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EXHIBIT 10.2
STOCK PURCHASE AGREEMENT
BY AND AMONG
NEXTEL INTERNATIONAL (PERU), LLC,
MOTOROLA INTERNATIONAL DEVELOPMENT CORPORATION,
XXXXX XXXXXXXXXX COZ,
NEXTEL INTERNATIONAL, INC.
AND
VALORCOM S.A.
DATED AS OF JANUARY 29, 0000
XXXX STOCK PURCHASE AGREEMENT
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TABLE OF CONTENTS
PAGE
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ARTICLE I - DEFINITIONS..................................................................................2
1.1 Defined Terms...............................................................................2
1.2 Other Definitional Matters..................................................................6
ARTICLE II - SALE AND PURCHASE...........................................................................6
2.1 Sale and Purchase...........................................................................6
2.2 Closing.....................................................................................9
2.3 Post Closing Adjustments...................................................................10
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF
MOTOROLA, XXXXXXXXXX AND THE JVC........................................................................13
3.1 Organization, Good Standing, Etc...........................................................13
3.2 Authorization, Due Execution and Binding Effect............................................14
3.3 No Approvals or Notices Required; No Conflicts With Instruments............................14
3.4 Concessions, Licenses, Permissions, Permits, Authorizations, Etc...........................14
3.5 Capitalization of the JVC and Ownership of the JVC Capital Stock...........................15
3.6 Capitalization of the JVC Subsidiaries and Ownership of the Capital
Stock of the JVC Subsidiaries..................................................................15
3.7 Financial Statements.......................................................................16
3.8 Absence of Certain Changes.................................................................16
3.9 Liabilities................................................................................18
3.10 Intercompany Transactions.................................................................18
3.11 Taxes.....................................................................................18
3.12 JVC Assets................................................................................18
3.13 Channels..................................................................................19
3.14 Contracts.................................................................................20
3.15 Claims and Legal Proceedings..............................................................20
3.16 Labor Matters.............................................................................21
3.17 Customers.................................................................................22
3.18 Applicable Laws...........................................................................22
3.19 Insurance.................................................................................23
3.20 Trademarks................................................................................23
3.21 Compliance With Environmental Laws........................................................23
3.22 Brokerage.................................................................................24
ARTICLE IV - ADDITIONAL REPRESENTATIONS AND WARRANTIES
OF MOTOROLA.............................................................................................24
4.1 Organization, Good Standing, Etc...........................................................24
4.2 Authorization, Due Execution and Binding Effect............................................24
4.3 No Approvals or Notices Required; No Conflicts With Instruments............................25
4.4 Peruvian SMR Services......................................................................25
ARTICLE V - ADDITIONAL REPRESENTATIONS AND WARRANTIES
OF XXXXXXXXXX...........................................................................................25
5.1 Citizenship; Residency.....................................................................25
5.2 Authorization, Due Execution and Binding Effect............................................25
PERU STOCK PURCHASE AGREEMENT
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5.3 No Approvals or Notices Required; No Conflicts With Instruments............................26
5.4 Peruvian SMR Services......................................................................26
ARTICLE VI - REPRESENTATIONS AND WARRANTIES OF NEXTEL...................................................26
6.1 Organization, Good Standing, Etc...........................................................26
6.2 Authorization, Due Execution and Binding Effect............................................27
6.3 No Approvals or Notices Required; No Conflicts With Instruments............................27
6.4 Brokerage..................................................................................27
6.5 Peruvian SMR Services......................................................................27
ARTICLE VII - FURTHER AGREEMENTS........................................................................28
7.1 Schedules..................................................................................28
7.2 Access.....................................................................................28
7.3 Management Information.....................................................................28
7.4 Advice of Claims...........................................................................29
7.5 Conduct of the Business....................................................................29
7.6 Compliance With Laws.......................................................................30
7.7 No Transfers...............................................................................30
7.8 Mastercom Name.............................................................................30
7.9 Capital Increase...........................................................................30
7.10 Nextel International Guarantee............................................................31
7.11 Other Cooperation.........................................................................31
ARTICLE VIII - CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH
PARTY...................................................................................................31
8.1 Accuracy of Representations and Warranties.................................................31
8.2 Performance of Agreement...................................................................31
8.3 Approvals and Consents.....................................................................32
8.4 Officers' Certificates.....................................................................32
8.5 Shareholders Agreement.....................................................................32
8.6 Registration Rights Agreement..............................................................32
8.7 Legal Proceedings..........................................................................32
8.8 Business Plan..............................................................................32
8.9 Division of Master Communications..........................................................32
8.10 Confidentiality, Noncompetition and Proprietary Information
Agreements.....................................................................................33
8.11 Opinion of Counsel........................................................................33
8.12 Title.....................................................................................33
8.13 Documentation Relating to the Concessions.................................................33
8.14 Third Party Consents......................................................................33
8.15 Pledge Agreements.........................................................................34
8.16 Legal Stability Agreements................................................................34
ARTICLE IX - ADDITIONAL CONDITIONS PRECEDENT TO
OBLIGATIONS OF NEXTEL...................................................................................34
9.1 Affiliate Transactions.....................................................................34
9.2 Employees, Consultants, Directors and Attorney-in-Fact of the JVC..........................34
ARTICLE X - INDEMNIFICATION AND SURVIVAL OF WARRANTIES..................................................35
10.1 Indemnification by Motorola...............................................................35
PERU STOCK PURCHASE AGREEMENT
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10.2 Indemnification by Xxxxxxxxxx.............................................................35
10.3 Indemnification by Nextel.................................................................36
10.4 Indemnification by Xxxxxxxxxx of Motorola.................................................36
10.5 Secondary Indemnification by Motorola of Xxxxxxxxxx.......................................36
10.6 Procedure.................................................................................37
10.7 Survival..................................................................................37
10.8 Security for Secondary Indemnification Rights.............................................38
ARTICLE XI - TERMINATION................................................................................38
11.1 Termination...............................................................................38
11.2 Effect of Termination.....................................................................39
ARTICLE XII - GENERAL...................................................................................39
12.1 Expenses..................................................................................39
12.2 Amendment.................................................................................39
12.3 Headings..................................................................................39
12.4 Applicable Law............................................................................40
12.5 Parties in Interest.......................................................................40
12.6 Dispute Resolution........................................................................40
12.7 Waivers...................................................................................41
12.8 Notices...................................................................................41
12.9 Entire Understanding......................................................................42
12.10 Counterparts.............................................................................43
PERU STOCK PURCHASE AGREEMENT
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SCHEDULES
3.1 Organization
3.3 JVC and JVC Subsidiaries Approvals and Conflicts
3.4 Additional Payments and Fees
3.5 Capitalization of the JVC
3.6 Capitalization of the JVC Subsidiaries
3.8 Certain Changes or Events
3.9 Undisclosed Material Liabilities
3.10 Intercompany Balances
3.11 Payments
3.12(a) Leases
3.12(b) Real Property
3.12(d) Liens
3.13 The Channels
3.14 Contracts
3.15 Claims and Legal Proceedings
3.16 Labor Matters
3.17 Customers
3.18 Applicable Laws
3.20 Intellectual Property
4.3 Motorola Approvals and Conflicts
5.3 Xxxxxxxxxx Approvals and Conflicts
6.3 Nextel Approvals and Conflicts
PERU STOCK PURCHASE AGREEMENT
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EXHIBITS
2.1(b)(vi) Payment Schedule
2.1(b)(vii) Form of Usufruct
2.1(d) By-laws of the JVC (in Spanish and English)
3.7 Financial Statements
8.4 Form of Officers' Certificate
8.5 Form of Shareholders Agreement
8.6 Form of Registration Rights Agreement
8.10 Form of Confidentiality, Noncompetition and Proprietary Information Agreement
8.11 Form of Opinions of Counsel to Motorola, Xxxxxxxxxx and the JVC
8.15 Form of Pledge Agreement
8.16 Form of Legal Stability Agreement
9.1A Form of Tower Site Lease
9.1B Form of Sales Agency Agreement
9.1C Form of Maintenance Agreement
PERU STOCK PURCHASE AGREEMENT
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made as of January
29, 1998 by and among NEXTEL INTERNATIONAL (PERU), LLC ("Nextel"), a Cayman
Islands limited liability company and indirectly wholly owned subsidiary of
Nextel International, Inc., a Washington corporation ("Nextel International"),
MOTOROLA INTERNATIONAL DEVELOPMENT CORPORATION, a Delaware corporation
("Motorola"), XXXXX XXXXXXXXXX COZ, a Peruvian citizen ("Xxxxxxxxxx"), NEXTEL
INTERNATIONAL, INC. and VALORCOM S.A., a Peruvian corporation (to be renamed
Nextel del Peru S.A.) (the "JVC").
RECITALS
A. Immediately prior to the transactions described in this Stock
Purchase Agreement, the capital stock of the JVC is 2,000 shares of common stock
(the "JVC Common Stock"), represented by 2,000 shares of S/.1.00 each. Motorola
has subscribed for and purchased 1019 shares of the JVC Common Stock,
representing 51%, less one share, of the outstanding shares of the JVC Common
Stock. Xxxxxx Xxxxx Xxxxxxxx Yzaga has subscribed for and purchased one share of
the JVC Common Stock. Xxxxxxxxxx has subscribed for and purchased 980 shares of
the JVC Common Stock, representing 49% of the outstanding shares of the JVC
Common Stock.
B. Each of Motorola, Xxxxxxxxxx and Nextel desire to subscribe and pay
for newly issued shares of the JVC Common Stock, in each case for the
consideration and on the terms and conditions provided in this Agreement, such
that after such issuances, subscriptions and payments, the JVC Common Stock
shall be owned as follows:
Nextel 70.05%
Motorola 19.95%
Benalcazar 10%
C. The JVC desires to purchase from Xxxxxxxxxx and Xxxxxxxxxx desires
to sell to the JVC (i) 64.4% of the shares of Master Communications S.A., a
Peruvian corporation ("Master Communications"), it being understood that all
references herein to Master Communications shall mean such entity following the
division referred to in Section 8.9 hereof, and (ii) 64.4% of the shares of
General Radio S.A., a Peruvian corporation ("General Radio").
D. Following consummation of the transactions set forth in this
Agreement, the JVC shall, indirectly through its direct and indirect
wholly-owned subsidiaries, Dualcom S.R. Ltda., a Peruvian limited liability
company ("Dualcom"), General Radio, Master Communications, Mastercom Trunking
S.A., a Peruvian corporation and wholly owned subsidiary of Master
Communications ("Mastercom Trunking"), and Radionet S.A., Peruvian corporation
("Radionet" and together with Dualcom, General Radio, Master Communications and
Mastercom Trunking, the "JVC Subsidiaries"), hold concession contracts granted
by the Republic of Peru ("Peru") authorizing the installation and operation of
SMR services listed in Schedule 3.13 and a license
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to use the SMR channels listed on Schedule 3.13 in certain cities in Peru (the
"Channels") and own certain other assets in Peru.
E. The parties hereto wish to install, own and operate SMR and enhanced
SMR ("ESMR") equipment and provide SMR services and ESMR services utilizing iDEN
technology in Peru through the JVC and the JVC Subsidiaries.
AGREEMENT
In consideration of the mutual promises contained herein, 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(d).
"Adjusted Motorola Net Rental Radio Expenditures" has the meaning set
forth in Section 2.3(f)(ii).
"Affiliate" of any Person (the "Subject") means any other Person which,
directly or indirectly, Controls or is Controlled by or is under common Control
with the Subject. For purposes of this Agreement, the JVC and the JVC
Subsidiaries shall not be deemed an Affiliate of any of the other parties
hereto.
"Agreement" has the meaning set forth in the introductory paragraph.
"Applied Channels" has the meaning set forth in Section 3.13.
"Xxxxxxxxxx" has the meaning set forth in the introductory paragraph,
and shall include any heir or personal representative.
"Xxxxxxxxxx Net Rental Radio Expenditures" has the meaning set forth in
Section 2.3(f)(i).
"Xxxxxxxxxx Pledge Agreement" has the meaning set forth in Section
10.8.
"Business" means the business and activities conducted and proposed to
be conducted by the JVC and the JVC Subsidiaries, including but not limited to,
directly or indirectly, installing, owning and operating SMR services, as of the
date hereof.
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"Business Day" means any day other than a Saturday, a Sunday or a day
on which commercial banks in New York or Lima, Peru are authorized to close.
"Business Plan" has the meaning set forth in Section 8.8.
"Capital Increase" has the meaning set forth in Section 2.1(b).
"Channels" has the meaning set forth in the Recitals.
"Closing" has the meaning set forth in Section 2.2(a).
"Closing Balance Sheet" has the meaning set forth in Section 2.3(a)(i)
"Closing Date" has the meaning set forth in Section 2.2(a).
"Closing Indebtedness" has the meaning set forth in Section 2.3(a)(i)
"Concessions" has the meaning set forth in Section 3.4.
"Control" (including, with correlative meanings, the terms "Controlled
by" and "under common Control with"), as used with respect to any Person, 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; provided that any
Person which together with its Affiliates owns more shares of a given company
than any other shareholder of such company (together with its Affiliates) shall
be deemed to Control such company.
"Damages" has the meaning set forth in Section 10.1.
"Disagreeing Party" has the meaning set forth in Section 2.3(a)(iii)
"Dualcom" has the meaning set forth in the Recitals.
"ESMR" has the meaning set forth in the Recitals.
"Financial Statements" has the meaning set forth in Section 3.7.
"ForEx Rate" has the meaning set forth in Section 2.1(b).
"General Radio" has the meaning set forth in the Recitals.
"ICC" has the meaning set forth in Section 12.6.
"iDEN" shall mean Motorola's proprietary integrated Digital Enhanced
Network.
"Indemnifying Party" has the meaning set forth in Section 10.6.
"Indemnitee" has the meaning set forth in Section 10.6.
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"JVC" has the meaning set forth in the introductory paragraph, and
shall include any successor corporations.
"JVC Assets" has the meaning set forth in Section 3.3.
"JVC Common Stock" has the meaning set forth in the Recitals.
"JVC Personal Property" has the meaning set forth in Section 3.12(a).
"JVC Subsidiaries" has the meaning set forth in the Recitals.
"knowledge" with respect to any Person means, with respect to the
existence or absence of a fact, matter, event or circumstance, the actual
knowledge of such Person, or if such Person is not an individual, the actual
knowledge of any director or officer of such Person or any Affiliate thereof.
"Legal Stability Agreements" means the Legal Stability Agreements
between Peru and each of the JVC, Nextel and Motorola substantially in the form
of Exhibit 8.16.
"Lien" means, with respect to any property or asset, any mortgage,
lien, pledge, deed of trust, usufruct, charge, security interest, encumbrance or
other adverse claim of any kind with respect to such property or asset.
"Master Communications" has the meaning set forth in the Recitals.
"Mastercom Trunking" has the meaning set forth in the Recitals.
"Motorola" has the meaning set forth in the introductory paragraph, and
shall include any successor corporations.
"Motorola Net Rental Radio Expenditures" has the meaning set forth in
Section 2.3(f)(i).
"Motorola Pledge Agreement" has the meaning set forth in Section 10.8.
"MTC" means the Ministry of Transport, Communications, Housing and
Construction of Peru or any successor regulatory body of the Peruvian government
responsible for oversight of the telecommunications industry in Peru.
"Net Rental Radio Expenditures" means cash expenditures on rental radio
inventory purchased less revenue realized on rental radio inventory, all during
the relevant period and as reviewed by Deloitte & Touche, LLP.
"Nextel" has the meaning set forth in the introductory paragraph, and
shall include any successor thereto or assignee thereof.
"Nextel International" has the meaning set forth in the introductory
paragraph, and shall include any successor corporations.
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"OSIPTEL" means the Supervisory Entity of Private Investment in
Telecommunications, or any successor regulatory entity of the Peruvian
government.
"Permitted Liens" has the meaning set forth in Section 3.12(d).
"Person" means any individual, partnership, limited liability company,
joint-stock company, firm, corporation, association, unincorporated
organization, joint venture, trust or other entity.
"Peru" has the meaning set forth in the Recitals.
"Pledge Agreements" has the meaning set forth in Section 10.8.
"Radionet" has the meaning set forth in the Recitals.
"Registration Rights Agreement" means the Registration Rights Agreement
to be entered into by the JVC, Motorola, Xxxxxxxxxx and Nextel in substantially
the form attached hereto as Exhibit 8.6.
"Reserved Channels" has the meaning set forth in Section 3.13.
"Shareholders Agreement" means the Shareholders Agreement to be entered
into by the JVC, Nextel, Nextel International, Motorola and Xxxxxxxxxx in
substantially the form attached hereto as Exhibit 8.5.
"SMR" means specialized mobile radio ("servicio troncalizado").
"Tax" and "Taxes" mean any and all net income, gross income, gross
receipts, sales, use, ad valorem, transfer, franchise, profits, license,
withholding, payroll, employment, excise, estimated, stamp, occupation, premium,
property, customs duty, import and other tax, fee, contribution, assessment, or
similar charge of any kind whatsoever, together with interest and penalties,
additions to the tax, and additional amounts imposed in connection with such tax
by any Tax Authority, whether U.S., Peruvian or other.
"Tax Authority" has the meaning set forth in Section 3.11.
"Tax Returns" means all returns (including information returns),
reports, estimates, elections, declarations, statements, forms, requests for
extensions of time, and other documents (including any schedule, exhibit, or any
other attachment to such documents) relating to or required to be filed with any
Tax Authority or any other Person pursuant to any federal, state or local law,
whether U.S., Peruvian or otherwise.
"Transaction Agreements" means this Agreement, the Shareholders
Agreement, the Registration Rights Agreement and the Pledge Agreements.
"U.S. GAAP" means U.S. generally accepted accounting principles.
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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.
(d) All references to "$" or "dollars" are to the legal tender currency
of the United States of America. All references to "S/." or "Nuevos Soles" are
to the legal tender currency of Peru.
ARTICLE II
SALE AND PURCHASE
2.1 SALE AND PURCHASE
In reliance on the representations, warranties and covenants contained
herein and subject to the terms and conditions hereof, simultaneously on the
Closing Date (unless a different date is specified):
(a) Transfer of JVC Common Stock. In consideration for the transactions
contemplated hereby, Motorola, Xxxxxxxxxx and Xxxxxx Xxxxx Xxxxxxxx Yzaga agree
to make the following transfers:
(i) To Nextel. On or prior to the Closing Date, Motorola shall
transfer 620 shares of JVC Common Stock to Nextel, Xxxxxx Xxxxx Xxxxxxxx Yzaga
shall transfer one share of JVC Common Stock to Nextel, and Xxxxxxxxxx shall
transfer 780 shares of JVC Common Stock to Nextel.
(ii) Waiver of Rights of First Refusal. Motorola, Xxxxxxxxxx
or Xxxxxx Xxxxx Xxxxxxxx Yzaga, as the case may be, shall cause any Person who
may have rights of first refusal in connection with the sales and purchases
contemplated by clause 2.1(a)(i) above to have waived such rights.
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(b) Capital Increase. The JVC's shareholders shall approve an increase
in its capital stock for the Nuevos Soles equivalent (calculated at the Banco
Credito del Peru exchange rate for the sale of U.S. dollars as of the Closing
Date (the "ForEx Rate") of $39,800,000, effective upon the earlier of the
effectiveness of the Legal Stability Agreements and the six-month anniversary of
the Closing Date (the "Capital Increase"), which shall be subscribed and paid
for as follows:
(i) Motorola shall transfer or cause to be transferred to the
JVC 2,777,374 participaciones sociales (including certain
participaciones sociales that have been authorized but not yet formally
issued) representing all but one of the outstanding participaciones
sociales of the capital stock of Dualcom and 6,074,665 shares
(including certain shares that have been authorized but not yet
formally issued) representing all but one of the outstanding shares of
the capital stock of Radionet (such participaciones sociales of Dualcom
and shares of Radionet having an agreed upon aggregate valuation of the
Nuevos Soles equivalent (calculated at the ForEx Rate) of $4,816,000)
and the Nuevos Soles equivalent (calculated at the ForEx Rate) of
$3,144,000 in cash, and in exchange therefor the JVC shall issue
Motorola two promissory notes and each of Xxxxxx Xxxxx Xxxxxxxx Yzaga
and Xxxxxx Xxxxxxxx Xxxxxxxx one promissory note, such four promissory
notes being in the aggregate amount of $7,960,000, automatically
convertible into shares of JVC Common Stock such that Motorola shall
own 19.95% of the capital stock of the JVC on a fully diluted basis
upon the earlier of effectiveness of the Legal Stability Agreements and
the six-month anniversary of the Closing Date; provided, that the
parties acknowledge that because certain of the participaciones
sociales of Dualcom and certain of the shares of Radionet are in the
process of being registered with the Public Registry in Peru, the
formal issuance of such participaciones sociales of Dualcom and such
shares of Radionet and the subsequent transfer thereof to the JVC shall
not be completed until immediately following such registration.
(ii) Motorola shall transfer to Radionet one participacion
social of Dualcom and shall transfer to General Radio one share of
Radionet.
(iii) Xxxxxxxxxx shall transfer or cause to be transferred to
the JVC 7,889 shares representing 35.6% of the outstanding shares of
the capital stock of General Radio, less one share, and 234,888 shares
representing 35.6% of the outstanding shares of the capital stock of
Master Communications, less one share (such shares of General Radio and
Master Communications having an agreed upon valuation of the Nuevos
Soles equivalent (calculated at the ForEx Rate) of $3,980,000), and in
exchange therefor the JVC shall issue Xxxxxxxxxx a promissory note in
the amount of $3,980,000 automatically convertible into shares of JVC
Common Stock such that Xxxxxxxxxx shall own 10.00% of the capital stock
of the JVC on a fully diluted basis upon the earlier of effectiveness
of the Legal Stability Agreements and the six-month anniversary of the
Closing Date; in addition, Xxxxxxxxxx shall transfer or cause to be
transferred to Master Communications all shares of Mastercom Trunking,
less one, that are not already owned by Master Communications.
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(iv) Xxxxxxxxxx shall transfer to Radionet one share of each
of General Radio, Master Communications and Mastercom Trunking.
(v) Nextel shall transfer or cause to be transferred to the
JVC an aggregate of the Nuevos Soles equivalent (calculated at the
ForEx Rate) of $27,860,000 in cash (payable in installments in
accordance with Section 2.1(b)(vi)), and in exchange therefor the JVC
shall issue Nextel from time to time upon receipt of each installment
payment promissory notes in an aggregate amount of up to $27,860,000
automatically convertible into shares of JVC Common Stock such that,
taking into account all promissory notes issued pursuant to this clause
(v) and all additional payments required to be made pursuant to Exhibit
2.1(b)(vi), Nextel shall own 70.05% of the capital stock of the JVC on
a fully diluted basis upon the earlier of effectiveness of the Legal
Stability Agreements and the six-month anniversary of the Closing Date.
(vi) Nextel shall subscribe for one hundred percent of the
capital contribution set forth in Section 2.1(b)(v) but shall pay to
the JVC such cash on the payment schedule attached hereto as Exhibit
2.1(b)(vi); provided, however, that Nextel shall make such cash
payments prior to the dates set forth in such exhibit if the JVC
requires cash earlier, as determined by the Board of Directors of the
JVC.
(vii) Each of Radionet and General Radio agrees to set in
usufruct all shares or participaciones sociales of the JVC Subsidiaries
held by it, as applicable, in the form attached hereto as Exhibit
2.1(b)(vii) and agrees to execute the appropriate public deeds or such
other documents for the registration thereof with the relevant Public
Registry or Shareholder Registry, as the case may be.
(viii) If because of fluctuations in foreign exchange rates,
the sum of Nextel's payments to the JVC in accordance with Exhibit
2.1(b)(vi), after converting such amounts into Nuevos Soles, and the
payments and stock transfers made by Motorola and Xxxxxxxxxx pursuant
to this Section 2.1(b) (such sum being referred to as the "Contributed
Capital") is greater than the authorized capital of the JVC after
giving effect to the Capital Increase, each of the parties hereto
agrees to authorize an increase in the capital of the JVC to cover such
excess and to issue without additional consideration such new share
capital of the JVC to Nextel, Motorola and Xxxxxxxxxx such that after
such issuance, their relative ownership of the JVC shall be identical
to the relative ownership set forth in Section 2.1(a). If because of
fluctuations in foreign exchange rates, the Contributed Capital is less
than the authorized capital of the JVC after giving effect to the
Capital Increase, each of Motorola and Xxxxxxxxxx agree, on a pro rata
basis, to transfer without additional consideration shares of Common
Stock of the JVC to Nextel such that after such transfer the relative
ownership of the JVC shall be identical to the relative ownership set
forth in Section 2.1(a).
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(c) Sale and Purchase.
(i) Purchase by the JVC of shares of General Radio and Master
Communications. Xxxxxxxxxx shall sell, deliver, transfer and convey to the JVC
14,273 shares representing 64.4% of the outstanding shares of the capital stock
of General Radio and 424,911 shares representing 64.4% of the outstanding shares
of the capital stock of Master Communications, and the JVC shall pay Xxxxxxxxxx
$7,204,000 in full consideration for such shares and in full consideration for
the transfer by Xxxxxxxxxx or any other shareholder of Mastercom Trunking of
shares of Mastercom Trunking to Master Communications. Immediately following
such sale, the JVC shall own all but one share of the outstanding capital stock
of General Radio and all but one share of the outstanding capital stock of
Master Communications, which in turn owns 100% of the outstanding capital stock
of Mastercom Trunking, less one share.
(ii) Waiver of Rights of First Refusal. Xxxxxxxxxx shall cause
any Person who may have rights of first refusal in connection with each of the
sales and purchases contemplated by clause (i) above to have waived such rights
to the satisfaction of the other parties hereto.
(d) JVC Corporate Governance. On or prior to the Closing Date,
Motorola, Nextel and Xxxxxxxxxx shall cause the JVC to amend its By-laws to be
substantially in the Spanish language version of the form attached hereto as
Exhibit 2.1(d), to be filed with the competent commercial registry, and such
amended By-laws shall be the By-laws of the JVC after the Closing Date and, to
the extent possible, the Shareholders' Agreement substantially in the form
attached hereto as Exhibit 8.5.
(e) Taxes. Xxxxxxxxxx shall pay any and all Taxes relating to the
income to Xxxxxxxxxx resulting from the sale by Xxxxxxxxxx of shares of the
capital stock of Master Communications and General Radio to the JVC.
2.2 CLOSING
(a) The closing of the transactions contemplated by Section 2.1 (the
"Closing") shall take place on January 29, 1998 or on another date mutually
agreed by the parties, following satisfaction or waiver of the conditions to the
Closing set forth in Articles IX and X (the "Closing Date") at the offices of
Nextel International in Seattle, Washington or at such other place or time as
the parties hereto may agree.
(b) On or promptly after the Closing Date:
(i) Nextel, Motorola and Xxxxxxxxxx shall pay to the JVC the
amounts referred to in Section 2.1(b);
(ii) The JVC shall deliver to Xxxxxxxxxx the cash purchase
price referred to in Section 2.1(c) in accordance with the written instructions
of Xxxxxxxxxx delivered to the parties hereto at least two business days prior
to Closing;
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(iii) The JVC shall: (A) register or cause the transfers
referred to in Section 2.1(a) to be registered in the JVC's stock registry and
transfer book and (B) issue and deliver to Nextel, Motorola and Xxxxxxxxxx the
promissory notes referred to in Section 2.1(b);
(iv) Xxxxxxxxxx shall (A) duly register or cause due
registration of the sales and transfers referred to above in General Radio's,
Master Communications' and Mastercom Trunking's stock registry and transfer
books; and (B) duly issue or cause due issuance of the share certificates
representing such sales and transfers;
(v) Motorola shall (A) duly register or cause due registration
of the transfers referred to above in Radionet's and Dualcom's stock registry
and transfer books; and (B) duly issue or cause due issuance of the share
certificates for Radionet representing such transfers;
(vi) Xxxxxxxxxx, Nextel and Motorola shall hold a unanimous
shareholders assembly of the JVC in order to approve the Capital Increase and
the amended and restated by-laws of the JVC;
(vii) The JVC shall execute a public deed of by-laws amendment
and shall cause such public deed to be filed at the Public Registries of Lima;
(viii) Each of Motorola, Xxxxxxxxxx and the JVC shall enter
into the Pledge Agreements in the forms attached hereto as Exhibit 8.15;
(ix) Each of Xxxxxxxxxx, Motorola and Nextel shall endorse and
deliver any promissory notes issued pursuant to Section 2.1(b) to the JVC for
purposes of subscribing and paying for the Capital Increase; and
(x) Each of Radionet and General Radio shall set in usufruct
all shares or participaciones sociales of the JVC Subsidiaries held by it, as
applicable, in the form attached hereto as Exhibit 2.1(b)(vii), and Dualcom
shall execute the appropriate public deeds for the registration thereof with the
relevant Public Registry.
(c) Promptly after the later to occur of the effectiveness of the Legal
Stability Agreements and the six-month anniversary of the Closing Date, the JVC
shall execute a public deed of capital increase with respect to the Capital
Increase and shall cause such public deed to be filed at the Public Registries
of Lima, and promptly after due registration of the Capital Increase with the
Public Registries of Lima, the JVC shall issue share certificates representing
the new shares referred to in Section 2.1(b).
2.3 POST-CLOSING ADJUSTMENTS
(a) Closing Balance Sheet
(i) As promptly as practicable, but no later than 30 days
after the Closing Date, the JVC shall cause Deloitte & Touche LLP to provide to
Nextel, Motorola and Xxxxxxxxxx a statement (the "Closing Balance Sheet") as to
whether the JVC and the JVC Subsidiaries, taken
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as a whole, had a net current account deficit (current assets less current
liabilities) or long-term liabilities, after taking into account appropriate
reserves against current assets of the JVC and the JVC Subsidiaries, taken as a
whole, (together, "Closing Indebtedness") as of the Closing Date, together with
detailed support with respect to the JVC and each JVC Subsidiary for such
calculation.
(ii) To the extent that the Closing Balance Sheet indicates
that there is Closing Indebtedness, Motorola shall be liable to pay to the JVC
any such Closing Indebtedness that relates to Radionet and Dualcom and
Xxxxxxxxxx shall be liable to pay to the JVC any such Closing Indebtedness that
relates to Master Communications, Mastercom Trunking and General Radio; provided
that Motorola and Xxxxxxxxxx shall each be jointly and severally liable to pay
to the JVC any such Closing Indebtedness, which repayments shall be made in cash
within 20 days of the JVC's delivery of the Closing Balance Sheet; provided that
any Closing Indebtedness that is being disputed in accordance with Sections
2.3(a)(iii) and (iv) need not be repaid until settlement of such dispute, but
only to the extent of such dispute. Any such repayments shall be increased to
offset any taxes due as a result of such repayment.
(iii) If any of Nextel, Motorola or Xxxxxxxxxx disagrees with
Deloitte & Touche LLP's calculation of the Closing Indebtedness (the
"Disagreeing Party"), the Disagreeing Party may, within 15 days of the delivery
of the Closing Balance Sheet, deliver a notice to the JVC 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 such party shall be deemed to have agreed with all other items
and amounts contained in the Closing Balance Sheet and the calculation of the
Closing Indebtedness delivered pursuant to Section 2.3(a)(ii).
(iv) If a notice of disagreement shall be delivered by the
Disagreeing Party pursuant to Section 2.3(a)(iii), the Disagreeing Party and the
JVC 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 Closing Indebtedness, which amount shall be
between the amount shown in the JVC's calculations delivered pursuant to Section
2.3(a)(ii) and the amount shown in the Disagreeing Party's calculation delivered
pursuant to Section 2.3(a)(iii). If, during such period, the Disagreeing Party
and the JVC are unable to reach such agreement, they shall promptly thereafter
cause an independent accounting firm of internationally recognized standing
reasonably satisfactory to the Disagreeing Party and the JVC (which shall not
have any material relationship with any such entities or any of their Affiliates
(the "Accountants")), promptly to review this Agreement and the disputed items
or amounts for the purpose of calculating the Closing Indebtedness. The JVC,
Motorola and Xxxxxxxxxx shall provide all detailed documentation necessary to
support the computation underlying the JVC's calculation of the Closing
Indebtedness. In making such calculation, the Accountants shall consider only
those items or amounts in the Closing Balance Sheet or the JVC's calculation of
the Closing Indebtedness as to which the Disagreeing Party has disagreed. The
Accountants shall deliver to all parties, as promptly as practicable, a report
setting forth such calculation. Such report shall be final and binding upon all
parties. The cost of such review and report shall be borne (i) by the
Disagreeing Party, if the difference between the Closing
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Indebtedness and the Disagreeing Party's calculation of the Closing Indebtedness
delivered pursuant to Section 2.3(a)(iii) is greater than the difference between
the Closing Indebtedness and the JVC's calculation of the Closing Indebtedness
delivered pursuant to Section 2.3(a)(ii), (ii) by the JVC if the first such
difference is less than the second such difference, and (iii) otherwise equally
by the Disagreeing Party, on the one hand and by the JVC, on the other hand.
(v) The JVC, Motorola and Xxxxxxxxxx each agree that they
will, and agree to cause their respective independent accountants, and the JVC
Subsidiaries to, cooperate and assist in the Accountants' review of the Closing
Balance Sheet and the Closing Indebtedness, including, without limitation, the
making available to the extent necessary of books, records, work papers and
personnel.
(b) Net Rental Radio Expenditures Adjustment.
(i) No later than 20 days after the Closing Date, each of
Motorola and Xxxxxxxxxx shall provide written notice to the other parties hereto
of Net Rental Radio Expenditures made by the JVC Subsidiaries from October 10,
1997 through the Closing Date; provided, however, that Motorola shall provide
notice of the Net Rental Radio Expenditures only as to Radionet and Dualcom (the
"Motorola Net Rental Radio Expenditures") and Xxxxxxxxxx shall provide notice of
the Net Rental Radio Expenditures only as to General Radio, Master
Communications and Mastercom Trunking (the "Xxxxxxxxxx Net Rental Radio
Expenditures"). Failure to provide such notice shall result in the applicable
Net Rental Radio Expenditures amount being deemed to be zero.
(ii) The Motorola Net Rental Radio Expenditures and the
Xxxxxxxxxx Net Rental Radio Expenditures shall be deemed to be additional
capital contributions of Motorola and Xxxxxxxxxx, respectively, to the JVC. Each
of Nextel, Motorola (as required) and Xxxxxxxxxx (as required) agree to make an
additional capital contribution to the JVC based on the following ownership
percentages: Nextel, 70.05%; Motorola, 19.95%; and Xxxxxxxxxx, 10%. Such
additional capital contribution amounts shall be calculated by establishing a
baseline capital contribution amount by dividing the Motorola Net Rental Radio
Expenditures by two (the "Adjusted Motorola Net Rental Radio Expenditures") and
taking the higher of the Adjusted Motorola Net Rental Radio Expenditures and the
Xxxxxxxxxx Net Rental Radio Expenditures. If the Xxxxxxxxxx Net Rental Radio
Expenditures is higher, each other party shall make an additional capital
contribution (based on the foregoing percentages) such that the Xxxxxxxxxx Net
Rental Radio Expenditures shall equal 10% of the total additional capital
contribution amount (including the Xxxxxxxxxx Net Rental Radio Expenditures). If
the Adjusted Motorola Net Capital Contribution is higher, each other party shall
make an additional capital contribution (based on the foregoing percentages)
such that the Motorola Net Rental Radio Expenditures shall equal 19.95% of the
total additional capital contribution amount (including the Motorola Net Rental
Radio Expenditures).
(iii) As promptly as practicable, but no later than 30 days
after the Closing Date, the JVC shall cause Deloitte & Touche LLP to review the
calculations of Motorola Net
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Rental Radio Expenditures and Xxxxxxxxxx Net Rental Radio Expenditures and to
provide a statement reflecting such calculations. Such additional capital
contributions shall be made in cash within 20 days of the delivery by Deloitte &
Touche LLP of the statement required by the preceding sentence, except that the
Motorola Net Rental Radio Expenditures and the Xxxxxxxxxx Net Rental Radio
Expenditures shall constitute part of the additional capital contribution of
Motorola and Xxxxxxxxxx, respectively.
(iv) Such additional capital contributions shall be promptly
converted into shares of JVC Common Stock and the JVC shall issue share
certificates to the Shareholders therefor.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF MOTOROLA AND XXXXXXXXXX
To induce Nextel, Motorola and Xxxxxxxxxx to enter into and perform
their respective obligations under this Agreement, except as set forth on the
schedules attached hereto, Motorola represents and warrants to Nextel and
Xxxxxxxxxx and Xxxxxxxxxx represents and warrants to Nextel and Motorola as of
the date hereof and as of the Closing Date (which representations and warranties
shall survive the Closing as provided in Section 10.7) all as follows in this
Article III; provided, however, that to the extent such representations and
warranties are made as to Motorola, such representations and warranties shall be
deemed to be made solely by Motorola and to the extent such representations and
warranties are made as to Xxxxxxxxxx, such representations and warranties shall
be deemed to be made solely by Xxxxxxxxxx; provided, further, that to the extent
such representations and warranties are made as to the JVC Subsidiaries, such
representations and warranties shall be deemed to be made only as to Dualcom and
Radionet to the extent made by Motorola and such representations and warranties
shall be deemed to be made only as to Master Communications, Master Trunking and
General Radio to the extent made by Xxxxxxxxxx; provided, further, that to the
extent that such representations are made as to Master Communications, such
representations and warranties shall be made only as of the Closing Date and not
as of the date hereof.
3.1 ORGANIZATION, GOOD STANDING, ETC.
Each of the JVC and each of the JVC Subsidiaries is a corporation duly
organized and validly existing under the laws of Peru. The JVC and the JVC
Subsidiaries have all corporate or limited liability company power and authority
required to own, operate and lease, except as set forth in Schedule 3.1, their
respective properties and assets and to carry on their respective businesses as
now conducted, except where such failure to have corporate or limited liability
company power and authority could not reasonably be expected to have a material
adverse effect on the JVC and the JVC Subsidiaries, taken as a whole. Neither
the JVC nor the JVC Subsidiaries are doing business outside of Peru. Immediately
following the consummation of the transactions set forth in this Agreement, the
JVC shall own, directly or indirectly, 100%, less one share, of the capital
stock of each of the JVC Subsidiaries 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 such capital stock).
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3.2 AUTHORIZATION, DUE EXECUTION AND BINDING EFFECT
Except as specifically contemplated in this Agreement to occur on or
after the Closing Date, all corporate action on the part of the JVC necessary to
authorize and perform the Transaction Agreements and the transactions
contemplated hereby and thereby has been taken. The Transaction Agreements have
been duly executed and delivered by the JVC and are legal, valid and binding
obligations of the JVC enforceable in accordance with their respective terms.
3.3 NO APPROVALS OR NOTICES REQUIRED; NO CONFLICTS WITH INSTRUMENTS
Except as listed on Schedule 3.3 and except where a violation could not
reasonably be expected to have a material adverse effect on the JVC and the JVC
Subsidiaries, taken as a whole, the execution, delivery and performance of the
Transaction Agreements by the JVC and the consummation of the transactions
contemplated hereby and thereby, including, but not limited to, the issuance of
shares of the JVC Common Stock, do not and will not (a) violate the By-laws or
other organizational documents of the JVC or the JVC 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 the JVC or the JVC Subsidiaries, (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 the JVC or the JVC
Subsidiaries under, any material agreement, lease, note or other restriction,
encumbrance, obligation or liability to which the JVC or the JVC Subsidiaries
are a party or by which the JVC or the JVC Subsidiaries are bound or to which
the assets (whether real or personal, tangible or intangible) of the JVC and the
JVC Subsidiaries (the "JVC Assets") are subject, (e) result in the creation or
imposition of any Lien on any of the JVC Assets or (f) have any adverse effect
on any of the Concessions (as defined below), including but not limited to the
interconnect rights set forth in the Concessions, licenses or other SMR rights
of the JVC or the JVC Subsidiaries. The JVC has provided or made available to
Nextel true and complete copies of all corporate and organizational documents of
the JVC and the JVC Subsidiaries, and there has been no change to any such
documents since the date such documents were provided except as described on
Schedule 3.3.
3.4 CONCESSIONS, LICENSES, PERMISSIONS, PERMITS, AUTHORIZATIONS, ETC.
Each of the JVC Subsidiaries (other than Master Communications) has
entered into concession contracts (the "Concessions") with Peru to install and
operate SMR services and, except as set forth on Schedule 3.4, has obtained all
currently required material governmental approvals, authorizations, licenses,
orders, permissions, registrations and permits of all agencies, whether local or
national, including, but not limited to, all approvals, authorizations,
licenses, orders, permissions, registrations and permits currently required for
installing, using and operating the Channels. The JVC Subsidiaries are not in
default of any of their obligations under the terms of their respective
Concessions (including but not limited to any required buildout or loading
dates), and all such Concessions are valid and in force, except as set forth on
Schedule 3.4 and where the failure to have any such valid Concession in force
could not,
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individually or in the aggregate, reasonably be expected to have a material
adverse effect on the JVC and the JVC Subsidiaries, taken as a whole. Except as
listed on Schedule 3.4, as of the date hereof no additional payments or fees of
any kind are required to be paid to governmental authorities to conduct the
Business as presently conducted. Except as listed on Schedule 3.4, as of the
date hereof all tax obligations generally applicable to the Concessions and
other payments or fees required to be paid to governmental authorities to
conduct the Business have been paid in a timely manner.
3.5 CAPITALIZATION OF THE JVC AND OWNERSHIP OF THE JVC CAPITAL STOCK
As of the date hereof and immediately prior to Closing, there are 2,000
authorized, issued and outstanding shares of S/.1.00 each of the JVC Common
Stock. Motorola, Xxxxxx Xxxxx Xxxxxxxx Yzaga and Xxxxxxxxxx are the record and
legal owners of the JVC Common Stock owned by them, as disclosed on Schedule
3.5, 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). All outstanding shares of the JVC Common Stock have
been duly authorized and validly issued and are fully paid and non-assessable.
Except as described on Schedule 3.5 or as otherwise contemplated by this
Agreement, there are no outstanding (a) shares of JVC Common Stock or other
voting securities of the JVC, (b) securities of the JVC convertible into or
exchangeable for shares of JVC Common Stock or other voting securities of the
JVC, or (c) options or other rights or obligations to acquire from the JVC, or
other obligations of the JVC to issue, any shares of JVC Common Stock, voting
securities or securities convertible into or exchangeable for shares of JVC
Common Stock or voting securities of the JVC. Schedule 3.5 contains a true and
complete list of the jurisdiction of organization, type of entity,
capitalization and voting rights of the JVC. Immediately prior to Closing, the
JVC has no subsidiaries and at Closing the JVC will have no subsidiaries other
than the JVC Subsidiaries and, except for the JVC Subsidiaries, will not own or
have any option or right to acquire more than 5% of the equity securities of any
Person.
3.6 CAPITALIZATION OF THE JVC SUBSIDIARIES AND OWNERSHIP OF THE CAPITAL
STOCK OF THE JVC SUBSIDIARIES
Schedule 3.6 sets forth, as of the date hereof, the number of
authorized, issued and outstanding shares of the capital stock and
participaciones sociales, as applicable, of each of the JVC Subsidiaries.
Immediately prior to the Closing, Motorola is the record and legal owner
directly and through Xx. Xxxxxx Xxxxx Xxxxxxxx Yzaga and Xx. Xxxxxx Xxxxxxxx
Xxxxxxxx of 100% of the capital stock of Radionet and the record and legal owner
directly and through Xx. Xxxxxx Xxxxx Xxxxxxxx Yzaga and Xx. Xxxxxx Xxxxxxxx
Xxxxxxxx of 100% of the participaciones sociales of Dualcom. Immediately prior
to the Closing, Xxxxxxxxxx is the record and legal owner directly and through
Xx. Xxxx Xxxxxx Xxxxxxxxxx Tabja and Xx. Xxxxxx Xxxxxxx Xxxxxxxxxx of 100% of
the capital stock of Master Communications, the record and legal owner directly
and through Xx. Xxx Xxxxxxxx Takoen and Xx. Xxxxxxx Xxxxxxxxxx Pozu of 100% of
the capital stock of General Radio. Immediately prior to the Closing, Master
Communications is the record and legal owner, directly and through Xx. Xxxx
Xxxxxx Xxxxxxxxxx and Xx. Xxxxxx Xxxxxxx Xxxxxxxxxx of 100% of the capital stock
of Mastercom Trunking. All outstanding shares
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of the capital stock of the JVC Subsidiaries have been duly authorized and
validly issued and are fully paid and non-assessable. Except as described on
Schedule 3.6 or as otherwise contemplated by this Agreement, there are no
outstanding (a) shares of capital stock of the JVC Subsidiaries or other voting
securities of the JVC Subsidiaries, (b) securities of the JVC Subsidiaries
convertible into or exchangeable for shares of capital stock of the JVC
Subsidiaries or other voting securities of the JVC Subsidiaries, or (c) options
or other rights or obligations to acquire from the JVC Subsidiaries, or other
obligations of the JVC Subsidiaries to issue, any shares of capital stock of the
JVC Subsidiaries, voting securities or securities convertible into or
exchangeable for shares of capital stock of the JVC Subsidiaries or voting
securities of the JVC Subsidiaries. Schedule 3.6 contains a true and complete
list of the jurisdiction of organization, type of entity, attorney-in-fact (if
any), delegate manager (if any), capitalization and voting rights of the JVC
Subsidiaries. Except for Master Communications' ownership of Mastercom Trunking,
none of the JVC Subsidiaries has any subsidiaries and none of the JVC
Subsidiaries owns or has any option or right to acquire more than 5% of the
equity securities of any Person.
3.7 FINANCIAL STATEMENTS
Motorola has previously delivered to Nextel balance sheets and income
statements of Dualcom and Radionet as of and for the ten months ended October
31, 1997 and Xxxxxxxxxx has previously delivered to Nextel balance sheets and
income statements of (i) General Radio as of and for the ten months ended
October 31, 1997 and (ii) Master Communications as of and for the year-to-date
period ended November 19, 1997 and for the year ended December 31, 1996
(collectively, the "Financial Statements"). The Financial Statements present
fairly the financial position and results of operations of the JVC Subsidiaries
as of the dates and for the periods indicated therein; provided, however, that
the Financial Statements may be subject to normal year-end adjustments of a type
consistent with prior years and do not include footnotes. The Financial
Statements are attached as Exhibit 3.7. All Financial Statements for Master
Communications are pro forma taking into account the division of Master
Communications referenced in Section 8.9.
3.8 ABSENCE OF CERTAIN CHANGES
Since October 31, 1997 (except with respect to Master Communications,
since November 19, 1997), except as contemplated by this Agreement, and except
as listed on Schedule 3.8, the Business has been conducted in the ordinary
course consistent with past practices and there has not been:
(a) any declaration, setting aside or payment of any dividend or other
distribution, whether in cash or securities, with respect to any shares of the
JVC Common Stock, or any repurchase, redemption or other acquisition by
Motorola, Xxxxxxxxxx or the JVC of any outstanding shares of JVC Common Stock or
other securities of, or other ownership interests in, the JVC;
(b) any amendment of any material term of any outstanding security of
the JVC or the JVC Subsidiaries;
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(c) any incurrence, assumption or guarantee by the JVC or the JVC
Subsidiaries of any indebtedness for borrowed money;
(d) any creation or assumption by the JVC or the JVC Subsidiaries of
any Lien on any material asset other than in the ordinary course of business
consistent with past practices;
(e) any making of any loan, advance or capital contributions to or
investment in any Person by the JVC or the JVC Subsidiaries;
(f) any damage, destruction or other casualty loss (whether or not
covered by insurance) affecting the Business or the JVC Assets that,
individually or in the aggregate, has had or could reasonably be expected to
have a material adverse effect on the Business;
(g) any transaction or commitment made, or any contract or agreement
entered into, by Motorola (or an Affiliate thereof), Xxxxxxxxxx (or an Affiliate
thereof) or the JVC relating to the JVC Assets or the Business (including the
acquisition or disposition of any assets) or any relinquishment by Motorola,
Xxxxxxxxxx, the JVC or the JVC Subsidiaries of any contract or other right, in
either case, material to the JVC and the JVC Subsidiaries, taken as a whole,
other than transactions and commitments in the ordinary course of business
consistent with past practices or contemplated by this Agreement;
(h) any change in any method of accounting or accounting practice by
the JVC or the JVC Subsidiaries;
(i) any (i) employment, deferred compensation, severance, retirement or
other similar agreement entered into by the JVC or the JVC Subsidiaries 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 the JVC or the JVC
Subsidiaries or (iii) change in compensation or other benefits payable to any
director, officer or employee of or consultant to the JVC or the JVC
Subsidiaries pursuant to any severance or retirement plans or policies thereof;
or
(j) 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 the JVC or the JVC Subsidiaries, which employees were not
subject to a collective bargaining agreement as of October 31, 1997, or any
lockouts, strikes, slowdowns, work stoppages or threats thereof by or with
respect to any employees of the JVC or the JVC Subsidiaries.
3.9 LIABILITIES
There are no long-term liabilities of the JVC or the JVC Subsidiaries
of any kind whatsoever, whether accrued, contingent, absolute, determined,
determinable or otherwise, that are required by U.S. GAAP 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 disclosed on Schedule 3.9. Except as disclosed
on Schedule 3.9,
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none of the liabilities of the JVC or the JVC Subsidiaries are past due, and all
such liabilities were incurred in the ordinary course of business on terms
consistent with past practice.
3.10 INTERCOMPANY TRANSACTIONS
Except as disclosed on Schedule 3.10, there are no intercompany
balances, and there are no and, there have not been any intercompany
transactions, between Motorola, Xxxxxxxxxx or any Affiliate thereof, on the one
hand, and the JVC or the JVC Subsidiaries, on the other hand.
3.11 TAXES
The JVC and the JVC Subsidiaries and any predecessor of the foregoing
have accurately prepared in all material respects and duly filed with the
appropriate Peruvian national, regional, departmental, provincial, 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 the JVC
and the JVC Subsidiaries, and, except as disclosed on Schedule 3.11, have paid
in full or made adequate provision for the payment of all material Taxes. Except
as disclosed on Schedule 3.11, neither the JVC nor the JVC Subsidiaries is
delinquent in the payment of any material Taxes owed by it, and no deficiencies
have been assessed or threatened with respect to any Taxes owed by it. Neither
the JVC nor any of the JVC Subsidiaries has requested or received from any Tax
Authorities any extensions or tolling arrangements with respect to any Taxes or
is subject to any open or threatened audits by any Tax Authorities.
3.12 JVC ASSETS
(a) Motorola and Xxxxxxxxxx, as applicable, have delivered or made
available to Nextel true and complete copies of all material leases, subleases,
rental agreements, contracts of sale or licenses of any portion of the personal
property owned, leased or rented by the JVC Subsidiaries as of the date hereof
(the "JVC Personal Property"). Immediately following consummation of the
transactions set forth in this Agreement, the JVC, through its ownership of the
JVC Subsidiaries, will have legal ownership of or other legal rights to use all
property used in the conduct of the Business as presently conducted. Schedule
3.12(a) lists all owned JVC Personal Property and all leased or rented JVC
Personal Property with a monthly lease or rental payment (or annual lease
payment pro-rated on a monthly basis) in excess of the Nuevos Soles equivalent
of $5,000.
(b) Except as listed on Schedule 3.12(b), none of the JVC or the JVC
Subsidiaries owns, leases or uses any material real property.
(c) Each material lease, license, rental agreement, contract of sale or
other agreement to which any of the JVC Assets are subject is valid and in good
standing in all material respects; the JVC and the JVC Subsidiaries have
performed all material obligations imposed upon them thereunder, and neither the
JVC, the JVC Subsidiaries nor, to the knowledge of Motorola or Xxxxxxxxxx, any
other party thereto is in material default thereunder in any material respect,
nor is there any event that with or without the giving of notice or lapse of
time, or both, would
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constitute a material default thereunder by the JVC, the JVC Subsidiaries or any
other party thereto. None of the JVC or the JVC Subsidiaries has received
notice, and none of the JVC or the JVC Subsidiaries is otherwise aware, that any
party to any such lease, license, rental agreement, contract of sale or other
agreement intends to cancel, terminate or refuse to renew the same or to
exercise or decline to exercise any option or other right thereunder. None of
the JVC 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 the JVC and the JVC Subsidiaries,
taken as a whole.
(d) Except as listed on Schedule 3.12(d), the JVC Assets are free and
clear of all Liens other than landlord's Liens, Liens for taxes not yet due or
other immaterial Liens arising in the ordinary course of business (collectively,
"Permitted Liens") and, other than leased JVC Assets, the JVC or the JVC
Subsidiaries have good and marketable title thereto. Except as set forth on
Schedule 3.12(d), the JVC or the JVC Subsidiaries have valid leasehold interests
in all leased JVC Assets.
(e) No Person has any right of first refusal or option to acquire any
interest in the JVC Assets or any part thereof, and none of the JVC or the JVC
Subsidiaries have sold or contracted to sell the JVC Assets or any part thereof
or interest therein other than as set forth herein.
3.13 CHANNELS
The JVC Subsidiaries hold Concessions for the Channels, as listed on
Schedule 3.13. The JVC has provided or made available to Nextel a true and
complete copy of each Concession. Schedule 3.13 sets forth the Concession
pursuant to which each Channel was granted, the geographic location of such
Channel, the number of such Channel, the dates of grant and expiration of the
Concession with respect to such Channel, any required buildout or loading dates,
and the status thereof, with respect to such Channel, the number of subscribers
using the Channels in such location as of October 31, 1997, and, to the extent
known, the nature of any frequency interference with the use of such Channel and
any Channel blockage by third parties with respect to the use of such Channel.
Schedule 3.13 additionally lists all such information with respect to any
channels for which any of the JVC Subsidiaries have applied for but not yet
received a concession (the "Applied Channels") and any channels which have been
reserved to any of the JVC Subsidiaries in accordance with the terms of their
respective concessions (the "Reserved Channels"). Except as set forth on
Schedule 3.13, all commercially reasonable action that is necessary to preserve
the rights to any Concessions, Channels, Applied Channels or Reserved Channels
has been taken or is being taken.
The JVC Subsidiaries have the legal right to interconnect the Channels
to the public service networks (which as of the date hereof include, but are not
limited to, the public telephone and public cellular networks) in Peru to the
extent provided in each Concession and under Peruvian law. Except as listed in
Schedule 3.13, the JVC Subsidiaries have not entered into any agreement or
understanding with respect to the interconnection of the Channels to the public
telephone and public cellular networks in Peru nor have they initiated or
conducted negotiations
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to such effect. To the knowledge of Motorola and Xxxxxxxxxx, no action has been
taken or threatened to be taken by the MTC, OSIPTEL or any other third party
that could reasonably be expected to interfere with the interconnection rights
of any of the JVC Subsidiaries.
3.14 CONTRACTS
The JVC has provided or made available to Nextel a true and complete
copy of all material contracts to which Motorola or Xxxxxxxxxx (to the extent
such contract relates to the Business) or the JVC or the JVC Subsidiaries are a
party, including, without limitation, security agreements, conditional sale
agreements and instruments relating to the borrowing of money. Schedule 3.14
lists all such contracts. All such contracts are valid and enforceable and in
full force and effect except where the failure to be so could not reasonably be
expected to have a material adverse effect on the JVC and the JVC Subsidiaries
taken as a whole. Motorola, Xxxxxxxxxx, the JVC and the JVC Subsidiaries, as the
case may be, have performed all material obligations imposed upon it or them
thereunder, and there are not, under any of such contracts, any defaults or
events of default on the part of Motorola, Xxxxxxxxxx, the JVC or the JVC
Subsidiaries, as the case may be, or to the knowledge of Motorola or Xxxxxxxxxx,
any other party thereto, that could be reasonably expected to materially
adversely affect the business, assets, financial condition or business prospects
of the JVC and the JVC Subsidiaries, taken as a whole. None of Motorola,
Xxxxxxxxxx, the JVC or the JVC Subsidiaries has received notice, and none of
Motorola, Xxxxxxxxxx, the JVC or the JVC Subsidiaries is 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.
3.15 CLAIMS AND LEGAL PROCEEDINGS
Except as described on Schedule 3.15, there are no claims, actions,
suits, arbitrations, proceedings or investigations pending or to the knowledge
of Motorola or Xxxxxxxxxx, threatened relating to the Business, before or by any
governmental or nongovernmental department, commission, board, bureau, agency,
instrumentality or any other Person. To the knowledge of Motorola or Xxxxxxxxxx,
except as described on Schedule 3.15, there is no existing or pending
legislative or regulatory or existing, pending or threatened judicial action by
any national, regional, departmental, provincial or local entity in Peru that
could reasonably be construed or expected to deny or materially hinder the right
of the JVC or the JVC Subsidiaries to use the Channels for their intended
purpose under the applicable Concession or the ability of the JVC or the JVC
Subsidiaries to interconnect to the public telephone or public cellular network,
to reuse the same frequency in each licensee's geographic area or to employ the
iDEN technology in the Channels. There are no outstanding or unsatisfied
judgments, orders, decrees or stipulations to which Motorola, Xxxxxxxxxx, the
JVC or the JVC Subsidiaries is a party that involve the transactions
contemplated hereby or that could, individually or in the aggregate, reasonably
be expected to have a material adverse effect upon the business, assets, or
financial condition or business prospects of the JVC and the JVC Subsidiaries,
taken as a whole.
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3.16 LABOR MATTERS
(a) Except as set forth on Schedule 3.16, there are no material
disputes, employee grievances, disciplinary actions or legal actions pending or
to the knowledge of Motorola or Xxxxxxxxxx threatened between the JVC or the JVC
Subsidiaries and any of its current or former employees or independent
contractors and no basis for any such claims under Peruvian law. Except as set
forth on Schedule 3.16, the JVC and the JVC Subsidiaries have complied in all
material respects with all provisions of all applicable laws in Peru relating to
the employment of labor and have no liability for any arrears of wages, profit
sharing, compensation for termination of services, vacations, pension fund
payments, social security payments or taxes or penalties for failure to comply
with any such laws, including but not limited to in connection with work
performed by independent contractors. 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 the JVC or the JVC Subsidiaries.
(b) Except as specifically set forth on Schedule 3.16, none of the JVC
or the JVC Subsidiaries is a party to any:
(i) management, employment or other contract providing for the
employment or rendition of executive services;
(ii) employment contract that is not terminable without penalty by
the JVC or the JVC Subsidiaries on 30 days' notice;
(iii) bonus, incentive, deferred compensation, severance pay,
pension, profit-sharing, retirement, stock purchase, stock option, employee
benefit or similar plan, agreement or arrangement;
(iv) 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
(v) other employment contract or other compensation agreement or
arrangement, oral or written, affecting or relating to current or former
employees of the JVC or the JVC Subsidiaries.
(c) All such contracts and other agreements and arrangements set forth
on Schedule 3.16 are valid and in full force and effect, the JVC and the JVC
Subsidiaries have performed all material obligations imposed upon them
thereunder, and there are, under any of such contracts, agreements or
arrangements, no defaults or events of default by the JVC, the JVC Subsidiaries
or any other party thereto that could be reasonably expected to materially
adversely affect the business, assets, financial condition or business prospects
of the JVC and the JVC Subsidiaries, taken as a whole, or that could reasonably
be expected to materially adversely affect the relationship of the JVC or the
JVC Subsidiaries or their Affiliates with any employee of the JVC or the JVC
Subsidiaries. Other than as set forth on Schedule 3.16, no employee of the JVC
or the JVC Subsidiaries has entered into an employment contract, and no bonus or
other
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compensation of any kind is due to any such employee other than as required by
Peruvian labor law.
(d) From October 31, 1997 to and including the Closing Date, none of
the JVC or the JVC Subsidiaries has made any loans to any of its officers or
employees or any of the officers or employees of the JVC, the JVC Subsidiaries
or their Affiliates.
3.17 CUSTOMERS
Except as described on Schedule 3.17, none of Motorola, Xxxxxxxxxx, the
JVC or the JVC Subsidiaries has received any customer complaints or expressions
of customer dissatisfaction, in writing or orally, of a material nature
concerning the service provided by the JVC or the JVC Subsidiaries.
3.18 APPLICABLE LAWS
Motorola and Xxxxxxxxxx have complied, and are in compliance, with the
U.S. Foreign Corrupt Practices Act with respect to the Business, and the JVC and
the JVC Subsidiaries have complied, and are in compliance, with the U.S. Foreign
Corrupt Practices Act. Except where noncompliance could not, individually or in
the aggregate, reasonably be expected to have a material adverse effect on the
JVC and the JVC Subsidiaries, taken as a whole, and except to the extent
provided on Schedules 3.13 and 3.18, Motorola, Xxxxxxxxxx, the JVC and the JVC
Subsidiaries have complied, and are in compliance, with all other presently
existing local and national laws, rules, ordinances, decrees and orders in
connection with the operation of the Business as currently conducted or in the
case of the JVC and the JVC Subsidiaries applicable to their owned or leased
properties. None of Motorola, Xxxxxxxxxx, the JVC or the JVC Subsidiaries has
reasonably been put on notice of any action or omission which could be deemed an
unasserted present or past unremedied failure by Motorola, Xxxxxxxxxx, the JVC
or the JVC Subsidiaries, as the case may be, to comply with any such laws,
rules, ordinances, decrees and orders, other than actions or omissions which
such entity reasonably believes are not failures to comply. None of Motorola,
Xxxxxxxxxx, the JVC or the JVC Subsidiaries or any of their Affiliates 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 or entity in the discharge of his, her
or its official duties. Each of the JVC and the JVC Subsidiaries have 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 JVC or the JVC Subsidiaries.
None of Motorola, Xxxxxxxxxx, the JVC or the JVC Subsidiaries has accepted or
received any unlawful contributions, payments, gifts or expenditures in
connection with the operation of the Business.
3.19 INSURANCE
The JVC has provided or made available to Nextel true and complete
copies of all insurance policies relating to the JVC, the JVC Subsidiaries and
the JVC Assets in effect as of the date hereof.
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3.20 TRADEMARKS
(a) The applicable JVC Subsidiaries own, or have full and unrestricted
rights within Peru (to the extent available under Peruvian law) to all material
trademarks now used by such JVC Subsidiaries as set forth on Schedule 3.20.
(b) Where registration of the intellectual property listed 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 Peru.
(c) A true and complete list of (i) trademark registrations and
applications therefor to which the JVC or the JVC Subsidiaries are a party or
that are used in the operation of the Business and (ii) any interference actions
or adverse claims made or, to the knowledge of Motorola or Xxxxxxxxxx,
threatened in respect thereof and any claims made or, to the knowledge of
Motorola or Xxxxxxxxxx, threatened for alleged infringement thereof are set
forth on Schedule 3.20. The JVC and the JVC Subsidiaries, in their operations,
do not, to the knowledge of Motorola or Xxxxxxxxxx, infringe any valid trademark
of any other Person. Except as set forth on Schedule 3.20, all agreements listed
on Schedule 3.20 are valid and enforceable, the JVC and the JVC Subsidiaries
have performed all material obligations imposed upon them thereunder, and
neither the JVC, the JVC Subsidiaries nor, to the knowledge of Motorola or
Xxxxxxxxxx, 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 the JVC, the JVC
Subsidiaries or, to the knowledge of Motorola or Xxxxxxxxxx, any other party
thereto. The JVC and the JVC Subsidiaries have not 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.
None of the JVC and the JVC Subsidiaries has entered into any agreement to
indemnify any Person against any claim or charge of infringement of any
trademarks.
3.21 COMPLIANCE WITH ENVIRONMENTAL LAWS
None of Motorola, Xxxxxxxxxx, the JVC or any of the JVC Subsidiaries
or, to the knowledge of Motorola or Xxxxxxxxxx, 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, storage, disposal or release 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 the JVC or any of the JVC
Subsidiaries in the operation of the 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 reasonably be expected to subject the JVC, any
of the JVC Subsidiaries or any shareholder of the JVC to any material liability
under any provision of law in existence on or prior to the Closing Date.
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3.22 BROKERAGE
None of Motorola, Xxxxxxxxxx, the JVC or the JVC Subsidiaries has
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 Motorola or
Xxxxxxxxxx, as the case may be.
ARTICLE IV
ADDITIONAL REPRESENTATIONS AND WARRANTIES OF MOTOROLA
To induce Nextel, Xxxxxxxxxx and the JVC to enter into this Agreement,
Motorola represents and warrants to Nextel, Xxxxxxxxxx and the JVC as of the
date hereof and as of the Closing Date (which representations and warranties
shall survive the Closing as provided in Section 10.7) all as follows in this
Article IV.
4.1 ORGANIZATION, GOOD STANDING, ETC.
Motorola is a corporation duly organized and validly existing under the
laws of the state of Delaware. Motorola has all requisite power and authority to
own, operate and lease its properties and assets and to carry on its business as
now conducted except where such failure to have corporate power and authority
could not reasonably be expected to have a material adverse effect on Motorola.
4.2 AUTHORIZATION, DUE EXECUTION AND BINDING EFFECT
All corporate action on the part of Motorola necessary to authorize and
perform the Transaction Agreements and the transactions contemplated hereby and
thereby has been taken. The Transaction Agreements have been duly executed and
delivered by Motorola and are legal, valid and binding obligations of Motorola,
enforceable in accordance with their respective terms.
4.3 NO APPROVALS OR NOTICES REQUIRED; NO CONFLICTS WITH INSTRUMENTS
The execution, delivery and performance of the Transaction Agreements
by Motorola and the consummation of the transactions contemplated hereby and
thereby do not and will not (a) violate the corporate charter or other
organizational documents of Motorola, (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 Motorola, (c)
except as set forth on Schedule 4.3, require any consent, approval or
authorization of any Person, governmental authority or other organization or
entity or (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 Motorola under, any
material agreement, lease, note or other restriction, encumbrance, obligation or
liability to which Motorola is a party or by which Motorola is bound or to which
the assets (whether real or personal, tangible or intangible) of Motorola are
subject.
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4.4 PERUVIAN SMR SERVICES
Except for the JVC and the JVC Subsidiaries, neither Motorola nor any
of its Affiliates have any other interests, direct or indirect, contingent or
pending, in concessions, channels or frequencies licensed for use to provide SMR
service in Peru.
ARTICLE V
ADDITIONAL REPRESENTATIONS AND WARRANTIES OF XXXXXXXXXX
To induce Nextel, Motorola and the JVC to enter into this Agreement,
Xxxxxxxxxx represents and warrants to Nextel, Motorola and the JVC as of the
date hereof and as of the Closing Date (which representations and warranties
shall survive the Closing as provided in Section 10.7) all as follows in this
Article V.
5.1 CITIZENSHIP; RESIDENCY
Xxxxxxxxxx is a citizen and resident of Peru and has the legal capacity
to enter into this Agreement and the other Transaction Agreements.
5.2 DUE EXECUTION AND BINDING EFFECT
All action on the part of Xxxxxxxxxx necessary to perform the
Transaction Agreements and the transactions contemplated hereby and thereby,
including without limitation any consent or authorization of Xxxxxxxxxx'x spouse
required by Peruvian law, has been taken. The Transaction Agreements have
been duly executed and delivered by Xxxxxxxxxx and are legal, valid and binding
obligations of Xxxxxxxxxx, enforceable in accordance with their respective
terms.
5.3 NO APPROVALS OR NOTICES REQUIRED; NO CONFLICTS WITH INSTRUMENTS
The execution, delivery and performance of the Transaction Agreements
by Xxxxxxxxxx and the consummation of the transactions contemplated hereby and
thereby do not and will not (a) 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 Xxxxxxxxxx, (b) except as
set forth on Schedule 5.3, require any consent, approval or authorization of any
Person, governmental authority or other organization or entity or (c) 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 Xxxxxxxxxx under, any material agreement, lease,
note or other restriction, encumbrance, obligation or liability to which
Xxxxxxxxxx is a party or by which Xxxxxxxxxx is bound or to which the assets
(whether real or personal, tangible or intangible) of Xxxxxxxxxx are subject.
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5.4 PERUVIAN SMR SERVICES
Except for the JVC and the JVC Subsidiaries, neither Xxxxxxxxxx nor any
of his Affiliates have any other interests, direct or indirect, contingent or
pending, in concessions, channels or frequencies licensed for use to provide SMR
service in Peru.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF NEXTEL
To induce Motorola, Xxxxxxxxxx and the JVC to enter into this
Agreement, each of Nextel and Nextel International, respectively, represents and
warrants to Motorola, Xxxxxxxxxx and the JVC as of the date hereof and as of the
Closing Date (which representations and warranties shall survive the Closing as
provided in Section 10.7) all as follows in this Article VI.
6.1 ORGANIZATION, GOOD STANDING, ETC.
Nextel is a limited life company duly organized and validly existing
under the laws of the Cayman Islands. Nextel International is a corporation duly
organized and validly existing under the laws of the State of Washington. Each
of Nextel and Nextel International has all requisite power and authority to own,
operate and lease its properties and assets and to carry on its business as now
conducted except where such failure to have corporate power and authority could
not reasonably be expected to have a material adverse effect on Nextel or Nextel
International.
6.2 AUTHORIZATION, DUE EXECUTION AND BINDING EFFECT
All corporate action on the part of Nextel and Nextel International
necessary to authorize and perform the Transaction Agreements and the
transactions contemplated hereby and thereby has been taken. The Transaction
Agreements have been duly executed and delivered by Nextel and Nextel
International and are legal, valid and binding obligations of Nextel and Nextel
International, enforceable in accordance with their respective terms.
6.3 NO APPROVALS OR NOTICES REQUIRED; NO CONFLICTS WITH INSTRUMENTS
The execution, delivery and performance of the Transaction Agreements
by Nextel and Nextel International and the consummation of the transactions
contemplated hereby and thereby do not and will not (a) violate the corporate
charter or other organizational documents of Nextel or Nextel International, (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 Nextel or Nextel International, (c) except as set forth on
Schedule 6.3, require any consent, approval or authorization of any Person,
governmental authority or other organization or entity or (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 Nextel or Nextel International under, any
material agreement, lease, note or other restriction, encumbrance, obligation or
liability to which Nextel or Nextel International is a party or by
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which Nextel or Nextel International is bound or to which the assets (whether
real or personal, tangible or intangible) of Nextel or Nextel International are
subject.
6.4 BROKERAGE
Neither Nextel nor Nextel International has 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 Nextel.
6.5 PERUVIAN SMR SERVICES
None of Nextel, Nextel International or any of their Affiliates have
any interests, direct or indirect, contingent or pending, in concessions,
channels or frequencies licensed for use to provide SMR service in Peru.
ARTICLE VII
FURTHER AGREEMENTS
Each of the parties hereto agrees to perform and observe the following
agreements applicable to it:
7.1 SCHEDULES
(a) All representations and warranties herein by Motorola, Xxxxxxxxxx
or Nextel shall apply to any exhibits, schedules and certificates attached to
this Agreement delivered by Motorola, Xxxxxxxxxx or Nextel, as the case may be,
or any officer thereof, and each such certificate shall be deemed to be a
representation by Motorola, Xxxxxxxxxx or Nextel, as the case may be, as to the
matters set forth therein.
(b) On or prior to the Closing Date, Motorola, Xxxxxxxxxx or Nextel may
deliver to the other parties hereto one or more Schedules to this Agreement that
are revised and updated to reflect changes to the operations or condition of
Motorola, Xxxxxxxxxx, Nextel or the JVC or the JVC Subsidiaries, as the case may
be, between the date hereof and the Closing Date. The delivery of any such
revised Schedule shall not affect the rights of the parties hereto under Article
VIII or IX, as the case may be, 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.
7.2 ACCESS
From the date of this Agreement to and including the Closing Date,
Motorola, Xxxxxxxxxx and the JVC shall (and shall cause each of the JVC
Subsidiaries to) grant Nextel, Motorola and Xxxxxxxxxx and their agents,
employees, accountants and attorneys reasonable access during normal business
hours to, and the opportunity to examine and make copies of, all of the books,
records, documents, instruments and papers of Motorola, Xxxxxxxxxx, the JVC and
the JVC Subsidiaries relating to the Business, and the right to inspect all of
their operations, properties
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and assets relating to the Business at any reasonable time and provide any
authorizations necessary to examine the status of the Concessions with the MTC.
7.3 MANAGEMENT INFORMATION
From the date of this Agreement to and including the Closing Date,
Motorola, Xxxxxxxxxx and the JVC shall (and shall cause the JVC Subsidiaries to)
provide to Nextel all material information specifically requested by Nextel
regarding the operation of the Business during such period.
7.4 ADVICE OF CLAIMS
From the date of this Agreement to and including the Closing Date,
Motorola, Xxxxxxxxxx and the JVC shall (and shall cause the JVC Subsidiaries to)
promptly advise Nextel, Motorola and Xxxxxxxxxx in writing if it has notice or
knowledge of the commencement or threat of any claims, litigation or proceedings
against or affecting the JVC or the JVC Subsidiaries or any rulings, decrees or
other material developments in any claim, action or suit described on Schedule
3.15 or arising after the date hereof.
7.5 CONDUCT OF THE BUSINESS
(a) From the date hereof until the Closing Date, each of Motorola,
Xxxxxxxxxx and the JVC shall (and shall cause the JVC Subsidiaries to) conduct
the Business in the ordinary course consistent with past practices and use its
best efforts to preserve intact the business organizations and relationships
with third parties and to keep available the services of the present employees
of the Business. Without limiting the generality of the foregoing, from the date
hereof until the Closing Date, each of Motorola, Xxxxxxxxxx and the JVC will
ensure that the JVC and the JVC Subsidiaries shall not:
(i) except for capital expenditures approved by the parties in
accordance with Section 2.3(b), acquire assets from any other Person having a
value individually or in the aggregate in excess of $50,000;
(ii) sell, lease, license or otherwise dispose of any JVC Assets
except in the ordinary course consistent with past practices;
(iii) issue any additional shares of capital stock;
(iv) make any payments of dividends or other distributions with
respect to its capital stock;
(v) directly or indirectly, take any action or fail to take any
action that could result in the loss of the benefit of any Concession or
Channel, or that may affect any rights of the JVC Subsidiaries with respect to
any Applied Channels or Reserved Channels; or
(vi) agree or commit to do any of the foregoing.
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(b) Each of Motorola, Xxxxxxxxxx and the JVC shall (and shall cause the
JVC Subsidiaries to) to the best of their respective abilities (i) preserve and
protect the right of the JVC and the JVC Subsidiaries to use all the Channels as
currently intended, including for use with iDEN technology, and (ii) take action
to satisfy all applicable build-out and loading requirements. Each of Motorola,
Xxxxxxxxxx and the JVC shall immediately notify the other parties hereto if the
right of the JVC or the JVC Subsidiaries to use any of the Channels will not be
protected or preserved or if applicable build-out or loading requirements may
not be met.
(c) Each of Motorola, Xxxxxxxxxx and the JVC shall not (and shall cause
the JVC Subsidiaries not to) (i) take or agree or commit to take any action that
would make any representation or warranty of Motorola or Xxxxxxxxxx,
respectively, hereunder inaccurate in any respect at, or as of any time prior
to, the Closing Date or (ii) 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 any such time.
7.6 COMPLIANCE WITH LAWS
Each of Motorola, Xxxxxxxxxx, Nextel and the JVC agrees that it and any
director, officer, agent, employee or other Person acting on its behalf or on
behalf of the JVC or the JVC Subsidiaries (i) 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 or entity in the discharge of his, her or its official
duties, (ii) will not engage in any such unlawful conduct during the time of
carrying out their duties, (iii) 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
to the extent relating to the JVC or the JVC Subsidiaries and (iv) 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
any Concession. Each of Motorola and Xxxxxxxxxx further agrees that it will
cause the JVC and the JVC Subsidiaries to comply with the preceding sentence.
7.7 NO TRANSFERS
Each of Motorola and Xxxxxxxxxx hereby agrees that it will not (and it
will not permit any of its Affiliates to), prior to the Closing Date, sell,
assign, transfer, pledge, hypothecate, mortgage, set in usufruct, encumber or
otherwise dispose of all or any part of any the JVC Common Stock or other
securities of the JVC convertible into the JVC Common Stock without the prior
written consent of Nextel.
7.8 MASTERCOM NAME
Xxxxxxxxxx consents on his behalf and on behalf of his Affiliates to
the use of the name "Mastercom" in the corporate name of Mastercom Trunking S.A.
and the use of the name "Mastercom" in connection with the business of the JVC
and the JVC Subsidiaries. Xxxxxxxxxx and the JVC will enter into a payment-free
license agreement reasonably satisfactory to the JVC
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relating to the JVC's use of the name "Mastercom" as soon as reasonably
practicable following Closing.
7.9 CAPITAL INCREASE
Each of the JVC, Motorola, Xxxxxxxxxx and Nextel hereby agrees to
execute and deliver all documents necessary to authorize, subscribe and pay for
the Capital Increase, including without limitation minutes of the meeting of
shareholders at which the Capital Increase was authorized.
7.10 NEXTEL INTERNATIONAL GUARANTEE
As partial consideration for the issuance of shares of JVC Common Stock
to Nextel hereunder, if Nextel shall have defaulted in the payment when due of
any amount required to be paid by Nextel under this Agreement, and such default
shall remain uncured 10 days following written notice by any other party hereto,
then Nextel International shall within five days after delivery of written
notice by such other party pay the amount not so paid.
7.11 OTHER COOPERATION
All parties hereto shall fully cooperate with the other parties hereto
and their legal counsel and accountants in connection with, any other steps
reasonably required to be taken as part of the obligations of the parties under
this Agreement and any of the other Transaction Agreements or to promptly
satisfy the conditions precedent hereunder.
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH PARTY
The obligations of each party to perform and observe the covenants,
agreements and conditions hereof to be performed and observed by it on 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 such party:
8.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES
The representations and warranties of the other parties contained
herein (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 transactions contemplated hereby and except to
the extent that any 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.
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8.2 PERFORMANCE OF AGREEMENT
Each of the other 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 it on or before the Closing Date.
8.3 APPROVALS AND CONSENTS
All material approvals and consents listed on Schedules 3.3, 4.3, 5.3,
6.3 and 7.3 and required for the other parties to perform their obligations
hereunder shall have been obtained on or before the Closing Date and shall
remain in effect as of the Closing Date.
8.4 OFFICERS' CERTIFICATES
At the Closing Date, each party shall have received certificates from a
Vice President and the Secretary or Assistant Secretary of each of the other
corporate parties and from Xxxxxxxxxx dated as of such date, in substantially
the form attached as Exhibit 8.4, certifying that (a) all the conditions set
forth in this Article VIII applicable to such party have been fulfilled and (b)
the representations and warranties of such party, herein are true and correct in
all material respects as of the Closing Date.
8.5 SHAREHOLDERS AGREEMENT
Each of the other parties shall have entered into the Shareholders
Agreement in the form of Exhibit 8.5 on or before the Closing Date.
8.6 REGISTRATION RIGHTS AGREEMENT
Each of the other parties shall have entered into the Registration
Rights Agreement in the form of Exhibit 8.6 on or before the Closing Date.
8.7 LEGAL PROCEEDINGS
On the Closing Date, 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.
8.8 BUSINESS PLAN
Each party shall have agreed upon and approved a three-year business
plan related to the Business (the "Business Plan").
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8.9 DIVISION OF MASTER COMMUNICATIONS
Xxxxxxxxxx shall have caused the division of Master Communications such
that following such division the sole assets of Master Communications shall be
100% of the capital stock of Mastercom Trunking, less one share, and the assets
listed in Schedule 3.12(a). Xxxxxxxxxx shall have delivered the public deed
evidencing such division, inscribed by the Public Register, to the other parties
hereto.
8.10 CONFIDENTIALITY, NONCOMPETITION AND PROPRIETARY INFORMATION AGREEMENTS
On or before the Closing Date, all high-level officers, directors and
employees of the JVC and the JVC Subsidiaries shall have entered into
confidentiality agreements, noncompetition agreements and proprietary
information agreements relating to SMR services and operations in Peru
substantially in the form attached hereto as Exhibit 8.10.
8.11 OPINIONS OF COUNSEL
On or before the Closing Date: (a) Nextel and Xxxxxxxxxx shall have
received opinions of counsel to (i) Motorola in the United States and Peru and
(ii) the JVC in Peru, and (b) Nextel and Motorola shall have received opinions
of counsel to (i) Xxxxxxxxxx in Peru and (ii) the JVC in Peru, each of which
shall be substantially in the form attached hereto as Exhibit 8.11.
8.12 TITLE
To the extent any Liens exist on the JVC Assets, Motorola and/or
Xxxxxxxxxx, as applicable shall have caused the JVC or the JVC Subsidiaries to
have obtained the release of all Liens on the JVC Assets, other than Permitted
Liens, on or before the Closing Date.
8.13 DOCUMENTATION RELATING TO THE CONCESSIONS
Nextel, Motorola and Xxxxxxxxxx, as applicable, shall have received a
true and complete copy of each document granting the Concession with respect to
each Channel.
8.14 THIRD PARTY CONSENTS
Xxxxxxxxxx shall have caused each other Person who is a shareholder of
Master Communications and General Radio to have executed such documents as shall
be necessary or desirable to cause the transfer of the capital stock of such
entities to the JVC and to have waived any and all preemptive rights or other
rights to acquire shares of the capital stock of such entities. Xxxxxxxxxx shall
have caused each other Person who is a shareholder of Mastercom Trunking to have
executed such documents as shall be necessary or desirable to cause the transfer
of the capital stock of Mastercom Trunking to Master Communications and to have
waived any and all preemptive rights or other rights to acquire shares of the
capital stock of Mastercom Trunking. Motorola shall have caused each other
Person who is a shareholder of Dualcom and Radionet to have executed such
documents as shall be necessary or desirable to cause the transfer of the
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capital stock of such entities to the JVC and to have waived any and all
preemptive rights or other rights to acquire shares of the capital stock of such
entities.
8.15 PLEDGE AGREEMENTS
Each of Motorola, Xxxxxxxxxx and the JVC shall have entered into the
Pledge Agreements in the form of Exhibit 8.15 on or before the Closing Date.
8.16 LEGAL STABILITY AGREEMENTS
Each of Nextel, Motorola and the JVC shall have applied for a Legal
Stability Agreement with Peru in the form of Exhibit 8.16 on or before the
Closing Date.
ARTICLE IX
ADDITIONAL CONDITIONS PRECEDENT TO OBLIGATIONS OF NEXTEL
The obligations of Nextel to perform and observe the covenants,
agreements and conditions hereof to be performed and observed by it on 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 it:
9.1 AFFILIATE TRANSACTIONS
All loans and other transactions between Motorola or Xxxxxxxxxx and
their respective Affiliates, on the one hand, and the JVC or the JVC
Subsidiaries, on the other hand, shall have been terminated on or prior to the
Closing Date, except for the tower site lease, sales agency agreement and
maintenance agreement between the JVC or the JVC Subsidiaries and Grupo
Mastercom S.A., the forms of which are attached hereto as Exhibit 9.1A, Exhibit
9.1B and Exhibit 9.1C, respectively.
9.2 EMPLOYEES, CONSULTANTS, DIRECTORS AND ATTORNEY-IN-FACT OF THE JVC
All employees, consultants, directors and attorneys-in-fact of the JVC
designated by Nextel for resignation or removal shall have resigned or have been
removed from their respective positions.
ARTICLE X
INDEMNIFICATION AND SURVIVAL OF WARRANTIES
10.1 INDEMNIFICATION BY MOTOROLA
Motorola irrevocably and unconditionally agrees to indemnify and hold
harmless, on an after-tax basis, Nextel, Xxxxxxxxxx (except in Xxxxxxxxxx'x case
with respect to clause (a)(ii) below), and their respective successors and
permitted assigns, and the officers, directors, Affiliates, employees,
Controlling Persons and agents of the foregoing, and to hold each such
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party harmless against and in respect of any and all losses, damages, costs and
expenses, including, subject to the provisions of Section 10.6, reasonable
attorneys' fees ("Damages") incurred by any such party directly as a result of
(a) the breach of any of the representations or warranties (i) made in this
Agreement by Motorola or (ii) made in Article III of this Agreement by
Xxxxxxxxxx (subject to Motorola's secondary right to indemnification provided in
Section 10.4 hereto), (b) the breach by Motorola or the JVC of any covenants or
undertaking contained herein or in any other exhibit, schedule or amendment
hereto, or in any officers' certificate or other certificate delivered to the
other parties hereto at or in connection with the Closing (c) the termination or
resignation of any current or former employee of Dualcom or Radionet during the
90 days following the Closing Date or (d) the failure of Radionet or Dualcom to
have properly filed any amendments or modifications to their respective Minimum
Expansion Plans or the failure of Radionet or Dualcom to have properly paid
their respective annual Canons as required by the MTC, which failure directly
results in Damages to any indemnified party; provided that Motorola's liability
under this Section 10.1(d) shall not exceed $16,000,000.
10.2 PRIMARY INDEMNIFICATION BY XXXXXXXXXX
Xxxxxxxxxx irrevocably and unconditionally agrees to indemnify and hold
harmless, on an after-tax basis, Nextel, Motorola (except in Motorola's case
with respect to clause (a)(ii) below), and 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 Damages incurred by any such
party directly as a result of (a) the breach of any of the representations or
warranties (i) made in this Agreement by Xxxxxxxxxx or (ii) made in Article III
of this Agreement by Motorola (subject to Xxxxxxxxxx'x secondary right to
indemnification provided in Section 10.5 hereto), (b) the breach by Xxxxxxxxxx
or the JVC of any covenants or undertaking contained herein or in any other
exhibit, schedule or amendment hereto, or in any officers' certificate or other
certificate delivered to the other parties hereto at or in connection with the
Closing or (c) the termination or resignation of any current or former employee
of General Radio, Master Communications or Mastercom Trunking during the 90 days
following the Closing Date or (d) the failure of General Radio, Master
Communications or Mastercom Trunking to have properly filed or any amendments of
modifications to their respective Minimum Expansion Plans or the failure of
General Radio, Master Communications or Mastercom Trunking to have properly paid
their respective annual Canons as required by the MTC, which failure directly
results in Damages to any indemnified party; provided that Xxxxxxxxxx'x
liability under this Section 10.2(d) shall not exceed $16,000,000.
10.3 INDEMNIFICATION BY NEXTEL
Nextel irrevocably and unconditionally agrees to indemnify and hold
harmless, on an after-tax basis, Motorola, Xxxxxxxxxx, and 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 Damages incurred by
such party directly as a result of (a) the breach of any of the representations
or warranties made in this Agreement by Nextel, or (b) the breach by Nextel of
any covenant or undertaking contained
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herein, in any other exhibit, schedule or amendment hereto, or in any officers'
certificate or other certificates delivered to Motorola at or in connection with
the Closing.
10.4 SECONDARY INDEMNIFICATION BY XXXXXXXXXX OF MOTOROLA
Xxxxxxxxxx irrevocably and unconditionally agrees to indemnify and hold
harmless, on an after-tax basis, Motorola, and its 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 Damages incurred by any such
party directly or indirectly as a result of the breach of any of the
representations or warranties made in this Agreement by Xxxxxxxxxx for which a
claim is made against Motorola pursuant to its indemnification obligations set
forth in Section 10.1 hereof or pursuant to the failure of Xxxxxxxxxx to make
any payment required to be made pursuant to Section 2.3 with respect to General
Radio, Master Communications or Mastercom Trunking. The parties hereto
acknowledge that this secondary indemnification is being granted by Xxxxxxxxxx
as a result of Motorola's agreement to indemnify Nextel for breaches of
representations and warranties made in Article III of this Agreement by
Xxxxxxxxxx. The parties hereto further acknowledge that this secondary
indemnification obligation of Xxxxxxxxxx shall be secured by a pledge of certain
of Xxxxxxxxxx'x shares of the JVC Common Stock, as further described in Section
10.8.
10.5 SECONDARY INDEMNIFICATION BY MOTOROLA OF XXXXXXXXXX
Motorola irrevocably and unconditionally agrees to indemnify and hold
harmless, on an after-tax basis, Xxxxxxxxxx, and his respective heirs and
permitted assigns, and the Affiliates and agents of the foregoing, and to hold
each such party harmless against and in respect of any and all Damages, incurred
by any such party directly or indirectly as a result of the breach of any of the
representations or warranties made in this Agreement by Motorola for which a
claim is made against Xxxxxxxxxx pursuant to its indemnification obligations set
forth in Section 10.2 hereof or pursuant to the failure of Motorola to make any
payment required to be made pursuant to Section 2.3 with respect to Dualcom or
Radionet. The parties hereto acknowledge that this secondary indemnification is
being granted by Motorola as a result of Xxxxxxxxxx'x agreement to indemnify
Nextel for breaches of representations and warranties made in Article III of
this Agreement by Motorola. The parties hereto further acknowledge that this
secondary indemnification obligation of Motorola shall be secured by a pledge of
certain of Motorola's shares of the JVC Common Stock, as further described in
Section 10.8
10.6 PROCEDURE
With respect to the claims made by third parties (which for purposes of
the indemnification pursuant to Sections 10.4 and 10.5 shall include Nextel), if
Nextel, Xxxxxxxxxx or Motorola is threatened with any claim, or any such claim
is presented to or any action or proceeding commenced, that may give rise to the
right of indemnification hereunder, Nextel, Xxxxxxxxxx or Motorola, 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, however,
that the failure to give notice in
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accordance with this Section 10.6 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 and expenses shall by 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 obligation to pay such counsel's fees and expenses and shall no longer
assume the obligation to pay the Indemnitee's attorneys' fees and expenses. 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 (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.
10.7 SURVIVAL
The covenants, agreements, representations and warranties made by the
parties in or pursuant to this Agreement shall survive until the second
anniversary of the Closing, except as otherwise set forth herein. The
representations and warranties made by Motorola and Xxxxxxxxxx in Sections 3.4
and 3.11 shall survive until the expiration of the relevant statute of
limitation under Peruvian law. The agreements contained in this Article X shall
survive until the second anniversary of the Closing (except with respect to the
agreements contained in the preceding sentence which shall survive until the
expiration of the relevant statute of limitation); provided that any claim for
indemnification asserted in accordance with the provisions of this Agreement
prior to the relevant expiration date shall survive until it is resolved.
10.8 SECURITY FOR SECONDARY INDEMNIFICATION RIGHTS
(a) Subject to any pledge to a third-party lender as required by the
Shareholders Agreement, Xxxxxxxxxx shall pledge, as collateral security for the
obligations of Xxxxxxxxxx to indemnify Motorola pursuant to this Agreement, to
Motorola all of his shares of the JVC Common Stock by executing that certain
Pledge Agreement, dated of even date herewith, by and among the JVC, as agent,
Xxxxxxxxxx and Motorola (the "Xxxxxxxxxx Pledge Agreement").
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(b) Subject to any pledge to a third-party lender as required by the
Shareholders Agreement, Motorola shall pledge, as collateral security for the
obligations of Motorola to indemnify Xxxxxxxxxx pursuant to this Agreement, to
Xxxxxxxxxx one half of its shares of the JVC Common Stock by executing that
certain Pledge Agreement, dated of even date herewith, by and among the JVC, as
agent, Xxxxxxxxxx and Motorola (the "Motorola Pledge Agreement" and together
with the Xxxxxxxxxx Pledge Agreement, the "Pledge Agreements").
(c) The Pledge Agreements shall remain in full force and effect until
the second anniversary of the Closing, provided, however, that if any claim for
indemnification is pending at the end of such term the applicable Pledge
Agreement shall remain in full force and effect until such claim is resolved.
(d) Each of Motorola and Xxxxxxxxxx agree to subordinate their
interests under the applicable Pledge Agreement in connection with any third
party debt financing of the JVC.
ARTICLE XI
TERMINATION
11.1 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 duly authorized by Nextel, Xxxxxxxxxx,
Motorola and the JVC; or
(b) by any of Nextel, Xxxxxxxxxx, Motorola or the JVC if the Closing
shall not have occurred by January 29, 1998; provided, however, that the right
to terminate this Agreement under this Section 11.1(b) shall not be available to
any party whose failure to fulfill any obligation under this Agreement has been
the cause of or resulted in the failure of the transactions contemplated hereby
to occur on or before such date; or
(c) by any of Nextel, Xxxxxxxxxx, Motorola or the JVC 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; or
(d) by any party hereto upon a breach of any representation, warranty,
covenant or agreement on the part of any other party hereto set forth in this
Agreement (other than a breach which is also a breach by the party purporting to
terminate this Agreement) such that the conditions set forth in Section 8.1 or
8.2 would not be satisfied and such breach shall not have been remedied within
ten days following receipt of notice of such breach from the party seeking to
terminate this Agreement; or
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(e) by any party hereto if any representation or warranty of any other
party hereto in this Agreement shall have become untrue such that the conditions
set forth in Article VIII or IX, as the case may be, cannot reasonably be
expected to be satisfied by the date set forth in Section 11.1(b).
11.2 EFFECT OF TERMINATION
In the event of any termination pursuant to this Article XI (other than
pursuant to Section 11.1(a) or (b)): (a) written notice setting forth the
reasons therefor shall forthwith be given by the terminating party to the other
parties hereto, and (b) no party shall have any liability to the other parties
of any nature whatsoever due to such termination, except for damages resulting
from a willful breach by any party.
ARTICLE XII
GENERAL
12.1 EXPENSES
Regardless of whether the transactions contemplated by this Agreement
are consummated, each of Nextel, Motorola and Xxxxxxxxxx shall pay its own fees,
costs and expenses, incident to the negotiation, preparation and carrying out of
this Agreement.
12.2 AMENDMENT
The parties hereto 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.
12.3 HEADINGS
The headings preceding the text of Sections of this Agreement are for
convenience only and shall not be deemed parts thereof.
12.4 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.
12.5 PARTIES IN INTEREST
All of 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 any party may at any time, without the consent of the other
parties, assign all or part of its right, title and interest in, to and under
this Agreement and the documents, agreements
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and supporting papers delivered in connection herewith to any Affiliate of such
party that agrees in writing to be bound by the provisions hereof; provided that
the parties hereto shall retain all liabilities under this Agreement unless
otherwise agreed by all of the parties hereto.
12.6 DISPUTE RESOLUTION.
(a) Arbitration. All disputes arising out of or in connection with this
Agreement or the performance hereof shall be resolved by submission to binding
arbitration under the Rules for Arbitration of the International Chamber of
Commerce (the "ICC").
(b) Notice of Demand for Arbitration. Notice of demand for arbitration
shall be filed in writing with the other parties and with the ICC. In no event
shall the demand for arbitration be made after the date when the applicable
statute of limitations would bar institution of a legal or equitable proceeding
based on such claim, dispute or other matter in question.
(c) Arbitration Proceedings. Unless the parties agree otherwise, the
arbitration hearing shall be conducted in Miami, Florida, United States, in the
English language, before a panel of three arbitrators, one selected by each of
the parties to the dispute and the third selected by mutual agreement of the
parties, and failing their agreement, pursuant to the rules of the ICC. The
arbitrators shall not be empowered to grant exemplary or punitive damages. Upon
the request of a party, the arbitrators' written decision shall include an
explanation of the factual and legal grounds for the decision.
(d) Motions to Reconsider. Within fifteen days of receipt of the
arbitrators' decision, a party may file with the arbitrators and serve on the
other parties a written motion to reconsider. The arbitrators may request the
non-moving or responding party to file a written response within ten days after
receipt of that request, and the arbitrators thereupon will reconsider the
issues raised by the motion and response (if any) and either confirm or alter
their decision, which will then be final, binding and conclusive upon the
parties. The costs of such a motion for reconsideration, including attorneys'
fees, will be awarded against the moving party if it does not prevail.
(e) Finality. The decision rendered by the arbitrators shall be final,
and judgment may be entered upon it in accordance with applicable law in any
court having jurisdiction thereof.
(f) Consolidation, Joinder and Third Party Claim. Any arbitration
arising out of or related to this Agreement or any other agreements between the
parties or their Affiliates relating to the wireless telecommunications business
in Peru may, upon demand of a party, include by consolidation, joinder or
third-party claims any other party involved in a common question of law or fact
whose presence is required if complete relief is to be accorded in arbitration
or who is alleged to be liable to a party for all or part of a claim in the
arbitration. Each party agrees that the others may join it as a party to any
litigation or arbitration involving such party's alleged fault.
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12.7 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 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.
12.8 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 Nextel or Nextel International:
Nextel International, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: General Counsel
Fax: (000) 000-0000
with a copy to:
Venture Law Group
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
Fax: (000) 000-0000
File #: 15799-014
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(b) To Motorola:
Motorola International Development Corporation
c/o Motorola, Inc.
0000 X. Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxx Xxxxxxxxx III and XxXxxxx Xxxxxxxxx
Fax: (000) 000-0000
with a copy to:
Motorola, Inc. General Counsel
Fax: (000) 000-0000
(c) To Xxxxxxxxxx:
Xxxxx Xxxxxxxxxx Coz
c/o Mastercom S.A.
Xx. Xxxxxxxx 0000, Xxxxxxxxxx
Xxxx, Xxxx
Fax: 000-00-0-000-0000
(d) To the JVC:
Valorcom S.A.
c/o Nextel International, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: General Counsel
Fax: (000) 000-0000
12.9 ENTIRE UNDERSTANDING
The terms set forth in this Agreement and the other Transaction
Agreements 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.
12.10 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.
[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.
VALORCOM S.A.
By /s/ XXXXXXX XXXXX
--------------------------------
Its GENERAL MANAGER
-------------------------------
NEXTEL INTERNATIONAL (PERU), LLC
By /s/ XXXXX X. XXXXXXX
--------------------------------
Its VICE PRESIDENT
-------------------------------
MOTOROLA INTERNATIONAL
DEVELOPMENT CORPORATION
By /s/ XXXXX X. XXXXXX
--------------------------------
Its ATTORNEY-IN-FACT
-------------------------------
/s/ XXXXX XXXXXXXXXX COZ
----------------------------------
XXXXX XXXXXXXXXX COZ
NEXTEL INTERNATIONAL, INC.
By /s/ XXXXX X. XXXXXXX
--------------------------------
Its VICE PRESIDENT
-------------------------------
[SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT]
49
EXHIBIT 2.1(b)(v)
PAYMENT SCHEDULE
(all figures in thousands)
Party Closing ("C") C + 30 days C+60 days C+90 days C+120 days C+150 days C+170* days
----- ------------- ----------- --------- --------- ---------- ---------- -----------
Nextel $6,965 $2,117 $481 $2,301 $7,579 $4,268 $4,149
*It is estimated that this amount will fund the JVC's operations through 170
days following Closing and it is anticipated that additional capital calls will
be required as of this date (or sooner if the JVC's burn rate exceeds current
estimates).
Nextel shall make such payments to the JVC within fifteen days of the day
indicated above.
