PLEDGE AND SECURITY AGREEMENT
Exhibit 25
EXECUTION COPY
PLEDGE AND SECURITY AGREEMENT (as the same may be amended, modified or supplemented from time to time hereto, this “Agreement”) dated October 29, 2014 by and among Fintech Telecom, LLC, a limited liability company duly organized and existing under the laws of Delaware (the “Pledgor”), and Telecom Italia S.p.A., a company duly organized and existing under the laws of Italy with its registered office at Xxxxxx xxxxx Xxxxxx, 0, Xxxxx, Xxxxx (“TI”) and Telecom Italia International N.V., a company duly organized and existing under the laws of The Netherlands with its registered office at Strawinskylaan 1627, 1077XX Amsterdam (“TII” and together with TI, the “Sellers”). Capitalized terms used and not otherwise defined herein shall have the meaning set forth in the SPA (as defined below).
“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.
“Business Day(s)” means any day other than Saturday or Sunday or any day on which banking institutions in the City of New York, USA or Rome, Italy or Amsterdam, The Netherlands are authorized or required by Law, regulation or executive order, to remain closed.
“Collateral” has the meaning assigned to such term in Section 3.
“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.
“Event of Default” means a breach by the Purchaser, Pledgor or Guarantor of its obligation to pay any Payment Amount to the Sellers in accordance with the terms of, and subject to the conditions set forth in, the Guaranty, the SPA, the Transition Services MOU, the Drag Waiver MOU and this Agreement, in each case only to the extent that at such time the breach has not been remedied by the cancellation of a principal amount of the Pledged Note equal to the Payment Amount.
“Final Unwind Obligation” means the obligation of the Purchaser to pay the Final Unwind Liquidation Amount in accordance with Section 8.05(f) of the SPA (and any obligation of the Guarantor in respect thereof).
“Floor Price Obligation” means the obligation of the Purchaser to pay the Sellers any amounts due upon consummation of a Third Party Sale pursuant to and in accordance with Section 8.05(e) of the SPA (and any obligation of the Guarantor in respect thereof).
“Indemnification Obligation” means the obligation of the Purchaser to make payment to the Sellers of any amounts due and owing to the Sellers pursuant to Section 6.21 or Section 9.02 of the SPA (and any obligation of the Guarantor in respect thereof) and the obligations of the Purchaser to make payment to the Sellers of any amounts due and owing to the Sellers pursuant to Paragraph 5 of the Transition Services MOU (and any obligation of the Guarantor in respect thereof), in each case solely to the extent that a final, non-appealable decision or judgment of an arbitral panel or other Governmental
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Entity (or any appealable decision if such decision is not appealed within 90 days) determines, or it is expressly agreed in writing by the parties hereto, that such amount is due and owing from the Purchaser to the Sellers or their Affiliates thereunder (and in respect of which decision, agreement or judgment the Purchaser and the Guarantor have failed to make payment within three (3) Business Days).
“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien (statutory or other), pledge, hypothecation, encumbrance, charge, deposit arrangement, preference, priority or security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing) in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.
“NYUCC” means the Uniform Commercial Code as in effect from time to time in the State of New York.
“Payment Amount” means each of (a) the Purchase Price Obligation, (b) the Waiver Fee Obligation, (c) the Transition Payment Amount Obligation, (d) the Indemnification Obligation, (e) the Floor Price Obligation and (f) the Final Unwind Obligation, together with any reasonable and documented costs and expenses incurred by the Sellers in the enforcement of this Agreement.
“Pledged Note” means the Note issued to the Pledgor by TII on the date hereof and in an initial total principal amount of US$600,593,478.
“Purchase Price Obligation” means the obligation of the Purchaser to make payment to the Sellers in US Dollars outside of Argentina of the Sofora Purchase Price, plus an amount equal to the lesser of (x) the amount set forth in the Sofora Debt Certificate and (y) the Sofora Debt Amount, or any portion thereof, in each case due and owing to the Sellers at the Closing, in accordance with the SPA (and any obligation of the Guarantor in respect thereof).
“Secured Parties” means, collectively, the Sellers and their respective permitted successors and assigns.
“Secured Obligations” means, collectively, the Purchase Price Obligation, the Waiver Fee Obligation, the Transition Payment Amount Obligation, the Indemnification Obligation, the Floor Price Obligation and the Final Unwind Obligation.
“Transition Payment Amount Obligation” means the obligation of the Purchaser to make payment to the Sellers of the Transition Services Availability Payment (as such term is defined in the Transition Services MOU) in US Dollars outside of Argentina (and any obligation of the Guarantor in respect of any portion thereof due and
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owing to the Sellers in the event that the Purchaser fails to pay to the Sellers), on the date on which it is required to be paid, in accordance with the terms of the Transition Services MOU, an amount equal to the Transition Services Availability Payment (if any) in US Dollars outside of Argentina.
“Waiver Fee Obligation” means the obligation of the Guarantor under the Guaranty to make payment to the Sellers of the Waiver and Amendment Fee (as defined in the Drag Waiver MOU) or any portion thereof due and owing to the Sellers in the event that the Los W Parties fail to pay to the Sellers at the Closing in accordance with the terms of the Drag Waiver MOU, an amount equal to the Fee (as defined in the Drag Waiver MOU) in US Dollars outside of Argentina.
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deliver, deposit and set over the Pledged Note pledged by the Pledgor to the Sellers for the benefit of the Secured Parties as provided herein.
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(a) the Pledged Note and any certificates, instruments or agreements evidencing such Pledged Note;
(b) any additional collateral pledged by the Pledgor hereunder in accordance with its obligation to provided Additional Collateral on the Decision Date in accordance with Section 8.05(a) of the SPA; and
(c) all Proceeds of any of the Collateral, and substitutions and replacements for, any of the Collateral, including any profits of any of the Collateral, but excluding any interest payments in respect of the Collateral.
(a) if any certificates, instruments or agreements evidencing the Pledged Note constituting part of the Collateral or evidencing a change in the principal amount or the terms thereof of the are received by the Pledgor or the Guarantor, forthwith deliver to the Secured Parties such certificates or instruments representing or evidencing the same accompanied by such instruments of assignment and transfer in such form and substance as the Sellers may reasonably request or deem necessary, all of which thereafter shall be held by the Secured Parties as part of the Collateral;
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(b) keep full and accurate books and records relating to the Collateral, and stamp or otherwise xxxx such books and records in such manner as the Sellers may reasonably require in order to reflect the security interests granted by this Agreement.
4.04 Rights of the Pledgor. For so long as the Sellers have not demanded payment against the Pledgor in respect of the Secured Obligations, the Pledgor shall be entitled to receive, retain or dispose of the interest paid in respect of the Pledged Note and shall have the right to exercise any consent rights of the promisee in respect of the Pledged Note.
(a) After the Interim Transfer Date and prior to the earlier of the Closing and the Final Date, upon the date on which any Non-Permitted Dividend Amount is Payable (if not previously Paid) or Paid (if not previously Payable or Paid in any other currency), the pledge on and security interest in a principal amount of the Pledged Note equal to such Non-Permitted Dividend Amount shall be released and thereafter that portion of the principal amount of the Pledged Note shall be prepaid to the Pledgor in accordance with the terms of the Pledged Note;
(b) Upon a termination of the SPA prior to the Closing and prior to the Outside Date in accordance with Section 8.02 of the SPA (provided that at such time the Minority Sofora Pledge is in full force and effect) the pledge on and security interest in the Collateral shall be released and thereafter the Pledged Note shall be prepaid to the Pledgor in accordance with the terms of the Pledged Note.
(c) In the event of the sale to the Purchaser of the Majority Sofora Shares on or prior to the Outside Date:
(i) upon fulfillment of both the Purchase Price Obligation and the Waiver Fee Obligation, the pledge on and security interest in the Collateral shall be released except in respect of a principal amount of the Pledged Note of $30,000,000, and thereafter, except for such amount, the Pledged Note shall be prepaid to the Pledgor in accordance with the terms of the Pledged Note;
(ii) upon the date that the Transition Payment Amount Obligation has been fulfilled, the pledge on and security interest in the remaining Collateral shall be released except in respect of a principal amount of the Pledged Note of $8,000,000, and thereafter, except for such amount, the Pledged Note shall be prepaid to the Pledgor in accordance with the terms of the Pledged Note; and
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(iii) upon the later of (i) the date that is three (3) months following the date on which the Transition Payment Amount Obligation is satisfied in full (the “Transition Payment Date”) and (ii) the date on which all disputes outstanding on the Transition Payment Date relating to any Indemnification Obligations have been fully and finally resolved and all payments due in respect of such Indemnification Obligations have been paid, the pledge on and security interest in the remaining Collateral shall be released, and thereafter the Pledged Note shall be prepaid to the Pledgor in accordance with the terms of the Pledged Note.
(d) In the event of an exercise of the Unwind Option, then on the Decision Date, if the Minority Sofora Pledge is in full force and effect, the pledge on and security interest in the Collateral shall be released and thereafter the Pledged Note shall be prepaid to the Pledgor in accordance with the terms of the Pledged Note.
(e) In the event that the Third Party Sale Option is exercised and the Additional Collateral is deposited in accordance with the SPA, then:
(i) If a Third Party Sale is consummated on or prior to the Final Date, upon satisfaction of the Floor Price Obligation, if any, the pledge on and security interest in the Collateral shall be released and thereafter the Pledged Note shall be prepaid to the Pledgor in accordance with the terms of the Pledged Note;
(ii) If no Third Party Sale is consummated on or prior to the Final Date, then upon fulfillment of the Final Unwind Obligation, if the Minority Sofora Pledge is in full force and effect, the pledge on and security interest in the remainder of the Collateral shall be released and thereafter the Pledged Note shall be prepaid to the Pledgor in accordance with the terms of the Pledged Note.
(f) Upon the occurrence of a Payment Default under and as defined in the Pledged Note, the pledge on and security interest in the Collateral shall be released.
Following release of the pledge on and security interest in any Collateral in accordance with this Section 4.05, the Sellers, upon receipt of written request therefor, shall forthwith and at the expense of the Pledgor cause to be transferred and delivered to the Pledgor, against receipt but without any recourse, warranty or representation whatsoever, any such Collateral so released that is in the possession of the Sellers.
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and remedies hereunder may be asserted, including the right, to the fullest extent permitted by law, to exercise all powers of ownership pertaining to the Collateral as if the Sellers were the sole and absolute owner thereof (and the Pledgor agrees to take all such action as may be appropriate to give effect to such right); and without limiting the foregoing:
(i) the Sellers may require the Pledgor to cause the Collateral to be assigned or transferred of record into the names of the Sellers or their respective nominees;
(ii) the Sellers in their discretion may, in their names or in the name of the Pledgor or otherwise, demand, xxx for, collect or receive any money or other property at any time payable or receivable on account of or in exchange for any of the Collateral, but shall be under no obligation to do so;
(iii) the Sellers may sell, assign or otherwise dispose of all or any part of the Collateral, at such place or places as they deem best and so direct, and for cash or for credit or for future delivery (without thereby assuming any credit risk), at public or private sale, without demand of performance or notice of intention to effect any such disposition or of the time or place thereof (except such notice as is required by applicable statute and cannot be waived). The Sellers may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for the sale, and such sale may be made at any time or place to which the sale may be so adjourned.
The Proceeds of each collection, sale or other disposition under this Section 4.07 shall be transferred as directed by the Sellers.
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4.10 Private Sale. The Secured Parties shall incur no liability as a result of the sale of the Collateral, or any part thereof, at any private sale pursuant to Section 4.07 conducted in a commercially reasonable manner. The Pledgor hereby waives any claims against the Secured Parties arising by reason of the fact that the price at which the Collateral may have been sold at such a private sale was less than the price that might have been obtained at a public sale or was less than the aggregate amount of the Secured Obligations, even if the Sellers accept the first offer received and do not offer the Collateral to more than one (1) offeree.
4.11 Application of Proceeds. The Proceeds of any collection, sale or other realization of all or any part of the Collateral pursuant hereto, and any other cash at the time held by the Sellers under this Section 4, shall be transferred, by wire transfer of immediately available funds, to the designated account of the Sellers for application thereof by the Sellers to payment of the Secured Obligations after payment of the fees and expenses (including attorneys’ fees of the Sellers); provided that in the event that all Secured Obligations and fees and expenses have been paid in full and the obligations of the Pledgor in respect of the Secured Obligations shall have finally expired or been terminated, the Sellers shall pay to the Pledgor or as a court of competent jurisdiction may direct, any surplus then remaining from the Proceeds of the Collateral owned by it.
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the Pledgor representing any payment or other distribution in respect of the Collateral or any part thereof and to give full discharge for the same, and (c) the Sellers shall have the power to arrange for, including by an agent, Affiliate or nominee, to appoint an agent to translate the power of attorney granted by this Section 4.14.
(a) The Pledgor shall fully and duly fulfill each and all of its obligations under this Agreement and shall take all other reasonable actions necessary to protect the existence, maintenance and exercise of the rights of the Secured Parties hereunder, including, but not limited to: (i) complying with any obligations imposed under the applicable Laws and regulations and other rules related, and/or in any other way linked, to the Collateral, the breach of which could have a material adverse effect on the rights of the Sellers under this Agreement, and (ii) immediately lifting any kind of injunctions and attachments on the Collateral which may affect the rights of the Sellers under this Agreement;
(b) The Pledgor shall take and adopt, promptly and diligently, all reasonable measures that the Sellers may request (including, but not limited to, the commencement of claims, actions, orders, measures, requests and demands) for the purpose of (i) protecting the title of the Pledgor to the Collateral, and (ii) preventing the Collateral from being affected in any way (but excluding any reduction in value or price) that may result in a significant adverse effect on the rights of the Sellers under this Agreement, provided that the Sellers, at their own cost and expense, shall be entitled to exercise and adopt by themselves the claims, actions, orders, measures, requests and demands that may be necessary if the Sellers determine that their rights, as they relate to the Collateral, are not adequately protected by the Collateral; and
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(c) The Pledgor shall promptly notify the Sellers about the occurrence of any event or act which may adversely affect the enforceability of this Agreement so that the Sellers may adopt sufficiently in advance all the measures leading to adequate protection of its rights under and in accordance with the provisions of this Agreement, including any litigation, claim, notification or demand relating to the Collateral in this respect.
(a)
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if to the Pledgor, to it at:
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Fintech Telecom, LLC
c/o Fintech Advisory, Inc.
000 Xxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: JR Xxxxxxxxx
Telephone: x0 (000) 000-0000
Fax: x0 (000) 000-0000
and
(b)
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if to the Sellers, to them at:
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Telecom Italia
Xxxxxx Xxxxxxxxx
Phone x00 00 0000 0000
Xxx Xxxxx, 0-00000 Xxxxxx
xxx
Xxxxxxx Xxxxxx International N.V.
Strawinskylaan 1627
1077XX Amsterdam
Francesco Xxxxxxx Xxxxxxxx
Chief Executive Officer
Phone x00 00 000 0000
Fax: x00 00 000 0000
Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. All notices and other
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communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt.
(a) The Pledgor agrees to reimburse each of the Secured Parties for all costs and expenses incurred by them (including reasonable attorneys’ fees) in connection with (i) compliance with this Agreement and any enforcement or collection proceeding in respect of this Agreement, including all manner of participation in or other involvement with (1) performance by the Sellers of any obligations of the Pledgor in respect of the Collateral that the Pledgor has failed or refused to perform, (2) bankruptcy, insolvency, receivership, foreclosure, winding up or liquidation proceedings, or any actual or attempted sale, or any exchange, enforcement, collection, compromise or settlement in respect of any of the Collateral, and for the care of the Collateral and defending or asserting rights and claims of the Sellers in respect thereof, by litigation or otherwise, including expenses of insurance, (3) judicial or regulatory proceedings and (4) workout, restructuring or other negotiations or proceedings (whether or not the workout, restructuring or transaction contemplated thereby is consummated) and (ii) the enforcement of this Section 5.04, and all such costs and expenses shall be Secured Obligations entitled to the benefits of the collateral security provided pursuant to Section 3.
(b) The provisions of this Section 5.04 shall survive the termination of this Agreement.
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of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
(a) Governing Law. This Agreement shall be construed in accordance with and governed by the law of the State of New York.
(b) Submission to Jurisdiction in U.S. Each party hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York in the Borough of Manhattan, and any appellate court from any thereof, in any suit, action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such suit, action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such federal court. Each of the parties hereto agrees that a final judgment in any such suit, action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
[SIGNATURE PAGES FOLLOW]
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FINTECH TELECOM, LLC, | ||||
as Pledgor
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By:
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Fintech Advisory, Inc.
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Its
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Managing Member
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By
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/s/ Xxxxx Xxxxxxx
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Name:
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Xxxxx Xxxxxxx
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Title:
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Authorized Person
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By
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/s/ Xxxxx Xxxxxx Xxxxxxxxx, Xx.
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Name:
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Xxxxx Xxxxxx Xxxxxxxxx, Xx.
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Title:
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Authorized Person
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TELECOM ITALIA S.p.A., | ||||
as Seller
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By
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/s/ Xxxxxxx Xxxx
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Name:
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Xxxxxxx Xxxx
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Title:
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Authorized Representative
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TELECOM ITALIA INTERNATIONAL N.V., | ||||
as Seller
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By
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/s/ Xxxxxxxxx X. Xxxxxxxx
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Name:
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Xxxxxxxxx X. Xxxxxxxx
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Title:
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Chief Executive Officer
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