SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Event: October 17, 1997
UNITED INTERNATIONAL HOLDINGS, INC.
--------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Delaware 0-21974 84-1116217
- --------------- ------------ -----------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification #)
incorporation)
4643 South Ulster Street, Suite 1300, Denver, Co. 80237
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(Address of Principal Executive Office)
(303) 770-4001
----------------------------------------------------
(Registrant's telephone number, including area code)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
- ------- ------------------------------------
On September 9, 1997, the Registrant's wholly-owned subsidiaries, UIH Latin
America, Inc., UIH Argentina, Inc., United International Holdings Argentina,
S.A., and CV American Holdings L.L.C. (collectively the "Company"), signed a
definitive agreement to sell all of the Company's cable television assets in
Argentina to Supercanal Holding S.A. (the "Buyer"), an Argentine corporation.
Subsequent to September 9, 1997, this agreement was amended and restated to sell
each of the Company's interests in the Argentine regions of Bahia Blanca
("Bahia"), Comodoro Rivadavia and Trelew ("Comodoro"), and Santa Fe and Entre
Rios ("Santa Fe") separately. The sale of the Company's interests in Bahia,
Comodoro, and Santa Fe closed on October 17, 22, and 29, 1997, respectively. The
Company's interests in Bahia were purchased by Multicanal S.A., an Argentine
corporation, and the Buyer purchased all of the Company's interests in Comodoro.
The Buyer also agreed to purchase all the Company's interests in Santa Fe, but
subsequently assigned its rights to make such purchase to Multicanal S.A. and
Cablevision S.A., both Argentine corporations.
The sales price for Bahia, Comodoro and Santa Fe collectively was $268.2
million, $25.3 million of which consisted of remaining debt from the Company's
original acquisition of Bahia, Comodoro and Santa Fe. This seller debt was
assumed by the Buyer, Multicanal S.A. and Cablevision S.A., resulting in a net
sales price of $242.9 million. The payment was received in full in cash, except
for a total of $11.25 million placed in escrow, of which $6.75 million will be
received on December 1, 1997 and the final $4.5 million will be received 12
months after closing, pending any adjustments or disputes.
The Company's approximate book value of the Argentine assets is $144.2 million,
resulting in an estimated gain on the transaction (after transaction costs of
approximately $0.6 million) of $98.1 million. Under the terms of its lending
arrangements with a group of banks, the Company repaid from the proceeds of the
sale all of its outstanding indebtedness under its bridge loan facility totaling
$110 million.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
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(b) PRO FORMA FINANCIAL INFORMATION.
The following unaudited pro forma consolidated balance sheet gives effect
to the sale of Bahia, Comodoro and Santa Fe as if each had occurred on
August 31, 1997. The following unaudited pro forma consolidated statements
of operations for the year ended February 28, 1997 and for the six months
ended August 31, 1997 give effect to the sale of Bahia, Comodoro and Santa
Fe as if each had occurred on January 1, 1996. The consolidated financial
information and notes thereto do not purport to represent what the
Registrant's results of operations would actually have been if such
transactions had in fact occurred on such date.
The pro forma adjustments are based upon currently available information
and upon certain assumptions that management believes are reasonable under
current circumstances. The unaudited pro forma consolidated financial
information and accompanying notes should be read in conjunction with the
consolidated financial statements and the related notes thereto, and other
financial information pertaining to the Registrant, filed with the
Securities and Exchange Commission.
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<TABLE>
<CAPTION>
As of August 31, 1997
-----------------------------------------------------------------------
Sale Of Sale of Sale of
Historical Bahia(1) Comodoro(2) Santa Fe(3) Pro Forma
---------- -------- ----------- ----------- ---------
(In Thousands)
CONSOLIDATED CONDENSED BALANCE SHEET
ASSETS
<S> <C> <C> <C> <C> <C>
Cash and cash equivalents and short-term
investments................................... $102,019 $ 41,655 $ 15,219 $ 22,020 $180,913
Restricted cash................................. 10,520 -- -- (5,114) 5,406
Escrowed cash................................... -- 4,630 2,429 4,191 11,250
Management fee receivables...................... 1,977 -- -- -- 1,977
Subscriber receivables, net..................... 5,014 (3,007) -- -- 2,007
Costs to be reimbursed by affiliated companies.. 10,786 -- -- -- 10,786
Property and equipment, net..................... 214,345 (4,604) -- -- 209,741
Acquisition, transaction and development costs.. 2,257 -- -- -- 2,257
Investments in and advances to affiliated
companies..................................... 301,858 -- (28,268) (50,410) 223,180
Goodwill........................................ 118,650 (60,158) -- -- 58,492
Other assets.................................... 66,007 (1,659) -- -- 64,348
-------- -------- -------- -------- --------
Total assets............................... $833,433 $(23,143) $(10,620) $(29,313) $770,357
======== ======== ========= ======== ========
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
Accounts payable, accrued liabilities and
other......................................... $ 50,644 $(14,804) $ (358) $ (167) $ 35,315
Note payable(4)................................. 110,000 (37,488) (20,295) (52,217) --
Current portion long-term debt.................. 4,705 -- -- -- 4,705
Purchase money notes payable to sellers......... 35,827 (6,256) (12,641) (16,930) --
Senior secured notes and other debt............. 753,637 -- -- -- 753,637
-------- -------- -------- -------- --------
Total liabilities......................... 954,813 (58,548) (33,294) (69,314) 793,657
Minority interest............................... 69 14 -- -- 83
Convertible preferred stock..................... 31,922 -- -- -- 31,922
Stockholders' (deficit) equity.................. (153,371) 35,391 22,674 40,001 (55,305)
-------- -------- --------- -------- --------
Total liabilities and stockholders'
(deficit) equity........................ $833,433 $(23,143) $(10,620) $(29,313) $770,357
======== ======== ======== ======== ========
</TABLE>
(1) Represents the Company's sale of Bahia for a net $88.0 million cash plus
assumption of the unpaid balance of purchase money notes payable to sellers
including accrued interest. The remaining adjustments eliminate the
historical assets, liabilities, and stockholders' equity of Bahia,
eliminate additional investments made subsequent to August 31, 1997, and
record the gain on sale.
(2) Represents the Company's sale of Comodoro for a net $46.2 million cash plus
assumption of the unpaid balance of purchase money notes payable to sellers
including accrued interest, the elimination of the historical investment
balance, and the gain on sale.
(3) Represents the Company's sale of Santa Fe for a net $79.1 million cash plus
assumption of the unpaid balance of purchase money notes payable to sellers
including accrued interest, the elimination of the historical investment
balance and investments made subsequent to August 31, 1997, and the gain on
sale.
(4) Under the terms of its lending arrangements with a group of banks, the
Company used the proceeds of the sale of the Argentine operations to retire
its outstanding indebtedness of $110.0 million to Toronto Dominion.
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<TABLE>
<CAPTION>
Fiscal Year Ended February 28, 1997
----------------------------------------------------------------------
Sale Of Sale of Sale of
Historical Bahia(1) Comodoro(2) Santa Fe(3) Pro Forma
---------- -------- ----------- ----------- ---------
(In Thousands, Except Share And Per Share Data)
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
<S> <C> <C> <C> <C> <C>
Service and other revenue....................... $ 30,244 $(4,385) $ -- $ -- $ 25,859
Management fee income from related parties...... 1,311 -- -- -- 1,311
Operating expense............................... (34,116) 2,031 -- -- (32,085)
Selling, general and administrative expense..... (46,155) 2,183 -- -- (43,972)
Depreciation and amortization................... (38,961) 1,592 -- -- (37,369)
--------- ------- ------- ----- ---------
Net operating loss........................... (87,677) 1,421 -- -- (86,256)
Other income (expense):
Equity in losses of affiliated companies, net... (47,575) -- -- -- (47,575)
Gain on sale of investment in
affiliated company............................ 65,249 -- -- -- 65,249
Interest, net................................... (66,330) 23 -- -- (66,307)
Provision for losses on investment
related costs................................. (5,859) -- -- -- (5,859)
Other........................................... 3,367 (22) -- -- 3,345
--------- ------- ------- ------ ---------
Net loss.................................... $(138,825) $ 1,422 $ -- $ -- $(137,403)
========= ======= ======= ====== =========
Net loss per common share.................... $ (3.56) $ 0.04 $ (3.52)
========= ======= =========
Weighted average number of shares
outstanding................................ 39,035,776 39,035,776 39,035,776
========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended August 31, 1997
----------------------------------------------------------------------
Sale Of Sale of Sale of
Historical Bahia(1) Comodoro(2) Santa Fe(3) Pro Forma
---------- -------- ----------- ----------- ---------
(In Thousands, Except Share And Per Share Data)
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
<S> <C> <C> <C> <C> <C>
Service and other revenue....................... $ 44,359 $(13,043) $ -- $ -- $ 31,316
Management fee income from related parties...... 738 -- -- -- 738
Operating expense............................... (27,896) 5,174 -- -- (22,722)
Selling, general and administrative expense..... (39,838) 4,395 -- -- (35,443)
Depreciation and amortization................... (38,751) 2,683 -- -- (36,068)
--------- -------- ------- ------ ---------
Net operating loss.......................... (61,388) (791) -- -- (62,179)
Other income (expense):
Equity in losses of affiliated companies, net... (37,542) -- 55 956 (36,531)
Interest, net .................................. (53,018) 932(4) 504(4) 1,297(4) (50,285)
Provision for losses on investment
related costs................................. (6,454) -- -- -- (6,454)
Other .......................................... (1,710) 50 -- -- (1,660)
--------- -------- ------- ------ ---------
Net loss..................................... $(160,112) $ 191 $ 559 $2,253 $(157,109)
========= ======== ======= ====== =========
Net loss per common share ................... $ (4.09) $ 0.01 $ 0.01 $ 0.06 $ (4.01)
========= ======== ======= ====== =========
Weighted average number of shares
outstanding................................ 39,191,640 39,191,640 39,191,640 39,191,640 39,191,640
========== ========== ========== ========== ==========
</TABLE>
(1) Represents the elimination of revenues and expenses for Bahia recognized
through consolidation during the year ended February 28, 1997 and the six
months ended August 31, 1997.
(2) Represents the elimination of the equity in losses of Comodoro recognized
during the six months ended August 31, 1997.
(3) Represents the elimination of the equity in losses of Santa Fe recognized
during the six months ended August 31, 1997.
(4) Represents the elimination of interest expense on the Toronto Dominion Note
incurred during the six months ended August 31, 1997.
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(c) EXHIBITS
10.1 Stock Purchase Agreement, dated as of October 17, 1997, by and
among Multicanal S.A., as Buyer, and United International
Holdings Argentina, S.A. and UIH Argentina, Inc., as Sellers,
relating to the sale of the companies operating in Bahia Blanca.
10.2 Stock Purchase Agreement, dated as of October 20, 1997, by and
among Supercanal Holding S.A., as Buyer, and United International
Holdings Argentina, S.A. and UIH Argentina, Inc., as Sellers,
relating to the sale of the companies operating in Comodoro
Rivadavia and Trelew
10.3 Stock Purchase Agreement, dated as of October 20, 1997, by and
among Supercanal Holding S.A., as Buyer, and UIH Argentina, Inc.
and CV American Holdings L.L.C., as Sellers, relating to the sale
of the companies operating in Santa Fe and Entre Rios.
10.4 Form of Escrow Agreement executed by and among U.S. Bank National
Association dba Colorado National bank, as Escrow Agent, and the
applicable Buyer and Sellers in connection with the closing of
the transactions contemplated by each of the foregoing Stock
Purchase Agreements.
10.5 Assignment and Amendment Agreement, dated as of October 29, 1997,
by and among Supercanal Holding S.A., as Assignor, Multicanal
S.A. and Cablevision S.A., as Assignees, and UIH Argentina, Inc.
and CV American Holdings L.L.C., as Sellers. This agreement was
signed, and the transactions contemplated thereby were closed, on
October 29, 1997.
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SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UNITED INTERNATIONAL HOLDINGS, INC.
Date: November 1, 1997
----------------
By: /s/ J. Timothy Bryan
-----------------------------------
J. Timothy Bryan
Chief Financial Officer
(A Duly Authorized Officer and
Principal Financial Officer)
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STOCK PURCHASE AGREEMENT
DATED OCTOBER 17, 1997
BETWEEN
Multicanal S.A., an Argentine corporation, hereinafter referred to as the
"Buyer", and United International Holdings Argentina, S.A., an Argentine
corporation ("UIH"), and UIH Argentina, Inc., a Colorado corporation ("UIHA").
UIH and UIHA are collectively referred to in this Agreement as the "Sellers."
The Sellers and the Buyer are jointly referred to as the "Parties."
RECITALS
The Sellers are the owners of the shares of stock of the Argentine companies set
forth on Schedule I, in proportion and quantities that are detailed on Schedule
I and the Buyer is interested in acquiring such shares pursuant to the terms and
conditions of this Agreement.
In consideration of the terms and conditions contained herein, the Parties agree
as follows:
ARTICLE 1
DEFINITIONS
As used herein, the following terms have the following meanings (terms defined
in singular to have the same meanings when used in plural and vice versa):
ADDITIONAL AGREEMENTS: Any agreement, instrument, certificate or other document
executed or delivered pursuant to this Agreement including, without limitation,
any Contract and any other documents (except opinions) delivered to the Buyer
pursuant to Article 6 .
AFFILIATE: Affiliate of a Person will mean, unless otherwise specified, any
entity that directly or indirectly, through one or more intermediaries,
controls, is controlled by or is under common control with the Person. For
purposes of this definition the term "control" means effective management
control of the Person including, without limitation, control through the power
to elect a sufficient number of directors or to appoint a sufficient number of
senior managers to obtain control or similar powers. A Person will be rebuttably
presumed to control another Person or entity if it owns 50% or more of the
equity or the voting power of the applicable entity.
AGREEMENT: This Stock Purchase Agreement (including the Exhibits and Schedules
attached hereto).
APPLICABLE PURCHASE AGREEMENTS: The purchase agreements under which the Sellers
acquired their ownership interests in the Companies.
<PAGE>
ASSETS: For any Person, all of the properties, Equipment, Systems, Licenses,
marks, commercial names, intellectual property rights, and other assets,
privileges, rights, interest, claims and goodwill of such Person, real and
personal, tangible and intangible, owned, leased or otherwise used by such
Person.
BUSINESS DAY: Any day on which banks in the State of New York, U.S.A., and in
the city of Buenos Aires, Argentina, are not required or authorized to be closed
by law.
CLOSING: As defined in Section 2.2 of this Agreement.
CLOSING DATE: The date on which the Closing occurs.
CLOSING LIABILITIES: All obligations, net of any amounts in escrow accounts to
provide for any such obligations, of each of the Companies at the Closing Date
that are or should be included as liabilities on the consolidated balance sheet
of the Companies as of said date in accordance with generally accepted
accounting principles in Argentina.
CLOSING CURRENT ASSETS: All assets of each of the Companies at the Closing Date
(net of any amounts in escrow accounts referred to in the definition of Closing
Liabilities) that are or should be included as current assets on the
consolidated balance sheet of the Companies as of said date in accordance with
generally accepted accounting principles in Argentina. Notwithstanding the
foregoing the purchase price for the put-call for the 20% (US$4.850.118) of
Cable Total will not be considered a closing liability.
COMFER: The Argentine Comite Federal de Radiodifusion.
COMPANIES: The Holding Companies and the Operating Companies.
CONTRACTS/COMMITMENTS: For any Person, any contract, mortgage, deed of trust,
bond, lease, license, note, franchise, certificate, option, warrant, right, or
such other instrument, document or written agreement, and any oral obligation,
right or agreement to which such Person is a party and/or beneficiary and/or
obligee and/or subscriber and/or by which such Person and/or any Assets or
securities of such Person are or may be bound, including, without limitation,
any License.
EQUIPMENT: Equipment includes, but is not limited to, electronic devices, trunk
and distribution cables; amplifiers; power supplies; conduit; cables and
pedestals; grounding and pole hardware, installed subscriber devices (including,
without limitation, drop lines, converters, encoders, transformers behind
television sets and fittings); "headend" (origination, transmission and
distribution system); hardware; tools; inventory; spare parts; maps and
engineering data; vehicles; microwave equipment; studios and other broadcast
facilities and other equipment for local programming; and all other tangible
property and facilities owned, used or held for use by the Operating Companies
in the Systems of the Companies.
GOVERNING DOCUMENTS: The bylaws (estatutos), articles or certificate of
incorporation or association, or other governing documents which may be
mandatory in any entity.
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GOVERNMENTAL AUTHORITY: Any court, administrative agency or commission, or any
other governmental organization, or any other governmental or quasi-governmental
agency, instrumentality or official, domestic or foreign.
HOLDING COMPANIES: Inversora TV Cable, S.A., Compania Teleinversora, S.A.,
Inversora Multivision, S.A., and Compania Cableinversora, S.A.
JUDGMENT: Any judgment, writ, order, decree or ruling of or by any court, judge
or magistrate, including any bankruptcy court or judge.
LAW: The civil and commercial law and any statute, ordinance, code or other law,
rule, regulation, order, technical or other standard, requirement or procedure
adopted and in effect in the Argentine Republic or its political subdivisions.
LICENSES: All concessions, licenses, permits, operating authorizations and other
agreements and approvals from Governmental Authorities, providers of programming
or other entities and all material rights-of-way, satellite, microwave or other
transmission agreements, pole or underground construction or usage agreements
and all other agreements necessary to construct, own and operate a System in a
specified geographical area in compliance with applicable Laws.
LIEN: Any security agreement, financing statement (whether filed or not),
conditional sale or other title retention agreement, any lease, consignment or
bailment given for security purposes, any lien, charge, limitation, restrictive
agreement, mortgage, pledge, option, encumbrance, adverse interest, constructive
trust or other trust, claim, legal custody, exception to or defect in title or
other ownership interest (including, without limitation, reservations, rights of
entry, possibilities of reverter, encroachments, easements, rights of way,
restrictive covenants, leases and Licenses) of any kind.
MATERIAL ADVERSE EFFECT: Material Adverse Effect means any event, change,
occurrence or condition, singly or together with any other event, change,
occurrence or condition that would have a material adverse effect on the
condition, financial or otherwise, of a Person.
OPERATING COMPANIES: TV Cable S.A., Cable Total S.A., Cable DU-KE S.A.,
Multivision S.A, and Cerri Video Cable, S.A.
OPTIONS: All options to acquire equity interests of entities in the multichannel
subscription television business now held by Sellers or their Affiliates or
acquired by any of them on or prior to the Closing Date.
PERSON: Any natural person, sociedad anonima, sociedad de responsabilidad
limitada, corporation, general or limited partnership, joint venture, trust,
association, entities of any kind (with or without legal existence) or
Governmental Authority or other persons.
PURCHASE PRICE: The Purchase Price will equal the following:
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(a) The aggregate amount for all of the Companies (calculated without
duplication) of the following amount for each Company:
(i)(A) the total number of Subscribers of such Company at the Closing
Date multiplied by US$1,500, (B) less the Closing Liabilities of such
Company, (c) plus the Closing Current Assets of such Company;
(ii) multiplied by the total percentage ownership of such Company
being transferred pursuant to this Agreement (which percentage, in the case
of Cable Total S.A., shall be deemed to be 100% notwithstanding that 20% of
the shares of Cable Total are owned by others subject to a put/call);
(b) less US$4,850,118;
(c) plus the total purchase price (including reasonable, properly
documented out-of-pocket closing costs) paid by any of the Companies or Sellers
in connection with the exercise of Options prior to closing with the approval of
Buyer (which approval will not be unreasonably withheld for Options that expire
before the Closing).
For example, suppose Company A is a seller and owns 80% of the shares of Company
B and Company B owns 90% of Company C. Company B has no Subscribers, US$25 of
Closing Liabilities and US$5 of Closing Current Assets. Company C has 10
Subscribers, US$100 of Closing Liabilities and US$20 of Closing Current Assets.
In this case, clause (a) of the definition of Purchase Price would be applied as
follows:
-- The amount for Company C would be (10 x US$1,500) minus US$100 plus
US$20, all multiplied by 72%, for a total of US$10,742.40.
-- The amount for Company B would be ($20) multiplied by 80% or ($16).
-- The total amount for these two companies under clause (a) would be
US$10,726.40.
REAL PROPERTY: For any Person, all realty, towers, fixtures and other interests
in real property, buildings, improvements and construction-in-progress owned,
leased, occupied, used or held for use by such Person.
REQUIRED CONSENTS: As defined in Section 3.2.2 hereof.
RESTRICTION: With respect to any stock, any voting or other trust or agreement,
option, warrant, escrow, proxy, buy-sell or other share transfer agreement,
power of attorney or other Contract, arrangement or understanding, Judgment or
Law that (i) grants to any person the right to purchase or otherwise acquire, or
obligates any person to sell or otherwise dispose of, or otherwise results or
may result (with or without the passage of time, the payment of money or the
occurrence of any other event) in any Person acquiring any such stock, any
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interest in or proceeds or distributions of any such stock, (ii) restricts or
may restrict the transfer of or the exercise of any voting rights or the
enjoyment of any other benefits arising by reason of ownership of any such
stock, proceeds or distributions, or (iii) creates or may create a lien or a
purported lien affecting such stock, proceeds or distributions.
RIGHTS: Collectively, (A) the right to any dividend of any of the Companies, in
cash or in kind, declared but not distributed as of the Closing Date, (B) all
the rights arising from revocable or irrevocable capital contributions made by
Sellers to the Companies prior to the Closing Date that have not been
capitalized (or the capitalization of which has not yet been effected), (C) all
credits that the Sellers may have against the capital of the Companies as of the
Closing Date, (D) all rights to subscribe to the Companies' capital increases as
of the Closing Date, and (E) any other rights to be paid in as of the Closing
Date.
SELLERS' REPRESENTATIVE: UIH Latin America, Inc., a Colorado corporation, or
such other Person as the Sellers may designate in writing in the future. The
Sellers grant the Sellers' Representative sufficient power to interpret and/or
modify this Agreement and to sign any agreement related to the same.
SHARES: The shares of the Holding Companies' capital stock, and the shares of
any Operating Company's capital stock held directly by any Seller, set forth on
Schedule I to be purchased by the Buyer from the Sellers pursuant to this
Agreement, which will constitute all of the outstanding capital stock and voting
power of each such Holding Company or Operating Company, as applicable, owned by
the Sellers. The transfer of the Shares implies the transfer of all of the
Rights.
SUBSCRIBER: Any person that, at the relevant date for the calculation of the
number of Subscribers, is connected to the services furnished by the Company,
and with respect to whom condition (i) below and one of conditions (ii) and
(iii) below is met.
(i) the services furnished by the Company to that person have been
invoiced on a monthly basis at a time consistent with the system's past
practices;
(ii) if services had been furnished for a period for which more than
two invoices have been issued, no debt in respect of a monthly invoice,
other than the three monthly invoices due prior to such date is outstanding
(including debt outstanding under a refinancing plan) or have been released
or otherwise discharged without payment since August 1, 1997, PROVIDED,
HOWEVER, that a person owing any such invoice under a refinancing plan of
which at least THREE installments have been paid at that date and who is
not in arrears with respect to any installment thereof will be considered a
Subscriber; and
(iii) if services had been furnished for a period shorter than the
period contemplated in (ii) above, that person has paid either (a) a
connection charge not lower than 50% of the system's regular monthly charge
or (b) a monthly invoice in advance.
If a person has been connected to the services under a temporary sale
promotion, that person shall be counted as a fraction of subscriber in the same
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proportion as the monthly charge paid by that person bears to the then regular
monthly charge. For the purposes hereof "temporary sale promotion" shall mean,
with respect to any system, any temporary discount, rebate or other reduction in
the system's monthly charge for the purpose of gaining new subscribers for the
system, and "regular monthly charge" shall mean, with respect to any system, the
monthly charge invoiced to the persons connected to that system under no such
promotion or other preference, as shown in the relevant management reports. For
systems that normally offer a discount for invoices paid within a specified
time, the discounted amount shall be deemed to be the regular monthly charge.
If a person connected to the services enjoys a preference charge, that
person shall be counted as a fraction of subscriber in the same proportion as
the monthly charge paid by that person bears to the then regular monthly charge.
For the purposes hereof "preference charge" shall mean, with respect to any
system owned by the Company, any charge lower than the regular monthly charge
(as defined above) provided for by the Company under any program other than a
temporary sale promotion.
If a person connected to the services pays more than the regular monthly
service charge, then that person shall be counted as more than one subscriber in
a manner comparable to that used above for persons who pay less than the regular
monthly charge.
SYSTEM: A complete multi-channel subscription television reception and
distribution system consisting of one or more head-ends, trunk cable, subscriber
drops and associated electronic equipment that is or is capable of being
operated as an independent system without interconnections to other systems.
TAX: Any tax or payment of any kind required pursuant to any Law, to be paid to
any Governmental Authority.
TITLE DOCUMENTS: Any deed, grant of easement, certificate of title or other
document which confirms or vests title or ownership of any property or any
interest in Assets in any Person.
US$: United States Dollars.
ARTICLE 2
PURCHASE OF STOCK
2.1 PURPOSE OF AGREEMENT.
(a) The Sellers agree to sell, assign and transfer to Buyer and Buyer
agrees to purchase, pursuant to the terms and conditions of this Agreement, the
Shares.
(b) This Agreement includes the transfer to Buyer of all of the Rights
and Options arising on or before the Closing Date. Sellers also agree to
transfer directly (or through transfer of a parent company) (i) all Options they
hold at the Closing that can be so transferred without the consent of the
optionor, and to use reasonable efforts to obtain required consents and transfer
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directly (or through transfer of a parent company) all other Options held at the
Closing and (ii) all rights to receive funds from or enforce the provisions of
any escrow existing pursuant to any of the Applicable Purchase Agreements or
related documents. If an Option is held by a Seller and is not transferable,
such Seller will, at the written request of Buyer and upon payment by Buyer to
Seller of the exercise price of such Option, use reasonable efforts to exercise
such Option and promptly transfer the place as agreed in writing by Buyer and
Sellers' Representative.
(c) This Agreement includes the assignment by Sellers to Buyer of all
of Sellers' rights and obligations under the Applicable Purchase Agreements, to
the extent such rights and obligations are assignable under the respective terms
of such Applicable Purchase Agreements.
2.2 CLOSING.
(a) The Closing of the purchase and sale of the Shares (the "Closing")
will occur on October 17, 1997. The Closing shall take place at the offices of
Estudio Beccar Varela, Buenos Aires, Argentina, or any other place as agreed in
writing by Buyer and Sellers' Representative.
(b) At the Closing the Sellers will deliver to the Buyer any and all
certificates representing the Shares and will take all necessary acts to perfect
the transfer of the Shares and note in the name of the Buyer and/or the company
that the Buyer will designate the transfer in the Companies' Stock Registry
Books, free of Liens and Restrictions, with the exception of the authorization
provided for in Article 46 clause (f) of the Broadcasting Law, if applicable.(b)
2.3 PAYMENT OF PURCHASE PRICE.
2.3.1 ESCROW DEPOSIT. US$ 4,629,784 of the Purchase Price (the "Escrow
Deposit") will be paid at the Closing by way of a deposit on behalf of the Buyer
in an escrow account (the "Escrow Account") with Colorado National Bank N.A. or
such other escrow agent as the Parties shall agree, with which an agreement will
be signed substantially in the form attached hereto as Exhibit A (the "Escrow
Agreement"). The Escrow Account will be governed by the terms and conditions of
the Escrow Agreement.
2.3.2 CLOSING PAYMENT. The remainder of the Purchase Price, determined
pursuant to Section 2.4(a) (the "Closing Payment"), will be paid to the Sellers
at the Closing.
2.4 DETERMINATION OF PURCHASE PRICE. For purposes of the Closing Payment to
be made pursuant to Section 2.3.2, the Purchase Price will be determined as
follows:
(a) Attached hereto as Exhibit B is a certificate setting forth a good
faith estimate, based on August 31, 1997 numbers, of (A) the total number of
Subscribers to the Companies' Systems as of the Closing Date, (B) the Closing
Liabilities, (C) the Closing Current Assets, and (D) the Purchase Price. The
Closing Payment will be (i) the Purchase Price shown on that certificate (the
"Estimated Purchase Price"), minus (ii) the Escrow Deposit.
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(b) Within thirty days after the Closing Date, the Buyer will deliver
to the Sellers' Representative a statement (the "Purchase Price Statement")
showing (i) the number of Subscribers at the Closing Date, (ii) the Closing
Liabilities, (iii) the Closing Current Assets and (iv) the resulting Purchase
Price, and specifying in reasonable detail how each of those items was
calculated. In order to expedite calculation of the Purchase Price, the Seller
will cooperate with the Buyer prior to the Closing in the Buyer's efforts to
prepare to audit the number of Subscribers at the Closing Date and to determine
the Closing Liabilities and Closing Current Assets. The Buyer will permit the
Sellers' Representative or its designee to participate in the Buyer's audit of
the number of Subscribers at the Closing Date. Schedule 2.4(b) details certain
valuation criteria to be used for auditing or arbitration purposes. If Buyer
does not deliver the Purchase Price Statement within this 30-day period, it will
have no right to assert that the Purchase Price is lower than the Estimated
Purchase Price.
(c) The Purchase Price shown on the Purchase Price Statement will be
deemed to be the final Purchase Price unless, within ten days after it receives
the Purchase Price Statement, the Sellers' Representative delivers to the Buyer
a notice (a "Dispute Notice") stating that the calculation of the Purchase Price
was not correct and specifying in reasonable detail each item on the Purchase
Price Statement that the Sellers' Representative disputes, and the amount in
dispute with regard to each of those items.
(d) If a Dispute Notice is delivered to the Buyer within the ten day
period described in subparagraph (c), the Buyer and the Sellers' Representative
will attempt to reach an agreement within five days after the Dispute Notice is
delivered with regard to each item specified in the Dispute Notice. If the Buyer
and the Sellers' Representative fail to agree within that five day period as to
any items, KPMG Peat Marwick or another firm of accountants agreed upon by the
Buyer and the Sellers' Representative (the "Accountants") will be retained to
resolve the dispute as to those items (with the Buyer and the Sellers each
paying half the cost of the Accountants). The determination of the Accountants
as to each item will be final and binding on the Parties. The final Purchase
Price will reflect all adjustments to the Purchase Price shown on the Purchase
Price Statement that are agreed upon by the Buyer and the Sellers'
Representative or are determined by the Accountants.
(e) Within three days after the Purchase Price Statement is delivered
to the Sellers' Representative, the Buyer will pay the Sellers the amount, if
any, by which the Purchase Price shown on the Purchase Price Statement exceeds
the Estimated Purchase Price.
(f) Within three days after the Dispute Notice is delivered to the
Buyer (or the time to deliver a Dispute Notice expires without a Dispute Notice
being delivered), the Buyer and the Sellers' Representative will instruct the
Escrow Agent (i) to pay the Buyer the amount, if any, by which, if all the
Disputed Items were resolved in favor of Sellers, the Purchase Price would be
less than the Estimated Purchase Price, or (ii) to pay the Sellers the amount,
if any, by which if all the Disputed Items were resolved in favor of the Buyer,
the Purchase Price would be more than the Estimated Purchase Price minus the
amount of the Escrow Deposit. If, even if all the Disputed items were resolved
in favor of the Sellers, the Purchase Price would be less than the Estimated
Purchase Price minus the amount of the Escrow Deposit, at the same time the
instruction is delivered to the Escrow Agent, the Sellers will pay the Buyer the
amount by which the Purchase Price shown on the Purchase Price Statement plus
the total of all the Disputed Items is less than the Estimated Purchase Price
minus the amount of the Escrow Deposit. If, even if all the Disputed Items were
resolved in favor of the Buyer, the Purchase Price would be more than the
Estimated Purchase Price, at the same time the instruction is delivered to the
Escrow Agent, the Buyer will pay the Sellers the amount by which the Purchase
Price shown on the Purchase Price Statement is more than the Estimated Purchase
Price.
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(g) If a Dispute Notice is delivered to the Buyer, within three days
after any disputed item is resolved by agreement of the Buyer and the Sellers'
Representative in a manner that increases the Purchase Price, the Buyer and the
Sellers will instruct the Escrow Agent to pay the Sellers (or, after the entire
Escrow Deposit has been paid to the Sellers, the Buyer will pay the Sellers) the
amount by which the Purchase Price is increased.
(h) Within three days after the final Purchase Price is determined
(whether because the Sellers' Representative did not deliver a Dispute Notice,
because of agreement between the Buyer and the Sellers or because of a
determination of the Accountants), the Buyer and the Sellers' Representative
will instruct the Escrow Agent to pay to the Sellers any amount by which the
final Purchase Price exceeds the payments previously made with regard to the
Purchase Price (including any payment being made under subparagraph (e), (f) or
(g)), and to pay the balance of the Escrow Deposit to the Buyer. If the amount
by which the final Purchase Price is greater than the payments previously made
with regard to the Purchase Price exceeds the balance of the Escrow Deposit
being held by the Escrow Agent, within three days after the final Purchase
Deposit is determined, the Buyer will pay the Sellers an amount equal to the
excess.
(i) When the Purchase Price is finally determined, the income earned on
the Escrow Deposit will be paid to the Sellers and the Buyer in proportion to
the portions of the Escrow Deposit paid to each of them.
(j) If the amount of the Escrow Deposit being held by the Escrow Agent
on December 1, 1997, exceeds US$1,851,914 on December 1, 1997, the Escrow Agent
will pay the excess above US$1,851,914 to the Sellers. If, when the final
Purchase Price is determined, the amount the Sellers have received with regard
to the Purchase Price, including the sum distributed under this subparagraph on
December 1, 1997, exceeds the final Purchase Price, within three days after the
final Purchase Price is determined, the Sellers will pay the Buyer an amount
equal to the excess.
2.5 EFFECTIVENESS OF PAYMENT. Each Seller acknowledges that payment in
accordance with Section 2.6 will constitute payment to such Seller.
2.6 FORM OF PAYMENT. All payments to be made pursuant to this Agreement
shall be made by wire transfer of immediately available funds to Totonto
Dominion Bank, in accordance with the wire transfer instructions set forth in
Schedule 2.6.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Each Seller represents and warrants, except as disclosed on the annexes and
schedules of the Applicable Purchase Agreements, to Buyer the following. With
respect to each Operating Company, the representations and warranties made by
Sellers in or pursuant to this Agreement apply only to events that occurred
after the Sellers acquired at least majority ownership of such Operating Company
("Majority Ownership Date"). Accordingly, no such representation and/or warranty
will be deemed to have been untrue or inaccurate when made with respect to any
Operating Company unless (and then only to the extent that) an event that
occurred after the Majority Ownership Date caused such representation and
warranty to be untrue or inaccurate when made.
3.1(a) THE SELLERS.
3.1(a)(1). Each of the Sellers is a corporation, sociedad anonima or
limited liability company duly organized and validly existing under the Laws of
the jurisdiction of its incorporation or organization.
3.1(a)(2). This Agreement is a valid obligation, binding on each of the
Sellers, and is enforceable against each of them pursuant to the terms and
conditions hereof. Each Additional Agreement to which any Seller is a party
will, at the Closing, have been duly signed and executed by each of the Sellers
and will be a valid obligation, binding on and enforceable against each of them
pursuant to the terms thereof.
3.1(b) THE COMPANIES.
3.1(b)(1). Each of the Holding Companies and Operating Companies is a
corporation ("sociedad anonima") duly incorporated and validly existing and in
good standing under the Laws of the Republic of Argentina.
3.1(b)(2). Except as set forth on Schedule 3.8.3, each of the Holding
Companies and, to the Sellers' knowledge, Operating Companies has all requisite
corporate powers (and, to the Sellers' knowledge, each of the Operating
Companies holds a license) to operate the Systems, as well as to carry out its
activities as it has done until now and to be the owner of and/or to lease
and/or to use and/or to manage its property in the way it uses and manages same
at present and according to the annexes and schedules of the Applicable Purchase
Agreements. Each of the Holding Companies and, to the Sellers' knowledge,
Operating Companies is duly qualified to engage in and transact business and is
in good standing in each jurisdiction in which the character of the properties
owned, leased, used or managed by it or the nature of the business conducted by
it require it to be so qualified. The representations in this Section 3.1(b)(2)
do not include approval by COMFER of the Sellers' indirect acquisition of shares
of the Operating Companies, which approval has not yet been obtained.
3.1(b)(3). The Sellers have previously delivered or made available in
Argentina to Buyer complete and accurate copies of each of the Companies' (a)
Corporate Bylaws as amended from time to time, (b) all the minutes of its board
meetings or shareholders' meetings furnished to the Sellers in conjunction with
the Applicable Purchase Agreements and since the ownership of the Shares by the
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Sellers, and (c) its stock registers, validly reflecting any and all issuances,
reissuances, cancellations and transfers of each of the Companies' capital
stock.
3.1(b)(4). None of the Companies owns any equity interest or any other
obligation or equity security of any other Person.
3.2 NO VIOLATION; CONSENTS:
3.2.1 The execution and delivery of this Agreement by each of the
Sellers and of any Additional Agreement to be executed and delivered by any of
them, as well as the performance of their respective obligations hereunder and
thereunder and the consummation of the transactions contemplated herein and
therein will not violate any provision of Law and, with or without the giving of
notice or the passage of time, will not conflict with or result in any breach of
any of the terms and conditions of, nor will constitute a default pursuant to,
the Companies' Governing Documents or of any Contract of any of the Holding
Companies or, to the Sellers' knowledge, any of the Operating Companies.
3.2.2 Schedule 3.2 lists all Persons (including, without limitation,
Governmental Authorities, shareholders and creditors, parties to any necessary
License and parties to any other Contract) whose approval or consent, or with
whom the filing of any certificate, notice, application, report or other
document is legally or contractually required or necessary in connection with
the execution, delivery or performance of this Agreement or any of the
Additional Agreements, by Sellers (the "Required Consents").
3.3 CAPITAL STOCK.
3.3.1 The authorized capital stock and the capital stock that is issued
and outstanding of each of the Companies is set forth on Schedule 3.3.1. Except
as set forth on Schedule 3.3.1, all of such outstanding shares are duly
authorized, validly issued, fully paid-in and are subject to no Lien. With
respect to such shares, there are no obligations to make further contributions.
Each Company's outstanding capital stock is owned as indicated in Schedule I,
which sets forth the name of each beneficial owner of such stock and the number
of shares owned by each of them. Except as set forth on Schedule 3.3.1, none of
the Sellers has created or is contractually bound to create any Lien or
Restriction on the capital stock or any other securities of the Companies.
3.3.2 Except for the right of first refusal and related rights in the
put/call relating to 20% of the shares of Cable Total, there are no outstanding
options, warrants, calls or other securities or rights of any kind to acquire,
currently or upon the passage of time or the payment of money or the occurrence
of any other event, stock or other securities of any of the Holding Companies
and, to the Sellers' knowledge, the Operating Companies, nor any contingent or
other kind of commitment to issue any of the foregoing.
3.4 BROKERS, AGENTS, FINDERS, ETC. Neither the Sellers nor their they
agreed to pay any fee, commission or similar payment to any person under this
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Agreement or under any Additional Agreement or in respect of the transactions
contemplated herein or therein.
3.5 FINANCIAL STATEMENTS.
3.5.1 The Sellers have delivered to the Buyer the following financial
statements (the "Financial Statements"):
(i) The financial statements delivered to the Sellers in
conjunction with their acquisition of the Companies;
(ii) a balance sheet of the Companies at May 31, 1997, and a
statement of operations of such companies for the five months then
ended;
(iii) monthly operating results for April and May, 1997, for each
of the Operating Companies, setting forth month-end subscribers and
revenue, expense and EBITDA for such Companies for such months; and
(iv) closing certificates furnished to Sellers setting forth
certain estimated information regarding numbers of subscribers,
liabilities and working capital of each of the Companies received by
the Sellers in connection with Sellers' acquisitions of the Companies
pursuant to the Applicable Purchase Agreements.
3.5.2 The financial statements referred to in Clauses (ii) and (iii) of
Section 3.5.1 are accurate in all material respects, subject to normal year-end
adjustments and subject also to debt of such Companies to the Persons who sold
such Companies to the Sellers incurred under the Applicable Purchase Agreements.
The documents referred to in Clauses (i) and (iv) of Section 3.5.1 are complete
and accurate copies of the documents furnished to Sellers. Since May 31, 1997
there has been no material adverse change in the financial condition or results
of operations of the Operating Companies taken as a whole. Since September 9,
1997 (i) the Companies have conducted their respective businesses diligently, in
good faith and in the ordinary course, consistent with past practices and in
compliance with all applicable Laws, and have not engaged in any transaction,
including, without limitation, entering into or amending any Contract, incurring
any liability or obligation (absolute or contingent), or making any advance or
expenditure, other than in the ordinary course of business, nor have they
changed their business policies or practices in any material respect. The
Companies have not acquired any customers of a System by promotional incentives
or discounts exceeding those customarily given in the cable industry in
Argentina; and (ii) the Companies have not paid any dividends, nor retired any
amounts on account of future dividends, redeemd or repurchased any shares of
their stock, or reduced their capital, except as permitted under Section 5.7 of
the Existing Stock Purchase Agreement.
3.5.3 The books and records of each of the Holding Companies and, to
the Sellers' knowledge, Operating Companies are reasonably complete and reflect
the transactions and dispositions of the Assets of each of them adequately.
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3.6 TAXES. Each of the Holding Companies has duly and timely filed in
proper, legal and accurate form, all reports and tax returns and has paid all
taxes in accordance with applicable Law. Each Operating Company, since its
Majority Ownership Date, has duly and timely filed in proper, legal and accurate
form all reports and tax returns and has paid all taxes in accordance with
applicable Law that first became due during such period.
3.7 LAWSUITS. Except as set forth in the annexes and schedules to the
Applicable Purchase Agreements, there are no actions, proceedings, claims or
investigations pending or threatened by or before any Governmental Authority to
which a Holding Company or, to the Sellers' knowledge, an Operating Company is a
party in which an adverse determination could reasonably be expected to have a
Material Adverse Effect on the Companies taken as a whole or the material
Licenses, Contracts, Assets or rights of the Companies taken as a whole, or
which might question the validity of this Agreement or of any other Additional
Agreement, or which seeks to restrain or enjoin the consummation of transactions
contemplated herein or therein.
3.8 LICENSES.
3.8.1 To the Sellers' knowledge, each of the Operating Companies has
all material Licenses necessary to construct, own and operate commercially the
Systems of the Companies in the geographical areas in which it currently
conducts business, in each case in full compliance with all applicable Laws
except where such noncompliance would not have a Material Adverse Effect on such
Operating Company. To the Sellers' knowledge, each of the Operating Companies'
Licenses is a valid and subsisting instrument under applicable Laws and is in
full force and effect. To the Sellers' knowledge, each License used, held for
use in or necessary for the operation of the Systems of the Operating Companies
is held by and in the name of each such company. To the Sellers' knowledge,
there is no pending application before any Governmental Authority which involves
an Operating Company License. To the Sellers' knowledge, none of the Operating
Companies' Licenses may be revoked during the period of issue unless the
applicable Operating Company breaches the terms or conditions of such license.
3.8.2 To the Sellers' knowledge (i) no Operating Company has materially
breached or is in default under any of the Operating Companies' Licenses except
where such breach or default would not have a Material Adverse Effect on such
company, (ii) the Systems of the Companies, to the extent that same are
constructed, have been constructed in compliance with all applicable Licenses
and Laws and (iii) no Operating Company has received any notice of breach or
default under any of its Licenses from any Governmental Authority.
3.8.3 To the Sellers' knowledge, Schedule 3.8.3 sets forth a list of
all pending COMFER authorizations and claims.
3.9 ASSETS.
3.9.1 TITLE; LIENS. To the Sellers' knowledge, each of the Operating
Companies has good and marketable title or valid rights to all of its Assets,
free and clear of any Lien, except (i) Liens for property taxes not delinquent,
(ii) Liens that do not materially detract from the value of the Assets or
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materially interfere with the present use of the Assets, (iii) the Liens listed
in the schedules and annexes to the Applicable Purchase Agreements and (iv)
Liens referred to in Section 6.1(h).
3.9.2 REAL PROPERTY. Other than as reflected in the annexes and
schedules to the Applicable Purchase Agreements, neither the Holding Companies
nor, to the Sellers' knowledge, the Operating Companies own any Real Property.
3.9.3 INTELLECTUAL PROPERTY, COPYRIGHTS, PATENTS AND TRADEMARKS.
Neither the Holding Companies nor, to the Sellers' knowledge, the Operating
Companies are in violation of any intellectual property right, copyright, patent
or trademark of any Person.
3.9.4 OPTIONS. Schedule 3.9.4 sets forth a list of all Options held by
Sellers as of the date hereof and the exercise price per subscriber of each
Option. Buyer acknowledges that exercise of the Options is, by the terms of the
Options, subject to negotiation and completion of definitive documents and may
be subject to negotiation of other terms and other customary conditions, and
some of the Options may expire before Closing.
3.10 THE SYSTEMS.
3.10.1 To the Sellers' knowledge, all of the Equipment is in good
working order and repair, complies in all material respects with all applicable
Licenses and Laws and with all rules, regulations and standards of all
Governmental Authorities regarding its intended use. None of the Holding
Companies directly owns any material cable television Equipment.
3.10.2 To the Sellers' knowledge, each of the Operating Companies is
duly authorized under applicable Laws to distribute to Subscribers all the
signals carried or proposed to be carried and has all Licenses required to
operate all earth stations and microwave and other transmission facilities used
or proposed to be used in the Systems of the Companies in compliance with
applicable Laws.
3.11 EMPLOYMENT MATTERS. Each of the Holding Companies and, to the
Seller's knowledge, the Operating Companies (except as covered by Section
9.2(a)(iii)) has fully complied with all applicable labor and social security
Laws.
3.12 INSURANCE. To the Sellers' knowledge, all of the insurance
policies of the Operating Companies are outstanding, valid and enforceable in
accordance with their respective terms, having been hired with financially sound
and reputable insurance companies.
3.13 CONTRACTS AND COMMITMENTS.
3.13.1 All of the Contracts/Commitments of the Holding Companies and,
to the Sellers' knowledge, the Operating Companies (collectively the "Company
Contracts") are in good standing, valid and effective, with no material breach,
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violation, default, notice or claim of breach by any party thereto except where
such breach, violation or default would not have a Material Adverse Effect.
3.13.2 Sellers have made available to Buyer in Argentina complete and
accurate copies of all of the Company Contracts, and any and all amendments or
modifications thereto.
3.14 COMPLIANCE. Each of the Holding Companies and, to the Sellers'
knowledge, the Operating Companies has complied in all material respects with
all Licenses, Contracts, and Laws applicable to the conduct of its business and
ownership, possession, maintenance and operation of its properties and Assets
except where such noncompliance would not cause a Material Adverse Effect on the
Companies taken as a whole.
3.15 NO MISSTATEMENTS OR OMISSIONS. No representation or warranty in this
Article Three contains any untrue statement of a material fact or omits to state
a material fact necessary to make the statements contained therein not
misleading.
3.16 ENVIRONMENTAL MATTERS. To the Sellers' knowledge, none of the
Operating Companies has received a notice from any Governmental Authority that
it, or any property it owns or uses, is in violation of any Law or regulation
relating to protecting the environment.
3.17 LABOR MATTERS. Except as set forth on Schedule 3.17, no employee of
any of the Companies is represented by any labor union, and no union is
attempting to organize or otherwise become the bargaining representative for any
employees of any of the Companies.
3.18 VENDOR DEBT. Schedule 3.18 shows (a) the amounts as of the date hereof
of all outstanding debt incurred as deferred payment of the purchase price paid
by Sellers for the Companies and (b) the amount as of the date hereof of all
funds held in escrow pursuant to the Applicable Purchase Agreements.
3.19 ASSETS AND CONTROLLED AFFILIATES IN THE UNITED STATES. None of the
Companies is incorporated in the United States, or organized under the laws of
the United States, or has its principal offices within the United States. None
of the Companies, nor any entity that they control, nor all such controlled
entities in the aggregate, hold assets located in the United States having an
aggregate book value of $15,000,000 or more, and none of the Companies directly
or indirectly controls any corporation that is incorporated in the United
States, is organized under the laws of he United States, or has its principal
offices within the United States. As used in this Section 3.19, the term
"control" means (a) holding 50% or more of the outstanding voting securities of
an issuer; (b) in the case of an entity that has no outstanding voting
securities, having the right to 50% or more of the entity's profits, or having
the right in the event of dissolution to 50% or more of the entity's assets; or
(c) having the contractual power presently to designate 50% or more of the
directors of a corporation, or in the case of unincorporated entities, of
individuals exercising similar functions.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
4.1 BUYER. Buyer is a corporation duly organized, validly existing and in
good standing under the Laws of the Republic of Argentina, with all requisite
corporate power and authority to conduct its business and operations as
presently conducted and to execute, deliver and perform this Agreement and the
other instruments and documents required hereby to be executed and delivered by
Buyer, and has, or as of the Closing Date will have, taken all action required
to duly authorize such execution, delivery and performance. This Agreement is,
and the other instruments and documents to be executed and delivered by Buyer
hereunder or prior to the Closing will be, legal, valid and binding obligations
of Buyer, enforceable in accordance with their respective terms. Buyer
represents that it is familiar with any and all applicable broadcasting Laws, in
particular with the provisions of Law 22,285, as amended, and with any and all
obligations to be undertaken by it under same, and especially that this
Agreement must be submitted to the approval specified in Article 46 clause (f)
of the Broadcasting Law.
4.2 NO VIOLATION; BUYER'S CONSENTS.
4.2.1 The execution and delivery of this Agreement by Buyer and of any
Additional Agreement to be executed and delivered by it, as well as the
performance of its obligations hereunder and thereunder and the consummation of
the transactions contemplated herein and therein will not violate any provision
of Law and, with or without the giving of notice or the passage of time, will
not conflict with or result in any breach of any of the terms and conditions of,
nor will constitute default pursuant to, Buyer's Governing Documents or of any
Contract of Buyer.
4.2.2 Except for COMFER if applicable, there are no Persons (including,
without limitation, Governmental Authorities, shareholders and creditors,
parties to any necessary License and parties to any other Contract) whose
approval or consent, or with whom the filing of any certificate, notice,
application, report or other document is legally or contractually required or
necessary in connection with the execution, delivery or performance of this
Agreement or any of the Additional Agreements by Buyer.
4.3 BROKERS, AGENTS, FINDERS, ETC. Neither the Buyer nor its agents have
retained or hired any broker, agent or finder, nor have they agreed to pay any
fee, commission or similar payment to any person under this Agreement or under
any Additional Agreement or in respect of the transactions contemplated herein
or therein.
ARTICLE 5
POST-CLOSING COVENANTS
Except as otherwise approved by the other Party in writing, the Parties
agree as follows:
5.1 UFC AFFILIATION AGREEMENT. Buyer shall use its best efforts to enter
into, within six months after the date hereof, an affiliation agreement with
respect to the carriage of Casa Club and The Family Channel through the
Companies' Systems, on such terms and conditions as are customary for agreements
with respect to such matters.
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ARTICLE 6
CONDITIONS OF BUYER'S OBLIGATIONS
6.1 CLOSING. Buyer's obligation to pay the Purchase Price is subject to the
satisfaction or written waiver of the following conditions:
(a) STOCK TRANSFER. That the Sellers deliver to Buyer all of the
certificates representing the Shares and do all acts necessary to perfect the
transfer of the Shares in the name of Buyer and/or any company that Buyer
indicates in the Stock Registry book of the Companies, free of Liens or
undisclosed Restrictions, subject to the approval of the authorization provided
for in Art. 46(f) of the Broadcasting Law, if applicable.
(b) RECEIPT OF CONSENTS. All of the Required Consents will have been
obtained or given, with the exception of such Consent required under art. 46,
part (f) of Law 22.285, if applicable, and except where the failure to obtain
(or, in the case of filings, make) such Required Consents would not have a
Material Adverse Effect on the Companies taken as a whole.
(c) CORPORATE ACTIONS. All corporate or other actions necessary for (i)
the execution, delivery and performance of this Agreement and of the Additional
Agreements by the Sellers, (ii) the completion of the transactions contemplated
herein and therein, and (iii) implementing the annotations that are required in
the corporate record books in order to effectuate the transfer of the Shares to
the Buyer, free of all Liens and undisclosed Restrictions, will have been duly
and validly taken and will be in full force and effect.
(d) PERFORMANCE. The Sellers will have performed in all material
respects all obligations under this Agreement and the Additional Agreements to
be performed by them at or prior to the Closing.
(e) TRUE AND COMPLETE REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties made to Buyer in or pursuant to this Agreement or
any Additional Agreement will be true and complete in all material respects,
both when made and as of Closing, with the same effect as if made at and as of
the time of Closing.
(f) NO GOVERNMENTAL PROCEEDINGS. No provision of any applicable Laws
will apply, with the exception of those stemming from the Law 22,285 on
Broadcasting, and no Judgment will exist so as to prevent completion of the
transactions contemplated in this Agreement or in any Additional Agreement,
questioning the legality or validity of such transactions or otherwise alleging
damage as the result of such transactions, or where damages resulting from such
transactions might be claimed, nor any pending or threatened proceeding in which
any Person seeks or may take any such action. None of the Parties to this
Agreement will have been notified of the present intention of any Government
Authority or of the legal representative thereof to bring an action or
proceeding challenging or enjoining completion of any other transactions
contemplated herein or in any Additional Agreement.
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(g) DOCUMENTS. The Sellers will have signed and delivered, or caused to
be delivered, the following duly and fully executed instruments, certificates,
opinions and other documents in form and substance satisfactory, in each
instance, to Buyer:
(1) The certificate contemplated by Section 2.4(a).
(2) Assignments with respect to any Options that are being
directly transferred.
(h) RELEASE OF LIENS. Buyer shall have received written notification
from Toronto Dominion (Texas), Inc., in form and substance reasonably
satisfactory to Buyer, that upon receipt of such amount as is specified in such
notification, Toronto Dominion (Texas), Inc. will promptly release all Liens it
holds on any of the shares or Assets of any of the Companies.
ARTICLE 7
CONDITIONS OF SELLERS' OBLIGATIONS
The obligation of the Sellers to complete Closing is subject to the
satisfaction or written waiver by the Sellers' Representative of each of the
following conditions:
7.1 PERFORMANCE BY BUYER. Buyer will have performed in all material
respects all of its obligations hereunder and under each of the Additional
Agreements.
7.2 TRUTH OF REPRESENTATIONS AND WARRANTIES. Each of Buyer's
representations and warranties made pursuant to this Agreement or to any
Additional Agreement will be true and complete in all material respects and will
have the same effects whether made at or prior to the date of transfer of the
Shares.
7.3 NO GOVERNMENTAL PROCEEDINGS. As regards Buyer, there will not exist any
provision of applicable Laws nor any Judgment preventing completion of the
transactions contemplated herein or in any Additional Agreement, questioning the
legality or validity of such transactions or claiming damages resulting from
such transactions, nor any pending or threatened proceeding in which any Person
seeks or may take any such action. None of the Parties to this Agreement will
have been notified of the firm and nonappealable intention of the applicable
authority by which the consummation of this Agreement is prohibited.
ARTICLE 8
CONFIDENTIALITY
8.1 GENERAL. Any information or document that any Party hereto provides to
the other Party or that a Party develops in the course of completing the
transactions contemplated herein, with the exception of information or documents
that are publicly available other than through a breach by the disclosing Party
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of any agreement with the Seller or Buyer, will be treated as confidential and
proprietary and will not be disclosed to any third party, with the exception of
investment banks and other consultants who agree in writing to comply with this
Section 8.1 or as otherwise consented to in writing by the Seller or Buyer, as
applicable. The Parties will attempt to identify any and all confidential
information specifically as such. The Party infringing confidentiality as agreed
herein will indemnify the other Party to the extent of the damages which were
caused.
8.2 PUBLIC ANNOUNCEMENTS. Neither Seller nor Buyer will issue any press
release or make any other public disclosure relating to the transactions
contemplated herein without the prior written consent in each instance of the
other. Section 8.1 and this Section 8.2, however, will not apply to or limit any
Party's ability to make such public announcements or disclosures as it may
consider necessary or appropriate pursuant to the reporting requirements under
U.S.A. securities Laws or other applicable Law. Also excepted from Section 8.1
and this Section 8.2 are the annual and other periodic reports and financial
statements legally prepared and released in the ordinary course of business by
the Parties hereto.
ARTICLE 9
SURVIVAL; INDEMNIFICATION
9.1 SURVIVAL. Sections 2.1, 2.2, 2.3, 2.4, 2.5, 2.6, and Articles 8, 9, and
11 hereof will survive Closing and will not cease except when expressly provided
therein. The provisions of this Agreement, including all representations and
warranties of the Parties hereto and any certificate delivered pursuant to this
Agreement, will survive Closing and will terminate on the earlier of 30 days
after completion of the audit of Buyer's financial statements for the year ended
December 31, 1998 or June 30, 1999. The obligation to indemnify will apply to
any of the foregoing matters for any claim made prior to the expiration of the
limitation period that was not resolved within said period of time.
Notwithstanding the foregoing, the provisions under Section 9.3 shall survive
the Closing and will remain in full force and effect for a period of five years
thereafter.
9.2 INDEMNIFICATION.
(a) Each of the Sellers agrees to indemnify Buyer with respect to any
loss, claim, damage, liability (or actions or procedures in relation to these)
and expenses that Buyer, the entities controlling, controlled by or under common
control with it, officers, employees, shareholders and advisors (henceforward
the "Indemnified Persons") may have suffered in relation to or arising out of:
(i) the inaccuracy when made of any representation and warranty
made by Sellers in or pursuant to this Agreement, but only to the
extent that the event or circumstance that caused such representation
and warranty to be inaccurate first occurred or existed after Seller's
acquisition of the Company with respect to which such representation
and warranty was inaccurate;
(ii) non-performance on the part of any of the Sellers of any
obligation made in this Agreement or the Additional Agreements; or
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(iii) any failure by an Operating Company to comply with labor
and social security Laws after the Majority Ownership Date of such
Operating Company and before the Closing.
(b) Immediately after receipt by an Indemnified Person of notice of any
action, proceeding, claim, or potential claim (an "Asserted Claim") that could
give rise to a right to indemnification under this Agreement, the Buyer will
give the Sellers' Representative written notice of the Asserted Claim. Delay in
giving this notice will not affect the Indemnified Party's right to
indemnification to the extent it is demonstrated that the interests of the
Sellers have not been prejudiced due to such delay.
(c) The Sellers' Representative may assume and control the defense of
such Asserted Claim (with counsel reasonably acceptable to the Indemnified
Person) if it affirms the obligation of the Sellers to indemnify the Indemnified
Person with respect to such Asserted Claim. Notwithstanding the foregoing, the
Indemnified Person will have the right to hire its own counsel and to control
the defense or settlement in any such action, at the expense of the Sellers if
(i) the action involves a conflict of interest between the Indemnified Person
and the Sellers, (ii) the Sellers' Representative has not assumed such defense
to the reasonable satisfaction of Buyer within a reasonable time after receiving
notice of the Asserted Claim from Buyer or (iii) the Asserted Claim could have a
Material Adverse Effect on the business of Buyer. The Sellers' Representative
agrees to cooperate with the Indemnified Persons in order to enable their
counsel to participate in the defense and to deliver to the Indemnified Persons
copies of all pleadings and other information within the Sellers'
Representative's knowledge or possession reasonably requested by the Indemnified
Persons that is relevant to the defense of any such claim or demand. The
Sellers' Representative will maintain confidentiality with respect to all such
information consistent with the conduct of a defense hereunder.
(d) Neither the Indemnified Person nor the Sellers' Representative may
consent to the rendering of a judgment with respect to the Asserted Claim or
enter into a settlement with respect to the Asserted Claim if such judgment or
settlement does not unconditionally release the Sellers or the Indemnified
Person, as the case may be, from all liability with respect thereto without the
consent of such Party. Such consent cannot be unreasonably withheld.
(e) Notwithstanding any other provision of this Agreement, (i) Sellers'
indemnification obligations will not apply until the cumulative amount of
Buyer's indemnifiable claims exceed US$200,000 (ii) in no event will Sellers'
indemnification obligation under this Agreement exceed US$9,259,568 except for a
breach arising from Sellers' inability to transfer the Shares, and (iii) Buyer's
sole remedy for any breach of this Agreement or inaccuracy of any representation
or warranty made in or pursuant to this Agreement shall be indemnification
pursuant to this Article Nine.
(f) The provisions of paragraphs (a) through (e) of this Section 9.2
also shall apply to the Buyer as an indemnifying party and the Sellers, their
Affiliates, and their respective officers, employees, shareholders and advisers
as Indemnified Persons, with references therein to Buyer being read as
references to the Sellers and all references to the Sellers or the Sellers'
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Representative being read as references to the Buyer. Such indemnification
obligations of the Buyer also shall apply to any loss, claim, damage, liability
and expenses suffered by any of the Sellers with respect to Sellers' guarantees
of indebtedness incurred in connection with the Sellers' acquisition of the
Companies, and the limitation on damages set forth in clause (ii) of Section 9.2
(e) shall not apply to such indemnification obligation or to any failure by
Buyer to pay the Purchase Price on thte date hereof as required hereunder.
9.3 INDEMNIFICATION AGAINST CLOSING DATE LIABILITIES.
(a) The Sellers jointly and severally agree to indemnify the Buyer
against, and reimburse the Buyer for, any amount by which the total payments by
the Companies after the Closing Date of obligations which existed at the Closing
Date or relate to periods prior to the Closing Date (net of any amounts
collected out of escrow accounts referred to in the definition of Closing
Liabilities), whether or not the payments are of liabilities known to the
Sellers or the Companies on the Closing Date, exceed the Closing Liabilities
included in the calculation of the Purchase Price made as provided in Section
2.4. The amount of indemnification will be adjusted to reflect the extent to
which the Buyer acquires less than 100% of the shares of an entity that makes
payments for which the Buyer is entitled to indemnification or reimbursement
under this Section 9.3(a). Any payments to the Buyer under this Section will (i)
be made promptly after demand by the Buyer accompanied by documentation of the
amounts paid by the Companies which shows the payment to be due and (ii) be
treated as adjustments of the Purchase Price.
(b) If any of the Companies receives a claim with regard to a
liability, or claimed liability, which existed at the Closing Date or relates to
a period prior to the Closing Date and was not included (or exceeds the amount
which was included) in the Closing Liabilities included in the calculation of
the Purchase Price, the Buyer will promptly notify the Sellers' Representative
of the claim and the fact that the Buyer intends to treat any amount paid with
regard to the claim as a payment to which Section 9.3(a) applies. If the
Sellers' Representative informs the Buyer that the Sellers acknowledge that any
payment with regard to the claim will be a payment to which Section 9.3(a)
applies and that the Sellers either (i) wish to contest the claim, (ii) want to
seek reimbursement out of an escrow account referred to in the definition of
Closing Liabilities with regard to any amount due as a result of the claim or
(iii) want to seek indemnification or other recovery related to such claim under
an Applicable Purchase Agreement or related agreement, the Sellers may, at their
expense, contest the claim or seek reimbursement out of the escrow account or
other recovery. The Buyer will cooperate, and will cause the Companies to
cooperate, in all reasonable respects in the Sellers' efforts to do that, and
the Sellers will reimburse the Buyer for all out-of-pocket costs it or any of
the Companies incurs in doing so. To the extent the Sellers recover
reimbursement out of an escrow account for a sum due as a result of a claim, the
Sellers will pay the amount of the reimbursement to the Buyer or the applicable
Company, and the amount paid to the Buyer or a Company will be included in the
calculation of any amount due under Section 9.3(a). Sellers will be subrogated
to all rights of any Company to the extent that Sellers pay any amount under
this Section 9.3.
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ARTICLE 10
[INTENTIONALLY OMITTED]
ARTICLE 11
GENERAL PROVISIONS
11.1 NOTICES. All notices hereunder shall be made (i) by delivery of same
in person to the intended addressee, (ii) by sending such notice by Federal
Express or another reputable private international courier service (a "Qualified
Courier") for overnight (or its nearest equivalent) delivery to the intended
addressee or (iii) by facsimile transmission to such Party at the facsimile
number set forth for such Party below provided that a copy of same is deposited
with a Qualified Courier for overnight delivery to the intended addressee, in
each case for delivery to the address of the intended addressee as set forth
below (or as such other address or fax number as may be designated by such Party
as herein provided) to the officers mentioned hereinafter:
If to Sellers to Sellers' Representative: If to the Buyer:
UIH Latin America, Inc. Multicanal S.A.
4643 South Ulster, Suite 1300 Hipolito Yrigoyen 1628
Denver, Colorado 80237 2nd Piso
Tel: (303) 770-4001 1344 Buenos Aires
Fax: (303) 770-4207 Buenos Aires, Argentina
Tel: 011-54-1-375-3629
Fax: 011-54-1-375-2580
Copies to: Copies to:
UIH Argentina, Inc. Saenz Valiente & Padilla
Cerrito 740, piso 14 Hipolito Yrigoyen 1628
1309 Buenos Aires 2nd Piso
Attn.: Bradley Johnson and/or 1344 Buenos Aires
Roberto H. Crouzel Attn: Juan Maria de la Vega
Tel: (541) 372-5100 Tel: 011-54-1-375-3629
Fax: (541) 372-1990 Fax: 011-54-1-375-2580
United International Holdings, Inc. Hope, Duggan & Silva
4643 South Ulster, Suite 1300 Leandro N. Alem 11110 Piso 3
Denver, Colorado 80237 (1001) Buenos Aires
Attn.: General Counsel Tel: 011-54-1-315-1314
Tel: (303) 770-4001 Fax: 011-54-1-315-0606/4949
Fax: (303) 770-4207
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W. Dean Salter, Esq.
Holme Roberts & Owen LLP
1700 Lincoln, Suite 4100
Denver, Colorado 80203
Tel: (303) 861-7000
Fax: (303) 866-0200
All notices, summons and requests will be effective upon such personal
delivery or upon confirmation of delivery by facsimile transmission provided
that delivery to the Qualified Courier is effected within three business days
thereafter. In all other cases, notices, summons and requests will be effective
three business days after having been deposited with Qualified Courier for
overnight (or its nearest equivalent) delivery. Rejection or other refusal to
receive, or the inability to deliver, because of changed address of which no
notice was given as herein required will be deemed to be receipt of the notice,
summons or request sent.
11.2 FURTHER ASSURANCES. The Parties will make, execute and deliver such
other instruments of transfer as may be necessary or proper to transfer to Buyer
all right, title and interest in the Shares and the Options, free of any
Restriction or Lien.
11.3 HEADINGS. The Article and Section headings in this Agreement are for
convenience only and will not be used for interpretation hereof nor considered
part of this Agreement.
11.4 COUNTERPARTS. This Agreement may be executed in any number of
counterparts or counterpart signature pages, each of which will be deemed an
original but all of which, together, will constitute one and only instrument.
11.5 AMENDMENTS. No provision of this Agreement will be altered, amended,
revoked or waived except by an instrument in writing designated as an amendment,
revocation or waiver and signed by the person against whom it is sought to be
enforced.
11.6 ASSIGNMENT. This Agreement and all Additional Agreements will be
binding upon and inure to the benefit of the Parties. Except for assignments to
Affiliates, neither Party will assign any of its rights under this Agreement nor
delegate its duties hereunder unless it obtains prior written consent of the
other Party. For any assignment under the preceding sentence, the assignee, as a
condition to the effectiveness of such assignment, must assume all obligations
hereunder, with respect to the Company assigned, as co-obligor with Buyer.
11.7 ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES. This Agreement and the
Additional Agreements embody the entire agreement between the Parties concerning
the subject matter hereof and thereof. Such Agreements replace and take the
place of any other prior or contemporaneous negotiations, agreements and
understandings. The Indemnified Persons are third-party beneficiaries of Article
9.2 hereof. Otherwise, there are no third party beneficiaries.
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11.8 NO WAIVER. Failure or delay of any Party at any time or from time to
time to exercise any right under or enforce any provision of this Agreement will
not be construed as implying a waiver of such provision or of that Party's right
to exercise or enforce it subsequently. No single or partial exercise of any
right hereunder by any Party will preclude the further or full exercise of the
right by such Party. No waiver of any default on any one occasion by a Party
will constitute a waiver of any subsequent or other default by such Party.
11.9 SEVERABILITY. If any provision of this Agreement or the applications
thereof to any Person or circumstance were invalid or unenforceable to any
extent, the remainder of this Agreement, and the application of such provision
to other Persons or circumstances, will not be affected thereby and will be
enforced to the greatest extent permitted by applicable Law. In such case, the
Parties will amend this Agreement to effect, to the fullest extent possible
under applicable Laws, the original intent of the Parties with respect to such
invalid or unenforceable provision.
11.10 GOVERNING LAW. This Agreement, the rights and obligations of the
Parties hereto, and any claims or disputes relating thereto will be governed by
and construed in accordance with the Laws of Colorado.
11.11 DISPUTE RESOLUTION. Any dispute, controversy or claim arising out of
or relating to this Agreement or any Additional Agreement will be resolved by
the state courts of COLORADO or the federal courts located within the STATE OF
COLORADO. The Parties consent to personal jurisdiction of such courts in any
such disputes. Buyer consents to service of process through notice given under
Section 11.1 of this Agreement in connection with any such dispute and waives
any other requirements for service of process.
11.12 EXPENSES. Each Party will pay its own expenses incurred in connection
with the preparation, negotiation and execution of this Agreement and any
Additional Agreements.
11.13 SELLERS. Each of the Sellers hereby appoints the Sellers'
Representative as his or her agent to make decisions and take any action on
behalf of such Seller in connection with this Agreement.
11.14 NONCOMPETITION.
(a) During the period commencing at the Closing and ending on the date
which is 10 (ten) years after the Closing Date, none of the Sellers, nor any
Affiliate thereof will, directly or indirectly, own, manage, operate, control or
engage or participate in the ownership, management, operation or control of, or
be connected as a stockholder, director, officer, agent, partner, consultant,
joint venturer or otherwise with, any business or organization which engages in
the business of owning, providing, distributing or operating in the Republic of
Argentina (i) any cable television system or service, satellite master antennae
or MMDS or UHF system or service, any direct broadcast satellite system or
service or any telephone internet access, data service, or (ii) without the
prior written consent of Buyer, any service or product related to cable
television (other than provision of programming), telephony or any other
communication business. Sellers and their Affiliates shall not be deemed in
violation of this paragraph (a) if through ownership of up to 5% of the stock of
a publicly-traded company that engages in the activities described above.
(b) Each of the Sellers shall keep confidential all proprietary
information which they have obtained or receive in the future with respect to
the Companies and their Affiliates and the cable television systems and other
business owned and operated by them, except to the extent required by applicable
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Law or during the course of or in connection with any litigation, arbitration or
other proceeding based upon or in connection with the subject matter of this
Agreement and except as Sellers may consider appropriate pursuant to disclosure
obligations under U.S. securities Laws. In the event that any of the Sellers is
requested pursuant to or required by applicable Law, regulation or legal process
to disclose any of the foregoing confidential proprietary information, he or she
will notify Buyer promptly so that Buyer may seek a protective order or other
appropriate remedy or, in such Person's sole discretion, waive compliance with
the terms of this Section, the relevant Seller will furnish only that portion of
the foregoing confidential proprietary information which he or she is advised in
writing by his or her counsel is legally required and will exercise all
commercially reasonable efforts to obtain reliable assurance that confidential
treatment will be accorded to such confidential proprietary information. For
purposes of this Section 11.14(b), proprietary information does not include
information that became generally available to any Seller on a non-confidential
basis from a source other than Buyer, provided that such source is not bound by
a confidentially agreement with, or other contractual, legal or fiduciary
obligation of confidentiality to Buyer.
* * * * *
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IN WITNESS HEREOF, two copies of the same effect are executed on the date
set forth on page 1.
SELLERS
UIH ARGENTINA, INC.
/S/ DAVID LEONARD
- ---------------------------------
By: DAVID LEONARD
Its: President
UNITED INTERNATIONAL HOLDINGS
ARGENTINA, S.A.
/S/ BRADLEY JOHNSON
- ---------------------------------
By: BRADLEY JOHNSON
Its: President
BUYER
MULTICANAL S.A.
/S/ JUAN MARIA DE LA VEGA
- ---------------------------------
By: Juan Maria de la Vega
Its: Attorney-in-fact
/S/ ALEJANDRO HARRISON
- ---------------------------------
By: Alejandro Harrison
Its: Attorney-in-fact
STOCK PURCHASE AGREEMENT
DATED OCTOBER 20, 1997
BETWEEN
Supercanal Holding S.A., an Argentine corporation, hereinafter referred to as
the "Buyer", and United International Holdings Argentina, S.A., an Argentine
corporation ("UIH"), and UIH Argentina, Inc., a Colorado corporation ("UIHA").
UIH and UIHA are collectively referred to in this Agreement as the "Sellers."
The Sellers and the Buyer are jointly referred to as the "Parties."
RECITALS
The Sellers are the owners of the shares of stock of the Argentine companies set
forth on Schedule I, in proportion and quantities that are detailed on Schedule
I and the Buyer is interested in acquiring such shares pursuant to the terms and
conditions of this Agreement.
In consideration of the terms and covenants contained herein, the Parties agree
as follows:
ARTICLE 1
DEFINITIONS
As used herein, the following terms have the following meanings (terms defined
in singular to have the same meanings when used in plural and vice versa):
ADDITIONAL AGREEMENTS: Any agreement, instrument, certificate or other document
executed or delivered pursuant to this Agreement including, without limitation,
any Contract and any other documents (except opinions) delivered to the Buyer
pursuant to Article 6.
AFFILIATE: Affiliate of a Person will mean, unless otherwise specified, any
entity that directly or indirectly, through one or more intermediaries,
controls, is controlled by or is under common control with the Person. For
purposes of this definition the term "control" means effective management
control of the Person including, without limitation, control through the power
to elect a sufficient number of directors or to appoint a sufficient number of
senior managers to obtain control or similar powers. A Person will be rebuttably
presumed to control another Person or entity if it owns 50% or more of the
equity or the voting power of the applicable entity.
AGREEMENT: This Stock Purchase Agreement (including the Exhibits and Schedules
attached hereto).
APPLICABLE PURCHASE AGREEMENTS: The purchase agreements under which the Sellers
acquired their ownership interests in the Operating Companies.
ASSETS: For any Person, all of the properties, Equipment, Systems, Licenses,
marks, commercial names, intellectual property rights, and other assets,
<PAGE>
privileges, rights, interest, claims and goodwill of such Person, real and
personal, tangible and intangible, owned, leased or otherwise used by such
Person.
BAHIA BLANCA AGREEMENT: That certain Stock Purchase Agreement, dated as of
October 17, 1997, by and among the Sellers and Multicanal S.A., an Argentine
corporation, with respect to the sale of the shares of stock of certain
Argentine corporations operating in Bahia Blanca.
BUSINESS DAY: Any day on which banks in the State of New York, U.S.A., and in
the city of Buenos Aires, Argentina, are not required or authorized to be closed
by law.
CLOSING: As defined in Section 2.2 of this Agreement.
CLOSING DATE: The date on which the Closing occurs.
CLOSING LIABILITIES: All obligations, net of any amounts in escrow accounts to
provide for any such obligations, of each of the Companies at the Closing Date
that are or should be included as liabilities on the consolidated balance sheet
of the Companies as of said date in accordance with generally accepted
accounting principles in Argentina.
CLOSING CURRENT ASSETS: All assets of each of the Companies at the Closing Date
(net of any amounts in escrow accounts referred to in the definition of Closing
Liabilities) that are or should be included as current assets on the
consolidated balance sheet of the Companies as of said date in accordance with
generally accepted accounting principles in Argentina.
COMFER: The Argentine Comite Federal de Radiodifusion.
COMPANIES: The Holding Companies and the Operating Companies.
CONTRACTS/COMMITMENTS: For any Person, any contract, mortgage, deed of trust,
bond, lease, license, note, franchise, certificate, option, warrant, right, or
such other instrument, document or written agreement, and any oral obligation,
right or agreement to which such Person is a party and/or beneficiary and/or
obligee and/or subscriber and/or by which such Person and/or any Assets or
securities of such Person are or may be bound, including, without limitation,
any License.
EQUIPMENT: Equipment includes, but is not limited to, electronic devices, trunk
and distribution cables; amplifiers; power supplies; conduit; cables and
pedestals; grounding and pole hardware, installed subscriber devices (including,
without limitation, drop lines, converters, encoders, transformers behind
television sets and fittings); "headend" (origination, transmission and
distribution system); hardware; tools; inventory; spare parts; maps and
engineering data; vehicles; microwave equipment; studios and other broadcast
facilities and other equipment for local programming; and all other tangible
property and facilities owned, used or held for use by the Operating Companies
in the Systems of the Companies.
GOVERNING DOCUMENTS: The bylaws (estatutos), articles or certificate of
incorporation or association, or other governing documents which may be
mandatory in any entity.
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GOVERNMENTAL AUTHORITY: Any court, administrative agency or commission, or any
other governmental organization, or any other governmental or quasi-governmental
agency, instrumentality or official, domestic or foreign.
HOLDING COMPANIES: Inversora Atelco Comodoro, S.A., and Inversora Antena
Comunitaria Trelew S.A.
JUDGMENT: Any judgment, writ, order, decree or ruling of or by any court, judge
or magistrate, including any bankruptcy court or judge.
LAW: The civil and commercial law and any statute, ordinance, code or other law,
rule, regulation, order, technical or other standard, requirement or procedure
adopted and in effect in the Argentine Republic or its political subdivisions.
LICENSES: All concessions, licenses, permits, operating authorizations and other
agreements and approvals from Governmental Authorities, providers of programming
or other entities and all material rights-of-way, satellite, microwave or other
transmission agreements, pole or underground construction or usage agreements
and all other agreements necessary to construct, own and operate a System in a
specified geographical area in compliance with applicable Laws.
LIEN: Any security agreement, financing statement (whether filed or not),
conditional sale or other title retention agreement, any lease, consignment or
bailment given for security purposes, any lien, charge, limitation, restrictive
agreement, mortgage, pledge, option, encumbrance, adverse interest, constructive
trust or other trust, claim, legal custody, exception to or defect in title or
other ownership interest (including, without limitation, reservations, rights of
entry, possibilities of reverter, encroachments, easements, rights of way,
restrictive covenants, leases and Licenses) of any kind.
MATERIAL ADVERSE EFFECT: Material Adverse Effect means any event, change,
occurrence or condition, singly or together with any other event, change,
occurrence or condition that would have a material adverse effect on the
condition, financial or otherwise, of a Person.
OPERATING COMPANIES: Atelco, S.A., and Antena Television Comunitaria, S.A.
PERSON: Any natural person, sociedad anonima, sociedad de responsabilidad
limitada, corporation, general or limited partnership, joint venture, trust,
association, entities of any kind (with or without legal existence) or
Governmental Authority or other persons.
PURCHASE PRICE: The Purchase Price will equal the following:
(a) The aggregate amount for all of the Companies (calculated without
duplication) of the following amount for each Company:
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(i)(A) the total number of Subscribers of such Company at the Closing
Date multiplied by US$1,500, (B) less the Closing Liabilities of such
Company, (c) plus the Closing Current Assets of such Company;
(ii) multiplied by the total percentage ownership of such Company
being transferred pursuant to this Agreement.
For example, suppose Company A is a seller and owns 80% of the shares of Company
B and Company B owns 90% of Company C. Company B has no Subscribers, US$25 of
Closing Liabilities and US$5 of Closing Current Assets. Company C has 10
Subscribers, US$100 of Closing Liabilities and US$20 of Closing Current Assets.
In this case, clause (a) of the definition of Purchase Price would be applied as
follows:
-- The amount for Company C would be (10 x US$1,500) minus US$100 plus
US$20, all multiplied by 72%, for a total of US$10,742.40.
-- The amount for Company B would be ($20) multiplied by 80% or ($16).
-- The total amount for these two companies under clause (a) would be
US$10,726.40.
REAL PROPERTY: For any Person, all realty, towers, fixtures and other interests
in real property, buildings, improvements and construction-in-progress owned,
leased, occupied, used or held for use by such Person.
REQUIRED CONSENTS: As defined in Section 3.2.2 hereof.
RESTRICTION: With respect to any stock, any voting or other trust or agreement,
option, warrant, escrow, proxy, buy-sell or other share transfer agreement,
power of attorney or other Contract, arrangement or understanding, Judgment or
Law that (i) grants to any person the right to purchase or otherwise acquire, or
obligates any person to sell or otherwise dispose of, or otherwise results or
may result (with or without the passage of time, the payment of money or the
occurrence of any other event) in any Person acquiring any such stock, any
interest in or proceeds or distributions of any such stock, (ii) restricts or
may restrict the transfer of or the exercise of any voting rights or the
enjoyment of any other benefits arising by reason of ownership of any such
stock, proceeds or distributions, or (iii) creates or may create a lien or a
purported lien affecting such stock, proceeds or distributions.
RIGHTS: Collectively, (A) the right to any dividend of any of the Companies, in
cash or in kind, declared but not distributed as of the Closing Date, (B) all
the rights arising from revocable or irrevocable capital contributions made by
Sellers to the Companies prior to the Closing Date that have not been
capitalized (or the capitalization of which has not yet been effected), (C) all
credits that the Sellers may have against the capital of the Companies as of the
Closing Date, (D) all rights to subscribe to the Companies' capital increases as
of the Closing Date, and (E) any other rights to be paid in as of the Closing
Date.
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SANTA FE AGREEMENT: That certain Amended and Restated Stock Purchase Agreement,
dated as of October 20, 1997, by and among the Buyer, UIHA, and CV American
Holdings L.L.C., a Delaware limited liability company, with respect to the sale
of the shares of stock of certain Argentine corporations operating in Santa Fe
and Entre Rios.
SELLERS' REPRESENTATIVE: UIH Latin America, Inc., a Colorado corporation, or
such other Person as the Sellers may designate in writing in the future. The
Sellers grant the Sellers' Representative sufficient power to interpret and/or
modify this Agreement and to sign any agreement related to the same.
SHARES: The shares of the Holding Companies' capital stock, and the shares of
any Operating Company's capital stock held directly by any Seller, set forth on
Schedule I to be purchased by the Buyer from the Sellers pursuant to this
Agreement, which will constitute all of the outstanding capital stock and voting
power of each such Holding Company or Operating Company, as applicable, owned by
the Sellers. The transfer of the Shares implies the transfer of all of the
Rights.
SUBSCRIBER: Any person that, at the relevant date for the calculation of the
number of Subscribers, is connected to the services furnished by the Company,
and with respect to whom condition (i) below and one of conditions (ii) and
(iii) below is met.
(i) the services furnished by the Company to that person have been
invoiced on a monthly basis at a time consistent with the system's past
practices;
(ii) if services had been furnished for a period for which more than
two invoices have been issued, no debt in respect of a monthly invoice,
other than the three monthly invoices due prior to such date is outstanding
(including debt outstanding under a refinancing plan) or have been released
or otherwise discharged without payment since August 1, 1997, PROVIDED,
HOWEVER, that a person owing any such invoice under a refinancing plan of
which at least THREE installments have been paid at that date and who is
not in arrears with respect to any installment thereof will be considered a
Subscriber; and
(iii) if services had been furnished for a period shorter than the
period contemplated in (ii) above, that person has paid either (a) a
connection charge not lower than 50% of the system's regular monthly charge
or (b) a monthly invoice in advance.
If a person has been connected to the services under a temporary sale
promotion, that person shall be counted as a fraction of subscriber in the same
proportion as the monthly charge paid by that person bears to the then regular
monthly charge. For the purposes hereof "temporary sale promotion" shall mean,
with respect to any system, any temporary discount, rebate or other reduction in
the system's monthly charge for the purpose of gaining new subscribers for the
system, and "regular monthly charge" shall mean, with respect to any system, the
monthly charge invoiced to the persons connected to that system under no such
promotion or other preference, as shown in the relevant management reports. For
systems that normally offer a discount for invoices paid within a specified
time, the discounted amount shall be deemed to be the regular monthly charge.
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If a person connected to the services enjoys a preference charge, that
person shall be counted as a fraction of subscriber in the same proportion as
the monthly charge paid by that person bears to the then regular monthly charge.
For the purposes hereof "preference charge" shall mean, with respect to any
system owned by the Company, any charge lower than the regular monthly charge
(as defined above) provided for by the Company under any program other than a
temporary sale promotion.
If a person connected to the services pays more than the regular monthly
service charge, then that person shall be counted as more than one subscriber in
a manner comparable to that used above for persons who pay less than the regular
monthly charge.
SYSTEM: A complete multi-channel subscription television reception and
distribution system consisting of one or more head-ends, trunk cable, subscriber
drops and associated electronic equipment that is or is capable of being
operated as an independent system without interconnections to other systems.
TAX: Any tax or payment of any kind required pursuant to any Law, to be paid to
any Governmental Authority.
TITLE DOCUMENTS: Any deed, grant of easement, certificate of title or other
document which confirms or vests title or ownership of any property or any
interest in Assets in any Person.
US$: United States Dollars.
ARTICLE 2
PURCHASE OF STOCK
2.1 PURPOSE OF AGREEMENT.
(a) The Sellers agree to sell, assign and transfer to Buyer and Buyer
agrees to purchase, pursuant to the terms and conditions of this Agreement, the
Shares.
(b) This Agreement includes the transfer to Buyer of all of the Rights
on the Closing Date. Sellers also agree to transfer directly (or through
transfer of a parent company) all rights to receive funds from or enforce the
provisions of any escrow existing pursuant to any of the Applicable Purchase
Agreements or related documents.
(c) This Agreement includes the assignment by Sellers to Buyer of all
of Sellers' rights and obligations under the Applicable Purchase Agreements, to
the extent such rights and obligations are assignable under the respective terms
of such Applicable Purchase Agreements.
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2.2 CLOSING.
(a) The Closing of the purchase and sale of the Shares (the "Closing")
will occur on October 20, 1997 at 10:00 a.m. Buenos Aires time. The Closing
shall take place at the offices of Estudio Beccar Varela, Buenos Aires,
Argentina, or any other place as agreed in writing by Buyer and Sellers'
Representative.
(b) At the Closing the Sellers will deliver to the Buyer any and all
certificates representing the Shares and will take all necessary acts to perfect
the transfer of the Shares and note in the name of the Buyer and/or the company
that the Buyer will designate the transfer in the Companies' Stock Registry
Books, free of Liens and Restrictions, with the exception of the authorization
provided for in Article 46 clause (f) of the Broadcasting Law, if applicable.
2.3 PAYMENT OF PURCHASE PRICE.
2.3.1 INITIAL PAYMENT: The Buyer has paid to the Sellers the sum of
US$5,000,000.00 as partial payment of the Purchase Price. Such amount will be
forfeited by Buyer if the Closing does not occur on October 20, 1997 for any
reason other than a breach by Seller of a material obligation hereunder or a
failure by Seller to satisfy the conditions precedent set forth in Section 6.1.
2.3.2 ESCROW DEPOSIT: US$2,429,203.00 of the Purchase Price (the
"Escrow Deposit") will be paid at the Closing by way of a deposit on behalf of
the Buyer in an escrow account (the "Escrow Account") with Colorado National
Bank N.A. or such other escrow agent as the Parties shall agree, with which an
agreement will be signed substantially in the form attached hereto as Exhibit A
(the "Escrow Agreement"). The Escrow Account will be governed by the terms and
conditions of the Escrow Agreement.
2.3.3 CLOSING PAYMENTS: The remainder of the Purchase Price, determined
pursuant to Section 2.4(a) (the "Closing Payment"), will be paid to the Sellers
at the Closing.
2.4 DETERMINATION OF PURCHASE PRICE. For purposes of the Closing Payment to
be made pursuant to Section 2.3.3, the Purchase Price will be determined as
follows:
(a) Attached hereto as Exhibit B is a certificate setting forth a good
faith estimate, based on August 31, 1997 numbers, of (A) the total number of
Subscribers to the Companies' Systems as of the Closing Date, (B) the Closing
Liabilities, (C) the Closing Current Assets, and (D) the Purchase Price. The
Closing Payment will be (i) the Purchase Price shown on that certificate (the
"Estimated Purchase Price") plus interest thereon from October 17, 1997 until
the Closing at the rate of 15% per annum, payable weekly until the Closing
occurs, minus (ii) subject to Section 2.3.1, the partial payment described in
Section 2.3.1 and minus (iii) the Escrow Deposit.
(b) Within thirty days after the Closing Date, the Buyer will deliver
to the Sellers' Representative a statement (the "Purchase Price Statement")
showing (i) the number of Subscribers at the Closing Date, (ii) the Closing
Liabilities, (iii) the Closing Current Assets and (iv) the resulting Purchase
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Price, and specifying in reasonable detail how each of those items was
calculated. In order to expedite calculation of the Purchase Price, the Seller
will cooperate with the Buyer prior to the Closing in the Buyer's efforts to
prepare to audit the number of Subscribers at the Closing Date and to determine
the Closing Liabilities and Closing Current Assets. The Buyer will permit the
Sellers' Representative or its designee to participate in the Buyer's audit of
the number of Subscribers at the Closing Date. Schedule 2.4(b) details certain
valuation criteria to be used for auditing or arbitration purposes. If Buyer
does not deliver the Purchase Price Statement within this 30-day period, it will
have no right to assert that the Purchase Price is lower than the Estimated
Purchase Price.
(c) The Purchase Price shown on the Purchase Price Statement will be
deemed to be the final Purchase Price unless, within ten days after it receives
the Purchase Price Statement, the Sellers' Representative delivers to the Buyer
a notice (a "Dispute Notice") stating that the calculation of the Purchase Price
was not correct and specifying in reasonable detail each item on the Purchase
Price Statement that the Sellers' Representative disputes, and the amount in
dispute with regard to each of those items.
(d) If a Dispute Notice is delivered to the Buyer within the ten day
period described in subparagraph (c), the Buyer and the Sellers' Representative
will attempt to reach an agreement within five days after the Dispute Notice is
delivered with regard to each item specified in the Dispute Notice. If the Buyer
and the Sellers' Representative fail to agree within that five day period as to
any items, KPMG Peat Marwick or another firm of accountants agreed upon by the
Buyer and the Sellers' Representative (the "Accountants") will be retained to
resolve the dispute as to those items (with the Buyer and the Sellers each
paying half the cost of the Accountants). The determination of the Accountants
as to each item will be final and binding on the Parties. The final Purchase
Price will reflect all adjustments to the Purchase Price shown on the Purchase
Price Statement that are agreed upon by the Buyer and the Sellers'
Representative or are determined by the Accountants.
(e) Within three days after the Purchase Price Statement is delivered
to the Sellers' Representative, the Buyer will pay the Sellers the amount, if
any, by which the Purchase Price shown on the Purchase Price Statement exceeds
the Estimated Purchase Price.
(f) Within three days after the Dispute Notice is delivered to the
Buyer (or the time to deliver a Dispute Notice expires without a Dispute Notice
being delivered), the Buyer and the Sellers' Representative will instruct the
Escrow Agent (i) to pay the Buyer the amount, if any, by which, if all the
Disputed Items were resolved in favor of Sellers, the Purchase Price would be
less than the Estimated Purchase Price, or (ii) to pay the Sellers the amount,
if any, by which if all the Disputed Items were resolved in favor of the Buyer,
the Purchase Price would be more than the Estimated Purchase Price minus the
amount of the Escrow Deposit. If, even if all the Disputed items were resolved
in favor of the Sellers, the Purchase Price would be less than the Estimated
Purchase Price minus the amount of the Escrow Deposit, at the same time the
instruction is delivered to the Escrow Agent, the Sellers will pay the Buyer the
amount by which the Purchase Price shown on the Purchase Price Statement plus
the total of all the Disputed Items is less than the Estimated Purchase Price
minus the amount of the Escrow Deposit. If, even if all the Disputed Items were
resolved in favor of the Buyer, the Purchase Price would be more than the
Estimated Purchase Price, at the same ime the instruction is delivered to the
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Escrow Agent, the Buyer will pay the Sellers the amount by which the Purchase
Price shown on the Purchase Price Statement is more than the Estimated Purchase
Price.
(g) If a Dispute Notice is delivered to the Buyer, within three days
after any disputed item is resolved by agreement of the Buyer and the Sellers'
Representative in a manner that increases the Purchase Price, the Buyer and the
Sellers will instruct the Escrow Agent to pay the Sellers (or, after the entire
Escrow Deposit has been paid to the Sellers, the Buyer will pay the Sellers) the
amount by which the Purchase Price is increased.
(h) Within three days after the final Purchase Price is determined
(whether because the Sellers' Representative did not deliver a Dispute Notice,
because of agreement between the Buyer and the Sellers or because of a
determination of the Accountants), the Buyer and the Sellers' Representative
will instruct the Escrow Agent to pay to the Sellers any amount by which the
final Purchase Price exceeds the payments previously made with regard to the
Purchase Price (including any payment being made under subparagraph (e), (f) or
(g)), and to pay the balance of the Escrow Deposit to the Buyer. If the amount
by which the final Purchase Price is greater than the payments previously made
with regard to the Purchase Price exceeds the balance of the Escrow Deposit
being held by the Escrow Agent, within three days after the final Purchase
Deposit is determined, the Buyer will pay the Sellers an amount equal to the
excess.
(i) When the Purchase Price is finally determined, the income earned on
the Escrow Deposit will be paid to the Sellers and the Buyer in proportion to
the portions of the Escrow Deposit paid to each of them.
(j) If the amount of the Escrow Deposit being held by the Escrow Agent
on December 1, 1997 exceeds US$971,681, on December 1, 1997, the Escrow Agent
will pay the excess above US$971,681 to the Sellers. If, when the final Purchase
Price is determined, the amount the Sellers have received with regard to the
Purchase Price, including the sum distributed under this subparagraph on
December 1, 1997, exceeds the final Purchase Price, within three days after the
final Purchase Price is determined, the Sellers will pay the Buyer an amount
equal to the excess.
2.5 EFFECTIVENESS OF PAYMENT. Each Seller acknowledges that payment in
accordance with Section 2.6 will constitute payment to such Seller.
2.6 FORM OF PAYMENT. All payments to be made pursuant to this Agreement
shall be made to the Sellers' Representative by wire transfer of immediately
available funds to in accordance with the wire transfer instructions attached
hereto as Schedule 2.6.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Each Seller represents and warrants, except as disclosed on the annexes and
schedules of the Applicable Purchase Agreements, to Buyer the following. With
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respect to each Operating Company, the representations and warranties made by
Sellers in or pursuant to this Agreement apply only to events that occurred
after the Sellers acquired at least majority ownership of such Operating Company
("Majority Ownership Date"). Accordingly, no such representation and/or warranty
will be deemed to have been untrue or inaccurate when made with respect to any
Operating Company unless (and then only to the extent that) an event that
occurred after the Majority Ownership Date caused such representation and
warranty to be untrue or inaccurate when made.
3.1(a) THE SELLERS.
3.1(a)(1). Each of the Sellers is a corporation, sociedad anonima or
limited liability company duly organized and validly existing under the Laws of
the jurisdiction of its incorporation or organization.
3.1(a)(2). This Agreement is a valid obligation, binding on each of the
Sellers, and is enforceable against each of them pursuant to the terms and
conditions hereof. Each Additional Agreement to which any Seller is a party
will, at the Closing, have been duly signed and executed by each of the Sellers
and will be a valid obligation, binding on and enforceable against each of them
pursuant to the terms thereof.
3.1(b) THE COMPANIES.
3.1(b)(1). Each of the Holding Companies and Operating Companies is a
corporation ("sociedad anonima") duly incorporated and validly existing and in
good standing under the Laws of the Republic of Argentina.
3.1(b)(2). Except as set forth on Schedule 3.8.3, each of the Holding
Companies and, to the Sellers' knowledge, Operating Companies has all requisite
corporate powers (and, to the Sellers' knowledge, each of the Operating
Companies holds a license) to operate the Systems, as well as to carry out its
activities as it has done until now and to be the owner of and/or to lease
and/or to use and/or to manage its property in the way it uses and manages same
at present and according to the annexes and schedules of the Applicable Purchase
Agreements. Each of the Holding Companies and, to the Sellers' knowledge,
Operating Companies is duly qualified to engage in and transact business and is
in good standing in each jurisdiction in which the character of the properties
owned, leased, used or managed by it or the nature of the business conducted by
it require it to be so qualified. The representations in this Section 3.1(b)(2)
do not include approval by COMFER of the Sellers' indirect acquisition of shares
of the Operating Companies, which approval has not yet been obtained.
3.1(b)(3). The Sellers have previously delivered or made available in
Argentina to Buyer complete and accurate copies of each of the Companies' (a)
Corporate Bylaws as amended from time to time, (b) all the minutes of its board
meetings or shareholders' meetings furnished to the Sellers in conjunction with
the Applicable Purchase Agreements and since the ownership of the Shares by the
Sellers, and (c) its stock registers, validly reflecting any and all issuances,
reissuances, cancellations and transfers of each of the Companies' capital
stock.
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3.1(b)(4). None of the Companies owns any equity interest or any other
obligation or equity security of any other Person.
3.2 NO VIOLATION; CONSENTS:
3.2.1 The execution and delivery of this Agreement by each of the
Sellers and of any Additional Agreement to be executed and delivered by any of
them, as well as the performance of their respective obligations hereunder and
thereunder and the consummation of the transactions contemplated herein and
therein will not violate any provision of Law and, with or without the giving of
notice or the passage of time, will not conflict with or result in any breach of
any of the terms and conditions of, nor will constitute a default pursuant to,
the Companies' Governing Documents or of any Contract of any of the Holding
Companies or, to the Sellers' knowledge, any of the Operating Companies.
3.2.2 Schedule 3.2 lists all Persons (including, without limitation,
Governmental Authorities, shareholders and creditors, parties to any necessary
License and parties to any other Contract) whose approval or consent, or with
whom the filing of any certificate, notice, application, report or other
document is legally or contractually required or necessary in connection with
the execution, delivery or performance of this Agreement or any of the
Additional Agreements, by Sellers (the "Required Consents").
3.3 CAPITAL STOCK.
3.3.1 The authorized capital stock and the capital stock that is issued
and outstanding of each of the Companies is set forth on Schedule 3.3.1. Except
as set forth on Schedule 3.3.1, all of such outstanding shares are duly
authorized, validly issued, fully paid-in and are subject to no Lien. With
respect to such shares, there are no obligations to make further contributions.
Each Company's outstanding capital stock is owned as indicated in Schedule I,
which sets forth the name of each beneficial owner of such stock and the number
of shares owned by each of them. Except as set forth on Schedule 3.3.1, none of
the Sellers has created or is contractually bound to create any Lien or
Restriction on the capital stock or any other securities of the Companies. One
share of stock of each of the Holding Companies is held by an Affiliate of the
Sellers. It is the intention of the Sellers to (a) before the Closing, cause
such Affiliates to transfer such shares to one or more of the Sellers and (b)
transfer such shares to the Buyer together with the remainder of the Shares.
3.3.2 There are no outstanding options, warrants, calls or other
securities or rights of any kind to acquire, currently or upon the passage of
time or the payment of money or the occurrence of any other event, stock or
other securities of any of the Holding Companies and, to the Sellers' knowledge,
the Operating Companies, nor any contingent or other kind of commitment to issue
any of the foregoing.
3.4 BROKERS, AGENTS, FINDERS, ETC. Except as set forth on Schedule 3.4,
neither the Sellers nor their respective agents have retained or hired any
broker, agent or finder, nor have they agreed to pay any fee, commission or
similar payment to any person under this Agreement or under any Additional
Agreement or in respect of the transactions contemplated herein or therein.
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3.5 FINANCIAL STATEMENTS.
3.5.1 The Sellers have delivered to the Buyer the following financial
statements (the "Financial Statements"):
(i) The financial statements delivered to the Sellers in
conjunction with their acquisition of the Operating Companies;
(ii) monthly operating results for April and May, 1997, for each
of the Operating Companies, setting forth month-end subscribers and
revenue, expense and EBITDA for such Companies for such months; and
(iii) closing certificates furnished to Sellers setting forth
certain estimated information regarding numbers of subscribers,
liabilities and working capital of each of the Companies received by
the Sellers in connection with Sellers' acquisitions of the Companies
pursuant to the Applicable Purchase Agreements.
3.5.2 The financial statements referred to in Clauses (ii) and (iii) of
Section 3.5.1 are accurate in all material respects, subject to normal year-end
adjustments and subject also to debt of such Companies to the Persons who sold
such Companies to the Sellers incurred under the Applicable Purchase Agreements.
The documents referred to in Clauses (i) and (iv) of Section 3.5.1 are complete
and accurate copies of the documents furnished to Sellers. Since May 31, 1997
there has been no material adverse change in the financial condition or results
of operations of the Operating Companies taken as a whole. Since September 9,
1997 (i) the Companies have conducted their respective businesses diligently, in
good faith and in the ordinary course, consistent with past practices and in
compliance with all applicable Laws, and have not engaged in any transaction,
including, without limitation, entering into or amending any Contract, incurring
any liability or obligation (absolute or contingent), or making any advance or
expenditure, other than in the ordinary course of business, nor have they
changed their business policies or practices in any material respect. The
Companies have not acquired any customers of a System by promotional incentives
or discounts exceeding those customarily given in the cable industry in
Argentina; and (ii) the Companies have not paid any dividends, nor retired any
amounts on account of future dividends, redeemd or repurchased any shares of
their stock, or reduced their capital, except as permitted under Section 5.7 of
the Existing Stock Purchase Agreement.
3.5.3 The books and records of each of the Holding Companies and, to
the Sellers' knowledge, Operating Companies are reasonably complete and reflect
the transactions and dispositions of the Assets of each of them adequately.
3.6 TAXES. Each of the Holding Companies has duly and timely filed in
proper, legal and accurate form, all reports and tax returns and has paid all
taxes in accordance with applicable Law. Each Operating Company, since its
Majority Ownership Date, has duly and timely filed in proper, legal and accurate
form all reports and tax returns and has paid all taxes in accordance with
applicable Law that first became due during such period.
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3.7 LAWSUITS. Except as set forth in the annexes and schedules to the
Applicable Purchase Agreements, there are no actions, proceedings, claims or
investigations pending or threatened by or before any Governmental Authority to
which a Holding Company or, to the Sellers' knowledge, an Operating Company is a
party in which an adverse determination could reasonably be expected to have a
Material Adverse Effect on the Companies taken as a whole or the material
Licenses, Contracts, Assets or rights of the Companies taken as a whole, or
which might question the validity of this Agreement or of any other Additional
Agreement, or which seeks to restrain or enjoin the consummation of transactions
contemplated herein or therein.
3.8 LICENSES.
3.8.1 To the Sellers' knowledge, each of the Operating Companies has
all material Licenses necessary to construct, own and operate commercially the
Systems of the Companies in the geographical areas in which it currently
conducts business, in each case in full compliance with all applicable Laws
except where such noncompliance would not have a Material Adverse Effect on such
Operating Company. To the Sellers' knowledge, each of the Operating Companies'
Licenses is a valid and subsisting instrument under applicable Laws and is in
full force and effect. To the Sellers' knowledge, each License used, held for
use in or necessary for the operation of the Systems of the Operating Companies
is held by and in the name of each such company. To the Sellers' knowledge,
there is no pending application before any Governmental Authority which involves
an Operating Company License. To the Sellers' knowledge, none of the Operating
Companies' Licenses may be revoked during the period of issue unless the
applicable Operating Company breaches the terms or conditions of such license.
3.8.2 To the Sellers' knowledge (i) no Operating Company has materially
breached or is in default under any of the Operating Companies' Licenses except
where such breach or default would not have a Material Adverse Effect on such
company, (ii) the Systems of the Companies, to the extent that same are
constructed, have been constructed in compliance with all applicable Licenses
and Laws and (iii) no Operating Company has received any notice of breach or
default under any of its Licenses from any Governmental Authority.
3.8.3 To the Sellers' knowledge, Schedule 3.8.3 sets forth a list of
all pending COMFER authorizations and claims.
3.9 ASSETS.
3.9.1 TITLE; LIENS. To the Sellers' knowledge, each of the Operating
Companies has good and marketable title or valid rights to all of its Assets,
free and clear of any Lien, except (i) Liens for property taxes not delinquent,
(ii) Liens that do not materially detract from the value of the Assets or
materially interfere with the present use of the Assets, (iii) the Liens listed
in the schedules and annexes to the Applicable Purchase Agreements and (iv)
Liens referred to in Section 6.1(h).
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3.9.2 REAL PROPERTY. Other than as reflected in the annexes and
schedules to the Applicable Purchase Agreements, neither the Holding Companies
nor, to the Sellers' knowledge, the Operating Companies own any Real Property.
3.9.3 INTELLECTUAL PROPERTY, COPYRIGHTS, PATENTS AND TRADEMARKS.
Neither the Holding Companies nor, to the Sellers' knowledge, the Operating
Companies are in violation of any intellectual property right, copyright, patent
or trademark of any Person.
3.10 THE SYSTEMS.
3.10.1 To the Sellers' knowledge, all of the Equipment is in good
working order and repair, complies in all material respects with all applicable
Licenses and Laws and with all rules, regulations and standards of all
Governmental Authorities regarding its intended use. None of the Holding
Companies directly owns any material cable television Equipment.
3.10.2 To the Sellers' knowledge, each of the Operating Companies is
duly authorized under applicable Laws to distribute to Subscribers all the
signals carried or proposed to be carried and has all Licenses required to
operate all earth stations and microwave and other transmission facilities used
or proposed to be used in the Systems of the Companies in compliance with
applicable Laws.
3.11 EMPLOYMENT MATTERS. Each of the Holding Companies and, to the Seller's
knowledge, the Operating Companies (except as covered by Section 9.2(a)(iii))
has fully complied with all applicable labor and social security Laws.
3.12 INSURANCE. To the Sellers' knowledge, all of the insurance policies of
the Operating Companies are outstanding, valid and enforceable in accordance
with their respective terms, having been hired with financially sound and
reputable insurance companies.
3.13 CONTRACTS AND COMMITMENTS.
3.13.1 All of the Contracts/Commitments of the Holding Companies and,
to the Sellers' knowledge, the Operating Companies (collectively the "Company
Contracts") are in good standing, valid and effective, with no material breach,
violation, default, notice or claim of breach by any party thereto except where
such breach, violation or default would not have a Material Adverse Effect.
3.13.2 Sellers have made available to Buyer in Argentina complete and
accurate copies of all of the Company Contracts, and any and all amendments or
modifications thereto.
3.14 COMPLIANCE. Each of the Holding Companies and, to the Sellers'
knowledge, the Operating Companies has complied in all material respects with
all Licenses, Contracts, and Laws applicable to the conduct of its business and
ownership, possession, maintenance and operation of its properties and Assets
except where such noncompliance would not cause a Material Adverse Effect on the
Companies taken as a whole.
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3.15 NO MISSTATEMENTS OR OMISSIONS. No representation or warranty in this
Article Three contains any untrue statement of a material fact or omits to state
a material fact necessary to make the statements contained therein not
misleading.
3.16 ENVIRONMENTAL MATTERS. To the Sellers' knowledge, none of the
Operating Companies has received a notice from any Governmental Authority that
it, or any property it owns or uses, is in violation of any Law or regulation
relating to protecting the environment.
3.17 LABOR MATTERS. Except as set forth on Schedule 3.17, no employee of
any of the Companies is represented by any labor union, and no union is
attempting to organize or otherwise become the bargaining representative for any
employees of any of the Companies.
3.18 VENDOR DEBT. Schedule 3.18 shows (a) the amounts as of the date hereof
of all outstanding debt incurred as deferred payment of the purchase price paid
by Sellers for the Companies and (b) the amount as of the date hereof of all
funds held in escrow pursuant to the Applicable Purchase Agreements.
3.19 ASSETS AND CONTROLLED AFFILIATES IN THE UNITED STATES. None of the
Companies is incorporated in the United States, or organized under the laws of
the United States, or has its principal offices within the United States. None
of the Companies, nor any entity that they control, nor all such controlled
entities in the aggregate, hold assets located in the United States having an
aggregate book value of US$15,000,000 or more, and none of the Companies
directly or indirectly controls any corporation that is incorporated in the
United States, is organized under the laws of he United States, or has its
principal offices within the United States. As used in this Section 3.19, the
term "control" means (a) holding 50% or more of the outstanding voting
securities of an issuer; (b) in the case of an entity that has no outstanding
voting securities, having the right to 50% or more of the entity's profits, or
having the right in the event of dissolution to 50% or more of the entity's
assets; or (c) having the contractual power presently to designate 50% or more
of the directors of a corporation, or in the case of unincorporated entities, of
individuals exercising similar functions.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
4.1 BUYER. Buyer is a corporation duly organized, validly existing and in
good standing under the Laws of the Republic of Argentina, with all requisite
corporate power and authority to conduct its business and operations as
presently conducted and to execute, deliver and perform this Agreement and the
other instruments and documents required hereby to be executed and delivered by
Buyer, and has, or as of the Closing Date will have, taken all action required
to duly authorize such execution, delivery and performance. This Agreement is,
and the other instruments and documents to be executed and delivered by Buyer
hereunder or prior to the Closing will be, legal, valid and binding obligations
of Buyer, enforceable in accordance with their respective terms. Buyer
represents that it is familiar with any and all applicable broadcasting Laws, in
particular with the provisions of Law 22,285, as amended, and with any and all
obligations to be undertaken by it under same, and especially that this
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Agreement must be submitted to the approval specified in Article 46 clause (f)
of the Broadcasting Law.
4.2 NO VIOLATION; BUYER'S CONSENTS.
4.2.1 The execution and delivery of this Agreement by Buyer and of any
Additional Agreement to be executed and delivered by it, as well as the
performance of its obligations hereunder and thereunder and the consummation of
the transactions contemplated herein and therein will not violate any provision
of Law and, with or without the giving of notice or the passage of time, will
not conflict with or result in any breach of any of the terms and conditions of,
nor will constitute default pursuant to, Buyer's Governing Documents or of any
Contract of Buyer.
4.2.2 Except for COMFER if applicable, there are no Persons (including,
without limitation, Governmental Authorities, shareholders and creditors,
parties to any necessary License and parties to any other Contract) whose
approval or consent, or with whom the filing of any certificate, notice,
application, report or other document is legally or contractually required or
necessary in connection with the execution, delivery or performance of this
Agreement or any of the Additional Agreements by Buyer.
4.3 BROKERS, AGENTS, FINDERS, ETC. Neither the Buyer nor its agents have
retained or hired any broker, agent or finder, nor have they agreed to pay any
fee, commission or similar payment to any person under this Agreement or under
any Additional Agreement or in respect of the transactions contemplated herein
or therein, except for Integra Financial Services LLC, Smith Barney, and ING
Bank ("ING"). Any obligations arising under any of the arrangements described in
the preceding sentence will be the sole obligation of Buyer, and no Seller will
have any liability therefor.
ARTICLE 5
POST-CLOSING COVENANTS
Except as otherwise approved by the other Party in writing, the Parties
agree as follows:
5.1 UFC AFFILIATION AGREEMENT. Buyer shall use its best efforts to enter
into, within six months after the date hereof, an affiliation agreement with
respect to the carriage of Casa Club and The Family Channel through the
Companies' Systems, on terms and conditions substantially as set forth on the
term sheet attached hereto as Exhibit C, along with such other terms and
conditions as are customary for agreements with respect to such matters.
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ARTICLE 6
CONDITIONS OF BUYER'S OBLIGATIONS
6.1 CLOSING. Buyer's obligation to pay the Purchase Price is subject to the
satisfaction or written waiver of the following conditions:
(a) STOCK TRANSFER. That the Sellers deliver to Buyer all of the
certificates representing the Shares and do all acts necessary to perfect the
transfer of the Shares in the name of Buyer and/or any company that Buyer
indicates in the Stock Registry book of the Companies, free of Liens or
undisclosed Restrictions, subject to the approval of the authorization provided
for in Art. 46(f) of the Broadcasting Law, if applicable.
(b) RECEIPT OF CONSENTS. All of the Required Consents will have been
obtained or given, with the exception of such Consent required under art. 46,
part (f) of Law 22.285, if applicable, and except where the failure to obtain
(or, in the case of filings, make) such Required Consents would not have a
Material Adverse Effect on the Companies taken as a whole.
(c) CORPORATE ACTIONS. All corporate or other actions necessary for (i)
the execution, delivery and performance of this Agreement and of the Additional
Agreements by the Sellers, (ii) the completion of the transactions contemplated
herein and therein, and (iii) implementing the annotations that are required in
the corporate record books in order to effectuate the transfer of the Shares,
free of all Liens and undisclosed Restrictions, will have been duly and validly
taken and will be in full force and effect.
(d) PERFORMANCE. The Sellers will have performed in all material
respects all obligations under this Agreement and the Additional Agreements to
be performed by them at or prior to the Closing.
(e) TRUE AND COMPLETE REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties made to Buyer in or pursuant to this Agreement or
any Additional Agreement will be true and complete in all material respects,
both when made and as of Closing, with the same effect as if made at and as of
the time of Closing.
(f) NO GOVERNMENTAL PROCEEDINGS. No provision of any applicable Laws
will apply, with the exception of those stemming from the Law 22,285 on
Broadcasting, and no Judgment will exist so as to prevent completion of the
transactions contemplated in this Agreement or in any Additional Agreement,
questioning the legality or validity of such transactions or otherwise alleging
damage as the result of such transactions, or where damages resulting from such
transactions might be claimed, nor any pending or threatened proceeding in which
any Person seeks or may take any such action. None of the Parties to this
Agreement will have been notified of the present intention of any Government
Authority or of the legal representative thereof to bring an action or
proceeding challenging or enjoining completion of any other transactions
contemplated herein or in any Additional Agreement.
(g) DOCUMENTS. The Sellers will have signed and delivered, or caused to
be delivered, the certificate contemplated by Section 2.4(a).
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(h) RELEASE OF LIENS. Buyer shall have received written notification
from Toronto Dominion (Texas), Inc., in form and substance reasonably
satisfactory to Buyer, that upon receipt of such amount as is specified in such
notification, Toronto Dominion (Texas), Inc. will promptly release all Liens it
holds on any of the shares or Assets of any of the Companies.
(i) TRANSFER OF SINGLE SHARES. The single shares described in the final
two sentences of Section 3.3.1 shall have been transferred to the Sellers, to be
transferred to Buyer together with the remaining Shares.
ARTICLE 7
CONDITIONS OF SELLERS' OBLIGATIONS
The obligation of the Sellers to complete Closing is subject to the
satisfaction or written waiver by the Sellers' Representative of each of the
following conditions:
7.1 PERFORMANCE BY BUYER. Buyer will have performed in all material
respects all of its obligations hereunder and under each of the Additional
Agreements.
7.2 TRUTH OF REPRESENTATIONS AND WARRANTIES. Each of Buyer's
representations and warranties made pursuant to this Agreement or to any
Additional Agreement will be true and complete in all material respects and will
have the same effects whether made at or prior to the date of transfer of the
Shares.
7.3 NO GOVERNMENTAL PROCEEDINGS. As regards Buyer, there will not exist any
provision of applicable Laws nor any Judgment preventing completion of the
transactions contemplated herein or in any Additional Agreement, questioning the
legality or validity of such transactions or claiming damages resulting from
such transactions, nor any pending or threatened proceeding in which any Person
seeks or may take any such action. None of the Parties to this Agreement will
have been notified of the firm and nonappealable intention of the applicable
authority by which the consummation of this Agreement is prohibited.
7.4 BAHIA BLANCA CLOSING. The closing of the transactions contemplated
under the Bahia Blanca Agreement shall have occurred and Sellers shall have
received payment in full of the purchase price thereunder.
7.5 ING COMFORT LETTER. Sellers shall have received a comfort letter from
ING, in form and substance acceptable to Sellers, stating that ING will use its
best efforts to be ready to loan to Buyer on the Closing Date the entire
purchase price under the Santa Fe Agreement by Buyer.
7.6 SANTA FE AGREEMENT. The Santa Fe Agreement shall have been executed and
shall be in full force and effect, and the initial payment of US$2,176,405.00
under the Santa Fe Agreement shall have been paid in full by wire transfer as
provided in Schedule 2.6.
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ARTICLE 8
CONFIDENTIALITY
8.1 GENERAL. Any information or document that any Party hereto provides to
the other Party or that a Party develops in the course of completing the
transactions contemplated herein, with the exception of information or documents
that are publicly available other than through a breach by the disclosing Party
of any agreement with the Seller or Buyer, will be treated as confidential and
proprietary and will not be disclosed to any third party, with the exception of
investment banks and other consultants who agree in writing to comply with this
Section 8.1 or as otherwise consented to in writing by the Seller or Buyer, as
applicable. The Parties will attempt to identify any and all confidential
information specifically as such. The Party infringing confidentiality as agreed
herein will indemnify the other Party to the extent of the damages which were
caused.
8.2 PUBLIC ANNOUNCEMENTS. Neither Seller nor Buyer will issue any press
release or make any other public disclosure relating to the transactions
contemplated herein without the prior written consent in each instance of the
other. Section 8.1 and this Section 8.2, however, will not apply to or limit any
Party's ability to make such public announcements or disclosures as it may
consider necessary or appropriate pursuant to the reporting requirements under
U.S.A. securities Laws or other applicable Law. Also excepted from Section 8.1
and this Section 8.2 are the annual and other periodic reports and financial
statements legally prepared and released in the ordinary course of business by
the Parties hereto.
ARTICLE 9
SURVIVAL; INDEMNIFICATION
9.1 SURVIVAL. Sections 2.1, 2.2, 2.3, 2.4, 2.5, 2.6, and Articles 8, 9, and
11 hereof will survive Closing and will not cease except when expressly provided
therein. The provisions of this Agreement, including all representations and
warranties of the Parties hereto and any certificate delivered pursuant to this
Agreement, will survive Closing and will terminate on the earlier of 30 days
after completion of the audit of Buyer's financial statements for the year ended
December 31, 1998 or June 30, 1999. The obligation to indemnify will apply to
any of the foregoing matters for any claim made prior to the expiration of the
limitation period that was not resolved within said period of time.
Notwithstanding the foregoing, the provisions under Section 9.3 shall survive
the Closing and will remain in full force and effect for a period of five years
thereafter.
9.2 INDEMNIFICATION.
(a) Each of the Sellers agrees to indemnify Buyer with respect to any
loss, claim, damage, liability (or actions or procedures in relation to these)
and expenses that Buyer, the entities controlling, controlled by or under common
control with it, officers, employees, shareholders and advisors (henceforward
the "Indemnified Persons") may have suffered in relation to or arising out of:
(i) the inaccuracy when made of any representation and warranty
made by Sellers in or pursuant to this Agreement, but only to the
extent that the event or circumstance that caused such representation
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and warranty to be inaccurate first occurred or existed after Seller's
acquisition of the Company with respect to which such representation
and warranty was inaccurate;
(ii) non-performance on the part of any of the Sellers of any
obligation made in this Agreement or the Additional Agreements; or
(iii) any failure by an Operating Company to comply with labor
and social security Laws after the Majority Ownership Date of such
Operating Company and before the Closing.
(b) Immediately after receipt by an Indemnified Person of notice of any
action, proceeding, claim, or potential claim (an "Asserted Claim") that could
give rise to a right to indemnification under this Agreement, the Buyer will
give the Sellers' Representative written notice of the Asserted Claim. Delay in
giving this notice will not affect the Indemnified Party's right to
indemnification to the extent it is demonstrated that the interests of the
Sellers have not been prejudiced due to such delay.
(c) The Sellers' Representative may assume and control the defense of
such Asserted Claim (with counsel reasonably acceptable to the Indemnified
Person) if it affirms the obligation of the Sellers to indemnify the Indemnified
Person with respect to such Asserted Claim. Notwithstanding the foregoing, the
Indemnified Person will have the right to hire its own counsel and to control
the defense or settlement in any such action, at the expense of the Sellers if
(i) the action involves a conflict of interest between the Indemnified Person
and the Sellers, (ii) the Sellers' Representative has not assumed such defense
to the reasonable satisfaction of Buyer within a reasonable time after receiving
notice of the Asserted Claim from Buyer or (iii) the Asserted Claim could have a
Material Adverse Effect on the business of Buyer. The Sellers' Representative
agrees to cooperate with the Indemnified Persons in order to enable their
counsel to participate in the defense and to deliver to the Indemnified Persons
copies of all pleadings and other information within the Sellers'
Representative's knowledge or possession reasonably requested by the Indemnified
Persons that is relevant to the defense of any such claim or demand. The
Sellers' Representative will maintain confidentiality with respect to all such
information consistent with the conduct of a defense hereunder.
(d) Neither the Indemnified Person nor the Sellers' Representative may
consent to the rendering of a judgment with respect to the Asserted Claim or
enter into a settlement with respect to the Asserted Claim if such judgment or
settlement does not unconditionally release the Sellers or the Indemnified
Person, as the case may be, from all liability with respect thereto without the
consent of such Party. Such consent cannot be unreasonably withheld.
(e) Notwithstanding any other provision of this Agreement, (i) Sellers'
indemnification obligations will not apply until the cumulative amount of
Buyer's indemnifiable claims exceed US$100,000, (ii) in no event will Sellers'
indemnification obligation under this Agreement exceed US$4,858,405, except for
a breach arising from Sellers' inability to transfer the Shares, and (iii)
Buyer's sole remedy for any breach of this Agreement or inaccuracy of any
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representation or warranty made in or pursuant to this Agreement shall be
indemnification pursuant to this Article Nine.
(f) The provisions of paragraphs (a) through (e) of this Section 9.2
also shall apply to the Buyer as an indemnifying party and the Sellers, their
Affiliates, and their respective officers, employees, shareholders and advisers
as Indemnified Persons, with references therein to Buyer being read as
references to the Sellers and all references to the Sellers or the Sellers'
Representative being read as references to the Buyer. Such indemnification
obligations of the Buyer also shall apply to any loss, claim, damage, liability
and expenses suffered by any of the Sellers with respect to Sellers' guarantees
of indebtedness incurred in connection with the Sellers' acquisition of the
Companies, and the limitation on damages set forth in clause (ii) of Section 9.2
(e) shall not apply to such indemnification obligation or to any failure by
Buyer to pay the Purchase Price on the date hereof as required hereunder.
9.3 INDEMNIFICATION AGAINST CLOSING DATE LIABILITIES.
(a) The Sellers jointly and severally agree to indemnify the Buyer
against, and reimburse the Buyer for, any amount by which the total payments by
the Companies after the Closing Date of obligations which existed at the Closing
Date or relate to periods prior to the Closing Date (net of any amounts
collected out of escrow accounts referred to in the definition of Closing
Liabilities), whether or not the payments are of liabilities known to the
Sellers or the Companies on the Closing Date, exceed the Closing Liabilities
included in the calculation of the Purchase Price made as provided in Section
2.4. The amount of indemnification will be adjusted to reflect the extent to
which the Buyer acquires less than 100% of the shares of an entity that makes
payments for which the Buyer is entitled to indemnification or reimbursement
under this Section 9.3(a). Any payments to the Buyer under this Section will (i)
be made promptly after demand by the Buyer accompanied by documentation of the
amounts paid by the Companies which shows the payment to be due and (ii) be
treated as adjustments of the Purchase Price.
(b) If any of the Companies receives a claim with regard to a
liability, or claimed liability, which existed at the Closing Date or relates to
a period prior to the Closing Date and was not included (or exceeds the amount
which was included) in the Closing Liabilities included in the calculation of
the Purchase Price, the Buyer will promptly notify the Sellers' Representative
of the claim and the fact that the Buyer intends to treat any amount paid with
regard to the claim as a payment to which Section 9.3(a) applies. If the
Sellers' Representative informs the Buyer that the Sellers acknowledge that any
payment with regard to the claim will be a payment to which Section 9.3(a)
applies and that the Sellers either (i) wish to contest the claim, (ii) want to
seek reimbursement out of an escrow account referred to in the definition of
Closing Liabilities with regard to any amount due as a result of the claim or
(iii) want to seek indemnification or other recovery related to such claim under
an Applicable Purchase Agreement or related agreement, the Sellers may, at their
expense, contest the claim or seek reimbursement out of the escrow account or
other recovery. The Buyer will cooperate, and will cause the Companies to
cooperate, in all reasonable respects in the Sellers' efforts to do that, and
the Sellers will reimburse the Buyer for all out-of-pocket costs it or any of
the Companies incurs in doing so. To the extent the Sellers recover
reimbursement out of an escrow account for a sum due as a result of a claim, the
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Sellers will pay the amount of the reimbursement to the Buyer or the applicable
Company, and the amount paid to the Buyer or a Company will be included in the
calculation of any amount due under Section 9.3(a). Sellers will be subrogated
to all rights of any Company to the extent that Sellers pay any amount under
this Section 9.3.
ARTICLE 10
[INTENTIONALLY OMITTED]
ARTICLE 11
GENERAL PROVISIONS
11.1 NOTICES. All notices hereunder shall be made (i) by delivery of same
in person to the intended addressee, (ii) by sending such notice by Federal
Express or another reputable private international courier service (a "Qualified
Courier") for overnight (or its nearest equivalent) delivery to the intended
addressee or (iii) by facsimile transmission to such Party at the facsimile
number set forth for such Party below provided that a copy of same is deposited
with a Qualified Courier for overnight delivery to the intended addressee, in
each case for delivery to the address of the intended addressee as set forth
below (or as such other address or fax number as may be designated by such Party
as herein provided) to the officers mentioned hereinafter:
If to Sellers to Sellers' Representative: If to the Buyer:
UIH Latin America, Inc. Supercanal S.A.
4643 South Ulster, Suite 1300 Godoy Cruz 316
Denver, Colorado 80237 Mendoza
Attn.: President Argentina
Tel: (303) 770-4001
Fax: (303) 770-4207
Copies to: Copies to:
UIH Argentina, Inc. Estudio Vila
Cerrito 740, piso 14 Espejo 333, P.B. of. 4 a 6
1309 Buenos Aires Mendoza
Attn.: Bradley Johnson and/or Attn: Alberto Vila
Roberto H. Crouzel Tel: 011-54-61-254202
Tel: (541) 372-5100 Fax: 011-54-61-295042
Fax: (541) 372-1990
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United International Holdings, Inc. Marval, O'Farrell & Mairal
4643 South Ulster, Suite 1300 L.N. Alem 928
Denver, Colorado 80237 (1001) Buenos Aires
Attn.: General Counsel Argentina
Tel: (303) 770-4001 Tel: (54-1) 310-0100
Fax: (303) 770-4207 Fax: (54-1) 310-0200
W. Dean Salter, Esq.
Holme Roberts & Owen LLP
1700 Lincoln, Suite 4100
Denver, Colorado 80203
Tel: (303) 861-7000
Fax: (303) 866-0200
All notices, summons and requests will be effective upon such personal
delivery or upon confirmation of delivery by facsimile transmission provided
that delivery to the Qualified Courier is effected within three business days
thereafter. In all other cases, notices, summons and requests will be effective
three business days after having been deposited with Qualified Courier for
overnight (or its nearest equivalent) delivery. Rejection or other refusal to
receive, or the inability to deliver, because of changed address of which no
notice was given as herein required will be deemed to be receipt of the notice,
summons or request sent.
11.2 FURTHER ASSURANCES. The Parties will make, execute and deliver such
other instruments of transfer as may be necessary or proper to transfer to Buyer
all right, title and interest in the Shares, free of any Restriction or Lien.
11.3 HEADINGS. The Article and Section headings in this Agreement are for
convenience only and will not be used for interpretation hereof nor considered
part of this Agreement.
11.4 COUNTERPARTS. This Agreement may be executed in any number of
counterparts or counterpart signature pages, each of which will be deemed an
original but all of which, together, will constitute one and only instrument.
11.5 AMENDMENTS. No provision of this Agreement will be altered, amended,
revoked or waived except by an instrument in writing designated as an amendment,
revocation or waiver and signed by the person against whom it is sought to be
enforced.
11.6 ASSIGNMENT. This Agreement and all Additional Agreements will be
binding upon and inure to the benefit of the Parties. Except for assignments to
Affiliates, neither Party will assign any of its rights under this Agreement nor
delegate its duties hereunder unless it obtains prior written consent of the
other Party. For any assignment under the preceding sentence, the assignee, as a
condition to the effectiveness of such assignment, must assume all obligations
hereunder, with respect to the Company assigned, as co-obligor with Buyer.
11.7 ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES. This Agreement and the
Additional Agreements embody the entire agreement between the Parties concerning
the subject matter hereof and thereof. Such Agreements replace and take the
place of any other prior or contemporaneous negotiations, agreements and
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understandings. The Indemnified Persons are third-party beneficiaries of Article
9.2 hereof. Otherwise, there are no third party beneficiaries.
11.8 NO WAIVER. Failure or delay of any Party at any time or from time to
time to exercise any right under or enforce any provision of this Agreement will
not be construed as implying a waiver of such provision or of that Party's right
to exercise or enforce it subsequently. No single or partial exercise of any
right hereunder by any Party will preclude the further or full exercise of the
right by such Party. No waiver of any default on any one occasion by a Party
will constitute a waiver of any subsequent or other default by such Party.
11.9 SEVERABILITY. If any provision of this Agreement or the applications
thereof to any Person or circumstance were invalid or unenforceable to any
extent, the remainder of this Agreement, and the application of such provision
to other Persons or circumstances, will not be affected thereby and will be
enforced to the greatest extent permitted by applicable Law. In such case, the
Parties will amend this Agreement to effect, to the fullest extent possible
under applicable Laws, the original intent of the Parties with respect to such
invalid or unenforceable provision.
11.10 GOVERNING LAW. This Agreement, the rights and obligations of the
Parties hereto, and any claims or disputes relating thereto will be governed by
and construed in accordance with the Laws of Colorado.
11.11 DISPUTE RESOLUTION. Any dispute, controversy or claim arising out of
or relating to this Agreement or any Additional Agreement will be resolved by
the state courts of COLORADO or the federal courts located within the STATE OF
COLORADO. The Parties consent to personal jurisdiction of such courts in any
such disputes. Buyer consents to service of process through notice given under
Section 11.1 of this Agreement in connection with any such dispute and waives
any other requirements for service of process.
11.12 EXPENSES. Each Party will pay its own expenses incurred in connection
with the preparation, negotiation and execution of this Agreement and any
Additional Agreements.
11.13 SELLERS. Each of the Sellers hereby appoints the Sellers'
Representative as his or her agent to make decisions and take any action on
behalf of such Seller in connection with this Agreement.
11.14 NONCOMPETITION.
(a) During the period commencing at the Closing and ending on the date
which is 10 (ten) years after the Closing Date, none of the Sellers, nor any
Affiliate thereof will, directly or indirectly, own, manage, operate, control or
engage or participate in the ownership, management, operation or control of, or
be connected as a stockholder, director, officer, agent, partner, consultant,
joint venturer or otherwise with, any business or organization which engages in
the business of owning, providing, distributing or operating in the Republic of
Argentina (i) any cable television system or service, satellite master antennae
or MMDS or UHF system or service, any direct broadcast satellite system or
service or any telephone internet access, data service, or (ii) without the
prior written consent of Buyer, any service or product related to cable
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television (other than provision of programming), telephony or any other
communication business. Sellers and their Affiliates shall not be deemed in
violation of this paragraph (a) if through ownership of up to 5% of the stock of
a publicly-traded company that engages in the activities described above.
(b) Each of the Sellers shall keep confidential all
proprietary information which they have obtained or receive in the future with
respect to the Companies and their Affiliates and the cable television systems
and other business owned and operated by them, except to the extent required by
applicable Law or during the course of or in connection with any litigation,
arbitration or other proceeding based upon or in connection with the subject
matter of this Agreement and except as Sellers may consider appropriate pursuant
to disclosure obligations under U.S. securities Laws. In the event that any of
the Sellers is requested pursuant to or required by applicable Law, regulation
or legal process to disclose any of the foregoing confidential proprietary
information, he or she will notify Buyer promptly so that Buyer may seek a
protective order or other appropriate remedy or, in such Person's sole
discretion, waive compliance with the terms of this Section, the relevant Seller
will furnish only that portion of the foregoing confidential proprietary
information which he or she is advised in writing by his or her counsel is
legally required and will exercise all commercially reasonable efforts to obtain
reliable assurance that confidential treatment will be accorded to such
confidential proprietary information. For purposes of this Section 11.14(b),
proprietary information does not include information that became generally
available to any Seller on a non-confidential basis from a source other than
Buyer, provided that such source is not bound by a confidentially agreement
with, or other contractual, legal or fiduciary obligation of confidentiality to
Buyer.
* * * * *
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IN WITNESS HEREOF, two copies of the same effect are executed on the date
set forth on page 1.
SELLERS
UIH ARGENTINA, INC.
/S/ DAVID LEONARD
- -----------------------------------
By: DAVID LEONARD
Its: President
UNITED INTERNATIONAL HOLDINGS
ARGENTINA, S.A.
/S/ BRADLEY JOHNSON
- -----------------------------------
By: BRADLEY JOHNSON
Its: President
SUPERCANAL HOLDING S.A.
/S/ DANIEL VILA
- -----------------------------------
By: DANIEL VILA
Its: President
AMENDED AND RESTATED
STOCK PURCHASE AGREEMENT
DATED OCTOBER 20, 1997
AMONG
Supercanal Holding S.A., an Argentine corporation (the "Buyer"), and UIH
Argentina, Inc., a Colorado corporation ("UIHA"), and CV American Holdings
L.L.C., a Delaware limited liability company ("CVAH" and, together with UIHA,
the "Sellers"). The Sellers and the Buyer are jointly referred to as the
"Parties."
RECITALS
Supercanal, United International Holdings Argentina, S.A., an Argentine
corporation ("UIH"), UIHA, CVAH, and UIH Latin America, Inc., a Colorado
corporation ("UIHLA"), are parties to that certain Stock Purchase Agreement
dated as of September 9, 1997 (the "Existing Stock Purchase Agreement"). It is
the desire of such parties to amend and restate the Existing Stock Purchase
Agreement in order to (1) delete therefrom all references to the Bahia Blanca
Operating Companies, the Comodoro Operating Companies, the Bahia Blanca Holding
Companies, and the Comodoro Holding Companies, all of the capital stock of which
will be sold pursuant to separate stock purchase agreements; (2) to modify
certain provisions relating to the Closing and the Closing Date (in each case as
defined in the Existing Stock Purchase Agreement); (3) to provide for the
payment of interest with respect to the purchase of the Santa Fe Companies (as
defined in the Existing Stock Purchase Agreement) and the Holding Company; and
(4) to make certain conforming and other modifications. It is the understanding
of the Parties that this Amended and Restated Stock Purchase Agreement will
become effective immediately when it has been properly executed and delivered by
all of the Parties, except that the amendments hereby made to the Existing Stock
Purchase Agreement with respect to the rights and obligations relating to the
Bahia Blanca Operating Companies and the Bahia Blanca Holding Companies will
become effective only when the closing of the purchase and sale of the stock of
the Bahia Blanca Operating Companies, and the Bahia Blanca Holding Companies has
been consummated and the purchase price has been paid as provided thereunder
(the "Bahia Blanca Purchase Date"). Until such time, all obligations of Buyer
under the Existing Stock Purchase Agreement related to the Bahia Blanca
Operating Companies and the Bahia Blanca Holding Companies shall remain in full
force and effect until the Bahia Blanca Purchase Date.
The Sellers are the owners of the shares of stock of the Argentine companies set
forth on Schedule I, in proportion and quantities that are detailed on Schedule
I and Buyer is interested in acquiring such shares, pursuant to the terms and
conditions of this Agreement.
In a transaction contemporaneous with the transactions contemplated by this
Agreement, UIHA may acquire certain shares (the "Local Group Shares") of certain
Argentine companies set forth on Schedule I from Messrs. Juan Antonio Priano
("Priano") and Marcelo Serrao ("Serrao") pursuant to the terms and conditions of
a separate stock purchase agreement (the "Local Group Purchase Agreement") to be
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executed on the same day as this Agreement. Upon the closing of such acquisition
by UIHA, UIHA will immediately sell the Local Group Shares to Buyer under this
Agreement.
In consideration of the terms and covenants contained herein, the Parties agree
as follows:
ARTICLE 1
DEFINITIONS
As used herein, the following terms have the following meanings (terms defined
in singular to have the same meanings when used in plural and vice versa):
ADDITIONAL AGREEMENTS: Any agreement, instrument, certificate or other document
executed or delivered pursuant to this Agreement including, without limitation,
any Contract and any other documents (except opinions) delivered to Buyer
pursuant to Article 6 .
AFFILIATE: Affiliate of a Person will mean, unless otherwise specified, any
entity that directly or indirectly, through one or more intermediaries,
controls, is controlled by or is under common control with the Person. For
purposes of this definition the term "control" means effective management
control of the Person including, without limitation, control through the power
to elect a sufficient number of directors or to appoint a sufficient number of
senior managers to obtain control or similar powers. A Person will be rebuttably
presumed to control another Person or entity if it owns 50% or more of the
equity or the voting power of the applicable entity.
AGREEMENT: This Stock Purchase Agreement (including the Exhibits and Schedules
attached hereto).
APPLICABLE PURCHASE AGREEMENTS: The purchase agreements under which the Sellers
acquired their ownership interests in the Companies.
ASSETS: For any Person, all of the properties, Equipment, Systems, Licenses,
marks, commercial names, intellectual property rights, and other assets,
privileges, rights, interest, claims and goodwill of such Person, real and
personal, tangible and intangible, owned, leased or otherwise used by such
Person.
BAHIA BLANCA AGREEMENT: That certain Stock Purchase Agreement, dated as of
October 17, 1997, by and among the Sellers and Multicanal S.A., an Argentine
corporation, with respect to the sale of the shares of stock of certain
Argentine corporations operating in Bahia Blanca.
BAHIA BLANCA HOLDING COMPANIES: Inversora TV Cable, S.A., Compania
Teleinversora, S.A., Inversora Multivision, S.A., and Compania Cableinversora,
S.A., each an Argentine corporation.
BAHIA BLANCA OPERATING COMPANIES: TV Cable S.A., Cable Total S.A., Cable DU-KE
S.A., Multivision S.A, and Cerri Video Cable, S.A., each an Argentine
corporation.
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BUSINESS DAY: Any day on which banks in the State of New York, U.S.A., and in
the city of Buenos Aires, Argentina, are not required or authorized to be closed
by law.
CLOSING: As defined in Section 2.2 of this Agreement.
CLOSING DATE: As defined in Section 2.2 of this Agreement.
CLOSING LIABILITIES: All obligations, net of any amounts in escrow accounts to
provide for any such obligations, of each of the Companies at the Closing Date
that are or should be included as liabilities on the consolidated balance sheet
of the Companies as of said date in accordance with generally accepted
accounting principles in Argentina.
CLOSING CURRENT ASSETS: All assets of each of the Companies at the Closing Date
(net of any amounts in escrow accounts referred to in the definition of Closing
Liabilities) that are or should be included as current assets on the
consolidated balance sheet of the Companies as of said date in accordance with
generally accepted accounting principles in Argentina.
COMFER: The Argentine Comite Federal de Radiodifusion.
COMODORO AGREEMENT: That certain Stock Purchase Agreement, dated as of October
20, 1997, by and among the Sellers and Buyer with respect to the sale of the
shares of stock of certain Argentine corporations operating in Comodoro
Rivadavia and Trelew.
COMODORO HOLDING COMPANIES: Inversora Atelco Comodoro, S.A., and Inversora
Antena Comunitaria Trelew S.A., each an Argentine corporation.
COMODORO OPERATING COMPANIES: Atelco, S.A., and Antena Television Comunitaria,
S.A., each an Argentine corporation.
COMPANIES: The Holding Company and the Operating Companies.
CONTRACTS/COMMITMENTS: For any Person, any contract, mortgage, deed of trust,
bond, lease, license, note, franchise, certificate, option, warrant, right, or
such other instrument, document or written agreement, and any oral obligation,
right or agreement to which such Person is a party and/or beneficiary and/or
obligee and/or subscriber and/or by which such Person and/or any Assets or
securities of such Person are or may be bound, including, without limitation,
any License.
CVI SHAREHOLDERS AGREEMENT: Shareholders Agreement dated April 25, 1997, among
UIH Argentina, Inc., Southern Cone Telecommunications, Ltd., CV American
Holdings, LLC, Priano and Serrao.
EQUIPMENT: Equipment includes, but is not limited to, electronic devices, trunk
and distribution cables; amplifiers; power supplies; conduit; cables and
pedestals; grounding and pole hardware, installed subscriber devices (including,
without limitation, drop lines, converters, encoders, transformers behind
television sets and fittings); "headend" (origination, transmission and
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distribution system); hardware; tools; inventory; spare parts; maps and
engineering data; vehicles; microwave equipment; studios and other broadcast
facilities and other equipment for local programming; and all other tangible
property and facilities owned, used or held for use by the Operating Companies
in the Systems of the Companies.
EXISTING STOCK PURCHASE AGREEMENT: That certain Stock Purchase Agreement, dated
as of September 9, 1997, by and among Supercanal, UIH, UIHA, CVAH, and UIHLA.
GOVERNING DOCUMENTS: The bylaws (estatutos), articles or certificate of
incorporation or association, or other governing documents which may be
mandatory in any entity.
GOVERNMENTAL AUTHORITY: Any court, administrative agency or commission, or any
other governmental organization, or any other governmental or quasi-governmental
agency, instrumentality or official, domestic or foreign.
HOLDING COMPANY: CV Inversiones S.A., an Argentine corporation.
JUDGMENT: Any judgment, writ, order, decree or ruling of or by any court, judge
or magistrate, including any bankruptcy court or judge.
LAW: The civil and commercial law and any statute, ordinance, code or other law,
rule, regulation, order, technical or other standard, requirement or procedure
adopted and in effect in the Argentine Republic or its political subdivisions.
LICENSES: All concessions, licenses, permits, operating authorizations and other
agreements and approvals from Governmental Authorities, providers of programming
or other entities and all material rights-of-way, satellite, microwave or other
transmission agreements, pole or underground construction or usage agreements
and all other agreements necessary to construct, own and operate a System in a
specified geographical area in compliance with applicable Laws.
LIEN: Any security agreement, financing statement (whether filed or not),
conditional sale or other title retention agreement, any lease, consignment or
bailment given for security purposes, any lien, charge, limitation, restrictive
agreement, mortgage, pledge, option, encumbrance, adverse interest, constructive
trust or other trust, claim, legal custody, exception to or defect in title or
other ownership interest (including, without limitation, reservations, rights of
entry, possibilities of reverter, encroachments, easements, rights of way,
restrictive covenants, leases and Licenses) of any kind.
LOCAL GROUP PURCHASE AGREEMENT: The agreement pursuant to which one or more of
Sellers or their Affiliates agree to purchase the Local Group Shares. Such
agreement shall be substantially as set forth in the form attached hereto as
Exhibit B-1.
LOCAL GROUP SHARES: The shares of the Companies owned by Priano and Serrao and
acquired by one or more Sellers or their Affiliates pursuant to the Local Group
Purchase Agreement. The transfer of the Local Group Shares implies the transfer
of all of the Rights relating thereto.
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MATERIAL ADVERSE EFFECT: Material Adverse Effect means any event, change,
occurrence or condition, singly or together with any other event, change,
occurrence or condition that would have a material adverse effect on the
condition, financial or otherwise, of a Person.
OPERATING COMPANIES: Cablevideo S.A., Cablevision Galvez, S.A. and Radio Satel,
S.A.
OPTIONS: All options to acquire equity interests of entities in the multichannel
subscription television business in the provinces of Santa Fe or Entre Rios,
Argentina, now held by the Holding Company.
PERSON: Any natural person, sociedad anonima, sociedad de responsabilidad
limitada, corporation, general or limited partnership, joint venture, trust,
association, entities of any kind (with or without legal existence) or
Governmental Authority or other persons.
PURCHASE PRICE: The Purchase Price will equal the following:
(a) The aggregate amount for all of the Companies (calculated without
duplication) of the following amount for each Company:
(i)(A) the total number of Subscribers of such Company at the Closing
Date multiplied by US$1,500, (B) less the Closing Liabilities of such
Company, (c) plus the Closing Current Assets of such Company;
(ii) multiplied by the total percentage ownership of such Company
being transferred pursuant to this Agreement.
For example, suppose Company A is a seller and owns 80% of the shares of Company
B and Company B owns 90% of Company C. Company B has no Subscribers, US$25 of
Closing Liabilities and US$5 of Closing Current Assets. Company C has 10
Subscribers, US$100 of Closing Liabilities and US$20 of Closing Current Assets.
In this case, clause (a) of the definition of Purchase Price would be applied as
follows:
-- The amount for Company C would be (10 x US$1,500) minus US$100
plus US$20, all multiplied by 72%, for a total of US$10,742.40.
-- The amount for Company B would be ($20) multiplied by 80% or
($16).
-- The total amount for these two companies under clause (a) would
be US$10,726.40.
REAL PROPERTY: For any Person, all realty, towers, fixtures and other interests
in real property, buildings, improvements and construction-in-progress owned,
leased, occupied, used or held for use by such Person.
REQUIRED CONSENTS: As defined in Section 3.2.2 hereof.
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RESTRICTION: With respect to any stock, any voting or other trust or agreement,
option, warrant, escrow, proxy, buy-sell or other share transfer agreement,
power of attorney or other Contract, arrangement or understanding, Judgment or
Law that (i) grants to any person the right to purchase or otherwise acquire, or
obligates any person to sell or otherwise dispose of, or otherwise results or
may result (with or without the passage of time, the payment of money or the
occurrence of any other event) in any Person acquiring any such stock, any
interest in or proceeds or distributions of any such stock, (ii) restricts or
may restrict the transfer of or the exercise of any voting rights or the
enjoyment of any other benefits arising by reason of ownership of any such
stock, proceeds or distributions, or (iii) creates or may create a lien or a
purported lien affecting such stock, proceeds or distributions.
RIGHTS: Collectively, (A) the right to any dividend of any of the Companies, in
cash or in kind, declared but not distributed as of the Closing Date, (B) all
the rights arising from revocable or irrevocable capital contributions made by
Sellers to the Companies prior to the Closing Date that have not been
capitalized (or the capitalization of which has not yet been effected), (C) all
credits that the Sellers may have against the capital of the Companies as of the
Closing Date, (D) all rights to subscribe to the Companies' capital increases as
of the Closing Date, and (E) any other rights to be paid in as of the Closing
Date.
SELLERS' REPRESENTATIVE: UIHLA or such other Person as the Sellers may designate
in writing in the future. The Sellers grant the Sellers' Representative
sufficient power to interpret and/or modify this Agreement and to sign any
agreement related to the same.
SHARES: The shares of the Holding Company's capital stock, and the shares of any
Operating Company's capital stock held directly by any Seller, set forth on
Schedule I to be purchased by the Buyer from the Sellers pursuant to this
Agreement, which will constitute all of the outstanding capital stock and voting
power of the Holding Company or each such Operating Company, as applicable,
owned by the Sellers. The transfer of the Shares implies the transfer of all of
the Rights.
SUBSCRIBER: Any person that, at the relevant date for the calculation of the
number of Subscribers, is connected to the services furnished by the Company,
and with respect to whom condition (i) below and one of conditions (ii) and
(iii) below is met.
(i) the services furnished by the Company to that person have been
invoiced on a monthly basis at a time consistent with the system's past
practices;
(ii) if services had been furnished for a period for which more than
two invoices have been issued, no debt in respect of a monthly invoice,
other than the three monthly invoices due prior to such date is outstanding
(including debt outstanding under a refinancing plan) or have been released
or otherwise discharged without payment since August 1, 1997, PROVIDED,
HOWEVER, that a person owing any such invoice under a refinancing plan of
which at least THREE installments have been paid at that date and who is
not in arrears with respect to any installment thereof will be considered a
Subscriber; and
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(iii) if services had been furnished for a period shorter than the
period contemplated in (ii) above, that person has paid either (a) a
connection charge not lower than 50% of the system's regular monthly charge
or (b) a monthly invoice in advance.
If a person has been connected to the services under a temporary sale
promotion, that person shall be counted as a fraction of subscriber in the same
proportion as the monthly charge paid by that person bears to the then regular
monthly charge. For the purposes hereof "temporary sale promotion" shall mean,
with respect to any system, any temporary discount, rebate or other reduction in
the system's monthly charge for the purpose of gaining new subscribers for the
system, and "regular monthly charge" shall mean, with respect to any system, the
monthly charge invoiced to the persons connected to that system under no such
promotion or other preference, as shown in the relevant management reports. For
systems that normally offer a discount for invoices paid within a specified
time, the discounted amount shall be deemed to be the regular monthly charge.
If a person connected to the services enjoys a preference charge, that
person shall be counted as a fraction of subscriber in the same proportion as
the monthly charge paid by that person bears to the then regular monthly charge.
For the purposes hereof "preference charge" shall mean, with respect to any
system owned by the Company, any charge lower than the regular monthly charge
(as defined above) provided for by the Company under any program other than a
temporary sale promotion.
If a person connected to the services pays more than the regular monthly
service charge, then that person shall be counted as more than one subscriber in
a manner comparable to that used above for persons who pay less than the regular
monthly charge.
SYSTEM: A complete multi-channel subscription television reception and
distribution system consisting of one or more head-ends, trunk cable, subscriber
drops and associated electronic equipment that is or is capable of being
operated as an independent system without interconnections to other systems.
TAX: Any tax or payment of any kind required pursuant to any Law, to be paid to
any Governmental Authority.
TITLE DOCUMENTS: Any deed, grant of easement, certificate of title or other
document which confirms or vests title or ownership of any property or any
interest in Assets in any Person.
US$: United States Dollars.
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ARTICLE 2
PURCHASE OF STOCK
2.1 PURPOSE OF AGREEMENT.
(a) On the Closing Date, the Sellers agree to sell, assign and transfer
to the Buyer and the Buyer agrees to purchase, pursuant to the terms and
conditions of this Agreement, the Shares.
(b) If one or more of the Sellers or their Affiliates acquire any of
the Local Group Shares at or before the Closing, then the Buyer agrees to buy
such Local Group Shares at the Closing and Sellers agree to sell them at the
Closing to the Buyer. In that event, Sellers or such Affiliates will transfer to
the Buyer their rights under the Local Group Purchase Agreement at the Closing;
such transfer will be made pursuant to an assignment agreement substantially in
the form attached hereto as Exhibit B-2.
(c) This Agreement includes (i) the transfer by Sellers to Buyer of all
of the Rights arising on the Closing Date and (ii) the assignment by Sellers to
Buyer of all of Sellers' rights and obligations under the Applicable Purchase
Agreements, to the extent such rights and obligations are assignable under the
respective terms of such Applicable Purchase Agreements.
2.2 CLOSING.
(a) The Closing of the purchase and sale of the Shares and, if
applicable, the Local Group Shares (the "Closing") will occur on October 29,
1997 at 1:00 p.m. Buenos Aires time. The Closing shall take place at the offices
of Estudio Beccar Varela, Buenos Aires, Argentina.
(b) At the Closing (i) the Sellers will deliver to the Buyer any and
all certificates representing the Shares and, if applicable, the Local Group
Shares, and will take all necessary acts to perfect the transfer of the Shares
and, if applicable, the Local Group Shares, and note in the name of the Buyer
and/or the company that the Buyer may designate the transfer in the Companies'
Stock Registry Books, free of Liens and Restrictions, with the exception of the
authorization provided for in Article 46 clause (f) of the Broadcasting Law, if
applicable, and (ii) UIHA will assign to the Buyer all of its rights under the
Local Group Purchase Agreement.
2.3 PAYMENT OF PURCHASE PRICE.
2.3.1 INITIAL PAYMENT: Upon execution of this Agreement by the Buyer
and the Sellers, the Buyer will pay to the Sellers the sum of US$2,176,405.00 as
partial payment of the Purchase Price.
2.3.2 ESCROW DEPOSIT. US$5,441,014.00 of the Purchase Price (the
"Escrow Deposit") will be paid at the Closing by way of a deposit on behalf of
the Buyer in an escrow account (the "Escrow Account") with Colorado National
Bank N.A. or such other escrow agent as the Parties shall agree, with which an
agreement will be signed substantially in the form attached hereto as Exhibit A
(the "Escrow Agreement"). The Escrow Account will be governed by the terms and
conditions of the Escrow Agreement.
2.3.3 CLOSING PAYMENTS. The remainder of the Purchase Price, determined
pursuant to Section 2.4(a) (the "Closing Payment"), will be paid to the Sellers
at the Closing.
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2.4 DETERMINATION OF PURCHASE PRICE. For purposes of the Closing Payment to
be made pursuant to Section 2.3.3, the Purchase Price will be determined as
follows:
(a) Sellers will deliver to the Buyer, not less than two Business Days
prior to the Closing, a certificate setting forth a good faith estimate, based
on August 31, 1997 numbers, of (A) the total number of Subscribers to the
Companies' Systems as of the Closing Date, (B) the Closing Liabilities, (C) the
Closing Current Assets, and (D) the Purchase Price. The Closing Payment will be
(i) the Purchase Price shown on that certificate, as updated from time to time,
with respect to the Companies (the "Estimated Purchase Price") plus interest
thereon from October 17, 1997 until the Closing at the rate of 14% per annum,
minus (ii) the partial payment described in Section 2.3.1 and minus (iii) the
Escrow Deposit.
(b) Within thirty days after the Closing Date, the Buyer will deliver
to the Sellers' Representative a statement (the "Purchase Price Statement")
showing (i) the number of Subscribers at the Closing Date, (ii) the Closing
Liabilities, (iii) the Closing Current Assets and (iv) the resulting Purchase
Price, and specifying in reasonable detail how each of those items was
calculated. In order to expedite calculation of the Purchase Price, the Sellers
will cooperate with the Buyer prior to the Closing in the Buyer's efforts to
prepare to audit the number of Subscribers at the Closing Date and to determine
the Closing Liabilities and Closing Current Assets. The Buyer will permit the
Sellers' Representative or its designee to participate in the Buyer's audit of
the number of Subscribers at the Closing Date. Schedule 2.4(b) details certain
valuation criteria to be used for auditing or arbitration purposes. If Buyer
does not deliver the Purchase Price Statement within this 30-day period, Buyer
will have no right to assert that the Purchase Price is lower than the Estimated
Purchase Price.
(c) The Purchase Price shown on the Purchase Price Statement will be
deemed to be the final Purchase Price unless, within ten days after it receives
the Purchase Price Statement, the Sellers' Representative delivers to the Buyer
a notice (a "Dispute Notice") stating that the calculation of the Purchase Price
was not correct and specifying in reasonable detail each item on the Purchase
Price Statement that the Sellers' Representative disputes, and the amount in
dispute with regard to each of those items.
(d) If a Dispute Notice is delivered to the Buyer within the ten day
period described in subparagraph (c), the Buyer and the Sellers' Representative
will attempt to reach an agreement within five days after the Dispute Notice is
delivered with regard to each item specified in the Dispute Notice. If the Buyer
and the Sellers' Representative fail to agree within that five day period as to
any items, KPMG Peat Marwick or another firm of accountants agreed upon by the
Buyer and the Sellers' Representative (the "Accountants") will be retained to
resolve the dispute as to those items (with the Buyer and the Sellers each
paying half the cost of the Accountants). The determination of the Accountants
as to each item will be final and binding on the Parties. The final Purchase
Price will reflect all adjustments to the Purchase Price shown on the Purchase
Price Statement that are agreed upon by the Buyer and the Sellers'
Representative or are determined by the Accountants.
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(e) Within three days after the Purchase Price Statement is delivered
to the Sellers' Representative, the Buyer will pay the Sellers the amount, if
any, by which the Purchase Price shown on the Purchase Price Statement exceeds
the Estimated Purchase Price.
(f) Within three days after the Dispute Notice is delivered to the
Buyer (or the time to deliver a Dispute Notice expires without a Dispute Notice
being delivered), the Buyer and the Sellers' Representative will instruct the
Escrow Agent (i) to pay the Buyer the amount, if any, by which, if all the
Disputed Items were resolved in favor of Sellers, the Purchase Price would be
less than the Estimated Purchase Price, or (ii) to pay the Sellers the amount,
if any, by which if all the Disputed Items were resolved in favor of the Buyer,
the Purchase Price would be more than the Estimated Purchase Price minus the
amount of the Escrow Deposit. If, even if all the Disputed items were resolved
in favor of the Sellers, the Purchase Price would be less than the Estimated
Purchase Price minus the amount of the Escrow Deposit, at the same time the
instruction is delivered to the Escrow Agent, the Sellers will pay the Buyer the
amount by which the Purchase Price shown on the Purchase Price Statement plus
the total of all the Disputed Items is less than the Estimated Purchase Price
minus the amount of the Escrow Deposit. If, even if all the Disputed Items were
resolved in favor of the Buyer, the Purchase Price would be more than the
Estimated Purchase Price, at the same time the instruction is delivered to the
Escrow Agent, the Buyer will pay the Sellers the amount by which the Purchase
Price shown on the Purchase Price Statement is more than the Estimated Purchase
Price.
(g) If a Dispute Notice is delivered to the Buyer, within three days
after any disputed item is resolved by agreement of the Buyer and the Sellers'
Representative in a manner that increases the Purchase Price, the Buyer and the
Sellers will instruct the Escrow Agent to pay the Sellers (or, after the entire
Escrow Deposit has been paid to the Sellers, the Buyer will pay the Sellers) the
amount by which the Purchase Price is increased.
(h) Within three days after the final Purchase Price is determined
(whether because the Sellers' Representative did not deliver a Dispute Notice,
because of agreement between the Buyer and the Sellers or because of a
determination of the Accountants), the Buyer and the Sellers' Representative
will instruct the Escrow Agent to pay to the Sellers any amount by which the
final Purchase Price exceeds the payments previously made with regard to the
Purchase Price (including any payment being made under subparagraph (e), (f) or
(g)), and to pay the balance of the Escrow Deposit to the Buyer. If the amount
by which the final Purchase Price is greater than the payments previously made
with regard to the Purchase Price exceeds the balance of the Escrow Deposit
being held by the Escrow Agent, within three days after the final Purchase
Deposit is determined, the Buyer will pay the Sellers an amount equal to the
excess.
(i) When the Purchase Price is finally determined, the income earned on
the Escrow Deposit will be paid to the Sellers and the Buyer in proportion to
the portions of the Escrow Deposit paid to each of them.
(j) If the amount of the Escrow Deposit being held by the Escrow Agent
on December 1, 1997 exceeds US$2,176,405, on December 1, 1997, the Escrow Agent
will pay the excess above US$2,176,405 to the Sellers. If, when the final
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Purchase Price is determined, the amount the Sellers have received with regard
to the Purchase Price, including the sum distributed under this subparagraph on
December 1, 1997, exceeds the final Purchase Price, within three days after the
final Purchase Price is determined, the Sellers will pay the Buyer an amount
equal to the excess.
2.5 EFFECTIVENESS OF PAYMENT AND PERFORMANCE. Each Seller acknowledges that
payment in accordance with Section 2.6 will constitute payment to such Seller.
Buyer acknowledges that Sellers may rely on any written instructions delivered
by Buyer hereunder and that delivery of the Shares in accordance with such
written instructions shall be effective delivery of such Shares hereunder for
all purposes.
2.6 FORM OF PAYMENT. All payments to be made pursuant to this Agreement
shall be made to the Sellers' Representative by wire transfer of immediately
available funds to such bank accounts as are specified by Sellers'
Representative to Buyer in writing at least two Business Days before the
Closing.
2.7 SANTO TOME. UIHA may enter into an agreement to purchase all of the
outstanding stock of Cablevideo Santo Tome S.A. (the "Santo Tome Shares"). Such
an agreement (the "Santo Tome Purchase Agreement") will contain representations
and warranties substantially similar to those set forth in this Agreement, will
have a purchase price determined pursuant to a formula substantially the same
(except for the price per subscriber) as is contained in Clause (a)(i) of the
definition of Purchase Price in this Agreement, and will call for a closing
eight months after the Closing under this Agreement. If UIHA so acquires the
Santo Tome Shares, then immediately thereafter UIHA will sell such shares to
Buyer and Buyer agrees to purchase them at that time. The price for such sale
and purchase will be exactly the same as the price for UIHA's purchase of such
shares pursuant to the Santo Tome Purchase Agreement, except that the amount
contributed to the purchase price for each Santo Tome subscriber to be paid by
Buyer shall be US$950 rather than the amount specified in the Santo Tome
Purchase Agreement (minus closing liabilities and closing current assets in the
same manner as provided in this Agreement). At the Closing of Buyer's purchase
of the Santo Tome Shares from UIHA, Buyer will pay to UIHA the total amount paid
by UIHA under the Santo Tome Purchase Agreement (whether paid to the Local
Group, paid into escrow or otherwise) less the product of (a) the total number
of subscribers to the Santo Tome system as determined in accordance with the
Santo Tome Purchase Agreement, which shall equal the actual number of
subscribers of Santo Tome System computed as of the Closing Date, and (b) the
difference between (i) the price per subscriber paid by Seller for the Santo
Tome Shares less (ii) US$950. UIHA will then assign to Buyer all of UIHA's
rights under the Santo Tome Purchase Agreement and Buyer will assume all of
UIHA's obligations under the Santo Tome Purchase Agreement. In connection with
the sale of the Santo Tome Shares to Buyer, neither UIHA nor any other Seller
make any representation or warranty whatsoever. Buyer's sole rights in that
regard shall be through succession to UIHA's rights under the Santo Tome
Purchase Agreement. If for any reason UIHA does not acquire the Santo Tome
Shares pursuant to the Santo Tome Purchase Agreement, then UIHA shall not be
obligated to sell such shares to Buyer. If UIHA does acquire such shares, then
Buyer's obligation to purchase such shares from UIHA in accordance with this
paragraph shall be absolute and unconditional.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Each Seller represents and warrants, except as disclosed on the annexes and
schedules of the Applicable Purchase Agreements, to Buyer the following. With
respect to each Company, the representations and warranties made by Sellers in
or pursuant to this Agreement apply only to events that occurred after the
Sellers acquired at least majority ownership of such Company ("Majority
Ownership Date"). Accordingly, no such representation and/or warranty will be
deemed to have been untrue or inaccurate when made with respect to any Company
unless (and then only to the extent that) an event that occurred after the
Majority Ownership Date caused such representation and warranty to be untrue or
inaccurate when made. Finally, the representations and warranties set forth
below do not apply to the Local Group Shares. With respect to the Local Group
Shares, the only representations and warranties being made are those set forth
in the Local Group Purchase Agreement, and those are being made only by the
members of the Local Group.
3.1(a) THE SELLERS.
3.1(a)(1). Each of the Sellers is a corporation, sociedad anonima or
limited liability company duly organized and validly existing under the Laws of
the jurisdiction of its incorporation or organization.
3.1(a)(2). This Agreement is a valid obligation, binding on each of the
Sellers, and is enforceable against each of them pursuant to the terms and
conditions hereof. Each Additional Agreement to which any Seller is a party
will, at the Closing, have been duly signed and executed by each of the Sellers
and will be a valid obligation, binding on and enforceable against each of them
pursuant to the terms thereof.
3.1(b) THE COMPANIES.
3.1(b)(1). Each of the Holding Company and the Operating Companies is a
corporation ("sociedad anonima") duly incorporated and validly existing and in
good standing under the Laws of the Republic of Argentina.
3.1(b)(2). Except as set forth on Schedule 3.8.3, each of the Holding
Company and, to the Sellers' knowledge, the Operating Companies has all
requisite corporate powers (and, to the Sellers' knowledge, each of the
Operating Companies holds a license) to operate the Systems, as well as to carry
out its activities as it has done until now and to be the owner of and/or to
lease and/or to use and/or to manage its property in the way it uses and manages
same at present and according to the annexes and schedules of the Applicable
Purchase Agreements. Each of the Holding Company and, to the Sellers' knowledge,
the Operating Companies is duly qualified to engage in and transact business and
is in good standing in each jurisdiction in which the character of the
properties owned, leased, used or managed by it or the nature of the business
conducted by it require it to be so qualified. The representations in this
Section 3.1(b)(2) do not include approval by COMFER of the Sellers' indirect
acquisition of shares of the Operating Companies, which approval has not yet
been obtained.
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3.1(b)(3). The Sellers have previously delivered or made available in
Argentina to Buyer complete and accurate copies of each of the Companies' (a)
Corporate Bylaws as amended from time to time, (b) all the minutes of its board
meetings or shareholders' meetings furnished to the Sellers in conjunction with
the Applicable Purchase Agreements and since the ownership of the Shares by the
Sellers, and (c) its stock registers, validly reflecting any and all issuances,
reissuances, cancellations and transfers of each of the Companies' capital
stock.
3.1(b)(4). Except as set forth on Schedule I or Schedule 3.1(b)(4),
none of the Companies owns any equity interest or any other obligation or equity
security of any other Person.
3.2 NO VIOLATION; CONSENTS:
3.2.1 The execution and delivery of this Agreement by each of the
Sellers and of any Additional Agreement to be executed and delivered by any of
them, as well as the performance of their respective obligations hereunder and
thereunder and the consummation of the transactions contemplated herein and
therein will not violate any provision of Law and, with or without the giving of
notice or the passage of time, will not conflict with or result in any breach of
any of the terms and conditions of, nor will constitute a default pursuant to,
the Companies' Governing Documents or of any Contract of the Holding Company or,
to the Sellers' knowledge, any of the Operating Companies.
3.2.2 Schedule 3.2 lists all Persons (including, without limitation,
Governmental Authorities, shareholders and creditors, parties to any necessary
License and parties to any other Contract) whose approval or consent, or with
whom the filing of any certificate, notice, application, report or other
document is legally or contractually required or necessary in connection with
the execution, delivery or performance of this Agreement or any of the
Additional Agreements, by Sellers (the "Required Consents").
3.3 CAPITAL STOCK.
3.3.1 The authorized capital stock and the capital stock that is issued
and outstanding of each of the Companies is set forth on Schedule 3.3.1. Except
as set forth on Schedule 3.3.1, all of such outstanding shares are duly
authorized, validly issued, fully paid-in and are subject to no Lien. With
respect to such shares, there are no obligations to make further contributions.
Each Company's outstanding capital stock is owned as indicated in Schedule I,
which sets forth the name of each beneficial owner of such stock and the number
of shares owned by each of them. Except as set forth on Schedule 3.3.1, none of
the Sellers has created or is contractually bound to create any Lien or
Restriction on the capital stock or any other securities of the Companies.
3.3.2 Except for the right of first refusal and related rights in the
CVI Shareholders Agreement, there are no outstanding options, warrants, calls or
other securities or rights of any kind to acquire, currently or upon the passage
of time or the payment of money or the occurrence of any other event, stock or
other securities of any of the Holding Company and, to the Sellers' knowledge,
the Operating Companies, nor any contingent or other kind of commitment to issue
any of the foregoing.
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3.4 BROKERS, AGENTS, FINDERS, ETC. Neither the Sellers nor their respective
agents have retained or hired any broker, agent or finder, nor have they agreed
to pay any fee, commission or similar payment to any person under this Agreement
or under any Additional Agreement or in respect of the transactions contemplated
herein or therein.
3.5 FINANCIAL STATEMENTS.
3.5.1 The Sellers have delivered to the Buyer the following financial
statements (the "Financial Statements"):
(i) The financial statements delivered to the Sellers in
conjunction with their acquisition of the Companies;
(ii) monthly operating results for April and May, 1997, for each
of the Operating Companies, setting forth month-end subscribers and
revenue, expense and EBITDA for such Companies for such months; and
(iii) closing certificates furnished to Sellers setting forth
certain estimated information regarding numbers of subscribers,
liabilities and working capital of each of the Companies received by
the Sellers in connection with Sellers' acquisitions of the Companies
pursuant to the Applicable Purchase Agreements.
3.5.2 The financial statements referred to in Clause (iii) of Section
3.5.1 are accurate in all material respects, subject to normal year-end
adjustments and subject also to debt of such Companies to the Persons who sold
such Companies to the Sellers incurred under the Applicable Purchase Agreements.
The documents referred to in Clauses (i) and (iii) of Section 3.5.1 are complete
and accurate copies of the documents furnished to Sellers. Since the applicable
Majority Ownership Date, there has been no material adverse change in the
financial condition or results of operations of the Companies taken as a whole.
3.5.3 The books and records of each of the Holding Company and, to the
Sellers' knowledge, the Operating Companies are reasonably complete and reflect
the transactions and dispositions of the Assets of each of them adequately.
3.6 TAXES. Each Company, since its Majority Ownership Date, has duly
and timely filed in proper, legal and accurate form all reports and tax returns
and has paid all taxes in accordance with applicable Law that first became due
during such period.
3.7 LAWSUITS. Except as set forth in the annexes and schedules to the
Applicable Purchase Agreements, there are no actions, proceedings, claims or
investigations pending or threatened by or before any Governmental Authority to
which the Holding Company or, to the Sellers' knowledge, an Operating Company is
a party in which an adverse determination could reasonably be expected to have a
Material Adverse Effect on the Companies taken as a whole or the material
Licenses, Contracts, Assets or rights of the Companies taken as a whole, or
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which might question the validity of this Agreement or of any other Additional
Agreement, or which seeks to restrain or enjoin the consummation of transactions
contemplated herein or therein.
3.8 LICENSES.
3.8.1 To the Sellers' knowledge, each of the Operating Companies has
all material Licenses necessary to construct, own and operate commercially the
Systems of the Companies in the geographical areas in which it currently
conducts business, in each case in full compliance with all applicable Laws
except where such noncompliance would not have a Material Adverse Effect on such
Operating Company. To the Sellers' knowledge, each of the Operating Companies'
Licenses is a valid and subsisting instrument under applicable Laws and is in
full force and effect. To the Sellers' knowledge, each License used, held for
use in or necessary for the operation of the Systems of the Operating Companies
is held by and in the name of each such company. To the Sellers' knowledge,
there is no pending application before any Governmental Authority which involves
an Operating Company License. To the Sellers' knowledge, none of the Operating
Companies' Licenses may be revoked during the period of issue unless the
applicable Operating Company breaches the terms or conditions of such license.
3.8.2 To the Sellers' knowledge (i) no Operating Company has materially
breached or is in default under any of the Operating Companies' Licenses except
where such breach or default would not have a Material Adverse Effect on such
Company, (ii) the Systems of the Companies, to the extent that same are
constructed, have been constructed in compliance with all applicable Licenses
and Laws and (iii) no Operating Company has received any notice of breach or
default under any of its Licenses from any Governmental Authority.
3.8.3 To the Sellers' knowledge, Schedule 3.8.3 sets forth a list of
all pending COMFER authorizations and claims.
3.9 ASSETS.
3.9.1 TITLE; LIENS. To the Sellers' knowledge, each of the Operating
Companies has good and marketable title or valid rights to all of its Assets,
free and clear of any Lien, except (i) Liens for property taxes not delinquent,
(ii) Liens that do not materially detract from the value of the Assets or
materially interfere with the present use of the Assets, and (iii) the Liens
listed in the schedules and annexes to the Applicable Purchase Agreements.
3.9.2 REAL PROPERTY. Other than as reflected in the annexes and
schedules to the Applicable Purchase Agreements, neither the Holding Company
nor, to the Sellers' knowledge, the Operating Companies own any Real Property.
3.9.3 INTELLECTUAL PROPERTY, COPYRIGHTS, PATENTS AND TRADEMARKS.
Neither the Holding Company nor, to the Sellers' knowledge, the Operating
Companies are in violation of any intellectual property right, copyright, patent
or trademark of any Person.
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3.9.4 OPTIONS. Schedule 3.9.4 sets forth a list of all Options held by
the Holding Company as of the date hereof and the exercise price per subscriber
of each Option. Buyer acknowledges that exercise of the Options is, by the terms
of the Options, subject to negotiation and completion of definitive documents
and may be subject to negotiation of other terms and other customary conditions,
and some of the Options may expire before Closing.
3.10 THE SYSTEMS.
3.10.1 To the Sellers' knowledge, all of the Equipment is in good
working order and repair, complies in all material respects with all applicable
Licenses and Laws and with all rules, regulations and standards of all
Governmental Authorities regarding its intended use. The Holding Company does
not directly own any material cable television Equipment.
3.10.2 To the Sellers' knowledge, each of the Operating Companies is
duly authorized under applicable Laws to distribute to Subscribers all the
signals carried or proposed to be carried and has all Licenses required to
operate all earth stations and microwave and other transmission facilities used
or proposed to be used in the Systems of the Companies in compliance with
applicable Laws.
3.11 EMPLOYMENT MATTERS. Each of the Holding Company and, to the Seller's
knowledge, the Operating Companies (except as covered by Section 9.2(a)(iii))
has fully complied with all applicable labor and social security Laws.
3.12 INSURANCE. To the Sellers' knowledge, all of the insurance policies of
the Operating Companies are outstanding, valid and enforceable in accordance
with their respective terms, having been hired with financially sound and
reputable insurance companies.
3.13 CONTRACTS AND COMMITMENTS.
3.13.1 All of the Contracts/Commitments of the Holding Company and, to
the Sellers' knowledge, the Operating Companies (collectively the "Company
Contracts") are in good standing, valid and effective, with no material breach,
violation, default, notice or claim of breach by any party thereto except where
such breach, violation or default would not have a Material Adverse Effect.
3.13.2 Sellers have made available to Buyer in Argentina complete and
accurate copies of all of the Company Contracts, and any and all amendments or
modifications thereto.
3.14 COMPLIANCE. Each of the Holding Company and, to the Sellers'
knowledge, the Operating Companies has complied in all material respects with
all Licenses, Contracts, and Laws applicable to the conduct of its business and
ownership, possession, maintenance and operation of its properties and Assets
except where such noncompliance would not cause a Material Adverse Effect on the
Companies taken as a whole.
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3.15 NO MISSTATEMENTS OR OMISSIONS. No representation or warranty in this
Article Three contains any untrue statement of a material fact or omits to state
a material fact necessary to make the statements contained therein not
misleading.
3.16 ENVIRONMENTAL MATTERS. To the Sellers' knowledge, none of the
Operating Companies has received a notice from any Governmental Authority that
it, or any property it owns or uses, is in violation of any Law or regulation
relating to protecting the environment.
3.17 LABOR MATTERS. Except as set forth on Schedule 3.17, no employee of
any of the Companies is represented by any labor union, and no union is
attempting to organize or otherwise become the bargaining representative for any
employees of any of the Companies.
3.18 VENDOR DEBT. Schedule 3.18 shows (a) the amounts as of the date hereof
of all outstanding debt incurred as deferred payment of the purchase price paid
by Sellers for the Companies and (b) the amount as of the date hereof of all
funds held in escrow pursuant to the Applicable Purchase Agreements. Buyer
acknowledges that such amounts are subject to change pending the Closing due to
scheduled payments, resolution of post-closing purchase price adjustments,
accrual of interest and other matters provided for in the Applicable Purchase
Agreements and related documents.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
4.1 BUYER. Buyer is a corporation duly organized, validly existing and in
good standing under the Laws of the Republic of Argentina, with all requisite
corporate power and authority to conduct its business and operations as
presently conducted and to execute, deliver and perform this Agreement and the
other instruments and documents required hereby to be executed and delivered by
such Buyer, and has, or as of the Closing Date will have, taken all action
required to duly authorize such execution, delivery and performance. This
Agreement is, and the other instruments and documents to be executed and
delivered by Buyer hereunder or prior to the Closing will be, legal, valid and
binding obligations of such Buyer, enforceable in accordance with their
respective terms. Buyer represents that they are familiar with any and all
applicable broadcasting Laws, in particular with the provisions of Law 22,285,
as amended, and with any and all obligations to be undertaken by it under same,
and especially that this Agreement must be submitted to the approval specified
in Article 46 clause (f) of the Broadcasting Law.
4.2 NO VIOLATION; BUYER'S CONSENTS.
4.2.1 The execution and delivery of this Agreement by Buyer and of any
Additional Agreement to be executed and delivered by it, as well as the
performance of its obligations hereunder and thereunder and the consummation of
the transactions contemplated herein and therein will not violate any provision
of Law and, with or without the giving of notice or the passage of time, will
not conflict with or result in any breach of any of the terms and conditions of,
nor will constitute default pursuant to, such Buyer's Governing Documents or of
any Contract of such Buyer.
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4.2.2 Except for COMFER if applicable, there are no Persons (including,
without limitation, Governmental Authorities, shareholders and creditors,
parties to any necessary License and parties to any other Contract) whose
approval or consent, or with whom the filing of any certificate, notice,
application, report or other document is legally or contractually required or
necessary in connection with the execution, delivery or performance of this
Agreement or any of the Additional Agreements by Buyer.
4.3 BROKERS, AGENTS, FINDERS, ETC. Neither the Buyer nor its agents have
retained or hired any broker, agent or finder, nor have they agreed to pay any
fee, commission or similar payment to any person under this Agreement or under
any Additional Agreement or in respect of the transactions contemplated herein
or therein, except for Integra Financial Services LLC, Smith Barney, and ING
Bank ("ING"). Any obligations arising under any of the arrangements described in
the preceding sentence will be the sole obligation of Buyer, and no Seller will
have any liability therefor.
ARTICLE 5
CONDUCT PENDING THE CLOSING AND POST-CLOSING COVENANTS
Pending the closing and, with respect to Section 5.10 for the specified
period after the Closing, and except as otherwise approved by the other Party in
writing, the Parties agree as follows:
5.1 BUSINESS IN ORDINARY COURSE. The Companies will conduct their
respective businesses diligently, in good faith and in the ordinary course,
consistent with past practices and in compliance with all applicable Laws, and
will not engage in any transaction, including, without limitation, entering into
or amending any Contract, incurring any liability or obligation (absolute or
contingent), or making any advance or expenditure, other than in the ordinary
course of business, nor will they change their business policies or practices in
any material respect. The Companies will not acquire any customers of a System
by promotional incentives or discounts exceeding those customarily given in the
cable industry in Argentina.
5.2 BOOKS AND RECORDS. The Companies will keep their books, accounts and
records in the usual, regular and ordinary manner, in accordance with generally
accepted accounting principles in Argentina and good business practice, on a
basis consistent with prior years. The Companies will keep their minute books
accurately and will close their stock transfer books until the Closing, except
to the extent necessary to comply with the terms of this Agreement.
5.3 REPRESENTATIONS AND WARRANTIES. Each of the Sellers and Buyer will not
intentionally take any action or omit to take any action that would or might
result in any of the representations and warranties made in Article 3 or Article
4, respectively, being untrue or incomplete in any material respect. Each of the
Sellers and Buyer will otherwise use their best efforts to cause all of the
conditions in Article 6 and Article 7 hereof, respectively, to be satisfied as
promptly as practicable, but in no event later than October 28, 1997.
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5.4 LITIGATION DURING INTERIM PERIOD. The Sellers will promptly advise
Buyer in writing of any material assertion, commencement or threat of any claim,
litigation, proceeding, investigation or demand where a court or administrative
restraining order, injunction, preliminary injunction, monetary damages or any
other Judgment is sought to which a Company is or may be made a party, by which
the Assets or businesses of a Company may be affected, or which relates to or
may affect the transactions contemplated hereby.
5.5 FULL ACCESS. The Sellers will afford to the Buyer, and its attorneys,
accountants and other authorized representatives, full access to its offices,
properties, personnel, books and records in order that the Buyer may have full
opportunity to make such reasonable investigations of the Companies' affairs as
it will desire. The Sellers will cause their officers, accountants, attorneys,
employees and agents to cooperate with the Buyer and to make full disclosure to
the Buyer of such additional information regarding the Companies as the Buyer or
its agents may reasonably request.
5.6 ASSISTANCE IN OBTAINING REQUIRED APPROVALS. The Sellers will each take
all such legal and regulatory steps as are reasonably possible to obtain the
Required Consents prior to the Closing, and will keep the Buyer fully informed
in writing of their progress in such regard. Buyer will fully cooperate in this
regard.
5.7 PROHIBITION ON DIVIDEND PAYMENTS AND REPURCHASING OF SHARES. The
Companies will not pay any dividends, nor retire any amounts on account of
future dividends, redeem or repurchase any shares of their stock, or reduce
their capital, except that any of the Companies may pay dividends to any other
of the Companies, and any of the Companies may contribute funds downstream to
other of the Companies (so long as, in the case of a contribution, either all
other equity owners contribute corresponding pro rata amounts or, to the extent
they do not, Sellers' equity interests in such Company is increased on a pro
rata basis).
5.8 MAINTAINING LICENSES. Each of the Operating Companies will maintain in
full force and effect all of its Licenses and will satisfy all Laws and other
requirements necessary for the continued operation of its business.
5.9 VENDOR DEBT. At the Closing, Buyer will assume all outstanding debt
incurred as deferred payment of the purchase price paid by Sellers for the
Companies that is owed by entities that are not being transferred to Buyer
hereunder pursuant to an assignment and assumption agreement containing normal
and customary terms for similar agreements.
5.10 UFC AFFILIATION AGREEMENT. Buyer shall use its best efforts to enter
into, within six months after the date hereof, an affiliation agreement with
respect to the carriage of Casa Club and The Family Channel through the
Companies' Systems, on terms and conditions substantially as set forth on the
term sheet attached hereto as Exhibit C, along with such other terms and
conditions as are customary for agreements with respect to such matters.
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ARTICLE 6
CONDITIONS OF BUYER'S OBLIGATIONS
6.1 CLOSING. Buyer's obligation to pay the Purchase Price is subject to the
satisfaction or written waiver of the following conditions:
(a) STOCK TRANSFER. That the Sellers deliver to Buyer all of the
certificates representing the Shares and, subject to the closing of the
transactions contemplated under the Local Group Purchase Agreement, the Local
Group Shares, and do all acts necessary to perfect the transfer of the Shares
and, if applicable, the Local Group Shares in the name of Buyer and/or any
company that Buyer indicates in the Stock Registry book of the Companies, free
of Liens or undisclosed Restrictions, subject to the approval of the
authorization provided for in Art. 46(f) of the Broadcasting Law, if applicable.
(b) CORPORATE ACTIONS. All corporate or other actions necessary for (i)
the execution, delivery and performance of this Agreement and of the Additional
Agreements by the Sellers, (ii) the completion of the transactions contemplated
herein and therein, and (iii) implementing the annotations that are required in
the corporate record books in order to effectuate the transfer of the Shares
and, if applicable, the Local Group Shares to the Buyer, free of all Liens and
undisclosed Restrictions, will have been duly and validly taken and will be in
full force and effect.
(c) PERFORMANCE. The Sellers will have performed in all material
respects all obligations under this Agreement and the Additional Agreements to
be performed by them at or prior to the Closing.
(d) TRUE AND COMPLETE REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties made to Buyer in or pursuant to this Agreement or
any Additional Agreement will be true and complete in all material respects,
both when made and as of Closing, with the same effect as if made at and as of
the time of Closing.
(e) NO GOVERNMENTAL PROCEEDINGS. No provision of any applicable Laws
will apply, with the exception of those stemming from the Law 22,285 on
Broadcasting, and no Judgment will exist so as to prevent completion of the
transactions contemplated in this Agreement or in any Additional Agreement,
questioning the legality or validity of such transactions or otherwise alleging
damage as the result of such transactions, or where damages resulting from such
transactions might be claimed, nor any pending or threatened proceeding in which
any Person seeks or may take any such action. None of the Parties to this
Agreement will have been notified of the present intention of any Government
Authority or of the legal representative thereof to bring an action or
proceeding challenging or enjoining completion of any other transactions
contemplated herein or in any Additional Agreement.
ARTICLE 7
CONDITIONS OF SELLERS' OBLIGATIONS
The obligation of the Sellers to complete Closing is subject to the
satisfaction or written waiver by the Sellers' Representative of each of the
following conditions:
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7.1 PERFORMANCE BY BUYER. Buyer will have performed in all material
respects all of Buyer's obligations hereunder and under each of the Additional
Agreements.
7.2 TRUTH OF REPRESENTATIONS AND WARRANTIES. Each of the representations
and warranties made by the Buyer pursuant to this Agreement or to any Additional
Agreement will be true and complete in all material respects and will have the
same effects whether made at or prior to the date of transfer of the Shares and,
if applicable, the Local Group Shares.
7.3 NO GOVERNMENTAL PROCEEDINGS. As regards Buyer, there will not exist any
provision of applicable Laws nor any Judgment preventing completion of the
transactions contemplated herein or in any Additional Agreement, questioning the
legality or validity of such transactions or claiming damages resulting from
such transactions, nor any pending or threatened proceeding in which any Person
seeks or may take any such action. None of the Parties to this Agreement will
have been notified of the firm and nonappealable intention of the applicable
authority by which the consummation of this Agreement is prohibited.
7.4 BAHIA BLANCA CLOSING. The closing of the transactions contemplated
under the Bahia Blanca Agreement and the Comodoro Agreement shall have occurred
and Sellers shall have received payment in full of the purchase price
thereunder.
7.5 ING COMFORT LETTER. Sellers shall have received a comfort letter from
ING, in form and substance acceptable to Sellers, stating that ING will use its
best efforts to be ready to loan to Buyer on the Closing Date the entire
purchase price under this Agreement by Buyer.
ARTICLE 8
CONFIDENTIALITY
8.1 GENERAL. Any information or document that any Party hereto provides to
the other Party or that a Party develops in the course of completing the
transactions contemplated herein, with the exception of information or documents
that are publicly available other than through a breach by the disclosing Party
of any agreement with any Seller or Buyer, will be treated as confidential and
proprietary and will not be disclosed to any third party, with the exception of
investment banks and other consultants who agree in writing to comply with this
Section 8.1 or as otherwise consented to in writing by the Sellers or Buyer, as
applicable. The Parties will attempt to identify any and all confidential
information specifically as such. The Party infringing confidentiality as agreed
herein will indemnify the other Party to the extent of the damages which were
caused.
8.2 PUBLIC ANNOUNCEMENTS. None of Sellers or Buyer will issue any press
release or make any other public disclosure relating to the transactions
contemplated herein without the prior written consent in each instance of the
other. Section 8.1 and this Section 8.2, however, will not apply to or limit any
Party's ability to make such public announcements or disclosures as it may
consider necessary or appropriate pursuant to the reporting requirements under
U.S.A. securities Laws or other applicable Law. Also excepted from Section 8.1
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and this Section 8.2 are the annual and other periodic reports and financial
statements legally prepared and released in the ordinary course of business by
the Parties hereto.
ARTICLE 9
SURVIVAL; INDEMNIFICATION
9.1 SURVIVAL. Sections 2.1, 2.2, 2.3, 2.4, 2.5, 2.6, and Articles 8, 9, and
11 hereof will survive Closing and will not cease except when expressly provided
therein. The provisions of this Agreement, including all representations and
warranties of the Parties hereto and any certificate delivered pursuant to this
Agreement, will survive Closing and will terminate on the earlier of 30 days
after completion of the audit of Buyer's financial statements for the year ended
December 31, 1998 or June 30, 1999. The obligation to indemnify will apply to
any of the foregoing matters for any claim made prior to the expiration of the
limitation period that was not resolved within said period of time.
Notwithstanding the foregoing, the provisions under Section 9.3 shall survive
the Closing and will remain in full force and effect for a period of five years
thereafter.
9.2 INDEMNIFICATION.
(a) Each of the Sellers agrees to indemnify Buyer with respect to any
loss, claim, damage, liability (or actions or procedures in relation to these)
and expenses that Buyer, their Affiliates, officers, employees, shareholders and
advisors (henceforward the "Indemnified Persons") may have suffered in relation
to or arising out of:
(i) the inaccuracy when made of any representation and warranty
made by Sellers in or pursuant to this Agreement, but only to the
extent that the event or circumstance that caused such representation
and warranty to be inaccurate first occurred or existed after Seller's
acquisition of the Company with respect to which such representation
and warranty was inaccurate;
(ii) non-performance on the part of any of the Sellers of any
obligation made in this Agreement or the Additional Agreements; or
(iii) any failure by an Operating Company to comply with labor
and social security Laws after the Majority Ownership Date of such
Operating Company and before the Closing.
(b) Immediately after receipt by an Indemnified Person of notice of any
action, proceeding, claim, or potential claim (an "Asserted Claim") that could
give rise to a right to indemnification under this Agreement, the Buyer will
give the Sellers' Representative written notice of the Asserted Claim. Delay in
giving this notice will not affect the Indemnified Party's right to
indemnification to the extent it is demonstrated that the interests of the
Sellers have not been prejudiced due to such delay.
(c) The Sellers' Representative may assume and control the defense of
such Asserted Claim (with counsel reasonably acceptable to the Indemnified
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Person) if it affirms the obligation of the Sellers to indemnify the Indemnified
Person with respect to such Asserted Claim. Notwithstanding the foregoing, the
Indemnified Person will have the right to hire its own counsel and to control
the defense or settlement in any such action, at the expense of the Sellers if
(i) the action involves a conflict of interest between the Indemnified Person
and the Sellers, (ii) the Sellers' Representative has not assumed such defense
to the reasonable satisfaction of the Indemnified Person within a reasonable
time after receiving notice of the Asserted Claim from the Indemnified Person or
(iii) the Asserted Claim could have a Material Adverse Effect on any of the
business of the Indemnified Person. The Sellers' Representative agrees to
cooperate with the Indemnified Person in order to enable their counsel to
participate in the defense and to deliver to the Indemnified Person copies of
all pleadings and other information within the Sellers' Representative's
knowledge or possession reasonably requested by the Indemnified Person that is
relevant to the defense of any such claim or demand. The Sellers' Representative
will maintain confidentiality with respect to all such information consistent
with the conduct of a defense hereunder.
(d) Neither the Indemnified Person nor the Sellers' Representative may
consent to the rendering of a judgment with respect to the Asserted Claim or
enter into a settlement with respect to the Asserted Claim if such judgment or
settlement does not unconditionally release the Sellers or the Indemnified
Person, as the case may be, from all liability with respect thereto without the
consent of such Party. Such consent cannot be unreasonably withheld.
(e) Notwithstanding any other provision of this Agreement, (i) Sellers'
indemnification obligations will not apply until the cumulative amount of
Buyer's indemnifiable claims exceed US$200,000 (ii) in no event will Sellers'
indemnification obligation under this Agreement exceed US$10,882,027, except for
a breach arising from Sellers' inability to transfer the Shares, and (iii)
Buyer's sole remedy for any breach of this Agreement or inaccuracy of any
representation or warranty made in or pursuant to this Agreement shall be
indemnification pursuant to this Article Nine.
(f) The provisions of paragraphs (a) through (e) of this Section 9.2
also shall apply to Buyer as an indemnifying party and the Sellers, entities
controlling, controlled by and under common control with Sellers and their
respective officers, employees, shareholders and advisers as Indemnified
Persons, with references therein to Buyer being read as references to the
Sellers and all references to the Sellers or the Sellers' Representative being
read as references to the Buyer except that clause (ii) of Section 9.2(e) shall
not apply with respect to any loss, claim, damage liability or expense suffered
by Sellers or any Affiliate of any Seller as a result of (i) a failure by Buyer
to complete the Closing in breach of this Agreement or (ii) with respect to
Sellers' guarantees of indebtedness incurred in connection with the Sellers'
acquisition of the Companies under any Applicable Purchase Agreement or any
related agreement including, without limitation, Buyer's assumption of Sellers'
obligations under the Local Group Purchase Agreement and/or the Santo Tome
Purchase Agreement
9.3 INDEMNIFICATION AGAINST CLOSING DATE LIABILITIES.
(a) The Sellers jointly and severally agree to indemnify the Buyer
against, and reimburse the Buyer for, any amount by which the total payments by
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the Companies after the Closing Date of obligations which existed at the Closing
Date or relate to periods prior to the Closing Date (net of any amounts
collected out of escrow accounts referred to in the definition of Closing
Liabilities), whether or not the payments are of liabilities known to the
Sellers or the Companies on the Closing Date, exceed the Closing Liabilities
included in the calculation of the Purchase Price made as provided in Section
2.4. The amount of indemnification will be adjusted to reflect the extent to
which the Buyer acquires less than 100% of the shares of an entity that makes
payments for which the Buyer is entitled to indemnification or reimbursement
under this Section 9.3(a). Any payments to the Buyer under this Section will (i)
be made promptly after demand by the Buyer accompanied by documentation of the
amounts paid by the Companies which shows the payment to be due and (ii) be
treated as adjustments of the Purchase Price. For purposes of the adjustment for
non-wholly transferred entities referred to above, the Local Group Shares shall
not be treated as having been transferred hereunder. Buyer's sole remedy with
respect to the Local Group Shares will be to recover from the members of the
Local Group under the Local Group Purchase Agreement.
(b) If any of the Companies receives a claim with regard to a
liability, or claimed liability, which existed at the Closing Date or relates to
a period prior to the Closing Date and was not included (or exceeds the amount
which was included) in the Closing Liabilities included in the calculation of
the Purchase Price, the Buyer will promptly notify the Sellers' Representative
of the claim and the fact that the Buyer intends to treat any amount paid with
regard to the claim as a payment to which Section 9.3(a) applies. If the
Sellers' Representative informs the Buyer that the Sellers acknowledge that any
payment with regard to the claim will be a payment to which Section 9.3(a)
applies and that the Sellers either (i) wish to contest the claim, (ii) want to
seek reimbursement out of an escrow account referred to in the definition of
Closing Liabilities with regard to any amount due as a result of the claim or
(iii) want to seek indemnification or other recovery related to such claim under
an Applicable Purchase Agreement or related agreement, the Sellers may, at their
expense, contest the claim or seek reimbursement out of the escrow account or
other recovery. The Buyer will cooperate, and will cause the Companies to
cooperate, in all reasonable respects in the Sellers' efforts to do that, and
the Sellers will reimburse the Buyer for all out-of-pocket costs it or any of
the Companies incurs in doing so. To the extent the Sellers recover
reimbursement out of an escrow account for a sum due as a result of a claim, the
Sellers will pay the amount of the reimbursement to the Buyer or the applicable
Company, and the amount paid to the Buyer or a Company will be included in the
calculation of any amount due under Section 9.3(a). Sellers will be subrogated
to all rights of any Company to the extent that Sellers pay any amount under
this Section 9.3.
ARTICLE 10
TERMINATION
10.1 TERMINATION. This Agreement may be terminated as follows:
(a) by mutual written consent of Buyer and the Sellers' Representative
at any time prior to the transfer of the Shares; or
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(b) by Sellers at any time after October 29, 1997, if the Closing has
not occurred and the failure of the Closing to have occurred is not the fault of
the Sellers.
10.2 EFFECTS OF TERMINATION. Upon any termination of this Agreement
pursuant to this Article 10, Article 8 and Article 9 and Article 11 (excluding
Section 11.14) will remain in full force and no provision contained in this
Article 10 will relieve any of the Parties from liability to the others for any
breach of this Agreement. The other sections of this Agreement will have no
effect after its termination.
ARTICLE 11
GENERAL PROVISIONS
11.1 NOTICES. All notices hereunder shall be made (i) by delivery of same
in person to the intended addressee, (ii) by sending such notice by Federal
Express or another reputable private international courier service (a "Qualified
Courier") for overnight (or its nearest equivalent) delivery to the intended
addressee or (iii) by facsimile transmission to such Party at the facsimile
number set forth for such Party below provided that a copy of same is deposited
with a Qualified Courier for overnight delivery to the intended addressee, in
each case for delivery to the address of the intended addressee as set forth
below (or as such other address or fax number as may be designated by such Party
as herein provided) to the officers mentioned hereinafter:
If to Sellers, to Sellers' Representative: If to the Buyer:
UIH Latin America, Inc. Supercanal S.A.
4643 South Ulster, Suite 1300 Godoy Cruz 316
Denver, Colorado 80237 Mendoza
Attn.: President Argentina
Tel: (303) 770-4001
Fax: (303) 770-4207
Copies to: Copies to:
UIH Argentina, Inc. Estudio Vila
Cerrito 740, piso 14 Espejo 333, P.B. of. 4 a 6
1309 Buenos Aires Mendoza, Argentina
Attn.: Bradley Johnson and/or Attn: Alberto Vila
Roberto H. Crouzel Tel: 011-54-61-254202
Tel: (541) 372-5100 Fax: 011-54-61-295042
Fax: (541) 372-1990
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United International Holdings, Inc. Marval, O'Farrell & Mairal
4643 South Ulster, Suite 1300 L.N. Alem 928
Denver, Colorado 80237 (1001) Buenos Aires
Attn.: General Counsel Argentina
Tel: (303) 770-4001 Tel: 011-54-1-310-0100
Fax: (303) 770-4207 Fax: 011-54-1-310-0200
W. Dean Salter, Esq.
Holme Roberts & Owen LLP
1700 Lincoln, Suite 4100
Denver, Colorado 80203
Tel: (303) 861-7000
Fax: (303) 866-0200
All notices, summons and requests will be effective upon such personal
delivery or upon confirmation of delivery by facsimile transmission provided
that delivery to the Qualified Courier is effected within three business days
thereafter. In all other cases, notices, summons and requests will be effective
three business days after having been deposited with Qualified Courier for
overnight (or its nearest equivalent) delivery. Rejection or other refusal to
receive, or the inability to deliver, because of changed address of which no
notice was given as herein required will be deemed to be receipt of the notice,
summons or request sent.
11.2 FURTHER ASSURANCES. The Parties will make, execute and deliver such
other instruments of transfer as may be necessary or proper to transfer to Buyer
all right, title and interest in the Shares and, if applicable, the Local Group
Shares, free of any Restriction or Lien.
11.3 HEADINGS. The Article and Section headings in this Agreement are for
convenience only and will not be used for interpretation hereof nor considered
part of this Agreement.
11.4 COUNTERPARTS. This Agreement may be executed in any number of
counterparts or counterpart signature pages, each of which will be deemed an
original but all of which, together, will constitute one and only instrument.
11.5 AMENDMENTS. No provision of this Agreement will be altered, amended,
revoked or waived except by an instrument in writing designated as an amendment,
revocation or waiver and signed by the person against whom it is sought to be
enforced.
11.6 ASSIGNMENT. This Agreement and all Additional Agreements will be
binding upon and inure to the benefit of the Parties. Except for assignments to
Affiliates, neither Party will assign any of its rights under this Agreement nor
delegate its duties hereunder unless it obtains prior written consent of the
other Party. For any assignment under the preceding sentence, the assignee, as a
condition to the effectiveness of such assignment, must assume all obligations
hereunder, with respect to the Company assigned, as co-obligor with Buyer.
11.7 ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES. Except as set forth in
Section 11.15 regarding Buyer's obligations under the Existing Stock Purchase
Agreement related to the Bahia Blanca Operating Companies and the Bahia Blanca
Holding Companies remaining in full force and effect until the Bahia Blanca
Purchase Date, this Agreement and the Additional Agreements embody the entire
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agreement between the Parties concerning the subject matter hereof and thereof.
Such Agreements replace and take the place of any other prior or contemporaneous
negotiations, agreements and understandings. The Indemnified Persons are
third-party beneficiaries of Article 9.2 hereof. Otherwise, there are no third
party beneficiaries.
11.8 NO WAIVER. Failure or delay of any Party at any time or from time to
time to exercise any right under or enforce any provision of this Agreement will
not be construed as implying a waiver of such provision or of that Party's right
to exercise or enforce it subsequently. No single or partial exercise of any
right hereunder by any Party will preclude the further or full exercise of the
right by such Party. No waiver of any default on any one occasion by a Party
will constitute a waiver of any subsequent or other default by such Party.
11.9 SEVERABILITY. If any provision of this Agreement or the applications
thereof to any Person or circumstance were invalid or unenforceable to any
extent, the remainder of this Agreement, and the application of such provision
to other Persons or circumstances, will not be affected thereby and will be
enforced to the greatest extent permitted by applicable Law. In such case, the
Parties will amend this Agreement to effect, to the fullest extent possible
under applicable Laws, the original intent of the Parties with respect to such
invalid or unenforceable provision.
11.10 GOVERNING LAW. This Agreement, the rights and obligations of the
Parties hereto, and any claims or disputes relating thereto will be governed by
and construed in accordance with the Laws of Colorado.
11.11 DISPUTE RESOLUTION. Any dispute, controversy or claim arising out of
or relating to this Agreement or any Additional Agreement will be resolved by
the state courts of COLORADO or the federal courts located within the STATE OF
COLORADO. The Parties consent to personal jurisdiction of such courts in any
such disputes. Buyer consents to service of process through notice given under
Section 11.1 of this Agreement in connection with any such dispute and waives
any other requirements for service of process.
11.12 EXPENSES. Each Party will pay its own expenses incurred in connection
with the preparation, negotiation and execution of this Agreement and any
Additional Agreements.
11.13 SELLERS. Each of the Sellers hereby appoints the Sellers'
Representative as his or her agent to make decisions and take any action on
behalf of such Shareholder in connection with this Agreement.
11.14 OTHER COVENANTS.
(a) CERTAIN RIGHTS. Sellers agree that any amounts they receive before
October 30, 1997, as recovery under the Stock Purchase Agreement, dated as of
April 30, 1997, between UIHA and The Tower Fund, L.P. or the Stock Purchase
Agreement, dated as of April 30, 1997, between UIHA and Southern Cone
Telecommunications Limited, will be held in trust for and promptly turned over
to Buyer. Promptly after Sellers receive a certificate from Buyer that the final
installments of the purchase prices have been paid under such agreements so that
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such agreements are assignable by their terms, Sellers will execute and deliver
to Buyer such documents as Buyer may reasonably request to assign all of
Sellers' rights under such agreements to Buyer.
(b) NONCOMPETITION.
(i) During the period commencing at the Closing and ending on the date
which is 10 (ten) years after the Closing Date, none of the Sellers, nor
any Affiliate thereof will, directly or indirectly, own, manage, operate,
control or engage or participate in the ownership, management, operation or
control of, or be connected as a stockholder, director, officer, agent,
partner, consultant, joint venturer or otherwise with, any business or
organization which engages in the business of owning, providing,
distributing or operating in the Republic of Argentina (A) any cable
television system or service, satellite master antennae or MMDS or UHF
system or service, any direct broadcast satellite system or service or any
telephone internet access, data service, or (B) without the prior written
consent of Buyer, any service or product related to cable television (other
than provision of programming), telephony or any other communication
business. Sellers and their Affiliates shall not be deemed in violation of
this paragraph (i) through ownership of up to 5% of the stock of a
publicly-traded company that engages in the activities described above.
(ii) Each of the Sellers shall keep confidential all proprietary
information which they have obtained or receive in the future with respect
to the Companies and their Affiliates and the cable television systems and
other business owned and operated by them, except to the extent required by
applicable Law or during the course of or in connection with any
litigation, arbitration or other proceeding based upon or in connection
with the subject matter of this Agreement and except as Sellers may
consider appropriate pursuant to disclosure obligations under U.S.
securities Laws. In the event that any of the Sellers is requested pursuant
to or required by applicable Law, regulation or legal process to disclose
any of the foregoing confidential proprietary information, he or she will
notify Buyer promptly so that Buyer may seek a protective order or other
appropriate remedy or, in such Person's sole discretion, waive compliance
with the terms of this Section, the relevant Seller will furnish only that
portion of the foregoing confidential proprietary information which he or
she is advised in writing by his or her counsel is legally required and
will exercise all commercially reasonable efforts to obtain reliable
assurance that confidential treatment will be accorded to such confidential
proprietary information. For purposes of this Section 11.14(b), proprietary
information does not include information that became generally available to
any Seller on a non-confidential basis from a source other than Buyer,
provided that such source is not bound by a confidentially agreement with,
or other contractual, legal or fiduciary obligation of confidentiality to
Buyer.
(c) CVI SHAREHOLDERS AGREEMENT. Buyer acknowledges that they have
received a copy of the waiver of the right of first refusal of Priano & Serrao
under the CVI Shareholders Agreement with respect to the transactions
contemplated by this Agreement (the "Waiver") and that such Waiver is
satisfactory in all respects.
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(d) The Parties, in the period between the signing of this document and
the closing date, will use their best efforts to reach an agreement that would
make possible the separation of the programming business of Channels 2 and 4 (a
"Coproduction Agreement"). This Coproduction Agreement will consist basically in
that the undersigned (Juan A. Priano and Marcelo Serrao) will incorporate a new
company which shall be on charge of the production and operation of such
frequencies, taking on an estimated 40 persons which are currently on the
payroll of Cablevideo S.A.. The Coproduction Agreement will also contemplate the
payment of a sum to be determined per month per real subscriber, for a minimum
period of 4 years, such that the total value of the sum to be paid will not be
greater than the sum which Cablevideo S.A. currently pays for salaries and
social costs for the personnel which will leave Cablevideo, S.A. to join the new
company. The monthly value to be determined will not include the payment for
sports events or soccer exhibition rights.
11.15 EFFECTIVE DATE. This Section 11.15 of this Amended and Restated Stock
Purchase Agreement will become effective immediately when this Amended and
Restated Stock Purchase Agreement has been properly executed and delivered by
all of the Parties. The amendments hereby made to the Existing Stock Purchase
Agreement will become effective with respect to the rights and obligations
relating to the Bahia Blanca Operating Companies and the Bahia Blanca Holding
Companies only on the Bahia Blanca Purchase Date. Until such time, all
obligations of Buyer under the Existing Stock Purchase Agreement related to the
Bahia Blanca Operating Companies and the Bahia Blanca Holding Companies shall
remain in full force and effect until the Bahia Blanca Purchase Date.
11.16 INTEGRATION OF AGREEMENTS. The Parties acknowledge that the Existing
Stock Purchase Agreement, this Amended and Restated Stock Purchase Agreement,
and the respective stock purchase agreements pursuant to which the stock of the
Comodoro Operating Companies, the Bahia Blanca Operating Companies, the Bahia
Blanca Holding Companies, and the Comodoro Holding Companies was sold may
contain certain provisions that conflict with one another to the effect that
each such agreement embodies the entire agreement between the parties thereto
concerning the subject matter thereof, and that such agreements replace and take
the place of any other prior or contemporaneous negotiations, agreements and
understandings. Notwithstanding such provisions, it is the express understanding
of the Parties that each such agreement, when properly executed and delivered,
will constitute a valid and binding agreement between the parties thereto,
regardless of such actual or potential conflict.
* * * * *
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IN WITNESS HEREOF, three copies of the same effect are executed on the date
set forth on page 1.
SELLERS
UIH ARGENTINA, INC.
/S/ DAVID LEONARD
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By: DAVID LEONARD
Its: President
CV AMERICAN HOLDINGS L.L.C.
/S/ DAVID LEONARD
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By: DAVID LEONARD
Its: Sole Member of Management Committee
BUYER
SUPERCANAL HOLDING S.A.
/S/ DANIEL VILA
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By: DANIEL VILA
Its: President
ESCROW AGREEMENT
This Escrow Agreement (hereinafter this "AGREEMENT") is executed on
this _____ day of October, 1997.
BY AND AMONG:
(I) U.S. Bank National Association dba Colorado National Bank, in its capacity
as escrow agent (hereinafter the "ESCROW AGENT");
(II) __________, a __________, and UIH Argentina, Inc. ("UIHA"), a Colorado
corporation (collectively, the "SELLERS"); and
(III) ___________, an Argentine corporation (the "BUYER").
The Sellers and the Buyer will be collectively and indistinctly referred to
herein as the "PARTIES".
WHEREAS
The Parties have executed a Stock Purchase Agreement, dated as of October ___,
1997 (hereinafter the "Stock Purchase Agreement"), under which the Sellers have
sold to Buyer, and Buyer has acquired from Sellers, all of Sellers' equity
interests in certain Argentine companies.
By way of compensation for said purchase, Buyer bound itself to pay Sellers the
selling price and Sellers bound themselves to compensate Buyer for certain items
or matters that may cause damage to Buyer.
For the purposes described in the above paragraph, Sellers have committed to
establish a deposit as security, in the manner as may be legally required to
secure, whenever applicable, that Buyer will be paid the indemnification
foreseen in the executed Stock Purchase Agreement.
Therefore, Sellers have proposed and Buyer has accepted that the Escrow Agent
perform the duties inherent in such capacity.
FOR ALL THE AFOREMENTIONED, THE PARTIES AND THE ESCROW AGENT, BY MUTUAL CONSENT
AND SUBJECT TO THE COVENANTS AND CONDITIONS BELOW, AGREE AS FOLLOWS:
ARTICLE ONE: DEFINITIONS
The terms below defined shall, as used in this Agreement, mean:
BANK: shall mean Colorado National Bank.
BUSINESS DAY: shall mean a day that the major banks are open for business in
Denver, Colorado, USA and Buenos Aires, Argentina.
<PAGE>
EFFECTIVE DATE: shall mean October ___, 1997, by which date the Escrow Funds
must be actually transferred to and deposited in the Escrow Account.
ESCROW ACCOUNT: shall mean such account/s to be opened at the Bank, with such
characteristics foreseen in Exhibit I to this Agreement.
ESCROW FUNDS: shall mean __________ United States Dollars (US$__________) that
are transferred in escrow to serve as guarantee as provided in the Stock
Purchase Agreement.
SELLERS' REPRESENTATIVE: shall mean UIHA or such other person as Sellers may
designate in writing in the future. Sellers grant the Sellers' Representative
sufficient power to interpret and/or modify and/or execute this Agreement and to
sign any agreement related to the same.
STOCK PURCHASE AGREEMENT: shall mean the Stock Purchase Agreement executed
between Sellers and Buyer on October ___, 1997, from which this Agreement is
derived.
ARTICLE TWO: PURPOSE
2.1. Buyer commits to transfer to the Escrow Agent the Escrow Funds so that the
Escrow Agent shall, in furtherance of this Agreement, convey the ownership of
the Escrow Funds and proceeds therefrom, in favor of Sellers and/or reconvey
said ownership in favor of Buyer, as the case may be, in accordance with
provisions hereunder.
2.2. The Escrow Agent will be responsible for maintaining, administering and
distributing the Escrow Funds.
2.3. Sellers shall be benefited with the interest accrued on the Escrow Funds to
the extent such interest is not required to be transferred to Buyer as provided
in Article Nine hereof.
ARTICLE THREE: APPOINTMENT OF ESCROW AGENT
To all effects foreseen in Article Two hereof, Buyer and Sellers appoint the
Escrow Agent. Likewise, the Escrow Agent accepts such appointment in accordance
with the terms and conditions hereof.
ARTICLE FOUR: TRANSFER OF THE PROPERTY IN ESCROW
4.1. Buyer irrevocably agrees to transfer the Escrow Funds to the Escrow Agent
in accordance with the terms and conditions of the Stock Purchase Agreement. The
transfer of the ownership in escrow shall inure for the benefit of the Parties,
as provided hereunder, with the Parties therefore becoming the sole
beneficiaries of the escrow hereunder established, to the extent, for the time
and under the terms hereunder established.
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4.2. The Escrow Agent shall give notice to Buyer and Sellers' Representative on
the Effective Date, about the compliance or lack of compliance with the transfer
of the Escrow Funds in the manner foreseen in Section 4.1, to all applicable
effects.
ARTICLE FIVE: ESTABLISHMENT AND OPERATION OF THE ESCROW ACCOUNT
On the Effective Date the Escrow Agent will open the Escrow Account with the
Bank. All net amounts received by the Escrow Agent as a consequence of the
provisions hereunder shall be credited into the Escrow Account.
ARTICLE SIX: INVESTMENTS
6.1. The Escrow Agent will invest and re-invest the Escrow Funds deposited with
the Escrow Account and all interest accrued on such investments, as provided in
Exhibit I hereto, notwithstanding provisions under Section 2.3 as to the
ownership of said interest. The proceeds from such investments will increase the
balance standing on the Escrow Account. Any instructions from the Parties to the
Escrow Agent with respect to the investment of the Escrow Funds shall be given
in writing.
6.2. The Escrow Agent shall, for as long as this Agreement shall remain in
force, maintain current the entry of all transactions made on the Escrow
Account, describing all deposits made and the existing balances. Within the
first ten (10) days of each calendar month, the Escrow Agent shall make
available to the Parties an Escrow Account statement showing the transactions
recorded thereon, including a description of all deposits and balances existing
on the account.
6.3. Upon written request received from any Party, the Escrow Agent will deliver
to each Party, through such persons therefor designated by them, all such
information, clarifications, explanations and/or documentation related to the
transactions on the Escrow Account. The Escrow Agent will allow the Parties and
their independent advisors, during the Escrow Agent's working hours, reasonable
access to its records related to the Escrow Funds and the Escrow Account, as may
be required by any of the Parties, for the purposes of inspecting the books and
records related to the Escrow Account, to the extent so allowed by the
applicable laws and regulations.
6.4. The Escrow Agent commits to maintain the Escrow Account open for as long as
this Agreement shall remain effective, in accordance with the terms and
conditions under this Article.
ARTICLE SEVEN: CERTAIN DUTIES OF THE PARTIES
Notwithstanding other duties that may be applicable to the Parties as provided
hereunder, each Party commits to execute and deliver all such documents and
carry out all such acts, at its sole expense, as may be reasonably required by
the Escrow Agent during the life of this Agreement.
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ARTICLE EIGHT: LIABILITIES OF ESCROW AGENT; INDEMNITY
8.1. The Escrow Agent commits to comply with the duties entrusted to it under
this Agreement, acting in good faith in its capacity as escrow agent. The Escrow
Agent and its directors, officers, employees or agents will be liable only for
such facts, actions or inactions as may deviate from the purpose of this
Agreement and as may derive from their fault or fraud so adjudged through a
final judgment issued by the competent courts. No action contrary to this
Agreement or applicable legislation may be required from the Escrow Agent. The
Escrow Agent will in no event be liable for acts performed in compliance with
the instructions given by the Parties.
8.2. The Escrow Agent will only be liable for such duties hereunder established.
With respect to issues not expressly herein provided for, the Escrow Agent will
be bound to carry out only such acts and actions which are of a preserving
nature. The Escrow Agent will, if applicable, adopt such measures as the Parties
may jointly instruct in a letter substantially in the form set forth in Exhibit
II to this Agreement; whenever such joint instruction shall be contrary to
provisions under this Agreement, the Escrow Agent will proceed to act or fail to
act as per the received instruction, which instruction shall prevail over the
Agreement. Until the Escrow Agent has received such instruction, it will adopt,
with respect to such issues, the proper preserving measures.
8.3. The Escrow Agent shall not be bound to file or continue any suit, action or
court or administrative proceeding with relation to the Escrow Funds, unless the
Escrow Agent shall have been instructed accordingly by all Parties, in which
event the Escrow Agent shall be indemnified and held harmless against the
consequences from any such process, suit, action or proceeding.
8.4. Sellers and Buyer shall hold the Escrow Agent harmless and, if applicable,
indemnify the Escrow Agent, its officers, directors and controlling shareholders
against any loss, claim, damages, liability or expense (including legal fees and
expenses) resulting from this Agreement except in the event of fraud or gross
fault so adjudged through a final judgment issued by competent courts.
ARTICLE NINE: INSTRUCTIONS TO THE ESCROW AGENT
9.1. The Escrow Agent shall proceed to transfer the full ownership of all or
part of the Escrow Funds as follows:
(i) If the Escrow Agent receives a letter, substantially in the form set
forth in Exhibit II to this Agreement, purportedly signed by Buyer and
Sellers' Representative, with signatures and legal status duly certified
by notary public, describing the amount of Escrow Funds to be released,
then within 96 hours after the Escrow Agent receives such letter the
Escrow Agent will release such amount as directed in such letter.
(ii) The Escrow Agent will release to Sellers' Representative on December
1, 1997 the Escrow Funds in excess of $__________ then on deposit in the
Escrow Account.
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(iii) If the Escrow Agent has not released all of the Escrow Funds 12
months after the Effective Date, then at that time the Escrow Agent will
release the remainder of the Escrow Funds to Sellers' Representative.
(iv) The Escrow Agent will release all interest accrued on the Escrow Funds
to Buyer and Sellers' Representative at the time of the final release of
Escrow Funds under this Section 9.1, and such release of accrued interest
will be made to Buyer and Sellers' Representative in proportion to the
cumulative amount of the portion of the Escrow Funds released to them.
9.2. With respect to the procedures described in Section 9.1, the Escrow Agent
does not and will not incur any liability whatsoever for the release of the
Escrow Funds so long as the Escrow Agent complies with such procedures, in which
case any such liability will be borne by the applicable Parties.
ARTICLE TEN: CONFIDENTIALITY
This Agreement, the operations contemplated hereunder and all such information
related to such operations as the Escrow Agent may obtain in the performance of
its duties are strictly confidential and must be kept secret; they may only be
used by the Escrow Agent, its directors, officers, employees, agents and legal
counsels for the purpose of this Agreement. Accordingly, the Escrow Agent must
have the proper commitments from its directors, officers, employees, agents and
external advisors. This section will not apply to or limit any Party's ability
to make public announcements or disclosures as it may consider necessary or
appropriate pursuant to the reporting requirements of U.S.A. securities laws or
other applicable law, and will not limit Buyer's ability to disclose this
Agreement in connection with sales of assets or joint ventures or financing
arrangements of Buyer or its affiliates.
ARTICLE ELEVEN: EXPENSES AND TAXES
11.1. Except as set forth in Section 11.2, all taxes, rates, contributions,
expenses, costs and any other expenditure that arises or may arise in the future
as a consequence hereof will be exclusively borne by Buyer and Sellers'
Representative in proportion to the cumulative amount of the portion of the
Escrow Funds released to them. The Escrow Agent will be authorized to debit from
the Escrow Account all the amounts mentioned in this Article.
11.2. All costs incurred on account of the reception and deposit of the Escrow
Funds according to the provisions hereof and the transfer and credit thereof to
the Escrow Account with the Bank as well as those involved in the opening and
maintenance of same, will be borne by Buyer. The Parties agree to and accept all
the exchange, investment and any other kind of operations concerning the
management of the Escrow Funds as well as the cost thereof, to be made by the
Escrow Agent in accordance with the management instructions received in this
Agreement as well as any other operations to be made by the Escrow Agent to
credit the proper funds upon the termination hereof.
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ARTICLE TWELVE: ESCROW VALIDITY
This Agreement will become effective on the Effective Date and will be in force
and valid, in principle, for a 12-month term as from the Effective Date;
notwithstanding the aforesaid this Agreement may be extended as many times as
may be applicable for the term agreed to by Sellers' Representative and Buyer in
a joint notice to the Escrow Agent.
ARTICLE THIRTEEN: REPLACEMENT OF ESCROW AGENT; TERMINATION
13.1. The Escrow Agent may be replaced if any of the following events occurs:
(i) The Escrow Agent resigns, which the Escrow Agent may do at any time by
giving written notice to all Parties pursuant to Article Seventeen hereof.
Such resignation shall be effective (a) 30 days after such notice has been
deposited in the mail or (b) in the event of initial facsimile
transmission, 30 days after the sending of such facsimile. If a successor
escrow agent has not been appointed within such 30-day period, the Escrow
Agent may petition any court of competent jurisdiction or may interplead
the Parties in a proceeding for the appointment of a successor Escrow
Agent, and all fees, including but not limited to extraordinary fees
associated with the filing of interpleader, and expenses associated
therewith shall be payable by the Parties.
(ii) In the event that Escrow Agent files a petition for a creditors
preventive meeting or is subject to bankruptcy proceedings or applies for
its own bankruptcy or sponsors in court or out of court agreements with
its creditors or if it were unable to pay its debts upon maturity, even
before the commencement of the aforesaid proceedings or in the event of
Escrow Agent's dissolution or liquidation.
(iii) In the event that Escrow Agent fails to comply with any of its
obligations hereunder and fails to remedy such default in a ten-day term
counted as from the date of written notice by the Parties accordingly.
and/or
(iv) At any time if the Buyer and the Sellers' Representative agree in
writing.
13.2. In any of the events provided under Section 13.1, this Agreement may be
terminated by express notice to that effect at least thirty days in advance of
any such termination. At the end of such thirty-day term, the Escrow Agent must
make a final liquidation and deliver all the documentation corresponding to the
Escrow Account and it will be released from its responsibilities and obligations
hereunder, except for its obligation to render accounts and the responsibilities
concerning the obligations arising during the validity hereof, except where the
termination of the Agreement and the replacement of the Escrow Agent were with
cause. Buyer and Sellers' Representative will appoint a new Escrow Agent within
the aforesaid thirty-day period.
13.3. This Agreement will likewise terminate in advance when any change in
applicable legislation renders this Agreement illegal or illegitimate or if due
to any other reason the fulfillment hereof becomes impossible.
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<PAGE>
13.4 At the end of the term hereof, including the extensions, if any, the
ownership of the Escrow Funds the title wherein has not been fully transferred
to the Buyer, or previously released in favor of Sellers' Representative, will
be transferred to Seller as provided in Section 2.1.
ARTICLE FOURTEEN: ESCROW AGENT'S COMPENSATION
The remuneration of the Escrow Agent for the services rendered in connection
with this Agreement is fixed in the amount of Two Thousand dollars ($2,000) in
advance, per year or any portion thereof by way of direct commission payable by
the Buyer.
ARTICLE FIFTEEN: EXERCISE OF RIGHTS
The Escrow Agent declares that it will exercise all the rights and obligations
arising from this Agreement in full accordance with the instructions received
and established hereunder. The Escrow Agent may act or abstain from acting, at
its discretion.
ARTICLE SIXTEEN: MISCELLANEOUS
16.1. The Escrow Agent may deduct from the Escrow Account any amounts referred
to in Section 11.1 and any other expenditure incurred as a result of the
extension(s) of this Agreement, provided that such amounts for the whole time
that this Agreement is in force beyond the original term will not exceed the
amount of US$2,000 (Two Thousand U.S. Dollars) per year in which case the Escrow
Agent will ask for the Parties' prior written consent.
16.2. If at any time one or more of the provisions hereof is or becomes null and
void, illegal or unenforceable in any respect under any applicable provision,
the validity, legality and enforceability of the other provisions will not be
affected thereby in any manner whatsoever.
16.3. This Agreement and the other documents mentioned or provided for hereunder
constitute the full agreement between the Parties with respect to the matters
which are the purpose hereof.
16.4. This Agreement may be executed in any number of counterparts or
counterpart signature pages, each of which will be deemed an original but all of
which, together, will constitute one and the same instrument.
16.5. This Agreement, the rights and obligations of the parties hereto, and any
claims or disputes relating thereto will be governed by and construed in
accordance with the laws of the State of Colorado.
ARTICLE SEVENTEEN: NOTICES
NOTICES. Pursuant to the effects arising from this Agreement, the Escrow Agent
establishes its domicile at 950 17th Street, Suite 650, Denver, Colorado, the
Buyer at __________, and the Sellers' Representative at Cerrito 740, Piso 16,
Buenos Aires, Argentina, where all notices served will be valid. Notwithstanding
the foregoing, the Parties undertake to send copies of any notices served by
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<PAGE>
them (i) by delivery of same in person to the intended addressee, (ii) by
sending such notice by Federal Express or another reputable private
international courier service (a "Qualified Courier") for overnight (or its
nearest equivalent) delivery to the intended addressee or (iii) by facsimile
transmission to such Party at the facsimile number set forth for such Party
below provided that a copy of same is deposited with a Qualified Courier for
overnight delivery to the intended addressee, in each case for delivery to the
address of the intended addressee as set forth below (or at such other address
or fax number as may be designated by such Party as herein provided) to the
officers mentioned hereinafter.
(a) Escrow Agent
Colorado National Bank
950 17th Street, Suite 650
Denver, Colorado 80202
Attn: Colleen A. Carwin
Phone No.: (303) 585-4549
Fax No.: (303) 585-6865
(b) Buyer
__________________________
__________________________
__________________________
__________________________
Tel: __________________
Fax: __________________
Copy to:
__________________________
__________________________
__________________________
__________________________
Tel: __________________
Fax: __________________
(c) Sellers' Representative
UIH Argentina, Inc.
Cerrito 750, piso 14
1309 Buenos Aires
Attn: Bradley Johnson and/or Roberto H. Crouzel
Tel: (541) 372-5100
Fax: (541) 372-1990
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<PAGE>
Copy to:
UIH Argentina, Inc.
4643 South Ulster, Suite 1300
Denver, Colorado 80237
Attn: David J. Leonard
Tel: (303) 770-4001
Fax: (303) 770-4207
W. Dean Salter, Esq.
Holme Roberts & Owen LLP
1700 Lincoln, Suite 4100
Denver, Colorado 80203
Telephone No.: (303) 861-7000
Fax No.: (303) 866-0200
All notices, summons and requests will be effective upon such personal delivery
or upon confirmation of delivery by facsimile transmission provided that
delivery to the Qualified Courier is effected within three Business Days
thereafter. In all other cases, notices, summons and requests will be effective
three Business Days after having been deposited with a Qualified Courier for
overnight (or its nearest equivalent) delivery. Rejection or other refusal to
receive, or the inability to deliver because of changed address of which no
notice was given as herein required, will be deemed to be receipt of the notice,
summons or request sent.
ARTICLE EIGHTEEN: ASSIGNMENT
No Party hereto may assign, transfer, negotiate or give in guarantee any of its
rights or obligations under this Agreement, except as otherwise provided with
respect to termination in Article Thirteen above.
ARTICLE NINETEEN: DISPUTE RESOLUTION
Any dispute, controversy or claim arising out of or relating to this Agreement
will be settled by the Arbitration Board of the Buenos Aires Stock Exchange, in
accordance with generally accepted procedures. The place of arbitration will be
Buenos Aires, Argentina, and in all of the arbitration the usual procedures
followed by such tribunal will be used. The arbitration award will be in U.S.
dollars and will include interest as from the date of the action which gave rise
to such arbitration award. The arbitration award will be final and binding upon
the Parties, and judgment may be entered thereon upon the application of any
Party in any court of competent jurisdiction. An appeal may be lodged against
the arbitration award pursuant to the provisions of the Civil and Commercial
Procedures Code of the Federal Capital of the Republic of Argentina. Other costs
of arbitration (including the fees and expenses of the arbiters) will be borne
by the losing Party unless the arbitration award provides otherwise.
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<PAGE>
In witness whereof, the Parties and the Escrow Agent have caused this Agreement
to be executed as of the date first written above.
SELLERS
__________
_________________________________
By: ________________________
Its: ________________________
UIH ARGENTINA, INC.
_________________________________
By: DAVID LEONARD
Its: President
BUYER
__________
_________________________________
By: ________________________
Its: ________________________
<PAGE>
ESCROW AGENT
U.S. BANK NATIONAL ASSOCIATION
dba COLORADO NATIONAL BANK
_________________________________
By: ________________________
Its: Trust Officer
<PAGE>
EXHIBIT I
INVESTMENT PROGRAM
The Parties in full accordance with, and to all purposes under, the executed
Escrow Agreement instruct the Escrow Agent so that it may carry out and develop
the following investment program in connection with the Escrow Funds, in the
manner and conditions set forth below:
I) Escrow Accounts: According to the provisions of Article One of the Escrow
Agreement (Definitions) the Escrow Account in which the Escrow Funds will be
initially deposited on the Effective Date in order to give an actual launching
to the executed Escrow Agreement, will be any of the following:
Bank: First Bank, N.A., Minneapolis, MN
ABA Routing No.: 091000022
Account No.:
Account Name: First Trust National Association
For Further Credit Account No.:
Attn: Colleen Carwin
Ref:
II) The Escrow Funds will be invested by the Escrow Agent in any of the
following:
a) money market funds;
b) any of the following so long as they are rated BBB or better (or the
equivalent) by a public rating agency such as Moody's or Standard &
Poor's: treasury notes, corporate bonds and notes, commercial paper,
asset-backed securities; and
c) mutual funds investing solely in the items specified in clauses (a) and/or
(b) above.
III) Any instructions to the Escrow Agent relating to a change in the investment
of the Escrow Funds will be made by the Parties in writing. Until the Escrow
Agent has received such an investment instruction, the Escrow Funds will remain
in the investment in which they are invested, notwithstanding the provisions of
clause (II) above.
IV) Pursuant to Section 6.2 of the Escrow Agreement, within the first ten (10)
days of each calendar month, the Escrow Agent shall make available to the
Parties an Escrow Account statement showing the transactions recorded thereon,
including a description of all deposits and balances existing on the account.
<PAGE>
EXHIBIT II
NOTICE
[Date]
Dear Sirs,
We refer to the Escrow Agreement dated October ___, 1997 (the "AGREEMENT") by
and among U.S. Bank National Association dba Colorado National Bank as Escrow
Agent, __________, and UIH Argentina, Inc., as Sellers, and __________ as Buyer.
Capitalized terms used but not defined herein have the same meaning given such
terms in the Agreement.
By these presents and in accordance with the provisions of Article Nine of the
Agreement, the Parties instruct the Escrow Agent to transfer [part] [the whole]
of the Escrow Funds as follows:
Amount: US$
This notice, with the signature(s) of the undersigned and the incumbency
certified by a Notary, exempts the Escrow Agent from any liability arising from
the transfer of the Escrow Funds made hereunder.
Yours truly
Signature of the Sellers' Representative and the Buyer
ASSIGNMENT AND AMENDMENT AGREEMENT
This ASSIGNMENT AND AMENDMENT AGREEMENT (this "Agreement") is made and
entered into as of October 29, 1997, by and among (1) Supercanal Holding S.A.,
an Argentine corporation (the "Assignor"), (2) Multicanal S.A., an Argentine
corporation ("Multicanal"), and Cablevision S.A., an Argentine corporation
("Cablevision" and, together with Multicanal, the "Assignees"), and (3) UIH
Argentina, Inc., a Colorado corporation ("UIHA"), and CV American Holdings
L.L.C., a Delaware limited liability company ("CVAH" and, together with UIHA,
the "Sellers"). The Sellers, the Assignor, and the Assignees are jointly
referred to herein as the "Parties."
RECITALS
A. Assignor and Sellers are parties to a Stock Purchase Agreement, dated as
of September 9, 1997 and amended and restated as of October 20, 1997 (the
"Purchase Agreement"), pursuant to which (1) Sellers have agreed to sell, and
Assignor has agreed to purchase, the shares of stock of certain Argentine
companies and (2) Assignor has agreed to assume certain liabilities of Sellers.
B. As contemplated by Section 11.6 of the Purchase Agreement, Assignor
desires to assign all of its rights and obligations under the Purchase Agreement
to Assignees, and Assignees desire to assume all of such rights and obligations,
it being understood that such assignment and assumption will in no way relieve
Assignor of such obligations and that Assignor and Assignees will be jointly and
severally liable with respect to such obligations.
C. The Parties desire to make certain amendments to the Purchase Agreement
as described herein.
D. Capitalized terms used and not defined herein have the meanings given to
such terms in the Purchase Agreement.
AGREEMENT
In consideration of the mutual promises herein made and for other good and
valuable consideration, the sufficiency of which is hereby acknowledged, the
Parties hereby agree as follows:
Section 1. ASSIGNMENT. Pursuant and subject to Section 11.6 of the Purchase
Agreement, Assignor hereby assigns, transfers, conveys, and delivers to each
Assignee an undivided one-half interest in all of Assignor's rights and
interests under the Purchase Agreement. On the terms and conditions set forth
herein, Sellers hereby consent to such assignment, which consent shall be
effective when this Agreement has been executed and delivered by all Parties.
<PAGE>
Section 2. ASSUMPTION. Pursuant and subject to Section 11.6 of the Purchase
Agreement, each Assignee hereby assumes and agrees to perform and fully
discharge all of Assignor's rights, obligations and interests under the Purchase
Agreement, it being understood that such assumption will in no way relieve
Assignor of such obligations and that Assignor and Assignees will be jointly and
severally liable with respect to such obligations.
Section 3. AMENDMENTS. Effective as of the date hereof, the Purchase
Agreement is hereby amended as follow:
(a) DEFINITION OF "BUYER". All references in the Purchase Agreement
to "Buyer" are hereby modified to refer to Multicanal and Cablevision,
collectively, as Buyers.
(b) PURPOSE OF AGREEMENT. Section 2.1 (a) of the Purchase Agreement
is hereeby amended to add the following sentences at the end thereof:
"If any Buyer breaches any of its obligations under this
Agreement on the Closing Date, then the non-breaching Buyer, if
any, will fulfill the obligations of the breaching Buyer to the
extent of such breach on the Closing Date. If the Buyers do not
fulfill all of their obligations that are to be fulfilled on the
Closing Date, then Supercanal Holding S.A.will, no later than
12:00 noon New York time on October 30, 1997, satisfy and perform
such obligations in full as primary obligor hereunder.
Notwithstanding the foregoing, each of the Buyers and Supercanal
Holding S.A. shall be and remain jointly and severally liable for
the performance in full of all obligations of the Buyers
hereunder, PROVIDED HOWEVER that after payment in full of the
Escrow Deposit and the Purchase Price to the Sellers (the
"Payment") by the Buyers, Supercanal Holding S.A.will be released
of any obligation under the Purchase Agreement; and PROVIDED
FURTHER that after the Payment, Buyers and Sellers do hereby
covenant and agree that it will not under any circumstances hold
or attempt to hold Supercanal Holding S.A. liable or any claim
that might arise under this Agreement and the Purchase Agreement,
and Buyers further agree that they will at all times indemnify
and hold harmless Supercanal Holding S.A. for all costs and
damages for which it might hereafter become liable by reason of
the non performance or non compliance of any kind of obligation
of the Buyers under the Purchase Agreement and this Agreement.
Simultaneously with the Payment the Buyers shall pay to
Supercanal Holding S.A. a sum equal to the amount of the initial
payment made by Supercanal Holding S.A. to the Sellers on October
20, 1997, by wire to the account of Supercanal Holding S.A. N(0)
115-013738/7 at Banco Credicoop, it being understood, however,
that such payment obligation will in no event be or become the
responsibility of any Seller and that the non compliance by the
Buyers in doing such payment will in no event affect the validity
of this Agreement.
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<PAGE>
(c) CLOSING DELIVERIES. Section 2.2(b) of the Purchase Agreement is
hereby amended to read in its entirety as follows:
"At the Closing (i) the Sellers will deliver to the Buyers,
according to joint instructions to the Sellers' Representative
executed by both Buyers, any and all certificates representing
the Shares and will take all necessary acts to perfect the
transfer of the Shares and note in the name of the Person or
entity so design by the Buyers the transfer in the Companies'
Stock Registry Books, free of Liens and Restrictions, with the
exception of the authorization provided for in Article 46 clause
(f) of the Broadcasting Law, if applicable, and (ii) UIHA will
assign to the Buyers all of its rights under the Local Group
Purchase Agreement."
(d) PAYMENT OF PURCHASE PRICE. Section 2.6 of the Purchase Agreement
is hereby amended to read in its entirety as follows:
"All payments to be made pursuant to this Agreement shall be made
to the Sellers' Representative by wire transfer of immediately
available funds to such bank accounts as are specified by
Sellers' Representative to Buyers in writing at least one
Business Day before the Closing. To the extent any portion of the
Purchase Price is not paid on the Closing Date by any Buyer, the
other Buyer shall pay such amount no later than 10:00 a.m. New
York time on October 30, 1997. To the extent any portion of the
Purchase Price is not paid by 10 a.m. New York time on October
30, 1997, Supercanal Holding S.A. shall pay such amount no later
than 12:00 noon New York time on October 30, 1997."
(e) SANTO TOME. The first sentence of Section 2.7 of the Purchase
Agreement is hereby modified to read in its entirety as follows:
"At any time within eight months after the Closing, UIHA may
enter into an agreement to purchase all of the outstanding stock
of Cablevideo Santo Tome S.A. (the "Santo Tome Shares")."
(f) REPRESENTATIONS AND WARRANTIES OF SELLERS. It is hereby agreed
that the representations and warranties included in Article 3 of the
Purchase Agreement will run to the benefit of each Assignee to the same
extent that such representations and warranties currently run to the
benefit of Assignor.
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<PAGE>
(g ASSETS AND CONTROLLED AFFILIATES IN THE UNITED STATES. A new
Section 3.19 of the Purchase Agreement is hereby added, to read in its
entirety as follows:
"ASSETS AND CONTROLLED AFFILIATES IN THE UNITED STATES. None of
the Companies is incorporated in the United States, or organized
under the laws of the United States, or has its principal offices
within the United States. None of the Companies, nor any entity
that they control, nor all such controlled entities in the
aggregate, hold assets located in the United States having an
aggregate book value of $15,000,000 or more, and none of the
Companies directly or indirectly controls any corporation that is
incorporated in the United States, is organized under the laws of
the United States, or has its principal offices within the United
States. As used in this Section 3.19, the term "control" means
(a) holding 50% or more of the outstanding voting securities of
an issuer; (b) in the case of an entity that has no outstanding
voting securities, having the right to 50% or more of the
entity's profits, or having the right in the event of dissolution
to 50% or more of the entity's assets; or (c) having the
contractual power presently to designate 50% or more of the
directors of a corporation, or in the case of unincorporated
entities, of individuals exercising similar functions."
(h) REPRESENTATIONS AND WARRANTIES OF ASSIGNEES. Each of Multicanal
and Cablevision hereby represents and warrants, as of the date hereof, each
representation and warranty set forth in Sections 4.1 and 4.2 of the
Purchase Agreement.
(i) BROKERS, AGENTS, FINDERS, ETC. Section 4.3 of the Purchase
Agreement is hereby amended to read in its entirety as follows:
"BROKERS, AGENTS, FINDERS, ETC. Neither the Buyers nor Supercanal
Holding S.A. nor any of their respective agents have retained or
hired any broker, agent or finder, nor have they agreed to pay
any fee, commission or similar payment to any person under this
Agreement or under any Additional Agreement or in respect of the
transactions contemplated herein or therein, except, with respect
to Supercanal Holding S.A., for Integra Financial Services LLC,
Smith Barney, and ING Bank ("ING"). No Seller will have any
liability relating to any obligation arising under any of the
arrangements described in the preceding sentence."
(j) DIRECTORS' EXPENSES. A new Section 5.11 of the Purchase Agreement
is hereby added, to read in its entirety as follows:
"DIRECTORS' EXPENSES. Schedule 5.11 sets forth a list of expenses
that have been approved by the Companies. Buyers and Supercanal
Holding S.A. hereby covenant that, subject to the condition that
those expenses have not been and shall not be taken into account
in order to increase the Purchase Price or the estimated Purchase
Price (i) they will take no action, directly or indirectly, that
would have the effect of negating such approval and (ii) they
will take no action, directly or indirectly, that would have the
effect of requiring the beneficiaries of such approval to
reimburse the Companies for such approved expenses."
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<PAGE>
(k) INDEMNIFICATION.
(i) It is hereby agreed that the indemnification obligations of
Sellers included in Article 9 of the Purchase Agreement will run to
the benefit of each Assignee to the same extent that such
indemnification obligations currently run to the benefit of Assignor.
(ii) Section 9.2(f) is hereby amended to add the following
sentence at the end thereof:
"Each of the Buyers and Supercanal Holding S.A. shall be and
remain jointly and severally liable for the performance in
full of all obligations of the Buyers hereunder."
(l) LOCAL GROUP SHARES. UIHA will assign its rights and obligations
under the Local Group Purchase Agreement to Assignees before the Closing.
Therefore, (i) Assignees will purchase the Local Group Shares directly from
Priano and Serrao, (ii) the Local Group Shares will be delivered to
Assignees directly by Priano and Serrao, and (iii) the purchase price for
the Local Group Shares will be paid by Assignees directly to Priano and
Serrao to such bank accounts as are specified by Priano and Serrao to
Assignees in writing at least one Business Day before the Closing. Any
provision to the contrary in the Purchase Agreement is hereby amended
accordingly.
(m) NOTICES. Any and all notices to be provided by "Buyer" under the
Purchase Agreement will be valid only when signed by both Multicanal and
Cablevision. Section 11.1 of the Purchase Agreement is hereby amended to
delete the heading "Buyer" and replace it with the heading "Supercanal
Holding S.A." and to add the heading "Buyers" and to include the following
information thereunder:
"Multicanal S.A.
Hipolito Yrigoyen 1628
2nd Piso
1344 Buenos Aires
Buenos Aires, Argentina
Tel: 011-54-1-375-3629
Fax: 011-54-1-375-2580
Cablevision S.A.
Tucuman 1, piso 18
1049 Buenos Aires, Argentina
Attn.: Fernando R. Borio
Tel: 011-54-1-334-5530
Fax: 011-54-1-334-1995
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<PAGE>
Copy to:
Estudio de los Dres. O'Farrell
Avenida de Mayo 645, piso 1
1084 Buenos Aires
Buenos Aires, Argentina
Attn.: Pablo H. Miguens
Tel: 011-54-1-346-1000
Fax: 011-54-1-346-1000
Hope, Duggan & Silva
Avenida L.N. Alem 1110
Piso 3
1001 Buenos Aires
Buenos Aires, Argentina
Attn.: Gotardo C. Pedemonte
Tel: 011-54-1-315-1314
Fax: 011-54-1-315-0606
Saenz Valiente & Padilla
Hipolito Yrigoyen 1628
2nd Piso
1344 Buenos Aires
Attn.: Juan Maria de la Vega
Tel: 011-54-1-375-3629
Fax: 011-54-1-375-2580"
(n) ESCROW AGREEMENT. The Form of Escrow Agreement attached to the
Purchase Agreement as Exhibit A is hereby deleted and replaced in its
entirety by the Form of Escrow Agreement attached hereto as Exhibit A.
Section 4. MISCELLANEOUS.
(a) EFFECT. Except as specifically amended by this Agreement, the
Purchase Agreement will remain in full force and effect. All references to
the "Agreement" in the Purchase Agreement will hereafter be deemed to refer
to the Purchase Agreement as amended hereby.
(b) SUCCESSORS AND ASSIGNS. This Agreement will be binding upon and
inure to the benefit of the Parties and their respective successors and
permitted assigns.
(c) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original but all of which
together will constitute one and the same instrument.
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<PAGE>
(d) NOTICES. All notices, requests, demands, claims, and other
communications hereunder will be delivered to the Parties as provided in
the Stock Purchase Agreement, as amended hereby.
(e) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the domestic laws of the State of Colorado, without giving
effect to any choice of law or conflict of law provision or rule (whether
of the State of Colorado or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of
Colorado. Any dispute, controversy or claim arising out of or relating to
this Agreement will be resolved by the state courts of Colorado or the
federal courts located within the State of Colorado. The Parties consent to
personal jurisdiction of such courts in any such disputes. The Parties
consent to service of process through notice given under Section 11.1 of
the Purchase Agreement, as amended hereby, in connection with any such
dispute and waive any other requirements for service of process.
(f) AMENDMENTS AND WAIVERS. No amendment of any provision of this
Agreement will be valid unless it is in writing and signed by all of the
Parties. Failure or delay of any Party at any time or from time to time to
exercise any right under or enforce any provision of this Agreement will
not be construed as implying a waiver of such provision or of that Party's
right to exercise or enforce it subsequently. No single or partial exercise
of any right hereunder by any Party will preclude the further or full
exercise of the right by such Party. No waiver of any default on any one
occasion by a Party will constitute a waiver of any subsequent or other
default by such Party.
(g) SEVERABILITY. If any provision of this Agreement or the
applications thereof to any Person or circumstance is held by an authority
of competent jurisdiction to be invalid or unenforceable to any extent, the
remainder of this Agreement, and the application of such provision to other
Persons or circumstances, will not be affected thereby and will be enforced
to the greatest extent permitted by applicable Law. In such case, the
Parties will amend this Agreement to effect, to the fullest extent possible
under applicable Laws, the original intent of the Parties with respect to
such invalid or unenforceable provision.
(h) FURTHER ASSURANCES. The Parties will execute, acknowledge and
deliver or cause to be executed, acknowledged and delivered such
instruments and take such other action as may be reasonably necessary or
advisable to carry out their obligations under this Agreement.
(i) HEADINGS. The Section headings in this Agreement are for
convenience only and will not be used for interpretation hereof nor
considered part of this Agreement.
(j) ASSIGNMENT. Except for assignments to Affiliates, no Party will
assign any of its rights or obligations under this Agreement unless it
obtains prior written consent of the other Parties. For any assignment
under the preceding sentence by the Assignor or any Assignee, the proposed
assignee, as a condition to the effectiveness of such assignment, must
assume all obligations hereunder as co-obligor with the applicable
assignor.
7
<PAGE>
(k) EXPENSES. Each Party will pay its own expenses incurred in
connection with the preparation, negotiation and execution of this
Agreement.
* * * * *
8
<PAGE>
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first above written.
SUPERCANAL HOLDING S.A.
By: ______________________________
Name: ______________________________
Title: ______________________________
MULTICANAL S.A.
By: ______________________________
Name: ______________________________
Title: ______________________________
CABLEVISION S.A.
By: ______________________________
Name: ______________________________
Title: ______________________________
UIH ARGENTINA, INC.
/s/ Bradley Johnson
By: ______________________________
Name: Bradley Johnson
Title: Attorney-in-fact
CV AMERICAN HOLDINGS L.L.C.
/s/ Bradley Johnson
By: ______________________________
Name: Bradley Johnson
Title: Attorney-in-fact
9