EXHIBIT 10.1
PURCHASE AGREEMENT
dated as of September 19, 1996
by and between
NEWBRIDGE LATIN AMERICA, L.P.
and
MTEL LATIN AMERICA, INC.
TABLE OF CONTENTS
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Page
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1. Purchase and Sale of the Shares............................... 2
1.1 Agreement to Purchase and Sell......................... 2
1.2 Closing................................................ 3
1.3 Delivery and Payment................................... 3
1.4 Common Shares Purchase Price........................... 3
2. Representations and Warranties of Mtel LATAM.................. 4
2.1 Incorporation and Organization......................... 4
2.2 Subsidiaries........................................... 5
2.3 Capitalization......................................... 6
2.4 Authorization; Valid and Binding
Agreements............................................. 8
2.5 Financial Statements................................... 9
2.6 Undisclosed Liabilities................................ 10
2.7 No Conflicts, Violation, Etc........................... 10
2.8 Consents............................................... 11
2.9 Exemption from Securities Act.......................... 11
2.10 Litigation............................................. 11
2.11 No Material Adverse Change............................. 12
2.12 Compliance with Laws................................... 12
2.13 Certificates, Authorizations, Permits
and Licenses........................................... 12
2.14 Intellectual Property.................................. 13
2.15 Expenditures........................................... 13
2.16 Affiliate Transactions................................. 14
2.17 Foreign Corrupt Practices Act.......................... 14
2.18 Brokers................................................ 14
2.19 Waiver and Consent..................................... 14
2.20 Employee Benefit Plans................................. 14
2.21 Contracts.............................................. 15
3. Representations and Warranties of
the Purchaser................................................. 15
3.1 Organization........................................... 15
3.2 Authority.............................................. 15
3.3 Consents............................................... 16
3.4 No Conflicts, Violation, Etc........................... 16
3.5 Purchase for Investment................................ 17
3.6 Additional Purchaser Representation.................... 20
4. Counterparts.................................................. 20
5. Successors and Assigns........................................ 20
6. Collateral Agreements, Amendments and Waivers................. 21
7. Expenses...................................................... 21
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Page
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8. Invalid Provisions............................................ 21
9. Consolidation................................................. 21
10. Survival of Representations and Warranties.................... 22
11. Notices....................................................... 22
12. No Third-Party Beneficiaries.................................. 23
13. Law Governing................................................. 23
14. Further Assurances............................................ 23
15. Headings...................................................... 24
16. No Recourse Against Others.................................... 24
17. Mtel LATAM's Knowledge........................................ 24
18. Exclusion from Plan Assets under ERISA........................ 24
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PURCHASE AGREEMENT
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This PURCHASE AGREEMENT (this "Agreement"), dated as of September 19,
1996, by and between MTEL LATIN AMERICA, INC., a Delaware corporation ("Mtel
LATAM"), and Newbridge Latin America, L.P., a Cayman Islands limited partnership
(the "Purchaser").
WHEREAS, Mtel LATAM desires to issue and sell to the Purchaser, and
the Purchaser desires to purchase from Mtel LATAM, 2,000 shares (the "Common
Shares") of common stock, par value $.01 per share, of Mtel LATAM (the "Common
Stock") and 18,500 shares (the "Preferred Shares" and together with the Common
Shares, the "Shares") of Cumulative Redeemable Variable Rate Preferred Stock,
par value $0.01 per share, of Mtel LATAM (the "Preferred Stock" and together
with the Common Stock, the "Securities");
WHEREAS, Mtel LATAM, Mtel Puerto Rico, Inc. ("Mtel Puerto Rico"), a
Delaware corporation and a wholly-owned subsidiary of Mtel LATAM, and the
Purchaser have previously entered into a Purchase Agreement and a Stockholders
and Exchange Rights Agreement (collectively, the "Puerto Rico Documents"),
pursuant to which, among other things, Mtel Puerto Rico has agreed to issue to
the Purchaser and the Purchaser has agreed to acquire from Mtel Puerto Rico,
3,500 shares (the "Puerto Rico Shares") of 12% Cumulative Redeemable Preferred
Stock, par value $.01 per share, of Mtel Puerto Rico; and
WHEREAS, concurrently with the execution and the consummation of the
transactions contemplated by this Agreement, (A) the Purchaser, Mtel LATAM and
Mtel International are entering into a Stockholders and Exchange Rights
Agreement, dated as of the date hereof and attached hereto as Exhibit A (the
"Stockholders Agreement"), pursuant to which (i) the Purchaser shall have the
right under certain circumstances to cause Mtel International to exchange (a
"Purchaser Exchange") the Shares for shares of common stock, par value $.01 per
share, of Mobile Telecommunication Technologies Corp., a Delaware corporation
("Mtel") (the "Mtel Shares"), (ii) Mtel International shall have the right,
commencing after six years from the date of issuance of the Shares and subject
to certain conditions, to require the Purchaser to exchange (an "Mtel
International Exchange") the Shares for Mtel Shares and (iii) certain
arrangements regarding the governance of Mtel LATAM and the relationship between
the shareholders of Mtel LATAM are speci-
fied, and (B) the Purchaser and Mtel are entering into a Contribution,
Standstill and Registration Rights Agreement, dated as of the date hereof,
attached hereto as Exhibit B (the "Contribution, Standstill and Registration
Rights Agreement" and, collectively with this Agreement, the Stockholders
Agreement, and the Puerto Rico Documents and the other agreements and documents
concerning the transactions contemplated hereby and thereby, the "Transaction
Documents") pursuant to which (i) the Purchaser will have certain registration
rights with respect to the Mtel Shares it will receive in the event of a
Purchaser Exchange or an Mtel International Exchange, (ii) the Purchaser will be
subject to certain "standstill" provisions with respect to Mtel and (iii) Mtel
will be obligated to contribute to Mtel International a number of Mtel Shares
sufficient to effect a Purchaser Exchange or an Mtel International Exchange, as
the case may be.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, mutual covenants and agreements set forth herein,
the parties hereto agree as follows:
1. Purchase and Sale of the Shares.
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1.1 Agreement to Purchase and Sell. Upon the basis of the
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representations and warranties, for the consideration, and subject to the terms
and conditions set forth in this Agreement, at the Closing referred to in
Section 1.2 hereof and taking place simultaneously herewith, Mtel LATAM agrees
to issue and sell to the Purchaser, and the Purchaser agrees to purchase from
Mtel LATAM, the Common Shares and the Preferred Shares, the terms of which are
set forth in the form of Amended and Restated Certificate of Incorporation of
Mtel LATAM , attached hereto as Exhibit C, in each case, free and clear of all
claims, liens, charges and encumbrances of any nature whatsoever (collectively,
"Liens"). In consideration of the issuance and sale of such Shares by Mtel
LATAM to the Purchaser, the Purchaser agrees to pay in the aggregate to Mtel
LATAM $31,500,000, consisting of:
(a) $18,500,000 in respect of the Preferred Shares payable at
Closing (the "Preferred Shares Purchase Price") and
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(b) $13,000,000 in respect of the Common Shares, $5,000,000 of
which shall be payable at Closing and the remainder of which shall be payable
from time to time in accordance with the capital requirements of Mtel LATAM,
subject to the provisions of Section 1.4 hereof (the "Common Shares Purchase
Price" and together with the Preferred Shares Purchase Price, the "Purchase
Price").
1.2 Closing. The closing of the transactions contemplated hereby
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(the "Closing") shall take place at the offices of Skadden, Arps, Slate, ▇▇▇▇▇▇▇
& ▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ at 9:00 a.m., Eastern
Daylight Time, on September 20, 1996. The date on which the Closing occurs is
hereinafter referred to as the "Closing Date."
1.3 Delivery and Payment. At the Closing, (a) Mtel LATAM will
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deliver or cause the delivery of (if not previously delivered) to the Purchaser
(i) one or more stock certificates evidencing the Common Shares issued in the
name of the Purchaser, (ii) one or more stock certificates evidencing the
Preferred Shares issued in the name of the Purchaser, (iii) an executed copy of
the Stockholders Agreement and (iv) all other documents, instruments and
writings required by it to be delivered by Mtel LATAM to the Purchaser pursuant
to this Agreement and the other Transaction Documents to which it is a party or
otherwise required in connection herewith or therewith, and (b) the Purchaser
will deliver or cause the delivery of to Mtel LATAM (i) $23,500,000 by wire
transfer of immediately available funds to the account of Mtel LATAM to be
designated by Mtel LATAM in writing not later than two business days prior to
the Closing Date, (ii) an executed copy of the Stockholders Agreement and (iii)
all other documents, instruments and writings required to be delivered by the
Purchaser to Mtel LATAM pursuant to this Agreement and the other Transaction
Documents or otherwise required in connection herewith or therewith.
1.4 Common Shares Purchase Price. (a) Upon the written request (a
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"Request Notice") of Mtel LATAM, which request shall be at least 15 business
days in advance of the requested payment date, the Purchaser shall pay to Mtel
LATAM, by wire transfer of immediately available funds to an account designated
by Mtel LATAM in its Request Notice, the portion of the Common Shares
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Purchase Price not paid at Closing as specified in the Request Notice (each, a
"Subsequent Payment"). Any such request by Mtel LATAM shall be in the sole
discretion of a majority of the Board of Directors of Mtel LATAM and any dispute
as to the necessity of a payment shall be determined solely by the
representatives on such Board appointed by Mtel International. The date on
which a Subsequent Payment occurs is hereinafter referred to as a "Subsequent
Payment Date." Request Notices shall be made by Mtel LATAM (i) from time-to-
time in accordance with Mtel LATAM's capital requirements and (ii) to the extent
that there then remains any unpaid portion of the Common Shares Purchase Price
fifteen business days prior to the consummation by Mtel LATAM of an offering
(whether registered under the Securities Act of 1933, as amended (the
"Securities Act"), or in a transaction exempt therefrom) of debt securities in
excess of $15,000,000. Notwithstanding the foregoing and without delivery of a
Request Notice, any remaining unpaid portion of the Common Shares Purchase Price
shall be paid in full no later than March 31, 1997 by the Purchaser. Each such
request shall be in an amount of at least $1,000,000, except that a Request
Notice pursuant to clause (ii) above shall request payment of the entire
remaining unpaid portion of the Common Shares Purchase Price.
(b) Mtel LATAM shall include in each Request Notice (i)
instructions for payment by wire transfer; (ii) the amount of the payment; and
(iii) in the event of a Request Notice pursuant to clause (i) of the preceding
paragraph, a description, in reasonable detail, of the use of the funds
previously provided by Newbridge to Mtel LATAM in response to the immediately
preceding Request Notice, if any, and the planned use of the funds to be
provided by the Purchaser to Mtel LATAM in response to the current Request
Notice.
2. Representations and Warranties of Mtel LATAM. Mtel LATAM
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represents and warrants to the Purchaser as of the date hereof and as of the
Closing Date (except as otherwise stated herein) as follows:
2.1 Incorporation and Organization. Each of Mtel, Mtel International
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and Mtel LATAM is a corporation duly incorporated and organized, validly
existing and in good standing under the laws of the State of Delaware and each
Material Subsidiary (as defined herein), and to Mtel
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LATAM's Knowledge (as defined herein), each of the other Subsidiaries (as
defined in Section 2.2 below) is an entity duly incorporated or formed, as the
case may be, and organized, validly existing and in good standing, if
applicable, under the laws of its jurisdiction of incorporation or organization.
Mtel LATAM, each of the Material Subsidiaries, and to Mtel LATAM's Knowledge,
each of the other Subsidiaries (i) has all requisite corporate power and
authority to transact its business as now or heretofore transacted or as
proposed to be transacted and (ii) is duly qualified, licensed, or admitted to
do business as a foreign corporation or other entity, as the case may be, and is
(if applicable) in good standing in each jurisdiction in which the character of
its assets, properties and revenues (collectively, the "Assets") or the nature
of its business requires such qualification, licensing, or admission, except for
such jurisdictions where the failure to be so qualified, licensed, or admitted
or to be in good standing would not have a material adverse effect on the
business, operations or financial condition of Mtel LATAM and its Subsidiaries,
taken as a whole (a "Material Adverse Effect").
2.2 Subsidiaries. (a) Schedule 2.2 to this Agreement (i) sets forth
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a true and complete list as of the date hereof of all of the entities in which
Mtel LATAM directly or indirectly owns or holds an interest (the
"Subsidiaries"), (ii) specifically identifies each Subsidiary that is a Material
Subsidiary, and (iii) sets forth with respect to each Subsidiary (A) the correct
name of such Subsidiary, (B) the jurisdiction of its incorporation, (C) the
percentage of the outstanding shares of each class of its capital stock owned,
directly or indirectly, by Mtel LATAM and (D) the names of any other holders of
each class of the capital stock of such Subsidiary and the percentage of each
such class owned by each such other holder. Mtel LATAM has prior to the
execution and delivery of this Agreement made available to the Purchaser true
and complete copies of the organizational documents of each of the Material
Subsidiaries as in effect on the date hereof. Except as set forth on Schedule
2.2, all of the outstanding shares of each of the Subsidiaries owned, directly
or indirectly, by Mtel LATAM, have been duly authorized and issued and are free
and clear of any Lien except for the shares of capital stock of Mtel Puerto Rico
owned by Mtel LATAM which have been pledged pursuant to the Mtel Loan Agreement
which
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pledge shall be released immediately upon consummation of the transactions
contemplated by this Agreement. A "Material Subsidiary" shall mean any
operating Subsidiary of Mtel LATAM in Argentina, Brazil (other than Teletrim or
Vicom Servicos de Radiochamada Ltda. (collectively the "Designated
Subsidiary")), Colombia, Mexico, Venezuela or Puerto Rico, and any other
operating Subsidiary of Mtel LATAM whose revenues (calculated on a proportionate
basis) represent 7.5% or more of the consolidated revenues of Mtel LATAM, as
calculated by reference to such Subsidiary's and Mtel LATAM's most recent annual
Financial Statements.
(b) Except as set forth on Schedule 2.3, there are no outstanding
securities convertible into or exchangeable or exercisable for any shares of the
capital stock of any Material Subsidiary, or to Mtel LATAM's Knowledge, any
Subsidiary, nor are there outstanding any rights to subscribe for or to
purchase, or any options for the purchase of, or any agreement providing for the
issuance (contingent or otherwise) of, or any calls, commitments or claims of
any character relating to, any shares of the capital stock of any Material
Subsidiary, or to Mtel LATAM's Knowledge, any other Subsidiary, or any
securities convertible into or exchangeable or exercisable for any shares of any
such capital stock.
2.3 Capitalization. (a) As of the Closing, after giving effect to
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the provisions of Section 8.4 of the Stockholders Agreement but prior to the
issuance of the shares to the Purchaser, (i) the authorized capital stock of
Mtel LATAM consists solely of 1,000,000 shares of Common Stock, 8,000, of which
are issued and outstanding, and 200,000 shares of Preferred Stock, of which
88,000 are issued and outstanding and (ii) all of such issued and outstanding
shares of Common Stock and Preferred Stock are owned by Mtel International. All
of the capital stock of Mtel LATAM that is or will be issued and outstanding as
of the Closing is or will be at such time duly authorized, validly issued, fully
paid (other than the Common Shares) and non-assessable, and free and clear of
any Liens, except for the shares of capital stock of Mtel LATAM owned by Mtel
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International which have been pledged pursuant to the Credit, Security, Guaranty
and Pledge Agreement (the "Mtel Loan Agreement"), dated as of December 21, 1995,
as amended, among Skytel Corp., Mtel, the Subsidiaries of Mtel referred to
therein, the lenders
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referred to therein, The Chase Manhattan Bank (formerly known as Chemical Bank),
as administrative agent for the lenders, Credit Lyonnais New York Branch, as
documentation agent, and ▇.▇. ▇▇▇▇▇▇ Securities Inc., as co-syndication agent.
Except (i) for shares of Common Stock reserved (x) for issuance upon the
conversion of the Preferred Stock and (y) in connection with the Stock Option
Plan (as defined in the Stockholders Agreement), (ii) for the shares of capital
stock of Mtel LATAM owned by Mtel International which have been pledged to
lenders pursuant to the Mtel Loan Agreement, (iii) as otherwise contemplated by
this Agreement, the Stockholders Agreement (including the shares to be
distributed to Mtel International as provided in Section 8.4 of the Stockholders
Agreement), the Contribution Agreement, Standstill and Registration Rights and
the Puerto Rico Documents and (iv) as set forth on Schedule 2.3, (1) there are
no restrictions on the transfer of shares of capital stock of Mtel LATAM other
than those imposed by relevant state and federal securities laws, (2) there are
no agreements, understandings, proxies, trusts or other collaborative
arrangements concerning the voting, pledge, purchase and sale, or other transfer
of the capital stock of Mtel LATAM or any Material Subsidiary, or to Mtel
LATAM's Knowledge, the Designated Subsidiary to which Mtel LATAM or Mtel
International is a party or, to Mtel LATAM's Knowledge, to which any other
person is a party, and (3) no holder of any security of Mtel LATAM or, to Mtel
LATAM's Knowledge, any Material Subsidiary or the Designated Subsidiary is
entitled to preemptive, first refusal or similar statutory or contractual
rights, arising pursuant to any agreement or instrument to which Mtel LATAM or a
Material Subsidiary or to Mtel LATAM's Knowledge, the Designated Subsidiary is a
party, or which are otherwise binding upon Mtel LATAM or a Material Subsidiary,
or, to Mtel LATAM's Knowledge, the Designated Subsidiary or to which any other
person is a party. Except (1) as provided for in their respective
organizational documents, (2) as provided for in any of the Transaction
Documents and (3) as set forth on Schedule 2.3, neither Mtel LATAM nor, to Mtel
LATAM's Knowledge, any Material Subsidiary or the Designated Subsidiary has any
obligation (contingent or otherwise) to purchase, redeem or otherwise acquire
any of its equity securities or any interest therein or to pay any dividend or
make any other distribution in respect thereof, and no person has demand or
other rights to cause Mtel LATAM or any
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Material Subsidiary to file any registration statement under the Securities Act
relating to any securities of Mtel LATAM or any Material Subsidiary, or any
right to participate in any such registration.
(b) Except for (i) the Preferred Shares, the Puerto Rico Shares,
and the options and shares in connection with the Stock Option Plan, or (ii) as
otherwise contemplated by this Agreement and the Stockholders Agreement, there
are no outstanding securities convertible into or exchangeable or exercisable
for any shares of the capital stock of Mtel LATAM, nor are there outstanding any
rights to subscribe for or to purchase, or any options for the purchase of, or
any agreement providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, any shares of the
capital stock of Mtel LATAM or any securities convertible into or exchangeable
or exercisable for any shares of such capital stock.
2.4 Authorization; Valid and Binding Agreements. Each of Mtel, Mtel
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International and Mtel LATAM has all requisite corporate power and authority to
execute and deliver this Agreement and the other Transaction Documents to which
it is a party and to perform all of its obligations and undertakings hereunder
and thereunder and to carry out the transactions contemplated hereby and
thereby. The execution and delivery of this Agreement and the other Transaction
Documents to which it is a party, the performance by Mtel, Mtel International
and Mtel LATAM of their obligations hereunder and thereunder, and the issuance
and sale of the Shares have been duly authorized by all necessary corporate
action including Board of Directors approval on the part of Mtel, Mtel
International and Mtel LATAM. This Agreement and the other Transaction
Documents to which Mtel, Mtel International or Mtel LATAM, as the case may be,
is a party have been duly and validly executed and delivered by Mtel, Mtel
International or Mtel LATAM, as the case may be. Assuming due authorization,
execution and delivery by the Purchaser, this Agreement and the other
Transaction Documents to which Mtel, Mtel International or Mtel LATAM, as the
case may be, is a party constitute legal, valid and binding obligations of Mtel,
Mtel International or Mtel LATAM, as the case may be, enforceable against Mtel,
Mtel International or Mtel LATAM, as the case may be, in accordance with their
terms, except as enforcement
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thereof may be limited by (i) bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect affecting creditors' rights
generally and (ii) general principles of equity (regardless of whether the
application of such principles is considered in a proceeding in equity or at
law).
2.5 Financial Statements. (a) Mtel LATAM has delivered to the
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Purchaser copies of the following financial statements: (i) audited
consolidated Financial Statements (as defined below) of Mtel LATAM and its
Subsidiaries as of and for the fiscal years ended December 31, 1993, 1994 and
1995, together with reports on such audited consolidated Financial Statements of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, Mtel LATAM's independent public accountants, (ii) the
unaudited consolidated Financial Statements of Mtel LATAM and its Subsidiaries
as of and for the six month period ended June 30, 1996, (iii) the audited
Financial Statements of each Material Subsidiary as of and for the fiscal years
ended December 31, 1993, 1994 and 1995, together with reports thereon of such
Material Subsidiary's independent public accountants and (iv) the unaudited
trial account balances of each Material Subsidiary as of and for the six month
period ended June 30, 1996; provided that in the case of each of clauses (iii)
and (iv) above, only to the extent such Subsidiary was in existence and
operating on the relevant date of such Financial Statement as to which the
representation is made. "Financial Statements" shall mean the balance sheet as
of the date(s) indicated and the related statements of operations, cash flows
and changes in shareholders' equity (including all related notes and schedules
thereto) for the period(s) indicated. The Financial Statements referred to in
clauses (i), (ii), (iii) and (iv) above are collectively referred to herein as
the "Mtel LATAM Statements."
(b) All of the audited Mtel LATAM Statements have been prepared
in accordance with United States generally accepted accounting principles
("GAAP"), except as set forth in the notes thereto, and all of the Mtel LATAM
Statements accurately set forth and fairly present in all material respects the
consolidated financial position and results of operations of Mtel LATAM and its
Material Subsidiaries as of the respective dates thereof and for the respective
periods covered thereby. Schedule 2.5 sets forth the method of accounting
treatment used in
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the Financial Statement of Mtel LATAM for each of the Material Subsidiaries for
each of the respective periods.
2.6 Undisclosed Liabilities. As of the date hereof, except for
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liabilities (i) reflected on or reserved against on the balance sheets as of
December 31, 1995 or June 30, 1996 of Mtel LATAM or the Material Subsidiaries or
disclosed in any note thereto provided to the Purchaser, (ii) set forth on
Schedule 2.6 hereto, (iii) incurred in the ordinary course of Mtel LATAM's or
any of the Material Subsidiaries' business or (iv) contemplated by this
Agreement, neither Mtel LATAM nor any of the Material Subsidiaries has any
liabilities (absolute, accrued, contingent or otherwise) which would be required
by GAAP to be reflected on or reserved against on the balance sheet of Mtel
LATAM or any of the Material Subsidiaries.
2.7 No Conflicts, Violation, Etc. The execution and delivery by
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Mtel, Mtel International or Mtel LATAM, as the case may be, of this Agreement
and the other Transaction Documents to which such person is a party does not,
and the performance by Mtel, Mtel International or Mtel LATAM, as the case may
be, of its obligations under this Agreement and the other Transaction Documents
to which such person is a party and the consummation of the transactions
contemplated hereby and thereby, will not (a) conflict with or result in
violation or breach of any provision of the charter or by-laws or similar
organizational documents of Mtel, Mtel International or Mtel LATAM or any
Material Subsidiary, or to Mtel LATAM's Knowledge, any other Subsidiary; (b)
conflict with or result in a violation or breach of any law, regulation, rule,
judgment, decree, order, of any court or governmental authority to which Mtel,
Mtel International or Mtel LATAM or any Material Subsidiary or to Mtel LATAM's
Knowledge, the Designated Subsidiary, may be subject; (c) cause or give the
right to cause the acceleration of the maturity of any debt or obligation of
Mtel, Mtel International, Mtel LATAM or any Material Subsidiary or to Mtel
LATAM's Knowledge, the Designated Subsidiary; or (d) violate, or be in conflict
with, or constitute a default under, or permit the termination of, or result in
the creation of any Lien upon any property of Mtel, Mtel International, Mtel
LATAM or any Material Subsidiary or to Mtel LATAM's Knowledge, the Designated
Subsidiary, under, any agreement to which Mtel LATAM or
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any Material Subsidiary or to Mtel LATAM's Knowledge, the Designated Subsidiary,
is a party or by which Mtel LATAM or any Material Subsidiary or to Mtel LATAM's
Knowledge, the Designated Subsidiary, is bound, except in the case of clauses
(b), (c) and (d) above, for such violations, conflicts or defaults which would
not have a Material Adverse Effect or in the case of Mtel or Mtel International,
a material adverse effect on the business or financial condition of Mtel or Mtel
International, and each of their Subsidiaries, taken as a whole, or those as to
which requisite waivers or consents have been obtained.
2.8 Consents. Assuming the accuracy of the representation of the
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Purchaser set forth in Section 3.5 hereof, except as set forth on Schedule 2.8
hereof, no consents, approvals, actions or authorizations of, or registrations,
declarations or filings with or notices to, any administrative, governmental or
other public authority are required to be obtained or made by Mtel, Mtel
International or Mtel LATAM or any Material Subsidiary or to Mtel LATAM's
Knowledge, the Designated Subsidiary, in connection with (i) the execution,
delivery or performance of this Agreement and the other Transaction Documents to
which it is a party, (ii) the consummation of the transactions contemplated
hereby and thereby, or (iii) the issuance of the Securities, except where the
failure to obtain such consent, approval, action or authorization or make such
registration, declaration or filing would not have a Material Adverse Effect.
Mtel has taken all action necessary to designate Mtel LATAM an "Unrestricted
Subsidiary" pursuant to the Mtel Loan Agreement and the Indenture (as
hereinafter defined).
2.9 Exemption from Securities Act. Assuming that the
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representations, warranties and acknowledgments of the Purchasers provided for
in Section 3.5 of this Agreement or otherwise contained herein are true and
correct, the sale of the Shares pursuant to this Agreement will be exempt from
the registration provisions of the Securities Act of 1933, as amended (the
"Securities Act"), and the registration provisions of any blue sky or other
state securities law or regulation (hereinafter collectively referred to as
"blue sky laws") of any applicable jurisdiction.
2.10 Litigation. There are no actions, suits, proceedings pending or,
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to Mtel LATAM's Knowledge,
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threatened, against Mtel, Mtel International or Mtel LATAM or any of its
Material Subsidiaries in any court or before or by any governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, which
seeks to restrain, enjoin, prevent the consummation of or otherwise challenge
this Agreement, any Transaction Document or the issuance of the Securities, or
which, if adversely determined, would have a Material Adverse Effect.
2.11 No Material Adverse Change. Except as set forth on Schedule 2.11
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hereof, or in the June 30, 1996 Mtel LATAM Financial Statements, or as
contemplated by this Agreement, since December 31, 1995, there has not been a
Material Adverse Effect.
2.12 Compliance with Laws. Except as set forth in Schedule 2.12
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hereto, neither Mtel LATAM nor any of the Material Subsidiaries is in violation
of any statutes, laws, ordinances, governmental rules or regulations or any
judgment, order or decree (federal, state, local or foreign) to which any of
them is subject, or has failed to obtain any licenses, permits, franchises or
other governmental authorizations necessary to the ownership or operation of
their respective properties or the conduct of their respective businesses,
except for such violations or failures to obtain as would not have a Material
Adverse Effect.
2.13 Certificates, Authorizations, Permits and Licenses. (a) Except
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as set forth on Schedule 2.13(a) hereto, Mtel LATAM and each of the Material
Subsidiaries and, to Mtel LATAM's Knowledge, the Designated Subsidiary, possess
such certificates, authorizations and permits issued by the appropriate federal,
state and foreign regulatory agencies or bodies as are necessary to conduct the
business as now operated by them except where the failure to possess the same
would not have a Material Adverse Effect.
(b) All paging and messaging licenses, permits, and similar
regulatory documents which are material to the Business or operations of Mtel
LATAM and its Material Subsidiaries and, to Mtel LATAM's Knowledge, the
Designated Subsidiary, (the "Licenses") are in full force and effect and free
and clear of all Liens which have been imposed by an action of Mtel LATAM or the
12
Material Subsidiary and, to Mtel LATAM's Knowledge, the Designated Subsidiary,
as the case may be, and such validity and effectiveness, to Mtel LATAM's
Knowledge, have not been impaired by the passage of any law, statute, or
regulation by any governmental authority in an applicable jurisdiction since the
granting or assignment of the License. Mtel LATAM and its Material Subsidiaries
and, to Mtel LATAM's Knowledge, the Designated Subsidiary, are not, and have not
received any notice that Mtel LATAM or a Material Subsidiary or, to Mtel LATAM's
Knowledge, the Designated Subsidiary, is, in default (or with the giving of
notice or lapse of time or both, would be in default) under, or has violated,
any such License. Each Material Subsidiary and, to Mtel LATAM's Knowledge, the
Designated Subsidiary holds or has a right to use, and following the Closing
will hold or have a right to use, the necessary licenses to operate its paging
and messaging services on the 931.9375 MHz frequency and except as set forth on
Schedule 2.13 hereof, none of such licenses expires in accordance with its terms
prior to December 31, 1997.
2.14 Intellectual Property. Each of Mtel LATAM and each Material
---------------------
Subsidiary has all of its respective right, title and interest in, or to, or a
valid and binding license to use certain intellectual property consisting of
trademarks, software and paging technology which is set forth on Schedule 2.14
hereto (the "Intellectual Property"). All of such licenses are in full force
and effect, except where the failure to be in full force and effect would not
have a Material Adverse Effect. To Mtel LATAM's Knowledge, each of Mtel LATAM
and each Material Subsidiary has all trademarks, tradenames, licenses (other
than paging licenses) and similar intellectual property necessary for the
operation of its business as presently conducted, except where the failure to
have such intellectual property would not have a Material Adverse Effect.
2.15 Expenditures. Schedule 2.15 hereto sets forth a summary as of
------------
the date hereof of the capital expenditures, working capital requirements, and
business development costs incurred by Mtel LATAM or the Subsidiaries from
January 1, 1996 through June 30, 1996 that have been financed through loans made
by Mtel or Mtel International.
13
2.16 Affiliate Transactions. Schedule 2.16 lists (i) all material
----------------------
contracts, arrangements or transactions between, on the one hand, Mtel LATAM or
any Subsidiary, and on the other hand, any of Mtel LATAM's affiliates including,
without limitation, Mtel and Mtel International and (ii) any agreements to enter
into any such contracts, arrangements or transactions.
2.17 Foreign Corrupt Practices Act. To Mtel LATAM's Knowledge,
-----------------------------
neither Mtel LATAM, Mtel International, Mtel, nor any of the Material
Subsidiaries, or any of their respective officers, employees or directors acting
at the direction of Mtel LATAM has taken any action in violation of the Foreign
Corrupt Practices Act of the United States, as amended (the "FCPA").
2.18 Brokers. In connection with the issuance and sale of the
-------
Shares, Mtel has agreed to cause Mtel LATAM to pay the fees and expenses of
▇▇▇▇▇▇, Read & Co. Inc. ("▇▇▇▇▇▇ Read") pursuant to that certain Agreement dated
October 17, 1995 between Mtel LATAM and ▇▇▇▇▇▇ Read. Mtel LATAM has dealt with
no broker, finder, commission agent or other person in connection with the sale
of the Shares and the transactions contemplated by this Agreement, and Mtel
LATAM is under no obligation to pay any broker's fee or commission in connection
with such transactions, other than fees payable to ▇▇▇▇▇▇ Read as placement
agent in connection with the issuance and sale of the Shares by Mtel LATAM and
for services rendered in connection with related transactions, which fees are
the obligation solely of Mtel LATAM.
2.19 Waiver and Consent. Mtel LATAM has provided the Purchaser with
------------------
true and correct copies of (i) that certain Amendment No. 2, dated August 23,
1996, to the Mtel Loan Agreement and (ii) the Supplemental Indenture, dated July
17, 1996, by and between Mtel and Texas Commerce Bank National Association, as
trustee (the "Trustee") supplementing the Indenture (as amended, the
"Indenture"), dated as of December 29, 1994, between Mtel and the Trustee,
relating to the 13-1/2% Senior Notes due 2002.
2.20 Employee Benefit Plans. Neither Mtel LATAM nor any of its
----------------------
Material Subsidiaries maintains, sponsors, or contributes (or during the last
five (5) years has been obligated to maintain, sponsor or contrib-
14
ute or maintained, sponsored or contributed) to any program or arrangement that
is an "employee pension benefit plan," an "employee welfare benefit plan," a
"multiple employer welfare arrangement," or a "multiemployer plan", as those
terms are defined in Sections 3(1), 3(2), 3(4) or 3(37) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
2.21 Contracts. Schedule 2.21 sets forth a list of all contracts to
---------
which Mtel LATAM, any Material Subsidiary, or to Mtel LATAM's Knowledge, any
Subsidiary (except Teletrim) is a party which have an obligation or commitment
of greater than $2 million per year (the "Material Contracts"). No default or
defaults (without regard to notice or lapse of time or both) exist by Mtel LATAM
or, to Mtel LATAM's Knowledge, any of its Subsidiaries in the due performance by
it, or, to Mtel LATAM's Knowledge, by the other party or parties thereto, of any
term, covenant or condition of any Material Contract and all of such Material
Contracts are in full force and effect as of the date hereof, except for such
defaults or failures to be in full force and effect which would not have a
Material Adverse Effect.
3. Representations and Warranties of the Purchaser. The Purchaser
-----------------------------------------------
represents and warrants to Mtel LATAM as of the date hereof and as of the
Closing Date (except as otherwise stated herein) as follows :
3.1 Organization. The Purchaser is a limited partnership duly
------------
formed, validly existing and in good standing under the laws of the Cayman
Islands. Purchaser has full partnership power and authority to own and operate
its assets and properties and carry on its businesses as presently conducted.
3.2 Authority. The Purchaser has all requisite power and authority
---------
to execute and deliver this Agreement and the other Transaction Documents to
which it is a party and to perform all of its obligations and undertakings
hereunder and thereunder and to carry out the transactions contemplated hereby
and thereby. The execution and delivery of this Agreement and the other
Transaction Documents to which the Purchaser is a party and the performance by
the Purchaser of its obligations hereunder and thereunder have been duly
authorized by all
15
necessary action on the part of the Purchaser. This Agreement and the other
Transaction Documents to which the Purchaser is a party have been duly and
validly executed and delivered by the Purchaser. Assuming due authorization,
execution and delivery by Mtel, Mtel LATAM and Mtel International, this
Agreement and the other Transaction Documents to which the Purchaser is a party
constitute legal, valid and binding obligations of the Purchaser, enforceable
against the Purchaser in accordance with their terms, except as enforcement
thereof may be limited by (i) bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect affecting creditors' rights
generally and (ii) general principles of equity (regardless of whether the
application of such principles is considered in a proceeding in equity or at
law).
3.3 Consents. No consents, approvals, actions or authorizations of,
--------
or registrations, declarations or filings with or notices to, any
administrative, governmental or other public authority, are required to be
obtained or made by the Purchaser in connection with (i) the execution, delivery
or performance of this Agreement and the other Transaction Documents to which it
is a party or (ii) the consummation of the transactions contemplated hereby and
thereby except for as required by reasons pertaining specifically to Mtel LATAM
or any Subsidiary or except where the failure to obtain such consents,
approvals, actions or authorizations or make such registration, declaration, or
filing would not have a Material Adverse Effect and would not have a material
adverse effect on the transactions contemplated hereby.
3.4 No Conflicts, Violation, Etc. The execution and delivery by
----------------------------
Purchaser of this Agreement and the other Transaction Documents to which it is a
party does not, and the performance by Purchaser of its obligations under this
Agreement and the other Transaction Documents and the consummation of the
transactions contemplated hereby and thereby will not (a) conflict with or
result in a violation or breach of any provision of the charter or by-laws or
similar organizational documents of Purchaser; (b) conflict with or result in a
violation or breach of any law, regulation, rule, judgment, decree, order, of
any court or governmental authority to which Purchaser may be subject; or (c)
violate, or be in con-
16
flict with, or constitute a default under, or permit the termination of, or
result in the creation of any Lien upon the Shares under, any agreement to which
Purchaser is a party or by which Purchaser is bound except in the case of
clauses (b) and (c) above, for such violations, conflicts, or defaults which
would not have a Material Adverse Effect and would not have a material adverse
effect on the transactions contemplated hereby.
3.5 Purchase for Investment. The Purchaser represents that (i) it is
-----------------------
acquiring the Shares for its own account, for investment purposes only and not
with a view to the resale or distribution thereof or with any present intention
of distributing or selling any of the Shares, it being understood that the right
to dispose of such Shares shall be entirely within the discretion of the
Purchaser; (ii) it has authority to make the representations contained in this
Article 3; (iii) it has sufficient knowledge and experience in financial and
business matters so as to be capable of evaluating the merits and risks of its
investment in the Shares and is capable of bearing the economic risk of such
investment, including a complete loss of the investment in the Shares; (iv) it
is an "accredited investor" within the meaning of Rule 501 of Regulation D of
the Securities Act or a similar institutional investor; (v) it is acquiring all
the Shares to be acquired by it hereunder with no view or intention to offer for
sale any of the Shares in a manner which would violate federal or state
securities laws; subject, however, to any requirement of law that the
disposition of its property shall at all times be and remain within its control;
(vi) that it is aware that the Shares, and that any shares issuable upon the
exchange or conversion of the Shares, have not been and, subject to the terms of
the Stockholders Agreement and the Contribution and Registration Rights
Agreement, as the case may be, will not be registered under the Securities Act
and may not be offered or sold within the United States to, or for the account
or benefit of, U.S. persons, except as provided below; and (vii) it has received
the information it has requested in connection with its execution of this
Agreement and its purchase of the Shares, and has been given the opportunity and
right to meet, and to ask questions and receive answers from, the
representatives of Mtel LATAM and to investigate and inquire into all aspects of
Mtel LATAM and the terms and conditions of the purchase of the Shares.
17
The Purchaser agrees that the following restrictive legends will be
placed on certificates representing any or all of the Shares and that transfer
of any or all of the Shares may be refused by Mtel LATAM's transfer agent unless
the Shares for which transfer is sought are registered under the Securities Act
and all other applicable federal securities or blue sky laws or unless the
Purchaser provides information satisfactory to Mtel LATAM that such registration
is not required:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS
ON TRANSFER AND CERTAIN OTHER CONDITIONS, AS SPECIFIED IN A STOCKHOLDERS
AGREEMENT, DATED AS OF SEPTEMBER 19, 1996 (THE "STOCKHOLDERS AGREEMENT"),
COPIES OF WHICH ARE ON FILE WITH THE SECRETARY OF MTEL LATIN AMERICA, INC.
("MTEL LATAM") AND WHICH WILL BE FURNISHED WITHOUT CHARGE TO A STOCKHOLDER
UPON WRITTEN REQUEST THEREFOR FROM SUCH STOCKHOLDER. THE HOLDER OF THIS
CERTIFICATE, BY ACCEPTANCE OF THIS CERTIFICATE, AGREES TO BE BOUND BY ALL
OF THE PROVISIONS OF SUCH STOCKHOLDERS AGREEMENT.
NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION
OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT
PURSUANT TO THE PROVISIONS OF SUCH STOCKHOLDERS AGREEMENT AND, EXCEPT AS
OTHERWISE PROVIDED IN SUCH AGREEMENT, (A) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 AND THE RULES AND
REGULATIONS IN EFFECT THEREUNDER AND ALL APPLICABLE STATE SECURITIES OR
"BLUE SKY" LAWS (SUCH FEDERAL AND STATE LAWS, THE "SECURITIES LAWS") OR (B)
IF MTEL LATAM HAS BEEN FURNISHED WITH AN OPINION OF COUNSEL FOR THE HOLDER,
WHICH OPINION AND COUNSEL SHALL BE REASONABLY SATISFACTORY TO MTEL LATAM,
TO THE EFFECT THAT SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION
OR OTHER DISPOSITION IS EXEMPT FROM THE PROVISIONS OF THE SECURITIES LAWS."
In addition, the following legend shall be added to the Purchaser's certificates
representing the Common Stock:
18
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO MANDATORY
EXCHANGE RIGHTS, PURSUANT TO WHICH THESE SECURITIES WILL BE EXCHANGED FOR
COMMON STOCK OF MOBILE TELECOMMUNICATION TECHNOLOGIES CORP. IN ACCORDANCE
WITH THE TERMS OF THE STOCKHOLDERS AGREEMENT. TRANSFEREES ACQUIRING THE
SECURITIES REPRESENTED BY THIS CERTIFICATE MUST AS A CONDITION TO SUCH
TRANSFER ENTER INTO AN AGREEMENT WITH THE ISSUER AND ITS PARENT PURSUANT TO
WHICH IT AGREES TO BE BOUND BY THE FOREGOING EXCHANGE RIGHTS. ANY
PURPORTED TRANSFER NOT COMPLYING WITH THE FOREGOING SENTENCE SHALL BE NULL
AND VOID."
In addition, the following legend shall be added to the Purchaser's certificates
representing the Common Stock:
"THE TOTAL AMOUNT OF CONSIDERATION TO BE PAID FOR THE SECURITIES
REPRESENTED BY THIS CERTIFICATE IS $13,000,000 AND THE AMOUNT PAID FOR SUCH
SECURITIES WAS $5,000,000."
In addition, the following legend shall be added to the certificates
representing the Preferred Stock:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO MANDATORY
OBLIGATIONS TO EXCHANGE THESE SECURITIES IN EXCHANGE FOR COMMON STOCK OF
MOBILE TELECOMMUNICATION TECHNOLOGIES CORP. ("MTEL") IN ACCORDANCE WITH THE
TERMS OF THE STOCKHOLDERS AGREEMENT (INCLUDING THE MANDATORY OBLIGATION TO
EXCHANGE THESE SECURITIES IN EXCHANGE FOR COMMON STOCK OF MTEL IN THE EVENT
THAT SHARES OF COMMON STOCK OF MTEL LATIN AMERICA, INC. ARE EXCHANGED FOR
MTEL COMMON STOCK). TRANSFEREES ACQUIRING THE SECURITIES REPRESENTED BY
THIS CERTIFICATE MUST AS A CONDITION TO SUCH TRANSFER ENTER INTO AN
AGREEMENT WITH THE ISSUER AND ITS PARENT PURSUANT TO WHICH IT AGREES TO BE
BOUND BY THE FOREGOING EXCHANGE RIGHTS. ANY PURPORTED TRANSFER NOT
COMPLYING WITH THE FOREGOING SENTENCE SHALL BE NULL AND VOID."
The Shares being delivered pursuant to this Agreement shall not be
transferable by the Purchaser
19
except (A) (i) pursuant to an effective registration statement under the
Securities Act, (ii) pursuant to Rule 144, or any successor rule, under the
Securities Act or (iii) upon receipt by Mtel LATAM of a written opinion of
counsel reasonably satisfactory to Mtel LATAM to the effect that the proposed
transfer is exempt from the registration requirements of the Securities Act and
relevant state securities laws and (B) following notice to the transferee of any
restrictions on the transfer of such Shares.
Upon complete satisfaction of the Purchaser's obligation pursuant to
Section 1.4 hereof, the Purchaser may deliver the certificates representing the
Common Stock to the secretary of Mtel LATAM who will replace such certificates
with certificates bearing the legends set forth above with the final legend
specific to the Purchaser's Common Stock deleted.
3.6 Additional Purchaser Representation. The Purchaser acknowledges
-----------------------------------
that it is aware that ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, the President and Chief Operating
Officer of Mtel LATAM, is the son-in-law of ▇▇▇▇ ▇. ▇▇▇▇▇▇, the Chairman of the
Board of Directors of Mtel and Chairman of the Board and Chief Executive Officer
of Mtel LATAM.
4. Counterparts. This Agreement may be executed in counterparts,
------------
each of which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.
5. Successors and Assigns. Neither the Purchaser's nor Mtel LATAM's
----------------------
rights or obligations under this Agreement shall be assigned, except for an
assignment by the Purchaser of its Shares and its rights and obligations under
this Agreement to an affiliate of the Purchaser that is controlled by the
general partner of the Purchaser; provided, however, that (i) such affiliate is
-------- -------
financially able to meet the obligations of the Purchaser contemplated hereby
and by the Transaction Documents; (ii) all of the Purchaser's rights and
obligations under the Puerto Rico Documents are simultaneously assigned to such
affiliate; and (iii) that such affiliate's assets are not "Plan Assets" as such
term is defined in Title 1 of ERISA. Any assignment in violation of the
foregoing shall be null and void. Subject to the preceding sentences of this
Section 5, the provisions of this
20
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of each of the parties hereto.
6. Collateral Agreements, Amendments and Waivers. This Agreement
------------------------------------- -------
(together with the documents delivered pursuant hereto) supersedes all prior
documents, understandings and agreements, oral or written, relating to this
transaction and, except for any confidentiality agreement currently existing
between the parties, constitutes the entire understanding between the parties
with respect to the subject matter hereof. Any modification or amendment to, or
waiver of, any provision of this Agreement may be made only by an instrument in
writing executed by all of the parties to this Agreement.
7. Expenses. Each party shall pay all costs and expenses incurred
--------
by it in connection with the negotiation, execution and delivery of this
Agreement and the transactions contemplated hereby. On the Closing Date, Mtel
LATAM shall reimburse the Purchaser for its reasonable out-of-pocket expenses
(supported by reasonable documentation) incurred in connection with the
transactions contemplated hereby, in a amount not to exceed in the aggregate
$325,000, which amount shall be deducted from the portion of the Purchase Price
to be paid by the Purchaser at the Closing pursuant to Section 1.1 hereof.
8. Invalid Provisions. If any provision of this Agreement is held
------------------
to be illegal, invalid or unenforceable under present or future laws, then, if
possible, such illegal, invalid or unenforceable provision will be modified to
such extent as is necessary to comply with such present or future laws and such
modification shall not affect any other provision hereof, provided that if such
provision may not be so modified such illegality, invalidity or unenforceability
will not affect any other provision, but this Agreement will be reformed,
construed and enforced as if such invalid, illegal or unenforceable provision
had never been contained herein.
9. Consolidation. For as long as the Purchaser shall hold more than
-------------
20% of the seats on the Board of Directors of Mtel LATAM, neither Mtel, Mtel
International nor Mtel LATAM shall take any position on any tax return providing
for the consolidation of Mtel LATAM with Mtel or Mtel International for tax
purposes, without the
21
