Exhibit 2-a
Execution Copy
STOCK PURCHASE AGREEMENT
BY AND AMONG
TELEFONICA MOVILES, S.A.,
EACH OF THE ENTITIES LISTED ON SCHEDULE I HERETO,
AND
BELLSOUTH CORPORATION
(for purposes of the Sections and Articles identified in the Preamble only)
Dated as of March 5, 2004
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS..............................................2
1.1 Definitions..................................................2
1.2 Interpretation..............................................23
ARTICLE II SALE AND PURCHASE OF SELLERS EQUITY INTERESTS...........23
2.1 Sale and Purchase...........................................23
2.2 Purchase Price..............................................23
2.3 Payment for the Sellers Equity Interests....................24
2.4 Final Purchase Price Determination..........................25
ARTICLE III MINORITY EQUITY INTERESTS; TAKE-ALONG OFFER.............29
3.1 Minority Equity Agreements; Required Minority Equity Holder
Approvals.................................................29
3.2 Take-Along Offer to Holders of Minority Equity Interests....32
3.3 Sale of Equity Interests Pursuant to Rights of First
Refusal...................................................35
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLERS...............36
4.1 Due Incorporation...........................................36
4.2 Due Authorization...........................................36
4.3 Authority Relative to this Agreement........................37
4.4 Capitalization..............................................37
4.5 Financial Statements........................................38
4.6 No Adverse Effects or Changes...............................38
4.7 No Defaults or Violations...................................39
4.8 Litigation..................................................39
4.9 Brokers.....................................................39
4.10 Communications Licenses.....................................39
4.11 Intermediate Holding Companies..............................39
4.12 Obligations or Liabilities..................................39
4.13 Assets......................................................40
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PURCHASER.............40
5.1 Due Incorporation...........................................40
5.2 Due Authorization...........................................40
5.3 Authority Relative to this Agreement........................40
5.4 Litigation..................................................41
5.5 Financing...................................................41
5.6 Purchase for Investment.....................................41
5.7 Condition of Acquired Companies.............................41
5.8 Brokers.....................................................42
5.9 No Knowledge of Misrepresentations or Omissions.............42
ARTICLE VI COVENANTS...............................................42
6.1 Implementing Agreement......................................42
6.2 Access to Information and Facilities; Due Diligence
Examination...............................................42
6.3 Additional Representations Certificate......................44
6.4 Preservation of Business....................................45
6.5 Consents and Approvals......................................49
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Page
6.6 Applications in Respect of Communications Licenses..........52
6.7 Acquired Company Debt; Intercompany Debt; Intercompany
Payables..................................................52
6.8 Confidentiality.............................................54
6.9 Resignation of Directors....................................56
6.10 No Further Financial Obligations............................56
6.11 Brokers.....................................................56
6.12 Preservation of Books and Records; Access...................57
6.13 Employees; Employee Benefit Plans...........................57
6.14 Litigation Control and Cooperation..........................59
6.15 Liability Insurance; Directors' and Officers' Insurance.....60
6.16 Support Services............................................60
6.17 Seller Parent Marks.........................................61
6.18 Seller Parent Technical Information.........................62
6.19 Procurement.................................................62
6.20 Removal of Business Customer Records........................63
6.21 Termination of the Intercompany Agreements..................63
6.22 MOVICS Software Licenses....................................63
6.23 Transition Trademark License Agreement......................63
6.24 Assignment of Certain Trademark Rights......................64
6.25 Assignment Back of Seller Parent Intellectual Property
Rights....................................................64
6.26 Non-Compete.................................................64
6.27 Third Party Marketing and Supply Agreements.................66
6.28 Contacts with Employees, Customers and Certain Persons......66
6.29 Alternative Structure.......................................67
6.30 Compliance with Laws........................................68
6.31 Intermediate Holding Companies..............................69
6.32 Chilean Company Transfers...................................69
6.33 Post-Closing Activities.....................................69
6.34 Distribution of Telecom BBS (B.V.I.) Ltd....................71
6.35 Post-Sale Distributions.....................................71
6.36 Peru........................................................71
6.37 Retained Companies and Section 6.29 Retained Companies......72
6.38 Additional Agreements and Arrangements......................72
6.39 MOVICOM and MOVISTAR Marks..................................73
6.40 Discussions with Lenders....................................73
ARTICLE VII CONDITIONS PRECEDENT TO THE CLOSINGS....................74
7.1 Mutual Conditions to the Initial Closing....................74
7.2 Conditions to Obligations of Purchaser......................76
7.3 Conditions to Obligations of Sellers........................77
7.4 Conditions Precedent to Obligations of Sellers and
Purchaser as to Subsequent Closings.......................78
ARTICLE VIII CLOSINGS; CLOSING DELIVERIES............................83
8.1 Closing.....................................................83
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Page
8.2 Initial Closing Deliveries..................................83
8.3 Subsequent Closing Deliveries...............................85
ARTICLE IX TERMINATION.............................................88
9.1 Termination.................................................88
9.2 Effect of Termination.......................................89
9.3 No Right to Terminate After Initial Closing.................89
ARTICLE X INDEMNIFICATION.........................................90
10.1 Survival....................................................90
10.2 Indemnification by Sellers..................................90
10.3 Indemnification by Purchaser................................92
10.4 Limitations on Liability of Sellers.........................94
10.5 Claims......................................................96
10.6 Notice of Third Party Claims; Assumption of Defense.........96
10.7 Settlement or Compromise....................................96
10.8 Time Limits.................................................97
10.9 Net Losses and Subrogation; Offset..........................97
10.10 Adjustments to Aggregate Sellers Allocated Payment..........98
ARTICLE XI SELLER PARENT GUARANTY..................................98
11.1 Sellers Guaranty............................................98
11.2 Seller Waivers and Acknowledgements.........................98
11.3 Remedies....................................................99
11.4 Mergers, Consolidations, Sales.............................100
ARTICLE XII MISCELLANEOUS..........................................100
12.1 Expenses...................................................100
12.2 Amendment..................................................100
12.3 Notices....................................................100
12.4 Payments in Dollars........................................101
12.5 Waivers....................................................101
12.6 Assignment.................................................102
12.7 No Third Party Beneficiaries...............................102
12.8 Publicity..................................................102
12.9 Further Assurances.........................................102
12.10 Severability...............................................102
12.11 Entire Understanding.......................................102
12.12 Language...................................................103
12.13 Applicable Law.............................................103
12.14 Arbitration................................................103
12.15 Schedules..................................................104
12.16 Mutual Release.............................................105
12.17 Seller Representative......................................105
12.18 Counterparts...............................................106
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TABLE OF CONTENTS
EXHIBITS
Exhibit A BIPHO Transition License Agreement
Exhibit B Transition Trademark License Agreement
Exhibit C Additional Representations Certificate
SCHEDULES*
Schedule I Sellers
Schedule II Acquired Companies
Schedule II-A Subsidiaries
Schedule 1.1A Permitted Liens
Schedule 1.1B Sellers' knowledge
Schedule 1.1C Sellers Stockholder Debt
Schedule 1.1D Venezuelan Arbitration
Schedule 1.1E Intercompany Debt Receivables and Intercompany Debt
Schedule 1.1F Peruvian Arbitration
Schedule 1.1G Valuation Firms
Schedule 1.1H Purchaser's knowledge
Schedule 2.2(b) Allocated Values and Allocation Percentage
Schedule 2.2(c) Example Calculation
Schedule 3.1(a) Minority Equity Holders
Schedule 3.1(b) Minority Equity Agreements
Schedule 3.1(c) Required Minority Equity Holder Approvals
Schedule 3.3(a) Rights of First Refusal
Schedule 4.1 Ownership of Capital Stock Other Than Equity
Interests of Subsidiaries
Schedule 4.3 Potential Conflicts
Schedule 4.4 Capitalization
Schedule 4.4(b) Rights With Respect to Equity Interests
Schedule 4.5 Financial Statements
Schedule 4.6 Adverse Effects or Changes
Schedule 4.7 Defaults or Violations
Schedule 4.8 Litigation
Schedule 4.11 Intermediate Holding Company Assets, Obligations and
Liabilities
Schedule 5.3 Purchaser Violations
Schedule 6.2(a) Purchaser Due Diligence
Schedule 6.4(a) 2004 Budget
Schedule 6.4(c) Retention Plan Guidelines
Schedule 6.5(b) Action of Divestiture
Schedule 6.10 BellSouth Guarantees
Schedule 6.13(d) Special Severance Agreements
Schedule 6.24 Latin America Marks
Schedule 6.31 Retained Intermediate Holding Companies
Schedule 6.40 Financing Committee
* The Issuer agrees to furnish supplementally a copy of any omitted schedule to
the Securities and Exchange Commission upon request.
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STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made as of the 5th day of March, 2004, by and among
Telefonica Moviles, S.A., a corporation organized under the laws of the Kingdom
of Spain ("PURCHASER"), each of the entities listed on SCHEDULE I, each of which
is organized under the laws of the jurisdiction set forth opposite its name on
SCHEDULE I (each, a "SELLER" and collectively, the "SELLERS") and, for purposes
of SECTIONS 3.1(e), 6.13(b), 6.16, 6.17, 6.18, 6.19, 6.20, 6.21, 6.23, 6.24,
6.25, 6.26, 6.38, 6.40, 8.2 and 8.3 and ARTICLES X, XI and XII only, BellSouth
Corporation, a corporation organized under the laws of the State of Georgia
("SELLER PARENT"). Certain capitalized terms used herein are defined in
ARTICLE I.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Seller Parent owns, directly or indirectly, all of the issued
and outstanding capital stock of each of the Sellers;
WHEREAS, Sellers own, directly or indirectly, Equity Interests in,
and/or Debt (including Sellers Stockholder Debt) of, the operating companies set
forth in Column 1 of SCHEDULE II and the Subsidiaries (as hereinafter defined)
of such operating companies as set forth in SCHEDULE II-A (collectively, the
"OPERATING COMPANIES");
WHEREAS, Sellers own, directly or indirectly, Equity Interests in (a)
certain entities that own, directly or indirectly, Equity Interests of the
Operating Companies as set forth in Column 2 of SCHEDULE II and (b) certain
wholly-owned Subsidiaries of such entities that hold no direct or indirect
Equity Interests in the Operating Companies (collectively, the "INTERMEDIATE
HOLDING COMPANIES");
WHEREAS, Column 3 of SCHEDULE II sets forth a list of Operating
Companies and Intermediate Holding Companies in which Sellers directly own
Equity Interests as of the date hereof (the "DIRECT ACQUIRED COMPANIES"), and
the percentage of Equity Interests owned by Sellers in each such Direct Acquired
Company (such Equity Interests, as may be adjusted or otherwise modified from
time to time in accordance with the terms of this Agreement, the "SELLERS EQUITY
INTERESTS"), which Sellers Equity Interests represent all of the Sellers' direct
or indirect ownership interest in the Equity Interests of the Operating
Companies and Intermediate Holding Companies;
WHEREAS, the Operating Companies are engaged, directly or indirectly,
in the business of providing communications services in, and to and from, the
countries of Xxxxxxxxx, Xxxxx, Xxxxxxxx, Xxxxxxx, Xxxxxxxxx, Xxxxxxxxx, Xxxxxx,
Xxxx, Xxxxxxx and Venezuela, including other activities incidental to the
foregoing (the "BUSINESS"); and
WHEREAS, under the terms and conditions provided for in this Agreement,
Purchaser wishes to purchase from each of the Sellers, and each of the Sellers
wishes to sell to Purchaser, the Sellers Equity Interests or, with respect to
any Sellers Equity Interests that are transferred to a Holding Company, the
Holding Company Equity Interests, in each case free and clear of any Liens other
than Certain Permitted Liens upon the terms and subject to the conditions
contained herein;
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements herein contained, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. The following terms shall have the following meanings for
the purposes of this Agreement:
"2004 BUDGET" shall have the meaning set forth in SECTION 6.4(a).
"ACCOUNTING FIRM" shall have the meaning set forth in SECTION 2.4(c).
"ACCOUNTING FIRM ADJUSTMENT STATEMENT" shall have the meaning set forth
in SECTION 2.4(c).
"ACQUIRED COMPANIES" shall mean the Operating Companies, the
Intermediate Holding Companies and any Holding Companies; PROVIDED, HOWEVER,
that any Acquired Company that is determined to be a Retained Company, a Section
6.29 Retained Company or a ROFR Company will, from and after the Retained
Company Determination Date, the Section 6.29 Determination Date or the ROFR
Determination Date, as applicable, no longer be considered to be an Acquired
Company for purposes of this Agreement, except as otherwise expressly provided
in this Agreement or to the extent that any references to Acquired Companies
could not reasonably be interpreted to exclude Retained Companies, Section 6.29
Retained Companies and ROFR Companies.
"ACQUIRED COMPANIES LOSS CONTINGENCIES RESERVES" shall mean the
reserves of the Acquired Companies in respect of litigation, claims or
assessments (as defined and provided in U.S. GAAP) as of November 30, 2003
determined in accordance with U.S. GAAP consistently applied but without any
reduction for materiality or disclosure thresholds.
"ACQUIRED COMPANY CASH" shall mean, without duplication, the Cash of
any Acquired Company.
"ACQUIRED COMPANY DEBT" shall mean, without duplication, the Debt,
including Stockholder Debt, of any Acquired Company.
"ACQUIRED COMPANY ORGANIZATIONAL DOCUMENTS" shall mean, with respect to
each Acquired Company, the certificate of incorporation, by-laws or analogous
organizational documents of such entity.
"ACTION OF DIVESTITURE" shall mean the request of or requirement by a
Governmental Authority of competent jurisdiction in connection with the
transactions contemplated by this Agreement (a) providing for the sale, license
or other disposition or holding separate (through the establishment of a trust
(other than any trust of which Purchaser or any of its Affiliates or any
Acquired Company is not the beneficial owner), escrow or other similar
arrangement) of any assets or categories of assets, rights, properties,
businesses, customer relationships or lines of
business, in each case, of Purchaser, any of its Affiliates or the Acquired
Companies, (b) imposing or seeking to impose any restriction or limitation on
the ability of Purchaser, any of its Affiliates and/or the Acquired Companies to
conduct their respective businesses or own their respective assets in the manner
and under the terms currently conducted or to acquire, hold or exercise rights
of ownership of the Equity Interests of the Acquired Companies and the Business,
which restriction or limitation would reasonably be expected to result in the
loss of value associated with the Acquired Company or (c) imposing any
restriction, limitation or other conditions with adverse economic consequences
on Purchaser, any of its Affiliates or the Acquired Companies.
"ACTION OF DIVESTITURE FAIR VALUE" shall mean,
(a) with respect to Actions of Divestiture required by a
Governmental Order in connection with the Argentinian Acquired Company, (i) the
fair market value of the Argentinian Acquired Company and Telefonica Moviles
Argentina, S.A. and its Subsidiaries, on a combined basis, assuming no Actions
of Divestiture with respect to such Persons, as determined by the Valuation
Firm, MINUS (ii) the fair market value of the Argentinian Acquired Company and
Telefonica Moviles Argentina, S.A. and its Subsidiaries, on a combined basis,
after giving effect to any adverse economic consequences as a result of such
Actions of Divestiture with respect to such Persons, as determined by the
Valuation Firm; and
(b) with respect to Actions of Divestiture required by a
Governmental Order in connection with the Chilean Acquired Company, (i) the fair
market value of the Chilean Acquired Company and Telefonica Movil (Chile), S.A.
and its Subsidiaries, on a combined basis, assuming no Actions of Divestiture
with respect to such Persons, as determined by the Valuation Firm, MINUS (ii)
the fair market value of the Chilean Acquired Company and Telefonica Movil
(Chile), S.A. and its Subsidiaries, on a combined basis, after giving effect to
any adverse economic consequences as a result of such Actions of Divestiture
with respect to such Persons, as determined by the Valuation Firm;
PROVIDED, HOWEVER, that, in each case, (A) any adverse economic consequences
with respect to any synergies, cost reductions or benefits from (or any
synergies, cost reductions or benefits expected or anticipated to result from)
(1) in the case of the Argentinian Acquired Company, the combination or
consolidation of the Argentinian Acquired Company and Telefonica Moviles
Argentina, S.A. and its Subsidiaries, and (2) in the case of the Chilean
Acquired Company, the combination or consolidation of the Chilean Acquired
Company and Telefonica Movil (Chile), S.A. and its Subsidiaries, shall, in each
case, be disregarded in connection with such determination by the Valuation
Firm, and (B) any proceeds, benefits or positive economic effects as a result of
such Actions of Divestiture (including as a result of the sale, license or other
disposition of any assets or categories of assets, rights, properties,
businesses, customer relationships or lines of business) shall be used to offset
any adverse economic consequences as a result of such Actions of Divestiture in
connection with such determination by the Valuation Firm; PROVIDED, FURTHER,
that with respect to any Person that is subject to an Action of Divestiture for
which the fair market value is being calculated as described above in this
definition that is not wholly owned, directly or indirectly, by Purchaser and
its Affiliates, the Action of Divestiture Fair Value calculation set forth above
with respect to any such Person shall be decreased by the product of (a) the
Action of Divestiture Fair Value with respect to any such Action of
Divestiture, as determined by the Valuation Firm, MULTIPLIED BY (b) the
percentage ownership (expressed as a decimal) in the Person subject to any such
Action of Divesture that is not wholly owned, directly or indirectly, by
Purchaser and its Affiliates.
"ACTION OF DIVESTITURE THRESHOLD" shall have the meaning set forth in
SECTION 6.5(b).
"ACTUAL INITIAL REVENUE AMOUNT" shall have the meaning set forth in
SECTION 7.2(e).
"ACTUAL SUBSEQUENT REVENUE AMOUNT" shall have the meaning set forth in
SECTION 7.4(b)(ii).
"ADDITIONAL REPRESENTATIONS CERTIFICATE" shall have the meaning set
forth in SECTION 6.3(a).
"AFFILIATE" shall mean, with respect to any specified Person, any other
Person which, directly or indirectly, controls, is under common control with, or
is controlled by, such specified Person; PROVIDED, that Cingular Wireless LLC,
Cingular Wireless Corporation and their respective Subsidiaries and Affiliates
(collectively, the "CINGULAR ENTITIES") will not, for any purposes of this
Agreement, be considered to be an Affiliate of Sellers or Seller Parent (and
Sellers and Seller Parent and their respective Subsidiaries and Affiliates shall
not be deemed to be Affiliates of the Cingular Entities for purposes of this
exclusion). For purposes of this Agreement, CTC Chile, S.A. and its Subsidiaries
shall be deemed to be an Affiliate of Purchaser and its Subsidiaries and
Affiliates. The term "control" as used in the preceding sentence shall mean,
with respect to a corporation, the right to exercise, directly or indirectly,
more than 50% of the voting rights attributable to the shares of the controlled
corporation, or with respect to any Person other than a corporation, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person.
"AGGREGATE SELLERS ALLOCATED PAYMENT" shall mean the aggregate sum of
the Sellers Allocated Payments payable with respect to all of the Acquired
Companies.
"AGREEMENT" shall mean this Stock Purchase Agreement, including all
Exhibits and Schedules hereto, as it may be amended, modified or supplemented
from time to time in accordance with its terms.
"ALLOCATED PURCHASE PRICE" shall have the meaning set forth in
SECTION 2.2(a).
"ALTERNATIVE PERUVIAN TRANSACTION" shall have the meaning set forth in
SECTION 6.36(b).
"ALTERNATIVE STRUCTURE EVENT" shall have the meaning set forth in
SECTION 6.29.
"ARGENTINIAN ACQUIRED COMPANY" shall mean, collectively, (a) any
Acquired Company that owns, directly or indirectly, any Acquired Company that
operates primarily in Argentina and (b) any Acquired Company that operates
primarily in Argentina and any Subsidiaries thereof.
"ASSIGNMENT AND ASSUMPTION AGREEMENT" shall mean an assignment and
assumption agreement pursuant to which Purchaser agrees to assume all
liabilities and obligations of Sellers
under the Minority Equity Agreements and, if applicable, the Acquired Company
Organizational Documents as described in SECTION 3.1(g).
"BELLSOUTH ENTITIES" shall mean Seller Parent, Sellers and their
respective Affiliates (other than the Acquired Companies).
"BELLSOUTH ENTITIES OWED AMOUNTS" shall have the meaning set forth in
SECTION 3.2(b).
"BELLSOUTH GUARANTEE" shall have the meaning set forth in SECTION 6.10.
"BIPHO TRADEMARK LICENSE AGREEMENT" shall mean those certain existing
license agreements covering the license of the "XXXX" trademarks to the Acquired
Companies.
"BIPHO TRANSITION LICENSE AGREEMENT" shall mean an agreement that
grants certain temporary rights to use the "XXXX" trademarks to the Acquired
Companies that is to be entered into by the applicable Acquired Companies and
Xxxx IP Holdings, LLC as of the applicable Closing Date, substantially in the
form of EXHIBIT A.
"BUSINESS" shall have the meaning set forth in the recitals to this
Agreement.
"BUSINESS CUSTOMER RECORDS" shall mean the name, address and other
information pertaining to a customer of the Business that is held by Sellers or
any Acquired Company, but excluding any such information to the extent it falls
within any of the following categories: (a) Sellers have received such
information from the customer in connection with the activities outside of the
Business, including services provided in or from the United States, (b) the
information is publicly available or (c) Purchaser has consented to Sellers'
retention of the information.
"BUSINESS DAY" shall mean any day other than (a) any Saturday or Sunday
or (b) any other day on which banks located in Madrid, Spain or New York, New
York generally are closed for business.
"BUSINESS INTELLECTUAL PROPERTY" shall mean Intellectual Property
Rights either owned or licensed by an Acquired Company and utilized in the
conduct of the Business.
"CASH" shall mean, with respect to any Person, cash and cash
equivalents (including cash on deposit or subject to Cash Permitted Liens or
receivable in relation to accrued interest) and marketable securities (as
defined under U.S. GAAP) of such Person measured in Dollars or Dollar
Equivalents and calculated in accordance with U.S. GAAP applied on a consistent
basis (except with respect to Venezuelan Bolivars which shall be deemed to have
a fixed exchange rate equal to Three Thousand One Hundred and Fifty (3,150)
Venezuelan Bolivars to One Dollar ($1)). For purposes of any determination of
"CASH" under this Agreement, the aggregate amount of all Cash (i) shall be
calculated without giving effect to any cash payments in respect of any
Intercompany Debt and Intercompany Debt Receivables and any Stockholder Debt
(but not any penalties or premiums thereon on any Seller Stockholder Debt)
required to be made under this Agreement at, or otherwise in connection with,
the Initial Closing or any Subsequent Closing of the transactions contemplated
hereby (including any Take-Along Closing), but the aggregate amount of Cash will
be calculated by giving effect to any other payments by an Acquired
Company to Sellers and its Affiliates in connection with this Agreement and the
Closings thereunder and, (ii) shall be subject to adjustment such that, in the
event that the Derivative Amount is (A) a positive number, there shall be added
to the aggregate amount of Cash the amount, if any, by which the Derivative
Amount exceeds Ten Million Dollars ($10,000,000), or (B) a negative number,
there shall be deducted from the aggregate amount of Cash the amount, if any, by
which the Derivative Amount (expressed as a positive number) exceeds Ten Million
Dollars ($10,000,000).
"CASH PERMITTED LIENS" shall mean, collectively, all Permitted Liens
that are identified in CLAUSES (a), (b), (e) and (f) of the definition of
Permitted Liens.
"CERTAIN PERMITTED LIENS" shall mean, collectively, all Permitted Liens
that are described in CLAUSES (a), (e) and (h) of the definition of "Permitted
Liens".
"CERTIFYING OPERATING COMPANY" shall have the meaning set forth in
SECTION 6.3(a).
"CHILEAN ACQUIRED COMPANY" shall mean, collectively, (i) any Acquired
Company that owns, directly or indirectly, any Acquired Company that operates
primarily in Chile and (ii) any Acquired Company that operates primarily in
Chile and any Subsidiaries thereof.
"CLOSING" shall mean the Initial Closing and any Subsequent Closing.
"CLOSING DATE" shall mean each date on which a Closing occurs.
"CLOSING DATE ADJUSTMENT STATEMENT" shall have the meaning set forth in
SECTION 2.4(b).
"CODE" shall mean the United States Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated thereunder.
"COLOMBIAN ACQUIRED COMPANY" shall mean, collectively, (a) any Acquired
Company that owns, directly or indirectly, any Acquired Company that operates
primarily in Colombia, and (b) any Acquired Company that operates primarily in
Colombia and any Subsidiaries thereof.
"COMMUNICATIONS LICENSES" shall mean all licenses, permits,
certificates, franchises, concessions, registrations and other authorizations
issued by the appropriate Governmental Authority that are required for the
conduct of the business of the Acquired Companies as presently conducted, and
for the operation and holding of their respective assets.
"CONFIDENTIAL INFORMATION" shall have the meaning set forth in
SECTION 6.8(a).
"CONFIDENTIALITY AGREEMENT" shall have the meaning set forth in
SECTION 6.8(a).
"CONTINGENCY FIRM" shall have the meaning set forth in SECTION 6.3(b).
"CONTINUING EMPLOYEES" shall have the meaning set forth in
SECTION 6.13(a).
"CONTRACT" shall mean any contract, agreement, lease, license, sales or
work order or other legally binding commitment, obligation, undertaking or
arrangement, whether oral or written, express or implied (including any mortgage
or indenture).
"CRM" shall mean Compania de Radiocomunicaciones Moviles, S.A.
"DEBT" shall mean, with respect to any Person, (a) all indebtedness of
such Person for borrowed money and all accrued but unpaid interest (including
withholding taxes thereon) thereon, including any Intercompany Debt, and (b) all
obligations of such Person evidenced by notes, bonds, debentures or similar
instruments measured in Dollars or Dollar Equivalents and calculated in
accordance with U.S. GAAP applied on a consistent basis (except with respect to
Venezuelan Bolivars which shall be deemed to have a fixed exchange rate equal to
Three Thousand One Hundred and Fifty (3,150) Venezuelan Bolivars to One
Dollar ($1)), in each case, for purposes of ARTICLES II and III exclusive of any
prepayment premiums or penalties, or any other fees, expenses, indemnities or
other amounts payable with respect thereto. Notwithstanding the foregoing, in no
event shall Debt include reimbursement or other obligations under undrawn
letters of credit, any currency, interest rate, swap or other hedging or
derivative instruments or agreements, sale and leaseback transactions, capital
or other leases or other long-term liabilities or arrangements.
"DERIVATIVE AMOUNT" shall mean the aggregate gain or loss, expressed as
either a positive or negative number, based on the fair value on a
xxxx-to-market basis of all Derivative Instruments of any Person, all as
determined by reference to the average of rates or quotes by two of the banks
set forth in SCHEDULE 1.1(G).
"DERIVATIVE INSTRUMENTS" shall mean any currency, interest rate, swap
or other hedging or derivative transaction or instrument.
"DETERMINATION DATE" shall have the meaning set forth in
SECTION 2.4(d).
"DIRECT ACQUIRED COMPANIES" shall have the meaning set forth in the
recitals to this Agreement.
"DOLLAR EQUIVALENT" shall mean, with respect to any Cash or Debt
denominated in a currency other than Dollars, the amount of Dollars into which
such Cash or the principal amount of such Debt could be converted at the
applicable Exchange Rate.
"DOLLARS" or numbers preceded by the symbol "$" shall mean amounts in
United States Dollars.
"DUE DILIGENCE COMMENCEMENT DATE" shall have the meaning set forth in
SECTION 6.2(b).
"DUE DILIGENCE EXPIRATION DATE" shall have the meaning set forth in
SECTION 6.2(b).
"DUTCH RESIDENCY CERTIFICATE" shall mean a proper and adequate
certificate issued by The Netherlands Tax Administration that an entity shall be
treated as a resident of The Netherlands for tax purposes. For purposes of
clarification, in the case of Xxxx Holdings, the certificate must
establish that it is a resident of The Netherlands for purposes of the Treaty
for the Prevention of Double Taxation between The Netherlands and Venezuela.
"EMPLOYEE BENEFIT PLANS" shall have the meaning set forth in
SECTION 6.13(a).
"ENFORCEABILITY LIMITATIONS" shall have the meaning set forth in
SECTION 4.2.
"ENVIRONMENTAL LAW" shall mean any Law, each as in effect on or prior
to the date hereof, that imposes liability or standards of conduct concerning
discharges, emissions, releases or threatened releases of noises, odors or any
pollutants, contaminants or hazardous or toxic wastes, substances or materials,
whether as matter or energy, into ambient air, water or land, or otherwise
relating to the manufacture, processing, generation, distribution, use,
treatment, storage, disposal, cleanup, transport or handling of Hazardous
Substances.
"ENVIRONMENTAL WARRANTY" shall mean a representation or warranty in
SECTION 1.17 of the Additional Representations Certificate.
"EQUITY INTEREST" shall mean, with respect to any Person, the issued
and outstanding equity securities, quotas, rights, warrants, options,
convertible securities or indebtedness, exchangeable securities or indebtedness,
or other rights, exercisable for or convertible or exchangeable into, directly
or indirectly, equity securities of the subject Person and securities
convertible or exchangeable into equity securities of the subject Person,
calculated on a fully diluted basis, whether at the time of issuance or upon the
passage of time or the occurrence of some future event.
"ESCROW AGENT" shall have the meaning set forth in SECTION 2.3.
"ESCROW AGREEMENT" shall have the meaning set forth in SECTION 2.3.
"ESTIMATED ACQUIRED COMPANY CASH" shall have the meaning set forth in
SECTION 2.4(a).
"ESTIMATED ACQUIRED COMPANY DEBT" shall have the meaning set forth in
SECTION 2.4(a).
"EXCESS INITIAL REVENUE AMOUNT" shall mean the amount by which the
Actual Initial Revenue Amount exceeds the Initial Revenue Threshold Amount.
"EXCESS SUBSEQUENT REVENUE AMOUNT" shall mean, with respect to any
Subsequent Closing, the amount by which the Actual Subsequent Revenue Amount
exceeds the Subsequent Revenue Threshold Amount, in each case for such
Subsequent Closing.
"EXCHANGE RATE" shall mean, with respect to any currency,
notwithstanding the usage of different exchange rates or reflected in the
Financial Statements, utilized by U.S. GAAP or announced as official exchange
rates or reflected in foreign exchange or currency markets, the average of the
applicable exchange rate as published by The Wall Street Journal, Eastern
Edition, or if such rate is not available for any jurisdiction, the average of
the exchange rate announced by the central bank for such jurisdiction during the
five (5) Business Day period immediately preceding the applicable Closing Date
or such earlier date that is permitted to be utilized under SECTION 2.4(a) or
the date on which a party asserts a claim hereunder, as the case
may be, except with respect to Venezuelan Bolivars which shall be deemed to have
a fixed exchange rate equal to Three Thousand One Hundred and Fifty (3,150)
Venezuelan Bolivars to One Dollar ($1).
"FINAL ACQUIRED COMPANY CASH" shall have the meaning set forth in
SECTION 2.4(d).
"FINAL ACQUIRED COMPANY DEBT" shall have the meaning set forth in
SECTION 2.4(d).
"FINAL ACQUIRED COMPANY INTERCOMPANY DEBT RECEIVABLES" shall have the
meaning set forth in SECTION 2.4(d).
"FINAL ADJUSTMENT PAYMENT DATE" shall have the meaning set forth in
SECTION 2.4(d).
"FINAL CLOSING DATE" shall mean the date on which the last Subsequent
Closing under the Agreement occurs or, if there are no Subsequent Closings, the
Initial Closing Date.
"FINAL LOSS CONTINGENCIES AND IMPAIRMENT LOSSES AMOUNT" shall have the
meaning set forth in SECTION 6.3(b).
"FINANCING COMMITTEE" shall have the meaning set forth in SECTION 6.40.
"FINANCIAL STATEMENTS" shall have the meaning set forth in SECTION 4.5.
"FIXED LOSS CONTINGENCIES AND IMPAIRMENT LOSSES AMOUNT" shall have the
meaning set forth in SECTION 6.3(b).
"GOVERNMENTAL AUTHORITY" shall mean the government of the United
States, Spain, Argentina, Chile, Colombia, Ecuador, Guatemala, Nicaragua,
Panama, Peru, Uruguay and Venezuela or any other country or any state, province
or other political subdivision thereof or any entity, body, regulatory or
administrative authority, agency, commission, court, tribunal or judicial body
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, including any quasi-governmental
entity established to perform such functions.
"GOVERNMENTAL ORDER" shall mean any order, writ, judgment, injunction,
decree, stipulation, determination, award, approval, consent, authorization or
agreement entered by or with any Governmental Authority.
"HAZARDOUS SUBSTANCES" shall mean all substances, wastes, pollutants,
contaminants and materials regulated, or defined or designated as hazardous,
dangerous, or toxic, pursuant to any Environmental Law or any other Law,
including hazardous substances, oils, pollutants or contaminants.
"HOLDING COMPANIES" shall mean one or more entities that may be formed
or organized by Sellers prior to the Initial Closing Date to satisfy the Closing
condition set forth in SECTION 7.2(f).
"HOLDING COMPANY EQUITY INTERESTS" shall mean the issued and
outstanding Equity Interests in the Holding Companies.
"ICC RULES" shall have the meaning set forth in SECTION 12.14(a).
"IMPAIRMENT LOSSES" shall mean any permanent impairment loss (as
defined in and provided in U.S. GAAP) in respect of long-lived assets of the
Acquired Companies that require financial statement disclosure (but disregarding
for this purpose any materiality thresholds that would have been otherwise
applied by Sellers to such impairment loss pursuant to U.S. GAAP) that are (i)
disclosed by Sellers or any Acquired Company in the schedules attached to the
Additional Representation Certificates or (ii) discovered by Purchaser pursuant
to its due diligence review pursuant to SECTION 6.2 and identified as an
"Impairment Loss" for this purpose prior to the Due Diligence Expiration Date,
pursuant to SECTION 6.3(b), PROVIDED, that Impairment Losses for this purpose
under this Agreement will not include (x) any impairment losses or assets
identified as obsolete or discontinued in the Financial Statements, and (y)
items or matters otherwise eligible for Impairment Losses to the extent that
insurance or third party claim proceeds are recoverable or likely to be
recovered within one year following such item or matter.
"INDEMNIFIED PERSON" shall mean the Person or Persons entitled to, or
claiming a right to, indemnification under ARTICLE X.
"INDEMNIFYING PERSON" shall mean the Person or Persons claimed by the
Indemnified Person to be obligated to provide indemnification under ARTICLE X.
"INDIVIDUAL MATERIAL ADVERSE EFFECT" shall mean obligations,
liabilities, occurrences, agreements or circumstances that would involve the
expenditure of more than Ten Million Dollars ($10,000,000), in the aggregate, in
the case of any Acquired Company listed on Schedule 1 to the Additional
Representations Certificate, or Twenty-Five Million Dollars ($25,000,000), in
the aggregate, in the case of any Acquired Company listed on Schedule 2 to the
Additional Representations Certificate, or any material adverse effect,
development or change in relation to the business, properties, assets, financial
condition, results or prospects of each group of Acquired Companies whose
functions or operations relate to a given country (each group to be taken
separately), PROVIDED that any such effects, developments or changes resulting
from or attributable to any of the following will be disregarded for this
purpose: (a) the announcement, implementation and closing of this Agreement and
the transactions and matters contemplated thereby, including any breach or
violation by Purchaser of this Agreement and the agreements contemplated thereby
and the consequences thereof, (b) any Known Debt Defaults and any further
defaults, restructurings, modifications of any Debt of the Acquired Companies,
including discussions, negotiations, proposals and solicitations relating
thereto or any downgrading of such Debt, (c) general economic or business
conditions involving the United States or any country in which Purchaser,
Sellers or any Acquired Company conducts its principal business and (d) changes
affecting the industries generally in which the Business operates.
"INITIAL ACQUIRED COMPANIES" shall have the meaning set forth in
SECTION 8.1(a).
"INITIAL CLOSING" shall mean the closing of the sale of the Sellers
Equity Interests relating to the Equity Interests of the Initial Acquired
Companies.
"INITIAL CLOSING DATE" shall mean the date on which the Initial Closing
occurs or is to occur.
"INITIAL CLOSING LEGAL PROHIBITION" shall have the meaning set forth in
SECTION 7.1(a).
"INITIAL CLOSING REQUIRED MINORITY EQUITY HOLDER APPROVALS" shall have
the meaning set forth in SECTION 7.1(c).
"INITIAL CLOSING REQUIRED REGULATORY APPROVALS" shall have the meaning
set forth in SECTION 7.1(b).
"INITIAL REVENUE AMOUNT" shall have the meaning set forth in
SECTION 7.2(e).
"INITIAL REVENUE DETERMINATION PERIOD" shall have the meaning set forth
in SECTION 7.2(e).
"INITIAL REVENUE THRESHOLD AMOUNT" shall mean the amount equal to
ninety (90%) of the Initial Revenue Amount.
"INTELLECTUAL PROPERTY RIGHT" shall mean any trademark, service xxxx,
trade name, patent, trade secret, copyright, or domain name (including any
registrations or applications for registration of any of the foregoing).
"INTERCOMPANY DEBT" shall mean Debt of an Acquired Company that is
payable to another Acquired Company (including any Non-Transferred Company). As
of the date hereof, the Intercompany Debt consists of the loans and amounts set
forth on SCHEDULE 1.1E.
"INTERCOMPANY DEBT RECEIVABLES" shall mean Debt that is owed to an
Acquired Company (including any Non-Transferred Company) by another Acquired
Company. As of the date hereof, the Intercompany Debt Receivables consist of the
loans and amounts set forth on SCHEDULE 1.1E.
"INTERMEDIATE HOLDING COMPANIES" shall have the meaning specified in
the recitals to this Agreement.
"INTERCOMPANY PAYABLES" shall mean any payables of an Acquired Company
relating to products or services that is payable to another Acquired Company
(including any Non-Transferred Company).
"INTERCOMPANY RECEIVABLES" shall mean any receivables relating to
products and services that is owed to an Acquired Company (including any
Non-Transferred Company) by another Acquired Company.
"KNOWN DEBT DEFAULTS" shall mean the events of default, pending
defaults and prospective defaults of the Acquired Companies that are set forth
on SCHEDULE 4.7.
"LABOR WARRANTY" shall mean a representation or warranty in
SECTION 1.13 of the Additional Representations Certificate.
"LATIN AMERICA MARKS" shall mean those trademarks, including those
marks listed on SCHEDULE 6.24, other than the Seller Parent Marks, that are
currently licensed by Seller Parent to one or more of the Acquired Companies and
currently used by one or more Acquired Companies in connection with the
Business; PROVIDED, HOWEVER, that, other than "MOVICOM", "OTECEL" and "TELCEL",
Latin America Marks shall exclude any rights to such trademarks outside of the
Territory to the extent that either (a) the trademarks are currently and
actively used by Seller Parent or one or more of its Subsidiaries or Affiliates
in any country outside the Territory or (b) the parties mutually agree that such
trademark rights should be retained by Seller Parent.
"LAWS" shall mean all federal, state, local or foreign statutes, rules,
codes, regulations, ordinances, orders, decrees, rules of laws (including common
laws), or governmental requirements enacted, promulgated or imposed by all
Governmental Authorities, including all Environmental Laws binding on or
applicable to Purchaser, Sellers or the Acquired Companies and their respective
Affiliates.
"LICENSE APPLICATIONS" shall have the meaning set forth in SECTION 6.6.
"LIEN" shall mean any lien (except for any lien for Taxes not yet due
and payable), encumbrance, mortgage, pledge or security interest.
"LITIGATION MATTERS" shall have the meaning set forth in SECTION 6.14.
"LOSS" or "LOSSES" shall mean any and all losses, liabilities,
obligations, costs (including costs of investigation), claims, damages, awards,
judgments and expenses (including reasonable legal fees and expenses and
litigation costs), PROVIDED, that such fees, expenses and costs will not include
the compensation of any officers, directors or employees of Purchaser or Sellers
or any overhead allocable to them that is incurred in investigating, defending,
settling or resolving any indemnification claim for which losses are determined.
"LOSS CONTINGENCIES" shall mean any "loss contingencies" in respect of
litigation, claims or assessments (as defined and provided in U.S. GAAP) of the
Acquired Companies or unasserted claims or assessments in respect of litigation,
claims or assessments of the Acquired Companies that require financial statement
disclosure (but disregarding for this purpose any materiality thresholds that
would have otherwise been applied by Sellers to such loss contingencies in the
preparation of the Financial Statements) pursuant to Statement of Financial
Accounting Standard No. 5, that are (i) disclosed by Sellers or any Acquired
Companies in the schedules relating to the Additional Representation
Certificates or (ii) discovered by Purchaser pursuant to its due diligence
review pursuant to SECTION 6.2 and identified by Purchaser as a "Loss
Contingency" for this purpose prior to the Due Diligence Expiration Date
pursuant to SECTION 6.3(b); PROVIDED, that Loss Contingencies for any purpose
under this Agreement will not include any Loss Contingencies disclosed or
referenced in this Agreement or the Schedules hereto, including the Financial
Statements, or any Loss Contingencies in relation to Taxes.
"LOSS CONTINGENCY AND IMPAIRMENT LOSSES SHORTFALL" shall have the
meaning set forth in SECTION 6.3(b).
"MATERIAL ADVERSE EFFECT" shall mean any material adverse effect,
development or change in relation to the business, properties, assets, financial
condition, results or prospects of the
Acquired Companies, taken as a whole, PROVIDED that any such effects,
developments or changes resulting from or attributable to any of the following
will be disregarded for this purpose: (a) the announcement, implementation and
closing of this Agreement and the transactions and matters contemplated hereby,
including any breach or violation by Purchaser of this Agreement and the
agreements contemplated hereby and the consequences thereof, including with
respect to any Action of Divestiture; (b) any Known Debt Defaults and any
further defaults, restructurings, modifications of any Debt of the Acquired
Companies, including discussions, negotiations, proposals and solicitations
relating thereto or any downgrading of such Debt; (c) general economic or
business conditions involving the United States or any country in which
Purchaser, Sellers or any Acquired Company conducts its principal business;
and (d) changes affecting the industries generally in which the Business
operates.
"MINORITY EQUITY AGREEMENTS" shall have the meaning specified in
SECTION 3.1(b).
"MINORITY EQUITY ALLOCATED PAYMENT" shall have the meaning set forth in
SECTION 2.2(b).
"MINORITY EQUITY HOLDER" shall have the meaning specified in
SECTION 3.1(a).
"MINORITY EQUITY HOLDER RIGHTS" shall have the meaning set forth in
SECTION 6.2(a).
"MINORITY EQUITY HOLDERS ALLOCATION PERCENTAGE" shall have the meaning
set forth in SECTION 2.2(b).
"MINORITY EQUITY INTERESTS" shall mean, with respect to any Acquired
Company, the Equity Interests in such Acquired Company not held directly or
indirectly by Sellers.
"MINORITY EQUITY LOSSES" shall mean, with respect to each holder of
Minority Equity Interests in an Acquired Company, the product of (a) any Losses
or, subject to SECTION 6.3(b), any claims relating to the Acquired Companies
Loss Contingencies Reserves or Impairment Losses, or any other Losses incurred
or suffered by Purchaser arising out of any breach of or any inaccuracy in any
representation or warranty made by Seller Parent, any Seller or any Acquired
Company in this Agreement or in the Additional Representations Certificate with
respect to such Acquired Company (other than Losses arising out of any breach of
or any inaccuracy in the Title and Authorization Warranties made by Sellers in
ARTICLE IV of this Agreement), multiplied by (b) the Minority Holders Allocation
Percentage applicable to such Minority Equity Holder with respect to such
Acquired Company.
"MINORITY INTEREST STOCKHOLDER DEBT" shall mean, with respect to any
Acquired Company, any Debt that is owed to any Minority Equity Holder by such
Acquired Company, including any Debt arrangement in which any Minority Interest
Holder provided funds to a bank or other creditor which in turn loaned or
otherwise provided such funds to an Acquired Company.
"NET PROCEEDS" means the fair market value of the net proceeds and
consideration received or payable to Sellers and their Affiliates (other than
any of the Acquired Companies) in connection with any sale or disposition, after
reduction for any Taxes (including income Taxes or other Taxes payable as a
result of any gain or profit), fees, expenses, reimbursements, indemnities,
escrows, reserves or other financial reductions in value applicable to such sale
or disposition, PROVIDED, that, in determining Net Proceeds, (a) any such
proceeds or consideration
received by or payable to Sellers and their Affiliates in respect of any
Stockholder Debt or to the Minority Equity Holders, or to any lenders,
noteholders, creditors or other claimants will be disregarded for this purpose,
(b) any such proceeds or consideration that are subject to indemnification
claims or similar contingencies will not be deemed paid or received for this
purpose until actually paid or received, (c) any such proceeds or consideration
that are subject to future performance will be deemed paid or received at the
closing of any such sale or disposition to the extent that such proceeds or
consideration would be paid in accordance with the "best case" performance
forecasts made in connection with such sale or disposition, (d) any such
proceeds or consideration that are paid in exchange for future products, assets
or services will be disregarded for this purpose and (e) the only income Taxes
taken into account when making this computation are those incurred as a direct
result of the sale or disposition, without taking into account any other Taxes
incurred in connection with this Agreement.
"NETHERLANDS BV" shall mean Besloten vennootschap met beperkte
aansprakelijkheid, a limited liability private company organized under the laws
of The Netherlands.
"NETWORK FACILITIES" shall mean the facilities that are owned, leased
or subject to an indefeasible right to use agreement or other agreement
conferring a right of use by the Acquired Companies.
"NICARAGUAN ACQUIRED COMPANY" shall mean, collectively, (a) any
Acquired Company that owns, directly or indirectly, any Acquired Company that
operates primarily in Nicaragua and (b) any Acquired Company that operates
primarily in Nicaragua and any Subsidiaries thereof.
"NON-TRANSFERRED COMPANY" shall mean an Acquired Company that is
determined to be (a) a Retained Company, (b) a Section 6.29 Retained Company,
(c) a ROFR Company or (d) an Acquired Company, the Sellers Equity Interests of
which have not been transferred prior to the Non-Transferred Company
Determination Date as contemplated in SECTION 9.3.
"NON-TRANSFERRED COMPANY DETERMINATION DATE" shall mean, with respect
to an Acquired Company, December 15, 2004, PROVIDED that if the Closing with
respect to any such Acquired Company shall not have occurred by December 15,
2004 solely because of (i) the failure of (A) the parties to receive any of the
Initial Closing Required Regulatory Approvals or Subsequent Closing Required
Regulatory Approvals with respect to such Acquired Company or (B) any applicable
regulatory waiting period to expire with respect to such Acquired Company or
(ii) the imposition of any Initial Closing Legal Prohibition or Subsequent
Closing Legal Prohibition with respect to such Acquired Company, as the case may
be, such date shall be extended to June 30, 2005; and
"OPERATING COMPANIES" shall have the meaning specified in the recitals
to this Agreement.
"OUTSIDE DATE" shall have the meaning set forth in SECTION 9.1(b).
"OWNED INTELLECTUAL PROPERTY" shall mean Intellectual Property Rights
that are owned by an Acquired Company.
"PAY-OFF DEBT" shall mean all principal, accrued and unpaid interest
and other amounts payable, including any prepayment premiums or penalties, with
respect to any Debt of the type identified on SCHEDULE 4.3(c), SCHEDULE 4.7 and
SCHEDULE 6.10 other than (a) Sellers Stockholder Debt, which is subject to the
provisions of ARTICLE II of this Agreement, (b) Minority Interest Stockholder
Debt, which is subject to the provisions of ARTICLE III of this Agreement and
(c) Intercompany Debt, which is subject to the provisions of
SECTION 6.7(b) and (c) of this Agreement.
"XXXX HOLDINGS" shall mean Xxxx Holdings Corp., a British Virgin
Islands corporation.
"PERMITTED LIENS" shall mean (a) Liens for Taxes that are not yet
delinquent or that are being contested in good faith by appropriate proceedings
for which adequate reserves have been established in accordance with U.S. GAAP;
(b) workers', mechanics', materialmen's, repairmen's, suppliers', carriers' or
similar Liens arising in the ordinary course of business with respect to
obligations that are not delinquent or that are being contested in good faith by
appropriate proceedings; (c) covenants, zoning restrictions, easements,
licenses, or other restrictions on the use of real property or other minor
irregularities in title (including leasehold title) thereto, so long as the same
do not materially impair the use of such real property, leases or leasehold
estates; (d) any minor Liens which do not materially impair the value of the
property subject to such Lien or the use of such property in the conduct of the
business of any Acquired Company; (e) Liens securing Debt or other indebtedness,
obligations or liabilities of the Acquired Companies that are either (i)
disclosed by Sellers or the Acquired Companies on SCHEDULE 1.1A or otherwise
pursuant to this Agreement or (ii) are thereafter provided, granted, incurred or
suffered to exist by them in connection with any amendment, modification,
waiver, restructuring or refinancing of any such Debt, indebtedness, obligations
or liabilities in conformity with this Agreement; (f) Liens securing the
performance of bids, tenders, leases, contracts, statutory obligations, surety,
customs and appeal bonds and other obligations of like nature, incurred in the
ordinary course of business; (g) Liens that arise in the ordinary course of
business in an amount not to exceed Ten Million Dollars ($10,000,000) in the
aggregate for each Acquired Company; (h) Liens arising under the Minority Equity
Agreements, and (i) extensions, renewals and replacements of Liens referred to
in the foregoing clauses (a) through (h).
"PERSON" shall mean any individual, corporation, company,
proprietorship, firm, partnership, limited partnership, limited liability
company, trust, association or other entity.
"PERUVIAN ACQUIRED COMPANY" shall mean BellSouth Peru BVI Limited and
BellSouth Peru S.A.
"PERUVIAN ARBITRATION" shall mean that certain arbitration proceeding
as described in SCHEDULE 1.1F.
"PERUVIAN ARBITRATION AWARD" shall have the meaning set forth in
SECTION 10.9(c).
"PERUVIAN DIFFERENCE" shall have the meaning set forth in
SECTION 6.36(a).
"PERUVIAN DIFFERENCE DETERMINATION" shall have the meaning set forth in
SECTION 6.36(a).
"PURCHASE PRICE ADJUSTMENT FUND" shall have the meaning specified in
SECTION 2.3.
"PURCHASER" shall have the meaning set forth in the preamble to this
Agreement.
"PURCHASER INDEMNIFIED PERSON" shall mean any Affiliate of Purchaser or
any of their respective directors, officers, employees, agents or stockholders
who shall be an Indemnified Person under ARTICLE X.
"PURCHASER LOSS CONTINGENCIES AND IMPAIRMENT LOSSES AMOUNT" shall have
the meaning set forth in SECTION 6.3(b).
"PURCHASER MATERIAL ADVERSE EFFECT" shall mean a material adverse
effect on the ability of Purchaser to perform its obligations under or
consummate the transactions contemplated by this Agreement and the Related
Agreements.
"PURCHASER'S KNOWLEDGE", or any similar expression with regard to the
knowledge or awareness of or receipt of notice by Purchaser, shall mean the
actual, direct and personal knowledge, after due inquiry, of any of the Persons
listed on SCHEDULE 1.1H.
"RELATED AGREEMENT" shall mean any Contract that is or is to be entered
into at the Closing or otherwise pursuant to this Agreement. The Related
Agreements executed by a specified Person shall be referred to as "such Person's
Related Agreements," "its Related Agreements" or other similar expression.
"REPRESENTATIVES" shall have the meaning set forth in SECTION 3.1(c).
"REQUIRED MINORITY EQUITY HOLDER APPROVALS" shall have the meaning
specified in SECTION 3.1(c).
"REQUIRED REGULATORY APPROVALS" shall mean all necessary antitrust,
competition or other regulatory or telecommunications consents, authorizations
or approvals of, or filings or registrations with, any Governmental Authority or
which are otherwise required by Law in connection with the execution, delivery
or performance by Purchaser or Sellers of this Agreement or any of the Related
Agreements or the consummation by Purchaser or Sellers of the transactions
contemplated hereby or thereby; PROVIDED, HOWEVER, that any discretionary filing
with or approval by the Chilean antitrust authorities shall be considered to be
a Required Regulatory Approval.
"RETAINED COMPANY" shall have the meaning set forth in SECTION 6.5(d).
"RETAINED COMPANY DETERMINATION DATE" shall mean, in the event that
Purchaser elects not to take or accept the required Actions of Divestiture with
respect to the Argentinian Acquired Company and/or the Chilean Acquired Company
notwithstanding the fact that the Action of Divestiture Threshold has been
exceeded, the earlier to occur of (a) the final determination of the Action of
Divestiture Fair Value by the Valuation Firm pursuant to SECTION 6.5(c), which
Action of Divestiture Fair Value exceeds, in the aggregate, the Action of
Divestiture Threshold, and (b) the date on which Sellers and Purchaser mutually
agree that the Action of Divestiture Threshold has been exceeded with respect to
such Acquired Companies.
"RETENTION PLANS" shall have the meaning set forth in SECTION 6.4(c).
"REVENUE" shall mean the total service revenues (measured in local
currency and not adjusted for the Exchange Rate or currency or exchange rate
fluctuations) of all of the Initial Acquired Companies calculated using the same
methodology used to prepare the 2003 management reports of BellSouth
International, Inc.
"RIGHT OF FIRST REFUSAL SHARES" shall have the meaning set forth in
SECTION 3.3(a).
"RIGHTS OF FIRST REFUSAL" shall have the meaning set forth in
SECTION 3.3(a).
"ROFR COMPANY" shall have the meaning set forth in SECTION 3.3(a).
"ROFR DETERMINATION DATE" shall have the meaning set forth in
SECTION 3.3(a).
"SECTION 6.29 RETAINED COMPANY" shall have the meaning set forth in
SECTION 6.29(b).
"SECTION 6.29 RETAINED COMPANY DETERMINATION DATE" shall have the
meaning set forth in SECTION 6.29(c).
"SELLER PARENT" shall have the meaning set forth in the preamble to
this Agreement.
"SELLER PARENT XXXX LICENSE AGREEMENTS" shall mean those certain
existing license agreements covering the license of Seller Parent Marks to the
Acquired Companies.
"SELLER PARENT MARKS" shall mean "BellSouth" and "XXXX", the Xxxx logo,
"Alguien En Quien Confiar" and "La Forma De Comunicarse" and any other service
marks, trademarks, trade names, identifying symbols, logos, emblems, signs or
insignia containing or comprising any of the foregoing marks, whether in English
or any other language, and including any name or xxxx confusingly similar
thereto; PROVIDED, HOWEVER, that in the event that any Seller Parent Xxxx
contains both (a) the term "BellSouth," "Xxxx," "Alguien En Quien Confiar," "La
Forma De Comunicarse" and/or any other service marks, trademarks, trade names,
identifying symbols, logos (including the Xxxx logo), emblems, signs or insignia
containing or comprising any of the foregoing marks and (b) any other names,
logos, symbols, emblems, signs or insignia, including "MOVICOM," "OTECEL" or
"TELCEL", it is understood that the term Seller Parent Marks shall refer only to
the names and marks described in CLAUSE (a); PROVIDED, FURTHER, that it is
understood that a third party, Xxxx IP Holding, LLC, is the owner of the "XXXX"
trademarks.
"SELLER PARENT TECHNICAL INFORMATION" shall mean all information
furnished by or on behalf of any Seller, BellSouth International, Inc. or any of
their respective Affiliates to any Acquired Company in connection with a
Technical Services Agreement.
"SELLER REPRESENTATIVE" shall have the meaning set forth in
SECTION 12.17.
"SELLERS" shall have the meaning set forth in the preamble to this
Agreement.
"SELLERS ALLOCATED PAYMENT" shall have the meaning set forth in
SECTION 2.2(b).
"SELLERS ALLOCATED PAYMENT STATEMENT" shall have the meaning set forth
in SECTION 2.4(a).
"SELLERS ALLOCATION PERCENTAGE" shall have the meaning set forth in
SECTION 2.2(b).
"SELLERS EQUITY INTERESTS" shall have the meaning set forth in the
recitals to this Agreement.
"SELLERS INDEMNIFIED PERSON" shall mean any Affiliate of Sellers or any
of their respective directors, officers, employees, agents or stockholders who
shall be an Indemnified Person under Article X.
"SELLERS' KNOWLEDGE", or any similar expression with regard to the
knowledge or awareness of or receipt of notice by Sellers, shall mean the
actual, direct and personal knowledge, after due inquiry, of any of the Persons
listed in SCHEDULE 1.1B; PROVIDED, HOWEVER, that Purchaser acknowledges that
Sellers and the Persons listed in SCHEDULE 1.1B have not consulted with, or
reviewed the books and records of, BellSouth International, Inc., any of the
other Sellers or any Acquired Company and, accordingly, due inquiry does not
include making any inquiries of BellSouth International, Inc., any of the other
Sellers or any Acquired Company; PROVIDED, FURTHER, that, with respect to any
such Person, such knowledge shall include knowledge that is inherent to the
position and responsibility of such Person.
"SELLERS LIABILITIES" shall have the meaning specified in
SECTION 11.1(a).
"SELLERS LOSS CONTINGENCIES AND IMPAIRMENT LOSSES AMOUNT" shall have
the meaning set forth in SECTION 6.3(b).
"SELLERS STOCKHOLDER DEBT" shall mean, with respect to any Acquired
Company, any Debt that is owed to any BellSouth Entity by such Acquired Company,
including any Debt arrangement in which any such BellSouth Entity provided funds
to a bank or other creditor which in turn loaned or otherwise provided such
funds to an Acquired Company; PROVIDED, HOWEVER, that any prepayment or any
other penalties that would be payable together with or in connection with the
repayment of such Debt, other than with respect to any prepayment or other
penalties that arise from the pass-through of any third party costs (which shall
be included in the calculation of Sellers Stockholders Debt), shall be
disregarded and waived by the relevant BellSouth Entity at the applicable
Closing. As of the date hereof, Sellers Stockholder Debt consists of the loans
and amounts set forth on SCHEDULE 1.1C.
"SERVICES TERMINATION LETTER" shall mean a letter confirming the
termination of a Technical Services Agreement, which is to be entered into by
the applicable parties as of the applicable Closing Date, the form of which
shall be mutually agreed to by Purchaser and Sellers.
"STOCKHOLDER DEBT" shall mean, with respect to any Acquired Company,
(a) Sellers Stockholder Debt and (b) Minority Interest Stockholder Debt.
"SUBPART F INCOME" shall have the meaning set forth in Code Section
952. Subpart F income generally includes the receipt by a controlled foreign
corporation (a "CFC") of (a) dividends, interest, rents and royalties, (b) gains
from the disposition of assets which generate dividends, interest, rents or
royalties, (c) fees for the performance of services performed for related
persons outside the CFC's country of incorporation, (d) profits from the sale of
goods
purchased or sold from or to a related party for use outside the CFC's country
of incorporation and (e) net foreign currency gain.
"SUBSEQUENT ACQUIRED COMPANY" shall have the meaning set forth in
SECTION 8.1(b).
"SUBSEQUENT CLOSING" shall mean the closing of the sale of the Sellers
Equity Interests relating to the Equity Interests of any Subsequent Acquired
Company.
"SUBSEQUENT CLOSING DATE" shall mean the date on which any Subsequent
Closing occurs or is to occur.
"SUBSEQUENT CLOSING LEGAL PROHIBITION" shall have the meaning set forth
in SECTION 7.4(a)(i).
"SUBSEQUENT CLOSING REQUIRED MINORITY EQUITY HOLDER APPROVALS" shall
have the meaning set forth in SECTION 7.4(a)(iii).
"SUBSEQUENT CLOSING REQUIRED REGULATORY APPROVALS" shall have the
meaning set forth in SECTION 7.4(a)(ii).
"SUBSEQUENT REVENUE AMOUNT" shall have the meaning set forth in
SECTION 7.4(b)(i).
"SUBSEQUENT REVENUE DETERMINATION PERIOD" shall have the meaning set
forth in SECTION 7.4(b)(i).
"SUBSEQUENT REVENUE THRESHOLD AMOUNT" shall mean the amount equal to
ninety (90%) of the Subsequent Revenue Amount.
"SUBSIDIARY" of any Person shall mean another Person, an amount of the
voting securities, other voting ownership or voting partnership interests of
which is sufficient to elect at least a majority of its board of directors or
other governing body (or, if there are no such voting interests, more than 50%
of the equity interests of which) is owned, directly or indirectly, by such
first Person or by another subsidiary of such first Person. For purposes of
clarification, CTC Chile, S.A. and its Subsidiaries shall not be deemed to be
Subsidiaries of Purchaser.
"TAKE-ALONG CLOSING" shall have the meaning set forth in
SECTION 3.2(c).
"TAKE-ALONG DOCUMENTATION" shall have the meaning set forth in
SECTION 3.2(b).
"TAKE-ALONG OFFER" shall have the meaning set forth in SECTION 3.2(a).
"TAKE-ALONG SELLER" shall have the meaning set forth in SECTION 3.2(c).
"TAKE-ALONG SELLER STOCKHOLDER DEBT" shall mean, with respect to any
Acquired Company, any Minority Interest Stockholder Debt that is owed to a
Take-Along Seller by such Acquired Company.
"TAKE-ALONG TRANSACTIONS" shall have the meaning set forth in
SECTION 3.1(c).
"TAX RETURN" shall mean any report, return or other information
required to be supplied to a Governmental Authority in connection with any
Taxes.
"TAX STATUTE OF LIMITATIONS DATE" shall mean the close of business on
the 45th day after the expiration of the applicable statute of limitations with
respect to Taxes, including any extensions thereof (or if such date is not a
Business Day, the next Business Day).
"TAX WARRANTY" shall mean a representation or warranty in SECTION 1.15
of the Additional Representations Certificate.
"TAXES" shall mean all taxes, charges, fees, duties, levies or other
assessments (including income, gross receipts, net proceeds, ad valorem,
turnover, real and personal property (tangible and intangible), sales, use,
franchise, excise, goods and services, value added, stamp, lease, user,
transfer, fuel, excess profits, occupational, environmental, capital stock,
interest equalization, windfall profits, license, severance, payroll, employee's
income withholding, other withholding, unemployment and social security taxes)
which are imposed by any Governmental Authority, and such term shall include any
interest, penalties or additions to tax attributable thereto.
"TECHNICAL INFORMATION CONFIDENTIALITY AGREEMENT" shall have the
meaning set forth in SECTION 6.18.
"TECHNICAL SERVICES AGREEMENT" shall mean, with respect to each
Acquired Company, the contract described in SECTION 6.21 that relates to the
provision of certain services by BellSouth International, Inc. or its designees
to that Acquired Company or one of their Affiliates and that applies to the
country in which such Acquired Company operates and the similar arrangements
(not documented in a written contract) that exist for any Acquired Companies
operating in Chile.
"TECHNICAL SERVICES SUBCONTRACT" shall mean any subcontract with a
third party covering services provided in connection with a Technical Services
Agreement.
"TERRITORY" shall mean the geographic area in which any Operating
Company that becomes an Initial Acquired Company or a Subsequent Acquired
Company primarily operates as of the applicable Closing Date.
"TITLE AND AUTHORIZATION WARRANTIES" shall mean a representation or
warranty in SECTIONS 4.1(a), 4.2, 4.3, 4.4(a), 4.4(c), 5.1, 5.2, 5.3, 5.6, or
5.7 of this Agreement or in Sections 1.1(a) and 1.2 of the Additional
Representations Certificate.
"TRADEMARK LICENSE TERMINATION LETTER" shall mean a letter confirming
the termination of a trademark license, which is to be entered into by the
applicable parties as of the applicable Closing Date, the form of which shall be
mutually agreed to by Purchaser and Sellers.
"TRANSFER TAXES" shall mean any sales, use, stamp, transfer, service,
recording and like taxes or fees imposed by any Governmental Authority only in
connection with the transfer and assignment of the Sellers Equity Interests and
Sellers Stockholder Debt.
"TRANSITION SERVICES AGREEMENT" shall have the meaning set forth in
SECTION 6.16.
"TRANSITION TRADEMARK LICENSE AGREEMENT" shall mean an agreement that
grants certain temporary rights to use the Seller Parent Marks to the Acquired
Companies that is to be entered into by the applicable Acquired Companies and
Seller Parent as of the applicable Closing Date, substantially in the form of
EXHIBIT B.
"URUGUAYAN ACQUIRED COMPANY" shall mean, collectively, (i) any Acquired
Company that owns, directly or indirectly, any Acquired Company that operates
primarily in Uruguay, and (ii) any Acquired Company that operates primarily in
Uruguay and any Subsidiaries thereof.
"URUGUAYAN OPERATING COMPANY" shall mean the Operating Company listed
in Column 1 of SCHEDULE II that operates primarily in Uruguay.
"U.S. GAAP" shall mean United States generally accepted accounting
principles in the United States applied consistently throughout the periods
involved.
"VALUATION FIRM" shall mean an internationally recognized investment
banking or valuation firm experienced in the telecom industry and either
mutually agreed upon by Purchaser and Sellers or, if the parties are unable to
mutually agree as to such firm within five (5) Business Days, then selected at
random (e.g., by drawing a name from a hat) from the five firms that are listed
on SCHEDULE 1.1G attached hereto, PROVIDED that any firm that has provided
services to any party in connection with the transactions contemplated by this
Agreement may not serve as the Valuation Firm, unless otherwise mutually agreed
between Purchaser and Seller Representative.
"VENEZUELAN ACQUIRED COMPANY" shall mean, collectively, (a) any
Acquired Company that owns, directly or indirectly, any Acquired Company that
operates primarily in Venezuela, and (b) any Acquired Company that operates
primarily in Venezuela and any Subsidiaries thereof.
"VENEZUELAN ARBITRATION" means the UNCITRAL arbitration proceeding
commenced in December 2002 relating to the dispute between Argenta Finance Ltd.
(as Claimant and Counterclaim Respondent No. 1), Xxxxxxx Xxxxxxxx (as
Counterclaim Respondent 2), and BellSouth Enterprises, Inc. (as respondent,
Counterclaimant and Additional Claimant 1) and Telecomunicaciones BBS, C.A. as
Additional Claimant 1 and Telecom BBS (B.V.I) Limited (as Additional Claimant
2), as further described in SCHEDULE 1.1D, and any supplemental or subsequent
arbitral or judicial proceedings arising out of the matters in dispute in such
arbitration.
"VENEZUELAN ARBITRATION AWARD" shall mean the final, binding and
nonappealable decision with respect to the Venezuelan Arbitration.
"VENEZUELAN ARBITRATION AWARD DATE" shall have the meanings specified
in SECTION 3.1(e).
"VENEZUELAN ARBITRATION ENTITY" shall have the meaning specified in
SECTION 3.1(f).
"VENEZUELAN ARBITRATION LOSS RESERVES" shall mean the amount of any
reserves in respect of the claim relating to the payment of a severance or
similar bonus pursuant to the Venezuelan Arbitration reflected in the Financial
Statements of the Venezuelan Arbitration Entities.
"VENEZUELAN ARBITRATION SHARES" shall have the meaning specified in
SECTION 3.1(f).
"VENEZUELAN CALL RIGHT" shall have the meaning set forth in
SECTION 3.1(f).
"VENEZUELAN EQUITY AGREEMENTS" shall mean (a) the Venezuelan Stock
Purchase Agreement, (b) the Amended Telcel Shareholders Agreement, dated
June 23, 1998, among BellSouth Enterprises, Inc., Comtel Comunicaciones
Telefonicas, S.A., Vencorp, Capco, Xxxxxxx Investments Ltd.,
Telecomunicaciones BBS, C.A., Argenta Finance Ltd., Xxxxxxx Xxxxxxxx and
Xxxxxxx Xxxxxxxx and (c) the Comtel Shareholders Agreement, dated on or about
June 23, 1998, by and among BellSouth Enterprises, Inc.,
Telecomunicaciones BBS, C.A., Argenta Finance Ltd. and Xxxxxxx Xxxxxxxx.
"VENEZUELAN PUT RIGHT" shall have the meaning set forth in
SECTION 3.1(f).
"VENEZUELAN STOCK PURCHASE AGREEMENT" shall mean the Stock Purchase
and Reorganization Agreement, dated June 16, 1998, by and among BellSouth
Enterprises, Inc., Comtel Comunicaciones Telefonicas, S.A., Argenta Finance
Ltd. and Xxxxxxx Xxxxxxxx.
"WIRELESS SERVICE BUSINESS" shall have the meaning specified in
SECTION 6.26(a).
1.2 INTERPRETATION. The headings preceding the text of Articles and
Sections included in this Agreement and the headings to Schedules attached to
this Agreement are for convenience only and shall not be deemed part of this
Agreement or be given any effect in interpreting this Agreement. The use of the
masculine, feminine or neuter gender or the singular or plural form of words
herein shall not limit any provision of this Agreement. The use of the terms
"including" or "include" shall in all cases herein mean "including, without
limitation" or "include, without limitation," respectively. Reference to any
Person includes such Person's successors and assigns to the extent such
successors and assigns are permitted by the terms of any applicable agreement,
and reference to a Person in a particular capacity excludes such Person in any
other capacity or individually. Reference to any agreement (including this
Agreement), document or instrument means such agreement, document or instrument
as amended or modified and in effect from time to time in accordance with the
terms thereof and, if applicable, the terms hereof. Underscored references to
Articles, Sections, clauses, Exhibits or Schedules shall refer to those portions
of this Agreement. The use of the terms "hereunder," "hereof," "hereto" and
words of similar import shall refer to this Agreement as a whole and not to any
particular Article, Section or clause of, or Exhibit or Schedule to, this
Agreement.
ARTICLE II
SALE AND PURCHASE OF SELLERS EQUITY INTERESTS
2.1 SALE AND PURCHASE. Subject to the terms and conditions of this
Agreement, at the Initial Closing and any Subsequent Closing, Sellers shall
sell, assign, transfer and deliver to Purchaser or one or more Affiliates of
Purchaser (as designated by Purchaser, subject to SECTION 12.6, prior to the
applicable Closing Date), and Purchaser or one or more Affiliates of Purchaser
(as designated by Purchaser, subject to SECTION 12.6, prior to the applicable
Closing Date) shall purchase and acquire from Sellers and take assignment and
delivery from Sellers of, the Sellers Equity Interests for which the conditions
precedent set forth in ARTICLE VII have been
satisfied or waived (either directly or, if such Sellers Equity Interests have
been transferred to a Holding Company, through the transfer of any Holding
Company Equity Interests), free and clear of all Liens, other than Certain
Permitted Liens.
2.2 PURCHASE PRICE.
(a) Sellers and Purchaser agree that the total purchase price allocable to all
of the Equity Interests of each Acquired Company for purposes of this Agreement
will be the result of (i) the enterprise value of such Acquired Company set
forth opposite such Acquired Company's name in Column 1 of SCHEDULE 2.2(b), the
aggregate of which for all Acquired Companies is Five Billion Eight Hundred
Fifty Million Dollars ($5,850,000,000), PLUS (ii) the total amount of Acquired
Company Cash and Intercompany Debt Receivables of such Acquired Company, MINUS
(iii) the total amount of Acquired Company Debt of such Acquired Company, in
each case determined as of 12:01 a.m. New York time on the applicable Closing
Date for such Acquired Company (the "ALLOCATED PURCHASE PRICE"). The Allocated
Purchase Price for each Acquired Company will be estimated at the applicable
Closing and finally determined in accordance with SECTION 2.4.
(b) Subject to SECTIONS 2.4, 3.2 and 3.3, the Allocated Purchase Price with
respect to any Acquired Company shall be allocated to Sellers and the applicable
Minority Equity Holders as follows: (i) to Sellers, as direct or indirect
holders of Equity Interests in such Acquired Company, an amount (the "SELLERS
ALLOCATED PAYMENT") equal to the Allocated Purchase Price with respect to such
Acquired Company, MULTIPLIED BY the aggregate ownership percentage of Sellers as
of the Closing Date (the "SELLERS ALLOCATION PERCENTAGE") in such Acquired
Company; and (ii) to the Minority Equity Holders with respect to such Acquired
Company, an amount (the "MINORITY EQUITY ALLOCATED PAYMENT") equal to the
Allocated Purchase Price with respect to such Acquired Company, multiplied by
the aggregate ownership percentage of the Minority Equity Holders as of the
Closing Date (the "MINORITY EQUITY HOLDERS ALLOCATION PERCENTAGE") in such
Acquired Company. The Sellers Allocated Payment shall be paid in accordance with
SECTION 2.3. Column 2 of SCHEDULE 2.2(b) sets forth the Sellers Allocation
Percentage with respect to each Acquired Company and Column 3 of SCHEDULE 2.2(b)
sets forth the Minority Equity Holders Allocation Percentage with respect to
each Acquired Company as of the date hereof.
(c) For illustrative purposes only, a sample calculation of the Sellers
Allocated Payment and the Minority Equity Allocated Payment in the aggregate and
in relation to each Acquired Company, assuming a closing date of November 30,
2003, is set forth on SCHEDULE 2.2(c); PROVIDED, that such sample calculation
and any estimates used therein will not be deemed to be representations,
warranties or commitments of any kind for purposes of this Agreement.
2.3 PAYMENT FOR THE SELLERS EQUITY INTERESTS.
(a) Subject to the terms and conditions of this Agreement, at the Initial
Closing, Purchaser shall pay to Sellers an amount equal to the aggregate amount
of (i) the Sellers Allocated Payment (calculated for this purpose using the
Estimated Acquired Company Debt, Estimated Acquired Company Cash and Estimated
Acquired Company Intercompany Debt Receivables) in respect of the Equity
Interests owned by Sellers in each Initial Acquired
Company (whether such Initial Acquired Company is being transferred directly to
Purchaser or through the transfer of any Direct Acquired Company or Holding
Company, as the case may be), PLUS (ii) the amount of all outstanding principal
and accrued and unpaid interest, together with any other amounts due and
payable, through the Initial Closing in respect of the Sellers Stockholder Debt
relating to each Initial Acquired Company (whether such Initial Acquired Company
is being transferred directly to Purchaser or through the transfer of any
Holding Company), PLUS (iii) with respect to the Colombian Acquired Company, the
amount of the origination fees relating to the Colombian participation agreement
and the underlying loans.
(b) Subject to the terms and conditions of this Agreement, at any Subsequent
Closing, Purchaser shall pay to Sellers an amount equal to the aggregate amount
of (i) the Sellers Allocated Payment (calculated for this purpose using the
Estimated Acquired Company Debt, Estimated Acquired Company Cash and Estimated
Acquired Company Intercompany Debt Receivables) in respect of the Sellers Equity
Interests of each Subsequent Acquired Company (whether such Subsequent Acquired
Company is being transferred directly to Purchaser or through the transfer of
any Holding Company), PLUS (ii) the amount of all outstanding principal and
accrued and unpaid interest, together with any other amounts due and payable,
through the Subsequent Closing in respect of the Sellers Stockholder Debt
relating to each Subsequent Acquired Company (whether such Subsequent Acquired
Company is being transferred directly to Purchaser or through the transfer of
any Holding Company), PLUS (iii) with respect to the Colombian Acquired Company,
the amount of the origination fees relating to the Colombian participation
agreement and the underlying loans.
(c) The payments made under SECTION 2.3(a) and (b) by Purchaser to Sellers with
respect to each Initial Acquired Company and, if any, each Subsequent Acquired
Company shall be made in accordance with SECTION 12.4 and shall be delivered as
follows: (i) 5% of the Sellers Allocated Payment with respect to such Acquired
Company (together with the corresponding percentage of the Minority Equity
Allocated Payment to be placed in a separate escrow with respect to each such
Acquired Company as contemplated by SECTION 3.2(c), the "PURCHASE PRICE
ADJUSTMENT FUND") by wire transfer of immediately available funds to an account
designated by an escrow agent to be mutually agreed upon by Sellers and
Purchaser (the "ESCROW AGENT"), to be held in escrow and disposed of in
accordance with the terms of this Agreement and one or more escrow agreements
between Purchaser, Sellers and the Take-Along Sellers, the terms and conditions
of which shall be mutually agreed and negotiated in good faith between the
parties thereto prior to the applicable Closing (the "ESCROW AGREEMENT"), and
(ii) the balance of the Sellers Allocated Payment with respect to such Acquired
Company, by wire transfer of immediately available funds to such account or
accounts as the Seller Representative shall designate in writing to Purchaser
not less than three (3) Business Days prior to the applicable Closing Date.
Purchaser shall, however, be entitled to withhold from amounts payable under
this SECTION 2.3(c) any Taxes required to be withheld by Purchaser under
applicable Law, but Purchaser shall only be permitted to withhold such Taxes
after giving Sellers ten (10) Business Days' prior written notice. Sellers shall
promptly notify Purchaser if they reasonably believe that no withholding is
required (and shall provide an opinion of local counsel to such effect) and in
such event Purchaser shall not withhold such Taxes if Sellers agree to indemnify
Purchaser for any Losses incurred as a result of their failure to withhold. Each
Escrow Agreement shall provide that the balance of any escrow funds, together
with all interest accrued thereon, shall be released no later than the Final
Adjustment Payment Date. For the avoidance of doubt, for Tax
and accounting purposes, the amount of the Allocated Purchase Price applicable
for any Acquired Company that is not acquired directly by Purchaser shall be
allocated to the Equity Interests of the Direct Acquired Companies and/or
Holding Companies that are acquired directly by Purchaser in accordance with
their respective interests in such lower-tier Acquired Companies.
2.4 FINAL PURCHASE PRICE DETERMINATION.
(a) No later than five (5) Business Days before the Initial Closing Date or any
Subsequent Closing Date, Sellers shall deliver or cause to be delivered to
Purchaser, at Sellers' expense a statement (which statement shall have been
prepared in accordance with U.S. GAAP on a basis consistent with the accounting
principles, practices and procedures used in the preparation of the Financial
Statements) setting forth (and accompanied by such documentation as Purchaser
may reasonably request) a calculation of the Sellers Allocated Payment and the
Minority Equity Allocated Payment (each, a "SELLERS ALLOCATED PAYMENT
STATEMENT"), and itemizing, as applicable, with respect to each Initial Acquired
Company or Subsequent Acquired Company that is the subject of the Initial
Closing Date or Subsequent Closing Date: (i) the total Acquired Company Cash,
(ii) the total Intercompany Debt Receivables of such Acquired Company and
(iii) the total Acquired Company Debt, in each case estimated as of
12:01 a.m. New York time on the applicable Closing Date and calculated as of a
date no earlier than five (5) Business Days prior to the Initial Closing Date or
any Subsequent Closing Date. The amount of Acquired Company Debt set forth in a
Sellers Allocated Payment Statement is referred to as the "ESTIMATED ACQUIRED
COMPANY DEBT" for the applicable Initial Closing Date or any Subsequent Closing
Date. The amount of Acquired Company Cash set forth in a Sellers Allocated
Payment Statement is referred to as the "ESTIMATED ACQUIRED COMPANY CASH" for
the applicable Initial Closing Date or any Subsequent Closing Date. The amount
of Intercompany Debt Receivables of such Acquired Company set forth in the
Sellers Allocated Payment Statement is referred to as the "ESTIMATED ACQUIRED
COMPANY INTERCOMPANY DEBT RECEIVABLES" for the applicable Initial Closing Date
or any Subsequent Closing Date. Promptly upon Purchaser's request, Sellers shall
make available to Purchaser copies of the work papers and back-up materials used
by Sellers in preparing the Sellers Allocated Payment Statements and such other
documents as Purchaser may reasonably request in connection with its review of
the Sellers Allocated Payment Statements.
(b) Within forty-five (45) days after the Initial Closing Date or any Subsequent
Closing Date, Purchaser shall prepare and deliver to the Seller Representative
at Purchaser's expense a statement (which statement shall have been prepared in
accordance with U.S. GAAP on a basis consistent with the accounting principles,
practices and procedures used in the preparation of the Financial Statements)
(a "CLOSING DATE ADJUSTMENT STATEMENT") setting forth with respect to each
Initial Acquired Company acquired on the Initial Closing Date or each Subsequent
Acquired Company acquired on any Subsequent Closing Date a calculation of
(i) the total Acquired Company Cash, (ii) the total Intercompany Debt
Receivables of such Acquired Company and (iii) the total Acquired Company Debt,
in each case calculated as of 12:01 a.m. New York time on the applicable Initial
Closing Date or any Subsequent Closing Date. Promptly upon Sellers' request,
Purchaser shall make available to Sellers copies of the work papers and back-up
materials used by Purchaser in preparing the Closing Date Adjustment Statement
and such other documents as Sellers may reasonably request in connection with
its review of the Closing Date Adjustment Statement.
(c) Within forty-five (45) days after receipt of a Closing Date Adjustment
Statement, the Seller Representative shall deliver to Purchaser a written
statement describing its objections (if any) to a Closing Date Adjustment
Statement. If the Seller Representative does not raise any objections in a
written statement to Purchaser within such forty-five (45)-day period, the
Sellers shall be deemed to have accepted and agreed to a Closing Date Adjustment
Statement and a Closing Date Adjustment Statement shall become final, binding
and conclusive upon all parties. If the Seller Representative raises objections
in a written statement to Purchaser within such forty-five (45)-day period, the
parties shall attempt to resolve their differences and any written resolution by
them as to any disputed amounts shall be final, binding and conclusive. If the
parties cannot resolve such objection within ten (10) Business Days after the
receipt by Purchaser of such written statement, any remaining disputes shall be
resolved by KPMG LLP, or if KPMG LLP declines such engagement, by another
internationally recognized independent accounting firm mutually agreeable to
Purchaser and the Seller Representative (the "ACCOUNTING FIRM"). The Accounting
Firm shall be instructed to resolve such disputes within thirty (30) days after
its appointment. The resolution of disputes by the Accounting Firm shall be set
forth in writing (the "ACCOUNTING FIRM ADJUSTMENT STATEMENT") and shall be
conclusive and binding upon all parties and a Closing Date Adjustment Statement,
as modified by such resolution, shall become final and binding as of the date of
such resolution. The fees and expenses of the Accounting Firm shall be
apportioned between the parties by the Accounting Firm based on the degree to
which each party's claims were unsuccessful and shall be paid by the parties in
accordance with such determination. For example, if pursuant to this
SECTION 2.4(c) Sellers submitted an objection affecting the Allocated Purchase
Price in the amount of One Hundred Million Dollars ($100,000,000) and prevailed
as to Forty-Five Million Dollars ($45,000,000) of such amount, then Sellers
would bear fifty-five percent (55%) of the fees and expenses of the Accounting
Firm. Notwithstanding the foregoing provisions of this SECTION 2.4, following
the final determination of all adjustments to be made pursuant to this
SECTION 2.4 at any Closing, if the net aggregate amount of all such adjustments,
taken together, is less than or equal to Two Million Dollars ($2,000,000), then
the parties agree that there shall be no adjustment to the purchase price paid
at the Initial Closing or any Subsequent Closing pursuant to SECTION 2.2(a), and
such purchase price shall be deemed to be the final purchase price for all
purposes of this Agreement, PROVIDED, that if such adjustment exceeds
Two Million Dollars ($2,000,000), then the total amount (and not only the
excess) of such adjustment will be made and paid for this purpose.
(d) The Acquired Company Debt of an Initial Acquired Company, as of the
Initial Closing Date or of a Subsequent Acquired Company, as of the
Subsequent Closing Date, as determined (i) on the Closing Date
Adjustment Statement deemed to be final in accordance with the second
sentence of SECTION 2.4(c), (ii) by the written resolution of Sellers
and Purchaser or (iii) on the Accounting Firm Adjustment Statement, is
referred to as the "FINAL ACQUIRED COMPANY DEBT." The Acquired Company
Cash of an Initial Acquired Company, as of the Initial Closing Date or
of a Subsequent Acquired Company, as of the Subsequent Closing Date, as
determined (A) on the Closing Date Adjustment Statement deemed to be
final in accordance with the second sentence of SECTION 2.4(c), (B) by
the written resolution of Sellers and Purchaser or (C) on the
Accounting Firm Adjustment Statement, is referred to as the "FINAL
ACQUIRED COMPANY CASH." The Intercompany Debt Receivables of an Initial
Acquired Company, as of the Initial Closing Date or of a Subsequent
Acquired Company, as of the Subsequent Closing Date, as determined (A)
on the Closing Date Adjustment Statement deemed to be final in
accordance
with the second sentence of SECTION 2.4(c), (B) by the
written resolution of Sellers and Purchaser or (C) on the Accounting
Firm Adjustment Statement, is referred to as the "FINAL ACQUIRED
COMPANY INTERCOMPANY DEBT RECEIVABLES." No later than two (2) Business
Days (the "FINAL ADJUSTMENT PAYMENT DATE") following the date on which
all of the Final Acquired Company Debt, the Final Acquired Company Cash
and the Final Acquired Company Intercompany Debt Receivables of an
Initial Acquired Company or a Subsequent Acquired Company are finally
determined as provided in the first sentence of this SECTION 2.4(d)
(such date being referred to herein as the "DETERMINATION DATE"),
Purchaser or Sellers shall make the following payments with respect to
each Initial Acquired Company and Subsequent Acquired Company after
netting against each other all payments required to be made under this
SECTION 2.4(d):
(i) If the Estimated Acquired Company Debt is greater than the Final
Acquired Company Debt with respect to an Acquired Company, then (A) an
amount equal to the Sellers Allocation Percentage with respect to
such Acquired Company MULTIPLIED BY the amount of such excess shall
be paid by Purchaser to Sellers and (B) in the event that there are
Take-Along Sellers with respect to such Acquired Company, an amount
equal to the Minority Holders Allocation Percentage applicable to
such Take-Along Seller MULTIPLIED BY the amount of such excess shall be
paid by Purchasers to the Take-Along Sellers. If the Estimated
Acquired Company Debt is less than the Final Acquired Company Debt
with respect to an Acquired Company, then (A) an amount equal to
the Sellers Allocation Percentage with respect to such Acquired
Company MULTIPLIED BY the amount of such deficit shall be paid by
Sellers to Purchaser and (B) in the event that there are Take-Along
Sellers with respect to such Acquired Company, an amount equal to the
Minority Holders Allocation Percentage applicable to such Take-Along
Seller MULTIPLIED by the amount of such deficit shall be paid by the
Take-Along Sellers to Purchaser, which deficit payments shall in each
case be satisfied by a distribution from the Purchase Price Adjustment
Fund with respect to such Acquired Company or, to the extent that the
funds deposited in the Purchase Price Adjustment Fund are not
sufficient to satisfy the full amount of the deficit payments due to
Purchaser pursuant to this SECTION 2.4(d)(i), the remaining amounts of
such deficit payments shall be paid directly to Purchaser by Sellers
and the Take-Along Sellers on a PRO RATA basis.
(ii) If the Estimated Acquired Company Cash is greater than the Final
Acquired Company Cash, then (A) an amount equal to the Sellers
Allocation Percentage with respect to such Acquired Company MULTIPLIED
BY the amount of such excess shall be paid by Sellers to Purchaser and
(B) in the event that there are Take-Along Sellers with respect to such
Acquired Company, an amount equal to the Minority Holders Allocation
Percentage applicable to such Take-Along Seller MULTIPLIED BY the
amount of such excess shall be paid by Take-Along Sellers to Purchaser,
which excess payments shall in each case be satisfied by a distribution
from the Purchase Price Adjustment Fund or, to the extent that the
funds deposited in the Purchase Price Adjustment Fund are not
sufficient to satisfy the full amount of the deficit payments due to
Purchaser pursuant to this SECTION 2.4(d)(ii), the remaining amounts of
such deficit payments shall be paid directly to Purchaser by Sellers
and the Take-Along Sellers on a PRO RATA basis. If the Estimated
Acquired Company Cash is less than the Final Acquired Company Cash,
then (A) an amount equal to Sellers Allocation Percentage applicable to
such Acquired Company MULTIPLIED BY the amount of such deficit shall be
paid by Purchaser to Sellers, and (B) in
the event that there are Take-Along Sellers with respect to such
Acquired Company, an amount equal to the Minority Holders Allocation
Percentage applicable to such Take-Along Seller MULTIPLIED BY the
amount of such deficit shall be paid by Purchaser to the Take-Along
Sellers.
(iii) If the Estimated Acquired Company Intercompany Debt Receivables
are greater than the Final Acquired Company Intercompany Debt
Receivables, then (A) an amount equal to the Sellers Allocation
Percentage with respect to such Acquired Company MULTIPLIED BY the
amount of such excess shall be paid by Sellers to Purchaser and (B) in
the event that there are Take-Along Sellers with respect to such
Acquired Company, an amount equal to the Minority Holders Allocation
Percentage applicable to such Take-Along Seller multiplied by the
amount of such excess shall be paid by Take-Along Sellers to Purchaser,
which excess payment shall be satisfied by a distribution from the
Purchase Price Adjustment Fund or, to the extent that the funds
deposited in the Purchase Price Adjustment Fund are not sufficient to
satisfy the full amount of the deficit payments due to Purchaser
pursuant to this SECTION 2.4(d)(iii), the remaining amounts of such
deficit payments shall be paid directly to Purchaser by Sellers and the
Take-Along Sellers on a PRO RATA basis. If the Estimated Acquired
Company Intercompany Debt Receivables are less than the Final Acquired
Company Intercompany Debt Receivables, then (A) an amount equal to
Sellers Allocation Percentage applicable to such Acquired Company
MULTIPLIED BY the amount of such deficit shall be paid by Purchaser to
Sellers and (B) in the event that there are Take-Along Sellers with
respect to such Acquired Company, an amount equal to the Minority
Holders Allocation Percentage applicable to such Take-Along Seller
MULTIPLIED BY the amount of such deficit shall be paid by Purchaser to
the Take-Along Sellers.
(e) Notwithstanding any other provision of this SECTION 2.4, for the purpose of
calculating the Acquired Company Cash, Acquired Company Debt and Intercompany
Debt Receivables of an Initial Acquired Company as of the Initial Closing Date
or, if applicable, a Subsequent Acquired Company as of the Subsequent Closing
Date for purposes of the Sellers Allocated Payment Statement and the Closing
Date Adjustment Statement, any such items denominated in an currency other than
Dollars shall be converted into Dollars from such other currency using the
applicable Exchange Rate.
(f) Each Seller hereby acknowledges and agrees that in the event that the value
of its Equity Interests in any Acquired Company is determined to be in an amount
less than zero, then the Allocated Purchase Price with respect to such Acquired
Company shall give full effect to such amount below zero.
ARTICLE III
MINORITY EQUITY INTERESTS; TAKE-ALONG OFFER
3.1 MINORITY EQUITY AGREEMENTS; REQUIRED MINORITY EQUITY HOLDER APPROVALS.
(a) SCHEDULE 3.1(a) sets forth, with respect to each Acquired Company that has
Minority Equity Interests, the name of each holder of Minority Equity Interests
(each, a
"MINORITY EQUITY HOLDER") and a description of the Minority Equity Interests
held by such Minority Equity Holder as of the date hereof. In the event there is
any change in the ownership information set forth in SCHEDULE 3.1(a) after the
date hereof, Sellers shall provide Purchaser with the updated information as
soon as practicable after the relevant change in the ownership of the Acquired
Companies and in no event later than two (2) Business Days prior to the
applicable Closing Date.
(b) SCHEDULE 3.1(b) sets forth, with respect to each Acquired Company that has
Minority Equity Interests, a list of all Contracts with Minority Equity Holders
to which any Seller or the Acquired Company is a party that relate to the
purchase, sale, issuance, repurchase, redemption, acquisition, transfer,
disposition, holding or voting of any Equity Interests in or management of such
Acquired Company (collectively, the "MINORITY EQUITY AGREEMENTS").
(c) From the date of this Agreement until the Final Closing Date, Purchaser,
with respect to its obligations pursuant to this ARTICLE III and subject to the
third to last sentence of this SECTION 3.1(c), and each Seller shall, and
Sellers shall cause each Acquired Company to, use best efforts to (i) obtain, or
cause to be obtained, all of the necessary consents, waivers, modifications,
approvals, certificates and other documents in relation to the Minority Equity
Agreements, each of which is set forth in SCHEDULE 3.1(c) (collectively, the
"REQUIRED MINORITY EQUITY HOLDER APPROVALS") and (ii) subject to the Minority
Equity Holders Rights and solely to the extent required by the terms and
conditions of the Minority Equity Agreements or as otherwise requested by
Sellers, cause the consummation of the sale to Purchaser on the Initial Closing
Date of all of the Minority Equity Interests in those Initial Acquired Companies
or on any Subsequent Closing Date of all of the Minority Equity Interests in
those Subsequent Acquired Companies that are the subject of such Subsequent
Closing. Notwithstanding anything to the contrary set forth in this ARTICLE III
or otherwise, (A) Sellers shall have full and complete control over all
communications, negotiations, solicitations and other discussions with Minority
Equity Holders with respect to the transactions contemplated in this ARTICLE
III, including all communications, negotiations, solicitations or other
discussions regarding the Required Minority Equity Holder Approvals, Take-Along
Offers, the repayment or treatment of the Stockholder Debt and any other
proposals, offers or transactions whatsoever related to the purchase (whether by
Sellers, Purchaser or otherwise) of Minority Equity Interests (such transactions
are referred to herein collectively as the "TAKE-ALONG TRANSACTIONS") and (B)
neither Purchaser nor any of its Affiliates or any of their respective officers,
directors, employees, agents, advisors (including financial advisors, counsel
and accountants) and representatives (collectively, "REPRESENTATIVES") shall,
directly or indirectly, engage in any communications, negotiations,
solicitations or other discussions with Minority Equity Holders regarding any
Take-Along Transactions or otherwise solicit, initiate, continue, discuss,
negotiate, commit to, enter into or encourage any Take-Along Offers or any other
offers or proposals to or transactions with any Minority Equity Holder with
respect to Minority Equity Interests, except to the extent (and upon such terms
and conditions as) such communications, negotiations, solicitations or other
discussions are specifically authorized and approved in advance by Sellers on a
case-by-case basis. Purchaser and its Affiliates shall have no obligation to
communicate, negotiate or discuss with any Minority Equity Holder with respect
to any Take-Along Transactions unless Sellers, in good faith, reasonably
determine that the communication, negotiation or discussion by Purchaser or its
Affiliates with any Minority Equity Holder is necessary to complete the
Take-Along Transactions. Purchaser will promptly (but in any event within
seventy-two (72) hours) notify Sellers in writing of the receipt by
Purchaser or any of its Representatives of any inquiries, proposals or offers
from or on behalf of any Minority Equity Holder, which notification shall
include the identity of the party or parties making such inquiry, proposal or
offer and the material terms and conditions of such inquiry, proposal or offer.
Purchaser hereby represents and warrants to Sellers that, to Purchaser's
knowledge, prior to the date of this Agreement, neither Purchaser nor any of its
Representatives has, directly or indirectly, engaged in any communications,
negotiations, solicitations or other discussions with any Minority Equity
Holders regarding any Take-Along Transactions or any other transactions
whatsoever related to or involving Minority Equity Interests.
(d) Purchaser and each Seller shall, and each Seller shall cause each Acquired
Company to, comply with (i) all Laws and fiduciary and other applicable duties
applicable to the Take-Along Transactions (including the Take-Along Offer,
obtaining the Required Minority Equity Holder Approvals, or otherwise related to
the transactions contemplated in this ARTICLE III) and (ii) all of the terms and
conditions of the Minority Equity Agreements (including such terms, conditions
and procedures related to any "tag along," right of first refusal, or other
participation or consent rights of the Minority Equity Holders set forth in such
Minority Equity Agreements).
(e) Subject to Purchaser's execution of a joint defense agreement in form and
substance reasonably satisfactory to Sellers, Sellers agree to provide Purchaser
with reasonable access to all pleadings, motions and other similar filings made
by the BellSouth Entities in connection with the Venezuela Arbitration.
Notwithstanding anything to the contrary contained in this Agreement, Sellers
shall continue to control in all respects the defense and all claims,
counterclaims and other proceedings in respect of the Venezuelan Arbitration in
accordance with SECTION 6.14 until the earlier to occur of (i) the date of the
issuance by the arbitration panel having jurisdiction over the Venezuela
Arbitration of a final, non-appealable resolution of the Venezuelan Arbitration,
or (ii) the final settlement of the Venezuela Arbitration by mutual agreement of
the parties thereto (the "VENEZUELA ARBITRATION AWARD DATE").
(f) If at any time during the period following the Venezuela Arbitration Award
Date through June 30, 2008, any of the Sellers purchase some or all of the
Equity Interests in Comtel Comunicaciones Telefonicas, S.A. and Telcel Celular,
C.A. (collectively, the "VENEZUELAN ARBITRATION ENTITY") held by the holders of
Equity Interests in the Venezuelan Arbitration Entities other than Sellers (the
"VENEZUELAN ARBITRATION SHARES"), Purchaser shall have the right to purchase
(the "VENEZUELA CALL RIGHT"), and Sellers shall have the right to require
Purchaser to purchase (the "VENEZUELA PUT RIGHT"), the Venezuelan Arbitration
Shares at a purchase price per share equal to the Sellers Allocated Payment per
share in respect of the Venezuelan Acquired Company; PROVIDED, HOWEVER, that in
no event will Sellers be obligated to sell to Purchaser, or shall Purchaser be
obligated to purchase from Sellers, the Venezuelan Arbitration Shares at any
time prior to any Closing (whether the Initial Closing or any Subsequent
Closing) to which the Venezuelan Acquired Company is subject; PROVIDED, FURTHER
that in the event the Venezuelan Arbitration Shares are to be sold to Purchaser
concurrently with the Initial Closing or any Subsequent Closing to which the
Venezuelan Acquired Company is subject, the sale and purchase of the Venezuelan
Arbitration Shares by Sellers to Purchaser shall be subject to the satisfaction
or waiver of the conditions to Closing set forth in ARTICLE VII as applicable to
such Closing. The Venezuela Call Right and Venezuela Put Right may each be
exercised upon ten (10) Business Days' prior written notice by, in the case of
the Venezuela Call Right, Purchaser to
the Seller Representative, or in the case of the Venezuela Put Right, the Seller
Representative to the Purchaser. In the event that the consummation of the sale
of the Venezuelan Arbitration Shares is not to take place concurrently with the
Initial Closing or any Subsequent Closing, then such sale shall be consummated
on the third (3rd) Business Day following the notification by either Purchaser
or the Sellers Representative of the election to exercise the Venezuela Call
Right or the Venezuela Put Right, as applicable, at such location as mutually
agreed by the parties, in each case subject to the absence of any Governmental
Orders of the type described in SECTION 7.1(a) or Required Regulatory Approvals
of the type described in SECTION 7.1(b). For avoidance of doubt, the Venezuela
Call Right and the Venezuela Put Right shall each terminate on June 30, 2008.
(g) The parties agree that at the applicable Closing, Sellers will assign, and
Purchaser will assume, all of Sellers' rights and obligations under the Minority
Equity Agreements with respect to any Acquired Company that is the subject of
the Initial Closing or any Subsequent Closing for which Minority Equity Holders
will continue to be Minority Equity Holders following the applicable Closing
Date and, if applicable, under any Acquired Company Organizational Document.
Subject to the provisions of SECTION 10.2(a)(vii), Purchaser shall take any and
all other actions necessary in connection with the assignment and assumption of
such Minority Equity Agreements.
3.2 TAKE-ALONG OFFER TO HOLDERS OF MINORITY EQUITY INTERESTS.
(a) Except as otherwise required in order to comply with the Minority Equity
Agreements of an Acquired Company or as otherwise directed by Sellers with
respect to an Acquired Company that has Minority Equity Interests, as soon as
practicable after the Due Diligence Expiration Date, Purchaser shall, subject to
the requirements of SECTION 3.1(c) and to the second sentence of this SECTION
3.2(a), make an offer to each Minority Equity Holder of the subject Acquired
Company to purchase such Minority Equity Interests in accordance with SECTION
2.2(b) at a purchase price per Minority Equity Interest calculated in accordance
with the first sentence of SECTION 3.2(b) (the "TAKE-ALONG OFFER"), which offer
may contain such conditions to Closing as deemed necessary in Purchaser's
reasonable discretion (but only to the extent consistent with the provisions of
this Agreement, applicable Law and the Minority Equity Holder Rights), including
that such Closing is subject to the consummation of the transactions
contemplated hereby with respect to such Acquired Company. Notwithstanding
anything to the contrary set forth in this ARTICLE III or otherwise, Purchaser
shall take the actions described in the first sentence of this SECTION 3.2(a)
only to the extent that such actions are required pursuant to the Minority
Equity Agreements or are otherwise requested by Sellers in their sole
discretion, and such actions shall be taken at the times and in the manner
necessary in order to ensure compliance with the terms and conditions of the
applicable Minority Equity Agreements (including such terms, conditions and
procedures related to any "tag along," right of first refusal, or other
participation or consent rights of the Minority Equity Holders set forth in such
Minority Equity Agreements or any other terms, conditions and procedures agreed
or consented to by the Minority Equity Holders) or at the times and in the
manner requested by Sellers, as applicable. Without limiting the generality of
the foregoing, Purchaser acknowledges that certain Minority Equity Agreements
may require the Take-Along Closing with respect to the Minority Equity Interests
in an Acquired Company to occur concurrently with a Closing or at such other
times as
further described in such Minority Equity Agreements or as requested by Sellers,
to the extent consistent with this Agreement.
(b) The offer price per Minority Equity Interest in connection with each
Take-Along Offer will be determined by dividing (x) the aggregate Minority
Equity Allocated Payment for the applicable Acquired Company by (y) the
aggregate number of then-outstanding Minority Equity Interests for an Acquired
Company, and will be offered to each Minority Equity Holder subject to (i) any
reduction for any Taxes required to be withheld by Purchaser under applicable
Law, and (ii) to the extent agreed by the relevant Minority Equity Holder or
otherwise required pursuant to any Governmental Order or applicable Law, any
amounts owed by the applicable Minority Equity Holder to Sellers or Seller
Parent or any of their respective Affiliates in respect of any Debt of such
Minority Equity Holder, whether evidenced by a note or otherwise, or other
payment obligations of any kind that remain outstanding as of the date of the
applicable Take-Along Closing (the "BELLSOUTH ENTITIES OWED AMOUNTS"). All
documentation to be executed in connection with the offer and consummation of
the Take-Along Offer, including all offers to purchase, transmittal letters,
purchase agreements and other agreements, instruments and documentation
(collectively, the "TAKE-ALONG DOCUMENTATION"), will be prepared by Sellers,
PROVIDED that such documentation, in any event, will (unless otherwise required
by Law or by the Minority Equity Agreements) (i) require each Minority Equity
Holder to terminate and release all agreements, instruments, covenants and
commitments of or binding on the Acquired Company and Sellers and their
respective affiliates (including, the Minority Equity Agreements) and to further
release the Acquired Company, Purchaser, Sellers and their respective
Representatives and agents from and against any lawsuits, claims, obligations or
liabilities arising prior to the closing of the Take-Along Offer and relating to
their Minority Equity Interests, the Take-Along Offer and their investment and
participation in the Acquired Company, (ii) provide that the Take-Along Offer
shall remain open for at least ninety (90) days or such longer period as
required by applicable Law or the applicable Minority Equity Agreements, (iii)
disclose any other information that is required under any tender offer or
similar Law in the appropriate jurisdictions (iv) require each Minority Equity
Holder to agree to the purchase price adjustment provisions and the escrow
arrangements contemplated in SECTION 2.4 and SECTION 3.2(c) and (v) provide that
each Minority Equity Holder, as a condition of accepting the Take-Along Offer,
shall be liable to Purchaser for all Minority Equity Losses, which liability may
be evidenced by (A) appropriate indemnification provisions in favor of
Purchaser, (B) the Minority Equity Holder's consent and agreement to permit
Purchaser to maintain in escrow a portion of the Minority Equity Allocated
Payment (as finally adjusted pursuant to SECTION 2.4) payable to such Minority
Equity Holder for purposes of fully or partially guaranteeing or otherwise
satisfying or providing for the satisfaction of the Minority Equity Holder's
obligations with respect to such Minority Equity Losses or (C) such other
agreements and transactions reasonably acceptable to Purchaser, Sellers and the
Minority Equity Holder that accomplish the same purposes; PROVIDED, HOWEVER,
that, notwithstanding anything to the contrary set forth in this Agreement, (1)
unless otherwise directed by Sellers, the Minority Equity Holders shall not have
any of the rights of an Indemnifying Person set forth in ARTICLE X with respect
to participation in the defense of any claim pursuant to the indemnification
procedures set forth in ARTICLE X or to approve any proposed settlements related
to Losses under this Agreement and (2) no Seller, Acquired Company or Affiliate
of any Seller or any Acquired Company shall have any liability or obligation
whatsoever with respect to such Minority Equity Losses. Any Losses (including
Minority Equity Losses) that have been conclusively determined to be owed to
Purchaser with
respect to such Acquired Company at the time of the Take-Along Closing must be
disclosed to Sellers and the Minority Equity Holders such that the amount of
such conclusively determined Minority Equity Losses can be withheld from the
amount of the Minority Equity Allocated Payment otherwise payable to such
Minority Equity Holder.
(c) Each closing of the sale and purchase of the Minority Equity Interests with
respect to an Acquired Company pursuant to a Take-Along Offer (each, a
"TAKE-ALONG CLOSING") shall take place at a location mutually agreed to by
Purchaser and the Seller Representative, on the fifth (5th) Business Day after
the conditions set forth in the applicable Take-Along Offer Documentation shall
have been satisfied or waived or at such other time, date and place as shall be
fixed by agreement. At each Take-Along Closing, unless otherwise agreed in the
Take-Along Offer Documentation, Purchaser shall pay to each holder of the
subject Minority Equity Interests that has accepted the applicable Take-Along
Offer (each, a "TAKE-ALONG SELLER") by wire transfer of immediately available
funds in Dollars, unless otherwise agreed by Purchaser and such Take-Along
Seller, to an account or accounts at a bank specified in writing by such
Take-Along Seller to Purchaser not less than three (3) Business Days prior to
the closing date for such Take-Along Closing an aggregate amount equal to (i)
the Minority Equity Allocated Payment (which amount shall be calculated using
the Estimated Acquired Company Debt and Estimated Acquired Company Cash if the
Take-Along Closing occurs prior to the Determination Date) in respect of the
subject Minority Equity Interests owned by such Take-Along Seller, PLUS (ii) in
the event that the Take-Along Seller Stockholder Debt owed to such Take-Along
Seller becomes due and payable as a result of the Take-Along Closing or to the
extent otherwise reasonably requested by such Take-Along Seller, the amount of
all outstanding principal and accrued and unpaid interest, together with any
amounts due and payable, in respect of such Take-Along Seller Stockholder Debt.
In the event that the Take-Along Closing with respect to an Acquired Company
occurs prior to the Determination Date, (i) the payments made pursuant to
subclause (i) of the preceding sentence by Purchaser to the Take-Along Sellers
with respect to each Acquired Company shall be made in accordance with SECTION
12.4 and shall be delivered as follows: (A) five percent (5%) of the Minority
Equity Allocated Payment with respect to such Acquired Company by wire transfer
of immediately available funds to an account designated by the Escrow Agent, to
be held in escrow and disposed of in accordance with the terms of this Agreement
and the applicable Escrow Agreement and (B) the balance of the Minority Equity
Allocated Payment with respect to such Acquired Company (calculated using the
Estimated Acquired Company Debt and Estimated Acquired Company Cash) to such
account or accounts as the Take-Along Sellers shall designate in writing to
Purchaser not less than three (3) Business Days prior to the closing date for
such Take-Along Closing and (ii) the Minority Equity Allocated Payment paid by
Purchaser at such Take-Along Closing shall be finalized and adjusted pursuant to
the procedures described in SECTION 2.4. If required in order to comply with the
Minority Equity Agreements or the Minority Equity Holders Rights of an Acquired
Company or as otherwise directed by Sellers with respect to an Acquired Company,
Purchaser and Sellers shall, and shall cause their Affiliates to, use best
efforts to ensure that the Take-Along Closing is consummated concurrently with
the applicable Closing.
(d) Notwithstanding anything to the contrary set forth in this ARTICLE III or
otherwise, following the date of this Agreement, Purchaser hereby acknowledges
that Sellers shall have the right to engage in negotiations, communications or
other discussions with any Minority Equity Holder, whether before or after any
Take-Along Offer by Purchaser, regarding any Take-Along
Transactions, including any transaction in which Sellers would directly purchase
from the Minority Equity Holder some or all of the Minority Equity Interests
held by such Minority Equity Holder. In the event that a Seller purchases some
or all of the Minority Equity Interests of a Minority Equity Holder directly,
then, upon such purchase, if such purchase is consummated (i) on or prior to the
sale to Purchaser, either pursuant to the Initial Closing or any Subsequent
Closing, of Sellers Equity Interests in the Acquired Company in which the
Minority Equity Holder formerly held its Minority Equity Interests, such
Minority Equity Interests shall be deemed to be Sellers Equity Interests for all
purposes of this Agreement, including for purposes of allocating the amount of
the Aggregate Sellers Allocated Payment and the Sellers Allocated Payments, as
the case may be, for determining the extent of such Sellers' indemnification
obligations pursuant to SECTION 10.4(b) and (c), or (ii) at any time following
the sale to Purchaser, either pursuant to the Initial Closing or any Subsequent
Closing, of Sellers Equity Interests in the Acquired Company in which the
Minority Equity Holder formerly held its Minority Equity Interests, such Seller
shall be deemed to be a Take-Along Seller for purposes of this ARTICLE III and
Sellers shall be required to sell, and Purchaser shall be required to purchase,
the Minority Equity Interests held by such Seller in the manner and pursuant to
the terms (including the purchase price) contemplated in SECTION 3.2(c),
PROVIDED, that (A) the purchase by Purchaser of such Minority Equity Interests
from such Seller shall be made pursuant to the same terms and conditions,
including representations and warranties, as contemplated in this Agreement with
respect to the Sellers Equity Interests in the Acquired Companies, and (B) the
purchase price paid by Purchaser to any Seller with respect to such Minority
Equity Interests as contemplated in SECTION 3.2(c) shall be deemed to increase
the amount of the Aggregate Sellers Allocated Payment and the Sellers Allocated
Payment, as the case may be, for purposes of determining the extent of such
Sellers' indemnification obligations pursuant to SECTION 10.4(b) and (c).
3.3 SALE OF EQUITY INTERESTS PURSUANT TO RIGHTS OF FIRST REFUSAL.
(a) The Minority Equity Agreements set forth on SCHEDULE 3.3(a) of certain
Acquired Companies provide rights of first refusal or other rights to such
Minority Equity Holders to purchase the Equity Interests owned by Sellers in
such Acquired Companies ("RIGHTS OF FIRST REFUSAL") that become exercisable as a
result of the transactions contemplated by this Agreement. In the event that,
prior to the applicable Closing, any one or more of such Minority Equity Holders
makes a bona fide election to exercise its Rights of First Refusal with respect
to some or all of the Equity Interests owned by Sellers in one or more Acquired
Companies in accordance with the provisions of any applicable Minority Equity
Agreement (the "RIGHT OF FIRST REFUSAL SHARES"), then, notwithstanding anything
to the contrary set forth in this Agreement or otherwise, (i) Sellers shall have
no obligation to sell the Right of First Refusal Shares to Purchaser and
Purchaser shall have no right to purchase the Right of First Refusal Shares from
Sellers, (ii) Sellers shall be deemed not to own, directly or indirectly, the
Right of First Refusal Shares, (iii) such Right of First Refusal Shares shall be
deemed to be excluded from the definition of "Sellers Equity Interests" and
"Holding Company Equity Interests" and shall not be considered Equity Interests
owned directly or indirectly by Sellers, for all purposes of this Agreement,
(iv) the Sellers Allocation Percentage and the amount of the Sellers Allocated
Payment with respect to the Acquired Companies that have Right of First Refusal
Shares shall be decreased accordingly for all purposes of this Agreement,
including with respect to determining the extent of Sellers' indemnification
obligations pursuant to SECTION 10.4(b), (c) and (d), (v) the
Right of First Refusal Shares will be understood to be owned by the Minority
Equity Holders, (vi) the Minority Equity Holder Allocation Percentage and the
amount of the Minority Equity Holders Allocated Payment with respect to the
Acquired Companies that have Right of First Refusal Shares shall be increased
accordingly for all purposes of this Agreement, and (vii) if and at such time as
one or more of the Minority Equity Holders of such Acquired Company makes a bona
fide election to exercise their Rights of First Refusal (the "ROFR DETERMINATION
DATE") and, as a result of such bona fide election, Sellers do not own (or, upon
the closing of the sale of such Right of First Refusal Shares, will not own) any
Equity Interests in such Acquired Company, then such Acquired Company shall be
deemed to be a "ROFR COMPANY".
(b) In addition to the foregoing, in the event that any Acquired Company becomes
a ROFR Company, (i) the parties shall nevertheless be obligated to consummate
the Initial Closing and any Subsequent Closing and the other transactions
contemplated by this Agreement except with respect to any such ROFR Company (or
any Retained Company or Section 6.29 Retained Company) and (ii) no
representations or warranties shall be deemed to have been made by Sellers with
respect to any such ROFR Company. For the avoidance of doubt, from and after the
ROFR Determination Date with respect to a ROFR Company, SECTIONS 6.5 and 6.6 and
ARTICLE III, as well as any other provisions that would otherwise reasonably be
interpreted to treat such ROFR Company as an Acquired Company whose Sellers
Equity Interests are being transferred directly or indirectly pursuant to the
transactions contemplated by this Agreement, will no longer be applicable to
such ROFR Company, PROVIDED THAT, SECTIONS 6.8 and 6.28(a) and (b) (PROVIDED
THAT, with respect to SECTIONS 6.28(a) and (b), such restrictions shall apply
from the date of this Agreement until the applicable closing with respect to the
Right of First Refusal Shares of such ROFR Company) as well as the
Confidentiality Agreement will continue to be applicable to all ROFR Companies.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLERS
Each Seller, on behalf of itself and each Acquired Company in which it
owns, directly or indirectly, Equity Interests, jointly and severally, hereby
represents and warrants to Purchaser as follows:
4.1 DUE INCORPORATION.
(a) Each of the Sellers and the Acquired Companies is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization. Each of the Sellers and the Acquired Companies
has all requisite company or corporate (as the case may be) power and authority
to own, lease, operate and conduct its respective properties and businesses as
they are now being owned, leased, operated and conducted.
(b) Each of the Acquired Companies is licensed or qualified to do business and
is in good standing (with respect to jurisdictions that recognize such concept)
as a foreign company or corporation in each jurisdiction where the nature of the
business or properties owned, leased, operated or conducted by such Acquired
Company require such licensing or qualification and in
which the failure to be so licensed or qualified would reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.
(c) Except as set forth in SCHEDULE 4.1, and other than the Equity Interests of
their respective Subsidiaries, the Operating Companies and the Intermediate
Holding Companies do not directly or indirectly own any shares of capital stock
or any other Equity Interests issued by any Person.
4.2 DUE AUTHORIZATION. Each Seller has all requisite company or corporate
(as the case may be) power and authority to enter into this Agreement and the
Related Agreements to which such Seller is to be a party and to consummate the
transactions contemplated hereby and, if applicable, thereby. The execution,
delivery and performance of this Agreement by each Seller and the Related
Agreements by each Seller which is to be a party thereto, and the consummation
of the transactions contemplated hereby and thereby by each Seller, has been
duly and validly authorized and approved by each Seller and no other company or
corporate action or proceeding on the part of any Seller is necessary to
authorize this Agreement, the Related Agreements to which such Seller is to be a
party and the transactions contemplated hereby and thereby. Each Seller has duly
and validly executed and delivered this Agreement and prior to or at the Closing
will duly and validly execute and deliver the Related Agreements to which any
such Seller is a party. Assuming the due authorization, execution and delivery
of this Agreement and the Related Agreements by the other parties hereto and
thereto, this Agreement constitutes a legal, valid and binding obligation of
each Seller and, upon execution and delivery of the Related Agreements to which
any such Seller is a party, such Related Agreements will constitute legal, valid
and binding obligations of the Seller that is a party to any Related Agreement,
in each case, enforceable in accordance with its respective terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
moratorium, reorganization or similar laws in effect that affect the enforcement
of creditors' rights generally and by equitable limitations on the availability
of specific remedies and by principles of equity (collectively, "ENFORCEABILITY
LIMITATIONS").
4.3 AUTHORITY RELATIVE TO THIS AGREEMENT. Except as set forth in SCHEDULE
4.3 and except as would not be reasonably expected to have a Material Adverse
Effect, the execution, delivery and performance by each Seller of this Agreement
and the Related Agreements to which any such Seller is a party, and the
consummation by Sellers of the transactions contemplated hereby and thereby, do
not and will not: (a) assuming that all Required Regulatory Approvals have been
obtained, violate any material Law applicable to or binding on Sellers or any of
their respective assets; (b) except as set forth in the Minority Equity
Agreements, violate or conflict with, result in a breach or termination of,
constitute a default or give any third party any additional right (including a
termination right) under, permit cancellation of, result in the creation of any
Lien upon any of the assets of Sellers or, to Sellers' knowledge, the Acquired
Companies under, or result in or constitute a circumstance which, with or
without notice or lapse of time or both, would constitute any of the foregoing
under, any Contract (other than relating to Debt) to which any Seller or any
Acquired Company is a party or by which any of the Sellers, or any of their
respective assets are bound; (c) to Sellers' knowledge, permit the acceleration
of the maturity of any Debt of any of the Acquired Companies or Debt secured by
their respective assets; or (d) violate or conflict with any provision of any of
the organizational documents of any Seller or any Acquired Company.
4.4 CAPITALIZATION.
(a) SCHEDULE 4.4(a) sets forth a true and complete list of the percentage of
Equity Interests owned by Sellers and their Affiliates in each of the Acquired
Companies as of the date hereof. All of the outstanding Equity Interests listed
as being owned by Sellers and their Affiliates on SCHEDULE 4.4(a) are validly
issued and, with respect to the type of Equity Interests that recognize such
concept, fully paid and nonassessable. Sellers are directly or indirectly the
record and beneficial owners of all of the Equity Interests listed as being
owned by Sellers and their Affiliates on SCHEDULE 4.4(a), free and clear of any
and all Liens other than Certain Permitted Liens.
(b) Except as set forth in SCHEDULE 4.4(b) or pursuant to the Minority Equity
Agreements, to Sellers' knowledge, there are no Equity Interests issued or
outstanding or any subscriptions, options, warrants, calls, rights, convertible
or exchangeable securities or other agreements or commitments of any character
obligating Sellers or the Acquired Companies, or obligating the Sellers or any
of their Affiliates to cause the Acquired Companies, to issue, transfer or sell,
or cause the issuance, transfer or sale of, any Equity Interests. Except as set
forth in SCHEDULE 4.4(b) or pursuant to the Minority Equity Agreements, to
Sellers' knowledge, there are no outstanding contractual obligations of the
Sellers or the Acquired Companies that relate to the purchase, sale, issuance,
repurchase, redemption, acquisition, transfer, disposition, holding or voting of
any Equity Interests or granting any Person a right of first refusal, tag-along
right, drag-along right or other similar right with respect to any Equity
Interests in the Acquired Companies.
(c) On the applicable Closing Date, one or more Sellers will be the record and
beneficial owner of all of the Holding Company Equity Interests, free and clear
of any and all Liens other than Certain Permitted Liens. The Holding Company
Equity Interests will represent all outstanding Equity Interests in the Holding
Companies on such Closing Date.
4.5 FINANCIAL STATEMENTS. Attached as SCHEDULE 4.5 are true and correct
copies of (a) the unaudited combined balance sheets of the BellSouth Latin
America Group (including consolidated legal entities by country) as of
November 30, 2003 and 2002, together with the unaudited combined statements of
income for the two year period ending November 30, 2003, in each case reviewed
and used for purposes of preparing audited consolidated December 31, 2003
financial statements of Seller Parent, and (b) the audited financial statements
of each Operating Company at or as of November 30, 2003 and 2002 (except Uruguay
for which the date is December 31, 2003 and 2002) in each case audited for
purposes of preparing audited consolidated financial statements of Seller Parent
(such balance sheets and financial statements referred to in CLAUSES (a) and (b)
collectively, the "FINANCIAL STATEMENTS"). The Financial Statements (i) were
each prepared in accordance with U.S. GAAP, except as described on SCHEDULE 4.5,
on a consistent basis throughout the periods indicated, (ii) present fairly, in
all material respects, the financial position and results of operations of the
Operating Companies, as of the dates thereof and for the periods covered
thereby, (iii) contain and reflect all necessary adjustments and accruals in
accordance with U.S. GAAP and present fairly in all material respects the
financial condition of each Operating Company as of such dates and the results
of operations of such Operating Company for the periods covered thereby, (iv)
contain and reflect adequate provisions for all reasonably anticipated
liabilities in accordance with U.S. GAAP with
respect to the periods covered thereby and all prior periods, and (v) do not
reflect items resulting directly from the transactions contemplated by this
Agreement.
4.6 NO ADVERSE EFFECTS OR CHANGES. Except as listed in SCHEDULE 4.6, since
November 30, 2003, the Acquired Companies have conducted their respective
businesses only in, and have not engaged in any transaction that is material to
the Acquired Companies, as a whole, other than according to, the ordinary and
usual course of such businesses and there has not been:
(a) any change in the financial condition, liabilities and assets (taken
together), or business of the Acquired Companies, except as would not be
reasonably expected to have a Material Adverse Effect; or
(b) any damage, destruction or other casualty loss with respect to any asset or
property owned, leased or otherwise used by the Acquired Companies, whether or
not covered by insurance, except as would not be reasonably expected to have a
Material Adverse Effect.
4.7 NO DEFAULTS OR VIOLATIONS. Except as disclosed in SCHEDULE 4.7, to
Sellers' knowledge, none of the Acquired Companies is in default under the terms
of any Contract to which any such Acquired Company is a party or by which it is
bound, and no other party to any such Contract is in default under the terms of
any such Contract, except in each case where such breach or default has been
remedied or would not be reasonably expected to have a Material Adverse Effect;
4.8 LITIGATION. To Sellers' knowledge and except as disclosed in SCHEDULE
4.8, there are no actions, suits, arbitrations, proceedings, governmental
investigations or other litigation or Loss Contingencies pending against any
Acquired Company or any of their respective officers, directors, employees or
stockholders in their capacity as such before any court or other Governmental
Authority (or, to Sellers' knowledge, threatened in writing to be brought before
any court or other Governmental Authority) which (a) has had, or would
reasonably be expected to have, a Material Adverse Effect or (b) seeks to
materially delay or prevent the consummation of the transactions contemplated by
this Agreement. None of the Sellers or the Acquired Companies is subject to any
Governmental Orders (nor, to Sellers' knowledge, are there any such Governmental
Orders threatened in writing to be imposed by any Governmental Authority) which
have had, or would reasonably be expected to have, a Material Adverse Effect.
4.9 BROKERS. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based on arrangements made by or on
behalf of Sellers as to which Purchaser shall be liable after any Closing.
4.10 COMMUNICATIONS LICENSES. Each Acquired Company owns, and will as of the
applicable Closing Date own, and otherwise has the right to use all material
Communications Licenses necessary for the operation of the Business in the
manner in which it is currently and generally conducted, and each Acquired
Company does not, and will not as of the applicable Closing Date, believe or
have a reasonable basis to believe that any such material Communications
Licenses will terminate or be materially impaired within One Hundred Eighty
(180) days following the applicable Closing, assuming for this purpose
Purchaser's compliance with this Agreement and continuing operation of the
business of such Acquired Companies generally in accordance with Sellers' past
practices.
4.11 INTERMEDIATE HOLDING COMPANIES. Except as set forth on SCHEDULE 4.11,
no Intermediate Holding Company has (a) any assets other than Cash, Intercompany
Debt Receivables, Sellers Stockholder Debt, Equity Interests and/or purchase
accounting intangible assets or (b) any obligations or liabilities other than
(i) Debt and/or (ii) obligations or liabilities with respect to Minority Equity
Holders pursuant to Minority Equity Agreements or applicable Law.
4.12 OBLIGATIONS OR LIABILITIES. Each Acquired Company is not, and will not
as of the applicable Closing, be subject to any obligations or liabilities,
whether known or unknown, accrued or unaccrued, contingent or otherwise, which
in the aggregate would have an Individual Material Adverse Effect, except (a) as
disclosed pursuant to this Agreement, the Exhibits and the Schedules hereto,
including the Financial Statements, (b) for any Loss Contingencies and (c) for
Taxes.
4.13 ASSETS. Each Acquired Company has, and will have as of the applicable
Closing, all properties, assets, facilities, infrastructure and rights, and in
each case, in such condition and with such capacity, to conduct its respective
business in a manner generally consistent with the operations, capacities and
capabilities as compared to the conduct and operation of the business of such
Acquired Company as of the date hereof.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Sellers as follows:
5.1 DUE INCORPORATION. Purchaser is a corporation duly incorporated,
validly existing and in good standing under the laws of the Kingdom of Spain,
with all requisite corporate power and authority to own, lease and operate its
properties and to conduct its business as it is now being owned, leased,
operated and conducted.
5.2 DUE AUTHORIZATION. Purchaser has all requisite corporate power and
authority to enter into this Agreement and the Related Agreements and to
consummate the transactions contemplated hereby and thereby. The execution,
delivery and performance of this Agreement and the Related Agreements by
Purchaser, and the consummation by Purchaser of the transactions contemplated
hereby and thereby, have been duly and validly authorized and approved by
Purchaser and no other corporate actions or proceedings on the part of Purchaser
are necessary to authorize this Agreement, the Related Agreements and the
transactions contemplated hereby and thereby. Purchaser has duly and validly
executed and delivered this Agreement and prior to or at the applicable Closing
will duly and validly execute and deliver the Related Agreements. Assuming the
authorization, execution and delivery of this Agreement and the Related
Agreements by the other parties hereto and thereto, this Agreement constitutes a
legal, valid and binding obligation of Purchaser and the Related Agreements upon
execution and
delivery by Purchaser will constitute legal, valid and binding obligations of
Purchaser, in each case, enforceable in accordance with their respective terms,
except as such enforceability may be limited by Enforceability Limitations.
Purchaser has all requisite power and authority to cause its Subsidiaries to
take all actions necessary to enable Purchaser to comply with its obligations
under this Agreement and the Related Agreements and to consummate the
transactions contemplated hereby and thereby (including Purchaser's obligations
under SECTIONS 6.5, 6.6 and 6.29).
5.3 AUTHORITY RELATIVE TO THIS AGREEMENT.
(a) Except as set forth in SCHEDULE 5.3 and except as would not be reasonably
expected to have a Purchaser Material Adverse Effect, the execution, delivery
and performance by Purchaser of this Agreement and the Related Agreements, and
the consummation by Purchaser of the transactions contemplated hereby and
thereby, do not and will not (i) assuming that all Required Regulatory Approvals
have been obtained, violate any material Law applicable to or binding on
Purchaser or any of its assets; (ii) violate or conflict with, result in a
breach or termination of, constitute a default or give any third party any
additional right (including a termination right) under, permit cancellation of,
result in the creation of any Lien upon any of the assets of Purchaser under, or
result in or constitute a circumstance which, with or without notice or lapse of
time or both, would constitute any of the foregoing under, any Contract to which
Purchaser is a party or by which Purchaser or any of its assets are bound; (iii)
permit the acceleration of the maturity of any indebtedness of Purchaser or
indebtedness secured by its assets; or (iv) violate or conflict with any
provision of Purchaser's organizational documents.
5.4 LITIGATION. To Purchaser's knowledge, there are no actions, suits,
arbitrations, proceedings, governmental investigations or other litigation
pending against Purchaser or any of its officers, directors, employees or
stockholders in their capacity as such before any court or other Governmental
Authority (or, to Purchaser's knowledge, threatened in writing to be brought
before any court or other Governmental Authority) which seeks to materially
delay or prevent the consummation of the transactions contemplated by this
Agreement.
5.5 FINANCING. Purchaser has, and at each Closing will have, sufficient
cash resources and binding financing commitments in each case reasonably
satisfactory to Sellers that provide sufficient funds in the aggregate to pay in
cash any and all amounts necessary to consummate the payments and transactions
contemplated hereby and in the Related Agreements. Purchaser will have delivered
to Sellers on or prior to the date hereof, a legally binding commitment letter
from Telefonica, S.A. confirming its commitment to provide such funds to
Purchaser.
5.6 PURCHASE FOR INVESTMENT. Purchaser is acquiring the Sellers Equity
Interests and/or Holding Company Equity Interests for its own account solely for
investment and not with a view to, or for offer or resale in connection with, a
distribution of any of the Sellers Equity Interests or Holding Company Equity
Interests or any "beneficial interest" in the Sellers Equity Interests or
Holding Company Equity Interests within the meaning of the Securities Act of
1933, as amended, and the rules and regulations thereunder, and Purchaser has no
present intent, agreement or understanding to sell, pledge or otherwise dispose
of any Sellers Equity Interests or Holding Company Equity Interests or any
beneficial interest in any Sellers Equity Interests or Holding Company Equity
Interests to any other Person. Purchaser understands that the Sellers
Equity Interests and Holding Company Equity Interests have not been registered
under the Securities Act of 1933, as amended, or other applicable securities
laws, and that none of the Sellers Equity Interests or the Holding Company
Equity Interests may be offered for sale, sold or otherwise transferred unless
they are registered or otherwise qualified under federal and any other
applicable securities laws or unless an exemption from such registrations or
qualifications is available.
5.7 CONDITION OF ACQUIRED COMPANIES. Notwithstanding anything contained in
this Agreement to the contrary, Purchaser acknowledges and agrees that neither
Sellers nor the Acquired Companies or any of their respective Affiliates is
making any representations or warranties whatsoever, express or implied, beyond
those expressly given by Sellers in ARTICLE IV and those to be expressly given
by the Sellers and the Acquired Companies pursuant to the Additional
Representations Certificate (as modified by the Schedules hereto and thereto),
including as to projections, forecasts or forward-looking statements provided to
Purchaser or the accuracy or completeness of any memoranda, charts, summaries or
schedules heretofore made available by Sellers, their Affiliates or their
representatives to Purchaser, any of their Affiliates or their representatives
or any information that is not included in this Agreement or the Schedules
hereto or the Additional Representation Certificates or the schedules thereto.
5.8 BROKERS. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based on arrangements made by or on
behalf of Purchaser as to which Sellers shall be liable after any Closing.
5.9 NO KNOWLEDGE OF MISREPRESENTATIONS OR OMISSIONS. To Purchaser's
knowledge, none of the representations and warranties of Sellers made in this
Agreement are not true and correct in all material respects. To Purchaser's
knowledge, there are no material errors in, or material omissions from, any
Schedule.
ARTICLE VI
COVENANTS
6.1 IMPLEMENTING AGREEMENT. Subject to the terms and conditions hereof,
each party hereto shall take all action required of it to fulfill its
obligations under the terms of this Agreement and shall otherwise use best
efforts to consummate the transactions contemplated hereby.
6.2 ACCESS TO INFORMATION AND FACILITIES; DUE DILIGENCE EXAMINATION.
(a) Subject to the terms and conditions set forth in this Agreement, Sellers
shall and shall cause each Acquired Company to, from the Due Diligence
Commencement Date until the Due Diligence Expiration Date, (i) give Purchaser
and Purchaser's Representatives reasonable access, subject to the procedures set
forth in PART A on SCHEDULE 6.2(a), during normal business hours to the
important facilities, properties, accounts, books and records, equipment and
Contracts of the Acquired Companies and the information set forth in PART B of
SCHEDULE 6.2(a) hereof along with any other information that Purchaser may
reasonably request in light of the
materiality thresholds in representations contained in this Agreement and in the
Additional Representations Certificate, (ii) instruct the officers, key
employees, attorneys, auditors and other representatives of the Acquired
Companies and Sellers to reasonably cooperate with Purchaser in its
investigation of the Acquired Companies and (iii) furnish to Purchaser and
Purchaser's Representatives such financial and operating data and other
information concerning the Acquired Companies as Purchaser may reasonably
request; PROVIDED, HOWEVER, that nothing herein will obligate Sellers or the
Acquired Companies (A) to take any actions that would unreasonably interfere
with their business, (B) violate any applicable Law, policy or procedure,
(C) breach or violate any applicable Minority Equity Agreement or any fiduciary,
confidentiality or other duties or responsibilities owed by Sellers or their
Affiliates to Minority Equity Holders, any third party or any Acquired Company
(collectively, the "MINORITY EQUITY HOLDER RIGHTS"); PROVIDED, HOWEVER, that
Sellers agree to use their commercially reasonable efforts to obtain such
waivers as may be deemed necessary, in Sellers' sole discretion, to prevent any
breach or violation of any confidentiality provisions contained in any Minority
Equity Agreement or any third party agreement as may be caused by the compliance
by Sellers with this SECTION 6.2(a)), (D) provide access to personnel records of
the Acquired Companies relating to individual performance or evaluation records,
medical histories or other similar information regarding specific individuals
which, in Sellers' good faith opinion, is sensitive or the disclosure of which
could subject Sellers or the Acquired Companies to risk of liability under the
terms of any applicable agreement with such specific individuals or applicable
Law, (E) provide such access after normal business hours, (F) provide access to
any marketing strategies or customer segmentation relating to any Acquired
Company which primarily operates in any country in which Purchaser and its
Affiliates own, operate, manage or control any entity which may reasonably be
deemed to compete with such Acquired Company, and (G) provide such access for
more than a reasonable period (which will not, in any event, be more than thirty
(30) days with respect to access to any data room containing documents relating
to any Acquired Company and ten (10) Business Days with respect to all other
information not contained in any data room or any facilities or personnel).
Sellers agree that all such access and information relating to any Acquired
Company other than an Operating Company shall be made available to Purchaser in
Atlanta, Georgia. Purchaser acknowledges and agrees that all such access and
information derived therefrom will be deemed Confidential Information subject to
the confidentiality provisions set forth herein and to the Confidentiality
Agreement.
(b) Purchaser may (to the extent not in violation of confidentiality
restrictions, applicable Law or Minority Equity Holder Rights binding upon the
Acquired Companies) pursue a due diligence inquiry with regard to the Acquired
Companies as follows: (i) reviewing documents and other information to be
represented to in the Additional Representations Certificates, including any
documents and information scheduled as exceptions to the representations
contained in any Additional Representations Certificate; it being understood
that (A) the Acquired Companies need not provide any such information that is
not material (with respect to any representations in the Additional
Representations Certificate that contain a specific threshold amount, such
amount shall be considered to be the materiality cut-off) and (B) certain
confidential information required to be kept confidential under any Contract or
applicable Law (such as the names of customers) may be removed, summarized or
otherwise kept confidential and (ii) Seller-organized meetings with the officers
and/or independent auditors of the Acquired Companies, it being understood that
all such meetings shall be coordinated with the Seller Representative and that
the Seller Representative shall have the right to participate in each such
meeting and/or designate one or more other Person(s) to do so in its place. As
soon as practicable after the date of this Agreement, Sellers will, subject to
the limitations described in SECTION 6.2(a), contact and direct the Acquired
Companies to prepare for such due diligence inquiries. Purchaser shall have the
right to commence its due diligence inquiry on the date that Seller
Representative delivers the Additional Representations Certificates to Purchaser
and provides Purchaser with access to the important facilities and properties
(the "DUE DILIGENCE COMMENCEMENT DATE"), and thereafter Purchaser will be
permitted to pursue such due diligence through the thirty (30) days commencing
on and immediately following the Due Diligence Commencement Date (the thirtieth
(30th) day following the Due Diligence Commencement Date being the "DUE
DILIGENCE EXPIRATION DATE").
6.3 ADDITIONAL REPRESENTATIONS CERTIFICATE.
(a) Subject to the Minority Equity Holder Rights, Sellers shall, and shall cause
each Operating Company set forth in Column 1 of SCHEDULE II, and Intermediate
Holding Company (each, a "CERTIFYING OPERATING COMPANY"), to use best efforts to
deliver to Purchaser within twenty (20) days after the date of this Agreement a
certificate or, at Sellers' discretion, certificates signed by each Seller and
each Certifying Operating Company, setting forth the representations and
warranties contained in EXHIBIT C attached hereto with any exceptions necessary
for Sellers and the Certifying Operating Companies to make such representations
and warranties, which exceptions shall be set forth on schedules attached to
such certificate and with any changes to the actual language of the
representations and warranties contained in EXHIBIT C that any of Sellers' or
the Certifying Operating Companies' local counsel practicing law in any country
in the Territory shall recommend in order to make the actual language of such
representations and warranties contained in EXHIBIT C appropriate for the
Certifying Operating Company (or any Acquired Companies owned by any such
Acquired Company) and any country in the Territory (the "ADDITIONAL
REPRESENTATIONS CERTIFICATE"). Subject to the Minority Equity Holder Rights,
Sellers shall instruct the chief executive officer, president, general manager
or other equivalent officer and the chief financial officer, treasurer,
comptroller or other equivalent officer of each Seller, and to the extent that
any Certifying Operating Company is not a wholly-owned Subsidiary of a Seller,
each such Certifying Operating Acquired Company to execute the Additional
Representations Certificate with respect to or on behalf of such Certifying
Operating Company, which certification will confirm that such officers, in their
capacity as officers, to their knowledge, believe the statements therein to be
true, correct and complete. The representations and warranties made by Sellers
in the Additional Representations Certificate delivered to Purchaser pursuant to
this SECTION 6.3(a) shall be deemed to supplement the representations and
warranties made by Sellers in ARTICLE IV hereof with respect to the Acquired
Companies, and shall be deemed to be representations and warranties of the
Sellers as of the date the Additional Representations Certificate is delivered.
(b) No later than ten (10) days prior to the Due Diligence Expiration Date,
Sellers shall deliver or cause to be delivered to Purchaser a statement setting
forth in reasonable detail Sellers' determination of the amount of the Acquired
Companies Loss Contingencies Reserves and the Acquired Companies' Impairment
Losses ("SELLERS LOSS CONTINGENCIES AND IMPAIRMENT LOSSES AMOUNT"). No later
than ten (10) Business Days after the Due Diligence Expiration Date, Purchaser
shall deliver or cause to be delivered to Sellers a statement setting forth in
reasonable detail Purchaser's determination of what the amount of the Acquired
Companies Loss
Contingencies Reserves and the Acquired Companies' Impairment Losses should be,
if measured as of the Due Diligence Expiration Date, accompanied by any
supporting documentation as Sellers may reasonably request ("PURCHASER LOSS
CONTINGENCIES AND IMPAIRMENT LOSSES AMOUNT"). Within thirty (30) days after
receipt of the Purchaser Loss Contingencies and Impairment Losses Amount, the
Seller Representative shall deliver to Purchaser a written statement describing
its objections (if any) to the Purchaser Loss Contingencies and Impairment
Losses Amount. If the Seller Representative does not raise any objections in a
written statement to Purchaser within such thirty (30)-day period, Sellers shall
be deemed to have accepted and agreed to the Purchaser Loss Contingencies and
Impairment Losses Amount and the Purchaser Loss Contingencies and Impairment
Losses Amount shall become final, binding and conclusive upon all parties. If
the Seller Representative raises objections in a written statement to Purchaser
within such thirty (30)-day period, the parties shall attempt to resolve their
differences, and any written resolution by them as to the disputed amount shall
be final, binding and conclusive. If the parties cannot resolve such objection
within ten (10) Business Days after the receipt by Purchaser of such written
statement, any remaining disputes shall be resolved by Ernst & Young LLP, or if
Ernst & Young LLP declines such engagement, by another internationally
recognized independent accounting firm mutually acceptable to Purchaser and
Sellers (the "CONTINGENCY FIRM"). The Contingency Firm shall be instructed to
resolve such disputes within thirty (30) days after its appointment. The
determination by the Contingency Firm shall be set forth in writing and shall be
conclusive and binding upon all parties and shall be deemed to be the "FINAL
LOSS CONTINGENCIES AND IMPAIRMENT LOSSES AMOUNT". The fees and expenses of the
Contingency Firm shall be borne by Sellers and Purchaser on a 50/50 basis. In
the event that the Final Loss Contingencies and Impairment Losses Amount is
greater than the Sellers Loss Contingencies and Impairment Losses Amount, then
Purchaser shall be entitled to make a claim for indemnification pursuant to
SECTION 10.2(a)(iv) for the amount by which the Final Loss Contingencies and
Impairment Losses Amount exceeds the Sellers Loss Contingencies and Impairment
Losses Amount (such amount, the "LOSS CONTINGENCY AND IMPAIRMENT LOSSES
SHORTFALL").
6.4 PRESERVATION OF BUSINESS.
(a) Except as provided or contemplated by this Agreement, including
SECTIONS 6.4(b), 6.4(c) and 6.4(d), and as provided in the Minority Equity
Agreements, from the date of this Agreement until the applicable Closing Date
relating to such Acquired Company, Sellers shall cause the Acquired Companies to
operate their Businesses in the ordinary course of business and in a manner
generally consistent with past practice and in general conformity with the 2004
budget for the Operating Companies on a combined basis included in
SCHEDULE 6.4(a) (the "2004 BUDGET") subject to the general assumptions relating
to the 2004 Budget, currency fluctuations and restrictions or controls and
prudent business judgment. From and after the date hereof, Sellers will provide
to Purchaser a monthly management report describing the performance of such
Operating Company, including in relation to the 2004 Budget, which Purchaser
agrees and acknowledges will be Confidential Information subject to the
confidentiality provisions set forth herein and in the Confidentiality
Agreement. Sellers or the Acquired Companies make no representations or
warranties, whether express or implied, as to the performance of, or any
projections, forecasts or forward-looking statements relating to, any Acquired
Company and there is no assurance that any projection or forecast results will
be achieved. In addition, from and after the date of this Agreement until the
applicable Closing Date, and except as provided or
contemplated by this Agreement, including SECTIONS 6.4(b), 6.4(c) and 6.4(d),
and as provided in the Minority Equity Agreements, Sellers shall cause the
Acquired Companies to use their respective commercially reasonable efforts to
(i) preserve intact the Business and the business organization of each Acquired
Company in all material respects, (ii) maintain in effect all material licenses,
permits, and approvals of Governmental Authorities which are necessary for the
conduct of the Business as presently conducted, (iii) maintain, preserve and
keep the assets of such Acquired Company in good condition and repair, normal
wear and tear excepted (other than any obsolete assets or assets that are
otherwise no longer necessary for use in the operation of the business of such
Acquired Company) and (iv) subject to SECTION 6.13, keep available the services
of such Acquired Companies' present management and workforce.
(b) Except as provided or contemplated by this Agreement, including
SECTIONS 6.4(a), (c) and (d), or as contemplated by the 2004 Budget, from the
date of this Agreement until the applicable Closing Date relating to each
Acquired Company, Sellers shall cause each such Acquired Company not to (without
the prior written consent of Purchaser, which consent shall not be unreasonably
withheld or delayed) take any of the following actions:
(i) amend its articles of organization, by-laws or other equivalent
organizational documents;
(ii) (A) sell, lease, transfer, mortgage, encumber or otherwise dispose
of any of its properties or assets having a value in excess of Ten
Million Dollars ($10,000,000) in the aggregate, in one transaction or a
series of related transactions (other than (1) in connection with
securing Debt for borrowed money, the amount of which shall be included
in the adjustments provided for in SECTION 2.4, (2) in connection with
any Lien arising in the ordinary course, (3) in connection with any
intercompany transfers among the Acquired Companies and/or the Holding
Companies and (4) the sale or disposition of obsolete or worn-out
equipment and other similar transactions in the ordinary course of
business consistent with past practice) or (B) transfer properties or
assets having a value in excess of Ten Million Dollars ($10,000,000)
in the aggregate to joint ventures, partnerships, corporations or other
business entities in which it is or thereby becomes a participant;
(iii) merge or consolidate or sell, directly or indirectly, all or
substantially all of its assets;
(iv) make loans, advances or other extensions of credit (other than
Sellers Stockholder Debt, Intercompany Debt, Intercompany Payables and
Intercompany Debt Receivables) to any Person in excess of an aggregate
of One Million Dollars ($1,000,000) at any time outstanding;
(v) except as permitted by SECTION 6.4(b)(iv), execute, modify,
terminate or extend any material Contract or agreement, written or
oral, with any Affiliate except in the ordinary course of business and
consistent with prior practice;
(vi) grant any indemnity, bond or any other guarantee for the benefit
of a third party, except in the ordinary course of business consistent
with prior practice;
(vii) make, declare, set aside or pay any dividend or make any other
distribution on, or directly or indirectly redeem, purchase or
otherwise acquire, any shares of its capital stock or other equity
interests or any securities or obligations convertible into or
exchangeable for any shares of its capital stock or other equity
interests, except as required (A) pursuant to any legal obligations
under any contract, corporate charter, by-laws or similar document in
effect on the date hereof or (B) by applicable Law;
(viii) enter into any direct or indirect transaction with the Sellers
or any Affiliate of the Sellers or any of the other stockholders of any
of the Acquired Companies (including the purchase, sale, lease or
exchange of any property, or rendering of any service or modification
or amendment of any existing agreement or arrangement) involving the
payment of more than Five Million Dollars ($5,000,000) or extending for
a period of more than one year other than as contemplated by this
Agreement or the 2004 Budget;
(ix) materially change the nature of the business engaged in by the
Acquired Companies on the date hereof;
(x) commence any proceeding or file any petition in any court relating
to bankruptcy, reorganization, insolvency, liquidation or relief from
debtors;
(xi) issue or sell any capital stock or other equity interests, other
than (A) settlement of previously granted phantom stock options (which
shall not involve issuance of Equity Interests), (B) options or other
equity interests issued in connection with or pursuant to the
transactions contemplated by SECTIONS 6.31, 6.32 and 6.34 and (C) in
connection with any restructuring or refinancing of any Debt;
(xii) make any change in any method of accounting or accounting
practice or policy except (A) with respect to conforming changes
relating to the useful lives for depreciation of fixed assets and
(B) as required by changes in U.S. GAAP or local GAAP used in the
jurisdiction of any subject Acquired Company with the concurrence of
its independent accountants or manage its working capital other than in
general conformity with past practices;
(xiii) (A) increase the compensation or fringe benefits of any of its
present or former directors, officers or employees (except for
increases in salary or wages in the ordinary course of business
consistent with past practice and except for compensation or benefits
provided under retention and severance programs that are implemented by
Sellers or Acquired Companies in accordance with SECTION 6.4(c) or
(B) except in the ordinary course of business, loan or advance any
money or other property to any of its present or former directors,
officers or employees;
(xiv) enter into any material agreements other than in the ordinary
course of business consistent with past practice, enter into any
contractual obligation or commitment which would impose a material
burden on any Acquired Company in connection with its migration from
CDMA technology, or terminate or modify any of its
material agreements or material Communication Licenses or dispose, in
whole or in part, of any of its material intellectual property; or
(xv) enter into any capital leases, including any sale/leaseback
transactions;
(xvi) enter into any currency, interest rate, swap or other hedging or
derivative transactions or instruments for any purpose, including for
any speculative purpose or in relation to any Debt of an Acquired
Company, except to the extent that any such transaction may, in the
ordinary course of business, consistent with past practice, be entered
into for prudent business purposes with respect to the capital
expenditure and operating expenditure requirements of the business of
such Acquired Company (including for purposes of making scheduled
payments of principal and interest in respect of any Debt with respect
to which a payment becomes due and payable within one-hundred
twenty (120) days of the entering into of such transaction or
instrument);
(xvii) agree to, or make any commitment to, take, or authorize, any of
the actions prohibited by this SECTION 6.4(b);
(xviii) approve and consummate any redemption, repayment or other
repurchase of any capital stock which by its terms or upon the
happening of any event (A) matures or is mandatorily redeemable
pursuant to a sinking fund obligation or otherwise; (B) is convertible
or exchangeable for Debt or other capital stock of the type described
in this CLAUSE (xviii), or (C) is redeemable at the option of the
holder thereof, in whole or in part; or
(xix) issue any guarantee in support of Debt of a third party.
(c) Notwithstanding anything to the contrary in SECTIONS 6.4(a) and (b) or
anything else provided in this Agreement, Sellers and the Acquired Companies
shall not be prohibited from taking any and all steps necessary to (i) comply
with applicable Law or Minority Equity Holder Rights, (ii) comply with this
Agreement, including obtaining the Required Regulatory Approvals and the
Required Minority Equity Holder Approvals and consummating the assignments
contemplated by SECTION 6.25, (iii) remedy any Known Debt Defaults or amend,
modify, waive, restructure, refinance, discharge, incur, satisfy, purchase or
acquire, any Debt, indebtedness, obligations or liabilities (whether or not
subject to a Known Debt Default) of the Acquired Companies or, solely with
respect to the Argentinian Acquired Company and the Colombian Acquired Company,
allow any proceeding or file any paper in any court relating to bankruptcy,
reorganization, insolvency, liquidation or relief from debtors or any similar
proceeding with respect to any Acquired Companies subject to Known Debt Defaults
(PROVIDED, that Sellers and the Argentinian Acquired Company or Colombian
Acquired Company shall not be permitted to initiate any such proceeding unless
such proceeding is in response to any action taken by any creditor of the
Argentinian Acquired Company or Colombian Acquired Company in connection with
the commencement of any action or proceeding relating to bankruptcy,
reorganization, insolvency, liquidation or obtaining of relief from debtors or
any similar proceeding with respect to the Argentinian Acquired Company or the
Colombian Acquired Company); PROVIDED, HOWEVER, that no restructuring or
refinancing shall include any mechanism that incorporates a reset, step-up, zero
coupon or similar type of provision that has the effect of
deferring or significantly increasing interest obligations after an applicable
Closing Date as compared to such interest obligation as of the date hereof,
(iv) establish and implement such severance and retention programs, the
guidelines with respect to which are set forth in SCHEDULE 6.4(c) (the
"RETENTION PLANS"), (v) enter into any transactions permitted or required by
SECTIONS 6.31, 6.32, 6.33 or 6.34, or as is required to satisfy the closing
condition set forth in SECTION 7.2(f); (vi) distribute available cash as a
dividend, return of capital or as otherwise legally permitted, (vii) distribute
notes up to the amount of their respective accumulated earnings and profits (as
defined in Code Section 964), (viii) convert local currency to United States
dollars, (ix) make any entity classification elections permitted under the
United States tax regulations, (x) convert to another form of organization under
local law, (xi) pay stock dividends, (xii) enter into any recapitalization or
reorganization transactions or, (xiii) transfer any of Sellers equity Interests
to another Seller. Notwithstanding any of the provisions of this Agreement, in
no event will Sellers be obligated to make any contribution, including any
capital contribution, to any Acquired Company from the date of this Agreement
through the applicable Closing Date with respect to such Acquired Company except
to the extent previously agreed to by such Seller with any third party.
(d) From the date of this Agreement through the applicable Closing Date with
respect to each Acquired Company, Purchaser shall cooperate with Sellers and the
Acquired Companies in Sellers' efforts to retain the employees, consultants and
other service providers of the Acquired Companies.
(e) From the date of this Agreement through the applicable Closing Date with
respect to each Acquired Company, Sellers shall, and shall cause the Acquired
Companies to, pay all Taxes when due and payable in the ordinary course of
business and to the extent required under applicable Law in effect as of the
date hereof, other than any Taxes that are being contested in good faith by
appropriate proceedings or that Sellers do not in good faith believe are due and
payable under applicable Law in effect as of the date hereof.
(f) Subject to the provisions of the Minority Equity Agreements, any Minority
Equity Holder Rights and any Rights of First Refusal, from the date hereof until
the applicable Closing Date, with respect to any Acquired Company, Sellers shall
reduce or cause to be reduced the Sellers Equity Interests it holds in such
Acquired Company.
6.5 CONSENTS AND APPROVALS.
(a) From the date of this Agreement until the Final Closing Date, each Seller
shall, and, subject to applicable Law and the Minority Equity Holder Rights,
shall cause each Acquired Company until, (i) with respect to any Initial
Acquired Company or any Subsequent Acquired Company, the applicable Closing
Date, (ii) with respect to any Retained Company, the applicable Retained Company
Determination Date, (iii) with respect to any Section 6.29 Retained Company, the
applicable Section 6.29 Retained Company Determination Date and (iv) with
respect to any ROFR Company, the applicable ROFR Determination Date, to use its
best efforts to obtain all consents, approvals, certificates and other documents
required in connection with the performance by it of this Agreement and its
Related Agreements and the consummation by it of the transactions contemplated
hereby and thereby. From the date of this Agreement until the Final Closing
Date, Purchaser shall and shall cause its Subsidiaries to, use
best efforts to obtain all consents, approvals, certificates and other documents
required in connection with the performance by it of this Agreement and its
Related Agreements and the consummation by it of the transactions contemplated
hereby and thereby. Each Seller shall and, subject to applicable Law and the
Minority Equity Holder Rights, shall cause each Acquired Company to, promptly
make all filings, applications, statements and reports to all Governmental
Authorities and other Persons that are required to be made prior to the
applicable Closing Date with respect to such Acquired Company by or on behalf of
Sellers or the Acquired Companies pursuant to any applicable Law (including
Required Regulatory Approvals) or Contract in connection with this Agreement,
its Related Agreements and the transactions contemplated hereby and thereby.
Purchaser (A) shall promptly (and in any event, within ten (10) Business Days
following the date of this Agreement) notify Seller of all filings,
applications, statements and reports to all Governmental Authorities and other
Persons that are required to be made prior to the Initial Closing Date or any
Subsequent Closing Date by or on behalf of Purchaser or any of its Affiliates
pursuant to any applicable Law (including Required Regulatory Approvals) or
Contract in connection with this Agreement, its Related Agreements and the
transactions contemplated hereby and thereby, and (B) shall promptly make, or
cause its Subsidiaries to make, all such filings, applications, statements and
reports.
(b) In addition to Purchaser's obligations pursuant to SECTION 6.5(a), Purchaser
shall, and shall cause its Subsidiaries to, use best efforts to obtain as soon
as practicable the Required Regulatory Approvals. Without limiting the
generality of the foregoing, the parties to this Agreement shall cooperate with
one another: (i) in the prompt preparation and filing (as soon as practicable
and in any event no later than thirty (30) days after the date of this
Agreement) of any and all instruments, agreements or other documents required to
be filed in connection with any Required Regulatory Approvals; (ii) in
determining whether action by or in respect of, or filing with, any Governmental
Authority is required, proper or advisable or any actions, consents, waivers or
approvals are required to be obtained from parties to any Contracts in
connection with the transactions contemplated by this Agreement; (iii) in
keeping the other party apprised of communications to or from Governmental
Authorities; with respect to the submission, prosecution or obtaining of the
Required Regulatory Approvals; (iv) in the prompt notification and meeting with
any appropriate Governmental Authority; and (v) in seeking timely to obtain any
such actions, consents or waivers or to make any such filings subject with
respect to each of clause (i), (ii), (iii) and (iv), in the case of Sellers, to
the Minority Equity Holder Rights. No party hereto shall (and Purchaser shall
not permit any of its Subsidiaries to) consummate another transaction or enter
into an agreement with respect to another transaction or take any other action
if the intent or reasonably anticipated consequence of such transaction or
action is, or would be, to cause any Governmental Authority not to grant
approval of any Required Regulatory Approval or materially delay either such
approval or the consummation of the assignment or transfer of control of the
Communications Licenses. In addition, if required by a Governmental Authority of
competent jurisdiction, Purchaser shall and, if applicable, shall cause its
Subsidiaries to, take or accept one or more Actions of Divestiture in order to
resolve with the minimum practicable delay any objections such authority may
have to the transactions contemplated by this Agreement under applicable Laws;
PROVIDED, HOWEVER, that Purchaser shall not be required to take or accept (or
cause any of its Subsidiaries to take or accept) any such Actions of Divestiture
with regard to the Argentinian Acquired Company or the Chilean Acquired Company
if the Action of Divestiture Fair Value of all of the Actions of Divestiture
required by any final and nonappealable Governmental Order in connection with
the Argentinian
Acquired Company and the Chilean Acquired Company exceeds, in the aggregate, the
threshold set forth in SCHEDULE 6.5(b) (the "ACTION OF DIVESTITURE THRESHOLD");
PROVIDED, HOWEVER, that, in each case, any adverse economic consequences with
respect to any synergies, cost reductions or benefits from (or any synergies,
cost reductions or benefits expected or anticipated to result from) from the
combination or consolidation of Purchaser and its Affiliates with one or more
Acquired Companies and its businesses and operations shall be disregarded in
connection with such determination. For the avoidance of doubt, in addition to
Purchaser's obligations set forth in the preceding sentence, with respect to the
Argentinian Acquired Company and the Chilean Acquired Company, Purchaser shall,
and shall cause its Subsidiaries to, take all steps necessary to obtain as soon
as practicable the Required Regulatory Approvals and to consummate the
transactions contemplated by this Agreement (including the purchase of the
Sellers Equity Interests in the Argentinian Acquired Company and the Chilean
Acquired Company), which steps shall include taking or accepting any and all
Actions of Divestiture requested by any Governmental Authority with respect to
the Argentinian Acquired Company and the Chilean Acquired Company to the extent
that the Action of Divestiture Fair Value of such Actions of Divestiture does
not exceed, in the aggregate, the Action of Divestiture Threshold; PROVIDED,
HOWEVER, that in the event the Action of Divestiture Fair Value of such Actions
of Divestiture required by final and nonappealable Governmental Orders would
exceed, in the aggregate, the Action of Divestiture Threshold, subject to
Purchaser's obligations set forth in the next sentence, Purchaser shall have no
obligation to take or accept Actions of Divestiture with respect to either the
Argentinian Acquired Company or the Chilean Acquired Company and shall have no
obligation to purchase the Sellers Equity Interests in either the Argentinian
Acquired Company or the Chilean Acquired Company, PROVIDED that, in such event,
Purchaser may, at its option, elect to take or accept the required Actions of
Divestiture in connection with, and purchase the Sellers Equity Interests of,
either or both of the Argentinian Acquired Company or the Chilean Acquired
Company. Notwithstanding anything to the contrary set forth in this Agreement,
in the event that the Action of Divestiture Fair Value of the Actions of
Divestiture required by any Governmental Order with respect to the Argentinian
Acquired Company and the Chilean Acquired Company in connection with the
transactions contemplated by this Agreement exceeds, in the aggregate, the
Action of Divestiture Threshold, Purchaser and Sellers agree that they shall
nonetheless use best efforts to appeal such requests and/or Governmental Orders
(including taking any and all actions contemplated by SECTION 6.29(a)) in order
to eliminate the Actions of Divestiture and/or reduce the Action of Divestiture
Fair Value with respect to such Actions of Divestiture below the Action of
Divestiture Threshold.
(c) As soon as practicable but in no event later than ten (10) Business Days
following the date upon which the parties reasonably determine in good faith
that the Governmental Authorities in Argentina and Chile have issued final and
nonappealable Governmental Orders determining all Actions of Divestiture, if
any, required to be taken or accepted in connection with the Argentinian
Acquired Company and the Chilean Acquired Company, in the event that Purchaser
claims or asserts that such Actions of Divestiture have an Action of Divestiture
Fair Value that would exceed, in the aggregate, the Action of Divestiture
Threshold, the parties shall retain the Valuation Firm and instruct the
Valuation Firm to determine the Action of Divestiture Fair Value of all such
required Actions of Divestiture no later than the date which is thirty (30) days
after the date of such Valuation Firm's retention. The Valuation Firm's final
determination of the Action of Divestiture Fair Value shall be set forth in a
detailed written report that describes the methodology, procedures and
assumptions used in making such determination
(which methodology, procedures and assumptions shall be consistent with the
applicable terms of this Agreement), and such determination shall be conclusive
and binding upon all parties. The parties agree to promptly provide to the
Valuation Firm all information reasonably requested by the Valuation Firm to
assist it in making such determination. The fees and expenses of the Valuation
Firm shall be shared equally between Sellers and Purchaser.
(d) In the event that, solely with respect to the Argentinian Acquired Company
and the Chilean Acquired Company, an Action of Divestiture is not required to be
taken or accepted pursuant to SECTION 6.5(b), because the Action of Divestiture
Fair Value of the required Actions of Divestiture exceeds, in the aggregate, the
Action of Divestiture Threshold, then each of the Argentinian Acquired Company
and the Chilean Acquired Company shall be deemed to be a "RETAINED COMPANY"
(unless and to the extent Purchaser elects to take or accept all required
Actions of Divestiture in connection with either or both of the Argentinian
Acquired Company or the Chilean Acquired Company notwithstanding the fact that
the Action of Divestiture Threshold has been exceeded and, following the
applicable Retained Company Determination Date, (i) the parties shall
nevertheless be obligated to consummate the Initial Closing and any Subsequent
Closing and the other transactions contemplated pursuant to this Agreement
except with respect to any such Retained Company (or any Section 6.29 Retained
Company or ROFR Company), (ii) the applicable Seller will retain and continue to
hold and own its Seller Equity Interests or Holding Company Equity Interests
relating to, and any Sellers Stockholder Debt with regard to, any such Retained
Company, (iii) the Sellers Equity Interests of any such Retained Company shall
be deemed to be excluded from the definition of "Sellers Equity Interests" and
"Holding Company Equity Interests" for all purposes of this Agreement and (iv)
no representations or warranties shall be deemed to have been made by Sellers
with respect to any such Retained Company. For the avoidance of doubt, from and
after the Retained Company Determination Date with respect to any Retained
Company, SECTIONS 6.5 and 6.6 and ARTICLE III, as well as any other provisions
that would otherwise reasonably be interpreted to treat such Retained Company as
an Acquired Company whose Sellers Equity Interests are being transferred
directly or indirectly pursuant to the transactions contemplated by this
Agreement, will no longer be applicable to such Retained Company; PROVIDED, that
SECTIONS 6.8 and 6.28, as well as the Confidentiality Agreement, will continue
to be applicable to all Retained Companies.
6.6 APPLICATIONS IN RESPECT OF COMMUNICATIONS LICENSES. Notwithstanding the
general timing requirements set forth in SECTION 6.5(b), as promptly as
practicable after the execution and delivery of this Agreement and in any event
within thirty (30) Days thereafter, Purchaser shall (or shall cause one or more
of its Subsidiaries to) prepare and deliver to the Seller Representative
Purchaser's completed portion of all appropriate applications for approval by
each relevant Governmental Authority, and such other documents as may be
required, with respect to the assignment or transfer of control of each of the
Communications Licenses, the Network Facilities and/or the Acquired Companies
(collectively, the "LICENSE APPLICATIONS"). As promptly as practicable after its
receipt thereof, and in any event within thirty (30) Days thereafter, Sellers
shall, subject to the Minority Equity Holder Rights, cause each Acquired Company
to prepare and deliver to Purchaser its completed portion of all appropriate
License Applications. As soon as practicable after the execution and delivery of
this Agreement, the parties shall file, or cause to be filed, the License
Applications, subject, in the case of the Sellers, to the Minority Equity Holder
Rights. If an Initial Closing or any Subsequent Closing shall not have occurred
for any reason within any applicable initial consummation period set forth in
the
grant of the License Applications with respect to any Initial Acquired Company
or Subsequent Acquired Company, and neither Sellers nor Purchaser shall have
terminated this Agreement prior to the Initial Closing Date pursuant to
ARTICLE IX, Purchaser and Sellers (or the applicable Initial Acquired Company or
the applicable Subsequent Acquired Company) shall jointly request one or more
extensions of the consummation period set forth in such grant.
6.7 ACQUIRED COMPANY DEBT; INTERCOMPANY DEBT; INTERCOMPANY PAYABLES.
(a) Subject to any agreement with the lenders of an Acquired Company reached in
accordance with the provisions of SECTION 6.40, Purchaser agrees to satisfy,
pay, discharge or otherwise acquire or cause to be satisfied, paid, discharged
or otherwise acquired the full amount of all Pay-Off Debt of (i) each Initial
Acquired Company prior to or at the Initial Closing and (ii) each Subsequent
Acquired Company that is the subject of a Subsequent Closing, if any, prior to
or at the applicable Subsequent Closing; PROVIDED, that if any Pay-Off Debt that
has a BellSouth Guarantee is acquired, such BellSouth Guarantee and all other
obligations of the BellSouth Entities with respect to such Pay-Off Debt shall be
terminated in full by no later than the applicable Closing.
(b) Purchaser agrees to cause the Acquired Companies to satisfy, pay, discharge
or otherwise cause to be satisfied, paid, or discharged the full amount of all
(i) Intercompany Debt of each Initial Acquired Company prior to or at the
Initial Closing except to the extent the creditor under the Intercompany Debt is
an Initial Acquired Company and (ii) Intercompany Debt of each Subsequent
Acquired Company that is the subject of a Subsequent Closing, if any, prior to
or at the Subsequent Closing to the extent the creditor under the Intercompany
Debt is not an Initial Acquired Company or a Subsequent Acquired Company that is
the subject of such Subsequent Closing or any earlier Subsequent Closing;
PROVIDED, HOWEVER, that in the event any such Initial Acquired Company or any
such Subsequent Acquired Company does not have the funds necessary to satisfy,
pay, or discharge the amounts due and payable with respect to such Intercompany
Debt or is otherwise prohibited from satisfying, paying or discharging such
amounts as a result of any senior Debt, then Purchaser shall satisfy, pay,
discharge or otherwise cause to be satisfied, paid or discharged any such
amounts payable pursuant to this SECTION 6.7(b).
(c) Sellers agree to cause any Non-Transferred Company to satisfy, pay,
discharge or otherwise cause to be satisfied, paid, or discharged the full
amount of all (i) Intercompany Debt of each Non-Transferred Company (that has
been deemed to be a Non-Transferred Company prior to or at the Initial Closing)
that is payable to any Initial Acquired Company prior to or at the Initial
Closing, (ii) Intercompany Debt of each Non-Transferred Company (that has been
deemed to be a Non-Transferred Company prior to or at any Subsequent Closing)
that is payable to any Subsequent Acquired Company that is the subject of such
Subsequent Closing prior to or at such Subsequent Closing and (iii) Intercompany
Debt of each Non-Transferred Company (that was not deemed to be a
Non-Transferred Company prior to or at the Initial Closing or any Subsequent
Closing) that is payable to an Acquired Company no later than ten (10) Business
Days after the determination that such entity is a Non-Transferred Company;
PROVIDED, HOWEVER, that in the event any such Non-Transferred Company does not
have the funds necessary to satisfy, pay or discharge the amounts due and
payable with respect to such Intercompany Debt or is otherwise prohibited from
satisfying, paying or discharging such amounts as a result of any
senior Debt, then Sellers shall purchase the Intercompany Debt Receivable from
the applicable Acquired Company.
(d) Prior to or at the Initial Closing, (i) each Initial Acquired Company will
pay in cash the full amount of all Intercompany Payables of such Initial
Acquired Company that are payable to any Acquired Company (other than an Initial
Acquired Company) and (ii) each Acquired Company (other than an Initial Acquired
Company) will pay in cash the full amount of all Intercompany Payables of such
Acquired Company that are payable to any Initial Acquired Company. Prior to or
at any Subsequent Closing, (A) each Subsequent Acquired Company will pay in cash
the full amount of all Intercompany Payables of such Subsequent Acquired Company
that are payable to any Acquired Company (other than any Initial Acquired
Company or any Subsequent Acquired Company that is the subject of the same
Subsequent Closing) and (B) each Acquired Company (other than an Initial
Acquired Company or any Subsequent Acquired Company that is the subject of such
Subsequent Closing) will pay in cash the full amount of all Intercompany
Payables of such Acquired Company that are payable to any Subsequent Acquired
Company that is the subject of such Subsequent Closing.
(e) Except as otherwise expressly set forth in this Agreement or directed by
Sellers in their sole discretion, Sellers will cause to be paid on or prior to
the Initial Closing Date, or any Subsequent Closing Date, if applicable, any and
all amounts owed or payable as of such Closing by any Initial Acquired Company
or Subsequent Acquired Company to any BellSouth Entity, including any amounts
payable pursuant to SECTIONS 6.10 and 6.13 or pursuant to the Technical Services
Agreements; PROVIDED, HOWEVER, that in the event any such Initial Acquired
Company or any such Subsequent Acquired Company does not have the funds
necessary to satisfy, pay, or discharge the amounts due and payable to any
BellSouth Entity or is otherwise prohibited from satisfying, paying or
discharging such amounts as a result of any Debt or other restriction, then
Purchaser shall satisfy, pay, discharge or otherwise cause to be satisfied, paid
or discharged any such amounts payable pursuant to this SECTION 6.7(e). In
addition, except as otherwise expressly set forth in this Agreement or directed
by Purchaser in its sole discretion, Seller Parent will cause any BellSouth
Entity to pay on or prior to the Initial Closing Date, or any Subsequent Closing
Date, if applicable, any and all amounts owed by the BellSouth Entities to any
such Initial Acquired Company or any such Subsequently Acquired Company,
including any amounts payable pursuant to SECTIONS 6.10 or 6.13 or pursuant to
the Technical Services Agreement.
6.8 CONFIDENTIALITY.
(a) Purchaser acknowledges that the access and information being provided to it
in connection with the transactions contemplated by this Agreement is subject to
the terms of the Information Exchange Agreement, dated May 22, 2003, between
Seller Parent and Purchaser (the "CONFIDENTIALITY AGREEMENT"), the terms of
which are incorporated herein by reference. Purchaser further agrees that from
and after the date of this Agreement, Purchaser shall, and shall cause its
Affiliates and their Representatives to, keep confidential and not disclose all
confidential information described in the Confidentiality Agreement and all
other information relating to BellSouth Entities or the Acquired Companies
("CONFIDENTIAL INFORMATION"), and shall not directly or indirectly use such
Confidential Information for any purpose other than in connection with the
transactions contemplated by this Agreement. If this Agreement is terminated
pursuant to ARTICLE IX, Purchaser's obligation to keep such Confidential
Information
confidential shall continue indefinitely from the date of termination, but shall
not apply to any information which (i) is in the public domain, (ii) is
published or otherwise becomes part of the public domain through no fault of
Purchaser, any of its Affiliates or any of their Representatives, (iii) becomes
available to Purchaser, any of its Affiliates or any of their Representatives on
a non-confidential basis from a source that did not acquire such information
(directly or indirectly) from Sellers or Purchaser on a confidential basis or
(iv) is required to be disclosed by judicial or administrative process or by
other requirements of applicable Law or any Governmental Authority (including in
connection with obtaining the necessary approvals of this Agreement or the
transactions contemplated hereby of Governmental Authorities).
(b) Effective upon, and only upon, the Final Closing, the Confidentiality
Agreement shall terminate with respect to information relating solely to the
Acquired Companies; PROVIDED, HOWEVER, that Purchaser acknowledges that any and
all other information provided to it by Sellers or Sellers' representatives
concerning Sellers and their Affiliates shall remain subject to the terms and
conditions of the Confidentiality Agreement after the Final Closing and
Purchaser and each of the Acquired Companies shall be subject to a Technical
Information Confidentiality Agreement.
(c) In the event that this Agreement is terminated for any reason, promptly (but
in any event no later than five (5) Business Days) following such termination,
Purchaser shall, and shall cause its Representatives to, (i) return to Sellers
all Confidential Information (and all copies, reproductions or extracts of
Confidential Information) furnished to Purchaser and Purchaser's Representatives
by or on behalf of Sellers or the Acquired Companies or have an executive
officer of Purchaser certify to Sellers that all copies, reproductions or
extracts have been destroyed and (ii) destroy all Confidential Information
prepared by Purchaser or Purchaser's Representatives that contains, or reflects
or is based upon, in whole or in part, information furnished to Purchaser or
Purchaser's Representatives by or on behalf of Sellers or the Acquired
Companies; PROVIDED, HOWEVER, that copies of such information may be maintained
solely to the extent reasonably required to support the basis for such
termination. Such destruction shall be certified in writing to the Seller
Representative by each of an executive officer of Purchaser and an authorized
officer of Purchaser supervising such destruction. Notwithstanding the return or
destruction of the Confidential Information, Purchaser and Purchaser's
Representatives will continue to be bound by the obligations of confidentiality
and other obligations under this Agreement and the Confidentiality Agreement.
(d) In the event that there is a Closing under this Agreement and (i) the
Argentinian Acquired Company or the Chilean Acquired Company becomes a Retained
Company pursuant to the terms of this Agreement and/or (ii) any Acquired Company
becomes a Section 6.29 Retained Company or a ROFR Company, then promptly (but in
any event no later than five (5) Business Days) following the determination that
any such Acquired Company has become a Retained Company, a Section 6.29 Retained
Company or a ROFR Company, Purchaser shall, and shall cause its Representatives
to, (i) return to Sellers all Confidential Information relating to any such
Retained Company, Section 6.29 Retained Company or ROFR Company (and all copies,
reproductions or extracts of such Confidential Information) furnished to
Purchaser and Purchaser's Representatives by or on behalf of Sellers or any
Retained Company, Section 6.29 Retained Company or ROFR Company and (ii) destroy
all such Confidential Information prepared by Purchaser or Purchaser's
Representatives that contains, or reflects or is based upon,
in whole or in part, information furnished to Purchaser or Purchaser's
Representatives by or on behalf of Sellers or any Retained Company, Section 6.29
Retained Company or ROFR Company. Such destruction shall be certified in writing
to the Seller Representative by each of the chief executive officer of Purchaser
and an authorized officer of Purchaser supervising such destruction.
Notwithstanding the return or destruction of such Confidential Information,
Purchaser and Purchaser's Representatives will continue to be bound by the
obligations of confidentiality and other obligations under this Agreement and
the Confidentiality Agreement.
(e) For a two (2) year period commencing on the applicable Closing Date with
respect to each Acquired Company, each of the applicable Seller, Seller Parent
and the BellSouth Entities will, and will use best efforts to cause their
respective directors, officers, employees, agents and advisors to, maintain in
confidence and not use for any purpose any confidential information, whether
written or oral, which was obtained from or on behalf of such Acquired Company
regarding the financial position, mode of operation, suppliers, customers or the
Business as carried on by the Acquired Companies, nor any of the technical
information, trade secrets or know-how belonging to such Acquired Companies,
unless such information (i) is in the public domain, (ii) is published or
otherwise becomes part of the public domain through no fault of Sellers, Seller
Parent, the BellSouth Entities or any of their respective Affiliates or
Representatives, (iii) becomes available to Sellers, Seller Parent or the
BellSouth Entities or any of their respective Affiliates or Representatives on a
non-confidential basis from a source that did not acquire such information
(directly or indirectly) from Sellers, Seller Parent or the BellSouth Entities,
(iv) was originally provided by or independently developed by the Sellers,
Seller Parent or the BellSouth Entities or (v) is required to be disclosed by
judicial or administrative process or by other requirements of applicable Law or
any Governmental Authority.
6.9 RESIGNATION OF DIRECTORS. On each Closing Date, Sellers shall cause to
be delivered to Purchaser duly signed resignations in a form reasonably
acceptable to Purchaser, effective immediately after the applicable Closing, of
all directors (or equivalent decision-making Persons) of the Acquired Companies
that are the subject of the applicable Closing who are officers or employees of
any BellSouth Entity, but not employees of such Acquired Companies and shall
take such other action as is necessary to accomplish the foregoing. In
connection therewith, Sellers shall cause any such resigning directors to return
or transfer any director qualifying or similar shares in relation to any such
Acquired Company to the relevant Acquired Company or any other person designated
in writing by Purchaser.
6.10 NO FURTHER FINANCIAL OBLIGATIONS. Purchaser acknowledges that in the
course of conduct by the Acquired Companies of their respective businesses, the
BellSouth Entities have entered into, or, between the date of this Agreement and
the Final Closing Date, may enter into, various arrangements in which (a)
guarantees or similar obligations were issued by one or more of the BellSouth
Entities and/or (b) one or more of the BellSouth Entities is the primary
obligor(s) on other agreements, in any such case to support or facilitate
business transactions or programs of the Acquired Companies. The arrangements
referred to in the foregoing clauses (a) and (b) are hereinafter referred to as
the "BELLSOUTH GUARANTEES". The BellSouth Guarantees that are in existence as of
the date hereof (or that, as of the date hereof, are contemplated to be put in
place at a later date) are set forth on SCHEDULE 6.10. As of the applicable
Closing, Purchaser will either cause the BellSouth Guarantees relating to the
Acquired Company that is the subject of such Closing to be terminated so that
the BellSouth Entities will be released and discharged from
any further obligations or liabilities thereunder or, if Purchaser is unable to
obtain such releases, Purchaser will cause the Debt related to the BellSouth
Guarantees to be prepaid and such BellSouth Guarantees to be canceled.
6.11 BROKERS. For the avoidance of doubt, regardless of whether the Initial
Closing shall occur, (a) Sellers shall indemnify Purchaser and its Affiliates
against, and hold Purchaser and its Affiliates harmless from, any and all
liability for any brokers' or finders' fees or other commissions arising with
respect to brokers or finders retained or engaged by Sellers or any of their
Affiliates in respect of the transactions contemplated by this Agreement and (b)
Purchaser shall indemnify Sellers and their Affiliates against, and hold Sellers
and their Affiliates harmless from, any and all liability for any brokers' or
finders' fees or other commissions arising with respect to brokers or finders
retained or engaged by Purchaser or any of its Affiliates in respect of the
transactions contemplated by this Agreement.
6.12 PRESERVATION OF BOOKS AND RECORDS; ACCESS.
(a) For a period of seven years after the Final Closing Date or such other
period required by applicable Law, Purchaser shall preserve and retain, or cause
the Initial Acquired Companies and the Subsequent Acquired Companies, if any, to
preserve and retain, all corporate, accounting, legal, auditing, human resources
and other books and records of each applicable Acquired Company (including any
documents relating to any governmental or non-governmental claims, actions,
suits, proceedings or investigations) relating to the conduct of the business
and operations of the particular Initial Acquired Company or Subsequent Acquired
Company prior to the applicable Closing Date for such Acquired Company.
Notwithstanding the foregoing, during such seven-year period, Purchaser may
dispose of any such books and records which are offered to, but not accepted by,
the Seller Representative. If at any time after such seven-year period Purchaser
intends to dispose of any such books and records, Purchaser shall not do so
without first offering such books and records to the Seller Representative. The
provisions of this SECTION 6.12(a) shall cease to apply in the event of a sale
or disposition of any Acquired Company by Purchaser; PROVIDED, HOWEVER, that
Purchaser shall cause the subsequent owner(s) of such Acquired Company to assume
the obligations of Purchaser set forth in this SECTION 6.12.
(b) After the applicable Closing Date, subject to any confidentiality provision
of any Minority Equity Agreement that continues in existence following the
applicable Closing Date (PROVIDED, that Purchaser agrees to use commercially
reasonable efforts to obtain such waivers as Purchaser may deem necessary to
prevent any breach or violation of any confidentiality provisions contained in
any such Minority Equity Agreement as may be caused by the compliance by
Purchaser with this SECTION 6.12(b)), Purchaser shall cause each Initial
Acquired Company and Subsequent Acquired Company, if any, to permit Sellers and
their Representatives to have reasonable access to, and to inspect at Sellers'
expense, all books and records referred to in SECTION 6.12(a) in the event of
any litigation, arbitration or dispute or any threatened litigation, arbitration
or dispute, insurance matters, tax filings, accounting and financial reporting
of the Sellers and their Affiliates, and to meet with officers and employees of
Purchaser and any such Acquired Company as may reasonably be requested by
Sellers on a mutually convenient basis in order to obtain explanations with
respect to such books and records and to obtain additional information and to
call such officers and employees as witnesses.
(c) The parties agree and confirm that to the extent the books and records
described in this SECTION 6.12 relate to Seller Parent and do not fall under the
exceptions described in SECTION 6.8(a)(i), (ii) or (iii), such books and records
shall be deemed the Confidential Information of Seller Parent and shall be
within the Seller Parent Confidential Information covered by the Technical
Information Confidentiality Agreements.
6.13 EMPLOYEES; EMPLOYEE BENEFIT PLANS.
(a) Purchaser shall cause each of the Initial Acquired Companies and Subsequent
Acquired Companies, if any, to employ on the applicable Closing Date or continue
to employ on the applicable Closing Date all of the employees of such Acquired
Company (as applied to any such Acquired Company, "CONTINUING EMPLOYEES") on
terms and conditions of employment, including pay levels, job descriptions and
benefits, that are substantially similar in all material respects either (i) to
the terms and conditions of employment immediately prior to the Closing Date or
(ii) to the terms and conditions of employment that apply to similarly situated
employees of Purchaser. The foregoing covenant of Purchaser shall not restrict
or limit in any manner Purchaser's management of the business of the Initial
Acquired Companies or Subsequent Acquired Companies, if any, after the
applicable Closing nor require Purchaser to retain any Continuing Employee for
any period of time after the applicable Closing Date or to maintain any
particular pay levels, job descriptions or benefits or other terms and
conditions of employment for them; PROVIDED, HOWEVER, that Purchaser shall be
responsible for any and all notices, liabilities, costs, payments and expenses
arising from any action by Purchaser (including breach of contract, defamation
or retaliatory discharge) regarding any employee of an Initial Acquired Company
or Subsequent Acquired Company, if any, or any Continuing Employee, including
any such liability (i) under any applicable Law that relates to employees,
employee benefit matters or labor matters, (ii) for dismissal, wrongful
termination or constructive dismissal or termination, or severance pay or other
termination pay, or (iii) under or with respect to any benefit plan, program,
contract, policy, commitment or arrangement of the Acquired Companies, including
the Retention Plans maintained by the Acquired Companies (collectively,
"EMPLOYEE BENEFIT PLANS") or under and with respect to the Retention Plans
(other than those maintained by the Acquired Companies) to the extent such
Retention Plans provide payments or benefits with respect to any Continuing
Employee; PROVIDED, HOWEVER, that Purchaser shall not be responsible for any
costs, payments or expenses under or with respect to the Retention Plans to the
extent that such costs, payments and/or expenses exceed, in the aggregate,
Twenty Five Million Dollars ($25,000,000), subject to reductions, if any,
pursuant to the terms of the Retention Plans.
(b) Prior to the applicable Closing Date, Purchaser may notify Seller Parent
that Purchaser desires to make employment offers, effective as of the applicable
Closing Date, to certain identified employees of the BellSouth Entities who
provide services with respect to any Initial Acquired Company or Subsequent
Acquired Company, if any, and shall provide Seller Parent with a list of such
individuals. If Seller Parent consents thereto, which consent shall not be
unreasonably withheld, Purchaser shall be entitled to make such offers of
employment and Seller Parent shall, or shall cause its applicable Affiliates to,
provide Purchaser with reasonable access to such employees for purposes of
making the employment offers; PROVIDED, HOWEVER, that if any employee for whom
Purchaser desires to make an employment offer also provides services with
respect to any Acquired Company that is not the subject of the Initial Closing
or any Subsequent Closing, Sellers Parent's refusal to consent to such
employment offer shall not
be deemed unreasonable. Any person who accepts Purchaser's offer of employment
made pursuant to this subsection (b) shall be treated as a Continuing Employee
for purposes of this SECTION 6.13.
(c) Subject to SECTION 6.5(d), after the applicable Closing Date, Sellers shall
be responsible for all relocation costs arising as a result of returning to
their home country any expatriates or impatriates (other than those who are
Continuing Employees) who, immediately prior to the applicable Closing Date,
provide services to an Acquired Company that is the subject of a Closing Date,
including severance payments. The applicable Acquired Company agrees to honor,
perform and be liable for, and, to the extent necessary, assume, all
obligations, if any, with respect to retention bonuses under the Retention Plans
payable to or on behalf of those persons described in the preceding sentence,
including, for this purpose, those persons who are Continuing Employees.
(d) After the applicable Closing Date, Purchaser agrees that each Initial
Acquired Company or Subsequent Acquired Company, if any, or Purchaser shall
honor, pay, perform and be liable for and, to the extent applicable, shall
assume, (i) all obligations and liabilities under and with respect to all
Employee Benefit Plans, (ii) all benefits and payments to, or with respect to,
employees or former employees required under applicable Law, including the
workers' compensation and other obligations of such Acquired Company under labor
and employment Laws, (iii) all Tax equalization, reimbursements, retention and
similar charges and costs, and all other liabilities related to expatriates who,
at the direction of the BellSouth Entities, worked for or provided services to
such Acquired Companies (including all liabilities and obligations for retention
bonuses under the Retention Plans) and (iv) all liabilities and obligations
under and with respect to the employment agreements set forth on SCHEDULE
6.13(d). If Sellers pay any amounts described in clause (iii) of this SECTION
6.13(d), Purchaser shall, or shall cause the applicable Acquired Company for
which the expatriate provided services immediately prior to the applicable
Closing Date to, reimburse Sellers for such amounts.
(e) It is understood and agreed that all provisions contained in this Agreement
with respect to employee benefit plans or employee compensation are included for
the sole benefit of the respective parties hereto and do not and shall not
create any right in any other Person, including any participant in any Employee
Benefit Plan or any other employee benefit or compensation plan or any
beneficiary thereof or any employee or former employee of any Initial Acquired
Company or Subsequent Acquired Company, if any.
6.14 LITIGATION CONTROL AND COOPERATION. Purchaser agrees that with respect
to any litigation matters with respect to which Sellers and their Affiliates are
subject or liable, Sellers and their Affiliates shall continue to control the
prosecution, defense and/or settlement and all other administrative aspects
thereof following the applicable Closing Date with respect to which an Acquired
Company is involved in any such litigation matter, including the Venezuelan
Arbitration, the Peruvian Arbitration and the matter referred to in SECTION
10.2(a)(viii) (collectively the "LITIGATION MATTERS"), Purchaser will promptly
provide, and cause all applicable Acquired Companies to provide, all support and
cooperation reasonably requested by Sellers in connection with any claims,
counterclaims, defenses, settlements, compromises or other actions with regard
to such Litigation Matters and any related claims, suits, actions or proceedings
(PROVIDED that Sellers shall reimburse Purchaser for Purchaser's reasonable and
documented out-
of-pocket costs and expenses incurred in connection with providing such support
and cooperation), including (a) providing access to the books, records,
documents and information of the Acquired Companies and their respective
Affiliates, as provided in more detail in SECTION 6.12, (b) providing for full
access and availability of their officers, employees, representatives, agents
and other personnel, including instructing and causing them to comply with this
SECTION 6.14 and to be available to provide interviews, testimony, affidavits
and otherwise participate in such proceedings in compliance with this
SECTION 6.14, (c) entering into confidentiality, joint defense or similar
agreements with Sellers and/or their Affiliates and (d) entering into, executing
or acknowledging any compromises, settlements or other resolutions of the
Litigation Matters, so long as such resolutions do not require Purchaser or any
Affiliate to agree to, or impose on Purchaser or any Affiliate, any restrictions
on their business activities or pay damages or suffer other financial
consequences not fully indemnified by Sellers.
6.15 LIABILITY INSURANCE; DIRECTORS' AND OFFICERS' INSURANCE.
(a) During the five (5) year period following the applicable Closing Date,
Purchaser shall cause each Acquired Company to continue to maintain product
liability insurance, workers' compensation insurance, employer's liability
insurance and other liability insurance (on an occurrence basis) in amounts and
with coverage substantially similar to that maintained by such Acquired Company
or by any Affiliate of such Acquired Company on behalf of such Acquired Company
prior to the applicable Closing Date. Purchaser shall cause all policies for
such insurance to include a waiver by the insurer of any subrogation rights
against Sellers and their Affiliates.
(b) For a period of five (5) years from the applicable Closing Date, Purchaser
shall cause each Acquired Company: (i) to maintain run-off directors' and
officers' liability insurance policies for the past and current officers and
directors of such Acquired Company who are employees or attorneys (in their
capacity as agent) of any Seller or any Affiliate of any Seller or of any
Minority Equity Holder that sells its Minority Equity Interests to Purchaser
directly or indirectly in accordance with this Agreement on the applicable
Closing Date or who were employees of any Seller or any Affiliate of any Seller
at any time prior to the applicable Closing Date with terms and coverage amounts
at least as favorable as the terms and coverage amounts of the directors' and
officers' insurance, if, and only to the extent that, any such policy exists on
the date of this Agreement, applicable to such past and current officers and
directors as of the date hereof; PROVIDED, HOWEVER, that Purchaser or any
Acquired Company shall not be required to pay an annual premium in excess of the
last annual premium paid by the Sellers or such Acquired Company prior to the
date hereof and, if Purchaser or such Acquired Company is unable to obtain the
insurance required by this SECTION 6.15, it shall obtain as much comparable
insurance as possible for the annual premium equal to such maximum amount and
(ii) not to amend any Acquired Company Organizational Documents relating to such
Acquired Company in any way to reduce or eliminate the level of indemnification
provided by such Acquired Company to such past and current officers and
directors of such Acquired Company.
6.16 SUPPORT SERVICES. Purchaser acknowledges that Sellers shall have no
obligation to provide any support or other services to any Initial Acquired
Company or Subsequent Acquired Company as of the applicable Closing with respect
to such Initial Acquired Company or Subsequent Acquired Company, other than
transition services, subject to such related terms,
conditions, fees, reimbursements and other provisions as Purchaser and Sellers
will discuss and negotiate in a good faith and reasonable manner, taking
appropriate consideration of the practices and requirements of the Business, and
which will be reflected in a transition services agreement, reasonably
satisfactory in form and substance, to Purchaser and Sellers, and finally agreed
by them by the Due Diligence Expiration Date, at which time, such transition
services agreement (the "TRANSITION SERVICES AGREEMENT") will be deemed to be
part of this Agreement and will be entered into by the parties at such
applicable Closing. Without limiting the generality of the foregoing, Purchaser
acknowledges that the Transition Services Agreement shall provide that (a) for
any period during which a person provides services pursuant to the Transition
Services Agreement, Purchaser shall reimburse Sellers or their Affiliates for
all costs incurred by Sellers or their Affiliates with respect to the continuing
employment of such person, including, but not limited to, benefit costs and
contributions, fringe rates, wages, bonuses, vacation pay, employment taxes, and
if any person who provides services pursuant to the Transition Services
Agreement is covered by a Retention Plan, Purchaser shall be obligated for
reimbursing Sellers and their Affiliates under the Transition Services Agreement
for all costs and expenses incurred by Sellers or their Affiliates under the
Retention Plan and (b) Sellers and their Affiliates shall be indemnified and
held harmless from any and all Losses arising out of or related to the services
provided pursuant to the Transition Services Agreement or the continued
employment of persons providing services thereunder, including any services
provided by expatriates. Notwithstanding anything to the contrary in this
SECTION 6.16, Sellers shall use commercially reasonable efforts to retain the
employees that are to provide the services under the Transition Services
Agreement; PROVIDED, HOWEVER, that if Sellers are not able to retain one or more
employees necessary to provide any service under the Transition Services
Agreement, then Sellers shall not be responsible for providing such service or
services as provided in the Transition Services Agreement. In addition, the
Transition Services Agreement shall grant licenses to Seller Parent for software
or technology that is owned by an Acquired Company and which Seller Parent
identifies within twenty (20) days of the date hereof as being useful for the
Seller Parent or any Subsidiary or Affiliate after the applicable Closing Date;
PROVIDED, HOWEVER, that no Acquired Company, Subsidiary of an Acquired Company
nor Purchaser or any of its Affiliates shall be responsible for payment of any
penalties resulting from early termination of such agreements.
6.17 SELLER PARENT MARKS. Purchaser agrees that it shall cause each of the
Initial Acquired Companies and, if any, Subsequent Acquired Companies to enter
into the Transition Trademark License Agreement at the applicable Closing for
such Acquired Company. Pursuant to the Transition Trademark License Agreement,
Purchaser shall cause each of the applicable Acquired Companies to: (a) as soon
as practicable after the applicable Closing Date, but in no event later than one
hundred and eighty (180) days following the applicable Closing Date, cease to
make any use of the Seller Parent Marks, (b) immediately after the applicable
Closing Date, cease to hold itself out as having any affiliation with any Seller
or Affiliates of Sellers, and (c) as soon as practicable after the applicable
Closing Date, but in no event later than ninety (90) days following the
applicable Closing Date, in the case of any entity whose corporate name includes
any of the Seller Parent Marks, change its corporate name to a corporate name
that does not include any of the Seller Parent Marks and make any necessary
legal filings with the appropriate Governmental Authority, as the case may be,
to effect such change. In furtherance of the foregoing, as promptly as
practicable after each Closing Date, but in no event later than the applicable
time limits set forth in the applicable Transition Trademark License Agreement,
Purchaser shall cause the Acquired Companies that are the subject of such
Closing to remove,
strike over, permanently cover or otherwise obliterate all Seller Parent Marks
from all materials owned by such Acquired Company, including, vehicles, business
cards, schedules, stationery, packaging materials, displays, signs, promotional
materials, manuals, forms, computer software and other materials. For all
removed materials which bear a Seller Parent Xxxx, Purchaser shall cause the
Acquired Company owning such materials to either promptly return to Seller
Parent or destroy such materials in accordance with written instructions from
Seller Parent, which instructions shall be requested by the Acquired Company on
a case-by-case basis covering specific types of material bearing Seller Parent
Marks. The Initial Acquired Companies and the Subsequent Acquired Companies, if
any, shall be solely responsible for any costs incurred in connection with
compliance with this SECTION 6.17.
6.18 SELLER PARENT TECHNICAL INFORMATION. Purchaser, Seller Parent and the
Initial Acquired Companies and any Subsequent Acquired Companies will enter into
a technical information confidentiality agreement, including such related terms,
conditions, fees, reimbursements and other provisions as Purchaser and Sellers
will discuss and negotiate in a good faith and reasonable manner, taking
appropriate consideration of the practices and requirements of the Business, and
which will be reflected in a technical information confidentiality agreement,
reasonably satisfactory in form and substance, to Purchaser and Sellers, and
finally agreed by them by the Due Diligence Expiration Date, at which time, such
agreement (the "TECHNICAL INFORMATION CONFIDENTIALITY AGREEMENT") will be deemed
to be part of this Agreement and will be entered into by the applicable parties
at the Initial Closing. Pursuant to the Technical Information Confidentiality
Agreement, Purchaser agrees that it shall cause each of Initial Acquired Company
and Subsequent Acquired Company, if any, to: (a) as soon as practicable after
the applicable Closing Date, cease to make any use of the Seller Parent
Technical Information; (b) while taking steps to achieve cessation of use of the
Seller Parent Technical Information, ensure any continuing use is limited to
internal use on a strictly "need to know" basis within the Acquired Companies;
(c) immediately after the applicable Closing Date, cease to make any further
disclosures of the Seller Parent Technical Information to third parties or
employees not already in possession of such information except on an as-needed
basis and in conformity with the provisions of SECTION 6.8; and (d) as soon as
practicable after the applicable Closing Date with respect to any Initial
Acquired Company or Subsequent Acquired Company, but in no event later than
thirty (30) days following the applicable Closing Date, return to Sellers all
tangible materials that embody or record the Seller Parent Technical Information
in accordance with the return procedures set forth in the Technical Information
Confidentiality Agreement and destroy any electronic records of the Seller
Parent Technical Information. In furtherance of the foregoing, as promptly as
practicable after the applicable Closing Date Purchaser shall give notice to all
employees of the Initial Acquired Companies and, if any, the Subsequent Acquired
Companies, of the need to cease all further use and disclosure of the Seller
Parent Technical Information and of the new arrangements that Purchaser has
established or is establishing to provide the employees with equivalent
information from Purchaser. Such notice to employees shall at least entail
meetings with employees of an Initial Acquired Company or a Subsequent Acquired
Company, if any, upon the announcement of the applicable Closing and at the
completion of the steps to achieve that Acquired Company's compliance with this
SECTION 6.18, which meetings shall inform the employees of their confidentiality
commitments and train them on the replacement information from Purchaser.
Employees shall also be sent written communications explaining that the Seller
Parent Technical Information may no longer be used and may not be disclosed to
any third parties. Purchaser shall provide to Sellers a certificate of a
senior officer of Purchaser within thirty (30) days following the applicable
Closing Date confirming that Purchaser and each of the applicable Acquired
Companies have complied with their obligations under this SECTION 6.18.
6.19 PROCUREMENT. Purchaser agrees that it shall cause each of the Initial
Acquired Companies and, if any, the Subsequent Acquired Companies immediately
following the applicable Closing Date to cease to purchase any further goods or
services under purchasing arrangements or contracts made available to such
Acquired Companies by Sellers or any of their Affiliates or Cingular Wireless
LLC or its Affiliates and promptly to make or satisfy all payments,
reimbursements and other obligations and amounts owed to Sellers and their
Affiliates in relation to such purchasing arrangements or contracts; PROVIDED,
HOWEVER, Purchaser shall not be responsible for any payment or other penalty
that would be payable as a result of the early termination of such purchasing
arrangements or contracts other than with respect to any such payment or other
penalties that may be assessed by any third party in connection with such early
termination. Purchaser and the Acquired Companies shall be solely responsible
for obtaining at their expense any required transfers of or replacements for
license, lease, support and maintenance agreements relating to computer hardware
or software from third party vendors, which prior to the applicable Closing were
used, made available to or acquired via the Seller Parent, Sellers or
multi-company purchasing arrangements involving countries outside the Territory
or companies other than the Acquired Companies. Seller Parent shall use
reasonable efforts to cooperate with Purchaser and the Acquired Companies in
this regard, for up to one hundred and eighty (180) days following the
applicable Closing Date.
6.20 REMOVAL OF BUSINESS CUSTOMER RECORDS. As soon as practicable after each
Closing but in any event no later than sixty (60) days after such Closing,
Seller Parent shall use commercially reasonable efforts to remove from its
records all Business Customer Records that relate to customers located in the
country to which such Closing relates.
6.21 TERMINATION OF THE INTERCOMPANY AGREEMENTS. Seller Parent shall ensure
that on each Closing Date a Services Termination Letter and Trademark License
Termination Letter is executed by all necessary parties to immediately terminate
all Technical Services Agreements and Seller Parent Xxxx License Agreements that
apply to the country that is the subject of the applicable Closing. Any
Technical Services Subcontract related to the Technical Services Agreements
being terminated shall be assigned to Purchaser or its designee as of the date
of the applicable Services Termination Letter, but only to the extent to which
Seller Parent has the right to so assign. In either event, Sellers and Purchaser
will direct, instruct and cause each Acquired Company that terminates or assigns
the Technical Services Agreements and Seller Parent Xxxx License Agreements to
pay or satisfy all payments, reimbursements and other obligations and amounts
owed to Sellers and its Affiliates in relation to such Agreements.
6.22 MOVICS SOFTWARE LICENSES. To the extent that BellSouth International,
Inc. or any other Affiliate of Seller Parent has granted any sublicenses of the
MOVICS software to an Acquired Company, then as of the applicable Closing Date
with respect to such Acquired Company (a) if CRM is the subject of such Closing
or any previous Closing, CRM shall assume all such sublicenses with such
Acquired Company, which thereafter shall be direct agreements between CRM and
such Acquired Company, and (b) if CRM is not the subject of such Closing or
any previous Closing, BellSouth International, Inc. or the applicable Affiliate
of Seller Parent shall continue to grant the MOVICS sublicense to such Acquired
Company.
6.23 TRANSITION TRADEMARK LICENSE AGREEMENT. Purchaser and Seller Parent
will enter into the Transition Trademark License Agreement in order to permit
the Acquired Companies that are the subject of any Closing to wind down their
usage of the Seller Parent Marks in conformance with Purchaser's covenants in
SECTION 6.17 above. Each of Purchaser and Seller shall also ensure that on the
applicable Closing Date a BIPHO Transition License Agreement (or equivalent
alternative agreement) is executed to grant sufficient rights to permit the
applicable Acquired Companies to wind-down their usage of the "XXXX" xxxx in
conformance with Purchaser's covenants in SECTION 6.17 above. Notwithstanding
anything to the contrary in this Agreement or in the Transition Trademark
License Agreement, no Initial Acquired Company or any Subsequent Acquired
Company shall be permitted to use (and Purchaser shall not permit any such
Acquired Company to use), following the applicable Closing relating to such
Acquired Company, the Seller Parent Marks in connection with any regulatory,
lobbying or public policy matter.
6.24 ASSIGNMENT OF CERTAIN TRADEMARK RIGHTS. Within twenty (20) days of the
date hereof, Seller Parent shall identify the Latin America Marks, which shall
include all of the registrations and applications set forth in SCHEDULE 6.24. As
of each Closing Date, Seller Parent shall assign and transfer to Purchaser or
its designee all of Seller Parent's right, title and interest in all Latin
America Marks that are used exclusively by any or all of the Acquired Companies
that are the subject of such Closing or any earlier Closing. Seller Parent, the
applicable Acquired Companies and Purchaser shall then cooperate to achieve as
soon as practicable after the applicable Closing: (a) the recordation of the
assignment of the Latin America Marks and the registrations and applications
pertaining thereto with all applicable Governmental Authorities or any other
required filing with applicable Governmental Authorities, and (b) to the extent
necessary, sign such other documentation or papers as is necessary to confirm
the ownership rights of Purchaser or its designee to the Latin America Marks.
6.25 ASSIGNMENT BACK OF SELLER PARENT INTELLECTUAL PROPERTY RIGHTS. The
parties recognize that certain Seller Parent Intellectual Property Rights may be
the subject of applications to register or may be registered in the name of an
Acquired Company, for example through administrative error or in breach of one
or more of the agreements with Seller Parent, BellSouth Intellectual Property
Corporation, BellSouth IP Management Corporation or Xxxx IP Holding LLC. Within
twenty (20) days of the date hereof, Seller Parent shall identify such
Intellectual Property Rights applications or registrations and provide a list of
the same to Purchaser. Seller Parent, the applicable Acquired Companies and
Purchaser shall then cooperate to achieve as soon as practicable either prior to
or after each applicable Closing: (a) a transfer of such registrations and
applications to Seller Parent, together with all files and records pertaining to
such registrations and applications, (b) the recordation of all such transfers
with applicable Governmental Authorities or any other required filing with
applicable Governmental Authorities, and (c) to the extent necessary, sign such
other documentation or papers as is necessary to confirm the ownership rights of
Seller Parent to such Intellectual Property Rights.
6.26 NON-COMPETE.
(a) Seller Parent and each Seller agree, on behalf of itself and its
Subsidiaries, that, for a period of two (2) years commencing on the date of the
applicable Closing, none of Seller Parent or any of the Sellers shall, and shall
not permit any of their respective Subsidiaries to, directly or indirectly, own,
operate or manage, in any country in which an Initial Acquired Company or a
Subsequent Acquired Company primarily operates as of the applicable Closing
Date, any wireless telecommunication services business of the type conducted by
the Initial Acquired Company or Subsequent Acquired Company in that country as
of the date of this Agreement (such wireless service business, in such
countries, is referred to as the "WIRELESS SERVICE BUSINESS"). Seller Parent and
each Seller further agree, on behalf of themselves and their respective
Subsidiaries, that, for a period of two (2) years commencing on the applicable
Closing Date, none of Seller Parent or any of the Sellers shall, and shall not
permit any of their respective Subsidiaries to, directly or indirectly, allow
the "BellSouth" name to be used in or by any other present or future business
enterprise in the Wireless Service Business in any country in which Initial
Acquired Company or Subsequent Acquired Company primarily operates as of the
applicable Closing Date. For the avoidance of doubt, Purchaser agrees that the
provisions of this SECTION 6.26 shall not apply (i) to the Cingular Entities in
any manner whatsoever and (ii) to any Non-Transferred Company.
(b) Notwithstanding the provisions of SECTION 6.26(a), nothing in this Agreement
shall preclude:
(i) the direct or indirect ownership, operation or management of any
Wireless Service Business in any jurisdiction other than those
jurisdictions in which an Initial Acquired Company or a Subsequent
Acquired Company operates as of the Initial Closing Date or the
applicable Subsequent Closing Date, respectively;
(ii) the selling of telecommunications equipment under or in connection
with the Seller Parent Marks;
(iii) the ownership by Seller Parent, Sellers or any of their
respective Subsidiaries or Affiliates of no more than ten percent (10%)
of any class of voting equity securities or other equity interests of
any Person engaged in the Wireless Service Business whose securities or
equity interests are publicly traded, PROVIDED that none of Seller
Parent, Sellers or their respective Subsidiaries or Affiliates has
representation on the board of directors of such Person or otherwise
has the right to participate in management of such entity;
(iv) the provision by Seller Parent, Sellers or any of their respective
Subsidiaries or Affiliates of international long distance services or
data network communications services in any jurisdiction in which the
Wireless Service Business is conducted;
(v) Seller Parent, Sellers or any of their respective Subsidiaries or
Affiliates thereof from (A) continuing to own, operate and engage in
the business of any Retained Company or any Section 6.29 Retained
Company and engaging in any activities
consistent in scope with the activities of operating such Retained
Company or such Section 6.29 Retained Company, or (B) performing its
obligations as set forth under certain of the Related Agreements;
(vi) purchases of securities or other equity interests for investment
purposes by Seller Parent, Sellers or any of their respective
Subsidiaries or Affiliates that is acting as a trustee or fiduciary for
the benefit of accounts managed thereby or any other Person that is
acting as a trustee or fiduciary for the benefit of accounts of
employees of Seller Parent, Sellers or any of their respective
Subsidiaries or Affiliates;
(vii) the acquisition by Seller Parent, Sellers or any of their
respective Subsidiaries or Affiliates of any or their investment in
Person (whether through the purchase of stock or assets or by way of
merger, consolidation, business combination or other transaction)
engaged in the Wireless Service Business so long as no more than
twenty-five percent (25%) of the revenues of the combined business is
engaged in the Wireless Service Business; or
(viii) the acquisition of Seller Parent or one or more Sellers by any
non-Affiliate thereof that is engaged in the Wireless Service Business;
PROVIDED that, the acquisition of Seller Parent or one or more Sellers
shall not terminate the obligations of Seller Parent, Sellers and their
respective Subsidiaries set forth in SECTION 6.26(a), except that such
obligation shall be limited to the Subsidiaries of Seller Parent or any
Seller who are Subsidiaries of Seller Parent or any Seller immediately
prior to such acquisition.
6.27 THIRD PARTY MARKETING AND SUPPLY AGREEMENTS. Prior to the applicable
Closing Date, each Seller shall cause each Acquired Company that is the subject
of any Closing to terminate all marketing, supply and other similar agreements
between such Acquired Company and any third parties that are dependent on rights
to use Seller Parent Marks.
6.28 CONTACTS WITH EMPLOYEES, CUSTOMERS AND CERTAIN PERSONS.
(a) From the date of this Agreement until the applicable Closing Date, without
the prior written consent of Sellers, Purchaser shall not, and shall not permit
any of its Representatives or any other Person on its behalf to, directly or
indirectly, contact, solicit, communicate with (whether orally, in writing or in
any other manner) or otherwise engage in any discussions or communications with,
or attempt to contact, solicit, communicate or otherwise engage in any
discussions or communications with, any employees, customers, creditors,
lenders, noteholders, agents or participants in the distribution channel
(including distributors and resellers) of, any Acquired Company in connection
with or pertaining to any subject matter of this Agreement, including future
employment, consulting, creditor, lender, agency or distribution relationships
or the terms thereof, post-closing staffing issues, post-closing benefits
matters, compensation and bonus matters, severance issues or any other matters;
PROVIDED, HOWEVER, that Purchaser shall be entitled to conduct due diligence in
conformity with this Agreement and conduct its business consistent with past
practices.
(b) From the date of this Agreement until the applicable Closing or, in the
event of a termination of this Agreement for any reason, for the two-year period
commencing on the date of
such termination, neither Purchaser nor any of its Affiliates shall, either
directly or indirectly, solicit for employment, or attempt to solicit for
employment, or otherwise hire (other than pursuant to a general advertisement or
other similar general solicitation within the Territory or the United States),
without the prior written consent of Seller Representative, any Person who is
(i) an officer, director, senior manager or salesperson of any Acquired Company
or any BellSouth Entity or (ii) any other employee, consultant, agent or
participant in the distribution channel (including any distributor or reseller)
of any Acquired Company or any BellSouth Entity with whom Purchaser or any of
its representatives met, were introduced to or otherwise became familiar with in
connection with Purchaser's due diligence investigation of the Acquired
Companies or otherwise in connection with the transactions contemplated by this
Agreement. In the event of a breach or threatened breach of the provisions of
this SECTION 6.28(b) by Purchaser or any of its Affiliates, Sellers shall be
entitled to an injunction restraining such Person from any such breach. Nothing
herein shall be construed as prohibiting Sellers from pursuing any other
available remedy for such breach or threatened breach, including the recovery of
damages.
(c) In the event that there is a Closing under this Agreement and (i) the
Argentinian Acquired Company or the Chilean Acquired Company becomes a Retained
Company pursuant to the terms of this Agreement and/or (ii) any Acquired Company
becomes a Section 6.29 Retained Company, for the two-year period commencing on
date of the determination that any such Acquired Company has become a Retained
Company or a Section 6.29 Retained Company, neither Purchaser nor any of its
Affiliates shall, either directly or indirectly, solicit for employment, or
attempt to solicit for employment, or otherwise hire (other than pursuant to a
general advertisement or other similar general solicitation within the countries
where such Retained Company or Section 6.29 Retained Company operates or
conducts its business), without the prior written consent of Seller
Representative, any Person who is (i) an officer, director, senior manager or
salesperson of such Retained Company or Section 6.29 Retained Company or (ii)
any other employee, consultant, agent or participant in the distribution channel
(including any distributor or reseller) of such Retained Company or Section 6.29
Retained Company with whom Purchaser or any of its representatives met, were
introduced to or otherwise became familiar with in connection with Purchaser's
due diligence investigation of the Acquired Companies or otherwise in connection
with the transactions contemplated by this Agreement. In the event of a breach
or threatened breach of the provisions of this SECTION 6.28(c) by Purchaser or
any of its Affiliates, Sellers shall be entitled to an injunction restraining
such Person from any such breach. Nothing herein shall be construed as
prohibiting Sellers from pursuing any other available remedy for such breach or
threatened breach, including the recovery of damages.
6.29 ALTERNATIVE STRUCTURE.
(a) The parties agree that in the event issues arise that could reasonably be
expected to prevent the parties from obtaining the Required Minority Equity
Holder Approvals or the Required Regulatory Approvals with respect to any
Acquired Company prior to the Non-Transferred Company Determination Date with
respect to such Acquired Company (an "ALTERNATIVE STRUCTURE EVENT"), Purchaser
and Sellers, subject, in the case of Sellers, to the Minority Equity Holder
Rights, and in all cases, to the avoidance of Initial Closing Legal Prohibitions
or Subsequent Closing Legal Prohibitions, as applicable, shall continue to use
best efforts, and proceed expeditiously and in good faith, to consummate the
purchase, sale and other
transactions contemplated hereunder with respect to each Acquired Company.
Without limiting the generality of the foregoing, in the event of an Alternative
Structure Event, the parties shall use best efforts, and proceed expeditiously
and in good faith, to restructure the form of the transactions contemplated
hereby in order to proceed with the substance of the transactions contemplated
by this Agreement pursuant to such alternative structures and transactions which
would have a materially improved chance of completion and which may be
accomplished in a manner that preserves the allocation of benefits,
opportunities, costs, responsibilities, liabilities and net economic benefit of
the transactions contemplated hereby to Purchaser and Sellers (taking into
account the effect of Taxes) and for consideration equal to the consideration
allocated to the transactions pursuant to SECTION 2.2 of the Agreement.
(b) In furtherance of the foregoing, an Acquired Company shall be deemed to be a
"SECTION 6.29 RETAINED COMPANY" upon the earliest to occur of (the "SECTION 6.29
RETAINED COMPANY DETERMINATION DATE") (i) the date upon which Sellers provide
written notice to Purchaser that Sellers have determined in good faith that,
despite the parties' compliance with all of the covenants and obligations
contained in this Agreement to be performed and complied with by it prior to the
Initial Closing or any Subsequent Closing, as applicable, related to such
Acquired Company, (A) one or both of the conditions to closing set forth in
SECTION 7.1(b) and (c) (in the case of the Initial Closing) or SECTION
7.4(a)(ii) and (iii) (in the case of a Subsequent Closing) with respect to such
Acquired Company are not reasonably likely to be satisfied as of the
Non-Transferred Company Determination Date and (B) the parties are unable to
agree upon alternative structures and transactions as contemplated in the last
sentence of SECTION 6.29(a), (ii) the date upon which Sellers and Purchaser
mutually agree that, despite each party's compliance with all of the covenants
and obligations contained in this Agreement to be performed and complied with by
it prior to the Initial Closing or any Subsequent Closing, as applicable,
related to such Acquired Company, (A) one or both of the conditions to closing
set forth in SECTION 7.1(b) and (c) (in the case of the Initial Closing) or
SECTION 7.4(a)(ii) and (iii) (in the case of a Subsequent Closing) with respect
to such Acquired Company are not reasonably likely to be satisfied as of the
Non-Transferred Company Determination Date and (B) the parties are unable to
agree upon alternative structures and transactions as contemplated in the last
sentence of SECTION 6.29(a) and (iii) the Non-Transferred Company Determination
Date, if the Initial Closing or Subsequent Closing, as the case may be, does not
occur with respect to such Acquired Company because, despite each party's
compliance with all of the covenants and obligations contained in this Agreement
to be performed and complied with by it prior to the Initial Closing or any
Subsequent Closing, as applicable, related to such Acquired Company, as of such
date, (A) one or both of the conditions to Closing set forth in SECTIONS 7.1(b)
and (c), with respect to an Initial Closing, or SECTION 7.4(a)(ii) and (iii),
with respect to any Subsequent Closing, were not satisfied and (B) the parties
were unable to agree upon alternative structures and transactions as
contemplated in the last sentence of SECTION 6.29(a).
(c) In the event that any Acquired Company becomes a Section 6.29 Retained
Company, (i) the parties shall nevertheless be obligated to consummate the
Initial Closing and any Subsequent Closing and the other transactions
contemplated by this Agreement except with respect to any such Section 6.29
Retained Company (or any Retained Company or ROFR Company), (ii) the applicable
Seller will retain and continue to hold and own its Seller Equity Interests or
Holding Company Equity Interests relating to, and any Sellers Stockholder Debt
with regard to, any such Section 6.29 Retained Company, (iii) the Sellers Equity
Interests of any such
Section 6.29 Retained Company shall be deemed to be excluded from the definition
of "Sellers Equity Interests" and "Holding Company Equity Interests" for all
purposes of this Agreement and (iv) no representations or warranties shall be
deemed to have been made by Sellers with respect to any such Section 6.29
Retained Company. For the avoidance of doubt, from and after the Section 6.29
Determination Date with respect to any Section 6.29 Acquired Company,
SECTIONS 6.5 and 6.6 and ARTICLE III, as well as any other provisions that would
otherwise reasonably be interpreted to treat such Section 6.29 Retained Company
as an Acquired Company whose Sellers Equity Interests are being transferred
directly or indirectly pursuant to the transactions contemplated by this
Agreement, will no longer be applicable to such Section 6.29 Retained Company,
PROVIDED, that SECTIONS 6.8 and 6.28 as well as the Confidentiality Agreement,
will continue to be applicable to all Section 6.29 Retained Companies.
6.30 COMPLIANCE WITH LAWS. Notwithstanding anything to the contrary
contained in this Agreement, Purchaser agrees that, in seeking to comply with
this Agreement, including obtaining the Required Regulatory Approvals and
Required Minority Equity Holder Approvals, Purchaser and its Representatives
shall comply with all applicable Laws and shall not in any manner, directly or
indirectly, induce, solicit, encourage (or permit the encouragement of),
instruct or in any manner direct any director, officer, employee, consultant or
advisor of the Acquired Companies to take or omit to take any actions that could
violate applicable Law or the policies of any Acquired Company.
6.31 INTERMEDIATE HOLDING COMPANIES. Prior to the applicable Closing Date
with respect to a particular Operating Company, one or more of the Sellers
intend to use their best efforts to eliminate as many Intermediate Holding
Companies organized in the British Virgin Islands, Cayman Islands and Panama.
Notwithstanding the foregoing, (a) Sellers shall only be obligated to eliminate
Xxxx Holdings if a Dutch Residency Certificate for Xxxx Holdings can be obtained
prior to such applicable Closing Date and (b) Sellers shall not be obligated to
eliminate the Intermediate Holding Companies listed in SCHEDULE 6.31. In
determining whether they have used their best efforts, Sellers will take into
account any proposals set forth by Purchaser.
6.32 CHILEAN COMPANY TRANSFERS. Prior to the Closing Date, Sellers may, in
their sole discretion, enter into a transaction or series of transactions to
effect the contribution of BellSouth Comunicaciones, S.A., a Chilean sociedad
anonima, and/or BellSouth Inversiones, S.A., a Chilean sociedad anonima, to a
Netherlands BV; PROVIDED, that Sellers shall not enter into such transactions
unless (a) on the applicable Closing Date there are no Acquired Companies in the
ownership chain that are not organized in The Netherlands or Chile and
(b) Sellers first obtain an opinion of Chilean tax counsel reasonably
satisfactory to Purchaser that concludes that (i) Sellers will have a reasonable
basis for reporting that such transactions do not result in the recognition of
gain for Chilean tax purposes and (ii) any such Netherlands BV (or such other
Holding Company or Intermediate Holding Company then holding such shares) should
have a basis in the shares of BellSouth Comunicaciones, S.A. and BellSouth
Inversiones, S.A. for Chilean tax purposes at least equal to the Allocated
Purchase Price for such Acquired Companies.
6.33 POST-CLOSING ACTIVITIES.
(a) Prior to January 1 of the year following the applicable Closing Date with
respect to a particular Operating Company and related Intermediate Holding
Companies, Purchaser and
its Affiliates (including, for purposes of this SECTION 6.33(a), the Acquired
Companies) shall not engage in any transaction with or involving any Acquired
Company or take any action outside the ordinary course of business with or
involving any Acquired Company unless (i) Sellers have received from Purchaser
an opinion of counsel mutually agreed to by the parties that such transaction
would not result in an increase in the earnings and profits (as defined in Code
Section 964) of any of the Acquired Companies (or their successors),
(ii) Sellers otherwise consent in writing or (iii) Purchaser takes all steps
that are necessary to completely eliminate all current or accumulated earnings
and profits (as defined in Code Section 964) of the Acquired Company that takes
such action or engages in such transaction.
(b) Prior to January 1 of the year following the applicable Closing Date with
respect to a particular Operating Company and related Intermediate Holding
Companies, Purchaser and its Affiliates (including, for purposes of this SECTION
6.33(b), the Acquired Companies) shall not engage in any transaction outside the
ordinary course of business consistent with past practices while owned by
Sellers which would result in any of the Acquired Companies (or a successor to
such company) recognizing income that would be treated as Subpart F Income or
engage in any transaction (even if in the ordinary course of business) that
would result in an Acquired Company that is not an Operating Company recognizing
any income that would be Subpart F Income (other than the investment of existing
cash reserves and cash from operations); PROVIDED, that Purchaser shall not be
deemed in breach of this requirement if prior to entering a transaction it
obtained (i) an opinion of counsel mutually agreed to by the parties that such
transaction will not result in the recognition of Subpart F Income, (ii) the
prior written consent of Sellers or (iii) Purchaser takes such steps as are
necessary to completely eliminate any Subpart F Income to the Seller with
respect to transactions occurring after the Closing Date.
(c) Purchaser has no present plan or intention to (i) liquidate, dissolve or
merge any Netherlands BV it directly or indirectly acquires from Sellers, (ii)
transfer ownership of any of the Acquired Companies; or (iii) cause any
Netherlands BV to distribute or otherwise disavow itself of ownership of any of
the Operating Companies directly or indirectly owned by it on the Closing Date.
Purchaser further agrees that it will not take any of the actions set forth in
clauses (i), (ii) or (iii) of the previous sentence prior to January 1 of the
second year following the applicable Closing Date with respect to a particular
Operating Company unless (i) such action was not reasonably foreseeable at the
Closing Date with respect to a particular Operating Company or (ii) there is a
significant intervening event that was not foreseen on such Closing Date.
(d) Purchaser presently intends to and will, unless some event occurs that is
not reasonably foreseeable as of the Closing Date, cause each Netherlands BV and
each Operating Company to continue to hold directly, or to the extent held
indirectly as of the Closing Date, indirectly, a significant portion of the
assets held by it on the applicable Closing Date (without taking into account
distributions made pursuant to SECTION 6.35).
(e) Purchaser will not make an election under Code Section 338 with respect to
any of the Acquired Companies.
(f) Purchasers shall file or cause to be filed all Tax Returns due after the
Closing Date for the Acquired Companies and shall pay all Taxes shown as due and
owing on such Tax
Returns except to the extent that such Taxes would be indemnified by Sellers
pursuant to Section 10.2(a)(v) or (vi). Any Tax Return required to be prepared
by Purchasers or one of the Acquired Companies but for which Sellers may be
responsible for the payment of any Taxes thereon shall be provided to Sellers at
least thirty (30) days prior to filing and shall be subject to the reasonable
comments of Sellers.
(g) Any Tax Return prepared by Purchaser which includes or is based on the
operations, ownership, assets or activities of any Acquired Company for any
period for which Seller is required to indemnify Purchaser pursuant to this
agreement shall be prepared in accordance with past Tax accounting and other
practices used by the Acquired Companies, Sellers or Seller Parent with respect
to the Tax Returns in question (unless such past practices are no longer
permissible under applicable Tax law), and to the extent any items are not
covered by past practices (or in the event such past practices are no longer
permissible under applicable Tax law), in accordance with reasonable practices
selected by Purchaser with the consent of Seller, such consent not to be
unreasonably withheld or delayed.
6.34 DISTRIBUTION OF TELECOM BBS (B.V.I.) LTD. Sellers shall use reasonable
best efforts to cause the distribution of Telecom BBS (B.V.I.), Ltd. to
BellSouth International Latin America, Inc. prior to the applicable Closing
Date or, if such distribution is not made prior to such Closing Date with
respect to the Acquired Companies relating to Venezuela, shall indemnify the
Purchaser for all liabilities of Telecom BBS (B.V.I.), Ltd.
6.35 POST-SALE DISTRIBUTIONS. Purchaser shall distribute, or cause to be
distributed, all cash which is held directly by each Netherlands BV that
directly or indirectly owns Telcel S.A. or BellSouth Panama S.A. at the
applicable Closing Date prior to the next January 1 after the applicable Closing
Date. Purchaser shall use commercially reasonable efforts to distribute or cause
to be distributed a note or other asset in an amount equal to all of the current
and accumulated earnings and profits (as defined in Code Section 964) of such
Netherlands BVs that exist following such cash distribution prior to January 1
of the year after the Closing Date with respect to each such Netherlands BV. If
Purchaser believes that, notwithstanding its commercially reasonable efforts, it
cannot make the required distributions of current and accumulated earnings and
profits, it shall promptly notify Sellers in writing. In determining whether it
has used commercially reasonable efforts, Purchaser will (a) disregard the
effect of any withholding taxes or amounts paid from The Netherlands to Spain,
(b) disregard any Spanish tax on interest income on the notes or Spanish tax on
the actual or deemed distribution from The Netherlands to Spain and (c) take
into account any proposals set forth by Sellers. Purchaser agrees that, absent a
significant change in circumstances that was not foreseen on the date of
Closing, it will not recontribute any amount distributed pursuant to this
section for three (3) years following the distribution.
6.36 PERU. (a) Without limiting the generality of the foregoing provisions
of this Agreement, and notwithstanding anything to the contrary in this
Agreement, Purchaser shall, and shall cause its Subsidiaries to, take all steps
necessary to obtain as soon as practicable the Required Regulatory Approvals and
to consummate the transactions contemplated by this Agreement, including taking,
accepting or otherwise engaging in any and all Actions of Divestiture requested
by any Governmental Authority with respect to the Peruvian Acquired Company.
(b) The parties agree that if, despite their compliance with all of their
respective covenants and obligations contained in this Agreement, including
Purchaser's obligations set forth in SECTION 6.36(a), prior to or as of (i) the
date of the Initial Closing or any Subsequent Closing in which the Sellers
Equity Interests in Xxxx Holdings or any successor Holding Company that includes
the Peruvian Acquired Company will be sold to Purchaser or (ii) the
Non-Transferred Company Determination Date with respect to the Peruvian Acquired
Company, it is deemed by the parties acting in good faith that it is not
reasonably likely to satisfy the conditions to closing set forth (A) in the case
of the Initial Closing, in SECTIONS 7.1(a) or (b), or (B) in the case of a
Subsequent Closing, in SECTIONS 7.4(a)(i) or (ii), Purchaser and Sellers agree
that Sellers shall retain the Peruvian Acquired Company and promptly thereafter
Sellers shall arrange for the orderly sale or other disposition of all or any
portion of the capital stock or assets of the Peruvian Acquired Company to one
or more Persons who are unaffiliated with Sellers. Any such sale or disposition
made by Sellers is referred to as the "ALTERNATIVE PERUVIAN TRANSACTION." Upon
the completion of any such Alternative Peruvian Transaction, Sellers will
determine the Net Proceeds received by Sellers in connection with such
Alternative Peruvian Transaction, and then determine the shortfall or profit, if
any, based upon the comparison of (i) the Sellers Allocated Payment, as adjusted
in accordance with SECTION 2.4 (and assuming for purposes of such adjustment
that a Closing with respect to the Peruvian Acquired Company had taken place on
the Non-Transferred Company Determination Date) and (ii) such Net Proceeds (such
shortfalls or profit, the "PERUVIAN DIFFERENCE"), and shall provide a written
statement setting forth such determination of the Peruvian Difference to
Purchaser (a "PERUVIAN DIFFERENCE DETERMINATION"). If the Peruvian Difference
Determination reflects a shortfall, then, with ten (10) Business Days following
Purchaser's receipt of the Peruvian Difference Determination, Purchaser will pay
to Sellers an amount equal to 100% of such shortfall. If the Peruvian Difference
Determination reflects a profit, then, within ten (10) Business Days following
Purchaser's receipt of the Peruvian Acquired Determination, Sellers will pay to
Purchaser 100% of such profit.
6.37 RETAINED COMPANIES AND SECTION 6.29 RETAINED COMPANIES. In the event
that any Acquired Company becomes a Retained Company or a Section 6.29 Retained
Company, Purchaser agrees that it shall take all actions reasonably requested by
Sellers, and shall promptly execute and deliver all certificates, notices or
other documentation as may be necessary to confirm the status of any Retained
Company or Section 6.29 Retained Company, including to confirm the ownership by
Sellers of the Sellers Equity Interests therein, free and clear of all
obligations or liabilities arising hereunder except as otherwise expressly set
forth in this Agreement.
6.38 ADDITIONAL AGREEMENTS AND ARRANGEMENTS. In the event that (a) the
parties are required to consummate the transactions contemplated by this
Agreement through one or more Subsequent Closings or (b) any Acquired Company
becomes a Non-Transferred Company, then the parties agree that, as of each
Closing, if (i) any Acquired Company that is the subject of such Closing (A)
owns any Intellectual Property Right, technology or software that is used by any
Non-Transferred Company or any other Acquired Company that is not being
transferred at such Closing and has not been transferred at any prior Closing,
as the case may be, or (B) provides services to, or is a party to any supply or
purchase agreement that includes the provision of supplies or other materials
to, any Non-Transferred Company or any Acquired Company that is not being
transferred at such Closing and has not been transferred at any prior Closing,
as the
case may be, and/or (ii) any Non-Transferred Company or any Acquired
Company that is not being transferred at such Closing and has not been
transferred at any prior Closing, as the case may be, (A) owns any Intellectual
Property Right, technology or software that is used by any Acquired Company that
is the subject of such Closing or (B) provides services to, or is a party to any
supply or purchase agreement that includes the provision of supplies or other
materials to, any Acquired Company that is the subject of such Closing, then, in
either case, Sellers shall determine in their sole discretion whether it is
necessary for the parties to cause any Acquired Companies being transferred at
such Closing, on the one hand, and the Non-Transferred Companies and the
Acquired Companies that are not being transferred at such Closing (or at any
prior Closing), on the other hand, to enter into any Contracts or other
arrangements as of the applicable Closing Date that will allow each of the
Acquired Companies that are transferred at such Closing, the Acquired Companies
that are not transferred at such Closing (or at any prior Closing) and the
Non-Transferred Companies to operate their respective businesses following any
such Closing in a manner that is consistent with the manner in which such
businesses are operated on such Closing Date; PROVIDED, HOWEVER, that this
SECTION 6.38 shall not include or affect any Intellectual Property Right,
technology or software that is owned by any BellSouth Entity, which matters are
the subject of other Sections in ARTICLE VI of this Agreement.
6.39 MOVICOM AND MOVISTAR MARKS. Seller Parent and Sellers agree that in the
event all of the Acquired Companies that use the MOVICOM xxxx are acquired by
Purchaser pursuant to the terms of this Agreement, then from and after the date
of the Closing with respect to the last of such Acquired Companies neither
Seller Parent nor Sellers shall challenge, contest or oppose any registrations
or applications for registration of the MOVICOM xxxx in the Territory by
Purchaser or any of Purchaser's Affiliates. For each country in the Territory
where the MOVICOM xxxx is used and an Acquired Company is located, Seller Parent
and Sellers agree and acknowledge that for such country after the Acquired
Company located in such country has been subject to a Closing (a) Seller Parent
and Sellers shall not commence, continue or support financially any proceeding
concerning or contesting the registration or any application for registration of
the MOVISTAR xxxx in that country, (b) as between Seller Parent, Sellers and
Purchaser, Purchaser shall have the exclusive right, title and interest in and
to the MOVISTAR xxxx in such country and (c) Seller Parent and Sellers shall
take all actions and execute all documents as are reasonably requested by
Purchaser in connection with any and all applications by Purchaser or
Purchaser's Affiliates for registration of the MOVISTAR xxxx in such country;
PROVIDED, HOWEVER, that it is understood and agreed that the foregoing shall not
apply to any Non-Transferred Companies and the countries in which they are
located.
6.40 DISCUSSIONS WITH LENDERS. Sellers and Purchaser agree to establish a
committee, the members of which shall be, for Sellers, those individuals set
forth in PART A of SCHEDULE 6.40, and for Purchaser, those individuals set forth
in PART B of SCHEDULE 6.40 (or their successors in office from time to time)
(the "FINANCING COMMITTEE"). Sellers agree that prior to engaging in any course
of negotiations with any creditors of any Acquired Companies following the date
hereof regarding the refinancing or material amendment of any material Debt
(other than Pay-Off Debt except to the extent to be refinanced with non-Pay-Off
Debt) of any Acquired Company, and from time to time following the initiation of
such negotiations, Sellers' members on the Financing Committee shall (so long as
it does not breach any confidentiality provisions in any applicable credit
agreement or other financing agreement to which any Acquired Company is a party)
advise and consult with Purchaser's members on the Financing Committee, each to
consult in good faith, as to the general strategy and approach to be pursued by
Sellers and the applicable Acquired Companies in such negotiations, and
Purchaser agrees that it shall conduct any discussions it is permitted to have
pursuant to this SECTION 6.40 with such creditors only after prior notice to
Sellers' members on the Financing Committee, only through Purchaser's members on
the Financing Committee and only in a manner consistent with such strategy and
approach; PROVIDED, HOWEVER, that, notwithstanding anything to the contrary
herein, Sellers shall in no event be bound to pursue any particular general
strategy and approach in any discussions they may have with any creditor of any
Acquired Company, whether or not previously discussed with Purchaser; PROVIDED,
FURTHER, HOWEVER, that, as a result of, or in connection with, such discussions,
Purchaser shall not be liable to any BellSouth Entity in any way for the Debt of
any Non-Transferred Company, except to the extent that Purchaser is in violation
of any of its obligations hereunder or has acted in bad faith or with willful
misconduct. After obtaining the prior approval of the Sellers' members of the
Financing Committee, Purchaser's members of the Financing Committee may, at
their option, discuss with any creditors of the Acquired Companies the extension
of (a) any Pay-Off Debt other than Pay-Off Debt in Argentina or Colombia or
other than any Pay-Off Debt for which there is a BellSouth Guarantee or (b) any
Debt other than Pay-Off Debt. The members of the Financing Committee will, at
their respective cost and expense, seek to meet with appropriate representatives
of the creditors in Colombia and Argentina as soon as practicable after the date
hereof. In Colombia, the members will seek amendments to the restructuring
documents so that (i) Purchaser is a permitted buyer that will not trigger the
acceleration of the maturity of the restructured Debt and (ii) upon the Closing
of the Colombia Acquired Companies, Sellers and their Affiliates will be
released from all obligations with respect to the restructured Debt. In
Argentina, the members will use commercially reasonable efforts to agree as to
the position to be taken with the creditors, but in the event they are unable to
agree, then Sellers' members shall have sole right to negotiate directly with
such creditors and Purchaser's members shall have no communications whatsoever
with such creditors, except to the extent explicitly permitted by Sellers'
members. Sellers' members and Purchaser's members will consult with each other
regarding any other issues with respect to Debt as any member may reasonably
request from time to time.
ARTICLE VII
CONDITIONS PRECEDENT TO THE CLOSINGS
7.1 MUTUAL CONDITIONS TO THE INITIAL CLOSING. Subject to the terms and
conditions of this Agreement, the obligations of each party to this Agreement to
consummate the transactions contemplated by this Agreement with respect to the
Initial Closing shall be subject to the satisfaction at or prior to the Initial
Closing Date of each of the following conditions:
(a) No Governmental Order shall have been enacted, entered, promulgated or
enforced by any Governmental Authority of competent jurisdiction that prohibits,
restrains, enjoins, or restricts the consummation of the transactions
contemplated by this Agreement and the Related Agreements that are the subject
of the Initial Closing, unless such Governmental Order would not result in the
operation of the businesses of the Initial Acquired Companies following the
Initial Closing Date (assuming the Initial Closing Date occurs) in a manner that
is materially adverse or detrimental to the conduct of the businesses of the
Initial Acquired Companies as compared to the conduct of the businesses of the
Initial Acquired Companies on
the date hereof (an "INITIAL CLOSING LEGAL PROHIBITION"); PROVIDED, HOWEVER,
that (i) if Purchaser is prepared to waive the foregoing Initial Closing Legal
Prohibition, then Sellers may not thereafter refuse to close on the basis of
such Initial Closing Legal Prohibition unless closing under the circumstances of
such Initial Closing Legal Prohibition would have an adverse effect on Sellers
or the BellSouth Entities, (ii) in the event any Initial Closing Legal
Prohibition is not final and nonappealable, the parties shall continue to be
subject to the terms of SECTION 6.29 with respect to any Acquired Company that
is the subject of such Initial Closing Legal Prohibition; (iii) in the event of
the imposition of any such Initial Closing Legal Prohibition, the existence of
such Initial Closing Legal Prohibition shall be understood to result in the
failure to satisfy the condition to the Initial Closing set forth in this
SECTION 7.1(a) only with respect to the Acquired Company (or Acquired Companies)
or particular transactions to which the Initial Closing Legal Prohibition
applies; and (iv) if Purchaser shall have failed to take any Action of
Divestiture required by SECTION 6.5(b), such Initial Closing Legal Prohibition
shall be deemed to have been waived by Purchaser (unless such a waiver is
prohibited by Law) and Purchaser shall not oppose the seeking of a court order
specifically enforcing Purchaser's performance under this Agreement (including
the obligations of Purchaser to take or accept all Actions of Divestiture other
than, with respect to the Argentinian Acquired Company and the Chilean Acquired
Company and subject to Purchaser's obligations set forth in the last sentence of
SECTION 6.5(b), any Actions of Divesture having an Action of Divestiture Fair
Value that would exceed, in the aggregate, the Action of Divestiture Threshold).
(b) The parties shall have obtained all Required Regulatory Approvals with
respect to the Initial Acquired Companies that are required under applicable
antitrust laws, foreign investment laws and material Communications Licenses
that, in each case, are necessary in order to permit the Initial Acquired
Companies to operate their businesses following the Initial Closing Date in a
manner that is not materially adverse or detrimental as compared to the conduct
of their business as of the date hereof ("INITIAL CLOSING REQUIRED REGULATORY
APPROVALS"); PROVIDED, HOWEVER, that (i) if Purchaser shall have failed to take
any Action of Divestiture required by SECTION 6.5(b) (subject to Purchaser's
obligations set forth in the last sentence of SECTION 6.5(b), other than any
Actions of Divestiture solely with respect to the Argentinian Acquired Company
and the Chilean Acquired Company having an Action of Divestiture Fair Value that
would exceed, in the aggregate, the Action of Divestiture Threshold) or to take
the actions required by SECTION 6.29(a), such Initial Closing Required
Regulatory Approval shall be deemed to have been waived by Purchaser (unless
such a waiver is prohibited by applicable Law); and (ii) that in the event that
(A) the Argentinian Acquired Company and/or the Chilean Acquired Company are
Retained Companies or (B) any of the Acquired Companies (including the
Argentinian Acquired Company and the Chilean Acquired Company) are Section 6.29
Retained Companies, then the condition to the Initial Closing contained in this
SECTION 7.1(b) shall nonetheless be deemed to be satisfied in respect of all
other Acquired Companies with respect to which all Initial Closing Required
Regulatory Approvals have been obtained.
(c) The parties shall have obtained all Required Minority Equity Holder
Approvals with respect to the Initial Acquired Companies the absence of which
would reasonably be expected to have a Material Adverse Effect ("INITIAL CLOSING
REQUIRED MINORITY EQUITY HOLDER APPROVALS"); PROVIDED, HOWEVER, that (i) if
Purchaser shall have failed to comply with its obligations as set forth in
ARTICLE III, such Initial Closing Required Minority Equity Holder Approval shall
be deemed to have been waived by Purchaser (unless such a waiver is prohibited
by applicable Law); and (ii) in the event that (A) the Argentinian Acquired
Company and/or the Chilean Acquired Company are Retained Companies or (B) any of
the Acquired Companies (including the Argentinian Acquired Company and the
Chilean Acquired Company) are Section 6.29 Retained Companies, then the
condition to the Initial Closing contained in this SECTION 7.1(c) shall
nonetheless be deemed to be satisfied in respect of all other Acquired Companies
with respect to which all Initial Closing Required Minority Equity Holder
Approvals have been obtained.
(d) Sellers (through Seller Representative) or Purchaser shall have sent written
notification to the other party of their desire to consummate the transactions
relating to one or more Initial Acquired Companies in accordance with SECTION
8.1(a).
(e) The Due Diligence Expiration Date shall have occurred.
7.2 CONDITIONS TO OBLIGATIONS OF PURCHASER. The obligations of Purchaser to
consummate the transactions contemplated by this Agreement with respect to the
Initial Closing shall be subject to the satisfaction or waiver by Purchaser at
or prior to the Initial Closing Date of each of the following conditions:
(a) The representations and warranties of each Seller and each Initial Acquired
Company contained herein and in the Additional Representations Certificate shall
have been accurate, true and correct in all material respects (except that all
such representations and warranties that are qualified by Material Adverse
Effect or Individual Material Adverse Effect shall be true and correct in all
respects) on and as of the date hereof and as of the date of the Additional
Representations Certificate, respectively; PROVIDED, HOWEVER, that the
representations and warranties of Sellers contained in SECTIONS 4.1(a), 4.2,
4.4(a), 4.4(c), 4.10, 4.12 and 4.13 and of Sellers and the applicable Acquired
Companies contained in Section 1.1 of the Additional Representations Certificate
shall also be accurate, true and correct in all material respects (except that
all such representations and warranties that are qualified by Material Adverse
Effect or Individual Material Adverse Effect shall be accurate, true and correct
in all respects) on and as of the Initial Closing Date with the same force and
effect as though made by Sellers and the applicable Acquired Companies on and as
of the Initial Closing Date; PROVIDED, FURTHER, that if one or more of such
representations or warranties are not accurate, true and correct in all material
respects on and as of any such date, the condition precedent in this SECTION
7.2(a) shall nevertheless be deemed satisfied unless the inaccuracy, falsity or
incorrectness of such representations or warranties would reasonably be expected
to have a Material Adverse Effect or a material adverse effect on the ability of
Sellers to consummate the transactions contemplated by this Agreement.
(b) Each Seller shall have performed and complied in all material respects with
all of its covenants and obligations contained in this Agreement to be performed
and complied with by it on or prior to the Initial Closing Date.
(c) Each Seller shall have delivered to Purchaser a certificate dated as of the
Initial Closing Date, signed by a senior officer of such Seller, certifying as
to compliance with SECTIONS 7.2(a) and 7.2(b).
(d) Since the date of this Agreement, there shall not have occurred any event or
development that has had or that would reasonably be expected to have a Material
Adverse Effect.
(e) For the period from December 1, 2003 through the end of the most recently
completed full fiscal quarter the last day of which is at least thirty (30) days
prior to the Initial Closing Date (the "INITIAL REVENUE DETERMINATION PERIOD"),
the Revenue of the Initial Acquired Companies subject to the Initial Closing
(the "ACTUAL INITIAL REVENUE AMOUNT") shall equal or exceed the Initial Revenue
Threshold Amount. The "INITIAL REVENUE AMOUNT" shall equal the product of (i)
the Revenues of such Initial Acquired Companies for the year ended November 30,
2003 MULTIPLIED BY (ii) a fraction, the numerator of which is the total number
of full fiscal quarters elapsed during the Initial Revenue Determination Period
and the denominator of which is four (4); PROVIDED, HOWEVER, that for purposes
of this calculation, the impact of any Action of Divestiture taken pursuant to
this Agreement on the Revenue of such Initial Acquired Companies shall be
disregarded.
(f) With respect to each Operating Company that is capable of being closed at
the Initial Closing Date (other than the Argentinian Operating Company, any
Acquired Company that is organized or formed under the laws of a country that
requires more than one holder of its equity interests (as long as such equity
interests do not exceed 0.25% of the equity interests in such Acquired Company)
and, at Sellers' discretion, BellSouth Chile, S.A.), one or more of Sellers have
restructured, or caused the restructuring of, the ownership of such Operating
Company in such a way as to permit the acquisition by Purchaser at the Initial
Closing either of (i) the Operating Company directly or (ii) a Netherlands BV
with a Dutch Residency Certificate, which Netherlands BV shall, directly or
indirectly, own such Operating Company (singularly or together with other
Operating Companies).
(g) With respect to the Closing of the Venezuelan Acquired Company only, (i)
Sellers shall either own one hundred percent (100%) of the Equity Interests in
the Venezuelan Acquired Companies or (ii) Purchaser in its sole discretion shall
agree to waive the requirement set forth in the immediately preceding CLAUSE
(i).
7.3 CONDITIONS TO OBLIGATIONS OF SELLERS. The obligations of Sellers to
consummate the transactions contemplated by this Agreement with respect to the
Initial Closing shall be subject to the satisfaction or waiver by the Seller
Representative at or prior to the Initial Closing Date of each of the following
conditions:
(a) The representations and warranties of Purchaser contained herein and in the
Purchaser Representations Certificate shall have been accurate, true and correct
in all material respects (except that all such representations and warranties
that are qualified by Purchaser Material Adverse Effect shall be accurate, true
and correct in all respects) on and as of the date hereof; PROVIDED, HOWEVER,
that the representations and warranties of Purchaser contained in SECTIONS 5.1,
5.2, 5.7 and 5.9 (except with regard to breaches or claims previously asserted
by Purchaser, including as to Loss Contingencies and indemnification claims)
shall also be accurate, true and correct in all material respects (except that
all such representations and warranties that are qualified by Purchaser Material
Adverse Effect shall be accurate, true and correct in all
respects) on and as of the Initial Closing Date with the same force and effect
as though made by Purchaser on and as of the Initial Closing Date.
(b) Purchaser shall have performed and complied in all material respects with
all of its covenants and obligations contained in this Agreement to be performed
and complied with by it on or prior to the Initial Closing Date.
(c) Purchaser shall have delivered to the Seller Representative a certificate of
Purchaser dated as of the Initial Closing Date, signed by a senior officer of
Purchaser, certifying as to compliance with SECTIONS 7.3(a) and 7.3(b).
(d) Purchaser shall have obtained the release or termination of all BellSouth
Guarantees relating to the Initial Acquired Companies unless Sellers, in their
sole discretion, shall have consented to the failure to obtain the release or
termination of the BellSouth Guarantees relating to the Initial Acquired
Companies, in which case Purchaser shall indemnify Sellers pursuant to SECTION
10.3(c) from and against any liabilities or obligations of Sellers or their
Affiliates arising out of or related to any payments made by a BellSouth Entity
pursuant to a BellSouth Guarantee following the Closing.
(e) Purchaser shall have paid all amounts required in connection with the
termination of the Technical Services Agreements with respect to the Initial
Acquired Companies in conformity with SECTION 6.21.
(f) Purchaser shall have delivered to the Seller Representative evidence in form
and substance reasonably satisfactory to Seller Representative to the effect
that the amounts owed or payable with respect to all Pay-Off Debt of any Initial
Acquired Company required to be satisfied, paid, discharged or acquired pursuant
to SECTION 6.7(a) have been satisfied, paid, discharged or acquired in full and
such creditor(s) shall have no further claims or rights in connection therewith.
(g) Solely with respect to the Closing of the transactions contemplated in this
Agreement in respect of Xxxx Holdings or any successor Holding Company formed to
hold (i) the Peruvian Acquired Company, (ii) the Uruguayan Acquired Company,
(iii) the Colombian Acquired Company, (iv) the Nicaraguan Acquired Company, (v)
the Venezuelan Acquired Company, and (vi) if Seller so elects, in its sole
discretion, any other Acquired Company, all conditions to Closing set forth in
SECTIONS 7.1, 7.2 and 7.3 shall have been satisfied or waived in respect of all
of the foregoing Acquired Companies.
(h) Since the date of this Agreement, there shall not have occurred any event or
development that has had or that would reasonably be expected to have a Material
Adverse Effect, PROVIDED, HOWEVER, that this condition shall be deemed to be
satisfied and waived in the event that Purchaser waives and releases its rights
as to any indemnity or other claim against Sellers or the BellSouth Entities
with respect to such Material Adverse Effect.
7.4 CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS AND PURCHASER AS TO
SUBSEQUENT CLOSINGS. (a) The respective obligations of each party to effect the
transactions contemplated by this Agreement at any Subsequent Closing as to
Subsequent Acquired Companies shall be
subject to the satisfaction at or prior to the applicable Subsequent Closing
Date of each of the following conditions:
(i) No Governmental Order shall have been enacted, entered, promulgated
or enforced by any Governmental Authority of competent jurisdiction
that prohibits, restrains, enjoins, or restricts the consummation of
the transactions contemplated by this Agreement and the Related
Agreements that are the subject of the Subsequent Closing, unless such
Governmental Order would not result in the operation of the businesses
of the Subsequent Acquired Companies that are the subject of such
Subsequent Closing following such Subsequent Closing Date (assuming the
Subsequent Closing were to occur) in a manner that is materially
adverse or detrimental to the conduct of the businesses of such
Subsequent Acquired Companies as compared to the conduct of the
businesses of such Subsequent Acquired Companies on the date hereof (a
"SUBSEQUENT CLOSING LEGAL PROHIBITION"); PROVIDED, HOWEVER, that (A) if
Purchaser is prepared to waive the Subsequent Closing Legal
Prohibition, then Sellers may not thereafter refuse to close on the
basis of such Subsequent Closing Legal Prohibition unless closing under
the circumstances of such Subsequent Closing Legal Prohibition would
have an adverse effect on Sellers or the BellSouth Entities; (B) in the
event any Subsequent Closing Legal Prohibition is not final and
nonappealable, the parties shall continue to be subject to the terms of
SECTION 6.29 with respect to any Acquired Company that is the subject
of such Subsequent Closing Legal Prohibition until the Non-Transferred
Company Determination Date; (C) in the event of the imposition of any
such Subsequent Closing Legal Prohibition, the existence of such
Subsequent Closing Legal Prohibition shall be understood to result in
the failure to satisfy the condition to Closing set forth in this
SECTION 7.4(a)(i) only with respect to the Acquired Company (or
Acquired Companies) to which the Subsequent Closing Legal Prohibition
applies; and (D) that if Purchaser shall have failed to take any
Actions of Divestiture required by SECTION 6.5(b), other than any
Action of Divestiture solely with respect to the Argentinian Acquired
Company and the Chilean Acquired Company that would exceed, in the
aggregate, the Action of Divestiture Threshold, such Subsequent Closing
Legal Prohibition shall be deemed to have been waived by Purchaser
(unless such a waiver is prohibited by applicable Law) and Purchaser
shall not oppose the seeking of a court order specifically enforcing
Purchaser's performance under this Agreement (including the obligations
of Purchaser to take or accept all Actions of Divestiture other than,
with respect to the Argentinian Acquired Company and the Chilean
Acquired Company and subject to Purchaser's obligations set forth in
the last sentence of SECTION 6.5(b), any Actions of Divestiture having
an Action of Divestiture Fair Value that would exceed, in the
aggregate, the Action of Divestiture Threshold).
(ii) The parties shall have obtained all Required Regulatory Approvals
with respect to the applicable Subsequent Acquired Companies that are
required under applicable antitrust laws, foreign investment laws and
material Communications Licenses that, in each case, are necessary in
order to permit the Subsequent Acquired Companies that are the subject
of such Subsequent Closing to operate their businesses following the
applicable Subsequent Closing Date in a manner that is not materially
adverse or detrimental as compared to the conduct of their business as
of the date hereof (with respect to any Subsequent Closing, the
"SUBSEQUENT CLOSING REQUIRED REGULATORY
APPROVALS"); PROVIDED, HOWEVER, that (A) if Purchaser shall have failed
to take any Action of Divestiture required by SECTION 6.5(b) (subject
to Purchaser's obligations set forth in the last sentence of
SECTION 6.5(b), other than any Actions of Divestiture solely with
respect to the Argentinian Acquired Company and the Chilean Acquired
Company having an Action of Divestiture Fair Value that would exceed,
in the aggregate, the Action of Divestiture Threshold) or to take the
actions required by SECTION 6.29(a), such Closing Required Regulatory
Approval shall be deemed to have been waived by Purchaser (unless such
a waiver is prohibited by applicable Law); and (B) that in the event
that (1) the Argentinian Acquired Company and/or the Chilean Acquired
Company are Retained Companies or (2) any of the Acquired Companies
(including the Argentinian Acquired Company and the Chilean Acquired
Company) are Section 6.29 Retained Companies, the condition to the
Subsequent Closing contained in this SECTION 7.4(a)(ii) shall
nonetheless be deemed to be satisfied in respect of all other Acquired
Companies with respect to which all Closing Required Regulatory
Approvals have been obtained.
(iii) The parties shall have obtained all Required Minority Equity
Holder Approvals with respect to the applicable Subsequent Acquired
Companies the absence of which would reasonably be expected to have a
Material Adverse Effect (with respect to any Subsequent Closing, the
"SUBSEQUENT CLOSING REQUIRED MINORITY EQUITY HOLDER APPROVALS");
PROVIDED, HOWEVER, that if Purchaser shall have failed to comply with
its obligations as set forth in ARTICLE III, such Subsequent Closing
Required Minority Equity Approval shall be deemed to have been waived
by Purchaser (unless such a waiver is prohibited by applicable Law);
PROVIDED, FURTHER, that in the event that (i) the Argentinian Acquired
Company or the Chilean Acquired Company are Retained Companies or
(ii) any of the Acquired Companies (including the Argentinian Acquired
Company and the Chilean Acquired Company) are Section 6.29 Retained
Companies, then the condition to the Subsequent Closing contained in
this SECTION 7.4(a)(iii) shall nonetheless be deemed to be satisfied in
respect of all other Acquired Companies with respect to which all
Subsequent Closing Required Minority Equity Holder Approvals have been
obtained.
(iv) The Initial Closing shall have occurred.
(v) The date of such Subsequent Closing shall occur on or before the
Non-Transferred Company Determination Date.
(vi) Sellers (through Seller Representative) or Purchaser shall have
delivered written notification to the other party of their desire to
consummate the transactions relating to one or more Subsequent Acquired
Companies in accordance with SECTION 8.1(b).
(b) The obligation of Purchaser to consummate the transactions contemplated by
this Agreement with respect to a Subsequent Closing, if any, shall be subject to
the satisfaction or waiver by Purchaser at or prior to such Subsequent Closing
Date of the following condition:
(i) For the period from December 1, 2003 through the end of the most
recently completed full fiscal quarter the last day of which is at
least thirty (30) days prior
to any Subsequent Closing Date (the "SUBSEQUENT REVENUE DETERMINATION
PERIOD"), the Revenue of the Subsequent Acquired Companies subject to
such Subsequent Closing (each, a "ACTUAL SUBSEQUENT REVENUE AMOUNT")
equal or exceed the Subsequent Revenue Threshold Amount; PROVIDED,
HOWEVER, that if the Actual Subsequent Revenue Amount with respect to
any such Subsequent Closing does not equal or exceed the Subsequent
Revenue Threshold Amount, then this condition will nonetheless be
deemed satisfied if (A) the sum of (1) the Actual Subsequent Revenue
Amount for the Subsequent Acquired Companies at such Subsequent
Closing, PLUS (2) the Excess Initial Revenue Amount, if any, PLUS
(3) Excess Subsequent Revenue Amounts, if any, for each earlier
Subsequent Closing would equal or exceed (B) the Subsequent Revenue
Threshold Amount. The "SUBSEQUENT REVENUE AMOUNT" with respect to any
Subsequent Closing shall equal the product of (1) the Revenues of the
Subsequent Acquired Companies that are the subject of such Subsequent
Closing for the year ended November 30, 2003 multiplied by (2) a
fraction, the numerator of which is the total number of full fiscal
quarters elapsed during the applicable Subsequent Revenue Determination
Period and the denominator of which is four (4); PROVIDED, FURTHER,
that for purposes of this calculation, the impact of any Action of
Divestiture taken pursuant to this Agreement on the Revenue of any
Initial Acquired Company or any Subsequent Acquired Company shall be
disregarded; and
(ii) With respect to the Closing of the Venezuelan Acquired Company
only, Sellers shall either (i) own one hundred percent (100%) of the
Equity Interests in the Venezuelan Acquired Companies or (ii) Purchaser
shall be satisfied in its sole discretion with respect to the rights of
the Minority Equity Holder in the Venezuelan Acquired Company.
(iii) The representations and warranties of each Seller and each
Subsequent Acquired Company that is the subject of such Subsequent
Closing contained herein and in the Additional Representations
Certificate shall have been accurate, true and correct in all material
respects (except that all such representations and warranties that are
qualified by Material Adverse Effect or Individual Material Adverse
Effect shall be accurate, true and correct in all respects) on and as
of the date hereof and as of the date of the Additional Representations
Certificate, respectively; PROVIDED, HOWEVER, that the representations
and warranties of Sellers contained in SECTIONS 4.1(a), 4.2, 4.4(a),
4.4(c), 4.10, 4.12, and 4.13 and of Sellers and the applicable
Subsequent Acquired Companies contained in Section 1.1 of the
Additional Representations Certificate shall also be accurate, true and
correct in all material respects (except that all such representations
and warranties that are qualified by Material Adverse Effect or
Individual Material Adverse Effect shall be accurate, true and correct
in all respects) on and as of such Subsequent Closing Date with the
same force and effect as though made by Sellers and the Subsequent
Acquired Companies that are the subject of such Subsequent Closing on
and as of such Subsequent Closing Date; PROVIDED, FURTHER, that if one
or more of such representations or warranties are not accurate, true
and correct in all material respects on and as of any such date, the
condition precedent in this SECTION 7.4(b)(iii) shall nevertheless be
deemed satisfied unless the inaccuracy, falsity or incorrectness of
such representations or warranties would reasonably be expected to have
a Material Adverse Effect (for purposes of this SECTION 7.4(b)(iii),
determined only with respect to the Subsequent Acquired Companies that
are the subject of such Subsequent Closing) or a
material adverse effect on the ability of Sellers to consummate the
transactions contemplated by this Agreement with respect to the
Subsequent Acquired Companies that are the subject of such Subsequent
Closing.
(iv) Since the date of this Agreement, there shall not have occurred
any event or development that has had or that would reasonably be
expected to have a Material Adverse Effect (for purposes of this
SECTION 7.4(b)(iv), determined only with respect to the Subsequent
Acquired Companies that are the subject of any such Subsequent
Closing).
(c) The obligations of Sellers to consummate the transactions contemplated by
this Agreement with respect to a Subsequent Closing, if any, shall be subject to
the satisfaction or waiver by the Seller Representative at or prior to such
Subsequent Closing Date of each of the following conditions:
(i) The representations and warranties of Purchaser contained herein
and in the Purchaser Representations Certificate shall have been
accurate, true and correct in all material respects (except that all
such representations and warranties that are qualified by Purchaser
Material Adverse Effect shall be accurate, true and correct in all
respects) on as of the date hereof; PROVIDED, HOWEVER, that the
representations and warranties of Purchaser contained in SECTIONS 5.1,
5.2, 5.7 and 5.9 shall also be accurate, true and correct in all
material respects (except that all such representations and warranties
that are qualified by Purchaser Material Adverse Effect shall be
accurate, true and correct in all respects) on and as of any Subsequent
Closing Date with the same force and effect as though made by Purchaser
on and as of the Subsequent Closing Date.
(ii) Purchaser shall have performed and complied in all material
respects with all of its covenants and obligations contained in this
Agreement to be performed and complied with by it on or prior to the
Subsequent Closing Date.
(iii) Purchaser shall have delivered to the Seller Representative a
certificate of Purchaser dated as of the Subsequent Closing Date,
signed by a senior officer of Purchaser, certifying as to compliance
with SECTIONS 7.4(c)(i) and 7.4(c)(ii).
(iv) Purchaser shall have obtained the release or termination of all
BellSouth Guarantees relating to the Subsequent Acquired Companies that
are the subject of such Subsequent Closing unless Sellers, in their
sole discretion, shall have consented to the failure to obtain the
release or termination of the BellSouth Guarantees relating to such
Subsequent Acquired Companies, in which case Purchaser shall indemnify
Sellers pursuant to SECTION 10.3(c) from and against any liabilities or
obligations of Sellers or their Affiliates arising out of or related to
any payments made by a BellSouth Entity pursuant to a BellSouth
Guarantee following the Closing.
(v) Purchaser shall have paid all amounts required in connection with
the termination of the Technical Services Agreements with respect to
any Subsequent Acquired Companies that are the subject of such
Subsequent Closing in conformity with SECTION 6.21.
(vi) Purchaser shall have delivered to the Seller Representative
evidence in form and substance reasonably satisfactory to Seller
Representative to the effect that the amounts owed or payable with
respect to all Pay-Off Debt of any Initial Acquired Company required to
be satisfied, paid, discharged or acquired pursuant to SECTION 6.7(a)
have been satisfied, paid, discharged or acquired in full and such
creditor(s) shall have no further claims or rights against the
BellSouth Entities for the principal amount of such Pay-Off Debt or any
interest thereon.
(vii) Solely with respect to the Closing of the transactions
contemplated in this Agreement in respect of Xxxx Holdings or any
successor Holding Company formed to hold (A) the Peruvian Acquired
Company, (B) the Uruguayan Acquired Company, (C) the Colombian Acquired
Company, (D) the Nicaraguan Acquired Company, (E) the Venezuelan
Acquired Company, and (F) if Seller so elects, in its sole discretion,
any other Acquired Company, all conditions to Closing set forth in
SECTION 7.4 shall have been satisfied or waived in respect of all of
the foregoing Acquired Companies.
(viii) Since the date of this Agreement, there shall not have occurred
any event or development that has had or that would reasonably be
expected to have a Material Adverse Effect (for purposes of this
SECTION 7.4(c)(viii), determined only with respect to the Subsequent
Acquired Companies that are the subject of any such Subsequent
Closing); PROVIDED, HOWEVER, that this condition shall be deemed to be
satisfied and waived in the event that Purchaser waives and releases
its rights as to any indemnity or other claim against Sellers or the
BellSouth Entities with respect to such Material Adverse Effect.
ARTICLE VIII
CLOSINGS; CLOSING DELIVERIES
8.1 CLOSING. The Initial Closing and any Subsequent Closing shall take
place at the offices of Mayer, Brown, Xxxx & Maw LLP, at 0000 Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, at 10:00 A.M. on the third (3rd) Business Day after the
date that Seller Representative or Purchaser notifies Purchaser or Seller
Representative, as the case may be, that (a) with respect to the Initial
Closing, Sellers or Purchaser, as the case may be, desire to close the
transactions with respect to each Acquired Company specified in such notice and
for which the applicable conditions precedent specified in ARTICLE VII have been
satisfied on the date of such notification (other than conditions to be
satisfied at the Initial Closing) or have been waived by all the parties
permitted to waive such conditions (each, an "INITIAL ACQUIRED COMPANY");
PROVIDED, HOWEVER, that in no event may Seller Representative or Purchaser send
a notification regarding the Initial Closing unless either (i) subject to
SECTION 7.3(g), the Initial Acquired Companies include all of the Acquired
Companies that primarily operate in at least five (5) countries in the Territory
or (ii) the aggregate enterprise value of the Initial Acquired Companies as set
forth in Column 1 SCHEDULE 2.2(b) constitutes fifty percent (50%) or more of the
aggregate enterprise value for all Acquired Companies as set forth in
SECTION 2.2(a)(i), and (b) with respect to a Subsequent Closing, Sellers or
Purchaser, as the case may be, desire to close the transactions with respect to
each Acquired Company (other than an Initial Acquired Company) for which the
applicable conditions precedent specified in SECTION 7.4 have been satisfied on
the date of such notification
(other than conditions to be satisfied at the applicable Subsequent Closing) or
have been waived by all the parties permitted to waive such conditions, which
notice shall specify each such Acquired Company (each, a "SUBSEQUENT ACQUIRED
COMPANY"). The Initial Closing and each Subsequent Closing, if any, and all
transactions to occur at the applicable Closing, shall be deemed to have taken
place at, and shall be effective as of, 12:01 a.m. New York time on the
applicable Closing Date.
8.2 INITIAL CLOSING DELIVERIES. At the Initial Closing, in addition to any
other documents or agreements required under this Agreement, (a) Sellers or
Seller Parent shall deliver to Purchaser the following:
(i) certificates (or similar documents) evidencing (A) all of the
Sellers Equity Interests relating to the Initial Acquired Companies
and/or (B) the Holding Company Equity Interests relating to the Holding
Companies that own the Seller Equity Interests relating to the Initial
Acquired Companies at the time of the Initial Closing, in either case
that are certificated, which certificates shall be duly endorsed in
blank or accompanied by duly executed stock powers or stock transfer
forms, assignments of such Sellers Equity Interests or Holding Company
Equity Interests, as the case may be, that are uncertificated or other
duly executed instruments of conveyance sufficient to validly transfer
such Sellers Equity Interests or Holding Company Equity Interests, as
the case may be, to Purchaser;
(ii) the resignations referred to in SECTION 6.9 relating to the
Initial Acquired Companies;
(iii) a certificate of the secretary or an assistant secretary of
Seller Parent dated as of the Initial Closing Date certifying
resolutions of the board of directors of Seller Parent approving and
authorizing the execution, delivery and performance by Seller Parent of
this Agreement and its Related Agreements and the consummation by
Seller Parent of the transactions contemplated hereby and thereby and
that such resolutions were duly adopted and are in full force and
effect (together with an incumbency and signature certificate regarding
the officer(s) signing on behalf of Seller Parent);
(iv) Trademark License Termination Letter for each Seller Parent Xxxx
License Agreement to which one or more of the Initial Acquired
Companies is a party, duly executed by Seller Parent;
(v) Transition Trademark License Agreements for each country of the
Territory, duly executed by Seller Parent and the applicable Initial
Acquired Companies;
(vi) either a BIPHO Transition License Agreement for each country of
the Territory in which the Initial Acquired Companies operate, duly
executed by Xxxx IP Holding LLC and the applicable Initial Acquired
Companies, or alternative arrangements to achieve the same transition
objectives;
(vii) Services Termination Letter for each Technical Services Agreement
to which one or more of the Initial Acquired Companies is a party, duly
executed by all parties to those Technical Services Agreements;
(viii) Transition Services Agreement for each country of the Territory
in which the Initial Acquired Companies operate, duly executed by
Seller Parent and the applicable Initial Acquired Companies;
(ix) Technical Information Confidentiality Agreements duly executed by
Seller Parent and the Initial Acquired Companies;
(x) Short Form Trademark Assignment covering the transfer of the
registrations and applications for Latin America Marks that are used
exclusively by any Initial Acquired Company, duly executed by Seller
Parent;
(xi) opinions of legal counsel (subject to reasonable and customary
assumptions and limitations) to Sellers as may be reasonably requested
by Purchaser solely with respect to the valid issuance and transfer of
the Sellers Equity Interests in any Initial Acquired Company in
compliance with all applicable Laws and any applicable Minority Equity
Agreement (which opinions shall be subject to customary exceptions);
(xii) with respect to any Initial Acquired Company that, following the
Initial Closing, will continue to have Minority Equity Holders,
opinions of legal counsel to Sellers as may be reasonably requested by
Purchaser solely with respect to the absence of any Right of First
Refusal Rights of any such Minority Equity Holder under the applicable
Minority Equity Agreement following the Initial Closing; and
(xiii) such other documents and instruments as may be required by any
other provision of this Agreement or any Related Agreement or as may
reasonably be required to consummate the transactions contemplated by
this Agreement and the Related Agreements with respect to the Initial
Acquired Companies, including any agreements or documents that Sellers
determine are necessary in accordance with SECTION 6.38.
(b) Purchaser shall deliver to Sellers the following:
(i) the amount payable to Sellers at the Initial Closing pursuant to
SECTION 2.2;
(ii) a certificate of Purchaser's secretary certifying resolutions of
the board of directors of Purchaser approving and authorizing the
execution, delivery and performance by Purchaser of this Agreement and
its Related Agreements and the consummation by Purchaser of the
transactions contemplated hereby and thereby (together with an
incumbency and signature certificate regarding the officer(s) signing
on behalf of Purchaser);
(iii) a Technical Information Confidentiality Agreement with respect to
an Initial Acquired Company duly executed by Purchaser;
(iv) an Assignment and Assumption Agreement relating to the Minority
Equity Agreements and Acquired Company Organizational Documents of an
Initial Acquired Company in a form reasonably acceptable to Sellers
duly executed by Purchaser; and
(v) such other documents and instruments as may be required by any
other provision of this Agreement or any Related Agreement or as may
reasonably be required to consummate the transactions contemplated by
this Agreement and the Related Agreements, including any agreements or
documents that Sellers determine are necessary in accordance with
SECTION 6.38.
8.3 SUBSEQUENT CLOSING DELIVERIES. At a Subsequent Closing, if any, in
addition to any other documents or agreements required under this Agreement,
(a) Sellers or Seller Parent shall deliver to Purchaser the following:
(i) certificates (or similar documents) evidencing (A) all of the
Sellers Equity Interests relating to the Subsequent Acquired Companies
that are the subject of such Subsequent Closing Date and/or (B) the
Holding Company Equity Interests relating to the Holding Companies
that own the Seller Equity Interests relating to the Subsequent
Acquired Companies at the time of the Subsequent Closing, in either
case that are certificated, which certificates shall be duly endorsed
in blank or accompanied by duly executed stock powers or stock transfer
forms, assignments of such Sellers Equity Interests or Holding Company
Equity Interests, as the case may be, that are uncertificated or other
duly executed instruments of conveyance sufficient to validly transfer
such Sellers Equity Interests or Holding Company Equity Interests, as
the case may be, to Purchaser;
(ii) the resignations referred to in SECTION 6.9 relating to the
Subsequent Acquired Companies that are the subject of such Subsequent
Closing Date;
(iii) Trademark License Termination Letter for each Seller Parent Xxxx
License Agreement to which one or more of the Subsequent Acquired
Companies that are the subject of such Subsequent Closing Date is a
party, duly executed by Seller Parent;
(iv) Transition Trademark License Agreements for each country of the
Territory, duly executed by Seller Parent and the applicable Subsequent
Acquired Companies;
(v) either a BIPHO Transition License Agreement for each country of the
Territory in which the Subsequent Acquired Companies that are the
subject of such Subsequent Closing Date operate, duly executed by Xxxx
IP Holding LLC and the applicable Subsequent Acquired Companies, or
alternative arrangements to achieve the same transition objectives;
(vi) Services Termination Letter for each Technical Services Agreement
to which one or more of the Subsequent Acquired Companies that are the
subject of such Subsequent Closing Date is a party, duly executed by
all parties to those Technical Services Agreements;
(vii) Transition Services Agreement for each country of the Territory
in which the Subsequent Acquired Companies that are the subject of such
Subsequent Closing Date operate, duly executed by Seller Parent and the
applicable Initial Acquired Companies;
(viii) Technical Information Confidentiality Agreement duly executed by
Seller Parent and the Subsequent Acquired Companies that are the
subject of such Subsequent Closing Date;
(ix) Short Form Trademark Assignment covering the transfer of the
registrations and applications for Latin America Marks if such marks
are either (A) used exclusively by one or more Subsequent Acquired
Companies that are the subject of such Subsequent Closing or (B) only
used by one or more Subsequent Acquired Companies that are the subject
of such Subsequent Closing and one or more of the Initial Acquired
Companies and/or any Subsequent Acquired Companies that were the
subject of an earlier Subsequent Closing, duly executed by Seller
Parent;
(x) opinions (subject to reasonable and customary assumptions and
limitations) of legal counsel to Sellers as may be reasonably requested
by Purchaser solely with respect to the valid issuance and transfer of
the Sellers Equity Interests in any Subsequent Acquired Company that is
the subject of such Subsequent Closing in compliance with all
applicable Laws and any applicable Minority Equity Agreement (which
opinions shall be subject to customary exceptions);
(xi) with respect to any Subsequent Acquired Company that, following
the applicable Subsequent Closing, will continue to have Minority
Equity Holders, opinions of legal counsel to Sellers as may be
reasonably requested by Purchaser solely with respect to the absence of
any Right of First Refusal Rights of any such Minority Equity Holder
under the applicable Minority Equity Agreement following such
Subsequent Closing; and
(xi) such other documents and instruments as may be required by any
other provision of this Agreement or any Related Agreement or as may
reasonably be required to consummate the transactions contemplated by
this Agreement and the Related Agreements with respect to the
Subsequent Acquired Companies that are the subject of such Subsequent
Closing, including any agreements or documents that Sellers determine
are necessary in accordance with SECTION 6.38.
(b) Purchaser shall deliver to Sellers the following:
(i) the amount payable to Sellers at the Subsequent Closing with
respect to the Subsequent Acquired Companies that are the subject of
such Subsequent Closing pursuant to SECTION 2.2;
(ii) a Technical Information Confidentiality Agreement with respect to
books and records of each Subsequent Acquired Company that is the
subject of such Subsequent Closing, duly executed by Purchaser;
(iii) an Assignment and Assumption Agreement relating to the Minority
Equity Agreements and Acquired Company Organizational Documents of each
Subsequent Acquired Company that is the subject of the Subsequent
Closing in a form reasonably acceptable to Sellers duly executed by
Purchaser; and
(iv) such other documents and instruments as may be required by any
other provision of this Agreement or any Related Agreement or as may
reasonably be required to consummate the transactions contemplated by
this Agreement and the Related Agreements with respect to the
Subsequent Acquired Companies that are the subject of such Subsequent
Closing, including any agreements or documents that Sellers determine
are necessary in accordance with SECTION 6.38.
ARTICLE IX
TERMINATION
9.1 TERMINATION. This Agreement may be terminated, and the transactions
contemplated herein may be abandoned, at any time on or prior to the Initial
Closing Date:
(a) with the mutual consent of the Seller Representative and Purchaser;
(b) by the Seller Representative or Purchaser, if the Initial Closing shall not
have taken place on or before December 15, 2004, PROVIDED, that if the Initial
Closing shall not have occurred on or before December 15, 2004 solely because of
(i) the failure of (A) the parties to receive any of the Closing Required
Regulatory Approvals or (B) any applicable regulatory waiting period to expire
or (B) the imposition of any Initial Closing Legal Prohibition, such date shall
be extended to June 30, 2005 (the "OUTSIDE DATE"); PROVIDED, that the right to
terminate this Agreement under this SECTION 9.1(b) shall not be available to (i)
the Seller Representative if the failure of any Seller to fulfill any of its
obligations under this Agreement, or the breach of or inaccuracy in any
representation or warranty by any Seller in this Agreement or by any Seller or
any Acquired Company in the Additional Representations Certificate, has been the
cause of or resulted in the failure of the Initial Closing to occur on or before
the Outside Date or (ii) Purchaser if the failure of Purchaser to fulfill any of
its obligations under this Agreement, or the breach of or inaccuracy in any
representation or warranty by Purchaser in this Agreement, has been the cause of
or resulted in the failure of the Initial Closing to occur on or before Outside
Date;
(c) by Purchaser, if there shall have been a material breach of any
representation or warranty of Sellers hereunder and the falsity, inaccuracy or
incorrectness of such representation or warranty would reasonably be expected to
have a Material Adverse Effect or a material adverse effect on the ability of
Sellers to consummate the transactions contemplated by this Agreement, or a
material breach of any covenant or obligation of Sellers hereunder, and which in
any such case would cause the conditions to the Initial Closing set forth in
SECTIONS 7.2(a) and/or 7.2(b) not to be satisfied by the Outside Date, and in
any case such breach shall not have been remedied within thirty (30) days after
receipt by the Seller Representative of a notice in writing from Purchaser
specifying the breach and requesting that such breach be remedied;
(d) by the Seller Representative, if there shall have been a material breach of
any covenant, obligation, representation or warranty of Purchaser hereunder, and
such breach shall have a Purchaser Material Adverse Effect and such breach shall
not have been remedied within thirty (30) days after receipt by Purchaser of
notice in writing from the Seller Representative specifying the breach and
requesting that such breach be remedied;
(e) by Purchaser on or before the date that is 30 days after the Due Diligence
Expiration Date, if, after having completed its due diligence investigation of
the Acquired Companies in accordance with SECTION 6.2 of this Agreement,
Purchaser has discovered, from information obtained by Purchaser after the date
of this Agreement (excluding any information provided to or obtained by
Purchaser up to and including the date of this Agreement, including pursuant to
the schedules hereto), conditions, circumstances or events that have or would
reasonably be expected to have a Material Adverse Effect; PROVIDED, HOWEVER,
that if Purchaser has not exercised its right to terminate this Agreement in
accordance with this SECTION 9.1(e) on or before the date that is 30 days after
the Due Diligence Expiration Date, Purchaser shall have no further right to
terminate this Agreement pursuant to this SECTION 9.1(e), and this Agreement
shall continue in full force and effect; and PROVIDED, FURTHER, that Purchaser
shall not have the right to terminate this Agreement pursuant to this SECTION
9.1(e) if Purchaser is then in breach of any of its representations, warranties,
covenants or agreements contained in this Agreement;
In the event of termination by the Seller Representative or Purchaser pursuant
to this SECTION 9.1 (other than SECTION 9.1(a)), written notice thereof shall be
given to the other party.
9.2 EFFECT OF TERMINATION. If this Agreement is terminated pursuant to
SECTION 9.1, or if Purchaser has the right to terminate this Agreement pursuant
to SECTION 9.1 and determines not to or fails to exercise its termination rights
pursuant to SECTION 9.1, there shall be no liability hereunder on the part of
Sellers, Purchaser, nor their respective Affiliates, directors, officers,
employees, agents and representatives, and no party shall have any right to xxx
for a breach of any representation or warranty contained herein or in the
Additional Representations Certificate, and all obligations of the parties
hereunder shall terminate except that the obligations set forth in SECTIONS
3.1(f), 6.8 (Confidentiality) 6.11 (Brokers), 6.28(b) (Non-Solicitation by
Purchaser), 12.1 (Expenses) and 12.8 (Publicity) and the Confidentiality
Agreement shall survive the termination of this Agreement, and except that no
such termination shall relieve any party from liability for any prior
intentional breach of any covenant contained in this Agreement.
9.3 NO RIGHT TO TERMINATE AFTER INITIAL CLOSING. For the avoidance of
doubt, the parties agree that there is no right to terminate this Agreement once
there has been an Initial Closing. Notwithstanding the foregoing, in the event
that the Sellers Equity Interests of one or more Acquired Companies have not
been transferred to Purchaser despite each party's compliance with all of the
covenants and obligations contained in this Agreement to be performed and
complied with by it prior to Non-Transferred Company Determination Date with
respect to such Acquired Company, then such Acquired Companies, to the extent
that they have not been deemed Non-Transferred Companies prior to their
respective Non-Transferred Company Determination Date, shall be deemed to be
Non-Transferred Companies on such Non-Transferred Company Determination Date
and, following the applicable Non-Transferred Company Determination Date, (i)
the parties shall nevertheless be obligated to consummate the Initial Closing
and any Subsequent Closing and the other transactions contemplated by this
Agreement except with respect to any such Non-Transferred Company, (ii) the
applicable Seller will retain and continue to hold and own its Seller Equity
Interests or Holding Company Equity Interests relating to (other than upon a
transfer of Right of First Refusal Shares of a ROFR Company), and any Sellers
Stockholder Debt with regard to, any such Non-Transferred Company, (iii) the
Sellers Equity Interests of any such Non-Transferred Company shall be deemed to
be excluded from the definition of "Sellers Equity Interests" and "Holding
Company
Equity Interests" for all purposes of this Agreement, (iv) no representations or
warranties shall be deemed to have been made by Sellers with respect to any such
Non-Transferred Company and (v) SECTION 9.2 (including the exceptions contained
therein) shall be deemed to apply to such Non-Transferred Companies as if this
Agreement had terminated solely with respect to such Non-Transferred Companies.
For the avoidance of doubt, from and after the Non-Transferred Company
Determination Date with respect to any Retained Company, SECTIONS 6.5 and 6.6
and ARTICLE III, as well as any other provisions that would reasonably be
interpreted to treat such Non-Transferred Company as an Acquired Company whose
Sellers Equity Interests are being transferred directly or indirectly pursuant
to the transactions contemplated by this Agreement, will no longer be applicable
to such Non-Transferred Company, PROVIDED, that SECTIONS 6.8 and 6.28, as well
as the Confidentiality Agreement, will continue to be applicable to all
Non-Transferred Companies (other than as provided otherwise in this Agreement).
ARTICLE X
INDEMNIFICATION
10.1 SURVIVAL. The representations and warranties of the parties hereto
contained herein and, in the case of Sellers, in the Additional Representations
Certificate, shall survive the Initial Closing Date with respect to any Initial
Acquired Companies and any Subsequent Closing Date with respect to any
Subsequent Acquired Companies for a period of eighteen (18) months after the
Initial Closing Date or any Subsequent Closing Date, as the case may be, except
that (a) Tax Warranties shall survive until the Tax Statute of Limitations Date
(b) Labor Warranties and Environmental Warranties shall survive for a period of
three (3) years after the Initial Closing Date or any Subsequent Closing Date,
as the case may be, and (c) Title and Authorization Warranties shall survive
indefinitely and shall not terminate. Neither Purchaser nor any Seller shall
have any liability with respect to claims first asserted in connection with any
representation or warranty after the survival period specified therefor in this
SECTION 10.1.
10.2 INDEMNIFICATION BY SELLERS.
(a) Subject to SECTION 10.4, each Seller, jointly and severally, agrees to
indemnify Purchaser and the Purchaser Indemnified Persons against, and
agrees to hold Purchaser and the Purchaser Indemnified Persons harmless
from, any and all Losses incurred or suffered by Purchaser and the
Purchaser Indemnified Persons arising out of any of the following:
(i) any breach of or any inaccuracy in any representation or warranty
made by any Seller (with respect to itself or any Initial Acquired
Company and any Subsequent Acquired Company) and any Initial Acquired
Company or any Subsequent Acquired Company in this Agreement or in the
Additional Representations Certificate; (solely with respect to the
representations and warranties set forth in SECTIONS 4.10, 4.12 and
4.13, and subject to the limitations set forth in SECTION 10.4(a)(ii)
and SECTION 10.4(a)(i)(B), disregarding for the purpose of this
SECTION 10.2(a)(i) any limitation or qualification contained in such
representations and warranties as to materiality or an Individual
Material Adverse Effect (which instead will be read as any adverse
effect)); PROVIDED, FURTHER, that such Seller shall have no liability
under this SECTION 10.2(a)(i) for any breach of or inaccuracy in any
representation or warranty unless (A) in the case of all
representations and warranties (other than Tax Warranties, Labor
Warranties, Environmental Warranties and Title and Authorization
Warranties) a notice of Purchaser's or a Purchaser Indemnified Person's
claim is given to the Seller Representative not later than the close of
business on the eighteen (18) month anniversary of the Initial Closing
Date or the applicable Subsequent Closing Date, as the case may be,
(B) in the case of Tax Warranties, a notice of Purchaser's or a
Purchaser Indemnified Person's claim is given to the Seller
Representative not later than the close of business on the Tax Statute
of Limitations Date and (C) in the case of Environmental Warranties and
Labor Warranties, a notice of Purchaser's or Purchaser Indemnified
Person's claim is given to the Seller Representative not later than the
close of business on the third (3rd) year anniversary of the Initial
Closing Date or any Subsequent Closing Date, as the case may be;
(ii) any breach of or failure by any Seller to perform any covenant or
obligation of such Seller set out in this Agreement; PROVIDED, that
Sellers shall have no liability under this SECTION 10.2(a)(ii) for any
breach or failure occurring on or prior to the applicable Closing Date
unless a notice of Purchaser's or a Purchaser Indemnified Person's
claim is given to the Seller Representative not later than the close of
business on the eighteen (18) month anniversary of the applicable
Closing Date;
(iii) any claim by a Minority Equity Holder relating to (A) any breach
or failure by Sellers to perform any covenant or obligation under this
Agreement or the Minority Equity Agreements or otherwise arising from
the actions, or failure to act, of Sellers under this Agreement or the
Minority Equity Agreements during the period prior to the Initial
Closing Date or any Subsequent Closing Date, as applicable, (B) any
breach of or failure to perform by Sellers any obligations that Sellers
have to such Minority Equity Holder and (C) the entering into this
Agreement by Purchaser and the performance by Purchaser of its
obligations hereunder with respect to such Minority Equity Holder in
compliance with the terms hereof; PROVIDED, that Sellers shall have no
liability under this SECTION 10.2(a)(iii) for any claim by a Minority
Equity Holder arising from any breach, action or failure occurring on
or prior to the applicable Closing Date unless a notice of Purchaser's
or a Purchaser Indemnified Person's claim is given to the Seller
Representative not later than the close of business on eighteen (18)
month anniversary of the applicable Closing Date;
(iv) the amount of any Loss Contingency and Impairment Losses
Shortfall, as determined in accordance with SECTION 6.3(b);
(v) any Taxes of the Acquired Companies arising out of the transactions
described in SECTIONS 6.31, 6.32, or 7.2(f) or Taxes of Purchaser from
the receipt of interest on any note required to be distributed pursuant
to SECTION 6.35, PROVIDED that the indemnity under SECTION 6.35 shall
(A) apply only to interest paid for a maximum of three (3) years,
(B) apply to interest up to a maximum rate or yield of 4%, (C) be for a
maximum principal amount equal to the current or accumulated earnings
and profits existing as of the applicable Closing and reduced by any
cash required to be distributed pursuant to SECTION 6.35, (D) be
reduced by any Tax Benefit received by any Acquired Company for the
interest paid on the note and (E) be increased by any Dutch capital
duty
if Purchaser, despite its best efforts, is unable to repay the note
according to its terms and capitalize the note into equity after three
(3) years;
(vi) any Taxes imposed on any Initial Acquired Company or Subsequent
Acquired Company in respect of its income, business, property or
operations or for which it may otherwise be liable by reason of the
several liability pursuant to U.S. Treasury Regulation Section 1.1502-6
or any analogous state, local or foreign law or regulation analogous to
U.S. Treasury Regulation Section 1.1502-6;
(vii) any payment by Purchaser to any Minority Equity Holder in respect
of Minority Equity Interests that exceeds the payment that would
otherwise have been required to be paid to such Minority Equity Holder
solely in exchange for its Minority Equity Interests pursuant to the
terms and conditions set forth in ARTICLES II and III, which excess
payment is made by Purchaser in connection with obtaining the Minority
Equity Approval with respect to such Minority Equity Holder, but in any
event solely to the extent that Seller Representative, in its sole
discretion, shall have agreed in advance to such excess payments; and
(viii) any Taxes imposed on a Venezuelan Acquired Company for tax
periods or portions of tax periods ending on or before the applicable
Closing Date and any cost or expense incurred by a Venezuelan Acquired
Company in respect thereof. For purposes of this provision, any Taxes
with respect to a tax period that includes the Closing Date will be
measured based on an assumed closing of the books as of such Closing
Date. Any amount payable under this provision shall be reduced by any
refunds received by Purchaser after the applicable Closing Date with
respect to such tax period and not paid to Sellers. There shall,
however, be no credit to Sellers for amounts reserved on the Financial
Statements with respect to such Tax claims. Each Seller acknowledges
that Purchaser shall be entitled, as a result of the indemnification
provided herein, to eliminate such reserve on financial statements
prepared on and after the applicable Closing Date.
(b) Seller Parent agrees to indemnify Purchaser and the Purchaser Indemnified
Persons against, and agrees to hold Purchaser and the Purchaser Indemnified
Persons harmless from, any and all Losses incurred or suffered by Purchaser or a
Purchaser Indemnified Person arising out of the Venezuelan Arbitration which are
required pursuant to the Venezuelan Arbitration Award to be satisfied by the
Venezuelan Arbitration Entities, following the applicable Closing with respect
to the Venezuelan Arbitration Entities; PROVIDED, HOWEVER, that Purchaser and
the Purchaser Indemnified Persons shall have the right to payment by Sellers
solely in respect of the amount by which such Losses exceed the amount of any
Venezuela Arbitration Loss Reserves.
(c) Seller Parent agrees to indemnify Purchaser and the Purchaser Indemnified
Persons against, and agrees to hold Purchaser and the Purchaser Indemnified
Persons harmless from, any and all Losses incurred or suffered by Purchaser or a
Purchaser Indemnified Person arising out of the Peruvian Arbitration which are
required pursuant to the Peruvian Arbitration Award to be satisfied by the
Peruvian Acquired Companies following the Closing with respect to the Peruvian
Acquired Companies.
10.3 INDEMNIFICATION BY PURCHASER. Purchaser agrees to indemnify Sellers and
the Sellers Indemnified Persons against, and agrees to hold Sellers and the
Sellers Indemnified Persons harmless from, any and all Losses incurred or
suffered by Sellers and the Sellers Indemnified Persons arising out of any of
the following:
(a) any breach of or any inaccuracy in any representation or warranty made by
Purchaser in this Agreement; PROVIDED, that Purchaser shall have no liability
under this SECTION 10.3(a) for any breach of or inaccuracy in any representation
or warranty unless, in the case of all representations and warranties (other
than Title and Authorization Warranties), a notice of Sellers' or Sellers
Indemnified Persons' claim is given to Purchaser not later than the close of
business on the first anniversary of the Final Closing Date;
(b) any breach of or failure by Purchaser to perform any covenant or obligation
of Purchaser set out in this Agreement;
(c) any BellSouth Guarantee with respect to any Initial Acquired Company or
Subsequent Acquired Company;
(d) any claim by a Minority Equity Holder relating to (A) any breach or failure
by Purchaser to perform any covenant or obligation under this Agreement or the
Minority Equity Agreements or otherwise arising from the actions, or failure to
act, of Purchaser under this Agreement or the Minority Equity Agreements during
the period prior to the Initial Closing Date or any Subsequent Closing Date, as
applicable and, (B) any breach of or failure to perform by Purchaser any other
obligations that Purchaser has to such Minority Equity Holder; PROVIDED, that
Purchaser shall have no liability under this SECTION 10.3(d) for any claim by a
Minority Equity Interest Holder arising from any breach, action or failure
occurring on or prior to the applicable Closing Date unless a notice of Sellers'
or a Sellers Indemnified Person's claim is given to Purchaser not later than the
close of business on the eighteen (18) month anniversary of the applicable
Closing Date;
(e) any occurrence, event, act or omission of or involving any Initial Acquired
Company or Subsequent Acquired Company after the applicable Closing Date,
including any claims, lawsuits or Losses relating, or with respect, to (i) the
Minority Equity Holders, the Minority Equity Holder Rights or the Minority
Equity Agreements or the Acquired Company Organizational Documents, (ii) any
Continuing Employees, including as a result of their termination, constructive
termination or severance, any liabilities under or with respect to any Employee
Benefit Plan, any liabilities under or with respect to any other agreement or
arrangement assumed by any Initial Acquired Company or any Subsequent Acquired
Company or Purchaser hereunder, and any liabilities under or with respect to the
Retention Plans to the extent such Retention Plans constitute Employee Benefit
Plans or the obligations thereunder are assumed by any Initial Acquired Company
or any Subsequent Acquired Company or Purchaser hereunder, or (iii) any Acquired
Company Debt with respect to any Initial Acquired Company or Subsequent Acquired
Company and any occurrence, event, act or omission or involving any Initial
Acquired Company or Subsequent Acquired Company after the applicable Closing
Date relating to any creditor, lender, noteholder, bondholder or other holder of
Debt with respect to any Acquired Company Debt of any Initial Acquired Company
or Subsequent Acquired Company; and
(f) except as otherwise provided in this Agreement, from and after the
applicable Closing Date, Purchaser shall protect, defend, indemnify and hold
harmless Sellers from any and all Taxes relating to any Initial Acquired Company
or Subsequent Acquired Company arising after the applicable Closing.
10.4 LIMITATIONS ON LIABILITY OF SELLERS. Notwithstanding any other
provision of this Agreement:
(a) Purchaser and the Purchaser Indemnified Persons shall have the right to
payment by any Sellers under:
(i) SECTION 10.2(a)(i) (other than with respect to any inaccuracy or
breach of the Tax Warranty) and SECTION 10.2(a)(iv) only if, and only
to the extent that, Purchaser and the Purchaser Indemnified Persons
shall have incurred or suffered (A) as to any particular inaccuracy or
breach, indemnifiable Losses in excess of One Million Dollars
($1,000,000) and (B) as to all inaccuracies and breaches, aggregate
indemnifiable Losses in excess of one percent (1%) of the Allocated
Purchase Price for the Acquired Companies, and then only for the amount
of such excess (subject to the further limitation in CLAUSE (A) of this
SECTION 10.4(a)(i)); PROVIDED, HOWEVER, that with respect to any
inaccuracy or breach of a representation or warranty set forth in
SECTIONS 4.10, 4.12, or 4.13, the limitation set forth in CLAUSE (A) of
this SECTION 10.4(a)(i) shall not apply and in place thereof the
limitations set forth in SECTION 10.4(a)(ii) shall apply;
(ii) SECTION 10.2(a)(i) with respect to any inaccuracy or breach of a
representation or warranty set forth in SECTIONS 4.10, 4.12, or 4.13,
only if, and only to the extent that, Purchaser and the Purchaser
Indemnified Persons shall have incurred or suffered (A) as to any of
the Acquired Companies identified on Schedule 1 attached to the
Additional Representations Certificate, aggregate indemnifiable Losses
in excess of Ten Million Dollars ($10,000,000), and then, subject to
the limitation in CLAUSE (B) of SECTION 10.4(a)(i), for the full amount
of such indemnifiable Losses, or (B) as to any of the Acquired
Companies identified on Schedule 2 attached to the Additional
Representations Certificate, indemnifiable Losses in excess of Twenty
Five Million Dollars ($25,000,000), and then, subject to the limitation
in CLAUSE (B) of SECTION 10.4(a)(i), for the full amount of such
indemnifiable Losses; and
(iii) SECTION 10.2(a)(v) and, with respect to the Tax Warranty only,
SECTION 10.2(a)(i) only if, and only to the extent that, in respect of
the Acquired Companies in any one country, Purchaser and the Purchaser
Indemnified Persons shall have incurred or suffered Losses with respect
to such Taxes or the Tax Warranty, as applicable, in excess of Five
Million Dollars ($5,000,000) in respect of the Acquired Companies in
any such country and then for the full amount of such indemnifiable
Losses.
(b) Subject to the limitations set forth in this ARTICLE X, no Seller shall, nor
shall the Sellers, as a whole, be responsible for any particular indemnification
claim pursuant to SECTION 10.2 insofar as such claim relates to a particular
Acquired Company for an amount that exceeds the product of (i) the amount of
such indemnification claim otherwise payable pursuant
to this ARTICLE X and (ii) the Sellers Allocation Percentage applicable to such
Initial Acquired Company or Subsequent Acquired Company.
(c) Sellers shall not, as a whole, have any liability under or in connection
with this Agreement or the transactions contemplated hereby or the Additional
Representations Certificate (including under SECTION 10.2 or otherwise for any
breach of or inaccuracy in any representation or warranty or for any breach of
any covenant or obligation or for any other reason) in excess of, as to all
representations, warranties, covenants, obligations and other reasons, the
Aggregate Sellers Allocated Payments.
(d) Sellers will only be liable for actual Losses, and in no event shall Sellers
have any liability for special, speculative, punitive, indirect, consequential
or multiple-based damages or for lost profits or lost business opportunities,
with regard to indemnification or other claims hereunder except to the extent
such special, speculative, punitive, indirect, consequential or multiple-based
damages or lost profits or damages in respect of lost business opportunities
damages are claimed by any third party against Purchaser or a Purchaser
Indemnified Person.
(e) The sole and exclusive liability and responsibility of Sellers to Purchaser
under or in connection with this Agreement or the transactions contemplated
hereby or in the Additional Representations Certificate (including for any
breach of or inaccuracy in any representation or warranty or for any breach of
any covenant or obligation or for any other reason), and the sole and exclusive
remedy of Purchaser with respect to any of the foregoing, shall be as set forth
in this ARTICLE X (other than with respect to fraud). Other than pursuant to
this ARTICLE X, Purchaser on behalf of itself and its Representatives hereby
waives and releases, to the fullest extent permitted under applicable Law, any
and all rights (including any other right to indemnification, contribution or
recovery), claims and causes of action (including those of any nature, known or
unknown, or based on any legal theory, whether common law or any statute
(including any Environmental Law), contract, tort or other legal theory) it may
have against Sellers or any of their respective directors, officers, employees,
agents, stockholders or Affiliates arising from or relating to the negotiation
or subject matter of this Agreement or the Additional Representations
Certificate arising under or based upon any applicable Law, rule, regulation,
Order, judgment or decree.
(f) In no event shall any Seller have any liability for any claims by or with
respect to any past, current or future employees of any Initial Acquired Company
or Subsequent Acquired Company (or for any Losses relating thereto) which are
first made after the Initial Closing or any Subsequent Closing, as the case may
be, including any claims that arise out of or in connection with (i) any
injuries to, or deaths or illnesses of, such employees or (ii) any severance or
other claims related to the termination of such employees.
(g) Except as provided in SECTION 6.3(b) and for the indemnity referred to in
SECTION 10.2(a)(viii), Sellers shall have no liability or obligation to
indemnify Purchaser for any Losses incurred or suffered by Purchaser arising out
of any matter that is disclosed on the Financial Statements (or as otherwise
disclosed in SCHEDULE 4.5) and to which Purchaser is entitled to be indemnified
pursuant to this ARTICLE X unless and solely to the extent to which the amount
of the damages from such Losses exceeds the Final Loss Contingencies and
Impairment Losses.
(h) In no event shall any Seller have any liability or obligation to indemnify
Purchaser or any Purchaser Indemnified Person for any claims relating to any
Non-Transferred Company except pursuant to SECTION 10.2(a)(iii).
(i) Sellers shall have no liability for Taxes under this ARTICLE X as to matters
resulting from or arising out of activities of Purchaser or its Affiliates on or
after the applicable Closing and to the extent that such liability arises
primarily from or is attributable to the breach by Purchaser of its obligations
under this Agreement.
10.5 CLAIMS. As promptly as is reasonably practicable after becoming aware
of a claim for indemnification under this Agreement not involving a claim, or
the commencement of any suit, action or proceeding, of the type described in
SECTION 10.6, but in any event no later than ten (10) Business Days after first
becoming aware of such claim, the Indemnified Person shall give notice to the
Indemnifying Person of such claim, which notice shall specify the facts alleged
to constitute the basis for such claim, the representations, warranties,
covenants and obligations alleged to have been breached and the amount that the
Indemnified Person seeks hereunder from the Indemnifying Person, together with
such information as may be necessary for the Indemnifying Person to determine
that the limitations in SECTION 10.4 have been satisfied or do not apply;
PROVIDED, that the failure of the Indemnified Person to give such notice shall
not relieve the Indemnifying Person of its obligations under this ARTICLE X
except to the extent (if any) that the Indemnifying Person shall have been
prejudiced thereby.
10.6 NOTICE OF THIRD PARTY CLAIMS; ASSUMPTION OF DEFENSE. The Indemnified
Person shall give notice as promptly as is reasonably practicable, but in any
event no later than five (5) Business Days after receiving notice thereof, to
the Indemnifying Person of the assertion of any claim, or the commencement of
any suit, action or proceeding, by any Person not a party hereto in respect of
which indemnity may be sought under this Agreement (which notice shall specify
in reasonable detail the nature and amount of such claim together with such
information as may be necessary for the Indemnifying Person to determine that
the limitations in SECTION 10.4 have been satisfied or do not apply); PROVIDED,
that the failure of the Indemnified Person to give such notice shall not relieve
the Indemnifying Person of its obligations under this ARTICLE X except to the
extent (if any) that the Indemnifying Person shall have been prejudiced thereby.
The Indemnifying Person may, at its own expense, (a) participate in the defense
of any such claim, suit, action or proceeding and (b) upon notice to the
Indemnified Person, at any time during the course of any such claim, suit,
action or proceeding, assume the defense thereof with counsel of its own choice
and in the event of such assumption, shall have the exclusive right, subject to
CLAUSE (i) of SECTION 10.7, to settle or compromise such claim, suit, action or
proceeding. If the Indemnifying Person assumes such defense, the Indemnified
Person shall have the right (but not the duty) to participate in the defense
thereof and to employ counsel, at its own expense, separate from the counsel
employed by the Indemnifying Person, and such Indemnified Person will refrain
from making any public announcements in respect of such claim, suit, action or
proceeding or otherwise communicating with the news media without the prior
consent of the Indemnifying Person. Whether or not the Indemnifying Person
chooses to defend or prosecute any such claim, suit, action or proceeding, all
of the parties hereto shall cooperate in the defense or prosecution thereof.
Notwithstanding anything to the contrary set forth in this Agreement, Sellers
shall continue to control the defense of the Venezuelan Arbitration and the
prosecution of
the Peruvian Arbitration in all respects following the applicable Closing with
respect to the Venezuelan Arbitration Entities and the Peruvian Acquired
Companies.
10.7 SETTLEMENT OR COMPROMISE. Any settlement or compromise made or caused
to be made by the Indemnified Person (unless the Indemnifying Person has the
exclusive right to settle or compromise under CLAUSE (b) of SECTION 10.6) or the
Indemnifying Person, as the case may be, of any such claim, suit, action or
proceeding of the kind referred to in SECTION 10.6 shall also be binding upon
the Indemnifying Person or the Indemnified Person, as the case may be, in the
same manner as if a final judgment or decree had been entered by a court of
competent jurisdiction in the amount of such settlement or compromise; PROVIDED,
that (a) no obligation, restriction or Loss shall be imposed on the Indemnified
Person as a result of such settlement or compromise without its prior written
consent, which consent shall not be unreasonably withheld, and (b) the
Indemnified Person will not compromise or settle any claim, suit, action or
proceeding without the prior written consent of the Indemnifying Person, which
consent shall not be unreasonably withheld.
10.8 TIME LIMITS. Any right to indemnification or other recovery under this
ARTICLE X shall only apply to Losses with respect to which the Indemnified
Person shall have notified the Indemnifying Person within the applicable time
period set forth in SECTION 10.2 or 10.3, as the case may be. If any claim for
indemnification or other recovery is timely asserted under this ARTICLE X, the
Indemnified Person shall have the right to bring an action, suit or proceeding
with respect to such claim within one year after first giving the Indemnifying
Person notice thereof, but may not bring any such action, suit or proceeding
thereafter.
10.9 NET LOSSES AND SUBROGATION; OFFSET.
(a) Notwithstanding anything contained herein to the contrary, the amount of any
Losses incurred or suffered by any Indemnified Person shall be based on actual
Losses incurred and shall be calculated after giving effect to (i) any insurance
proceeds received by the Indemnified Person from any insurance policy provided
or maintained by or on behalf of the Acquired Companies, Sellers, Seller Parent
or any of their respective Affiliates with respect to such Losses, (ii) any net
Tax benefit realized by the Indemnified Person arising from the facts or
circumstances giving rise to such Losses and (iii) any recoveries obtained by
the Indemnified Person (or any of its Affiliates) from any other third party.
Each Indemnified Person shall exercise commercially reasonable efforts to obtain
such proceeds, benefits and recoveries, and to take all reasonable actions to
mitigate the amount of any Losses incurred or suffered by such Indemnified
Person. If any such proceeds, benefits or recoveries are received by an
Indemnified Person with respect to any Losses after an Indemnifying Person has
made a payment to the Indemnified Person with respect thereto, the Indemnified
Person shall promptly, but in any event no later than ten (10) Business Days
after the receipt, realization or recovery of such proceeds, benefits or
recoveries, pay to the Indemnifying Person the amount of such proceeds, benefits
or recoveries (up to the amount of the Indemnifying Person's payment).
(b) Upon making any payment to an Indemnified Person in respect of any Losses,
the Indemnifying Person will, to the extent of such payment, be subrogated to
all rights of the Indemnified Person against any third party in respect of the
Losses to which such payment
relates. Such Indemnified Person and Indemnifying Person will execute upon
request all instruments reasonably necessary to evidence or further perfect such
subrogation rights.
(c) If a judgment is rendered in favor of the Peruvian Acquired Companies or any
of their successors or Affiliates in the Peruvian Arbitration (the amount of any
such judgment, the "PERUVIAN ARBITRATION AWARD"), the entirety of the Peruvian
Arbitration Award shall be paid, or cause to be paid, by Purchaser to Sellers no
later than two (2) Business Days following receipt thereof by Purchaser of the
Peruvian Acquired Companies, as the case may be.
10.10 ADJUSTMENTS TO AGGREGATE SELLERS ALLOCATED PAYMENT. To the extent
permitted by Law, any amounts payable under SECTION 10.2, or SECTION 10.3 shall
be treated by Purchaser and Sellers as an adjustment to the Aggregate Sellers
Allocated Payment.
ARTICLE XI
SELLER PARENT GUARANTY
11.1 SELLERS GUARANTY.
(a) Seller Parent hereby unconditionally, absolutely, continuously and
irrevocably guarantees, as a primary obligor and not as a surety, to Purchaser
and any Purchaser Indemnified Person the due and punctual payment and
performance by each Seller of all of its covenants, agreements, obligations and
liabilities arising under or pursuant to this Agreement and the other Related
Agreements (or any of them), whether direct or indirect, absolute or contingent,
now or hereafter existing, or due or to become due (collectively, the "SELLERS
LIABILITIES").
(b) Neither Purchaser nor any Purchaser Indemnified Person shall be required to
prosecute collection or seek to enforce or resort to any remedies against any
Seller or any other Person liable to Purchaser or any Purchaser Indemnified
Person on account of Sellers Liabilities or any guaranty thereof. Sellers
Liabilities shall in no way be impaired, affected, reduced or released by reason
of (i) the failure or delay by Purchaser or any Purchaser Indemnified Person to
do or take any of the actions or things described in this Agreement or the other
Related Agreements, or (ii) the voluntary or involuntary liquidation,
dissolution, sale or other disposition of all or substantially all the assets of
any Seller or the marshaling of assets and liabilities, receivership,
insolvency, bankruptcy, assignment for the benefit of creditors, reorganization,
arrangement, composition with creditors or readjustment of, or other similar
proceedings or any other inability to pay or perform affecting, any Seller or
any of its respective assets, or any allegation concerning, or contest of the
legality or validity of, the indemnification obligations under this Agreement or
any of the other Related Agreements.
11.2 SELLER WAIVERS AND ACKNOWLEDGEMENTS.
(a) Seller Parent waives any and all right to assert against Purchaser or any
Purchaser Indemnified Person any claim or defense with respect to the legality,
validity or enforceability of this ARTICLE XI based upon any failure of
Purchaser or any Purchaser Indemnified Person to furnish to Seller Parent any
information or facts relating to the ability of any Sellers to pay and perform
the applicable Sellers Liabilities. Seller Parent acknowledges receipt of an
executed or conformed copy of each Related Agreement and agrees that such copy
constitutes adequate
notice of all matters contained therein and consents to the execution and
delivery of such agreements and the performance of all transactions provided for
or contemplated therein.
(b) Seller Parent waives all defenses, counterclaims and offsets of any kind or
nature in connection with the legality, validity and/or enforceability of this
ARTICLE XI, including any such defense, counterclaim or offset arising directly
or indirectly from any agreement, instrument or document executed and delivered
by any Sellers. Seller Parent waives presentment, demand, notice of dishonor,
protest and all other notices whatsoever, other than notices required by the
terms of this ARTICLE XI.
(c) Seller Parent waives any and all right to assert against Purchaser or any
Purchaser Indemnified Person any claim or defense based upon any election of
remedies by Purchaser or any Purchaser Indemnified Person which in any manner
impairs, affects, reduces, releases or extinguishes either Seller Parent's right
to proceed against any Seller for reimbursement or any other rights of Seller
Parent against any Seller or against any other Person.
(d) Seller Parent waives notice of the following events or occurrences, and
agrees that its guarantee obligations under this Agreement shall be continuing,
absolute and unconditional and shall remain in full force and effect until all
of the obligations of Sellers under this Agreement and the other Related
Agreements have been completely discharged irrespective of: (i) acceptance of
the provisions of this ARTICLE XI by Purchaser and any Purchaser Indemnified
Person; (ii) Purchaser or any Purchaser Indemnified Person heretofore, now or at
any time hereafter obtaining, releasing, waiving or modifying any other Person's
guaranty of Sellers Liabilities given to any of them; (iii) amendment or
modification of any of the Related Agreements, or waiver or release of any
provisions of the Related Agreements by Purchaser or any Purchaser Indemnified
Person; (iv) presentment, demand, notices of default, nonpayment, partial
payment and protest, and all other notices or formalities to which Seller Parent
may be entitled, other than notices required by the terms of this ARTICLE XI;
(v) Purchaser or any Purchaser Indemnified Person heretofore, now or at any time
hereafter, granting to any Seller (or any other Person liable to Purchaser or
any Purchaser Indemnified Person on account of Sellers Liabilities) any
indulgence or extension of time of payment of Sellers Liabilities; (vi)
Purchaser or any Purchaser Indemnified Person heretofore, now or at any time
hereafter, accepting from any Seller or any other Person any partial payment or
payments on account of Sellers Liabilities or Purchaser or any Purchaser
Indemnified Person settling, subordinating, compromising, discharging or
releasing the same; and (vii) any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a guarantor other than
the determination that all of Sellers' obligations have been paid in full in
cash.
(e) Notwithstanding anything herein to the contrary, Seller Parent shall be
entitled to the benefit of and may assert as a defense against any claim under
this Agreement any limitation, defense, set off or counterclaim that any Seller
could have asserted, other than defenses based upon or relating to (i) any
Seller's insolvency, bankruptcy or similar inability to pay or perform or (ii)
the due authorization, execution, delivery, enforceability or validity of this
Agreement or any of the other Related Agreements by or against any Seller.
11.3 REMEDIES. If Sellers Liabilities are not paid or performed forthwith by
Seller Parent to Purchaser or the applicable Purchaser Indemnified Person at
Purchaser's principal
place of business, Purchaser or the applicable Purchaser Indemnified Person may
proceed to arbitration against Seller Parent. At Purchaser's election, one or
more successive or concurrent arbitration proceedings may be brought hereunder
by Purchaser or any Purchaser Indemnified Person against Seller Parent, whether
or not an arbitration proceeding has been commenced against any Seller. In any
such arbitration proceeding any Seller may be joined (but need not be joined) as
a party with Seller Parent. In addition, subject to SECTION 12.14, Purchaser or
any Purchaser Indemnified Person may exercise any other right or remedy provided
by Law for breach of this Agreement by Seller Parent.
11.4 MERGERS, CONSOLIDATIONS, SALES.
(a) Seller Parent covenants that if it dissolves or otherwise disposes of all or
substantially all its assets or consolidates with or merges into another Person
or entity, then it will cause the surviving or successor Person to assume in
writing its obligations herein.
(b) If a consolidation, merger or sale or other transfer is made as permitted by
this SECTION 11.4, the provisions of this SECTION 11.4 shall continue in full
force and effect and no further consolidation, merger or sale or other transfer
shall be made except in compliance with the provisions of this SECTION 11.4.
ARTICLE XII
MISCELLANEOUS
12.1 EXPENSES. Each party hereto shall bear its own fees and expenses with
respect to the transactions contemplated hereby; PROVIDED, that Purchaser, on
the one hand, and Sellers, on the other hand, shall split the costs of all
Transfer Taxes.
12.2 AMENDMENT. Except as provided in SECTION 12.15, this Agreement may be
amended, modified or supplemented but only in writing signed by Purchaser and
Sellers.
12.3 NOTICES. Any notice, request, instruction or other document to be given
hereunder by a party hereto shall be in writing and shall be deemed to have been
given, (a) when received if given in person or by courier or a courier service
or (b) on the date of transmission if sent by telex, facsimile or other wire
transmission (receipt confirmed) on a Business Day during or before the normal
business hours of the intended recipient, and if not so sent on such a day and
at such a time, on the following Business Day:
(i) If to Purchaser, addressed as follows:
Telefonica Moviles, X.X.
Xxxx, 00, xxxxxx 0x
00000 Xxxxxx
Xxxxx
Attention: President
Facsimile: 00-00-000-0000
with a copy to:
Telefonica Moviles, X.X.
Xxxx, 00, xxxxxx 0x
00000 Xxxxxx
Xxxxx
Attention: General Counsel
Facsimile: 00-00-000-0000
with a copy to:
Winston & Xxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxxxx
Facsimile: 212.294.4700
(ii) If to the Seller Representative, addressed as follows:
BellSouth Corporation
0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxxx
Facsimile: 404.249.4740
with a copy to:
BellSouth Corporation
0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxx, XX 00000
Attention: General Counsel
Facsimile: 404.249.5901
or to such other individual or address as a party hereto may designate for
itself by notice given as herein provided.
12.4 PAYMENTS IN DOLLARS. Except as otherwise provided herein or in a
Related Agreement, all payments pursuant hereto or contemplated hereby shall be
made by wire transfer in Dollars in same day or immediately available funds
without any set-off, deduction or counterclaim whatsoever.
12.5 WAIVERS. The failure of a party hereto at any time or times to require
performance of any provision hereof shall in no manner affect its right at a
later time to enforce the same. No waiver by a party of any condition or of any
breach of any term, covenant, representation or warranty contained in this
Agreement shall be effective unless in writing, and no waiver in any one or more
instances shall be deemed to be a further or continuing waiver of any such
condition or breach in other instances or a waiver of any other condition or
breach of any other term, covenant, representation or warranty.
12.6 ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns; PROVIDED, that no assignment of any rights or obligations hereunder, by
operation of law or otherwise, shall be made by either party without the written
consent of the other parties except Purchaser may assign its rights or interests
hereunder or delegate its obligations hereunder to any of its Affiliates
organized in Spain, PROVIDED that (x) any such Affiliate agrees in writing to be
bound by all of the terms, conditions and provisions contained herein, and (y)
Purchaser shall remain liable for all such delegated obligations under this
Agreement.
12.7 NO THIRD PARTY BENEFICIARIES. This Agreement is solely for the benefit
of the parties hereto and, to the extent provided herein, their respective
Affiliates, and no provision of this Agreement shall be deemed to confer upon
other third parties any remedy, claim, liability, reimbursement, cause of action
or other right.
12.8 PUBLICITY. Prior to the Initial Closing Date, no public announcement or
other publicity regarding the existence of this Agreement or its contents or the
transactions contemplated hereby shall be made by Purchaser, Sellers or any of
their respective Affiliates, officers, directors, employees, representatives or
agents, without the prior written agreement of Purchaser and Sellers, in any
case, as to form, content, timing and manner of distribution or publication. On
and after the Initial Closing Date, each of Sellers and Purchaser agree to hold
confidential the terms and provisions of this Agreement and the terms of the
transactions contemplated hereby. Notwithstanding the foregoing, nothing in this
SECTION 12.8 shall prevent either party from (a) making any public announcement
or disclosure required by Law or the rules of any stock exchange, (b) discussing
this Agreement or its contents or the transactions contemplated hereby with
those Persons whose approval, agreement or opinion, as the case may be, is
required for consummation of such particular transaction or transactions or (c)
enforcing its rights hereunder.
12.9 FURTHER ASSURANCES. From time to time after the Initial Closing and any
Subsequent Closing, at the reasonable request of either party, the other party
shall promptly execute and deliver all other reasonable documents and take all
further reasonable actions in order to effectuate completely the transfer and
assignment to Purchaser of the Holding Company Equity Interests or the Sellers
Equity Interests, as the case may be, and to otherwise carry out the purposes of
this Agreement.
12.10 SEVERABILITY. If any provision of this Agreement shall be held invalid,
illegal or unenforceable, the validity, legality or enforceability of the other
provisions hereof shall not be affected thereby, and there shall be deemed
substituted for the provision at issue a valid, legal and enforceable provision
as similar as possible to the provision at issue.
12.11 ENTIRE UNDERSTANDING. This Agreement and the Related Agreements set
forth the entire agreement and understanding of the parties hereto with respect
to the transactions contemplated hereby and supersede any and all prior
agreements, arrangements and understandings among the parties relating to the
subject matter hereof, excluding the Confidentiality Agreement, which remains in
full force and effect.
12.12 LANGUAGE. The parties agree that the language used in this Agreement is
the language chosen by the parties to express their mutual intent, and that no
rule of strict construction is to be applied against any of the parties.
12.13 APPLICABLE LAW. This Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of New York without
giving effect to the principles of conflicts of law thereof.
12.14 ARBITRATION.
(a) Except as otherwise provided in SECTION 2.4, any dispute or claim arising
out of, relating to, or having any connection with this Agreement shall be
exclusively and finally settled by arbitration in accordance with the Rules of
Arbitration and Conciliation of the International Chamber of Commerce then in
effect (the "ICC RULES").
(b) The situs of the arbitration shall be New York, New York, unless the parties
agree otherwise. The arbitration shall be conducted in the English language. All
documents and testimony offered into evidence during the arbitration shall be
offered in the English language and, if necessary, shall be translated into
English at the expense of the party offering the evidence.
(c) The arbitral tribunal shall have no power to alter or modify any terms or
provisions of this Agreement, or to render any award which, by its terms or
effects, would alter any term or provision of this Agreement or to act as
amiable compositeur or ex aequo et xxxx. The arbitral tribunal shall, however,
have the exclusive authority to decide the scope of its own jurisdiction and the
scope of the arbitral proceedings.
(d) The arbitral tribunal shall be composed of three arbitrators to be selected
in accordance with the ICC Rules.
(e) Notwithstanding SECTION 12.1, the prevailing party shall be entitled to
recover its attorneys' fees, and expenses for the arbitration proceedings, as
well as for any ancillary proceeding, including a proceeding to compel or enjoin
the arbitration, to request interim measures, or to confirm or set aside an
award. The losing party shall bear all costs of the arbitration proceedings,
including all fees and expenses of the arbitrators. The arbitral panel shall be
the exclusive judge of whether a party qualifies as a prevailing party for
purposes of this provision.
(f) The award may include interest from the date of any breach or violation of
this Agreement, as determined by the arbitral tribunal, until paid in full, at
the interest rate established in the award. Interest may be compounded at the
discretion of the arbitral tribunal.
(g) The award shall be in writing and state the reasons upon which it is based.
Any monetary award shall be made in Dollars. The award shall be final and
binding on the parties. Judgment on the award may be entered by any court having
jurisdiction over the person or the property of the person against whom
enforcement of the judgment is sought.
(h) For purposes of this SECTION 12.14, each of the parties to this Agreement
hereby irrevocably submits and consents to the jurisdiction of the federal
courts of New York, New York.
(i) No arbitration under this Agreement shall include, by consolidation, joinder
or any other manner, any person or entity not a party to this Agreement, unless
(i) the dispute involving the person or entity is substantially related to the
dispute being arbitrated under this Agreement and involves a common question of
fact or law, and (ii) the presence of such person or entity is required if
complete relief is to be accorded in the arbitration. If a separate arbitration
is commenced between any of the parties to this Agreement under any Related
Agreement, it shall be consolidated with any arbitration pending under this
Agreement, unless the arbitral tribunal determines that justice requires that
such arbitrations not be consolidated.
12.15 SCHEDULES. Any information disclosed pursuant to any Schedule hereto or
to the Additional Representations Certificate shall be deemed to be disclosed to
Purchaser for all purposes of this Agreement. Neither the specification of any
Dollar amount in any representation or warranty contained in this Agreement nor
the inclusion of any specific item or matter in any Schedule hereto or to the
Additional Representations Certificate is intended to imply that such amount, or
higher or lower amounts, or the item or matter so included or other items or
matters, are or are not material, and no party shall use the fact of the setting
forth of any such amount or the inclusion of any such item or matter in any
dispute or controversy between the parties as to whether any obligation, item or
matter not described herein or included in any Schedule hereto or to the
Additional Representations Certificate is or is not material for purposes of
this Agreement. Unless this Agreement specifically provides otherwise, neither
the specification of any item or matter in any representation or warranty
contained in this Agreement nor the inclusion of any specific item or matter in
any Schedule hereto or to the Additional Representations Certificate is intended
to imply that such item or matter, or other items or matters, are or are not in
the ordinary course of business, and no party shall use the fact of the setting
forth or the inclusion of any such item or matter in any dispute or controversy
between the parties as to whether any obligation, item or matter not described
herein or included in any Schedule hereto or to the Additional Representations
Certificate is or is not in the ordinary course of business for purposes of this
Agreement. Sellers may, from time to time prior to or at the Initial Closing or
any Subsequent Closing, by notice in accordance with the terms of this
Agreement, supplement or amend any Schedule, including one or more supplements
or amendments to correct any matter which would constitute a breach of any
representation, warranty, covenant or obligation contained herein. No such
supplemental or amended Schedule shall be deemed to cure any breach for purposes
of SECTION 7.2(a). If, however, the Initial Closing and any Subsequent Closing
occurs, any such supplement and amendment will be effective to cure and correct
for all other purposes any breach of any representation, warranty, covenant or
obligation which would have existed if Seller had not made such supplement or
amendment, and all references to any Schedule hereto which is supplemented or
amended as provided in this SECTION 12.15 shall for all purposes after the
applicable Closing be deemed to be a reference to such Schedule as so
supplemented or amended.
12.16 MUTUAL RELEASE.
(a) As of each Closing Date, Purchaser shall, and shall cause the Acquired
Companies that are the subject of such Closing to, voluntarily and
unconditionally release and forever discharge the Sellers and their respective
successors, assigns, parents, subsidiaries and other Affiliates, and all of
their respective current and former officers, directors, employees, agents and
representatives from any and all actions, causes of action, suits, debts, claims
and demands of the Acquired Companies, Purchaser or their Affiliates, related to
the Acquired Companies or their subsidiaries or Affiliates, or their businesses
(except for rights or obligations arising under this Agreement or the Related
Agreements, including, under ARTICLE X, and fraud and willful misconduct,) that
arise out of acts, events, conditions or omissions occurring or existing from
the time any such Acquired Company (or any predecessor of any such Acquired
Company) was formed or otherwise organized to and including, with respect to any
Acquired Company, the Closing Date.
(b) As of each Closing Date, Sellers shall voluntarily and unconditionally
release and forever discharge Purchaser and the Acquired Companies that are the
subject of such Closing from any and all actions, causes of action, suits,
debts, claims and demands of the Sellers related to such Acquired Companies or
their businesses (except for rights or obligations arising under this Agreement
or the Related Agreements, including under ARTICLE X, and fraud and willful
misconduct) that arise out of acts, events, conditions or omissions occurring or
existing from the time any such Acquired Company (or any predecessor of any such
Acquired Company) was formed or otherwise organized to and including, with
respect to any Acquired Company, the applicable Closing Date.
12.17 SELLER REPRESENTATIVE.
(a) Each Seller hereby appoints Seller Parent as its representative ("SELLER
REPRESENTATIVE"). Seller Parent hereby accepts such appointment and agrees to
perform all of the duties of the Seller Representative provided hereunder.
(b) Each Seller hereby authorizes the Seller Representative to make all
decisions and take all actions on its behalf to administer the transactions
contemplated hereby (except to the extent that this Agreement specifically
requires Purchaser to deal directly with a particular Seller or if the Seller
Representative otherwise instructs Purchaser to deal directly with one or more
Sellers), including (i) the receipt from Purchaser of all payments made by
Purchaser to Sellers pursuant to this Agreement, (ii) giving and receiving of
notices to be given or received by any Seller, and (iii) the contest, defense or
settlement of any claims for which any Seller may be required or requested to
indemnify Purchaser pursuant to SECTION 10.2. All decisions and actions by the
Seller Representative permitted by this Agreement shall be binding upon all of
the Sellers, and no Seller shall have any right to object, dissent, protest or
otherwise contest the same.
(c) The provisions of this SECTION 12.17 are irrevocable and coupled with an
interest and shall be enforceable notwithstanding any rights or remedies that
any Seller may have in connection with the transactions contemplated by this
Agreement.
12.18 COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
* * *
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date first above written.
TELEFONICA MOVILES, S.A.
By: /s/ Xxxxxxx Xxxxx Xxxxxxxx
Name: Xxxxxxx Xxxxx Xxxxxxxx
Title: Chairman and Chief Executive Officer
BellSouth International, Inc.
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Authorized signatory
BellSouth Enterprises, Inc.
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Vice President of Corporate Development
BellSouth International Latin America, Inc.
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Authorized signatory
BellSouth Argentina Holdings, LLC
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: on behalf of its member, BellSouth
Enterprises, Inc.
Signature Page to Stock Purchase Agreement
BellSouth Chile, Inc.
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Authorized signatory
BellSouth Chile Holdings, Inc.
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Authorized signatory
BELLSOUTH CORPORATION,
For purposes of the Sections and Articles
identified in the Preamble only
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Vice President of Corporate Development
Signature Page to Stock Purchase Agreement
