Exhibit 10.1
STOCK PURCHASE AND CAPITAL CONTRIBUTION AGREEMENT
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THIS STOCK PURCHASE AND CAPITAL CONTRIBUTION AGREEMENT (the "Agreement") as
herein defined, is entered into as of this 22nd day of September of 1997 by and
among:
(i) Tele-Communications International, Inc., a corporation duly incorporated
and registered in United States of America (hereinafter referred to as "TINTA"),
(ii) Xxxxxxx Jaliquias, I.D.N 3,303,838, Xxxxxxx Xxxxx, I.D.N 4,203,286, and
Xxxxxxx Xxxxxxxxx, I.D.N 2,073,443, all represented hereunder by Xxxxxxx
Xxxxxxxxx (hereinafter referred to collectively as "EE"),
TINTA and EE collectively the "Stockholders",
(iii) CEI Citicorp Holdings S.A., a corporation duly incorporated and
registered in Argentina (hereinafter referred to as "CEI" or "Buyer"), and
(iv) T.I. Telefonica Internacional de Espana S.A., a corporation duly
incorporated and registered in Spain (hereinafter referred to as "XXXX" or
"Buyer"),
CEI and XXXX collectively the "Buyers".
WHEREAS
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A. The Stockholders own all the shares representing the stock and votes of the
Companies (as herein defined) as set out in detail in Exhibit A. Hereinafter,
the companies described in Exhibit A will be referred to individually as
"Company" and collectively as "Companies".
B. Stockholders desire to sell to Buyers and Buyers desire to buy from
Stockholders the shares representing the capital stock and votes in the
Companies and in the percentages set forth in Exhibit B.
C. The Stockholders and the Buyers also desire to enter into the Stockholders
Agreement attached hereto as Exhibit C of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties herein contained, the parties hereto agree as
follows:
DEFINITIONS
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For purposes of this Agreement, the following terms shall have the following
meanings:
"Agreement": this Agreement and its exhibits.
"Assets": All properties, privileges, rights, interests and claims, real and
personal, tangible and intangible, of every type and description that are owned,
leased or held, used or useful in the Company Business in which Companies or
Subsidiaries have any right, title or interest or in which Companies or
Subsidiaries have acquired any right, title or interest on or before the Closing
Date, including Governmental Permits, Company Contracts, Equipment, Real
Property and cable inventory listed in the Inventory.
"Balance Sheet": with respect to Cablevision S.A. and its Subsidiaries means the
consolidated balance sheet as of June 30, 1997; with respect to Construred S.A.
means the balance sheet as of December 31, 1996; with respect to Univent's S.A.
means the balance sheet as of December 31, 1996.
"Balance Sheet Date": shall mean with respect to each Company or Subsidiary, the
date indicated in "Balance Sheet".
"Basic Services": the transmission of cable television programming sold to
Companies' and Subsidiaries' subscribers as a package as part of the Company
Business, for which subscribers pay a fixed monthly fee to Companies or
Subsidiaries, including the satellite transmission related to Televisora
Belgrano S.A. in the city of Chascomus,
Province of Buenos Aires, UHF transmissions related to Televisora La Plata S.A.
and data transmissions made through FiberTel-TCI2 S.A.
"Closing": means the consummation of the transactions contemplated by this
Agreement.
"Closing Date": meaning the date in which the consummation of the transactions
contemplated by this Agreement takes place.
"COMFER": meaning the Comite Federal de Radiodifusion of Argentina.
"COMFER Approval": shall mean all necessary authorizations or consents from
COMFER required to consummate the transactions contemplated by this Agreement
and/or the obligations assumed and/or provisions contained herein.
"Company" (or jointly "Companies"): meaning Cablevision S.A., Construred S.A.
and Univent's S.A.
"Company Contracts": All material contracts and agreements, other than
Governmental Permits, pertaining to ownership, operation and maintenance of the
Companies or the Subsidiaries.
"Company Business": meaning the operation of a complete cable television
reception and distribution System located in the cities of Buenos Aires, Greater
Buenos Aires, La Plata, and in the city of Chascomus, Province of Buenos Aires
developed by the Companies and the Subsidiaries. In addition, it includes the
construction activities carried out by Construred S.A., data transmission
activities carried out by FiberTel-TCI2 S.A. and the UHF transmission related to
Televisora La Plata S.A.. Univent's is currently a dormant company, but will be
purchased hereby.
"Current Assets": those items classified as such in the Balance Sheet as of the
Balance Sheet Date prepared in accordance with GAAP.
"EBITDA": the Companies' and the Subsidiaries' -excluding Televisora La Plata
S.A.- earnings before deduction of interest, taxes, depreciation and
amortization for the six
month period ended 30 June 1997, according to generally accepted accounting
principles in the United States of America.
"Effective Date": the date of the execution of this Agreement.
"Encumbrances": any mortgage, lien, security interest, security agreement,
conditional sale or other title retention agreement, limitation, pledge, option,
charge, assessment, restrictive agreement, restriction, encumbrance, adverse
interest, restriction on transfer or any exception to or defect in title or
other ownership interest (including reservations, rights of way, possibilities
of reverter, encroachments, easements, rights of entry, restrictive covenants,
leases and licenses).
"Equipment": all electronic devices, trunk and distribution coaxial and optical
fiber cable, amplifiers, power supplies, conduit, vaults and pedestals,
grounding and pole hardware, subscriber's devices (including converters,
encoders, decoders, transformers behind television sets and fittings), headend
hardware (including origination, earth stations, transmission and distribution
system), test equipment, vehicles and other tangible personal property owned,
leased, used or held for use in the Company Business.
"GAAP": generally accepted accounting principles in force in the Argentine
Republic from time to time.
"Governmental Authorities": (i) The Republic of Argentina, (ii) any province or
territory of the Republic of Argentina and any political subdivision thereof
(including provinces, municipalities and the like) or (iii) any agency,
authority or instrumentality of any of the foregoing, including any court,
tribunal, department, bureau, commission or board, including, but not limited
to, the COMFER.
"Governmental Permits": all franchises, approvals, authorizations, permits,
licenses, easements, registrations, qualifications, leases, variances and
similar rights obtained from any Governmental Authority.
"Legal Requirements": any statute, ordinance, code, law, rule, regulation, order
or other requirement, standard or procedure enacted, adopted or applied by any
Governmental Authority, including judicial decisions applying or interpreting
any Legal Requirement.
"Liabilities": those items classified as liabilities on the Balance Sheet
prepared in accordance with GAAP as of the Balance Sheet Date.
"Net Debt": total Liabilities minus Current Assets, according to GAAP.
"Persons": any natural person, corporation, partnership, trust, unincorporated
organization, association, limited liability company, Governmental Authority or
other entity.
"Purchase Price": shall be that defined in Section 1.2.
"Real Property": all Assets consisting of realty, including appurtenances,
improvements and fixtures located on such realty, and any other interests in
real property, including fee interests (if any) in Companies' offices and
headend sites and leasehold interests and easements.
"Required Consents": all franchises, licenses, approvals and consents required
under Governmental Permits, Company Contracts or otherwise for (a) Stockholders
to transfer the Shares to Buyers, and (b) Buyers to assume and perform the
Governmental Permits and the Company Contracts after the Closing Date.
"Shares": meaning the percentage of shares of each of the Companies owned by
each of the Stockholders and transferred to Buyers, set out in Exhibit B,
including every right and benefits corresponding thereto; preferential rights
for the subscription of new shares of the Companies, whenever it is related to
their separate transfer irrespective of the corresponding shares, and rights
derived from advances on account of future subscriptions of shares of the
Companies indicated in Exhibit 2.18.
"Stockholders Agreement": meaning the document which shall govern the
relationship among the Companies' stockholders after the Closing as set out in
Exhibit C.
"System": a complete cable television reception and distribution system operated
in the conduct of the Company Business, consisting of one or more headends,
subscriber drops and associated electronic and other equipment, and which is, or
is capable of being without modification, operated as an independent system
without interconnections
to other systems. Any systems which are interconnected or which are served in
total or in part by a common headend will be considered a single System. This
definition does also apply to the UHF activities of Televisora La Plata S.A. and
to FiberTel TCI2 S.A.
"Subscribed Shares": the shares of Cablevision S.A. to be subscribed by Buyers,
as set out in Section 1.3.
"Subsidiaries": the companies owned by Cablevision S.A., meaning FiberTel TCI2
S.A., Televisora Belgrano S.A., Oeste Cable Color S.A., Cable Xxxx de los Deltas
S.A. and Televisora La Plata S.A.
ARTICLE I
PURCHASE, SALE AND SUBSCRIPTION OF THE SHARES
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SECTION 1.1. Purchase and Sale of the Shares. At Closing, upon the terms and
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subject to the conditions set forth in this Agreement, the Stockholders shall
sell the Shares to Buyers and Buyers shall purchase the Shares from the
Stockholders. For said purpose, the Stockholders shall deliver to Buyers such
documents representing the Shares, in proper form for transfer, with appropriate
transfer notices, and any other documents or instruments which may be necessary
in order to vest Buyers with good and exclusive title to the Shares. Buyers
simultaneously will deliver cash denominated in United States Dollars in payment
of the Purchase Price (as hereinafter defined) pursuant to Section 1.2.
SECTION 1.2 Purchase Price. In consideration of the Shares and of the
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covenants, representations and warranties made by Stockholders in this
Agreement, Buyers hereby agree to pay the Purchase Price, that is to say:
(i) to TINTA the amount of U$S 120,000,000 (One Hundred Twenty Million United
States Dollars) and
(ii) to EE the amount of U$S 321,176,470 (Three Hundred Twenty One Million One
Thousand Seventy Six Four Hundred Seventy United States Dollars).
The parties agree that the Purchase Price was agreed to, on the basis of the
Stockholders' representations and warranties contained herein, including the
representation and warranty that, as of 30 June 1997: (a) the EBITDA for the
previous six month period was U$S 43,000,000 and that Net Debt was U$S
182,000,000.
The Purchase Price will be paid by Buyers by way of wire transfer of readily
available funds, to the accounts to be indicated in writing, by each Stockholder
three days prior to Closing, as follows:
(i) To TINTA: The amount of U$S 21,000,000 (Twenty one million United States
Dollars) has been paid by Buyers to TINTA on July 25, 1997. The balance of U$S
99,000,000 (Ninety nine million United States Dollars) shall be paid at Closing;
(ii) To EE: The amount of U$S 32,117,647 (Thirty Two million One hundred
Seventeen Thousand Six Hundred Fourty Seven United States Dollars) has been
already paid by Buyers to EE on July 25, 1997. The balance of U$S
289,058,823.00(Two Hundred Eigthy Nine Million Fifty Eight Thousand Eight
Hundred Twenty Three United States Dollars) shall be paid at Closing
SECTION 1.3 Subscription of the Subscribed Shares.
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1.3.1 At Closing Buyers will subscribe the Subscribed Shares at a
Subscription Price of U$S 320,000,000, that is to say U$S 90.3488 per share. For
this purpose, Stockholders and Buyers will cause Cablevision S.A. to hold an
Unanimous Extraordinary Shareholders Meeting that will approve a capital
increase of $ 3,541,829, from $ 9,115,000 to $ 12,656,829 to be totally
subscribed by Buyers. Each Buyer will subscribe one half of the Subscribed
Shares. CEI will subscribe its portion of the Subscribed Shares through a wholly
owned subsidiary named Southtel Equity Corporation, a company organized
according to the laws of the Cayman Islands, BWI, with legal domicile at the
offices of Xxxxxx and Xxxxxx, P.O. Box 309, Grand Cayman ("Southtel").
1.3.2 TINTA and Xxxxxx Xxxxxxxxx hereby irrevocably renounce to preemptive
right to subscribe their pro rata portion of the Subscribed Shares.
1.3.3 The Subscribed Shares will be paid: (i) 25% of the Subscription Price
(the "Initial Payment") at Closing; and (ii) the balance, that is to say 75% of
the Subscription Price, within two (2) years as from Closing Date or, at the
request of the Board of Directors at an earlier time, plus interest thereon at
LIBOR from the Closing
Date to the effective date of payment, payable in arrears. The obligations of
Buyers to pay the balance foreseen hereto will be evidenced by a Subscription
Agreement to be executed at Closing which will contain the unconditional and
irrevocable promise of the Buyers to pay such balance plus applicable interest
on the due date thereof. Southtel and XXXX shall be jointly and severally liable
for the full payment of the Subscription Price and interest thereon.
1.3.4 If on April 30, 1998 Buyers have not paid in to Cablevision S.A. the
100% of the Subscription Price the Board of directors of Cablevision S.A. (with
the majority foreseen in Section 5.6 (ii) of the Stockholders Agreement) shall
decide either: (i) to request Buyers the full paying in of the Subscribed Shares
on or before June 30, 1998; or (ii) to submit to the Shareholders meeting of
Cablevision S.A. a proposal for a reduction of capital of Cablevision S.A. in an
amount equal to the unpaid portion of the Subscription Price divided by 90.3488
which reduction will result in a redemption of the Subscribed Shares (including
the Subscribed Shares purchased with the Initial Payment). The price per share
used in such reduction of capital will be U$S 90.3488 per share plus interest at
LIBOR from the date of subscription of the Subscription Price. The capital
reduction will be allocated in the following proportions: TINTA 28.27%;
Eurnekian 0%; CEI 35.865% and XXXX 35.865%. For such purposes Stockholders and
Buyers agree to cause an Unanimous Extraordinary Shareholders Meeting of
Cablevision S.A. to approve said proposal.
If the Board determines to reduce Cablevision S.A.'s capital, TINTA will
receive a long-form, full recourse, United States promissory note, payable on
demand and subject to the exclusive jurisdiction of the laws and courts of the
State of New York (the "Note"). At TINTA's option, the maker of the Note will be
Cablevision S.A. or the Buyers (jointly and severally).
If Cablevision S.A.'s capital is reduced in an amount equal to US$ 320,000,000
divided by 90.3488, the principal amount of the Note will be US$ 90,000,000. If
Cablevision S.A.'s capital is reduced in an amount equal to US$ 240,000,000
divided by 90.3488, the principal amount of the Note will be US$ 67,848,000. All
reductions of Cablevision S.A.'s capital unders this Section shall be done
accordingly.
SECTION 1.4 Additional Agreements. (a) At Closing, Stockholders and/or
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Company will enter into the following agreements with Buyers and/or each
Company, as appropriate:
(i) The Stockholders Agreement substantially according to the wording
contained in Exhibit C.
(ii) The Five Year Management Agreement between the Company and TINTA,
substantially in the wording attached as Exhibit 1.4 (ii).
(b) At Closing, Stockholders and Buyers will cause the Company to extend
the programming agreement with Pramer S.R.L. as provided in Section 3.4 of the
Stockholders Agreement.
SECTION 1.5 Late Payment. Default. The delay in the payment of any eventual
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monies due will occur automatically, with the expiration of the agreed dates,
without need of any judicial or out-of-court requirement, giving way to punitive
and compensatory interest at a daily rate equivalent to a rate of 15% per annum,
during which payment is due and until the date of payment.
SECTION 1.6 Deliveries by Stockholders Stockholders agree to deliver, prior to
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Closing, the following items and documents to Buyers or make them available at
Companies:
(a) a certified copy of the Articles of Incorporation of the Companies and the
Subsidiaries, as amended, and of the Companies and Subsidiaries By-laws.
(b) minutes and written actions containing an accurate record of proceedings
of, and actions by the shareholders and directors of the Companies and of the
Subsidiaries from their inception.
(c) copies of the shareholders books of the Companies and of the Subsidiaries
which accurately reflect all issuances, reissuances, cancellations, liens (if
applicable), transfers and encumbrances of Companies' and Subsidiaries' stock
which adequately reflect all ownership, cancellations, capital increases, liens
(if applicable), transfers and encumbrances of Companies and Subsidiaries
interest.
(d) copies of all Governmental Permits for the ongoing Company Business.
(e) copies of Company Contracts and title documents.
(f) copies of any title documents or Company Contracts representing intangible
property and boundaries of all Real Property as owned or leased by the Companies
and the Subsidiaries together with any and all improvements, rights of way,
easements, roads and such other features as Buyers shall reasonably specify.
(g) copies of the insurance policies presently in force.
(h) copies of any employee incentive, bonus or benefit plans or agreements.
(i) the Balance Sheet of Cablevision S.A., Construred S.A. and Univent's S.A.
(j) copies of such other documents and items as Buyers may reasonably request.
SECTION 1.7 Closing The Closing of the transactions contemplated in this
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Agreement will take place at Tucuman 1, 18th floor, Buenos Aires, or at such
other place as Stockholders and Buyers mutually agree, on such date on which
all the conditions precedent set forth in Article IV shall have been satisfied
or waived in accordance with the terms hereof and applicable law. The date of
the Closing shall be a date on or before October 23, 1997, except that in case
US West (as defined hereunder) exercises its tag along right pursuant to the US
West Agreement and Buyers agree to purchase in accordance to said agreement, the
date of Closing shall be the earliest possible date thereafter , taking into
account that the closing under the US West Agreement must take place
simultaneously with the Closing.
At Closing
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1.7.1 Stockholders shall deliver to Buyers:
(A) the written resignations of the current members of the Board of directors,
of the current syndics and of the managers (which the parties may have agreed
that will not remain employees) of each of the Companies and the Subsidiaries,
resignations that will encompass their offices and fees as per the wording
attached as Exhibit 1.7.1 (A);
(B) copies of the corresponding board of directors meetings approving the
resignations of the current members of the Board of directors and of the current
syndics of the Companies and the Subsidiaries;
(C) copies of the shareholders meetings of each of the Companies and the
Subsidiaries approving all the actions taken by the directors and syndics and
accepting the resignations of such directors and syndics and appointing new
members of the Board of directors and new syndics as Stockholders and Buyers
shall agree;
(D) the documents evidencing the Shares, duly endorsed, and such other
documents or instruments as Buyers may request, in order that Buyers be vested
with good and exclusive title to the Shares;
(E) to the extent not previously delivered, copies of the minute books,
shareholders books of the Companies and the Subsidiaries and such other papers,
evidence of title or interest, books, records, files, correspondence, memoranda
and other documents of the Companies and the Subsidiaries, as Buyers may
reasonably request;
(F) a report issued by a Real Estate Registry or by a notary or an officer of
the Companies and the Subsidiaries satisfactory to Buyers, to the effect that
(i) none of the Assets is subject to any recorded lien, including any lien for
federal, state or local taxes or assessments, and (ii) no suits or judgments
related to Real Property have been filed against the pertinent Company except
for those indicated in the Balance Sheet;
(G) employment Agreements, dated the Closing Date, executed by the Companies
and the Subsidiaries and mutually agreed key employees;
(H) duly certified copies of resolutions of the Board of Directors or similar
governing body of TINTA, authorizing the execution, delivery and performance of
this Agreement by such Stockholder which resolutions shall be in full force an
effect at and as of the Closing;
(I) duly certified copies of the powers of attorney granted by Messrs. Xxxxxxx
Jaliquias and Xxxxxxx Xxxxx, in favor of EE, authorizing the execution, delivery
and performance of this Agreement by such Stockholders;
(J) documentary proof that the Companies and the Subsidiaries timely
obtained or filed complete and timely applications for all authorizations needed
to carry all signals being carried and all authorizations needed to utilize the
frequencies on which these signals are carried and to carry out the Company
Business;
(K) all blueprints, schematics, drawings, diagrams, maps, system design
xxxx of material, engineering and technical data, used by the Companies and the
Subsidiaries in connection with the Assets and the Company Business, unless
Buyers shall direct in writing that the same or part thereof be delivered to
Buyers elsewhere;
(L) a certificate signed by the Secretary (or other person having and
exercising equivalent authority) of TINTA certifying to Buyers the incumbency of
TINTA's officers to execute this Agreement (or persons having and exercising
equivalent authority) as from the Closing Date, and bearing the authentic
signatures of all such officers (or other persons) who have executed this
Agreement;
(M) a long-form certificate of good standing for the Companies and the
Subsidiaries dated not more than five (5) days prior to the Closing Date, a
certificate of tax good standing for the Companies and the Subsidiaries dated
not more than five (5) days prior to the Closing Date and a "bring-down" tax
good standing letter for the Companies and the Subsidiaries dated the Closing
Date, in each case from the Company syndic or the Chairman of the board of
directors;
(N) such documents and instruments as parties may agree in order to change
the authorized signatures for all bank accounts of the Companies and the
Subsidiaries, and the persons authorized to have access to the Companies' and
the Subsidiaries' bank accounts;
(O) a list of the cable inventory of the Companies and the Subsidiaries as
of June 30, 1997 (hereinafter the "Inventory").
1.7.1.A Eurnekian shall deliver to Buyers an instrument by which Pramer
S.R.L. grants Cablevision S.A., free of charge, a 180 day term license for the
non exclusive use of the "Cablevision" and "CV" trademarks and any and all other
"Cablevision" and "CV" related trademarks.
1.7.1B TINTA shall deliver to Buyers an instrument by which Tele-
Communications, Inc. grants Cablevision S.A., free of charge, a licence for the
use of the "TCI" denomination and related trademarks. Said license will be in
effect during the term of the Management Agreement and any extension thereof.
1.7.2. The following events shall take place:
(A) an Unanimous Extraordinary Shareholders Meeting of Cablevision S.A.
shall approve: (i) a capital increase of $ 3,541,829 from $ 9,115,000 to $
12,656,829 to be totally subscribed by Buyers. Stockholders will renounce their
preemptive right to subscribe their pro rata portion of the Subscribed Shares.
Buyers will subscribe the Subscribed Shares.The Subscribed Shares will be paid
as follows: (a) 25% of the Subscription Price, at Closing; and (b) the balance,
that is to say 75% of the Subscription Price, within two (2) years as from
Closing Date or at an earlier time as required in Section 1.3.4 of this
Agreement; and (ii) an amendment to Cablevision S.A.'s by-laws in order to
reflect as required or agreed, an to the fullest extent permitted by applicable
law, the provisions of the Stockholders Agreement;
(B) Stockholders shall notify the Companies the transfer of the Shares
according to the terms of Section 215 of Argentine law N degrees 19,550;
(C) Stockholders will cause to Companies to duly register the transfer of
the Shares in the respective Shareholders Registry Book of each of the Companies
and in the certificates representing the Shares;
(D) a Board of Directors meeting appointing the respective president and
vicepresident of each of the Companies and the Subsidiaries, will take place;
(E) the Board of Directors of Cablevision S.A. shall issue the provisional
certificates representing the Subscribed Shares;
(F) Stockholders and Buyers will cause Cablevision S.A. to duly register
the issue of the Subscribed Shares in Cablevision S.A.'s Shareholders Registry
Book.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
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OF THE STOCKHOLDERS
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Stockholders represent and warrant to Buyers, as of the Closing, as
follows:
SECTION 2.1. Organization and Qualification. The Companies and the
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Subsidiaries are corporations duly organized, validly existing and in good
standing under the laws of Argentina and have all requisite corporate power and
authority to own, lease and use its Assets as they are currently owned, leased
and used and to conduct the Company Business as it is currently conducted. The
Companies and the Subsidiaries are duly qualified or licensed to do business and
are in good standing under the laws of each jurisdiction in which the character
of the Company Business makes such qualification necessary, except any such
jurisdiction where the failure to be so qualified or licensed and in good
standing would not have a material adverse effect on the relevant Company or
Subsidiary or on the validity, binding effect or enforceability of this
Agreement.
SECTION 2.2. Good title. Stockholders have good, valid, marketable and
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exclusive title to the Shares free and clear of any liens, encumbrances, rights
of first refusal (except as agreed herein and as provided in the current
shareholders agreement of the Companies), pledges or claims, with full right and
lawful authority to transfer the Shares to Buyers. At Closing, Stockholders will
reciprocally waive their right of first refusal to acquire the shares of the
Companies under the Amended and Restated Shareholders Agreement dated April 25,
1995. There are no other outstanding options, warrants or any other pre-emptive
rights or commitments of any kind for third parties to acquire or become
beneficiary of the Shares or the common stock of the Company and the Subsidiary
in any way. All of the Shares have been duly authorized and validly issued and
have been fully paid for and there are no pending increases of capital nor
convertible securities. There is a capital reduction pending of registration
before the Public Registry of Commerce of the City of Buenos Aires, which has
carried the corporate capital to $ 9,115,000.00 and there are no outstanding
certificates either provisional or not which have not been duly cancelled. All
existing certificates represent the corporate capital of $9,115,000.00.
SECTION 2.3. Authority and Validity. Each Stockholder has authority to
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execute and deliver, to perform its obligations under, and to consummate the
transactions contemplated by this Agreement. The execution and delivery by
Stockholders and the performance by Stockholders of their obligation hereunder,
and the consummation by Stockholders of the transactions contemplated by this
Agreement have been duly authorized by all requisite corporate and other
appropriate action of Stockholders. This Agreement has been duly executed and
delivered by Stockholders and is the valid and binding obligation of
Stockholders, enforceable against Stockholders in accordance with
its terms, except insofar as enforceability may be affected by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws now or
hereafter in effect affecting creditor's rights generally or by principles
governing the availability of equitable remedies.
SECTION 2.4. No Breach or Violation. Subject to obtaining COMFER
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Approval, the execution, delivery and performance of this Agreement by
Stockholders will not: (a) constitute a violation of any provision of the
charter or bylaws of any Company or Subsidiary; (b) constitute a violation of
any Legal Requirement; (c) require any consent, approval or authorization of, or
any filing with or notice to, any Person save in accordance with applicable
Stockholders Agreement; or (d) (i) violate, conflict with or constitute a breach
of or default under, (ii) permit or result in the termination, suspension or
modification of, (iii) result in the acceleration of (or give any Person the
right to accelerate) the performance of the Company under, or (iv) result in the
creation or imposition of any Encumbrance under, any Company Contract or any
other instrument evidencing any of the Assets or any instrument or other
agreement to which any Company or any Subsidiary is a party or by which any
Company or any Subsidiary, any Company Business or any of their Assets is bound
or affected, except for purposes of this clause (d) such violations, conflicts,
breaches, defaults, terminations, suspensions, modifications, and accelerations
as would not, individually or in the aggregate, have a material adverse effect
on any System, any Company Business, any Company or any Subsidiary.
SECTION 2.5. Assets. Every Company and every Subsidiary has exclusive,
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good and marketable title to (or, in the case of Assets that are leased, valid
leasehold interests in) the Assets (other than Real Property, as to which the
representations and warranties in Section 2.6 apply). The Assets are free and
clear of all Encumbrances of any kind or nature, except restrictions stated in
the Governmental Permits. Except as set forth on Exhibit 2.5 , none of the
Equipment is leased by any Company or Subsidiary from any other Person. The
Assets will remain in each Company and in each Subsidiary and are all the assets
necessary to permit Buyers to conduct the Company Business substantially as it
is being conducted on the date of this Agreement in compliance with all Legal
Requirements, save for the trademark exception referred to in Section 2.8
herebelow. All the Equipment is in good operating condition and repair, ordinary
wear and tear excepted and is suitable and adequate for continued use in the
manner in which it is presently used. Neither the Stockholders nor any affiliate
of Stockholders other than the Companies and the Subsidiaries has been granted
or has applied for a cable television franchise in any area currently served by
the Company Business.
SECTION 2.5.A Accounts Receivable The accounts receivable shown in the
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Balance Sheet of each of the Companies and the Subsidiaries, and any additions
made thereto
since the Balance Sheet Date have arisen in the ordinary course of business and
are valid and genuine and are current and collectible net of the reserves shown
on such financial statements. All accounts for basic cable television services
furnished by any Company or Subsidiary which are more than sixty (60) days past
due are addequately provisioned in the Companies and Subsidiaries financial
statements.
SECTION 2.6. Real Property.
-------------
2.6.1. All the Assets consisting of Real Property interests are described
in Exhibit 2.6.1. Each Company and each Subsidiary has valid leasehold interests
in Real Property leased by each Company and by each Subsidiary and, with respect
to other Real Property not owned or leased by each said Company or each said
Subsidiary, each Company and each Subsidiary has the valid and enforceable right
to use all other Real Property pursuant to easements, licenses, rights-of-way or
other rights.
2.6.2. The documents delivered by each Company, each Subsidiary or
Stockholders to Buyers as evidence of each lease of Real Property constitute the
entire agreement with the landlord in question, except for the agreements
indicated under Exhibit 2.6.2 which will be renegotiated in order to have them
meet current practice and market prices. There are no leases or other
agreements, oral or written, granting to any Person other than the corresponding
Company or Subsidiary the right to occupy or use any Real Property. All
easements, rights-of-way and other rights appurtenant to, or which are necessary
for the corresponding Company's or Subsidiray's current use of, any Real
Property are valid and in full force and effect, and the corresponding Company
and Subsidiary has not received any notice with respect to the termination or
breach of any of those rights. Each parcel of Real Property, any improvements
constructed thereon and their current use conform in all material respects to
(a) all applicable Legal Requirements, including zoning requirements, and (b)
all restrictive covenants, if any, or other Encumbrances affecting all or part
of such parcel.
SECTION 2.7. Compliance with Law: Governmental Permits.
-----------------------------------------
2.7.1. The ownership, leasing and use of the Assets as they are currently
owned, leased and used, and the conduct of the Company Business as it is
currently conducted do not violate any Legal Requirement, which violation,
individually or in the aggregate, would have a material adverse effect on the
System, the Company Business, any of the Companies or any of the Subsidiaries.
None of the Companies or the Subsidiaries
has received any notice claiming a violation by any Company or any Subsidiary or
the Company Business of any Legal Requirement applicable to a Company or a
Subsidiary or to the Company Business as it is currently conducted and to
Stockholders' best knowledge, there is no basis for any claim that such a
violation exists except for municipal charges and levies being pursued and which
the relevant Company or Subsidiary is diligently arguing. Stockholders,
Companies and Subsidiaries are in material compliance with the laws of the
Argentine Republic.
2.7.2. Complete and correct copies of the Governmental Permits applicable
to each of the Companies and to each of the Subsidiaries have been delivered by
Cablevision S.A. to Buyers. The Governmental Permits are currently in full force
and effect, are not in default, and are valid under all applicable Legal
Requirements according to their terms. There is no legal action, governmental
proceeding or investigation, pending or threatened, to terminate, suspend or
modify any Governmental Permit and the Companies and the Subsidiaries are in
material compliance with the terms and conditions of all Governmental Permits
and with other applicable requirements of all Governmental Authorities relating
to the Governmental Permits, including all requirements for notification,
filing, reporting, posting and maintenance of logs and records, save for the
topics mentioned in Exhibit 2.7.2.
2.7.3. Without limiting the generality of the foregoing: (a) the operation
of each Company Business and each System has been, and is, in material
compliance with the rules and regulations of the Argentine Republic, (b)
Companies and Subsidiaries have made all filings required to be made with the
Governmental Authorities; (c) Companies and Subsidiaries have provided all
notices to subscribers and maintained all public files required under Argentine
Law; (d) each System is in material compliance with all signal leakage criteria
prescribed by the Argentine regulations; and (e) the Company and the
Subsidiaries have filed for or have completed authorizations to carry all
signals it carries and all authorizations needed to utilize the frequency on
which these signals are carried.
SECTION 2.8. Patents. Trademarks and Copyrights. Companies and the
-----------------------------------
Subsidiaries have timely and accurately made all requisite filings and payments
with the Register of Copyrights and are otherwise in material compliance with
all applicable rules and regulations of the Copyright Office. Stockholders have
delivered to Buyers complete and correct copies of all current reports and
filings, and all reports and filings for the past five years, made or filed
pursuant to copyright rules and regulations with respect to each Company
Business. Each Company and each Subsidiary has collected and paid to the
appropriate Governmental Authority all withholding taxes payable on fees and/or
royalties paid to non-resident suppliers and licensors. Companies and the
Subsidiaries do not
possess any patent, patent right, trademark or copyright except for licenses
respecting program material and obligations applicable to cable television
systems generally. The operation of the Company Business as currently conducted
does not violate or infringe upon the rights of any Person in any copyright,
trademark, service xxxx, patent, license, trade secret or the like. A detail of
existing trademarks registered in each Companies and the Subsidiaries' name is
included under Exhibit 2.8. Stockholders and Buyers expressly acknowledge that
the "Cablevision" trademark, and any and all other Cablevision related
trademarks, are not included in the Assets and that therefor the use of said
trademarks, after the expiration of the term referred to in Section 1.7.1.A,
will be entirely dependant on the eventual agreements which may be reached with
their owners. Therefore, to this respect Stockholders give no representation or
warranty in relation to eventual future use of said trademarks.
SECTION 2.9. Financial Statements. Stockholders will and shall cause the
--------------------
Companies and the Subsidiaries to cooperate fully with Buyers in the production
of financial statements, and with the production of all financial statements and
related information required in connection with Buyers' reporting obligations to
the SEC.
SECTION 2.10
2.10.1 Balance Sheet: Stockholders have furnished to Buyers copies of the
-------------
Balance Sheets of Cablevision S.A., Construred S.A., and Univent's S.A. which
are true, correct and complete in all material effects, have been prepared in
accordance with GAAP consistently applied throughout the periods covered thereby
and fairly present the financial conditions of the Companies and the
Subsidiaries, the consolidated financial conditions of the Companies and the
Subsidiaries and the results of their operations as of the date thereof or
throughout the periods covered thereby.
Since Balance Sheet Date (i) each Company and each Subsidiary has been
operated only in the ordinary course, (ii) neither the Companies nor the
Subsidiaries has sold or disposed of any Assets other than in the ordinary
course of business, (iii) there has been no material adverse change in, and no
event has occurred which is likely, individually or in the aggregate, to result
in any material adverse change in, the business, operations, Assets, prospects
or condition (financial or otherwise) of Company or Subsidiary, other than
changes affecting the cable television industry generally. Between the Balance
Sheet Date and the Closing, there have not been modifications to the Balance
Sheet other than in the ordinary course of business, given the current
competitive climate in the Argentine cable market. Buyers agree that Cablevision
S.A.'s purchase of Televisora La Plata S.A. (and of
any participation in any of the other Companies and the Subsidiaries) was done
in the ordinary course of the Company Business.
2.10.2 Undisclosed liabilites: There are no liabilities (whether direct,
----------------------
absolute, accrued, contingent, disputed or otherwise) of any of the Companies
nor of any of the Subsidiaries, other than liabilities (i) reflected or reserved
against, under GAAP if pertinent, on the Balance Sheet of Cablevision S.A.,
Univent's S.A. and Construred S.A. delivered to Buyers or, (ii) incurred since
the Balance Sheet Date in the ordinary course of the business and under normal
market prices and conditions, consistent with the past practice of the Companies
and the Subsidiaries and which do not, and could not have a material adverse
effect on each of the Companies or the Subsidiaries.
Stockholders represent that all Current Assets and Liabilities as of June
30, 1997 have been adequately reported and accounted for and that there is no
Net Debt, disclosed or undisclosed, for which reasonable provision have not been
accounted pursuant to GAAP, if pertinent.
SECTION 2.11. Company Contracts Except as disclosed in Exhibit 2.11,
-----------------
neither the Company nor any of the Subsidiaries has any contract that: (i) have
not been entered in the ordinary course of business and under normal market
conditions; or (ii) for a term of more than two (2) years that can not be
terminated without a reasonable notice or with a reasonable indemnification; or
(iii) between the Company or the Subsidiaries on the one hand, and Xxxxxxx
Xxxxxxxxx, any of the Stockholders, or (in the case of TINTA, to the best of its
knowledge) any Affiliate of Xxxxxxx Xxxxxxxxx or any of the Stockholders.
SECTION 2.12. Legal Proceedings. Except as set forth on Exhibit 2.12
-----------------
there is no judgment or order outstanding, or any action, suit, complaint,
proceeding or investigation by or before any Governmental Authority or any
arbitration pending, or to Stockholders' best knowledge, threatened, involving
or affecting all or any part of any Company Business or any Company or any
Subsidiary.
SECTION 2.13. Tax Returns: Other Reports. Every Company and every
--------------------------
Subsidiary has duly and timely filed in proper form all income, franchise,
sales, use, property, excise, payroll and other tax returns and all other
reports (whether or not relating to taxes) required to be filed with the
appropriate Governmental Authority. All taxes, fees and assessments of whatever
nature due and payable by every Company and every Subsidiary have been paid,
except such amounts as are
being contested diligently and in good faith and are not in the aggregate
material. Each Company and each Subsidiary has filed all tax returns and other
documents necessary and is eligible to receive the tax treatment it has
requested under tax amnesty plans. There are no outstanding agreements or
waivers extending the statutory period of limitations applicable to any federal,
state, local or foreign income tax return for any period.
SECTION 2.14. Employment Matters.
------------------
2.14.1. Each Company and each Subsidiary has complied in all material
respects with all Legal Requirements relating to the employment of labor,
continuation coverage requirements with respect to group health plans, and those
relating to wages, hours, collective bargaining, unemployment compensation,
worker's compensation, equal employment opportunity and benefit plans, age and
disability discrimination, immigration control and the payment and withholding
of taxes.
2.14.2. Except as provided in Exhibit 2.14.2 no Company nor any Subsidiary
is bound by any contract with any labor organization. No other union or other
collective bargaining unit been certified as representing any of its employees,
neither the Companies nor the Subsidiaries have received any other requests from
any party for recognition as a representative of employees for collective
bargaining purposes.
SECTION 2.15. Finders and Brokers. Stockholders have not employed any
-------------------
financial advisor, broker or finder or incurred any liability for any financial
advisory, brokerage, finder's or similar fee or commission in connection with
the transactions contemplated by this Agreement for which Buyers, the Companies
or the Subsidiaries could be liable.
SECTION 2.16. Disclosure. No representation or warranty by Stockholders in
----------
this Agreement or in any Exhibit to this Agreement, or any statement, list or
certificate furnished or to be furnished by Stockholders in relation to the
Companies or the Subsidiaries pursuant to this Agreement, contains or will
contain any untrue statement of material fact, or omits or will omit to state a
material fact required to be stated therein or necessary to make the statements
contained therein not misleading in light of the circumstances in which made.
Without limiting the generality of the foregoing, the information set forth
herein concerning each Company Business is accurate and complete in all material
respects.
SECTION 2.17. Televisora La Plata S.A. Since this Subsidiary was acquired
------------------------
recently (August 1, 1997), Stockholders cannot make any representation or
warranties with respect to it. However, Cablevision S.A. received from sellers
of such System representations and warranties equivalent to the ones provided
herein.
SECTION 2.18. The Shares and the Subscribed Shares at Closing will
constitute the 64.5 % of the outstanding capital stock of each of the Companies.
Neither Stockholders nor any of the Companies has any obligation to issue shares
corresponding to capital contributions pending to be capitalized, except for
those indicated in Exhibit 2.18. which are hereby transferred to Buyers in
corresponding proportion.
SECTION 2.19 Neither Cablevision S.A. nor any of the Companies has any
obligation to pay any amount to Televisora La Plata S.A. related to the capital
increase approved by the Extraordinary Shareholders Meeting celebrated on July
13, 1997.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYERS
----------------------------------------
Buyers represent and warrant to the Stockholders that:
SECTION 3.1 Organization, Power and Authority. Buyers are corporations
---------------------------------
duly organized, validly existing and in good standing under the laws of their
countries of incorporation and have the sufficient legal power and authority to
own or lease and to operate their properties and to carry on their businesses as
now being conducted.
SECTION 3.2 Authorization. Buyers have the corporate power and
-------------
authority to execute and deliver this Agreement, to consummate the transactions
contemplated hereby and to perform their obligations under this Agreement, at
their sole discretion, their being lawfully entitled to participate in the
transaction described herein. This Agreement, upon its execution and delivery by
Buyers (assuming the due authorization, execution and delivery hereof by the
Stockholders), will constitute the legal, valid and binding obligation of
Buyers, enforceable against Buyers in accordance with its terms, and the rules
of law of the country and/or State to which this Agreement is submitted as per
Section 8.12 hereunder.
SECTION 3.3 No Conflict or Violation. Neither the execution and
------------------------
delivery of this Agreement by Buyers nor the consummation of the transactions
contemplated hereby, will (a) violate any provision of the Articles of
Incorporation of Buyers, (b) violate, conflict with or result in the breach or
termination of, or otherwise give any other contracting party the right to
terminate, or constitute a default under the terms of, any mortgage, bond,
indenture or material agreement to which Buyers are parties or by which Buyers
or any of their property or assets may be bound or materially affected, or (c)
violate any judgment, order, injunction, decree or award of any court,
administrative agency or governmental body against, or binding upon, Buyers or
upon the property or business of Buyers.
SECTION 3.4. Brokers' Fees. No broker, finder or similar agent has been
-------------
employed by or on behalf of Buyers in connection with this Agreement or the
transactions contemplated hereby, and no person or entity with which Buyers have
had any dealings or communications of any kind is entitled to any brokerage
commission, finder's fee or any similar compensation in connection with this
Agreement or the transactions contemplated hereby, for which Companies and the
Subsidiaries could be liable.
SECTION 3.5. Disclosure. No representation or warranty by Buyers in this
----------
Agreement, or any statement, list or certificate furnished or to be furnished by
Buyers pursuant to this Agreement, contains or will contain any untrue statement
of material fact, or omits or will omit to state a material fact required to be
stated therein or necessary to make the statements contained therein not
misleading in light of the circumstances in which made.
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1 The following conditions precedent must be satisfied before any
party is obligated to close the transactions contemplated herein:
4.1.1 Stockholders shall provide to Buyers evidence satisfactory to Buyers
that either: (i) Stockholders have complied with all actions to give US West
Media Group Inc. ("US West") and Xxxxxx Xxxxxxxx the options contemplated in the
First Refusal/Tag Along Agreement executed between TINTA and US West on July
1997 (The "US West Agreement") and that the term for US West exercising such
options
has expired without US West having exercised any such options; or (ii) US West
has waived the right to exercise such options.
4.1.2. Stockholders should have reciprocally waived their respective right
of first refusal to acquire the Shares.
4.1.3 Stockholders should have transferred to any of the Subsidiaries their
respective ownership of shares in Televisora Belgrano S.A., Fiber-Tel TCI2 S.A
and Oeste Cable Color S.A.
ARTICLE V
MISCELLANEOUS
-------------
SECTION 5.1 Survival of Representations, Warranties and Agreements. The
------------------------------------------------------
representations and warranties of Stockholders in this Agreement and in the
documents and instruments to be delivered by Stockholders pursuant to this
Agreement will survive until the third anniversary of the Closing Date, except
that (a) all such representations and warranties with respect to any federal,
state or local taxes, labor, social contributions, governmental authorizations,
employee benefits and tort and contract claims will survive until 180 days after
the expiration of the applicable statute of limitations (including any
extensions). The representations and warranties of Buyers in this Agreement and
in the documents and instruments to be delivered by Buyer pursuant to this
Agreement will survive until the third anniversary of the Closing Date. The
periods of survival of the representations and warranties prescribed by this
Section are referred to as the "Survival Period". The liabilities of the
parties under their respective representations and warranties will expire as of
the expiration of the applicable Survival Period; provided, however, that such
expiration will not include, extend or apply to any representation or warranty,
the breach of which has been asserted by Buyers in a written notice to
Stockholders before such expiration or about which Stockholders have given
Buyers written notice before such expiration indicating that facts or conditions
which exist or that, with the passage of time or otherwise, can reasonably be
expected to result in a breach.
SECTION 5.2 Indemnification by Stockholders. (a) Stockholders will jointly
-------------------------------
and severally indemnify and/or defend and/or hold harmless Buyers, their
successors and assigns, from and against:
(i) all losses, damages, liabilities, deficiencies or obligations of or to
any Company (including, without limitation, any undisclosed or under reserved,
contingent liabilities, referred to in Section 2.10.2), Buyers or any such other
indemnified person resulting from or arising out of (A) any material
misrepresentation or breach of warranty or any material non-performance or
breach of any representation contained in this Agreement or any additional
agreements; (B) the ownership of the Shares, the ownership or operation of each
Company Assets, or the control, management or operations of each Company
Business, whether known or unknown, asserted or unasserted, now existing or
arising at any time including, without limitation, fines or forfeitures imposed
or threatened to be imposed by any authority for any operation of any Company
Business at or prior to the Closing Date which was not in material compliance
with applicable rules, or for any operation at or prior to the Closing Date of
any facility used in conjunction with the operation of any Company Business
which was not in material compliance with said rules and any future, additional
assessment imposed on Buyer or any Company or Subsidiary after the Closing Date
by the Copyright Tribunal, the liability for which occurred prior to the Closing
Date, but excluding any liabilities described in this Agreement; and
(ii) all claims, actions, suits, proceedings, demands, judgments, assessments,
fines, interest, penalties, costs and expenses (including, agreed to settlement
costs and reasonable legal, accounting, experts' and other fees, costs and
expenses) incident or relating to or resulting from any of the foregoing.
No amounts of indemnity shall be payable under this paragraph (a) as a result
of undisclosed or under reserved contingent liabilities referred to in Section
2.10.2, until and unless the amount of indemnification payable to Buyers
hereunder (either individually or in the aggregate) exceeds two million United
States Dollars (US$ 2,000,000). Any and all excess over such amount will make
Stockholders liable for all amounts payable under this paragraph (including the
US$ 2,000,000 referred to hereabove). The maximum aggregate amount of indemnity
payable by Stockholders as a result of undisclosed or under reserved contingent
liabilities referred to in Section 2.10.2, shall be fifteen million United
States Dollars (US$ 15,000,000).
(b) Stockholders will jointly and severally indemnify and/or defend and/or
hold harmless Buyers, their successors and assigns, from and against all losses,
damages, liabilities, deficiencies or obligations of or to any Company, Buyers
or any such other indemnified person resulting from or arising out any claims,
including courts costs and attorneys fees, made by employees of Construred S.A.
for any injuries or damages suffered prior to the Closing Date. Notwithstanding
the foregoing, such indemnity obligation shall not extend to any claim by any
employee of any of the Companies or Subsidiaries based on any -on -the- job
illness or disease to be indemnified by the employer which has originated prior
to the Closing Date if such
claim is made by an employee whose employment has been terminated by such
Company or Subsidiary after the Closing Date with or without legitimate cause.
All other claims and monies payable will be faced exclusively by the pertinent
employer.
5.2.A Guaranty. Xxxxxxx Xxxxxxxxx hereby irrevocably and unconditionally
--------
guarantees to the Buyers as a principal obligor, not merely a surety, the
perfomance by Xxxxxxx Jaliquias and Xxxxxxx Xxxxx of their obligations under
this Agreement.
SECTION 5.3 Indemnification by Buyers. Buyers agree, jointly and severally,
-------------------------
to indemnify, defend and hold harmless Stockholders, their successors and
assigns, from and against all losses, damages and expenses (including, agreed
to, settlement costs and reasonable legal or other expenses) incurred by
Stockholders or any other indemnified person in connection with any
misrepresentation or breach of any warranty made by Buyers in this Agreement or
the non-performance or breach of any representation, agreement or obligation of
Buyers contained in this Agreement.
SECTION 5.3.1 Buyers hereby represent that the Multicanal Stockholders
Agreement of February 20, 1996 was rescinded by the parties and that the "Clarin
Stockholders" do not have any right to any claim arising to such agreement.
Notwithstanding the foregoing, Buyers agree to indemnify and hold Stockholders
harmless from all claims or monies payable by Stockholders and/or Company
(including reasonable attorneys fees) arising from the breach of said certain
Multicanal S.A. stockholders agreement dated February 20, 1996 to which CEI and
XXXX were part of or the Clarin Compromise (as definedin the Stockholders
Agreement) save, in case of the latter, if TINTA's agreement in the Stockholders
Agreement regarding the Clarin Compromise is breached by TINTA. Buyers represent
that they have no other commitments with the Persons included in Section 7.2 (f)
of the shareholders agreement other than the ones stated hereabove. Any
indemnification in this regard will be paid on an "as incurred" basis.
SECTION 5.4 Third Party Claims. Promptly after the receipt by any party hereto
------------------
of notice of any claim, action, suit or proceeding (other than a claim, action,
suit or proceeding against any of the Companies or the Subsidiaries) by any
person who is not a party to this Agreement (collectively, an "Action") which is
subject to indemnification hereunder, such party (the "Indemnified Party") shall
give reasonable written notice to the party from whom indemnification is claimed
(the "Indemnifying Party"). At the sole expense and liability of the
Indemnifying Party and within a reasonable time after the giving of such notice
by the Indemnified Party, the Indemnifying Party shall: (i) admit or decline in
writing to the Indemnified Party, the Indemnifying Party's liability to the
Indemnified Party for
such Action, (ii) notify the Indemnified Party in writing of the Indemnifying
Party's intention to assume the defense thereof, (iii) post an indemnity or
similar bond (in form and substance satisfactory to the Indemnified Party), in
both cases for the full amount (including interest and penalties) for which the
Indemnified Party may be liable as a result of such Action or provide other
evidence satisfactory to the Indemnified Party of the Indemnifying Party's
ability to pay such amount in full, and (iv) retain legal counsel reasonably
satisfactory to the Indemnified Party to conduct the defense of such Action. The
Indemnified Party and the Indemnifying Party shall cooperate with the party
assuming the defense, in defending, compromising or settling any such Action in
any manner that such party reasonably may request. If the Indemnifying Party so
assumes the defense of any such Action, the Indemnified Party shall have the
right to employ separate counsel and to participate in (but not control) the
defense, compromise or settlement thereof, but the fees and expenses of such
counsel shall be to the expense of the Indemnified Party. No Indemnified Party
shall settle or compromise any such Action for which it is entitled to
indemnification hereunder without the prior written consent of the Indemnifying
Party, unless the Indemnifying Party shall have failed, after reasonable notice
thereof, to undertake control of such Action in the manner provided above in
this Section. No Indemnifying Party shall settle or compromise any such Action
in which any relief other than the payment of money damages is sought against
any Indemnified Party unless the Indemnified Party consents in writing to such
compromise or settlement.
SECTION 5.5 Assignment: Successors and Assigns; Third Parties. No party to
-------------------------------------------------
this Agreement shall convey, assign or otherwise transfer any of its rights or
obligations under this Agreement without the express written consent of the
other parties.
SECTION 5.6 Notices. All notices or other communications required or
-------
permitted to be given hereunder shall be in writing and shall be delivered by
hand (acknowledgment of receipt requested) or through a notary public, or sent
by facsimile, telegram or registered mail (carta documento) and shall be deemed
given when so delivered by hand or through a notary, or if faxed, telegraphed or
mailed when so delivered. Said notices and communications must be addressed as
follows:
If to TINTA, addressed to: If to EE, addressed to:
Tele-Communications International, Inc. Xx. Xxxxxxx Xxxxxxxxx
0000 XXX Xxxxxxx Xxxxxxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000, X.X.X. (1414) Capital Federal
Attention: President Republica Argentina
Telephone: (0 000) 000 0000 Telephone: (00 0) 000 0000
Telecopier: (0 000) 000 0000 Telecopier: (00 0) 000 0000
with a copy to: with a copy to:
Tele-Communications International, Inc. Xx. Xxxxxxx Xxxxxx
0000 XXX Xxxxxxx Honduras 5663
Xxxxxxxxx, Xxxxxxxx 00000, X.X.X. (1414) Capital Federal
Attention: General Counsel Republica Argentina
Telephone: (0 000) 000 0000 Telephone: (00 0) 000 0000
Telecopier: (0 000) 000 0000 Telecopier: (00 0) 000 0000
and to:
M & M BOMCHIL - Abogados
Xxxxxxxx 000, 00xx xxxxx
0000 - Xxxxxx Xxxxx, Xxxxxxxxx
Attention: Xx. Xxxxxxx X. Xxxxxx
Telephone: 000 0000
Fax: 000 0000
If to CEI, addressed to:
CEI Citicorp Holdings S.A.
Tucuman 0, 00xx xxxxx
0000 Xxxxxx Xxxxx
Xxxxxxxxx: Legal Department
Telephone: (000) 000 0000
Fax: (000) 000 0000
If to XXXX, addressed to:
T.I. Telefonica Internacional de Espana S.A.
Xxxxx Xxxxxxxx 00
00000 Xxxxxx, Xxxxx
Attention: General Secretary
Telephone: (000) 000 0000
Fax: (000) 000 0000
with a copy to:
Estudio de los Dres. O'Farrell
Xxxx. Xx Xxxx 000, 0xx xxxxx
0000 Xxxxxx Xxxxx, Xxxxxxxxx
Attention: Pablo Xxxxxx Xxxxxxx
Telephone: (000) 000 0000
Fax: (000) 000 0000 extension 4999
or in any case to such other address or addresses as hereafter shall be
furnished as provided in this Section 5.6 by any of the parties hereto to each
of the other parties hereto.
SECTION 5.7 Waiver: Remedies. No delay on the part of Buyers, on the one
----------------
hand, or the Stockholders on the other, in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any waiver on
the part of Buyers or the Stockholders of any right, power or privilege
hereunder operate as a waiver of any other right, power or privilege hereunder,
nor shall any single or partial exercise of any right, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder. Upon any default by the Buyers, on
the one hand, or any of the Stockholders, on the other hand, the Buyers or any
such Stockholder, as the case may be, may proceed to protect his or its rights
by suit in equity, action at law or other appropriate proceedings, whether for
the specific performance of any covenant or agreement contained in this
Agreement or to enforce any and all other legal or equitable rights.
SECTION 5.8 Entire Agreement. This Agreement, including the Exhibits
----------------
attached hereto, constitute the entire agreement among the parties hereto with
respect to the subject matter hereof and supersede all other prior agreements or
understandings of the parties relating thereto. There are no representations,
warranties, agreements or undertakings of any party hereto with respect to the
transactions contemplated by this Agreement other than those set forth in this
Agreement or in the documents delivered at the Closing. All Exhibits annexed
hereto, are hereby incorporated in and made a part of this Agreement as if set
forth in full herein.
Exhibit A Companies Stock
Exhibit B Shares
Exhibit C Stockholders Agreement
Exhibit 1.4. (ii) Management Agreement
Exhibit 1.7.1 (A) Resignations
Exhibit 2.5 Leased Equipment
Exhibit 2.6.1 Real Estate
Exhibit 2.6.2 Agreements under Renegotiation
Exhibit 2.7 Claims at Municipalities
Exhibit 2.8 Trademarks
Exhibit 2.11 Company Contracts
Exhibit 2.12 Legal Proceedings
Exhibit 2.18 Capital Contributions Pending to be Capitalized
SECTION 5.9 Amendments; Waivers. This Agreement may be modified or amended
-------------------
only by a written agreement signed by Buyers and Stockholders. Provisions
hereof may be waived, and other actions permitted hereunder or contemplated
hereby may be taken, in the case of Buyers, by an instrument signed by Buyers,
and in the case of the Stockholders, by an instrument signed by Stockholders.
SECTION 5.10 Further Assurances. Stockholders shall, at the request of
------------------
Buyers, at any time and from time to time following the Closing hereunder,
execute and deliver to Buyers all such further instruments and take all such
further action as may be reasonably necessary or appropriate in order more
effectively to sell, assign, transfer and convey to Buyers, or to perfect or
record Buyers' title to or interest in, the Shares sold hereunder. Buyers shall
at any time and from time to time following the Closing hereunder execute and
deliver to the Stockholders, all such further instruments and take all such
further action as may reasonably be necessary or appropriate in order more
effectively to confirm or carry out the provisions of this Agreement. The
parties hereto shall use their best efforts to consummate the transactions
contemplated by this Agreement.
SECTION 5.11 Counterparts. This Agreement may be executed in counterparts,
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each of which shall be deemed an original but all of which together shall
constitute a single instrument.
SECTION 5.12 Governing Law: Choice of Forum. This Agreement shall be
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governed by and construed in accordance with the laws of the Republic of
Argentina.
SECTION 5.13 Submission to Arbitration. The parties will use their best
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efforts to resolve amicably any disputes arising under this Agreement, or those
contained in its Exhibits or schedules. Except as otherwise expressly provided
herein, all disputes arising between the parties under this Agreement which
cannot be resolved amicably shall be resolved by submission to arbitration
pursuant to the Rules of the Inter-American Commission on International
Commercial Arbitration then in force. The arbitration shall be held in Geneva,
Switzerland. There shall be three arbitrators, one selected by the Stockholder,
one selected by the Buyer and the third selected by mutual agreement of the
parties, and failing their agreement, pursuant to the Rules of the Commission.
None of the arbitrators shall be citizens of the U.S.A. or the Republic of
Argentina. The arbitration shall be conducted in the English and Spanish
languages. The arbitrators shall decide the case on the basis of Argentine law,
and shall give written reasons for their award. The party in whose favour an
award is issued shall be entitled to recover its costs or the arbitration, and
any costs incurred in the enforcement of the award, including reasonable
attorney's fees. The award of the arbitrators may be enforced in any
jurisdiction where a party has assets or may be found, and the parties hereby
irrevocably waive, to the fullest extent permitted by law, any defenses to
recognition and enforcement of the award on the grounds of the invalidity of the
submission to arbitration, and improper constitution of the arbitral panel (if
constituted pursuant to this Section).
SECTION 5.14 Disclosure. This Agreement does not contain any untrue statement
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nor omit to state a material fact necessary to make the statements contained
herein not misleading. There is no fact known to Stockholders which materially
and adversely affects, or which in the future may so affect, the Shares which
has not been set forth in this Agreement.
SECTION 5.15 Captions. All section titles or captions contained in this
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Agreement, in any Exhibits annexed hereto and the table of contents to this
Agreement are for convenience only, and shall not be deemed a part of this
Agreement and shall not affect the meaning or interpretation of this Agreement.
All
references herein to numbered sections, except otherwise indicated, are to
sections of this Agreement.
SECTION 5.17. This Agreement is executed in English. Prior to Closing, the
parties in good faith will execute an Spanish version, and once executed the
Spanish version shall prevail.
SECTION 5.18. The Stockholders and Buyers will execute those documents which
may be necessary for the best implementation of the agreements contained herein.
SECTION 5.19. (a) The parties agree that the transactions contemplated in this
Agreement and those to be carried out at Closing are made "ad referendum" of the
corresponding COMFER Approval. Notwithstanding said approval pending the
execution and undertanking of the obligations mentioned in this Agreement is
considered to be defintive between the parties. Should COMFER object Buyers
incorporation to the Company for reasons attributable to Buyers, and without
prejudice of carrying out administrative and/or judicial procedures which may be
pertinent, in the relation between the parties, the Buyers will be considered as
having acted on behalf of one or various third parties, whose names are pending
disclosure and who must count with pertinent COMFER Approval. The parties will
carry out the best efforts to obtain COMFER Approval for the incorporation of
the Buyers or their eventual assignees.
(b) Until COMFER Approval for the incorporation of Buyers or their assignees
is obtained, the internal corporate relation will recognize Buyers' rights as
herein described.
SECTION 5.20. (a) Termination. Anything herein to the contrary
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notwithstanding, this Agreement may be terminated and the transactions
contemplated hereby abandoned at any time prior to the Closing Date (a) by
mutual written consent of Buyers and Stockholders or (b) by any of the parties
if any of the conditions precedent to Closing set forth in Article IV of this
Agreement have not been met on the Closing Date and Buyers are not in default of
their obligations hereunder, or (c) by Stockholders if US West exercises the
first refusal option under the US West Agreement (as defined in Section 4.1.1).
Termination under points (b) and (c) of the immediately preceding sentence shall
be effective when a notice of termination is deemed to have been given pursuant
Section 5.6 hereof by the party
or parties giving such notice to the other party or parties to whom such notice
is directed.
(b) Effects of Termination. If this Agreement is terminated as provided in
----------------------
paragraph (a) hereabove and the transactions contemplated hereby are not
consummated, this Agreement shall have no further force and effect and
Stockholders shall immidiatelly return to Buyers the amounts paid on July 25,
1997 referred to in Section 1.2, except if termination is caused by, or
attibutable to Buyers.
SECTION 5.21. The parties agree that this Agreement and its Exhibits may be
subject to minor adjustments that before Closing may be requested in good faith
by any of the parties.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the day and year first above written.
1) Stockholders:
Tele-Communications International, Inc.
By: Xx. Xxxx X. Xxxxxx
Chief Executive Officer
and
By: Xxxxxxx Xxxxxxxxx
on behalf of
Xxxxxxx Xxxxx and
Xxxxxxx Jaliquias
2) Buyers:
CEI CitiCorp Holdings S.A.
By: Xx. Xxxxxxx Xxxxxxx
Chairman.
and
T.I. Telefonica Internacional de Espana S.A.
By:
Attorney in fact
