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EXHIBIT 2(b)
SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT (this "Agreement") is made and entered into
as of this 22nd day of December, 1998, by and between BANCO MERCANTIL C.A., a
banking corporation organized under the laws of Venezuela ("Bank"), and GTE
VENEZUELA INCORPORATED ("GTE"), a corporation organized under the laws of
Delaware.
W I T N E S S E T H:
WHEREAS, Bank currently owns, in its capacity as trustee for 239 trusts
established as a result of the liquidation of Inversiones Cimatel, C.A.
(collectively, the "Liquidation Trusts"), 13,730,352 shares of the issued and
outstanding shares of Common Stock of VenWorld Telecom, C.A. ("VenWorld"), a
corporation organized under the laws of Venezuela; and
WHEREAS, GTE currently owns 7,823,200 American Depositary Shares of
Compania Anonima Nacional Telefonos de Venezuela, C.A. (CANTV), a corporation
organized under the laws of Venezuela ("CANTV");
WHEREAS, each CANTV American Depositary Share represents seven (7) issued
and outstanding shares of Class D Common Stock of CANTV; and
WHEREAS, subject to the following terms and conditions, Bank, acting in
its capacity as trustee for those Liquidation Trusts which have agreed to
participate in the transactions described herein (such Liquidation Trusts so
participating being hereinafter collectively referred to as the "Trusts"),
desires to exchange 7,728,307 shares of the Common Stock of VenWorld
(collectively, the "VenWorld Shares"), and GTE desires to acquire the VenWorld
Shares, in exchange for 3,116,653 of the CANTV American Depositary Shares that
are owned by GTE (the "CANTV ADSs").
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein set forth, the parties agree as follows:
ARTICLE I
THE TRANSACTION
Section 1.1. Exchange of VenWorld Shares for CANTV ADSs. Bank hereby
exchanges with GTE the VenWorld Shares for the CANTV ADSs (such exchange being
hereinafter referred to as the "Transaction").
Section 1.2. Exchange of Certificates for Irrevocable Transfer
Instructions. GTE hereby delivers a certificate for the CANTV ADSs in the name
of Banco Mercantil C.A. in accordance with instructions received from BANK, in
exchange for a duly executed irrevocable letter of transfer instructions
ordering VenWorld C.A. to register the transfer of the VenWorld Shares in the
name of GTE. Bank agrees to take such further actions as GTE may reasonably
request to consummate the transfer of the VenWorld Shares to GTE.
Section 1.3. Condition Precedent to Closing. If the share price of CANTV
ADS exceeds twenty-six dollar U.S. ($26.00) per share at 10:00 a.m. on the day
of closing, GTE shall not be obligated to consumate the exchange.
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ARTICLE II
THE CLOSING
Section 2.1. The Closing. The closing (the "Closing") under this
Agreement shall take place at the offices of Citibank, N.A. at 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx at 10:00 a.m. on December 22, 1998 (the "Closing Date").
Section 2.2. Effect of Closing. All transactions entered into on the
Closing Date, and all stock certificates and documents delivered at the Closing,
shall be deemed to have occurred and to have been delivered simultaneously as of
the close of business on the Closing Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Bank hereby represents and warrants to GTE as follows:
Section 3.1. Organization. Bank is a banking corporation duly organized,
validly existing and in good standing under the laws of Venezuela and has
requisite power and authority to own, lease and operate its properties and to
carry on its business as it is now being conducted.
Section 3.2. The VenWorld Shares. Bank owns of record the VenWorld Shares
as trustee for the Trusts, free and clear of all liens, pledges, charges and
encumbrances. Other than this Agreement and the Association Agreement among the
initial investors in VenWorld dated as of August 1, 1991 (as in effect on the
date hereof, the "VenWorld Agreement"), there are no outstanding options,
warrants, rights, transfer restrictions, convertible securities, contracts or
commitments relating to the issuance, sale, voting, redemption, repurchase or
transfer of any of the Shares.
Section 3.3. Authority; Binding Effect. Bank has full power and authority
to enter into this Agreement and carry out the transactions contemplated hereby.
The Board of Directors of Bank has duly authorized the execution and delivery of
this Agreement and the transactions contemplated hereby, and no other corporate
proceeding on the part of Bank or actions by the beneficial owners of the Trusts
(collectively, the "Beneficial Owners") of the VenWorld Shares are necessary to
authorize this Agreement and the transactions contemplated hereby. This
Agreement is the valid and binding obligation of Bank, enforceable against Bank,
in accordance with its terms, subject to bankruptcy, insolvency and other
similar laws affecting the rights of creditors generally and subject to the
exercise of judicial discretion in accordance with principles of equity.
Section 3.4. No Violation. The transfer of the VenWorld Shares to GTE and
the performance by Bank of the terms and provisions of this Agreement (i) will
not conflict with, or result in a breach of the terms or provisions of, the
articles of association or bylaws (or equivalent documents) of Bank or of any
document governing any of the Trusts; (ii) will not constitute a violation or
breach of any law, rule, regulation, order, injunction, decree, or other
judicial or regulatory prohibition or restriction against Bank or any Beneficial
Owner; and (iii) will not conflict with, or constitute an event of default
under, the terms or provisions of any contract, lease, note or other obligation
of Bank, any Trust or any Beneficial Owner.
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Section 3.5. Consents. (i) No consent, approval, or authorization of, or
declaration, filing or registration with, any federal, state or local government
or any court of competent jurisdiction, administrative agency or commission or
other governmental authority (each, a "Governmental Entity") and (ii) no consent
of any person is required by, or on behalf of Bank, any of the Trusts, any
Beneficial Owner or any of their respective Affiliates, in connection with the
execution, delivery, and performance of this Agreement or the consummation of
the transactions contemplated by this Agreement, other than consents, approvals,
authorizations, declarations, filings and registrations, which have been
obtained and described in writing to GTE, including, without limitation, all
required consents from the Beneficial Owners.
Section 3.6. Purchase for Investment. Bank is acquiring the CANTV ADSs as
trustee for the Trusts for investment and not with a view to, or for sale in
connection with, any distribution thereof except as permitted by applicable
laws, including Venezuelan and US securities laws.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
GTE hereby represents and warrants to Bank as follows:
Section 4.1. Organization. GTE is a corporation duly organized, validly
existing and in good standing under the laws of Delaware and has requisite power
and authority to own, lease and operate its properties and to carry on its
business as it is now being conducted.
Section 4.2. Authority, Binding Effect. GTE has full corporate power to
enter into this Agreement and carry out the transactions contemplated hereby.
The Board of Directors of GTE has duly authorized the execution and delivery of
this Agreement and the transactions contemplated hereby, and no other corporate
proceedings on its part are necessary to authorize this Agreement and the
transactions contemplated hereby. This Agreement is the valid and binding
obligation of GTE, enforceable against GTE in accordance with its terms, subject
to bankruptcy, insolvency and other similar laws affecting the rights of
creditors generally and subject to the exercise of judicial discretion in
accordance with principles of equity.
Section 4.3. No Violation. The transfer of the CANTV ADSs to Bank, and
the performance by GTE of the terms and provisions of this Agreement (i) will
not conflict with, or result in a breach of the terms or provisions of, the
Certificate of Incorporation or Bylaws of GTE; (ii) will not constitute a
violation or breach of any order, injunction, decree, or other judicial or
regulatory prohibition or restriction against or affecting GTE; and (iii) will
not conflict with, or constitute an event of default under, the terms or
provisions of any material contract, lease, note or other obligation of GTE.
Section 4.4. Consents. (i) No material consent, approval, or
authorization of, or declaration, filing or registration with, any Governmental
Entity; and (ii) no consent of any person is required by, or on behalf of, GTE,
in connection with the execution, delivery, and performance of this Agreement or
the consummation of the transactions contemplated by this Agreement.
Section 4.5. Purchase for Investment. GTE is acquiring the VenWorld
Shares for investment and not with a view to, or for sale in connection with,
any distribution thereof except as permitted by applicable laws, including
Venezuelan and US securities laws.
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ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.1. Survival; Indemnity. (a) The representations and warranties
herein shall survive the closing of the Transaction.
(b) Bank hereby agrees to indemnify, defend and hold harmless GTE and its
affiliates and their respective officers, directors, employees and agents from
and against any losses, damages, or expenses (including reasonable attorneys
fees) incurred or sustained by such person as a result of (i) any breach by Bank
of any of the representations or warranties made by Bank in this Agreement or
(ii) any claim made by any Trust or any Beneficial Owner relating, directly or
indirectly, to the Transaction; or
(c) GTE hereby agrees to indemnify, defend and hold harmless Bank and its
respective officers, directors, employees and agents from and against any
losses, damages, or expenses (including reasonable attorneys fees) incurred or
sustained by such person as a result of any breach by GTE of any of the
representations or warranties made by GTE in this Agreement.
Section 5.2. Notices. All notices, certificates, requests, demands, and
other communications hereunder shall be in writing and may be personally served
or sent by telecopier or private courier or express delivery service. All such
notices, certificates, requests, demands and other communications shall be
delivered to the party to receive same at the addresses indicated below (or at
such other address(es)) as a party may specify in a written notice given in
accordance with this Section 11.2):
If to Bank, to:
Banco Mercantil
Av. Xxxxxx Xxxxx, Edif. Mercantil, Piso 27
Inversora Marasima
San Bernadino 1010
Caracas, Venezuela
Attention: Xxxxxxx Xxxxxxxxx
Fax: 000-000-0000
With a copy to:
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Caracas, Venezuela
Attention: Vice President
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Fax:
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If to GTE, to:
c/o GTE International Telecommunications Incorporated
0000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
XXX
Attention: Vice President-International Administration
Fax: 000-000-0000
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With a copy to
GTE Corporation
000 Xxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Vice President and Assistant General Counsel
Fax: 000-000-0000
or to such other person or address as any party hereto shall furnish to the
other parties hereto in writing pursuant to this Section 4.2.
Section 5.3. Assignment. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective successors and permitted
assigns, but neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by a party without the prior written
consent of the other party.
Section 5.4. Governing Law; Consent to Jurisdiction.
(a) This Agreement shall be governed by the laws of the State of New York
regardless of the laws that might otherwise govern applicable conflicts of laws.
(b) Each of GTE and Bank, for itself and as trustee of the Trusts,
irrevocably submits to the non-exclusive jurisdiction of any federal or state
courts sitting in New York, New York for the purposes of resolving or enforcing
any dispute, controversy, difference or claim arising among the Parties
concerning the interpretation, performance or enforcement of this Agreement
(each a "Dispute"). Each of GTE and Bank, for itself and as trustee of the
Trusts, further agrees that service of any process, summons or notice at the
address set forth in Section 4.2 shall be effective service of process for any
action, suit or proceeding in New York with respect to any matters to which it
has submitted to jurisdiction as set forth above. Each of GTE and Bank, for
itself and as trustee of the Trusts, irrevocably and unconditionally waives any
objection to the laying of venue of any action, suit or proceeding arising out
of this Agreement or the transactions contemplated hereby in any federal or
state court located in the State of New York and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum.
(c) To the extent that Bank or any of its subsidiaries or affiliates or
any Trust or any Beneficial Owner has or hereafter may acquire any immunity from
jurisdiction of any court or from any legal process (whether through service of
notice, attachment prior to judgment, attachment in aid of execution, or
otherwise) with respect to itself or its property, Bank, for itself and on
behalf of all of such persons and entities, hereby irrevocably waives such
immunity in respect of its obligations under this agreement and, without
limiting the generality of the foregoing, agrees that the waivers set forth in
this paragraph shall have the fullest scope permitted under the Foreign
Sovereign Immunities Act of 1976 of the United States and are intended to be
irrevocable for purposes of such Act.
Section 5.5. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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Section 5.6. Headings. The Article and Section headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
Section 5.7. Entire Agreement. This Agreement and the VenWorld Agreement
embody the entire agreement and understanding of the parties in respect of the
subject matter contained herein. This Agreement supersedes all prior agreements
and understandings between the parties with respect to any potential sale of the
VenWorld Shares or the exchange of the VenWorld Shares for the CANTV ADSs.
Section 5.8. Third Parties. Except for the indemnity provisions of
Section 4.1, which are also for the benefit of the parties identified therein,
nothing in this Agreement, whether express or implied, is intended to: (i)
confer any rights or remedies on any person other than Bank and GTE, and their
respective successors and permitted assignees; (ii) to relieve or discharge the
obligation or liability of any third party; or (iii) to give any third party any
right of subrogation or action against Bank or GTE.
Section 5.9. Waiver. No failure or delay on the part of any Party in the
exercise of any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such power or right preclude other
or further exercise thereof or of any other right or power. The waiver by any
Party or Parties hereto of a breach of any provision of this Agreement shall not
operate or be construed as a waiver of any other or subsequent breach hereunder.
All rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.
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IN WITNESS WHEREOF, the parties, acting through their duly authorized
representatives, have executed this Agreement as of the day and year first above
written.
WITNESS GTE VENEZUELA INCORPORATED
By: /s/ By: /s/
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Its: President
By: /s/
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Its: Vice President
WITNESS BANCO MERCANTIL C.A.
By: /s/ By: /s/
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Its: Power of Attorney
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