|
Joint Venture Agreement
JOINT
VENTURE AGREEMENT
entered into by
Gulf
United Energy Inc.
and
Cía. Mexicana de Gas Natural, S.A. de
C.V.,
as of July 15, 2007
| Joint Venture Agreement |
| |
| TABLE
OF CONTENTS |
| |
| Clause |
|
Page |
| |
| 1. |
Definitions, Interpretation and Construction.
|
1
|
| 2. |
Incorporation of the Companies. |
5
|
| 3. |
GLFE
Participation in the Companies. |
6
|
| 4. |
Incorporation and Initial Capitalization of the Project
Entities. |
6
|
| 5. |
Capitalization of the Companies. |
8
|
| 6. |
Business
of the Companies. |
8
|
| 7. |
Directors
and Management of the Companies. |
9
|
| 8. |
Shareholder Actions. |
11
|
| 9. |
Accounts;
Taxes. |
15
|
| 10. |
Business
Plan. |
15
|
| 11. |
Return on
Investment and Cash Distribution Policy.
|
16
|
| 12. |
Capital
Requirements. |
16
|
| 13. |
Employment
Policies. |
18
|
| 14. |
Transfer
and Encumbrance of Shares. |
18
|
| 15. |
Closing. |
19
|
| 16. |
Confidentiality. |
20
|
| 17. |
Non-Competition. |
20
|
| 18. |
Protection
of Name. |
20
|
| 19. |
Termination. |
21
|
| 20. |
Miscellaneous. |
22
|
Joint Venture Agreement
JOINT VENTURE
AGREEMENT
THIS JOINT VENTURE
AGREEMENT is entered into as of the 15 th
day of
July, 2007, by and among Gulf United Energy Inc. (
“GLFE”
), a
corporation organized under the laws of the state of Nevada, United
States of America, and Cía. Mexicana de Gas Natural, S.A. de
C.V. ( “MGN”
),
a sociedad
anónima de capital variable (limited liability
stock corporation of variable capital) organized under the laws of
the United Mexican States (GLFE and MGN and are hereinafter
collectively referred to as the “Parties”
and each
of them as a “Party”
).
WHEREAS, GLFE and
MGN entered into a Letter of Intent dated as of March 22, 2006 (as
amended on November 14 and December 11, 2006, April 4 and May
30,2007 the “LOI”
),
pursuant to which the Parties committed to, among others, enter
into this Agreement for purposes of documenting the rights and
obligations of each of the Parties in regard to the incorporation,
governance and capitalization of each of the JV Entities (as such
term is defined in the LOI).
NOW, THEREFORE, in
consideration of the mutual promises and undertakings contained
herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties agree as
follows:
| 1.
|
Definitions,
Interpretation and Construction.
|
| |
| |
1.01.
Definitions . In this
Agreement, unless the context requires otherwise or is otherwise
expressly set forth, the
following terms when written with initial capital letters shall
have the meaning set forth below:
|
|
|
“A
FFILIATE ”
|
In
reference to a Person (“ Person
‘A’ ”), means any
Person which Controls Person “A”, Controlled by Person
“A”, or under common Control with Person
“A”.
|
|
“A
GREEMENT ”
“A
UDITOR ”
“B OARD ”
“B
USINESS D
AY ”
|
Means
this Joint Venture Agreement.
Means
the Persons performing the duties of external auditors of each
Company. Means the board of directors of a Company.
Means
any day except for Saturdays and Sundays, and those considered to
be compulsory days of rest pursuant to the Federal Labor Law of
Mexico.
|
|
“B
USINESS P
LAN ”
|
Means
the yearly business plan of each Company, approved by the Board on
a yearly basis.
|
|
“B
Y -
LAWS ”
|
Means
the estatutos
sociales (by-laws) of each
Company, to be amended pursuant to this Agreement.
|
|
“C
HAIRMAN ”
|
Means
the Chairman of the Board, as appointed by the Shareholders’
Meeting pursuant to Clause
7.05 .
|
|
“C
LOSING ”
“C
OMPANY ”
|
Shall
have the meaning set forth in Clause
15 of this
Agreement.
Means
each of the Terminal Company and the Pipeline Company,
indistinctively.
|
1
Joint Venture Agreement
| “C ONTROL ” |
Means (i)
the holding of a Person of more than 50% of all securities
representative |
| |
of the
shareholders’ equity or net worth, with full voting rights,
of another Person; |
| |
(ii) the
right of a Person to appoint the majority of the members of the
board of |
| |
directors
or similar body responsible for the overall administration of
another |
| |
Person, or
(iii) the right of a Person to veto the resolutions of the board of
directors |
| |
or of the
Shareholders’ Meeting (or bodies similar to the foregoing) of
another |
| |
Person. |
| |
| “CRE” |
Means
the Comisión Reguladora de Energía
of Mexico (Energy Regulatory |
| |
Commission). |
| |
| “D IRECTOR ” |
Means each
of the directors, proprietary or their corresponding alternate,
elected |
| |
to the
Board, appointed by and acting on behalf of each Shareholder so
appointing |
| |
such
director. |
| |
| “D OLLARS ” OR “US$” |
Means the
lawful tender of the United States of America.
|
| |
| “E XCHANGE R ATE ” |
Means
the “tipo de cambio para solventar obligaciones denominadas
en moneda |
| |
extranjera pagaderas en la República
Mexicana” (exchange
rate applicable to |
| |
payment
obligations in foreign currency to be executed within Mexico)
as |
| |
published
by Banco de México (the
Mexican Central Bank) in the Diario Oficial |
| |
de
la Federación (the
Official Gazette of the Mexican Federal Government), the
|
| |
last
Business Day prior to that in which any payment obligation in
Dollars should |
| |
be made
within Mexico pursuant to this Agreement or the By-laws.
|
| |
| “E XPENDITURE B UDGET ” |
Means the
yearly expenditure budget of each Company, approved by the Board
on |
| |
a yearly
basis. |
| |
| “F ISCAL Y EAR ” OR “FY” |
Means a
calendar year, unless and until Mexican tax law permits
otherwise. |
| |
| “LNG” |
Means
liquefied natural gas. |
| |
| “LOI” |
Means that
Letter of Intent entered into among the Parties as of May 22, 2006
(as |
| |
amended on
November 14 and December 11, 2006, April 4 and May 30,2007).
|
| |
| “M EXICO ” |
Means the
United Mexican States. |
| |
| “M ONTH ” |
Means
calendar month. |
| |
| “N ON - COMPETE A REA ” |
Shall have
the meaning set forth in Clause
17.01 of this
Agreement. |
| |
| “P AID - UP ” |
Means
paid-up and/or credited as paid-up. |
| |
| “P ARTY ” |
Means a
signatory to this Agreement and its successors and permitted
assigns. |
| |
| “P EMEX ” |
Means
Petróleos Mexicanos. |
2
Joint Venture Agreement
|
“P
ERSON ”
|
Means
a natural or legal person, joint venture, trust,
fideicomiso
(Mexican
trust) or any other entity or organization, including a government
or any entity or political subdivision of a government or any
agency thereof, of any nationality.
|
| |
|
“P
ESOS ”
OR “P$”
“P
IPELINE C
OMPANY ”
|
Means
the lawful tender of Mexico.
Means
“Fermaca Gas de Cancún”, S.A. de C.V., a
Mexican Sociedad
Anónima de Capital Variable (S.A. de C.V.)
(limited
liability stock corporation of variable capital), incorporated on
May 24, 2006 under standard, non-specific by-laws (i) Controlled by
MGN; (ii) in which GLFE shall acquire a 24% equity participation
pursuant to this Agreement; (iii) which By-laws shall be amended as
set forth herein, and (iv) which as of this date has an equity
participation of 50% in the Pipeline SPC.
|
| |
|
“P
IPELINE SPC”
|
Means
“Energía YAAX”, S.A. de C.V., a Mexican
Sociedad
Anónima de Capital Variable (S.A. de C.V.)
(limited
liability stock corporation of variable capital), incorporated on
May 24, 2006 under standard, non-specific by-laws (i) in which as
of this date each of the Pipeline Company and MGN have an equity
participation of 50%, and (ii) through which the Pipeline will be
developed, owned and operated.
|
| |
|
“P
IPELINE ”
|
Means
an open access natural gas transportation system, with the
preliminary characteristics indicated in Exhibit
“A” to the
LOI.
|
| |
|
“P
ROJECT E
NTITY ”
“P
ROJECT ”
|
Means
each of the Pipeline SPC and the Terminal SPC,
indistinctively.
Means:
|
|
(i) |
the construction,
financing, ownership and operation of the Pipeline, and
|
| |
|
(ii) |
the construction,
financing, ownership and operation of the Terminal.
|
| |
|
“Q
UARTER ”
“S
ECRETARY ”
|
Means
a period comprising three Months.
Means
the Person appointed to perform the duties of secretary to the
Board in each Company, and includes an assistant secretary, if
any.
|
| |
|
“S
HARE ”
“S
HAREHOLDER ”
|
Means
a share representative of the equity capital of a
Company.
Means
the holder of at least one Share, as provided for in the By-laws of
each Company.
|
| |
|
“S
HAREHOLDERS R
EPRESENTATIVE C
OMMITTEE ”
“S
TATUTORY A
UDITOR ”
|
Shall
have the meaning set forth in Clause
8.09 of this
Agreement.
Means
the Person appointed to perform the duties of comisario
(accounting
policies’ compliance officer) in each Company, and includes
an assistant comisario
(accounting
policies’ compliance officer), if any.
|
3
Joint Venture Agreement
|
“T
ERMINAL C
OMPANY ”
|
Means
“Fermaca LNG de Cancún”, S.A. de C.V., a
Mexican Sociedad
Anónima de Capital Variable (S.A. de C.V.)
(limited
liability stock corporation of variable capital), incorporated on
May 24, 2006 under standard, non-specific by-laws (i) Controlled by
MGN; (ii) in which GLFE shall acquire a 24% equity participation
pursuant to this Agreement; (iii) which By-laws shall be amended as
set forth herein, and (iv) which as of this date has an equity
participation of 50% in the Terminal SPC.
|
| |
|
“T
ERMINAL SPC”
|
Means
“SIIT Energy”, S.A. de C.V., a Mexican
Sociedad
Anónima de Capital Variable (S.A. de C.V.)
(limited
liability stock corporation of variable capital), incorporated on
May 24, 2006 under standard, non-specific by-laws (i) in which as
of this date each of the Terminal Company and MGN have an equity
participation of 50%, and (ii) through which the Terminal will be
developed, owned and operated.
|
| |
|
“T
ERMINAL ”
|
Means
an open-access LNG storage and regasification facility, with the
preliminary characteristics indicated in Exhibit
“B” to the
LOI.
|
| |
|
“T
RANSFER ”
|
Means:
|
| |
|
(i)
|
as a noun, any
voluntary or involuntary transfer, sale, pledge, hypothecation,
encumbrance or other disposition, and
|
| |
| |
|
(ii)
|
as a verb, to
voluntarily or involuntarily transfer, sell, pledge, hypothecate,
encumber or otherwise dispose of.
|
| |
| 1.02.
|
Interpretation and
Construction.
|
| |
| |
1.02.1
|
References to
statutory provisions shall be construed as references to those
provisions as amended or as
their application is modified by other provisions (whether before
or after the date hereof) from time to time.
|
| |
1.02.2 References
herein to Sections, Clauses and Exhibits are to the sections,
clauses and exhibits to this Agreement unless otherwise set forth,
and the Exhibits to this Agreement shall be deemed to form part of
this Agreement.
1.02.3 The term
“Shareholder”, where the context permits, includes the
corresponding Person’s successors and permitted
assigns.
1.02.4 All headings
are inserted for convenience only and shall not affect the
interpretation and construction of this Agreement.
1.02.5 Unless the
context requires otherwise, words importing the singular include
the plural and vice versa, and words importing a gender include
every gender.
4
Joint Venture Agreement
1.02.6 A reference to any thing includes a part of that such
thing.
1.02.7 A reference
to a document includes any agreement in writing, or any
certificate, notice, instrument or other document of any kind, and
an amendment or supplement to, or replacement or novation of that
such document.
1.02.8 A reference
to an agreement includes an undertaking, deed, agreement or legally
enforceable arrangement or understanding.
1.02.9 A reference
to an asset includes all property of any nature, including without
limitation, all rights and obligations pertaining to such
asset.
| 2.
|
Incorporation
of the Companies.
|
| |
| |
2.01.
Incorporation;
Legal Structure . Each of the
Companies was incorporated on May 24, 2006, and organized as
a Sociedad
Anónima de Capital Variable (S.A. de C.V.)
(limited
liability stock corporation of variable capital) pursuant to the
laws of Mexico, under standard, non-specific by-laws; provided,
however, that:
|
| |
2.01.1 the
Companies shall be transformed into Sociedades
Anónimas de Capital Variable Promotoras de Inversiones (S.A.
de C.V. P.I.) (investment-promoting
limited liability stock corporations of variable capital) in order
to incorporate certain provisions of this Agreement into the
By-laws as soon as such incorporation is legally possible by reason
of the entry into force of the new Ley del
Mercado de Valores (Securities Market
Law) in Mexico which shall allow for the referred transformation.
This specific commitment of the Parties shall be effective upon the
entry into force of such law, and
2.01.2 the
provisions of this Agreement referred to under
Section
2.01.1 shall be marked as
“(SAPI)”, and shall be effective upon the entry into
force of the new Ley del
Mercado de Valores (Securities Market
Law) in Mexico.
2.02.
Amendment of
By-laws; Transformation . After the
execution hereof, the Parties shall hold a Shareholders’
Meeting in each Company in order to transform them into
Sociedades
Anónimas de Capital Variable Promotoras de Inversiones (S.A.
de C.V. P.I.) (investment-promoting
limited liability stock corporations of variable capital) and amend
each Company’s By-laws so that they shall comply with the
provisions of this Agreement.
2.03.
Registration Fees
and Incorporation Expenses . Registration fees
and other incorporation expenses (including notarization fees)
incurred in connection with the incorporation of each Company have
been expenses of the corresponding Company and have been reimbursed
by each Company to MGN, immediately after the execution of
each escritura
constitutiva (deed of
incorporation).
2.04.
Registered
Office . The registered
office of each Company is be Pedro Luis Ogazón 59-A, Colonia
Guadalupe Inn, 01020, México, Distrito Federal,
Mexico.
5
Joint Venture Agreement
2.05.
Statutory
Auditor . Each of the
Companies shall have a Statutory Auditor. The Statutory Auditor in
each Company after the Shareholders’ Meeting referred to
under Clause
2.02 , will be Laura
Trejo Chaparro.
2.06.
Secretary
. The
Board of each Company shall have a Secretary. The first Secretary
to each Board after the Shareholders’ Meeting referred to
under Clause
2.02 , will be Emilio
Carrillo Peñafiel.
| 3.
|
GLFE
Participation in the Companies.
|
| |
| |
3.01.
Acquisition of
Shares by GLFE . On June 22, 2006,
GLFE, as purchaser, and Fermaca Pipeline de la
Península, S. de R.L. de C.V., as seller, entered into a
mutually acceptable share purchase agreement whereby Fermaca
Pipeline de la Península, S. de R.L. de C.V., Would transfer
its Shares in each Company to GLFE, at book value (P$1,000.00 Pesos
each). Such Share purchase agreement was subject to the condition
precedent consisting that the same would not become effective
unless and until the date of execution of this Agreement. Given the
above and that the condition precedent has been complied by the
execution hereof, the participation of the Parties in each of the
Companies is as set forth in Section 3.02 and 3.03
below.
|
|
3.02.
Equity Capital of
the Pipeline Company . The equity
capital of the Pipeline Company, as of this date, is
P$25,378,000.00 Pesos, of which (i) P$50,000.00 Pesos correspond to
the fixed part, and (ii) P$25,328,000.00 Pesos correspond to the
variable part, divided into a total number of 25,378 common, voting
shares with a face value of P$1,000.00 Pesos each, as
follows:
3.02.1 GLFE (i) 12
shares of the fixed capital, and (ii) 6,086 shares of the variable
part, equivalent to 24% of the equity capital of the Pipeline
Company, and
3.02.2
MGN (i) 38 shares of the fixed capital, and (ii) 19,242 shares of
the variable part, equivalent to 76% of the equity capital of the
Pipeline Company.
3.03.
Equity Capital of
the Terminal Company . The equity
capital of the Terminal Company, as of this date, is
P$10,565,000.00 Pesos, of which (i) P$50,000.00 Pesos correspond to
the fixed part, and (ii) P$10,515,000.00 Pesos correspond to the
variable part, divided into a total number of 10,565 common, voting
shares with a face value of P$1,000.00 Pesos each, as
follows:
3.03.1
GLFE (i) 12 shares of the fixed capital, and (ii) 2,523 shares of
the variable part, equivalent to 24% of the equity capital of the
Terminal Company, and
3.03.2
MGN (i) 38 shares of the fixed capital, and (ii) 7,992 shares of
the variable part, equivalent to 76% of the equity capital of the
Terminal Company.
| 4.
|
Incorporation
and Initial Capitalization of the Project Entities.
|
| |
| |
4.01.
Incorporation of
the Project Entities .
|
| |
6
Joint Venture Agreement
4.01.1 Each of the
Project Entities was incorporated on May 24, 2006, and organized as
a
Sociedad
Anónima de Capital Variable (S.A. de C.V.)
(limited
liability stock corporation of variable capital) pursuant to the
laws of Mexico, under standard, non-specific by-laws;
notwithstanding the foregoing, the Project Entities may also be
transformed into Sociedades
Anónimas de Capital Variable Promotoras de Inversiones (S.A.
de C.V. P.I.) (investment-promoting
limited liability stock corporations of variable capital) promptly
after the entry into force of the new Ley del
Mercado de Valores (Securities Market
Law) in Mexico.
4.01.2 Registration
fees and other incorporation expenses (including notarization fees)
incurred in connection with the incorporation of each Project
Entity have been expenses of the corresponding Project Entity and
have been reimbursed by each Project Entity to MGN, immediately
after the execution of each escritura
constitutiva (deed of
incorporation).
4.02.
Equity Capital of
the Pipeline SPC . The equity
capital of the Pipeline SPC, as of this date, is P$50,706,000.00
Pesos, which correspond totally to the fixed part, divided into a
total number of 50,706 common, voting shares with a face value of
P$1,000.00 Pesos each, as follows:
4.02.1 The Pipeline
Company, 25,353 shares equivalent to 50% of the equity capital of
the Pipeline SPC, and
4.02.2 MGN, 25,353 shares equivalent to 50% of the equity capital
of the Pipeline SPC.
4.03.
Equity Capital of
Terminal SPC . The equity
capital of the Terminal SPC, as of this date, is P$21,080,000.00
Pesos, which correspond totally to the fixed part, divided into a
total number of 21,080 common, voting shares with a face value of
P$1,000.00 Pesos each, as follows:
4.03.1
The Terminal Company, 10,540 shares equivalent to 50% of the equity
capital of the Terminal SPC, and
4.03.2 MGN, 10,540 shares equivalent to 50% of the equity capital
of the Terminal SPC.
| 4.04.
|
Initial
Capitalization of the Project Entities .
|
| |
| |
4.04.1
|
Each Project Entity
has been initially capitalized pursuant to the
following:
|
| |
| |
|
(i) On June 22
2006, and December 13 2006, MGN, the pertaining Company
and
|
| |
| |
each Project Entity
entered into an agreement, whereby each Project Entity acknowledged
the expenses incurred by MGN and the pertaining Company during the
initial stages of the Project, and recognized such expenses as an
indebtedness of the respective Project Entity toward each of MGN
and the applicable Company. A copy of the referred agreements is
attached hereto as
|
| |
Exhibit
4.04.1 ;
|
| |
7
Joint Venture Agreement
| |
|
(ii) |
Deriving
from the execution of the agreements referred to in the
immediate |
| |
|
preceding paragraph, each of MGN and the corresponding
Company capitalized in June 24, |
| |
|
2006 and December 15, 2006, its pro-rata portion of such
indebtedness in each Project Entity. |
| |
|
The By-laws of each Project Entity shall be amended in
order to transform its shares to shares |
| |
|
with a face value of P$1.00 Peso each;
|
| |
| |
|
(iii) |
Deriving
from the capitalizations referred to in the immediate paragraph,
the |
| |
|
equity capital of the Project Entities correspond to the
amounts set forth in Sections 4.02 and |
| |
|
4.03
above. |
|
| |
| |
| 5. |
Capitalization of the Companies. |
| |
| |
5.01. |
Capitalization of the Companies . Each
Company has been initially capitalized pursuant to the
|
| following: |
|
|
| |
| |
|
(i)
|
On June 23
2006, and December 14 2006, the Companies increased their
equity |
| |
|
capital and issued shares in favor of MGN and GLFE. Such
capital increase resolutions were |
| |
|
subject to the condition precedent consisting that the
same would not become effective unless |
| |
|
and until the date of execution of this Agreement. Given
the above and that the condition |
| |
|
precedent has been complied by the execution hereof, the
participation of the Parties in each of |
| |
|
the Companies is as set forth in Section 3.02 and 3.03
below; |
| |
| |
|
(ii) |
Deriving
from the capitalizations referred to in the immediate paragraph,
the |
| |
|
equity capital of the Companies correspond to the amounts
set forth in Sections 3.02 and 3.03 |
| |
|
above. |
|
| |
5.02.
|
Subsequent
Capitalizations during FY 2007 and FY 2008 . The Parties
hereto acknowledge that GLFE has contributed an amount equal to
$1,448,395.92 Dollars in cash and restricted stock of GLFE to be
destined to the Project. From such amount, as of this date, the
amount of P$8,621,000.00 Pesos has been used and contributed to the
Companies as equity capital. The remainder of the amount not used
as of this date, shall be destined for future capital increases of
the Companies as capital calls become necessary, provided that at
all times, the equity percentage in the Companies shall be 76% for
MGN and 24% for GLFE. The corresponding Shares of each Company
shall be issued to GLFE promptly after the respective
Shareholders’ Meeting of each Company shall have approved the
pertaining equity capital increases.
|
| |
| 6.
|
Business of
the Companies.
|
| |
| |
6.01.
|
Companies’
Business . The business of
each Company shall be the holding of shares representative of
the equity capital of each of the Pipeline SPC and of the Terminal
SPC, as applicable.
|
| |
8
Joint Venture Agreement
6.02.
Related
Transactions . The business of
each Company shall at all times be conducted on arm’s length
commercial terms, but subject thereto each Company may transact
business with the Shareholders or any Affiliates thereof.
Notwithstanding the foregoing:
6.02.1 each
Shareholder (or its corresponding Affiliate) shall, in all dealings
with each Company, offer to do business on terms that are
consistent with, and no less favorable than, those used in
comparable situations with the customers of such Shareholder or its
Affiliates;
6.02.2 each Company
shall have the right to request private competitive tenders for
products and services. Provided that to the extent that the
Shareholder or its Affiliate can provide the quality of work
required for the applicable project as determined by the Board,
such Shareholder or its Affiliate shall have the opportunity to bid
for such services and to negotiate directly (on arm’s length
commercial terms) with a Company in the understanding that, if
after negotiating, no agreement is reached between such Shareholder
(or its corresponding Affiliate) and a Company, such Company will
be free to award any contract to any third party bidder.
| 7.
|
Directors and
Management of the Companies.
|
| |
| |
7.01
Responsibility of
Board . The Board shall
be responsible for supervising the activities of each Company and for
determining management positions and responsibilities and the
overall policies and objectives of each Company. Except for those
matters which are the exclusive responsibility of the
Shareholders’ Meeting pursuant to Mexican law, the Board may
delegate its authority, including the day-to-day running of the
business of each Company, to a General Director, if any, to be
appointed by the Board.
|
|
7.02
Directors
. Each
of the Companies shall have a Board of up to ten (10) Directors.
Every Shareholder (or group thereof) holding at least 10% of a
Company’s Shares shall be entitled to appoint one Director
for every such 10%.
7.03.
Board
. The
initial Board of each Company, to be appointed during the
Shareholders’ Meeting referred to under Clause
2.02 , shall consist of
four Directors, as follows:
7.03.1 Pipeline Company:
|
GLFE Proprietary Director
MGN Proprietary Directors
7.03.2 Terminal Company:
GLFE
Proprietary
Director
|
GLFE Alternate
Director
MGN Alternate
Directors
GLFE Alternate
Director
|
MGN Proprietary
Directors
MGN Alternate
Directors
9
Joint Venture Agreement
| 7.04.
|
Election of
Directors .
(SAPI)
|
| |
| |
7.04.1 Each Party
agrees that it shall vote its Shares and take all other necessary
action in order to ensure that the
Director nominees of each Shareholder are elected to the
Board.
|
|
7.04.2 Each Party
agrees that if, at anytime, it is then entitled to vote for the
removal of any Director, it shall not vote any of its Shares in
favor of the removal of any Director who shall have been elected
pursuant to this Clause
7.04 , unless such
removal shall be for cause or the Shareholder entitled to nominate
such Director shall have requested or consented to such removal in
writing.
7.04.3 Each Party
agrees to vote in favor of any request by a Shareholder to remove a
Director nominated by such requesting Shareholder. Removal
“for cause” shall mean removal of a Director because of
such Director’s willful and continued failure to
substantially perform his or her duties with the corresponding
Company in his or her established position, or because of such
Director’s conviction for, or guilty plea to, a felony or a
crime involving moral turpitude.
7.05.
Chairman
. During
the Shareholders’ Meeting referred to under
Clause
2.02 , the Chairman of
each Company shall be elected by majority vote of the Shareholders
of each Company in an Ordinary Shareholders’ Meeting. The
first Chairman of each Company will be Fernando Calvillo Alvarez.
The Chairman shall have a one-year term and may be re-nominated and
reelected at the expiration of such term.
7.06.
Vacancies
. If, as
a result of death, disability, retirement, resignation, removal
(with or without cause) or otherwise, there shall exist or occur a
vacancy on the Board, then the Party entitled to nominate such
Director whose death, disability, retirement, resignation or
removal resulted in such vacancy may nominate another individual to
fill such capacity and serve as a Director, and the other Party
agrees that it shall vote its Shares in order to ensure that such
nominee be elected to the Board. (SAPI)
7.07.
Manner of
Nomination and Removal . The Directors
shall be appointed and removed according to the By-laws and
applicable law. The Secretary will be authorized to call a
Shareholders’ Meeting immediately upon a vacancy of a
proprietary or alternate Director.
7.08.
Quorum for Board
Meetings . All meetings of
the Board shall be called by the Chairman. The quorum for all
Meetings of the Board shall be when at least 50% of the proprietary
or their respective alternate Directors are present. Alternate
Directors may attend all Board meetings, but they shall not be
counted for purposes of quorum (both installation and voting) if
the corresponding proprietary Director is also present at such
meeting. The Secretary and the Statutory Auditor may attend all
Board meetings, with the right to speak but not to vote, and they
shall not be counted for quorum purposes. If the Board so
authorizes or requests, Auditors, consultants, legal counsel,
advisers and employees shall also be permitted to attend and speak
at meetings of the Board, but not to vote.
10
Joint Venture Agreement
7.09.
Voting
. Each
Director shall be entitled to one vote. All actions to be taken by,
and all decisions of the Board, shall be identified in writing and
noticed for a meeting of the Board. In order for Board resolutions
to be validly adopted and binding upon the corresponding Company,
they shall require the affirmative vote of the majority of
proprietary or their respective alternate Directors present at the
corresponding meeting of the Board.
| 7.10.
|
Location of
Meetings .
|
| |
| |
7.10.1 The Board
shall meet in Mexico City, Mexico, or such other locati
|
|