Exhibit 10.1

Execution Version

STOCK PURCHASE AGREEMENT

BY AND AMONG

ENTEL INVERSIONES S.A.,

EMPRESA NACIONAL DE TELECOMUNICACIONES S.A.,

NII MERCOSUR TELECOM, S.L.

NII MERCOSUR MÓVILES, S.L.

AND

NII HOLDINGS, INC.

Dated as of April 4, 2013

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TABLE OF CONTENTS

 

          Page  

ARTICLE I DEFINITIONS

     1   

1.1

  

Certain Definitions

     1   

ARTICLE II SALE AND PURCHASE OF SHARES

     14   

2.1

  

Sale and Purchase of Shares

     14   

ARTICLE III CONSIDERATION

     15   

3.1

  

Consideration

     15   

3.2

  

Closing Date Payment

     15   

3.3

  

Net Purchase Price Adjustment

     15   

3.4

  

Withholding Rights

     17   

ARTICLE IV CLOSING AND TERMINATION

     18   

4.1

  

Closing Date

     18   

4.2

  

Closing Deliveries by the Sellers

     18   

4.3

  

Closing Deliveries by the Purchasers

     19   

4.4

  

Termination of Agreement

     19   

4.5

  

Termination Fee

     20   

4.6

  

Effect of Termination

     20   

ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE SELLERS

     20   

5.1

  

Corporate Existence; Authority

     20   

5.2

  

Company’s Corporate Existence

     21   

5.3

  

Conflicts; Consents of Third Parties

     21   

5.4

  

Capitalization

     22   

5.5

  

Ownership of Shares

     22   

5.6

  

Subsidiaries

     22   

5.7

  

Financial Statements

     22   

5.8

  

No Undisclosed Liabilities

     23   

5.9

  

Absence of Certain Developments

     23   

5.10

  

Taxes

     23   

5.11

  

Real Property

     24   

5.12

  

Intellectual Property

     25   

5.13

  

Material Contracts

     25   

5.14

  

Labor; Employee Matters

     28   

5.15

  

Litigation

     29   

5.16

  

Compliance with Laws; Permits

     29   

5.17

  

Financial Advisors

     29   

5.18

  

Banks

     30   

5.19

  

Transactions with Related Parties

     30   

5.20

  

Environmental Matters

     30   

5.21

  

Insurance

     30   

 

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TABLE OF CONTENTS

(continued)

 

          Page  

5.22

  

Certain Business Practices

     31   

5.23

  

Company Concessions

     31   

5.24

  

Network Assets

     32   

5.25

  

Data Privacy

     33   

5.26

  

Sufficiency of Assets

     33   

5.27

  

Subscribers; Coverage; Spectrum

     34   

5.28

  

No Other Representations or Warranties; Schedules

     34   

ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS

     34   

6.1

  

Corporate Existence; Authority

     34   

6.2

  

Conflicts; Consents of Third Parties

     35   

6.3

  

Litigation

     35   

6.4

  

Investment Intention

     35   

6.5

  

Financial Advisors

     35   

6.6

  

Financing

     35   

6.7

  

Condition of the Business

     36   

ARTICLE VII COVENANTS

     36   

7.1

  

Access to Information

     36   

7.2

  

Conduct of the Business Pending the Closing

     36   

7.3

  

Consents

     39   

7.4

  

Regulatory Approvals

     39   

7.5

  

Further Assurances

     40   

7.6

  

Confidentiality

     40   

7.7

  

Publicity

     40   

7.8

  

Continuing Employees

     41   

7.9

  

Records

     41   

7.10

  

Trademark License Agreement

     41   

7.11

  

Websites

     42   

7.12

  

Intellectual Property License

     42   

7.13

  

Tax Matters

     43   

7.14

  

Notice of Certain Events

     47   

7.15

  

Non-Competition; Non-Solicitation

     47   

7.16

  

Release

     48   

7.17

  

Capital and Other Expenditures

     49   

7.18

  

Intercompany Accounts

     49   

7.19

  

OSIPTEL Certification Process

     49   

7.20

  

No-Shop

     50   

ARTICLE VIII CONDITIONS TO CLOSING

     51   

8.1

  

Conditions Precedent to Obligations of the Purchasers

     51   

8.2

  

Conditions Precedent to Obligations of the Sellers

     52   

8.3

  

Frustration of Closing Conditions

     52   

 

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TABLE OF CONTENTS

(continued)

 

          Page  

ARTICLE IX INDEMNIFICATION

     52   

9.1

  

Indemnification by Sellers

     52   

9.2

  

Indemnification by the Purchasers

     53   

9.3

  

Indemnification Procedures

     53   

9.4

  

Limitations on Indemnification

     55   

9.5

  

Tax Treatment of Indemnity Payments

     57   

9.6

  

Exclusive Remedy; Remedial Losses

     57   

ARTICLE X MISCELLANEOUS

     58   

10.1

  

Expenses

     58   

10.2

  

Arbitration Agreement

     58   

10.3

  

Submission to Jurisdiction

     59   

10.4

  

Consent to Service of Process

     59   

10.5

  

Waiver of Jury Trial

     59   

10.6

  

Entire Agreement; Amendments and Waivers

     60   

10.7

  

Governing Law

     60   

10.8

  

Notices

     60   

10.9

  

Severability

     61   

10.10

  

Binding Effect; Assignment

     61   

10.11

  

Counterparts

     62   

10.12

  

Specific Performance

     62   

10.13

  

Further Assurances

     62   

10.14

  

Non-Recourse

     62   

Exhibits

 

Exhibit A   Purchaser Transition Services Agreement

Schedules

 

Schedule 1.1(a)   Company Transaction Expenses Schedule 1.1(b)   Group A
Concessions Schedule 1.1(c)   Group B Concessions Schedule 1.1(d)   Knowledge Of
The Sellers And Sellers’ Parent Schedule 1.1(e)   Company Certification Schedule
4.2(h)   Transferred Contracts Schedule 5.3(a)   Seller Conflicts; Consents Of
Third Parties Schedule 5.3(b)   Governmental Approvals Schedule 5.8.   No
Undisclosed Liabilities

 

iii

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TABLE OF CONTENTS

(continued)

 

          Page

 

Schedule 5.10(c)   Taxes Schedule 5.10(d)   Taxes Examinations Schedule 5.11(a)
  Owned Real Property Schedule 5.11(b)   Leased Real Property Schedule 5.12.  
Intellectual Property Schedule 5.13(a)   Material Contracts Schedule 5.13(b)  
Material Contract Breaches Schedule 5.14(a)   Labor-Related Agreements Schedule
5.14(b)   Work Stoppages Schedule 5.14(c)   Pending Collective Bargaining
Agreements Schedule 5.14(d)   Labor-Related Proceedings Schedule 5.14(e)  
Company Employee Plans Schedule 5.15   Seller Litigation Schedule 5.16(a)  
Compliance with Laws Schedule 5.16(b)   Permits Schedule 5.16(c)   Transmitter
Sites with Expressly Granted Municipal Permits Schedule 5.17   Seller Financial
Advisors Schedule 5.18   Bank Accounts and Powers of Attorney Schedule 5.19  
Transactions With Affiliates, Shareholders, Officers and Directors Schedule
5.20(d)   Environmental Matters Schedule 5.21   Insurance Schedule 5.23(b)(ii)  
Liens On Group B Concessions Schedule 5.23(b)(iv)   Breach of Group B
Concessions Schedule 5.23(b)(v)   Legal Proceedings Relating To Company
Concessions Schedule 5.23(d)   Regulatory Reports Schedule 5.24(a)   Network
Assets Schedule 5.24(c)   Transmitter Sites Schedule 6.2(a)   Purchaser
Conflicts Schedule 6.2(b)   Purchaser Consents Schedule 6.3   Purchaser
Litigation Schedule 6.5   Purchaser Financial Advisors Schedule 7.2   Exceptions
to Ordinary Course Covenant

 

iv

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TABLE OF CONTENTS

(continued)

 

          Page

 

Schedule 7.8   Applicable Employees Schedule 7.15(b)   Headquarters Employees
Schedule 7.17   Capital Expenditure Amount and Marketing Amount Schedule 7.18  
Surviving Affiliate Agreements Schedule 8.1(e)   Required Third Party Consents

 

v

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STOCK PURCHASE AGREEMENT

This STOCK PURCHASE AGREEMENT, dated as of April 4, 2013, by and among Entel
Inversiones S.A., a corporation existing under the Laws of Chile (“Entel
Inversiones”), Empresa Nacional de Telecomunicaciones S.A., a corporation
existing under the Laws of Chile (“Entel”), NII Mercosur Telecom, S.L., a
limited liability company existing under the Laws of Spain (“NII Telecom”), NII
Mercosur Móviles, S.L., a limited liability company existing under the Laws of
Spain (“NII Móviles”), and NII Holdings, Inc., a corporation existing under the
Laws of the State of Delaware (the “Sellers’ Parent”). Terms that are
capitalized and not defined in context have the meaning set forth or
cross-referenced in Article I.

RECITALS:

A. The Sellers own all of the Company Shares and, at the Closing, will own all
of the Additional Shares of Nextel del Perú S.A. (the “Company”).

B. The Sellers desire to sell to the Purchasers, and the Purchasers desire to
purchase from the Sellers, the Shares for the purchase price and upon the terms
and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the mutual covenants of this Agreement, the
Parties agree:

ARTICLE I

DEFINITIONS

1.1 Certain Definitions.

(a) For purposes of this Agreement, the following terms shall have the meanings
indicated:

“1900 MHz Concession Agreement” means the Concession Agreement, dated
September 21, 2007, between the Company and the MTC, as supplemented in writing
from time to time.

“Acquisition Proposal” has the meaning set forth in Section 7.20.

“Additional Shares” has the meaning set forth in Section 7.18.

“Affiliate” means, with respect to any Person, any other Person that, directly
or indirectly through one or more intermediaries, controls, or is controlled by,
or is under common control with, such Person, and the term “control” (including
the terms “controlled by” and “under common control with”) means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through ownership of voting
securities, by contract or otherwise.

“Agreement” means this Agreement, as it may be amended from time to time.

--------------------------------------------------------------------------------

“Applicable Employee” has the meaning set forth in Section 7.8(a).

“Applicable Purchase Price” means:

(a) $397,000,000 if the Closing Date occurs during the Discount Price Period; or

(b) $400,000,000 if the Closing Date occurs on the Base Price Date; or

(c) after the Base Price Date, the amount of cash payable by the Purchasers to
the Sellers based on the number of days that elapse from (but not including) the
Base Price Date to (and including) the Closing Date as set forth below:

 

(i)

 

Up to 15 days

   $ 403,000,000   

(ii)

 

More than 15 and up to 45 days

   $ 404,000,000   

(iii)

 

More than 45 and up to 75 days

   $ 406,000,000   

(iv)

 

More than 75 and up to 105 days

   $ 409,000,000   

(v)

 

More than 105 and up to 135 days

   $ 412,000,000   

(vi)

 

More than 135 days

   $ 415,000,000   

“Audited Financial Statements” has the meaning set forth in Section 5.7.

“Base Price Date” means the Business Day immediately following the last day of
the Discount Price Period.

“Beneficiaries” has the meaning set forth in Section 9.2(a).

“Business Day” means any day of the year on which national banking institutions
in New York, Peru and Chile are open to the public for conducting business and
are not required or authorized to close.

“Capital Expenditure Amount” means the capital expenditure amount set forth on
Schedule 7.17 multiplied by a fraction, the numerator of which is the number of
calendar days from January 1, 2013 and ending on the day immediately prior to
the Closing Date and the denominator of which is 365.

“Change of Control” means the occurrence of any of the following:

(i) the direct or indirect sale, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the properties or assets of the
Sellers’ Parent and its subsidiaries, taken as a whole, to any “person” (as that
term is used in Section 13(d)(3) of the Exchange Act);

(ii) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d)
of the Exchange Act, but excluding any employee benefit plan of such “person” or
its

 

2

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subsidiaries, and any Person or entity acting in its capacity as trustee, agent
or other fiduciary or administrator of any such plan) becomes the beneficial
owner, directly or indirectly, of 50% or more of the voting stock of the
Sellers’ Parent on a fully-diluted basis (and taking into account all such
securities that such “person” or “group” has the right to acquire pursuant to
any option right to the extent that such option right is exercisable within 60
days after the date of determination); or

(iii) the Sellers’ Parent consolidates with, or merges with or into, any Person,
or any Person consolidates with, or merges with or into the Sellers’ Parent, in
any such event pursuant to a transaction in which any of the outstanding voting
stock of the Sellers’ Parent or such Person is converted into or exchanged for
cash, securities or other property, other than any such transaction where, the
voting stock of the Sellers’ Parent outstanding immediately prior to such
transaction is converted into or exchanged for voting stock of the surviving or
transferee Person constituting a majority of the outstanding shares of such
voting stock of such surviving or transferee Person (immediately after giving
effect to such issuance).

“Claim Notice” has the meaning set forth in Section 9.3(a).

“Closing” has the meaning set forth in Section 4.1.

“Closing Date” has the meaning set forth in Section 4.1.

“Closing Statement” has the meaning set forth in Section 3.3(b).

“Code” means the United States Internal Revenue Code of 1986, as amended.

“Company” has the meaning set forth in Recital A.

“Company’s Business” means the business of marketing, selling and providing
wireless telecommunication services, including voice, push to talk and data
services, and fixed and mobile services in Peru and services ancillary thereto,
in each case as conducted by the Company on the date hereof.

“Company Certification” means the certification process to be undertaken by the
Company in accordance with the procedures and methodologies described on
Schedule 1.1(e).

“Company Certification Date” means the date which is the latest of (A) the date
on which the Purchasers have received all the reports and other deliverables
specified in Schedule 1.1(e), (B) the date that the Company makes the OSIPTEL
filing and (C) May 15, 2013.

“Company Concession” means each of the Group A Concessions and the Group B
Concessions.

“Company Debt” means, without duplication, all liabilities of the Company for
(i) indebtedness for borrowed money, (ii) other obligations evidenced by a note,
bond, debenture or similar instrument, (iii) all obligations, contingent or
otherwise, as an account party or applicant under or in respect of acceptances,
letters of credit, surety bonds or similar arrangements, (iv) the deferred
purchase price of property or services (other than trade payables in the
Ordinary Course

 

3

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of Business and payable on customary trade terms not exceeding 360 days),
(v) all obligations created or arising under any conditional sale or title
retention agreement, (vi) all obligations (other than trade payables in the
Ordinary Course of Business and payable on customary trade terms not exceeding
360 days) secured by (or for which the holder of such obligation has an existing
right, contingent or otherwise, to be secured by) any Lien (other than Permitted
Liens referred to in clauses (i)-(iv) and (vi)-(ix) of the definition thereof)
on assets owned by the obligor, whether or not the obligor has assumed or become
liable for the payment of such obligation, (vii) all obligations or commitments
under capitalized leases, (viii) any Company Transaction Expenses, (ix) all
obligations of others described in (i)-(viii) above Guaranteed by the Company,
and (x) all accrued interest, fees, premiums, penalties and/or other amounts due
in respect of clauses (i), (ii), (iii) and (ix) of this definition.

“Company Employee Plan” has the meaning set forth in Section 5.14(e).

“Company Leases” has the meaning set forth in Section 5.11(b).

“Company Licensed IP” has the meaning set forth in Section 7.12(b).

“Company Privacy Policy” means each published privacy policy of the Company
currently in effect relating to the collection, storage, disclosure or transfer
of any Personal Data of the Company’s subscribers.

“Company Shares” has the meaning set forth in Section 5.4(a).

“Company Transaction Expenses” means, without duplication, (i) the Company’s
applicable portion of any payments, fees and expenses incurred in connection
with completing the Company Certification and obtaining the consents, waivers or
amendments of any Persons, regulatory approvals and other closing deliverables
of the Company or the Sellers in connection with any of the transactions
contemplated by this Agreement, (ii) all change of control payments, bonuses,
retention payments, severance payments, termination payments and other payments
by the Company which are triggered by the negotiation, preparation or execution
of this Agreement or consummation of any of the transactions contemplated hereby
and (iii) all third party out-of-pocket expenses (including fees and
disbursements of attorneys, investment bankers, accountants, tax advisors and
other professional advisors) incurred by the Company in connection with the
negotiation, preparation or execution of this Agreement or the consummation of
any of the transactions contemplated hereby, which, in each case, are unpaid as
of the Closing Date. For the avoidance of doubt, Company Transaction Expenses
shall not include any payments, fees or expenses that otherwise would be Company
Transaction Expenses but are (i) paid on behalf of the Company by any of the
Sellers or the Sellers’ Parent (out of the proceeds of the Net Purchase Price or
otherwise), (ii) paid by the Purchasers pursuant to their agreement to share
expenses as set forth in Schedule 1.1(a), (iii) already taken into account for
purposes of calculating the Estimated Net Working Capital or Final Net Working
Capital or (iv) incurred after the Closing by the Company.

“Company Transition Services Agreement” means that certain Transition Services
Agreement to be entered into by the Company, Entel and Nextel Chile S.A. on the
Closing Date, in substantially the same form as the Seller Transition Services
Agreement, pursuant to which the Company shall provide certain services to
Nextel Chile S.A.

 

4

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“Confidentiality Agreement” has the meaning set forth in Section 7.6(a).

“Contract” means any written contract, indenture, note, bond, lease, commitment
or other legally binding agreement.

“Deductible Amount” has the meaning set forth in Section 9.4(b).

“Discount Price Period” means the period beginning on the date of this Agreement
and ending on the later of (a) the date 45 days after the Company Certification
Date and (b) the date five Business Days after the date on which all conditions
set forth in Section 8.1 (other than the conditions set forth in
(i) Section 8.1(d)(ii) and (ii) Section 8.1(g) with respect to the closing
deliverables set forth in Section 4.2(a)-(f) and Section 4.2(g)(ii)) have been
either satisfied or waived by the Purchasers.

“Drop Dead Date” has the meaning set forth in Section 4.4(a)(ii).

“Employee Plan” means any plan, program, arrangement, agreement or commitment
which is an employment, consulting or deferred compensation agreement, or a
compensation, incentive bonus or other bonus, pension, profit-sharing, savings,
retirement, stock option, stock purchase, severance pay, life, health,
disability or accident insurance plan, or vacation, or other employee benefit
plan, program, arrangement, agent or commitment that are sponsored or maintained
by the Company, but does not include obligations of the Company under Law.

“Enhanced Severance Obligations” has the meaning set forth in Section 7.8(b).

“Entel” has the meaning set forth in the Preamble.

“Entel Inversiones” has the meaning set forth in the Preamble.

“Environmental Law” shall mean any applicable Law relating to (i) the protection
of the environment (including air, water, soil and natural resources) or
(ii) the use, storage, handling, release or disposal of any Hazardous Substance
or waste, in each case as presently in effect.

“Escrow Agent” means JPMorgan Chase Bank, N.A.

“Escrow Agreement” means the Escrow Agreement to be entered into as of the
Closing among each of the Parties and the Escrow Agent, which shall be on terms
mutually agreeable to the parties thereto.

“Estimated Net Company Debt” has the meaning set forth in Section 3.3(a).

“Estimated Net Working Capital” has the meaning set forth in Section 3.3(a).

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Final Closing Statement” has the meaning set forth in Section 3.3(c).

 

5

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“Final Net Company Debt” has the meaning set forth in Section 3.3(e)(iii).

“Final Net Working Capital” has the meaning set forth in Section 3.3(e)(i).

“Financial Statements” has the meaning set forth in Section 5.7.

“FITEL” means the Fondo de Inversión de Telecomunicaciones of Peru.

“FITEL Required Amount” means, as in effect from time to time prior to the
Closing Date, the Special Right for the Telecommunications Investment Fund
(Derecho Especial Destinado al Fondo de Inversión en Telecomunicaciones) payable
by the Company pursuant to (i) Article 12 of the Single Revised Text of the
Telecommunications Law, Supreme Decree No. 013-93-TCC (modified by Law
No. 29904) (Texto Único Ordenado de la Ley de Telecomunicaciones, Decreto
Supremo No. 013-93-TCC (modificado por Ley No. 29904)) and (ii) Articles 238 –
240 of the Single Revised Text of the General Regulations of the
Telecommunications Law, Supreme Decree No. 020-2007-MTC (modified by Supreme
Decree No. 019-2012-MTC) (Texto Único Ordenado del Reglamento General de la Ley
de Telecomunicaciones Decreto Supremo No. 020-2007-MTC) (modificado por el
Decreto Supremo No. 019-2012-MTC), but solely with respect to the Pre-Closing
Tax Period.

“Fundamental Representations” means the representations and warranties set forth
in Section 5.1 (Corporate Existence; Authority), Section 5.2 (Company’s
Corporate Existence), Section 5.4 (Capitalization), Section 5.5 (Ownership of
Shares), Section 5.6 (Subsidiaries), Section 5.10 (Taxes), Section 5.17
(Financial Advisors) or Section 5.19 (Transactions with Related Parties).

“General Enforceability Exceptions” has the meaning set forth in Section 5.1.

“Governmental Approval” means any consent, approval (or deemed approval after
the expiry of all appropriate waiting periods), authorization, notice,
permission or waiver of a Governmental Authority. For the avoidance of doubt,
the OSIPTEL Certification is not a Governmental Approval.

“Governmental Authority” means any U.S., Peruvian or foreign government,
governmental or regulatory body, or political subdivision thereof, any judicial
body, whether federal, state, regional, municipal or local, or any agency,
instrumentality, authority, court, or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government.

“Group A Concessions” means the authorizations granted by MTC to the Company to
operate in the 800 MHz and 1.9 GHz spectrum bands that are set forth on Schedule
1.1(b).

“Group B Concessions” means the authorizations granted by MTC to the Company to
operate in the 2.5 GHz and 3.5 GHz spectrum bands that are set forth on Schedule
1.1(c).

“Guarantee” by any Person shall mean any obligation, contingent or otherwise, of
such Person directly or indirectly guaranteeing any obligations of any other
Person and, without limiting the generality of the foregoing, any obligation,
direct or indirect, contingent or

 

6

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otherwise, of such Person (i) to purchase or pay (or advance or supply funds for
the purchase or payment of) such obligations (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for the purpose of assuring in any
other manner the holder of such obligations of the payment thereof or to protect
such holder against loss in respect thereof (in whole or in part). The term
Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business. The term Guarantee used as a verb has a
corresponding meaning.

“Hazardous Substance” shall mean any substance that is (i) listed, classified or
regulated pursuant to any Environmental Law; (ii) any petroleum product or
by-product, asbestos-containing material, lead-containing paint or plumbing,
polychlorinated biphenyls, mold, radioactive material or radon; and (iii) any
other substance which may be the subject of regulatory action by any
Governmental Authority in connection with any Environmental Law.

“ICC Rules” has the meaning set forth in Section 10.2(a).

“Indemnification Escrow Funds” has the meaning set forth in Section 3.2(b)(i).

“Indemnifying Party” has the meaning set forth in Section 9.3(a).

“Indemnity Escrow Account” means the account designated by the Escrow Agent
pursuant to the Escrow Agreement pursuant to which the Indemnification Escrow
Funds will be held.

“Independent Accounting Firm” has the meaning set forth in Section 3.3(c).

“Infringed” has the meaning set forth in Section 5.12(a).

“Insurance Policies” has the meaning set forth in Section 5.21.

“Intellectual Property” means all intellectual property rights, including the
following: (i) all patents and patent applications, including continuations,
divisionals, continuations-in-part, or reissues of patent applications and
patents issuing thereon, (ii) all trademarks, service marks, trade names,
service names, brand names, trade dress rights, logos, Internet domain names,
corporate names and other source indicators, together with the goodwill
associated with the rights described in this clause (ii), registrations and
renewals of the foregoing (“Trademarks”), (iii) all copyrights, (iv) all
Software, and (v) all trade secrets, know-how, customer lists, plans, proposals,
technical data, financial, marketing and business data, pricing and confidential
or proprietary information.

“Knowledge of the Purchasers” means the actual knowledge of any of Antonio
Büchi, Felipe Ureta, Sebastián Dominguez and Carlos Cristián Maturana after due
inquiry.

“Knowledge of the Sellers and the Sellers’ Parent” means the actual knowledge of
any of the Persons set forth on Schedule 1.1(d) after due inquiry.

 

7

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“Law” means any U.S., Peru or foreign, federal, state, local law, statute, code,
Order, ordinance, rule or regulation.

“Leased Real Property” has the meaning set forth in Section 5.11(b).

“Leasehold” has the meaning set forth in Section 5.24(c).

“Legal Proceeding” means any action, claim, complaint, suit, arbitration or
other proceeding, whether civil, criminal, administrative or otherwise, at Law
or in equity, by or before any Governmental Authority or arbitrator.

“Liabilities” has the meaning set forth in Section 5.8.

“Licenses” has the meaning set forth in Section 5.12(a).

“Lien” means any lien, pledge, mortgage, deed of trust, security interest,
claim, lease, charge, conditional sale or other title retention agreement,
option, right of first refusal, voting agreement, easement, servitude, or
transfer or other restrictions or encumbrances of any kind or any agreement to
create or effect any of the foregoing.

“Losses” means any and all losses (including any Remedial Losses), liabilities,
claims, damages, penalties, fines, judgments, awards, settlements, costs, fees
(including reasonable investigation fees), expenses (including reasonable
attorneys’ fees) and disbursements, except that in no event will “Losses”
include any exemplary or punitive damages.

“Marketing Amount” means the amount set next to the line item captioned
“Customer Care, Marketing and Sales Expenses” that is set forth on Schedule 7.17
multiplied by a fraction, the numerator of which is the number of calendar days
from January 1, 2013 and ending on the day immediately prior to the Closing Date
and the denominator of which is 365.

“Material Adverse Effect” means a material adverse effect on the Company’s
Business, or on the assets, properties, results of operations or financial or
other condition of the Company, but excluding any effect resulting from (either
alone or in combination) (i) changes after the date of this Agreement in
Peruvian GAAP or changes in the accounting requirements applicable to the
industry in which the Company operates, (ii) any failure by the Company to meet
any projections, forecasts or revenue or earnings predictions (for the avoidance
of doubt, any underlying cause for any failure to meet projections, forecasts or
revenue or earning predictions may be considered in determining whether there
has been a Material Adverse Effect), (iii) changes after the date of this
Agreement in the financial or securities markets or conditions or economic,
regulatory or political conditions, in each case, globally, in Peru or in any
other jurisdiction, (iv) changes (including changes in Applicable Law) after the
date of this Agreement generally affecting the industry, the country or the
regions in which the Company operates, (v) acts of war, sabotage or terrorism or
effects of weather, meteorological events, earthquakes or other natural
disasters, (vi) the announcement of the transactions contemplated by this
Agreement, (vii) any action taken (or omitted to be taken) at the written
request or pursuant to the written consent of any of the Purchasers or
(viii) any action taken by the Company that is required pursuant to this
Agreement, except in the case of the foregoing clauses, (iii) and (iv) to the
extent such changes have a disproportionate adverse impact on the Company as
compared to other participants in the industry in which it operates.

 

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“Material Contracts” has the meaning set forth in Section 5.13(a).

“Minimum Sublicense End Date” has the meaning set forth in Section 7.10.

“Most Recent Balance Sheet” has the meaning set forth in Section 5.7.

“Most Recent Balance Sheet Date” has the meaning set forth in Section 5.7.

“MTC” means the Ministry of Transport and Communications (Ministerio de
Transportes y Comunicaciones) of Peru.

“Net Company Debt” means, without duplication, as of any date of determination,
the aggregate amount (i) then outstanding Company Debt (excluding the undrawn
amount of performance bonds and the undrawn amount of letters of credit, in each
case entered into in the Ordinary Course of Business and supporting the
performance of commercial obligations of the Company) minus (ii) cash, cash
equivalents and short-term investments of the Company.

“Net Purchase Price” has the meaning set forth in Section 3.2(a).

“Net Working Capital” means, without duplication, (i) the current assets of the
Company, but excluding any cash, cash equivalents and short-term investments,
prepaid assets, deferred assets and inter company receivables; minus (ii) the
current liabilities of the Company but excluding any deferred revenues, deferred
liabilities, intercompany payables and current liabilities for Company
Transaction Expenses, all as presented on the Company’s balance sheet in
accordance with Peruvian GAAP.

“Network Assets” means the Transmitter Sites, tower structures, antennas,
transmitters, base radios, switches, aggregation points and other equipment, in
each case, owned or leased by the Company and used in connection with the Group
A Concessions.

“NII Móviles” has the meaning set forth in the Preamble.

“NII Telecom” has the meaning set forth in the Preamble.

“Order” means any order, injunction, judgment, decree, ruling, writ, assessment
or arbitration award of a Governmental Authority or of any court or arbitrator
(public or private).

“Ordinary Course of Business” means the conduct of the Company’s Business in the
ordinary and usual course, consistent with past practices.

“OSIPTEL” means the Organismo Supervisor de Inversión Privada en
Telecomunicaciones of Peru.

“OSIPTEL Certification” means a written notice or letter issued by OSIPTEL
confirming (without any condition or obligation to undertake any future action)
the Company’s

 

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compliance with its obligations under the 1900 MHz Concession Agreement with
respect to the coverage and subscriber requirements established in clause 8.3 of
the 1900 MHz Concession Agreement and Annex 3 of the Resolución Directoral
No. 108-2012 MTC/27 issued by the MTC.

“OSIPTEL Filing” has the meaning set forth in Section 7.19(b).

“OSIPTEL Required Amount” means, as in effect from time to time prior to the
Closing Date, the Regulatory Contribution (Aporte por Regulación) payable by the
Company pursuant to Article 10 of Law 27332, Framework Law of Regulatory
Agencies for Private Investment in Public Services (Marco de los Organismos
Reguladores de la Inversión Privada en los Servicios Públicos), but solely with
respect to the Pre-Closing Tax Period.

“Other Concessions” means any permit or authorization granted by any
Governmental Authority authorizing the Company to use spectrum, but excluding
the Company Concessions.

“Owned Real Property” has the meaning set forth in Section 5.11(a).

“Party” means a Seller, a Purchaser and the Sellers’ Parent.

“Permissible Entity” has the meaning set forth in Section 7.15(a).

“Permits” means any approvals, authorizations, consents, licenses, permits or
certificates issued by a Governmental Authority, but excluding the Company
Concessions.

“Permitted Liens” means (i) all defects, exceptions, restrictions, easements,
rights of way and encumbrances disclosed in policies of title insurance which
have been made available to the Purchasers prior to the date of this Agreement,
(ii) statutory liens for current Taxes, assessments or other governmental
charges not yet delinquent or the amount or validity of which is being contested
in good faith by appropriate proceedings, (iii) mechanics’, carriers’, workers’,
repairers’ and similar Liens arising or incurred in the Ordinary Course of
Business, (iv) zoning, entitlement and other land use and environmental
regulations by any Governmental Authority, (v) liens securing Company Debt as
disclosed in the Financial Statements, (vi) title of a lessor under a capital or
operating lease, (vii) general utility, roadway and other easements or rights of
way that do not or would not reasonably be expected to, individually or in the
aggregate, materially adversely affect the use or operation of any Network
Asset, (viii) rights of, or by, through or under Persons leasing, licensing or
otherwise occupying space on any Network Asset or otherwise utilizing any
Network Asset pursuant to any co-location agreement and (ix) all Liens of public
record against the underlying real property interest of any ground lessor under
any ground lease.

“Person” means any individual, corporation, partnership, limited liability
company, firm, joint venture, association, joint-stock company, trust,
unincorporated organization, Governmental Authority or other entity.

“Personal Data” means any personally identifiable information or any information
that allows the identification of a natural person, including a natural person’s
name, street address, telephone number, e-mail address, photograph, social
security number, government-issued identification number, driver’s license
number, passport number and customer or account number.

 

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“Peruvian GAAP” means Peruvian generally accepted accounting principles as in
effect on the date hereof applied on a consistent basis, consistent with the
Company’s historic practice.

“Post-Closing Tax Period” means any taxable period of the Company beginning
after the Closing Date and the portion of any Straddle Period beginning after
the Closing Date.

“Pre-Closing Taxes” means (i) any and all liability for Taxes of the Company
with respect to a Pre-Closing Tax Period and (ii) Pre-Closing Straddle Period
Taxes.

“Pre-Closing Tax Period” means any taxable period of the Company ending on or
before the Closing Date.

“Pre-Closing Straddle Period Taxes” has the meaning set forth in
Section 7.13(c).

“Purchaser” means each of Entel Inversiones and Entel, and together, the
Purchasers.

“Purchaser Beneficiaries” has the meaning set forth in Section 9.1(a).

“Purchaser Documents” has the meaning set forth in Section 6.1.

“Purchaser Returns” has the meaning set forth in Section 7.13(b).

“Purchaser Tax Act” means any action taken by the Purchasers or any of their
respective Affiliates (including, after the Closing, the Company) following the
Closing (including the portion of the Closing Date after the Closing), other
than an action taken in the Ordinary Course of Business or an action that is
required by applicable Law (and other than any of the transactions contemplated
hereunder), that results in any gain or income to the Company for a Pre-Closing
Tax Period.

“Regulatory Reports” means all reports filed before the MTC and/or OSIPTEL.

“Related Party Transactions” means all Contracts and other arrangements between
(i) the Company, on the one hand, and (ii) the Sellers’ Parent, any Seller, any
of their Affiliates (other than the Company) or any of their respective
directors or officers, on the other hand.

“Remedial Losses” has the meaning set forth in the Escrow Agreement.

“Restricted Period” means the period from the Closing Date until the earlier of
(i) the third anniversary of the Closing Date and (ii) the date on which a
Change of Control of the Sellers’ Parent occurs.

“Sales Distribution Agreement” has the meaning set forth in Section 5.13(a)(iv).

“Securities Act” has the meaning set forth in Section 6.4.

“Seller” means each of NII Telecom and NII Móviles, and together, the Sellers.

 

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“Seller Beneficiaries” has the meaning set forth in Section 9.2(a).

“Seller Documents” has the meaning set forth in Section 5.1.

“Seller Licensed IP” has the meaning set forth in Section 7.12(a).

“Seller Returns” has the meaning set forth in Section 7.13(a).

“Seller Termination Date” has the meaning set forth in Section 4.4(a)(iii).

“Seller Transition Services Agreement” means that certain Transition Services
Agreement to be entered into by the Company, Sellers’ Parent and Nextel
International (Services) Ltd. on the Closing Date, in substantially the form
attached hereto as Exhibit A, pursuant to which the Sellers’ Parent and its
Affiliates shall provide, or cause to be provided, certain services to the
Company.

“Sellers’ Parent Brands” has the meaning set forth in Section 7.10(b).

“Sellers’ Parent” has the meaning set forth in the Preamble.

“Shares” means, collectively, the Company Shares and the Additional Shares.

“Software” means any and all (i) computer programs, including any and all
software implementations of algorithms, models and methodologies, whether in
source code or object code, (ii) databases and compilations, including any and
all data and collections of data, whether machine readable or otherwise,
(iii) descriptions, flow-charts and other work product used to design, plan,
organize and develop any of the foregoing, screens, user interfaces, report
formats, firmware, development tools, templates, menus, buttons and icons, and
(iv) all documentation including user manuals and other training documentation
related to any of the foregoing.

“Straddle Period” means a Tax period that begins on or before the Closing Date
and ends thereafter.

“Straddle Period Return” has the meaning set forth in Section 7.13(b).

“SUNAT” means the Peruvian Tax Authority (Superintendencia Nacional de
Administración Tributaria).

“Supplemental Escrow Account” means the account designated by the Escrow Agent
pursuant to the Escrow Agreement pursuant to which the Supplemental Escrow Funds
will be held.

“Supplemental Escrow Funds” has the meaning set forth in Section 3.2(b)(ii).

“Surviving Affiliate Agreements” has the meaning set forth in Section 7.18.

“Target Sublicense End Date” has the meaning set forth in Section 7.10.

“Target Working Capital” means $5,000,000.

 

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“Tax” or “Taxes” means (i) all federal, state, regional, municipal, or other
local taxes, charges, fees, imposts, levies or other assessments, including all
net income, gross receipts, capital, sales, use, ad valorem, value added,
transfer, franchise, profits, inventory, capital stock, license, withholding,
payroll, employment, social security, unemployment, excise, severance, stamp,
occupation, property and estimated taxes, customs duties, assessments and
charges of any kind whatsoever, (ii) all interest, penalties, fines, additions
to tax or additional amounts imposed by any Taxing Authority in connection with
any item described in clause (i), (iii) the FITEL Required Amount and (iv) the
OSIPTEL Required Amount.

“Tax Matter” has the meaning set forth in Section 7.13(e)(i)(B).

“Tax Return” means all returns, documents, elections, declarations, reports,
estimates, information returns, statements, and other information supplied or
required to be supplied to any Taxing Authority in respect of any Taxes
(including any attached schedules).

“Taxing Authority” means any Governmental Authority with respect to Taxes or
having jurisdiction over the assessment, determination, collection or imposition
of any Tax.

“Technical Committee” has the meaning set forth in Section 7.19(a).

“Third Party Claim” has the meaning set forth in Section 9.3(a).

“Trademark Licensor” means Nextel Communications, Inc.

“Trademark Licensor’s Brands” has the meaning set forth in Section 7.10.

“Trademark License Agreement” means the Fourth Amended and Restated Trademark
License Agreement, dated as of July 27, 2011, by and between the Trademark
Licensor and Sellers’ Parent.

“Trademark Licensor Consent” has the meaning set forth in Section 7.10.

“Transferred Contracts” means the Contracts set forth on Schedule 4.2(h).

“Transmitter Site” has the meaning set forth in Section 5.24(c).

“Unaudited Financial Statements” has the meaning set forth in Section 5.7.

(b) Other Definitional and Interpretive Matters. The following rules of
interpretation shall apply:

(i) When calculating the period of time before which, within which or following
which any act is to be done or step taken pursuant to this Agreement, the date
that is the reference date in calculating such period shall be excluded. If the
last day of such period is a non-Business Day, the period in question shall end
on the next succeeding Business Day.

 

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(ii) Any reference in this Agreement to “$” or “dollars” shall mean U.S.
dollars.

(iii) The Exhibits and Schedules to this Agreement are hereby incorporated and
made a part hereof and are an integral part of this Agreement.

(iv) Any reference in this Agreement to gender shall include all genders, and
words imparting the singular number only shall include the plural and vice
versa.

(v) All references in this Agreement to any “Section” are to the corresponding
Section of this Agreement unless otherwise specified.

(vi) The words such as “herein,” “hereinafter,” “hereof,” and “hereunder” refer
to this Agreement as a whole and not merely to a subdivision in which such words
appear unless the context otherwise requires.

(vii) The word “including” or any variation thereof means “including, without
limitation” and shall not be construed to limit any general statement that it
follows to the specific or similar items or matters immediately following it.

(viii) An item arising with respect to a specific representation or warranty
shall be deemed to be “reflected on” or “set forth in” a balance sheet or
financial statements, to the extent any such phrase appears in such
representation or warranty, to the extent (A) there is a reserve underlying a
number expressly set forth on such balance sheet or financial statements that is
specifically related to such item, (B) such item is expressly set forth on the
balance sheet or financial statements or (C) such item is reflected on the
balance sheet or financial statements and is specifically set forth in the notes
thereto.

(ix) Any reference to the “date hereof” means the date of this Agreement.

(x) The Parties have participated jointly in the negotiation and drafting of
this Agreement and, in the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as jointly drafted by
the Parties and no presumption or burden of proof shall arise favoring or
disfavoring any Party by virtue of the authorship of any provision of this
Agreement.

ARTICLE II

SALE AND PURCHASE OF SHARES

2.1 Sale and Purchase of Shares. Upon the terms and subject to the conditions
contained herein, on the Closing Date, each Seller will sell, assign, transfer
and deliver to the Purchasers, and the Purchasers will purchase and accept
delivery from that Seller of, all of that Seller’s Shares.

 

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ARTICLE III

CONSIDERATION

3.1 Consideration. As consideration for the Shares and the covenants and
agreements set forth herein, the Purchasers shall pay the amount described in
Section 3.2(a), as adjusted pursuant to Section 3.3.

3.2 Closing Date Payment. (a) On the Closing Date, the Purchasers shall pay to
the Sellers an amount (such amount, the “Net Purchase Price”) in cash equal to:

(i) the Applicable Purchase Price,

(ii) minus the amount of the Estimated Net Company Debt; for the avoidance of
doubt, if Net Company Debt is less than zero, then the Net Purchase Price is
increased by the amount of cash, cash equivalents and short-term investments in
excess of the Company Debt, and

(iii) either (A) minus the positive excess, if any, of the Target Working
Capital over the Estimated Net Working Capital; or (B) plus the positive excess,
if any, of the Estimated Net Working Capital over the Target Working Capital.

(b) At Closing, the Purchasers shall pay the Net Purchase Price as follows:

(i) $50,000,000 (the “Indemnification Escrow Funds”) shall be deposited by wire
transfer of immediately available funds into the Indemnity Escrow Account and
held pursuant to the terms of the Escrow Agreement to secure the Seller’s and
the Sellers’ Parent’s obligations under Article IX;

(ii) if the Purchasers waive the condition set forth in Section 8.1(d)(ii), then
$15,000,000 (the “Supplemental Escrow Funds”) shall be deposited by wire
transfer of immediately available funds into the Supplemental Escrow Account and
held pursuant to the terms of the Escrow Agreement; and

(iii) the remaining portion of the Net Purchase Price shall be paid to the
Sellers, by wire transfer of immediately available funds into an account or
accounts designated by the Sellers at least two Business Days prior to the
Closing Date and allocated to each Seller proportionately based on its ownership
of the Shares.

3.3 Net Purchase Price Adjustment.

(a) Estimated Net Working Capital and Estimated Net Company Debt. Two Business
Days prior to the Closing Date, the Sellers shall cause to be prepared and
delivered to the Purchasers a calculation of the estimated Net Working Capital
(such estimate, the “Estimated Net Working Capital”) and estimated Net Company
Debt (such estimate, the “Estimated Net Company Debt”), in each case as of the
Closing Date. Such calculation shall be prepared in accordance with Peruvian
GAAP and on a basis consistent with the Company’s past practice. All
calculations under this Section 3.3 shall be made in dollars. Any amounts in

 

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the Estimated Net Working Capital, Estimated Net Company Debt or the Closing
Statement that are stated in Peruvian Nuevo Soles shall be converted into
dollars at the official exchange rate as published by the “Superintendencia de
Banca y Seguros – SBS” on, as applicable, (i) the day that is two Business Days
prior to the Closing Date with respect to the Estimated Net Working Capital and
Estimated Net Company Debt and (ii) on the Closing Date, with respect to the
Closing Statement.

(b) Closing Statement. Within 60 days after the Closing Date, the Purchasers
shall prepare and deliver to the Sellers a balance sheet of the Company (the
“Closing Statement”), setting forth the Net Working Capital and the Net Company
Debt, in each case, as of the Closing Date. The Closing Statement shall be
prepared in accordance with Peruvian GAAP and on a basis consistent with the
Company’s past practice during the last year covered by the Audited Financial
Statements.

(c) Dispute. Within 45 days following receipt by the Sellers of the Closing
Statement, the Sellers shall deliver written notice to the Purchasers of any
dispute the Sellers have with respect to the preparation or content of the
Closing Statement, setting forth in reasonable detail the basis for such
dispute. If the Sellers do not so notify the Purchasers of a dispute with
respect to the Closing Statement within such 45 day period, such Closing
Statement will be final, conclusive and binding on the Parties. In the event of
a timely notification of a dispute, the Purchasers and the Sellers shall
negotiate in good faith to resolve such dispute. If the Purchasers and the
Sellers fail to resolve such dispute within 45 days after the Sellers advise the
Purchasers of the Sellers’ objections, then the Purchasers and the Sellers shall
submit the items remaining in dispute to Deloitte Touche Tohmatsu Limited to
resolve such dispute, or if such firm does not accept such engagement, another
internationally recognized firm of independent public accountants as to which
Parent and the Sellers mutually agree acting promptly and in good faith (the
“Independent Accounting Firm”). The Independent Accounting Firm shall, acting as
experts in accounting and not as arbitrators, resolve the dispute. The Sellers
and the Purchasers each agree to execute, if requested by the Independent
Accounting Firm, a reasonable engagement letter. As promptly as practicable
thereafter, the Purchasers and the Sellers shall each prepare and submit a
presentation to the Independent Accounting Firm. As soon as practicable
thereafter, the Purchasers and the Sellers shall cause the Independent
Accounting Firm to choose one of the Party’s positions based solely upon the
written presentations by the Purchasers and the Sellers. The Party whose
position is not accepted by the Independent Accounting Firm shall be responsible
for all of the fees and expenses of the Independent Accounting Firm. All
determinations made by the Independent Accounting Firm will be final, conclusive
and binding on the Parties. The term “Final Closing Statement”, as used in this
Agreement, shall mean the definitive Closing Statement accepted by the Sellers
or agreed to by the Sellers and the Purchasers or the definitive Closing
Statement resulting from the determinations made by the Independent Accounting
Firm in accordance with this Section 3.3(c) (in addition to those items accepted
by the Sellers or agreed to by the Sellers and the Purchasers).

(d) Access. The Purchasers will, and will cause the Company to, (i) assist the
Sellers and their representatives in the review of the Closing Statement and
provide the Sellers with full access during normal business hours to the books,
records (including work papers, schedules, memoranda and other documents),
supporting data, facilities and employees of the Company for purposes of their
review of the Closing Statement, and (ii) cooperate fully with the

 

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Sellers and their representatives in connection with such review, including
providing on a timely basis all other information necessary or useful in
connection with the review of the Closing Statement as is requested by the
Sellers or their representatives.

(e) Net Purchase Price Adjustment. Within 5 Business Days of the date on which
the Final Closing Statement is finally determined pursuant to Section 3.3(c):

(i) If the Net Working Capital set forth on the Final Closing Statement (the
“Final Net Working Capital”) is less than the Estimated Net Working Capital,
then the Net Purchase Price will be adjusted downward by the amount of such
shortfall and NII Telecom will pay to the Purchasers an amount equal to such
shortfall.

(ii) If the Final Net Working Capital is greater than the Estimated Net Working
Capital, then the Net Purchase Price will be adjusted upward by the amount of
such excess and the Purchasers shall pay or cause to be paid an amount equal to
such excess to NII Telecom.

(iii) If the Net Company Debt set forth on the Final Closing Statement (the
“Final Net Company Debt”) is less than the Estimated Net Company Debt, then the
Net Purchase Price will be adjusted upward by the amount of the difference and
the Purchasers shall pay or cause to be paid to NII Telecom an amount equal to
that difference.

(iv) If the Final Net Company Debt is greater than the Estimated Net Company
Debt, then the Net Purchase Price will be adjusted downward by the amount of the
difference and NII Telecom will pay to the Purchasers an amount equal to that
difference.

(f) Payment of Net Purchase Price Adjustment. Any payment required to be made
pursuant to this Section 3.3 shall be made by wire transfer of immediately
available funds to an account or accounts designated in writing by the receiving
party for such purpose or by such other means as mutually agreed upon by the
Parties.

3.4 Withholding Rights. The Purchasers shall be entitled to, without
duplication, deduct and withhold from any amounts otherwise payable to the
Sellers or to any other Person pursuant to this Agreement (including any
adjustments pursuant to Section 3.3 or indemnification payments treated as
adjustments pursuant to Section 9.5) such amounts as they are required to deduct
or withhold with respect to the making of such payment under applicable Tax Law.
The Purchasers shall use commercially reasonable efforts to give the Sellers
notice of any withholding at least two Business Days prior to the date of
payment together with copies of all Tax Returns or similar documents relating
directly to such withholding. Within 15 days following payment, the Purchasers
shall deliver to the Sellers receipts evidencing such payment to the extent such
receipts are received from the applicable Taxing Authority or, to the extent no
such receipts are received, other reasonable, written evidence of payment. If
the Purchasers so deduct or withhold (or cause to be deducted or withheld) any
such amounts, such amounts shall be paid over to the appropriate Taxing
Authority and shall be treated for all purposes of this Agreement as having been
paid to the Person in respect of which the Purchasers made such deduction or
withholding.

 

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ARTICLE IV

CLOSING AND TERMINATION

4.1 Closing Date. Subject to the satisfaction of the conditions set forth in
Section 8.1 and Section 8.2 (or the waiver thereof by the Party entitled to
waive that condition), the closing of the sale and purchase of the Shares
provided for in Section 2.1 (the “Closing”) shall take place at the offices of
Jones Day, 222 East 41st Street, New York, New York, 10017 (or at such other
place as the Parties may designate in writing) at 10:00 a.m. (New York City
time) on a date to be specified by the Parties, which date shall be no later
than the fifth Business Day after the satisfaction or waiver of each condition
to the Closing set forth in Article VIII (other than conditions that by their
nature are to be satisfied at the Closing, but subject to the satisfaction or
waiver of such conditions), unless another time or date, or both are agreed to
in writing by the Parties. The date on which the Closing shall be held is
referred to in this Agreement as the “Closing Date.”

4.2 Closing Deliveries by the Sellers. On the Closing Date, the Sellers shall
deliver or cause to be delivered to the Purchasers the following items:

(a) a certificate, dated as of the Closing Date, signed by an officer of each of
the Sellers and the Sellers’ Parent certifying as to the satisfaction of the
conditions specified in Section 8.1(a) and Section 8.1(b);

(b) written resignations of each of the directors of the Company;

(c) resolutions of the Sellers as shareholders of the Company duly appointing as
directors of the Company each of the individuals designated in writing by the
Purchasers prior to the Closing;

(d) the shareholder registry (matrícula de acciones) of the Company evidencing
(1) the transfer of the Shares to the Purchasers, free and clear of any and all
Liens, (2) the cancellation of the share certificates issued to each Seller and
(3) the issuance of one or more new share certificates in the name of the
Purchasers representing all of the Shares;

(e) the new share certificates issued to the Purchasers collectively
representing the Shares;

(f) executed copies of the Escrow Agreement, the Purchaser Transition Services
Agreement and the Seller Transition Services Agreement;

(g) (i) a certificate issued by the SUNAT certifying the taxable cost of the
Shares for purposes of calculating the applicable Peruvian income tax levied on
the capital gain, if any, arising from the sale of the Shares to the Purchaser
and (ii) a copy of the bank receipt evidencing the payment in full by the
Sellers to the SUNAT of the Peruvian income tax levied on the capital gain, if
any, arising from the sale of the Shares to the Purchaser; and

 

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(h) evidence that the Company, the Sellers and the Sellers’ Parent, as
applicable, has, to the extent permitted by the Transferred Contracts, assigned
the Transferred Contracts to the Company or, to the extent assignment is not
permitted, has taken action to cause the benefits of the Transferred Contracts
to be available to the Company.

4.3 Closing Deliveries by the Purchasers. On the Closing Date, the Purchasers
shall deliver or cause to be delivered to the Sellers the following items:

(a) a certificate, dated as of the Closing Date, signed by an officer of each of
the Purchasers certifying as to the satisfaction of the conditions specified in
Section 8.2(a) and Section 8.2(b);

(b) evidence of the wire transfers referred to in Section 3.2; and

(c) executed copies of the Escrow Agreement, the Purchaser Transition Services
Agreement and the Seller Transition Services Agreement.

4.4 Termination of Agreement.

(a) This Agreement may be terminated prior to the Closing as follows:

(i) by mutual written consent of the Sellers and the Purchasers;

(ii) by the Sellers or the Purchasers, upon notice to the other Party, if the
transactions contemplated by this Agreement have not been consummated on or
prior to the date that is the later of (A) December 31, 2013 and (B) the date
that is the earlier of (1) 240 days after the OSIPTEL Filing and (2) the first
anniversary of the date of this Agreement, or such later date, if any, as the
Sellers and the Purchasers may agree upon in writing (the “Drop Dead Date”);

(iii) by the Sellers, upon notice to the Purchasers given not more than ten days
after the Seller Termination Date and after payment of the termination fee
pursuant to Section 4.5, if the transactions contemplated by this Agreement have
not been consummated on or prior to the date that is the latest of
(A) August 15, 2013, (B) 90 days after the Company Certification Date and (C) 30
days after all conditions set forth in Section 8.1 (other than the conditions
set forth in (i) Section 8.1(d)(ii) and (ii) Section 8.1(g) with respect to the
closing deliverables set forth in Section 4.2(a)-(f) and Section 4.2(g)(ii))
have been either satisfied or waived by the Purchasers (such latest date, the
“Seller Termination Date”); or

(iv) by the Sellers or the Purchasers, upon notice to the other Party, if there
shall be in effect a final nonappealable Order of a Governmental Authority of
competent jurisdiction restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated by this Agreement.

(b) The right to terminate this Agreement under Sections 4.4(a)(ii), (iii) and
(iv) shall not be available to any Party whose breach of any provision of this
Agreement results in or causes the failure of the transactions contemplated by
this Agreement to be consummated by the Drop Dead Date or the Seller Termination
Date, as applicable.

 

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4.5 Termination Fee. Prior to the termination of this Agreement pursuant to
Section 4.4(a)(iii), the Sellers’ Parent shall pay, or cause Sellers to pay, to
Entel an aggregate termination fee of $48,000,000 by wire transfer of
immediately available funds to an account designated in writing to the Sellers’
Parent by Entel within two Business Days of the delivery of the termination
notice. This termination fee is liquidated damages for any and all Losses
suffered or incurred by the Purchasers, and none of Purchasers or any of their
respective Affiliates shall be entitled to bring or maintain any further claim,
action or proceeding against the Sellers, the Sellers’ Parent or any of their
respective Affiliates arising out of such matters. The Sellers’ Parent or
Sellers as the designated payee shall be entitled to, without duplication,
deduct and withhold from any amount otherwise payable to the Purchasers pursuant
to this Section 4.5 such amounts as the Sellers’ Parent or Sellers as the
designated payee are required to deduct or withhold with respect to the making
of such payment under applicable Tax Law. The Sellers’ Parent shall use
commercially reasonable efforts to give the Purchasers notice of any withholding
at least two Business Days prior to the date of payment together with copies all
Tax Returns or similar documents relating directly to such withholding. Within
15 days following payment, the Sellers’ Parent shall deliver to the Purchasers
receipts evidencing such payment to the extent such receipts are received from
the applicable Taxing Authority or, to the extent no such receipts are received,
other reasonable, written evidence of payment. If the Sellers’ Parent so deducts
or withholds (or causes to be deducted or withheld) any such amounts, such
amounts shall be paid over to the appropriate Taxing Authority and shall be
treated for all purposes of this Agreement as having been paid to the Person in
respect of which the Sellers’ Parent or Sellers as the designated payee made
such deduction or withholding.

4.6 Effect of Termination. Subject to Section 4.5, if this Agreement is validly
terminated in accordance with Section 4.4, then (i) each of the Parties shall be
relieved of its duties and obligations arising under this Agreement after the
date of such termination and (ii) such termination shall be without liability to
the Purchasers, the Sellers or the Sellers’ Parent. No termination shall relieve
any Party from liability for any willful breach of this Agreement. The
obligations of the Parties set forth in Section 4.5, Section 4.6, Section 7.6,
Section 7.7, Section 10.2, Section 10.7 and Section 10.14 shall survive any
termination.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE SELLERS

The Sellers and the Sellers’ Parent represent and warrant, jointly and severally
to the Purchasers that the statements contained in this Article V are true and
correct as of the date of this Agreement and will be true and correct as of the
Closing Date (except for representations and warranties that expressly relate to
a specified date, the inaccuracy or breach of which will be determined with
reference to such specified date):

5.1 Corporate Existence; Authority. Each Seller is a limited liability company
duly organized and validly existing under the Laws of Spain and has all
requisite corporate power and authority to own, lease and operate its assets and
carry on its business as currently conducted.

 

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The Sellers’ Parent is a corporation duly organized and validly existing under
the Laws of the State of Delaware and has all requisite corporate power and
authority to own, lease and operate its assets and carry on its business as
currently conducted. Each Seller and the Sellers’ Parent has all requisite
corporate power and authority to enter into this Agreement and each other
agreement, document, or instrument or certificate contemplated by this Agreement
or to be executed by either Seller or the Sellers’ Parent in connection with the
consummation of the transactions contemplated by this Agreement (the “Seller
Documents”), and to consummate the transactions contemplated hereby and thereby.
This Agreement has been, and each Seller Document will be, at or prior to the
Closing, duly authorized, executed and delivered by each Seller and/or the
Sellers’ Parent, as applicable, and no additional proceedings on the part of
such Seller or the Sellers’ Parent are necessary to authorize the consummation
of this Agreement or any Seller Document or the transactions contemplated hereby
or thereby. This Agreement constitutes, and each Seller Document when so
executed and delivered will constitute, a valid and binding agreement of the
Sellers and/or the Sellers’ Parent, as applicable, enforceable in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar Laws of general applicability relating to
or affecting creditors’ rights and to general equity principles (collectively,
the “General Enforceability Exceptions”).

5.2 Company’s Corporate Existence. The Company is a corporation duly organized
and validly existing under the Laws of Peru and has all requisite corporate
power and authority to own, lease and operate its assets and to carry on the
Company’s Business. The Company is duly qualified or authorized to do business
under the Laws of each jurisdiction in which the conduct of the Company’s
Business or the ownership of its properties requires such qualification or
authorization, except where the failure to be so qualified or authorized would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

5.3 Conflicts; Consents of Third Parties.

(a) Except as set forth on Schedule 5.3(a), none of the execution and delivery
by the Sellers or the Sellers’ Parent of this Agreement or the Seller Documents,
the consummation of the transactions contemplated hereby or thereby, or
compliance by the Sellers or the Sellers’ Parent with any of the provisions
hereof or thereof will conflict with, or result in any violation of or default
(with or without notice or lapse of time, or both) under, or give rise to a
right of termination, modification, acceleration or cancellation under, any
provision of (i) the certificate of incorporation and by-laws or comparable
organizational documents of the Company, either of the Sellers or the Sellers’
Parent, (ii) any Contract, Company Concession or Permit to which the Company,
either of the Sellers or the Sellers’ Parent is a party or by which any of the
properties or assets of the Company, either of the Sellers or the Sellers’
Parent are bound, (iii) any Order of any Governmental Authority applicable to
the Company, either of the Sellers or the Sellers’ Parent or by which any of the
properties or assets of the Company, either of the Sellers or the Sellers’
Parent are bound, or (iv) any applicable Law, other than, in the case of clauses
(ii), (iii) and (iv), such conflicts, violations, defaults, terminations,
modifications, accelerations or cancellations, that would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.

(b) Except as set forth on Schedule 5.3(b), no consent, waiver, approval, Order,
Permit or authorization of, or declaration or filing with, or notification to,
any Person or

 

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Governmental Authority is required on the part of the Company, either of the
Sellers or the Sellers’ Parent in connection with the execution and delivery of
this Agreement or the Seller Documents or the compliance by the Sellers or the
Sellers’ Parent with any of the provisions hereof or thereof, or the
consummation of the transactions contemplated hereby or thereby, except for such
consents, waivers, approvals, Orders, Permits or authorizations the failure of
which to obtain would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

5.4 Capitalization.

(a) As of the date of this Agreement, the authorized share capital of the
Company consists of 1,646,870,620 ordinary shares (the “Company Shares”),
representing all the issued and outstanding share capital of the Company. As of
the Closing Date, the only authorized share capital of the Company, representing
all of the issued and outstanding share capital of the Company, will be the
Shares. All of the issued and outstanding Shares were (or in the case of the
Additional Shares, will be, when issued) duly authorized for issuance and are
validly issued, fully paid and non-assessable.

(b) There is no existing option, warrant, call, right, or Contract of any
character to which any Person is a party requiring, and there are no securities
outstanding which upon conversion or exchange would require, the issuance, of
any Shares or other securities convertible into, exchangeable for or evidencing
the right to subscribe for or purchase Shares. Neither any Seller nor the
Company is a party to any voting trust or other Contract restricting or relating
to the voting, redemption, sale, transfer or other disposition of any of the
Shares.

5.5 Ownership of Shares. As of the date of this Agreement, the Sellers are the
record and beneficial owners of the Company Shares, free and clear of any and
all Liens (except for any Liens created by this Agreement). As of the Closing
Date, the Sellers will be the record and beneficial owners of the Shares, free
and clear of any and all Liens (except for any Liens created by this Agreement).
The Sellers have the power and authority to sell, transfer, assign and deliver
the Shares as provided in this Agreement, and such delivery will convey to the
Purchasers ownership of the Shares, free and clear of any and all Liens.

5.6 Subsidiaries. The Company does not own any equity interest in any other
entity.

5.7 Financial Statements. The Sellers have delivered to the Purchasers copies of
(a) the audited balance sheets of the Company as at December 31,
2009, December 31, 2010, and December 31, 2011 and the related audited
statements of income and of cash flows of the Company for the years then ended,
together with the notes thereto (the “Audited Financial Statements”) and (b) the
unaudited balance sheet of the Company (the “Most Recent Balance Sheet”) as at
December 31, 2012 (the “Most Recent Balance Sheet Date”) and the related
statements of income and cash flows of the Company for the year then ended (the
“Unaudited Financial Statements” and, together with the Audited Financial
Statements, the “Financial Statements”). Except as set forth in the notes
thereto, each of the Financial Statements has been prepared in accordance with
Peruvian GAAP consistently applied and presents fairly in all material respects
the financial position, results of operations and cash flows of the Company as
at the dates and for the periods indicated therein, except that the Unaudited
Financial Statements are subject to lack of footnotes.

 

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5.8 No Undisclosed Liabilities. Except (a) as disclosed in Schedule 5.8, (b) for
liabilities set forth in the Most Recent Balance Sheet, (c) for liabilities
incurred since the Most Recent Balance Sheet Date in the Ordinary Course of
Business or (d) for liabilities under the Seller Documents or incurred in
connection with the transactions contemplated by this Agreement, in each case to
the extent such liabilities shall have been paid on or prior to the Closing and
taken into account in the Net Working Capital Calculation pursuant to
Section 3.3, the Company does not have any liabilities, obligations or
commitments of any nature whatsoever, asserted or unasserted, known or unknown,
absolute or contingent, accrued or unaccrued, matured or unmatured or otherwise
(“Liabilities”). Except as set forth in the Most Recent Balance Sheet, the
Company does not have any off balance sheet Liability of any nature to, or any
financial interest in, any third party or entities, the purpose or effect of
which is to defer, postpone, reduce or otherwise avoid or adjust the recording
of expenses incurred by the Company.

5.9 Absence of Certain Developments. Since the Most Recent Balance Sheet Date,
(a) the Company has conducted the Company’s Business only in the Ordinary Course
of Business and (b) there has not been any event, change, occurrence or
circumstance, individually or in the aggregate, that has had or would reasonably
be expected to have a Material Adverse Effect. In addition, since the Most
Recent Balance Sheet Date and prior to the date of this Agreement, the Company
has not taken any action which, if taken on or after the date hereof, would
constitute a breach of the pre-closing covenants in Section 7.2 of this
Agreement.

5.10 Taxes.

(a) The Company has timely filed all material Tax Returns required to be filed
by it, and all Taxes required to be paid by it have either been paid by it or
are reflected in accordance with Peruvian GAAP as a reserve for Taxes on the
most recent Financial Statements, and all such Tax Returns are correct and
complete in all material respects, or requests for extensions to file such Tax
Returns have been timely filed, granted and have not expired, except to the
extent that such failures to file, to pay or to have extensions granted that
remain in effect individually or in the aggregate have not had and would not
reasonably be expected to have a Material Adverse Effect, and the Financial
Statements reflect an adequate reserve for all Taxes payable by the Company for
all taxable periods and portions thereof through the date of such Financial
Statements.

(b) All material Taxes required to be withheld by the Company have been withheld
and have been (or will be) duly and timely paid to the proper Taxing Authority.

(c) Except as set forth on Schedule 5.10(c), as of the date of this Agreement,
no deficiencies for any Taxes have been proposed, asserted or assessed against
the Company that are still pending and no requests for waivers of the time to
assess any such Taxes have been made that are still pending.

 

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(d) Except as set forth on Schedule 5.10(d), to the Knowledge of the Sellers and
the Sellers’ Parent, no income Tax Return of the Company is under current
examination by any Taxing Authority.

(e) All assessments for Taxes due with respect to any concluded litigation have
been fully paid or have been adequately reserved on the Financial Statements in
accordance with Peruvian GAAP.

(f) There are no outstanding agreements, waivers or arrangements extending the
statutory period of limitation applicable to any claim for, or the period for
the collection or assessment of, Taxes due from or with respect to the Company
for any taxable period.

(g) The Company (i) is not and has never been a member of an affiliated group of
entities filing a consolidated Tax Return (other than any group of which they
are currently members) and (ii) does not have any liability for the Taxes of any
Person (other than the Company) as a transferee or successor, by contract, or
otherwise.

(h) The Company is not a party to, nor is it bound by, nor does it have any
obligation under, any tax allocation or sharing agreement or similar contract or
arrangement or any agreement that obligates it to make any payment computed by
reference to the Taxes, taxable income or taxable losses of any other Person.

(i) The representations and warranties in this Section 5.10 are the sole and
exclusive representations and warranties relating to Taxes.

5.11 Real Property.

(a) Schedule 5.11(a) sets forth a true and complete list of all real property
owned by the Company as of the date of this Agreement (other than Transmitter
Sites) (the “Owned Real Property”). Except as set forth in Schedule 5.11(a), the
Company has “absolute” (as construed in accordance with Peruvian Law) property
rights, free and clear of Liens (other than Permitted Liens), to all of the
Owned Real Property. With respect to each parcel of Owned Real Property, there
are no outstanding rights of first refusal, rights of first offer or options to
purchase such parcel or interest thereon. To the Knowledge of the Sellers and
the Sellers’ Parent, there are no conditions affecting any Owned Real Property
that might curtail or interfere with the use or occupancy by the Company of such
property as currently used and occupied. Neither the whole nor any portion of
the Owned Real Property is being condemned, expropriated or otherwise taken by
any Governmental Authority with or without payment of compensation therefor,
nor, to the Knowledge of the Sellers and the Sellers’ Parent, has any such
condemnation, expropriation or taking been threatened.

(b) Except as set forth in Schedule 5.11(b), the Company has provided or made
available to the Purchasers complete and accurate copies of all of the leases
and subleases (other than Transmitter Sites) (collectively, the “Company
Leases”) pursuant to which the Company, as of the date of this Agreement, holds
a leasehold or subleasehold estate or other right to use or occupy any interest
in any material real property and under which the Company is a tenant,
subtenant, licensee or occupant thereunder (the “Leased Real Property”),
together with all amendments, extensions, renewals, guarantees, and other
agreements with respect

 

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thereto. Except as set forth in Schedule 5.11(b), the Company has a good and
valid leasehold estate in each leasehold created by each Company Lease, free and
clear of all Liens (other than Permitted Liens). The Company is not in breach of
or in default under any Company Lease and, to the Knowledge of the Sellers and
the Sellers’ Parent, no event has occurred which, with due notice or lapse of
time or both, would constitute a breach or default by the Company under any
Company Lease or result in a termination thereof or would cause or permit the
acceleration or other changes of any right or obligation or the loss of any
benefit thereunder, except as would not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect. To the Knowledge
of the Sellers and the Sellers’ Parent, no lessor or sublessor is in material
breach of or material default under any Company Lease.

5.12 Intellectual Property.

(a) Schedule 5.12 sets forth a true and complete list of all Intellectual
Property owned as of the date of this Agreement (i) by the Company or (ii) by
the Sellers, to the extent used in the Company’s Business, in each case for
which a patent or registration exists or has been applied for; and all material
Contracts granting or receiving rights to use Intellectual Property to which the
Company or a Seller (to the extent related to the Business) is a party as of the
date of this Agreement (“Licenses”). The Intellectual Property owned by the
Company is free and clear of all Liens. The Intellectual Property owned by the
Company, together with the right to use the Intellectual Property licensed to
the Company, constitutes all Intellectual Property used in the Ordinary Course
of Business as presently conducted. Except as set forth on Schedule 5.12,
(i) the material Intellectual Property used by the Company is not the subject of
any challenge or Legal Proceeding received by the Sellers or the Company in
writing, and to the Knowledge of the Sellers and the Sellers’ Parent, the
Intellectual Property of the Business is not being infringed, misappropriated or
violated (“Infringed”), (ii) neither the Sellers nor the Company has received
since the Most Recent Balance Sheet Date any written notice of any default or
breach under any License, (iii) the Company is current on the payment of all
fees due under the Licenses and (iv) the conduct of the Business does not
Infringe the Intellectual Property (other than patents for which this
representation is being made to the Knowledge of the Sellers and the Sellers’
Parent) of any Person.

(b) The Company has taken commercially reasonable steps to protect and maintain
(i) its confidential information and trade secrets, (ii) its exclusive ownership
of material owned Intellectual Property and (iii) the security, operation and
integrity of its material systems and Software, and there have been no material
breaches, interruptions or violations of same; and all Software and systems
owned or used by the Company (i) substantially perform as needed to conduct the
business of the Company; (ii) are free from any material defect, bug, virus,
error or corruptant, and (iii) are fully functional and operate and run in a
reasonable and efficient business manner in the Ordinary Course of Business.

5.13 Material Contracts.

(a) Schedule 5.13(a) sets forth a list of the following Contracts (other than
statements of work, purchase, project, change or similar orders issued pursuant
to such Contracts) to which the Sellers (to the extent related to the Company’s
Business) or the Company is a party and under which the Company has any
remaining rights or obligations as of the date of this Agreement (collectively,
the “Material Contracts”):

(i) Contracts for the sale of any assets of the Company other than Contracts for
the sale of inventory to customers in the Ordinary Course of Business;

 

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(ii) Contracts for the acquisition of any business or assets constituting a
division or business unit or the equity interests of any other Person;

(iii) Contracts restricting the Company from engaging in any line of business or
competing with any Person or in any geographical area;

(iv) (A) any Contract evidencing or Guaranteeing Company Debt (excluding any
performance or surety bond entered into in connection with a Sales Distribution
Agreement) and (B) any mortgage, security agreement, guarantee, pledge agreement
or other Contract providing for any Lien on assets of the Company (but excluding
any sales distribution agreements, agency agreements, comisiones mercantiles or
other Contracts for services provided to any Governmental Authority or any other
Person that is using public funds to pay for such services (each, a “Sales
Distribution Agreement”), in each case, entered into the Ordinary Course of
Business);

(v) any joint venture or other Contract that results in sharing of profits and
losses;

(vi) any Contract with any Governmental Authority (including municipalities)
other than Contracts entered into in the Ordinary Course of Business for
services;

(vii) any Contract that requires the Company to purchase all or a portion of its
requirements of any product or service from a third party or that contains “take
or pay” provisions, in each case, requiring the payment of more than $3,000,000;

(viii) any Contract that provides for the indemnification by the Company of any
Person or the assumption of any Tax, environmental or other Liability of any
Person (other than any confidentiality agreement, Sales Distribution Agreement,
Leasehold or other Contract under which the Company gives an indemnity for
damages caused by the Company’s breach of its own obligations, in each case
entered into in the Ordinary Course of Business);

(ix) any employment agreement to which the Company is a party, expect for those
that are terminable, without penalty (other than any severance payments mandated
by applicable Law), on 90 days or less notice;

(x) any Contract with an independent contractor or consultant (or any similar
arrangement) to which the Company is a party other than those that can be
cancelled by the Company without penalty with advance notice of 90 days or less
or with a penalty of less than $500,000;

 

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(xi) any Contract or other arrangement representing a Related Party Transaction;

(xii) Contracts that would reasonably be likely to involve consideration of more
than $3,000,000 in any 12-month period that is an interconnection, bundling or
similar agreement in connection with which the equipment, networks and services
of the Company are connected to those of another service provider in order to
allow their respective customers access to each other’s services and networks
(except for those that are terminable, without penalty, on 12 months or less
notice);

(xiii) Contracts that would reasonably be likely to involve the payment by the
Company or receipt by the Company of consideration of more than $3,000,000 in
any 12-month period that is an agency, dealer, reseller, franchise or other
similar contract (except for those that are terminable, without penalty, on 90
days or less notice);

(xiv) Contracts that would reasonably be likely to involve the payment by the
Company or receipt by the Company of consideration of more than $3,000,000 in
any 12-month period that contains any commitment to (1) provide wireless
services coverage in a particular geographic area, (2) build out Transmitter
Sites in a particular geographic area, or (3) pay for a specified number of
minutes of roaming usage of a third party’s network regardless of the amount of
actual usage (except for those that are terminable, without penalty, on 12
months or less notice);

(xv) roaming Contracts that would reasonably be likely to involve the payment by
the Company or receipt by the Company of consideration of more than $3,000,000
in any 12-month period that cannot be terminated, without penalty, on 30 days or
less notice;

(xvi) any other Contracts which involve the expenditure of more than $3,000,000
in any 12-month period;

(xvii) any Contracts which (A) involve the granting of any rights or any
provisions that, individually or in the aggregate, materially restrict or
adversely affect the development, licensing, marketing, distribution or sale of
the Company’s products or services, (B) grant any exclusive license or supply or
distribution agreement or right or other exclusive rights that cannot be
terminated on 30 days or less notice without payment or penalty, or (C) involve
“most favored nation” or similar obligations or restrictions;

(xviii) any Licenses; and

(xix) any binding commitment to enter into any Contract of the type described in
clauses (i) through (xviii) of this Section 5.13(a).

(b) The Sellers have made available to the Purchasers correct and complete
copies of each and all of the Material Contracts and all amendments thereto and
each of the Material Contracts, as amended, is in full force and effect and is a
legal, valid and binding obligation of the Sellers and/or the Company, as
applicable, enforceable against them in

 

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accordance with its terms, subject to General Enforceability Exceptions. Except
as set forth in Schedule 5.13(b), neither the Sellers nor the Company nor, to
the Knowledge of the Sellers and the Sellers’ Parent, any other party thereto is
in material breach or violation of any Material Contract.

5.14 Labor; Employee Matters.

(a) Except as set forth in Schedule 5.14(a), the Company is not a party to or
otherwise bound by or engaged in negotiations with respect to any collective
bargaining agreement or any other labor-related agreement with any labor union,
labor organization or works council.

(b) Except as set forth in Schedule 5.14(b), no strike, slowdown, lockout or
work stoppage exists or, to the Knowledge of the Sellers and the Sellers’
Parent, is threatened against the Company, nor has there been any strike,
slowdown, lockout or work stoppage against the Company since March 15, 2008,
except as would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.

(c) Except as set forth in Schedule 5.14(c), to the Knowledge of the Sellers and
the Sellers’ Parent, (i) no labor union, labor organization or group of
employees of the Company has made a pending demand for recognition or
certification against the Company, (ii) there are no representation or
certification proceedings or petitions seeking a representation proceeding
presently pending against the Company with any labor relations tribunal or
authority and (iii) there are no pending union organizing efforts with respect
to the Company.

(d) The Company is in compliance in all material respects with all applicable
Laws respecting employment and employment practices, including all applicable
Laws respecting terms and conditions of employment, health and safety, wages and
hours, immigration, employment discrimination, disability rights or benefits,
equal opportunity, plant closures and layoffs, affirmative action, workers’
compensation, labor relations and the classification of workers with respect to
minimum wage, overtime and independent contractor status, except in each case
for such failures to comply as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. Except as set forth in
Schedule 5.14(d), no Legal Proceeding, audit or investigation is pending against
the Company relating to the alleged violation by the Company relating to
applicable Laws respecting employment and employment practices or, to the
Knowledge of the Sellers and the Sellers’ Parent, is threatened against the
Company, except for such Legal Proceedings, audits or investigations that, if
determined adversely to the Company, would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect. Except as set forth
in Schedule 5.14(d), the Company is not a party to, or otherwise bound by, any
consent decree with any Governmental Authority relating to employment and
employment practices.

(e) All of the Employee Plans of the Company, as in effect on the date of this
Agreement, are set forth on Schedule 5.14(e) (the “Company Employee Plans”). The
Company is in compliance in all material respects with the Company Employee
Plans. Each Company Employee Plan that is required by applicable Law to be
funded is funded to the extent required, and if a Company Employee Plan is not
required to be funded, the Liabilities with respect to

 

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benefits that are earned and payable by the Company under such Company Employee
Plans are adequately reserved for in the Audited Financial Statements. No Legal
Proceeding, audit or investigation relating to the alleged violation of any
Company Employee Plan is pending against the Company or, to the Knowledge of the
Sellers and the Sellers’ Parent, is threatened against the Company with respect
to any Company Employee Plan, except for such Legal Proceedings, audits or
investigations that, if determined adversely to the Company, would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.

5.15 Litigation. Except as disclosed in Schedule 5.15, there are no Legal
Proceedings or Orders pending or outstanding against the Company or, to the
Knowledge of the Sellers and the Sellers’ Parent, threatened (including cease
and desist letters or invitations to take a patent license) against the Sellers
(to the extent related to the Company’s Business) or the Company, except for
such Legal Proceedings that, if determined adversely to the Company, or Orders
that would not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect.

5.16 Compliance with Laws; Permits.

(a) Except as set forth on Schedule 5.16(a), the Company is and, since March 15,
2008, has been in compliance with all Laws of any Governmental Authority
applicable to its business or operations, except where the failure to be in
compliance would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. Except as disclosed in Schedule 5.16(a),
no investigation or review by any Governmental Authority with respect to the
Company is pending or, to the Knowledge of the Sellers and the Sellers’ Parent,
threatened, except for such investigations or reviews that would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

(b) Subject to Section 5.16(c), the Company currently has all Permits which are
required by applicable Law for the operation of its business as presently
conducted, except where the absence of which would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.

(c) Schedule 5.16(c) sets forth a true and correct list of all Transmitter Sites
with municipal Permits (licencias o autorizaciones municipales) that have been
expressly granted to the Company, and all such municipal Permits are in full
force and effect. Except as set forth in Schedule 5.16(b), the Company is not in
default or violation (and, to the Knowledge of the Sellers and the Sellers’
Parent, no event has occurred which, with notice or the lapse of time or both,
would constitute a default or violation) of any term, condition or provision of
any Permit to which it is a party, except where such default or violation would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Notwithstanding anything to the contrary in this Agreement, each
of the Purchasers acknowledges and agrees that the Sellers and the Sellers’
Parent are not making any representations regarding any Permits relating to any
of the Transmitter Sites other than the municipal Permits for the Transmitter
Sites identified on Schedule 5.16(c).

5.17 Financial Advisors. Except as set forth on Schedule 5.17, no Person has
acted, directly or indirectly, as a broker, finder or financial advisor for the
Company, either of the

 

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Sellers or the Sellers’ Parent in connection with the transactions contemplated
by this Agreement, and no Person is entitled to any fee or commission or like
payment from the Purchasers or the Company in respect thereof.

5.18 Banks. Schedule 5.18 contains a complete and correct list of the names and
locations of all banks in which the Company has accounts or safe deposit boxes
and the names of all persons authorized by the Company or any of its Affiliates
to draw on or to access to such accounts or safe deposit boxes. Except as set
forth on Schedule 5.18, no person holds a power of attorney to act on behalf of
the Company.

5.19 Transactions with Related Parties. Except as set forth on Schedule 5.19 or
with respect to any amounts to be repaid or Contracts to be terminated at
Closing (including pursuant to Section 7.18), at the Closing Date, the Company
will have no outstanding Company Debt, claim, Liability or obligation (including
for cash advances or negative cash balances), or notes or accounts receivable
from, or Contracts, Related Party Transactions, or other transactions,
commitments or arrangements with or for the benefit of any of the Sellers or
their Affiliates, any of their respective directors or officers.

5.20 Environmental Matters. Except as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect:

(a) the Company is and, since March 15, 2008, has been in compliance with all
applicable Environmental Laws and has not incurred any Liabilities concerning
any applicable Environmental Laws with respect to the Company’s Business;

(b) there are no Orders outstanding and Legal Proceedings or investigations
pending against the Company or, to the Knowledge of the Sellers and the Sellers’
Parent, threatened, relating to compliance with, or Liability under, any
applicable Environmental Law affecting the Company’s Business;

(c) there has been no release, threatened release, contamination or disposal of
Hazardous Substances at any property currently or formerly owned or operated by
the Company in connection with the Company’s Business (including in soils,
groundwater, surface water, buildings or other structures) or at any third-party
property, or from any waste generated by the Company or any legally responsible
predecessor corporation thereof, that has given or would, individually or in the
aggregate, reasonably be likely to give rise to any Liability under any
applicable Environmental Law for which the Company would incur or share
Liability; and

(d) except as set forth in Schedule 5.20(d), there are no Orders or similar
agreements with any Governmental Authority imposing restrictions on the
ownership, use or transfer of any Real Property relating to, or derived from,
any applicable Environmental Law, and there are no indemnification or other
agreements with any third party (other than ordinary course provisions in leases
of Real Property or in agreements for the acquisition or disposition of assets
or businesses) relating to any Liability or potential Liability under any
applicable Environmental Law.

5.21 Insurance. Schedule 5.21 sets forth all insurance policies or programs of
self insurance that are owned or held by the Company and or its Affiliates on
the date of this

 

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Agreement and that cover the Company, its assets, properties or personnel with
respect to risks arising in connection with the operation or conduct of the
Company’s Business (collectively, the “Insurance Policies”). The Insurance
Policies provide, in all material respects, adequate insurance coverage for the
operation of the Company’s Business as currently conducted. As of the date of
this Agreement, the Company has not received any written notice of any pending
or threatened cancellation or termination with respect to any Insurance Policy
owned by the Company. Insurance Policies that are maintained by the Sellers or
their Affiliates other than the Company for the benefit of the Company will be
discontinued as of the Closing.

5.22 Certain Business Practices. Since March 15, 2008, neither the Company nor,
to the Knowledge of the Sellers and the Sellers’ Parent, any of its directors,
officers, agents or employees (in their respective capacities as such) has for
or on behalf of the Company: (i) used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses relating to political activity;
(ii) made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns or violated
any provision of the Foreign Corrupt Practices Act of 1977, as amended; or
(iii) made any other payment in violation of applicable Law.

5.23 Company Concessions.

(a) The Company is the lawful, beneficial and exclusive holder of each Company
Concession.

(b)

(i) The Group A Concessions are validly issued, are in full force and effect and
are free and clear of all Liens or any restrictions which might, individually or
in the aggregate, materially impair the use of any of the Group A Concessions.

(ii) The Group B Concessions are validly issued, are in full force and effect
and, except as set forth on Schedule 5.23(b)(ii) are free and clear of all Liens
or any restrictions which might, individually or in the aggregate, materially
impair the use of any of the Group B Concessions.

(iii) The Company is not in breach of any obligations regarding the Group A
Concessions.

(iv) Except as set forth on Schedule 5.23(b)(iv), the Company is not in breach
of any obligations regarding the Group B Concessions.

(v) Except as set forth on Schedule 5.23(b)(v), other than Legal Proceedings or
application processes of general applicability, there is no Legal Proceeding
pending against the Company or, to the Knowledge of the Sellers and the Sellers’
Parent, threatened against the Company before MTC or OSIPTEL, that, if
determined as requested by the moving party or as indicated in any document
initiating the Legal Proceeding, would reasonably be expected to result in the
revocation, modification, restriction, cancellation, termination, suspension or
non-renewal of any Company Concession or the imposition of a material monetary
fine.

(vi) The Company is not a party to any contract, agreement or other arrangement
to assign or otherwise dispose of, or that would materially and adversely
affect, the Company’s ownership of, any Company Concession whether before or
after the Closing.

 

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(c) The Company does not hold any Company Concessions or Other Concessions
through a partnership, joint venture or other Person.

(d) Since March 15, 2008, except as set forth on Schedule 5.23(d), all
Regulatory Reports filed by the Company either were timely, complete and
accurate in all material respects when filed or, if modifications have been
requested by OSIPTEL, those modifications have been reflected in a subsequent
filing or amendment to the applicable Regulatory Report.

(e) The Company has made available to the Purchasers true, correct and complete
copies of each Company Concession, and, except for documents otherwise publicly
available, all material documents filed in and all material notices or material
orders issued in connection with, any pending Legal Proceeding with respect to
the Company’s rights and/or obligations under any of the Company Concessions.

(f) The Company has the right to use Other Concessions that are necessary to
operate the Company’s Business as conducted on the date of this Agreement.

5.24 Network Assets.

(a) The Network Assets are, in all material respects:

(i) in good operating condition and in a state of good maintenance and repair,
ordinary wear and tear excepted;

(ii) usable in the Ordinary Course of Business;

(iii) operating as intended in accordance with normal industry practice; and

(iv) except as set forth on Schedule 5.24(a), owned by the Company free and
clear of any Lien (other than Permitted Liens).

(b) The Sellers and the Sellers’ Parent have no Knowledge of any defect with
respect to any of the Network Assets, except for any defects that would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

(c) Schedule 5.24(c) identifies each site, whether rooftop, tower or other
structure, on which the Company has radio transmitters (each a “Transmitter
Site”). Except as set forth on Schedule 5.24(c), each Transmitter Site for which
the underlying real property is owned by the Company is free and clear of Liens
(other than Permitted Liens). For all Transmitter Sites for which the Company
does not own the underlying real property, the Company holds a valid leasehold,
sub leasehold estate or other right to use or occupy the space

 

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on which the radio transmitter is located (“Leasehold”). The Company is not in
breach of or in default under the documents relating to the Leaseholds and, to
the Knowledge of the Sellers and the Sellers’ Parent, no event has occurred
which, with due notice or lapse of time or both, would constitute a breach or
default by the Company under any such document or result in a termination
thereof or would cause or permit the acceleration or other changes of any right
or obligation or the loss of any material benefit thereunder. To the Knowledge
of the Sellers and the Sellers’ Parent, there are no material breaches of or
material defaults by any other party thereto under the documents relating to the
Leaseholds.

5.25 Data Privacy. The Company (a) is and since March 15, 2008 has been in
compliance in all material respects with all applicable Laws pertaining to
privacy, data protection, user data or Personal Data and with the Company
Privacy Policies; and (b) has implemented and maintained commercially reasonable
technical and physical safeguards in accordance with standard industry practice
to protect Personal Data against unauthorized access and use, except where the
failure to comply, implement or maintain would not, individually, or in the
aggregate, have a Material Adverse Effect. Since March 15, 2008, there has been
no loss, damage, or unauthorized access, disclosure, use or breach of security
of Personal Data maintained by or on behalf of the Company, except in each case
as would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Since March 15, 2008, no Person (including any
Governmental Authority) has made any written claim or commenced any Legal
Proceeding against the Company with respect to unauthorized access, disclosure
or use of Personal Data maintained by or on behalf of the Company, except as
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

5.26 Sufficiency of Assets.

(a) At the Closing, assuming that the Purchasers obtain rights from the third
parties identified on Schedule 8.1(e) and the Transferred Contracts, in each
case comparable to those available to the Company on the date of this Agreement,
the buildings, plants, structures, fixtures, machinery, equipment, vehicles and
other items of tangible personal property currently owned or leased by the
Company, together with all other properties, rights and assets of the Company,
including the rights of the Company under the Purchaser Transition Services
Agreement, and the licenses provided in Section 7.12, will in the aggregate be
sufficient for the continued conduct of the Company’s Business after the Closing
in substantially the same manner as conducted prior to the Closing and
constitute in all material respects all of the properties, rights and assets
necessary to conduct the business of the Company in the Ordinary Course of
Business as currently conducted.

(b) Except for inbound roaming by subscribers of Sellers’ Affiliates located
outside of Peru, all of the wireless telecommunications business of the Sellers
and their respective Affiliates in Peru is operated by the Company and is
included in the Business. Except for outbound roaming by subscribers of the
Company and for services provided by the Company to its Affiliates, the Company
does not operate any of its business or offer any services outside of Peru.

 

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5.27 Subscribers; Coverage; Spectrum. (a) On the Closing Date, the Company will
be in compliance with all its obligations under the 1900 MHz Concession
Agreement including:

(i) the district coverage requirements established in clause 8.3 of the 1900 MHz
Concession Agreement and Annex 3 of the Resolución Directoral
No. 108-2012-MTC/27 issued by the MTC;

(ii) the lines in service coverage requirements established in clause 8.3 of the
1900 MHz Concession Agreement and Annex 3 of the Resolución Directoral
No. 108-2012-MTC/27 issued by the MTC; and

(iii) the spectrum use goals established in clause 8.3 of the 1900 MHz
Concession Agreement and Annex 2 of the Resolución Directoral
No. 017-2009-MTC/27 issued by the MTC.

(b) The spectrum use goal (meta de uso) applicable to the Company as of the date
of this Agreement is 10 MHz (applicable to the third year). The final use goal
of 35 MHz (applicable to the fifth year) must be met by the Company by no later
than May 4, 2014.

5.28 No Other Representations or Warranties; Schedules. Except for the
representations and warranties contained in this Article V (as modified by the
Schedules to this Agreement, none of the Sellers, the Sellers’ Parent or any
other Person makes any other representation or warranty with respect the
Company, the Sellers, the Sellers’ Parent or the transactions contemplated by
this Agreement, and the Sellers disclaim any other representations or
warranties, whether made by the Sellers, the Sellers’ Parent or any of their
respective Affiliates, officers, directors, employees, agents or
representatives. The disclosure of any matter or item in the Schedules to this
Agreement shall not be deemed to constitute an acknowledgment that any such
matter is required to be disclosed.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF

THE PURCHASERS

The Purchasers represent and warrant, jointly and severally, to the Sellers and
the Sellers’ Parent that the statements contained in this Article VI are true
and correct as of the date of this Agreement and will be true and correct as of
the Closing Date (except for representations and warranties that expressly
relate to a specified date, the inaccuracy or breach of which will be determined
with reference to such specified date):

6.1 Corporate Existence; Authority. Each Purchaser is a corporation duly
organized and validly existing under the Laws of Chile and has all requisite
corporate power and authority to own, lease and operate its assets and carry on
its business as currently conducted. Each of the Purchasers has full corporate
power and authority to execute and deliver this Agreement and each other
agreement, document, or instrument or certificate contemplated by this Agreement
or to be executed by either Purchaser in connection with the consummation of the
transactions contemplated by this Agreement (the “Purchaser Documents”), and to
consummate the transactions contemplated hereby and thereby. This Agreement has
been, and each Purchaser Document will be, at or prior to the Closing, duly
authorized, executed and delivered by each Purchaser, as applicable, and no
additional proceedings on the part of such

 

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Purchaser are necessary to authorize the consummation of this Agreement or any
Purchaser Document or the transactions contemplated hereby or thereby. This
Agreement constitutes, and each Purchaser Document when so executed and
delivered will constitute, a valid and binding agreement of the Purchasers, as
applicable, enforceable in accordance with its terms, subject to General
Enforceability Exceptions.

6.2 Conflicts; Consents of Third Parties.

(a) Except as set forth on Schedule 6.2(a), none of the execution and delivery
by the Purchasers of this Agreement or the Purchaser Documents, the consummation
of the transactions contemplated hereby or thereby, or compliance by the
Purchasers with any of the provisions hereof or thereof will conflict with, or
result in any violation of or default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination or cancellation under,
any provision of (i) the certificate of incorporation or by-laws of either
Purchaser, (ii) any Contract, Concession or Permit to which either Purchaser is
a party or by which any of the properties or assets of either Purchaser are
bound, (iii) any Order of any Governmental Authority applicable to a Purchaser
or by which any of the properties or assets of a Purchaser are bound, or
(iv) any applicable Law.

(b) Except as set forth on Schedule 6.2(b), no consent, waiver, approval, Order,
Concession, Permit or authorization of, or declaration or filing with, or
notification to, any Person or Governmental Authority is required on the part of
the Purchasers in connection with the execution and delivery of this Agreement
or the Purchaser Documents or the compliance by the Purchasers with any of the
provisions hereof or thereof.

6.3 Litigation. Except as set forth on Schedule 6.3, there are no Legal
Proceedings pending or, to the Knowledge of the Purchasers, threatened that
reasonably may be expected to result in an Order that would prohibit or restrain
the ability of the Purchasers to enter into this Agreement or consummate the
transactions contemplated hereby.

6.4 Investment Intention. Each Purchaser is acquiring the Shares for its own
account, for investment purposes only and not with a view to the distribution
(as such term is used in Section 2(11) of the Securities Act of 1933, as amended
(the “Securities Act”)) thereof. The Purchasers understand that the Shares have
not been registered under the Securities Act or any other applicable U.S. or
foreign securities Laws and cannot be sold unless subsequently registered under
the Securities Act or any other applicable U.S. or foreign securities Laws or an
exemption from such registration is available.

6.5 Financial Advisors. Except as set forth on Schedule 6.5, no Person has
acted, directly or indirectly, as a broker, finder or financial advisor for the
Purchasers in connection with the transactions contemplated by this Agreement
and no Person is entitled to any fee or commission or like payment from the
Sellers or the Sellers’ Parent in respect thereof.

6.6 Financing. The Purchasers (a) have, and at the Closing will have, the
resources and capabilities (financial or otherwise) to perform its obligations
hereunder, and (b) have not incurred any obligation, commitment, restriction or
liability of any kind, which would impair or adversely affect such resources and
capabilities.

 

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6.7 Condition of the Business. Except for the representations and warranties of
Article V (as modified by the applicable Schedules to this Agreement), the
assets and the Company’s Business are being transferred on a “where is” and, as
to condition, “as is” basis. Any claims the Purchasers may have for breach of
representation or warranty shall be based solely on the representations and
warranties of the Sellers and the Sellers’ Parent set forth in Article V (as
modified by the applicable Schedules to this Agreement). Without limiting the
scope of the representations and warranties given by the Sellers and the
Sellers’ Parent in Article V, the Purchasers acknowledge that they have
conducted to their satisfaction, their own independent investigation of the
condition, operations and business of the Company and, in making their
determination to proceed with the transactions contemplated by this Agreement,
the Purchasers have relied on the results of their own independent
investigation.

ARTICLE VII

COVENANTS

7.1 Access to Information. From the date of this Agreement until the Closing
Date or earlier termination of this Agreement. the Purchasers shall be entitled,
through their respective officers, employees and representatives (including
their respective legal advisors and accountants), to make such investigation of
the properties, businesses and operations of the Company and such examination of
the books and records of the Company as they reasonably request and to make
extracts and copies of such books and records. Any such investigation or
examination, and all communications with the Company and its representatives,
shall be coordinated through representatives designated by the Sellers’ Parent
unless otherwise agreed upon by the Parties. Any such investigation and
examination shall be conducted during regular business hours and shall be
subject to restrictions under applicable Law. The Sellers’ Parent shall cause
the officers, employees, consultants, agents, accountants, attorneys and other
representatives of the Company to cooperate with the reasonable requests of the
Purchasers and their respective representatives in connection with such
investigation and examination, and the Purchasers and their respective
representatives shall cooperate with the Company and its representatives and
shall use their reasonable efforts to minimize any disruption to the Company’s
Business. No such investigation or examination shall be permitted to the extent
that it would require the Company to disclose information subject to
attorney-client privilege or conflict with any confidentiality obligations to
which the Company is bound. Prior to the Closing, without the prior written
consent of the Sellers’ Parent, which may be withheld for any reason, the
Purchasers shall not contact any suppliers to, or customers of, the Company with
respect to the transactions contemplated hereby.

7.2 Conduct of the Business Pending the Closing.

(a) From and including the date of this Agreement until the Closing Date or
earlier termination of this Agreement, except (i) as set forth on Schedule 7.2,
(ii) to the extent required by applicable Law or this Agreement (including
taking all necessary action to allow for the issuance of Additional Shares
pursuant to Section 7.18) or (iii) with the prior written consent of the
Purchasers, the Sellers and the Sellers’ Parent shall, subject to Section 7.17,
cause the Company to:

(i) conduct the Company’s Business only in the Ordinary Course of Business;

 

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(ii) use commercially reasonable efforts to preserve the present business
operations, organization and goodwill of the Company (including relationships
with suppliers, customers, licensors, licensees, and other business
relationships and, in the Ordinary Course of Business, to keep available the
services of the Company’s employees);

(iii) maintain and operate the Network Assets in the same manner in all material
respects as the network is maintained and operated on the date hereof, including
renewal, preservation, and acquisition of Other Concessions and the disposition
or surrender of Other Concessions that are used for radio backhaul as
appropriate to configure Network Assets in the Ordinary Course of Business; and

(iv) use commercially reasonable efforts to comply with applicable Law and the
Company Concessions and preserve the Company Concessions and renew Company
Concessions that are expiring.

(b) From the date of this Agreement until the Closing Date or earlier
termination of this Agreement, except (i) as set forth on Schedule 7.2, (ii) to
the extent required by applicable Law or this Agreement or (iii) with the prior
written consent of the Purchasers, the Sellers shall, subject to Section 7.17,
not permit the Company to do any of the following:

(i) declare, set aside, make or pay any dividend or other distribution in
respect of any Shares or repurchase, redeem or otherwise acquire or retire any
outstanding Shares or other securities of, or other ownership interests in, the
Company;

(ii) transfer, issue, sell or dispose of any Shares or other securities of the
Company or grant options, warrants, calls or other rights to purchase or
otherwise acquire any Shares or other securities of the Company;

(iii) effect any recapitalization, reclassification or like change in its
capitalization;

(iv) amend its certificate of incorporation or by-laws or other organizational
documents;

(v) (A) increase the compensation of any of its present or former directors,
officers or employees, (B) grant any bonus, benefit or other direct or indirect
compensation to any of its present or former directors, officers or employees,
(C) increase the coverage or benefits available under any (or create any new)
severance pay, termination pay, vacation pay, company awards, salary
continuation for disability, sick leave, deferred compensation, bonus or other
incentive compensation, insurance, pension or other employee benefit plan or
arrangement made to, for, or with any of its present or former directors,
officers or employees or otherwise modify or amend or terminate any such plan or
arrangement or (D) enter into any employment, deferred compensation, severance,
consulting, non-competition or similar agreement (or amend any such

 

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agreement) involving any of its present or former directors, officers or
employees, except, in each case, to the extent required by applicable Law or by
the terms of any Employee Plan in effect on the date of this Agreement;

(vi) subject any of its (A) material properties or assets (whether tangible or
intangible) to a Lien, except for Permitted Liens (other than Liens securing
Company Debt) or (B) other assets to Liens except for Liens incurred in the
Ordinary Course of Business not securing Company Debt;

(vii) (A) acquire any material properties, rights, spectrum, or other assets, in
each case other than any Network Assets in the Ordinary Course of Business, or
(B) sell, assign, license, transfer, convey, lease, allow the expiration or
lapse of, or otherwise dispose of any of its properties, rights, spectrum,
Company Concessions or assets (except (1) sales of inventory to customers in the
Ordinary Course of Business or (2) sales of obsolete or worthless assets or
inventory which shall not, individually or in the aggregate, exceed $1,000,000);

(viii) other than in the Ordinary Course of Business, cancel or compromise any
material debt or claim or waive or release any material right of the Company;

(ix) enter into any merger, consolidation or similar transaction with any other
Person or acquire the securities or a material portion of the assets of any
other Person;

(x) (A) make or rescind any election relating to Taxes, (B) settle or compromise
any claim, action, suit, litigation, proceeding, arbitration, investigation or
audit controversy that is material relating to Taxes, provided that the
Purchasers’ consent shall not be unreasonably conditioned, withheld or delayed
with respect to any of the items referred to in clause (B) of this
Section 7.2(b)(x), (C) consent to any extension or waiver of the limitations
period applicable to any Tax claim or assessment relating to the Company or,
(D) except as required by a change in applicable Law or Peruvian GAAP, make any
material change to any of its methods of accounting or methods of reporting
income or deductions for Tax or accounting practice or policy from those
employed in the preparation of its most recent Tax Return;

(xi) enter into, terminate, extend, modify or amend any Material Contract,
except in the Ordinary Course of Business;

(xii) enter into, terminate, extend, modify or amend any Related Party
Transaction;

(xiii) make any loans, advances or capital contributions to, or investments in,
any other Person;

(xiv) settle or compromise any Legal Proceeding, except in the Ordinary Course
of Business if the cash payment(s) for settlement or compromise of any Legal
Proceeding do not exceed $3,000,000 and are paid prior to the Closing;

 

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(xv) change any of its accounting principles or practices, except as required by
a change in Peruvian GAAP after the date of this Agreement;

(xvi) enter into any business outside of the Company’s Business;

(xvii) fail to maintain the Insurance Policies in full force and effect; or

(xviii) incur any deferred Liabilities, prepaid assets or deferred assets
outside the Ordinary Course of Business;

(xix) enter into any Contract, or otherwise agree or commit, to do anything
prohibited by this Section 7.2.

7.3 Consents. Subject to Schedule 1.1(a), from the date of this Agreement until
the Closing Date or earlier termination of this Agreement, upon the terms and
subject to the conditions set forth in this Agreement, each of the Parties shall
use (and the Sellers and the Sellers’ Parent shall cause the Company to use)
commercially reasonable efforts, and cooperate with the Company and each of the
other Parties hereto, to obtain at the earliest practicable date all consents
and approvals required to consummate the transactions contemplated by this
Agreement. Each of the Purchasers shall and shall cause the Company, to
expressly assume liability in respect of any and all of the Contracts set forth
on Schedules 4.2(h) and 8.1(e) for any periods on and after the Closing. The
Parties shall pay the respective amounts described in Schedule 1.1(a).

7.4 Regulatory Approvals.

(a) From the date of this Agreement until the Closing Date or earlier
termination of this Agreement, upon the terms and subject to the conditions set
forth in this Agreement, each of the Parties shall (and the Sellers and the
Sellers’ Parent shall cause the Company to), (i) make or cause to be made all
filings or applications required of each of them or their respective Affiliates
to obtain any necessary Governmental Approvals and (ii) cooperate with each
other in connection with any such filing or applications (including, to the
extent permitted by applicable Law, providing copies of all such documents to
the non-filing or non-applying Parties prior to filing or submitting an
application and considering all reasonable additions, deletions or changes
suggested in connection therewith) and in connection with resolving any
investigation or other inquiry of any relevant Peruvian Governmental Authority
with respect to the transactions contemplated by this Agreement. Each Party
shall promptly inform the other Parties of any material oral communication with,
and provide copies of material written communications with, any Peruvian
Governmental Authority regarding any such investigation or inquiry.

(b) Each of the Purchasers, the Sellers and the Sellers’ Parent shall use its
commercially reasonable efforts to take such action as may be required to obtain
any necessary Governmental Approvals, as promptly as reasonably practicable
after the execution of this Agreement and to avoid the entry of, or to effect
the dissolution of, any decree, order, judgment, injunction, temporary
restraining order or other order in any suit or preceding, that would otherwise
have the effect of preventing or materially delaying the consummation of the
transactions contemplated by this Agreement.

 

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7.5 Further Assurances. From the date of this Agreement until the Closing Date
or earlier termination of this Agreement, subject to and without modifying
Section 7.3, Section 7.4 or Section 7.19, each of the Purchasers shall, and the
Sellers and the Sellers’ Parent shall cause the Company and its Affiliates to,
use its commercially reasonable efforts to (a) take all actions necessary or
appropriate to consummate the transactions contemplated by this Agreement and
(b) cause the fulfillment at the earliest practicable date of all of the
conditions to their respective obligations to consummate the transactions
contemplated by this Agreement.

7.6 Confidentiality.

(a) The Purchasers acknowledge that the information provided to them in
connection with this Agreement and the transactions contemplated hereby is
subject to the terms of the confidentiality agreement between Entel and the
Sellers’ Parent dated October 23, 2012 (the “Confidentiality Agreement”), the
terms of which are incorporated herein by reference. Notwithstanding anything to
the contrary in the Confidentiality Agreement, the Confidentiality Agreement
shall terminate effective upon, and only upon, the Closing Date.

(b) From the Closing Date until the second anniversary of the Closing, the
Sellers and the Sellers’ Parent shall, and shall cause their respective
controlled Affiliates to, hold, and shall use its commercially reasonable
efforts to cause its or their respective representatives to hold, in confidence
any and all information, whether written or oral, concerning the Company, except
to the extent that such information (a) is generally available to and known by
the public through no fault of any Seller, any of the Sellers’ respective
Affiliates or their respective representatives; or (b) is lawfully acquired by
the Sellers, any of their respective Affiliates or their respective
representatives from and after the Closing from sources which are not prohibited
from disclosing such information by a legal, contractual or fiduciary
obligation. For a period of two years after the Closing, if the Sellers’ Parent,
any Seller or any of their respective Affiliates or their respective
Representatives are compelled to disclose any information by judicial or
administrative process or by other requirements of Law, the Sellers’ Parent
and/or such Seller shall (i) promptly notify the Purchasers in writing,
(ii) disclose only that portion of such information which reasonably must be
disclosed, and, (iii) at the Purchasers’ expense, use commercially reasonable
efforts to obtain an appropriate protective order or other reasonable assurance
that confidential treatment will be accorded such information.

7.7 Publicity.

(a) Promptly after the execution and delivery of this Agreement, the Sellers’
Parent and Entel will issue an initial press release in the form agreed upon by
the Sellers’ Parent and Entel.

(b) The Sellers’ Parent may at any time take any action or make a public
statement or filing required by the United States Securities and Exchange
Commission or the NASDAQ. Entel may at any time take any action or make a public
statement or filing required by the Chilean Securities and Insurance Commission
or the Bolsa de Santiago de Chile. If any action is being taken under this
Section 7.7(b), any Party whose Affiliate is taking action will, to the extent
practicable under the circumstances, provide advance notice to and to consult
with the other Parties regarding the action to be taken.

 

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(c) Except as stated in (a) and (b) above, or as may be required by applicable
Law or legal process, no Party will publish any press release or release any
similar public statement regarding the terms of this Agreement without obtaining
the prior written approval of the other Parties; except that, a Party required
by applicable Law to make a public statement or filing shall use its
commercially reasonable efforts consistent with applicable Law to consult with
the other Parties with respect to the text thereof.

7.8 Continuing Employees.

(a) The Purchasers shall continue the employment of the employees of the Company
set forth on Schedule 7.8 (each, an “Applicable Employee”) at the salary and the
position agreed in writing with the Purchasers.

(b) On and after the Closing Date, the Purchasers shall cause the Company to
pay, and the Company shall pay, (i) subject to Schedule 1.1(a), the retention
amounts payable to the Applicable Employees, in each case as set forth on Annex
A to Schedule 7.2, and (ii) subject to Schedule 1.1(a), the severance amounts
set forth on Annex A to Schedule 7.2 (the “Enhanced Severance Obligations”) that
are due to an Applicable Employee that is terminated by the Company on or after
the Closing Date.

7.9 Records. With respect to the financial books and records of the Company
relating to matters on or prior to the Closing Date: (a) for a period of seven
years after the Closing Date, the Purchasers shall not cause or permit their
destruction or disposal without first offering to surrender them to the Sellers;
and (b) where there is a legitimate purpose, including any Legal Proceeding
involving either of the Sellers or the Sellers’ Parent or a claim or dispute
relating to this Agreement, the Purchasers shall allow the Sellers and their
respective representatives access to such books and records during regular
business hours.

7.10 Trademark License Agreement.

(a) Subject to Schedule 1.1(a), from the date of this Agreement until the
Closing Date or earlier termination of this Agreement, the Sellers and the
Sellers’ Parent agree to use their commercially reasonable efforts to, and at
the request of Sellers, each of the Purchasers agrees to cooperate to, obtain
any consent required from the Trademark Licensor (such consent the “Trademark
Licensor Consent”), in order for the Company to use in Peru, on a non-exclusive,
royalty free basis, any Trademark (including domain names) owned by the
Trademark Licensor and identified on Schedule 5.12 (collectively, the “Trademark
Licensor’s Brands”) in substantially the same manner as the Trademark Licensor’s
Brands have been used by the Company as of the Closing Date for a period of up
to 18 months following the Closing (the “Target Sublicense End Date”), but no
less than 12 months following the Closing Date (the “Minimum Sublicense End
Date”). For clarity, the Trademark Licensor Consent will include the right for
the Company to (i) continue to manufacture, distribute, dispose of, or use the
Company’s inventory of Wireless Devices and Wireless Accessories (as each such
term is defined in the Trademark License Agreement) or promotional or
advertising materials relating thereto, in each case, that are branded with a
Trademark Licensor’s Brand, (ii) create new promotional or advertising material
branded with the Trademark Licensor’s Brand and (iii) conduct Licensed
Activities and Licensed Services (as such terms are defined in the Trademark
License Agreement) under the Trademark Licensor’s Brands, in each case of
(i)-(iii) up until the Target Sublicense End Date.

 

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(b) The Sellers’ Parent hereby grants the Company a non-exclusive, royalty free
license to use any Trademark (including domain names) owned by the Sellers’
Parent and identified on Schedule 5.12 (collectively, the “Sellers’ Parent
Brands”) in substantially the same manner as the Sellers’ Parent Brands have
been used by the Company as of the Closing Date up until the Target Sublicense
End Date but no less than the Minimum Sublicense End Date.

7.11 Websites. At the Purchasers’ request, for 24 months after the Closing Date,
Sellers shall display on their websites, in all places where the Business was
previously discussed or displayed, a mutually-agreed statement about Purchasers’
new ownership of the Business and a link to any website designated by the
Purchasers.

7.12 Intellectual Property License.

(a) Sellers and Sellers’ Parent, on behalf of themselves and their subsidiaries,
grant to the Company, effective as of the Closing Date, a non-exclusive,
non-sublicensable (except as provided herein), non-assignable (except as
provided in Section 7.12(c)), perpetual, irrevocable, royalty-free, fully
paid-up, worldwide license, in connection with the current and future operation
of the Business in Peru, to use and exercise all rights under any Intellectual
Property (other than Trademarks), if any, that is owned by Sellers, Sellers’
Parent or any of their subsidiaries as of the Closing Date and that was used by
the Business as of the Closing Date, including those patents set forth on
Schedule 5.12 and the know-how related to push-to-talk 3G WCDMA products (the
“Seller Licensed IP”). For clarity, this license covers any Seller Licensed IP
in existence as of the Closing Date, but does not cover any Intellectual
Property that arises, is created or acquired after the Closing Date. The Company
may sublicense this license solely (x) to its vendors, consultants, contractors
and suppliers, in connection with their providing services to the Company;
(y) to its distributors, customers and end-users, in connection with the
distribution, licensing, offering and sale of the current and future products of
the Business.

(b) The Company grants to the Sellers and Sellers’ Parent and their respective
current Affiliates, effective as of the Closing Date, a non-exclusive,
non-sublicensable (except as provided herein), non-assignable (except as
provided in Section 7.12(c)), perpetual, irrevocable, royalty-free, fully
paid-up, worldwide license, in connection with the current and future operation
of their businesses, to use and exercise all rights under any Intellectual
Property (other than Trademarks), if any, that is owned by the Company as of the
Closing Date and that was used by the Sellers or Sellers’ Parent or any of their
Affiliates as of the Closing Date (the “Company Licensed IP”). For clarity, this
license covers any Company Licensed IP in existence as of the Closing Date, but
does not cover any Intellectual Property that arises, is created or acquired
after the Closing Date. Sellers, Sellers’ Parent and their Affiliates may
sublicense this license solely (x) to their vendors, consultants, contractors
and suppliers, in connection with their providing services to the Sellers and
Sellers’ Parent; (y) to their distributors, customers and end-users, in
connection with the distribution, licensing, offering and sale of the current
and future products of the Sellers and Sellers’ Parent.

 

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(c) The Sellers, the Sellers’ Parent, their current Affiliates and the Company
may, as the case may be, assign the licenses set forth in Section 7.12(a) and
7.12(b) to any Affiliate, or in connection with a merger, reorganization, or
sale of all, or substantially all, of any of their businesses to which this
license relates, so long as: (x) the assignee provides the assignor with prompt
written notice of such transaction; and (y) the assignment shall be expressly
limited to the business to which this license relates (and shall not be deemed
to extend to other businesses or affiliates of a successor); provided that no
such assignment pursuant to this Section 7.12(c) shall relieve the parties of
their obligations hereunder.

(d) Each party acknowledges and agrees that the other party has no obligations
under this Agreement with respect to delivery, training, registration,
maintenance, policing, notification of infringements or renewal with respect to
any Intellectual Property licensed under this Section 7.12.

7.13 Tax Matters.

(a) Seller Returns. The Sellers shall timely prepare and file (or cause timely
preparation and filing) with the appropriate Taxing Authority all Tax Returns
with respect to the Company relating to Pre-Closing Tax Periods that are filed
after the Closing Date (“Seller Returns”), and shall timely pay (or cause to be
timely paid) all Taxes due with respect to Seller Returns, to the extent not
already taken into account in determining Net Working Capital (as finally
determined pursuant to this Agreement) or otherwise as a Net Purchase Price
adjustment hereunder. The Sellers shall make available to the Purchasers any
Seller Returns and related workpapers for the Purchasers’ review and comment at
least 30 Business Days prior to the respective due dates of such Seller Returns
(or such shorter period as the circumstances require, but only in the case of a
non-income Tax Return), and the Purchasers shall provide the Sellers with the
Purchasers’ comments no later than 15 Business Days (or such shorter period as
the circumstances require, but only in the case of a non-income Tax Return)
before the respective due dates of such Seller Returns. The Sellers shall
consider in good faith any revisions to the Seller Returns that are timely and
reasonably requested by the Purchasers, except if any such revisions would
reasonably be expected to result in a material adverse effect to the Sellers.
The Sellers and the Purchasers agree to consult and resolve in good faith any
issue arising as a result of the Purchasers’ review of such Seller Returns. No
Seller Returns shall be filed without the prior written consent of the
Purchasers, which consent shall not be unreasonably withheld or delayed.

(b) Purchaser Returns. The Purchasers shall timely prepare and file (or cause
timely preparation and filing) with the appropriate Taxing Authority all Tax
Returns with respect to the Company relating to taxable periods that end after
the Closing Date (“Purchaser Returns”), and shall timely pay (or cause to be
timely paid) all Taxes due with respect to Purchaser Returns. With respect to
any Purchaser Return relating to a Straddle Period (a “Straddle Period Return”),
the Sellers shall reimburse the Purchasers (in accordance with the provisions
hereof) for any amount owed by the Sellers pursuant to Section 9.1 (and the
apportionment provisions of Section 7.13(c)) with respect to the Taxes paid with
respect to any such Straddle Period, to the extent not already taken into
account in determining Net Working Capital (as finally determined pursuant to
this Agreement) or otherwise as a Net Purchase Price adjustment hereunder. The
Purchasers shall make available to the Sellers any Straddle Period

 

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Returns and related workpapers for the Sellers’ review and comment at least 30
Business Days (or such shorter period as the circumstances require, but only in
the case of a non-income Tax Return) prior to the respective due dates of such
Straddle Period Returns, and the Sellers shall provide the Purchasers with the
Sellers’ comments no later than 15 Business Days (or such shorter period as the
circumstances require, but only in the case of a non-income Tax Return) before
the respective due dates of such Straddle Period Returns. The Purchasers shall
consider in good faith any revisions to the Straddle Period Returns that are
timely and reasonably requested by the Sellers, except if any such revisions
would reasonably be expected to result in a material adverse effect to the
Purchasers. The Sellers and the Purchasers agree to consult and resolve in good
faith any issue arising as a result of the Sellers’ review of such Straddle
Period Returns. No Straddle Period Return shall be filed without the prior
written consent of the Sellers, which consent shall not be unreasonably withheld
or delayed.

(c) Apportionment. For purposes of this Agreement, in the case of any Straddle
Period, the amount of Taxes of the Company allocable to the portion of the
Straddle Period ending on the Closing Date (“Pre-Closing Straddle Period Taxes”)
shall be deemed to be: (i) in the case of Taxes imposed on a periodic basis
(such as real or personal property Taxes), the amount of such Taxes for the
entire period (or, in the case of such Taxes determined on an arrears basis, the
amount of such Taxes for the immediately preceding period) multiplied by a
fraction, the numerator of which is the number of calendar days in the Straddle
Period ending on and including the Closing Date and the denominator of which is
the number of calendar days in the entire relevant Straddle Period and (ii) in
the case of Taxes not described in clause (i) above (such as franchise Taxes,
Taxes that are based upon or related to income or receipts, based upon occupancy
or imposed in connection with any sale or other transfer or assignment of
property (real or personal, tangible or intangible)), the amount of any such
Pre-Closing Straddle Period Taxes shall be determined as if such taxable period
ended as of the close of business on the Closing Date.

(d) Refunds and Elections.

(i) The Sellers shall be entitled to any Tax refunds actually received,
including interest actually paid by the relevant Taxing Authority therewith, in
respect of Pre-Closing Taxes, less any costs or expenses actually incurred by
Purchasers (including Taxes) in respect of the receipt of such refunds. In the
event that the Company is entitled to receive any such Tax refund described in
the preceding sentence, the Purchasers shall elect, and shall cause the Company
to elect, under applicable provisions of the Peruvian Tax code, to actually
receive a payment of such refund and shall not elect to receive such Tax refund
in the form of a credit against future Taxes. The Purchasers shall forward to
the Seller Beneficiaries or reimburse the Seller Beneficiaries for any such
Pre-Closing Tax refunds received within 30 Business Days of such receipt.
Notwithstanding the foregoing three sentences, any such refunds, shall be for
the account of Purchasers to the extent such refunds are attributable
(determined on a marginal basis) to the carryback from a Post-Closing Tax Period
of items of loss, deduction or credit, or other Tax items, of the Company or any
of its Affiliates, including Purchasers. The Purchasers shall be entitled to any
Tax refunds of the Company attributable to any Post-Closing Tax Period. Any
refunds actually received with respect to a Straddle Period shall be apportioned
between the Sellers and the Purchasers pursuant to the principles of
Section 7.13(c).

(ii) None of the Purchasers shall make, or cause to be made, an election under
Section 338(g) of the Code for the Company without the written consent of the
Sellers or the Sellers’ Parent.

 

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(e) Cooperation.

(i) The Sellers and the Purchasers shall cooperate reasonably and promptly in
(A) preparing and filing all Tax Returns with respect to the Company, including
information required with respect to the Company in the Tax Returns and
financial statements of the Sellers and the Sellers’ Parent, and including
giving each other reasonable access to their employees for the purpose of making
inquiries in connection with the preparation of Tax Returns and maintaining and
making available to each other all records, personnel or powers of attorney
reasonably necessary in connection with Taxes of the Company, (B) giving the
other Party timely notice (to the extent required hereunder) and responding to
any inquiries, audits or similar proceedings by any Taxing Authority relating to
Taxes of the Company (each of the items referred to in clause (B) of this
Section 7.13(e)(i), a “Tax Matter”), and (C) resolving all disputes and audits
with Taxing Authorities relating to Taxes of the Company, including any dispute
or audit of the Sellers’ and the Sellers’ Parent’s Tax Returns with respect to
the Company by any Taxing Authority. The failure to give timely notice of a Tax
Matter shall not relieve the Indemnifying Party of its indemnification
obligations hereunder except to the extent such failure has materially
prejudiced the Indemnifying Party. The Party requesting cooperation under this
Section 7.13(e)(i) shall bear all costs and expenses attributable to such
cooperation.

(ii) The Sellers or the Sellers’ Parent shall have the responsibility for, and
the right to control, at the Sellers’ or the Sellers’ Parent’s sole expense, any
Tax Matter relating to a Pre-Closing Tax Period; provided that the Purchasers
and counsel of their own choosing, shall have the right to participate fully, at
their own expense, in all aspects of the prosecution or defense of such Tax
Matter if the Purchasers reasonably determine that such Tax Matter could have a
material adverse impact on the Tax attributes of the Company created or
generated in any Post-Closing Tax Period. The Sellers and the Purchasers shall
jointly control and participate in all proceedings taken in connection with any
Tax Matter relating to Taxes of the Company for a Straddle Period, and shall
bear their own respective costs and expenses. The Purchasers shall control all
proceedings with respect to any Tax Matter relating to a Post-Closing Tax
Period; provided that the Sellers or the Sellers’ Parent shall have the right to
participate fully, at their own expense, in the settlement of such a Tax Matter
if and to the extent that such matter is reasonably likely to give rise to a
claim for indemnification under this Agreement or could affect the Tax
attributes of the Company for any Pre-Closing Tax Period. For the avoidance of
doubt, (1) the Purchasers shall be entitled to be timely informed in writing by
the Sellers of any Tax Matter relating to a Pre-Closing Tax Period (it being
understood that such writing shall set forth in reasonable detail the amount and
the nature of such matter as it pertains solely to the Company as well as the
core assertions of the Taxing Authority underlying such matter as they pertain
solely to the Company) and the developments with respect to such matter at any
administrative meeting, conference, hearing or other proceeding as they pertain
solely to the Company;

 

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and (2) the Sellers shall be entitled to be timely informed in writing by the
Purchasers of any Tax Matter relating to a Post-Closing Tax Period to the extent
such matter may give rise to a claim for indemnification under this Agreement
(it being understood that such writing shall set forth in reasonable detail the
amount and the nature of such matter as it pertains solely to the Company as
well as the core assertions of the Taxing Authority underlying such matter as
they pertain solely to the Company) and the developments with respect to such
matter at any administrative meeting, conference, hearing or other proceeding as
they pertain solely to the Company. For the avoidance of doubt, nothing in this
Section 7.13(e)(ii) shall in any way restrict the Company’s or the Sellers’ use
of Tax attributes of the Company prior to the Closing Date.

(iii) Notwithstanding Section 7.9, the Purchasers, and the Sellers and the
Sellers’ Parent shall, and the Purchasers shall cause the Company to (A) retain
all Tax-related books, records and documents relating to any taxable period
beginning before the Closing Date until 60 days after the expiration of the
statute of limitations (and any extensions thereof) of the respective taxable
periods, and to abide by all record retention agreements entered into with any
Taxing Authority and (B) give the other Party reasonable written notice prior to
transferring, destroying or discarding any such books, records and documents,
and, if the other Party so requests, the Purchasers, the Company, or the Sellers
or the Sellers’ Parent, as the case may be, shall allow the other Party to take
possession of such books, records and documents at the sole expense of the
requesting party. The Purchasers, and the Sellers and the Sellers’ Parent shall,
upon request of the other Party, use their commercially reasonable efforts to
obtain or provide any certificate or other document from any Taxing Authority or
any other Person, at the sole expense of the requesting Party, as may be
necessary to mitigate, reduce or eliminate any Tax that could be imposed in
connection with the transitions contemplated by this Agreement.

(iv) The Purchasers shall use commercially reasonable efforts to provide
promptly to the Sellers, at the Sellers’ sole cost and expense, the information
reasonably requested by the Sellers that is necessary for the Sellers’s Parent
to determine its pro-rata share of the Company’s Subpart F income under
Section 951(a)(2) of the Code for any taxable year of the Company for which the
Sellers’ Parent has a U.S. federal income tax reporting obligation.

(f) Amendments. Unless required by applicable Law, none of the Purchasers, the
Company or any of the respective Affiliates of the foregoing shall amend or
otherwise modify any Tax Return or Tax election of the Company in respect of a
Pre-Closing Tax Period or Straddle Period without the prior written consent of
the Sellers or the Sellers’ Parent, which consent may not be unreasonably
conditioned, withheld or delayed.

(g) Purchaser Tax Act. Notwithstanding anything in Section 9.1(a), the Sellers
or the Sellers’ Parent shall not have any indemnification obligation to the
Purchasers under this Agreement for any Taxes or Losses resulting directly from
a Purchaser Tax Act.

(h) Transfer Taxes. All transfer, documentary, sales, use, stamp, registration
and other such Taxes, and all conveyance fees, recording charges and other fees
and charges (including any penalties and interest) incurred in connection with
the consummation of the

 

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transactions contemplated by this Agreement shall be paid one-half by the
Purchasers and one-half by the Sellers. The Sellers shall prepare and timely
file all Tax Returns required to be filed in respect of Transfer Taxes
(including, without limitation, all notices required to be given with respect to
bulk sales taxes); provided that the Purchasers shall timely prepare any such
Tax Returns that are the primary responsibility of the Purchasers under
applicable Law. The Purchasers’ preparation of any such Tax Returns shall be
subject to the Sellers’ approval, which approval shall not be unreasonably
withheld.

7.14 Notice of Certain Events. From the date hereof until the Closing, each
Party shall promptly notify the other Parties of (i) any fact, circumstance,
event or action the existence, occurrence or taking of which has resulted in, or
would reasonably be expected to result in, the failure of any of the conditions
set forth in Section 8.1 or Section 8.2 as applicable to be satisfied; (ii) any
notice or other communication from any Person alleging that the consent of such
Person is or may be required in connection with the transactions contemplated by
this Agreement; (iii) any notice or other communication from any Governmental
Authority in connection with the transactions contemplated by this Agreement;
and (iv) any Legal Proceedings commenced relating to or involving or otherwise
materially affecting the consummation of the transactions contemplated by this
Agreement. Receipt of information pursuant to this Section 7.14 shall not
operate as a waiver or otherwise affect any representation, warranty or
agreement given or made by such Party in this Agreement. No party shall be
required to take any action that would jeopardize its attorney-client privilege.

7.15 Non-Competition; Non-Solicitation.

(a) During the Restricted Period, each Seller and the Sellers’ Parent shall not,
and shall not permit any of its Affiliates to, directly or indirectly,
(i) engage in or assist others in operating facilities or a network for wireless
telecommunication in Peru; (ii) have an interest in any Person that directly or
indirectly operates a facilities based wireless telecommunication network in
Peru in any capacity, including as a partner, shareholder, or member;
(iii) intentionally interfere with any business relationships between the
Company, on the one hand, and its customers and suppliers, on the other hand, or
(iv) market or sell wireless telecommunications services under the “Nextel” name
in Peru. None of the Sellers, the Sellers’ Parent or any of their respective
Affiliates are prohibited by this Section 7.15(a) from (x) owning, directly or
indirectly, solely as an investment, securities of any Person traded on any
national securities exchange if such owner is not a controlling Person of, or a
member of a group which controls, such Person and does not, directly or
indirectly, own 5% or more of any class of securities of such Person that
engages in any of the activities that are described by the first sentence of
this Section 7.15(a), (y) owning, directly or indirectly, up to a 15% equity
interest in any partnership, joint venture or other Person (“Permissible
Entity”) that engages in any of the activities that are described by the first
sentence of this Section 7.15(a) or (z) entering into any (1) roaming agreements
that allow subscribers who purchase services from an Affiliate of any Seller,
which Affiliate must be located outside of Peru, to roam in Peru or (2) similar
agreements with multi-national business customers that allow such customers who
purchase services from an Affiliate of any Seller, which Affiliate must be
located outside of Peru, to obtain such multi-national business services in
Peru. For the avoidance of doubt, no third party that owns an equity interest in
any Permissible Entity or any member, shareholder or owner of such third party
shall be deemed to be an Affiliate of any of the Sellers or the Sellers’ Parent
due to the ownership of such equity interest for purposes of this Section 7.15.

 

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(b) During the Restricted Period, each Seller and the Sellers’ Parent shall not,
and shall not permit any of its Affiliates to, directly or indirectly, hire or
solicit any employee of the Company or encourage any such employee to leave such
employment or hire any such employee who has left such employment, except
pursuant to a general solicitation which is not directed specifically to any
such employees. Nothing in this Section 7.15(b) shall prevent any of the
Sellers, the Sellers’ Parent or any of their respective Affiliates from hiring
any employee whose employment with the Company has terminated or apply with
respect to any of the seconded headquarters employees set forth on Schedule
7.15(b).

(c) If any Seller or the Sellers’ Parent breaches, or threatens to commit a
breach of, any of the provisions of this Section 7.15, the Purchasers and the
Company shall have in addition to, and not in lieu of, any other rights and
remedies available to the Purchasers or the Company the right and remedy to
specific enforcement, it being acknowledged and agreed that any such breach or
threatened breach may cause irreparable injury to each of the Purchasers and the
Company and that money damages may not provide an adequate remedy to the
Purchasers or the Company.

(d) The Sellers and the Sellers’ Parent acknowledge that the restrictions
contained in this Section 7.15 are reasonable and necessary to protect the
legitimate interests of the Purchasers and constitute a material inducement to
the Purchasers to enter into this Agreement and consummate the transactions
contemplated by this Agreement. If any covenant contained in this Section 7.15
should ever be adjudicated to exceed the time, geographic, product or service,
or other limitations permitted by applicable Law in any jurisdiction, then any
court is expressly empowered to reform such covenant, and such covenant shall be
deemed reformed, in such jurisdiction to the maximum time, geographic, product
or service, or other limitations permitted by applicable Law. The invalidity or
unenforceability of any such covenant or provision as written shall not
invalidate or render unenforceable the remaining covenants or provisions hereof,
and any such invalidity or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such covenant or provision in any other
jurisdiction.

7.16 Release. Effective as of the Closing, each Seller and the Sellers’ Parent
hereby unconditionally and irrevocably waives any claims that each such Seller
and/or the Sellers’ Parent, solely in its capacity as a shareholder of the
Company, has or may have in the future against the Company and releases, on its
own behalf and on behalf of its successors and assigns, the Company and its
directors and officers, from any and all Legal Proceedings with respect thereto
arising out of, based upon or resulting from any Contract, transaction, event,
circumstance, action, failure to act, or occurrence of any sort or type, whether
known or unknown, and which occurred, existed, was taken or permitted prior to
the Closing, in each case except (i) to the extent in the nature of or related
to any exculpatory, indemnification, contribution, or similar provisions and
(ii) with respect to this Agreement, or any of the agreements contemplated
hereby, and all covenants, agreements and arrangements and the transactions
contemplated hereby.

 

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7.17 Capital and Other Expenditures. From January 1, 2013 until the day
immediately prior to the Closing Date, the Sellers and the Sellers’ Parent shall
cause the Company to make the following expenditures, in each case, in the
Ordinary Course of Business (i) capital expenditures in a cumulative amount that
are not less than 90% of the Capital Expenditure Amount and (ii) expenditures
for marketing and related sales expenses and customer care activities in a
cumulative amount that are not less than 80% of the Marketing Amount.

7.18 Intercompany Accounts. All intercompany payables and loans between the
Company, on the one hand, and any of the Sellers, the Sellers’ Parent or their
Affiliates, on the other hand, which exist and are reflected in the accounting
records of the relevant parties may be settled at any time on or prior to the
Closing by means of a capital contribution in exchange for ordinary shares of
the Company (shares so issued, “Additional Shares”). Except for the Contracts
set forth on Schedule 7.18, which shall remain in full force and effect after
the Closing Date in accordance with their respective terms (the “Surviving
Affiliate Agreements”), the Sellers and the Sellers’ Parent shall cause all
Related Party Transactions to be terminated at or prior to the Closing without
any Liability to the Company. Notwithstanding anything to the contrary in this
Agreement, all intercompany receivables and intercompany payables (including
those under the Surviving Affiliate Agreements) between the Company, on the one
hand, and Sellers’ Parent and its Affiliates, on the other hand, shall be
cancelled immediately prior to the Closing. For the avoidance of doubt, nothing
in this Section 7.18 shall affect any obligations with respect to the Surviving
Affiliate Agreements following the Closing.

7.19 OSIPTEL Certification Process.

(a) Following the date of this Agreement, the Sellers and the Sellers’ Parent,
shall, and shall cause the Company to, cooperate and use commercially reasonable
efforts to take all actions reasonably necessary or appropriate to complete the
Company Certification as soon as reasonably practicable. Promptly after the date
hereof, each of the Purchasers and the Company shall establish a technical
committee, consisting of no less than two representatives designated by each of
the Purchasers and the Company (the “Technical Committee”). During the period
from the date of this Agreement until the Company Certification Date, the
Technical Committee will (i) reasonably confer on a regular basis regarding the
status of the Company Certification and (ii) reasonably communicate and consult
with its members with respect to (x) the manner in which the Company
Certification is being conducted, in each case to the extent consistent with
applicable Laws, including Laws regarding the exchange of information and other
Laws regarding competition. The Company shall coordinate, manage and control the
Company Certification in consultation with the Technical Committee.

(b) After the Company determines in its reasonable discretion that it has
satisfied the requirements for the OSIPTEL Certification, the Sellers and the
Sellers’ Parent shall cause the Company (as soon as reasonably practicably
following such determination by the Company) to submit a filing with OSIPTEL
(the “OSIPTEL Filing”) (i) certifying that it is in compliance with its
obligations under the 1900 MHz Concession Agreement with respect to the coverage
and subscribers requirements established in clause 8.3 of the 1900 MHz
Concession Agreement and Annex 3 of the Resolución Directoral
No. 108-2012-MTC/27 issued by the MTC, in each case as of the date of such
filing, and (ii) requesting the OSIPTEL Certification. The OSIPTEL Filing shall
include such information as the Company reasonably determines is

 

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required by the OSIPTEL, or that is requested by the OSIPTEL, in order for
OSIPTEL to determine whether the Company has met the requirements for OSIPTEL
Certification and to issue the OSIPTEL Certification. To the extent permitted by
applicable Law, the Sellers and Sellers’ Parents shall provide the other Parties
with copies of all correspondence between the Company and OSIPTEL relating to
the OSIPTEL Filing.

(c) If the Purchasers consummate the transactions contemplated hereby without
receipt of the OSIPTEL Certification, then from the Closing until receipt of the
OSIPTEL Certification, the Purchasers will not permit the Company to, move or
redeploy any of the Network Assets or the Company’s equipment in any manner that
would reasonably be expected to adversely affect the OSIPTEL Certification in
any material respect or materially delay receipt of the OSIPTEL Certification.

(d) From the date of this Agreement until the Closing Date or earlier
termination of this Agreement, upon the terms and subject to the conditions set
forth in this Agreement, each of the Sellers and the Sellers’ Parent shall, and
shall cause the Company to, make or cause to be made all filings or applications
required to obtain the OSIPTEL Certification. Each Party shall promptly inform
the other Parties of any material oral communication with, and provide copies of
any material written communications with, any Peruvian Governmental Authority
regarding any such filings or applications.

(e) The Sellers and the Sellers’ Parent shall provide to the Purchasers copies
of any documents or other written materials to be filed or otherwise submitted
to any Peruvian Governmental Authority in connection with the transactions
contemplated by this Agreement, and shall consider all reasonable additions,
deletions or changes suggested by the Purchasers in connection therewith, prior
to filing or submitting such documents or materials.

(f) Each of the Purchasers, the Sellers and the Sellers’ Parent shall use its
commercially reasonable efforts to take such action as may be required to obtain
the OSIPTEL Certification as promptly as reasonably practicable after the
execution of this Agreement. The Purchasers will not, and will cause their
Affiliates and representatives not to, (i) make any inquiries relating to the
status of the pending OSIPTEL Certification or (ii) interfere with the Company’s
application for the OSIPTEL Certification in any way that adversely affects the
ability of the Company to obtain the OSIPTEL Certification.

7.20 No-Shop. Prior to the Seller Termination Date, the Sellers and Sellers’
Parent shall not, and shall not authorize or permit any of their Affiliates
(including the Company) or any of their representatives to, directly or
indirectly, (i) encourage, solicit, initiate, facilitate or continue inquiries
regarding an Acquisition Proposal; (ii) enter into discussions or negotiations
with, or provide any information to, any Person concerning a possible
Acquisition Proposal; or (iii) enter into any agreements or other instruments
(whether or not binding) regarding an Acquisition Proposal. The Sellers and
Sellers’ Parent shall immediately cease and cause to be terminated, and shall
cause their Affiliates (including the Company) and all of their representatives
to immediately cease and cause to be terminated, all existing discussions or
negotiations with any Persons conducted heretofore with respect to, or that
could lead to, an Acquisition Proposal. For purposes hereof, “Acquisition
Proposal” shall mean any inquiry, proposal or offer from any Person (other than
Entel or any of its Affiliates) concerning (i) a

 

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merger, consolidation, liquidation, recapitalization, share exchange or other
business combination transaction involving the Company; (ii) the issuance or
acquisition of shares of capital stock or other equity securities of the
Company; or (iii) the sale, lease, exchange or other disposition of any
significant portion of the Company’s properties or assets.

ARTICLE VIII

CONDITIONS TO CLOSING

8.1 Conditions Precedent to Obligations of the Purchasers. The obligation of the
Purchasers to consummate the transactions contemplated by this Agreement is
subject to the fulfillment, on or prior to the Closing Date, of each of the
following conditions (any or all of which may be waived by the Purchasers in
whole or in part to the extent permitted by applicable Law):

(a) the representations and warranties of the Sellers and the Sellers’ Parent
set forth in Article V and in the other Seller Documents qualified as to
materiality shall be true and correct, and those not so qualified shall be true
and correct in all material respects, at and as of the Closing Date as though
made on the Closing Date, except to the extent such representations and
warranties relate to an earlier date (in which case such representations and
warranties qualified as to materiality shall be true and correct, and those not
so qualified shall be true and correct in all material respects, on and as of
such earlier date);

(b) the Sellers and the Sellers’ Parent shall have performed and complied in all
material respects with all obligations and agreements required by this Agreement
to be performed or complied with respectively by them on or prior to the Closing
Date;

(c) there shall not be in effect any Order by a Governmental Authority of
competent jurisdiction restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated hereby or imposing adverse
conditions on the transaction or on any of the Purchasers or any of their
Affiliates;

(d) (i) each of the Company Concessions shall be in full force and effect and
(ii) the Company shall have received the OSIPTEL Certification (and the
Purchaser shall have received a true and correct copy thereof);

(e) all approvals, agreements, amendments, consents and waivers that are listed
on Schedule 8.1(e) shall have been received, and executed counterparts thereof
shall have been delivered to Purchaser at or prior to the Closing;

(f) from the date of this Agreement, there shall not have occurred any event or
events that, individually or in the aggregate, would reasonably be expected to
result in a Material Adverse Effect; and

(g) each of the closing deliveries set forth in Section 4.2 shall have been
delivered to the Purchasers.

 

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8.2 Conditions Precedent to Obligations of the Sellers. The obligations of the
Sellers to consummate the transactions contemplated by this Agreement are
subject to the fulfillment, prior to or on the Closing Date, of each of the
following conditions (any or all of which may be waived by the Sellers in whole
or in part to the extent permitted by applicable Law):

(a) The representations and warranties of the Purchasers set forth in Article VI
and in the other Purchaser Documents qualified as to materiality shall be true
and correct, and those not so qualified shall be true and correct in all
material respects, at and as of the Closing Date as though made on the Closing
Date, except to the extent such representations and warranties relate to an
earlier date (in which case such representations and warranties qualified as to
materiality shall be true and correct, and those not so qualified shall be true
and correct in all material respects, on and as of such earlier date);

(b) the Purchasers shall have performed and complied in all material respects
with all obligations and covenants required by this Agreement to be performed or
complied with respectively by the Purchasers on or prior to the Closing Date;

(c) there shall not be in effect any Order by a Governmental Authority of
competent jurisdiction restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated hereby; and

(d) each of the closing deliveries set forth in Section 4.3 shall have been
delivered to the Sellers.

8.3 Frustration of Closing Conditions. None of the Parties may rely on the
failure of any condition set forth in Section 8.1 or Section 8.2, if such
failure was caused by such Party’s failure to comply with this Agreement.

ARTICLE IX

INDEMNIFICATION

9.1 Indemnification by Sellers.

(a) Subject to the limitations of Section 9.4 and Section 9.6 and the procedures
of Section 9.3, the Sellers and the Sellers’ Parent hereby jointly and severally
agree to indemnify and hold the Purchasers and their respective Affiliates,
directors, officers, stockholders, partners, attorneys, accountants, agents,
employees, heirs, successors and assigns (collectively, the “Purchaser
Beneficiaries”) from and against any Losses incurred or suffered by any of the
Purchaser Beneficiaries resulting from or arising out of:

(i) any breach or inaccuracy of any representation or warranty made by the
Sellers or the Sellers’ Parent contained in this Agreement or any of the other
Seller Documents,

(ii) any breach or non-fulfillment of any covenant or agreement by the Sellers
or the Sellers’ Parent contained in this Agreement,

 

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(iii) any Pre-Closing Taxes (whether or not disclosed in the Schedules to this
Agreement); provided that Sellers shall be liable only to the extent that such
Pre-Closing Taxes were not already taken into account in determining Net Working
Capital (as finally determined pursuant to this Agreement) or otherwise as a Net
Purchase Price adjustment hereunder or

(iv) any Remedial Losses.

(b) The Purchasers shall take and shall cause their respective Affiliates to
take commercially reasonable steps to mitigate any Loss upon becoming aware of
any event which gives rise thereto.

9.2 Indemnification by the Purchasers.

(a) Subject to the limitations of Section 9.4 and the procedures of Section 9.3,
the Purchasers hereby jointly and severally agree to indemnify and hold the
Sellers and their respective Affiliates, directors, officers, stockholders,
partners, attorneys, accountants, agents, employees, heirs, successors and
assigns (collectively, the “Seller Beneficiaries” and, collectively with the
Purchaser Beneficiaries, the “Beneficiaries”) from and against any Losses
incurred or suffered by any of the Seller Beneficiaries resulting from or
arising out of:

(i) any breach or inaccuracy of any representation or warranty made by the
Purchasers contained in this Agreement or any of the other Purchaser Documents,

(ii) any breach of any covenant or agreement by the Purchasers contained in this
Agreement and

(iii) any obligations of the Company following the Closing arising from the
Contracts assumed by the Purchasers pursuant to this Agreement.

(b) The Sellers and the Sellers’ Parent shall take and cause their respective
Affiliates to take commercially reasonable steps to mitigate any Loss upon
becoming aware of any event which gives rise thereto.

9.3 Indemnification Procedures.

(a) If any claim or demand for which the Sellers, the Sellers’ Parent or the
Purchasers, as the case may be (an “Indemnifying Party”), may be liable to any
Beneficiary hereunder is asserted against or sought to be collected from any
Beneficiary by a third party (a “Third Party Claim”), such Beneficiary shall
promptly, but in no event more than 30 days following notice to the Beneficiary
of the claim or demand, notify the Indemnifying Party stating in reasonable
detail (taking into account the information then available to the Beneficiary)
the basis for the claim or demand and the amount of the claim or demand (the
“Claim Notice”). The failure of the Beneficiary to give timely notice of a Third
Party Claim shall not relieve the Indemnifying Party of its indemnification
obligations hereunder except to the extent such failure has materially
prejudiced the Indemnifying Party. For the avoidance of doubt, Third Party
Claims that relate to Taxes (including Tax Matters) shall, to the extent
addressed by Section 7.13, be governed by Section 7.13 and not this Section 9.3.

 

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(b) If the Indemnifying Party notifies the Beneficiary of its election to defend
against such Third Party Claim or demand, the Indemnifying Party shall have the
right to defend the Beneficiary by appropriate proceedings and shall have the
sole power to direct and control (subject to Section 9.3(c)) such defense, upon
written notice delivered to the Beneficiary within 30 days after the date of the
Claim Notice. The Indemnifying Party shall promptly inform the Beneficiary upon
request of the status of any Third Party Claim. If any Beneficiary desires to
participate in the defense, it may do so at its sole cost and expense, and the
Indemnifying Party will not be liable to the Beneficiary for legal expenses
incurred by the Beneficiary. All costs and expenses incurred by the Indemnifying
Party in defending such Third Party Claim shall be a liability of, and shall be
paid by, the Indemnifying Party.

(c) The Indemnifying Party agrees that it will not settle, compromise or consent
to the entry of any judgment in any pending or threatened Third Party Claim,
unless such settlement, compromise or consent includes an unconditional release
of each such Beneficiary from all Liability arising or that may arise out of
such Third Party Claim and provides solely for monetary relief satisfied or to
be satisfied by the Indemnifying Party and no admission of wrongdoing or
liability. Furthermore, with respect to a Third Party Claim that relates to
Taxes of the Company, the rights of the Indemnifying Party under Section 7.13
and Section 9.3(b) to direct and control the defense of such claim shall be
limited solely to the issues raised in such Third Party Claim for which an
indemnification is claimed.

(d) If the Indemnifying Party elects not to defend the Beneficiary against such
Third Party Claim, then the amount of any such Third Party Claim, or, if the
same be contested by the Beneficiary, that portion thereof as to which such
defense is unsuccessful (including the reasonable costs and expenses pertaining
to such defense) shall be the liability of the Indemnifying Party and shall
constitute Losses hereunder. The Beneficiary shall not settle any Third Party
Claim without the written consent of the Indemnifying Party, which shall not be
unreasonably withheld, delayed or conditioned.

(e) To the extent the Indemnifying Party shall direct, control or participate in
the defense or settlement of any Third Party Claim, the Beneficiary will provide
the Indemnifying Party and its counsel access to, during normal business hours,
relevant business records and other documents, and shall permit them to consult
with the employees of and counsel to the Beneficiary. Notwithstanding the
foregoing sentence, with respect to a Third Party Claim that relates to Taxes of
the Company, the Indemnifying Party shall have no right to access any
information that relates to the Company that is not reasonably necessary to the
defense of such claim. The Beneficiary shall use its commercially reasonable
efforts to defend all such Third Party Claims that the Indemnifying Party does
not elect to defend.

(f) If a Beneficiary asserts any claim for indemnification provided for under
this Article IX other than a claim in respect of, arising out of or involving a
Third Party Claim, such Beneficiary shall promptly notify the Indemnifying Party
in writing, and in reasonable detail of the basis for and the amount of the
claim. The failure of the Beneficiary to give timely notice of a claim shall not
relieve the Indemnifying Party of its indemnification obligations hereunder
except to the extent such failure has materially prejudiced the Indemnifying
Party.

 

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9.4 Limitations on Indemnification.

(a) The Sellers or the Purchasers, as applicable, must provide notice of a claim
for indemnification pursuant to Section 9.1(a) or Section 9.2(a) prior to the
expiration of the survival period provided in this Section 9.4(a). The
representations and warranties contained in Article V and Article VI of this
Agreement shall survive the Closing until the date that is 18 months following
the Closing Date, after which time such representations and warranties shall
terminate and have no further force or effect (and thereafter no claim arising
from a breach thereof may be made, except as otherwise provided herein); except
that (i) any claim arising from a breach or inaccuracy of the representations
and warranties set forth in Section 5.1 (Corporate Existence; Authority),
Section 5.2 (Company’s Corporate Existence), Section 5.4 (Capitalization),
Section 5.5 (Ownership of Shares), Section 5.6 (Subsidiaries), Section 5.17
(Financial Advisors), Section 5.19 (Transactions with Related Parties),
Section 6.1 (Corporate Existence; Authority) or Section 6.5 (Financial Advisors)
shall not be subject to the time limit of this sentence and (ii) any claim
arising from a breach or inaccuracy of the representations and warranties set
forth in Section 5.10 (Taxes) and Sellers’ indemnification obligation pursuant
to Section 9.1(a)(iii) shall survive for the full period of all applicable
statutes of limitations (giving effect to any extension thereof) plus 60 days.
The indemnification obligations under Section 9.1(a)(ii) and under
Section 9.2(a)(ii) shall survive for the full period of the applicable statute
of limitations governing the underlying claim for indemnification (giving effect
to any extension thereof) plus 60 days. If any Beneficiary delivers to an
Indemnifying Party, before the expiration of the applicable survival period,
notice of an indemnification claim pursuant to this Article IX, then the
applicable representation, warranty, covenant or agreement will survive with
respect to such claim until, but only for purposes of, the final resolution of
the matter specifically stated in such notice.

(b) The Sellers and the Sellers’ Parent shall have no liability to the Purchaser
Beneficiaries for any Losses pursuant to Section 9.1(a)(i) except to the extent
(and then only to the extent) the Losses incurred by the Purchaser Beneficiaries
exceed an aggregate amount equal to $4,000,000 (the “Deductible Amount”) and
then only for all such Losses in excess thereof, and no indemnity shall be
recoverable by the Purchaser Beneficiaries for any Losses incurred with respect
to any individual item or matter (or series of related items or matters arising
from the same or substantially similar facts or circumstances) unless the amount
of such Losses exceeds $150,000 (the “Individual Threshold Amount”), and if the
Individual Threshold Amount is not exceeded, then none of such Losses with
respect thereto will count toward satisfying the Deductible Amount; provided
that notwithstanding the foregoing, and solely in the case of Losses arising out
of any breach or inaccuracy of the representation in the first sentence of
Section 5.16(c) insofar as it relates to the municipal Permits identified on
Schedule 5.16(c), the Individual Threshold Amount shall not apply to any such
Losses with respect to such municipal Permits and no indemnity shall be
recoverable by the Purchaser Beneficiaries for any such Losses with respect to
such municipal Permits unless the amount of all such Losses (without regard to
the Individual Threshold Amount) exceeds $500,000 in the aggregate. The
aggregate liability of the Sellers and the Sellers’ Parent under
Section 9.1(a)(i) shall in no event exceed $50,000,000. The limitations set
forth in the foregoing two sentences shall not apply to Losses relating to,
resulting from or arising out of any inaccuracy or breach of the Fundamental
Representations or Losses indemnifiable pursuant to Section 9.1(a)(ii) or
Section 9.1(a)(iii). The Sellers’ and the Sellers’ Parent’s aggregate liability
to the Purchaser Beneficiaries for any Losses

 

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(i) relating to any breach of the Fundamental Representations,
(ii) indemnifiable pursuant to Section 9.1(a)(ii) and (iii) indemnifiable
pursuant to Section 9.1(a)(iii) shall not exceed an aggregate amount equal to
the Net Purchase Price less any other Losses paid pursuant to Section 9.1(a).

(c) The Purchasers shall have no liability to the Seller Beneficiaries for any
Losses pursuant to Section 9.2(a)(i) except to the extent (and then only to the
extent) the Losses incurred by the Seller Beneficiaries exceed the Deductible
Amount and then only for such Losses in excess thereof, and no indemnity shall
be recoverable by the Seller Beneficiaries for any Losses incurred with respect
to any individual item or matter (or series of related items or matters arising
from the same or substantially similar facts or circumstances) unless the amount
of such Losses exceeds the Individual Threshold Amount, and if the Individual
Threshold Amount is not exceeded, then none of such Losses with respect thereto
will count toward satisfying the Deductible Amount. The aggregate liability of
the Purchasers under Section 9.2(a)(i) shall in no event exceed $50,000,000. The
limitations set forth in the foregoing two sentences shall not apply to Losses
relating to, resulting from or arising out of any inaccuracy or breach of the
representations or warranties set forth in Section 6.1 (Corporate Existence;
Authority) or Section 6.5 (Financial Advisors) or Losses indemnifiable pursuant
to Section 9.2(a)(ii) or Section 9.2(a)(iii). The Purchasers’ aggregate
liability to the Seller Beneficiaries for any Losses (i) relating to any breach
of the representations or warranties set forth in Section 6.1 (Corporate
Existence; Authority) or Section 6.5 (Financial Advisors), (ii) indemnifiable
pursuant to Section 9.2(a)(ii) or (iii) indemnifiable pursuant to
Section 9.2(a)(iii) shall not exceed an aggregate amount equal to the Net
Purchase Price less any Losses paid pursuant to Section 9.2(a).

(d) Any matter disclosed in any Section of the Disclosure Schedule relating to
any representations and warranties shall be deemed to be disclosed for all other
Sections of the Disclosure Schedule relating to any representations and
warranties to the extent that it is reasonably apparent from the text of such
disclosure that such disclosure is applicable to such other Sections of the
Disclosure Schedule.

(e) The limitations on damages set forth in this Section 9.4 shall not apply to
claims by any party based on fraud, willful misconduct or intentional
misrepresentation.

(f) The amount paid to the Purchaser Beneficiaries pursuant to Article IX will
be reduced by all insurance or other third party indemnification proceeds
actually received by any of the Purchaser Beneficiaries. Each of the Purchasers
shall use commercially reasonable efforts to claim and recover any Losses
suffered by the Purchaser Beneficiaries under available insurance policies to
the extent such Losses are covered by such policies. Each of the Purchasers
shall cause the Purchaser Beneficiaries to remit to NII Telecom any such
insurance proceeds that are paid to the Purchaser Beneficiaries with respect to
Losses for which the Purchaser Beneficiaries have been previously compensated
under Article IX.

(g) For purposes of determining whether any breach or inaccuracy of a
representation or warranty or Loss has occurred and the amount of any Loss, the
representations and warranties set forth in this Agreement will be considered
without regard to any materiality (including “material,” “materially,” “in all
material respects” and similar qualifications) or

 

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Material Adverse Effect qualification set forth therein, except this sentence
does not apply to (i) Section 5.9(b) (Absence of Certain Developments),
(ii) each reference to “material” and “materially” solely to the extent it is
used to define a list of items in the first sentence of Section 5.11(b) (Leased
Property), the first sentence of Section 5.12(a) (Intellectual Property), or
clause (xvii) of Section 5.13(a) (Material Contracts) or (iii) the word
“Material” in the term “Material Contract.”

(h) No Beneficiary shall be entitled to recover from an Indemnifying Party more
than once in respect of the same Loss.

(i) The representations, warranties and covenants of the Indemnifying Party, and
the Beneficiary’s right to indemnification with respect thereto, shall not be
affected or deemed waived by reason of any investigation made by or on behalf of
the Beneficiary (including by any of its representatives) or by reason of the
fact that the Beneficiary or any of its representatives knew or should have
known that any such representation or warranty is, was or might be inaccurate,
or that any such covenant had been or would be breached or by reason of the
Beneficiary’s waiver of any condition set forth in Section 8.1 or Section 8.2,
as the case may be.

(j) In the event of payment by or on behalf of any Indemnifying Party to any
Beneficiary in connection with a Third Party Claim, such Indemnifying Party
shall be subrogated to and shall stand in the place of such Beneficiary as to
any events or circumstances in respect of which such Beneficiary may have any
right, defense or claim relating to such claim or demand against any claimant or
plaintiff asserting such claim or demand; provided that such Beneficiary shall
not be obligated to be a party to, participate in or incur expenses in
connection with any such claim or demand by any Indemnifying Party.

9.5 Tax Treatment of Indemnity Payments. The Sellers and the Purchasers agree to
treat any indemnity payment made pursuant to this Article IX as an adjustment to
the Net Purchase Price as adjusted under Section 3.3 for all Tax purposes unless
otherwise required by applicable Law.

9.6 Exclusive Remedy; Remedial Losses

(a) The sole and exclusive remedy for any breach or inaccuracy, or alleged
breach or inaccuracy, of any representation or warranty in this Agreement or
any, covenant or agreement to be performed on or prior to the Closing Date,
shall be indemnification in accordance with this Article IX, except that this
Section 9.6(a) shall not prevent any Party from seeking specific performance,
injunctive relief or any other equitable remedy.

(b) For the avoidance of doubt, amounts owing to the Purchaser Beneficiaries
under Section 9.1(a)(iv) may be claimed and recovered, as the Purchaser
Beneficiaries may in their sole discretion elect, from (A) the Supplemental
Escrow Funds remaining from time to time in the Supplemental Escrow Account (if
such escrow is established under Section 3.2(b)(ii)) without regard to the
Deductible Amount or the Individual Threshold Amount (and any such claims and
recoveries from Supplemental Escrow Funds shall not be deemed to have been made
under Section 9.1(a)(i) or otherwise count against the $50,000,000 limitation
applicable to claims

 

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under Section 9.1(a)(i)) and/or (B) the Indemnification Escrow Funds remaining
from time to time in the Indemnity Escrow Account. The Parties agree that the
aggregate amount of recovery of Remedial Losses under Section 9.1(a)(iv) shall
be the funds remaining from time to time in the Supplemental Escrow Amount (if
such escrow is established under Section 3.2(b)(ii)) and, subject to the
limitations of Section 9.4(b), any Remedial Losses payable pursuant to
Section 9.1(a)(i)).

ARTICLE X

MISCELLANEOUS

10.1 Expenses. Except as otherwise provided in this Agreement, whether or not
the transactions contemplated hereby are consummated, all costs and expenses
(including any brokerage commissions or any finder’s or investment banker’s fees
and including attorneys’ and accountants’ fees) incurred by a Party in
connection with the negotiation and execution of this Agreement and each other
agreement, document and instrument contemplated hereby and the consummation of
the transactions contemplated hereby and thereby shall be paid by the Party
incurring the expense, and for the avoidance of doubt, any Company Transaction
Expenses shall be paid by the Sellers and the Sellers’ Parent.

10.2 Arbitration Agreement.

(a) Any and all controversies, disputes, or claims arising out of or in
connection with this Agreement (including the existence, validity,
interpretation or breach of this Agreement and any claim based on obligations
imposed by contract, tort, statute, or other Law) shall be resolved and finally
settled through binding arbitration before a single arbitrator under the Rules
of Arbitration of the International Chamber of Commerce (the “ICC Rules”). The
Emergency Arbitrator Provisions of the ICC Rules shall not apply.

(b) The arbitrator shall be appointed by the International Court of Arbitration
pursuant to the ICC Rules. It is the mutual intention and desire of the Parties
that the arbitrator be appointed as expeditiously as possible following the
submission of the dispute to arbitration.

(c) The place of the arbitration shall be New York, New York, United States of
America. The language of the arbitration shall be English.

(d) Each Party shall bear its own attorneys’ and experts’ fees incurred in
connection with arbitration. The arbitrator shall have the discretion to
determine which Party or Parties shall pay the fees and expenses of the
arbitrator and the International Chamber of Commerce.

(e) It is the intent of the Parties that, barring extraordinary circumstances,
the arbitrator will render its final award within 120 days from the date on
which the arbitrator is appointed. The arbitrator may extend this time only if
all the parties to the arbitration agree or if the interests of justice require.
The arbitrator shall establish such procedural measures, set procedural
timetables, establish methods for establishing the facts of the case, and
conduct hearings consistent with the Parties’ intent. Failure to adhere to the
120 day time limit, however, shall not constitute a basis for challenging the
award.

 

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(f) Consistent with the expedited nature of arbitration, the Parties agree that
any disclosure required as part of the arbitration shall be limited to
information or documents directly relevant to the controversy or claim in
arbitration. In resolving any disagreements regarding disclosure requested as
part of the arbitration, the arbitrator may, in its discretion, refer to the
International Bar Association Rules on the Taking of Evidence in International
Arbitration. Any disagreement regarding disclosure, including the relevance or
scope of requests for disclosure, shall be determined by the arbitrator, which
determination shall be conclusive.

(g) The award shall be in writing, shall be signed by the arbitrator, and shall
include a statement setting forth the reasons for the award. The decision of the
arbitrator in any such proceeding will be final and binding and not subject to
judicial review. Final judgment may be entered upon such an award in any court
of competent jurisdiction, but entry of such judgment will not be required to
make the award effective.

10.3 Submission to Jurisdiction. The Parties agree that any action against any
Party in support of an arbitration, ancillary to an arbitration, or otherwise
related to an arbitration commenced or to be commenced pursuant to Section 10.2,
including any actions for provisional, interim, or conservatory measures or
actions to enforce an arbitration award or any judgment entered by any court in
respect of any such action may be brought in any federal or state court of
competent jurisdiction located within the State of New York, and the Parties
hereby irrevocably submit to the non-exclusive jurisdiction of any federal or
state court located within the State of New York over any such action. The
Parties hereby irrevocably waive, to the fullest extent permitted by applicable
Law, any objection which they may now or hereafter have to the laying of venue
of any such action brought in such court or any defense of inconvenient forum
for the maintenance of such action. Each of the Parties agrees that a judgment
in any such action may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by Law.

10.4 Consent to Service of Process. Each of the Parties hereby consents to
process being served by any Party in any suit, action or proceeding, including
any proceeding initiated to confirm or enforce an arbitration award, by delivery
of a copy thereof in accordance with the provisions of Section 10.8.

10.5 Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT
CANNOT BE WAIVED, EACH PARTY HEREBY WAIVES, AND COVENANTS THAT IT WILL NOT
ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY
JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION ARISING IN WHOLE OR IN PART UNDER, RELATED TO, BASED ON OR IN CONNECTION
WITH THIS AGREEMENT OR THE SUBJECT MATTER HEREOF, WHETHER NOW EXISTING OR
HEREAFTER ARISING AND WHETHER SOUNDING IN TORT OR CONTRACT OR OTHERWISE. ANY
PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 10.5 WITH ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS
RIGHT TO TRIAL BY JURY.

 

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10.6 Entire Agreement; Amendments and Waivers.

(a) This Agreement (including the Schedules and Exhibits to this Agreement), the
Confidentiality Agreement and any other written instrument executed by each of
the Parties and expressly referencing this Agreement represent the entire
understanding and agreement between the Parties with respect to the subject
matter of this Agreement.

(b) This Agreement can be amended, supplemented or changed, and any provision of
this Agreement can be waived, only by written instrument making specific
reference to this Agreement signed by the Party against whom enforcement of any
such amendment, supplement, modification or waiver is sought.

(c) No action taken pursuant to this Agreement, including any investigation by
or on behalf of any Party, shall be deemed to constitute a waiver by the Party
taking such action of compliance with any representation, warranty, covenant or
agreement contained herein. The waiver by any Party of a breach of any provision
of this Agreement shall not operate or be construed as a further or continuing
waiver of such breach or as a waiver of any other or subsequent breach. No
failure on the part of any Party to exercise, and no delay in exercising, any
right, power or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of such right, power or remedy by such Party
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy.

10.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the Laws of the State of New York applicable to contracts made
and performed in such State.

10.8 Notices. All notices and other communications under this Agreement between
and among the Parties shall be in writing (except for communications between and
among representatives of the Technical Committee in respect of the Company
Certification) and shall be deemed given (a) when delivered personally by hand
(with written confirmation of receipt), (b) when sent by facsimile (with written
confirmation of transmission) or (c) two Business Days following the day sent by
overnight courier (with written confirmation of receipt), in each case at the
following addresses and facsimile numbers (or to such other address or facsimile
number as a Party may have specified by notice given to the other Party pursuant
to this provision):

If to either of the Sellers or to the Sellers’ Parent, to:

NII Mercosur Telecom, S.L.

NII Mercosur Móviles, S.L.

Calle Estraunza número 6

7º Derecha

48011 Bilbao (Vizcaya)

Spain

Attention: Daniel Irezabal del Busto

Note: There is no facsimile number.

 

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with a copy to:

NII Holdings, Inc.

1875 Explorer Street, Suite 1000

Reston, VA 20191, U.S.A.

Attention: Gary D. Begeman, General Counsel

Facsimile No.: 703-390-5191

with a copy (which shall not constitute notice) to:

Jones Day

222 East 41st Street

New York, NY 10017, U.S.A.

Attention:  S. Wade Angus

                  Nicholas E. Rodriguez

Facsimile No.: 212-755-7306

If to either of the Purchasers, to:

Empresa Nacional de Telecomunicaciones S.A.

Avenida Andrés Bello 2687, 14th Floor

Las Condes

Santiago, Chile

Attention:  Felipe Ureta Prieto

                  Carlos Cristián Maturana

Facsimile No.: +56223606886

with a copy (which shall not constitute notice) to:

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, NY 10017, U.S.A.

Attention:  David L. Williams

                  Edward Chung

Facsimile No.: 212-455-2502

10.9 Severability. If any term or other provision of this Agreement is invalid,
illegal, or incapable of being enforced by any Law or public policy, all other
terms or provisions of this Agreement shall nevertheless remain in full force
and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
Party. Upon such determination that any term or other provision is invalid,
illegal, or incapable of being enforced, the Parties shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
Parties as closely as possible in an acceptable manner in order that the
transactions contemplated hereby are consummated as originally contemplated to
the greatest extent possible.

10.10 Binding Effect; Assignment. This Agreement shall be binding upon and inure
to the benefit of the Parties and their respective successors and permitted
assigns. Nothing in this

 

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Agreement shall create or be deemed to create any third party beneficiary rights
in any person or entity not a party to this Agreement except as stated in
Article IX. No assignment of this Agreement or of any rights or obligations
hereunder may be made by any Party, directly or indirectly (by operation of Law
or otherwise), without the prior written consent of the other Parties, and any
attempted assignment without the required consents shall be void; provided that
any Purchaser may assign all of its rights and obligations under this Agreement
to any of its Affiliates so long as Entel continues to control such Affiliates
until the Closing. No assignment shall relieve the assigning Party of any
obligation. Upon any permitted assignment, the references in this Agreement to
the assigning Party shall also apply to any such assignee unless the context
otherwise requires.

10.11 Counterparts. This Agreement may be executed in one or more counterparts,
each of which will be deemed to be an original copy of this Agreement and all of
which, when taken together, will be deemed to constitute one and the same
agreement.

10.12 Specific Performance. The Parties agree that, if any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached, irreparable damage would occur, no adequate remedy at
Law would exist and damages would be difficult to determine, and that the
parties shall be entitled to specific performance of the terms hereof, in
addition to any other remedy at Law or in equity.

10.13 Further Assurances.

(a) From and after the Closing, each of the Parties shall use their commercially
reasonable efforts to execute, deliver or furnish or cause to be executed,
delivered or furnished, such additional documents and other papers and to take
or cause to be taken such further actions as may reasonably be necessary, proper
or advisable to make effective the transactions contemplated hereby.

(b) With respect to the Transferred Contracts, the Sellers and the Sellers’
Parent shall use commercially reasonable efforts to (i) provide to the Company
the benefits of the applicable Contract, (ii) cooperate in any reasonable and
lawful arrangement designed to provide such benefits to the Company and
(iii) enforce at the request of the Company and for the account of the Company
any rights of the Sellers or the Sellers’ Parent arising from any such Contract
as necessary to give the Company the benefits of such Contract.

10.14 Non-Recourse. No past, present or future director, officer, employee,
incorporator, member, partner, stockholder, Affiliate, agent, attorney or
representative of any of the Parties shall have any liability for any
obligations or liabilities for any such Party, as the case may be, under this
Agreement or for any claim based on, in respect of, or by reason of, the
transactions contemplated hereby.

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their respective officers thereunto duly authorized, as of the date first
written above.

 

ENTEL INVERSIONES S.A. By:  

/s/ Felipe Ureta Prieto

  Name:   Felipe Ureta Prieto   Title:   General Manager EMPRESA NACIONAL DE
TELECOMUNICACIONES S.A. By:  

/s/ Antonio Büchi Buc

  Name:   Antonio Büchi Buc   Title:   Chief Executive Officer NII MERCOSUR
TELECOM, S.L. -Sociedad Unipersonal- By:  

/s/ Daniel E. Freiman

  Name:   Daniel E. Freiman   Title:   Duly Authorized President NII MERCOSUR
MÓVILES, S.L. -Sociedad Unipersonal- By:  

/s/ Daniel E. Freiman

  Name:   Daniel E. Freiman   Title:   Duly Authorized President NII HOLDINGS,
INC. By:  

/s/ Sultana Shamim Khan

  Name:   Sultana Shamim Khan   Title:   Vice President,     Corporate
Development

[Signature Page to Stock Purchase Agreement]