EX-2.B
1996 Share Conversion Agreement
1996 SHARE CONVERSION AGREEMENT
AGREEMENT entered into this 27th day of December, 1996 among (i)
Xxxx Atlantic Latin America Holdings, Inc., a Delaware corporation with its
principal office located at 0000 Xxxxx Xxxxx Xxxxx Xxxx, Xxxxxxxxx, Xxxxxxxx
00000 ("BALAH"), (ii) Ing. Xxxxx Xxxxxxx y Xxxx Xxxxxxxx, a Mexican citizen
whose business address is Xxxxxx Urales Xx. 000, 0xx Xxxxx, Xxx. Xxxxx xx
Xxxxxxxxxxx, Xxxxxx, D.F. 11000 ("Xxxxx Xxxxxxx"), (iii) Ing. Xxxxxx Xxxxxxx
Xxxxxxxx, a Mexican citizen whose business address is Xxxxxx Urales Xx. 000,
0xx Xxxxx, Xxx. Xxxxx xx Xxxxxxxxxxx, Xxxxxx, D.F. 11000 ("Xxxxxx Xxxxxxx"),
(iv) Iusa Grupo Comunicaciones, S.A. de C.V. (formerly known as Grupo
Industrial Iusa, S.A. de C.V.), a Mexican corporation with its principal
office located at Xxxxxx Urales Xx. 000, 0xx Xxxxx, Xxx. Xxxxx xx
Xxxxxxxxxxx, Xxxxxx, D.F. 11000 ("Grupo Iusa"), (v) Xxxxxxxx Investments
Limited, an Isle of Man corporation with its principal office located at St.
Xxxxx Xxxxxxxx, Athol Street, Xxxxxxx, Isle of Man ("Xxxxxxxx"), (vi) FIUSA
Pasteje, S.A. de C.V., a Mexican corporation with its principal office
located at Xxxxxx Urales Xx. 000, 0xx Xxxxx, Xxx. Xxxxx xx Xxxxxxxxxxx,
Xxxxxx, D.F. 11000 ("FIUSA", and, together with Xxxxx Xxxxxxx, Xxxxxx
Xxxxxxx, Grupo Iusa and Xxxxxxxx, the "Xxxxxxx Group"), and (vii) Grupo
Iusacell, S.A. de C.V., a Mexican corporation with its principal office
located at Xxxxxx Urales Xx. 000, 0xx Xxxxx, Xxx. Xxxxx xx Xxxxxxxxxxx,
Xxxxxx, D.F. 11000 ("Grupo Iusacell"). Capitalized terms used herein shall
have the meanings ascribed to them or referenced in Section 1.1 hereof.
W I T N E S S E T H:
WHEREAS, the Xxxxxxx Group owns, beneficially and of record,
428,575,540 Series A Shares, 9,859,110 Series D Shares and 27,834,000 Series
L Shares of Grupo Iusacell (collectively, the "Current Xxxxxxx Group
Shares"); and
WHEREAS, BALAH owns, beneficially and of record, 205,562,450
Series B Shares, 166,769,760 Series D Shares and 38,792,690 Series L Shares
of Grupo Iusacell; and
WHEREAS, under the Current Estatutos and the Original
Shareholders Agreement, the shareholders of Grupo Iusacell have the right to
elect seventeen (17) members of the Board of Directors, with the Xxxxxxx
Group currently having the beneficial ownership of voting Shares of Grupo
Iusacell that empowers it to elect nine (9) Series A Directors and BALAH
having the beneficial ownership of voting Shares of Grupo Iusacell that
empowers it to elect five (5) Series B Directors and two (2) Series D
Directors; and
WHEREAS, subject to the terms and conditions of this Agreement,
BALAH seeks to have, and the Xxxxxxx Group and Grupo Iusacell desire that
BALAH have, the beneficial ownership of a sufficient number of Series A
Shares of Grupo
Iusacell to ensure that BALAH will have the right and power to elect a
majority of the members of the Board of Directors, including, without
limitation, the Series A Directors and Series B Directors, and, subject to
certain supermajority rights to be held by the Xxxxxxx Group, thereby have
management control over Grupo Iusacell; and
WHEREAS, subject to the terms and conditions of this Agreement,
each of the Xxxxxxx Group and Grupo Iusacell agrees to take all action
reasonably necessary to enable BALAH to have the beneficial ownership of a
sufficient number of Series A Shares of Grupo Iusacell to ensure that BALAH
will have the right and power to elect a majority of the members of the Board
of Directors, including, without limitation, the Series A Directors and
Series B Directors and, subject to certain supermajority rights to be held by
the Xxxxxxx Group, thereby have management control over Grupo Iusacell; and
WHEREAS, subject to the terms and conditions of this Agreement,
FIUSA seeks to convert a direct loan to Grupo Iusacell into Series D Shares
and BALAH or an Affiliate of BALAH designated by BALAH seeks to acquire a
direct loan made to Grupo Iusacell by Chase Manhattan Bank, N.A. supported by
such Affiliate's or another Affiliate's contingent purchase obligation and
convert the loan into Series A Shares, and Grupo Iusacell desires that FIUSA
and BALAH or such BALAH Affiliate convert such loans into Series D Shares and
Series A Shares, respectively; and
WHEREAS, subject to the terms and conditions of this Agreement,
BALAH (or one or more Affiliates of BALAH designated by BALAH) and the
Xxxxxxx Group seek to provide pre-Closing short-term financing to Grupo
Iusacell, and BALAH (or one or more Affiliates of BALAH designated by BALAH)
seeks to provide post-Closing medium-term financing to Grupo Iusacell, and
Grupo Iusacell desires to accept and receive such financing.
NOW, THEREFORE, in consideration of the mutual covenants set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
as follows:
Article I: Definitions
1.1 Defined Terms. Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to such terms or referenced
in the New Shareholders Agreement. In addition, when used in this Agreement,
the following terms shall have the meanings set forth for them below:
"ACISA" means Administracion y Control de Industrias, S.A. de
C.V., a Mexican corporation and an Affiliate of the Xxxxxxx Group.
"Agreement" means this 1996 Share Conversion Agreement, as the
same may be amended, modified and supplemented from time to time in
accordance with the terms hereof.
"BAFSI" means Xxxx Atlantic Financial Services, Inc., a Delaware
corporation and an Affiliate of BALAH.
"BALAH/Xxxxxxx Group Trust" means that certain trust dated as of
November 30, 1993 created by agreement by and among Grupo Iusacell, BALAH,
Xxxxx Xxxxxxx, Xxxxxx Xxxxxxx, Grupo Iusa and Banco del Atlantico, S.A.,
institucion de banca multiple, Grupo Financiero GBM - Atlantico, as trustee.
"BALAH/Xxxxxxx Group Trustee" means Banco del Atlantico, S.A.,
institucion de banca multiple, Grupo Financiero GBM - Atlantico, as trustee
of the BALAH/Xxxxxxx Group Trust.
"CNBV" means Mexico's Comision Nacional Bancaria y de Valores.
"Current Estatutos" means the estatutos sociales of Grupo
Iusacell as in effect as of the date of this Agreement.
"Estatutos" means the estatutos sociales of Grupo Iusacell as in
effect from time to time.
"Federal Competition Commission" means Mexico's Comision Federal
de Competencia.
"Foreign Investment Commission" means Mexico's Comision Nacional
de Inversiones Extranjeras.
"New Estatutos" means the estatutos sociales of Grupo Iusacell in
the form of Annex A, as may be amended from time to time.
"New Shareholders Agreement" means that certain shareholders
agreement in the form of Annex B, as may be amended from time to time.
"Original Shareholders Agreement" means that certain shareholders
agreement dated as of November 30, 1993 by and among Grupo Iusacell, BALAH,
Xxxxx Xxxxxxx, Xxxxxx Xxxxxxx and Grupo Iusa.
"Xxxxxxx Group Shares" means the Current Xxxxxxx Group Shares,
the FIUSA Conversion Shares and the Xxxxxxx Group Interim Financing
Conversion Shares.
"SCT" means Mexico's Secretaria de Comunicaciones y Transportes.
"Series A Directors" means those members of the Board of
Directors who, pursuant to the Estatutos or the Shareholders Agreement, are
nominated and elected by the beneficial owners of the Series A Shares;
provided, however, that such term does not include the Series B Directors,
the Series D Directors or the Series L Director.
"Series B Directors" means those members of the Board of
Directors who, pursuant to the Estatutos or the Shareholders Agreement, are
nominated and elected by the beneficial owners of the Series B Shares;
provided, however, that such term does not include the Series A Directors,
the Series D Directors or the Series L Director.
"Series D Directors" means those members of the Board of
Directors who, pursuant to the Estatutos or the Shareholders Agreement, are
nominated and elected by the beneficial owners of Series D Shares; provided,
however, that such term does not include the Series A Directors, the Series B
Directors or the Series L Director.
"Series L Director" means that member of the Board of Directors
who, pursuant to the Estatutos or the Shareholders Agreement, is nominated
and elected by the beneficial owners of Series L Shares; provided, however,
that such term does not include the Series A Directors, the Series B
Directors or the Series D Directors.
"Share Purchase Agreement" means that certain Share Purchase
Agreement dated October 10, 1993 by and among Grupo Iusacell, BALAH, Xxxxx
Xxxxxxx, Xxxxxx Xxxxxxx and Xxxxxxxx.
"Shareholders Agreement" means the Original Shareholders
Agreement or the New Shareholders Agreement, as may be in effect from time to
time.
"Shares" means, as the context may require, the Series A Shares,
Series B Shares, Series D Shares and/or the Series L Shares.
"SOS" means SOS Telecomunicaciones, S.A. de C.V., a Mexican
corporation and a Subsidiary of Grupo Iusacell.
"Subordinated Chase Note" means that certain subordinated
promissory note dated August 29, 1996 issued by Grupo Iusacell to Chase
Manhattan Bank, N.A.
"Subordinated FIUSA Note" means that certain subordinated
promissory note dated August 29, 1996 issued by Grupo Iusacell to FIUSA.
"Three Way Agreements" means the Agreement dated as of April 6,
1995 by and among BAFSI, ACISA and Grupo Iusacell, as amended, and the
Agreement dated as of August 29, 1996 by and among BAFSI, FIUSA and Grupo
Iusacell.
Furthermore, the definitions for the capitalized terms set forth below
are found in the sections of this Agreement identified immediately to the
right of such terms:
Term Section
---- -------
Xxxxx Xxxxxxx Preamble
BALAH Preamble
BEL Interim Financing Conversion Shares 2.1(a)(vi)
Xxxxxx Xxxxxxx Preamble
Chase Conversion Shares 2.1(a)(iii)
Claims 6.2
Closing 2.2
Closing Date 2.2
Convertible Debentures 2.1(d)
Current Xxxxxxx Group Shares First Recital
FIUSA Preamble
FIUSA Conversion Shares 2.1(a)(iv)
Grupo Iusa Preamble
Grupo Iusacell Preamble
Xxxxxxxx Preamble
Xxxxxxx Group Preamble
Xxxxxxx Group Interim Financing Conversion Shares 2.1(a)(v)
Put Closing 3.1
Second Closing 2.2
Second Closing Date 2.2
Section 214 Authorization 2.1(f)
1.2 Construction. As used in this Agreement, (i) each term defined in
this Agreement has the meaning assigned to it, (ii) as the context may
require, words in the singular include the plural and words in the plural
include the singular, (iii) as the context may require, words in the
masculine or neuter gender include the masculine, feminine and neuter
genders, (iv) all references to Annexes refer to Annexes delivered herewith
or attached hereto (each of which is deemed to be a part of this Agreement),
(v) all references to Sections or Articles refer to Sections or Articles of
this Agreement, (vi) all references to "U.S.$", "$" or "dollars" refer to
United States dollars, and (vii) the terms "herein," "hereunder," "hereby,"
"hereto" and terms of similar import refer to this Agreement in its entirety,
and not to any particular Article, Section, paragraph or subparagraph. No
provision of this Agreement will be construed in favor of, or against, any of
the parties hereto by reason of the extent to which such party or its counsel
participated in its drafting or by reason of the extent to which this
Agreement or any provision hereof is inconsistent with any prior draft hereof
or thereof. All references in this Agreement to beneficial ownership of
Shares shall be deemed to include the Shares held in the BALAH/Xxxxxxx Group
Trust or held of record by BALAH (or any of its
Affiliates pursuant to Section 7.7 hereunder) or any member of the Xxxxxxx
Group (or any of its Affiliates pursuant to Section 7.7 hereunder), and, with
respect to all references to other Persons being a beneficial owner, the
parties agree that such term shall be translated as "beneficiario".
Article II: Agreements, Closing and Closing Deliveries
2.1 Agreements. Subject to the terms and conditions of this Agreement,
and in reliance upon the representations, warranties and agreements contained
herein, the parties hereto hereby agree as follows:
(a) Agreement as to Certain Equity and Debt Conversions. The parties hereto
hereby agree to effect the conversions set forth in clauses (i) and (ii)
immediately below on the Closing Date and hereby agree to effect the
conversions set forth in clauses (iii) through (vi) inclusive immediately
below on the Second Closing Date:
(i) BALAH shall convert 200,000,000 Series B Shares and 166,769,760
Series D Shares beneficially owned by BALAH into 366,769,760 Series A Shares;
(ii) The Xxxxxxx Group shall convert 100,000,000 Series A Shares
beneficially owned by the Xxxxxxx Group into 100,000,000 Series D Shares;
(iii) BALAH or an Affiliate of BALAH designated by BALAH shall convert
the sum of the principal amount of the Subordinated Chase Note, the accrued
interest thereon and the credit enhancement fee associated therewith pursuant
to the Three-Way Agreements into such number of newly issued Series A Shares
calculated by dividing such sum by 0.7 (representing a conversion price of
U.S.$0.70 per Series A Share) (collectively, the "Chase Conversion Shares");
(iv) FIUSA or its designee shall convert the sum of the principal
amount of the Subordinated FIUSA Note, the accrued interest thereon and the
credit enhancement fee associated therewith pursuant to the Three-Way
Agreements into such number of newly issued Series A Shares and/or Series D
Shares calculated by dividing such sum by 0.7 (representing a conversion
price of U.S.$0.70 per Series D Share) (collectively, the "FIUSA Conversion
Shares"); provided, however, that no Series A Shares shall be issued in
respect of such conversion unless and until the number of Series D Shares
issued in respect of such conversion would cause the aggregate number of
Series D Shares issued and outstanding to exceed 19.9% of the aggregate
number voting Shares;
(v) The Xxxxxxx Group shall convert the sum of the principal amount of
any pre-Closing financing provided by the Xxxxxxx Group pursuant to the third
paragraph of Section 2.1(d) hereof and the accrued interest thereon into such
number of newly issued Series A Shares and/or Series D Shares calculated by
dividing such sum by 0.7 (representing a conversion price of U.S.$0.70 per
Series
D Share) (collectively, the "Xxxxxxx Group Interim Financing Conversion
Shares"); provided, however, that no Series A Shares shall be issued in
respect of such conversion unless and until the number of Series D Shares
issued in respect of such conversion would cause the aggregate number of
Series D Shares issued and outstanding to exceed 19.9% of the aggregate
number voting Shares;
(vi) BALAH and/or an Affiliate of BALAH designated by BALAH, as the
case may be, shall have the right (if BALAH and/or such Affiliate, as the
case may be, chooses, in its sole discretion, to exercise the conversion
option described in clause (i) of the third paragraph of Section 2.1(d)
hereof), but not the obligation, to convert the sum of the principal amount
of any pre-Closing financing provided by any one or both of them pursuant to
the third paragraph of Section 2.1(d) hereof and the accrued interest thereon
into such number of newly issued Series A Shares calculated by dividing such
sum by 0.7 (representing a conversion price of U.S.$0.70 per Series A Share)
(collectively, the "BEL Interim Financing Conversion Shares");
The parties hereto hereby agree to take any and all action required or
deemed advisable to effect the conversions specified in this Section 2.1(a),
and BALAH and the Xxxxxxx Group hereby agree to cause Grupo Iusacell to take
any and all action required or deemed advisable to effect such conversions.
Without limiting the foregoing, Grupo Iusacell hereby agrees to call the
necessary general ordinary, extraordinary, special or other meetings of the
shareholders (or any class of shareholders) of Grupo Iusacell to approve and
enable such conversions, and BALAH and the Xxxxxxx Group hereby agree that
they shall vote all of their Shares at any such meeting of the shareholders
(or any class of shareholders) of Grupo Iusacell in which they have the right
to vote in favor of the resolutions required to approve and effect such
conversions.
In addition, (m) BALAH hereby agrees to surrender for conversion and
deliver to Grupo Iusacell on the Closing Date one or more certificates
representing 200,000,000 Series B Shares and 166,769,760 Series D Shares
beneficially owned by it and, in consideration therefor, Grupo Iusacell
hereby agrees to deliver to BALAH on the Closing Date one or more
certificates representing 366,769,760 Series A Shares, (n) BALAH hereby
agrees to acquire (or to cause an Affiliate designated by it to acquire) the
Subordinated Chase Note on or prior to the Second Closing Date and surrender
for conversion and deliver the Subordinated Chase Note to Grupo Iusacell on
the Second Closing Date and, in consideration therefor, Grupo Iusacell hereby
agrees to deliver to BALAH or such Affiliate one or more certificates
representing the number of Series A Shares set forth in clause (iii)
immediately hereinabove, (o) the Xxxxxxx Group hereby agrees to surrender for
conversion and deliver to Grupo Iusacell on the Closing Date one or more
certificates representing 100,000,000 Series A Shares beneficially owned by
it and, in consideration therefor, Grupo Iusacell hereby agrees to deliver to
the Xxxxxxx Group on the Closing Date one or more certificates representing
100,000,000 Series D Shares,
(p) the Xxxxxxx Group hereby agrees to surrender for conversion and deliver
the Subordinated FIUSA Note and the promissory notes (pagares) representing
any pre-Closing financing provided by the Xxxxxxx Group pursuant to the third
paragraph of Section 2.1(d) hereof to Grupo Iusacell on the Second Closing
Date and, in consideration therefor, Grupo Iusacell hereby agrees to deliver
to the Xxxxxxx Group one or more certificates representing the number of
Series D Shares and/or Series A Shares set forth in clauses (iv) and (v)
immediately hereinabove and, if BALAH and/or one its Affiliates, as the case
may be, choose, in their sole discretion, to exercise the conversion option
described in clause (i) of the third paragraph of Section 2.1(d) hereof, (q)
BALAH and/or such Affiliate, as the case may be, hereby agree to surrender
for conversion and deliver the promissory notes (pagares) representing any
pre-Closing financing provided by BALAH and/or such Affiliate pursuant to the
third paragraph of Section 2.1(d) hereof to Grupo Iusacell on the Second
Closing Date and, in consideration therefor, Grupo Iusacell hereby agrees to
deliver to BALAH and/or such Affiliate one or more certificates representing
the number of Series A Shares set forth in clause (vi) immediately
hereinabove.
The Xxxxxxx Group hereby expressly waives and agrees to waive any
preemptive or preferential rights it may have with respect to the issuance or
delivery as applicable of Series A Shares in connection with the conversions
contemplated by this Section 2.1(a), and BALAH and Xxxxxxxx each hereby
expressly waives and agrees to waive any preemptive or preferential rights it
may have with respect to the issuance or delivery as applicable of Series D
Shares in connection with the conversions contemplated by this Section
2.1(a), in each case, at any meeting of the shareholders (or any class of
shareholders) of Grupo Iusacell which approves such issuances and/or
conversions. Grupo Iusacell hereby agrees (and BALAH and the Xxxxxxx Group
hereby agree to cause Grupo Iusacell) to publish in the Diario Oficial de la
Federacion of Mexico any notice required to advise the other shareholders of
Grupo Iusacell of any preemptive or preferential right they may have in
connection with any such issuances of Shares promptly after the general
ordinary, extraordinary, special or other meetings of the shareholders (or
any class of shareholders) of Grupo Iusacell which approved any such
issuances of Shares.
Simultaneously with and in consideration for the conversions and
deliveries set forth in Section 2.1(a)(i) and (ii), BALAH hereby agrees to
pay or cause one of its Affiliates to pay the members of the Xxxxxxx Group or
their designees U.S.$50,000,000, which amount shall be reduced by the taxes,
if any, required to be withheld and paid over by BALAH to Mexican tax
authorities (which withheld amounts, if any, BALAH shall pay over to Mexican
tax authorities).
(b) Agreement to Amend and Restate the Current Estatutos. BALAH and the
Xxxxxxx Group hereby agree to amend and restate the Current Estatutos in the
form of the New Estatutos set forth in Annex A, and the parties hereby agree
to take any and all action required or deemed advisable to so amend and
restate the Current Estatutos and adopt the New Estatutos. Without limiting
the foregoing,
Grupo Iusacell hereby agrees to call the necessary general ordinary,
extraordinary, special or other meetings of the shareholders (or any class of
shareholders) of Grupo Iusacell necessary to so amend and restate the Current
Estatutos and adopt the New Estatutos, and BALAH and the Xxxxxxx Group hereby
agree that they shall vote all of their Shares at any such meeting of the
shareholders (or any class of shareholders) of Grupo Iusacell in which they
have the right to vote in favor of amending and restating the Current
Estatutos in the form of the New Estatutos. In addition, Grupo Iusacell
hereby agrees to cause the New Estatutos to be protocolized and registered in
the Registro Publico de Comercio of Grupo Iusacell's corporate domicile and
to make and diligently prosecute any appropriate filings with the CNBV with
respect to the New Estatutos.
Except as may otherwise be required by Mexican Governmental Entities,
Grupo Iusacell hereby agrees to amend and restate, and BALAH and the Xxxxxxx
Group hereby agree to cause Grupo Iusacell to amend and restate, the
estatutos sociales of the Subsidiaries in order to enable BALAH, through
Grupo Iusacell, to exercise voting and management control over such
Subsidiaries. Grupo Iusacell hereby further agrees, and hereby agrees to
cause its Subsidiaries which hold shares of voting capital stock in other
Subsidiaries, to vote all of their respective shares of capital stock in the
Subsidiaries at any general ordinary, extraordinary, special or other meeting
of the shareholders of the Subsidiaries in favor of so amending and restating
such estatutos sociales. Grupo Iusacell hereby agrees to cause the
Subsidiaries to adopt such amended and restated estatutos sociales, to cause
such amended and restated estatutos sociales to be protocolized and
registered in the appropriate Registro Publico de Comercio, to make and
diligently prosecute any appropriate filings with the CNBV, if required, and
to take any other action that may be required or deemed advisable in
connection with the foregoing.
(c) Agreement to Amend and Restate the Original Shareholders Agreement. The
parties hereby agree to amend and restate on the Closing Date, and BALAH and
the Xxxxxxx Group hereby agree to cause Grupo Iusacell to agree to amend and
restate on the Closing Date, the Original Shareholders Agreement in the form
of the New Shareholders Agreement set forth in Annex B. Without limiting the
foregoing, the parties hereby agree to execute and deliver to each other
party, on the Closing Date, the New Shareholders Agreement.
(d) Agreement Regarding Grupo Iusacell Financing. The parties agree that, in
order to meet Grupo Iusacell's capital requirements, Grupo Iusacell shall
issue, from time to time as it shall require, by private placement to BALAH
or one or more BALAH Affiliates designated by BALAH, or by public offering
(including, without limitation, by an offering pursuant to Rule 144A
promulgated under the United States Securities Act of 1933, as amended), as
Grupo Iusacell shall determine from time to time, up to U.S.$150,000,000 of
debentures to be issued by Grupo Iusacell, convertible into Series A Shares,
with the terms set forth in Annex C (the "Convertible Debentures"); provided,
however, that BALAH
or such BALAH Affiliate or Affiliates, as the case may be, shall have the
right, in their sole discretion, to provide such financing by a direct loan
to Grupo Iusacell or by a guarantee of a direct loan to Grupo Iusacell from a
bank or other financial institution, which loans BALAH or such BALAH
Affiliate or Affiliates in their sole discretion may require Grupo Iusacell
to refinance at any time by the sale of Convertible Debentures by private
placement to BALAH or one or more BALAH Affiliates designated by BALAH, or by
public offering (including, without limitation, by an offering pursuant to
Rule 144A promulgated under the United States Securities Act of 1933, as
amended). The Xxxxxxx Group hereby agrees not to (and hereby agrees to cause
its Affiliates and Xxxxxxx Family Members not to) acquire any Convertible
Debentures in any public offering (including, without limitation, by an
offering pursuant to Rule 144A promulgated under the United States Securities
Act of 1933, as amended) or upon resale thereof by an acquirer of Convertible
Debentures. The parties hereby agree that BALAH and its Affiliates shall have
the right, in their sole discretion, to acquire Convertible Debentures in any
public offering therefor (including, without limitation, in any offering
pursuant to Rule 144A promulgated under the United States Securities Act of
1933, as amended).
The parties hereby agree to take any and all action required or deemed
advisable to enable Grupo Iusacell to issue the Convertible Debentures.
Without limiting the foregoing, Grupo Iusacell hereby agrees to call the
necessary general ordinary, extraordinary, special or other meetings of the
shareholders (or any class of shareholders) of Grupo Iusacell necessary to
issue the Convertible Debentures, and BALAH and the Xxxxxxx Group hereby
agree that they shall vote all of their Shares at any such meeting of the
shareholders (or any class of shareholders) of Grupo Iusacell in which they
have the right to vote in favor of issuing the Convertible Debentures. In
addition, the Xxxxxxx Group hereby expressly waives and agrees to waive any
preemptive or preferential rights it may have with respect to the issuance of
additional Series A Shares in connection with the conversion of the
Convertible Debentures at any such meeting of the shareholders (or any class
of shareholders) of Grupo Iusacell which approves the issuance of the
Convertible Debentures.
Prior to the Closing, BALAH (or an Affiliate of BALAH designated by
BALAH) and the Xxxxxxx Group hereby agree to lend Grupo Iusacell, in equal
amounts, as Grupo Iusacell may require from time to time, up to
U.S.$10,000,000 each. Any such loans shall bear interest at an annual rate of
LIBOR + 500 basis points, with interest payable at maturity, shall be
subordinated to the U.S.$65,000,000 Chase Manhattan Bank, N.A. credit
facility of Grupo Iusacell and shall be evidenced by a promissory note
(xxxxxx) in the form of Annex D. The parties hereby agree that the Xxxxxxx
Group, at the Second Closing, shall convert the outstanding principal amount
of and accrued interest on any such funds borrowed by Grupo Iusacell into
Series A Shares and Series D Shares at a conversion price of U.S.$0.70 per
Series A Share or Series D Share as set forth in Section 2.1(a)(v) hereof.
The parties hereby agree that BALAH or its Affiliate which provided any such
pre-Closing
funding to Grupo Iusacell under this third paragraph of Section 2(d), at the
Second Closing, shall have the option either to (i) convert the outstanding
principal amount of and accrued interest on any such funds borrowed by Grupo
Iusacell into Series A Shares at a conversion price of U.S.$0.70 per Series A
Share as set forth in Section 2.1(a)(vi) hereof, or (ii) refinance the
outstanding principal amount of and accrued interest on any such funds in
accordance with the financing which BALAH and its Affiliates shall provide
under the first paragraph of this Section 2.1(d). The Xxxxxxx Group and BALAH
hereby agree to cause Grupo Iusacell to effect any such conversions at the
Second Closing.
The Xxxxxxx Group hereby expressly waives and agrees to waive any
preemptive or preferential rights it may have with respect to the issuance at
the Closing of any BEL Interim Financing Conversion Shares or any Xxxxxxx
Group Interim Financing Conversion Shares at the general ordinary,
extraordinary, special or other meetings of the shareholders (or any class of
shareholders) of Grupo Iusacell which approve the issuance of such BEL
Interim Financing Conversion Shares and Xxxxxxx Interim Financing Conversion
Shares, and BALAH hereby expressly waives and agrees to waive any preemptive
or preferential rights it may have with respect to the issuance of any BEL
Interim Financing Conversions Shares or any Xxxxxxx Group Interim Financing
Conversion Shares at the general ordinary, extraordinary, special or other
meetings of the shareholders (or any class of shareholders) of Grupo Iusacell
which approve the issuance of such BEL Interim Financing Conversion Shares
and Xxxxxxx Group Interim Financing Conversion Shares. Grupo Iusacell hereby
agrees (and BALAH and the Xxxxxxx Group hereby agree to cause Grupo Iusacell)
to publish in the Diario Oficial de la Federacion of Mexico any notice
required to advise the other shareholders of Grupo Iusacell of any preemptive
or preferential right they may have in connection with any such issuances of
Shares promptly after the general ordinary, extraordinary, special or other
meetings of the shareholders (or any class of shareholders) of Grupo Iusacell
which approved any such issuances of Shares.
(e) Agreement to Implement Trusts for the Fixed Wireless, Long Distance and
Satellite Transmission Businesses. Grupo Iusacell shall, prior to the
Closing, establish, and the Xxxxxxx Group and BALAH hereby agree to cause
Grupo Iusacell to establish, one or more trusts for the purpose of holding
and voting 51% of the voting shares of Iusatelecomunicaciones, S.A. de C.V.,
51% of the voting shares of Iusatel, S.A. de C.V., all of the voting shares
in Satelitron, S.A. de C.V. held by Grupo Iusacell, and such other shares of
voting capital stock of other Subsidiaries, provided that Mexican
Governmental Entities so require and, if appropriate, so authorize. The
Xxxxxxx Group and BALAH hereby further agree to negotiate in good faith, and
to cause Grupo Iusacell, to establish and adopt, any additional or substitute
arrangements which may be required by Mexican Governmental Entities in
connection with restrictions on ownership of telecommunications properties by
Persons who are not Mexican. Without limiting the foregoing, the Xxxxxxx
Group and BALAH hereby agree to cause Grupo Iusacell to take any and all
action that
may be required or deemed advisable (to the extent Mexican Governmental
Entities so authorize upon application by Grupo Iusacell) to amend the
estatutos sociales of Iusatelecomunicaciones, S.A. de C.V., Iusatel, S.A. de
C.V. and such other Subsidiaries in which non-Mexicans are prohibited from
owning more than 49% of the voting capital stock in order to establish and
implement a capital structure that provides for a neutral investment of up to
80% of the total capital stock thereof (or such lesser percentage of neutral
investment as Mexican Governmental Entities shall authorize).
(f) Agreement With Respect to Section 214 Authority of Iusatel, S.A. de C.V.
Promptly after the execution of this Agreement, Grupo Iusacell shall cause
Iusatel, S.A. de C.V. to request the pro forma transfer of control of the
authorization of Iusatel, S.A. de C.V., under Section 214 of the
Communications Act of 1934, as amended, and Section 63.18 of the rules and
regulations of the United States Federal Communications Commission
promulgated thereunder, to acquire and operate facilities for the provision
of international services between the United States and international
locations (the "Section 214 Authorization") to Grupo Iusa. Subsequent to the
Closing, Grupo Iusacell (for itself and on behalf of Iusatel, S.A. de C.V.),
Grupo Iusa and/or BALAH (or one or more of its Affiliates), as appropriate,
shall seek the authorization of the United States Federal Communications
Commission for a formal transfer of control of the Section 214 Authorization
back to Iusatel, S.A. de C.V. The parties hereto agree to take any and all
action that may be required or deemed advisable in connection with the
foregoing; provided, however, that if the foregoing may cause Grupo Iusa or
Iusatel, S.A. de C.V. to incur any material costs or damages (other than
attorneys' fees and filing fees in connection therewith), the parties hereby
agree to use their commercially reasonable best efforts to explore substitute
arrangements which may achieve the same objective.
(g) Agreement With Respect to Concession of SOS Telecomunicaciones, S.A. de
C.V. Grupo Iusacell shall, prior to the Closing, file an application with the
SCT to partially assign to Iusatelecomunicaciones, S.A. de C.V. certain
rights held by SOS relating to the provision of radiotelephony service on
board of vehicles and certain radioelectric spectrum in order to permit BALAH
and its Affiliates to be legally able to beneficially own, directly or
indirectly, more than 49% of the voting capital stock in or otherwise control
SOS.
2.2 Closing. The closing of the transactions contemplated by Section
2.1 (a) (i) and (ii) and Section 2.1(c) hereof (the "Closing") shall take
place at the offices of Grupo Iusacell as promptly as practicable but in no
event more than three (3) Business Days following the date on which the
conditions set forth in Section 4.1 hereof shall have been satisfied,
discharged or waived, as the case may be, or at such other place or time as
shall be mutually agreed upon in writing by BALAH and the Xxxxxxx Group. The
date on which the Closing actually occurs shall be referred to herein as the
"Closing Date." All transactions at the Closing
shall be deemed to take place simultaneously, and no transaction shall be
deemed to have been consummated and no agreement, document or instrument
shall be deemed to have been delivered until all transactions are consummated
and all agreements, documents and instruments are delivered. The Closing and
the consummation of the transactions contemplated by this Agreement to close
on the Closing Date shall be deemed effective as of the close of business on
the Closing Date.
The closing of the transactions contemplated by Section 2.1 (a) (iii)
through (vi) inclusive and the second paragraph of Section 2.1(b) hereof (the
"Second Closing") shall take place at the offices of Grupo Iusacell as
promptly as practicable but in no event more than three (3) Business Days
following the date on which the conditions set forth in Section 4.2 hereof
shall have been satisfied, discharged or waived, as the case may be, or at
such other place or time as shall be mutually agreed upon in writing by BALAH
and the Xxxxxxx Group. The date on which the Second Closing actually occurs
shall be referred to herein as the "Second Closing Date." All transactions at
the Second Closing shall be deemed to take place simultaneously, and no
transaction shall be deemed to have been consummated and no agreement,
document or instrument shall be deemed to have been delivered until all
transactions are consummated and all agreements, documents and instruments
are delivered. The Second Closing and the consummation of the transactions
contemplated by this Agreement to close on the Second Closing Date shall be
deemed effective as of the close of business on the Second Closing Date.
2.3 Closing and Second Closing Deliveries. At the Closing, the
following deliveries shall be made:
(a) BALAH shall surrender for conversion and deliver to Grupo Iusacell one or
more certificates representing 200,000,000 Series B Shares and 166,769,760
Series D Shares.
(b) Grupo Iusacell shall issue and deliver to BALAH or one or more of BALAH's
Affiliates, as the case may be, one or more certificates representing
366,769,760 Series A Shares, registered in the name of BALAH and/or such
BALAH Affiliate or Affiliates.
(c) The Xxxxxxx Group shall surrender for conversion and deliver to Grupo
Iusacell one or more certificates representing 100,000,000 Series A Shares.
(d) Grupo Iusacell shall issue and deliver to the Xxxxxxx Group one or more
certificates representing 100,000,000 Series D Shares, registered in the name
or names of the members of the Xxxxxxx Group who delivered the Series A
Shares identified in Section 2.1(a)(ii) hereof, but only to the extent of the
number of Series A Shares delivered by such members of the Xxxxxxx Group.
(e) Provided that the other actions required for the Closing by this Section
2.3 occur, BALAH shall deliver to the members of the Xxxxxxx Group or their
designees U.S.$50,000,000, by wire transfer of immediately available funds to
one or more accounts designated by the Xxxxxxx Group in writing three (3)
Business Days prior to the Closing, which amount shall be reduced by the
taxes, if any, required to be withheld and paid over by BALAH to Mexican tax
authorities (which withheld amounts, if any, BALAH shall pay over to Mexican
tax authorities).
(f) Cross-receipts reflecting the deliveries contemplated by Section
2.3(a)-(d) hereof and a receipt reflecting the delivery contemplated by
Section 2.3(e) hereof shall be delivered to the parties involved in the
transactions requiring such receipts.
(g) Grupo Iusacell shall deliver to each of BALAH and the Xxxxxxx Group (i) a
copy of the New Estatutos in the form of Annex A, certified by the Notary
Public (notario publico) who formalizes same and by the Secretary or
Assistant Secretary of Grupo Iusacell and (ii) a list, organized by company
and certified by the Secretary or Assistant Secretary of Grupo Iusacell,
identifying each individual who holds a power of attorney to act for and on
behalf of Grupo Iusacell and/or a Subsidiary.
(h) A copy of the New Shareholders Agreement executed by Grupo Iusacell,
BALAH, Xxxxx Xxxxxxx, Xxxxxx Xxxxxxx, Grupo Iusa, Xxxxxxxx, FIUSA and any
Affiliate of BALAH which shall hold Shares from and after the Closing Date
shall be delivered to each signatory thereto.
(i) If Mexican Governmental Entities shall have so required and, if
appropriate, authorized, Grupo Iusacell shall deliver to BALAH and the
Xxxxxxx Group a copy of the one or more trusts with respect to
Iusatelecomunicaciones, S.A. de C.V., Iusatel, S.A. de C.V., Satelitron, S.A.
de C.V. and any other Subsidiary as described in Section 2.1(e) hereof,
executed by Grupo Iusacell, as grantor, and by a trustee selected by Grupo
Iusacell with the approval of BALAH and the Xxxxxxx Group prior to the
Closing Date. Grupo Iusacell shall have delivered to such trustee one or more
certificates representing 51% of the voting shares of Iusatelecomunicaciones,
S.A. de C.V., 51% of the voting shares of Iusatel, S.A. de C.V., 100% of the
voting shares of Satelitron, S.A. de C.V. and/or such other number of voting
shares of such Subsidiaries and such voting shares of other Subsidiaries as
Mexican Governmental Entities shall have required to be placed in such
trust(s) or any other trusts.
(j) A copy of the resolution of the Board of Directors of each of Xxxx
Atlantic Corporation, BALAH, any BALAH Affiliate receiving Shares at the
Closing, Grupo Iusacell, Grupo Iusa, FIUSA and Xxxxxxxx approving the
transactions contemplated to be consummated at the Closing, in each case,
certified by the Secretary or Assistant Secretary of such corporation, shall
be delivered to each party hereto (other than the party providing such
certified resolution).
(k) A copy of any and all permits and approvals received from and filings
made with (i) the Foreign Investment Commission, (ii) the Federal Competition
Commission, (iii) the SCT, and (iv) the CNBV, if any, and all other permits
and approvals from any Governmental Entity as may be required for the lawful
consummation of the Closing, shall be delivered to each party hereto.
(l) One or more letters from Xxxxxx Xxxxxxx resigning as Vice Chairman of the
Board of Directors and as an officer or employee of each of the Subsidiaries,
in each case, effective as of the Closing shall be delivered to Grupo
Iusacell and BALAH.
(m) A copy of the "actas" of the meetings of the Grupo Iusacell shareholders
referred to in Section 4.1(d) hereof, certified by the Notary Public (notario
publico) who formalizes same and by the Secretary or Assistant Secretary of
Grupo Iusacell, shall be delivered to BALAH and the Xxxxxxx Group.
(n) A copy of the joint instructions to the BALAH/Xxxxxxx Group Trustee
executed by Grupo Iusacell, BALAH, Xxxxx Xxxxxxx, Xxxxxx Xxxxxxx and Grupo
Iusa directing the Trustee to deliver the Shares required to effect the
conversions set forth in Section 2.1(a)(i) and (ii) hereof. In addition, if
BALAH and such members of the Xxxxxxx Group determine in good faith that the
BALAH/Xxxxxxx Group Trust is no longer required or needs to be modified, such
joint instructions also shall direct the Trustee to terminate the
BALAH/Xxxxxxx Group Trust and distribute any Shares remaining therein to the
beneficial holders thereof or to modify the BALAH/Xxxxxxx Trust in accordance
with the terms thereof.
(o) The certificates required by Section 4.1(d) and (e) hereof shall be
delivered to each party hereto (other than to the party or parties executing
and delivering such waivers).
(p) Grupo Iusacell shall have furnished to BALAH and the Xxxxxxx Group the
opinion of Lic. Xxxxxx Xxxxxxxxx in the form of Annex E; BALAH shall have
furnished to Grupo Iusacell and the Xxxxxxx Group the opinion of Xx Xxxxxx x
Xxxxxxxx xxx Xxxxx, X.X. in the form of Annex F-1 and the opinion of Xxxxx X.
Xxxxxxxxxx in the form of Annex F-2; and the Xxxxxxx Group shall have
furnished to Grupo Iusacell and BALAH the opinion of Xxxxxxx Asesoria
Juridica, S.A. de C.V. in the form of Annex G-1 and the opinion of Isle of
Man counsel, in the form of Annex G-2.
At the Second Closing, the following deliveries shall be made:
(aa) BALAH shall deliver to Grupo Iusacell and/or cause one or more of its
Affiliates to deliver to Grupo Iusacell, as the case may be, (i) the
Subordinated Chase Note for conversion, and (ii) the one or more promissory
notes representing any pre-Closing financing provided pursuant to the third
paragraph of Section
2.1(d) hereof for conversion or refinancing as described in the third
paragraph of Section 2.1(d) hereof.
(bb) Grupo Iusacell shall issue and deliver to BALAH or one or more of
BALAH's Affiliates, as the case may be, one or more certificates representing
the Chase Conversion Shares registered in the name of BALAH and/or such BALAH
Affiliate or Affiliates and, if any of BALAH or one or more of such
Affiliates exercises the conversion option described in clause (i) of the
third paragraph of Section 2.1(d) hereof, the BEL Interim Financing
Conversion Shares registered in the name of BALAH and/or such BALAH Affiliate
or Affiliates; or, if any of BALAH or one or more of such Affiliates
exercises the refinancing option described in clause (ii) of the third
paragraph of Section 2.1(d) hereof, a new promissory note in a principal
amount equal to the sum of the principal amount and accrued interest through
the Second Closing Date of the refinanced promissory notes.
(cc) The Xxxxxxx Group shall surrender for conversion and deliver to Grupo
Iusacell (i) the Subordinated FIUSA Note and (ii) the one or more promissory
notes representing any pre-Closing financing provided by the Xxxxxxx Group
pursuant to the third paragraph of Section 2.1(d) hereof.
(dd) Grupo Iusacell shall issue and deliver to the Xxxxxxx Group (i) one or
more certificates representing the FIUSA Conversion Shares registered in the
name of FIUSA and (ii) the Xxxxxxx Group Interim Financing Conversion Shares
registered in the name or names of the members of the Xxxxxxx Group who shall
have provided pre-Closing financing pursuant to the third paragraph of
Section 2.1(d) hereof, pro rata in accordance with the provision of such
financing.
(ee) Cross-receipts reflecting the deliveries contemplated by Section
2.3(aa)-(dd) hereof shall be delivered to the parties involved in the
transactions requiring such receipts.
(ff) Grupo Iusacell shall deliver to each of BALAH and the Xxxxxxx Group a
copy of the amended and restated estatutos sociales of each of the
Subsidiaries as described in the last paragraph of Section 2.1(b) hereof,
certified by the Notary Public (notario publico) who formalizes same and by
the Secretary or Assistant Secretary of the relevant Subsidiary, to the
extent that Grupo Iusacell shall have been able to comply with the obligation
to so amend and restate their estatutos sociales (provided that the failure
to deliver one or more of such amended and restated estatutos sociales at the
Second Closing shall not constitute a waiver of the parties' respective
obligations under the last paragraph of Section 2.1(b) hereof).
(gg) The certificates required by Section 4.2(c) and (d) hereof shall be
delivered to each party hereto (other than to the party or parties executing
and delivering such waivers).
(hh) Grupo Iusacell shall have furnished to BALAH and the Xxxxxxx Group the
opinion of Lic. Xxxxxx Xxxxxxxxx in the form of Annex EE; BALAH shall have
furnished to Grupo Iusacell and the Xxxxxxx Group the opinion of Xx Xxxxxx x
Xxxxxxxx xxx Xxxxx, X.X. in the form of Annex FF-1 and the opinion of Xxxxx
X. Xxxxxxxxxx in the form of Annex FF-2; and the Xxxxxxx Group shall have
furnished to Grupo Iusacell and BALAH the opinion of Xxxxxxx Asesoria
Juridica, S.A. de C.V. in the form of Annex GG-1 and, if Xxxxxxxx
participates in any of the transactions consummated at the Second Closing,
the opinion of Isle of Man counsel, in the form of Annex GG-2.
(ii) A copy of the resolution of the Board of Directors of each of Xxxx
Atlantic Corporation, BALAH, any BALAH Affiliate receiving Shares at the
Second Closing, Grupo Iusacell, Grupo Iusa, FIUSA and Xxxxxxxx approving the
transactions contemplated to be consummated at the Second Closing, in each
case, certified by the Secretary or Assistant Secretary of such corporation,
shall be delivered to each party hereto (other than the party providing such
certified resolution).
Article III: Other Agreements
3.1 Xxxxxxx Group Puts. The Xxxxxxx Group shall have the right to
require BALAH (or an Affiliate of BALAH designated by BALAH in writing to the
Xxxxxxx Group) to purchase the Xxxxxxx Group Shares on the following terms
and conditions:
(a) The Xxxxxxx Group shall have the right, by written notice to BALAH or
such BALAH designee given between November 15, 1997 and December 15, 1997, to
require BALAH or such BALAH designee to purchase up to that number of Shares
which constitutes one-third of the total number of Xxxxxxx Group Shares
(provided that such Shares are Series A Shares that constitute a part of the
Current Xxxxxxx Group Shares and/or Series A Shares and Series D Shares that
constitute a part of the FIUSA Conversion Shares or the Xxxxxxx Group Interim
Financing Conversion Shares). The purchase price for such Shares shall be
U.S.$0.85 per Share. The closing of such purchase obligation shall occur on
December 31, 1997 or the first Business Day thereafter at the offices of
BALAH or such BALAH designee in Arlington, Virginia, or on such other date
and at such other time as the parties may otherwise agree.
(b) The Xxxxxxx Group shall have the right, by written notice to BALAH or
such BALAH designee given between November 15, 1998 and December 15, 1998, to
require BALAH or such BALAH designee to purchase up to that number of Shares
which constitutes one-third of the total number of Xxxxxxx Group Shares
(provided that such Shares are Series A Shares that constitute a part of the
Current Xxxxxxx Group Shares and/or Series A Shares and Series D Shares that
constitute a part of the FIUSA Conversion Shares or the Xxxxxxx Group Interim
Financing Conversion
Shares). The purchase price for such Shares shall be U.S.$0.96 per Share. The
closing of such purchase obligation shall occur on December 31, 1998 or the
first Business Day thereafter at the offices of BALAH or such BALAH designee
in Arlington, Virginia or on such other date and at such other time as the
parties may otherwise agree.
(c) The Xxxxxxx Group shall have the right, by written notice to BALAH or
such BALAH designee given between November 15, 1999 and December 15, 1999, to
require BALAH or such BALAH designee to purchase up to that number of Shares
which constitutes one-third of the total number of Xxxxxxx Group Shares;
provided that BALAH or such BALAH designee shall have the right to require
that the Xxxxxxx Group deliver any remaining Series A Shares that constitute
a part of the Xxxxxxx Group Shares owned by them for purchase prior to
accepting any Series D Shares or Series L Shares for purchase. The purchase
price for such Shares shall be U.S.$1.07 per Share. The closing of such
purchase obligation shall occur on December 31, 1999 or the first Business
Day thereafter at the offices of BALAH or such BALAH designee in Arlington,
Virginia or on such other date and at such other time as the parties may
otherwise agree.
At the closing of any purchase obligation under this Section 3.1 (a
"Put Closing"), BALAH or its designee shall deliver to the Xxxxxxx Group the
total purchase price for the Shares it is required to purchase at such Put
Closing by wire transfer of immediately available funds to one or more
accounts designated by the Xxxxxxx Group in writing to BALAH or such BALAH
designee three (3) Business Days prior to such Put Closing, which amount
shall be reduced by any taxes required to be withheld and paid over by BALAH
or such BALAH designee to Mexican tax authorities (which withheld amounts
BALAH or such BALAH designee shall pay over to Mexican tax authorities).
In the event a Put Closing cannot take place on or before the date
required under this Agreement (or can only take place for a part of the
Shares BALAH or its designee is required to purchase hereunder), then (i)
BALAH or its designee hereby agrees to pay interest on the unpaid portion of
the total purchase price for the Shares it was required to purchase at such
Put Closing, from such date until such time as such total purchase price is
paid in full, at a rate per annum equal to 15%, payable quarterly in arrears
on March 31, June 30, September 30 and December 31 of each applicable period,
(ii) BALAH or its designee and the Xxxxxxx Group hereby agree to negotiate in
good faith any additional or substitute arrangements to enable BALAH or its
designee to consummate all of the transactions required to be consummated at
such Put Closing, and (iii) so long as the Xxxxxxx Group shall be paid the
total purchase price for the Shares BALAH or its designee was required to
purchase at such Put Closing, the Xxxxxxx Group shall be required to
implement any additional or substitute arrangements proposed by BALAH or its
designee (including, without limitation, the placement of the Shares in a
trust, the conversion of voting Shares into neutral Series L Shares (or other
series of neutral
capital stock) or the sale of the Shares to other Mexican Persons) which may
be required or otherwise permitted by Mexican Governmental Entities.
The rights of the Xxxxxxx Group under this Section 3.1 shall not be
assignable to any Person who is not a member of the Xxxxxxx Group, except as
set forth in Section 7.7 hereof. Upon the transfer of any Xxxxxxx Group
Shares held by the Xxxxxxx Group as of the date hereof to any Person who is
not a member of the Xxxxxxx Group (except as set forth in Section 7.7
hereof), the rights under this Section 3.1 with respect to such transferred
Xxxxxxx Group Shares shall be terminated automatically. In the event members
of the Xxxxxxx Group give notice with respect to a number of Shares in any
notice period which exceeds the total number of Shares BALAH or such BALAH
designee is required to purchase with respect to that period, then BALAH or
such BALAH designee shall purchase from each member of the Xxxxxxx Group a
portion of the Shares for which notice has been given, determined by the
ratio of the number of Shares owned by such member to the total number of
Shares owned by the members giving notice, in each case, as shown on the
stock transfer books of Grupo Iusacell, provided that the total number of
Shares purchased from members of the Xxxxxxx Group shall not exceed the total
number of Shares BALAH or such BALAH designee is required to purchase with
respect to that period.
In the event Grupo Iusacell shall (i) subdivide its outstanding Series
A Shares, Series D Shares and/or Series L Shares, or (ii) combine its
outstanding Series A Shares, Series D Shares and/or Series L Shares, then the
maximum number of Xxxxxxx Group Shares which BALAH or its designee may be
required to acquire on a given date shall be adjusted proportionately and the
purchase price(s) for the Xxxxxxx Group Shares payable by BALAH or its
designee as set forth in this Section 3.1 shall be adjusted proportionately
such that the product of the maximum number of Xxxxxxx Group Shares which
BALAH or its designee may be required to acquire on a given date and the
purchase price therefor specified in this Section 3.1 shall neither increase
nor decrease from such product as of the date hereof.
3.2 Termination of Certain Agreements. The parties hereto hereby agree
that the following agreements shall terminate on the following dates:
(a) on the Closing Date, the Side Letter dated November 30, 1993 by and among
Grupo Iusacell, BALAH, Xxxxx Xxxxxxx, Xxxxxx Xxxxxxx and Grupo Iusa with
respect to common objectives;
(b) on the Closing Date, the agreements dated January 1, 1995 between
Servicios Corporativos Iusa, S.A. de C.V. and Servicios Corporativos
Iusacell, S.A. de C.V. with respect to secretarial and security services;
(c) on the later of the Closing Date or the close of business on December 31,
1996, any arrangement (whether by contract, resolution of the Board of
Directors or otherwise) between Grupo Iusacell and/or one or more of the
Subsidiaries, on the one hand, and Xxxxxx Xxxxxxx, on the other hand, with
respect to compensation for services rendered by Xxxxxx Xxxxxxx and the
reimbursement of expenses incurred in connection with such services, in each
case, associated with his position as Vice Chairman of Grupo Iusacell and as
an officer or employee of Grupo Iusacell or of any Subsidiary, including,
without limitation, as an officer or employee of Servicios Corporativos
Iusacell, S.A. de C.V.; and
(d) on the later of the Closing Date or the close of business on December 31,
1996, the Agreement for Technical Assistance and Consulting Services dated
November 30, 1994 between Xxxx Atlantic Enterprises International, Inc. and
Grupo Iusacell.
With respect to clauses (c) and (d) immediately above, Xxxxxx Xxxxxxx shall
receive the aforementioned compensation and reimbursement for services
rendered and expenses incurred on or prior to the later of the Closing Date
or the close of business on December 31, 1996, and Xxxx Atlantic Enterprises
International, Inc. (or one of its Affiliates) shall receive all required
payments for all periods through and including the later of the Closing Date
or the close of business on December 31, 1996. In the event the Closing Date
is in calendar year 1997, Xxxxxx Xxxxxxx and Xxxx Atlantic Enterprises
International, Inc. or one of its Affiliates, as the case may be, shall
receive only that portion of any annualized compensation or reimbursements
identified in clauses (c) and (d) immediately above determined by multiplying
such annualized compensation or reimbursements by a fraction, the nominator
of which is the total number of days after December 31, 1996 through and
including the Closing Date and the denominator of which is 365.
In addition, if BALAH and the Xxxxxxx Group determine in good faith
that the BALAH/Xxxxxxx Group Trust is no longer required, the BALAH/Xxxxxxx
Group Trust shall be terminated.
To the extent that Grupo Iusacell or any of its Subsidiaries is a party
to any of the arrangements and agreements identified in this Section 3.2,
then BALAH and the Xxxxxxx Group hereby agree to cause Grupo Iusacell or such
Subsidiaries to terminate such arrangements and agreements.
3.3 Further Assurances. At any time and from time to time after the
date hereof, each of the parties shall, without further consideration,
execute and deliver such documents, take or cause to be taken such actions,
do or cause to be done such things, and exercise or cause to be exercised all
voting rights conferred upon him or it or any of his or its Affiliates by any
Shares, whether currently beneficially owned by them or acquired subsequent
to the execution of this Agreement, as may be necessary or advisable or as
may be reasonably requested by any other party hereto to ensure that the
provisions, intent and spirit of this Agreement shall
be complied with and carried into full effect.
3.4 Press Releases. None of the parties shall issue any press
release in connection with the execution of this Agreement or any performance
hereunder unless such press release or letter shall have been approved for
issuance by all of the parties hereto in writing; provided, however, that the
parties may make one or more public announcements relating to this Agreement
to the extent required by law, regulation or stock exchange rule.
ARTICLE IV: Conditions to Closing and Second Closing; Termination
4.1 Conditions to the Closing. Grupo Iusacell, BALAH, Xxxxx Xxxxxxx,
Xxxxxx Xxxxxxx, Grupo Iusa, FIUSA and Xxxxxxxx shall enter into and complete
the Closing upon the satisfaction, discharge or waiver, on or prior to the
Closing Date, of the following conditions:
(a) Governmental Approvals. Any and all permits and approvals from and
filings made with any Mexican Governmental Entity required for the lawful
consummation of the Closing and the performance of all of the transactions
contemplated hereby shall have been obtained or made, including, without
limitation, permits or approvals as may be required from the Foreign
Investment Commission, the Federal Competition Commission, the SCT and the
CNBV. In addition, the pro forma transfer of control of the Section 214
Authorization from Iusatel, S.A. de C.V. to Grupo Iusa referred to in Section
2.1(f) hereof shall have been consummated.
(b) Third Person Consents. All material consents, permits and approvals from
parties to any contracts or other agreements with Grupo Iusacell or any of
the Subsidiaries which may be required in connection with the performance by
BALAH and the Xxxxxxx Group of their respective obligations under Section
2.1(a)(i) and (ii) and Section 2.1(d) hereof shall have been obtained.
(c) Grupo Iusacell Shareholders Meetings. General ordinary, extraordinary,
special or other meetings of the Grupo Iusacell shareholders (or any class of
Grupo Iusacell shareholders), as appropriate, shall have (i) approved the New
Estatutos of Grupo Iusacell in the form of Annex A; (ii) approved the
conversions set forth in Section 2.1(a)(i) and (ii); (iii) approved the
increase in the number of authorized Series A Shares and Series D Shares in
order to permit the conversions described in Section 2.1(a) (iii) through
(vi) inclusive and Section 2.1(d) hereof; (iv) elected a new Board of
Directors reflecting the change in management control contemplated herein and
in the New Shareholders Agreement as set forth in Annex H; and (v) approved
the issuance by Grupo Iusacell of the Convertible Debentures.
(d) Pre-Closing Performance. Each of the covenants, agreements and
undertakings of the parties to be performed or complied with on or before the
Closing pursuant hereto will have been duly performed or complied with in all
material respects (unless waived by the party or parties to whom the
performance was due), and each party shall have certified the same to the
other parties in writing through a certificate signed by a duly authorized
officer of such party dated as of the Closing Date.
(e) Accuracy of Representations. All representations and warranties made by a
party in this Agreement shall have been true and correct in all material
respects when made and shall be true and correct in all material respects on
and as of the Closing Date, with the same force and effect as though such
representations and warranties had been made on, as of or with reference to
such date (unless waived by the party or parties to whom the representation
and warranty was made), and each party shall have certified the same to the
other parties in writing through a certificate signed by a duly authorized
officer of such party dated as of the Closing Date.
provided, however, that (i) no action, suit, proceeding, investigation or
arbitration shall have been instituted before any Governmental Entity or
instituted or threatened by any Governmental Entity or other Person to delay,
restrain, prevent or otherwise challenge the carrying out of the transactions
contemplated by the Closing or to seek damages in connection with such
transactions, and (ii) no judgment or injunction shall be in effect delaying,
restraining or preventing the carrying out of the transactions contemplated
by the Closing.
4.2 Conditions to the Second Closing. Grupo Iusacell, BALAH, Xxxxx
Xxxxxxx, Xxxxxx Xxxxxxx, Grupo Iusa, FIUSA and Xxxxxxxx shall enter into and
complete the Second Closing upon the satisfaction, discharge or waiver, on or
prior to the Second Closing Date, of the following conditions:
(a) Closing. The Closing shall have been completed or shall be held
simultaneously with the Second Closing.
(b) Third Person Consents. All material consents, permits and approvals from
parties to any contracts or other agreements with Grupo Iusacell or any of
the Subsidiaries which may be required in connection with the performance by
BALAH and the Xxxxxxx Group of its obligations under Section 2.1(a) (iii)
through (vi) inclusive and Section 2.1 (d) hereof shall have been obtained.
(c) Pre-Closing Performance. Each of the covenants, agreements and
undertakings of the parties to be performed or complied with on or before the
Second Closing pursuant hereto will have been duly performed or complied with
in all material respects (unless waived by the party or parties to whom the
performance was due); and each party shall have certified the same to the
other parties in writing through a certificate signed by a duly authorized
officer of such party dated as of the Second Closing Date.
(d) Accuracy of Representations. All representations and warranties made by a
party in this Agreement shall have been true and correct in all material
respects when made and shall be true and correct in all material respects on
and as of the Second Closing Date, with the same force and effect as though
such representations and warranties had been made on, as of or with reference
to such date (unless waived by the party or parties to whom the
representation and warranty was made); and each party shall have certified
the same to the other parties in writing through a certificate signed by a
duly authorized officer of such party dated as of the Second Closing Date.
(e) Expiration of Preemptive Right Period. The period for the exercise by the
shareholders of Grupo Iusacell of any preemptive or preferential right they
may have to subscribe to the issuance of additional Series D Shares and
Series L Shares (other than BALAH and the Xxxxxxx Group, which shall have
waived any such right) in connection with the transactions contemplated by
Section 2.1(a) and (d) shall have expired.
4.3 Termination. This Agreement and the transactions contemplated
hereby may be terminated or abandoned at any time at or prior to the Closing
as follows: (a) by mutual written agreement of BALAH and the Xxxxxxx Group;
(b) by BALAH or the Xxxxxxx Group if the transactions contemplated hereby
will violate any non-appealable final order, decree or judgment of any
Governmental Entity having competent jurisdiction that is binding upon any
party; or (c) automatically, with no further action by any of the parties, if
the Closing shall not have occurred on or before February 28, 1997. In the
event this Agreement is terminated as provided in this Section 4.2, no party
(or any of its officers, directors, employees, agents, representatives or
shareholders) will be liable to the other parties for any costs, expenses,
damages or loss of anticipated profits hereunder; provided, however, that if
such termination results from the willful failure by a party to fulfill a
condition to the performance by any other party, a willful misrepresentation
of a party or willful failure by a party to perform a covenant of this
Agreement or from a willful breach by a party of any term of this Agreement,
the breaching party shall be fully liable for any and all damages, costs and
expenses (including, but not limited to, reasonable attorneys' fees and
expenses) sustained or incurred by any other party.
If the Closing occurs, this Agreement shall at all times thereafter
remain in full force and effect unless all of the parties hereto agree
otherwise in writing. If this Agreement and the transactions contemplated
hereby are terminated or abandoned pursuant to this Section 4.3, the parties
hereby agree to take any and all action necessary or deemed advisable to
rescind the resolutions approved at the meetings of the shareholders of Grupo
Iusacell (and at each of the meetings of the classes of shareholders of Grupo
Iusacell) on December 18, 1996 and otherwise ensure that such resolutions
shall be void and have no force and effect (except for those resolutions
adopted by the shareholders to implement the Plan de Compra de
Acciones Para Empleados Ejecutivos de la Sociedad).
ARTICLE V: Representations and Warranties
5.1 Representations and Warranties of Grupo Iusacell and its
Subsidiaries. Grupo Iusacell hereby represents to BALAH and the Xxxxxxx Group
as follows:
(a) Grupo Iusacell and each Mexican Subsidiary is a sociedad anonima de
capital variable duly organized and validly existing under the laws of the
jurisdiction of its incorporation or organization, with full corporate power
and authority to own, operate, and lease its properties, and to carry on its
business as presently conducted. Grupo Iusacell has full corporate power and
authority to enter into, execute and deliver this Agreement, carry out the
transactions contemplated hereby on its part and perform its obligations
hereunder.
(b) Neither the execution and delivery of this Agreement or the New
Shareholders Agreement by Grupo Iusacell nor the carrying out by Grupo
Iusacell of the transactions contemplated hereby or thereby will (i)
contravene or violate any statute, law, rule, regulation, order, writ,
injunction or decree of any Governmental Entity (assuming the requisite
filings with and approvals from Governmental Entities have been made or
obtained), (ii) violate, conflict with or constitute a default (or an event
which, with notice or lapse of time, or both, would constitute a default)
under or with respect to, or result in the termination of, the Estatutos or
the estatutos sociales of any Subsidiary or any material telecommunications
concession, permit, license, approval or authorization (assuming the
requisite filings with and approvals from Governmental Entities have been
made or obtained), or (iii) violate or conflict with or constitute a default
(or an event which, with notice or lapse of time, or both, would constitute a
default) under or with respect to, or result in the termination of, or
accelerate the performance required by, or result in the creation of any Lien
upon any of the assets of Grupo Iusacell or any Subsidiary under, any term or
provision of any contract, commitment, license or enforceable understanding
or any restriction of any kind or character to which Grupo Iusacell or any
Subsidiary is a party or by which any of such entities or any of their
respective assets or properties may be bound or affected. All corporate
action required to be taken by Grupo Iusacell to authorize the execution,
delivery and performance of this Agreement and the New Shareholders Agreement
by Grupo Iusacell has been duly and validly taken on or prior to the date
thereof. This Agreement has been duly executed and delivered by Grupo
Iusacell and, assuming the execution and delivery of this Agreement by the
other parties hereto, this Agreement constitutes the valid and binding
obligations of Grupo Iusacell, enforceable against Grupo Iusacell in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency or similar laws affecting the rights and remedies of
creditors generally and the availability of equitable remedies.
(c) The authorized capital stock of Grupo Iusacell consists of 428,575,540
Series A Shares, 205,562,450 Series B Shares, 204,920,220 Series D Shares and
142,566,220 Series L Shares, all of which are issued and outstanding. No
other shares of capital stock have been issued and are outstanding. There are
no options, warrants, convertible securities or other rights to purchase or
acquire any shares of any class of capital stock of Grupo Iusacell nor any
securities convertible into such shares, and there are no contracts,
commitments, licenses or enforceable understandings pursuant to which Grupo
Iusacell may be required to issue any additional shares of capital stock or
any such options, warrants, convertible securities, rights or securities
(other than as contemplated by this Agreement and by the resolutions adopted
by the shareholders of Grupo Iusacell at the meetings held on December 18,
1996). When issued and delivered to BALAH, a BALAH Affiliate or the Xxxxxxx
Group, each of the Shares to be issued pursuant to Section 2.1(a) and (d)
hereof will be duly authorized and validly issued and fully paid and
nonassessable.
5.2 Representations and Warranties of the Xxxxxxx Group. Xxxxx Xxxxxxx,
Xxxxxx Xxxxxxx, Grupo Iusa, FIUSA and Xxxxxxxx hereby jointly and severally
represent and warrant to Grupo Iusacell and BALAH as follows:
(a) Each of Grupo Iusa and FIUSA is a sociedad anonima de capital variable
and Xxxxxxxx is a corporation, in each case, duly organized and validly
existing under the laws of the jurisdiction of its incorporation or
organization, with full corporate power and authority to own, operate, and
lease its properties, and to carry on its business as presently conducted.
Grupo Iusa, FIUSA and Xxxxxxxx each has full corporate power and authority to
enter into, execute and deliver this Agreement, carry out the transactions
contemplated hereby on its part and perform its obligations hereunder.
(b) Neither the execution and delivery of this Agreement or the New
Shareholders Agreement by any member of the Xxxxxxx Group nor the carrying
out by any member of the Xxxxxxx Group of the transactions contemplated
hereby or thereby will (i) contravene or violate any statute, law, rule,
regulation, order, writ, injunction or decree of any Governmental Entity
(assuming the requisite filings with and approvals from Governmental Entities
have been made or obtained), (ii) violate, conflict with or constitute a
default (or an event which, with notice or lapse of time, or both, would
constitute a default) under or with respect to the organizational or
corporate documents of Grupo Iusa, FIUSA and Xxxxxxxx, or (iii) violate or
conflict with or constitute a default (or an event which, with notice or
lapse of time, or both, would constitute a default) under or with respect to,
or result in the termination of, or accelerate the performance required by,
any term or provision of any contract, commitment, license or enforceable
understanding or any restriction of any kind or character to which any member
of the Xxxxxxx Group is a party or by which any of them or any of their
respective assets or properties may be bound or affected. All corporate
action required to be taken by Grupo
Iusa, FIUSA and Xxxxxxxx to authorize the execution, delivery and performance
of this Agreement and the New Shareholders Agreement by them has been duly
and validly taken on or prior to the date thereof. This Agreement has been
duly executed and delivered by each member of the Xxxxxxx Group and, assuming
the execution and delivery of this Agreement by the other parties hereto,
this Agreement constitutes the valid and binding obligations of each member
of the Xxxxxxx Group, enforceable against each member of the Xxxxxxx Group in
accordance with its respective terms, except as enforceability may be limited
by bankruptcy, insolvency or similar laws affecting the rights and remedies
of creditors generally and the availability of equitable remedies.
(c) Each member of the Xxxxxxx Group has good, valid and marketable title to
the Shares of which it is the beneficial owner that will be delivered to
Grupo Iusacell pursuant to Section 2.1(a) hereof, free and clear of any Lien
other than the Lien created by this Agreement and any preemptive rights
provided in the Estatutos or by law.
(d) No broker, finder, agent or similar intermediary has acted for or on
behalf of any member of the Xxxxxxx Group in connection with this Agreement
or the transactions contemplated hereby; and no broker, finder, agent or
similar intermediary is entitled to any broker's, finder's or similar fee or
other commission in connection herewith or therewith based on any agreement,
arrangement or understanding with any member of the Xxxxxxx Group or any
action taken by any member of the Xxxxxxx Group, and the Xxxxxxx Group shall
be solely responsible for any such fee.
5.3 Representations and Warranties of BALAH. BALAH hereby represents
and warrants to Grupo Iusacell and the Xxxxxxx Group as follows:
(a) BALAH is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, with full corporate power
and authority to own, operate, and lease its properties, and to carry on its
business as presently conducted. BALAH has full corporate power and authority
to enter into, execute and deliver this Agreement, carry out the transactions
contemplated hereby on its part and perform its obligations hereunder.
(b) Neither the execution and delivery of this Agreement or the New
Shareholders Agreement by BALAH nor the carrying out by BALAH of the
transactions contemplated hereby or thereby will (i) contravene or violate
any statute, law, rule, regulation, order, writ, injunction or decree of any
Governmental Entity (assuming the requisite filings with and approvals from
Governmental Entities have been made or obtained), (ii) violate, conflict
with or constitute a default (or an event which,
with notice or lapse of time, or both, would constitute a default) under or
with respect to the certificate of incorporation or bylaws of BALAH, or (iii)
violate or conflict with or constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under or with
respect to, or result in the termination of, or accelerate the performance
required by, any term or provision of any contract, commitment, license or
enforceable understanding or any restriction of any kind or character to
which BALAH is a party or by which it or its assets or properties may be
bound or affected. All corporate action required to be taken by BALAH to
authorize the execution, delivery and performance of this Agreement and the
New Shareholders Agreement by it has been duly and validly taken on or prior
to the date thereof. This Agreement has been duly executed and delivered by
BALAH, and, assuming the execution and delivery of this Agreement by the
other parties hereto, this Agreement constitutes the valid and binding
obligations of BALAH, enforceable against BALAH in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency or similar
laws affecting the rights and remedies of creditors generally and the
availability of equitable remedies.
(c) BALAH has good, valid and marketable title to the Shares of which it is
the beneficial owner that will be delivered to Grupo Iusacell pursuant to
Section 2.1(a) hereof, free and clear of any Lien other than the Lien created
by this Agreement and any preemptive rights provided in the Estatutos or by
law.
(d) No broker, finder, agent or similar intermediary has acted for or on
behalf of BALAH in connection with this Agreement or the transactions
contemplated hereby and no broker, finder, agent or similar intermediary is
entitled to any broker's, finder's or similar fee or other commission in
connection herewith or therewith based on any agreement, arrangement or
understanding with BALAH or any action taken by BALAH; and BALAH shall be
solely responsible for any such fee.
Article VI: Survival; Indemnification
6.1 Survival; Remedy for Breach. For purposes of this Article VI, the
representations and warranties of the parties contained herein shall survive
the Closing and any investigation made by any party hereunder until January
1, 2000; provided, however, that the representations and warranties in
Sections 5.1(c), 5.2(c) and 5.3(c) shall survive until ten (10) years after
the Closing Date; and provided further, however, that if a claim is made in
connection with any representation or warranty prior to the termination of
its period of survival, the termination of such survival period shall be
tolled until the final resolution of such claim.
6.2 Indemnification by Grupo Iusacell. To the full extent permitted by
applicable law and subject to Section 6.1 hereof, Grupo Iusacell hereby
agrees to irrevocably indemnify, defend and hold harmless BALAH, each member
of the Xxxxxxx Group and their respective Affiliates (other than Grupo
Iusacell or any Subsidiary), and their respective directors, officers,
stockholders, partners, employees, agents, consultants, representatives,
successors, transferees and
assigns from, against and in respect of all demands, claims, actions or
causes of action, assessments, losses, damages, liabilities, costs and
expenses, and judgments (including, without limitation, interest, penalties
and reasonable attorneys' fees and expenses incurred in connection
therewith), of every type and nature whatsoever (collectively, "Claims")
which arise or result from or relate to the following: (a) the breach of any
representation or warranty of Grupo Iusacell (to the extent the survival of
such representation or warranty has not expired pursuant to the terms of
Section 6.1), (b) the failure of Grupo Iusacell to perform any of its
covenants or obligations under this Agreement (so long as such failure shall
not have been caused by any act or failure to act of a Grupo Iusacell
shareholder and so long as the performance thereof shall not be prohibited by
law), and (c) any Claim based upon any failure by Grupo Iusacell to pay or
withhold any Tax. Any indemnification amount paid by Grupo Iusacell to any
indemnified party shall be increased by the amount necessary to permit the
indemnified party to receive net indemnification proceeds equal to the amount
of gross indemnification proceeds that would otherwise have been paid to the
indemnified party prior to giving effect to any Mexican withholding taxes, if
any.
6.3 Indemnification by the Xxxxxxx Group. To the full extent permitted
by applicable law and subject to Section 6.1 hereof, the members of the
Xxxxxxx Group hereby jointly and severally agree to irrevocably indemnify,
defend and hold harmless BALAH, Grupo Iusacell and their respective
Affiliates (other than members of the Xxxxxxx Group), and their respective
directors, officers, stockholders, partners, employees, agents, consultants,
representatives, successors, transferees and assigns from, against and in
respect of all Claims which arise or result from or relate to the following:
(a) the breach of any representation or warranty of the Xxxxxxx Group (to the
extent the survival of such representation or warranty has not expired
pursuant to the terms of Section 6.1), (b) the failure of the Xxxxxxx Group
to perform any of its covenants or obligations under this Agreement (so long
as the performance thereof shall not be prohibited by law), and (c) any Claim
based upon any failure by the Xxxxxxx Group to pay or withhold any Tax. Any
indemnification amount paid by the Xxxxxxx Group to any indemnified party
shall be increased by the amount necessary to permit the indemnified party to
receive net indemnification proceeds equal to the amount of gross
indemnification proceeds that would otherwise have been paid to the
indemnified party prior to giving effect to any Mexican withholding taxes, if
any.
6.4 Indemnification by BALAH. To the full extent permitted by
applicable law and subject to Section 6.1 hereof, BALAH hereby agrees to
irrevocably indemnify, defend and hold harmless Grupo Iusacell, the members
of the Xxxxxxx Group and their respective Affiliates, and their respective
directors, officers, stockholders, partners, employees, agents, consultants,
representatives, successors, transferees and assigns from, against and in
respect of all Claims which arise or result from or relate to the following:
(a) the breach of any representation or warranty of BALAH (to the extent the
survival of such
representation or warranty has not expired pursuant to the terms of Section
6.1), (b) the failure of BALAH to perform any of its covenants or obligations
under this Agreement (so long as the performance thereof shall not be
prohibited by law), and (c) any Claim based upon any failure by BALAH to pay
or withhold any Tax. Any indemnification amount paid by BALAH to any
indemnified party shall be increased by the amount necessary to permit the
indemnified party to receive net indemnification proceeds equal to the amount
of gross indemnification proceeds that would otherwise have been paid to the
indemnified party prior to giving effect to any Mexican withholding taxes, if
any.
6.5 Indemnification; Notice and Settlement. The indemnification
procedures to be followed in the event of an indemnifiable Claim shall be
settled by binding arbitration in accordance with the terms set forth in
Section 13.4 of the Share Purchase Agreement, which are incorporated herein
by reference.
Article VII: Miscellaneous
7.1 Dispute Resolution. Any controversy or claim arising out of or
relating to this Agreement or any document or instrument delivered in
connection herewith, or any breach hereof or thereof, shall be settled by
binding arbitration in accordance with the terms set forth in Section 10.3 of
the New Shareholders Agreement, which are incorporated herein by reference.
7.2 Specific Performance; Remedies Cumulative. Each of the parties
acknowledges and agrees that the obligations of the parties hereto under this
Agreement are unique and that if any party should default in its obligations
under this Agreement, it would be extremely impracticable to measure the
resulting damages. Accordingly, in addition to any other available rights or
remedies available at law or in equity, the nondefaulting party or parties
shall be entitled to apply for and receive from any court of competent
jurisdiction specific performance and each defaulting party expressly waives
the defense that a remedy in damages will be adequate.
The remedies provided in this Agreement shall be cumulative and shall
not preclude assertion by any party hereto of any other rights or the seeking
of any other remedies against any other party hereto.
7.3 Notices. All notices, requests, demands or other communications
provided for in this Agreement shall be given in accordance with the
procedures and shall have the effect set forth in Article IX of the New
Shareholders Agreement; provided, however, that they shall be in the English
language, unless the Parties in any specific case agree otherwise. Any such
communications to Xxxxxxxx and FIUSA shall be sent to Xxxxxx Xxxxxxx as
provided in Article IX of the New Shareholders Agreement.
7.4 Expenses; Taxes. Except as provided herein with respect to any
Mexican taxes required to be withheld and paid over by BALAH to Mexican tax
authorities, each party shall bear its own expenses incurred in negotiating,
executing, delivering or performing its obligations under this Agreement and
shall pay all applicable taxes resulting from performing its obligations
under this Agreement; provided, however, that Grupo Iusacell shall promptly
reimburse Grupo Iusa for any and all documented out-of-pocket costs and
expenses incurred by Grupo Iusa in connection with the transfers of the
Section 214 Authorization described in Section 2.1(f) hereof.
7.5 Entire Agreement; Amendment; Waiver. This Agreement constitutes the
entire and only agreement and understanding among one or more of the parties
with respect to the subject matter hereof and supersedes all prior
understandings, agreements or arrangements, if any, among any one or more of
the parties, whether written or oral. No amendment or modification of this
Agreement or any of its provisions shall be binding upon any party hereto
unless made in writing and signed by all of the parties hereto. No waiver of
any term, condition or obligation of this Agreement shall be valid unless
made in writing and signed by the party or parties to which such performance
is due. No waiver of any one or several of the terms, conditions or
obligations of this Agreement, and no partial waiver thereof, shall be
construed as a waiver of any of the other terms, conditions or obligations of
this Agreement, nor shall any waiver constitute a continuing waiver. No
failure or delay by any party at any time to enforce one or more of the
terms, conditions or obligations of this Agreement or to exercise any right,
power or privilege hereunder shall constitute a waiver of such terms,
conditions, obligations, rights, powers or privileges or shall preclude such
party from requiring performance by another party at any later time or from
exercising any such right, power or privilege at any later time; and no
single or partial exercise of any such right, power or privilege shall
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.
7.6 Severability. All the provisions of this Agreement shall be
considered to be separate terms and conditions. In the event any provision of
this Agreement is determined to be invalid, prohibited or unenforceable by a
court or other body of competent jurisdiction for any reason unless narrowed
by construction or reformed, this Agreement shall be construed as if such
invalid, prohibited or unenforceable provision had been more narrowly drawn
or shall be reformed automatically so as not to be invalid, prohibited or
unenforceable. Notwithstanding the foregoing sentence, in the event that any
provision contained in this Agreement should be determined to be invalid,
prohibited or unenforceable, the validity, legality and enforceability of the
remaining severable provisions contained in this Agreement shall not in any
way be affected or impaired thereby; provided, however, that in the event
that any part or all of the provisions contained in Section 2.1(a), (b) or
(c) of this Agreement should be determined to be invalid, prohibited or
unenforceable, this Agreement shall automatically be null and void and have
no
further force or effect.
7.7 Parties in Interest; Assignment. This Agreement shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors by operation of law (including, without limitation, any bequest by
will or by laws of intestacy). No Person not a party hereto will have any
rights hereunder, except that any provision hereof which is expressly stated
to be for the benefit or, or in which an obligation is expressly undertaken
to, an Affiliate of a party or a transferee of a party is intended to be
enforceable by them. No party may assign or transfer this Agreement without
the express written consent of the other parties; provided, however, that
BALAH may at any time assign any part or all of its rights and obligations
under this Agreement to any direct or indirect subsidiary of Xxxx Atlantic
Corporation, and the Xxxxxxx Group may at any time assign any part of all of
its rights and obligations under this Agreement to any Mexican Affiliate
thereof (in which case such Affiliate shall become a member of the Xxxxxxx
Group as defined herein), in each case, so long as the assignee agrees in
writing to be bound by all of the provisions of this Agreement before such
assignment occurs or is committed to and the assignor remains primarily
liable for its obligations under this Agreement. In the event of any transfer
of Shares beneficially owned by any member of the Xxxxxxx Group by bequest by
will or by laws of intestacy, such transferee shall, and the Xxxxxxx Group
shall cause such transferee to, agree in writing to be bound by all of the
provisions of this Agreement.
7.8 Choice of Law. This Agreement shall be governed by and construed in
accordance with the internal laws of Mexico applicable to contracts executed
and performed entirely therein.
7.9 English Language Version Controls. The parties acknowledge that any
Spanish language translations of this Agreement or any Annex hereto are made
solely for the convenience of the Xxxxxxx Group, and that in the event of any
conflict or divergence between the original English version of this Agreement
or any such Annex and its Spanish translation, the original English version
shall control.
7.10 Recitals and Headings. The recitals and section and subsection
headings contained in this Agreement are solely for the purpose of reference,
are not part of the agreement between the parties and shall not in any way
affect the meaning or interpretation of this Agreement, except to the extent
that definitions may be set out in the recitals.
7.11 Counterparts. This Agreement may be executed in more than one
counterpart, each of which shall be deemed to be an original, and all of
which, taken together, shall be deemed to constitute one and the same
agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
XXXX ATLANTIC LATIN AMERICA HOLDINGS, INC.
By: /s/ Xxxxxx X. XxXxxxxx
---------------------------------
Name: Xxxxxx X. XxXxxxxx
Title: Vice President
--------------------------------------
XXXXX XXXXXXX Y XXXX XXXXXXXX
By: Xxxxxx Xxxxxxx Xxxxxxxx, Attorney-in-Fact
/s/Xxxxxx Xxxxxxx Xxxxxxxx
--------------------------------------
XXXXXX XXXXXXX XXXXXXXX
IUSA GRUPO COMUNICACIONES, S.A. DE C.V.
By: /s/Xxxxxx Xxxxxxx Xxxxxxxx
---------------------------------
Name: Xxxxxx Xxxxxxx Xxxxxxxx
Title: Attorney-in-Fact
XXXXXXXX INVESTMENTS LIMITED
By: /s/Xxxxxx Xxxxxxx Xxxxxxxx
---------------------------------
Name: Xxxxxx Xxxxxxx Xxxxxxxx
Title: Director
FIUSA PASTEJE, S.A. DE C.V.
By: /s/Xxxxxx Xxxxxxx Xxxxxxxx
---------------------------------
Name: Xxxxxx Xxxxxxx Xxxxxxxx
Title: Attorney-in-Fact
GRUPO IUSACELL, S.A. DE C.V.
By: /s/Xxxxxxxxx Xxxxx
---------------------------------
Name: Xxxxxxxxx Xxxxx
Title: Director General
Index of Annexes
ANNEX A: New Estatutos
ANNEX B: New Shareholders Agreement
ANNEX C: Convertible Debentures
ANNEX D: Form of Promissory Note (Xxxxxx) for Interim Funding
ANNEX E: Opinion of Lic. Xxxxxx Xxxxxxxxx
ANNEX EE: Opinion of Lic. Xxxxxx Xxxxxxxxx
ANNEX F-1: Opinion of De Xxxxxx x Xxxxxxxx del Xxxxx, S.C.
ANNEX FF-1: Opinion of De Xxxxxx x Xxxxxxxx del Campo, S.C.
ANNEX F-2: Opinion of Xxxxx X. Xxxxxxxxxx, Esq.
ANNEX FF-2: Opinion of Xxxxx X. Xxxxxxxxxx, Esq.
ANNEX G-1: Opinion of Xxxxxxx Asesoria Juridica, S.A. de C.V.
ANNEX GG-1: Opinion of Xxxxxxx Asesoria Juridica, S.A. de C.V.
ANNEX G-2: Opinion of Isle of Man Counsel
ANNEX GG-2: Opinion of Isle of Man Counsel
ANNEX H: Directors and Committee Members
ANNEX H:Directors and Committee Members
The parties acknowledge that Grupo Iusacell called the following
meetings of the shareholders of Grupo Iusacell for December 18, 1996: a
General Ordinary and Extraordinary Meeting of the shareholders of Grupo
Iusacell, a Special Meeting of the holders of the Series A Shares, a Special
Meeting of the holders of the Series B Shares, a Special Meeting of the
holders of the Series D Shares and a Special Meeting of the holders of the
Series L Shares. The parties acknowledge and agree that the following Persons
were elected as directors and members of committees of the Board of Directors
(and, in the event of any other meeting of the shareholders (or any class of
shareholders) of Grupo Iusacell prior to the 1997 Annual Meeting of
Shareholders of Grupo Iusacell, BALAH and the Xxxxxxx Group hereby agree that
they shall vote all of their Shares at any such meetings of the shareholders
and any class of shareholders of Grupo Iusacell in which they have the right
to vote, as appropriate, to reaffirm the election of the following Persons as
directors and the election of the following Persons as members of committees
of the Board of Directors):
Board of Directors
Series A Directors Series A Alternates
------------------ -------------------
Xxxxx Xxxxxxx y Xxxx Xxxxxxxx Xxxxxx Xxxxxxxx Xxxxxx
Xxxxxx Xxxxxxx Xxxxxxxx Xxxxx Xxxxxxx de la Xxxxx Xxxxxxxx
Xxxxxxxx X. Xxxxxx, Xx. Xxxxxxx Xxxx
Xxxxxxx X. Xxxxxxxxx Xxxxx Xxxxxxxxxxx N.
Xxxxxx Xxxxxx Xxxxxx Xxxxxxx Cortina Xxxxx
Xxxx Xxxxx Xxxxxxxx Xxxxxxxxx Xxxxxxxx Garceran
Xxxxxxx Xxxxxx Xxxxxx Xxxxxx Xxxxxx Xxxxxx
Xxxxxxx Xxxxxxx Xxxxxxxxx Xxxxxxx Xxxxxxx Xxxxxxxxx
Xxxxxxx Xxxxx Xxxx Xxxxxxx Xxxxxxx Castilla
Xxxxxx Xxxxxxxx del Xxxxx Xxxxxx Xxxxxx M.
Series B Directors Series B Alternates
------------------ -------------------
Xxxxxx X. Xxxxxxxx Xxxxxxxxx X. Xxxxx
Xxxxxx X. XxXxxxxx Xxxxxxx Xxxxx Xxxxx
Xxxxxx Xxxxxxxxx Xxxx Xxxxxxxx F.
Xxxx X. Xxxxx Xxxxxx Xxxxxxx Xxxxxxxxx
Xxxxx X. Xxxxxxxxxx Xxxxxx Xxxxxxx Xxxxxx X.
Xxxx X. Xxxxxx Xxxxxxx Xxxxxxxx
Xxxxx X. Xxxxxxxxxxxx Xxxxx Xxxxxx Xxxxxxx
Xxxxxx Xxx Xxxxx Xxxxxx Xxxxx Xxxxxxxxx del Xxxxxxxx
Xxxxxxxx xx Xxxxxx Xxx Xxxxx Xxxxxxxxx R.
Series D Director Series D Alternate
----------------- ------------------
Xxxxxxx Xxxxxxx Xxxxxx Xxxx Xxxxxx Xxxxxxxx Xxxxx
Series L Director Series L Alternate
----------------- ------------------
Xxxxxxxxx Xxxxx Xxxxxx X. Xxxxxxx
Committees of the Board of Directors
Executive Committee
Members Alternates
------- ----------
Xxxxxx Xxxxxxx Xxxxxxxx Xxxxxx Xxxxxxxx Xxxxxx
Xxxxxxx Xxxxxxx Xxxxxx Xxxxxxx Xxxxxx Xxxxxx
Xxxxxxxx X. Xxxxxx, Xx. X.X. Xxxxx or D.A. Xxxxxxxxxxxx
Xxxxxxx X. Xxxxxxxxx X.X. Xxxxx or D.A. Xxxxxxxxxxxx
Xxxxxx X. Xxxxxxxx X.X. Xxxxx or D.A. Xxxxxxxxxxxx
Xxxxxx X. XxXxxxxx X.X. Xxxxx or D.A. Xxxxxxxxxxxx
Xxxx X. Xxxxx X.X. Xxxxx or D.A. Xxxxxxxxxxxx
Xxxxxxxxx Amore Xxxxxx X. Xxxxxxx
Finance and Audit Committee
Members Alternates
------- ----------
Xxxx Xxxxxx Xxxxxxxx Xxxxx Xxxxxxx Xxxxx Xxxx
Xxxxxxx Xxxxxxx Xxxxxx Xxxxxxx Xxxxxx Xxxxxx
Xxxxxxx X. Xxxxxxxxx X.X. Xxxxx or X.X. Xxxxx
Xxxxxx X. XxXxxxxx X.X. Xxxxx or X.X. Xxxxx
Xxxx X. Xxxxxx X.X. Xxxxx or X.X. Xxxxx
Xxxxxxxxx Xxxxx Xxxxxx X. Xxxxxxx
Human Resources and Compensation Committee
Members Alternates
------- ----------
Xxxxxxx Xxxxxxx Xxxxxx Xxxxxx Xxxxxxxx Xxxxxx
Xxxxxx X. Xxxxxxxx X.X. Xxxxx or D.A. Xxxxxxxxxxxx
Xxxxxx X. XxXxxxxx X.X. Xxxxx or D.A. Xxxxxxxxxxxx
Xxxxxxxxx Amore Xxxxxx X. Xxxxxxx
Strategic Planning and Technology Committee
Members Alternates
------- ----------
Xxxxxx Xxxxxxx Xxxxxxxx Xxxxxxx Xxxxxxx Xxxxxx
Xxxxxxxx X. Xxxxxx Xxxxxxx Xxxx or D.A. Xxxxxxxxxxxx
Xxxxxx X. Xxxxxxxx Xxxxxxx Xxxx or D.A. Xxxxxxxxxxxx
Xxxxxxxxx Amore Xxxxxx X. Xxxxxxx
