EXHIBIT 10.27A
DATED 17 JULY 1997
MOTOROLA INTERNATIONAL DEVELOPMENT CORPORATION
AND
INTERNATIONAL WIRELESS COMMUNICATIONS PAKISTAN LIMITED
____________________________________________________________
SHARE PURCHASE AGREEMENT
____________________________________________________________
Ref: H53/30657093
INDEX
CLAUSE HEADING PAGE
------ ------- ----
1. Definitions 1
2. Purchase and Sale of the Sale Shares 5
3. Representations, Warranties and Undertakings Concerning
the Transaction 6
4. Representations and Warranties Concerning the Company 9
5. Further Provisions relating to the Seller's Representations
and Warranties 16
6. Pre-Closing Covenants 17
7. Post-Closing Covenants 19
8. Conditions to Xxxxxxxxxx xx Xxxxx 00
0. First Option and Second Option 22
10. Remedies for Breach of this Agreement 23
11. Undertaking of Seller 26
12. Termination 27
13. Arbitration 29
14. Miscellaneous 29
SCHEDULES
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A: Tangible assets
B: Financial statements
C: Immovable property
D: Leased or sub-leased immovable property
E: Material contracts
F: Litigation
G: Licence
EXHIBIT
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A - Restated and Amended Shareholders Agreement
SHARE PURCHASE AGREEMENT
Agreement entered into on 17 July, 1997, by and among Motorola International
Development Corporation, a Delaware corporation ("Seller"), and International
Wireless Communications Pakistan Limited, a company established under the laws
of Mauritius (the "Buyer"). Buyer and Seller are referred to collectively
herein as the "Parties".
RECITALS
Pakistan Mobile Communications (Pvt) Ltd. is a limited liability company
organised under the laws of Pakistan (the "Company") with an authorised share
capital of Rupees 600,000,000 divided into 60,000,000 shares of Rupees 10 each
("Shares"), of which 54,387,750 Shares have been issued and are fully paid up.
The Company owns and operates a cellular mobile telephone company in Pakistan
under the service xxxx Mobilink/a Motorola Network.
Seller owns 40,248,036 Shares and pursuant to the terms and conditions of this
Agreement:-
(i) Seller desires to sell, and Buyer desires to purchase 17,028,804 of
such Shares representing 31.31% of the total issued Shares (the "Sale
Shares"); and
(ii) Seller intends to grant an exclusive option ("First Option"),
exercisable on one occasion only at any time during the period
commencing on the date hereof and ending on (and including) 5:00 p.m.
Hong Kong time on 25th August, 1997 or, if clause 11 shall apply,
such later date as provided therein ("First Option Period"), to Buyer
to purchase Shares representing a further 12.69% of the total issued
Shares on the date on which the First Option is exercised (the "First
Option Shares"). In the event that the First Option is not exercised
prior to the expiry of the First Option Period, an exclusive option
("Second Option") is granted by the Seller to Buyer to purchase
Shares representing 5% of the total issued Shares on the date on
which the Second Option is exercised ("Second Option Shares").
Contemporaneously herewith, Buyer is negotiating the purchase of an additional
14.69% of the Shares, such percentage representing all of the interest in the
Company held by Continental Communications Limited ("CCL").
Now, therefore, in consideration of the mutual agreements, representations,
warranties, and covenants herein contained, the Parties agree as follows:
1. DEFINITIONS
1
"Active Subscribers" has the meaning set forth in clause
4(aa);
"Adverse Consequences" means all actions, suits,
proceedings, hearings,
investigations, charges, complaints,
claims, demands, injunctions,
judgments, orders, decrees, rulings,
damages, dues, penalties, fines,
costs, reasonable amounts paid in
settlement, liabilities, obligations,
taxes, liens, losses, expenses, and
fees, including court costs and
lawyers' and advocates' fees and
expenses.
"Affiliated Entity" means any Person with respect to
which a specified Person owns a
majority of the common stock or
equity interests or has the power to
vote or direct the voting of
sufficient securities to elect a
majority of the board of directors or
similar governing body of such Person.
"Applicable Laws" has the meaning set forth in clause
4(i).
"Buyer" has the meaning set forth in the
preface above.
"Closing" has the meaning set forth in clause
2(c).
"Closing Date" means the day on which the Closing
shall take place.
"Company" has the meaning set forth in the
recitals.
"Condition of the Company" means the property, condition
(financial or otherwise) business or
operations of the Company.
"Confidential Information" means any information concerning the
businesses and affairs of the Company
that is not already generally available
to the public.
"Disclosure Letter" means the letter from Seller to Buyer
delivered immediately prior to the
execution of this Agreement by the
Parties.
2
"Financial Statements" has the meaning set forth in clause
4(h).
"First Option" has the meaning set forth in the
recitals.
"First Option Closing" has the meaning set forth in clause
9(d).
"First Option Closing Date" means the day on which the First Option
Closing takes place.
"First Option Period" has the meaning set forth in the
recitals.
"First Option Purchase Price" means the sum of US$13,959,000.
"First Option Shares" has the meaning set forth in the
recitals.
"GOP" means the Government of Pakistan and
any agency, department and/or
instrumentality thereof.
"Liabilities" has the meaning set forth in clause
4(s).
"LIBOR" means, in relation to any relevant
time and any relevant period of one
month or more, the rate per annum
quoted at or about 11:00 a.m. (London
time) on the first day of such
period, on the page "LIBO" of the
Reuters Monitor Money Rates Service
(or such other page as may replace
the "LIBO" page for the purpose of
displaying London interbank offered
rates of leading reference banks) as
being the interest rates offered in
the London interbank market for
United States dollar deposits for the
same period as that period.
"Licence" means the licence grant from the
Ministry of Communications of the
Government of Pakistan issued on 6th
July, 1992, as amended on 27th October,
1993, pursuant to which the Company
operates a cellular mobile telephone
system in Pakistan.
3
"MINC" means Motorola, Inc., the parent
company of Seller.
"Most Recent Financial has the meaning set forth in clause
Statements" 4(h).
"Most Recent Fiscal Month has the meaning set forth in clause
End" 4(h).
"Net Deficit" means the amount by which the
liabilities of the Company exceed its
assets.
"Sale Shares" has the meaning set forth in the
recitals.
"Second Option" has the meaning set forth in the
recitals.
"Second Option Closing" has the meaning set forth in clause
9(e).
"Second Option Closing Date" means the day on which the Second Option
Closing takes place.
"Second Option Period" has the meaning set forth in clause
9(e).
"Second Option Purchase Price" means the sum of US$5,500,000 plus
interest at a rate of 10% per annum,
compounded monthly, on such aggregate
amount from the date on which the
Second Option is exercised to the
date of actual payment.
"Second Option Shares" has the meaning set forth in the
recitals.
"Seller" has the meaning set forth in the
preface above.
"Party" has the meaning set forth in the
preface above.
"Person" means an individual, a partnership, a
corporation, an association, a joint
stock company, a trust, a joint
venture, an unincorporated
organisation, or other entity,
including but not limited to, a
governmental entity (or any
department, agency, or political
subdivision thereof).
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"Purchase Price" has the meaning set forth in clause
2(b).
"Saif" means Saif Telecom (Pvt) Limited, a
Pakistan company and the direct owner
of 11.31% of the Shares.
"Sale Shares" has the meaning set forth in the
recitals.
"Seller" has the meaning set forth in the
preface above.
"Shareholders' Agreement" means the Shareholders' Agreement
between the Seller and Saif executed
on 3rd June, 1993 as amended pursuant
to the Equity Ownership Agreement
dated 2nd July 1996 between Seller,
Saif and CCL.
"SBP" means the State Bank of Pakistan.
"Unaudited June Net Deficit" has the meaning set forth in clause
6(f).
2. PURCHASE AND SALE OF THE SALE SHARES
(a) BASIC TRANSACTION
On and subject to the terms and conditions of this Agreement,
Buyer agrees to purchase from Seller, and Seller agrees to sell
to Buyer, the Sale Shares for the consideration specified below
in this clause 2.
(b) PURCHASE PRICE
Buyer shall pay to Seller at the Closing, except as provided
in clause 2(c) below, the aggregate price of thirty four
million four hundred and forty one thousand United States
Dollars (US$34,441,000) in cash by wire transfer in
immediately available funds to Seller's bank account, number
00000000 at Citibank N.A. in New York, New York (the "Purchase
Price").
(c) THE CLOSING
Subject to the provisions of clause 11, the closing of the
sale and purchase of the Sale Shares (the "Closing") shall
take place at the offices of Seller in London, in the United
Kingdom, commencing at 3:00 p.m. local time on or before 14th
August, 1997, contingent upon the Parties being satisfied or
having waived in writing all conditions to the obligations of
the Parties to consummate the transaction contemplated thereby
(other than conditions with respect to actions
5
the respective Parties will take at the Closing itself).
Subject to the provisions of clause 11, the Closing Date may
be extended only by mutual agreement of the Parties.
(d) DELIVERIES AT THE CLOSING
At the Closing, (i) Seller will deliver to Buyer the various
certificates, instruments, and documents referred to in clause
8(a) below, (ii) Buyer will deliver to Seller the various
certificates, instruments, and documents referred to in clause
8(b) below, (iii) Seller will deliver to:- (A) the Buyer the
share certificates totalling 14,853,294 Shares equal to a
27.31% interest in the Company and duly executed instruments
of transfer in respect thereof, and (B) Citibank in New York,
New York as the escrow agent pursuant to the terms of an
escrow agreement in form and substance reasonably acceptable
to the Parties to be entered into between Buyer and Seller
under clause 8(c)(iii), the share certificates totalling
2,175,510 Shares equal to a 4% interest in the Company, in
each case validly issued to Seller and on a fully repatriable
basis and SBP-approved for export out of Pakistan, accompanied
by transfer deeds duly executed on behalf of Seller, the
signatures of whose signatory(ies) are verified by the
Company, and (iv) Buyer will deliver to Seller the
consideration specified in clause 2(b) above.
3. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS CONCERNING THE TRANSACTION
(a) REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS OF SELLER
Seller represents and warrants to Buyer that:
(i) ORGANISATION OF SELLER
Seller is duly organised, validly existing, and in good
standing under the laws of the jurisdiction of its
incorporation.
(ii) AUTHORISATION OF TRANSACTION
Seller has full corporate power and authority to execute
and deliver this Agreement and to perform its obligations
hereunder. This Agreement constitutes the valid and
legally binding obligation of the Seller, enforceable in
accordance with its terms and conditions. There are no
authorizations, consents, or approvals that Seller must
obtain from the GOP, including the SBP, prior to Closing,
in order to consummate the transactions contemplated by
this Agreement.
6
(iii) OWNERSHIP OF SALE SHARES
Seller is the lawful holder of record and beneficial
owner of the Sale Shares, the First Option Shares and
the Second Option Shares, free and clear of any liens,
claims, restrictions on sale and security interests,
and has full legal right to sell, transfer, and convey
the Sale Shares, the First Option Shares and the Second
Option Shares pursuant to this Agreement; the
registration of the Sale Shares and, upon exercise of
the First Option or the Second Option (as the case may
be), the First Option Shares or the Second Option
Shares (as the case may be) in the name of Buyer in the
Company's register of shareholders will transfer good
and valid title thereto, free and clear of any liens,
claims, restrictions and security interests. Seller
further undertakes to Buyer that it shall discharge any
and all capital gains tax or any other taxes or duties
in Pakistan or anywhere in the world which may arise
from Seller's sale of the Sale Shares, the First Option
Shares and the Second Option Shares (as the case may
be) to Buyer pursuant to this Agreement except for
stamp duty on the transfer of the Sale Shares, the
First Option Shares and Second Option Shares, which is
to be paid by Buyer. The Sale Shares, the First Option
Shares and the Second Option Shares are held by Seller
on a fully repatriable basis both as to capital, all
accretions thereto and dividends payable thereon.
(iv) NONCONTRAVENTION
Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions
contemplated hereby, will (A) violate any constitution,
statute, regulation, rule, injunction, judgment, order,
decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which
Seller is subject or any provision of its charter or
bylaws or (B) conflict with, result in a breach of,
constitute a default under, result in the acceleration
of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license,
instrument, or other arrangement to which the Seller is
a party or by which it is bound or to which any of its
assets is subject, except with respect to the
restrictions on transfer of Shares under the
Shareholders' Agreement. Seller has obtained a waiver
from Saif with respect to Clauses 11.4 and 11.5 of the
Shareholders' Agreement, permitting the Parties hereto
to proceed with the transaction contemplated hereunder.
7
(v) BROKERS' FEES
Seller has no liability or obligation to pay any fees or
commissions to any broker, finder, or agent with respect
to the transactions contemplated by this Agreement.
(vi) STATEMENTS COMPLETE AND CORRECT
The statements contained in this clause 3(a) are true,
correct and complete as of the date of this Agreement
and will be true, correct and complete as of the
Closing Date and the First Option Closing Date and, if
applicable, the Second Option Closing Date (as though
made then and as though the Closing Date and, if
applicable, the First Option Closing Date or the
Second Option Closing Date were substituted for the
date of this Agreement throughout this clause 3(a)).
(b) REPRESENTATIONS AND WARRANTIES OF THE BUYER
Buyer represents and warrants to Seller that:
(i) ORGANISATION OF THE BUYER
Buyer is a corporation duly organised, validly
existing, and in good standing under the laws of the
jurisdiction of its incorporation.
(ii) AUTHORISATION OF TRANSACTION
Buyer has full corporate power and authority to execute
and deliver this Agreement and to perform its obligations
hereunder. This Agreement constitutes the valid and
legally binding obligation of the Buyer, enforceable in
accordance with its terms and conditions. Subject to the
provisions of the Licence and to confirmation from Seller
that it obtained the requisite exchange control approval
to the issue of the Sale Shares, the First Option Shares
and the Second Option Shares to itself on a repatriable
basis both as to capital, all accretions thereto and
dividends payable thereon there are no authorisations,
consents, or approvals that Buyer must obtain from the
GOP, including the SBP, prior to Closing, in order to
consummate the transactions contemplated by this
Agreement.
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(iii) FUNDS AVAILABLE
Buyer has, or will have on or prior to the Closing
Date, sufficient cash, available lines of credit or
other sources of immediately available funds to enable
it to make payment of the Purchase Price as well as
meet its pro-rata share of the Company's funding
requirements under the 1997 Business Plan.
(iv) DISCLOSURE
As of the date hereof neither the Buyer nor any of its
Affiliated Entities, directors, employees or agents have
been advised of or have knowledge of facts or
circumstances involving the Condition of the Company that
demonstrate an existing material misrepresentation by
Seller pursuant to this Agreement that would give rise to
an ability by Buyer to terminate this Agreement or to a
claim for indemnification pursuant to clause 10(b)(i).
(v) NONCONTRAVENTION
Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions
contemplated hereby, will (A) violate any constitution,
statute, regulation, rule, injunction, judgment, order,
decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which
Buyer is subject or any provision of its charter or
by-laws or (B) conflict with, result in a breach of,
constitute a default under, result in the acceleration
of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, licence,
instrument, or other arrangement to which the Buyer is
a party or by which it is bound or to which any of its
assets is subject.
(vi) BROKERS' FEES
The Buyer has no liability or obligation to pay any fees
or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement
for which Seller could become liable or obligated.
(vii) STATEMENTS COMPLETE AND CORRECT
The statements contained in this clause 3(b) are true,
correct and complete as of the date of this Agreement
and will be true, correct and complete as of the
Closing Date (as though made then and as though the
Closing Date
9
were substituted for the date of this Agreement
throughout this clause 3(b)).
4. REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY
Seller represents and warrants to Buyer that save as fairly disclosed
in the Disclosure Letter:
(a) ORGANISATION, QUALIFICATION AND CORPORATE POWER
The Company is a limited liability company duly organised and
validly existing under the laws of Pakistan, and is duly
authorised to conduct the business in which it is engaged and to
own and use the properties owned and used by it.
(b) CAPITALISATION
The entire authorised share capital of the Company consists of
60,000,000 Shares, all one class, of which 54,387,750 are
validly issued. All of the validly issued Shares have been
duly authorised and are fully paid, and are held of record by
the Seller, CCL, and Saif in the proportions specified in the
Disclosure Letter. There are no outstanding or authorised
options, warrants, purchase rights, subscription right,
conversion rights, exchange rights, or other contracts or
commitments that could require the Company to issue, sell, or
otherwise cause to become outstanding any of its share
capital. There are no outstanding or authorised stock
appreciation, phantom stock, profit participation, or similar
rights with respect to the Company.
(c) SUBSIDIARIES
The Company has no, and never has had any, subsidiaries.
(d) NONCONTRAVENTION
Neither the execution nor the delivery of this Agreement, nor
the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court
to which the Company is subject or any provision of the
charter or by-laws of the Company or (ii) to the best of the
knowledge of Seller, conflict with, result in a breach of,
constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement,
contract, lease, licence, instrument, or other arrangement to
which the Company is a party or by which it is bound or to
which any of its assets is subject (or result in the
imposition of any security interest upon any of its assets) or
(iii) conflict with, result in a breach of, constitute a
default under, result in the
10
acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under the
Licence. To the best of Seller's knowledge, the Company does
not need to give any notice to, make any filing with, or
obtain any authorisation, consent, or approval of any
government or governmental agency prior to the Closing in
order for the parties to consummate the transactions
contemplated by this Agreement.
(e) BROKERS' FEES
The Company has no liability or obligation to pay any fees or
commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.
(f) TITLE TO TANGIBLE ASSETS
Schedule A lists all material tangible assets which the Company
uses in the conduct of its business. All of such assets are
owned by the Company free and clear of all liens, claims, or
other security interests, are in good operating condition and
repair, subject to normal wear and use, and are usable in a
manner consistent with their current use.
(g) LEASED TANGIBLE PROPERTY
No tangible property has been leased or sub-leased to the
Company.
(h) FINANCIAL STATEMENTS
Schedule B contains the following financial statements
(collectively the "Financial Statements"): (i) audited balance
sheets and profit and loss account as of and for the fiscal
years ended 31st December, 1995, and 31st December, 1996 for
the Company; and (ii) unaudited balance sheets and summary
profit and loss account (the "Most Recent Financial
Statements") as of and for the six months ended 30th June,
1997 (the "Most Recent Fiscal Month End") for the Company.
The Financial Statements (including the notes thereto) have
been prepared in accordance with accounting principles
generally accepted in Pakistan and applied on a consistent
basis throughout the periods covered thereby, comply with the
requirements of Pakistan law and present fairly the financial
condition of the Company as of such dates and the results of
operations of the Company for such periods.
11
(i) LEGAL COMPLIANCE
To Seller's knowledge, after making all due and careful
enquiries, the Company has complied in all material respects
with all applicable laws (including rules, regulations, codes,
plans, injunctions, judgments, orders, decrees, rulings, and
charges thereunder) of the GOP and any applicable laws of the
United States federal, state and local governments (and all
agencies thereof) (the "Applicable Laws") and the Company has
filed all returns and made all filings required by all
applicable laws. As at the date hereof, the Company has not
received any notice of any failure to comply with, nor are
there any circumstances which indicate that the Company is in
violation of, any such Applicable Laws.
(j) TAX MATTERS
The Company has timely filed all Pakistan tax returns that it
was required to file, and has paid all applicable taxes shown
thereon as owing, except taxes that are being contested in
good faith by appropriate proceedings and for which adequate
reserves have been made. There are no outstanding claims,
assessments (including penalty or interest claims) in respect
of taxation and the Company is not subject to any dispute with
the relevant tax authorities or any other fiscal authority at
the date hereof and there is no fact or matter which might
result in any such dispute or any liability for taxation
(present and future) not provided for in its audited accounts.
(k) IMMOVABLE PROPERTY
(i) Schedule C attached hereto lists all immovable property
that the Company owns. With respect to each such parcel
of owned immovable property:
(A) the Company has good and marketable title to the
parcel of immovable property, free and clear of
any security interest, easement, covenant, or
other restriction, recorded easements, covenants,
and other restrictions, and utility easements,
building restrictions, zoning restrictions, and
other easements and restrictions existing
generally with respect to properties of a similar
character; and
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(B) there are no leases, subleases, licenses,
concessions, or other agreements granting to any
party or parties the right to use or occupancy of
any portion of the parcel of immovable property.
(ii) Schedule D lists all immovable property leased or
subleased to the Company. Each such lease and sublease
listed in Schedule D is legal, valid, binding,
enforceable, and in full force and effect, and the
Company has not received any notice of any default
thereunder.
(l) MATERIAL CONTRACTS
Schedule E lists all material contracts and other written
agreements to which the Company is a party or by which its
assets or properties may be bound. All such contracts and
agreements are in full force and effect, are valid and binding
upon and enforceable against the parties thereto in accordance
with their respective terms. The Company has not violated any
of the terms or conditions of any contract or agreement set
forth in Schedule E in any material respect, and to Seller's
knowledge after having made all due and careful enquiries, all
of the covenants to be performed by any other party thereto
have been materially performed.
For the purposes of this sub-paragraph, "material" contracts or
agreements means any contract or agreement (whether written or
oral) with a value of US$10,000 or more in any twelve month
period.
(m) POWERS OF ATTORNEY
There are no outstanding powers of attorney executed on behalf
of the Company.
(n) LITIGATION
To the knowledge of Seller after having made all due and careful
enquiries, there is no pending or threatened litigation against
the Company. Except as set forth in Schedule F, there are no
actions, suits, proceedings, hearings, or investigations before
any court or quasi-judicial or administrative agency of any
federal, state, local or foreign jurisdiction that involve the
Company or any of its assets or properties, nor is it a party to
or its assets or properties subject to any injunction, judgment,
order, decree, ruling, or charge which would have a material
adverse effect on the Condition of the Company, and there are no
circumstances at present which indicate the Company is about to
become involved in any litigation.
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(o) EMPLOYEE BENEFITS
The Company complies in form and in operation in all respects
with the applicable requirements of the labour laws and
regulations currently in effect in Pakistan.
(p) INTELLECTUAL PROPERTIES
Except with respect to the License and the trade name
"Mobilink", the Company has no patents, patent rights,
licenses, trademarks, trademark rights, trade names, trade
name rights, service marks, service xxxx rights, copyrights or
similar rights, and does not require any such rights in
connection with the conduct of its business. The Company is
not infringing or otherwise acting adversely to, the right of
any Person under or in respect of any patent, license,
trademark, trade name, service xxxx, copyright or similar
intangible right.
(q) STATEMENTS CORRECT AND COMPLETE
The statements contained in this clause 4 are true correct and
complete in all material respects as of the date of this
Agreement and will be true correct and complete in all material
respects as of the Closing Date and, if applicable, the First
Option Closing Date or the Second Option Closing Date (as though
made then and as though the Closing Date and the First Option
Closing Date or the Second Option Closing Date were substituted
for the date of this Agreement throughout this clause 4), except
as Seller may otherwise notify Buyer pursuant to clause 6(e).
(r) MEMORANDUM AND ARTICLES OF ASSOCIATION
Seller has heretofore delivered to Buyer true and complete
copies of the Memorandum and Articles of Association and
minute books of the Company. The minute books of the Company
contain true and complete records of all meetings and consents
in lieu of meeting of the board of directors (and any
committees thereof) and of shareholders thereof since the time
of its incorporation in reasonable detail and accurately
reflect in all material respects all transactions referred to
in such minutes and consents in lieu of meeting.
(s) LIABILITIES
Save in respect of a potential additional liability of US$1
million payable to MINC on account of the supply of
infrastructure equipment, the Company does not have any
Liabilities other than (i) Liabilities fully and adequately
reflected or reserved against on the Most Recent Financial
Statements or disclosed in the
14
footnotes thereto and (ii) Liabilities incurred since December
31, 1996 in the ordinary course of business.
"Liabilities" means, with respect to any Person as of any time,
any direct or indirect indebtedness, liability, claim, loss,
damage, deficiency, obligation or responsibility, fixed or
unfixed, xxxxxx or inchoate, liquidated or unliquidated, secured
or unsecured, accrued, absolute, contingent or otherwise, of a
kind required to be set forth on a balance sheet of such Person
as at such time prepared in accordance with generally accepted
accounting principles in effect in Pakistan or individually,
collectively, specifically or generally to be included in the
notes to such balance sheet.
(t) NO MATERIAL ADVERSE CHANGE
Since December 31, 1996, there has not been any (i) material
adverse change, or any development involving a prospective
material adverse change, in the Condition of the Company, (ii)
damage to, destruction or loss of any assets or properties of
the Company, whether or not covered by insurance, which has
had or could have a material adverse effect on the Condition
of the Company, or (iii) commencement or discontinuance of any
material line of business of the Company.
(u) OFFICERS, DIRECTORS AND KEY EMPLOYEES; EMPLOYEE RELATIONS
(i) No officer or director of the Company or any other
employee of the Company had compensation reported for
the fiscal year ended December 31, 1996 exceeding
US$50,000 or received or is entitled to receive bonuses
in excess of US$10,000 in respect of the fiscal year
ended December 31, 1996 (each a "Highly Compensated
Person") and there are no commitments or agreements by
the Company to increase the wages of any such Highly
Compensated Person. No officer, director or employee
of the Company is a party to or beneficiary of any
contract or other agreement pursuant to which such
Person shall receive any bonus or other payment from
the Company in connection with the transactions
contemplated hereby.
(ii) To the knowledge of Seller, there is not now
threatened, a strike, picket, work stoppage, work
slowdown or other labour trouble or similar event by
any employee of the Company.
(v) ARRANGEMENTS WITH DIRECTORS AND CONNECTED PERSONS
There is not outstanding:
15
(i) any loan made by the Company to, or debt owing to the
Company by, any director of the Company or any Person
connected with any of them;
(ii) any agreement or arrangement to which the Company is a
party and in which any director of the Company or any
Person connected with any of them is interested.
(w) THE LICENCE
A true, complete and accurate copy of the Licence is annexed
in Schedule G hereto. The Licence is in full force and effect
and validly subsisting and there do not exist any
circumstances which might lead to the revocation or non
renewal of the Licence or any amendment or variation of its
terms. Seller has disclosed to Buyer all information known to
it which might reasonably be considered to affect the value of
the Licence to the Company in the carrying on of its business,
now and in the future.
(x) MATERIAL INFORMATION
All information relating to the Company which is known to
Seller and which is material to be known by a purchaser for
value of the Shares has been disclosed to Buyer in writing.
(y) RECITALS AND DISCLOSURES
The recitals and Schedules to this Agreement and all
information and documents relating to the Company disclosed or
supplied by Seller or the Company or any agent of any of them
to the Purchaser, its legal advisers, accountants or other
agents or advisers during or with a view to the negotiations
leading up to this Agreement, including (but not limited to)
the information contained in the Disclosure Letter, are true
and accurate in all material respects and there is no fact
known to Seller not disclosed which would render any such
information or document inaccurate or misleading or which, if
disclosed, might reasonably affect the willingness of Buyer to
purchase the Sale Shares and/or the First Option Shares and/or
the Second Option Shares for the consideration or otherwise on
the terms specified in this Agreement.
(z) POSITION SINCE 31ST DECEMBER, 1996
Since 31st December, 1996:
16
(i) no dividend or other distribution has been declared, paid
or made by the Company;
(ii) the business of the Company has been carried on in the
ordinary course and so as to maintain it as a going
concern;
(iii) there has been no reduction in the value of the net
tangible assets of the Company on the basis of the
valuations adopted in the Most Recent Financial
Statements;
(iv) the Company has not acquired or disposed of or agreed to
acquire or dispose of any business or any material asset
other than trading stock in the ordinary course of
business;
(v) no debtor has been released by the Company on terms that
he pays less than the book value of any debt in excess of
US$10,000 (subject to settlement discounts on the usual
terms which have been disclosed to the Purchaser) and no
debt in excess of US$10,000 has been written off or has
proved to be irrecoverable to any extent;
(vi) other than making payments in the ordinary course of
business under the existing management agreement with
Motorola, and payment of principal and interest under
the outstanding third party loans, the Company has not
paid any service, management or similar charges or any
interest or amount in the nature of interest to any
Person or incurred any liability to make such a payment.
(aa) The Company had on 30th June, 1997 a minimum of 22,000 active
subscribers in respect of its cellular mobile telephone system.
For the purposes of this sub-paragraph (aa), active subscribers
means subscribers who are not blocked from making calls and who
in the three month period after 30th June, 1997 make payment in
full of at least one of their monthly accounts with the Company.
(bb) The Company had, as at 30th June, 1997, Delinquent Receivables
of not more than 60 million Rupees (before netting off any
deposits or other security held by the Company from
subscribers). For the purposes of this sub-paragraph (bb),
Delinquent Receivables means receivables which, as at the date
at which the calculation is made, have been outstanding for
120 days or more.
5. FURTHER PROVISIONS RELATING TO THE SELLER'S REPRESENTATIONS AND
WARRANTIES
17
(a) Each of the representations and warranties of Seller in clause
4 shall be construed as a separate representation and warranty
and is given subject to the matters of which true, complete
and accurate details are given in the Disclosure Letter but
(save as expressly provided to the contrary) shall not be
otherwise limited or restricted by reference to or inference
from the terms of any other representation and warranty or any
other term of this Agreement.
(b) Buyer shall not be entitled to claim after Closing that any of
the representations and warranties of Seller is or was untrue
or misleading or has been breached even if Buyer had
discovered but failed to raise such fact before Closing,
provided, however, that Buyer shall not be deemed to have
waived its right to claim a breach of such relevant
representation or warranty after Closing if Buyer knew of but
failed to raise such breach before Closing because Buyer in
good faith believed such breach was not material and had no
reason to believe it would become material, but subsequent to
Closing the representation and warranty giving rise to such
immaterial breach prior to Closing shall have changed, thereby
resulting in an Adverse Consequence.
(c) The rights and remedies of Buyer in respect of any breach of
the representations and warranties of Seller shall not be
affected by Closing, by any investigation made by or on behalf
of Buyer into the affairs of the Company, by the giving of
time or other indulgence by Buyer to any Person, by Buyer
rescinding or not rescinding this Agreement or by any other
cause whatsoever except a specific waiver or release by the
Buyer in writing; and any such waiver or release shall not
prejudice or affect any remaining rights or remedies of the
Buyer.
6. PRE-CLOSING COVENANTS
The parties agree as follows with respect to the period between the
execution of this Agreement and the Closing:
(a) GENERAL
Each of the parties will use its reasonable best efforts to
take all actions and to do all things necessary in order to
consummate and make effective the transactions contemplated by
this Agreement (including satisfaction, but not waiver, of the
closing conditions set forth in clause 8 below).
(b) OPERATION OF BUSINESS
Seller will not cause or permit the Company to engage in any
practice, take any action, or enter into any transaction
outside the ordinary and usual course of business or
inconsistent with past practices and the preservation of the
goodwill of the Company's suppliers, customers, employees and
others having business
18
relations with the Company. The Seller shall cause the
Company to preserve all licenses and permits of the Company in
full force and effect and preserve the business of the Company
as in effect on the date hereof.
(c) Without prejudice to the generality of paragraph (b), Seller
shall procure that unless Buyer shall have consented thereto in
writing the Company shall not:
(i) create, extend, grant or issue, or agree to create, grant
or issue any mortgage, charge, debenture or other
security; or
(ii) create or issue or agree to create or issue any share or
loan capital, or give or agree to give any option in
respect of any share or loan capital; or
(iii) pass any resolution by its members in general meeting or
make any alteration of its Memorandum or Articles of
Association; or
(iv) declare, make or pay any dividend or other distribution;
or
(v) pay its creditors otherwise than in the ordinary course
or change its policy in relation to the payment of
creditors; or
(vi) enter into any contract or commitment in relation to the
Licence except with the GOP, as may be necessary for the
reissuance of the License; or
(vii) sell or transfer any of its assets or cancel, release or
assign any indebtedness owed to it or any claims held by
it, in each case in excess of US$10,000; or
(viii) do any act, matter or thing which would make any of the
representations and warranties contained in clause 4
untrue if the same were repeated at any time prior to
Closing by reference to the facts and circumstances then
pertaining.
(d) FULL ACCESS
Seller will permit, and Seller will cause the Company to
permit, representatives of Buyer to have full access at all
reasonable times, and in a manner so as not to interfere with
the normal business operations of the Company, to all
premises, properties, personnel, books, records (including tax
records), contracts, and documents of or pertaining to the
Company. Buyer will treat and hold as Confidential
Information any such information it receives from either of
Seller or the Company in the course of the reviews
contemplated by this clause 6(d), will not use any of the
Confidential Information except in connection with this
Agreement, and, if this Agreement is terminated for any reason
whatsoever, will
19
return to Seller and the Company all tangible
embodiments (and all copies) of the Confidential Information
which are in its possession.
(e) NOTICE OF DEVELOPMENTS
Each Party will give prompt written notice to the other Party
of any material adverse development causing a breach of any of
its own representations and warranties in clause 3 above, and
Seller shall notify Buyer of any development causing a breach
of any of the representations and warranties in clause 4
above. Unless Buyer has the right to terminate this Agreement
pursuant to clause 12(a)(ii) below by reason of such
development and exercises that right within the period of 10
business days referred to in clause 12(a)(ii) below, the
written notice pursuant to this clause 6(e) will be deemed to
have amended any applicable Schedule or the Disclosure Letter,
as the case may be, to have qualified the representations and
warranties contained in clause 4 above, and to have cured any
inaccurate or incomplete representation or breach of warranty
that otherwise might have existed hereunder by reason of the
development.
(f) Buyer acknowledges that Seller has provided to Buyer in writing
notice that the Net Deficit of the Company was as at 30th June,
1997 US$14,889,977 (the "Unaudited June Net Deficit").
7. POST-CLOSING COVENANTS
In case at any time after the Closing any further action is necessary
or desirable to carry out the purposes of this Agreement, each of the
Parties will take such further action (including the execution and
delivery of such further instruments and documents) as any other
Party reasonably may request, all at the sole cost and expense of the
requesting Party (unless the requesting Party is entitled to
indemnification therefor under clause 10 below), except where such
action is undertaken solely on behalf or to facilitate any necessary
action required of the other Party, in which event the other Party
shall be liable for reimbursing the costs and expenses of the
requesting Party.
8. CONDITIONS TO OBLIGATION TO CLOSE
(a) CONDITIONS TO OBLIGATION OF BUYER
20
The obligation of Buyer to consummate the transactions to be
performed by it in connection with the Closing is subject to
satisfaction of the following conditions:
(i) the representations and warranties set forth in clause
3(a) and clause 4 above shall be true and correct at and
as of the Closing Date;
(ii) Seller shall have performed and complied with all of its
covenants hereunder required to be performed or complied
with by Seller on or before the Closing Date in all
material respects through the Closing;
(iii) there shall not be any injunction, judgment, order,
decree, ruling or charge in effect preventing
consummation of any of the transactions contemplated by
this Agreement;
(iv) approval of the transfers to Buyer of the Sale Shares
by majority vote of the Company's Board of Directors
and registration of the Sale Shares in the name of
Buyer in the Company's register of shareholders at a
meeting of such Board, to occur at the Closing,
followed by the resignation of one of the directors
representing Seller on the Company's Board of
Directors, effective as of the Closing Date;
(v) Seller shall have delivered to Buyer a certificate of an
officer of Seller to the effect that each of the
conditions specified above in clause 8(a)(i)-(iv) is
satisfied;
(vi) Buyer shall have received from counsel to Seller an
opinion in form and substance reasonably satisfactory to
Buyer, addressed to Buyer, and dated as of the Closing
Date;
(vii) all actions to be taken by Seller in connection with
consummation of the transactions contemplated hereby
and all certificates, opinions, instruments and other
documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in
form and substance to Buyer. Except as may have been
previously disclosed to Buyer by Seller pursuant to
clause 6(e), there shall have been no material adverse
change or any development involving a prospective
material adverse change, in the Condition of the
Company; and
(viii) the License shall have been reissued pursuant to the
requirements of the Pakistan Telecommunications
(Reorganization) Act, 1996, on terms reasonably
satisfactory to Buyer.
21
Buyer may waive any condition specified in this clause 8(a) in
writing at or prior to the Closing.
(b) CONDITIONS TO OBLIGATION OF SELLER
The obligation of Seller to consummate the transactions to be
performed by it in connection with the Closing is subject to
satisfaction of the following conditions:
(i) the representations and warranties set forth in clause
3(b) above (other than in paragraph (iv) of clause 3(b))
shall be true and correct in all material respects at and
as of the Closing Date;
(ii) Buyer shall have performed and complied with all of its
covenants hereunder required to be performed or complied
with by Buyer on or before the Closing Date in all
material respects through the Closing;
(iii) there shall not be any injunction, judgment, order,
decree, ruling or charge in effect preventing the Buyer
from consummating any of the transactions contemplated by
this Agreement;
(iv) Buyer shall have delivered to Seller a certificate of
an officer of Buyer to the effect that each of the
conditions specified above in clause 8(b)(i)-(iii) is
satisfied;
(v) Seller shall have received from counsel to Buyer an
opinion in form and substance reasonably satisfactory to
Seller, addressed to Seller, and dated as of the Closing
Date; and
(vi) all actions to be taken by Buyer in connection with
consummation of the transactions contemplated hereby
and all certificates, opinions, instruments, and other
documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in
form and substance to Seller.
Seller may waive any condition specified in this clause 8(b) in
writing at or prior to the Closing.
(c) CONDITIONS APPLICABLE TO BOTH BUYER AND SELLER
22
The obligation of both Buyer and Seller to consummate the
transactions contemplated by this Agreement shall be subject to
the further conditions that:
(i) the Company shall have called a meeting of the
shareholders of the Company to be held on the Closing
Date, for the purpose of adopting Articles of Association
in form and substance reasonably satisfactory to the
Parties and reflecting, as applicable, the provisions of
the Restated and Amended Shareholders' Agreement referred
to below, in substitution for its existing articles of
association and upon the convening of such meeting
following the consummation of this transaction Buyer and
Seller shall vote in favour thereof;
(ii) the Shareholders Agreement shall have been terminated,
including any amendments thereto, and each of the
parties to the Shareholders Agreement shall have
executed a mutual release of their respective rights
and obligations to each other under such agreement; and
the Restated and Amended Shareholders' Agreement in the
form of Exhibit A attached hereto shall be executed on
the Closing Date;
(iii) Buyer and Seller shall have entered into the escrow
agreement in form substance reasonably satisfactory to
the Parties and the same shall be in full force and
effect as at the Closing Date;
(iv) the Shareholders shall have entered into that certain
side letter negotiated between the Parties regarding
the capitalization of the Company during financial
years 1997 and 1998.
(d) POST-CLOSING OBLIGATIONS OF BUYER
Following the Closing the Buyer shall furnish a certificate to
the Company (with a copy to the Seller) stating that it has
acquired the Sale Shares on a repatriable basis with payment
having been made outside Pakistan.
9. FIRST OPTION AND SECOND OPTION
(a) Seller hereby irrevocably and unconditionally grants to Buyer
the First Option, exercisable on one occasion only at any time
during the First Option Period to purchase the First Option
Shares in consideration of the payment of the First Option
Purchase Price on the terms and subject to the conditions of
this clause 9.
23
(b) Subject to the other provisions of this clause, Buyer may at
any time during the First Option Period, exercise the First
Option by serving on the Seller written notice of such
exercise and the date of exercise of the First Option shall be
the date when such written notice has been served on the
Seller in accordance with clause 14(g). The First Option
shall lapse forthwith upon the expiration of the First Option
Period.
(c) The notice of exercise of the First Option referred to in clause
9(b) once served shall be irrevocable and binding on Buyer and
may not be withdrawn without the prior written consent of the
Seller.
(d) Following the exercise of the First Option in accordance with
clause 9(b), closing of the sale and purchase of the First
Option Shares (the "First Option Closing") shall take place at
the offices of Seller in London on the seventh business day
after the date of exercise of the First Option or, if the
provisions of clause 11 shall apply, on the date provided in
such clause, and the following matters shall be simultaneously
completed:
(i) Seller shall deliver to the Buyer share certificates
evidencing the total number of First Option Shares
together with instruments of transfer in respect thereof;
and
(ii) The Buyer shall pay to the Seller the First Option
Purchase Price in cash by wire transfer in immediately
available funds to Seller's bank account number 00000000
at Citibank N.A. in New York, New York.
(e) Seller irrevocably and unconditionally grants to Buyer the
Second Option, effective upon the lapse of the First Option
(whether due to the expiry of the First Option Period or the
failure to exercise the First Option) but not otherwise, and
exercisable on one occasion only at any time during the period
commencing on the expiry of the First Option Period and ending
on (and including) 11:00 p.m. Hong Kong time on 27th August,
1997 or, if the provisions of clause 11 shall apply, on the
date provided in such clause, ("Second Option Period"), to
purchase the Second Option Shares for the Second Option
Purchase Price.
(f) Subject to the other provisions of this clause, Buyer may at
any time during the Second Option Period, exercise the Second
Option by serving on the Seller written notice of such
exercise and the date of exercise of the Second Option shall
be the date when such written notice has been served on the
Seller in accordance with clause 14(g). The Second Option
shall lapse forthwith upon the expiration of the Second Option
Period.
24
(g) The notice of exercise of the Second Option referred to in
clause 9(f) once served shall be irrevocable and binding on
Buyer and may not be withdrawn without the prior written
consent of the Seller.
(h) Following the exercise of the Second Option in accordance with
clause 9(f), closing of the sale and purchase of the Second
Option Shares (the "Second Option Closing") shall take place at
the offices of Seller in London on the seventh business day after
the date of exercise of the Second Option (or such later date as
may be agreed by Seller not exceeding 30 days from the time of
expiry of the Second Option Period) and the provisions of Clause
9(d) shall apply, mutatis mutandis, to the Second Option Closing.
10. REMEDIES FOR BREACHES OF THIS AGREEMENT
(a) SURVIVAL OF REPRESENTATIONS AND WARRANTIES
All of the representations and warranties of the Parties in
clause 3 and of the Seller contained in clause 4 above shall
survive the Closing hereunder and shall continue in full force
and effect subject to the provisions of paragraph (b) of this
clause.
(b) INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE BUYER:
(i) In the event Seller breaches any of its
representations, warranties and covenants contained
herein (other than the representations and warranties
in clause 3(a) above), and, provided that Buyer makes a
written claim for indemnification against Seller
pursuant to clause 14(g) below prior to 31st December
1999 (the "Cut-off Date") or, in respect of claims
relating to taxation ("Taxation Claims") prior to the
sixth anniversary of the Closing Date, then Seller
shall indemnify Buyer from and against any Adverse
Consequences Buyer shall suffer originating prior to
and continuing through and after the date of the claim
for indemnification caused by the breach. There shall
be no indemnification for any Adverse Consequences
Buyer shall suffer where written notice of the claim is
first made after the Cut-off Date or, in respect of
Taxation Claims, the sixth anniversary of the Closing
Date. The Seller shall not have any obligation to
indemnify Buyer from and against any Adverse
Consequences caused by the breach of any representation
or warranty of Seller contained in clause 4 above
unless the amount of Buyer's claim in respect thereof,
when aggregated with one or more other claims brought
against Seller hereunder, exceeds two hundred thousand
United States Dollars (US$200,000). The maximum
liability of Seller for a breach of any of its
representations, warranties and covenants contained
herein shall be limited to an amount equal to the
aggregate of 50% of the Purchase Price and, if the
First Option or the Second Option is exercised, 50% of
the First Option
25
Purchase Price or 50% of the Second Option Purchase
Price (as the case may be).
(ii) In the event Seller breaches any of its representations
and warranties in clause 3(a) above, provided that Buyer
makes a written claim for indemnification against Seller
pursuant to clause 14(g) below prior to the first
anniversary of the Closing Date, then Seller shall
indemnify Buyer from and against the entirety of any
Adverse Consequences Buyer shall suffer through and
continuing after the date of the claim for indemnification
caused by the breach, without regard to the monetary limit
set forth above in clause 10(b)(i). There shall be no
indemnification for any Adverse Consequences Buyer shall
suffer where written notice of the claim is first made
after the first anniversary of the Closing Date.
(c) INDEMNIFICATION PROVISIONS FOR BENEFIT OF SELLER
In the event Buyer breaches any of its representations,
warranties, and covenants contained herein, and provided that
Seller makes a written claim for indemnification against Buyer
pursuant to clause 14(g) below prior to the first anniversary of
the Closing Date, then Buyer agrees to indemnify Seller from and
against the entirety of any Adverse Consequences Seller shall
suffer through and continuing after the date of the claim for
indemnification caused by the breach. There shall be no
indemnification for any Adverse Consequences Seller shall suffer
where written notice of the claim is first made after the first
anniversary of the Closing Date.
(d) DETERMINATION OF ADVERSE CONSEQUENCES
In quantifying the Adverse Consequences suffered by a Party as a
result of a breach of any of the warranties in this Agreement,
there shall be taken into account any proceeds of insurance and
any tax repayment or other tax benefit actually received by the
indemnified Party in respect of the same event, matter or thing
for which it is seeking indemnification under this Agreement.
(e) Seller shall not be liable for loss of profits, business,
revenue, goodwill, anticipated savings, or any other special,
indirect or consequential losses even if such losses were
foreseeable by Seller, except for such losses which cannot be
legally excluded, and as further qualified below.
Notwithstanding the foregoing, Seller shall be liable to Buyer
with respect to the following:
26
(i) the amount (if any) by which the Delinquent Receivables as
at 30th June, 1997 exceed 60 million Rupees, on a Rupee
for Rupee basis;
(ii) the amount (if any) by which the number of Active
Subscribers as at 30th June, 1997 is less than 22,000, on
the basis of US$1,432 for each subscriber; and
(iii) the amount (if any) by which the audited Net Deficit of
the Company as at 30th June, 1997 is greater than 115% of
the Unaudited June Net Deficit, on the basis of:-
(1) US$0.3131 for every US$1; or
(2) if the First Option is exercised, US$0.44 for
every US$1; or
(3) if the Second Option is exercised, US$0.3631 for
every US$1
in each case, by which the audited Net Deficit as
aforesaid is greater than 115% of the Unaudited June Net
Deficit.
(f) (i) For the purposes of determining the amount of the
Delinquent Receivables and the Net Deficit and the number
of Active Subscribers as at 30th June, 1997, the Parties
shall procure that the Company shall prepare a draft of,
and the Company's auditors will audit, the profit and loss
account of the Company for the period from 1st January,
1997 to 30th June, 1997 and the balance sheet of the
Company as at 30th June, 1997 (together the "June
Accounts") on a basis consistent with the Financial
Statements and, in particular, the treatment of the
operating costs incurred in Karachi during the suspension
of cellular operations in that city shall be the same in
the June Accounts as in the Financial Statements. For the
avoidance of doubt, the June Accounts shall separately
identify the amount of the Delinquent Receivables and the
Net Deficit and the number of Active Subscribers. Once
prepared, the June Accounts as audited by the Company's
auditors (the "Audited June Accounts") shall forthwith be
delivered to each of Buyer and Seller.
27
(ii) The amount of the Delinquent Receivables and the Net
Deficit and the number of Active Subscribers, for the
purposes of paragraph (e) above, shall be as shown in the
Audited June Accounts and any amounts owing by Seller to
Buyer pursuant thereto shall be paid in cash by Seller to
Buyer within seven days of delivery of the Audited June
Accounts to Seller and Buyer pursuant to sub-paragraph (i)
above.
(g) OTHER INDEMNIFICATION PROVISIONS
The indemnification provisions in this clause 10 are the
exclusive remedy any Party may have for breach of any
representation or warranty in this Agreement, except where the
breach arises from the fraud or wilful misrepresentation of the
defaulting Party in which case the other Party's rights of action
shall not be limited as aforesaid.
(h) It is expressly understood that to the extent that Buyer shall
have brought a claim for indemnification against Seller under
clause 10, it shall be barred from pursuing the same or
substantially similar claim under clause 11, and conversely, a
claim under clause 11 shall bar the same or substantially similar
claim under clause 10.
11. UNDERTAKING OF SELLER
To the extent that the License shall not have been reissued on or before
13th August, 1997 on terms reasonably acceptable to Buyer, Buyer shall
have the right to request of Seller, and Seller shall so agree, that the
Closing be postponed until 16th September, 1997, during which one month
period Buyer shall determine whether it desires to participate in the
transaction contemplated hereunder, notwithstanding that the License
shall not have been reissued. It is understood, however, that during
such one month period Seller shall not be restricted from entering into
discussions with third parties for a selldown of its Shares in the
Company, any possible agreement for such selldown to a third party being
contingent on Buyer's determination by 13th September, 1997, that it
will not participate in the acquisition of Shares under this Agreement.
It is further understood that in the event the Closing is postponed and
does occur on 16th September, 1997, that the Buyer shall have determined
on or before 13th September, 1997 whether it desires to purchase the
Shares being made available to Buyer either under the First Option or
the Second Option, and such additional shares under either such option
shall be included in the number of Shares being acquired at Closing on
16th September, 1997.
12. TERMINATION
28
(a) TERMINATION OF AGREEMENT
The Parties may terminate this Agreement as provided below:
(i) Buyer and Seller may terminate this Agreement by mutual
written consent at any time prior to the Closing;
(ii) Buyer may terminate this Agreement by giving written
notice to Seller at any time prior to the Closing in the
event (A) Seller has within the then previous ten (10)
business days given Buyer any notice pursuant to clause
6(e) above and (B) the development that is subject of the
notice has had or is likely to have a material adverse
effect upon the Condition of the Company or the
consummation of the transactions contemplated hereby;
(iii) Buyer may terminate this Agreement by giving written
notice to Seller at any time prior to the Closing (A) in
the event Seller has breached any of its representations,
warranties, or covenants contained in this Agreement in
any material respect, Buyer has notified Seller of such
breach, and the breach, if capable of cure, has continued
without cure for a period of 10 days after the receipt of
the notice of breach, or (B) if the Closing shall not have
occurred on or before 16th September, 1997, by reason of
the failure of any condition precedent under clause 8(a)
hereof (unless the failure results primarily from the
Buyer itself breaching any of its representations,
warranties, or covenants contained in this Agreement); and
(iv) Seller may terminate this Agreement by giving written
notice to Buyer at any time prior to the Closing (A) in
the event Buyer has breached any of its representations,
warranties, or covenants contained in this Agreement in
any material respect, Seller has notified Buyer of such
breach, and the breach if capable of cure has continued
without cure for a period of 10 days after the receipt of
the notice of breach, or (B) if the Closing shall not have
occurred on or before 16th September, 1997, by reason of
the failure of any condition precedent under clause 8(b)
hereof (unless the failure results primarily from Seller
itself breaching any of its representations, warranties,
or covenants contained in this Agreement).
(b) EFFECT OF TERMINATION
29
If any Party terminates this Agreement pursuant to clause 12(a)
above, all rights and obligations of the Parties hereunder shall
terminate without any liability of any Party to the other Party,
except for any liability of any Party then in breach provided,
however, that the confidentiality provisions contained in clause
6(d) above and the provisions of clause 13 and clause 14 shall
survive termination.
13. ARBITRATION
The Parties shall attempt to resolve all disputes under this Agreement
through amicable discussions and consultations. In the event that they
are unable to resolve any differences the matter shall be referred to
final and binding arbitration in accordance with the following: Any
dispute arising out of or in connection with this Agreement, including
any questions regarding its existence, validity, breach or termination,
shall be referred to and finally resolved by arbitration in London in
accordance with the Rules for the time being in force of the
International Chamber of Commerce, which rules are deemed to be
incorporated into this Agreement. The tribunal shall consist of three
(3) arbitrators, with each side to the dispute choosing one arbitrator
and such two arbitrators choosing the third. If within 30 days any of
the parties to the dispute has not selected its arbitrator, or the two
arbitrators have been unable to agree on the selection of the third
arbitrator, such arbitrator shall be chosen by the ICC. The third
arbitrator shall serve as the chairperson of the arbitration panel. The
language of the arbitration shall be English.
14. MISCELLANEOUS
(a) PRESS RELEASES AND PUBLIC ANNOUNCEMENTS
No Party shall issue any press release or make any public
announcement relating to the subject matter of this Agreement
without the prior written approval of the other Party; provided,
however, that any Party may make any public disclosure it
believes in good faith is required by applicable law or any
listing or trading agreement concerning its publicly-traded
securities (in which case the disclosing Party will use its
reasonable best efforts to advise the other Party prior to making
the disclosure).
(b) NO THIRD PARTY BENEFICIARIES
This Agreement shall not confer any rights or remedies upon any
Person other than the Parties and their respective successors and
permitted assigns.
(c) ENTIRE AGREEMENT
30
This Agreement (including the documents referred to herein which
may be amended in accordance with clause 6(e)) constitutes the
entire agreement among the Parties and supersedes any prior
understanding, agreements, or representations by or among the
Parties, written or oral, to the extent they related in any way
to the subject matter hereof.
(d) SUCCESSION AND ASSIGNMENT
This Agreement shall be binding upon and inure to the benefit of
the Parties named herein and their respective successors and
permitted assigns. Neither Party may assign either this
Agreement or any of his or its rights, interests, or obligations
hereunder without the prior approval of the other Party.
(e) COUNTERPART
This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original but all of which together
will constitute one and the same instrument.
(f) HEADINGS
The section headings contained in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) NOTICES
All notices, requests, demands, claims, and other communications
hereunder will be in writing, deemed duly given (and received
five days after) if sent by registered or certified mail, return
receipt requested, postage prepaid, and addressed to the intended
recipient as set forth below:
If to Seller: J. Xxxxxxx Xxxxxx Copy to: Xxxxxx Xxxxxxxx
Vice-President Sr. International
Motorola International Counsel
Development Corporation (same address)
000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
If to Buyer: Xxxx XxXxxxx
Vice-Chairman
International Wireless
Communications, Inc.
12/F, Sun Hung Xxx Xxxxxx
00
00 Xxxxxxx Xxxx
Xxxxxxx, Xxxx Xxxx
Xxxx Xxxx Copy to: Xxxxxxx Xxxxx
Executive Director (same address)
Asian Infrastructure Fund
Advisers Limited
Xxxxx 0000-0
Xxxx Xxxxx'x Xxxx Xxxxxxx
Xxxx Xxxx
Either Party may send any notice, request, demand, claim or other
communication hereunder to the intended recipient at the address set
forth above using any other means (including personal delivery,
expedited courier, messenger service, telecopy, telex, ordinary mail,
or electronic mail), but no such notice, request, demand, claim, or
other communication shall be deemed to have been duly given unless and
until it actually is received by the intended recipient. Either Party
may change the address to which notices, requests, demands, claims,
and other communications hereunder are to be delivered by giving the
other Parties notice in the manner herein set forth.
(h) GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of England without giving effect to any choice or conflict of
law provision or rule that would cause the application of the laws of
any jurisdiction other than that of England.
(i) AMENDMENTS AND WAIVERS
No amendment of any provision of this Agreement shall be valid unless
the same shall be in writing and signed by Buyer and Seller. No
waiver by any Party of any default, misrepresentation, or breach of
warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default,
misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.
(j) SEVERABILITY
Any term or provision of this Agreement that is invalid or
unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or
provision in any other situation or in any other jurisdiction.
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(k) EXPENSES
Each of Buyer and Seller will bear its own costs and expenses
(including legal fees and expenses) incurred in connection with this
Agreement and the transactions contemplated hereby. Stamp duty
payable on the sale and purchase of the Sale Shares shall be borne by
Buyer.
(l) CONSTRUCTION
The Parties have participated jointly in the negotiation and drafting
of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted
jointly by the Parties and no presumption or burden of proof shall
arise favouring or disfavouring any Party by virtue of the authorship
of any of the provisions of this Agreement. Any reference to any
federal, state, local, or foreign statute or law shall be deemed also
to refer to all rules and regulations promulgated thereunder, unless
the context requires otherwise. The word "including" shall mean
including without limitation. Reference to the singular includes a
reference to the plural and vice versa and reference to any gender
includes a reference to all other genders. Where any warranty is
qualified by the expression "to the best of Seller's knowledge" or
"known to Seller" or any similar expression, that warranty shall be
deemed to be made to the best of the knowledge of all employees of
Motorola Inc. (or its Affiliated Entities) who have been or are
involved in the management of the Company.
(m) INCORPORATION OF ANNEXES, SCHEDULES AND EXHIBITS
The Schedules and Exhibits identified in this Agreement are
incorporated herein by reference and made a part hereof.
33
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the date
first above written.
Motorola International Development Corporation
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------------
Title: By POA
---------------------------------------
Witnessed by: 1 /s/
------------------------------
2 /s/
------------------------------
International Wireless Communications Pakistan Limited
By: /s/ Xxxxxxx Xxxxx /s/ Xxxxx Xxxxx
--------------------------------------------------
Title: Director Director
-----------------------------------------------
Witnessed by: 1 /s/
------------------------------
2 /s/
------------------------------
34
