Exhibit 4.20
(Translation)
AGREEMENT MADE BY AND AMONG XX. XXXX XXXXX XXXXXXXX XXXXX ("JREA"); GRUPO
IUSACELL, S.A. DE C.V. (FORMERLY, NUEVO GRUPO IUSACELL, S.A. DE C.V.), AND GRUPO
IUSACELL CELULAR, S.A. DE C.V. (FORMERLY, GRUPO IUSACELL, S.A. DE C.V.)
(JOINTLY, "IUSACELL"); AND IUSACELL'S SUBSIDIARIES, NAMELY, IUSACELL PCS, S.A.
DE C.V., IUSATEL, S.A. DE C.V., IUSATELECOMUNICACIONES, S.A. DE C.V.,
INFOTELECOM, S.A. DE C.V., AND PUNTO-A-PUNTO IUSACELL, S.A. DE C.V.
(COLLECTIVELY, "IUSACELL SUBSIDIARIES"), PURSUANT TO THE FOLLOWING BACKGROUND,
REPRESENTATIONS AND CLAUSES:
B A C K G R O U N D :
1. On November 1st, 1998, JREA and IUSACELL entered into a Joint Venture
Formation Agreement (the "Joint Venture Agreement") pursuant to which JREA would
make capital contributions to the IUSACELL SUBSIDIARIES. Such capital
contributions would be effected by subscribing to and paying for the following
shares of stock (the "Shares") of the IUSACELL SUBSIDIARIES:
A) IUSACELL PCS, S.A. DE C.V.
41,581,658 shares
B) IUSATEL, S.A. DE C.V.
235,720 shares
C) IUSATELECOMUNICACIONES, S.A. DE C.V.
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8,063,804 shares
D) INFOTELECOM, S.A. DE C.V.
2,002 shares
E) PUNTO-A-PUNTO IUSACELL, S.A. DE C.V.
2,550 shares
A copy of the Joint Venture Agreement is hereto attached (Exhibit A).
2. Under the Joint Venture Agreement, IUSACELL and JREA granted each other
an option to sell and buy the IUSACELL SUBSIDIARIES Shares.
3. On July 29, 2003, Movil Access, S.A. de C.V., acquired in a public
offering 74.6317% of the shares of stock of Grupo Iusacell, S.A. de C.V.
4. On October 3, 2003, JREA served a notice on IUSACELL to advise it that
he was exercising his option to sell the IUSACELL SUBSIDIARIES Shares under the
Joint Venture Agreement. A copy of such notice is hereto attached (Exhibit B).
5. The parties have negotiated the Shares transfer and payment mechanism
and have reached the covenants set forth in the Clauses of this Agreement.
R E P R E S E N T A T I O N S :
The parties represent that they are legally qualified to bind themselves
in the terms of the following
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C L A U S E S :
FIRST. The IUSACELL SUBSIDIARIES will hold such Shareholders' Meetings and
take such action as may be necessary in order to redeem, by means of capital
stock reductions, or otherwise transfer all of the Shares owned by JREA in each
of the IUSACELL SUBSIDIARIES.
SECOND. The full amount of the capital reimbursements resulting from the
redemption of the IUSACELL SUBSIDIARIES Shares to be paid to JREA must be such
that JREA receive US$11,193,883.50 (Eleven Million One Hundred and Ninety Three
Thousand Eight Hundred and Eighty Three Dollars 50/100, currency of the United
States of America), free of any income or any other tax withholding, pursuant to
Section 5.5(e) of the Joint Venture Agreement.
THIRD. Pursuant to the preceding Clause, Iusacell PCS, S.A. de C.V., will
pay JREA, on account of itself and/of the other IUSACELL SUBSIDIARIES, the full
amount of the capital reimbursements mentioned above, within a term not to
exceed 2 (two) years following October 3, 2003. The reimbursement will be paid
to JREA in partial weekly installments which will be either deposited in or
transferred to the account indicated for such purpose by JREA, at the rate of at
least US$100,000 (One Hundred Thousand Dollars No/100 currency of the United
States of America) from
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November 3, 2003, onward, which is the date on which the Shareholders' Meeting
of Iusacell PCS, S.A. de C.V., the first of the IUSACELL SUBSIDIARIES, that will
approve the respective capital stock reductions.
FOURTH. Grupo Iusacell, S.A. de C.V., and Grupo Iusacell Celular, S.A. de
C.V., agree to be jointly and severally liable to JREA for the payment
obligations assumed by Iusacell PCS, S.A. de C.V., or any of the other IUSACELL
SUBSIDIARIES hereunder. Therefore, Grupo Iusacell, S.A. de C.V., and Grupo
Iusacell Celular, S.A. de C.V., are liable to JREA under Articles 1988 and 1989
of the Federal Civil Code [CODIGO CIVIL FEDERAL].
Grupo Iusacell, S. A. de C. V., and Grupo Iusacell Celular, S.A. de C.V.,
further jointly undertake to post a civil bond [FIANZA CIVIL] in JREA's favor in
order to guarantee fulfillment of the payment obligations assumed by Iusacell
PCS, S.A. de C.V., and the other IUSACELL SUBSIDIARIES hereunder. Such bond will
be posted directly by Grupo Iusacell, S.A. de C.V., and Grupo Iusacell Celular,
S.A. de C.V., but it need not be issued by a bonding company, for which purpose
the parties must execute the respective contract within ten (10) calendar days
following the execution date hereof. Grupo Iusacell, S.A. de C.V., and Grupo
Iusacell Celular, S.A. de C.V., hereby undertake to
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waive the benefits of order and excussio granted by Articles 2814 and 2815 of
the Federal Civil Code.
FIFTH. The unpaid balance of the full amount of the capital reimbursements
to which reference is made in Clause Second hereof will bear interest at the
rate of 14% (fourteen per cent) per annum from the date hereof, payable by
Iusacell PCS, S.A. de C.V., or any of the other IUSACELL SUBSIDIARIES or else by
IUSACELL to JREA on each anniversary date of the term mentioned in Clause Third
hereof, until payment in full of such amount.
SIXTH. Within a term not to exceed thirty (30) calendar days, all of the
Shares which are the subject matter of this transaction will be conveyed to a
trust created with a Mexican credit institution, whose main purpose will be,
among others:
(a) To guarantee payment to JREA of the capital reimbursement resulting
from the redemption of the IUSACELL SUBSIDIARIES Shares.
(b) To guarantee the return of the Shares to the IUSACELL SUBSIDIARIES
after full payment of the capital reimbursement.
SEVENTH. From the creation date of the trust mentioned in Clause Sixth
hereof onward, the voting rights vested by the IUSACELL SUBSIDIARIES Shares
conveyed in trust will be exercised at all times by the trust company as
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directed by IUSACELL. In the event that Iusacell PCS, S.A. de C.V., any of the
other IUSACELL SUBSIDIARIES or IUSACELL fails to pay 4 (four) or more of the
weekly installments to which reference is made in Clause Third hereof, the right
to direct the trustee as to how the Shares will be voted will be exercised only
by JREA.
In the event that (a) the IUSACELL SUBSIDIARIES' Shareholders' Meetings to
approve the capital reimbursements mentioned throughout this Agreement are not
held, or else that the transfer of the IUSACELL SUBSIDIARIES Shares is not
completed on or before October 3, 2005, or (b) Iusacell PCS, S.A. de C.V., any
of the other IUSACELL SUBSIDIARIES or IUSACELL does not pay JREA the amount of
the capital reimbursements resulting from the redemption of the IUSACELL
SUBSIDIARIES Shares plus interest, as and when agreed upon hereunder, namely,
during a term of 4 (four) or more weeks (consistent with the weekly installment
system established in Clause Third hereof), JREA may retain and take possession
of any amounts already paid to him, as liquidated damages [XXXX CONVENCIONAL]
for the default of Iusacell PCS, S.A. de C.V., any of the other IUSACELL
SUBSIDIARIES or IUSACELL. Furthermore, JREA may demand Iusacell PCS, S.A. de
C.V., any of the other IUSACELL SUBSIDIARIES or IUSACELL strict fulfillment of
their obligations under the Joint Venture
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Agreement and this Agreement, as provided in Article 1949 of the Federal Civil
Code.
EIGHTH. In view of the preceding Clauses, the parties will enter into such
contracts, agreements and covenants and hold such Shareholders' Meetings and
take such action as may be necessary in order to effect the capital
reimbursements resulting from the redemption of the IUSACELL SUBSIDIARIES
Shares, in accordance with the system agreed upon by the parties in order to
obtain the maximum tax benefit pursuant to the applicable statutes, regulations
and circular letters.
NINTH. The parties will make their best efforts in order to agree upon, as
soon as possible and with the aid of their tax advisors and legal counsel, the
best structure to carry out and formalize the transaction which is the subject
matter of this Agreement within no more than thirty (30) calendar days.
This Agreement is signed in the City of Mexico, Federal District, on this
3rd day of November, 2003.
Grupo Iusacell Celular, S.A. de C.V.
Grupo Iusacell, S.A. de C.V.
By:
(An illegible signature) (An illegible signature)
Xxxx Xxxxx Xxxxxxxx Xxxxx Xxxxx Xxxxxxx Longoria
Attorney in fact
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(An illegible signature)
Xxxx Xxxxxxx Xxxxxxx Elcoro
Attorney in fact
Iusacell PCS, S.A. de C.V.
Iusatel, S.A. de C.V.
Iusatelecomunicaciones, S.A. de C.V.
Punto-a-Punto Iusacell, S.A. de C.V.
Infotelecom, S.A. de C.V.
By:
(An illegible signature)
Xxxxx Xxxxxxx Xxxxxxxx
Attorney in fact
(An illegible signature)
Xxxx Xxxxxxx Xxxxxxx Elcoro
Attorney in fact
JNNR. MMG. IUSACELL-XXXXXXXX XXXXX AGREEMENT/V
