STOCK PURCHASE AGREEMENT
BY AND AMONG
GTE VENEZUELA S.A.R.L.
AND
VERIZON INTERNATIONAL HOLDINGS INC.,
AS THE SELLERS,
AND
OARSMAN INVESTMENTS B.V.,
AS THE BUYER
DATED AS OF APRIL 2, 2006
TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS; INTERPRETATION........................................1
Section 1.1 Certain Defined Terms.........................................1
Section 1.2 Table of Additional Definitions...............................8
ARTICLE II PURCHASE AND SALE.................................................9
Section 2.1 Purchase and Sale of the Shares...............................9
Section 2.2 Closing.......................................................9
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLERS...................10
Section 3.1 Organization and Qualification...............................10
Section 3.2 Authority....................................................10
Section 3.3 Shares and Capital Stock.....................................11
Section 3.4 Operations; No Assets or Liabilities.........................12
Section 3.5 Taxes........................................................12
Section 3.6 Litigation...................................................12
Section 3.7 Contracts....................................................12
Section 3.8 Foreign Investment Registration and Foreign Exchange
Approval.....................................................13
Section 3.9 Compliance with Law..........................................13
Section 3.10 Employee Matters.............................................14
Section 3.11 Tax Treaty...................................................14
Section 3.12 Brokers......................................................14
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE BUYER......................14
Section 4.1 Organization.................................................14
Section 4.2 Authority....................................................14
Section 4.3 Sufficiency of Funds.........................................15
Section 4.4 Litigation...................................................15
Section 4.5 Beneficial Ownership of Shares...............................15
Section 4.6 Brokers......................................................15
ARTICLE V COVENANTS.........................................................16
Section 5.1 Confidentiality..............................................16
Section 5.2 Public Announcements.........................................16
Section 5.3 Consents and Approvals.......................................16
Section 5.4 Certain Commitments of Sellers...............................19
Section 5.5 Resignations.................................................21
Section 5.6 No Solicitation of Offers....................................21
Section 5.7 Seller's Broker's Fees.......................................22
Section 5.8 Buyer's Broker's Fees........................................22
Section 5.9 Tax Matters..................................................22
Section 5.10 Directors and Officers.......................................24
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Section 5.11 Termination of Affiliate Contracts...........................25
Section 5.12 Non-Solicitation of Employees; Severance.....................25
Section 5.13 Standstill...................................................27
Section 5.14 Sellers' Post-Closing Confidentiality Obligation.............27
Section 5.15 Access to Information........................................27
Section 5.16 Notices of Certain Events....................................28
Section 5.17 Restructuring................................................28
ARTICLE VI POST-CLOSING OFFERS..............................................29
Section 6.1 Commencement of Offers.......................................29
Section 6.2 Terms of the Offers..........................................29
ARTICLE VII CONDITIONS TO CLOSING...........................................30
Section 7.1 General......................................................30
Section 7.2 Conditions to Obligations of Both Parties....................30
Section 7.3 Conditions to Obligations of the Buyer.......................30
Section 7.4 Conditions to Obligations of the Sellers.....................34
Section 7.5 Pension Liabilities and CT Transaction.......................34
ARTICLE VIII INDEMNIFICATION................................................35
Section 8.1 Survival.....................................................35
Section 8.2 Indemnification by the Sellers...............................35
Section 8.3 Indemnification by the Buyer.................................36
Section 8.4 [Intentionally Omitted]......................................36
Section 8.5 Procedures...................................................36
Section 8.6 Limits on Indemnification....................................38
Section 8.7 Special Indemnity............................................38
Section 8.8 Exclusivity..................................................38
Section 8.9 Disclaimer of Implied Warranties.............................39
Section 8.10 Obligations Joint and Several................................39
ARTICLE IX GENERAL PROVISIONS...............................................39
Section 9.1 Fees and Expenses............................................39
Section 9.2 Amendment and Modification...................................39
Section 9.3 Waiver.......................................................39
Section 9.4 Notices......................................................40
Section 9.5 [Intentionally Omitted]......................................41
Section 9.6 Entire Agreement.............................................41
Section 9.7 No Third-Party Beneficiaries.................................41
Section 9.8 Governing Law................................................42
Section 9.9 Submission to Jurisdiction; Service of Process...............42
Section 9.10 Specific Performance.........................................42
Section 9.11 Waiver of Immunity...........................................43
Section 9.12 [Intentionally Omitted]......................................43
Section 9.13 Personal Liability...........................................43
Section 9.14 Assignment; Successors.......................................43
Section 9.15 Currency.....................................................43
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Section 9.16 Severability.................................................43
Section 9.17 Counterparts.................................................44
Section 9.18 Facsimile Signature..........................................44
Section 9.19 Termination..................................................44
Section 9.20 Joinder......................................................45
LIST OF SCHEDULES, ANNEXES AND EXHIBITS
Schedule 1.1 - Buyer's Knowledge
Schedule 3.2(b) - Seller Consents
Schedule 3.3(c) - Company Shares
Schedule 3.5 - Taxes
Schedule 3.7(a) - Contracts
Schedule 3.7(b) - Related Party Contracts
Schedule 4.2(b) - Buyer Consents
Schedule 5.11(b) - Contracts with Sellers' Affiliates
Schedule 7.3(k) - Certain Contracts
Exhibit A - Form of Software License Agreement
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of April 2, 2006 (this "Agreement"),
between GTE Venezuela S.a.r.l., a societe a responsabilite limitee organized
under the laws of the Grand Duchy of Luxembourg ("Lux Seller"), Verizon
International Holdings Inc., a Delaware corporation ("Del Seller" and, together
with Lux Seller, the "Sellers"), and Oarsman Investments B.V., a besloten
vennootschap met beperkte aansprakelijkheid organized under the laws of the
Netherlands (the "Buyer").
RECITALS
A. Lux Seller owns 99.9% of the issued and outstanding capital stock (the
"Lux Seller Shares") of GTE Venholdings B.V., a private company with limited
liability (besloten vennootschap met beperkte aansprakelijkheid) incorporated
under the laws of the Netherlands ("Holdings").
B. Del Seller owns 0.1% of the issued and outstanding capital stock (the
"Del Seller Shares" and, together with the Lux Seller Shares, the "Shares") of
Holdings.
C. Holdings owns 196,401,427 Class A Shares and American Depositary Shares
representing an aggregate of 28,009,177 Class D Shares of Compania Anonima
Nacional Telefonos de Venezuela (CANTV), a Venezuelan corporation (the
"Company"). The Held Company Shares (as defined below) currently represent in
the aggregate approximately 28.51% of the issued and outstanding equity share
capital of the Company.
D. The Sellers wish to sell the Shares to the Buyer, and the Buyer wishes
to purchase the Shares from the Sellers, in each case upon the terms and subject
to the conditions set forth herein.
In consideration of the foregoing and the mutual covenants and agreements
herein contained, and intending to be legally bound hereby, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS; INTERPRETATION
Section 1.1.Certain Defined Terms
For purposes of this Agreement:
"ADS" or "American Depositary Share" means each American Depositary
Share issued pursuant to the Amended and Restated Deposit Agreement, dated
September 10, 2000, between the Company, The Bank of New York, as Depositary,
and the holders from time to time of American Depositary Receipts of the Company
issued thereunder, each of which represents seven (7) Class D Shares.
"Affiliate", with respect to any specified Person, means any other
Person (other than the Company or any of its Subsidiaries) that directly, or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with, such specified Person. For purposes of this
Agreement, (i) Sellers' Parent shall be deemed to be an Affiliate of each of the
Sellers and Holdings and (ii) each Buyer Parent shall be deemed to be an
Affiliate of the Buyer.
"Beneficially Own" with respect to any security means having
"beneficial ownership" of such securities (as determined pursuant to Rule 13d-3
under the Exchange Act, as in effect on the date hereof); provided, however,
that a Person will be deemed to Beneficially Own (and have beneficial ownership
of) all securities that such Person has the right to acquire, whether such right
is exercisable immediately or with the passage of time or the satisfaction of
conditions. The terms "Beneficial Ownership" and "Beneficial Owner" have
correlative meanings.
"Bolivar" means the lawful currency of Venezuela.
"Business Day" means any day that is not a Saturday, a Sunday or
other day on which banks are required or authorized by Law to be closed in New
York, New York, United States of America, Mexico City, Mexico or Caracas,
Venezuela.
"Buyer Parents" means Telefonos de Mexico, S.A. de C.V., a Mexican
sociedad anonima de capital variable, and America Movil, S.A. de C.V., a Mexican
sociedad anonima de capital variable.
"Buyer's Knowledge" means the actual (but not constructive or
imputed) knowledge of the individuals listed on Schedule 1.1, as of the date
hereof and as of the Closing Date, as it may be applicable, without any
implication of verification or investigation concerning such knowledge.
"CADIVI" means Comision de Administracion de Divisas of Venezuela.
"Capital Markets Law" means Ley xx Xxxxxxx de Capitales of
Venezuela.
"Caracas Stock Exchange" is the securities exchange upon which the
Class D Shares are listed and publicly traded.
"Class A Shares" means the Company's Class A common shares.
"Class D Shares" means the Company's Class D common shares.
"CNV" means the Comision Nacional de Valores of Venezuela.
"CNV Filings" means the filings made or required to be made by the
Company with the CNV since January 1, 2004, pursuant to the Capital Markets Law.
"CNV Tender Offer Regulations" means the Public Tender Offer Rules
on the Acquisition, Exchange and Takeover of Companies that make Public
Offerings of Shares and
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Other Interests Thereon adopted by the CNV and published on September 19, 2000
in the Bolivarian Republic of Venezuela Official Gazette (No. 37.039).
"Commencement Date" means the date on which the Venezuelan Offer and
the U.S. Offer are commenced in accordance with Section 6.1.
"Company Shares" means all issued and outstanding shares of stock of
the Company, including the Class A Shares, the Class D Shares and all such
shares underlying the ADSs.
"CONATEL" means the Comision Nacional de Telecomunicaciones of
Venezuela.
"Concession" means the Contrato de Concesion dated October 14, 1991,
and amended in November 1991, between the Company and Venezuela.
"Consent" means any consent, waiver, approval, order or
authorization of, or registration, declaration or filing with or notice to, any
Person, including any required passage of time or waiting period after any such
registration, declaration or filing.
"control", including the terms "controlled by" and "under common
control with", means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, as trustee or executor, as
general partner or managing member, by contract or otherwise, including the
ownership, directly or indirectly, of securities having the power to elect a
majority of the board of directors or similar body governing the affairs of such
Person.
"CT Transaction" means any and all obligations, liabilities,
penalties or losses of, or damages to, or any other effect on, the Company or
its Subsidiaries arising directly from or in connection with the Company's
participation in a bidding process for, and any acquisition of, Colombia
Telecomunicaciones S.A., including (i) the posting by the Company or any
Subsidiary of any security, collateral or guarantee related to bids made by the
Company or its Subsidiaries for the acquisition of Colombia Telecomunicaciones
S.A. and (ii) the funding by the Company or its Subsidiaries of the acquisition
of all or part of Colombia Telecomunicaciones S.A. (whether by stock purchase,
merger, asset purchase, lease, recapitalization of Colombia Telecomunicaciones
S.A.or otherwise).
"Encumbrance" means any charge, claim, mortgage, lien, option,
pledge, security interest, hypothecation, collateral, security trust
(fideicomiso de garantia), assignment, voting agreement (other than as may be
provided by this Agreement), right of first offer or any or other restriction of
any kind, including any that may arise under any contract or agreement, but not
including any Consent required to be obtained from any Governmental Authority or
any other restriction on transfer imposed by any Securities Laws.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
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"Expiration Date" means the date that the Venezuelan Offer and/or
the U.S. Offer, as the case may be, expires.
"Governmental Authority" means any federal, national, supranational,
state, provincial, departmental, local or similar government, governmental,
regulatory or administrative authority, branch, agency or commission or any
court, tribunal or judicial body.
"Governmental Order" means any order, writ, judgment, injunction,
decree, stipulation, determination, award, approval, consent, authorization or
agreement entered by or with any Governmental Authority.
"Law" means any statute, law, ordinance, regulation, rule, code,
executive order, injunction, judgment, decree or Governmental Order of any
Governmental Authority.
"Material Adverse Effect" means (a) with respect to the Company, any
event, change, circumstance, effect, development or state of facts that,
individually or together with any other event, change, circumstance, effect,
development or state of facts, is, or is reasonably likely to become, materially
adverse to the business, financial condition or results of operations of the
Company and its Subsidiaries, taken as a whole; (b) with respect to Holdings,
any event, change, circumstance, effect, development or state of facts that,
individually or together with any other event, change, circumstance, effect,
development or state of facts, is, or is reasonably likely to become, materially
adverse to the business, financial condition or results of operations of
Holdings; (c) with respect to the Sellers, any event, change, circumstance,
effect or state of facts that, individually or together with any other event,
change, circumstance, effect, development or state of facts, is materially
adverse to the ability of either of the Sellers or the Sellers' Parent to
perform its obligations under this Agreement or to consummate without undue
delay the transactions contemplated hereby; and (d) with respect to the Buyer or
the Buyer Parents, any event, change, circumstance, effect or state of facts
that, individually or together with any other event, change, circumstance,
effect, development or state of facts, is materially adverse to the ability of
the Buyer (assuming compliance by Buyer Parents with their obligations under
Section 9.20) or the Buyer Parents to perform their obligations under this
Agreement or to consummate without undue delay the transactions contemplated
hereby, including the indirect purchase by the Buyer Parents of the Held Company
Shares and the Other Company Shares; provided, however, that "Material Adverse
Effect" shall not include the effect of any event, change, circumstance,
development or state of facts (x) directly attributable to the announcement,
implementation, or closing of this Agreement and the transactions contemplated
hereby, including the Offers (but excluding any events initiated by the Company
or its Subsidiaries), or (y) arising out of or attributable to (A) with respect
to Holdings or the Company, (1) in the case of the wireless business, the
telecommunications industry in Venezuela generally, and in the case of the
wireline business, the telecommunications industry in Latin America generally,
in either case provided that such event, change, circumstance, development or
state of facts does not affect the Company and its Subsidiaries or Holdings, as
the case may be, in a materially disproportionate manner when compared to the
effect of such event, change, circumstance, development or state of facts on
other Persons engaged in, respectively, the telecommunications industry in
Venezuela or Latin America, as the case may be, (2) general economic or
political conditions (including those affecting the securities markets), (3)
changes in applicable accounting rules, or (4) any change of control provision
in any contract or agreement, including any debt instrument, of the Company
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or any Subsidiary of the Company, or (B) with respect to Holdings, any claim of
additional Tax liabilities by a Governmental Authority pertaining to pre-closing
periods with respect to which the Buyer is fully indemnified pursuant to
Sections 8.2 or 8.7.
"Netherlands" means the Kingdom of the Netherlands.
"New York Stock Exchange" means New York Stock Exchange, Inc., the
stock exchange on which the ADSs are listed and traded.
"Offers" means the concurrent tender offers in Venezuela and the
United States to acquire the Other Company Shares, including Class D Shares
represented by ADSs, to be undertaken by Buyer after the Closing pursuant to
Section 6.1.
"Other Company Shares" means Company Shares other than the Held
Company Shares.
"Pension Liability" means any amount payable or reasonably likely to
be payable by, or asserted against, the Company or its Subsidiaries in respect
of or pursuant to a ruling, order or decision by the Social Chamber of the
Supreme Court of Venezuela or any other court or arbitral body of competent
jurisdiction, or any expert report or other action or document issued pursuant
to such ruling, order or decision, relating to or arising out of any claim
(whether now final, pending or hereafter instituted) against the Company or its
Subsidiaries filed by Federacion Nacional de Jubilados y Pensionados de
Telefonos de Venezuela, Asociacion de Jubilados y Pensionados de Telefonos de
Venezuela or any other similar association, federation, union or organization or
employees or retirees in connection with pension payments, adjustments on the
basis of salary increases, salaries received, bonuses (including without
limitation Xxxx Complementario de Proteccion Economica and Plan de Auxilio
Temporal y Solidario), results of collective bargaining, arbitration awards,
minimum salary requirements, social security rights or entitlements,
constitutional mandates or similar bases.
"Person" means an individual, corporation, partnership, limited
liability company, limited liability partnership, syndicate, person, trust,
association, organization or other entity, including any Governmental Authority,
and including any successor, by merger or otherwise, of any of the foregoing.
"Pro-Competencia" means Superintendencia para la Promocion y
Proteccion de la Libre Competencia, the Venezuelan antitrust authority.
"Required Antitrust Approvals" means, to the extent required by Law,
the favorable opinion(s) of Pro-Competencia for the sale by the Sellers and the
purchase by the Buyer of the Shares, and the purchase of the Other Company
Shares by the Buyer pursuant to the Offers.
"Required Regulatory Approvals" means the Required Antitrust
Approvals, Required Securities Approvals and Required Telecommunications
Approvals.
"Required Securities Approval" means (i) the approval by the CNV of
the Venezuelan Offer on terms no less favorable to the Buyer than those set
forth in paragraphs (a)
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and (b) of Section 6.2 and on conditions no less extensive than the conditions
to the obligations of the Buyer hereunder set forth in Sections 7.2(b), 7.3(b)
and 7.3(c) hereof, (ii) the clearance or no objection by the CNV of the U.S.
Offer and (iii) written relief from the SEC with respect to the Offers, on terms
(A) in respect of the Venezuelan Offer, consistent with the terms of the
Venezuelan Offer approved by the CNV and (B) in respect of the U.S. Offer, that
do not violate any rule or regulation or order of the CNV or the terms of the
Venezuelan Offer approved by the CNV.
"Required Telecommunications Approval" means the authorization(s) of
CONATEL for the sale by the Sellers and the indirect purchase by the Buyer
Parents and the direct purchase by the Buyer of the Shares pursuant to this
Agreement and the indirect purchase of the Other Company Shares by the Buyer
Parents pursuant to the Offers, pursuant to the Telecommunications Law and the
regulations promulgated thereunder.
"Return" means any return, declaration, report, claim for refund,
information return or other document (including any related or supporting
estimates, elections, schedules, statements or information) filed or required to
be filed in connection with the determination, assessment or collection of any
Tax or the administration of any Laws relating to any Tax.
"Schedules" means the schedules attached to this Agreement.
"SEC" means the United States Securities and Exchange Commission.
"SEC Filings" means the filings made or required to be made by the
Company with the SEC since January 1, 2004, pursuant to the Exchange Act or the
Securities Act, as applicable, and the rules and regulations promulgated
thereunder.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Authorities" means all relevant federal, provincial and
state securities commissions and stock exchange authorities and similar entities
and authorities in the United States and Venezuela, including the SEC, the CNV,
the New York Stock Exchange and the Caracas Stock Exchange.
"Securities Laws" means, collectively, Venezuelan securities laws
and regulations, including the Capital Markets Law, the CNV Tender Offer
Regulations and other CNV regulations, U.S. federal securities laws and
regulations, "blue sky" and other securities laws and regulations of the states
of the United States, rules of the Caracas Stock Exchange and of the New York
Stock Exchange and any other securities laws, regulations or rules or stock
exchange rules applicable to the Company Shares, the ADSs, the Offers or the
Company, in each case, as amended from time to time.
"Sellers' Parent" means Verizon Communications Inc., a Delaware
corporation.
"Sellers' Knowledge" means the actual (but not constructive or
imputed) knowledge of the Group President - International; the Vice President
and General Counsel - International; the Vice President and Chief Financial
Officer-International; the Vice President International Operations - Operations
Management; and the Senior Vice President -
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International Operations, in each case of Sellers' Parent, and in each case as
of the date hereof and as of the Closing Date, as it may be applicable, without
any implication of verification or investigation concerning such knowledge.
"SIEX" means Superintendencia de Inversiones Extranjeras of
Venezuela.
"Subsidiary" or "Subsidiaries" of any Person means another Person
controlled by such Person, directly or indirectly, through one or more
intermediaries.
"Taxes" means any and all taxes, royalties, fees, levies, duties,
tariffs, imposts, and other charges of any kind (together with any and all
interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any Governmental Authority, including (i) taxes or
other charges on or with respect to income, franchises, windfall or other
profits, gross receipts, property, sales, use, goods and services, capital
stock, payroll, employment, social security, workers' compensation, unemployment
compensation, or net worth; (ii) taxes or other charges in the nature of excise,
withholding, ad valorem, stamp, transfer, value added, or gains taxes; (iii)
license, registration and documentation fees; and (iv) customs, duties, and
similar charges.
"Telecommunications Law" means the Ley Organica de
Telecomunicaciones of Venezuela.
"Tender Offer Documents" means, collectively, (i) any and all tender
offer announcements required by the CNV, the tender offer report required to be
filed under the CNV Tender Offer Regulations in respect of a tender offer for
the taking of control and all other information, exhibits and documents required
to be filed in accordance with Venezuelan Law or which are used by the Buyer in
connection with the Venezuelan Offer (and in each case, together with all
amendments and supplements thereto), (ii) any pre-commencement filing made by
the Buyer with any Governmental Authority with respect to the Offers, including,
without limitation, pre-commencement filings with the CNV and no-action letters
submitted to the SEC, (iii) the Tender Offer Statement on Schedule TO (together
with all amendments and supplements thereto) with respect to the U.S. Offer,
which shall contain (as an exhibit or otherwise) or incorporate by reference the
Offer to Purchase and forms of the related Letter of Transmittal, summary
advertisement and all other information, exhibits and ancillary offer documents
and instruments required by applicable Securities Law in connection with the
U.S. Offer, and (iv) the Tender Offer Statement on Schedule TO (together with
all amendments and supplements thereto) with respect to the Venezuelan Offer,
which shall contain (as an exhibit or otherwise) or incorporate by reference the
Offer to Purchase and forms of the related Letter of Transmittal, summary
advertisement and all other information, exhibits and ancillary offer documents
and instruments required by applicable Securities Law in connection with the
Venezuelan Offer.
"United States" means the United States of America.
"U.S. Offer" means the Offer for the ADSs.
"Venezuela" means the Bolivarian Republic of Venezuela.
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"Venezuelan Offer" means the Offer for the Other Company Shares
(other than ADSs).
Section 1.2.Table of Additional Definitions
The following terms have the meanings set forth in the Sections set
forth below:
Definition Location
---------- --------
Agreement...............................................................Preamble
Alternative Transaction..............................................Section 5.6
ARSPA...............................................................Section 5.17
Buyer...................................................................Preamble
Buyer Indemnified Parties............................................Section 8.2
BV Transfer.........................................................Section 5.17
Closing...........................................................Section 2.2(a)
Closing Date......................................................Section 2.2(a)
Company ................................................................Recitals
Convention..........................................................Section 3.11
Del Seller..............................................................Preamble
Del Seller Shares......................................................Recitals
dollars, $, US$.....................................................Section 9.15
Held Company Shares...............................................Section 3.3(c)
Holdings................................................................Recitals
Indemnification Dispute Notice....................................Section 8.5(c)
Indemnified Party.................................................Section 8.5(a)
Indemnifying Party................................................Section 8.5(a)
Losses...............................................................Section 8.2
Lux Seller..............................................................Preamble
Lux Seller Shares.......................................................Recitals
New BV..............................................................Section 5.17
New BV Shares.......................................................Section 5.17
New York Federal Court...............................................Section 9.9
Offer Price ......................................................Section 6.2(b)
Purchase Price....................................................Section 2.1(c)
Representatives......................................................Section 5.1
Sellers.................................................................Preamble
Seller Indemnified Parties...........................................Section 8.3
Settlement Requirements...........................................Section 8.5(b)
Shares..................................................................Recitals
Third-Party Claim.................................................Section 8.5(a)
When a reference is made in this Agreement to a Section, Article, Schedule,
Annex or Exhibit, such reference shall be to a Section, Article, Schedule, Annex
or Exhibit of this Agreement unless otherwise indicated. The table of contents
and headings contained in this Agreement or in any Annex, Exhibit or Schedule
are for convenience of reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. All words used in this
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Agreement will be construed to be of such gender or number as the circumstances
require. Any capitalized terms used in any Annex, Exhibit or Schedule but not
otherwise defined therein shall have the meaning as defined in this Agreement.
All Annexes, Exhibits or Schedules annexed hereto or referred to herein are
hereby incorporated in and made a part of this Agreement as if set forth herein.
The word "including" and words of similar import when used in this Agreement
will mean "including, without limitation", unless otherwise specified.
ARTICLE II
PURCHASE AND SALE
Section 2.1 Purchase and Sale of the Shares.
Upon the terms and subject to the conditions of this Agreement, at
the Closing:
(a) Lux Seller shall sell, assign, transfer and convey the Lux
Seller Shares to the Buyer, and the Buyer shall purchase the Lux Seller Shares
from Lux Seller.
(b) Del Seller shall sell, assign, transfer and convey the Del
Seller Shares to the Buyer, and the Buyer shall purchase the Del Seller Shares
from Del Seller.
(c) The Buyer shall pay to the Sellers the aggregate purchase price
for the Shares of US$ 676,568,000 (the "Purchase Price"). The Purchase Price
shall be allocated between the Sellers in proportion to their respective
ownership interests in the Shares.
Section 2.2 Closing
(a) The sale and purchase of the Shares shall take place at a
closing (the "Closing") to be held at the offices of Xxxxxx, Xxxxxx-Xxxxxxx,
Colt & Mosle LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000, Xxxxxx Xxxxxx of America,
at 10:00 A.M., local time, on the fifth Business Day following the satisfaction
or, to the extent permitted by applicable Law, waiver of all conditions to the
obligations of the parties set forth in Article VII (other than such conditions
as may, by their terms, only be satisfied at the Closing or on the Closing Date,
but subject to the satisfaction or waiver of such conditions), or at such other
place or at such other time or on such other date as the Sellers and the Buyer
mutually may agree in writing. The day on which the Closing takes place is
referred to as the "Closing Date".
(b) At the Closing, (i) the Buyer shall pay (or cause to be paid) to
the Sellers by wire transfer to the account specified by the Sellers in writing
at least three (3) Business Days prior to the Closing, an amount equal to the
Purchase Price in immediately available funds and without deduction of any kind,
(ii) the Sellers shall deliver to the Buyer, free and clear of all Encumbrances,
the certificates representing all of the Shares, duly endorsed in blank or
accompanied by stock powers in proper form for transfer, and (iii) the Sellers
shall deliver to the Buyer the various certificates, instruments and documents
referred to in Section 7.3.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The Sellers hereby jointly and severally represent and warrant (and
the Sellers' Parent with respect to itself in Section 3.2, represents and
warrants) to the Buyer as of the date hereof and as of the Closing Date as
follows:
Section 3.1 Organization and Qualification
(a) Lux Seller is a societe a responsabilite limite duly organized,
validly existing and in good standing under the laws of the Grand Duchy of
Luxembourg and has all necessary company power and authority to own, lease and
operate its properties and to carry on its business as it is now being
conducted.
(b) Del Seller is a corporation duly organized, validly existing and
in good standing under the laws of Delaware and has all necessary company power
and authority to own, lease and operate its properties and to carry on its
business as it is now being conducted.
(c) Holdings (i) is a private company with limited liability
(besloten vennootschap met beperkte aansprakelijkheid) duly organized, validly
existing and in good standing under the laws of the Netherlands, and has all
necessary company power and authority to own, lease and operate its properties
and to carry on its business as it is now being conducted; and (ii) is duly
qualified or licensed as a foreign corporation to do business, and is in good
standing, in each jurisdiction where the character of the properties owned,
leased or operated by it or the nature of its business makes such qualification
or licensing necessary, except in each case with respect to this clause (ii),
for any such failures that would not have a Material Adverse Effect on Holdings.
(d) The Sellers have heretofore furnished to the Buyer a complete
and correct copy of the certificate of incorporation and bylaws, or equivalent
creation or organizational documents, each as amended to date, of Holdings. Such
certificate of incorporation, bylaws, or equivalent creation or organizational
documents, are in full force and effect.
Section 3.2 Authority
(a) Each of the Sellers (and the Sellers' Parent solely with respect
to Section 9.20(a)) has full company power and authority to execute and deliver
this Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery by each of the
Sellers (and the Sellers' Parent) of this Agreement and the consummation by each
of the Sellers (and the Sellers' Parent solely with respect to Section 9.20(a))
of the transactions contemplated hereby have been duly and validly authorized by
all necessary company action. This Agreement has been duly executed and
delivered by each of the Sellers (and the Sellers' Parent). This Agreement
constitutes the legal, valid and binding obligations of the Sellers (and the
Sellers' Parent solely with respect to Section 9.20(a)), enforceable against the
Sellers (and the Sellers' Parent solely with respect to Section 9.20(a)) in
accordance with its terms, except as enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and
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by general principles of equity (regardless of whether considered in a
proceeding in equity or at law).
(b) No Consent is required in connection with the execution or
delivery by the Sellers of, or the performance by the Sellers of their
obligations under, this Agreement except (i) the Required Regulatory Approvals;
(ii) the other Consents listed or described on Schedule 3.2(b); (iii) where
failure to obtain such Consent would not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the wireline and
wireless business and operations of the Company and its Subsidiaries taken as a
whole or a Material Adverse Effect with respect to Holdings or the Sellers; or
(iv) as may be necessary as a result of any facts or circumstances relating
solely to the Buyer or any of its Affiliates. The execution and delivery of this
Agreement by the Sellers do not, and the performance by the Sellers of their
obligations under this Agreement will not, conflict with or result in the
violation of, or constitute (with due notice or lapse of time or both) a default
under, or give rise to a right of termination, cancellation or acceleration of
any obligation under, (1) the certificate or articles of incorporation or bylaws
or equivalent organizational documents of either of the Sellers or Holdings, (2)
any Law to which either of the Sellers or Holdings is subject or any of their
respective properties or assets is bound, or (3) any contract or agreement to
which either of the Sellers or Holdings is a party; except in the case of
clauses (2) and (3), such conflicts, violations, defaults or rights that would
not have a Material Adverse Effect with respect to either of the Sellers or
Holdings.
Section 3.3 Shares and Capital Stock
(a) Lux Seller is the record and a Beneficial Owner of the Lux
Seller Shares, free and clear of any Encumbrance. Del Seller is the record and a
Beneficial Owner of the Del Seller Shares, free and clear of any Encumbrance.
The Sellers have all requisite company authority and power to sell, assign and
transfer the Shares to the Buyer. Upon delivery to the Buyer or its designees of
certificates for the Shares at the Closing, the Buyer's payment of the Purchase
Price and registration of the Shares in the name of the Buyer or its designees,
as the case may be, in the stock records of Holdings, the Buyer or its
designees, as the case may be, shall acquire good, valid and marketable title to
the Shares, free and clear of any Encumbrance other than Encumbrances created by
the Buyer or its designees.
(b) All the Shares have been validly issued and are fully paid and
nonassessable. There are no outstanding obligations, options, warrants,
convertible securities or other rights, agreements, arrangements or commitments
of any kind relating to the capital stock or other ownership interest of
Holdings that obligates Holdings to issue or sell any shares of capital stock
of, or any other ownership interest in, Holdings. There are no outstanding
contractual obligations of Holdings to repurchase, redeem or otherwise acquire
any shares of capital stock or other ownership interest of Holdings or to
provide funds to, or make any investment in, any other Person. There are no
agreements or understandings in effect with respect to the voting or transfer of
any of the capital stock or other ownership interest of Holdings. Other than the
Shares, Holdings does not have outstanding any other shares of its capital
stock, ownership interests or any securities, instruments or obligations
convertible into or exchangeable or exercisable for any shares of its capital
stock, ownership interests or such securities.
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(c) Holdings is the record and a Beneficial Owner of all the Company
Shares and ADSs set forth on Schedule 3.3(c) (collectively, the "Held Company
Shares"), and Holdings has good, valid and marketable title, free and clear of
any Encumbrance, to the Held Company Shares. The Held Company Shares represent
all the shares of capital stock and ownership interests of the Company or
securities, instruments or obligations convertible into or exchangeable or
exercisable for any shares of capital stock or ownership interests of the
Company held or Beneficially Owned by Sellers' Parent or any Subsidiary of
Sellers' Parent, other than any capital stock of the Company that Sellers'
Parent's pension funds may hold from time to time in the ordinary course of
business.
Section 3.4 Operations; No Assets or Liabilities
Since January 1, 2005, Holdings has conducted no operations other
than those incidental to the ownership of the Held Company Shares. Other than
the Held Company Shares, Holdings does not own any assets or have any
outstanding liabilities, in each case other than those assets or liabilities
which, individually or in the aggregate, are not material.
Section 3.5 Taxes
Except as set forth on Schedule 3.5 or for matters that would not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on Holdings, (a) any and all Returns required to have been filed
by or with respect to Holdings have been timely filed (taking into account any
extension of time to file granted or obtained), and such Returns have been duly
and accurately prepared; (b) all Taxes whether or not shown to be payable on
such Returns have been paid or will be timely paid; (c) no deficiency for any
amount of Tax has been asserted or assessed by a Governmental Authority in
writing against Holdings that has not been satisfied by payment, settled or
withdrawn; (d) there are no Tax liens on the assets of Holdings (other than
Permitted Encumbrances); (e) there are no outstanding agreements or waivers
extending the period with respect to the filing of any Return, the making of any
assessment or reassessment of Taxes or the payment of any tax to which Holdings
may be subject and (f) there is no claim, audit, action, suit, proceeding or
investigation now pending or, to Sellers' Knowledge, threatened against Holdings
with respect to any Tax or Tax attribute.
Section 3.6 Litigation
There are no civil, criminal, administrative, arbitral or similar
proceedings, actions or suits pending or, to the Sellers' Knowledge, threatened
by or against Holdings.
Section 3.7 Contracts
(a) Except as listed Schedule 3.7(a), there are no licenses,
contracts, agreements, commitments or undertakings to which Holdings is a party
or by which any of its assets or properties is bound.
(b) Except as listed or described on Schedule 3.7(b) or as included
(except to the extent redacted) as an exhibit to any publicly available
submission or filing made by the Company under the Exchange Act or the
Securities Act, neither the Company nor any of its Subsidiaries is a party to
any contract, agreement, arrangement or understanding, written or oral,
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with the Sellers or any of their Affiliates: (a) for the sale, lease, licensing
or provision of materials, supplies, goods, services, equipment, facilities or
other assets to the Company or its Subsidiaries (other than as described in
clause (b) below) that (i) provides for (or would reasonably be expected to
result in) a payment by the Company or its Subsidiaries in any year of US$
250,000 or more or (ii) which provides (or would reasonably be expected to
result in) aggregate payments by the Company or its Subsidiaries during the term
of such contract, agreement, arrangement or understanding (without giving effect
to any renewal or extension thereof, except to the extent such renewal or
extension can be effected without the consent or agreement of the Company and
the Company has no right to terminate such contract, agreement, arrangement or
understanding within ninety (90) days without penalty) of US$ 1,000,000 or more;
(b) which relates to the provision of any interconnection, settlement or other
material telecommunications services, other than pursuant to publicly filed
tariffs or entered into in the ordinary course of business; (c) which provides
for (or would reasonably be expected to result in) payments by or to the Company
or its Subsidiaries in any year of US$ 1,000,000 or more or aggregate payments
by or to the Company or its Subsidiaries during the term of such contract,
agreement, arrangement or understanding of US$ 5,000,000 or more (without giving
effect to any renewal or extension thereof, except to the extent such renewal or
extension can be effected without the consent of the Company and the Company has
no right to terminate such contract, agreement, arrangement or understanding
within ninety (90) days without penalty); or (d) which is otherwise material to
the Company or in any manner restricts (or would restrict, after the
consummation of the transactions contemplated by this Agreement) the business of
the Company or its Subsidiaries. All contracts and agreements among the Sellers
or their Affiliates on the one hand and the Company or its Subsidiaries on the
other were entered into on commercially reasonable terms as of the date of such
contract or agreement. The Sellers agree to (and agree to cause any of their
Affiliates who are parties to any contract, agreement arrangement or
understanding not listed on Schedule 3.7(b) with the Company or its Subsidiaries
to) waive any termination penalties or fees in the event that after the Closing
the Company or any of its Subsidiaries, as the case may be, terminates any such
contract, agreement, arrangement or understanding.
Section 3.8. Foreign Investment Registration and Foreign Exchange Approval
(a) The investment made by Holdings represented by the Held Company
Shares (other than the ADSs) has been duly registered with SIEX as a direct
foreign investment (inversion extranjera directa), evidenced by duly updated
shareholders' investment certificates issued by SIEX with respect to the Held
Company Shares (other than the ADSs) for an amount of US$ 975,773,218.73 and as
of the date hereof such registration is up-to-date, valid and in good standing
and not subject to any restriction or limitations.
(b) CADIVI has granted all foreign exchange approvals requested by
Holdings or the Company in favor of Holdings as of the date hereof, including
autorizaciones de adquisicion de divisas and autorizaciones de liquidacion de
divisas, required for the purchase of United States Dollars with respect to
dividends paid by the Company to Holdings. Holdings has complied in all material
respects with all Laws governing Venezuelan exchange controls.
Section 3.9 Compliance with Law
Holdings is in compliance in all material respects with all
applicable Laws.
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Section 3.10 Employee Matters
Holdings has no employees and no liabilities with respect to
compensation or benefits for past employees, if any.
Section 3.11 Tax Treaty
Holdings is a resident of the Netherlands within the meaning of
Article 4 of the Convention between Venezuela and the Netherlands for the
Avoidance of Double Taxation and Fiscal Evasion on Income and its Protocol (the
"Convention"). Holdings does not have a permanent establishment in Venezuela
within the meaning of Section 5 of the Convention. Holdings has received a
residency certificate from the Netherlands sufficient under the Ley de Impuesto
Sobre la Renta of Venezuela for purposes of receiving tax benefits pursuant to
the Convention.
Section 3.12 Brokers
No broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission from the Company or the Buyer or their
respective Affiliates in connection with the transactions contemplated hereby
based upon arrangements made by or on behalf of the Sellers.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer hereby represents and warrants (and each Buyer Parent with
respect to itself in Section 4.2(a) represents and warrants) to the Sellers as
of the date hereof and as of the Closing Date as follows:
Section 4.1 Organization
The Buyer is a a private company with limited liability (besloten
vennootschap met beperkte aansprakelijkheid) duly organized, validly existing
and in good standing under the laws of the Netherlands and has all necessary
corporate power and authority to own, lease and operate its properties and to
carry on its business as it is now being conducted.
Section 4.2 Authority
(a) The Buyer (and each Buyer Parent solely with respect to Section
9.20(b)) has full corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery by the Buyer (and
each Buyer Parent) of this Agreement and the consummation by the Buyer (and each
Buyer Parent solely with respect to Section 9.20(b)) of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate or equivalent action. This Agreement has been duly and validly
executed and delivered by the Buyer (and each Buyer Parent). This Agreement
constitutes the legal, valid and binding obligations of the Buyer (and each
Buyer Parent solely with respect to Section 9.20(b)), enforceable against the
Buyer (and each Buyer Parent solely with respect to Section 9.20(b)) in
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accordance with its terms, except as enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and by general principles of equity (regardless of
whether considered in a proceeding in equity or at law).
(b) No Consent is required in connection with the execution or
delivery by the Buyer of, or the performance by the Buyer of its obligations
under, this Agreement or the consummation of the transactions contemplated
hereby (including the Offers), except (i) the Required Regulatory Approvals;
(ii) the other Consents listed or described on Schedule 4.2(b); (iii) where
failure to obtain such Consent would not have a Material Adverse Effect on
either of the Buyer Parents; or (iv) as may be necessary as a result of any
facts or circumstances relating solely to the Sellers or any of their
Affiliates. The execution and delivery of this Agreement by the Buyer does not,
and the performance by the Buyer of its obligations under this Agreement and the
consummation of the transactions contemplated hereby (including the Offers) will
not, conflict with or result in the violation of, or constitute (with due notice
or lapse of time or both) a default under, or give rise to a right of
termination, cancellation or acceleration of any obligation under, (1) the
estatutos, certificate or articles of incorporation or bylaws of the Buyer, (2)
any Law to which the Buyer is subject or its properties or assets is bound, or
(3) any contract or agreement to which the Buyer is a party; except in the case
of clauses (2) and (3), such conflicts, violations, defaults or rights that
would not have a Material Adverse Effect on the Buyer.
Section 4.3 Sufficiency of Funds
At Closing, the Buyer will have sufficient funds available to permit
the Buyer to pay the Purchase Price and consummate all other transactions
contemplated by this Agreement and will have sufficient funds available for the
Offers.
Section 4.4 Litigation
There are no civil, criminal, administrative, arbitral or similar
proceedings, actions or suits pending, or to the Buyer's Knowledge, threatened
by or against the Buyer or any of its Affiliates which if adversely decided
would have a Materially Adverse Effect with respect to the Buyer.
Section 4.5 Beneficial Ownership of Shares
Except as may arise in connection with the execution of this
Agreement (and the transactions contemplated hereby), neither of Buyer Parents
have any filing obligation under Rule 13d-1 under the Exchange Act with respect
to Beneficial Ownership of the Company Shares or ADSs.
Section 4.6.Brokers
No broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission from the Sellers or any of their Affiliates
in connection with the transactions contemplated hereby based upon arrangements
made by or on behalf of the Buyer.
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ARTICLE V
COVENANTS
The Parties hereto hereby agree that:
Section 5.1 Confidentiality
Except as required in connection with the public disclosures
provided for in Section 5.2, each of the parties shall, and shall cause its
agents, employees, officers, directors and professional advisors (collectively,
"Representatives") and its Affiliates and each of its Affiliates Representatives
to, keep confidential, disclose only to its Affiliates or Representatives to the
extent necessary or desirable in connection with the transactions contemplated
hereby and use only in connection with the transactions contemplated by this
Agreement, all information and data obtained by them from the other party or its
Affiliates or Representatives relating to such other party or the transactions
contemplated hereby (other than information or data that is or becomes available
to the public other than as a result of a breach of this Section 5.1), unless
disclosure of such information or data is required by applicable Law or in
connection with a filing with a Governmental Authority or necessary or desirable
in order to obtain any necessary Consents. In the event that the transactions
contemplated hereby are not consummated, each party shall, and shall use its
commercially reasonable efforts to cause its Affiliates and Representatives to,
promptly return to the other party or destroy (with certification of
destruction) all documents (including all copies thereof) containing any such
information or data.
Section 5.2 Public Announcements
(a) Without prejudice to the provisions of Section 5.1 hereof,
during the term of this Agreement and thereafter neither the Sellers or their
Affiliates nor the Buyer or its Affiliates shall issue any press release or
public announcement or make any statement to the news media with respect to the
transactions contemplated by this Agreement without the prior written consent of
the other parties (which shall not be unreasonably withheld), except as may be
required by Law or Governmental Order.
(b) The Sellers and the Buyer acknowledge that (i) the Sellers or
their Affiliates shall file with the SEC, as an amendment to Schedule 13D,
information regarding the transactions contemplated hereby and, as an exhibit
thereto, a copy of this Agreement, (ii) the Buyer or its Affiliates shall issue
a press release regarding the transactions contemplated hereby and submit such
press release to the SEC under cover of Form 6-K and shall make such other
filings as are required under applicable securities laws of any other
jurisdiction, and (iii) any party hereto or its Affiliates may make any similar
filings under applicable Securities Laws as shall be required or appropriate.
Prior to the first to occur of the Closing and the termination of this
Agreement, each of the Sellers and the Buyer (including their respective
Affiliates) shall (to the extent practicable under the circumstances) provide
each other with a copy of these proposed filings prior to filing or submitting
such proposed filings with or to any Securities Authority.
Section 5.3 Consents and Approvals
(a) The Buyer shall (i) no later than the sixth (6th) Business Day
following the date hereof, file the Tender Offer Documents required under the
Securities Laws of Venezuela to
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be filed with the CNV in connection with the Offers, substantially in the form
provided to the Sellers, with the CNV, and such other documents and instruments
as may be required in order to obtain the Required Securities Approvals, (ii) no
later than the tenth (10th) Business Day following the date hereof, make such
filings with CONATEL as may be required in connection with the purchase of the
Shares and the purchase of the Other Company Shares pursuant to the Offers in
order to obtain the Required Telecommunications Approvals, and (iii) promptly
make such filings with Pro-Competencia, if any, as may be required in connection
with the purchase of the Shares and the purchase of the Other Company Shares
pursuant to the Offers in order to obtain the Required Regulatory Approvals.
(b) In addition to the requirements of Section 5.3(a), at all times
prior to the Closing, the Buyer shall, and shall cause its Affiliates to: (i)
promptly take all actions necessary to make the filings required under any
applicable Laws in connection with this Agreement, the Offers and the
transactions contemplated hereunder, (ii) as soon as reasonably practicable,
comply in all material respects with any formal or informal request for
additional information or documentary material received from any Governmental
Authority (including the CNV, CONATEL and Pro-Competencia) pursuant to and in
connection with any applicable Laws, and (iii) as soon as reasonably
practicable, resolve any investigation or other inquiry concerning the
transactions contemplated by this Agreement or the Offers initiated by any
Governmental Authority in connection with any applicable Laws.
(c) At all times prior to the Closing, the Buyer shall, and shall
cause its Affiliates to, use reasonable best efforts to take, or cause to be
taken, all actions, and to do or cause to be done, all things necessary, proper
and advisable to obtain, as promptly as practicable, all approvals, consents and
clearances under any Law required from any Governmental Authority (including any
approvals, consents and clearances required from the CNV, the SEC, CONATEL and
Pro-Competencia) to purchase the Shares pursuant to this Agreement, to commence
the Offers, to consummate the Offers, and to effect the other transactions
contemplated hereunder. In connection with the obtaining of any of the Required
Antitrust Approvals and the Required Telecommunications Approvals, the Buyer
shall, and shall cause its Affiliates to, agree to any terms, conditions or
modifications required by any Governmental Authority; provided that,
notwithstanding anything in this Agreement to the contrary, the Buyer and its
Affiliates shall not be required to agree to any terms, conditions or
modifications that would result in, or would be reasonably likely to result in,
either individually or in the aggregate, (i) a material adverse effect on the
business or operations of the Company and its Subsidiaries, taken as a whole,
(ii) a material adverse effect on the business or operations of either Buyer
Parent, in each case assuming each Buyer Parent is the size of the Company and
its Subsidiaries, taken as a whole, (iii) the Buyer or any of its Affiliates or
the Company or its Subsidiaries having to cease, sell or otherwise dispose of
any assets or business (including any requirement that any such assets or
businesses be held separate), which assets or businesses are, in the aggregate,
material in respect of the size of the Company and its Subsidiaries taken as a
whole, (iv) any limitation or restriction (other than any limitation or
restriction that is not material) being placed on Buyer's (or Buyer Parents')
rights or ownership over the Shares, the Held Company Shares or any Other
Company Shares, including their right to vote such Shares, Held Company Shares
or Other Company Shares, or (v) any material limitation or restriction being
placed on the ability of the Buyer or either Buyer Parent to control and manage
the assets, properties, businesses and operations of the Company and its
Subsidiaries; provided, however, with respect to clauses (iv)
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and (v) above, other than any such limitation or restriction that would be
generally applicable on the date hereof. Any remedial measures taken in
connection with the transactions contemplated hereby by any regulatory or
judicial body pursuant to Law against Buyer and its Affiliates or the Company
and its Subsidiaries following the Closing shall be the sole responsibility of
the Buyer.
(d) At all times prior to the Closing, the Buyer shall, and shall
cause its Affiliates to, provide the Sellers and their counsel with (i) prior to
filing or submitting such documents with or to any of the Securities
Authorities, a draft version of (x) the Tender Offer Documents and any
revisions, amendments and supplements thereto, (y) any correspondence or other
documents and information to be delivered to any of the Securities Authorities
in connection with the Offers or the Tender Offer Documents and (z) all
documents to be filed with CONATEL and Pro-Competencia pursuant to this
Agreement, and (ii) copies of any documents filed or submitted to any Securities
Authority in any other jurisdiction and any correspondence or other documents or
information to be delivered thereto in connection with the Offers or the
transactions contemplated hereby.
(e) At all times prior to the Closing, the Buyer shall, and shall
cause its Affiliates to, provide the Sellers with copies of any correspondence
from Securities Authorities or any securities authority in any other
jurisdiction relating to the Offers or the Tender Offer Documents and shall keep
the Sellers informed of the status of the process of obtaining the Required
Regulatory Approvals, and of the Offers, on a current basis. The Sellers shall
have the right to approve (such approval not to be unreasonably withheld or
delayed) any references to the Sellers or any of their Affiliates contained in
any filing or correspondence of the Buyer or its Affiliates with any
Governmental Authorities with respect to the transactions contemplated hereby.
(f) Not later than the tenth (10th) Business Day following the date
hereof, the Sellers shall make such filings with CONATEL as may be required in
connection with the sale by the Sellers and the purchase by the Buyer of the
Shares in order to obtain the Required Telecommunications Approvals; provided
that, the Sellers shall, and shall cause their Affiliates to, prior to filing
such documents, provide a draft version of such filing to Buyer. At all times
prior to Closing the Sellers shall, and shall cause their Affiliates to, (i)
cooperate with the Buyer and its Affiliates to the extent reasonably necessary
in connection with obtaining the Required Regulatory Approvals and shall provide
the Buyer with copies of any correspondence and filings with any Governmental
Authority or Securities Authority relating to the transactions contemplated
hereby, and (ii) as soon as reasonably practicable, comply in all material
respects with any formal or informal request for additional information or
documentary material in connection with the transactions contemplated herein
received from any Governmental Authority or any Securities Authorities pursuant
to and in connection with applicable Laws. The Buyer shall have the right to
approve (such approval not to be unreasonably withheld or delayed) any
references to the Buyer or any of its Affiliates contained in any filing or
correspondence of the Sellers or any of their Affiliates with any Governmental
Authority in connection with this Agreement or the transactions contemplated
hereby. No party hereto shall consummate another transaction or enter into an
agreement with respect to another transaction or take any other action in
furtherance thereof if the reasonably anticipated consequence of such
transaction or action in furtherance thereof is, or would be, to cause any
Governmental Authority not to grant any
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Required Regulatory Approvals or to materially delay the granting of any
Required Regulatory Approvals.
(g) Subject to the terms and conditions of this Agreement, each of
the Buyer and the Sellers will use their commercially reasonable efforts to
take, or cause to be taken, all other actions and to do, or cause to be done,
all other things necessary, proper or advisable under applicable Laws and
regulations to cause to be satisfied all conditions precedent to its obligations
under this Agreement and to consummate and make effective the transactions
contemplated by this Agreement and, with respect to the Buyer only, the Offers,
in each case as soon as practicable after the date hereof.
(h) Sellers shall use commercially reasonable efforts to renew the
SIEX registration referred to in Section 3.8(a) so that such registration is
up-to-date, valid and in good standing and not subject to any restrictions or
limitations at Closing.
Section 5.4 Certain Commitments of Sellers
(a) During the period from the date of this Agreement to the Closing
Date, except as may be required by applicable Law, the Sellers shall not (and
shall cause Holdings not to), without the prior written consent of the Buyer,
(i) sell, transfer, give, pledge, encumber, assign or otherwise dispose of, or
enter into any contract, option or other arrangement or understanding with
respect to the sale, transfer, gift, pledge, Encumbrance, assignment or other
disposition of, the Shares or the Held Company Shares, (ii) deposit the Shares
or the Held Company Shares into a voting trust or enter into a voting agreement
or voting trust with respect to the Shares or the Held Company Shares, (iii)
adopt or propose any change in the Sellers' or Holdings' organizational
documents, (iv) cause Holdings to merge or consolidate with any other Person or
acquire assets, equity or debt of any Person, or make loans or extensions of
credit to any Person, (v) take any action that would have the effect of
preventing or materially delaying the Sellers or their Affiliates from
performing any of their respective obligations under this Agreement, (vi) with
respect to Holdings only, incur any liabilities other than those liabilities
which, individually or in the aggregate, are not material and which are
incidental to the ownership of the Held Company Shares or to maintain its
corporate existence, or (vii) issue, deliver or sell or agree to issue, deliver
or sell any additional shares of capital stock or ownership interests of
Holdings or any securities, instruments or obligations convertible into or
exchangeable or exercisable for any shares of such capital stock, ownership
interests or securities.
(b) During the period from the date of this Agreement to the Closing
Date, except as otherwise expressly provided for herein or required by
applicable Law, the Sellers shall (and shall cause Holdings to) use their
commercially reasonable efforts to cause the Company and its Subsidiaries not
to, without the prior written consent of the Buyer:
(i) do or effect any of the following actions with respect to
any securities of the Company: (A) adjust, split, combine, recapitalize or
reclassify its capital stock or ownership interests, (B) seek shareholder
approval of, or pay, any dividend or distribution on any shares of its
capital stock, ownership interests or any securities or obligations
convertible into or exchangeable for any shares of its capital stock or
ownership interests other than cash dividends proposed by the Board of
Directors of the
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Company on February 23, 2006, (C) redeem, purchase or otherwise acquire,
directly or indirectly, (including, without limitation, through
labor-related trusts or other trusts or entities controlled or funded by
the Company) any shares of its capital stock, ownership interests or any
securities or obligations convertible into or exchangeable for any shares
of its capital stock or ownership interests, (D) grant any Person any
right or option to acquire any shares of its capital stock or ownership
interests, (E) issue, deliver or sell or agree to issue, deliver or sell
any additional shares of its capital stock, ownership interests or any
securities, instruments or obligations convertible into or exchangeable or
exercisable for any shares of its capital stock, ownership interests or
such securities (except pursuant to the exercise of options outstanding
and vested on the date hereof or that vest after the date hereof pursuant
to the terms in effect on the date hereof) or (F) enter into any
agreement, understanding or arrangement with respect to the sale or voting
of its capital stock or ownership interests;
(ii) sell, transfer, lease, pledge, mortgage, encumber or
otherwise dispose of any amount of its property or assets that is material
to the Company and its Subsidiaries, taken as a whole, other than in the
ordinary course of business;
(iii) make or propose any changes in its estatutos;
(iv) reduce its paid-in capital;
(v) merge or consolidate with any other Person other than a
wholly-owned Subsidiary of the Company or acquire material assets or
capital stock or ownership interests of any other Person other than a
wholly-owned Subsidiary of the Company;
(vi) (A) make or change any Tax election; (B) settle or
compromise any Tax liability, claim or assessment; (C) agree to an
extension or waiver regarding the application of the statute of limitation
in respect of any Tax claim or assessment; (D) grant any power of attorney
with respect to Taxes; (E) enter into Tax sharing agreements; (F) change
its fiscal year; or (G) change any method of accounting; in each case, if
any of the actions set forth in clauses (A) through (G) above would have
the effect of increasing, in any material respect, the Tax liability of
either of Holdings or the Company for any Tax period ending after the
Closing Date; or
(vii) authorize any of, or commit, propose or agree to take
any of, the foregoing actions.
For purposes of this Section 5.4(b), the Sellers' commercially reasonable
efforts to cause the Company and its Subsidiaries to take or not take any
actions contemplated herein shall be limited to the Sellers (i) causing Holdings
to exercise all voting rights with respect to the Held Company Shares (x) in a
manner consistent with the obligations of the Sellers under this Section 5.4(b)
at any meeting of the shareholders of the Company or by written consent of the
shareholders and (y) against any proposal presented at such meeting or submitted
to shareholders for consent, which proposal would cause or result in any of the
conditions set forth in Sections 7.2 or 7.3 to not be satisfied as of any date
following the date hereof, and (ii) making no recommendations to the Board of
Directors of the Company which are inconsistent with its
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obligations under this Section 5.4(b). Notwithstanding the foregoing, this
Section 5.4(b) shall not prohibit any member of the board of directors of the
Company appointed or designated by the Sellers or any Affiliate of Sellers or
any employee or officer of Sellers or their Affiliates employed by the Company
or its Subsidiaries from taking or participating in any of the actions referred
to in this Section 5.4(b) to the extent that the failure by such Person to take
such action would be reasonably likely to violate his or her fiduciary or legal
duties or would be inconsistent with applicable Law.
Section 5.5 Resignations
The Sellers shall at Closing (i) cause the resignation or removal of
the officers and directors of Holdings and (ii) cause the employees of any
Affiliate of the Sellers who are members of the Board of Directors of the
Company (including both directors and alternates (suplentes)), other than the
Chairman of the Board of Directors, to irrevocably tender their resignations to
the Company, to take effect upon shareholder approval as required by Venezuelan
law. After the Closing Date, the Buyer shall vote, and shall cause its
Affiliates to vote, any and all Company Shares directly or indirectly held or
Beneficially Owned by the Buyer or its Affiliates in favor of the resignations
described in the preceding sentence, whether at a shareholders' meeting or by
written consent.
Section 5.6 No Solicitation of Offers
(a) The Sellers shall not, and shall cause their Affiliates not to,
and shall use reasonable best efforts to cause Sellers' and their Affiliates'
Representatives not to, directly or indirectly: (i) solicit, initiate or
encourage (including by way of furnishing non-public information), or take any
other action to facilitate, any inquiries or the making of any proposal or offer
relating to an Alternative Transaction; or (ii) enter into or participate in any
discussions or negotiations regarding, or enter into any agreement which would
result in, any Alternative Transaction. The Sellers shall, and shall cause their
Affiliates to, and shall use reasonable best efforts to cause Sellers' and their
Affiliates' Representatives to, immediately cease and terminate any existing
discussions and negotiations conducted with any other Person prior to the date
hereof with respect to any Alternative Transaction. For purposes of this
Agreement, "Alternative Transaction" means (i) a transaction or series of
transactions pursuant to which any Person (or group of Persons) which is not the
Buyer or an Affiliate of the Buyer acquires or could acquire (x) from the
Sellers or their Affiliates Beneficial Ownership of any of the Held Company
Shares, or (y) more than thirty percent (30%) of the Company Shares, whether
from the Sellers, Holdings, the Company or otherwise; or (ii) any other
transaction pursuant to which any Person (or group of Persons) acquires or would
acquire direct or indirect ownership or control of assets of the Company or its
Subsidiaries (other than in the ordinary course of business) having a book value
of twenty percent (20%) or more of the value of the Company's total consolidated
assets on the date hereof, or for consideration equal to twenty percent (20%) or
more of the fair market value of all Company Shares on the date hereof. The
Sellers shall promptly communicate to the Buyer any such unsolicited inquiries
or communications concerning any such Alternative Transaction which the Sellers
or any of their Affiliates may receive.
(b) Notwithstanding the foregoing, Section 5.6(a) shall not: (A)
require any Person to take any action or refrain from taking any action that
would be inconsistent with applicable Law, (B) prohibit any Person from
complying with applicable fiduciary or legal duties
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(whether as a director or officer), or (C) require any person to breach any
obligations of confidentiality to which it or they are subject.
Section 5.7 Seller's Broker's Fees
The Sellers shall be solely responsible for the fees and expenses of
any brokers, finders or investment banks engaged by the Sellers or their
Affiliates in connection with the transactions contemplated hereby.
Section 5.8 Buyer's Broker's Fees
The Buyer shall be solely responsible for the fees and expenses of
any brokers, finders or investment banks engaged by the Buyer or its Affiliates
in connection with the transactions contemplated hereby.
Section 5.9 Tax Matters
(a) The Sellers shall prepare or cause to be prepared and file or
cause to be filed all Returns for Holdings for all periods ending prior to the
Closing Date. The Buyer shall prepare or cause to be prepared and file or cause
to be filed all Returns for Holdings for all periods ending on or after the
Closing Date.
(b) Notwithstanding Section 5.9(a), at the Sellers' option, the
Buyer shall prepare or cause to be prepared and file or cause to be filed any
Returns for Taxes of Holdings for periods ending prior to the Closing Date which
are required to be filed after the Closing Date; provided that the Sellers shall
pay all Taxes due with respect to such Returns and shall promptly reimburse
Buyer for the cost of filing such Returns.
(c) With respect to income Tax Returns required to be filed by the
Buyer pursuant to Section 5.9(a) for which Sellers' Parent or either of the
Sellers has or could have any liability for Taxes due (including pursuant to its
indemnity obligations hereunder), the Buyer shall furnish a copy of such Returns
to the Sellers for the Sellers' approval, which shall not be unreasonably
withheld, not later than 20 calendar days before the due date for filing such
returns (including extensions thereof). Furthermore, with respect to such
Returns, the Buyer shall not take (and shall cause Holdings not to take) a
position with respect to any item on any Return relating to the determination of
the taxable income or taxable value of Holdings that is inconsistent with the
position taken with respect to such item on a prior Return or, if inconsistent,
will obtain the Sellers' prior written consent to such inconsistent position if
the Sellers notify the Buyer in writing reasonably in advance of the due date
for filing such returns that such inconsistent position would materially and
adversely affect the Tax liability of the Sellers or their Affiliates (including
pursuant to any indemnity obligations hereunder); provided that the Sellers
shall not have the right to unreasonably withhold or delay their consent.
(d) The Buyer will not, and will not cause or permit Holdings to
amend, file or refile any Return or make or revoke any Tax election for any
period which ends on or prior to the Closing Date without the written consent of
the Sellers; provided that the Sellers shall not have the right to unreasonably
withhold or delay their consent.
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(e) For purposes of ascertaining the appropriate amounts of Tax
liabilities subject to indemnification under Sections 8.2, 8.3 and 8.7, in the
case of Taxes that are payable with respect to a Tax period that begins before
the Closing Date and ends after the Closing Date, the portion of any such Tax
that is allocable to the portion of the period ending on and including the
Closing Date shall be: (i) in the case of Taxes that are either (x) based upon
or related to income or receipts, (y) imposed in connection with any sale or
other transfer or assignment of property (other than as provided under Section
5.9(j)), or (z) imposed on a periodic basis and measured by the level of any
item which is required to be determined as of the Closing Date or which is
clearly determinable as of the Closing Date and such determination is made by a
party in a manner reasonably acceptable to both parties, shall be deemed equal
to the amount which would be payable if the Tax year ended with the Closing
Date, and (ii) in all other cases, shall be deemed to be the amount of such
Taxes for the entire period multiplied by a fraction the numerator of which is
the number of calendar days in the period ending with the Closing Date and the
denominator of which is the number of calendar days in the entire period.
(f) Any refunds of or reductions in Taxes with respect to Holdings
relating to Taxes for any period (or portions thereof) ending on or prior to the
Closing Date for which the Sellers are liable under Section 8.7 shall be for the
account of the Sellers unless such refunds or reductions are attributable to a
carryback of losses from Tax periods (or portions thereof) beginning after the
Closing Date. The Buyer shall, if the Sellers so request and at the Sellers'
expense, cause the relevant entity (the Buyer, Holdings or any successor of the
Buyer or Holdings) to file for and obtain any refunds or reductions to which the
Sellers are entitled hereunder, including through the prosecution of any
administrative or judicial proceeding which the Sellers, in their reasonable
discretion, chooses to direct such entity to pursue. The Buyer shall permit the
Sellers to control (at the Sellers' expense) the prosecution of any such refund
or reduction claimed, and when deemed appropriate by the Sellers, shall cause
the relevant entity to authorize by appropriate power of attorney such person as
the Sellers shall designate to represent such entity with respect to such refund
or reduction claimed. The Buyer shall forward to the Sellers an amount equal to
any refund or reduction promptly after such refund is received or such reduction
is granted. Notwithstanding the foregoing, the control of the prosecution of a
claim for refund for or reduction in Taxes paid pursuant to a deficiency
assessed subsequent to the Closing Date as the result of an audit shall be
governed by the provisions of Section 8.5. In the event that any refund of or
reduction in Taxes for which a payment has been made to the Sellers pursuant to
this Section 5.9 is subsequently reduced, the Sellers shall indemnify, defend
and hold harmless the Buyer and Holdings against, and reimburse the Buyer and
Holdings for, any Tax liability, including interest and penalties, assessed
against the Buyer or Holdings by reason of the reduction or disallowance and any
reasonable related costs and expenses. Any refunds or reductions of Taxes with
respect to Holdings relating to Taxes for which the Buyer is liable under
Article VIII shall be for the account of the Buyer.
(g) Notwithstanding any provision in Section 8.5 to the contrary
regarding the conduct of contest of Third Party Claims, the Sellers shall not
settle or resolve any Tax proceeding without the Buyer's consent (which shall
not be unreasonably withheld or delayed) if such settlement or resolution would
reasonably be expected to cause the Buyer or Holdings to suffer a Tax liability
in a post-Closing period.
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(h) Subject to the confidentiality provisions of Section 5.1, from
and after the Closing Date, the Buyer shall deliver to the Sellers or their
designee (including for purposes of this sentence, the Sellers' Tax advisors),
as soon as practicable after the Sellers' reasonable request, such information
and data that are reasonably available concerning the pre-Closing Date
operations of Holdings and make available such knowledgeable employees of the
Buyer and Holdings as the Sellers may reasonably request, including providing
the appropriate power of attorney and the full and complete information and data
required by the Sellers' reasonable Tax and accounting information requests to
the extent reasonably available, in order to enable the Sellers and their
Affiliates to complete fully and file all Returns that they may be required to
file pursuant to Section 5.9(a), to respond to and contest audits by any
Governmental Authority pursuant to Sections 8.5 and 5.9(g), and to prosecute any
claim for refund or reduction to which the Sellers or their Affiliates are
entitled hereunder and to otherwise enable the Sellers and their Affiliates
fully to satisfy their accounting and Tax requirements.
(i) The Sellers on the one hand and the Buyer on the other hand
shall each be responsible and shall save, defend, indemnify and hold harmless
each other and their respective Affiliates for fifty percent (50%) of all sales,
use, gross receipts, registration, transfer, stamp duty, documentary, securities
transactions, real estate, and similar Taxes and notarial fees assessed or
payable in connection with the transfer of the Shares, regardless of whether
such Taxes become due or payable on or after the Closing Date, and each party
shall be responsible for all interest, penalties and additions to Taxes related
to such Taxes attributable to such party's action or inaction. The parties shall
cooperate and shall cause Holdings and the Company, as appropriate, to prepare
and timely file all Returns relating to such Taxes.
(j) All payments made pursuant to this Section 5.9 or Article VIII
shall be treated as adjustments to the Purchase Price for Tax purposes unless
otherwise prohibited by Law.
(k) The Purchase Price and any additional consideration paid
pursuant to Section 6.3 shall be allocated entirely to the Shares and neither
party shall take any position for Tax purposes inconsistent therewith.
Section 5.10 Directors and Officers
For a period of six (6) years beginning on the Closing Date, the
Buyer shall ensure that no provision of the certificate of incorporation and
bylaws, charter or equivalent creation or organizational documents of Holdings
in effect as of the date hereof relating to exculpation from liability of
directors and officers shall be amended, repealed or otherwise modified in any
manner that would adversely affect the rights thereunder of individuals who on
or prior to the Closing Date acted as directors or officers of Holdings. For a
period of six (6) years beginning on the Closing Date, the Buyer shall (in the
event the Buyer or its Affiliates directly or indirectly control more than 50%
of the Company Shares after the Offers) or, shall use commercially reasonable
efforts to (in all other cases), ensure that no provision of the certificate of
incorporation and bylaws, estatutos or equivalent creation or organizational
documents of the Company in effect as of the date hereof relating to
indemnification and exculpation from liability of directors and officers shall
be amended, repealed or otherwise modified in any manner that would adversely
affect the rights thereunder, with respect to occurrences prior to the Closing
Date, of individuals who, on or prior to the Closing Date, acted
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as directors or officers of the Company. Nothing in this Section 5.10 shall
require that Buyer or its employees or representatives breach their fiduciary
duties under applicable Law.
Section 5.11 Termination of Affiliate Contracts
(a) Upon Closing, the Sellers or their Affiliates shall give notice
to the Company of the termination of the Technical Assistance Agreement dated
June 30, 2001 by and between GTE Service Corporation and Telecomunicaciones
Movilnet, C.A., as amended, and the Agreement for Services dated January 1, 1992
by and between the Company and GTE Service Corporation, as amended, which
termination shall take effect 30 days, or such longer period as the Buyer shall
request but not longer than 60 days following the Closing Date, in each case
subject to any right of the Company to terminate such agreements earlier.
(b) If the Buyer acquires the Shares, then for so long as the Buyer
Beneficially Owns 50% or less of the issued and outstanding Company Shares, the
Sellers shall cause their Affiliates not to terminate or take any action or omit
to take any action likely to result in termination (other than for cause as
specified in such agreement) the contracts listed on Schedule 5.11(b) during the
term of such contracts as in effect on the date hereof (without giving effect to
any extension). If the Buyer Beneficially Owns more than 50% of the issued and
outstanding Company Shares, then at the Buyer's written request, the Sellers
shall cause their Affiliates and the Buyer shall cause the Company to enter into
a Software License Agreement substantially in the form attached hereto as
Exhibit A to supersede and replace all of the contracts listed or described on
Schedule 5.11(b), except for the International Security Operations Center
Agreement referred to in item 2 of Schedule 5.11(b).
Section 5.12 Non-Solicitation of Employees; Severance
(a) For the period beginning on the Closing Date and ending on the
date that is eighteen (18) months from the date thereof, the Sellers shall not,
and shall cause their Affiliates not to, directly or indirectly, seek to employ
any individual who is then employed by the Company or any of its Subsidiaries or
was so employed at any time within six months prior to the date the Sellers or
their Affiliates employs or seeks to employ such person, provided that
notwithstanding the foregoing, it shall not constitute a violation of this
Section 5.12 for the Sellers or any of their Affiliates to (i) seek to employ or
employ any person who on the date hereof is on the payroll of the Sellers or any
of their Affiliates or has been seconded by the Sellers or any of their
Affiliates to the Company or any of its Subsidiaries, or (ii) make a general
solicitation for employment or other services contained in a newspaper or other
periodical or on the radio, internet or similar media.
(b) If any of the Chief Executive Officer (Gerente General), Chief
Financial Officer (Gerente Financiero) or Chief Operating Officer (Gerente de
Operaciones) of the Company voluntarily resigns from (or is terminated by) the
Company at any time from the date hereof until the period ending ninety (90)
days after the closing of the Offers (but in no event later than two hundred and
ten (210) days after the Closing Date), the Sellers shall reimburse the Company
for all payments actually made by the Company to such officer as a result of
such resignation (or termination) (i) under any Company severance plans or
benefits in effect on the date hereof, including employment or change of control
agreements, and (ii) that are imposed directly on the Company by applicable Law
by reason of such resignation (or termination);
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provided, however, that Sellers' obligation to reimburse the Company for any
payments on account of resignation (or termination) hereunder (i) is conditioned
on the occurrence of the Closing, (ii) applies only to the extent such payments
have not been previously paid or reimbursed to the Company by the Sellers'
Parent (or any of its Affiliates), and are not otherwise required to be paid or
reimbursed to the Company by the Sellers' Parent or any of its Affiliates
pursuant to any other agreement, obligation or arrangement with the Company and
are paid or reimbursed to the Company pursuant thereto and (iii) shall be net of
any tax benefits to the Company as a result of such payment.
(c) (i) If any of the executive officers or directors of the Company
listed as such in the Company's Annual Report on Form 20-F filed on June 30,
2005, or any successors or replacements of any such officers or directors
holding office on the date hereof, should voluntarily resign from (or be
terminated by) the Company at any time from the date hereof until the date that
is ninety (90) days after the closing of the Offers, the Sellers shall reimburse
the Company for payments actually made by the Company to such executive officer
or director as a result of such resignation (or termination) under any Company
severance plan, benefit or arrangement (including, without limitation, any
change of control agreement) that is entered into (or amended so as to increase
the Company's obligations thereunder) at any time after the date hereof and
before the Closing Date (such new or increased Company obligations, collectively
the "Severance Payments"); provided, however, that the Sellers' obligation to
reimburse the Company for any Severance Payments hereunder shall be limited as
follows:
(A) if the Severance Payments (in the aggregate) are
less than or equal to US$ 5,000,000, the Sellers shall have no
reimbursement obligation with respect to such amounts; and
(B) if the Severance Payments (in the aggregate) are
more than US$ 5,000,000, the Sellers shall reimburse the Company for
an amount equal to the lesser of (i) fifty percent (50%) of the
amount by which the Severance Payments (in the aggregate) exceed US$
5,000,000 and (ii) US$ 7,500,000.
Severance Payments: (i) shall not include (x) amounts to the extent previously
paid or reimbursed to the Company by the Sellers' Parent or the Affiliates, and
(y) amounts that are required to be paid or reimbursed, by the Sellers' Parent
or any of its Affiliates pursuant to any other agreement, obligation or
arrangement with the Company or the Buyer, including without limitation Section
5.12(b), and are duly paid pursuant thereto, and (ii) shall be net of any tax
benefits to the Company as a result of the Severance Payments.
(d) The Sellers' obligation to reimburse the Company pursuant to clause
(b) or (c) of this Section 5.12 shall be conditioned upon (i) the Buyer or its
Affiliates purchasing and continuing to Beneficially Own the Company Shares and
(ii) the Buyer or the Company providing Sellers with reasonable supporting
documentation evidencing such payments.
(e) Reimbursements required to be made by the Sellers to the Company
pursuant to clause (b) or (c) of this Section 5.12 shall be made promptly
following the later to occur of (i) the Closing Date and (ii) the date on which
the corresponding payment is made by the Company to which the reimbursement
obligation relates.
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Section 5.13 Standstill
For the period beginning on the Closing Date and ending on the date
that is eighteen (18) months after the Closing Date, the Sellers shall not, nor
shall they permit any of their respective Affiliates (including Holdings or any
Person acting on their behalf), directly or indirectly, to (x) engage in any
transactions involving the equity or convertible securities of the Company,
including without limitation any acquisition of any Company Shares or ADSs, or
any material assets of the Company or any of its Subsidiaries, or (y) with
respect to the Company or any of its Subsidiaries, solicit proxies or
shareholder consents or participate in any such solicitation for any purpose.
Notwithstanding the foregoing, nothing contained in this Section 5.13 shall
prohibit the Sellers, Sellers' Parent or any of their Affiliates (including any
pension fund sponsored, maintained or managed by Sellers' Parents or any of
their Affiliates) from acquiring any securities of any Person (other than the
Company or any of its Subsidiaries), provided that (i) not more than twenty
percent (20%) of the assets of such Person consist of Company Shares or ADSs,
and (ii) such Person Beneficially Owns less than ten percent (10%) of the
Company Shares then issued and outstanding, including Company Shares underlying
ADSs.
Section 5.14 Sellers' Post-Closing Confidentiality Obligation
Except as required by Law, for a period of two (2) years following
the Closing, the Sellers shall not, and shall cause their Affiliates not to,
directly or indirectly, disclose to any Person or entity or use any proprietary
information owned by the Company or its Subsidiaries in any form, acquired prior
to the Closing Date, relating to the business and operations of the Company or
its Subsidiaries, including but not limited to any such information regarding
customers, vendors, suppliers, trade secrets, training programs, manuals or
materials, technical information, contracts, systems, procedures, mailing lists,
know-how, trade names, improvements, price lists, financial or other data
(including the revenues, costs or profits associated with any of the Company's
or its Subsidiaries' services), business plans, code books, invoices and other
financial statements, computer programs, software systems, databases, discs and
printouts, plans (business, technical or otherwise), customer and industry
lists, correspondence, internal reports, personnel files, sales and advertising
material, telephone numbers, names, addresses or any other compilation of
information, written or unwritten, which is or was used by the Company or its
Subsidiaries. Notwithstanding the foregoing, this Section 5.14 shall not apply
to any information which (i) at the time of disclosure or thereafter is
generally known to the public or generally known or available in the industry,
or (ii) was or becomes available to the Sellers or their Affiliates on a
non-confidential basis from a Person not otherwise bound by a confidentiality
agreement or duty with the Buyer or its Affiliates or the Company or its
Affiliates and is not otherwise prohibited from transmitting the information.
Section 5.15 Access to Information
The Sellers shall (and the Sellers shall cause Holdings to) afford
to the Buyer (and each of its Representatives) access (subject to the
confidentiality provisions of Section 5.1) during normal business hours and upon
reasonable notice during the period between the date hereof and the earlier of
the Closing and the termination of this Agreement, to all properties, books,
records, officers and employees of or directly related to Holdings (other than
properties, books, records, officers and employees of the Company or its
Subsidiaries). The Sellers shall request that the Company afford to the Buyer
(and each of its Representatives) access (subject to
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the execution of a confidentiality agreement reasonably acceptable to the
Company) during normal business hours and upon reasonable notice during the
period between the date hereof and the earlier of the Closing and the
termination of this Agreement, to all properties, books, records, officers and
employees of or related to the Company.
Section 5.16 Notices of Certain Events
The Buyer on the one hand, and the Sellers on the other hand, shall
promptly notify the other of:
(a) the receipt by the Buyer or the Sellers, as the case may be, of
any notice or other communication from any Person alleging that the Consent of
such Person is or may be required in connection with the transactions
contemplated by this Agreement; and
(b) any actions, suits, claims, investigations or proceedings
commenced or overtly threatened, in each case against, relating to or involving
or otherwise affecting the Buyer, the Sellers or any of their respective
Affiliates that relate directly to the consummation of the transactions
contemplated by this Agreement.
Section 5.17 Restructuring
At the Buyer's request made within ten (10) Business Days after the
date hereof, the Sellers will, as soon as practicable and not later than the
earlier of the Closing Date or the termination of this Agreement, cause Holdings
to sell and transfer or contribute the Held Company Shares (the "BV Transfer")
to a newly-formed Netherlands besloten vennootschap met beperkte
aansprakelijkbeid ("New BV") which is wholly owned by Holdings. The
consideration paid for the BV Transfer shall be equal to the Purchase Price and
shall be set forth in the transfer or contribution agreement as the fair market
value of the Held Company Shares. In connection with the BV Transfer, if
requested by the Buyer, the Sellers shall, as soon as practicable, request that
the SIEX registration be issued in the name of New BV or otherwise request that
SIEX acknowledge that the SIEX registration has been transferred to the New BV
as a result of the BV Transfer. Sellers shall use commercially reasonable
efforts to obtain the transfer of the SIEX registration to the New BV. If the
Buyer requests the BV Transfer, the Buyer, no later than the earlier of (x) five
(5) Business Days after the transfer of the SIEX registration to the New BV and
(y) ten (10) Business Days prior to the Closing Date, shall elect under the
ARSPA (as defined below) to purchase either the Shares or all of the shares of
stock of the New BV at the Closing; if the Buyer elects to purchase the shares
of New BV, (i) at Closing the Buyer shall purchase all of the shares of stock
held by Holdings in the New BV ("New BV Shares") instead of the Shares and (ii)
the purchase price to be paid at Closing by the Buyer for the New BV Shares
shall be equal to the Purchase Price and payable in US Dollars. The parties
agree that should the Buyer request the BV Transfer, the parties shall negotiate
in good faith and execute prior to Closing an Amended and Restated Stock
Purchase Agreement ("ARSPA") which (i) shall become effective only upon the
occurrence of the BV Transfer prior to Closing, (ii) if the Buyer elects to
purchase the New BV Shares, shall reflect that the seller is Holdings (which
shall become the "Seller" under the ARSPA in substitution for the Sellers) and
that the shares being sold and purchased pursuant to the ARSPA are the New BV
Shares, (iii) if the Buyer elects to purchase the Shares, shall provide that
Holdings wholly owns New BV and New BV owns the
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Company Shares, and (iv) shall include only such additional amendments as are
necessary in light of the foregoing.
ARTICLE VI
POST-CLOSING OFFERS
Section 6.1 Commencement of Offers
(a) Within ten Business Days following the Closing, the Buyer shall
commence, and publicly announce the commencement of, the Offers to acquire any
and all of the Other Company Shares. The terms of the Offers shall be as
provided in Section 6.2. If the conditions to the Offers specified in Sections
7.2(a), 7.2(b), 7.3(b) and 7.3(c) and such other conditions as may be permitted
by Section 6.2(c) are satisfied on the Expiration Date, the Buyer shall accept
for payment any and all Other Company Shares validly tendered into the Offers
(and not withdrawn) on or before the Expiration Date.
(b) The Buyer shall commence and conduct the Offers in accordance in
all material respects with applicable Securities Laws and shall in connection
therewith: (i) publish, deliver or otherwise provide Tender Offer Documents
relating to the Venezuelan Offer to the holders of the Other Company Shares
(other than ADSs), and (ii) file with the SEC the Tender Offer Documents. In the
case of each revision, amendment or supplement to the Tender Offer Documents,
the Buyer shall take all steps necessary to cause such Tender Offer Documents,
as so revised, amended or supplemented, to be filed with the appropriate
Securities Authorities and to be disseminated to the holders of the Other
Company Shares, in each case, as and to the extent required by applicable
Securities Laws.
(c) The Sellers hereby waive any right to receive or demand from the
Buyer or its Affiliates any additional consideration for the Held Company Shares
as a result of any adjustment, if any, to the Offer Price.
(d) The Sellers shall not and shall cause Sellers' Parent and each
Subsidiary of Sellers' Parent not to participate in the Offers.
Section 6.2 Terms of the Offers.
(a) The offer price in the Venezuelan Offer shall be the Bolivar
equivalent of US$ 3.0149 per Company Share, calculated using the official Banco
Central de Venezuela exchange rate as of the date determined in accordance with
applicable Law in Venezuela; provided that, if the Buyer so elects, and subject
to the approval of the CNV, the offer price in the Venezuelan Offer may be US$
3.0149 per Company Share. In either case, the offer price in the Venezuelan
Offer shall be payable in Bolivars or, at the election of the tendering
shareholder and to the extent permitted by applicable Law in Venezuela, in US
dollars in an amount equal to US$ 3.0149 per Company Share. The offer price in
the U.S. Offer shall be US$ 21.1041 per ADS.
(b) The offer price in each of the Venezuelan Offer and the U.S.
Offer referred to in Section 6.2(a) (collectively, the "Offer Price") shall be
equitably adjusted as required to reflect any reclassification,
recapitalization, share split or combination, exchange or
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readjustment of any of the Other Company Shares or any cash or stock dividends
that are proposed by the Board of Directors of the Company to the stockholders
of the Company after the date hereof and for which the applicable dividend
record date is prior to the final settlement date of the Offers.
(c) The obligations of the Buyer to consummate the Offers shall be
subject to no more than the following conditions: (i) the conditions to the
obligations of the Buyer hereunder set forth in Sections 7.2(a), 7.2(b), 7.3(b)
and 7.3(c) and, to the extent permitted by the CNV, 7.3(d), (f), (g), (h) and
(i), adjusted as may be necessary to reflect the timing of the closing of the
sale of the Other Company Shares pursuant to the Offers, and (ii) such other
conditions as are expressly permitted by Venezuelan Law or approved by the CNV.
ARTICLE VII
CONDITIONS TO CLOSING
Section 7.1 General
The respective obligations of the Sellers and the Buyer to
consummate the sale and purchase of the Shares at the Closing shall be subject
to the fulfillment, on or before the Closing Date, in the case of the Sellers,
of the conditions set forth in Sections 7.2 and 7.4, and in the case of the
Buyer, of the conditions set forth in Sections 7.2 and 7.3.
Section 7.2 Conditions to Obligations of Both Parties
(a) The Required Regulatory Approvals shall have been obtained.
(b) No Governmental Order shall have been enacted, entered,
promulgated, or enforced (or be pending) by any Governmental Authority in
Venezuela, the United States of America or any country where the Company has
material operations or a material license that prohibits, restrains, or enjoins
(or seeks to prohibit, restrain or enjoin) the consummation of the closing of
the sale and purchase of the Shares pursuant to this Agreement or the Offers, or
shall have been enacted, entered, promulgated or enforced (or be pending or
threatened) by any applicable Governmental Authority which would subject (or
seeks to subject) any director or officer of Holdings, Sellers' Parent or the
Buyer to the risk of criminal sanction, including imprisonment or fines.
Section 7.3 Conditions to Obligations of the Buyer
(a) (i) The Sellers shall have performed in all material respects
all of their obligations hereunder required to be performed by them at or prior
to the Closing Date, (ii) the representations and warranties of the Sellers
contained in this Agreement qualified as to materiality or Material Adverse
Effect (and the representations and warranties contained in Section 3.3 (Shares
and Capital Stock)) shall be true and correct in all respects and the other
representations and warranties of the Sellers contained in this Agreement not so
qualified shall be true in all material respects, in each case at and as of the
date hereof and at and as of the Closing Date, as if made at and as of such time
(except to the extent in either case that such representations or warranties
speak as of another date, in which case such representations and warranties
shall be true and correct as of such date), and (iii) the Buyer shall have
received a
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certificate signed by the President or a Vice President of each of the Sellers
certifying as to compliance with clauses (i) and (ii) above.
(b) Since the date hereof, there shall not have occurred and be
continuing:
(i) any general suspension of trading in, or limitation on
prices for securities on the New York Stock Exchange;
(ii) a declaration of a banking moratorium or any suspension
of payment in respect of banks in the United States or Venezuela, whether
mandatory or not mandatory; or
(iii) commencement of a war, armed hostilities, coup d'etat,
collapse of the government or other national or international crisis
involving Venezuela or acts of terrorism, in any case which materially
disrupts the normal operations of the Company.
(c) Since December 31, 2005, there shall have occurred no Material
Adverse Effect with respect to the Company.
(d) Since December 31, 2004: (A) the Company shall have filed all
reports required to be filed by it pursuant to the Exchange Act and the rules
and regulations of the CNV, as applicable, and (B) the Company's filings with
the SEC and the CNV shall not have contained at the time of their respective
filing (or if any filing has been amended prior to the date hereof, at the time
of such amended filing) untrue statements of material facts and shall not have
omitted to state material facts required to be stated therein in order to make
the statements therein, in light of the circumstances in which they were made,
not misleading.
(e) When filed, the financial statements of the Company and its
Subsidiaries included in the SEC Filings and the CNV Filings made on or after
December 31, 2004: (i) shall have complied in all material respects with
applicable accounting requirements and with the applicable published rules and
regulations of the SEC or CNV with respect thereto, and (ii) shall fairly
present in all material respects the consolidated financial position and the
consolidated results of operations and cash flows of the Company and its
Subsidiaries at the date and for the period or periods covered thereby.
(f) The Company and its Subsidiaries shall not have, at any time
after the date of this Agreement and prior to the Closing Date, adopted or
undertaken any material action or actions intended to obstruct (or that has had,
or is reasonably likely to have, the effect of obstructing) the transactions
contemplated by this Agreement or the Offers in any material respects, or
reasonably likely to have a material adverse effect on the Company and its
Subsidiaries taken as a whole, including the following:
(i) adjusted, split, combined, recapitalized or reclassified
its capital stock or ownership interests or any class thereof;
(ii) proposed (which proposal is made by the Company's Board
of Directors for approval by the stockholders with a dividend record date
prior to the proposed settlement date for the Offers), obtained
shareholder approval of, or paid, any
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dividend or distribution on any shares of its capital stock, ownership
interests or any securities or obligations convertible into or
exchangeable for any shares of its capital stock or ownership interests,
other than cash dividends proposed by the Board of Directors of the
Company on February 23, 2006;
(iii) redeemed, purchased or otherwise acquired, directly or
indirectly (including, without limitation, through labor related trusts or
other trusts or entities controlled or funded by the Company), any shares
of its capital stock, ownership interests or any securities or obligations
convertible into or exchangeable for any shares of its capital stock or
ownership interests, other than redemptions, purchases or acquisitions of
Company Shares for no more than the then market value thereof to meet the
Company's obligations under employee stock option plans and other existing
employee stock compensation plans, awards or agreements in an amount which
in the aggregate does not exceed three percent (3%) of the Company Shares
(including Company Shares underlying the ADSs) issued and outstanding as
of the date hereof;
(iv) granted any Person(s) any right or option to acquire any
shares of its capital stock or ownership interests, except for rights and
options exercisable for a number of shares or ownership interests of the
Company in an amount which in the aggregate and on a fully-diluted basis,
when taken together with any other issuances of its capital stock,
ownership interest or any securities instruments or obligations
convertible into or exchangeable or exercisable for any shares of its
capital stock, ownership interests or such securities, does not exceed
three percent (3%) of the Company Shares (including Company Shares
underlying the ADSs) issued and outstanding as of the date hereof (it
being agreed that all Company Shares currently held in the trust for
Excellence Award program shall be deemed not granted as of the date
hereof);
(v) altered or proposed to alter any material term of any
outstanding security, including employee stock options;
(vi) issued, delivered or sold or agreed to issue, deliver or
sell any additional shares of its capital stock, ownership interests or
any securities, instruments or obligations convertible into or
exchangeable or exercisable for any shares of its capital stock, ownership
interests or such securities, except for shares of capital stock,
ownership interests, exchangeable or convertible securities, instruments
or obligations in an amount that in the aggregate and on a fully-diluted
basis, when taken together with grants of any right or option to acquire
any shares of its capital stock or ownership interests, does not exceed
three percent (3%) of the Company Shares (including Company Shares
underlying the ADSs) issued and outstanding as of the date hereof;
(vii) sold, transferred, leased, pledged, mortgaged,
encumbered or otherwise disposed of any amount of its property or assets
that is material to the Company and its Subsidiaries, taken as a whole,
other than in the ordinary course of business;
(viii) made any material changes to the estatutos of the
Company;
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(ix) incurred or committed to incur any material debt or
guarantee the material obligations of third parties (other than its
Subsidiaries) other than in the ordinary course of business;
(x) recommended on a Schedule 14d-9 (or similar form under
applicable Law), authorized or entered into (A) any merger, consolidation,
business combination, material joint venture, material strategic alliance
or similar arrangement with any Person (other than the Buyer, either of
the Buyer Parents or any of their respective Affiliates in furtherance of
the transactions contemplated hereby), or (B) a liquidation or dissolution
of the Company or any of its material Subsidiaries;
(xi) authorized or entered into any agreement or arrangement
for the acquisition of a material amount of assets or securities, or any
waiver, release or relinquishment of any material contract or comparable
rights of the Company and its Subsidiaries, taken as a whole, or any
agreement contemplating any of the foregoing or any comparable event, in
each case other than in the ordinary course of business or in exchange for
reasonably equivalent value;
(xii) taken or funded (or transferred into escrow any amounts
in cash, securities or other assets required to fund), entered into,
amended, terminated, or increased benefits under, any employment,
severance, employee benefit or similar agreement, arrangement or plan
(other than in the ordinary course of business) in each case to provide
for increased benefits to the employees as a result of or in connection
with the transactions contemplated by this Agreement or the Offers or any
other change of control of the Company, which in the aggregate result in a
material increase in the obligations of the Company and its Subsidiaries,
taken as a whole, to their respective employees as compared to their
obligations to employees as of the date hereof;
(xiii) reduced its paid-in capital; or
(xiv) agreed in writing or called a shareholders' meeting to
take any of the foregoing actions, but only if (a) with respect to any
action agreed to in writing, such action has not been cancelled or
revoked, and (b) with respect to a shareholders' meeting, (1) the
resolution calling such meeting has not been cancelled or revoked, or (2)
the meeting having taken place, the action has been approved by the
shareholders.
(g) There shall not be pending any action, proceeding, application
or claim by any Person(s) in connection with the transactions contemplated
hereby which seeks to obtain any damages from the Buyer, the Company or their
respective Affiliates, which damages are, in the aggregate, material in respect
of the size of the Company and its Subsidiaries, and such action, proceeding,
application or claim is reasonably likely to succeed.
(h) No statute, rule, regulation, order, judgment, decree or
injunction from any Governmental Authority has been enacted, promulgated,
entered, enforced or become applicable which expropriates, nationalizes,
confiscates or otherwise takes possession or control of the Company, the
Company's business or operations or any material portion of the Company's assets
(or seeks to do any of the foregoing).
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(i) The Company and its Subsidiaries shall hold all wireline and
wireless concessions issued by the appropriate Governmental Authority that are
required for the conduct of their respective wireline and wireless businesses,
and for the operation and holding of their wireline and wireless assets
(together with any renewals, extensions or modifications thereof and any
additions thereto made as of the Closing Date). Each such concession shall have
been duly issued and shall be valid and in full force and effect, and no
proceeding seeking the suspension or cancellation of any such concession shall
have been commenced by a Governmental Authority and shall be continuing.
(j) Each of the directors and officers of Holdings shall have been
removed or shall have resigned effective as of the Closing Date and each of the
employees of any Affiliate of the Sellers who are members of the Board of
Directors of the Company (including both directors and alternates (suplentes))
shall have irrevocably tendered their resignations to the Company, as provided
for in Section 5.5, it being understood that this Section 7.3(j) does not
require the resignation of the Chairman of the Board of the Company.
(k) This Agreement and the transactions contemplated hereby shall
not conflict with or result in the violation of, or constitute (with due notice
or lapse of time or both) a default under, or give rise to a right of
termination, cancellation or acceleration of any obligation under any contract
or agreement to which the Company is a party or any of its properties or assets
is bound, except (i) any contract or agreement set forth in Schedule 7.3(k) with
Sellers' Parent or its Affiliates or (ii) such conflicts, violations, defaults
or rights that would not have, individually or in the aggregate, a material
adverse effect on the business or operations of the Company and its Subsidiaries
taken as a whole.
Section 7.4 Conditions to Obligations of the Sellers
(i) The Buyer shall have performed in all material respects all of
its obligations hereunder required to be performed by them at or prior to the
Closing Date, (ii) the representations and warranties of the Buyer contained in
this Agreement shall be true in all material respects at and as of the date
hereof and at and as of the Closing Date (except to the extent in either case
that such representations or warranties speak as of another date) and (iii) the
Sellers shall have received a certificate signed by the President or a Vice
President of the Buyer certifying as to compliance with clauses (i) and (ii)
above.
Section 7.5 Pension Liabilities and CT Transaction
Anything to the contrary in this Agreement notwithstanding, Buyer
understands and acknowledges (i) that Sellers make no representation or warranty
of any kind with respect to the Company's Pension Liabilities or the CT
Transaction, and the Company's Pension Liabilities and the CT Transaction shall
not be taken into account in determining whether a representation or warranty
has been breached, (ii) such Pension Liabilities and the CT Transaction shall
not be taken into account in determining whether a condition to the Buyer's
obligation to close under this Agreement (including without limitation under
Section 7.3(d) and (e)) has been met and shall on no account give rise to a
Material Adverse Effect, and (iii) Sellers shall have no indemnification
obligation with respect to the Pension Liabilities or the CT Transaction.
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ARTICLE VIII
INDEMNIFICATION
Section 8.1 Survival
(a) The representations and warranties of the Sellers and the Buyer
contained in this Agreement shall survive until the date that is eighteen (18)
months after the Closing Date, provided that the representations and warranties
contained in Section 3.3 (Shares of Capital Stock) and Section 3.5 (Taxes) shall
survive until thirty (30) days beyond the expiration of the applicable statute
of limitations (after giving effect to any extension thereof).
(b) The Sellers' obligation to indemnify the Buyer Indemnified
Parties from and against Losses arising from a breach of the following covenants
shall survive as follows: (i) Sections 5.1 and 5.2 for eighteen (18) months from
the Closing Date, (ii) Sections 5.11, 5.12, 5.13 and 5.14 for thirty (30) days
beyond expiration of the period stated therein, (iii) Section 5.5, until the
resignations of the directors and alternates (suplentes) referenced in Section
5.5 are approved by the shareholders in accordance with applicable Law, and (iv)
Sections 5.3, 5.4, 5.6, 5.15 and 5.16 shall not survive the Closing. The Buyer's
obligation to indemnify the Seller Indemnified Parties from and against any
Losses arising from a breach of the following covenants shall survive as
follows: (i) Sections 5.1 and 5.2 for eighteen (18) months from the consummation
or termination of the Offers, (ii) Section 5.10 for thirty (30) days beyond
expiration of the period stated therein, and (iii) Sections 5.3 and 5.16 shall
not survive Closing. The indemnification obligations of the Sellers and the
Buyer arising from a breach of any covenant or agreement contained in this
Agreement other than those set forth in the two preceding sentences shall
survive until thirty (30) days beyond the expiration of the applicable statute
of limitations on an action for breach thereof.
(c) For the avoidance of doubt, the time limitations set forth in
this Section 8.1 do not apply to the Sellers' indemnity obligations pursuant to
Section 8.7.
Section 8.2 Indemnification by the Sellers
The Sellers shall save, defend, indemnify and hold harmless the
Buyer and its Affiliates (including Holdings) and the respective
Representatives, successors and assigns of each of the foregoing (collectively,
the "Buyer Indemnified Parties") from and against any and all losses, damages,
liabilities, Taxes, deficiencies, claims, interest, awards, judgments,
penalties, costs and expenses (including reasonable attorneys' fees, costs and
other out-of-pocket expenses incurred in investigating, preparing or defending
the foregoing) (hereinafter collectively, "Losses"), incurred, sustained or
suffered by any of the foregoing to the extent arising out of or resulting from:
(a) any breach of any representation or warranty made by the Sellers
contained in this Agreement; and
(b) any breach of any covenant or agreement by the Sellers contained
in this Agreement if and to the extent that it survives the Closing.
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Section 8.3 Indemnification by the Buyer
The Buyer shall save, defend, indemnify and hold harmless the
Sellers and their Affiliates and the respective Representatives, successors and
assigns of each of the foregoing (collectively, the "Seller Indemnified
Parties") from and against any and all Losses incurred, sustained or suffered by
any of the foregoing to the extent arising out of or resulting from:
(a) any breach of any representation or warranty made by the Buyer
contained in this Agreement;
(b) any breach of any covenant or agreement by the Buyer contained
in this Agreement if and to the extent that it survives the Closing; and
(c) any and all Taxes resulting from transactions or actions taken
by the Buyer, or any Person who immediately after the Closing is an Affiliate
thereof, which are outside the ordinary course of business and which are taken
by such Person on the Closing Date but after the Closing.
Section 8.4 [Intentionally Omitted]
Section 8.5 Procedures
(a) In order for a Buyer Indemnified Party or Seller Indemnified
Party (the "Indemnified Party") to be entitled to any indemnification in respect
of a Loss based on a claim or demand (including a notice of Tax audit) made by
any third Person against the Indemnified Party (a "Third-Party Claim"), such
Indemnified Party shall deliver written notice thereof to the party or parties
against whom indemnity is sought (collectively, the "Indemnifying Party")
promptly after receipt by such Indemnified Party of written notice of the
Third-Party Claim, describing in reasonable detail the facts giving rise to any
claim for indemnification hereunder, the amount or method of computation of the
amount of such claim (if known) and such other information with respect thereto
as the Indemnifying Party may reasonably request. The failure to provide such
notice, however, shall not release the Indemnifying Party from any of its
obligations under this Article VIII except and only to the extent, if any, that
the Indemnifying Party is materially prejudiced by such failure.
(b) The Indemnifying Party shall have the right, upon written notice
to the Indemnified Party within thirty (30) days of receipt of written notice
from the Indemnified Party of the commencement of such Third-Party Claim, to
assume the defense thereof at the expense of the Indemnifying Party with counsel
selected by the Indemnifying Party and reasonably satisfactory to the
Indemnified Party. If the Indemnifying Party assumes the defense of such
Third-Party Claim, the Indemnified Party shall have the right to employ separate
counsel and to participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of the Indemnified Party; provided that if
in the reasonable opinion of counsel for the Indemnified Party, there is an
actual or potential conflict of interest between the Indemnified Party and the
Indemnifying Party, the Indemnifying Party shall be responsible for the
reasonable fees and expenses of one counsel to such Indemnified Party in
connection with such defense. If the Indemnifying Party assumes the defense of
any Third-Party Claim, the Indemnified Party shall cooperate with the
Indemnifying Party in such defense and use commercially reasonable
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efforts to 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 that the Indemnified Party shall not be
required to make available any such records, materials or information that is
subject to the attorney-client privilege. If the Indemnifying Party assumes the
defense of any Third-Party Claim and agrees that such Third-Party Claim is fully
indemnified hereunder, the Indemnified Party shall not admit any liability with
respect to, or settle, compromise or discharge, or offer to compromise, settle
or discharge, such Third-Party Claim without the Indemnifying Party's prior
written consent (not to be unreasonably withheld or delayed) unless the
Indemnifying Party withdraws from the defense of such Third-Party Claim or
unless a final judgment from which no appeal may be taken by or on behalf of the
Indemnifying Party is entered against the Indemnified Party for such Third-Party
Claim. If the Indemnified Party assumes the defense of any such claim or
proceeding pursuant to this Section 8.5 and the Indemnifying Party agrees that
such claim or proceeding is fully indemnified hereunder, the Indemnified Party
shall not settle such claim or proceeding prior to a final judgment thereon or
forgo any appeal with respect thereto without the prior written consent of the
Indemnifying Party, which consent shall not be unreasonably withheld or delayed.
Without the prior written consent of the Indemnified Party, which shall not be
unreasonably withheld or delayed, the Indemnifying Party will not enter into any
settlement of or consent to the entry of judgment in connection with any
Third-Party Claim that (i) would lead to liability or create any financial or
other obligation on the part of the Indemnified Party or that would otherwise
have a material adverse effect on the Indemnified Party, including a material
adverse effect on the ability of the Indemnified Party to operate its business
in the manner in which such business is then being operated, (ii) does not
contain, as an unconditional term thereof, the release of the Indemnified Party
from all liability in respect of such Third-Party Claim and the dismissal of
such Third-Party Claim with prejudice and without the imposition of any
financial or other obligation on the part of the Indemnified Party or (iii)
admits the liability or fault of the Indemnified Party (the "Settlement
Requirements") (it being understood that the Settlement Requirements do not
apply to Tax matters). If a settlement offer solely for money damages (and
otherwise satisfying the Settlement Requirements) is made to resolve a
Third-Party Claim and the Indemnifying Party notifies the Indemnified Party in
writing of the Indemnifying Party's willingness to accept the settlement offer
and pay the amount called for by such offer without reservation of any rights or
defenses against the Indemnified Party and if the Indemnified Party fails to
consent to such settlement offer within ten (10) calendar days after its receipt
of such notice, the Indemnifying Party may continue to contest such claim, free
of any participation by the Indemnified Party, and the amount of any ultimate
liability with respect to such Third-Party Claim that the Indemnifying Party has
an obligation to pay hereunder shall be limited to the lesser of (x) the amount
of the settlement offer that the Indemnified Party declined to accept plus
reasonable attorneys' fees, costs and other out-of-pocket expenses incurred by
the Indemnified Party in investigating or defending the Third-Party Claim
through the date of its rejection of the settlement offer or (y) the aggregate
Losses of the Indemnified Party with respect to such claim. The party
controlling any defense shall keep the other party advised of the status of such
action, suit, proceeding or claim and the defense thereof and shall consider in
good faith all reasonable recommendations made by the other party with respect
thereto.
(c) In the event any Indemnified Party should have a claim against
any Indemnifying Party hereunder that does not involve a Third-Party Claim, the
Indemnified Party
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shall deliver written notice of such claim promptly after such Indemnified Party
has actual knowledge of such claim to the Indemnifying Party, describing in
reasonable detail the facts giving rise to such claim for indemnification
hereunder, the amount or method of computation of the amount of such claim (if
known) and such other information with respect thereto as the Indemnifying Party
may reasonably request. The failure to provide such notice, however, shall not
release the Indemnifying Party from any of its obligations under this Article
VIII except and only to the extent, if any, that the Indemnifying Party is
materially prejudiced by such failure. The Indemnifying Party shall have thirty
(30) days after receipt of written notice of any claim pursuant to this Section
8.5(c) to (i) agree to the amount or method of determination set forth in such
claim and to pay such amount to such Indemnified Party, or (ii) provide the
Indemnified Party with notice (an "Indemnification Dispute Notice") that it
disagrees with the amount or method of determination set forth in such claim or
believes it is not obligated or liable with respect to such claim. If the
Indemnifying Party has timely delivered an Indemnification Dispute Notice, the
Indemnifying Party and the Indemnified Party shall, during a period of thirty
(30) days from the Indemnified Party's receipt of such Indemnification Dispute
Notice, negotiate in good faith to achieve resolution of such dispute.
Section 8.6 Limits on Indemnification
No claim may be asserted against any party for breach of any
representation, warranty or covenant contained herein, unless written notice of
such claim is received by such party, describing in reasonable detail the facts
and circumstances with respect to the subject matter of such claim on or prior
to the date on which the representation, warranty or covenant on which such
claim is based ceases to survive as set forth in Section 8.1, in which case such
representation, warranty or covenant shall survive as to such claim until such
claim has been finally resolved by final non-appealable judgment.
Section 8.7 Special Indemnity
The Sellers shall save, defend, indemnify and hold harmless the
Buyer Indemnified Parties from and against any and all Losses, including for the
avoidance of doubt, Taxes, incurred, sustained or suffered by any of the
foregoing to the extent arising out of or resulting from the business and
operations and any other transactions of Holdings prior to the Closing (and with
respect to Taxes, on or prior to the Closing Date). The Buyer shall save,
defend, indemnify and hold harmless the Seller Indemnified Parties from and
against any and all Losses incurred, sustained or suffered by any of the
foregoing to the extent arising out of or resulting from the business and
operations and any other transactions of Holdings subsequent to the Closing (and
with respect to Taxes, subsequent to the Closing Date).
Section 8.8 Exclusivity
After the Closing, except for the rights of the parties hereunder to
seek specific performance or other equitable relief and except in the case of
fraud, in which case the Buyer Indemnified Parties and the Seller Indemnified
Parties reserve any and all rights and remedies available to them, the
indemnities set forth in this Article 8 shall be the exclusive remedies of the
Buyer Indemnified Parties and the Seller Indemnified Parties, for any breach of
any representation or warranty or breach of any covenant, agreement or condition
contained in this Agreement, and such parties shall not be entitled to a
rescission of this Agreement or to any
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further indemnification rights or claims of any nature whatsoever in respect
thereof, all of which the Buyer (on behalf of the Buyer Indemnified Parties) and
the Sellers (on behalf of the Seller Indemnified Parties) hereby waive to the
fullest extent permitted by applicable law.
Section 8.9 Disclaimer of Implied Warranties
It is the explicit intent and understanding of each party hereto
that no party hereto nor any of such party's Affiliates or Representatives is
making any representation or warranty whatsoever, oral or written, express or
implied, as to the accuracy or completeness of any information regarding the
Sellers, Holdings or the Company, including without limitation any financial
statements, estimates or projections of financial results or other financial
information regarding the Company, except as expressly set forth in this
Agreement, and no party hereto is relying on any statement, representation or
warranty, oral or written, express or implied, made by any other party hereto or
such other party's Affiliates or Representatives, except for the representations
and warranties expressly set forth in this Agreement.
Section 8.10 Obligations Joint and Several
All obligations of the Sellers under this Agreement, including all
obligations of payment and all obligations of indemnification, shall be joint
and several obligations.
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 Fees and Expenses
Except as otherwise provided herein, all fees and expenses incurred
in connection with or related to this Agreement and the transactions
contemplated hereby (including fees and disbursements of attorneys, accountants
and financial advisors) shall be paid by the party incurring such fees or
expenses, whether or not such transactions are consummated.
Section 9.2 Amendment and Modification
This Agreement may not be amended, modified or supplemented in any
manner, whether by course of conduct or otherwise, except by an instrument in
writing signed on behalf of each party.
Section 9.3 Waiver
No failure or delay of any party in exercising any right or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such right or power, or any course of conduct, preclude any
other or further exercise thereof or the exercise of any other right or power.
The rights and remedies of the parties hereunder are cumulative and are not
exclusive of any rights or remedies that they would otherwise have hereunder.
Any agreement on the part of any party to any such waiver shall be valid only if
set forth in a written instrument executed and delivered by a duly authorized
officer on behalf of such party.
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Section 9.4 Notices
All notices and other communications hereunder shall be in writing
and shall be deemed duly given (a) on the date of delivery if delivered
personally, or if by facsimile, upon written confirmation of receipt by
facsimile or otherwise; or (b) on the first Business Day following the date of
dispatch if delivered by an internationally recognized next-day courier service.
All notices hereunder shall be delivered to the addresses set forth below, or
pursuant to such other instructions as may be designated in writing by the party
to receive such notice:
(a) if to the Sellers to:
GTE Venezuela S.a.r.l.
c/o Verizon Communications Inc.
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxxxx Xxxxx, Esq.
Facsimile: (000) 000-0000
and
Verizon International Holdings Inc.
c/o Verizon Communications Inc.
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxxxx Xxxxx, Esq.
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxx, Xxxxxx-Xxxxxxx, Colt & Mosle LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxx
Xxxxxxxx Xxxxxxx
Facsimile: (000) 000-0000
(b) if to the Buyer, to:
Oarsman Investments B.V.
c/o America Movil, S.A. de C.V.
Xxxx Xxxxxxx Xx. 000
Xxxxxxx Xxxxxxx
00000 Xxxxxx, X.X., Xxxxxx
Attention: Xxxxxxxxx Xxxxx Xxxxxxx, Esq.
Facsimile: (5255) 2581-4440
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and
Oarsman Investments B.V.
c/o Telefonos de Mexico S.A. de C.V.
Paseo del Rio No. 186
Colonia Chimalistac, San Angel
01070 Mexico, D.F., Mexico
Attention: Xxxxxx Xxxxxxxxx Xxxxxxx, Esq.
Facsimile: (5255) 5592-6687
with a copy (which shall not constitute notice) to:
Xxxxxxx Xxxx & Xxxxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Boston
Xxxxxxx X. Xxxx
Facsimile: (000) 000-0000
and
Xxxxxx Xxxxxxxx Xxxxx & Xxxxxxxx LLP
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxx, Esq.
Facsimile: (000) 000-0000
Section 9.5 [Intentionally Omitted]
Section 9.6 Entire Agreement
This Agreement and the other agreements and instruments delivered in
connection herewith constitute the entire agreement, and supersede all prior
written agreements, arrangements, communications and understandings and all
prior and contemporaneous oral agreements, arrangements, communications and
understandings among the parties with respect to the subject matter of this
Agreement.
Section 9.7 No Third-Party Beneficiaries
This Agreement shall be binding upon and inure solely to the benefit
of each of the parties and their respective successors and permitted assigns,
and nothing in this Agreement, express or implied, is intended to or shall
confer upon any other Person any legal or equitable right, benefit or remedy of
any nature under or by reason of this Agreement, except as provided in Article
VIII.
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Section 9.8 Governing Law
THIS AGREEMENT AND ALL DISPUTES OR CONTROVERSIES ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
Section 9.9 Submission to Jurisdiction; Service of Process
(a) Each party, including each of Sellers' Parent and Buyer Parents,
hereby irrevocably and unconditionally submits to the exclusive jurisdiction of
any United States federal court located in the County of New York, New York (the
"New York Federal Court"), and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Agreement, or for
recognition or enforcement of any judgment, and each of the parties hereto,
including Sellers' Parent and Buyer Parents, hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in the New York Federal Court.
(b) Each of the parties hereby, including each of Sellers' Parent
and Buyer Parents, irrevocably and unconditionally waives, to the fullest extent
it may legally and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement in the New York Federal Court. Each of the
parties hereto, including each of Sellers' Parent and Buyer Parents, hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in the New
York Federal Court and all right to a trial by Jury.
(c) Each of Buyer and Buyer Parents hereby irrevocably and
unconditionally appoints CT Corporation as agent for service of process in the
State of New York in connection with this Agreement. Each party, including each
of Sellers' Parent and Buyer Parents, agrees that service of process in any
suit, action or proceeding arising out of or relating to this Agreement may be
effected by sending a copy thereof by an internationally recognized next-day
courier to its address as set forth in Section 9.4 (or in the case of service
made on any Buyer or Buyer Parent, at Sellers' option, to the agent for service
of process referred to in the preceding sentence). Nothing in this Agreement
will affect the right of any party to this Agreement to serve process in any
other manner permitted by law.
Section 9.10 Specific Performance
Without limiting the rights of any party hereto to pursue other
legal and equitable rights available to such party for any other party's failure
to perform its obligations under this Agreement, each party hereto, including
each of Sellers' Parent and Buyer Parents, acknowledges and agrees that the
remedy at law for any failure to perform its obligations hereunder would be
inadequate and that each other party shall be entitled to specific performance,
injunctive relief or other equitable remedies in the event of any such failure.
To the extent any party may be entitled to the benefit of any provision of law
requiring any party in any suit, action or proceeding arising out of or in
connection with this Agreement or any of the transactions contemplated hereby to
post security for litigation costs or otherwise post a
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performance bond or guaranty or to take any similar action, each party hereby
irrevocably waives such benefit in each case to the fullest extent now or
hereafter permitted under the laws of any such other jurisdiction.
Section 9.11 Waiver of Immunity
To the extent that any party, including each of Sellers' Parent and
Buyer Parents, has or hereafter may be entitled to claim or may acquire, for
itself or any of its assets, any immunity from suit, jurisdiction of any court
or from any legal process (whether through service or notice, attachment prior
to judgment, attachment in aid of execution, or otherwise), it hereby
irrevocably waives such immunity in respect of its obligations hereunder to the
extent permitted by applicable Law and, without limiting the generality of the
foregoing, agrees that the waivers set forth in this Section 9.11 shall be
effective to the fullest extent now or hereafter permitted under the Foreign
Sovereign Immunities Act of 1976 of the United States of America and are
intended to be irrevocable for purposes of such Act.
Section 9.12 [Intentionally Omitted]
Section 9.13 Personal Liability
Except for the obligations of Sellers' Parent and Buyer Parents
pursuant to Section 9.20, this Agreement shall not create or be deemed to create
or permit any personal liability or obligation on the part of any direct or
indirect stockholder of the Sellers, Holdings or the Buyer or any officer,
director, employee or Representative of any party hereto.
Section 9.14 Assignment; Successors
Neither this Agreement nor any of the rights, interests or
obligations under this Agreement may be assigned or delegated, in whole or in
part, by operation of law or otherwise, by any party without the prior written
consent of the other parties which consent shall not be unreasonably withheld,
and any such assignment without such prior written consent shall be null and
void; provided that the Sellers may assign any of their rights under this
Agreement, including the right to receive the Purchase Price, to one or more
Affiliates of the Sellers without the consent of the Buyer; and provided still
further, that no such assignment shall transfer or in any way modify or limit
the assignor's obligations hereunder. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of, and be enforceable by,
the parties and their respective successors and permitted assigns.
Section 9.15 Currency
All references to "dollars" or "$" or "US$" in this Agreement refer
to United States dollars, which is the currency to be used for all payments to
Sellers pursuant to this Agreement.
Section 9.16 Severability
Whenever possible, each provision or portion of any provision of
this Agreement shall be interpreted in such manner as to be effective and valid
under applicable Law, but if any
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provision or portion of any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable Law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or portion of any provision in such jurisdiction, and this
Agreement shall be reformed, construed and enforced in such jurisdiction as if
such invalid, illegal or unenforceable provision or portion of any provision had
never been contained herein.
Section 9.17 Counterparts
This Agreement may be executed in two or more counterparts, all of
which shall be considered one and the same instrument and shall become effective
when one or more counterparts have been signed by each of the parties and
delivered to the other party(s).
Section 9.18 Facsimile Signature
This Agreement may be executed by facsimile signature and a
facsimile signature shall constitute an original for all purposes.
Section 9.19 Termination
(a) This Agreement may be terminated at any time prior to the
Closing by either the Sellers or the Buyer if the Closing shall not have
occurred by the date which is ninety (90) days following the date hereof;
provided that the term of this Agreement may be extended on one or more
occasions for an additional cumulative period of ninety (90) days in the
aggregate, by either the Sellers or the Buyer if the Required Regulatory
Approvals shall not have been obtained within five (5) Business Days prior to
the end of such initial period; and provided, further, that neither the Sellers
nor the Buyer may extend the period or terminate this Agreement pursuant to this
sentence if the failure of Closing to occur by such date is attributable to a
breach by the Sellers or the Sellers' Parent, on the one hand, or the Buyer or
the Buyer Parents, on the other hand, respectively, of any of their material
obligations hereunder. Notwithstanding the foregoing, the Buyer shall have the
right to terminate this Agreement before the expiration of the 90-day period, or
any extension thereof, if there is a failure of any of the conditions to the
Buyer's obligation to close set forth in paragraphs (c), (d), (e), (f), (h) or
the first sentence of (i) of Section 7.3, provided that such failure is
incapable of being cured before the expiration of the 90-day period. Subject to
the extension rights provided in the initial sentence of this Section 9.19(a),
the party seeking to terminate this Agreement pursuant to this Section 9.19(a)
shall (i) first discuss with the other party the reasons that Closing has not
occurred and whether an extension should be agreed, and (ii) if an extension is
not agreed, give prompt written notice of such termination to the other party.
(b) This Agreement may be terminated by the Sellers by notice in
writing delivered to the Buyer, effective immediately upon delivery of such
notice, in the event that either of the Offers shall be commenced prior to the
occurrence of the Closing.
(c) This Agreement may also be terminated:
(i) by either the Buyer or the Sellers if (A) a Law shall have
been enacted, entered or promulgated prohibiting the consummation of the
transactions
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contemplated hereby (including the Offers) or (B) a Governmental Order
shall have been enacted, entered, promulgated, or enforced by a
Governmental Authority in Venezuela, the United States of America or any
other country where the Company has material operations or material
licenses that prohibits, restrains or enjoins the consummation of the
Closing pursuant to this Agreement or the Offers, and such Governmental
Order shall have become final and non-appealable, and the party seeking to
terminate this Agreement pursuant to clause (B) of this paragraph (c)(i)
of this Section 9.19 shall have used its commercially reasonable efforts
to remove such Governmental Order;
(ii) by the Buyer if the Sellers have breached any
representation, warranty, covenant or agreement contained in this
Agreement such that the conditions set forth in Section 7.3(a) would not
be satisfied as of any date following the date hereof; provided however
that the Buyer may not terminate this Agreement pursuant to this Section
9.19(c)(ii) unless any such breach has not been cured within twenty (20)
Business Days after written notice thereof by the Buyer to the Sellers
informing the Sellers of such breach, it being understood and agreed that
no cure period shall be required for a breach which by its nature cannot
be cured; and provided further that the Buyer may not terminate this
Agreement pursuant to this Section 9.19(c)(ii) if they are then in
material breach of the terms of this Agreement; or
(iii) by the Sellers if the Buyer has breached any
representation, warranty, covenant or agreement contained in this
Agreement such that the conditions set forth in Section 7.4 would not be
satisfied as of any date following the date hereof; provided, however,
that the Sellers may not terminate this Agreement pursuant to this Section
9.19(c)(iii) unless any such breach has not been cured within twenty (20)
Business Days after written notice thereof by the Sellers to the Buyer
informing the Buyer of such breach, it being understood and agreed that no
cure period shall be required for a breach which by its nature cannot be
cured; and provided further that the Sellers may not terminate this
Agreement pursuant to this Section 9.19(c)(iii) if they are then in
material breach of the terms of this Agreement.
(d) In the event of termination of this Agreement as provided in
Section 9.19(a), (b) or (c), this Agreement shall forthwith become void and
there shall be no liability on the part of either party except for the
provisions of Section 5.1 relating to confidentiality, Section 5.2 relating to
public announcements, Section 9.1 relating to fees and expenses, Section 9.4
relating to notices, Section 9.7 relating to third-party beneficiaries, Section
9.8 relating to governing law, Section 9.9 relating to jurisdiction and service
of process, Section 9.10 relating to specific performance, Section 9.11 relating
to waiver of immunity, Section 9.13 relating to personal liability, and this
Section 9.19. Nothing herein shall relieve either party from liability for any
breach of this Agreement or any agreement made as of the date hereof or
subsequent thereto pursuant to this Agreement.
Section 9.20 Joinder
(a) For purposes of (i) the indemnity obligations of the Sellers
under this Agreement and any other payment obligations of the Sellers hereunder
and (ii) the obligations of the Sellers under Sections 5.1 (Confidentiality),
5.6 (No Solicitation of Offers), 5.11 (Termination of Affiliate Contracts), 5.12
(Non-Solicitation of Employees; Severance), 5.13
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(Standstill), 5.14 (Sellers' Post-Closing Confidentiality Obligations), 5.16
(Notices of Certain Events) and 5.17 (Restructuring), the Sellers' Parent hereby
agrees to be bound by such obligations jointly and severally with the Sellers
and agrees that all such obligations may be enforced against the Sellers' Parent
by the Buyer in accordance with the provisions of this Agreement (including
Sections 9.8 (Governing Law), 9.9 (Submission to Jurisdiction; Service of
Process), 9.10 (Specific Performance) and 9.11 (Waiver of Immunity)) to the same
extent as if the Sellers' Parent were a party to each of the provisions of this
Agreement.
(b) For purposes of (i) the indemnity obligations of the Buyer under
this Agreement and any other payment obligations of the Buyer hereunder and (ii)
the obligations of the Buyer under Sections 5.3 (Consents and Approvals), 5.10
(Directors and Officers), 5.16 (Notices of Certain Events), 6.1 (Commencement of
Offers) and 6.2 (Conditions to Consummation of the Offers), the Buyer Parents,
jointly and severally, hereby agree to be bound by such obligations jointly and
severally with the Buyer and agree that all such obligations may be enforced
against the Buyer Parents by the Sellers in accordance with the provisions of
this Agreement (including Sections 9.8 (Governing Law), 9.9 (Submission to
Jurisdiction; Service of Process), 9.10 (Specific Performance) and 9.11 (Waiver
of Immunity)) to the same extent as if the Buyer Parents were parties to each of
the provisions of this Agreement.
[The remainder of this page is intentionally left blank.]
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IN WITNESS WHEREOF, the Sellers and the Buyer have caused this Agreement
to be executed as of the date first written above by their respective officers
thereunto duly authorized.
GTE VENEZUELA S.A.R.L.
By: Verizon International Holdings Inc.,
Its Manager
By: /s/ Xxxxxxxxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: Vice President - General Counsel
VERIZON INTERNATIONAL HOLDINGS INC.
By: /s/ Xxxxxxxxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: Vice President - General Counsel
OARSMAN INVESTMENTS B.V.
By: /s/ Xxxxxxxxx Xxxxx Xxxxxxx
---------------------------------------
Name: Xxxxxxxxx Xxxxx Xxxxxxx
Title: Attorney-in-fact
By: /s/ Xxxxxx Xxxxxxxxx Xxxxxxx
---------------------------------------
Name: Xxxxxx Xxxxxxxxx Xxxxxxx
Title: Attorney-in-fact
The undersigned join as parties to the foregoing Agreement for the limited
purposes provided in Section 9.20 of the Agreement.
VERIZON COMMUNICATIONS INC.
By: /s/ Xxxx X. Xxxxxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Executive Vice President -
Strategy Development and
Planning
TELEFONOS DE MEXICO, S.A. DE C.V.
By: /s/ Xxxxxx Xxxxxxxxx Xxxxxxx
---------------------------------------
Name: Xxxxxx Xxxxxxxxx Xxxxxxx
Title: Attorney-in-fact
AMERICA MOVIL, S.A. DE C.V.
By: /s/ Xxxxxxxxx Xxxxx Xxxxxxx
---------------------------------------
Name: Xxxxxxxxx Xxxxx Xxxxxxx
Title: Attorney-in-fact
