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EXHIBIT 10.5
JOINT VENTURE AGREEMENT
BY AND AMONG
XXXXX INTERNATIONAL, LTD.,
XXXXX INTERNATIONAL (DELAWARE), LTD.,
XXXXX INTERNATIONAL (HOLDINGS), LTD.,
XXXXX INTERNATIONAL (ARGENTINA) LLC,
TELCOM VENTURES, LLC
AND
WIRELESS VENTURES OF ARGENTINA, L.L.C.
dated as of October 28, 1996
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS.......................................................................................2
1.1 Defined Terms...................................................................................2
1.2 Other Definitional Matters......................................................................5
ARTICLE II THE JOINT VENTURE................................................................................5
2.1 Establishment of the Joint Venture..............................................................5
2.1.1 Corporate Structure...........................................................................5
2.1.2 Transfers.....................................................................................6
2.1.3 Memorandum of Association.....................................................................7
2.1.4 Articles of Association.......................................................................7
2.2 Closing.........................................................................................7
2.3 Post-Closing Adjustments........................................................................7
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE MIL PARTIES..............................................10
3.1 Organization, Good Standing, Etc...............................................................10
3.2 Authorization, Due Execution and Binding Effect................................................10
3.3 No Approvals or Notices Required; No Conflicts With Instruments................................10
3.4 Licenses, Permissions, Permits, Authorizations, Etc............................................11
3.5 Capitalization of the MIL Parties..............................................................11
3.6 Ownership of Capital Stock of MIL Parties......................................................12
3.7 Financial Statements...........................................................................12
3.8 Absence of Certain Changes.....................................................................12
3.9 Liabilities....................................................................................14
3.10 Intercompany Transactions.....................................................................14
3.11 Taxes.........................................................................................14
3.12 Assets........................................................................................14
3.13 Channels......................................................................................15
3.14 Compliance With Environmental Laws............................................................15
3.15 Contracts.....................................................................................16
3.16 Claims and Legal Proceedings..................................................................16
3.17 Labor Matters.................................................................................16
3.18 Patents, Trademarks, Etc......................................................................17
3.19 Customers.....................................................................................18
3.20 Applicable Laws...............................................................................19
3.21 Insurance.....................................................................................19
3.22 Brokerage.....................................................................................19
3.23 Full Disclosure...............................................................................19
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF TELCOM AND WVA................................................20
4.1 Organization, Good Standing, Etc...............................................................20
4.2 Authorization, Due Execution and Binding Effect................................................20
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4.3 No Approvals or Notices Required; No Conflicts With Instruments................................20
4.4 Licenses, Permissions, Permits, Authorizations, Etc............................................21
4.5 Capitalization of WVA and WVA Subsidiaries.....................................................21
4.6 Ownership of WVA Common Stock and Capital Stock of WVA Subsidiaries............................22
4.7 Financial Statements...........................................................................22
4.8 Absence of Certain Changes.....................................................................22
4.9 Liabilities....................................................................................23
4.10 Intercompany Transactions.....................................................................24
4.11 Taxes.........................................................................................24
4.12 Assets........................................................................................24
4.13 Channels......................................................................................25
4.14 Compliance With Environmental Laws............................................................26
4.15 Contracts.....................................................................................26
4.16 Claims and Legal Proceedings..................................................................26
4.17 Labor Matters.................................................................................26
4.18 Patents, Trademarks, Etc......................................................................28
4.19 Customers.....................................................................................28
4.20 Applicable Laws...............................................................................29
4.21 Insurance.....................................................................................29
4.22 Brokerage.....................................................................................29
4.23 Full Disclosure...............................................................................29
ARTICLE V FURTHER AGREEMENTS...............................................................................30
5.1 Schedules......................................................................................30
5.2 Access.........................................................................................30
5.3 Advice of Claims...............................................................................31
5.4 Conduct of Business............................................................................31
5.4.1 Conduct of WVA Business......................................................................31
5.4.2 Conduct of XxXxx X.X. Business...............................................................31
5.5 Compliance With Laws...........................................................................32
5.6 Insurance and Loss of or Damage to Assets......................................................32
5.7 Confidentiality................................................................................32
5.8 Other Cooperation..............................................................................33
ARTICLE VI CONDITIONS PRECEDENT TO OBLIGATIONS OF THE MIL PARTIES..........................................33
6.1 Accuracy of Representations and Warranties.....................................................33
6.2 Performance of Agreement.......................................................................33
6.3 Approvals and Consents.........................................................................33
6.4 Shareholders Agreement.........................................................................34
6.5 Opinions of Telcom's Counsel...................................................................34
6.6 Confidentiality, Noncompetition and Proprietary Information Agreements.........................34
6.7 Legal Proceedings..............................................................................34
6.8 Title..........................................................................................34
6.9 Telcom and WVA Officers' Certificates..........................................................34
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6.10 Documentation Relating to WVA Licenses........................................................34
6.11 Intercompany Transactions.....................................................................35
6.12 Employees and Directors.......................................................................35
6.13 Brazil........................................................................................35
ARTICLE VII CONDITIONS PRECEDENT TO OBLIGATIONS OF THE WVA SECURITYHOLDERS AND WVA.........................35
7.1 Accuracy of Representations and Warranties.....................................................35
7.2 Performance of Agreement.......................................................................35
7.3 Approvals and Consents.........................................................................36
7.4 Shareholders Agreement.........................................................................36
7.5 MIL Officers' Certificate......................................................................36
7.6 Legal Proceedings..............................................................................36
7.7 Opinions of MIL Counsel........................................................................36
7.8 Title..........................................................................................36
7.9 Documentation Relating to XxXxx X.X. Licenses..................................................36
7.10 Intercompany Transactions.....................................................................36
7.11 Brazil........................................................................................37
7.12 Confidentiality, Noncompetition and Proprietary Information Agreements........................37
ARTICLE VIII INDEMNIFICATION AND SURVIVAL OF WARRANTIES....................................................37
8.1 Indemnification by WVA Securityholders.........................................................37
8.2 Indemnification by MIL.........................................................................38
8.3 Procedure......................................................................................38
8.4 Form of Payment................................................................................39
8.5 Survival.......................................................................................39
ARTICLE IX TERMINATION.....................................................................................39
9.1 Termination....................................................................................39
9.2 Effect of Termination..........................................................................41
ARTICLE X GENERAL..........................................................................................41
10.1 Expenses......................................................................................41
10.2 Amendment.....................................................................................42
10.3 Headings......................................................................................42
10.4 Applicable Law................................................................................42
10.5 Parties in Interest...........................................................................42
10.6 Waivers.......................................................................................43
10.7 Notices.......................................................................................43
10.8 Counterparts..................................................................................44
10.9 Entire Understanding..........................................................................44
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SCHEDULES
3.1 Organization of the MIL Parties
3.3 Approvals and Conflicts
3.4 Additional Payments and Fees
3.5 Capitalization of the MIL Parties
3.8 Certain Changes or Events
3.9 Undisclosed Material Liabilities
3.10 Intercompany Balances
3.11 Taxes
3.12(a) Leases
3.12(b) Real Property
3.12(d) Liens
3.13 Channels
3.15 Contracts
3.16 Claims and Legal Proceedings
3.17 Labor Matters
3.18 Patents, Trademarks, Etc.
3.19 Customers
4.1 Organization of WVA and WVA Subsidiaries
4.3 Approvals and Conflicts
4.4 Additional Payments and Fees
4.5 Capitalization of WVA and WVA Subsidiaries
4.8 Certain Changes or Events
4.9 Undisclosed Material Liabilities
4.10 Intercompany Balances
4.11 Taxes
4.12(a) Leases
4.12(b) Real Property
4.12(d) Liens
4.13 Channels
4.15 Contracts
4.16 Claims and Legal Proceedings
4.17 Labor Matters
4.18 Patents, Trademarks, Etc.
4.19 Customers
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EXHIBITS
6.4 Form of Shareholders Agreement
6.5 Form of Opinion of Telcom's Counsel
6.6 Form of Confidentiality, Noncompetition and Proprietary
Information Agreement
6.9 Form of Telcom and WVA Officers' Certificates
7.5 Form of MIL Officers' Certificates
7.7 Form of Opinions of MIL's Counsel
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JOINT VENTURE AGREEMENT
THIS JOINT VENTURE AGREEMENT (this "Agreement") is made and entered
into as of this 28th day of October, 1996 by and among XxXxx International,
Ltd., a Washington corporation ("MIL"), XxXxx International (Delaware), Ltd., a
Delaware corporation and wholly owned subsidiary of MIL ("MIL Delaware"), XxXxx
International (Holdings), Ltd., a Cayman Islands company and wholly owned
subsidiary of MIL Delaware ("MIL Holdings"), XxXxx International (Argentina)
LLC, a Cayman Islands limited liability company owned 99% by MIL Holdings and
1% by MIL Delaware ("MIL Argentina") (MIL, MIL Delaware, MIL Holdings and MIL
Argentina being referred to individually as a "MIL Party" and collectively as
the "MIL Parties"), Telcom Ventures, LLC, a Delaware limited liability company
("Telcom"), and Wireless Ventures of Argentina, L.L.C., a Delaware limited
liability company and 70%-owned subsidiary of Telcom ("WVA").
RECITALS
A. MIL Argentina and MIL Holdings together own 100% of the capital
stock of XxXxx Argentina S.A., an Argentina corporation ("XxXxx X.X."). XxXxx
X.X. has a license to be engaged in the business of Specialized Mobile Radio
("SMR") in certain cities in Argentina and is authorized to use 100 SMR
channels in each of Buenos Aires, Xxxxxxx, Cordoba and Xxxxxxx (collectively,
the "XxXxx X.X. Channels") in the conduct of its business (the "XxXxx X.X.
Business").
B. Telcom and the other members of WVA (together with Telcom, the "WVA
Securityholders") collectively own 100% of the membership interests of WVA. WVA
owns 100% of the capital stock of (i) AirLink S.A., an Argentina corporation
("AirLink"), which owns certain paging and SMR assets in Argentina and has
employed certain individuals having expertise in the administration and billing
of telecommunication services, (ii) Communication Services S.A., an Argentina
corporation ("CSSA"), which has a paging license valid throughout Argentina and
an SMR license and is authorized to use 20 SMR channels in each of Mar del
Plata and Tucuman, Argentina (the "CSSA Channels") and owns certain paging
assets, and (iii) Buenos Aires Trunking S.A., an Argentina corporation
("BATSA"), which is authorized to use 80 SMR channels in Buenos Aires and 100
SMR channels in each of Xxxxxxx, Xxxxxxx and Xxxxxxx (the "BATSA Channels").
AirLink, CSSA and BATSA are referred to collectively herein as the "WVA
Subsidiaries." MIL, MIL Holdings, Telcom and WVA are simultaneously herewith
entering into a purchase agreement relating to a proposed joint venture of MIL,
Telcom and their respective Affiliates in the business of paging in Argentina
(the "Paging Agreement").
C. Telcom and MIL believe it is advisable and in their
respective best interest to effect a merger of Telcom's interests in the WVA
Subsidiaries and MIL's interest in XxXxx X.X. (the "Merger") on the terms and
conditions provided in this Agreement.
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AGREEMENT
In consideration of the terms hereof, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
1.1 DEFINED TERMS
As used in this Agreement, the following terms shall have the
following meanings:
"Accountants" has the meaning set forth in Section 2.3(e).
"Affiliate" of a Person means any Person which directly or
indirectly Controls, is under common Control with, or is Controlled by, such
Person.
"Agreement" has the meaning set forth in the introductory
paragraph.
"AirLink" has the meaning set forth in the Recitals.
"Authorization" has the meaning set forth in Section 2.1.2.
"BATSA" has the meaning set forth in the Recitals.
"BATSA Channels" has the meaning set forth in the Recitals.
"Claims" has the meaning set forth in Section 3.16.
"Closing" has the meaning set forth in Section 2.2.
"Closing Date" has the meaning set forth in Section 2.1.2.
"CNT" means the Comision Nacional de Telecomunicaciones of
Argentina.
"Confidentiality Agreement" has the meaning set forth in
Section 5.7.
"Contract" has the meaning set forth in Section 9.1.
"Contracting Party" has the meaning set forth in Section 9.1.
"Control" (including, with correlative meanings, the terms
"Controlled by" and "under common Control with"), when used with respect to any
Person or Affiliate, means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities or by contract or otherwise.
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"CSSA" has the meaning set forth in the Recitals.
"CSSA Channels" has the meaning set forth in the Recitals.
"Damages" has the meaning set forth in Section 8.1.
"Government Approval" of any action to be taken by either
party means such approval of or confirmation or consent to such action,
together with such licenses, permits or other permissions reasonably required
for such action, all as the statutes, decrees, regulations and rulings of
governmental authority (collectively, "Legal Authority") within Argentina or
the United States, as the case may be, may require to be obtained in connection
with said action from such governmental authority or from political
subdivisions thereof. Whenever any form of "Government Approval" is used
herein, it shall be interpreted and construed to include the requirement that
such approval be in form and substance acceptable to the parties.
"Indemnifying Party" has the meaning set forth in Section
8.3.
"Indemnitee" has the meaning set forth in Section 8.3.
"Invested Capital" has the meaning set forth in Section
2.1.2(b).
"knowledge of MIL" means, with respect to the existence or
absence of a fact, matter, event or circumstance, the actual knowledge of any
director or officer of any of the MIL Parties.
"knowledge of Telcom" means, with respect to the existence or
absence of a fact, matter, event or circumstance, the actual knowledge of any
director or officer of any of the WVA Securityholders, WVA or the WVA
Subsidiaries.
"Lien" means, with respect to any property or asset, any
mortgage, lien, pledge, deed of trust, charge, security interest, encumbrance
or other adverse claim of any kind with respect to such property or asset.
"XxXxx X.X." has the meaning set forth in the Recitals.
"XxXxx X.X. Assets" means the XxXxx X.X. Channels, XxXxx X.X.
Licenses and all other assets owned by XxXxx X.X.
"XxXxx X.X. Business" has the meaning set forth in the
Recitals.
"XxXxx X.X. Channels" has the meaning set forth in the
Recitals.
"XxXxx X.X. Licenses" has the meaning set forth in Section
3.4.
"XxXxx X.X. Personal Property" has the meaning set forth in
Section 3.12(a).
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"Merger" has the meaning set forth in the Recitals.
"MIL" has the meaning set forth in the introductory
paragraph.
"MIL Argentina" has the meaning set forth in the introductory
paragraph.
"MIL Argentina Financial Statements" has the meaning set
forth in Section 3.7.
"MIL Argentina Securities" has the meaning set forth in
Section 3.5.
"MIL Closing Balance Sheet" has the meaning set forth in
Section 2.3(a).
"MIL Delaware" has the meaning set forth in the introductory
paragraph.
"MIL Holdings" has the meaning set forth in the introductory
paragraph.
"MIL Invested Capital" has the meaning set forth in Section
2.1.2(b).
"MIL Party" has the meaning set forth in the introductory
paragraph.
"MIL Working Capital Excess" has the meaning set forth in
Section 2.3(b).
"Permitted Liens" has the meaning set forth in Section
3.12(d).
"Person" means any individual, corporation, partnership,
firm, joint venture, association, limited liability company, trust,
unincorporated organization or other entity.
"Shareholders Agreement" has the meaning set forth in Section
6.4.
"Shortfall" has the meaning set forth in Section 2.3(h).
"SMR" has the meaning set forth in the Recitals.
"Tax Authorities" has the meaning set forth in Section 3.11.
"Taxes" has the meaning set forth in Section 3.11.
"Telcom" has the meaning set forth in the introductory
paragraph.
"Telcom Invested Capital" has the meaning set forth in
Section 2.1.2(b).
"True-Up" has the meaning set forth in Section 2.1.2(b).
"WVA" has the meaning set forth in the introductory
paragraph.
"WVA Assets" has the meaning set forth in Section 4.3.
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"WVA Business" means the businesses of AirLink, CSSA and
BATSA.
"WVA Channels" means the CSSA Channels, the BATSA Channels,
and any paging channels which WVA, BATSA, CSSA or AirLink are authorized to
use.
"WVA Closing Balance Sheet" has the meaning set forth in
Section 2.3(a).
"WVA Financial Statements" has the meaning set forth in
Section 4.7.
"WVA Licenses" has the meaning set forth in Section 4.4.
"WVA Personal Property" has the meaning set forth in Section
4.12(a).
"WVA Securityholders" has the meaning set forth in the
Recitals.
"WVA Subsidiaries" has the meaning set forth in the Recitals.
"WVA Working Capital Excess" has the meaning set forth in
Section 2.3(b).
1.2 OTHER DEFINITIONAL MATTERS
(a) The words "this Agreement," "hereby," "herein," "hereof,"
"hereunder" and words of similar import refer to this Agreement as a whole and
not to any particular provisions of this Agreement, and the words "Article,"
"Section," "Schedule," "Exhibit" and like references are to this Agreement
unless otherwise specified.
(b) Singular and plural forms, as the case may be, of terms
defined herein have correlative meanings.
(c) Any defined term which relates to a document includes within its
definition any amendments, modifications, renewals, restatements, extensions,
supplements or substitutions which may heretofore have been or which may
hereafter be executed in accordance with the terms thereof and as may be
permitted by this Agreement.
ARTICLE II
THE JOINT VENTURE
2.1 ESTABLISHMENT OF THE JOINT VENTURE
2.1.1 CORPORATE STRUCTURE
The parties acknowledge that the apparent preferred structure for the
transactions contemplated hereby is (in descending order of preference): (i) a
business combination of the parties' respective Argentina operating companies
pursuant to a joint venture, merger or partnership; (ii) the creation of a
non-U.S. entity to which the parties would contribute their
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respective Argentina holdings; (iii) the acquisition by each party of a 50%
interest in the other party's operating companies in Argentina; or (iv) a
business combination of the parties' respective Argentina holding companies
outside of the United States and outside of Argentina. In the event that a party
(the "First Party") to this Agreement shall determine prior to Closing that the
structure of the transaction contemplated hereby can be accomplished by means of
an alternate structure that is more tax-efficient for such party, or that does
not require governmental or other approvals, and if such alternate structure is
advantageous or neutral to the other party, then the First Party shall propose
to restructure the alternate structure. If the parties are unable to agree on an
alternate structure after negotiating in good faith, then the transaction shall
be consummated using the structure described in clause (i) of this Section
2.1.1.
2.1.2 TRANSFERS
On a date (the "Closing Date") as soon as reasonably practicable after
the date of effectiveness of an Argentine regulation or authorization issued by
the competent Argentine authority allowing one Person or group of Persons under
common Control to own at least 200 SMR channels in a single Argentine city (the
"Authorization"), the following shall occur simultaneously, upon the terms and
subject to the conditions of this Agreement:
(a) MIL and Telcom shall implement the structure
mutually agreed upon pursuant to Section 2.1.1.
(b) MIL Holdings or Telcom, as the case may be, shall
contribute cash (the "True-Up") to MIL Argentina, such that after such cash
capital contribution, (i) the sum of (x) $10,000,000 (the value of the XxXxx
X.X. Assets as of the date hereof), (y) all cash equity investments by MIL and
its Affiliates in XxXxx X.X. and the Paging Joint Venture, less any cash
dividends or other cash or noncash distributions to MIL Holdings and its
Affiliates by XxXxx X.X. and the Paging Joint Venture, in each case between the
date hereof and the Closing Date, and (z) the True-Up paid by MIL Holdings, if
any (the "MIL Invested Capital"), is equal to (ii) the sum of (x) $10,000,000
(the value of the WVA Assets as of the date hereof), (y) all cash equity
investments by the WVA Securityholders and their Affiliates in the WVA
Subsidiaries and the Paging Joint Venture, less any cash dividends or other
cash or noncash distributions to the WVA Securityholders and their Affiliates
by WVA and the Paging Joint Venture, in each case between the date hereof and
the Closing Date, and (z) the True-Up paid by Telcom, if any (the "Telcom
Invested Capital"; together with the MIL Invested Capital, the "Invested
Capital"); provided that "Invested Capital" shall exclude contributed services
or intangible rights in excess of the cash would have been paid to the party
contributing such services or rights in an arm's-length transaction with a
non-affiliate.
(c) The note payable by MIL Argentina to WVA in
connection with the joint venture in the Paging Agreement shall have been
cancelled.
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On the Closing Date, neither MIL Argentina nor WVA shall have any
consolidated long-term liabilities; the consolidated current liabilities of MIL
Argentina shall not exceed the consolidated current assets of MIL Argentina by
more than $1,000,000, and the consolidated current liabilities of WVA shall not
exceed the consolidated current assets of WVA by more than $1,000,000.
2.1.3 MEMORANDUM OF ASSOCIATION
On the Closing Date, the Shareholders of MIL Argentina shall cause the
Memorandum of Association of MIL Argentina to be amended as necessary to effect
the transactions contemplated by this Agreement and the Shareholders Agreement,
and shall be the Memorandum of Association of MIL Argentina after the Closing
Date until duly amended.
2.1.4 ARTICLES OF ASSOCIATION
On the Closing Date, the members of MIL Argentina shall cause the
Articles of Association of MIL Argentina to be amended as necessary to effect
the transactions contemplated by this Agreement and the Shareholders Agreement,
and shall be the Articles of Association of MIL Argentina after the Closing
Date until duly amended.
2.2 CLOSING
The closing (the "Closing") of the transactions contemplated hereby
shall take place at the offices of MIL, 0000 Xxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxxxxx, xx the Closing Date, a date within five business days
following satisfaction or waiver of the conditions set forth in Article VII or
at such other place or time as MIL and Telcom may agree.
2.3 POST-CLOSING ADJUSTMENTS
(a) As promptly as practicable, but no later than 30 days after the
Closing Date, MIL shall provide to Telcom (i) a statement certifying its
calculation of MIL Invested Capital and (ii) a consolidated balance sheet of
MIL Argentina and XxXxx X.X. as of the Closing Date (the "MIL Closing Balance
Sheet), both of which shall have been reviewed by MIL Argentina's regular
independent accountants, together with detailed support for such calculation,
and Telcom shall provide to MIL (i) a statement certifying its calculation of
Telcom Invested Capital and (ii) a consolidated balance sheet of WVA and the
WVA Subsidiaries as of the Closing Date (the "WVA Closing Balance Sheet"), both
of which shall have been reviewed by KPMG Peat Marwick, together with detailed
support for such calculation. All calculations shall be derived from the
consolidated financial statements of MIL Argentina and WVA, which shall have
been prepared in accordance with U.S. generally accepted accounting principles
and with accounting policies and practices consistent with those used in
preparation of the MIL Argentina Financial Statements and the WVA Financial
Statements, respectively. MIL Argentina's regular independent accountants shall
verify that MIL had no liabilities and KPMG Peat Marwick shall verify that WVA
had no liabilities, in each case as of the Closing Date.
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(b) To the extent that the MIL Closing Balance Sheet indicates that
the consolidated current liabilities of MIL Argentina and XxXxx X.X. exceeded
the consolidated current assets of MIL Argentina and XxXxx X.X. as of the
Closing Date by more than US$1,000,000 (any such excess being referred to
herein as the "MIL Working Capital Excess"), MIL shall pay MIL Argentina the
MIL Working Capital Excess in cash within 15 days of MIL's delivery of the MIL
Closing Balance Sheet. To the extent that the WVA Closing Balance Sheet
indicates that the consolidated current liabilities of WVA and the WVA
Subsidiaries exceeded the consolidated current assets of WVA and the WVA
Subsidiaries as of the Closing Date by more than US$1,000,000 (any such excess
being referred to herein as the "WVA Working Capital Excess"), Telcom shall pay
MIL Argentina the WVA Working Capital Excess in cash within 15 days of Telcom's
delivery of the WVA Closing Balance Sheet.
(c) If MIL disagrees with Telcom's calculation of the WVA Working
Capital Excess, MIL may, within 15 days of the delivery of the WVA Closing
Balance Sheet, deliver a notice to Telcom disagreeing with such calculation and
setting forth its calculation. Any such notice of disagreement shall specify
those items or amounts as to which MIL disagrees, and MIL shall be deemed to
have agreed with all other items and amounts contained in the WVA Closing
Balance Sheet and the calculation of the WVA Working Capital Excess delivered
pursuant to Section 2.3(b).
(d) If Telcom disagrees with MIL's calculation of the MIL Working
Capital Excess, Telcom may, within 15 days of the delivery of the MIL Closing
Balance Sheet, deliver a notice to MIL disagreeing with such calculation and
setting forth its calculation. Any such notice of disagreement shall specify
those items or amounts as to which Telcom disagrees, and Telcom shall be deemed
to have agreed with all other items and amounts contained in the MIL Closing
Balance Sheet and the calculation of the MIL Working Capital Excess delivered
pursuant to Section 2.3(b).
(e) If a notice of disagreement shall be delivered by MIL pursuant to
Section 2.3(c), MIL and Telcom shall, during the 15 days following such
delivery, use their best efforts to reach agreement on the disputed items or
amounts in order to determine, as may be required, the amount of the WVA
Working Capital Excess, which amount shall not be less than the amount thereof
shown in Telcom's calculations delivered pursuant to Section 2.3(b) or more
than the amount thereof shown in MIL's calculation delivered pursuant to
Section 2.3(c). If, during such period, MIL and Telcom are unable to reach such
agreement, they shall promptly thereafter cause an independent accounting firm
of nationally recognized standing reasonably satisfactory to MIL and Telcom
(which shall not have any material relationship with MIL or Telcom or any of
their Affiliates (the "Accountants")), promptly to review this Agreement and
the disputed items or amounts for the purpose of calculating the WVA Working
Capital Excess. Telcom, WVA and the WVA Subsidiaries shall provide all detailed
documentation necessary to support the computation underlying Telcom's
calculation of the WVA Working Capital Excess. In making such calculation, the
Accountants shall consider only those items or amounts in the WVA Closing
Balance Sheet or
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Telcom's calculation of the WVA Working Capital Excess as to which MIL has
disagreed. The Accountants shall deliver to MIL and Telcom, as promptly as
practicable, a report setting forth such calculation. Such report shall be final
and binding upon MIL and Telcom. The cost of such review and report shall be
borne (i) by MIL if the difference between the WVA Working Capital Excess and
MIL's calculation of the WVA Working Capital Excess delivered pursuant to
Section 2.3(c) is greater than the difference between the WVA Working Capital
Excess and Telcom's calculation of the WVA Working Capital Excess delivered
pursuant to Section 2.3(b), (ii) by Telcom if the first such difference is less
than the second such difference, and (iii) otherwise equally by MIL and Telcom.
(f) If a notice of disagreement shall be delivered by Telcom pursuant
to Section 2.3(d), MIL and Telcom shall, during the 15 days following such
delivery, use their best efforts to reach agreement on the disputed items or
amounts in order to determine, as may be required, the amount of the MIL
Working Capital Excess, which amount shall not be less than the amount thereof
shown in MIL's calculations delivered pursuant to Section 2.3(b) or more than
the amount thereof shown in Telcom's calculation delivered pursuant to Section
2.3(d). If, during such period, MIL and Telcom are unable to reach such
agreement, they shall promptly thereafter cause the Accountants promptly to
review this Agreement and the disputed items or amounts for the purpose of
calculating the MIL Working Capital Excess. MIL, MIL Argentina and XxXxx X.X.
shall provide all detailed documentation necessary to support the computation
underlying MIL's calculation of the MIL Working Capital Excess. In making such
calculation, the Accountants shall consider only those items or amounts in the
MIL Closing Balance Sheet or MIL's calculation of the MIL Working Capital
Excess as to which Telcom has disagreed. The Accountants shall deliver to MIL
and Telcom, as promptly as practicable, a report setting forth such
calculation. Such report shall be final and binding upon MIL and Telcom. The
cost of such review and report shall be borne (i) by Telcom if the difference
between the MIL Working Capital Excess and Telcom's calculation of the MIL
Working Capital Excess delivered pursuant to Section 2.3(d) is greater than the
difference between the MIL Working Capital Excess and Telcom's calculation of
the MIL Working Capital Excess delivered pursuant to Section 2.3(d), (ii) by
MIL if the first such difference is less than the second such difference, and
(iii) otherwise equally by MIL and Telcom.
(g) MIL Argentina shall engage, at its expense, the Accountants
to review the information provided by MIL and Telcom pursuant to Section 2.3(a)
with respect to the calculations of Invested Capital. Within 30 days after the
Closing Date, the Accountants shall provide to MIL Argentina a verification of
the calculations of the Invested Capital.
(h) To the extent the Accountants' calculations differ from those used
in Section 2.1.2(b) such that one party would have been required to make an
additional cash contribution pursuant to Section 2.1.2(b) (the "Shortfall"),
the party owing the Shortfall shall make such additional cash contribution to
MIL Argentina within 10 days of the Accountants' delivery of their
calculations. If the party owing the Shortfall shall fail to make such
additional cash contribution, MIL Argentina shall issue additional equity
interests to the other party
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hereto such that each party's interest is proportionate to its capital
contributions pursuant to Section 2.1.2(b), taking into account the Accountants'
calculation of the Invested Capital, MIL Working Capital Excess and WVA Working
Capital Excess.
(i) MIL and Telcom agree that they will, and agree to cause their
respective independent accountants, XxXxx X.X., WVA and the WVA Subsidiaries
to, cooperate and assist in the Accountants' review of the Invested Capital,
the MIL Closing Balance Sheet, the WVA Closing Balance Sheet, the MIL Working
Capital Excess and the WVA Working Capital Excess, including, without
limitation, the making available to the extent necessary of books, records,
work papers and personnel.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE MIL PARTIES
To induce Telcom and WVA to enter into and perform this Agreement, the
MIL Parties represent and warrant to Telcom and WVA (which representations and
warranties shall survive the Closing as provided in Section 8.5) all as follows
in this Article III. The contents of any particular Schedule to this Article
III shall not be deemed included in any other Schedule unless specifically
cross-referenced to that Schedule.
3.1 ORGANIZATION, GOOD STANDING, ETC.
The MIL Parties are duly organized and validly existing under the
laws of their respective jurisdictions of incorporation, as set forth on
Schedule 3.1. MIL Argentina and XxXxx X.X. have all corporate power and
authority required to own, operate and lease their respective properties and
assets and to carry on their respective businesses (including the SMR business,
when applicable) as now conducted except where such failure to have corporate
power and authority would not have a material adverse effect on MIL Argentina
and XxXxx X.X, taken as a whole. Except as listed on Schedule 3.1, neither MIL
Argentina nor XxXxx X.X. is required to be qualified to do business as a
foreign corporation in any state or country. Except as listed on Schedule 3.1,
neither MIL Argentina nor XxXxx X.X. has any subsidiaries or any direct or
indirect investments in any other Person.
3.2 AUTHORIZATION, DUE EXECUTION AND BINDING EFFECT
All corporate or member action of the MIL Parties required to
authorize and perform this Agreement and the transactions contemplated hereby
has been taken. This Agreement has been duly executed and delivered by each of
the MIL Parties and is a legal, valid and binding obligation of each of the MIL
Parties.
3.3 NO APPROVALS OR NOTICES REQUIRED; NO CONFLICTS WITH INSTRUMENTS
Other than the Authorization and except as listed on Schedule 3.3 and
except where a violation would not have a material adverse effect on MIL
Argentina and XxXxx X.X., taken
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as a whole, the execution, delivery and performance of this Agreement by the MIL
Parties and the consummation of the transactions contemplated hereby, including,
but not limited to, the transfer of Persons having all SMR rights (which
include, but are not limited to, telephony and interconnect rights, if any, as
of the date hereof and the Closing Date) in Argentina of XxXxx X.X. do not and
will not (a) violate the corporate charter or other organizational documents of
any of the MIL Parties, (b) constitute a violation (with or without the giving
of notice or lapse of time, or both) of any law, rule, regulation, judgment,
injunction, order or decree applicable to any of the MIL Parties, (c) require
any consent, approval or authorization of any Person, governmental authority or
other organization or entity, (d) result in a default under, an acceleration or
termination of, or the creation in any party of the right to accelerate,
terminate, modify or cancel, or in any other way materially affect the rights of
any of the MIL Parties under, any material agreement, lease, note or other
restriction, encumbrance, obligation or liability to which any of the MIL
Parties is a party or by which any of the MIL Parties is bound or to which the
XxXxx X.X. Assets (whether real or personal, tangible or intangible) are
subject, or (e) result in the creation or imposition of any Lien on any of the
XxXxx X.X. Assets. MIL has provided, or will provide to Telcom prior to the
Closing Date, true and complete copies of all corporate and organizational
documents of MIL Argentina and XxXxx X.X., and there has been no change to any
such documents since the date of such certification except as described on
Schedule 3.3. MIL has provided or will provide to Telcom prior to the Closing
Date copies of the minute books and other customary corporate documents of MIL
Argentina and XxXxx X.X., and such minute books and other customary corporate
documents are true, complete and correct.
3.4 LICENSES, PERMISSIONS, PERMITS, AUTHORIZATIONS, ETC.
XxXxx X.X. has received all currently required Government Approvals
of all agencies, whether local or national, including, but not limited to, the
right to be engaged in the SMR business and authorizations to use the XxXxx
X.X. Channels in the cities identified on Schedule 3.13 (the "XxXxx X.X.
Licenses"), and all XxXxx X.X. Licenses are valid and in force, except where
the failure to have any valid XxXxx X.X. License in force would not,
individually or in the aggregate, have a material adverse effect on XxXxx X.X.
Except as listed on Schedule 3.4 and except for tax obligations generally
applicable to SMR licenses in Argentina, no additional payments or fees of any
kind are required to be paid to governmental authorities to conduct the XxXxx
X.X. Business. Except as listed on Schedule 3.4, all tax obligations generally
applicable to SMR licenses in Argentina and other payments or fees required to
be paid to governmental authorities to conduct the XxXxx X.X. Business have
been paid.
3.5 CAPITALIZATION OF THE MIL PARTIES
As of the date hereof, the capitalization of the MIL Parties is as set
forth on Schedule 3.5. All outstanding shares in the share capital of MIL
Argentina (the "MIL Argentina Securities") have been duly
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authorized and validly issued and are fully paid and nonassessable. All
outstanding shares of capital stock of XxXxx X.X. have been duly authorized and
validly issued and are fully paid and nonassessable. Except as described in this
Section 3.5 and on Schedule 3.5, there are no outstanding (a) shares of capital
stock or voting securities or shares of MIL Argentina or XxXxx X.X., (b)
securities of MIL Argentina or XxXxx X.X. convertible into or exchangeable for
shares of capital stock or voting securities or shares of MIL Argentina or XxXxx
X.X., or (c) options or other rights to acquire from MIL Argentina or XxXxx
X.X., or other obligations of MIL Argentina or XxXxx X.X. to issue, any shares,
capital stock, voting securities or securities convertible into or exchangeable
for capital stock or voting securities or shares of MIL Argentina or XxXxx X.X.
There are no outstanding obligations of any of the MIL Parties or any Affiliate
of MIL to acquire any securities of the type described in the preceding
sentence.
3.6 OWNERSHIP OF CAPITAL STOCK OF MIL PARTIES
The record and legal ownership of the securities of the MIL Parties is
as set forth on Schedule 3.5, and, except as set forth in Schedule 3.5, such
ownership is free and clear of any Lien and any other limitation or restriction
(including any restriction on the right to vote, sell or otherwise dispose of
any such capital stock).
3.7 FINANCIAL STATEMENTS
MIL has previously delivered to Telcom consolidated financial
statements of MIL Argentina and XxXxx X.X. as of and for the year ended
December 31, 1995 and as of and for the nine months ended September 30, 1996
(the "MIL Argentina Financial Statements"). The MIL Argentina Financial
Statements present fairly the consolidated financial position and results of
operations of MIL Argentina and XxXxx X.X. as of the dates and for the periods
indicated therein in accordance with U.S. generally accepted accounting
principles consistently applied, except that the MIL Argentina Financial
Statements for the nine months ended September 30, 1996 may be subject to
normal year-end adjustments of a type consistent with prior years and do not
contain footnotes.
3.8 ABSENCE OF CERTAIN CHANGES
Since September 30, 1996, except as contemplated by this Agreement,
and except as listed on Schedule 3.8, the XxXxx X.X. Business has been
conducted in the ordinary course consistent with past practices and there has
not been:
(a) to the knowledge of MIL, any event, occurrence,
development or state of circumstances or facts relating to MIL Argentina or
XxXxx X.X. that has had or could reasonably be expected to have a material
adverse effect on the XxXxx X.X. Business (other than published laws or
regulations or changes in the Argentine economy generally);
(b) any amendment of any material term of any
outstanding security of MIL Argentina or XxXxx X.X.;
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(c) any incurrence, assumption or guarantee by MIL
Argentina or XxXxx X.X. of any indebtedness for borrowed money;
(d) any creation or assumption by MIL Argentina or XxXxx
X.X. of any Lien on any material asset other than in the ordinary course of
business consistent with past practices;
(e) any dividend or other distribution to MIL or any
other Person;
(f) any making of any loan, advance or capital
contributions to or investment in any Person by MIL Argentina or XxXxx X.X.;
(g) any damage, destruction or other casualty loss
(whether or not covered by insurance) affecting the XxXxx X.X. Business or the
XxXxx X.X. Assets that, individually or in the aggregate, has had or would
reasonably be expected to have a material adverse effect on the XxXxx X.X.
Business;
(h) any transaction or commitment made, or any contract
or agreement entered into, by MIL Argentina or XxXxx X.X. relating to the
assets of MIL Argentina or XxXxx X.X., respectively, or the XxXxx X.X. Business
(including the acquisition or disposition of any assets) or any relinquishment
by XxXxx X.X. of any contract or other right material to XxXxx X.X., other than
transactions and commitments in the ordinary course of business consistent with
past practices or contemplated by this Agreement;
(i) any change in any method of accounting or accounting
practice by MIL Argentina or XxXxx X.X.;
(j) any (i) employment, deferred compensation,
severance, retirement or other similar agreement entered into by MIL Argentina
or XxXxx X.X. with any director, officer or employee thereof or consultant
thereto (or any amendment to any such existing agreement), (ii) grant of any
severance or termination pay to any director, officer or employee of or
consultant to MIL Argentina or XxXxx X.X., or (iii) change in compensation or
other benefits payable to any director, officer or employee of or consultant to
MIL Argentina or XxXxx X.X. pursuant to any severance or retirement plans or
policies thereof; or
(k) any labor dispute, other than routine individual
grievances, or any activity or proceeding by a labor union or representative
thereof to organize any employees of MIL Argentina or XxXxx X.X., which
employees were not subject to a collective bargaining agreement as of the date
of the most recent MIL Argentina Financial Statements, or any lockouts,
strikes, slowdowns, work stoppages or threats thereof by or with respect to any
employees of MIL Argentina or XxXxx X.X.
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3.9 LIABILITIES
There are no long-term liabilities of MIL Argentina or XxXxx X.X. of
any kind whatsoever, whether accrued, contingent, absolute, determined,
determinable or otherwise, that are required by U.S. generally accepted
accounting principles to be reflected in a balance sheet or in the notes
thereto, and there is no existing condition, situation or set of circumstances
that is reasonably likely to result in such a liability, other than liabilities
provided for in the MIL Argentina Financial Statements or disclosed on Schedule
3.9. Except as disclosed on Schedule 3.9, none of the liabilities of MIL
Argentina or XxXxx X.X. are past due, and all such liabilities were incurred in
the ordinary course of business on terms consistent with past practices.
3.10 INTERCOMPANY TRANSACTIONS
Except as disclosed on Schedule 3.10, there are no intercompany
balances, and there are no and have not been any intercompany transactions,
between MIL and its Affiliates on the one hand and MIL Argentina and XxXxx X.X.
on the other hand.
3.11 TAXES
MIL Argentina and XxXxx X.X. have accurately prepared in all material
respects and duly filed with the appropriate federal, state, local and foreign
taxing authorities (the "Tax Authorities") all tax returns, information returns
and reports that are, individually and in the aggregate, material and are
required to be filed on or before the date hereof with respect to MIL Argentina
or XxXxx X.X., as the case may be, and, except as shown on Schedule 3.11, have
paid in full or made adequate provision for the payment of all material Taxes
(as defined below). Neither MIL Argentina nor XxXxx X.X. is delinquent in the
payment of any material Taxes. Neither MIL Argentina nor XxXxx X.X. has
requested or received from any Tax Authority any extensions or tolling
arrangements with respect to any Taxes or is subject to any open or threatened
audits by any Tax Authority. As used herein, the term "Taxes" means all
federal, state, local and foreign taxes, including, without limitation, income,
profits, franchise, employment, transfer, withholding, property, excise, sales
and use taxes (including interest and other penalties thereon and additions
thereto).
3.12 ASSETS
(a) MIL has delivered or will deliver to Telcom prior to the Closing
Date true and complete copies of all material leases, subleases, rental
agreements, contracts of sale or licenses of any portion of the personal
property (the "XxXxx X.X. Personal Property") owned, leased or rented by XxXxx
X.X. as of the date hereof. XxXxx X.X. has legal ownership or other legal
rights to use all property used in the conduct of the XxXxx X.X. Business as
presently conducted. Schedule 3.12(a) lists all leased XxXxx X.X. Personal
Property with a monthly lease payment (or annual lease payment prorated on a
monthly basis) in excess of US$1,000.
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(b) Except as listed on Schedule 3.12(b), XxXxx X.X. does not
own, lease or use any material real property.
(c) No XxXxx X.X. Assets are subject to any lease, license,
contract of sale or other agreement that is reasonably likely to have a
material adverse effect upon the business, properties or financial condition of
XxXxx X.X.
(d) Except as listed on Schedule 3.12(d), the XxXxx X.X. Assets
are free and clear of all Liens (other than landlord's Liens, Liens for taxes
not yet due or for overdue taxes disclosed on Schedule 3.9, workmen's Liens,
vendor's Liens or other immaterial Liens arising in the ordinary course of
business ("Permitted Liens")) and, other than leased XxXxx X.X. Assets, XxXxx
X.X. has good and marketable title thereto. XxXxx X.X. has valid leasehold
interests in all leased assets.
(e) No Person has any right of first refusal or option to acquire
any interest in the XxXxx X.X. Assets or any part thereof, and none of the MIL
Parties has sold or contracted to sell the XxXxx X.X. Assets or any part thereof
or interest therein other than as set forth herein.
(f) MIL Argentina has no assets or liabilities other than the
stock of XxXxx X.X. and has not conducted and currently does not conduct any
business other than the ownership of such stock.
(g) No assets used by XxXxx X.X. are owned by any Affiliate of
XxXxx X.X.
3.13 CHANNELS
Schedule 3.13 sets forth the location of each XxXxx X.X. Channel, the
number of such XxXxx X.X. Channel, the dates of grant and expiration of the
XxXxx X.X. License with respect to such XxXxx X.X. Channel, any extension or
renewal periods or requests therefor, and the status thereof, any required
build-out and loading dates, and the status thereof, with respect to such XxXxx
X.X. Channel, the number of subscribers using XxXxx X.X. Channels in such
location as of September 30, 1996 and the nature of any frequency interference
with the use of such XxXxx X.X. Channel. Except as listed on Schedule 3.13, MIL
and its Affiliates, including XxXxx X.X., have no other interests, direct or
indirect, contingent or pending, in frequencies capable of being used for SMR
service in Argentina. To the knowledge of MIL, all lawful action that is
necessary to preserve the rights to any XxXxx X.X. Licenses or XxXxx X.X.
Channels has been taken or is being taken, and, to the knowledge of MIL, XxXxx
X.X. is in full compliance with all requirements of all XxXxx X.X. Licenses
with respect to XxXxx X.X. Channels.
3.14 COMPLIANCE WITH ENVIRONMENTAL LAWS
None of the MIL Parties or any other Person (including, without
limitation, any previous owner, lessee, sublessor or sublessee) has generated,
handled, used, manufactured,
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processed, distributed in commerce, transported, treated, stored, disposed of or
released (or arranged for the transportation, treatment or disposal of)
petroleum, petroleum products, hazardous waste, hazardous chemicals or
substances, toxic chemicals, chemical substances or mixtures, pollutants or
contaminants on, at or from any assets or properties owned, leased, subleased or
used by XxXxx X.X. in the operation of the XxXxx X.X. Business or on, at or from
any real property to which any of the above-listed substances from the
above-listed assets or properties were transported, or at or on which they were
treated or disposed, in a manner that could subject the MIL Parties, the WVA
Securityholders, WVA, the WVA Subsidiaries or their respective Affiliates to any
material liability under any provision of law in existence on or prior to the
Closing Date.
3.15 CONTRACTS
MIL has provided or will provide to Telcom prior to the Closing Date a
copy of, and has made available or will make available for review by Telcom
prior to the Closing Date originals of, all material contracts, oral or
written, to which XxXxx X.X. is a party, including, without limitation,
security agreements, conditional sale agreements and instruments relating to
the borrowing of money. Schedule 3.15 lists all such contracts. All such
contracts are valid and in full force and effect, XxXxx X.X. has performed all
material obligations imposed upon it thereunder, and there are, under any of
such contracts, no defaults or events of default by XxXxx X.X. or, to the
knowledge of MIL, any other party thereto, that would materially adversely
affect the business, assets or financial condition of XxXxx X.X. or could
reasonably be expected to materially adversely affect the business prospects of
XxXxx X.X. Neither MIL nor XxXxx X.X. has received notice, nor is MIL or XxXxx
X.X. otherwise aware, that any party to any such contract intends to cancel,
terminate or refuse to renew such contract or to exercise or decline to
exercise any option or right thereunder.
3.16 CLAIMS AND LEGAL PROCEEDINGS
Except as described on Schedule 3.16, there are no claims, actions,
suits, arbitrations, proceedings or investigations ("Claims") pending or, to
the knowledge of MIL, threatened against any of the MIL Parties with respect to
the XxXxx X.X. Business, before or by any governmental or nongovernmental
department, commission, board, bureau, agency, instrumentality or any other
Person, which Claims are reasonably likely to be resolved adversely to any of
the MIL Parties, and which if so resolved would have a material adverse effect
on XxXxx X.X. There are no outstanding or unsatisfied judgments, orders,
decrees or stipulations to which any of the MIL Parties is a party that involve
the transactions contemplated hereby or that could individually or in the
aggregate have a material adverse effect upon the business, assets, financial
condition or business prospects of XxXxx X.X.
3.17 LABOR MATTERS
There are no material disputes, employee grievances, disciplinary
actions or legal actions pending or threatened between XxXxx X.X. and any of
its employees or independent
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contractors and no claims under U.S. or Argentine law. XxXxx X.X. has complied
in all material respects with all provisions of all laws in the United States
and Argentina relating to the employment of labor and has no liability for any
arrears of wages, social security payments or taxes or penalties for failure to
comply with any such laws. To the knowledge of MIL, there are no organizational
efforts presently being made or threatened by or on behalf of any labor union
with respect to any of the employees of XxXxx X.X.
Except as specifically set forth on Schedule 3.17, XxXxx X.X. is not a
party to any:
(a) management, employment or other contract providing
for the employment or rendition of executive services;
(b) employment contract that is not terminable without
penalty by XxXxx X.X. on 30 days' notice;
(c) bonus, incentive, deferred compensation, severance
pay, pension, profit-sharing, retirement, stock purchase, stock option,
employee benefit or similar plan, agreement or arrangement;
(d) collective bargaining agreement or other agreement
with any labor union or other employee organization (and no such agreement is
currently being requested by, or is under discussion by management with, any
group of employees or others); or
(e) other employment contract or other compensation
agreement or arrangement, oral or written, affecting or relating to current or
former employees of XxXxx X.X.
All such contracts and other agreements and arrangements set forth on
Schedule 3.17 are valid and in full force and effect, XxXxx X.X. has performed
all material obligations imposed upon it thereunder, and there are, under any
of such contracts, agreements or arrangements, no defaults or events of default
by XxXxx X.X. or, to the knowledge of MIL, any other party thereto that would
materially adversely affect the business, assets or financial condition of
XxXxx X.X., that would materially adversely affect the relationship of XxXxx
X.X. or MIL Argentina with any employee of XxXxx X.X. or that could reasonably
be expected to materially adversely affect the business prospects of XxXxx X.X.
From September 30, 1996 to and including the Closing Date, XxXxx X.X.
has not made any loans to any of its officers or employees or any of the
officers or employees of MIL or its Affiliates.
3.18 PATENTS, TRADEMARKS, ETC.
XxXxx X.X. owns, or has full and unrestricted rights within Argentina
(to the extent available under Argentine law) to:
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(a) all material trademarks, trade names and copyrights
now used by XxXxx X.X. and
(b) all material formulae, franchises, processes,
techniques and manufacturing know-how and all trademarks, trade names and
copyrights used in connection with services now being or intended to be offered
and sold by XxXxx X.X., except in each case where the failure to own or have
full and unrestricted rights within Argentina to such items would not have a
material adverse effect on XxXxx X.X.
Where registration of the intellectual property listed in clauses (a)
and (b) above is necessary in order to have full and unrestricted rights to
such intellectual property, such intellectual property has been duly registered
with the proper authorities in Argentina. XxXxx X.X. as a result of the
execution of this Agreement or the performance of its obligations hereunder
will not be deprived of any rights which it would otherwise possess in any of
the intellectual property listed in clauses (a) and (b) above.
A true and complete list of (i) all patents, patent applications,
patent agreements, license agreements, proprietary information agreements,
confidentiality agreements, invention agreements, consulting agreements,
trademark registrations and applications therefor, trade names, service marks
and copyright registrations and applications therefor to which XxXxx X.X. is a
party or that are used in the operation of the XxXxx X.X. Business and (ii) any
interference actions or adverse claims made or threatened in respect thereof
and any claims made or threatened for alleged infringement thereof are
specifically set forth on Schedule 3.18. To the best knowledge of MIL, XxXxx
X.X., in its operations, does not infringe any valid patent, trademark, trade
name, service xxxx or copyright of any other Person. Except as set forth on
Schedule 3.18, all agreements listed on Schedule 3.18 are valid and
enforceable, XxXxx X.X. has performed all material obligations imposed upon it
thereunder, and neither XxXxx X.X. nor, to the knowledge of MIL, any other
party thereto is in default thereunder in any material respect, nor is there
any event that with the giving of notice or lapse of time, or both, would
constitute a material default thereunder by XxXxx X.X. or, to the knowledge of
MIL, any other party thereto. Neither MIL nor XxXxx X.X. has received notice
that any party to any such agreement intends to cancel, terminate or refuse to
renew the same or to exercise or decline to exercise any option or other right
thereunder. XxXxx X.X. has not entered into any agreement to indemnify any
Person against any claim or charge of infringement of any patents, trademarks,
trade names, copyrights, technology, know-how, processes or other intangible
rights.
3.19 CUSTOMERS
Except as described on Schedule 3.19, XxXxx X.X. has not received any
customer complaints or expressions of customer dissatisfaction, in writing or
orally, of a material nature concerning the service provided by XxXxx X.X.
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3.20 APPLICABLE LAWS
The MIL Parties have complied, and are in compliance, with the U.S.
Foreign Corrupt Practices Act with respect to the XxXxx X.X. Business. Except
where noncompliance would not individually or in the aggregate have a material
adverse effect on XxXxx X.X., the MIL Parties have complied, and are in
compliance with, all presently existing local and national Argentine laws,
rules, ordinances, decrees and orders applicable to the operation of the XxXxx
X.X. Business or to their owned or leased properties. None of the MIL Parties
have reasonably been put on notice of any action or omission which could be
deemed an unasserted present or past unremedied failure by MIL or XxXxx X.X.,
as the case may be, to comply with any such laws, rules, ordinances, decrees
and orders, other than actions or omissions which such MIL Party reasonably
believes are not failures to comply. No director, officer, agent, employee or
other Person acting on behalf of any of the MIL Parties has used any funds or
given anything of value, directly or indirectly, for contributions, payments,
gifts or entertainment or made any expenditures, directly or indirectly, to any
government official, political party or candidate for political office to
influence such Person in the discharge of his, her or its official duties. Each
of the MIL Parties has financial controls and accounting books and records
reasonably designed to ensure that such books and records accurately reflect
corporate transactions and the disposition of assets to the extent relating to
any of the MIL Parties. No director, officer, agent, employee or other Person
acting on behalf of the MIL Parties or XxXxx X.X. has accepted or received any
unlawful contributions, payments, gifts or expenditures in connection with the
operation of the XxXxx X.X. Business.
3.21 INSURANCE
MIL has provided, or will provide prior to the Closing Date, to Telcom
true and complete copies of all insurance policies relating to XxXxx X.X. and
the XxXxx X.X. Assets.
3.22 BROKERAGE
None of the MIL Parties have not retained any broker or finder in
connection with the transactions contemplated by this Agreement. Any brokerage
or finder's fee due to any broker or finder in violation of the foregoing
representation shall be paid by MIL.
3.23 FULL DISCLOSURE
No information furnished by the MIL Parties to Telcom and WVA in this
Agreement (including, but not limited to, the MIL Argentina Financial
Statements and all information in the Schedules and Exhibits) is false or
misleading in any material respect. There has been no omission on the part of
the MIL Parties to state a material fact necessary to make the information
provided to Telcom and WVA not misleading.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF TELCOM AND WVA
To induce the MIL Parties to enter into and perform this Agreement,
Telcom and WVA represent and warrant to the MIL Parties (which representations
and warranties shall survive the Closing as provided in Section 8.5) all as
follows in this Article IV. The contents of any particular Schedule to this
Article IV shall not be deemed included in any other Schedule unless
specifically cross-referenced to such Schedule.
4.1 ORGANIZATION, GOOD STANDING, ETC.
Telcom, WVA and the WVA Subsidiaries are duly organized and validly
existing under the laws of their respective jurisdictions of organization, as
set forth on Schedule 4.1. Each of WVA and each of the WVA Subsidiaries has all
corporate power and authority required to own, operate and lease its properties
and assets and to carry on its business (including the SMR business and paging
business, when applicable) as now conducted except where such failure to have
corporate power and authority would not have a material adverse effect on WVA
and the WVA Subsidiaries, taken as a whole. Except as listed on Schedule 4.1,
neither WVA nor any WVA Subsidiary is required to be qualified to do business
as a foreign corporation in any state or country. Except as listed on Schedule
4.1, neither WVA nor the WVA Subsidiaries have any subsidiaries or any direct
or indirect investments in any other Person.
4.2 AUTHORIZATION, DUE EXECUTION AND BINDING EFFECT
All corporate or member action of the WVA Securityholders, WVA and the
WVA Subsidiaries required to authorize and perform this Agreement and the
transactions contemplated hereby has been taken. This Agreement has been duly
executed and delivered by WVA and Telcom and is a legal, valid and binding
obligation of WVA and Telcom.
4.3 NO APPROVALS OR NOTICES REQUIRED; NO CONFLICTS WITH INSTRUMENTS
Other than the Authorization and except as listed on Schedule 4.3 and
except where a violation would not have a material adverse effect on WVA and
the WVA Subsidiaries, taken as a whole, the execution, delivery and performance
of this Agreement by WVA and Telcom and the consummation of the transactions
contemplated hereby, including, but not limited to, the transfer of Persons
having all SMR and paging rights (which include, but are not limited to,
telephony and interconnect rights, if any, as of the date hereof and the
Closing Date) in Argentina of the WVA Subsidiaries, do not and will not (a)
violate the corporate charter or other organizational documents of any of the
WVA Securityholders, WVA or the WVA Subsidiaries, (b) constitute a violation
(with or without the giving of notice or lapse of time, or both) of any law,
rule, regulation, judgment, injunction, order or decree applicable to any of
the WVA Securityholders, WVA or the WVA Subsidiaries, (c) require any consent,
approval or authorization of any Person, governmental authority or other
organization or entity,
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(d) result in a default under, an acceleration or termination of, or the
creation in any party of the right to accelerate, terminate, modify or cancel,
or in any other way materially affect the rights of any of the WVA
Securityholders, WVA or the WVA Subsidiaries under, any material agreement,
lease, note or other restriction, encumbrance, obligation or liability to which
any of the WVA Securityholders, WVA or the WVA Subsidiaries are a party or by
which any of the WVA Securityholders, WVA or the WVA Subsidiaries are bound or
to which the assets (whether real or personal, tangible or intangible) of WVA
and the WVA Subsidiaries (the "WVA Assets") are subject, or (e) result in the
creation or imposition of any Lien on any of the WVA Assets. Telcom has provided
or will provide to MIL prior to the Closing Date true and complete copies of all
corporate and organizational documents of WVA and the WVA Subsidiaries, and
there has been no change to any such documents since the date of such
certification except as described on Schedule 4.3. Telcom has provided or will
provide to MIL prior to the Closing Date copies of the minute books and other
customary corporate documents of WVA and the WVA Subsidiaries, and such minute
books and other customary corporate documents are true, complete and correct.
4.4 LICENSES, PERMISSIONS, PERMITS, AUTHORIZATIONS, ETC.
WVA and the WVA Subsidiaries have received all currently required
Government Approvals of all agencies, whether local or national, including, but
not limited to, municipal and national licenses to be engaged in the SMR
business in the cities identified on Schedule 4.13 and the paging business
throughout Argentina and authorizations to use the WVA Channels (the "WVA
Licenses"), and all the WVA Licenses are valid and in force, except where the
failure to have any valid WVA License in force would not, individually or in
the aggregate, have a material adverse effect on WVA and the WVA Subsidiaries,
taken as a whole. Except as listed on Schedule 4.4 and except for tax
obligations generally applicable to SMR and paging licenses in Argentina, no
additional payments or fees of any kind are required to be paid to governmental
authorities to conduct the WVA Business. Except as listed on Schedule 4.4, all
tax obligations generally applicable to SMR and paging licenses in Argentina
and other payments or fees required to be paid to governmental authorities to
conduct the WVA Business have been paid.
4.5 CAPITALIZATION OF WVA AND WVA SUBSIDIARIES
As of the date hereof, the capitalization of WVA and the WVA
Subsidiaries is as set forth on Schedule 4.5. All outstanding membership
interests of WVA and the shares of capital stock of the WVA Subsidiaries have
been duly authorized and validly issued and are fully paid and nonassessable.
Except as described in this Section 4.5 and on Schedule 4.5, there are no
outstanding (a) shares of capital stock or voting securities of WVA or any WVA
Subsidiary, (b) securities of WVA or any WVA Subsidiary convertible into or
exchangeable for shares of capital stock or voting securities of WVA or any WVA
Subsidiary, or (c) options or other rights to acquire from WVA or any WVA
Subsidiary, or other obligation of WVA or any WVA Subsidiary to issue, any
capital stock, voting securities or securities convertible into or exchangeable
for capital stock or voting securities of WVA or any WVA Subsidiary. There
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are no outstanding obligations of Telcom, WVA or any WVA Subsidiary or any
Affiliate of the foregoing to acquire any securities of the type described in
the preceding sentence.
4.6 OWNERSHIP OF WVA COMMON STOCK AND CAPITAL STOCK OF WVA SUBSIDIARIES
The record and legal ownership of the securities of WVA and the WVA
Subsidiaries is as set forth on Schedule 4.5, and, except as set forth in
Schedule 4.5, such ownership is free and clear of any Lien and any other
limitation or restriction (including any restriction on the right to vote, sell
or otherwise dispose of any such capital stock).
4.7 FINANCIAL STATEMENTS
Telcom has previously delivered to MIL consolidated financial
statements of WVA and the WVA Subsidiaries as of and for the year ended
December 31, 1995 and as of and for the nine months ended September 30, 1996
(the "WVA Financial Statements"). The WVA Financial Statements present fairly
the consolidated financial position and results of operations of WVA and the
WVA Subsidiaries as of the dates and for the periods indicated therein in
accordance with U.S. generally accepted accounting principles consistently
applied; except that the WVA Financial Statements for the nine months ended
September 30, 1996 may be subject to normal year-end adjustments of a type
consistent with prior years and do not contain footnotes.
4.8 ABSENCE OF CERTAIN CHANGES
Since September 30, 1996, except as contemplated by this Agreement,
and except as listed on Schedule 4.8, the WVA Business has been conducted in
the ordinary course consistent with past practices and there has not been:
(a) to the knowledge of the WVA Securityholders, any
event, occurrence, development or state of circumstances or facts relating to
WVA or any WVA Subsidiary that has had or could reasonably be expected to have
a material adverse effect on the WVA Business (other than published laws or
regulations or changes in the Argentine economy generally);
(b) any amendment of any material term of any
outstanding security of WVA or any WVA Subsidiary;
(c) any incurrence, assumption or guarantee by WVA or
any WVA Subsidiary of any indebtedness for borrowed money;
(d) any creation or assumption by WVA or any WVA
Subsidiary of any Lien on any material asset other than in the ordinary course
of business consistent with past practices;
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(e) any dividend or other distribution to Telcom or any
other Person;
(f) any making of any loan, advance or capital
contributions to or investment in any Person by WVA or any WVA Subsidiary;
(g) any damage, destruction or other casualty loss
(whether or not covered by insurance) affecting the WVA Business or the WVA
Assets that, individually or in the aggregate, has had or would reasonably be
expected to have a material adverse effect on the WVA Business;
(h) any transaction or commitment made, or any contract
or agreement entered into, by WVA or any WVA Subsidiary relating to the assets
of WVA or such WVA Subsidiary, respectively, or the WVA Business (including the
acquisition or disposition of any assets) or any relinquishment by WVA or such
WVA Subsidiary of any contract or other right, in either case, material to WVA
or any WVA Subsidiary, other than transactions and commitments in the ordinary
course of business consistent with past practices or contemplated by this
Agreement;
(i) any change in any method of accounting or accounting
practice by WVA or any WVA Subsidiary;
(j) any (i) employment, deferred compensation,
severance, retirement or other similar agreement entered into by WVA or any WVA
Subsidiary with any director, officer or employee thereof or consultant thereto
(or any amendment to any such existing agreement), (ii) grant of any severance
or termination pay to any director, officer or employee of or consultant to WVA
or any WVA Subsidiary, or (iii) change in compensation or other benefits
payable to any director, officer or employee of or consultant to WVA or any WVA
Subsidiary pursuant to any severance or retirement plans or policies thereof;
or
(k) any labor dispute, other than routine individual
grievances, or any activity or proceeding by a labor union or representative
thereof to organize any employees of WVA or any WVA Subsidiary, which employees
were not subject to a collective bargaining agreement as of the date of the
most recent WVA Financial Statements, or any lockouts, strikes, slowdowns, work
stoppages or threats thereof by or with respect to any employees of WVA or any
WVA Subsidiary.
4.9 LIABILITIES
There are no long-term liabilities of WVA or any WVA Subsidiary of any
kind whatsoever, whether accrued, contingent, absolute, determined,
determinable or otherwise, that are required by generally accepted accounting
principles to be reflected in a balance sheet or in the notes thereto, and
there is no existing condition, situation or set of circumstances that is
reasonably likely to result in such a liability, other than liabilities
provided for in the WVA Financial Statements or disclosed on Schedule 4.9.
Except as disclosed on Schedule 4.9, none of the liabilities of WVA or the WVA
Subsidiaries are past due, and all
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such liabilities were incurred in the ordinary course of business on terms
consistent with past practices.
4.10 INTERCOMPANY TRANSACTIONS
Except as disclosed on Schedule 4.10, there are no intercompany
balances, and there are no and have not been any intercompany transactions,
between Telcom and its Affiliates on the one hand and WVA or the WVA
Subsidiaries on the other hand.
4.11 TAXES
WVA and the WVA Subsidiaries have accurately prepared in all material
respects and duly filed with the appropriate Tax Authorities all tax returns,
information returns and reports that are, individually and in the aggregate,
material and are required to be filed on or before the date hereof with respect
to WVA and the WVA Subsidiaries and, except as shown on Schedule 4.11, have
paid in full or made adequate provision for the payment of all material Taxes.
Neither WVA nor any WVA Subsidiary is delinquent in the payment of any material
Taxes. Neither WVA nor any WVA Subsidiary has requested or received from any
Tax Authority any extensions or tolling arrangements with respect to any Taxes
or is subject to any open or threatened audits by any Tax Authority.
4.12 ASSETS
(a) Telcom has delivered or will deliver to MIL prior to the Closing
Date true and complete copies of all material leases, subleases, rental
agreements, contracts of sale or licenses of any portion of the personal
property (the "WVA Personal Property") owned, leased or rented by WVA and the
WVA Subsidiaries as of the date hereof. WVA or the WVA Subsidiaries have legal
ownership or other legal rights to use all property used in the conduct of the
WVA Business as presently conducted. Schedule 4.12(a) lists all leased WVA
Personal Property with a monthly lease payment (or annual lease payment
prorated on a monthly basis) in excess of US$1,000.
(b) Except as listed on Schedule 4.12(b), WVA and the WVA
Subsidiaries do not own, lease or use any material real property.
(c) No WVA Assets are subject to any lease, license, contract of
sale or other agreement that is reasonably likely to have a material adverse
effect upon the business, properties or financial condition of WVA or any WVA
Subsidiaries.
(d) Except as listed on Schedule 4.12(d), the WVA Assets are free
and clear of all Liens (other than Permitted Liens), and, other than leased WVA
Assets, each of WVA and the WVA Subsidiaries has good and marketable title
thereto. WVA and the WVA Subsidiaries have valid leasehold interests in all
leased assets.
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(e) No Person has any right of first refusal or option to acquire
any interest in the WVA Assets or any part thereof, and none of the WVA
Securityholders, WVA or the WVA Subsidiaries have sold or contracted to sell
the WVA Assets or any part thereof or interest therein other than as set forth
herein.
(f) WVA has no assets or liabilities other than the stock of the
WVA Subsidiaries and has not conducted and currently does not conduct any
business other than the ownership of such stock.
(g) No assets used by WVA are owned by any Affiliate of WVA.
4.13 CHANNELS
Schedule 4.13 sets forth the location of each WVA Channel, the number
of such WVA Channel, the WVA Subsidiary having rights to such WVA Channel, the
dates of grant and expiration of the WVA License with respect to such WVA
Channel, any extension or renewal periods or requests therefor, and the status
thereof, any required build-out and loading dates, and the status thereof, with
respect to such WVA Channel, the number of subscribers using WVA Channels in
such location as of September 30, 1996 and the nature of any frequency
interference with the use of such WVA Channel. Except as listed on Schedule
4.13, Telcom and its Affiliates, including WVA and the WVA Subsidiaries, have
no other interests, direct or indirect, contingent or pending, in frequencies
capable of being used for SMR service or paging services in Argentina. To the
knowledge of Telcom, all lawful action that is necessary to preserve the rights
to any WVA Licenses, WVA Channels or frequencies used for any of paging
operations of WVA or the WVA Subsidiaries has been taken or is being taken,
and, to the knowledge of Telcom, WVA and the WVA Subsidiaries are in full
compliance with all requirements of all WVA Licenses with respect to WVA
Channels and paging frequencies.
4.14 COMPLIANCE WITH ENVIRONMENTAL LAWS
None of the WVA Securityholders, WVA, the WVA Subsidiaries or any
other Person (including, without limitation, any previous owner, lessee,
sublessor or sublessee) has generated, handled, used, manufactured, processed,
distributed in commerce, transported, treated, stored, disposed of or released
(or arranged for the transportation, treatment or disposal of) petroleum,
petroleum products, hazardous waste, hazardous chemicals or substances, toxic
chemicals, chemical substances or mixtures, pollutants or contaminants on, at
or from any assets or properties owned, leased, subleased or used by WVA or the
WVA Subsidiaries in the operation of the WVA Business or on, at or from any
real property to which any of the above-listed substances from the above-listed
assets or properties were transported, or at or on which they were treated or
disposed, in a manner that could subject the MIL Parties, the WVA
Securityholders, WVA, the WVA Subsidiaries or their respective Affiliates to
any material liability under any provision of law in existence on or prior to
the Closing Date.
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4.15 CONTRACTS
Telcom has provided or will provide MIL prior to the Closing Date a
copy of, and has made available or will make available for review by MIL prior
to the Closing Date originals of, all material contracts, oral or written, to
which WVA or the WVA Subsidiaries are a party, including, without limitation,
security agreements, conditional sale agreements and instruments relating to
the borrowing of money. Schedule 4.15 lists all such contracts. All such
contracts are valid and in full force and effect, each of WVA and the WVA
Subsidiaries, as the case may be, has performed all material obligations
imposed upon it thereunder, and there are, under any of such contracts, no
defaults or events of default by WVA or any WVA Subsidiary, as the case may be,
or, to the knowledge of Telcom, or any other party thereto, that would
materially adversely affect the business, assets or financial condition of WVA
and the WVA Subsidiaries, taken as a whole, or which could reasonably be
expected to materially adversely affect the business prospects of WVA and the
WVA Subsidiaries, taken as a whole. None of the WVA Securityholders, WVA or any
WVA Subsidiary has received notice, nor is any WVA Securityholder, WVA or any
WVA Subsidiary otherwise aware, that any party to any such contract intends to
cancel, terminate or refuse to renew such contract or to exercise or decline to
exercise any option or right thereunder.
4.16 CLAIMS AND LEGAL PROCEEDINGS
Except as described on Schedule 4.16, there are no claims pending or,
to the knowledge of the WVA Securityholders, WVA or any WVA Subsidiary,
threatened against any WVA Securityholder, WVA or any WVA Subsidiary with
respect to the WVA Business, before or by any governmental or nongovernmental
department, commission, board, bureau, agency, instrumentality or any other
Person, which Claims are reasonably likely to be resolved adversely to any of
the WVA Securityholders, WVA or any of the WVA Subsidiaries, and which if so
resolved would have a material adverse effect on WVA and the WVA Subsidiaries,
taken as a whole. There are no outstanding or unsatisfied judgments, orders,
decrees or stipulations to which any WVA Securityholder, WVA or any WVA
Subsidiary is a party that involve the transactions contemplated hereby or that
could individually or in the aggregate have a material adverse effect upon the
business, assets, financial condition or business prospects of WVA and the WVA
Subsidiaries, taken as a whole.
4.17 LABOR MATTERS
There are no material disputes, employee grievances, disciplinary
actions or legal actions pending or threatened between WVA or any WVA
Subsidiary and any of their respective employees or independent contractors and
no claims under U.S. or Argentine law. Each of WVA and the WVA Subsidiaries has
complied in all material respects with all provisions of all laws in the United
States and Argentina relating to the employment of labor and has no liability
for any arrears of wages, social security payments or taxes or penalties for
failure to comply with any such laws. To the knowledge of Telcom, there are no
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organizational efforts presently being made or threatened by or on behalf of any
labor union with respect to any of the employees of WVA or the WVA Subsidiaries.
Except as specifically set forth on Schedule 4.17, neither WVA nor any
WVA Subsidiary is a party to any:
(a) management, employment or other contract providing
for the employment or rendition of executive services;
(b) employment contract that is not terminable without
penalty by WVA or any WVA Subsidiary on 30 days' notice;
(c) bonus, incentive, deferred compensation, severance
pay, pension, profit-sharing, retirement, stock purchase, stock option,
employee benefit or similar plan, agreement or arrangement;
(d) collective bargaining agreement or other agreement
with any labor union or other employee organization (and no such agreement is
currently being requested by, or is under discussion by management with, any
group of employees or others); or
(e) other employment contract or other compensation
agreement or arrangement, oral or written, affecting or relating to current or
former employees of WVA or any WVA Subsidiary.
All such contracts and other agreements and arrangements set forth on
Schedule 4.17 are valid and in full force and effect, each of WVA and each WVA
Subsidiary has performed all material obligations imposed upon it thereunder,
and there are, under any of such contracts, agreements or arrangements, no
defaults or events of default by WVA or any WVA Subsidiary or, to the knowledge
of Telcom, any other party thereto that would materially adversely affect the
business, assets or financial condition of WVA or any WVA Subsidiary, that
would materially adversely affect the relationship of WVA, any WVA Subsidiary
or MIL Argentina with any employee of WVA or any WVA Subsidiary or that could
reasonably be expected to materially adversely affect the business prospects of
WVA or any WVA Subsidiary.
From September 30, 1996 to and including the Closing Date, neither WVA
nor any WVA Subsidiary has made any loans to any of its officers or employees
or any of the officers or employees of Telcom and its Affiliates.
4.18 PATENTS, TRADEMARKS, ETC.
WVA and the WVA Subsidiaries own, or have full and unrestricted rights
within Argentina (to the extent available under Argentine law) to:
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(a) all material trademarks, trade names and copyrights,
including, but not limited to, "AirLink," now used by WVA or the WVA
Subsidiaries, as the case may be, and
(b) all material formulae, franchises, processes,
techniques and manufacturing know-how and all trademarks, trade names and
copyrights used in connection with services now being or intended to be offered
and sold by WVA or the WVA Subsidiaries, as the case may be, except in each
case where the failure to own or have full and unrestricted rights within
Argentina to such items would not have a material adverse effect on WVA and the
WVA Subsidiaries, taken as a whole.
Where registration of the intellectual property listed in clauses (a)
and (b) above is necessary in order to have full and unrestricted rights to
such intellectual property, such intellectual property has been duly registered
with the proper authorities in Argentina. WVA and the WVA Subsidiaries as a
result of the execution of this Agreement or the performance of their
obligations hereunder will not be deprived of any rights which they would
otherwise possess in any of the intellectual property listed in clauses (a) and
(b) above.
A true and complete list of (i) all patents, patent applications,
patent agreements, license agreements, proprietary information agreements,
confidentiality agreements, invention agreements, consulting agreements,
trademark registrations and applications therefor, trade names, service marks
and copyright registrations and applications therefor to which WVA or any WVA
Subsidiary is a party or that are used in the operation of the WVA Business and
(ii) any interference actions or adverse claims made or threatened in respect
thereof and any claims made or threatened for alleged infringement thereof are
specifically set forth on Schedule 4.18. To the best knowledge of Telcom or
WVA, neither WVA nor any WVA Subsidiary, in its operations, infringes any valid
patent, trademark, trade name, service xxxx or copyright of any other Person.
Except as set forth on Schedule 4.18, all agreements listed on Schedule 4.18
are valid and enforceable, WVA and the WVA Subsidiaries have performed all
material obligations imposed upon them thereunder, and neither WVA nor any WVA
Subsidiary nor, to the knowledge of Telcom, any other party thereto is in
default thereunder in any material respect, nor is there any event that with
the giving of notice or lapse of time, or both, would constitute a material
default thereunder by WVA, any WVA Subsidiary or, to the knowledge of Telcom,
any other party thereto. Neither Telcom, WVA nor any WVA Subsidiary has
received notice that any party to any such agreement intends to cancel,
terminate or refuse to renew the same or to exercise or decline to exercise any
option or other right thereunder. Neither WVA nor any WVA Subsidiary has
entered into any agreement to indemnify any Person against any claim or charge
of infringement of any patents, trademarks, trade names, copyrights,
technology, know-how, processes or other intangible rights.
4.19 CUSTOMERS
Except as described on Schedule 4.19, neither WVA nor any WVA
Subsidiary has received any customer complaints or expressions of customer
dissatisfaction, in writing or orally, of a material nature concerning the
service provided by any WVA Subsidiary.
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4.20 APPLICABLE LAWS
The WVA Securityholders, WVA and the WVA Subsidiaries have complied,
and are in compliance, with the U.S. Foreign Corrupt Practices Act with respect
to the WVA Business. Except where noncompliance would not individually or in
the aggregate have a material adverse effect on WVA and the WVA Subsidiaries,
taken as a whole, the WVA Securityholders, WVA and the WVA Subsidiaries have
complied, and are in compliance with, all presently existing local and national
Argentine laws, rules, ordinances, decrees and orders applicable to the
operation of the WVA Business or to their owned or leased properties. None of
the WVA Securityholders, WVA or any WVA Subsidiary has reasonably been put on
notice of any actions or omissions which could be deemed an unasserted present
or past unremedied failure by any WVA Securityholder, WVA or any WVA
Subsidiary, as the case may be, to comply with any such laws, rules,
ordinances, decrees and orders, other than actions or omissions which such WVA
Securityholder, WVA or WVA Subsidiary reasonably believes are not failures to
comply. No director, officer, agent, employee or other Person acting on behalf
of any WVA Securityholder, WVA or any WVA Subsidiary has used any funds or
given anything of value, directly or indirectly, for contributions, payments,
gifts or entertainment or made any expenditures, directly or indirectly, to any
government official, political party or candidate for political office to
influence such Person in the discharge of his, her or its official duties. Each
of the WVA Securityholders, WVA and the WVA Subsidiaries has financial controls
and accounting books and records reasonably designed to ensure that such books
and records accurately reflect corporate transactions and the disposition of
assets to the extent relating to the WVA Securityholders, WVA or the WVA
Subsidiaries. No director, officer, agent, employee or other Person acting on
behalf of any WVA Securityholder, WVA or any WVA Subsidiary has accepted or
received any unlawful contributions, payments, gifts or expenditures in
connection with the operation of the WVA Business.
4.21 INSURANCE
Telcom will provide to MIL prior to the Closing Date true and complete
copies of all insurance policies relating to WVA, the WVA Subsidiaries and the
WVA Assets.
4.22 BROKERAGE
None of the WVA Securityholders have retained any broker or finder in
connection with the transactions contemplated by this Agreement. Any brokerage
or finder's fee due to any broker or finder in violation of the foregoing
representation shall be paid by Telcom.
4.23 FULL DISCLOSURE
No information furnished by the WVA Securityholders, WVA or the WVA
Subsidiaries to the MIL Parties in this Agreement (including, but not limited
to, the WVA Financial Statements and all information in the Schedules and
Exhibits) is false or misleading in any material respect. There has been no
omission on the part of the WVA Securityholders,
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WVA or the WVA Subsidiaries to state a material fact necessary to make the
information provided to the MIL Parties not misleading.
ARTICLE V
FURTHER AGREEMENTS
Each of the parties hereto agrees to perform and observe the following
agreements applicable to it:
5.1 SCHEDULES
(a) All representations and warranties herein shall apply to any
exhibits, schedules and certificates delivered by Telcom or any officer thereof
to any MIL Party, and each such certificate shall be deemed to be a
representation by the WVA Securityholders as to the matters set forth therein.
All representations and warranties herein shall apply to any exhibits,
schedules and certificates delivered by any MIL Party or any officer thereof to
Telcom, and each such certificate shall be deemed to be a representation by the
MIL Party as to the matters set forth therein.
(b) On or prior to the Closing Date, Telcom may deliver to MIL one or
more Schedules to this Agreement that have been revised and updated to reflect
changes to the operations or condition of Telcom, WVA or the WVA Subsidiaries
between the date hereof and the Closing. The delivery of any such revised
Schedule shall not affect the rights of any party under Articles VI and VII,
but, if the Closing shall occur, the revised Schedules shall be deemed to
supersede the Schedules delivered herewith, but only with respect to the
representations and warranties given as of the Closing Date.
(c) On or prior to the Closing Date, MIL may deliver to Telcom one or
more Schedules to this Agreement that have been revised and updated to reflect
changes to the operations or condition of the MIL Parties or XxXxx X.X. between
the date hereof and the Closing. The delivery of any such revised Schedule
shall not affect the rights of any party under Articles VI and VII, but, if the
Closing shall occur, the revised Schedules shall be deemed to supersede the
Schedules delivered herewith, but only with respect to the representations and
warranties given as of the Closing Date.
5.2 ACCESS
From the date of this Agreement to and including the Closing Date,
each party shall (and WVA shall cause the WVA Subsidiaries to) grant the other
parties hereto and their respective agents, employees, accountants and
attorneys reasonable access during normal business hours to, and the
opportunity to examine and make copies of, all their books, records, documents,
instruments and papers, and the right to inspect all of their operations,
properties and assets at any reasonable time and provide any authorizations
necessary to examine the status of the WVA Licenses or the XxXxx X.X. Licenses,
as the case may be,
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with the CNT, other than any information which counsel advises should not be
provided prior to the Authorization.
5.3 ADVICE OF CLAIMS
From the date of this Agreement to and including the Closing Date,
each of Telcom and WVA shall (and shall cause the WVA Subsidiaries to) promptly
advise MIL in writing if it has notice or knowledge of the commencement or
threat of any Claims against or affecting WVA or the WVA Subsidiaries or any
rulings, decrees or other material developments in any Claim described on
Schedule 4.16 or arising after the date hereof.
From the date of this Agreement to and including the Closing Date, the
MIL Parties shall promptly advise Telcom in writing if they have notice or
knowledge of the commencement or threat of any Claims against or affecting
XxXxx X.X. or any rulings, decrees or other material developments in any Claim
described on Schedule 3.16 or arising after the date hereof.
5.4 CONDUCT OF BUSINESS
5.4.1 CONDUCT OF WVA BUSINESS
Telcom and WVA shall, and shall cause the WVA Subsidiaries to, to the
best of their respective abilities, (a) preserve and protect the right of the
WVA Subsidiaries to use all the WVA Channels and paging frequencies used by any
WVA Subsidiary as currently intended and (b) take action to satisfy all
applicable build-out and loading requirements. Telcom and WVA shall immediately
notify MIL if any WVA Channels will not be preserved or protected or if
applicable build-out or loading requirements may not be satisfied.
Telcom and WVA shall not (a) take or agree or commit to take any
action that would make any representation or warranty of Telcom and WVA
hereunder inaccurate in any respect at the Closing Date or (b) omit or agree or
commit to omit to take any commercially reasonable action necessary to prevent
any such representation or warranty from being inaccurate in any respect at
such time.
5.4.2 CONDUCT OF XXXXX X.X. BUSINESS
MIL and XxXxx X.X. shall, to the best of their respective abilities,
(a) preserve and protect the right of XxXxx X.X. to use all the XxXxx X.X.
Channels as currently intended and (b) take action to satisfy all applicable
build-out and loading requirements. MIL shall immediately notify Telcom if any
XxXxx X.X. Channels will not be preserved or protected or if applicable
build-out or loading requirements may not be satisfied.
The MIL Parties shall not (a) take or agree or commit to take any
action that would make any representation or warranty of the MIL Parties
hereunder inaccurate in any respect at the Closing Date or (b) omit or agree or
commit to omit to take any commercially reasonable
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action necessary to prevent any such representation or warranty from being
inaccurate in any respect at such time.
5.5 COMPLIANCE WITH LAWS
Each of Telcom and WVA on the one hand and each of the MIL Parties on
the other hand agree that it and any director, officer, agent, employee or
other Person acting on its behalf or on behalf of any Affiliate of it or any of
the WVA Securityholders (a) will not be involved in the offering, paying or
giving of anything of value, either directly or indirectly, to a government
official, political party or candidate for political office to influence such
Person in the discharge of his, her or its official duties, (b) will not engage
in any such unlawful conduct during the time of carrying out their duties, (c)
will maintain accounting books and records in reasonable detail and institute
internal controls to ensure that such books and records accurately reflect
corporate transactions and the disposition of assets, and (d) will not,
directly or indirectly, take any action or fail to take any commercially
reasonable action in each case that could result in the loss of the benefits of
either the XxXxx X.X. Licenses, in the case of MIL, or the WVA Licenses, in the
case of WVA. Telcom and WVA further agree that they will cause the WVA
Subsidiaries to comply with the preceding sentence.
5.6 INSURANCE AND LOSS OF OR DAMAGE TO ASSETS
(a) Telcom and WVA shall not, and shall not permit any WVA Subsidiary
to, decrease the insurance coverage maintained prior to the date hereof in
respect of the WVA Business from the period commencing on the date hereof and
ending on the Closing Date. Telcom and WVA shall give MIL prompt written notice
of (i) any loss, damage or destruction to any material tangible WVA Assets
occurring on or after September 30, 1996 and on or prior to the Closing Date,
(ii) the estimated value of the portion of such assets so lost, damaged or
destroyed, and (iii) the estimated cost of repair, replacement or
reconstruction thereof.
(b) The MIL Parties shall not, and shall not permit XxXxx X.X. to,
decrease the insurance coverage maintained prior to the date hereof in respect
of the XxXxx X.X. Business from the period commencing on the date hereof and
ending on the Closing Date. MIL shall give Telcom and WVA prompt written notice
of (i) any loss, damage or destruction to any material tangible XxXxx X.X.
Assets occurring on or after September 30, 1996 and on or prior to the Closing
Date, (ii) the estimated value of the portion of such assets so lost, damaged
or destroyed, and (iii) the estimated cost of repair, replacement or
reconstruction thereof.
5.7 CONFIDENTIALITY
The Confidentiality Agreement among Telcom, Wireless Ventures of
Brazil, Inc, WVA and MIL dated as of October 28, 1996 (the "Confidentiality
Agreement") shall remain in full force and effect in accordance with its terms
and shall apply to all documents and information supplied in connection
herewith.
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5.8 OTHER COOPERATION
All parties will promptly take, and fully cooperate with the other
parties and their legal counsel and accountants in connection with, any steps
reasonably required to be taken as part of the obligations of the parties under
this Agreement or to promptly satisfy the conditions precedent hereunder,
including, without limitation, obtaining any required Argentine Government
Approval and any filings required by the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act, as amended.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF
THE MIL PARTIES
The obligations of each of the MIL Parties to perform and observe the
covenants, agreements and conditions hereof to be performed and observed by it
at or before the Closing Date shall be subject to the satisfaction of the
following conditions, any of which may be expressly waived by MIL.
6.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES
The representations and warranties of Telcom and WVA contained in
Article IV (including applicable Schedules hereto) shall have been true in all
material respects when made and shall be true in all material respects on and
as of the Closing Date with the same force and effect as though made on and as
of such date, except as affected by the transactions contemplated hereby and
except to the extent that such representations and warranties shall have been
made as of a specified date, in which case such representations and warranties
shall have been true as of the specified date.
6.2 PERFORMANCE OF AGREEMENT
Telcom and WVA shall have performed in all material respects all
obligations and agreements and complied in all material respects with all
covenants and conditions contained in this Agreement to be performed and
complied with by them at or prior to the Closing Date.
6.3 APPROVALS AND CONSENTS
All material approvals and consents from third parties listed on
Schedule 4.3 shall have been obtained.
6.4 SHAREHOLDERS AGREEMENT
MIL Argentina, WVA and XxXxx Holdings shall have entered into a
Shareholders Agreement (the "Shareholders Agreement") in substantially the form
attached hereto as Exhibit 6.4.
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6.5 OPINIONS OF TELCOM'S COUNSEL
MIL shall have received opinions of U.S. and Argentine counsel to the
WVA Securityholders reasonably acceptable to MIL in substantially the form
attached hereto as Exhibit 6.5.
6.6 CONFIDENTIALITY, NONCOMPETITION AND PROPRIETARY INFORMATION AGREEMENTS
On or before the Closing, Telcom, WVA, the WVA Subsidiaries and all
Affiliates Controlled by Telcom, and the officers and directors thereof, shall
have entered into confidentiality agreements, noncompetition agreements and
proprietary information agreements relating to paging and SMR services and
operations in Argentina in substantially the form attached hereto as Exhibit
6.6.
6.7 LEGAL PROCEEDINGS
No law, regulation, administrative ruling or order of any court or
administrative agency of competent jurisdiction shall be in effect that
enjoins, restrains or prohibits consummation of this Agreement, and no
litigation, investigation or administrative proceeding shall be reasonably
likely to enjoin, restrain or prohibit consummation of this Agreement.
6.8 TITLE
To the extent any such Liens exist, Telcom and WVA shall have caused
WVA and the WVA Subsidiaries to have obtained the release of all material Liens
from the WVA Assets, other than Permitted Liens. Telcom and WVA shall have
supplied to MIL evidence satisfactory to MIL establishing WVA's and the WVA
Subsidiaries' good and marketable title to the WVA Assets, free and clear of
all Liens, other than Permitted Liens.
6.9 TELCOM AND WVA OFFICERS' CERTIFICATES
MIL shall have received certificates from the President and Secretary
of Telcom and of WVA, dated the Closing Date, in substantially the form
attached hereto as Exhibit 6.9, certifying that (a) the conditions set forth in
this Article VI have been fulfilled, (b) the representations and warranties of
Telcom and WVA herein are true and correct in all material respects as of the
Closing Date, and (c) such officers reasonably believe that all loading
requirements with respect to WVA Licenses required to be met within 90 days
following the Closing Date will be met.
6.10 DOCUMENTATION RELATING TO WVA LICENSES
MIL shall have received a true and complete copy of each document
granting the WVA Licenses and authorizing the use of each WVA Channel.
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6.11 INTERCOMPANY TRANSACTIONS
All intercompany agreements and transactions between the WVA
Subsidiaries on the one hand and Telcom or its Affiliates (other than the WVA
Subsidiaries) on the other hand shall have been amended or terminated if MIL
shall have reasonably requested such amendment or termination.
6.12 EMPLOYEES AND DIRECTORS
All employees and directors of the WVA Subsidiaries designated by MIL
shall have resigned from their respective positions, effective as of the
Closing Date.
6.13 BRAZIL
The merger contemplated by the Agreement and Plan of Merger among
Nextel Communications, Inc., Dial Call Indimich, Inc. and Wireless Ventures of
Brazil, Inc. dated as of the date hereof shall have been consummated, or if not
yet consummated, such agreement shall remain in full force and effect.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE WVA
SECURITYHOLDERS AND WVA
The obligations of each of Telcom and WVA to perform and observe the
covenants, agreements and conditions hereof to be performed and observed by
Telcom and WVA at or before the Closing Date shall be subject to the
satisfaction of the following conditions, any of which may be expressly waived
in writing by Telcom and WVA.
7.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES
The representations and warranties of the MIL Parties contained in
Article III (including applicable Schedules thereto) shall have been true in
all material respects when made and shall be true in all material respects on
and as of the Closing Date with the same force and effect as though made on and
as of such date, except as affected by transactions contemplated hereby and
except to the extent that such representations and warranties are made as of a
specified date, in which case such representations and warranties shall be true
as of the specified date.
7.2 PERFORMANCE OF AGREEMENT
The MIL Parties shall have performed in all material respects all
obligations and agreements and complied in all material respects with all
covenants and conditions contained in this Agreement to be performed and
complied with by them at or prior to the Closing Date.
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7.3 APPROVALS AND CONSENTS
All material approvals and consents from third parties listed on
Schedule 3.3 shall have been obtained.
7.4 SHAREHOLDERS AGREEMENT
MIL Argentina, WVA and XxXxx Holdings shall have entered into a
Shareholders Agreement in substantially the form attached hereto as Exhibit
6.4.
7.5 MIL OFFICERS' CERTIFICATE
Telcom shall have received certificates of the President and the
Secretary of MIL, dated the Closing Date, in substantially the form attached
hereto as Exhibit 7.5, certifying that (a) all the conditions set forth in this
Article VII have been fulfilled, (b) the representations and warranties of the
MIL Parties herein are true and correct as of the Closing Date, and (c) such
officers reasonably believe that all loading requirements with respect to XxXxx
X.X. Licenses required to be met within 90 days following the Closing Date will
be met.
7.6 LEGAL PROCEEDINGS
No law, regulation, administrative ruling or order of any court or
administrative agency of competent jurisdiction shall be in effect that
enjoins, restrains or prohibits consummation of this Agreement, and no
litigation, investigation or administrative proceeding shall be reasonably
likely to enjoin, restrain or prohibit consummation of this Agreement.
7.7 OPINIONS OF MIL COUNSEL
Telcom shall have received opinions of U.S., Argentine and Cayman
counsel to MIL reasonably acceptable to Telcom in substantially the form
attached hereto as Exhibit 7.7.
7.8 TITLE
To the extent any such Liens exist, MIL shall have caused XxXxx X.X.
to have obtained the release of all material Liens from the XxXxx X.X. Assets,
other than Permitted Liens. MIL shall have supplied to Telcom evidence
satisfactory to Telcom establishing XxXxx X.X.'s good and marketable title to
the XxXxx X.X. Assets, free and clear of all Liens, other than Permitted Liens.
7.9 DOCUMENTATION RELATING TO XXXXX X.X. LICENSES
Telcom shall have received a true and complete copy of each document
granting the XxXxx X.X. Licenses and authorizing the use of each XxXxx X.X.
Channel.
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7.10 INTERCOMPANY TRANSACTIONS
All intercompany agreements and transactions between any of the MIL
Parties and their Affiliates on the one hand and XxXxx X.X. on the other hand
shall have been amended or terminated if Telcom shall have reasonably requested
such amendment or termination.
7.11 BRAZIL
The merger contemplated by the Agreement and Plan of Merger among
Nextel Communications, Inc., Dial Call Indimich, Inc. and Wireless Ventures of
Brazil, Inc. dated as of the date hereof shall have been consummated, or if not
yet consummated, such agreement shall remain in full force and effect.
7.12 CONFIDENTIALITY, NONCOMPETITION AND PROPRIETARY INFORMATION AGREEMENTS
On or before the Closing, each of the MIL Parties and all Affiliates
Controlled by the MIL Parties, and the officers and directors thereof, shall
have entered into confidentiality agreements, noncompetition agreements and
proprietary information agreements relating to paging and SMR services and
operations in Argentina in substantially the form attached hereto as Exhibit
6.6.
ARTICLE VIII
INDEMNIFICATION AND SURVIVAL OF WARRANTIES
8.1 INDEMNIFICATION BY WVA SECURITYHOLDERS
Telcom agrees to indemnify and hold harmless, on an after-tax basis,
the MIL Parties, their respective successors and permitted assigns, and the
officers, directors, affiliates, employees, Controlling Persons and agents of
the foregoing and to hold each such party harmless against and in respect of
any and all losses, damages, costs and expenses, including attorneys' fees
("Damages"), incurred by any such party by reason of (a) a breach of any of the
representations or warranties made in this Agreement by the WVA Securityholders
or WVA, (b) the breach of any covenant contained herein by the WVA
Securityholders or WVA prior to the Closing, or (c) the breach of undertakings
of the WVA Securityholders or WVA in this Agreement or any other document,
supplement, instrument, agreement, letter, amendment or assignment executed in
connection herewith, or in any officers' certificate or other certificate
delivered to MIL or its Affiliates at or in connection with the Closing;
provided that Telcom shall not be obligated to make any payments under this
Section 8.1 unless and until the amount of Damages exceeds US$100,000 after
which Telcom shall be obligated to pay the entire amount of such Damages,
including the first US$100,000.
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8.2 INDEMNIFICATION BY MIL
The MIL Parties agree to indemnify and hold harmless, on an after-tax
basis, WVA, the WVA Securityholders, their successors and permitted assigns,
and the officers, directors, affiliates, employees, Controlling Persons and
agents of the foregoing and to hold each such party harmless against and in
respect of any and all Damages incurred by such party by reason of (a) breach
of any of the representations or warranties made in this Agreement by the MIL
Parties, (b) the breach of any covenant contained herein by the MIL Parties
prior to the Closing, or (c) the breach of undertakings of the MIL Parties in
any other document, supplement, instrument, agreement, letter, amendment or
assignment executed in connection herewith, or in any officers' certificate or
other certificate delivered to Telcom at or in connection with the Closing;
provided that the MIL Parties shall not be obligated to make any payments under
this Section 8.2 unless and until the amount of Damages exceeds $100,000, after
which the MIL Parties shall be obligated to pay the entire amount of such
Damages, including the first $100,000.
8.3 PROCEDURE
With respect to the claims made by third parties, if any of the MIL
Parties or the WVA Securityholders are threatened with any claim, or any claim
is presented to or any action or proceeding is commenced against any of the MIL
Parties or the WVA Securityholders, that may give rise to the right of
indemnification hereunder, the MIL Parties or the WVA Securityholders, as the
case may be (the "Indemnitee"), will give written notice thereof promptly (and
in no event later than the last survival date of the representation and
warranty for the breach of which indemnification is sought) to the party or
parties bearing the indemnification obligation (the "Indemnifying Party");
provided that the failure to give notice in accordance with this Section 8.3
shall not prevent enforcement hereunder if such failure is not prejudicial to
the Indemnifying Party. The Indemnifying Party shall have the right to
participate in the defense of such claim, action or proceeding, and, to the
extent the Indemnifying Party so desires, jointly with any other Indemnifying
Party similarly notified, to assume the defense thereof with counsel mutually
satisfactory to such parties and the Indemnitee, in which case every Indemnitee
shall have the right to participate through counsel of its own choosing (and
whose fees shall be paid by such Indemnitee). If the Indemnifying Party and the
Indemnitee agree upon mutually satisfactory counsel to assume the defense, the
Indemnifying Party shall assume the expense of such counsel's fees and shall no
longer assume the expense of the Indemnitee's attorneys' fees. In the event the
Indemnifying Party undertakes to compromise or defend any such liability, the
Indemnifying Party shall so notify the Indemnitee in writing promptly of its
intention to do so, and the Indemnitee shall cooperate with the Indemnifying
Party and its counsel in the compromising of or the defending against any such
liabilities or claims, at the expense of the Indemnifying Party. Such
cooperation shall include, but shall not be limited to, the provision to the
Indemnifying Party of reasonable access to the Indemnitee's business records,
research, documents and employees as they relate to the defense of any
indemnified claim. In response to a bona fide settlement offer, the
Indemnifying Party may settle the monetary portion of an indemnifiable
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matter that it has duly elected to contest without the consent of the Indemnitee
unless such settlement has an adverse effect upon the Indemnitee, in which case
such matters shall be settled only with the consent of the Indemnitee; provided,
however, that the Indemnifying Party shall not have the right to agree to a
settlement involving injunctive or other equitable relief without obtaining the
prior written consent of the Indemnitee. In the event the Indemnitee declines to
consent to the monetary settlement described in the preceding sentence, then the
Indemnitee shall have no right to indemnification beyond, and the Indemnifying
Party shall have no obligation to pay damages and attorneys' fees hereunder in
excess of, the amount of the proposed settlement.
8.4 FORM OF PAYMENT
The Indemnifying Party may satisfy its obligations under this Article
VIII in cash or at its option in MIL Argentina Securities, based on the value
of the sum of Invested Capital divided by the number of MIL Argentina
Securities then outstanding.
8.5 SURVIVAL
The covenants, agreements, representations and warranties made by the
parties in or pursuant to this Agreement shall survive the Closing for two
years, except as otherwise set forth herein, and except that (a) the
representations and warranties contained in Sections 3.11 and 4.11 shall
survive until expiration of the statute of limitations applicable to the
matters covered thereby (giving effect to any waiver, mitigation or extension
thereof), if later, and (b) the agreements contained in this Article VIII shall
survive indefinitely.
ARTICLE IX
TERMINATION
9.1 TERMINATION
This Agreement may be terminated and the transactions contemplated
hereby may be abandoned at any time prior to the Closing Date:
(a) by mutual written consent;
(b) by either MIL or Telcom if the transactions
contemplated hereby shall not have been consummated by the first anniversary of
the date hereof; provided that if the transactions contemplated hereby shall
not have been consummated by such first anniversary, either MIL or Telcom (the
"Contracting Party") may after such first anniversary and on or prior to the
second anniversary of the date hereof enter into an agreement with a third
party which directly or indirectly is authorized to use SMR channels in
Argentina under which agreement the Contracting Party and such third party
would each have an ownership interest in a Person providing SMR services in
Argentina (a "Contract") only on the following conditions:
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(i) the Contracting Party shall have provided
to the other party (the "Tag-Along Party") written notice at least 30
days prior to entering into such Contract;
(ii) the Tag-Along Party shall have the right,
exerciseable upon written notice to the Contracting Party describing
in reasonable detail all material terms of the proposed transaction
delivered within 15 days after its receipt of notice pursuant to
clause (i), to become a party to such Contract with an economic
interest equal to the Contracting Party's economic interest under such
Contract and voting rights, as between the Contracting Party and the
Tag-Along Party, comparable to those set forth in the form of
Shareholders Agreement; and
(iii) if either or both of MIL and Telcom would be
required by applicable law or regulation to divest all or any portion
of their respective Licenses or Channels as a result of the
consummation of the transactions contemplated by the Contract, MIL and
Telcom shall share equally in the net proceeds of such sale;
provided, further, that nothing in this Agreement shall prevent either MIL or
the WVA Securityholders from transferring their entire interests in XxXxx X.X.
or the WVA Subsidiaries, respectively, to a third party at any time after the
first anniversary of the date hereof;
(c) by either MIL or Telcom if a court of competent
jurisdiction or governmental authority shall have issued a nonappealable final
order, decree or ruling or taken any other action, in each case having the
effect of permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated hereby;
(d) by MIL following a breach of any representation,
warranty, covenant or agreement on the part of the WVA Securityholders or WVA
set forth in this Agreement such that the conditions set forth in Section 6.1
or 6.2 would not be satisfied; or by Telcom following a breach of any
representation, warranty, covenant or agreement on the part of the MIL Parties
set forth in this Agreement such that the conditions set forth in Section 7.1
or 7.2 would not be satisfied, which breach shall not have been cured within 20
business days following receipt by any of the MIL Parties of notice of such
breach; or
(e) by MIL if any representation or warranty of the WVA
Securityholders and WVA shall have become untrue such that the conditions set
forth in Article VI cannot reasonably be expected to be satisfied by the date
set forth in Section 9.1(b); or by Telcom if any representation or warranty of
the MIL Parties shall have become untrue such that the conditions set forth in
Article VII cannot reasonably be expected to be satisfied by the date set forth
in Section 9.1(b).
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9.2 EFFECT OF TERMINATION
(a) In the event of any termination pursuant to this Article IX (other
than pursuant to Section 9.1(a)), written notice setting forth the reasons
therefor shall forthwith be given by the terminating party to the other party
hereto and neither party shall have any liability to the other party of any
nature whatsoever due to such termination, except for damages resulting from a
willful breach by the other party, other than pursuant to Section 9.2(b).
(b) Notwithstanding any termination pursuant to this Article IX (other
than any termination by MIL pursuant to Section 9.1(d)), for the period
beginning on the date hereof and ending on the second anniversary of the date
hereof, MIL shall provide written notice to Telcom as far in advance as
reasonably practicable, but at least 90 days prior to the date of anticipated
deployment of digital infrastructure with respect to any block of XxXxx X.X.
Channels (the "Deployment Date"). Telcom shall have the right, exerciseable by
Telcom upon written notice to MIL within 30 days following MIL's notice, to
cause the WVA Subsidiaries to exchange an equal number of WVA Channels with
XxXxx X.X. such that each of XxXxx X.X and the WVA Subsidiaries would have
authorization to use their respective Channels, to the extent feasible, located
contiguously; provided that at least 30 days prior to the Deployment Date, (i)
Telcom shall have provided to MIL evidence reasonably satisfactory to MIL that
such Channels are cleared and are not subject to any interference and (ii) all
necessary regulatory approvals relating to such exchange, if any, shall have
been obtained. If the conditions set forth in clauses (i) and (ii) of the
previous sentence shall not have been satisfied at least 30 days prior to the
Deployment Date, MIL shall have the right to deploy digital technology with
respect to such block of XxXxx X.X. Channels, and Telcom shall have no further
right to require the exchange of WVA Channels with respect to such block of
XxXxx X.X. Channels. The parties hereto will take all commercially reasonable
steps required to effect such exchange of channels, including, but not limited
to, making any required filings with the CNT.
ARTICLE X
GENERAL
10.1 EXPENSES
If the transactions contemplated by this Agreement are consummated,
the MIL Parties shall pay their own fees, costs and expenses, and Telcom and
WVA shall pay their own fees, costs and expenses, incident to the negotiation,
preparation and carrying out of this Agreement; provided that MIL Argentina
shall not bear any fees, costs or expenses relating to the Merger for the
benefit of any of the MIL Parties, WVA or any of the WVA Securityholders.
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10.2 AMENDMENT
The parties may amend, modify or supplement this Agreement at any
time, but only in a written amendment duly executed on behalf of each of the
parties.
10.3 HEADINGS
The headings preceding the text of Sections of this Agreement are for
convenience only and shall not be deemed parts thereof.
10.4 APPLICABLE LAW
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware, as applied to contracts
executed and to be fully performed in such state. Each of the parties hereto
(a) consents to submit itself to the personal jurisdiction of any federal court
located in the state of Virginia or any Virginia state court if any dispute
arises out of this Agreement or any of the transactions contemplated by this
Agreement, (b) agrees that it will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court, and (c)
agrees that it will not bring any action relating to this Agreement or any of
the transactions contemplated by this Agreement in any court other than a
federal court sitting in the state of Virginia or a Virginia state court.
10.5 PARTIES IN INTEREST
All the terms and provisions of this Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective successors and
permitted assigns of the parties hereto, whether herein so expressed or not.
This Agreement shall not be assigned by any party hereto in whole or in part
without the prior written consent of the other parties hereto; provided,
however, that MIL may at any time assign all or part of its right, title and
interest in, to and under this Agreement and the documents, agreements and
supporting papers delivered in connection herewith to any Affiliate of MIL;
provided, further, that nothing contained in this Agreement shall prevent MIL
and its Affiliates, on the one hand, or Telcom and its Affiliates that it
Controls, on the other hand, from transferring direct or indirect interests in
XxXxx X.X. or the WVA Subsidiaries, as the case may be, prior to the Closing
Date so long as on the Closing Date (i) MIL and its Affiliates own directly or
indirectly at least 50% of the capital stock of XxXxx X.X. and (ii) Telcom and
its Affiliates that it Controls own directly or indirectly at least 50% of the
capital stock of each of the WVA Subsidiaries; provided, further that nothing
contained in this Agreement shall prevent Telcom and the other members of WVA
from transferring their interests in WVA prior to Closing to an intermediate
holding company Controlled by one or more members of WVA.
10.6 WAIVERS
Any terms, covenants, representations, warranties or agreements of any
party hereto may be waived at any time by an instrument in writing executed by
the party for whose benefit
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such terms exist. The failure of any party at any time or times to require
performance of any provisions hereof shall in no manner affect its right at a
later time to enforce the same. No waiver by any party of any condition or
breach of any terms, covenants, representations, warranties or agreements
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 other condition or any breach of any other terms, covenants,
representations, warranties or agreements.
10.7 NOTICES
Any notice or demand desired or required to be given hereunder shall
be in writing and deemed given when personally delivered or deposited in the
mail, postage prepaid, sent certified or registered, or when delivered by
facsimile, and addressed as respectively set forth below, or to such other
address as any party shall have previously designated by such a notice. Any
notice so delivered personally or by facsimile, transmission confirmed, shall
be deemed to be received on the date of delivery and any notice so mailed shall
be deemed to be received three days after the date on which it was mailed.
Notices to the parties shall be sent as follows:
(a) To MIL and the MIL Parties:
XxXxx International, Ltd.
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: General Counsel
Fax: (000) 000-0000
with a copy to:
Xxxxxxx Coie
0000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
File #: 24570-10
(b) To Telcom:
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Telcom Ventures, LLC
Arlington Courthouse Plaza II
0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Xx. Xxxxxxxx Xxxxx
Fax: (000) 000-0000
(with a copy to General Counsel)
and with a copy to:
Xxxxx Xxxxxxxxxx
0000 Xxxxxx xx Xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
10.8 COUNTERPARTS
This Agreement may be executed simultaneously in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.9 ENTIRE UNDERSTANDING
The terms set forth in this Agreement and the Confidentiality
Agreement are intended by the parties as a final, complete and exclusive
expression of the terms of their agreement and may not be contradicted,
explained or supplemented by evidence of any prior agreement, any
contemporaneous oral agreement or any consistent additional terms.
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IN WITNESS WHEREOF, the parties hereto have entered into and signed
this Agreement as of the date and year first above written.
XxXXX INTERNATIONAL, LTD.
By /s/ XXXXX X. XXXXXXXXX
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Its President
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XxXXX INTERNATIONAL (DELAWARE), LTD.
By /s/ XXXXX X. XXXXXXXXX
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Its President
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XxXXX INTERNATIONAL (HOLDINGS), LTD.
By /s/ XXXXX X. XXXXXXXXX
-----------------------------------------
Its President
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XxXXX INTERNATIONAL (ARGENTINA) LLC
By /s/ XXXXX X. XXXXXXXXX
-----------------------------------------
Its President
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TELCOM VENTURES, LLC
By /s/ XXXXXXXX XXXXX
-----------------------------------------
Its President
------------------------------------
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WIRELESS VENTURES OF ARGENTINA, L.L.C.
By /s/ XXXXXXXX XXXXX
-----------------------------------------
Its President
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