed and prepared by
management.
ARTICLE VIII
MANAGER
The Manager, appointed by the Board of Directors, shall perform all acts
necessary and convenient for the management of the Company and shall have all
powers necessary to represent the Company, in or out of court, active or
passively, before third parties, federal, state and municipal public authorities
and agencies and, furthermore, before any governmental body, and he must remain
in office until duly replaced.
ARTICLE IX
ACTS BY THE COMPANY
All acts that involve liability and bind the Company, its active or passive
representation, as well as the use of the corporate name, shall always be the
responsibility of:
(a) the Manager, individually;
(b) two attorneys-in-fact, acting jointly, appointed pursuant to Paragraph
Three below; or
(c) an attorney-in-fact, individually, appointed by the Company and
pursuant to the provisions of his power-of-attorney, observing the
provisions of Paragraphs Two and Three below.
PARAGRAPH ONE: The corporate name may only be used in acts and transactions
relating to the corporate purpose and interest.
PARAGRAPH TWO: The individual representation of the Company set forth in
the first paragraph of this Article, item "c", shall be limited to those acts
that involve the representation of the Company before the Labor Courts, any
federal, state and municipal public authorities and agencies, post-office, labor
unions, the Central Bank of Brazil; to the issuance of invoices, endorsement of
checks and tradebills, discounts and guarantees, receipt of any amounts,
exclusively for deposit into a bank account of the Company; and shall include
all powers to sign receipts, grant discharge and any other power conferred under
an instrument of power-of-attorney granted pursuant to the terms of Paragraph
Three of this Article.
PARAGRAPH THREE: The Company, represented by the Manager, may appoint
attorneys-in-fact to perform specific acts or transactions, and such
attorneys-in-fact shall be empowered to sign individually or jointly depending
on the powers conferred by their respective powers-of-attorney. The
powers-of-attorney granted by the Company shall expressly state the powers
granted thereunder and shall have a limited term of validity, except for those
powers-of-attorney granted with the clause ad-judicia, which shall be for an
indefinite term. The granting of powers under powers-of-attorney with the clause
ad-negotia are expressly prohibited.
ARTICLE X
FINANCIAL STATEMENTS
The fiscal year shall commence on January 1 and end on December 31. The
first fiscal year ended on December 31,
1999;
PARAGRAPH ONE: The Annual Balance Sheet of the Company shall be prepared at
the end of each fiscal year.
PARAGRAPH TWO: The net profit of the Company for the year or for a shorter
period, as the case may be, shall be allocated in accordance with resolutions of
the holders of a majority of the quotas "A".
PARAGRAPH THREE: The Company shall deduct losses, as the case may be, from
profits. Remaining profits shall be allocated in accordance with resolutions of
the holders of a majority of the quotas "A", subject to Article V, Paragraph
Four hereof.
PARAGRAPH FOUR: The quotaholders may decide to allocate funds to the
creation and funding of a reserve account, observing the quorum for resolutions
as set forth in Paragraph Two above.
PARAGRAPH FIVE: Any losses incurred in a fiscal year shall be carried over
to the next fiscal year, pursuant to applicable legislation in effect.
PARAGRAPH SIX: The quotaholders may cause interim financial statements to
be prepared, at any time, (a) for the purpose of distributing profits in a
period shorter than a fiscal year, and (b) for any other purpose.
ARTICLE XI
GENERAL QUOTAHOLDERS MEETINGS
General Quotaholders Meetings shall convene whenever in the Company's
interest and for any of the following purposes:
(a) to discuss and approve the financial statements of the Company;
(b) to decide on the distribution of dividends;
(c) to discuss and to vote on other matters of corporate interest; and
(d) to decide on other matters required to be decided by quotaholders.
ARTICLE XII
DECISIONS IN THE GENERAL QUOTAHOLDERS MEETING
All proposals or matters submitted to the quotaholders must be approved by
the holders of a majority of the quotas "A", except as otherwise provided in
these Articles of Association.
ARTICLE XIII
DISSOLUTION AND LIQUIDATION
The Company shall not be dissolved or liquidated as a result of bankruptcy
or withdrawal of any of its quotaholders. The Company shall survive with the
remaining quotaholders, who shall acquire or refer a third party to acquire the
quotas of the bankrupt or withdrawing quotaholder, subject to the preemptive
rights of the remaining quotaholders and to the proportion of quotas they hold
at that time. The purchase price of such quotas shall be the net worth book
value of the quotas, as provided in a balance sheet prepared especially for such
purpose.
ARTICLE XIV
AMENDMENTS TO THE ARTICLES OF ASSOCIATION
Any amendment to these Articles of Association, whether in total or in
part, including in the case of liquidation of the Company or withdrawal of any
quotaholder, shall be approved by the quotaholders representing the totality of
the capital stock of the Company.
SOLE PARAGRAPH: The Company may be converted into a corporation ("sociedade
anonima") at any time, by resolution of the quotaholders representing the
totality of the capital stock of the Company.
ARTICLE XV
QUOTAHOLDERS AGREEMENTS
The Company and its management shall observe and perform any quotaholders
agreement duly filed at the main office of the Company, and the Company and its
management undertake to always act in accordance with the provisions of any such
agreement and to reject any act contrary thereto. In the event of any
inconsistency between these Articles of Association and any such agreement, the
terms of such agreement shall prevail.
<PAGE>
Thus agreed, the quotaholders sign this instrument in 3 (three)
counterparts of equal tenor and effect, in the presence of the witnesses below.
Rio de Janeiro, November 16, 2000
----------------------------------------------
SBC INTERNATIONAL - BRAZIL HOLDING, LTD.
pp. Alberto de Orleans e Braganca
----------------------------------------------
AM LATIN AMERICA, LLC
pp. Luiz Fernando Teixeira Pinto
---------------------------------------------
TELECOM AMERICAS LTD.
pp. Alberto de Orleans e Braganca
----------------------------------------------
MICHAEL A. MEYER
pp. Alberto de Orleans e Braganca
----------------------------------------------
PHILLIP C. ESSMAN
pp. Alberto de Orleans e Braganca
----------------------------------------------
DANIEL HAJJ ABOUMRAD
pp. Luiz Fernando Teixeira Pinto
----------------------------------------------
LUIZ FERNANDO TEIXEIRA PINTO
Visa of Responsible Attorney:
--------------------------
Alberto de Orleans e Braganca
OAB/RJ39.678
Witnesses:
1. _____________ 2. _____________
Name: Name:
RG: RG:
<PAGE>
EXHIBIT C
INITIAL BUSINESS PLAN OF THE COMPANY
[Forty pages of materials omitted.]
<PAGE>
EXHIBIT D
FORM OF GUARANTEE AND SHARE RETENTION AGREEMENT
<PAGE>
EXHIBIT D
TO THE SHAREHOLDERS AGREEMENT
FORM OF GUARANTEE AND SHARE RETENTION AGREEMENT
GUARANTEE AND SHARE RETENTION AGREEMENT, dated as of November [__],
2000 (this "Agreement"), by and among Bell Canada International Inc., a
corporation organized under the laws of Canada ("BCI"), Bell Canada
International Investments Limited, a corporation organized under the laws of the
British Virgin Islands ("Permitted BCI Subsidiary"; together with BCI, the "BCI
Companies" and each individually, a "BCI Company")), America Movil, S.A. de
C.V., a sociedad anonima de capital variable organized under the laws of Mexico
("America Movil"), AM Latin America, LLC, a Delaware limited liability company
("Permitted AM Subsidiary"), SBC International, Inc., a corporation organized
under the laws of the State of Delaware ("SBCI"), SBC International - Brazil
Holding Ltd., a company organized under the laws of the Cayman Islands
("Permitted SBCI Subsidiary"; together with SBCI, the "SBCI Companies" and each
individually, a "SBCI Company") and Ivey Holdco Ltd., a company organized under
the laws of Bermuda ("Ivey Holdco").
WHEREAS, each of BCI, America Movil (as successor in interest to
Telefonos de Mexico, S.A. de C.V.) and SBCI (individually, a "Venturer" and
together, the "Venturers") has entered into an Amended and Restated Joint
Venture Agreement, dated as of September 25, 2000 (the "Joint Venture
Agreement"), pursuant to which each Venturer has, directly or indirectly,
contributed capital and its respective ownership interest in certain companies
to a joint venture among the Venturers (the "Joint Venture"), subject to the
terms and conditions set forth therein;
WHEREAS, each of Permitted BCI Subsidiary, Permitted AM Subsidiary
and Permitted SBCI Subsidiary (individually, a "Permitted Subsidiary" and
together, the "Permitted Subsidiaries") has entered into a Shareholders
Agreement, dated as of November [__], 2000 (the "Shareholders Agreement") in
order to provide for the organization and governance of the Joint Venture;
WHEREAS, as of the date hereof, BCI owns issued and outstanding
shares of capital stock representing not less than a majority of the economic
and voting interest in the Permitted BCI Subsidiary, America Movil owns directly
or indirectly issued and outstanding capital stock representing not less than a
majority of the economic and voting interest in the Permitted AM Subsidiary and
SBCI owns issued and outstanding capital stock representing not less than a
majority of the economic and voting interest in the Permitted SBCI Subsidiary;
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Certain Definitions. Capitalized terms used but not defined in
this Agreement shall have the meanings hareholders Agreement.
2. Representations and Warranties of the BCI Companies. The BCI
Companies, jointly and severally, represent and warrant that:
(a) Existence and Power. BCI is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of organization
and has all requisite corporate power and authority to own and operate its
properties, to carry on its business and to execute, deliver and perform all of
its obligations under this Agreement. Permitted BCI Subsidiary is a corporation,
duly organized, validly existing and in good standing under the laws of the
British Virgin Islands and has all requisite corporate power and authority to
own and operate its properties, to carry on its business and to execute, deliver
and perform all of its obligations under this Agreement.
(b) Capitalization of Permitted BCI Subsidiary. All of the issued and
outstanding capital stock and other Equity Interests of the Permitted BCI
Subsidiary are owned beneficially and of record by BCI and the other holders set
forth on Schedule A attached hereto, in the amounts set forth opposite the name
of each such holder on Schedule A attached hereto (the "BCI Majority Equity
Interests"). Except as set forth in Schedule A attached hereto, no BCI Company
is a party or subject to, has authorized, issued or outstanding or is bound by,
any subscription rights, options, warrants, calls, convertible securities,
agreements, preemptive (statutory or contractual) rights, acquisition rights,
redemption rights, arrangements or commitments of any character, including,
without limitation, rights of first refusal, rights of first offer, or other
comparable rights relating to the Equity Interests of the Permitted BCI
Subsidiary or any other right or claim of any character that restrict the
transfer of, require the issuance of, or otherwise relate to (collectively,
"Transfer Agreements") any class of the capital stock or other Equity Interests
of the Permitted BCI Subsidiary. Except as set forth on Schedule A attached
hereto, no Encumbrance on any of BCI Majority Equity Interests exists or has
been recorded on the share registry of the Permitted BCI Subsidiary. Except as
set forth on Schedule A attached hereto, there are no voting trusts, stockholder
agreements, proxies or other agreements or understandings in effect with respect
to the voting, ownership or transfer of any Equity Interests of the Permitted
BCI Subsidiary.
(c) Authority. The execution, delivery and performance by each BCI
Company of this Agreement (i) have been duly authorized by all necessary
corporate action; (ii) will not conflict with or violate any Law or Governmental
Order applicable to such BCI Company or any of its assets, properties or
businesses; and (iii) will not violate, conflict with or result in a breach of
any provision of, or result in the imposition of any Encumbrance upon any of the
assets of the BCI Companies under, any of its certificate of incorporation and
by-laws or similar organizational documents ("Constitutive Documents") or any
agreement or other requirement by which it or any of its properties may be bound
or affected. Each BCI Company has duly executed and delivered this Agreement,
and this Agreement constitutes the legal, valid and binding obligation of each
BCI Company enforceable in accordance with its terms, except as the
enforceability hereof may be limited by bankruptcy, insolvency, reorganization
or other similar laws affecting the enforcement of creditors' rights generally
or general principles of equity, regardless of whether such enforcement is
considered in a proceeding in equity or at law (collectively, the
"Enforceability Exceptions"). No consent of any Person, including the
shareholders of the BCI Companies, is required in connection with the execution,
delivery and performance of this Agreement or the validity or enforceability of
this Agreement against the BCI Companies, except such consents as have been
obtained.
(d) Government Approval. The execution, delivery and performance by
each BCI Company of this Agreement do not and will not require any consent,
approval, authorization or other order of, action by, filing with or
notification to, any Governmental Authority.
(e) No Immunity. Each BCI Company is subject to civil and commercial
law with respect to its obligations hereunder and under the other Transaction
Documents to which it is a party, and its execution, delivery and performance of
this Agreement and the other Transaction Documents to which each is a party
constitute private and commercial acts rather than public or governmental acts.
No BCI Company or any of its respective properties or revenues has any immunity
from suit, court jurisdiction, attachment prior to judgment, attachment in aid
of execution of a judgment, set-off, execution of a judgment or from any other
legal process with respect to its respective obligations under this Agreement.
(f) Control. No Person other than BCI has the power, by contract or
otherwise, to direct or influence the exercise by the Permitted BCI Subsidiary
of any rights under this Agreement or the other Transaction Documents to which
the Permitted BCI Subsidiary is a party, including, without limitation, rights
pursuant to Section 3.08 of the Shareholders Agreement.
3. Representations and Warranties of the America Movil and the
Permitted AM Subsidiary. America Movil and the Permitted AM Subsidiary, jointly
and severally, represent and warrant that:
(a) Existence and Power. America Movil is a sociedad anonima de
capital variable, duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization and has all requisite corporate
power and authority to own and operate its properties, to carry on its business
and to execute, deliver and perform all of its obligations under this Agreement.
Permitted AM Subsidiary is a limited liability company, duly organized, validly
existing and in good standing under the laws of Delaware and has all requisite
corporate power and authority to own and operate its properties, to carry on its
business and to execute, deliver and perform all of its obligations under this
Agreement.
(b) Capitalization of Permitted AM Subsidiary. All of the issued and
outstanding capital stock and other Equity Interests of the Permitted AM
Subsidiary are owned beneficially and of record by America Movil through its
wholly owned subsidiaries Sercotel, S.A. de C.V. and E-Commerce Data Services,
S.A. de C.V., each a sociedad anonima de capital variable organized under the
laws of Mexico (together with the Permitted AM Subsidiary, the "AM
Subsidiaries"), as set forth on Schedule B attached hereto, (the "America Movil
Majority Equity Interests"). Except as set forth in Schedule B attached hereto,
neither America Movil nor any AM Subsidiary is a party or subject to, has
authorized, issued or outstanding or is bound by, any Transfer Agreements in
respect of any class of capital stock or other Equity Interests of the Permitted
AM Subsidiary or any other AM Subsidiaries. Except as set forth on Schedule B
attached hereto, no Encumbrance on any of America Movil Majority Equity
Interests exists or has been recorded on the share registry of the Permitted AM
Subsidiary or any other AM Subsidiaries. Except as set forth on Schedule B
attached hereto, there are no voting trusts, stockholder agreements, proxies or
other agreements or understandings in effect with respect to the voting,
ownership or transfer of any Equity Interests of the Permitted AM Subsidiary or
any other AM Subsidiaries.
(c) Authority. The execution, delivery and performance by each of
America Movil and the Permitted AM Subsidiary of this Agreement (i) have been
duly authorized by all necessary corporate action; (ii) will not conflict with
or violate any Law or Governmental Order applicable to America Movil or the
Permitted AM Subsidiary or any of their respective assets, properties or
businesses; and (iii) will not violate, conflict with or result in a breach of
any provision of, or result in the imposition of any Encumbrance upon any of the
assets of America Movil or the Permitted AM Subsidiary under, any of their
respective Constitutive Documents or any agreement or other requirement by which
they or any of their respective properties may be bound or affected. Each of
America Movil and the Permitted AM Subsidiary has duly executed and delivered
this Agreement, and this Agreement constitutes the legal, valid and binding
obligation of each America Movil and the Permitted AM Subsidiary enforceable in
accordance with its terms, except as the enforceability hereof may be limited by
the Enforceability Exceptions. No consent of any Person, including the
respective shareholders of America Movil and the Permitted AM Subsidiary, is
required in connection with the execution, delivery and performance of this
Agreement or the validity or enforceability of this Agreement against America
Movil or the Permitted AM Subsidiary, except such consents as have been
obtained.
(d) Government Approval. The execution, delivery and performance by
each of America Movil and the Permitted AM Subsidiary of this Agreement do not
and will not require any consent, approval, authorization or other order of,
action by, filing with or notification to, any Governmental Authority.
(e) No Immunity. Each of America Movil and the Permitted AM
Subsidiary is subject to civil and commercial law with respect to its
obligations hereunder and under the other Transaction Documents to which it is a
party, and its execution, delivery and performance of this Agreement and the
other Transaction Documents to which each is a party constitute private and
commercial acts rather than public or governmental acts. Neither America Movil
nor the Permitted AM Subsidiary nor any of their respective properties or
revenues have any immunity from suit, court jurisdiction, attachment prior to
judgment, attachment in aid of execution of a judgment, set-off, execution of a
judgment or from any other legal process with respect to its respective
obligations under this Agreement.
(f) Control. No Person other than America Movil and the AM
Subsidiaries has the power, by contract or otherwise, to direct or influence the
exercise by the Permitted AM Subsidiary of any rights under this Agreement or
the other Transaction Documents to which the Permitted AM Subsidiary is a party,
including, without limitation, rights pursuant to Section 3.08 of the
Shareholders Agreement.
4. Representations and Warranties of the SBCI Companies. The SBCI
Companies, jointly and severally, represent and warrant that:
(a) Existence and Power. SBCI is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization and has all requisite corporate power and authority to own and
operate its properties, to carry on its business and to execute, deliver and
perform all of its obligations under this Agreement. Permitted SBCI Subsidiary
is a company, duly organized, validly existing and in good standing under the
laws of the Cayman Islands and has all requisite corporate power and authority
to own and operate its properties, to carry on its business and to execute,
deliver and perform all of its obligations under this Agreement.
(b) Capitalization of Permitted SBCI Subsidiary. All of the issued
and outstanding capital stock and other Equity Interests of the Permitted SBCI
Subsidiary are owned beneficially and of record by SBCI and the other holders
set forth on Schedule C attached hereto, in the amounts set forth opposite the
name of each such holder on Schedule C attached hereto (the "SBCI Majority
Equity Interests"). Except as set forth in Schedule C attached hereto, no SBCI
Company is a party or subject to, has authorized, issued or outstanding or is
bound by, any Transfer Agreements in respect of any class of capital stock or
other Equity Interests of the Permitted SBCI Subsidiary. Except as set forth on
Schedule C attached hereto, no Encumbrance on any of SBCI Majority Equity
Interests exists or has been recorded on the share registry of the Permitted
SBCI Subsidiary. Except as set forth on Schedule C attached hereto, there are no
voting trusts, stockholder agreements, proxies or other agreements or
undertakings in effect with respect to the voting, ownership or transfer of any
Equity Interests of the Permitted SBCI Subsidiary.
(c) Authority. The execution, delivery and performance by each SBCI
Company of this Agreement (i) have been duly authorized by all necessary
corporate action; (ii) will not conflict with or violate any Law or Governmental
Order applicable to such SBCI Company or any of its assets, properties or
businesses; and (iii) will not violate, conflict with or result in a breach of
any provision of, or result in the imposition of any Encumbrance upon any of the
assets of the SBCI Companies under, any of its Constitutive Documents or any
agreement or other requirement by which it or any of its properties may be bound
or affected. Each SBCI Company has duly executed and delivered this Agreement,
and this Agreement constitutes the legal, valid and binding obligation of each
SBCI Company enforceable in accordance with its terms, except as the
enforceability hereof may be limited by the Enforceability Exceptions. No
consent of any Person, including the shareholders of the SBCI Companies, is
required in connection with the execution, delivery and performance of this
Agreement or the validity or enforceability of this Agreement against the SBCI
Companies, except such consents as have been obtained.
(d) Government Approval. The execution, delivery and performance by
each SBCI Company of this Agreement do not and will not require any consent,
approval, authorization or other order of, action by, filing with or
notification to, any Governmental Authority.
(e) No Immunity. Each SBCI Company is subject to civil and commercial
law with respect to its obligations hereunder and under the other Transaction
Documents to which it is a party, and its execution, delivery and performance of
this Agreement and the other Transaction Documents to which each is a party
constitute private and commercial acts rather than public or governmental acts.
No SBCI Company or any of its respective properties or revenues have any
immunity from suit, court jurisdiction, attachment prior to judgment, attachment
in aid of execution of a judgment, set-off, execution of a judgment or from any
other legal process with respect to its respective obligations under this
Agreement.
(f) Control. No Person other than SBCI has the power, by contract or
otherwise, to direct or influence the exercise by the Permitted SBCI Subsidiary
of any rights under this Agreement or the other Transaction Documents to which
the Permitted SBCI Subsidiary is a party, including, without limitation, rights
pursuant to Section 3.08 of the Shareholders Agreement.
5. Covenants of the Permitted Subsidiaries. Each Permitted Subsidiary
covenants and agrees, with respect to itself only, as follows:
(a) Improper Sale or Encumbrance. No Permitted Subsidiary shall
recognize any purported Sale of, or Encumbrance with respect to, any shares of
its capital stock or other Equity Interests in violation of this Agreement or
the other Transaction Documents, and any such Sale or Encumbrance shall be null
and void and the Permitted Subsidiary shall not give any effect in its stock
records to such attempted Sale or Encumbrance.
(b) Implementation. Such Permitted Subsidiary shall take all actions
as shall be necessary to cause the effective implementation of the provisions of
Section 5(a), including registration of this Agreement on its books and
registration with or notification to the appropriate Governmental Authority, if
any.
(c) Legend. Such Permitted Subsidiary shall cause a legend to be
affixed to all certificates representing its capital stock owned directly or
indirectly by the Venturer of such Permitted Subsidiary, stating that the
transfer of such capital stock is restricted by the terms of this Agreement and
the other Transaction Documents.
6. Covenants of the Venturers. Each Venturer covenants and agrees,
with respect to itself only, as set forth below:
(a) Retention of Stock of the Permitted Subsidiaries. Such Venturer
(i) shall maintain directly or indirectly legal and beneficial ownership of a
majority of the issued and outstanding capital stock of each of its Permitted
Subsidiaries and of all other Equity Interests or securities convertible into,
or exercisable for, any shares of the capital stock or other Equity Interests of
any Permitted Subsidiary held by it; which capital stock and other Equity
Interests shall at all times represent a majority of the economic and voting
interest in each such Permitted Subsidiary, (ii) shall not, except in accordance
with Section 4.06 of the Shareholders Agreement, directly or indirectly sell,
assign, transfer or otherwise dispose of, whether voluntarily or involuntarily,
any such capital stock or other Equity Interests or securities convertible into,
or exercisable for, any shares of the capital stock or other Equity Interests of
any Permitted Subsidiary held directly or indirectly by it if the effect of any
such sale, assignment, transfer or disposal would be to reduce the capital stock
or other Equity Interests held directly or indirectly by such Venturer to less
than a majority of the economic and voting interest in such Permitted
Subsidiary, and (iii) shall not issue, or permit the issuance of, subscriptions,
options, warrants, calls or preemptive rights that relate to the capital stock
of any Subsidiary or Affiliate if the effect of any such issuance would be to
reduce the capital stock or other Equity Interests held directly or indirectly
by such Venturer to less than a majority of the economic and voting interest in
such Permitted Subsidiary.
(b) Encumbrances. Such Venturer shall not create, assume, or
otherwise permit to exist directly or indirectly any Encumbrance on any of the
capital stock of the Permitted Subsidiary held by it or on any of the capital
stock of any Subsidiary or Affiliate that directly or indirectly holds any of
the capital stock of such Permitted Subsidiary.
(c) Compliance with Affirmative and Negative Covenants. Such Venturer
shall perform and comply with each of the covenants under the Shareholders
Agreement and any other Transaction Document applicable to any Permitted
Subsidiary held by it (which covenants shall be deemed to be incorporated herein
as if the same were set out in full).
(d) Control. Such Venturer shall not permit or allow any Person other
than the Venturer or its Subsidiaries, by contract or otherwise, to direct or
influence the exercise by each of its Permitted Subsidiaries of any rights under
this Agreement or the other Transaction Documents to which such Permitted
Subsidiaries are a party, including, without limitation, rights pursuant to
Section 3.08 of the Shareholders Agreement.
7. Guarantee. (a) By execution of this Agreement, each Venturer
hereby absolutely, unconditionally and irrevocably guaranties (the "Guarantee")
all of the terms, provisions, representations, warranties, covenants and
undertakings of any Permitted Subsidiary held by it, that are set forth herein,
in the Shareholders Agreement and each of the other Transaction Documents to
which any Permitted Subsidiary held by it is a party (collectively, the
"Permitted Subsidiary Agreements").
(a) The obligations of each Venturer under the Guarantee are
independent obligations of such Venturer and a separate action or actions may be
brought and prosecuted against any such Venturer, regardless of whether any
action is brought against its Permitted Subsidiary or whether such Permitted
Subsidiary is joined in any such action or actions.
(b) The liability of each Venturer under the Guarantee shall be
irrevocable, absolute and unconditional; provided, that, except as set forth in
(i) the Guaranty dated as of November [__], 2000 by BCI in favor of Ivey Holdco
in respect of the BCI Promissory Note, (ii) the Guaranty dated as of November
[__], 2000 by BCI in favor of Ivey Holdco in respect of the BCI Special Notes
and (iii) the Guaranty dated as of November [__], 2000 by America Movil in favor
of Ivey Holdco, such Venturer shall be entitled to any defenses its Permitted
Subsidiary may now or hereafter have in any way relating to the Permitted
Subsidiary Agreements or any other circumstance (including, without limitation,
any statute of limitations) or any existence of or reliance on any
representation by any Person that might otherwise constitute a defense available
to, or a discharge of, such Venturer's Permitted Subsidiary. The Guarantee shall
continue to be effective and reinstated, as the case may be, upon the
insolvency, bankruptcy or reorganization of any Permitted Subsidiary.
(c) Each Venturer hereby waives promptness, diligence, notice of
acceptance and any other notice with respect to any of its obligations under the
Guarantee. Each Venturer waives any right to revoke the Guarantee, and
acknowledges and agrees that the Guarantee is continuing in nature and applies
to all obligations of such Venturer hereunder, whether existing now or in the
future. Each Venturer acknowledges that it will receive substantial direct and
indirect benefits from the Permitted Subsidiary Agreements and that the waivers
set forth in this Section 7 are knowingly made in contemplation of such
benefits.
(d) The Guarantee of each Venturer shall remain in full force and
effect, and the obligations of each Venturer thereunder shall continue and not
be discharged until such time as the obligations of any of its Permitted
Subsidiaries under each Permitted Subsidiary Agreement shall have terminated and
by of no further force and effect.
8. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made (and
shall be deemed to have been duly given or made upon receipt) by delivery in
person, by courier service, by facsimile, by e-mail or by registered or
certified mail (postage prepaid, return receipt requested) to the respective
parties at the following addresses (or at such other address for a party as
shall be specified in a notice given in accordance with this Section 8):
(a) if to the BCI Companies:
Bell Canada International Inc.
1000, rue de La Gauchetiere
Suite 1100
Montreal, Quebec
H3B 4Y8 Canada
Facsimile: (514) 392-2470
Attention: Chief Executive Officer
with a copy to:
Bell Canada International Inc.
1000, rue de La Gauchetiere
Suite 1100
Montreal, Quebec
H3B 4Y8 Canada
Facsimile: (514) 392-2342
Attention: Vice President Law and Corporate Secretary
with a further copy to:
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Facsimile: (212) 848-7179
Attention: Alberto Luzarraga, Jr.
(b) if to America Movil:
America Movil, S.A. de C.V.
Lago Alberto 366
Colonia Anahuac
11320 Mexico, D.F. Mexico
Facsimile: (525) 625-3852
Attention: Daniel Hajj
with a copy to:
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006
Facsimile: (212) 225-3999
Attention: Nicolas Grabar, Esq.
with a further copy to:
Franck, Galicia, Duclaud y Robles, S.C.
Avenida Paseo de las Palmas
No. 305 - 3rd Floor
Colonia Lomas de Chapultepec
Mexico D.F., 11000
Facsimile: (525) 540 9202
Attention: Rafael Robles
(c) if to AM Latin America:
AM Latin America, LLC
c/o Corporation Trust Center
1209 Orange Street
Wilmington, New Castle County, Delaware 19801
with a copy to:
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006
Facsimile: (212) 225-3999
Attention: Nicolas Grabar, Esq.
with a further copy to:
Franck, Galicia, Duclaud y Robles, S.C.
Avenida Paseo de las Palmas
No. 305 - 3rd Floor
Colonia Lomas de Chapultepec
Mexico D.F., 11000
Facsimile: (525) 540 9202
Attention: Rafael Robles
(d) if to the SBCI Companies:
SBC International, Inc.
175 East Houston Street
San Antonio, TX 78205
Facsimile: (210) 351-5034
Attention: Senior Executive Vice President,
Corporate Development
with a copy to:
SBC International, Inc.
175 East Houston Street
San Antonio, TX 78205
Facsimile: (210) 351-3488
Attention: General Attorney,
Mergers and Acquisitions
with a further copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
Facsimile: (212) 310-8007
Attention: Howard Chatzinoff, Esq.
(e) if to Ivey Holdco:
[------------------]
[------------------]
[------------------]
Facsimile: [__________________]
Attention: [__________________]
with a copy to:
9. Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any Law or public policy, all
other terms and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner in order that the
transactions contemplated hereby are consummated as originally contemplated to
the greatest extent possible.
10. Entire Agreement. This Agreement, the BCI Guaranty, the America
Movil Guaranty and the other Transaction Documents constitute the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersede all prior agreements and undertakings, both written and oral, among
the parties with respect to the subject matter hereof.
11. Assignment. This Agreement shall be binding upon and shall inure
to the benefit of the successors and permitted assigns of the parties hereto;
provided, that, except in accordance with Section 4.06 of the Shareholders
Agreement, no Venturer, nor any Permitted Subsidiary thereof, shall without the
prior written consent of the other Venturers, assign or delegate all or any part
of its obligations hereunder.
12. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York applicable to contracts
executed in and to be performed in that State without regard to conflicts of
law.
13. Counterparts. This Agreement may be executed and delivered in one
or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original and
all of which taken together shall constitute one and the same agreement.
14. Disputes. The parties agree that any controversy, claim or
dispute arising out of or relating to this Agreement or the breach, termination,
enforceability or validity hereof should be resolved in accordance with the
provisions of Sections 8.12 and 8.13 of the Joint Venture Agreement.
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed as of the date first written above by its respective
officers thereunto duly authorized.
BELL CANADA INTERNATIONAL INC.
By
-----------------------------
Name:
Title:
BELL CANADA INTERNATIONAL INVESTMENTS
LIMITED
By
-----------------------------
Name:
Title:
AMERICA MOVIL, S.A. de C.V.
By
-----------------------------
Name:
Title:
AM LATIN AMERICA, LLC
By
-----------------------------
Name:
Title:
SBC INTERNATIONAL, INC.
By
-----------------------------
Name:
Title:
SBCI INTERNATIONAL - BRAZIL HOLDING LTD.
By
-----------------------------
Name:
Title:
IVEY HOLDCO LTD.
By
-----------------------------
Name:
Title:
<PAGE>
SCHEDULE A
Capitalization of the Permitted BCI Subsidiary
Equity Interests of Permitted BCI Subsidiary
Authorized capital: [_________________]
Issued and outstanding capital: [_________________]
Percentage held directly by Bell Canada International Inc.:
100%
Transfer Agreements: [______________]
Encumbrances on BCI Majority Equity Interests: [______________]
Voting Trusts, Stockholder Agreements, Proxies or other Agreements:
[______________]
<PAGE>
SCHEDULE B
Capitalization of the Permitted AM Subsidiary and the Other AM Subsidiaries
Equity Interests of AM Latin America, LLC
Authorized capital: 1,000 Units
Issued and outstanding capital: 1,000 Units
Percentage held directly by E-Commerce Data Solutions, S.A.
de C.V.: 100%
Equity Interests of E-Commerce Data Solutions, S.A. de C.V.
Authorized capital: [________________]
Issued and outstanding capital: [________________]
Percentage held directly by Sercotel, S.A. de C.V.: 100%
Equity Interests of Sercotel, S.A. de C.V.
Authorized capital: [________________]
Issued and outstanding capital: [________________]
Percentage held directly by America Movil, S.A. de C.V.: 100%
Transfer Agreements: [None.]
Encumbrances on America Movil Majority Equity Interests: [None.]
Voting Trusts, Stockholder Agreements, Proxies or other Agreements: [None.]
[Subject to review by America Movil.]
<PAGE>
SCHEDULE C
Capitalization of the Permitted SBCI Subsidiary
Equity Interests of Permitted SBCI Subsidiary
Authorized capital: [_________________]
Issued and outstanding capital: [_________________]
Percentage held directly by SBC International, Inc.:
100%
Transfer Agreements: [______________]
Encumbrances on SBCI Majority Equity Interests: [______________]
Voting Trusts, Stockholder Agreements, Proxies or other Agreements:
[______________]
<PAGE>
EXHIBIT E
FORM OF ACCESSION CERTIFICATE
THIS ACCESSION CERTIFICATE, dated as of [________] ("Accession
Certificate") is executed and delivered by [__________], a [__________]
organized and existing under the laws of [___________] (the "Accessor"). By
execution and delivery of this Accession Certificate, the Accessor hereby
represents, warrants, covenants and agrees as follows:
1. By execution and delivery of this Accession Certificate,
the Accessor will (i) become a party to the Shareholders Agreement dated as of
[________], 2000, among Bell Canada International Investments Limited, AM Latin
America, LLC, SBC International - Brazil Holding, Ltd. and Telecom Americas Ltd.
and (ii) become legally bound thereby, all rights and obligations of
[___________] thereunder being assigned to and assumed by the Accessor.
2. This Accession Certificate shall be deemed to be a part of
the Shareholders Agreement, and is subject to all of the terms and provisions of
the Shareholders Agreement.
3. The principal location and address of the Accessor (to
which all communications and notices to the Accessor are to be sent) is:
[name and address]
Attn: [__________]
Telephone: [___________]
Facsimile: [___________]
By written notice to the other parties to the Shareholders Agreement, the
Accessor may change the address to which communications and notices to the
Accessor should be sent.
IN WITNESS WHEREOF, the Accessor has caused its duly authorized officer
to execute and deliver this Accession Certificate as of the date first above
written.
By _______________________
Name:
Title:
ACKNOWLEDGED AND AGREED
AS OF THE DATE FIRST ABOVE WRITTEN:
TELECOM AMERICAS LTD.
By ______________________________
Name:
Title:
[SELLING SHAREHOLDER]
By ______________________________
Name:
Title:
[SELLING SHAREHOLDER]
By ______________________________
Name:
Title:
<PAGE>
EXHIBIT F
FORM OF REGISTRATION RIGHTS AGREEMENT
<PAGE>
REGISTRATION RIGHTS AGREEMENT, dated as of _____________, 2000 (this
"Agreement"), among Bell Canada International Inc., a corporation organized
under the laws of Canada (the "Corporation"), and the shareholders of the
Corporation identified on Annex I, as such Annex may be amended pursuant to
Section 14 hereof (each a "Shareholder" and, collectively, the "Shareholders").
R E C I T A L S
WHEREAS, certain of the Shareholders and/or their Affiliates have
entered into a Shareholder Agreement dated as of _________, 2000 (the
"Shareholders Agreement") among a subsidiary of the Corporation, the
Shareholders (other than BCE Inc.) and/or their Affiliates, and their joint
venture vehicle (the "Venture Company");
WHEREAS, BCE Inc. has entered into a Registration Rights Agreement
dated as of October 6, 1997 with the Corporation (the "BCE Agreement");
WHEREAS, the consolidation of the Venture Company with the
Corporation in accordance with the terms and conditions of the Shareholders
Agreement (the "Consolidation") has been proposed by the Corporation and each of
the Qualified Offer Conditions (as defined therein) has been satisfied;
WHEREAS, in order to induce each other Shareholder to enter into the
Consolidation, each Shareholder and the Corporation has agreed to enter into
this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements and covenants hereinafter set forth, the parties hereby agree as
follows:
SECTION 1. Definitions. (a) As used in this Agreement, the following
terms shall have the following meanings:
"Commission" means the U.S. Securities and Exchange Commission or any
successor agency.
"Common Shares" means the common shares, without par value per share
of the Corporation and any securities of the Corporation into which such shares
may be converted or exchanged.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder, all as
the same shall be in effect from time to time.
"Original Shareholders" shall mean the Shareholders identified on
Annex I as of the date hereof.
"Primary Shares" means, at any time, the authorized but unissued
Common Shares; provided, however, that for the purposes of Section 2, the term
"Primary Shares" shall include Common Shares held by officers and directors of
the Corporation.
"Registrable Shares" means the Common Shares issuable or issued in a
Qualified Offer and the Common Shares held from time to time by the Original
Shareholders or their Permitted Transferees. For purposes of this Agreement, any
Registrable Shares shall cease to be Registrable Shares (i) when they have been
registered under the Securities Act (the registration statement in connection
therewith has been declared effective) and disposed of pursuant to such
effective registration statement, (ii) when they are sold by a person in a
transaction in which the rights under the provisions of this Agreement are not
assigned, or (iii) when they have been sold or distributed pursuant to Rule 144
(including, without limitation, Rule 144(k)).
"Registration Expenses" means all out-of-pocket expenses incident to
the Corporation's performance of, or compliance with, Section 2 and Section 3,
including, without limitation, all registration and filing fees (including
filing fees with respect to the National Association of Securities Dealers,
Inc.), all fees and expenses of complying with applicable securities Laws
(including reasonable fees and disbursements of underwriters' counsel in
connection with any "blue sky" memorandum or survey), all printing expenses, all
internal expenses, all "road show" and marketing expenses, all listing fees, all
registrars' and transfer agents' fees, the fees and disbursements of counsel for
the Corporation and of its independent public accountants, including the
expenses of any special audits and/or "comfort" letters required by or incident
to such performance and compliance, the reasonable fees and disbursements of one
outside counsel retained by the Holders holding Common Shares being registered
(which counsel shall be satisfactory to the holders of a majority of the
Registrable Shares being registered), but excluding Selling Expenses, if any,
which shall be borne by the Holders holding Common Shares being registered, in
all cases.
"Rule 144" means Rule 144 promulgated under the Securities Act or any
successor rule thereto or any complementary rule thereto (such as Rule 144A).
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder, all as the
same shall be in effect from time to time.
"Selling Expenses" means all underwriting discounts, commissions or
brokers' commissions and applicable transfer taxes incurred in connection with
the sale or other disposition of Common Shares or other securities for or on
behalf of a Holder's account.
(b) Capitalized terms, including, without limitation, the terms
"Affiliate", "Business Day", "Capital Stock", "Law", "Permitted Transferee",
"Person", "Qualified Offer", and "Specified Assignee", used but not defined
herein have the meanings ascribed to such terms in the Shareholders Agreement,
which meanings are hereby incorporated herein with the same effect as if fully
set forth herein.
(c) Each of the terms set forth below shall have the meaning ascribed
thereto in the section indicated in respect of such term.
Agreement.........................................Preamble
Consolidation.....................................Recitals
Corporation.......................................Preamble
Dispute.........................................Section 22
Dispute Notice..................................Section 22
Holder........................................Section 2(b)
ICC.............................................Section 23
Requesting Shareholder........................Section 2(a)
Rules...........................................Section 23
Shareholder.......................................Preamble
Shareholders Agreement............................Recitals
SECTION 2. Request for Registration. (a) At any time after the date
hereof, if the Corporation shall receive from any Shareholder (in such capacity,
a "Requesting Shareholder"), a written request that the Corporation effect any
registration under the Securities Act, or, mutatis mutandis, under the
securities Laws then applicable in Canada, with respect to the sale and
distribution of all or a part of the Registrable Shares in a public offering,
the Corporation will:
(i) promptly give written notice of the proposed registration,
qualification or compliance to each of the other Shareholders
(collectively, the "Non-Requesting Shareholders"); and
(ii) as soon as practicable, use its best efforts to effect such
registration (including, without limitation, the execution of an
undertaking to file post-effective amendments, appropriate qualification
under applicable securities Laws, including, without limitation, "blue sky"
laws, and appropriate compliance with applicable regulations issued under
the Securities Act or the securities Laws then applicable in Canada, as the
case may be) as may be so requested and as would permit or facilitate the
sale and distribution of all or such portion of such Registrable Shares as
are specified in such request, together with all or such portion of the
Registrable Shares of the Non-Requesting Shareholder joining in such
request as are specified in a written request received by the Corporation
within ten (10) Business Days after written notice from the Corporation is
given under clause 2(a)(i) above; provided that the Corporation shall not
be obligated to effect, or take any action to effect, any such registration
pursuant to this Section 2:
(A) for a period of up to 150 days (a "Deferral Period"), each of
which Deferral Periods may be renewed for an additional Deferral
Period, in the case of any Deferred Period (or its renewal), if the
board of directors of the Corporation (1) determines in good faith
that (a) it is in possession of material, nonpublic information
concerning an acquisition, merger, recapitalization, consolidation,
reorganization, financing or other material transaction by or of the
Corporation or concerning pending or threatened litigation, and (b)
disclosure of such information would jeopardize any such transaction
or litigation and would be seriously detrimental to the Corporation
and (2) delivers written notice to the Requesting Shareholders and
Non-Requesting Shareholders that, in its good faith judgment, it would
not be in the best interests of the shareholders of the Corporation
for such Registration to be effected;
(B) in any particular jurisdiction in which the Corporation would
be required to execute a general consent to service of process in
effecting such registration, qualification or compliance, unless the
Corporation is already subject to service in such jurisdiction and
except as may be required by the Securities Act or applicable rules or
regulations thereunder;
(C) with respect to any Original Shareholder (together with its
Permitted Transferees and Specific Assignees), after the Corporation
has effected three (3) registrations pursuant to this Section 2(a) at
the request of such Original Shareholder (together with its Permitted
Transferees and Specific Assignees), provided, however, that, after
the Corporation has effected three such registrations for such
Original Shareholder (together with its Permitted Transferees and
Specific Assignees), its obligation under this Section 2 to effect
each registration requested by such Shareholder shall continue for the
term of this Agreement to the extent, and solely to the extent, that
such Shareholder shall have agreed that Section 4 hereof shall be
inapplicable to any such registration and that all Registration
Expenses and Selling Expenses in connection with any such requested
registration shall be borne by such Shareholder (or pro rata among it
and the other selling --- ---- Shareholders, as the case may be);
provided, further however, that any request under Section 2(a)
-------- shall be deemed not to have been made if (i) it does not
result in a registration that is declared or ordered effective by the
applicable governmental authorities or agencies, including without
limitation, the SEC, and that remains effective for not less than 180
days (or such shorter period as will terminate when all Registrable
Shares covered by such registration have been sold or withdrawn), or,
if such registration relates to an underwritten offering, such longer
period, if any, as in the opinion of counsel for the underwriters a
prospectus is required by law to be delivered in connection with sales
of the Registrable Shares by an underwriter or dealer (in either case,
such period being the "Demand Period"), (ii) (x) during the Demand
Period such registration is terminated by any stop
order, injunction or other order or requirement of any governmental
agency or court or (y) the conditions to closing specified in the
underwriting agreement, if any, entered into in connection with such
registration are not satisfied other than by reason of a wrongful act,
misrepresentation or breach of an applicable underwriting agreement by
the selling Holders of Registrable Shares, (iii) the Requesting
Holders withdraw their request for registration and bear the
Registration Expenses, all in accordance with Section 4 below, or (iv)
more than 40% of the aggregate number of all Registrable Shares
requested by such Shareholder to be included in such registration are
excluded from the offering pursuant to Section 2(b).
(D) if the Registrable Shares requested by the Requesting
Shareholder and any Non-Requesting Shareholder to be registered
pursuant to such request do not represent in the aggregate at least 5%
of the then outstanding Registrable Shares.
The registration statement filed pursuant to the request of the Requesting
Shareholders and any Non-Requesting Shareholder may, subject to the provisions
of Section 2(b) below, include Primary Shares.
(b) The Corporation shall be entitled to select the managing
underwriter of the underwriting; provided, however, that any such managing
underwriter shall be an investment banking firm of internationally recognized
reputation acceptable to the selling Shareholders representing a majority of the
Registrable Shares to be included in such registration. The Requesting
Shareholders and the Non-Requesting Shareholders (collectively, the "Holders")
proposing to distribute their securities through such underwriting shall enter
into an underwriting agreement in customary form with the managing underwriter
or underwriters selected for such underwriting by the Corporation reasonably
acceptable to the Corporation. Notwithstanding any other provision of this
Section 2, if the managing underwriter advises the Requesting Shareholders in
writing that the inclusion of all Registrable Shares and/or Primary Shares
proposed to be included in such registration would interfere with the successful
marketing (including pricing) of the Registrable Shares proposed to be included
in such registration, then the number of Registrable Shares and/or Primary
Shares to be included in such registration shall be reduced to such number as
shall, in the managing underwriters opinion, not be likely to have such an
effect, which shall be included in the following order:
(i) first, the Registrable Shares requested to be included in such
registration that are held by the Requesting Shareholders (or, if
necessary, such Registrable Shares pro rata among the holders thereof based
upon the number of Registrable Shares requested to be registered by each
such holder);
(ii) second, the Registrable Shares requested to be included in such
registration that are held by the Non-Requesting Shareholders (or, if
necessary, such Registrable Shares pro rata among the holders thereof based
upon the number of Registrable Shares requested to be registered by each
such holder); and
(iii) third, the Primary Shares.
No Registrable Shares or Primary Shares excluded from the
underwriting by reason of the managing underwriter's marketing limitation shall
be included in such registration.
(c) In the event that a registration is requested under this Section
2 and each of the Requesting Shareholders making such request later determine
not to sell their Registrable Securities in connection with the registration
requested, then the Requesting Shareholders shall give prompt notice to the
Corporation and the other Shareholders, as applicable, that the registration
requested is no longer required and the request is thereby withdrawn. Upon
receipt of such notice, the Corporation shall cease all efforts to secure
registration and shall take all action necessary and reasonably practicable to
prevent the commencement of effectiveness for any registration statement that it
is preparing or has prepared in connection with the withdrawn request.
SECTION 3. Piggyback Registration. (a) If the Corporation at any time
proposes to register any Common Shares under the Securities Act that would
permit registration of Registrable Shares for sale to the public under the
Securities Act, or, mutatis mutandis, under the securities Laws then applicable
in Canada (whether for its own account or for the account of its shareholders),
the Corporation will, each such time, give prompt written notice to all holders
of Registrable Shares of its intention to do so, describing such securities and
specifying the form and manner and the other relevant facts involved in such
proposed registration (including, without limitation, whether or not such
registration will be in connection with an underwritten offering of Common
Shares and, if so, the identity of the managing underwriter and whether such
offering will be pursuant to a "best efforts" or "firm commitment"
underwriting). Upon the written request of the holders of Registrable Shares to
include Registrable Shares in such registration (which request (i) must be
delivered to the Corporation within 30 days after delivery by the Corporation of
any notice pursuant to this Section 3(a), (ii) shall specify the number of
Registrable Shares proposed to be included in such registration and (iii) shall
state the intended method of disposition of such Registrable Shares), the
Corporation shall use its best efforts to cause all such Registrable Shares to
be included in such registration on the same terms and conditions as the
securities otherwise being sold in such registration; provided, however, that:
(i) if, at any time after giving such written notice of its intention
to register any of such securities proposed to be registered by the
Corporation and prior to the effective date of the registration statement
filed in connection with such registration, the Corporation shall determine
for any reason not to register such securities, the Corporation may, at its
election, give written notice of such determination to each holder of
Registrable Shares that has requested to register Registrable Shares and,
thereupon, the Corporation shall be relieved of its obligation to register
any Registrable Shares in connection with such registration (but not of its
obligation to pay the Registration Expenses in connection therewith to the
extent provided in Section 4 below); and
(ii) if (A) the registration so proposed by the Corporation involves
an underwritten offering of the securities to be so registered, to be
distributed by or through one or more underwriters of internationally
recognized standing under underwriting terms appropriate for such a
transaction, and (B) the managing underwriter of such underwritten offering
shall advise the Corporation in writing that, in its judgment, the number
of Registrable Shares and any other securities proposed to be included in
such offering by the Corporation should be limited (1) due to market
conditions or (2) because inclusion of all Registrable Shares proposed to
be included in such registration is reasonably likely to have a significant
adverse effect on the successful marketing (including pricing) of the
Primary Shares proposed to be registered by the Corporation, then the
Corporation will promptly advise each such Holder of Registrable Shares
thereof and may require, by written notice to each such Holder accompanying
such advice, that, to the extent necessary to meet such limitation, the
number of Primary Shares and Registrable Shares proposed to be included in
such registration shall be reduced to such number as shall, in the managing
underwriter's opinion, not be likely to have such an effect included in the
following order:
(x) first, the Primary Shares; and
(y) second, the Registrable Shares requested to be included in
such registration (or, if necessary, such Registrable Shares pro rata
among the holders thereof based upon the number of Registrable Shares
requested to be registered by each such holder).
(b) The Corporation shall not be obligated to effect any registration
of Registrable Shares under this Section 3 that is incidental to the
registration of any of its securities in connection with any merger,
acquisition, exchange offer, dividend reinvestment plan or stock option or other
employee benefit plan.
SECTION 4. Expenses. Except as provided for in Section 2(a)(ii)(C),
all Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to this Agreement shall be borne by the
Corporation, and all Selling Expenses shall be borne by the Holders of the
securities so registered pro rata on the basis of the number of their shares so
registered; provided, however, that if, as a result of the withdrawal of a
request for registration by the Requesting Holders, as applicable, the
registration statement does not become effective, the Requesting Holders may
elect to bear the Registration Expenses (pro rata on the basis of the number of
their shares so included in the registration request, or on such other basis as
such Requesting Holders may agree), in which case such registration shall not be
counted as a registration pursuant to Section 2(a)(ii)(C).
SECTION 5. Holdback Agreement. (a) If the Corporation at any time
shall register Common Shares under the Securities Act pursuant to Sections 2 or
3 hereof for sale to the public, any Shareholders that participate in such
registration shall not sell publicly, or otherwise dispose publicly of, any
Registrable Shares (other than those Common Shares included in such registration
pursuant to Sections 2 or 3 hereof) without the prior written consent of the
Corporation, for a period as shall be determined by the relevant managing
underwriters acting reasonably, which period shall begin not more than 7 days
prior to the initial filing of the registration statement pursuant to which such
public offering shall be made and shall not last more than 90 days after the
effective date of such registration statement; provided, however, that the
officers and directors of the Corporation who own Capital Stock of the
Corporation shall each be subject to similar restrictions. The Corporation shall
obtain the agreement of any Person permitted to sell shares of stock in such
registration to be bound by and to comply with this Section 5 as if such Person
were a Shareholder hereunder.
(b) If the Corporation shall at any time pursuant to Sections 2 or 3
of this Agreement register under the Securities Act Registrable Shares for sale
to the public pursuant to an underwritten offering, the Corporation shall not
effect any public sale or distribution of securities similar to those being
registered (excluding any transaction of the type identified or contemplated in
Section 3(b) above), or any securities convertible into or exercisable or
exchangeable for such securities, for such period as shall be determined by the
managing underwriters which period shall not begin more than 7 days prior to the
initial filing and shall not extend more than 90 days after the effective date
of such registration statement.
SECTION 6. Preparation and Filing. (a) If and whenever the
Corporation is under an obligation pursuant to the provisions of this Agreement
to use its best efforts to effect the registration of any Registrable Shares,
the Corporation shall, with respect to such registration (which, for the
avoidance of doubt, shall be a registration in the jurisdiction requested by the
Requesting Shareholder pursuant to Section 2(a) in the case of a registration
under Section 2 hereof), as expeditiously as is reasonable:
(i) prepare and file a registration statement, in the case of a
registration request pursuant to Section 2 within 90 days of such request,
under the Securities Act or similar such document under applicable Canadian
securities Laws that registers such Registrable Shares to become and remain
effective for a period of six months or, if earlier, until all of such
Registrable Shares have been disposed of;
(ii) prepare and file with the Commission or with the applicable
Canadian securities regulatory authorities, as the case may be, such
amendments (including post-effective amendments) and supplements to such
registration statement or similar such document under applicable Canadian
securities Laws and the prospectus relating thereto as may be necessary,
or, in the opinion of the managing underwriter, advisable to keep such
registration statement or similar such document effective for at least a
period of six months or, if earlier, until all of such Registrable Shares
have been disposed of, and to comply with the provisions of the Securities
Act or the applicable Canadian securities Laws, as the case may be, with
respect to the sale or other disposition of such Registrable Shares;
(iii) use its best efforts to register or qualify such Registrable
Shares under such other securities or "blue sky" Laws of such jurisdictions
as the holders of the Registrable Shares reasonably request and do any and
all other acts and things which may be reasonably necessary or advisable to
enable such holders to consummate the disposition in such jurisdictions of
such holders' Registrable Shares; provided, however, that the Corporation
will not be required (A) to qualify generally to do business, subject
itself to general taxation or consent to general service of process in any
jurisdiction where it would not otherwise be required to do so but for this
paragraph (iii), (B) to provide any material undertaking or make any
changes in its by-laws or certificate of incorporation which the Board of
Directors determines to be contrary to the best interests of the
Corporation or (C) to materially modify any of its contractual
relationships then existing;
(iv) notify the holders of such Registrable Shares on a timely basis
of the happening of any event as a result of which a prospectus relating to
such Registrable Shares, as then in effect, includes an untrue statement of
a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in light
of the circumstances then existing and, at the request of such holders,
prepare and furnish without charge to such holders a reasonable number of
copies of a supplement to or an amendment of such prospectus as may be
necessary to cause such prospectus, as so supplemented or amended, not to
include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing;
(v) furnish without charge to each seller of such Registrable Shares
and other securities such number of conformed copies of such registration
statement under the Securities Act, or similar such document under
applicable Canadian securities Laws and of each such amendment and
supplement thereto (in each case including all exhibits), such number of
copies of the prospectus included in such registration statement or similar
such document (including each preliminary prospectus and any summary
prospectus), in conformity with the requirements of the Securities Act or
applicable Canadian securities Laws, as the case may be, such documents
incorporated by reference in such registration statement or prospectus, and
such other documents, as such seller may reasonably request in order to
facilitate the sale or disposition of such Registrable Shares or other
securities;
(vi) furnish to each seller of Registrable Shares a signed
counterpart, addressed to such seller, of (A) an opinion of counsel
reasonably acceptable to a majority of selling Holders for the Corporation
in customary form, scope and substance, dated the effective date of such
registration statement or similar such document (or, if such registration
includes an underwritten public offering, dated the date of the closing
under the underwriting agreement), received by the Corporation in
connection with such registration statement, and (B) "comfort" letters
signed by the independent public accountants in customary form, scope and
substance who have issued a report on the Corporation's financial
statements included in such registration statement or similar such document
received by the Corporation in connection with such registration statement
or similar such document;
(vii) immediately notify each seller of Registrable Shares and other
securities covered by such registration statement at any time when a
prospectus relating thereto is required to be delivered under the
Securities Act or applicable Canadian securities Laws, of the happening of
any event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing or if it is necessary to amend or supplement
such prospectus to comply with Law, and at the request of any such seller
prepare and furnish without change to such seller a reasonable number of
copies of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such
Registrable Shares or other securities, such prospectus shall not include
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing and shall
otherwise comply in all material respects with Law and so that such
prospectus, as amended or supplemented, will comply with Law;
(viii) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, or the applicable rules and
regulations of any securities regulatory authorities in Canada, and make
available to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least 12 months, beginning
with the first month of the first fiscal quarter after the effective date
of such registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act;
(ix) use its best efforts to list such Registrable Shares on each
securities exchange on which the Common Shares are then listed, if such
Registrable Shares are not already so listed and if such listing is then
permitted under the rules of such exchange, and provide a transfer agent
and registrar for such Registrable Shares not later than the effective date
of such registration statement under the Securities Act, or similar such
document under applicable Canadian securities Laws;
(x) issue to any underwriter to which any Holder of Registrable Shares
may sell such Registrable Shares in connection with any such registration
(and to any direct or indirect transferee of any such underwriter)
certificates evidencing Common Shares without the legends described in the
Shareholders Agreement;
(xi) make every reasonable effort to prevent or obtain the withdrawal
of any stop order or other order suspending the use of any preliminary or
final prospectus or suspending any qualification of the Registrable
Securities at the earliest possible moment;
(xii) make such representations and warranties to the holders of
Registrable Securities being registered, and the underwriters or agents, if
any, in form, substance and scope as are customarily made by issuers in
secondary underwritten public offerings; and
(xiii) enter into such customary agreements (including underwriting
and indemnification agreements) and take all such other actions as the
holders of at least a majority of any Registrable Securities being sold or
the managing underwriter or agent, if any, reasonably request in order to
expedite or facilitate the registration and disposition of such Registrable
Securities.
The Corporation may require each seller of Registrable Shares as to which any
registration is being effected to furnish the Corporation with such information
regarding such seller and the distribution of such securities as the Corporation
may from time to time reasonably request in writing and as shall be required by
Law or by the Commission or applicable Canadian securities regulatory
authorities, as the case may be, in connection therewith.
(b) Each holder of the Registrable Shares, upon receipt of any notice
from the Corporation of any event of the kind described in Section 6(a)(iv)
hereof, shall forthwith discontinue disposition of the Registrable Shares
pursuant to the registration statement under the Securities Act, or similar such
document under applicable Canadian securities Laws covering such Registrable
Shares until such holder's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 6(a)(iv) hereof, and, if so directed by the
Corporation, such holder shall deliver to the Corporation all copies, other than
permanent file copies then in such holder's possession, of the prospectus
covering such Registrable Shares at the time of receipt of such notice.
(c) In connection with the preparation and filing of each
registration statement registering Registrable Shares under the Securities Act,
or similar such document under applicable Canadian securities Laws, the
Corporation will give the Shareholders on whose behalf such Registrable Shares
are to be so registered and their respective counsel and accountants, the
opportunity to review and comment on such registration statement or prospectus,
included therein or filed with the Commission or with any Canadian securities
regulatory authority, and each amendment thereof or supplement thereto, and will
give each of them such access to its books and records and such opportunities to
discuss the business of the Corporation with its officers and the independent
public accountants who have issued a report on its financial statements as shall
be reasonably necessary, in the opinion of such Shareholders and such
underwriters or their respective counsel, to conduct a reasonable investigation
within the meaning of the Securities Act or applicable Canadian securities Laws,
as the case may be.
(d) In connection with the sale of Registrable Shares registered
pursuant to Section 2 or 3 above, the Corporation's management shall participate
in "road shows" and question and answer meetings with potential purchasers of
such Registrable Shares in connection with offers and sales of such Registrable
Shares.
(e) It is understood that in any underwritten offering of Registrable
Shares in addition to the Common Shares (the "initial shares") the underwriters
have committed to purchase, the underwriting agreement may grant the
underwriters an option to purchase a number of additional Common Shares (the
"option shares") equal to up to 15% of the initial shares (or such other maximum
amount as the National Association of Securities Dealers, Inc. may then permit),
solely to cover over-allotments. The Common Shares proposed to be sold by the
Corporation and the Holders shall be allocated between initial shares and option
shares as agreed or, in the absence of agreement, pursuant to Section 3(a)(ii).
The number of initial shares and option shares to be sold by selling Holders
shall be allocated pro rata among all such Holders on the basis of the relative
number of Common Shares and other securities each such Holder has requested to
be included in such registration.
SECTION 7. Indemnification; Contribution. (a) In the event of any
registration of any equity securities of the Corporation under the Securities
Act or applicable Canadian securities Laws, the Corporation will, and hereby
does, indemnify and hold harmless, in the case of any registration statement
filed pursuant to Section 2 or 3 hereof, the seller of any Registrable Shares
covered by such registration statement, its respective affiliates, directors and
officers, each other Person who participates as an underwriter in the offering
or sale of such securities, each officer and director of each such underwriter,
each other Person, if any, who controls such seller or any such underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, and each Person affiliated with or retained by such seller and who
may be subject to liability under applicable securities Laws, against any
losses, claims, damages, liabilities and expenses, joint or several, to which
they or any of them may become subject under the Securities Act, applicable
Canadian securities Laws or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions or proceedings in respect thereof) arise out
of or are based upon (i) any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under which such
securities were registered under the Securities Act, any preliminary prospectus,
final prospectus or summary prospectus included therein, or any amendment or
supplement thereto, or any document incorporated by reference therein, (ii) any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
(iii) any violation by the Corporation of any applicable securities Laws
relating to action or inaction required by the Corporation in connection with
such offer, sale or other disposition under such Laws; provided, however, that
the Corporation shall not be liable in any such case to the extent that any such
loss, claim, damage, liability (or action or proceeding in respect thereof) or
expense arises out of or is based upon (x) an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
any such preliminary prospectus, final prospectus, summary prospectus, amendment
or supplement in reliance upon and in conformity with written information
furnished to the Corporation for use in the preparation thereof by such seller
or underwriter, as the case may be, or (y) an untrue statement or alleged untrue
statement or omission or alleged omission made in any preliminary prospectus but
notified to such seller and underwriter prior to any sale or other disposition
of Registrable Shares and subsequently corrected by the Corporation in any final
prospectus, amendment or supplement made available to such seller or underwriter
but which final prospectus, amendment or supplement was not used by such seller
or underwriter in the sale or other disposition of Registrable Shares that gave
rise to such loss, claim, damage, liability (or action or proceeding in respect
thereof) or expense. This indemnity shall be in addition to any liability the
Corporation may otherwise have. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of such seller or
any such director, officer, underwriter or controlling Person and shall survive
the transfer of such securities by such seller. The Corporation shall reimburse
indemnifiable expenses hereunder as and when incurred.
(b) The Corporation may require, as a condition to including any
Registrable Shares in any registration statement filed pursuant to Section 2 or
3 hereof, that the Corporation shall have received an undertaking satisfactory
to it from (i) the prospective seller of such securities, to indemnify and hold
harmless (in the same manner and to the same extent as set forth in Section
7(a), except that any such prospective seller shall not in any event be liable
to the Corporation pursuant thereto for an amount in excess of the net proceeds
of the sale of such prospective seller's Registrable Shares so to be sold) the
Corporation, each such underwriter of such securities, each officer and director
of each such underwriter and each other Person, if any, who controls the
Corporation or any such underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, and (ii) each such underwriter
of such securities, to indemnify and hold harmless (in the same manner and to
the same extent as set forth in Section 7(a) above) the Corporation, each
officer and director of the Corporation, each prospective seller, each officer
and director of each prospective seller and each other Person, if any, who
controls the Corporation or any such prospective seller within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, with respect
to any untrue statement in or omission from such registration statement, any
preliminary prospectus, final prospectus or summary prospectus included therein,
or any amendment or supplement thereto, if such untrue statement or omission was
made in reliance upon and in conformity with written information furnished by
such prospective seller or such underwriter, as the case may be, to the
Corporation for use in the preparation of such registration statement,
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of the Corporation or any such director,
officer or controlling Person and shall survive the transfer of such securities
by such seller.
(c) Promptly after receipt by an indemnified party of notice of the
commencement of any action or proceeding (including any governmental
investigation) involving a claim referred to in either Section 7(a) above or (b)
above, such indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party, give written notice to the latter of the
commencement of such action; provided, however, that the failure of any
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding provisions of this
Section 7, except to the extent that the indemnifying party is materially
prejudiced by such failure to give notice. In case any such action is brought
against an indemnified party, the indemnifying party shall be entitled to assume
the defense thereof, jointly with any other indemnifying party similarly
notified, to the extent that it may wish, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified party for
any legal or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof. If, in the indemnified party's reasonable
judgment, a conflict of interest between such indemnified party and indemnifying
parties may exist in respect of such claim, the indemnified party shall be
entitled to participate in the defense thereof and the indemnifying party shall
not be liable for the fees and expenses of more than one counsel for all sellers
of Registrable Shares, or more than one counsel for the underwriters in
connection with any one action or separate but similar or related actions.
(d) If the indemnification provided for in the foregoing clauses (a),
(b) and (c) of this Section 7 is unavailable to the indemnified parties in
respect of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party shall contribute to the amounts paid or payable by such
indemnified parties as a result of such losses, claims, damages or liabilities
(i) as between the Corporation and the holders of Registrable Shares covered by
a registration statement, on the one hand, and the underwriters, on the other,
in such proportion as is appropriate to reflect the relative benefits received
by the Corporation and such holders, on the one hand, and the underwriters, on
the other, from the offering of the Registrable Shares, or if such allocation is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits but also the relative fault of the Corporation
and such holders, on the one hand, and of the underwriters, on the other, in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations, and (ii) as between the Corporation, on the one hand, and each
holder of Registrable Shares covered by a registration statement, on the other,
in such proportion as is appropriate to reflect the relative fault of the
Corporation and of each such holder in connection with such statements or
omissions, as well as any other relevant equitable considerations. The relative
benefits received by the Corporation and such holders, on the one hand, and the
underwriters, on the other, shall be deemed to be in the same proportion as the
total proceeds from the offering (net of underwriting discounts and commissions
but before deducting expenses) received by the Corporation and such holders bear
to the total underwriting discounts and commissions received by the
underwriters. The relative fault of the Corporation and such holders, on the one
hand, and of the underwriters, on the other, shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Corporation and such holders or by the
underwriters. The relative fault of the Corporation, on the one hand, and of
each such holder, on the other, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact
relates to information supplied by such party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(e) The Corporation and the holders of Registrable Shares agree that
it would not be just and equitable if contribution pursuant to Section 7(d) were
determined by pro rata allocation (even if the underwriters were treated as one
entity for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in the next preceding
paragraph. Notwithstanding the provisions of Section 7(d), no holder of
Registrable Shares shall be required to contribute any amount in excess of the
amount by which the total price at which the Registrable Shares of such holder
were offered to the public exceeds the amount of any damages that such holder
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The obligation of the holders of Registrable
Shares to contribute pursuant to this Section 7 is several in the proportion
that the proceeds of the offering received by such holder bears to the total
proceeds of the offering received by all Holders and not joint.
(f) All sums payable by an indemnifying party to an indemnified party
under this Agreement shall be paid free and clear of all deductions,
withholdings, set-offs or counterclaims whatsoever save only as may be required
by law. If any deductions or withholdings are required by law, the indemnifying
party shall be obliged to pay to the indemnified party such sums as will, after
such deduction or withholding has been made, leave the indemnified party with
the same amount as it would have been entitled to receive in the absence of any
such requirement to make a deduction or withholding.
(g) If any taxing authority otherwise assesses any tax on any sum
paid by an indemnifying party to an indemnified party under this Agreement other
than a tax in the nature of a net income or franchise tax (hereafter referred to
as a "Tax Assessment"), then the amount so payable shall be grossed up by such
amount as will ensure that after payment of the taxation so charged there shall
be left a sum equal to the amount that would otherwise be payable under this
Agreement. In addition, the indemnified party shall take any action and
institute any proceedings, and give any information and assistance, as the
indemnifying party may reasonably request to dispute, resist, appeal,
compromise, defend, remedy or mitigate the Tax Assessment, in each case on the
basis that the indemnifying party shall indemnify the indemnified party for all
reasonable costs incurred as a result of a request by the indemnifying party.
(h) An indemnified party shall not admit liability in respect of, or
compromise or settle, a Tax Assessment without the prior written consent of the
indemnifying party (not to be unreasonably withheld or delayed).
SECTION 8. Underwriting Agreement. Notwithstanding the provisions of
Sections 4, 5, 6, 7 and 8, to the extent that the holders of Registrable Shares
shall enter into an underwriting or similar agreement, which agreement contains
provisions covering one or more issues addressed in such Sections, the
provisions contained in such agreement addressing such issue or issues shall
control; provided, however, that any such agreement to which the Corporation is
not a party shall not be binding upon the Corporation. No Shareholder may
participate in any underwritten registration hereunder unless such holder (a)
agrees to sell such holders' securities on the basis provided in any
underwriting arrangements and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
reasonably and customarily required under the terms of such underwriting
arrangements.
SECTION 9. Information by Holders of Registrable Shares. Each holder
of Registrable Shares shall furnish to the Corporation such written information
regarding such Person and the distribution proposed by such Person as the
Corporation may reasonably request in writing and as shall be reasonably
required in connection with any registration, qualification or compliance
referred to in this Agreement.
SECTION 10. Exchange Act Compliance. The Corporation shall comply
with all of the reporting requirements of the Exchange Act applicable to it and
shall comply with all other public information reporting requirements of the
Commission which are conditions to the availability of Rule 144 for the sale of
the Common Shares. The Corporation shall cooperate with each holder of
Registrable Shares in supplying such information as may be necessary for such
holder to complete and file any information reporting forms presently or
hereafter required by the Commission as a condition to the availability of Rule
144.
SECTION 11. No Conflict of Rights. Except for the registration rights
granted by the Corporation to the Shareholders under this Agreement, the
Corporation shall not provide to any other holder of its securities rights with
respect to the registration of such securities under Canadian Law, the
Securities Act or any other applicable securities Laws without the prior written
consent of each of the Shareholders holding more than five percent (5%) of
Registrable Securities then outstanding. The Corporation warrants that, other
than as provided herein, it has not granted to any other Person rights with
respect to the registration of any Registrable Securities or any other
securities issued or to be issued by it. The Corporation further warrants that
it is not presently party to any agreement with respect to its securities that
is inconsistent with the rights granted to the Shareholders by this Agreement or
otherwise conflicts with the provisions hereof.
SECTION 12. Termination. This Agreement shall terminate upon the date
on which there are no longer any Registrable Securities outstanding. The rights
and obligations hereunder of the Shareholders shall terminate at such time when
neither they nor any of their respective Specified Assignees hold Registrable
Securities, provided that the provisions of Section 7 hereof, the rights of any
party hereto with respect to the breach of any provision hereof, and any
obligation accrued as of the date of termination shall survive the termination
of this Agreement.
SECTION 13. Successors and Assigns. This Agreement shall bind and
inure to the benefit of the Corporation and the Shareholders and, subject to
Section 14 below, their respective successors and assigns.
SECTION 14. Assignment. Each holder of Registrable Shares may assign
its rights hereunder to any of its Permitted Transferees or any Specified
Assignee; provided, however, that such Permitted Transferees or Specified
Assignee, as the case may be, shall, as a condition to the effectiveness of such
assignment, be required to execute a counterpart to this Agreement agreeing to
be treated as a Shareholder holding Registrable Shares whereupon such Specified
Assignee shall have the benefits of, and shall be subject to the restrictions
contained in, this Agreement as if such Specified Assignee or Permitted
Transferee had originally been a party hereto.
SECTION 15. Entire Agreement. This Agreement and the New Shareholders
Agreement constitute the entire agreement of the parties hereto with respect to
the subject matter hereof and thereof and supersede all prior agreements and
undertakings, both written and oral, between the parties with respect to the
subject matter hereof and thereof. For the sake of clarity, the parties
acknowledge that the BCE Agreement, and any other agreement between BCE Inc.and
the Corporation with respect to the matters governed by the BCE Agreement shall
have no further force and effect and shall be superseded in their entirety by
this Agreement.
SECTION 16. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made (and
shall be deemed to have been duly given or made upon receipt) by delivery in
person, by courier service, by facsimile, or by registered or certified mail
(postage prepaid, return receipt requested) to the parties at the addresses
specified in Section 6.03 of the Shareholders Agreement (or at such other
address for a party as shall be specified in a notice given in accordance with
this Section 16).
SECTION 17. Modifications; Amendments; Waivers. This Agreement may
not be amended or modified, except by an instrument in writing signed by, or on
behalf of, the Corporation and Shareholders representing 75% of the Registrable
Securities.
SECTION 18. Counterparts; Facsimile Signatures. This Agreement may be
executed and delivered in one or more counterparts (including by telecopy), and
by the different parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
SECTION 19. Headings. The descriptive headings contained in this
Agreement are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.
SECTION 20. Severability; Governing Law. If any term or other
provision of this Agreement is invalid, illegal or incapable of being enforced
by any Law, governmental regulation or public policy, all other terms and
provisions of this Agreement shall nevertheless remain in full force and effect
as long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby are consummated as originally contemplated to the greatest extent
possible. This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York applicable to contracts executed in and to be
performed in that State without regard to conflicts of law.
SECTION 21. Waiver of Jury Trial. Each of the parties hereto
irrevocably and unconditionally waives trial by jury in any legal action or
proceeding relating to this Agreement, the transactions contemplated hereby and
for any counterclaim therein.
SECTION 22. Dispute Resolution. The parties agree that any
controversy, claim or dispute arising out of or relating to or in connection
with this Agreement, including, without limitation, any dispute regarding its
breach, termination, enforceability or validity hereof (each, a "Dispute")
should be regarded as a business problem to be resolved promptly through
business-oriented negotiations before resorting to arbitration pursuant to
Section 22. The parties therefore agree to attempt in good faith to resolve any
Dispute promptly by negotiation between the executives of the parties who have
authority to settle the Dispute. Such negotiations shall commence upon the
mailing of a notice (the "Dispute Notice") from the appropriate executive of the
requesting party to an appropriate executive of the responding party. If the
Dispute has not been resolved by these Persons within forty-five (45) days of
the date of the Dispute Notice, unless the parties agree in writing to a longer
period, the Dispute shall be referred to the chief executive officer of each of
the Shareholders and the Company, as the case may be, party to such Dispute, for
discussion and negotiation among them. In the event the Dispute has still not
been resolved by negotiation within forty-five (45) days of such referral, then
such Dispute shall be settled pursuant to binding arbitration pursuant to
Section 23. All negotiations pursuant to this Section 22 shall be confidential
and shall be treated as compromise and settlement negotiations for purposes of
applicable rules of evidence and shall not be used for, or admitted in, any
arbitration or court proceedings under this Agreement.
SECTION 23. Arbitration. Any Dispute that has not been resolved
pursuant to Section 22 shall be finally settled by binding arbitration in The
City of New York, New York County, before a panel of three arbitrators. The
arbitration shall be administered by the International Court of Arbitration of
the International Chamber of Commerce (the "ICC") under its Rules of Arbitration
as in effect at the time of this Agreement, except as they may be modified
herein or by agreement of the parties and shall be conducted in the English
language. Each party shall nominate one arbitrator, obtain its nominee's
acceptance of such nomination, and deliver written notification of such
nomination and acceptance to the other party within thirty (30) days after
delivery of the request for arbitration. In the event a party fails to nominate
an arbitrator or deliver notification of such nomination to the other party
within this time period, upon request of any party, such arbitrator shall
instead be appointed by the ICC within thirty (30) days of receiving such
request. In the event there are two Shareholders, or one Shareholder and the
Corporation are parties to the dispute, the two arbitrators nominated in
accordance with the above provisions shall nominate the third arbitrator, obtain
the nominee's acceptance of such nomination and notify the parties in writing of
such nomination and acceptance within thirty days of their nomination. If the
first two nominated arbitrators fail to nominate a third arbitrator or notify
the parties of that nomination within this time period, then, upon request of
either party, the third arbitrator shall be appointed by the ICC within thirty
(30) days of receiving such request. Nonetheless, in no event shall any such
arbitrator nominated by the other arbitrators be a resident in, or a domicile
of, any country in which a Shareholder or the Corporation is domiciled or has
its principal place of business. In the event that each of the Shareholders and
the Corporation are parties to the Dispute, each shall be entitled to nominate
an arbitrator in the manner and time period referred to above. In the event a
party fails to nominate an arbitrator or deliver notification of such nomination
to the other parties within this time period, upon request of any party, such
arbitrator shall instead be appointed by the ICC within thirty (30) days of
receiving such request. The arbitrators appointed in accordance with the above
provisions shall mutually agree to designate one of them to act as chair within
thirty (30) days of their appointment. For the sake of clarity, it is expressly
understood that the function of such chair is administrative only and shall not
signify that such chair has greater or different powers as arbitrator from the
other arbitrators. In the event that the arbitrators nominated in accordance
with the above provisions fail to agree upon the selection of a chair within
this time period, upon request of any party, the chair shall instead be
designated by the ICC within thirty days of receiving such request. The award of
the arbitrators shall be final and binding upon the parties, and shall not be
subject to any appeal or review. The parties agree to submit to the
non-exclusive personal jurisdiction of the federal and state courts sitting in
The City of New York, New York for the purpose of enforcing this agreement to
arbitrate.
(a) No provision of, nor the exercise of any rights under, this
Section 23 shall limit the right of any party to request and obtain from a court
of competent jurisdiction in The City of New York (which shall have exclusive
jurisdiction for purposes of this Section 23(b)) before, during or after the
pendency of any arbitration, provisional or ancillary remedies and relief
including, but not limited to, injunctive or mandatory relief or the appointment
of a receiver. The institution and maintenance of an action or judicial
proceeding for, or pursuit of, provisional or ancillary remedies shall not
constitute a waiver of the right of any party, even if it is the plaintiff, to
submit the dispute to arbitration if such party would otherwise have such right.
Each of the parties hereby submits unconditionally to the exclusive jurisdiction
of the state and federal courts located in The City of New York, County of New
York for purposes of this provision, waives objection to the venue of any
proceeding in any such court or that any such court provides an inconvenient
forum and consents to the service of process upon it in connection with any
proceeding instituted under this Section 23(b) in the same manner as provided
for the giving of notice hereunder.
(b) Judgment upon the award rendered may be entered in any court
having jurisdiction. The parties hereby expressly consent to the nonexclusive
jurisdiction of the state and federal courts situated in The City of New York,
County of New York for this purpose and waive objection to the venue of any
proceeding in such court or that such court provides an inconvenient forum.
(c) Each of the parties participating in an arbitration pursuant to
the terms of this Agreement shall, subject to the award of the arbitrators, pay
an equal share of the arbitrators' fees. The arbitrators shall have the power to
award recovery of all costs (including reasonable attorneys' fees,
administrative fees, arbitrators' fees and court costs) to the prevailing party.
(d) Each of:
(i) the Corporation hereby irrevocably designates CT Corporation, with
offices situated at present at 1633 Broadway, New York, New York 10019, and
(ii) each of the Shareholders irrevocably designates CT Corporation,
with offices situated at present at 1633 Broadway, New York, New York 10019
respectively, to accept and acknowledge on its behalf service of any process
which may be served in any proceeding in New York.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first written above.
BELL CANADA INTERNATIONAL INC.
By______________________________
Name:
Title:
[SHAREHOLDER]
By______________________________
Name:
Title:
[SHAREHOLDER]
By______________________________
Name:
Title:
[SHAREHOLDER]
By______________________________
Name:
Title:
[SHAREHOLDER]
By______________________________
Name:
Title:
<PAGE>
ANNEX I
SHAREHOLDERS
------------
[Telmex Sub - Shareholder]
[SBCI Sub - Shareholder]
[BCE Inc. and any party to which rights have been assigned
under the BCE Agreement]
<PAGE>
EXHIBIT E
to the Shareholders Agreement
---------------------------------------------
FORM OF REGISTRATION RIGHTS AGREEMENT
---------------------------------------------
Among
BELL CANADA INTERNATIONAL INC.
and the
SHAREHOLDERS IDENTIFIED HEREIN
Dated as of [____________], 2000
<PAGE>
TABLE OF CONTENTS
Page
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SECTION 1. Definitions..............................................1
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SECTION 2. Request for Registration.................................3
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SECTION 3. Piggyback Registration...................................5
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SECTION 4. Expenses.................................................7
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SECTION 5. Holdback Agreement.......................................7
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SECTION 6. Preparation and Filing...................................7
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SECTION 7. Indemnification; Contribution...........................11
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SECTION 8. Underwriting Agreement..................................14
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SECTION 9. Information by Holders of Registrable Shares............15
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SECTION 10. Exchange Act Compliance.................................15
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SECTION 11. No Conflict of Rights...................................15
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SECTION 12. Termination.............................................15
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SECTION 13. Successors and Assigns..................................15
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SECTION 14. Assignment..............................................15
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SECTION 15. Entire Agreement........................................16
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SECTION 16. Notices.................................................16
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SECTION 17. Modifications; Amendments; Waivers......................16
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SECTION 18. Counterparts; Facsimile Signatures......................16
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SECTION 19. Headings................................................16
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SECTION 20. Severability; Governing Law.............................16
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SECTION 21. Waiver of Jury Trial....................................16
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SECTION 22. Dispute Resolution......................................16
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SECTION 23. Arbitration.............................................17
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<PAGE>
EXHIBIT G
FORM OF BCE INDEMNITY AGREEMENT
<PAGE>
EXHIBIT G
TO THE SHAREHOLDERS AGREEMENT
FORM OF INDEMNIFICATION AGREEMENT
AGREEMENT dated as of ________________, ____ (this "Agreement"), by
and among Bell Canada International Inc., a corporation organized under the laws
of Canada ("BCI"), BCE Inc., a corporation organized under the laws of Canada
("BCE"), [Surviving Entity] Telefonos de Mexico S.A. de C.V., a sociedad anonima
de capital variable organized under the laws of Mexico ("Telmex") SBC
International, Inc., a corporation organized under the laws of the State of
Delaware ("SBCI"), and [insert names of the parties to the Shareholders
Agreement holding more than 10% of the Outstanding (as defined in the
Shareholders Agreement) Shares (as defined in the Shareholders Agreement) on the
Consolidation Date].
WHEREAS, BCI, Telmex and SBCI are parties to an amended and restated
joint venture agreement, dated as of September 25, 2000 (the "Joint Venture
Agreement");
WHEREAS, pursuant to Section 5.07 of the Shareholders Agreement (as
defined in Section 1.1(f)), BCI is seeking to effect a Consolidation (as defined
in Section 1.1(c));
WHEREAS, pursuant to Section 5.07 of the Shareholders
Agreement, it is a condition to consummation of a Consolidation that this
Agreement be entered into; and
WHEREAS, BCE owns of record and beneficially approximately __% of the
issued and outstanding BCI Shares (as defined in Section 1.1(k));
In consideration of the premises and mutual agreements and covenants
hereinafter set forth, the parties hereto hereby agree as follows:
1. Definitions
1.1. Certain Defined Terms. As used in this Agreement, the following
terms shall have the following meanings.
(a) "After-Tax Basis", when referring to an amount, means an amount
which, after deduction of all Taxes payable by, or withheld from, the recipient
by reason of the receipt or accrual of such amount, is equal to the amount
required to be paid or indemnified against on an "After-Tax Basis".
(b) "Consolidation Date" means the date on which the Consolidation is
consummated.
(c) "Consolidation" means a transaction whereby Newco pursuant to a
Qualified Offer (as defined in the Shareholders Agreement) is consolidated with,
merged into, amalgamated with or otherwise becomes controlled by Surviving
Entity pursuant to any merger, consolidation, amalgamation, reorganization,
exchange offer or similar transaction.
(d) "Indemnitee" means (1) Telmex and SBCI, (2) their respective
Affiliates and Specified Assignees (as defined in the Shareholders Agreement)
and (3) any shareholder of Newco that immediately prior to the Consolidation
held at least 10% of the Outstanding Shares of Master Newco.
(e) "Newco" means Ivey Holdco Ltd., a Bermuda company. -----
(f) "Shareholders Agreement" means the Shareholders Agreement dated
as of _________ __, 2000 among BCI Holdco, Telmex Wireless Brazil, LLC, SBC
International - Brazil Holding Ltd., [the other Shareholders party thereto] and
Newco.
(g) "BCI Director" means each member of the Board of Directors of
BCI.
(h) "BCI Holdco" means Bell Canada International Investments Limited,
a British Virgin Islands company and a wholly owned subsidiary of BCI.
(i) "BCI Liabilities" means all Liabilities of BCI, other than those
Liabilities directly and indirectly attributable to, relating to or arising from
the operation of the business of Newco, any Intermediate Company, any Opco,
Surviving Entity or any Subsidiary thereof, on or after the Consolidation Date.
(j) "BCI Shares" means the shares of common stock of BCI, without par
value.
(k) "Surviving Entity" has the meaning attributed to such term in the
Shareholders Agreement.
1.2. Other Defined Terms. Capitalized terms used herein but not
otherwise defined herein shall have the meanings ascribed thereto in the Joint
Venture Agreement, except that the following capitalized terms shall have the
meanings set forth in the Section of this Agreement listed below.
Defined Term Section
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Current Tax Cash Benefit 4.2(a)
Current Tax Cash Cost 4.2(a)
Disputing Party 4.3
Final Determination 2.2(d)
ICC 8.1
Indemnification Threshold 4.1
Ownership Percentage 2.1(b)
BCI Indemnification 3(a)
Surviving Entity Shares 3(c)
2. Tax Indemnification for Consolidation.
2.1. BCE Tax Indemnification. (a) Subject to the terms and conditions
hereof, BCE agrees to indemnify each Indemnitee against, and hold each of them
harmless from, on an After-Tax Basis, any and all Losses incurred by such
Indemnitee, or by BCI, Newco, Surviving Entity or any Contributed Company or any
Subsidiary or Minority Investee (as defined in the Shareholders Agreement) of
any of them, by reason of any Taxes payable, or any adverse Tax consequences
arising, as a result of the consummation of the Consolidation (including,
without limitation, by reason of any breach of any representation or covenant
given by BCE, BCI, Newco, Surviving Entity or any Contributed Company or any
action taken or omitted by BCE, BCI, Newco, Surviving Entity or any Contributed
Company, or any Subsidiary or Minority Investee; provided, however, that
"Losses" shall not include any continuing adverse Tax consequences with respect
to the ongoing activities (including payment of dividends) of BCI or Surviving
Entity and its subsidiaries arising as a result of the consummation of the
Consolidation.
(b) In the case of any Loss incurred by BCI, Newco, Surviving Entity
or any Contributed Company, or any Subsidiary or any Minority Investee of any of
them, referred to in Section 2.1(a), each such Indemnitee shall be deemed to
have incurred a Loss equal to the product of (i) the Tax Liabilities and (ii)
the percentage of Surviving Entity's Outstanding common shares held by such
Indemnitee immediately following the Consolidation (the "Ownership Percentage"),
and, if applicable, (iii) the percentage beneficial interest held by Surviving
Entity in the entity incurring the Loss. Such Losses shall be deemed to have
been incurred when, and such indemnification shall be paid not more than ___
days following, the date on which the Losses are paid or become due and payable.
(c) Notwithstanding anything to the contrary set forth in this
Agreement, in the case of any loss incurred by BCI, Newco, Surviving Entity or
any Contributed Company, or any Subsidiary or Minority Investee of any of them,
referred to in Section 2.1(a), BCE shall not be required to indemnify the
Indemnitees pursuant to Section 2.1 if and to the extent that BCE contributes,
or causes to be contributed, to the capital of BCI, Newco, Surviving Entity or
any Contributed Company, or the applicable Subsidiary or Minority Investee, in
cash, or otherwise satisfies, on an After-Tax Basis, all or any part of the Tax
Liabilities (it being understood that BCE shall have no obligation to do so and
that if BCE does so, it shall not be entitled to receive any consideration from
BCI, Newco, Surviving Entity or any Contributed Company, or the applicable
Subsidiary or Minority Investee, whether in capital stock or otherwise, nor
shall BCE have any right of contribution from BCI, Newco, Surviving Entity or
any Contributed Company, or the applicable Subsidiary or Minority Investee in
respect of the satisfaction of such Tax Liabilities).
(d) It is understood and agreed that BCE shall not have any
obligation to indemnify the Indemnitees in respect of Taxes payable, or any
adverse Tax consequences arising as a result of any change in the Tax domicile
of BCI, Newco or Surviving Entity following the Consolidation Date.
2.2. Contests With Respect to Indemnitees.
(a) If a Taxing authority proposes in writing, on audit or otherwise,
to assert a claim against an Indemnitee for which BCE is required to indemnify
an Indemnitee pursuant to Section 2.1 hereof, such Indemnitee shall notify BCE
in writing within ten (10) Business Days of the receipt of such proposal and
such Indemnitee shall forebear, for at least thirty (30) days (or such lesser
period as is permitted by law), payment of any Taxes asserted to be payable as a
result of such proposed adjustment.
(b) If BCE shall request in writing within ten (10) Business Days
after such Indemnitee's notice pursuant to Section 2.2(a) above that the
proposed adjustment be contested and shall furnish to such Indemnitee, at BCE's
sole expense, a written opinion of counsel to BCE, in form and in substance
reasonably satisfactory to such Indemnitee, to the effect that the position to
be put forth by such Indemnitee should prevail, such Indemnitee shall, in good
faith, at BCE's sole expense, contest the proposed adjustment and shall make a
good faith effort to consult with BCE in contesting such proposed adjustment and
apprise them of the progress thereof; provided that such Indemnitee shall not be
required to contest the proposed adjustment beyond the first level of judicial
proceedings following the highest level of administrative proceedings and
provided further that such Indemnitee shall not be required to take any action
pursuant to this Section 2.2(b) unless: (i) BCE shall have agreed to pay such
Indemnitee on demand, on an After-Tax Basis, all costs and expenses, if any,
that such Indemnitee incurs in contesting such proposed adjustment (including,
without limitation, reasonable legal and accounting fees, disbursements,
penalties, interest and additions to Tax related to such proposed adjustment)
and shall have provided security reasonably acceptable to such Indemnitee for
the payment of such costs and expenses, and (ii) BCE shall have acknowledged and
agreed in writing to its indemnity obligation with respect to such proposed
claim pursuant to this Agreement.
(c) An Indemnitee may at any time decline to take any further action
with respect to a proposed adjustment, including settlement or compromise
thereof; provided that if BCE has requested in writing and in accordance with
Section 2.2(b) hereof that such Indemnitee contest any proposed adjustment
pursuant to this Agreement, such Indemnitee shall notify BCE in writing that
such Indemnitee has determined not to take any further action with respect to
such proposed adjustment and agrees to waive its right to any indemnification
payment that would otherwise be payable by BCE pursuant to this Agreement in
respect of such adjustment.
(d) If BCE shall have requested in writing that an Indemnitee contest
any proposed adjustment as above provided and shall have duly complied with all
of the terms of this Section 2.2, demand for payment of any amounts due and
payable hereunder may be made no earlier than upon a Final Determination of the
Liabilities of such Indemnitee for the Loss asserted to be payable as a result
of such proposed adjustment. For the purposes of this Agreement, the term "Final
Determination" means (i) a closing agreement entered into under Section 7121 of
the U.S. Internal Revenue Code, or any other settlement agreement entered into
in connection with an administrative proceeding (consented to by BCE, which
consent shall not be unreasonably withheld) or (ii) a final, non-appealable
judgment by the first level of judicial proceedings following the highest level
of administrative proceedings or, if BCE agrees in writing not to pursue the
matter in such a court, the highest level of administrative proceedings shall
have been completed and payment shall be made within five (5) days of demand
therefor.
(e) All amounts payable by BCE pursuant to Section 2.1 shall be paid
in the legal tender of the United States of America.
3. BCI's Indemnification. (a) BCI hereby agrees to indemnify each
Indemnitee (the "BCI Indemnification") against, and hold it harmless from, on an
After-Tax Basis, all Losses incurred by such Indemnitee in respect of all BCI
Liabilities (other than any such BCI Liabilities with respect to which a fully
funded cash reserve in the amount of the Defeasance Amount was established by
BCI prior to the Consolidation, which Liabilities are paid from such cash
reserve); provided, however, that the BCI Indemnification with respect to BCI
Liabilities, other than BCI Liabilities subject to indemnification under Section
2 hereof, shall terminate and BCI shall have no further indemnification
obligation to any party in respect thereof as of the date that is five (5) years
following the Consolidation Date, except with respect to any claim in respect
thereof by any party which is made prior to the end of such period, in which
event indemnification shall survive until the final resolution of such matter.
(b) For purposes of Section 3(a) above, each Indemnitee shall be
deemed to have incurred Losses equal to the product of (i) the amount of the BCI
Liabilities and (ii) the Ownership Percentage of such Indemnitee. Such Losses
shall be deemed to have been incurred when the applicable BCI Liabilities have
been paid or become due and payable.
(c) It is expressly understood and agreed that, in connection with a
transfer of (i) Shares of Newco, (ii) BCI Shares or, (iii) Shares of Surviving
Entity ("Surviving Entity Shares") by Telmex, SBCI or their respective Specified
Assignees, the transferor may, in its sole discretion, retain the rights under
the BCI Indemnification set forth in this Section 3, in which case (1) the
transferee shall not be deemed an Indemnitee under this Section 3 and (2) the
transferor shall be deemed, for purposes of this Section 3 and Section 4, to
continue to own the transferred Shares of Newco, BCI Shares, or Surviving Entity
Shares (in each case, to the extent such rights are so retained by the
transferor).
4. Payment
4.1. Form of Payment. Any obligations due from BCI to the Indemnitees
under Section 3 hereof shall be satisfied by delivery to the Indemnitees, within
ten (10) Business Days of the incurrence (as provided in Section 3(b)) by the
Indemnitees of any Losses indemnifiable pursuant to the terms of Section 3 of
this Agreement[, at the sole option of BCI] of [(i) cash in the full amount of
such Losses or (ii)](1) Surviving Entity Shares, as provided in Section 4.2
below; provided, however, that if any indemnification payable hereunder by BCI
would increase the aggregate percentage ownership of the outstanding common
equity of Surviving Entity held by the Indemnitees to more than 99% (the
"Indemnification Threshold"), then Surviving Entity shall issue to the
Indemnitees such number of Surviving Entity Shares as to increase such ownership
to the Indemnification Threshold, and the remaining portion of BCI's
indemnification obligation shall be paid by BCE to the Indemnitees in legal
tender of the United States of America.
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1 The parties agree to discuss.
4.2. Issuance of Shares. (a) The aggregate number of Surviving Entity
Shares to be issued pursuant to Section 4.1 arising by reason of a Loss in
respect of BCI Liabilities shall be determined as follows:
[x+z divided by y+z] multiplied by [V minus the amount of
the BCI Liabilities] = [x divided by y] multiplied by V
In the foregoing formula,
x = number of Surviving Entity Shares held by the Indemnitees
immediately following the Consolidation
y = number of Surviving Entity Shares outstanding immediately
following the Consolidation
z = number of Surviving Entity Shares to be issued
V = total equity value of Surviving Entity immediately following the
Consolidation, determined as the product of (1) the number of
Surviving Entity Shares outstanding immediately following the
Consolidation (adjusted to give effect to any differences in the
capitalization of BCI and Surviving Entity) and (2) the average of the
closing prices of BCI Shares on the [exchange] during the thirty (30)
trading days ending on the __ trading day preceding the Consolidation
Date).
For purposes of determining the aggregate number of Surviving Entity Shares to
be issued pursuant to this Section 4.2(a), the amount of the BCI Liabilities
shall be (I) increased to the extent of any increase in cash Taxes actually
payable by [BCI or] Surviving Entity in the taxable year in which the BCI
Liabilities are paid arising from the receipt of any payments made pursuant to
Section 4.2(d) or otherwise in connection with the BCI Liabilities (the "Current
Cash Tax Cost") and (II) reduced (but not below zero) to the extent of any
reduction in cash Taxes actually payable by [BCI or] Surviving Entity in the
taxable year in which the BCI Liabilities is paid arising from the payment of
the BCI Liabilities (the "Current Cash Tax Benefit"). In computing the amount of
any Current Cash Tax Cost or any Current Cash Tax Benefit, [BCI or] Surviving
Entity shall be deemed to recognize all other items of income, gain, loss,
deduction or credit before recognizing any item with respect to the BCI
Liabilities.
(b) The number of Surviving Entity Shares issuable pursuant to
Section 4.2(a) shall be increased so as to ensure that the Indemnitees are
indemnified on an After-Tax Basis.
(c) The number of Surviving Entity Shares to be issued to each
Indemnitee as an indemnification payment shall equal the aggregate number of
Surviving Entity Shares issuable in respect of a Loss multiplied by such
Indemnitee's percentage ownership of the issued and outstanding Surviving Entity
Shares.
(d) Notwithstanding anything to the contrary set forth in this
Agreement, BCI shall not be required to indemnify the Indemnitees pursuant to
Section 3 if and to the extent that BCE contributes, or causes to be
contributed, to the capital of Surviving Entity, in cash, or otherwise
satisfies, on an After-Tax Basis, all or any part of the BCI Liabilities (it
being understood that, except as provided in Section 4.1 hereof, BCE shall have
no obligation to do so and that if BCE does so, it shall not be entitled to
receive any consideration from Surviving Entity whether in capital stock or
otherwise, nor shall BCE have any right of contribution from Surviving Entity in
respect of the satisfaction of such BCI Liabilities).
4.3. Dispute Procedures for Arithmetic Calculations. Any dispute
raised by any party (the "Disputing Party") as to the arithmetic calculations
made pursuant to Section 4.2 hereof shall be resolved by an independent
internationally recognized accounting firm, other than _________ and _________,
mutually acceptable to each of Telmex, SBCI, BCE and BCI (or Surviving Entity).
In the event that the parties are unable to agree on an independent accounting
firm within ten (10) Business Days of any dispute arising as to any arithmetic
calculations under Section 4.2 hereof, then the accounting firm designated
pursuant to this Section 4.3 shall be ___________. Each of the parties hereto
shall use its reasonable efforts to cause the accounting firm to render a
determination concerning the disputed calculations made pursuant to Section 4.2
hereof within twenty (20) Business Days following submission of such dispute to
the accounting firm. The report of the independent accounting firm shall be
final, binding and conclusive on each of the parties hereto and all Indemnitees.
The fees and expenses of such accounting firm shall be borne by BCI or Surviving
Entity, as the case may be ; provided, however, that if the report of such
independent accounting firm concludes that the final arithmetic calculation is
within 10% of the initial arithmetic calculation, the fees and expenses of the
accounting firm shall be borne by the Disputing Party.
4.4. Treatment of Indemnification Payments. The parties hereto agree
to treat all indemnification payments made ursuant to this Section 4 as
adjustments to the Consolidation consideration, unless otherwise required by Law
or Taxing authority.
5. Undertaking. If Surviving Entity Shares are required to be
delivered to any Indemnitee pursuant to the terms of this Agreement, BCE and the
other parties hereto, each in its capacity as a direct or indirect shareholder
of BCI or Surviving Entity, as the case may be, shall take (and shall cause
their respective Specified Assignees to take) all necessary actions, including
exercising the rights of such party (or such Specified Assignees) as a
shareholder in BCI or Surviving Entity to the fullest extent permitted by Law,
in order to ensure BCI's and Surviving Entity's compliance with its obligations
hereunder. Without limiting the generality of the foregoing, the obligations of
any such party shall include, if necessary, (i) proposing to the Directors of
Surviving Entity an increase of the capital of Surviving Entity and voting
affirmatively for such capital increase at any meeting of shareholders of
Surviving Entity called for that purpose; and (ii) seeking or causing the
resignation or arranging for a meeting of shareholders or BCI or Surviving
Entity, as the case may be, for the removal, of any Director of BCI or Surviving
Entity who failed to vote in favor of any action required to be taken by BCI or
Surviving Entity to comply with any of its obligations hereunder and, further,
the election of new Directors of BCI or Surviving Entity in order to ensure
BCI's or Surviving Entity's compliance, and voting affirmatively for such
removal and election at any such meeting.
6. Books and Records/Notice
6.1. Right to Books and Records; Delivery of Supporting Calculations.
Subject to reasonable and customary confidentiality undertakings:
(a) Each Indemnitee, including its authorized representatives, shall
have reasonable access to (including the right to make copies of) such books and
records and other materials of BCI or Surviving Entity, as the case may be, in
order to confirm that no BCI Liabilities have been paid or are due.
(b) Each Indemnitee agrees, upon the request and at the expense of
BCE, that the amount of any Loss due to such Indemnitee shall be verified by a
public accounting firm selected by such Indemnitee and reasonably acceptable to
BCE.
6.2. Notice of Obligations. Within ten (10) days of being notified
that BCI Liabilities are payable, or upon learning of a contingent liability for
BCI Liabilities, BCI or Surviving Entity, as the case may be, shall advise in
writing each Indemnitee and keep each Indemnitee apprised in writing (in
reasonable detail) of the progress of the resolution of such demand.
6.3. Late Payments. Any amounts not paid when due and payable under
this Agreement shall bear interest from the date due to the date paid at the
prime rate of [BANK] as in effect from time to time during such period.
7. Miscellaneous
7.1. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made (and
shall be deemed to have been duly given or made upon receipt) by delivery in
person, by courier service, by telecopy, or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties at the
following addresses (or at such other address for a party as shall be specified
in a notice given in accordance with this Section 7.1):
(a) if to BCI or Surviving Entity:
Bell Canada International Inc.
1000, rue de La Gauchetiere Ouest
Suite 1100
Montreal, Quebec
H3B 4Y8 Canada
Facsimile: (514) 392-2470
Attention: Chief Executive Officer
with a copy to:
1000, rue de La Gauchetiere Ouest
Suite 1100
Montreal, Quebec
H3B 4Y8 Canada
Facsimile: (514) 392-2342
Attention: Vice President,
Law and Corporate Secretary
with a further copy to:
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Facsimile: (212) 848-7179
Attention: Alberto Luzarraga, Esq.
(b) if to Telmex:
Telefonos de Mexico S.A. de C.V.
Parque Via No. 190, Oficina 1016
Colonia Cuauhtemoc
Mexico D.F., 06599
Facsimile: (525) 255-1576
Attention: Adolfo Cerezo
with a copy to:
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006
Facsimile: (212) 225-3999
Attention: Nicolas Grabar, Esq.
with a further copy to:
Franck, Galicia, Duclaud y Robles, S.C.
Avenida Paseo de las Palmas
No. 405 - 3rd Floor
Colonia Lomas de Chapultepec
Mexico D.F., 11000
Facsimile: (525) 540-9202
Attention: Rafael Robles
(c) if to BCE:
1000, rue de La Gauchetiere
Suite 4100
Montreal, Quebec
H3B 5H8 Canada
Facsimile: (514) 870-4877
Attention: General Counsel
with a copy to:
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Facsimile: (212) 848-7179
Attention: Alberto Luzarraga, Esq.
(d) if to SBCI:
175 East Houston St.
Room 10-A-50
San Antonio, Texas 78205
Attention: President-SBC International Operations
Fax: (210) 351-5166
with a copy to:
175 East Houston St.
Room 232
San Antonio, Texas 78205
Attention: General Attorney-International Operations
Fax: (210) 351-3630
with a further copy to:
SBC Communications Inc.
175 East Houston St.
Room 1142
San Antonio, Texas 78205
Attention: Michael A. Meyer, General Attorney
Fax: (210) 351-3488
and with a further copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: Howard Chatzinoff
Fax: (212) 310-8007
7.2. Headings. The descriptive headings contained in this Agreement
are for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
7.3. Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any Law, governmental
regulation or public policy, all other terms and provisions of this Agreement
shall nevertheless remain in full force and effect as long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to any party. Upon such determination by a
Governmental Authority that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner in order that the transactions
contemplated hereby are consummated as originally contemplated to the greatest
extent possible.
7.4. Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof and
thereof and supersedes all prior agreements and undertakings, both written and
oral, between or among the parties with respect to the subject matter hereof and
thereof.
7.5. Assignment. This Agreement shall not be assigned without the
express written consent of the parties (which consent may be granted or withheld
in the sole discretion of any party), except that any party hereto may assign
its rights (but not its obligations) hereunder to an Affiliate or Specified
Assignee of such party; provided, however, that any such assignment shall not
relieve the assigning party of its obligations hereunder.
7.6. No Third Party Beneficiaries. Except as otherwise provided
herein with respect to the indemnification of Indemnitees, this Agreement shall
be binding upon and inure solely to the benefit of the parties hereto and
nothing herein, express or implied, is intended to or shall confer upon any
other person or entity, any legal or equitable right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement.
7.7. Amendment. This Agreement may not be amended or modified, except
by an instrument in writing signed by, or on behalf of, each of the parties and
each 10% Shareholder to which indemnification rights are assigned in accordance
herewith.
7.8. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York applicable to
contracts executed in and to be performed in that State.
7.9. Counterparts. This Agreement may be executed and delivered in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed and shall be deemed to be an original,
all of which taken together shall constitute one and the same Agreement.
7.10. Specific Performance. The parties hereto agree that irreparable
damage would occur in the event any provision of this Agreement was not
performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.
8. Arbitration/Dispute Resolution Procedures.
8.1 Arbitration. (a) Any Dispute that has not been resolved pursuant
to the terms of this Agreement shall be finally settled by binding arbitration
in The City of New York, New York County, before a panel of three arbitrators.
The arbitration shall be administered by the International Court of Arbitration
of the International Chamber of Commerce (the "ICC") under its Rules of
Arbitration as in effect at the time of this Agreement, except as they may be
modified herein by agreement of the parties and shall be conducted in the
English language. Each party shall nominate one arbitrator, obtain its nominee's
acceptance of such nomination, and deliver written notification of such
nomination and acceptance to the other party within thirty (30) days after
delivery of the request for arbitration. In the event a party fails to nominate
an arbitrator or deliver notification of such nomination to the other party
within this time period, upon request of any party, such arbitrator shall
instead be appointed by the ICC within thirty (30) days of receiving such
request. In the event there are two parties to this Agreement who are parties to
the dispute, the two arbitrators nominated in accordance with the above
provisions shall nominate the third arbitrator, obtain the nominee's acceptance
of such nomination and notify the parties in writing of such nomination and
acceptance within thirty days of their nomination. If the first two nominated
arbitrators fail to nominate a third arbitrator or notify the parties of that
nomination within this time period, then, upon request of either party, the
third arbitrator shall be appointed by the ICC within thirty (30) days of
receiving such request. Nonetheless, in no event shall any such arbitrator
nominated by the other arbitrators be a resident in, or a domicile of, any
country in which a shareholder is domiciled or has its principal place of
business. In the event that each of BCI, Surviving Entity and/or BCE (considered
together), Telmex and SBCI are parties to the Dispute, each shall be entitled to
nominate an arbitrator in the manner and time period referred to above. In the
event a party fails to nominate an arbitrator or deliver notification of such
nomination to the other parties within this time period, upon request of any
party, such arbitrator shall instead be appointed by the ICC within thirty (30)
days of receiving such request. The three arbitrators appointed in accordance
with the above provisions shall mutually agree to designate one of them to act
as chair within thirty days of their appointment. For the sake of clarity, it is
expressly understood that the function of such chair is administrative only and
shall not signify that such chair has greater or different powers as arbitrator
from the other arbitrators. In the event that the arbitrators nominated in
accordance with the above provisions fail to agree upon the selection of a chair
within this time period, upon request of any party, the chair shall instead be
designated by the ICC within thirty days of receiving such request. The award of
the arbitrators shall be final and binding upon the parties, and shall not be
subject to any appeal or review. The parties agree to submit to the
non-exclusive personal jurisdiction of the federal and state courts sitting in
The City of New York, New York for the purpose of enforcing this agreement to
arbitrate.
(b) No provision of, nor the exercise of any rights under, this
Section 8.1 shall limit the right of any party to request and obtain from a
court of competent jurisdiction in The City of New York (which shall have
exclusive jurisdiction for purposes of this Section 8.1(b)) before, during or
after the pendency of any arbitration, provisional or ancillary remedies and
relief including, but not limited to, injunctive or mandatory relief or the
appointment of a receiver. The institution and maintenance of an action or
judicial proceeding for, or pursuit of, provisional or ancillary remedies shall
not constitute a waiver of the right of any party, even if it is the plaintiff,
to submit the dispute to arbitration if such party would otherwise have such
right. Each of the parties hereby submits unconditionally to the exclusive
jurisdiction of the state and federal courts located in The City of New York,
County of New York for purposes of this provision, waives objection to the venue
of any proceeding in any such court or that any such court provides an
inconvenient forum and consents to the service of process upon it in connection
with any proceeding instituted under this Section 8.1(b) in the same manner as
provided for the giving of notice hereunder.
(c) Judgment upon the award rendered may be entered in any court
having jurisdiction. The parties hereby expressly consent to the nonexclusive
jurisdiction of the state and federal courts situated in The City of New York,
County of New York for this purpose and waive objection to the venue of any
proceeding in such court or that such court provides an inconvenient forum.
(d) Each of the parties participating in an arbitration pursuant to
the terms of this Agreement shall, subject to the award of the arbitrators, pay
an equal share of the arbitrators' fees. The arbitrators shall have the power to
award recovery of all costs (including reasonable attorneys' fees,
administrative fees, arbitrators' fees and court costs) to the prevailing party.
8.2 Waiver of Jury Trial. Each of the parties hereto irrevocably and
unconditionally waives trial by jury in any legal action or proceeding relating
to this Agreement.
8.3 Service of Process. Each of:
(a) BCI hereby irrevocably designates CT Corporation, with offices
situated at present at 1633 Broadway, New York, New York 10019;
(b) [Surviving Entity] hereby irrevocably designates CT Corporation,
with offices situated at present at 1633 Broadway, New York, New York 10019;
(c) BCE hereby irrevocably designates CT Corporation, with offices
situated at present at 1633 Broadway, New York, New York 10019;
(d) Telmex hereby irrevocably designates CT Corporation, with offices
situated at present at 1633 Broadway, New York, New York 10019; and
(e) SBCI hereby irrevocably designates CT Corporation, with offices
situated at present at 1633 Broadway, New York, New York 10019;
as its authorized agent, respectively, to accept and acknowledge on its behalf
service of any process which may be served in any suit, action or proceeding in
New York.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized signatories thereunto duly
authorized as of the day and year first above written.
BELL CANADA INTERNATIONAL INC.
By
---------------------------
Name:
Title:
[SURVIVING ENTITY]
By
---------------------------
Name:
Title:
BCE INC.
By
---------------------------
Name:
Title:
[10% SHAREHOLDERS]
By
---------------------------
Name:
Title:
TELEFONOS DE MEXICO S.A. de C.V.
By
---------------------------
Name:
Title:
SBC INTERNATIONAL, INC.
By
---------------------------
Name:
Title:
<PAGE>
EXHIBIT H
FORM OF LEGAL OPINION
1. BCE is a corporation duly incorporated, validly existing
and in good standing under
the laws of Canada.
2. BCE has all requisite power and authority to enter into the
BCE Indemnity Agreement and to perform its obligations thereunder and to
consummate the transactions contemplated thereby. The execution and delivery of
the BCE Indemnity Agreement by BCE and the consummation by BCE of the
transactions contemplated thereby have been duly authorized by all necessary
corporate action on the part of BCE. The BCE Indemnity Agreement has been duly
executed and delivered by BCE, and is the valid and binding obligation of BCE,
enforceable against BCE in accordance with its terms.
3. Neither the execution, delivery and performance of the BCE
Indemnity Agreement nor the consummation of the transactions contemplated
thereby will conflict with, or result in any violations of the certificate of
incorporation, bylaws or similar constitutive documents of BCE.
<PAGE>
EXHIBIT I
CONSENTS AND APPROVALS
[Four and a half pages of materials omitted.]
<PAGE>
EXHIBIT J
INITIAL STRUCTURE
[One page of materials omitted.]
<PAGE>
EXHIBIT K
ALTERNATE TAX STRUCTURES
Part 1: Danish Structure
Each company that is located in a jurisdiction that is treated
as a tax haven for purposes of the Neutral Provisions (a "Tax Haven Company")
will be replaced by a Danish company. The Danish company shall in all cases be a
company that is formed in Denmark and is a tax resident of Denmark; furthermore,
in order to reasonably facilitate SBCI's ability to recognize foreign tax
credits, the Danish company will not be incorporated as an Aktieselskab unless
the decision not to use an Aktieselskab causes adverse tax consequences,
directly or indirectly, for the Company or the shareholders. The Company and the
two new subholding companies created to hold the Comcel and Brazilian CLEC
operations would be included among the companies that would be replaced by a
Danish company. The method of the transfer would generally be as follows
(subject to advice of Danish counsel to minimize, if possible, any adverse tax
consequences of moving the company to Denmark):
(i) the shareholder(s) of the Tax Haven Company would form a
new Danish company;
(ii) the shareholder(s) of the Tax Haven Company would
transfer its (their) shares of the Tax Haven Company to the new Danish company;
and
(iii) the Tax Haven Company would liquidate or wind up into
its parent Danish company.
Part II: Netherlands-Danish Structure
Each Tax Haven Company (including the Company and the new
subholding companies located in tax haven jurisdictions) will be replaced by a
company that is formed in the Netherlands and a tax resident of the Netherlands
(unless changes have been made to the Danish holding period requirements so that
it would be advantageous for all lower tier holding companies to be Danish
companies, in which case the companies other than the Company would be replaced
by Danish companies in accordance with Part I, above). In order to reasonably
facilitate SBCI's ability to recognize foreign tax credits, the Netherlands
company will not be incorporated as a Naamloze Vennootschap unless the decision
not to use a Naamloze Vennootschap causes adverse tax consequences, directly or
indirectly, for the Company or the shareholders. The method of the transfer
would generally be as follows (subject to advice of Netherlands counsel to
minimize, if possible, the incidence of capital tax on the transfers and any
other adverse tax consequences of the change of structure):
(i) the shareholder(s) of the Tax Haven Company would form a
new Netherlands company;
(ii) the shareholder(s) of the Tax Haven Company would
transfer its (their) shares of the Tax Haven Company to the new Netherlands
company; and
(iii) the Tax Haven Company would liquidate or wind up into
its parent Netherlands company.
<PAGE>
EXECUTION COPY
--------------
================================================================================
-----------------------------------
FIRST AMENDMENT TO
SHAREHOLDERS AGREEMENT
-----------------------------------
among
BELL CANADA INTERNATIONAL
INVESTMENTS LIMITED,
AM LATIN AMERICA, LLC,
SBC INTERNATIONAL - BRAZIL HOLDING, LTD.,
and
TELECOM AMERICAS LTD.
Dated as of December 5, 2000
================================================================================
<PAGE>
FIRST AMENDMENT TO SHAREHOLDERS AGREEMENT, dated as of December 5, 2000
(this "Agreement"), among BELL CANADA INTERNATIONAL INVESTMENTS LIMITED, a
corporation incorporated under the laws of the British Virgin Islands ("BCI
Investments"), AM LATIN AMERICA, LLC, a limited liability company organized
under the laws of Delaware ("AM Latin America"), SBC INTERNATIONAL - BRAZIL
HOLDING, LTD., a company organized under the laws of the Cayman Islands ("SBCI
Brazil Holding" and, together with BCI Investments and AM Latin America, the
"Initial Shareholders"), and TELECOM AMERICAS LTD., a company organized under
the laws of Bermuda (the "Company").
WHEREAS, the Initial Shareholders and the Company have entered into a
Shareholders Agreement, dated as of November 16, 2000 (the "Shareholders
Agreement");
WHEREAS, the Initial Shareholders have agreed, among other things, in
Section 5.17 of the Shareholders Agreement to take all necessary action to amend
the terms of the Shareholders Agreement to comply with the terms of (i) the
letter to SBC International, Inc. ("SBCI"), Bell Canada International Inc.
("BCI") and Telefonos de Mexico, S.A. de C.V. ("Telmex"), dated November 10,
2000, from Sr. Amadeu de Paula Castro Neto, Executive Superintendent of Agencia
Nacional de Telecomunicacoes--ANATEL ("ANATEL") and (ii) the letter to the
Executive Superintendent of ANATEL, dated November 9, 2000, from BCI, Telmex and
SBCI concerning the reduction of the Company's ownership of the voting capital
of each of Bell Canada International BVI V Limited ("Subnewco1") and SBCI Brasil
Ltda. ("Subnewco4") to 19.99% within twenty (20) days following the Closing Date
(as defined in the Shareholders Agreement);
WHEREAS, the Initial Shareholders have agreed, in connection with such
reduction of the Company's ownership of the voting capital of each of Subnewco1
and Subnewco4, that, concurrently with the execution of this Agreement, (i)
Subnewco1 shall issue 29,341 Preferred Shares to BCI Investments and 6,688
Preferred Shares to AM Latin America ("AMLA's Preferred Shares"), AMLA's
Preferred Shares representing an 11.141% voting interest in Subnewco1 and (ii)
the Company shall transfer 61,481,914 Quotas Class A of Subnewco4 owned by it to
AM Latin America ("AMLA's Voting Quotas"), representing a 13.815% voting
interest in Subnewco4;
WHEREAS, concurrently with the transfer by the Company to AM Latin
America of AMLA's Voting Quotas, AM Latin America has agreed to enter into an
Exchangeable Debenture Agreement with the Company and Subnewco4 substantially in
the form set forth in Annex A hereto (the "AM Debenture");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements and covenants hereinafter set forth, the parties hereto hereby agree
as follows:
SECTION 1. Defined Terms. Capitalized terms used but not otherwise
defined herein shall have the meaning as set forth in the Shareholders
Agreement.
SECTION 2. Amendment to Section 1.01 of the Shareholders Agreement. The
definition of "Transaction Documents" contained in Section 1.01 of the
Shareholders Agreement is hereby amended and restated in its entirety as
follows: ""Transaction Documents" has the meaning set forth in the Amended and
Restated Joint Venture Agreement but shall further include the Exchangeable
Debenture Agreement, dated as of December 5, 2000, among AM Latin America, the
Company and Subnewco4."
SECTION 3. Amendment to Section 5.16 of the Shareholders Agreement.
Section 5.16 of the Shareholders Agreement is hereby amended as follows:
(a) To insert "(a)" at the beginning of the first sentence of Section
5.16.
(b) To change all references to "Payment Period" contained in Section
5.16 to "SBCI Brazil Holding Payment Period."
(c) To insert as a new subparagraph (b) the following language:
"(b) Effective as of the date hereof and for so long as the
Exchangeable Debenture Agreement, dated as of December 5, 2000,
among AM Latin America, the Company and Subnewco4 (the "AM
Debenture") remains outstanding (such period, the "AM Latin
America Payment Period"), AM Latin America hereby assigns and
sells to the Company any and all rights of AM Latin America or any
Affiliate of AM Latin America to receive any distribution, whether
in cash or in kind or in the form of a dividend or otherwise, in
respect of the Equity Interests of Subnewco4, and the Company
hereby accepts such assignment from AM Latin America. Any such
distribution received by AM Latin America or any Affiliate during
the AM Latin America Payment Period or, if received following the
AM Latin America Payment Period, to which AM Latin America or any
Affiliate became entitled during the AM Latin America Payment
Period, shall be received and held in trust for the benefit of the
Company, shall be segregated from other property and funds, and
shall forthwith be paid or delivered to the Company in the same
form so received (with any necessary endorsement and assignment)."
SECTION 4. Amendment to Schedule 2.03(b) and Schedule 2.04. Schedules
2.03(b) and 2.04 are hereby amended and restated in their entirety as set forth
in Annex B hereto.
SECTION 5. Amendment to Schedule 5.11 to the Shareholders Agreement.
Parts III(C) and IV of Schedule 5.11 to the Shareholders Agreement are hereby
amended and restated in their entirety to read as set forth in Annex C hereto,
including the addition of an Attachment 3 to Schedule 5.11 to the Shareholders
Agreement, as set forth in Annex C hereto.
SECTION 6. Representation of AM Latin America. Prior to and as of the
date hereof, AM Latin America has not entered into or otherwise granted or
issued any option, warrant, call, convertible security, preemptive right
(statutory or contractual), subscription right, commitment or other right,
agreement, arrangement or commitment of any character, including, without
limitation, any right of first refusal, right of first offer or other comparable
right relating to AMLA's Preferred Shares or AMLA's Voting Quotas, except as
otherwise provided in the AM Debenture and the 6th Amendment to the Articles of
Association of SBCI Brasil Ltda. with respect to AMLA's Voting Quotas.
SECTION 7. Restrictions on Transfer. For the avoidance of doubt, the
parties agree that the provisions of Section 4.01(b) of the Shareholders
Agreement shall apply to AM Latin America with respect to its ownership of
AMLA's Preferred Shares and AMLA's Voting Quotas.
SECTION 8. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York applicable to
contracts executed in and to be performed in that Sate without regard to
conflicts of law.
SECTION 9. Dispute Resolution. Any controversy, claim or dispute
arising out of or relating to or in connection with this Agreement shall be
resolved in accordance with the procedures set forth in Sections 6.14 and 6.15
of the Shareholders Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized signatories thereunto duly authorized as
of the date first written above.
BELL CANADA INTERNATIONAL
INVESTMENTS LIMITED
By
----------------------------------
Name:
Title:
AM LATIN AMERICA, LLC
By
----------------------------------
Name:
Title:
SBC INTERNATIONAL - BRAZIL HOLDING, LTD.
By
----------------------------------
Name:
Title:
TELECOM AMERICAS LTD.
By
----------------------------------
Name:
Title:
<PAGE>
ANNEX A
FORM OF AM DEBENTURE
<PAGE>
ANNEX B
SCHEDULES 2.03(b) AND 2.04
* * *
SCHEDULE 2.03(b)
EQUITY INTERESTS OF BCI INVESTMENTS IN SUBNEWCO1,
SUBNEWCO2 AND SUBNEWCO3
Equity Interests of Subnewco1
-----------------------------
Authorized Capital: 12,000 voting common shares ("Subnewco1
Common Shares")
48,301 voting non-participating preferred
shares with nominal economic value
("Subnewco1 Preferred Shares")
Issued and Outstanding Capital: 12,000 Subnewco1 Common Shares held by
the Company
41,342 Subnewco1 Preferred Shares held by
BCI Investments
6,688 Subnewco1 Preferred Shares held by
AM Latin America
Percentage Held Directly by BCI Investments holds 0% of Subnewco1
BCI Investments: Common Shares and 86% of Subnewco1
Preferred Shares.
Equity Interests of Subnewco2
-----------------------------
Authorized Capital: 12,000 voting common shares ("Subnewco2
Common Shares")
12,001 voting non-participating preferred
shares with nominal economic value
("Subnewco2 Preferred Shares")
Issued and Outstanding Capital: 12,000 Subnewco2 Common Shares held by
the Company
12,001 Subnewco2 Preferred Shares held by
BCI Investments
Percentage Held Directly by BCI Investments holds 0% of Subnewco2
BCI Investments: Common Shares and 100% of Preferred
Shares.
Equity Interests of Subnewco3
-----------------------------
Authorized Capital: 12,000 voting common shares ("Subnewco3
Common Shares")
12,001 voting non-participating preferred
shares with nominal economic value
("Subnewco3 Preferred Shares")
Issued and Outstanding Capital: 12,000 Subnewco3 Common Shares held by
the Company
12,001 Subnewco3 Preferred Shares held by
BCI Investments
Percentage Held Directly by BCI Investments holds 0% of Subnewco3
BCI Investments: Common Shares and 100% of Subnewco3
Preferred Shares.
<PAGE>
SCHEDULE 2.04
EQUITY INTERESTS OF SBCI BRAZIL HOLDING IN SUBNEWCO4
Equity Interests of SBCI Brasil Ltda.
-------------------------------------
Authorized Capital: The Articles of Association of SBCI Brasil Ltda.
("Subnewco4") do not provide for an authorized capital.
An unlimited number of quotas may be issued, as decided
upon by the Quotaholders.
Issued and 890,062,346 quotas are issued and outstanding, of which
Outstanding Capital: 445,031,172 are Class A quotas (voting stock) and
445,031,174 are Class B quotas (non-voting stock).
294,587,527 Class A quotas are held by SBC
International - Brazil Holding, Ltd. ("SBCI Brazil
Holding").
88,961,731 Class A quotas and 445,031,170 Class B
quotas are held by Telecom Americas Ltd. (the
"Company").
61,481,914 Class A quotas are held by AM Latin America.
1 Class B quota is held by Michael A. Meyer.
1 Class B quota is held by Phillip C. Essman.
1 Class B quota is held by Luiz Fernado Teixeira Pinto.
1 Class B quota is held by Daniel Hajj Aboumrad.
Percentage held
directly by SBCI Brazil SBCI Brazil Holding holds 66.195% of the Class A quotas
Holding: and 0% of the Class B quotas of Subnewco4.
Options, Warrants, Calls, Etc.
------------------------------
1. 6th Amendment to the Articles of Association of Subnewco4, dated as of
December 5, 2000.
2. Exchangeable Debenture Agreement, dated as of November 16, 2000, by and
among SBCI Brazil Holding, the Company and Subnewco4.
3. Exchangeable Debenture Agreement, dated as of December 5, 2000, among AM
Latin America, the Company and Subnewco4.
<PAGE>
ANNEX C
III. Bell Canada International BVI V Limited
"C. BCI BVI V Limited
-----------------
Upon the occurrence of the BCI BVI V Redemption Condition (as defined
below), BCI BVI V Limited shall redeem all, but not less than all, of the issued
and outstanding preference shares of BCI BVI V Limited (the "BCI BVI V
Preference Shares") at the time of the occurrence of the BCI BVI V Redemption
Condition for a purchase price equal to U.S.$0.01 per share. Not more than five
Business Days after the occurrence of the BCI BVI V Redemption Condition, BCI
BVI V Limited shall deliver a written notice to each of BCI Investments and AM
Latin America indicating: (i) that it intends to redeem all of the BCI BVI V
Preference Shares, (ii) that payment will be made upon surrender of the
certificates representing such BCI BVI V Preference Shares, and (iii) specifying
the consideration to be paid to each of BCI Investments and AM Latin America and
the place, manner and date of such payment and the surrender of the certificates
evidencing such BCI BVI V Preference Shares, which shall be within ten Business
Days of the date of such written notice. Each of BCI Investments and AM Latin
America shall surrender the share certificates representing such BCI BVI V
Preference Shares to BCI BVI V Limited and shall receive the redemption price in
accordance with the written notice delivered by BCI BVI V Limited. Any BCI BVI V
Preference Shares in respect of which the certificates are not surrendered in a
timely manner shall be automatically redeemed by BCI BVI V Limited, and BCI BVI
V Limited shall segregate and hold in trust any consideration to which BCI
Investments or AM Latin America, as the case may be, is entitled for a period of
up to six years. The failure of BCI BVI V Limited to timely redeem the BCI BVI V
Preference Shares upon the occurrence of the BCI BVI V Redemption Condition
shall not constitute a waiver of BCI BVI V Limited's right and obligation to
redeem such shares.
For purposes of the foregoing, "BCI BVI V Redemption Condition" means
the occurrence of any of the following: (i) receipt by the Company, BCI BVI V
Limited or any of the Company's or BCI BVI V Limited's Minority Investees,
Subsidiaries or Affiliates of the approval by ANATEL under Resolution 101 of
such agency or any successor regulation thereto which effectively permits the
Company or any future shareholder or shareholders holding voting common shares
of BCI BVI V Limited (the "BCI BVI V Common Shares") to Control BCI BVI V
Limited, (ii) a change in applicable Brazilian regulations or laws that results
in such approval no longer being required in the opinion of the Board of
Directors of BCI BVI V Limited, (iii) the delivery to BCI BVI V Limited of a
notice signed by, or on behalf of, the shareholder or shareholders holding a
majority of BCI BVI V Common Shares stating that, in its or their reasonable
judgment, the redemption of 100% of the BCI BVI V Preference Shares as
contemplated herein without ANATEL's approval will not result in a violation of
Resolution 101 of such agency or any successor regulation thereto, (iv) the Sale
of any BCI BVI V Preference Shares by BCI Investments or AM Latin America, as
the case may be (or by any Permitted Transferee of BCI Investments or AM Latin
America, as the case may be), to any party other than (a) the Company or its
successors and assigns, or (b) a Permitted Transferee of BCI Investments or AM
Latin America, as the case may be, holding Shares transferred to it pursuant to
and in accordance with Section 4.05 of the Shareholders Agreement, and (v) BCE
(in the case of BCI Investments) or America Movil (in the case of AM Latin
America) shall fail to hold, directly or indirectly, legal and beneficial
ownership of a majority of the issued and outstanding Capital Stock and Equity
Interests of BCI Investments or AM Latin America, as the case may be, or of any
Person holding BCI BVI V Preference Shares initially held by BCI Investments or
AM Latin America, as the case may be.
IV. SBCI Brasil Ltda.
Pursuant to (a) the Exchangeable Debenture Agreement, dated as of
November 16, 2000, among SBC International - Brazil Holding, Ltd. ("SBCI Brazil
Holding"), the Company and SBCI Brasil Ltda. in the form of Attachment 2 hereto
(the "SBCI Debenture") and (b) the Exchangeable Debenture Agreement, dated as of
December 5, 2000, among AM Latin America, the Company and SBCI Brasil Ltda. in
the form of Attachment 3 hereto (the "AM Debenture" and, together with the SBCI
Debenture, the "Debentures"), upon the occurrence of the Exchange Condition (as
defined in the Debentures), the Company shall have the right to elect to
exchange each of the Debentures for all of the SBCI Brasil Quotas (as defined in
the Debentures) in accordance with the terms of the Debentures."
<PAGE>
Attachment 3 to Schedule 5.11
-----------------------------
