EXHIBIT 4.3
RIGHTS AGENCY AGREEMENT
RIGHTS AGENCY AGREEMENT (this "Agreement"), dated as of , 2005,
between EMBRATEL PARTICIPACOES S.A. (the "Company"), a Brazilian corporation,
and THE BANK OF NEW YORK, a New York banking corporation (the "Rights Agent").
WHEREAS, the Company will grant to existing holders of American
Depositary Shares ("ADSs") issued under the Amended and Restated Deposit
Agreement dated as of June 16, 2003 (the "Deposit Agreement"), among the
Company, The Bank of New York, as Depositary (the "Depositary") and all owners
and beneficial owners from time to time of American Depositary Receipts ("ADRs")
issued thereunder that are registered on the books of the Depositary (the "ADS
Holders") as of , 2005 (the "Record Date"), the right to purchase new ADSs
at an estimated ADS subscription price of U.S.$ per ADS, payable only in
U.S. dollars (the "Rights Offer"). Each ADS holder will receive one (1) ADS
right ("ADS Right") for every ADSs held on the Record Date, and each ADS
Right will entitle the holder to purchase one new ADS in the Rights Offer. Each
ADS represents 5,000 preferred shares ("Shares") of the Company.
WHEREAS, pursuant to the Rights Offer, each ADS Holder may subscribe
for additional ADSs in excess of the number of ADSs that such ADS Holder is
entitled to purchase. Following the expiration of the subscription period in
connection with the related share rights offering by the Company in Brazil (the
"Share Rights Offering"), to the extent unsubscribed Shares are reoffered to the
Depositary as a result of unexercised share rights and ADS Rights, each ADS
Holder will be allocated additional new ADSs in proportion to the number of
additional ADSs for which such ADS Holder has subscribed.
WHEREAS, the Rights Offer is expected to commence on or about ,
2005. The Rights Offer will be made to each ADS Holder by means of the
prospectus dated on or about , 2005 (the "Prospectus"), which will be
accompanied by an ADS Rights Certificate ("ADS Rights Certificate"),
instructions with respect to the number of ADSs that may be purchased, the
method for subscribing and the delivery of payment (the "Instructions") and
certain other documents. The ADS Rights Certificates are to be used by the ADS
Holders to subscribe for new ADSs in the Rights Offer.
WHEREAS, the ADS Rights will be listed for trading on the New York
Stock Exchange, evidenced by certificates in registered form and transferable by
their holders.
NOW, THEREFORE, in consideration of the premises and mutual
agreements herein, the Company and the Rights Agent hereby agree as follows:
ARTICLE I. - APPOINTMENT OF THE RIGHTS AGENT
The Company hereby appoints The Bank of New York as the Rights Agent
of the Company in connection with the Rights Offer in accordance with the terms
and conditions of this Agreement, and The Bank of New York hereby accepts such
appointment and agrees to be bound by the terms and conditions of this Agreement
upon execution and delivery of this Agreement.
ARTICLE II. - TERMS OF RIGHTS OFFER
1. The subscription period will commence on or about , 2005 (the
"Commencement Date") and will end on , 2005 (the "Expiration Date"). The
Commencement Date through 5:00 p.m. (New York City time) on the Expiration Date
will constitute the subscription period (the "Subscription Period").
2. ADS Holders on the Record Date will be entitled to purchase ADSs
pursuant to the Rights Offer at an estimated ADS subscription price of U.S.$ per
ADS (the "Subscription Price"), payable only in U.S. dollars, which is the ADS
subscription price of R$ per ADS translated into U.S. dollars at the Central
Bank of Brazil's commercial selling rate of R$ = U.S.$1.00 on , 2005,
plus an additional 7%, which represents an allowance for potential fluctuations
in the exchange rate between the real and the U.S. dollar and for the payment of
ADS issuance fees of the Depositary pursuant to the Deposit Agreement, currency
conversion expenses and financial transaction taxes in Brazil.
ARTICLE III. - DELIVERY OF RIGHTS OFFER MATERIAL; EXECUTION, VALIDITY AND
TRANSFER OF ADS RIGHTS CERTIFICATES
1. On or before , 2005, the Company shall deliver to the Rights
Agent sufficient copies of the Prospectus, the ADS Rights Certificates and the
Instructions (including a Substitute Form W-9).
2. Unless otherwise instructed in writing by the Company, on or
about , 2005, the Rights Agent shall send to each ADS Holder as of the Record
Date (i) a Prospectus, (ii) an ADS Rights Certificate, (iii) a copy of the
Instructions, and (iv) a return envelope addressed to the Rights Agent for use
by such ADS Holder (such material, collectively, the "Rights Offer Material").
3. In the event that the Rights Offer Material is returned to the
Rights Agent for any reason and a proper delivery thereof cannot be effected to
an ADS Holder, the Rights Agent shall hold such Rights Offer Material, and the
related ADS Holder's right to purchase ADSs under the Rights Offer will be
treated as unexercised. The Rights Agent shall supply the Company with such
information as the Company may request with respect to any Rights Offer Material
that cannot be delivered to an ADS Holder.
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4. In the event that, prior to the Expiration Date, any ADS Holder
notifies the Rights Agent that the Rights Offer Material to which such ADS
Holder is entitled has not been delivered, or has been lost, stolen or
destroyed, the Rights Agent will furnish to such ADS Holder a copy of the Rights
Offer Material (subject, in the case of any ADS Rights Certificate, to
compliance by the ADS Holder with the provisions of paragraph 7 of this
Article). The Company agrees to supply the Rights Agent with sufficient copies
of the Rights Offer Material for such purposes.
5. The ADS Rights Certificates shall be substantially in form of
Exhibit A to this Agreement. The ADS Rights Certificates shall be executed on
behalf of the Company by any authorized officer of the Company (an "Authorized
Officer"), which need not be the same authorized signatory for all of the ADS
Rights Certificates, either manually or by facsimile signature. The ADS Rights
Certificates shall be countersigned by an authorized signatory of the Rights
Agent, either manually or by facsimile signature, which need not be the same
signatory for all of the ADS Rights Certificates, and no ADS Rights Certificate
shall be valid for any purpose unless so countersigned.
The Rights Agent shall, upon written instructions of an Authorized
Officer, initially countersign and deliver ADS Rights Certificates for all ADS
Rights issuable in the Rights Offer as of the Record Date, and thereafter shall
countersign and deliver ADS Rights Certificates as otherwise provided in this
Agreement.
In case any Authorized Officer of the Company that signed any of the
ADS Rights Certificates ceases to be an Authorized Officer of the Company before
countersignature by the ADS Rights Agent and issuance and delivery by the
Company, such ADS Rights Certificates, nevertheless, may be countersigned by the
Rights Agent, issued and delivered with the same force and effect as though the
person who signed such ADS Rights Certificates had not ceased to be such officer
of the Company; and any ADS Rights Certificate may be signed on behalf of the
Company by any person who, at the actual date of the execution of such ADS
Rights Certificate, shall be an Authorized Officer of the Company authorized to
sign such ADS Rights Certificate, although at the date of the execution of this
Agreement any such person was not such an Authorized Officer.
The Rights Agent will keep or cause to be kept, at one of its
offices in New York City, books for registration and transfer of the ADS Rights
issued hereunder. Such books shall show the names and addresses of the
respective registered holders of the ADS Rights (each, a "Holder"), the number
of ADS Rights evidenced by each of the ADS Rights Certificates and the date of
each of the ADS Rights Certificates.
6. At any time after the close of business on the date hereof, and
at or prior to the close of business on the Expiration Date, a transfer of any
ADS Rights may be registered and any ADS Rights Certificate or ADS Rights
Certificates may be split up, combined or exchanged for another ADS Rights
Certificate or ADS Rights Certificates
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evidencing the same number of ADS Rights as the ADS Rights Certificate or ADS
Rights Certificates surrendered. Any Holder desiring to register the transfer of
ADS Rights or to split up, combine or exchange any ADS Rights Certificate shall
make such request in writing delivered to the Rights Agent, and shall surrender
to the Rights Agent the ADS Rights Certificate or ADS Rights Certificates
evidencing the ADS Rights the transfer of which is to be registered or that is
or are to be split up, combined or exchanged and, in the case of registration of
transfer, shall provide a signature guarantee. Thereupon, the ADS Rights Agent
shall countersign and deliver to the person entitled thereto an ADS Rights
Certificate or ADS Rights Certificates, as the case may be, as so requested. The
Company and the Rights Agent may require payment, by the Holder requesting a
registration of transfer of ADS Rights or a split-up, combination or exchange of
an ADS Rights Certificate, of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with such registration of transfer,
split-up, combination or exchange, together with reimbursement to the Company
and the Rights Agent of all reasonable expenses incidental thereto.
7. Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
an ADS Rights Certificate, and, in case of loss, theft or destruction, of
indemnity or security in customary form and amount, and reimbursement to the
Company and the Rights Agent of all reasonable expenses incidental thereto, and
upon surrender to the Rights Agent and cancellation of the ADS Rights
Certificate if mutilated, the Rights Agent shall, on behalf of the Company,
countersign and deliver a new ADS Rights Certificate of like tenor to the Holder
in lieu of the ADS Rights Certificate so lost, stolen, destroyed or mutilated.
ARTICLE IV. - ACCEPTANCE OF SUBSCRIPTIONS
1. The Rights Agent is hereby authorized and directed to receive
subscriptions for ADSs on behalf of the Company throughout the Subscription
Period and to receive ADS Rights Certificates until 5:00 p.m. (New York City
time) on the Expiration Date. Any funds that the Rights Agent receives during
the Subscription Period from ADS Holders in respect of payments for ADSs shall
be deposited in a non-interest bearing account at the Rights Agent that the
Rights Agent designates solely for such purpose (the "Deposit Account"). Such
funds shall remain in the Deposit Account until they are distributed to the
Company in accordance with Article VI hereof.
2. As promptly as practicable after the Rights Agent receives each
ADS Rights Certificate, the Rights Agent shall determine whether the Holder
sending such ADS Rights Certificate has properly completed and executed such ADS
Rights Certificate and has submitted the correct payment for the ADSs. If such
ADS Rights Certificate is not properly completed, is unexecuted or if such
Holder did not send the correct payment amount, then the Rights Agent will send
a notice to such Holder instructing such Holder to amend its ADS Rights
Certificate or submit the proper payment amount, as the case may be. Except as
set forth below in this Article IV, if such
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Holder does not amend its ADS Rights Certificate or submit the proper payment
amount, as the case may be, by the Expiration Date, such Holder's right to
purchase ADSs in the Rights Offer shall be deemed to be unexercised.
3. Notwithstanding the foregoing, without further authorization from
the Company, except where otherwise specified or as otherwise notified in
writing by the Company prior to the Expiration Date, an ADS Rights Certificate
shall be deemed to be properly completed in any of the following circumstances:
(a) any subscription with respect to which a Holder has failed to
execute an ADS Rights Certificate in the manner provided by the terms
thereof, provided that (1) the Holder has indicated on such ADS Rights
Certificate or by written communication the manner in which the Holder
wishes to subscribe and (2) proper payment has been made by such Holder;
(b) any subscription by an individual (and not by a corporation,
partnership or fiduciary) which is accompanied by a check drawn by an
individual (and not by a corporation, partnership or fiduciary) other than
the Holder, provided that (1) the ADS Rights Certificate submitted
therewith has been duly executed by the Holder, (2) the check tendered in
payment of such subscription is drawn for the proper amount and to the
order of The Bank of New York and is otherwise in order, and (3) there is
no evidence actually known to the Rights Agent indicating that such check
was delivered to the Holder by the drawer thereof for any purpose other
than the payment of the accompanying subscription;
(c) any subscription by a custodian on behalf of a minor which is
accompanied by a check drawn by an individual (and not by a corporation,
partnership or fiduciary) other than the Holder, if the provisos set forth
in clause (b) above are satisfied; or
(d) any subscription by an individual (and not by a corporation,
partnership or fiduciary) which is accompanied by a check drawn by a
corporation, partnership or fiduciary other than the Holder, if the
provisos set forth in clause (b) above are satisfied.
4. The Rights Agent is authorized to waive proof of authority to
sign (including the right to waive signatures of co-fiduciaries and proof of
appointment or authority of any fiduciary or other person acting in a
representative capacity) in connection with any subscription with respect to
which:
(a) the ADSs to which the ADS Rights Certificate relates are
registered in the name of an executor, administrator, trustee, custodian
for a minor or other fiduciary and the ADS Rights Certificate has been
executed by such
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Holder, provided that the ADSs purchased are to be issued in the name of
such Holder in that same capacity;
(b) the ADSs to which the ADS Rights Certificate relates are
registered in the name of a corporation and the ADS Rights Certificate has
been executed by an officer of such corporation, provided that the ADSs
purchased are to be issued in the name of such corporation;
(c) the ADS Rights Certificate has been executed by a bank, trust
company or broker as agent for the Holder, provided that the ADSs
purchased are to be issued in the name of such Holder; or
(d) the ADS Rights to which such ADS Rights Certificate relates are
registered in the name of a decedent and the ADS Rights Certificate has
been executed by a person who purports to act as the executor or
administrator of such decedent's estate, provided that (1) the ADSs are to
be issued in the name of such person as executor or administrator of such
decedent's estate, (2) the check tendered in payment of such subscription
is drawn for the proper amount and to the order of The Bank of New York
and is otherwise in order, and (3) there is no evidence actually known to
the Rights Agent indicating that such person is not the duly authorized
representative which such person purports to be.
5. ADS Holders will only receive a whole number of ADS Rights. The
Rights Agent will aggregate and arrange for the sale of any fractional ADS
Rights (or the underlying Share right), and will distribute the net proceeds, if
any, of such sale pro rata to the ADS Holders entitled to them.
ARTICLE V. - REPORTS BY THE RIGHTS AGENT
1. The Rights Agent will advise the Company by facsimile
transmission (i) on the Commencement Date as to the total number of ADS Holders
and the total number of ADSs outstanding; and (ii) on a daily basis during the
Subscription Period as to (1) the total number of subscriptions for ADSs
pursuant to the Rights Offer that the Rights Agent has received (which have been
properly completed and executed and for which the correct payment amount was
received), and (2) the aggregate amount of funds received by the Rights Agent in
payment of such subscriptions.
2. Not later than 7:00 p.m. (New York City time) on the Expiration
Date, the Rights Agent will advise the Company by facsimile transmission as to
(i) the total number of ADSs subscribed for in the Rights Offer and the total
number of Shares represented thereby, (ii) the total number of additional ADSs
to be subscribed for following any reoffering and the total number of Shares
represented thereby, and (iii) the
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aggregate amount of funds received by the Rights Agent in payment of such
subscriptions.
ARTICLE VI. - PAYMENTS; REFUNDS; DEDUCTIONS; INTEREST ON SUBSCRIPTION PAYMENTS
1. (a) Promptly after the Expiration Date and prior to the
expiration of the subscription period in connection with the Share Rights
Offering, the Rights Agent shall instruct the Depositary to (i) exercise the
Share rights underlying the ADS Rights in respect of which the Rights Agent has
received a properly completed and executed ADS Rights Certificate and correct
payment (except as otherwise set forth in Article IV) and (ii) upon receipt by
Banco Itau S.A., as custodian under the Deposit Agreement (the "Custodian"), of
the Shares delivered upon exercise of those Share rights, deliver the ADSs
issuable in respect of those Shares to the Rights Agent. The Rights Agent shall
deliver those ADSs to the Holders entitled to them as promptly as practical. The
Rights Agent shall purchase, at any commercially reasonable rate on or about
, 2005, reais sufficient to exercise the amount of Share rights specified in
clause (i) above and to pay the Brazilian financial transaction taxes, if any,
applicable to that exercise and pay that amount of reais to the Company through
the Custodian on or about , 2005.
(b) The Company shall notify the Rights Agent if and when unsubscribed Shares
are allocated to the Depositary in respect of subscriptions received by the
Rights Agent from Holders in excess of the amount of Shares represented by ADSs
to which the ADS Rights relate and the amount of Shares so allocated. To the
extent the Rights Agent has received properly executed subscriptions for ADSs to
represent unsubscribed Shares and correct payment for those ADSs, the Rights
Agent shall (i) no later than the deadline to subscribe for unsubscribed shares
in the applicable reoffering round, instruct the Depositary to exercise the
right to purchase such number of unsubscribed Shares as is equal to the lesser
of (A) the number of unsubscribed Shares allocated to the Depositary and (B) the
total number of unsubscribed Shares represented by ADSs for which Holders have
properly subscribed and have made correct payment to the Rights Agent, (ii) as
promptly as practical after the receipt of notice under the preceding sentence
(and, in any event, in sufficient time to enable the Depositary to subscribe for
unsubscribed shares in the applicable reoffering round prior to the deadline
therefor), purchase, at any commercially reasonable rate, reais sufficient to
purchase the number of Shares determined pursuant to clause (i) and to pay the
Brazilian financial transaction taxes applicable to that purchase and pay that
amount of reais to the Company through the Custodian and (iii) instruct the
Depositary, as promptly as practical upon receipt by the Custodian of Shares, to
deliver the ADSs issuable in respect of those Shares to the Rights Agent. Each
Holder that has properly subscribed for ADSs representing any such unsubscribed
Shares and has made correct payment therefor shall be entitled to receive its
pro rata portion of the ADSs delivered pursuant to the preceding sentence, pro
rata based on relationship that the number of additional ADSs for which such
Holder has subscribed bears to the total
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additional ADSs representing unsubscribed Shares allocated to the Depositary.
The Rights Agent shall perform such pro rata calculation with respect to each
applicable Holder and shall deliver such ADSs to the Holders entitled thereto as
promptly as practical. If the number of additional ADSs representing
unsubscribed Shares available in the final reoffering round of such unsubscribed
Shares is insufficient to satisfy the additional subscription of any Holder in
full, the Subscription Price relating to any additional ADSs not delivered to
such Holder shall be returned to such Holder in U.S. dollars without interest.
2. In connection with each exchange rate conversion and payment of
the subscription price for any new ADS to the Company, the Rights Agent shall
deduct from the applicable Holder's subscription payment the ADR issuance fees
payable to the Depositary pursuant to the Deposit Agreement, currency conversion
expenses and any financial transaction taxes payable to the Brazilian government
in respect of such subscription. The Rights Agent shall instruct the Custodian
to pay those financial transaction taxes to the Brazilian government.
3. If a Holder's subscription payment is insufficient to pay the
amount of the subscription price in reais plus ADS issuance fees, currency
conversion expenses and financial transaction taxes in respect of new ADSs
subscribed for and allocated, the Rights Agent shall advance the deficiency on
behalf of such Holder to the extent the deficiency does not exceed 20% of such
Holder's payment. The Rights Agent shall not be required to deliver new ADSs to
any Holder until it has received from such Holder payment of any deficiency
advanced by the Rights Agent. If the Holder does not pay the amount of the
deficiency financed by the Rights Agent by , 2005, the Rights Agent may sell
enough of the Holder's new ADSs to cover the amount of the deficiency. In such
event, the Rights Agent shall send the Holder promptly a new ADR representing
the remaining new ADSs and a check in the amount of any excess proceeds, net of
ADS issuance fees, currency conversion expenses, financial transaction taxes and
the commissions on the sale. If, however, the amount of excess proceeds from the
sale of the Holder's new ADSs, after deductions for ADS issuance fees, currency
conversion expenses, financial transaction taxes and the commissions on the sale
is less than U.S.$5.00, the Rights Agent shall aggregate it and pay it to the
Company.
4. If, and to the extent that, the amount of any deficiency exceeds
20% of the amount of a Holders' payment, the Rights Agent (i) shall not be
required to advance the amount of that deficiency and (ii) may reduce the amount
of each Holder's subscription for new ADSs pro rata, unless the Holder delivers
to the Rights Agent sufficient funds to cover the deficiency prior to the
relevant deadlines for subscription in the Share Rights Offering.
5. As soon as practicable following the expiration of the Share
Rights Offering and the closing date following the last reoffering or public
auction at the Sao
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Paulo Stock Exchange of remaining unsubscribed Shares, if applicable, the
Company shall deposit the Shares underlying the ADSs with the Custodian.
6. If for any reason the Company instructs the Rights Agent in
writing that the Share Rights Offering will not proceed, the Rights Agent shall
refund the Subscription Price paid in U.S. dollars, without interest and net of
financial transaction taxes and currency conversion expenses, to the subscribing
Holders entitled thereto.
ARTICLE VII. - ISSUANCE OF ADRS
1. The Rights Agent shall instruct the Depositary to execute and
deliver ADRs evidencing new ADSs purchased pursuant to the Rights Offer as soon
as practicable after receipt of the underlying Shares by the Custodian.
Following receipt from the Depositary of the ADSs properly purchased pursuant to
the Rights Offer, the Rights Agent will mail or deliver, including by book-entry
transfer, to each Holder that subscribed for new ADSs in the Rights Offer, the
number of ADSs for which such Holder has subscribed and purchased as instructed
by that Holder.
2. For those Holders for which ADRs will be mailed, as instructed by
such Holder, the Rights Agent will mail the ADRs by first class mail under a
blanket surety bond protecting the Rights Agent and the Company from any loss or
liability arising out of the nonreceipt or nondelivery of any such ADR or the
replacement thereof. If the market value of ADRs to be mailed in any one
shipment will exceed U.S.$1,000,000, such shipment will be sent by registered
mail and will be insured separately for the replacement value of its contents.
ARTICLE VIII. - LIMITATIONS OF DUTIES
1. The Rights Agent shall have no duties or obligations other than
those specifically set forth herein, including any duties or obligations under
any other agreement, and no implied duties or obligations shall be read into
this Agreement against the Rights Agent.
2. The Rights Agent makes no, and will not be deemed to have made,
representations with respect to, and shall have no duties, responsibilities or
obligations with respect to determining, the validity, sufficiency, value or
genuineness of any Shares, ADS Rights Certificate or other documents deposited
with or delivered to it or any signature or endorsement set forth on or in
connection with such documents (except to the limited extent expressly set forth
in Article IV).
3. The Rights Agent shall not be obligated to commence or
voluntarily participate in any suit, action or proceeding arising out of or
related to this Agreement.
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4. The Rights Agent shall not be liable or responsible for any of
the statements of fact or recitals contained in this Agreement, any other Rights
Offer Materials, or any other document or security delivered to it in connection
with this Agreement, and shall not be required to, and shall not, verify or
determine the correctness, validity or accurateness of any such statements or
recitals contained therein.
5. The Rights Agent may rely upon and comply with, and shall incur
no liability and shall be fully indemnified and held harmless for relying upon
and complying with the Rights Offer Material, or other certificate, instrument,
opinion of counsel, notice, letter, telegram, records, or other document or
security delivered to it in connection with this Agreement and believed by it in
good faith to be genuine and to have been signed or presented by the proper
party or parties.
6. The Rights Agent may consult with legal counsel for the Company
or its own counsel (which may be in-house counsel) and rely upon any opinion of
such counsel, and shall have no liability in respect of any action taken,
omitted or suffered by the Rights Agent hereunder in reliance upon, and in
accordance with, any such opinion.
7. The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Company, and to apply to the Company for advice or instructions in connection
with its duties, and it shall not be liable for any action taken or suffered to
be taken by it in good faith in accordance with instructions of any such officer
or for any delay in acting while waiting for those instructions. Any application
by the Rights Agent for written instructions from the Company may, at the option
of the Rights Agent, set forth in writing any action proposed to be taken or
omitted by the Rights Agent under this Agreement and the date on or after which
such action shall be taken or such omission shall be effective. The Rights Agent
shall not be liable for any action taken by, or omission of, the Rights Agent in
accordance with a proposal included in such application on or after the date
specified in such application (which date shall not be less than five business
days after the date the Company actually receives such application, unless the
Company shall have consented in writing to any earlier date) unless prior to
taking any such action (or the effective date in the case of an omission), the
Rights Agent shall have received written instructions in response to such
application specifying the action to be taken or omitted.
8. The Rights Agent may perform any duties hereunder either directly
or by or through its nominees, correspondents, designees, agents, subagents or
subcustodians and shall not be responsible for any misconduct or negligence on
the part of any nominee, correspondent, designee, agent, subagent or
subcustodian appointed with due care by it hereunder.
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ARTICLE IX. - COMPENSATION; PAYMENT OF EXPENSES
1. In consideration for the services rendered herein, the Company
shall compensate the Rights Agent in accordance with and pursuant to the written
fee schedule separately agreed to by the Rights Agent and the Company, plus the
Rights Agent's reasonable and necessary disbursements, charges, out-of-pocket
expenses and counsel fees and expenses incurred in connection with the
preparation and execution of this Agreement and the services rendered by the
Rights Agent hereunder.
2. Except to the limited extent expressly set forth in Article IV,
paragraph 3, no provision of this Agreement shall require the Rights Agent to
expend or risk the Rights Agent's own funds or otherwise incur any financial
liability in the performance of any of the Rights Agent's duties hereunder or in
the exercise of the Rights Agent's rights.
ARTICLE X. - TERMINATION OF AGENCY
1. Unless terminated earlier by the parties hereto, this Agreement
shall terminate 90 days after the Expiration Date (the "Termination Date"). On
the business day following the Termination Date, the Rights Agent shall deliver
to the Company any Rights Offer entitlements, if any, held by the Rights Agent
under this Agreement. The Rights Agent's right to be reimbursed for fees,
charges and out-of-pocket expenses as provided in Article IX paragraph 1 above
and the indemnification provisions of Article XI below shall survive the
termination of this Agreement.
ARTICLE XI. - LIMITATION OF LIABILITY; INDEMNIFICATION
1. The Rights Agent shall not be liable for any Losses (as defined
below) or action taken or omitted or for any loss or injury resulting from its
actions or performance or lack of performance of its duties hereunder in the
absence of gross negligence or willful misconduct on its part. In no event shall
the Rights Agent be liable for (i) acting in accordance with the instructions
from the Company or its counsel or any agent appointed by the Company to act on
behalf of the Company, (ii) special, consequential or punitive damages, for lost
profits or for loss of business or (iii) any Losses due to forces beyond the
control of the Rights Agent, including without limitation, strikes, work
stoppages, acts of war or terrorism, insurrection, revolution, nuclear or
natural catastrophes or acts of God, and interruptions, loss or malfunctions of
utilities, communications or computer (software and hardware) services.
2. The Company shall be liable for and shall indemnify and hold
harmless the Rights Agent from and against any and all claims, losses,
liabilities, damages, expenses or judgments (including reasonable attorney's
fees and expenses) (collectively referred to herein as "Losses") howsoever
arising from or in connection with this Agreement or the performance of the
Rights Agent's duties hereunder, the
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enforcement of this Agreement and disputes between the parties hereto; provided,
however, that nothing contained herein shall require that the Rights Agent be
indemnified for the Losses arising from its gross negligence or willful
misconduct.
ARTICLE XII. - MISCELLANEOUS
1. NOTICES. All reports, notices and other communications required
or permitted to be given hereunder shall be addressed to the following on behalf
of the respective parties hereto and delivered by hand, by courier or by
first-class mail, postage prepaid, or by telecopy promptly confirmed in writing,
as follows or to such other address as may be specified in writing from time to
time:
To the Company:
Embratel Participacoes X.X.
Xxx Xxxxxxx Xxxxx, 000, Xxxx 1687-B
00000-000 Xxx xx Xxxxxxx - XX, Xxxxxx
Attn: General Counsel
Tel: (5521) 0000-0000
To the Rights Agent:
The Bank of New York
Reorganization Administration
000 Xxxxxxx Xxxxxx, 00-X
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
2. CONFIDENTIALITY. All information as to the Rights Offer shall be
held by the Rights Agent and its offices, employees, representatives and agents
in strict confidence and shall be disclosed only as required by law, regulation
or any judicial, regulatory or administrative authority, including, for the
avoidance of doubt, any banking or regulatory agency with jurisdiction over the
Rights Agent.
3. ASSIGNMENT. Neither the Rights Agent nor the Company shall assign
this Agreement without first obtaining the written consent of the other party
hereto.
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4. HEADINGS. The Article and Paragraph headings contained herein are
for convenience and reference only and are not intended to define or limit the
scope of any provision of this Agreement.
5. ENTIRE AGREEMENT; AMENDMENT. This Agreement shall constitute the
entire agreement of the parties with respect to the subject matter and
supersedes all prior oral or written agreements in regard thereto. References to
any other document or agreement shall not incorporate by reference such other
document or agreement into this Agreement and shall not impose any duties or
responsibilities, obligations or liabilities on the Rights Agent under such
other document or agreement. Except as otherwise specifically provided herein,
this Agreement may be amended only by an instrument in writing duly executed by
both parties hereto.
6. GOVERNING LAW; JURISDICTION; CERTAIN WAIVERS. (a) This Agreement
shall be interpreted and construed in accordance with the laws of the State of
New York. All actions and proceedings brought by the Rights Agent relating to or
arising from, directly or indirectly, this Agreement shall be litigated in
courts located within the State of New York. The Company hereby submits to the
personal jurisdiction of such courts and consents that any service of process
may be made by certified or registered mail, return receipt requested, directed
to the Company at its address last specified for notices hereunder. Each of the
parties hereto hereby waives the right to a trial by jury in any action or
proceeding arising out of or relating to this Agreement.
(b) The invalidity, illegality or unenforceability of any provision
of this Agreement shall in no way affect the validity, legality or
enforceability of any other provision; and if any provision is held to be
unenforceable as a matter of law, the other provisions shall not be
affected thereby and shall remain in full force and effect.
7. RIGHTS AND REMEDIES. The rights and remedies conferred upon the
parties hereto shall be cumulative, and the exercise or waiver of any such right
or remedy shall not preclude or inhibit the exercise of any additional rights or
remedies. The waiver of any right or remedy hereunder shall not preclude or
inhibit the subsequent exercise of such right or remedy.
8. REPRESENTATIONS AND WARRANTIES. The Company hereby represents,
warrants and covenants that:
(a) The Company is a corporation duly organized and validly existing
under the laws of the Republic of Brazil.
(b) This Agreement has been duly authorized, executed and delivered
on its behalf and constitutes the legal, valid and binding obligation of
the Company. The execution, delivery and performance of this Agreement by
the
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Company does not and will not violate any applicable law or regulation and
does not require the consent of any governmental or other regulatory body
except for such consents and approvals as have been obtained and are in
full force and effect. For the avoidance of doubt, all Shares and ADSs to
be issued and delivered hereunder have been registered with the Securities
and Exchange Commission, and the sale by the Company of the Shares and
ADSs in the Rights Offer is in compliance with, and not in violation of,
the Securities Act of 1933, as amended, and the Securities Exchange Act of
1934, as amended.
9. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10. NO THIRD PARTY BENEFICIARIES. This Agreement is for the
exclusive benefit of the parties hereto and shall not be deemed to give any
legal or equitable right, remedy or claim whatsoever to any other person.
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IN WITNESS WHEREOF, EMBRATEL PARTICIPACOES S.A. and THE BANK OF NEW
YORK have duly executed this agreement as of the day and year first set forth
above.
EMBRATEL PARTICIPACOES S.A.
By:____________________________
Name:
Title:
THE BANK OF NEW YORK,
as Rights Agent
By:____________________________
Name:
Title:
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EXHIBIT A
EMBRATEL PARTICIPACOES S.A.
FORM OF ADS RIGHTS CERTIFICATE
NOT EXERCISABLE AFTER __________, 2005
This certifies that the person whose name and address appears below, or
registered assigns, is the registered owner of the number of ADS Rights set
forth below. Each ADS Right entitles its registered holder to purchase from
Embratel Participacoes S.A. (the "Company") at any time prior to 5:00 P.M. (New
York City time) on _________, 2005, at the designated office of The Bank of New
York, as rights agent (the "Rights Agent") set forth below, one American
depositary share of the Company (each, an "ADS"), each ADS representing 5,000
preferred shares of the Company (each, a "Share"), at an estimated subscription
price of U.S.$______ per ADS (the "Deposit Amount"), which is the ADS
subscription price translated into U.S. dollars at the Central Bank of Brazil's
commercial selling rate of R$________ = U.S.$1.00 on ________, 2005, plus an
additional 7%, which represents an allowance for potential fluctuations in the
exchange rate between the Brazilian real and the U.S. dollar, the payment of ADS
issuance fees of the depositary, currency conversion expenses and financial
transaction taxes in Brazil. ADS Rights may be exercised by presenting this ADS
Rights certificate to the Rights Agent with the Form of Election to Purchase
duly executed, and in the case of a transfer, a signature guarantee, and such
other and further documentation as the Rights Agent may reasonably request.
Payment of ADS subscription price must be in U.S. dollars. Payment may be made
by certified bank check or money order payable to the order of the Rights Agent.
This ADS Rights Certificate is subject to all of the terms, provisions and
conditions of the Company rights offer, as described in the Company's Prospectus
dated on or about _________, 2005.
This ADS Rights Certificate, with or without other ADS Rights
Certificates, upon surrender at the designated office of the Rights Agent, may
be exchanged for another ADS Rights Certificate or ADS Rights Certificates
evidencing the same number of ADS Rights as the ADS Rights Certificate or ADS
Rights Certificates surrendered. A transfer of the ADSs Rights evidenced hereby
may be registered under surrender of this ADSs Rights Certificate at the
designated office of the Rights Agent by the registered holder in person or by a
duly authorized attorney, properly endorsed or accompanied by proper instruments
of transfer, and duly stamped as may be required by the laws of the State of New
York and of the United States of America.
This ADS Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by an authorized signatory of the
Rights Agent.
WITNESS the facsimile signature of a proper officer of the Company.
EMBRATEL PARTICIPACOES S.A.
By:___________________________________
Name:
Title:
Dated:
Countersigned:
THE BANK OF NEW YORK,
as Rights Agent
By:___________________________________
Authorized Signatory
PLEASE DETACH HERE
--------------------------------------------------------------------------------
Certificate No.:_________ Number of ADS Rights:__________
ADS RIGHTS CUSIP: ________
EMBRATEL PARTICIPACOES S.A.
THIS ADS RIGHTS CERTIFICATE MUST BE RECEIVED BY THE RIGHTS AGENT, TOGETHER
WITH PAYMENT IN FULL, BY 5:00 P.M., NEW YORK CITY TIME, ON __________, 2005.
FAILURE TO SUBMIT THIS ADS RIGHTS CERTIFICATE TO THE RIGHTS AGENT BY THAT TIME
WILL RESULT IN A FORFEITURE OF YOUR ADS RIGHTS. ANY SUBSCRIPTION FOR ADSS IN
THIS RIGHTS OFFERING IS IRREVOCABLE.
COMPLETE THE ELECTION TO PURCHASE FORM OR THE ASSIGNMENT FORM ON THE
REVERSE OF THIS CARD, AS APPLICABLE. ANY IMPROPERLY COMPLETED OR UNEXECUTED
RIGHTS CERTIFICATE FOR NEW ADSS MAY CAUSE THE RIGHTS AGENT IN ITS SOLE
DISCRETION TO REJECT SUCH RIGHTS CERTIFICATE. IF YOU HAVE ANY QUESTIONS, CONTACT
THE RIGHTS AGENT AT 000-000-0000.
[Name & Address of Holder] THE BANK OF NEW YORK
Rights Agent
By mail:
Tender and Exchange Department
P.O. Box 11248
Church Street Station
New York, New York 10286-1248
By hand or overnight courier:
Tender and Exchange Department
000 Xxxxxxx Xxxxxx, x-X
Xxx Xxxx, Xxx Xxxx 00000
FORM OF ELECTION TO PURCHASE
THE REGISTERED HOLDER OF THIS ADS RIGHTS CERTIFICATE IS ENTITLED TO EXERCISE THE
NUMBER OF ADS RIGHTS SHOWN IN THE UPPER RIGHT HAND CORNER OF THE OTHER SIDE OF
THIS CARD AND MAY SUBSCRIBE FOR ADDITIONAL ADSS UPON THE TERMS AND CONDITIONS
SPECIFIED IN THE PROSPECTUS.
The undersigned hereby notifies the Rights Agent of its irrevocable election to
subscribe for new ADSs in the following amounts:
1. ___________ new ADSs to be purchased pursuant to exercise of ADS Rights.
2. ___________ additional new ADSs to be subscribed for following the reoffering
of unsubscribed Shares, including subsequent reofferings, as described in the
Prospectus.
This subscription is subject to the terms and conditions specified in the
Prospectus. I hereby acknowledge receipt of the Prospectus.
Signature of subscriber: _______________________________________
Dated: _________________, 2005
(JOINT OWNERS SHOULD EACH SIGN. IF SIGNING AS EXECUTOR, ADMINISTRATOR, ATTORNEY,
TRUSTEE OR GUARDIAN, GIVE YOUR TITLE AS SUCH. IF A CORPORATION, SIGN IN THE FULL
CORPORATE NAME BY AN AUTHORIZED OFFICER. IF A PARTNERSHIP, SIGN IN THE NAME OF
AN AUTHORIZED PERSON.)
TO BE EXECUTED ONLY BY NON-UNITED STATES RESIDENTS:
I hereby certify that the foregoing subscription for new ADSs has been effected
in accordance with the applicable laws of the jurisdiction in which I reside.
Signature of subscriber:________________________________________
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ASSIGNMENT FORM
(To be executed by the registered holder if such holder
desires to register a transfer of ADS Rights)
FOR VALUE RECEIVED, _____ hereby sells, assigns and transfers unto
Name:___________________________________________________________________________
Address:________________________________________________________________________
the ADS Rights evidenced hereby, and does hereby irrevocably constitute and
appoint
____________________________________________________________________________
attorney to transfer those ADS Rights on the books of the Company, with full
power of substitution in the premises.
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
Dated:______________________________, 2005
Signature:
Signature Guaranteed: ___________________________
NOTICE
The signature to the foregoing assignment must correspond to the name
as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
Signatures must be guaranteed by a financial institution that is a
participant in the Security Transfer Agents Medallion Program, the
Stock Exchange Medallion Program or the New York Stock Exchange Inc.
Medallion Signature Program.
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