Exhibit 2
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CONFIDENTIAL
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AMENDED AND RESTATED
CONDITIONAL PURCHASE AND SALE AGREEMENT
between
VODAFONE AMERICAS B.V.,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
and
Certain Other Shareholders of Grupo Iusacell, S.A. de C.V.
as set forth on Exhibit A hereto
dated as of
March 30, 2001
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CONFIDENTIAL
TABLE OF CONTENTS
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Page
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ARTICLE 1 CERTAIN DEFINITIONS................................................2
1.1 Defined Terms...................................................2
1.2 Other Definitional Provisions...................................6
ARTICLE 2 THE TRANSACTION....................................................7
2.1 Purchase and Sale...............................................7
2.2 Taxes...........................................................8
2.3 Closing.........................................................9
ARTICLE 3 REPRESENTATIONS AND WARRANTIES.....................................9
3.1 Representations and Warranties of the Sellers...................9
3.2 Representations and Warranties of the Buyer.....................9
3.3 Survival of Representations and Warranties......................9
ARTICLE 4 COVENANTS AND AGREEMENTS...........................................9
4.1 Agreements of the Sellers Pending the Closing...................9
4.2 Agreements of the Buyer........................................10
4.3 Covenants of the Sellers and the Buyer.........................10
ARTICLE 5 CONDITIONS PRECEDENT TO CLOSING...................................11
5.1 Interpretation of this Article.................................11
5.2 Conditions Precedent to the Buyer's Closing Obligations........11
5.3 Conditions Precedent to the Sellers' Closing Obligations.......15
5.4 Additional Conditions to All Parties' Closing Obligations......16
ARTICLE 6 INDEMNIFICATION...................................................16
6.1 Indemnification................................................16
6.2 Indemnification Floor and Deductible...........................17
6.3 Third-Party Claims.............................................17
6.4 Adjustment For Insurance.......................................18
6.5 Payment........................................................18
6.6 Other Rights and Remedies......................................19
ARTICLE 7 MISCELLANEOUS.....................................................19
7.1 Termination: Rescission.......................................19
7.2 Expenses.......................................................21
7.3 Joint and Several Liability; Seller Representative.............21
7.4 Further Assurances.............................................21
7.5 Additional Post Closing Confidentiality Undertakings...........21
7.6 Non-Solicitation...............................................22
7.7 Contents of Agreement..........................................22
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7.8 Assignment and Binding Effect..................................22
7.9 Waiver.........................................................23
7.10 Notices........................................................23
7.11 Remedies.......................................................24
7.12 Governing Law: Dispute Resolution..............................25
7.13 No Benefit to Others...........................................26
7.14 Headings.......................................................26
7.15 Severability...................................................26
7.16 Counterparts...................................................26
7.17 Publicity......................................................26
EXHIBITS
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Exhibit A - Ownership and Sale of Sellers' Company Shares
Exhibit B - Subsidiaries of Grupo Iusacell, S.A. de C.V.
Exhibit C-1 - Telecommunications Licenses Held by the Company
Exhibit C-2 - Telecommunications Licenses Held by Third Parties and Used by
the Company
Exhibit D - Forms of Legal Opinions
Exhibit E - Representations and Warranties of the Sellers
Exhibit F - Representations and Warranties of the Buyer
SCHEDULES
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Schedule 1(d) - Subsidiaries Incorporated Under Foreign Law
Schedule 1(f) - Authorizations necessary for the Company Business which
are lacking
Schedule 1(g) - Restrictions for the Sale of the Company Shares
Schedule 2 - Stock Purchase Options
Schedule 4(a) - Title, Liens and Restrictions for Sale of the Company
Shares
Schedule 4(c) - Liens on the Company's Property
Schedule 4(d) - Real Property Owned or Leased by the Company
Schedule 4(e)
Schedule 5 - Property of the Company being used by third parties and
assets being used by the Company which belong to third
parties
Schedule 6(a) - Authorizations and Telecommunications Licenses
Schedule 7 - Accounts Receivable
Schedule 8 - Intellectual Property Infringement Claims
Schedule 9 - Material Changes since December 31, 1999
Schedule 10(a) - Litigation, Judgements
Schedule 10(b) - Outstanding Judgements, Awards and Fines
Schedule 11 (a) - Compliance with Contracts
Schedule 11 (c) - Compliance with Authorizations
Schedule 12(b) - Filings made by the Company which have been asserted
some deficiency
Schedule 12(c) - Uncured Violations
Schedule 14(b)(i) - Labor claims against the Company
Schedule 14(b)(ii) - Collective Bargaining Agreements
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Schedule 15 - List of Current Authorized Distributors
Schedule 16 - Undisclosed Liabilities
Schedule 17(a) - Agreements entered into by the Company listed in
Representation 17
Schedule 18(a) - Material Interest of Shareholders, Officers and
Affiliates
Schedule 19(f) - Tax issues
Schedule 22 - Powers of Attorney
Schedule 23 - (a) Standard Rate Plans
(b) Products and Services Provided
(c) Subscriber Agreements
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CONFIDENTIAL
AMENDED AND RESTATED
CONDITIONAL PURCHASE AND SALE AGREEMENT
THIS AMENDED AND RESTATED CONDITIONAL PURCHASE AND SALE AGREEMENT, dated as
of March 30, 2001, is entered into between VODAFONE AMERICAS B.V., a corporation
duly organized under the laws of the Netherlands (the "Buyer") on the one hand,
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and on the other, ING. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, a Mexican citizen, and certain
other shareholders of the Company (as defined below) as set forth on Exhibit A
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hereto (each, a "Seller" and collectively, the "Sellers").
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RECITALS
WHEREAS, Vodafone Group Plc, a public limited company duly organized under
the laws of the United Kingdom, and the Sellers entered into that certain
Conditional Purchase and Sale Agreement dated as of January 5, 2001 (the
"Original Agreement");
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WHEREAS, Vodafone Group Plc assigned all of its rights and obligations
under the Original Agreement to the Buyer pursuant to that certain notice of
assignment dated as of February 20, 2001 and executed and acknowledged by the
Seller Representative; and
WHEREAS, the Buyer and the Sellers have agreed to amend and restate the
Original Agreement in its entirety resulting in this Amended and Restated
Conditional Purchase and Sale Agreement (the "Agreement");
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WHEREAS, as specifically set forth in Exhibit A, the Sellers collectively
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own and hold of record shares representing thirty-four and fifty-three
hundredths percent (34.53%) of the corporate capital (capital social) of Grupo
Iusacell, S.A. de C.V., a Mexican sociedad anonima de capital variable (the
"Company");
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WHEREAS, the corporate capital of the Company (the "Company Shares")
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consists of two classes of stock: Series A (the "Series A Shares") and Series V
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(the "Series V Shares");
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WHEREAS, the Buyer desires to purchase two hundred thirty-two million four
hundred ninety-nine thousand four hundred thirty-seven (232.499,437) Series A
Shares, which represent thirty-one and fifty-five hundredths percent (31.55%) of
the Series A Shares (the "Sellers' Series A Shares") and two hundred sixty
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million three hundred sixteen thousand nine hundred three (260,316,903) Series V
Shares, which represent thirty-seven and seventy-one hundredths percent (37.71%)
of the Series V Shares (the "Sellers' Series V Shares"), which together
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represent thirty-four and fifty-three hundredths percent (34.53%) of the Company
Shares (the "Sellers' Company Shares");
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WHEREAS, on the terms and conditions contained in this Agreement, the Buyer
desires to purchase the Sellers' Company Shares from the Sellers;
WHEREAS, for purposes of this Agreement and any related agreements, the
Sellers wish to designate an individual specified herein as their representative
to provide and agree upon certain
CONFIDENTIAL
matters on the Sellers' behalf, to give and receive notices on behalf of the
Sellers, to represent the Sellers in certain capacities and to bind them as set
forth herein;
WHEREAS, the Company's subsidiaries include but are not limited to the
entities set forth in Exhibit B (the Company and each of its subsidiaries being
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hereinafter referred to collectively as the "Iusacell Group");
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WHEREAS, members of the Iusacell Group hold or have the right to use the
licenses set forth on Exhibits C-1 and C-2, which were granted by Mexico's
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Communications and Transportation Ministry (Secretaria de Comunicaciones y
Transportes, hereinafter the "SCT");
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WHEREAS, the Iusacell Group is currently engaged primarily in the business
of marketing, selling and providing various wireless telecommunications services
in Mexico (the "Company Business"); and
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WHEREAS, the Buyer and/or its Affiliate(s) (as defined below) intend(s) to
enter into a joint venture, shareholders or similar agreement with certain
affiliates of Verizon Communications that own shares in the Company
(collectively, "Verizon"), which joint venture, shareholders or similar
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agreement shall replace that certain 1999 Shareholders Agreement dated as of
June 21, 1999 between Verizon and the Sellers (the "1999 Shareholders
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Agreement") and which will set forth, among other things, the governance rights
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of the Buyer (or its Affiliate) and Verizon in the Company and in the other
members of the Iusacell Group (the "Joint Venture Agreement");
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NOW, THEREFORE; in consideration of the premises and the mutual
representations, warranties, covenants, agreements and conditions herein
contained, and intending to be legally bound, the parties hereto agree as
follows:
ARTICLE 1
CERTAIN DEFINITIONS
1.1 Defined Terms. For purposes of this Agreement (including the Schedules
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hereto), the terms defined in this Agreement shall have the respective meanings
specified herein, and, in addition, the following terms shall have the following
meanings:
"Acquisition Proposal" is defined in Section 4.1.2.
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"Affiliate" or "affiliate" means, as to any Person, any other Person which
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is in control of, is controlled by, or is under common control with, such
Person. The term "control" (including, with correlative meanings, the terms
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"controlled by" and "under common control with"), as applied to any Person,
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means the possession, direct or indirect. of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or other ownership interest, by contract or
otherwise.
"Agreement" means this Amended and Restated Conditional Purchase and Sale
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Agreement, and all Schedules and Exhibits hereto, as amended, modified or
supplemented from time to time in accordance with the terms hereof.
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"Authorizations" means, as to any Person, any and all licenses (including
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Telecommunications Licenses), permits, franchises, orders, approvals,
concessions, registrations, qualifications and other authorizations issued to
such Person by or under the authority of any federal, state, local or foreign
law, Governmental Authority or industry or other nongovernmental self-regulatory
organization.
"BMV" is defined in Section 2.1.1.
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"Broker" shall mean Accival (Acciones y Valores de Mexico, S A. de C. V.,
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Casa de Bolsa).
"Business Day" means any day other than a Saturday, a Sunday or a day on
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which banks in any of San Francisco (US), London (UK) or Mexico City (Mexico)
are authorized or required to close.
"Buyer" is defined in the Recitals.
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"Closing" and "Closing Date" are defined in Section 2.1.1.
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"CNBV" is defined in Section 2.1.1.
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"Commercially Reasonable Efforts" means a Party's efforts in accordance
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with reasonable commercial practices and without the payment of any money to any
third party except the incurrence of reasonable costs and expenses that are not
material in the context of the commercial objectives to be achieved under this
Agreement.
"COFETEL" is defined in Section 2.1.1(a)
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"Company" is defined in the Recitals.
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"Company Business" is defined in the Recitals.
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"Company Contracts" is defined in Section 17(b), Exhibit E.
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"Company Current Balance Sheer" is defined in Section 3(b), Exhibit E.
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"Company Financial Statements" is defined in Section 3(a), Exhibit E.
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"Company Shares" is defined in the Recitals.
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"Company Subscribers" is defined in Section 7.6(b).
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"Damaged Assets" is defined in Section 5.2.3.
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"Dollar," "dollar" and "US$" mean the lawful currency of the United States
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of America.
"Due Date" is defined in Section 6.5(a).
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"Environmental Claim" is defined in Section 13(b), Exhibit E.
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"Environmental Laws" is defined in Section 13(b), Exhibit E.
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"EU" means the European Union.
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"FIUSA" means FIUSA Pasteje, S.A. de C.V.
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"Governmental Authority" means any nation or government, any state or other
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political subdivision thereof or any entity (including without limitation a
court) exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government (other than a taxing authority).
"Income Tax" means all Taxes computed in whole or in part based on or by
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reference to net income, capital, net worth or profit and any franchise,
alternative, minimum, accumulated earnings or personal holding company's Tax
(including all interest and penalties thereon and additions thereto).
"Indemnitee" is defined in Section 6.1.
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"Indemnitor" is defined in Section 6.1.
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"Intellectual Property" means all copyrights, patents, trademarks, trade
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names, service marks, URLs (uniform resource locators) and applications for the
foregoing, and all software, firmware, trade secrets, proprietary technologies,
know-how, inventions, discoveries, improvements, processes and formulas (secret
or otherwise), and any and all other forms of intellectual property.
"Inventory" means all inventory held by the Company and each other member
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of the Iusacell Group for consumption by or sale to the public, including,
without limitation, phones,. spare parts and supplies, whether or not obsolete.
"Iusacell Group" is defined in the Recitals.
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"Joint Venture Agreement" is defined in the Recitals.
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"Knowledge" or "knowledge" means the actual knowledge of any Seller and, as
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to FIUSA, the actual knowledge of any of its officers or legal representatives.
Knowledge includes the actual knowledge of any of the Sellers' representatives
or employees who have served as officers and/or members of the boards of
directors of any member of the Iusacell Group.
"Lien" means any type of lien, encumbrance or adverse claim, or any other
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type of limitation on ownership, on enjoyment, of on the exercise of corporate
or economic rights.
"Losses" is defined in Section 6.1.
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"Material Adverse Change" and "Material Adverse Effect" means any change,
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effect and/or circumstance that, taken as a whole, is materially adverse to the
business, assets, liabilities, properties, condition (financial or otherwise),
results of operations or prospects of the Company, any other member of the
Iusacell Group, the Sellers or the Buyer, as applicable in the context.
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"Mexican GAAP" means generally accepted accounting principles in Mexico, as
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in effect from time to time.
"Mexico" means the United Mexican States.
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"Party" or "party" means a party to this Agreement and "other Party" or
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"other party" means the Buyer or the Seller Representative on behalf of the
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Sellers, as applicable.
"Person" means an individual, partnership, corporation, limited liability
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company, public limited liability company, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or other
entity or enterprise of whatever nature.
"Peso" means the lawful currency of the United Mexican States.
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"Prime Rate" means the annual interest rate set forth as the Prime Rate in
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the "Money Rates" table of The Wall Street Journal.
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"Property Taxes" means ad valorem, real and personal property Taxes.
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"Purchase Price" means the Peso equivalent of nine hundred seventy-three
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million three hundred twelve thousand two hundred seventy-two dollars
(US$973,312,272) as of the Closing Date, less the sum of (i) any currency
conversion costs incurred by the Buyer in converting the aforementioned sum
(provided that each of the Seller Representative and the Buyer shall have the
right to approve the terms and conditions of the conversion) and (ii) any broker
fees incurred by the Buyer related to the Registered Transaction set forth in
Article II (with the amount of such fees not to exceed one trillion five hundred
thousand dollars (US$1,500,000)).
"Registered Transaction" is defined in Section 2.1.1.
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"Requirement of Law" means, as to any Person, any permit, license,
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judgment, order, decree, statute, law, ordinance, rule, regulation or
arbitration award in each case applicable to or binding upon such Person or any
of its property or assets or to which such Person or any of its property or
assets is subject.
"SCT" is defined in the Recitals.
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"Seller" and "Sellers" are defined in the Recitals.
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"Sellers' Company Shares" is defined in the Recitals.
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"Seller Representative" is defined in Section 7.3(b).
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"Sellers' Series A Shares" is defined in the Recitals.
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"Sellers' Series V Shares" is defined in the Recitals.
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"Series A Shares" is defined in the Recitals.
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"Series V Shares" is defined in the Recitals.
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"Settlement Date" means the date which is two (2) Business Days following
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the Closing Date.
"Survival Period" is defined in Section 3.3.
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"Tax Return" and "Tax Returns" mean one or more return, report, notice,
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form, declaration, claim for refund, estimate, election, or information
statement or other document relating to any Tax, including any Schedule or
attachment thereto, and any amendment thereof.
"Tax" or "Taxes" mean all taxes of any kind, including, without limitation,
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any federal, state, local and foreign income, profits, license, severance,
occupation, windfall profits, capital gains, capital stock, transfer,
registration, social security (or similar), production, franchise, gross
receipts, payroll, sales, employment, use, property, excise, value added,
estimated, stamp, alternative or add-on minimum, environmental, withholding and
any other tax or assessment, together with all interest, penalties and additions
imposed with respect to such amounts, whether or not disputed.
"Telecommunications Law" is defined in Section 2.1.
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"Telecommunications Licenses" means any and all concessions, permits and
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registrations listed in (a) Exhibit C-1 and issued to any member(s) of the
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Iusacell Group by or under the authority of the SCT to install, operate and
exploit telecommunications networks or facilities, including without limitation
the radio electric spectrum to provide telecommunications and ancillary
services, and (b) Exhibit C-2 and issued to any third party, but used by the
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Company or . any other member of the Iusacell Group, by or under the authority
of the SCT to install, operate and exploit telecommunications networks or
facilities, including without limitation the radio electric spectrum to provide
telecommunications and ancillary services.
"US" and "USA" means the United States of America.
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"Verizon" is defined in the Recitals.
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1.2 Other Definitional Provisions.
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(a) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any . particular provision of this Agreement, and Section, Schedule and
Exhibit references are to this Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
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ARTICLE 2
THE TRANSACTION
2.1 Purchase and Sale. Pursuant to the terms and subject to the conditions
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hereinafter set forth and on the basis of and in reliance upon the
representations, warranties, obligations and agreements set forth herein, the
Sellers shall sell, assign, transfer and deliver to the Buyer, and the Buyer
shall purchase from the Sellers, all of the Sellers' right, title and interest
in and to the Sellers' Company Shares, free and clear of all Liens, other than
restrictions imposed by applicable provisions of the Federal Telecommunications
Law (Ley Federal de Telecomunicaciones, hereinafter the "Telecommunications
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Law"), the Authorizations, the Joint Venture Agreement and the bylaws of the
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Company, as follows:
2.1.1 The purchase and sale transaction contemplated herein (the "Closing")
shall occur on the Mexican Stock Exchange (Bolsa Mexicana de Valores,
hereinafter the "BMV") by means of a registered transaction (Operacion de
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Registro, hereinafter the "Registered Transaction") duly authorized by the
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Mexican Banking and Securities Commission (Comision Nacional Bancaria y de
Valores, hereinafter the "CNBV"), as follows:
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(a) On or before the Closing Date:
(i) the parties shall have obtained all Authorizations required
under the Agreement and necessary to proceed with the Closing as set forth
herein, including but not limited to Authorizations from the Mexican
Antitrust Commission (Comision de Competencia), the CNBV and, if necessary,
Mexico's Communications and Transportation Ministry (Secretaria de
Comunicaciones y Transportes) and Federal Telecommunictions Commission
(Comision Federal de Telecomunicaciones, hereinafter "COFETEL").
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(ii) the Seller Representative shall transfer to the Broker, the
Sellers'. Company Shares, which shall be maintained at the Broker's account
with the Indeval, S.A. Institucion para el Deposito de Valores as well as
providing to the Buyer a copy, certified by the Company Secretary, of the
relevant pages of the Company's share registry book (libro de registro de
acciones) evidencing that the Sellers' Company Shares have been duly
recorded in said share registry book in the name of the Sellers.
(iii) the Seller Representative shall deliver to the Buyer (1)
copies of public instruments (or relevant excerpts therefrom) evidencing
the fact that on the Closing Date the Persons executing this Agreement and
any documents delivered on behalf of the Sellers at the Closing have all
powers necessary to execute said Agreement and other documents on behalf of
the Sellers, and to bind the Sellers in accordance with the terms hereof
and thereof, and (2) at the Closing, the legal opinion of Sellers' counsel,
following in substantial form the agreed upon form of legal opinion set
forth in Exhibit D, dated as of the Closing Date and addressed to the
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Buyer; and
(iv) the Buyer shall deliver to the Seller Representative (1)
copies of public instruments (or relevant excerpts therefrom) evidencing
the fact that the Persons executing this Agreement and any documents
delivered on behalf of the Buyer at the Closing have all powers necessary
to execute said Agreement and other documents on
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behalf of the Buyer, and to bind it in accordance with the terms hereof and
thereof, and (2) the legal opinion of Buyer's counsel, following in
substantial form the agreed upon form of legal opinion set forth in Exhibit
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D hereto, dated as of the Closing Date and addressed to the Seller
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Representative.
(b) At a date and time mutually agreed, but (i) no later than three (3)
trading days following the Business Day on which all of the conditions set forth
in Article V herein are satisfied or waived and (ii) no sooner than April 2,
2001 (the "Closing Date"), the Sellers and the Buyer shall, in writing, jointly
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instruct the Broker to place an order to sell the Sellers' Company Shares by
means of a Registered Transaction duly approved by the CNBV at a price to be
mutually agreed by the Buyer and the Seller Representative. The Buyer, through
the Broker, shall then immediately place an order to purchase the Sellers'
Company Shares for an amount equal to the Purchase Price. The Buyer shall have
no obligation to purchase any Company Shares fewer in number than the total
number of Sellers' Company Shares, and shall have no obligation to purchase any
Company Shares from any third party.
(c) On the Settlement Date, (i) the Buyer shall deliver the Purchase
Price to the Broker and (ii) the Sellers shall cause the Broker to register the
transfer of the Sellers' Company Shares with the Indeval, S.A. Institucion para
el Deposito de Valores, which shall constitute all of the Sellers' right, title
and interest in and to the Sellers' Company Shares, free and clear of all Liens,
other than restrictions imposed by the applicable provisions of the
Telecommunications Law, the Authorizations, the Joint Venture Agreement and the
bylaws of the Company.
(d) As soon as practicable following the Settlement Date, the Sellers,
the Buyer and the Company shall provide notice of the transfer to the BMV and
the CNBV.
2.1.2 Other Deliveries. The parties hereto shall also deliver to each other
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the agreements, closing certificates, and other documents and instruments
required to be delivered pursuant to this Agreement.
2.2 Taxes. Notwithstanding any other provisions or any limitations in this
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Agreement (including but not limited to any provisions or limitations set forth
in Article VI hereof), any Taxes payable with respect to the sale of the
Sellers' Company Shares hereunder shall be borne by and accrue to the account of
the Sellers and, accordingly, the Buyer shall, to the extent required by law, be
entitled to deduct and withhold Taxes from the Purchase Price payable to the
Sellers. Any Tax so deducted by the Buyer shall be promptly remitted to the
appropriate Tax authority, and the Buyer shall provide the Sellers with a
receipt in respect of the Tax so remitted. Subject to the Buyer's general
obligation to withhold and remit Tax where required by law as provided herein,
the parties contemplate that no such withholding obligations will exist with
respect to Mexican Income Tax (impuesto sobre la renta) due to the fact that the
Buyer is not a Mexican resident and does not have a permanent establishment or
fixed base in Mexico. In the event that, subsequent to the Closing, a taxing
authority asserts that the Buyer failed to withhold some or all of any tax
payable on the Purchase Price with respect to one or more of the Sellers and
seeks to assert any liability against either the Buyer or the Company, such
Seller or Sellers shall indemnify and hold the buyer or the Company, as the case
may be, harmless from and against all liabilities incurred by the Buyer or the
Company arising out of or resulting from such failure to withhold (including
penalties and interest, if applicable).
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2.3 Closing.
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(a) Unless this Agreement shall have earlier terminated in accordance
with its provisions, the Closing shall take place in Mexico City, D.F. on the
BMV on a date and time as set forth in Section 2.1.1(b).
(b) If the Closing has not occurred by April 27, 2001, this Agreement
shall terminate.
(c) Transfer of title to the Sellers' Company Shares will not occur
until the BMV and Indeval, S.A. Institucion para el Deposito de Valores record
the Registered Transaction, at which point the transfer of title of the Sellers'
Company Shares to the Buyer will take place.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Sellers. The Sellers represent
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and warrant to the Buyer as set forth in Exhibit E hereto, and hereby obligate
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themselves to the truth and correctness thereof.
3.2 Representations and Warranties of the Buyer. The Buyer represents and
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warrants to the Sellers as set forth in Exhibit F hereto, and hereby obligates
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itself to the truth and correctness thereof.
3.3 Survival of Representations and Warranties. The representations,
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warranties and statements made by the parties in this Agreement and in the
certificates and other Closing documents delivered in connection herewith, shall
survive the Closing and remain in effect (a) forever, in the case of
representations, warranties and statements relating to capitalization and title
to the Sellers' Company Shares; (b) through the applicable statute of
limitations or prescription period, in the case of representations, warranties
and statements relating to Taxes; and (c) through the first anniversary of the
Closing, in the case of all other representations, warranties and statements (in
each case, the "Survival Period"); provided, however, that any intentional
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misrepresentation shall survive the Closing without limitation.
ARTICLE 4
COVENANTS AND AGREEMENTS
4.1 Agreements of the Sellers Pending the Closing. The Sellers covenant and
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agree that, from the date of this Agreement until the Closing (or such other
time as may be otherwise provided herein) or the earlier termination of this
Agreement in accordance with its terms and except as otherwise consented to in
writing by the Buyer:
4.1.1 Financial Information. The Sellers shall deliver to the Buyer as soon
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as possible, but in any event within thirty (30) calendar days after the Sellers
are provided by the Company with such information, a consolidated balance sheet
and statement of operations for such month and for the portion of the fiscal
year ending with such month that fairly present in accordance with Mexican GAAP
the consolidated financial position and results of operations of the Company and
the other members of the Iusacell Group as of the end of such month and for such
period.
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4.1.2 Exclusivity. Unless and until this Agreement shall have been
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terminated in accordance with its terms, neither the Sellers nor any of their
Affiliates shall directly or indirectly solicit any proposal that constitutes an
Acquisition Proposal (as defined below), engage in any substantive discussions
or negotiations with respect to an Acquisition Proposal, provide any
confidential information of or relating to the Sellers' Company Shares to any
Person in furtherance of an Acquisition Proposal, or accept any Acquisition
Proposal. "Acquisition Proposal" means any offer to acquire (or meaningful
---------------------
indication of interest in the acquisition of), directly or indirectly, all or
any part of the Sellers' Company Shares, whether by merger, consolidation, sale
of stock, assets or partnership interests or similar transaction or series of
transactions, other than any such offer or indication made by the Buyer or its
representatives.
4.1.3 Compliance with FCPA. Each of the Sellers and their respective
----------------------
Affiliates, agents or representatives shall observe the following requirements
in all actions or matters relevant to the transactions contemplated by this
Agreement: (a) no action shall be taken by or on behalf of any of the foregoing
Persons which violates any applicable law or regulation of Mexico or any other
applicable jurisdiction (including the provisions of the US Foreign Corrupt
Practices Act); (b) no expenditure for other than lawful purposes shall be made
by or on behalf of any of the foregoing Persons; and (c) no payments shall be
made and nothing of value shall be given to government officials by any of the
foregoing Persons or any of their agents, except such payments as are required
by law and made to such officials in other than their individual capacities.
4.2 Agreements of the Buyer. The Buyer covenants and agrees that, from the
-----------------------
date of this Agreement until the Closing (and following Closing to the extent
expressly set forth herein) or the earlier termination of this Agreement in
accordance with its terms, except as otherwise consented to in writing by the
Sellers (which consent shall not be unreasonably withheld):
4.2.1 Communications Act. The Buyer shall not take any action to disqualify
------------------
itself under the Telecommunications Law or other applicable laws, rules and
regulations from acquiring the Sellers' Company Shares.
4.2.2 Other Transactions. Unless and until this Agreement shall have been
-------------------
terminated in accordance with its terms, neither the Buyer nor any of its
Affiliates shall directly or indirectly engage in any substantive discussions or
negotiations or enter into any transaction in Mexico which would prohibit or
prevent the Buyer from performing its obligations at Closing.
4.2.3 Due Diligence Disclosure. Prior to the Closing Date, the Buyer shall
------------------------
inform in writing the Sellers of any information it discovers which would make
any of the Sellers' representations or warranties hereunder sufficiently
inaccurate to result in an indemnification claim under Article VI of this
Agreement.
4.3 Covenants of the Sellers and the Buyer. The Sellers and the Buyer
-----------------------------------------
further covenant and agree that except as otherwise agreed to in writing by the
Sellers or the Seller Representative and the Buyer:
4.3.1 Cooperation. The Sellers and the Buyer shall cooperate with each
-----------
other and use Commercially Reasonable Efforts to cause all of the conditions to
the obligations of the Buyer and the Sellers under this Agreement to be
satisfied on or prior to the Closing Date.
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CONFIDENTIAL
4.3.2 Other Regulatory Requirements. The Sellers and the Buyer agree to
-------------------------------
cooperate with each other in connection with either party's efforts to satisfy
applicable regulatory requirements in connection with the transactions
contemplated by this Agreement, each at its own cost and expense except as
expressly provided otherwise in this Agreement.
4.3.3 Retention and Delivery of Books and Records. From the date hereof,
--------------------------------------------
the Sellers shall retain and refrain from destroying and within ten (10)
Business Days following the Closing Date, the Sellers shall deliver or cause to
be delivered to the Buyer all agreements, documents, books, records and files
entered into by or created on behalf of the Company and the other members of the
Iusacell Group, if any, in the possession of the Sellers and their Affiliates
relevant to the Company Business to the extent not then in the possession of the
Buyer, the Company or any other Iusacell Group member: provided, however, that
the Sellers may retain all original materials that they are required to retain
pursuant to the laws and regulations of Mexico, provided that copies of such
materials are delivered to the Buyer pursuant to the terms of this Section.
ARTICLE 5
CONDITIONS PRECEDENT TO CLOSING
5.1 Interpretation of this Article. Nothing in this Article shall be
--------------------------------
interpreted or construed as a representation or warranty of any of the Sellers
and, consequently, the indemnification provisions contained herein shall not
apply to this Article.
5.2 Conditions Precedent to the Buyer's Closing Obligations. The
---------------------------------------------------------------
obligations of the Buyer to purchase the Sellers Company Shares from the Sellers
and to take the other actions to be taken by it at the Closing and on the
Settlement Date, are subject to the satisfaction or the Buyer's written waiver
of each the following conditions:
5.2.1 Conduct of the Company and other Iusacell Group Business in the
--------------------------------------------------------------------
Ordinary Course. From the date hereof and through the Closing Date, subject to
---------------
applicable Requirements of Law, the Company and the other members of the
Iusacell Group shall have conducted the Company Business in the ordinary course
of business consistent with recent past practice and in substantial accordance
with the Company's 2001 operating and capital budgets. Without limiting the
generality of the foregoing, the Company and the other members of the Iusacell
Group shall have managed the Company Business so as to:
(a) take no action that would result in a material reduction (other
than termination for cause) in the number of executive officers or employees of
the Company or any other Iusacell Group members, with a reduction of twenty-five
percent (25%) of such executive officers or ten percent (10%) of such employees
being deemed a material reduction;
(b) not sell, lease, license, or otherwise dispose of any material part
of the Company's or the other Iusacell Group members' assets with an aggregate
value greater than thirty million dollars (US$30,000,000) other than sales of
inventory or superseded or obsolete equipment made in the ordinary course of
business;
(c) use Commercially Reasonable Efforts to maintain the Company's and
any other Iusacell Group members' relations and goodwill with the material
suppliers, customers,
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CONFIDENTIAL
distributors, employees and any others having business. relations with the
Company and any other member of the Iusacell Group;
(d) use Commercially Reasonable Efforts to maintain the Company's and
the other Iusacell Group members' material equipment, systems and other fixed
assets (other than equipment, systems or other fixed assets which are sold,
replaced or superseded in the ordinary course of business) as necessary to
conduct the Company Business in the ordinary course of business consistent with
recent past practice and as necessary to maintain the Iusacell Group's
reliability standards, footprint coverage and network capacity as they currently
exist;
(e) comply in all respects with Requirements of Law applicable to the
Telecommunications Licenses (except as otherwise disclosed in Schedule 6(a)) and
comply in all material respects with all other Requirements of Law applicable to
the Company Business and with the requirements set forth in Section 4.1.3
hereto; and
(f) keep in full force and effect the material insurance policies
covering the Company, the other members of the Iusacell Group and the Company
Business as of the date hereof (or replacement policies providing substantially
the same coverage).
5.2.2 Access. The Buyer and its authorized representatives shall have been
------
given reasonable access, during regular business hours and upon reasonable
advance notice, to the books and records of the Company Business (including
without limitation all financial analyses and external reports material to the
management of the Company Business and the reports from the Company's and the
other Iusacell Group members' billing vendors and roaming clearinghouses (if
any)), facilities and assets, and to the officers and key managers of the
Company and other Iusacell Group members, to the extent that such access does
not materially interfere with the conduct of the Company Business.
5.2.3 Casualty Insurance Proceeds. In the event that any of the assets of
----------------------------
the Company Business are damaged prior to the Closing Date by a casualty covered
by insurance for an amount exceeding two hundred thousand dollars (US$200,000)
("Damaged Assets"), the Company and any other member of the Iusacell Group shall
--------------
have used Commercially Reasonable Efforts to collect amounts due (if any) in
respect of such Damaged Assets under the Company's or another Iusacell Group
member's insurance policies, which amounts if collected shall either have been
used to repair or replace the Damaged Assets or otherwise shall have been
retained by the Company or another Iusacell Group member.
5.2.4 Accuracy of Representations and Warranties. The representations and
-------------------------------------------
warranties made by the Sellers in this Agreement and in any certificate or other
document delivered pursuant to the provisions hereof, shall be true and correct
on the date when made and as of the Closing Date, as if made on and as of such
Date.
5.2.5 Performance of Obligations. The Sellers shall have performed all
----------------------------
obligations under and complied with all provisions of this Agreement (including
but not limited to the requirements of Section 4.1.3 hereof) required to be
performed or complied with by the Sellers prior to and as of the Closing Date.
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CONFIDENTIAL
5.2.6 No Adverse Material Change in Mexico. From the date hereof and until
------------------------------------
the Closing Date, there shall not have occurred:
(a) A twenty percent (20%) cumulative devaluation of the Peso with
respect to the Dollar at any time between the date hereof and the Closing,
unless within two (2) weeks thereof, the Peso recovers such that its cumulative
devaluation from the date hereof is less than twenty percent (20%);
(b) The insolvency of, nationalization of or intervention by a
Governmental Authority in telecommunications institutions whose aggregate assets
represent more than ten percent (10%) of the total assets of all
telecommunications institutions in Mexico, as measured by COFETEL;
(c) A reduction in the domestic currency sovereign rating for Mexico to
less than BBB- by Standard & Poors; or
(d) A significant change in the laws, treaties or policies of Mexico
with respect to foreign investment, currency convertibility, or
telecommunications, the result of which is to adversely affect the ability of
the Buyer, the Sellers, Verizon, the Company or any other member of the Iusacell
Group to perform any obligation or consummate any transaction contemplated by
this Agreement, the Joint Venture Agreement or any other contract or agreement
relating thereto.
5.2.7 No Material Adverse Change. From the date hereof and until the
-------------------------
Closing Date, there shall not have been any Material Adverse Change relating to
the Company or any other member of the Iusacell Group.
5.2.8 Execution of the Joint Venture Agreement: Receipt of Verizon
--------------------------------------------------------------------
Certificate. The Joint Venture Agreement shall have been executed by and between
-----------
the Buyer (or its Affiliate) and Verizon. In addition:
(a) Verizon shall not, have sold or agreed to sell any of the Series A
Shares; and
(b) On or before the Closing Date, Verizon shall have provided the
Buyer with a certificate from one of its authorized officers certifying that:
(i) Verizon has not sold or agreed to sell any of the Series A
Shares;
(ii) Verizon shall own a majority of the Series A Shares on the
Closing Date; and
(iii) Verizon has not entered into any agreement with any third
party regarding the sale or transfer of the Series A Shares.
5.2.9 Amendment of Bylaws: Election of Directors and Officers. In order to
--------------------------------------------------------
reflect the governance, managerial and related arrangements agreed to between
the Buyer (or its Affiliate) and Verizon in connection with the Joint Venture
Agreement, the following actions shall have taken place to the reasonable
satisfaction of the Buyer and in accordance with applicable Mexican law:
-13-
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(a) Appropriate amendments to the bylaws of the Company and each other
member of the Iusacell Group shall have received any Authorizations required
from Mexican Governmental Authorities, and the General Extraordinary
Shareholders Meeting of the Company and each other Iusacell Group member shall
have adopted resolutions approving said bylaw amendments, subject to the
occurrence of the Closing, and directing the appropriate officers or
representatives of the Company and each such other Iusacell Group member to take
any and all appropriate steps to protocolize the minutes of said General
Extraordinary Shareholders Meeting before a Mexican public notary and to proceed
to record the protocolized minutes in the applicable Public Commercial Registry;
(b) The General Ordinary Shareholders Meeting of the Company shall have
adopted resolutions subject to the occurrence of the Closing (i) electing the
Company's new Board of Directors and Statutory Examiner's and appointing any
Company officers over whom the Buyer (or its Affiliate) shall have appointment
rights; (ii) reconstituting the Company's Executive Committee, Finance and Audit
Committee, Human Resources and Compensation Committee and Technology and
Strategic Planning Committee; (iii) revoking certain powers of attorney
previously granted by the . Company and granting new powers of attorney; (iv)
determining the manner in which the shares held by the Company in each other
member of the Iusacell Group will be voted in (A) the election of the Board of
Directors and Statutory Examiners of said member, (B) the appointment of any
officers of said member over whom the Buyer (or its Affiliate;) shall have
appointment rights, and (C) the revocation of certain powers of attorney
previously granted by said member and the granting of new powers of attorney;
and (v) directing the appropriate officers or representatives of the Company to
take any and all appropriate steps to implement the actions so adopted by the
Company's General Ordinary Shareholders Meeting; all of the foregoing as
contemplated by the terms of the Joint Venture Agreement and the Company's
amended bylaws; and
(c) The General Ordinary Shareholders Meeting of each other member of
the Iusacell Group shall have adopted resolutions taking the action determined
pursuant to Section 5.2.9(b)(iv) above.
5.2.10 Updating of Corporate Books. The shareholder minute book. board of
---------------------------
directors minute book, share registry book and capital variations book of the
Company and of each other member of the Iusacell Group shall have been updated
through the Closing, and on that date shall otherwise be in compliance with
applicable law and the respective bylaws of each such company.
5.2.11 Execution/Delivery of Certain Documents. The following documents
----------------------------------------
shall have been executed and/or delivered to the Buyer, in form and substance
reasonably satisfactory to the Buyer:
(a) Evidence that (A) the transfer of the Sellers' Company Shares has
been expressly approved by the Company's board of directors or otherwise as
required by the Company's bylaws; and (B) shareholders of the Company with
rights of first refusal to acquire the Sellers' Company Shares or any portion
thereof have waived any such rights of first refusal or other rights they might
have in connection with such transfer, including but not limited to Verizon's
waiver of any rights under Sections 6.1(b)(iii) and 6.4 of the 1999 Shareholders
Agreement.
-14-
CONFIDENTIAL
(b) Certificates of the appropriate officers or representatives of the
Sellers, to the effect that (A) the representations and warranties made by the
Sellers pursuant to this Agreement are true and correct as of the Closing Date;
(B) the Sellers are in compliance with their obligations under and the
provisions of this Agreement; and (C) since the date hereof, to the Sellers'
Knowledge, neither the Company nor any other member of the Iusacell Group has
undertaken any of the matters or transactions described in Section 5.2.1 of this
Agreement, except as disclosed in the relevant certificate.
(c) Evidence of the consummation of the matters contemplated in Section
5.2.9 above.
5.2.12 Receipt of EU Approval. The Buyer and/or its Affiliate(s) shall have
----------------------
received any approvals from the EU or any of the EU member states required to
complete the transactions contemplated herein.
5.3 Conditions Precedent to the Sellers' Closing Obligations. The
---------------------------------------------------------------
obligations of the Sellers to sell the Sellers' Company Shares to the Buyer and
to take the other actions to be taken by each of them at the Closing and on the
Settlement Date. are subject to the satisfaction or the Sellers' written waiver
of each the following conditions:
(a) The representations and warranties made by the Buyer in this
Agreement and in any certificate or other document delivered pursuant to the
provisions hereof shall be true and correct in all material respects on the date
when made and as of the Closing Date, as if made on and as of such Date, except
for any inaccuracy or inaccuracies which, individually or in the aggregate, have
not or would not have a Material Adverse Effect.
(b) The Buyer shall have performed all obligations under and complied
with all provisions of this Agreement required to be performed or complied with
by it prior to and as of the Closing Date, except for any failure or failures to
perform and/or comply `which, individually or in the aggregate, have not or
would not have a Material Adverse Effect.
(c) Certificates of the appropriate officers or representatives of the
Buyer shall have been executed and/or presented to the Sellers, in form and
substance reasonably satisfactory to the Sellers, to the effect that (i) the
representations and warranties made by the Buyer pursuant to this Agreement are
true and correct as of the Closing Date; and (ii) the Buyer is in compliance
with its obligations under and the provisions of this Agreement.
(d) Subject to the approval of Verizon, the shareholders of the Company
shall have adopted resolutions releasing the Sellers' representatives on said
board of directors or on any committee thereof and any officers of the Company
designated by the Sellers of any liabilities incurred by the Company prior to
the Closing and the replacement, removal or resignation of such directors,
committee members or officers.
(e) Prior to the Closing Date, there shall have been no change in the
laws, treaties, policies or any other regulations or general provisions in
Mexico with respect to Tax matters, the result of which would adversely affect
the ability of the Sellers to consummate the
-15-
CONFIDENTIAL
transaction contemplated in this Agreement, affecting the Tax payable as of the
date hereof considering a sale by individuals through the BMV.
(f) Prior to the Closing Date, no Governmental Authority shall have
enacted, issued. promulgated, enforced or entered any order, writ, judgment,
decree, determination or award that is then in effect and has the effect of
prohibiting or preventing the consummation of the transaction as set forth in
Article II hereof.
(g) Prior to the Closing Date, the Sellers shall have agreed with the
financial institutions holding a security interest in the Sellers' Company
Shares to be sold hereunder on the payment mechanisms and release of any lien
related thereto.
5.4 Additional Conditions to All Parties' Closing Obligations. The
---------------------------------------------------------------
obligations of each of the Buyer and the Sellers to take the respective actions
to be taken by each of them at the Closing and on the Settlement Date, are
subject to the satisfaction or each party's written waiver of each the following
conditions:
(a) All Authorizations required to consummate the transactions
contemplated by this Agreement shall have been obtained in form and substance
reasonably satisfactory to each party. and no judicial or administrative
proceeding seeking to revoke or otherwise alter the validity of any such
regulatory approval shall be pending or threatened.
(b) Copies of the Authorizations described in subparagraph (a) above
shall have been presented to each party, in form and substance reasonably
satisfactory to each.
(c) The 1999 Shareholders Agreement shall have been terminated and
Verizon shall have provided the Sellers with any releases or waivers required
under said Agreement.
(d) Prior to the Closing Date, the Sellers shall have agreed with all
financial institutions holding Liens against the Sellers' Company Shares to
release any such Liens as of or prior to the Closing Date.
ARTICLE 6
INDEMNIFICATION
6.1 Indemnification.
---------------
(a) Each of the Sellers and the Buyer (as applicable, the "Indemnitor")
----------
shall indemnify and hold harmless the other party (the "Indemnitee") from and
----------
against any and all claims, liabilities, losses, damages, Taxes and expenses
(collectively, the "Losses") which the Indemnitee may incur or sustain as a
------
result of (a) the inaccuracy of any representation, warranty or statement made
by the Indemnitor in this Agreement or in any certificate or other Closing
document delivered in connection herewith, (b) any breach by the Indemnitor of
any of its obligations under this Agreement, or (c) any Loss set forth in
Section 6.1(b) below; provided, however, that (i) the maximum amount of the
Indemnitor's obligation (including the Sellers' joint obligation) assumed
hereunder does not exceed the amount of the Purchase Price, (ii) the Losses have
been incurred or sustained during the applicable Survival Period and (iii) the
claim by the Indemnitee is brought within six (6) months of the termination of
said Survival Period. In the case
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CONFIDENTIAL
of any Losses suffered by the Company, the Buyer shall recover based on its
allocable portion of any Losses suffered by the Company, which shall be that
fraction equal to the number of Sellers' Company Shares then owned by the Buyer
over the number of Company Shares.
(b) Subject to Section 6.1(a) above, the Sellers agree to indemnify and
hold harmless the Buyer from and against any Losses which the Buyer may incur or
sustain as a result of any Losses arising from a claim or claims brought by any
third party (including but not limited to any Governmental Authority, the Broker
or any shareholders of the Company) arising or attributable to the execution or
performance of the Registered Transaction over the BMV set forth in Article II
of this Agreement. Any indemnification arising from this Section 6.1(b) shall
not be subject to Section 6.2 below. The Survival Period for purposes of any
obligation arising under this Section 6.1(b) shall be the applicable statute of
limitations
6.2 Indemnification Floor and Deductible. Notwithstanding any other
---------------------------------------
provision of this Article. no claim or claims for indemnification may be made
under this Agreement (other than under Sections 2.2. 4.1.3 and 6.1(b)) until
such claim or claims, individually or in the aggregate, amount to more than six
million dollars (US$6,000,000); provided, however, that should a claim or claims
for indemnification exceed the foregoing amount, the Indemnitee may recover the
full amount of its claim or claims minus a deductible of two million dollars
(US$2,000,000).
6.3 Third-Party Claims. Whenever a claim shall arise for indemnification
-------------------
under this Article VI, the Indemnitee shall give notice to the Indemnitor of any
matter that the Indemnitee has determined has given or could give rise to a
right of indemnification under this Agreement promptly, but in no event later
than sixty (60) Business Days after the Indemnitee first learns of such claim,
or fifteen (15) Business Days for any matter governed by Section 2.2, stating
the amount of the Loss, if known, and method of computation thereof, and
containing a reference to the provisions of this Agreement in respect of which
such right of indemnification is claimed or arises. The obligations and
liabilities of the Indemnitor under this Article VI with respect to Losses
arising from claims of any third party which are subject to the indemnification
provided for in this Article VI (the "Third-Party Claims") shall be governed by
-------------------
and contingent upon the following additional terms and conditions: if an
Indemnitee shall receive notice of any Third-Party Claim, the Indemnitee shall
give the Indemnitor notice of such Third-Party Claim following receipt by the
Indemnitee of such notice in the time frame provided above; provided, however,
that (i) any such notice given to the Indemnitor by any Indemnitee shall be
deemed to have been given by all of the Indemnitees; (ii) an Indemnitee shall
not be deemed to have received notice of a Third-Party Claim asserted against
the Company or any other member of the Iusacell Group but not asserted against
such Indemnitee; (iii) the failure of the Company and/or any other member of the
Iusacell Group to notify the Indemnitor of a Third-Party Claim, or any
interference by the Company and/or any other member of the Iusacell Group with
the Indemnitor's rights in connection with a Third-Party Claim, shall not be
imputed to any Indemnitee and shall not release the Indemnitor from any of its
obligations under this Article VI; and (iv) the failure of an Indemnitee to
provide notice of a Third-Party Claim as to which it has received notice shall
not release the Indemnitor from any of its obligations under this Article VI and
shall not relieve the Indemnitor from any other obligation or liability that it
may have to any Indemnitee otherwise than under this Article VI, except to the
extent that the Indemnitor's ability to defend has been irreparably prejudiced
by such failure.
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The Indemnitor shall be entitled to assume and control the defense or
settlement of such Third-Party Claim at its expense and through counsel of its
choice if it gives notice of its intention to do so to the Indemnitee within
thirty (30) Business Days of the receipt `of such notice from the Indemnitee;
provided that the Indemnitor will be deemed to have waived its right to dispute
its liability to the Indemnitee under Article VI with respect to any Third-Party
Claim as to which it elects to control the defense or settlement; and provided,
further, that if there exists a conflict of interest that would make it
inappropriate (under applicable standards of professional conduct) for the same
counsel to represent both the Indemnitee and the Indemnitor, then the Indemnitee
shall be entitled to retain its own counsel, in each jurisdiction for which the
Indemnitee reasonably determines that counsel is required, at the expense of the
Indemnitor. In the event the Indemnitor exercises the right to undertake any
such defense against any such Third-Party Claim as provided above, the
Indemnitee shall cooperate with the Indemnitor in such defense and make
available to the Indemnitor, at the Indemnitor's expense, all witnesses,
pertinent records, materials and information in the Indemnitee's possession or
under the Indemnitee's control relating thereto as is reasonably required by the
Indemnitor. Similarly, in the event the Indemnitee is, directly or indirectly,
conducting the defense against any such Third-Party Claim, the Indemnitor shall
cooperate with the Indemnitee in such defense and make available to the
Indemnitee, at the Indemnitor's expense, all such witnesses, records, materials
and information in the Indemnitor's possession or under the Indemnitor's control
relating thereto as is reasonably required by the Indemnitee. No such
Third-Party Claim may be settled by the Indemnitor without the prior written
consent of the Indemnitee, which consent shall not be unreasonably withheld.
6.4 Adjustment For Insurance. Any indemnification payable pursuant to this
------------------------
Article VI shall be reduced by any amounts actually recovered (after deducting
related costs and expenses) by the Indemnitee, the Company or any other member
of the Iusacell Group for the Losses for which such indemnification payment is
made, under any insurance policy, warranty or indemnity from any third party. In
the case of amounts recovered by the Company or any other member of the Iusacell
Group, such reduction for the Buyer shall be equal to the amount of the above
referenced recovery multiplied by the Buyer's equity ownership of the Company on
the Closing Date.
6.5 Payment.
-------
(a) Upon a final determination of liability in respect of Article VI of
this Agreement and in accordance with Section 7.12 hereof, the appropriate
Indemnitor shall pay the Indemnitee the amount so determined within ten (10)
Business Days after the date of determination (such tenth Business Day, the "Due
---
Date"). If there should be a dispute as to the amount or manner of determination
----
of any indemnity obligation owed under this Agreement, the Indemnitor shall
nevertheless pay when due such portion, if any, of the obligation as shall not
be subject to dispute; Upon the payment in full of any claim, either by setoff
or otherwise, the Indemnitor shall be subrogated to the rights of the Indemnitee
against any Person with respect to the subject matter of such claim.
(b) If all or part of any indemnification obligation under this
Agreement is not paid when due, then the Indemnitor shall pay the Indemnitee
interest on the unpaid amount of the obligation for each day from the Due Date
until payment in full, payable on demand, at the Prime Rate on the Due Date.
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CONFIDENTIAL
6.6 Other Rights and Remedies. Following the Closing, the sole and
----------------------------
exclusive remedy at law for the Sellers or the Buyer for any claim (whether such
claim is contractual, extra-contractual or otherwise) arising out of a breach of
any representation, warranty, covenant or other agreement in this Agreement
shall be a claim by the Sellers or the Buyer for indemnification pursuant to
this Article VI. Notwithstanding, the foregoing shall not limit any other
rights, privileges or remedies provided under Sections 7.1 and 7.11.
ARTICLE 7
MISCELLANEOUS
7.1 Termination: Rescission.
-----------------------
(a) Anything herein or elsewhere to the contrary notwithstanding, this
Agreement may be terminated at any time before the Closing Date only as follows:
(i) by mutual consent of the Seller Representative and the Buyer;
(ii) by the Buyer, if the Buyer discovers any fact or circumstance
which, in the Buyer's sole discretion, has or potentially could have an
adverse impact on the financial condition, business or prospects of the
Iusacell Group; provided that this termination right may only be exercised
within three (3) weeks of the execution date of this Agreement;
(iii) by the Seller Representative, if there has been a breach by
the Buyer at any time before the Closing of any representation, warranty,
covenant or agreement contained in this Agreement that has had a Material
Adverse Effect on the ability of the Buyer to perform this Agreement that
is not curable or, if curable, is not cured within sixty (60) calendar days
after written notice of such breach is given by the Seller Representative
to the Buyer or if assurances of cure reasonably acceptable to the Seller
Representative are not provided in such period,
(iv) by the Buyer if:
(A) there has been a breach by the Sellers at any time before
the Closing of Section 4.1.3 of this Agreement;
(B) the representation set forth under paragraph 25 of Exhibit
-------
E hereto is untrue; or
-
(C) any representation, warranty, covenant or agreement
contained in this Agreement that has had a Material Adverse Effect
on the Company or any other Iusacell Group members or on the
ability of the Sellers to perform this Agreement that is not
curable or, if curable, is not cured within sixty (60) calendar
days after written notice of any such breach is given by the Buyer
to the Seller Representative if assurances of cure reasonably
acceptable to the Buyer are not provided in such period;
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CONFIDENTIAL
(v) by the Buyer or the Seller Representative upon notice given to
the other if the Closing shall not have taken place on or before 11:59 p.m.
Mexico City, D.F. time on April 27, 2001; provided, however, that the right
to terminate this Agreement under this Section 7.1(a)(v) shall not be
available to the party whose failure to fulfill any of its obligations
under this Agreement has been the cause of or resulted in the failure of
the Closing to occur on or before such date;
(vi) by the Buyer or the Seller Representative upon notice given to
the other if any Governmental Authority (A) shall have issued an order,
decree or ruling or taken any other action permanently restraining,
enjoining or otherwise prohibiting the transactions contemplated by this
Agreement, and such order. decree, railing or other action shall have
become final and nonappealable or (B) shall have failed to issue an order,
decree or ruling or to take any other action, as applicable, which is
necessary to fulfill the conditions set forth in Article V, and such denial
of a request to issue such order, decree, ruling or take such other action
shall have become final and nonappealable; provided, however. that the
right to terminate this Agreement under this Section 7.1(a)(vi) shall not
be available to any party whose failure to comply with Section 4.3 has been
the cause of such action or inaction,
(vii) by the Buyer or the Seller Representative if the conditions
set forth in Section 5.2.8 have-not been satisfied within sixty (60)
Business Days from the execution date of this Agreement, or if the
amendments to the bylaws of the Company and the other members of the
Iusacell Group shall not have received the preliminary Authorizations
referenced in Section 5.2.9 hereof within thirty (30) Business Days from
the execution date of the Joint Venture Agreement; or
(viii) by the Buyer or the Seller Representative if the Registered
Transaction on the BMV for the Sellers' Company Shares as set forth in
Section 2.1 is not completed within twenty-one (21) Business Days of the
satisfaction or written waiver of the conditions set forth in Article V
hereof.
(b) In the event of the termination of this Agreement as provided in
Section 7.1(a), this Agreement shall forthwith become wholly void and of no
further force and effect (except as set forth in this Section 7.1 and Sections
7.2 and 7.5 hereof). Notwithstanding the foregoing, nothing herein shall relieve
a party from liability for any breach of the representations, warranties,
covenants or agreements set forth in this Agreement prior to such termination
where such breach has independently caused Losses to the other party hereto,
including but not limited to Losses incurred as a result of a breach of the
provisions of Section 4.1.3 hereof.
(c) In the event that the Sellers breach Section 4.1.3 or the
representation set forth under paragraph 25 of Exhibit E hereto is untrue, the
---------
Buyer may elect in writing, within the Survival Period, that this Agreement be
rescinded, in which case:
(i) the Buyer shall transfer all the Sellers' Company Shares
purchased from the Sellers to the Sellers; and
-20-
CONFIDENTIAL
(ii) the Buyer shall pay to the Sellers all amounts paid to it by
the Sellers, less an amount equal to the Buyer's expenses and costs
incurred with respect to the transaction contemplated by this Agreement,
including costs relating to currency conversion, foreign exchange and fees
paid to attorneys, bankers, brokers and advisors.
7.2 Expenses. Except as otherwise provided in this Agreement, the Sellers
--------
and the Buyer shall share equally the filing fees associated with making all
requisite applications with COFETEL, the SCT and Mexico's Antitrust Commission
for consent to the transactions contemplated by this Agreement, but shall pay
their own expenses incidental to the preparation of this Agreement, the carrying
out of the provisions of this Agreement and the consummation of the transactions
contemplated hereby.
7.3 Joint and Several Liability; Seller Representative.
--------------------------------------------------
(a) Joint and Several Liability of Sellers. Each of the Sellers
-------------------------------------------
hereunder hereby assumes joint and several liability (responsabilidad solidaria)
for each and all of the obligations assumed by the Sellers pursuant to this
Agreement.
(b) Seller Representative. Each of the Sellers hereby designates Mr.
----------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (the "Seller Representative") to act for and represent
----------------------
each such Seller in connection with any and all matters relating to this
Agreement, including the receipt of notices and/or service of process. Each of
the Sellers hereby acknowledges and agrees that (i) the Seller Representative
has the power and authority to execute this Agreement on their behalf and to act
for, represent and bind each Seller with respect to any action required or
permitted to be taken by the Sellers in connection with this Agreement; (ii) the
Buyer may deal exclusively with the Seller Representative in connection with any
and all such actions; and (iii) any action so taken by the Seller Representative
shall be binding on each Seller without any further action on the part of any
Seller individually. The Sellers may change the Seller Representative at any
time, by providing the Buyer with a notice indicating such change, which notice
shall include a certified copy of any power of attorney issued to the new
representative (as used herein, the term "Seller Representative" shall
-----------------------
thereafter refer to such new representative).
7.4 Further Assurances. The Sellers and the Buyer shall from time to time
-------------------
after the Closing Date, at the reasonable request of the other party, execute,
acknowledge and deliver to such other party such other reasonable instruments of
conveyance and transfer and will take such other reasonable actions and execute
and deliver such other reasonable documents, certifications and further
assurances as such other party may reasonably require in order to vest pursuant
to the terms hereof more effectively in the Buyer the Sellers' Company Shares to
be transferred to it pursuant to the provisions of this Agreement. Each of the
parties hereto will cooperate with the other and execute and deliver to the
other party such other instruments and documents and take such other actions as
may be reasonably requested from time to time by such other party as necessary
to cant' out, evidence and confirm the intended purposes of this Agreement. Each
of the parties will cause their respective Affiliates to comply with this
Section to the extent necessary or desirable to fulfill the purposes thereof.
7.5 Additional Post Closing Confidentiality Undertakings. From and after
------------------------------------------------------
the Closing Date, no Seller shall use or take any action whatsoever which would
result in disclosure to any
-21-
CONFIDENTIAL
third party of any information about the Company Business; provided, however,
that no Seller shall be required to maintain confidential any information which:
(a) is known or available to the public prior to the date hereof or becomes
known or available to the public after the date hereof through no fault of any
such Seller; (b) is obtained from a third party which had the right to disclose
such information; (c) is subsequently disclosed or made public by the Buyer or
any of its Affiliates, the Company or a Governmental Authority; or (d) is
disclosable pursuant to a Requirement of Law. Pursuant to the terms thereunder,
that certain Confidentiality Agreement, entered into by and between the parties
hereto and dated as of December 8, 2000, shall survive according to its terms
any termination of this Agreement.
7.6 Non-Solicitation. For a period of twenty-four (24) months following the
----------------
Closing Date:
(a) no Seller shall, directly or indirectly, solicit (with the
exception of any general solicitation of employment through any general
advertising medium in the ordinary course of business) for employment as an
employee or consultant, any employee who works or provides services for the
Company or any other member of the Iusacell Group unless such employee's
employment is or has been terminated by the Company or such other member of the
Iusacell Group;
(b) no Seller shall, directly or indirectly, solicit from the Company
or any. other member of the Iusacell Group any Person which is a subscriber of
the Company or such other member of the Iusacell Group on the Closing Date (the
"Company Subscribers") other than pursuant to general solicitation for
subscribers that are not directed specifically at the Company Subscribers; and
(c) the Buyer shall not, directly or indirectly, solicit (with the
exception of any general solicitation of employment through any general
advertising medium in the ordinary course of business) for employment as an
employee or consultant, any employee who works or provides services for Grupo
Iusa, S.A. de C.V. unless such employee's employment is or has been terminated
by Grupo Iusa, S.A. de C.V.
7.7 Contents of Agreement. This Agreement shall not be amended or modified
---------------------
except by written instrument duly executed by each of the parties hereto.
7.8 Assignment and Binding Effect. This Agreement may not be assigned prior
-----------------------------
to the Closing by the Sellers or by the Buyer without the prior written consent
of the other party; provided, that notwithstanding anything to the contrary
herein (a) the Sellers shall have the right to assign this Agreement to an
Affiliate, (b) the Buyer may assign this Agreement, or the right to acquire all
or parts of the Sellers' Company Shares, to one or more Affiliates of the Buyer
(provided that such Affiliates are organized outside of Mexico), provided in
each such case contemplated by the foregoing clauses (a) and (b) that such
assignee agrees in writing with the other party to be bound hereby as if such
assignee were the assigning party and to assume all of the liabilities and
obligations of the assigning party, and provided further than the assigning
party shall not be released from any of its liabilities or obligations under
this Agreement and the assigning party shall remain jointly liable (obligados
solidarios) for all of the assigning party's liabilities and obligations
hereunder.
-22-
CONFIDENTIAL
7.9 Waiver. No waiver of any term or provision of this Agreement shall be
------
effective unless in writing, signed by the Party against whom enforcement of the
same is sought. The grant of a waiver in one instance does not constitute a
continuing waiver in all similar instances. No failure to exercise, and no delay
in exercising, by any party, any right, remedy, power or privilege hereunder
shall operate as a waiver thereof.
7.10 Notices. Any notice, request, demand, waiver, consent, approval or
-------
other communication which is required or permitted hereunder shall be in writing
and shall be deemed delivered (a) upon personal delivery; (b) upon the sender's
receipt of electronic confirmation of transmission, if sent by telex or
facsimile; or (c) upon receipt if sent by mail or courier. The parties designate
the following addresses for the foregoing legal purposes:
If to the Sellers, to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇▇ # ▇▇▇▇, ▇▇
Col. Lomas Altas
Mexico, D.F. 11950
Facsimile: 52-61-8959
With a required copy to (which shall not itself constitute notice):
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇▇ # ▇▇▇▇, ▇▇
Col. Lomas Altas
Mexico, D.F. 11950
Facsimile: 52-61-8959
With a required copy to (which shall not itself constitute notice):
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇▇ # ▇▇▇▇, ▇▇
Col. Lomas Altas
Mexico, D.F. 11950
Facsimile: 52-61-8959
If to the Buyer, to:
Vodafone Americas B.V.
Max ▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Attention: ▇▇▇▇ de Rijk and ▇▇▇ ▇▇ ▇▇▇▇▇
Facsimile: ▇▇-▇▇-▇▇▇-▇▇▇▇
-23-
CONFIDENTIAL
With a required copy to (which shall not itself constitute notice):
Vodafone Americas Asia Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇
Attention: Legal Department
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a required copy to (which shall not itself constitute notice):
Pillsbury Winthrop LLP
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
The parties may amend the above-mentioned data by notice to the other party, as
provided in this Section.
The Sellers hereby agree to a common action (litisconsorcio pasivo) in the
event of any arbitral proceeding arising out of or relating to this Agreement
and, as contemplated in Section 7.3 of this Agreement, the Sellers hereby
appoint the Seller Representative as their sole and common representative,
designating the common address indicated above for all such purposes.
7.11 Remedies.
--------
(a) In the event that the Sellers breach the provisions of Section
4.1.2 hereof, the Sellers shall pay the Buyer as liquidated damages (▇▇▇▇
convencional), the amount of one hundred million dollars (US$100.000,000). In
the event the Buyer breaches the provisions of Section 4.2.2 hereof, the Buyer
shall pay the Sellers as liquidated damages, the amount of one hundred million
dollars (US$ 100,000,000).
(b) The Parties acknowledge and agree that the Sellers' Company Shares
are unique and that, prior to Closing, remedies at law, including monetary
damages, will be inadequate in the event of a breach or threatened breach by the
Sellers or the Buyer, respectively, in the performance of their obligations
under this Agreement. Accordingly, the Parties agree that in the event of any
such breach, or threatened breach, prior to Closing, the non-breaching party
shall be entitled to a decree of specific performance pursuant to which the
breaching Party is ordered to affirmatively carry out its pre-closing
obligations under this Agreement.
(c) The foregoing provisions of this Section shall not be deemed to be
or construed as a waiver or election of remedies by the non-breaching Party and
the non-breaching Party expressly reserves any and all rights and remedies
available to it at law in the event of any breach or default by the breaching
Party under this Agreement prior to Closing.
-24-
CONFIDENTIAL
7.12 Governing Law: Dispute Resolution.
---------------------------------
(a) Governing Law. This Agreement shall in all respects be governed by
-------------
and construed in accordance with the laws of the United Mexican States
applicable to agreements made and to be performed entirely within the Federal
District, including all matters of construction, validity and performance.
(b) Arbitration. Except as expressly provided otherwise in this
-----------
Agreement, in the event of any dispute, controversy or claim arising out of or
relating to this Agreement, or to the breach or termination hereof (a
"Dispute"), the parties agree to resolve the same as follows:
-------
(i) The parties to the Dispute shall initially attempt to resolve
it through consultations and negotiations.
(ii) If the Dispute has not been resolved amicably within thirty
(30) Business Days after any party provides notice thereof, unless the
parties agree otherwise, the Dispute shall be resolved by final and binding
arbitration in New York, New York. USA, in accordance with the
International Rules of the American Arbitration Association, as in effect
on the Effective Date. The language to be used in the arbitral proceeding
shall be English. The arbitrators shall render a written award stating the
reasons for the decision. Judgment on an arbitral award or decision may be
entered by any court of competent jurisdiction, or application may be made
to such a court for judicial acceptance of the award or decision and any
appropriate order, including enforcement (homologacion).
(iii) Each of the parties consents to the submission of any Dispute
for settlement by final and binding arbitration in accordance with clause
(ii) above, and hereby waives any other forum that may apply to it by
reason of its present or future domicile, or for any other reason. Such
consent shall satisfy the requirements for:
(A) A written arbitration agreement among the parties pursuant
to Article I of the Inter-American Convention on International
Commercial Arbitration (Convention Interamericana sobre Arbitraje
Comercial International), promulgated in Panama on January 30,
1975;
(B) An "agreement in writing" pursuant to Article II of the
United Nations Convention on the Recognition and Enforcement of
Foreign Arbitral Awards, done at New York on June 10, 1958; and
(C) A written arbitration agreement among the parties pursuant
to Article 1423 of the Mexican Commercial
Code.
(iv) The parties hereby , agree to continue to perform their
obligations hereunder while any Dispute is pending.
(v) Each of the parties hereby undertakes to carry out without
delay the provisions of any arbitral award or decision.
-25-
CONFIDENTIAL
7.13 No Benefit to Others. The representations, warranties, covenants and
--------------------
agreements contained in this Agreement are for the sole benefit of the Parties
hereto and their respective heirs, executors, administrators, legal
representatives, successors and permitted assigns, and they shall not be
construed as conferring any rights on any other Persons.
7.14 Headings. All section headings contained in this Agreement are for
--------
convenience of reference only, do not form a part of this Agreement and shall
not affect in any way the meaning or interpretation of this Agreement.
7.15 Severability. Any provision of this Agreement which is invalid. or
------------
unenforceable in any jurisdiction shall be ineffective to the extent of such
invalidity or unenforceability without invalidating or rendering unenforceable
the remaining provisions hereof, and such invalidity or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provisions in any
other jurisdiction.
7.16 Counterparts. This Agreement may be executed in any number of
------------
counterparts and any party hereto may execute any such counterpart, each of
which when executed and delivered shall be deemed to be an original and all of
which counterparts taken together shall constitute but one and the same
instrument. This Agreement shall become binding when one or more counterparts
taken together shall have been executed and delivered by all of the parties. It
shall not be necessary in making proof of this Agreement or any counterpart
hereof to produce or account for any of the other counterparts.
7.17 Publicity. The Sellers agree that all press releases and public
---------
statements relating. to the transactions contemplated by this Agreement shall be
made on their behalf by the Seller Representative. The Buyer and the Seller
Representative agree to consult with each other in issuing any press release or
otherwise making any public statement with respect to the transactions
contemplated by this Agreement or the other party, and they agree that they will
not issue any press release or make any such public statement prior to such
consultation and giving each other a reasonable opportunity to review and
comment on any such proposed press release or public statement, except as may be
required by law.
-26-
CONFIDENTIAL
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on
the date first written above.
VODAFONE AMERICAS B.V.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Under Power of Attorney Granted
March 20, 2001
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Quintero
FIUSA PASTEJE, S.A. DE C.V.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President and Chairman of the Board
/s/ ▇▇▇▇▇ del ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------------------------
▇▇▇▇▇ del ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Canovas
---------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Canovas
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Canovas
---------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Canovas
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-27-
CONFIDENTIAL
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇ de ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------------------------
▇▇▇▇▇ de ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
/s/ Anacarsis ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------------------------
Anacarsis ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-28-
CONFIDENTIAL
EXHIBIT A
OWNERSHIP AND SALE OF THE SELLERS' COMPANY SHARES
# of % of # of # of % of
Series A Series V % of Company Company
Shares Series A Shares Series V Shares Shares
Seller Being Sold Shares Being Sold Shares Being Sold Being Sold
--------------------------- ----------- ----------- ----------- ----------- ----------- -----------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 232,499,437 31.55% 215,122,335 31.16% 447,621,772 31.36%
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Canovas 10,905,028 1.58 10,905,028 0.76
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 8,115,149 1.18 8,115,149 0.57
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Canovas 7,722,028 1.13 7,722,028 0.54
Fiusa Pasteje, S.A. de C.V. 5,044,619 0.73 5,044,619 0.35
▇▇▇▇▇ del Carmcn ▇▇▇▇▇▇▇ 4,034,978 0.58 4,034,978 0.28
▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ 4,013,086 0.58 4,013,086 0.28
Anacarsis ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 1,546,454 0.22 1,546,454 0.11
▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ 1,545,598 0.22 1,545,598 0.11
▇▇▇▇▇ de ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 1,491,454 0.22 1,491,454 0.10
▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 776,174 0.11 776,174 0.05
--------------------------- ----------- ----------- ----------- ----------- ----------- -----------
Totals 232,499,437 31.55% 260,316,903 37.71% 492,816,340 34.53%
------
CONFIDENTIAL
EXHIBIT B
SUBSIDIARIES OF GRUPO IUSACELL, S.A. DE C.V.
Subsidiary % direct and indirect % direct and indirect voting
economic interest interest
--------------------------------------------------------- --------------------------- -----------------------------------
Grupo Iusacell Celular. S.A. de C.V. 99.9% 99.9%
--------------------------------------------------------- --------------------------- -----------------------------------
Iusacell PCS, S.A. de C.V. 94.9% 49%
--------------------------------------------------------- --------------------------- -----------------------------------
Iusacell Infraestructura, S.A. de C.V. 100% 100%
--------------------------------------------------------- --------------------------- -----------------------------------
Iusacell Arrendadora, S.A. de C.V. 100% 100%
--------------------------------------------------------- --------------------------- -----------------------------------
Iusacell Infraestuctura de Mexico, S.A. de C.V. 100% 100%
--------------------------------------------------------- --------------------------- -----------------------------------
SOS Telecomunicaciones, S.A. de C.V. 100% 100%
--------------------------------------------------------- --------------------------- -----------------------------------
Comumcaciones Celulares de Occidente. S.A. de C.V. 100% 100%
--------------------------------------------------------- --------------------------- -----------------------------------
Sistemas Telefonicos Portatiles Celulares. S.A. de C.V. 100% 100%
--------------------------------------------------------- --------------------------- -----------------------------------
Telecomunicaciones del Golfo, S.A. de C.V. 100% 100%
--------------------------------------------------------- --------------------------- -----------------------------------
Iusacell, S.A. de C.V. 100% 100%
--------------------------------------------------------- --------------------------- -----------------------------------
Sistecel, S.A. de C.V. 100% 100%
--------------------------------------------------------- --------------------------- -----------------------------------
Iusatel, S.A. de C.V. 94.9% 49%
--------------------------------------------------------- --------------------------- -----------------------------------
Iusatelecomunicaciones, S.A. de C.V. 94.9% 49%
--------------------------------------------------------- --------------------------- -----------------------------------
Punto a Punto Iusacell, S.A. de C.V. 94.9% 49%
--------------------------------------------------------- --------------------------- -----------------------------------
Infotelecom, S.A. de C.V. 49% 49%
--------------------------------------------------------- --------------------------- -----------------------------------
Inmobiliaria ▇▇▇▇▇▇ Urales 460, S.A. de C.V. 100% 100%
--------------------------------------------------------- --------------------------- -----------------------------------
Iusanet, S.A. de C.V. 100% 100%
--------------------------------------------------------- --------------------------- -----------------------------------
In Fligh Phone de Mexico, S.A. de C.V. 100% 100%
--------------------------------------------------------- --------------------------- -----------------------------------
Editorial Celular. S.A. de C.V. 40% 40%
--------------------------------------------------------- --------------------------- -----------------------------------
Promotora Celular, S.A. de C.V. 100% 100%
--------------------------------------------------------- --------------------------- -----------------------------------
Mexican Cellular Investment, Inc. 100% 100%
--------------------------------------------------------- --------------------------- -----------------------------------
Grupo Iusacell Nicaragua, S.A. 100% 100%
--------------------------------------------------------- --------------------------- -----------------------------------
Radiotelefonia Rural de Nicaragua S.A. 80% 80%
--------------------------------------------------------- --------------------------- -----------------------------------
CONFIDENTIAL
EXHIBIT C-1
TELECOMMUNICATIONS LICENSES
HELD BY THE COMPANY
The following list includes all relevant concessions, permits,
authorizations, registries, and any other document whereby the MCT has granted
to any of the GRUPO IUSACELL'S Companies the corresponding rights to provide
telecommunication services.
I. CONCESSIONS
-----------
1. SERVICIO ORGANIZADO SECRETARIAL, S.A. (SOS). Concession granted on April
1st, 1957. SOS is authorized to install, operate and exploit, the radio
electric equipment (fixed and mobile) in order to provide the public service
of telephony from vehicles within all the Mexican territory. The term of the
concession is of 50 years.
a) Authorization granted to SOS on July 11, 1986. SOS is authorized to
install, operate, maintain and exploit the radiotelephony service
through its network. SOS shall provide this service within the 138-144
MHz frequency band.
b) Authorization granted to SOS on October 3rd, 1989. This authorization is
part of the concession above referred and it is binding in all the terms
derived therein, and hereto. SOS is authorized to incorporate cellular
technology to the public radiotelephony service in the region that
includes Mexico City, State of Mexico, Morelos and ▇▇▇▇▇▇▇. SOS shall
operate within the 333 pairs of frequencies on the 825-835/870-888 MHz
bands with a 30 KHz bandwidth among channels. SOS shall provide through
its network and through any homologated equipment the following
services: (i) urban and suburban radiotelephony, (ii) rural
radiotelephony, (iii) long distance radiotelephony (iv) public radio
telephony from booths. This authorization will be in force during the
term that the SOS's concession is.
c) Authorization granted to SOS on August 11, 1993. SOS is authorized to
incorporate digital technology to the radiotelephony public service. It
is authorized to use the 444-450 MHz frequency bands for transmission
purposes and the 485-495 MHz for reception purposes.
d) Official Communication issued on September 23rd, 1993, whereby the MCT
confirms and emits its criteria in connection with SOS's concession.
e) Official communication granted to SOS on February 2nd, 1994. SOS is
authorized to grant GRUPO IUSACELL, SOS's remaining capacity of its
microwave network GRUPO IUSACELL may transmit voice, data, and
videoconference services through microwave links within SOS's capacity.
f) Authorization granted to SOS on May 18, 1998. SOS is authorized to
provide the paging service consisting in sending short messages through
the cellular radio communication network.
2. TELECOMUNICACIONES DEL GOLFO, S.A. DE C.V. (GOLFO). Concession granted on
July 14, 1990. GOLFO is authorized to construct, install, maintain and
exploit a mobile public radiotelephony network with cellular technology
within the 825-835/870-880 MHz frequency bands. The services will be
provided in the Region 7 "Golfo y Sur" that includes Puebla, Tlaxcala,
Veracruz, Oaxaca and ▇▇▇▇▇▇▇▇. The term of this concession is 20 years.
CONFIDENTIAL
a) Permit granted on October 26, 1994. GOLFO is authorized to provide value
added services through its mobile public radiotelephony network, within
the Region 7 "Golfo y Sur". The value added service authorized consists
in an operator service of messages and making calls upon the customer's
request.
b) Authorization granted on May 18, 1998. GOLFO is authorized to provide
the paging service consisting in sending short messages through the
cellular radiocommunication network.
3. COMUNICACIONES CELULARES DE OCCIDENTE, S.A. DE C.V. (COMCEL). Concession
granted on July 17, 1990. COMCEL is authorized to construct, install,
maintain, operate and exploit a public mobile radiotelephony network with
cellular technology within the 825-835/870-880 MHz frequency bands in the
Region 5 "Occidente" which includes Jalisco, Nayarit, Colima and Michoacan:
and excluding the municipalities of Huejucar, Santa ▇▇▇▇▇ de los Angeles,
Colotlan, Teocaltiche, Huejuquilla, Mesquitic, Villa Guerrero, Bolanos,
Lagos ▇▇ ▇▇▇▇▇▇, Ojuelos and ▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇. The term of the concession
is 20 years.
a) Permit issued by the MCT on October 26, 1994. COMCEL is authorized to
provide value added service consisting in an operator service of
messages and making calls upon the customer's request.
b) Authorization granted to COMCEL on May 18, 1998. COMCEL is authorized to
provide the paging service consisting in sending short messages through
the cellular radio communication network.
4. SISTEMAS TELEFONICOS PORTATILES CELULARES, S.A. DE C.V. (PORTACEL).
Concession granted on July 23rd, 1990. PORTACEL is authorized to construct,
install, maintain, operate and exploit a public mobile radiotelephony
network with cellular technology within the 825-835/870-880 MHz frequency
bands. This concession corresponds to the Region 6 "Centro", that includes
Aguascalientes, San ▇▇▇▇ Potosi, Zacatecas, Guanajuato, Queretaro and the
municipalities of Huejucar, Santa ▇▇▇▇▇ de los Angeles, Colotlan,
Teocaltiche, Huejuquilla, Mesquitic, Villa Guerrero, Bolonos, Lagos ▇▇
▇▇▇▇▇▇, Villa ▇▇▇▇▇▇▇, Ojuelos and Encamacion de los ▇▇▇▇. The term of the
concession is of 20 years.
a) Amendment to PORTACEL's concession, issued on April lst, 1991. PORTACEL
shall pay to the Mexican Government $14'841,750.00 Pesos (Mx Cy.) and 7%
of its incomes, after deductions, obtained for the services provided in
connection to PORTACEL's concession.
b) Permit granted to PORTACEL on October 28, 1994. PORTACEL is authorized
to provide value added services through its mobile public radiotelephony
network, within the Region 6 "Centro". The value added service
authorized consists in an operator service of messages and making calls
upon the customer's request.
c) Authorization granted to PORTACEL on May 18, 1998. PORTACEL is
authorized to provide the paging service consisting in sending short
messages through the cellular radio communication network.
5. IUSACEL S.A. DE C.V. (IUSACEL). Concession granted on October 16, 1995.
IUSACEL is authorized to install, operate and exploit a public
telecommunications network to provide the long distance telephony service.
The term of the concession is thirty (30) years.
-2-
CONFIDENTIAL
a) Amendment to IUSATEL's concession, issued on December 17, 1997. The
following revisions are made: (i) USACEL is authorized to revise the
terms related to the expansion commitments of its network contained in
Section A.4, Annex A of its concession, (ii) revision of Section 4.3
whereby the technical description of the network project is modified in
connection to transmission, fiber, microwave links, satellite links,
signaling and commutation, and synchronization matters.
6. PUNTO-A-PUNTO IUSACEL, S.A. DE C.V. (PAP). Concession granted on June 4,
1998. PAP is authorized to use, profit and exploit frequency bands,
specifically the 22,000.0-22.050.0 MHz / 123,200.0-23,250.0 MHz bands with a
100 MHz bandwidth among channels. It may provide capacity to microwave point
to point links. The term of this concession is 20 years.
7. PUNTO-A-PUNTO IUSACEL, S.A. DE C.V. (PAP). Concession granted on June 4,
1998. PAP is authorized to use, profit and exploit frequency bands,
specifically the 21,950.0-22,000.0 MHz / 23,150.0-23,200.0 MHz bands with a
100 MHz bandwidth among channels. It may provide capacity to microwave point
to point links. The term of this concession' is 20 years.
8. PUNTO-A-PUNTO IUSACEL, S.A. DE C.V. (PAP). Concession granted on June 4,
1998. PAP is authorized to use, profit and exploit frequency bands
14,760.0/14,788.0 MHz / 15,075.0-15,103.0 MHz bands with a 56 MHz bandwidth
among channels. It may provide capacity to microwave point to point links.
The term of this concession is 20 years.
9. IUSACEL PCS, S.A. DE C.V. (PCS). Concession granted on October 12, 1998. PCS
is authorized to install, operate and exploit a public telecommunication
service, in order to provide the wireless, fixed or mobile, access service
within Regions 1 and 4. Region 1 includes Baja California Norte and Baja
California Sur and the municipality of San ▇▇▇▇ Rio Colorado, Sonora. Region
4 includes Tamaulipas, Nuevo ▇▇▇▇, (excluding the municipalities of Torreon,
▇▇▇▇▇▇▇▇▇ ▇. Madero, Matamoros, San ▇▇▇▇▇ and Viesca) Coahuila. The term of
this concession is 20 years.1
10. IUSACEL PCs, S.A. DE C.V. (PCS). Concession granted on October 12, 1998. PCs
is authorized to use, profit and exploit a public frequency band network
service, in order to provide the wireless, fixed or mobile, access service
within Region 4. Region 4 includes Tamaulipas, Nuevo ▇▇▇▇, and Coahuila,
excluding the municipalities of Torreon, ▇▇▇▇▇▇▇▇▇ ▇. Madero, Matamoros, San
▇▇▇▇▇ and Viesca. The term of this concession is 20 years.
11. IUSACEL PCs, S.A. DE C.V. (PCs). Concession granted on October 12, 1998. PCs
is authorized to use, profit and exploit a public frequency band network
service. In order to provide the wireless, fixed or mobile, access service
within Region 1. Region 1 includes Baja California Norte and Baja California
Sur and the municipality of San ▇▇▇▇ Rio Colorado, Sonora. The term of this
concession is 20 years.
--------
1 PCS public telecommunications network concession for Region 1 and 4, frequency
bands concession for Region 1, and the frequency bands concession for Region 4,
shall be considered a whole concession in accordance to the Federal
Telecommunications Law.
-3-
CONFIDENTIAL
II. PERMITS
-------
1. SATELITRON S.A. de C.V. (SATELITRON) is granted a permit dated December 15,
1991. SATELITRON is authorized to install, operate and exploit a network
through satellites. The term of this permit is 15 years.
2. SOS. The following are the private radio communication permits granted in
favor of SOS:
a) Permit granted on July 28, 1990 to SOS by the MCT in order to install
and operate 3 private local microwave links within the State of Mexico
and 3 private local microwaves link within Mexico City, Federal
District.
b) Permit granted on February 16, 1993 to SOS by the MCT in order to
install and operate 11 private local microwave links within the State of
Mexico and Mexico City, Federal District.
c) Permit granted on October 20, 1993 to SOS by the MCT in order to install
and operate 59 private local microwave links within the States of
Hidalgo, Morelos, State of Mexico and Mexico City, Federal District.
d) Permit granted on September 8, 1994 to SOS by the MCT in order to
install and operate 7 private local microwaves links within the State of
Mexico and Mexico City, Federal District.
e) Permit granted on November 14, 1994 to SOS by the MCT in order to
install and operate 11 private local microwave links within the State of
Mexico and Mexico City, Federal District.
f) Permit granted on December 6, 1994 to SOS by the MCT in order to install
and operate 12 private local microwave links within the states of
▇▇▇▇▇▇▇, State of Mexico and Mexico City, Federal District.
g) Permit granted on December 7, 1994 to SOS by the MCT in order to install
and operate 4 private local microwave links within the State of Mexico.
h) Permit granted on February 25, 1994 to SOS by the MCT in order to
install and operate 33 private local microwave links within the states
of ▇▇▇▇▇▇▇, State of Mexico and Mexico City, Federal District.
-4-
CONFIDENTIAL
EXHIBIT C-2
TELECOMMUNICATIONS LICENSES
HELD BY THIRD PARTIES AND USED BY THE COMPANY
The following list includes a description of such Telecommunications
Licenses held by third parties which are necessary to conduct the Company
Business as well as a description of such agreements which are necessary to
conduct the Company Business.
I. 7 GHZ
-----
On December 1998, the SCT issued three twenty years concessions to Punto a Punto
Iusacell, S.A. de C.V., for short haul microwave frequencies in the 15 GHz and
23 GHz frequency bands won at auction. These frequencies are being used to
interconnect cell sites, business customers and other networks. Punto a Punto
Iusacell participated in the auctions for long haul microwave frequencies in the
7 GHz frequency band that began in March 1999 and concluded in July 1999.
However, Punto a Punto Iusacell did not win any concession in these auctions.
Punto a Punto Iusacell has entered into an agreement with Grupo de
Telecomunicaciones Mexicanas, S.A. de C.V., an affiliate of the service provider
in the four Cellular A-Band regions in northern Mexico to swap the right to use
long haul microwave frequency links held by Grupo de Telecomunicaciones
Mexicanas, S.A. de C.V. plus US$ 2.45 million in cash.
II. PAGING
------
Iusacell is riot the holder for the concession to provide paging services.
Pursuant to a marketing agreement between Iusacell and Infomin, Infotelecom,
S.A. de C.V. has the right to market national paging services on behalf of
Infomin, and Infotelecom is required to make monthly payments to Infomin equal
to 5% of all gross revenues for the preceding month. This payment represents the
amount which Infomin, as the concession holder, must pay the SCT for the right
to provide paging services.
Infomin concession is a concession granted by the Communications and
Transportation Ministry on July 20. 1994. Infomin is authorized to construct,
install, maintain, operate an exploit a public telecommunications network to
provide paging services nationwide within the 931.8875 MHz. On January 12, 2000,
the Communications and Transportation Ministry granted to Infomin, the
authorization to assign such concession to Infotelecom. The Company expects to
complete such assignment by March, 2001.
CONFIDENTIAL
EXHIBIT D
FORMS OF LEGAL OPINIONS
OPINION OF BUYER'S COUNSEL 2001
-------------------------------
_________, 2001
The Sellers
▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇▇ # ▇▇▇▇, ▇▇
Col. Lomas Altas
Mexico, D.F. 11950
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Dear Ladies and Gentlemen:
In connection with that certain Conditional Purchase and Sale Agreement
effective as of 5 January, 2001 (the "Agreement") by and among Vodafone Group
Plc ("Vodafone") and you as the shareholders of Grupo Iusacell, S.A. de C.V.
(the "Company") set forth on Exhibit A of the Agreement, including Ing. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ as your representative, and in connection with the assignment
of Vodafone's rights and obligations under the Agreement to Vodafone Americas
B.V., an affiliate of Vodafone. I have acted as counsel to Vodafone. an English
public limited company. This opinion is being rendered pursuant to Section
2.1.1(a)(iv) of the Agreement. Capitalized terms used but not defined herein
have the same meanings ascribed to them in the Agreement.
In connection with the rendering this opinion, I have examined and am
familiar with originals or copies, certified or otherwise identified to our
satisfaction, of:
(i) The Agreement as in effect on the Closing Date;
(ii) A Certificate of Good Standing for Vodafone dated 5 January 2001 and
certain powers of attorney issued to certain individuals by Vodafone; and
(iii) Such other agreements, documents, certificates and corporate or other
records as I have deemed necessary or appropriate as a basis for the opinions
set forth below.
In my examination, I have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to me as originals, the conformity to original documents of all
documents submitted to me as certified or photostatic copies and the
authenticity of the originals of such copies. As to any facts material to this
opinion which I did not independently establish or verify, I have relied upon
statements and representations of officers and other representatives of
Vodafone.
I am an attorney admitted to practice law in England and do not express any
opinion as to the laws of any jurisdiction other than England and the political
subdivisions thereof.
CONFIDENTIAL
Based upon the foregoing, and having regard for such other considerations
as I deem relevant, and subject to the qualification set forth below, I am of
the opinion that the Agreement to which Vodafone is a party constitutes a legal,
valid and binding obligation of such entity, enforceable against Vodafone in
accordance with its terms.
Thus opinion is subject to the qualification that enforcement may be
limited or affected by suspension of payments, bankruptcy, insolvency,
liquidation, reorganization, moratorium or other similar laws of general
application relating to or affecting the rights of creditors generally.
This opinion is furnished solely for your benefit in connection with the
Closing under the Agreement, and is not to be used, circulated, quoted or
otherwise referred to for any other purpose without our express written
permission.
Very truly yours,
▇▇▇▇▇▇▇ ▇▇▇▇▇, Solicitor
Company Secretary
-2-
CONFIDENTIAL
OPINION OF COUNSEL TO THE SELLERS
---------------------------------
_________, ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ B.V.
Max ▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Attention: Legal Department
Dear Sirs:
In connection with that certain Amended and Restated Conditional Purchase
and Sale Agreement effective as of March 30, 2001 by and among Ing. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, certain other shareholders of Grupo Iusacell, S.A. de C.V.
(the "Company") and you (the "Agreement"), we have acted as special Mexican
counsel to Ing. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, a Mexican citizen, and those certain
other shareholders of the Company as set forth on Exhibit A of the Agreement
(each, a "Seller" and collectively, the "Sellers"). This opinion is being
rendered pursuant to Section 2.1.1(a)(ii) of the Agreement. Capitalized terms
used but not defined herein have the same meanings ascribed to them in the
Agreement.
In connection with rendering this opinion, we have examined originals or
copies, certified or otherwise identified to our satisfaction, of
(iv) The Agreement;
(v) The bylaws (estatutos sociales) of the Company and of FIUSA Pasteje,
S.A. de C.V.; and
(vi) Such other agreements. documents, certificates and corporate or other
records as we have deemed necessary or appropriate as a basis for the opinions
set forth below.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies. As to any facts material to this
opinion which we did not independently establish or verify, we have relied upon
statements and representations of officers and other representatives of the
Company, other members of the Iusacell Group, the Sellers and the Seller
Representative.
Based upon the foregoing, and subject to the qualifications set forth
below, we are of the opinion that:
1. The Agreement to which Ing. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and the other
Sellers are parties constitutes a legal, valid and binding obligation of such
individuals and/or entities (as applicable), enforceable against each of the
Sellers in accordance with its terms.
CONFIDENTIAL
2. The obligations of Ing. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and the other Sellers
under the Agreement are, as set forth therein. not contrary to Mexican public
policy (orden piublico) within the meaning of Article 1462(11) of the Mexican
---------------
Commercial Code (Codigo de Comercio).
------------------
This opinion is subject to the following qualifications:
(A) Enforcement may be limited or affected by concurso mercantil,
bankruptcy, insolvency, liquidation, reorganization, moratorium and
other similar laws of general application relating to or affecting the
rights of creditors generally; also pursuant to the laws of Mexico,
labor claims, claims of tax authorities for unpaid taxes will have
priority over claims of any of the parties to the Agreement;
(B) Covenants to any of the parties which purport to bind it on matters
reserved by law to shareholders, or which purport to bind shareholders
to vote or refrain from voting their shares in the Company or its
Subsidiaries, are not specifically enforceable under Mexican Law.
(C) We express no opinion as to the laws of any jurisdiction other than the
laws of the United Mexican States (Estados Unidos Mexicanos)
-----------------------------
("Mexico");
(D) Claims may become barred under the statutes of limitation or may be or
become subject to defenses or set-off or counterclaim;
(E) The exercise of any prerogatives of the parties to the Agreement
although they may be discretionary should be supported by the factual
assumptions required for their reasonable exercise: in addition, under
Mexican law, the parties will have the right to contest in court any
notice purporting to be conclusive and binding;
(F) In the event that proceedings are brought in Mexico seeking performance
of any payment obligations of any of the parties to the Agreement or
the enforcement of a judgment in Mexico against any of the parties to
the Agreement, the corresponding party may discharge its obligations by
paying any sums due in a currency other than Mexican currency, in
Mexican pesos at the rate of exchange prevailing on the date when
payment is made, as published by Banco de Mexico in the Diario Oficial
de la Federacion;
(G) In the event that any legal proceedings are brought before the courts
of Mexico, including proceedings relating to the recognition and
enforcement of arbitration awards, (i) a Spanish translation prepared
by a court-approved translator of the documents is required in such
proceedings, which translation would have to be approved by the court
after the parties to the relevant proceedings have been given an
opportunity to be heard with respect to the accuracy of the
translation, and proceedings would thereafter be based upon the
translated documents., and (ii) foreign public documents will require
legalization before the appropriate Mexican consulate as provided for
by Article 1248 of the Mexican Commerce Code (Codigo de Comercio);
-------------------
-2-
CONFIDENTIAL
(H) We express no opinion with regard to any representations or warranty
made in the Agreement or which may be made by any of the parties in any
other document; and
(I) Any final award rendered against the Sellers by an arbitration panel
duly appointed and empowered in accordance with the Agreement that
specifies arbitration as a dispute resolution mechanism (the
"Arbitration Agreement"), would be recognized and enforced against the
---------------------
Sellers, by the courts of Mexico without re-examination of the merits
pursuant to Articles 1461 and 1462 of the Mexican Commerce Code and the
New York Convention on the Recognition of and Enforcement of Foreign
Arbitral Awards. However, enforcement of an arbitral award against the
Sellers, may be denied if:
(i) one of the parties to the Arbitration Agreement did not have
sufficient legal capacity to enter into such arrangement or such
arrangement is not valid under the laws chosen by the parties (in
our opinion, the Sellers have legal capacity to enter into the
Arbitration Agreement);
(ii) service of process or any other notification required under the
arbitration procedure (including that relating to the designation
of arbitrators) was not made or served properly according to the
applicable law chosen by the parties in the Arbitration Agreement
on the Sellers or on the appropriate process agent (a court of
Mexico would consider the service of process upon the duly
appointed agent to whom a power of attorney has been granted in
accordance with Mexican law by means of .a notarial instrument, to
be personal service of process meeting procedural requirements of
Mexico);
(iii)the award refers to a controversy which, under the terms of the
Arbitration Agreement, was not subject to arbitration or contains
a decision that exceeds the terms of such Arbitration Agreement;
(iv) the arbitration panel was not appointed, or the arbitration
proceedings were not carried out, in accordance with the
Arbitration Agreement;
(v) the award is not binding or has been declared null or has been
suspended by a court of the country whose law was chosen as the
applicable law under the Arbitration Agreement;
(vi) the subject matter of the arbitration procedure cannot be
arbitrated or the enforcement of the award is contrary to Mexican
law, public policy of Mexico, international treaties or agreements
binding upon Mexico. In this case, enforcement of the award may
also be denied if Constitutional protection is granted to the
Borrower under an ▇▇▇▇▇▇ proceeding; or
(vii) the award is not final in the jurisdiction where obtained.
This opinion is limited solely to questions arising under the laws of
Mexico in effect as of the date hereof.
-3-
CONFIDENTIAL
This opinion is furnished solely for your benefit in connection with the
Closing under the Agreement, and is not to be used, circulated, quoted or
otherwise referred to for any other purpose without our express written
permission.
Very truly yours,
FRANCK, GALICIA, DUCLAUD Y ▇▇▇▇▇▇, S.C.
By:
-----------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ R.
Partner
-4-
CONFIDENTIAL
OPINION OF BUYER'S MEXICAN COUNSEL
----------------------------------
_____________, 2001
The Sellers
▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇▇ # ▇▇▇▇, ▇▇
Col. Lomas Altas
Mexico, D.F. 11950
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Dear Ladies and Gentlemen:
In connection with that certain Amended and Restated Conditional Purchase
and Sale Agreement effective as of March 30, 2001 (the "Agreement") by and among
Vodafone Americas B.V. ("Vodafone") and you as the shareholders of Grupo
Iusacell, S.A. de C.V. (the "Company") set forth on Exhibit A of the Agreement,
including Ing. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ as your representative, we have acted as
Mexican counsel to Vodafone, a company incorporated and existing under the laws
of the Netherlands. This opinion is being rendered pursuant to Section
2.1.1(a)(iv) of the Agreement. Capitalized terms used but not defined herein
have the same meanings ascribed to them in the Agreement.
In connection with rendering this opinion, we have examined and are
familiar with originals or copies, certified or otherwise identified to our
satisfaction, of:
(i) The Agreement; and
(ii) Such other agreements, documents, certificates and corporate or other
records as we have deemed necessary or appropriate as a basis for the opinions
set forth below.
In such examination, we have assumed and not verified the legal capacity of
all natural persons, the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies and the
conformity to authentic original documents of all documents submitted to us as
copies. As to any facts material to this opinion, we have relied with your
permission upon statements and representations of officers and other
representatives of Vodafone.
In addition, we have assumed, with your permission, that each Person (i)
has been duly organized and is validly existing under the laws of its
jurisdiction of organization, (ii) is duly qualified to engage in the activities
and consummate the transactions contemplated by and under the Agreements to
which it is a party under the laws of its jurisdiction of organization, and
(iii) has all requisite organizational and other powers and authority to execute
and deliver, and to perform its obligations under the Agreement under the laws
of the its jurisdiction of organization. We are a Mexican law firm with lawyers
admitted to practice law only in Mexico and do not express any opinion as to the
laws of any jurisdiction other than the United Mexican States and the political
subdivisions thereof ("Mexico").
CONFIDENTIAL
Based upon the foregoing, and having regard for such other considerations
as we deem relevant, and subject to the qualifications set forth below, we are
of the opinion that the Agreement to which Vodafone is a party constitutes a
legal, valid and binding obligation of such entity, enforceable against Vodafone
in accordance with its terms.
This opinion is subject to the following qualifications:
(a) enforcement of the Agreement may be subject to the limitations
imposed by concurso mercantil, bankruptcy, suspension of payments, insolvency,
fraudulent conveyance, liquidation, reorganization, moratorium and other similar
laws affecting the enforcement of creditors' rights generally or the public
policy of Mexico:
(b) (i) actions or claims against Vodafone under the Agreement will be
subject to applicable statutes of limitations, defenses, set-off and
counterclaim and (ii) in any proceedings brought before the courts of Mexico for
the enforcement of the Agreement, or an arbitration award thereunder, a Mexican
court would apply Mexican procedural laws in such proceeding, as well as Mexican
laws on statute of limitations and expiration (prescripcion y caducidad). We
express no opinion as to the enforceability of a foreign judgment arising from
any suit brought or arbitration proceeding initiated once the applicable Mexican
statute of limitations or expiration periods have elapsed;
(c) provisions of the Agreement granting discretionary authority to
any party thereto cannot be exercised in a manner inconsistent with relevant
facts nor defeat any requirement from a competent authority to produce
satisfactory evidence as to the basis of any determination. In addition, under
Mexican law, the parties will have the right to contest in court any
determination, notice or certificate purporting to be conclusive and binding;
(d) in the event that proceedings are brought in Mexico seeking
performance of any payment obligations of Vodafone or the enforcement of a
judgment in Mexico against Vodafone, Vodafone may discharge its obligations by
paying any sums due in a currency other than Mexican currency, in Mexican pesos
at the rate of exchange prevailing on the date when payment is made, as
published by Banco de Mexico in the Diario Oficial de la Federacion;
(e) in the event that any legal proceedings are brought before the
courts of Mexico, including proceedings relating to the recognition and
enforcement of arbitration awards, (i) a Spanish translation prepared by a
court-approved translator of the documents is required in such proceedings,
which translation would have to be approved by the court after the parties to
the relevant proceedings have been given an opportunity to be heard with respect
to the accuracy of the translation, and proceedings would thereafter be based
upon the translated documents and (ii) foreign public documents will require
legalization before the appropriate Mexican consulate as provided for by Article
1248 of the Mexican Commerce Code (Codigo de Comercio);
(f) any covenant, agreement or arrangement which restricts a
shareholder's freedom to vote is null and void in Mexico.
(g) covenants in the Agreement which purport to bind Vodafone on
matters reserved by Mexican law to shareholders, the Board of Directors or other
committees of the
-2-
CONFIDENTIAL
Company, which require certain action of the shareholders, directors or members
of other committees of the Company which purport to bind shareholders, directors
or members of other committees of the Company to vote or refrain from voting, or
take or abstain from taking certain actions are not enforceable in Mexico:
(h) in a concurso mercantil proceeding initiated in the courts of
Mexico pursuant to the laws of Mexico, certain statutorily preferred creditors,
including, labor claims, claims of tax authorities for unpaid taxes, social
security quotas, workers' housing fund quota and retirement fund quota will have
priority over claims of other creditors;
(i) covenants and provisions requiring Vodafone to cause the Company,
Subsidiaries or Persons to carry out or abstain from carrying out certain
actions or become bound under the terms of the Agreements, are not enforceable
in Mexico by specific performance;
(j) a final award rendered against Vodafone by an arbitration panel
that is duly appointed and empowered in accordance with the Agreement that
specifies arbitration as the exclusive dispute resolution mechanism, would be
recognized and enforced against Vodafone by the competent courts of Mexico
without re-examination of the merits pursuant to Article 1461 and 1462 of the
Mexican Code of Commerce (Codigo de Comercio) and the New York Convention on the
Recognition of and Enforcement of Foreign Arbitral Awards; provided, however,
that in accordance with the applicable laws of Mexico, the enforcement of an
arbitration award in Mexico may be denied in the event that:
(i) the party to which the award is adverse and being enforced
upon, proves before the court resolving on the recognition
and enforcement of the arbitration award:
(1) that one of the parties to the arbitration was
incapacitated or that the agreement to submit to
arbitration was illegal in accordance with the
applicable governing law as agreed to by such parties;
(2) that it(he)(she) was not duly notified of the
appointment of an arbitrator or the arbitration
proceedings or actions, or was otherwise impaired or
unable to enforce its(his)(her) rights;
(3) that the award relates to matters not covered within the
arbitration agreement or clause or adopts resolutions
that exceed such an agreement or clause;
(4) that (x) the arbitration panel was not duly appointed,
formed and empowered and (y) the arbitration proceeding
was not conducted, as provided in the arbitration
clause; or
(5) that the award is not binding on the parties or has been
declared null, void or suspended by the courts of the
jurisdiction in which the award was rendered or by the
courts of the jurisdiction corresponding to the
governing law upon which the award was rendered.
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CONFIDENTIAL
(ii) the court resolving with respect to the recognition and
enforcement of the award, determines, in accordance with the
laws of Mexico, that the subject matter of the controversy
submitted and resolved by arbitration could not have been
submitted to, or resolved by arbitration, or that the
recognition and enforcement of the award, is contrary to
public order or policy;
(k) We assume no responsibility for, and have not independently
verified, the accuracy, completeness or fairness nor render any opinion
whatsoever on any representation and warranty, disclosure Schedules and Exhibits
attached to the Agreement or any other document furnished by Vodafone to the
Sellers and/or the Seller Representative in connection with the transactions
contemplated in the Agreement or otherwise any other document related to such
transaction;
This opinion is limited solely to questions arising under the laws of
Mexico in effect as of the date hereof.
This opinion is furnished to you solely for your benefit in connection with
the Closing under the Agreement and is not to be used, circulated, quoted or
otherwise referred to for any other purpose without our express written
permission.
This opinion speaks only as of the date hereof, and we expressly disclaim
any responsibility or duty to advise you or any other Person of any development
or circumstance of any kind, including any change of law or fact that may occur
after the date of this opinion.
Very truly yours,
▇▇▇▇▇, GARCAA-▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇
By:
-------------------------------------------------
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CONFIDENTIAL
EXHIBIT E
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The Sellers hereby represent and warrant to the Buyer that:
1. Incorporation. Authorization: Etc.
----------------------------------
(a) FIUSA is a variable capital stock company (sociedad andnima de capital
variable) duly constituted and validly existing in accordance with the laws of
the United Mexican States, as evidenced by Public Instrument (Escritura Publica)
Number 1,258 dated October 20, 1995, granted before the faith of Lic. ▇▇▇▇▇▇▇▇▇
▇. Huques ▇▇▇▇▇, Public Notary Number 212 of Mexico City, Federal District, the
first certified copy (primer testimonio) of which is registered in the Public
Commercial Registry of said Federal District under Mercantile Folio Number
204069.
(b) The other Sellers are individuals. each with the legal capacity to
enter into this Agreement and be bound by its terms.
(c) The Company is a variable capital stock company duly constituted and
validly existing in accordance with the laws of the United Mexican States, as
evidenced by Public Instrument Number 19,727 dated August 6, 1998, granted
before the faith of Lic. ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Public Notary Number
195 of Mexico City, Federal District, the first certified copy of which is
registered in the Public Commercial Registry of said Federal District under
Mercantile Folio Number 242,349.
(d) Except as set forth in Schedule 1(d) hereto, the Company and the other
-------------
members of the Iusacell Group are legal entities duly constituted and validly
existing in accordance with the laws of the United Mexican States.
(e) The Company is a holding company whose only current activities are (i)
owning and holding directly or indirectly shares of its subsidiaries. including
but. not limited to those subsidiaries set forth in Exhibit B, and (ii) being
the obligor on three hundred fifty million dollars (US$350,000,000) in fourteen
and twenty-five hundreds percent (14.25%) Senior Notes due in 2006.
(f) Except as set forth in Schedule 1(f) hereto, each of FIUSA, the Company
-------------
and the other members of the Iusacell Group:
(i) has all (A) Telecommunications Licenses, and (B) all Authorizations
required under COFETEL's, the SCT's, and the applicable Telecommunications
Law, rules, regulations and orders necessary to own, lease, and operate its
properties and assets and to carry on its business as now being conducted
and as will be conducted in the performance of this Agreement; and
(ii) has all other Authorizations necessary to own, lease and operate
its properties and assets and to carry on its business as now being
conducted and as will be conducted in the performance of this Agreement.
except such Authorizations which would not individually or in the aggregate
have a Material Adverse Effect.
CONFIDENTIAL
(g) The execution of this Agreement does not and the performance of each
Seller's respective obligations hereunder will not: (i) violate any provision of
the bylaws of FIUSA or any member of the Iusacell Group; (ii) except as set
forth in Schedule 1(g) hereto, violate any provision of, or constitute an event
-------------
that is or with the passage of time will result in a violation of, or result in
the acceleration of or entitle any party to accelerate (whether after the giving
of notice or the lapse of time or both) any obligation under, or result in the
imposition of any encumbrance upon any of the assets or properties of any Seller
or any member of the Iusacell Group (as applicable) pursuant to, any contract,
note or other instrument to which any Seller or any member of the Iusacell Group
(as applicable) is a party or by which such Person is bound, or (iii) violate or
conflict with any law, statute, regulation, regulatory approval, order, judgment
or arbitration award, or any other restriction of any kind or character to which
any Seller or any member of the Iusacell Group (as applicable) is subject.
(h) Mr. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ has all powers necessary to execute this
Agreement on FIUSA's behalf and to bind FIUSA in accordance with the terms
thereof. as evidenced by Public Instrument Number 1.258 dated October 20, 1995
granted before the faith of Lic. Francisco ▇▇▇▇ ▇▇▇▇▇, Public Notary Number 212
of Mexico City, Federal District, the first certified copy of which is
registered in the Public Commercial Registry of said Federal District under
Mercantile Folio Number 204069, said powers not having been revoked or limited
in any manner.
(i) Each of the other Sellers has all powers necessary to execute this
Agreement and to bind him or herself in accordance with the terms hereof.
(j) This Agreement constitutes a legal, valid and binding obligation of the
Sellers, enforceable against each of said Sellers in accordance with its terms,
except where enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other laws affecting creditors' rights generally.
2. Capitalization. The total corporate capital of the Company is in the
--------------
amount of five billion four million forty-two thousand four hundred sixty-eight
(5,004,042,468) Pesos, represented by seven hundred thirty-six million eight
hundred thirty thousand seven hundred forty-five (736,830,745) ordinary,
nominative series "A" shares without par value, all of which are subscribed and
fully paid, and six hundred ninety million four hundred eleven thousand four
hundred forty (690,411,440) ordinary, nominative Series "V" shares without par
value, all of which are subscribed and fully paid. Of the seven hundred thirty
five million forty-two thousand six hundred eighty-eight (735,042,688) issued
Series "V" shares, forty-four million six hundred thirty-one thousand two
hundred forty-eight (44,631,248) of such shares are being held in the Company's
treasury in accordance with it's bylaws. Upon the Sellers' endorsement and
delivery to the Buyer of certificates representing the Series A Shares and the
Series V Shares set forth in Exhibit A, the Buyer will acquire title to such
shares' free and clear of all Liens. Except as set forth in Schedule 2 hereto,
the Company, other members of the Iusacell Group and the Sellers have authorized
no options, warrants, purchase rights, subscription rights, conversion rights,
exchange rights, redemption rights or other contracts or commitments with
respect to the corporate capital of the Company or any other member of the
Iusacell Group. There are no outstanding equity appreciation, phantom equity,
profit participation or similar rights with respect to the Company.
-2-
CONFIDENTIAL
3. Financial Statements.
--------------------
(a) True, correct and complete copies of the consolidated, audited balance
sheets of the Company and each other member of the Iusacell Group and the
related statements of results of operations and of changes in financial position
for the fiscal years ended December 31, 1998 and 1999 of the Company and each
other member of the Iusacell Group (the "Company Financial Statements"), have
------------------------------
previously been delivered to the Buyer or its representatives or will be
provided within three weeks of the date hereof. The Company Financial Statements
(i) were prepared in accordance with Mexican GAAP consistently applied in
accordance with past practice and present fairly in all material respects the
financial position of the Company and each other member of the Iusacell Group,
the results of its operations, the changes in its financial positions and the
other information included therein for the periods or as of the dates therein
set forth subject, where appropriate, to normal year-end adjustments, in each
case in accordance with Mexican GAAP consistently applied in accordance with
past practice, and (ii) contain and reflect adequate provisions for all Tax
liabilities relating to the periods then ended and all prior periods.
(b) True, correct and complete copies of the consolidated, unaudited
balance sheets of the Company and each other member of the Iusacell Group and
the related statements of results of operations and of changes in financial
position for the six (6) months ended June 30, 2000 (the "Company Current
----------------
Balance Sheet"), have previously been delivered to the Buyer or its
---------------
representatives or will be provided within three weeks of the date hereof. The
Company Current Balance Sheet presents fairly in all material respects the
financial position of the Company and each other member of the Iusacell Group
for such period, and contains and reflects adequate provisions for all Tax
liabilities relating to the period then ended and all prior periods, except that
it does not contain notes and year-end adjustments.
4. Title; Real and Personal Property; Sufficiency of Assets.
--------------------------------------------------------
(a) On the date hereof except as set forth on Schedule 4(a):
-------------
(i) the Sellers have good, valid and marketable or saleable title to
the Sellers' Company Shares free and clear of all Liens, and no current or
former shareholder or any other Person is contesting the sale of the
Sellers' Company Shares;
(ii) there are no unsatisfied preemptive rights with respect to the
shares of the Company or any other member of the Iusacell Group;
(iii) the Sellers' Company Shares represent the Sellers' entire right,
title and interest in and to the corporate capital of the Company;
(iv) the Sellers' Company Shares were not issued in violation of the
terms of any agreement or other understanding binding on the Company or the
Sellers, and the Sellers' Company Shares were issued in compliance with all
applicable laws;
(v) there are no authorized or outstanding options, warrants, purchase
rights, subscription rights, conversion rights, exchange rights, redemption
rights or other contracts or commitments relating to the Sellers' Company
Shares; and
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CONFIDENTIAL
(vi) there are no voting trusts, proxies, powers of attorney or other
agreements or understandings with respect to the voting of the Sellers'
Company Shares.
(b) On the Closing Date, the provisions set forth in paragraph 4(a) above
shall apply; provided, however, that such provisions shall not be subject to the
exceptions set forth in Schedule 4(a).
-------------
(c) To the Sellers' knowledge, the Company and each other member of the
Iusacell Group has good, valid and marketable or saleable title, as applicable,
to and, in the case of leased properties and assets, has valid leasehold
interests in all of its material properties and assets, real, personal and
mixed, which it purports to own or lease, including without limitation all
properties and assets reflected in the Company Current Balance Sheet and not
sold, retired or otherwise disposed of since the date thereof in the ordinary
course of the Company Business consistent with past practices, free and clear of
all Liens, except for (i) Liens for current real or personal Property Taxes not
yet due and payable, (ii) Liens disclosed in Schedule 4(c) attached hereto and
-------------
(iii) Liens, such as utility easements and the like, that are immaterial in
character, amount and extent, and which do not detract from the value or
interfere with the present use of the assets or properties they affect.
(d) To the Sellers' knowledge, Schedule 4(d) lists all real property and
--------------
interests in real property, owned, leased or otherwise held by any member of the
Iusacell Group for use in the Company Business.
(e) To the Sellers' knowledge, the (i) assets owned by the Company and the
other members of the Iusacell Group and (ii) assets which the Company and the
other members of the Iusacell Group use pursuant to a lease, license or right to
use, which are required to conduct the Company Business in all material respects
in the manner conducted as of the date of this Agreement will remain,
immediately after the Closing, under the Company's or other Iusacell Group
member's ownership or in effect in accordance with the terms of such lease,
license or right to use, except as set forth in Schedule 4(e) hereto.
-------------
5. Condition of Tangible Assets. To the Sellers' knowledge, the buildings,
----------------------------
structures, facilities, equipment and other items of tangible property and
assets (excluding Inventory) of the Company and the other members of the
Iusacell Group, taken as a whole, are in all material respects in satisfactory
operating condition and repair, subject to normal wear and maintenance, are
useable in the regular and ordinary course of the Company Business consistent
with past practice, and conform in all material respects to all applicable
Requirements of Law. To the Sellers' knowledge, no Person other than the Company
or another member of the Iusacell Group owns any material equipment or other
material tangible assets situated on the premises of the Company or another
member of the Iusacell Group and utilized in the Company Business, except for
the leased and other items disclosed on Schedule 5.
----------
6. Authorizations and Telecommunications Licenses.
----------------------------------------------
(a) Except as set forth in Schedule 6(a) hereto, the Company and each other
-------------
member of the Iusacell Group currently has and as of the Closing Date shall
continue to have all of the Telecommunications Licenses and other Authorizations
required under COFETEL's, the SCTs, and
-4-
CONFIDENTIAL
the applicable Telecommunications Law, rules, regulations and orders necessary
to own, lease and operate its properties and assets and to carry on its business
as now being conducted and as will be conducted in the performance of this
Agreement, and such Telecommunications Licenses and other Authorizations are and
on the Closing Date shall be valid. Except as set forth in Schedule 6(a) hereto,
the Company and each other member of the Iusacell Group currently has and as of
the Closing Date shall continue to have all other Authorizations necessary to
conduct the Company Business as such is conducted as of the date of this
Agreement, except for such Authorizations which failure to hold would not
individually or in the aggregate have a Material Adverse Effect, and such
Authorizations are and on the Closing Date shall be valid.
(b) Exhibit C-1 hereto contains a true, correct and complete list of all
-----------
currently effective Telecommunications Licenses held by the Company or any other
member of the Iusacell Group which are necessary to conduct the Company
Business. Exhibit C-2 hereto contains a true, correct, and complete list of all
currently effective Telecommunications Licenses held by third parties which are
necessary to conduct the Company Business. True, correct and complete copies of
each Telecommunications License listed in Exhibits C-1 hereto have previously
been delivered to the Buyer.
7. Accounts Receivable. To the Sellers' knowledge, the accounts receivable
-------------------
as set forth on the Company Current Balance Sheet or arising since the date
thereof have arisen only in the ordinary course of business out of performance
of services or bona fide sales and deliveries of goods. Adequate reserves for
returns, sales allowances, and uncollectibility have been provided for on the
Company Current Balance Sheet in accordance with Mexican GAAP and consistent
with the Company's and each other Iusacell Group member's past practice. To the
Knowledge of the Sellers, there exist no facts or circumstances (other than
general economic conditions) that are likely to result in any material increase
in the uncollectibility of accounts receivable. Schedule 7 includes the
-----------
aggregate figures as of June 30, 2000 of accounts and notes receivable due the
Company and any other Iusacell Group member which have been outstanding for: (a)
thirty (30) calendar days or less; (b) more than thirty (30) but less than
sixty-one (61) calendar days; (c) more than sixty (60) but less than ninety-one
(91) calendar days; and (d) more than ninety (90) calendar days.
8. Intellectual Property Rights. Except as set forth in Schedule 8 hereto,
----------------------------- ----------
to the Sellers' knowledge: (a) the members of the Iusacell Group own, or possess
licenses or other valid rights to use, all of the Intellectual Property
necessary for the conduct of the Company Business as currently conducted; (b)
there are no claims or suits pending or, to the Knowledge of the Sellers,
threatened, alleging that the activities of any member of the Iusacell Group or
the conduct of the Company Business infringes upon the Intellectual Property of
a third party, or challenging the ownership, validity or enforceability of any
Intellectual Property necessary for the conduct of the Company Business as
conducted as at the date of this Agreement; and (c) no Person is infringing upon
any Intellectual Property of any member of the Iusacell Group affecting the
Company Business.
9. Changes Since December 31, 1999.
-------------------------------
Since December 31, 1999, there has not been, except as disclosed in
Schedule 9 hereto:
----------
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CONFIDENTIAL
(a) Any Material Adverse Change in the business or financial condition of
the Company or any other member of the Iusacell Group;
(b) Any Material Adverse Change in any of the assets or any change in the
licenses, permits or authorizations of the Company or any other member of the
Iusacell Group, any Material Adverse Change in the nature of the business, any
change in the methods of accounting or accounting practices of the Company or
any other member of the Iusacell Group, or any Material Adverse Change in the
manner of conducting business by the Company or any other member of the Iusacell
Group;
(c) Any direct or indirect redemption. purchase or other acquisition of, or
any declaration. setting aside or payment of any dividend or other distribution
on or in respect of, any shares of the Company or any other member of the
Iusacell Group;
(d) Any obligation or liability, or any damage, destruction or other
casualty loss incurred by the Company or any other member of the Iusacell Group,
other than obligations and liabilities incurred in the ordinary course of
business which, individually or in the aggregate, would not have a Material
Adverse Effect on the Company or any other member of the Iusacell Group;
(e) Any amendment, modification or termination of any existing, or any
entering into of a new, contract, note or other instrument to which the Company
or any other member of the Iusacell Group is a party or by which it is bound,
outside the ordinary course of business or which would have a Material Adverse
Effect on the Company or any other member of the Iusacell Group;
(f) Any bonus paid, or any agreement (oral or otherwise) to pay a bonus, or
any increase in the rate of compensation or in the benefits payable or to become
payable to any officer or other employee of the Company or any other member of
the Iusacell Group over the levels in effect on December 31, 1999 and outside
the ordinary course of business.
10. Litigation; Judgments.
---------------------
(a) To the Sellers' knowledge and except as disclosed in Schedule 10(a)
---------------
hereto, there are no lawsuits, actions, claims, proceedings, investigations or
examinations of any nature pending or, to the Knowledge of Sellers; threatened
against the Company or any other member of the Iusacell Group or any of their
respective properties or assets before or by any federal, state, municipal or
other governmental subdivision, agency, authority or other instrumentality; or
any arbitration tribunal, which either involves (i) a claim or claims over five
hundred thousand dollars (US$500,000), or (ii) a claim or claims that would have
a Material Adverse Effect on the Company.
(b) Except as disclosed in Schedule 10(b) hereto, there are no judgments,
---------------
awards, fines or penalties of any nature outstanding with respect to the Company
or any other member of the Iusacell Group.
-6-
CONFIDENTIAL
11. Compliance.
----------
To the Sellers' knowledge, each of the members of the Iusacell Group:
(a) Except as set forth in Schedule 11(a) hereto, is in compliance in all
---------------
material respects with all contracts, notes and other instruments to which it is
a party or by which it is bound and which involve an amount in excess of two
hundred thousand dollars (US$200,000).
(b) Is in compliance in all material respects with all laws, statutes,
regulations, regulatory approvals, orders, judgments and arbitration awards, and
with all other restrictions of any kind or character, to which it is subject.
(c) Except as set forth in Schedule 11(c) hereto, is in compliance in all
---------------
material respects with the terms and conditions of all Authorizations it holds;
there are no disputes or proceedings pending or, to the knowledge of the
Sellers, threatened with respect to the suspension, revocation or limitation of
any of its Authorizations, and no event has occurred which, whether with notice
or the lapse of time or both, will or may result in any such suspension,
revocation or limitation; and all filings, submissions and other actions
required to have been made or taken in order to maintain its Authorizations in
effect, and in order to comply with the obligations imposed with respect
thereto, have been made or taken within the time periods required by applicable
law.
12. Regulatory Authorities.
----------------------
(a) To the Sellers' knowledge, the Sellers have provided or will provide
within three )3) weeks of the date hereof the Buyer with true, correct and
complete copies of all filings and submissions made by either the Company or any
other member of the Iusacell Group with any regulatory authority since January
l, 1998, other than filings or submissions of a ministerial or routine nature.
(b) Except as disclosed in Schedule 12(b) hereto, each of the Company or
---------------
any other member of the Iusacell Group has made with each regulatory authority
all filings and submissions that are required by applicable law. Such filings
and submissions were in compliance with applicable law when filed, and no
deficiencies have been asserted by any regulatory authority with respect to such
filings or submissions. The foregoing filings and submissions did not at the
time when %they were filed, or when supplemented or amended, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(c) Except as disclosed in Schedule 12(c) hereto, there are no violations
---------------
cited in or resulting from any examination by any regulatory authority or any
other action of any nature whatsoever, with respect to which any refunds,
restitutions or penalties have been levied and remain unpaid.
13. Environmental Matters.
---------------------
(a) To the Sellers' knowledge, each member of the Iusacell Group is in
compliance with all Environmental Laws affecting the Company Business. To the
Sellers' Knowledge there are no
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CONFIDENTIAL
events, conditions, circumstances, activities, practices, incidents, actions or
plans in any way related to the Company Business which will, or would reasonably
be expected to, give rise to any Environmental Claim.
(b) As used herein:
"Environmental Claim" means any and all administrative or judicial actions,
-------------------
suits, orders, claims, Liens, notices, violations or proceedings related to any
applicable Environmental Laws brought, issued or asserted by: (i) a Governmental
Authority for compliance, damages, penalties, removal, response, remedial or
other action pursuant to any applicable Environmental Laws; or (ii) a third
party seeking damages, contribution, remediation or other action for personal
injury or property damage resulting from the release of a government regulated
hazardous material at, to or from any real property upon which the Company
Business is located or operated.
"Environmental Laws" means all applicable federal, state and local laws,
-------------------
statutes, ordinances, codes, rules and regulations related to protection of the
environment and/or the handling, presence, use, generation, treatment, storage,
transportation, release, discharge, emission or disposal of government regulated
hazardous materials in effect on or before the Closing Date.
14. Labor Matters.
-------------
(a) To the Sellers' knowledge: (i) each of the Company and the other
members of the Iusacell Group is in compliance in all material respects in its
obligations to its current and former employees, including the payment in full
of all compensation for services performed, other than amounts which are not yet
payable in accordance with the law, including without limitation accrued
vacation pay or deferred compensation; (ii) each of the Company and the other
members of the Iusacell Group has complied with the reporting and withholding
provisions of the laws of the United Mexican States, including without
limitation fiscal and social. security laws, regulations and practices, and
similar state and local laws, and with federal, state and local laws, statutes,
regulations and orders relating to employment and employment practices, terms
and conditions of employment and workplace, and wages and hours; and (iii) each
of the Company and the other members of the Iusacell Group is and the labor
practices ,of each are in compliance with its respective Shop Rules (Reglamento
Interior de Trabajo), as currently in effect.
(b) Except as disclosed in Schedule 14(b)(i) hereto, there is no
------------------
labor-related complaint, charge or claim against the Company, or any other
member of the Iusacell Group pending or, to the Knowledge of the Sellers,
threatened before any regulatory authority. No work stoppage against the Company
or any other member of the Iusacell Group is pending or overtly threatened.
Schedule 14(b)(ii) hereto contains a true, correct and complete list of each
-------------------
collective bargaining agreement (contrato colectivo de trabajo) in effect to
which the Company or any other member of the Iusacell Group is a party. True,
correct and complete copies of each collective bargaining agreement listed in
Schedule 14(b)(ii) will be available to the Buyer, at the Buyer's request,
-------------------
within three weeks of the date hereof.
15. Distributors. To the Sellers' knowledge, Schedule 15 hereto contains a
------------ -----------
true, correct and complete list of all authorized and current distributors (with
a direct contractual relationship with the Company) that are engaged by the
Company or any other member of the Iusacell Group to
-8-
CONFIDENTIAL
distribute any telecommunications services or products. The Sellers will deliver
to the Buyer true, correct and complete copies of all forms of contracts,
agreements or other arrangements between the Company and any other member of the
Iusacell Group and such distributors which are currently in effect within three
weeks of the date hereof.
16. Undisclosed Liabilities.
-----------------------
Except as disclosed in Schedule 16 hereto, to the Sellers' knowledge,
------------
neither the Company nor any other member of the Iusacell Group has any
obligations or liabilities, whether direct or indirect, joint or several,
absolute or contingent, matured or unmatured, secured or unsecured, other than:
(a) Liabilities disclosed or adequately provided for in the Company
Financial Statements; and
(b) Liabilities incurred in the ordinary course of business since the date
of the Company Financial Statements, none of which, individually or in the
aggregate, could have a Material Adverse Effect on either the Company or any
other member of the Iusacell Group.
17. Contracts, Agreements. Etc.
---------------------------
(a) Except as listed and briefly described in Schedule 17(a), neither the
--------------
Company nor any other member of the Iusacell Group is a party to any of the
following agreements, whether written or oral, express or implied. relating
exclusively to the operation of the Company Business, which will continue to
bind, or impose any liability on, the Company or any other member of the
Iusacell Group after the Closing Date:
(i) agreement, contract, lease, guarantee, or commitment, or series of
related agreements, contracts, leases or commitments, which involve an
amount in excess of two hundred thousand dollars (US$200,000) on an annual
basis;
(ii) agreement, contract or commitment limiting or restraining the
Company or any other member of the Iusacell Group from engaging in any
business or pursuing any strategic initiative or competing in any manner;
(iii) license or other agreement which relates in whole or in part to
any software, patent, trademark, trade name, service ▇▇▇▇ or copyright
owned by any Person other than the Company or another member of the
Iusacell Group and which involves an amount in excess of two hundred
thousand dollars (US$200,000) on an annual basis, other than software
programs which are generally commercially available;
(iv) interconnection agreement;
(v) management agreement which involves an amount in excess of two
hundred thousand dollars (US$200,000) on an annual basis;
(vi) agreements with employees for a term which involve an amount in
excess of two hundred thousand dollars (US$200,000) on an annual basis;
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CONFIDENTIAL
(vii) commission, reseller, distributorship or sales agency agreement,
contract or commitment which involves an amount in excess of two hundred
thousand dollars (US$200,000) on an annual basis;
(viii) agreement, contract, lease or commitment with respect to the
ownership or leasing of cell sites, space on towers, switches or store
locations which involves an amount in excess of two hundred thousand
dollars (US$200,000) on an annual basis; or
(ix) other material agreement, contract or commitment not made in the
ordinary course of operation of the Company Business consistent with past
practice.
(b) To the Sellers' knowledge, each of the agreements, contracts,
commitments, leases, plans and other instruments, documents and undertakings
required to be listed in Schedule 17(a) in response to the foregoing
----------------
(collectively, "Company Contracts") is valid and enforceable against the member
-----------------
of the Iusacell Group party thereto and, to the Knowledge of the Sellers,
against any other party thereto in accordance with its terms except to the
extent that such enforcement may be limited by applicable bankruptcy or
insolvency (concurso mercantil), reorganization, moratorium, and other similar
laws affecting creditors' rights generally. Neither the Company nor any other
member of the Iusacell Group is,, and to the Knowledge of Seller no other party
thereto is, in default in the performance, observance or fulfillment of any
material obligation, covenant or condition contained in the Company Contracts,
and no event caused by, relating to or affecting any member of the Iusacell
Group has occurred which with or without the giving of notice or lapse of time,
or both, would constitute a default by the Iusacell Group member thereunder, and
to the Knowledge of the Sellers, no event caused by, relating to or affecting
any other party thereto has occurred which with or without the giving of notice
or lapse of time, or both, would constitute a default by such other party
thereunder.
(c) To the Sellers' knowledge, neither the Company nor any other member of
the Iusacell Group has received notification that any material supplier of the
Company Business or party to any Company Contract intends to cancel or otherwise
materially and adversely modify its relationship with the Company Business or to
decrease materially or limit its `purchases, services, supplies or materials
from or to the Company Business.
18. Material Interest of Certain Persons.
------------------------------------
(a) Except as disclosed in Schedule 18(a) hereto, to the Knowledge of the
---------------
Sellers, none of the shareholders of the Company or any other member of the
Iusacell Group or any Affiliates of said shareholders, nor any of the officers
or directors of the Company or any other member of the Iusacell Group, nor any
person with whom any such shareholder, Affiliate, officer or director has a
direct or indirect relation by blood, marriage or adoption, has any material
interest in: (a) any contract, arrangement or understanding with or relating to
the business or operations of the Company or any other member of the Iusacell
Group; or (b) any property, real or personal, tangible or intangible, used or
intended to be used in the business or operations of the Company or any other
member of the Iusacell Group.
(b) Neither the Company nor any other member of the Iusacell Group is
indebted in any amount whatsoever, directly or indirectly, to any person who is
an officer, director or shareholder
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CONFIDENTIAL
of said Company or other Iusacell Group member or who is an Affiliate of any
such persons, other than for salaries for services rendered or reimbursable
business expenses, nor is any such officer, director, shareholder or Affiliate
indebted to either the Company or any other member of the Iusacell Group.
19. Taxes.
-----
To the Knowledge of the Sellers:
(a) All Tax Returns that were required to be filed by or with respect to
the Company and any other member of the Iusacell Group, have been or will be
filed on a timely basis (taking into account all extensions of due dates) in
accordance with applicable law.
(b) All Tax Returns are true, correct and complete in all respects.
(c) All Taxes due with respect to such Tax Returns which are otherwise due
and payable, including any Taxes payable pursuant to any assessment made by any
relevant taxing authority in respect of such periods, have been or will be paid
in full when due or are fully provided for in the Company Financial Statements
and the Company Current Balance Sheet.
(d) All Taxes required to be withheld or paid over by or with respect to
the Company and any other member of the Iusacell Group to any relevant Tax
authority in connection with payments to employees, independent contractors,
creditors, shareholders or third parties have been so withheld and paid over.
(e) The Sellers have delivered or made available, or will make available
within three weeks of the date hereof, to the Buyer true, correct and complete
copies of all Tax Returns filed by the Company and any other member of the
Iusacell Group since 1999.
(f) Except as disclosed in Schedule 19(f) hereof, the Tax Returns referred
--------------
to above have been examined by the Mexican Ministry of Finance and Public Credit
(Secretaria de Hacienda y Credito Publico) or the appropriate provincial, local
or foreign Tax authority, or the period for assessment of the Taxes in respect
of which such Tax Returns were filed has expired under the applicable statute of
limitations (giving affect to all extensions and waivers).
(g) All deficiencies assessed or asserted made as a result of such
examinations have been paid in full and no issues that were raised in connection
with such examination are currently pending.
(h) No audits or exams with respect to the Company or any other member of
the Iusacell Group are ongoing or have been threatened or proposed (either in
writing or verbally, formally or informally) by any relevant taxing authority.
(i) Neither the Company nor any other member of the Iusacell Group has
given or been requested to give a waiver of extension (or is or could be subject
to a waiver or extension given by any other person) of any statute of limitation
relating to the payment of Taxes.
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CONFIDENTIAL
(j) Except as disclosed in Schedule 19(j) hereto, there are no Tax rulings,
--------------
requests for rulings, or closing agreements related to the Company or any other
member of the Iusacell Group which could affect their respective Tax liabilities
for any period.
(k) No power of attorney has been granted by the Company or any other
member of the Iusacell Group with respect to any Tax matters relating to their
respective Taxes which is currently in force, except as set forth in Schedule 22
-----------
as applicable.
(1) No Tax authority in a jurisdiction where the Company or any other
member of the Iusacell Group does not file Tax Returns has made a claim,
assertion or threat (either in writing or verbally, formally or informally) that
the Company or any other member of the Iusacell Group is or may be subject to
Tax in such jurisdiction.
(m) Except as disclosed in Schedule 19(m) hereto, there are no Tax liens or
--------------
any assessments of the Company or any other member of the Iusacell Group except
for Taxes not yet due and payable.
(n) Neither the Company nor any other member of the Iusacell Group is
subject to any material liability for Taxes for any other Person.
20. Insurance. Each of the Company and any other member of the Iusacell
---------
Group has all of its material assets and operations insured against risks and
damage in amounts which are considered adequate and customary in the United
Mexican States. All material insurance policies are in full force and effect in
accordance with their terms, and no notice of cancellation of such polices has
been received.
21. Brokers, Finders, Etc. Neither the Seller, the Company nor any other
------------------------
member of the Iusacell Group has employed or is subject to any claim of any
broker, finder, consultant or other intermediary in connection with the
transactions contemplated by this Agreement, who might be entitled to a fee or
commission from the Buyer.
22. Powers of Attorney. To the Sellers' knowledge, Schedule 22 hereto
------------------- -----------
contains true, correct and complete lists of all individuals or entities to whom
the Company and any other member of the Iusacell Group, respectively, have
granted powers of attorney (whether general, special or otherwise) which are in
effect as of the date hereof. At the request of the Buyer, the Sellers shall
have provided or shall provide the Buyer with the following information with
respect to each such power of attorney: (a) the date the power was granted; (b)
the corporate body that granted the same (e.g., the general shareholders
meeting, the board of directors or another attorney-in-fact of the Company or
another member of the Iusacell Group); (c) the authority conferred by such power
(e.g., lawsuits and collections; acts of administration; etc.); (d) the name and
number of the Public Notary before whom the power was protocolized, and the
number of the Public Instrument evidencing such protocolization; and (e) the
Public Registry inscription data relating to such Public Instrument.
23. Form of Agreements: Subscriber List. Schedule 23 sets forth: (a) a
-------------------------------------- -----------
listing of the standard rate plans being offered by the Company and each other
member of the Iusacell Group as of the date of this Agreement; (b) a description
of the products and services being provided to
-12-
CONFIDENTIAL
subscribers of the Company or such other member of the Iusacell Group at the
date of this Agreement; and (c) copies of the standard forms of subscriber
agreements in use at the date of this Agreement at the Iusacell Group's retail
stores.
24. Availability of Documents. Except for an agreement with Lucent
---------------------------
Technologies de Mexico, S.A. de C.V., the Sellers will have provided access to
the Buyer within three weeks, at the Buyer's request, to any and all copies of
all documents listed in the Schedules hereto. All of the above referenced copies
are available or, upon the Buyer's request, shall be made available at the
Company's offices. Such copies are complete and accurate and include all
amendments, supplements and modifications thereto or waivers currently in effect
thereunder.
25. Compliance with Laws. Each of the Sellers and their respective
----------------------
Affiliates, agents and representatives have observed the following requirements
in all matters relevant to the transactions contemplated by this Agreement:
(a) no action has been taken by or on behalf of any of the foregoing
Persons which violates any applicable law or regulation of Mexico or any other
applicable jurisdiction (including the provisions of the US Foreign Corrupt
Practices Act);
(b) no expenditure for other than lawful purposes has been made by or on
behalf of any of the foregoing Persons; and
(c) no payments have been made and nothing of value shall be given to
government officials by any of the foregoing Persons or any of their agents,
except such payments as are required by law and made to such officials in other
than their individual capacities.
-13-
CONFIDENTIAL
EXHIBIT F
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer hereby represents and warrants to the Sellers that:
l. Incorporation: Authorization: Etc.
----------------------------------
(a) It is a private limited liability company registered with the Chamber
of Commerce under number 24314525, duly constituted, validly existing and in
good standing under the laws of the Netherlands, as evidenced by a certificate
of good standing issued on February 13, 2001 by the Chamber of Commerce and
Industries for Rotterdam of the government of the Netherlands.
(b) The Buyer: (i) is duly qualified to do business and is in good
standing, and is duly licensed or authorized to transact business, in each
jurisdiction in which its ownership or lease of property or the nature or
conduct of its business requires it to be so qualified, in good standing, or so
licensed or authorized, except where the failure to be so qualified and in good
standing, or so licensed or authorized, would not individually or in the
aggregate have a Material Adverse Effect; (ii) has all regulatory approvals
necessary to own, lease and operate its properties and assets and to carry on
its business as now being conducted and as will be conducted in the performance
of this Agreement; and (iii) is in compliance with all provisions of its
constituent document and bylaws.
(c) Upon the receipt of the required Authorizations, the execution of this
Agreement does not, and the performance of the Buyer's obligations hereunder
will not: (i) violate any provision of the constituent document or bylaws of the
Buyer; (ii) violate or conflict with any law, statute, regulation, regulatory
approval, order, judgment or arbitration award, or any other restriction of any
kind or character to which the Buyer is subject; or (iii) violate or breach any
contract to which the Buyer is a party.
(d) ▇▇▇▇▇ ▇▇▇▇▇▇ and/or ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ have all powers necessary to
execute this Agreement on the Buyer's behalf and to bind the Buyer in accordance
with the terms hereof, said powers not having been revoked or limited in any
manner.
(e) This Agreement constitutes a legal, valid and binding obligation of the
Buyer, enforceable against it in accordance with its terms, except where
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other laws affecting creditors' rights generally.
2. Litigation. There are no lawsuits, actions, claims, proceedings,
----------
investigations or examinations of any nature pending or, to the Knowledge of the
Buyer, threatened against the Buyer or any of its properties or assets before or
by any federal, state, municipal or other governmental subdivision, agency,
authority or other instrumentality, or any arbitration tribunal, which would
have a Material Adverse Effect on the Buyer's ability to perform its obligations
hereunder.
3. Brokers, Finders, Etc. Excluding the Broker, the Buyer has not employed
-----------------------
and is not subject to any claim of any broker, finder. consultant or other
intermediary in connection with the
CONFIDENTIAL
transactions contemplated by this Agreement, who might be entitled to a fee or
commission from the Sellers.
4. Due Diligence Disclosure. The Buyer has not discovered any information
-------------------------
which would make any of the Sellers' representations or warranties hereunder
sufficiently inaccurate to result in an indemnification claim under Article VI
of this Agreement.
5. Compliance with Laws. Each of the Buyer and its respective Affiliates,
---------------------
agents and representatives have observed the following requirements in all
matters relevant to the transactions contemplated by this Agreement:
(a) no action has been taken by or on behalf of any of the foregoing
Persons which violates any applicable law or regulation of Mexico or any other
applicable jurisdiction (including the provisions of the U.S. Foreign Corrupt
Practices Act);
(b) no expenditure for other than lawful purposes has been made by or on
behalf of any of the foregoing Persons; and
(c) no payments have been made and nothing of value shall be given to
government officials by any of the foregoing Persons or any of their agents,
except such payments as are required by law and made to such officials in other
than individual capacities.
-2-
CONFIDENTIAL
SCHEDULES
---------
The following Schedules are attached hereto and incorporated into the
Agreement:
Schedule 1(d) - Subsidiaries Incorporated Under Foreign Law
Schedule 1(f) - Authorizations necessary for the Company Business which are lacking
Schedule 1(g) - Restrictions for the Sale of the Company Shares
Schedule 2 - Stock Purchase Options
Schedule 4(a) - Title, Liens and Restrictions for Sale of the Company Shares
Schedule 4(c) - Liens on the Company's Property
Schedule 4(d) - Real Property Owned or Leased by the Company
Schedule 4(e)
Schedule 5 - Property of the Company being used by third parties and assets being used by the
Company which belong to third parties
Schedule 6(a) - Authorizations and Telecommunications Licenses
Schedule 7 - Accounts Receivable
Schedule 8 - Intellectual Property Infringement Claims
Schedule 9 - Material Changes since December 31, 1999
Schedule 10(a) - Litigation, Judgements
Schedule 10(b) - Outstanding Judgements, Awards and Fines
Schedule 11 (a) - Compliance with Contracts
Schedule 11 (c) - Compliance with Authorizations
Schedule 12(b) - Filings made by the Company which have been asserted some deficiency
Schedule 12(c) - Uncured Violations
Schedule 14(b)(i) - Labor claims against the Company
Schedule 14(b)(ii) - Collective Bargaining Agreements
Schedule 15 - List of Current Authorized Distributors
Schedule 16 - Undisclosed Liabilities
Schedule 17(a) - Agreements entered into by the Company listed in Representation 17
Schedule 18(a) - Material Interest of Shareholders, Officers and Affiliates
Schedule 19(f) - Tax issues
Schedule 22 - Powers of Attorney
Schedule 23 - (a) Standard Rate Plans
(b) Products and Services Provided
(c) Subscriber Agreements
