SHARE PURCHASE AGREEMENT between T-MOBILE AUSTRIA GMBH and T-MOBILE GLOBAL HOLDING NR.3 GMBH and WESTERN WIRELESS INTERNATIONAL AUSTRIA CORPORATION Dated as of August 10, 2005
Exhibit 2
Page
between
T-MOBILE
AUSTRIA GMBH
and
T-MOBILE
GLOBAL HOLDING NR.3 GMBH
and
WESTERN
WIRELESS INTERNATIONAL AUSTRIA CORPORATION
Dated
as of August 10, 2005
TABLE
OF
CONTENTS
Page
|
1
|
||
|
11
|
||
|
11
|
||
|
16
|
||
|
16
|
||
|
16
|
||
|
17
|
||
|
17
|
||
|
17
|
||
|
18
|
||
|
18
|
||
|
18
|
||
|
21
|
||
|
21
|
||
|
22
|
||
|
23
|
||
|
23
|
||
|
23
|
||
|
24
|
||
|
25
|
||
|
25
|
||
|
26
|
||
|
26
|
||
|
28
|
||
|
29
|
||
|
29
|
||
|
30
|
||
|
31
|
||
|
31
|
||
|
33
|
||
|
33
|
||
|
33
|
||
|
33
|
||
|
34
|
||
|
35
|
||
|
35
|
||
|
35
|
||
|
36
|
||
|
37
|
||
|
37
|
||
|
37
|
||
|
37
|
||
|
37
|
||
|
38
|
||
|
38
|
||
|
38
|
||
|
38
|
||
|
42
|
||
|
43
|
||
|
43
|
||
|
45
|
||
|
45
|
||
|
45
|
||
|
45
|
||
|
46
|
||
|
46
|
||
|
46
|
||
|
46
|
||
|
48
|
||
|
49
|
||
|
49
|
||
|
49
|
||
|
51
|
||
|
51
|
||
|
52
|
||
|
52
|
||
|
55
|
||
|
55
|
||
|
55
|
||
|
58
|
||
|
59
|
||
|
62
|
||
|
64
|
||
|
64
|
||
|
64
|
||
|
64
|
||
|
64
|
||
|
65
|
||
|
65
|
||
|
66
|
||
|
66
|
||
|
67
|
||
|
67
|
||
|
68
|
||
|
69
|
||
Exhibits
Exhibit
A Documents
supplied to the Purchaser
Schedules
| 1. |
Disclosure
Schedule
|
| 2. |
Completion
Accounts
|
| 3. |
Purchase
Price Adjustment Target Amounts
|
| 4. |
Company
Reorganization Description
|
| 5. |
Working
Capital Line Items
|
| 6. |
Share
Transfer Agreements
|
Attachments
| 1. |
Form
of Vendor Guarantee
|
| 2. |
Form
of ALLTEL letter
|
Share
Purchase Agreement, dated as of August 10, 2005, between T-Mobile Global
Holding
Nr.3 GmbH, a German company (the “First
Purchaser”),
T-Mobile Austria GmbH, an Austrian company (the "Second
Purchaser")
(the
First Purchaser and the Second Purchaser are collectively referred to herein
as
the "Purchaser")
and
Western Wireless International Austria Corporation, a Delaware corporation
(the
“Seller”);
WHEREAS,
the Seller owns all Gesch’ftsanteile, representing the entire issued and
outstanding Stammkapital of EHG Einkaufs- und Handels GmbH, an Austrian limited
liability company (“EHG”),
which
in turn owns a Gesch’ftsanteil which represents the entire issued and
outstanding Stammkapital of tele.ring Telekom Service GmbH, an Austrian limited
liability company (the “Company”)
and a
Gesch’ftsanteil which represents the entire issued and outstanding Stammkapital
of TRA 3G Mobilfunk GmbH, an Austrian limited liability company (“TRA”)
and a
Gesch’ftsanteil which represents the entire issued and outstanding Stammkapital
of EKOM 3G Mobilfunk GmbH (in liquidation), an Austrian limited liability
company (“EKOM”);
WHEREAS,
prior to the Closing Date, the Seller will, subject to Section 5.8 below,
effect
the Company Reorganization (as defined below) as a result of which the Seller
will own all Gesch’ftsanteile, representing the entire issued and outstanding
Stammkapital of the Company; and
WHEREAS,
the Purchaser desires to purchase from the Seller, and the Seller desires
to
sell to the Purchaser, all Gesch’ftsanteile, representing the entire issued and
outstanding Stammkapital of the Company in exchange for the consideration
set
forth herein, upon the terms and conditions set forth in this
Agreement.
NOW,
THEREFORE, it is hereby agreed as follows:
DEFINITIONS
“Acquisition
Transaction”
has the
meaning set forth in Section 5.9.
“Actual
ARPU”
means
the ARPU (in euros) of the Target Group for the last three complete calendar
months prior to the Reference Date (or for September 2005, October 2005 and
November 2005 if the Reference Date is on or after December 1, 2005), as
set
forth in the Statement delivered pursuant to Section 2.2(b) and subsequently
confirmed or revised in the Statement prepared pursuant to Schedule 2.
“Actual
Customer Number”
means
the number of Customers of the Target Group on the last day of the last complete
calendar month prior to the Reference Date (or on 30 November 2005 if the
Reference Date is on or after December 1, 2005), as set forth in the Statement
delivered pursuant to Section 2.2(b) and subsequently confirmed or revised
in
the Statement prepared pursuant to Schedule 2.
“Adjusted
Shortfall Percentage”
has the
meaning set forth in Section 2.1(c).
“Affiliate”
means,
with respect to a specified Person, a Person that directly, or indirectly
through one or more intermediaries, controls, is controlled by, or is under
common control with, the Person specified. The term “control” as used in the
preceding sentence shall mean, with respect to any Person, (i) the right
to
exercise, directly or indirectly, 50% or more of the voting rights attributable
to the shares or other equity of such Person or (ii) the possession, directly
or
indirectly, of the power to direct or cause the direction of the management
or
policies of such Person.
“Agreement”
means
this Share Purchase Agreement, including all Exhibits and Schedules hereto,
as
it may be amended, modified or supplemented from time to time in accordance
with
its terms.
“ALLTEL”
means
ALLTEL Corporation, a company organised under Delaware law.
“ARPU”
means,
in relation to any period:
(a) the
Target Group's mobile service revenues from post-paid Customers for such
period
comprised of:
(i) monthly
fees, plus
(ii) charges
for airtime and data usage that are not included in the monthly fee,
plus
(iii) roaming
charges generated by the Target Group's own Customers traveling in other
markets
(including any wholesale costs which are passed on to the foreign network),
plus
(iv) incoming
revenues (i.e. termination revenues), plus
(v) one
time
fees (but not activation fees), less
(vi) free
call
credits and all sales reductions
divided
by
(b) the
average number of Customers for such period (i.e. the number of Customers
on the
first day of such period plus the number of Customers on the last day of
such
period, divided by 2),
divided
by
(c) the
number of months to which such period relates,
and
for
the avoidance of doubt, does not include activation fees nor visitor roaming
revenues.
“ARPU
Shortfall Percentage”
has the
meaning set forth in Section 2.1(c).
“ARPU
Windfall Percentage”
has the
meaning set forth in Section 2.1(c).
“Austrian
GAAP”
means
the accounting rules and principles in effect in Austria from time to time
under
the Austrian Commercial Code (HGB).
“Business
Day”
means
any day except a Saturday, a Sunday or a legal holiday in the City of Vienna,
Austria or the City of New York, New York, United States.
"Capital
Expenditure Budget"
means
the capital expenditure budget of the Target Group for the year ending December
31, 2005, which is attached as Section 3.28 of the Disclosure
Schedule.
“Claim
Amount”
has the
meaning set forth in Section 6.2(a).
“Closing”
has the
meaning set forth in Section
2.2(a).
“Closing
Date”
has the
meaning set forth in Section
2.2(a).
“Closing
Date Payment”
has the
meaning set forth in Section 2.1(g).
“Code”
means
the United States Internal Revenue Code of 1986, as amended.
“Communications
Applications”
has the
meaning set forth in Section
5.4(b)(ii).
“Company”
has the
meaning set forth in the first recital of this Agreement.
“Company
Benefit Plan”
has the
meaning set forth in Section
3.18(a).
“Company
Consents”
has the
meaning set forth in Section
3.4.
“Company
Licenses”
has the
meaning set forth in Section
3.21(d).
“Company
Material Contracts”
has the
meaning set forth in Section
3.12(a).
“Company
Permits”
has the
meaning set forth in Section
3.20(b).
“Company
Reorganization”
has the
meaning set forth in Section
5.8(a).
“Company
Shares”
has the
meaning set forth in Section
3.6.
"Competition
Laws"
has the
meaning set forth in Section
3.25.
“Completion
Accounts”
means
the profit and loss account of the Company for the period starting on the
day
after the Last Accounting Date and ending on the Closing Date, and the balance
sheet of the Company as at the Closing Date and all attached notes, to be
prepared in accordance with Schedule 2.
“Conditions
Precedent”
means
each of the conditions to Closing set forth in Article
6
of this
Agreement.
“Confidential
Information”
means
all information which is used in or otherwise relates to any Target Company's
business, customers or financial or other affairs including, without limitation,
information relating to:
(a) the
marketing of goods or services including, without limitation, customer names
and
lists and other details of customers, sales targets, sales statistics, market
share statistics, prices, market research reports and surveys, and advertising
or other promotional materials; or
(b) future
projects, business development or planning, commercial relationships and
negotiations,
but
does
not include information that (i) is or becomes generally available to the
public
other than as a result of a disclosure by the Seller or its Affiliates or
representatives, (ii) is or was lawfully obtained by the Seller from a third
party that, to the Seller's knowledge, has no obligation to maintain the
information confidential, (iii) is lawfully obtained by the Seller after
the
Closing Date, (iv) is independently developed by the Seller without use of
any
non-public information, (v) is required to be disclosed pursuant to a Law,
a
rule or regulation of any Governmental Entity, or (vi) is generally known
or
used by the Seller or its Affiliates in its other businesses and not related
specifically to the Target Companies.
“Confidentiality
Agreement”
has the
meaning set forth in Section
5.2.
“Contract”
means
any agreement, arrangement or understanding, written or oral.
“covenants”,
when
referring to covenants in this Agreement, includes, for the avoidance of
doubt,
the Covenants.
“Covenant”
means a
covenant, agreement or obligation set forth in Section 5.1 of this
Agreement.
"Current
Tax Audit"
means
the audit (Steuerprüfung) currently being conducted by the Tax Audit Authority
with respect to the corporate income tax position of the Company and EHG
with
respect to the years 1999 through 2002 (inclusive).
“Customer”
means a
post-paid subscriber to the services of the Target Group (i) with an activated
SIM-card that is subject to a valid contract and (ii) whose payment obligations
under such contract are not more than 16 working days overdue. The definition
of
“Customer” excludes subscribers under employee plans, demonstration and test
phones, and subscribers on service plans which have a monthly total charge
of
EUR 5 or less. For the avoidance of doubt, the issuance of any additional
SIM-card(s) to any existing customer(s), used with the same phone number(s),
shall not mean that the recipient(s) of such additional SIM-card(s) is or
are
considered as an additional customer or customers in respect of each SIM-card
so
received.
“Customer
Number Shortfall Percentage”
has the
meaning set forth in Section 2.1(c).
“Customer
Number Windfall Percentage”
has the
meaning set forth in Section 2.1(c).
“Data
Room Documents”
has the
meaning set forth in Section 5.12.
“director”
or
“officer”,
when
applied to an Austrian company, means Aufsichtsratsmitglied(er) or
Gesch’ftsführer respectively.
“Disclosure
Schedule”
has the
meaning set forth in the introductory paragraph of Article
3.
“EHG”
has the
meaning set forth in the first recital of this Agreement.
“EHG
Shares”
has the
meaning set forth in Section
3.6(c).
“EKOM”
means
EKOM 3G Mobilfunk GmbH (in liquidation), an Austrian limited liability
company.
“EKOM
Shares”
has the
meaning set forth in Section
3.6(g).
“Employees”
has the
meaning set forth in Section 3.17(a).
“Environmental
Law”
has the
meaning set forth in Section
3.22(a).
“Event”
means
an event, act, transaction or omission, including, without limitation, a
receipt
or accrual of income or gains, distribution, failure to distribute, acquisition,
disposal, transfer, payment, loan or advance.
"Exhibited
Documents"
means
the documents supplied to the Purchaser by the Seller and appended hereto
as
Exhibit A.
“Financial
Statements”
has the
meaning set forth in Section
3.8(a).
“First
Share Transfer Agreement”
means
an Austrian notarial deed of transfer in conformity with the Share Transfer
Agreement attached hereto as Part A of Schedule 6.
“First
Transfer”
has the
meaning set forth in Section 2.1(a).
“Governing
Documents”
means
the documents by which any Person (other than an individual) establishes
its
legal existence or which govern its internal affairs. For example, the
“Governing Documents” of an Austrian limited liability company (GmbH) would
include its Gesellschaftsvertrag, any Gesch’ftsordnung für den Aufsichtsrat, and
any Gesch’ftsordnung für die Gesch’ftsführung.
“Governmental
Entity”
means
any branch of any federal, state or local government, and any regulatory
agency,
bureau, commission, court, department, body, entity, authority or other
instrumentality thereof.
"Income
Tax"
means
Einkommensteuer according to the Austrian Income Tax Act (Einkommensteuergesetz)
and Körperschaftsteuer according to the Austrian Corporate Income Tax Act
(Körperschaftssteuergesetz) (together with any and all interest, penalties,
additions to tax and additional amounts imposed with respect
thereto).
“Indebtedness”
of any
Person shall mean all obligations of such Person (whether for principal,
interest, premiums, prepayment fees, penalties or otherwise) (i) for or in
respect of borrowed money, (ii) evidenced by notes, bonds, debentures or
similar
instruments, (iii) for or in respect of the deferred purchase price of goods
or
services, (iv) under or arising from leases which are required to be capitalized
in accordance with Austrian GAAP or (v) in the nature of guarantees of any
of
the obligations described in clauses (i) through (iv) above of any other
Person.
"Indemnified
Party"
means
(i) the Seller Indemnified Party with respect to any claims against the
Purchaser pursuant to Article 8; and (ii) the Purchaser Indemnified Party
with
respect to any claims against the Seller pursuant to Article 8.
"Indemnifying
Party"
means
(i) the Seller with respect to any claims against the Seller pursuant to
Article
8; and (ii) the Purchaser with respect to any claims against the Purchaser
pursuant to Article 8.
"Intellectual
Property"
means:
(a) patents,
trade marks, service marks, registered designs, applications and rights to
apply
for any of those rights, trade, business and company names, internet domain
names and e-mail addresses, unregistered trade marks and service marks,
copyrights, database rights, rights in software, knowhow, rights in designs
and
inventions;
(b) rights
under licences, consents, orders, statutes or otherwise in relation to a
right
in paragraph (a);
(c) rights
of
the same or similar effect or nature as or to those in paragraphs (a) and
(b)
which now or in the future may subsist; and
(d) the
right
to xxx for past infringements of any of the foregoing rights.
"Intellectual
Property Rights"
has the
meaning set forth in Section 3.15(a).
“Intercompany
Indebtedness”
means
all outstanding Indebtedness owed by any Target Company to the Seller or
any
Affiliates of the Seller (excluding any Target Company).
"June
Management Accounts"
has the
meaning set forth in Section
3.8(b).
"Last
Accounting Date"
means
December 31, 2004.
“Law”
means
applicable common law and any statute, ordinance, code or other law, rule,
permit, permit condition, regulation, order, judgment, injunction, arbitration
award, agency requirement, decree, technical or other standard, requirement
or
procedure enacted, adopted, promulgated, applied or followed by any Governmental
Entity.
"Leases"
has the
meaning set forth in Section 3.16(c).
“License
Consents”
has the
meaning set forth in Section
5.4(b)(ii).
“Lien”
means
any lien, claim, mortgage, encumbrance, pledge, security interest, equity,
charge or third party right or interest of any kind.
"Loss"
has the
meaning set forth in Section
8.3.
"material"
means,
with respect to Articles 3 and 4, anything that a reasonable person would
consider material in the context of the specific provision of this Agreement,
and where such thing concerns a matter which can be measured in euros, anything
(i) relating to, (ii) actually, contingently or potentially creating a liability
for, or (iii) causing a Loss in, an amount exceeding EUR 500,000 (or such
lower
amount as is set forth in the provision concerned), provided that this
definition shall not apply to the definition of Material Adverse Effect or
Sections, 6.2(b), 6.3(b), 7.1(b), 7.1(d) and 7.1(e) and for the avoidance
of
doubt Section 5.4.
“Material
Adverse Effect”
means,
with respect to any Target Company or the Purchaser, as the case may be,
such
state of facts, event, change, effect or development that has had a material
adverse effect on the assets, business operations or financial condition
of the
Target Group, taken as a whole, or of the Purchaser and its Subsidiaries,
taken
as a whole, as the case may be, but shall not include facts, events, changes,
effects or developments (i) (A) generally affecting the wireless voice and
data
or wireline industries in Austria or the European Union, including regulatory
and political developments, and including the state act on taxes for not
sharing
wireless towers enacted by the government of Lower Austria (Niederösterreich)
and any similar enactment by any Governmental Entity, (B) generally affecting
the economy or financial markets in Austria or the European Union, or (C)
in
national or international political or social conditions including the
occurrence of any military or terrorist attack upon or within Austria or
the
European Union, or (ii) resulting from the announcement or the existence
of this
Agreement and the Transactions.
"Maximum
Cash Extraction Amount"
has the
meaning set forth in Section 5.13.
“Merger
Authority Consents”
has the
meaning set forth in Section
5.4(b)(i).
“Microwave
Licenses”
has the
meaning set forth in Section 3.21(d).
“National
Company Licenses”
has the
meaning set forth in Section 3.21(a).
"NOL
Adjustment Amount"
has the
meaning set forth in.Section
2.1(d)(ii).
“Order”
means
any order, writ, injunction, decree, judgment, award, determination or written
direction of any arbitrator or Governmental Entity.
“Permitted
Liens”
means
(1) Liens for current taxes not yet due and payable or that are being contested
in good faith by appropriate proceedings for which adequate reserves have
been
established, (2) Liens imposed by Law and incurred in the ordinary course
of
business for obligations not past due, (3) workers’, mechanics’, materialmen’s,
repairmen’s, suppliers’, carriers’ or similar Liens arising in the ordinary
course of business with respect to obligations that are not delinquent or
that
are being contested in good faith by appropriate proceedings,
(4) covenants, zoning restrictions, easements, licenses, or other
restrictions on the use of real property or other minor irregularities in
title
(including leasehold title) thereto, so long as the same do not materially
impair the use of such real property, leases or leasehold estates, (5) any
Liens which do not materially impair the value of the property subject to
such
Lien or the use of such property in the conduct of the business of any Target
Company, (6) Liens securing debt or other obligations or liabilities of a
Target
Company that are either (i) disclosed by the Seller pursuant to this Agreement
or (ii) are thereafter provided, granted, incurred or suffered to exist by
them
in connection with any amendment, modification, waiver, restructuring or
refinancing of any such debt, obligations or liabilities in conformity with
this
Agreement and with the consent of the Purchaser, (7) Liens securing the
performance of bids, tenders, leases, Contracts, statutory obligations, surety,
customs and appeal bonds and other obligations of like nature, incurred in
the
ordinary course of business, and (8) extensions, renewals and replacements
of
Liens referred to in the foregoing clauses (1) through (7).
“Person”
means
any individual or entity, including any corporation, partnership, limited
liability company, joint venture, trust, unincorporated organization or
Governmental Entity.
“Policies”
has the
meaning set forth in Section 3.14(a).
“Pre-Adjustment
Purchase Price”
has the
meaning set forth in Section
2.1(a).
“Pre-Closing
Period”
has the
meaning set forth in Section
5.12(c)(i).
“Property”
has the
meaning set forth in Section 3.16(b).
“Purchase
Price”
has the
meaning set forth in Section
2.1(a).
“Purchaser”
has the
meaning set forth in the preamble.
"Purchaser
Indemnified Party"
has the
meaning set forth in Section
8.3.
“Purchaser's
Accountants”
means
PricewaterhouseCoopers (being a different team from the Sellers' Accountants)
or
such other accountancy firm of international repute as may be appointed by
the
Purchaser.
“RAN
Sites”
has the
meaning set forth in Section 3.30(c).
“Reference
Date”
means
the later of (1) the date on which the last of the Conditions Precedent (other
than those that by their nature are to be satisfied at Closing) is satisfied
or
waived and (2) the date falling 5 Business Days before October 12, 2005 (or
if
October 12, 2005 is not a Business Day, the next following Business
Day).
“Relevant
Breach”
has the
meaning set forth in Section 8.3.
“Representatives”
has the
meaning set forth in Section
5.2.
“RTR-GmbH”
has the
meaning set forth in Section
3.21(a).
“SAR
Plan”
means
the tele.ring Telekom Service GmbH Stock Appreciation Plan, a copy of which
is
set forth in the Exhibited Documents.
“Second
Share Transfer Agreement”
means
an Austrian notarial deed of transfer in conformity with the Share Transfer
Agreement attached hereto as Part B of Schedule 6.
“Second
Transfer”
has the
meaning set forth in Section 2.1(a).
“Seller”
has the
meaning set forth in the preamble.
"Seller
Indemnified Party"
has the
meaning set forth in Section
8.3.
"Seller's
Accountants"
means
PricewaterhouseCoopers (being a different team from the Purchaser's Accountants)
or such other accountancy firm of international repute as may be appointed
by
the Seller.
“Seller's
Lawyers”
means
Xxxxxxxx Xxxxxx Xxxxxx & Xxxxxxx LLP of 0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000.
“Share
Transfer Agreements”
means
the First Share Transfer Agreement and the Second Share Transfer
Agreement.
“Shortfall
Percentage”
has the
meaning set forth in Section 2.1(c).
“Statement”
has the
meaning set forth in Section 2.2(b) and Schedule 2 (and shall be construed
in
accordance with the definition set forth in such Section or Schedule as that
in
which it is used).
“Step
Plan”
has the
meaning set forth in Section 5.8.
“Subsidiary”
means,
as to any Person, a corporation or other entity whose shares of capital stock
or
other ownership interests having or controlling (either alone or pursuant
to an
agreement with other shareholders) (a) a majority of the voting rights or
(b) a
right (other than shares of capital stock or other ownership interests having
such power only by reason of the occurrence of a contingency) to elect a
majority of the directors of or other Persons performing similar functions
for
such corporation or entity, are owned, directly or indirectly, by such
Person.
“Target
Company”
means
any of the Company, TRA and EKOM and (prior to the Company Reorganization)
EHG,
and "Target
Group"
means
all of them.
“Target
ARPU”
means
(in euros) the number set forth in column 2 of Part A of Schedule 3 and
intersecting row in the same table which corresponds to the date for which
the
Actual ARPU has been calculated.
“Target
Customer Number”
means
the number of Customers set forth in column 3 of Part A of Schedule 3 and
intersecting row in the same table which corresponds to the date for which
the
Actual Customer Number has been calculated.
“Target
Working Capital”
means
the target working capital amount (in euros) of the Company set forth in
column
4 of Part A of Schedule 3 and intersecting row in the same table which
corresponds to the last complete calendar month prior to the Reference Date
(or,
if the Reference Date is the last day of a calendar month, corresponds to
that
month).
“Tax
Audit Authority”
means
the department of the competent tax office (Vienna 1st
and
23rd
district) of the Company and EHG conducting a tax audit of the Company and
EHG.
“Tax
Authority”
has the
meaning set forth in Section
3.23(f).
“Tax
Return”
has the
meaning set forth in Section
3.23(f).
“Taxes”
has the
meaning set forth in Section
3.23(f).
“Termination
Date”
has the
meaning set forth in Section
5.1.
“Third
Party Claim”
has the
meaning set forth in Section 8.1(h).
"3G
License"
means
the 3G license described in Section 3.9(c) of the Disclosure Schedule, issued
under the Austrian Telecommunications Act.
“TKK”
has the
meaning set forth in Section
3.21(a).
“TRA”
has the
meaning set forth in the first recital of this Agreement.
“TRA
Shares”
has the
meaning set forth in Section
3.6(e).
“Transactions”
means
the transactions contemplated by this Agreement.
“United
States”
or
“U.S.”
means
the United States of America.
"Vendor
Group Loan"
means
the Revolving Loan Facility Offer, dated February 14, 2005, between the Company
and the Seller and any other Indebtedness owed (including interest) by any
member of the Target Group to the Seller or its Affiliates (other than any
member of the Target Group) pursuant to intercompany advance
accounts.
“Vendor
Guarantee”
means
the guarantee in the form set forth in Attachment 1 to be executed and delivered
by the Vendor Guarantor at Closing.
"Vendor
Guarantor"
means
Western Wireless LLC, a limited liability company organised under the laws
of
Washington.
"Warranty"
has the
meaning set forth in Article 3.
"Warranty
Claim"
means a
claim by the Purchaser in relation to a Warranty.
“Windfall
Percentage”
has the
meaning set forth in Section 2.1(c).
"Working
Capital"
means
the working capital of the Target Group (determined in accordance with Austrian
GAAP and the specific balance sheet items which are set out in Schedule 5)
comprising:
(a) current
assets comprised of the following but excluding cash and cash
equivalents:
(i) trade
accounts receivable less allowances for doubtful accounts;
(ii) inventory;
(iii) other
receivables;
(iv) related
party receivables; and
(v) prepaid
and other current assets,
(b) less
current liabilities, comprised of:
(i) accounts
payable;
(ii) construction
accounts payable;
(iii) other
current liabilities and accrued expenses;
(iv) accrued
SAR Plan liabilities; and
(v) customer
deposits and unearned revenue.
PURCHASE
AND SALE
| Section 2.1 |
Purchase
and Sale
|
(a) Subject
to the terms and conditions of this Agreement (including in particular, but
not
limited to, Sections 5.8(a) and 5.8(b)):
(i) the
Seller agrees to sell to the First Purchaser, and the First Purchaser agrees
to
purchase from the Seller, 0.001% of the Company Shares (the "First
Transfer");
and
(ii) the
Seller agrees to sell to the Second Purchaser, and the Second Purchaser agrees
to purchase from the Seller, 99.999% of the Company Shares (the "Second
Transfer"),
together
representing 100% of the share capital of the Company, free of all Liens
(other
than those restrictions on transfer of the Company Shares under applicable
Law
which are set forth in Section 3.6 of the Disclosure Schedule) for an aggregate
purchase price of EUR 1,300,000,000 (the "Pre-Adjustment
Purchase Price")
subject to the adjustments set forth in Sections 2.1(c), (d) and (e) below
(such
adjusted amount being the "Purchase
Price"),
provided always that the total Purchase Price shall not exceed
EUR 1,300,000,000.
(b) Within
1
Business Day of production of the documents referred to in Section 2.2(b),
the
Seller shall deliver to the Purchaser a Statement of the amounts referred
to in
Section
2.1(c)
in
accordance with Section 2.2(b). Subject to Section 2.1(g), the Closing Date
Payment set forth on the Statement shall be the amount payable at
Closing.
(c) The
following definitions shall apply in this clause and in this Agreement
generally:
“ARPU
Shortfall Percentage”
means
|
95%
of Target ARPU - Actual ARPU
|
X
100.
|
|
95%
of Target ARPU
|
“ARPU
Windfall Percentage”
means
|
Actual
ARPU - 105% of Target ARPU
|
X
100.
|
|
105%
of Target ARPU
|
“Customer
Number Shortfall Percentage”
means
|
95%
of Target Customer Number - Actual Customer Number
|
X
100.
|
|
95%
of Target Customer Number
|
“Customer
Number Windfall Percentage”
means
|
Actual
Customer Number - 105% of Target Customer Number
|
X
100.
|
|
105%
of Target Customer Number
|
“Shortfall
Percentage”
means
the sum of any Customer Number Shortfall Percentage (if greater than zero)
and
any ARPU Shortfall Percentage (if greater than zero).
“Windfall
Percentage”
means
the sum of any Customer Number Windfall Percentage (if greater than zero)
and
any ARPU Windfall Percentage (if greater than zero).
If:
(i) the
Actual Customer Number is 5% or more lower than the Target Customer Number;
and/or
(ii) the
Actual ARPU is 5% or more lower than the Target ARPU,
then
the
Pre-Adjustment Purchase Price shall be reduced by a percentage equal to 81.1%
of
the Shortfall Percentage, provided always that:
(A) if
the
Actual Customer Number is 5% or more greater than the Target Customer Number;
and/or
(B) if
the
Actual ARPU is 5% or more greater than the Target ARPU,
then
the
Shortfall Percentage shall be reduced by the amount of the Windfall Percentage
(the "Adjusted
Shortfall Percentage")
(and
accordingly, if the Adjusted Shortfall Percentage is a positive number, the
Pre-Adjustment Purchase Price shall be reduced by a percentage equal to 81.1%
of
the Adjusted Shortfall Percentage).
It
is
agreed that:
(i) should
the Windfall Percentage exceed the Shortfall Percentage, there shall be no
adjustment to the Pre-Adjustment Purchase Price pursuant to this Section
2.1(c),
nor any set-off to any reduction of the Pre-Adjustment Purchase Price pursuant
to Section 2.1(d);
(ii) should
there be no reduction of the Pre-Adjustment Purchase Price pursuant to Section
2.1(g), then the Closing Date Payment shall be EUR 1,300,000,000;
and
(iii) examples
of the application of this Section 2.1(c) are set forth in Part B of Schedule
3.
(d) Subsequent
to the Closing, the Purchase Price shall be further reduced by:
(i) any
amount by which the sum of (1) the Working Capital of the Target Group; and
(2)
any
cash or cash equivalent balance, in both cases as shown in the balance sheet
constituting part of the Completion Accounts, is less than the Target Working
Capital; and
(ii) if
the
Current Tax Audit has not been completed by the Tax Audit Authority prior
to the
Closing Date, an
amount
equal to 15% of the amount of a shortfall below EUR 800,000,000 in the amount
of
the tax losses and tax loss carryforwards (Verlustvortrag) available to the
Company with respect to the period from its formation until December 31,
2002,
based solely on the audit report (Betriebsprüfungsbericht) of the Tax Audit
Authority issued in connection with the completion of the Current Tax Audit,
(such 15% of any such shortfall being the "NOL
Adjustment Amount").
(e) Finally,
subject to Section
7.1(f)(ii),
if the
Statement shows that, on the basis of the definitive Actual ARPU and Actual
Customer Number, the application of Section 2.1(c) would have resulted in
a
Closing Date Payment that would have been higher or lower than the Closing
Date
Payment that was actually made on the Closing Date, the Pre-Adjustment Purchase
Price shall be adjusted accordingly.
(f) The
provisions of Schedule 2 shall apply in respect of the preparation of the
Completion Accounts and the agreement or determination of the adjustment
to the
Purchase Price (in relation to both Section
2.1(d)(i)
and
Section
2.1(e)).
(g) At
Closing, subject to Section
7.1(f)(ii),
the
Purchaser shall pay to the Seller an amount (the "Closing
Date Payment")
equal
to:
(i) the
Pre-Adjustment Purchase Price; less
| (ii) |
the
sum of (A) the amount (if any) whereby the Pre-Adjustment
|
Purchase
Price is reduced pursuant to Section
2.1(c)
and (B)
if the Current Tax Audit has been completed by the Tax Audit Authority prior
to
the Closing Date, the NOL Adjustment Amount, if applicable.
(h) If
the
Purchase Price (as determined in accordance with the above) is reduced after
the
Closing Date:
| (i) |
pursuant
to Section 2.1(e); or
|
| (ii) |
pursuant
to Section 2.1(d)(ii) upon completion of the Current Tax
|
Audit
in
circumstances where the Current Tax Audit was not completed by the Tax Audit
Authority prior to the Closing Date, but the Seller has waived the Condition
Precedent set forth in Section
6.3(e)
and
Closing occurred,
then
the
Seller shall pay to the Purchaser:
| (A) |
an
amount equal to the relevant reduction;
and
|
| (B) |
in
the case of any reduction pursuant to Section
2.1(e),
interest on that amount at 5 per cent. per annum (accrued daily
and
compounded monthly) for the period from the Closing Date to the
date of
payment.
|
(i) If
the
Purchase Price (as determined in accordance with the above) is increased
after
the Closing Date pursuant to Section 2.1(e) or Section 2.1(k), then the
Purchaser shall pay to the Seller:
(i) an
amount
equal to the increase; and
(ii) interest
on that amount at 5 per cent. per annum (accrued daily and compounded monthly)
for the period from the Closing Date to the date of payment.
(j) Payments
under Section
2.1(h)
or
Section
2.1(i)
(as the
case may be) shall be made within seven days starting on the day after (as
the
case may be) (i) agreement or determination of the Completion Accounts and
the
adjusted Purchase Price in accordance with Schedule 2 or (ii) completion
of the
Current Tax Audit by the Tax Audit Authority (or, if applicable, the audit
procedure set forth in Section 2.1(k)), by wire transfer of immediately
available funds pursuant to the Purchaser’s or the Seller's (as the case may be)
written instructions delivered at least 2 Business Days before the date of
payment.
(k) In
the
event that the Current Tax Audit is completed by the Tax Audit Authority,
but
either the Seller (before or after Closing) or (subject to the last sentence
of
this Section 2.1(k)) the Purchaser (after Closing) wishes to challenge any
element of the assessment issued by the Tax Audit Authority, then the Purchase
Price (and the Closing Date Payment, if applicable) shall nevertheless be
determined solely on the basis of the audit report (Betriebsprüfungsbericht) as
issued by the Tax Audit Authority, but if the outcome of the challenge is
such
that the Purchase Price (and the Closing Date Payment, if applicable) would
have
been higher if the assessment had reflected such outcome from the beginning,
Section
2.1(i)
shall
apply mutatis mutandis to the amount of the difference, provided that any
challenge by the Purchaser shall not affect the effect of Section
2.1(l).
For the
avoidance of doubt: (1) if prior to Closing the Purchaser wishes to challenge
any element of the assessment issued by the Tax Audit Authority, such challenge
shall be pursued, but if Closing does not subsequently occur there shall
be no
obligation on any party to pursue such challenge; and (2) the Seller shall
not
have any liability to the Purchaser, and there shall be no adjustment to
the
Purchase Price, if as a result of any challenge the Purchase Price would
have
been reduced if the assessment had reflected such outcome from the
beginning.
(l) For
the
avoidance of doubt: (1) the only adjustment to the Purchase Price by reason
of
the NOL Adjustment Amount shall be pursuant to Section
2.1(d)(ii),
Section
2.1(g)(ii) and Section 2.1(k); and (2) there shall be no Purchase Price
adjustment by reason of the NOL Adjustment Amount to the extent such adjustment
is attributable to any actions taken or failure to act by the Purchaser or
its
Affiliates prior to, on or after the Closing Date, or from the Company
Reorganization; and (3) completion of the Current Tax Audit and compliance
with
the provisions of this Section
2.1
shall
end all obligations of the Seller for the NOL Adjustment Amount.
| Section 2.2 |
Closing
|
(a) Subject
to the terms and conditions of this Agreement, the closing of the purchase
and
sale of the Company Shares (the “Closing”)
shall
take place at the offices of Freshfields Bruckhaus Xxxxxxxx, Xxxxxxxxxxx
00,
0000 Xxxxxx, starting at 10:00 a.m. local time five Business Days after the
Reference Date, provided always that if the fifth Business Day after the
Reference Date falls within the first ten days of a month and before
December 31, 2005, then Closing shall take place on the later
of the
fifth Business Day falling after the Reference Date and the first Business
Day
falling after the eleventh day of that month, or at such other time and place
as
the parties may agree (the “Closing
Date”).
(b) In
order
to facilitate and in preparation for the process envisaged by Section 2.2(a)
above, the Seller shall procure that by the tenth day of each month prior
to
Closing (excluding August 2005, September 2005 and any month after December
2005) there shall be produced (in any event) and delivered to the Purchaser
in
accordance with Section 2.1(b) (if Closing is to take place in or in relation
to
the figures for that month) a statement setting forth (i) a calculation of
the
Actual ARPU for the last three complete calendar months (save where such
number
will, in accordance with the definition of Actual ARPU, not have changed
since
the previous month); (ii) a calculation of the Actual Customer Number on
the
last day of the last complete calendar month (save where such number will,
in
accordance with the definition of Actual Customer Number, not have changed
since
the previous month); (iii) the Shortfall Percentage (if any) and Windfall
Percentage (if any) and Adjusted Shortfall Percentage (if appropriate); (iv)
the
Closing Date Payment (the items referred to in clauses (i) through (iv) being
referred to as the "Statement");
(v)
evidence to justify the calculations in the Statement; and (vi) a certificate
from an officer of the Company or the Seller, confirming that in his good
faith
judgment the calculations of the items constituting the Statement have been
correctly made.
| Section 2.3 |
Transfer
of Shares
|
Subject
to the terms of this Agreement, at the Closing, the Seller shall assign the
Company Shares to the Purchaser, and the Purchaser shall accept such assignment
by the execution by the Seller and the First Purchaser of the First Share
Transfer Agreement and the execution by the Seller and the Second Purchaser
of
the Second Share Transfer Agreement against payment of the Closing Date Payment
on account of the Purchase Price by wire transfer of immediately available
funds
pursuant to the Seller's written instructions delivered at least 2 Business
Days
in advance.
REPRESENTATIONS
AND WARRANTIES OF THE
SELLER
(a) The
Seller acknowledges that the Purchaser is entering into this Agreement in
reliance on the Warranties which have also been given as representations
and
with the intention of inducing the Purchaser to enter into this
Agreement.
(b) Except
as
disclosed in the corresponding section of the Disclosure Schedule delivered
by
the Seller to the Purchaser prior to the execution of this Agreement (the
“Disclosure
Schedule”)
(it
being agreed that (1) disclosure of any item in any section of the Disclosure
Schedule shall be deemed disclosure with respect to any other section of
this
Article
3
to which
the relevance of such item is reasonably apparent from the face of such
disclosure and (2) all matters not reasonably apparent from the Disclosure
Schedule are deemed not to be disclosed), the Seller represents and warrants
to
the Purchaser that each statement set forth in this Article 3 (each a
"Warranty")
is
true, accurate and not misleading at the date of this Agreement. Immediately
before Closing, the Seller is deemed to warrant to the Purchaser that the
Warranties are true, accurate and not misleading by reference to the facts
and
circumstances as at Closing (except for changes specifically permitted by
the
terms of this Agreement, including the consummation of the Company
Reorganization, which will result in EHG ceasing to exist), save that where
there is an express reference in a Warranty to the "date of this Agreement"
or
"the date hereof" or words of similar import, that reference is to be construed
only as a reference to the date hereof and not as a reference to the Closing
Date.
| Section 3.1 |
Organization
and Good Standing
|
Each
Target Company and the Seller is a corporation duly organized, validly existing
and in good standing (with respect to jurisdictions that recognize such concept)
under the laws of the jurisdiction of its organization.
| Section 3.2 |
Power
and Authority
|
Each
Target Company and the Seller has all requisite power and authority to own
its
properties and to carry on its business as now being conducted and as proposed
to be conducted. The Seller has all requisite power and authority and has
taken
all action necessary, to execute, deliver and perform its obligations under
this
Agreement and each document to be executed at or before Closing in connection
with this Agreement and the Seller has the requisite power and authority
to
sell, transfer and deliver the Company Shares in accordance with the terms
of
this Agreement.
| Section 3.3 |
Authorization,
Execution and Enforceability
|
The
execution, delivery and performance by the Seller of this Agreement, and
the
sale and transfer of the Company Shares, have been duly authorized by all
necessary action on the part of the Seller. Assuming this Agreement constitutes
a legal, valid and binding agreement of the Purchaser, this Agreement is
a
legal, valid and binding obligation of the Seller, enforceable against the
Seller in accordance with its terms (except to the extent that enforceability
may be limited by applicable bankruptcy, insolvency, reorganization or other
Laws affecting the enforcement of creditors’ rights generally or by principles
governing the availability of equitable remedies).
| Section 3.4 |
Consents
|
Except
as
set forth in Section 3.4 of the Disclosure Schedule (the “Company
Consents”):
(a) no
material consent of, material notice to, or material filing with any
Governmental Entity or any other Person is required to be made or obtained
by
the Seller or any Target Company in connection with the execution, delivery
and
performance of this Agreement or the Transactions; and
(b) no
consent of, notice to, or filing with any Governmental Entity or any other
Person is required to be made or obtained by the Seller or any Target Company
as
a condition to the legality, validity or enforceability of this Agreement,
or
the sale or transfer of the Company Shares.
| Section 3.5 |
No
Conflicts
|
Except
as
set forth in Section 3.5 of the Disclosure Schedule, the execution and delivery
by the Seller of this Agreement does not, and the consummation of the
Transactions and compliance with the provisions hereof will not (i) result
in
any violation of, or default (with or without notice or lapse of time, or
both)
under, or give rise to a right of consent, termination, cancellation or
acceleration of any obligation or to the loss of a material benefit (and
for the
purpose of determining loss of a material benefit such shall be measured
in the
aggregate in respect of claims of the same or a similar nature and shall
only be
deemed a loss of a material benefit if the aggregated value thereof shall
equal
or exceed EUR 2,000,000) under any loan or other instrument of Indebtedness,
guarantee of Indebtedness or credit agreement, note, bond, mortgage, indenture,
Company Material Contract, material permit, material concession, material
franchise, material right or material license binding upon the Seller or
any
Target Company or under any material lease, material agreement, material
Contract or material instrument binding upon the Seller, or result in the
creation of any Lien (other than those restrictions on transfer and other
restrictions under applicable Law which are set forth in Section 3.6 of the
Disclosure Schedule) upon the Company Shares or any of the properties or
assets
of the Seller or any Target Company, (ii) conflict with or result in any
violation of any provision of any Governing Document of the Seller, the Company
or any Target Company, (iii) conflict with or violate any material Laws
applicable to the Seller, any Target Company or any of their respective
properties or assets or (iv) result in any Target Company losing the material
benefit (and for the purpose of determining loss of a material benefit such
shall be measured in the aggregate in respect of claims of the same or a
similar
nature and shall only be deemed a loss of a material benefit if the aggregated
value thereof shall equal or exceed EUR 2,000,000) of any material asset,
grant,
subsidy, right or privilege which it enjoys.
| Section 3.6 |
Capitalization
|
(a) The
Company.
The
issued and outstanding Stammkapital of the Company in the amount of
EUR 60,000,000 is represented by a one Gesch’ftanteil (the “Company
Shares”).
This
Stammkapital will not change as a result of the Company Reorganization. As
of
the date hereof (and also at the Closing Date if the Company Reorganization
is
not effected in accordance with Section 5.8), all of the Company Shares are
(and
will be if the Company Reorganization is not effected) legally and beneficially
owned solely by EHG free and clear of all Liens (other than those restrictions
on transfer and other restrictions under applicable Law which are set forth
in
Section 3.6 of the Disclosure Schedule) and there is no agreement, arrangement
or obligation to create or grant any Lien in relation to the Company Shares.
As
of the Closing Date, upon the consummation of the Company Reorganization
(assuming this is effected in accordance with Section 5.8), all of the Company
Shares will be legally and beneficially owned by the Seller free and clear
of
all Liens (other than restrictions on transfer and other restrictions under
applicable Law which are set forth in Section 3.6 of the Disclosure Schedule)
(and there will be no agreement, arrangement or obligation to create or grant
any Lien in relation to the Company Shares). The Company Shares have been
duly
authorized and validly issued and comprise the whole of the Company's allotted
and issued share capital and are fully paid or credited as fully
paid.
(b) The
Company.
Except
as set forth in Section 3.6(b) of the Disclosure Schedule, there are no
outstanding securities convertible into or exchangeable for any Gesch’ftsanteil
of the Company, or any options, warrants or other rights to subscribe for
or to
purchase, or any agreements (contingent or otherwise) providing for the
creation, allotment, issuance or transfer of, or any calls, commitments or
claims of any character relating to, any Gesch’ftsanteil of the Company or any
securities convertible into or exchangeable for, any Gesch’ftsanteil of the
Company, nor is the Company subject to any obligation (contingent or otherwise)
to redeem, repurchase or otherwise acquire or retire any of its
Gesch’ftsanteile. Except for the rights issued pursuant to the SAR Plan, full
and accurate details of which are set forth in the Exhibited Documents, the
Company has not granted and has not entered into any agreement to grant any
stock appreciation, phantom stock or similar rights.
(c) EHG.
The
issued and outstanding Stammkapital of EHG in the amount of EUR 35,000
is
represented by two Gesch’ftsanteile (the “EHG
Shares”).
As of
the date hereof (and also at the Closing Date if the Company Reorganization
is
not effected in accordance with Section 5.8), all of the EHG Shares are (and
will be if the Company Reorganization is not effected) legally and beneficially
owned by the Seller free and clear of all Liens (other than those restrictions
on transfer and other restrictions under applicable Law which are set forth
in
Section 3.6 of the Disclosure Schedule) and there is no agreement, arrangement
or obligation to create or grant any Lien in relation to the EHG Shares.
The EHG
Shares have been duly authorized and validly issued and comprise the whole
of
EHG's allotted and issued share capital and are fully paid or credited as
fully
paid.
(d) EHG.
There
are no outstanding securities convertible into or exchangeable for any
Gesch’ftsanteil of EHG, or any options, warrants or other rights to subscribe
for or to purchase, or any agreements (contingent or otherwise) providing
for
the creation, allotment, issuance, or transfer of, or any calls, commitments
or
claims of any character relating to, any Gesch’ftsanteil of EHG or any
securities convertible into or exchangeable for, any Gesch’ftsanteil of EHG, nor
is EHG subject to any obligation (contingent or otherwise) to redeem, repurchase
or otherwise acquire or retire any of its Gesch’ftsanteile. EHG has not granted
and has not entered into any agreement to grant any stock appreciation, phantom
stock or similar rights.
(e) TRA.
The
issued and outstanding Stammkapital of TRA in the amount of EUR 35,000
is
represented by one Gesch’ftsanteil (the “TRA
Shares”).
As of
the date hereof (and also at the Closing Date if the Company Reorganization
is
not effected in accordance with Section 5.8), all of the TRA Shares are (and
will be if the Company Reorganization is not effected) legally and beneficially
owned solely by EHG free and clear of all Liens (other than those restrictions
on transfer and other restrictions under applicable Law which are set forth
in
Section 3.6 of the Disclosure Schedule) and there is no agreement, arrangement
or obligation to create or grant any Lien in relation to the TRA Shares.
As of
the Closing Date, as a result of the consummation of the Company Reorganization
(assuming this is effected in accordance with Section 5.8), all of the TRA
Shares will be legally and beneficially owned solely by the Company free
and
clear of all Liens (other than restrictions on transfer and other restrictions
under applicable Law which are set forth in Section 3.6 of the Disclosure
Schedule) and there is no agreement, arrangement or obligation to create
or
xxxxx x Xxxx in relation to the TRA Shares. The TRA Shares have been duly
authorized and validly issued and comprise the whole of TRA's allotted and
issued share capital and are fully paid or credited as fully paid.
(f) TRA.
There
are no outstanding securities convertible into or exchangeable for any
Gesch’ftsanteil of TRA, or any options, warrants or other rights to subscribe
for or to purchase, or any agreements (contingent or otherwise) providing
for
the creation, allotment, issuance or transfer of, or any calls, commitments
or
claims of any character relating to, any Gesch’ftsanteil of TRA or any
securities convertible into or exchangeable for, any Gesch’ftsanteil of TRA, nor
is TRA subject to any obligation (contingent or otherwise) to redeem, repurchase
or otherwise acquire or retire any of its Gesch’ftsanteile. TRA has not granted
and has not entered into any agreement to grant any stock appreciation, phantom
stock or similar rights.
(g) EKOM.
The
issued and outstanding Stammkapital of EKOM in the amount of EUR 36,336.42
is represented by one Gesch’ftsanteil (the “EKOM
Shares”).
As of
the date hereof (and also at the Closing Date if the Company Reorganization
is
not effected in accordance with Section 5.8), all of the EKOM Shares are
(and
will be if the Company Reorganization is not effected) legally and beneficially
owned solely by EHG free and clear of all Liens (other than those restrictions
on transfer and other restrictions under applicable Law which are set forth
in
Section 3.6 of the Disclosure Schedule) and there is no agreement, arrangement
or obligation to create or grant any Lien in relation to the EKOM Shares.
As of
the Closing Date, as a result of the consummation of the Company Reorganization
(assuming this is effected in accordance with Section 5.8), all of the EKOM
Shares will be legally and beneficially owned solely by the Company free
and
clear of all Liens (other than those restrictions on transfer and other
restrictions under applicable Law which are set forth in Section 3.6 of the
Disclosure Schedule). The EKOM Shares have been duly authorized and validly
issued and comprise the whole of EKOM's allotted and issued share capital
and
are fully paid or credited as fully paid.
(h) EKOM.
There
are no outstanding securities convertible into or exchangeable for any
Gesch’ftsanteil of EKOM, or any options, warrants or other rights to subscribe
for or to purchase, or any agreements (contingent or otherwise) providing
for
the creation, allotment, issuance or transfer of, or any calls, commitments
or
claims of any character relating to, any Gesch’ftsanteil of EKOM or any
securities convertible into or exchangeable for, any Gesch’ftsanteil of EKOM,
nor is EKOM subject to any obligation (contingent or otherwise) to redeem,
repurchase or otherwise acquire or retire any of its Gesch’ftsanteile. EKOM has
not granted and has not entered into any agreement to grant any stock
appreciation, phantom stock or similar rights.
(i) No
Target
Company is insolvent (zahlungsunf’hig) or over-indebted (überschuldet) according
to Sections 66 and 67 of the Austrian Bankruptcy Act (Konkursordnung) or
subject
to any other insolvency proceedings and the registered capital of none of
the
Target Companies has been unlawfully distributed to its respective shareholders.
No shares of any Target Company have been redeemed, amortized or purchased
by
the respective entity itself. Except as set forth in Section 3.6(i) of the
Disclosure Schedule, no Target Company has declared, paid or made a dividend
or
distribution with respect to its share capital since the Last Accounting
Date.
(j) Governing
Documents.
The
Seller has made available to the Purchaser correct and complete copies of
all
Governing Documents and company books of each Target Company currently in
effect.
| Section 3.7 |
Subsidiaries
|
(a) As
of the
date hereof (and also at the Closing Date if the Company Reorganization is
not
effected in accordance with Section 5.8), the Company does not have (and
will
not have, if the Company Reorganization is not effected) any direct or indirect
equity interest in any Person nor is it a party to or bound by any pending
agreement to acquire any direct or indirect equity interest in any other
Person
(except in relation to the Company Reorganization). As of the Closing Date,
as a
result of the consummation of the Company Reorganization (assuming this is
effected in accordance with Section 5.8), each of EKOM and TRA will be a
wholly-owned Subsidiary of the Company.
(b) Except
for EKOM, TRA and the Company (each of which is, as of the date hereof, a
wholly-owned Subsidiary of EHG), EHG has no direct or indirect equity interest
in any other Person nor is it a party to or bound by any pending agreement
to
acquire any direct or indirect equity interest in any other Person.
(c) Neither
EKOM nor TRA has a direct or indirect equity interest in any Person nor is
EKOM
or TRA a party to or bound by any pending agreement to acquire any direct
or
indirect equity interest in any other Person.
| Section 3.8 |
Financial
Statements
|
(a) The
audited financial statements (including all related notes and schedules)
set
forth in Section 3.8 of the Disclosure Schedule (the “Financial
Statements”)
represent a true and fair view of the financial position of the Company and
EHG
in accordance with Austrian GAAP as at the Last Accounting Date and the results
of the operations for the financial period ended on the Last Accounting Date.
The Financial Statements have been prepared in conformity with Austrian GAAP
applied on a consistent basis during the periods involved (except as may
be
indicated therein or in the notes thereto). Neither the Company nor EHG has
made
any change in the accounting practices or policies applied in the preparation
of
its financial statements for each of the two financial years ended on the
Last
Accounting Date, except as stated in the audited financial statements for
those
years.
(b) The
management accounts of the Company for June 30, 2005 set forth in Section
3.8 of
the Disclosure Schedule (the "June
Management Accounts")
have
been properly prepared on a basis consistent with the Financial Statements
and
in conformity with Austrian GAAP subject to normal year end audit adjustments
and to any other adjustments described therein, including the notes
thereto.
(c) All
Taxes
that have not been paid but that are required to have been accrued have been
duly accrued on the Financial Statements in accordance with Austrian GAAP,
and
have been duly accrued on the June Management Accounts on a basis consistent
with the Financial Statements and in conformity with Austrian GAAP (subject
to
normal year end audit adjustments and to any other adjustments described
therein, including the notes thereto).
(d) Nothing
in this Section 3.8 shall be construed as a representation or warranty with
respect to Taxes or tax loss carryforwards (Verlustvortrag).
| Section 3.9 |
No
Undisclosed Liabilities
|
(a) Except
(i) as reflected or reserved against in the balance sheets (or the notes
thereto) included in the Financial Statements or the June Management Accounts,
(ii) for liabilities and obligations incurred in the ordinary course of business
consistent with past practice from and after July 1, 2005,
and (iii)
for liabilities or obligations which have been discharged or paid in full
in the
ordinary course of business, (a) the Company has no liabilities or obligations
of any nature, whether or not accrued, contingent or otherwise that would
be
required by Austrian GAAP to be reflected on a balance sheet of the Company
(or
in the notes thereto) and (b) none of the Target Companies have any off-balance
sheet liabilities or obligations.
(b) Other
than in connection with its organization and the maintenance of its ongoing
limited liability company existence, (i) EHG has no liabilities or obligations
of any nature, whether or not accrued, contingent or otherwise, which in
the
aggregate are material, and no assets, except, in each case, relating to
its
ownership of the Company Shares, the EKOM Shares and the TRA Shares; and
(ii)
EHG has conducted no business activities other than acquiring and owning
the
Company Shares, the EKOM shares and the TRA Shares.
(c) Other
than in connection with its organization and the maintenance of its ongoing
limited liability company existence, (i) TRA has no liabilities or obligations
of any nature, whether or not accrued, contingent or otherwise, which in
the
aggregate are material, and no assets, except, in each case, relating to
its
ownership of the 3G License; and (ii) TRA has conducted no business activities
other than acquiring and owning such 3G License.
(d) Other
than in connection with its organization and the maintenance of its ongoing
limited liability company existence, (i) EKOM has no liabilities or obligations
of any nature, whether or not accrued, contingent or otherwise, which in
the
aggregate are material, and no assets, except, in each case, relating to
its
prior ownership of the TRA Shares and the 3G License; and (ii) EKOM has
conducted no business activities other than acquiring, owning and transferring
the TRA Shares and such 3G License.
| Section 3.10 |
No
Material Adverse Change
|
Other
than the Transactions, since the Last Accounting Date (i) the businesses
of each
Target Company has been conducted in the ordinary course consistent with
past
practice; and (ii) there has not been any Material Adverse Effect on the
Target
Group taken as a whole.
| Section 3.11 |
Legal
Proceedings
|
Except
as
described in the Financial Statements or the June Management Accounts or
as set
forth in Section 3.11 of the Disclosure Schedule:
(a) there
is
no material investigation or review currently in existence or pending (or,
to
the knowledge of the Seller, threatened) by any Governmental Entity with
respect
to any Target Company (which is not generally affecting the wireless voice
and
data or wireline industries in Austria or the European Union); and
(b) there
are
not in addition to and/or beyond the investigations encompassed by Section
3.11(a), any actions, suits, proceedings, material inquiries or material
investigations currently in existence or pending (or, to the knowledge of
the
Seller, threatened) against or affecting any Target Company, or any of their
respective properties at law or in equity (which is not generally affecting
the
wireless voice and data or wireline industries in Austria or the European
Union), and there are no outstanding orders, judgments, decrees, arbitral
awards
or decisions of any Governmental Entity against any Target Company.
| Section 3.12 |
Material
Contracts
|
(a) The
Disclosure Schedule contains a complete and correct list of all Contracts
to
which any Target Company is a party, which (i) require the expenditure or
receipt by any Target Company of EUR 100,000 or more per year or which
require expenditure by a Target Company over the life of the Contract concerned
(excluding any renewal options wholly at the discretion of that Target Company)
exceeding EUR 250,000; and/or (ii) are contracts in the nature of an agency,
distribution or franchise agreement with actual or projected aggregate
commissions of EUR 100,000, or more per year; and/or (iii) may be terminated
in
the event of any change of control over any Target Company and the loss of
such
Contract would have a significant adverse effect on the business of the Target
Group, taken as a whole; and/or (iv) are of 6 months or greater duration
or are
incapable of complete performance in accordance with their terms within 12
months after the date they were entered into and the loss of such Contract
would
have a significant adverse effect on the business of the Target Group, taken
as
a whole; and/or (v) appoint any Person exclusively to supply goods to any
other
Person; and/or (vi) concern the exclusive provision of a service by a Target
Company to any Person where such Contracts are material to the business of
the
Target Group taken as a whole; and/or (vii) appoint any Person exclusively
to
supply services to a Target Company (other than employment or consultancy
services); and/or (viii) contain unusual or unusually onerous provisions
for
that type of Contract and the loss of such Contract would have a significant
adverse effect on the business of the Target Group, taken as a whole
(collectively, the “Company
Material Contracts”
and
each a “Company
Material Contract”).
(b) No
Target
Company is in breach of or in default under the terms of any Company Material
Contract in any material respect. To the knowledge of the Seller, no other
party
to any Company Material Contract is in breach of or in default under the
terms
of any Company Material Contract in any material respect. Each Company Material
Contract to which any Target Company is party is a valid and binding obligation
of such party and, to the Seller's knowledge, of each other party thereto,
and
is in full force and effect, except that (i) such enforcement may be subject
to
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
Laws, now or hereafter in effect, relating to creditors’ rights generally and
(ii) equitable remedies of specific performance and injunctive and other
forms
of equitable relief may be subject to equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought.
(c) No
Target
Company is party to an agreement or arrangement that expressly restricts
its
ability to carry out its business in the way presently conducted.
| Section 3.13 |
Assets
|
(a) Except
for current assets disposed of by each Target Company in the ordinary course
of
business, the Company is the owner legally and beneficially of and has good
marketable title to all assets included in the Financial Statements and the
June
Management Accounts. Each Target Company owns or has the right to use each
asset
used in the operation of its business as currently carried out. There are
no
Liens (other than Permitted Liens) over any such asset.
(b) All
material plant, machinery, vehicles, and other assets possessed or used by
each
Target Company are in good operating condition and working order, normal
wear
and tear excepted and save as have been replaced or become obsolete.
(c) The
Target Group owns or has a valid right to use all network equipment and other
material assets it requires to run its business as a going concern and as
presently conducted.
(d) Except
for assets offered or sold in the ordinary course of business, no Target
Company
has since the Last Accounting Date disposed or agreed to dispose of any of
the
assets included in the Financial Statements or any asset acquired or agreed
to
be acquired since the Last Accounting Date, in each case with a book value
in
excess of EUR 250,000 (and save as have been replaced or become obsolete).
(e) All
material records and information belonging to each Target Company have been
properly maintained and where such records and information are of a confidential
nature all reasonable steps have been taken to keep them confidential.
| Section 3.14 |
Insurance
|
(a) Section
3.14 of the Disclosure Schedule lists each current insurance and indemnity
policy (relating to comprehensive general liability, public liability, business
interruption, property, damage, motor vehicle, normal business credit and
interconnect credit) in respect of which each Target Company has an interest
("Policies")
and a
list of all material claims outstanding under each of the Policies. Each
of the
Policies is valid and enforceable and no Target Company has done anything
which
might make any of the Policies void or voidable.
(b) Save
as
set forth in Section 3.14 of the Disclosure Schedule, no Policy has a renewal
date more than, or is not cancelleable without penalty within, 11 months
from
the date of this Agreement.
(c) Save
as
set forth in Section 3.14(c) of the Disclosure Schedule, the Seller is not
aware
of any circumstance (including the Transactions) which would prevent any
policy
continuing until its next renewal date.
(d) All
premiums which are due under the Policies have been paid.
(e) The
assets of each Target Company are insured against risks normally insured
against
by a Person operating the types of business operated by such Target
Company.
| Section 3.15 |
Intellectual
Property Rights
|
(a) Section
3.15 of the Disclosure Schedule contains a list of all Intellectual Property
(i)
of which any of the Target Companies is a registered proprietor or beneficial
owner or for which application for registration has been made by any Target
Company ("Intellectual
Property Rights");
(ii)
that is material and that is licensed to any Target Company; and (iii) that
is
licensed by any Target Company if it is material and not licensed in the
context
of any agency, distribution or franchise agreement.
(b) All
renewal fees payable in respect of the registered Intellectual Property Rights
have been paid.
(c) So
far as
the Seller is aware, the businesses carried on by each Target Company do
not
infringe any third party rights in Intellectual Property.
(d) So
far as
the Seller is aware, no fact or circumstances exist which might render any
of
the registered Intellectual Property Rights invalid and no person is infringing
any of the Intellectual Property Rights.
(e) Except
for those specified in Section 3.15 of the Disclosure Schedule, no Target
Company is obliged to grant a licence, assignment or other right in respect
of
the Intellectual Property Rights.
| Section 3.16 |
Property
|
(a) No
Target
Company owns any real property.
(b) The
property detailed in Section 3.16 of the Disclosure Schedule comprises all
of
the land and premises occupied or used by each of the Target Companies
("Property")
(other
than leases relating to RAN Sites). There is no person who has or claims
a right
or interest of any kind over the Property that conflict with the possession
or
use of or interest in such Property by a Target Company.
(c) Information
regarding all leases with respect to the Property are contained in Section
3.16
of the Disclosure Schedule ("Leases")
(other
than leases relating to RAN Sites). All rent, insurance premia and service
charges payable by each Target Company under each Lease has been paid to
date
and none of the Target Companies have received notice of any outstanding
material breach of any covenants, restrictions and conditions affecting any
Property (including without limitation the terms of the Leases).
(d) No
fact
or circumstance exists which materially and adversely affects the use or
enjoyment of the Property or casts doubt on the Company's right to occupy
and
use the Property.
(e) No
portion, which is owned or used by a Target Company, of any building or other
structure owned or used by a Target Company on or forming part of the Property
contains a deleterious substance or is a substance which is not used in
generally accepted good building practice.
(f) The
use
of each Property is its permitted use under applicable legislation and, where
the Property is held under a lease, the terms of such lease.
| Section 3.17 |
Employees
|
(a) Particulars
disclosed
Section
3.17 of the Disclosure Schedule sets out exhaustively:
(i) the
total
number of employees in each Target Company including those on long-term leave
of
absence who have a right to return to work for a Target Company as appropriate
("Employees");
(ii) any
arrangement with respect to payments on downsizing or retirement, severance
arrangements or change of control provisions between any Target Company (as
appropriate) and an Employee, former employee, officer or consultant where
such
arrangements in aggregate exceed EUR 250,000 in value;
(iii) the
complete terms of employment (including particulars of emoluments and benefits
provided) of each Employee earning basic pay over EUR 75,000
per
annum and/or other benefits worth over EUR 50,000 per annum;
(iv) particulars
of any agreement for the provision of consultancy services or personal services
to any Target Company where the fees payable are over EUR 50,000
per
annum; and
(v) a
list of
all works council members and any body of Employee representatives with respect
to any Target Company together with copies of all plant agreements
(betriebsvereinbarungen) concluded with the works council at any of the Target
Companies.
(b) Employees
and terms and conditions of employment
Except
as
set forth in Schedule 3.17(b) of the Disclosure Schedule:
(i) No
Employee earning basic pay over EUR 75,000 per annum has given, or
has been
given, notice of termination of his employment.
(ii) No
proposal, assurance or commitment has been communicated in writing to any
current Employee earning basic pay over EUR 75,000 regarding
any
change to his terms of employment.
(iii) All
subsisting contracts of employment with Employees and each consultancy
arrangement entered into by any Target Company is terminable by any Target
Company on 6 months' notice or less (or, if greater, the minimum period
allowable by the applicable Law) without compensation being payable pursuant
to
the terms of such contract or arrangement, subject to the provisions of
applicable Law.
(iv) No
Target
Company has any outstanding liability to pay compensation for loss of office
or
employment or a downsizing payment to any present or former Employee or any
compensation for breach of an agreement, in any case in an amount in excess
of
EUR 50,000 and no such sums have been paid (whether pursuant to a
legal
obligation or ex gratia) since the Last Accounting Date.
(v) The
basis
of the remuneration payable to and benefits receivable by the directors,
officers and Employees of each Target Company (as appropriate) is substantially
the same as at June 30, 2005. Other than in connection with promotions in
the
ordinary course of business consistent with past practice, no Target Company
is
obliged to increase or vary, nor has it made provision to increase or vary,
the
benefits receivable by or the total annual remuneration payable to its
directors, officers and Employees by more than three per cent on average,
other
than as required by applicable Law.
(vi) No
Employee is entitled to a payment due to repeated practice (betriebliche
Übung)
in excess of EUR 50,000 per annum.
(c) Obligations
Each
Target Company has in all material respects complied with its contractual
obligations to its employees and any works council or body of Employee
representatives referred to above.
| Section 3.18 |
Employee
Benefit Plan
|
(a) Section
3.18 of the Disclosure Schedule lists all Company Benefit Plans. “Company
Benefit Plans”
means
all officer, director and employee benefit or incentive plans, compensation
arrangements and other benefit arrangements, providing cash- or equity-based
incentives, health, medical, dental, disability, accident or life insurance
benefits or vacation, severance, retirement, pension or savings benefits,
that
are sponsored, maintained or contributed to by each Target Company as to
which
any Target Company has or may have a liability to contribute or in which
its
future participation has been announced for the benefit of employees,
Gesch’ftsführer, Aufsichtsratsmitglieder, consultants, former employees, former
consultants and former Gesch’ftsführer or Aufsichtsratsmitglieder of each Target
Company.
(b) All
employer and employee contributions to each Company Benefit Plan (where the
annual contribution of the Company to such plan equals or exceeds EUR 100,000)
required by Law or by the terms of such Company Benefit Plan have been made
when
due, or, if applicable, accrued in accordance with Austrian GAAP.
(c) As
of the
Closing Date, the fair market value of the assets of each funded Company
Benefit
Plan (where the annual contribution of the Company to such plan equals or
exceeds EUR 100,000), the liability of each insurer for any Company Benefit
Plan
(where the annual contribution of the Company to such plan equals or exceeds
EUR
100,000) funded through insurance or the book reserve established for any
such
Company Benefit Plan, together with any accrued contributions, will be
sufficient to procure or provide for the accrued benefit obligations, as
of the
Closing Date, with respect to all current and former participants in such
plan
according to the actuarial assumptions and valuations most recently used
to
determine employer contributions to such Company Benefit Plan, and no
transaction contemplated by this Agreement shall cause such assets or insurance
obligations to be less than such benefit obligations.
(d) Each
Company Benefit Plan (where the annual contribution of the Company to such
plan
equals or exceeds EUR 100,000) required to be registered has been registered
and
has been maintained in good standing with applicable regulatory authorities
and
has at all times been materially in compliance with its terms.
(e) Each
of
the Target Companies has at all times complied with all applicable Laws,
regulations and government taxation and funding requirements in all material
respects in relation to the Company Benefit Plans.
(f) There
are
no legal proceedings, claims (except for routine claims for benefits) or
other
disputes outstanding, pending or threatened concerning the Company Benefit
Plans
(where the annual contribution of the Company to such plan equals or exceeds
EUR
100,000).
(g) Each
of
the Company Benefit Plans provides retirement benefits on a defined contribution
basis only. No assurance, promise or guarantee (oral or written) has been
made
to any employee of a Target Company of a particular level or amount of
retirement benefits to be provided for or in respect of him (other than insured
death in service benefits).
| Section 3.19 |
Labor
Relations
|
Except
as
set forth in Section 3.19 of the Disclosure Schedule, since the Last Accounting
Date, there has been no strike, work stoppage, slowdown or similar labor
dispute
involving any Target Company or their employees or, to the Seller's knowledge,
or any threat of any of the foregoing. Except as set forth in Section 3.19
of
the Disclosure Schedule or to the extent imposed or implied by Law no Target
Company is a party to any collective bargaining agreement or plant
agreement.
| Section 3.20 |
Compliance
with Laws
|
(a) Each
Target Company is materially in compliance with and is not in material default
under or in material violation of any Law applicable to such Target Company
or
any of their respective properties or assets. Notwithstanding anything contained
in this Section 3.20(a), no representation or warranty shall be deemed to
be
made in this Section 3.20(a) in respect of the matters which are the subject
of
the warranties and representations set forth in Section 3.18, 3.21, 3.22
and
3.23 of this Agreement.
(b) Each
Target Company is in possession of all material franchises, grants,
authorizations, licenses, permits, easements, variances, exceptions, consents,
certificates, approvals and orders of any Governmental Entity necessary for
such
Target Companies to own, lease and operate their properties and assets, except
where such failure to so own, lease and operate does not affect properties
and
assets which in the aggregate are not of a value in excess of EUR 2,000,000,
or
to carry on their businesses as they are now being conducted (the “Company
Permits”).
All
Company Permits are in full force and effect. The holder of each Company
Permit
is materially in compliance with the terms of the Laws that apply to each
applicable Company Permit and has fulfilled and performed all of its material
obligations with respect thereto, including all reports, notifications and
applications required by any Governmental Entity and the payment of all
regulatory fees, except for exemptions, waivers or similar concessions or
allowances. Notwithstanding anything contained in this Section 3.20(b), no
representation or warranty shall be deemed to be made in this Section 3.20(b)
in
respect of the matters which are the subject of the warranties and
representations set forth in Section 3.18, 3.21, 3.22 and 3.23 of this
Agreement.
| Section 3.21 |
Communications
Regulatory Laws
|
(a) Section
3.21 of the Disclosure Schedule lists all the licenses and authorizations
issued
by the Telekom-Control-Kommission ("TKK"),
the
Xxxxxxx Fernmeldebehörde and Fernmeldebüros and the Rundfunk & Telekom
Regulierungs-GmbH ("RTR-GmbH")
to
each Target Company for the provision of wireless mobile communications services
in Austria (the “National
Company Licenses”).
The
National Company Licenses, together with the Microwave Licenses, constitute
all
authorizations necessary from such persons for the business operations of
each
Target Company as they are currently being conducted in Austria.
(b) Each
National Company License is valid and in full force and effect and has not
been
suspended, revoked, cancelled or adversely modified. No National Company
License
is subject to any conditions or requirements that have not been imposed
generally upon licenses in the same service.
(c) The
licensee of each National Company License is in compliance with the terms
of and
the Laws that apply to each applicable National Company License and has
fulfilled and performed all of its obligations with respect thereto which
are
required to have been performed, including all reports, notifications and
applications required by any Governmental Entity and the payment of all
regulatory fees, except for exemptions, waivers or similar concessions or
allowances.
(d) Microwave
Licenses
(i) Section
3.21(d)(i) of the Disclosure Schedule lists all the licenses and authorizations
issued by the Xxxxxxx Fernmeldebehörde and the relevant Fernmeldebüros to each
Target Company for microwave links in Austria (the "Microwave
Licenses"
and,
together with the National Company Licenses, the "Company
Licenses").
(ii) (A)
Each
Microwave License is valid and in full force and effect and has not been
suspended, revoked, cancelled or adversely materially modified except for
such
failures to be valid and in full force and effect or for such suspensions,
revocations, cancellations or adversely material modifications as would not,
individually or in the aggregate, reasonably be expected to be significantly
adverse to the Target Companies, taken as a whole, and (B) no Microwave License
is subject to any material pending regulatory proceeding (other than those
affecting the wireless industry generally) or judicial review before a
Governmental Entity except to the extent that the failure to be such would
not,
individually or in the aggregate, reasonably be expected to be significantly
adverse to the Target Companies, taken as a whole. No Microwave License is
subject to any conditions or requirements that have not been imposed generally
upon licenses in the same services.
(iii) The
licensee of each Microwave License is in compliance in all material respects
with the terms thereof and all applicable Laws that apply to each applicable
Microwave License and has fulfilled and performed in all material respects
all
of its obligations with respect thereto which are required to have been
performed, including all reports, notifications and applications required
by any
Governmental Entity and the payment of all regulatory fees, except for
exemptions, waivers or similar concessions or allowances and except to the
extent that such would not, individually or in the aggregate, reasonably
be
expected to be significantly adverse to the Target Companies, taken as a
whole.
Substantially all the Microwave Licenses are substantially in the same terms
(expect pricing) as the Microwave Licenses delivered to Purchaser in connection
with Section 3.21(d)(i) of the Disclosure Schedule.
(e) To
the
extent necessary, the Company has filed all notifications to conduct its
fixed
line business as currently conducted.
| Section 3.22 |
Environmental
Laws
and Regulations
|
(a) Each
Target Company is in material compliance with all applicable Laws relating
to
pollution or protection of the environment (including, without limitation,
ambient air, surface water, ground water, land surface or subsurface strata)
(collectively, “Environmental
Laws”),
which
compliance includes, but is not limited to, the possession by each Target
Company of all Company Permits that are required under applicable Environmental
Laws, and material compliance with the terms and conditions thereof.
(b) No
Target
Company has received written notice of, or, is the subject of, any actions,
causes of action, claims, investigations, demands or notices by any Person
(other than those of general applicability not specifically related to such
Target Company) asserting an obligation to conduct investigations or clean-up
activities under any Environmental Law or alleging liability under or
non-compliance with any Environmental Law.
| Section 3.23 |
Taxes
|
(a) Each
Target Company has (1) duly and timely filed (or there has been filed on
its
behalf) all Tax Returns (as defined below) required to be filed by it (taking
into account all applicable extensions) with the appropriate Tax Authority
(as
defined below), and (2) paid all Taxes shown as due on such Tax
Returns.
(b) There
are
no Liens for Taxes upon any property or assets of any Target Company except
for
Liens for Taxes not yet due and payable or for which adequate reserves have
been
provided in accordance with Austrian GAAP in the Financial
Statements.
(c) Except
as
disclosed in Section 3.23 of the Disclosure Schedule, there is no audit,
examination, deficiency, refund litigation or proposed adjustment with respect
to any Taxes. No Target Company has received notice in writing of any claim
made
by a Tax Authority in a jurisdiction where such Target Company, as applicable,
does not file a Tax Return, that such Target Company is or may be subject
to
material taxation by that jurisdiction, where such claim has not been resolved
favorably to the Target Company.
(d) There
are
no outstanding written requests, agreements, consents or waivers to extend
the
statutory period of limitations applicable to the assessment of any income
Taxes
or income Tax deficiencies against any Target Company, and no power of attorney
granted by any Target Company with respect to any material Taxes is currently
in
force.
(e) No
Target
Company is a party to any agreement providing for the allocation,
indemnification or sharing of Taxes other than such an agreement exclusively
between or among the Target Companies and no Target Company (i) has been
a
member of an affiliated group (or similar filing group) filing a consolidated
income Tax Return (other than a group the common parent of which is the Company)
or (ii) has any liability (including as a result of any agreement or obligation
to reimburse or indemnify) for the Taxes of any other Person (other than
a
Target Company), as a transferee or successor, by contract or
otherwise.
(f) For
the
purposes of this Agreement: (i) “Taxes”
means
any and all federal, state, local or other taxes of any kind (together with
any
and all interest, penalties, additions to tax and additional amounts imposed
with respect thereto) imposed by any Governmental Entity, including stamp
duty
and taxes on or with respect to income, franchises, windfall or other profits,
gross receipts, property, sales, use, capital stock, payroll, employment,
unemployment, social security, workers’ compensation or net worth, and taxes in
the nature of excise, withholding, ad valorem or value added; (ii) “Tax
Authority”
means
any Governmental Entity responsible for the administration or collection
of any
Taxes; and (iii) “Tax
Return”
means
any return, report or similar filing (including the attached schedules) required
to be filed with respect to Taxes, including any information return, claim
for
refund, amended return, or declaration of estimated Taxes.
(g) Except
as
disclosed in Section 3.23 of the Disclosure Schedule, up to the Closing Date,
the Target Companies did not benefit from any waivers of receivables which
have
been treated as a taxable event for corporate income tax purposes or which
will
have to be treated as a taxable event due to a (later) tax audit or tax
assessment for corporate income tax purposes. Any capital duty which was
triggered or could have been triggered by such kind of waiver has been paid
or
provided by accrual up to the Closing Date.
| Section 3.24 |
Brokers
|
Except
for the engagement of Deutsche Bank Securities Inc., whose fees will be paid
by
the Seller, neither the Seller nor any of the Target Companies has incurred
any
liability, contingent or otherwise, for brokerage or finders’ fees or agents’
commissions or similar payments in connection with the Transactions.
| Section 3.25 |
Competition
|
The
Target Company has never concluded any agreement or other arrangement in
any way
prohibited under Article 81 of the Treaty Establishing the European Community
or
acted in a way prohibited under Article 82 of that Treaty, or laws of any
relevant jurisdiction that prohibit or restrict cartels, monopolies (anti-trust)
or state aid abuse, such as the Austrian Kartellgesetz (all these Laws together
referred to as “Competition
Laws”).
No
Target Company has ever received a notice, request or other communication
of any
authority charged with the oversight of any Competition Laws alleging in
any way
a violation of any Competition Laws. No Target Company is or will become
liable
or obliged to pay any penalties or other charges levied in connection with
any
violation of any Competition Laws.
| Section 3.26 |
Liabilities
|
(a) Except
(i) for the Vendor Group Loan and (ii) Indebtedness to other Target Companies,
no Target Company has outstanding nor has it agreed to create or incur any
Indebtedness.
(b) No
Target
Company is a party to or is liable under a guarantee, indemnity or other
agreement to secure or incur a financial or other obligation with respect
to
another person's obligation other than another Target Company.
(c) No
part
of the loan capital or Indebtedness of any Target Company is dependent on
the
guarantee or indemnity of, or security provided by, another person which
is not
a Target Company.
| Section 3.27 |
Customers
|
(a) The
Company provides a level of customer care which is consistent with its brand
position in the Austrian market and which is designed to support its customer
base and provide an appropriate and adequate level of service. Such level
of
customer care has not been materially reduced in the past one year
period.
(b) The
Company has adequate personnel or outsourced facilities to provide the level
of
customer care described in Section 3.27(a). Section 3.27 of the Disclosure
Schedule lists all material agreements for the outsourcing of customer care
services and such agreements provide for performance levels consistent with
the
standard of service provided for in Section 3.27(a).
(c) All
customer contracts are on the terms as set forth in the general terms of
business contained in the Exhibited Documents, save that since April 2005
the contract duration for new subscriptions and contract prolongations has
been
extended from 12 months to 18 months.
(d) There
has
been no change of the Company's credit check policy, a copy of which is set
forth in the Exhibited Documents, that has lowered the criteria for accepting
new customers since January 1, 2005.
(e) Other
than in the ordinary course of business consistent with past practices, there
has been no change in the Company's "prolongation" policy (namely, any policy
whereby existing customers are encouraged to renew their contracts by offering
them terms more favourable than those offered to them previously) since June
30,
2005.
| Section 3.28 |
IT/Mobile
network infrastructure
|
(a) The
Company’s network that services the Company’s mobile and fixed line customers
(the "Network")
is fit
for the purpose for which it is used in all material respects and is currently
at a level of performance consistent with current and reasonably foreseeable
needs for the immediate future.
(b) The
Capital Expenditure Budget provides for the capital expenditures required
to
maintain the Network to December 31, 2005 at a level of performance consistent
with past practice (based upon currently projected capacity and performance
levels).
(c) Routine
maintenance of the Network has been materially properly performed on a regular
basis pursuant to an agreement with Alcatel S.A. listed in Section 3.28 of
the
Disclosure Schedule.
(d) The
Network:
(i) has
sufficient capacity to serve the fixed line and mobile customers of the Target
Group for at least the next 12 months at a level of performance consistent
with
past practice and provided the capital expenditures provided for in the Capital
Expenditure Budget are made and necessary capital expenditures required in
2006
are made;
(ii) is
designed to provide to the fixed line and mobile customers of the Target
Group
for at least the next 12 months all services and products provided to fixed
line
and mobile customers of the Target Group within the first six months of 2005
at
a level of performance consistent with past practice, assuming customer growth
in line with the Company's current projections and provided the capital
expenditures provided for in the Capital Expenditure Budget are made and
necessary capital expenditures required in 2006 are made; and
(iii) has
not
experienced any material and persistent capacity shortfalls or failures within
the previous 12 months.
(e) There
are
no large upgrade projects planned or required during the balance of the year
ending December 31, 2005 other than those provided for in the
Capital
Expenditure Budget.
| Section 3.29 |
Data
retention
|
Subject
only to regulatory or legal requirements, no data material to the business,
planning, management or operations of any Target Company, or to the compliance
by any Target Company with its obligations under applicable Laws, has been
deleted by a Target Company since January 1, 2002, including (i) any archived
data relating to customers and their telephony activities or (ii) documentation
on quality of services, customers, personnel as well as any business documents
pursuant to any applicable Laws.
| Section 3.30 |
Mobile
Network Specifications
|
(a) More
than
65% of all issued and operating SIM cards are capable of being updated over
the
air (values FPLMN, PLMN and SMSC-address).
(b) Since
January 1, 2004 all new mobile customers of the Company have
been
provided with SIM cards that are capable of being updated over the air (values
FPLMN, PLMN and SMSC-address).
(c) The
lease
agreements with respect to all radio access network sites ("RAN
Sites")
and
all material core Network sites (including the sites at which the MSC, HLR,
VMS,
MMSC and WAP server are located) may be terminated by the relevant Target
Company in accordance with its terms within 12 months.
(d) The
Exhibited Documents contain the standard form of site lease to which the
Target
Group is party. Except as set forth in Section 3.30 of the Disclosure Schedule,
the material terms (other than pricing) of substantially all site leases
entered
into by a Target Company are in substantially the same forms as the standard
form site lease in the Exhibited Documents.
(e) All
expected expenditure for the remainder of 2005 in relation to the 3G roll-out
plan is
as set
forth in the Capital Expenditure Budget. The Company is on schedule to meet
this
budget and is committed to the expenditure set forth therein.
(f) As
at
June 30, 2005, the rental costs for all RAN Sites per year did not exceed
EUR 18,718,000 and the number of RAN Sites was not less than 3,820.
Since
that date, no RAN Sites have been acquired the rental costs for which exceed
by
more than 25% the average cost per RAN Site as at June 30, 2005.
(g) During
the last 12 months there has been no significant deterioration (on a monthly
basis) in the CSTR (calls successfully terminated rate).
| Section 3.31 |
Insider
Agreements
|
(i) Except
as
set forth in Section 3.31 of the Disclosure Schedule, there:
(a) is
not
currently; and
(b) has
not
been since January 1, 2004 other than at arm's length
any
agreement or arrangement (legally enforceable or not) to which any Target
Company is or was a party and in which:
(A) the
Seller;
(B) an
Affiliate of the Seller;
(C) a
director or former director of any Target Company or of a person referred
to in
Section 3.31 (i)(A) or (B); or
(D) a
person
connected with any of them,
is
or was
interested in any way.
(ii) For
the
purpose of Section 3.31, a person is "connected" with an individual if that
person is the individual's trustee, wife or husband (including their wives
and
husbands and any relatives of the wife or husband) or if that person is in
a
partnership with the individual. A company is connected with another company
if
the same person has control over both (control meaning having the greater
part
of issued share capital or being able to exercise direct or indirect control
over the company's affairs), or a person has control of one and those connected
with him have control over the other. A company is connected with another
person
if that person has control of it or those persons connected to him have control
over it.
REPRESENTATIONS
AND WARRANTIES OF THE PURCHASER
The
Purchaser acknowledges that the Seller is entering into this Agreement in
reliance on the warranties set forth in this Article 4 which have also been
given as representations and with the intention of inducing the Seller to
enter
into this Agreement.
Each
of
the First Purchaser and the Second Purchaser hereby represents and warrants
to
the Seller in respect of itself only (and for the purposes of this Article
4,
the term "Purchaser"
shall
refer only to the party making such representation and warranty, save that
only
the Second Purchaser makes the representation and warranty set forth in Section
4.7), that each statement set forth in this Article 4 is true, accurate and
not
misleading at the date of this Agreement. Immediately before Closing, the
Purchaser is deemed to warrant to the Seller that the warranties set forth
in
this Article 4 are true, accurate and not misleading by reference to the
facts
and circumstances as at Closing.
| Section 4.1 |
Organization
and Good Standing
|
The
Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization.
| Section 4.2 |
Power
and Authority
|
The
Purchaser has all requisite power and authority and has taken all action
necessary to execute, deliver and perform its obligations under this Agreement
and each document to be executed at or before Closing in connection with
this
Agreement and the Purchaser has the requisite power and authority to purchase
and own the Company Shares in accordance with the terms of this
Agreement.
| Section 4.3 |
Authorization,
Execution and Enforceability
|
The
execution, delivery and performance by the Purchaser of this Agreement, and
the
purchase of the Company Shares, have been duly authorized by all necessary
corporate action on the part of the Purchaser. Assuming this Agreement
constitutes a legal, valid and binding agreement of the Seller, this Agreement
is a legal, valid and binding obligation of the Purchaser, enforceable against
the Purchaser in accordance with its terms (except to the extent that
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other Laws affecting the enforcement of creditors’ rights
generally or by principles governing the availability of equitable
remedies).
| Section 4.4 |
Consents
|
Save
as
set forth in Section
5.4:
(a) no
material consent of, material notice to, or material filing with any
Governmental Entity or any other Person is required to be made or obtained
by
the Purchaser in connection with the execution, delivery and performance
of this
Agreement or the Transactions; and
(b) no
consent of, notice to, or filing with any Governmental Entity or any other
Person is required to be made or obtained by the Purchaser as a condition
to the
legality, validity or enforceability of this Agreement, or the purchase of
the
Company Shares.
| Section 4.5 |
No
Conflicts
|
The
execution and delivery by the Purchaser of this Agreement does not, and the
consummation of the Transactions and compliance with the provisions hereof
will
not (i) result in any violation of, or default (with or without notice or
lapse
of time, or both) under, or give rise to a right of consent, termination,
cancellation or acceleration of any obligation or to the loss of a material
benefit (and for the purpose of determining loss of a material benefit such
shall be measured in the aggregate in respect of claims of the same or a
similar
nature, and shall only be deemed a loss of a material benefit if the aggregated
value thereof shall equal or exceed EUR 2,000,000) under any loan or other
instrument of Indebtedness, guarantee of Indebtedness or credit agreement,
note,
bond, mortgage, indenture, material permit, material concession, material
franchise, material right or material license binding upon the Purchaser
or
under any material lease, material agreement, material Contract or material
instrument binding upon the Purchaser, or result in the creation of any Lien
(other than restrictions under applicable Law) upon any of the properties
or
assets of the Purchaser, (ii) conflict with or result in any violation of
any
provision of any Governing Document of the Purchaser, (iii) conflict with
or
violate any material Laws applicable to the Purchaser or its properties or
assets or (iv) result in the Purchaser losing the material benefit (and for
the
purpose of determining loss of a material benefit such shall be measured
in the
aggregate in respect of claims of the same or a similar nature, and shall
only
be deemed a loss of a material benefit if the aggregated value thereof shall
equal or exceed EUR 2,000,000) of any material asset, grant, subsidy, right
or
privilege which it enjoys.
| Section 4.6 |
Availability
of Funds
|
The
Purchaser has and at the Closing Date will have available cash or unused
availability under existing borrowing facilities or commitments from its
Affiliates that are sufficient to enable it to pay the Purchase Price to
the
Seller and to pay all related fees and expenses as and when they fall
due.
| Section 4.7 |
Qualification
of the Purchaser
|
The
Second Purchaser is and at the Closing Date will be legally qualified to
(i)
acquire and hold telecommunications licenses generally, (ii) acquire and
hold
the Company Licenses (and the consummation of the Transactions will not cause
the Second Purchaser to be ineligible to hold the Company Licenses) and (iii)
obtain any authorization or approval from any Governmental Authority necessary
for the Second Purchaser to acquire the Company Licenses.
COVENANTS
AND
AGREEMENTS
| Section 5.1 |
Conduct
of Business by the
Target
Companies
|
Except
(i) as may be required by Law, (ii) as may be consented to in writing by
the
Purchaser (which consent shall not be unreasonably withheld, delayed or
conditioned), (iii) as may be expressly permitted pursuant to this Agreement,
(iv) in connection with the Company Reorganization, or (v) as set forth in
Section
5.1
of the
Disclosure Schedule, between the date hereof and the earlier of the Closing
Date
or the date, if any, on which this Agreement is terminated pursuant to
Section
7.1
(the
“Termination
Date”),
the
Seller covenants and agrees with the Purchaser:
(a) to
cause
each Target Company (i) to conduct its businesses in the ordinary course
of
business; and (ii) to use commercially reasonable efforts to (A) preserve
substantially intact its business organization, (B) keep available the services
of those of its present Geschäftsführer, employees and consultants who are
integral to the operation of its businesses as presently conducted and (C)
preserve its present relationships with Persons with whom they have significant
business relations, provided, however, that no action by any Target Company
with
respect to matters specifically addressed by any other provision of this
Section
5.1 shall be deemed a breach of this Section 5.1(a) by the Seller unless
such
action would constitute a breach of such other provision; and
(b) to
cause
each Target Company not to:
(i) save
as
provided in Section
5.13,
authorize or pay any dividends on or make any distribution with respect to
its
outstanding Gesch’ftsanteile, or make any payment with respect to the Vendor
Group Loan;
(ii) split,
combine, reclassify, repay or redeem any of its Gesch’ftsanteile or issue or
authorize or propose the issuance of any other securities in respect of,
in lieu
of or in substitution for, shares of its Gesch’ftsanteile;
(iii) authorize,
propose or announce an intention to authorize or propose, or enter into
agreements with respect to, any mergers, consolidations or business combinations
or any other type of corporate reconstruction;
(iv) adopt
any
amendments to its Governing Documents nor pass any shareholders'
resolutions;
(v) issue,
sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge,
disposition or encumbrance of, any shares of its Gesch’ftsanteile or other
ownership interest in a Target Company or any securities convertible into
or
exchangeable for any such Gesch’ftsanteile or ownership interest, or any rights,
warrants or options to acquire or with respect to any such shares of
Gesch’ftsanteile, ownership interest or convertible or exchangeable securities
or take any action to cause to be exercisable any otherwise unexercisable
option
under any existing option plan (except as otherwise required by the express
terms of any unexercisable options outstanding on the date hereof), other
than
issuances of Gesch’ftsanteile in respect of any exercise of options outstanding
on the date hereof and disclosed in Section
5.1
of the
Disclosure Schedule;
(vi) incur,
assume, guarantee, prepay or otherwise become liable for any Indebtedness
(directly, contingently or otherwise), other than in the ordinary course
of
business consistent with past practice;
(vii) sell,
lease, license, transfer, exchange or swap, mortgage or otherwise encumber
(including securitizations), or subject to any Lien (other than Permitted
Liens)
or otherwise dispose of any material properties or assets, including the
Gesch’ftsanteile of TRA, EKOM and EHG except (i) for ordinary course sales of
mobile telephone equipment to customers of the Company or services in the
ordinary course of business, (ii) for sales, leases, licenses, transfers,
mortgages or encumbrances of obsolete assets or assets which are being replaced,
(iii) pursuant to existing agreements in effect prior to the execution of
this
Agreement which are disclosed in Section
5.1(b)(vii)
of the
Disclosure Schedule, and (iv) as may be required by applicable Law or any
Governmental Entity in order to permit or facilitate the consummation of
the
Transactions;
(viii) (i)
other
than with respect to the Current Tax Audit, make or change any material Tax
election or settle or compromise any material Tax liability, claim or assessment
or agree to an extension or waiver of the limitation period to any material
Tax
claim or assessment or grant any power of attorney with respect to material
Taxes or (ii) change its fiscal year;
(ix) except
in
respect of the Transactions or in the ordinary course of business, acquire
any
revenues, assets or business or undertakings, or assume or incur a liability,
obligation or expense (actual or contingent) which are in the aggregate
material;
(x) except
as
may be required in connection with unplanned requirements for increased usage
of
the Network make capital expenditures during 2005 materially below or materially
in excess of the levels set forth in the Capital Expenditure Budget;
(xi) discontinue,
amend or renew any of the Policies nor do, or omit to do, anything which
might:
(A) make
any
of the Policies void or voidable;
(B) entitle
any of the insurers under any of the Policies to refuse indemnity in relation
to
particular claims in whole or in part;
provided
that this shall not prevent (a) the notification to insurers of claims in
circumstances which might give rise to claims under any of the Policies in
accordance with the terms of the relevant Policies or (b) the replacement
of a
Policy by a reasonably comparable policy;
(xii) in
relation to any Property:
(A) change
its existing use;
(B) other
than in the ordinary course of business, terminate, or give a notice to
terminate, a lease, tenancy or licence;
(C) modify
an
existing lease, tenancy or licence to increase in any material amount the
rent
or fees payable thereunder; or
(D) acquire
any freehold or leasehold right in any property which is not already a Property,
save (1) to replace an existing Property on substantially the same material
terms as those currently applying to such existing Property or (2) for RAN
sites
and sales outlets;
(xiii) enter
into any Contract or arrangement that would be a Company Material Contract
if
entered into prior to the date hereof other than (1) Company Material Contracts
that are in replacement or substitution for Company Material Contracts that
by
their terms expire and (2) Company Material Contracts entered into the ordinary
course of business consistent with past practice, provided in any event that
the
terms of such replacement or new Company Material Contract are not unusual
or
unusually onerous for that type of Contract;
(xiv) terminate
or amend any Company Material Contract other than in the ordinary course
of
business consistent with past practices;
(xv) give,
or
agree to give, a guarantee, indemnity or other agreement to secure, or incur
financial or other obligations with respect to, another Person's obligation,
other than with respect to any other Target Company;
(xvi) except
pursuant to existing Company Benefit Plans, establish a pension scheme or
amend
or discontinue (wholly or partly) an existing scheme or communicate to an
employee a plan, proposal or an intention to establish a scheme or exercise
a
material discretion in relation to an existing scheme or pay any material
benefits under an existing pension scheme other than in accordance with the
terms of the documents governing such scheme;
(xvii) fail
to
comply in all material respects with the obligations under any Company License
when it falls due for performance;
(xviii) start
litigation or arbitration proceedings in an amount in excess of
EUR 100,000;
(xix) except
in
the ordinary course of business, compromise or settle litigation or arbitration
proceedings or any action, demand or dispute or waive a right in relation
to
litigation or arbitration proceedings in excess of
EUR 100,000;
(xx) release
or discharge any material liability or material claim or compound any liability
or claim such that it becomes a material liability or material claim (or,
when
combined with other compounded liabilities and/or claims, material in
aggregate);
(xxi) fail
to
conduct its business in all material respects in accordance with all applicable
legal and administrative requirements in any jurisdiction;
(xxii) fail
to
protect, defend, enforce, maintain and renew each of the material Intellectual
Property Rights and continue any pending application for the material
Intellectual Property Rights;
(xxiii) fail
to
provide a level of customer care which is consistent with past
practice;
(xxiv) change
its credit check policy for new customers;
(xxv) other
than in the ordinary course of business consistent with past practices and
in
the ordinary course of business as it evolves, change its prolongation policy
(namely, its policy whereby existing customers are encouraged to renew their
contracts by offering them terms more favourable than those offered to them
previously);
(xxvi) fail
to
conduct, or cause to be conducted through the agreement with Alcatel S.A.
listed
in Section 3.28 of the Disclosure Schedule and set forth in the Exhibited
Documents, routine maintenance of the Network consistent with past practice
in
all material respects;
(xxvii) fail
to
use commercially reasonable efforts to maintain the services to the fixed
line
and mobile customers of the Target Group, including SMS, MMS, VMS, GPRS,
WAP and
IN services, based upon currently projected customer growth, capacity and
performance levels, at a level of performance consistent with past
practice;
(xxviii)
change
its policy of retaining all data material to the business, planning, management
or operations of any Target Company, or to the compliance by any Target Company
with its obligations under applicable Laws;
(xxix) materially
modify its billing systems, policies or processes;
(xxx) terminate
any roaming contracts, other than in the ordinary course of business and
in
accordance with past practice; or
(xxxi) agree,
in
writing or otherwise, to take any of the foregoing actions.
| Section 5.2 |
Access
and Investigation
|
The
Seller shall cause the Company to afford to the Purchaser and its officers,
employees, accountants, consultants, legal counsel, financial advisors and
agents and other representatives (collectively, “Representatives”)
such
access during normal business hours (and without material disruption to the
business of the Seller or the Target Companies) as they may reasonably request,
throughout the period ending on the earlier of the Closing Date or the
Termination Date, to the Target Group's properties, contracts, commitments,
books and records and any report, schedule or other document filed or received
by it pursuant to the requirements of federal or state securities laws. The
Seller shall use all reasonable efforts to cause its Representatives to furnish
promptly such additional financial and operating data and other information
as
to each Target Company’s businesses and properties as the Purchaser or its
Representatives may from time to time reasonably request and which are
reasonably available. However, nothing herein shall require the Seller or
any
Target Company to disclose any information to the Purchaser that would
constitute a violation of any agreement to which the disclosing party is
a
party, would cause a risk of a loss of legal privilege to the party disclosing
such data or information, or would constitute a violation of applicable Laws.
The Purchaser hereby agrees to treat any such information in accordance with
the
confidentiality agreement, dated as of April 29, 2005 but executed on May
2,
2005, between Western Wireless International Holding Corporation and Deutsche
Telekom AG (the “Confidentiality
Agreement”).
Notwithstanding any provision of this Agreement to the contrary, no party
shall
be obligated to make any disclosure in violation of applicable Laws or
regulations.
| Section 5.3 |
Notification
|
The
Seller shall give prompt notice to the Purchaser, and the Purchaser shall
give
prompt notice to the Seller, of (a) the occurrence of any event known to
it
which would reasonably be expected to, individually or in the aggregate,
(i)
have a Material Adverse Effect on the Target Group taken as a whole, or
Purchaser, as applicable, or (ii) cause any condition set forth in Article
6
to be
unsatisfied at any time prior to the Closing Date; or (iii) cause any Warranty
to be untrue, inaccurate or misleading in any material respect or would be
likely to cause any Warranty to be untrue, inaccurate or misleading, in any
material respect if given at Closing; or (b) any action, suit, proceeding,
inquiry or investigation pending or, to the knowledge of the Seller or the
Purchaser, as applicable, threatened which questions or challenges the validity
of this Agreement. The delivery of any notice pursuant to this Section
5.3
shall
not limit or otherwise affect the remedies available hereunder to the party
receiving such notice nor shall the party giving such notice be prejudiced
with
respect to any such matters solely by virtue of having given such
notice.
| Section 5.4 |
Filings;
Other Actions
|
(a) Subject
to the terms and conditions set forth in this Agreement, each of the parties
hereto shall use all reasonable efforts (subject to, and in accordance with,
applicable Law) to take promptly, or cause to be taken, all actions, and
to do
promptly, or cause to be done, and to assist and cooperate with the other
parties in doing, all things necessary, proper or advisable under applicable
Laws and regulations to consummate and make effective the Transactions,
including (i) the obtaining of all necessary actions, waivers, consents and
approvals, including the Company Consents, from Governmental Entities and
the
making of all necessary registrations and filings and the taking of all steps
as
may be necessary to obtain an approval or waiver from, or to avoid an action
or
proceeding by, any Governmental Entity, (ii) the obtaining of all necessary
consents, approvals or waivers from third parties, (iii) the defending of
any
lawsuits or other legal proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of the Transactions and (iv)
the
execution and delivery of any additional instruments necessary to consummate
the
Transactions, provided always that nothing in this Agreement shall oblige
the
Purchaser or any of its Affiliates to accept any conditions or remedies
requested or demanded from any authority in relation to the Merger Authority
Consents or License Consents which in the Purchaser's reasonable opinion
would
have a material detrimental economic effect on the Purchaser, its Subsidiaries
and the Target Group, taken as a whole. The Seller and its Affiliates and
the
Purchaser and its Affiliates shall use all reasonable efforts to ensure that
any
such conditions or remedies be removed or reduced.
(b) Subject
to the terms and conditions herein provided and without limiting the
foregoing:
(i) the
Purchaser shall promptly (but in no event later than 30 days after the date
hereof) file applications required to be filed with the European Commission
to
consummate the Transactions (the “Merger
Authority Consents”)
and
respond as promptly as practicable to any additional requests for information
received from the European Commission by any party to such application, and
the
Seller shall and shall cause each of its Affiliates to cooperate with the
Purchaser in filing such applications, responding to such requests and obtaining
such consents;
(ii) the
Seller shall cause the Company and TRA to promptly (but in no event later
than
30 days after the date hereof) file applications (the “Communications
Applications”)
required to be filed with the TKK and the RTR-GmbH to effect the transfer
of
control of the National Company Licenses (the “License
Consents”)
and
respond as promptly as practicable to any additional requests for information
received from the TKK and the RTR-GmbH by any party to a Communications
Application, and the Second Purchaser shall, and shall cause its Affiliates
to,
cooperate with the Seller, the Company and TRA in filing such applications,
responding to such requests and obtaining such consents;
(iii) the
Seller shall cause the Company to use all reasonable efforts to cure not
later
than the Closing Date any violations or defaults under any TKK or RTR-GmbH
Rules;
(iv) the
Seller shall cause the Company to, and the Purchaser shall, use all reasonable
efforts to cooperate with each other in (A) determining whether any filings
are
required to be made with, or consents, permits, authorizations or approvals
are
required to be obtained from, any third parties or other Governmental Entities
in connection with the execution and delivery of this Agreement and the
consummation of the Transactions and (B) the timely making of all such filings
and timely seeking of all such consents, permits, authorizations or
approvals;
(v) the
Seller shall and shall cause each of its Affiliates to, and the Purchaser
shall,
and shall cause each of its Affiliates to, use all reasonable efforts to
take,
or cause to be taken, all other actions and do, or cause to be done, all
other
things necessary, proper or advisable to consummate and make effective the
Transactions (subject to the proviso set forth in Section 5.4(a) above);
and
(vi) subject
to applicable legal limitations and the instructions of any Governmental
Entity,
the Seller shall and shall cause the Target Group to, and the Purchaser shall,
and shall cause its Affiliates, to keep each other apprised of the status
of
matters relating to the completion of the Transactions, including promptly
furnishing the others with copies of notices or other communications received
by
the relevant party, or any of its respective Subsidiaries, from any third
party
and/or any Governmental Entity with respect to the Transactions.
| Section 5.5 |
Public
Announcements
|
The
Seller and the Purchaser will consult with and provide each other the
opportunity to review and comment upon any press release or other public
statement or comment prior to the issuance of such press release or other
public
statement or comment relating to this Agreement or the Transactions and shall
not issue any such press release or other public statement or comment without
the other's approval (such approval not be to be unreasonably withheld or
delayed) except as may be required by Law or by obligations pursuant to any
listing agreement with any national securities exchange. The Seller and the
Purchaser agree to issue a press release announcing this Agreement.
| Section 5.6 |
Control
of Operations
|
Nothing
contained in this Agreement shall give the Purchaser, directly or indirectly,
the right to control or direct the operations of any Target Company prior
to the
Closing Date. Prior to the Closing Date, each Target Company shall exercise,
consistent with the terms and conditions of this Agreement, complete control
and
supervision over its operations.
| Section 5.7 |
Interim
Financial Statements
|
The
Seller shall cause each Target Company to provide the Purchaser, as and when
available, with copies of all monthly financial statements and reports that
are
prepared by each Target Company in the ordinary course of business prior
to the
Closing.
| Section 5.8 |
The
Company Reorganization;
Intercompany Indebtedness
|
(a) Prior
to
the Closing Date, the parties shall (if so required by the Purchaser) work
together in good faith to agree a detailed step plan (the "Step
Plan")
in
relation to the merger of EHG with and into the Company (the “Company
Reorganization”),
the
key principles of which are set forth in Schedule 4 hereto, and, following
agreement to the Step Plan, the Seller shall effect the Company Reorganization
in accordance with the Step Plan prior to the Closing Date. The Seller confirms
that as a result of the Company Reorganization, the Company shall be the
surviving company, the separate existence of EHG shall cease and the Seller
shall own all of the Company Shares. Between the date hereof and the Closing
Date, EHG shall take no action other than as is reasonably necessary to
facilitate the consummation of the Company Reorganization.
(b) If
the
parties do not agree to the Step Plan by August 31, 2005, the Company
Reorganization shall not be effected, and the Seller shall instead transfer
to
the First Purchaser and Second Purchaser (in the same proportions as set
out in
Section 2.1(a)) the entire issued share capital in EHG free of all Liens
(other
than those restrictions on transfer of the shares in EHG under applicable
Law
which are set forth in Section 3.6 of the Disclosure Schedule) in consideration
for the Purchase Price and references in this Agreement to the transfer of
the
Company Shares shall be construed as references to the transfer of the shares
in
EHG, save where the context requires otherwise.
(c) Following
the Company Reorganization, but not before Closing it is intended that the
Company shall be restructured by way of a tax-neutral spaltung, causing the
Company to be divided into a company primarily owning the Network and a company
primarily acting as a service provider for certain customers of the Company.
Such preparatory steps as shall be reasonably requested by the Purchaser
(and
which can reasonably be effected by the Target Companies) shall be effected
by
the Seller (at the Purchaser's expense) prior to Closing.
(d) On
or
prior to the Closing Date, the Seller shall cause all Intercompany Indebtedness
outstanding immediately prior to the Closing to be terminated, cancelled
or
contributed to the capital of the Company.
| Section 5.9 |
Non-Solicitation
|
Prior
to
the Closing Date, none of the Seller, its Affiliates nor any Person acting
on
behalf of the Seller or such Affiliates shall: (a) solicit or encourage any
inquiries or proposals for, or enter into any discussions with respect to,
the
acquisition of the Company Shares, or any Target Company, or, other than
in the
ordinary course of business, any properties and assets of any Target Company
(an
"Acquisition
Transaction");
or
(b) furnish or cause to be furnished any non-public information concerning
the
business of any Target Company to any Person (other than the Purchaser and
its
Representatives), other than in the ordinary course of business or pursuant
to
applicable Law and after prior written notice to the Purchaser.
| Section 5.10 |
Resignations
|
On
the
Closing Date, the Seller shall cause to be delivered to the Purchaser duly
signed resignations in a form reasonably acceptable to the Purchaser, effective
immediately after the Closing, of all the directors and officers of each
Target
Company who are officers or employees of the Seller or any Affiliate of the
Seller, but not employees of a Target Company and shall take such other action
as is necessary to accomplish the foregoing.
| Section 5.11 |
Support
Services
|
The
Purchaser acknowledges that the Seller shall have no obligation to provide
any
support or other services to any Target Company following the Closing Date
with
respect to the applicable Target Company.
| Section 5.12 |
Further
Covenants
|
(a) Data
room.
It is
acknowledged that it is important to the Purchaser to review the contents
of all
documents and materials which were made available to any potential buyer
of the
Company which was in substantially the same competitive position towards
the
Target Group as the Purchaser (the "Data
Room Documents").
As
access to the Data Room Documents was not granted to the Purchaser prior
to the
date of this Agreement (although copies of certain Data Room Documents were
provided to the Purchaser), it is agreed that the Seller shall: (i) procure
that
the Purchaser is allowed full access (on notice given one Business Day in
advance) to all Data Room Documents; and (ii) provide the Purchaser with
a
certificate signed by an officer of the Seller, certifying that the obligation
set forth in (i) has been complied with.
(b) Access.
On and
after the Closing Date, the Purchaser shall give to the Seller and its
Representatives such access during normal business hours (and without material
disruption of the business of the Purchaser or the Target Companies) as the
Seller may reasonably request to the properties, books, records and employees
of
each Target Company relating to any period ending on or before the Closing
Date,
for purposes of (i) investigating, preparing the defense or prosecution of,
prosecuting or defending any litigation proceeding, or investigation pending,
threatened or anticipated by or against the Seller, except in an action between
the parties hereto or their respective Affiliates; provided that (x) the
normal
conduct of the business shall not be disrupted thereby and (y) in the event
of
any litigation or threatened litigation between the parties, the foregoing
shall
in no event be, or be deemed to be, a waiver by a party of any right to assert
the attorney client privilege or other applicable privilege and nothing in
this
clause shall have the effect of limiting any disclosure rights or obligations
under Law or arbitration proceedings (assuming for this purpose that discovery
was as permitted under New York Law) that would exist but for the provisions
of
this clause, or (ii) other proper purposes consistent with matters relating
to a
divested business, including, without limitation, for matters relating to
Company Benefit Plans and the preparation and filing of any Tax return,
statement, report or form and any audit, litigation or other proceeding with
respect to Taxes including in connection with the sale of any Target Company's
assets that is deemed to occur for U.S. federal income tax purposes as a
result
of the Transactions.
(c) Assistance
and Cooperation.
On and
after the Closing Date, the Seller and the Purchaser shall:
(i) assist
(and cause their respective Affiliates to assist) the other party in preparing
any Tax Returns which such other party is responsible for preparing and filing
and which are related to (A) the sale of the Company Shares pursuant to this
Agreement, or (B) any taxable period of any Target Company or portion thereof,
occurring on or before the Closing Date (the “Pre-Closing
Period”);
(ii) cooperate
fully in responding to audits by any Governmental Entity of any Tax Returns
of
any Target Company for any Pre-Closing Period;
(iii) provide
timely notice to the other in writing of any pending or threatened Tax audits
or
assessments of any Target Company for any Pre-Closing Period; and
(iv) furnish
the other with copies of all correspondence received from any Governmental
Entity in connection with any Tax audit or information request with respect
to
any Pre-Closing Period.
(d) Further
Assurances.
Following the Closing, the Purchaser and the Seller shall, and shall cause
each
of their Affiliates to, from time to time, execute and deliver such additional
instruments, documents, conveyances or assurances and take such other actions
as
shall be necessary, or otherwise reasonably requested by any other party,
to
confirm and assure the rights and obligations provided for in this Agreement
and
render effective the consummation of the Transactions.
(e) D&O
Policy.
At the
request of the Purchaser, the Seller shall use reasonable efforts to purchase
for the individuals who are directors and officers of the Target Group
immediately prior to the Closing Date, a "tail policy" to the directors'
and
officers' liability insurance maintained by or for the Seller, with limits
of
not less than US$10,000,000 with respect to claims arising from facts or
events
that occurred on or before the Closing Date. The Purchaser shall reimburse
the
Seller for the Seller's actual cost incurred to obtain this insurance, including
the payment of deductibles, if any.
| Section 5.13 |
Cash
Extraction
|
(a) It
is
agreed that between the date of this Agreement and the Closing
Date:
(i) the
Company may apply cash towards the repayment of the Vendor Group Loan, provided
always that the cumulative aggregate amount which may be so applied shall
not
exceed an amount (the "Maximum
Cash Extraction Amount")
equal
to the product of (x) EUR 10 million, and (y) the number of months
(for
such purposes, any portion of a month shall be deemed a month) between the
date
hereof and the Closing Date; and
(ii) should
the Vendor Group Loan be fully repaid and satisfied prior to the Closing
Date in
accordance with the above, any cash retained by the Company may be distributed
(by way of a dividend or otherwise) to the Seller, provided such distribution
shall not:
(A) exceed
an
amount equal to (1) the Maximum Cash Extraction Amount less (2) the aggregate
sum applied towards settling the Vendor Group Loan in accordance with this
Section 5.13;
(B) result
in
the Working Capital of the Target Group at the Closing Date being less than
the
Target Working Capital; or
(C) have
any
adverse Tax consequences for any Target Company, which are not fully compensated
for by the Seller (and for the avoidance of doubt, the timely payment of
withholding Tax by any Target Company in connection with any dividend or
distribution shall not be considered to have an adverse Tax consequence for
any
Target Company provided that the withholding Tax concerned is deducted from
the
dividend or distribution made).
(b) Any
amounts to be applied pursuant to Section
5.13(a)
may be
distributed at or prior to the Closing Date.
(c) The
Seller confirms that payments in relation to the Vendor Group Loan during
the
period from July 1, 2005 through the date of this Agreement have not exceeded
a
cumulative aggregate amount of EUR 14,181,072.
CONDITIONS
PRECEDENT
| Section 6.1 |
Conditions
to Each Party’s Obligation to
Close
|
The
respective obligations of each party to effect the Closing of the Transactions
shall be subject to the fulfillment (or waiver by all parties) at or prior
to
the Closing Date of the following conditions:
(a) No
statute, rule, regulation, executive order, decree, ruling or injunction
shall
have been enacted, entered, promulgated or enforced by any court or other
tribunal or Governmental Entity which prohibits the consummation of the
Transactions, and shall continue to be in effect.
(b) Subject
to the provisio at the end of Section 5.4(a), all License Consents shall
have
been granted and all such License Consents shall be in full force and
effect.
(c) Subject
to the provisio at the end of Section 5.4(a), all Merger Authority Consents
shall have been granted and all such Merger Authority Consents shall be in
full
force and effect.
| Section 6.2 |
Conditions
to Obligation of the Purchaser to
Close
|
The
obligation of the Purchaser to effect the Closing of the Transactions shall
be
subject to the fulfillment (or waiver by the Purchaser) at or prior to the
Closing Date of the following conditions:
(a) Subject
to Section
6.4,
(i) the
representations and warranties of the Seller contained herein (other than
the
representations and warranties in Section
3.10(ii))
shall have been true and correct and not misleading when made and as of the
Closing Date with the same effect as though made as of the Closing Date except
(x) for changes specifically permitted by the terms of this Agreement (including
the consummation of the Company Reorganization, which will result in EHG
ceasing
to exist), (y) that the accuracy of representations and warranties that by
their
terms speak as of the date of this Agreement or some other date will be
determined as of such date and (z) where any such failure of the representations
and warranties in the aggregate to be true and correct would not be likely
in
the reasonable opinion of the Purchaser to result in a liability of the Seller
pursuant to a Warranty Claim (or would so result if Closing took place) in
an
amount (the "Claim
Amount")
exceeding EUR 130,000,000); and (ii) the representations and warranties
of
the Seller contained in Section
3.10(ii)
shall have been true and correct when made and as of the Closing Date with
the
same effect as though made as of the Closing Date, except for changes
specifically permitted by the terms of this Agreement (including the
consummation of the Company Reorganization, which will result in EHG ceasing
to
exist) and save where such breach of Warranty would not be likely in the
reasonable opinion of the Purchaser to result in liability of the Seller
(or
would do if Closing took place) in an amount exceeding EUR
130,000,000.
(b) The
Seller shall have performed in all material respects all obligations and
complied in all material respects with all covenants and agreements required
by
this Agreement to be performed or complied with by it prior to the Closing
Date.
(c) The
Seller shall, subject to Section 5.8, have effected the Company
Reorganization.
(d) The
Intercompany Indebtedness shall have been terminated, cancelled or contributed
to the capital of the Company, and instruments reasonably satisfactory to
the
Purchaser evidencing the foregoing shall have been delivered to the Purchaser.
Any capital duty or other tax due as a result of such termination, cancellation
or contribution will be paid by the Seller (and this Section 6.2(d) shall
apply
equally to any such payment).
(e) No
Target
Company shall have any outstanding Indebtedness (other than Indebtedness
owed to
another Target Company).
(f) The
Seller shall have delivered to the Purchaser a certificate of an officer
of the
Seller, dated the Closing Date, certifying the satisfaction of the conditions
set forth in Section
6.2(a)
to
Section 6.2(e) inclusive.
(g) The
Seller shall have delivered to the Purchaser (in the case of items (ii) and
(vi)
in a place outside Austria):
(i) the
Share
Transfer Agreements in substantially the form attached hereto executed by
the
Seller;
(ii) the
Vendor Guarantee in substantially the form attached hereto executed by the
Vendor Guarantor;
(iii) a
legal
opinion from the Seller's Lawyers in a form satisfactory to the Purchaser
acting
reasonably confirming the capacity of the Vendor Guarantor to enter the Vendor
Guarantee and the validity and enforceability of the Vendor
Guarantee;
(iv) evidence
of the authority of each person executing this Agreement and each document
referred to in this Agreement or otherwise required to be executed on the
Seller's behalf in order to consummate the Transactions;
(v) each
register, minute book and other book required to be kept by each Target Company
made up to the Closing Date; and
(vi) a
letter
from ALLTEL substantially in the form of the document set forth in Attachment
2.
| Section 6.3 |
Conditions
to Obligation of the Seller to
Close
|
The
obligation of the Seller to effect the Closing of the Transactions shall
be
subject to the fulfillment (or waiver by the Seller) at or prior to the Closing
Date of the following conditions:
(a) The
representations and warranties of the Purchaser contained herein shall have
been
true and correct and not misleading when made and as of the Closing Date
with
the same effect as though made as of the Closing Date except (i) for changes
specifically permitted by the terms of this Agreement, (ii) that the accuracy
of
representations and warranties that by their terms speak as of the date of
this
Agreement or some other date will be determined as of such date and not as
of
the Closing Date and (iii) where any such failure of the representations
and
warranties in the aggregate to be true and correct would not reasonably be
expected to have a Material Adverse Effect on the Purchaser.
(b) The
Purchaser shall have performed in all material respects all obligations and
complied in all material respects with all covenants and agreements required
by
this Agreement to be performed or complied with by it prior to the Closing
Date.
(c) The
Purchaser shall have delivered to the Seller a certificate of an officer
or
director of the Purchaser, dated the Closing Date, certifying as to the
satisfaction of the conditions set forth in Section
6.3(a)
and
Section
6.3(b).
(d) The
Purchaser shall have paid to the Seller the Closing Date Payment by wire
transfer of immediately available funds pursuant to the Seller's written
instructions delivered at least 2 Business Days in advance.
(e) The
Current Tax Audit shall have been completed and the Tax Audit Authority shall
have issued to the Company its audit report (Betriebsprüfungsbericht) with
respect to the period to which the Current Tax Audit relates.
| Section 6.4 |
Walk-away
rights
|
In
the
event of the condition set forth in Section
6.2(a)
not
being satisfied prior to Closing:
(a) if
the
Claim Amount exceeds EUR 130,000,000 but is less than EUR 195,000,001
and the Purchaser elects to waive the condition set forth in Section
6.2(a),
the
Purchaser may (after Closing) bring any action against the Seller for breach
of
the Warranties in question (in so far as such action would relate to the
Claim
Amount), provided that (i) the amount of such claim shall not exceed
EUR 130,000,000
and (ii)
any right to recover such Claim Amount in excess of EUR 130,000,000 shall
be
deemed to have been waived by the Purchaser; and
(b) if
the
Claim Amount exceeds EUR 195,000,000 and the Purchaser elects to waive
the
condition set forth in Section
6.2(a),
the
Purchaser may not after Closing bring any action against the Seller for breach
of the Warranties in question (in so far as such action would relate to such
Claim Amount) and shall be deemed for the purposes of this Agreement to have
waived the right to recover such Claim Amount.
(c) For
the
avoidance of doubt, should the Purchaser become aware of any breach of Warranty
prior to Closing, the Purchaser shall after Closing be entitled to bring
any
action against the Seller in relation to such breach or breaches, save as
set
forth in Section
6.4(a)
and
Section
6.4(b)
above.
TERMINATION
| Section 7.1 |
Termination
Events
|
By
notice
given prior to Closing, this Agreement may be terminated as
follows:
(a) by
agreement of the Purchaser and the Seller;
(b) by
either
the Purchaser or the Seller if (i) the Closing Date shall not have occurred
on
or before February 28, 2006 and (ii) the party seeking to terminate this
Agreement pursuant to this Section
7.1(b)
shall
not have breached in any material respect its obligations under this Agreement
in any manner that shall have proximately caused the failure to consummate
the
Transactions on or before such date;
(c) by
either
the Purchaser or the Seller if (i) a statute, rule, regulation or executive
order shall have been enacted, entered or promulgated prohibiting the
consummation of the Transactions or (ii) an order, decree, ruling or injunction
shall have been entered permanently restraining, enjoining or otherwise
prohibiting the consummation of the Transactions and such order, decree,
ruling
or injunction shall have become final and non-appealable and the party seeking
to terminate this Agreement pursuant to this clause shall have used all
reasonable efforts to remove such injunction, order, decree or
ruling;
(d) by
the
Seller, if the Purchaser shall have breached or failed to perform in any
material respect any of its representations, warranties, covenants or other
agreements contained in this Agreement, which breach or failure to perform
(i)
would result in a failure of a condition set forth in Section
6.1
or
Section
6.3
and (ii)
cannot be cured by February 28, 2006), provided that (if the breach or failure
to perform is capable of remedy or cure by the Purchaser) the Seller shall
have
given the Purchaser written notice, delivered at least thirty (30) days prior
to
such termination, stating the Seller's intention to terminate this Agreement
pursuant to this Section
7.1(d)
and the
basis for such termination;
(e) by
the
Purchaser, if the Seller shall have breached or failed to perform in any
material respect any of its representations, warranties, covenants or other
agreements contained in this Agreement, which breach or failure to perform
(i)
would result in a failure of a condition set forth in Section
6.1
or
Section
6.2
and (ii)
cannot be cured by February 28, 2006), provided that (if the breach or failure
to perform is capable of remedy or cure by the Seller) the Purchaser shall
have
given the Seller written notice, delivered at least thirty (30) days prior
to
such termination, stating the Purchaser’s intention to terminate the Agreement
pursuant to this Section
7.1(e)
and the
basis for such termination; or
(f) by
the
Seller, if the difference between the Pre-Adjustment Purchase Price and the
Closing Date Payment (taking account all applicable adjustments) would exceed
EUR 50,000,000, provided that:
(i) if
the
difference between the Pre-Adjustment Purchase Price and the Closing Date
Payment as determined before the Closing Date in accordance with Section
2.1(g)
does not
exceed EUR 50,000,000, but the sum of (A) any such difference and (B) any
further reduction of the Purchase Price after the Closing Date pursuant to
Section
2.1(d)(ii)
and/or
Section
2.1(e),
does
exceed EUR 50,000,000, the Seller shall have no right to terminate this
Agreement and shall be required to accept any such further reduction of the
Purchase Price; and
(ii) if
the
calculation of the Closing Date Payment in accordance with Section
2.1(g)
shows
that the difference between the Pre-Adjustment Purchase Price and the Closing
Date Payment would exceed EUR 50,000,000 and the Seller exercises
its right
to terminate this Agreement pursuant to this Section
7.1(f),
the
Purchaser shall have the right either to (at the Purchaser's option and subject
to the provisions set out below as well as the proviso set out at the end
of
this Section
7.1(f)(ii)):
(x) (by
giving notice ("Notice")
to the
Seller within five Business Days after receipt of the Seller's termination
notice) dispute the calculation of the Closing Date Payment based on the
numbers
used as Actual ARPU and Actual Customer Number to make that calculation.
If (A)
the Purchaser gives such Notice, and (B) within five Business Days starting
on
the day after the giving of the Notice, the Seller and the Purchaser have
not
agreed on all such numbers in relation to the draft Statement referred to
in
Section
2.1(b),
then
either of them may refer the matters in dispute to a partner of at least
10
years' qualified experience at an independent firm of chartered accountants
agreed by the parties in writing, or, failing agreement on the identity of
such
partner within ten Business Days starting on the day after the giving of
the
Notice, a partner in an independent firm of chartered accountants appointed
on
the application of either party by the President for the time being of the
Austrian Xxxxxx der Wirtschaftstreuh’nder (such partner either agreed to by the
Seller and Purchaser or appointed by the Xxxxxx der Wirtschaftstreuh’nder being
the "Expert").
The
Expert shall act on the following basis:
(I) the
Expert shall act as an expert and not as an arbitrator;
(II) the
Expert's terms of reference shall be to determine only the matters in dispute
within ten Business Days of his appointment;
(III) the
parties shall each provide the Expert with all assets, documents, records
and
information relating to each Target Company which the Expert reasonably requires
and the Expert shall base his determination on such information and on the
accounting and other records of each Target Company;
(IV) the
decision of the Expert shall be, in the absence of fraud or manifest error,
final and binding on the parties; and
(V) the
Seller and the Purchaser shall each pay one half of the Expert's costs or
as the
Expert may otherwise determine.
If
within
twenty-five Business Days after receipt of the termination notice (the
"Time
Limit"),
the
Seller and the Purchaser have not, acting in a cooperative manner and in
good
faith, agreed on all such numbers in dispute in relation to the draft Statement
or the Expert shall not have so determined such dispute, the termination
notice
shall (subject to the Purchaser's right under option (y) below) be
effective.
The
draft
Statement adjusted in accordance with the agreement, if any, between the
Seller
and the Purchaser pursuant to the above or (as the case may be) the decision
(absent fraud or manifest error) of the Expert in accordance with the above
shall be final and binding on the parties. If the difference between the
Pre-Adjustment Purchase Price and the Closing Date Payment as finally determined
in accordance with the above procedures does not exceed EUR 50,000,000,
the
termination of this Agreement by the Sellers shall be deemed invalid and
the
parties shall proceed to Closing and the Closing Date shall be the day falling
five Business Days after the day on which the final determination of the
Statement is notified to or agreed between the parties. In this case, the
difference between the Pre-Adjustment Purchase Price and the Closing Date
Payment shall be considered final and Section 2.1(e) shall not be applied;
or
(y) (by
giving notice ("Notice")
to the
Seller by the later of (A) five Business Days after receipt of the Seller's
termination notice and (B) if option (x) above has been exercised and it
has
been finally determined that the difference between the Pre-Adjustment Purchase
Price and the Closing Date Payment exceeds EUR 50,000,000, five Business
Days
after such determination and (C) if option (x) above has been exercised and
the
difference between the Pre-Adjustment Purchase Price and the Closing Date
Payment has not been agreed or determined by the Time Limit, five Business
Days
after the expiry of such Time Limit) determine that the Closing Date Payment
shall be the Pre-Adjustment Purchase Price less EUR 50,000,000, in which
case
the termination of this Agreement by the Sellers shall be deemed invalid
and the
parties shall proceed to Closing and the Closing Date shall be the day falling
five Business Days after the Notice being given by the Purchaser. In this
case,
the difference between the Pre-Adjustment Purchase Price and the Closing
Date
Payment shall be considered final and Section
2.1(e)
shall
not be applied.
Provided
that, in the event that the Current Tax Audit has been completed by the Tax
Audit Authority prior to the Closing Date and the NOL Adjustment Amount is
equal
to or exceeds EUR 50,000,000, the Purchaser shall not have the option set
forth
in Section
7.1(f)(ii)(x).
| Section 7.2 |
Effect
of Termination
|
Each
party’s right of termination under Section
7.1
is in
addition to any other rights it may have under this Agreement or otherwise,
and
the exercise of such right of termination will not be an election of remedies.
Termination shall not relieve any party to this Agreement of liability for
any
breach of this Agreement. Upon termination all provisions of this Agreement
will
terminate, except as set forth in this Section 7.2, Article 1, Section
8.2
and Sections 8.7 to 8.16 inclusive.
MISCELLANEOUS
| Section 8.1 |
Limitations
on Liability
|
(a) The
Purchaser hereby acknowledges and agrees that, except for the representations
and warranties expressly set forth in Article
3,
it has
not relied on any representations or warranties by the Seller or any other
Person, whether express or implied, and no claim shall be made against the
Seller in respect of any representation or warranty made in connection with
the
Transactions unless such representation or warranty is expressly contained
in
Article
3.
The
Seller hereby acknowledges and agrees that, except for the representations
and
warranties expressly set forth in Article
4,
it has
not relied on any representations or warranties by the Purchaser or any other
Person, whether express or implied, and no claim shall be made against the
Purchaser in respect of any representation or warranty made in connection
with
the Transactions unless such representation or warranty is expressly contained
in Article
4.
(b) The
Seller is not liable in respect of a Warranty Claim or claim in respect of
a
Covenant:
(i) unless
the amount that would otherwise be recoverable from the Seller (but for this
Section 8.1(b)) in respect of that Warranty Claim or claim in respect of
a
Covenant (other than in relation to a Warranty set forth in Section 3.23)
exceeds EUR 1,950,000;
and
(ii) (other
than in relation to a Warranty set forth in Section 3.23), unless and until
the
amount that would otherwise by recoverable from the Seller (but for this
Section
8.1(b)) in respect of that Warranty Claim or claim in respect of a Covenant,
when aggregated with any other amount or amounts recoverable in respect of
other
Warranty Claims or claims in respect of other Covenants, exceeds
EUR 26,000,000 and in the event that the aggregate amounts exceed
EUR 26,000,000 the Seller shall be liable in respect of the total
recoverable amounts (subject to Section 8.1(c)) and not the excess
only.
(c) The
Seller's total liability in respect of all Warranty Claims and claims in
respect
of covenants or agreements is limited to EUR 650,000,000
in the aggregate
but the
amount of a Warranty Claim related to Section 3.23 is not to be counted for
this
purpose.
(d) The
Seller is not liable for a Warranty Claim or a claim in respect of a covenant
or
agreement in respect of:
(i) a
Warranty contained in Section
3.23
unless
the Purchaser has notified the Seller of such Warranty Claim stating in
reasonable detail the nature of the Warranty Claim and, if practicable, the
amount claimed not later than three months after the expiry of the period
specified by statute during which an assessment of that liability to Tax
may be
issued by the relevant Tax Authority, provided, however, that if a notice
of a
Warranty Claim is timely delivered but (where such claim is an actual rather
than contingent claim) proceedings are not instituted by the Purchaser within
12
months of delivery of such notice, the Seller shall cease to be liable for
such
claim; and
(ii) any
other
Warranty Claim or claim in respect of a covenant or agreement unless the
Purchaser has notified the Seller of such Warranty Claim or claim in respect
of
a covenant or agreement stating in reasonable detail the nature of the Warranty
Claim or claim in respect of a covenant or agreement and, if practicable,
the
amount claimed on or before 24 months from the Closing Date, provided, however,
that if a notice of a Warranty Claim or claim in respect of a covenant or
agreement is timely delivered but (where such claim is an actual rather than
contingent claim) proceedings are not instituted by the Purchaser within
12
months of delivery of such notice, the Seller shall cease to be liable for
such
claim.
(e) The
Purchaser is not liable for a claim relating to Article
4
unless
the Seller has notified the Purchaser of the claim stating in reasonable
detail
the nature of the claim and, if practicable, the amount claimed on or before
24
months from the Closing Date, provided, however, that if a notice of a warranty
claim is timely delivered but (where such claim is an actual rather than
contingent claim) proceedings are not instituted by the Seller within 12
months
of delivery of such notice, the Purchaser shall cease to be liable for such
claim.
(f) Nothing
in this Agreement shall in any way restrict or limit the general obligations
of
the Purchaser or the Seller, and the Target Companies, and their respective
Affiliates to mitigate any loss or damage which they may suffer in consequence
of any matter giving rise to a claim (or capable of doing so) against another
party hereunder.
(g) If
any
payment is made to the Purchaser or any Target Company or any of their
respective Affiliates in respect of a Warranty Claim or claim in respect
of a
covenant or agreement by the Seller, Vendor Guarantor or any of their
Affiliates, and any Target Company or the Purchaser or their respective
Affiliates then has or thereafter acquires the right to recover from any
third
party (including any insurer) any amount in respect of the matter giving
rise to
such claim, the Purchaser, each Target Company and their respective Affiliates
shall so notify the Seller promptly, and shall, if requested by the Seller,
take
all appropriate steps to enforce such right, and the Purchaser, each Target
Company and their respective Affiliates shall pay to the Seller upon receipt
of
any such recovery the lesser of (i) any amount so recovered by the Purchaser,
each Target Company and their respective Affiliates in respect of the matter
giving rise to such claim, including any interest thereon, and (ii) the amount
paid by the Seller in respect of such claim.
(h) If
an
Indemnified Party shall receive notice of any action, audit, demand or
assessment (each, a “Third
Party Claim”)
against it or which may give rise to a claim for Loss under this Agreement,
within 10 Business Days of the receipt of such notice, the Indemnified Party
shall give the Indemnifying Party notice of such Third Party Claim, provided,
however, that the failure to provide such notice shall not release the
Indemnifying Party from any of its obligations under this Agreement except
to
the extent that the Indemnifying Party is materially prejudiced by such failure.
The Indemnifying Party shall be entitled to assume and control the defense
of
such Third Party Claim at its expense and through counsel of its choice if
it
gives notice of its intention to do so to the Indemnified Party within ten
Business Days of the receipt of notice from the Indemnified Party of such
Third
Party Claim (from which time, subject to the remainder of this Section 8.1(h),
the Indemnifying Party shall no longer be obliged to indemnify the Indemnified
Party for its counsel's fees in respect of such matter and incurred after
that
date); provided, however, that if there exists or is reasonably likely to
exist
a conflict of interest that would make it inappropriate for the same counsel
to
represent both the Indemnified Party and the Indemnifying Party, then the
Indemnified Party shall be entitled to retain its own counsel in each
jurisdiction for which the Indemnified Party reasonably determines counsel
is
required, at the reasonable expense of the Indemnifying Party. In the event
that
the Indemnifying Party exercises the right to undertake any such defence
against
any such Third Party Claim as provided above, the Indemnified Party shall
cooperate with the Indemnifying Party in such defence and make available
to the
Indemnifying Party all witnesses, pertinent records, materials and information
in the Indemnified Party’s possession or under the Indemnified Party’s control
relating thereto as is reasonably required by the Indemnifying Party, provided
always that the Indemnifying Party shall use every effort to keep confidential
any Confidential Information it receives relating to the Indemnified Party
and
its Affiliates. Similarly, in the event the Indemnified Party is conducting
the
defence against any such Third Party Claim, the Indemnifying Party shall
cooperate with the Indemnified Party in such defence and make available to
the
Indemnified Party all such witnesses, records, materials and information
in the
Indemnifying Party’s possession or under the Indemnifying Party’s control
relating thereto as is reasonably required by the Indemnified Party, provided
always that the Indemnified Party shall use every effort to keep confidential
any Confidential Information it receives relating to the Indemnifing Party
and
its Affiliates.
(i) Sections
8.1(b) and (c) do not apply in respect of a Warranty Claim involving or relating
to breach of a Warranty contained in Sections 3.1, 3.2, 3.3, 3.6 or 3.7 or
a
claim involving or relating to breach of Article 2 of the
Agreement.
(j) Nothing
in this Section 8.1 shall have the effect of limiting or restricting any
liability of a party in respect of a claim relating to Article
3
and
Article
4
arising
as a result of any fraud, wilful misconduct or wilful concealment.
| Section 8.2 |
Confidential
Information
|
(a) The
Seller undertakes to the Purchaser, for itself and as agent and trustee for
each
Target Company, that before and after Closing the Seller shall:
(i) not
use
or disclose to any person Confidential Information it has or
acquires;
(ii) make
every reasonable effort to prevent the use or disclosure of Confidential
Information; and
(iii) ensure
that each Seller's Affiliate complies with this Section 8.2.
(b) Section
8.2(a) does not apply to disclosure of Confidential Information:
(i) to
a
director, officer or employee of the Purchaser or of a Target Company whose
function requires him to have the Confidential Information;
(ii) required
to be disclosed by law, by a rule of a listing authority by which the Seller's
or its Affiliate's shares are listed, a stock exchange on which the Seller's
or
its Affiliate's shares are listed or traded or by a governmental authority
or
other authority with relevant powers to which the Seller or its Affiliate
is
subject or submits, whether or not the requirement has the force of law provided
that the disclosure shall so far as is practicable be made after consultation
with the Purchaser and after taking into account the Purchaser's reasonable
requirements as to its timing, content and manner of making or dispatch;
(iii) to
an
adviser for the purpose of advising the Seller in connection with the
Transactions provided that such disclosure is essential for these purposes
and
is on the basis that Section 8.2(a) applies to the disclosure by the adviser;
or
(iv) in
connection with the prosecution or defence of any Warranty Claim or claim
in
respect of a covenant or agreement.
(c) The
Seller shall procure the assignment to the Purchaser of the benefit of the
confidentiality provisions of all confidentiality agreements and undertakings
given by any other potential buyer of the Company but only to the extent
that:
(i) such
assignment is not prevented by the terms of such agreements and undertakings;
(ii) such
confidentiality provisions relate to the business of the Target
Group,
it
being
understood and agreed that (save where this would conflict with the interests
of
the Purchaser) notwithstanding such assignment the Seller shall retain
co-existing rights to enforce such confidentiality agreement.
The
Seller will send a letter in a form agreed with the Purchaser to the other
parties to such agreements and undertakings authorising the Purchaser to
recover
all information (as defined in such agreements or undertakings) or requesting
certification of its destruction to the Purchaser in each case in accordance
with the terms of such agreements and undertakings.
| Section 8.3 |
Indemnities
|
(a) Subject
to Section 8.3(f), the Seller shall pay to the Purchaser on demand an amount
equal to each Loss which results (directly or indirectly) out of any Target
Company's liability or disadvantage for Taxes (other than Income Taxes due
by
the Company and other than the subject matter of Section 8.3(b)(i)(D)) which
arises:
(i) in
consequence of an Event, other than the Company Reorganization, occurring
on or
before Closing; or
(ii) in
respect of a period ending on or before Closing, except in connection with
the
Company Reorganization, and except to the extent that provision for such
Taxes
is included in the Completion Accounts,
in
each
case whether or not the relevant Tax is chargeable against or attributable
to
another person and whether or not any amount in respect thereof is
recoverable
from any other person.
(b) (i)
Without prejudice to Section 2.1(d)(ii), the Seller shall not be required
to
indemnify the Purchaser and shall have no other obligation arising from this
Agreement with respect to any Income Taxes or any disallowance of tax loss
carryforwards (Verlustvortrag) available to the Target Group with respect
to any
period, provided the Seller shall indemnify the Purchaser: (1) with respect
to
clauses (A), (B) and (C) below, for any Loss suffered by the Company for
Income
Taxes for the period commencing on January 1, 2003 and ending on the Closing
Date, and (2) with respect to clause (D) below, for any Loss suffered by
EKOM
arising out of the transactions described in item 4 of Section 3.23 of the
Disclosure Schedule, as follows:
(A) if
the
audit report (Betriebsprüfungsbericht) of the Tax Audit Authority with respect
to the year 2003 shows that the Company has made a taxable income instead
of
having incurred a tax loss (regardless of whether such taxable income results
in
a cash payment obligation for the Company or the corporate income tax due
with
respect thereto is settled by way of a reduction in tax loss carryforwards
(Verlustvortrag) built up by the Company, which would otherwise have been
available to the Company), then the Seller shall indemnify the Purchaser
in the
amount of the Loss suffered by the Company as calculated pursuant to Section
8.3(b)(ii); and/or
(B) if
the
audit report (Betriebsprüfungsbericht) of the Tax Audit Authority with respect
to the year 2004 shows that the Company has made a taxable income in excess
of
EUR 10,157,000 (regardless of whether such excess taxable income results
in a
cash payment obligation for the Company or the corporate income tax due with
respect thereto is settled by way of a reduction in tax loss carryforwards
(Verlustvortrag) which would otherwise have been available to the Company,
except to the extent that any of the Company's tax loss carryforwards
(Verlustvortrag) from the year 2003 remain available), then the Seller shall
indemnify the Purchaser in the amount of the Loss suffered by the Company
as
calculated pursuant to Section 8.3(b)(ii); and/or
(C) if
the
audit report (Betriebsprüfungsbericht) of the Tax Audit Authority with respect
to the period commencing on January 1, 2005 and ending on the Closing Date
shows
that the Company has made a taxable income in excess of the amount of taxable
income shown on the Completion Accounts (regardless of whether such taxable
income results in a cash payment obligation for the Company or is settled
by way
of a reduction in tax loss carryforwards (Verlustvortrag) which would otherwise
have been available to the Company), then the Seller shall indemnify the
Purchaser in the amount of the Loss suffered by the Company as calculated
pursuant to Section 8.3(b)(ii); and/or
(D) if
it has
been determined based on an audit report (Betriebsprüfungsbericht) of the Tax
Audit Authority that EKOM has recognized taxable income in a period prior
to the
Closing Date by virtue of having waived receivables which is treated as a
taxable event as a result of the transactions described in item 4 of Section
3.23 of the Disclosure Schedule, the Seller shall indemnify the Purchaser
in the
amount of the Loss suffered by EKOM as calculated pursuant to Section
8.3(b)(ii), provided the Seller's total liability in respect of this Section
8.3(b)(i)(D) shall not exceed EUR 9,095,000.
(ii) Where
the
Seller is required to indemnify the Purchaser or the Company in accordance
with
Section 8.3(b)(i) with respect to a reduction in tax loss carryforwards which
would otherwise have been available to the Company, the Loss suffered by
the
Purchaser shall be considered equal to the value to the Company of such
reduction in tax loss carryforwards.
(c) The
Seller shall pay to the Purchaser on demand an amount equal to each Loss
incurred by the Target Companies or the Purchaser (without double counting)
which arises (directly or indirectly) out of the steps to be taken pursuant
to
Section
6.2(d)
and
Section
6.2(e)
of this
Agreement (or any failure to take such steps), including, without limitation,
each Loss reasonably incurred as a result of defending or settling a claim
alleging such a liability.
(d) Subject
to Section 8.3(b)(i), Section 8.3(f) and the limitations set forth in
Section
8.1,
the
Purchaser and its Affiliates, officers, directors, employees, agents, successors
and assigns (each, a “Purchaser
Indemnified Party”)
shall
be indemnified and held harmless by the Seller for and against any and all
liabilities, losses, claims, costs and expenses, interest, awards, judgments
and
penalties (including reasonable attorneys’ and experts’ fees and expenses)
actually suffered or incurred by them (including any action brought or otherwise
initiated by any of them) (hereinafter, a “Loss”),
arising out of or resulting from:
(i) the
breach of any Warranty made by the Seller contained in this Agreement;
or
(ii) the
breach of any covenant or agreement by the Seller contained in this Agreement,
provided
that nothing in this Section 8.3(d) shall be construed to impose any liability
for a Loss with respect to Taxes or any disallowance of tax loss carryforwards
(Verlustvortrag).
It
is
understood and agreed that an element of the Loss arising out of or resulting
from a specific breach of a Warranty or covenant or agreement by the Seller
(the
"Relevant
Breach")
can
be:
(x) where
the
Warranty or covenant or agreement the Seller is in breach of relates to assets
of any Target Company, the amount whereby the actual value of those assets
falls
short of the value those assets would have had, if it was not for the Relevant
Breach; or
(y) where
the
Warranty or covenant or agreement the Seller is in breach of relates to
liabilities of any Target Company, the amount whereby the actual amount of
those
liabilities exceeds what would have been the amount of those liabilities,
if it
was not for the Relevant Breach.
It
is
further understood and agreed that no Loss (or any portion of a Loss) which
is
taken into account in any Purchase Price adjustment pursuant to Section 2.1
shall be subject to a Warranty Claim or a claim in respect of a covenant
or
agreement (to the extent it has been taken into account).
(e) Subject
to the limitations set forth in Section 8.1, the Seller and its Affiliates,
officers, directors, employees, agents, successors and assigns (each, a
“Seller
Indemnified Party”)
shall
be indemnified and held harmless by the Purchaser jointly and severally for
and
against any and all Losses, arising out of or resulting from:
(i) the
breach of any representation or warranty made by the Purchaser contained
in this
Agreement; or
(ii) the
breach of any covenant or agreement by the Purchaser contained in this
Agreement.
(f) Notwithstanding
anything in this Agreement to the contrary, the Seller shall have no liability
to the Purchaser under this Article 8, or any other provision hereof or
otherwise, in respect of: (i) Taxes that are attributable to the Company
Reorganization, (ii) Taxes to the extent that they are attributable to actions
taken or failures to act by the Purchaser or its Affiliates prior to, on
or
after the Closing Date, (iii) Income Taxes due on the income for the period
commencing on January 1, 2005 shown in the Completion Accounts, and (iv)
any NOL
Adjustment Amount other than pursuant to Section 2.1.
(g) For
the
avoidance of doubt, Sections 8.3(a) and (b) shall apply to any result arising
from a Tax audit of the Company in relation to periods which ended on or
before
the Closing Date.
| Section 8.4 |
Tax
Matters
|
(a) The
Purchaser and the Seller agree that:
(i) The
Seller shall prepare and timely file or shall cause to be prepared and timely
filed all Tax returns in respect of the Target Companies that are required
to be
filed (taking into account extensions) on or before the Closing Date. The
Purchaser shall prepare and timely file or shall cause to be prepared and
timely
filed all other Tax returns required of the Target Companies. Any such Tax
returns that include periods beginning before the Closing Date shall be on
a
basis consistent with the last previous such Tax return filed in respect
of the
Target Companies. With respect to any Tax return required to be filed by
the
Purchaser for a taxable period beginning before the Closing Date, the Purchaser
shall deliver, at least 45 days prior to the due date for the filing of such
Tax
return (taking into account extensions) to the Seller a copy of such Tax
return.
The Seller shall have the right to review such Tax return prior to the filing
of
such Tax Return and to make comments thereon to the Purchaser.
(ii) All
comments given by the Seller to the Purchaser shall be accepted by the Purchaser
and incorporated in the Tax returns referred to in Section 8.3(a)(i) prior
to
filing with the Tax Authorities, provided that, if the Purchaser does not
accept
the Seller's comments on such Tax returns, the Seller shall not be responsible
to make any payments to the Purchaser pursuant to Article 8 or any other
provision hereof or otherwise to the extent such Tax return as filed by the
Purchaser, as compared to the Tax return incorporating all of the Seller’s
comments, reflects additional taxable income or a reduction in tax loss carry
forwards (Verlustvortrag) built up by the Target Companies which would otherwise
have been available to the Target Company. Neither the Purchaser nor any
of its
respective Affiliates shall file any amended Tax returns for or in respect
of
the Target Companies for periods beginning before the Closing without the
prior
written consent of the Seller, except in the case of a period commencing
on or
after January 1, 2003 where the Purchaser provides the Seller with protection
against any adverse consequences by reason of such amended return on terms
reasonably satisfactory to the Seller.
(b) The
Purchaser and the Seller agree that:
(i) subject
to Section 8.1(h) and to the following provisions of this Section 8.4, the
Purchaser shall control the conduct of the tax affairs of the Target Group
after
the Closing Date; and
(ii) subject
to Section 8.1(h), the Seller shall control the conduct of the tax affairs
of
the Target Group in relation to the current audit period (including the Current
Tax Audit) and subsequent audit periods prior to the Closing Date.
(c) For
all
periods for which the Seller controls conduct of the tax affairs of the Target
Group the Seller shall procure the following to the Purchaser in relation
to the
tax affairs of the Target Group:
(i) there
are
submitted to the Purchaser copies of all correspondence and other documents
to
be submitted to the relevant Tax Authority in relation to returns for such
periods in sufficient time before submission to the relevant Tax Authority
to
enable the Purchaser to comment on such correspondence or documents;
(ii) the
Seller shall deliver its comments on the prepared Tax returns to the Purchaser
so as to afford the Purchaser a reasonable opportunity for review prior to
submission to the Tax Authorities;
(iii) the
returns are filed with the relevant Tax Authority on a timely basis; and
(iv) the
Purchaser is kept fully informed about the status of any negotiations relating
to the tax affairs of the Target Group for such period.
The
Purchaser shall have the right to be present at meetings with the Tax
Authorities regarding tax audits for the Target Group concerning the periods
beginning before the Closing and to comment privately to the Seller (but
not
make any comments in front of the Tax Authorities) concerning any final
agreement with the Tax Authorities. With respect to any tax audit for any
period
commencing on or after January 1, 2003, where, in the opinion of the party
not
in control of the relevant audit (the “Passive
Party”),
failure to accept such comments would result in an adverse effect on the
Passive
Party or its Affiliates (or, if the Purchaser is the Passive Party, the Target
Group), all comments given to the party controlling such audit (the
"Controlling
Party")
by the
Passive Party shall be accepted by the Controlling Party and put forward
to the
Tax Authorities, and the Controlling Party shall use reasonable efforts to
procure the agreement of the Tax Authorities to such comments, provided that,
where the Seller is the Controlling Party, the acceptance of such comments
shall
not increase any liability the Seller would have had to the Purchaser but
for
the acceptance of such comments.
(d) For
all
tax audits of the periods beginning before the Closing for which the Purchaser
has the conduct, the Seller shall use reasonable efforts to cooperate with
and
give such information to the Purchaser as the Purchaser may reasonably require
in relation thereto.
| Section 8.5 |
Reduction
in Purchase Price
|
Any
payment by the Seller to the Purchaser pursuant to a Warranty Claim or a
claim
in respect of a covenant or agreement or an indemnity given under this Agreement
shall be treated as a reduction in the Purchase Price.
| Section 8.6 |
Entire
Agreement
|
This
Agreement, the Confidentiality Agreement and the Share Transfer Agreements
merge
all previous negotiations and agreements between the parties hereto, either
oral
or written, and constitute the entire agreement and understanding between
the
parties with respect to the subject matter hereof and thereof.
| Section 8.7 |
Amendments;
Waivers
|
No
amendment, modification, or waiver of any provision of this Agreement shall
be
valid except by an agreement in writing executed by the parties hereto. Except
as otherwise expressly set forth herein, no failure or delay by any party
hereto
in exercising any right, power or privilege hereunder (and no course of dealing
between or among any of the parties) shall operate as a waiver of any such
right, power or privilege. No waiver of any default on any one occasion shall
constitute a waiver of any subsequent or other default. No single or partial
exercise of any such right, power or privilege shall preclude the further
or
full exercise thereof.
| Section 8.8 |
Severability
|
If
any
provision of this Agreement or the application thereof to any Person or
circumstance shall be invalid or unenforceable to any extent, the remainder
of
this Agreement and the application of such provision to other Persons or
circumstances shall not be affected thereby and shall be enforced to the
greatest extent permitted by Law, but only as long as the continued validity,
legality and enforceability of such provision or application does not materially
(a) alter the terms of this Agreement, (b) diminish the benefits of this
Agreement or (c) increase the burdens of this Agreement, for any
Person.
| Section 8.9 |
Assignment
|
The
rights and obligations of the parties hereunder shall be binding upon and
inure
to the benefit of the parties’ successors and permitted assigns. No party may,
without the prior written consent of the other parties, assign, grant any
security interest over, hold on trust or otherwise transfer, in whole or
in
part, any of its rights and obligations under this Agreement, provided that
the
benefit of any rights hereunder may be assigned or transferred in whole or
in
part by the Purchaser for the purpose of providing security to a financial
institution (or an agent or trustee therefor) providing financing or other
facilities to the Purchaser or any Affiliate of Purchaser in connection with
the
Transactions. For the avoidance of doubt, such permitted assignment or transfer
will not increase any party's liability, reduce any party's rights or otherwise
prejudice any party).
| Section 8.10 |
Third
Parties
|
Nothing
herein (save as expressly set forth herein) is intended to or shall confer
on
any Person other than the parties hereto any rights, remedies, obligations
or
liabilities under or by reason of this Agreement.
| Section 8.11 |
Notices
|
All
notices and other communications required or permitted to be given hereunder
shall be in writing and shall be deemed to have been duly given if delivered
personally or sent by fax, same day or overnight courier or electronic mail
(provided that communications sent by electronic mail are concurrently sent
by
fax or same day or overnight courier) in accordance with this Section
8.11
to the
following addresses:
If
to the
Purchaser:
T-Mobile Global Holding Nr. 3 GmbH
Landgrabenweg
151
53227
Bonn
Germany
Attention:
Xxxxxx Xxxxxxxxx
Fax: x00 000 000 000 00
Email: Xxxxxx.Xxxxxxxxx@x-xxxxxx.xxx
with
a
required copy (which shall not constitute notice) to:
Xxxxxxxx Chance LLP
00 Xxxxx Xxxx Xxxxxx
Xxxxxx X00 0XX
Xxxxxx Xxxxxxx
Attention: Xxxxxxx Xxxxxx
Fax: x00
00 0000 0000
Email:
xxxxxxx.xxxxxx@xxxxxxxxxxxxxx.xxx
If
to the
Seller:
Western
Wireless International Austria Corporation
0000
000xx
Xxxxxx, X.X.
Xxxxx
000
Xxxxxxxx,
Xxxxxxxxxx 00000
Xxxxxx
Xxxxxx
of America
Attention:
Xxxxxxx X. Xxxxxxx
Fax:
x0 (000)
000-0000
Email: xxxx.xxxxxxx@xxxxxxxxx.xxx
with
a
required copy (which shall not constitute notice) to:
ALLTEL
Corporation
Xxx
Xxxxxx
Xxxxx
Xxxxxx
Xxxx,
XX
00000
Attention:
Xxxxxxx X Xxxxxx
Fax:
x0 (000)
000-0000
Email:
xxxxxxx.x.xxxxxx@xxxxxx.xxx
and
Xxxxxxxx
Xxxxxx Xxxxxx & Xxxxxxx LLP
0000
Xxxxxxxx, 00xx
Xxxxx
Xxx
Xxxx, Xxx
Xxxx 00000
Xxxxxx
Xxxxxx
of America
Attention: Xxxxx X. Xxxxxxx
Fax:
x0 (000)
000-0000
Email:
xxxxxxxx@xxxxx.xxx
The
burden of proving notice when notice is transmitted by fax or electronic
mail
shall be the responsibility of the party providing such notice.
| Section 8.12 |
Expenses
|
Save
as
otherwise provided in this Agreement, each party shall bear its own costs,
including the fees and expenses of any attorney retained by it, incurred
in
connection with the preparation of this Agreement and the consummation of
the
Transactions.
| Section 8.13 |
Dispute
Resolution
|
(a) In
the
event of any dispute, controversy or claim arising out of or in connection
with
this Agreement (including any Schedule or Exhibit hereto) or the breach,
termination or validity of this Agreement, the parties shall use all reasonable
efforts to resolve the matter on an amicable basis. If one party serves formal
written notice on the other party or parties that a material dispute,
controversy or claim of such a description has arisen and the parties are
unable
to resolve the dispute within a period of thirty (30) days from the service
of
such notice, then the dispute, controversy or claim shall be referred to
the
respective senior executives of the Seller and the Purchaser. No recourse
to
arbitration by one party against the other party or parties under this Agreement
shall take place unless and until such procedure has been followed.
(b) If
the
senior executives of the Purchaser and the Seller shall have been unable
to
resolve any dispute, controversy or claim referred to them under Section
8.13(a)
within a period of ten (10) days from referral to the senior executives,
that
dispute, controversy or claim shall be referred to and finally settled by
arbitration under and in accordance with the Rules of Arbitration of the
International Chamber of Commerce by three arbitrators appointed in accordance
with those rules. The place of arbitration shall be Zurich, Switzerland.
The
arbitration proceedings shall be conducted, and the award shall be rendered,
in
the English language.
(c) The
parties hereby waive any rights of application and appeal to any court or
tribunal of competent jurisdiction (including without limitation the courts
of
Germany, Austria, Switzerland and the United States) to the fullest extent
permitted by law in connection with any question of law arising in the course
of
the arbitration or with respect to any award made except for actions relating
to
enforcement of the arbitration agreement or an arbitral award and except
for
actions seeking interim or other provisional relief in aid of arbitration
in any
court of competent jurisdiction.
(d) Without
prejudice to Section 8.13(b) above, the parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were
not
performed in accordance with their specific terms or were otherwise breached.
It
is accordingly agreed that the parties shall be entitled to an injunction
or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement, this being in addition to any
other
remedy to which they are entitled at law or in equity.
| Section 8.14 |
Governing
Law
|
This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of New York without application of principles of conflicts
of
law.
| Section 8.15 |
Interpretation
|
(a) As
both
parties have participated in the drafting of this Agreement, any ambiguity
shall
not be construed against either party as the drafter. Unless the context
of this
Agreement clearly requires otherwise, (a) “or” has the inclusive meaning
frequently identified with the phrase “and/or,” (b) “including” has the
inclusive meaning frequently identified with the phrase “including, but not
limited to,” (c) references to “hereof,”“hereunder” or “herein” or words of
similar import relate to this Agreement, (d) when a reference is made in
this
Agreement to an Article or a Section, such reference shall be to an Article
or a
Section of this Agreement unless otherwise indicated, and (e) the terms defined
hereunder shall have the meanings therein specified for all purposes of this
Agreement, applicable to both the singular and plural forms of any of the
terms
defined herein. The section headings contained in this Agreement are solely
for
the purpose of reference, are not part of the agreement of the parties and
shall
not in any way affect the meaning or interpretation of this Agreement. All
terms
and words used in this Agreement, regardless of the number and gender in
which
they are used, shall be deemed and construed to include any other number
and any
other gender as the context of this Agreement requires.
(b) Where
any
statement in Article 3 of this Agreement is qualified by the expressions
"to the
Seller's knowledge" or "so far as the Seller is aware" or any similar
expression, that statement shall be deemed to be made by the Seller having
made
reasonable enquiries in respect of that statement of Xxxxxxx Xxxxxxx (the
chief
operating officer), Xxxxxxxxx Xxxxx (the chief financial officer) and Xxxxxxxx
Xxxxx (the general counsel) of the Company.
(c) Notwithstanding
anything to the contrary contained in this Agreement, no representation,
warranty, covenant or agreement shall be violated, breached, or fail to be
true,
accurate or not misleading, nor shall any condition be deemed not fulfilled
or
satisfied by reason of any facts, events, changes, effects or developments
(i)
(A) generally affecting the wireless voice and data or wireline industries
in
Austria or the European Union, including regulatory and political developments,
and including the state act on taxes for not sharing wireless towers enacted
by
the government of Lower Austria (Niederosterreich) and any similar enactment
by
any Governmental Entity, (B) generally affecting the economy or financial
markets in Austria or the European Union, or (C) in national or international
political or social conditions including the occurrence of any military or
terrorist attack upon or within Austria or the European Union, or (ii) resulting
from the public announcement of this Agreement or the Transactions, and for
the
avoidance of doubt no tax or liability resulting from any of the above shall
be
taken into account in determining Working Capital.
| Section 8.16 |
Release
|
(a) As
of the
Closing Date, the Purchaser shall, and shall cause the Target Group to,
voluntarily and unconditionally release and forever discharge the Seller
(and
each of its directors, officers and employees) from any and all actions,
causes
of action, suits, debts, claims and demands of the Target Group or the Purchaser
related to the Target Group or their or their businesses or their predecessors
or such predecessor's businesses (except for rights or obligations arising
under
this Agreement and the documents referred to herein to be entered into in
connection with the Transactions) that arise out of acts, events, conditions
or
omissions occurring or existing from the time each Target Company (or any
predecessor of a Target Company) was formed or otherwise organized to and
including, with respect to each Target Company, the Closing Date.
(b) As
of the
Closing Date, the Seller shall voluntarily and unconditionally release and
forever discharge the Purchaser and each Target Company (and each of their
directors, officers and employees) from any and all actions, causes of action,
suits, debts, claims and demands of the Seller related to each Target Company
or
their businesses or their predecessors or such predecessor's businesses (except
for rights or obligations arising under this Agreement and the documents
referred to herein to be entered into in connection with the Transactions)
that
arise out of acts, events, conditions or omissions occurring or existing
from
the time each Target Company (or any predecessor of a Target Company) was
formed
or otherwise organized to and including, with respect to each Target Company,
the Closing Date.
| Section 8.17 |
Counterparts
|
This
Agreement may be executed in one or more counterparts, each of which when
so
executed shall be an original, but all of which together shall constitute
one
agreement. Facsimile signatures shall be deemed original
signatures.
IN
WITNESS WHEREOF, the Seller and the First Purchaser have executed this Agreement
as of the date written below and at the time indicated below.
T-MOBILE
GLOBAL HOLDING NR.3 GMBH
By
/s/
Xxxxxxx Xxxx
Name:
Xxxxxxx Xxxx
Title:
Vice President
Time
of
execution: 6:15 am
Date
of
execution: August 10, 2005
WESTERN
WIRELESS INTERNATIONAL AUSTRIA CORPORATION
By
/s/
Xxxxx Xxxxx
Name:
Xxxxx Xxxxx
Title:
Vice President
Time
of
execution: 6:15 am
Date
of
execution: August 10, 2005
IN
WITNESS WHEREOF, the Seller and the Second Purchaser have executed this
Agreement as of the date written below, and at the time indicated below (being
not less than one hour after the execution of this Agreement by the Seller
and
the First Purchaser).
T-MOBILE
AUSTRIA GMBH
By
/s/
Xxxxx Xxxxxxxxxxx
Name:
Xxxxx Xxxxxxxxxxx
Title:
Executive Vice President
Time
of
execution: 7:20 am
Date
of
execution: August 10, 2005
WESTERN
WIRELESS INTERNATIONAL AUSTRIA CORPORATION
By
/s/
Xxxxx Xxxxx
Name:
Xxxxx Xxxxx
Title:
Vice President
Time
of
execution: 7:19 am
Date
of
execution: August 10, 2005
