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Acquisition Agreement |
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Date: |
2000 |
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$60 |
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#453009 |
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ACQUISITION AGREEMENT
BY AND AMONG
EQUIFAX INC.
EQUIFAX SOUTH AMERICA, INC.
EQUIFAX DO BRASIL HOLDINGS LTDA.
P.U.P. PARTICIPACOES S.A.
ANDRADE GUTIERREZ TELECOMUNICACOES LTDA.
CONSTRUTORA ANDRADE GUTIERREZ S.A.
SOCMA AMERICANA S.A.
AND
PARTECH LTDA.
EFFECTIVE AS OF 31ST AUGUST, 1998
KILPATRICK STOCKTON LLP
1100 PEACHTREE STREET
ATLANTA, GEORGIA 30309
{PAGE}
ACQUISITION AGREEMENT
TABLE OF CONTENTS
{TABLE}
{CAPTION}
PAGE NO.
{S} {C}
1. ACQUISITION OF THE AG TELECOM INTERESTS....................................................................3
1.1 ACQUISITION OF AG TELECOM'S INTERESTS.................................................................3
2. ACQUISITION OF THE SOCMA INTERESTS.........................................................................3
2.1 ACQUISITION OF SOCMA'S INTEREST IN PARTECH............................................................3
2.2 ACQUISITION OF SOCMA'S INTEREST IN UNNISA.............................................................4
3. CLOSING; ADJUSTMENTS.......................................................................................4
3.1 CLOSING...............................................................................................5
3.2 RIGHT OF RESCISSION...................................................................................5
3.3 COOPERATION AND FURTHER ASSURANCES....................................................................5
3.4 CLOSING DATE AUDITS; DETERMINATION OF ADJUSTMENT......................................................5
3.5 CERTAIN AGREEMENTS....................................................................................8
4. ADDITIONAL COVENANTS.......................................................................................8
4.1 ACCESS AND INSPECTION.................................................................................8
4.2 COOPERATION...........................................................................................9
4.3 EXPENSES..............................................................................................9
4.4 UPDATE OF INFORMATION.................................................................................9
4.5 BROKERS..............................................................................................10
4.6 PUBLICITY............................................................................................10
4.7 CERTAIN GOVERNMENTAL FILINGS.........................................................................10
4.8 CUSTOMER CONTRACTS...................................................................................11
4.9 PAYSYS CONTRACT......................................................................................11
4.10 INVENTIONS AGREEMENTS...............................................................................11
4.11 CERTAIN CUSTOMER CONTRACTS..........................................................................11
i
{PAGE}
5.REPRESENTATIONS, WARRANTIES AND COVENANTS RELATING TO PARTECH, UNNISA AND PROCEDA..........................11
5.1 EXISTENCE............................................................................................12
5.2 SUBSIDIARIES.........................................................................................12
5.3 CAPITALIZATION; OWNERSHIP OF EQUITY; FOUNDATION DOCUMENTS............................................13
5.4 AUTHORITY; INCONSISTENT OBLIGATIONS..................................................................14
5.5 NO VIOLATION; COMPLIANCE WITH LAWS...................................................................15
5.6 CONSENTS.............................................................................................15
5.7 POSSESSION OF LICENSES, ETC..........................................................................16
5.8 [INTENTIONALLY LEFT BLANK]...........................................................................16
5.9 FINANCIAL STATEMENTS.................................................................................16
5.10 LIABILITIES.........................................................................................16
5.11 TITLE TO PROPERTIES.................................................................................17
5.12 RECEIVABLES.........................................................................................17
5.13 MOVABLE PROPERTY....................................................................................17
5.14 IMMOVABLE PROPERTY..................................................................................18
5.15 INTELLECTUAL PROPERTY RIGHTS........................................................................19
5.16 CONTRACTS...........................................................................................20
5.17 INSURANCE...........................................................................................20
5.18 LITIGATION; CONTINGENCIES...........................................................................21
5.19 TAXES...............................................................................................21
5.20 EMPLOYMENT AND LABOR MATTERS........................................................................22
5.21 ABSENCE OF CERTAIN BUSINESS PRACTICES...............................................................23
5.22 BOOKS AND RECORDS...................................................................................23
5.23 AGREEMENTS AND TRANSACTIONS WITH RELATED PARTIES....................................................23
5.24 NO AGREEMENT IN ANTICIPATION OF SALE................................................................24
5.25 GOVERNMENT REPORTS..................................................................................24
5.26 BANKING RELATIONSHIPS...............................................................................24
5.27 CUSTOMERS AND SUPPLIERS.............................................................................24
ii
{PAGE}
5.28 PENDING LEGISLATION.................................................................................25
5.29 ABSENCE OF CHANGES..................................................................................25
5.30 FULL DISCLOSURE.....................................................................................26
6.REPRESENTATIONS AND WARRANTIES RELATING TO THE AG GROUP....................................................26
6.1 EXISTENCE............................................................................................27
6.2 CAPITALIZATION; OWNERSHIP OF EQUITY..................................................................27
6.3 AUTHORITY; INCONSISTENT OBLIGATIONS..................................................................27
6.4 NO VIOLATION; COMPLIANCE WITH LAWS...................................................................28
6.5 CONSENTS.............................................................................................28
6.6 FINANCIAL STATEMENTS.................................................................................28
6.7 LITIGATION; CONTINGENCIES............................................................................29
6.8 FULL DISCLOSURE......................................................................................29
7. REPRESENTATIONS AND WARRANTIES RELATING TO THE SOCMA GROUP................................................29
7.1 EXISTENCE............................................................................................29
7.2 CAPITALIZATION; OWNERSHIP OF EQUITY..................................................................30
7.3 AUTHORITY; INCONSISTENT OBLIGATIONS..................................................................30
7.4 NO VIOLATION; COMPLIANCE WITH LAWS...................................................................30
7.5 CONSENTS.............................................................................................30
7.6 FINANCIAL STATEMENTS.................................................................................31
7.7 LITIGATION; CONTINGENCIES............................................................................31
7.8 FULL DISCLOSURE......................................................................................31
8. REPRESENTATIONS AND WARRANTIES OF EQUIFAX.................................................................32
8.1 ORGANIZATION.........................................................................................32
8.2 AUTHORITY; NO INCONSISTENT AGREEMENTS................................................................32
8.3 CONSENTS.............................................................................................32
9. CONDUCT OF BUSINESS PENDING CLOSING.......................................................................33
iii
{PAGE}
9.1 BUSINESS IN THE ORDINARY COURSE......................................................................33
9.2 NO MATERIAL CHANGES..................................................................................33
9.3 COMPENSATION.........................................................................................33
9.4 EMPLOYEE BENEFIT PLANS...............................................................................33
10. CONDITIONS TO OBLIGATIONS OF EQUIFAX.....................................................................33
10.1 PROCEEDINGS AND DOCUMENTS SATISFACTORY..............................................................34
10.2 REPRESENTATIONS AND WARRANTIES......................................................................34
10.3 COMPLIANCE WITH COVENANTS AND CONDITIONS............................................................34
10.4 CLOSING CERTIFICATES................................................................................34
10.5 OPINION OF COUNSEL..................................................................................34
10.6 CONSENTS............................................................................................34
10.7 NO INCONSISTENT REQUIREMENTS........................................................................35
10.8 NO INJUNCTION.......................................................................................35
10.9 ADDITIONAL AGREEMENTS...............................................................................35
10.10 PROCEDA AMENDMENT..................................................................................35
10.11 CUSTOMER AGREEMENTS, PAYSYS CONSENT AND IP AGREEMENTS..............................................35
10.12 MISCELLANEOUS......................................................................................35
11. CONDITIONS TO OBLIGATIONS OF THE SELLERS.................................................................35
11.1 PROCEEDINGS AND DOCUMENTS SATISFACTORY..............................................................35
11.2 REPRESENTATIONS AND WARRANTIES......................................................................36
11.3 COMPLIANCE WITH COVENANTS AND CONDITIONS............................................................36
11.4 CLOSING CERTIFICATES................................................................................36
11.5 RESOLUTIONS.........................................................................................36
11.6 CONSENTS............................................................................................36
11.7 OPINION OF COUNSEL..................................................................................36
11.8 NO INCONSISTENT REQUIREMENTS........................................................................36
11.9 NO INJUNCTION.......................................................................................36
11.10 ADDITIONAL AGREEMENTS..............................................................................37
iv
{PAGE}
11.12 EQUIFAX UNDERTAKING................................................................................37
12. INDEMNITIES..............................................................................................37
12.1 INDEMNIFICATION OF EQUIFAX..........................................................................37
12.2 PAYMENT.............................................................................................38
12.3 DEFENSE OF CLAIMS...................................................................................38
12.4 INDEMNIFICATION OF SELLERS BY EQUIFAX...............................................................39
12.5 LIMITATION ON LIABILITY.............................................................................40
12.6 NO CONTRIBUTION BY PARTECH, UNNISA OR PROCEDA.......................................................40
13. SURVIVAL.................................................................................................41
13.1 SURVIVAL............................................................................................41
14. TERMINATION..............................................................................................41
14.1 TERMINATION FOR CERTAIN CAUSES......................................................................41
14.2 PROCEDURE ON AND EFFECT OF TERMINATION..............................................................42
15. MISCELLANEOUS............................................................................................42
15.1 NOTICES.............................................................................................42
15.2 COUNTERPARTS........................................................................................44
15.3 ENTIRE AGREEMENT....................................................................................45
15.4 GOVERNING LANGUAGE..................................................................................45
15.5 DISPUTE RESOLUTION..................................................................................45
15.6 SUCCESSORS AND ASSIGNS..............................................................................46
15.7 PARTIAL INVALIDITY AND SEVERABILITY.................................................................46
15.8 WAIVER..............................................................................................47
15.9 HEADINGS............................................................................................47
15.10 NUMBER AND GENDER..................................................................................47
15.11 TIME OF PERFORMANCE................................................................................47
16. CERTAIN DEFINITIONS; INDEX OF DEFINITIONS................................................................47
v
{PAGE}
16.1 CERTAIN DEFINITIONS.................................................................................47
16.2 INDEX TO DEFINITIONS................................................................................50
{/TABLE}
vi
{PAGE}
SCHEDULE OF EXHIBITS
Exhibit A Accounts Receivable
Exhibit A-1 ABC Split-Up Consequences
Exhibit B XYZ Split-Up Consequences
Exhibit C-1 Partech December 31, 1997 Audited Financial Statements
Exhibit C-2 Unnisa December 31, 1997 Audited Financial Statements
Exhibit C-3 Proceda December 31, 1997 Audited Financial Statements
Exhibit D-1 Partech May 31, 1998 Balance Sheet and Net Working Capital
and Indebtedness Calculation
Exhibit D-2 Unnisa May 31, 1998 Balance Sheet and Net Working Capital
and Indebtedness Calculation
Exhibit D-3 Proceda May 31, 1998 Balance Sheet and Net Working Capital
and Indebtedness Calculation
Exhibit E-1 Escrow Agreement (AG Telecom)
Exhibit E-2 Escrow Agreement (Socma)
Exhibit F Pledge Agreement
Exhibit G Dividend Pledge
Exhibit H Partech Articles
Exhibit I Reorganization Agreement
Exhibit J Trademark Agreement
Exhibit K AG Parent Guaranty
Exhibit L PaySys Consent
Exhibit M List of Employees and Independent Contractors
Exhibit N-1 Capitalization of AG Parent
Exhibit N-2 Capitalization of AG Telecom
Exhibit O Capitalization of Socma
Exhibit P-1 Tozzini Freire Teixera e Silva Legal Opinion
Exhibit P-2 Socma Legal Department Legal Opinion
Exhibit Q Proceda Amendment
Exhibit R-1 Kilpatrick Stockton LLP Legal Opinion
Exhibit R-2 Mundie e Advogados Legal Opinion
Exhibit S Certain Additional Agreements
N.B.: The Exhibits and Disclosure Memorandum referenced in this Schedule of
Ezhibits, and elsewhere in this Agreement, are hereby incorporated by reference.
These Exhibits have been omitted for purposes of this filing, but will be
furnished supplementally to the Commission upon request.
{PAGE}
ACQUISITION AGREEMENT
THIS AGREEMENT is made and entered into effective as of the 31st day of
August, 1998, by and among:
(1) EQUIFAX INC., a corporation organized and existing under the
laws of the State of Georgia, United States of America, whose principal place of
business is located at 1600 Peachtree Street, N.W., Atlanta, Georgia 30309,
United States of America ("EFX");
(2) EQUIFAX SOUTH AMERICA, INC., a corporation organized and
existing under the laws of the State of Georgia, United States of America, whose
principal place of business is located at 1600 Peachtree Street, N.W., Atlanta,
Georgia 30309, United States of America ("ESA");
(3) EQUIFAX DO BRASIL HOLDINGS LTDA., a Brazilian limited
liability company ("SOCIEDADE POR QUOTAS DE RESPONSABILIDADE LIMITADA"), whose
head office is located at Rua Boa Vista, No. 254, 7th floor, suite 721, in the
City of Sao Paulo, State of Sao Paulo, Federal Taxpayers' No. ________________,
with its articles of association recorded at the Commercial Registry at the
State of Sao Paulo, under No. 35,215,207,148, on July 20, 1998 ("HOLDINGS");
(4) P.U.P. PARTICIPACOES S.A., a Brazilian corporation ("SOCIEDADE
ANONIMA"), whose head office is located at Av. Pres. Juscelino Kubitschek, 50
Conj. 172, in the City and State of Sao Paulo, enrolled at the Federal
Taxpayers' Registry under No. _________________________ ("ACQUISITION"; and
together with EFX, ESA and Holdings, collectively referred to as "EQUIFAX");
(5) ANDRADE GUTIERREZ TELECOMUNICACOES LTDA., a Brazilian limited
liability company ("SOCIEDADE POR QUOTAS DE RESPONSABILIDADE LIMITADA"), whose
head office is located at Avenida Maria Coelho de Aguiar, 215, Bloco D, 4(0)
floor, in the city of Sao Paulo, State of Sao Paulo, Federal Taxpayers'
Registration No. 71.057.921/0001-39, with its Articles of Association registered
before the Board of Trade of the State of Sao Paulo ("JUCESP") under NIRE
35.213.834.579, in section as of March 03, 1995 ("AG TELECOM" and a "SELLER");
(6) CONSTRUTORA ANDRADE GUTIERREZ S.A., a Brazilian corporation
("SOCIEDADE ANONIMA"), whose head office is located at Rua dos Pampas, 484, in
the city of Belo Horizonte, State of Minas Gerais, Federal Taxpayers'
Registration No. 17.262.213/0001-94, with its by-laws recorded at the Board of
Trade of the State of Minas Gerais ("JUCEMG") under No. 313.000.918-30, in
section as of September 02, 1948 ("AG PARENT" and a "Seller");
(7) SOCMA AMERICANA S.A., an Argentine corporation ("SOCIEDAD
ANONIMA"), whose head office is located at Av. Eduardo Madero 940, Piso 15,
Capital
{PAGE}
Federal Registro No. 7034, Libro 100, tomo "A" de Sociedades Anonimas -
Registro Publico de Comercio de la Capital Federal de la Republica Argentina
("SOCMA" and a "SELLER"); and
(8) PARTECH LTDA., a Brazilian limited liability company
("SOCIEDADE POR QUOTAS DE RESPONSABILIDADE LIMITADA"), whose head office is
located in the City and State of Sao Paulo, at Av. Maria Coelho Aguiar 215,
Bloco D - 4th Floor, enrolled at the Federal Taxpayers' Registry under No.
00-127.453/0001-01 ("PARTECH").
BACKGROUND STATEMENT
WHEREAS, the Sellers currently own, directly and in the aggregate, one
hundred percent (100%) of the outstanding quotas of Partech; and
WHEREAS, on the date of this Agreement Partech owns, directly and in
the aggregate, (i) eighty three percent (83%) of the outstanding quotas of
Unnisa-Solucoes em Meios de Pagamento Ltda., a Brazilian limited liability
company ("SOCIEDADE POR QUOTAS DE RESPONSABILIDADE LIMITADA"), whose head office
is located in the City and State of Sao Paulo, at Av. Maria Coelho Aguiar 215,
Bloco D - 4th Floor, enrolled at the Federal Taxpayers' Registry under No.
69.313.674/0001-42 ("UNNISA"), and (ii) sixty six and 67/100 percent (66.67%) of
the outstanding shares of Proceda Tecnologia e Informatica S.A., a Brazilian
corporation ("SOCIEDADE ANONIMA"), whose head office is located in the City and
State of Sao Paulo, at Av. Maria Coelho Aguiar 215, Bloco E - 7th Floor,
enrolled at the Federal Taxpayers' Registry under No. 55.419.667/0001-15
("PROCEDA"); and
WHEREAS, on the date of this Agreement, AG Telecom and Socma own,
indirectly and in the aggregate, the remaining seventeen percent (17%) of the
outstanding quotas of Unnisa; and
WHEREAS, Sellers desire to sell to Acquisition and its Affiliates, and
Acquisition, on behalf of itself and its Affiliates, desires to acquire from
to-be-formed Affiliates of each Seller, on the Closing Date (this term and other
capitalized terms used in this Agreement being defined in either PARAGRAPH 16.1
of this Agreement or in those Paragraphs of this Agreement identified in
PARAGRAPH 16.2), (i) capital of Partech representing an aggregate fifty one
percent (51%) direct ownership interest in the capital of Partech and (ii)
capital of Unnisa representing an aggregate seventeen percent (17%) direct
ownership interest in the capital of Unnisa (collectively, the "ACQUIRED
INTERESTS"); and
WHEREAS, to accomplish their objectives the Parties have agreed to
undertake the various component parts of the transactions contemplated by this
Agreement on the terms set forth in this Agreement and agree that the various
component parts are integral, interdependent parts of the whole, and without
which this Agreement would not be entered into and the transactions contemplated
by and provided for in ARTICLES 1 AND 2 of
2
{PAGE}
this Agreement (collectively, the "ACQUISITION TRANSACTION") would not be
consummated;
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements in this Agreement contained, and other good and
valuable consideration, the receipt and sufficiency of which are acknowledged,
the Parties agree as follows:
1. ACQUISITION OF THE AG TELECOM INTERESTS
1.1 ACQUISITION OF AG TELECOM'S INTERESTS. Subject to satisfaction or
waiver in writing of the conditions contained in ARTICLES 10 AND 11 of this
Agreement, on the Closing Date, Acquisition shall subscribe for that number of
ordinary shares of CJO Participacoes Ltda., an Affiliate of AG Telecom ("ABC"),
as shall represent, upon subscription, fifty percent (50.0%) of ABC's issued and
outstanding ordinary shares (collectively, the "ABC SUBSCRIBED SHARES") for an
aggregate subscription price (the "ABC SUBSCRIPTION PRICE") payable (i) in cash
in Brazilian reais in the amount of R$89,250,000 (Eighty Nine Million Two
Hundred Fifty Thousand Brazilian reais) and (ii) by delivery of the accounts
receivable (the "ACCOUNTS RECEIVABLE") identified and described in EXHIBIT A to
this Agreement having a face value of R$81,116,074.26 (Eighty One Million One
Hundred Sixteen Thousand Seventy Four and 26/100 Brazilian reais). A portion of
the ABC Subscription Price shall be allocated to the capital of ABC, and the
balance of the ABC Subscription Price shall be allocated to premium. On the
Closing Date and immediately following the subscription by Acquisition for the
ABC Subscribed Shares, ABC shall be split-up in accordance with the Company Law
(the "ABC SPLIT-UP"), with the consequences set forth on EXHIBIT A-1 to this
Agreement. Any and all stamp duties, taxes and similar imposts imposed or
assessed in respect of the ABC Split-Up will be borne by AG Telecom. In each
case, the ABC Subscribed Shares and the resulting shares or ownership interests
of Partech and Unnisa distributed or to be distributed shall be delivered to
EFX, or at its discretion one or more of its Affiliates, free and clear of any
and all Liens. The ABC Subscribed Shares and all resulting shares and ownership
interests that will become the property of EFX or one or more of its Affiliates
as a result of the ABC Split-Up will be registered in the name of EFX or that
Affiliate in the relevant Book of Registration of Ordinary Shares or otherwise
duly recorded and noted in the books and records of the relevant company.
2. ACQUISITION OF THE SOCMA INTERESTS
2.1 ACQUISITION OF SOCMA'S INTEREST IN PARTECH. Subject to satisfaction
or waiver in writing of the conditions contained in ARTICLES 10 AND 11 of this
Agreement, on the Closing Date, Socma will sell to one or more of Equifax's
Affiliates incorporated and
3
{PAGE}
organized outside of Brazil (the "OFFSHORE AFFILIATE"), and EFX will cause
the Offshore Affiliate to purchase, take and acquire from Socma, quotas of
Partech representing in the aggregate twenty five and one-half percent
(25.50%) of the quota capital of Partech (the "SOCMA PARTECH Interest") free
and clear of any and all Liens for a purchase price (the "SPI PURCHASE
PRICE") of R$66,950,000 (Sixty Six Million Nine Hundred Fifty Thousand
Brazilian reais). Any and all stamp duties, taxes and similar imposts imposed
or assessed in respect of the sale by Socma of the Socma Partech Interest
will be borne by Socma. On the Closing Date and against delivery of the Socma
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