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EXHIBIT 10.6
AMENDMENT NO. 1 TO
JOINT VENTURE AGREEMENT
This Amendment No. 1 (this "Amendment") dated as of April 25, 1997 to
the Joint Venture Agreement dated as of October 28, 1996 (the "Agreement") 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 99%-owned subsidiary of MIL Delaware ("MIL
Holdings"), XxXxx International (Argentina) LLC, a Cayman Islands limited life
company ("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 which is 99%-owned by Telcom ("WVA").
RECITALS
A. MIL, MIL Argentina, Telcom and WVA entered into a Purchase Agreement
dated as of October 28, 1996 (the "Paging Agreement") relating to a proposed
joint venture in the paging business in Argentina, and the parties hereto
entered into the Agreement to provide for a subsequent combination of the
paging joint venture with a joint venture in the business of Specialized Mobile
Radio in Argentina ("SMR"), subject to obtaining the Authorization (as defined
in the Agreement).
B. The Authorization has been obtained, and the transactions contemplated
by the Paging Agreement have not yet been consummated.
C. Simultaneously herewith, MIL, MIL Argentina, Telcom and WVA are
entering into an agreement terminating, rescinding and canceling the Paging
Agreement.
D. MIL Argentina intends to transfer the capital stock of XxXxx X.X. (as
defined in the Agreement) held by it to MIL Holdings.
E. The parties hereto desire to amend certain provisions of the Agreement
pursuant to Section 10.2 thereof in order to provide for the creation of a
holding company, XxXxx International (Argentina), Ltd., a company organized
under the laws of the Cayman Islands (the "JVC"), to which MIL Holdings will
contribute the capital stock of XxXxx X.X. and WVA will contribute the capital
stock of the WVA Subsidiaries (as defined in the Agreement), in each case in
exchange for 50% of the share capital of the JVC .
In consideration of the mutual promises contained herein, the parties
hereto agree as follows:
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ARTICLE I
AMENDMENTS
1.1 DEFINED TERMS
Unless otherwise defined herein, terms defined in the Agreement are
used herein as therein defined.
1.2. AMENDMENTS
(a) The definitions of "Telcom Invested Capital" and "Shareholders
Agreement" set forth in Section 1.1 of the Agreement are hereby deleted, the
following definitions of "Appraised Fair Market Value," "Claim Notice," "JVC,"
"Members Agreement," "MIL Interim Financial Statements," "WVA Interim Financial
Statements" and "WVA Invested Capital" are hereby inserted in Section 1.1 in
alphabetical order, and the definitions of "Accountants" and "Closing Date" set
forth in Section 1.1 of the Agreement are hereby amended and restated to read
in their entirety as follows:
"Accountants" has the meaning set forth in Section 2.3(d).
"Appraised Fair Market Value" has the meaning set forth in
Section 8.4.
"Claim Notice" has the meaning set forth in Section 8.3.
"Closing Date" has the meaning set forth in Section 2.2.
"JVC" means XxXxx International (Argentina), Ltd., a company
organized under the laws of the Cayman Islands.
"Members Agreement" has the meaning set forth in Section 6.4.
"MIL Interim Financial Statements" has the meaning set forth
in Section 3.7.2.
"WVA Interim Financial Statements" has the meaning set forth
in Section 4.7.2.
"WVA Invested Capital" has the meaning set forth in Section
2.1.2(b)(iii).
(b) Article II of the Agreement is hereby amended and restated to
read in its entirety as follows (and Exhibit 2.1.1 in the form attached hereto
is hereby added to the Agreement):
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2.1 ESTABLISHMENT OF THE JOINT VENTURE
2.1.1 ESTABLISHMENT OF THE JVC
As soon as practicable after the date hereof, the
parties hereto shall cooperate to form the JVC as a company
organized under the laws of the Cayman Islands. The
Memorandum and Articles of Association of the JVC shall be
substantially in the form attached as Exhibit 2.1.1 hereto.
2.1.2 CAPITAL CONTRIBUTIONS
(a) At least three business days prior to the
Closing Date, MIL Holdings shall provide to WVA a good faith
estimate of the amounts described in Section
2.1.2(b)(iii)(x)(2), and WVA shall provide MIL Holdings a good
faith estimate of the amount described in Section
2.1.2(b)(iii)(y)(2).
(b) On or prior to the Closing Date:
(i) MIL Argentina shall transfer all of
the issued and outstanding capital stock of XxXxx X.X. held by
it which is registered at such time before the Public Registry
of Commerce of the City of Buenos Aires to the JVC, and MIL
Holdings shall simultaneously transfer the one share of the
issued and outstanding capital stock of XxXxx X.X. held by it
to the joint ownership of MIL Holdings and WVA;
(ii) WVA shall transfer all of the issued
and outstanding capital stock of the WVA Subsidiaries held by
it which is registered at such time before the Public Registry
of Commerce of the City of Buenos Aires to the JVC, and WVA
shall cause Xxxxxx Xxxxxxx to transfer the one share of the
capital stock of each of the WVA Subsidiaries held by him to
the joint ownership of MIL Holdings and WVA;
(iii) MIL Holdings or WVA, as the case may
be, shall contribute cash (the "True-Up") to the JVC, such
that after such cash capital contribution, (x) the sum of (1)
$10,000,000 (the value of the capital stock of XxXxx X.X. as
of October 28, 1996), (2) all cash equity investments by MIL
Holdings and its Affiliates in XxXxx X.X., less any cash
dividends or other cash or noncash distributions to MIL
Holdings and its Affiliates by XxXxx X.X., in each case
between October 28, 1996 and the Closing Date, and (3) the
True-Up paid by MIL Holdings, if any ((x) (1), (2) and (3)
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together being referred to herein as the "MIL Holdings
Invested Capital"), is equal to (y) the sum of (1) $10,000,000
(the value of the capital stock of the WVA Subsidiaries as of
October 28, 1996), (2) all cash equity investments by the WVA
Securityholders and their Affiliates in the WVA Subsidiaries,
less any cash dividends or other cash or noncash distributions
to the WVA Securityholders and their Affiliates by the WVA
Subsidiaries, in each case between October 28, 1996 and the
Closing Date, and (3) the True-Up paid by WVA, if any ((y)
(1), (2) and (3) together being referred to herein as the "WVA
Invested Capital"; the WVA Invested Capital or the MIL
Holdings Invested Capital being referred to together or
separately as the "Invested Capital"); provided that "Invested
Capital" shall exclude contributed services or intangible
rights in excess of the cash that would have been paid to the
party contributing such services or rights in an arm's-length
transaction with a non-affiliate;
(iv) to the extent that WVA shall have,
prior to the Closing Date, made capital contributions to the
WVA Subsidiaries or MIL Holdings shall have made capital
contributions to XxXxx X.X., in each case which shall not have
been formally registered as capital increases of the relevant
company, the parties hereto shall treat such capital
contributions for purposes of clause (iii) above as if the
corresponding capital increases had been made prior to the
Closing Date, and WVA and MIL Holdings each hereby assign all
rights to such capital contributions to the JVC and agree to
take all actions necessary to cause the registration of such
capital contributions as capital increases in the name of the
JVC;
(v) the JVC shall repurchase one share
of its share capital from each of Xxxx Xxxxxxx and Xxxxx
Xxxxx, in each case for US$0.001; and
(vi) the JVC shall issue 20,898,600 fully
paid shares of its share capital to each of MIL Holdings and
WVA in exchange for their respective Invested Capital
contributed to the JVC pursuant to Sections 2.1.2(b)(i)
through (iii), equal in each case to 50% of the issued and
outstanding share capital of the JVC.
2.1.3 INSTRUMENTS OF SALE AND TRANSFER; FURTHER
ASSURANCES
On or prior to the Closing Date:
(a) MIL Holdings shall deliver to the JVC
evidence that all necessary action has been taken to vest in
the JVC, MIL
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Holdings and WVA, on the Closing Date, all MIL Holdings'
right, title and interest to all of the capital stock of XxXxx
X.X., all as described in Section 2.1.2(b)(i), including but
not limited to (i) a copy of the letters delivered by MIL
Holdings and MIL Argentina to XxXxx X.X. notifying XxXxx X.X.
of the transfers of the capital stock of XxXxx X.X. described
in Section 2.1.2(b)(i) and requiring the registration of such
transfers in the registry book of XxXxx X.X., with signatures
duly certified by a notary public and legalized by the
"Apostille" procedure, (ii) stock certificates of XxXxx X.X.
properly endorsed to and registered in the name of the JVC,
MIL Holdings and WVA and (iii) evidence of registration of
such transfers in the registry book of XxXxx X.X.
(b) WVA shall deliver to the JVC evidence that
all necessary action has been taken to vest in the JVC, MIL
Holdings and WVA, on the Closing Date, all WVA's right, title
and interest in and to all of the capital stock of the WVA
Subsidiaries, all as described in Section 2.1.2(b)(ii),
including but not limited to (i) a copy of the letters
delivered by WVA to each of the WVA Subsidiaries notifying
each of them of the transfers of their respective capital
stock described in Section 2.1.2(b)(ii) and requiring the
registration of such transfers in their respective registry
books with signature duly certified by a notary public and
legalized by the "Apostille" procedure, (ii) stock
certificates of the WVA Subsidiaries properly endorsed to and
registered in the name of the JVC, MIL Holdings and WVA and
(iii) evidence of registration of such transfers in the
registry books of the WVA Subsidiaries.
2.2 CLOSING
The closing (the "Closing") of the transactions
contemplated hereby shall take place on May 6, 1997 (the
"Closing Date") at the offices of MIL, 0000 Xxxxxx Xxxxxx,
Xxxxx 0000, Xxxxxxx, Xxxxxxxxxx, with effect as of the close
of business on April 30, 1997, or at such other place and time
as MIL and Telcom may agree.
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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 the MIL Holdings
Invested Capital and (ii) a balance sheet of XxXxx X.X. as of
the Closing Date (the "MIL Closing Balance Sheet"), both of
which shall have been reviewed by XxXxx X.X.'s regular
independent accountants, together with detailed support for
such calculation, and Telcom shall provide to MIL (i) a
statement certifying its calculation of the WVA Invested
Capital and (ii) a consolidated balance sheet of the WVA
Subsidiaries as of the Closing Date (the "WVA Closing Balance
Sheet," and together with the MIL Closing Balance Sheet, the
"Closing Balance Sheets"), 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 respective financial statements of XxXxx X.X. and the WVA
Subsidiaries, 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 Holdings'
regular independent accountants shall verify that XxXxx X.X.
had no long-term liabilities and KPMG Peat Marwick shall
verify that the WVA Subsidiaries had no long-term liabilities,
in each case as of the Closing Date.
(b) To the extent that the either party's (i)
Closing Balance Sheet indicates that the sum of the current
liabilities and long-term liabilities of such party exceeded
the current assets of such party as of the Closing Date by
more than US$1,000,000 and/or (ii) certified statement of
Invested Capital indicates that the amount of such party's
Invested Capital used for purposes of the calculations set
forth in Section 2.1.2(b)(iii) exceeded the amount of such
party's Invested Capital as of the Closing Date as shown on
such certified statement of Invested Capital (the aggregate
amount of such party's excesses being referred to herein as
such party's "Shortfall," and such party being referred to
herein as the "Deficient Party"), the Deficient Party shall,
subject to paragraphs (c) through (f) below, pay the JVC an
amount equal to the Deficient Party's Shortfall in cash within
15 days of the Deficient Party's delivery of its Closing
Balance Sheet.
(c) If one party (the "Disagreeing Party")
disagrees with the other party's calculations described in
Section 2.3(b), the
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Disagreeing Party may, within 30 days of the delivery of the
other party's Closing Balance Sheet, deliver a notice to the
other party disagreeing with such calculation and setting
forth its calculation. Any such notice of disagreement shall
specify those items or amounts as to which the Disagreeing
Party disagrees, and the Disagreeing Party shall be deemed to
have agreed with all other items and amounts contained in the
other party's Closing Balance Sheet.
(d) If a notice of disagreement shall be
delivered by a Disagreeing Party 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 other party's Shortfall, which
amount shall not be less than the amount thereof shown in the
other party's calculations delivered pursuant to Section
2.3(b) or more than the amount thereof shown in the
Disagreeing Party's calculation delivered pursuant to Section
2.3(c). If, during such period, MIL and Telcom are unable to
reach such agreement, the MIL Parties, on the one hand, and
Telcom and WVA, on the other hand, shall promptly thereafter
cause the JVC to engage 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
other party's Shortfall. The other party and its Affiliates
shall provide all detailed documentation necessary to support
the computation underlying the other party's calculation of
the other party's Shortfall. In making such calculation, the
Accountants shall consider for change only those items or
amounts in the other party's Closing Balance Sheet or
statement of Invested Capital or the other party's calculation
of its own Shortfall as to which the Disagreeing Party 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 the Disagreeing Party if the difference between the
Accountants' calculation of the other party's Shortfall and
the Disagreeing Party's calculation of the other party's
Shortfall delivered pursuant to Section 2.3(c) is greater than
the difference between the Accountants' calculation of the
other party's Shortfall and the other party's calculation of
the other party's Shortfall delivered pursuant to Section
2.3(b), (ii) by the other party if the
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first such difference is less than the second such difference,
and (iii) otherwise equally by MIL and Telcom.
(e) If the Accountants shall have calculated
MIL's or Telcom's Shortfall, MIL or Telcom, as the case may
be, agrees to pay the JVC the amount of any Shortfall, as
calculated by the Accountants pursuant to Section 2.3(d), in
cash within ten days of receipt of the Accountants'
calculation, to the extent such payment has not already been
made pursuant to Section 2.3(b). Any Shortfall may be
satisfied, at the option of the party having an obligation to
pay a Shortfall, by payment of cash to the JVC or by the
exercise of the option to require the Company to repurchase
shares of the Company's share capital pursuant to Section 6 of
the Members Agreement.
(f) MIL and Telcom agree that they will, and
agree to cause their respective independent accountants, MIL
Holdings, MIL Argentina, XxXxx X.X., WVA and the WVA
Subsidiaries to, cooperate and assist in the Accountants'
review of the Closing Balance Sheets, including, without
limitation, the making available to the extent necessary of
books, records, work papers and personnel.
(c) Section 3.7 of the Agreement is hereby amended and restated to
read in its entirety as follows:
3.7 FINANCIAL STATEMENTS
3.7.1 GENERAL
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.
3.7.2 INTERIM FINANCIAL STATEMENTS
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MIL has delivered or will deliver to Telcom prior to the
Closing monthly financial statements of XxXxx X.X. for periods
subsequent to September 30, 1996 (the "MIL Interim Financial
Statements"). The financial statements of XxXxx X.X. as of
and for the three months ended March 31, 1997 are attached in
Schedule 3.7. The MIL Interim Financial Statements present
fairly the financial position and results of operations of
XxXxx X.X. as of the dates and for the periods indicated
therein in accordance with U.S. generally accepted accounting
principles consistently applied, subject to normal year-end
adjustments of a type consistent with prior years and without
footnotes.
(d) The first sentence of Section 3.12(a) of the Agreement is
hereby amended and restated to read in its entirety as follows:
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.
(e) The first sentence of Section 3.22 of the Agreement is hereby
amended and restated to read in its entirety as follows:
None of the MIL Parties has retained any broker or finder in
connection with the transactions contemplated by this
Agreement.
(f) The following new Section 3.24 is hereby inserted at the end
of Article III of the Agreement:
3.24 NO PLAN OR INTENTION TO TRANSFER
None of the MIL Parties has any plan or intention to
sell, transfer or otherwise dispose of any of the share
capital of the JVC received by MIL Holdings at the Closing.
(g) The second sentence of Section 4.1 of the Agreement is hereby
amended and restated to read in its entirety as follows:
WVA and each of the WVA Subsidiaries has all corporate power
and authority or limited liability company 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 or
limited liability
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company power and authority would not have a material adverse
effect on WVA and the WVA Subsidiaries, taken as a whole.
(h) Section 4.7 of the Agreement is hereby amended and restated to
read in its entirety as follows:
4.7 FINANCIAL STATEMENTS
4.7.1 GENERAL
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.
4.7.2 INTERIM FINANCIAL STATEMENTS
Telcom has delivered or will deliver to MIL prior to the
Closing monthly consolidated financial statements of the WVA
Subsidiaries for periods subsequent to September 30, 1996 (the
"WVA Interim Financial Statements"). The consolidated
financial statements of the WVA Subsidiaries as of and for the
three months ended March 31, 1997 are attached in Schedule
4.7. The WVA Interim Financial Statements present fairly the
consolidated financial position and results of operations of
the WVA Subsidiaries as of the dates and for the periods
indicated therein in accordance with U.S. generally accepted
accounting principles consistently applied; subject to normal
year-end adjustments of a type consistent with prior years and
without footnotes.
(i) Section 4.9 of the Agreement is hereby amended and restated to
read in its entirety as follows:
There are no long-term liabilities of 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,
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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 the WVA Subsidiaries are past due, and all such
liabilities were incurred in the ordinary course of business
on terms consistent with past practices.
(j) Section 4.10 of the Agreement is hereby amended and restated
to read in its entirety as follows:
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 the WVA Subsidiaries on the other hand.
(k) Paragraphs (a), (d) and (g) of Section 4.12 of the Agreement
are hereby amended and restated to read in their entirety as follows:
(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 the WVA
Subsidiaries. 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.
(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 the WVA
Subsidiaries has good and marketable title thereto. The WVA
Subsidiaries have valid leasehold interests in all leased
assets.
(g) No assets used by the WVA Subsidiaries are owned by
any Affiliate of the WVA Subsidiaries (excluding the WVA
Subsidiaries).
(l) Section 4.15 of the Agreement is hereby amended and restated
to read in its entirety as follows:
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 the WVA
Subsidiaries are a party,
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including, without limitation, security agreements,
conditional sale agreements and instruments relating to the
borrowing of money and all material contracts to which WVA is
a party that directly relate to the WVA Business or the WVA
Assets. 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 the WVA Subsidiaries, taken as a whole,
or which could reasonably be expected to materially adversely
affect the business prospects of 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.
(m) Section 4.16 of the Agreement is hereby amended and restated
to read in its entirety as follows:
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 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 the WVA Subsidiaries, taken as a whole.
(n) The first two paragraphs and the first sentence of the third
paragraph of Section 4.18 of the Agreement are hereby amended and restated to
read in their entirety as follows:
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The WVA Subsidiaries own, or have full and unrestricted rights
within Argentina (to the extent available under Argentine law)
to:
(a) all material trademarks, trade names and
copyrights, including, but not limited to, "AirLink," now used
by the WVA Subsidiaries, 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 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 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. 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
the WVA Subsidiaries 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 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.
(o) The second sentence of Section 4.20 of the Agreement is hereby
amended and restated to read in its entirety as follows:
Except where noncompliance would not individually or in the
aggregate have a material adverse effect on 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,
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ordinances, decrees and orders applicable to the operation of
the WVA Business or to their owned or leased properties.
(p) The following new Section 4.24 is hereby inserted at the end
of Article IV of the Agreement:
4.24 NO PLAN OR INTENTION TO TRANSFER
WVA has no plan or intention to sell, transfer or
otherwise dispose of any of the share capital of the JVC
received by WVA at the Closing.
(q) Section 5.1(a) of the Agreement is hereby amended and restated
to read in its entirety as follows:
(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 or
WVA, and each such certificate shall be deemed to be a
representation by the MIL Party as to the matters set forth
therein.
(r) The parenthetical phrase in Section 5.2 of the Agreement is
hereby amended and restated to read in its entirety as follows:
(and WVA shall cause the WVA Subsidiaries to and the MIL
Parties shall cause XxXxx X.X. to)
(s) Section 5.3 of the Agreement is hereby amended and restated to
read in its entirety as follows:
5.3 ADVICE OF CLAIMS
From October 28, 1996 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 October 28, 1996.
From October 28, 1996 to and including the Closing
Date, the MIL Parties shall (and shall cause XxXxx X.X. to)
promptly advise Telcom in writing if they have notice or
knowledge of the
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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 October 28, 1996.
(t) The first sentence of Section 5.4.2 of the Agreement is hereby
amended and restated to read in its entirety as follows:
The MIL Parties shall, and shall cause XxXxx X.X. to,
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.
(u) The last sentence of Section 5.5 of the Agreement is hereby
amended and restated to read in its entirety as follows:
The MIL Parties further agree that they will cause XxXxx X.X.
to comply with the preceding sentence, and Telcom and WVA
further agree that they will cause the WVA Subsidiaries to
comply with the preceding sentence.
(v) The reference to "MIL" in the second sentence of Section
5.6(b) is hereby amended to read "The MIL Parties."
(w) The following new sentences are hereby inserted at the end of
Section 5.8 of the Agreement:
In addition, all parties intend that each of the transfers by
MIL Holdings and WVA of the stock of XxXxx X.X. and the WVA
Subsidiaries to the JVC, respectively, will qualify as a
reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code"). The
parties agree to cooperate fully with the other parties and
their legal counsel and accountants in connection with any
filings or notifications required to be made with respect to
Taxes, including, but not limited to, filings and
notifications required to be made pursuant to Sections 351,
358, 367, 368 and 6038B of the Code. In addition, the parties
further agree that they and the JVC will treat the JVC as a
corporation for U.S. federal income tax purposes and unless
the parties agree otherwise (i) all filings or notifications
required to be made with respect to U.S. federal taxes shall
be made consistent with such treatment and (ii) no action,
including any liquidation or merger, shall be taken by the JVC
which would result in it (or any successor) being treated as
other than a corporation for U.S. federal income tax purposes.
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(x) The following new Section 5.9 is hereby inserted in the
Agreement immediately after Section 5.8:
5.9 MANAGEMENT INFORMATION
From the date of this Agreement to and including the
Closing Date, (a) WVA shall (and shall cause the WVA
Subsidiaries to) provide to MIL all material information
specifically requested by the MIL Parties regarding the
operation of the WVA Business during such period and (b) the
MIL Parties shall (and shall cause XxXxx X.X. to) provide to
Telcom all material information specifically requested by
Telcom regarding the operation of the XxXxx X.X. Business
during such period. Any information provided pursuant to this
Section 5.9 shall be subject to the Confidentiality Agreement.
(y) Section 6.4 of the Agreement is hereby amended and restated to
read in its entirety as follows (and Exhibit 6.4 to the Agreement is hereby
amended and restated as attached hereto):
6.4 MEMBERS AGREEMENT
MIL Holdings, WVA and the JVC shall have entered into
a Members Agreement (the "Members Agreement") in substantially
the form attached hereto as Exhibit 6.4.
(z) Section 6.13 of the Agreement is hereby deleted in its
entirety.
(aa) Section 7.4 of the Agreement is hereby amended and restated to
read in its entirety as follows:
7.4 MEMBERS AGREEMENT
MIL Holdings, WVA and the JVC shall have entered into
the Members Agreement in substantially the form attached
hereto as Exhibit 6.4.
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(bb) Section 7.5 of the Agreement is hereby amended and restated to
read in its entirety as follows:
7.5 MIL PARTIES OFFICERS' CERTIFICATE
Telcom shall have received certificates of the
President and Secretary of MIL, MIL Argentina and MIL
Holdings, 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.
(cc) Section 7.11 of the Agreement is hereby deleted in its
entirety and Section 7.12 is hereby renumbered as Section 7.11.
(dd) Sections 8.1 and 8.2 of the Agreement are hereby amended and
restated to read in their entirety as follows:
8.1 INDEMNIFICATION BY WVA SECURITYHOLDERS
Subject to and in accordance with Section 8.4, Telcom
and WVA jointly and severally agree to indemnify and hold
harmless, on an after-tax basis, the JVC, its 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 the JVC, MIL or its Affiliates at or
in connection with the Closing; provided that neither Telcom
nor WVA shall 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 and WVA, jointly and severally,
shall be obligated to pay the entire amount of such Damages,
including the first US$100,000; provided, further, that
(subject to
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such US$100,000 threshold) Telcom and WVA, jointly and
severally, shall indemnify and hold harmless, on an after-tax
basis, MIL and MIL Holdings, their respective successors and
permitted assigns, and the officers, directors, affiliates,
employees, Controlling Persons and agents of the foregoing
(the "MIL Indemnified Parties") against and in respect of any
and all Damages incurred by any of the MIL Indemnified Parties
which were incurred by reason of the matters described in
clauses (a), (b) or (c) of this sentence and which are not
remedied by the indemnification of the JVC pursuant to this
Section 8.1.
8.2 INDEMNIFICATION BY MIL
Subject to and in accordance with Section 8.4, the
MIL Parties jointly and severally agree to indemnify and hold
harmless, on an after-tax basis, the JVC, its 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 any of the MIL Parties, (b) the breach of any
covenant contained herein by any of the MIL Parties prior to
the Closing or (c) the breach of undertakings of any 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 the JVC, Telcom or its Affiliates at
or in connection with the Closing; provided that no MIL Party
shall be obligated to make any payments under this Section 8.2
unless and until the amount of Damages exceeds US$100,000,
after which the MIL Parties, jointly and severally, shall be
obligated to pay the entire amount of such Damages, including
the first US$100,000; provided, further, that (subject to such
US$100,000 threshold) the MIL Parties, jointly and severally,
shall indemnify and hold harmless, on an after-tax basis,
Telcom and WVA, their respective successors and permitted
assigns, and the officers, directors, affiliates, employees,
Controlling Persons and agents of the foregoing (together, the
"WVA Indemnified Parties") against and in respect of any and
all Damages incurred by any of the WVA Indemnified Parties
which were incurred by reason of the matters described in
clauses (a), (b) or (c) of this sentence and which are not
remedied by the indemnification of the JVC pursuant to this
Section 8.2.
(ee) Section 8.3 of the Agreement is hereby amended and restated to
read in its entirety as follows:
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8.3 PROCEDURE
Promptly after receipt by any indemnified party of
notice of any claim, action or proceeding which may give rise
to a right of indemnification hereunder, such indemnified
party (the "Indemnitee") will give written notice thereof (the
"Claim Notice") promptly (and, if the matter for which the
Indemnitee is seeking indemnification hereunder arises from a
breach of a representation and warranty, 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. If any of the MIL Parties believes
that the JVC has a right of indemnification hereunder from
Telcom or WVA, or if Telcom or WVA believes that the JVC has a
right of indemnification hereunder from any of the MIL
Parties, then the MIL Parties, Telcom and WVA shall cause the
JVC to take all action necessary to enforce such right. The
Indemnifying Party shall have the right to participate in the
defense of any claim, action or proceeding which may give rise
to a right of indemnification hereunder, 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 reasonable fees and expenses of such
counsel and shall no longer assume the fees and expenses of
any other attorney representing the Indemnitee. If 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 matter without the
consent of the Indemnitee provided that such settlement
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(i) includes as an unconditional term thereof the giving by
the plaintiff or claimant to the Indemnitee of a release from
all liability in respect of such claim or litigation, (ii)
provides that the Indemnitee does not admit any guilt or fault
with respect to the subject matter of such claim or
litigation, and (iii) does not involve injunctive or other
equitable relief.
(ff) Section 8.4 of the Agreement is hereby amended and restated to
read in its entirety as follows:
8.4 METHOD OF PAYMENT
The Indemnifying Party may satisfy its obligations
under this Article VIII in cash or at its option in shares in
the share capital of the JVC at their Appraised Fair Market
Value (as defined below). The Indemnifying Party and the
Indemnitees agree that in any case of indemnification
hereunder where the JVC is damaged, payment will be made to
the JVC; provided, however, that to the extent any Indemnitee
is not made whole by such payment, such Indemnitee shall still
retain a right to indemnification under this Section 8.
For purposes of this Agreement, "Fair Market Value"
of any of the share capital of the JVC means the price that an
unrelated third party would pay if it were to acquire all
outstanding equity interests of the JVC on the date the Claim
Notice is deemed to be received by the Indemnifying Party in
an arm's-length transaction, assuming that such equity
interests were being sold in a manner designed to attract all
possible participants and without taking into consideration a
control premium or minority discount, multiplied by the
percentage of the aggregate share capital represented by the
amount of share capital in question on a fully-diluted basis.
The "Appraised Fair Market Value" shall be determined in
accordance with the following procedures: the Indemnifying
Party shall select an investment banking firm of recognized
national standing (the "First Appraiser"), which shall
appraise the Fair Market Value and deliver its appraisal to
the JVC, every Indemnitee and the Indemnifying Party, within
60 days of its engagement. If the Indemnitees (represented by
one Person designated by the mutual consent of the Indemnitees
(the "Representative")) shall disagree with the Fair Market
Value determined by such appraiser, then the Representative
shall have the right to appoint an additional investment
banking firm of recognized national standing (the "Second
Appraiser"). If the Representative does not engage a Second
Appraiser within 30 days of the First
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Appraiser's delivery of its appraisal, the First Appraiser's
appraisal shall be the Appraised Fair Market Value. If the
Representative engages a Second Appraiser, the Second
Appraiser will appraise the Fair Market Value, and deliver its
appraisal to the JVC, the Indemnitees and the Indemnifying
Party, within 60 days of its engagement. If the difference
between the two appraisals is less than 20% of the lower
appraised value, then the Appraised Fair Market Value shall be
the average of the two appraisals. If such difference is
greater than or equal to 20% of the lower appraised value, the
two appraisers shall engage a third independent investment
banking firm of recognized national standing (the "Third
Appraiser"), which shall appraise the Fair Market Value within
60 days of its engagement. The Appraised Fair Market Value
shall be the average of the two appraised values that are
closest in absolute U.S. dollars. All appraisals of Fair
Market Value shall be as of the date of notice of exercise of
the right. The expenses of the First Appraiser shall be borne
by the Indemnifying Party; the expenses of the Second
Appraiser, if any, shall be borne by the Indemnitees, jointly
and severally; and the expenses of the Third Appraiser, if
any, shall be borne equally by the Indemnifying Party on the
one hand and the Indemnitees, jointly and severally among
themselves, on the other hand.
(gg) The following Section 8.5 is hereby inserted at the end of
Article VIII of the Agreement:
8.5 THIRD PARTY BENEFICIARY
The JVC is intended to be a third party beneficiary
of (i) the representations, warranties and covenants in this
Agreement of each of Telcom, WVA and the MIL Parties and (ii)
the undertakings of each of Telcom, WVA and the MIL Parties in
any other document, supplement, instrument, agreement, letter,
amendment or assignment executed in connection herewith or in
any officers' certificate delivered to the JVC, Telcom or its
Affiliates or MIL or its Affiliates at or in connection with
the Closing. As such, the JVC shall be entitled to enforce
any such representation, warranty, covenant or undertaking as
if it were a party to this Agreement, and the JVC shall be
entitled to seek indemnification for, and to recover any
damages suffered by it, in respect of any breach of any such
representation, warranty, covenant or undertaking, including
without limitation, recovery for any breach that results in
the value of the JVC as of the Closing Date being less than
the sum of the MIL Holdings Invested Capital and the WVA
Invested Capital.
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(hh) The following new Article X is inserted after Article IX and
the former Article X is renumbered to be Article XI and Sections 10.1 to 10.9
are renumbered to be Sections 11.1 to 11.9.
ARTICLE X
NONCOMPETITION
10.1 NONCOMPETITION
Each of MIL and Telcom agree that, until one year
following termination of the Members Agreement with respect to
all Affiliates Controlled by such party, neither such party
nor any Affiliate Controlled by such party shall in any way,
by action or inaction, directly or indirectly, for itself or
for the benefit of any other Person, own, manage, operate,
join, Control or participate in the ownership, management,
operation or Control of any Person that competes with the JVC
or any Affiliate thereof, or agrees to do any of the
foregoing, in the business of paging or SMR in Argentina,
other than wireless radio engineering, design or program
management services and the manufacture and sale of related
software and hardware products. In addition, neither any
party nor any Affiliate Controlled by such party may maintain
an equity interest in any Person (other than the JVC) in which
it owns an equity interest as of the date hereof, which equity
interest entitles any such party or any Affiliate Controlled
by such party to control of policymaking or day-to-day
operations of such Person or in connection with which any such
party or any Affiliate Controlled by such party has a
representative on the board of directors, if such Person
elects to engage in the business of cellular communications or
Personal Communications Systems in Argentina.
10.2 SPECIFIC PERFORMANCE
The parties hereto acknowledge that it may be impossible to
measure in money the damages that any party may incur as a
result of another party's violation of any provision of this
Article X. Consequently, in any action specifically to
enforce any provision of this Agreement, each party hereby
waives any claim or defense therein that an adequate remedy at
law or in damages exists. Each party further agrees that the
other parties shall be entitled to injunctive relief, specific
performance or other equitable relief to prevent violation of
any provision of this Agreement.
(ii) Renumbered Section 11.1 of the Agreement is hereby amended and
restated to read in its entirety as follows:
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11.1 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,
except as expressly provided herein and except for the legal
fees and expenses of Xxxxxx and Xxxxxx relating to the legal
opinion to be delivered at Closing, the JVC shall not bear any
fees, costs or expenses relating to the transactions
contemplated hereby for the benefit of any of the MIL Parties,
WVA or any of the WVA Securityholders.
(jj) The first sentence of renumbered Section 11.4 of the Agreement
is hereby amended and restated to read in its entirety as follows:
This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York,
as applied to contracts executed and to be fully performed in
such state.
(kk) Section 11.7 of the Agreement is hereby amended and restated
to read in its entirety 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
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with a copy to:
Venture Law Group
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
Fax: (000) 000-0000
(b) To Telcom:
Telcom Ventures, LLC
000 X. Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, 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
(ll) The following Section 11.10 is hereby inserted at the end of
Article XI of the Agreement:
11.10 SEVERABILITY
If any provision of this Agreement shall be held to be
illegal, invalid or unenforceable, such illegality, invalidity
or unenforceability shall attach only to such provision and
shall not in any manner affect or render illegal, invalid or
unenforceable any other provision of this Agreement, and this
Agreement shall be carried out as if any such illegal, invalid
or unenforceable provision were not contained herein.
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ARTICLE II.
GENERAL
2.1 HEADINGS
The headings preceding the text of sections of this Amendment are for
convenience only and shall not be deemed parts thereof.
2.2 BINDING EFFECT; APPLICABLE LAW
This Amendment shall become effective when it shall have been executed
by the MIL Parties, Telcom and WVA. This Amendment and the Agreement shall be
governed by and construed and enforced in accordance with the laws of the State
of New York, as applied to contracts executed and to be fully performed in such
state.
2.3 COUNTERPARTS
This Amendment 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.
[Signature page follows]
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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
-----------------------------------------------
Its President
-----------------------------------------
XxXXX INTERNATIONAL (DELAWARE), LTD.
By /s/ XXXXX X. XXXXXXXXX
-----------------------------------------------
Its President
-----------------------------------------
XxXXX INTERNATIONAL (HOLDINGS), LTD.
By /s/ XXXXX X. XXXXXXXXX
-----------------------------------------------
Its President
-----------------------------------------
XxXXX INTERNATIONAL (ARGENTINA) LLC
By /s/ XXXXX X. XXXXXXXXX
-----------------------------------------------
Its President
-----------------------------------------
TELCOM VENTURES, LLC
By /s/ XXXXX XXXXXXX
-----------------------------------------------
Its
-----------------------------------------
SIGNATURE PAGE TO AMENDMENT NO. 1 TO
JOINT VENTURE AGREEMENT
27
WIRELESS VENTURES OF ARGENTINA, L.L.C.
By /s/ XXXXX XXXXXXX
-----------------------------------------------
Its
-----------------------------------------
SIGNATURE PAGE TO AMENDMENT NO. 1 TO
JOINT VENTURE AGREEMENT
