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Exhibit 2.5
ACQUISITION OF INFOSEL
AGREEMENT FOR THE PURCHASE/SALE OF CORPORATE STOCK
Pursuant to the following recitals and clauses, this Agreement (hereinafter
referred to as "the Agreement") has been entered into this 5th day of October
1999, between the following parties:
Inversiones Grupo Reforma, S.A. de C.V., a corporation formed and existing in
accordance with the laws of Mexico (hereinafter referred to as "Inversiones")
and Consorcio Interamericano de Comunicacion, S.A. de C.V., a corporation formed
and existing in accordance with the laws of Mexico (hereinafter referred to as
"CICSA"). Both of these corporations are represented hereunder by the attorney
Xxxxxxxxx Xxxxx de la Xxxx Xxxxxxxx, a Mexican citizen, who also appears here on
his own behalf (hereinafter referred to as "Xx. Xxxxx"), the attorney Xxxxx
Xxxxxxx Xxxxx Xxxxxx, a Mexican citizen (hereinafter referred to as "Xx.
Xxxxx"), and Xxxxxxx Xxxxx Xxxxx, also a Mexican citizen (hereinafter referred
to as "Xx. Xxxxx Xxxxx") (hereinafter, Inversiones, CICSA, Xx. Xxxxx, Xx. Xxxxx,
and Xx. Xxxxx Xxxxx shall be referred to collectively as the "Sellers"); and
Terra Networks Mexico, S.A. de C.V., a corporation formed and existing in
accordance with the laws of Mexico (hereinafter referred to as the "Purchaser"),
represented by Xxxxxx de Xxxxx Xxxxxx Xxxxxxxxx.
Also appearing here is Editora El Sol, S.A. de C.V., a corporation formed and
existing in accordance with the laws of Mexico (hereinafter referred to as
"Editora El Sol") and represented by Xxxxxxxxx Xxxxx De la Xxxx Xxxxxxxx for the
purposes mentioned subsequently herein.
RECITALS
1. The Sellers hereby declare that:
A. They are the rightful and registered owners of fully paid-up shares of common
stock with a par value of 1.00 peso (one peso of national currency),
representing the capital stock of Informacion Selectiva, S.A. de C.V.
("INFOSEL"), in accordance with the number of shares and characteristics
described below:
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Shareholders Series "A" Series "B" Capital Stock Par Value Percentage
Shares Shares (in pesos)
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Inversiones Grupo Reforma,
S.A. de C.V 2,502,550 20,180,000 22,682,550.00 93.9540
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Consorcio Interamericano
de Comunicacion, S.A. de
C.V 1,457,195 1,457,195.00 6.0359
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Xxxxxxxxx Xxxxx de la Xxxx
Xxxxxxxx 1450 1,450.00 0.0060
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Xxxxx Xxxxxxx Xxxxx Xxxxxx 500 500.00 0.0021
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Xxxxxxx Xxxxx Xxxxx 500 500.00 0.0021
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Total: 2,505,000 21,637,195 24,142,195.00 100.00
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B. They wish to enter into this Agreement for the purpose of transferring all of
the Shares, as defined in the Chapter on Definitions hereof, to the Purchaser,
subject to the terms and conditions provided herein.
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II. Through its legal representative, Inversiones hereby declares that:
A. Inversiones is a Mexican corporation formed in accordance with Notarial
Document No. 2,128, executed before Xxxxxx X. Xxxxxx Xxxxx, Notary Public No. 19
for the City of Monterrey, Nuevo Xxxx, on September 21, 1999. The first
certified copy of that notarial document was duly recorded in the Public
Registry of Real Estate and Commerce of the City of Monterrey, Nuevo Xxxx, under
No. 2,526, Vol. 431, Book No. 3, Second Ledger, Documents of Commercial
Associations, Commercial Section, on September 30, 1999.
B. Inversiones' legal representative has the necessary and sufficient authority
to enter into this Agreement, and such authority has not been revoked or limited
as of the date of the execution hereof.
III. Through its legal representative, CICSA hereby declares that:
A. CICSA is a Mexican corporation formed in accordance with Notarial Document
No. 38,775, executed before Xxxxxx Xxxxxx Xxxxxx, Notary Public No. 62 for the
City of Xxxxx Xxxxxx, Nuevo Xxxx, on October 5, 1992. The first certified copy
of that notarial document was duly recorded in the Public Registry of Real
Estate and Commerce of the City of Monterrey, Nuevo Xxxx, under No. 2796, Page
67, Vol. 386, Book No. 3, Second Ledger, Documents of Commercial Associations,
Commercial Section, on October 15, 1992.
B. CICSA's legal representative has the necessary and sufficient authority to
enter into this Agreement, and such authority has not been revoked or limited as
of the date of the execution hereof.
IV. Through its legal representative, Editora El Sol hereby declares that:
A. Editora El Sol is a Mexican corporation formed in accordance with Notarial
Document No. 49, executed before Xxxxxxx X. Xxxxxx on March 15, 1937. The first
certified copy of that notarial document was duly recorded in the Public
Registry of Real Estate and Commerce of the City of Monterrey under No. 75, Page
59, Vol. 87, Book No. 3, Second Ledger, Commercial Section, on April 27, 1937.
B. Editora El Sol's legal representative has the necessary and sufficient
authority to enter into this Agreement, and such authority has not been revoked
or limited as of the date of the execution hereof.
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V. Xx. Xxxxx hereby declares on his own behalf that:
A. He has the legal personality and capacity to contract that are
necessary in order to enter into this Agreement.
VI. Xx. Xxxxx hereby declares on his own behalf that:
A. He has the legal personality and capacity to contract that are
necessary in order to enter into this Agreement.
VII. Xx. Xxxxx Xxxxx hereby declares on his own behalf that:
A. He has the legal personality and capacity to contract that are
necessary in order to enter into this Agreement.
VIII. Through its legal representative, the Purchaser hereby declares that:
A. The Purchaser is a Mexican corporation formed in accordance with Notarial
Document No.6,232, executed before Xxxxxxx Xxxxxxxx Xxxxx, Notary Public No. 123
for the City of Monterrey, Nuevo Xxxx, on September 10, 1999. The first
certified copy of that notarial document was duly recorded in the Public
Registry of Real Estate and Commerce of the City of Monterrey, Nuevo Xxxx, under
No. 2468, Page (no number), Vol. 431, Book No. 3, Second Ledger, Documents of
Commercial Associations, Commercial Section, on September 23, 1999.
B. On this date, the special meeting of shareholders of the corporation resolved
to change the corporation's name from Terra Network, S.A. de C.V. to Terra
Networks Mexico, S.A. de C.V. On this date, the special meeting was duly reduced
to writing by means of Notarial Document 6,290, executed before Xxxxxxx Xxxxxxxx
Xxxxx, Notary Public No. 123 for the City of Monterrey, Nuevo Xxxx. The first
certified copy of that notarial document is pending registration in the Public
Registry of Real Estate and Commerce of the City of Monterrey, Nuevo Xxxx.
C. The Purchaser wishes to acquire all of the Shares as defined in the Chapter
on Definitions hereof, to the Purchaser, subject to the terms and conditions
provided herein.
D. The Purchaser's legal representative has the necessary and sufficient
authority to enter into this Agreement, and such authority has not been revoked
or limited as of the date of the execution hereof.
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DEFINITIONS
For the purposes of this Agreement, unless otherwise expressly provided herein,
the terms, phrases, and words listed below shall have the meaning indicated:
"Shares" refers to the 2,504,999 registered shares of Series "A" common stock
and the 21,637,195 registered shares of Series "B" common stock collectively
representing the capital stock of INFOSEL, each of which has a par value of 1.00
peso (one peso of national currency), and all of which have been fully
subscribed and paid up by the Sellers and shall be sold to the Purchaser subject
to the terms and conditions hereof.
"Necessary Assets" shall include any and all assets owned by INFOSEL as of June
30, 1999 as well as those held as of this date, which are necessary for the
fulfillment of INFOSEL's corporate purpose as INFOSEL has fulfilled it to date,
including but not limited to the following assets:
Exhibit 1: Contracts, agreements, commitments, and proposals pending as of this
date, including but not limited to standing purchase orders with
providers, as well as pending purchase orders; leases; sureties for
leases; licenses; franchises; content contracts, distribution,
commercial agency, services, agency, or any other contract; and,
with respect to each and every one of the items contained in each
category mentioned above, a specification [shall be included] as to
whether the consent of any third party is required in order to carry
out the transactions envisioned hereby;
Exhibit 2: Tangible assets, property of INFOSEL (other than those indicated in
Exhibit 6), including the real estate, inventories, equipment,
tools, chattel, furniture, improvements, vehicles, buildings, and
accessories, specifying the location of such assets;
Exhibit 3: (a) Insurance policies in force and without limiting the scope
thereof, any and all insurance policies that cover the civil
liability of INFOSEL, its properties, buildings, machinery,
furniture, accessories, and operations, indicating for each policy
the name of the insurer, type of coverage, term of the policy,
liability limits, and annual premium, and (b) surety bonds executed
by INFOSEL, and (c) any and all claims pending for INFOSEL
concerning any damages or losses with respect to goods or revenues
that have been communicated to the insurers.
Exhibit 4: Reimbursable deposits, prepaid expenses, and deferred expenses
pertaining to INFOSEL;
Exhibit 5: Any and all loans or advance payments executed by INFOSEL to any
person;
Exhibit 6: Any and all of the real estate leased by INFOSEL.
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Exhibit 7: "Intellectual Property," which shall refer to any and all title
deeds, rights of use and/or exploitation of any and all:
7.1 Inventions, patents, utility patents, industrial designs that have
been obtained or are in progress, as well as any and all
improvements that have been made on the same or are in progress
until the date of execution hereof and that are the property of
INFOSEL or to which INFOSEL has some type of right, including but
not limited to all of the improvements listed in Exhibit 7.1, which
forms an integral part hereof.
7.2 Trademarks, names, and commercial slogans, domain names, whether
registered or not, as well as all pending applications for the
registration of any of these, including but not limited to all of
those listed in Exhibit 7.2, which forms an integral part hereof.
7.3 Copyrights on any type of creative work, fictional character,
drawing, image, computer interface, database, etc., whether
registered or not, to which INFOSEL has any property right, whether
direct or indirect, including but not limited to all of those listed
in Exhibit 7.3, which forms an integral part hereof.
7.4 Computer programs, including all computer programs owned by INFOSEL,
regardless of form, language, or code, including but not limited to
all of those listed in Exhibit 7.4, which forms an integral part
hereof.
7.5 Trade Secrets: This term shall include all information that is
confidential and valuable for the purpose of fulfilling INFOSEL's
corporate purpose and is owned by INFOSEL, whether developed
directly by INFOSEL or acquired through any legal means, as well as
all know-how necessary for the operation thereof. Trade secrets
shall include, but shall not be limited to, strategic business
information; financial, market, and promotional information;
business plans and information; processes and technical information;
administrative information; price, supplier, and customer lists;
among others, including but not limited to all of those listed in
Exhibit 7.5, which forms an integral part hereof.
Exhibit 8: All federal, state, and local licenses and permits, as well as those
from foreign governments, that are necessary in order to fulfill
INFOSEL's corporate purpose or for the purposes of using and
occupying the real estate owned by INFOSEL or the properties leased
thereby ("Permits"); all authorizations, orders, federal, state, and
local, foreign, and court decrees that relate to INFOSEL, pursuant
to which INFOSEL operates or is bound; all inspection reports
concerning INFOSEL and its properties as of this date, in accordance
with all applicable laws and regulations, whether federal, state, or
local, regarding health and safety; as well as copies of everything
mentioned above and the corresponding applications;
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"Business-to-business" refers to electronic business transactions that are
carried out between companies over the Internet.
"Business-to-consumer" refers to electronic business transactions that are
carried out between companies and consumers over the Internet.
"CICSA" shall have the meaning indicated in the introductory paragraph hereof.
"Purchaser" shall have the meaning indicated in the introductory paragraph
hereof.
"Consumer-to-consumer" refers to electronic business transactions that are
carried out between consumers over the Internet.
"Agreement" shall have the meaning indicated in the introductory paragraph
hereof.
"Necessary Agreements" refers to all agreements, contracts, and other
proceedings that have been duly executed by INFOSEL, as well as any other
agreements, contracts, and other proceedings that have been carried out by
INFOSEL as of June 30, 1999 and as of this date, that are necessary in order to
fulfill the corporate purpose of INFOSEL as INFOSEL has fulfilled it to date and
are fully in force on the execution date hereof, all of which are described by
way of enumeration and not limitation in Exhibit "1," which is attached hereto.
"Indemnified Damages" shall have the meaning assigned to that term in point 6.5
of Clause Six hereof.
"Income Tax Returns" refers to all statements, reports, calculations,
informational statements, and statements of any nature which INFOSEL must submit
to any governmental agency or office with respect to the revenues, properties,
or operations of INFOSEL's Subsidiary.
"Business Day" or "Business Days" refers to any day other than Saturday, Sunday,
or a day on which the banks are permitted to close in the City of Monterrey,
Nuevo Xxxx, Mexico.
"Incorporation Papers," with respect to INFOSEL, Inversiones, or CICSA, refers
to their respective certificates of incorporation or articles of incorporation,
as amended, as well as their respective corporate bylaws and any other
incorporation documents.
"Dollar" or "dollars" shall refer to the legal tender of the United States of
America.
"Financial Statements" shall refer to the financial statements of INFOSEL
referred to by Clause 4.15 and the following provisions hereof.
"GAAP" refers to the Generally Accepted Accounting Principles in Mexico.
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"Lien" or "Liens," with respect to INFOSEL's Shares or necessary assets, where
applicable, refers to any mortgage, claim, option, encumbrance, pledge, burden,
guarantee, shareholders' agreement, assignment, obligation to pay money, or any
other consideration, subordination to any right or claim of any other person,
encumbrance, limitation on ownership, or any other right of any kind that
restricts the ownership of the Shares or the Necessary Assets of INFOSEL.
"INFOSEL" refers to Informacion Selectiva, S.A. de C.V., a Mexican corporation
duly incorporated in accordance with the laws of Mexico.
"Internet" refers to the network formed by millions of computers or servers that
are interconnected worldwide by means of telephone cables or by other means and
that purchase compatible digital communication protocols and constitute a
bi-directional and interactive mode of electronic exchange and distribution of
digital materials, such as text and hypertext, sound, video, animation, and
software, as well as electronic mail services, access to information databases,
electronic commerce, consulting services, and communication services in general,
among other applications.
"Investments" shall have the meaning indicated in the introductory paragraph
hereof.
"Xx. Xxxxx" shall have the meaning indicated in the introductory paragraph
hereof.
"Xx. Xxxxx" shall have the meaning indicated in the introductory paragraph
hereof.
"Mexico" refers to the United States of Mexico.
"Corporate purpose of INFOSEL" refers to Internet services for the residential
and "Small Office, Home Office" ("SOHO") segments, known as "ISP's" (Internet
service providers), and a "portal" (Internet site with integrated content,
communication, community, and electronic commerce services, including both
"business-to-consumer" and "consumer-to-consumer" services), Financial
Information Services via Electronic Media (which shall be defined below) and
"business-to-business" electronic commerce services; all such services that
focus on residential, SOHO, financial, and corporate markets in Mexico.
"Parties" refers to the Sellers and the Purchaser.
"Peso" or "pesos" refers to the legal tender of Mexico.
"Portal" refers to an integral Internet site that functions to provide Internet
users with integrated content, communication, community, and electronic commerce
services in the form of business-to-consumer or consumer-to-consumer services.
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"Purchase price" refers to the amount of US $60,000,000.00 (sixty million
dollars) of United States legal tender.
"Judicial Proceedings" shall have the meaning defined in Clause 4.11 hereof.
"Financial Information Services via Electronic Media" refers to information
services (especially but not limited to news, prices and quotes, analyses and
commentaries, tools, and databases) pertaining to the financial markets in which
such information is gathered directly from the sources that generate it (stock
exchanges, financial intermediaries, news agencies, etc.), which are processed
and distributed via telecommunication networks and computer equipment.
"SOHO" or "Small Office, Home Office" refers to the segment of Internet users
consisting of small offices or offices located in private homes.
"Xx. Xxxxx Xxxxx" shall have the meaning indicated in the introductory paragraph
hereof.
"Subsidiaries." INFOSEL owns all or part of the shares representing the capital
stock of Infoshare Communications, Inc., Interdata Infosel, S.A. de C.V.,
Seguridata Privada, S.A. de C.V., in accordance with the number of shares and
percentages indicated below, which shares are totally subscribed, paid up, and
free of any lien or encumbrance. With the exception of the Subsidiaries, INFOSEL
has no other subsidiaries, does not own shares in any other corporation, and is
not a partner in or associate of any professional partnership,
charitable/non-profit organization, or joint venture.
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Issuing Corporation Number of Shares Percentage of Capital Stock
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Infoshare
Communications, S.A. 10 100%
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Interdata Infosel, S.A.
de C.V. 1000 50%
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Seguridata Privada,
X.X.xx C.V. 100 10%
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"Sellers" shall have the meaning indicated in the introductory paragraph hereof.
By virtue of the foregoing recitals and definitions, the parties have agreed to
execute this Agreement subject to the following:
CLAUSES
ONE: Sale
On this date, the Sellers hereby sell, assign, and transfer to the Purchaser,
and the Purchaser hereby acquires from the Sellers, all of the Shares duly
defined in the Chapter on Definitions hereof, in accordance with the following
share distribution:
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Shareholders Series "A" Series "B" Capital Stock Par Value Percentage
Shares Shares (in pesos)
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Inversiones Grupo Reforma,
S.A. de C.V 2,502,549 20,180,000 22,682,549.00 93.9540
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Consorcio Interamericano
de Comunicacion, S.A. de
C.V 1,457,195 1,457,195.00 6.0359
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Xxxxxxxxx Xxxxx de la Xxxx
Xxxxxxxx 1450 1,450.00 0.0060
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Xxxxx Xxxxxxx Xxxxx Xxxxxx 500 500.00 0.0021
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Xxxxxxx Xxxxx Xxxxx 500 500.00 0.0021
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Total: 2,504,999 21,637,195 24,142,194.00 100.00
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TWO: Purchase Price
The total purchase price of the Shares is US $60,000,000.00 (sixty million
dollars) in legal tender of the USA. The price is hereby distributed to each
Seller based on the percentage of his shareholdings in INFOSEL and is hereby
paid to them in the amounts indicated below:
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Seller Price Received by each Seller
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Inversiones Grupo Reforma, S.A. de
C.V. US $56,372,380.37
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Consorcio Interamericano de
Comunicacion, S.A. de C.V. US $3,621,530.68
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Xxxxxxxxx Xxxxx de la Xxxx Xxxxxxxx US $3,603.65
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Xxxxx Xxxxxxx Xxxxx Xxxxxx US $1,242.64
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Xxxxxxx Xxxxx Xxxxx US $1,242.64
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Total US $60,000,000.00
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The Purchaser hereby delivers to each Seller the purchase price corresponding to
each Seller in accordance with the above diagram, and the Sellers hereby accept
the price to their full satisfaction. This Agreement serves as the most
sufficient receipt permissible by law.
In accordance with the provisions of Article 103 of the Income Tax Law, the
amounts delivered to Xx. Xxxxx, Xx. Xxxxx, and Xx. Xxxxx Xxxxx for the
aforementioned purchase are subject to withholding by the Purchaser at a rate of
20% of the purchase price corresponding to the Sellers. The Purchaser hereby
delivers to Xx. Xxxxx, Xx. Xxxxx, and Xx. Xxxxx Xxxxx proof of the respective
withholding.
THREE: Endorsement of Shares
On this date, the Sellers simultaneously execute the endorsements transferring
title to the definitive certificates representing the Shares, as applicable, in
favor of the Purchaser.
Likewise, Inversiones hereby executes the endorsement transferring title to
definitive share certificate No. 5-A, which represents one registered share
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of Series "A" common stock with a par value of 1.00 peso (one peso) and
represents INFOSEL's minimum equity invested in fixed assets, in favor of the
company Terra Networks, S.A., and hereby transfers that share free of any and
all Liens.
FOUR: Sellers' Representations and Warranties
The Sellers hereby represent and warrant the following:
4.1 Ownership of the Shares. The Sellers are the sole legitimate owners of their
respective Shares, which are free of any and all encumbrances, and the Sellers
are recognized as the holders of title of such Shares in INFOSEL's Register of
Shares.
4.2 Subscription and Effect. This Agreement constitutes valid and enforceable
obligations for the Sellers. Neither the subscription hereof nor the fulfillment
by the Sellers of any of the provisions contained herein shall (i) violate,
result in a conflict with or the nonperformance, early termination, or
rescission of any contract, commitment, or obligation, or any other contract to
which INFOSEL or its Subsidiaries are a party or by which INFOSEL, its
Subsidiaries, properties, or assets are bound; (ii) violate, result in a
conflict with or the nonperformance, early termination, or rescission of any
contract, commitment, or obligation, or any other contract to which the Sellers
are a party or by which their properties or assets are bound, the violation or
nonperformance of which might give rise to a right of any third party to the
Shares; (iii) violate any law or regulatory provision to which INFOSEL or the
activities it engages in as part of its business and corporate purpose are
subject, or violate, result in a conflict with or the nonperformance of owing to
the revocation or early termination of any license, authorization, concession,
or permit under which INFOSEL carries out its corporate purpose; (iv) violate
any provision of the Incorporation Papers of INFOSEL, Inversiones, or CICSA; or
(v) result in the creation of any Lien (or any obligation to create any Liens)
on the properties or Necessary Assets of INFOSEL.
4.3 Outstanding Shares. Any and all Shares that have been issued and are
outstanding and represent the capital stock of INFOSEL have been duly paid up
and are free of any and all Liens. Moreover, said shares have not been issued or
transferred in the past so as to infringe on any preferential right or other
applicable right under the provisions of any law or agreement. There is no call
option, guarantee, other obligation, or other contract that grants any rights to
any third parties with respect to said shares. Furthermore, INFOSEL has no
convertible or exchangeable securities that upon conversion or exchange would
require the issuance of additional shares of or the assumption of debts for
INFOSEL or the issuance of other securities that could be converted into shares
of INFOSEL.
4.4 Warranty of Title. The Sellers, as applicable, assume joint and several
liability for defending, totally indemnifying, and holding
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harmless the Purchaser for and on account of any and all actions, demands,
proceedings, claims, liabilities, lawsuits, expenses and costs, including
reasonable attorneys' fees and expenses that might result if any person or
corporation were to provide conclusive evidence of that person or corporation's
interest in or right to the shares.
4.5 Ownership of the Necessary Assets to Carry out INFOSEL's Corporate Purpose.
INFOSEL is the legal owner of the Necessary Assets, which are free of any and
all types of Liens, encumbrances, and restrictions. Said assets are in good
order and repair and the property of INFOSEL as of the date hereof.
4.6 Formation. INFOSEL is a corporation that was duly formed, exists
legitimately, and complies with the laws of Mexico and the state and county in
which it is domiciled.
4.7 Powers, Authorizations, and Licenses. INFOSEL and its Subsidiaries have all
of the powers, authorizations, licenses, concessions, and permits that are
necessary in order to fulfill its corporate purpose legally and complete the
proceedings provided for herein. Moreover, INFOSEL and its Subsidiaries are in
compliance with the terms, conditions, duties, and obligations to which they are
subject in accordance therewith.
4.8 Necessary Agreements to Carry out INFOSEL's Corporate Purpose. INFOSEL duly
executed all Necessary Agreements for the purpose of carrying out its activities
as it has carried them out to date, without breaching or defaulting on any of
them.
4.9 Corporate Power. INFOSEL has the powers and authorities that are necessary
in order to execute and perform each and every one of the Necessary Agreements
described in Exhibit 1, as well as to carry out the transactions provided for
thereby. The execution, completion of the legal formalities of, and performance
of said Agreements have been duly authorized by all of the corporate resolutions
that may be required.
4.10 Subsidiaries. The Subsidiaries are corporations that have been duly formed
in accordance with the laws of the place of formation, and INFOSEL is the sole
owner and registered holder of title of the shares described in the definition
of Subsidiaries provided for herein.
4.11 Ongoing Litigation. With the exception of those cases indicated in List
4.11, no actions, claims, demands, lawsuits, or governmental, judicial,
employment-related, tax, administrative, or arbitration proceedings ("Judicial
Proceedings") are in progress or have been threatened against or regarding
INFOSEL, the Shares, or INFOSEL's Subsidiaries.
4.12 Delivery of the Exhibits and Lists Mentioned In this Agreement. The Sellers
have delivered or made available to the Purchaser the Exhibits and Lists
referred to in
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this Agreement in a complete, correct, and detailed manner, as well as true and
complete copies of the documents and other materials that are necessary to
describe all of the Necessary Assets and Necessary Agreements that are duly
described and defined in the chapter of definitions hereof, in addition to the
following:
List "4.12": (A) The name, current annual compensation (including bonuses and
commissions), position, current base-salary wage scale, bonuses received,
workers' compensation calculations, leave pay, INFOSEL organizational charts,
format of contracts for individual employment or administrative, legal, or
consulting services.
(B) every employee benefit plan, bonus plan, and any other agreement, plan, or
arrangement for deferred compensation, whether sponsored or maintained by
INFOSEL or to which INFOSEL makes contributions;
(C) the value of retirement liabilities that are not covered, including health
protection, insurance for medical expenses, and that are derived from any plan,
fund, or arrangement pertaining to those indicated in subsections (A), (B), or
(C) of this Clause; and
(D) copies of all collective bargaining agreements.
(E) insurance policies for the personnel and partners.
(F) ongoing legal actions, lawsuits, or claims.
4.13 There are no encumbrances. Except as indicated in List 4.13, INFOSEL is the
lawful owner of all of its properties, Necessary Assets, and Necessary
Agreements, as well as all other rights that do not constitute real estate, free
and clear of any Liens and encumbrances.
4.14 Real Estate. Except as indicated in List 4.14, all buildings,
constructions, improvements, and accessories that are used in order to fulfill
INFOSEL's Corporate Purpose and are owned or leased by INFOSEL are in
sufficiently good order and repair to allow the business constituting said
Corporate Purpose to continue to be carried out in a manner consistent with past
practices. Moreover, with the exception of normal wear and tear, there are no
defects in said buildings, constructions, improvements, and accessories that
would hinder their daily use by the Purchaser or subject the Purchaser to any
liability under the applicable laws.
4.15 Financial Statements.
4.15.1 The Sellers have provided the Purchaser with copies of the
most recent audited balance sheets, income statements,
shareholders' equity
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statements and cash flow statements of INFOSEL as of June 30,
1999 (collectively referred to as the "Financial Statements"),
which are attached hereto as List 4.15.1. Each of said
financial statements forms an integral part hereof on a
consolidated basis. Unless otherwise indicated therein, said
financial statements are complete and correct, were developed
in accordance with the GAAP, were used consistently during the
periods indicated, and fairly reflect the financial situation
of INFOSEL on said dates;
4.15.2 There are no liabilities, debts, obligations, or claims of any
kind against INFOSEL, whether absolute or contingent, which
involve or relate to the Necessary Assets and Necessary
Agreements, with the exception of (i) to the extent indicated
or for which liabilities, debts, obligations, or claims there
is a reserve in the balance sheet on June 30, 1999; (ii) any
liabilities, debts, obligations, or claims specifically
described and identified as an exception to this section in
any of the Exhibits and Lists delivered to the Purchaser in
accordance herewith; (iii) any liabilities, debts,
obligations, or claims that have been incurred as of June 30,
1999 in INFOSEL's normal course of business and that are
consistent with past practices; or (iv) pending purchase or
sale orders or contracts for the delivery of services in the
normal course of business, provided that INFOSEL is not in
breach of any of them.
4.15.3 [The Seller has provided the Purchaser with a copy of
INFOSEL's balance sheet as of the date of the execution
hereof. Said balance sheet was duly certified by INFOSEL's
Manager of Finance and accurately reflects INFOSEL's financial
status immediately prior to the execution hereof.]
4.16 Tax Matters. For the purposes of this Agreement, "Tax or Taxes" shall refer
to any income, gross revenue, profit, franchise, license, transfer, sales, use,
ad valorem, payroll, withholding, employment, occupation, property (real estate
or chattels), use or value-added tax, as well as other taxes, rights, fees,
contributions, or withholdings, including but not limited to Social Security
taxes, Retirement Savings System, and Infonavit [National Institute for Workers'
Housing] (including interest, penalties, and additions to such items).
4.17 Except as indicated in List 4.17:
4.17.1 All Income Tax Returns have been submitted timely;
4.17.2 All Taxes indicated on the Income Tax Returns have been paid
timely;
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4.17.3 The Income Tax Returns accurately and completely reflect the
facts regarding the revenues, properties, operations, and
status of any entity that must appear thereon;
4.17.4 The charges, accumulations, and reserves for Taxes owed or
accrued but not yet payable with respect to INFOSEL's
revenues, properties, or operations as indicated in INFOSEL's
records are sufficient to cover said taxes;
4.17.5 Concerning Taxes on INFOSEL's revenues, properties, or
operations, there are no actions, lawsuits, proceedings,
audits, or claims in progress; nor are there, to the best of
the Sellers' knowledge and belief, any investigations in
progress concerning such taxes.
4.17.6 There are no agreements to extend the period for imposing the
taxes affecting INFOSEL's revenues, properties, or operations.
4.17.7 All Income Tax Returns corresponding to the fiscal years
ending on or before December 31, 1999 have been audited for
tax purposes or are Statements with respect to which the
statute of limitations has expired once the applicable
extensions and waivers have been asserted;
4.17.8 All Taxes pertaining to INFOSEL have been covered or paid, and
no situation has arisen as a result of the audits for which
the application of similar principles would lead one to
consider the possibility of any tax claim for any year that
has not been audited.
4.18 Employment-related Matters. Each of the following facts is true for each of
the plans, funds, or arrangements that are indicated or are to be indicated in
List 4.12:
4.18.1 INFOSEL's financial statements reflect all employment-related
liabilities derived from each of said plans, funds, or schemes
in accordance with the applicable laws and regulations;
4.18.2 All plans and schemes have been accorded a favorable
resolution under the applicable laws;
4.18.3 No actions, lawsuits, or claims are ongoing, nor, to the best
of the Sellers' knowledge and belief, have any been
threatened. Moreover, the Sellers have no knowledge of any
facts that might give rise to such actions, lawsuits, or
claims.
4.18.4 The execution and performance of this Agreement by the
Sellers, and the completion of the transactions provided for
hereunder, shall not give rise to any
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obligations or liabilities (concerning benefits accrued or
otherwise) under such plans, funds, or schemes, vis-a-vis the
employees or former employees of INFOSEL;
4.18.5 INFOSEL has fulfilled all of its employment-related
obligations to its employees and the authorities, as well as
all applicable laws, individual employment contracts, and
collective bargaining agreements concerning employment matters
and practices, terms and conditions of employment, as well as
workplace safety and health. INFOSEL does not engage in any
improper employment practices. There are no actions, lawsuits,
or legal, administrative, arbitration, or other proceedings in
progress; nor, to the best of the Sellers' knowledge and
belief, have any been threatened. To the best of the Sellers'
knowledge and belief, no investigations are ongoing or have
been threatened against INFOSEL concerning the foregoing, nor
do any grounds exist for any action, lawsuit, or legal,
administrative, arbitration, or other proceeding or
governmental investigation;
4.18.6 Currently, there are no workers' strikes, labor disputes,
go-slows, or work stoppages, nor, to the best of the Sellers'
knowledge and belief, have any been threatened against
INFOSEL;
4.18.7 Currently, no grievance or arbitration proceedings derived
from or in accordance with any collective bargaining
agreements exist against INFOSEL, nor are there any grounds
for any such claims.;
4.18.8 INFOSEL has not experienced any organized work stoppages in
the past three years.
4.19 Intellectual Property. Except as indicated in List 4.19:
4.19.1 The patents, registered trademarks, business slogans,
copyrights, licenses, business names, assignments, deeds,
agreements, contracts, and other items indicated in Exhibit 7
are the property of INFOSEL, are in force, valid, and have not
been canceled, abandoned, or terminated in any other manner;
nor are they being contested or are they in conflict with any
patents, trademarks, copyrights, or business names that have
been effectively registered by any third parties;
4.19.2 The trademark and business slogan applications, pending
copyright registrations, patent applications, and other items
indicated in Exhibit 7 have been duly submitted. They have not
been rejected by any relevant authority, and they are going
through the normal registration process;
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4.19.3 INFOSEL is not in breach of any license, concession,
authorization, or agreement whereby INFOSEL has been granted a
gratuitous or onerous use of any trademarks, business slogans,
software, copyrights, confidential information, or any other
type of intellectual property, and there is no current or
imminent proceeding against INFOSEL because of any breach or
irregular compliance therewith.
4.19.4 INFOSEL has complied with the duties of secrecy and
confidentiality imposed by the various licensing, concession,
authorization, and other agreements it has executed. These
agreements are in force, and there is no current or imminent
claim because of the divulgement of any trade secrets that are
the property of any third parties or that INFOSEL or its
employees, partners, executives, or officers have used
improperly;
4.19.5 The licenses and agreements mentioned in Exhibit 7 are binding
subject to the terms thereof. None of the processes that are
currently used by INFOSEL, nor any of the properties,
products, or services contracted for, sold, or provided by
INFOSEL, nor any of the trademarks, business slogans, labels,
or other marks or copyrights used by INFOSEL, nor any of the
other items mentioned in Exhibit 7 violate the rights of any
other person or entity. Moreover, INFOSEL has not received
notice of any such violation, and the Purchaser may continue
to use such licenses and agreements in the same manner as
INFOSEL has used them.
4.20 Accounts Receivable. The accounts receivable that appear on INFOSEL's
consolidated balance sheet on June 30, 1999, as well as all accounts receivable
created as of said date, represent and shall continue to represent valid
liabilities in favor of INFOSEL, to the extent established in List 4.20 hereof.
4.21 Inventory. Except as indicated in List 4.21, INFOSEL's inventories are in
good condition and conform to the applicable specifications and warranties in
every way.
4.22 Equipment. INFOSEL's equipment and other tangible physical assets are in
good functioning order. Normal wear and tear excepted, they are in use and are
useful to INFOSEL's business at its currently activity level. Moreover, they are
in sufficiently good functioning condition to carry out INFOSEL's Corporate
Purpose as INFOSEL is carrying it out currently.
4.23 No Significant Changes. Except as indicated in List 4.23, between June 30,
1999 and the execution date hereof, there has not been any significant adverse
change in INFOSEL's financial situation, Necessary Assets and Necessary
Agreements, liabilities (fixed, contingent, or otherwise), operating results,
business, or business prospects that would cause
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INFOSEL to assume different liabilities or liabilities other than those INFOSEL
has vis-a-vis the Purchaser or Telefonica, S.A.
4.24 Absence of Changes or Events. Except as indicated in List 4.24, between
June 30, 1999 and the execution date hereof, INFOSEL has complied with its
corporate purpose exclusively in the normal course of business. Furthermore,
INFOSEL has not:
4.24.1 Incurred any absolute, accrued, contingent, or other
obligations or liabilities, whether owing now or in the
future, for a total amount exceeding US $1,000,000.00 (one
million dollars), except for liabilities or obligations that
have been incurred in the normal course of business and are
consistent with INFOSEL's usual practices, unless otherwise
agreed upon by the Parties in a faxed message confirmed in
writing.
4.24.2 Mortgaged or pledged its assets or subjected them to any
Liens, charges, guarantees, or other encumbrances or
restrictions;
4.24.3 Sold, transferred, or leased its assets to any third parties
or otherwise alienated said assets;
4.24.4 Suffered any damages, destruction, or losses (whether covered
by insurance or not) that have adversely affected INFOSEL's
business or prospects;
4.24.5 Effected any capital expenditures or capital additions or
improvements, or committed to effecting any of the foregoing,
in an amount exceeding US $1,000,000.00 (one million dollars),
unless otherwise agreed upon by the Parties in a faxed message
confirmed in writing.
4.24.6 Suffered or been threatened with the possibility of being
affected by any strikes, work stoppages, go-slows, or
lockouts;
4.24.7 Initiated any lawsuits, actions, or proceedings before any
courts or governmental offices with respect to the Assets, nor
has INFOSEL waived or handed over any rights that are valuable
to INFOSEL, with the exception of the lawsuits initiated and
the waivers and commitments granted in fulfillment of its
corporate purpose and in a manner consistent with its usual
practices;
4.24.8 Increased the compensation of its officers, employees, or
agents, either directly or indirectly, through bonuses,
pension plans, distributions of dividends, deferred
compensation, savings, insurance, retirement, or any other
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employee compensation plan, aside from reasonable amounts in
the normal course of business.
4.24.9 Declared or paid any dividends or made any capital or capital
surplus payments, nor has INFOSEL redeemed, purchased, or
acquired any shares of its own capital stock, either directly
or indirectly;
4.25 No Breach. Except as indicated in List 4.25, all of the Necessary
Agreements specified in Exhibit 1 and executed by INFOSEL, as well as all
agreements or contracts executed by INFOSEL's Subsidiaries, were duly executed
in the normal course of business. None of the following exist under any
contract:
4.25.1 Breach by INFOSEL, its Subsidiaries, or, to the best of the
Sellers' knowledge and belief, by any other party thereto; or
4.25.2 Any event which, after notice thereof has been provided or the
time has lapsed or both, would constitute a breach by INFOSEL
or its Subsidiaries, or, to the best of the Sellers' knowledge
and belief, by any other party, which would result in a right
of acceleration or would result in the loss of the rights
against the Sellers;
4.26 Suspension of Business. INFOSEL has not been subjected to suspension of
business or work.
4.27 Insurance and Sureties. All of INFOSEL's insurance policies and sureties
that are indicated in Exhibit 3 are in full force and are producing results. All
premiums pertaining to such policies and sureties corresponding to all periods
up until the execution of this contract, inclusively, have been paid. No
cancellation or termination notice has been received regarding any of those
policies. Said policies are sufficient to comply with all of the legal
requirements and all contracts to which INFOSEL is a party. Said policies are
valid, in force, and enforceable; they shall continue in full force and
producing results on the respective dates indicated in List 4.27 without any
additional premium payments. Moreover, said policies shall not be affected nor
terminate or lapse, except as indicated in List 4.27, as a result of the
transactions provided for herein. INFOSEL has not been refused any insurance
with respect to its assets or operations, nor has INFOSEL's coverage been
limited by any insurers from which INFOSEL has applied for such insurance or
with which INFOSEL has contracted for insurance in the last three years.
4.28 Consent. Except as indicated in List 4.28, no consent is required from any
person in order to carry out the transactions provided for herein, including but
not limited to consent from any parties involved in loans, contracts, leases, or
any other agreements.
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4.29 Specific Interests. Except as indicated in List 4.29, neither the members
of the Board nor the officers or managers of INFOSEL have any significant
interests in the Necessary Assets.
4.30 Compliance with Laws. Except as indicated in List 4.30.1, INFOSEL has all
of the Permits that are necessary in order to fulfill its corporate purpose, all
of which are in full force and are producing effects. INFOSEL is in compliance
with the respective terms and conditions of such permits. INFOSEL has complied
with all applicable laws, statutes, rules, regulations, judgments, orders,
bills, exemptions, and decrees, whether state or local, from the governmental,
judicial, or administrative authorities having jurisdiction over INFOSEL or its
Assets (referred to collectively as "Legal Requirements"). Except as indicated
in List 4.30.2, on the execution date of this Agreement, the transactions
provided for hereby shall not infringe on the Legal Requirements or require the
consent, approval, authorization order of the states or the governmental or
public authorities or registration or notice by INFOSEL or the Sellers with or
to the states or the governmental or public authorities.
4.31 INFOSEL's Articles of Incorporation, Bylaws, Books, and Registers. The
Purchaser has been provided with true and complete copies of INFOSEL's Articles
of Incorporation, along with proof of the necessary registrations, and INFOSEL's
Bylaws. INFOSEL's books and registers have been kept in accordance with the
applicable laws and are hereby delivered to the Purchaser.
4.32 Statements and Warranties. The statements and warranties made by the
Sellers in this Agreement, including the attached Exhibits and Lists and the
statements made in the documents (including but not limited to certifications or
other writings that the Sellers have delivered or will deliver to the Purchaser
or any of its representatives in accordance with the provisions hereof or in
connection with the transactions provided for hereby) do not and shall not
include any false statements, nor do they or shall they omit any important and
necessary facts in light of the circumstances under which they were
accomplished, so that the statements contained herein or in said documents are
not deceptive, and they shall continue to be true until the date hereof.
FIVE: Delivery of Documents
On this date, the Purchaser receives from the Sellers the following, except as
otherwise provided herein or in a written agreement by the parties:
5.1 Any other documents or copies thereof or other evidence and/or information
requested by the Purchaser. If such items exist, then they shall be issued by an
INFOSEL representative.
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5.2 Satisfactory certificates, signed by an authorized representative of
Inversiones, CICSA, Xx. Xxxxx, Xx. Xxxxx, and Xx. Xxxxx Xxxxx, dated today, for
the purposes of certifying that the Sellers warrant the following:
5.3.1 Absolute, valid, and rightful ownership of the Necessary Assets;
5.3.2 Quiet enjoyment of the Necessary Assets by the Purchaser.
5.3.3 The existence and validity of the credits referred to in the
accounts receivable.
5.3 All instruments, endorsements, proceedings, and actions taken on or prior to
the execution date hereof, documents or information connected with or relating
to the execution, delivery, and performance of this Agreement, as well as
transactions forming the subject matter thereof, shall bear the form and shall
contain the requirements requested by the Purchaser, with the understanding that
if the form or requirements requested by the Purchaser are in addition to or
different from those that are required by law, then the Purchaser shall bear the
cost thereof.
5.4 All proxies, attendance lists, and published notices of meetings, if any, as
well as any other documentation connected with the shareholders' meetings held
by INFOSEL from the date of its formation to the date of this Agreement,
including entries in INFOSEL's corporate books, with the autograph signatures of
the officers, statutory auditors, representatives, shareholders, or
shareholders' representatives, or the Sole Administrator and C.E.O. of INFOSEL,
where applicable, if such signatures are required by INFOSEL's corporate bylaws,
the applicable provisions of the General Law on Commercial Associations, or by
law.
5.5 An original, signed copy of the minutes of INFOSEL's Extraordinary
Shareholders' Meeting of October 5, 1999, in which the shareholders approve,
among other matters, a complete revision of the corporation's bylaws, including
the change in the rules governing the foreign character of the corporation by
admitting foreigners; the exclusion of stock issued for services; the
cancellation of the shares of stock that INFOSEL issued for services and were
delivered to Xxxxx Xxxxxxx Xxxxx Xxxxxx, Xxxxxx de Xxxxx Xxxxxx Xxxxxxxxx, and
Xxxxxxx Xxxxx Xxxxx, as well as those shares of stock issued for services that
remain at the disposal of the Sole Administrator and C.E.O. for any future
issues; Xxxxxxxxx Xxxxx de xx Xxxx'x resignation of his position as Sole
Administrator and C.E.O., and the appointment of the board of directors; the
revocation of all general and special powers of attorney conferred by INFOSEL
(except for certain powers of attorney) and the granting of special powers of
attorney to new representatives; as well as the cancellation of all of the
certificates representing outstanding shares, and the issue of new certificates.
5.6 A full release signed by the Sole Administrator and C.E.O., by means of
which he submitted his resignation of said position.
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5.7 The written consent granted by Xxx. Xxxx Xxxxx Xxxxxxxx Xxxxx T. for the
sale of the Shares owned by her husband, Xxxxxxxxx Xxxxx de la Xxxx.
5.8 The written consent granted by Xxx. Xxxxxx Xxxxx for the sale of the Shares
owned by her husband, Xxxxx Xxxxxxx Xxxxx Xxxxxx.
5.9 All certificates representing the common shares of stock and the stock that
has INFOSEL issued for services, all duly cancelled.
5.10 All other documents requested by the Purchaser, whether delivered on or
before the execution date hereof, in accordance therewith.
5.11 The advisory opinion of the Seller's legal consultants under the terms of
Exhibit 9, which forms an integral part hereof.
SIX: Indemnification by the Sellers.
Inversiones, CICSA, and Editora El Sol hereby jointly and severally agree to
defend, indemnify, and hold harmless the Purchaser and its successors and
assigns on account of:
6.1 Any and all losses, costs, liabilities, damages, or deficiencies resulting
from any:
6.1.1 False statement or violation made by the Sellers regarding any
warranties, agreements, or covenants hereunder;
6.1.2 The Sellers' breach of any covenant or other agreement or obligation
hereunder;
6.2 Any and all obligations, claims, judgments, damages, legal actions, causes
of action, injuries, liabilities or losses, sanctions, costs and expenses of any
kind, loss of life, injuries to persons or property, or damage to natural
resources caused by any acts or omissions by INFOSEL or the Sellers until the
execution date hereof.
6.3 Claims based on services rendered before the execution date hereof, to the
extent that the amounts exceed the reserves indicated in INFOSEL's books until
that time;
6.4 The impossibility of collecting the accounts receivable to the extent
provided for in List 4.20 hereof within 120 days beginning as of the execution
date hereof.
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6.5 Any and all of INFOSEL's obligations created anytime until the execution
date hereof and not stated in INFOSEL's books, whether or not known on this
date, with the understanding, however, that if any claim, liability, demand,
assessment of damages, legal action, lawsuit, or proceeding is brought against
the Purchaser or any of its successors or assigns for which the Purchaser or any
of its successors or assigns intends to request indemnification ("Indemnified
Claims"), then the Purchaser shall notify the Sellers thereof. Immediately upon
receiving such notice, the Sellers shall be entitled to assume control of the
defense, settlement, or resolution of such Indemnified Claims, including, at the
Sellers' cost and expense, contracting for reasonably satisfactory legal counsel
for the Purchaser; with the understanding, however, that if the Sellers have
exercised their right to assume such control, then the Purchaser shall be
entitled, at its sole discretion, to contract for legal counsel to represent it
(in addition to the legal counsel contracted for by the Sellers, and in this
case, at their sole cost and expense) in any of said cases, and in the latter
event, the legal counsel appointed by the Sellers shall be obligated to
cooperate with the Purchaser's legal counsel in that defense, settlement, or
resolution; and with the further understanding that the Sellers' obligation to
provide indemnification under Clause Seven hereof shall only arise for the
Sellers if the total of such losses, damages, deficiencies, debts, liabilities,
costs and expenses arising hereunder with respect to the items specified in
Clause Six shall exceed US $75,000.00 (seventy-five thousand dollars), and the
Purchaser shall then be entitled to recover the full amount of any of the
Purchaser's damages that exceed said amount ("Indemnified Damages").
6.6 The Sellers' indemnifications as specified in this Clause shall not be
affected in any way by any reference made herein to the statements and
warranties made "to the Seller's knowledge and belief " or "to the best of the
Seller's knowledge and belief."
SEVEN: Indemnification by the Purchaser.
The Purchaser hereby agrees to defend, indemnify, and hold harmless the Sellers
and their assigns on account of any costs, liabilities, and damages resulting
from:
7.1 Any and all losses, costs, liabilities, damages, or deficiencies resulting
from any:
7.1.1 False declaration or violation made by the Purchaser regarding any
warranties, agreements, or covenants hereunder;
7.1.2 The Purchaser's breach of any covenant or other agreement or
obligation hereunder;
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7.2 Any and all legal actions, lawsuits, proceedings, claims, liabilities,
demands, assessments of damages, judgments, costs and expenses, including
reasonable attorneys' fees, incidental to any of the foregoing or such
indemnification; with the understanding, however, that if any claim, liability,
demand, assessment of damages, legal action, lawsuit, or proceeding is brought
against the Sellers or any of their successors or assigns for which the Sellers
or any of their successors or assigns intends to request indemnification
("Indemnified Claims"), then the Sellers shall notify the Purchaser thereof.
Immediately upon receiving such notice, the Purchaser shall be entitled to
assume control of the defense, settlement, or resolution of such Indemnified
Claims, including, at the Purchaser's cost and expense, contracting for
reasonably satisfactory legal counsel for the Sellers; with the understanding,
however, that if the Purchaser has exercised its right to assume such control,
then the Seller shall be entitled, solely at its own discretion, to contract for
legal counsel to represent it (in addition to the legal counsel contracted for
by the Purchaser, and in the latter case, at its sole cost and expense) in any
of said cases, and in this event, the legal counsel appointed by the Purchaser
shall be obligated to cooperate with the Seller's legal counsel in that defense,
settlement, or resolution.
EIGHT: Expenses.
For their respective parts, the Purchaser and the Sellers shall defray their own
expenses related to the negotiation, revision, signing, delivery, and
performance of this Agreement. For their respective parts, the Sellers and the
Purchaser hereby declare and state to the other party that the negotiations
involved in this Agreement and the transactions provided for hereby have been
carried out so as not to allow for any valid claim against the other Party for
brokerage fees, intermediary's fees, or any other similar payments.
NINE. Statements, Unconditional Warranties, and Warranties.
The warranties stated herein shall survive the execution date hereof. The
statements and unconditional warranties shall be deemed to have been made until
the date hereof, inclusively. Any claim or action based on the violation of any
statement, unconditional warranty, or warranty, shall survive the execution date
hereof for three (3) years or the period applicable under the relevant statutes
of limitation, whichever lasts longer.
TEN. Confidentiality.
No press release shall be issued, nor shall the terms of this Agreement be
disclosed to any third parties, without the mutual authorization of the Sellers
and the Purchaser. The Purchaser and the Sellers shall agree on the time and
manner in which INFOSEL's employees shall be notified of the transaction.
ELEVEN. General Provisions.
12.1 Cooperation. Each of the Parties hereto shall make its best effort
to do or cause to be done, and to cooperate with the other Party to
the necessary extent concerning all actions, and to do or cause to
be done, conforming to
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the applicable laws, everything that is necessary, appropriate, or
proper in order to render effective the transactions provided for
hereby.
12.2 Waivers. The Sellers' failure to comply with any of their
obligations or covenants stated herein may only be waived by the
Purchaser in writing. The Purchaser's failure to comply with any of
its obligations or covenants stated herein may only be waived by the
Sellers in writing.
12.3 Notices. All notices and other correspondence required or permitted
hereunder shall be issued in writing, sent to the addressee by fax,
and confirmed by means of a written original signed by a
representative that is authorized by the Party issuing the notice or
correspondence and sent via DHL, Federal Express, or any other
global courier service that offers delivery times that are the same
as or better than those of the companies mentioned, with the
understanding that the correspondence or notice shall take effect as
of the date the fax is sent but only if the original, signed notice
or correspondence is delivered to the addressee within two (2)
Business Days following the date the fax was sent. If the original
notice or correspondence is not received during that time, then it
shall not take effect until the Business Day on which the original
notice or correspondence is delivered. In any case, such notices or
correspondence shall be sent to the following business addresses:
(i) If sent to the Sellers:
Inversiones:
Inversiones Grupo Reforma, S.A. de X.X.
Xxxxxxxxxx 629 Oriente, Centro
Monterrey, N.L. X.X. 00000 Xxxxxx
Fax #: 000-0000
CICSA:
Ave. Mexico Coyoacan 40
Colonia Santa Xxxx Atoyac
Delegacion Xxxxxx Xxxxxx
Xxxxxx, X.X. X.X. 00000 Xxxxxx
Fax #: 000-0000
Lic. Junco:
Cipreses No. 73
Fraccionamiento La Cima
San Xxxxx Xxxxx Xxxxxx, X.X., Mexico
Fax #: 000-0000
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Lic. Xxxxx Xxxxxx:
Sierra Nevada No. 109
Colonia Villa Montana
San Xxxxx Xxxxx Xxxxxx, X.X., Mexico
Fax #: 000-0000
Sr. Junco Garza:
Rio Rhin No. 703
Colonia Del Xxxxx
San Xxxxx Xxxxx Xxxxxx, X.X., Mexico
Fax #: 000-0000
with a copy to:
Atencion: Lic. Xxxx Xxxxxx Xxxxxxx
Xxxxxx-Xxxxxxxx-Xxxxx-Xxxxxx-Xxxxxx-Xxxxxxxx-De xx Xxxxx, S.C.
Edificio Losoles--Despacho X-00
Xxx. Xxxxxx Xxxxxxxx 0000 Poniente
Xxxxx Xxxxxx, N.L., Mexico
Fax: (00-0) 000-0000
(ii) If sent to the Purchaser:
Edificio Oficinas en el Parque--Piso 10
Blvd. Xxxxxxx X. Xxxxxxxxx 1884 Poniente
Monterrey, Nuevo Xxxx, Mexico
Fax #: (00-0) 000-0000
with a copy to:
Atencion: Lic. Xxxxxx Xxxxx Xxxxxx
Xxxxx & XxXxxxxx Abogados, S.C.
Edificio Oficinas en el Parque--Piso 10
Blvd. Xxxxxxx X. Xxxxxxxxx 1884 Poniente
Monterrey, Nuevo Xxxx, Mexico
Fax #: (00-0) 000-0000
(iii) If sent to Editora El Sol:
Washington 629 Oriente, Centro
Monterrey, N.L. X.X. 00000 Xxxxxx
Fax #: 000-0000
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with a copy to:
Atencion: Lic. Xxxx Xxxxxx Xxxxxxx
Xxxxxx-Xxxxxxxx-Xxxxx-Xxxxxx-Xxxxxx-Xxxxxxxx-De xx Xxxxx, S.C.
Edificio Losoles--Despacho X-00
Xxx. Xxxxxx Xxxxxxxx 0000 Poniente
Xxxxx Xxxxxx, N.L., Mexico
Fax: (00-0) 000-0000
The above names and addresses may be changed via written notice to each person
indicated above.
Without prejudice to the foregoing provisions of this Clause, the Parties may
opt to issue any notice or correspondence via personal delivery of the
corresponding writing to the applicable business address as shown above, in
which case such notice or correspondence shall take effect on the delivery date
thereof. A delivery confirmation receipt must be requested from the proper
employee or representative of the addressee.
12.4 Governing Law and Dispute Resolution. This Agreement shall be governed and
interpreted in accordance with the laws of Mexico.
12.4.1 Any dispute, claim, or controversy arising from this Agreement
or relating thereto or arising from the interpretation or
violation thereof shall be submitted for arbitration in
accordance with the rules of the International Chamber of
Commerce of Paris, to the extent that such rules are
incompatible with this subsection. A ruling on the
arbitrators' award may be approved by any court that is
competent to do so; alternatively, depending on the
circumstances, said court may be requested to approve the
award so that it may be enforced. The application for
arbitration shall be filed within a reasonable time after the
claim, dispute, or other issue in controversy has arisen. In
no event shall the application be filed after the date set by
the institution of law or equity, depending on the claim,
dispute, or other issue in controversy, in accordance with the
applicable statute of limitation.
12.4.2 The arbitration board shall consist of three arbitrators, one
of which shall be designated by each of the Parties hereto.
The two arbitrators thus designated shall designate a third
arbitrator, with the understanding, however, that if the two
arbitrators do not agree on the designation of the third
arbitrator, then either of the arbitrators may petition the
International Chamber of Commerce of Paris to make the
designation.
[Initials and signatures illegible]
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12.4.3 The place of arbitration shall be the City of Dallas, Texas,
and the arbitration shall be carried out in English and/or
Spanish; either language shall suffice.
12.4.4 Each of the Parties hereby waives the requirement of a
hand-delivered notice of arbitration and agrees that notices
of arbitration may be delivered in writing, by certified or
registered mail, return receipt requested, to the address
indicated herein, and any petition made in this manner shall
be deemed to have been made on the tenth Business Day
following the date on which it was deposited in the mail.
12.4.5 Any judicial proceeding initiated in support of the
arbitration concerning this Agreement, including precautionary
measures, shall be submitted to the competent judicial
authority. Each of the Parties hereto (a) fully and
unconditionally accepts the exclusive jurisdiction of that
court and that of any related appeals court and hereby
irrevocably waives any objection that such Party may have now
or in the future concerning the forum of any lawsuit, legal
action, or proceeding initiated in said courts, and any
objection to the effect that such courts are a forum non
conveniens.
12.5 Copies. This Agreement may be signed simultaneously in three or more
copies, each of which shall be considered an original, but together they shall
be considered one and the same document.
12.6 Headings. The headings of the various clauses contained herein are solely
for purposes of reference and shall not affect the meaning or interpretation of
this Agreement in any way.
12.7 Entire Agreement. This Agreement, including its exhibits and the documents
mentioned herein, constitutes the entire Agreement and covenants of the parties
hereto concerning the subject matter contained herein. There are no
restrictions, promises, statements, absolute warranties, other warranties, or
commitments other than those expressly specified or mentioned herein. This
Agreement supersedes any and all other agreements and covenants previously made
between the Parties concerning said subject matter.
12.8 Amendments and Modifications. This Agreement may only be amended or
modified by a written agreement between the Parties hereto.
12.9 Binding Force. This Agreement shall inure to the Parties hereto and their
respective successors and assigns and shall be binding on all of them. Nothing
included expressly or implicitly in this Agreement shall be construed to confer
any right, remedy, obligation, or liability under this Agreement on any party
other than the Parties hereto or their respective successors and assigns.
[Initials and signatures illegible]
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12.10 Assignment. None of the Parties to this Agreement may assign the Agreement
without first obtaining the express written consent of the other Parties hereto.
12.11 Taxes Resulting from the Transfer. The Income Tax resulting from this
transaction or from the sale, transfer, or delivery of the Shares shall be
payable at the Sellers' cost and expense.
12.12 Antitrust. On October 4, 1999, the Parties submitted notice of this merger
to the Federal Antitrust Commission in order to comply with Article 20 of the
Federal Antitrust Law.
12.13 Best Knowledge and Belief. For purposes of this Agreement, the phrase "to
the Sellers' knowledge and belief" or "to the best of the Seller's knowledge and
belief," when applied to a statement or warranty made by the Sellers, shall be
deemed to mean "to the best of the Sellers' knowledge and belief after due
verification"; moreover, "knowledge and belief," as used in that phrase, shall
be considered to include all of the matters that the Sellers or any officer
thereof actually took notice of or should have taken notice of after due
verification.
IN WITNESS WHEREOF, the Parties hereto have signed this Agreement on the date
first shown above.
Purchaser:
Terra Networks Mexico, S.A. de C.V.
[Signature illegible]
By: [handwritten:] XXXXXX DE X. XXXXXX XXXXXXXXX
Position: [handwritten:] CHIEF EXECUTIVE OFFICER
Sellers:
Inversiones Grupo Reforma, S.A. de C.V.
[Signature illegible]
By: [handwritten:] Xxxxxxxxx Xxxxx
Position: [handwritten:] Sole Director and Chief Executive
Officer
[Initials and signatures illegible]
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[handwritten:] Consorcio Interamericano de Comunicacion, S.A.
de C.V.
[crossed through:] Comunicacion Integrada de Occidente, S.A.
de C.V.
[Signature illegible]
By: [handwritten:] Xxxxxxxxx Xxxxx
Position: [handwritten:] Sole Director and Chief Executive
Officer
Editora El Sol, S.A. de C.V.
[Signature illegible]
By: [handwritten:] Xxxxxxxxx Xxxxx
Position: [handwritten:] Sole Director and Chief Executive
Officer
Xxxxxxxxx Xxxxx de la Xxxx Xxxxxxxx
[Signature illegible]
By: [handwritten:] Xxxxxxxxx Xxxxx
Xxxxx Xxxxxxx Xxxxx Xxxxxx
By: [Signature illegible]
Xxxxxxx Xxxxx Xxxxx
By: [Signature illegible]
[Initials and signatures illegible]
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The following annexes to this agreement have not been included:
- Exhibit 1 - List of contracts and agreements in effect
- Exhibit 2 - Inventory of assets
- Exhibit 3 - List of insurance policies, surety bonds, and
claims submitted to insurers
- Exhibit 4 - Reimbursable deposits, prepaid expenses, and
deferred expenses
- Exhibit 5 - Loans or advance payments given by Infosel
- Exhibit 6 - List of leased real estate
- Exhibit 7 - List of title deeds, rights of use and/or
exploitation of inventions, trademarks, copyrights, computer
programs and trade secrets
- Exhibit 8 - Federal, state, local and foreign governments
permits and licenses required to carry out business
- Exhibit 9 - Opinion of the Seller's legal counselor
- List 4.11 - Pending or threatened judicial proceedings
- List 4.12 - List of current employees
- List 4.13 - Encumbrances on assets and property
- List 4.14 - Defects in buildings, constructions, improvements,
and accessories
- List 4.15 - Audited financial statements of Infosel as of June
30, 1999
- List 4.17 - Overdue taxes
- List 4.19 - Defects in patents, registered trademarks and
other intellectual property
- List 4.21 - Defects in inventory
31
- List 4.23 - Changes in Infosel's financial situation between
June 30, 1999 and October 5, 1999
- List 4.24 - Changes or events between June 30, 1999 and
October 5, 1999
- List 4.25 - List of breached agreements as of September 10,
1999
- List 4.17 - Insurance policies in force
- List 4.28 - List of persons from whom consent is required to
carry out the Purchase and Sale Agreement
- List 4.29 - Certain interests
Copies of the annexes not included herein will be provided upon request.
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