1
EXHIBIT 10.1
================================================================================
COMMON AGREEMENT
dated as of
December 27, 1999
among
VESPER SAO PAULO S.A.,
VESPER HOLDING SAO PAULO S.A.,
VESPER SAO PAULO CAYMAN,
The Administrative Agents Party Hereto,
and
CITIBANK, N.A. and BANCO CITIBANK S.A.,
as Collateral and Intercreditor Agent
Confidential treatment requested. Confidential portions of this document have
been omitted and filed separately with the Securities and Exchange Commission.
================================================================================
[Reference No. 7725-052]
1
2
TABLE OF CONTENTS
Page
----
ARTICLE I
Definitions
SECTION 1.01. Defined Terms.....................................................................................1
SECTION 1.02. Classification of Loans and Borrowings............................................................37
SECTION 1.03. Terms Generally.................................................................................. 37
SECTION 1.04. Accounting Terms; GAAP............................................................................38
ARTICLE II
The Loans
SECTION 2.01. Accession of Additional Participating Credit Agreements...........................................38
SECTION 2.02. Termination, Increase and/or Reduction of Commitments.............................................38
SECTION 2.03. Prepayment of Loans...............................................................................40
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization; Powers..............................................................................45
SECTION 3.02. Authorization; Enforceability.....................................................................45
SECTION 3.03. Governmental Approvals; No Conflicts..............................................................45
SECTION 3.04. Financial Condition; No Material Adverse Change...................................................46
SECTION 3.05. Properties........................................................................................47
SECTION 3.06. Litigation and Environmental Matters..............................................................47
SECTION 3.07. Compliance with Laws and Agreements...............................................................48
SECTION 3.08. Investment and Holding Company Status.............................................................48
SECTION 3.09. Taxes.............................................................................................48
SECTION 3.10. Disclosure........................................................................................49
SECTION 3.11. Subsidiaries......................................................................................49
SECTION 3.12. Insurance.........................................................................................49
SECTION 3.13. Labor Matters.....................................................................................49
SECTION 3.14. Supply Contracts..................................................................................49
SECTION 3.15. Year 2000.........................................................................................50
SECTION 3.16. No Burdensome Restrictions........................................................................50
SECTION 3.17. No Sovereign Immunity Defense.....................................................................50
SECTION 3.18. Ownership of Holdings.............................................................................50
1
3
Contents, P.2
Page
----
SECTION 3.19. Project Documents, etc ...........................................................................50
SECTION 3.20. Withholding and Other Taxes.......................................................................51
SECTION 3.21. Ranking of Loans..................................................................................52
SECTION 3.22. Spectrum Clearance................................................................................52
SECTION 3.23. Service to 28 Additional Cities...................................................................52
SECTION 3.24. Security Documents................................................................................53
ARTICLE IV
Conditions
SECTION 4.01. Effective Date....................................................................................53
SECTION 4.02. Each Borrowing....................................................................................58
ARTICLE V
Affirmative Covenants
SECTION 5.01. Financial Statements and Other Information........................................................60
SECTION 5.02. Notices of Material Events........................................................................62
SECTION 5.03. Information Regarding Collateral..................................................................62
SECTION 5.04. Existence; Conduct of Business....................................................................63
SECTION 5.05. Payment of Taxes..................................................................................63
SECTION 5.06. Maintenance of Properties.........................................................................63
SECTION 5.07. Insurance.........................................................................................64
SECTION 5.08. Books and Records; Inspection Rights..............................................................66
SECTION 5.09. Compliance with Laws and Agreements; Maintenance and Enforcement of Project Documents.............66
SECTION 5.10. Use of Proceeds...................................................................................67
SECTION 5.11. Additional Subsidiaries...........................................................................68
SECTION 5.12. Collateral Further Assurances.....................................................................68
SECTION 5.13. Casualty and Condemnation.........................................................................70
SECTION 5.14. Interest Rate Protection..........................................................................70
SECTION 5.15. Year 2000.........................................................................................71
SECTION 5.16. Working Capital/CPE Facility; Additional Facility.................................................71
SECTION 5.17. The Project. .....................................................................................71
SECTION 5.18. Availability and Transfer of Foreign Currency.....................................................72
SECTION 5.19. Central Bank. ....................................................................................72
SECTION 5.20. Notarization, Consularization and Translation.....................................................73
SECTION 5.21. Financial Projections.............................................................................73
2
4
Contents, P.3
Page
----
ARTICLE VI
Negative Covenants
SECTION 6.01. Indebtedness; Preferred Stock; Senior Indebtedness................................................73
SECTION 6.02. Liens.............................................................................................76
SECTION 6.03. Fundamental Changes...............................................................................79
SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions; Asset Sales............................80
SECTION 6.05. Hedging Agreements................................................................................82
SECTION 6.06. Restricted Payments...............................................................................82
SECTION 6.07. Transactions with Affiliates......................................................................82
SECTION 6.08. Restrictive Agreements............................................................................83
SECTION 6.09. Repayment of Indebtedness.........................................................................83
SECTION 6.10. [Intentionally Omitted.]..........................................................................83
SECTION 6.11. Limitation on Sale-Leaseback Transactions.........................................................84
SECTION 6.12. Subsidiaries......................................................................................84
SECTION 6.13. Amendment of Material Documents...................................................................84
SECTION 6.14. Business of Holdings..............................................................................85
SECTION 6.15. Capital Expenditures..............................................................................85
SECTION 6.16. Total Indebtedness to Total Capitalization........................................................86
SECTION 6.17. Senior Indebtedness to Total Capitalization.......................................................86
SECTION 6.18. Senior Indebtedness to Annualized EBITDA..........................................................87
SECTION 6.19. Total Indebtedness to Annualized EBITDA...........................................................90
SECTION 6.20. Minimum Fixed Charge Coverage Ratio...............................................................91
SECTION 6.21. Minimum Annualized EBITDA to Annualized Net Interest Expense......................................92
SECTION 6.22. Minimum EBITDA....................................................................................93
SECTION 6.23. Minimum Consolidated Revenue......................................................................94
SECTION 6.24. Minimum Total Subscribers.........................................................................95
ARTICLE VII
Events of Default
SECTION 7.01. Events of Default.................................................................................97
SECTION 7.02. Remedy Requirements for Financial Covenants.......................................................103
SECTION 7.03. Remedy Requirements for Certain Shareholder Defaults..............................................104
ARTICLE VIII
Miscellaneous
SECTION 8.01. Notices...........................................................................................105
3
5
Contents, P.4
Page
----
SECTION 8.02. Waivers; Amendments...............................................................................105
SECTION 8.03. Expenses; Indemnity; Damage Waiver................................................................105
SECTION 8.04. Successors and Assigns............................................................................107
SECTION 8.05. Survival..........................................................................................107
SECTION 8.06. Counterparts; Integration; Effectiveness..........................................................108
SECTION 8.07. Severability......................................................................................108
SECTION 8.08. Right of Setoff...................................................................................108
SECTION 8.09. Governing Law; Jurisdiction; Consent to Service of Process........................................109
SECTION 8.10. WAIVERS. .........................................................................................110
SECTION 8.11. Headings..........................................................................................110
SECTION 8.12. Confidentiality...................................................................................111
SCHEDULES:
Schedule 1.01(a) -- Exchange Rates
Schedule 1.01(b) -- Intercompany Agreements
Schedule 1.01(c) -- Mortgaged Properties
Schedule 1.01(d) -- Project Documents
Schedule 3.03 -- Governmental Approvals
Schedule 3.05 -- Real Property
Schedule 3.06 -- Disclosed Matters
Schedule 3.11 -- Subsidiaries
Schedule 3.12 -- Existing Insurance
Schedule 3.18 -- Ownership of Holdings
Schedule 4.01 -- Waivers
Schedule 5.01(c) -- Form of Monthly Report
Schedule 6.02 -- Existing Liens
Schedule 6.04 -- Real Property Disposals
Schedule 6.08 -- Existing Restrictions
EXHIBITS:
Exhibit A -- Form of Collateral Agency and Intercreditor
Agreement
Exhibit B -- Form of Indemnity, Subrogation and
Contribution Agreement
Exhibit C -- Form of Parent Guarantee Agreement
Exhibit D -- Form of Perfection Certificate
Exhibit E -- Form of Pledge Agreement
Exhibit F -- Intentionally Omitted
Exhibit G -- Form of Sponsor Support Agreement
Exhibit H -- Form of Subordination Agreement
Exhibit I -- Form of Subsidiary Guarantee Agreement
Exhibit J -- Form of Opinion of Counsel
4
6
COMMON AGREEMENT dated as of December 27, 1999, among
VESPER SAO PAULO S.A., a Brazilian sociedade por acoes, VESPER
HOLDING SAO PAULO S.A., a Brazilian sociedade por acoes,
VESPER SAO PAULO CAYMAN, a Cayman Islands company, the
ADMINISTRATIVE AGENTS party hereto, BANCO CITIBANK S.A., a
Brazilian sociedade por acoes, as Collateral and Intercreditor
Agent and CITIBANK, N.A., a national banking association duly
organized and validly existing under the laws of the United
States of America, as Collateral and Intercreditor Agent.
Vesper (such term, and each other capitalized term used in
this preliminary statement, having the meaning assigned to it in Section 1.01 of
this Agreement) desires to install and operate the Project and is entering into
the Supply Contracts in order to obtain equipment and services necessary for the
Project. In order to obtain financing for the Project, Holdings, Vesper and its
Subsidiary, the Borrower, are entering into the Initial Participating Credit
Agreement. The parties to the Initial Participating Credit Agreement desire to
enter into this Agreement in order to provide for certain terms and conditions
that will be applicable to the Initial Participating Credit Agreement (as well
as Additional Participating Credit Agreements, as provided herein). Accordingly,
the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"Additional Facility" has the meaning assigned to such term in
Section 5.16.
"Additional Participating Credit Agreement" means any loan
agreement entered into by the Borrower for the sole purpose of borrowing loans
that will be used either (a) to refinance Loans then outstanding under the
Initial Participating Credit Agreement or (b) to replace Loans that would have
been borrowed under the Initial Participating Credit Agreement then in effect;
provided that:
(i) in the case of any such loan agreement providing for loans
that are to be borrowed for the purpose set forth
1
7
in clause (a) above, at the time such loans are borrowed the proceeds
thereof are applied to prepay Loans then outstan ding under the Initial
Participating Credit Agreement in accordance with Section 2.03;
(ii) in the case of any such loan agreement providing for
loans that are to be borrowed for the purpose set forth in clause (b)
above, at the time that the lending commitments under such loan
agreement become effective the Borrower shall reduce an equal amount of
the Commitments then in effect under the Initial Participating Credit
Agreement, pro rata unless otherwise approved by the Required Lenders;
(iii) unless otherwise approved by the Required Lenders, the
terms and conditions of, and documentation relating to, such loans
shall be the same as the terms and conditions of, and documentation
relating to, the Loans refinanced or replaced thereby;
(iv) the Administrative Agent under such loan agreement shall,
on behalf of the Lender Group thereunder, become a party to this
Agreement, the Collateral Agency Agreement and the Substitute Financing
Side Letter; and
(v) complete copies of such loan agreement and any related
agreements shall be delivered to all the Agents and Lenders under the
other Participating Credit Agreements.
"Additional Project" shall have the meaning given to such term
in the proviso to the definition of "Project".
"Administrative Agent" means (a) each Person that is serving
as administrative agent for, or similar representative for, a Lender Group under
a Participating Credit Agreement, in its capacity as such agent or
representative, or (b) in the case of any Participating Credit Agreement under
which there is only one Lender (and no such agent or representative), such
Lender.
"Affiliate" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified. Each
Sponsor, and each Affiliate of any Sponsor, shall be construed to be an
Affiliate of the Loan Parties. Notwithstanding the foregoing, an Affiliate of a
Sponsor (other than a Shareholder) that is not a subsidiary of a Sponsor and the
principal business or activities of which do not relate to the Project and that
does not hold direct or indirect investments in the Project shall not be
construed to be
2
8
an Affiliate of such Sponsor or of the Loan Parties for purposes of (a) the
definitions of "Collateral and Guarantee Requirement", "Intercompany Agreement",
"Material Adverse Effect", "Prepayment Event" and "Telecom Transferee" and (b)
Sections 3.02, 3.03, 3.19, 6.07(b) and 7.01; provided that this sentence shall
not prevent any Person from being construed to be an "Affiliate" of the Loan
Parties (as opposed to a Sponsor) if such Person would constitute an Affiliate
of the Loan Parties within the meaning of the first sentence of this definition
without regard to the second sentence of this definition.
"Agents" means the Administrative Agents and the Collateral
Agent.
"ANATEL" means Agencia Nacional de Telecomunicacoes.
"Annualized EBITDA" means, as of any date (a) Consolidated
EBITDA for the period of two consecutive fiscal quarters ended on such date (or,
if such date is not the last day of a fiscal quarter, then for the period of two
consecutive fiscal quarters most recently ended prior to such date), multiplied
by (b) two.
"Annualized Fixed Charges" means, as of any date (a)
Consolidated Fixed Charges for the period of two consecutive fiscal quarters
ended on such date (or, if such date is not the last day of a calendar quarter,
then for the period of two consecutive calendar quarters most recently ended
prior to such date), multiplied by (b) two.
"Annualized Net Interest Expense" means, as of any date (a)
Consolidated Net Interest Expense for the period of two consecutive fiscal
quarters ended on such date (or, if such date is not the last day of a calendar
quarter, then for the period of two consecutive calendar quarters most recently
ended prior to such date), multiplied by (b) two.
"Assignment of Credit Rights Agreement" means the Assignment
of Credit Rights Agreement, dated as of December 27, 1999, by and among
Holdings, Lucent, the Borrower and Vesper.
"Assignment of IBM Equipment Lease Agreement #1 Agreement"
means the Assignment of the IBM Equipment Lease Agreement #1 Agreement, dated as
of December 27, 1999, by and among Vesper, Holdings, the Borrower, Lucent and
the other Lenders.
"Assignment of IBM Equipment Lease Agreement #2 Agreement"
means the Assignment of the IBM Equipment Lease Agreement #2 Agreement, dated as
of December 27, 1999, by and among Vesper, Holdings, the Borrower, Lucent and
the other Lenders.
3
9
"Assignment of IBM Equipment Lease Agreement #3 Agreement"
means the Assignment of the IBM Equipment Lease Agreement #3 Agreement, dated as
of December 27, 1999, by and among Vesper, Holdings, the Borrower, Lucent and
the other Lenders.
"Assignment of IBM Equipment Lease Agreement #4 Agreement"
means the Assignment of the IBM Equipment Lease Agreement #4 Agreement, dated as
of December 27, 1999, by and among Vesper, Holdings, the Borrower, Lucent and
the other Lenders.
"Assignment of IBM Equipment Lease Agreement #5 Agreement"
means the Assignment of the IBM Equipment Lease Agreement #5 Agreement, dated as
of December 27, 1999, by and among Vesper, Holdings, the Borrower, Lucent and
the other Lenders.
"Assignment of Know How Agreement Agreement" means the
Assignment of the Know How Agreement, dated as of December 27, 1999, by and
among Vesper, Holdings, the Borrower and the Lenders.
"Assignment of Lucent Supply Contract Agreement" means the
assignment of the Lucent Supply Contract, dated as of December 27, 1999, by and
among Vesper, Holdings, the Borrower, Lucent and the other Lenders.
"Assignment of Secondment Agreement Agreement" means the
Assignment of the Secondment Agreement, dated as of December 27, 1999, by and
among Vesper, Holdings, the Borrower and the Lenders.
"Assignment of Technical Services Agreement Agreement" means
the Assignment of Technical Services Agreement, dated as of December 27, 1999,
by and among Vesper, Holdings, the Borrower and the other Lenders.
"Assignment of Telecom and Eletropaulo Rental Agreement" means
the Assignment of Telecom Eletropaulo Rental Agreement, dated as of December 27,
1999, by and among Vesper, Holdings, the Borrower, Lucent and the other Lenders.
"BCI" means Xxxx Canada International Inc.
4
10
"BNDES" means Banco Nacional de Desenvolvimento Economico e
Social.
"BNDES Financing" has the meaning assigned to such terms in
Section 6.01(c).
"Board" means the Board of Governors of the Federal Reserve
System of the United States of America.
"Borrower" means Vesper Sao Paulo Cayman, a Cayman Islands
company.
"Borrowing" means a Loan or group of Loans of the same Group,
Class and Type, made, converted or continued on the same date and, in the case
of LIBOR Loans (as defined in any Participating Credit Agreement), as to which a
single Interest Period (as defined in any Participating Credit Agreement) is in
effect.
"Borrowing Base" means, as of any date in relation to any
Participating Credit Agreement, the aggregate Purchase Price of Vendor
Manufactured Items related to such Participating Credit Agreement for which
binding purchase orders have been delivered, and which have been shipped, under
the related Supply Contract on or prior to such date.
"Borrowing Request" has the meaning assigned to such term in
each Participating Credit Agreement.
"Brazilian Security Documents" means the Share Pledge
Agreement, the Pledge Agreement, the Mortgages, the Assignment of Credit Rights
Agreement, the Voting Agreement, the Contract Assignment Agreements and each
security agreement or other instrument or document executed and delivered
pursuant to Section 5.11 or 5.12 or otherwise to secure any of the Obligations
in respect of collateral located in Brazil.
"Budget" means, with respect to any fiscal year, the budget of
Vesper and the Subsidiaries for such fiscal year on a monthly basis, a projected
budget of Vesper and the Subsidiaries for each of the next two succeeding fiscal
years on an annual basis, accompanied by a discussion and analysis in reasonable
detail, including as to any material assumptions underlying such budgets,
prepared by senior management of Vesper related to each such fiscal year.
"Business Day" means any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City or Sao Paulo, Brazil are
authorized or required by law to remain closed; provided that, when used in
connection with a LIBOR Loan
5
11
(as defined in any Participating Credit Agreement), the term "Business Day"
shall also exclude any day on which banks are not open for dealings in dollar
deposits in the London interbank market.
"Business Plan" means the plans for the development,
construction, installation and operation of the Initial Project as embodied in
the materials provided to Lucent by or on behalf of Vesper as contemplated by
the Financial Projections, and in accordance with the Mirror Authorization and
the other Project Documents as in effect on the Effective Date.
"Capital Contribution Agreement" means the Capital
Contribution Agreement dated as of December 27, 1999, between Vesper and the
Borrower.
"Capital Expenditures" means, for any period, (a) the
additions to property, plant and equipment and other capital expenditures of
Vesper and the Subsidiaries that are (or would be) set forth in a consolidated
statement of cash flows of Vesper for such period prepared in accordance with
GAAP and (b) Capital Lease Obligations incurred by Vesper and the Subsidiaries
during such period.
"Capitalized Borrowing" means any Borrowing of Loans under any
Participating Credit Agreement for the sole purpose of paying, and the proceeds
of which are applied solely to pay, any regularly scheduled payment of principal
in respect of any Loans payable under such Participating Credit Agreement,
accrued interest on any Loans thereunder or accrued commitment fees payable
thereunder.
"Capital Lease Obligations" of any Person means the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Cayman Security Documents" means the Note Pledge and Security
Agreement, the Cayman Share Pledge Agreement, and each other security agreement
or other instrument or document executed and delivered pursuant to Section 5.12
or otherwise to secure any of the Obligations in respect of Collateral located
in the Cayman Islands.
6
12
"Cayman Share Pledge Agreement" means the Share Pledge
Agreement dated December 27, 1999, between Vesper and the Collateral Agent.
"Central Bank" means Banco Central do Brasil.
"Change in Control" means (a) the acquisition of ownership,
beneficially or of record, by any Person other than Holdings and, with respect
to not more than a 0.1% holding of qualifying shares in compliance with
applicable law, one or more directors of Vesper, of any Equity Interest in
Vesper; (b) the acquisition of ownership, beneficially or of record, by any
Person other than Vesper of any Equity Interest in the Borrower; (c) the failure
by BCI to control, directly or indirectly (without granting to any other Person
any consent or approval rights or other negative controls over its right to
exercise such control), (x) Voting Shares (as defined in the Shareholders
Agreement) with at least [***] of the votes of all classes of Equity Interests
in Holdings and (y) the voting, management and designation rights normally
incident to such Voting Shares; (d) the failure by BCI to beneficially own,
directly or indirectly, Equity Interests in Holdings representing not less than
either (i) [***] of the economic interest in the outstanding capital stock of
Holdings or (ii) so long as BCI's ownership represents an investment of at least
[***] (ignoring, for purposes of such calculation, the exclusions referred to in
the definition of "Funded Equity"; assuming, for purposes of such calculation,
that the Devaluation Amount is zero; and excluding from such amount any
contribution or loan that BCI (or any Telecom Transferee) or BCI's (or such
Telecom Transferee's) related Shareholder shall have made pursuant to Section
7.03 to remedy thereunder any Event of Default of any Shareholder (x) so long as
any Person (including Holdings, BCI, a Telecom Transferee or BCI's or such
Telecom Transferee's related Shareholder) shall have the right to require such
defaulting Shareholder to remedy any Event of Default deemed remedied pursuant
to Section 7.03, (y) so long as such defaulting Shareholder shall have the right
to reimburse any Person for, or otherwise repay to any Person, any such
contribution or loan or (z) if and to the extent that any Person shall have been
reimbursed or otherwise repaid for any such contribution or loan) of Funded
Equity, [***] of the economic interest in the outstanding capital stock of
Holdings; (e) the failure by BCI to be the technical operator of Vesper pursuant
to the Technical Services Agreement, the Know-How Agreement and the Secondment
Agreement or, in the case of a Telecom Transferee, any agreement which is
substantially similar to any of the foregoing agreements and on terms and
conditions including in respect of scope of services provided and other
non-economic terms, no less favorable to Vesper and on economic terms that do
not materially
[*] Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted material
has been filed separately with the Securities and Exchange Commission.
7
13
adversely impact the rights or interests of the Lenders under the Loan
Documents; or (f) the failure of BCI to have the right to control the
appointment of the chief executive officer of Vesper; provided that the failure
of BCI to satisfy any of the conditions set forth in any of clauses (c) through
(f) (inclusive) of this definition shall not constitute a "Change in Control" if
all such conditions shall be satisfied by a single Telecom Transferee.
"Class", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are Tranche
A Loans, Tranche B Loans, Tranche C-1 Loans or Tranche C-2 Loans and, when used
in reference to any Commitment, refers to whether such Commitment is a Tranche A
Commitment, Tranche B Commitment, Tranche C-1 Commitment or Tranche C-2
Commitment.
"Collateral" means (a) any and all "Collateral" as defined in
any applicable Security Document and (b) any and all other assets of whatever
nature, tangible or intangible, now owned or existing or hereafter acquired or
arising in which the Collateral Agent or the Lenders have been granted a Lien or
security interest, or that have been assigned to the Collateral Agent or the
Lenders, pursuant to any of the Security Documents.
"Collateral Agency Agreement" means the Collateral Agency and
Intercreditor Agreement among Holdings, Vesper, the Borrower, the Collateral
Agent and the Administrative Agents, substantially in the form of Exhibit A.
"Collateral Agent" shall have the meaning assigned to such
term in the Collateral Agency Agreement.
"Collateral and Guarantee Requirement" means the requirement
that:
(a) the Collateral Agent shall have received (i) from
Holdings, a counterpart of the Parent Guarantee Agreement duly
executed and delivered on behalf of Holdings, (ii) from each
Subsidiary (other than the Borrower) either (A) a counterpart
of the Subsidiary Guarantee Agreement duly executed and
delivered on behalf of such Subsidiary or (B) in the case of
any Person that becomes a Subsidiary after the Effective Date,
either a supplement to the Subsidiary Guarantee Agreement, in
the form specified therein, or, where Vesper has no other
Subsidiaries except the Borrower, a counterpart of the
Subsidiary Guarantee Agreement, in each case duly executed and
delivered on behalf of such Subsidiary and (iii) from Vesper,
a counterpart of the Vesper Guarantee, duly executed and
delivered on behalf of Vesper;
8
14
(b) the Collateral Agent shall have received (i) from
each Loan Party and other Person that is a party thereto a
counterpart of the Share Pledge Agreement duly executed and
delivered on behalf of each such Loan Party or other Person
and (ii) from each Loan Party that is party thereto,
counterparts of each of the Brazilian Security Documents and
the Indemnity, Subrogation and Contribution Agreement duly
executed and delivered on behalf of each such Loan Party and
each other Person party thereto other than the Collateral
Agent;
(c) in the case of any Person that becomes a
Subsidiary after the Effective Date, the Collateral Agent
shall have received (i) with respect to the Indemnity,
Subrogation and Contribution Agreement, a supplement to such
agreement, in the form specified therein, duly executed and
delivered on behalf of such Subsidiary and (ii) all documents
reasonably requested by the Required Lenders or any Agent duly
executed and delivered on behalf of each such Subsidiary in
form and substance satisfactory to the Administrative Agents,
to create and perfect a first priority perfected security
interest in all of the assets of Vesper and of the
Subsidiaries;
(d) the Collateral Agent shall have received from
Vesper a counterpart of the Cayman Share Pledge Agreement duly
executed and delivered on behalf of Vesper;
(e) all outstanding Equity Interests of Vesper and
each Subsidiary owned by or on behalf of any Loan Party shall
have been pledged pursuant to (i) in the case of Vesper, the
Share Pledge Agreement, (ii) in the case of the Borrower, the
Cayman Share Pledge Agreement and (iii) in the case of any
Person that becomes a Subsidiary after the Effective Date,
such documents as reasonably requested by the Required Lenders
or any Administrative Agent, duly executed and delivered by
the applicable Loan Party or Parties, and in form and
substance satisfactory to the Agents to create a first
priority perfected security interest in the Equity Interests
of such Subsidiary and, in each case, the share pledges shall
have been perfected in accordance with Brazilian, Cayman
Islands or other applicable law, as applicable;
9
15
(f) all Primary Subordinated Obligations and other
Indebtedness of Vesper, the Borrower and each Subsidiary that
is owing to any Sponsor, Shareholder, Loan Party or Affiliate
of any Loan Party shall be evidenced by a promissory note and
shall have been pledged pursuant to the one or more pledge
agreements, duly executed and delivered on behalf of each
applicable Sponsor, Shareholder, Loan Party or Affiliate of
any Loan Party, as applicable, in form and substance
satisfactory to the Administrative Agents, and the Collateral
Agent shall have received all such promissory notes, together
with instruments of transfer with respect thereto endorsed in
blank or other actions required by applicable law to create a
perfected Lien thereon shall have been taken;
(g) all documents, instruments, registrations,
filings and annotations required by Brazilian, Cayman Islands
or other applicable law, as applicable, or reasonably
requested by any Agent or the Lenders to be filed, registered
or recorded to create the Liens intended to be created by the
Security Documents and to perfect such Liens to the extent
required by, and with the priority required by, the Security
Documents, shall have been filed, registered, recorded,
annotated or delivered to the Collateral Agent for filing,
registration, annotating or recording;
(h) the Collateral Agent shall have received
counterparts of a Mortgage with respect to each Mortgaged
Property that is owned or held in leasehold by any Loan Party
duly executed and delivered by the record owner or lease
holder of such Mortgaged Property, together with the "Certidao
Vintenaria com Negativa de Onus" with respect to such
Mortgaged Property issued by the appropriate real estate
registry and counterparts of an assignment agreement with
respect to the rights of any Loan Party under a lease that is
described in the second sentence of Section 5.12(d);
(i) the Collateral Agent shall have received from the
Borrower counterparts of the Note Pledge and Security
Agreement duly executed and delivered on behalf of the
Borrower;
10
16
(j) the Notes shall have been pledged pursuant to the
Note Pledge and Security Agreement and the Collateral Agent
shall have received all such Notes, together with instruments
of transfer with respect thereto endorsed in blank;
(k) each Loan Party shall have obtained all consents
and approvals required to be obtained by it in connection with
the execution and delivery of all Guarantee Agreements and
Security Documents to which it is a party, the performance of
its obligations thereunder and the granting by it of the Liens
under such Security Documents; provided, however, that, to the
extent that the consent of IBM is required to satisfy this
requirement in respect of any of the Assignment of IBM
Equipment Lease Agreement #1 Agreement, the Assignment of IBM
Equipment Lease Agreement #2 Agreement, the Assignment of IBM
Equipment Lease Agreement #3 Agreement, the Assignment of IBM
Equipment Lease Agreement #4 Agreement or the Assignment of
IBM Equipment Lease Agreement #5 Agreement, such requirement
shall be satisfied by the use by Vesper of its best efforts to
cause IBM to grant such consent; and
(l) each Loan Party shall have pledged or assigned to
the Collateral Agent or the Lenders any brokerage, deposit or
similar account maintained by such Loan Party and such Loan
Party shall have executed and delivered all documents,
instruments, registrations, filings and annotations reasonably
requested by the Collateral Agent to create, perfect or effect
such pledge or assignment.
"Commitment" means a Tranche A Commitment, Tranche B
Commitment, Tranche C Commitment, or any combination thereof (as the context
requires).
"Consolidated EBITDA" means, for any period, Consolidated Net
Income for such period (adjusted to exclude all extraordinary items), plus,
without duplication and to the extent deducted from revenues in determining such
Consolidated Net Income, the sum of (a) consolidated interest expense for such
period, (b) consolidated income tax expense for such period, and (c) all amounts
attributable to depreciation and amortization for such period and (d) all
non-cash charges, all as determined on a consolidated basis in accordance with
GAAP.
11
17
"Consolidated Fixed Charges" means, for any period, the sum of
(a) Consolidated Net Interest Expense for such period, (b) Capital Expenditures
during such period, (c) Tax payments made by Vesper or any Subsidiary during
such period, (d) scheduled principal payments of Indebtedness made by Vesper or
any Subsidiary during such period to any Person other than a Loan Party, and
prepayments of any such Indebtedness during such period to the extent that such
prepayments reduced scheduled principal payments that would have been due within
12 months thereafter, except to the extent that such prepayments are refinanced
through Long-Term Indebtedness, and (e) Restricted Payments made by the Loan
Parties (other than to other Loan Parties) during such period.
"Consolidated Net Income" means, for any period, the
consolidated net income or loss of Vesper and the Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP; provided that there
shall be excluded (a) the income of any Person (other than a Subsidiary) in
which any other Person (other than Vesper, a Subsidiary or any director holding
qualifying shares in compliance with applicable law) owns an Equity Interest,
except to the extent of the amount of dividends or other distributions actually
paid to Vesper or any of the Subsidiaries during such period, and (b) the income
or loss of any Person accrued prior to the date it becomes a Subsidiary or is
merged into or consolidated with Vesper or any Subsidiary or the date that such
Person's assets are acquired by Vesper or any Subsidiary.
"Consolidated Net Interest Expense" means, for any period, the
interest expense payable in cash (including the interest component in respect of
Capital Lease Obligations) and accrued by Vesper and the Subsidiaries during
such period, net of interest income.
"Consolidated Revenue" means, for any period, the consolidated
revenues from operations of Vesper and the Subsidiaries for such period,
determined in accordance with GAAP.
"Contract Assignment Agreements" means the Assignment of Know
How Agreement Agreement, the Assignment of Secondment Agreement Agreement, the
Assignment of Technical Services Agreement Agreement, the Assignment of Lucent
Supply Contract Agreement, the Assignment of Telecom and Eletropaulo Rental
Agreement, the Assignment of IBM Equipment Lease Agreement #1 Agreement, the
Assignment of IBM Equipment Lease Agreement #2 Agreement, the Assignment of IBM
Equipment Lease Agreement #3 Agreement, the Assignment of IBM Equipment Lease
Agreement #4 Agreement, and the Assignment of IBM Equipment Lease Agreement #5
Agreement.
12
18
"Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. "Controlling" and "Controlled" have meanings correlative thereto.
"CPE" means customer premises equipment.
"Default" means any event or condition which constitutes an
Event of Default or which upon notice, lapse of time or both would, unless cured
or waived, become an Event of Default.
"Devaluation Amount" means, as of any date, the lesser of (a)
[***] and (b) the dollar amount that results from dividing (i) the excess, if
any, of (A) the Reais equivalent of the aggregate dollar amount of Funded Equity
(assuming, solely for this purpose, that the Devaluation Amount in clause (b) of
the definition of Funded Equity is zero) as of such date and calculated using
the arithmetic average of the mid-level exchange rate of the Reais to the dollar
obtained from the Bloomberg historical pricing screen (or, if such screen is not
available for any reason, from such other source as the Collateral Agent shall
reasonably select) for the 90-day period ending on the calculation date, over
(B) the Reais equivalent of such Funded Equity as of such date, calculated using
the exchange rate of the Reais to the dollar as of such date set forth on
Schedule 1.01(a) (linearly interpolated, to the extent necessary), by (ii) such
90-day average exchange rate as of such date, such amount being determined upon
the earlier of (x) the initial borrowing of Tranche B Loans and (y) the third
anniversary of the Effective Date.
"Disclosed Matters" means the actions, suits and proceedings
and the environmental matters disclosed in Schedule 3.06.
"dollars" or "$" refers to lawful money of the United States
of America.
"Effective Date" means the date on which the conditions
specified in Section 4.01 are satisfied (or waived in accordance with Section
8.02).
"Embratel" means Empresa Brasileira de Telecomunicacoes S.A..
[*] Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted material
has been filed separately with the Securities and Exchange Commission.
13
19
"Environmental Laws" means all laws, rules, regula tions,
codes, ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of any Loan Party directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"Equity Interests" means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person.
"Event of Default" has the meaning assigned to such term in
Section 7.01.
"Excess Cash Flow" means, for any fiscal period of Vesper, the
sum (without duplication) of:
(a) the consolidated net income (or loss) of Vesper and its
consolidated Subsidiaries for such fiscal period, adjusted to exclude
any gains or losses attributable to Prepayment Events; plus
(b) depreciation, amortization and other non-cash charges or
losses deducted in determining such consolidated net income (or loss)
for such fiscal period; plus
(c) any "Additional Fees" as such term is defined in the
Know-How Agreement (or any similar performance based or other incentive
fee payable to a Telecom Transferee) deducted in determining such
consolidated net income (or loss) for such fiscal period; plus
(d) the sum of (i) the amount, if any, by which Net Working
Capital decreased during such fiscal period plus
14
20
(ii) the net amount, if any, by which the consolidated deferred
revenues of Vesper and its consolidated Subsidiaries increased during
such fiscal period; minus
(e) the sum of (i) any non-cash gains included in determining
such consolidated net income (or loss) for such fiscal period plus (ii)
the amount, if any, by which Net Working Capital increased during such
fiscal period plus (iii) the net amount, if any, by which the
consolidated deferred revenues of Vesper and its consolidated
Subsidiaries decreased during such fiscal period; minus
(f) Capital Expenditures for such fiscal period (except to the
extent attributable to the incurrence of Capital Lease Obligations or
otherwise financed by incurring Long-Term Indebtedness); minus
(g) the aggregate principal amount of Long-Term Indebtedness
repaid or prepaid by Vesper and its consolidated Subsidiaries during
such fiscal period, excluding (i) Loans prepaid pursuant to Section
2.03(b), (c) or (e), and (ii) repayments or prepayments of Long-Term
Indebtedness financed by incurring other Long-Term Indebtedness; minus
(h) payments by Vesper to ANATEL representing the deferred
purchase price for the Mirror Authorization and inspection fees payable
to ANATEL from time to time as required by Law No. 5070 of July 7,
1966, amended by Article 51 of Law No. 9472 of July 16, 1997, as may be
further amended from time to time; minus
(i) [***].
"Excluded Indebtedness" means unsecured Indebtedness of Vesper
that matures after, does not require any payments of principal until, and does
not require any payment of interest (other than in the form of additional
Excluded Indebtedness) until, one year after the Tranche B Maturity Date.
"Financial Officer" means the chief financial officer,
principal accounting officer, treasurer or controller of Vesper.
"Financial Projections" means, initially, the Initial
Financial Projections and, following revision thereof in accordance with Section
5.21, the Initial Financial Projections, as so revised, as the same may be
amended from time to time by agreement between Vesper and the Required Lenders
including as contemplated by the proviso to the definition of "Project".
[*] Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted material
has been filed separately with the Securities and Exchange Commission.
15
21
"Financing Transactions" shall have the meaning given to such
term in Section 3.03.
"First Ratio" shall have the meaning given to such term in
Section 6.17.
"Funded Equity" means the excess, if any, of (a) the sum of
(i) the amount, in dollars, of cash capital contributions made to Holdings by
the Shareholders and further contributed by Holdings to Vesper in respect of
Equity Interests of Vesper (excluding any such contributions made (w) pursuant
to clause (b) of Section 7.02, (x) as contemplated by the proviso to exception
(vi) to Section 6.04(a) or Section 7.01(p), (y) to provide funds for any of the
matters described in clauses (ii), (iii) or (iv) of the definition of "Project"
or (z) as described in clause 2.3.3(e) of the Shareholders Agreement, except
where paid pursuant to Section 2.3.8(A) of the Shareholders Agreement) and (ii)
the principal amount of cash loans made to Vesper by a Sponsor or a Shareholder
that constitute Primary Subordinated Obligations (excluding any such loans made
(w) pursuant to clause (b) of Section 7.02, (x) as contemplated by the proviso
to exception (vi) to Section 6.04(a) or Section 7.01(p), (y) to provide funds
for any of the matters described in clauses (ii), (iii) or (iv) of the
definition of "Project" or (z) as described in clause 2.3.3(e) of the
Shareholders Agreement, except where paid pursuant to Section 2.3.8(A) of the
Shareholders Agreement), each calculated in dollars (at the PTAX 800 Rate
prevailing at the time such contribution or loan is made, in the case of any
such contribution or loan made in Reais), over (b) the Devaluation Amount;
provided that, notwithstanding the foregoing, any contributions or loans made
pursuant to clause (b) of Section 7.02 to cure a shortfall (the "Shortfall
Amount") in Annualized EBITDA or Cumulative Consolidated EBITDA (as defined
below) and excluded pursuant to item (w) of clause (a)(i) or (a)(ii) of this
definition (the "Additional Contributed Amount") shall be included in this
definition if (y) in the case of a Shortfall Amount in Annualized EBITDA, (I)
the Consolidated EBITDA for any of the four immediately succeeding fiscal
quarters exceeds the Implied Quarterly EBITDA (as defined below) for such fiscal
quarter by an amount at least equal to the Shortfall Amount, and (II) the
aggregate Consolidated EBITDA for the four immediately succeeding fiscal
quarters exceeds the aggregate amount of the Implied Quarterly EBITDA for such
four fiscal quarters by an amount at least equal to 150% of the Shortfall
Amount, and (z) in the case of a Shortfall Amount in Cumulative Consolidated
EBITDA, (I) the Cumulative Consolidated EBITDA for any of the four immediately
succeeding fiscal quarters exceeds the Cumulative Consolidated EBITDA required
for such fiscal quarter under Section 6.22 by an amount at least equal to the
Shortfall Amount,
16
22
and (II) the Cumulative Consolidated EBITDA at the end of the last of the four
immediately succeeding fiscal quarters exceeds the Cumulative Consolidated
EBITDA for such fiscal quarter by an amount at least equal to the 150% of the
Shortfall Amount; provided, further, that if an Additional Contributed Amount is
advanced to cure a Shortfall Amount more than once in any fifteen consecutive
calendar months, only the Additional Contributed Amount advanced in respect of
the first such fiscal quarter shall be included in Funded Equity, unless the
Required Lenders otherwise agree. As used in this definition, the following
terms have the following meanings: "Implied Quarterly EBITDA" means, for any
fiscal quarter, an amount equal to (A) the Cumulative Consolidated EBITDA for
such fiscal quarter less (B) the Cumulative Consolidated EBITDA for the prior
fiscal quarter, in each case as set forth in the table in Section 6.22; and
"Cumulative Consolidated EBITDA" means the aggregate cumulative amount of
Consolidated EBITDA for any period commencing with (and including) the fiscal
quarter ending on June 30, 2000 and ending on the last day of the relevant
fiscal quarter, calculating Consolidated EBITDA on a cumulative basis for such
period in the same manner as such calculation is performed to demonstrate
compliance under Section 6.22. Subject to satisfaction of the foregoing
conditions, the Additional Contributed Amount shall be included in Funded Equity
at the end of the fiscal quarter in which advanced.
"GAAP" means generally accepted accounting principles in the
United States of America.
"Governmental Approvals" means any consent or approval of,
license or permit from, registration or filing with, or other action by, any
Governmental Authority.
"Governmental Authority" means the government of the United
States of America, the Federative Republic of Brazil, the Cayman Islands, Japan,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government.
"Group", when used in reference to any Loans or Borrowings,
refers to whether such Loans, or the Loans comprising such Borrowings, are made
under the same Participating Credit Agreement and, when used in reference to any
Commitments, refers to whether such Commitments are under the same Participating
Credit Agreement and, when used in reference to any Lenders, refers to whether
such Lenders are in the same Lender Group.
17
23
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided, however, that the term Guarantee shall not
include endorsements for collection or deposit in the ordinary course of
business.
"Guarantee Agreements" means the Parent Guarantee Agreement,
the Subsidiary Guarantee Agreement and the Vesper Guarantee.
"Xxxxxx" means Xxxxxx Corporation.
"Hazardous Materials" means all explosive or radioactive
substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or asbestos
containing materials, polychlorinated biphenyls, radon gas, infectious or
medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.
"Hedging Agreement" means any interest rate protection
agreement, foreign currency exchange agreement, commodity price protection
agreement or other interest or currency exchange rate or commodity price hedging
arrangement.
"Holdings" means Vesper Holding Sao Paulo S.A., a Brazilian
sociedade por acoes.
"Indebtedness" of any Person means, without duplication, (a)
all obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person upon which interest charges are customarily paid, (d)
18
24
all obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (e) all obligations of
such Person in respect of the deferred purchase price of property or services
(excluding (i) current accounts payable incurred in the ordinary course of
business and (ii) payments by Vesper to ANATEL representing the deferred
purchase price for the Mirror Authorization and the Mirror Authorization
Amendment), (f) all Indebtedness of others secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on property owned or acquired by such Person, whether or
not the Indebtedness secured thereby has been assumed, (g) all Guarantees by
such Person of Indebtedness of others, (h) all Capital Lease Obligations of such
Person, (i) all obligations, contingent or otherwise, of such Person as an
account party in respect of letters of credit and letters of guaranty and (j)
all obligations, contingent or otherwise, of such Person in respect of bankers'
acceptances. The Indebtedness of any Person shall include the Indebtedness of
any other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person's ownership interest in or other relationship with such entity, except to
the extent the terms of such Indebtedness provide that such Person is not liable
therefor.
"Indemnity, Subrogation and Contribution Agreement" means the
Indemnity, Subrogation and Contribution Agreement among Vesper, the Subsidiaries
and the Collateral Agent, substantially in the form of Exhibit B.
"Initial Financial Projections" means the projections of cash
flows, results of operations and other relevant information and data related to
Vesper and the Initial Project, containing reasonable assumptions and prepared
by Vesper in good faith, for the period from October 1, 1999, through December
31, 2009.
"Initial Lender" means a Lender as of the Effective Date.
"Initial Participating Credit Agreement" means the Lucent
Credit Agreement.
"Initial Project" means the Project contemplated by clause (i)
of the definition of "Project".
"Intercompany Agreements" means all intercompany agreements
and arrangements between any Loan Party, on the one hand, and any Affiliate of
any Loan Party (other than another
19
25
Loan Party), on the other hand, including with respect to tax sharing,
management fees or sharing of facilities, services or employees, including all
agreements and arrangements identified on Schedule 1.01(b).
"Interconnection Agreements" means the Interconnection
Agreement #1, the Interconnection Agreement #2, the Interconnection Agreement
#3, the Interconnection Agreement #4, the Interconnection Agreement #5 and the
Interconnection Agreement #6.
"Interconnection Agreement #1" means the Interconnection
Agreement, dated August 5, 1999, between Intelig (Bonari Holding) and Vesper.
"Interconnection Agreement #2" means the Interconnection
Agreement, dated August 20, 1999, between Embratel and Vesper.
"Interconnection Agreement #3" means the Interconnection
Agreement, dated August 20, 1999, between Telefonica and Vesper.
"Interconnection Agreement #4" means the Interconnection
Agreement, dated August 20, 1999, between Compania Telefonica xx Xxxxx do Xxxxx
and Xxxxxx.
"Interconnection Agreement #5" means the Interconnection
Agreement, dated November 16, 1999, between BCP and Vesper.
"Interconnection Agreement #6" means the Interconnection
Agreement, dated November 26, 1999, between Tess and Vesper.
"IBM" means IBM Brasil Leasing Arrendamento Mercantil S.A.
"IBM Equipment Lease Agreements" means the IBM Equipment Lease
Agreement #1, the IBM Equipment Lease Agreement #2, the IBM Equipment Lease
Agreement #3, the IBM Equipment Lease Agreement #4 and the IBM Equipment Lease
Agreement #5.
"IBM Equipment Lease Agreement #1" means the Lease Agreement
No. 99029301, between Vesper and IBM.
"IBM Equipment Lease Agreement #2" means the Lease Agreement
No. 99030101, between Vesper and IBM.
20
26
"IBM Equipment Lease Agreement #3" means the Lease Agreement
No. A0131399, between Vesper and IBM.
"IBM Equipment Lease Agreement #4" means the Lease Agreement
No. AP131399, between Vesper and IBM.
"IBM Equipment Lease Agreement #5" means the Lease Agreement
No. 99017701, between Vesper and IBM.
"Japanese Paying Agent" means Chase Trust Bank, as Paying
Agent for the Notes under the Paying Agency Agreement.
"Know-How Agreement" means the Know-How Transfer and Technical
Services Agreement, dated December 23, 1999, between BCI and Vesper or, in the
case of a Telecom Transferee, any substantially similar agreement described in
clause (e) of the definition of "Change in Control".
"Lender" means any Person that holds any Loan or has any
Commitment under any Participating Credit Agreement.
"Lender Group" means all Lenders under the same Participating
Credit Agreement, or the sole Lender thereunder if there is only one Lender
under such Participating Credit Agreement.
"Lien" means, with respect to any asset, (a) any mortgage,
deed of trust, lien, pledge, hypothecation, encumbrance, charge or security
interest in, on or of such asset, (b) the interest of a vendor or a lessor under
any conditional sale agreement, capital lease or title retention agreement (or
any financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Loan" means any loan made to the Borrower pursuant to any
Participating Credit Agreement.
"Loan Documents" means, without duplication, this Agreement,
the Participating Credit Agreements, the Guarantee Agreements, the Subordination
Agreement, the Security Documents, the Indemnity, Subrogation and Contribution
Agreement, the Collateral Agency Agreement, the Sponsor Support Agreement, the
Substitute Financing Side Letter and the Note Documents.
"Loan Parties" means Holdings, Vesper, the Borrower and the
other Subsidiaries.
21
27
"Long-Term Indebtedness" means any Indebtedness that, in
accordance with GAAP, constitutes (or, when incurred, constituted) a long-term
liability.
"Lucent" means Lucent Technologies Inc. and shall include, if
the context so requires, Lucent Technologies World Services, Inc. and Lucent
Technologies Network Systems Do Brasil Ltda.
"Lucent Credit Agreement" means the Credit Agreement dated as
of December 27, 1999, among Holdings, Vesper, the Borrower, the Lenders
thereunder and Societe Generale, New York Branch, as Administrative Agent. The
Lucent Credit Agreement relates to the Lucent Supply Contract and any provision
herein that refers to a Participating Credit Agreement and its related Supply
Contract shall be construed accordingly.
"Lucent Supply Contract" means the Equipment Supply and
Services Agreement dated September 30, 1999, between Lucent Technologies World
Services, Inc., Lucent Network Systems do Brasil Ltda. and Vesper.
"Material Adverse Effect" means a material adverse effect on
(a) the business, assets, results of operations or condition (financial or
otherwise) of Vesper and its Subsidiaries taken as a whole, (b) the ability of
any Loan Party or any Sponsor, Shareholder or any Affiliate of any Loan Party to
perform any of its material obligations under any Loan Document or Project
Document, (c) the validity or enforceability of any Loan Document or Project
Document or the rights or remedies of any Agent or Lender, or (d) the Mirror
Authorization, the rights thereto or rights to operate thereunder of Vesper (it
being agreed that the imposition of penalties under or in respect of the Mirror
Authorization shall not constitute a Material Adverse Effect to the extent that
such imposition does not give rise to an Event of Default specified in clause
(p) of the first sentence of Section 7.01).
"Material Contract" means each contract to which Vesper or a
Subsidiary is a party that (a)(i) requires or is reasonably likely to require
the payment by Vesper of [***] or more over the term of such agreement (giving
effect to extension options that are reasonably likely to be exercised) or (ii)
under which the aggregate amount or value of services performed or to be
performed for or by, or the aggregate amount of funds or other property
transferred or to be transferred to or by, Vesper equals or could reasonably be
expected to equal $10,000,000 or more or (b) is otherwise material to the
installation, construction or operation of the Project (excluding any financial
document) if
[*] Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted material
has been filed separately with the Securities and Exchange Commission.
22
28
the failure to have such contract in full force and effect could reasonably be
expected to have Material Adverse Effect.
"Material Indebtedness" means Indebtedness (other than the
Loans), or obligations in respect of one or more Hedging Agreements, of any one
or more of the Loan Parties in an aggregate principal amount exceeding [***].
For purposes of determining Material Indebtedness, the "principal amount" of the
obligations of a Loan Party in respect of any Hedging Agreement at any time
shall be the maximum aggregate amount (giving effect to any netting agreements)
that such Loan Party would be required to pay if such Hedging Agreement were
terminated at such time.
"Mirror Authorization" means the long distance and local fixed
line service license dated as of May 5, 1999, covering Region 3, granted by
ANATEL to Vesper, as amended by the Mirror Authorization Amendment.
"Mirror Authorization Amendment" has the meaning given to such
term in Section 3.23.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Mortgage" means a mortgage, deed of trust, assignment of
leases and rents, leasehold mortgage or other security document granting a Lien
on any Mortgaged Property to secure the Obligations. Each Mortgage shall be
satisfactory in form and substance to the Administrative Agents.
"Mortgaged Property" means, initially, each parcel of real
property and the improvements thereto owned by or leased to a Loan Party and
identified on Schedule 1.01(c), and includes each other parcel of real property
and improvements thereto with respect to which a Mortgage is granted pursuant to
Section 5.11 or 5.12.
"Net Proceeds" means, with respect to any event (a) the cash
proceeds received in respect of such event including (i) any cash received in
respect of any non-cash proceeds, but only as and when received, (ii) in the
case of a casualty, insurance proceeds, and (iii) in the case of a condemnation
or similar event, condemnation awards and similar payments, net of (b) the sum
of (i) all fees and out-of-pocket expenses (including reasonable "make ready"
expenses) paid by Vesper and the Subsidiaries to third parties in connection
with such event, (ii) in the case of a sale or other disposition of an asset
(including pursuant to a sale and leaseback transaction or a casualty or
condemnation), the amount of all payments required to be made by Vesper and the
Subsidiaries as a result of such event to repay
[*] Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted material
has been filed separately with the Securities and Exchange Commission.
23
29
Indebtedness (other than Loans) secured by such asset or otherwise subject to
mandatory prepayment as a result of such event, and (iii) the amount of all
taxes paid (or reasonably estimated to be payable) by Vesper and the
Subsidiaries, and the amount of any reserves established by Vesper and the
Subsidiaries to fund contingent liabilities reasonably estimated to be payable,
in each case during the year that such event occurred or the next succeeding
year and that are directly attributable to such event (as determined reasonably
and in good faith by the chief financial officer of Vesper).
"Network Infrastructure" means equipment and improvements with
respect to a network, including switches as connected to other switches and
electronic hardware and software; provided, however that Network Infrastructure
excludes fiber optic cable installed from routed locations to residential or
commercial end-use residences (but such exclusion shall not apply to any fiber
optic cable providing more than 52 access lines), CPE or Towers.
"Net Working Capital" means, at any date, (a) the sum of the
consolidated current assets and non-current deferred income tax assets of Vesper
and the Subsidiaries as of such date (excluding cash and Permitted Investments)
minus (b) the sum of the consolidated current liabilities and non-current
deferred income tax liabilities of Vesper and the Subsidiaries as of such date
(excluding current liabilities in respect of Indebtedness), determined on a
consolidated basis in accordance with GAAP. Net Working Capital at any date may
be a positive or negative number. Net Working Capital increases when it becomes
more positive or less negative and decreases when it becomes less positive or
more negative.
"Note" means any intercompany note issued by Vesper to the
Borrower pursuant to the Note Purchase Agreement at any time and from time to
time.
"Note Documents" means the Notes, the Note Pledge and Security
Agreement, the Cayman Share Pledge Agreement, the Capital Contribution
Agreement, the Vesper Guarantee, the Note Purchase Agreement and the Paying
Agency Agreement.
"Note Purchase Agreement" means the Note Purchase Agreement
dated as of December 27, 1999, between Vesper and the Borrower.
"Note Pledge and Security Agreement" means the Note Pledge and
Security Agreement dated as of December 27, 1999, made by the Borrower in favor
of the Collateral Agent.
24
30
"Obligations" has the meaning assigned to such term in the
Collateral Agency Agreement.
"Operational Transactions" shall have the meaning given to
such term in Section 3.03.
"Operator Agreements" mean, collectively, the Know-How
Agreement, the Secondment Agreement and the Technical Services Agreement.
"Parent Guarantee Agreement" means the Guarantee Agreement
between Holdings and the Collateral Agent, substantially in the form of Exhibit
C.
"Participating Credit Agreement" means the Initial
Participating Credit Agreement or any Additional Participating Credit Agreement.
"Paying Agency Agreement" means the Paying Agency Agreement
dated as of December 27, 1999, among the Japanese Paying Agent, Vesper and the
Borrower.
"Perfection Certificate" means a certificate in the form of
Exhibit D or any other form approved by the Agents.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or are
being contested in compliance with Section 5.05;
(b) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's and other like Liens imposed by law, arising
in the ordinary course of business and securing obligations that are
not overdue by more than 30 days or are being contested in compliance
with Section 5.05;
(c) pledges and deposits made in the ordinary course of
business in compliance with workers' compensation, unemployment
insurance and other social security laws or regulations;
(d) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature, in each case
in the ordinary course of business;
25
31
(e) judgment liens in respect of judgments that do not
constitute an Event of Default under clause (k) of Section 7.01; and
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do
not materially detract from the value of the affected property or
interfere with the ordinary conduct of business of Vesper or any
Subsidiary;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America),
in each case maturing within one year from the date of acquisition
thereof;
(b) investments in commercial paper maturing within 270 days
from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from S&P or from
Moody's;
(c) investments in certificates of deposit, banker's
acceptances and time deposits maturing within 180 days from the date of
acquisition thereof issued or guaranteed by or placed with, and money
market deposit accounts issued or offered by, any domestic office of
any commercial bank organized under the laws of the United States of
America or any State thereof which has a combined capital and surplus
and undivided profits of not less than $500,000,000; and
(d) money market funds managed, issued or offered by, any
domestic office of any commercial bank or any financial institution
organized under the laws of the United States of America or any State
thereof which has a combined capital and surplus and undivided profits
of not less than $500,000,000;
(e) direct obligations of Brazil, or obligations the principal
of and interest on which are unconditionally guaranteed by Brazil, (or
by the Central Bank or any agency
26
32
thereof to the extent such obligations are backed by the full faith and
credit of Brazil), in each case maturing within one year from the date
of acquisition thereof;
(f) investments in certificates of deposit, banker's
acceptances and time deposits maturing within 180 days from the date of
acquisition thereof issued or guaranteed by or placed with, and money
market deposit accounts issued or offered by, (i) major Brazilian banks
or (ii) branches of international banks located in Brazil, in the case
of either clause (i) or (ii) having at the date of any investment
combined capital and surplus and retained earnings of not less than
$500,000,000;
(g) money market funds managed issued or offered by, any
domestic office of any commercial bank or any financial institution
organized under the laws of Brazil or such other international
financial institution with branches located in Brazil, which has a
combined capital and surplus and undivided profits of not less than
$500,000,000;
(h) foreign-currency-indexed financial instruments, such as
Brazilian Government bonds, certificates of deposits or any other
fixed-rate instrument issued or offered by, any domestic office of any
commercial bank or any financial institution organized under the laws
of Brazil or such other international financial institution with
branches located in Brazil, which has a combined capital and surplus
and undivided profits of not less than $500,000,000; and
(i) fully collateralized repurchase agreements with a term of
not more than 30 days for securities described in clause (a) above and
entered into with a financial institution satisfying the criteria
described in clause (c) above.
"Permitted Sale-Leasebacks" has the meaning assigned to such
term in Section 6.11.
"Person" means any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity.
"Pledge Agreement" means the Pledge Agreement, dated as of
December 27, 1999, by and among Holdings, Lucent, the other Lenders, the
Borrower and Vesper.
27
33
"Prepayment Event" means:
(a) any sale, transfer or other disposition
(including pursuant to a sale and leaseback transaction) of
any property or asset of Vesper or any Subsidiary, other than
sales permitted by clause (i), (ii), (iii) or (iv) of Section
6.04(b);
(b) any casualty or other insured damage to, or any
taking under power of eminent domain or by condemnation or
similar proceeding of, any property or asset of Vesper or any
Subsidiary; or
(c) (i) issuance by Holdings of any Equity Interest
or equity-linked security, other than issuances of any Equity
Interests limited to a Shareholder or an Affiliate of such
Shareholder, or (ii) the incurrence by any Loan Party of any
Excluded Indebtedness, except, in each case, to the extent
that the aggregate Net Proceeds from such issuances and
incurrences, taken together, do not exceed $62,000,000.
"Primary Subordinated Obligation" has the meaning assigned to
such term in the Subordination Agreement.
"Project" means (i) the initial build-out, ownership and
operation by Vesper and the Subsidiaries of a fixed switch voice telephony
network in 25 cities in Region III of Brazil pursuant to the Mirror
Authorization (excluding the matters referred to in clause (ii)), as
contemplated in the Business Plan (as of the Effective Date) and the Supply
Contracts; (ii) the initial build-out, ownership and operation of a fixed switch
voice telephony network covering the 28 additional cities in Region III of
Brazil pursuant to the amendment to the Mirror Authorization dated August, 1999;
(iii) provision of nationwide data, packet switched data and internet access
services pursuant to the authorizations issued by ANATEL to Vesper prior to the
date hereof; and (iv) rendering of inter-regional and international
long-distance telecommunications services; provided that none of clause (ii),
(iii) or (iv) shall constitute part of the "Project" except, with respect to any
activity or series of related activities covered by any such clause (an
"Additional Project"), if, (A) Vesper shall have provided the Administrative
Agents with a revised Business Plan (presenting financial data on a quarterly
basis), including projections approved by the Board of Directors of Vesper,
reflecting the projected impact of the Loan Parties constructing and operating
such Additional Project, (B) such revised Business Plan shall reflect a
deviation in respect of any fiscal year of 5% or more in revenues (downwards),
operating expenses (upwards) or Capital Expenditures (upwards) from those
contained in the initial Business Plan or, if
28
34
applicable, the revised Business Plan most recently approved in accordance with
this clause (B), then such proposed revised Business Plan shall have been
approved by the Required Lenders, (C) at the time such revised Business Plan has
been presented to the Administrative Agents in accordance with clause (A) above,
Vesper shall be in compliance with all material terms of the Mirror
Authorization, (D) at the time such revised Business Plan has been presented to
the Administrative Agents in accordance with clause (A) above, no Default shall
exist and (E) the Board of Directors of Vesper shall have determined, in good
faith and based on the projections referred to in clause (A) above, that, after
giving effect to the implementation of the Business Plan, Vesper will be able to
comply through the eighth anniversary of the Effective Date with the covenants
set forth in Sections 6.14 to 6.22 (inclusive).
"Project Documents" means the Shareholders Agreement, the
Operator Agreements, the Supply Contracts, the Mirror Authorization (including
all other material Governmental Approvals with respect to ANATEL related
thereto), the Interconnection Agreements, the Telecom and Eletropaulo Rental
Agreement or any Material Contract.
"PTAX 800 Rate" means, for any date, the average of the
exchange rates for all sales transactions and all purchase transactions for
dollars under the PTAX 800 Opcao 5 on such date, as published in the Sisbacen
Data System of the Central Bank or, should the same cease to be published, such
generally recognized replacement rate thereof, subject to the approval of the
Collateral Agent, such approval not to be unreasonably withheld.
"Purchase Price" means amounts paid or payable to any Vendor
pursuant to invoices delivered by such Vendor pursuant to its Supply Contract
for Vendor Manufactured Items, excluding any such amounts attributable to (x)
Taxes (including sales or manufacturing Taxes and import duties and, with
respect to the Lucent Supply Contract, any thereof incurred in connection with
or with respect to Vendor Manufactured Items supplied by Xxxxxx to Lucent and,
thereafter, by Lucent to Vesper) and (y) with respect to the Lucent Supply
Contract in respect of Vendor Manufactured Items supplied by Xxxxxx or its
Affiliates to Lucent or its Affiliates and, thereafter, by Lucent or its
Affiliates to Vesper, freight and insurance. In connection with the Lucent
Supply Contract the relevant amounts related to the Purchase Price are (i) with
respect to Lucent (not Xxxxxx) equipment and services, the DDU and the CIP (as
defined in the Lucent Supply Contract) and (ii) with respect to Xxxxxx
equipment, the Xxxxxx FOB price.
29
35
"Put Option Credit Agreements" means the Initial Participating
Credit Agreement and each Additional Participating Credit Agreement pursuant to
which the lenders thereunder may require prepayment of the Tranche A Loans and
Tranche B Loans thereunder on the fifth anniversary of the Effective Date in
accordance with Section 8.03 of the Collateral Agency Agreement.
"Reais" or "R$" refers to lawful money of the Federative
Republic of Brazil.
"Region 3" means the State of Sao Paulo, as defined in the
Mirror Authorization.
"Registration Certificate" has the meaning given to such term
in Section 5.19.
"Related Parties" means, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates.
"Repayment" means, in respect of any Indebtedness, the direct
or indirect repayment, prepayment, redemption, purchase, acquisition,
defeasance, retirement or other satisfaction of the principal of such
Indebtedness, in whole or in part, whether optional or mandatory. "Repay" has a
meaning correlative thereto.
"Required Enforcement Lenders" has the meaning assigned to
such term in the Collateral Agency Agreement.
"Required Lenders" has the meaning assigned to such term in
the Collateral Agency Agreement.
"Required Percentage" means (a) for any fiscal half year
ending on or prior to the fifth anniversary of the Effective Date, [***] and (b)
for any fiscal half year ending after the fifth anniversary of the Effective
Date, (i) [***], if the ratio of Consolidated EBITDA to Consolidated Fixed
Charges for such fiscal half year is greater than 2.00 to 1.00 and (ii)
otherwise, [***].
"Required Put Option Lenders" means, at any time, Lenders
having outstanding Tranche A Loans, Tranche B Loans, Tranche A Commitments and
Tranche B Commitments under the Put Option Credit Agreements representing more
than 50% of the sum of the total outstanding Tranche A Loans, Tranche B Loans,
Tranche A Commitments and Tranche B Commitments under the Put Option Credit
Agreements at such time.
[*] Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted material
has been filed separately with the Securities and Exchange Commission.
30
36
"Restricted Payment" means (a) any dividend or other
distribution (whether in cash, securities or other property) with respect to any
Equity Interests in any Loan Party, or any payment (whether in cash, securities
or other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition, cancelation or termination of
any Equity Interest in any Loan Party or any option, warrant or other right to
acquire any such Equity Interest in any Loan Party or (b) any Repayment in
respect of any Primary Subordinated Obligation or any payment of cash interest
thereon.
"S&P" means Standard & Poor's Ratings Service.
"Second Ratio" shall have the meaning given to such term in
Section 6.17.
"Secondary Subordinated Obligation" has the meaning assigned
to such term in the Subordination Agreement.
"Secondment Agreement" means the Secondment Agreement, dated
December 23, 1999 between BCI and Vesper or, in the case of a Telecom
Transferee, any substantially similar agreement described in clause (e) of the
definition of "Change in Control".
"Secured Parties" means the Agents and the Lenders.
"Security Documents" means the Collateral Agency Agreement,
the Brazilian Security Documents and the Cayman Security Documents.
"Senior Indebtedness" means, as of any date, Total
Indebtedness as of such date minus the aggregate principal amount of all
Excluded Indebtedness included therein.
"Shareholders" means Qualcomm do Brasil Ltda., Xxxx Canada
International (Megatel) Limited and VeloCom Cayman Brasil Holdings.
"Shareholders Agreement" means the Amended and Restated
Shareholders Agreement, dated December 23, 1999, by and among the Shareholders
and Holdings.
"Share Pledge Agreement" means the Share Pledge Agreement,
dated as of December 27, 1999, by and among Holdings, Qualcomm do Brasil S.A.,
the Borrower, Vesper and the Lenders.
"Sponsors" means BCI, VeloCom Inc. and Xxxxxxxx Xxxxxxxxxxxx.
31
37
"Sponsor Support Agreement" means the Sponsor Support
Agreement, dated December 27, 1999 among the Shareholders, the Sponsors,
Holdings, Vesper and the Collateral Agent.
"Subordination Agreement" means the Subordination Agreement
among the Loan Parties, any holders of Primary Subordinated Obligations, any
other Persons required to become parties thereto in accordance with the Loan
Documents and the Collateral Agent, substantially in the form of Exhibit H.
"Subsidiary Guarantee Agreement" means the Guarantee Agreement
among the Subsidiaries and the Collateral Agent, substantially in the form of
Exhibit I.
"subsidiary" means, with respect to any Person (the "parent")
at any date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership,
association or other entity (a) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power or, in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, controlled or held, or (b) that is, as of
such date, otherwise Controlled, by the parent or one or more subsidiaries of
the parent or by the parent and one or more subsidiaries of the parent.
"Subsidiary" means any subsidiary of Vesper.
"Substitute Financing Side Letter" means the Side Letter,
dated December 27, 1999, among the Sponsors, the Loan Parties, the Lenders and
the Agents, with respect to substitute financing.
"Supply Contract" means the Lucent Supply Contract or, other
than for the purposes of Section 5.10, any contract substituted therefor as
described in clause (q) of Section 7.01.
"Taxes" means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Technical Services Agreement" means the Technical Services
Agreement, dated July 30, 1999, between BCI and Vesper as amended by Amendment
No. 1, dated December 23, 1999, between the same parties or, in the case of a
Telecom Transferee, any
32
38
substantially similar agreement described in clause (e) of the definition of
"Change in Control".
"Telecom and Eletropaulo Rental Agreement" means the Telecom
and Eletropaulo Rental Agreement, dated October 22, 1999, by and among Vesper,
Eletropaulo Telecomunicac_es Ltda. and Eletropaulo Metropolitana Eletricidade de
Sao Paulo S.A.
"Telecom Transferee" means a transferee of BCI's and its
Affiliates' Equity Interests in Holdings and BCI's and its Affiliates' rights
and obligations under the Loan Documents and the Project Documents, provided
that such transferee at the time of such transfer is (x) an experienced
internationally recognized multinational telecommunications company that has
outstanding unsecured, unsupported, long-term dollar senior debt securities
(that are not subject to any Guarantee or other credit enhancement) rated not
less than BBB+ by S&P and Baa1 by Xxxxx'x or (y) a subsidiary of a Person
described in clause (x) whose obligations under the Loan Documents and Project
Documents are absolutely and unconditionally guaranteed by such Person pursuant
to a guarantee agreement in form and substance reasonably satisfactory to the
Collateral Agent.
"Telefonica" means Telecomunicacoes de Sao Paulo S.A.
"Total Capitalization" means, as of any date, the sum of (i)
Total Indebtedness as of such date, and (ii) Funded Equity as of such date.
"Total Indebtedness" means, as of any date, the sum of (a) the
aggregate principal amount of Indebtedness of Vesper and the Subsidiaries
outstanding as of such date (excluding Indebtedness that constitutes a Primary
Subordinated Obligation), in the amount that would be reflected on a balance
sheet prepared as of such date on a consolidated basis in accordance with GAAP,
plus (b) the aggregate principal amount of Indebtedness of Vesper and the
Subsidiaries outstanding as of such date (excluding Indebtedness that
constitutes a Primary Subordinated Obligation) that is not required to be
reflected on a balance sheet in accordance with GAAP, determined on a
consolidated basis; provided that, for purposes of clause (b) above, the term
"Indebtedness" shall not include contingent obligations of Vesper or any
Subsidiary as an account party in respect of any letter of credit or letter of
guaranty unless such letter of credit or letter of guaranty supports an
obligation that constitutes Indebtedness.
"Total Subscribers" means, as of any date, the aggregate
number of customers of Vesper and the operating
33
39
Subsidiaries that are receiving fixed switch telephony service pursuant to a
service contract.
"Towers" means towers (including bases and rooftops), tower
signal and antenna related equipment and support, power measurement devices,
related real estate improvements (including tower bases, fences and lightning
protection) and equipment shelters (but excluding antennae or electronic
equipment housed within such shelters).
"Tranche A Availability Period" means, with respect to any
Participating Credit Agreement, the period from and including the Effective Date
to but excluding the earlier of the Tranche A Availability Termination Date and
the date of termination (including by reason of full utilization) of the Tranche
A Commitments under such Participating Credit Agreement.
"Tranche A Availability Termination Date" means the date that
is the fourth anniversary of the Effective Date.
"Tranche A Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender to make Tranche A Loans under a Participating
Credit Agreement, expressed as an amount representing the maximum aggregate
principal amount of the Tranche A Loans to be made by such Lender thereunder, as
such commitment may be (a) reduced or increased from time to time pursuant to
such Participating Credit Agreement and (b) reduced or increased from time to
time pursuant to assignments by or to such Lender pursuant to such Participating
Credit Agreement.
"Tranche A Loans" means (a) Loans under the Initial
Participating Credit Agreement designated therein as "Tranche A Loans" or (b)
Loans under any Additional Participating Credit Agreement that refinance or
replace Tranche A Loans under the Initial Participating Credit Agreement.
"Tranche A Maturity Date" means December 27, 2007.
"Tranche B Availability Period" means, with respect to any
Participating Credit Agreement, the period from and including the last day of
the Tranche A Availability Period for such Participating Credit Agreement to but
excluding the earlier of the Tranche B Availability Termination Date and the
date of termination (including by reason of full utilization) of the Tranche B
Commitments under such Participating Credit Agreement.
"Tranche B Availability Termination Date" means the date that
is the fifth anniversary of the Effective Date.
34
40
"Tranche B Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender to make Tranche B Loans under a Participating
Credit Agreement, expressed as an amount representing the maximum aggregate
principal amount of the Tranche B Loans to be made by such Lender thereunder, as
such commitment may be (a) reduced or increased from time to time pursuant to
such Participating Credit Agreement and (b) reduced or increased from time to
time pursuant to assignments by or to such Lender pursuant to such Participating
Credit Agreement.
"Tranche B Loans" means (a) Loans under the Initial
Participating Credit Agreement designated therein as "Tranche B Loans" or (b)
Loans under any Additional Participating Credit Agreement that refinance or
replace Tranche B Loans under the Initial Participating Credit Agreement.
"Tranche B Maturity Date" means December 27, 2007.
"Tranche C Availability Period" means, with respect to any
Participating Credit Agreement, the period from and including the Effective Date
to but excluding the earlier of the Tranche C Availability Termination Date and
the date of termination (including by reason of full utilization) of the Tranche
C Commitments under such Participating Credit Agreement.
"Tranche C Availability Termination Date" means the date that
is the third anniversary of the Effective Date.
"Tranche C Commitment" means a Tranche C-1 Commitment, a
Tranche C-2 Commitment or a combination thereof (as the context requires).
"Tranche C-1 Commitment" means, with respect to each Lender,
the commitment, if any, of such Lender to make Tranche C-1 Loans under any
Participating Credit Agreement, expressed as an amount representing the maximum
aggregate principal amount of the Tranche C-1 Loans to be made by such Lender
thereunder, as such commitment may be (a) reduced from time to time pursuant to
such Participating Credit Agreement and (b) reduced or increased from time to
time pursuant to assignments by or to such Lender pursuant to such Participating
Credit Agreement.
"Tranche C-2 Commitment" means, with respect to each Lender,
the commitment, if any, of such Lender to make Tranche C-2 Loans under any
Participating Credit Agreement, expressed as an amount representing the maximum
aggregate principal amount of the Tranche C-2 Loans to be made by such Lender
thereunder, as such commitment may be (a) reduced from time to time pursuant to
such Participating Credit Agreement and (b) reduced or increased from
35
41
time to time pursuant to assignments by or to such Lender pursuant to such
Participating Credit Agreement.
"Tranche C Loans" means Tranche C-1 Loans and Tranche C-2
Loans.
"Tranche C-1 Loans" means (a) Loans under the Initial
Participating Credit Agreement designated therein as "Tranche C-1 Loans" or (b)
Loans under any Additional Participating Credit Agreement that refinance or
replace Tranche C-1 Loans under the Initial Participating Credit Agreement.
"Tranche C-2 Loans" means (a) Loans under the Initial
Participating Credit Agreement designated therein as "Tranche C-2 Loans" or (b)
Loans under any Additional Participating Credit Agreement that refinance or
replace Tranche C-2 Loans under the Initial Participating Credit Agreement.
"Tranche C Maturity Date" means December 27, 2004.
"Transactions" means (a) the execution, delivery and
performance by the Loan Parties, the Sponsors, any Affiliates of the Loan
Parties, and the Shareholders of the Loan Documents and Project Documents, the
borrowing of Loans and the use of the proceeds thereof by any Loan Party and (b)
the installation, construction and operation of the Project.
"Type", when used in reference to any Loan or Borrowing,
refers to whether the rate of interest on such Loan, or on the Loans comprising
such Borrowing, is determined by reference to the Adjusted LIBO Rate or the
Alternate Base Rate (in each case, as defined in any Participating Credit
Agreement).
"Value" means, with respect to any Permitted Sale- Leaseback
at any time, (x) if such Permitted Sale-Leaseback is accounted for as a Capital
Lease Obligation, the capitalized amount that would have been set forth in
respect of such Capital Lease Obligation on the consolidated balance sheet of
Vesper most recently delivered by Vesper pursuant to Section 5.01(a) or (b) (if
such balance sheet had been prepared in accordance with GAAP), as the case may
be (or, with respect to any Capital Lease Obligation entered into after the date
of such balance sheet most recently delivered, such amount as would have been
set forth thereon if such Permitted Sale-Leaseback had been consummated on the
date of such balance sheet most recently delivered), and (y) with respect to any
other Permitted Sale-Leaseback, an amount equal to the net proceeds received by
Vesper from the purchaser (and lessor) of the relevant property pursuant to such
Permitted Sale-Leaseback at the time such Permitted Sale-Leaseback is
consummated.
36
42
"Vendor Manufactured Items" means, with respect to any Supply
Contract, equipment manufactured by the Vendor thereunder (or such Vendor's
Affiliates) or services performed by such Vendor or its Affiliates thereunder;
provided that, with respect to the Lucent Supply Contract, for purposes of this
definition, Vendor shall, also, include Xxxxxx and Affiliates of Xxxxxx with
respect to equipment and services of Xxxxxx or its Affiliates with a Purchase
Price not in excess of $7,620,500 in the aggregate.
"Vendor" means, collectively, Lucent Technologies World
Services, Inc. and Lucent Technologies Network Systems Do Brasil Ltda.
"Vesper" means Vesper Sao Paulo S.A., a sociedade por acoes.
"Vesper Guarantee" means the Loan Guarantee dated as of
December 27, 1999, made by Vesper in favor of the Collateral Agent.
"Voting Agreement" means the Voting Agreement, dated as of
December 27, 1999, by and among Holdings, Qualcomm do Brasil Ltda., Lucent, the
other Lenders, Vesper and the Borrower.
"Working Capital/CPE Facility" means a credit facility
providing for loans to Vesper to finance working capital and/or CPE.
SECTION 1.02. Classification of Loans and Borrowings. For
purposes of this Agreement, Loans may be classified and referred to by Class
(e.g., a "Tranche A Loan") or by Type (e.g., a "LIBOR Loan") or by Class and
Type (e.g., a "Tranche A LIBOR Loan"). Borrowings also may be classified and
referred to by Class (e.g., a "Tranche A Borrowing") or by Type (e.g., a "LIBOR
Borrowing") or by Class and Type (e.g., a "Tranche A LIBOR Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context
37
43
requires otherwise (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns and, in the case of a Governmental Authority, succeeding to the relevant
functions thereof, (c) the words "herein", "hereof" and "hereunder", and words
of similar import, shall be construed to refer to this Agreement in its entirety
and not to any particular provision hereof, (d) all references herein to
Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e)
the words "asset" and "property" shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts, contract rights, licenses and
intellectual property.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with, and any reconciliation of financial statements
to GAAP referred to in Section 5.01 shall be based upon, GAAP, as in effect on
the date hereof, unless the Borrower and the Collateral Agent otherwise agree.
Any restriction, limitation or condition under any Loan Document that is
determined by reference to any financial statement shall be determined as if
such financial statement had been prepared in accordance with GAAP as in effect
on the date hereof, unless the Borrower and the Collateral Agent otherwise
agree.
ARTICLE II
The Loans
SECTION 2.01. Accession of Additional Participating Credit
Agreements. The Administrative Agent under each Additional Participating Credit
Agreement shall become a party hereto, and such Administrative Agent and the
Lender Group thereunder shall become bound by this Agreement, in accordance with
the procedure set forth in Section 2.01 of the Collateral Agency Agreement.
SECTION 2.02. Termination, Increase and/or Reduction of
Commitments. (a) Unless previously terminated, (i) the Tranche A Commitments
shall terminate at 5:00 p.m, New York City time, on the Tranche A Availability
Termination Date, (ii) the
38
44
Tranche B Commitments shall terminate at 5:00 p.m, New York City time, on the
Tranche B Availability Termination Date and (iii) the Tranche C Commitments
shall terminate at 5:00 p.m, New York City time, on the Tranche C Availability
Termination Date.
(b) On the date of each Loan of any Group and Class made by
any Lender, such Lender's Commitment of such Group and Class shall be reduced by
an amount equal to such Loan.
(c) The Tranche A Commitment of each Lender shall be increased
by an aggregate amount equal to the proceeds of any Tranche A Loan made by such
Lender that are applied to pay any regularly scheduled payment of principal of
any Tranche A Loans under the same Participating Credit Agreement (or under any
Additional Participating Credit Agreement that refinanced or replaced Tranche A
Loans under such Participating Credit Agreement) prior to the Tranche A
Availability Termination Date. The Tranche B Commitment of each Lender shall be
increased by an aggregate amount equal to the proceeds of any Tranche B Loan
made by such Lender that are applied to pay any regularly scheduled payment of
the principal of any Tranche A Loans or Tranche B Loans under the same
Participating Credit Agreement (or under any Additional Participating Credit
Agreement that refinanced or replaced Tranche A Loans or Tranche B Loans under
such Participating Credit Agreement) prior to the Tranche B Availability
Termination Date.
(d) In the event that a prepayment would be required pursuant
to paragraph (b), (c) or (e) of Section 2.03, Commitments then in effect shall
be reduced by an aggregate amount equal to the excess, if any, of the amount of
the required prepayment over the aggregate principal amount of Loans outstanding
immediately prior to giving effect to such prepayment.
(e) The Borrower may at any time terminate, or from time to
time reduce, the Commitments upon at least three Business Days notice to the
Administrative Agents; provided that, prior to any such termination or
reduction, the Borrower shall demonstrate, to the reasonable satisfaction of the
Required Lenders, either (i) availability of alternative funds on a
dollar-for-dollar basis and on terms reasonably satisfactory to the Required
Lenders or (ii) that such terminated or reduced portions of the Commitments are
no longer required by Vesper to complete the Project as contemplated by the
Business Plan; provided that each reduction of less than all remaining
Commitments pursuant to this paragraph (e) shall be in an amount that is an
integral multiple of $1,000,000 and not less than
39
45
$5,000,000. The Borrower shall not have the right optionally to terminate or
reduce any Commitments except as provided herein.
(f) The Borrower shall notify the Administrative Agents of any
election to terminate or reduce the Commitments of any Class under paragraph (e)
of this Section at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any such notice, each Administrative
Agent shall advise the Lenders in its Lender Group of the contents thereof. Each
notice delivered by the Borrower pursuant to this Section shall be irrevocable.
Any termination or reduction of the Commitments shall be permanent. Each
reduction or termination of the Commitments pursuant to paragraph (d) or (e) of
this Section shall be applied: first against all Tranche C Commitments under all
Participating Credit Agreements then in effect ratably, except to the extent any
Lender holding a Tranche C Commitment elects not to accept such reduction in
which case any remaining reduction shall be applied against all remaining
Tranche C Commitments (other than any held by Lenders that shall have made such
election) until reduced to zero; and second to the extent of any remaining
reduction in Commitments, to all Tranche A and Tranche B Commitments under all
Participating Credit Agreements then in effect ratably, except to the extent any
Lender holding Tranche A or Tranche B Commitment elects not to accept such
reduction in which case any remaining reduction shall be applied against all
remaining Tranche A and Tranche B Commitments (other than any held by Lenders
that shall have made such election) until reduced to zero; provided that, in the
case of a reduction or termination being effected in connection with the lending
commitments under an Additional Participating Credit Agreement becoming
effective, all reductions or termination of commitments shall be made solely
under the Initial Participating Credit Agreement.
SECTION 2.03. Prepayment of Loans. (a) The Borrower shall have
the right at any time and from time to time to prepay any Borrowing in whole or
in part, subject to the requirements of this Section; provided that each partial
prepayment shall be in an aggregate principal amount that is an integral
multiple of $1,000,000 and not less than $5,000,000.
(b) In the event and on each occasion that any Net Proceeds
are received by or on behalf of Vesper or any Subsidiary in respect of any
Prepayment Event or any BNDES Financing, the Borrower shall, within three
Business Days after such Net Proceeds are received (subject to paragraph (h) of
this Section), but subject to the terms of Section 6.01(c) with respect to any
BNDES Financing, prepay Borrowings in an aggregate principal
40
46
amount equal to such Net Proceeds; provided that the Borrower shall not be
required to prepay Borrowings in connection with any event described in clause
(a) or (b) of the definition of "Prepayment Event", unless the Net Proceeds
therefrom exceed [***] and the Borrower shall only be required to prepay
Borrowings in connection with any event described in clause (c) of the
definition of "Prepayment Event" to the extent that such Net Proceeds exceed
[***] as provided in clause (c) of the definition of "Prepayment Event";
provided further that, in the case of any event described in clause (a) or (b)
of the definition of the term "Prepayment Event", if Vesper shall deliver to the
Administrative Agents a certificate of a Financial Officer to the effect that
Vesper and the Subsidiaries elect to apply the Net Proceeds from such event (or
a portion thereof specified in such certificate), within 180 days after receipt
of such Net Proceeds, to acquire real property, equipment or other tangible
assets to be used in the business of Vesper and the Subsidiaries (in the case of
an event described in clause (a) of the definition of the term "Prepayment
Event") or to repair, restore or replace the affected property or asset (in the
case of an event described in clause (b) of the definition of the term
"Prepayment Event"), and certifying that no Event of Default has occurred and is
continuing, then no prepayment shall be required pursuant to this paragraph in
respect of the Net Proceeds in respect of such event (or the portion of such Net
Proceeds specified in such certificate, if applicable) except to the extent of
any such Net Proceeds therefrom that have not been so applied by the end of such
180-day period, at which time a prepayment shall be required in an amount equal
to such Net Proceeds that have not been so applied; provided further that Vesper
shall not be permitted to make elections pursuant to the immediately preceding
proviso with respect to Net Proceeds from any event described in clause (b) of
the definition of "Prepayment Event" if such Net Proceeds exceed [***]. At or
prior to the end of any 180-day period referred to above, Vesper shall notify
the Administrative Agents of the application of the Net Proceeds required to
have been applied within such period.
(c) Following the end of each fiscal half-year of Vesper,
commencing with the fiscal half-year ending on June 30, 2000, the Borrower shall
prepay Borrowings in an aggregate principal amount equal to the Required
Percentage of Excess Cash Flow for such fiscal half-year. Each prepayment
pursuant to this paragraph shall be made on or before the date on which
financial statements are delivered pursuant to Section 5.01 with respect to the
fiscal half year for which Excess Cash Flow is being calculated (and in any
event within the period required under Section 5.01 for the delivery of
financial statements with
[*] Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted material
has been filed separately with the Securities and Exchange Commission.
41
47
respect to the fiscal period ended at the end of such fiscal half-year), subject
to paragraph (h) of this Section.
(d) If required pursuant to Section 8.03 of the Collateral
Agency Agreement, the Borrower shall, on the fifth anniversary of the Effective
Date, prepay Tranche A Borrowings and Tranche B Borrowings under the Put Option
Credit Agreements in an aggregate amount equal to all outstanding Tranche A
Borrowings and Tranche B Borrowings under each of the Put Option Credit
Agreements, other than Tranche A Loans and Tranche B Loans of Lenders that elect
not to participate in such prepayment pursuant to Section 8.03 of the Collateral
Agency Agreement.
(e) In the event and on each occasion that Vesper or any
Subsidiary Repays any Indebtedness of Vesper or any Subsidiary, then the
Borrower shall, within three Business Days after the date of such Repayment
(subject to paragraph (h) of this Section), prepay Borrowings in an aggregate
amount equal to the product of (x) the sum of the aggregate principal amount of
the Loans outstanding at the time, multiplied by (y) a fraction, the numerator
of which is the aggregate principal amount of such Repayment, and the
denominator of which is the amount of Total Indebtedness immediately prior to
such Repayment (excluding Indebtedness in respect of the Loans and Indebtedness
outstanding under revolving credit facilities); provided that prepayments of
Borrowings shall not be required pursuant to this paragraph in respect of (i)
Repayments of Loans, (ii) any Repayment of Indebtedness to the extent such
Repayment is refinanced by incurring other Indebtedness that complies with
clauses (A) through (F) (inclusive) in the proviso to exception (v) to Section
6.01(a), (iii) any Repayment of Indebtedness outstanding under a revolving
credit facility (x) if such revolving credit facility is the Additional
Facility, if such Repayment occurs at such time as the Additional Facility shall
not be required to be in effect hereunder and (y) in the case of any other
revolving credit facility, if and to the extent that (A) the commitments of the
lenders to make loans thereunder remain in effect after giving effect to such
Repayment or are replaced by commitments under a replacement revolving credit
facility and (B) such commitments are not reduced within six months thereafter,
(iv) payment of regularly scheduled interest, fees and principal payments as and
when due in respect of any Indebtedness and (v) Repayments of any Indebtedness
at the scheduled maturity thereof.
(f) Prior to any optional or mandatory prepayment of
Borrowings, the Borrower shall select the Borrowing or Borrowings to be prepaid
and shall specify such selection in the notice of such prepayment pursuant to
paragraph (g) of this Section; provided that the Borrower shall select
Borrowings to be prepaid
42
48
such that any such prepayment shall be applied: first against all then
outstanding Tranche C Loans under all Participating Credit Agreements ratably,
except to the extent any Lender holding Tranche C Loans elects not to accept
such prepayment in which case any remaining prepayment amount shall be applied
against all remaining Tranche C Loans (other than any held by any Lenders that
shall have made such election) until reduced to zero and; second, to the extent
of any remaining prepayment amount, against all then outstanding Tranche A and
Tranche B Loans under all Participating Credit Agreements ratably, except to the
extent any Lender holding Tranche A or Tranche B Loans elects not to accept such
prepayment in which case any remaining prepayment amount shall be applied
against all remaining Tranche A and Tranche B Loans (other than any held by any
Lenders that shall have made such election) until reduced to zero; provided
further that, in the case of any prepayment that is effected using the proceeds
of Loans under an Additional Participating Credit Agreement, all prepayments
shall be made solely under the Initial Participating Credit Agreement.
(g) The Borrower shall notify the Administrative Agents by
telephone (confirmed by telecopy) of any prepayment not later than 11:00 a.m.,
New York City time, three Business Days before the date of prepayment. Each such
notice shall be irrevocable and shall specify the prepayment date, the principal
amount of each Borrowing or portion thereof to be prepaid and, in the case of a
mandatory prepayment, a reasonably detailed calculation of the amount of such
prepayment. Promptly following receipt of any such notice, each Administrative
Agent shall advise the Lenders in its Lender Group of the contents thereof. Each
partial prepayment of any Borrowing shall be in an amount that would be
permitted in the case of an advance of a Borrowing of the same Type as provided
in the Participating Credit Agreement, except as necessary to apply fully the
required amount of a mandatory prepayment. Each prepayment of a Borrowing shall
be applied ratably to the Loans included in the prepaid Borrowing. Prepayments
of Borrowings shall be accompanied by the payment of accrued interest on the
amount prepaid.
(h) In the event and on each occasion that the Borrower is
required to make any prepayment pursuant to paragraph (b), (c) or (e) of this
Section, the Borrower may, subject to the terms and conditions set forth in this
paragraph, defer the date on which such prepayment is required to be made if,
and only if, (i) it is necessary for the Borrower to exercise a put option with
respect to an equivalent principal amount of the Notes pursuant to the Note
Purchase Agreement in order to obtain funds to make such prepayment and the
exercise of such put option is not permitted under the Note Purchase Agreement
at the time and
43
49
(ii) no Event of Default has occurred and is continuing on the date that such
prepayment is required to be made; provided that the Borrower may not defer any
prepayment in an aggregate principal amount exceeding [***] or that would result
in the aggregate principal amount of all prepayments that have been deferred
hereunder and have not yet been made exceeding [***]. As a condition to the
deferral of any prepayment that the Borrower may elect to defer pursuant to this
paragraph, the Borrower shall notify the Agents of such deferral prior to the
date on which such prepayment otherwise would be required and Vesper shall
transfer to the Collateral Agent, for deposit in the "Loan Prepayment Suspense
Account" (as defined in the Collateral Agency Agreement), funds in an aggregate
amount equal to the aggregate principal amount of Loans the prepayment of which
is being deferred (which deposit may be made in Reais in an amount equivalent to
such aggregate principal amount of Loans, based upon prevailing exchange rates
as determined by the Collateral Agent). Any deferral of a prepayment in
accordance with this paragraph shall terminate (and the Borrower shall be
required to make the prepayment that was deferred) on the earlier of (i) the
first date after such prepayment was deferred on which the put option may be
exercised under the Note Purchase Agreement with respect to any of the Notes,
(ii) the first date after such prepayment was deferred on which any prepayment
of principal in respect of the Loans is made, or is required to be made and is
not deferred in accordance with this paragraph, and (iii) the date that is three
months after the date on which such prepayment was deferred; provided that (A)
the Borrower may elect to make any prepayment that has been deferred in
accordance with this paragraph prior to the date otherwise required pursuant to
this sentence and (B) in the event that clause (i) above applies but the
principal amount of Notes with respect to which the put option is exercisable is
less than the principal amount of the applicable prepayment that has been
deferred, the prepayment then required shall be limited to such principal amount
of Notes, but without affecting the Borrower's obligations hereunder with
respect to the balance of the deferred prepayment. On each date on which the
Borrower is required to make (or elects to make) a prepayment that has been
deferred pursuant to this paragraph, the Collateral Agent shall release the
funds deposited in the Loan Prepayment Suspense Account in respect of such
deferred prepayment and apply such funds to make such prepayment (or, in the
case of funds deposited in Reais, to purchase dollars, which shall be applied to
make such prepayment) in accordance with instructions received from Vesper;
provided that neither any deficiency of the funds so released, nor any delay in
the release or application of such funds, shall relieve the Borrower of its
obligation to make any prepayment required to be made hereunder as and when due,
in the full amount required.
[*] Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted material
has been filed separately with the Securities and Exchange Commission.
44
50
ARTICLE III
Representations and Warranties
Each of Holdings, Vesper and the Borrower represents and
warrants to the Lenders that:
SECTION 3.01. Organization; Powers. Each of the Loan Parties,
Shareholders and Sponsors is duly organized, validly existing and, where
applicable, in good standing under the laws of the jurisdiction of its
organization, has all requisite power and authority to carry on its business as
now conducted and, except where the failure to do so, individually or in the
aggregate, would not be reasonably likely to result in a Material Adverse
Effect, is qualified to do business in, and is in good standing, where
applicable, in, every jurisdiction where such qualification is required.
SECTION 3.02. Authorization; Enforceability. The Transactions
entered into or to be entered into by each Loan Party, Sponsor, Shareholder or
any Affiliate of any Loan Party are within such Loan Party's, Shareholder's,
Sponsor's or such Affiliate of any Loan Party's powers and have been duly
authorized by all necessary corporate and, if required, stockholder action. This
Agreement has been duly executed and delivered by Holdings, Vesper and the
Borrower and constitutes, and each other Loan Document and Project Document to
which any Loan Party, Sponsor, Shareholder or any Affiliate of any Loan Party is
or is to be a party constitutes (or, when executed and delivered by it, will
constitute) a legal, valid and binding obligation of Holdings, Vesper, the
Borrower, such Loan Party, Sponsor, Shareholder or any Affiliate of such Loan
Party (as the case may be), enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.
SECTION 3.03. Governmental Approvals; No Conflicts. (a) The
Transactions (i) described in clause (a) of the definition of "Transactions"
(the "Financing Transactions") do not require any Governmental Approvals, except
(A) such as have been obtained or made and are in full force and effect and (B)
filings necessary to perfect Liens created under the Security Documents, (ii)
described in clause (b) of the definition of Transactions (the "Operational
Transactions") do not require any material Governmental Approvals, in the case
of clauses (i) and
45
51
(ii) of this Section 3.03(a), except the Governmental Approvals described on
Schedule 3.03, (iii) will not violate any applicable law or regulation or the
charter, by-laws or other organizational documents of any Loan Party, Sponsor,
Shareholder or any Affiliate of any Loan Party or any order of any Governmental
Authority, (iv) will not violate or result in a default under any indenture,
agreement or other instrument binding upon any Loan Party, Sponsor, Shareholder
or Affiliate of any Loan Party or its assets, or give rise to a right thereunder
to require any payment to be made by any Loan Party, and (v) will not result in
the creation or imposition of any Lien on any asset of any Loan Party, except
Liens created under the Security Documents.
(b) Schedule 3.03, as amended from time to time by Vesper to
reflect any Governmental Approval required as a result of (1) any change in
applicable law or (2) the inclusion within the definition of "Project" of any
Additional Project in accordance with the terms of the definition of "Project",
in the case of (1) or (2) since the later of (x) the date of execution and
delivery of this Agreement and (y) the most recent date as of which this
representation and warranty shall be deemed to have been made pursuant to
Section 4.02, sets forth all Governmental Approvals required in connection with
the Financing Transactions and all material Governmental Approvals required in
connection with the Operational Transactions. Except as described on Schedule
3.03, all such Governmental Approvals have been obtained, made or taken (as the
case may be) and are valid and in full force and effect, and each of the Loan
Parties, Sponsors, Shareholders and each Affiliate of any Loan Party is in
compliance with the terms and conditions thereof, except where the failure so to
comply would not, individually or in the aggregate, be reasonably likely to have
a Material Adverse Effect. Each of the Borrower and Vesper has no reason to
believe that any such Governmental Approvals that (i) has not been obtained,
made or taken (as the case may be) will not be obtained, made or taken in due
course at or prior to the time when needed, free from any conditions or
requirements that cannot be satisfied, and (ii) has been obtained was based on
materially inaccurate or incomplete information that was supplied by any Loan
Party, Sponsor, Shareholder or Affiliate of any Loan Party.
SECTION 3.04. Financial Condition; No Material Adverse Change.
(a) Each of Holdings and Vesper has heretofore furnished to the Lenders its
consolidated balance sheet and statements of income, stockholders equity and
cash flows as of and for the fiscal quarter and the portion of the fiscal year
ended September 30, 1999, certified by its chief financial officer. Such
financial statements present fairly, in all material respects, the financial
position and results of
46
52
operations and cash flows of Holdings or Vesper (as the case may be) and its
consolidated subsidiaries as of such dates and for such periods in accordance
with GAAP, subject to year-end audit adjustments and the absence of footnotes in
the case of the statements referred to above.
(b) Since September 30, 1999, there has been no event,
development or circumstance that has had or would be reasonably likely to have a
Material Adverse Effect, other than continuing operating losses of Vesper as
contemplated by the Business Plan in effect on the date of this Agreement.
SECTION 3.05. Properties. (a) Each of Vesper and the
Subsidiaries has good title to, or valid leasehold interests in, all the real
and personal property material to its business, except for minor defects in
title that do not interfere with its ability to conduct its business as
currently conducted or proposed to be conducted.
(b) Each of Holdings, Vesper and each Subsidiary owns, or is
licensed to use, all trademarks, tradenames, copyrights, patents and other
intellectual property material to its business, and the use thereof by Holdings,
Vesper and such Subsidiary does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in the
aggregate, would not be reasonably likely to result in a Material Adverse
Effect.
(c) Schedule 3.05 sets forth the address of each real property
that is owned or leased by Holdings, Vesper or any of its Subsidiaries as of the
Effective Date. As of the Effective Date, neither Holdings, Vesper nor any of
its Subsidiaries has received notice of, or has knowledge of, any pending or
contemplated condemnation or similar proceeding affecting any Mortgaged Property
or any sale or disposition thereof in lieu of condemnation. Neither any
Mortgaged Property nor any interest therein is subject to any right of first
refusal, option or other contractual right to purchase such Mortgaged Property
or interest therein.
(d) The information set forth on Schedule 6.04 is true and
accurate in all material respects.
SECTION 3.06. Litigation and Environmental Matters. (a) There
are no actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of Holdings, Vesper or the
Borrower, threatened against or affecting any Loan Party, Sponsor, Shareholder
or Affiliate of any Loan Party or seeking to nullify, rescind, terminate, modify
or suspend any consent, approval, license, permit, registration,
47
53
filing or other action set forth on Schedule 3.03 (i) as to which there is a
reasonable possibility of an adverse determination and that, if adversely
determined, would be reasonably likely, individually or in the aggregate, to
result in a Material Adverse Effect (other than the Disclosed Matters) or (ii)
that involve any of the Loan Documents, the Project Documents, the Transactions
or the Mirror Authorization.
(b) Except for the Disclosed Matters and except with respect
to any other matters that, individually or in the aggregate, would not be
reasonably likely to result in a Material Adverse Effect, none of the Loan
Parties (i) has failed to comply with any Environmental Law or to obtain,
maintain or comply with any Governmental Approval required under any
Environmental Law, (ii) has become subject to any Environmental Liability, (iii)
has received notice of any claim with respect to any Environmental Liability or
(iv) knows of any basis for any Environmental Liability.
(c) Since the date of this Agreement, there has been no change
in the status of the Disclosed Matters that, individually or in the aggregate,
has resulted in, or materially increased the likelihood of, a Material Adverse
Effect.
SECTION 3.07. Compliance with Laws and Agreements. Each of the
Loan Parties is in compliance with all laws, regulations and orders of any
Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except where
the failure to do so, individually or in the aggregate, would not be reasonably
likely to result in a Material Adverse Effect. No Default has occurred and is
continuing.
SECTION 3.08. Investment and Holding Company Status. None of
the Loan Parties, Shareholders, Sponsors or any of their respective subsidiaries
is (a) an "investment company" as defined in, or subject to regulation under,
the Investment Company Act of 1940 or (b) a "holding company" as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935.
SECTION 3.09. Taxes. Each of the Loan Parties has timely filed
or caused to be filed all Tax returns and reports required to have been filed
and has paid or caused to be paid all Taxes required to have been paid by it,
except Taxes that are being contested in good faith by appropriate proceedings
and for which the applicable Loan Party has set aside on its books adequate
reserves.
48
54
SECTION 3.10. Disclosure. Holdings, Vesper and the Borrower
have disclosed to the Lenders all agreements, instruments and corporate or other
restrictions to which any of the Loan Parties, Shareholders, Sponsors or any of
their respective subsidiaries is subject that, individually or in the aggregate,
would be reasonably likely to result in a Material Adverse Effect. As of the
Effective Date, none of the reports, financial statements, certificates or other
written information furnished by or on behalf of any Loan Party to any Agent or
any Lender in connection with the negotiation of this Agreement or any other
Loan Document or delivered hereunder or thereunder (as modified or supplemented
by other written information so furnished) contains any material misstatement of
fact or omits to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided that, with respect to projected financial information,
Holdings, Vesper and the Borrower represent only that such information was
prepared in good faith based upon assumptions believed to be reasonable at the
time.
SECTION 3.11. Subsidiaries. Holdings does not have any
subsidiaries other than Vesper and the Subsidiaries. Schedule 3.11 sets forth as
of the Effective Date the name of, and the ownership interest of Vesper in, each
Subsidiary.
SECTION 3.12. Insurance. Schedule 3.12 sets forth a
description of all insurance maintained by or on behalf of the Loan Parties as
of the Effective Date. As of the Effective Date, all premiums then due and
payable in respect of such insurance have been paid.
SECTION 3.13. Labor Matters. As of the Effective Date, there
are no strikes, lockouts or slowdowns against any Loan Party pending or, to the
knowledge of Holdings or Vesper, threatened. The hours worked by and payments
made to employees of the Loan Parties have not been in violation of any
applicable law dealing with such matters. All material payments due from any
Loan Party, or for which any claim may be made against any Loan Party, on
account of wages and employee health and welfare insurance and other benefits,
have been paid or accrued as a liability on the books of the applicable Loan
Party. The consummation of the Transactions will not give rise to any right of
termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which any Loan Party is bound.
SECTION 3.14. Supply Contracts. Each Supply Contract is in
full force and effect. Vesper is in compliance in all material respects with the
terms and conditions of each Supply Contract.
49
55
SECTION 3.15. Year 2000. Any reprogramming required to permit
the proper functioning, in and following the year 2000, of (a) the computer
systems of Holdings, Vesper and the Subsidiaries and (b) equipment containing
embedded microchips (including systems and equipment supplied by others or with
which Holdings', Vesper's or the Subsidiaries' systems interface) and the
testing of all such systems and equipment, as so reprogrammed, have been
completed. The cost to Holdings, Vesper and the Subsidiaries of such
reprogramming and testing and of the reasonably foreseeable consequences of year
2000 to Holdings, Vesper and the Subsidiaries (including reprogramming errors
and the failure of others' systems or equipment) will not result in a Default or
a Material Adverse Effect.
SECTION 3.16. No Burdensome Restrictions. None of Holdings,
Vesper, the Borrower or any other Loan Party is party to any agreement that
contains any materially burdensome restrictions on its ability to construct,
install and operate the Project as contemplated by, and in compliance with the
terms of, the Project Documents or in a manner consistent with the Business
Plan, or to conduct its business as presently conducted or as intended to be
conducted.
SECTION 3.17. No Sovereign Immunity Defense. Each of the Loan
Parties, Sponsors, the Shareholders and their respective subsidiaries is subject
to private commercial law and suit, and no such Person is entitled to sovereign
immunity under any such laws. Neither the Loan Parties, Sponsors, Shareholders
or their respective subsidiaries nor their respective assets have the right of
immunity from suit, attachment or execution on the grounds of sovereignty within
the Federative Republic of Brazil, the Cayman Islands or in any other
jurisdiction.
SECTION 3.18. Ownership of Holdings. Schedule 3.18 sets forth
all Persons that beneficially own Equity Interests in Holdings and the
percentage of (a) the ordinary voting power of and (b) the equity value of
Holdings beneficially owned by each such Person, in each case as of the
Effective Date.
SECTION 3.19. Project Documents, etc. As of the Effective
Date, the Project Documents (together with the Loan Documents) constitute and
include all material contracts and agreements relating to the Transactions to
which any Loan Party, Sponsor, Shareholder or Affiliate of any Loan Party is a
party. The Project Documents and the Loan Documents constitute and include all
material contracts and agreements necessary for the
50
56
construction, installation and operation of the Initial Project as contemplated
by the Business Plan and in a manner consistent with applicable law. The
services to be performed, the materials to be supplied and the rights to be
granted under the Project Documents and Loan Documents comprise all of the
rights and interests necessary for the construction, installation and operation
of the Project in a manner consistent with the Business Plan and applicable law.
Holdings has delivered to the Lenders true and correct copies of each Project
Document in effect as of the Effective Date. Neither any Loan Party nor, to the
knowledge of Holdings, Vesper and the Borrower, any other party to any Project
Document, is in default in the performance of any obligation set forth in any
Project Document that would reasonably be likely to result in a Material Adverse
Effect. To the best knowledge of Holdings, Vesper and the Borrower, no event has
occurred that could reasonably be expected to give rise to the termination of
any Project Document that would reasonably be likely to result in a Material
Adverse Effect. All conditions precedent to the obligations of the respective
parties to each Project Document have been waived or satisfied, except for any
such conditions that by their terms are not to be met until a later stage of the
implementation of the Project, and Vesper does not have any reason to believe
that any such condition to be satisfied in the future will not be satisfied at
or prior to the time required.
SECTION 3.20. Withholding and Other Taxes. As of the date
hereof:
(a) Other than Cayman Islands stamp duty, there is no tax,
levy, impost, deduction, charge or withholding imposed, levied or made by or in
the Cayman Islands or any political subdivision or taxing authority thereof or
therein (i) on or by virtue of the execution, delivery, performance, enforcement
or admissibility into evidence of this Agreement or any of the other Loan
Documents or (ii) on any payment to be made by the Subsidiaries pursuant to this
Agreement or any of the other Loan Documents.
(b) Any and all payments of interest with respect to any Note
Document shall be subject to (i) income tax withholding, which rate will be
reduced to zero if the issuance of Notes in connection with any Note Document if
the closing of the foreign exchange transaction in connection with such issuance
has occurred on or before December 31, 1999; if such reduced rate is not
applicable, such payments shall be subject to income tax withholding at a rate
of 15%, unless payment is made to a Person that is resident in (w) a "tax haven"
(defined for Brazilian tax law purposes as a country that does not tax income or
taxes
51
57
income at a rate under 20%), in which case the applicable withholding rate is
25%; or (x) a country that has a tax treaty with Brazil pursuant to which such
withholding rate is reduced; (ii) Tax on Currency Exchange Transactions ("IOF"),
which, notwithstanding its current zero rate, may be increased at any time by a
decision of the Minister of Finance of Brazil; and (iii) Tax on Bank
Transactions ("CPMF"), which is imposed at the rate of 0.38% on any and all bank
account debit transactions.
(c) All payments made under any Guarantee Agreement, as well
as all and any payments of expenses and fees to Persons outside of Brazil, shall
be subject to income tax withholding in Brazil at a rate of 15%, unless payment
is made to a Person that is resident in (y) a "tax haven" (defined for Brazilian
tax law purposes as a country that does not tax income or taxes income at a rate
under 20%), in which case the applicable rate is 25%; or (z) a country that has
a tax treaty with Brazil pursuant to which such withholding rate is reduced.
SECTION 3.21. Ranking of Loans. The obligations of each Loan
Party, Sponsor and Shareholder under the Loan Documents rank in right of payment
at least pari passu with all other unsubordinated Indebtedness of such Loan
Party, Sponsor and Shareholder.
SECTION 3.22. Spectrum Clearance. The rights granted to Vesper
by ANATEL pursuant to the Mirror Authorization provide Vesper with adequate
rights in respect of the radio frequency spectrum to enable Vesper to operate
the Project as contemplated by the Project Documents and the Business Plan.
Vesper has undertaken all investigations customary in the telecommunications
industry to determine whether any interference with or use of (by any Person
other than Vesper) the portion of the spectrum that will be used in connection
with the operation of the Project as contemplated by the Project Documents and
the Business Plan exists. Vesper has adequate spectrum clearance to operate the
Project as contemplated by the Project Documents and the Business Plan, except
for such interference with or use of such spectrum that could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 3.23. Service to 28 Additional Cities. The amount of
Capital Expenditures required to be made by Vesper in order to meet the minimum
requirements of ANATEL under the amendment to the Mirror Authorization (the
"Mirror Authorization Amendment") referred to in clause (ii) of the definition
of "Project" (and thereby avoid, among other things, loss of the rights
associated with such amendment and the imposition of penalties by ANATEL) is
not, in the reasonable judgment of
52
58
Vesper, in excess of [***] (such calculation having been made in good faith by
Vesper, after due inquiry and based upon assumptions believed to be reasonable
by Vesper). Any failure by Vesper to comply with any of its obligations under
the Mirror Authorization Amendment would not, as a matter of law, impair
Vesper's rights or increase Vesper's obligations or liabilities under the Mirror
Authorization insofar as such rights, obligations or liabilities relate to the
Initial Project.
SECTION 3.24. Security Documents. The Security Documents
create in favor of the Collateral Agent or, where specified, the Lenders, for
the benefit of the Secured Parties, legal, valid, binding, enforceable and first
priority perfected Liens in all Collateral, except for Collateral as to which
the Security Document creating a Lien in such Collateral provides for the
periodic filing of Liens in respect of Collateral acquired or created after the
Effective Date and such periodic filing has not yet been required to be made in
accordance with the terms of such Security Document.
ARTICLE IV
Conditions
SECTION 4.01. Effective Date. The obligations of the Lenders
to make Loans under the Initial Participating Credit Agreement shall not become
effective until the date on which each of the following conditions is satisfied
(or waived in accordance with Section 8.02):
(a) The Administrative Agents (or their counsel) shall have
received from each party hereto or thereto either (i) a counterpart of
this Agreement and the Initial Participating Credit Agreement signed on
behalf of such party or (ii) written evidence satisfactory to such
Agent (which may include telecopy transmission of a signed signature
page) that such party has signed a counterpart of this Agreement or the
Initial Participating Credit Agreement (as applicable). The Initial
Participating Credit Agreement shall be satisfactory in form and
substance to the Agents and Lenders that are not parties thereto.
(b) The Administrative Agents shall have received a favorable
written opinion (addressed to the Agents and the Lenders and dated the
Effective Date) of (i) Milbank, Tweed, Xxxxxx & XxXxxx LLP, United
States counsel for the Loan Parties, the Sponsors and the Shareholders
substantially in the form of Exhibit I-1, (ii) Xxxxxxxx Neto, Brazilian
[*] Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted material
has been filed separately with the Securities and Exchange Commission.
53
59
counsel for the Loan Parties, the Sponsors and the Shareholders
substantially in the form of Exhibit I-2, (iii) Walkers, Cayman counsel
for the Loan Parties, the Sponsors and the Shareholders substantially
in the form of Exhibit I-3 and (iv) such opinions from counsel for each
of the Shareholders and Sponsors as the Agents may reasonably require,
and, in each case, covering such other matters relating to the Loan
Parties, the Shareholders, the Sponsors, the Loan Documents, the
Transactions or the Project as any Agent shall reasonably request.
Holdings, Vesper and the Borrower hereby request their counsel referred
to in this paragraph to deliver such opinions.
(c) The Administrative Agents shall have received such
documents and certificates as such Agent or its counsel may reasonably
request relating to the organization, existence and good standing of
the Loan Parties, the Sponsors and the Shareholders, the authorization
of the Transactions and any other legal matters relating to the Loan
Parties, the Loan Documents, the Sponsors, the Shareholders or the
Transactions, all in form and substance satisfactory to such Agent and
its counsel.
(d) The Administrative Agents shall have received a
certificate, dated the Effective Date and signed by the President, a
Vice President or a Financial Officer of Vesper, confirming compliance
with the conditions set forth in paragraphs (a), (b), (c), (d), (e) and
(f) of Section 4.02.
(e) The Administrative Agents and the Initial Lenders shall
have received all fees and other amounts due and payable to them on or
prior to the Effective Date, including, to the extent invoiced,
reimbursement or payment of all expenses (including reasonable legal
fees and expenses) required to be reimbursed or paid by the Borrower
hereunder or under any other Loan Document.
(f) The Lenders shall be satisfied with the corporate and
legal structure and capitalization of Holdings, Vesper, the Borrower
and the other Subsidiaries, including the charter and by-laws of
Holdings, Vesper, the Borrower and each other Subsidiary and each
agreement or instrument evidencing Indebtedness of each such Person.
(g) The Collateral and Guarantee Requirement shall have been
satisfied and the Agents shall have received a completed Perfection
Certificate dated the Effective Date
54
60
and signed by a Financial Officer of Vesper, together with all
attachments contemplated thereby.
(h) The Administrative Agents shall have received evidence
satisfactory to them that the insurance required by Section 5.07 is in
effect and that the Collateral Agent has been named as an additional
insured and loss payee under all insurance policies to be maintained
with respect to the properties of the Loan Parties constituting the
Collateral.
(i) The Mirror Authorization shall have been duly granted to
Vesper and shall be in full force and effect. No event shall have
occurred that would subject the Mirror Authorization or any other
material Governmental Approval to be revoked, terminated or suspended
by ANATEL or any other Governmental Authority.
(j) All Intercompany Agreements shall be reasonably
satisfactory in form and substance to the Lenders. True and correct
copies of all Intercompany Agreements shall have been delivered to the
Lenders.
(k) The Collateral Agent shall have received a counterpart of
the Subordination Agreement duly executed and delivered on behalf of
each party thereto and such Agreement shall be in full force and
effect.
(l) The Supply Contract shall have been executed and delivered
by Vesper and the applicable Vendor and shall be in full force and
effect and any conditions to its effectiveness shall have been
satisfied.
(m) The Sponsor Support Agreement shall have been executed and
delivered by each of the parties thereto and such Agreement shall be in
full force and effect. A true and correct copy of the Sponsor Support
Agreement shall have been delivered to the Lenders.
(n) Vesper shall have delivered evidence satisfactory to each
Agent and the Lenders of the receipt by Vesper of net cash equity
proceeds of at least US $65,431,509.
(o) The Administrative Agents shall have received copies of
all agreements, instruments and other documents then in existence (i)
evidencing or governing the Loans and any other Indebtedness of any
Loan Party existing or entered into on the Effective Date (other than
the Indebtedness created under the Loan Documents) and (ii) relating to
the Equity Interests of the Loan Parties (including shareholder
55
61
agreements related thereto) and such Indebtedness, equity and
documentation shall be on terms reasonably satisfactory in form and
substance to the Lenders.
(p) The Borrower, Holdings and all other parties thereto
(other than the Lenders and the Agents) will have received from the
applicable Brazilian Government Authority an acknowledgment in form and
substance reasonably satisfactory to the Lenders regarding the
registration of the security interest on the Collateral pursuant to the
Collateral and Guarantee Requirement.
(q) The Collateral Agency Agreement shall have been executed
and delivered by each party thereto and shall be in full force and
effect.
(r) Vesper shall have signed interconnection agreements with
Embratel and Telefonica for operating the Project in Region 3 as
contemplated by the Project Documents and the Business Plan.
(s) No change in applicable law shall have occurred adversely
affecting the legality, validity or enforceability of this Agreement or
the Initial Participating Credit Agreement, the extension of credit
thereunder or the making of the Loans.
(t) Copies of the Project Documents shall have been delivered
to the Lenders, executed in a form and in substance reasonably
satisfactory to the Lenders, provided that the copies of the Supply
Contracts delivered to the Lenders may be redacted to exclude
confidential competitive information.
(u) (i) The board of directors of VeloCom shall have allocated
(and such allocation shall not have been revoked, terminated or
otherwise canceled) not less than US$75,000,000 to fund VeloCom Inc.'s
equity contribution commitment to the Project and shall have received
committed capital or financing commitments necessary to satisfy such
allocation, and (ii) VeloCom Inc. shall have received irrevocable
commitments in an amount of not less than US$200,000,000 in a private
securities offering.
(v) The Substitute Financing Side Letter shall have been
executed and delivered by each of the parties thereto and such Letter
shall be in full force and effect. A true and correct copy of the
Substitute Financing Side Letter shall have been delivered to the
Lenders.
56
62
(w) Vesper shall have arranged the initial Working Capital/CPE
Facility providing for loan commitments to Vesper thereunder in an
aggregate principal amount not less than $50,000,000, with a maturity
no earlier than the date that is 12 months after the Effective Date and
not secured by Liens other than Liens applying to accounts receivable
(and related collection accounts) or CPE, as applicable, of Vesper. The
terms and conditions of such initial Working Capital/CPE Facility shall
be satisfactory to the Lenders, and true and correct copies of all
agreements relating thereto shall have been delivered to the Lenders.
(x) The Borrower and Vesper shall have established, to the
satisfaction of the Administrative Agents, a cash collection system,
including a cash collateral account in relation to which the Collateral
Agent shall have received a power of attorney permitting it to exercise
control over the funds contained therein when an Event of Default has
occurred and is continuing, as contemplated by the Assignment of Credit
Rights Agreement.
(y) Any additional conditions to the effectiveness of the
Initial Participating Credit Agreement as set forth therein shall have
been satisfied or waived.
(z) Each of the Capital Contribution Agreement, the Note
Purchase Agreement and the Paying Agency Agreement shall have been
executed and delivered by each party thereto and shall be in full force
and effect.
(aa) The following actions or approvals shall have been taken
or received:
(i) the prior authorization of the Central Bank
approving the financial terms of the transactions contemplated
by the Intercompany Notes and authorizing Vesper to close
foreign exchange contracts with respect to the proceeds in
Dollars to be received from the Borrower pursuant thereto,
which has been duly obtained and is in full force and effect;
(ii) the letter of non-opposition issued by the
Central Bank with respect to the Vesper Guarantee;
(iii) the translation of the Loan Documents (other
than the Notes and the Intercompany Notes) into Portuguese by
a sworn translator, which is required for such Loan Documents
to be in proper legal form under
57
63
the laws of Brazil for the enforcement thereof in any
competent Brazilian court;
(iv) the registration of the Loan Documents in the
appropriate registry in Brazil and the corporate register of
Vesper, respectively, which filing shall occur prior to the
date of the initial Loan.
The Administrative Agents shall notify the Borrower, Vesper and the Lenders of
the Effective Date, and such notice shall be conclusive and binding.
Notwithstanding the foregoing, the obligations of the Lenders to make Loans
under the Initial Participating Credit Agreement shall not become effective
unless each of the foregoing conditions is satisfied (or waived pursuant to
Section 8.02) at or prior to 3:00 p.m., New York City time, on December 31, 1999
(and, in the event such conditions are not so satisfied or waived, the
Commitments shall terminate at such time).
SECTION 4.02. Each Borrowing. The obligation of each Lender to
make a Loan on the occasion of any Borrowing under any Participating Credit
Agreement is subject to the satisfaction of the following conditions:
(a) At the time of and immediately after giving effect to such
Borrowing, the representations and warranties of the Loan Parties,
Shareholders and Sponsors set forth in the Loan Documents shall be true
and correct in all material respects on and as of the date of such
Borrowing (or, if any representation or warranty relates to another
date, on and as of such other date).
(b) At the time of and immediately after giving effect to such
Borrowing, no Default shall have occurred and be continuing.
(c) At the time of such Borrowing, Vesper and the Subsidiaries
shall be in compliance, on a pro forma basis after giving effect to
such Borrowing, with the covenants contained in Sections 6.16 and 6.17.
(d) At the time of and immediately after giving effect to such
Borrowing, no moratorium or other action by any Governmental Authority
which restricts the ability of any Loan Party to make any payment when
due under any Loan Document or to transfer US dollars to the United
States shall have occurred, other than administrative requirements that
can be routinely satisfied.
58
64
(e) At the time of and immediately after giving effect to such
Borrowing, the aggregate principal amount of all Tranche A Loans and
Tranche B Loans made under any Participating Credit Agreement (whether
or not repaid) shall not exceed 150% of the Borrowing Base relating to
such Participating Credit Agreement.
(f) At the time of and immediately after giving effect to such
Borrowing, the aggregate principal amount of all Tranche A Loans and
Tranche B Loans made under any Participating Credit Agreement (whether
or not repaid) for the purposes described in clauses (b), (c), (d) with
respect to any optional prepayment of any Tranche C Borrowing and (e)
of the first sentence of Section 5.10 shall not exceed 50% of the
aggregate principal amount of Tranche A Loans and Tranche B Loans made
thereunder (whether or not repaid) for the purposes described in clause
(a) of the first sentence of Section 5.10; provided that the condition
set forth in this paragraph (f) shall not apply to any Borrowing that
is made solely to finance (x) import taxes and duties for Vendor
Manufactured Equipment which has been ordered pursuant to a binding
purchase order under the related Supply Contract or (y) fees payable
under the applicable Participating Credit Agreement and closing
expenses payable under the applicable Participating Credit Agreement on
the Effective Date. For purposes of paragraphs (e) and (f), Loans made
under the Initial Participating Credit Agreement and Loans made under
any Additional Participating Credit Agreement to replace Loans that
would have been made under the Initial Participating Credit Agreement
shall be deemed to have been made under the same Participating Credit
Agreement.
(g) Concurrent with such Borrowing, Vesper shall issue and the
Borrower shall purchase, in accordance with the terms of the Note
Purchase Agreement, a Note (i) in principal amount equal to the amount
of such Borrowing and (ii) bearing an interest rate at least equal to
the interest rate applicable to such Borrowing.
Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrower on the date thereof as to the matters specified in paragraphs (a),
(b), (c), (d), (e), (f) and (g) of this Section 4.02.
59
65
ARTICLE V
Affirmative Covenants
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable under the
Participating Credit Agreements shall have been paid in full, each of Holdings,
Vesper and the Borrower covenants and agrees with the Lenders that:
SECTION 5.01. Financial Statements and Other Informa tion. The
Borrower and Vesper will furnish to each Agent and each Lender:
(a) within 120 days after the end of each fiscal year of
Vesper, the audited consolidated balance sheet of each of the Borrower
and Vesper and related statements of operations, stockholders' equity
and cash flows as of the end of and for such year, in each case
presented in US dollars, setting forth in each case in comparative form
the figures for the previous fiscal year, all reported on by Deloitte &
Touche or other independent public accountants of recognized
international standing (without a "going concern" or like qualification
or exception with respect to any fiscal year commencing with the fiscal
year with respect to which Consolidated EBITDA is a positive number and
without any qualification or exception as to the scope of such audit)
to the effect that such consolidated financial statements present
fairly in all material respects the financial condition and results of
operations of each of the Borrower and Vesper and its consolidated
Subsidiaries on a consolidated basis in accordance with generally
accepted accounting principles in Brazil consistently applied,
accompanied by an unaudited reconciliation of such statements to GAAP;
(b) within 60 days after the end of each of the first three
fiscal quarters of each fiscal year of Vesper, the consolidated balance
sheet of each of the Borrower and Vesper and related statements of
operations, stockholders' equity and cash flows as of the end of and
for such fiscal quarter and the then elapsed portion of the fiscal
year, in each case presented in US dollars, setting forth in each case
in comparative form the figures for the corresponding period or periods
of (or, in the case of the balance sheet, as of the end of) the
previous fiscal year, all certified by one of the Financial Officers as
presenting fairly in all material respects the financial condition and
results of operations of each of the Borrower and Vesper and its
consolidated Subsidiaries on a consolidated basis in accordance with
generally accepted accounting principles in Brazil consistently
applied, subject to normal year-end
60
66
audit adjustments and the absence of footnotes, accompanied by an
unaudited reconciliation of such statements to GAAP;
(c) within 30 days after the end of each fiscal month of
Vesper, a report substantially in the form of Schedule 5.01(c);
(d) concurrently with any delivery of Vesper's financial
statements under clause (a) or (b) above, a certificate of a Financial
Officer of Vesper (i) certifying as to whether a Default has occurred
and, if a Default has occurred, specifying the details thereof and any
action taken or proposed to be taken with respect thereto, (ii) setting
forth reasonably detailed calculations demon strating compliance with
Sections 6.16, 6.17, 6.18, 6.19, 6.20, 6.21, 6.22, 6.23 and 6.24, and
(iii) stating whether any change in GAAP or in the application thereof
has occurred since the date of Vesper's financial statements referred
to in Section 3.04 that would have a material effect on the
determination of compliance by any Loan Party with its obligations
hereunder;
(e) concurrently with any delivery of financial statements
under clause (a) above, a certificate of the accounting firm that
reported on such financial statements stating whether they obtained
knowledge during the course of their examination of such financial
statements of any Default (which certificate may be limited to the
extent required by accounting rules or guidelines);
(f) promptly after the same become available but in any event
within 45 days after the end of each fiscal year of Vesper, the Budget
with respect to the current fiscal year;
(g) promptly after the same become publicly available, copies
of all periodic and other reports, proxy statements and other materials
filed by any Loan Party with the Securities and Exchange Commission, or
any Governmental Authority succeeding to any or all of the functions of
said Commission, or with any national securities exchange, or
distributed by Holdings to its shareholders generally, as the case may
be;
(h) promptly following any request therefor, such other
information regarding the operations, business, affairs and financial
condition of any Loan Party, or compliance with the terms of any Loan
Document, as any Agent or any Lender may reasonably request; and
61
67
(i) promptly after execution thereof, copies of any agreement,
instrument or other document evidencing or governing any Loans, the
Working Capital/CPE Facility, the Additional Facility, and any other
arrangement or series of related arrangements providing financing in an
aggregate amount in excess of $7,500,000 in order to complete and
operate the Project or any Project Document and of any amendment or
modification to any thereof or waiver under any thereof.
SECTION 5.02. Notices of Material Events. Holdings and the
Borrower will furnish to each Agent and each Lender prompt written notice of the
following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority
against or affecting Holdings, Vesper, the Borrower or any Affiliate
thereof that, if adversely determined, would be reasonably likely to
result in a Material Adverse Effect; and
(c) any other development that results in, or would be
reasonably likely to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of Vesper setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
SECTION 5.03. Information Regarding Collateral. (a) Vesper
will furnish to the Agents prompt written notice of any change (i) in any Loan
Party's corporate name or in any trade name used to identify it in the conduct
of its business or in the ownership of its properties, (ii) in the location of
any Loan Party's chief executive office, its principal place of business, any
office in which it maintains books or records relating to the Collateral or any
premises where any asset constituting Collateral is installed or situated
(including the installation of any asset constituting Collateral at a location
where Collateral has not previously been located) or (iii) in any Loan Party's
identity or corporate structure. Holdings, Vesper and the Borrower agree not to
effect or permit any change referred to in the preceding sentence unless all
filings or other actions have been made or taken that are required, in
connection with or as a result of such change, in order for the Collateral Agent
to continue at all times following such change to have a valid,
62
68
legal and perfected first priority Lien in all the Collateral. Holdings, Vesper
and the Borrower also agree promptly to notify the Agents if any material
portion of the Collateral is damaged or destroyed.
(b) Each year, at the time of delivery of annual financial
statements for Vesper with respect to the preceding fiscal year pursuant to
clause (a) of Section 5.01, Vesper shall deliver to the Agents a certificate of
a Financial Officer certifying that all appropriate filings, recordings or
registrations, including all refilings, rerecordings and reregistrations,
containing a description of the Collateral have been filed of record in each
governmental, municipal or other appropriate office in each jurisdiction to the
extent necessary to protect and perfect the Liens under the Security Documents
for a period of not less than 18 months after the date of such certificate
(except as noted therein with respect to any documents or instruments to be
filed within such period).
SECTION 5.04. Existence; Conduct of Business. Each of
Holdings, Vesper and the Borrower will, and will cause each of the Subsidiaries
to, do or cause to be done all things necessary to preserve, renew and keep in
full force and effect its legal existence, the Mirror Authorization and the
rights, licenses, permits, privileges, franchises and Governmental Approvals
material to the conduct of the business of Holdings, Vesper, the Borrower and
the other Subsidiaries, taken as a whole; provided that the foregoing shall not
prohibit any merger, consolidation, liquidation or dissolution permitted under
Section 6.03.
SECTION 5.05. Payment of Taxes. Each of Holdings, Vesper and
the Borrower will, and will cause each of the Subsidiaries to, pay its Tax
liabilities, before the same shall become delinquent or in default, except where
(a) the validity or amount thereof is being contested in good faith by
appropriate proceedings, (b) Holdings, Vesper, the Borrower or such Subsidiary
has set aside on its books adequate reserves with respect thereto in accordance
with GAAP, (c) such contest effectively suspends collection of the contested
obligation and the enforcement of any Lien securing such obligation and (d) the
failure to make payment pending the resolution of such contest could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 5.06. Maintenance of Properties. Each of Holdings,
Vesper and the Borrower will, and will cause each of the Subsidiaries to, keep
and maintain all property material to the conduct of its business in good
working order and condition, ordinary wear and tear excepted.
63
69
SECTION 5.07. Insurance. (a) Each of Holdings, Vesper and the
Borrower will, and will cause each of the Subsidiaries to, maintain, with
financially sound and reputable insurance companies, reasonably satisfactory to
the Collateral Agent from time to time, insurance in at least such amounts,
relative to the size of the assets and business of Vesper and the Subsidiaries,
of such character and against at least such risks, and with such risk
retentions, as is usually maintained by companies engaged in the same or a
similar business in the same general area.
(b) Such insurance shall include:
(i) "all risk" insurance, including landslides, windstorm and
flood, for an amount per occurrence of not less than the full
replacement cost of all assets that could reasonably be expected to be
subject to any single risk occurrence, with a maximum deductible per
occurrence under such policy that is available at reasonable cost, such
amounts to be reasonably satisfactory to the Collateral Agent from time
to time;
(ii) equipment and machinery breakdown insurance covering
breakdown and resulting damage including towers, antennas, switches,
computer equipment, amplifiers, rotating equipment such as generators
and compressors as well as electrical equipment, including
transformers, switchgear and electrical apparatus, in each case for
their full value;
(iii) business interruption insurance covering risk of loss as
a result of the cessation or material interruption of the business of
Vesper or any Subsidiary due to physical damage to the property
required to be insured under clause (i) or (ii) above, for an indemnity
period of at least three months, and providing for the payment of the
insured period of at least the gross revenues of Vesper and the
Subsidiaries from their largest revenue producing city for such insured
period, less any non-continuing costs and expenses during the relevant
indemnity period; and
(iv) third-party liability, including liability insurance for
bodily injury and property damage, having a reasonable limit available
at a reasonable cost of not less than $5,000,000 per occurrence, with
an aggregate for products liability of not less than $5,000,000, and
with a cross-liability clause with respect to any operations of Vesper
or any Subsidiary.
64
70
(c) Vesper will cause all liability insurance policies
maintained by or for the benefit of any Loan Party to name the Secured Parties
as additional insured. In addition to any requirements under the Security
Documents, all property loss or damage or other casualty insurance policies
maintained by or for the benefit of any Loan Party with respect to any assets of
any Loan Party shall contain lenders' loss payable endorsements in favor of the
Collateral Agent on behalf of the Secured Parties in form and substance
satisfactory to the Collateral Agent, which shall provide that all insurance
proceeds (x) in excess of $7,500,000 or (y) payable at any time that a Default
with respect to Section 7.01(a) or (b)(i) caused by the failure to pay amounts
due or an Event of Default shall be continuing, shall be payable directly to the
Collateral Agent on behalf of all the Secured Parties. All such policies also
shall provide that none of the Loan Parties, the Agents nor any other party
shall be a coinsurer thereunder and shall contain a "Replacement Cost
Endorsement", without any deduction for depreciation, "mortgagee's
interest"/"breach of warranty coverage" and such other provisions as any Agent
may reasonably require from time to time to protect the interests of the Secured
Parties. Each such policy also shall (A) with respect to casualty policies,
provide that it shall not be canceled, reduced in amount, materially adversely
modified in coverage or otherwise or not renewed for any reason except upon not
less than 30 days' prior written notice thereof by the insurer to the Collateral
Agent, (B) insure the interests of the Secured Parties regardless of any breach
of or violation by any Loan Party or any other Person of any warranties,
declarations or conditions contained therein, and (C) provide that the Secured
Parties shall not have any obligation for liability for premiums, commissions,
assessments or calls in connection with such insurance or in connection with any
representation or warranty made by any Loan Party in connection with obtaining
such insurance. Vesper shall deliver to each Agent, prior to the cancelation,
reduction, materially adverse modification or nonrenewal of any such policy of
insurance, a certificate of insurance from the provider of such renewal or
replacement policy together with evidence satisfactory to the Collateral Agent
of payment of the premium therefor.
(d) Vesper shall notify the Agents immediately whenever any
separate insurance concurrent in form or contributing in the event of loss with
that required to be maintained under this Section is taken out by any Loan
Party, and shall promptly deliver to the Agents a duplicate original copy of
such policy or policies.
(e) Vesper shall furnish to each Agent within thirty days
after each policy anniversary, or as requested by any Agent
65
71
from time to time, certificates of insurance in respect of all insurance
required to be maintained for the next term, stating the names of the insurance
companies, the amounts of insurance, the dates of expiration thereof, the assets
and risks covered thereby and otherwise demonstrating compliance with clauses
(b), (c) and (d) of this Section 5.07. Such certificates shall (i) be executed
by an authorized representative of each insurer and (ii) certify that such
insurance is fully paid for or payable by installment or otherwise not subject
to cancelation by the insurer except as permitted hereby.
SECTION 5.08. Books and Records; Inspection Rights. Each of
Holdings, Vesper and the Borrower will, and will cause each of the Subsidiaries
to, keep proper books of record and account in which full, true and correct
entries are made of all dealings and transactions in relation to its business
and activities. Each of Holdings, Vesper and the Borrower will, and will cause
each of the Subsidiaries to, permit any representatives designated by any Agent
or any Lender, upon reasonable prior notice, to visit and inspect its
properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its officers and independent
accountants provided an officer of Holdings, Vesper or the Borrower, as the case
may be, is afforded an opportunity to be present, all during normal business
hours but as often as reasonably requested.
SECTION 5.09. Compliance with Laws and Agreements; Maintenance
and Enforcement of Project Documents. Each of Holdings, Vesper and the Borrower
will, and will cause each of the Subsidiaries to, comply with all laws, rules,
regulations and orders of any Governmental Authority (including all
Environmental Laws) applicable to it or its property and with all indentures,
agreements and other instruments binding upon it or its property (including each
Supply Contract, the other Project Documents and each Material Contract), except
where the failure to do so, individually or in the aggregate, would not be
reasonably likely to result in a Material Adverse Effect. Each of Holdings,
Vesper and the Borrower will, and will cause each of the Subsidiaries to,
maintain in full force and effect in all material respects each of the Project
Documents and diligently enforce, to the fullest extent permitted thereunder,
all its material rights, remedies and benefits under such Project Documents;
provided that the termination, voidness or unenforceability of a Supply Contract
for any reason set forth in clause (q)(iii) of the first sentence of Section
7.01 shall not give rise to an Event of Default if the conditions set forth in
clauses (A) and (B) of the proviso to clause (q) of the first sentence of
Section 7.01 shall
66
72
have been satisfied with respect to such termination, voidness or
unenforceability.
SECTION 5.10. Use of Proceeds. The proceeds of Tranche A Loans
and Tranche B Loans under each Participating Credit Agreement will be applied by
the Borrower to purchase Notes, the proceeds of which Vesper will apply or cause
to be applied solely to (a) make the payments due to the applicable Vendor for
the Purchase Price of Vendor Manufactured Items pursuant to the Supply Contract
related to such Participating Credit Agreement, (b) pay duties, taxes and
payments for civil works related solely to such Supply Contract, (c) pay
interest and fee payments under such Participating Credit Agreement, (d) make
regularly scheduled payments of principal in respect of Loans under such
Participating Credit Agreement as and when due prior to the date that is 60
months after the Effective Date or make an optional prepayment of any Tranche C
Borrowing under such Participating Credit Agreement and (e) finance working
capital. The proceeds of Tranche C-1 Loans under any Participating Credit
Agreement will be applied by the Borrower to purchase Notes, the proceeds of
which Vesper will apply or cause to be applied solely to finance interest
payable under such Participating Credit Agreement on Tranche A Loans and Tranche
B Loans thereunder and fees on Tranche A Commitments, Tranche B Commitments and
Tranche C Commitments thereunder. The proceeds of Tranche C-2 Loans under any
Participating Credit Agreement will be applied by the Borrower to purchase
Notes, the proceeds of which Vesper will apply or cause to be applied solely to
finance interest payable under such Participating Credit Agreement on Tranche C
Loans thereunder. Notwithstanding the foregoing sentences of this Section 5.10,
the proceeds of any Loans that are to be applied to make any commitment fee
payments payable pursuant to any Participating Credit Agreement shall be so
applied by the Borrower and shall not be applied by the Borrower to purchase
Notes. Without limitation of the foregoing, no Loans under any Participating
Credit Agreement may be used, directly or indirectly (through the purchase of
Notes or otherwise), to finance the purchase of CPE or equipment or services
provided by a competitor of the Vendor under the Supply Contract (in effect on
the date hereof) related to such Participating Credit Agreement (including any
Vendor under any other Supply Contract), unless such Supply Contract encompasses
equipment or services provided by such a competitor. The proceeds of each
Borrowing shall be applied to the purposes, and in the amounts, set forth in the
Borrowing Request delivered under the applicable Participating Credit Agreement
with respect to such Borrowing on the date on which such Borrowing shall have
been made. The proceeds of each Borrowing will be deposited into bank accounts,
held and transferred in the manner described in the Collateral Agency Agreement.
67
73
SECTION 5.11. Additional Subsidiaries. If any additional
Subsidiary is formed or acquired after the Effective Date, Vesper will, within
fifteen calendar days after such Subsidiary is formed or acquired, (a) notify
the Agents and the Lenders thereof, (b) cause the Collateral and Guarantee
Requirement to be satisfied with respect to such Subsidiary and with respect to
any Equity Interest in or Indebtedness of such Subsidiary owned by or on behalf
of any Loan Party, Sponsor, Shareholder or any Affiliate thereof and (c) cause
such Subsidiary to become a party to the Subordination Agreement.
SECTION 5.12. Collateral Further Assurances. (a) Holdings,
Vesper and the Borrower will, and will cause each Subsidiary to, execute any and
all documents, financing statements, agreements and instruments, and take all
actions, which may be required under any applicable law, or which any Agent or
the Required Lenders may reasonably request, to cause the Collateral and
Guarantee Requirement to be and remain satisfied, all at the expense of the Loan
Parties. Holdings, Vesper and the Borrower also agree to provide to the Agents,
from time to time upon request, evidence reasonably satisfactory to the
Administrative Agents as to the perfection and priority of the Liens created or
intended to be created by the Security Documents.
(b) If any assets (excluding any real property or improvements
thereto or any interest therein and accounts receivable) are acquired by Vesper
or any Subsidiary after the Effective Date, Vesper will, on the earlier of (i)
the most recent three month anniversary of the Effective Date and (ii) the date
on which the aggregate cost of such assets acquired since the previous such
notification exceeds [***] (which aggregate amount shall be calculated by
excluding the assets described in the proviso below), notify the Agents and the
Lenders thereof, and Vesper will cause such assets to be subjected to a first
priority perfected Lien securing the Obligations and will take, and cause the
Subsidiaries to take, such actions as shall be necessary or reasonably requested
by any Agent to grant and perfect such Liens, including actions described in
paragraph (a) of this Section, all at the expense of the Loan Parties; pro
vided, that no asset with a cost of less than [***] (unless such asset is
acquired pursuant to a Supply Contract) shall be subjected to such Liens and no
actions shall be required with respect to such assets, provided further,
however, that the sum of (x) the aggregate cost of the assets exempted from
Liens pursuant to the immediately preceding proviso
[*] Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted material
has been filed separately with the Securities and Exchange Commission.
68
74
and (y) the sum of (1) the aggregate Value of all Permitted Sale-Leasebacks
referred to in clause (x) of the Definition of "Value" at any time outstanding
and (2) the aggregate Value of all Permitted Sale-Leasebacks referred to in
clause (y) of the definition of "Value" at any time entered into (whether or not
thereafter outstanding), in each case, except for Permitted Sale-Leasebacks that
are subject to an agreement assigning the rights under such Permitted
Sale-Leaseback to the Collateral Agent or the Lenders, shall not exceed
[***].
(c) On the date of the most recent monthly anniversary of the
Effective Date, Vesper will cause all the then-existing accounts receivable of
Vesper and its Subsidiaries to be subjected to a Lien securing the Obligations
pursuant to the Pledge of Receivables Agreement or a substantially similar
agreement and will take, and cause the Subsidiaries to take, such actions as
shall be necessary or reasonably requested by any Agent to grant and perfect
such Liens, including actions described in paragraph (a) of this Section, all at
the expense of the Loan Parties.
(d) Vesper shall grant, or cause each Subsidiary to grant, a
Mortgage with respect to each parcel of real property and improvements thereto
legally or beneficially owned by any Loan Party or in respect of which any Loan
Party has an interest; provided that either the cost to any Loan Party acquiring
such parcel and improvements or the value of such parcel and improvements
included on the consolidated balance sheet of Vesper shall equal or exceed
[***]. Vesper shall or shall cause each Subsidiary to, grant a first priority
perfected Lien over or enter into an assignment agreement with respect to
Vesper's or any Subsidiary's rights in each leasehold interest of Vesper or such
Subsidiary in real property and improvements thereto, in each case, in favor of
the Collateral Agent or the Lenders, if (i) the assets of any Loan Party located
or held at or in such real property and improvements (x) are switches
constituting part of the Network Infrastructure, (y) constitute any part of the
network control center for the Project or (z) have an aggregate cost equal to or
greater than [***] or (ii) the assets located or held at or in such real
property and improvements are part of a Permitted Sale-Leaseback arrangement
that has been assigned to the Collateral Agent.
(e) Vesper shall grant a first priority perfected Lien over
the Mirror Authorization to the Collateral Agent or, if specified by the
Collateral Agent, the Lenders, for the benefit of the Secured Parties, securing
the Obligations, if and when it is permitted under applicable Brazilian law to
do so.
[*] Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted material
has been filed separately with the Securities and Exchange Commission.
69
75
(f) Unless prohibited by applicable law, Vesper shall, and
shall cause each Subsidiary to, enter into an assignment agreement in favor of
the Collateral Agent, or, if specified by the Collateral Agent, the Lenders,
with respect to Vesper's or any Subsidiary's rights under (i) any Project
Document (other than the Mirror Authorization and the Interconnection
Agreements) or (ii) any Permitted Sale-Leaseback, the Value of which was greater
than or equal to [***] at the time such Permitted Sale-Leaseback was entered
into. Any such assignment agreement shall be in a form reasonably satisfactory
to the Administrative Agents and shall be accompanied by all necessary
counterparty consents.
SECTION 5.13. Casualty and Condemnation. (a) Vesper will
furnish to the Agents and the Lenders prompt written notice of any casualty or
other damage to any portion of any Collateral or the commencement of any action
or proceeding for the taking of any Collateral or any part thereof or interest
therein under power of eminent domain or by condemnation or similar proceeding.
(b) If any event described in paragraph (a) of this Section
results in Net Proceeds (whether in the form of insurance proceeds, condemnation
award or otherwise), the Collateral Agent is authorized to collect such Net
Proceeds and, if received by Vesper or any Subsidiary, such Net Proceeds shall
be paid over to the Collateral Agent; provided that, if at the time of such
collection or receipt, a Default caused by the failure to pay amounts due or an
Event of Default shall not have occurred and be continuing, then such Net
Proceeds shall be retained by, or paid over to, Vesper if such Net Proceeds
shall not exceed $7,500,000. All such Net Proceeds retained by or paid over to
the Collateral Agent shall be held by the Collateral Agent and released from
time to time to pay the costs of repairing, restoring or replacing the affected
property or purchasing additional property constituting Collateral in accordance
with the terms of this Agreement and the applicable provisions of the Security
Documents, subject to the provisions of the Security Documents regarding
application of such Net Proceeds during a Default.
(c) If any Net Proceeds retained by or paid over to the
Collateral Agent as provided above continue to be held by the Collateral Agent
on the date that any prepayment is due pursuant to Section 2.03(b) in respect of
the event resulting in such Net Proceeds, then such Net Proceeds shall be
applied to prepay Borrowings as provided in Section 2.03(b).
SECTION 5.14. Interest Rate Protection. Vesper will maintain a
prudent hedging policy in accordance with industry standards, which policy shall
include a meeting to be held at least quarterly between the Chief Financial
Officer and other
[*] Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted material
has been filed separately with the Securities and Exchange Commission.
70
76
appropriate Financial Officers of Vesper and the Finance Committee of the
Advisory Committee of Holdings (as such terms are defined in the Shareholders
Agreement). Vesper shall, at the request of the Collateral Agent, promptly send
a copy of the minutes of any such meeting to the Collateral Agent.
SECTION 5.15. Year 2000. The Borrower will use its best
efforts to ensure that any computer systems or software used in the operation of
Vesper's or any of the Subsidiaries' businesses is modified or replaced to the
extent necessary to prevent or avoid the occurrence of any Material Adverse
Effect as a result of the commencement of the year 2000.
SECTION 5.16. Working Capital/CPE Facility; Additional
Facility. Vesper shall maintain in effect (and borrowings there under shall be
available (other than by reason, at any time, of such facility having been fully
drawn down)), from the Effective Date until the fifth anniversary of the
Effective Date, the Working Capital/CPE Facility in an aggregate principal
amount not less than [***], such Facility to be on terms substantially the same
as (or, with respect to economic terms, more favorable than) those contained in
the Working Capital/CPE Facility in effect on the Effective Date. Prior to the
first anniversary of the Effective Date Vesper shall obtain and satisfy all
conditions to the availability of, and thereafter shall maintain in effect for a
period of at least one year, an additional credit facility providing for loans
to Vesper in an aggregate principal amount of not less than [***] (each
"Additional Facility"). The Additional Facility (a) shall provide working
capital funds for Vesper and (b) shall be in form and substance reasonably
satisfactory to the Required Lenders.
SECTION 5.17. The Project. Vesper shall, and shall cause the
Subsidiaries to, develop, construct, install, complete, operate and maintain the
Project (x) in all material respects consistent with, and as contemplated by,
the Business Plan and the Operator Agreements and (y) in a manner in all
material respects consistent with the relevant assumptions in the Business Plan
and complying with Vesper's obligations under the terms of the Mirror
Authorization and other material Governmental Approvals applicable to the
Project. Without limiting, but in furtherance of the foregoing, Vesper shall,
and shall cause the Subsidiaries to, (a) construct and complete the Project in
compliance in all material respects with all applicable national, state and
local engineering, construction, safety and insurance underwriter's codes and
standards and the terms of the Project Documents and (b) conduct its business in
compliance with all applicable laws, including all relevant Governmental
Approvals, Environmental Laws, telecommunications laws and the Mirror
[*] Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted material
has been filed separately with the Securities and Exchange Commission.
71
77
Authorization, except where any failure to comply would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect,
and except that Vesper or any such Subsidiary may, at its expense, contest by
appropriate proceedings conducted in good faith the validity or application of
any such applicable law, so long as (i) none of the Agents, Lenders or Loan
Parties would be subject to any criminal liability for failure to comply
therewith, (ii) all proceedings to enforce such applicable law against the
Agents, Lenders, or Loan Parties, its Subsidiaries or the Project or any part
thereof, shall have been duly stayed and (iii) such contest does not involve any
risk of the sale, forfeiture or loss of any of the assets, rights or interests
of the Loan Parties (including the Mirror Authorization and all other material
Governmental Approvals with respect to ANATEL related thereto). Vesper shall
not, and shall not permit any of the Subsidiaries to, engage in any Additional
Project, unless and until the conditions set forth in clauses (A) through (E)
(inclusive) of the definition of "Project" shall have been satisfied with
respect to such Additional Project and, prior to such conditions having been
satisfied with respect to any Additional Project, neither Vesper nor the
Subsidiaries shall, with respect to such Additional Project, (x) incur or make
any expenditures, or enter into any commitments in respect thereof, in an
aggregate amount in excess of $1,000,000, (y) obtain any Governmental Approval
(or amend or exercise any option or rights under any existing Governmental
Approval), the aggregate monetary obligations or liabilities (including for
penalties) in respect of which could exceed $100,000 or (z) commence services.
SECTION 5.18. Availability and Transfer of Foreign Currency.
Vesper will ensure that all requisite foreign exchange control approvals and
other authorizations, if any, by the Republic of Brazil, the Cayman Islands or
any Governmental Authority therein will be kept current and in full force and
effect to assure the ability of Vesper to purchase and transfer dollars to
enable each Loan Party to satisfy all its obligations under the Loan Documents
and Project Documents in accordance with their respective terms.
SECTION 5.19. Central Bank. (a) Vesper shall obtain the
issuance by the Central Bank of a certificate of registration (the "Registration
Certificate") indicating the amount and the payment dates of each payment of
principal, interest, fees and expenses payable under the Notes no more than 30
days from each date the proceeds of the Notes shall have entered Brazil.
(b) Vesper shall use its best efforts to cause the Central
Bank to issue all necessary applicable authorizations in
72
78
the event Vesper is required to make any payments under the Vesper Guarantee
following a demand on the Vesper Guarantee.
SECTION 5.20. Notarization, Consularization and Translation.
Vesper shall cause the notarization and consular ization by a Brazilian consular
official and the translation into Portuguese by a sworn translator of the Loan
Documents executed outside of Brazil which notarization, consularization and
translation shall occur at its expense within 30 days after the date of the
initial Loan.
SECTION 5.21. Financial Projections. Within 90 days after the
date hereof, Vesper shall produce and provide to the Administrative Agents
revised financial projections on a quarterly basis for the same period as
covered by the Initial Financial Projections and with such scope and in such
format and detail as shall be reasonably required by the Required Lenders. Such
revised financial projections shall be accompanied by a financial model that
shall be reasonably acceptable to the Required Lenders. Following review of such
revised financial projections and related financial model by the Lenders and
approval of such revised financial projections by the Required Lenders, such
approval not to be unreasonably withheld, such revised financial projections
shall constitute the Financial Projections hereunder. In the event that the
Financial Projections, revised in accordance with the preceding two sentences,
indicate a material deviation from the Initial Financial Projection in respect
of the assumptions and projections upon which the numerical components of the
covenants set forth in Sections 6.15 through 6.24 (inclusive) were established,
the parties hereto agree to consider in good faith appropriate revisions to such
numerical components.
ARTICLE VI
Negative Covenants
Until the Commitments have expired or terminated and the
principal of and interest on each Loan and all fees payable under the
Participating Credit Agreements have been paid in full, each of Holdings, Vesper
and the Borrower covenants and agrees with the Lenders that:
SECTION 6.01. Indebtedness; Preferred Stock; Senior
Indebtedness. (a) Holdings, Vesper and the Borrower will not, nor will they
permit any Subsidiary to, create, incur, assume or permit to exist any
Indebtedness or issue any preferred stock, except:
73
79
(i) Indebtedness created under the Loan Documents;
(ii) subject to Section 6.04, Indebtedness of Vesper to any
Subsidiary (other than the Borrower) and of any Subsidiary (other than
the Borrower) to Vesper or any other Subsidiary (other than the
Borrower);
(iii) subject to Section 6.04, Guarantees by Vesper of
Indebtedness of any Subsidiary;
(iv) Indebtedness of Vesper or any Subsidiary (other than the
Borrower) incurred to finance the acquisition, construction or
improvement of office equipment, computer systems and vehicles and for
leasehold improvements for office space, in each case, used in Vesper's
business, including Capital Lease Obligations and any Indebtedness
assumed in connection with the acquisition of any such assets or
secured by a Lien on any such assets prior to the acquisition thereof;
provided that (A) such Indebtedness is incurred prior to or within 120
days after such acquisition or the completion of such construction or
improvement and (B) any such Indebtedness incurred in connection with
any particular acquisition, construction or improvement shall not
exceed 90% of the cost of such acquisition, construction or
improvement; provided further that the aggregate principal amount of
such Indebtedness (and Indebtedness incurred to refinance such
Indebtedness permitted by clause (v) below) shall not exceed [***] at
any time outstanding;
(v) Indebtedness of Vesper incurred to refinance any
Indebtedness referred to in clause (iv) above and Indebtedness of any
Subsidiary (other than the Borrower) incurred to refinance any
Indebtedness of such Subsidiary referred to in clause (iv) above;
provided that (A) the principal amount of any such Indebtedness does
not exceed the principal amount of, plus accrued interest and any
prepayment premiums applicable to, the Indebtedness refinanced thereby,
(B) any such Indebtedness has a scheduled maturity date that is on or
after the scheduled maturity date of the Indebtedness refinanced
thereby, (C) any such Indebtedness has a weighted average life to
maturity that is equal to or longer than the remaining weighted average
life to maturity of the Indebtedness refinanced thereby (determined
immediately prior to giving effect to such refinancing), (D) any such
Indebtedness does not include any provisions that may require mandatory
Repayment thereof prior to scheduled maturity, other than scheduled
repayments taken into account in determining
[*] Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted material
has been filed separately with the Securities and Exchange Commission.
74
80
compliance with clause (C) above and other provisions that are not
materially more burdensome than any such provisions included in the
Indebtedness refinanced thereby, (E) any such Indebtedness shall not be
secured by any Lien other than Liens on assets securing the
Indebtedness being refinanced thereby, and shall not be Guaranteed by
any Subsidiary other than any Subsidiary that Guaranteed the
Indebtedness being refinanced thereby, and (F) if the Indebtedness
being refinanced is subordinated to the Obligations, then such
refinancing Indebtedness shall be subordinated to the Obligations on
terms no less favorable to the Lenders than the Indebtedness being
refinanced;
(vi) Indebtedness of Vesper that constitutes a Primary
Subordinated Obligation;
(vii) other Indebtedness of Vesper under credit facilities
maintained by Vesper, including obligations under the Working
Capital/CPE Facility and the Additional Facility, in an aggregate
principal amount at any time outstanding not exceeding the excess, if
any, of (A) the excess of (1) [***] over (2) the aggregate Value of all
Permitted Sale-Leasebacks referred to in clause (y) of the definition
of "Value" at any time entered into (whether or not thereafter
outstanding) over (B) the aggregate Value of all Permitted
Sale-Leasebacks referred to in clause (x) of the definition of "Value"
from time to time outstanding; provided that (i) at any time not more
than [***] of unsecured Indebtedness included in such other
Indebtedness shall be subject to scheduled repayment (at maturity or
otherwise) within the succeeding twelve month period and (ii) with
respect to the Working Capital/CPE Facility, such Facility is on terms
substantially the same as those terms contained in the Working
Capital/CPE Facility in effect on the Effective Date;
(viii) Excluded Indebtedness; and
(ix) Indebtedness of the Borrower that constitutes both a
Primary Subordinated Obligation and a Commitment Fee Funding Amount (as
such term is defined in the Sponsor Support Agreement).
(b) Notwithstanding paragraph (a) above, Holdings, Vesper and
the Borrower will not, nor will they permit any Subsidiary to, create, incur,
assume or permit to exist any Senior Indebtedness that would result in the
aggregate principal amount of all outstanding Senior Indebtedness exceeding (x)
[***] at any time prior to the commencement of the Tranche
[*] Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted material
has been filed separately with the Securities and Exchange Commission.
75
81
B Availability Period and satisfaction of all conditions to the initial Tranche
B Borrowing and (y) [***] at any time thereafter, less, in the case of (x) and
(y), the aggregate Value of all Permitted Sale-Leasebacks referred to in clause
(y) of the definition of "Value" at any time entered into (whether or not
thereafter outstanding).
(c) Notwithstanding any other provision in this Agreement to
the contrary, the parties agree that, in the event that BNDES provides financing
to Vesper and the Subsidiaries through a credit facility or otherwise (a "BNDES
Financing"), then (i) the first [***] of such financing (including any unfunded
commitment to make such financing available to Vesper and the Subsidiaries)
shall be allocated (x) 50% of the net proceeds thereof to refinance Loans
outstanding under the Initial Participating Credit Agreement or to replace Loans
that would have been borrowed under the Initial Participating Credit Agreement
and (y) to the extent that the Indebtedness giving rise to such net proceeds is
then permitted pursuant to the terms of Section 6.01(a)(vii), 50% of the net
proceeds thereof to be used by Vesper as otherwise permitted by this Agreement
in connection with the Project as Vesper determines in its sole discretion
(including for the purposes specified in clause (i)(x) above), (ii) any amount
in excess of [***] shall be used for the purposes specified in clause (i)(x)
above; provided that, if, at any time that BNDES commits itself to provide any
such financing to Vesper and the Subsidiaries, Vesper is unable to use the net
proceeds of such financing for the purposes specified in clause (i)(y) above
(because the Indebtedness giving rise to such net proceeds is not then permitted
pursuant to the terms of Section 6.01(a)(vii) or otherwise), then such net
proceeds shall be used for the purposes set forth in clause (i)(x) above and
(iii) neither Vesper nor the Subsidiaries will be permitted to incur any BNDES
Financing that may not be prepaid at any time at the option of the borrower
thereof, without payment of any premium or penalty.
SECTION 6.02. Liens. (a) Holdings, Vesper and the Borrower
will not, nor will they permit any Subsidiary to, create, incur, assume or
permit to exist any Lien on any property or asset now owned or hereafter
acquired by it, or assign or sell any income or revenues (including accounts
receivable) or rights in respect of any thereof, except:
(i) Liens created under the Security Documents;
(ii) Permitted Encumbrances;
[*] Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted material
has been filed separately with the Securities and Exchange Commission.
76
82
(iii) any Lien on any property or asset of Vesper or any
Subsidiary existing on the date hereof and set forth in Schedule 6.02;
provided that (A) such Lien shall not apply to any other property or
asset of Holdings, Vesper, the Borrower or any other Subsidiary and (B)
such Lien shall secure only those obligations which it secures on the
date hereof;
(iv) any Lien existing on any property or asset prior to the
date that such property or asset was first acquired by Vesper or any
Subsidiary (other than the Borrower) or any Affiliate thereof or
existing on any property or asset of any Person that becomes a
Subsidiary after the date hereof prior to the time such Person becomes
a Subsidiary; provided that (A) such Lien is not created in
contemplation of or in connection with such acquisition or such Person
becoming a Subsidiary, (B) such Lien shall not apply to any other
property or assets of Holdings, Vesper or any Subsidiary and (C) such
Lien shall secure only those obligations which it secures on the date
of such acquisition or the date such Person becomes a Subsidiary, as
the case may be, and refinancings thereof that satisfy the criteria set
forth in clause (v) of Section 6.01(a);
(v) Liens on office equipment, computer systems and vehicles
and on leasehold improvements for office space acquired, constructed or
improved by Vesper or a Subsidiary (other than the Borrower); provided
that (A) such Liens secure only Indebtedness permitted by clause (iv)
of Section 6.01(a) or a refinancing thereof permitted by clause (v) of
Section 6.01(a), (B) such Liens and the Indebtedness secured thereby
are incurred prior to or within 120 days after such acquisition or the
completion of such construction or improvement, (C) the Indebtedness
secured thereby does not exceed 90% of the cost of acquiring,
constructing or improving such office equipment, computer systems,
vehicles or office space and (D) such Liens shall not apply to any
other property or assets of Vesper or any Subsidiary;
(vi) Liens securing Indebtedness (excluding any Indebtedness
arising in connection with BNDES Financing) permitted under clause
(vii) of Section 6.01(a); provided that (x) such Liens shall apply only
to accounts receivable (and related collection accounts), CPE or Towers
of Vesper and the Subsidiaries, (y) such Liens applying to accounts
receivable (and related collection accounts) or Towers shall not at any
time secure an aggregate principal amount of such Indebtedness
(including any undrawn amounts of Indebtedness under any relevant
existing credit facility) in excess of
77
83
the lesser of (1) [***] and (2) the excess of (I) [***] over (II) the
sum of (a) the aggregate principal amount of Indebtedness arising in
connection with BNDES Financings secured by Liens as described in
clause (vii) below and (b) the lesser of (m) [***] and (n) the sum of
(i) the aggregate principal amount of Indebtedness referred to in this
clause (y) outstanding at such time prior to any calculation hereunder
and (ii) the sum outstanding at such time referred to in the second
proviso to this clause (vi), and (z) such Liens applying to CPE shall
not at any time secure any aggregate principal of such Indebtedness
(including any undrawn amounts of Indebtedness under any relevant
existing credit facility) in excess of [***]; provided further that the
sum from time to time outstanding of (A) the aggregate Value of all
Permitted Sale-Leasebacks referred to in clause (x) of the definition
of "Value" from time to time outstanding and (B) the aggregate Value of
all Permitted Sale-Leasebacks referred to in clause (y) of the
definition of "Value" at any time entered into (whether or not
thereafter outstanding) shall be applied at any time to reduce, first,
such [***] and, to the extent that such sum exceeds from time to time
[***], to reduce, second, such [***]; provided further that any Lien
applying to accounts receivable (and related collection accounts)
securing Indebtedness referred to in clause (vi) or (vii) of this
Section 6.02(a) shall be granted or otherwise created either (X)
pursuant to an agreement in form and substance substantially similar to
the Assignment of Credit Rights Agreement or (Y) any other agreement
reasonably satisfactory to the Administrative Agents, provided that, in
this latter case, in the event that the Collateral Agent shall so
require, Vesper shall, and shall cause the Subsidiaries, to grant or
otherwise create a Lien, covering accounts receivables (and related
collection accounts) of Vesper and the Subsidiaries in favor of the
Secured Parties and securing the Obligations pursuant to an agreement
in form and substance substantially similar to such other agreement
referred to in this clause (Y); and
(vii) Liens applying only to accounts receivable (and related
collection accounts) of Vesper and the Subsidiaries securing
Indebtedness arising in connection with BNDES Financing; provided that
such Liens shall not at any time secure an aggregate principal amount
of such Indebtedness greater than the excess, if any, of (x) [***] over
(y) the lesser of (1) [***] and (2) the sum of (A) the aggregate
principal amount of Indebtedness referred to in clause (y) of the first
proviso to Section 6.02(a)(vi)
[*] Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted material
has been filed separately with the Securities and Exchange Commission.
78
84
outstanding at such time and (B) the sum outstanding at such time
referred to in the second proviso to Section 6.02(a)(vi); provided
further that any Lien applying to accounts receivable (and related
collection accounts) securing Indebtedness referred to in clause (vi)
or (vii) of this Section 6.02(a) shall be granted or otherwise created
either (X) pursuant to an agreement in form and substance substantially
similar to the Assignment of Credit Rights Agreement or (Y) any other
agreement reasonably satisfactory to the Administrative Agents,
provided that, in this latter case, in the event that the Collateral
Agent shall so require, Vesper shall, and shall cause the Subsidiaries,
to grant or otherwise create a Lien, covering accounts receivables (and
related collection accounts) of Vesper and the Subsidiaries in favor of
the Secured Parties and securing the Obligations pursuant to an
agreement in form and substance substantially similar to such other
agreement referred to in this clause (Y).
(b) Notwithstanding the foregoing, Vesper will not, nor will
it permit any Subsidiary to, create incur, assume or permit to exist any Lien
(other than Liens created under the Security Documents) on the Mirror
Authorization.
SECTION 6.03. Fundamental Changes. (a) Neither Holdings,
Vesper nor the Borrower will, nor will they permit any Subsidiary to, merge into
or consolidate with any other Person, or permit any other Person to merge into
or consolidate with it, or sell, transfer, lease or otherwise dispose of (in one
transaction or in a series of transactions) all or substantially all of its
assets, or all or substantially all of the Equity Interests of any of its
Subsidiaries (in each case, whether now owned or hereafter acquired), or
liquidate or dissolve, except that, if at the time thereof and immediately after
giving effect thereto no Default shall have occurred and be continuing (i) any
Subsidiary (other than the Borrower) may merge into Vesper or a Subsidiary
(other than the Borrower), (ii) any Subsidiary (other than the Borrower) may
sell, transfer, lease or otherwise dispose of its assets to Vesper or to another
Subsidiary (other than the Borrower) or (iii) any Subsidiary (other than the
Borrower) may liquidate or dissolve if Vesper determines in good faith that such
liquidation or dissolution is in its best interests and is not materially
disadvantageous to the Lenders.
(b) Vesper will not, nor will it permit any of its
Subsidiaries to, engage in any business other than the Project.
(c) The Borrower will not engage at any time in any business
or activities other than borrowing the Loans, the acquisition and holding of the
Notes and the entering into and
79
85
performing of the Loan Documents to which it is a party and activities
incidental thereto required to maintain its corporate existence. The Borrower
will not own or acquire any assets (other than cash, Permitted Investments and
Notes) or incur any liabilities other than under the Loan Documents and imposed
by law.
SECTION 6.04. Investments, Loans, Advances, Guarantees and
Acquisitions; Asset Sales. (a) Vesper will not, nor will it permit any of its
Subsidiaries to, purchase, hold or acquire (including pursuant to any merger
with any Person that was not a wholly owned Subsidiary prior to such merger) any
Equity Interests in, evidences of indebtedness or other securities (including
any option, warrant or other right to acquire any of the foregoing) of, make or
permit to exist any loans or advances to, Guarantee any obligations of, or make
or permit to exist any investment or any other interest in, any other Person, or
purchase or otherwise acquire (in one transaction or a series of transactions)
any assets of any other Person constituting a business unit, except:
(i) Permitted Investments, provided that the aggregate
dollar-equivalent value of any such Permitted Investments denominated
in Reais shall not exceed (A) [***] at any time prior to the first
anniversary of the Effective Date, (B) [***] at any time thereafter
prior to the second anniversary of the Effective Date, (C) [***] at any
time thereafter prior to the third anniversary of the Effective Date,
(D) [***] at any time thereafter prior to the fourth anniversary of the
Effective Date, or (E) [***] at any time thereafter, in each case such
dollar-equivalent value being calculated by reference to the PTAX 800
Rate for such date of calculation;
(ii) subject to Section 6.12, investments by Vesper and its
Subsidiaries (other than the Borrower) in Equity Interests in their
respective Subsidiaries;
(iii) loans or advances made by Vesper to any Subsidiary
(other than the Borrower) and made by any Subsidiary (other than the
Borrower) to Vesper or any other Subsidiary (other than the Borrower);
(iv) Guarantees by Vesper of obligations of the Subsidiaries;
(v) excluding the Borrower, investments received in connection
with the bankruptcy or reorganization of, or settlement of delinquent
accounts and disputes with, customers and suppliers, in each case in
the ordinary course of business;
[*] Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted material
has been filed separately with the Securities and Exchange Commission.
80
86
(vi) excluding the Borrower, minority interest investments not
to exceed [***] in the aggregate prior to January 1, 2002, and [***]
thereafter; provided that any increase in such minority interest
investments in excess of [***] shall (x) not be permitted to be made in
any fiscal quarter of Vesper, if, during any of the four fiscal
quarters preceding such fiscal quarter, (1) an Event of Default related
to any covenant contained in Sections 6.15 to 6.22 (inclusive) shall
have previously occurred (whether or not the same shall be continuing
at such time) or (2) any deemed remedy of the failure to observe or
perform any such covenant shall have been effected pursuant to Section
7.02, (y) not be permitted to be made at any time that a Default shall
have occurred and be continuing and (z) shall be disclosed in writing
by Vesper to the Collateral Agent; provided further that any of Vesper
and the Subsidiaries (other than the Borrower) may make a minority
interest investment in any amount at any time if (a) such amount is
funded solely with additional cash equity contributions to Vesper not
related to the obligations of the Shareholders with respect to the
Total Equity Commitment (as such term is defined in the Sponsor Support
Agreement), (b) during any of the four fiscal quarters preceding the
fiscal quarter of Vesper in which such minority interest investment is
proposed to be made either of the events described in clause (x)(1) or
(x)(2) of the immediately preceding proviso shall not have occurred,
(c) a Default shall not be continuing at such time and (d) such
minority interest investment, the amount thereof and the source of
funds therefor shall have been disclosed in writing by Vesper to the
Collateral Agent.
(vii) pursuant to the Subsidiary Guarantee Agreement; and
(viii) the Notes issued by Vesper to the Borrower.
(b) Vesper will not, nor will it permit any of its
Subsidiaries to, sell, transfer, lease or otherwise dispose of any asset,
including any Equity Interest in any other Person owned by it, nor will Vesper
permit any Subsidiary to issue (other than to Vesper or a wholly owned
Subsidiary) any additional Equity Interest in such Subsidiary, except:
[*] Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted material
has been filed separately with the Securities and Exchange Commission.
81
87
(i) sales of CPE, obsolete, uneconomic or surplus equipment
and Permitted Investments, in each case in the ordinary course of
business;
(ii) transfers constituting investments permitted by paragraph
(a) of this Section;
(iii) sales, transfers and dispositions to Vesper or a
Subsidiary (other than the Borrower); and
(iv) the sale of any real property listed on Schedule 6.04 or
a Tower in a Permitted Sale-Leaseback complying with Section 6.11;
provided that all sales, transfers, leases and other dispositions permitted
hereby (other than pursuant to clause (iii) above) shall be made for fair value
and solely for cash consideration.
SECTION 6.05. Hedging Agreements. None of Holdings, Vesper or
the Borrower will, nor will they permit any of the Subsidiaries to, enter into
any Hedging Agreement, other than Hedging Agreements entered into by Vesper in
the ordinary course of business to hedge or mitigate risks to which Vesper or
any Subsidiary is exposed in the conduct of its business or the management of
its liabilities.
SECTION 6.06. Restricted Payments. Neither Holdings, Vesper
nor the Borrower will, nor will they permit any Subsidiary to, declare or make,
or agree to pay or make, directly or indirectly, any Restricted Payment, except
(a) Vesper may declare and pay dividends with respect to its capital stock
payable solely in additional shares of its capital stock and (b) Subsidiaries
(other than the Borrower) may declare and pay dividends and distributions
ratably with respect to their capital stock.
SECTION 6.07. Transactions with Affiliates. (a) Neither
Holdings, Vesper nor the Borrower will, nor will they permit any Subsidiary to,
sell, lease or otherwise transfer any property or assets to, or purchase, lease
or otherwise acquire any property or assets from, or enter into any agreement
with, or otherwise engage in any other transactions with, any of its Affiliates,
except (a) transactions that are at prices and on terms and conditions not less
favorable to Vesper or such Subsidiary than could be obtained on an arm's-length
basis from unrelated third parties, (b) transactions between or among Vesper and
its Subsidiaries (other than the Borrower) not involving any other Affiliate,
(c) any Restricted Payment permitted by Section 6.06, and (d) transactions
expressly contemplated by the
82
88
Intercompany Agreements that are conducted in accordance with the terms of the
Intercompany Agreements. Notwithstanding the foregoing, neither Holdings, Vesper
nor the Subsidiaries shall pay any management or other similar fees to any
Affiliate of Vesper other than pursuant to the Know-How Agreement in effect on
the date hereof.
(b) Neither Holdings nor Vesper will, nor will they permit any
of the Subsidiaries to, create, incur, assume or permit to exist any
Indebtedness (or any other obligation or liability of the type defined as a
"Subordinated Obligation" in the Subordination Agreement) owing to or for the
benefit of any Affiliate of Holdings, Vesper or any Subsidiary, unless (i)
excluding the Borrower, such Affiliate shall have become a party to the
Subordination Agreement and agreed to subordinate such Indebtedness (or such
other obligation or liability) as provided therein and (ii) in the case of any
such Indebtedness, such Indebtedness is evidenced by one or more promissory
notes or similar instruments that are pledged pursuant to the Pledge Agreement.
SECTION 6.08. Restrictive Agreements. None of Holdings, Vesper
or the Borrower will, nor will they permit any Subsidiary to, directly or
indirectly, enter into, incur or permit to exist any agreement or other
arrangement that prohibits, restricts or imposes any condition upon the ability
of any Subsidiary to pay dividends or other distributions with respect to any of
its Equity Interests or to make or repay loans or advances to the Borrower or to
Guarantee Indebtedness of the Borrower; provided that (a) the foregoing shall
not apply to restrictions and conditions imposed by law or by any Loan Document
and (b) the foregoing shall not apply to restrictions and conditions existing on
the date hereof identified on Schedule 6.08 (but shall apply to any extension or
renewal of, or any amendment or modification expanding the scope of, any such
restriction or condition).
SECTION 6.09. Repayment of Indebtedness. None of Holdings,
Vesper or the Borrower will, nor will they permit any Subsidiary to, make any
Repayment in respect of, or make any payment in violation of any subordination
terms of, any Indebtedness of Vesper or any Subsidiary except (a) any Repayment
of Indebtedness resulting in a prepayment of Loans pursuant to Section 2.03(d)
and (b) Repayments described in any of the clauses of the proviso to Section
2.03(e).
SECTION 6.10. [Intentionally Omitted.]
83
89
SECTION 6.11. Limitation on Sale-Leaseback Trans actions. None
of Holdings, Vesper or the Borrower will, nor will they permit any Subsidiary
to, enter into any arrangement, directly or indirectly, whereby it shall sell or
transfer any property, real or personal, used or useful in its business, whether
now owned or hereafter acquired, and thereafter rent or lease such property or
other property that it intends to use for substantially the same purpose or
purposes as the property sold or transferred, other than (a) any such
arrangement that relates solely to any real property listed in Schedule 6.04
that is sold and leased back by Vesper on or prior to 90 days after the
Effective Date for a term of not less than eight years from the Effective Date
or (b) any such arrangement that relates solely to Towers that are sold and
leased back by Vesper for a term of not less than eight years from the Effective
Date (clauses (a) and (b), collectively, "Permitted Sale-Leasebacks"); provided
that sum of (1) the aggregate Value of all Permitted Sale-Leasebacks referred to
in clause (x) of the definition of "Value" at any time outstanding and (2) the
aggregate Value of all Permitted Sale-Leasebacks referred to in clause (y) of
the definition of "Value" at any time entered into (whether or not thereafter
outstanding) shall not exceed [***].
SECTION 6.12. Subsidiaries. Vesper will not have any
Subsidiary that is not wholly owned (directly or indirectly) by Vesper taking
into account any qualifying shares held by any director in accordance with
applicable law.
SECTION 6.13. Amendment of Material Documents. (a) None of
Holdings, Vesper or the Borrower will, nor will they permit any Subsidiary to,
amend, modify or waive any of its rights under (i) any Intercompany Agreement,
(ii) its certificate of incorporation, by-laws or other organizational
documents, (iii) any Project Document (other than the Supply Contracts), or (iv)
any Material Contracts in each case in any manner that would impair in any
material respect the value of the interests or rights of any Loan Party
thereunder (after taking into account any benefit received by any such Loan
Party in connection with any such amendment, modification or waiver of its
rights) or that would impair in any material respect the rights or interests of
any Agent or any Lender.
(b) None of Holdings, Vesper or the Borrower will, nor will
they permit any Subsidiary to, amend, modify or waive any of its rights under
any Supply Contract, other than such amendments, modifications or waivers that
do not have (i) a material adverse effect on the Loan Parties' ability to
construct or operate the Project as contemplated by the Project Documents and
the Business Plan, (ii) materially impair the Lenders' rights or benefits
hereunder or under the Loan Documents or (iii) have a Material Adverse Effect.
[*] Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted material
has been filed separately with the Securities and Exchange Commission.
84
90
SECTION 6.14. Business of Holdings. Holdings will not engage
in any business or activity other than the ownership of all the outstanding
Equity Interests of Vesper and activities incidental thereto. Holdings will not
own or acquire any assets (other than Equity Interests of Vesper, cash and
Permitted Investments) or incur any liabilities (other than liabilities under
the Loan Documents and imposed by law, including tax liabilities and other
liabilities incidental to its existence).
SECTION 6.15. Capital Expenditures. (a) Vesper will not permit
the aggregate cumulative amount of Capital Expenditures made by Vesper and the
Subsidiaries for all quarterly periods since inception through (and including)
any quarterly period ending on any date set forth below to exceed the amount set
forth below opposite such date; provided, however, that this clause (a) shall
not apply during any period when the ratio of Senior Indebtedness to Annualized
EBITDA for such period is [***] to 1 or less:
Date Amount
---- ------
March 31, 2000 $[***]
June 30, 2000 $[***]
September 30, 2000 $[***]
December 31, 2000 $[***]
March 31, 2001 $[***]
June 30, 2001 $[***]
September 30, 2001 $[***]
December 31, 2001 $[***]
March 31, 2002 $[***]
June 30, 2002 $[***]
September 30, 2002 $[***]
December 31, 2002 $[***]
March 31, 2003 $[***]
June 30, 2003 $[***]
September 30, 2003 $[***]
December 31, 2003 $[***]
[*] Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted material
has been filed separately with the Securities and Exchange Commission.
85
91
Date Amount
---- ------
March 31, 2004 $[***]
June 30, 2004 $[***]
September 30, 2004 $[***]
December 31, 2004 $[***]
March 31, 2005 $[***]
June 30, 2005 $[***]
September 30, 2005 $[***]
December 31, 2005 $[***]
March 31, 2006 $[***]
June 30, 2006 $[***]
September 30, 2006 $[***]
December 31, 2006 $[***]
March 31, 2007 $[***]
June 30, 2007 $[***]
September 30, 2007 $[***]
December 31, 2007 $[***]
(b) Vesper will not make any Capital Expenditures for Network
Infrastructure in excess of [***] in the aggregate related to a single contract
(or other arrangement) or a series of related contracts (or other arrangements)
with a Person (and/or Affiliates of such Person) supplying or otherwise
providing such Capital Expenditure, unless such Capitalized Expenditures are
financed with Indebtedness, the proceeds of which are paid to such Person
(and/or such Affiliates).
SECTION 6.16. Total Indebtedness to Total Capitalization.
Vesper will not permit the ratio of Total Indebtedness to Total Capitalization
as of any date to exceed (a) [***] to 1.00 or (b) with respect to any date on or
after the earlier of (i) the third anniversary of the Effective Date and (ii)
the date on which the initial Tranche B Borrowing has been made, [***] to 1.00
if as of such date of determination the ratio of Total Indebtedness to
Annualized EBITDA shall be less than [***] to 1.00.
SECTION 6.17. Senior Indebtedness to Total Capitalization.
Vesper will not permit the ratio of Senior Indebtedness to Total Capitalization
as of any date to exceed (a) if such date is
[*] Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted material
has been filed separately with the Securities and Exchange Commission.
86
92
prior to the third anniversary of the Effective Date and no undrawn Tranche A
Commitments exist and a Tranche B Borrowing has been requested by the Borrower,
(i) [***] to 1.00, if both the ratio of Senior Indebtedness to Annualized EBITDA
(the "First Ratio") as of such date shall be equal to or less than [***] to 1.00
and the ratio of Annualized EBITDA to Annualized Net Interest Expense (the
"Second Ratio") as of such date shall be equal to or greater than [***] to 1.00,
(ii) [***] to 1.00, if both the First Ratio as of such date shall be greater
than [***] to 1.00, but equal to or less than [***] to 1.00, and the Second
Ratio as of such date shall be equal to or greater than [***] to 1.00 and (iii)
[***] to 1.00, if either the First Ratio as of such date shall be greater than
[***] to 1.00 or the Second Ratio at such date shall be less than [***] to 1.00,
or (b) if such date is on or after the third anniversary of the Effective Date,
(i) [***] to 1.00, if both the First Ratio as of such third anniversary shall be
equal to or less than [***] to 1.00 and the Second Ratio as of such third
anniversary shall be equal to or greater than [***] to 1.00, (ii) [***] to 1.00,
if both the First Ratio as of such third anniversary shall be greater than [***]
to 1.00, but equal to or less than [***] to 1.00, and the Second Ratio as of
such third anniversary shall be equal to or greater than [***] to 1.00 and (iii)
[***] to 1.00, if either the First Ratio as of such third anniversary shall be
greater than [***] to 1.00 or the Second Ratio as of such third anniversary
shall be less than [***] to 1.00.
SECTION 6.18. Senior Indebtedness to Annualized EBITDA. Vesper
will not permit the ratio of Senior Indebtedness to Annualized EBITDA at any
time during any fiscal quarter set forth below to exceed the ratio set forth
opposite such fiscal quarter (a) if the ratio of Senior Indebtedness to Total
Capitalization at such time is being determined pursuant to clause (a)(i) or
(b)(i) of Section 6.17, on the table under the heading "Table One" below or (b)
if the ratio of Total Senior Indebtedness to Total Capitalization at such time
is being determined pursuant to clause (a)(ii) or (b)(ii) of Section 6.17, on
the table under the heading "Table Two" below or (c) if the ratio of Senior
Indebtedness to Total Capitalization at such time is being determined pursuant
to clause (a)(iii) or (b)(iii) of Section 6.17, on the table under the heading
"Table Three" below:
Table One
---------
Fiscal Quarter Ending Ratio
--------------------- -----
March 31, 2002 [***]
June 30, 2002 [***]
[*] Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted material
has been filed separately with the Securities and Exchange Commission.
87
93
Fiscal Quarter Ending Ratio
--------------------- -----
September 30, 2002 [***]
December 31, 2002 [***]
March 31, 2003 [***]
June 30, 2003 [***]
September 30, 2003 [***]
December 31, 2003 [***]
March 31, 2004 [***]
June 30, 2004 [***]
September 30, 2004 [***]
December 31, 2004 [***]
March 31, 2005 [***]
June 30, 2005 [***]
September 30, 2005 [***]
December 31, 2005 [***]
March 31, 2006 [***]
June 30, 2006 [***]
September 30, 2006 [***]
December 31, 2006 [***]
March 31, 2007 [***]
June 30, 2007 [***]
September 30, 2007 [***]
December 31, 2007 [***]
Table Two
---------
Fiscal Quarter Ending Ratio
--------------------- -----
March 31, 2002 [***]
June 30, 2002 [***]
September 30, 2002 [***]
December 31, 2002 [***]
March 31, 2003 [***]
[*] Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted material
has been filed separately with the Securities and Exchange Commission.
88
94
Fiscal Quarter Ending Ratio
--------------------- -----
June 30, 2003 [***]
September 30, 2003 [***]
December 31, 2003 [***]
March 31, 2004 [***]
June 30, 2004 [***]
September 30, 2004 [***]
December 31, 2004 [***]
March 31, 2005 [***]
June 30, 2005 [***]
September 30, 2005 [***]
December 31, 2005 [***]
March 31, 2006 [***]
June 30, 2006 [***]
September 30, 2006 [***]
December 31, 2006 [***]
March 31, 2007 [***]
June 30, 2007 [***]
September 30, 2007 [***]
December 31, 2007 [***]
Table Three
-----------
Fiscal Quarter Ending Ratio
--------------------- -----
March 31, 2002 [***]
June 30, 2002 [***]
September 30, 2002 [***]
December 31, 2002 [***]
March 31, 2003 [***]
June 30, 2003 [***]
September 30, 2003 [***]
December 31, 2003 [***]
[*] Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted material
has been filed separately with the Securities and Exchange Commission.
89
95
Fiscal Quarter Ending Ratio
--------------------- -----
March 31, 2004 [***]
June 30, 2004 [***]
September 30, 2004 [***]
December 31, 2004 [***]
March 31, 2005 [***]
June 30, 2005 [***]
September 30, 2005 [***]
December 31, 2005 [***]
March 31, 2006 [***]
June 30, 2006 [***]
September 30, 2006 [***]
December 31, 2006 [***]
March 31, 2007 [***]
June 30, 2007 [***]
September 30, 2007 [***]
December 31, 2007 [***]
SECTION 6.19. Total Indebtedness to Annualized EBITDA. Vesper
will not permit the ratio of Total Indebtedness to Annualized EBITDA at any time
to exceed (i) [***] to 1.00 if the ratio of Total Indebtedness to Total
Capitalization at such time is greater than [***] to 1.00, or (ii) otherwise,
the ratio set forth below opposite the period then applicable:
Fiscal Quarter Ending Ratio
--------------------- -----
March 31, 2002 [***]
June 30, 2002 [***]
September 30, 2002 [***]
December 31, 2002 [***]
March 31, 2003 [***]
June 30, 2003 [***]
September 30, 2003 [***]
December 31, 2003 [***]
[*] Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted material
has been filed separately with the Securities and Exchange Commission.
90
96
Fiscal Quarter Ending Ratio
--------------------- -----
March 31, 2004 [***]
June 30, 2004 [***]
September 30, 2004 [***]
December 31, 2004 [***]
March 31, 2005 [***]
June 30, 2005 [***]
September 30, 2005 [***]
December 31, 2005 [***]
March 31, 2006 [***]
June 30, 2006 [***]
September 30, 2006 [***]
December 31, 2006 [***]
March 31, 2007 [***]
June 30, 2007 [***]
September 30, 2007 [***]
December 31, 2007 [***]
SECTION 6.20. Minimum Fixed Charge Coverage Ratio. Vesper will
not permit the ratio of Annualized EBITDA as of the last day of any fiscal
quarter set forth below to Annualized Fixed Charges as of the last day of such
fiscal quarter to be less than the ratio set forth below opposite such fiscal
quarter:
Fiscal Quarter Ending Ratio
--------------------- -----
March 31, 2002 [***]
June 30, 2002 [***]
September 30, 2002 [***]
December 31, 2002 [***]
March 31, 2003 [***]
June 30, 2003 [***]
September 30, 2003 [***]
December 31, 2003 [***]
March 31, 2004 [***]
[*] Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted material
has been filed separately with the Securities and Exchange Commission.
91
97
Fiscal Quarter Ending Ratio
--------------------- -----
June 30, 2004 [***]
September 30, 2004 [***]
December 31, 2004 [***]
March 31, 2005 [***]
June 30, 2005 [***]
September 30, 2005 [***]
December 31, 2005 [***]
March 31, 2006 [***]
June 30, 2006 [***]
September 30, 2006 [***]
December 31, 2006 [***]
March 31, 2007 [***]
June 30, 2007 [***]
September 30, 2007 [***]
December 31, 2007 [***]
SECTION 6.21. Minimum Annualized EBITDA to Annualized Net
Interest Expense. Vesper will not permit the ratio of Annualized EBITDA to
Annualized Net Interest Expense as of the last day of any fiscal quarter set
forth below to be less than the ratio set forth below opposite such fiscal
quarter (i.e. a less positive number or a more negative number):
Fiscal Quarter Ending Ratio
--------------------- -----
September 30, 2001 [***]
December 31, 2001 [***]
March 31, 2002 [***]
June 30, 2002 [***]
September 30, 2002 [***]
December 31, 2002 [***]
March 31, 2003 [***]
June 30, 2003 [***]
[*] Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted material
has been filed separately with the Securities and Exchange Commission.
92
98
Fiscal Quarter Ending Ratio
--------------------- -----
September 30, 2003 [***]
December 31, 2003 [***]
March 31, 2004 [***]
June 30, 2004 [***]
September 30, 2004 [***]
December 31, 2004 [***]
March 31, 2005 [***]
June 30, 2005 [***]
September 30, 2005 [***]
December 31, 2005 [***]
March 31, 2006 [***]
June 30, 2006 [***]
September 30, 2006 [***]
December 31, 2006 [***]
March 31, 2007 [***]
June 30, 2007 [***]
September 30, 2007 [***]
December 31, 2007 [***]
provided, however, that Vesper will not permit such ratio to be less than [***]
to 1.00 as of the last day of any fiscal quarter on which the ratio of Senior
Indebtedness to Total Capitalization is permitted under Section 6.17 to exceed
[***] to 1.00.
SECTION 6.22. Minimum EBITDA. Vesper will not permit the
aggregate cumulative amount of Consolidated EBITDA for any period commencing
with (and including) January 1, 2000 and ending on the last day of each period
set forth below (calculating Consolidated EBITDA on a cumulative basis for each
such period) to be less (i.e. a less positive number or a more negative number)
than the amount set forth below opposite such period:
[*] Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted material
has been filed separately with the Securities and Exchange Commission.
93
99
Period Ending Amount
------------- ------
June 30, 2000 $[***]
September 30, 2000 $[***]
December 31, 2000 $[***]
March 31, 2001 $[***]
June 30, 2001 $[***]
September 30, 2001 $[***]
December 31, 2001 $[***]
March 31, 2002 $[***]
June 30, 2002 $[***]
September 30, 2002 $[***]
December 31, 2002 $[***]
March 31, 2003 $[***]
June 30, 2003 $[***]
September 30, 2003 $[***]
December 31, 2003 $[***]
March 31, 2004 $[***]
June 30, 2004 $[***]
September 30, 2004 $[***]
December 31, 2004 $[***]
SECTION 6.23. Minimum Consolidated Revenue. Vesper will not
permit Consolidated Revenue for any fiscal quarter set forth below to be less
than the amount set forth opposite such fiscal quarter:
Fiscal Quarter Ending Amount
--------------------- ------
June 30, 2001 $[***]
September 30, 2001 $[***]
December 31, 2001 $[***]
March 31, 2002 $[***]
June 30, 2002 $[***]
September 30, 2002 $[***]
December 31, 2002 $[***]
[*] Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted material
has been filed separately with the Securities and Exchange Commission.
94
100
Fiscal Quarter Ending Amount
--------------------- ------
March 31, 2003 $[***]
June 30, 2003 $[***]
September 30, 2003 $[***]
December 31, 2003 $[***]
March 31, 2004 $[***]
June 30, 2004 $[***]
September 30, 2004 $[***]
December 31, 2004 $[***]
March 31, 2005 $[***]
June 30, 2005 $[***]
September 30, 2005 $[***]
December 31, 2005 $[***]
March 31, 2006 $[***]
June 30, 2006 $[***]
September 30, 2006 $[***]
December 31, 2006 $[***]
March 31, 2007 $[***]
June 30, 2007 $[***]
September 30, 2007 $[***]
December 31, 2007 $[***]
SECTION 6.24. Minimum Total Subscribers. Vesper will not
permit the Total Subscribers at any time during any period set forth below to be
less than the number set forth opposite such period:
Period Number of Subscribers
------ ---------------------
June 30, 2001 to and including September 29, 2001 [***]
September 30, 2001 to and including December 30, 2001 [***]
December 31, 2001 to and including March 30, 2002 [***]
[*] Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted material
has been filed separately with the Securities and Exchange Commission.
95
101
Period Number of Subscribers
------ ---------------------
March 31, 2002 to and including June 29, 2002 [***]
June 30, 2002 to and including September 29, 2002 [***]
September 30, 2002 to and including December 30, 2002 [***]
December 31, 2002 to and including March 30, 2003 [***]
March 31, 2003 to and including June 29, 2003 [***]
June 30, 2003 to and including September 29, 2003 [***]
September 30, 2003 to and including December 30, 2003 [***]
December 31, 2003 to and including March 30, 2004 [***]
March 31, 2004 to and including June 29, 2004 [***]
June 30, 2004 to and including September 29, 2004 [***]
September 30, 2004 to and including December 30, 2004 [***]
December 31, 2004 to and including March 30, 2005 [***]
March 31, 2005 to and including June 29, 2005 [***]
June 30, 2005 to and including September 29, 2005 [***]
September 30, 2005 to and including December 30, 2005 [***]
December 31, 2005 to and including March 30, 2006 [***]
March 31, 2006 to and including June 29, 2006 [***]
June 30, 2006 to and including September 29, 2006 [***]
September 30, 2006 to and including December 30, 2006 [***]
December 31, 2006 to and including March 30, 2007 [***]
[*] Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted material
has been filed separately with the Securities and Exchange Commission.
96
102
Period Number of Subscribers
------ ---------------------
March 31, 2007 to and including June 29, 2007 [***]
June 30, 2007 to and including September 29, 2007 [***]
September 30, 2007 to and including December 30, 2007 [***]
December 31, 2007 to and including March 30, 2008 [***]
ARTICLE VII
Events of Default
SECTION 7.01. Events of Default. If any of the following
events ("Events of Default") shall occur:
(a) the Borrower shall fail to pay any principal of any Loan
when and as the same shall become due and payable, whether at the due
date thereof or at a date fixed for prepayment thereof or otherwise;
(b) (i) the Borrower shall fail to pay any interest on any
Loan or any fee or any other amount (other than an amount referred to
in clause (a) of this Section) payable under this Agreement or any
other Loan Document, when and as the same shall become due and payable,
or (ii) any Shareholder shall fail to pay (or cause to be paid) any
amount required to be paid under the provisions of Section 3.01 or
Section 4.01 or 4.02 of the Sponsor Support Agreement, when and as the
same shall have become due and payable, and such failure shall continue
unremedied for a period of, in the case of clause (i) or, with respect
to Section 3.01(d), 4.01 or 4.02 of the Sponsor Support Agreement,
clause (ii), three Business Days (it being understood that amounts
payable under Section 3.01(d), 4.01 or 4.02 of the Sponsor Support
Agreement shall not be deemed to be due and payable for purposes of
this paragraph (b) until the expiration of the five Business Day period
set forth in the Sponsor Support Agreement for the payment of such
amounts) or, with respect to Section 3.01(a), (b) or (c) of the Sponsor
Support Agreement, seven Business Days;
(c) any representation or warranty made or deemed made by or
on behalf of any Loan Party, Sponsor or Affiliate of
[*] Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted material
has been filed separately with the Securities and Exchange Commission.
97
103
any Sponsor in or in connection with any Loan Document or any amendment
or modification thereof or waiver thereunder, or in any report,
certificate, financial statement or other document furnished pursuant
to or in connection with any Loan Document or any amendment or
modification thereof or waiver thereunder, shall prove to have been
incorrect in any material respect when made or deemed made; provided
that, if such representation or warranty shall have been incorrect
solely due to the failure of any Loan Party to observe or perform any
covenant, condition or agreement contained in any Loan Document and if
any party that made (or was deemed to have made) any such
representation or warranty provides to the Collateral Agent reasonably
satisfactory evidence that such failure shall have been remedied,
within the period of time, if any, specified in any relevant clause of
this Section 7.01 to effect a remedy of such failure, then the making
of such incorrect representation or warranty shall be deemed to not
have constituted an Event of Default hereunder;
(d) Subject to Section 7.02, Holdings, Vesper or the Borrower
shall fail to observe or perform any covenant, condition or agreement
contained in Section 5.02, 5.04 (with respect to the existence of the
Borrower and Vesper), 5.05, 5.07, 5.10, 5.16 or 5.21 or in Article VI;
(e) any Loan Party, Sponsor or Affiliate of any Sponsor shall
fail to observe or perform any covenant, condition or agreement
contained in any Loan Document (other than those specified in clause
(a), (b) or (d) of this Section), and such failure shall continue
unremedied for a period of 30 days after notice thereof from the
Collateral Agent to the Borrower and Vesper (which notice will be given
at the request of any Administrative Agent or any Lender);
(f) any Loan Party shall fail to make any payment (whether of
principal or interest and regardless of amount) in respect of any
Material Indebtedness, when and as the same shall become due and
payable;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that
enables or permits (with or without the giving of notice, the lapse of
time or both) the holder or holders of any Material Indebtedness or any
trustee or agent on its or their behalf to cause any Material
Indebtedness to become due, or to require the prepayment, repurchase,
redemption or defeasance thereof, prior to its scheduled maturity;
provided that this clause (g) shall not apply to
98
104
secured Indebtedness that becomes due as a result of the voluntary sale
or transfer of the property or assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation,
reorganization, "concordata" or other relief in respect of any Loan
Party, Shareholder or Sponsor or its debts, or of a substantial part of
its assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for any Loan Party, Shareholder or
Sponsor or for a substantial part of its assets, and, in any such case,
such proceeding or petition shall continue undismissed for 60 days or
an order or decree approving or ordering any of the foregoing shall be
entered; provided that any event or condition specified in any of
clause (h), (i), (j) or (k) that occurs with respect to any Sponsor or
its related Shareholder shall not result in an Event of Default so long
as at any time during the continuance of such event or condition (x)
such Shareholder's Outstanding Equity Commitment (as such term is
defined in the Sponsor Support Agreement) is zero and (y) such Sponsor
and such Shareholder shall not exercise any voting power, direct or
indirect, in or through any Equity Interests in Holdings, Vesper or the
Subsidiaries.
(i) subject to the proviso to clause (h) of this Section 7.01,
any Loan Party, Shareholder or Sponsor shall (i) voluntarily commence
any proceeding or file any petition seeking liquidation,
reorganization, "concordata" or other relief under any Federal, state
or foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition
described in clause (h) of this Section, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for any Loan Party, Shareholder or
Sponsor or for a substantial part of its assets, (iv) file an answer
admitting the material allegations of a petition filed against it in
any such proceeding, (v) make a general assignment for the benefit of
creditors or (vi) take any action for the purpose of effecting any of
the foregoing;
(j) subject to the proviso to clause (h) of this Section 7.01,
any Loan Party, Shareholder or Sponsor shall
99
105
become unable, admit in writing its inability or fail generally to pay
its debts as they become due;
(k) subject to the proviso to clause (h) of this Section 7.01,
one or more judgments for the payment of money in an aggregate amount
in excess of $7,500,000 shall be rendered against any Loan Party,
Shareholder or Sponsor or any combination thereof and the same shall
remain undischarged for a period of 30 consecutive days during which
execution shall not be effectively stayed, or any action shall be
legally taken by a judgment creditor to attach or levy upon any assets
of any Loan Party, Shareholder or Sponsor to enforce any such judgment;
(l) any Lien purported to be created under any Security
Document shall cease to be, or shall be asserted by any Loan Party,
Sponsor, Shareholder or Affiliate of any Loan Party that is a party
thereto not to be, in any material respect, a valid and perfected Lien
on any Collateral, with the priority required by the applicable
Security Document, except (i) as a result of the sale or other
disposition of the applicable Collateral in a transaction permitted
under the Loan Documents or (ii) as a result of the Collateral Agent's
failure to maintain possession of any stock certificates, promissory
notes or other instruments delivered to it under the Pledge Agreement;
(m) any Loan Document shall cease to be, or shall be asserted
by any Loan Party, Sponsor, Shareholder or Affiliate of any Loan Party
not to be, in any material respect, the legal, valid, binding and
enforceable obligation of any Loan Party, Sponsor, Shareholder or
Affiliate of any Loan Party;
(n) there shall have occurred any condemnation, seizure,
compulsory acquisition, expropriation or nationalization of all or a
material part of the assets of Vesper and the Subsidiaries, taken as a
whole, or any capital stock of any Loan Party; provided that the
condemnation, seizure, compulsory acquisition, expropriation or
nationalization of any capital stock of any Subsidiary (other than the
Borrower) shall not constitute an Event of Default if (i) such event
would not be reasonably likely to result in a Material Adverse Effect,
and (ii) such event would not be reasonably likely to materially
adversely effect the rights and interests of the Lenders;
(o) a Change in Control shall occur; provided that if (other
than with respect to clause (a) or (b) of the
100
106
definition of Change of Control) no Default has occurred and is
continuing on the date that is the later of (i) the fifth anniversary
of the Effective Date and (ii) the date on which all remaining
Commitments have been utilized or terminated and the aggregate
principal amount of the outstanding Loans are less than 25% of the
aggregate amount of Loans that were outstanding as of the date on which
the remaining Commitments were terminated, a Change of Control shall
not constitute an Event of Default after such date;
(p) the loss, revocation, suspension, voidness,
unenforceability or material impairment (including (x) material adverse
modification or non-renewal thereof or (y) imposition of aggregate
penalties in excess of $25,000,000 under or in respect of the Mirror
Authorization or any other Governmental Approvals with respect to
ANATEL (excluding from the amount of such penalties (i) any amount
payable out of additional cash equity contributions to Vesper not
related to the obligations of the Shareholders with respect to the
Total Equity Commitment (as such term is defined in the Sponsor Support
Agreement) and (ii) any indemnity payment received by Vesper from any
third party (excluding each Loan Party, Sponsor, Shareholder and
Affiliate of each Loan Party) in respect of such penalties, in the case
of either (i) or (ii) to the extent that Vesper shall have notified the
Collateral Agent of (1) the timing, amount and purpose of such equity
contributions or (2) the receipt and amount of any such indemnity
payment) of the Mirror Authorization or any other Governmental Approval
named on Schedule 3.03 shall occur;
(q) in relation to any Supply Contract, (i) any Vendor shall
terminate its Supply Contract as a result of any default or breach by
Vesper thereunder, or (ii) Vesper shall terminate any Supply Contract
other than as a result of a material breach by the applicable Vendor,
or (iii) any Supply Contract shall be terminated by either party
thereto for any other reason or shall become void or unenforceable;
provided that, in the case of clause (iii) above, such termination
shall not constitute an Event of Default if (A) Vesper has executed,
within 90 calendar days after such termination, an agreement to replace
such Supply Contract on terms and conditions (including in respect of
the scope of equipment supplied, services provided and economic terms)
no less favorable to Vesper than the terms and conditions of such
replaced Supply Contract and (B) such replacement Supply Contract will
enable Vesper to complete construction, installation, completion and
operation of the Project as contemplated by the Business Plan and the
Mirror Authorization (including the application to ANATEL in respect
thereof);
101
107
(r) any Loan Party or Affiliate of any Loan Party shall fail
to comply with any of its obligations under any Project Document
(excluding any payment obligation of any Shareholder under the
Shareholders Agreement in respect of which there is a corresponding
obligation under the Sponsor Support Agreement), except where the
failure to do so, individually or in the aggregate, would not be
reasonably likely to result in a Material Adverse Effect, or any
Project Document (excluding the Mirror Authorization and each Supply
Contract) is terminated or shall become void or unenforceable;
(s) Brazil shall declare a moratorium on the payment of
external debt or take other action generally or impose any obligation
on Vesper in respect of the Mirror Authorization, or otherwise that, in
any case, is reasonably likely to result in a Material Adverse Effect;
(t) Vesper suspends or ceases or threatens to suspend or cease
to carry on its business, or the Project is at any time wholly or
substantially abandoned or suspended, whether or not in stages and
whether or not by reason of force majeure beyond the control of Vesper
or any other Person;
(u) any decision taken by any Sponsor with respect to or
affecting either the Borrower or Vesper shall not have been taken in
good faith without regard to the affiliations (or lack thereof) of such
Sponsor to any other telecommunications project in Brazil in which such
Sponsor has any ownership or other interest, direct or indirect, other
than the Project, unless the consequences of such decision shall have
been fully reversed within 30 days after such decision shall have been
taken; or
(v) any condition set forth in Schedule 4.01 is not satisfied
by the date set forth in Schedule 4.01 with respect thereto;
then, and in every such event (other than an event with respect to the Borrower
or Vesper described in clause (h) or (i) of this Section), and at any time
thereafter during the continuance of such event, the Collateral Agent may, and
at the request of the Required Enforcement Lenders shall, by notice to the
Borrower, take either or both of the following actions, at the same or different
times: (i) terminate the Commitments, and thereupon the Commitments shall
terminate immediately, and (ii) declare the
102
108
Loans then outstanding to be due and payable in whole, and thereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and all fees and other obligations of the Borrower accrued
under the Loan Documents, shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower; and in case of any event with respect to the
Borrower or Vesper described in clause (h) or (i) of this Section, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued under the Loan Documents, shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower; and in
case of any event described in clause (h), (i), (j) or (k) of this Section that
occurs with respect to any Sponsor or its related Shareholder (assuming for this
purpose the absence of any proviso to clause (h) of this Section) and at any
time thereafter during the continuance of such event, the Collateral Agent may,
and at the request of the Required Enforcement Lenders shall, by notice to the
Borrower, terminate the Commitments, and thereupon the Commitments shall
terminate immediately. If any Loans are declared due and payable pursuant to
clause (ii) above or if the Collateral Agent commences the exercise of remedies
under any of the Security Documents to foreclose upon or sell any Collateral
while an Event of Default has occurred and is continuing, then the Commitments
shall automatically terminate.
SECTION 7.02. Remedy Requirements for Financial Covenants.
Notwithstanding anything in this Agreement to the contrary, for the purposes of
clause (b), solely with respect to the failure of any Shareholder to comply with
any obligations contained in clause (b) of the first sentence of Section 3.01 of
the Sponsor Support Agreement, and clause (d) of Section 7.01, any failure to
observe or perform any covenant contained in Section 6.16, 6.17, 6.18, 6.19,
6.20, 6.21, or 6.22 (and any related failure of any Shareholder as aforesaid
that gives rise to a breach of any covenant contained in Section 6.17 or 6.18)
shall be deemed remedied if but only if:
(a) with respect to a failure to observe or perform any such
covenant in Section 6.16, 6.17, 6.18 or 6.19, as applicable, a
contribution by the Shareholders to Holdings and further contributed by
Holdings to paid up capital of Vesper, or a loan to Vesper by the
Sponsors or Shareholders constituting a Primary Subordinated
Obligation, is made, in cash, within seven Business Days of any Loan
Party having knowledge of such failure in an amount sufficient to
reduce
103
109
(and which shall be applied to reduce) Senior Indebtedness or Total
Indebtedness, as applicable, to a level resulting in compliance with
such covenant; or
(b) with respect to a failure to observe or perform any such
covenant, as applicable, a contribution by the Shareholders to Holdings
and further contributed by Holdings to paid up capital of Vesper, or a
loan to Vesper by the Sponsors or Shareholders constituting Primary
Subordinated Obligations, is made, in cash, within seven Business Days
of any Loan Party having knowledge of such failure in an amount
sufficient to increase Annualized EBITDA or, in the case of Section
6.22, Consolidated EBITDA such that if such contribution had been made
on the date at which Annualized EBITDA or Consolidated EBITDA, as
applicable, was calculated for purposes of such Section, such
Annualized EBITDA or Consolidated EBITDA, as applicable, would have
been increased to a level resulting in compliance with such covenant;
provided, that (i) such amounts contributed and such loans made pursuant to
clause (b) of this Section 7.02 shall not be included for purposes of
calculating Funded Equity, (ii) the remedies described in clauses (a) and (b)
above may not be exercised in more than (x) two consecutive fiscal quarters and
(y) four fiscal quarters in the aggregate, (iii) in any four fiscal quarter
period, there must be a period of at least two consecutive fiscal quarters
during which such remedies have not been exercised and (iv) no more than
$8,000,000 for each remedy and $25,000,000 in the aggregate for all such
remedies may be applied to effect the remedies described above.
SECTION 7.03. Remedy Requirements for Certain Share holder
Defaults. Notwithstanding anything in this Agreement to the contrary, for the
purposes of clause (b) (ii) of Section 7.01, any Event of Default with respect
to any Shareholder specified therein shall be deemed remedied, if but only if, a
contribution by another Shareholder to Holdings and further contributed by
Holdings to paid-up capital of Vesper, or a loan to Vesper by the Sponsor
related to another Shareholder or by another Shareholder constituting a Primary
Subordinated Obligation, is made, in cash, on the date of such Event of Default
in an amount equal to the amount that such defaulting Shareholder shall have
failed to pay, which failure shall have given rise to such Event of Default;
provided that no more than $25,000,000 in the aggregate (excluding from such
aggregate amount any amount that any defaulting Shareholder shall have
reimbursed or otherwise repaid within seven days to the Shareholder or Sponsor
which shall have made such contribution or
104
110
loan) for all the remedies described in this Section 7.03 may be applied to
effect the remedies described herein.
ARTICLE VIII
Miscellaneous
SECTION 8.01. Notices. All notices and other communi cations
provided for herein shall be given as provided in Section 11.01 of the
Collateral Agency Agreement.
SECTION 8.02. Waivers; Amendments. (a) No failure or delay by
either Agent or any Lender in exercising any right or power hereunder or under
any other Loan Document shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Agents and the Lenders hereunder and under the other Loan
Documents are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of any Loan Document or
consent to any departure by any Loan Party therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this Section,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan shall not be construed as a waiver of any
Default, regardless of whether an Agent or any Lender may have had notice or
knowledge of such Default at the time.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except in
accordance with Section 8.01 of the Collateral Agency Agreement.
SECTION 8.03. Expenses; Indemnity; Damage Waiver. (a) The
Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by each
Initial Lender and each Agent, including the reasonable fees, charges and
disbursements of counsel for each of the Initial Lenders and Agents, in
connection with the preparation and administration of the Loan Documents or any
amendments, modifications or waivers thereof (whether or not the transactions
contemplated hereby are consummated), (ii) all reasonable out-of-pocket expenses
incurred by any Agent or any Lender, including the reasonable fees, charges and
disbursements of any counsel for any Agent or any Lender, in connection with
105
111
the enforcement or protection of its rights in connection with the Loan
Documents, including its rights under this Section, or in connection with the
Loans, including all such costs and expenses incurred during any workout,
restructuring or negotiations in respect of such Loans and (iii) all reasonable
out-of-pocket expenses of the Initial Lenders and the Agents with respect to
syndication of the Loans and Commitments to other Lenders, including printing
and travel expenses and reasonable fees, charges and disbursements of counsel
for the Initial Lenders or the Agents.
(b) The Borrower shall indemnify each Agent and each Lender,
and each Related Party of any of the foregoing Persons (each such Person being
called an "Indemnitee") against, and hold each Indemnitee harmless from, any and
all losses, claims, damages, liabilities and related expenses, including the
fees, charges and disbursements of any counsel for any Indemnitee, incurred by
or asserted against any Indemnitee arising out of, in connection with, or as a
result of (i) the execution or delivery of any Loan Document or any other
agreement or instrument contemplated hereby, the performance by the parties to
the Loan Documents of their respective obligations thereunder or the
consummation of the Transactions or any other transactions contemplated hereby,
(ii) any Loan or the use of the proceeds therefrom, (iii) any actual or alleged
presence or release of Hazardous Materials on or from any Mortgaged Property or
any other property at any time owned or operated by the Borrower, Holdings or
any of its other Subsidiaries, or any Environmental Liability related in any way
to the Borrower, Holdings or any of its other Subsidiaries, or (iv) any actual
or prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses have resulted from the
gross negligence or wilful misconduct of such Indemnitee.
(c) To the extent that the Borrower fails to pay any amount
required to be paid by it to the Collateral Agent under paragraph (a) or (b) of
this Section, each Lender severally agrees to pay to the Collateral Agent such
Lender's pro rata share (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Collateral Agent in its capacity as such. For purposes hereof, a
Lender's "pro rata
106
112
share" shall be determined based upon its share of the sum of the total
outstanding Loans and Commitments at the time.
(d) To the extent permitted by applicable law, none of the
Borrower, Vesper or Holdings shall assert, and each hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement or any
agreement or instrument contemplated hereby, the Transactions, any Loan or the
use of the proceeds thereof.
(e) All amounts due under this Section shall be payable not
later than 30 days after written demand therefor.
SECTION 8.04. Successors and Assigns. (a) The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby, except that
none of the Borrower, Vesper or Holdings may assign or otherwise transfer any of
its rights or obligations hereunder without the prior written consent of each
Lender (and any attempted assignment or transfer by the Borrower, Vesper or
Holdings without such consent shall be null and void). Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby and, to the extent expressly contemplated hereby, the Related
Parties of each of the Agents and the Lenders) any legal or equitable right,
remedy or claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under its Participating Credit Agreement
and the other Loan Documents in accordance with such Participating Credit
Agreement.
SECTION 8.05. Survival. All covenants, agreements,
representations and warranties made by the Loan Parties in the Loan Documents
and in the certificates or other instruments delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the
execution and delivery of the Loan Documents and the making of any Loans,
regardless of any investigation made by any such other party or on its behalf
and notwithstanding that any Agent or any Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any fee
107
113
or any other amount payable under any Participating Credit Agreement is
outstanding and unpaid and so long as the Commitments have not expired or
terminated. The provisions of Section 8.03 shall survive and remain in full
force and effect regardless of the consummation of the transactions contemplated
hereby, the repayment of the Loans, the expiration or termination of the
Commitments or the termination of this Agreement or any provision hereof.
SECTION 8.06. Counterparts; Integration; Effective ness. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement,
the other Loan Documents and any separate letter agreements with respect to the
Borrower's and other Persons' agreement to cooperate with respect to marketing,
selling or syndicating Loans and Commitments or with respect to fees payable to
the Initial Lenders or any Agent constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Agents and when the Agents
shall have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 8.07. Severability. Any provision of this Agreement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 8.08. Right of Setoff. If an Event of Default shall
have occurred and be continuing, each Lender and each of its Affiliates is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other obligations at
any time owing by such Lender or Affiliate to or for the credit or the account
of the Borrower against any of and all the
108
114
obligations of the Borrower now or hereafter existing under this Agreement held
by such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement and although such obligations may be unmatured. The
rights of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have.
SECTION 8.09. Governing Law; Jurisdiction; Consent to Service
of Process. (a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
(b) Each of the Borrower, Vesper and Holdings hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of the Supreme Court of the State of New York sitting
in New York County and of the United States District Court of the Southern
District of New York, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to any Loan Document, or for recognition
or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in such New York State or, to
the extent permitted by law, in such Federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement or any other Loan
Document shall affect any right that either Agent or any Lender may otherwise
have to bring any action or proceeding relating to this Agreement or any other
Loan Document against the Borrower, Vesper or Holdings or its properties in the
courts of any jurisdiction.
(c) Each of the Borrower, Vesper and Holdings hereby
irrevocably and unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection which it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Agreement or any other Loan Document in any court referred to in paragraph
(b) of this Section. Each of the parties hereto hereby irrevocably waives, to
the fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement, other than as hereinafter
provided, irrevocably consents to service of process in the manner provided for
notices in Section 8.01. Each of Holdings, Vesper and the Borrower hereby
irrevocably designates, appoints and empowers CT Corporation System, with
offices on the
109
115
date hereof at 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, as its
designee, appointee and agent to receive and accept for and on its behalf, and
in respect of its property, service of any and all legal process, summons,
notices and documents which may be served in any action or proceeding described
in paragraph (b) above. If for any reason such designee, appointee and agent
shall cease to act as such, each of Holdings, Vesper and the Borrower agrees to
designate a new designee, appointee and agent in New York City on the terms and
for the purposes of this provision satisfactory to the Administrative Agent
under this Agreement. Nothing in this Agreement or any other Loan Document will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.
SECTION 8.10. WAIVERS. (a) WAIVER OF JURY TRIAL. EACH PARTY
HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
(b) WAIVER OF SOVEREIGN IMMUNITY. TO THE EXTENT THAT ANY LOAN
PARTY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT
OR FROM ANY LEGAL PROCESS, SUCH LOAN PARTY HEREBY WAIVES SUCH IMMUNITY AND
AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR OTHERWISE, IN ANY SUCH
SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE
JURISDICTION OF THE COURTS NAMED IN SECTION 8.09(b), THAT IT IS IMMUNE FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION, EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF
OR ITS PROPERTY, OR ATTACHMENT EITHER PRIOR TO JUDGMENT OR IN AID OF EXECUTION,
BY REASON OF SOVEREIGN IMMUNITY, OR OTHERWISE, THAT THE VENUE OF THE SUIT,
ACTION OR PROCEEDING IS IMPROPER OR THAT THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR THE SUBJECT MATTER HEREOF OR THEREOF MAY NOT BE ENFORCED IN OR BY
SUCH COURTS.
SECTION 8.11. Headings. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
110
116
SECTION 8.12. Confidentiality. Each of the Agents and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its and its Affiliates'
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent requested
by any regulatory authority, (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party
to this Agreement or any Participating Credit Agreement, (e) in connection with
the exercise of any remedies hereunder or any suit, action or proceeding
relating to this Agreement or any other Loan Document or the enforcement of
rights hereunder or thereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to any assignee of
or Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under the Loan Documents, (g) with the consent of the
Borrower or (h) to the extent such Information (i) becomes publicly available
other than as a result of a breach of this Section or (ii) becomes available to
any Agent or any Lender on a nonconfidential basis from a source other than the
Borrower or Vesper. For the purposes of this Section, "Information" means all
information received from the Borrower or Vesper relating to the Borrower,
Vesper or the Project, other than any such information that is publicly
available or available to any Agent or any Lender on a nonconfidential basis
prior to disclosure by the Borrower or Vesper. Any Person required to maintain
the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
111
117
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
VESPER SAO PAULO S.A.,
by
--------------------------
Name:
Title:
VESPER HOLDING SAO PAULO S.A.,
by
--------------------------
Name:
Title:
112
118
VESPER SAO PAULO CAYMAN,
by
--------------------------
Name:
Title:
113
119
CITIBANK, N.A., as Collateral and
Intercreditor Agent,
by
--------------------------
Name:
Title:
SOCIETE GENERALE, NEW YORK BRANCH,
as Administrative Agent,
by
--------------------------
Name:
Title:
114
120
BANCO CITIBANK S.A., as Collateral
and Intercreditor Agent,
by
--------------------------
Name:
Title:
115
121
SCHEDULE 1.01(A)
EXCHANGE RATES
-----------------------------------------------------------------------------------------------------------
Period Exchange Rates
------ --------------
-----------------------------------------------------------------------------------------------------------
December 31, 1999 1.8500
-----------------------------------------------------------------------------------------------------------
March 31, 2000 1.8710
-----------------------------------------------------------------------------------------------------------
June 30, 2000 1.8920
-----------------------------------------------------------------------------------------------------------
September 30, 2000 1.9441
-----------------------------------------------------------------------------------------------------------
December 31, 2000 1.9962
-----------------------------------------------------------------------------------------------------------
March 31, 2001 2.0231
-----------------------------------------------------------------------------------------------------------
June 30, 2001 2.0500
-----------------------------------------------------------------------------------------------------------
September 30, 2001 2.0740
-----------------------------------------------------------------------------------------------------------
December 31, 2001 2.0979
-----------------------------------------------------------------------------------------------------------
March 31, 2002 2.1140
-----------------------------------------------------------------------------------------------------------
June 30, 2002 2.1300
-----------------------------------------------------------------------------------------------------------
September 30, 2002 2.1380
-----------------------------------------------------------------------------------------------------------
December 31, 2002 2.1460
-----------------------------------------------------------------------------------------------------------
March 31, 2003 2.1630
-----------------------------------------------------------------------------------------------------------
June 30, 2003 2.1800
-----------------------------------------------------------------------------------------------------------
September 30, 2003 2.1908
-----------------------------------------------------------------------------------------------------------
December 31, 2003 2.2015
-----------------------------------------------------------------------------------------------------------
March 31, 2004 2.2158
-----------------------------------------------------------------------------------------------------------
June 30, 2004 2.2300
-----------------------------------------------------------------------------------------------------------
September 30, 2004 2.2371
-----------------------------------------------------------------------------------------------------------
December 31, 2004 2.2442
-----------------------------------------------------------------------------------------------------------
March 31, 2005 2.2551
-----------------------------------------------------------------------------------------------------------
June 30, 2005 2.2660
-----------------------------------------------------------------------------------------------------------
September 30, 2005 2.2769
-----------------------------------------------------------------------------------------------------------
December 31, 2005 2.2878
-----------------------------------------------------------------------------------------------------------
March 31, 2006 2.2989
-----------------------------------------------------------------------------------------------------------
June 30, 2006 2.3100
-----------------------------------------------------------------------------------------------------------
September 30, 2006 2.3211
-----------------------------------------------------------------------------------------------------------
116
122
-----------------------------------------------------------------------------------------------------------
Period Exchange Rates
------ --------------
-----------------------------------------------------------------------------------------------------------
December 31, 2006 2.3322
-----------------------------------------------------------------------------------------------------------
March 31, 2007 2.3436
-----------------------------------------------------------------------------------------------------------
June 30, 2007 2.3549
-----------------------------------------------------------------------------------------------------------
September 30, 2007 2.3662
-----------------------------------------------------------------------------------------------------------
December 31, 2007 2.3775
-----------------------------------------------------------------------------------------------------------
March 31, 2008 2.3891
-----------------------------------------------------------------------------------------------------------
June 30, 2008 2.4006
-----------------------------------------------------------------------------------------------------------
September 30, 2008 2.4122
-----------------------------------------------------------------------------------------------------------
December 31, 2008 2.4237
-----------------------------------------------------------------------------------------------------------
March 31, 2009 2.4355
-----------------------------------------------------------------------------------------------------------
June 30, 2009 2.4472
-----------------------------------------------------------------------------------------------------------
September 30, 2009 2.4590
-----------------------------------------------------------------------------------------------------------
December 31, 2009 2.4708
-----------------------------------------------------------------------------------------------------------
117
123
SCHEDULE 1.01(B)
INTERCOMPANY AGREEMENTS
July 30, 1999 - Technical Services Agreement - BCI and Vesper Sao Paulo
S.A.
December 23, 1999 - Know How Agreement - BCI and Vesper Sao Paulo S.A.
December 23, 1999 - Secondment Agreement - BCI and Vesper Sao Paulo
S.A.
118
124
SCHEDULE 1.01(C)
MORTGAGED PROPERTIES
No Mortgaged Properties
119
125
SCHEDULE 1.01(D)
PROJECT DOCUMENTS
Shareholders Agreement
Know-How Agreement
Secondment Agreement
Technical Services Agreement
Amendment No. 1 to the Technical Services Agreement
Lucent Supply Contract
Mirror Authorization
Interconnection Agreements
1. Between Vesper and Intelig (Bonari Holding), dated August 5, 1999.
2. Between Vesper and Embratel, dated August 10, 1999.
3. Between Vesper and Telefonica, dated August 20, 1999.
4. Between Vesper and Companhia Telefonica xx Xxxxx do Xxxxx,
dated August 20, 1999.
5. Between Vesper and BCP, dated November 16, 1999.
6. Between Vesper and Tess, dated November 26, 1999.
The Telecom and Eletropaulo Rental Agreement
120
126
SCHEDULE 3.03
GOVERNMENT APPROVALS
Financing Transactions
o ANATEL - approval of execution of Voting Agreement
o Public Registry - filings
o Central Bank - filings (prior approvals for subsequent Note
issuances)
o Central Bank - prior acknowledgement of the Vesper Guarantee
Operational Transactions
o Board of Commerce filings, corporate acts
121
127
SCHEDULE 3.05
REAL PROPERTY
See attached list of leased real property.
122
128
SCHEDULE 3.06
DISCLOSED MATTERS
No Disclosed Matters.
123
129
SCHEDULE 3.11
SUBSIDIARIES
Subsidiary: Vesper Sao Paulo Cayman
Ownership interest of Vesper Sao Paulo S.A.: 100%
124
130
SCHEDULE 3.12
EXISTING INSURANCE
1) Third Party Insurance
2) Property Insurance
125
131
[ACE logo] ACE Seguradora [Handwritten]:
Rue Liboro Sedaro, 377 16th floor
Sao Paulo - SP [illegible]
01074-900 Xxxxxx
Brazil Costa
Fax
00 0000-0000 Tel.
00 0000-0000 Fax
To: Xxxx X. Xxxx From: Marolo J. Guarrato
------------------------------------------------------------- -----------------------------------------------------
Company: Dept. Xxxxx Corretora de Seguros Fax: 0000-0000
------------------------------------------------------------- -----------------------------------------------------
[illegible]: Nurik Costa Tel: 0000-0000
------------------------------------------------------------- -----------------------------------------------------
Fax: 0000-0000 / 0000-0000 Date: December 22, 1999
------------------------------------------------------------- -----------------------------------------------------
Tel: 0000-0000 / 0000-0000 E-mail: [illegible]
------------------------------------------------------------- -----------------------------------------------------
Fax number: CAS/VESPER/002-99 Pages, including cover:
------------------------------------------------------------- -----------------------------------------------------
Dear Gentlemen:
We inform you that our proposal to issue policies for the period of 90 (ninety)
days was approved by IRB-Brazil Re., considering the coverage, limits and
deductibles presented in our letter CAS/VESPER/001-99 OF 12/22/99, with the
following conditions:
o Net Premium = US$ 39,607.61 (90 days), emphasizing collection of 7% referring
to I.O.F. and cost of the policy of R$ 25.00.
o Payment at 30 days without interest.
In light of the above, we thank you and keep ourselves at your disposal for any
clarifications.
Sincerely,
[signature]
1
132
Certificate of Insurance
This Certificate is issued exclusively for information, and does not grant any
right to its possessors. This Certificate does not amend, extend or alter the
coverage granted under the policy issued.
Broker: Xxxxx Corretora de Seguros Ltda
Insured: VESPER Holding Sao Paulo S.A. / VESPER Sao Paulo S.A.
COVERAGE
This document certifies that the insurance policy mentioned below was issued in
favor of the insured in reference for the indicated period, and will cover
claims for damage arising from the insured's civil liability, as defined in the
specifications enclosed with said policy. The insurance contracted under the
policy described below is subject to all terms, exclusions and conditions of the
policy.
Scope of Coverage: Civil Liability, Commercial and/or Industrial Operations
(Occurrence Basis)
Term of the Policy Beginning Date Ending Date
Issued December 23, 1999 March 22, 2000
Liability Limit: US$ 10,000,000.00
With sublimit of 20% for Moral Damage
CANCELLATION: This insurance may be cancelled before its expiration, whereby the
Insurance Company must communicate such cancellation in writing, 15 days in
advance, to the holder of the certificate. Any possible delay in communicating
the cancellation will not create any obligation or responsibility of any type
for this Insurance Company, its directors, representatives or employees.
[signature]
Authorized Representative;
ACE Seguradora S.A.
2
133
Grupo Bradesco
de Seguros
Branch
416
Sao Paulo
To Date Pages incl. this page
Mr. Xxxx Xxxxxx Xxxx 12/23/1999 1
Company From Fax
Xxxxx Corredora de Seguros Xxxxx Xxxxxx 416-2989/[illegible]
Location Alameda Santos. 1420 - 7th floor
Xxx Xxxxx 00000-000 Xxx Xxxxx XX, Xxxxxx
Receiver's Fax Sender's Fax Sender's Telephone
0066-11-289-4121 0055-11-253-8881
Subject E-mail
VESPER Sao Paulo xxxxxxxxxxx@xxxxxxxxxxxxxxx.xxx.xx
Dear Sir,
We inform you that IRB, by fax SEINC-5822189 of 12/23/1999, confirmed the
coverage for insurance of Operating Risks of VESPER Sao Paulo, in accordance
with the values reported in our fax 000-0000/99 of 12/22/1999. The term of the
policy considered is from 12/22/1999 to 4/1/2000.
The final structure (taxes, etc.), Clauses, General and Special Conditions will
be confirmed later by the said reinsurer.
Sincerely,
[signature] [signature]
Xxxxxx X. Xxxxxxxx Xxxxx Xxxxxx
3
134
Grupo Bradesco
de Seguros
Branch
416
Sao Paulo
To Date Pages incl. this page
Mr. Xxxx Xxxxxx Xxxx 12/22/1999 2
Company From Fax
Xxxxx Corredora de Seguros Xxxxx Xxxxxx 416-2382/99
Location Alameda Santos. 1420 - 7th floor
Xxx Xxxxx 00000-000 Xxx Xxxxx XX, Xxxxxx
Receiver's Fax Sender's Fax Sender's Telephone
0000-0000 0066-11-288-4121 0055-11-253-8881
Subject E-mail
Vesper Sao Paulo xxxxxxxxxxx@xxxxxxxxxxxxxxx.xxx.xx
According to our understanding, we inform you that the insurance with the
conditions mentioned below is in the process of approval by IRB and, for the
coverage to be confirmed, we need only and exclusively to have it approved. We
expect approval by 12/23/99, subject to alterations. The "net" estimated annual
premium is US$ 102,795.07, for the operating risk policy. The inclusion of the
Theft coverage will have an additional premium of US$ 15,000.00.
1. AMOUNTS AT RISK
Office US$ 6,701,504.48
Call Center/Switch US$ 80,968,251.00
Cell Sites US$ 93,095,535.00
Work Centers US$ 3,076,923.08
Stores US$ 2,051,282.00
Warehouses US$ 28,717,949.00
2. LMIS
New Acquisitions US$ 25,000,000.00
Rubble Removal US$ 5,000,000.00
Properties not under Roof US$ 30,000,000.00
Theft of Goods US$ 1,000,000.00
Reconstruction of [illegible] US$ 5,000,000.00
Accounts Receivable US$ 1,000,000.00
Extraordinary [illegible] US$ 1,000,000.00
4
135
Loss of Rent US$ 5,000,000.00
Damage to vehicles as a consequence of
covered risks US$ 500,000.00
Unspecified premises US$ 1,000,000.00
ERBs movables during installation,
assembly and disassembly US$ 1,400,000.00
5
136
As to the All Hazard Policy (Blanket), we agree with the following conditions:
o RD Amounts (in and out of the establishment) LMI of R$ 75,000.00
Deductible 10% of the loss, with a minimum of
R$ 500.00
o RD All Risks - Operating/portable equipment (including that installed in vehicles), conditions: RD
Movable Equipment plus Fall, Breakage and Simple Theft.
LMI of R$ 550,000.00
Deductible 10% of the loss, with a minimum of
R$ 500.00
Notes:
o Values - single item covering values in the establishment and in transit.
It is understood and agreed that values transported by third parties will
also be covered, provided there is a service contract signed between Xxxxxx
X.X. and such third party.
o We decline coverage for telephone cards.
o RD - Operating equipment - in accordance with the conditions proposed by
Xxxxx.
o We will be confirming in due time the premiums for the RD policies.
Sincerely,
[signature] [signature]
Xxxxxx Xxxxxxxx [handwritten: for] Xxxxx Xxxxxx
6
137
GENERAL CONDITIONS FOR OPERATIONAL RISKS
CLAUSE 1 -MAXIMUM INDEMNITY LIMIT AND SUBLIMITS
The liability of the INSURER is limited in each accident to the Maximum
Indemnity Limit referring to Sections I and II, as specified in the policy, or
to the Sublimits, if applicable. The Sublimits appearing in the policy must not
be added to the Maximum Indemnity Limit, and are an integral part thereof.
The sum of all indemnities and expenses payable under this contract for all
losses, may not exceed under any circumstances the Maximum Indemnity Limit
and/or Sublimits, whereby this contract will be automatically cancelled when
such limit is reached.
CLAUSE 2 -FIRST RELATIVE RISK
In the coverage for Fire/Lightning and Loss of Profit (all events), the Insurer
will be liable for damage covered up to the maximum indemnity limit specified in
the policy, provided the value at risk declared in the policy is equal or higher
than 80% (eighty percent) of the value at risk calculated at the time of loss.
Otherwise, the Insured will pay the proportional part of the damage
corresponding to the difference between the Value at risk calculated at the time
of the loss and the Value at risk expressly declared in the policy.
In the other coverage granted under this policy, the Insurer will fully pay for
the damage covered, regardless of the values at risk of the objects insured
guaranteed by the policy, up to the respective maximum indemnity limit
established in the specifications, complying with the other clauses and
conditions of the policy.
CLAUSE 3 -INSPECTION OF RISKS AND SUSPENSION OF COVERAGE
The LEADER INSURER or its REINSURER(S) is in charge of periodic inspection for
purposes of survey, risk control and prevention of LOSSES, with the obligation
of supplying to the INSURED the report of said inspection. The date of the
inspection will be previously announced by the LEADER INSURER to the INSURED,
who will supply all necessary collaboration and support for the inspection.
As a consequence of this risk inspection, the INSURER has the right to suspend
coverage at any time during the term of this policy, with prior notice, in the
event that it finds any severe situation or imminent danger in which the
INSURED, after they were found, did not take the applicable or recommendable
measures to remedy such situation. The coverage may be reinstated by express
decision of the INSURER, which must reimburse to the INSURED the premium
corresponding to the period during which the coverage was suspended, on a pro
rata temporis basis.
1/18
7
138
CLAUSE 4 -FORFEIT OF RIGHTS
Without prejudice to the provisions of the Particular, Special and General
Conditions - Sections I and II of this policy, and to the provisions of the Law,
the INSURED will forfeit all and any right in relation with this policy in the
following cases:
01 - If he engages in any illicit act, with the purpose to obtain undue
advantages or damage the INSURER, committed by his own actions, or
through his employees.
02 - If he fails to submit the commercial and/or tax books, kept and in good
standing according to current legislation, as well as any documentation
required and indispensable to prove the claim for indemnity submitted
or to survey the damage.
03 - If, without prior express approval of the INSURER, he makes any
modification or alteration in the insured establishment, or in the
INSURED OBJECTS, or even in his field of activity, resulting in an
aggravation of the risk for the INSURER.
04 - If he fails to take any measure that is his obligation or that is
entirely in his reach, in order to avoid, reduce or not aggravate the
damage arising from a LOSS.
05 - If he gives any inexact declaration or omission that may directly or
indirectly affect the knowledge, analysis and acceptance of the risk
and of the premium rate, unless he proves just cause of error, whereby
the INSURED will not be obligated to refund any premium already paid.
06 - If he fails to comply with any of the Clauses and Conditions of this
policy in connection with his obligations and responsibilities.
07 - In addition to the provisions of clause 6 -Losses, of the General
Conditions of this policy, if any asset insured affected by a loss is
kept or made operational without being repaired.
08 - In addition to the above, the INSURER will have the right to suspend
payment of any indemnity at any time if:
a) there is any doubt as to the right of the INSURED to receive the
indemnity, until the appropriate settlement is made;
b) there is an investigation against the INSURED, conducted by any
police authority, until an investigation is carried out by the
court of jurisdiction.
CLAUSE 5 -SAFETY MEASURES
Under penalty of forfeit of any right, the INSURED pledges to take all safety
measures and precautions in order to avoid any damage to the INSURED OBJECTS and
to comply with all current rules and regulations relative to his operation, as
well as maintain them under good maintenance and preservation conditions.
2/18
8
139
CLAUSE 6 -LOSSES
In the event of accident which may be indemnified by this policy, under penalty
of forfeiting the right to the indemnity, the Insured or its substitute must:
a) communicate, immediately after he becomes aware and within the
terms set forth in the Brazilian Civil Code, by the quickest
means available to him, without prejudice to written
communication which must be sent as quickly as possible;
b) to include in the written communication: date, hour, place,
goods lost, probable causes of the loss and estimated damage;
c) take the measures deemed urgent to protect the common
interests and reduce the damage until the arrival of the
representative of the Insurer;
d) the Insured himself, without prior notice from the Insurer,
may immediately replace the equipment damaged, in order to
avoid reducing the efficiency of his services or the normal
continuation of the activities of the business insured,
without prejudice to issuing notice pursuant to item "a."
However, such substitution may be made only if it does not
impair the evidence of the loss for the Insurer, in order to
make it possible to determine the factors which causes the
accident;
e) all the representative of the Insurer access to the place of
the accident and give him the information or clarifications
requested, making available to him documentation to prove the
survey of the damage;
f) preserve the damages parts and allow the inspection thereof by
the representative of the Insurer.
CLAUSE 7 -PROOF OF LOSS (ACCIDENT)
1 - Payment of any indemnity based on this policy may only be made after
the Insured presents the circumstances in which the accident occurred,
indicating its causes, proving the amounts to be indemnified or the
right to receive indemnity, whereby the Insured will give all
assistance for the performance of these actions.
2 - All expenses made in order to prove the accident and for authorization
documents will be paid by the Insured, except for those directly made
by the Insurer.
3 - The Insurer may request an attestation or certificates from competent
authorities, as well as the results of the investigations or lawsuits
filed in connection with the facts which produced the accident.
4 - The acts or steps taken by the Insurer after the accident have no
impact by themselves on the acknowledgement of the obligation to pay
the claimed indemnity.
3/18
9
140
CLAUSE 8 -SALVAGES
In the event of an accident to the assets described in this policy, the Insured
may not abandon the salvage but must take immediately the appropriate measures
to protect and minimize the loss and, by mutual agreement with the Insurer,
endeavor to obtain best use thereof; however, this does not imply an
acknowledgement by the Insurer of the obligation to indemnify the damage
incurred.
If the Insurer uses the option to take possession of the salvage, the Insured
reserves the right to first remove from the salvage his emblems, guarantees,
serial number, name and any other evidence of its interests therein or in
relation therewith. The Insurer waives its rights to take possession of the
salvage from which it is impossible or impractical to destroy all evidence of
the interest of the Insured therein.
CLAUSE 9 -PROPORTIONAL CONTRIBUTION -OTHER INSURANCE POLICIES
Without prejudice to the provisions of these Conditions, it is understood that,
in the presence of another insurance policy on the same risks and objects
insured covered by this policy, in the event of accident, the INSURER will pay
the share of the indemnity for the damage incurred by the INSURED in the same
proportion it is committed to cover.
CLAUSE 10 -SUBROGATION OF RIGHTS
1 - The Insurer, after the payment of the indemnity for the accident, is
subrogated, up to the amount of such indemnity, in the rights and
actions of the Insured against third parties whose acts or facts caused
the loss indemnified, whereby it may require from the Insured at any
time the instrument of transfer or valid documents for the exercise of
such rights.
2 - The Insured may not engage in any act that impairs the subrogation
right of the Insurer, nor enter into an agreement or settlement with
third parties responsible for the accident, except with prior express
authorization from the Insurer.
CLAUSE 11 -PAYMENT OF THE PREMIUM
1 - It is understood and agreed that any indemnity under this contract
may be owed only after payment of the premium by the Insured, which
must be made at the maximum up to the due date set forth for this
purpose in the insurance Slip.
2 - The due date for payment of the premium may not exceed 30 days from the
issue of the policy, invoice or monthly account, renewal rider, riders
or endorsements showing an increase of the premium.
3 - When the due date falls on a non-banking day, the premium may be paid
on the first business-banking day.
4 - In addition, it is understood and agreed that, should the loss occur
within the payment term of the premium without payment thereof, the
right to indemnity will not be impaired if the respective premium is
still paid within said term.
4/18
10
141
5 - Non-payment of the premium on site, in policies with single premium, or
non-payment of the first installment, in case of policies with
installment premium, on the terms referred to in previous items, will
imply automatic cancellation of the policy or rider referred to it.
However, in policies with installment premiums, non-payment of any
installments subsequent to the first, within the terms set forth in
previous items, guarantees to the Insured coverage for a validity term
proportional to the ratio between the premium actually paid and the
annual premium owed.
6 - This Clause prevails over any other conditions to the contrary.
CLAUSE 12 -INDEMNITY OR REPLACEMENT
1 - The Insurer has the right to indemnify the Insured by paying in money
or by repairing or replacing the damaged goods, in order to restore
them to the condition they had immediately before the accident, up to
the indemnity limits established in the policy.
2 - The Insured pledges to provide to the Insurer plans, specifications
and any other clarifications necessary for the replacement referred to
in the previous items.
3 - Under no circumstances will the Insurer be responsible for any
alterations, expansions, improvements or revision made in the repair of
the object which suffered the accident.
CLAUSE 13 -VALIDITY AND CANCELLATION OF THE CONTRACT
1 - This contract is valid for the term set forth in the specifications
of this policy, and may be cancelled or terminated totally or partially
only in the cases set forth in these conditions or in the Law, by
agreement between the contracting parties. In this event, the premium
to be retained by the Insurer will be calculated on a pro rata temporis
basis.
2 - The contract will be cancelled automatically, without any
responsibility of the Insurer for this insurance in the event of dolus,
fraud or attempted fraud by the Insured.
CLAUSE 14 -PRESCRIPTION
The prescription, or its interruption of this policy will be governed by the
Brazilian Civil Code.
5/18
11
142
SECTION 1
SPECIAL CONDITIONS FOR MATERIAL DAMAGE
CLAUSE 1 -OBJECT OF THE INSURANCE
1.1 The object of this insurance guarantees in each accident the damage
incurred by the Insured as a consequence of the covered risks under
these conditions, up to the unit value of the insured assets, or up to
the maximum limit of indemnity and/or sublimits established in the
Policy (if lower than the unit value of the insured assets).
1.2 The coverage under this policy applies only:
1.2.1 - the insured assets, when they are in the premise(s) defined in
the policy;
1.2.2 - in the case of recently installed factories, as of the time
they have license to operate or are in operation for their
planned purpose, i.e. factories in which the testing period
has been completed.
CLAUSE 2 -RISKS COVERED
2.1 - Subject to the provisions of this Special Conditions and General
Conditions of the policy, Covered Risk is considered to be the
"ACCIDENT" which requires repair or replacement of the insured assets
so as to enable it to continue working or operating normally.
2.2 - For the purposes of this insurance, "ACCIDENT" must be understood as
impairment, loss or material damage from a sudden, unforeseen and
accidental origin, suffered by the insured asset, except as a
consequence of the risks mentioned in Clause 3 - RISKS EXCLUDED below:
CLAUSE 3 -RISKS EXCLUDED
It is understood and agreed that this policy does not cover accident arising
from:
a) war, act of foreign enemy, war hostilities or operations,
civil war, insurrection, rebellion, revolution, conspiracy
or act of military authority or usurpers of authority;
b) malicious acts of any person or persons, acting in connection
with any political, religious or ideological organization and
others meant to instigate the fall of the de jure or de facto
government by acts of terrorism or subversion;
c) permanent or temporary loss of property arising from
confiscation, nationalization, injunction, requisition by
order of any legally constituted authority;
d) effects of nuclear weapons, ionizing radiation or
contamination arising from radioactivity of any nuclear fuel
or any nuclear residue, resulting from nuclear fission, as
well as the cost of decontamination;
6/18
12
143
e) robbery, theft, or simple disappearance, provided such events
do not produce a covered risk, when the losses and damage
arising therefrom are covered;
f) absence of electricity, fuel, water, gas, steam or any raw
material used in the process, caused by occurrence outside the
premises described in this policy, provided these events do
not cause a covered risk, in which case the losses and damage
arising therefrom will be covered;
g) transportation operations or moving of insured assets outside
the premise or site of operation expressly indicated in this
policy;
h) preexisting failures or defects before the validity date of
this insurance, which were already known to the Insured or its
employees, regardless of whether or not they were known to the
Insurer;
i) intentional acts, negligence, fraudulent act or omission of
the Insured, his directors, or persons acting for his benefit;
j) disintegration due to centrifugal force and short circuit
(electrical damage), provided such events do not cause a
covered risk, in which case the losses or damage arising
therefrom will be covered;
k) physical or dry explosion, occurring in the insured asset,
understood as the breakage or deformation of the walls of a
recipient containing gas, steam or liquid, as the exclusive
consequence of internal expansion or compression forces of
such gases, steam or liquids, causing a sudden and unforeseen
balance between the internal and external pressures of said
container, provided such event does not cause a covered risk,
in which case the losses and damage arising therefrom will be
covered;
l) overload, understood as voluntary situations in which the
specifications established in the project for the operation of
the machines, equipment or installations insured are exceeded;
m) improper handling, understood as a situation in which the
Insured voluntarily fails to comply with the minimum
recommendations established by the manufacturer;
n) mechanical or electrical defect, provided such events do not
cause a covered risk, in which case the losses and damage
arising therefrom will be covered;
o) repair, substitution and replacements normal for the operation
of the plant, with coverage, however, for the damage arising
from such repairs, substitutions and replacements.
CLAUSE 4 -ASSETS NOT INSURED
1 - Credit papers, art objects, jewelry, precious metals or precious
stones, bonds in general, certificates or documents of any type,
stamps, coins, bank notes, checks, letters, accounting books and any
other commercial books.
2 - Land.
7/18
13
144
3 - Aircraft of any type, vessels.
4 - Motor vehicles licensed for use on public roads, with the understanding
and agreement, however, for due legal purposes, that the vehicles of
third parties or of the insured, when parked in risk locations listed
in the policy, will be covered by the policy of insurance against
damage arising from covered accidents, up to the limit of US$
500,000.00.
5 - Dams, stored water, roads, railroad tracks, trees, lawn, xxxxx,
animals.
6 - Underground mines and other deposits located below the surface of the
ground.
7 - Goods in transit (outside of the insured premises).
CLAUSE 5 -INDEMNIFIABLE LOSSES
5.1- The following are indemnifiable up to the limits established in
Clause 1 -sub item 1.1.
5.1.1 - rubble removal expenses, understood as the expenses necessary
to remove rubble, including loading, transport and unloading in
the proper site. Such removal may be represented by pumping,
excavation, dismounting, dismantling, raking, propping and even
simple cleaning.
5.1.2 - rubble is understood as an accumulation of remains resulting
from the damaged parts of the object insured, or material
foreign to it, such as for example alluvial residue, rock, mud,
water, trees, plants and other detritus;
5.1.3 - expenses for disassembly and reassembly arising from a covered
accident;
5.1.4 - expenses acknowledged by the Insurer as indispensable, related
to the costs of protection of the assets insured against any
additional damage, imminent after the occurrence of a covered
accident;
5.1.5 - expenses for temporary repairs provided such repairs are
directly related to a covered accident and are part of the
final repairs, not implying an increase of the total recovery
costs;
5.1.6 - expenses for customs duties, import tax, normal round trip
freight from the repair shop and similar rates, related to the
acquisition of materials and services for replacement and new
operating authorization;
5.2- However, the following will not be considered indemnifiable losses:
5.2.1 - fines, interest or other financial charges arising from delay
or interruption in production process;
5.2.2 - any burden arising from damage to third parties in connection
with services and goods guaranteed by the policy, even if
arising from an accident;
5.2.3 - any burden arising from the temporary substitution of damaged
machines;
8/18
14
145
5.2.4 - additional cost of repair or replacement required by any rule,
regulation, statute or law which restricts the repair,
alteration, use, operation, construction, reconstruction or
installation in or of the property insured;
5.2.5 - loss of profit or consequential damage of any nature,
even if arising from a risk covered by the policy, whereby
consequential damage is considered to be the impairment, loss,
damage and expenses not directly related to the repair or
replacement of the assets insured, such as: fines, interest,
and other financial charges arising from the loss, delays of
any type and loss of market;
5.2.6 - costs of excavation, leveling, filling, dredging and paving.
CLAUSE 6 -CALCULATION OF THE LOSS AND INDEMNITY
1 - To determine the indemnifiable losses, pursuant to the express
conditions of this policy, the responsibility of the Insurer is
limited:
a) To the New Value corresponding to the repair, reconstruction
or replacement of the same size, type, capacity and quality of
the damaged asset, which may not under any circumstances be
higher than twice the indemnity for the current value (new
value less depreciation for use, age and state of preservation
of the asset).
b) If the assets damaged or destroyed were not, for any reason,
reconstructed or replaced, in the same premises or in other
premises, within 2 (two) years from the date of the loss, the
Insurer will be exclusively responsible for the actual Current
Value (New Value less Depreciation) of the damaged assets;
c) For any equipment leased or rented by the Insured, with or
without purchase option, to the value agreed upon between the
Insured and the Lessor, but under no circumstances will the
Insurer be responsible for a value in excess of the cost of
repair or replacement, as established in items "a" and "b"
above;
d) In the case of films, records, manuscripts, drawings and
material used for saving information for data processing
equipment, to the New Value of such assets, plus the costs of
reproduction of the information contained therein and lost.
The cost of programs (software) is not included in
indemnifiable losses.
e) In the case of raw materials and finished products owned by
the Insured or third parties in possession of the Insured,
provided they are stored in an expressly indicated place, as
well as products in process:
e.1 - To the value of the raw materials and labor expended,
plus the due proportion of administrative (indirect) expenses
for the goods in process;
e.2 - To the replacement cost of raw materials, supplies and
other merchandise not manufactured by the Insured;
9/18
15
146
e.3 - Concerning finished products, to the cost of production
as of the date of the loss.
2 - For the establishment of the indemnity, the value of the deductible, as
well as any damaged part of the asset lost with economic value, when in
possession of the Insured, must be deducted from the loss.
CLAUSE 7 -DEDUCTIBLES
7.1 - Correction at the expense of the Insured for the first damage in
connection with each loss, up to the limit of the deductible for
material damage specified in the policy, whereby the Insurer will
indemnify only the amount in excess of said deductible.
7.2 - If two or more deductibles set forth in this policy are
applicable to a single occurrence, the highest deductible must be used,
unless otherwise provided.
10/18
16
147
SECTION II
PARTICULAR CONDITIONS FOR BREAKAGE OF MACHINERY
CLAUSE 1 -RISKS COVERED
Notwithstanding the provisions in Clause 3 - paragraphs f/j/k/ and r, the Risks
Excluded from the Special Conditions for Material Damage - Section I of this
policy, it is understood and agreed that this policy also covers, against
payment of an additional premium, damage arising from:
o mechanical or electric damage;
o manufacture and material defect and design error;
o error in assembly, lack of ability, negligence and sabotage;
o disintegration by centrifugal force and short circuit (electrical damage);
o physical or dry explosion in the asset insured, understood as the
disintegration or deformation of the walls of a gas, vapor or liquid
receptacle, in exclusive consequence of forces of internal expansion or
compression of these said gases, vapors or liquids, that begin to provoke an
sudden and unforeseen equilibrium between the internal and external
pressures of this same receptacle;
CLAUSE 2 -RISKS EXCLUDED
It is understood and agreed that, in connection with this Section II -
Particular Conditions for Breakage of Machinery, this policy does not cover
accidents arising:
a) directly from normal wear and tear, gradual deterioration of any part
of the object insured, including any effects or influence from the
atmosphere, oxidation, rust, scaling, incrustation, pitting and
corrosion of mechanical, thermal or chemical origin. However, it is
understood and agreed that accidents consequent to such normal wear and
tear, gradual deterioration, etc. are covered, still excluding from
coverage the cost of replacement or repair of the part affected by
normal wear and tear, gradual deterioration, etc., which causes the
accident;
b) loss of profit or consequential damage of any nature, even if arising
from loss covered by the policy, namely:
b.1) -lack of utilization or deterioration of raw material and/or
supplies;
b.2) -production which is inferior, qualitatively or quantitatively to
that projected;
b.3) -fines, interest and other financial charges arising from delay or
interruption in production process;
c) losses or damage arising from events covered under Section I of this
policy.
11/18
17
148
CLAUSE 3 -ASSETS NOT INSURED
In addition to the exclusions mentioned in Clause 4 -Assets Not Included in the
Special Conditions -Material Damage -Section I, it is understood and agreed
that, in connection with the coverage for breakage of machinery, the following
will not be considered Assets Insured:
1 - belts, pulleys, joints, filters, chains, metal sheets, saws, blades,
cylinders, air xxxxxxxx, matrices, molds, stamping cylinders, cliches
or any tools or parts which, in order to operate, require frequent
replacements;
2 - objects or parts made of glass, porcelain, ceramic, textile and
substances in general (such as oils and lubricants, fuels and
catalysts;
3 - fuses, heating resistances, lamps of any nature, cathodic tubes in
electronic equipment, electrical wires and conduits or any other
components which, by their nature, require frequent changes;
4 - equipment using radioactive materials (any computer, X-ray machines,
spectrograph or other devices using radioactive materials).
It is understood and agreed that damage to the goods described herein are
covered under Section I - Material Damage of this policy, pursuant to the
provisions of paragraph "a" - Clause 3 - Risks Excluded.
12/18
18
149
SPECIAL CLAUSES OF THE INSURANCE FOR OPERATING RISKS
01 - ADDITIONAL CLAUSE FOR INCLUSIONS/EXCLUSIONS OF GOODS/PREMISES AND
CHANGES IN VALUES
It is understood and agreed that the inclusions/exclusions of assets/premises
and Changes in Value at Risk (increase/reduction/ transfer) will be
automatically covered by this insurance up to the limit of US$ 25,000,000.00 per
premises, provided the Insured notifies the Insurer in writing within a maximum
term of 60 days from the date of the event. Collection/refund of the premium for
such events will take place within the maximum term of 30 days immediately
following the expiration of this contract, based on the list to be sent by the
Insured by the termination date of this policy.
02 - PARTICULAR CLAUSE FOR EXISTING PROTECTION SYSTEMS
It is understood and agreed that the provisions of SUSEP Circular 06/92 -
"Regulation for granting discounts in the risks having their own means
to detect and fight fires must be complied with," taking into
consideration that the conditions set forth in this policy take into
consideration the discounts referring to existing protection systems.
If the Insured stops fully or partially complying with the provisions of SUSEP
Circular 06/92, he will be penalized as indicated below:
o Reduction of the indemnity: the indemnity to which he would be
entitled, should he have complied with the above provisions, will be
reduced by the same proportion between the premium paid and the premium
owed, calculated taking into account the non-compliance with the
provisions of said Circular.
o Establishment of the premium for renewal.
03 - ADDITIONAL CLAUSE OF LOSS OF PREMIUM
It is understood and agreed that the coverage set forth in this policy responds
for the loss of premium and compensation arising from the partial or total
cancellation of the policy as a consequence of a loss.
04 - AUTOMATIC REINSTATEMENT CLAUSE
It is understood and agreed that, in the case of a loss, the Maximum Indemnity
Limit will automatically be reinstated to the value of the indemnity paid, by
payment of an additional premium calculated proportionately to the period lapsed
between the date of the loss and the expiration of the policy.
13/18
19
150
05 - ADDITIONAL CLAUSE FOR EXPENSES FOR INSTALLATION IN NEW PREMISES
If, following a loss covered by this policy, the insured establishment has to
move, definitively to another location, the following expenses will be
guaranteed up to limit of the amount insured under this guarantee:
a) adaptation work;
b) construction of display windows, balconies, fixtures and other installations;
c) business fund it must pay to obtain a new location, equivalent to the damaged
location;
d) transport for moving.
All the terms of the general conditions which were not amended by this
additional coverage are confirmed.
06 - ADDITIONAL CLAUSE FOR SMALL ENGINEERING WORK, EXPANSIONS, REPAIRS OR
REFURBISHING
Notwithstanding the provisions to the contrary of this policy, it is understood
and agreed that the coverage granted herein is extended to include any damage
caused to the insured assets in the event of expansion, repair or refurbishing
work, in a sum of the values at risk of the work not exceeding US$ 1,400,000.00,
plus US$ 1,400,000.00, including equipment already mounted, in mounting or
dismounting, in compliance with the General Conditions and Special Conditions
approved by SUSEP for methods of Civil Works in construction and Installation
and Mounting of the Engineering Risks Line, enclosed with this Policy.
07 - ADDITIONAL CLAUSE FOR UNSPECIFIED PREMISES
It is understood and agreed that the goods of the Insured will also be covered
in unspecified premises, up to the limit of US$ 1,000,000.00, provided they are
outside the industrial or commercial premises thereof. Unspecified premises will
not be understood as general warehouses and those over which the Insured has
actual control through a lease contract, including temporary.
08 - CLAUSE OF EXCLUSION OF "DATA INTERPRETATION BY ELECTRONIC EQUIPMENT"
It is understood and agreed that this insurance does not cover any impairment,
damage, destruction, loss and/or claim of liability of any type, nature or
interest, provided it is duly proven by the Insurer that they may be directly or
indirectly originating from, or consisting of:
1 - Failure or malfunction of any computer equipment and/or program
and/or electronic data computation system in recognizing and/or
correctly interpreting and/or processing and/or distinguishing and/or
saving any date as real and correct calendar date, provided it
continues to function correctly after that date.
14/18
20
151
2 - Any act, failure, unsuitability, incapacity, inability or decision of
the insured or of a third party in connection with the non-utilization
or non-availability of any property or equipment of any type, kind or
quality, following the risk of recognition, interpretation or
processing of calendar dates.
For all purposes, computer equipment or program is understood to be electronic
circuits, micro-chips, integrated circuits, micro-processors, imbedded systems,
hardware (computer equipment), software (programs used or to be used or possibly
used in computer equipment), firmware (resident programs in computer equipment),
programs, computers, data processing equipment, telecommunications systems or
equipment or any other similar equipment, whether or not they are owned by the
insured.
This clause contains and fully cancels any provision of the insurance contract
conflicting or contradicting it.
09 - ACCOUNTS RECEIVABLE
This Policy also covers any lack of collection of Accounts Receivable, arising
from direct physical losses or damage covered by this policy to records, subject
to conditions below. The indemnity under this policy will be part of, and will
not increase the Liability Limit, as mentioned in Representations.
a. In the event of loss under this policy, the Insured must use
all reasonable diligence and speed, including legal action if
necessary, to collect pending Accounts Receivable whose
records were destroyed and, in the event of additional costs
incurred in connection therewith, these will constitute a
claim provided they reduce the covered loss. The Insurer will
also pay interest on any loan to compensate damaged pending
collection of payments of the amounts unrecoverable as a
result of such damage or destruction.
b. Interest not gained and expenses for the service of deferred
receivables and normal loss of credit for unrecoverable debts
will be deduced when calculating recovery under this policy.
c. The settlement of any loss under this policy will take place
within ninety (90) days from the date of presentation and
acceptance by the Company of the proof of the loss, sworn by
the Insured, and all amounts recovered by the Insured in
Accounts Receivable pending as of the date of such damage or
destruction must belong and be paid to this Company by the
Insured up to a total not exceeding the value of the loss
payable under this policy; but all recovery in excess of this
amount will be kept by the Insured and will belong to him. The
Company will accept or reject the proof of loss within thirty
(30) days from presentation.
d. If it is possible to reconstitute the Records of the Insured's
Accounts Receivable after being damaged or destroyed, so that
absence of collection of the Accounts Receivable is suffered,
this Company will pay only the cost of material and time
necessary, using due diligence and speed, to reestablish
and/or reconstruct such Records of Accounts Receivable, but
only to the extent that they are not covered by another form
of insurance.
15/18
21
152
e. This Policy does not apply to losses due to errors or
omissions of record clerks, accountants or billing clerks or
error or failure of computers, except if such errors or
failures arise from a covered risk.
f. This Policy does not apply to damage arising from alterations,
falsifications, manipulations, hiding, destruction or
discarding of Records of Accounts Receivable committed in
order to cover [illegible] delivery, receipt, obtention or
retention of money, certificates or other assets, but only to
the extent of such delivery, receipt, obtention or retention.
g. The Insured agrees to use any goods or services belonging to
him or that may be obtained from other sources in order to
reduce the loss under this policy.
10 - EXTRAORDINARY EXPENSES
It is understood and agreed that the Insurer will indemnify not only the
additional cost of overtime, but also extraordinary expenses arising from
express freight, or shipping through national transport means (excluding the
charter of aircraft), up to the limit defined for this coverage, provided such
expenses arise from an accident, as defined in Clause 2 - RISKS COVERED, part 1
- Special Conditions for Material Damage.)
11 - SPECIAL REQUIREMENTS OF THE STATE
It is understood, declared and acknowledged by this Company that all and any
provisions of this policy that are in conflict with the laws of the state where
the policy is applicable, will be corrected in order to make it consistent with
said laws.
12 - CONTROL OF DAMAGED MERCHANDISE
In the event of losses or damage to finished products, the Insured will have all
rights to possess and control all such damaged assets. The Insured exercising
reasonable judgement, will be the only party entitled to decide whether such
damaged assets are suitable to be reprocessed or sold, and no such damaged asset
judged by the Insured inapt to be reprocessed or sold must be sold or disposed
of in any other manner, except by the Insured or with his consent, but the
Insured must transfer to the Company any salvage obtained from any sale or other
disposal of such assets.
13 - CLAUSE OF PREMISES NOT CONTROLLED BY THE INSURED
This insurance will not be impaired by any act or carelessness of the owner
concerning any property, if the Insured is not the owner thereof, or by any act
or carelessness of any occupant (other than the Insured) in connection with any
property, when such act or carelessness of the owner or occupant are not under
the control of the Insured.
16/18
22
153
14 - LOSS OF RENT
It is understood and agreed that the coverage set forth in this policy
guarantees to the owner the rent not obtained by the property because it cannot
be occupied in full or in part, because of damage due to fire, lightning and
explosion.
The indemnity owed under this coverage will be paid in monthly installments,
calculated based on the total amount insured and the indemnity period for which
the coverage was contracted. Monthly installments will be paid during the period
of repairs or reconstruction of the damaged property, up to the limit of the
indemnity period, but the amount of each of them may not, under any
circumstances, exceed the legally payable monthly rent.
In addition, it is understood and agreed that the indemnity period will begin as
of the date on which the actual loss of rent begins.
15 - DEMOLITION AND INCREASE IN THE COST OF CONSTRUCTION
If, on the occasion of any loss or physical damage insured under this policy,
any law or decree is in force, regulating the construction, repair, replacement
or use of properties or structures, this policy will cover:
a. The additional loss suffered by the demolition of any undamaged
portion of the properties or structures necessary under the
minimum requirements of such law or decree.
b. The cost incurred for the reconstruction both of the damaged
portion and of the undamaged portion of such properties or
structures with materials and in a manner designed to fully comply
with the minimum requirements of such laws or decrees.
c.
This Company will not be responsible for any demolition costs or increase in the
cost of construction necessary under any law or decree regulating in any form
pollution or contamination.
The total responsibility under this clause will not exceed the actual expense
incurred for the demolition of the undamaged portion of the property(ies) or
structure(s) involved plus the lower of the following:
a. The actual expense incurred, not including the cost of land in
reconstruction in a different place, or
b. the cost of reconstruction in the same place.
The indemnity under this clause will be part of and not an addition to the
Liability Limit, as mentioned in Representations.
17/18
23
154
16 - CLAUSE ON TECHNOLOGICALLY SUPERIOR EQUIPMENT
In the event of occurrence of a loss in equipment which is no longer
manufactured or found in the market, the indemnity must be paid in the value of
similar equipment with similar characteristics, providing the same type of
function as the damaged one, including with equivalent or closer capacity
without ever considering equipment existing in the market with inferior
capacities. For the calculation of the value at risk and new value, the value of
the equipment existing in the market with characteristics, functions and
capacity equivalent or superior to the equipment damaged must be considered.
18/18
24
155
SCHEDULE 3.18
OWNERSHIP OF HOLDINGS
---------------------------------------------------------------------------------------------------------------------
TOTAL
NO. OF VOTING VOTING % TOTAL
SHAREHOLDER NO. OF COMMON SHARES PREFERRED SHARES SHARES EQUITY
---------------------------------------------------------------------------------------------------------------------
BCI 27,864 27,864 55,728 34.4%
---------------------------------------------------------------------------------------------------------------------
VeloCom 40,014 40,014 80,028 49.4%
Cayman
---------------------------------------------------------------------------------------------------------------------
QUALCOMM 13,122 13,122 26,244 16.2%
Brasil
---------------------------------------------------------------------------------------------------------------------
TOTAL: 81,000 81,000 162,000 100%
---------------------------------------------------------------------------------------------------------------------
126
156
SCHEDULE 4.01
WAIVERS
The Lenders hereby waive the conditions set forth in Section 4.01 and
the affirmative covenants set forth in Section 5.10 to the extent set forth
below; provided each condition or affirmative covenant so waived must be
satisfied or complied with by the applicable date set forth below.
1. Sections 4.01(g) and (p). The conditions set forth in Sections
4.01(g) and (p) are waived to the extent that satisfaction thereof would require
(i) translation of any Loan Document into Portuguese, (ii) in the case of the
Contract Assignment Agreements, the consent of any third party that has not been
obtained, (iii) in the case of the Vesper Guarantee, issuance by the Central
Bank of a customary non-opposition letter in respect of such Guarantee, (iv) in
the case of the Voting Agreement, approval thereof by ANATEL or (v) in the case
of the shares in the Borrower pledged pursuant to the Cayman Share Pledge
Agreement, the requirement set out in clause 2(b) thereof; provided that all
such conditions must be satisfied by January 31, 2000, or, in the case of clause
(v) by January 7, 2000 and, in the case of clause (iii), the executed Vesper
Guarantee, the Central Bank letter and an opinion of Brazilian Counsel in the
form reasonably required by the Collateral Agent must be delivered to the
Collateral Agent by January 31, 2000.
2. Section 4.01(h). The conditions set forth in Section 4.01(h) are
hereby waived to the extent that the insurance described on Annex 1 to this
Schedule does not satisfy such conditions; provided that (i) the insurance
described on Annex 1 to this Schedule shall be maintained until replaced by
insurance satisfying the requirements of Section 5.07 and (ii) all insurance
required by Section 5.07 shall be obtained, and evidence thereof delivered to
the Agents, by March 31, 2000.
3. Section 4.01(u). The condition set forth in clause (ii) of Section
4.01(u) is waived; provided that such condition must be satisfied by January 31,
2000.
4. Section 4.01(w). The conditions set forth in Section 4.01(w) are
waived; provided that all such conditions must be satisfied by March 31, 2000.
127
157
5. Section 4.01(aa). The conditions set forth in Section 4.01(aa),
other than clause (i) thereof, are waived; provided that all such conditions
must be satisfied by January 31, 2000.
6. Section 5.10. The affirmative covenant set forth in Section 5.10 is
hereby waived to the extent that the proceeds of each Borrowing are not
deposited into the Additional Collateral Accounts as required under the
Collateral Agency Agreement and the Lenders hereby further waive any requirement
set forth in the Collateral Agency Agreement that the proceeds of Borrowings be
deposited in such accounts; provided that such covenant and all such
requirements must be complied with January 7, 2000.
128
158
SCHEDULE 5.01(c)
FORM OF MONTHLY REPORT
MONTH OF ___________________________________, 200x
----------------------------------------------------------------------------------------------------------------------
Vesper Sao Paulo S.A.
----------------------------------------------------------------------------------------------------------------------
Vesper Sao Paulo S.A.
----------------------------------------------------------------------------------------------------------------------
Beginning of Period Subscribers
----------------------------------------------------------------------------------------------------------------------
Number of Subscribers Added
----------------------------------------------------------------------------------------------------------------------
Number of Subscribers Churned
----------------------------------------------------------------------------------------------------------------------
End of Period Subscribers
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Total Minutes of Use (MOU)
----------------------------------------------------------------------------------------------------------------------
Average Revenue Per Subscriber (ARPU) (R$)
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Total Number of Sites
----------------------------------------------------------------------------------------------------------------------
Total Employees
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Revenues (R$ M)
----------------------------------------------------------------------------------------------------------------------
Operating Expenditures (R$ M)
----------------------------------------------------------------------------------------------------------------------
Capital Expenditures (R$ M)
----------------------------------------------------------------------------------------------------------------------
Net Income (R$ M)
----------------------------------------------------------------------------------------------------------------------
129
159
SCHEDULE 6.02
EXISTING LIENS
NO LIENS
130
160
SCHEDULE 6.04
REAL PROPERTY DISPOSALS
-------------------------------------------------------------------------------------------------------------------
LOCALIDADE ADDRESS SELLER AMOUNT DATA DATA ESCRITURA
PAGAMENTO
-------------------------------------------------------------------------------------------------------------------
LAPA XXX XXXXXX XXXXXXXX 0000 FIAT AUTOMOVEIS S.A. 18 10/10/00
R$2,400,080.00
-------------------------------------------------------------------------------------------------------------------
PARAISO RUA CONSELHEIRO RAMALHO 778 E LAI LINMOU E XXX XXXXX XXX XXX 14 03/24/00
788 - R$1,500,000.00
-------------------------------------------------------------------------------------------------------------------
JABAQUARA XXX XXXXX 000 X 000 LOREO PARTICIPACOES, COMERCIO 29 03/20/00
E SERVICOS LTDA -
R$2,300,000.00
-------------------------------------------------------------------------------------------------------------------
PENHA XXX XXXXXXX XXXXXXX XXXXXXXX XXXX XXXXX - Xx0,000,000.00 26 05/25/00
000 X 000
-------------------------------------------------------------------------------------------------------------------
CAMPINAS AVENIDA MARECHAL XXXXXX COMPANHIA PAULISTA DE FORCA E 20 10/02/00
XXX - CPFL - R$4,200,000.00
-------------------------------------------------------------------------------------------------------------------
S_O XXXXXXXX AVENIDA PIRAPORINHA 000 X X_XXXX XXXXXXXXXXXXX XX 15 05/15/99
TERRENOS IMOVEIS - R$3,350,000.00
-------------------------------------------------------------------------------------------------------------------
OSASCO XXX XXXXX XXXXX XXXX 00 X 00 XXXXXX - XXXXXXXXXXXXXXXX XX
S_O PAULO S.A. - R$1,000,000.00
-------------------------------------------------------------------------------------------------------------------
GUARULHOS AVENIDA PRES. XXXXXXXX DE XXXXXXX XXXXXXXX E FAMILIA - 8 08/04/99
ALENCAR CASTELO XXXXXX 809 R$788,000.00
-------------------------------------------------------------------------------------------------------------------
131
161
SCHEDULE 6.08
NO EXISTING RESTRICTIONS
No agreement or other arrangement that prohibits, restricts or imposes any
condition upon the ability of any Subsidiary to pay dividends or other
distributions with respect to any of its Equity Interests or to make or repay
loans or advances to the Borrower or to Guarantee Indebtedness of the Borrower
exists.
132
162
EXHIBIT A
================================================================================
COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT
dated as of
December 27, 1999
among
VESPER SAO PAULO S.A.,
VESPER HOLDING SAO PAULO S.A.,
VESPER SAO PAULO CAYMAN
The ADMINISTRATIVE AGENTS
referred to herein,
and
CITIBANK, N.A., and BANCO CITIBANK S.A.,
as Collateral and Intercreditor Agent
================================================================================
163
TABLE OF CONTENTS
Page
----
ARTICLE I Definitions
SECTION 1.01. Defined Terms 1
SECTION 1.02. Terms Generally 6
SECTION 1.03. Accounting Terms; GAAP 6
ARTICLE II Permitted Additional Obligations;
Additional Security Documents
SECTION 2.01. Permitted Additional Obligations 7
SECTION 2.02. Additional Security Documents 7
ARTICLE III Acts of Lenders; Amounts of Obligations 7
SECTION 3.01. Acts of Secured Parties 8
SECTION 3.02. Determination of Amounts of Obligations 8
SECTION 3.03. Restrictions on Actions 9
ARTICLE IV Duties of Collateral Agent
SECTION 4.01. Notice to Secured Parties 9
SECTION 4.02. Actions Under Support Documents 10
SECTION 4.03. Records 10
SECTION 4.04. Lien Subordination Arrangements 10
SECTION 4.05. Delegation of Duties 10
ARTICLE V Collateral Accounts; Distributions 11
SECTION 5.01. The Collateral Accounts 11
SECTION 5.02. Application of Proceeds 15
SECTION 5.03. Time of Payments 15
SECTION 5.04. Treatment of Contingent Obligations 15
SECTION 5.05. Collateral Agent's Calculations 16
SECTION 5.06. Sharing of Set-Offs 16
ARTICLE VI Agreements
SECTION 6.01. Delivery of Agreements 17
SECTION 6.02. Information 17
ARTICLE VII The Collateral Agent
SECTION 7.01. Appointment; Rights and Duties 17
SECTION 7.02. Expenses; Indemnity; Damage Waiver 21
ARTICLE VIII Voting 23
SECTION 8.01. Amendments; Waivers 23
SECTION 8.02. Enforcement 25
SECTION 8.03. Prepayment of Tranche A Loans and Tranche B Loans 26
i
164
ARTICLE IX Intercreditor Arrangements
SECTION 9.01. Security Interests 26
SECTION 9.02. Turnover of Collateral and Certain Payments 27
SECTION 9.03. Release of Collateral and Guarantees 27
SECTION 9.04. Additional Collateral 28
SECTION 9.05. Purchase of Collateral 28
SECTION 9.06. Further Assurances, etc. 28
ARTICLE X Benefit of Agreement 29
ARTICLE XI Miscellaneous
SECTION 11.01. Notices 29
SECTION 11.02. Waivers; Amendments 30
SECTION 11.03. Counterparts 30
SECTION 11.04. Severability 30
SECTION 11.05. Governing Law; Jurisdiction; Consent to Service of Process 31
SECTION 11.06. WAIVERS. (a) WAIVER OF JURY TRIAL 32
SECTION 11.07. Headings 32
SECTION 11.08. Successors and Assigns 32
SECTION 11.09. Termination 33
SECTION 11.10. Complete Agreement 33
EXHIBIT:
Exhibit A -- Form of Permitted Additional Obligations Designation
ii
165
COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT
dated as of December 27, 1999, among VESPER SAO PAULO
S.A., a Brazilian sociedade por acoes, VESPER HOLDING
SAO PAULO S.A., a Brazilian sociedade por acoes,
VESPER SAO PAULO CAYMAN, a Cayman Islands company,
the ADMINISTRATIVE AGENTS referred to herein,
CITIBANK S.A., a Brazilian sociedade por acoes, as
Collateral Agent and CITIBANK, N.A., a national
banking association duly organized and validly
existing under the laws of the United States of
America, as Collateral Agent.
WHEREAS the Borrower (such term, and other capitalized terms
used in this preliminary statement, having the meanings set forth in Section
1.01 of this Agreement) and Vesper and Holdings are entering into the Common
Agreement and the Initial Participating Credit Agreement pursuant to which the
Lenders will make Loans to the Borrower;
WHEREAS the Loan Parties have agreed to enter into certain
Security Documents in order to secure the Obligations, and Holdings, Vesper and
the Subsidiaries have agreed to enter into the Guarantee Agreements in order to
guarantee the Borrower Obligations;
WHEREAS the Borrower may from time to time enter into
Additional Participating Credit Agreements and incur Additional Borrower
Obligations thereunder that may be secured under the Security Documents and
guaranteed pursuant to the Guarantee Agreements; and
WHEREAS the parties desire to enter into this Agreement in
order to set forth certain agreements with respect to the Obligations to be so
secured and guaranteed, including certain intercreditor arrangements with
respect to the approval of amendments, modifications and waivers with respect
to, and the enforcement of rights under, the Loan Documents and the allocation
of proceeds in respect of the Obligations;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. Terms defined in the Common
Agreement and not otherwise defined herein have the respective meanings set
forth in the Common Agreement. In addition, as used in this Agreement, the
following terms have the meanings specified below:
"Act" has the meaning set forth in Section 3.01.
1
166
"Additional Collateral Accounts" has the meaning set forth in
Section 5.01(a).
"Additional Security Document" means any agreement or
instrument (other than the Initial Security Documents) creating or evidencing a
security interest of the Collateral Agent in, or a Lien in favor of the
Collateral Agent or the Lenders on, or an assignment to the Collateral Agent or
the Lenders of, any Collateral.
"Borrower" means Vesper Sao Paulo Cayman, a Cayman Islands
company.
"Borrower Additional Obligations" means the due and punctual
payment by the Borrower of (a) the principal of and premium, if any, and
interest (including interest accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding) on the Loans under any Additional
Participating Credit Agreement, but only to the extent that such Loans are
designated as Borrower Additional Obligations in accordance with Section 2.01,
when and as due, whether at maturity, by acceleration, upon one or more dates
set for prepayment or otherwise and (b) all other monetary obligations,
including fees, costs, expenses and indemnities, whether primary, secondary,
direct, contingent, fixed or otherwise (including monetary obligations incurred
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding), of
the Borrower to the Secured Parties under any such Additional Participating
Credit Agreement.
"Borrower Initial Obligations" means the due and punctual
payment by the Borrower of (a) the principal of and premium, if any, and
interest (including interest accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding) on the Loans under the Initial
Participating Credit Agreement, when and as due, whether at maturity, by
acceleration, upon one or more dates set for prepayment or otherwise and (b) all
other monetary obligations, including fees, costs, expenses and indemnities,
whether primary, secondary, direct, contingent, fixed or otherwise (including
monetary obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), of the Borrower to the Secured Parties under the
Initial Participating Credit Agreement and the other Loan Documents (other than
any Additional Participating Credit Agreement).
"Borrower Obligations" means the Borrower Initial Obligations
and the Borrower Additional Obligations.
"Collateral" means (a) any and all "Collateral" as defined in
any applicable Security Document and (b) any and all other assets of
2
167
whatever nature, tangible or intangible, now owned or existing or hereafter
acquired or arising in which the Collateral Agent or the Lenders have been
granted a Lien or security interest, or that have been assigned to the
Collateral Agent or the Lenders, pursuant to any of the Security Documents.
"Collateral Accounts" has the meaning set forth in Section
5.01(a).
"Collateral Agent" means (a) Banco Citibank S.A., for purposes
of (i) the Brazilian Security Documents and (ii) acting as collateral agent for
Collateral located in Brazil, including all accounts located in Brazil, and (b)
Citibank, N.A. for all other purposes, in each case in their capacity as
collateral and intercreditor agent for the Lenders. In the event that it is
necessary to determine whether Citibank, N.A. or Citibank S.A. is responsible
for the enforcement or protection of any right or remedy under the Loan
Documents, then Citibank N.A. and Citibank S.A. shall determine which of them is
responsible and shall notify the Administrative Agents, the Borrower and Vesper
of such determination.
"Common Agreement" means the Common Agreement dated as of
December 27, 1999, among the parties hereto.
"Contingent Obligations" means any Obligations (other than the
Intercompany Obligations) that are contingent obligations or not yet liquidated.
"Contingent Obligations Collateral Account" has the meaning
set forth in Section 5.04.
"Enforcement Collateral Account" has the meaning set forth in
Section 5.01(a).
"General Collateral Account" has the meaning set forth in
Section 5.01(a).
"General Funds" means funds required to be deposited in the
General Collateral Account as provided in Section 5.01(d).
"General Funds Release Request" means a written request
delivered by Vesper to the Collateral Agent requesting the Collateral Agent to
release funds from the General Collateral Account. Each General Funds Release
Request (a) shall specify (i) the amount of funds to be released, (ii) the date
of the requested release, (iii) the purpose for which Vesper expects to use such
funds, (iv) the applicable provisions of the Loan Documents pursuant to which
such funds are being released and (v) the wire instructions for the transfer of
such funds to or for the account of Vesper and (b) shall be accompanied by a
certificate of a Financial Officer to the effect that such requested release of
funds is not in contravention of any Loan Document.
3
168
"Holdings" means Vesper Holding Sao Paulo S.A., a Brazilian
sociedade por acoes.
"Initial Security Documents" means this Agreement, the
Brazilian Security Documents and the Cayman Security Documents executed and
delivered on the Effective Date.
"Intercompany Obligations" means the due and punctual payment
by Vesper of (a) the principal of and premium, if any, and interest (including
interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) on the Notes, when and as due, whether at
maturity, by acceleration, upon one or more dates set for prepayment or
otherwise and (b) all other monetary obligations, including fees, costs,
expenses and indemnities, whether primary, secondary, direct, contingent, fixed
or otherwise (including monetary obligations incurred during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding), of Vesper under the Note
Purchase Agreement and the other Note Documents.
"Majority Credit Agreement Lenders" means, at any time with
respect to any Participating Credit Agreement, Lenders under such Participating
Credit Agreement having outstanding Loans and Commitments thereunder
representing more than 50% of the sum of the total outstanding Loans and
Commitments thereunder at the time.
"Majority Total Lenders" means, at any time, Lenders having
outstanding Loans and Commitments representing more than 50% of the sum of the
total outstanding Loans and Commitments at the time.
"Obligations" means the Borrower Obligations and Vesper
Obligations.
"Permitted Additional Obligations Designation" means a
Permitted Additional Obligations Designation with respect to an Additional
Participating Credit Agreement duly completed and executed by the Collateral
Agent, the Borrower, Vesper and the Administrative Agent under such Additional
Participating Credit Agreement and delivered pursuant to Section 2.01,
substantially in form of Exhibit A.
"Required Enforcement Lenders" means, at any time, the
Required Lenders at such time determined as if all Commitments then in effect
had been terminated.
"Required Lenders" means, at any time, the Majority Total
Lenders at the time and, in addition, on and after the first date on which a
Permitted Additional Obligations Designation is executed and delivered
hereunder, the Majority Credit Agreement Lenders at such time under each
Material Participating Credit Agreement. For purposes hereof, a "Material
Participating Credit Agreement" means, at any time, any Participating Credit
Agreement under which the sum of the total outstanding Loans and Commitments
represents more than 15% of the total
4
169
outstanding Loans and Commitments under all Participating Credit Agreements at
the time.
"Responsible Officer" shall mean, when used with respect to
the Collateral Agent, any officer within the Global Agency & Trust Services
department of the Collateral Agent, including any vice president, assistant vice
president, assistant secretary, assistant treasurer, trust officer or any other
officer of the Collateral Agent who customarily performs functions similar to
those performed by the Persons who at the time shall be such officers,
respectively, or to whom any corporate trust matter is referred because of such
person's knowledge of and familiarity with the particular subject and who shall
have direct responsibility for the administration of this Agreement.
"Secured Parties" means the Agents and the Lenders.
"Security Documents" means the Initial Security Documents and
the Additional Security Documents.
"Subordination Collateral Account" has the meaning set forth
in Section 5.01(a).
"Supermajority Total Lenders" means, at any time, Lenders
having outstanding Loans and Commitments representing more than 90% of the sum
of the total outstanding Loans and Commitments at the time.
"Support Documents" means the Security Documents, the
Indemnity, Subrogation and Contribution Agreement, the Subordination Agreement,
the Guarantee Agreements and the Sponsor Support Agreement.
"Vesper" means Vesper Sao Paulo S.A., a Brazilian sociedade
por acoes.
"Vesper Additional Obligations" means all monetary
obligations, including fees, costs, expenses and indemnities, whether primary,
secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), of Vesper and Holdings to the Secured Parties
under any Additional Participating Credit Agreement.
"Vesper Initial Obligations" means all monetary obligations,
including fees, costs, expenses and indemnities, whether primary, secondary,
direct, contingent, fixed or otherwise (including monetary obligations incurred
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding), of
each Loan Party (other than the Borrower) to the Secured Parties under any Loan
Documents (other than any Additional Participating Credit Agreement).
5
170
"Vesper Obligations" means the Vesper Initial Obligations, the
Vesper Additional Obligations and the Intercompany Obligations.
SECTION 1.02. Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified, (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles, Sections
and Exhibits shall be construed to refer to Articles and Sections of, and
Exhibits to, this Agreement and (e) the words "asset" and "property" shall be
construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts, contract rights, licenses and intellectual property.
SECTION 1.03. Accounting Terms; GAAP. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect on the date hereof, unless
the Borrower and the Collateral Agent otherwise agree.
6
171
ARTICLE II
Permitted Additional Obligations;
Additional Security Documents
SECTION 2.01. Permitted Additional Obligations. Holdings, the
Borrower and Vesper may from time to time enter into any Additional
Participating Credit Agreement and designate the Loans to be made thereunder as
Borrower Additional Obligations and the obligations of Vesper and Holdings
thereunder to be Vesper Additional Obligations by (a) delivering to the
Collateral Agent a Permitted Additional Obligations Designation in respect of
such Additional Participating Credit Agreement and attaching thereto a true and
complete copy of such Additional Participating Credit Agreement and all
instruments and agreements (together with all schedules, exhibits, annexes,
appendices and other attachments thereto) relating to such Additional
Participating Credit Agreement to which any Loan Party or Affiliate thereof is a
party and (b) delivering to the Agents such evidence as any Agent shall
reasonably request that such Additional Participating Credit Agreement satisfies
the criteria required by the Common Agreement. Upon completion of the actions
described in clauses (a) and (b) of the preceding sentence, the Loans and other
monetary obligations of the Borrower under such Additional Participating Credit
Agreement shall constitute Borrower Additional Obligations, the obligations of
Vesper and Holdings under such additional Participating Credit Agreement shall
constitute Vesper Additional Obligations and the Administrative Agent and
Lenders thereunder shall constitute Secured Parties hereunder and shall be bound
by the provisions hereof and of the Common Agreement.
SECTION 2.02. Additional Security Documents. If any Loan Party
is required by any Loan Document or other agreement to grant a security interest
in or Lien on, or assignment of, any assets (other than assets constituting
Collateral under the Initial Security Documents) of any Loan Party to secure any
Obligations, Holdings, Vesper and the Borrower shall, or shall cause the
applicable Subsidiary or Subsidiaries to, grant such security interest in or
Lien on, or assignment of, such assets to the Collateral Agent or, if required
in the case of any Brazilian Security Documents, the Lenders to secure all the
Obligations pursuant to one or more Additional Security Documents, in form and
substance reasonably satisfactory to the Collateral Agent.
7
172
ARTICLE III
Acts of Lenders;
Amounts of Obligations
SECTION 3.01. Acts of Secured Parties. Any request, demand,
authorization, direction, notice, consent, waiver or other action permitted or
required by this Agreement to be given or taken by or on behalf of any
Administrative Agent or Lender or any portion thereof (including the Required
Lenders, the Required Enforcement Lenders or the Supermajority Total Lenders)
shall be embodied in and evidenced by one or more instruments signed by such
Lender or Lenders or the Administrative Agent or Administrative Agents (as
applicable) and, except as otherwise expressly provided in any such instrument,
any such action shall become effective when such instrument or instruments shall
have been delivered to the Collateral Agent. The instrument or instruments
evidencing any action (and the action embodied therein and evidenced thereby)
are sometimes referred to herein as an "Act" of the Persons signing such
instrument or instruments. The Collateral Agent shall be entitled to rely
absolutely upon (a) an Act of any Administrative Agent if such Act purports to
be taken by or on behalf of any Lenders represented by such Administrative Agent
and (b) an Act of any Lender if such Act purports to be taken by or on behalf of
such Lender, and nothing in this Section 3.01 or elsewhere in this Agreement
shall be construed to require any Administrative Agent or Lender to demonstrate
that it has been authorized to take any action which it purports to be taking,
the Collateral Agent being entitled to rely conclusively, and being fully
protected in so relying, on any Act of such Administrative Agent or Lender.
SECTION 3.02. Determination of Amounts of Obligations.
Whenever the Collateral Agent is required to determine the existence or amount
of any of the Obligations, Loans or Commitments or any portion thereof for any
purposes of this Agreement, it shall be entitled to make such determination on
the basis of and shall be entitled to conclusively rely upon one or more
certificates of any applicable Administrative Agent or Lender; provided that if,
notwithstanding the request of the Collateral Agent, any applicable
Administrative Agent or Lender shall fail or refuse promptly to certify as to
the existence or amount of any Obligations, Loans or Commitments or any portion
thereof, the Collateral Agent shall be entitled to determine such existence or
amount by such method as the Collateral Agent may, in its sole discretion,
determine, including by reliance upon a certificate of the Borrower or Vesper;
provided further that, promptly following determination of any such amount, the
Collateral Agent shall notify such Administrative Agent or Lender of such
determination and thereafter shall use commercially reasonable means to correct
any error that such Administrative Agent or Lender brings to the attention of
the Collateral Agent in the form of a written notice identifying such error and
providing necessary information to correct it. The Collateral Agent may rely
conclusively, and shall be fully protected in so relying, on any determination
made by it in accordance with the provisions of the preceding sentence (or as
otherwise directed by a court of competent jurisdiction) and shall have no
liability to the Borrower, Vesper or any Secured Party or any other Person as a
result of any action taken by the Collateral Agent based upon such determination
prior to receipt of specific written notice of any error in such determination.
8
173
SECTION 3.03. Restrictions on Actions. Each Secured Party
agrees that, unless and until this Agreement is terminated as provided herein,
the provisions of this Agreement shall provide the exclusive method by which any
Administrative Agent or Lender may exercise, or direct the exercise of, rights
and remedies under the Loan Documents. Therefore, each Administrative Agent and
Lender shall, for the mutual benefit of all Secured Parties, except as permitted
under this Agreement:
(a) refrain from taking or filing any action, judicial or
otherwise, to enforce any rights or pursue any remedies under the
Support Documents, except for delivering notices and instructions
hereunder; and
(b) refrain from exercising any rights or remedies under the
Loan Documents which may be exercisable as a result of an Event of
Default, except for delivering notices and instructions hereunder;
provided, however, that this Section 3.03 shall not prevent (i) any Lender from
declining to make any Loan pursuant to the relevant Participating Credit
Agreement if the conditions to the obligation of such Lender to make such Loan
under such Participating Loan Agreement shall not have been satisfied or waived,
(ii) any Secured Party from imposing a default rate of interest in accordance
with the applicable Participating Credit Agreement, (iii) the Collateral Agent
from exercising any right or remedy or taking any other action that it is
permitted or authorized to exercise or take or (iv) a Secured Party from
exercising its right to commence legal proceedings to collect any Obligation due
and payable to such Secured Party and remaining unpaid, to obtain a judgment in
respect of any such Obligation and to enforce such judgment, in each case to the
same extent as if such Secured Party were an unsecured creditor.
ARTICLE IV
Duties of Collateral Agent
SECTION 4.01. Notice to Secured Parties. The Collateral Agent
shall promptly notify each Administrative Agent in the event it shall receive
any written notice that an Event of Default has occurred and is continuing or
any request by any party hereto or by any Loan Party for any consent, waiver or
amendment with respect hereto or to any other Loan Document. Upon receipt of any
such notice from the Collateral Agent, each Administrative Agent shall notify
the Lenders in its Lender Group thereof.
9
174
SECTION 4.02. Actions Under Support Documents. The Collateral
Agent shall not be obligated to take any action under this Agreement or any of
the other Loan Documents except for the performance of such duties as are
specifically set forth herein or therein. Subject to the provisions of Article
VII, the Collateral Agent shall take any action under or with respect to any
Support Document or the Common Agreement which it is instructed to take in
accordance with Article VIII and which is not inconsistent with or contrary to
the provisions of this Agreement, any other Support Document or the Common
Agreement. At any time that an Event of Default has occurred and is continuing,
the Collateral Agent shall, subject in all cases to the provisions of Article
VII, exercise or refrain from exercising all such rights, powers and remedies as
shall be available to it under the Common Agreement, the Support Documents or
any of them in accordance with any written instructions received from one or
more of the Administrative Agents on behalf of the Required Enforcement Lenders.
Absent written instructions from one or more of the Administrative Agents on
behalf of the Required Enforcement Lenders at a time that an Event of Default
has occurred and is continuing, the Collateral Agent may take, but shall have no
obligation to take, any and all such actions under the Common Agreement, the
Support Documents or any of them or otherwise as it shall deem to be in the best
interests of the Secured Parties in order to maintain the Collateral and protect
and preserve the Collateral and the rights of the Secured Parties.
SECTION 4.03. Records. The Collateral Agent shall maintain
records regarding determinations of the amounts of the outstanding Obligations,
Loans and Commitments for any purpose, any distributions from the Collateral
Accounts or Additional Collateral Accounts and any information received by the
Collateral Agent pursuant to Section 6.02. The information contained in such
records shall be made available to any Secured Party upon request.
SECTION 4.04. Lien Subordination Arrangements. The Collateral
Agent is authorized to subordinate Liens granted under the Security Documents to
any Liens permitted by clauses (vi) and (vii) of Section 6.02(a) of the Common
Agreement; provided that (a) such subordination shall be limited to the types of
Collateral expressly contemplated by such clauses and to secured obligations
expressly contemplated by such clauses and (b) the terms of any such
subordination shall be reasonably satisfactory to the Required Lenders.
SECTION 4.05. Delegation of Duties. The Collateral Agent may
exercise or perform any of its rights or duties under this Agreement and the
other Loan Documents (including (a) maintenance of any Collateral Accounts and
Additional Collateral Accounts and (b) acting as agent or attorney-in-fact for
the Lenders under any of the Support Documents) by or through agents, sub-agents
or attorneys-in-fact at such times and in such jurisdictions as the Collateral
Agent in its reasonable judgment deems necessary or appropriate. The Collateral
Agent shall not be responsible for the negligence or misconduct of any such
agents, sub-agents or attorneys-in-fact selected
10
175
by it with reasonable care. Each such agent, sub-agent and attorney-in-fact
shall be entitled to the benefits of this Agreement as though named herein as
the Collateral Agent while acting in its capacity as such.
ARTICLE V
Collateral Accounts; Distributions
SECTION 5.01. The Collateral Accounts. (a) The Collateral
Agent shall establish and maintain at one of its offices located in New York, NY
(or, in the case of the Brazilian Note Proceeds Account (as defined below),
Brazil) (i) collateral accounts designated the "Enforcement Collateral Account",
the "Subordination Collateral Account" and the "General Collateral Account",
respectively (such collateral accounts (including such related sub-accounts over
which the Collateral Agent has dominion and control established and maintained
either at its office or in the name of the Collateral Agent at the offices of
one or more other financial institutions located in such jurisdictions as the
Collateral Agent deems necessary or appropriate), together with the Contingent
Obligations Collateral Account, collectively, the "Collateral Accounts"), and
(ii) collateral accounts designated the "Loan Repayment Account", the "Sponsor
Support Account", the "Cayman Loan Proceeds Account", the "Brazilian Note
Proceeds Account" and the "Loan Prepayment Suspense Account" (such collateral
accounts (including such related sub-accounts over which the Collateral Agent
has dominion and control established and maintained either at its office or in
the name of the Collateral Agent at the offices of one or more other financial
institutions located in such jurisdictions as the Collateral Agent deems
necessary or appropriate) collectively, the "Additional Collateral Accounts").
(b) All amounts that are received by the Collateral Agent (in
its capacity as Collateral Agent, including as attorney-in-fact on behalf of the
Lenders if required under the Brazilian Security Documents) or, if received in
the case of any Brazilian Security Document, the Lenders in respect of the
Collateral, whether in connection with the exercise of any right or remedy
provided in this Agreement or any other Support Document or otherwise (including
all amounts received on account of any sale of or other realization upon any of
the Collateral pursuant to any Security Document), or pursuant to either
Guarantee Agreement or the Sponsor Support Agreement, in each case while an
Event of Default has occurred and is continuing, shall be deposited in the
Enforcement Collateral Account. While an Event of Default has occurred and is
continuing, all amounts on deposit in or required to be deposited in the
Subordination Collateral Account or the General Collateral Account shall be
transferred to the Enforcement Collateral Account. At any time thereafter that
all Events of Default shall have been cured or waived or otherwise shall cease
to exist, the Collateral Agent shall (subject to the payment of any Obligations
then due in accordance with Section 5.02) release any funds then remaining on
deposit in the Enforcement Collateral Account to any Loan Party to
11
176
the extent required by any of the Security Documents; provided that such funds
in an amount equal to the sum of (i) the amount of General Funds transferred to
the Enforcement Collateral Account from the General Collateral Account pursuant
to paragraph (d) of this Section and (ii) the amount of funds that would have
been deposited in the General Collateral Account pursuant to paragraph (d) of
this Section if an Event of Default had not occurred, together with all interest
and income on such amounts, shall be deposited in the General Collateral Account
for application in accordance with the terms of paragraph (d) of this Section.
(c) All amounts that are received by the Collateral Agent (in
its capacity as Collateral Agent) pursuant to the terms of the Subordination
Agreement shall be deposited in the Subordination Collateral Account. While an
Event of Default has occurred and is continuing, all amounts on deposit in or
required to be deposited in the Subordination Collateral Account shall be
transferred to the Enforcement Collateral Account.
(d) All amounts that are received by the Collateral Agent (in
its capacity as Collateral Agent) which by the terms of any Loan Document are
required to be held by the Collateral Agent (other than amounts required to be
deposited in the Enforcement Collateral Account, the Subordination Collateral
Account, the Additional Collateral Accounts or the Contingent Obligations
Collateral Account) shall be deposited in the General Collateral Account. While
an Event of Default has occurred and is continuing, all amounts on deposit in or
required to be deposited in the General Collateral Account shall be transferred
to the Enforcement Collateral Account. Vesper may, by delivery to the Collateral
Agent of a General Funds Release Request, request a release of General Funds
from the General Collateral Account in accordance with the applicable provisions
of the Loan Document or Loan Documents which required such funds to be deposited
with the Collateral Agent (but only to the extent any funds in the General
Collateral Account were deposited in the General Collateral Account pursuant to
such agreements). If no Default has occurred and is continuing on the date on
which such General Funds are requested to be released pursuant to the applicable
General Funds Release Request, the Collateral Agent shall release such General
Funds in accordance with such General Funds Release Request. Pending the receipt
by the Collateral Agent of a General Funds Release Request with respect to any
General Funds or a transfer of such General Funds to the Enforcement Collateral
Account as provided above, the Collateral Agent shall invest such funds in
Permitted Investments (and the proceeds thereof and interest thereon shall
constitute part of such General Funds).
(e) All amounts that are received by the Collateral Agent or
the Borrower pursuant to the terms of any Note Document shall be deposited in
the Loan Repayment Account. In addition, the Borrower shall deposit, or cause to
be deposited, in the Loan Repayment Account all amounts received from any other
Loan Party or any Sponsor or Shareholder to pay any Borrower Obligations. While
an Event of Default
12
177
has occurred and is continuing, all amounts on deposit in or required to be
deposited in the Loan Repayment Account shall be transferred to the Enforcement
Collateral Account. Except as provided in the preceding sentence, all amounts
deposited in the Loan Repayment Account shall be applied to pay Borrower
Obligations as and when due under the Participating Credit Agreements in the
manner described in such Participating Credit Agreements.
(f) All amounts that are received by the Collateral Agent
pursuant to the terms of the Sponsor Support Agreement shall be deposited in the
Sponsor Support Account. While an Event of Default has occurred and is
continuing, all amounts on deposit in or required to be deposited in the Sponsor
Support Account shall be transferred to the Enforcement Collateral Account.
Except as provided in the preceding sentence, all amounts deposited in the
Sponsor Support Account shall be applied to pay Obligations as and when due
under the Loan Documents in the manner described therein.
(g) All amounts that are received by the Borrower as proceeds
of Loans under any Participating Credit Agreement shall be deposited in the
Cayman Loan Proceeds Account. While an Event of Default has occurred and is
continuing, all amounts on deposit in or required to be deposited in the Cayman
Loan Proceeds Account shall be refunded to the Lenders that shall have made the
Loans to which such proceeds are attributable and applied to repay such Loans.
Except as provided in the preceding sentence, all amounts deposited in the
Cayman Loan Proceeds Account shall be used to purchase Notes from Vesper (and
such amounts shall thereupon be transferred to the Brazilian Note Proceeds
Account) within one Business Day of deposit therein; provided that any amount
specified in the Borrowing Request relating to any such Loan as being required
to pay fees under the relevant Participating Credit Agreement shall be
transferred forthwith on receipt of such amount in the Cayman Loan Proceeds
Account to the Loan Repayment Account by the Collateral Agent.
(h) All amounts that are received by Vesper from the sale of
Notes to the Borrower pursuant to the terms of the Note Documents shall be
deposited in the Brazilian Note Proceeds Account. While an Event of Default has
occurred and is continuing, all amounts on deposit in or required to be
deposited in the Brazilian Note Proceeds Account shall be refunded to the
Lenders that shall have made the Loans to which such amounts are attributable
and applied to repay such Loans. Except as provided in the preceding sentence,
all amounts deposited in the Brazilian Note Proceeds Account shall be used as
described in the Borrowing Request for the Loans to which such deposited amounts
are attributable. In order to request the release of funds deposited in the
Brazilian Note Proceeds Account, Vesper shall submit a certificate of a
Financial Officer to the Collateral Agent specifying the amount to be withdrawn
and the use of such funds (which shall be consistent with the Borrowing Request
to which such funds are attributable). Such certificate also shall include wire
transfer instructions with respect to the funds to be withdrawn; provided that
any and all funds that are to be released to make any payment to or for the
account of any Secured
13
178
Party or Vendor shall be released only by direct payment by the Collateral Agent
to or for the account of such Secured Party or Vendor, and Vesper's written
instructions shall provide for such direct payment. Any amount specified in the
Borrowing Request for the Loans to which such deposited amounts are attributable
as being required to make payments to an applicable Vendor in accordance with
Section 5.10(a) of the Common Agreement shall be applied in payment of the
relevant invoice promptly on receipt of such amount in the Brazilian Note
Proceeds Account, and in any event within two Business Days thereof, by the
Collateral Agent, in accordance with the irrevocable instructions of Vesper
accompanying the relevant Borrowing Request. Any amount specified in the
Borrowing Request for the Loans to which such deposited amounts are attributable
as being required to pay interest or fees, or any principal, in respect of any
Loan in accordance with Section 5.10(c) or 5.10(d) of the Common Agreement
(respectively) shall be transferred promptly on receipt of such amount in the
Brazilian Note Proceeds Account into the Loan Repayment Account by the
Collateral Agent in accordance with the irrevocable instructions of Vesper
accompanying the relevant Borrowing Request.
(i) All amounts that are received by the Collateral Agent
pursuant to Section 2.03(h) of the Common Agreement shall be deposited in the
Loan Prepayment Suspense Account. While an Event of Default has occurred and is
continuing, all amounts on deposit in or required to be deposited in the Loan
Prepayment Suspense Account shall be transferred to the Enforcement Collateral
Account. Except as provided in the preceding sentence, all amounts deposited in
the Loan Prepayment Suspense Account shall be applied (in accordance with
Vesper's instructions) to prepay Loans (or, in the case of funds deposited in
Reais, to purchase dollars that are applied to prepay Loans) as and when
required in accordance with Section 2.03(h) of the Common Agreement.
(j) All amounts deposited in the Collateral Accounts or
Additional Collateral Accounts shall be held by the Collateral Agent subject to
the terms hereof and shall constitute Collateral. Each of Vesper and the
Borrower hereby confirms and pledges, assigns and transfers to the Collateral
Agent, and hereby creates and grants to the Collateral Agent, for the benefit of
the Secured Parties, a security interest in the Collateral Accounts and the
Additional Collateral Accounts, all investments and other property and assets
held therein or through such Accounts and all proceeds thereof, to secure the
Obligations. No Loan Party shall have any rights with respect to, and the
Collateral Agent shall have exclusive dominion and control over, the Collateral
Accounts and the Additional Collateral Accounts. Vesper, the Borrower, Holdings
and the Subsidiaries hereby agree to take all actions and execute all documents,
instruments, filings, registrations and annotations reasonably requested by the
Collateral Agent in order to confirm, protect and perfect the security interest
and the priority thereof granted pursuant to this Agreement and the other Loan
Documents.
14
179
SECTION 5.02. Application of Proceeds. (a) Subject to Section
5.04, all amounts deposited in the Enforcement Collateral Account shall be
applied in the following order of priority:
FIRST, to the Agents pro rata for the payment of all costs and
expenses incurred by each such Agent (in its capacity as such hereunder or under
any other Loan Document, including as attorney-in-fact for the Lenders under the
Brazilian Security Documents) in connection with any Loan Document or any of the
Obligations, including all court costs and the fees and expenses of its agents
and legal counsel, the repayment of all advances made by each such Agent under
any Loan Document on behalf of any Loan Party and any other costs and expenses
incurred in connection with the exercise of any right or remedy hereunder or
under any other Loan Document;
SECOND, to the payment of all accrued and unpaid interest on
the Loans on the date of any such distribution (whether or not due and payable),
pro rata among the Secured Parties in accordance with the aggregate amount of
such interest on their respective Loans;
THIRD, to the payment of the principal of the Loans
outstanding on the date of any such distribution (whether or not due and
payable), pro rata among the Secured Parties in accordance with the outstanding
principal amount of their respective Loans;
FOURTH, to the payment of any and all other Obligations (other
than the Intercompany Obligations) outstanding on the date of any such
distribution (whether or not due and payable), pro rata among the Secured
Parties in accordance with the respective amount of such Obligations owing to
them;
FIFTH, the balance, if any, to the Borrower or its successors
and assigns, or such other Person or Persons as shall be entitled thereto, or as
a court of competent jurisdiction may otherwise direct.
(b) In lieu of distributing to any Lender or Lenders any
amount otherwise to be distributed to such Lender or Lenders hereunder, the
Collateral Agent may, in its discretion, distribute such amount to the
Administrative Agent in respect of such Lender's or Lenders' Lender Group. In
such event, the Administrative Agent receiving such amount shall distribute such
amount to the appropriate Lender or Lenders.
SECTION 5.03. Time of Payments. Subject to any written
instructions received by the Collateral Agent from or on behalf of the Required
Enforcement Lenders as to the times at which any amounts are to be distributed
pursuant to Section 5.02, all distributions under Section 5.02 shall be made at
such times as the Collateral Agent shall, in its sole discretion, determine.
SECTION 5.04. Treatment of Contingent Obligations.
Notwithstanding the foregoing, distributions under Section 5.02 shall
15
180
be made disregarding any Contingent Obligations. If the Collateral Agent is
notified in writing by any Administrative Agent that any Contingent Obligations
exist at any time that any amounts are to be distributed under clause FIFTH of
Section 5.02, the Collateral Agent shall deposit such amounts in a collateral
account established and maintained at one of its offices located in New York, NY
(designated the "Contingent Obligations Collateral Account") for the benefit of
the Secured Parties that have a claim with respect to such Contingent
Obligations. The Collateral Agent shall invest such amounts in Permitted
Investments until the applicable Administrative Agent or Administrative Agents
notify the Collateral Agent in writing that any or all of the Contingent
Obligations with respect to the Secured Parties represented by such
Administrative Agent or Administrative Agents, as the case may be, have become
fixed or liquidated (in which case such amounts up to the amount in the
Contingent Obligations Collateral Account shall be delivered to such
Administrative Agent or Administrative Agents, as the case may be, to be applied
pursuant to the applicable Loan Documents) or that all such Contingent
Obligations have expired or cease to exist (in which case any amount remaining
in the Contingent Obligations Collateral Account at such time shall be applied
in accordance with the provisions of Section 5.02).
SECTION 5.05. Collateral Agent's Calculations. In making the
determinations and allocations required by Section 5.02, the Collateral Agent
may rely upon certificates as provided in Section 3.02 as to the amounts payable
with respect to any Obligations. If any Secured Party receives any amount
pursuant to Section 5.02 in excess of the amount it was entitled to receive
pursuant to Section 5.02 as a result of a demonstrable error in the
determination of the amount of the Obligations, then such Secured Party shall
pay such excess to the Collateral Agent for application in accordance with
Section 5.02 as soon as practicable after the existence of such error shall have
been determined. All distributions made by the Collateral Agent pursuant to
Section 5.02 shall be (subject to the preceding sentence) final, and the
Collateral Agent shall have no duty to inquire as to the application by any
Administrative Agent or Lender of any amounts distributed to them.
SECTION 5.06. Sharing of Set-Offs. If any Lender shall, by
exercising any right of set-off or counterclaim or otherwise, obtain payment in
respect of any principal of or interest on any of its Loans resulting in such
Lender receiving payment of a greater proportion of the aggregate amount of its
Loans and accrued interest thereon than the proportion received by any other
Lender, then the Lender receiving such greater proportion shall purchase (for
cash at face value) participations in the Loans of other Lenders to the extent
necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans; provided that (i) if any such
participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase
price restored to the extent of such
16
181
recovery, without interest, and (ii) the provisions of this paragraph shall not
be construed to apply to any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement, any Participating Credit
Agreement or the Common Agreement or any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans to any assignee or participant, other than to the Borrower, Vesper, any
Subsidiary or Affiliate thereof (as to which the provisions of this paragraph
shall apply). Each of the Borrower and Vesper consents to the foregoing and
agrees, to the extent it may effectively do so under applicable law, that any
Lender acquiring a participation pursuant to the foregoing arrangements may
exercise against the Borrower and Vesper rights of set-off and counterclaim with
respect to such participation as fully as if such Lender were a direct creditor
of the Borrower or Vesper in the amount of such participation.
ARTICLE VI
Agreements
SECTION 6.01. Delivery of Agreements. The Borrower and Vesper
shall deliver to the Collateral Agent, promptly upon the execution thereof, true
and complete copies of (a) all amendments, supplements or other modifications to
any Loan Document and (b) each Additional Security Document.
SECTION 6.02. Information. On a quarterly basis promptly
following the end of each fiscal quarter, and from time to time upon the written
request of the Collateral Agent (which request will be made by the Collateral
Agent at the request of any Administrative Agent), the Borrower shall promptly
deliver to the Collateral Agent a list, setting forth as of a specified date not
more than 10 days prior to the date of delivery, of (a) the aggregate
outstanding Loans and Commitments and the name and address of each
Administrative Agent and Lender and the respective amounts of outstanding Loans
and Commitments attributable to each, in each case as of such date, and (b) the
outstanding Notes purchased by it under the Note Purchase Agreement. The
Collateral Agent shall provide a copy of the most recent list delivered to it
under this Section to any Secured Party upon request.
ARTICLE VII
The Collateral Agent
SECTION 7.01. Appointment; Rights and Duties. (a) Each of the
Secured Parties hereby irrevocably appoints the Collateral Agent as its agent
(and attorney-in-fact for purposes of any Security Documents granting Liens to
the Lenders) and authorizes the Collateral Agent to take such actions on its
behalf and to exercise such powers as are delegated to the Collateral Agent by
the terms of the Common
17
182
Agreement and the Support Documents, as applicable, together with such actions
and powers as are reasonably incidental thereto.
(b) Any Person serving as the Collateral Agent hereunder shall
have the same rights and powers in its capacity as a Secured Party as any other
Secured Party and may exercise the same as though it were not the Collateral
Agent, and such Person and its Affiliates may accept deposits from, lend money
to and generally engage in any kind of business with any Loan Party or Affiliate
thereof as if it were not the Collateral Agent hereunder.
(c) The Collateral Agent shall not have any duties or
obligations except those expressly set forth in the Common Agreement and the
Support Documents and no such duties or obligations shall be read into the
Common Agreement and the Support Documents against the Collateral Agent. Without
limiting the generality of the foregoing, (i) the Collateral Agent shall not be
subject to any fiduciary or other implied duties, regardless of whether an Event
of Default has occurred and is continuing, (ii) the Collateral Agent shall not
have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated by the
Common Agreement or any Support Document that the Collateral Agent is required
to exercise in accordance with Article VIII, and (iii) except as expressly set
forth in the Common Agreement and the Support Documents, the Collateral Agent
shall not have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to any Loan Party or Affiliate thereof that
is communicated to or obtained by the Person serving as the Collateral Agent or
any of its Affiliates in any capacity. The Collateral Agent shall not be liable
for any action taken or not taken by it in accordance with instructions received
by it pursuant to Article VIII or in the absence of its own gross negligence or
wilful misconduct. The Collateral Agent shall be deemed not to have knowledge of
any Default unless and until written notice thereof is given to a Responsible
Officer of the Collateral Agent by the Borrower, Vesper or another Secured
Party, and the Collateral Agent shall not be responsible for or have any duty to
ascertain or inquire into (A) any statement, warranty or representation made in
or in connection with any Loan Document, (B) the contents of any certificate,
report or other document delivered thereunder or in connection therewith, (C)
the performance or observance of any of the covenants, agreements or other terms
or conditions set forth in any Loan Document, (D) the validity, enforceability,
effectiveness or genuineness of any Loan Document or any other agreement,
instrument or document, or (E) the satisfaction of any condition set forth in
any Loan Document, other than to confirm receipt of items expressly required to
be delivered to the Collateral Agent but the Collateral Agent, in its
discretion, may make such inquiry into such facts or matters as it may see fit,
and, if the Collateral Agent shall determine to make such inquiry, it shall be
entitled to examine the books, records and premises of the Borrower, personally
or by agent or attorney at the sole cost of the Borrower and shall incur no
liability or additional liability of any kind by reason of inquiry.
18
183
(d) The Collateral Agent shall be entitled to conclusively
rely upon, and shall not incur any liability for relying upon, any notice,
request, certificate, consent, statement, instrument, document or other writing
(whether in its original or facsimile form) believed by it to be genuine and to
have been signed or sent by the proper Person. The Collateral Agent may consult
with legal counsel (who may be counsel for the Borrower or Vesper), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.
(e) The Collateral Agent may perform any and all its duties
and exercise its rights and powers by or through any one or more agents,
sub-agents or attorneys-in-fact appointed by the Collateral Agent and the
Collateral Agent shall not be responsible for any misconduct or negligence on
the part of any agent, sub-agent or attorney-in-fact appointed with due care by
it hereunder. The Collateral Agent and any such agent, sub-agent or
attorney-in-fact may perform any and all its duties and exercise its rights and
powers through their respective Related Parties. The exculpatory provisions of
the preceding paragraphs shall apply to any such agent, sub-agent or
attorney-in-fact and to the Related Parties of the Collateral Agent and any such
agent, sub-agent or attorney-in-fact, and shall apply to their respective
activities in connection with the activities as Collateral Agent.
(f) Subject to the appointment and acceptance of a successor
Collateral Agent as provided in this paragraph, the Collateral Agent may resign
at any time by notifying each Administrative Agent and the Borrower. Upon any
such resignation, the Required Lenders shall have the right to appoint a
successor. If no successor shall have been so appointed by the Required Lenders
and shall have accepted such appointment within 30 days after the retiring
Collateral Agent gives notice of its resignation, then the retiring Collateral
Agent may, on behalf of the Secured Parties, appoint a successor Collateral
Agent which shall be a bank or trust company with an office in each of Sao
Paulo, Brazil and New York, NY or an Affiliate of any such bank or trust
company. Upon the acceptance of its appointment as Collateral Agent hereunder by
a successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Collateral Agent, and the
retiring Collateral Agent shall be discharged from its duties and obligations
hereunder. The fees payable by the Borrower to a successor Collateral Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After the Collateral Agent's
resignation hereunder, the provisions of this Article shall continue in effect
for the benefit of such retiring Collateral Agent, its agents, sub-agents and
attorneys-in-fact and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while it was acting as Collateral
Agent.
19
184
(g) Each Secured Party acknowledges that it has, independently
and without reliance upon the Collateral Agent or any other Secured Party and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to extend credit to the Borrower pursuant to
the applicable Participating Credit Agreement and enter into this Agreement and
the Common Agreement. Each Secured Party also acknowledges that it will,
independently and without reliance upon the Collateral Agent or any other
Secured Party and based on such documents and information as it shall from time
to time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any other Loan Document or
related agreement or any document furnished hereunder or thereunder.
(h) The Collateral Agent shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement.
(i) The rights, privileges, protections, immunities and
benefits given to the Collateral Agent, including, without limitation, its right
to be indemnified, are extended to, and shall be enforceable by, the Collateral
Agent in each of its capacities hereunder, and to each agent, custodian and
other Person employed to act hereunder.
(j) In the absence of bad faith on its part, the Collateral
Agent may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or opinions
furnished to the Collateral Agent and conforming to the requirements of this
Agreement; but in the case of any such certificates or opinions which by any
provision hereof are specifically required to be furnished to the Collateral
Agent, the Collateral Agent shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this Agreement (but
need not confirm or investigate the accuracy of mathematical calculations or
other facts stated therein).
(k) In case an Event of Default has occurred and is
continuing, the Collateral Agent shall exercise such of the rights and powers
vested in it by this Agreement, and use the same degree of care and skill in
their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(l) The Collateral Agent shall not be liable for any error of
judgement made in good faith by a Responsible Officer, unless it shall be proved
that the Collateral Agent was negligent in ascertaining the pertinent facts.
(m) No provision of this Agreement shall require the
Collateral Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have
20
185
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
(n) Whether or not therein expressly so provided, every
provision of this Agreement relating to the conduct or affecting the liability
of or affording protection to the Collateral Agent shall be subject to the
provisions of this Section.
SECTION 7.02. Expenses; Indemnity; Damage Waiver. (a) The
Borrower and Vesper jointly and severally agree to pay (i) all reasonable
out-of-pocket expenses incurred by the Collateral Agent, including the
reasonable fees, charges and disbursements of counsel for the Collateral Agent,
in connection with the preparation and administration of the Loan Documents or
any amendments, modifications or waivers thereof, and (ii) all reasonable
out-of-pocket expenses incurred by the Collateral Agent, including the
reasonable fees, charges and disbursements of counsel and any agents for the
Collateral Agent, in connection with the enforcement or protection of rights in
connection with the Loan Documents, including rights under this Section, or in
connection with the Loans, including all costs and expenses incurred during any
workout, restructuring or negotiations in respect of the Loans.
(b) Each of the Borrower and Vesper jointly and severally
agree to indemnify the Collateral Agent, any agent, sub-agent or
attorney-in-fact appointed by the Collateral Agent pursuant hereto and each of
their respective Related Parties (each such Person being called an "Indemnitee")
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted against
any Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of any Loan Document or any other agreement or instrument
contemplated thereby, or the performance by the parties to the Loan Documents of
their respective obligations thereunder or the consummation of the Transactions
or any other transactions contemplated hereby or thereby, (ii) any Loan or the
use of the proceeds therefrom, (iii) any actual or alleged presence or release
of Hazardous Materials on or from any Mortgaged Property or any other property
owned or operated by the Borrower, Vesper or any of the Subsidiaries, or any
Environmental Liability related in any way to the Borrower, Vesper or any of the
Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory and regardless of whether any Indemnitee is a party thereto
including the costs of defending itself against any claim (whether asserted by
the Borrower, the Lenders, Vesper or any other Person); provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses have resulted from the
gross negligence or wilful misconduct of such Indemnitee.
21
186
(c) To the extent that the Borrower and Vesper fail to pay any
amount required to be paid by them to the Collateral Agent under paragraph (a)
or (b) of this Section, each Lender severally agrees to pay to the Collateral
Agent such Lender's pro rata share (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount; provided that the unreimbursed expense or indemnified loss, claim,
damage, liability or related expense, as the case may be, was incurred by or
asserted against the Collateral Agent in its capacity as such. For purposes
hereof, a Lender's "pro rata share" shall be determined based upon its share of
the sum of the total outstanding Loans and Commitments at the time.
(d) To the extent permitted by applicable law, neither the
Borrower nor Vesper shall assert, and each hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement or any agreement or
instrument contemplated hereby, the Transactions, any Loan or the use of the
proceeds thereof.
(e) All amounts due under this Section shall be payable not
later than 30 days after written demand therefor.
SECTION 7.03. Limitation on Duty of Collateral Agent in
Respect of Collateral; Indemnification. (a) Beyond the exercise of reasonable
care in the custody thereof, the Collateral Agent shall have no duty as to any
Collateral in its possession or control or in the possession or control of any
agent or bailee or any income thereon or as to preservation of rights against
prior parties or any other rights pertaining thereto and the Collateral Agent
shall not be responsible for filing any financing or continuation statements or
recording any documents or instruments in any public office at any time or times
or otherwise perfecting or maintaining the perfection of any security interest
in the Collateral. The Collateral Agent shall be deemed to have exercised
reasonable care in the custody of the Collateral in its possession if the
Collateral is accorded treatment substantially equal to that which it accords
its own property and shall not be liable or responsible for any loss or
diminution in the value of any of the Collateral, by reason of the act or
omission of any carrier, forwarding agency or other agent or bailee selected by
the Collateral Agent in good faith.
(b) The Collateral Agent shall not be responsible for the
existence, genuineness or value of any of the Collateral or for the validity,
perfection, priority or enforceability of the Liens in any of the Collateral,
whether impaired by operation of law or by reason of any action or omission to
act on its part hereunder, except to the extent such action or omission
constitutes gross negligence, bad faith or wilful misconduct on the part of the
Collateral Agent, for the validity or sufficiency of the Collateral or any
agreement or assignment contained therein, for the validity of the title of the
22
187
Borrower to the Collateral, for insuring the Collateral or for the payment of
taxes, charges, assessments or Liens upon the Collateral or otherwise as to the
maintenance of the Collateral. The Collateral Agent shall have no duty to
ascertain or inquire as to the performance or observance of any of the terms of
this Agreement, the Collateral Agency Agreement or the Security Documents by the
Borrower, the Issuer, the Secured Creditors' Representatives, the Secured
Creditors or the Collateral Agent.
SECTION 7.04. In any circumstance where the Collateral Agent
is required to exercise discretion, approve documentation or distribute proceeds
under any Loan Document, the Collateral Agent may, at its option, seek to obtain
instructions or directions from the Required Lenders or the Administrative
Agents with respect to such action. If the Collateral Agent so elects, then it
may refrain from taking such action until such directions or instructions are
received and shall have no liability to the Secured Parties for so refraining.
ARTICLE VIII
Voting
Any amendment, modification or waiver of any provision of any
Loan Document shall be subject to the provisions of this Article. In addition,
instructions to the Collateral Agent with respect to the exercise of remedies
under the Common Agreement or any Support Document (including pursuant to any
power of attorney granted to the Collateral Agent hereunder or under any
Brazilian Security Document), or any consent, approval or other action by the
Collateral Agent thereunder, shall be subject to the provisions of this Article.
SECTION 8.01. Amendments; Waivers. (a) Neither this Agreement,
any other Support Document nor the Common Agreement, nor any provision hereof or
thereof, may be waived, amended or modified except, in the case of this
Agreement or the Common Agreement, pursuant to an agreement or agreements in
writing entered into by Holdings, Vesper, the Borrower and Administrative Agents
representing the Required Lenders (with the written consent of the Required
Lenders) or, in the case of any other Support Document, pursuant to an agreement
or agreements in writing entered into by the Collateral Agent and the applicable
Loan Parties, Parent, Shareholders or Sponsors that are parties thereto with the
consent of the Required Lenders; provided that:
(i) no such agreement shall affect any rights, immunities or
rights to indemnification of any Agent (in its capacity as such), or
expand its duties, without the prior written consent of such Agent;
(ii) no such agreement shall, without the prior written
consent of each Lender, (A) modify Section 5.02 or any other
23
188
provision of this Agreement or any other Support Document that is
intended to provide for the Secured Parties to benefit equally and
ratably from the Support Documents, in a manner that adversely affects
the equal and ratable sharing of such benefits, (B) release all or any
substantial part of the Collateral from the Liens of the Security
Documents (except as expressly contemplated by the Security Documents
or this Agreement), (C) release Holdings, Vesper or any Subsidiary from
its Guarantee under the applicable Guarantee Agreement (except as
expressly contemplated by such Guarantee Agreement or this Agreement)
or limit or condition its obligations thereunder, (D) release any
Shareholder or Sponsor from its obligations under the Sponsor Support
Agreement (except as expressly contemplated by the Sponsor Support
Agreement) or limit or condition its obligations thereunder, or (E)
change the definitions of "Required Lenders", "Required Enforcement
Lenders", "Majority Total Lenders", "Majority Credit Agreement
Lenders", "Supermajority Total Lenders" or "Required Put Option
Lenders" or this Section, or any other provision of any Support
Document or the Common Agreement specifying the identity, number or
percentage of Lenders required to waive, amend or modify any rights
thereunder or make any determination, grant any consent or give any
instructions thereunder;
(iii) no such agreement shall waive, amend or modify any
provision of the Common Agreement that would have the effect of
changing the required use of proceeds of Loans under any Participating
Credit Agreement without the prior written consent of each of (A) the
Majority Credit Agreement Lenders under such Participating Credit
Agreement, (B) the Required Lenders and (C) each Lender with
outstanding Commitments under such Participating Credit Agreement which
is also the vendor or an Affiliate of the vendor under the Supply
Contract related to such Participating Credit Agreement; and
(iv) any condition to the obligations of the Lenders to make
Loans under a Participating Credit Agreement on the occasion of any
Borrowing thereunder after the Effective Date may be waived by either
(A) the Majority Credit Agreement Lenders under such Participating
Credit Agreement or (B) the Required Lenders; provided, however, that
any waiver pursuant to clause (B) shall only be effective with respect
to any Borrowing if the condition so waived shall also have been waived
pursuant to clause (A) or (B) with respect to each other
contemporaneous Borrowing to be made under any Participating Credit
Agreement.
(b) Neither any Participating Credit Agreement nor any
provision thereof may be waived, amended or modified without the consent of both
the Required Lenders and such number or percentage of the Lenders under such
Participating Credit Agreement as are required to approve such waiver, amendment
or modification in accordance with the terms thereof; provided that:
24
189
(i) the consent of the Required Lenders shall not be required
with respect to any such waiver, amendment or modification if such
waiver, amendment or modification is limited solely to borrowing
procedures or other administrative provisions thereunder, if such
waiver, amendment or modification is not inconsistent with this
Agreement, any other Support Document or the Common Agreement; and
(ii) no such waiver, amendment or modification shall, without
the prior written consent of the Supermajority Total Lenders (as well
as such number or percentage of the Lenders under the applicable
Participating Credit Agreement as are required to approve such waiver,
amendment or modification in accordance with the terms thereof), (A)
reduce the Commitment of any Lender under such Participating Credit
Agreement, (B) increase the rate of interest on any Loan under such
Participating Credit Agreement or increase any fees payable thereunder,
other than in connection with comparable increases effected under all
other Participating Credit Agreements, (C) change the scheduled date of
expiration of any Commitment under such Participating Credit Agreement
to an earlier date or (D) change the maturity of or the scheduled date
of payment of any installment of principal of any Loan, or of any
interest thereon, or of any fees payable under such Participating
Credit Agreement, in each case to an earlier date, or increase the
amount of any such scheduled payment, in each case other than in
connection with comparable changes effected under all other
Participating Credit Agreements.
(c) Neither the Substitute Financing Side Letter nor any
provision thereof may be waived, amended or modified without the consent both of
the Required Lenders and of each of the Initial Lenders.
(d) Neither any Note Document nor any provision thereof may be
waived, amended or modified without the consent of the Required Lenders;
provided that no such amendment, modification or waiver shall reduce, postpone
or otherwise change any payment under the Note Documents, without the consent of
each Lender, if, after giving effect to such amendment, modification or waiver,
such payments would be insufficient to satisfy any payment of any Borrower
Obligations as and when due.
SECTION 8.02. Enforcement. Instructions to the Collateral
Agent with respect to the exercise of rights and remedies under the Common
Agreement and the Support Documents (including pursuant to any power of attorney
granted to the Collateral Agent hereunder or under any Brazilian Security
Document) upon the occurrence and during the continuance of an Event of Default
shall require an Act of the Required Enforcement Lenders, as provided in Section
4.02.
25
190
SECTION 8.03. Prepayment of Tranche A Loans and Tranche B
Loans. Upon the written election of the Required Put Option Lenders determined
as provided in this Section 8.03, the Borrower shall be required to prepay the
Tranche A Loans and Tranche B Loans under the Put Option Credit Agreements on
the fifth anniversary of the Effective Date pursuant to Section 2.03(d) of the
Common Agreement. No later than 240 days prior to the fifth anniversary of the
Effective Date, any Lender may request, in writing (the "Put Option Consent
Request"), the Administrative Agent for its Lender Group to solicit such
election and, upon receipt by any Administrative Agent of (x) a Put Option
Consent Request or (y) notice by any Administrative Agent under any other Put
Option Credit Agreement (an "Other Administrative Agent") that such Other
Administrative Agent has received a Put Option Consent Request under any other
Put Option Credit Agreement, such Administrative Agent shall promptly (i) in the
case of (x), notify the Other Administrative Agents of such Put Option Consent
Request and (ii) in the case of either (x) or (y), solicit the Lenders in its
Lender Group regarding the requested election. No later than 205 days prior to
the fifth anniversary of the Effective Date, each Administrative Agent shall
notify the Collateral Agent of the outcome of such solicitation. No later than
200 days prior to the fifth anniversary of the Effective Date, the Collateral
Agent shall notify the Lenders under the Put Option Credit Agreements whether or
not the Required Put Option Lenders have elected to require the prepayment
described in the first sentence of this Section 8.03. Any Lender holding Tranche
A Loans and Tranche B Loans pursuant to a Put Option Credit Agreement may elect,
by written notice to the Collateral Agent within 10 days after the date of the
notice to such Lender referred to in the preceding sentence, not to have the
Borrower make any such prepayment on all such Lender's Tranche A Loans and
Tranche B Loans, in which case such Loans shall not be prepaid pursuant to
Section 2.03(d) of the Common Agreement. No later than 180 days prior to the
fifth anniversary of the Effective Date, the Collateral Agent shall notify the
Borrower if the Borrower shall be required to make a prepayment pursuant to
Section 2.03(d) of the Common Agreement and shall identify the Loans to be
prepaid in connection therewith.
ARTICLE IX
Intercreditor Arrangements
SECTION 9.01. Security Interests. The Collateral Agent and
each of the Administrative Agents on behalf of the Lenders hereby agree that the
Liens and security interests granted to the Collateral Agent or the Lenders, as
applicable, under the Security Documents, the Guarantees provided under the
Guarantee Agreements, and the rights of the Collateral Agent or the Lenders, as
applicable, under the Sponsor Support Agreement and the other Support Documents
shall be treated, as among the Secured Parties, as having equal priority and
shall at all times be shared by the Secured Parties as provided herein.
26
191
SECTION 9.02. Turnover of Collateral and Certain Payments. If
any Secured Party (i) acquires custody, control or possession of any Collateral
or proceeds therefrom or (ii) receives any payment pursuant to enforcement of
any Support Document, in each case other than pursuant to the terms of this
Agreement, then such Secured Party shall promptly cause such Collateral,
proceeds or payments to be delivered to or put in the custody, possession or
control of the Collateral Agent for disposition or distribution in accordance
with the provisions of Article V. Until such time as the provisions of the
immediately preceding sentence have been complied with, such Secured Party shall
be deemed to hold such Collateral, proceeds or payments in trust for the parties
entitled thereto hereunder. Notwithstanding the foregoing, no Secured Party
shall be required to deliver to or put in the custody, possession or control of
the Collateral Agent or to hold in trust as specified in the preceding sentence
any amount of any Borrower Obligation paid or prepaid by the Borrower to it (and
not obtained by it through any sale of or other realization upon any Collateral
or by enforcement of its rights under any Support Document as provided herein
and in the Support Documents) in accordance with the terms of the applicable
Participating Credit Agreement and the Common Agreement.
SECTION 9.03. Release of Collateral and Guarantees. (a) In
connection with any sale, transfer or disposition of any Collateral to any
Person (other than any Loan Party) that does not violate any Loan Document, the
Secured Parties agree that any Liens on such Collateral created pursuant to the
Security Documents will be released upon the delivery of evidence reasonably
satisfactory to the Collateral Agent that such sale, transfer or disposition
(and the release of such Liens and, if applicable, any guarantee of the
Obligations) is in compliance with the requirements of each Loan Document
(including a certificate from a Financial Officer to such effect). In the event
any such sale, transfer or disposition to a Person other than a Loan Party shall
be of 100% of the Equity Interests of a Subsidiary (other than the Borrower),
the Secured Parties hereby authorize the Collateral Agent upon the delivery of
such evidence to release such Subsidiary and its assets from its obligations
under and the Liens created by the Support Documents and to execute amendments,
releases and other documents in form and substance satisfactory to the
Collateral Agent confirming such release.
(b) Collateral may be released in connection with the exercise
of any rights, powers or remedies by the Collateral Agent pursuant to and in
accordance with Section 4.02 and such release shall not require any approval
under this Section.
(c) The Secured Parties hereby authorize the Collateral Agent
(including in its capacity as attorney-in-fact for the Lenders under any
Security Document granting Liens to the Lenders), to execute releases and other
documents in form and substance satisfactory to the Collateral Agent in respect
of any release of Collateral permitted under this Section.
27
192
SECTION 9.04. Additional Collateral. Each of the Secured
Parties hereby covenants and agrees that it (a) will not accept any Guarantee of
any of the Obligations by any Loan Party or Affiliate thereof unless such
Person's Guarantee is provided pursuant to a Guarantee Agreement or otherwise
Guarantees the payment of all the Obligations on a pari passu basis and (b) will
not take any security interest in or Lien on or assignment of any assets of any
Loan Party or Affiliate thereof to secure any of the Obligations unless such
security interest or Lien or assignment is granted to the Collateral Agent (or,
if required, to all the Lenders) to secure the payment of all the Obligations on
a pari passu basis pursuant to an Additional Security Document; provided that
the foregoing shall not apply to any insurance or other credit support acquired
by a Secured Party from a Person (other than any Loan Party or an Affiliate
thereof) with respect to the Obligations.
SECTION 9.05. Purchase of Collateral. Any Secured Party may
purchase Collateral at any public sale of such Collateral pursuant to any of the
Security Documents and to the extent, but only to the extent, approved by the
Required Enforcement Lenders (determined for this purpose without giving effect
to the Obligations owed to the Secured Party that is making such purchase,
unless it is the only Lender at the time) may make payment on account thereof by
using any Obligation then due and payable to such Secured Party from the Person
which granted a security interest in such Collateral as a credit against the
purchase price.
SECTION 9.06. Further Assurances, etc. Each party hereto shall
execute and deliver such other documents and instruments, in form and substance
reasonably satisfactory to the other parties hereto, and shall take such other
action, in each case as any other party hereto may reasonably have requested (at
the cost and expense of the Borrower and Vesper which jointly and severally
agree to pay such costs and expenses), to effectuate and carry out the
provisions of this Agreement and the other Support Documents, including by
recording or filing in such places as the requesting party may deem desirable,
this Agreement or such other documents or instruments.
28
193
ARTICLE X
Benefit of Agreement
This Agreement is being executed and delivered by the
Administrative Agents, but shall be binding upon and shall benefit, in addition
to the parties hereto, each Lender. Each Administrative Agent acknowledges that
it is authorized by its Lender Group to enter into this Agreement and the Common
Agreement on their behalf. Notwithstanding the foregoing, it is expressly
understood that the entitlement of each Lender to the benefits of this Agreement
and of the other Support Documents is subject to the terms and conditions of
this Agreement and is expressly conditioned on the observance by such Lender of
such terms and conditions. Without limiting the foregoing, the Collateral Agent
may (but shall not be required to), as a condition to making any distribution
hereunder to which any Administrative Agent or Lender would be entitled, require
that such Administrative Agent or Lender execute and deliver to the Collateral
Agent an acknowledgment of and consent to all the provisions of this Agreement
(specifically including the provisions of Section 5.05); provided that the
failure to request or obtain any such acknowledgment or consent shall not affect
any of the obligations of such Administrative Agent or Lender hereunder.
ARTICLE XI
Miscellaneous
SECTION 11.01. Notices. Except in the case of notices and
other communications expressly permitted to be given by telephone, all notices
and other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to Holdings or Vesper, to it at Xx. Xxxxxx Xxxxxx,
0000, 10E andar, 00000-000 Xxx Xxxxx - XX, Xxxxxx, Attention of Legal
Department (Telecopy No. 011 55 11 3024 7504);
(b) if to the Borrower, to it at Xx. Xxxxxx Xxxxxx, 0000, 10E
andar, 00000-000 Xxx Xxxxx - XX, Xxxxxx, Attention of Legal Department
(Telecopy No. 011 55 11 3024 7504);
(c) if to the Collateral Agent, in the case of Citibank, N.A.,
to it at 000 Xxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, XX 00000, Attention of
Global Agency and Trust Services (Telecopy No. 212-657-3862), and in
the case of Citibank, S.A., to it at [ ], Attention of [ ]
(Telecopy No. [ ]);
(d) if to any Administrative Agent, to it at the address or
telecopy number set forth beneath its signature to this Agreement
29
194
or in the Permitted Additional Obligations Designation executed by it,
as applicable; and
(e) if to any other Lender, to it at its address (or telecopy
number) set forth in the records of the Administrative Agent for such
Lender's Lender Group (which such Administrative Agent will supply to
the Borrower or any other Agent upon request).
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 11.02. Waivers; Amendments. (a) No failure or delay by
the Collateral Agent or any other Secured Party in exercising any right or power
hereunder or under the Common Agreement or any other Support Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of the Collateral
Agent and the other Secured Parties hereunder and under the Common Agreement and
the other Support Documents are cumulative and are not exclusive of any rights
or remedies that it would otherwise have. No waiver of any provision of the
Common Agreement or any Support Document or consent to any departure by any Loan
Party therefrom shall in any event be effective unless the same shall be
permitted by Article VIII, and then such waiver or consent shall be effective
only in the specific instance and for the purpose for which given.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except as provided in Article VIII.
SECTION 11.03. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be effective as delivery of a
manually executed counterpart of this Agreement.
SECTION 11.04. Severability. Any provision of this Agreement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
30
195
SECTION 11.05. Governing Law; Jurisdiction; Consent to Service
of Process. (a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
(b) Each of Holdings, Vesper and the Borrower hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of the Supreme Court of the State of New York sitting
in New York County and of the United States District Court of the Southern
District of New York, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to any Support Document or the Substitute
Financing Side Letter, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement, any other Support Document or the Substitute
Financing Side Letter shall affect any right that the Collateral Agent or any
Secured Party may otherwise have to bring any action or proceeding relating to
this Agreement, any other Support Document or the Substitute Financing Side
Letter against the Borrower, Vesper or their properties in the courts of any
jurisdiction.
(c) Each of Holdings, Vesper and the Borrower hereby
irrevocably and unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection which it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Agreement, any other Support Document or the Substitute Financing Side
Letter in any court referred to in paragraph (b) of this Section. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 11.01. Each of
Holdings, Vesper and the Borrower hereby irrevocably designates, appoints and
empowers CT Corporation System, with offices on the date hereof at 000 Xxxxxx
Xxxxxx, Xxx Xxxx, XX 00000 as its designee, appointee and agent to receive, and
accept for and on its behalf, and in respect of its property, service of any and
all legal process, summons, notices and documents which may be served in any
action or proceeding described in paragraph (b) above. Each of Holdings, Vesper
and the Borrower further consent to service of process which may be served in
any action or suit brought in any court by mailing copies thereof by registered
or certified mail, postage prepaid, to Holdings, Vesper or the Borrower, as
applicable, at their respective addresses for notice set forth in Section 11.01,
such service to become effective 30 days after mailing. If for any reason
31
196
such designee, appointee and agent shall cease to act as such, each of Holdings,
Vesper and the Borrower agrees to designate a new designee, appointee and agent
in New York City on the terms and for the purposes of this provision
satisfactory to the Collateral Agent under this Agreement. Nothing in this
Agreement or any other Support Document will affect the right of any party to
this Agreement to serve process in any other manner permitted by law.
SECTION 11.06. WAIVERS. (a) WAIVER OF JURY TRIAL. EACH PARTY
HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER SUPPORT
DOCUMENT OR THE SUBSTITUTE FINANCING SIDE LETTER (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
(b) WAIVER OF SOVEREIGN IMMUNITY. TO THE EXTENT THAT ANY LOAN
PARTY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT
OR FROM ANY LEGAL PROCESS, SUCH LOAN PARTY HEREBY WAIVES SUCH IMMUNITY AND
AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR OTHERWISE, IN ANY SUCH
SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE
JURISDICTION OF THE COURTS NAMED IN SECTION 11.05(b), THAT IT IS IMMUNE FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION, EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF
OR ITS PROPERTY, OR ATTACHMENT EITHER PRIOR TO JUDGMENT OR IN AID OF EXECUTION,
BY REASON OF SOVEREIGN IMMUNITY, OR OTHERWISE, THAT THE VENUE OF THE SUIT,
ACTION OR PROCEEDING IS IMPROPER OR THAT THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR THE SUBJECT MATTER HEREOF OR THEREOF MAY NOT BE ENFORCED IN OR BY
SUCH COURTS.
SECTION 11.07. Headings. Article and Section headings used
herein are for convenience of reference only, are not part of this Agreement and
shall not affect the construction of, or be taken into consideration in
interpreting, this Agreement.
SECTION 11.08. Successors and Assigns. (a) Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party (including, in the
case of any Secured Party, each transferee or assignee of Obligations held by
it).
(b) Neither Holdings, Vesper nor the Borrower shall assign or
delegate any of its rights or duties hereunder or any of its interest herein
without the prior written consent of each Agent, and any purported assignment or
delegation in contravention of this paragraph shall be void.
32
197
SECTION 11.09. Termination. This Agreement shall automatically
terminate when (i) the Liens and security interests granted under the Security
Documents have terminated and (ii) the Collateral has been released and the
Borrower Obligations have been indefeasibly paid and performed in full and all
Commitments shall have terminated; provided that the provisions of Section 7.02
shall not be affected by any such termination.
SECTION 11.10. Complete Agreement. This Agreement constitutes
the entire agreement between the parties hereto with respect to the subject
matter hereof and supersedes all prior representations, negotiations, writings,
memoranda and agreements.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
VESPER SAO PAULO S.A.,
by
--------------------------------
Name:
Title:
VESPER HOLDING SAO PAULO S.A.,
by
--------------------------------
Name:
Title:
VESPER SAO PAULO CAYMAN,
by
--------------------------------
Name:
Title:
CITIBANK, N.A., as Collateral and
Intercreditor Agent,
by
--------------------------------
Name:
Title:
33
198
CITIBANK, S.A., as Collateral and
Intercreditor Agent,
by
--------------------------------
Name:
Title:
SOCIETE GENERALE, NEW YORK BRANCH,
as Administrative Agent under the
Lucent Credit Agreement,
by
--------------------------------
Name:
Title:
34
199
EXHIBIT A
FORM OF
PERMITTED ADDITIONAL OBLIGATIONS DESIGNATION
[Date]
To: CITIBANK, N.A. and BANCO CITIBANK S.A., as Collateral and Intercreditor
Agent
Re: Collateral Agency and Intercreditor Agreement, dated as of December 27,
1999, among VESPER SAO PAULO S.A., VESPER SAO PAULO HOLDING S.A.,
VESPER SAO PAULO CAYMAN LTD. CAYMAN LTD., BANCO CITIBANK S.A., as
Collateral and Intercreditor Agent, CITIBANK, N.A., as Collateral and
Intercreditor Agent, and the Administrative Agents referred to therein
(the "Collateral Agency Agreement").
Reference is hereby made to the Collateral Agency Agreement.
Capitalized terms which are defined in the Collateral Agency Agreement are used
herein as therein defined.
In accordance with Section 2.01 of the Collateral Agency
Agreement, the following agreement is hereby added as an Additional
Participating Credit Agreement, the Loans made thereunder shall constitute
Permitted Additional Obligations and the obligations of Vesper thereunder shall
constitute Vesper Additional Obligations:
[DESCRIBE ADDITIONAL PARTICIPATING CREDIT AGREEMENT]
Attached hereto are true and complete copies of such Additional Participating
Credit Agreement and each other agreement (together with all schedules,
exhibits, annexes, appendices and other attachments thereto) relating to such
Additional Participating Credit Agreement.
By its execution hereof, each of the Borrower and Vesper
represents and warrants that, upon the execution and delivery hereof, all the
terms and conditions required to be satisfied under the Loan Documents in order
for the above-referenced agreement to constitute an "Additional Participating
Credit Agreement" shall be satisfied.
The undersigned is the Administrative Agent under such
Additional Participating Credit Agreement and hereby acknowledges receipt of a
copy of the Collateral Agency Agreement, the Common Agreement and the Substitute
Financing Side Letter. The undersigned represents that it has been authorized
under the Additional Participating Credit Agreement referred to above on behalf
of the Lenders thereunder to become a party to the Collateral Agency Agreement,
the Common Agreement and the Substitute Financing Side Letter on behalf of such
Lenders, and by the undersigned's execution and delivery hereof, each such
Lender shall become bound by the
1
200
Collateral Agency Agreement, the Common Agreement and the Substitute Financing
Side Letter and shall have all the rights and obligations of a Secured Party
under the Collateral Agency Agreement in accordance with the terms thereof.
All communications and notices under the Collateral Agency
Agreement and the Common Agreement to the undersigned Administrative Agent shall
be given to it at the address set forth below.
[ ], as Administrative
Agent under the above-referenced
Additional Participating Credit
Agreement,
by
---------------------------
Name:
Title:
Address for Notices:
Telecopy No.:
VESPER SAO PAULO S.A.
by
---------------------------
Name:
Title:
VESPER HOLDING SAO PAULO S.A.
by
---------------------------
Name:
Title:
VESPER SAO PAULO CAYMAN
by
---------------------------
Name:
Title:
Accepted:
CITIBANK, N.A., as Collateral Agent
by
---------------------------
Name:
Title:
BANCO CITIBANK S.A., as Collateral Agent
by
---------------------------
Name:
Title:
2
201
EXHIBIT B
INDEMNITY, SUBROGATION and CONTRIBUTION
AGREEMENT dated as of December 27, 1999, among VESPER
SAO PAULO CAYMAN, a Cayman Islands company (the
"Borrower"), each subsidiary listed on Schedule I
hereto (the "Guarantors") of VESPER SAO PAULO S.A., a
Brazilian sociedade por acoes ("Vesper") and
CITIBANK, N.A., as collateral and intercreditor agent
(the "Collateral Agent") for the Secured Parties.
Reference is made to (a) the Collateral Agency and
Intercreditor Agreement dated as of December 27, 1999 (as amended, supplemented
or otherwise modified from time to time, the "Collateral Agency and
Intercreditor Agreement"), among Vesper, the Borrower, Vesper Holding Sao Paulo
S.A. ("Holdings"), the Administrative Agents referred to therein and the
Collateral Agent and (b) the Subsidiary Guarantee Agreement and the other
Support Documents. Capitalized terms used herein and not defined herein shall
have the meanings assigned to such terms in the Collateral Agency and
Intercreditor Agreement. Each Guarantor acknowledges receipt of a true and
correct copy of the Collateral Agency and Intercreditor Agreement and agrees to
the terms thereof.
The Lenders have agreed to make Loans to the Borrower pursuant
to, and upon the terms and subject to the conditions specified in, the Common
Agreement and the Participating Credit Agreements. The Guarantors have
guaranteed the Loans and the other Borrower Obligations pursuant to the
Subsidiary Guarantee Agreement; the Guarantors also have granted Liens on and
security interests in certain of their assets to secure the Borrower Obligations
pursuant to the Security Documents. The obligations of the Lenders to make Loans
are conditioned on, among other things, the execution and delivery by the
Borrower and the Guarantors of this Agreement.
Accordingly, the Borrower, each Guarantor and the Collateral
Agent agree as follows:
202
SECTION 1. Indemnity and Subrogation. In addition to all such
rights of indemnity and subrogation as the Guarantors may have under applicable
law (but subject to Section 3), the Borrower agrees that (a) in the event a
payment in respect of any Borrower Obligation shall be made by any Guarantor
under the Subsidiary Guarantee Agreement, the Borrower shall indemnify such
Guarantor for the full amount of such payment and such Guarantor shall be
subrogated to the rights of the Person to whom such payment shall have been made
to the extent of such payment and (b) in the event any assets of any Guarantor
shall be sold pursuant to any Security Document to satisfy a claim of any
Secured Party in respect of any Borrower Obligation, the Borrower shall
indemnify such Guarantor in an amount equal to the greater of the book value or
the fair market value of the assets so sold.
SECTION 2. Contribution and Subrogation. Each Guarantor (a
"Contributing Guarantor") agrees (subject to Section 3) that, in the event a
payment shall be made by any other Guarantor under the Subsidiary Guarantee
Agreement or assets of any other Guarantor shall be sold pursuant to any
Security Document to satisfy a claim described in Section 1 of any Secured Party
and such other Guarantor (the "Claiming Guarantor") shall not have been fully
indemnified by the Borrower, the Contributing Guarantor shall indemnify the
Claiming Guarantor in an amount equal to the amount of such payment or the
greater of the book value or the fair market value of such assets, as the case
may be, in each case multiplied by a fraction of which the numerator shall be
the net worth of the Contributing Guarantor on the date hereof and the
denominator shall be the aggregate net worth of all the Guarantors on the date
hereof (or, in the case of any Guarantor becoming a party hereto after the date
hereof, the date such Guarantor so becomes a party hereto). Any Contributing
Guarantor making any payment to a Claiming Guarantor pursuant to this Section 2
shall be subrogated to the rights of such Claiming Guarantor under Section 1 to
the extent of such payment.
SECTION 3. Subordination. Notwithstanding any provision of
this Agreement to the contrary, all rights of the Guarantors under Sections 1
and 2 and all other rights of indemnity, contribution or subrogation under
applicable law or otherwise shall constitute Secondary Subordinated Obligations
under, and as defined in, the Subordination Agreement. No failure on the part of
the Borrower or any Guarantor to make the payments required by Sections 1 and 2
(or any other payments required under applicable law or otherwise) shall in any
respect limit the obligations and liabilities of any Guarantor with respect to
its obligations hereunder, and each Guarantor shall remain liable for the full
amount of the obligations of such Guarantor hereunder.
SECTION 4. Termination. This Agreement (a) shall survive and
be in full force and effect so long as any Borrower Obligation is outstanding
and has not been indefeasibly paid in full, and so long as any of the
Commitments have not been terminated, and (b) shall continue
2
203
to be effective or be reinstated, as the case may be, if at any time payment, or
any part thereof, of any Borrower Obligation is rescinded or must otherwise be
restored by any Secured Party or any Guarantor upon the bankruptcy or
reorganization of the Borrower, any Guarantor or otherwise.
SECTION 5. Successors and Assigns; Binding Agreement;
Assignments; Several Agreement. Whenever in this Agreement any of the parties
hereto is referred to, such reference shall be deemed to include the successors
and assigns of such party; and all covenants, promises and agreements by or on
behalf of the parties that are contained in this Agreement shall bind and inure
to the benefit of each party and their respective successors and assigns. This
Agreement shall become effective as to the Borrower or any Guarantor when a
counterpart hereof executed on behalf of any such party shall have been
delivered to the Collateral Agent and a counterpart hereof shall have been
executed on behalf of the Collateral Agent, and thereafter shall be binding upon
the Borrower, such Guarantor and the Collateral Agent and their respective
successors and assigns, and shall inure to the benefit of the Borrower, such
Guarantor, the Collateral Agent and the Secured Parties, and their respective
successors and assigns, except that neither the Borrower nor any Guarantor shall
have the right to assign its rights or obligations hereunder (and any such
attempted assignment shall be void), except as expressly contemplated by this
Agreement or the other Support Documents. Notwithstanding the foregoing, at the
time any Guarantor is released from its obligations under the Subsidiary
Guarantee Agreement and any Security Documents to which it is a party in
accordance with the Support Documents and the other Loan Documents, such
Guarantor will cease to have any rights or obligations under this Agreement.
This Agreement shall be construed as a separate agreement with respect to each
Guarantor and may be amended, modified, supplemented, waived or released with
respect to any Guarantor without the approval of any other Guarantor and without
affecting the obligations of any other Guarantor hereunder.
SECTION 6. Waivers; Amendment. (a) No failure or delay on the
part of the Collateral Agent or any Guarantor in exercising any right or power
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power by the Collateral Agent or any Guarantor
preclude any other or further exercise thereof or the exercise of any other
right or power. The remedies of the Collateral Agent and the Guarantors
hereunder are cumulative and are not exclusive of any other rights or remedies
that they would otherwise have. No waiver of any provisions of this Agreement or
consent to any departure therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) below, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or
3
204
agreements in writing entered into between the Borrower, the Collateral Agent
and the Guarantor with respect to which such waiver, amendment or modification
is to apply, subject to any consents required in accordance with Sections 8.01
and 11.02 of the Collateral Agency and Intercreditor Agreement.
SECTION 7. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
SECTION 8. Notices. All communications and notices hereunder
shall be in writing and given as provided in the Subsidiary Guarantee Agreement
and addressed as specified therein.
SECTION 9. Survival of Agreement; Severability. (a) All
covenants and agreements made by the Borrower and each Guarantor herein and in
the certificates or other instruments prepared or delivered in connection with
or pursuant to this Agreement or the other Support Documents shall be considered
to have been relied upon by the Collateral Agent, the Secured Parties and each
Guarantor and shall survive the extension of credit by any Secured Party
pursuant to any Loan Document, regardless of any investigation made by the
Secured Parties or on their behalf, and shall continue in full force and effect
until this Agreement shall terminate.
(b) Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.
SECTION 10. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract, and shall become effective as provided in
Section 5. Delivery of an executed signature page to this Agreement by facsimile
shall be as effective as delivery of a manually signed counterpart of this
Agreement.
SECTION 11. Rules of Interpretation. The rules of
interpretation specified in Sections 1.02 and 11.07 of the Collateral Agency and
Intercreditor Agreement shall be applicable to this Agreement.
SECTION 12. Additional Guarantors. Upon execution and delivery
by the Collateral Agent and a Subsidiary of an instrument in the form of Annex 1
hereto, such Subsidiary shall become a Guarantor hereunder with the same force
and effect as if originally named as a Guarantor hereunder. The execution and
delivery of any instrument
4
205
adding an additional Guarantor as a party to this Agreement shall not require
the consent of any Guarantor hereunder. The rights and obligations of each
Guarantor hereunder shall remain in full force and effect notwithstanding the
addition of any new Guarantor as a party to this Agreement.
5
206
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers as of the date first
appearing above.
VESPER SAO PAULO CAYMAN,
by
------------------------------------
Name:
Title:
EACH OF THE SUBSIDIARIES LISTED ON
SCHEDULE I HERETO,
by
------------------------------------
Name:
Title:
6
207
CITIBANK, N.A., as Collateral and
Intercreditor Agent,
by
------------------------------------
Name:
Title:
7
208
SCHEDULE I
to the Indemnity, Subrogation
and Contribution Agreement
Guarantors
Name
209
ANNEX 1 TO
THE INDEMNITY, SUBROGATION AND
CONTRIBUTION AGREEMENT
SUPPLEMENT NO. dated as of , to
the Indemnity, Subrogation and Contribution Agreement
dated as of December 27, 1999 (as the same may be
amended, supplemented or otherwise modified from time
to time, the "Indemnity, Subrogation and Contribution
Agreement"), among VESPER SAO PAULO CAYMAN, a Cayman
Islands company (the "Borrower"), each subsidiary
listed on Schedule I hereto (the "Guarantors") of
VESPER SAO PAULO S.A., a Brazilian sociedade por
acoes ("Vesper"), and CITIBANK, N.A., as collateral
agent (the "Collateral Agent") for the Secured
Parties.
A. Reference is made to (a) the Collateral Agency and
Intercreditor Agreement (as defined in the Indemnity, Subrogation and
Contribution Agreement) and (b) the Indemnity, Subrogation and Contribution
Agreement.
B. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Indemnity,
Subrogation and Contribution Agreement.
C. The Borrower and the Guarantors have entered into the
Indemnity, Subrogation and Contribution Agreement in order to induce the Secured
Parties to make loans under the applicable Loan Documents. Section 12 of the
Indemnity, Subrogation and Contribution Agreement provides that additional
Subsidiaries of Vesper may become Guarantors under the Indemnity, Subrogation
and Contribution Agreement by execution and delivery of an instrument in the
form of this Supplement. The undersigned Subsidiary (the "New Guarantor") is
executing this Supplement to become a Guarantor under the Indemnity, Subrogation
and Contribution Agreement in order to induce the Secured Parties to make
additional loans under the applicable Loan Documents and as consideration for
loans previously made under the Loan Documents.
Accordingly, the Collateral Agent and the New Guarantor agree
as follows:
SECTION 1. In accordance with Section 12 of the Indemnity,
Subrogation and Contribution Agreement, the New Guarantor by its signature below
becomes a Guarantor under the Indemnity, Subrogation and Contribution Agreement
with the same force and effect as if originally named therein as a Guarantor and
the New Guarantor hereby agrees to all the terms and provisions of the
Indemnity, Subrogation and Contribution Agreement applicable to it as a
Guarantor thereunder. Each reference to a "Guarantor" in the Indemnity,
Subrogation and Contribution Agreement shall be deemed to include the New
Guarantor. The Indemnity, Subrogation and Contribution Agreement is hereby
incorporated herein by reference.
1
210
SECTION 2. The New Guarantor represents and warrants to the
Collateral Agent and the Secured Parties that this Supplement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Supplement shall become effective when the Collateral
Agent shall have received counterparts of this Supplement that, when taken
together, bear the signatures of the New Guarantor and the Collateral Agent.
Delivery of an executed signature page to this Supplement by telecopy shall be
as effective as delivery of a manually signed counterpart of this Supplement.
SECTION 4. Except as expressly supplemented hereby, the
Indemnity, Subrogation and Contribution Agreement shall remain in full force and
effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
SECTION 6. Any provision of this Supplement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof and in the Indemnity, Subrogation and
Contribution Agreement; and the invalidity of a particular provision in a
particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 7. All communications and notices hereunder shall be
in writing and given as provided in Section 8 of the Indemnity, Subrogation and
Contribution Agreement. All communications and notices hereunder to the New
Guarantor shall be given to it at the address set forth under its signature.
SECTION 8. The New Guarantor agrees to reimburse the
Collateral Agent for its reasonable out-of-pocket expenses in connection with
this Supplement, including the reasonable fees, other charges and disbursements
of counsel for the Collateral Agent.
IN WITNESS WHEREOF, the New Guarantor and the Collateral Agent
have duly executed this Supplement to the Indemnity, Subrogation and
Contribution Agreement as of the day and year first above written.
2
211
[Name of New Guarantor],
by
------------------------------------
Name:
Title:
CITIBANK, N.A., as Collateral and
Intercreditor Agent,
by
------------------------------------
Name:
Title:
3
212
SCHEDULE I
to Supplement No.___ to the Indemnity,
Subrogation and Contribution Agreement
Guarantors
4
213
EXHIBIT C
PARENT GUARANTEE AGREEMENT dated as of
December 27, 1999, between VESPER HOLDING SAO PAULO
HOLDING S.A., a Brazilian sociedade por acoes (the
"Guarantor"), and CITIBANK, N.A., as collateral and
intercreditor agent (the "Collateral Agent") for the
Secured Parties.
Reference is made to the Collateral Agency and Intercreditor
Agreement dated as of December 27, 1999 (as amended, supplemented or otherwise
modified from time to time, the "Collateral Agency and Intercreditor Agreement")
among Vesper Sao Paulo, S.A. ("Vesper"), the Guarantor, Vesper Sao Paulo Cayman
(the "Borrower"), the Administrative Agents referred to therein and the
Collateral Agent. Capitalized terms used herein and not defined herein shall
have the meanings assigned to such terms in the Collateral Agency and
Intercreditor Agreement. The Guarantor acknowledges receipt of a true and
correct copy of the Collateral Agency and Intercreditor Agreement and agrees to
the terms thereof.
The Lenders have agreed to make Loans to the Borrower pursuant
to, and upon the terms and subject to the conditions specified in, the Common
Agreement and the Participating Credit Agreements. The obligations of the
Lenders to make Loans are conditioned on, among other things, the execution and
delivery by the Guarantor of this Agreement.
Accordingly, the Guarantor and the Collateral Agent hereby
agree as follows:
SECTION 1. Guarantee. The Guarantor unconditionally
guarantees, as a primary obligor and not merely as a surety, the due and
punctual payment of the Borrower Obligations, when and as due, whether at
maturity, by acceleration, upon one or more dates set for prepayment or
otherwise. The Guarantor further agrees that the Borrower Obligations may be
extended or renewed, in whole or in part, without notice to or further assent
from it, and that it will remain bound upon its guarantee notwithstanding any
extension or renewal of any Borrower Obligation.
214
SECTION 2. Obligations Not Waived. To the fullest extent
permitted by applicable law, the Guarantor waives presentment to, demand of
payment from and protest to the Borrower or any other Loan Party of any of the
Borrower Obligations, and also waives notice of acceptance of its guarantee and
notice of protest for nonpayment. The obligations of the Guarantor hereunder
shall not be affected by (a) the failure of the Collateral Agent or any Secured
Party to assert any claim or demand or to enforce or exercise any right or
remedy against the Borrower, Vesper or any of the Subsidiaries under the
provisions of any Support Document or any other Loan Document or otherwise, (b)
any rescission, waiver, amendment or modification of, or any release from any of
the terms or provisions of this Agreement, any other Support Document, any other
Loan Document, any Guarantee or any other agreement, or (c) the failure to
perfect any security interest in, or the release of, any of the security held by
or on behalf of the Collateral Agent or any other Secured Party.
SECTION 3. Security. The Guarantor authorizes the Collateral
Agent to (a) take and hold security for the payment of this Agreement and the
Borrower Obligations and exchange, enforce, waive and release any such security,
all in accordance with the terms of the applicable Support Document, (b) apply
such security and direct the order or manner of sale thereof as it in its sole
discretion may determine and (c) release or substitute any one or more
endorsees, other guarantors of other obligors.
SECTION 4. Guarantee of Payment. The Guarantor further agrees
that its guarantee hereunder constitutes a guarantee of payment when due and not
of collection, and waives any right to require that any resort be had by the
Collateral Agent or any Secured Party to any of the security held for payment of
the Borrower Obligations or to any balance of any deposit account or credit on
the books of the Collateral Agent or any other Secured Party in favor of the
Borrower, Vesper, any other Loan Party or any other Person.
SECTION 5. No Discharge or Diminishment of Guarantee. The
obligations of the Guarantor hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason (other than the
indefeasible payment in full in cash of all the Borrower Obligations), including
any claim of waiver, release, surrender, alteration or compromise of any of the
2
215
Borrower Obligations, and shall not be subject to any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality or unenforceability of the Borrower Obligations or otherwise. Without
limiting the generality of the foregoing, the obligations of the Guarantor
hereunder shall not be discharged or impaired or otherwise affected by the
failure of the Collateral Agent or any Secured Party to assert any claim or
demand or to enforce any remedy under any Loan Document or any other agreement,
by any waiver or modification of any provision of any thereof, by any default,
failure or delay, wilful or otherwise, in the performance of the Borrower
Obligations, or by any other act or omission that may or might in any manner or
to any extent vary the risk of the Guarantor or that would otherwise operate as
a discharge of the Guarantor as a matter of law or equity (other than the
indefeasible payment in full in cash of all the Borrower Obligations).
SECTION 6. Defenses of Borrower Waived. To the fullest extent
permitted by applicable law, the Guarantor waives any defense based on or
arising out of the defense of the Borrower, Vesper or any other Loan Party or
the unenforceability of the Borrower Obligations or any part thereof from any
cause, or the cessation from any cause of the liability of the Borrower, Vesper
or any other Loan Party, other than the final and indefeasible payment in full
in cash of all the Borrower Obligations. The Collateral Agent and the Secured
Parties may, at their election, foreclose on any security held by one or more of
them by one or more judicial or nonjudicial sales, accept an assignment of any
such security in lieu of foreclosure, compromise or adjust any part of the
Borrower Obligations, make any other accommodation with the Borrower, Vesper or
any other Loan Party or guarantor or exercise any other right or remedy
available to them against the Borrower, Vesper or any other Loan Party or
guarantor, without affecting or impairing in any way the liability of the
Guarantor hereunder except to the extent the Borrower Obligations have been
fully, finally and indefeasibly paid in cash. To the fullest extent permitted by
applicable law, the Guarantor waives any defense arising out of any such
election even though such election operates, pursuant to applicable law, to
impair or to extinguish any right of reimbursement or subrogation or other right
or remedy of the Guarantor against the Borrower, Vesper or any other Loan Party
or guarantor, as the case may be, or any security.
3
216
SECTION 7. Agreement to Pay; Subordination. In furtherance of
the foregoing and not in limitation of any other right that the Collateral Agent
or any Secured Party has at law or in equity against the Guarantor by virtue
hereof, upon the failure of the Borrower to pay any Borrower Obligation when and
as the same shall become due, whether at maturity, by acceleration, after notice
of prepayment or otherwise, the Guarantor hereby promises to and will forthwith
pay, or cause to be paid, to the Collateral Agent in cash the amount of such
unpaid Borrower Obligations, to be applied by the Collateral Agent in the manner
required by Article V of the Collateral Agency and Intercreditor Agreement. Upon
payment by the Guarantor of any sums to the Collateral Agent as provided above,
all rights of the Guarantor against the Borrower arising as a result thereof by
way of right of subrogation, contribution, reimbursement, indemnity or otherwise
shall in all respects be subordinate and junior in right of payment to the prior
indefeasible payment in full in cash of all the Senior Obligations, as provided
in the Subordination Agreement.
SECTION 8. Information. The Guarantor assumes all
responsibility for being and keeping itself informed of the Borrower's financial
condition and assets, and of all other circumstances bearing upon the risk of
nonpayment of the Borrower Obligations and the nature, scope and extent of the
risks that the Guarantor assumes and incurs hereunder, and agrees that none of
the Collateral Agent or the Secured Parties will have any duty to advise the
Guarantor of information known to it or any of them regarding such circumstances
or risks.
SECTION 9. Termination. The Guarantee made hereunder (a) shall
terminate when all the Borrower Obligations have been indefeasibly paid in full
and all Commitments shall have terminated and (b) shall continue to be effective
or be reinstated, as the case may be, if at any time payment, or any part
thereof, of any Borrower Obligation is rescinded or must otherwise be restored
by any Secured Party upon the bankruptcy or reorganization of the Borrower, any
other Loan Party, the Guarantor or otherwise.
SECTION 10. Binding Effect; Several Agreement; Assignments.
Whenever in this Agreement either of the parties hereto is referred to, such
reference shall be deemed to include the successors and assigns of such party;
and all covenants, promises and agreements by or on behalf of the Guarantor that
4
217
are contained in this Agreement shall bind and inure to the benefit of each
party hereto and its respective successors and assigns. This Agreement shall
become effective as to the Guarantor when a counterpart hereof executed on
behalf of the Guarantor shall have been delivered to the Collateral Agent, and a
counterpart hereof shall have been executed on behalf of the Collateral Agent,
and thereafter shall be binding upon the Guarantor and the Collateral Agent and
their respective successors and assigns, and shall inure to the benefit of the
Guarantor, the Collateral Agent and the Secured Parties, and their respective
successors and assigns, except that the Guarantor shall not have the right to
assign its rights or obligations hereunder or any interest herein (and any such
attempted assignment shall be void).
SECTION 11. Waivers; Amendment. (a) No failure or delay of the
Collateral Agent in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Collateral Agent hereunder
and of the Collateral Agent and the Secured Parties under the other Support
Documents are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of this Agreement or
consent to any departure by the Guarantor therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) below, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. No notice or demand on the Guarantor in any case
shall entitle the Guarantor to any other or further notice or demand in similar
or other circumstances.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into between the Guarantor and the Collateral Agent, subject to
any consents required in accordance with Sections 8.01 and 11.02 of the
Collateral Agency and Intercreditor Agreement.
SECTION 12. Governing Law. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
5
218
SECTION 13. Notices. All communications and notices hereunder
shall be in writing and given as provided in Section 11.01 of the Collateral
Agency and Intercreditor Agreement.
SECTION 14. Survival of Agreement; Severability. (a) All
covenants and agreements made by the Guarantor herein and in the certificates or
other instruments prepared or delivered in connection with or pursuant to this
Agreement or any other Support Document shall be considered to have been relied
upon by the Collateral Agent and the other Secured Parties and shall survive the
extension of credit by any Secured Party pursuant to a Loan Document, regardless
of any investigation made by any Secured Party or on their behalf, and shall
continue in full force and effect until this Agreement shall terminate.
(b) Any provision of the Agreement held to be invalid, illegal
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.
SECTION 15. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract, and shall become effective as provided in
Section 10. Delivery of an executed signature page to this Agreement by
facsimile shall be as effective as delivery of a manually executed counterpart
of this Agreement.
SECTION 16. Rules of Interpretation. The rules of
interpretation specified in Sections 1.02 and 11.07 of the Collateral Agency and
Intercreditor Agreement shall be applicable to this Agreement.
SECTION 17. Jurisdiction; Consent to Service of Process. (a)
The Guarantor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of the Supreme Court of the State of
New York sitting in New York County or the United States District Court of the
Southern District of New York, and any
6
219
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Support Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement or any other Support Document shall
affect any right that the Collateral Agent or any Secured Party may otherwise
have to bring any action or proceeding relating to this Agreement or any other
Support Document against any Guarantor or its properties in the courts of any
jurisdiction.
(b) The Guarantor hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any other
Support Document in any court referred to in paragraph (a) of this Section. Each
of the parties hereto hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 13. The
Guarantor hereby irrevocably designates, appoints and empowers CT Corporation
System, with offices on the date hereof at 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, XX 00000, as its designee, appointee and agent to receive and accept for
and on its behalf, and in respect of its property, service of any and all legal
process, summons, notices and documents which may be served in any action or
proceeding described in (a) above. If for any reason such designee, appointee
and agent shall cease to act as such, the Guarantor agrees to designate a new
designee, appointee and agent in New York City on the terms and for the purposes
of this provision satisfactory to the Collateral Agent under this Agreement.
Nothing in this Agreement will affect the right of either party to this
Agreement to serve process in any other manner permitted by law.
7
220
SECTION 18. WAIVERS. (a) WAIVER OF JURY TRIAL. EACH PARTY
HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF
THE OTHER SUPPORT DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTY
HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER SUPPORT
DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 18.
(b) WAIVER OF SOVEREIGN IMMUNITY. TO THE EXTENT THAT ANY PARTY
HERETO HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT
OR FROM ANY LEGAL PROCESS, SUCH PARTY HEREBY WAIVES SUCH IMMUNITY AND AGREES NOT
TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR OTHERWISE, IN ANY SUCH SUIT,
ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE
JURISDICTION OF THE COURTS NAMED IN SECTION 17(a), THAT IT IS IMMUNE FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION, EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF
OR ITS PROPERTY, OR ATTACHMENT EITHER PRIOR TO JUDGMENT OR IN AID OF EXECUTION,
BY REASON OF SOVEREIGN IMMUNITY, OR OTHERWISE, THAT THE VENUE OF THE SUIT,
ACTION OR PROCEEDING IS IMPROPER OR THAT THIS AGREEMENT OR ANY OTHER SUPPORT
DOCUMENT OR THE SUBJECT MATTER HEREOF OR THEREOF MAY NOT BE ENFORCED IN OR BY
SUCH COURTS.
SECTION 19. Right of Setoff. While an Event of Default has
occurred and is continuing, each Secured Party is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other Indebtedness at any time owing by such Secured
Party to or for the credit or the account of the Guarantor against any or all
the obligations of the Guarantor now or hereafter existing under this Agreement
and the other Support Documents held by such Secured Party, irrespective of
whether or not such Secured Party shall have made any demand under this
Agreement or any other Support Document and although such obligations may be
unmatured. The rights of each Secured
8
221
Party under this Section 19 are in addition to other rights and remedies
(including other rights of setoff) which such Secured Party may have.
SECTION 20. Currency. (a) If for the purpose of obtaining
judgment in any court it is necessary to convert a sum due hereunder to either
party hereunder in dollars into another currency, the parties hereto agree, to
the fullest extent permitted by applicable law, that the rate of exchange used
shall be that at which in accordance with normal banking procedures such party
could purchase dollars with such other currency in New York City on the day
which is at least two Business Days prior to the day on which final judgment is
rendered.
(b) To the fullest extent permitted by law, the obligation of
either party in respect of any sum payable hereunder by it to the other party
hereunder shall, notwithstanding any judgment in a currency (the "Judgment
Currency") other than dollars, be discharged only to the extent that on the
Business Day following receipt by such other party of any sum adjudged to be so
due in the Judgment Currency such other party may in accordance with normal
banking procedures purchase dollars with the Judgment Currency; if the amount of
dollars which could have been so purchased is less than the sum originally due
to such other party in dollars, such first party agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify such other party
against such loss, and, if the amount of dollars which could have been so
purchased exceeds the sum originally due to such other party, such other party
agrees to remit to such first party such excess.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
VESPER HOLDING SAO PAULO S.A.,
by
--------------------------------------
Name:
Title:
9
222
CITIBANK, N.A., as Collateral and
Intercreditor Agent,
by
--------------------------------------
Name:
Title:
10
223
EXHIBIT D
FORM OF PERFECTION CERTIFICATE
WAIVED
224
EXHIBIT E
EXECUTION COPY
PLEDGE AGREEMENT
This PLEDGE AGREEMENT dated as December 27, 1999 by and among: (a) VESPER SAO
PAULO S.A., a Brazilian corporation with its principal office at Xx. xxx Xxxxxx
Xxxxxx, 0000, 00xx Xxxxx, Xxxx and State of Sao Paulo, Brazil, registered with
CNJP under No. 02.629.188/001-67 (hereinafter referred to as "COMPANY"); and (b)
LUCENT TECHNOLOGIES INC., a corporation duly organized and existing under the
laws of Delaware, with its principal office at 000 Xxxx Xxxxxx Xxxx, Xxxxxx, Xxx
Xxxxxx 00000 (hereinafter referred to as "Lucent"); (c) the other JOINT LENDERS
hereafter listed on Annex I hereto, pursuant to Clauses 18 and 19 (together with
Lucent, hereinafter collectively referred to as the "JOINT LENDERS"); (d) VESPER
SAO PAULO S.A., a Brazilian corporation with its principal office at Xx. xxx
Xxxxxx Xxxxxx, 0000, 00xx Xxxxx, Xxxx and State of Sao Paulo, Brazil, registered
with CNJP under No. 02.629.188/001-67 (hereinafter referred to as "DEPOSITARY");
and (e) as intervening parties: VESPER SAO PAULO CAYMAN, a company organized and
existing under the laws of the Cayman Islands, with its registered offices at
Walkers, Xxxxxx House, Xxxx Street, P.O. Box 256GT, Xxxxxx Town, Grand Cayman,
Cayman Islands (hereinafter referred to as "VESPER CAYMAN"); and VESPER HOLDING
SAO PAULO S.A., a Brazilian corporation with its principal office at Xx. xxx
Xxxxxx Xxxxxx, 0000, 00xx Xxxxx, Xxxx and State of Sao Paulo, Brazil, registered
with CNJP under No. 03.008.468/0001-10 (hereinafter referred to as "HOLDING",
together with VESPER CAYMAN and the COMPANY, hereinafter collectively referred
to as the "JOINT DEBTORS");
WHEREAS
A certain Credit Agreement (as amended, modified and supplemented, hereinafter
referred to as the "Credit Agreement") dated as of December 27, 1999, has been
executed by and among VESPER CAYMAN, a wholly owned subsidiary of the COMPANY,
the COMPANY, HOLDING, the Lenders party thereto, and Societe
225
Generale, as Administrative Agent (as such terms are defined in the Credit
Agreement);
A certain Common Agreement (as amended, modified and supplemented, hereinafter
referred to as the "Common Agreement") dated as of December 27, 1999, has been
executed by and among VESPER CAYMAN, the COMPANY, HOLDING, the Administrative
Agents party thereto, and Banco Citibank S.A., as Collateral and Intercreditor
Agent (as such terms are defined in the Common Agreement) (the Common Agreement
together with the Credit Agreement, hereinafter collectively referred to as the
"Loan Agreement");
The Loan Agreement will be translated into Portuguese and duly filed with the
competent Registry of Deeds and Documents of the City of Sao Paulo, State of Sao
Paulo;
Capitalized terms used herein not otherwise defined shall have the meanings
ascribed to them in the Loan Agreement;
Pursuant to the Loan Agreement, the JOINT LENDERS have agreed to make Loans to
VESPER CAYMAN in the aggregate principal amount set forth in the Credit
Agreement, with interest and upon the other terms and conditions specified in
the Loan Agreement;
The COMPANY is the lawful owner of the assets identified and described in Annex
II hereto and has agreed to pledge in favor of the JOINT LENDERS all of such
assets, as well as certain assets hereafter acquired (hereinafter referred to as
the "Pledged Assets"), as security for compliance with the JOINT DEBTORS'
respective Obligations under the Loan Agreement, the Notes and the other Loan
Documents;
The DEPOSITARY is the COMPANY;
-2-
226
NOW, THEREFORE, the parties resolve to enter into this PLEDGE AGREEMENT, which
shall be governed by the following terms and conditions:
CLAUSE 1. - The COMPANY hereby pledges in favor of the JOINT LENDERS the
Pledged Assets, as security for the regular and full compliance by the JOINT
DEBTORS with their respective Obligations under the Loan Agreement, the Notes
and the other Loan Documents.
PARAGRAPH 1. - The Pledged Assets are pledged as security for, among
other things, the repayment by VESPER CAYMAN under the Loan Agreement for Loans
made thereunder, the basic terms of which repayment, for purposes of article
761, I, II and III of the Brazilian Civil Code, are as follows:
Tranche A: US$535,000,000
Maturity Date: December 31, 2007
Interest Payments: Last day of each Interest Period
Amortization: Provided that Lucent holds the Loan, principal payable
in ten semiannual installments commencing on the 42nd
month following the date hereof
Put Option: December 31, 2004
Interest Rate: LIBOR for the Interest Period plus the Applicable
Margin
Tranche B: US$181,500,000
Maturity Date: December 31, 2007
Interest Payments: Last day of each Interest Period
Amortization: Provided that Lucent holds the Loan, principal payable
in six semiannual installments commencing on the 66th
month following the date hereof
Put Option: December 31, 2004
Interest Rate: LIBOR for the Interest Period plus the Applicable
Margin
Tranche C: US$65,000,000
Maturity Date: December 31, 2004
Interest Payments: Last day of each Interest Period
Interest Rate: LIBOR plus the Applicable Margin
-3-
227
CLAUSE 2. - The COMPANY represents and warrants that, except for the lien
created by this Pledge Agreement, the Pledged Assets are free and clear of any
options, pledges, usufructs, agreements, commitments, requirements, liens,
doubts, debts, charges and/or encumbrances of whatever nature, other than
Permitted Encumbrances, which Pledged Assets may be pledged in favor of the
JOINT LENDERS, sold or disposed of, judicially and/or extrajudicially. The
COMPANY further agrees, during the term of the Loan Agreement, to keep the
Pledged Assets in a condition comparable to that as of the date hereof, ordinary
wear and tear and other damage reasonably incurred during the normal course of
business excepted.
CLAUSE 3. - Pursuant to articles 274 and 199 of the Brazilian Commercial
Code, the COMPANY hereby transfers the possession of the Pledged Assets to the
JOINT LENDERS by means of the constituti clause. The JOINT LENDERS hereby
expressly allow the COMPANY to keep direct possession of the Pledged Assets and
to use the Pledged Assets in the COMPANY's ordinary course of business without
limiting the JOINT LENDERS' rights therein, provided, however, that the COMPANY
hereby accepts the duties attributed to it in the capacity of depositary of the
Pledged Assets, assuming to this effect all obligations imposed by law pursuant
to article 280 et seq. of the Brazilian Commercial Code. Notwithstanding the
foregoing, such use of the Pledged Assets shall be in accordance with the Loan
Agreement.
CLAUSE 4. - During the term of this Pledge Agreement, all of the assets
hereafter acquired by the COMPANY, which value per unit exceeds US$50,000 (fifty
thousand United States dollars), shall also become a part of the pledge
hereunder by means of an amendment to this Pledge Agreement substantially in the
form of Annex III hereto, which shall be executed every three months from the
date hereof. The COMPANY hereby undertakes to execute all further documents and
to proceed with all the registrations required to perfect the pledge of such
assets in favor of the JOINT LENDERS.
PARAGRAPH 1. - If any additional Subsidiary is formed or acquired
after the date hereof, the COMPANY will, within 15 (fifteen) calendar days after
such Subsidiary is acquired or formed, cause such Subsidiary to pledge
-4-
228
any of its assets which value per unit exceeds US$50,000 (fifty thousand United
States dollars) by means of a pledge agreement in form and substance
satisfactory to the JOINT LENDERS.
CLAUSE 5. - This pledge shall remain in effect as of the date hereof and
until the actual and full compliance with all of the JOINT DEBTORS' respective
Obligations existing under the Loan Agreement, the Notes and the other Loan
Documents.
PARAGRAPH 1. - When the Loan Agreement has expired or is otherwise
earlier terminated and all Obligations then existing under the Loan Agreement,
the Notes and the other Loan Documents have been irrevocably paid, or, if
applicable, otherwise satisfied, all right, title and interest of the JOINT
LENDERS in the Pledged Assets shall revert to the COMPANY. At such time, the
JOINT LENDERS shall, at the COMPANY's expense, execute and deliver such
documents, and take such actions, as shall be reasonably requested to evidence
the termination of this Pledge Agreement and the release of the Pledged Assets.
PARAGRAPH 2. - To the extent permitted by applicable law, this Pledge
Agreement shall continue to be effective, or be reinstated, as the case may be,
if at any time payment, or any part thereof, of any of the Obligations is
rescinded or must otherwise be restored or returned by the JOINT LENDERS upon
the insolvency, bankruptcy, dissolution, liquidation or reorganization of any of
the JOINT DEBTORS, or upon or as a result of the appointment of a receiver,
intervenor or conservator of, or trustee or similar officer for, any of the
JOINT DEBTORS or any substantial part of their property, or otherwise, all as
though such payments had not been made.
CLAUSE 6. - The JOINT LENDERS shall not exercise any right or remedy
available hereunder except through the Collateral Agent as provided under the
Loan Agreement and the Collateral Agency and Intercreditor Agreement. Each JOINT
LENDER irrevocably designates and appoints Banco Citibank S.A., in its capacity
as Collateral Agent under the Loan Agreement and the Collateral Agency and
Intercreditor Agreement, as its attorney-in-fact to take such action on its
behalf under the provisions of this Pledge Agreement and to exercise such powers
and rights as are expressly granted to such JOINT LENDER hereunder, including,
without limitation, express powers to receive any amounts due hereunder, to
grant
-5-
229
receipts, quittances and releases, to settle, to waive rights, to amend this
Pledge Agreement, to engage legal counsel, to file any legal proceeding, and to
receive service of process hereunder. The Collateral Agent will distribute all
amounts received by it pursuant hereto on behalf of the JOINT LENDERS ratably to
the JOINT LENDERS in the manner provided in the Collateral Agency and
Intercreditor Agreement for the distribution of payments made by the JOINT
DEBTORS. Upon resignation of Banco Citibank S.A. as Collateral Agent, any
successor collateral agent appointed pursuant to the Loan Agreement shall
succeed to the rights, powers and duties of the JOINT LENDERS' attorney-in-fact
hereunder and this Pledge Agreement will be amended to designate such successor
collateral agent as the JOINT LENDERS' attorney-in-fact hereunder.
CLAUSE 7. - If any Event of Default occurs and is continuing, at the JOINT
LENDERS' sole discretion, the JOINT LENDERS may enforce this Pledge Agreement as
provided in the paragraphs below:
PARAGRAPH 1. - If the JOINT LENDERS decide to execute this Pledge
Agreement, the Collateral Agent shall notify the COMPANY in accordance with the
Collateral Agency and Intercreditor Agreement of the Event of Default through a
Registry of Deeds and Documents of the City of Sao Paulo. If such Event of
Default is not cured within the time period, if any, provided for in the Loan
Agreement, the Collateral Agent or the JOINT LENDERS shall be entitled to
enforce this pledge, judicially or extrajudicially. If the JOINT LENDERS opt for
extrajudicial enforcement, they may trigger the enforcement of the pledge and
foreclosure on the Pledged Assets by means of a simple letter to Banco Citibank
S.A., in its capacity as Collateral Agent under the Common Agreement and the
Collateral Agency and Intercreditor Agreement, identified in Paragraph 3 below
as attorney-in-fact (the "Attorney-in-Fact") of the COMPANY, enclosing a copy of
the Registry notice. In such event, the Attorney-in-Fact undertakes to use the
power of attorney granted by the COMPANY in this Pledge Agreement to promote the
public or private sale of the Pledged Assets, at the JOINT LENDERS' sole
discretion, and to apply any proceeds from the sale of the Pledged Assets
towards the outstanding amount owed by the JOINT DEBTORS under the Loan
Agreement, the Notes or the other Loan Documents, with any surplus proceeds to
be returned to the COMPANY, in accordance with the Collateral Agency and
Intercreditor Agreement.
PARAGRAPH 2. - The parties agree that the sale price for the Pledged
Assets shall not be less than the value assessed to the Pledged Assets (on
-6-
230
the basis of book value less depreciation) in the most recent audited balance
sheet of the COMPANY at the time of sale, which shall be considered the fair
market value of the Pledged Assets. If no value has been assessed in such
balance sheet, the parties shall sell the Pledged Assets in a commercially
reasonable manner.
PARAGRAPH 3 - For the purposes of enforcement of this pledge upon the
occurrence of an Event of Default, the COMPANY hereby appoints Banco Citibank
S.A., in its capacity as Collateral Agent under the Common Agreement and the
Collateral Agency and Intercreditor Agreement, as its Attorney-in-Fact, hereby
granting express, special and irrevocable powers to sell all or part of the
Pledged Assets, in the manner and under the conditions determined by the JOINT
LENDERS, without further notice to the COMPANY, to deliver the proceeds of the
sale to the JOINT LENDERS through certain collateral accounts as described in
the Collateral Agency and Intercreditor Agreement for total or partial repayment
of any amount due and payable to the JOINT LENDERS under the Loan Agreement, the
Notes or the other Loan Documents, and to deduct all expenses incurred in the
sale and return the excess, if any, to the COMPANY, whether in assets or cash.
For such purposes, the Attorney-in-Fact is expressly authorized by the COMPANY
to take all action required for the sale of the Pledged Assets, including, but
not limited to, the authority to sign agreements and give and receive releases
and to delegate all or part of the powers granted hereunder as said
Attorney-in-Fact may deem appropriate.
PARAGRAPH 4. - To the extent permitted by applicable law, the COMPANY
waives all claims, damages and demands it may have against the JOINT LENDERS
arising out of repossession, removal, retention or sale of the Pledged Assets by
the JOINT LENDERS in accordance with this Pledge Agreement and the other Loan
Documents following the occurrence of an Event of Default.
CLAUSE 8. - The power of attorney granted in the preceding clause, under
the terms of Article 1317, item II of the Brazilian Civil Code, is irrevocable
and irreversible during the entire term of this Pledge Agreement and as long as
all of the Obligations assumed by the JOINT DEBTORS under the Loan Agreement,
the Notes and the other Loan Documents have not been fully performed.
CLAUSE 9. - The institution by the JOINT LENDERS of any action or
proceeding to enforce the pledge hereunder shall not affect or diminish the
rights of the JOINT LENDERS to institute any action or proceeding against the
JOINT
-7-
231
DEBTORS or any other guarantor of any amounts due by the JOINT DEBTORS under the
Loan Agreement, the Notes and the other Loan Documents.
CLAUSE 10. - No course of dealing between the JOINT DEBTORS and the JOINT
LENDERS, nor any failure to exercise, nor any delay in exercising, on the part
of the JOINT LENDERS, any right power or privilege hereunder or under the Loan
Agreement, the Notes or the other Loan Documents shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or thereunder preclude any other or further exercise thereof
or the exercise of any other right, power or privilege.
CLAUSE 11. - It is understood that, as long as the amounts due under the
Loan Agreement, the Notes and the other Loan Documents are not fully repaid, the
COMPANY shall not sell, lease, transfer, pledge, encumber or otherwise dispose
of the Pledged Assets, except in accordance with the terms of the Loan
Agreement.
CLAUSE 12. - The COMPANY shall register this Pledge Agreement within 20
(twenty) days from the date hereof and shall register any amendment hereto above
within 20 (twenty) days of the execution thereof at the appropriate Registry of
Deeds and Documents at the exclusive expense of the COMPANY.
CLAUSE 13. - The COMPANY shall advise the JOINT LENDERS promptly, in
sufficient detail, of any substantial change in the Pledged Assets, and of the
occurrence of any event which would have a material effect on the Pledged Assets
or the JOINT LENDERS' security interest therein.
CLAUSE 14. - The COMPANY shall comply with all acts, rules, regulations and
orders of any legislative, administrative or judicial body applicable to the
Pledged Assets or any part thereof or to the operation of the COMPANY's
business, except those acts, rules, regulations and orders that are being
contested in good faith by appropriate proceedings and as to which noncompliance
could not reasonably be expected to have a Material Adverse Effect.
-8-
232
CLAUSE 15. - The COMPANY shall perform and observe all covenants,
restrictions and conditions contained in the Loan Agreement providing for
payment of taxes, maintenance of insurance and otherwise relating to the Pledged
Assets, as though such covenants, restrictions and conditions were fully set
forth in this Pledge Agreement.
CLAUSE 16. - The COMPANY shall promptly execute and deliver to the JOINT
LENDERS such further deeds, mortgages, assignments, security agreements or other
instruments, documents, certificates and assurances and take such further action
as the JOINT LENDERS may from time to time reasonably require or as may be
necessary under applicable governmental laws, to perfect, protect or enforce its
security interest in the Pledged Assets or otherwise to effectuate the intent of
this Pledge Agreement.
CLAUSE 17. - This Pledge Agreement is binding not only the parties hereto
but also on their assigns and/or successors.
CLAUSE 18. - Each of the JOINT DEBTORS may not assign or transfer all or
part of the rights or obligations hereunder and the JOINT LENDERS may assign or
transfer all or part of its rights and obligations only to the assignees of
their rights and obligations under the Credit Agreement, any assignee of the
JOINT LENDERS is entitled to all benefits hereunder. Each Person that becomes a
Lender under the Loan Agreement and the Collateral Agency and Intercreditor
Agreement shall be entitled to become a party hereto upon becoming such a Lender
and delivering to the JOINT DEBTORS a written notice under which it agrees to
assume and accept the rights, benefits, duties and obligations of the JOINT
LENDERS hereunder. Immediately after receipt of such notice, the JOINT DEBTORS
hereby consent to execute all further documents and to take all necessary
action, including an amendment to Annex I hereto and the registration thereof in
the Registry of Documents and Deeds, in order to grant to any successor or
assignee a perfected security interest in the Pledged Assets.
CLAUSE 19. - Each of the JOINT LENDERS and the JOINT DEBTORS acknowledge
that the JOINT LENDERS shall be considered joint creditors (credores solidarios)
pursuant to articles 896 through 903 of the Brazilian
-9-
233
Civil Code with respect to the Obligations under the Loan Documents and the
obligations owed to the other secured lenders. Upon the execution of any loan
documents evidencing other secured debt and upon the other secured lender
becoming a party to the Collateral Agency and Intercreditor Agreement, Annex I
of this Pledge Agreement shall be amended to include the other secured lender as
a JOINT LENDER hereunder.
CLAUSE 20. - Each of the JOINT LENDERS, the COMPANY, VESPER CAYMAN, and
HOLDING acknowledge that the COMPANY, VESPER CAYMAN, and HOLDING are joint
debtors (devedores solidarios) pursuant to articles 904 through 915 of the
Brazilian Civil Code with respect to their respective Obligations under the Loan
Agreement, the Notes and the other Loan Documents.
CLAUSE 21. - This Pledge Agreement is written in both the Portuguese and
English languages. The Portuguese language shall prevail for any doubts arising
out of this Pledge Agreement which shall be governed by the laws of the
Federative Republic of Brazil, and is vested of enforceability under article
585, item III of the Brazilian Code of Civil Procedure.
CLAUSE 22. - The parties elect the courts of the City of Sao Paulo, State
of Sao Paulo, Brazil as the competent courts to settle any issues arising out of
this Pledge Agreement.
CLAUSE 23. - For purposes of Articles 999, 1000 and 1003 of the Brazilian
Civil Code, the assignment of any Loans and/or Commitments under the Loan
Agreement do not constitute a new obligation of the JOINT DEBTORS, and any
assignee who becomes a JOINT LENDER hereunder shall be entitled to and have the
same rights as the initial Lenders to any and all Collateral.
IN WITNESS WHEREOF, the parties hereto have caused this Pledge Agreement to be
executed as of the date first above written by their respective duly authorized
officers or representatives.
-10-
234
VESPER SAO PAULO S.A.
By:
-----------------------------
VESPER SAO PAULO CAYMAN, as Intervening Party
By:
-----------------------------
VESPER HOLDING SAO PAULO S.A., as Intervening Party
By:
-----------------------------
VESPER SAO PAULO S.A., as Depositary
By:
-----------------------------
LUCENT TECHNOLOGIES INC.
By:
-----------------------------
Agreed to and Accepted:
BANCO CITIBANK S.A., Attorney-in Fact for the COMPANY
--------------------------------
Agreed to and Accepted:
-11-
235
BANCO CITIBANK S.A., Attorney-in-Fact for the JOINT LENDERS
--------------------------------
Witnesses:
--------------------------------- -----------------------------
Name: Name:
R.G.: R.G.:
-12-
236
ANNEX I
JOINT LENDERS
Lucent Technologies Inc.
Xxxxxx Corporation
-13-
237
ANNEX II
PLEDGED ASSETS
-14-
238
EXHIBIT F
INTENTIONALLY OMITTED
239
EXHIBIT G
================================================================================
SPONSOR SUPPORT AGREEMENT
Among
QUALCOMM DO BRASIL LTDA.
XXXX CANADA INTERNATIONAL (MEGATEL) LIMITED
VELOCOM CAYMAN BRASIL HOLDINGS
as Shareholders
and
The Shareholder Guarantors Party hereto
and
VESPER SAO PAULO X.X.
XXXXXX HOLDING SAO PAULO S.A.
and
CITIBANK, N.A. and BANCO CITIBANK S.A.
as Collateral and Intercreditor Agent
Dated as of
December 27, 1999
================================================================================
[Reference No. 7725-052]
240
TABLE OF CONTENTS
Page
----
ARTICLE I Definitions 1
SECTION 1.01. Terms as Defined in Common Agreement 1
SECTION 1.02. Other Defined Terms 2
SECTION 1.03. Terms Generally 4
SECTION 1.04. Accounting Terms; GAAP 5
SECTION 1.05. U.S. Dollar Calculations 5
ARTICLE II [Intentionally Omitted 5
ARTICLE III Contributions 6
SECTION 3.01. Contributions 6
SECTION 3.02. Shareholders Commitments 6
SECTION 3.03. Notification of Contributions 7
SECTION 3.04. Limitations on Shareholder Commitments 7
ARTICLE IV Events of Default 8
SECTION 4.01. Events of Default 8
SECTION 4.02. Certain Events of Default Prior to Second Anniversary of Closing 8
SECTION 4.03. Payments 8
SECTION 4.04. Amounts Received by Collateral Agent 9
ARTICLE V Guarantee 9
SECTION 5.01. Guarantee 9
SECTION 5.02. Guaranteed Obligations Not Waived 10
SECTION 5.03. Guarantee of Payment, Performance and Compliance 10
SECTION 5.04. No Discharge or Diminishment of Guarantee 10
SECTION 5.05. Defenses Waived 10
SECTION 5.06. Agreement to Pay; Subordination 11
ARTICLE VI Payments 11
SECTION 6.01. Set-Off and Counterclaim 11
SECTION 6.02. Currency 11
SECTION 6.03. Indemnity for Expenses of Enforcement 12
SECTION 6.04. Determinations 12
ARTICLE VII Representations and Warranties 12
SECTION 7.01. Organization; Powers 12
SECTION 7.02. Authorization; Enforceability 12
SECTION 7.03. Governmental Approvals; No Conflicts 13
SECTION 7.04. No Sovereign Immunity Defense 13
SECTION 7.05. Investment and Holding Company Status 13
SECTION 7.06. Financial Condition; No Material Adverse Change 13
SECTION 7.07. Initial Equity Contribution 14
SECTION 7.08. Restricted Payment; Other Repayments 14
SECTION 7.09. Ownership of the Shareholders 14
SECTION 7.10. VeloCom Warranty 14
ARTICLE VIII Undertakings 15
SECTION 8.01. Subscriptions and Other Actions 15
SECTION 8.02. Shareholders Agreement 15
SECTION 8.03. Financial Information 15
SECTION 8.04. Other Information 16
SECTION 8.05. Further Assurance 16
i
241
Contents, p. 2
Page
----
ARTICLE IX Transfers 16
SECTION 9.01. Effect of Transfers in the Project or Holdings 16
SECTION 9.02. Effect of Transfers in any Shareholder 17
ARTICLE X Shareholder and Shareholders Guarantor Acknowledgments 17
ARTICLE XI Miscellaneous 17
SECTION 11.01. Notices 17
SECTION 11.02. Waivers; Amendments 19
SECTION 11.03. Successors and Assigns 19
SECTION 11.04. Counterparts; Integration; Effectiveness 20
SECTION 11.05. Severability 20
SECTION 11.06. Conflict with Shareholders Agreement 20
SECTION 11.07. Valid Obligations 20
SECTION 11.08. Governing Law; Jurisdiction; Consent to Service of Process 21
SECTION 11.09. WAIVERS 22
SECTION 11.10. Headings 22
SECTION 11.11. Enforcement 23
SECTION 11.12. Termination 23
SCHEDULES
Schedule 1 Shareholder Guarantors and Shareholder Details
ii
242
SPONSOR SUPPORT AGREEMENT dated as of
December 27, 1999, among QUALCOMM DO BRASIL LTDA., a
Brazilian sociedade limitada ("Qualcomm Sub"), XXXX
CANADA INTERNATIONAL (MEGATEL) LIMITED, a company
organized under the laws of the British Virgin
Islands ("BCI Sub"), VELOCOM CAYMAN BRASIL HOLDINGS,
a company organized under the laws of the Cayman
Islands ("VeloCom Sub", together with Qualcomm Sub
and BCI Sub, the "Shareholders"), the Shareholder
Guarantors party hereto, VESPER SAO PAULO S.A., a
Brazilian sociedade por acoes ("Vesper"), VESPER
HOLDING SAO PAULO S.A., a Brazilian sociedade por
acoes ("Holdings"), BANCO CITIBANK S.A., a Brazilian
sociedade por acoes, as Collateral and Intercreditor
Agent and CITIBANK, N.A., a national banking
association duly organized and validly existing under
the laws of the United States of America, as
Collateral and Intercreditor Agent (together with
Banco Citibank S.A., the "Collateral Agent").
The Shareholders together own all of the Equity Interests in
Holdings and Holdings owns all of the Equity Interests in Vesper, other than a
holding of not more than 0.1% of qualifying shares in Vesper by Qualcomm Sub in
compliance with applicable law. Vesper, Holdings and the Borrower have entered
into the Initial Participating Credit Agreement with the Lenders and the
Administrative Agent and the Common Agreement with the Agents to provide for
certain terms and conditions under which Vesper will obtain financing from the
Lenders for the Project. The Collateral Agent has been appointed pursuant to the
Collateral Agency Agreement to act as collateral and intercreditor agent for the
Lenders in connection with the Loan Documents. In order to induce the Lenders
and Administrative Agent to enter into the Initial Participating Credit
Agreement and the Agents to enter into the Common Agreement, the Shareholders
have agreed to give certain undertakings (and the Shareholder Guarantors have
agreed to guarantee such undertakings) directly to the Collateral Agent acting
on behalf of the Lenders, all as provided in this Agreement. The execution of
this Agreement is a condition precedent to the obligations of the Lenders to
make Loans under the Initial Participating Credit Agreement. Accordingly, the
parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Terms as Defined in Common Agreement. Unless
otherwise defined herein, terms defined in the Common Agreement and used herein
shall have the meanings given to them in the Common Agreement.
1
243
SECTION 1.02. Other Defined Terms. As used in this Agreement,
the following terms shall have the meanings specified below:
"Acceleration Event" has the meaning assigned to such term in
Section 4.01.
"Advisory Committee" means the advisory committee of Holdings
appointed pursuant to the Shareholders Agreement.
"BCI" means Xxxx Canada International Inc., a Canadian
corporation.
"Borrower Obligations" mean, collectively, the obligations
contained in clause (a) of each of the definition of "Borrower Initial
Obligations" and the definition of "Borrower Additional Obligations", in each
case set forth in the Collateral Agency Agreement.
"Commitment Fee Funding Amount" means, in respect of any
Shareholder at any time, the aggregate amount of all sums paid by such
Shareholder or its Shareholder Guarantor by way of loans to the Borrower that
constitute Primary Subordinated Obligations, the proceeds of which are applied
by the Borrower exclusively to make commitment fee payments pursuant to any
Participating Credit Agreement.
"Common Agreement" means the Common Agreement dated as of the
date hereof among Holdings, Vesper, the Borrower, the Administrative Agents
named therein and the Collateral Agent.
"Equity Commitment" means, in respect of any Shareholder, such
Shareholder's Proportion of the Total Equity Commitment less such Shareholder's
Initial Equity Contribution.
"financial officer" means, in respect of any party, the chief
financial officer, principal accounting officer, treasurer or controller of that
party.
"Guaranteed Obligations" means, in respect of any Related
Shareholder, collectively, (a) payment in full when due of any and all amounts
payable by such Related Shareholder under this Agreement and (b) the due and
punctual performance by such Related Shareholder of each of its obligations and
liabilities under this Agreement.
"Initial Equity Contribution" means, in respect of any
Shareholder, the amount in dollars set forth opposite such Shareholder's name
under the caption "Initial Equity Contribution" in Schedule 1.
"Modified Equity Commitment" means, in respect of any
Shareholder and in connection with a Proportion Change, an amount, in dollars,
equal to such Shareholder's Proportion (after giving effect to the irrevocable
modification thereof resulting from such Proportion
2
244
Change) of the aggregate amount of the Outstanding Equity Commitments of all the
Shareholders at the time of the occurrence of such Proportion Change.
"Outstanding Equity Commitment" means, in respect of any
Shareholder at any time, (i) prior to the occurrence of a Proportion Change, the
excess, if any, of (w) such Shareholder's Equity Commitment over (x) the sum of
all payments made or deemed to be made prior to such time (but on or after the
date of this Agreement) by such Shareholder pursuant to, and in accordance with,
Section 3 or 4 and such Shareholder's Commitment Fee Funding Amount and (ii) on
or after the occurrence of a Proportion Change, the excess, if any, of (y) such
Shareholder's Modified Equity Commitment over (z) the sum of all payments made
or deemed to be made prior to such time (but after the occurrence of such
Proportion Change) by such Shareholder pursuant to, and in accordance with,
Section 3 or 4 and such Shareholder's Commitment Fee Funding Amount; provided,
however, that any amount paid or deemed to be paid by such Shareholder (A) as
described in the proviso to clause (vi) of Section 6.04 (a) or Section 7.01 (p)
of the Common Agreement, (B) to provide funds for any of the matters described
in clauses (ii), (iii) or (iv) of the definition of "Project" set out in the
Common Agreement, (C) as a Curing Shareholder in respect of the obligations of
any Defaulting Shareholder pursuant to, and in accordance with, the provisions
of Section 3.02 (b), (D) as described in clause 2.3.3 (e) of the Shareholders
Agreement, (E) in violation of the terms of any Loan Document, including Section
6.01 of the Common Agreement or (F) that results in or constitutes a Default,
including an event described in Section 7.01(o) of the Common Agreement, shall
not be included in calculating the amount of clause (x) or (z), as applicable.
"Permitted Change of Control" means a Change of Control (other
than with respect to clause (a) or (b) of the definition of Change of Control in
the Common Agreement) that occurs when no Default has occurred and is continuing
on any date that occurs on or after the later of (i) the fifth anniversary of
the Effective Date and (ii) the date on which all remaining Commitments have
been utilized or terminated and the aggregate principal amount of the
outstanding Loans is less than 25% of the aggregate amount of Loans that were
outstanding as of the date on which all remaining Commitments were utilized or
terminated.
"Permitted Shareholder Loan" means a loan in a form that
constitutes a Primary Subordinated Obligation.
"Proportion" means, in respect of any Shareholder, the
percentage set forth opposite such Shareholder's name under the caption
"Proportion" in Schedule 1, as such percentage may be irrevocably modified
pursuant to Section 2.3.4 of the Shareholders Agreement.
3
245
"Proportion Change" means a change in the Proportion of any
Shareholder resulting from the operation of Section 2.3.4 of the Shareholders
Agreement.
"PTAX 800 Rate" means, for any date, the average of the
exchange rates for all sales transactions and all purchase transactions for
dollars under the PTAX 800 Opco 5 on such date, as published in the Sisbacen
Data System of the Central Bank, or, should the same cease to be published, such
generally recognized replacement thereof, subject to the approval of the
Collateral Agent, such approval not to be unreasonably withheld.
"Qualcomm" means Xxxxxxxx Xxxxxxxxxxxx, a Delaware
corporation.
"Related Shareholder" means, in respect of any Shareholder
Guarantor, the Shareholder whose name appears opposite such Shareholder
Guarantor's name in Schedule 1.
"Shareholder Guarantors" means the Persons listed under the
caption "Shareholder Guarantor" in Schedule 1.
"Shareholders Agreement" means the Amended and Restated
Shareholders Agreement, dated December 23, 1999, by and among the Shareholders
and Holdings.
"Total Equity Commitment" means an amount equal to
$385,000,000.
"Trigger Event" means (i) any of those Events of Default
described in clauses (a), (b)(i), (g) (solely after the expiration of any
relevant grace period and the giving of any relevant notice under the relevant
Material Indebtedness), (h), (i), (j), (l), (m), (n), (o), (p), (q), (s), and
(t) of Section 7.01 of the Common Agreement, or (ii) an Event of Default under
clause (v) of Section 7.01 of the Common Agreement attributable to the failure
to obtain the letter of non-opposition referred to in clause (ii) of Section
4.01(aa), or the failure of the Vesper Guarantee to have been duly executed and
delivered and to be in full force and effect, in either case by January 31,
2000, or (iii) the occurrence in each of three consecutive fiscal quarters of an
Event of Default relating to any covenant contained in Section 6.16, 6.17, 6.18,
6.19, 6.20, 6.21 or 6.22 of the Common Agreement (whether or not the Event of
Default relates to a different or the same covenant in each such quarter and
without giving effect to any action taken by any Person pursuant to Section 7.02
of the Common Agreement).
"VeloCom" means VeloCom Inc., a Delaware corporation.
SECTION 1.03. Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the
4
246
terms defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase "without
limitation". The word "will" shall be construed to have the same meaning and
effect as the word "shall". Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or other document herein
shall be construed as referring to such agreement, instrument or other document
as from time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein
or in any Loan Document), (b) any reference herein to any Person shall be
construed to include such Person's successors and assigns, (c) the words
"herein", "hereof" and "hereunder", and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (d) all references herein to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, this Agreement and (e) the words "asset" and "property" shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts, contract rights, licenses and intellectual property.
SECTION 1.04. Accounting Terms; GAAP. The provisions of
Section 1.04 of the Common Agreement shall apply to this Agreement.
SECTION 1.05. U.S. Dollar Calculations. Any amount paid or
caused to be paid by any Shareholder to Holdings for contribution to, or
directly to, Vesper pursuant to Section 3.01, 4.01 or 4.02 in Reais shall, for
the purposes of making calculations in dollars under this Agreement, be treated
as having been paid in dollars in an amount equal to such Real-denominated
amount divided by the PTAX 800 Rate for the date that such amount is paid.
ARTICLE II
[Intentionally Omitted]
5
247
ARTICLE III
Contributions
SECTION 3.01. Contributions. Subject to Section 3.02, each
Shareholder agrees that it will, from time to time, make payments or cause
payments to be made to Vesper, whether (i) directly or (ii) through Holdings in
which case Holdings agrees, each Shareholder agrees to cause Holdings, to make
payment of an equivalent amount to Vesper, in each case by way of subscription
for Equity Interests or by advancing Permitted Shareholder Loans, in cash:
(a) as required or permitted under the terms of the
Shareholders Agreement, in such amount so as to satisfy such
Shareholder's obligations in accordance with those requirements;
(b) at any time in an amount equal to its Proportion of such
amount as may be necessary to ensure at such time that Vesper does not
breach its covenant set out in Section 6.16 or 6.17 of the Common
Agreement;
(c) on the first Business Day of each calendar month for which
Vesper has determined in its reasonable judgment that it shall fail to
meet its estimated cash needs for such calendar month, taking into
account all relevant considerations, including the Budget, Loans
available under the Participating Credit Agreements and any other
permitted sources of financing for Vesper, in an amount equal to its
Proportion of such shortfall as calculated by Vesper, such amount to be
set forth in a certificate signed by a Financial Officer together with
such supporting details (including as to the calculation and underlying
assumptions) as the Collateral Agent may reasonably require, such
certificate to be delivered to the Collateral Agent no less than ten
Business Days prior to the first day of such calendar month; and
(d) in such amount as is otherwise required by the terms of
Section 4.02.
SECTION 3.02. Shareholders Commitments. (a) Except as provided
in clause (c), (d) or (e) of the second sentence of Section 4.03, neither a
Shareholder Guarantor nor its Related Shareholder shall be required at any time
to make or cause to be made any payment pursuant to Section 3.01, 4.01, 4.02 or
4.03 to the extent that such payment shall be in an amount in excess of such
Related Shareholder's Outstanding Equity Commitment at such time.
(b) In the event that any Shareholder (a "Defaulting
Shareholder") fails to pay (or cause to be paid) any amount required to be paid
by such Shareholder under the terms of Section 3.01, 4.01, 4.02 or 4.03 and any
other Shareholder (a "Curing Shareholder") pays (or
6
248
causes to be paid) such amount, including, but not limited to, in connection
with the provisions of Section 7.03 of the Common Agreement, then the payment of
such amount by the Curing Shareholder shall, for purposes of calculating such
Defaulting Shareholder's and such Curing Shareholder's Outstanding Equity
Commitment, (y) be deemed to have been paid by such Defaulting Shareholder only
and not by such Curing Shareholder, and (z) to the extent of such payment by
such Curing Shareholder, reduce such Defaulting Shareholder's (and not such
Curing Shareholder's) Outstanding Equity Commitment.
SECTION 3.03. Notification of Contributions. (a) Within seven
Business Days after the end of each of Vesper's fiscal quarters in which any
payment is made pursuant to Section 3.01(a), and promptly after any payment is
made pursuant to Section 3.01(b), (c) or (d), Holdings shall notify the
Collateral Agent of the same, specifying the identity of the payer and payee,
the amount paid, the Equity Interest subscribed for or Permitted Shareholder
Loan made, the date of payment, the particular provision of this Agreement (or
other requirement) pursuant to which the payment was made, and such other
details as the Collateral Agent may reasonably require.
(b) Promptly after any Proportion Change of any Shareholder
takes effect, Holdings shall notify the Collateral Agent of the same, specifying
the identity of the affected Shareholders, describing the circumstances by which
the Proportion Change took effect, and setting out a calculation of the
Proportion and the Modified Equity Commitment applicable to each affected
Shareholder immediately following the Proportion Change.
(c) Each Shareholder, Holdings and Vesper shall from time to
time on request provide the Collateral Agent with such evidence as the
Collateral Agent may reasonably require to verify the ownership of Equity
Interests in and Permitted Shareholder Loans made to Holdings and/or Vesper.
SECTION 3.04. Limitations on Shareholder Commitments.
Notwithstanding anything herein to the contrary, (i) the obligations of each
Shareholder Guarantor and its Related Shareholder hereunder are several in their
respective proportions from, and not joint with, any other Shareholder Guarantor
or its Related Shareholder and (ii) in no event shall any Shareholder Guarantor
or its Related Shareholder be liable for the default of another Shareholder in
the performance of its obligations hereunder.
7
249
ARTICLE IV
Events of Default
SECTION 4.01. Events of Default. Subject to Section 3.02 and
except as provided in Section 4.02, if (a) any Event of Default described in
clause (h) or (i) of Section 7.01 of the Common Agreement shall have occurred,
or (b) any Event of Default described in any of clauses (a) to (g) and (j) to
(v) of Section 7.01 of the Common Agreement shall have occurred and the
Collateral Agent shall have declared the Loans then outstanding to be due and
payable in whole pursuant to Section 7.01, (in either case, an "Acceleration
Event"), the Collateral Agent may on one or more occasions by notice to the
Shareholders require each Shareholder to pay or cause to be paid within five
Business Days in accordance with the provisions of Section 4.03 an amount, in
dollars, equal to the lesser of (x) its Outstanding Equity Commitment at such
time and (y) an amount equal to its Proportion of the then outstanding Borrower
Obligations.
SECTION 4.02. Certain Events of Default Prior to Second
Anniversary of Closing. If any Event of Default that gives rise to any
Acceleration Event that is not a Trigger Event shall have occurred prior to the
date that is the second anniversary of the Effective Date, the provisions of
Section 4.01 shall not apply with respect to such Acceleration Event, but the
Collateral Agent may by notice to the Shareholders require each Shareholder to
pay or cause to be paid within five Business Days to Vesper in accordance with
the provisions set forth in Section 3.01 an amount equal to such Shareholder's
Outstanding Equity Commitment at such time; provided, however, that, if any
Shareholder is prohibited by applicable law or otherwise from making or causing
such payment to be made to Vesper (including by reason of the occurrence of any
event described in clause (h) or (i) of Section 7.01 of the Common Agreement)
such Shareholder shall pay or cause to be paid such amount, in dollars, to the
Collateral Agent.
SECTION 4.03. Payments. Any amount required to be paid or
caused to be paid by any Shareholder pursuant to Section 4.01 shall be paid into
a cash collateral account in Brazil in the name of Holdings maintained with and
under the exclusive dominion and control, and in respect of which Holdings shall
grant and maintain the security and other rights as the Collateral Agent may, in
its absolute discretion, require from time to time (the "Brazilian Cash
Collateral Account"). Holdings agrees to, and each of the Shareholders agrees to
cause Holdings to, pay to the Collateral Agent, in dollars, any amount paid into
the Brazilian Cash Collateral Account by any Shareholder within 22 Business Days
of the receipt of such amount by Holdings in the Brazilian Cash Collateral
Account; provided, however, that if (a) any Event of Default described in
clauses (h) to (j) (inclusive) of Section 7.01 of the Common Agreement has
occurred or is continuing in relation to any Loan Party on the date that any
amount is due to be paid pursuant to Section 4.01, (b) Holdings has not
established or
8
250
maintained the Brazilian Cash Collateral Account or security interests in
accordance with the terms of this Section 4.03 and otherwise to the satisfaction
of the Collateral Agent, (c) any Shareholder or Holdings has not obtained any
Governmental Approvals required for the transactions contemplated by this
Section 4.03 and does not reasonably expect to obtain such approvals within 22
Business Days of the date of deposit by the Shareholder into the Brazilian Cash
Collateral Account, (d) any Shareholder elects not to make or cause, or is
otherwise prohibited by applicable law or otherwise from making or causing, such
amount to be paid to Holdings, or Holdings is otherwise prohibited by applicable
law or otherwise from paying such amount (free of any Taxes, withholdings or
other deductions whatsoever) to the Collateral Agent in dollars or (e) Holdings
does not pay such amount (free of any Taxes, withholdings or other deductions
whatsoever) to the Collateral Agent in dollars within 22 Business Days of the
receipt of such amount by Holdings in the Brazilian Cash Collateral Account,
each Shareholder shall pay or cause to be paid such amount on the date that such
amount is due to be paid (in the case of clause (a), (b), (c) or (d)) or shall
pay or cause to be paid an equivalent amount forthwith (notwithstanding that the
payment of such amount shall result in a duplication of payment by such
Shareholder) (in the case of clause (e)) in dollars to the Collateral Agent and
upon receipt by the Collateral Agent of all such payments required to be made by
all Shareholders to the Collateral Agent hereunder, the Reais amount (if any)
deposited by each Shareholder into the Brazilian Cash Collateral Account shall
be promptly released from the Brazilian Cash Collateral Account to Holdings.
SECTION 4.04. Amounts Received by Collateral Agent. Any amount
received by the Collateral Agent pursuant to the proviso to Section 4.02 or
pursuant to Section 4.03 shall be deposited by the Collateral Agent in the
Enforcement Collateral Account (as such term is defined in the Collateral Agency
Agreement) as provided in Section 5.01(b) of the Collateral Agency Agreement.
ARTICLE V
Guarantee
SECTION 5.01. Guarantee. Each Shareholder Guarantor, severally
as a primary obligor and not merely as a surety, unconditionally and irrevocably
guarantees as a continuing obligation the due and punctual payment and
performance of the Guaranteed Obligations of its Related Shareholder in
accordance with the terms of this Agreement. Each Shareholder Guarantor
undertakes, as a continuing obligation, to procure the fulfillment by its
Related Shareholder of its liabilities, covenants, undertakings and obligations
under this Agreement strictly in accordance with the terms hereof.
9
251
SECTION 5.02. Guaranteed Obligations Not Waived. To the
fullest extent permitted by applicable law, each Shareholder Guarantor waives
presentment to, demand of payment from and protest to its Related Shareholder
and also waives notice of acceptance of its guarantee and notice of protest for
nonpayment.
SECTION 5.03. Guarantee of Payment, Performance and
Compliance. Each Shareholder Guarantor further agrees that its guarantee
hereunder constitutes a guarantee of payment when due, performance and
compliance and not of collection or enforcement of performance or compliance,
and waives any right to require that any resort be had by the Collateral Agent
to any of the security held for payment of the Guaranteed Obligations or to any
balance of any deposit account or credit on the books of the Collateral Agent in
favor of any Loan Party, any Shareholder or any other Person.
SECTION 5.04. No Discharge or Diminishment of Guarantee. The
obligations of each Shareholder Guarantor hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason (other than full
and strict compliance by such Shareholder Guarantor with the Guaranteed
Obligations), including any claim of waiver, release, surrender, alteration or
compromise of any of the Guaranteed Obligations, and shall not be subject to any
defense or setoff, counterclaim, recoupment or termination whatsoever by reason
of the invalidity, illegality or unenforceability of the Guaranteed Obligations
or otherwise. Without limiting the generality of the foregoing, the obligations
of each Shareholder Guarantor hereunder shall not be discharged or impaired or
otherwise affected by the failure of the Collateral Agent to assert any claim or
demand or to enforce any remedy under this Agreement, any Loan Document, or any
other agreement, by any waiver or modification of any provision of any thereof,
by any default, failure or delay, wilful or otherwise, in the performance of the
Guaranteed Obligations, or by any other act or omission that may or might in any
manner or to any extent vary the risk of any Shareholder Guarantor or that would
otherwise operate as a discharge of any Shareholder Guarantor as a matter of law
or equity (other than the full and strict compliance by such Shareholder
Guarantor with the Guaranteed Obligations).
SECTION 5.05. Defenses Waived. To the fullest extent permitted
by applicable law, each Shareholder Guarantor waives any defense based on or
arising out of the defense of its Related Shareholder or any Loan Party or the
unenforceability of the Guaranteed Obligations or any part thereof from any
cause, or the cessation from any cause of the liability of its Related
Shareholder or any Loan Party, other than the full and strict compliance by the
Shareholder Guarantor of all the Guaranteed Obligations. The Collateral Agent
may, at its election, foreclose on any security held by it by one or more
judicial or nonjudicial sales, accept an assignment of any such security in lieu
of foreclosure, compromise or adjust any part of the Guaranteed Obligations,
make any other accommodation with any
10
252
Shareholder, Shareholder Guarantor, Loan Party or guarantor or exercise any
other right or remedy available to it against Loan Party or guarantor, without
affecting or impairing in any way the liability of any Shareholder Guarantor
hereunder except to the extent the Guaranteed Obligations have been fully,
finally and indefeasibly complied with. To the fullest extent permitted by
applicable law, each Shareholder Guarantor waives any defense arising out of any
such election even though such election operates, pursuant to applicable law, to
impair or to extinguish any right of reimbursement or subrogation or other right
or remedy of such Shareholder Guarantor against its Related Shareholder any Loan
Party or guarantor, as the case may be, or any security.
SECTION 5.06. Agreement to Pay; Subordination. In furtherance
of the foregoing and not in limitation of any other right that the Collateral
Agent has at law or in equity against any Shareholder Guarantor by virtue
hereof, upon the failure of its Related Shareholder to pay or perform any
Guaranteed Obligation when and as the same shall become due, each Shareholder
Guarantor hereby promises to and will forthwith (a) pay, or cause to be paid, to
the Collateral Agent (or as the Collateral Agent may otherwise direct) in cash
on demand the amount so not paid and/or (b) perform the Guaranteed Obligations,
as the case may be. Upon payment by any Shareholder Guarantor of any sums to the
Collateral Agent or otherwise as provided above, all rights of such Shareholder
Guarantor against its Related Shareholder arising as a result thereof by way of
right of subrogation, contribution, reimbursement, indemnity or otherwise shall
in all respects be subordinate and junior in right of payment to the prior
indefeasible payment in full in cash of all the Guaranteed Obligations.
ARTICLE VI
Payments
SECTION 6.01. Set-Off and Counterclaim. All and any payments
made by or on account of any obligation of any Shareholder or Shareholder
Guarantor hereunder shall be made without set-off or counterclaim in dollars in
immediately available funds to such account as the payee shall notify to the
payer.
SECTION 6.02. Currency. (a) If for the purpose of obtaining
judgment in any court it is necessary to convert a sum due hereunder to any
party hereunder in dollars into another currency, the parties hereto agree, to
the fullest extent permitted by applicable law, that the rate of exchange used
shall be that at which in accordance with normal banking procedures such party
could purchase dollars with such other currency in New York City on the day
which is at least two Business Days prior to the day on which final judgment is
rendered.
11
253
(b) To the fullest extent permitted by law, the obligation of
any party in respect of any sum payable hereunder by it to any other party
hereunder shall, notwithstanding any judgment in a currency (the "Judgment
Currency") other than dollars, be discharged only to the extent that on the
Business Day following receipt by such other party of any sum adjudged to be so
due in the Judgment Currency such other party may in accordance with normal
banking procedures purchase dollars with the Judgment Currency; if the amount of
dollars which could have been so purchased is less than the sum originally due
to such other party in dollars, such first party agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify such other party
against such loss, and, if the amount of dollars which could have been so
purchased exceeds the sum originally due to such other party, such other party
agrees to remit to such first party such excess.
SECTION 6.03. Indemnity for Expenses of Enforcement. Each
Shareholder and Shareholder Guarantor agrees to pay or to reimburse the
Collateral Agent on demand for all out-of-pocket costs and expenses (including
reasonable fees and disbursements of counsel) incurred in enforcing that
Shareholder's or Shareholder Guarantor's respective obligations hereunder.
SECTION 6.04. Determinations. Any determination by the
Collateral Agent of an amount under this Agreement shall be, in the absence of
manifest error, prima facie evidence of the matters to which it relates.
ARTICLE VII
Representations and Warranties
Each of the Shareholders and Shareholder Guarantors represents
and warrants with respect to itself with respect to Sections 7.01 to 7.05
(inclusive) and Section 7.07, each of the Shareholder Guarantors additionally
represents and warrants with respect to itself with respect to Section 7.06 and
Section 7.09, VeloCom additionally represents and warrants with respect to
Section 7.10 and each of Holdings and Vesper represents and warrants with
respect to Section 7.08 that:
SECTION 7.01. Organization; Powers. It is duly organized,
validly existing and, where applicable, in good standing under the laws of the
jurisdiction of its organization, and has all requisite power and authority to
carry on its business as now conducted.
SECTION 7.02. Authorization; Enforceability. It has the power
and authority and legal right to execute and deliver, and to perform its
obligations under this Agreement and the Substitute Financing Side Letter and
this Agreement and the Substitute Financing Side Letter have been duly
authorized by all necessary corporate and,
12
254
if required, stockholder action. Each of this Agreement and the Substitute
Financing Side Letter has been duly executed and delivered by such party and
constitutes a legal, valid and binding obligation of such party, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights generally
and subject to general principles of equity, regardless of whether considered in
a proceeding in equity or at law.
SECTION 7.03. Governmental Approvals; No Conflicts. The
execution, delivery and performance of this Agreement and the Substitute
Financing Side Letter (a) does not require any Government Approvals, except such
as have been obtained or made and are in full force and effect, (b) will not
violate any applicable law or regulation or the charter, by-laws or other
organizational documents of such party or any order of any Governmental
Authority, (c) will not violate or result in a default under any indenture,
agreement or other instrument binding upon any such party or its assets, or give
rise to a right thereunder to require any payment to be made by any such party,
and (d) will not result in the creation or imposition of any Lien on any asset
of such party.
SECTION 7.04. No Sovereign Immunity Defense. It is subject to
private commercial law and suit, and it is not entitled to sovereign immunity
under any such laws. Neither it, nor its assets have the right of immunity from
suit, attachment or execution on the grounds of sovereignty within the
Federative Republic of Brazil or in any other jurisdiction.
SECTION 7.05. Investment and Holding Company Status. It is not
(a) an "investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940 or (b) a "holding company" as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935.
SECTION 7.06. Financial Condition; No Material Adverse Change.
(a) It has heretofore made available (through public filings or otherwise) to
the Collateral Agent its balance sheet (consolidated, if applicable) and
statements of income, stockholders equity and cash flows (i) as of and for the
last full fiscal year reported on by independent public accountants, and (ii) as
of and for the last full fiscal quarter and portion of the fiscal year,
certified by its chief financial officer. Such financial statements present
fairly, in all material respects, its financial position and results of
operations and cash flows and any consolidated subsidiaries as of such dates and
for such periods in accordance with applicable generally accepted accounting
principles, subject to year-end audit adjustments and the absence of footnotes
in the case of the statements referred to in clause (ii) above.
13
255
(b) Since the date of its last full fiscal year, as of the
date hereof there has been no material adverse change in its financial or
trading position, other than as disclosed either publicly or to the Collateral
Agent prior to the date hereof.
SECTION 7.07. Initial Equity Contribution. In respect of any
Shareholder, that Shareholder has, and in respect of any Shareholder Guarantor,
that Shareholder Guarantor's Related Shareholder has, paid an amount in cash, to
Vesper, directly or through Holdings, equal respectively to that Shareholder's
and Related Shareholder's Initial Equity Contribution less any statutory tax
contributions required to be made by Holdings in respect of any payments made
through Holdings (which contributions did not in the aggregate exceed $265,000)
and Vesper has not made any Restricted Payment or other Repayment in respect of
any Indebtedness on or prior to the date hereof.
SECTION 7.08. Restricted Payment; Other Repayments. Vesper has
received an amount in cash equal to the aggregate of the Shareholders' Initial
Equity Contributions less any statutory tax contributions required to be made by
Holdings in respect of any payments made through Holdings (which contributions
did not in the aggregate exceed $265,000) and Vesper has not made any Restricted
Payment or any other Repayment in respect of any Indebtedness on or prior to the
date hereof.
SECTION 7.09. Ownership of the Shareholders. It is the
beneficial owner, directly or indirectly, of all of the Equity Interests in its
Related Shareholder, free and clear of any Liens.
SECTION 7.10. VeloCom Warranty. The board of directors of
VeloCom has allocated (and such allocation has not been revoked, terminated or
otherwise canceled) not less than US$75,000,000 to fund VeloCom Sub's Equity
Commitment and has received committed capital or financing commitments necessary
to satisfy such allocation, and VeloCom will have received irrevocable
commitments in an amount of not less than US$200,000,000 in a private securities
offering to be completed no later than January 31, 2000.
14
256
ARTICLE VIII
Undertakings
SECTION 8.01. Subscriptions and Other Actions. Each of the
Shareholders, Vesper and Holdings agrees that, if in performing the obligation
of any of the parties to this Agreement (x) any Person shall subscribe for any
Equity Interests in, or make of any Permitted Shareholder Loan to, Vesper or
Holdings or (y) Vesper or Holdings shall be required to take any other action,
the Shareholders shall (and shall cause their nominees appointed to the Advisory
Committee, and to the boards and any duly authorized committees of each of
Vesper and Holdings, to), and Vesper and Holdings shall, take all necessary
actions (including by calling meetings, approving such resolutions and granting
such other approvals, consents and waivers as may be necessary), as may be
required under the articles of association or other organizational documents of
any such Person, the Shareholders Agreement, any applicable law or otherwise, to
give effect to such subscription, to the making of such Permitted Shareholder
Loan or to such other action to be taken by any of Vesper and Holdings.
SECTION 8.02. Shareholders Agreement. Each of Holdings and
each Shareholder undertakes (a) not to breach wilfully the terms of the
Shareholders Agreement and (b) not to amend, modify, supplement, provide any
waivers in respect of or terminate the Shareholders Agreement without the prior
written consent of the Collateral Agent, except to the extent that any action
described in clause (a) or (b), if taken or made, would not have a material
adverse impact on the rights or interests of the Lenders under the Loan
Documents.
SECTION 8.03. Financial Information. Each Shareholder
Guarantor undertakes to provide or make available (through public filings or
otherwise) to the Collateral Agent:
(a) within 120 days after the end of each of its fiscal years,
its audited consolidated balance sheet and related statements of
operations, stockholders equity and cash flows as of the end of and for
such year, setting forth in each case in comparative form the figures
for the previous fiscal year, all reported on by independent public
accountants of recognized international standing to the effect that
such consolidated financial statements present fairly in all material
respects the financial condition and results of operations of such
Shareholder Guarantor and its consolidated subsidiaries on a
consolidated basis in accordance with applicable generally accepted
accounting principles consistently applied; and
(b) within 60 days after the end of each of the first three
fiscal quarters of each fiscal year of such Shareholder Guarantor, the
consolidated balance sheet of such Shareholder Guarantor and related
statements of operations, stockholders'
15
257
equity and cash flows as of the end of and for such fiscal quarter and
the then elapsed portion of the fiscal year, setting forth in each case
in comparative form the figures for the corresponding period or periods
of (or, in the case of the balance sheet, as of the end of) the
previous fiscal year, all certified by one of its financial officers as
presenting fairly in all material respects the financial condition and
results of operations of such Shareholder Guarantor and its
consolidated subsidiaries on a consolidated basis in accordance with
applicable generally accepted accounting principles consistently
applied, subject to normal year-end audit adjustments and the absence
of footnotes.
SECTION 8.04. Other Information. Each Shareholder and each
Shareholder Guarantor undertakes to supply to the Collateral Agent promptly
following any request therefor such information within its possession regarding
the operations, business affairs and financial condition of any of Holdings,
Vesper or any Subsidiary or any such Person's, such Shareholder's or such
Shareholder Guarantor's compliance with the terms of any Loan Document as the
Collateral Agent may reasonably request.
SECTION 8.05. Further Assurance. Each of Holdings, Vesper,
each of the Shareholders and each of the Shareholder Guarantors undertakes to
execute and deliver such additional documents as the Collateral Agent may from
time to time reasonably request for the purpose of effectively carrying out the
transactions contemplated by this Agreement.
ARTICLE IX
Transfers
SECTION 9.01. Effect of Transfers in the Project or Holdings.
Subject to the proviso in Section 9.02, the transfer by any Shareholder of any
direct or indirect interest in the Project, including any Equity Interest in
Holdings, shall not release such Shareholder from any of its obligations under
this Agreement; provided, however, that to the extent that any transferee of any
Shareholder's Equity Interest or any part thereof in Holdings shall have
irrevocably made any payment required to be made by such Shareholder in respect
of such transferred Equity Interest under Section 3.01, 4.01, 4.02 or 4.03, such
Shareholder shall be deemed to have made such payment itself. For the avoidance
of doubt, the transfer by any Shareholder of any Equity Interest in Holdings
whether to any other Shareholder, any Shareholder Guarantor or any other Person
shall not affect for the purposes of Section 3 and 4 of this Agreement such
Shareholder's Proportion, Equity Commitment or Outstanding Equity Commitment as
in effect on the date hereof.
16
258
SECTION 9.02. Effect of Transfers in any Shareholder. The
transfer by any Shareholder Guarantor of any interest in the Project, including
any Equity Interest in its Related Shareholder, shall not release such
Shareholder Guarantor from any of its obligations under this Agreement;
provided, however, that, if a transfer is made by BCI (a) of the whole or a
portion (provided that, following such transfer of a portion only such Telecom
Transferee shall satisfy each of the conditions set forth in each of clauses (c)
through (f) inclusive of the definition of "Change of Control") of its direct
and indirect interests in the Project, including its Equity Interests in
Holdings, (b) on a date following the third anniversary of the Effective Date,
(c) to a Telecom Transferee and (d) such Telecom Transferee executes and
delivers an assignment and assumption agreement in form and substance reasonably
satisfactory to the Collateral Agent pursuant to which such Telecom Transferee
assumes all or such portion of the obligations of BCI and its Related
Shareholder hereunder and under the other Loan Documents and otherwise agrees to
be bound to the terms hereof and thereof as applicable to BCI and its Related
Shareholder, BCI and its Related Shareholder shall be released from all or such
portion of their respective obligations under this Agreement and the other Loan
Agreements on the execution and delivery of such agreement to the Collateral
Agent and BCI and its Related Shareholder shall have no further liability to the
Collateral Agent under this Agreement with respect to all or such assigned
portion.
ARTICLE X
Shareholder and Shareholders Guarantor Acknowledgments
Each Shareholder and Shareholders Guarantor confirms that (i)
it has made its own investigation into the risks involved in this transaction,
including those associated with the condition (financial or otherwise),
creditworthiness, affairs, status and nature of the Borrower, Vesper and
Holdings, (ii) it has not relied and hereafter will not rely upon the Collateral
Agent or any Lender in relation to the matters set out in clause (i), and (iii)
neither has the Collateral Agent nor has any Lender made any representation or
warranty to it in relation to the matters set out in clause (i).
ARTICLE XI
Miscellaneous
SECTION 11.01. Notices. All notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
telecopy, as follows:
17
259
(a) if to Qualcomm Sub, to:
c/o XXXXXXXX Xxxxxxxxxxxx
0000 Xxxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: President
Facsimile: (000) 000-0000
with copies to:
the same address
Attn: Legal Department
Facsimile: (000) 000-0000
and
QUALCOMM do Brasil Ltda.
Av. Eng. Xxxx Xxxxxx Xxxxxxx 550, 8th andar
Sao Paulo, Brasil
Facsimile: (000) 0000-0000
Attn: President
(b) if to BCI Sub, to:
Xxxx Canada International (Megatel) Limited
Arawak Xxxxxxxx
Road Town, Tortola
British Virgin Islands
Facsimile No.: (000) 000-0000
Attention: President
with a copy to:
Xxxx Canada International Inc.
1000 de La Gauchetiere St. West
Suite 1100
Xxxxxxxx, Xxxxxx
X0X 0X0
Facsimile No.: (000) 000-0000
Attention: Vice President, Law and
Corporate Secretary
(c) if to VeloCom Sub, to:
VeloCom Cayman Brasil Holdings
c/o VeloCom Inc.
0000 Xxxxx Xxxxxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: President
Facsimile: (000) 000-0000
18
260
with a copy to:
VeloCom Inc.
0000 Xxxxx Xxxxxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Vice President, Strategic
and Legal Affairs
(d) if to Vesper, Holdings or the Collateral Agent, to it as
provided in the Collateral Agency Agreement; and
(e) if to any Shareholder Guarantor, to it at its address (or
telecopy number) set forth opposite its name in Schedule 1.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 11.02. Waivers; Amendments. (a) No failure or delay by
the Collateral Agent in exercising any right or power hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Collateral Agent under this
Agreement are cumulative and are not exclusive of any other rights or remedies
that the Collateral Agent would have.
(b) No amendment, supplement or other modification to or
waiver of this Agreement shall be effective unless made in writing and executed
by all parties to this Agreement.
SECTION 11.03. Successors and Assigns. (a) The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby, except that
no party may assign or otherwise transfer any of its rights or obligations
hereunder, except as provided in the proviso to Section 9.02, without the prior
written consent of the Collateral Agent (and any attempted assignment or
transfer by such party without such consent shall be null and void).
(b) Each of the parties hereby acknowledges and agrees that
this Agreement is intended to, and shall be, for the benefit of the Collateral
Agent and the Lenders and that each of Vesper, Holdings, each Shareholder and
each Shareholder Guarantor hereby grants the Collateral Agent the right to
enforce on behalf of itself and the
19
261
Lenders this Agreement, and the Shareholders and Shareholder Guarantors hereby
consent to the assignment by each of Vesper and Holdings to the Collateral Agent
of Vesper's and Holdings's rights under this Agreement.
SECTION 11.04. Counterparts; Integration; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement
constitutes the entire contract among the parties relating to the subject matter
hereof and supersedes any and all previous agreements and understandings, oral
or written, relating to the subject matter hereof. This Agreement shall become
effective when it shall have been executed by the Collateral Agent and when the
Collateral Agent shall have received counterparts hereof which, when taken
together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement.
SECTION 11.05. Severability. Any provision of this Agreement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 11.06. Conflict with Shareholders Agreement. Nothing
in the Shareholders Agreement shall prejudice or limit the rights, powers or
benefits of the Collateral Agent under this Agreement.
SECTION 11.07. Valid Obligations. The obligations of each of
the Shareholders and the Shareholder Guarantors under this Agreement are
irrevocable and unconditional, shall not be affected by the financial condition,
affairs, status, nature or actions of any Loan Party or any other Person, are
enforceable against such Shareholder or Shareholder Guarantor, as the case may
be, without regard to the legality, validity or enforceability of any
obligations of any Loan Party or any other Person, including the obligations of
any Loan Party under the Loan Documents, and without regard to any modification
of such obligations that may be effected, with or without the consent of such
Shareholder or Shareholder Guarantor, as the case may be, and shall not be
affected by: (a) the failure of any Agent or any Lender to assert any claim or
demand or to enforce any right or remedy against any Loan Party or any other
Person under this Agreement or any other Loan Document; (b) any extension or
renewal of any of the obligations
20
262
of any Loan Party or any other Person under any of the Loan Documents; (c) any
rescission, waiver, amendment or modification of any of the terms or provisions
of this Agreement or any other Loan Document; (d) the failure to perfect or the
release of any security held by any Agent or any Lender for the performance of
any of the obligations of any Loan Party under any Loan Document; (e) any
default, failure or delay, wilful or otherwise, in the performance of the
obligations of any Loan Party or any other Person under any Loan Document; (f)
the voluntary or involuntary liquidation, dissolution, sale of assets,
marshaling of assets and liabilities, receivership, conservatorship,
custodianship, insolvency, bankruptcy, concordata, assignment for the benefit of
creditors, reorganization, arrangement, readjustment of or similar proceeding
affecting any Person, including, without limitation, any Loan Party, any
Shareholder or any Shareholder Guarantor, (g) any voluntary reduction by Vesper
of any commitments under any credit facilities; or (h) any other act or omission
or delay to do any other act that might in any manner or to any extent vary the
risk of such Shareholder or Shareholder Guarantor, as the case may be, or that
would otherwise operate as a discharge of such Shareholder or Shareholder
Guarantor, as the case may be, as a matter of law.
SECTION 11.08. Governing Law; Jurisdiction; Consent to Service
of Process. (a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
(b) Each of the parties (other than the Collateral Agent)
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of the Supreme Court of the State of New York
sitting in New York County and of the United States District Court of the
Southern District of New York, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Agreement, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that the Collateral Agent may otherwise have to bring any action or
proceeding relating to this Agreement against any other party or its properties
in the courts of any jurisdiction.
(c) Each of the parties (other than the Collateral Agent)
hereby irrevocably and unconditionally waives, to the fullest extent it may
legally and effectively do so, any objection which it may now or hereafter have
to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement in any court referred to in paragraph (b) of this
Section. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense
21
263
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
(d) Each party to this Agreement, other than as hereinafter
provided, irrevocably consents to service of process in the manner provided for
notices in Section 11.01. Each of the Shareholders, the Shareholder Guarantors,
Vesper and Holdings hereby irrevocably designates, appoints and empowers CT
Corporation System, with offices on the date hereof at 000 Xxxxxx Xxxxxx, 00xx
xxxxx, Xxx Xxxx, XX 00000, as its designee, appointee and agent to receive and
accept for and on its behalf, and in respect of its property, service of any and
all legal process, summons, notices and documents which may be served in any
action or proceeding described in (b) above. If for any reason such designee,
appointee and agent shall cease to act as such, each of the Shareholders, the
Shareholder Guarantors, Vesper and Holdings agrees to designate a new designee,
appointee and agent in New York City on the terms and for the purposes of this
provision satisfactory to the Collateral Agent under this Agreement. Nothing in
this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
SECTION 11.09. WAIVERS. (a) WAIVER OF JURY TRIAL. EACH PARTY
HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
(b) WAIVER OF SOVEREIGN IMMUNITY. TO THE EXTENT THAT ANY PARTY
HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM
ANY LEGAL PROCESS, IT HEREBY WAIVES SUCH IMMUNITY AND AGREES NOT TO ASSERT, BY
WAY OF MOTION, AS A DEFENSE, OR OTHERWISE, IN ANY SUCH SUIT, ACTION OR
PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF
THE COURTS NAMED IN SECTION 11.08(b), THAT IT IS IMMUNE FROM ANY LEGAL PROCESS
(WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN
AID OF EXECUTION, EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, OR ATTACHMENT EITHER PRIOR TO JUDGMENT OR IN AID OF EXECUTION, BY
REASON OF SOVEREIGN IMMUNITY, OR OTHERWISE, THAT THE VENUE OF THE SUIT, ACTION
OR PROCEEDING IS IMPROPER OR THAT THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR
THE SUBJECT MATTER HEREOF OR THEREOF MAY NOT BE ENFORCED IN OR BY SUCH COURTS.
SECTION 11.10. Headings. Article and Section headings and the
Table of Contents used herein are for convenience of reference
22
264
only, are not part of this Agreement and shall not affect the construction of,
or be taken into consideration in interpreting, this Agreement.
SECTION 11.11. Enforcement. The parties agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in any New York State
court, this being in addition to any other remedy to which they are entitled at
law or in equity.
SECTION 11.12. Termination. All Guaranteed Obligations and
other obligations and liabilities of each Shareholder Guarantor and the
obligations and liabilities of its Related Shareholder shall terminate on the
earlier of (i) the date on which such Related Shareholder's Outstanding Equity
Commitment equals zero, (ii) with respect to BCI and BCI Sub, the date on which
the entirety of BCI's direct and indirect interests in the Project shall have
been transferred in compliance with the proviso to Section 9.02, and (iii) the
termination of all outstanding obligations, commitments and liabilities of the
Borrower, Vesper and Holdings under the last of the Participating Credit
Agreements to terminate in accordance with its terms, except as to the liability
of any party for any breach hereof by such party prior to such termination.
23
265
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
QUALCOMM DO BRASIL LTDA.,
by
--------------------------------------
Name:
Title:
XXXX CANADA INTERNATIONAL (MEGATEL)
LIMITED,
by
--------------------------------------
Name:
Title:
VELOCOM CAYMAN BRASIL HOLDINGS,
by
--------------------------------------
Name:
Title:
XXXXXXXX XXXXXXXXXXXX,
by
--------------------------------------
Name:
Title:
24
000
XXXX XXXXXX INTERNATIONAL INC.,
by
--------------------------------------
Name:
Title:
VELOCOM INC.,
by
--------------------------------------
Name:
Title:
VESPER SAO PAULO S.A.,
by
--------------------------------------
Name:
Title:
25
267
VESPER HOLDING SAO PAULO S.A.,
by
--------------------------------------
Name:
Title:
CITIBANK, N.A., as Collateral Agent,
by
--------------------------------------
Name:
Title:
26
268
BANCO CITIBANK S.A., as Collateral Agent,
by
--------------------------------------
Name:
Title:
27
269
Schedule 1
Shareholder Guarantors and Shareholder Details
Shareholder Address and Related Initial Equity
Guarantor Telecopy Number Shareholder Proportion Contribution
----------- --------------- ----------- ---------- --------------
(%) ($)
Qualcomm XXXXXXXX Xxxxxxxxxxxx Qualcomm Sub 16.2 7,242,753
0000 Xxxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: President
Facsimile: (000) 000-0000
with copies to:
the same address
Attn: Legal Department
Facsimile: (000) 000-0000
BCI Xxxx Canada International Inc. BCI Sub 34.4 22,537,070
1000 de La Gauchetiere St. West
Suite 1100
Xxxxxxxx, Xxxxxx
X0X 0X0
Facsimile No.: (000) 000-0000
Attention: Vice-President, Law and
Corporate Secretary
VeloCom VeloCom Inc. VeloCom Sub 49.4 35,651,686
0000 Xxxxx Xxxxxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Vice-President, Strategic
and Legal Affairs
270
EXHIBIT H
SUBORDINATION AGREEMENT dated as of December 27,
1999, among VESPER SAO PAULO CAYMAN, a Cayman Islands company
(the "Borrower"), VESPER SAO PAULO S.A., a Brazilian sociedade
por acoes ("Vesper"), VESPER HOLDING SAO PAULO S.A., a
Brazilian sociedade por acoes ("Holdings"), each subsidiary of
Vesper listed on Schedule I hereto (each a "Subsidiary", and,
collectively, the "Subsidiaries"), each Shareholder listed on
Schedule II hereto (each a "Shareholder", and, collectively,
the "Shareholders"), each Shareholder Guarantor listed on
Schedule III hereto (each a "Shareholder Guarantor", and,
collectively, the "Shareholder Guarantors"); each Subsidiary,
each Shareholder, each Shareholder Guarantor and Holdings,
individually, a "Subordinated Creditor" and, collectively, the
"Subordinated Creditors"), BANCO CITIBANK S.A., a Brazilian
sociedade por acoes, as collateral and intercreditor agent,
and CITIBANK, N.A., a national banking association duly
organized and validly existing under the laws of the United
States of America, as collateral and intercreditor agent
(together with Banco Citibank S.A., the "Collateral Agent")
for the Secured Parties.
Reference is made to the Collateral Agency and Intercreditor Agreement
dated as of December 27, 1999 (as amended, supplemented or otherwise modified
from time to time, the "Collateral Agency and Intercreditor Agreement") among
Vesper, the Borrower, Holdings, the Administrative Agents referred to therein
and the Collateral Agent. Capitalized terms used herein and not defined herein
shall have the meanings assigned to such terms in the Collateral Agency and
Intercreditor Agreement. Each Subordinated Creditor acknowledges receipt of a
true and correct copy of the Collateral Agency and Intercreditor Agreement and
agrees to the terms thereof.
The Lenders have agreed to make Loans to the Borrower pursuant
to, and upon the terms and subject to the conditions
271
specified in, the Common Agreement and the Participating Credit Agreements.
Vesper has agreed to issue, and the Borrower has agreed to purchase, the Notes.
The obligation of the Lenders to make Loans is conditioned on, among other
things, the execution and delivery by the Subordinated Creditors, the Borrower,
Vesper and the Collateral Agent of a subordination agreement in the form hereof.
In order to induce the Secured Parties to extend credit under the applicable
Loan Documents, each of the Subordinated Creditors, the Borrower and Vesper are
willing to execute and deliver this Agreement. The Borrower may from time to
time incur additional Borrower Obligations and Vesper may from time to time
incur additional Operating Company Obligations that are required to become
Senior Obligations hereunder. Accordingly, the Subordinated Creditors, the
Borrower, Vesper and the Collateral Agent hereby agree as follows:
ARTICLE I
DEFINITIONS
Terms used herein but not defined herein shall have the
meanings set forth in the Collateral Agency and Intercreditor Agreement.
Sections 1.02 and 11.07 of the Collateral Agency and Intercreditor Agreement
also shall apply to terms used in this Agreement. In addition to the terms
defined elsewhere in this Agreement or in the Collateral Agency and
Intercreditor Agreement, as used herein the following terms shall have the
following meanings:
"Borrower Companies" means the Borrower, Vesper and the
Subsidiaries.
"Primary Subordinated Obligations" means, with respect to any
Borrower Company, the following:
(a) all monetary obligations of such Borrower Company, whether
in respect of principal, premium interest or otherwise, in respect of
any Indebtedness owed by such Borrower Company to any Subordinated
Creditor (including any such obligations owing to any other Person for
the direct or indirect benefit of any Subordinated Creditor); and
2
272
(b) any fees or similar charges payable to or directly or
indirectly for the benefit of any Subordinated Creditor;
provided that the Primary Subordinated Obligations shall not include the
Intercompany Obligations.
"Secondary Subordinated Obligations" means, with respect to
any Borrower Company, all monetary obligations and other liabilities of such
Borrower Company at any time owing to any Subordinated Creditor (including any
such obligations or other liabilities owing to any other Person for the direct
or indirect benefit of any Subordinated Creditor); provided that Secondary
Subordinated Obligations of a Borrower Company shall not include its Primary
Subordinated Obligations or, with respect to Vesper, the Intercompany
Obligations.
"Secondment Agreement" means the Secondment Agreement dated
December 23, 1999 between BCI and Vesper (as amended from time to time in
accordance with the provisions of the Common Agreement).
"Senior Creditors" means the Secured Parties, the Borrower (in
respect of the Intercompany Obligations), and their respective successors and
assigns.
"Senior Creditor Documents" means the Loan Documents.
"Senior Obligations" means (a) with respect to the Borrower,
the Borrower Obligations, (b) with respect to Vesper, the Operating Company
Obligations, and (c) with respect to any other Borrower Company, all monetary
obligations of such Borrower Company under the Support Documents to which it is
a party, including pursuant to the Subsidiary Guarantee Agreement.
"Subordinated Creditors" means each of Holdings, the
Shareholders, the Shareholder Guarantors, Vesper, the Subsidiaries, the Borrower
(other than with respect to the Intercompany Obligations) and such other Persons
as shall become parties hereto as contemplated by Section 5.9 hereof, as may be
required by Section 5.11 or 6.07(b) of the Common Agreement, or otherwise.
3
273
"Subordinated Obligations" means the Primary Subordinated
Obligations and the Secondary Subordinated Obligations.
"Technical Services Agreement" means the Technical Services
Agreement, dated July 30, 1999 between BCI and Vesper as amended by Amendment
No. 1, dated December 23, 1999 between the same parties (as further amended from
time to time in accordance with the provisions of the Common Agreement).
ARTICLE II
SUBORDINATION
SECTION 2.1. Subordination. Each Subordinated Creditor hereby
agrees that all the Subordinated Obligations of each Borrower Company are hereby
expressly subordinated, to the extent and in the manner set forth in this
Article II, to the prior payment in full in cash of all Senior Obligations of
such Borrower Company in accordance with the terms thereof.
SECTION 2.2. Dissolution or Insolvency. To the extent
permitted by applicable law, upon any distribution of the assets of any Borrower
Company or upon any dissolution, winding up, liquidation or reorganization of
any Borrower Company, whether in bankruptcy, insolvency, reorganization,
arrangement or receivership proceedings or otherwise, or upon any assignment for
the benefit of creditors or any other marshaling of the assets and liabilities
of any Borrower Company, or otherwise:
(a) the Senior Creditors of such Borrower Company shall first
be entitled to receive payment in full in cash of the Senior Obligations of such
Borrower Company in accordance with the terms of such Senior Obligations and the
Support Documents before any Subordinated Creditor shall be entitled to receive
any payment on account of the Subordinated Obligations of such Borrower Company,
whether as principal, interest or otherwise; and
(b) any payment by, or distribution of the assets of, such
Borrower Company of any kind or character, whether in cash, property or
securities, to which any Subordinated Creditor would be entitled except for the
provisions of this Agreement shall be
4
274
paid or delivered by the Person making such payment or distribution (whether a
trustee in bankruptcy, a receiver, custodian or liquidating trustee or
otherwise) directly to the Collateral Agent to the extent necessary to make
payment in full in cash of all Senior Obligations of such Borrower Company
remaining unpaid, after giving effect to any concurrent payment or distribution
to the Senior Creditors in respect of the Senior Obligations, to be held and
applied by the Collateral Agent as provided in the Collateral Agency and
Intercreditor Agreement .
SECTION 2.3. Payment of Primary Subordinated Obligations
Prohibited. (a) No payment (whether directly, by exercise of any right of
set-off or otherwise) in respect of any Primary Subordinated Obligation of any
Borrower Company, whether as principal, interest or otherwise, shall be
permitted at any time until all Senior Obligations have been paid in full.
(b) No payment of any Primary Subordinated Obligation that is
prohibited by paragraph (a) above shall be received or accepted by or on behalf
of any Subordinated Creditor.
(c) The provisions of this Section 2.3 shall not apply to the
payment of any Primary Subordinated Obligation to the extent payment thereof is
expressly permitted at the time by each Loan Document and the Collateral Agency
and Intercreditor Agreement.
SECTION 2.4. Payment of Secondary Subordinated Obligations
Prohibited Upon Default. (a) Other than in respect of the Secondment Agreement
and the Technical Services Agreement, no payment (whether directly, by exercise
of any right of set-off or otherwise) in respect of the Secondary Subordinated
Obligations of any Borrower Company, whether as principal, interest or
otherwise, shall be permitted, and no such payment shall be received or accepted
by or on behalf of any Subordinated Creditor, if immediately prior to or after
giving effect to such payment either (i) an Event of Default has occurred and is
continuing or (ii) an event that with notice, lapse of time or both would
constitute an Event of Default.
(b) No payment (whether directly, by exercise of any right of
set-off or otherwise), in respect of either of the Secondment Agreement or the
Technical Services Agreement by any Borrower Company shall be permitted, and no
such payment shall
5
275
be received or accepted by or on behalf of any Subordinated Creditor, if
immediately prior to or after giving effect to such payment an Event of Default
described in clause (h), (i) or (j) of Section 7.01 of the Common Agreement has
occurred and is continuing.
SECTION 2.5. Certain Payments Held in Trust. In the event that
any payment by, or distribution of the assets of, any Borrower Company of any
kind or character, whether in cash, property or securities, and whether
directly, by exercise of any right of set-off or otherwise, shall be received by
or on behalf of any Subordinated Creditor at a time when such payment is
prohibited by this Agreement, such payment or distribution shall be held in
trust for the benefit of, and shall be paid over to, (a) the Collateral Agent to
the extent necessary to make payment in full in cash of all Senior Obligations
of such Borrower Company remaining unpaid, after giving effect to any concurrent
payment or distribution to the Senior Creditors in respect of such Senior
Obligations, to be held and applied by the Collateral Agent as provided in the
Collateral Agency and Intercreditor Agreement or (b) in the case of any payment
prohibited under Section 2.3 or 2.4, the Borrower Company from which such
payment was received or, if directed by the Collateral Agent, to the Collateral
Agent to be held and applied by the Collateral Agent as provided in the
Collateral Agency and Intercreditor Agreement.
SECTION 2.6. Subrogation. Subject to the prior indefeasible
payment in full in cash of the Senior Obligations of a Borrower Company, the
applicable Subordinated Creditors of such Borrower Company shall be subrogated
to the rights of the Senior Creditors of such Borrower Company to receive
payments or distributions in cash, property or securities of such Borrower
Company applicable to such Senior Obligations until all amounts owing on the
Subordinated Obligations of such Borrower Company shall be paid in full, and as
between and among a Borrower Company, its creditors (other than its Senior
Creditors) and the applicable Subordinated Creditors of such Borrower Company,
no such payment or distribution made to the Collateral Agent by virtue of this
Agreement that otherwise would have been made to the Subordinated Creditors of
such Borrower Company shall be deemed to be a payment by such Borrower Company
on account of its Subordinated Obligations, it being understood that the
provisions of this Agreement are intended solely for the purpose
6
276
of defining the relative rights of the Subordinated Creditors, on the one hand,
and the Senior Creditors, on the other hand.
ARTICLE III
OTHER MATTERS REGARDING THE SUBORDINATED OBLIGATIONS
SECTION 3.1. Other Creditors. Nothing contained in this
Agreement is intended to or shall impair, as between and among the Borrower
Companies, their creditors (other than their Senior Creditors) and the
Subordinated Creditors, the obligations of each Borrower Company to pay to the
applicable Subordinated Creditors of such Borrower Company the Subordinated
Obligations of such Borrower Company as and when the same shall become due and
payable in accordance with the terms thereof, or affect the relative rights of
the Subordinated Creditors and the other creditors of the Borrower Company
(other than their Senior Creditors).
SECTION 3.2. Proofs of Claims. In the event of any
dissolution, winding up, liquidation or reorganization of any Borrower Company,
whether in bankruptcy, insolvency, reorganization, arrangement or receivership
proceedings or otherwise, or any assignment for the benefit of creditors or any
other marshaling of the assets and liabilities of any Borrower Company, each
Subordinated Creditor agrees to file proofs of claim for the Subordinated
Obligations owed to it upon demand of the Collateral Agent, in default of which
the Collateral Agent or other authorized representative of the Senior Creditors
is hereby irrevocably authorized so to file in order to effectuate the
provisions hereof. This Section shall not be construed to permit any
Subordinated Creditor to retain any payment received by it in respect of a
Subordinated Obligation that such Subordinated Creditor is not entitled to
receive and retain under any other provision of this Agreement.
SECTION 3.3. No Waiver. No right of any Senior Creditor to
enforce this Agreement shall at any time or in any way be prejudiced or impaired
by any act or failure to act on the part of any of the Collateral Agent, the
other Senior Creditors, or any Borrower Company, or by any noncompliance by any
Borrower Company with the terms, provisions and covenants
7
277
contained herein, and the Senior Creditors are hereby expressly authorized to
extend, renew, increase, decrease, modify or amend the terms of the Senior
Obligations or any security therefor, and to release, sell or exchange any such
security and otherwise deal freely with the Borrower Companies, all without
notice to or consent of any Subordinated Creditor and without affecting the
liabilities and obligations of the parties hereto.
SECTION 3.4. Acceleration and Remedies; Bankruptcy Filings.
Each Subordinated Creditor agrees that, except for claims submitted in any
proceeding contemplated by Section 3.2, it will not exercise any remedies or
take any action or proceeding to enforce any Subordinated Obligation if the
payment of such Subordinated Obligation is then prohibited by Section 2.3 or
2.4, and each Subordinated Creditor further agrees not to file, or to join with
any other creditors of any Borrower Company in filing, any petition commencing
any bankruptcy, insolvency, reorganization, arrangement or receivership
proceeding or any assignment for the benefit of creditors against or in respect
of any Borrower Company or any other marshaling of the assets and liabilities of
any Borrower Company. Each Subordinated Creditor further agrees, to the fullest
extent permitted under applicable law, that it will not cause any Borrower
Company to file any such petition, commence any such proceeding or make any such
assignment referred to above until all Senior Obligations have been paid in
full.
SECTION 3.5. Transfer of Subordinated Obligations. Each
Subordinated Creditor agrees that it will not sell, assign, transfer or
otherwise dispose of all or any part of the Subordinated Obligations owed to it
unless the Person to whom such sale, assignment, transfer or disposition is made
(i) is a Subordinated Creditor hereunder or (ii) shall acknowledge in writing
(delivered to the Collateral Agent) that it shall be bound by the terms of this
Agreement, including the terms of this Section 3.5, as though named herein as a
Subordinated Creditor.
8
278
SECTION 3.6. Obligations Hereunder Not Affected. (a) All
rights and interests of the Senior Creditors hereunder, and all agreements and
obligations of the Subordinated Creditors hereunder, shall remain in full force
and effect irrespective of:
(i) any lack of validity or enforceability of any Support
Document or any other Loan Document;
(ii) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Senior Obligations, or any
other amendment or waiver of or consent to departure from the
Participating Credit Agreements or any other Loan Document (other than
this Agreement);
(iii) any exchange, release or nonperfection of any security
interest in any collateral, or any release or amendment or waiver of or
consent to departure from any guarantee, in respect of all or any of
the Senior Obligations; or
(iv) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, any Borrower Company in
respect of its Senior Obligations or of any Subordinated Creditor in
respect of this Agreement.
(b) This Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of the Senior
Obligations or any part thereof is rescinded or must otherwise be returned by
any Senior Creditor upon the insolvency, bankruptcy or reorganization of any
Borrower Company or otherwise, all as though such payment had not been made.
(c) Each Subordinated Creditor hereby authorizes the Senior
Creditors, without notice or demand and without affecting or impairing any of
the obligations of such Subordinated Creditor hereunder, from time to time to
(i) renew, compromise, extend, increase, accelerate or otherwise change the time
for payment of, or otherwise change the terms of, the Senior Obligations or any
part thereof and (ii) exercise or refrain from exercising any rights against any
Subordinated Creditor, any Borrower Company or any other Person.
9
279
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SUBORDINATED CREDITORS
Each Subordinated Creditor severally represents and warrants
to the Collateral Agent, for the benefit of the Senior Creditors, that:
(a) It is duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is organized.
(b) The execution, delivery and performance by it of this
Agreement and the consummation of the transactions contemplated hereby are
within its powers, have been duly authorized by all necessary action on its
part, require no action by or in respect of, or filing with, any Governmental
Authority (other than such as have been duly taken or made) and do not
contravene, or constitute a default under, any provision of applicable law or
regulation or of its certificate of incorporation or by-laws (or other
organizational documents, as applicable) or of any material agreement, judgment,
injunction, order, decree or other instrument binding upon it or any of its
subsidiaries.
(c) This Agreement constitutes a valid and binding agreement
of such Subordinated Creditor, enforceable against such Subordinated Creditor in
accordance with its terms, subject to the effect of applicable bankruptcy,
insolvency or similar laws affecting creditors' rights generally and equitable
principles of general applicability.
ARTICLE V
MISCELLANEOUS
SECTION 5.1. Termination. Subject to Section 3.6(b), this
Agreement shall terminate when all the Obligations (other than the Intercompany
Obligations) have been indefeasibly paid in full and all Commitments shall have
terminated.
10
280
SECTION 5.2. Successors and Assigns. Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party. All representations,
warranties, covenants, promises and agreements by or on behalf of any
Subordinated Creditor that are contained in this Agreement shall bind its
successors and assigns and inure to the benefit of the Senior Creditors and the
successors and assigns of the Senior Creditors. Each Subordinated Creditor
agrees that it shall not assign or delegate any of its obligations under this
Agreement without the prior written consent of the Collateral Agent, and any
attempted assignment or delegation without such consent shall be void and of no
effect.
SECTION 5.3. Waivers; Amendment. (a) No failure or delay of
any Senior Creditor in exercising any right or power hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right or
power by any Senior Creditor preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the Senior
Creditors hereunder and under the other documents and instruments creating or
securing their respective Senior Obligations are cumulative and are not
exclusive of any other rights or remedies provided by law. No waiver of any
provision of this Agreement or consent to any departure by any Subordinated
Creditor therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) below, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into between the Subordinated Creditor or the Borrower with
respect to which such waiver, amendment or modification relates and the
Collateral Agent, subject to any consents required in accordance with Sections
8.01 and 11.02 of the Collateral Agency and Intercreditor Agreement.
SECTION 5.4. Governing Law; Jurisdiction; Consent to Service
of Process. (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
11
281
(b) Each Subordinated Creditor hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or any other Senior Creditor
Document, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New
York State or, to the extent permitted by law, in such Federal court. Each of
the parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that the Collateral Agent or any other Senior Creditor may
otherwise have to bring any action or proceeding relating to any Support
Document against any Subordinated Creditor or its properties in the courts of
any jurisdiction.
(c) Each Subordinated Creditor hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to any Support
Document in any court referred to in paragraph (b) of this Section. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(d) Each Subordinated Creditor hereby irrevocably consents to
service of process in the manner provided for notices in Section 5.5. Each
Subordinated Creditor hereby irrevocably designates, appoints and empowers CT
Corporation System, with offices on the date hereof at 000 Xxxxxx Xxxxxx, 00xx
xxxxx, Xxx Xxxx, XX 00000, as its designee, appointee and agent to receive and
accept for and on its behalf, and in respect of its property, service of any and
all legal process, summons, notices and documents which may be served in any
action or proceeding described in (a) above. If for any reason such designee,
appointee and agent shall cease to act as such, each Subordinated Creditor
agrees to designate a new designee,
12
282
appointee and agent in New York City on the terms and for the purposes of this
provision satisfactory to the Collateral Agent under this Agreement. Nothing in
this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
SECTION 5.5. Notices. All communications and notices hereunder
shall be in writing and shall be given as provided in Section 11.01 of the
Collateral Agency and Intercreditor Agreement; provided that any communication
or notice hereunder to any Subordinated Creditor shall be given to it at the
address or facsimile number set forth under its signature on the signature page
hereof or of the supplement hereto pursuant to which it becomes a party hereto.
SECTION 5.6. Severability. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby. The parties shall endeavor in good faith negotiations to
replace any invalid, illegal or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 5.7. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original but all of which when taken together shall
constitute a single contract; provided that this Agreement shall be construed as
a separate agreement with respect to each Subordinated Creditor and may be
amended, modified, supplemented, waived or released with respect to any
Subordinated Creditor without the approval of any other Subordinated Creditor
and without affecting the obligations of any other Subordinated Creditor
hereunder. This Agreement shall be effective with respect to any Subordinated
Creditor when a counterpart hereof (or of an instrument executed as provided in
Section 5.9 below) which bears the signature of such Subordinated Creditor shall
have been delivered to the Collateral Agent.
SECTION 5.8. WAIVERS. (a) WAIVER OF JURY TRIAL. EACH PARTY
HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED
13
283
BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO ANY SUPPORT
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
(b) WAIVER OF SOVEREIGN IMMUNITY. TO THE EXTENT THAT ANY PARTY
HERETO HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT
OR FROM ANY LEGAL PROCESS, SUCH PARTY HEREBY WAIVES SUCH IMMUNITY AND AGREES NOT
TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR OTHERWISE, IN ANY SUCH SUIT,
ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE
JURISDICTION OF THE COURTS NAMED IN SECTION 5.4(B), THAT IT IS IMMUNE FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION, EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF
OR ITS PROPERTY, OR ATTACHMENT EITHER PRIOR TO JUDGMENT OR IN AID OF EXECUTION,
BY REASON OF SOVEREIGN IMMUNITY, OR OTHERWISE, THAT THE VENUE OF THE SUIT,
ACTION OR PROCEEDING IS IMPROPER OR THAT THIS AGREEMENT OR ANY OTHER SUPPORT
DOCUMENT OR THE SUBJECT MATTER HEREOF OR THEREOF MAY NOT BE ENFORCED IN OR BY
SUCH COURTS.
SECTION 5.9. Additional Subordinated Creditors. Upon execution
and delivery by the Collateral Agent and an Affiliate of Holdings or of Vesper
or of any Subsidiary or any other Person required by any of the Loan Documents
to become a party hereto of an instrument in the form of Annex 1 attached
thereto, such Affiliate or other Person shall become a Subordinated Creditor
hereunder with the same force and effect as if originally named as a
Subordinated Creditor herein. The execution and delivery of any such instrument
shall not require the consent of any other Subordinated Creditor hereunder. The
rights and obligations of each Subordinated Creditor herein shall remain in full
force and effect notwithstanding the addition of any Subordinated Creditor as a
party to this Agreement.
14
284
IN WITNESS WHEREOF, the Borrower, Vesper, each Subsidiary,
Holdings, each Shareholder, each Shareholder Guarantor and the Collateral Agent
have caused this Agreement to be duly executed by their respective authorized
representatives as of the day and year first above written.
VESPER SAO PAULO CAYMAN,
By
-------------------------------------
Name:
Title:
VESPER SAO PAULO S.A.,
By
-------------------------------------
Name:
Title:
VESPER HOLDING SAO PAULO S.A.,
By
----------------------------
Name:
Title:
Address:
EACH SUBSIDIARY LISTED ON SCHEDULE I HERETO,
By
----------------------------
Name:
Title:
Address: See Schedule I
15
285
QUALCOMM DO BRASIL LTDA.,
By
----------------------------
Name:
Title:
Address: See Schedule II
XXXX CANADA INTERNATIONAL (MEGATEL) LIMITED,
By
----------------------------
Name:
Title:
Address: See Schedule II
VELOCOM CAYMAN BRASIL HOLDINGS,
By
----------------------------
Name:
Title:
Address: See Schedule II
XXXXXXXX XXXXXXXXXXXX,
By
----------------------------
Name:
Title:
Address: See Schedule III
XXXX CANADA INTERNATIONAL INC.,
By
----------------------------
Name:
Title:
Address: See Schedule III
16
286
VELOCOM INC.,
By
----------------------------
Name:
Title:
Address: See Schedule III
CITIBANK, N.A., as Collateral and Intercreditor Agent,
By
----------------------------
Name: Title:
BANCO CITIBANK S.A., as Collateral and Intercreditor Agent,
By
----------------------------
Name: Title:
SCHEDULE I TO THE
SUBORDINATION AGREEMENT
SUBSIDIARIES
Name Address
---- -------
17
287
SCHEDULE II TO THE
SUBORDINATION AGREEMENT
SHAREHOLDERS
Name Address
---- -------
Xxxx Canada International (Megatel) Limited Xxxx Canada International (Megatel) Limited
Arawak Xxxxxxxx
Road Town, Tortola
British Virgin Islands
Facsimile No.: (000) 000-0000
Attention: President
with a copy to:
Xxxx Canada International Inc.
1000 de La Gauchetiere St. West
Suite 1100
Xxxxxxxx, Xxxxxx
X0X 0X0
Facsimile No.: (000) 000-0000
Attention: Vice-President, Law and Corporate
Secretary
VeloCom Cayman Brasil Holdings VeloCom Cayman Brasil Holdings
c/o VeloCom Inc.
0000 Xxxxx Xxxxxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: President
18
288
Name Address
---- -------
with a copy to:
VeloCom Inc.
0000 Xxxxx Xxxxxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Vice-President, Strategic and Legal
Affairs
Qualcomm do Brasil Ltda. QUALCOMM do Brasil Ltda.
Av. Engl. Xxxx Xxxxxx Xxxxxxx 550, 8th andar
Sao Paulo, Brasil
Facsimile No.: (000) 0000-0000
Attention: President
with copies to:
c/o XXXXXXXX Xxxxxxxxxxxx
0000 Xxxx Xxxxxxxxx
Xxx Xxxxx, XX 00000
Attn: President
Facsimile: (000) 000-0000
and the same address
Attention: Legal Department
Facsimile: (000) 000-0000
19
289
SCHEDULE III TO THE
SUBORDINATION AGREEMENT
SHAREHOLDER GUARANTORS
Name Address
---- -------
Xxxx Canada International Inc. 1000 de La Gauchetiere St. West
Suite 1100
Xxxxxxxx, Xxxxxx
X0X 0X0
Facsimile No.: (000) 000-0000
Attention: Vice-President, Law and Corporate
Secretary
VeloCom Inc. 0000 Xxxxx Xxxxxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Vice-President, Strategic and Legal
Affairs
20
290
Name Address
---- -------
Xxxxxxxx Xxxxxxxxxxxx 0000 Xxxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: President
with copies to:
the same address
The Legal Department
Facsimile No: (000) 000-0000
Annex 1 to the
Subordination Agreement
SUPPLEMENT NO. [ ] dated as of [ ], to the
Subordination Agreement dated as of December 27, 1999, among
VESPER SAO PAULO CAYMAN, a Cayman limited company (the
"Borrower"), VESPER SAO PAULO S.A., a Brazilian sociedade por
acoes ("Vesper"), VESPER HOLDING SAO PAULO S.A., a Brazilian
sociedade por acoes ("Holdings"), each subsidiary of Vesper
listed on Schedule I hereto (each a "Subsidiary", and,
collectively, the "Subsidiaries"), each Shareholder listed on
Schedule II hereto (each a "Shareholder", and, collectively,
the "Shareholders"), each Shareholder Guarantor listed on
Schedule III hereto (each a "Shareholder Guarantor", and,
collectively, the "Shareholder Guarantors"); each Subsidiary,
Shareholder, Shareholder Guarantor and Holdings, individually,
a "Subordinated Creditor" and collectively, the "Subordinated
Creditors"), BANCO CITIBANK S.A., a Brazilian sociedade por
acoes, as collateral and intercreditor agent, and CITIBANK,
N.A., a national banking association
21
291
duly organized and validly existing under the laws of the
United States of America, as collateral and intercreditor
agent (together with Banco Citibank S.A., the "Collateral
Agent") for the Secured Parties
A. Reference is made to the (a) Collateral Agency and Intercreditor
Agreement (as defined in the Subordination Agreement) and (b) the Subordination
Agreement.
B. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Subordination Agreement.
C. The Subordinated Creditors, the Borrower and Vesper have entered
into the Subordination Agreement in order to induce the Secured Parties to make
loans under the applicable Loan Documents. Section 5.9 of the Subordination
Agreement provides that Affiliates of Holdings, of Vesper or of any Subsidiary
and additional Persons may become Subordinated Creditors under the Subordination
Agreement by execution and delivery of an instrument in the form of this
Supplement. The undersigned Affiliate of Holdings, of Vesper or of any
Subsidiary or other Person, as the case may be, (the "New Subordinated
Creditor") is executing this Supplement to become a Subordinated Creditor under
the Subordination Agreement in order to induce the Secured Parties to make
additional loans pursuant to the Loan Documents and as consideration for loans
previously made under the Loan Documents.
22
292
Accordingly, the Collateral Agent and the New Subordinated Creditor
agree as follows:
SECTION 1. In accordance with Section 5.9 of the Subordination
Agreement, the New Subordinated Creditor by its signature below becomes a
Subordinated Creditor under the Subordination Agreement with the same force and
effect as if originally named therein as a Subordinated Creditor and the New
Subordinated Creditor hereby (a) agrees to all the terms and provisions of the
Subordination Agreement applicable to it as a Subordinated Creditor thereunder
and (b) represents and warrants that the representations and warranties made by
it as a Subordinated Creditor thereunder are true and correct on and as of the
date hereof except for representations and warranties which by their terms refer
to a specific date. Each reference to a "Subordinated Creditor" in the
Subordination Agreement shall be deemed to include the New Subordinated
Creditor. The Subordination Agreement is hereby incorporated herein by
reference.
SECTION 2. The New Subordinated Creditor represents and warrants to the
Collateral Agent and the other Secured Parties that this Supplement has been
duly authorized, executed and delivered by it and constitutes its legal, valid
and binding obligation, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, insolvency, moratorium or other laws affecting
creditors' rights generally and subject to general principles of equity
regardless of whether considered in a proceeding in equity or at law.
SECTION 3. This Supplement may be executed in counterparts, each of
which shall constitute an original, but all of which when taken together shall
constitute a single contract. This Supplement shall become effective when the
Collateral Agent shall have received counterparts of this Supplement that, when
taken together, bear the signatures of the New Subordinated Creditor and the
Collateral Agent. Delivery of an executed signature page to this Supplement by
facsimile transmission shall be as effective as delivery of a manually executed
counterpart of this Supplement.
SECTION 4. Except as expressly supplemented hereby, the Subordination
Agreement shall remain in full force and effect.
23
293
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Subordination Agreement shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision hereof in a particular jurisdiction shall not in and of itself affect
the validity of such provision in any other jurisdiction). The parties hereto
shall endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 7. All communications and notices hereunder shall be in writing
and given as provided in Section 5.5 of the Subordination Agreement. All
communications and notices hereunder to the New Subordinated Creditor shall be
given to it at the address set forth under its signature below, with a copy to
the Borrower.
24
294
SECTION 8. The New Subordinated Creditor agrees to reimburse the
Collateral Agent for its reasonable out-of-pocket expenses in connection with
this Supplement, including the reasonable fees, disbursements and other charges
of counsel for the Collateral Agent.
IN WITNESS WHEREOF, the New Subordinated Creditor and the Collateral
Agent have duly executed this Supplement to the Subordination Agreement as of
the day and year first above written.
[NAME OF NEW SUBORDINATED CREDITOR],
By
-------------------------------------
Name:
Title:
Address:
CITIBANK, N.A., as Collateral and
Intercreditor Agent,
By
-------------------------------------
Name:
Title:
Address:
BANCO CITIBANK S.A., as Collateral and
Intercreditor Agent,
By
-------------------------------------
Name:
Title:
Address:
25
295
EXHIBIT I
SUBSIDIARY GUARANTEE AGREEMENT dated as of
[ ], 1999, among each subsidiary listed on
Schedule I hereto (each such subsidiary individually,
a "Guarantor" and collectively, the "Guarantors") of
VESPER SAO PAULO S.A., a Brazilian sociedade por
acoes ("Vesper"), and CITIBANK, N.A., as collateral
and intercreditor agent (the "Collateral Agent") for
the Secured Parties.
Reference is made to the Collateral Agency and Intercreditor
Agreement dated as of December 27, 1999 (as amended, supplemented or otherwise
modified from time to time, the "Collateral Agency and Intercreditor
Agreement"), among Vesper, Vesper Holding Sao Paulo S.A. ("Holdings"), Vesper
Sao Paulo Cayman (the "Borrower"), the Administrative Agents referred to therein
and the Collateral Agent. Capitalized terms used herein and not defined herein
shall have the meanings assigned to such terms in the Collateral Agency and
Intercreditor Agreement. Each Guarantor acknowledges receipt of a true and
correct copy of the Collateral Agency and Intercreditor Agreement and agrees to
the terms thereof.
The Lenders have agreed to make Loans to the Borrower pursuant
to, and upon the terms and subject to the conditions specified in, the Common
Agreement and the Participating Credit Agreements. The obligations of the
Lenders to make Loans are conditioned on, among other things, the execution and
delivery by the Guarantors of this Agreement.
Accordingly, the Guarantors and the Collateral Agent hereby
agree as follows:
SECTION 1. Guarantee. Each Guarantor unconditionally
guarantees, jointly with the other Guarantors and severally, as a primary
obligor and not merely as a surety, the due and punctual payment of the Borrower
Obligations, when and as due, whether at maturity, by acceleration, upon one or
more dates set for prepayment or otherwise. Each Guarantor further agrees that
the Borrower Obligations may be extended or renewed, in whole or in part,
without notice to or further assent from it, and that it will remain bound upon
its guarantee notwithstanding any extension or renewal of any Borrower
Obligation.
SECTION 2. Obligations Not Waived. To the fullest extent
permitted by applicable law, each Guarantor waives presentment to,
296
demand of payment from and protest to the Borrower or any other Loan Party of
any of the Borrower Obligations, and also waives notice of acceptance of its
guarantee and notice of protest for nonpayment. The obligations of each
Guarantor hereunder shall not be affected by (a) the failure of the Collateral
Agent or any Secured Party to assert any claim or demand or to enforce or
exercise any right or remedy against Holdings, Vesper, the Borrower or any other
Guarantor under the provisions of any Support Document or any other Loan
Document or otherwise, (b) any rescission, waiver, amendment or modification of,
or any release from any of the terms or provisions of this Agreement, any other
Support Document, any other Loan Document, any Guarantee or any other agreement,
including with respect to any other Guarantor under this Agreement, or (c) the
failure to perfect any security interest in, or the release of, any of the
security held by or on behalf of the Collateral Agent or any other Secured
Party.
SECTION 3. Security. Each of the Guarantors authorizes the
Collateral Agent to (a) take and hold security for the payment of this Agreement
and the Borrower Obligations and exchange, enforce, waive and release any such
security, all in accordance with the terms of the applicable Support Document,
(b) apply such security and direct the order or manner of sale thereof as it in
its sole discretion may determine and (c) release or substitute any one or more
endorsees, other guarantors of other obligors.
SECTION 4. Guarantee of Payment. Each Guarantor further agrees
that its guarantee hereunder constitutes a guarantee of payment when due and not
of collection, and waives any right to require that any resort be had by the
Collateral Agent or any Secured Party to any of the security held for payment of
the Borrower Obligations or to any balance of any deposit account or credit on
the books of the Collateral Agent or any other Secured Party in favor of the
Borrower, Vesper, any other Loan Party or any other Person.
SECTION 5. No Discharge or Diminishment of Guarantee. The
obligations of each Guarantor hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason (other than the
indefeasible payment in full in cash of all the Borrower Obligations), including
any claim of waiver, release, surrender, alteration or compromise of any of the
Borrower Obligations, and shall not be subject to any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality or unenforceability of the Borrower Obligations or otherwise. Without
limiting the generality of the foregoing, the obligations of each Guarantor
hereunder shall not be discharged or impaired or otherwise affected by the
failure of the Collateral Agent or any Secured Party to assert any claim or
demand or to enforce any remedy under any Loan Document or any other agreement,
by any waiver or modification of any provision of any thereof, by any default,
failure or delay, wilful or otherwise, in the performance of the Borrower
Obligations, or by any other act or omission that may or might in any manner or
to any extent
2
297
vary the risk of any Guarantor or that would otherwise operate as a discharge of
each Guarantor as a matter of law or equity (other than the indefeasible payment
in full in cash of all the Borrower Obligations).
SECTION 6. Defenses of Borrower Waived. To the fullest extent
permitted by applicable law, each of the Guarantors waives any defense based on
or arising out of the defense of the Borrower, Vesper or any other Loan Party or
the unenforceability of the Borrower Obligations or any part thereof from any
cause, or the cessation from any cause of the liability of the Borrower, Vesper
or any other Loan Party, other than the final and indefeasible payment in full
in cash of all the Borrower Obligations. The Collateral Agent and the Secured
Parties may, at their election, foreclose on any security held by one or more of
them by one or more judicial or nonjudicial sales, accept an assignment of any
such security in lieu of foreclosure, compromise or adjust any part of the
Borrower Obligations, make any other accommodation with the Borrower, Vesper or
any other Loan Party or guarantor or exercise any other right or remedy
available to them against the Borrower, Vesper or any other Loan Party or
guarantor, without affecting or impairing in any way the liability of any
Guarantor hereunder except to the extent the Borrower Obligations have been
fully, finally and indefeasibly paid in cash. To the fullest extent permitted by
applicable law, each of the Guarantors waives any defense arising out of any
such election even though such election operates, pursuant to applicable law, to
impair or to extinguish any right of reimbursement or subrogation or other right
or remedy of such Guarantor against the Borrower, Vesper or any other Loan Party
or guarantor, as the case may be, or any security.
SECTION 7. Agreement to Pay; Subordination. In furtherance of
the foregoing and not in limitation of any other right that the Collateral Agent
or any Secured Party has at law or in equity against any Guarantor by virtue
hereof, upon the failure of the Borrower to pay any Borrower Obligation when and
as the same shall become due, whether at maturity, by acceleration, after notice
of prepayment or otherwise, each Guarantor hereby promises to and will forthwith
pay, or cause to be paid, to the Collateral Agent in cash the amount of such
unpaid Borrower Obligations, to be applied by the Collateral Agent in the manner
required by Article V of the Collateral Agency and Intercreditor Agreement. Upon
payment by any Guarantor of any sums to the Collateral Agent as provided above,
all rights of such Guarantor against the Borrower arising as a result thereof by
way of right of subrogation, contribution, reimbursement, indemnity or otherwise
shall in all respects be subordinate and junior in right of payment to the prior
indefeasible payment in full in cash of all the Senior Obligations, as provided
in the Subordination Agreement.
SECTION 8. Information. Each of the Guarantors assumes all
responsibility for being and keeping itself informed of the Borrower's and each
other Guarantor's financial condition and assets,
3
298
and of all other circumstances bearing upon the risk of nonpayment of the
Borrower Obligations and the nature, scope and extent of the risks that such
Guarantor assumes and incurs hereunder, and agrees that none of the Collateral
Agent or the Secured Parties will have any duty to advise any of the Guarantors
of information known to it or any of them regarding such circumstances or risks.
SECTION 9. Termination. The Guarantees made hereunder (a)
shall terminate when all the Borrower Obligations have been indefeasibly paid in
full and all Commitments shall have terminated and (b) shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any Borrower Obligation is rescinded or must otherwise be
restored by any Secured Party upon the bankruptcy or reorganization of the
Borrower, any other Loan Party, any Guarantor or otherwise.
SECTION 10. Binding Effect; Several Agreement; Assignments.
Whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and assigns of such party;
and all covenants, promises and agreements by or on behalf of the Guarantors
that are contained in this Agreement shall bind and inure to the benefit of each
party hereto and their respective successors and assigns. This Agreement shall
become effective as to any Guarantor when a counterpart hereof executed on
behalf of such Guarantor shall have been delivered to the Collateral Agent, and
a counterpart hereof shall have been executed on behalf of the Collateral Agent,
and thereafter shall be binding upon such Guarantor and the Collateral Agent and
their respective successors and assigns, and shall inure to the benefit of such
Guarantor, the Collateral Agent and the Secured Parties, and their respective
successors and assigns, except that no Guarantor shall have the right to assign
its rights or obligations hereunder or any interest herein (and any such
attempted assignment shall be void). Subject to Section 9.03 of the Collateral
Agency and Intercreditor Agreement, if all of the Equity Interests of a
Guarantor are sold, transferred or otherwise disposed of (other than to any Loan
Party) pursuant to a transaction that does not violate any Loan Document, such
Guarantor shall be released from its obligations under this Agreement without
further action. This Agreement shall be construed as a separate agreement with
respect to each Guarantor and may be amended, modified, supplemented, waived or
released with respect to any Guarantor without the approval of any other
Guarantor and without affecting the obligations of any other Guarantor
hereunder.
SECTION 11. Waivers; Amendment. (a) No failure or delay of the
Collateral Agent in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Collateral Agent hereunder
and of the Collateral Agent and the Secured Parties under the other Support
4
299
Documents are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of this Agreement or
consent to any departure by any Guarantor therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) below, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. No notice or demand on any Guarantor in any case
shall entitle such Guarantor to any other or further notice or demand in similar
or other circumstances.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into between the Guarantors with respect to which such waiver,
amendment or modification relates and the Collateral Agent, subject to any
consents required in accordance with Sections 8.01 and 11.02 of the Collateral
Agency and Intercreditor Agreement.
SECTION 12. Governing Law. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
SECTION 13. Notices. All communications and notices hereunder
shall be in writing and given as provided in Section 11.01 of the Collateral
Agency and Intercreditor Agreement. All communications and notices hereunder to
any Guarantor shall be given to it at the address for notices set forth on
Schedule I.
SECTION 14. Survival of Agreement; Severability. (a) All
covenants and agreements made by each Guarantor herein and in the certificates
or other instruments prepared or delivered in connection with or pursuant to
this Agreement or any other Support Document shall be considered to have been
relied upon by the Collateral Agent and the other Secured Parties and shall
survive the extension of credit by any Secured Party pursuant to any Loan
Document, regardless of any investigation made by any Secured Party or on their
behalf, and shall continue in full force and effect until this Agreement shall
terminate.
(b) Any provision of the Agreement held to be invalid, illegal
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.
SECTION 15. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract, and shall become effective as provided in
Section 10. Delivery of an executed
5
300
signature page to this Agreement by facsimile shall be as effective as delivery
of a manually executed counterpart of this Agreement.
SECTION 16. Rules of Interpretation. The rules of
interpretation specified in Sections 1.02 and 11.07 of the Collateral Agency and
Intercreditor Agreement shall be applicable to this Agreement.
SECTION 17. Jurisdiction; Consent to Service of Process. (a)
Each Guarantor hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of the Supreme Court of the State
of New York sitting in New York County or the United States District Court of
the Southern District of New York, and any appellate court from any thereof, in
any action or proceeding arising out of or relating to this Agreement or the
other Support Documents, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement or any other Support Document shall affect any right
that the Collateral Agent or any Secured Party may otherwise have to bring any
action or proceeding relating to this Agreement or any other Support Document
against any Guarantor or its properties in the courts of any jurisdiction.
(b) Each Guarantor hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any other
Support Document in any court referred to in paragraph (a) of this Section. Each
of the parties hereto hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 13. Each
Guarantor hereby irrevocably designates, appoints and empowers CT Corporation
System, with offices on the date hereof at 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, XX 00000, as its designee, appointee and agent to receive and accept for
and on its behalf, and in respect of its property, service of any and all legal
process, summons, notices and documents which may be served in any action or
proceeding described in (a) above. If for any reason such designee, appointee
and agent shall cease to act as such, each Guarantor agrees to designate a new
designee, appointee and agent in New York City on the terms and for the purposes
of this provision satisfactory to the Collateral Agent under
6
301
this Agreement. Nothing in this Agreement will affect the right of any party to
this Agreement to serve process in any other manner permitted by law.
SECTION 18. WAIVERS. (a) WAIVER OF JURY TRIAL. EACH PARTY
HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF
THE OTHER SUPPORT DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER
SUPPORT DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 18.
(b) WAIVER OF SOVEREIGN IMMUNITY. TO THE EXTENT THAT ANY PARTY
HERETO HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT
OR FROM ANY LEGAL PROCESS, SUCH PARTY HEREBY WAIVES SUCH IMMUNITY AND AGREES NOT
TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR OTHERWISE, IN ANY SUCH SUIT,
ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE
JURISDICTION OF THE COURTS NAMED IN SECTION 17(A), THAT IT IS IMMUNE FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION, EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF
OR ITS PROPERTY, OR ATTACHMENT EITHER PRIOR TO JUDGMENT OR IN AID OF EXECUTION,
BY REASON OF SOVEREIGN IMMUNITY, OR OTHERWISE, THAT THE VENUE OF THE SUIT,
ACTION OR PROCEEDING IS IMPROPER OR THAT THIS AGREEMENT OR ANY OTHER SUPPORT
DOCUMENT OR THE SUBJECT MATTER HEREOF OR THEREOF MAY NOT BE ENFORCED IN OR BY
SUCH COURTS.
SECTION 19. Additional Guarantors. Upon execution and delivery
after the date hereof by the Collateral Agent and a Subsidiary of an instrument
in the form of Annex 1, such Subsidiary shall become a Guarantor hereunder with
the same force and effect as if originally named as a Guarantor herein. The
execution and delivery of any instrument adding an additional Guarantor as a
party to this Agreement shall not require the consent of any other Guarantor
hereunder. The rights and obligations of each Guarantor hereunder shall remain
in full force and effect notwithstanding the addition of any new Guarantor as a
party to this Agreement.
SECTION 20. Right of Setoff. While an Event of Default has
occurred and is continuing, each Secured Party is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other Indebtedness at any time owing by such Secured
Party to or for the credit or the account of any Guarantor against any or all
the obligations of such Guarantor now or hereafter existing under this
7
302
Agreement and the other Support Documents held by such Secured Party,
irrespective of whether or not such Secured Party shall have made any demand
under this Agreement or any other Support Document and although such obligations
may be unmatured. The rights of each Secured Party under this Section 20 are in
addition to other rights and remedies (including other rights of setoff) which
such Secured Party may have.
SECTION 21. Currency. (a) If for the purpose of obtaining
judgment in any court it is necessary to convert a sum due hereunder to any
party hereunder in dollars into another currency, the parties hereto agree, to
the fullest extent permitted by applicable law, that the rate of exchange used
shall be that at which in accordance with normal banking procedures such party
could purchase dollars with such other currency in New York City on the day
which is at least two Business Days prior to the day on which final judgment is
rendered.
(b) To the fullest extent permitted by law, the obligation of
any party in respect of any sum payable hereunder by it to any other party
hereunder shall, notwithstanding any judgment in a currency (the "Judgment
Currency") other than dollars, be discharged only to the extent that on the
Business Day following receipt by such other party of any sum adjudged to be so
due in the Judgment Currency such other party may in accordance with normal
banking procedures purchase dollars with the Judgment Currency; if the amount of
dollars which could have been so purchased is less than the sum originally due
to such other party in dollars, such first party agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify such other party
against such loss, and, if the amount of dollars which could have been so
purchased exceeds the sum originally due to such other party, such other party
agrees to remit to such first party such excess.
8
303
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
EACH OF THE GUARANTORS LISTED ON
SCHEDULE I HERETO,
by
------------------------------------
Name:
Title:
CITIBANK, N.A., as Collateral and
Intercreditor Agent,
by
------------------------------------
Name:
Title:
9
304
SCHEDULE I TO THE
GUARANTEE AGREEMENT
Guarantors
10
305
ANNEX 1 TO THE
GUARANTEE AGREEMENT
SUPPLEMENT NO. dated as of [ ],
to the Guarantee Agreement dated as of [ ],
1999 (as amended, supplemented or otherwise modified
from time to time, the "Guarantee Agreement"), among
each of the subsidiaries listed on Schedule I thereto
of VESPER SAO PAULO S.A., a Brazilian sociedade por
acoes ("Vesper"), and CITIBANK, N.A., as Collateral
Agent (the "Collateral Agent") for the Secured
Parties.
A. Reference is made to the Collateral Agency and
Intercreditor Agreement (as defined in the Guarantee Agreement) and (b) the
Guarantee Agreement.
B. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Guarantee
Agreement.
C. The Guarantors have entered into the Guarantee Agreement in
order to induce the Secured Parties to make loans under the Loan Documents.
Section 19 of the Guarantee Agreement provides that additional Subsidiaries may
become Guarantors under the Guarantee Agreement by execution and delivery of an
instrument in the form of this Supplement. The undersigned Subsidiary (the "New
Guarantor") is executing this Supplement to become a Guarantor under the
Guarantee Agreement in order to induce the Secured Parties to make additional
loans pursuant to the Loan Documents and as consideration for loans previously
made under the Loan Documents.
Accordingly, the Collateral Agent and the New Guarantor agree
as follows:
SECTION 1. In accordance with Section 19 of the Guarantee
Agreement, the New Guarantor by its signature below becomes a Guarantor under
the Guarantee Agreement with the same force and effect as if originally named
therein as a Guarantor and the New Guarantor hereby agrees to all the terms and
provisions of the Guarantee Agreement applicable to it as a Guarantor
thereunder. Each reference to a "Guarantor" in the Guarantee Agreement shall be
deemed to include the New Guarantor. The Guarantee Agreement is hereby
incorporated herein by reference.
SECTION 2. The New Guarantor represents and warrants to the
Collateral Agent and the Secured Parties that this Supplement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts
(and by different parties hereto on different counterparts), each of
1
306
which shall constitute an original, but all of which when taken together shall
constitute a single contract. This Supplement shall become effective when the
Collateral Agent shall have received counterparts of this Supplement that, when
taken together, bear the signatures of the New Guarantor and the Collateral
Agent. Delivery of an executed signature page to this Supplement by telecopy
shall be as effective as delivery of a manually executed counterpart of this
Supplement.
SECTION 4. Except as expressly supplemented hereby, the
Guarantee Agreement shall remain in full force and effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
SECTION 6. Any provision of this Supplement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof and in the Guarantee Agreement; and the
invalidity of a particular provision in a particular jurisdiction shall not
invalidate such provision in any other jurisdiction.
SECTION 7. All communications and notices hereunder shall be
in writing and given as provided in Section 13 of the Guarantee Agreement. All
communications and notices hereunder to the New Guarantor shall be given to it
at the address set forth under its signature below.
SECTION 8. The New Guarantor agrees to reimburse the
Collateral Agent for its reasonable out-of-pocket expenses in connection with
this Supplement, including the reasonable fees, disbursements and other charges
of counsel for the Collateral Agent.
2
307
IN WITNESS WHEREOF, the New Guarantor and the Collateral Agent
have duly executed this Supplement to the Guarantee Agreement as of the day and
year first above written.
[Name Of New Guarantor],
by
------------------------------------
Name:
Title:
Address:
---------------------------
-------------------------
CITIBANK, N.A., as Collateral and
Intercreditor Agent,
by
------------------------------------
Name:
Title:
3
308
EXHIBIT J
FORM OF OPINION OF COUNSEL
NONE
