Exhibit 1
MAXCOM TELECOMUNICACIONES, S.A. DE C.V.
BY-LAWS
FIRST CHAPTER
ARTICLE ONE.
The name of the Company shall be "MAXCOM TELECOMUNICACIONES", followed by the
terms "Sociedad Anonima de Capital Variable" (stock corporation with variable
capital) or the abbreviation thereof "S.A. de C.V."
ARTICLE TWO. The purposes of the Company are as follows:
a) The installation, operation and exploitation of a public telecommunications
network concessioned by the Ministry of Communications and Transportation and/or
the use, development and exploitation of radio-spectrum frequency bands, also
concessioned by the above-mentioned Ministry, as well as the provision of
auxiliary and related services.
b) The provision of services that allow the long-distance telephone
communications, both national and international.
c) The provision of public services of basic telephony and interconnection
with public networks.
d) The commercialization, purchase, sale, importation, exportation,
industrialization, distribution, manufacture, representation, concession,
commission, lease of any kind of articles, goods, services and value-added
secondary services and the trade, in general, with any equipment, services and
goods of any kind related to the communications industry.
e) To participate in the capital stock of business entities of any kind,
Mexican or foreign, public or private, including the purchase and sale of shares
of stock, interests or rights and, in general, to participate in investments of
any kind.
f) The representation in Mexico, or abroad, as an agent, commission merchant,
intermediary, or representative of all kind of organizations, companies,
businesses, individuals or corporations, Mexican or foreign, public or private.
g) The entering into contracts, agreements and undertakings of any kind, and
the execution of commercial transactions and legal proceedings or professional
acts of any kind in the line of business mentioned above, whether on behalf of
the Company or in representation of third parties.
h) The procurement and development for any legal reason of concessions,
permits, franchises, licenses, authorizations, allotments, patents, trademarks,
trade names and advertisements of any kind which contribute to the carrying out
of the purposes of the Company.
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i) To issue, accept, subscribe, guarantee and endorse, in any way, any type of
negotiable instruments and securities related to the Company's purposes, whether
on behalf of the Company or of third parties.
j) To acquire, lease, sell, import, export, commercialize or, for any other
legal reason, to posses or exploit personal property of any kind, real and
personal rights, as well as real property necessary for the securing of the
Company's purposes.
k) To procure any type of credits for the execution of the Company's purposes.
l) In general, to carry out all of acts and execute all kind of contracts or
agreements related to the Company's purposes.
ARTICLE THREE.
The corporate domicile shall be Mexico City, Federal District; provided,
however, other business offices may be established in other places in Mexico or
abroad.
ARTICLE FOUR.
The duration of the Company shall be unlimited.
ARTICLE FIVE.
a) The Company is organized and existing under the laws of Mexico.
Shareholders may be Mexican or any other foreign nationality; provided however
that the equity interest in the Company held by non-Mexican shareholders shall
at no time exceed the maximum foreign investment percentage permitted under the
Foreign Investment Law.
b) The current and future foreign shareholders of the Company firmly undertake
with the Ministry of Foreign Affairs to consider themselves as Mexican nationals
(i.e., such foreign shareholders shall have no additional rights as shareholders
based solely on their nationality or country of domicile) regarding the acquired
or owned shares of stock of the Company, as well as regards the properties,
rights, concessions, securities or interests owned by the Company, or the rights
and obligations derived from the agreements entered into with the Mexican
authorities in which this Company is a party thereof. The current or future
foreign shareholders of the Company firmly undertake not to invoke the
protection of their government, under penalty of, on the contrary, to forfeit
their shares of stock issued by this Company to the benefit of the Mexican
nation. The undertaking set forth in this paragraph (b) shall be considered as
agreed before the Ministry of Foreign Affairs by the simple fact that such
undertaking by the current or future foreign shareholders of the Company is
included in these Bylaws.
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SECOND CHAPTER
CAPITAL STOCK AND SHARES OF STOCK
ARTICLE SIX.
a) The capital stock shall be divided in a fixed portion that cannot be
withdrawn of $54,753,302.00 Mex. Cy. (Fifty four million seven hundred and fifty
three thousand three hundred and two pesos 00/100), represented by 1,501,827
(One million five hundred and one thousand eight hundred and twenty seven)
shares with no-par value, fully paid and shall be identified in the Company's
shareholder registry book as Class I, and in a variable portion that shall be
identified as Class II, which Class II shall be unlimited at all times. The
shares representing the Class II shall not have the withdrawal right referred to
in article 213 of the General Business Corporation Law (Ley General de
Sociedades Mercantiles) of Mexico (the "General Business Corporation Law").
b) The capital stock shall be represented by shares which are nominative,
common and no par value (the "Common Shares") and shares which are nominative,
no par value with a preference on liquidation and other preferences set forth
herein (the "Preferred Shares"). Common Shares shall initially be divided into
(i) full voting Series "A" shares, (ii) full voting Series "B" shares, and (iii)
nonvoting Series "N" shares. Preferred Shares shall initially be divided into
(i) full voting Series "A-1" shares, (ii) full voting Series "B-1" shares, (iii)
limited voting Series "N-1" shares and (iv) limited voting Series "N-2" shares.
c) Series "A" and Series "A-1" shares shall only be subscribed, acquired or
owned by Mexicans; Series "B", Series "B-1", Series "N", Series "N-1" and Series
"N-2" shares shall be freely subscribed by Mexican or foreign investors subject
to the limitations set forth in the Foreign Investment Law and article 12 of the
Federal Telecommunications Law.
d) At all times until the Foreign Investment Law and article 12 of the Federal
Telecommunications Law allow otherwise, Mexican investors shall have at least
51% (fifty-one percent) of the full voting shares of the Company and effective
control thereof. Series "B" and "B-1" shares together may not represent more
than 49% (forty nine percent) of the full voting shares of the Company. Series
"N", Series "N-1" and Series "N-2" shares may not represent more than 95%
(ninety five percent) of the outstanding capital stock of the Company.
e) Subject to certain approval rights set forth herein, upon approval of the
shareholders of the Company at a shareholders' meeting (with the prior
authorization of the Ministry of Economy), from time to time the Company may
issue limited voting and limited corporate rights shares, with full economic and
preferential rights.
f) Holders of each series of shares will have only the preemptive right to
subscribe to new issuances of equity stock of the Company to the extent
specifically required by applicable Mexican law.
g) Pursuant to the Foreign Investment Law, the Series "N", Series "N-1" and
Series "N-2" shares shall not be counted for purposes of determining the foreign
investment percentage participation in the Company's capital stock, nor shall
the Series "N", Series "N-1" and Series
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"N-2" shares be counted for purposes of determining quorum for general,
ordinary, extraordinary or special shareholders' meetings, except as otherwise
provided in these Bylaws. In connection with any shareholders' meeting where the
holders of Series "N", "N-1" or "N-2" shares are entitled to vote on a specific
matter, then such "Series "N", "N-1" or "N-2" shares entitled to vote on such
specific matter shall be counted for purposes of determining a quorum of the
shareholders voting on such matter.
h) The Preferred Shares will have the following rights with respect to
liquidation:
(i) As an additional economic right, the Preferred Shares will
have a preferred liquidation right vis-a-vis the Common Shares
(the "Preferred Liquidation Right"), in the case of a
liquidation, winding up or dissolution of the Company. Such
Preferred Liquidation Right of the Preferred Shares will
consist of the right to receive (with respect to each
Preferred Share), prior to and in preference of any
distribution of any of the assets of the Company to the
holders of Common Shares, an amount (the "Liquidation Amount")
equal to the greater of (x) the Liquidation Preference Amount
(as defined below in this subparagraph (h)(i)) and (y) the
amount that a holder of such Preferred Share would have
received if it had converted such Preferred Share into
Conversion Stock (as defined in Article Fifty-Three below) at
the then effective Conversion Price (as defined in paragraph
(a) of Article Seven below) for such Preferred Share
immediately prior to such liquidation, winding up or
dissolution of the Company. If upon any such liquidation,
winding-up or dissolution, the Company's assets to be
distributed among the holders of the Preferred Shares are
insufficient to permit payment to such holders of the
aggregate amount which they are entitled to be paid under this
paragraph (h), then the entire assets available for
distribution to the Company's shareholders shall be
distributed on a Pro Rata Basis (as defined in Article
Fifty-Three below) among such holders based upon the aggregate
Liquidation Preference Amount held by each such holder.
"Liquidation Preference Amount" means the per share amount
equal to the sum of (I) U.S.$0.4927, as adjusted for stock
splits, stock dividends and similar events (the "Original
Issue Price"), plus (II) an amount equal to 12% (twelve
percent) per annum thereon compounded semi-annually (the
"Accretive Amount").
(ii) A sale of all or substantially all of the consolidated assets
of the Company or a merger, recapitalization, reorganization
or consolidation of the Company, immediately after which the
Company's shareholders beneficially own less than fifty
percent of the voting power of the equity securities of the
surviving entity shall be deemed a liquidation for purposes of
this paragraph (h) (a "Deemed Liquidation"); provided, that
with respect to (i) each series of Preferred Shares other than
Series "N-2" shares), the holders of a majority of the then
outstanding Preferred Shares (other than Series "N-2" shares)
present at a shareholders' meeting and entitled to vote
thereat voting together as a class may waive any "Deemed
Liquidation" solely with respect to the Preferred Shares other
than Series "N-2" shares and (ii) the Series "N-2" shares, the
holders of a majority of the then outstanding Series "N-2"
shares present at a shareholders' meeting and
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entitled to vote on such waiver thereat voting as a separate
class may waive any Deemed Liquidation solely with respect to
the Series "N-2" shares.
(iii) In connection with any liquidation, winding up, dissolution or
Deemed Liquidation, each type of asset included in the
proceeds available for distribution to the Company
shareholders (whether in the form of cash, securities or
otherwise) shall be allocated on a Pro Rata Basis among the
shareholders entitled to participate.
i) The holders of Series "N-1" shares are entitled to vote as a separate
class, in a shareholders' meeting of the Company (or by written consent in lieu
thereof), exclusively with respect to the following corporate matters:
(i) Any amendment to these Bylaws that adversely and
disproportionately (in comparison to the effect on Series
"N-2" shares (or, if applicable, New Series N-2 Shares))
affects the economic characteristics (i.e., conversion right,
liquidation right and dividend right) of Series "N-1" shares;
provided that the authorization of any additional series or
class of capital stock with a more senior liquidation
preference or more senior dividend preference shall not be
deemed to be an adverse amendment of the economic
characteristics of the Series "N-1" shares so long as the
economic characteristics of such additional series or class of
capital stock does not affect the Series "N-1" shares in a
manner that is adverse and disproportionate in comparison to
the effect on the Series "N-2" shares.
(ii) Any amendment to this paragraph (i) of Article Six of these
Bylaws.
Each of the matters described in clauses (i) through (ii) of this paragraph (i)
shall be approved by an affirmative vote of the holders of a majority of the
Series "N-1" shares present at a shareholders' meeting and entitled to vote
thereat on such matter.
With respect to any waiver of a "Deemed Liquidation" pursuant to paragraph (h)
of this Article Six), the holders of Series "N-1" shares shall be entitled to
vote together with the Preferred Shares (other than Series "N-2" shares) as a
single class on any waiver of a "Deemed Liquidation" solely with respect to the
Preferred Shares other than Series "N-2" shares. In connection therewith, such
"Deemed Liquidation" shall be approved by an affirmative vote of the holders of
a majority of the Series "N-1" shares present at a shareholders' meeting and
entitled to vote on such waiver thereat voting together with the Preferred
Shares (other than Series "N-2" shares) as a single class.
The rights in this paragraph (i) of this Article Six shall not apply to any
Conversion Stock received upon conversion of Series "N-1" shares or New
Preferred Shares.
j) The holders of the Series "N-2" shares are entitled to vote as a separate
class in a shareholders' meeting of the Company (or by written consent in lieu
thereof) exclusively with respect to the following corporate matters:
(i) Any amendment to these Bylaws that adversely and
disproportionately (in comparison to the effect on Series
"N-1" shares) affects the economic
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characteristics (i.e., conversion right, liquidation right and
dividend right) of Series "N-2" shares, provided that the
authorization of any additional series or class of capital
stock with a more senior liquidation preference or more senior
dividend preference shall not be deemed to be an adverse
amendment of the economic characteristics of the Series "N-2"
shares so long as the economic characteristics of such
additional series or class of capital stock does not affect
the Series "N-2" shares in a manner that is adverse and
disproportionate in comparison to the effect on the Series
"N-1" shares.
(ii) Any amendment to paragraph (b) of Article Twenty-Three of
these Bylaws that adversely affects the right of the holders
of a majority of the Series "N-2" shares to designate an
observer to the board of directors of the Company (the
"Board") pursuant thereto or any amendment to paragraph (v) of
Article Twenty-Nine that adversely affects the right to elect
a director to the Board pursuant thereto.
(iii) Any amendment (other than to the extent necessary to comply
with applicable law) of (A) Article Nine of these Bylaws that
imposes additional transfer restrictions or transfer
conditions on the Series "N-2" shares or (B) these Bylaws
(without duplication of clause (A)) that imposes additional
express transfer restrictions or express transfer conditions
on the Series "N-2" shares.
(iv) Any amendment to paragraph (e) of Article Nine that adversely
affects the tag-along rights or obligations of the holders of
Series "N-2" shares set forth therein.
(v) Any amendment to paragraph (f) of Article Nine that adversely
affects the drag-along rights or obligations of the holders of
Series "N-2" shares set forth therein.
(vi) Any amendment to paragraph (e) of Article Thirteen that
materially and adversely affects the information rights of the
Series N-2 Observer.
(vii) Any amendment to this paragraph (j) of Article Six of these
Bylaws.
(viii) Any waiver of a "Deemed Liquidation" pursuant to paragraph (h)
of this Article Six solely with respect to the Series "N-2"
shares.
(ix) The designation of the Series N-2 Observer (as defined in
paragraph (b) of Article Twenty-Three) so long as the N-2
Observer Conditions are satisfied.
(x) The election of one director to the Board to the extent
specifically contemplated and permitted pursuant to paragraph
(vi) of Article Twenty-Nine (and subject to each of the
conditions set forth therein).
Each of the matters described in clauses (i) through (x) of this paragraph (j)
shall be approved by an affirmative vote of the holders of a majority of the
Series "N-2" shares present at a shareholders' meeting and entitled to vote on
such matter thereat. Notwithstanding anything contained herein to the contrary,
to the extent that the holders of the Series "N-2" shares would otherwise be
entitled to vote on an amendment of these Bylaws (in connection with the
deletion or amendment of a particular provision), if such amendment is being
effectuated in connection
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with an event contemplated by these Bylaws that will terminate the right of the
holders of the Series "N-2" shares contained in such provision being amended
(e.g., the Series "N-2" shareholders would not be entitled to vote as a separate
class on an amendment of the Bylaws that deletes paragraph (e) of Article Nine
in connection with a Qualified Public Offering), the holders of the Series "N-2"
shares shall not be entitled to vote on such matter as a separate class unless
such amendment adversely and disproportionately (in comparison to the effect on
Series "N-1" shares) affects the Series "N-2" shares so long as such amendment
is conditioned upon the effectiveness of such termination event.
The rights in this paragraph (j) of this Article Six shall not apply to any
Conversion Stock received upon conversion of Series "N-2" shares or New Series
N-2 Shares.
k) The provisional or definitive share certificates shall cover one or more
shares and shall bear the signatures of two members of the Board, which may be
signed in facsimile under the terms of Section VIII, article 125 of the General
Business Corporation Law.
l) Said certificates shall comply with the requirements set forth in Article
125 of the General Business Corporation Law and, for purposes of dividend
payments and for the exercise of other monetary rights, numbered coupons shall
be adhered. The provision referred to in Article Five above and a summary of
this Article Six shall be included in the provisional and definitive share
certificates.
m) Definitive share certificates shall be issued by the Company to its
shareholders within 365 calendar days after any subscription or issuance of
shares of the Company with respect thereto. Until definitive share certificates
are issued, provisional certificates, which shall always bear the holder's name,
shall be issued, and shall be exchanged for the definitive share certificates
once issued.
n) Shares shall be paid by the subscribers under the terms and conditions
approved in the corresponding shareholders' meeting that approves their
issuance.
o) Subject to the transfer restrictions provided for in these Bylaws, in the
event a shareholder intends to make a Transfer (as defined in Article
Fifty-Three) or subscribe for shares representing 10% (ten percent) or more (or
such other higher or lower percentage, if any, as then required under applicable
Mexican law) of the outstanding capital stock of the Company:
(i) Such shareholder shall provide written notice thereof to the
Company and the Company shall inform the Board and Ministry of
Communications and Transportation, which notice shall include
the information regarding the person or entity proposing to
acquire the shares (the "Buyer").
(ii) If the applicable period of review by the Ministry of
Communications and Transportation has elapsed and the Transfer
or subscription has not been objected by the Ministry of
Communications and Transportation, such Transfer or
subscription shall be considered approved by the Ministry of
Communications and Transportation.
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(iii) Only those Transfers or subscriptions approved or not objected
by the Ministry of Communications and Transportation, which,
with respect to any Transfers, also have complied with the
transfer restrictions contained in these Bylaws, shall be
recorded in the Company's shareholder registry book, without
prejudice of the authorizations demanded from other
authorities under the applicable provisions.
(iv) In addition, if the Buyer is a corporation, then the
information needed by the aforesaid Ministry to identify the
individuals that, directly or indirectly have equity
participation higher than 10% (ten percent) (or such other
higher or lower percentage, if any, as then required under
applicable Mexican law) of the capital stock of said
corporation, shall be presented in such notice.
(v) Without prejudice to any other notices required under these
Bylaws, the submittal of the notice referred to above shall
not be required when the subscription or Transfer refers to
neutral investment shares issued under the Foreign Investment
Law (Series "N", Series "N-1" and "N-2" shares of the Company)
or when the increases in capital are subscribed by the
shareholders themselves, provided that with respect to a
subscription by shareholders, each shareholder's proportionate
interest in the Company remains the same after such
subscription.
To the extent applicable, the provisions of this paragraph (o) shall be
reflected on the definitive or provisional share certificates issued by the
Company.
ARTICLE SEVEN.
a) Optional Conversion. At any time and from time to time, any holder of
Preferred Shares may convert all or any portion of such Preferred Shares held by
such holder into a number of shares of Conversion Stock computed by multiplying
(i) the number of Preferred Shares to be converted by (ii) U.S. $0.4927 divided
by the Conversion Price (as defined below) then in effect for such series of
Preferred Shares. The initial Conversion Price is U.S. $0.4927 per share (as
adjusted from time to time pursuant to paragraph (i) of this Article Seven, the
"Conversion Price"). The Conversion Price then in effect for such series of
Preferred Shares shall be expressed (and rounded up or down) to the nearest four
decimals.
b) Mandatory Conversion. The Company may at any time require the conversion of
all, but not less than all, of the outstanding Preferred Shares into the
Conversion Stock at the then applicable Conversion Price if the Company is at
such time effecting a Qualified Public Offering (as defined in Article
Fifty-Three). Any such mandatory conversion shall only be effected at the time
of and subject to the closing of the sale of shares pursuant to such Qualified
Public Offering and upon written notice of such mandatory conversion delivered
to all holders of Preferred Shares at least five business days prior to such
closing.
c) Except as otherwise provided herein, each conversion of Preferred Shares
shall be deemed to have been effected as of the close of business on the date on
which the certificate or certificates representing the Preferred Shares to be
converted have been surrendered for conversion at the principal office of the
Company. At the time any such conversion has been effected, the rights of the
holder of the Preferred Shares surrendered for conversion as a holder of such
Preferred
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Shares shall cease and such holder shall be deemed to have become the holder of
record of the shares of Conversion Stock represented thereby.
d) Notwithstanding any other provision hereof, if a conversion of Preferred
Shares is to be made in connection with a Public Offering (as defined in Article
Fifty-Three), a Sale of the Company (as defined in Article Fifty-Three) or other
transaction affecting the Company, the conversion of any Preferred Shares may,
at the election of the holder thereof, be conditioned upon the consummation of
such transaction, in which case such conversion shall not be deemed to be
effective until such transaction has been consummated.
e) As soon as practicable after a conversion has been effected the Company
shall deliver a certificate or certificates representing the number of shares of
Conversion Stock issuable by reason of such conversion in such denomination or
denominations as the converting holder has specified and a certificate
representing any Preferred Shares which were represented by the certificate or
certificates delivered to the Company in connection with such conversion but
which were not converted.
f) The issuance of certificates for shares of Conversion Stock upon conversion
of Preferred Shares shall be made without charge to the holders of such
Preferred Shares for any issuance tax in respect thereof or other cost incurred
by the Company in connection with such conversion and the related issuance of
shares of Conversion Stock. Upon conversion of each Preferred Share, the Company
shall take all such actions as are necessary in order to ensure that the
Conversion Stock issuable with respect to such conversion shall be validly
issued and fully paid, free and clear of all taxes, liens, charges and
encumbrances with respect to the issuance thereof, other than with respect to
any contractual encumbrances pursuant to agreements among the Company's
securityholders. The Company shall (i) make any applicable Mexican governmental
filings and seek any applicable Mexican governmental approvals in connection
with any conversion of Preferred Shares and (ii) assist and cooperate with any
holder of Preferred Shares required to make any governmental filings or obtain
any governmental approval prior to or in connection with any conversion of
Preferred Shares hereunder.
g) Subject to applicable restrictions, if any, under the Foreign Investment
Law and Article 12 of the Federal Telecommunications Law of Mexico, the Company
shall take all reasonable steps necessary (including, without limitation, using
its best efforts to obtain any requisite consents in connection therewith from
the National Securities and Banking Commission) to effectuate any required or
permitted conversion hereunder.
h) If any fractional interest in a share of Conversion Stock would, except for
the provisions of this paragraph (h), be delivered upon any conversion of the
Preferred Shares, in lieu of delivering the fractional share therefor, the
Company shall round such fractional interest to the nearest whole number (i.e.,
if such fractional interest is less than one-half, the fractional interest shall
be automatically reduced to zero without the payment of any consideration
therefor by the Company and if such fractional share is one-half or greater, the
fractional interest shall be automatically increased to one share without the
payment of any additional consideration therefor by the holder).
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i) Adjustment to Conversion Price.
(i) In order to prevent dilution of the conversion rights granted
under this Article Seven, the Conversion Price shall be
subject to adjustment from time to time pursuant to this
paragraph (i).
(ii) Until December 31, 2002, if the Company issues or sells, or in
accordance with paragraph (j) below, is deemed to have issued
or sold, any Common Shares for consideration per share less
than either (A) the Conversion Price in effect immediately
prior to such time or (B) the then fair market value of such
Common Shares (as determined in good faith by the Board) as of
the date of such issuance or sale, then immediately upon such
issuance or sale or deemed issuance or sale, the Conversion
Price shall automatically be reduced to the lowest
consideration (expressed as a net price per share) at which
any such Common Shares have been issued or sold or are deemed
to have been issued or sold.
(iii) After December 31, 2002, if the Company issues or sells, or in
accordance with paragraph (j) below, is deemed to have issued
or sold, any Common Shares for consideration per share less
than either (A) the Conversion Price in effect immediately
prior to such time or (B) the then fair market value of the
Common Shares (as determined in good faith by the Board) as of
the date of such issuance or sale, then immediately upon such
issuance or sale or deemed issuance or sale the Conversion
Price shall be reduced to whichever of the following is lower:
(a) an amount equal to (A) the sum of (i) the product
derived by multiplying the Conversion Price in effect
immediately prior to such issuance or sale by the
number of Common Shares Deemed Outstanding (as
defined in Article Fifty-Three) immediately prior to
such issuance or sale, plus (ii) the aggregate
consideration (expressed as a net price per share),
if any, received by the Company upon such issuance or
sale, divided by (B) the number of Common Shares
Deemed Outstanding immediately after such issuance or
sale; and
(b) the Conversion Price determined by multiplying the
Conversion Price in effect immediately prior to such
issuance or sale by a fraction, the numerator of
which shall be the sum of (i) the number of Common
Shares Deemed Outstanding immediately prior to such
issuance or sale multiplied by the then fair market
value of the Common Shares (as determined in good
faith by the Board) as of the date of such issuance
or sale, plus (ii) the aggregate consideration, if
any, received by the Company upon such issuance or
sale, and the denominator of which shall be the
product derived by multiplying the then fair market
value of the Common Shares (as determined in good
faith by the Board) as of the date of such issuance
or sale times the number of Common Shares Deemed
Outstanding immediately after such issuance or sale.
(iv) Exceptions. Notwithstanding the foregoing, there shall be no
adjustment to the Conversion Price hereunder with respect to
(A) any Permitted Options (as defined in Article Fifty-Three),
(B) any Option (as defined in Article Fifty-Three) issued
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pursuant to a management incentive plan approved by the Board,
including the affirmative vote of at least one Nexus Director,
(C) any Preferred Shares issued pursuant to the New Investor
Subscription Agreement (as defined in Article Fifty-Three) so
long as the price per share is not less than the Original
Issue Price, (D) any shares issued upon the exercise or
conversion of any of the foregoing, (E) any Conversion Stock
issued upon conversion of any Preferred Shares, and (F) any
New Preferred Shares or New Series N-2 Shares issued in
connection with a Regulatory Amendment.
(v) Subdivision or Combination of Common Shares. If the Company at
any time subdivides (by any stock split, stock dividend,
recapitalization or otherwise) one or more series of its
outstanding Common Shares into a greater number of shares, the
Conversion Price in effect immediately prior to such
subdivision shall be proportionately reduced, and if the
Company at any time combines (by reverse stock split or
otherwise) one or more classes of its outstanding Common
Shares into a smaller number of shares, the Conversion Price
in effect immediately prior to such combination shall be
proportionately increased.
(vi) Notices. Following any adjustment of the Conversion Price, the
Company shall give written notice thereof to all record
holders of Preferred Shares, setting forth the calculation of
such adjustment.
(vii) Upon the written request from time to time by any record
holder of Preferred Shares, the Company shall furnish or cause
to be furnished to such holder a certificate setting forth (i)
a summary of all adjustments and readjustments to the
Conversion Price, (ii) the Conversion Price for such series of
Preferred Shares at the time in effect, and (iii) the number
of shares of Conversion Stock which at the time would be
received upon the conversion of such Preferred Shares.
j) For purposes of determining the adjusted Conversion Price under paragraph
(i) of this Article Seven, the following shall be applicable:
(i) Issuance of Rights or Options.
(a) If the Company in any manner grants or sells any
Options and the price per Common Share issuable upon
the exercise of such Options, or upon conversion or
exchange of any Convertible Securities (as defined in
subparagraph (j)(ii)(a) below) issuable upon exercise
of such Options, is less than (a) the Conversion
Price in effect immediately prior to the time of the
granting or sale of such Options or (b) the then fair
market value of the Common Shares (as determined in
good faith by the Board) as of the date of such
issuance or sale, then the total maximum number of
Common Shares issuable upon the exercise of such
Options or upon conversion or exchange of the total
maximum amount of such Convertible Securities
issuable upon the exercise of such Options shall be
deemed to be outstanding and to have been issued and
sold by the Company at the time of the granting or
sale of such Options for such price per share. For
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purposes of this paragraph, the "price per Common
Share issuable upon exercise or conversion" of such
Option shall be determined by dividing (A) the total
amount, if any, received or receivable by the Company
as consideration for the granting or sale of such
Options, plus the minimum aggregate amount of
additional consideration payable to the Company upon
exercise of all such Options, plus in the case of
such Options which relate to Convertible Securities,
the minimum aggregate amount of additional
consideration, if any, payable to the Company upon
the issuance or sale of such Convertible Securities
and the conversion or exchange thereof, by (B) the
total maximum number of Common Shares issuable upon
the exercise of such Options or upon the conversion
or exchange of all such Convertible Securities
issuable upon the exercise of such Options.
(b) No further adjustment of the Conversion Price shall
be made upon the actual issue of such Common Shares
or such Convertible Security upon the exercise of
such Options or upon the actual issue of such Common
Shares upon conversion or exchange of such
Convertible Security.
(ii) Issuance of Convertible Securities.
(a) If the Company in any manner issues or sells any
stock or other securities convertible into or
exchangeable for Common Shares (collectively,
"Convertible Securities") and the price per Common
Share issuable upon conversion or exchange thereof is
less than (a) the Conversion Price in effect
immediately prior to the time of such issuance or
sale or (b) the then fair market value of the Common
Shares (as determined in good faith by the Board as
of the date of such issuance or sale), then the
maximum number of Common Shares issuable upon
conversion or exchange of such Convertible Securities
shall be deemed to be outstanding and to have been
issued and sold by the Company at the time of the
issuance or sale of such Convertible Securities for
such price per share. For the purposes of this
paragraph, the "price per Common Share issuable upon
conversion or exercise" shall be determined by
dividing (A) the total amount received or receivable
by the Company as consideration for the issuance or
sale of such Convertible Securities, plus the minimum
aggregate amount of additional consideration, if any,
payable to the Company upon the conversion or
exchange thereof, by (B) the total maximum number of
Common Shares issuable upon the conversion or
exchange of all such Convertible Securities.
(b) No further adjustment of the Conversion Price shall
be made upon the actual issue of such Common Shares
upon conversion or exchange of any Convertible
Security, and if any such issuance or sale of such
Convertible Security is made upon exercise of any
Options for which adjustments of the Conversion Price
had been or are to be made pursuant to other
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provisions of this paragraph (j), no further
adjustment of the Conversion Price shall be made by
reason of such issuance or sale.
(iii) Change in Option Price or Conversion Rate. If the purchase
price provided for in any Option, the additional consideration
(if any) payable upon the issue, conversion or exchange of any
Convertible Security or the rate at which any Convertible
Security is convertible into or exchangeable for Common Shares
changes at any time, the Conversion Price in effect at the
time of such change shall be adjusted immediately to the
Conversion Price which would have been in effect at such time
had such Option or Convertible Security originally provided
for such changed purchase price, additional consideration or
conversion rate, as the case may be, at the time initially
granted, issued or sold.
(iv) Treatment of Expired Options and Unexercised Convertible
Securities. Upon the expiration of any Option or the
termination of any right to convert or exchange any
Convertible Security without the exercise of any such Option
or right, the Conversion Price then in effect hereunder shall
be adjusted immediately to the Conversion Price which would
have been in effect at the time of such expiration or
termination had such Option or Convertible Security, to the
extent outstanding immediately prior to such expiration or
termination, never been issued.
(v) Calculation of Consideration Received. If any Common Share,
Option or Convertible Security is issued or sold or deemed to
have been issued or sold for cash, the consideration received
therefor shall be deemed to be the amount received by the
Company therefor (net of discounts, commissions and related
expenses). If any Common Share, Option or Convertible Security
is issued or sold for a consideration other than cash, the
amount of the consideration other than cash received by the
Company shall be the fair market value of such consideration
(as determined in good faith by the Board) as of the date of
such issuance or sale. If any Common Share, Option or
Convertible Security is issued to the owners of the
non-surviving entity in connection with any merger in which
the Company is the surviving corporation, the amount of
consideration therefor shall be deemed to be the fair market
value of such portion of the net assets and business of the
non-surviving entity as is attributable to such Common Share,
Option or Convertible Security (as determined in good faith by
the Board as of the date of such issuance or sale).
(vi) Treasury Shares. The number of Common Shares outstanding at
any given time shall not include shares owned or held by or
for the account of the Company or any subsidiary, and the
disposition of any shares so owned or held shall be considered
an issuance or sale of Common Shares.
k) Limitation on Conversion. Notwithstanding any other provision hereof, no
holder of Preferred Shares shall be entitled to exercise the conversion rights
under this Article Seven to acquire any Common Share unless, at such time, all
holders of Preferred Shares could exercise such conversion rights without
causing the Company to be in violation of applicable Mexican
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law, including, without limitation, the Foreign Investment Law and the Federal
Telecommunications Law of Mexico.
l) Restriction on Redemption of Preferred Shares. The Company shall not
redeem, purchase or otherwise acquire for value any Series "A-1" shares, Series
"B-1" shares or Series "N-1" shares or, upon conversion thereof, New Preferred
Shares, unless the Company simultaneously offers to redeem or purchase a pro
rata portion of the Series "N-2" shares, or upon conversion thereof, New Series
N-2 Shares.
m) Confirmation of Fair Market Value. In connection with any determination of
fair market value made by the Board pursuant to paragraphs (i) and (j) of
Article Seven, if such determination is made or to be made in connection with
the issuance or sale (or deemed issuance or sale) of any Common Shares in any
rolling twelve month period resulting in an increase, individually or in the
aggregate, of more than five percent to the number of Common Shares Deemed
Outstanding (as compared to the Common Shares Deemed Outstanding at the
beginning of such twelve month period (as appropriately adjusted for any
proportional adjustments, such as stock splits, in the Company Shares), then
unless (1) at least 70% of the aggregate consideration received by the Company
in connection with such issuance or sale (or deemed issuance or sale) is from an
Independent Third Party (as defined in Article Fifty-Three), (2) all of the
consideration received by the Company in connection with such issuance or sale
is cash (or, in the case of Options, the strike price is payable only in cash)
and (3) the Company does not enter into any services or consulting or similar
agreement related to or conditioned upon such issuance or sale with any person
or entity acquiring such Common Shares (or any Affiliate (as defined in Article
Fifty-Three) or Restricted Person (as defined in paragraph (h) of Article Ten)
thereof, the Board shall obtain, at the Company's expense, a fairness opinion in
connection with such determination from an internationally-recognized or
nationally-recognized (in the United States) financial advisory firm or
investment bank selected by the Company.
ARTICLE EIGHT.
a) Any increase or decrease to the minimum fixed capital stock of the Company
shall be resolved by a General Extraordinary Shareholders' Meeting.
b) Subject to Articles Ten and Eleven hereof, increases or decreases to the
variable portion of the Company may be resolved by a General Ordinary
Shareholders' Meeting.
c) Increases in capital stock shall be through the issuance of shares in the
corresponding series, observing at any time the provisions of the Foreign
Investment Law, and Article 12 of the Federal Telecommunications Law. Increases
in capital stock through the issuance of Series "N", "N-1", "N-2" or any other
neutral investment shares may not represent in the aggregate more than 95%
(ninety five percent) of the outstanding capital stock of the Company.
d) In connection with any issuance of capital stock or similar equity
securities by the Company, the holders of the Company's capital stock shall have
only the minimum preemptive rights granted pursuant to applicable Mexican law.
The Company, through the Board, shall notify the shareholders through a written
notice delivered to the shareholders of record (including to any trustee holding
shares on behalf of any beneficial owner of Company Shares), and through
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publication in (i) the Official Gazette of the Federation or (ii) in the
"Negocios" section of the "Reforma" or "El Financiero" newspapers.
ARTICLE NINE.
a) Transfer of Shares. No holder of Company Shares shall Transfer any interest
in such shares except pursuant to the provisions of this Article Nine or
pursuant to a Public Offering. Notwithstanding the foregoing, the Series "N-2"
shares shall not be subject to any obligations or entitled to any rights with
respect to paragraphs (b) (Retention), (c) (First Refusal Rights) and (d) (Right
of First Offer on Transfers by Investors) of this Article Nine. Any Transfer in
violation of this Article Nine shall be null and void ab initio and shall not be
consented to or recognized or registered by the Company for any purpose.
b) Retention. Notwithstanding anything to the contrary contained in these
Bylaws, except with respect to Transfers (as defined in Article Fifty-Three) to
a Permitted Transferee (as defined in paragraph (i) of this Article Nine) or
pursuant to a Public Offering (as defined in Article Fifty-Three), no holder of
Company Securities shall Transfer any Series "A" shares, Series "A-1" shares or
Series "B" shares (each a "Restricted Share" and collectively, the "Restricted
Shares") without the prior written approval of both (i) Nexus (as defined in
Article Fifty-Three), solely in its capacity as a shareholder (and without any
fiduciary duty to the Company or any of the Company's shareholders) and (ii) the
Board, including the affirmative vote of at least one Nexus Director (as defined
in paragraph (a) of Article Twenty-Three) (collectively, the "Restricted Share
Transfer Consent"), provided, in each case, that the Restricted Share Transfer
Consent may be withheld for any reason or no reason. In connection with any
proposed Transfer of Restricted Shares, if the Restricted Share Transfer Consent
is obtained with respect to such proposed Transfer, the transferring holder of
Restricted Shares shall also comply with the requirements of paragraph (c), (e)
and (f) of this Article Nine. The requirement contained in this paragraph (b) to
obtain the Restricted Share Transfer Consent in connection with a Transfer of
Restricted Shares shall terminate upon the earlier to occur of (i) a Sale of the
Company (as defined in Article Fifty-Three), (ii) the sale of all or
substantially all of the consolidated assets of the Company to an Independent
Third Party (iii) a Qualified Public Offering or (iv) the effectiveness of the
Regulatory Amendments and the modifications to the Company's capital structure
described in Article Twenty-Nine.
c) First Refusal Rights. Except in connection with a Transfer to a Permitted
Transferee, a Sale of the Company or a Public Offering, at least 30 (thirty)
days prior to any Transfer of an interest in any Restricted Shares by a
shareholder other than an Investor (the "Transferring Non-Investor
Shareholders"), such shareholder shall deliver to the Secretary of the Board a
notice (the "Offer Notice") disclosing the number of Restricted Shares to be
transferred, the proposed price, terms and conditions of the Transfer and the
identity of the prospective transferee(s) who submitted the offer, and the
Secretary of the Board shall then promptly deliver such Offer Notice (but in any
event within 5 (five) days) to each of the other shareholders of the Company
(other than any holders of Series "N-2" shares (and any shares issued upon
conversion thereof)), but only with respect to any such holder's Series "N-2"
shares (or, if applicable, any shares issued upon conversion thereof) (i.e., a
holder of Series "N-1" shares and Series "N-2" shares would be entitled to
participate only with respect to their Series "N-1" shares)). Such other
shareholders (on a Pro Rata Basis) may elect to purchase all (but not less than
all) of the Restricted Shares to
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be transferred on the same terms and conditions as those set forth in the Offer
Notice by giving written notice to the Transferring Non-Investor Shareholders
within 30 (thirty) days after the Offer Notice has been given to the Secretary
of the Board. If such other shareholders elect to purchase all such Restricted
Shares hereunder, the Transfer of such Restricted Shares shall be consummated as
soon as possible after the delivery of the election notice(s) to the
Transferring Non-Investor Shareholders, but in any event within 15 (fifteen)
days after the expiration of such 30-day period. If such other shareholders do
not elect to purchase all of the Restricted Shares specified in the Offer
Notice, the remaining Restricted Shares shall be promptly reoffered on a Pro
Rata Basis to those shareholders electing to purchase the offered Restricted
Shares by delivery of an additional written notice. If within 10 (ten) days of
the delivery of such additional notice the other electing shareholders have not
elected to purchase all of the Restricted Shares specified in the Offer Notice,
the Transferring Non-Investor Shareholders may Transfer the Restricted Shares
specified in the Offer Notice to the transferee(s) specified in the Offer Notice
at a price and on terms no more favorable to the transferee(s) than specified in
the Offer Notice for a period of no more than 60 (sixty) days after the 45
(forty-five) days after delivery of the Offer Notice (the "RFR Free Transfer
Period"). Any Restricted Shares not transferred within such 60-day period shall
remain subject to the provisions of this paragraph (c).
Notwithstanding the foregoing, in the event that an electing shareholder is not
permitted under Mexican law to hold the amount or type of Restricted Shares to
which such electing shareholder would be entitled upon the exercise of its
rights under this paragraph (c), then the electing shareholder shall have the
right to designate another purchaser who would be qualified under Mexican law to
purchase such Restricted Shares or, at the election of the electing shareholder,
the Company shall agree (to the extent permitted under Mexican law) to exchange
such Restricted Shares to be purchased by the electing shareholder (pursuant to
the exercise of its rights under this paragraph (c)) for other securities of the
Company which have identical rights as such Restricted Shares being transferred
except that, in order to comply with applicable law, the voting rights of such
securities may be limited to the minimum level necessary to effect such
compliance.
Notwithstanding anything contained herein (including the definition of Investor)
to the contrary, this paragraph (c) shall apply to any Transfer by any Aguirre
Group Investor and CT Global Telecommunications of any Restricted Shares.
The right of first refusal set forth in this paragraph (c) shall terminate upon
the earlier to occur of (i) a Sale of the Company (as defined in Article
Fifty-Three), (ii) the sale of all or substantially all of the consolidated
assets of the Company to an Independent Third Party or (iii) the effectiveness
of the Regulatory Amendments and the modifications to the Company's capital
structure described in Article Twenty-Nine.
d) Right of First Offer on Transfers by Investors. In the event that any
Investor desires to Transfer any Series A-1, B-1 or N-1 shares (other than
pursuant to a Transfer to a Permitted Transferee, a Public Offering or any Sale
of the Company), such Investor shall first offer to sell such Company Securities
by delivering written notice thereof (the "Investor Transfer Notice") to the
Secretary of the Board (who shall promptly (but in any event within 3 business
days) deliver a copy thereof to each Investor (other than the transferring
Investor) holding a Pro Rata Share (as defined in Article Fifty-Three) equal to
or greater than one percent (1%) of the Series A-1 shares,
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Series B-1 shares and Series N-1 shares then outstanding on an aggregate basis
(a "Qualified Investor") disclosing the type and number of Preferred Shares
sought to be transferred, the proposed price of the Transfer and the other
material economic terms of the proposed Transfer. The Qualified Investors may
elect to purchase all (but not less than all) of such Preferred Shares to be
transferred on a Pro Rata Basis and at the same price specified in the Investor
Transfer Notice by giving written notice to such transferring Investor within 30
(thirty) days after the Investor Transfer Notice has been given to the Secretary
of the Board. If the Qualified Investors elect to purchase all such Preferred
Shares hereunder, the Transfer of such Preferred Shares shall be consummated as
soon as possible after the delivery of the election notice(s) to the
transferring Investor, but in no event later than 15 (fifteen) days after the
expiration of such 30-day period. If such Qualified Investors do not elect to
purchase all of the Preferred Shares specified in the Investor Transfer Notice,
the remaining Preferred Shares shall be reoffered on a Pro Rata Basis to those
Qualified Investors electing to purchase offered Preferred Shares by delivering
an additional written notice. If within 10 (ten) days of the delivery of such
additional notice the other electing Qualified Investors have not elected to
purchase all of the Preferred Shares specified in the Investor Transfer Notice,
the transferring Investor may, for a period (the "ROFO Free Transfer Period") of
180 (one hundred eighty) days after the expiration of such period, Transfer the
Preferred Shares specified in the Investor Transfer Notice to one or more
parties at a price and on other material economic terms no more favorable to the
transferees thereof than the price per share and other material economic terms
offered to the Qualified Investors in the Investor Transfer Notice. Any such
Preferred Shares specified in the Investor Transfer Notice that are not
transferred within such 180-day period shall remain subject to the provisions of
this paragraph (d). Notwithstanding the foregoing, a transferring Investor shall
have the right to deliver one or more subsequent Investor Transfer Notices if no
Transfer has occurred in accordance with the terms hereof after the expiration
of any such 180-day period. The right of first offer set forth in this paragraph
(d) shall terminate upon the earlier to occur of (i) a Transfer of Series "A-1",
"B-1" or "N-1" shares pursuant to a Sale of the Company (as defined in Article
Fifty-Three), (ii) a sale of all or substantially all of the consolidated assets
of the Company to an Independent Third Party and (iii) a Qualified Public
Offering.
e) Participation (Tag-Along) Rights in Transfers.
(i) In connection with any Transfer (other than a Transfer to a
Permitted Transferee or pursuant to a Public Offering) of any
Company Securities (other than Series "N-2" shares (and any
shares issued upon conversion thereof)) by any shareholder
(the "Transferring Shareholder"), such shareholder shall
deliver to the Secretary of the Board a notice (the "Tag-Along
Right Notice"), and the Secretary of the Board shall then
promptly (but in any event within 5 (five) days or, to the
extent necessary to comply with requirements of applicable
law, such longer period as reasonably determined by the Board
(including the approval of at least one Nexus Director))
deliver to the other shareholders (other than the holders of
Series "N-2" shares (and any shares issued upon conversion
thereof) with respect to their Series "N-2" shares (and any
shares issued upon conversion thereof) unless such Transfer
(1) includes any Series "A-1", "B-1" or "N-1" shares and (2)
constitutes a Sale of the Company), such Tag-Along Right
Notice (which notice may be given simultaneously with any
notice required to be delivered pursuant to paragraph (c) or
(d) above), disclosing the number of Company Securities to be
Transferred, the
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proposed price, terms and conditions of the Transfer
(including, without limitation, a description of any expense,
escrow, holdback, earn out, indemnity or similar obligations
that the participating shareholders shall be responsible for),
the identity of the prospective transferee(s) and whether such
shareholder's participation right (with respect to the
absolute number of shares) is subject to adjustment as a
result of paragraphs (c) and (d) (i.e., the participation
rights shall only apply to the Company Securities that the
Transferring Shareholder is entitled to Transfer after first
complying with the requirements of paragraphs (c) or (d), as
applicable). Notwithstanding anything contained herein to the
contrary, the provisions of this paragraph (e) shall not apply
to one or more Transfers by an Investor of no more than
7,000,000 Preferred Shares (as adjusted for stock splits,
stock dividends and similar events) to any single person or
entity or group of related persons or entities in a single
Transfer or series of related Transfers.
(ii) The securityholders of the Company holding Company Securities
(other than the holders of Series "N-2" shares (and any shares
issued upon conversion thereof), unless such Transfer includes
any Preferred Shares and any Series "A-1", "B-1" or "N-1"
shares and constitutes a Sale of the Company, in which case
the holders of Series "N-2" shares (and any shares issued upon
conversion thereof) also shall be entitled to participate) may
elect to participate on a Pro Rata Basis in the contemplated
Transfer described in the Tag-Along Right Notice by giving
written notice to the Transferring Shareholder within the
longer of (i) 20 days after delivery of the Tag-Along Right
Notice to the Company, (ii) 3 business days after the
beginning of the RFR Free Transfer Period or ROFO Free
Transfer Period, if applicable, or (iii) in the case only of a
Transfer of Series "A-1", "B-1" or "N-1" shares in connection
with a Sale of the Company, such longer period as reasonably
determined by the Board (including the approval of at least
one Nexus Director) to permit the preparation and distribution
of materials to the record and beneficial owners of Series
"N-2" shares (and any shares issued upon conversion thereof
represented by trust certificates of participation) and as may
then be required by applicable law (the "Tag-Along Window").
Each such shareholder may participate in the contemplated
Transfer on a Pro Rata Basis, at the same price and (subject
to subparagraph (iv) below, on the same terms specified in the
Tag-Along Right Notice. The failure to deliver notice electing
to participate within the Tag-Along Window shall be deemed an
automatic and complete waiver of all rights to participate in
such Transfer pursuant to this paragraph (e). If no
shareholder elects to participate in the contemplated Transfer
(through notice to such effect or the expiration of the
Tag-Along Window without the delivery of any such notice),
then the Transferring Shareholder may Transfer such Company
Securities, to the party or parties specified in the Tag-Along
Right Notice at a price and on the terms substantially as
described in the Tag-Along Right Notice, for a period equal to
(1) the remaining RFR Free Transfer Period, if applicable, (2)
the remaining ROFO Free Transfer Period, if applicable, or (3)
if the Company Securities were not subject to paragraphs (c)
or (d) above, for 120 days after the expiration of the
Tag-Along Window, with an automatic 60-day extension thereto
to the extent that regulatory approvals for a Transfer have
not been obtained within such original 120-day period. No
Transferring Shareholder
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shall Transfer any of its Company Securities to any
prospective transferee if such prospective transferee(s)
decline to allow the participation of the other shareholders
on the terms provided in this paragraph (e), subject to the
exclusion set forth in subparagraph (iv) below. If the
Transferring Shareholder fails to Transfer such Company Shares
described in the Tag-Along Notice within such applicable
period, the Transferring Shareholder shall not Transfer such
Company Shares without again complying with the provisions of
this paragraph (e).
(iii) The rights of securityholders to participate as set forth in
this paragraph (e) are subject to the satisfaction of the
following conditions: (A) each participating shareholder will
only be required to make affirmative representations and
warranties as to (1) due power and authority to enter into the
agreement and transactions contemplated thereby, (2)
non-contravention of any agreement to which it is a party or
by which it is bound, and (3) good and valid title to the
equity securities to be transferred (or, in the case of
beneficial ownership of the Company's capital stock through a
trust, good and valid title to the certificates of
participation in such trust), free and clear of any and all
liens, claims, pledges, options and restrictions of any kind
whatsoever (other than as contemplated hereby and by the
Securityholders Agreement) and (B) the participating
securityholders shall be severally obligated to share, on a
Pro Rata Basis (based on such holder's share of the aggregate
proceeds paid with respect the Company Securities sold in such
transaction), any expense, escrow, holdback, earn out,
indemnity or similar obligation that the Transferring
Shareholder has agreed to in connection with such Transfer
(but, with respect to each participating securityholder, not
in excess of the consideration such securityholder is entitled
to receive in connection with their participation in the
transaction), and with respect to any contingent post-closing
indemnity or other obligations, any proceeds a securityholder
is entitled to receive in connection with their participation
pursuant to this paragraph (e) in a Transfer shall be subject
to a holdback obligation unless such securityholder provides
such purchaser with assurances and/or collateral, in form and
substance satisfactory to such purchaser, as such purchaser
may require, provided that any assurances or collateral
provided by the Transferring Shareholder and/or the other
participating shareholders may differ from shareholder to
shareholder (it being understood and permitted, for example,
that certain shareholders (including, without limitation, the
BAIIC Investors (as defined in Article Fifty-Three)) may only
be required to sign an agreement or indemnity without any
holdback obligations). If the purchaser of the securities
requires the Transferring Shareholder and the other
participating shareholders to execute any ancillary purchase
or other agreements, each participating shareholder (other
than with respect to any Series "N-2" shares (and any shares
issued upon conversion thereof)) shall be required to execute
such agreements, subject to the requirements set forth in the
preceding sentence and provided that in no event shall any
shareholder be required to execute a non-competition or
non-solicitation agreement.
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English Translation
(iv) To the extent that a securityholder holds Company Shares
subject to restrictions on ownership pursuant to these Bylaws
or applicable Mexican law (for example securities that,
pursuant to these Bylaws, must be owned by a Mexican), such
securityholder will only be eligible to participate in a
Transfer pursuant to this paragraph (e) to purchasers who are
eligible to own such class and series of shares.
(v) If the drag-along rights pursuant to paragraph (f) of Article
Nine apply and are exercised by Nexus, then the participation
rights in this paragraph (e) shall only apply to the extent
that (1) the number of Company Shares that a holder is
entitled to Transfer pursuant to the participation rights in
set forth in this paragraph (e) is greater than (2) the number
of Company Shares such holder is actually obligated to
Transfer pursuant to the exercise of the drag-along right in
paragraph (f) of Article Nine. In connection with any
Transfer, each securityholder's participation right therein
(with respect to the absolute number of shares) is subject to
adjustment as a result of paragraphs (c) and (d) of this
Article Seven (i.e., the participation rights shall only apply
to the Company Securities that the Transferring Shareholder is
entitled to transfer after first complying with the
requirements of paragraphs (c) or (d)). The tag-along right
set forth in this paragraph (e) shall terminate upon the
earlier to occur of (i) a Transfer of "A-1", "B-1" or "N-1"
shares in connection with Sale of the Company, (ii) a sale of
all or substantially all of the consolidated assets of the
Company to an Independent Third Party and (iii) the
consummation of a Qualified Public Offering.
f) Drag Along Rights.
(i) If Nexus desires to consummate a Qualifying Sale of the
Company on terms and conditions approved by Nexus (an
"Approved Sale"), at the request of Nexus, each Company
securityholder shall (and shall cause any director on the
Board designated by such securityholder to) vote in favor of,
consent to and raise no objections against such Approved Sale.
If the Approved Sale is structured as (A) a merger or
consolidation of the Company, then each securityholder shall
waive any dissenters rights, appraisal rights or similar
rights in connection with such merger or consolidation or (B)
as a sale of Company Securities, then each securityholder
shall agree to sell all (or, in the case of an Approved Sale
of less than all of the Company Securities, his, her or its
Pro Rata Share) of his, her or its Company Securities and
rights to acquire Company Securities. Each securityholder
shall take all necessary or desirable actions in connection
with the consummation of the Approved Sale as requested by the
Board or Nexus provided that such securityholder's obligation
to take any such requested actions (other than as described in
the first two sentences of this clause (i) of this paragraph
(f)) with respect to any Series N-2 Shares shall be limited to
the those actions set forth below in clause (iii) of this
paragraph (f). Each beneficial owner of Company Securities
shall use its best efforts to cause the voting power of its
Company Securities to be voted for (or to consent to) an
Approved Sale.
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English Translation
(ii) The obligations of the securityholders with respect to the
Approved Sale are subject to the satisfaction of the following
conditions: (A) each securityholder shall receive, in exchange
for the Company Securities held by it, its Pro Rata Share of
the aggregate consideration payable to the holders of Company
Securities in such Approved Sale and (B) with respect to the
Series "N-2" shares, the consideration for the Company
Securities is paid in cash and/or securities which are (1)
registered under applicable securities law or not required to
be so registered in order to be transferable without
restriction and (2) either listed or quoted on a national
securities exchange or quoted on a national automated
inter-dealer quotation system) and (C) with respect to the
Series "N-2" shares, the per share value of such
consideration, as determined in good faith by the Board, is
not less than the then applicable Liquidation Preference
Amount for the Series "N-2" shares.
(iii) In connection with an Approved Sale, (A) each participating
securityholder will be required to only make affirmative
representations and warranties as to (1) due power and
authority to enter into the agreement and transactions
contemplated thereby, (2) non-contravention of any agreement
to which it is a party or by which it is bound, and (3) good
and valid title to the Company Securities to be Transferred,
free and clear of any and all liens, claims, pledges, options
and restrictions of any kind whatsoever (other than as set
forth herein) and (B) the securityholders shall be severally
obligated to share, on a Pro Rata Basis (based on such
holder's share of the aggregate proceeds paid with respect to
the Company Securities in such Approved Sale) in any expense,
escrow, holdback, earn out, indemnity or similar obligation
that Nexus or the Company has agreed to in connection with
such Approved Sale (but, with respect to each participating
securityholder, not in excess of the consideration such
securityholder is entitled to receive in connection with its
participation in the Approved Sale), and with respect to any
contingent post-closing indemnity or other obligations, any
proceeds a securityholder is entitled to receive in connection
with the Approved Sale shall be subject to a holdback
obligation unless such securityholder provides such purchaser
with assurances and/or collateral, in form and substance
satisfactory to such purchaser, as such purchaser may require,
provided that any assurances or collateral provided by Nexus
and/or the other participating securityholders may differ from
securityholder to securityholder (it being understood and
permitted, e.g., that certain securityholders (including,
without limitation, the BAIIC Investors) may only be required
to sign an agreement or indemnity without any holdback
obligations). If the purchaser of the securities requires
Nexus and the other participating securityholders to execute
any ancillary purchase or other agreements, each participating
securityholder (other than with respect to any Series "N-2"
Shares (and any shares issued upon conversion thereof)) shall
be required to execute such agreements, subject to the
requirements set forth in the preceding sentence and provided
that in no event shall any securityholder be required to
execute a non-competition or non-solicitation agreement.
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(iv) To the extent that a securityholder holds Company Securities
subject to restrictions on ownership pursuant to these Bylaws
or applicable Mexican law (for example securities that,
pursuant to these Bylaws, must be owned by a Mexican), it will
only be obligated to participate in a Transfer to purchasers
who are eligible to own such class and series of shares,
provided that in connection with an Approved Sale, the
purchaser shall have the right to assign its right to purchase
such shares to a different purchaser (for the same
consideration and on the same terms and conditions (other than
as to restrictions on ownership) as the other Company
Securities being sold in the Approved Sale) who is eligible to
own such class and series of shares.
(v) If the drag-along rights pursuant to this paragraph (f) apply
and are exercised by Nexus, then the participation rights in
paragraph (e) of Article Nine shall only apply to the extent
that (1) the number of Company Shares that a holder is
entitled to Transfer pursuant to the participation rights in
set forth in paragraph (e) of Article Nine is greater than (2)
the number of Company Shares such holder is actually obligated
to Transfer pursuant to the exercise of the drag-along right
in this paragraph (f). The drag-along right set forth in this
paragraph (f) shall terminate upon the earlier to occur of (i)
a Transfer of Series "A-1", "B-1" or "N-1" shares pursuant to
a Sale of the Company, (ii) a sale of all or substantially all
of the consolidated assets of the Company to an Independent
Third Party and (iii) the consummation of a Qualified Public
Offering.
g) Preference Upon Sale of the Company. In the event of a sale or exchange by
the shareholders of all or substantially all of the Company Securities and other
equity securities of the Company (whether by sale, merger, recapitalization,
reorganization, consolidation, combination or otherwise and whether or not
pursuant to this Article Nine), each shareholder shall receive in exchange for
the Company Securities and other equity securities of the Company held by such
shareholder the same portion of the aggregate consideration from such sale or
exchange that such shareholder would have received if such aggregate
consideration had been distributed by the Company in complete liquidation
pursuant to the rights and preferences set forth herein as in effect immediately
prior to such sale or exchange, and each agreement or other document effecting
or evidencing such sale or exchange shall reflect such preference and shall
require the disbursement of proceeds in accordance herewith. Each shareholder
shall take (or use its best efforts to cause to be taken) all necessary or
desirable actions in connection with the distribution of the aggregate
consideration from such sale or exchange as requested by Nexus or the Company.
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English Translation
h) Agreement Regarding Indirect Transfers. Notwithstanding the foregoing, no
shareholder shall avoid the provisions of these Bylaws by first making a
Transfer to a Permitted Transferee and then disposing of or transferring all or
any portion of such shareholder's interest in any such Permitted Transferee or
by entering into any other transaction intended to avoid or otherwise circumvent
the provisions of this Article Nine. In addition, the provisions of this
paragraph (h) of Article Nine shall apply to the Transfer of any beneficial
interests, equity interests or other ownership interests in (1) any trust
(including any permitted transferee and successor thereof) that holds any
Company Securities, assuming for purposes of this paragraph (h) that references
to the "Company" herein are references to such trust (including any permitted
transferee and successor thereof) and that references to a "securityholder" are
references to the beneficiaries thereof, (2) to Nexus-Maxcom Holdings I, LLC so
long as it holds any Company Securities, assuming for purposes of this paragraph
(h) that references to the "Company" herein are references to Nexus-Maxcom
Holdings I, LLC (including any permitted transferee and successor thereof) and
that references to a "securityholder" are references to the members thereof and
(3) to BASCFC-Maxcom Holdings I, LLC, so long as it holds any Company
Securities, assuming for purposes of this paragraph (h) that references to the
"Company" herein are references to Nexus-Maxcom Holdings I, LLC (including any
permitted transferee and successor thereof) and that references to a
"securityholder" are references to the members thereof.
i) Permitted Transferees. Notwithstanding anything to the contrary contained
herein, the restrictions set forth in this Article Nine shall not apply to any
Transfer of any Company Securities (i) directly or indirectly by BASCFC with
respect only to any Preferred Shares acquired by it pursuant to the New Investor
Subscription Agreement, (ii) in the case of an individual shareholder, pursuant
to applicable laws of descent or (other than in the case of Adrian Aguirre G.
until the effectiveness of a Regulatory Amendment and the modifications to the
Company's capital structure described in Article Twenty-Nine) among such
shareholder's Family Group (as defined in Article Fifty-Three) or , (iii) among
the shareholders and/or their Qualified Affiliates (as defined below) (provided
that such Qualified Affiliate(s) shall reconvey any such shares to the
transferring shareholder(s) (or otherwise comply with the requirements and
obligations set forth in this Article Nine) at such time as the Qualified
Affiliate ceases to be a Qualified Affiliate), (iv) or among or between the
Bachow Investors and/or the BAIIC Investors or (v) as of July 1, 2003, among or
between Morgan Stanley Asset Management and any MSAM Managed Account (the
persons and entities specified in clauses (i), (ii) and ,(iii), (iv) and (v) are
collectively referred to herein as "Permitted Transferees"); provided that with
respect to any Transfer of Company Securities to a Permitted Transferee, the
restrictions contained in this Article Nine shall continue to be applicable to
any such Company Securities after any such Transfer to a Permitted Transferee.
j) Public Offering Provision. Nexus may, at any time and from time to time,
request that the Company take all requisite actions at the Company's expense to
register one or more series of the Company Shares under (A) applicable Mexican
securities laws, rules and regulations and/or (B) applicable United States
federal and state securities laws and, in either such event, the Company shall
be obligated to become (to the extent it is not already a public company under
such laws), and each shareholder shall cooperate to cause the Company to become,
a public company under such laws, provided, that the first demand for
registration by Nexus shall be a Public Offering that is expected to yield
aggregate net proceeds of at least U.S. $10.0 million (ten million U.S.
dollars).
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English Translation
(i) At any time and from time to time, at the request of Nexus,
the Company shall take all requisite actions at the Company's
expense to permit the Investors to sell, as promptly as
practicable, the Company Securities (subject to the conversion
of any Series "N-2" shares held by the Investors (or, if
applicable, the conversion of any securities which such Series
"N-2" shares may be converted into) into the class and
security of stock being registered) held by them pursuant to a
registered public offering and to enable such holders to
freely Transfer their securities in the appropriate market as
registered securities under applicable securities law, as soon
as possible after such request. In connection with any
underwritten offering of Company Securities, Nexus shall be
entitled to select the underwriter.
(ii) Within 10 (ten) business days after the Company's receipt of a
registration request from Nexus, the Company shall give
written notice of such requested registration to each of the
other Investors and, subject to the terms hereof, shall
include, subject to any underwriter cut-backs, in such
registration such number of Company Shares held by Investors
that the Company receives written requests for inclusion of
within 15 (fifteen) business days after the receipt of the
Company's notice of such registration. In connection with any
registration of Company Securities, the Investors shall be
entitled to participate on a Pro Rata Basis among Investors,
including for purposes of this paragraph, the Aguirre Group
Investors only with respect to their Series "A-1" shares
(subject to the conversion of such Series "A-1" shares into
the class and security of stock being registered), and any
Series "N-2" shares (subject to the conversion of such Series
"N-2" shares (or, if applicable, the conversion of any
securities which such Series "N-2" shares may be converted
into) into the class and security of stock being registered) ,
subject in each case to any cut-backs required by the
underwriters in any underwritten offering.
(iii) In addition, in connection with any secondary offering of the
Company Securities, the Investors will be entitled to
participate in such secondary offering prior to any other
holder of Company Securities.
(iv) Nexus shall have the right to demand that the Company
Securities (at the Company's expense) be registered at the
National Registry of Securities and Intermediaries of the
National Banking and Securities Commission of Mexico. In
connection with any registration and public offering of
Company Securities, the Company and the holders of Series "A"
shares, Series "A-1" shares and Series "B" shares, shall use
their reasonable best efforts to cause the Company to effect
the registration of the Company Securities and shall take all
such actions to enable the Investors to sell their securities
in a public sale, or otherwise freely Transfer their
securities without restrictions (other than any such
restrictions required by the underwriters of all holders of
Company Securities participating in such offering), in
accordance with the Mexican securities laws and/or, to the
extent applicable, United States federal and state securities
laws. The Company for this purpose shall assist each Investor
in connection with such public sale and shall furnish all
information which such Investor or the managing underwriters
deem necessary or desirable to be disclosed in any prospectus
to be distributed in connection with a
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public sale. If a primary or secondary offering is an
underwritten offering and if the Board reasonably determines,
based upon the written advice of the managing underwriters,
that the number of securities requested to be included in such
offering exceeds the number of such securities which can be
sold therein without adversely affecting the marketability of
the offering, the Company will include in such registration
(1) first, the number and type of securities requested by the
Investors to be included which in the opinion of such
underwriters can be sold without adverse effect pro rata among
the Investors on the basis of the number of securities held by
each such Investor and (ii) second, other shares requested to
be included, pro rata among the holders of such shares on the
basis of the number of Company Securities held by each such
shareholder.
(v) If so requested by the underwriters managing any such
offering, no holder of Company Securities shall, directly or
indirectly, Transfer or offer or agree to Transfer (other than
to Affiliates and/or equityholders of such holders who agree
to be similarly bound) any such securities during the 30
(thirty) days prior to and the 180-day period beginning on the
expected effective date of any registered Public Offering
(other than with respect to any securities actually being sold
in such Public Offering); provided, however, that following a
Qualified Public Offering the lock-up period for any
subsequent Public Offering shall be the thirty days prior to
and the 90-day period beginning on the expected effective date
of any registered Public Offering. Notwithstanding the
foregoing, the holders of Series "N-2" shares (and any shares
issued upon conversion thereof) shall only be required to
comply with such a lock-up period (A) in connection with the
first Qualified Public Offering, (B) so long as any Company
Securities held by any securityholders (directly or
indirectly) included in such Qualified Public Offering
represent 20% (twenty percent) or less of the total number of
Company Securities registered in such offering, (C) if each
holder of Company Securities (except to the extent such holder
is participating in such Qualified Public Offering as
permitted by clause (B) above) is also subject to a lock-up
obligation, the terms of which are no less restrictive than
the terms of the lock-up obligation imposed on the holders of
Series "N-2" shares (and any shares issued upon conversion
thereof) and (D) during the 30 (thirty) days prior to the
expected effective date of the first Qualified Public Offering
(or such shorter period prior to the expected effective date
from when the Company delivers notice to the record holder of
such lock-up period), if notice of such lock-up may be given
to the holders of Series "N-2" shares (or any shares issued
upon conversion thereof) without violating applicable
securities law. In each case, the Company will notify all
record shareholders of the exact date of any lock-up period
that such shareholders are subject to.
(vi) At the request of Nexus at any time following a Qualified
Public Offering, the Company shall use its best efforts to
file with the Securities and Exchange Commission a shelf
registration statement pursuant to Rule 415 promulgated under
the Securities Act.
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English Translation
(vii) Following a Qualified Public Offering, upon the reasonable
request of any shareholder, the Company shall, at its expense,
provide to such shareholder such reasonable number of copies
of the registration statement and prospectus relating to the
registered equity securities of the Company.
(viii) The Company will provide reasonable and customary
indemnification to each participating securityholder
(including such participant's directors, officers and
employees) in a registered Public Offering, for losses caused
by any material misstatement or omission in any registration
statement or prospectus provided by the Company to such
participating securityholder for use in connection with a
resale of Company Securities, except insofar as such losses
are caused by a material misstatement or omission based upon
information relating to information furnished to the Company
by any of the participating securityholders. As a condition to
participating in any registered Public Offering, each
participating securityholder will provide reasonable and
customary indemnification to the Company and its directors,
officers, and affiliates but only with reference to
information relating to such participating securityholder
furnished to the Company by or on behalf of such participant
expressly for use in any registration statement or prospectus.
(ix) Only after a Public Offering, at the request of any holder of
Series "N-2" shares (including any shares issued upon
conversion thereof), the Company will, at the Company's
expense, use its commercially reasonable efforts, subject to
compliance with applicable Mexican, U.S. and state securities
laws and the rules and regulations of any applicable
securities exchanges (and, if applicable, the NASDAQ), to
cause (A) the Conversion Stock (or certificates of
participation representing the beneficial ownership of such
Conversion Stock) to be listed on each securities exchange on
which similar securities (including, for purposes of this
clause (ix), certificates of participation representing the
beneficial ownership similar securities) issued by the Company
are then listed or, if such similar securities are listed on
the NASD automated quotation system, to be listed on the NASD
automated quotation system and (B) to cause such Conversion
Stock (or certificates of participation representing the
beneficial ownership of such Conversion Stock) to be
registered at the National Registry of Securities and
Intermediaries of the National Banking and Securities
Commission of Mexico.
(x) During the period between the consummation of the Company's
initial Public Offering and the earlier to occur of (i) the
eighteen month anniversary of such initial Public Offering and
(ii) the consummation of a Qualified Public Offering, the
Company, at the requesting securityholder's or
securityholders' expense, shall cooperate with any effort by
one or more holders of N-2 Stock (as defined below) to effect
an underwritten offering of such securities (an "N-2
Offering"); provided that (A) the projected aggregate net
proceeds to the participating holders of such N-2 Stock shall
be at least U.S. $5 million (five million U.S. dollars), (B)
the Company approves the selection of the underwriter for such
proposed or completed N-2 Offering, which approval shall not
be unreasonably withheld, (C) the Company shall not be
obligated to cooperate with more than one such N-2
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English Translation
Offering, regardless of whether such N-2 Offering is
completed, (D) the Company shall not be obligated to prepare
any offering memorandum or registration statement in
connection therewith (but will cooperate in the preparation of
an offering memorandum prepared by such underwriter), (E) the
Company shall not be obligated in connection with an N-2
Offering to register any N-2 Stock and (F) if the Company is
in the process of preparing for a Qualified Public Offering,
the requesting shareholders of the N-2 Offering shall delay
such N-2 Offering for six months from the date of completion
of the Qualified Public Offering. For purposes of this
paragraph (x), "N-2 Stock" means the Series "N-2" shares (and
any shares issued upon conversion thereof) (or, for purposes
of this paragraph (x), (1) any instruments representing
beneficial interest in Series "N-2" shares (or any shares
issued upon conversion thereof), such as trust certificates of
participation, or (2) shares of Conversion Stock issued upon
the conversion of Series "N-2" shares. As a condition to the
Company's cooperation with such offering, (1) the underwriter
of such offering shall provide the Company in writing with
reasonable details of its calculation of the projected
aggregate net proceeds to the participating holders and (2)
all holders of N-2 Stock shall (at no expense to the Company)
be given the right to participate on a Pro Rata Basis in the
N-2 Offering.
(xi) Any attempted Transfer of Company Securities in violation of
the lock-up provisions set forth in paragraph (v) of this
Article Nine shall be null and void ab initio and shall not be
consented to or recognized or registered by the Company for
any purpose.
ARTICLE TEN.
The subject-matters described as follows shall be considered as "Key Matters",
requiring therefore special voting for the approval thereof as set forth in
Article Eleven:
a) the incurrence or assumption by the Company and/or any of its subsidiaries
of any indebtedness (including capitalized lease obligations) or other
liabilities (other than trade payables incurred in the ordinary course of
business which are not past due), and the mortgaging, pledging or incurring of a
lien, encumbrance or other restriction on any of the assets or properties of the
Company and/or any of its subsidiaries exceeding U.S.$10,000,000 (ten million
U.S. dollars) in the aggregate at any time then outstanding or the amendment of
any loan agreement, credit agreement, debenture or related document in
connection with any indebtedness (including capitalized leases) approved
pursuant to this Article;
b) the issuance of any Equity Securities of the Company or any of its
subsidiaries other than (i) as specifically contemplated by the New Investor
Subscription Agreement and (ii) any Equity Securities of existing stock options
and management incentive plans of the Company shown on the Company's records (as
of the date of the approval of these Bylaws by the shareholders of the Company)
as reserved for future issuance pursuant to existing stock options and existing
management incentive plans;
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English Translation
c) the sale, Transfer, exchange or other disposal of all or a significant
portion of the assets or Equity Securities of the Company or any of its
subsidiaries (including, but not limited to, any Company Shares held by the
Company as treasury shares) by the Company or any of its subsidiaries in any
form of transaction, or (ii) the merger, consolidation, spin-off,
recapitalization, reorganization (including a change in the legal nature of the
Company or any of its subsidiaries), dissolution or liquidation of the Company
or any of its subsidiaries;
d) any assignment by the Company or any of its subsidiaries for the benefit of
creditors or (ii) the voluntary commencement of any proceeding relating to the
Company or any of its subsidiaries under any bankruptcy, reorganization,
insolvency, suspension of payments, dissolution or liquidation law of any
jurisdiction;
e) the establishment by the Company or any of its subsidiaries of any
subsidiary or the making by the Company or any of its subsidiaries of any loans
or advances to, guarantees for the benefit of, or investments in, any person or
entity other than a wholly-owned subsidiary (other than advance payments made to
suppliers in the ordinary course of business up to an aggregate of U.S.
$2,000,000 (two million U.S. dollars) outstanding at any time);
f) the declaration, setting aside or payment of any dividends on, or making
any other distributions in respect of, any of its capital stock, other than
dividends and distributions by a direct or indirect wholly-owned subsidiary of
the Company to its parent;
g) the purchase, redemption or other acquisition of any Equity Securities of
the Company or any of its subsidiaries or reduction in capital of any Company
Securities or any securities of the Company's subsidiaries;
h) the entering into by the Company or any of its subsidiaries of (or
amendment of the material terms of) any transaction or series of related
transactions with any of the Company's officers, directors, employees,
bondholders, shareholders, or any of their respective Affiliates or any
individual related by blood or marriage to any such person or entity or any
person or entity in which any such person or entity owns a beneficial interest
or any Affiliate of any of the foregoing (collectively, "Restricted Persons"),
other than any such transaction or series of related transactions involving U.S.
$1,000,000 (one million U.S. dollars) or less in the aggregate over the term of
such transaction(s), and other than any customary banking relationships, in each
case entered into in the ordinary course of business on an arm's length basis
and on terms no less favorable than those available from a third party (in each
case as determined by a Nexus Director);
i) the election, appointment or removal of any of the following key executives
of the Company or any of its subsidiaries: the Chief Executive Officer, the
General Managers of any business units, the Chief Operating Officer, the Chief
Financial Officer, the Director of Marketing and the Chief Engineer (or any
other individual with a similar or more senior title or position), and the
approval of salary, compensation and benefit or other similar plans for such key
executives;
j) the approval of the Company's and its subsidiaries' annual business plan
and annual budget for each fiscal year, (as so approved, including any
amendments or modifications thereto permitted by these Bylaws, the "Approved
Plan"); the approval of any amendment to,
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English Translation
modification of or expenditures in excess of such Approved Plan; and the
approval of the entering into any material transaction outside of the ordinary
course of business and not contemplated in the Approved Plan; provided that if
the annual business plan and budget are not approved by the Board in accordance
herewith then the Approved Plan shall be the annual business plan and budget for
the immediately preceding year;
k) the entering into by the Company or any of its subsidiaries of any new line
of business (other than the main corporate purpose of the Company pursuant to
Article Two hereof);
l) the entering into or amendment of any agreement which would (under any
circumstances) restrict the Company's or any of its subsidiaries' right or
ability to perform the provisions of these Bylaws or any agreements or
instruments to which it is a party together with its shareholders or to conduct
its business as currently conducted or as proposed to be conducted at any time;
m) the manner in which the shares or other interests of any subsidiary or
entity owned by the Company shall be voted at shareholders' or equivalent
meetings of any such subsidiary or entity with respect to any matter of the type
covered by this Article Ten;
n) any amendments, modifications, waivers or changes to or terminations of (A)
any of the concessions/licenses granted by the Mexican authorities to conduct
the main business of the Company, (B) these Bylaws, (C) any of the following, in
each case as in effect on the date hereof, (i) any employment, consulting,
confidentiality or non-competition agreement between the Company (or any of its
subsidiaries) and any officer or key employee of the Company (or any of its
subsidiaries), (ii) the New Investor Subscription Agreement, (iii) the
Securityholders Agreement (including, without limitation, the Company Guidelines
attached thereto as Exhibit B), (iv) the Security Trust Agreement, or (v)the
Investment Trust Agreement, (D) any other instruments or agreements to which the
Company is a party entered into as of or after the date hereof that were
submitted for approval pursuant to Article Eleven, or (E) any other agreements
to which the Company is a party entered into after the date of approval of these
Bylaws by the shareholders, the amendment of which would require approval under
Article Eleven if such agreement was in effect on the date hereof;
o) the subdivision or combination in any way of the outstanding shares of one
class or series of shares of the Company or any of its subsidiaries, unless the
outstanding shares of the other class or series of shares of the Company or its
subsidiary, as applicable, shall also be proportionately subdivided or combined
in a similar manner;
p) except as provided in paragraph (j) of Article Nine, the granting to any
person or entity the right to request the Company to register any Company
Securities; provided that the Company may grant rights to other Persons to
participate in piggyback registrations so long as such rights are subordinate to
the rights of Investors set forth herein; and
q) any commitment or agreement to do any of the foregoing.
ARTICLE ELEVEN.
The approval of each of the Key Matters listed in Article Ten shall be submitted
to the Board for authorization and shall require the approval of both (i) Nexus,
solely in its capacity as a
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English Translation
shareholder (and without any fiduciary duty to the Company or any of the
shareholders of the Company) and (ii) the Board; provided that the Board
approval shall require the affirmative vote of at least one Nexus Director (as
defined in Article Twenty-Three) (collectively, the "Required Approvals").
The Required Approvals pursuant to the first paragraph of this Article Eleven
are in addition to and shall in no way limit or otherwise affect the obligation
of the Company to also (i) submit to the Board for approval other matters which
are required by applicable law or these Bylaws to be submitted to the Board for
approval or (ii) obtain any other approvals which may be required by applicable
law or these Bylaws with respect to the Key Matters.
Notwithstanding the foregoing, the Company shall take (or cause to be taken) all
necessary actions so that any Key Matter which is submitted to the shareholders
for approval (in lieu of approval by the Board) shall require the approval of
Nexus.
THIRD CHAPTER
SHAREHOLDERS' MEETINGS
ARTICLE TWELVE.
Subject to Articles Ten and Eleven above, the General Shareholders' Meeting
called in accordance with the formalities set forth herein and the applicable
law, is the supreme authority of the Company and represents all the
shareholders, their decisions and resolutions validly adopted; the General
Shareholders' Meeting resolutions bind all the shareholders, including those
absent or the dissidents, subject to the rights granted by applicable law.
ARTICLE THIRTEEN.
All the shareholders' meetings shall be held at the headquarters of the Company
(or, if the headquarters of the Company is located outside of the corporate
domicile of the Company (as described in Article Three), at such location within
the corporate domicile of the Company as determined by the Board), at upon
proper notice given to the shareholders pursuant to Article Fourteen herein.
a) General Ordinary Shareholders' Meetings shall be held at least once a year
within the four months following after the closing of each fiscal year for
purposes of discussing (and approving, if applicable) the following agenda
items:
(i) Discussion, approval, or modification of the annual profit and
loss statements of the Company presented by the Board.
(ii) Designation of the members of the Board and their
compensation.
(iii) Designation of the Examiner (as defined in Article Thirty) and
his compensation.
(iv) Allocation and distribution of profits of the annual and
profit and loss statements approved pursuant to the
recommendations of the Board.
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English Translation
b) General Extraordinary Shareholders' Meetings may be called at any time upon
proper notice given to the shareholders pursuant to Article Fourteen of these
Bylaws.
c) General Extraordinary Shareholders' Meetings shall be those held for the
discussion and approval (if applicable) of the following matters (provided that
the holders of Series "N", "N-1" and "N-2" shares shall not be entitled to vote
on any matters other than with respect to those matters specifically
contemplated by paragraphs (i) and (j) of Article Six):
(i) Amendment to the term duration of the Company.
(ii) Dissolution or liquidation of the Company.
(iii) Increase or decrease of the minimum authorized capital stock.
(iv) Amendment to the business purposes of the Company and any
other amendment to these Bylaws.
(v) Merger or spin-off of the Company.
(vi) Issuance of preferred stock.
(vii) Issuance of bonds, liabilities or mortgage bonds.
(viii) Any of the other matters set forth in Article 182 of the
General Business Corporation Law.
d) Nexus Veto Right. Notwithstanding anything to the contrary in these Bylaws,
Nexus shall have an absolute veto right with respect to any Key Matters to be
voted at any shareholders' meeting, whether ordinary, extraordinary or special.
e) Series N-2 Observer Information Right. Subject to any restrictions imposed
by applicable law, the Company shall provide the Series N-2 Observer with copies
of any written materials distributed to the holders of Series "A", "A-1", "B" or
"B-1" shares (in their respective capacities as shareholders of the Company)
with respect to any shareholders' meeting simultaneously with such holders.
ARTICLE FOURTEEN.
a) General Ordinary and Extraordinary Shareholders' Meetings may each be
called by any member of the Board, its Chairman, Vice-chairman or Secretary, the
Examiner or Nexus, without prejudice of the rights granted to the Company
shareholders under applicable law to obtain the judicial publication of a call
for such meeting. Special Shareholders' Meetings may be called by any member of
the Board, its Chairman, Vice-chairman or Secretary, or the Examiner, without
prejudice of the rights granted to the Company shareholders under applicable law
to obtain the judicial publication of a call for such meeting. In addition,
Special Shareholders' Meetings of the holders of the Series "B-1" shares and
Special Shareholders' Meetings of holders of Series "N-1" shares may each be
called by Nexus.
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English Translation
b) Notices calling a General Ordinary, Extraordinary or Special Shareholders'
Meeting (each a "Meeting Notice") shall be published in (i) the Official Gazette
of the Federation or (ii) in the "Negocios" section of the "Reforma" or "El
Financiero" newspapers, not less than 15 (fifteen) calendar days prior to the
date of the meeting. The Meeting Notices shall state the date, time, place and
agenda of the meeting, and shall be signed by those who prepared it.
c) The shareholders may expressly waive the requirement of publishing a
Meeting Notice, provided that shareholders holding all of the Company's
outstanding shares of capital stock entitled to vote (regardless of class or
series) are present or represented at the meeting.
d) Shareholders' decisions may be approved by unanimous written consent in
lieu of a shareholders' meeting. In case of any action by written consent in
lieu of a shareholders' meeting, the deposit requirement set forth in Article
Fifteen below shall not apply.
e) Meeting Notices convening to a General Ordinary, Extraordinary or Special
Shareholders' Meeting pursuant to a second call (each a "Second Call Meeting")
due to the absence of quorum required pursuant to Articles Seventeen, Eighteen
and Nineteen, respectively, shall be published in accordance with paragraph (b)
of this Article Fourteen at least 10 (ten) calendar days prior to such Second
Call Meeting.
ARTICLE FIFTEEN.
a) Holders of voting shares (whether Common or Preferred) recorded in the
Company's shareholder registry book (or their duly appointed and authorized
representatives) shall be entitled to attend all shareholders' meetings. Upon
receipt of a Meeting Notice pursuant to Article Fourteen above, each shareholder
(or shareholder's representative) who will be present at the meeting shall
deposit his/her/its Company Shares with the Secretary of the Board, unless
otherwise indicated pursuant to the Meeting Notice, no later than 24 (twenty
four) hours prior to the date of the meeting; and such shareholder (or
shareholder's representative, if applicable) shall receive an admission card,
including the shareholder's name (or such shareholder's representative's name,
if applicable) and the number of votes to which he/she/it is entitled.
b) Notwithstanding the provisions in this Article Fifteen, shareholders who
are unable to participate in person at a shareholders' meeting (whether ordinary
or extraordinary) may participate and vote at such meeting by proxy or otherwise
as permitted by applicable law.
ARTICLE SIXTEEN.
a) Notwithstanding the provisions set forth in the foregoing Article, any
shareholder may deposit its shares in a bank or acknowledged commercial
institution, and such shareholder shall notify the Secretary of the Board in
writing, no later than 24 (twenty four) hours prior to the meeting, of the
number of shares deposited therein, the name of the shareholder and of the name
of the shareholder's representative duly authorized by such shareholder to
attend the shareholders' meeting and vote the deposited shares and shall enclose
the corresponding deposit certificate. Likewise, the shareholder's
representative attending the Shareholder's Meeting shall present to the
Secretary of the Board the corresponding general or special power of attorney or
the proxy letter signed by the shareholder.
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b) Any Company Shares deposited in trust with a bank or acknowledged
commercial institution for the purpose of waiving preemptive rights shall be
deemed to comply with the deposit requirements set forth in paragraph (a) of
this Article Sixteen, and the Company may rely upon the trustee of any such
trust with respect to the provision of the information required pursuant to
paragraph (a) of this Article Sixteen.
ARTICLE SEVENTEEN.
The General Ordinary Shareholders' Meeting may be held by virtue of first call
if the holders of at least a majority of the shares entitled to vote thereat are
present or represented. If no quorum exists for said meeting, the call shall be
repeated as necessary until at least a majority of the shares entitled to vote
thereat are present or represented thereat.
ARTICLE EIGHTEEN.
The General Extraordinary Shareholders' Meetings may be held by virtue of the
first call, if the holders of at least a majority of the shares entitled to vote
thereat are present or represented. If no quorum exists for said meeting, the
call shall be repeated as necessary so as at least a majority of the shares
entitled to vote thereat are present or represented thereat.
ARTICLE NINETEEN.
A meeting of the shareholders of a particular series or class of Company Shares
shall be considered a "Special Shareholders' Meeting". Special Shareholders'
Meetings shall be considered legally convened as a result of a first call,
whenever at least a majority of the shares representing the respective series of
shares are represented thereat. In the case of a second or subsequent call,
Special Shareholders' Meeting shall be considered legally convened if the
holders of at least a majority of the shares representing the respective series
of shares are present or represented thereat.
ARTICLE TWENTY.
Resolutions of the General Ordinary Shareholders' Meetings shall be adopted and
approved by the affirmative vote of the majority of shares present in the
meeting and entitled to vote thereat. Resolutions of the Special Shareholders'
Meetings shall be adopted and approved by the affirmative vote of the majority
of shares present in the meeting and entitled to vote thereon at such
shareholders' meeting, subject to the provisions of Articles Six, Ten and Eleven
hereof.
With respect to the General Extraordinary Shareholders' Meetings held by virtue
of first call, resolutions shall be adopted and approved by the affirmative vote
of the shares representing at least a majority of the shares entitled to vote
thereat. In the case of a second or subsequent call, resolutions shall be
adopted by the affirmative vote of the shares representing at least a majority
of the shares entitled to vote thereat, except that resolutions relating to Key
Matters shall be adopted and approved pursuant to Article Eleven of these
Bylaws.
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English Translation
ARTICLE TWENTY-ONE.
The Chairman of the Board shall be appointed at least by majority vote of the
Series "A" and Series "A-1" shares present at a shareholders' meeting and
entitled to vote thereat voting together as a single class of shares, and the
Vice-chairman of the Board shall be designated by Nexus.
The Chairman of the Board or absent the Chairman, the Vice-chairman, shall
conduct all the Shareholders' Meetings. In the event both the Chairman and the
Vice-chairman are absent, the meeting shall be conducted by the person
designated by the affirmative vote of a majority of the voting shares present or
represented thereat. The Secretary of the Board shall act as secretary of the
Shareholders' Meetings. In the event of absence of the Secretary of the Board
the secretary of the meeting shall be designated by the affirmative vote of a
majority of the voting shares present or represented thereat. The Chairman shall
appoint one or more tellers of the meeting.
ARTICLE TWENTY-TWO.
In all Shareholders' Meetings, each share shall grant its holder the right to
one vote on all matters as to which such shares may be voted. If two or more
persons or entities are undivided shareholders of a stock certificate they shall
designate a common representative to exercise the voting rights underlying such
share.
FOURTH CHAPTER
MANAGEMENT AND SURVEILLANCE OF THE COMPANY
ARTICLE TWENTY-THREE.
Subject to Articles Ten and Eleven hereof, the Company shall be managed by the
Board and the Board shall be composed of 9 (nine) members and the same number of
alternate members.
a) The following individuals shall be elected to the Board:
(i) 5 (five) members (and 5 (five) alternates) designated by the
holders of a majority of the Series "A" and "A-1" shares
present at a shareholders' meeting and entitled to vote
thereat voting together as a single class on any such
designation (the "A-A-1 Directors"); and
(ii) 4 (four) members (and 4 (four) alternates) designated by the
holders of a majority of the Series "B" and "B-1" shares
present at a shareholders' meeting and entitled to vote
thereat voting together as a single class on any such
designation (the "B-B-1 Directors"); provided that the B-B-1
Directors (and alternatives) shall only be elected if
nominated as a B-B-1 Director or alternate, as the case may
be, by Nexus (any B-B-1 Director actually nominated by Nexus
and elected by the holders of a majority of the Series "B" and
"B-1" shares acting jointly, a "Nexus Director"); provided
that Nexus shall be entitled, at all times and at its sole
option, to assign all or any portion of its right hereunder to
nominate one or more B-B-1 Directors to any purchaser of
Series B-1 shares from the Company, Nexus or BASCFC;
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b) So long as (1) no Qualified Public Offering has been consummated, (2)
either (i) the Series "N-2" shares represent at least 3% (three percent) of the
outstanding capital stock of the Company or (ii) there is at least one Series
"N-2" share outstanding and at least U.S.$17,500,000 of principal remains
outstanding on the Company's U.S.$175,000,000 Senior Notes due 2007 and (3) at
such time the holders of Series "N-2" shares are not entitled to designate a
director to the Board pursuant to clause (v) of Article Twenty-Nine (the
conditions set forth in clauses (1) through (3) of this sentence being the "N-2
Observer Conditions"), the holders of a majority of the outstanding Series "N-2"
shares present at a shareholders' meeting and entitled to vote thereat voting
separately as a class shall be entitled to designate 1 (one) observer to the
Board (the "Series N-2 Observer"), who shall be entitled (but not obligated) to
attend all meetings of the Board, provided, however, that either the Company or
the Board may exclude such observer from access to any material or meeting or
portion thereof if the Company or Board, believes, based upon the advice of
counsel, that such exclusion is necessary to preserve the attorney-client
privilege, to protect confidential proprietary information or to avoid a
conflict of interest or potential conflict of interest, as determined in good
faith by the Board; provided, further, that under no circumstances shall such
observer have a right to cast a vote on any matters discussed at any meeting of
the Board; provided, further, that the Series N-2 Observer shall not, solely in
his or her capacity as the Series N-2 Observer, owe any fiduciary duty to the
Company's shareholders or securityholders by virtue of his or her serving as the
Series N-2 Observer unless otherwise agreed to in writing by the Series N-2
Observer and such persons. So long as the Series "N-2" shares are held by a
single shareholder (and subject to the continuing satisfaction of the Series N-2
Observer Conditions), in lieu of a Special Shareholders' meeting to designate,
remove or replace the Series N-2 Observer, the sole Series "N-2" shareholder
shall designate, remove or replace the Series N-2 Observer from time to time by
delivery of the written consent of such sole Series "N-2" shareholder to such
action in lieu of holding a shareholders' meeting to vote thereon.
c) Unless otherwise required by applicable Mexican law, if any party fails
(but is otherwise entitled) to designate a Director pursuant to the terms of
this Article Twenty-Three, such Director seat shall remain vacant until filled
in accordance with this Article Twenty-Three.
d) At the request of any Nexus Director, the composition of the board of
directors or similar body of each of each of the Company's subsidiaries (a
"Subsidiary Board") shall include at least one Nexus Director.
e) At the request of any Nexus Director, each committee of the Board and each
committee of each Subsidiary Board (each, a "Committee") shall include at least
one Nexus Director. Furthermore, subject to the restrictions set forth on access
to Board materials and meetings set forth in paragraph (b) of this Article
Twenty-Three, the Series N-2 Observer shall be entitled to attend all meetings
of any Committee that the Board has delegated the power and authority to
authorize and approve matters on behalf of the full Board (as opposed to a
Committee that is only authorized to review potential actions and make
recommendations to the Board).
f) The removal (with or without cause) of any member of the Board, a
Subsidiary Board or a Committee shall be only upon written request of the
shareholder or shareholders who designated such member and under no other
circumstances. In the event that any individual ceases, for any reason, to serve
as a member of the Board, a Subsidiary Board or a Committee, the vacancy shall
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English Translation
be filled with a new member selected by the shareholder or shareholders who
designated such member. In the event that any member of the Board (or with
respect to a Subsidiary Board and any Committee, any Nexus Director) cannot
attend any meetings thereof, the alternate member designated by the shareholder
or shareholders who designated such member (or by Nexus, with respect to the
Nexus Director) may attend such meetings, and such alternate member shall be
given all written notices, materials and information regarding all meetings of
the Board, such Subsidiary Board or Committee and shall be entitled to vote at
such meeting as a member of the Board, such Subsidiary Board or Committee (it
being understood that any alternate member may nonetheless attend any meeting of
the Board, a Subsidiary Board or a Committee of the Board as an observer and
shall be entitled to receive copies of all materials and information regarding
such meeting, even if the principal Board member is present).
g) The Company shall pay the reasonable, documented out-of-pocket expenses
(including reasonable travel and lodging) incurred by each member (and each
alternate member) of the Board and the Series N-2 Observer in connection with
attending each meeting of the Board, any Subsidiary Board or any Committee
attended by such member (and alternate) and other expenses reasonably incurred
in discharging such members' duties as a member of the Board, any Subsidiary
Board or Committee.
h) The Board shall establish a five (5) member Advisory Committee (which shall
be responsible for advising the Board regarding, and shall oversee, the
Company's continuing operations but which shall not have the authority to
approve any matters and rather which shall only have the authority to recommend
matters to the full Board) consisting of (A) the Company's Chief Executive
Officer; (B) Adrian Aguirre G.; and (C) 3 (three) B-B-1 Directors (including at
least 2 Nexus Directors).
ARTICLE TWENTY-FOUR.
The members of the Board shall hold office for one year and may be reelected
until their respective successors are designated.
ARTICLE TWENTY-FIVE.
To the extent required by Mexican law, the following conditions must be met in
order to be a member of the Board:
a) To guarantee the faithful performance of the position, if and as determined
by the General Ordinary Shareholders' Meeting.
b) To have no incapacity set forth in article 151 of the General Business
Corporation Law, as in effect on the date hereof.
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English Translation
ARTICLE TWENTY-SIX.
a) The Board shall hold a meeting at least once a month (unless otherwise
agreed by a resolution of the Board, provided that such resolution is approved
with the affirmative vote of one of the Nexus Directors). Meetings of the Board
may be called by the Chairman, the Vice-chairman, the Secretary of the Board,
the Examiner, any Nexus Director or any two members of the Board and shall be
held at the headquarters of the Company, or at any other place in the Mexico or
in a foreign country.
b) The quorum for a Board meeting by virtue of first call (a "First Call
Meeting") shall be at least 7 (seven) members (or their alternates); provided
that at least one of the Nexus Directors be present. In the event no quorum is
reached at the First Call Meeting, a Board's meeting shall be called for a
second time (a "Second Call Meeting") (and the call shall be repeated as
necessary) until at least 6 (six) members (or their alternates) are present. A
Second Call Meeting (or a subsequent meeting of the Board if no quorum is
reached at the Second Call Meeting) shall take place at least 5 (five) calendar
days after the date of the First Call Meeting. In addition to the quorum
requirements set forth in the preceding two sentences, the quorum for any Board
meeting where any Key Matter is to be authorized or approved shall require the
attendance of at least one Nexus Director.
c) Decisions of the Board may be adopted and approved by written consent in
lieu of a meeting, as set forth in the written call, which shall be transmitted
in writing 15 (fifteen) calendar days prior the date of the meeting. Members of
the Board and the Series N-2 Observer may participate in any meeting of the
Board via telephone (subject to unanimous written ratification of the minutes
and the resolutions therefrom). The members of the Board may waive the
requirement of a written call, which shall not be needed when all the regular
members or their alternates are present, and/or may act by unanimous written
consent in the absence of a meeting. Subject to the Company's and the Board's
right pursuant to paragraph (b) of Article Twenty-Three to exclude the Series
N-2 Observer from access to certain materials, (i) any written call for a
meeting of the Board (and any circulation of a proposed Board action by written
consent in lieu of a meeting) shall be transmitted to the Series N-2 Observer
concurrently with the transmittal thereof to the other members of the Board and
(ii) a copy of any Board action by written consent in lieu of a meeting (or a
written summary setting forth the substance thereof) shall be provided to the
Series N-2 Observer following the taking of such action.
d) Resolutions approved at a First Call Meeting shall be adopted by
affirmative vote of at least 4 (four) directors or their alternates; provided
however that the affirmative vote of at least one of the Nexus Directors shall
be required. In case of a Second Call Meeting (or subsequent calls thereto, if
applicable), resolutions shall require the majority vote of those who are
present. The approval of any resolutions or agreements relating to Key Matters
shall require the approvals set forth in Articles Eleven and Thirteen of these
Bylaws.
ARTICLE TWENTY-SEVEN.
At the Board's meetings, each member or alternate thereof shall be entitled to
cast one vote. If the following has not occurred at the General Ordinary
Shareholders' Meeting, the Board shall designate among its members a Chairman
and may elect those other officials, including a
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English Translation
Secretary and a Treasurer, in the way it deems proper, whether shareholders or
not or members of the Board and may determine the power and compensation of said
officers or personnel, in each case subject to Articles Ten, Eleven and
Twenty-One hereof.
The Board shall appoint the Chief Executive Officer of the Company and the other
executives and managers, such as Finance and Administration, Technical, and
Business Development-Public Relations Executive Officers, in each case subject
to Articles Ten and Eleven hereof.
ARTICLE TWENTY-EIGHT.
Subject to the provisions of these Bylaws (including Articles Ten and Eleven
hereof), the full power to manage and direct the business of the Company is
vested in the Board. Subject to Articles Ten and Eleven hereof the Board shall
have power and authority to execute the following actions:
a) To represent the Company with general powers for lawsuits and collections,
requiring a special clause, pursuant to the provisions of (i) the first
paragraph of article 2554 and article 2587 of the Federal Civil Code of Mexico
and (ii) the corresponding articles under the civil codes of the Federal
District and the states of Mexico. Therefore, the Board is authorized to file
lawsuits or abandon appeals of any kind, including the "juicio de amparo"
(injunction, procedure under the Mexican Constitution); settle, submit to
arbitration, to question and answer interrogatories; file criminal lawsuits and
appeals thereof as offended party in penal matters; assign in favor of
creditors, recuse, receive payments and execute acts of any kind specified
expressly in the law, among them, to represent the Company before authorities of
any kind, such as: penal, civil, military, administrative and labor, before
courts and before the Ministry of Foreign Affairs with the object of entering
agreements with the Federal Government pursuant to the provisions of Sections I
and IV of article 27 of the Mexican Constitution.
b) To administer properties in accordance with the provisions of second
paragraph of article 2554 of the Federal Civil Code of Mexico and corresponding
articles related thereto under the civil codes of the Federal District and the
states of Mexico.
c) To exercise acts of ownership under the terms of third paragraph, article
2554 of the Federal Civil Code and in the corresponding articles related thereto
under the civil codes of the Federal District and the states of Mexico.
d) To draw, subscribe, guarantee and endorse securities under the terms of
article 9 of the General Law on Negotiable Instruments and Credit Operations, as
well as to verify banking and trade operations of any kind. The powers for acts
of ownership and for subscribing securities shall be exercised concurrently by
two attorneys-in-fact and in the way determined by the Board.
e) To open bank and securities accounts in the name of the Company and
designate the persons who shall draw against such accounts.
f) To designate the managers, attorneys-in-fact, agents and employees of the
Company, to determine their power, working conditions and remuneration, and
remove them from their positions.
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English Translation
g) To carry out all the acts authorized by these Bylaws or being a consequence
thereof.
h) To call General Ordinary and Extraordinary Shareholder's Meetings and carry
out the resolutions thereof.
i) To delegate their power and authority in one or more of its members,
whether completely or partially, and confer, in favor of the person or entity it
deems proper, special or general powers under the terms of paragraphs (a)
through (e) of this Article, and to revoke the powers that the Board or its
attorneys-in-fact might confer (provided that the prior written consent of at
least one of the Nexus Directors shall be required for the delegation of any
power which, if exercised by the Board, would require the consent of at least
one of the Nexus Directors).
j) The Company shall permit any representatives designated by a member of the
Board at such times as any such person or entity may reasonably request during
regular business hours after prior written notice of at least two business days,
to (i) visit and inspect any of the properties of the Company and its
subsidiaries, (ii) examine and copy the corporate financial records of the
Company and its subsidiaries and, (iii) discuss the affairs, finances and
accounts of the Company and its subsidiaries with the directors, officers, key
employees and independent accountants of the Company and its subsidiaries.
ARTICLE TWENTY-NINE.
If at any time the Foreign Investment Law and the Federal Telecommunications Law
of Mexico are amended so as to permit the unrestricted ownership and/or control
of the Company by one or more foreign (non-Mexican) entities, upon the
effectiveness of such amendments (the "Regulatory Amendments"):
(i) the Common Shares shall be automatically converted on a
one-to-one basis with respect to the Common Shares into a
single series of common shares (the "New Common Shares") with
voting rights determined on a pro rata basis based on all such
common shares voting together as a single class with the new
preferred shares of the Company described in clauses (ii) and
(iii) below;
(ii) the Series "A-1" shares, Series "B-1" shares, and Series "N-1"
shares shall be automatically converted on a one-to-one basis
into a single series of preferred shares (the "New Preferred
Shares") with (1) the liquidation preference, dividend
preference and conversion rights set forth in these Bylaws for
Series "N-1" shares, (2) voting rights determined on a pro
rata basis based on the preferred shares of the Company voting
as a single class together with the common shares of the
Company, provided, that such New Preferred Shares shall retain
the special right to vote on the matters described in
paragraph (i) of Article Six and (3) the option of the holder
thereof to convert (on the basis set forth in Article Seven at
the Conversion Price then in effect) such New Preferred Shares
into New Common Shares. Upon such conversion of the Series
"A-1" shares, "B-1" shares and "N-1" shares, all references
contained in these Bylaws to Series "A-1" shares, Series "B-1"
shares and Series "N-1" shares shall be automatically amended
to be references to New Preferred Shares; and
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English Translation
(iii) the Series N-2 shares shall be automatically converted on a
one-to-one basis into a single series of preferred shares (the
"New Series N-2 Shares") with (1) the liquidation preference,
dividend preference and conversion right set forth in these
Bylaws for Series "N-2" shares, (2) voting rights determined
on a pro rata basis based on the preferred shares of the
Company voting together as a single class together with the
common shares of the Company, provided, that such New Series
N-2 Shares shall retain the special right to vote on the
matters described in paragraph (j) of Article Six and (3) the
option of the holder thereof to convert (on the basis set
forth in Article Seven at the Conversion Price then in effect)
such New Series N-2 Shares into New Common Shares. Upon such
conversion of the Series "N-2" shares, all references
contained in these Bylaws to Series "N-2" shares shall be
automatically amended to be references to New Series N-2
Shares;
(iv) upon the conversion described above in subparagraphs (ii) and
(iii) of this paragraph (j) of these Bylaws, all references
contained in these Bylaws to "Preferred Shares" shall be
automatically amended to be references to New Preferred Shares
and New Series N-2 Shares;
(v) Upon the effectiveness of the Regulatory Amendments and the
modifications to the Company's capital structure described in
this Article Twenty-Nine, the size of the Board shall remain
unchanged but the composition of the Board shall be determined
by the shareholders pro rata based on their aggregate
ownership of voting stock of the Company at such time;
provided that so long as the Aguirre Group Investors own New
Common Shares issued upon conversion of the Series "A" shares
together with the New Preferred Shares issued upon conversion
of the Series "A-1" shares held by the Aguirre Group Investors
represent at least 2.5% (two and one-half percent) of the
outstanding Equity Securities of the Company, the Aguirre
Group Investors shall collectively be entitled to designate
one director (and one alternate) to the Board.
(vi) Prior to the consummation of a Qualified Public Offering, upon
the effectiveness of the Regulatory Amendments and the
modifications to the Company's capital structure described in
this Article Twenty-Nine, so long as the New Series N-2 Shares
(but excluding any New Common Shares issued upon conversion
thereof) represent at least 10% (ten percent) of the then
outstanding Equity Securities of the Company, the holders of a
majority of such shares shall be entitled, but not obligated,
to designate one director (and one alternate) to the Board (in
lieu of the observer such holders would otherwise be entitled
to designate pursuant to Article Twenty-Three hereof). If and
whenever the New Series N-2 Shares represent less than 10%
(ten percent) of the outstanding Equity Securities of the
Company, the holders of such shares shall continue to be
entitled, subject to the satisfaction of the N-2 Observer
Conditions, to designate an observer as set forth in Article
Twenty-Three hereof.
(vii) Upon the effectiveness of the Regulatory Amendments and the
modifications to the Company's capital structure described in
this Article Twenty-Nine, the Requisite Approval with respect
to the Key Matters set forth in Articles Ten and
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English Translation
Eleven shall no longer apply; provided however that the
approval of the Key Matters set forth therein shall continue
to require the affirmative vote of Nexus solely in its
capacity as a shareholder without any fiduciary duty to the
other shareholders. The Company shall take all actions
necessary or requested by Nexus in connection with
effectuating the modifications to the Company's capital
structure described in this Article Twenty-Nine.
ARTICLE THIRTY.
The supervision of the Company shall be vested in one or two examiners of the
Company (each, an "Examiner"), who may be shareholders or not and shall be
designated in the General Ordinary Shareholders' Meeting and shall hold office
for one year as it is indicated for the members of the Board. The Examiners
shall have the authority and duties referred to in article 166 of the General
Business Corporation Law. The shareholders at the shareholders' meeting may
appoint one or two alternate Examiners. The Examiners shall guarantee the
faithful performance of their positions in the way established by the
shareholders' meeting.
FIFTH CHAPTER
FISCAL YEARS, BALANCE SHEET, PROFIT AND LOSS
ARTICLE THIRTY-ONE.
The fiscal year of the Company shall be from January 1st to December 31st of
each year, the last period excepted, which will be from January 1st to the date
this Company ceases to operate for any reason whatsoever.
ARTICLE THIRTY-TWO.
At the end of each fiscal year the Company's financial information shall be
prepared pursuant to articles 172, 173 and 177 of the General Business
Corporation Law.
ARTICLE THIRTY-THREE.
The Company shall provide each of the Investors with financial statements and
other requested information as and when required by such shareholders. The
annual financial statements shall be prepared in accordance with generally
accepted accounting standards in Mexico and shall be audited by
PriceWaterhouseCoopers or another independent accounting firm acceptable to
Nexus.
ARTICLE THIRTY-FOUR.
The net profits of the fiscal year shall be applied as follows:
a) To the extent required by Mexican law, 5% (five percent) shall be kept in a
reserve fund until it equals the amount, if any, required under Mexican law and
such reserve fund shall be replenished in the same manner when it decreases for
any reason whatsoever.
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English Translation
b) Subject to the approval of Nexus, the balance shall be applied or
re-invested pursuant to a shareholders' meeting resolution, or shall be
distributed among shareholders in proportion of the number of their shares if
completely paid, or on the contrary shall be applied in the amount paid for
them.
c) The founders of the Company do not reserve for themselves any special
sharing of profits.
ARTICLE THIRTY-FIVE.
Losses shall be distributed among shareholders in proportion to the shares they
hold, but the responsibility of shareholders for the obligations of the Company
is limited to the subscription value of shares respectively subscribed or
acquired by them.
ARTICLE THIRTY-SIX.
Except for the cases in which all shareholders are aware of the declaration of a
dividend, the distribution of dividends shall be published in (i) the Official
Gazette of the Federation, (ii) in the "Negocios" section of the "Reforma" or
"El Financiero" newspapers or (iii) in any other of the most circulated
newspapers at the domicile of the Company, and such declaration shall be made
known by mail to the shareholders registered in the Company's shareholder
registry book. The dividends not collected by shareholders within a five-year
term shall prescribe in favor of the Company. The declaration and payment of
dividends is subject to the provisions of Articles Ten and Eleven above.
Furthermore, so long as any series of Preferred Shares is outstanding, the
Company shall not declare or pay any dividends with respect to any series of
Common Shares or any other equity securities junior to the Preferred Shares
unless the Company also declares and pays an equivalent dividend with respect to
each series of Preferred Shares on an as-converted basis (as described in
Article Six). The outstanding Series "A-1", "B-1", "N-1" and Series "N-2" shares
shall be entitled to participate pari passu with respect to any dividend
declared or paid by the Company.
SIXTH CHAPTER
DISSOLUTION AND LIQUIDATION
ARTICLE THIRTY-SEVEN.
To the extent required by Mexican law, the Company shall be dissolved in any of
the following events:
a) In case it is impossible for the Company to continue carrying out its
principal purposes.
b) Subject to Articles Ten and Eleven above, by means of a resolution of the
General Extraordinary Shareholders' Meeting taken pursuant to these Bylaws.
c) If the number of shareholders is fewer than two.
d) Due to the loss of two thirds of the capital stock.
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English Translation
e) In any other case required by applicable law.
ARTICLE THIRTY-EIGHT.
Once the dissolution of the Company has been declared, the Company shall be
liquidated and, for this purpose, the General Extraordinary Shareholders'
Meeting shall determine the number of liquidators who shall be in charge of the
liquidation, and if more than one liquidator is appointed, each liquidator shall
work together with the others.
The liquidation shall be performed in accordance with the resolutions adopted by
the shareholders when agreeing the Company's dissolution. In the absence of
special resolutions from the Shareholders' meeting, the liquidation shall be
made in accordance with the applicable provisions of the General Business
Corporation Law.
ARTICLE THIRTY-NINE.
Upon any liquidation, dissolution or winding up of the Company, each holder of
Preferred Shares (on a proportional basis) shall be entitled to be paid prior to
any distribution or payment is made to any holders of Common Shares, pursuant to
the rights and preferences set forth in Article Six, paragraph (h) hereof. The
Company shall mail written notice of such liquidation, dissolution, or winding
up of the Company, no less than 60 (sixty) days prior to the payment date stated
therein, to each record holder of Company shares.
ARTICLE FORTY.
Liquidators shall represent the Company, and shall have the right of ownership,
of administration and for lawsuits and collection, without any limitation,
including all those powers which require a special power or clause, unless
otherwise limited by the shareholders at a shareholders' meeting. The
Liquidation Amount payable to Series "A-1" shares, Series "B-1" shares, Series
"N-1" shares and Series "N-2" shares shall be made within the United States in
U.S. Dollars.
ARTICLE FORTY-ONE.
During the liquidation term, shareholders' meeting may be called by the
liquidators, the Examiners, Nexus or directly by holders of more than 33%
(thirty-three percent) of the capital stock of the Company.
SEVENTH CHAPTER
INDEMNITY
ARTICLE FORTY-TWO.
None of the members of the Board, or of any Committee of the Company, or any of
the Company's officers shall be liable to any shareholder or the Company for (a)
any action taken or failure to act in such capacity in good faith with respects
to the Company which is not a violation of the material provisions of these
Bylaws and which is not grossly negligent or willfully malfeasant, and then only
to the extent of such person's or entity's bad faith, gross negligence or
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willfully malfeasance, (b) any action or inaction arising from reliance upon the
opinion or advice as to legal matters of legal counsel or as to accounting
matters of accountants selected by any of them with reasonable care or (c) the
action or inaction of any agent, contractor or consultant selected by any of
them with reasonable care.
ARTICLE FORTY-THREE.
Each person or entity who was or is made a party or is threatened to be made a
party to or is involved in any action, suit or proceeding, whether civil,
criminal, administrative, or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she, or a person or entity of whom he or she is
the legal representative, is or was a director, a member of a committee or
officer, of the Company or is or was serving at the request of the Company as a
director, or officer, employee, fiduciary, or agent of another corporation or of
a partnership, joint venture, trust or other enterprise, shall be indemnified
and held harmless by the Company to the fullest extent which it is empowered to
do so unless prohibited from doing so by Mexican law, as the same exists or may
hereinafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Company to provide broader
indemnification rights than said law permitted the Company to provide prior to
such amendment) against all expense, liability and loss (including attorneys'
fees actually and reasonably incurred by such person or entity in connection
with such proceeding) and such indemnification shall inure to the benefit of his
or her heirs, executors and administrators; provided, however, that except as
provided in Article Forty-Five, the Company shall indemnify any such person or
entity seeking indemnification in connection with a proceeding initiated by such
person or entity only if such proceeding was authorized by the Board. The right
to indemnification conferred in this Chapter shall be a contract right and,
subject to Articles Forty-Five and Forty-Eight hereof, shall include the right
to be paid by the Company the expenses incurred in defending any such proceeding
in advance of its final disposition. The Company may, by action of its Board,
provide indemnification to employees and agents of the Company with the same
scope and effect as the foregoing indemnification of directors and officers.
ARTICLE FORTY-FOUR.
Any indemnification of a director, member of a Committee or officer of the
Company under Article Forty-Two of these Bylaws or advance of expenses under
Article Forty-Seven of these Bylaws shall be promptly, and in any event within
30 (thirty) days, upon the written request of the director, committee member or
officer. If a determination by the Company that the director, committee member
or officer is entitled to indemnification pursuant to this Chapter is required,
and the Company fails to respond within 60 (sixty) days to a written request for
indemnity, the Company shall be deemed to have approved the request. If the
Company denies a written request for indemnification or advancing of expenses,
in whole or in a part, or if payment in full pursuant to such request is not
made within 30 (thirty) days, the right to indemnification or advances as
granted by this Chapter shall be enforceable by the director, committee member
or officer in any court of competent jurisdiction. Such person's or entity's
costs and expenses incurred in connection with successfully establishing his or
her right to indemnification, in whole or in part in any such action shall also
be indemnified by the Company. It shall be a defense to any such action (other
than an action brought to enforce a claim for expenses incurred in defending any
proceeding in advance or its final disposition where the required undertaking,
if
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English Translation
any, has been entered to the Company) that the claimant has not met the
standards of conduct which make it permissible under applicable law for the
Company to indemnify the claimant for the amount claimed, but the burden of such
defense shall be on the Company. Neither the failure of the Company (including
its Board, independent legal counsel, or its shareholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in applicable law, nor an actual
determination by the Company (including its board of directors, independent
legal counsel, or its stockholders) that the claimant has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that the claimant has not met the applicable standard of conduct.
ARTICLE FORTY-FIVE.
The rights to indemnification and the payment of expenses incurred in defending
a proceeding in advance of its final disposition conferred in this Chapter shall
not be exclusive of any other right which any person or entity may have or
hereafter acquire under any statute, provision of the certificate of
incorporation, by-law, agreement, vote of stockholders or disinterested
directors or otherwise.
ARTICLE FORTY-SIX.
The Company may purchase and maintain insurance on its own behalf and on behalf
of any individual who is or was a director, member of a Committee, officer,
employee, fiduciary, or agent of the Company or was serving at the request of
the Company as a director, member of a committee, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against him or her and incurred by him or her in
any such capacity, whether or not the Company would have the power to indemnify
such person or entity against such liability under this Chapter.
ARTICLE FORTY-SEVEN.
Expenses incurred by any person or entity described in Article Forty-Five of
these Bylaws in defending a proceeding shall be paid by the Company in advance
of such proceeding's final disposition unless otherwise determined by the Board
(with the approval of the Nexus Directors) in the specific case upon receipt of
an undertaking by or on behalf of the director of officer to repay such amount
if it shall ultimately be determined that he or she is not entitled to be
indemnified by the Company. Such expenses incurred by other employees and agents
may be so paid upon such terms and conditions, if any, as the Board deems
appropriate.
ARTICLE FORTY-EIGHT.
Persons who are not covered by the foregoing provisions of this Chapter and who
are or were employees or agents of the Company, or who are or were serving at
the request of the Company as employees or agents of another corporation,
partnership, joint venture, trust or other enterprise, may be indemnified to the
extent authorized at any time or from time to time by the Board.
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English Translation
ARTICLE FORTY-NINE.
The provisions of these Bylaws shall be deemed to be a contract right between
the Company and each director or officer who serves in any such capacity at any
time while this Chapter and the relevant provisions of Mexican law or other
applicable law are in effect, and any repeal or modification of this Chapter or
any such law shall not affect any rights or obligations then existing with
respect to any state of facts or proceeding then existing.
ARTICLE FIFTY.
For purposes of this Chapter, references to "the Company" shall include, in
addition to the resulting corporation, any constituent corporation (including
any constituent of a constituent) absorbed in a consolidation or merger which,
if its separate existence had continued, would have had power and authority to
indemnify its directors, officers, and employees or agents, so that any person
or entity who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under this Chapter with respect to the resulting or surviving
corporation as he or she would have with respect to such constituent corporation
of its separate existence had continued.
ARTICLE FIFTY-ONE.
The Company shall, and shall cause each subsidiary to, comply at all times with
the U.S. Foreign Corrupt Practices Act.
ARTICLE FIFTY-TWO.
In the event of a Sale of the Company in which the Series "A-1" shares, "B-1"
shares or "N-1" shares participate or an Approved Sale, the Company shall
prepare, or cause to be prepared, with the advice of U.S. counsel, any notices
or offering materials required by these Bylaws or the applicable Mexican, U.S.
and state securities laws to be delivered to the beneficial owners of the Series
"N-2" shares in connection with an Approved Sale or the tag-along rights of such
shares on a Sale of the Company and to cause such documents to be delivered to
the record holder of the Series "N-2" Shares in sufficient quantities for
distribution to the beneficial owners of such Series "N-2" Shares. The Company
shall use its commercially reasonable best efforts to make any filings with
respect to any such distribution of notices or offering materials required by
applicable law, provided that the Company shall not be required to (i) qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this Article Fifty-Two, (ii) subject itself to
taxation in any such jurisdiction or (iii) consent to general service of process
in any such jurisdiction.
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English Translation
EIGHTH CHAPTER
DEFINITIONS
ARTICLE FIFTY-THREE.
The following capitalized terms shall have the meanings set forth in this
Article Fifty-Three:
"Affiliate" of any person or entity means any other person or entity
controlling, controlled by or under common control with such particular person
or entity, and "control" means the possession, directly or indirectly, of the
power to direct the management and policies of a person or entity, whether
through the ownership of voting securities, contract or otherwise. For purposes
of these Bylaws, each of BAIIC, BASCFC, Nexus and LA Strategic Capital Partners
II shall each be deemed to be an "Affiliate" of the other.
"Aguirre Group Investors" means, with respect to the Series "A-1"
shares only, collectively, Adrian Aguirre G., Guadalupe Aguirre G., Maria Elena
Aguirre G. and Maria Trinidad Aguirre G., as well as the trustee of the Security
Trust Agreement (but only with respect to the Series "A-1" shares beneficially
owned by the other Aguirre Group Investors and deposited with such trustee
pursuant to the terms of the Security Trust Agreement), and their respective
successors and permitted assigns and permitted transferees with respect to the
Series "A-1" Shares only.
"Bachow Investors" means, collectively, Bachow Investment Partners III,
LP ("BIP"), Bachow & Associates, Inc., each of the limited partners of BIP, the
general partner of BIP (and its limited partners and general partners), the
direct and indirect equity holders of any thereof, Paul S. Bachow, Salvatore A.
Grasso and Jay D. Seid and each of their respective successors and permitted
assigns and permitted transferees.
"BAIIC Investors" means, collectively, BankAmerica International
Investment Corporation, BASCFC, Nexus, LA Strategic Capital Partners II, Edward
McCaffrey and their respective successors and permitted assigns and permitted
transferees.
"BASCFC" means, collectively, BASCFC-Maxcom Holdings I, LLC and BAS
Capital Funding Corporation.
"Company Securities" means, at any given time, collectively, the
Company Shares or any subsequently authorized series or class of the Company's
capital stock or any outstanding securities convertible into shares of the
Company's capital stock.
"Company Shares" means, at any given time, collectively, the Company's
(i) Series A Shares, (ii) Series A-1 shares, (iii) Series B Shares, (iv) Series
B-1 shares, (v) Series N Shares, (vi) Series N-1 shares, (vii) Series N-2
shares, (viii) any other authorized series or class of the Company's capital
stock, and (ix) any outstanding securities convertible into shares of the
Company's capital stock.
"Common Shares Deemed Outstanding" means, at any given time, the number
of Common Shares actually outstanding at such time, plus the number of Common
Shares deemed
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English Translation
to be outstanding pursuant to paragraphs (i) and (j) of Article Seven whether or
not the Options or Convertible Securities referred to therein are actually
exercisable or convertible at such time, including, with respect thereto, any
shares of Conversion Stock issuable upon the conversion of any Preferred Shares
"Conversion Stock" means Series "N" shares, except that after the
occurrence of the earliest to occur of:
(i) the effectiveness of the Regulatory Amendments (as defined in
Article Twenty-Nine) and the modifications to the Company's
capital structure described in Article Twenty-Nine, Conversion
Stock shall mean (except with respect to Preferred Shares) the
New Common Shares (as defined in Article Twenty-Nine) (it
being understood that in connection with such events, the
Series "A-1", "B-1" and "N-1" shares shall be converted on a
one-to-one basis into New Preferred Shares (as defined in
Article Twenty-Nine) and the Series "N-2" shares shall be
converted on a one-to-one basis into New Series N-2 Shares (it
being understood that none of the new series of preferred
shares (issued upon the conversion of the Preferred Shares)
shall be Conversion Stock until its subsequent conversion
pursuant to Article Seven) and each of such new series of
preferred shares shall be convertible into Conversion Stock
pursuant to Article Seven at the Conversion Price then in
effect at the time of such subsequent conversion);
(ii) the consummation of a Public Offering of common equity,
Conversion Stock shall mean:
(A) with respect to the Series "N-1" shares, Series "N-2"
shares, New Preferred Shares and New Series N-2
Shares, subject to any applicable regulatory
restrictions, the series and class of capital stock
that was registered in the most recent Public
Offering;
(B) with respect to the Series "A-1" shares, subject to
any applicable regulatory restrictions, at the option
of the holder of such stock, either Series "A" shares
or the series and class of capital stock that was
registered in the most recent Public Offering; and
(C) with respect to the Series "B-1" shares, subject to
any applicable regulatory restrictions, at the option
of the holder of such stock, either Series "B" shares
or the series and class of capital stock that was
registered in the most recent Public Offering.
"Equity Securities" means any equity securities of an issuer or debt
securities of an issuer with equity features or other securities exercisable or
convertible into equity securities of such issuer or any of its subsidiaries
(including, without limitation, Options) or any other securities of such issuer
containing any profit participation features (including, without limitation,
stock appreciation rights and phantom stock).
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English Translation
"Family Group", with respect to a shareholder, means such shareholder's
spouse, parents siblings and descendents (whether natural or adopted) and any
trust solely for the benefit of the shareholder and/or the shareholder's spouse
and/or descendents.
"Independent Third Party" means, at any applicable date of
determination, any person or entity, other than (i) any holder of more than five
percent (5%) of the Common Shares Deemed Outstanding on such date and (ii) any
Restricted Person at such date.
"Investment Trust Agreement" means that certain Irrevocable Investment
Trust Agreement, to be entered into on or prior to the first issuance of Series
"N-2" shares, as such agreement may be amended from time to time thereafter
pursuant to its terms and the restrictions set forth in these Bylaws, among the
Company and the bank initially appointed by Company as the trustee thereunder,
which agreement shall establish the trust that shall initially be the sole
holder of record of all of the Series "N-2" shares.
"Investor" means the BAIIC Investors, the Bachow Investors, Bancboston
Investments, Inc., Latinvest Strategic Investment Fund, L.P., Nexus, BASCFC,
Morgan Stanley Asset Management, Caxton International Limited, Credit Suisse
First Boston Corporation, each other person or entity who acquires Preferred
Shares pursuant to the New Investor Subscription Agreement and their respective
successors and permitted assigns and permitted transferees. For purposes of the
rights of first offer set forth in paragraph (d) of Article Nine, Investor shall
also include CT Global Telecommunications, Inc. For purposes of the registration
rights set forth in paragraph (j) of Article Nine, Investor shall also include
L.D. Coltrane, III, Michael R. Coltrane, Samuel E. Leftwich and Thomas A.
Norman. With respect to the Series "A-1" shares only, Investor also includes the
Aguirre Group Investors.
"MSAM Managed Account" means each of the following entities: (i)
Deutsche Bank as custodian nominee for the Hirtle Callaghan High Yield
Portfolio, (ii) JPMorgan Chase as custodian nominee for Morgan Stanley
Institutional Fund Trust-High Yield Portfolio, (iii) JP Morgan Chase as
custodian nominee for Morgan Stanley Institutional Fund Trust-High Yield
Portfolio, (iv) JP Morgan Chase as custodian nominee for Morgan Stanley Closed
End Funds-Morgan Stanley Global Opportunity Bond Fund, Inc., (v) JP Morgan Chase
as custodian nominee for Morgan Stanley Closed End Funds-Morgan Stanley High
Yield Fund, Inc., (vi) JP Morgan Chase as custodian nominee for Van Kampen
Series Funds Worldwide High Income, (vii) JP Morgan Chase as custodian nominee
for The Universal Institutional Funds High Yield Port., (viii) JP Morgan Chase
as custodian nominee for Morgan Stanley SICAV High Yield Fund, (ix) JP Morgan
Chase as custodian nominee for MS SICAV European High Yield Bond Fund, (x)
Mellon Trust as custodian nominee for Verizon Investment Management Corporation,
(xi) State Street as custodian nominee for SunAmerica Series Trust, (xii) State
Street as custodian nominee for Manufacturers Life Insurance Company of New
York, (xiii) State Street as custodian nominee for GE High Yield Fund, (xiv)
State Street as custodian nominee for LGT Capital Invest Ltd., (xv) Mitsui Trust
as custodian nominee for Morgan Stanley Monthly Income Fund (WAKO) and (xvi) ITM
Worldwide High Income Fund -HY Portion.
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English Translation
"New Investor Subscription Agreement" means, collectively, that certain
New Investor Subscription Agreement dated March 14, 2002, as such agreement may
be amended from time to time pursuant to its terms, among the Company and
certain subscribers for Series "A-1", Series "B-1" and Series "N-1" shares, and
any other subscription agreements entered into on or prior to the one year
anniversary of the first issuance of any Preferred Shares by the Company and one
or more subscribers for the sale of Series "B-1" and Series "N-1" shares on
substantially the same (as determined in good faith by the Board and approved by
Nexus) terms and conditions as the other New Investor Subscription Agreement(s)
and at a price per share equal to or greater than the Original Issue Price.
"Nexus" means, collectively, Nexus-Maxcom Holdings I, LLC and
Nexus-Banc of America Fund II, L.P. (together with any successor-in-interest).
"Original Issue Price" means, with respect to each Preferred Share,
U.S. $0.4927, as adjusted for stock splits, stock dividends, stock dividends and
similar events.
"Option" means a right, option or warrant to subscribe for or to
purchase any series of Common Shares (collectively, the "Options").
"Permitted Options" means the Options for the purchase of up to
38,820,624 Common Shares authorized, issued or granted by the Company on or
prior to March 5, 2002.
"Pro Rata Basis" means, with respect to the calculation of
participation rights hereunder, pro rata on the basis of the Pro Rata Shares of
each holder of Company Securities entitled to participate in such event (i.e.,
with respect to each eligible holder of Company Securities, such holder of
Company Securities' Pro Rata Share divided by the aggregate Pro Rata Shares of
the holders of Company Securities (including such holder) entitled to
participate in such event.
"Pro Rata Share" means, with respect to each Company Share, the
proportional amount such Company Share would receive if an amount equal to the
Total Equity Value were distributed with respect to all of the Company Shares
then outstanding assuming the exercise of all in-the-money options and warrants
(e.g., those Options with an exercise price below the then fair market value
thereof) in connection with a complete liquidation of the Company pursuant to
the rights and preferences set forth in the Company's Bylaws as in effect at the
time of such calculation, in each case as determined in good faith by the Board
(including at least one Nexus Director).
"Public Offering" means the consummation of a public offering (whether
a primary or a secondary offering) registered under the Mexican securities laws,
rules or regulations or the Securities Act of 1933, of Company Securities (or
other securities into which the Company Securities are convertible without the
delivery or payment by any holder of Company Securities of any additional
consideration).
"Qualified Affiliate" of any person or entity means (x) any other
person or entity ninety percent (90%) or more of whose equity and other voting
securities are beneficially owned by such person or entity or (y) any other
person or entity who beneficially owns ninety percent (90%) or more of the
equity and other voting securities of such person or entity (it being understood
that, notwithstanding the foregoing, BankAmerica International Investment
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English Translation
Corporation, Nexus, BASCFC, and LA Strategic Capital Partners II shall be deemed
to be Qualified Affiliates).
"Qualified Public Offering" means a Public Offering that yields
aggregate net proceeds of at least U.S. $50.0 million (fifty million U.S.
dollars).
"Qualifying Sale of the Company" means a Sale of the Company after
which at least two-thirds of the beneficial ownership of the total equity shares
then outstanding or all or substantially all of the consolidated assets of the
Company would be sold.
"Sale of the Company" shall mean any transaction or series of related
transactions with any Independent Third Party or Parties involving (a) a merger,
recapitalization, reorganization or consolidation, (b) an acquisition or
purchase of assets of, or any equity interest in, or any securities convertible
into or exchangeable for an equity interest in, or (c) similar transaction or
business combination involving, the Company, after which at least 50.1% (fifty
point one percent) of the beneficial and record ownership of the total equity
shares then outstanding or all or substantially all of the consolidated assets
of the Company would be sold.
"Security Trust Agreement" means the Second Amended and Restated
Security Trust Agreement, to be entered into on or prior to the first issuance
of any Series "A-1" shares (as amended from time to time thereafter pursuant to
its terms and the terms hereof), among the Company, the Investors, certain other
securityholders of the Company and Bancomer, S.A., Institucion de Banca
Multiple, Grupo Financiero Bancomer, Direccion Fiduciaria, as trustee.
"Securityholders Agreement" means the Second Amended and Restated
Securityholders Agreement, , to be entered into on or prior to the first
issuance of any Series "B-1" shares (as amended from time to time thereafter
pursuant to its terms and the terms hereof), among the Company and certain of
its securityholders.
"Securities Act" means the United States Securities Act of 1933, as
amended.
"Total Equity Value" means the aggregate proceeds which would be
received by the holders of Company Securities if (i) the assets of the Company
(including its subsidiaries) as a going concern were sold at the fair market
value as determined in good faith by the Board; (ii) the Company (and its
subsidiaries) satisfied and paid in full all of its obligations and liabilities
(including all taxes, costs and expenses incurred in connection with such
transaction and any reserves established by the Board (and approved by at least
one Nexus Director) for contingent liabilities); and (iii) such net proceeds
were then distributed in connection with a complete liquidation of the Company
pursuant to the rights and preferences set forth in the Company's Bylaws as in
effect at the time of such calculation, in each case as determined in good faith
by the Board (including at least one Nexus Director).
"Transfer" means, with respect to any interest, any direct or indirect
sale, transfer, assignment, pledge or other disposition of (whether with or
without consideration and whether voluntarily or involuntarily or by operation
of law) any such interest (including, without limitation, a beneficial interest
in such interest).
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English Translation
The following capitalized terms shall have the meanings set forth in the
corresponding section of these Bylaws:
DEFINED TERM ARTICLE
"A-A-1 Directors" Twenty-Three (a)(i)
"Accretive Amount" Six (h)(i)
"Approved Plan" Ten (j)
"Approved Sale" Nine (f)(i)
"BASCFC" Nine (h)(i)
"B-B-1 Directors" Twenty-Three (a)(ii)
"Board" Six (j)(ii)
'Buyer" Six (o)(i)
"General Business Corporation Law" Six (a)
"Committee" Twenty-Three (e)
"Common Shares" Six (b)
"Conversion Price" Seven (a)
"Convertible Securities" Seven (j)(ii)(a)
"Deemed Liquidation" Six (h)(ii)
"Examiner" Thirty
"First Call Meeting" Twenty-Six (b)
"Investor Transfer Notice" Nine (d)
"Key Matters" Ten
"Liquidation Amount" Six (h)(i)
"Liquidation Preference Amount" Six (h)(i)
"Meeting Notice" Fourteen
"New Common Shares" Twenty-Nine (i)
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English Translation
DEFINED TERM ARTICLE
"New Preferred Shares" Twenty-Nine (ii)
"New Series N-2 Shares" Twenty-Nine (iii)
"Nexus Director" Twenty-Three (a)(ii)
"N-2 Observer Conditions" Twenty-Three (b)
"N-2 Offering" Nine (j)(x)
"N-2 Stock" Nine (j)(x)
"Offer Notice" Nine (c)
"Original Issue Price" Six (h)(i)
"Permitted Transferees" Nine (i)
"Preferred Liquidation Right" Six (h)(i)
"Preferred Shares" Six (b)
"Qualified Investor" Nine (d)
"Regulatory Amendments" Twenty-Nine
"Required Approvals" Eleven
"Restricted Persons" Ten (h)
"Restricted Share" / "Restricted Shares" Nine (b)
"Restricted Share Transfer Consent" Nine (b)
"RFR Free Transfer Period" Nine (c)
"ROFO Free Transfer Period" Nine (d)
"Second Call Meeting" Fourteen (e); Twenty-Six (b)
"Series N-2 Observer" Twenty-Three (b)
"Special Shareholders' Meeting" Nineteen
"Subsidiary Board" Twenty-Three (d)
"Tag-Along Right Notice" Nine (e)(i)
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English Translation
DEFINED TERM ARTICLE
"Tag-Along Window" Nine (e)(ii)
"Transferring Non-Investor Shareholders" Nine (c)
"Transferring Shareholder" Nine (e)
* * * * *
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