Exhibit 2a-3
AMENDMENT NO. 3 TO STOCK PURCHASE AGREEMENT
THIS AMENDMENT NO. 3 TO STOCK PURCHASE AGREEMENT (this "Amendment No.
3") is made as of the 14th day of October, 2004, by and among Telefonica
Moviles, S.A., a corporation organized under the laws of the Kingdom of Spain
("Purchaser"), each of the entities listed on the signature pages hereto (each,
a "Seller" and collectively, the "Sellers") and, solely to the extent this
Amendment No.3 amends, modifies or affects in any manner Sections 3.1(e),
6.13(b), 6.16, 6.17, 6.18, 6.19, 6.20, 6.21, 6.23, 6.24, 6.25, 6.26, 6.38, 6.40,
8.2 and 8.3 and Articles X, XI or XII of the Stock Purchase Agreement (as
defined below), BellSouth Corporation ("Seller Parent"). Capitalized terms used
but not otherwise defined herein shall have the meanings ascribed to such terms
in the Stock Purchase Agreement.
PRELIMINARY STATEMENTS
WHEREAS, Purchaser, Sellers and Seller Parent (solely for purposes of
Sections 3.1(e), 6.13(b), 6.16, 6.17, 6.18, 6.19, 6.20, 6.21, 6.23, 6.24, 6.25,
6.26, 6.38, 6.40, 8.2 and 8.3 and Articles X, XI and XII of the Stock Purchase
Agreement) are parties to a Stock Purchase Agreement, dated as of March 5, 2004,
as amended by Amendment No.1 to the Stock Purchase Agreement, dated as of July
8, 2004 and Amendment No.2 to the Stock Purchase Agreement, dated as of October
4, 2004 (collectively, the "Stock Purchase Agreement").
WHEREAS, in accordance with Section 12.2 of the Stock Purchase
Agreement, Purchaser, Sellers and Seller Parent desire to amend the Stock
Purchase Agreement on the terms and subject to the conditions set forth in this
Amendment No.3 to make certain amendments as set forth herein.
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and upon the terms and
subject to the conditions hereinafter set forth, the parties hereto intending to
be legally bound, hereby agree as follows:
ARTICLE I
AMENDMENTS
1.1 Amendments to Article I.
(a) The parties hereto agree that the following definitions are hereby
added to Section 1.1 of the Stock Purchase Agreement:
"Assignment Agreement" shall have the meaning set forth in
Section 4.15.
"Assignment Effective Date" shall have the meaning set forth
in Section 4.15.
"BSI" shall have the meaning set forth in Section 4.15.
"BSI Contracts" shall have the meaning set forth in Section
4.15.
"Guatemalan Acquired Company Receivables" shall have the
meaning set forth in Section 2.1 of Amendment No.3 to the Stock
Purchase Agreement.
"Nicaraguan Disputed Obligations" shall have the meaning set
forth in Section 2.1(b) of the Amendment No.3 to the Stock Purchase
Agreement.
1.2 Amendment to Article IV.
(a) The parties hereto agree that Article IV of the Stock Purchase
Agreement is hereby amended to add the following Section 4.15:
"4.15 BSI Contracts. BellSouth International, Inc. ("BSI") and
Purchaser are parties to that certain Assignment and Assumption
Agreement (the "Assignment Agreement") dated October 14, 2004 (the
"Assignment Effective Date") pursuant to which, among other things, BSI
assigns its rights and delegates its obligations to Purchaser under
certain contracts between BSI and third parties listed therein (the
"BSI Contracts"), and Purchaser assumes BSI's obligations under the BSI
Contracts. Subject to obtaining any required consents or approvals to
the assignment of the BSI Contracts to Purchaser by contractual
counterparties, the BSI Contracts are in full force and effect as of
the Assignment Effective Date and are enforceable in accordance with
their terms, subject to the Enforceability Limitations. To Sellers'
knowledge, neither BSI nor any Acquired Company is in material breach
under the terms of any of the BSI Contracts, and no other party to any
BSI Contract has made any claim that is now pending; provided that no
representation or warranty is made as to any payment obligations of BSI
or any Acquired Company under the BSI Contracts."
1.3 Amendment to Section 6.7(e). The parties hereto agree that Section
6.7(e) of the Stock Purchase Agreement is hereby amended and restated in its
entirety as follows:
"(e) Except as otherwise expressly set forth in this Agreement or
directed by Sellers in their sole discretion, Sellers will cause to be paid on
or prior to the Initial Closing Date, or any Subsequent Closing Date, if
applicable, any and all amounts owed or payable as of such Closing by any
Initial Acquired Company or Subsequent Acquired Company to any BellSouth Entity
or to any other Acquired Company pursuant to Section 6.7(d), including, solely
with respect to any BellSouth Entity, any amounts payable pursuant to Sections
6.10 and 6.13 or pursuant to the Technical Services Agreements; provided,
however, that in the event any such Initial Acquired Company or any such
Subsequent Acquired Company does not have the funds necessary to satisfy, pay,
or discharge the amounts due and payable to any BellSouth Entity or to any other
Acquired Company pursuant to Section 6.7(d) or is otherwise prohibited from
satisfying, paying or discharging such amounts as a result of any Debt or other
restriction, then Purchaser shall lend to such Initial Acquired Company or
Subsequent Acquired Company any amounts necessary in order to supplement any
existing cash in such Initial Acquired Company or Subsequent Acquired Company in
order to fully and completely satisfy, pay, or discharge any such amounts
payable pursuant to this Section 6.7(e), provided that such loan will be
effective only upon the acquisition by Purchaser of such Initial Acquired
Company or Subsequent Acquired Company and such loan will be considered Debt for
purposes of Section 2.2; and, provided, further, that
any amounts so funded by Purchaser to pay such amounts payable pursuant to this
Section 6.7 shall not be deemed to be Cash for purposes of Section 2.2."
1.4 Amendment to Section 6.15(b). The parties hereto agree that Section
6.15(b) of the Stock Purchase Agreement is hereby amended and restated in its
entirety as follows:
"(b) For a period of five (5) years from the applicable
Closing Date, Purchaser shall (i) provide for each Acquired Company
directors' and officers' liability insurance policies for the past and
current directors, officers or employees of such Acquired Company for
losses arising from claims made against the directors, officers, or
employee of each such Acquired Company for any wrongful act committed
before or after the applicable Closing Date having coverage amounts of
at least $25,000,000 per claim and annual aggregate coverage limit for
all claims of at least $100,000,000, and (ii) cause each Acquired
Company not to amend any Acquired Company Organizational Documents
relating to such Acquired Company in any way to reduce or eliminate the
level of indemnification provided by such Acquired Company to such past
and current directors, officers, and employees of such Acquired
Company."
1.5 Amendment to Section 10.2(a)(i)(A). The parties hereto agree that
Section 10.2(a)(i)(A) of the Stock Purchase Agreement is hereby amended by
deleting the words "Sections 4.10, 4.12 and 4.13" and inserting the words
"Sections 4.10, 4.12, 4.13, 4.14 and 4.15" in lieu thereof.
ARTICLE II
OTHER AGREEMENTS
2.1 Purchase of Minority Equity Interests in the Nicaraguan Acquired
Company and the Uruguayan Acquired Company.
(a) In accordance with the provisions of Section 3.2(d) of the Stock
Purchase Agreement, Purchaser hereby acknowledges and agrees that in the
event that the consummation of the direct purchase by a Seller of some or all
of the Minority Equity Interests in the Nicaraguan Acquired Company and/or
the Uruguayan Acquired Company occurs following the sale to Purchaser of such
Seller's Equity Interests in such Acquired Companies, Purchaser shall be
required to purchase the Minority Equity Interests held by such Seller at a
purchase price equal to the Minority Equity Allocated Payment (which amount
shall be calculated using the Estimated Acquired Company Debt and Estimated
Acquired Company Cash if the closing of the sale of the Minority Equity
Interests owned by such Seller occurs prior to the Determination Date),
regardless of the purchase price paid by such Seller to the Minority Equity
Holder for such Minority Equity Interests; provided, however, that in the
event that a Seller acquires the Minority Equity Interests in the Uruguayan
Acquired Company for a purchase price in excess of the Minority Equity
Allocated Payment for the Uruguayan Acquired Company, such Seller shall have
no recourse to Purchaser or any Acquired Company for the amount, if any, by
which such purchase price exceeds the Minority Equity Allocated Payment.
(b) In connection with the direct purchase by a Seller of the Minority
Equity Interests in the Nicaraguan Acquired Company and the subsequent sale
of such Minority Equity Interests by Sellers to Purchaser, Purchaser hereby
agrees that Seller, acting on behalf of the Nicaraguan Acquired Company, may
agree to settle, negotiate, discharge or forgive certain disputed
transactions between the Nicaraguan Acquired Company and the Minority Equity
Holder in the Nicaraguan Acquired Company and certain of its Affiliates, as
further described on Schedule 2.2 attached hereto (the "Nicaraguan Disputed
Obligations"); provided, however, that such settlement agreement may include
the withdrawal by the Nicaraguan Acquired Company of any rights that it may
have under the Nicaraguan Disputed Obligations, but may not in any manner
give rise to the assumption by the Nicaraguan Acquired Company of any further
obligation or liability.
2.2 Guatemala Receivables. Notwithstanding anything to the contrary
contained in Section 6.7(e) of the Stock Purchase Agreement, the parties hereto
hereby acknowledge and agree that at the Initial Closing certain receivables in
the aggregate amount of $3,706,399.55 owing by the Guatemalan Acquired Company
to a BellSouth Entity (the "Guatemalan Acquired Company Receivables"), shall be
satisfied by means of the endorsement to Purchaser by such BellSouth Entity of a
Promissory Note in the aggregate amount of $3,706,399.55 in exchange for a cash
payment to Sellers of such amount. The parties further acknowledge and agree
that (i) notwithstanding the fact that the Guatemalan Acquired Company
Receivables are represented by a Promissory Note, such Guatemalan Acquired
Company Receivables shall not be deemed to be Debt of the Guatemalan Acquired
Company for any purpose under the Stock Purchase Agreement, including, without
limitation, the determination of the Allocated Purchase Price of the Guatemalan
Acquired Company under the terms of Article II of the Stock Purchase Agreement,
and (ii) for the avoidance of doubt, the Allocated Purchase Price for the
Guatemalan Acquired Company shall be calculated without giving effect to such
Promissory Note.
2.3 Dissolution of Certain Intermediate Holding Companies.
Notwithstanding anything to the contrary contained the Stock Purchase Agreement,
Purchaser hereby acknowledges and agrees that, subject to the satisfaction of
the applicable closing conditions set forth in Article VII of the Stock Purchase
Agreement, it shall delay neither the Initial Closing nor any Subsequent Closing
due to the fact that any of BellSouth Panama Limited, BellSouth Ecuador Holdings
(BVI) I, Ltd. or Xxxx Holdings Corp. has not yet been dissolved or otherwise
eliminated as of the Initial Closing Date or any such Subsequent Closing Date,
as applicable, so long as (i) all assets and liabilities of each of the
foregoing entities have been distributed to Panama Cellular Holdings BV, Ecuador
Cellular Holdings BV or Latin America Cellular Holdings BV, as applicable; (ii)
all costs relating to the formal dissolution of such entities (including all
legal fees, registration expenses and Taxes) are borne by Sellers; and (iii)
Sellers shall use their best efforts to complete the formal dissolution of (or
otherwise eliminate) each entity as soon as practicable.
2.4 Schedule 4.5 to the Stock Purchase Agreement. Schedule 4.5 to the
Stock Purchase Agreement is hereby supplemented by the attached unaudited
combined balance sheets of the BellSouth Latin America Group (including
consolidated legal entities by country) as of November 30, 2003 and 2002,
together with the unaudited combined statements of income for the two year
period ending November 30, 2003, which balance sheets and statements of income,
although previously delivered to Purchaser, were inadvertently not included in
Schedule 4.5 to the Stock Purchase Agreement when delivered at the time of
execution of the Stock Purchase Agreement.
2.5 Phantom Stock Option Plan. Purchaser hereby (i) acknowledges that
under the terms of the Phantom Stock Option Plan maintained by certain of the
Acquired Companies, all awards granted pursuant to such plan to employees of
such Acquired Companies will automatically vest on the Closing Date applicable
to each such Acquired Company, and (ii) agrees that, notwithstanding anything to
the contrary contained herein or in such Phantom Stock Option Plan, it shall
pay, or cause each applicable Acquired Company to pay, within five (5) business
days following the Closing involving such Acquired Company, to each employee of
such Acquired Company that is a participant in the Phantom Stock Option Plan all
payments then due to such employee.
2.6 Purchase Price Adjustment. Notwithstanding anything to the contrary
contained in Section 2.4(c) of the Stock Purchase Agreement, the parties hereto
hereby acknowledge and agree that as a modification to the procedural mechanism
set forth in the final sentence of Section 2.4(c) of the Stock Purchase
Agreement providing for a minimum adjustment threshold of Two Million Dollars
($2,000,000) applicable to all adjustments to be made in connection with any
Closing, such threshold shall instead be applied to the final determination of
all adjustments, taken as a whole, to be made pursuant to Section 2.4 in
connection with both the Initial Closing and the Subsequent Closing involving
the transfer of Sellers' Equity Interests in the Holding Company that is the
successor to Xxxx Holdings and that was formed to hold the Peruvian Acquired
Company, the Uruguayan Acquired Company, the Colombian Acquired Company, the
Nicaraguan Acquired Company and the Venezuelan Acquired Company; provided,
however, that the forty-five (45) day period referred to in Section 2.4(c) of
the Stock Purchase Agreement shall commence after such Subsequent Closing for
both the Initial Closing and such Subsequent Closing.
2.7 Filing of Form 8832. Purchaser hereby acknowledges that Sellers, or
one of their United States Affiliates, will file, on behalf of Panama Cellular
Holdings B.V. and BellSouth Panama Limited, United States Tax Form 8832 with
respect to BSC de Panama Holdings, SRL to make an election (the "Election") to
treat BSC de Panama Holdings, SRL as a disregarded entity for United States tax
purposes as of a date prior to the Closing Date for the sale of Panama Cellular
Holdings B.V. At Seller's request, Purchaser agrees to cause Panama Cellular
Holdings B.V. to execute a copy of such tax form after the Closing Date, and
take such other action as Seller reasonably requests, to perfect the Election
for United States federal income tax purposes.
ARTICLE III
MISCELLANEOUS
3.1 Ratification and Confirmation of the Stock Purchase Agreement; No
Other Changes. Except as modified by this Amendment No. 3, the Stock Purchase
Agreement is
hereby ratified and confirmed in all respects. Nothing herein shall be held to
alter, vary or otherwise affect the terms, conditions and provisions of the
Stock Purchase Agreement, other than as contemplated herein.
3.2 Severability. If any provision of this Amendment No.3 shall be held
invalid, illegal or unenforceable, the validity, legality or enforceability of
the other provisions hereof shall not be affected thereby, and there shall be
deemed substituted for the provision at issue a valid, legal and enforceable
provision as similar as possible to the provision at issue.
3.3 Applicable Law. This Amendment No.3 shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York without giving effect to the principles of conflicts of law thereof.
3.4 Counterparts. This Amendment No.3 may be executed and delivered
(including by facsimile transmission) in one or more counterparts, all of which
shall be considered one and the same agreement and shall become effective when
one or more counterparts have been signed by each of the parties and delivered
to the other parties, it being understood that all parties need not sign the
same counterpart.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3
to be signed, all as of the date first written above.
TELEFONICA MOVILES, S.A.
By: /s/ Xxxxxx Xxxxx Xxxxxxx /s/ Xxxxxxx Xxxxx Mozo
Name: Xxxxxx Xxxxx Marques /Xxxxxxx Xxxxx Mozo
Title: General Manager /Chief Financial Officer
BELLSOUTH INTERNATIONAL, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx
Title: V.P. - Corp. & Business Development
BELLSOUTH ENTERPRISES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx
Title: Authorized Signatory
BELLSOUTH INTERNATIONAL LATIN AMERICA, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice-President
BELLSOUTH ARGENTINA HOLDINGS, LLC
By: /s/ Xxxxxxx X. Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx
Title: Authorized Signatory
BELLSOUTH CHILE, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx
Title: Authorized Signatory
BELLSOUTH CHILE HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx
Title: Authorized Signatory
BELLSOUTH CORPORATION,
To the extent that this
Amendment No.3 amends,
modifies or affects in any
manner the Sections and
Articles of the Stock
Purchase Agreement
identified in the Preamble
only
By: /s/ Xxxxxxx X. Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx
Title: Authorized Signatory