Exhibit 10.1
PURCHASE AND CONTRIBUTION AGREEMENT
Entered into as of April 13, 2005
among
VTR GLOBALCOM S.A.,
LIBERTY COMUNICACIONES DE CHILE UNO LTDA.,
and
CRISTALERÍAS DE CHILE S.A.
TABLE OF CONTENTS
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PURCHASE AND CONTRIBUTION
AGREEMENT
This Purchase and Contribution
Agreement is entered into as of April 13, 2005, by and
between
VTR GLOBALCOM S.A.
, a sociedad anónima
duly organized and validly existing under the laws of Chile
(“ VTR ”), represented by Rodrigo Castillo
Murillo,with domicile at Reyes Lavalle 3340, 9th Floor, Las Condes,
Santiago, Chile;
LIBERTY COMUNICACIONES DE CHILE
UNO LTDA. , a sociedad
de responsabilidad limitada duly organized and validly existing
under the laws of Chile (“ Uno ”), represented
by Max Letelier Bomchil, with domicile at Isidora Goyenechea 3120,
Third Floor, Las Condes, Santiago, Chile; and
CRISTALERÍAS DE CHILE
S.A. , a sociedad
anónima duly organized and validly existing under the laws
of Chile (“ CCC ”), represented by Cirilo Elton
González and Baltazar Sánchez Guzmán, both with
domicile at Hendaya 60, Suite 201, Las Condes, Santiago,
Chile.
VTR, Uno, and CCC are sometimes referred to
herein individually as a “ Party ” and
collectively as the “ Parties .” Uno and
CCC are sometimes referred to herein individually as a “
Transferor ” and collectively as the “
Transferors .” Capitalized terms used and not
otherwise defined in this Agreement have the respective meanings
ascribed thereto in Article I.
RECITALS
A.
Uno owns (a) shares
representing 50% of the outstanding share capital of
Metrópolis-Intercom S.A., a Chilean sociedad
anónima (“ Metrópolis ”), as
described on Schedule A, (b) one share of Proser S.A., a
Chilean sociedad anónima (“ Proser
”), as described on Schedule A, and (c) the
Metrópolis/Uno Shareholder Debt.
B.
CCC owns (a) shares
representing 50% of the outstanding share capital of
Metrópolis, as described on Schedule A, (b) one
share of Proser, as described on Schedule A, and
(c) through its wholly owned Subsidiary CristalChile
Inversiones S.A., a Chilean sociedad anónima (“
CCInversiones ”), the Metrópolis/CCC Shareholder
Debt.
C.
Metrópolis owns and operates
Systems in Chile.
D.
Metrópolis owns the remaining
share capital of Proser S.A., as described on
Schedule A.
E.
Prior to the date hereof,
(a) Cordillera Comunicaciones Holding Limitada and its
Subsidiary Cordillera Comunicaciones Limitada were dissolved and
liquidated and the share capital of Metrópolis owned by either
of them was distributed to CristalChile Comunicaciones S.A. and
Uno, and (b) CristalChile Comunicaciones S.A. was dissolved
and CCC succeeded it in its ownship of the share capital of
Metrópolis and Proser owned by it.
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F.
Uno desires to (a) sell to VTR,
and VTR desires to purchase from Uno, all but one share of the
issued and outstanding share capital of Metrópolis that is
owned by Uno, in consideration for, among other things, the
Deferred Purchase Price; (b) transfer to VTR’s
Subsidiary VTR Net S.A. the remaining share of Metrópolis that
is owned by Uno; (c) sell to VTR, and VTR desires to purchase
from Uno, the Metrópolis/Uno Shareholder Debt pursuant to the
Uno Debt DPPO; and (d) transfer to VTR Net S.A. the single
share of Proser that is owned by Uno.
G.
CCC desires to (a) contribute
to VTR all of the issued and outstanding share capital of
Metrópolis that is owned by CCC, in consideration for, among
other things, newly issued shares of VTR Stock representing 20% of
the outstanding share capital of VTR after such issuance;
(b) cause CCInversiones to sell to VTR, and VTR desires to
purchase from CCInversiones, the Metrópolis/CCC Shareholder
Debt pursuant to the CCC Debt DPPO; and (c) transfer to
Metrópolis the single share of Proser owned by CCC.
H.
VTR owns and operates Systems in
Chile.
AGREEMENT
In consideration of the mutual
promises, covenants, and agreements set forth herein and other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties hereby agree as
follows:
For purposes of this Agreement, the
following terms have the following meanings:
Acquisition
: The direct acquisition by
VTR of the shares of Metrópolis Stock and the indirect
acquisition by VTR of the shares of Proser Stock, in each case
pursuant to this Agreement.
Action : As defined in
Section 8.5(a).
Affiliate : Affiliate of a Person means any Person
that directly, or indirectly through one or more intermediaries,
Controls, is Controlled by, or is under common Control with, the
Person in question.
Agreement : This Purchase and Contribution Agreement
(including the Exhibits, Disclosure Schedules (but not the
Metrópolis Disclosure Bundle), and other Schedules attached
hereto).
Antitrust Resolution
: The resolution issued by
the Tribunal de Defensa de la Libre Competencia of Chile on
October 25, 2004, which became final and nonappealable on
March 10, 2005 as a result of a ruling by the Chilean Supreme
Court.
Basket Amount
: As defined in
Section 8.6(a).
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Basket Exceptions
: As defined in
Section 8.6(a).
Business Day
: Any day other than Saturday,
Sunday, and a day on which banks in Denver, Colorado, U.S.A. or
Santiago, Chile are required or permitted to close.
CCC : As defined in the preamble.
CCC Debt DPPO
: The assignment agreement,
executed in the form of a public deed dated as of the date hereof,
pursuant to which the Metrópolis/CCC Shareholder Debt is being
assigned by CCInversiones to VTR, and in consideration therefor VTR
is agreeing to pay to CCInversiones the amount of US$10,521,784.83,
on the terms and conditions stated therein.
CCC Disclosure
Schedule . The
schedule so named, dated the date hereof, delivered by CCC to
VTR.
CCC Material Adverse
Effect : A Material
Adverse Effect with respect to CCC.
CCC Subscription and Transfer
Agreement : As
defined in Section 2.4(a)(ii).
CCC Waiver and Release
: As defined in
Section 2.4(a)(vi).
CCInversiones
: As defined in the
recitals.
Chile : The Republic of Chile.
Chilean Pesos
: Pesos, the lawful currency
of Chile.
Closing : The closing of (a) the contribution
by CCC of its Metrópolis Stock to VTR in exchange for VTR
Stock, (b) the transfer by CCC of its single share of Proser
Stock to Metrópolis, (c) the sale by CCInversiones of the
Metrópolis/CCC Shareholder Debt to VTR pursuant to the CCC
Debt DPPO, (d) the sale by Uno of its Metrópolis Stock to
VTR in exchange for the Deferred Purchase Price, (e) the
transfer by Uno of its single share of Proser Stock to VTR Net
S.A., and (f) the sale by Uno of the Metrópolis/Uno
Shareholder Debt to VTR pursuant to the Uno Debt DPPO.
Code : The U.S. Internal Revenue Code of
1986.
Confidential VTR
Information : As
defined in Section 6.1(a).
Contract : Any note, bond, indenture, debenture,
security agreement, trust agreement, mortgage, lease, contract,
license, franchise, permit, guaranty, joint venture agreement, or
other agreement, instrument, commitment, or obligation, whether
oral or written.
Control : The ability to direct or cause the
direction (whether through the ownership of voting securities, by
contract, or otherwise) of the management and policies of a Person
or to control (whether affirmatively or negatively and whether
through the ownership of voting securities, by contract, or
otherwise) the decision of such Person to engage in the
particular
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conduct at issue. A Person will be
rebuttably presumed to control an Entity if such Person owns,
directly or indirectly through one or more intermediaries,
(a) sufficient shares of stock or other equity interests of
such Entity to allow such Person, under ordinary circumstances, to
elect or direct the election of a majority of the members of the
board of directors or other governing body of such Entity or
(b) shares of stock or other equity interests of such Entity
representing, in the aggregate, more than 50% of the aggregate
outstanding economic interests in such Entity.
Controlled Affiliate
: A Controlled Affiliate of a
Person means any Entity that is an Affiliate of such Person and
that such Person directly, or indirectly through one or more
intermediaries, Controls.
Corporations Law
: Chilean Law N°18,046
on Corporations (Ley de Sociedades Anónimas)
.
Deferred Purchase
Price : As defined
in Section 2.2(b).
Disclosure Schedules
: Any of the CCC Disclosure
Schedule, the Metrópolis Disclosure Schedule, the Uno
Disclosure Schedule, and the VTR Disclosure Schedule, as
applicable.
Dispute Resolution
Agreement : As
defined in Section 2.4(a)(xi).
Dollars : Dollars, the lawful currency of the
U.S.
DPP Obligation
: As defined in
Section 2.2(b).
Entity : Any sociedad anónima ,
sociedad de responsabilidad limitada , corporation, general
or limited partnership, limited liability company, joint venture,
trust, association, unincorporated entity of any kind, or
Governmental Authority.
Environmental Laws
: Any and all present Chilean
Laws relating to the regulation or protection of the environment or
human health or to emissions, discharges, releases or threatened
releases of pollutants, contaminants, chemicals or toxic or
hazardous substances or wastes into the indoor or outdoor
environment.
Equipment : With respect to a System, all of such
System’s equipment, including towers, tower equipment,
antennas, above-ground and underground cable, distribution systems,
head-end amplifiers, line amplifiers, earth satellite receiver
stations and related equipment, microwave equipment, testing
equipment, tools, inventory, spare parts, and all other tangible
property and facilities owned, used or held for use in such
System.
Filing : Any written registration, declaration,
application, or filing.
GAAP : Generally accepted accounting principles
as used in Chile as in effect on the date hereof.
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Governing Documents
: The estatutos
sociales , escritura de constitución social ,
articles or certificate of incorporation or association, general or
limited partnership agreement, limited liability company or
operating agreement, bylaws, or other governing documents of any
Entity.
Governmental Authority
: Any Chilean national,
regional, or local, or any foreign, court, governmental department,
commission, authority, board, bureau, agency, official, or other
instrumentality.
Guaranty : As defined in
Section 2.4(a)(xii).
Home Passed
: Each dwelling unit that can
be connected to a System without the need of further extending the
distribution plant; provided , however , that with
respect to Video MMDS Subscribers, one home passed is equal to one
Video MMDS Subscriber.
Improvements
: As defined in
Section 4.7(c).
Indebtedness
: Without duplication,
(a) all obligations created, issued, or incurred for borrowed
money (whether by loan, the issuance and sale of debt securities,
or the sale of property to another Person subject to an
understanding or agreement, contingent or otherwise, to repurchase
such property from such other Person); (b) all obligations to
pay the deferred purchase price or acquisition price of property or
services (other than accrued expenses and trade accounts payable
incurred in the ordinary course of business that are not more than
90 days past due); (c) all indebtedness evidenced by a note,
bond, debenture, or similar instrument; (d) the principal
amount of all obligations under or in respect of leases capitalized
in accordance with GAAP; (e) all obligations in respect of
letters of credit or similar instruments issued or accepted by
banks and other financial institutions; (f) all payment
obligations under any interest rate protection agreements, currency
hedge agreements, and similar agreements to the extent constituting
a liability under GAAP; and (g) all obligations under
guarantees with respect to any of the foregoing.
Indemnified Party
: As defined in
Section 8.5(a).
Indemnifying Party
: As defined in
Section 8.5(a).
Intellectual Property
: All of the following:
(a) all inventions (whether patentable or unpatentable and
whether or not reduced to practice), all improvements thereto, and
all patents, patent applications, and patent disclosures, together
with all reissuances, continuations, continuations-in-part,
revisions, extensions, and reexaminations thereof, (b) all
trademarks, service marks, trade dress, logos, slogans, trade
names, corporate names, Internet domain names, and rights in
telephone numbers, together with all translations, adaptations,
derivations, and combinations thereof and including all goodwill
associated therewith, and all applications, registrations, and
renewals in connection therewith, (c) all copyrightable works,
all copyrights, and all applications, registrations, and renewals
in connection therewith, (d) all mask works and all
applications, registrations, and renewals in connection therewith,
(e) all trade secrets and confidential business information
(including ideas, research and development, know-how, formulas,
compositions, manufacturing and production processes and
techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information,
and
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business and marketing plans and proposals),
(f) all computer software (including source code, executable
code, data, databases, and related documentation), (g) all
material advertising and promotional materials, (h) all other
proprietary rights, and (i) all copies and tangible
embodiments of any of the foregoing (in whatever form or
medium).
Internet Subscriber
: A dwelling unit or
commercial unit with one or more cable modems connected to a
System, where a customer has requested and is receiving Internet
access services through such cable modem(s), including as part of
any bundling arrangement with a third party. For purposes of
this definition, any unit receiving such services without an
obligation to pay consideration or fees therefor shall not be
considered an Internet Subscriber.
Judgment : Any judgment, writ, order, decree,
injunction, award, restraining order, or ruling of or by any court,
judge, justice, arbitrator, or magistrate, including any bankruptcy
court or judge, and any writ, order, decree, or ruling of or by any
Governmental Authority.
Law : Any Chilean national, regional, or
local, or any foreign, statute, code, ordinance, rule, regulation,
Judgment, regulatory agreement with a Governmental Authority, or
general principle of common or civil law or equity.
Legal Proceedings
: Any private or governmental
action, suit, complaint, arbitration, legal, or administrative
proceeding or investigation.
Licenses : All franchises, concessions, licenses,
permits, authorizations, certificates, variances, exemptions,
consents, leases, rights of way, easements, instruments, orders,
and approvals issued by any Governmental Authority.
Lien : Any (a) security agreement,
conditional sale agreement, or other title retention agreement;
(b) lease, consignment, or bailment given for security
purposes; and (c) lien, charge, restrictive agreement,
prohibition against transfer, mortgage, pledge, option,
encumbrance, adverse interest, security interest, claim,
attachment, exception to or defect in title, or other ownership
interest (including reservations, rights of entry, possibilities of
reverter, encroachments, easements, rights of way, restrictive
covenants, leases, and Licenses granted to other Persons) of any
kind, but excluding any of the foregoing created or imposed by or
pursuant to this Agreement or any other Transaction
Document.
LMC : Liberty Media Corporation, a Delaware
U.S.A. corporation.
LMI : Liberty Media International, Inc.,
a Delaware U.S.A. corporation.
LMINT : Liberty Media International Holdings,
LLC, a Delaware U.S.A. limited liability company.
LMINT/LMC Waiver and
Release : As
defined in Section 2.4(a)(vii).
Losses : Losses, liabilities, damages, dues,
deficiencies, assessments, Liens, fines, interest, penalties,
costs, expenses, and obligations, including amounts reasonably paid
in settlement, prosecuting, defending, or otherwise, and reasonable
legal, accounting, experts, and
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other fees, costs, and expenses, in connection
with claims, actions, suits, proceedings, hearings, investigations,
charges, complaints, demands, injunctions, Judgments, orders,
decrees, and rulings.
Material Adverse
Change or Material
Adverse Effect : With respect to any Person, (a) any
event, change, or effect that is materially adverse to the
condition (financial or otherwise), properties, assets,
liabilities, business, operations, or results of operations, of
such Person and its Subsidiaries (with such Subsidiaries being
determined immediately prior to the Closing), taken as a whole,
except to the extent that such change, event, or effect is
attributable to or results from (i) changes affecting the
securities or capital markets or economic conditions generally in
the country or countries in which such Person or group of Persons
conduct their businesses, (ii) changes affecting the
industries in which such Person or group of Persons operate
generally (as opposed to changes affecting any such Person or group
of Persons specifically or predominantly), (iii) the effect of
the public announcement of this Agreement or the pendency of the
transactions contemplated hereby and by the other Transaction
Documents, or (iv) changes in GAAP or in generally accepted
accounting principles in the U.S.A., or (b) if such Person is
a Party hereto or a party to any other Transaction Document, any
event, change, or circumstance that has a material adverse effect
on the ability of such Person to perform its obligations under, and
to consummate the transactions contemplated by, this Agreement and
the other Transaction Documents, as applicable.
Metrópolis
: As defined in the
recitals.
Metrópolis Audited Balance
Sheet Date : As
defined in Section 4.6(a).
Metrópolis Audited
Consolidated Balance Sheets : As defined in
Section 4.6(a).
Metrópolis/CCC Shareholder
Debt : The
Indebtedness owed by Metrópolis to CCInversiones represented
by the Acknowledgement of Debt (Reconocimiento de Deuda) ,
dated as of the date hereof, pursuant to which Metrópolis
acknowledged its debt to CCC in the amount of $6,060,758,500
Chilean Pesos.
Metrópolis Confidentiality
Agreements : The
Confidentiality Agreement dated as of March 24, 2004 between
Metrópolis and ULA, and the Confidentiality Agreement dated as
of February 11, 2005 between Metrópolis and VTR relating
to the confidential information of Metrópolis.
Metrópolis Credit
Agreement : The
Contrato de Crédito Sindicado , dated as of
June 8, 2001, among Metrópolis, as borrower, and Banco
Santiago, Banco del Estado de Chile, Banco de Crédito e
Inversiones, and Corpbanca, as lenders, including any related
notes, guarantees, collateral documents, instruments, and
agreements executed in connection therewith.
Metrópolis Disclosure
Bundle : The
collection of documents so named, dated the date hereof, delivered
by Uno and CCC to VTR.
Metrópolis Disclosure
Schedule : The
schedule so named, dated the date hereof, delivered by Uno and
CCC to VTR.
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Metrópolis Equity
Affiliate : As
defined in Section 4.5(a).
Metrópolis Financial
Statements : As
defined in Section 4.6(a).
Metrópolis
Investment : As
defined in Section 4.5(a).
Metrópolis Investment
Agreements : As
defined in Section 4.5(a).
Metrópolis Leased Real
Property : All real
property and interests in real property leased by Metrópolis
or Proser or used by Metrópolis or Proser and material to its
business and not otherwise owned (together with all buildings,
structures, improvements, and fixtures located thereon, and all
easements and other rights and interests appurtenant
thereto).
Metrópolis Licensed
Intellectual Property : As defined in
Section 4.9.
Metrópolis Material Adverse
Effect : A Material
Adverse Effect with respect to Metrópolis.
Metrópolis Owned
Intellectual Property : As defined in
Section 4.9.
Metrópolis Owned Real
Property : All real
property and interests in real property owned by Metrópolis or
Proser (together with all buildings, structures, improvements, and
fixtures located thereon, and all easements and other rights and
interests appurtenant thereto).
Metrópolis Stock
: The registered shares of
Metrópolis.
Metrópolis Stub
Period : As defined
in Section 4.6(a).
Metrópolis Unaudited Balance
Sheet Date : As
defined in Section 4.6(a).
Metrópolis Unaudited
Consolidated Balance Sheet : As defined in
Section 4.6(a).
Metrópolis/Uno Shareholder
Debt : The
Indebtedness owed by Metrópolis to Uno represented by the
Acknowledgement of Debt (Reconocimiento de Deuda) , dated as
of the date hereof, pursuant to which Metrópolis acknowledged
its debt to Uno in the amount of $6,060,758,500 Chilean
Pesos.
Net Debt : On any date of determination, the result
of (a) the aggregate amount of Indebtedness minus
(b) the aggregate amount of cash and cash
equivalents.
Nondisclosure
Agreement . The
Nondisclosure Agreement dated as of December 29, 2003 between
Bitrán & Asociados and UGC.
Observado Exchange
Rate : The Observado
Exchange Rate means, for any given date, the exchange rate Chilean
Pesos/Dollars published by the Central Bank of Chile in the
Official Gazette for such date, pursuant to Chapter I of Title I of
the Compendium of Foreign Exchange Regulations (or, if the Central
Bank of Chile ceases to publish such exchange rate, the exchange
rate replacing such exchange rate). If the Observado Exchange
Rate is not so available for any
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reason, the Observado Exchange Rate will mean
the Observado Exchange Rate published in the manner set forth above
on the Business Day immediately preceding such date.
Official Gazette
: The Diario Oficial de la
República de Chile .
Party or Parties : As defined in the
preamble.
Permitted Liens
: With respect to any Person, the
following Liens: (a) Liens for Taxes, assessments, or other
governmental charges or levies not yet due and payable or that are
being contested in good faith through appropriate proceedings and
for which appropriate reserves (as determined on a GAAP basis) have
been established; (b) Liens of carriers, warehousemen,
mechanics, materialmen, and landlords incurred in the ordinary
course of business for sums not yet due; (c) Liens incurred in
the ordinary course of business in connection with workmen’s
compensation, unemployment insurance, or other forms of
governmental insurance or benefits, or to secure performance of
tenders, statutory obligations, leases, and Contracts (other than
for borrowed money) entered into in the ordinary course of business
or to secure obligations on surety or appeal bonds;
(d) purchase money security interests or Liens on property
acquired or held by the applicable Person in the ordinary course of
business to secure the purchase price of such property or to secure
indebtedness incurred solely for the purpose of financing the
acquisition of such property; and (e) easements, restrictions,
and other minor defects of title that are not, in the aggregate,
material or which do not, individually or in the aggregate,
materially and adversely affect the value of the property affected
thereby.
Person : Any natural person or Entity.
Post-Closing Period
: Any period that begins
after the date hereof and, with respect to any period that begins
before the date hereof and ends after the date hereof, the portion
of that period beginning after the date hereof.
Pre-Closing Period
: Any period that ends on or
prior to the date hereof and, with respect to any period that
begins before the date hereof and ends after the date hereof, the
portion of that period ending on the date hereof.
Preemptive Rights
: The preferred rights that
the shareholders of a sociedad anónima have, pursuant
to Article 25 of the Corporations Law, entitling them to
purchase newly issued shares of such sociedad anónima
in accordance with their pro rata shareholding.
Proser : As defined in the recitals
.
Proser Stock
: The registered shares of
Proser.
Put Agreement
: As defined in
Section 2.4(a)(viii).
Required CCC Consents
: Any required notices,
Filings, consents, approvals, or waivers set forth in
Section 3.1(d) of the CCC Disclosure Schedule.
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Required Consents
: Any of the Required CCC
Consents, the Required Metrópolis Consents, the Required Uno
Consents, and the Required VTR Consents, as applicable.
Required Metrópolis
Consents : Any
required notices, Filings, consents, approvals, or waivers set
forth in Section 4.3(a) of the Metrópolis Disclosure
Schedule.
Required Uno Consents
: Any required notices,
Filings, consents, approvals, or waivers set forth in
Section 3.1(d) of the Uno Disclosure Schedule.
Required VTR Consents
: Any required notices,
Filings, consents, approvals, or waivers set forth in
Section 3.2(d) of the VTR Disclosure Schedule.
Restriction
: With respect to any share
capital, partnership interest, membership right or membership
interest in a limited liability company, or other equity interest
or security, any voting or other trust or agreement, option,
warrant, preemptive right (other than Preemptive Rights pursuant to
the Corporations Law), right of first offer, right of first
refusal, escrow arrangement, proxy, buy-sell agreement, power of
attorney, or other Contract (but excluding this Agreement and the
other Transaction Documents), or any License that, conditionally or
unconditionally, (a) grants to any Person the right to
purchase or otherwise acquire, or obligates any Person to sell or
otherwise dispose of or issue, or otherwise gives or, whether upon
the occurrence of any event or with notice or lapse of time or both
or otherwise, may give any Person the right to acquire (i) any
such share capital, partnership interest, membership right or
membership interest in a limited liability company, or other equity
interest or security; (ii) any proceeds of, or any
distributions paid or that are or may become payable with respect
to, any such share capital, partnership interest, membership right
or membership interest in a limited liability company, or other
equity interest or security; or (iii) any interest in such
share capital, partnership interest, membership right or membership
interest in a limited liability company, or other equity interest
or security or any such proceeds or distributions;
(b) restricts or, whether upon the occurrence of any event or
with notice or lapse of time or both or otherwise, is reasonably
likely to restrict the transfer or voting of, or the exercise of
any rights or the enjoyment of any benefits arising by reason of
ownership of, any such share capital, partnership interest,
membership right or membership interest in a limited liability
company, or other equity interest or security or any such proceeds
or distributions; or (c) creates or, whether upon the
occurrence of any event or with notice or lapse of time or both or
otherwise, is reasonably likely to create a Lien or purported Lien
affecting such share capital, partnership interest, membership
right or membership interest in a limited liability company, or
other equity interest or security, proceeds or distributions;
provided , however , that for all purposes of this
Agreement, the Antitrust Resolution will not be considered to
constitute or impose a Restriction.
RGU : Separately, a Video Cable Subscriber,
Video MMDS Subscriber, Internet Subscriber, or Telephone
Subscriber. A customer may constitute one or more RGUs.
For example, if a residential customer subscribes to cable
television service (whether by cable or multipoint microwave
(wireless) distribution systems), voice service and Internet access
service, the customer constitutes three RGUs.
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Services : Collectively, (a) cable television
services, whether such services include basic or premium
programming, expanded basic programming, or lifeline service
representing the lowest regulated tier of video services;
(b) Internet access services received through one or more
cable modems connected to a broadband network; and (c) voice
services through a broadband network.
Shareholders Agreement
: As defined in
Section 2.4(a)(v).
Strategic Contracts
: Collectively, (a) the
following Contracts: (i) the Contrato de Uso y Goce de
Canalizaciones, Fibra Oscura y Espacios , dated July 3,
2000; (ii) the Contrato de Uso y Goce de Fibra Oscura y
Espacios , dated January 10, 2003; (iii) the
Contrato de Uso y Goce de Red, Fibra Oscura y Espacios en
Concepción , dated January 10, 2003; (iv) the
Contrato , dated July 31, 2003; (v) the
Contrato de Prestación de Servicios , dated
July 20, 2004; (vi) the Contrato de Agente Autorizado
de Ventas , dated August 1, 2003; and (vii) the
Contrato de Servicio Megavía DSL , dated March 14,
2003; (b) the Acuerdo Comercial para la Prestación de
Servicios de Transporte y Distribución de las Señales de
Televisión por Cable , dated January 7, 1997, between
Televisión y Telecomunicaciones Manquehue S.A. and
Metrópolis; (c) the Contrato sobre Transmisión de
Telefonía IP , dated June 10, 2003, between
Metrópolis and Voissnet S.A.; and (d) the Contrato
, dated November 14, 2003, between Metrópolis and
Telefónica del Sur S.A.
Subsidiary
: With respect to any
Person:
(a)
a corporation a majority in voting
power of whose share capital with voting power, under ordinary
circumstances, to elect directors is at the time, directly or
indirectly, owned by such Person, by a Subsidiary of such Person,
or by such Person and one or more Subsidiaries of such Person,
without regard to whether the voting of such stock is subject to a
voting agreement or similar Restriction,
(b)
a partnership or limited liability
company in which such Person or a Subsidiary of such Person is, at
the date of determination, (i) in the case of a partnership, a
general partner of such partnership with the power affirmatively to
direct the policies and management of such partnership or
(ii) in the case of a limited liability company, the managing
member or, in the absence of a managing member, a member with the
power affirmatively to direct the policies and management of such
limited liability company, or
(c)
any Entity (other than a
corporation, partnership, or limited liability company) in which
such Person, a Subsidiary of such Person, or such Person and one or
more Subsidiaries of such Person, directly or indirectly, at the
date of determination thereof, has (i) the power to elect or
direct the election of a majority of the members of the governing
body of such Person (whether or not such power is subject to a
voting agreement or similar Restriction) or (ii) in the
absence of such a governing body, at least a majority ownership
interest.
System : A broadband communications system,
including cable and fiber-optic broadband networks, multipoint
microwave (wireless) distribution systems, and all related
Equipment.
11
Tax or Taxes : All taxes, however
denominated, including any monetary adjustments, interest,
penalties or other additions to tax that may become payable in
respect thereof, imposed by any Tax Authority, which taxes include,
without limiting the generality of the foregoing, all income or
profits taxes, payroll and employee withholding taxes, unemployment
insurance, social security taxes, income withholding taxes, sales
and use taxes, value added taxes, ad valorem taxes, excise taxes,
franchise taxes, gross receipts taxes, business or municipal
license (patente municipal) taxes, occupation taxes, real
and personal property taxes, stamp taxes, environmental taxes,
severance taxes, production taxes, transfer taxes, workers’
compensation, governmental charges, and other obligations of the
same or of a similar nature to any of the foregoing.
Tax Authority
: Any national, regional,
local, or municipal or other governmental body or authority of any
kind with the power to impose any Tax.
Tax Liability Issue
: As defined in
Section (b)(ii) of the “Tax Controversies”
section of Schedule C (“Tax
Matters”).
Tax Proceeding
: As defined in
Section (b)(ii) of the “Tax Controversies”
section of Schedule C (“Tax
Matters”).
Tax Returns
: All returns, declarations,
reports, forms, claims for refund, estimates, information returns,
and statements and other documentation, including amendments,
required to be maintained or filed with or supplied to any Tax
Authority in connection with any Taxes.
Telephone Subscriber
: A dwelling unit or
commercial unit connected to a System, where a customer has
requested and is receiving voice services, including as part of any
bundling arrangement with a third party. For purposes of this
definition, any unit receiving such services without an obligation
to pay consideration or fees therefor shall not be considered a
Telephone Subscriber.
Term Sheet
: The Term Sheet for
Metrópolis/VTR Merger dated January 23, 2004 among LMINT,
LMC, and CristalChile Comunicaciones S.A.
Transaction Documents
: This Agreement, the
Shareholders Agreement, the Put Agreement, the Dispute Resolution
Agreement, the Guaranty, the CCC Subscription and Transfer
Agreement, the Uno Transfer Agreement, the CCC Waiver and Release,
the LMINT/LMC Waiver and Release, the VTR Loan, the CCC Debt DPPO,
and the Uno Debt DPPO, and any and all other documents,
instruments, and agreements being or to be executed and delivered
in connection with the transactions contemplated hereby (including
in connection with the satisfaction of each Party’s
conditions hereunder) or thereby.
Transferor
or Transferors : As
defined in the preamble.
Transferor Indemnified
Parties or Transferor
Indemnified Party : As defined in
Section 8.4(a).
12
Two-Way Home Passed
: Each Home Passed that may
receive the installation of a two-way addressable set-top
converter, cable modem, transceiver, and/or voice port which, in
most cases, allow for the provision of video programming and
Internet access services, and in some cases voice
services.
UGC : UnitedGlobalCom, Inc., a Delaware
U.S.A. corporation.
UGC/LMI Merger
Agreement : The
Agreement and Plan of Merger, dated as of January 17, 2005, by
and among New Cheetah, Inc., a Delaware corporation, LMI, UGC,
Cheetah Acquisition Corp., a Delaware corporation, and Tiger Global
Acquisition Corp., a Delaware corporation.
ULA : United Latin America, Inc., a
Colorado U.S.A. corporation.
United Chile
: United Chile, Inc., a
Colorado U.S.A. corporation.
United Chile Ventures
: United Chile Ventures Inc.,
a Cayman Islands corporation.
Uno : As defined in the preamble.
Uno Debt DPPO
: The assignment agreement,
executed in the form of a public deed dated as of the date hereof,
pursuant to which the Metrópolis/Uno Shareholder Debt is being
assigned by Uno to VTR, and in consideration therefor VTR is
agreeing to pay to Uno the amount of US$12,519,714.38, on terms and
conditions substantially similar to the DPP Obligation.
Uno Disclosure
Schedule . The
schedule so named, dated the date hereof, delivered by Uno to
the other Parties.
Uno Material Adverse
Effect : A Material
Adverse Effect with respect to Uno.
Uno Transfer Agreement
: As defined in
Section 2.2(b).
U.S. or U.S.A.
: The United States of
America.
US$ : Dollars.
Video Cable Subscriber
: A dwelling unit or
commercial unit where a customer has requested and is receiving
basic cable video programming services, counted on a per-connection
basis, including as part of any bundling arrangement with a third
party; provided , however , that commercial contracts
with parties such as hotels and hospitals are counted on an
equivalent bulk unit (EBU) basis, with EBU being calculated by
dividing the bulk price charged to accounts in the area in which
the commercial facility is located by the most prevalent price
charged to non-bulk residential customers in that area for the
comparable tier of service. For purposes of this definition,
any unit receiving such service without an obligation to pay
consideration or fees therefor shall not be considered a Video
Cable Subscriber.
13
Video MMDS Subscriber
: A dwelling unit or
commercial unit where a customer has requested and is receiving
video programming services via a multipoint microwave (wireless)
distribution system. For purposes of this definition, any
unit receiving such services without an obligation to pay
consideration or fees therefor shall not be considered a Video MMDS
Subscriber.
VTR : As defined in the preamble.
VTR Audited Balance
Sheets : As defined
in Section 5.4(a).
VTR Audited Balance Sheet
Date : As defined
in Section 5.4(a).
VTR Capital Increase
: As defined in
Section 6.6.
VTR Capital Reduction
Debt : The
Indebtedness owed by VTR to United Chile and United Chile Ventures
in respect of the capital reductions approved by the general
shareholders meeting of VTR on February 16, 2005, and
March 28, 2005, in the amounts of $18,390,159,200 Chilean
Pesos and $19,925,250,000 Chilean Pesos, respectively.
VTR Confidentiality
Agreement : The
Confidentiality Agreement dated as of February 11, 2005
between Metrópolis and VTR relating to the confidential
information of VTR.
VTR Credit Agreement
: The Modificación y
Reprogramación de Contratos de Préstamos, Contrato de
Préstamo y Contrato de Apertura de Crédito , dated as
of the date hereof, among VTR, as borrower, Scotiabank Sud
Americano, Banco Bice, and Citibank, N.A., Agencia en Chile, as
lenders, and Citibank, N.A., Agencia en Chile, as administrative
agent and collateral agent, including any related notes,
guarantees, collateral documents, instruments, and agreements
executed in connection therewith, as such agreement and/or related
documents may be amended, restated, supplemented, renewed,
replaced, or otherwise modified from time to time whether or not
with the same lenders or agents, and irrespective of any changes in
the terms and conditions thereof.
VTR Disclosure
Schedule . The
schedule so named, dated the date hereof, delivered by VTR to
the other Parties.
VTR Financial
Statements : As
defined in Section 5.4(a).
VTR Indemnified
Parties or VTR
Indemnified Party : As defined in
Section 8.2(a).
VTR Leased Real
Property : All real
property and interests in real property leased by VTR or any of its
Subsidiaries or used by VTR or any of its Subsidiaries and material
to their businesses taken as a whole and not otherwise owned
(together with all buildings, structures, improvements, and
fixtures located thereon, and all easements and other rights and
interests appurtenant thereto).
VTR Licensed Intellectual
Property : As
defined in Section 5.7.
14
VTR Material Adverse
Effect : A Material
Adverse Effect with respect to VTR.
VTR Owned Intellectual
Property : As
defined in Section 5.7.
VTR Owned Real
Property : All real
property and interests in real property owned by VTR or any of its
Subsidiaries (together with all buildings, structures,
improvements, and fixtures located thereon, and all easements and
other rights and interests appurtenant thereto).
VTR Loan : As defined in
Section 6.7.
VTR Stock : The registered shares of VTR.
VTR Unaudited Balance
Sheet : As defined
in Section 5.4(a).
VTR Unaudited Balance Sheet
Date : As defined
in Section 5.4(a).
ARTICLE II
ACQUISITION; CLOSING
Section 2.1
Contribution; Purchase and
Sale .
(a)
On and subject to
the terms and conditions of this Agreement, simultaneously with the
execution and delivery of this Agreement by the Parties,
(i) CCC is contributing as equity to VTR all of the shares of
Metrópolis Stock owned by CCC, and VTR is issuing shares of
VTR Stock specified in Section 2.2(a) as consideration
therefor; (ii) CCC is transferring to Metrópolis the
single share of Proser Stock owned by CCC; and (iii) CCC is
causing CCInversiones to sell to VTR the Metrópolis/CCC
Shareholder Debt pursuant to the CCC Debt DPPO.
(b)
On and subject to
the terms and conditions of this Agreement, simultaneously with the
execution and delivery of this Agreement by the Parties,
(i) VTR is purchasing from Uno, and Uno is selling to VTR, all
but one of the shares of Metrópolis Stock owned by Uno, for
the consideration specified in Section 2.2(b); (ii) Uno
is transferring to VTR Net S.A. a single share of Metrópolis
Stock owned by Uno; (iii) Uno is transferring to VTR Net S.A.
the single share of Proser Stock owned by Uno; and (iv) Uno is
selling to VTR the Metrópolis/Uno Shareholder Debt pursuant to
the Uno Debt DPPO.
Section 2.2
Issuance of VTR Stock; Purchase
Price .
(a)
Simultaneously
with the execution and delivery of this Agreement by the Parties,
and in consideration for the shares of Metrópolis Stock being
contributed by CCC to VTR pursuant to Section 2.1(a), VTR is
issuing to CCC shares of VTR Stock equal to 20% of the outstanding
share capital of VTR immediately after such issuance.
(b)
The purchase
price being paid by VTR to Uno under this Agreement, and in
consideration for the shares of Metrópolis Stock being sold by
Uno to VTR pursuant to
15
Section 2.1(b), is
US$121,550,625.00 (the “ Deferred Purchase Price
”). The Deferred Purchase Price must be paid on or
before the fourth anniversary of the date hereof, under the terms
and conditions of the share transfer agreement being executed and
delivered by VTR and Uno by means of a public deed in the form
attached hereto as Exhibit A (the “ Uno Transfer
Agreement ”), which evidences, among other matters:
(i) the transfer by Uno, and the acquisition by VTR, of all of
the issued and outstanding shares of Metrópolis Stock owned by
Uno (except for the one share of Metrópolis Stock being
transferred to VTR Net S.A. pursuant to Section 2.1(b)); and
(ii) the obligation (the “ DPP Obligation
”) of VTR to pay Uno the Deferred Purchase Price for such
shares, on the terms and conditions described therein.
Notwithstanding any other provision of this Agreement, the Uno
Transfer Agreement and Uno’s rights thereunder will be freely
transferable and assignable by Uno and by subsequent holders
thereof to any Person, subject to the VTR Credit
Agreement.
Section 2.3
Closing . The execution and delivery of this Agreement
by the Parties and the Closing are taking place simultaneously at
the offices of Carey y Cía. Ltda., located at Miraflores 222,
24 th Floor, Santiago, Chile.
Section 2.4
Closing Deliveries
. At the Closing:
(a)
CCC Closing
Deliveries . Simultaneously with
the execution and delivery of this Agreement by the Parties,
(1) CCC is contributing as equity, transferring, assigning,
conveying, and delivering to VTR, in exchange for newly issued
shares of VTR Stock, all of the shares of Metrópolis Stock
owned by CCC; (2) CCC is transferring, assigning, conveying,
and delivering to Metrópolis the single share of Proser Stock
owned by CCC, in each of the preceding clauses (1) and
(2) free and clear of all Liens and Restrictions other than
Liens or Restrictions (w) created by this Agreement or any of
the other Transaction Documents, (x) imposed by the Governing
Documents of Metrópolis or Proser generally on all shares of
Metrópolis Stock or Proser Stock, as applicable,
(y) imposed by VTR or any of its Subsidiaries, or
(z) Preemptive Rights pursuant to the Corporations Law; and
(3) CCC is causing CCInversiones to sell to VTR the
Metrópolis/CCC Shareholder Debt pursuant to the CCC Debt
DPPO. In connection with the foregoing, CCC is delivering or
causing to be delivered:
(i)
to VTR,
certificates representing all of the issued and outstanding shares
of Metrópolis Stock owned by CCC;
(ii)
to VTR, a
counterpart of the subscription and transfer agreement in the form
attached hereto as Exhibit B (the “ CCC Subscription
and Transfer Agreement ”), duly executed by CCC and
evidencing: (A) the issuance and delivery to CCC of, and the
subscription by CCC for, VTR Stock equal to 20% of the outstanding
VTR Stock immediately after the Closing; and (B) in
consideration for the subscription of the VTR Stock, the
contribution and transfer by CCC to VTR of all of the issued and
outstanding shares of Metrópolis Stock owned by
CCC;
16
(iii)
to VTR, a share
transfer document ( traspaso de acciones ) evidencing the
transfer to Metrópolis of the single share of Proser Stock
owned by CCC, duly executed by CCC and Metrópolis;
(iv)
to VTR, the CCC
Debt DPPO, duly executed by CCInversiones;
(v)
to VTR, United
Chile, and United Chile Ventures, counterparts of the Shareholders
Agreement in the form attached hereto as Exhibit C (the
“ Shareholders Agreement ”), duly executed by
CCC;
(vi)
to LMINT, a
counterpart of the waiver and release in the form attached hereto
as Exhibit D (the “ CCC Waiver and Release
”), duly executed by CCC;
(vii)
to LMINT and LMC,
a counterpart of the waiver and release in the form attached hereto
as Exhibit E (the “ LMINT/LMC Waiver and Release
”), duly executed by CCC;
(viii)
to UGC, a
counterpart of the Put Agreement in the form attached hereto as
Exhibit F (the “ Put Agreement ”), duly
executed by CCC;
(ix)
to VTR, all of
the following, to the extent that they are in the possession of
CCC, Metrópolis, Proser, or any of their respective
Affiliates: shareholders registries of Metrópolis and
Proser, minutes of meetings of each of the board of directors and
the shareholders of Metrópolis and Proser, and all other books
and records of Metrópolis and Proser, except to the extent any
of such items are required by applicable Law to remain at the
offices of Metrópolis or Proser;
(x)
[Intentionally
omitted]
(xi)
to United Chile,
United Chile Ventures, VTR, and Uno, counterparts of the Dispute
Resolution Agreement in the form attached hereto as Exhibit G
(the “ Dispute Resolution Agreement ”), duly
executed by CCC and CCInversiones;
(xii)
to LMI, the
Guaranty in the form attached hereto as Exhibit H (the “
Guaranty ”), duly executed by CCC;
(xiii)
to VTR, evidence
that (A) Cordillera Comunicaciones Holding Limitada and its
Subsidiary Cordillera Comunicaciones Limitada have been dissolved
and liquidated and the shares of Metrópolis Stock and Proser
Stock that were owned by Cordillera Comunicaciones Holding Limitada
and its Subsidiary Cordillera Comunicaciones Limitada have been
distributed one half to CristalChile Comunicaciones S.A. and one
half to Uno, and
17
(B) CristalChile
Comunicaciones S.A. has been dissolved and that CCC has succeeded
it in its ownship of the Metrópolis Stock and Proser Stock
owned by it, in each case satisfactory to VTR in its reasonable
discretion;
(xiv)
to VTR, a copy of
the Metrópolis Disclosure Bundle, which copy has been reviewed
and initialed by representatives of each Party in order to ensure
that it is identical to the copies being retained by Uno and CCC;
and
(xv)
to VTR or Uno, as
applicable, such documents and instruments as VTR or Uno has
reasonably requested, including any documents that VTR has
reasonably requested for purposes of satisfying its obligations
under the VTR Credit Agreement.
(b)
Uno Closing
Deliveries . Simultaneously with
the execution and delivery of this Agreement by the Parties,
(1) Uno is selling, transferring, assigning, conveying, and
delivering to VTR all but one share of Metrópolis Stock owned
by Uno, in exchange for the Deferred Purchase Price; (2) Uno
is transferring, assigning, conveying, and delivering to VTR Net
S.A. one share of Metrópolis Stock owned by Uno; (3) Uno
is transferring, assigning, conveying, and delivering to VTR Net
S.A. the single share of Proser Stock owned by Uno, in case of each
of the preceding clauses (1), (2), and (3), free and clear of all
Liens and Restrictions other than Liens or Restrictions
(w) created by this Agreement or any of the other Transaction
Documents, (x) imposed by the Governing Documents of
Metrópolis or Proser generally on all shares of
Metrópolis Stock or Proser Stock, as applicable,
(y) imposed by VTR or any of its Subsidiaries, or
(z) Preemptive Rights pursuant to the Corporations Law; and
(4) Uno is selling to VTR the Metrópolis/Uno Shareholder
Debt pursuant to the Uno Debt DPPO. In connection with the
foregoing, Uno is delivering or causing to be
delivered:
(i)
to VTR,
certificates representing all but one share of Metrópolis
Stock owned by Uno, and the Uno Transfer Agreement, duly executed
by Uno;
(ii)
to VTR, a share
transfer document ( traspaso de acciones ) evidencing the
transfer to VTR Net S.A. of one share of Metrópolis Stock
owned by Uno, duly executed by Uno, and a share transfer document (
traspaso de acciones ) evidencing the transfer to VTR Net
S.A. of the single share of Proser Stock owned by Uno, duly
executed by Uno;
(iii)
to VTR, the Uno
Debt DPPO, duly executed by Uno;
(iv)
to CCC, a
counterpart of the CCC Waiver and Release, duly executed by LMINT
and LMC;
18
(v)
to CCC, a
counterpart of the LMINT/LMC Waiver and Release, duly executed by
LMINT and LMC;
(vi)
to CCC, the
Guaranty, duly executed by LMI;
(vii)
to United Chile,
United Chile Ventures, VTR, CCC, and CCInversiones, counterparts of
the Dispute Resolution Agreement, duly executed by Uno;
(viii)
to CCC and VTR,
as applicable, a certificate from each of LMINT, LMC, and LMI, each
dated the date hereof and signed by an appropriate and duly
authorized officer or representative of such Entity, certifying
that (A) such Entity is duly organized, validly existing, and
in good standing under the Laws of its jurisdiction of
organization; (B) such Entity has all requisite corporate or
other Entity power and authority to enter into, and to perform its
obligations under, each Transaction Document being or to be
executed and delivered by it; (C) the execution and delivery
by such Entity of each Transaction Document being or to be executed
and delivered by it, and the performance by it of its obligations
under each Transaction Document being or to be executed and
delivered by it, have been duly authorized by all requisite
corporate or other Entity action; (D) each Transaction
Document being or to be executed and delivered by such Entity has
been or will be duly executed and delivered by it, and assuming the
due execution and delivery by each other party thereto, each
Transaction Document being or to be executed and delivered by it
constitutes the legal, valid, and binding obligation of it,
enforceable against it in accordance with its terms, except as such
enforceability may be affected by applicable bankruptcy,
reorganization, insolvency, moratorium, or similar Laws affecting
creditors’ rights generally; (E) except for those that
have been obtained or made and those that by their nature are to be
obtained or made after the date hereof, no consent, approval, or
waiver of, notice to, or Filing with, any other Person is required,
on behalf of such Entity in connection with the execution,
delivery, or performance by it of the Transaction Document being or
to be executed and delivered by it, or the consummation of the
transactions contemplated thereby; and (F) the execution and
delivery by such Entity of the Transaction Documents being or to be
executed and delivered by it do not, and the performance by it of
its obligations under the Transaction Documents being or to be
executed and delivered by it, and the consummation of the
transactions contemplated thereby do not and will not,
(1) violate or conflict with any provision of its Governing
Documents; (2) violate any of the terms, conditions, or
provisions of any Law
19
in effect on the
date of this Agreement and applicable to such Entity, except that
no representation is made with respect to any Law of any
jurisdiction in which it does not, directly or through a
Subsidiary, own assets or engage in business; (3) result in a
violation or breach of, or (with or without the giving of notice or
lapse of time or both) constitute a default (or give rise to any
right of termination, cancellation, acceleration, repurchase,
prepayment, repayment, or increased payments) under, or give rise
to or accelerate any material obligation (including any obligation
to, or to offer to, repurchase, prepay, repay, or make increased
payments), or result in the loss or modification of any material
benefit under, or pursuant to, any Contract to which it is a party
or by which it or any of its assets is bound; or (4) with
respect to LMINT and LMI, result in a Lien or Restriction (other
than any Lien or Restriction of the type referred to in the first
sentence of Section 3.1(g)) on any of the Metrópolis
Stock or Proser Stock being acquired by VTR or VTR Net S.A. from
Uno pursuant to this Agreement;
(ix)
to VTR, all of
the following, to the extent that they are in the possession of Uno
or any of its Affiliates (not including UGC or any of its
Subsidiaries): shareholders registries of Metrópolis and
Proser, minutes of meetings of each of the board of directors and
the shareholders of Metrópolis and Proser, and all other books
and records of Metrópolis and Proser, except to the extent any
of such items are required by applicable Law to remain at the
offices of Metrópolis or Proser;
(x)
[Intentionally
omitted]
(xi)
to VTR, a copy of
the Metrópolis Disclosure Bundle, which copy has been reviewed
and initialed by representatives of each Party in order to ensure
that it is identical to the copies being retained by Uno and CCC;
and
(xii)
to VTR or CCC, as
applicable, such other documents and instruments as VTR or CCC has
reasonably requested, including any documents that VTR has
reasonably requested for purposes of satisfying its obligations
under the VTR Credit Agreement.
(c)
VTR Closing
Deliveries . Simultaneously with
the execution and delivery of this Agreement by the Parties,
(1) VTR is acquiring all of the shares of Metrópolis
Stock owned by CCC, as specified in Section 2.4(a)(i) and
Section 2.4(a)(ii); (2) Metrópolis is acquiring the
single share of Proser Stock owned by CCC, as specified in
Section 2.4(a)(iii); (3) VTR is acquiring the
Metrópolis/CCC Shareholder Debt from CCInversiones pursuant to
the CCC Debt DPPO, as specified in
Section 2.4(a)(iv);
20
(4) VTR is
acquiring all but one share of Metrópolis Stock owned by Uno,
as specified in Section 2.4(b)(i); (5) VTR Net S.A. is
acquiring one share of Metrópolis Stock owned by Uno, as
specified in Section 2.4(b)(ii); (6) VTR Net S.A. is
acquiring one share of Proser Stock owned by Uno, as specified in
Section 2.4(b)(ii); and (7) VTR is acquiring the
Metrópolis/Uno Shareholder Debt from Uno pursuant to the Uno
Debt DPPO, as specified in Section 2.4(b)(iii). In
connection with the foregoing, VTR is delivering or causing to be
delivered:
(i)
to CCC,
certificates in the name of CCC representing shares of VTR Stock
equal to 20% of the outstanding share capital of VTR immediately
after the Closing free and clear of all Liens and Restrictions
other than Liens or Restrictions (A) created by this Agreement
or any of the other Transaction Documents, (B) imposed by the
Governing Documents of VTR generally on all shares of VTR Stock, or
(C) Preemptive Rights pursuant to the Corporations Law; and a
counterpart of the CCC Subscription and Transfer Agreement, duly
executed by VTR;
(ii)
to CCC, a
counterpart of the Shareholders Agreement, duly executed by United
Chile, United Chile Ventures, and VTR;
(iii)
to Uno, the Uno
Transfer Agreement, duly executed by VTR;
(iv)
to Uno, the share
transfer document ( traspaso de acciones ) referred to in
Section 2.4(b)(ii) evidencing the transfer to VTR Net
S.A. of one share of Metrópolis Stock owned by Uno, duly
executed by VTR Net S.A.; and the share transfer document (
traspaso de acciones ) referred to in
Section 2.4(b)(ii) evidencing the transfer to VTR Net
S.A. of one share of Proser Stock owned by Uno, duly executed by
VTR Net S.A.;
(v)
to CCC, a
counterpart of the Put Agreement, duly executed by UGC;
(vi)
to Uno, CCC, and
CCInversiones, counterparts of the Dispute Resolution Agreement,
duly executed by United Chile, United Chile Ventures, and
VTR;
(vii)
to CCC and Uno,
as applicable, a certificate from each of UGC, ULA, United Chile,
and United Chile Ventures, each dated the date hereof and signed by
an appropriate and duly authorized officer or representative of
such Entity, certifying that (A) such Entity has all requisite
corporate power and authority to enter into, and to perform its
obligations under, each Transaction Document to which it is or will
be a party; (B) the execution and delivery by such Entity of
each Transaction Document to which it is or will be a party, and
the performance by it of its obligations under Transaction
Documents to which it is or will be
21
a party, have
been duly authorized by all requisite corporate action;
(C) each Transaction Document being or to be executed and
delivered by such Entity has been, or will be, duly executed and
delivered by it, and assuming the due execution and delivery by
each other party thereto, each Transaction Document being or to be
executed and delivered by it constitutes the legal, valid, and
binding obligation of it, enforceable against it in accordance with
its terms, except as such enforceability may be affected by
applicable bankruptcy, reorganization, insolvency, moratorium, or
similar Laws affecting creditors’ rights generally;
(D) except for those that have been obtained or made and those
that by their nature are to be obtained or made after the date
hereof, no consent, approval, or waiver of, notice to, or Filing
with, any other Person is required on behalf of such Entity in
connection with the execution, delivery, or performance by it of
any Transaction Document being or to be executed and delivered by
it, or the consummation of the transactions contemplated thereby;
and (E) the execution and delivery by such Entity of the
Transaction Documents being or to be executed and delivered by it
do not, and the performance by it of its obligations under the
Transaction Documents being or to be executed and delivered by it
and the consummation of the transactions contemplated thereby do
not and will not, (1) violate or conflict with any provision
of its Governing Documents; (2) violate any of the terms,
conditions, or provisions of any Law in effect on the date of this
Agreement and applicable to such Entity, except that no
representation is made with respect to any Law of any jurisdiction
in which it does not, directly or through a Subsidiary, own assets
or engage in business; or (3) result in a violation or breach
of, or (with or without the giving of notice or lapse of time or
both) constitute a default (or give rise to any right of
termination, cancellation, acceleration, repurchase, prepayment,
repayment, or increased payments) under, or give rise to or
accelerate any material obligation (including any obligation to, or
to offer to, repurchase, prepay, repay, or make increased
payments), or result in the loss or modification of any material
benefit under, or pursuant to, any Contract to which it is a party
or by which it or any of its assets is bound;
(viii)
to CCC and Uno,
the CCC Debt DPPO and the Uno Debt DPPO, respectively, in each case
duly executed by VTR; and
(ix)
to Uno or CCC, as
applicable, such other documents and instruments as Uno or CCC has
reasonably requested.
22
Section 2.5
Term Sheet
. CCC, LMINT, and LMC hereby
agree that upon the execution and delivery of this Agreement by the
Parties and by LMINT and LMC, the Term Sheet is hereby terminated,
and this Agreement and the other Transaction Documents contain, and
are intended as, a complete statement of all of the terms of the
agreements among LMINT, LMC, and the Parties with respect to the
matters provided for in the Term Sheet, and supersede and discharge
the Term Sheet.
Section 2.6
Prior Agreements
. LMC, Uno, and CCC hereby
agree that upon the execution and delivery of this Agreement by the
Parties and by LMC, all Contracts (other than this Agreement and
the other Transaction Documents) relating to their ownership
interests in Metrópolis and Proser, including (A) the
Agreement, dated May 17, 2000, among CCC, CristalChile
Comunicaciones S.A., Uno, and LMC, and (B) the Agreement,
dated June 20, 2000, among CristalChile Comunicaciones S.A.,
Uno, and LMC, are hereby terminated.
Section 2.7
Metrópolis Confidentiality
Agreements . ULA,
VTR, and Metrópolis hereby agree that upon the execution and
delivery of this Agreement by the Parties and by ULA and
Metrópolis, the Metrópolis Confidentiality Agreements are
hereby terminated.
Section 2.8
UGC/LMI Merger
Agreement . For all
purposes of the UGC/LMI Merger Agreement, including
Section 7.3 thereof, LMI hereby consents to and approves this
Agreement, the other Transaction Documents, and the transactions
contemplated by this Agreement and the other Transaction
Documents.
ARTICLE III
TRANSACTION REPRESENTATIONS AND WARRANTIES
Section 3.1
Transferor Representations and
Warranties . Each
Transferor represents and warrants (as to itself only) to VTR that
the statements contained in this Section 3.1 are correct and
complete as of the date of this Agreement.
(a)
Organization
. It
(i) is duly organized, validly existing, and in good standing
under the Laws of its jurisdiction of organization and
(ii) has all requisite corporate or other Entity power and
authority to own, lease, and operate its properties and to carry on
its business as now being conducted.
(b)
Power and
Authority . (i) It has all
requisite corporate or other Entity power and authority to enter
into, and to perform its obligations under, this Agreement and each
Transaction Document being or to be executed and delivered by it
pursuant to this Agreement; and (ii) the execution and
delivery by it of this Agreement and each Transaction Document to
which it is or will be a party, and the performance by it of its
obligations under this Agreement and each Transaction Document to
which it is or will be a party, have been duly authorized by all
requisite corporate or other Entity action.
(c)
Validity
. Each of
this Agreement and the other Transaction Documents being or to be
executed and delivered by it have been duly executed and delivered
by it, and assuming the due execution and delivery by each other
party hereto and thereto, this Agreement constitutes, and when
executed and delivered by it pursuant to this
23
Agreement, each
Transaction Document being or to be executed and delivered by it
will constitute, the legal, valid, and binding obligation of it,
enforceable against it in accordance with its terms, except as such
enforceability may be affected by applicable bankruptcy,
reorganization, insolvency, moratorium, or similar Laws affecting
creditors’ rights generally.
(d)
Consents
. Except
for any required notices, Filings, consents, approvals, or waivers
set forth in Section 3.1(d) of its Disclosure
Schedule or that have been obtained or made, no consent,
approval, or waiver of, notice to, or Filing with, any other Person
is required, on behalf of it in connection with the execution,
delivery, or performance by it of this Agreement or any of the
other Transaction Documents being or to be executed and delivered
by it, or the consummation of the transactions contemplated hereby
and thereby.
(e)
No
Conflicts . The execution and
delivery by it of this Agreement and the other Transaction
Documents being or to be executed and delivered by it do not, and
the performance by it of its obligations under this Agreement and
the other Transaction Documents being or to be executed and
delivered by it and the consummation of the transactions
contemplated hereby and thereby do not and will not,
(i) violate or conflict with any provision of its Governing
Documents; (ii) violate any of the terms, conditions, or
provisions of any Law in effect on the date of this Agreement or
License to which it is subject or by which it or any of its assets
is bound, except that no representation is made with respect to any
Law of any jurisdiction in which it does not, directly or through a
Subsidiary, own assets or engage in business; (iii) except as
set forth in Section 3.1(e) of its Disclosure Schedule,
result in a violation or breach of, or (with or without the giving
of notice or lapse of time or both) constitute a default (or give
rise to any right of termination, cancellation, acceleration,
repurchase, prepayment, repayment, or increased payments) under, or
give rise to or accelerate any material obligation (including any
obligation to, or to offer to, repurchase, prepay, repay, or make
increased payments), or result in the loss or modification of any
material benefit under, or pursuant to, any Contract to which it is
a party or by which it or any of its assets is bound; or
(iv) result in a Lien or Restriction (other than any Lien or
Restriction of the type referred to in the first sentence of
Section 3.1(g)) on any of the Metrópolis Stock being
acquired by VTR or VTR Net S.A. from it pursuant to this Agreement
or on any of the Proser Stock being acquired by Metrópolis or
VTR Net S.A. from it pursuant to this Agreement.
(f)
Brokers’
and Finders’ Fees . There is no broker,
finder, investment banker, or similar intermediary that has been
retained by, or is authorized to act on behalf of, it or any of its
Affiliates (other than Metrópolis and Proser, with respect to
which Section 4.4 will apply, and with respect to Uno, not
including UGC or any of its Subsidiaries) or any of their
respective officers or directors who will be entitled to any fee or
commission in connection with this Agreement or any other
Transaction Document or upon consummation of the transactions
contemplated hereby or thereby and which fee or commission could
reasonably be expected to be or become a liability of UGC, any of
UGC’s Subsidiaries, Metrópolis, or Proser.
24
(g)
Ownership of
Metrópolis Stock and Proser Stock . It is the owner of,
and has good and valid title to, all of the shares of
Metrópolis Stock and Proser Stock set forth next to its name
on Schedule A, free and clear of all Liens and Restrictions
other than Liens or Restrictions (i) created by this Agreement
or any of the other Transaction Documents, (ii) imposed by the
Governing Documents of Metrópolis or Proser generally on all
shares of Metrópolis Stock or Proser Stock, as applicable,
(iii) imposed by VTR or any of its Subsidiaries, or
(iv) Preemptive Rights pursuant to the Corporations Law, and
such shares of Metrópolis Stock or Proser Stock include all
voting and dividend rights and interests in respect of capital, and
corporate funds of any kind, purpose, or denomination, such as
reserve, revaluation, credit, profit, and dividend funds, whether
accumulated or not, that have not been distributed, even if
agreements are pending with regard to their distribution or to
which such Transferor is otherwise entitled as the owner thereof as
of the date hereof, whether originating in the current business
year or any previous business year. There are no voting
trusts, proxies, powers of attorney, or other agreements or
understandings with respect to the voting of such Metrópolis
Stock or Proser Stock, other than the agreements listed in
Section 3.1(g) of its Disclosure Schedule, true, correct,
and complete copies of which have been provided to VTR. It
does not own any of the share capital or any other interest in
Metrópolis or Proser other than the Metrópolis Stock and
the Proser Stock owned by it, as fully set forth on
Schedule A.
(h)
Interested
Party Transactions . Other than
transactions required or permitted by this Agreement or the other
Transaction Documents, Section 3.1(h) of its Disclosure
Schedule lists all Contracts between Metrópolis or
Proser, on the one hand, and, on the other hand, (i) it or any
of its Affiliates (other than Metrópolis or Proser, and with
respect to Uno, not including UGC or any of its Subsidiaries) or
(ii) any director, officer, or employee of it or any of its
Affiliates (other than Metrópolis or Proser, and with respect
to Uno, not including UGC or any of its Subsidiaries), in each case
that has not yet been fully performed.
(i)
Investment
Intent . CCC is acquiring the
VTR Stock pursuant to this Agreement for investment purposes
only.
Section 3.2
VTR’s Representations and
Warranties. VTR
represents and warrants to the Transferors that the statements
contained in this Section 3.2 are correct and complete as of
the date of this Agreement.
(a)
Organization
. It
(i) is a sociedad anónima , duly organized,
validly existing, and in good standing under the Laws of its
jurisdiction of organization; and (ii) has all requisite
corporate or other Entity power and authority to own, lease, and
operate its properties and to carry on its business as now being
conducted.
(b)
Power and
Authority . (i) It has all
requisite corporate or other Entity power and authority to enter
into, and to perform its obligations under, this Agreement and each
Transaction Document being or to be executed and delivered by it
pursuant to this Agreement; and (ii) the execution and
delivery by it of this Agreement and each
25
Transaction
Document to which it is or will be a party, and the performance by
it of its obligations under this Agreement and each Transaction
Document to which it is or will be a party, have been duly
authorized by all requisite corporate or other Entity
action.
(c)
Validity
. Each of
this Agreement and the other Transaction Documents being or to be
executed and delivered by it has been, or will be, duly executed
and delivered by it, and assuming the due execution and delivery by
each other party hereto and thereto, this Agreement constitutes,
and when executed and delivered by it pursuant to this Agreement,
each Transaction Document being or to be executed and delivered by
it will constitute, the legal, valid, and binding obligation of it,
enforceable against it in accordance with its terms, except as such
enforceability may be affected by applicable bankruptcy,
reorganization, insolvency, moratorium, or similar Laws affecting
creditors’ rights generally.
(d)
Consents
. Except
for any required notices, Filings, consents, approvals, or waivers
set forth in Section 3.2(d) of its Disclosure
Schedule or that have been obtained or made, no consent,
approval, or waiver of, notice to, or Filing with, any other Person
is required, on behalf of it in connection with the execution,
delivery, or performance by it of this Agreement or any of the
other Transaction Documents being or to be executed and delivered
by it, or the consummation of the transactions contemplated hereby
and thereby.
(e)
No
Conflicts . The execution and
delivery by it of this Agreement and the other Transaction
Documents being or to be executed and delivered by it do not, and
the performance by it of its obligations under this Agreement and
the other Transaction Documents being or to be executed and
delivered by it and the consummation of the transactions
contemplated hereby and thereby do not and will not,
(i) violate or conflict with any provision of its Governing
Documents; (ii) violate any of the terms, conditions, or
provisions of any Law in effect on the date of this Agreement or
License to which it is subject or by which it or any of its assets
is bound, except that no representation is made with respect to any
Law of any jurisdiction in which it does not, directly or through a
Subsidiary, own assets or engage in business; (iii) result in
a violation or breach of, or (with or without the giving of notice
or lapse of time or both) constitute a default (or give rise to any
right of termination, cancellation, acceleration, repurchase,
prepayment, repayment, or increased payments) under, or give rise
to or accelerate any material obligation (including any obligation
to, or to offer to, repurchase, prepay, repay, or make increased
payments), or result in the loss or modification of any material
benefit under, or pursuant to, any Contract to which it is a party
or by which it or any of its assets is bound; or (iv) result
in a Lien or Restriction (other than any Lien or Restriction
created by this Agreement or any of the other Transaction
Documents) on the DPP Obligation or on any of the VTR Stock being
acquired by CCC pursuant to this Agreement.
(f)
Brokers’
and Finders’ Fees . There is no broker,
finder, investment banker, or similar intermediary that has been
retained by, or is authorized to act on behalf of, it or UGC or any
of UGC’s Subsidiaries or any of their respective officers or
directors who will be entitled to any fee or commission in
connection with this Agreement or any other
26
Transaction
Document or upon consummation of the transactions contemplated
hereby or thereby and which fee or commission could reasonably be
expected to be or become a liability of any Transferor or any of
its Affiliates (with respect to Uno, other than UGC or any of its
Subsidiaries).
(g)
Interested
Party Transactions . Other than
transactions required or permitted by this Agreement or the other
Transaction Documents, Section 3.2(g) of its Disclosure
Schedule lists all Contracts between it or any of its
Subsidiaries, on the one hand, and, on the other hand, (i) UGC
or any of UGC’s Subsidiaries (other than VTR or any of its
Subsidiaries) or (ii) any director, officer, or employee of
UGC or any of UGC’s Subsidiaries (other than VTR or any of
its Subsidiaries), in each case that has not yet been fully
performed.
(h)
Investment
Intent . VTR is acquiring the
Metrópolis Stock pursuant to this Agreement for investment
purposes only.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
REGARDING METRÓPOLIS AND PROSER
Each Transferor represents and
warrants to VTR that the statements contained in this
Article IV are correct and complete as of the date of this
Agreement.
Section 4.1
Organization, Good Standing, and
Authority . Each of
Metrópolis and Proser (a) is a sociedad
anónima , duly organized, validly existing, and in good
standing under Chilean Law, (b) has all requisite corporate or
other Entity power and authority to own, lease, and operate its
properties and to carry on its business as now being conducted, and
(c) is duly qualified or licensed and in good standing to do
business in each jurisdiction in which the property owned, leased
or operated by it or the nature of the business conducted by it
makes such qualification necessary, except where the failure to be
so qualified or licensed and in good standing has not had and is
not reasonably likely to have a Metrópolis Material Adverse
Effect.
Section 4.2
Capitalization
. As of the date hereof, the
share capital of Metrópolis is $115,691,111,254 Chilean Pesos,
divided into 88,970,214 registered shares, all in a single series,
with no preference, all of which are issued and outstanding.
All of the issued and outstanding shares of Metrópolis Stock
are set forth on Schedule A, and the information set forth
therein is true, correct, and complete. All of such issued
and outstanding shares are duly authorized, validly issued, and
fully paid. Except as set forth in Section 4.2 of the
Metrópolis Disclosure Schedule, there are no other issued or
outstanding share capital, subscriptions, options, warrants, puts,
calls, trusts (voting or otherwise), rights, exchangeable or
convertible securities, or other commitments or agreements of any
nature relating to the share capital or other securities of or
ownership interests in Metrópolis or obligating
Metrópolis, at any time or upon the happening of any event, to
issue, transfer, deliver, sell, repurchase, redeem, or otherwise
acquire, or cause to be issued, transferred, delivered, sold,
repurchased, redeemed, or otherwise acquired, any of its share
capital, other securities, or ownership interests or any phantom
shares, phantom equity interests, or stock or equity appreciation
rights, or other ownership interests in Metrópolis
or
27
obligating Metrópolis to grant, extend, or
enter into any such subscription, option, warrant, put, call,
trust, right, exchangeable or convertible security, commitment, or
agreement.
Section 4.3
Consents; No Conflicts
.
(a)
Consents
. Except
for any required notices, Filings, consents, approvals, or waivers
set forth in Section 4.3(a) of the Metrópolis
Disclosure Schedule, no consent, approval, or waiver of, notice to,
or Filing with, any other Person is required, on behalf of
Metrópolis in connection with any of the Transaction Documents
being or to be executed and delivered by Metrópolis, or the
consummation of the transactions contemplated hereby and
thereby.
(b)
No
Conflicts . The execution and
delivery of this Agreement and the other Transaction Documents
being or to be executed and delivered by the Transferors do not,
and the consummation of the transactions contemplated hereby and
thereby do not and will not, (i) violate or conflict with any
provision of the Governing Documents of Metrópolis or Proser;
(ii) violate any of the terms, conditions, or provisions of
any Law in effect on the date of this Agreement or License to which
Metrópolis or Proser is subject or by which Metrópolis,
Proser, or any of their respective assets is bound, except that no
representation is made with respect to any Law of any foreign
jurisdiction in which Metrópolis or Proser does not own assets
or engage in business, (iii) except as set forth in
Section 4.3(b)(iii) of the Metrópolis Disclosure
Schedule, result in a violation or breach of, or (with or without
the giving of notice or lapse of time or both) constitute a default
(or give rise to any right of termination, cancellation,
acceleration, repurchase, prepayment, repayment, or increased
payments) under, or give rise to or accelerate any material
obligation (including any obligation to, or to offer to,
repurchase, prepay, repay, or make increased payments), or result
in the loss or modification of any material benefit under, or
pursuant to, any Contract to which Metrópolis or Proser is a
party or by which Metrópolis, Proser, or any of their
respective assets is bound, or (iv) result in any Lien or
Restriction (other than any Liens or Restrictions created by this
Agreement or any of the other Transaction Documents) on any of the
Metrópolis Stock being acquired by VTR or VTR Net S.A.
pursuant to this Agreement, or on any of the Proser Stock being
acquired by Metrópolis or VTR Net S.A. pursuant to this
Agreement, or on any of the assets of Metrópolis or
Proser.
Section 4.4
Brokers’ and Finders’
Fees . There is no
broker, finder, investment banker, or similar intermediary that has
been retained by, or is authorized to act on behalf of,
Metrópolis or Proser or any of their respective officers or
directors who will be entitled to any fee or commission in
connection with this Agreement or any other Transaction Document or
upon consummation of the transactions contemplated hereby or
thereby and which fee or commission could reasonably be expected to
be or become a liability of UGC, any of UGC’s Subsidiaries,
Metrópolis, or Proser.
28
Section 4.5
Subsidiaries
.
(a)
Section 4.5(a) of
the Metrópolis Disclosure Schedule (i) lists the
name and jurisdiction of organization of each Subsidiary of
Metrópolis and each Entity (A) in which Metrópolis
through one or more Subsidiaries owns an investment accounted for
by the equity method (a “ Metrópolis Equity
Affiliate ”), or (B) that has issued and sold any
debt securities that are owned by Metrópolis or Proser, or
otherwise owes any material Indebtedness to Metrópolis or
Proser, (ii) describes the number and kind of
(A) authorized and issued and outstanding equity interests or
securities, including interests or securities convertible into or
exchangeable or exercisable for any equity interest or security, in
each Subsidiary and Metrópolis Equity Affiliate, and
(B) debt securities owned by Metrópolis or Proser (as
well as the debtors and amounts with respect to to any material
Indebtedness otherwise owed to Metrópolis or Proser), in each
case owned directly or indirectly by Metrópolis (each of
clauses (A) and (B), a “ Metrópolis
Investment ”), and (iii) lists all material
Contracts to which Metrópolis or any of its Subsidiaries are
parties evidencing such Metrópolis Investments, pursuant to
which such Metrópolis Investments are held, evidencing
Restrictions affecting such Metrópolis Investments or entered
into in connection with the acquisition of such Metrópolis
Investments (unless all liabilities, obligations, and commitments
thereunder have been performed in full and there are no remaining
liabilities, obligations, or commitments (actual, contingent, or
otherwise) thereunder) (the “ Metrópolis Investment
Agreements ”). Except for Proser, Metrópolis
does not have and has never had any Subsidiary, and except for
Metrópolis Investments, Metrópolis does not have and has
never had any direct or indirect investment accounted for by the
equity method in any Entity, and except for Metrópolis
Investments, neither Metrópolis nor Proser owns any debt
securities or any other material Indebtedness owed to
Metrópolis or Proser.
(b)
All
Metrópolis Investments that are equity interests or
securities, including interests or securities convertible into or
exchangeable or exercisable for any equity interest or security,
are duly authorized, validly issued, and fully paid.
Metrópolis or the applicable Subsidiary thereof has good and
valid title to the Metrópolis Investments, free and clear of
all Liens and Restrictions, other than Liens or Restrictions
(i) set forth in Section 4.5(b) of the
Metrópolis Disclosure Schedule, (ii) as created by this
Agreement or any of the other Transaction Documents, (iii) as
imposed by the Governing Documents of the applicable Subsidiary or
Metrópolis Equity Affiliate generally on all equity interests
or securities, including interests or securities convertible into
or exchangeable or exercisable for any equity interest or security,
of such Subsidiary or Metrópolis Equity Affiliate,
(iv) imposed by VTR or any of its Subsidiaries, or
(v) Preemptive Rights pursuant to the Corporations Law.
Except as set forth in Section 4.5(b) of the
Metrópolis Disclosure Schedule, there are no other issued or
outstanding equity interests or securities of any Subsidiary of
Metrópolis or any Metrópolis Equity Affiliate,
subscriptions, options, warrants, puts, calls, trusts (voting or
otherwise), rights, exchangeable or convertible securities, or
other commitments or agreements of any nature relating to the share
capital or other securities or ownership interests of any such
Subsidiary or Metrópolis Equity Affiliate or obligating any
such Subsidiary or Metrópolis Equity Affiliate, at any time or
upon the happening of any event, to issue, transfer, deliver,
sell,
29
repurchase,
redeem, or otherwise acquire, or cause to be issued, transferred,
delivered, sold, repurchased, redeemed, or otherwise acquired, any
share capital or other securities or ownership interests of any
such Subsidiary or Metrópolis Equity Affiliate, or any phantom
shares, phantom equity interests, or stock or equity appreciation
rights, or other ownership interests of any such Subsidiary or
Metrópolis Equity Affiliate or obligating any such Subsidiary
or Metrópolis Equity Affiliate to grant, extend, or enter into
any such subscription, option, warrant, put, call, trust, right,
exchangeable or convertible security, commitment, or
agreement. Except as set forth in Section 4.5(b) of
the Metrópolis Disclosure Schedule, neither Metrópolis
nor any of its Subsidiaries or Metrópolis Equity Affiliates
owns or has any right to acquire, directly or indirectly, any
outstanding share capital of, or other equity interests or
securities in, any Entity other than Metrópolis
Investments.
(c)
True, correct,
and complete copies of the Metrópolis Investment Agreements
are included as Section 4.5(c) of the Metrópolis
Disclosure Bundle. Except as set forth in
Section 4.5(c) of the Metrópolis Disclosure
Schedule, assuming the due execution and delivery by each of the
other parties thereto, the Metrópolis Investment Agreements
constitute legal, valid, and binding obligations of the other
parties thereto, enforceable by Metrópolis or the applicable
Subsidiary that is a party to such Metrópolis Investment
Agreement in accordance with its terms, except as such
enforceability may be affected by applicable bankruptcy,
reorganization, insolvency, moratorium, or similar Laws affecting
creditors’ rights generally (and such Transferor has no
knowledge of any fact or circumstance that has occurred that would
make any such Laws applicable). Except as set forth in
Section 4.5(c) of the Metrópolis Disclosure
Schedule, there is no Legal Proceeding pending, or to the knowledge
of such Transferor, threatened in writing relating to any of such
Metrópolis Investments or Metrópolis Investment
Agreements.
(d)
Each of Proser
and, to the knowledge of such Transferor, each Metrópolis
Equity Affiliate, (i) is duly organized, validly existing, and
in good standing under the laws of the jurisdiction of its
organization, (ii) has all requisite corporate or other Entity
power and authority to own, lease, and operate its properties and
to carry on its business as it is now being conducted, and
(iii) is duly qualified to do business and is in good standing
in each jurisdiction in which the properties owned, leased, or
operated by it, or the nature of its activities make such
qualification necessary.
Section 4.6
Financial Statements; Absence of
Certain Developments; No Undisclosed Liabilities; Net
Debt .
(a)
Metrópolis
has delivered to VTR (i) the audited consolidated balance
sheets (the “ Metrópolis Audited Consolidated Balance
Sheets ”) of Metrópolis and Proser as of
December 31, 2003 and 2004 (the latter date, the “
Metrópolis Audited Balance Sheet Date ”),
(ii) the unaudited consolidated balance sheet (the “
Metrópolis Unaudited Consolidated Balance Sheet
”) of Metrópolis and Proser as of the end date of the
most recent month available (the “ Metrópolis
Unaudited Balance Sheet Date ”), but not earlier than
February 28, 2005, (iii) the audited consolidated
statements of income and cash flows of Metrópolis and Proser
for the fiscal years ended on December 31, 2003
and
30
2004,
(iv) the unaudited consolidated statement of income and cash
flows of Metrópolis and Proser for the period (the “
Metrópolis Stub Period ”) beginning on the first
day of the fiscal year in which the Metrópolis Unaudited
Balance Sheet Date falls and ending on the Metrópolis
Unaudited Balance Sheet Date, (v) the audited separate company
balance sheet of Metrópolis and the unaudited separate company
balance sheet of Proser as of December 31, 2003 and 2004,
(vi) the unaudited separate company balance sheets of
Metrópolis and Proser as of the Metrópolis Unaudited
Balance Sheet Date, (vii) the audited separate company
statements of income and cash flows of Metrópolis and the
unaudited separate company statements of income and cash flows of
Proser for the fiscal years ended on December 31, 2003 and
2004, and (viii) the unaudited separate company statements of
income and cash flows of Metrópolis and Proser for the
Metrópolis Stub Period (the foregoing financial statements,
collectively, the “ Metrópolis Financial
Statements ,” true, correct, and complete copies of all
of which are included as Section 4.6(a) of the
Metrópolis Disclosure Bundle).
(b)
Except
(i) as set forth in Section 4.6(b) of the
Metrópolis Disclosure Schedule, (ii) as described in the
notes to the Metrópolis Financial Statements that are audited,
(iii) to the extent that the unaudited interim statements do
not include footnotes and other presentation items as required by
GAAP, and (iv) in the case of the unaudited statements, for
normal, year-end adjustments (which will not be material
individually or in the aggregate), the Metrópolis Financial
Statements have been prepared in accordance with GAAP applied on a
consistent basis and fairly present the financial condition and
results of operations and cash flows of Metrópolis and Proser
as of the respective dates thereof and for the respective periods
indicated therein.
(c)
Except as set
forth in Section 4.6(c) of the Metrópolis Disclosure
Schedule, since the Metrópolis Audited Balance Sheet Date,
(i) Metrópolis and Proser have paid their respective
accounts payable in a consistent and timely manner and neither
Metrópolis nor Proser has altered any of its practices,
policies, or procedures in paying its accounts payable, and
(ii) no instance has occurred where Metrópolis or Proser
took any action with regard to any account payable outside of the
ordinary course of business consistent with past
practice.
(d)
Without limiting
the generality of Section 4.6(f), since the Metrópolis
Audited Balance Sheet Date, except as set forth in
Section 4.6(d) of the Metrópolis Disclosure
Schedule and as otherwise permitted or required by this
Agreement or the other Transaction Documents:
(i)
there has not
been any loss, damage, or destruction to, or any interruption in
the use of, any asset of Metrópolis or Proser (whether or not
covered by insurance) having a net book value in excess of
US$50,000 (or its equivalent in Chilean Pesos as of the date that
is two Business Days prior to the date hereof);
(ii)
the business of
Metrópolis and Proser has been operated only in the ordinary
course consistent with past practice,
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(iii)
neither
Metrópolis nor Proser has sold, leased, transferred, assigned,
or granted any license or sublicense with respect to any material
assets, tangible or intangible, other than in the ordinary course
of business consistent with past practice;
(iv)
neither
Metrópolis nor Proser has imposed any Lien upon any of its
tangible or intangible assets;
(v)
neither
Metrópolis nor Proser has made any capital expenditures
outside the ordinary course of business;
(vi)
neither
Metrópolis nor Proser has (A) declared, approved,
accrued, set aside, or paid any dividend or made any other
distribution in respect of any share capital or other securities,
or (B) repurchased, redeemed, or otherwise reacquired any
share capital or other securities;
(vii)
neither
Metrópolis nor Proser has purchased or otherwise acquired (in
a single transaction or a series of related transactions) any asset
(A) from any Transferor or any of their respective Affiliates
(with respect to Uno, not including UGC or any of its Subsidiaries)
for any amount of consideration, or (B) except for supplies
acquired by Metrópolis and Proser in the ordinary course of
business consistent with past practice, from one or more other
Persons for consideration in excess of US$50,000 (or its equivalent
in Chilean Pesos as of the date that is two Business Days prior to
the date hereof);
(viii)
neither
Metrópolis nor Proser has written off as uncollectible, or
established any extraordinary reserve with respect to, any account
receivable or other Indebtedness in excess of US$50,000 (or its
equivalent in Chilean Pesos as of the date that is two Business
Days prior to the date hereof);
(ix)
neither
Metrópolis nor Proser has incurred, assumed, or otherwise
become subject to any liability (in a single transaction or a
series of related transactions) (A) to any Transferor or any
of their respective Affiliates (with respect to Uno, not including
UGC or any of its Subsidiaries) in any amount, or (B) to any
other Person in excess of US$50,000 (or its equivalent in Chilean
Pesos as of the date that is two Business Days prior to the date
hereof);
(x)
there has been no
material change in the accounting methods, practices, or policies
of Metrópolis or Proser except as required by changes in GAAP;
and
32
(xi)
neither
Metrópolis nor Proser has agreed, committed, or offered (in
writing or otherwise) to take any of the actions referred to in
clauses (iii) through (x) above.
(e)
Except for
(i) any liabilities set forth in Section 4.6(e) of
the Metrópolis Disclosure Schedule, (ii) liabilities set
forth or provided for on the Metrópolis Audited Consolidated
Balance Sheet (including liabilities the amounts of which are set
forth numerically in the notes thereto), (iii) liabilities
that have arisen after the Metrópolis Audited Balance Sheet
Date in the ordinary course of business consistent with past
practice, and (iv) liabilities under the Contracts listed in
Section 4.10(a) of the Metrópolis Disclosure
Schedule and true, correct, and complete copies of which are
included as Section 4.10(c) of the Metrópolis
Disclosure Bundle, to the extent that the existence of such
liabilities is reasonably ascertainable solely by reference to such
Contracts, neither Metrópolis nor Proser has any material
liability (whether known or unknown, whether asserted or
unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or
to become due, including any liability for Taxes).
(f)
Since the
Metrópolis Audited Balance Sheet Date, no event has occurred
and no condition exists that, individually or together with other
events and conditions, has had or, insofar as either Transferor can
reasonably foresee, is reasonably likely to have, a Metrópolis
Material Adverse Effect.
(g)
The Net Debt of
Metrópolis and Proser on a consolidated basis does not exceed
US$100,000,000.00 (or its equivalent in Chilean Pesos as of the
date that is two Business Days prior to the date hereof).
Without limiting the generality of the preceding sentence,
Section 4.6(g) of the Metrópolis Disclosure
Schedule sets forth the aggregate amounts of Indebtedness
(including a breakdown and description of the items under clauses
(a) through (g) of the definition thereof), cash, and
cash equivalents used by the Transferors in calculating such Net
Debt.
Section 4.7
Real Property
.
(a)
Section 4.7(a) of
the Metrópolis Disclosure Schedule sets forth a true,
correct, and complete list of all Metrópolis Owned Real
Property, which list includes the address and description of each
parcel of Metrópolis Owned Real Property.
Section 4.7(a) of the Metrópolis Disclosure
Schedule also sets forth a true, correct, and complete list of
all Metrópolis Leased Real Property, which list includes the
address and description of each parcel of Metrópolis Leased
Real Property. All of the parcels of Metrópolis Owned
Real Property and Metrópolis Leased Real Property are suitable
and adequate for the conduct of their respective businesses as
conducted thereon. Metrópolis or Proser validly owns and
has good and marketable title to all Metrópolis Owned Real
Property and the right, enforceable against the relevant owners, to
use all Metrópolis Leased Real Property as such
Metrópolis Leased Real Property is currently being used, in
each case free and clear of all Liens, except (i) Permitted
Liens, (ii) such Liens as are set
33
forth in
Section 4.7(a) of the Metrópolis Disclosure
Schedule, or (iii) Contracts set forth in
Section 4.7(a) of the Metrópolis Disclosure
Schedule.
(b)
Section 4.7(b) of
the Metrópolis Disclosure Bundle includes true, correct, and
complete copies of (i) all deeds and titles covering the
period of 10 years previous to the date hereof of or pertaining to
all Metrópolis Owned Real Property, and (ii) all
Contracts relating to all Metrópolis Leased Real
Property. To the knowledge of such Transferor, no survey
exists with respect to any Metrópolis Owned Real
Property.
(c)
All buildings,
structures, fixtures, building systems and equipment, and all
components thereof (collectively, “ Improvements
”), included in the Metrópolis Owned Real Property and
the Metrópolis Leased Real Property are in good condition and
repair and sufficient for the operation of the business of
Metrópolis and Proser. There are no facts or conditions
affecting any of such Improvements that would, individually or in
the aggregate, interfere in any material respect with the use or
occupancy of such Improvements or any portion thereof in the
operation of the business of Metrópolis and Proser as
currently conducted thereon.
(d)
Except as set
forth in Section 4.7(d) of the Metrópolis Disclosure
Schedule, neither Metrópolis nor Proser has received written
notice of any condemnation, expropriation or other proceeding in
eminent domain affecting any Metrópolis Owned Real Property or
Metrópolis Leased Real Property or any portion of or interest
in any of the foregoing. There is no Judgment outstanding,
nor any Legal Proceedings pending or, to the knowledge of such
Transferor, threatened, relating to the ownership, lease, use, or
occupancy of any Metrópolis Owned Real Property or
Metrópolis Leased Real Property or any portion of any of the
foregoing, or the operation of the business of
Metró
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