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EXHIBIT 10.3
COMMON TERMS AGREEMENT
AMONG
VESPER HOLDING S.A.,
XXXXXX X.X.,
ABN AMRO BANK N.V.
AS THE NORTEL FACILITY AGENT AND THE QUALCOMM/ERICSSON FACILITY AGENT,
AND
XXXXXX CORPORATION
AS THE XXXXXX FACILITY AGENT,
AND
OTHER PARI PASSU FACILITY AGENTS,
AND
LASALLE BANK NATIONAL ASSOCIATION
AS THE COLLATERAL AGENT
as of December 13, 1999
Confidential Treatment Requested. Confidential portions of this document have
been omitted and filed separately with the Securities and Exchange Commission.
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TABLE OF CONTENTS
PAGE
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ARTICLE 1. Definitions and Related Matters.......................................................................3
Section 1.1. Definitions................................................................................3
Section 1.2. Related Matters...........................................................................39
(a) Construction..............................................................................39
(b) Determinations............................................................................40
(c) Accounting Terms and Determinations.......................................................40
(d) Independence of Covenants.................................................................40
(e) Currency Conversion.......................................................................40
ARTICLE 2. Conditions to Purchase of Notes; Post Closing Matters................................................40
Section 2.1. Closing Conditions........................................................................40
(a) Closing Date..............................................................................41
(b) Certain Documents.........................................................................41
(c) No Material Adverse Change, Litigation or Change in Law...................................41
(d) Fees and Expenses Paid....................................................................41
(e) Satisfaction of Certain Conditions........................................................41
(f) Capital Contribution......................................................................41
(g) Governmental Approvals....................................................................41
(h) Security Filings..........................................................................42
(i) Licenses and Permits......................................................................42
(j) Minimum Commitment Amounts................................................................42
(k) Note Documents............................................................................42
(l) Initial Purchaser Guaranty Documents......................................................42
(m) General...................................................................................43
Section 2.2. Conditions Precedent to Financings........................................................43
(a) Notice of Borrowing or Issuance...........................................................43
(b) Representations and Warranties............................................................43
(c) No Default................................................................................43
(d) No Material Adverse Change................................................................43
(e) Prior Approval and Other Government Approvals.............................................43
(f) Satisfaction of Conditions................................................................44
Section 2.3 Post-Closing Matters......................................................................44
ARTICLE 3. Representations and Warranties.......................................................................44
Section 3.1 Organization, Powers and Good Standing....................................................44
Section 3.2 Authorization, Binding Effect, Etc........................................................44
Section 3.3 No Conflict...............................................................................45
Section 3.4 Governmental Approvals....................................................................45
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Section 3.5 Subsidiaries; HoldCo; Investments.........................................................46
(a) HoldCo....................................................................................46
(b) Subsidiaries of HoldCo....................................................................46
(c) Subsidiaries of Company...................................................................46
Section 3.6 Financial Information.....................................................................46
Section 3.7 No Material Adverse Changes; Solvency.....................................................47
Section 3.8 No Prohibition; Litigation................................................................47
Section 3.9 Applicable Law; Agreements................................................................47
Section 3.10 Taxes.....................................................................................48
Section 3.11 Investment Company; Etc...................................................................48
Section 3.12 Title to Property.........................................................................48
Section 3.13 Debt......................................................................................48
Section 3.14 Intellectual Property.....................................................................49
Section 3.15 Collateral Documents......................................................................49
Section 3.16 Environmental Condition and Liabilities...................................................49
Section 3.17 Affiliate Agreements......................................................................50
Section 3.18 Year 2000 Compliance......................................................................50
Section 3.19 Insurance.................................................................................50
Section 3.20 No Default................................................................................50
Section 3.21 Ranking of Pari Passu Financings..........................................................50
Section 3.22 Absence of Sovereign Immunity.............................................................51
Section 3.23 Absence of Certain Restrictions...........................................................51
Section 3.24 Labor Matters.............................................................................51
(a) Disputes..................................................................................51
(b) Employee Benefit Plans....................................................................51
Section 3.25 Disclosure................................................................................51
Section 3.26 Permits...................................................................................52
Section 3.27 Private Offering..........................................................................52
ARTICLE 4. Affirmative Covenants................................................................................52
Section 4.1 Reporting Requirements....................................................................52
(a) Annual Financial Reports..................................................................52
(b) Quarterly Financial Reports...............................................................53
(c) Compliance Certificate....................................................................53
(d) Operating Report..........................................................................53
(e) Updates...................................................................................54
(f) Accountants' Report.......................................................................54
(g) Management Letters........................................................................54
(h) Dollar Restrictions.......................................................................54
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(i) Notice of Default.........................................................................54
(j) Public Filings and Announcements..........................................................55
(k) Proceedings...............................................................................55
(l) Other Debt................................................................................55
(m) Environmental Proceedings.................................................................55
(n) Amendment to Charter Documents............................................................55
(o) Governmental Approvals and Material Contracts.............................................55
(p) Material Adverse Effect...................................................................56
(q) Expropriation Event.......................................................................56
(r) Other Information.........................................................................56
Section 4.2 Records and Inspection....................................................................56
Section 4.3 Corporate Existence, Maintenance of Licenses, Etc.........................................56
Section 4.4 Payment of Taxes..........................................................................57
Section 4.5 Maintenance of Properties.................................................................57
Section 4.6 Maintenance of Insurance..................................................................57
Section 4.7 Future Information........................................................................59
Section 4.8 Conduct of Business; Compliance with Law and Other
Contractual Obligations........................................................................59
Section 4.9 Construction of the Expanded Project; Replacement Xxxxxx Supply Agreement.................60
Section 4.10 Guaranties and Collateral.................................................................60
Section 4.11 Subordination of Intercompany Debt and Affiliate Agreements...............................64
Section 4.12 Interest Rate Protection..................................................................64
Section 4.13 Environmental Compliance..................................................................64
Section 4.14 Year 2000 Compliance.....................................................................65
Section 4.15 Registration of Prior Approvals, Etc......................................................65
Section 4.16 Further Assurances........................................................................65
ARTICLE 5. Negative Covenants of the Company....................................................................66
Section 5.1. Liens.....................................................................................66
Section 5.2. Debt......................................................................................67
Section 5.3. Restricted Payments.......................................................................68
Section 5.4. Investments and Acquisitions..............................................................69
Section 5.5. Operating Covenants.......................................................................69
(a) Minimum Annualized Revenues...............................................................69
(b) Subscribers...............................................................................69
Section 5.6. Financial Covenants.......................................................................70
(a) Senior Debt to Total Capitalization.......................................................70
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(b) Total Debt to Total Capitalization........................................................70
(c) Total Debt to Annualized EBITDA...........................................................70
(d) EBITDA to Interest Expense................................................................70
(e) EBITDA to Fixed Charges...................................................................70
(f) Maximum Capital Expenditures..............................................................70
Section 5.7. Restriction on Fundamental Changes........................................................71
Section 5.8. Asset Dispositions; Event of Loss.........................................................71
Section 5.9. Sales of Receivables......................................................................74
Section 5.10. Sale and Leaseback........................................................................74
Section 5.11. Transactions with Affiliates..............................................................74
Section 5.12. Prepayment of Debt........................................................................75
Section 5.13. Limitation on Contingent Obligations......................................................76
Section 5.14. Amendments of Charter Documents, Material Contracts or
Subordinated Debt Instruments..................................................................76
Section 5.15. Restrictive Agreements; Subsidiary Preferred Stock........................................77
Section 5.16. Speculative Hedging Contracts.............................................................78
Section 5.17. Payments Under or Amendments or Waivers of Affiliate Agreements...........................78
Section 5.18. Management Fees...........................................................................78
ARTICLE 6. Events of Default....................................................................................79
Section 6.1. Events of Default.........................................................................79
(a) Failure to Make Payments..................................................................79
(b) Default in Other Debt.....................................................................79
(c) Breach of Certain Covenants...............................................................79
(d) Other Defaults Under Pari Passu Financing Documents.......................................80
(e) Breach of Warranty........................................................................80
(f) Involuntary Bankruptcy; Appointment of Receiver, Etc......................................80
(g) Voluntary Bankruptcy; Appointment of Receiver, Etc........................................80
(h) Change of Control.........................................................................81
(i) Termination of Pari Passu Financing Documents.............................................81
(j) Failure of Subordination..................................................................81
(k) Judgments and Attachments; Impositions of Penalties.......................................81
(l) Loss of Licenses..........................................................................81
(m) Expropriation.............................................................................82
(n) Exchange Controls; Debt Moratorium........................................................82
(o) Abandonment of Project....................................................................82
(p) Certain Indemnification Obligations.......................................................82
(q) Failure of Vesper Cayman SPV to Make Payments.............................................82
Section 6.2. Remedies..................................................................................83
ARTICLE 7. The Collateral Agent and the Pari Passu Creditors....................................................83
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Section 7.1. Authorization and Action..................................................................83
Section 7.2. Exculpation; Collateral Agent's Reliance; Etc.............................................84
Section 7.3. Collateral Agent and Affiliates...........................................................85
Section 7.4. Pari Passu Creditor Credit Decision.......................................................85
Section 7.5. Indemnification...........................................................................85
Section 7.6. Successor Collateral Agent................................................................86
Section 7.7. Excess Payments...........................................................................86
Section 7.8. Pari Passu Creditors......................................................................86
Section 7.9. Collateral and Guaranty Matters...........................................................87
Section 7.10. Obligations of Pari Passu Creditors Several; Right to
Initiate Judicial Proceedings..................................................................88
Section 7.11. Co-Agents.................................................................................89
Section 7.12. Paying Agency Agreement...................................................................89
ARTICLE 8. Certain Mandatory Prepayments........................................................................89
Section 8.1 Mandatory Prepayments.....................................................................89
(a) Asset Dispositions and Events of Loss.....................................................89
(b) Excess Cash Flow..........................................................................89
(c) Equity Offerings..........................................................................89
(d) Debt Financings...........................................................................90
(e) Notice and Application of Mandatory Prepayments; Interest.................................90
(f) Funding Gap Financings....................................................................90
Section 8.2. Manner of Payment of Mandatory Prepayments................................................90
ARTICLE 9. Intercreditor Matters................................................................................92
Section 9.1. Equal Ranking of Liens on Common Collateral, Etc..........................................92
(a) Equal Ranking of Liens....................................................................92
(b) Certain Agreements to Effectuate Provisions Hereof........................................93
(c) Representations and Warranties of Pari Passu Creditors....................................93
(d) Limitation on Other Pari Passu Debt, Etc..................................................94
(e) Intercreditor Agreement Precedence........................................................94
Section 9.2. Notices of Default and Acceleration.......................................................95
(a) Notice of Default.........................................................................95
(b) Notice of Acceleration, Mandatory Repurchase or Mandatory
Partial Repurchase....................................................................95
(c) Failure to Provide Notice.................................................................96
Section 9.3. Foreclosure Actions and Other Realizations................................................96
(a) Instruction to Commence Foreclosure Action................................................96
(b) Notice of Instruction to Commence Foreclosure Action......................................96
(c) Reconsideration Period....................................................................96
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(d) Polling of Pari Passu Creditors; Waiver of Reconsideration Period.........................96
(e) Commencement of Foreclosure Action........................................................97
(f) Rescission and Annulment of Instruction...................................................97
Section 9.4. Voting and Polling Procedures.............................................................98
(a) Polling of Pari Passu Creditors...........................................................98
(b) Polling Procedures........................................................................98
(c) Binding Effect............................................................................99
(d) Swap Lenders..............................................................................99
Section 9.5. Direction of Foreclosure Action...........................................................99
Section 9.6 Allocation of Mandatory Prepayments; Application of Cash
Proceeds from Prepayment and Realization; Application of Set
Off............................................................................................99
(a) Allocation of Mandatory Prepayments.......................................................99
(b) Allocation of Cash Proceeds of Realization or Set-Off....................................100
Section 9.7. Payments Set Aside.......................................................................101
Section 9.8. Modifications, Amendments, Waivers and Consents of Pari Passu Financing
Documents.....................................................................................101
(a) Writing..................................................................................101
(b) Voting Requirements for Amendments to Pari Passu Financing Documents.....................102
(c) No Waiver................................................................................104
Section 9.9 Effect on Initial Purchaser Guaranties...................................................105
ARTICLE 10. Miscellaneous......................................................................................105
Section 10.1. Expenses................................................................................105
Section 10.2. Indemnity...............................................................................105
Section 10.3. Cumulative Remedies; Failure or Delay...................................................107
Section 10.4. Notices, Etc............................................................................107
Section 10.5. Taxes...................................................................................107
Section 10.6. Currency Equivalents; Judgment Currency.................................................108
Section 10.7. Confidentiality.........................................................................108
Section 10.8. Governing Law...........................................................................109
Section 10.9. Choice of Forum.........................................................................109
Section 10.10. Setoff..................................................................................110
Section 10.11 Nature of Vesper Cayman SPV's Obligations; Removal of Paying Agent......................110
Section 10.12. Headings................................................................................111
Section 10.13. Severability............................................................................111
Section 10.14. Survival of Agreements, Representations and Warranties..................................111
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Section 10.15. Execution in Counterparts...............................................................111
Section 10.16. Complete Agreement; Successors and Assigns; Third-Party Beneficiaries...................112
Section 10.17. No Fiduciary Duties or Partnership; Limitation of Liability, Etc........................112
Section 10.18. No Reliance on Margin Stock.............................................................112
Section 10.19. Waiver of Immunity......................................................................113
Section 10.20. English Language........................................................................113
Section 10.21. Waiver of Trial by Jury.................................................................114
Common Terms Agreement
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EXHIBITS
Exhibit A-1 Form of Nortel Note Purchase Agreement
Exhibit A-2 Form of Qualcomm/Ericsson Note Purchase Agreement
Exhibit A-3 Form of Xxxxxx Note Purchase Agreement
Exhibit B Form of HoldCo Guaranty
Exhibit C-1A Form of Company Equipment Pledge Agreement
Exhibit C-1B Form of Company Receivables Pledge Agreement
Exhibit C-1C Form of Company Contracts Pledge Agreement
Exhibit C-1D Form of Cash Collateral Pledge Agreement
Exhibit C-1E Form of Company Stock Pledge Agreement
Exhibit C-1F Form of Mortgage
Exhibit C-2 Form of HoldCo Stock Pledge Agreement
Exhibit C-3A Form of Shareholder Pledge Agreement
Exhibit C-3B Form of Brazilian Shareholder Pledge Agreement
Exhibit C-4 Form of Consent and Waiver
Exhibit C-5 Form of Consent to Assignment
Exhibit D Form of Accession Agreement
Exhibit E Form of Intercompany Debt Subordination Agreement
Exhibit F-1 Form of Secretary's Certificate
Exhibit F-2 Form of Officers' Certificate
Exhibit F-3 Form of Compliance Certificate
Exhibit F-4 Form of Solvency Certificate
Exhibit G-1 Form of Legal Opinion of Company Parties' US Counsel
Exhibit G-2 Form of Legal Opinion of Company Parties' Local Counsel
(for Company Parties not formed under the laws of Brazil)
Exhibit G-3 Form of Legal Opinion of Company Parties' Brazilian
Counsel
Exhibit G-4 Form of Legal Opinion of California/Colorado Local Counsel
Exhibit H Form of Exchange Debt Agreement
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SCHEDULES
Schedule 1.1(a) Agents' Information
Schedule 1.1(b) Existing Debt
Schedule 1.1(c) Existing Liens
Schedule 1.1(d) Acceptable Brazilian Depository Institutions
Schedule 1.1(e) Permitted Transferees
Schedule 2.1 Closing Documents
Schedule 2.3 Post-Closing Matters
Schedule 3.1(a) Organization of the Borrower Parties
Schedule 3.5(b) Capitalization Subsidiaries, HoldCo
Schedule 3.8 Material Litigation
Schedule 3.16 Environmental Condition
Schedule 3.17 Affiliate Agreements
Schedule 3.23 Certain Restrictions
Schedule 3.26 Permits
Schedule 4.1(d) Operating Reports
Schedule 5 Financial and Operating Covenants
Schedule 10.4 Company Information
Common Terms Agreement
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COMMON TERMS AGREEMENT
This COMMON TERMS AGREEMENT, dated as of December 13, 1999 (as amended from
time to time, the "Agreement"), is by and among:
1) VESPER HOLDING S.A., a sociedade anonima organized under the laws of
Brazil ("HoldCo");
2) XXXXXX X.X., a sociedade anonima organized under the laws of Brazil
and a wholly-owned subsidiary of HoldCo (the "Company");
3) ABN AMRO BANK N.V. ("ABN AMRO"), as Agent for itself, NORTEL NETWORKS
CORPORATION, a Canadian CORPORATION ("Nortel"), as initial purchaser
under, and the other purchasers (the "Nortel Purchasers") from time to
time party to the "Nortel Note Purchase Agreement" referred to below
(in such capacity, together with its successors in such capacity, the
"Nortel Facility Agent");
4) ABN AMRO, as Agent for itself and XXXXXXXX XXXXXXXXXXXX, a Delaware
corporation ("Qualcomm"), as initial purchasers under, and the other
purchasers (the "Qualcomm/Ericsson Purchasers") from time to time
party to the "Qualcomm/Ericsson Note Purchase Agreement" referred to
below (in such capacity, together with its successors in such
capacity, the "Qualcomm/Ericsson Facility Agent");
5) XXXXXX CORPORATION, a Delaware corporation, ("Xxxxxx"), as Agent for
itself, as initial purchaser under, and the other purchasers (the
"Xxxxxx Purchasers") from time to time party to the "Xxxxxx Note
Purchase Agreement" referred to below (in such capacity, together with
its successors in such capacity, the "Xxxxxx Facility Agent" and
together with the Nortel Facility Agent and the Qualcomm/Ericsson
Facility Agent, the "Initial Facility Agents");
6) each Agent under the Other Pari Passu Financing Agreements (as defined
below) that may hereafter become party hereto by executing an
Accession Agreement, for themselves and the lenders and purchasers
from time to time party to the Other Pari Passu Financing Agreements
(in such capacity, together with its respective successors in such
capacity, the "Other Pari Passu Facility Agents"); and
7) LASALLE BANK NATIONAL ASSOCIATION, as common administrative and
collateral agent for itself, the Nortel Facility Agent, the Nortel
Purchasers, the Qualcomm/Ericsson Facility Agent, the
Qualcomm/Ericsson Purchasers, the Xxxxxx Facility Agent, the Xxxxxx
Purchasers, the Other Pari Passu Facility Agents, and the other Pari
Passu Creditors (together with its successors in such capacities, the
"Collateral Agent").
Common Terms Agreement
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RECITALS
A. The Company desires to issue notes to finance, among other things, the
purchase price of telecommunications equipment and services to be supplied by
(1) Nortel pursuant to the Nortel Supply Agreement (as defined below), (2)
Ericsson Telecomunicacoes S.A., a sociedade anonima organized under the laws of
Brazil ("Ericsson Brazil"), pursuant to the Ericsson Supply Agreement (as
defined below) and (3) Xxxxxx as a subcontractor under the Nortel Supply
Agreement pursuant to the Xxxxxx Supply Agreement (as defined below), in each
case, in connection with the initial buildout, ownership and operation of a
switched fixed telephony network covering the 51 cities with populations greater
than 200,000 in Region 1 of Brazil, as designated by the Instrument of
Authorization for Operation of a Switched Fixed Telephone Service for the mode
LOCAL, and the Instrument of Authorization for Operation of a Switched Fixed
Telephone Service for the mode NATIONAL LONG DISTANCE OF INTRA-REGIONAL SCOPE,
each entered into by and between the Agencia Nacional de Telecomunicacoes
(National Telecommunications Agency) ("Anatel"), and the Company, under its
prior name "Canbra Telefonica S.A." on February 4, 1999 (as such Instruments may
be amended, and including the Data Licenses (as defined below), the "Mirror
Authorizations") (collectively, the "Project") and other Permitted Businesses
(as defined below);
B. Nortel, Qualcomm, ABN AMRO and Xxxxxx, as Initial Purchasers, have
agreed to purchase such notes on the terms and conditions set forth in the
Nortel Note Purchase Agreement, the Qualcomm/Ericsson Note Purchase Agreement
and the Xxxxxx Note Purchase Agreement, respectively;
C. In the case of Nortel and Xxxxxx, in order to induce certain
institutional note purchasers to assume certain of the rights and obligations of
Nortel and Xxxxxx under their respective Note Purchase Agreements and, in the
case of, TELEFONAKTIEBOLAGET LM ERICSSON (PUBL.), a Swedish company
("Ericsson"), in order to induce ABN AMRO to be an Initial Purchaser under the
Qualcomm/Ericsson Note Purchase Agreements and related commitment letters, each
of Nortel, Ericsson and Xxxxxx has entered into or may hereafter enter into a
guaranty or has provided or may hereafter provide other credit enhancement or
arrangements of certain of the obligations of the Company to the Purchasers
under the respective Note Purchase Agreement and related Note Documents (each
such guaranty, enhancement or arrangement being an "Initial Purchaser Guaranty")
in favor of such institutional note purchasers or ABN AMRO, as the case may be;
and
D. To induce the Initial Purchasers, the other Purchasers and the Other
Pari Passu Creditors to provide financing for the Project, the Company is, among
other things, (1) entering into this Agreement, (2) entering into each of the
Note Purchase Agreements (as defined below), (3) entering into each of the
Collateral Documents (as defined below) and (4) entering into each of the Supply
Agreements (as defined below).
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto hereby agree as follows:
Common Terms Agreement
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ARTICLE 1.
DEFINITIONS AND RELATED MATTERS
SECTION 1.1. DEFINITIONS. The following terms with initial capital letters
have the following meanings:
"ACCESSION AGREEMENT" means an Accession Agreement substantially in
the form of Exhibit D hereto (or, if there is no such Exhibit on the date
hereof, acceptable in form and substance to the Initial Purchasers or, after the
Initial Purchaser Release Date with respect to all Vendor Parties, the
Collateral Agent), as amended from time to time.
"ACQUISITION" means (whether by purchase, exchange, issuance of
Capital Stock, merger, reorganization or any other method) (i) any acquisition
by the Company or any of its Subsidiaries of any other Person, which Person
would then, under US GAAP, become consolidated with the Company or any such
Subsidiary, or (ii) any acquisition by the Company or any of its Subsidiaries of
all or any substantial amount of the assets of any other Person or any division
of any other Person.
"ADDITIONAL ASSETS" means, with respect to any Asset Disposition,
long-term properties or assets that are used or will be used in the operation of
the Expanded Project.
"AFFECTED PAYMENT" is defined in Section 4.1(h).
"AFFILIATE" means, with respect to any Person (i) any other Person
that, directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such first Person and (ii) when
used with reference to any natural Person, such Person's spouse, parents and
descendants (whether by blood or adoption, and including stepchildren) and the
spouses of such Persons. The term "control" means the possession, directly or
indirectly, of the power, whether or not exercised, to direct or cause the
direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise, and the terms
"controlled" and "common control" have correlative meanings. Notwithstanding the
foregoing, (x) each Subsidiary of each Shareholder Party shall be deemed to be
an Affiliate of the Company, (y) in no event shall Qualcomm, in its capacity as
a Purchaser, be deemed to be an Affiliate of the Company, and (z) in no event
shall any Pari Passu Creditor Party or any Affiliate of any Pari Passu Creditor
Party be deemed to be an Affiliate of the Company solely by virtue of the pledge
of any Capital Stock to the Collateral Agent or the making of loans or purchases
of notes pursuant to the Pari Passu Financing Documents and the related Note
Documents.
"AFFILIATE AGREEMENT" means any tax sharing, management, servicing or
other agreement (other than an employment agreement entered into in the ordinary
course of business) pursuant to which any Shareholder, any Parent Shareholder,
HoldCo or any other Affiliate of the Company is entitled to the payment from the
Company of taxes, fees, expenses, indemnities or other amounts; Affiliate
Agreement shall include the Technical Services Agreements, the Know-How
Agreement and the Secondment Agreement, but shall specifically exclude the
Supply Agreements and the Qualcomm/Ericsson Note Purchase Agreement and the Note
Documents related thereto.
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"AFFILIATE TRANSACTION" is defined in Section 5.11(a).
"AGENT" means any of the Facility Agents and the Collateral Agent.
"AGREEMENT" is defined in the Preamble and includes all Schedules and
Exhibits.
"ANATEL" is defined in the Recitals.
"ANNUALIZED EBITDA" means, at any date, EBITDA for the two preceding
Fiscal Quarters ended most recently prior to such date for which financial
information is available, multiplied by two.
"ANNUALIZED REVENUES" means, at any date, the total revenues of the
Company and its Subsidiaries for the two preceding Fiscal Quarters ended most
recently prior to such date for which financial information is available,
determined on a consolidated basis in accordance with GAAP, multiplied by two.
"APPLICABLE LAW" means all applicable provisions of all (i)
constitutions, treaties, statutes, laws, rules, regulations and ordinances of
any Governmental Authority, (ii) Governmental Approvals, and (iii) orders,
decisions, judgments, awards and decrees of any Governmental Authority
(including common law and principles of public policy).
"ASSET DISPOSITION" means any sale, lease or other disposition
(including by way of a Sale and Leaseback Transaction, license or sublicense or
by way of the issuance, sale or other transfer of any Capital Stock of any
Subsidiary, and including any Event of Loss), in any single transaction or
series of related transactions, by the Company or any of the Subsidiaries, of
any of its assets, if the aggregate amount of Net Cash Proceeds from the sale or
other disposition of such asset or assets, together with the Net Cash Proceeds
of any other disposition of assets of the Company or any of the Subsidiaries, in
a series of related transactions, exceeds [***] in the aggregate (provided that,
if such consideration in any such transaction or transactions exceeds such
amount, the entire amount of such consideration shall be subject to Section
5.8); except that "Asset Disposition" shall not include (A) any disposition of
assets or issuance of Capital Stock by any Subsidiary to the Company or a
Subsidiary Guarantor, provided in the case of any such disposition to a
Subsidiary Guarantor, any Investment resulting from such disposition complies
with Section 5.4, (B) a merger or consolidation permitted pursuant to Section
5.7, (C) sales of inventory held or purchased for sale to others in each case in
the ordinary course of business, (D) dispositions of equipment that has become
obsolete, worn out or surplusage, provided that the aggregate amount of Net Cash
Proceeds from dispositions pursuant to this clause (D) may not exceed (I) prior
to December 31, 2002, [***] in any Fiscal Year and (II) after December 31, 2002,
[***] in any Fiscal Year, (E) the issuance of Capital Stock on a pro rata basis
in connection with increases of the capital of Subsidiaries, or (F) any Cash
Equivalent permitted to be held pursuant to Section 5.4. Notwithstanding the
foregoing, to the extent that any disposition of an asset that would not
otherwise be an Asset Disposition for purposes hereof is treated as an asset
disposition giving rise to a requirement to make a payment (or to make an offer
to purchase) pursuant to any other agreement or document pursuant to which Debt
is outstanding, such disposition shall, notwithstanding any other provision of
this Agreement, be an Asset Disposition hereunder.
[*] 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.
Common Terms Agreement
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"ASSET DISPOSITION PREPAYMENT AMOUNT" is defined in Section 5.8(a).
"ASSIGNMENT AND ACCEPTANCE" for each Pari Passu Creditor is defined in
the respective Pari Passu Financing Agreement.
"ATTRIBUTABLE DEBT" means, with respect to an Operating Lease included
in any Sale and Leaseback Transaction at the time of determination, the present
value (discounted at the interest rate implicit in the lease or, if not known,
at the Company's incremental borrowing rate) of the obligations of the lessee of
the property subject to such lease for rental payments during the remaining term
of the lease included in such transaction, including any period for which such
lease has been extended or may, at the option of the lessor, be extended, or
until the earliest date on which the lessee may terminate such lease without
penalty or upon payment of penalty (in which case the rental payments shall
include such penalty), after excluding from such rental payments all amounts
required to be paid on account of maintenance and repairs, insurance, taxes,
assessments, water, utilities and similar charges.
"AVERAGE CONVERSION FACTOR" means, for any period, a fraction, the
numerator of which is the sum of the PTAX 800 Rate for each day on which such
rate is available in such period and the denominator of which is the number of
days on which such rate is available in such period.
"BANKRUPTCY LAW" means any Brazilian, United States federal or state
or any other bankruptcy, insolvency, receivership or similar law now or
hereafter in effect.
"BCI" means Xxxx Canada International Inc., a Canadian corporation.
"BCI TECHNICAL SERVICES AGREEMENT" means that certain Technical
Services Agreement, dated May 27, 1999, by and between BCI and the Company, as
amended from time to time as permitted hereby.
"BOARD OF DIRECTORS" means, with respect to any Person, the board of
directors (or any similar governing body) of such Person or, unless the context
otherwise requires, any authorized committee of the board of directors (or such
body) of such Person. Unless otherwise specified, "Board of Directors" means the
Board of Directors of the Company, which shall mean the Advisory Committee of
HoldCo.
"BRAZILIAN SHAREHOLDER PLEDGE AGREEMENT" means the Brazilian
Shareholder and Affiliate Pledge Agreement among (i) the Company, (ii) the
Brazilian Shareholders, HoldCo and their Brazilian Affiliates who have extended
Shareholder Loans or other loans to the Company or any Subsidiary, and (iii) the
Collateral Agent, substantially in the form of Exhibit C-3B hereto (or, if there
is no such Exhibit on the date hereof, acceptable in form and substance to the
Initial Purchasers or, after the Initial Purchaser Release Date with respect to
all Vendor Parties, the Collateral Agent), as amended from time to time.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or other
day on which banks in New York, New York, Rio de Janeiro, Brazil or Chicago,
Illinois are authorized or obligated to close.
Common Terms Agreement
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"BUSINESS PLAN" means the Company's business plan dated August 9, 1999
adjusted to include the "Fiber Case" dated October 25, 1999, together with the
related marketing and network construction plans and budget and buildout
schedule for the Project, including financial projections of the Company and the
Subsidiaries for the ten-year period beginning on the Closing Date, certified by
the Chief Financial Officer of the Company as representing the Company's best
estimate of the Company's consolidated financial position and results as of the
dates and for the periods indicated, having been prepared by or under the
supervision of the Chief Financial Officer of the Company on the basis of
reasonable assumptions and in good faith, in each case as updated through the
date hereof.
"CAPITAL CONTRIBUTION AGREEMENT" means, collectively, (i) that certain
Capital Contribution Agreement dated as of the date hereof, among HoldCo, the
Shareholders, the Collateral Agent and the Company, and (ii) the related support
obligations of the Parent Shareholders, each as amended from time to time.
"CAPITAL EXPENDITURES" means, for any period and without duplication,
additions to property, plant and equipment and other expenditures (whether paid
in cash or accrued and including Capitalized Leases entered into during the
period) of the Company and its Subsidiaries, on a consolidated basis, during
such period, with respect to property, plant and equipment (other than repairs)
that are required to be capitalized under GAAP on the consolidated balance sheet
of the Company. For purposes of determining the amount of Capital Expenditures,
any Capital Expenditures denominated in Reais shall be converted into Dollars by
applying the Average Conversion Factor for the relevant period to the aggregate
amount thereof.
"CAPITAL STOCK" means, with respect to any Person, all (i) shares,
interests, participations or other equivalents (howsoever designated) of capital
stock and other equity interests of such Person and (ii) rights (other than debt
securities convertible into capital stock or other equity interests), warrants
or options to acquire any such capital stock or other equity interests.
"CAPITALIZED LEASES" means all leases of the Company and its
Subsidiaries of real or personal property that are required to be capitalized
under US GAAP on the consolidated balance sheet of the Company. The amount of
any Capitalized Lease shall be the capitalized amount thereof determined on a
consolidated basis in accordance with US GAAP.
"CASH COLLATERAL ACCOUNT" means each cash collateral account
maintained with the Collateral Agent pursuant to the Capital Contribution
Agreement or pursuant to Section 5.8(a)(v) or (b)(i) hereof, or pursuant to any
other provision of this Agreement or the Pari Passu Financing Documents, and
with respect to which a first priority security interest has been granted in and
to all credit rights of the Company against the depository financial
institution, and all Cash Equivalents from time to time contained therein, in
each case in favor of the Collateral Agent pursuant to the Cash Collateral
Pledge Agreement.
"CASH COLLATERAL PLEDGE AGREEMENT" means the Cash Collateral Account
and Cash Equivalents Pledge Agreement between the Company and the Collateral
Agent (including any custodial, escrow or similar agreement acceptable in form
and substance to the Collateral Agent entered into in connection therewith among
the Company, the Collateral Agent and the
Common Terms Agreement
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17
depositary designated thereunder) in substantially the form of Exhibit C-1D
hereto (or, if such agreement relates to an account maintained in the United
States or if there is no such Exhibit on the date hereof, acceptable in form and
substance to the Initial Purchasers or, after the Initial Purchaser Release Date
with respect to all Vendor Parties, the Collateral Agent), as amended from time
to time.
"CASH EQUIVALENTS" means (a) Dollars and Reais; (b) marketable direct
obligations issued or unconditionally guarantied by the United States Government
or issued by any agency thereof and backed by the full faith and credit of the
United States, in each case maturing within one year from the date of
acquisition thereof; (c) marketable direct obligations issued or unconditionally
guarantied by the Government of Brazil, the Central Bank or any agency thereof
and backed by the full faith and credit of the Government of Brazil, in each
case maturing within ninety (90) days from the date of acquisition thereof; (d)
commercial paper issued by United States corporations having, at the time of
acquisition, a rating of at least A-1 or better or P-1 or better, by S&P or
Xxxxx'x; (e) demand deposits, certificates of deposit, other time deposits, and
bankers' acceptances maturing within one year from the date of acquisition
thereof issued by any bank operating under the laws of the United States or any
state thereof or the District of Columbia that has combined capital and surplus
of not less than $500,000,000; (f) demand deposits, certificates of deposit,
other time deposits, and bankers' acceptances maturing within 90 days from the
date of acquisition thereof issued by any bank listed on Schedule 1.1(d) hereto;
(g) repurchase agreements with a term of less than 30 days with respect to any
of the securities of the types described in the foregoing clauses (b), (c) and
(d); (h) institutional money market funds organized under the laws of the United
States of America or any state thereof or the laws of Brazil (I) substantially
all of whose assets are securities of the types described in the foregoing
clauses (b), (c), (d), (e) and (f) or (II) substantially all of whose assets are
securities of the types described in the foregoing clauses (b), (c), (d), (e)
and (f) and floating-rate securities with a maturity of less than two years
consisting of marketable direct obligations issued or unconditionally guarantied
by the Government of Brazil, the Central Bank, any agency thereof and backed by
the full faith and credit of the Government of Brazil, provided that the
aggregate amount of Cash Equivalents under this clause (h)(II) shall not at any
time exceed (i) prior to or on December 31, 2002, [***] (or, with respect to a
date prior to September 30, 2000, [***], to the extent the excess over [***]
represents Funded Equity contributed to the Company prior to December 31, 1999
and held on the date of such determination in a Cash Collateral Account) or (ii)
after December 31, 2002, [***]; (i) Investments permitted by Section 2.2(a) of
the Nortel Note Purchase Agreement or the Qualcomm/Ericsson Note Purchase
Agreement; and (j) other Investments from time to time approved by the Required
Pari Passu Creditors in writing; provided, however, that (x) to the extent
provided in Section 4.10 or the Collateral Documents, each Cash Equivalent is
subject to a first priority security interest in favor of the Collateral Agent
for the benefit of the Secured Parties pursuant to the Collateral Documents, and
(y) at the Closing Date, the Collateral Agent has received a legal opinion to
the effect that Cash Equivalents of such type are subject to a first priority
security interest in favor of the Collateral Agent for the benefit of the
Secured Parties pursuant to the Collateral Documents, which opinion shall be in
form and substance, and rendered by United States and Brazilian counsel for the
Company, reasonably satisfactory to the Initial Purchasers.
[*] 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.
Common Terms Agreement
7
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"CENTRAL BANK" means the Banco Central do Brasil, the central bank of
Brazil, or any successor.
"CERTIFICATE OF REGISTRATION" is defined in Section 3.4.
"CHANGE OF CONTROL" means the occurrence of any of the following
events: (i) BCI (or a Permitted Transferee) ceases to control, directly or
indirectly, at least [***] of the votes of all classes of Voting Stock of the
Company and the voting, management and designation rights incident to such
Voting Stock as provided by the Shareholder Agreement, as in effect as of the
Closing Date and as amended pursuant to the Shareholder Consent and Agreement,
(ii) BCI (or a Permitted Transferee) ceases to own, directly or indirectly, at
least [***] of the economic interests in the outstanding capital stock of
HoldCo, provided however that such requirement shall not apply to BCI (or a
Permitted Transferee) on any date on which BCI (or a Permitted Transferee) owns
capital stock of HoldCo, the proceeds of which were contributed to the Company
as Qualifying Funded Equity and were equal to or greater than [***]; (iii)
HoldCo ceases to own, directly or indirectly, [***] of the Capital Stock of the
Company; (iv) BCI ceases to be obligated to provide the technical services set
forth in the BCI Technical Services Agreement, the Know-How Agreement or the
Secondment Agreement, in any such case, prior to the expiration of the term
thereof, provided however that such requirement shall not apply in the event (x)
BCI's obligations under the BCI Technical Services Agreement, the Know-How
Agreement and the Secondment Agreement are assigned to a Permitted Transferee or
(y) substantially similar operational agreements are entered into between the
Company and a Permitted Transferee; or (v) BCI (or a Permitted Transferee)
ceases to have the right to designate the Chief Executive Officer of the Company
or HoldCo.
"CLOSING DATE" means the date on which all conditions set forth in
Section 2.1 have been satisfied or waived, but in no event later than December
17, 1999.
"CO-AGENT" means any Pari Passu Creditor or other Person designated
from time to time by any Pari Passu Facility Agent to act as the managing agent,
syndication agent, documentation agent, co-agent, co-arranger or in a similar
capacity with respect to any Pari Passu Financing Agreement pursuant to the
terms thereof.
"COLLATERAL" means all of (i) the Company's assets, including all real
and personal property, accounts, deposit accounts, securities accounts,
investment property, equipment, inventory, contracts (including the Capital
Contribution Agreement), surety and performance bonds, rights of way, easements,
Intellectual Property Rights and related licenses; (ii) all of the assets of the
Subsidiaries other than Vesper Cayman SPV (if any); (iii) to the extent
permitted by Applicable Law (as such law may be modified or amended from time to
time), the Mirror Authorizations and any other Governmental Approval held by the
Company or any of the Subsidiaries from time to time and any termination
payments received in respect thereof (but in any event including all termination
payments and other proceeds of the Mirror Authorizations); (iv) all shares of
Capital Stock of the Subsidiaries other than Vesper Cayman SPV (if any); (v) all
shares of Capital Stock of the Company; (vi) all Intercompany Debt; (vii) all
rights of the Shareholders or their Affiliates in and to the Shareholder Loans;
(viii) all cash (and related credit rights) and Cash Equivalents held from time
to time in the Proceeds Accounts; and (ix) all proceeds and products of the
foregoing, subject (as to all of the foregoing) to such exclusions as
[*] 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.
Common Terms Agreement
8
19
are contained in the Collateral Documents (such exclusions to include any
equipment securing Purchase Money Debt otherwise permissible hereunder).
"COLLATERAL AGENT" is defined in the Preamble. Unless the context
otherwise requires, "Collateral Agent" includes any Proceeds Collateral Agent
when referring to the Proceeds Account Pledge Agreement or any Collateral
thereunder.
"COLLATERAL AGENT'S LETTER" means that certain letter dated as of the
date hereof between the Company and the Collateral Agent, as amended from time
to time.
"COLLATERAL AGENT'S ACCOUNT" means the account of the Collateral Agent
identified as such in Schedule 1.1(a), or such other account as the Collateral
Agent may hereafter designate by notice to the Company, the Paying Agent and
each Pari Passu Facility Agent.
"COLLATERAL AGENT'S OFFICE" means the office of the Collateral Agent
identified as such in Schedule 1.1(a), or such other office as the Collateral
Agent may hereafter designate by notice to the Company, the Paying Agent and
each Pari Passu Facility Agent.
"COLLATERAL DOCUMENTS" means the Pari Passu Collateral Documents and
the Proceeds Account Pledge Agreements.
"COMMITMENTS" means the commitments of the Purchasers under the
respective Note Purchase Agreements as set forth therein and as increased or
reduced from time to time.
"COMMON COLLATERAL" means the portion of the Collateral that secures
both the Obligations under the Note Documents and the Pari Passu Obligations
under the Other Pari Passu Financing Documents, but shall not include the cash
(or related credit rights) or Cash Equivalents held in any Proceeds Accounts.
"COMPANY" is defined in the Preamble.
"COMPANY CONTRACTS PLEDGE AGREEMENT" means the Company Contracts
Pledge Agreement between the Company and the Collateral Agent in substantially
the form of Exhibit C-1C hereto (or, if there is no such Exhibit on the date
hereof, acceptable in form and substance to the Initial Purchasers or, after the
Initial Purchaser Release Date with respect to all Vendor Parties, the
Collateral Agent), as amended from time to time.
"COMPANY EQUIPMENT PLEDGE AGREEMENT" means the Company Equipment
Pledge Agreement between the Company, the Collateral Agent and the depositary
designated thereunder in substantially the form of Exhibit C-1A hereto (or, if
there is no such Exhibit on the date hereof, acceptable in form and substance to
the Initial Purchasers or, after the Initial Purchaser Release Date with respect
to all Vendor Parties, the Collateral Agent), as amended from time to time.
"COMPANY PARTY" means such of the Company, Vesper Cayman SPV, the
Guarantors, the Shareholders, the Parent Shareholders, HoldCo and each other
Person (other than a Pari Passu Creditor Party) as is party to a Pari Passu
Financing Document.
Common Terms Agreement
9
20
"COMPANY RECEIVABLES PLEDGE AGREEMENT" means the Company Receivables
Pledge Agreement between the Company and the Collateral Agent in substantially
the form of Exhibit C-1B hereto (or, if there is no such Exhibit on the date
hereof, acceptable in form and substance to the Initial Purchasers or, after the
Initial Purchaser Release Date with respect to all Vendor Parties, the
Collateral Agent), as amended from time to time.
"COMPANY SECURITY AGREEMENTS" means, collectively, the Company
Equipment Pledge Agreement, the Company Receivables Pledge Agreement, the
Company Contracts Pledge Agreement, the Company Stock Pledge Agreement and the
Cash Collateral Pledge Agreement.
"COMPANY STOCK PLEDGE AGREEMENT" means the Company Stock Pledge
Agreement between the Company and the Collateral Agent, in a form substantially
similar to the HoldCo Stock Pledge Agreement, with such modifications thereto as
the Collateral Agent may reasonably determine are necessary in order to reflect
the circumstance that such agreement relates to the Company rather than to
HoldCo, as amended from time to time.
"COMPLIANCE CERTIFICATE" is defined in Section 4.1(c).
"CONSENT AND WAIVER" means any consent by a lessor of premises used by
the Company or any Subsidiary Guarantor to the assignment of such lease to the
Collateral Agent for the benefit of the Secured Parties, in substantially the
form of Exhibit C-4 hereto (or, if there is no such Exhibit on the date hereof,
acceptable in form and substance to the Initial Purchasers or, after the Initial
Purchaser Release Date with respect to all Vendor Parties, the Collateral
Agent), as amended from time to time.
"CONSENT TO ASSIGNMENT" means any Consent to Assignment relating to a
Material Contract by and among the Company Party which is a party to such
Material Contract, the other party or parties to such Material Contract, and the
Collateral Agent, in substantially the form of Exhibit C-5 (of, if there is no
such Exhibit on the date hereof, acceptable in form and substance to the Initial
Purchasers or, after the Initial Purchaser Release Date with respect to all
Vendor Parties, the Collateral Agent), as amended from time to time.
"CONTINGENT OBLIGATION" means, as to any Person, any obligation,
direct or indirect, contingent or otherwise, of such Person (i) with respect to
any Debt or other obligation of another Person, including any direct or indirect
guaranty of such Debt (other than any endorsement for collection in the ordinary
course of business) or any other direct or indirect obligation, by agreement or
otherwise, to purchase or repurchase any such Debt or obligation or any security
therefor, or to provide funds for the payment or discharge of any such Debt or
obligation (whether in the form of loans, advances, stock purchases, capital
contributions or otherwise), (ii) to provide funds to maintain the financial
condition of any other Person, or (iii) otherwise to assure or hold harmless the
holders of Debt or other obligations of another Person against loss in respect
thereof, or (iv) under Hedging Contracts; provided that the foregoing shall not
include reimbursement and other similar obligations in respect of letters of
credit, bankers' acceptances and other similar instruments issued for the
benefit of such Person. The amount of any Contingent Obligation under clause (i)
or (ii) shall be the lesser of (a) an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Contingent Obligation
is made and (b) the maximum amount for which such Person may be
Common Terms Agreement
10
21
liable pursuant to the terms of the instrument embodying such Contingent
Obligation, unless such primary obligation and the maximum amount for which such
Person may be liable are not stated or determinable, in which case the amount of
such Contingent Obligation shall be such Person's maximum reasonably anticipated
liability in respect thereof. The amount of any Contingent Obligation under
clause (iv) shall be the amount (not less than zero) that would be payable by
such Person to the other party or parties to such Contingent Obligation, net of
any amounts that would be received by such Person under such Contingent
Obligation, if such Contingent Obligation on such date were subject to
liquidation, acceleration or early termination.
"CONTRACTUAL OBLIGATION" means, as applied to any Person, any
provision of any security issued by that Person or of any agreement or other
instrument to which that Person is a party or by which it or any of the
properties owned or leased by it is bound or otherwise subject.
"CURRENCY HEDGE AGREEMENT" means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement to which the
Company or any Subsidiary is a party or of which it is a beneficiary and that is
designed to protect the Company or such Subsidiary against currency risks
incurred in the ordinary course of business.
"DATA LICENSES" means the licenses for packet switched network
services and circuit switched network services, issued by Anatel on September
23, 1999.
"DATA SHARING AGREEMENT" means any agreement pursuant to which any
Person other than the Company has the right to provide services pursuant to or
otherwise exploit the Data Licenses.
"DEBT" means, with respect to any Person, without duplication: (i) all
obligations for borrowed money; (ii) all obligations evidenced by bonds,
debentures, notes or other similar instruments; (iii) all obligations to pay the
deferred purchase price of property or services, except accounts payable arising
in the ordinary course of business that are not overdue by more than 90 days;
(iv) all obligations required to be capitalized under Capitalized Leases; (v)
all obligations of others secured by a Lien on any asset owned by such Person or
Persons whether or not such obligation or liability is assumed; (vi) all
obligations of such Person or Persons, contingent or otherwise, in respect of
any letters of credit or bankers' acceptances; (vii) all Contingent Obligations;
(viii) the maximum fixed redemption or repurchase price of Redeemable Capital
Stock of such Person at the date of determination; (ix) all obligations under
facilities for the discount or sale of receivables; and (x) Attributable Debt of
such Person with respect to any Sale and Leaseback Transaction. The amount of
any Debt referred to in clause (v) that is not recourse to such Person shall be
equal to the lesser of (A) the Fair Market Value of the assets subject to such
Lien and (B) the amount of the Debt secured. The maximum fixed repurchase price
of any Redeemable Capital Stock that does not have a fixed repurchase price
shall be calculated in accordance with the terms of such Redeemable Capital
Stock as if such Redeemable Capital Stock were repurchased on the relevant date
of determination; provided, however, that if such Redeemable Capital Stock is
not then permitted to be repurchased, the repurchase price shall be the book
value of such Redeemable Capital Stock. For purposes of calculating any amount
or ratio set forth in this Section 1.1 or in the Financial and Operating
Covenants, Debt denominated in Reais shall be converted into Dollars by applying
the PTAX 800 Rate for the date of determination of such ratios to the aggregate
amount thereof.
Common Terms Agreement
11
22
"DEFAULT" means any condition or event that, with the giving of notice
or lapse of time or both, would, unless cured or waived, become an Event of
Default.
"DEFAULTING PARI PASSU CREDITOR" means any Pari Passu Creditor that
has (a) failed to make a loan, purchase a note or otherwise extend financing in
the form of Pari Passu Debt, as and when required under the applicable Pari
Passu Financing Agreement, or the relevant Pari Passu Facility Agent thereunder
has determined that such Pari Passu Creditor is not likely to make a loan,
purchase a note or otherwise extend financing or (b) given notice to the Company
or the relevant Pari Passu Facility Agent that it will not make or purchase, as
the case may be, or that it has disaffirmed or repudiated any obligation to make
or purchase, as the case may be, any loan or any note or otherwise extend
financing in the form of Pari Passu Debt.
"DEPOSIT ACCOUNT AGREEMENT" means a letter agreement by and among any
Company Party, the Collateral Agent and a depository financial institution with
which such Company Party maintains a deposit account, substantially in the form
of Exhibit 4 to the Company Receivables Pledge Agreement or the Subsidiary
Receivables Pledge Agreement (or, if there is no such Exhibit on the date
hereof, acceptable in form and substance to the Initial Purchasers or, after the
Initial Purchaser Release Date with respect to all Vendor Parties, the
Collateral Agent), as amended from time to time.
"DEPOSITORY BANK" is defined in Section 4.10(h).
"DOLLAR RESTRICTION" means the occurrence of any of the following: (i)
an action or series of actions by a Governmental Authority of Brazil, including
the Central Bank, that prevents the Collateral Agent or the Company from
directly or indirectly (A) legally converting local currency into Dollars in
order to make the Affected Payment under the applicable Pari Passu Financing
Agreement, including the denial of such conversion in an exchange rate category
at least as favorable as the category applicable to the PTAX 800 Rate or if
Dollars are not generally available at such rate, at the rate obtained through
another customary legal channel for transactions of the type contemplated in
this Agreement and the Pari Passu Financing Agreements; or (B) legally
transferring outside of Brazil the amount of Dollars which constitutes the
Affected Payment; or (ii) the failure by any Governmental Authority of Brazil
(or by entities authorized under the laws of Brazil to operate in the foreign
exchange markets) to effect the conversion contemplated in clause (i) above or
to transfer such funds on behalf of the Company.
"DOLLARS" and "$" means lawful money of the United States of America.
"EBITDA" means, for any period, the sum of (without duplication) (i)
Net Income, minus (ii) non-cash gains, plus (iii) Interest Expense, to the
extent deducted in the determination of Net Income, plus (iv) the amount of
Taxes, based on or measured by income, deducted in the determination of Net
Income, plus (or minus) (v) extraordinary losses (or gains) (in either case as
determined under US GAAP) included in the determination of Net Income, plus (vi)
the amount of depreciation and amortization expense deducted in determining Net
Income and all other non-cash charges, plus (or minus) (vii) foreign exchange
losses (or gains) realized, in each case for such period and, except as
specified, calculated in accordance with GAAP. For purposes of calculating
EBITDA, any component of Net Income, any Taxes and any other amounts added to or
deducted from Net Income to determine EBITDA denominated in Reais
Common Terms Agreement
12
23
shall be converted into Dollars by applying the Average Conversion Factor for
the relevant period to the aggregate amount thereof.
"ELIGIBLE ASSIGNEE" means (i) a Pari Passu Creditor (ii) a person that
is directly or indirectly controlled by, under common control with or
controlling a Pari Passu Creditor; (iii) a commercial bank organized under the
laws of the United States, or any state thereof, and having total capital and
surplus in excess of $500,000,000; (iv) a commercial bank organized under the
laws of another country that is a member of the Organization for Economic
Co-Operation and Development ("OECD") or has concluded special lending
arrangements with the International Monetary Fund associated with General
Arrangements to borrow, or a political subdivision of any such country, and
having total capital and surplus in excess of $500,000,000, so long as such bank
is acting through a branch or agency located in the country in which it is
organized or another country that is described in this clause (iv); (v) at any
time after the Closing Date, any export credit agencies, export-import banks or
agencies, including The World Bank Group and the Inter-American Development
Bank, or any similar banks, agencies or financial institutions acting in such
capacities; (vi) a finance company, insurance company or other financial
institution or fund (whether a corporation, partnership, trust or other entity)
that is engaged in making, purchasing or otherwise investing in commercial loans
in the ordinary course of its business and has total assets in excess of
$500,000,000; and (vii) any other Person mutually acceptable to the relevant
Facility Agent and the Company.
"ENVIRONMENTAL DAMAGES" means all claims, judgments, damages, losses,
penalties, liabilities (including strict liability), costs and expenses,
including costs of investigation, remediation, defense, settlement and
reasonable attorneys' fees and consultants' fees, that are incurred at any time
as a result of the existence of Hazardous Material upon, about or beneath any
Real Property or migrating or threatening to migrate to or from any Real
Property, or arising in any manner whatsoever out of any violation of
Environmental Requirements.
"ENVIRONMENTAL LIEN" means a Lien in favor of any Governmental
Authority for Environmental Damages.
"ENVIRONMENTAL REQUIREMENTS" means all Applicable Laws relating to
Hazardous Materials or the protection of human health or the environment,
including all requirements pertaining to reporting, permitting, investigation
and remediation of releases or threatened releases of Hazardous Materials into
the environment, or relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Materials.
"ERICSSON" is defined in the Recitals.
"ERICSSON BRAZIL" is defined in the Recitals.
"ERICSSON SUPPLY AGREEMENT" means that certain Equipment Supply and
Services Agreement, dated August 4, 1999 between Ericsson Brazil and the
Company, as amended from time to time.
Common Terms Agreement
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"EURO-DOLLAR BUSINESS DAY" with respect to each Pari Passu Financing,
is defined in the relevant Pari Passu Financing Agreement.
"EURO-DOLLAR RATE LOAN" or "EURO-DOLLAR RATE NOTE" with respect to
each Pari Passu Financing, is defined in the relevant Pari Passu Financing
Agreement.
"EVENT OF DEFAULT" is defined in Section 6.1.
"EVENT OF LOSS" means, with respect to any assets of the Company and
the Subsidiaries, the actual or constructive loss thereof or of the use thereof
due to theft, destruction or damage, or the condemnation, confiscation or
seizure thereof, or requisition of title to or to the use thereof by any
Governmental Authority or any other Person, whether or not acting under color of
governmental authorization (including an Expropriation Event), provided that no
such event shall constitute an Event of Loss, unless the gross proceeds received
by the Company or any of the Subsidiaries thereof equal, or the property that is
the subject of such Event of Loss has a replacement value of, $500,000 or more.
"EVENT OF LOSS APPLICATION AMOUNT" is defined in Section 5.8(b).
"EXCESS CASH FLOW" means for any Fiscal Year, without duplication, the
excess of (a) the sum of (i) EBITDA for such Fiscal Year, plus (ii) the net
proceeds of any increase in Long-Term Debt for such Fiscal Year (excluding
Shareholder Loans and, solely for the Fiscal Year ending December 31, 2000,
excluding any amount of proceeds of the Notes held at the end of such Fiscal
Year in a Proceeds Account pursuant to the terms of the respective Note Purchase
Agreement), plus (iii) the amount of any decrease in Working Capital during such
Fiscal Year (excluding any such change attributable to any increase or decrease
from Short-Term Debt under the Working Capital Facility during such period),
minus the sum of (I) 100% of Capital Expenditures for such Fiscal Year, plus
(II) any payments made to Anatel or any other Brazilian governmental agency as
contemplated by the Mirror Authorizations during such Fiscal Year with respect
to the Mirror Authorizations (to the extent not deducted in the determination of
EBITDA), plus (III) Taxes paid during such Fiscal Year, plus (IV) the amount of
all cash Interest Expense, including Fee payments, or principal payments
(scheduled or prepaid) with respect to Debt of the Company and its Subsidiaries
made during such Fiscal Year plus (V) the amount of any increase in Working
Capital, over (b) [***]. For the avoidance of doubt, "Excess Cash Flow" shall
not include that portion of Asset Disposition Prepayment Amounts which is
attributable to gains from Asset Dispositions otherwise included in Net Income
for the relevant period. For purposes of determining Excess Cash Flow, (x) the
net proceeds of any increase in Long-Term Debt will be calculated by converting
any portion of Long-Term Debt issued during the Fiscal Year with respect to
which Excess Cash Flow is being determined that is denominated in Reais into
Dollars by applying the PTAX 800 Rate for the last day of such Fiscal Year to
the aggregate amount thereof and by converting any portion of Long-Term Debt
that was outstanding as of the last day of the Fiscal Year prior to the Fiscal
Year with respect to which Excess Cash Flow is being determined that is
denominated in Reais into Dollars by applying the PTAX 800 Rate for such date,
to the aggregate amount thereof; and (y) the amount of any payments made by
Anatel or any other Brazilian governmental agency, as described in clause (II),
and the amount of any Taxes paid, as described in clause (III), will be
calculated by converting any amount of such payments or Taxes, as the case may
be, that is denominated in
[*] 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.
Common Terms Agreement
14
25
Reais into Dollars by applying the PTAX 800 Rate for the day on which such
payment was made or such Taxes were paid, as the case may be, to the aggregate
amount thereof.
"EXCESS PROCEEDS" means, with respect to (i) an initial public
offering of equity securities or securities convertible into or exchangeable for
equity securities or securities which grant the right to purchase or acquire
equity securities (including warrants or options issued on a standalone basis or
as a part of any other security issuance) by the Company, any Subsidiary, HoldCo
or any HoldCo Parent or (ii) any incurrence or issuance of Debt for borrowed
money by the Company, any Subsidiary or HoldCo, the aggregate net cash proceeds
received by the Company or other Person who issued such securities or incurred
or issued such Debt from any such event, but excluding issuances to any
Subsidiary Guarantor. As used herein, "net" shall mean net of customary
commissions, underwriters' discounts and other reasonable transaction costs. For
purposes of determining Excess Proceeds, any components thereof denominated in
Reais shall be converted to Dollars by applying the PTAX 800 Rate for the date
of determination to the aggregate amount thereof.
"EXCHANGE DEBT" means any Excluded Debt issued to the Vendor Parties
pursuant to the Exchange Debt Agreement due to such Vendor Parties' election to
convert a portion of their Notes to Excluded Debt, on the terms and conditions
set forth in the Exchange Debt Agreement.
"EXCHANGE DEBT AGREEMENT" means the Exchange Debt Agreement to be
dated the Closing Date by and among the Company and the Vendor Parties,
substantially in the form of Exhibit H hereto (or, if there is no such Exhibit
on the date hereof, acceptable in form and substance to the Vendor Parties), as
amended from time to time.
"EXCLUDED DEBT" means (i) unsecured, senior indebtedness of the
Company that does not require any payment of interest, other than in the form of
additional Excluded Debt, until one year after the latest of the Initial
Repurchase Dates and Final Maturity Dates, as the case may be, of the Pari Passu
Debt, or (ii) any unsecured, Subordinated Debt of the Company, each maturing on
or after, and not requiring any payments of principal until, the date that is
one year after the latest of the Initial Repurchase Dates and Final Maturity
Dates, as the case may be, of the Pari Passu Debt, provided that (a) such Debt
shall contain only such optional and mandatory prepayment, "Change of Control"
and "Asset Sale" repurchase provisions, representations and warranties,
affirmative and negative covenants, events of default, submission to New York
jurisdiction and other provisions as are customary for high yield debt
transactions involving a Brazilian issuer at the time of issuance, (b) any
Exchange Debt, at the option of the Vendor Parties, may be secured by a junior
security interest in the Collateral, provided that such security materially
reduces the interest rate that would otherwise have been payable on the Exchange
Debt or permits such Exchange Debt to be sold at a price equal to par in an
arm's-length, cash, free market transaction, and (c) in the case of any
Subordinated Debt, such Debt shall be subordinate to the prior payment in full
of the Pari Passu Obligations to at least the following extent: (1) no payments
of principal of (or premium, if any) or interest on or otherwise due in respect
of such Debt may be permitted for so long as any Default in the payment of
principal (or premium, if any) or interest on the Pari Passu Obligations exists,
and (2) such Debt may not (i) provide for payments of principal of such Debt at
the stated maturity thereof or by way of a sinking fund applicable thereto or by
way of any mandatory redemption, defeasance,
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26
retirement or repurchase thereof by the Company or any Subsidiary (including any
redemption, retirement or repurchase which is contingent upon events of
circumstances but excluding any retirement required by virtue of acceleration of
such Subordinated Debt upon any event of default thereunder), in each case prior
to one year and one day after the latest of the Initial Repurchase Dates and the
Final Maturity Dates, as the case may be, of the Pari Passu Debt or (ii) permit
redemption, repurchase or other retirement (including pursuant to an offer to
purchase made by the Company or any of its Subsidiaries) of such other Debt at
the option of the holder thereof prior to the latest of the Initial Repurchase
Dates and Final Maturity Dates, as the case may be, of the Pari Passu Debt,
other than a redemption or other retirement at the option of the holder of such
Debt (including pursuant to an offer to purchase made by the Company or any of
its Subsidiaries) which is conditioned upon a change of control of the Company
pursuant to provisions set forth in the instruments evidencing such Debt.
"EXCLUDED TAXES" means, with respect to any payment to any Pari Passu
Creditor Party, (a) any taxes imposed on or measured by the overall net income
(including a franchise or excise tax based on net income) of such Pari Passu
Creditor Party or its Collateral Agent's Office, Pari Passu Facility Agent's
Office, Applicable Purchasing Office or Applicable Lending Office (as specified
in the applicable Pari Passu Financing Agreement) by the jurisdiction in which
it is incorporated, maintains its principal executive office or in which such
Pari Passu Facility Agent's Office, Applicable Purchasing Office or Applicable
Lending Office is located, and (b) any other Taxes designated as Excluded Taxes
in the Pari Passu Financing Agreements.
"EXISTING DEBT" means the Debt described in Schedule 1.1(b).
"EXISTING LIENS" means the Liens described in Schedule 1.1(c).
"EXPANDED PROJECT" means (a) the Project and (b) the initial buildout,
ownership and operation of a switched fixed telephony network covering the 55
additional cities in Region 1 of Brazil, as designated by the amendment to the
Mirror Authorizations dated May 8, 1999.
"EXPROPRIATION EVENT" means any Governmental Authority or official
thereof, condemning, seizing, intervening, compulsorily purchasing or
expropriating all or any substantial part of the assets (including the Mirror
Authorizations) of any of the Company, HoldCo or the Subsidiaries.
"FAIR MARKET VALUE" means, with respect to any asset or property, the
sale value that could be obtained in an arm's-length transaction, for cash,
between a willing seller and a willing buyer, neither of whom is under pressure
or compulsion to complete the transaction.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers on such day, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York on the Business
Day next succeeding such day, provided that if such rate is not so published for
any day that is a Business Day, the Federal Funds Rate for such day shall be the
average rate charged to
Common Terms Agreement
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27
the Reference Banks (as defined in the Nortel Note Purchase Agreement) on such
day on such transactions as determined by the Collateral Agent.
"FEDERAL RESERVE BOARD" means the Board of Governors of the Federal
Reserve System.
"FEE LETTERS" means, collectively, (i) with respect to any Note
Purchase Agreement, the Administrative Agent's Letter, the Proceeds Collateral
Agent's Letter and the Purchasers' Fee Letter, each as defined in the respective
Note Purchase Agreement, (ii) with respect to this Agreement, the Collateral
Agent's Letter and (iii) with respect to any Other Pari Passu Financing
Agreement, any letters or agreements pursuant to which any Company Party shall
be obligated to pay any fees to the Paying Agent or to any Pari Passu Creditor
Parties in either case in respect of such Pari Passu Financing Agreement.
"FEES" means, with respect to each Pari Passu Creditor Party, the fees
required to be paid by any Company Party under the respective Pari Passu
Financing Agreements or related Fee Letters and specified as "Fees" under such
Pari Passu Financing Agreements and Fee Letters.
"FINAL MATURITY DATE" means, with respect to each Pari Passu Financing
that is not subject to mandatory repurchase or redemption prior to its stated
maturity date at the option of the holders thereof, the stated maturity date
specified in the applicable Pari Passu Financing Document.
"FINANCIAL AND OPERATING COVENANTS" means, collectively, Sections 5.5
and 5.6.
"FISCAL YEAR" means the fiscal year of the Company, which shall be the
12 month-period ending on December 31 in each year or such other period as the
Company may designate and the Required Pari Passu Creditors may approve in
writing. "Fiscal Quarter" or "fiscal quarter" means any quarter of a Fiscal
Year.
"FIXED CHARGES" means, for any period, the sum of (i) scheduled
payments of principal in respect of Long-Term Debt of the Company or any of the
Subsidiaries, (ii) Interest Expense, (iii) Taxes paid or accrued and based on or
measured by income, (iv) Capital Expenditures, and (v) dividends and other
Restricted Payments, in each case for such period and determined on a
consolidated basis in accordance with GAAP. For purposes of determining Fixed
Charges, (x) the amount of any scheduled payment of principal in respect of
Long-Term Debt that is denominated in Reais shall be converted into Dollars by
applying the PTAX 800 Rate for the date such payment was made to the amount of
such payment and (y) the amount of any dividends and other Restricted Payments
denominated in Reais shall be converted into Dollars by applying the PTAX 800
Rate for the date any such dividend or other Restricted Payment was paid to the
amount of such dividend or Restricted Payments.
"FORECLOSURE ACTION" means, with respect to any Pari Passu Creditor
Party and any Collateral, any action to foreclose upon or enforce a Lien against
particular property, including (i) notifying account debtors, lessees and others
obligated to make payment to any Company Party to make payment directly to such
Pari Passu Creditor Party, (ii) commencing
Common Terms Agreement
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judicial or non-judicial foreclosure proceedings, (iii) exercising any other
remedy with respect to any item of real or personal property included in such
Collateral or (iv) taking any action under any Bankruptcy Law that directly
relates to or directly affects any such Collateral, other than any such action
that relates to or affects all or substantially all the property of the
bankruptcy estate.
"FOREIGN BENEFIT PLAN" is defined in Section 3.24(b).
"FOREIGN GOVERNMENT ARRANGEMENT" is defined in Section 3.24(b).
"FUNDED EQUITY" means, at any date, the sum of (i) the amount of
capital contributions made by HoldCo in respect of common equity of the Company,
(ii) the amount of capital contributions made by HoldCo in respect of preferred
stock of the Company (other than Redeemable Capital Stock) that carries no
unwaived rights to cash dividends, and (iii) the principal amount of Shareholder
Loans without regard to "payment in kind" interest added to principal; each
calculated in Dollars at the PTAX 800 Rate prevailing at the time such
contribution or loan is made, in each case net of dividends, repayments and
other Restricted Payments, in each case calculated in Dollars at the PTAX 800
Rate prevailing at the time such dividend, repayment or other Restricted Payment
was paid. The total amount of Funded Equity as of the date hereof is
$65,966,822.
"FUNDING DATE" means any date on which a loan or note, as the case may
be, under a Pari Passu Financing Agreement is (or is requested to be) made or
issued, as the case may be.
"FUNDING GAP FINANCING" means (i) any issuance of Capital Stock or the
issuance or incurrence of Debt by, or any capital contribution to, HoldCo to the
extent the proceeds thereof are contributed to the Company as equity capital,
(ii) the issuance or incurrence of Debt pursuant to the Replacement Xxxxxx
Financing Agreement or (iii) the issuance or incurrence of other Debt (other
than Shareholder Loans) by the Company (including any Permitted ICMS Debt
meeting the conditions set forth herein and in clause (f) of the definition of
"Permitted ICMS Debt"), provided, in each case, (a) such issuance or incurrence
is designated as "Funding Gap Financing" in a written notice by the Company to
the Collateral Agent, (b) the aggregate amount of such financings does not
exceed [***], minus the amount by which aggregate Commitments under the Note
Purchase Agreements increased since the Closing Date under the Note Purchase
Agreements, (c) Debt under the foregoing clause (ii) or (iii) shall (1) not
contain any covenants, representations, events of default or lender rights and
remedies more burdensome (taken as a whole) than the covenants, representations,
Events of Default or rights and remedies contained in the Note Documents, (2)
not be secured by any collateral or benefited by any guaranty granted or issued
by any Company Party (other than the Shareholders and the Parent Shareholders),
other than the Collateral and guaranties substantially identical to (or less
extensive than) those included in the Note Documents, (3) be in all respects
pari passu with (or subordinate to) the Obligations, (4) not require any payment
of principal prior to the Maturity Repurchase Date, except for mandatory
prepayments to be shared on a pro rata basis with all other Pari Passu
Obligations pursuant to Article 8 hereof, and (5) not otherwise carry terms
which are more burdensome (taken as a whole) to the Company and the Subsidiaries
(except as to the interest rate applicable thereto) than the terms of the Note
Documents, and (d) the Other Pari Passu Facility Agent under any Funding Gap
Financing in the form of Other Pari Passu Debt
[*] 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.
Common Terms Agreement
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29
becomes a party to this Agreement, provided that, notwithstanding the foregoing,
Permitted ICMS Debt may be guarantied by HoldCo.
"GAAP" means generally accepted accounting principles as in effect in
Brazil (as such principles are in effect on the date hereof), provided that, for
all purposes hereunder (i) whether or not any lease constitutes a Capitalized
Lease shall be determined in accordance with US GAAP, (ii) whether any gain or
loss constitutes an extraordinary gain or loss shall be determined in accordance
with US GAAP, and (iii) all financial statements, projections and other
financial information required hereby shall be prepared, and all financial
determinations shall be made, on a consolidated basis, provided further that,
for purposes of the financial statements required to be delivered pursuant to
Section 4.1, "GAAP" means generally accepted accounting principles as in effect
in Brazil from time to time if, and only if, such financial statements are
accompanied by a reconciliation between generally accepted accounting principles
in Brazil as in effect on the date hereof and those used in the preparation of
those financial statements.
"GOVERNMENTAL APPROVAL" means (i) any license, authorization, consent,
approval, permit, or license granted by any Governmental Authority, including
the Mirror Authorizations, permitting the Company or any Subsidiary to design,
construct or operate the Project, and (ii) any other authorization, consent,
approval, permit or license issued by, or a registration or filing with, any
Governmental Authority.
"GOVERNMENTAL AUTHORITY" means any nation (including Brazil) and any
state or political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government and any tribunal or arbitrator of competent jurisdiction,
including the Central Bank.
"GROSS CASH PROCEEDS" means, with respect to any Asset Disposition,
the sum of: (i) the amount of cash and cash equivalent proceeds received by or
for the account of the Company or any Subsidiary attributable to such Asset
Disposition, and (ii) the amount of cash and cash equivalents received by or for
the account of the Company or any Subsidiary upon the sale, conversion,
collection or other liquidation of any Non-Cash Proceeds attributable to such
Asset Disposition. For purposes of determining Gross Cash Proceeds, (x) the
amount of cash and cash equivalent proceeds attributable to such Asset
Disposition that is denominated in Reais shall be converted into Dollars by
applying the PTAX 800 Rate for the date on which such proceeds were received by
the Company or any Subsidiary to the aggregate amount thereof and (y) the amount
of cash and cash equivalent proceeds received upon the sale, conversion,
collection or other liquidation of any Non-Cash Proceeds that is denominated in
Reais shall be converted into Dollars by applying the PTAX 800 Rate in effect
for the date of such cash and cash equivalent proceeds are received by the
Company or any Subsidiary in respect of such sale, conversion, collection or
other liquidation to the aggregate amount thereof.
"GUARANTIES" means the Subsidiary Guaranties and the HoldCo Guaranty.
"GUARANTOR" means HoldCo or any Subsidiary Guarantor.
"XXXXXX" is defined in the preamble.
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"XXXXXX FACILITY AGENT" is defined in the preamble.
"XXXXXX NOTE PURCHASE AGREEMENT" means the Secured Note Purchase
Agreement dated as of the date hereof, by and among the Company, the Xxxxxx
Facility Agent, and the Xxxxxx Purchasers.
"XXXXXX PURCHASERS" is defined in the preamble.
"XXXXXX SUPPLY AGREEMENT" means the supply agreement between Nortel
and Xxxxxx, as a subcontractor under the Nortel Supply Agreement, dated as of a
date prior to the Closing Date.
"HAZARDOUS MATERIALS" means any substance (i) the presence of which
requires investigation or remediation under any Applicable Law; (ii) that is or
becomes defined as a "hazardous waste" or "hazardous substance" under any
Applicable Law; (iii) that is toxic, explosive, corrosive, inflammable,
infectious, radioactive, carcinogenic, mutagenic, or otherwise hazardous and is
or becomes regulated by any Governmental Authority; (iv) the presence of which
on any Real Property causes or threatens to cause a nuisance upon the Real
Property or to adjacent properties or poses or threatens to pose a hazard to any
Real Property or to the health or safety of Persons on or about any Real
Property; or (v) without limitation, that contains gasoline or other petroleum
hydrocarbons, polychlorinated biphenyls or asbestos.
"HEDGING CONTRACT" means, for any Person, any interest rate,
commodity, foreign exchange or other hedging agreement (including swaps,
collars, caps and forward contracts) between such Person and one or more
financial institutions providing for the transfer or mitigation of fluctuations
of interest rates, exchange rates or other prices either generally or under
specific contingencies.
"HOLDCO" is defined in the Preamble.
"HOLDCO GUARANTY" means the Continuing Limited Recourse Guaranty made
by HoldCo in favor of the Collateral Agent, in substantially the form of Exhibit
B hereto (or, if there is no such Exhibit on the date hereof, acceptable in form
and substance to the Initial Purchasers or, after the Initial Purchaser Release
Date with respect to all Vendor Parties, the Collateral Agent), as amended from
time to time.
"HOLDCO PARENT" means any direct or indirect parent of HoldCo, other
than a Shareholder, Parent Shareholder or any of their respective direct or
indirect parents.
"HOLDCO STOCK PLEDGE AGREEMENT" means the HoldCo Stock Pledge
Agreement between HoldCo, the Collateral Agent and the individual shareholder of
the Company in substantially the form of Exhibit C-2 hereto (or, if there is no
such Exhibit on the date hereof, acceptable in form and substance to the Initial
Purchasers or, after the Initial Purchaser Release Date with respect to all
Vendor Parties, the Collateral Agent), as amended from time to time.
"INDEMNIFIED LIABILITIES" is defined in Section 10.2(a).
Common Terms Agreement
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"INDEMNITEES" is defined in Section 10.2(a).
"INITIAL FACILITY AGENTS" is defined in the Preamble.
"INITIAL PURCHASER GUARANTY" is defined in the Recitals.
"INITIAL PURCHASER RELEASE DATE" means, in respect of any Vendor
Party, the date of a Non-Recourse Assignment resulting in an unconditional
release of such Vendor Party, without recourse, in respect of its Notes,
Commitments and Additional Commitments under the relevant Note Purchase
Agreement and from its Initial Purchaser Guaranty.
"INITIAL PURCHASERS" means Nortel, Ericsson, Qualcomm, ABN AMRO and
Xxxxxx.
"INITIAL REPURCHASE DATE" means, (i) in respect of the Notes, the
"Initial Repurchase Date" set forth in the Note Purchase Agreement, and (ii) in
respect of Other Pari Passu Debt that is subject to mandatory repurchase or
redemption prior to its stated maturity date at the option of the holders
thereof, the first date on which such option may be exercised.
"INITIATING PARI PASSU CREDITORS" is defined in Section 9.3(c).
"INSOLVENCY OR LIQUIDATION PROCEEDING" means (i) any insolvency or
bankruptcy case or proceeding (including any case under any Bankruptcy Law), or
any receivership, liquidation, reorganization or other similar case or
proceeding relative to any Specified Company Party or their respective
creditors, as such, or to their assets, (ii) any liquidation, dissolution,
reorganization (including a concordata) or winding up of any Specified Company
Party, whether voluntary or involuntary and whether or not involving insolvency
or bankruptcy or (iii) any assignment for the benefit of creditors or any other
marshaling of assets and liabilities of any Specified Company Party.
"INTELLECTUAL PROPERTY RIGHT" means (i) any patent, copyright,
trademark, servicemark, trade name, trade secret or other intellectual property
right, (ii) all registrations and applications to register any such patent,
copyright, trademark, servicemark, trade name or other intellectual property
right with any Governmental Authority and all renewals and extensions thereof,
and (iii) the goodwill of the business associated with or relating to any such
trademark, servicemark, trade name or other intellectual property right.
"INTERCOMPANY DEBT" means any Debt of the Company or any Subsidiary
that is owed to any Subsidiary Guarantor or the Company.
"INTERCOMPANY DEBT SUBORDINATION AGREEMENT" means the Intercompany
Debt Subordination Agreement, to be dated the Closing Date, among the Company,
the Subsidiary Guarantors and the Collateral Agent, in substantially the form of
Exhibit E hereto (or, if there is no such Exhibit on the date hereof, acceptable
in form and substance to the Initial Purchasers or, after the Initial Purchaser
Release Date with respect to all Vendor Parties, the Collateral Agent), as
amended from time to time.
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"INTERCONNECTION AGREEMENTS" means the interconnection agreements
entered into from time to time between the Company or any Subsidiary and other
local access and long distance carriers and which are necessary for the
operation of the Expanded Project.
"INTEREST EXPENSE" means, for any period, without duplication, the sum
of (i) the aggregate amount of cash and non-cash interest expense (including
capitalized interest and any increase in accreted value of any discount
obligation) of the Company and its Subsidiaries for such period as determined on
a consolidated basis in accordance with GAAP in respect of Debt (including (a)
any amortization of debt discount, (b) net costs associated with Hedging
Contracts (including any amortization of discounts), (c) the interest portion of
any deferred payment obligation, (d) all accrued interest, (e) the portion of
any rental obligation of the Company or its Subsidiaries in respect of any
Capitalized Lease allocable to interest expense determined in accordance with US
GAAP, and (f) all fees, commissions, discounts and other fees and charges owed
with respect to letters of credit, bankers' acceptances or similar facilities)
paid or accrued, or scheduled to be paid or accrued, during such period; (ii)
the portion of any rental obligation of the Company and its Subsidiaries under
an Operating Lease in respect of any Sale and Leaseback Transaction allocable to
interest expense (determined as if such were treated as a Capitalized Lease), in
each case determined on a consolidated basis in accordance with GAAP; and (iii)
any tax gross up payable in respect of the amounts payable pursuant to clauses
(i) and (ii).
"INTEREST HEDGE AGREEMENTS" means any interest rate swap, cap, collar,
floor, caption or swaption agreements, or any similar arrangements designed to
hedge the risk of variable interest rate volatility or to reduce interest costs,
arising at any time between the Company or any Subsidiary, on the one hand, and
any one or more Swap Lenders, or any other Person (other than an Affiliate of
the Company), on the other hand, as such agreement or arrangement may be amended
from time to time.
"INVESTMENT" means, with respect to any Person, (i) any direct or
indirect purchase or other acquisition by such Person of (a) Capital Stock or
securities, or any beneficial interest in Capital Stock or other securities, of
any other Person, or (b) any partnership (whether general or limited) or limited
liability company interest in any other Person, (ii) any direct or indirect
loan, advance, extension of credit (including by way of incurrence of a
Contingent Obligation) or capital contribution by that Person to or for the
benefit of any other Person, including all indebtedness and accounts receivable
from that other Person that are not current assets or did not arise from sales
to that other Person in the ordinary course of business or (iii) all items that
are or would be classified as investments on a balance sheet prepared in
accordance with GAAP; provided "Investment" includes the acquisition of Non-Cash
Proceeds in connection with an Asset Disposition, but does not include an
Acquisition. The amount of any Investment shall be the original cost of such
Investment, plus the cost of all additions thereto, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment.
"KNOW-HOW AGREEMENT" means that certain Know-How Transfer and
Technical Services Agreement, dated August 15, 1999 between BCI and the Company,
as amended from time to time as permitted hereby.
"LEASE" OR "LEASED FACILITIES" is defined in Section 4.10(g).
Common Terms Agreement
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"LEASED LINE AGREEMENTS" means, collectively, the third party
agreements, related to the Company's or any Subsidiary's leasing of private
communications channels from a carrier for providing backbone transport
capability to the Expanded Project.
"LIEN" means any lien, mortgage, pledge, security interest, charge, or
encumbrance of any kind (including any conditional sale or other title retention
agreement or any lease in the nature thereof) and any agreement to give or
refrain from giving any lien, mortgage, pledge, security interest, charge, or
other encumbrance of any kind.
"LONG-TERM DEBT" means the aggregate of all those component parts of
Debt the final maturity of which, by its terms or the terms of any agreement
relating to it in effect at the time of issuance or at the time of any amendment
thereof, falls due, or is extendible or renewable at the option of the obligor
to a due date, more than one year after the date of its incurrence.
"MANDATORY PARTIAL REPURCHASE" means any mandatory partial repurchase
of Notes required under any Note Purchase Agreement.
"MANDATORY PREPAYMENT" means any mandatory prepayment or repurchase of
Pari Passu Debt described in Section 8.1 hereof.
"MANDATORY REPURCHASE" means any mandatory repurchase of Notes
required under any Note Purchase Agreement.
"MATERIAL," "MATERIAL ADVERSE EFFECT" or "MATERIAL ADVERSE CHANGE"
means (i) a condition or event material to, (ii) a material adverse effect on or
(iii) a material adverse change in, as the case may be, any one or more of the
following: (A) the business, assets, results of operations, condition (financial
or otherwise) or prospects of the Company and its Subsidiaries taken as a whole
or (B) the ability of any Company Party to perform its obligations under any
Pari Passu Financing Document to which it is a party or (C) the validity,
legality or enforceability of any Pari Passu Financing Document or the material
rights or remedies of any Pari Passu Creditor Party thereunder or (D) the Mirror
Authorizations, the rights thereto or rights to operate thereunder of the
Company or (E) on the Closing Date, Brazilian, United States or international
loan syndication, financial or capital markets or in the economic, political or
regulatory conditions in Brazil which in any Initial Facility Agent's or Initial
Purchaser's opinion in its sole discretion could materially impair the
assignment or syndication of the Notes; or (F) the validity, enforceability,
perfection or priority of the Liens in favor of the Collateral Agent under the
Pari Passu Collateral Documents or in favor of the Proceeds Collateral Agents
under the Proceeds Account Pledge Agreements. "Materially" has a correlative
meaning.
"MATERIAL CONTRACTS" means (i) the Mirror Authorizations, the Supply
Agreements, the BCI Technical Services Agreement, the Know-How Agreement, the
Secondment Agreement, the Shareholder Agreement, the Interconnection Agreements,
the Data Sharing Agreements, the Leased Line Agreements, and each (ii) other
contract, agreement or other document to which the Company or a Subsidiary is a
party, (a) that requires, or is reasonably likely (determined at the date of
determination) to require, the payment by the Company or any Subsidiary of (x)
[***] or more per annum or (y) [***] or more
[*] 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.
Common Terms Agreement
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over the term of such agreement (giving effect to extension options that are
reasonably likely to be exercised), or (b) 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 the Company
and the Subsidiaries, equals or could reasonably be expected to equal the
amounts referred to in clause (x) or (y).
"MINISTRY OF COMMUNICATIONS" means the Ministerio das Comunicacoes,
the Ministry of Communications of Brazil.
"MIRROR AUTHORIZATIONS" is defined in the Recitals.
"MOODY'S" means Xxxxx'x Investors Service, Inc. or any successor.
"MORTGAGE" means any Public Deed of Mortgage between the Company or
any Subsidiary and the Collateral Agent in substantially the form of Exhibit
C-1E hereto (or, if there is no such Exhibit on the date hereof, acceptable in
form and substance to the Initial Purchasers or, after the Initial Purchaser
Release Date with respect to all Vendor Parties, the Collateral Agent), as
amended from time to time.
"NET CASH PROCEEDS" means, with respect to any Asset Disposition, the
sum of: (i) the net amount of cash and cash equivalent proceeds received by or
for the account of the Company or any Subsidiary attributable to such Asset
Disposition, and (ii) the net amount of cash and cash equivalents received by or
for the account of the Company or any Subsidiary upon the sale, conversion,
collection or other liquidation of any Non-Cash Proceeds attributable to such
Asset Disposition. For this purpose, "net" means net of (a) the principal amount
of any Debt secured by a Permitted Lien securing Purchase Money Debt on the
assets subject to and required to be prepaid, and actually prepaid, upon such
Asset Disposition, (b) any transfer Taxes payable as a result of such Asset
Disposition, professional fees and expenses, survey and appraisal costs,
insurance and title premiums, broker's commissions and all other out-of-pocket
costs, expenses and fees of sale actually paid to any Person (other than the
Company or any Affiliate) attributable to such Asset Disposition, (c) any
reasonable expenses incurred in connection with the preparation of an asset for
disposition, including refurbishing expenses and (d) the Tax Withholding Amount
with respect to such Asset Disposition.
"NET INCOME" means, for any period, net income (or loss) after taxes
of the Company and its Subsidiary, on a consolidated basis in accordance with
GAAP, for such period taken as a single accounting period, provided that there
shall be excluded therefrom (i) the gains or losses of any Person (other than a
Subsidiary Guarantor) in which the Company or one of its Subsidiaries has an
equity interest, except to the extent of dividends or other distributions
actually paid to the Company or any of the Subsidiary Guarantors by such Person
during such period, (ii) the undistributed income of any of the Subsidiaries to
the extent that the declaration or payment of dividends or other distributions
by such Subsidiary is not at the time permitted by the terms of its charter or
Contractual Obligations or Applicable Law binding on such Subsidiary, and (iii)
gains or losses in respect of any sale, transfer or disposition of assets other
than in the ordinary course of business by the Company or its Subsidiaries.
Common Terms Agreement
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"NON-CASH PROCEEDS" means any notes, debt securities, other rights to
payment, Capital Stock or other consideration received from an Asset
Disposition, except cash and Cash Equivalents.
"NON-RECOURSE ASSIGNMENT" means, in respect of any Vendor Party, (i)
the unconditional written total release, or effectiveness of any conditional
total release (provided that all conditions precedent to such release have been
satisfied or waived by the Person granting such release), of such Vendor Party
from its Initial Purchaser Guaranty in respect of all or a portion of the Notes
then held by any Purchaser, (ii) the assumption by one or more Purchasers (other
than an Affiliate of such Vendor Party) of all or a portion of the unused
commitment of such Vendor Party under the relevant Note Purchase Agreement, or
(iii) the assignment by such Vendor Party of all or a portion of the Notes then
held by it (other than to an Affiliate of such Vendor Party), provided, in each
case, such commitment and Notes cease to be covered under the related Initial
Purchaser Guaranty or, in the case of Qualcomm, are assigned without recourse to
Qualcomm.
"NON-WHOLLY-OWNED SUBSIDIARY" means, at any date, any Subsidiary of
the Company of which less than 100% of the Capital Stock (except for directors'
qualifying shares, and any one share issued to a Person other than the Company
or any of its Wholly-Owned Subsidiaries to qualify such Subsidiary as a
"limitada" or other relevant juridical entity under applicable law) is owned
directly by the Company or through one or more of its other Wholly-Owned
Subsidiaries.
"NORTEL" is defined in the Preamble.
"NORTEL FACILITY AGENT" is defined in the Preamble.
"NORTEL PURCHASERS" is defined in the Recitals.
"NORTEL NOTE PURCHASE AGREEMENT" means the Secured Note Purchase
Agreement dated as of the date hereof, by and among the Company, the Nortel
Facility Agent, and the Nortel Purchasers.
"NORTEL SUPPLY AGREEMENT" means that certain Equipment Supply and
Services Agreement, dated July 9, 1999 between Nortel, Northern Telecom do
Brasil Industria e Comercio Ltda., Northern Telecom do Brasil Comercio e
Servicos Ltda. and the Company, as amended from time to time.
"NOTE DOCUMENTS" means, collectively, this Agreement, the Note
Purchase Agreements, the Notes, the Guaranties, the Collateral Documents, the
Exchange Debt Agreement, the Capital Contribution Agreement, the Collateral
Agent's Letter, the Subordination Agreements (other than any such agreement
relating to Subordinated Debt), each Fee Letter related to the Note Documents,
all other Note Documents (as defined in each of the Note Purchase Agreements),
all of the Interest Rate Hedge Agreements between the Company, on the one hand,
and one or more Swap Lenders, on the other hand, in respect of the Obligations,
and all amendments, exhibits and schedules to any of the foregoing.
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"NOTE PURCHASE AGREEMENTS" means, collectively, the Nortel Note
Purchase Agreement, the Qualcomm/Ericsson Note Purchase Agreement and the Xxxxxx
Note Purchase Agreement.
"NOTES" means the notes issued pursuant to the Note Purchase
Agreements, and "Note" means any of such notes.
"NOTICE OF BORROWING" and "NOTICE OF ISSUANCE" with respect to each
Pari Passu Financing, is defined in the respective Pari Passu Financing
Agreement.
"NOTICE OF PARI PASSU EVENT OF DEFAULT" is defined in Section 9.2(a).
"OBLIGATIONS" means all present and future obligations and liabilities
of the Company Parties of every type and description arising under or in
connection with the Note Documents due or to become due to the Purchaser
Parties, any Paying Agent or any Person entitled to indemnification under the
Note Documents (or to the Swap Lenders in the case of Interest Hedge Agreements
in respect of the Notes), or any of their respective successors, transferees or
assigns, whether for principal, interest, fees, expenses, indemnities or other
amounts (including attorneys' fees and expenses) and whether due or not due,
direct or indirect, joint and/or several, absolute or contingent, voluntary or
involuntary, liquidated or unliquidated, determined or undetermined, and whether
now or hereafter existing, renewed or restructured.
"OPERATING LEASE" means, as applied to any Person, any lease of any
property (whether real, personal, or mixed) under which such Person is the
lessee and that is not required to be capitalized on the balance sheet of such
Person in accordance with US GAAP.
"OTHER PARI PASSU COMMITMENTS" means the commitments of the Other Pari
Passu Creditors under the respective Other Pari Passu Financing Agreements, as
set forth therein.
"OTHER PARI PASSU CREDITOR PARTY" means each Pari Passu Creditor Party
to any Other Pari Passu Financing Document.
"OTHER PARI PASSU CREDITORS" means all lenders and note purchasers
from time to time party to the Other Pari Passu Financing Documents.
"OTHER PARI PASSU DEBT" means Funding Gap Financings (other than
Permitted ICMS Debt) or Permitted Refinancing Debt in respect of Funding Gap
Financings (other than Permitted ICMS Debt).
"OTHER PARI PASSU FACILITY AGENT" means the administrative agent (or
party serving in a similar capacity) from time to time party to any Other Pari
Passu Financing Agreement evidencing or relating to Other Pari Passu Debt or the
sole holder of such Debt, as the context may require.
"OTHER PARI PASSU FINANCING AGREEMENT" means, with respect to any
Other Pari Passu Debt, the loan or note purchase agreement entered into among
the Company, the Other Pari Passu Facility Agent, and the Other Pari Passu
Creditors setting forth the terms and conditions of such Debt.
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"OTHER PARI PASSU FINANCING DOCUMENTS" means the Pari Passu Financing
Documents evidencing or relating to the Other Pari Passu Debt from time to time.
"PARENT SHAREHOLDERS" means, collectively, BCI, VeloCom and Qualcomm
and any parent company of any Shareholder that acquires any Capital Stock of
HoldCo after the date hereof.
"PARI PASSU AGENTS" means, collectively, (i) the Collateral Agent and
(ii) all Pari Passu Facility Agents.
"PARI PASSU AGENTS' OFFICES" means, collectively, the office of each
Pari Passu Agent identified as such in Schedule 1.1(a), or such other office as
such Pari Passu Facility Agent may hereafter designate by notice to the Company
and each other Pari Passu Agent.
"PARI PASSU COLLATERAL DOCUMENTS" means the Security Agreements, the
Mortgages, the Deposit Account Agreements, the Consents to Assignment, the
Consents and Waivers and all accounts pledge agreements, financing statements,
assignments and other documents executed or delivered from time to time in
connection therewith or otherwise to secure the Company's or any other Company
Party's Pari Passu Obligations under the Pari Passu Financing Documents, in each
case as amended from time to time.
"PARI PASSU COMMITMENTS" means, collectively, the commitments of the
Purchasers under the respective Note Purchase Agreements, as set forth therein,
and the Other Pari Passu Commitments.
"PARI PASSU CREDITOR PARTIES" means, collectively, (i) all Purchaser
Parties (excluding for purposes of Article 9, the Collateral Agent and the
Proceeds Collateral Agent), and (ii) all Other Pari Passu Creditors and Other
Pari Passu Facility Agents.
"PARI PASSU CREDITORS" means, collectively, (i) all Purchasers and
(ii) all Other Pari Passu Creditors.
"PARI PASSU DEBT" means, collectively, (i) the Notes and (ii) all
Other Pari Passu Debt.
"PARI PASSU EVENT OF DEFAULT" means, in respect of any Pari Passu
Financing Agreement, any "Event of Default" as defined in such agreement.
"PARI PASSU FACILITY AGENT'S OFFICE" means the office of each Pari
Passu Facility Agent identified as such in Schedule 1.1(a), or such other office
as the respective Pari Passu Facility Agent may hereafter designate by notice to
the Company, the Collateral Agent and the other Pari Passu Facility Agents.
"PARI PASSU FACILITY AGENTS" means, collectively, (i) the Initial
Facility Agents and (ii) the Other Pari Passu Facility Agents.
"PARI PASSU FINANCING AGREEMENTS" means, collectively, the Note
Purchase Agreements and the Other Pari Passu Financing Agreements.
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"PARI PASSU FINANCING DOCUMENTS" means, collectively, the Note
Documents, the Other Pari Passu Financing Agreements and all notes, collateral
documents, Guaranties, subordination agreements, and any other material
agreement or instrument executed or delivered by the Company or any Subsidiary
in connection with any Pari Passu Debt, and all amendments, exhibits and
schedules to any of the foregoing.
"PARI PASSU FINANCINGS" means the loans made or notes purchased
pursuant to the Pari Passu Financing Agreements, and "Pari Passu Financing"
means any of such loans or notes.
"PARI PASSU GUARANTOR" means any Person that guaranties the
obligations of the Company under any Pari Passu Debt (other than any Vendor
Party pursuant to an Initial Purchaser Guaranty).
"PARI PASSU LIEN" means a Lien securing Other Pari Passu Debt and
subject to the collateral sharing arrangements contained in Article 9 hereof.
"PARI PASSU OBLIGATIONS" means all present and future obligations and
liabilities of the Company Parties of every type and description arising under
or in connection with the Pari Passu Financing Documents due or to become due to
the Pari Passu Creditor Parties, any Paying Agent or any Person entitled to
indemnification thereunder, or any of their respective successors, transferees
or assigns, whether for principal, interest, fees, expenses, indemnities or
other amounts (including attorneys' fees and expenses) and whether due or not
due, direct or indirect, joint and/or several, absolute or contingent, voluntary
or involuntary, liquidated or unliquidated, determined or undetermined, and
whether now or hereafter existing, renewed or restructured.
"PARTICIPATION" means, with respect to any Pari Passu Creditor, a
participation in all or any portion of such Pari Passu Creditor's Pari Passu
Commitments or Pari Passu Financings.
"PAYING AGENCY AGREEMENT" means that certain paying agency agreement
dated as of the date hereof by and among the Paying Agent, the Company, the
Initial Facility Agents and the Collateral Agent.
"PAYING AGENT" is defined in the Pari Passu Financing Agreements.
"PAYING AGENT'S ACCOUNT" means the account of the Paying Agent
identified as such in Schedule 1.1(a), or such other account as the Paying Agent
may hereafter designate by notice to the Company, the Collateral Agent and each
Pari Passu Facility Agent.
"PAYING AGENT'S OFFICE" means the account of the Paying Agent
identified as such in Schedule 1.1(a), or such other account as the Paying Agent
may hereafter designate by notice to the Company, the Collateral Agent and each
Pari Passu Facility Agent.
"PERMITTED BUSINESS" means any of the following: (a) the Expanded
Project, (b) the provision of nationwide data, packet switched data and internet
access services pursuant to the Mirror Authorizations (including the Data
Licenses and the licenses for dedicated line services and special services of
audio and video signal retransmission issued by Anatel on
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September 23, 1999), as amended, (c) the rendering of inter-regional and
international long distance telecommunications services and (d) after December
31, 2001, the provision of telecommunications services in other regions of
Brazil substantially identical to those permitted to be offered under the Mirror
Authorizations as of the date hereof, when permissible under the terms of the
Mirror Authorizations, so long as prior to commencing such services under this
clause (d), (A) the Company has provided the Pari Passu Facility Agents with an
updated Business Plan, including projections, as approved by the Board of
Directors of the Company, (B) the Company is in compliance with all material
terms of the Mirror Authorizations and no Default or Event of Default then
exists, and (C) the Board of Directors of the Company has determined that, in
good faith, and based upon the projections referred to above, after giving
effect to the implementation of its business plan and its plan for such other
services, the Company will be in compliance with the covenants set forth in
Article 5 of this Agreement at all times through the latest of the Initial
Repurchase Dates and Final Maturity Dates, as the case may be, of the Pari Passu
Debt.
"PERMITTED CPE FINANCING" means any Purchase Money Debt incurred to
finance the acquisition of customer premise equipment.
"PERMITTED ICMS DEBT" means any Debt of the Company from any
Governmental Authority of Brazil or any political subdivision thereof, provided
such Debt (a) bears a subsidized rate of interest not to exceed 10% per annum,
(b) is not secured by any assets of the Company or any Subsidiary or benefited
by any guaranty by the Company or any Subsidiary, (c) is in all respects pari
passu with (or subordinate to) the Obligations, (d) does not require any payment
of principal prior to 180 days after the Maturity Repurchase Date, (e) does not
carry significant terms which are more burdensome to the Company and the
Subsidiaries than the terms of the Note Documents and (f) shall be designated as
Funding Gap Financing to the extent that all Debt incurred under the Funding Gap
Financings (giving effect to such Permitted ICMS Debt) does not exceed [***].
"PERMITTED LIENS" means, with respect to any asset, the Liens (if any)
permitted to exist on such asset under Section 5.1.
"PERMITTED REFINANCING DEBT" means any Debt of the Company or any of
its Subsidiaries issued in exchange for, or the net proceeds of which are used
to extend, repay, refinance, renew, replace, defease or refund other Debt of the
Company or any of its Subsidiaries; provided that:
(i) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Debt does not exceed the principal amount of (or accreted
value, if applicable), plus accrued interest on, the Debt so extended,
refinanced, renewed, replaced, defeased or refunded (plus the amount of
reasonable expenses incurred in connection therewith);
(ii) such Permitted Refinancing Debt has a final maturity date equal
to or later than the final maturity date of, and has a weighted average life to
maturity equal to or greater than the weighted average life to maturity of, the
Debt being extended, refinanced, renewed, replaced, defeased or refunded;
[*] 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.
Common Terms Agreement
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(iii) if the Debt being extended, refinanced, renewed, replaced,
defeased or refunded is Subordinated Debt (including Exchange Debt in the form
of Subordinated Debt), such Permitted Refinancing Debt is subordinated in right
of payment to the Pari Passu Obligations of the Company or such Subsidiary on
terms at least as favorable to Secured Parties as those contained in the
documentation governing the Subordinated Debt being extended, refinanced,
renewed, replaced, defeased or refunded;
(iv) if the Debt being extended, refinanced, renewed, replaced,
defeased or refunded is Exchange Debt, Permitted Unsecured Debt or Permitted
ICMS Debt, such Permitted Refinancing Debt is also Excluded Debt, Permitted
Unsecured Debt or Permitted ICMS Debt, as the case may be, and the terms
thereof, as a whole, are no less favorable to the Company than the Debt being
refinanced;
(v) if the Debt being refinanced, replaced or refunded is the
Obligations, such Permitted Refinancing Debt constitutes Permitted Unsecured
Debt;
(vi) such Debt is incurred either by the Company or by the Subsidiary
who is the obligor on the Debt being extended, refinanced, renewed, replaced,
defeased or refunded; and
(vii) no Default or Event of Default then exists or would result from
such extension, refinancing, renewal, replacement, defeasance or refunding.
"PERMITTED TRANSFEREE" means (i) any Person listed on Schedule 1.1(e)
or (ii) any other Person who is experienced internationally in the operation of
telephone systems or projects, provided that at the time of any such transfer of
shares from BCI to such Person described in this clause (ii), (a) such Person
has outstanding unsecured and unsupported senior debt with a rating by Xxxxx'x
or S&P at least equal to the higher of (x) the ratings held by BCI at the time
of the transfer and (y) Baa (Xxxxx'x) or BBB (S&P), or if no outstanding
unsecured and unsupported senior debt of such Person is so rated, then the
Required Pari Passu Creditors have consented to the transfer and (b) all of the
operational rights and obligations of BCI under the Shareholder Agreement are
assigned to such Person and such rights as assigned shall not differ in any
material respect from the rights held by BCI under the Shareholder Agreement, as
in effect as of the Closing Date, as amended by the Shareholder Consent and
Agreement and as further amended with the consent of the Pari Passu Creditors in
accordance with Section 9.8.
"PERMITTED UNSECURED DEBT" means unsecured Debt (i) that constitutes
Excluded Debt and is not designated as Funding Gap Financing, (ii) the terms and
conditions of which are not more burdensome to the Company in any respect than
the Obligations and (iii) the proceeds of which are applied to prepay the Pari
Passu Debt in accordance with the provisions of Section 8.1(d).
"PERSON" means an individual, a corporation, a partnership, a limited
liability company, a trust, an unincorporated organization or any other entity
or organization, including a government or any agency or political subdivision
thereof.
"PRIOR APPROVAL" means an approval issued by the Central Bank in
respect of any Pari Passu Financing, which authorizes the closing of a foreign
exchange transaction for the
Common Terms Agreement
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entrance of the proceeds of such Pari Passu Financing into Brazil and approves
the basic financial terms thereof, including all scheduled payments of
principal, interest, fees, expenses and commissions in respect thereof and
optional redemptions, repurchases or prepayments no less frequently than
quarterly (or such lesser frequency as may then be generally approved by the
Central Bank).
"PROCEEDS ACCOUNT PLEDGE AGREEMENTS" means the Proceeds Account Pledge
Agreements as entered into pursuant to and as defined in each of the Note
Purchase Agreements.
"PROCEEDS ACCOUNTS" means the Proceeds Accounts established under and
as defined in each of the Note Purchase Agreements.
"PROCEEDS COLLATERAL AGENT" is defined in the relevant Note Purchase
Agreement.
"PROCEEDS SECURED PARTIES" means, collectively, in respect of the
security interest granted under any Proceeds Account Pledge Agreement relating
to a Note Purchase Agreement, (i) the Purchaser Parties under such Note Purchase
Agreement, and (ii) each Swap Lender under any Interest Hedge Agreement the
Company's obligations under which are included in the Obligations under such
Note Purchase Agreement pursuant to Section 5.2.
"PROJECT" is defined in the Recitals.
"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.
"PURCHASE MONEY DEBT" means Debt of the Company financing the
acquisition of any asset of the Company; provided (i) the principal amount of
such Debt is not less than 60% and does not exceed 100% of the purchase price,
including freight and sales taxes and other similar expenses, (ii) such Debt is
secured only by the asset being acquired and no other assets of the Company
Parties or any of the Subsidiaries, and (iii) such Debt is incurred within 120
days following the date of the acquisition.
"PURCHASE MONEY LENDER" means any Person holding Purchase Money Debt.
"PURCHASER" means (i) the Nortel Purchasers, the Qualcomm/Ericsson
Purchasers, the Xxxxxx Purchasers, (ii) unless the context indicates otherwise,
each of Ericsson and Nortel if it has Commitments, holds any Notes or Exchange
Debt or provides an Initial Purchaser Guaranty, (iii) unless the context
indicates otherwise, Qualcomm, if it has Commitments or holds any Notes or
Exchange Debt and (iv) unless the context indicates otherwise, Xxxxxx if it has
Commitments, holds any Notes or provides an Initial Purchaser Guaranty.
"PURCHASER PARTIES" means, collectively, the Purchasers, Nortel,
Qualcomm, Ericsson, Xxxxxx, the Collateral Agent, the Proceeds Collateral Agent
and the Initial Facility Agents.
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"PURCHASERS' FEE LETTERS" is defined in each of the Note Purchase
Agreements.
"QUALCOMM" means Xxxxxxxx Xxxxxxxxxxxx, a Delaware corporation.
"QUALCOMM/ERICSSON FACILITY AGENT" is defined in the Preamble.
"QUALCOMM/ERICSSON NOTE PURCHASE AGREEMENT" means the Secured Note
Purchase Agreement dated as of the date hereof by and among the Company,
Ericsson, the Qualcomm/Ericsson Purchasers and the Qualcomm/Ericsson Facility
Agent, as the same may from time to time be amended.
"QUALCOMM/ERICSSON PURCHASERS" is defined in the Preamble.
"QUALIFYING FUNDED EQUITY" means, at any date of determination, the
sum of (i) amount of cash capital contributions made directly or indirectly, to
the Company on or prior to such date in respect of common equity of the Company
and (ii) the amount of cash capital contributions in respect of preferred equity
of the Company (other than Redeemable Capital Stock) that carries no unwaived
rights to cash dividends, each calculated in Dollars at the PTAX 800 Rate
prevailing at the time such contribution is made and in each case net of
dividends since the Closing Date, and other Restricted Payments otherwise
permitted hereby. The total amount of Qualifying Funded Equity as of the date
hereof is $65,966,822.
"QUALIFYING SHAREHOLDER LOANS" mean, as at any date of determination
thereof, Shareholder Loans; but only if the total amount of all Qualifying
Funded Equity on such date equals or exceeds $200 million.
"REAIS" or "R$" means the lawful money of Brazil.
"REAL PROPERTY" means each of those parcels (or portions thereof) of
real property, improvements and fixtures thereon and appurtenances thereto now
or hereafter owned, leased or occupied by the Company or any Subsidiary.
"REALIZATION" means, with respect to any Collateral, any Foreclosure
Action or other event that results in the receipt by any Pari Passu Facility
Agent or the Collateral Agent of cash proceeds of or from such Collateral,
including any payment or distribution of assets of any Company Party that is
attributable to such Collateral (or the proceeds thereof) or a secured claim in
the event of any Insolvency or Liquidation Proceeding or any distribution of
assets or dissolution, winding up, liquidation, reorganization, readjustment of
indebtedness, sale of all or substantially all the assets, or marshaling of
assets, of any Company Party (whether in any Insolvency or Liquidation
Proceeding or otherwise), insurance or condemnation proceeds, proceeds of any
guaranty or indemnity or warranty, provided the Collateral Agent is directed or
authorized pursuant to any Collateral Document to distribute such cash proceeds
to any Pari Passu Facility Agent or the Collateral Agent for the payment of the
Pari Passu Debt or other obligations of any Company Party under any Pari Passu
Financing Document.
"RECEIVABLES ASSETS" is defined in Section 4.10(c).
"RECONSIDERATION PERIOD" is defined in Section 9.3(c).
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"REDEEMABLE CAPITAL STOCK" of any Person means any Capital Stock of
such Person that by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or otherwise (including on the
happening of an event), is required to be redeemed or is redeemable at the
option of the holder thereof, in whole or in part (including by operation of a
sinking fund), or is exchangeable for Debt (other than at the option of such
Person), in whole or in part, at any time prior to the 181st day after the
latest of the Initial Repurchase Dates and Final Maturity Dates, as the case may
be, of each of the Pari Passu Financings.
"REQUIRED PARI PASSU CREDITORS" means at any date of determination,
Pari Passu Creditors under each Pari Passu Financing Agreement then in effect,
voting as a separate class, holding more than 50% (in Dollar amount) of the sum
of (a) the aggregate outstanding principal amount of the Pari Passu Debt
outstanding under such Pari Passu Financing Agreement, plus (b) until the
termination of such commitments, the undrawn amount of the aggregate Pari Passu
Commitments under such Pari Passu Financing Agreement, if any, provided that the
Pari Passu Commitments or Pari Passu Debt, as applicable, of (i) any Defaulting
Pari Passu Creditor and (ii) any Affiliate of the Company shall be disregarded
for purposes of this determination.
"REQUIRED PERCENTAGE" is defined in Section 7.1(b).
"REPLACEMENT XXXXXX FINANCING AGREEMENT" is defined in Section 4.9(b).
"REPLACEMENT XXXXXX SUPPLY AGREEMENT" is defined in Section 4.9(b).
"RESTRICTED PAYMENT" means (i) any dividend, distribution or other
payment, direct or indirect, to or for the benefit of any holder of any Capital
Stock of the Company or any of the Subsidiaries now or hereafter outstanding,
except a dividend or other distribution payable solely in shares or equivalents
of Capital Stock, (ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of any
Capital Stock of the Company or any of the Subsidiaries now or hereafter
outstanding, (iii) any payment made by the Company or any of the Subsidiaries to
redeem, repurchase, defease (including an in-substance or legal defeasance) or
otherwise acquire or retire for value, prior to any scheduled maturity,
scheduled sinking fund or mandatory redemption payment, of Subordinated Debt of
the Company or any of the Subsidiaries or (iv) any payment made by the Company
or any of the Subsidiaries in respect of principal of or interest (or premium,
if any) on any Shareholder Loan or Exchange Debt (or any Permitted Refinancing
Debt in respect of Exchange Debt incurred pursuant to Section 5.2(a)).
"S&P" means Standard & Poor's Rating Group.
"SALE AND LEASEBACK TRANSACTION" means, with respect to any Person,
any direct or indirect arrangement pursuant to which property is sold or
transferred by such Person or a Subsidiary of such Person and is thereafter
leased back from the purchaser or transferee thereof by such Person or one of
its Subsidiaries.
"SEC" means the United States Securities and Exchange Commission.
Common Terms Agreement
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"SECONDMENT AGREEMENT" means that certain Secondment Agreement, dated
August 15, 1999, between BCI and the Company, as amended from time to time as
permitted hereby.
"SECURED PARTIES" means, collectively, (i) the Pari Passu Creditor
Parties, (ii) the Collateral Agent and (iii) each Swap Lender under any Interest
Hedge Agreement the Company's obligations under which are included in the
Obligations pursuant to Section 5.2. Unless the context otherwise requires,
"Secured Parties" includes the Proceeds Secured Parties when relating to the
Proceeds Account Pledge Agreement or any Collateral thereunder.
"SECURITY AGREEMENTS" means, collectively, the Company Security
Agreements, the Subsidiary Security Agreements, the HoldCo Stock Pledge
Agreement, the Shareholder Pledge Agreement, the Brazilian Shareholder Pledge
Agreement and all other agreements, documents or instruments evidencing or
creating a Lien in personal property or fixtures as security for the Pari Passu
Obligations or any portion thereof executed by any Company Party, in favor of
the Collateral Agent for the benefit of the Secured Parties, in each case
whether executed on or before the Closing Date or subsequently executed in
accordance or connection with this Agreement or any other Note Document, and as
amended from time to time.
"SENIOR DEBT" means, as of any date of determination, (i) Total Debt
minus (ii) the aggregate principal amount (or issue price, as applicable) of all
Excluded Debt and Shareholder Loans then outstanding, determined on a
consolidated basis in accordance with GAAP and in Dollars at the PTAX 800 Rate
in effect on such date.
"SENIOR OFFICER" means the Chairman of the Board of Directors of
HoldCo or of the Company, the President, the Chief Executive Officer, the Chief
Operating Officer, the Chief Financial Officer, the Treasurer or any Vice
President in charge of a principal business unit or division of any Company
Party or any other director or officer with a title and position equivalent in
all respects.
"SHAREHOLDER" means any of Xxxx Canada International (Brazil Telecom
I) Limited, Qualcomm do Brasil Ltda. or VeloCom Cayman Brasil Holdings, or any
other Person that holds any Capital Stock of HoldCo from time to time.
"SHAREHOLDER AGREEMENT" means the shareholder agreement dated as of
February 4, 1999 by and among HoldCo and the Shareholders, as amended from time
to time as permitted hereby.
"SHAREHOLDER CONSENT AND AGREEMENT" means that certain Consent and
Agreement dated as of September 22, 1999 by and among the Shareholders and
HoldCo.
"SHAREHOLDER LOAN" means any loan made to the Company by any
Shareholder, HoldCo or any of their Affiliates, provided that:
(i) no payments of principal or interest on Shareholder Loans
(other than payments of interest solely in the form of additional
Shareholder Loans) will be due or made until 180 days after the latest of
the Initial Repurchase Dates and Final Maturity
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Dates, as the case may be, of the Pari Passu Debt and that Shareholder
Loans cannot be accelerated prior to payment in full of all Pari Passu
Obligations and will not contain any non-payment covenants;
(ii) in bankruptcy or insolvency proceedings, Shareholder Loans
will be subordinate to all Pari Passu Debt and all distributions that would
otherwise be allocated to those loans would instead be paid to the
Collateral Agent on behalf of the Secured Parties;
(iii) all voting and other consensual rights with respect to
Shareholder Loans will be assigned to the Collateral Agent on behalf of the
Secured Parties to the extent provided in the Shareholder Pledge Agreement
or the Brazilian Shareholder Pledge Agreement;
(iv) Shareholder Loans will be pledged by the holders thereof as
security for the Pari Passu Obligations of the Company pursuant to the
Shareholder Pledge Agreement or the Brazilian Shareholder Pledge Agreement;
(v) Shareholder Loans cannot be transferred to any Person other
than a Shareholder or an Affiliate thereof or a transferee of such
Shareholder's shares in HoldCo; and
(vi) Shareholder Loans are subject to certain other restrictions,
all as set forth in the Shareholder Pledge Agreement or the Brazilian
Shareholder Pledge Agreement;
provided further, however, that Notes purchased by Qualcomm pursuant to the
Qualcomm/Ericsson Note Purchase Agreement shall not be deemed to be Shareholder
Loans for any purpose.
"SHAREHOLDER PARTY" means, on any date of determination, any
Shareholder or any Parent Shareholder.
"SHAREHOLDER PLEDGE AGREEMENT" means the Shareholder Pledge and
Subordination Agreement among (i) the Company, (ii) the Shareholders, the Parent
Shareholders and HoldCo and such of their Affiliates who have extended
Shareholder Loans or other loans to the Company or any Subsidiary, (iii) such of
the foregoing who are party to any Affiliate Agreement, and (iv) the Collateral
Agent, substantially in the form of Exhibit C-3A hereto (or, if there is no such
Exhibit on the date hereof, acceptable in form and substance to the Initial
Purchasers or, after the Initial Purchaser Release Date with respect to all
Vendor Parties, the Collateral Agent), as amended from time to time. Unless the
context otherwise requires, references to the Shareholder Pledge Agreement shall
include the Brazilian Shareholder Pledge Agreement.
"SHORT-TERM DEBT" means, as of any date of determination, Debt of the
Company on such date other than Long-Term Debt.
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"SIGNIFICANT PARI PASSU FACILITIES" means any Pari Passu Financing
Agreement with respect to which the aggregate principal amount of the
Commitments of the Pari Passu Creditors thereunder represents 20% or more of the
aggregate principal amount of the Commitments of all Pari Passu Creditors under
all Pari Passu Financing Agreements.
"SOLVENT" means, with respect to any Person as of any date, that: (i)
the total present fair salable value of such Person's assets or their "fair
salable value" (as such term is understood in the Applicable Law regarding
bankruptcy, insolvency, receivership or similar matters) is in excess of the
total amount of such Person's debts and liabilities, including contingent
liabilities, (ii) such Person is able to pay its debts and liabilities,
including contingent liabilities, as they become due, (iii) such Person does not
have unreasonably small capital or assets to carry on such Person's business as
theretofore operated and as proposed to be operated, and (iv) such Person does
not intend to, or does not believe that it will, incur debts or liabilities
beyond such Person's ability to pay as such debts and liabilities mature, in
each case as of such date. The meaning of the terms "fair valuation" and "fair
salable value" and the other terms used in this definition, and the calculation
of assets, debts and liabilities shall be determined and made in accordance with
the relevant provisions of the Applicable Law regarding bankruptcy, insolvency,
receivership or similar matters and applicable fraudulent conveyance or transfer
laws.
"SPECIFIED COMPANY PARTY" is defined in Section 6.1(f).
"SUBORDINATED DEBT" means (i) Shareholder Loans or (ii) any Debt of
the Company or any Subsidiary hereafter incurred that is subordinated in right
or time of payment to the Pari Passu Obligations.
"SUBORDINATION AGREEMENT" means any Intercompany Debt Subordination
Agreement, the Shareholder Pledge Agreement or any subordination provisions of
any Subordinated Debt.
"SUBSCRIBER SEGMENT" is defined within the definition of Subscribers.
"SUBSCRIBERS" means, at any time, all customers then receiving
telecommunications services from the Company and its Subsidiaries. For purposes
of Section 4.1(d), Subscribers shall be broken down into business and
residential segments, each a "Subscriber Segment."
"SUBSIDIARY" means, with respect to any Person, any other Person of
which more than 50% of the total voting power of the Voting Stock are at the
time, directly or indirectly, owned by such first Person. Unless otherwise
indicated, "Subsidiary" refers to a Subsidiary of the Company.
"SUBSIDIARY CONTRACTS PLEDGE AGREEMENT" means the Subsidiary Contracts
Pledge Agreement between a Subsidiary and the Collateral Agent, in a form
substantially similar to the Company Contracts Pledge Agreement, with such
modifications thereto as the Collateral Agent may reasonably determine are
necessary in order to reflect the circumstance that such
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agreement relates to a Subsidiary of the Company rather than to the Company, as
amended from time to time.
"SUBSIDIARY EQUIPMENT PLEDGE AGREEMENT" means the Subsidiary Equipment
Pledge Agreement between a Subsidiary and the Collateral Agent, in a form
substantially similar to the Company Equipment Pledge Agreement, with such
modifications thereto as the Collateral Agent may reasonably determine are
necessary in order to reflect the circumstance that such agreement relates to a
Subsidiary of the Company rather than to the Company, as amended from time to
time.
"SUBSIDIARY GUARANTOR" means any Subsidiary (i) that has become party
to the Subsidiary Guaranty, the Subsidiary Security Agreements, the Intercompany
Debt Subordination Agreement and all other Pari Passu Financing Documents as
required by Section 4.10, and (ii) all the issued and outstanding Capital Stock
of which has been pledged to the Collateral Agent pursuant to the Company Stock
Pledge Agreement or a Subsidiary Stock Pledge Agreement; but in any event does
not include Vesper Cayman SPV.
"SUBSIDIARY GUARANTY" means the guaranty made by a Subsidiary in favor
of the Collateral Agent, in a form substantially similar to the HoldCo Guaranty,
with such modifications thereto as the Collateral Agent may reasonably determine
are necessary in order to reflect the circumstance that such agreement relates
to a Subsidiary of the Company rather than to HoldCo, as amended from time to
time.
"SUBSIDIARY RECEIVABLES PLEDGE AGREEMENT" means the Subsidiary
Receivables Pledge Agreement between a Subsidiary and the Collateral Agent, in a
form substantially similar to the Company Receivables Pledge Agreement, with
such modifications thereto as the Collateral Agent may reasonably determine are
necessary in order to reflect the circumstance that such agreement relates to a
Subsidiary of the Company rather than to the Company, as amended from time to
time.
"SUBSIDIARY SECURITY AGREEMENTS" means, collectively, in respect of
any Subsidiary, a Subsidiary Contracts Pledge Agreement, a Subsidiary Equipment
Pledge Agreement, a Subsidiary Receivables Pledge Agreement, a Subsidiary Stock
Pledge Agreement, and such other collateral agreements as may be required in the
determination of the Collateral Agent to grant a valid, enforceable and first
priority Lien in all of the Collateral owned by such Subsidiary.
"SUBSIDIARY STOCK PLEDGE AGREEMENT" means the Subsidiary Stock Pledge
Agreement between a Subsidiary and the Collateral Agent, in a form substantially
similar to the HoldCo Stock Pledge Agreement, with such modifications thereto as
the Collateral Agent may reasonably determine are necessary in order to reflect
the circumstance that such agreement relates to a Subsidiary of the Company
rather than to HoldCo, as amended from time to time.
"SUPPLY AGREEMENTS" means the Nortel Supply Agreement, the Ericsson
Supply Agreement and the Xxxxxx Supply Agreement, as amended from time to time,
and any replacement supply agreements for any of the foregoing, including the
Replacement Xxxxxx Supply Agreement.
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"SWAP LENDER" means any Pari Passu Creditor, any Affiliate of a Pari
Passu Creditor or any other financial institutions reasonably acceptable to the
Collateral Agent, that acts as the counterparty in any Interest Hedge Agreement
in respect of the Pari Passu Obligations, but shall not include any Affiliate of
the Company.
"TAX WITHHOLDING AMOUNT" means an amount equal to the reasonably
estimated amount of income or capital gains Tax, as the case may be, payable as
a result of an Asset Disposition, taking into account any reduction in the
amount of Taxes corresponding to the estimated effect of other income or losses,
deductions and credits reasonably anticipated at such time.
"TAXES" means any present or future income, stamp and other taxes,
charges, fees, levies, duties, imposts, withholdings or other assessments,
together with any interest and penalties, additions to tax and additional
amounts imposed by any federal, state, local or foreign taxing authority upon
any Person.
"TECHNICAL SERVICES AGREEMENTS" means, collectively, the BCI Technical
Services Agreement and the VeloCom Technical Services Agreement.
"TOTAL CAPITALIZATION" means, as of any date of determination, the sum
of (i) the Total Debt plus (ii) Funded Equity, in each case as of such date and
determined (without duplication) on a consolidated basis in accordance with
GAAP.
"TOTAL DEBT" means, as of any date of determination, the aggregate
principal amount (or, in the case of Debt issued at a discount to par, issue
price) of all Debt of the Company and its Subsidiaries (excluding, solely for
any determination made for the purpose of determining the amount of Debt (other
than the Notes) that may be incurred by the Company and its Subsidiaries
pursuant to Section 5.2 with respect to a date prior to May 31, 2000, 80% of the
proceeds of the Notes held on the date of such determination in the Proceeds
Accounts pursuant to the terms of the Note Purchase Agreements), determined on a
consolidated basis in accordance with GAAP and in Dollars at the PTAX 800 Rate
in effect on such date.
"TOTAL LINES" means, at any time, the total number of telephone lines
in service, per Subscriber Segment, connected to the telecommunication networks
of the Company and its Subsidiaries and for which the Company and its
Subsidiaries are providing telecommunications services, in each case at such
time.
"US GAAP" means generally accepted accounting principles as in effect
in the United States of America (as such principles are in effect on the date
hereof).
"VELOCOM" means VeloCom Inc., a Delaware corporation.
"VELOCOM TECHNICAL SERVICES AGREEMENT" means that certain Technical
Services Agreement to be entered into by and between VeloCom and the Company, as
amended from time to time as permitted hereby.
"VENDOR PARTIES" means Nortel, Qualcomm, Ericsson and Xxxxxx and
includes any of their respective Affiliates that holds Exchange Debt from time
to time.
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"VESPER CAYMAN SPV" means Vesper Cayman , a single-purpose,
bankruptcy-remote, Wholly-Owned Subsidiary of the Company incorporated under the
laws of The Cayman Islands.
"VOTING STOCK" means, with respect to any Person, as of any date, the
outstanding capital stock of such Person that is at the time entitled to vote in
the election of the Board of Directors of the Company or comparable body of such
Person.
"WHOLLY-OWNED SUBSIDIARY" means, at any date, any Subsidiary of the
Company of which 100% of the Capital Stock (except for directors' qualifying
shares, and any one share issued to a person other than the Company or any of
its Wholly-Owned Subsidiaries to qualify such Subsidiary as a "limitada" or
other relevant juridical entity under applicable law) is owned directly by the
Company or through one or more of its other Wholly-Owned Subsidiaries.
"WORKING CAPITAL" means, at any time, the total consolidated current
assets of the Company and its consolidated Subsidiaries, minus the total
consolidated current liabilities of the Company and its consolidated
Subsidiaries, in each case determined on a consolidated basis in accordance with
GAAP, at such time and in Dollars at the PTAX 800 Rate in effect at such time.
"WORKING CAPITAL FACILITY" means one or more working capital
facilities, the aggregate principal amount of which does not exceed the greater
of (i) [***] or (ii) [***] of annual revenues of the Company and the Subsidiary
Guarantors for the most recently ended Fiscal Year, but in any event not to
exceed [***], at any time outstanding, provided that not more than [***] of the
aggregate principal amount allowable at any time under the Working Capital
Facility may be Long-Term Debt.
"YEAR 2000 COMPLIANT" is defined in Section 3.18.
SECTION 1.2. RELATED MATTERS.
(a) CONSTRUCTION. Unless the context of this Agreement clearly
requires otherwise, references to the plural include the singular, the singular
includes the plural, the part includes the whole, and "including" is not
limiting. The words "hereof," "herein," "hereby," "hereunder" and similar terms
in this Agreement refer to this Agreement as a whole (including the Preamble,
the Recitals, the Schedules and the Exhibits) and not to any particular
provision of this Agreement. Article, section, subsection, exhibit, schedule,
recital and preamble references in this Agreement are to this Agreement unless
otherwise specified. References in this Agreement to any agreement, other
document or law "as amended" or "as amended from time to time" (including in the
definition of this "Agreement"), or to amendments of any document or law, shall
include any amendments, supplements, replacements, renewals, waivers or other
modifications. References in this Agreement to any law (or any part thereof)
include any rules and regulations promulgated thereunder (or with respect to
such part) by the relevant Governmental Authority, as amended from time to time.
All lower-case terms defined in the Uniform Commercial Code of the State of New
York (including "equipment," "accounts" and "general intangibles") have the same
meanings in this Agreement. Any reference to any Person not a party to this
Agreement shall, unless otherwise specified herein, include such Person's
[*] 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.
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successors and assigns. All Notes issued to or registered in the name of a
Purchaser (or in the name of the respective Initial Facility Agent or any other
designee on its behalf) shall be deemed "held" by such Purchaser,
notwithstanding that payments in respect thereof are required to be made to a
Paying Agent.
(b) DETERMINATIONS. Any numerical determination or calculation
contemplated by this Agreement that is made by any Pari Passu Creditor Party
shall be presumed correct and be binding upon the Company Parties, and, in the
case of determinations by the Collateral Agent, also the Pari Passu Facility
Agents and the other Pari Passu Creditor Parties, in the absence of manifest
error. References in this Agreement to any "determination" by any Pari Passu
Creditor Party include good faith estimates by such Pari Passu Creditor Party
(in the case of quantitative determinations), and good faith beliefs by such
Pari Passu Creditor Party (in the case of qualitative determinations). All
consents and other actions of any Pari Passu Creditor Party contemplated by this
Agreement may be given, taken, withheld or not taken in good faith in such Pari
Passu Creditor Party's absolute and sole discretion (whether or not so
expressed), except as otherwise expressly provided herein.
(c) ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise specified
herein (and whether or not expressly stated), all accounting terms used herein
shall be interpreted, all accounting determinations (including determinations of
consolidation) hereunder shall be made, and all financial statements required to
be delivered hereunder shall be prepared in accordance with GAAP. All
determinations under the Financial and Operating Covenants shall be made in
Dollars converted in accordance with the provisions hereof, including Section
1.2(e).
(d) INDEPENDENCE OF COVENANTS. All covenants under this Agreement
shall each be given independent effect so that if a particular action or
condition is not permitted by any such covenant, the fact that it would be
permitted by another covenant, by an exception thereto, or be otherwise within
the limitations thereof, shall not avoid the occurrence of a Default or an Event
of Default if such action is taken or condition exists.
(e) CURRENCY CONVERSION. Except as otherwise expressly specified
herein, for purposes of converting to Dollar amounts any amounts expressed in
Brazilian Reais (i) as of any date, the currency exchange rate shall be the PTAX
800 Rate for such date; (ii) for any period, the currency exchange rate shall be
the Average Conversion Factor for such period; and (iii) with respect to any
amount contributed by the Shareholders after the date hereof, the currency
exchange rate shall be the PTAX 800 Rate for the date of such contribution;
provided, however, that with respect to any amount contributed by the
Shareholders prior to the date hereof, the amount of such contribution for
purposes of this Agreement shall be equal to the amount thereof reflected in the
definitions of "Funded Equity" and "Qualifying Funded Equity."
ARTICLE 2
CONDITIONS TO PURCHASE OF NOTES; POST-CLOSING MATTERS
SECTION 2.1. CLOSING CONDITIONS. The occurrence of the Closing Date and the
obligation of each Purchaser to purchase an initial Note under its respective
Note Purchase Agreement, is
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subject to the conditions precedent specified in this Section 2.1 having been
met in form and substance satisfactory to, or waived by, the Collateral Agent
and each of the Purchaser Parties:
(a) CLOSING DATE. The Closing Date shall occur on or before December
17, 1999.
(b) CERTAIN DOCUMENTS. The Collateral Agent shall have received the
documents listed in Schedule 2.1, all of which shall be in form and substance
satisfactory to each of the Purchaser Parties, and the Material Contracts and
Note Documents listed therein shall be in full force and effect.
(c) NO MATERIAL ADVERSE CHANGE, LITIGATION OR CHANGE IN LAW. No
Material Adverse Change shall have occurred since the date of the financial
statements referred to in Section 3.6. No change in Applicable Law shall have
occurred that would make illegal any of the Note Purchase Agreements or other
Note Documents, any Material Contracts, the making or repayment of the Notes,
the payment of any interest, Fees, expenses or other amounts as required by the
Note Documents or any of the other transactions contemplated by the Note
Documents or Material Contracts.
(d) FEES AND EXPENSES PAID. The Company shall have paid to the Paying
Agent, to the Pari Passu Creditor Parties or, in the case of expenses, to any
other Person entitled thereto (i) all Fees due to the Pari Passu Creditor
Parties on or before the Closing Date under the Note Documents, and (ii) all
expenses for which the Company shall have been billed on or before the Closing
Date, to the extent such expenses are reimbursable under the Note Documents and
denominated and payable in Reais.
(e) SATISFACTION OF CERTAIN CONDITIONS. The conditions set forth in
Sections 2.2(b) and 2.2(c) shall be satisfied on and as of the Closing Date as
if such date were a Funding Date.
(f) CAPITAL CONTRIBUTION. The Company shall have provided evidence
satisfactory to the Collateral Agent and each of the Purchaser Parties that the
Company has received net cash equity proceeds of at least $65,966,822 in the
form of Qualifying Funded Equity.
(g) GOVERNMENTAL APPROVALS. The Collateral Agent and the Purchaser
Parties shall have received evidence that all prior and contemporaneous
Governmental Approvals with any Governmental Authority that may be required as
of the Closing Date in connection with the execution, delivery and performance
of any Pari Passu Financing Document by any Person a party thereto have been
obtained and are in full force and effect, including Prior Approvals and any
other Governmental Approvals required for all issuances of notes or
disbursements of loans that may be made on the Closing Date under the Pari Passu
Financing Documents, and the scheduled payments of principal, interest,
front-end fees, and expenses in respect thereof in accordance with the
provisions of the relevant Pari Passu Financing Agreements.
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(h) SECURITY FILINGS. The Collateral Agent and the Purchasers shall
have received evidence that all registrations, filings and other actions as are
necessary to ensure the validity and first priority of the Liens on the
then-existing Collateral (other than immaterial items) have been taken.
(i) LICENSES AND PERMITS. The Collateral Agent shall be satisfied that
(i) any Governmental Approval listed on Part A of Schedule 3.26 and not listed
on Part B of such Schedule is held by the Company or a Subsidiary and (ii) the
fee for each such Governmental Approval has been paid as required by Applicable
Law, in cash, prior to the Closing Date.
(j) MINIMUM COMMITMENT AMOUNTS. As of the Closing Date, with respect
to each Initial Purchaser, each Note Purchase Agreement to which such Initial
Purchaser is not party, shall provide for minimum commitment amounts reasonably
acceptable to such Initial Purchaser.
(k) NOTE DOCUMENTS.
(i) All conditions precedent to the effectiveness of all Note
Documents shall be satisfied on and as of the Closing Date.
(ii) Each party to any Note Document executed prior to the
Closing Date shall have delivered originally executed signature pages
thereto that, if executed in Brazil, have been witnessed by two witnesses
or, if executed outside of Brazil, have been notarized by a notary public
licensed as such under the laws of the place of signing.
(l) INITIAL PURCHASER GUARANTY DOCUMENTS. (i) Nortel shall have
furnished to the Nortel Facility Agent and the Nortel Purchasers (A) a
certificate of a Secretary or Assistant Secretary certifying as to the charter
documents and corporate authority of Nortel and the authority, incumbency, and
true signatures of the officers duly authorized to sign the Nortel Initial
Purchaser Guaranty and the other documents and instruments to be delivered in
connection therewith, (B) payment in full, in immediately available funds, of
the costs and expenses of the Nortel Facility Agent and the Nortel Purchasers
referred to in the Nortel Initial Purchaser Guaranty, if any, incurred by each
beneficiary thereof under the Nortel Initial Purchaser Guaranty that have been
invoiced at least two (2) Business Days before the Closing Date, (C) one or more
favorable opinion letters from counsel (which may be in-house counsel) to
Nortel, which are in form and substance acceptable to the Nortel Facility Agent
and the Nortel Purchasers, and (D) an executed copy of a letter from an agent
for service of process in the State of New York accepting its appointment as
process agent for Nortel under the Nortel Initial Purchaser Guaranty and related
documents; and (ii) Ericsson shall have furnished to the Qualcomm/Ericsson
Facility Agent and the Qualcomm/Ericsson Purchasers (A) a certificate of the
General Counsel of Ericsson certifying as to the Certificate of Registration and
the Articles of Association of Ericsson and (B) payment in full, in immediately
available funds, of the costs and expenses of the Qualcomm/Ericsson Facility
Agent and the Qualcomm/Ericsson Purchasers referred to in the Ericsson Initial
Purchaser Guaranty, if any, incurred by each beneficiary thereof under the
Ericsson Initial Purchaser Guaranty that have been invoiced at least two (2)
Business Days before the Closing Date.
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(m) GENERAL. All other documents and legal matters in connection with
the transactions contemplated by this Agreement shall have been delivered or
executed or recorded in form and substance satisfactory to the Collateral Agent
and the Purchasers, and the Collateral Agent and the Purchasers shall have
received all such counterpart originals or certified copies thereof as they may
request.
SECTION 2.2 CONDITIONS PRECEDENT TO FINANCINGS. The obligation of each Pari
Passu Creditor to make any loan or purchase any note pursuant to its respective
Pari Passu Financing Agreement on or before any Funding Date shall be subject to
the following conditions precedent (in addition to any conditions set forth in
such Pari Passu Financing Agreement), except as may be specifically provided in
any of the Pari Passu Financing Agreements, provided that the following
conditions precedent may be waived by the Pari Passu Creditor Parties in
accordance with Section 9.8(b).
(a) NOTICE OF BORROWING OR ISSUANCE. The Company shall have delivered
to the relevant Pari Passu Facility Agent, the Collateral Agent and the Pari
Passu Creditors, in accordance with the applicable provisions of the Pari Passu
Financing Agreements, a Notice of Borrowing or Notice of Issuance, as the case
may be.
(b) REPRESENTATIONS AND WARRANTIES. All of the representations and
warranties of the Company Parties contained herein and in the other Pari Passu
Financing Documents shall be true and correct in all material respects on and as
of the Funding Date as though made on and as of that date (except to the extent
that such representations and warranties expressly were made only as of a
specific date).
(c) NO DEFAULT. No Default or Event of Default shall exist or result
from the extension of such Pari Passu Financing (including under the Financial
and Operating Covenants).
(d) NO MATERIAL ADVERSE CHANGE. No Material Adverse Change shall have
occurred since the date of the financial statements referred to in Section
3.6(a), other than with respect to operating losses of the Company and its
Subsidiaries as reasonably contemplated by the Business Plan.
(e) PRIOR APPROVAL AND OTHER GOVERNMENT APPROVALS. The relevant Pari
Passu Facility Agent shall have received evidence satisfactory to it that a
Prior Approval in respect of each Pari Passu Financing then being extended, in
accordance with the provisions of the relevant Pari Passu Financing Agreement,
and all other Governmental Approvals necessary in connection with the execution,
delivery and performance of the Pari Passu Financing Documents, or to ensure the
legality, validity or enforceability thereof, have been obtained and are in full
force and effect. No order, judgment or decree of any Governmental Authority or
arbitrator, and no action, suit or proceeding is pending, against or affecting
HoldCo, the Company, any of the Subsidiaries or any of their respective
properties which would enjoin, prohibit, restrain or otherwise adversely affect
in a material manner the Pari Passu Creditors' ability to make the funds
available to the Company.
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(f) SATISFACTION OF CONDITIONS. Each extension of Pari Passu Financing
shall constitute a representation and warranty by the Company as of the Funding
Date that the conditions contained in Sections 2.2(a) through 2.2(e) have been
satisfied.
SECTION 2.3 POST-CLOSING MATTERS. Notwithstanding anything in Section 2.1
(including the purchase of Notes on the Closing Date notwithstanding the failure
of any condition set forth therein to have been satisfied), each of the Company
Parties shall, promptly after the Closing Date, diligently pursue each of the
matters set forth on Schedule 2.3 and finally resolve each such matter not later
than the date set forth opposite thereto on Schedule 2.3.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to each of the Pari Passu Creditor
Parties as follows:
SECTION 3.1 ORGANIZATION, POWERS AND GOOD STANDING.
(a) Each of the Company Parties and the Subsidiaries is a sociedade
anonima, a corporation, a partnership, a joint venture, a limited liability
company or another organization, in each case duly organized, validly existing
and, where relevant, in good standing under the laws of its jurisdiction of
organization, as shown as of the date hereof in Schedule 3.1(a). Each of the
Company Parties and the Subsidiaries has all requisite corporate (or other
equivalent organizational) power and authority and the legal right to own and
operate its properties, to carry on its business as heretofore conducted and as
proposed to be conducted (including, in the case of the Company, to operate the
Project and the Expanded Project), to enter into the Pari Passu Financing
Documents to which it is a party and to carry out the transactions contemplated
thereby.
(b) Each of the Company Parties and each of the Subsidiaries is duly
qualified to do business in each jurisdiction where any failure to be so
qualified, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.
SECTION 3.2 AUTHORIZATION, BINDING EFFECT, ETC. The execution, delivery and
performance by each Company Party of each Pari Passu Financing Document and
Material Contract to which it is a party have been duly authorized by all
necessary corporate or other action on the part of the Company Party. Each such
Pari Passu Financing Document and Material Contract has been duly executed and
delivered by the Company Party. Each Pari Passu Financing Document constitutes a
legal, valid and binding obligation of each Company Party thereto, enforceable
against it in accordance with its terms, except as enforcement may be limited by
equitable principles and by bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to creditors' rights generally. Each Pari Passu
Financing Document is in proper legal form under the laws of Brazil (or other
relevant jurisdiction) for the enforcement thereof against the Company Party
under such law; provided, however, that in order to ensure the admission of the
Pari Passu Financing Documents before the public agencies and courts in Brazil
the signatures of the parties thereto signing outside Brazil shall be notarized
by a notary public
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licensed as such under the laws of the place of signing and the signature of
such notary public shall be authenticated by a consular official of Brazil and
the Pari Passu Financing Documents shall be translated into the Portuguese
language by a sworn translator. No Taxes are required to be paid to Brazil or
any political subdivision thereof or therein, in each case for the validity and
enforceability thereof.
SECTION 3.3 NO CONFLICT. The execution, delivery and performance by each
Company Party of each Pari Passu Financing Document and Material Contract to
which it is a party, the exercise by the Pari Passu Creditor Parties of their
rights and remedies under the Pari Passu Financing Documents, and the
consummation of the transactions contemplated by the Pari Passu Financing
Documents and the Material Contracts, do not and will not (a) violate any
provision of the charter or other organizational documents of the Company Party,
(b) conflict with, result in a breach of, or constitute (or, with the giving of
notice or lapse of time or both, would constitute) a default under, or, except
for consents and approvals that have been obtained and are in full force and
effect, require the approval or consent of any Person pursuant to, any material
Contractual Obligation of the Company Parties (including any provisions of any
Material Contract or any contracts relating to Debt), or violate any Applicable
Law binding on the Company Party, or (c) result in the creation or imposition of
any Lien upon any asset of the Company Party or any income or profits therefrom,
except for Liens in favor of the Collateral Agent under the Collateral Documents
or in favor of the Proceeds Collateral Agents under the Proceeds Account Pledge
Agreements.
SECTION 3.4 GOVERNMENTAL APPROVALS. No consent, approval, authorization,
exemption, order or decree of any Governmental Authority is required to be
obtained by any Company Party for the execution, delivery and performance by
Company Party of any Pari Passu Financing Document to which it is a party,
except for (a) a Prior Approval issued by the Central Bank in respect of each
Pari Passu Financing, (b) a certificate of registration for each Pari Passu
Financing (the "Certificates of Registration") from the Central Bank, to be
requested within 30 days after the Funding Date; which will enable the Company
to make remittances from Brazil in Dollars of the scheduled principal of, and
interest on, the Pari Passu Financings, and the fees, expenses and commissions
referred to in the Pari Passu Financing Documents that will not be paid on the
Funding Date and that have been approved pursuant to the Prior Approval; (c) any
further authorization from the Central Bank, which will enable the Company to
make remittances from Brazil in Dollars to make payments contemplated in the
Pari Passu Financing Documents not specifically covered by the Certificates of
Registration or to make payments that are specifically covered by the
Certificates of Registration earlier than their respective due dates, whether
upon acceleration, redemption, Mandatory Repurchase, Mandatory Partial
Repurchase or otherwise; (d) the approval by Anatel of the creation of the Liens
on the Mirror Authorizations and on the Voting Stock of the Company in excess of
49% thereof and of any foreclosure thereon and (e) filings, recordings and
Governmental Authorizations required in connection with the perfection of the
Liens created by the Collateral Documents. No other Governmental Approval is or
will be required, and no consent or approval is or will be necessary to avoid
default under any material Contractual Obligation of any Company Party, in
connection with the execution, delivery and performance by such Company Party of
any Pari Passu Financing Document to which it is a party or to ensure the
legality, validity, enforceability thereof or the exercise by the Pari Passu
Creditor Parties of their rights and remedies thereunder.
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SECTION 3.5 SUBSIDIARIES; HOLDCO; INVESTMENTS.
(a) HOLDCO. The authorized and issued Capital Stock of HoldCo, and the
record and beneficial owners of such Capital Stock, are identified in Schedule
3.5(b), as amended from time to time as permitted hereby. All of the outstanding
shares of Capital Stock of HoldCo have been duly authorized and validly issued
and are fully paid and nonassessable. There are no outstanding securities
convertible into or exchangeable for shares of Capital Stock of HoldCo, any
agreement regarding the voting of such shares, or any options, warrants or other
rights to purchase any such Capital Stock, or any commitments of any kind for
the issuance of additional shares of such Capital Stock or any such convertible
or exchangeable securities or options, warrants or rights to purchase such
Capital Stock, other than pursuant to the Shareholder Agreement.
(b) SUBSIDIARIES OF HOLDCO. The authorized and issued Capital Stock of
the Company, and the record and beneficial owners of such Capital Stock, are
identified in Schedule 3.5(b), as amended from time to time as permitted hereby.
The Company is the only direct Subsidiary of HoldCo. All of the outstanding
shares of Capital Stock of the Company have been duly authorized and validly
issued and are fully paid and nonassessable. There are no outstanding securities
convertible into or exchangeable for shares of Capital Stock of the Company, any
agreement regarding the voting of such shares or any options, warrants or other
rights to purchase any such Capital Stock, or any commitments of any kind for
the issuance of additional shares of such Capital Stock or any such convertible
or exchangeable securities or options, warrants or rights to purchase such
Capital Stock.
(c) SUBSIDIARIES OF COMPANY. Each Subsidiary of the Company, the
authorized and issued Capital Stock of each such Subsidiary and the record and
beneficial owner of such Capital Stock are identified in Schedule 3.5(b), as
amended from time to time. All of the outstanding shares of Capital Stock of
each of the Subsidiaries of the Company have been duly authorized and validly
issued and are fully paid and nonassessable. There are not outstanding any
securities convertible into or exchangeable for shares of Capital Stock of any
of the Subsidiaries of the Company, any agreement regarding the voting of such
shares or any options, warrants or other rights to purchase any such Capital
Stock, or any commitments of any kind for the issuance of additional shares of
such Capital Stock or any such convertible or exchangeable securities or
options, warrants or rights to purchase such Capital Stock.
SECTION 3.6 FINANCIAL INFORMATION.
(a) The unaudited consolidated balance sheet of the Company and its
Subsidiaries as of September 30, 1999 and the related consolidated statement of
shareholders' equity, certified by the Chief Financial Officer of the Company,
copies of which have been delivered to the Pari Passu Creditors, were prepared
in accordance with GAAP consistently applied (except to the extent noted
therein) and fairly present the consolidated financial position of the Company
and its Subsidiaries as of such date, subject to the absence of footnotes and
normal year-end audit adjustments. Neither the Company nor any of its
Subsidiaries on such date had any material Contingent Obligations, other
contingent liabilities (including relating to the Mirror Authorizations),
liabilities for Taxes or long-term leases, forward or long-term
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commitments or unrealized losses from any unfavorable commitments that are not
reflected in the foregoing statements or in the notes thereto.
(b) The projected consolidated statements of income and cash flow of
the Company and its consolidated Subsidiaries for the period from January 1,
1999 to and including December 31, 2009, and the projected annual consolidated
balance sheets of the Company and its Subsidiaries as of the last day of each
Fiscal Year, included in the Business Plan copies of which have been furnished
to the Pari Passu Creditors, represent the Company's best estimate, as of the
date of such estimate, of the Company's consolidated financial position and
results of operations as of the dates and for the periods indicated, were
prepared by or under the supervision of the Chief Financial Officer of the
Company, and have been prepared on the basis of reasonable assumptions and in
good faith.
SECTION 3.7 NO MATERIAL ADVERSE CHANGES; SOLVENCY. Since the date of the
most recent financial statements delivered to the Pari Passu Creditors pursuant
to Sections 3.6, 4.1(a) or 4.1(b), as applicable, there has been no Material
Adverse Change, other than with respect to operating losses of the Company and
its Subsidiaries, as reasonably contemplated by the Business Plan. Each Company
Party is and will be Solvent, after giving effect to any Pari Passu Financings
then being requested.
SECTION 3.8 NO PROHIBITION; LITIGATION. No Applicable Laws prohibit the
consummation of the transactions contemplated by the Pari Passu Financing
Documents and the Material Contracts. No order, judgment or decree of any
Governmental Authority or arbitrator, and no action, suit or proceeding is
pending or, to the Company's knowledge, threatened against or affecting HoldCo,
the Company, any of the Subsidiaries or any of their respective properties that
could reasonably be expected to have a Material Adverse Effect or that would
enjoin, prohibit, restrain or otherwise adversely affect in a material manner
the validity, legality or enforceability of any Pari Passu Financing Documents
or the consummation of the transactions contemplated thereby.
SECTION 3.9 APPLICABLE LAW; AGREEMENTS.
(a) Neither HoldCo, the Company nor any of the Subsidiaries is in
violation of any Applicable Law (including regarding the Mirror Authorizations,
the Expanded Project, social security and pension fund obligations,
environmental matters and the Central Bank regulations), or in default under its
charter or bylaws, except in the case of any such violation of Applicable Law
(other than a material provision of the Mirror Authorizations and the Central
Bank regulations) where such violation could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
(b) The Company and each of the Subsidiaries has, in full force and
effect, or reasonably expects to obtain in the ordinary course of business, all
contracts, agreements, rights, privileges and franchises (including all Material
Contracts) that are necessary for the ownership, maintenance and operation of
the Expanded Project and its properties and conduct of its business as now
conducted and proposed to be conducted and is not in Material violation thereof.
No provision of any contract, lease, agreement or other instrument to which
either the Company or any of the Subsidiaries is a party or by which any of its
property is bound or affected has had or
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is reasonably expected to have, individually or in the aggregate, a Material
Adverse Effect under clause (B), (C) or (F) of the definition thereof.
SECTION 3.10 TAXES.
(a) Each of HoldCo, the Company and each of their Subsidiaries, has
timely filed or caused to be filed all material Tax returns and reports required
to be filed by it, or has been included in any consolidated, combined or unitary
Tax return that is required to include it, and has paid all Taxes imposed upon
it or any of its properties or in respect of any of its franchises, business,
income or property before any penalty shall be incurred with respect to such
Taxes, provided, however, that, unless (i) any failure to so pay or discharge
any such Taxes could reasonably be expected to have a Material Adverse Effect,
or (ii) foreclosure, distraint, levy, sale or similar proceedings shall have
commenced or any Lien resulting therefrom attaches to its property and becomes
enforceable against its other creditors, HoldCo, the Company and their
respective Subsidiaries need not pay or discharge any such Tax so long as the
validity or amount thereof is being contested in good faith and by appropriate
proceedings and so long as any reserves or other appropriate provisions as may
be required by GAAP shall have been made therefor. There have not been asserted
or proposed to be asserted any material Tax deficiency against HoldCo, the
Company or any of the Subsidiaries or for which any of them may be liable, that
is not reserved against on the financial books of HoldCo, the Company and the
Subsidiaries.
(b) No income, stamp or other Tax imposed by any Governmental
Authority in Brazil, Canada or the United States (whether by withholding or
otherwise) by virtue of the execution, delivery or performance by any Company
Party of any Pari Passu Financing Document remains unpaid.
SECTION 3.11 INVESTMENT COMPANY; ETC. None of HoldCo, the Company and the
Subsidiaries is (a) an "investment company" registered or required to be
registered under the Investment Company Act of 1940, as amended, or a company
controlled by or principal underwriter of such a company or (b) subject to any
statute or regulation limiting its ability to incur Debt for money borrowed.
None of HoldCo, the Company and the Subsidiaries is subject to any law or
regulation, limiting or restricting its ability to execute, deliver and perform
its obligations under the terms of this Agreement and the other Pari Passu
Financing Documents, in each case, in accordance with the terms thereof.
SECTION 3.12 TITLE TO PROPERTY. HoldCo, the Company and the Subsidiaries
have good and marketable title to or valid and subsisting leasehold interests in
all of the property reflected in their respective books and records as being
owned or leased by it subject to defects in title and leasehold and other
encumbrances and interests that are not material to the business, operations,
financial condition or business prospects of the Company and its Subsidiaries,
taken as a whole. No such property is subject to any Lien, other than Permitted
Liens.
SECTION 3.13 DEBT. As of the Closing Date, the Company does not have any
Debt other than (a) the Notes being issued on such date and (b) the Debt
disclosed on Schedule 1.1(b) hereto.
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SECTION 3.14 INTELLECTUAL PROPERTY. The Company and each of its
Subsidiaries own or hold, or reasonably expect to obtain in the ordinary course
of business, valid licenses in and to all Intellectual Property Rights that are
material to the conduct of its business as heretofore operated and as proposed
to be conducted. Neither the Company nor any of the Subsidiaries has infringed,
or been charged or, to the best knowledge of the Company, threatened to be
charged with any infringement of, any unexpired Intellectual Property Right of
any Person, except where the effect thereof could not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect. Neither the
Company nor any Subsidiary is bound by or a party to any options, licenses or
agreements of any kind with respect to the Intellectual Property Rights of any
other Person except for arrangements that, if terminated, could not reasonably
be expected to have a Material Adverse Effect. To the best knowledge of the
Company, there is no material violation by any Person of any right of the
Company or any Subsidiary with respect to any Intellectual Property Rights owned
or used by it.
SECTION 3.15 COLLATERAL DOCUMENTS. The provisions of the Collateral
Documents are effective to create in favor of the Collateral Agent, for the
benefit of the Secured Parties (or, in the case of the Proceeds Account Pledge
Agreements, in favor of the respective Proceeds Collateral Agent, for the
benefit of the respective Proceeds Secured Parties), legal, valid, enforceable
and first priority Liens in all Collateral existing on the Closing Date and all
actions necessary to ensure the validity and first priority of such Liens on the
then-existing Collateral have been taken. Without limitation, all assets of
HoldCo and the Company on the Closing Date (including equipment and other assets
(a) acquired under or pursuant to any Supply Agreement (including civil works
required in connection with any Supply Agreement) or (b) without which the
functioning of the fixed switched telephony network of the Company and its
Subsidiaries would be materially adversely affected (including customer premise
equipment not otherwise excluded from the Collateral), but excluding any assets
that would otherwise constitute Collateral under the Company Equipment Pledge
Agreement the book value of which is less than $50,000 per item provided,
however, that the aggregate book value of the assets of the Company and its
Subsidiaries not listed on the schedules to the Collateral Documents does not
exceed $5,000,000 in the aggregate for the Company and the Subsidiaries, taken
as a whole) are listed on schedules to the Collateral Documents listing the
Collateral thereunder. Upon the taking of any additional steps required to be
taken under Section 4.10 with respect to such Collateral, the provisions of the
Collateral Documents are effective to create in favor of the Collateral Agent,
for the benefit of the Secured Parties (or, in the case of the Proceeds Account
Pledge Agreements, in favor of the respective Initial Facility Agent, for the
benefit of the respective Purchaser Parties), legal, valid, enforceable and
first priority Liens in all Collateral acquired after the Closing Date in which
a Lien is required to be created pursuant to Section 4.10.
SECTION 3.16 ENVIRONMENTAL CONDITION AND LIABILITIES.
(a) To the best of Company's knowledge, each Real Property and each
property adjacent to any Real Property, is free from contamination from any
Hazardous Materials, except contamination that, individually or in the
aggregate, could not reasonably be expected to give rise to any Environmental
Damages (except such Environmental Damages as could not reasonably be expected
to have a Material Adverse Effect). Neither the Company nor any of the
Subsidiaries or, to the best knowledge of the Company, any prior owner or other
user of any Real Property or any such adjacent property has caused or suffered
any Environmental
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Damages that have had or that could reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect.
(b) Neither the Company nor any of the Subsidiaries or, to the best
knowledge of the Company, any prior owner or other user of any Real Property or
any adjacent property has received notice of any actual or alleged violation of
Environmental Requirements, or notice of any actual or alleged liability for
Environmental Damages in connection with the Real Property or such adjacent
property, except for violations and liabilities that could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
(c) The Company has reasonably concluded that any liabilities
associated with, and costs of compliance with, Environmental Requirements are
unlikely to have a Material Adverse Effect.
SECTION 3.17 AFFILIATE AGREEMENTS. Except as set forth in Schedule 3.17, as
amended from time to time as permitted hereby, there are no Affiliate Agreements
or Affiliate Transactions.
SECTION 3.18 YEAR 2000 COMPLIANCE. The Company has used commercially
reasonable efforts to ensure that all internal information systems and other
computer systems and equipment of the Company and its Subsidiaries are Year 2000
Compliant, except to the extent that any failure of such systems and equipment
to be Year 2000 Compliant would not reasonably be likely to result in a Material
Adverse Effect. For purposes of this Section 3.18, such internal information
systems and other computer systems and equipment are "Year 2000 Compliant" if
they are free from time-sensitive computer software that uses two digits rather
than four to recognize the applicable year and that consequently results or will
result in system failure or miscalculations that disrupt the Company's or such
Subsidiary's operations, including by causing any inability to process
transactions, send invoices or engage in other similar normal business
activities.
SECTION 3.19 INSURANCE. As of the Closing Date (i) all insurance required
by Section 4.6 has been approved by all Governmental Authorities whose approval
is required and (ii) no notice of cancellation has been received for such
policies and the Company and the Subsidiaries are in compliance with all of the
material terms and conditions of such policies.
SECTION 3.20 NO DEFAULT. No event of default has occurred and is continuing
under (i) the Pari Passu Financing Agreements, (ii) the other Pari Passu
Financing Documents or (iii) any other document relating to Debt, with a
principal amount in excess of $1,000,000, of the Company or its Subsidiaries.
SECTION 3.21 RANKING OF PARI PASSU FINANCINGS. The obligations of the
Company under each Pari Passu Financing Agreement, the notes, loans and other
extensions of credit purchased or made, as the case may be, or to be purchased
or made, as the case may be, thereunder and the instruments issued thereunder,
if any, will at all times rank in right of payment and of collateral security
(i) at least pari passu with the Pari Passu Obligations under each other Pari
Passu Financing Agreement, the notes, loans or other extensions of credit
purchased or made, as the case may be, or to be purchased or made, as the case
may be, thereunder and the
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instruments issued thereunder, if any, (ii) senior to all obligations of the
Company in respect of Subordinated Debt and (iii) pari passu with, or senior to,
all other Debt of the Company.
SECTION 3.22 ABSENCE OF SOVEREIGN IMMUNITY. Each of the Company Parties is
subject to civil and commercial law with respect to its obligations under this
Agreement and the other Pari Passu Financing Documents and the execution,
delivery and performance of this Agreement and the other Pari Passu Financing
Documents constitute private and commercial acts rather than public or
governmental acts. Neither any of the Company Parties nor any of their
properties has any immunity from the jurisdiction of any court or from set-off
or any legal process (whether through service, notice, attachment prior to
judgment, attachment in aid of execution, execution or otherwise) under the laws
of Brazil.
SECTION 3.23 ABSENCE OF CERTAIN RESTRICTIONS. Except as set forth in
Schedule 3.23 or as would be permitted by Section 5.15, neither the Company nor
any Subsidiary is subject to any material Contractual Obligation that restricts
or limits the ability of any Subsidiary to (a) make Restricted Payments to the
Company, (b) pay Debt owed the Company or any Subsidiary thereof, (c) make any
loans or advances to the Company or any Subsidiary or (d) except as provided in
Contractual Obligations respecting the specific assets subject to Permitted
Liens, transfer any of its property to the Company or any other Subsidiary.
SECTION 3.24 LABOR MATTERS.
(a) DISPUTES. There are no strikes or other labor disputes or
grievances pending or, to the best knowledge of the Company, threatened against
the Company or any Subsidiary thereof which, individually or in the aggregate,
would be reasonably likely to result in a Material Adverse Effect. The Company
and each of the Subsidiaries have complied in all material respects with the
requirements of Applicable Law relating to employment and related matters.
(b) EMPLOYEE BENEFIT PLANS. With respect to each pension or employee
benefit scheme or arrangement mandated by a government other than the United
States (a "Foreign Government Arrangement") and with respect to each employee
benefit plan maintained or contributed to by the Company or any Subsidiary of
the Company that is not subject to United States law (a "Foreign Benefit Plan")
any employer and employee contributions required by law or by the terms of any
Foreign Government Arrangement or any Foreign Benefit Plan have been made, or,
if applicable, accrued, in accordance with normal accounting practices (other
than any failure to make or accrue such contributions that could not reasonably
be expected to have a Material Adverse Effect).
SECTION 3.25 DISCLOSURE.
(a) The information in each document, certificate or written statement
(other than information referred to in Section 3.6) furnished to the Purchaser
Parties by or on behalf of the Company or any Subsidiary on or prior to the
Closing Date with respect to the business, assets, prospects, results of
operation or financial condition of the Company, any Subsidiary or any other
Company Party, at the time of delivery thereof was accurate and correct in all
material
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respects and did not omit, when considered as a whole, any material fact
necessary in order to make the information so provided not misleading.
(b) The information in each document, certificate or written statement
(other than those described in Sections 4.1(a) and (b)) furnished to the Pari
Passu Creditors by or on behalf of the Company or any Subsidiary after the
Closing Date with respect to the business, assets, prospects, results of
operation or financial condition of the Company, any Subsidiary or any other
Company Party at the time of delivery thereof, will be true and correct in all
material respects.
SECTION 3.26 PERMITS. The Governmental Approvals identified in Part A of
Schedule 3.26 are all the Governmental Approvals which are necessary in
connection with the Expanded Project and the other businesses of each of the
Company and its Subsidiaries or any of the properties owned or leased by them or
in connection with their businesses proposed to be conducted and properties
proposed to be owned or leased by them, in each case as of the Closing Date
(other than those Governmental Approvals which may be required in the ordinary
course of business in connection with construction activities). Except for the
Governmental Approvals listed in Part B of Schedule 3.26, all such Governmental
Approvals have been issued to either the Company or its Subsidiaries and are
valid and in full force and effect. As of the Closing Date, (i) the Company
reasonably expects to apply for and obtain, in the ordinary course, all
Governmental Approvals listed on Part B of Schedule 3.26 and (ii) the Company
and the Subsidiaries have duly and timely made all material filings that are
required to be made by them under Applicable Law, and are in all material
respects in compliance with the terms of such Governmental Approvals (including
the Mirror Authorizations) and other Applicable Laws.
SECTION 3.27 PRIVATE OFFERING. Neither the Company nor any Person acting on
its behalf has offered the Notes or any similar securities for sale to, or
solicited any offer to buy any of the same from, or otherwise approached or
negotiated in respect thereof with, any Person other than not more than 35
Eligible Assignees, including the Pari Passu Agents and the Purchasers. Neither
the Company nor any Person acting on its or their behalf has taken, or will
take, any action which would subject the issuance or sale of the Notes to
Section 5 of the Securities Act or any similar law in any other country.
ARTICLE 4.
AFFIRMATIVE COVENANTS
So long as any portion of the Pari Passu Commitments is in effect or any
Pari Passu Obligations remain unpaid or have not been performed in full:
SECTION 4.1 REPORTING REQUIREMENTS. The Company shall deliver, or cause to
be delivered, to the Collateral Agent and each of the Pari Passu Creditor
Parties:
(a) ANNUAL FINANCIAL REPORTS. As soon as practicable and in any event
within 120 days after the end of each Fiscal Year, beginning with the Fiscal
Year ending December 31, 1999, the audited consolidated balance sheet of HoldCo
and its Subsidiaries as of the end of such year and the related consolidated
statements of income or operations,
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shareholders' equity and cash flows for such Fiscal Year, together with
unaudited consolidating schedules for HoldCo and its Subsidiaries with respect
to each of such financial statements, in each case setting forth in comparative
form the figures for the previous Fiscal Year, and accompanied by (i) a
reconciliation between GAAP used in the preparation of those financial
statements and US GAAP as in effect at the time of the preparation of those
financial statements and (ii) the opinion of independent certified public
accountants of recognized standing reasonably acceptable to the Collateral
Agent, which opinion shall state that such consolidated financial statements
present fairly the financial position and results of operations for the periods
indicated in conformity with GAAP applied on a basis consistent with prior years
and which opinion shall not be qualified or limited in any material respect,
including because of a restricted or limited examination by such accountant of
any material portion of such Person's records;
(b) QUARTERLY FINANCIAL REPORTS. As soon as practicable and in any
event within 60 days after the end of each Fiscal Quarter, unaudited financial
statements, including consolidated balance sheet of HoldCo and its Subsidiaries
as of the end of such quarter and the related unaudited consolidated statements
of income, stockholders' equity and cash flow for such quarter and the portion
of the Fiscal Year ended at the end of such quarter, setting forth in each case
in comparative form the consolidated figures for the corresponding periods of
the prior Fiscal Year, all in reasonable detail and (i) accompanied by a
reconciliation between GAAP used in the preparation of those financial
statements and US GAAP as in effect at the time of the preparation of those
financial statements and (ii) certified by the Company's Chief Financial Officer
as fairly presenting the consolidated financial condition of HoldCo and its
Subsidiaries, as the case may be, as of the dates indicated, and their
consolidated results of operations and cash flows for the periods indicated, in
conformity with GAAP, subject to customary year-end adjustments and the absence
of footnotes;
(c) COMPLIANCE CERTIFICATE. Together with each delivery of financial
statements pursuant to Sections 4.1(a) and (b) above, a certificate of the Chief
Financial Officer of the Company substantially in the form of Exhibit F-1 (a
"Compliance Certificate"), duly completed, setting forth the calculations
required to establish whether the Company is in compliance with the Financial
and Operating Covenants, and including a comparison of actual operating results
and balance sheets for and as of the end of the relevant periods to the most
recent budget delivered pursuant to Section 4.1(e);
(d) OPERATING REPORT. No later than 30 days after the end of each
Fiscal Quarter, an operating report substantially in the form of Schedule
4.1(d), duly completed and executed by the Chief Financial Officer of the
Company, which shall contain (i) all cell and switch sites constructed, all cell
and switch sites put in service and all fibre nodes put in service during the
Fiscal Quarter covered by such report, (ii) the number of new Subscribers
acquired during such Fiscal Quarter, (iii) the total number of Subscribers as of
the end of such Fiscal Quarter and churn during such Fiscal Quarter, (iv) Total
Lines in service as of the end of such Fiscal Quarter, (v) the average age of
receivables for such Fiscal Quarter, (vi) the average monthly xxxx (in Dollars)
per Subscriber Segment (split between activation fees and monthly billing fees)
during such Fiscal Quarter and (vii) minutes of use (MOUs) per Subscriber
Segment during such Fiscal Quarter, and including a comparison of actual results
with respect to items (i) through (vii) for and as of the end of the relevant
periods to the most recent budget delivered pursuant to Section 2.1(b) or
Section 4.1(e);
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(e) UPDATES. As soon as available and in any event within 60 days (or
in the case of Fiscal Year 1999, 90 days) after the end of each Fiscal Year, (i)
an update of the Business Plan, in substantially the same detail as the Business
Plan delivered pursuant to Section 2.1(b), including updated annual projections
for the periods referred to in the definition of "Business Plan," (ii) a
quarterly budget for the then-current Fiscal Year in reasonable detail
(including the operating report) for HoldCo and its Subsidiaries, together with
a certificate by the Chief Financial Officer of the Company (A) that such
updated business plan and quarterly budget have been approved by the Board of
Directors of the Company and represent the Company's best estimate of HoldCo's
consolidated financial position and results of operations and the other
information covered thereby as of the dates and for the periods indicated, (B)
that such updated business plan and budget have been prepared by or under the
supervision of such Chief Financial Officer of the Company on the basis of
reasonable assumptions taking into account all reasonably expected expenses and
revenues of the Company and the Subsidiaries and in good faith utilizing, to the
extent relevant, historical financial information that was prepared in
accordance with GAAP, together with an outline of the major assumptions upon
which such Business Plan and budget are based, (iii) a calculation in reasonable
detail evidencing compliance with all Financial and Operating Covenants on the
basis of, and after giving effect to, such projections and (iv) an explanation
in reasonable detail of the operating results for the immediately preceding
Fiscal Year, including a comparison of such results with the quarterly budget
previously delivered to the Pari Passu Creditors pursuant to this Section or
otherwise;
(f) ACCOUNTANTS' REPORT. Together with each delivery of financial
statements pursuant to Section 4.1(a), (I) and so long as and to the extent not
contrary to the then current recommendations of the American Institute of
Certified Public Accountants, a written statement by the independent certified
public accountants giving the report thereon (i) stating that their audit
examination has included a review of the terms of the Pari Passu Financing
Documents as they relate to accounting matters, (ii) stating whether, in
connection with their audit examination, any Default or Event of Default has
come to their attention and if so, specifying the nature and period of existence
thereof, and (iii) confirming the calculations set forth in the Compliance
Certificate delivered simultaneously therewith, and (II) if applicable, a
written statement by the independent certified public accountants of the Company
confirming compliance by the Company and its Subsidiaries with Section
5.11(b)(ii)(III);
(g) MANAGEMENT LETTERS. Promptly after the receipt thereof by HoldCo,
the Company or any of its Subsidiaries, a copy of any management letter or other
material written report submitted to such Person by independent certified public
accountants with respect to the business, condition (financial or otherwise),
operations, prospects or properties of any such Person;
(h) DOLLAR RESTRICTIONS. After the Company becomes aware thereof,
prompt written notice of any Dollar Restriction that shall have occurred which
may affect any payment of principal, interest or fees in respect of any Pari
Passu Financing (an "Affected Payment");
(i) NOTICE OF DEFAULT. Within three days after the Company becomes
aware of the occurrence of any Default or Event of Default, a certificate of a
Senior Officer of the Company setting forth the details thereof and the action
that the Company is taking or proposes to take with respect thereto;
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(j) PUBLIC FILINGS AND ANNOUNCEMENTS. Promptly after the same are sent
or become available, copies of all financial statements, reports, notices and
proxy statements sent or made available by HoldCo or the Company to its security
holders generally, all registration statements and annual, quarterly or current
reports, if any, filed by HoldCo or the Company with the SEC or any other
Governmental Authority, all private placement memoranda relating to securities
being issued or intended to be issued by HoldCo, the Company or any Subsidiary
and all press releases by HoldCo, the Company or any of the Subsidiaries thereof
concerning material developments in the business of the Company or any such
Subsidiary;
(k) PROCEEDINGS. Promptly after the Company becomes aware of the
commencement of litigation or proceedings affecting HoldCo, the Company or any
of its Subsidiaries, (a) that involves alleged liability in excess of $5,000,000
(in the aggregate), (b) in which injunctive or similar relief is sought that, if
obtained, could reasonably be expected to have a Material Adverse Effect, (c)
that in any way concerns or relates to the Mirror Authorizations, or (d) that
questions the validity or enforceability of any Pari Passu Financing Document,
notice providing reasonable details about the commencement of such litigation or
about such material development;
(l) OTHER DEBT. Promptly after receipt or availability of, (a) a copy
of any prospectus or offering or information memorandum with respect to the
offering or sale of, and any notices or reports received or sent by the Company
or any Subsidiary to any Person in connection with, any Pari Passu Debt, (b) a
copy of any amendment or supplement to, or material extension, renewal or waiver
with respect to, or any request for amendment, waiver or other modification of,
any such prospectus or offering memorandum or any Pari Passu Financing Documents
or other documents or instruments governing Pari Passu Debt, (c) any notice of
default, acceleration, redemption or purchase relating to any Pari Passu Debt or
any notice of default in the payment of principal or interest or acceleration or
mandatory repurchase or redemption relating to any other Debt with a principal
amount in excess of $1,000,000, and (d) a copy of any amendment or supplement
to, or material extension, renewal or waiver with respect to, any documents or
instruments governing any Debt with a principal amount in excess of $5,000,000;
(m) ENVIRONMENTAL PROCEEDINGS. Promptly after receipt thereof by any
Senior Officer of the Company or any Subsidiary, a copy of any notice, summons,
citation or written communication concerning any actual, alleged, suspected or
threatened violation of Environmental Requirements, or liability of the Company
or any of the Subsidiaries for Environmental Damages, that in each case, if
adversely determined, could have a Material Adverse Effect;
(n) AMENDMENT TO CHARTER DOCUMENTS. Promptly after the availability
thereof, copies of all amendments to the charter, bylaws or other organizational
documents of HoldCo, the Company or any of the Subsidiaries (other than
ministerial amendments and amendments to give effect to capital increases
otherwise permissible under the Pari Passu Financing Documents);
(o) GOVERNMENTAL APPROVALS AND MATERIAL CONTRACTS. Promptly after
receipt or availability thereof, copies of all (i) material reports prepared by
the Company or any
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Subsidiaries and sent to Anatel or the Ministry of Communications and (ii)
notices, citations or written communication concerning any actual, alleged,
suspected or threatened material violation or non-renewal of (1) any material
Governmental Approval of the Company or any of the Subsidiaries (including the
Mirror Authorizations), or (2) subject to entering into appropriate
confidentiality agreements, any Material Contract;
(p) MATERIAL ADVERSE EFFECT. Promptly after the Company becomes aware
thereof, written notice of any matter (other than matters of a general,
political or macroeconomic nature) that could reasonably be expected to have a
Material Adverse Effect;
(q) EXPROPRIATION EVENT. Within three days after a Senior Officer of
the Company becomes aware thereof, written notice of the commencement of, or of
a material threat of the commencement of, any action that could reasonably be
expected to lead to an Expropriation Event; such written notice shall set forth
the nature of such pending or threatened action, suit or proceeding and such
additional information with respect thereto as may be reasonably requested by
the Collateral Agent or any other Pari Passu Creditor Party; and
(r) OTHER INFORMATION. Promptly, such other business, financial,
corporate affairs and other similar information, concerning HoldCo, the Company
or any of its Subsidiaries (or, to the extent reasonably available to the
Company, any other Company Party) or their respective business, assets,
liabilities, prospects, results of operations or condition (financial or
otherwise) and/or the Collateral as the Collateral Agent or any Pari Passu
Creditor Party may from time to time reasonably request.
SECTION 4.2 RECORDS AND INSPECTION.
(a) HoldCo and the Company shall, and shall cause each of HoldCo's
Subsidiaries to, maintain adequate books, records and accounts as may be
required or necessary to permit the preparation of consolidated and
consolidating financial statements in accordance with sound business practices
and GAAP. HoldCo and the Company shall, and shall cause each of HoldCo's
Subsidiaries to, permit the Pari Passu Facility Agents, the Pari Passu Creditors
and such other Persons as the Collateral Agent may designate, at reasonable
times, as often as may reasonably be requested, and without unreasonable
interference with HoldCo's, the Company's or such Subsidiary's business to (i)
visit and inspect any of its properties, (ii) inspect and copy its books and
records, and (iii) discuss with its officers and employees, its investment
bankers, its financial consultants and its independent accountants, its
business, assets, liabilities, prospects, results of operations or financial
condition.
(b) At a date to be mutually agreed no later than 120 days after the
last day of each Fiscal Year, the Company shall, at the request of any Pari
Passu Facility Agent, hold a meeting with all Pari Passu Creditor Parties at
which the financial results of HoldCo and its Subsidiaries for such Fiscal Year
and the business plan and other information required to be delivered pursuant to
Section 4.1(e) shall be reviewed and discussed.
SECTION 4.3 CORPORATE EXISTENCE, MAINTENANCE OF LICENSES, ETC. HoldCo and
the Company shall, and shall cause each of their Subsidiaries to, at all times
preserve and keep in full force and effect its corporate or other organizational
existence and all material licenses,
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rights, franchises and other Governmental Approvals, and shall pay all fees on a
timely basis as required pursuant to the Mirror Authorizations; provided,
however, that (a) the corporate existence of any Subsidiary may be terminated as
contemplated and permitted by Section 5.7 and (b) the corporate existence of any
Subsidiary may be terminated and any such Governmental Approval (other than the
Mirror Authorizations) may be terminated or not renewed, if such termination or
nonrenewal, as the case may be, is determined by the Board of Directors of the
Company to be in the best interest of the Company and is not disadvantageous in
any material respect to the Pari Passu Creditor Parties.
SECTION 4.4 PAYMENT OF TAXES. HoldCo and the Company shall, and shall cause
each of their Subsidiaries to, timely file or cause to be filed all material Tax
returns and reports required to be filed by it, or be included in any
consolidated, combined or unitary Tax return that is required to include it, and
pay all Taxes imposed upon it or any of its properties or in respect of any of
its franchises, business, income or property before any penalty shall be
incurred with respect to such Taxes; provided, however, that, unless (i) any
failure to so pay or discharge any such Taxes could reasonably be expected to
have a Material Adverse Effect, or (ii) foreclosure, distraint, levy, sale or
similar proceedings shall have commenced or any Lien resulting therefrom
attaches to its property and becomes enforceable against its other creditors,
HoldCo, the Company and their respective Subsidiaries need not pay or discharge
any such Tax so long as the validity or amount thereof is being contested in
good faith and by appropriate proceedings and so long as any reserves or other
appropriate provisions as may be required by GAAP shall have been made therefor.
HoldCo, the Company and each of their Subsidiaries shall not permit there to be
asserted or proposed to be asserted any material Tax deficiency against HoldCo,
the Company or any of the Subsidiaries or for which any of them may be liable,
that is not reserved against on the financial books of HoldCo, the Company and
the Subsidiaries.
SECTION 4.5 MAINTENANCE OF PROPERTIES. HoldCo and the Company shall, and
shall cause each of their Subsidiaries to, maintain or cause to be maintained in
good repair, working order and condition (ordinary wear and tear excepted) all
properties and other assets useful or necessary to their business.
SECTION 4.6 MAINTENANCE OF INSURANCE.
(a) HoldCo and the Company shall, and shall cause each of their
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 the Company and its 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;
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(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 the
Company or any Subsidiary due to physical damage to the property required
to be insured under Section 4.6(b)(i) and (ii), for an indemnity period of
at least three months, and providing for the payment for the insured period
of at least the gross revenues of the Company and its 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 the Collateral or
the Company or any Subsidiary.
(c) The Company shall cause all liability insurance policies to name
the Collateral Agent and all other Pari Passu Creditor Parties as an additional
insured.
(d) In addition to any requirements under the Collateral Documents,
(i) all property loss or damage insurance policies with respect to any assets of
the Company or any of the Subsidiaries shall contain lenders' loss payable
endorsements in favor of the Collateral Agent in form and substance satisfactory
to it, which shall provide that all insurance proceeds in excess of $5,000,000
shall be payable directly to the Collateral Agent on behalf of all Pari Passu
Creditor Parties, and (ii) all insurance policies shall (A) with respect to
casualty policies, provide that no cancellation, reduction in amount or material
adverse change in coverage thereof shall be effective until at least 30 days
after receipt by the Collateral Agent of written notice thereof, (B) insure the
interests of the Pari Passu Creditor Parties regardless of any breach of or
violation by the Company or any other Person of any warranties, declarations or
conditions contained therein, and (C) provide that the Pari Passu Creditor
Parties shall have no obligation or liability for premiums, commissions,
assessments or calls in connection with such insurance or in connection with any
representation or warranty made by the Company or any Subsidiary in connection
with the obtaining of such insurance.
(e) The Company shall furnish to the Collateral Agent and each
Facility Agent within thirty days after each policy anniversary, or as requested
by the Collateral Agent or any Facility Agent 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
4.6. 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 cancellation by the insurer except as
permitted hereby.
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(f) Any payments received by the Company or any Subsidiary under any
insurance policy with respect to an Event of Loss which payment is not required
to be paid to the Collateral Agent shall be used by the Company or such
Subsidiary to restore or repair the assets subject to the Event of Loss or
reinvested into Additional Assets, in each case within 270 days after the
receipt thereof.
SECTION 4.7 FUTURE INFORMATION. The information in each document,
certificate or written statement (other than those described in Sections 4.1(a)
and (b)) required to be furnished to the Pari Passu Creditor Parties by or on
behalf of the Company or any Subsidiary with respect to the business, assets,
prospects, results of operations or financial condition of the Company, any
Subsidiary or any other Company Party at the time of delivery thereof, will be
true and correct in all material respects.
SECTION 4.8 CONDUCT OF BUSINESS; COMPLIANCE WITH LAW AND OTHER CONTRACTUAL
OBLIGATIONS.
(a) The Company shall, and shall cause each of its Subsidiaries to
engage only in Permitted Businesses, except for other businesses that are
incidental thereto and constitute an insubstantial part of the business of the
Company and the Subsidiaries taken as a whole.
(b) HoldCo shall (i) not engage in any business other than owning the
Capital Stock of the Company and activities incidental thereto, (ii) not enter
into any contract (other than (A) a Pari Passu Financing Document, (B) a
guaranty of the Company's obligations under any Permitted ICMS Debt, (C)
guaranties of the Company's obligations under any real property leases; provided
that the aggregate amount of HoldCo's Contingent Obligations in respect of such
lease guaranties shall not exceed at any time $500,000 and (D) contracts entered
into in the ordinary course of business as a holding company), and (iii) not
have any employees or incur any Debt or any material other liability (other than
under the Pari Passu Financing Documents, a guaranty of Permitted ICMS Debt and
guaranties of the Company's obligations under any real property leases; provided
that the aggregate amount of HoldCo's Contingent Obligations in respect of such
lease guaranties shall not exceed at any time $500,000).
(c) HoldCo and the Company shall, and shall cause each of their
Subsidiaries to, conduct its business in compliance with all Applicable Law and
all its Contractual Obligations, except to the extent any noncompliance could
not reasonably be expected to have a Material Adverse Effect.
(d) HoldCo shall cause the Company or at least one of the Subsidiary
Guarantors (i) to be a party to and have the full benefit of each Material
Contract referred to in clause (i) of the definition of "Material Contract,"
(ii) to own all assets purchased with the proceeds of any Pari Passu Debt, and
(iii) to own, have the right to use or, in the case of any other Material
Contract, be a party to and have the full benefit of, all assets, including such
other Material Contracts, as are necessary for the operation of the Project.
(e) HoldCo and the Company will pay and discharge, and will cause each
Subsidiary to pay and discharge, at or before maturity, all their respective
material obligations
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and liabilities (including, without limitation, tax liabilities, social security
liabilities or retirement or pension fund liabilities and claims of materialmen,
warehousemen and the like) which if unpaid might by law give rise to a Lien or
have priority over any Lien of the Collateral Agent, except where the same are
contested in good faith by appropriate action or proceedings that have the
effect of preventing forfeitures or the sale of assets, and will maintain, and
will cause each Subsidiary to maintain, in accordance with GAAP appropriate
reserves for the accrual thereof.
SECTION 4.9 CONSTRUCTION OF THE EXPANDED PROJECT; REPLACEMENT XXXXXX SUPPLY
AGREEMENT.
(a) The Company will cause the development and construction of the
Expanded Project to be conducted in a good and workmanlike manner, and in
accordance with all Applicable Laws and Governmental Approvals (including the
Mirror Authorizations, as amended), except to the extent any noncompliance could
not reasonably be expected to have a Material Adverse Effect.
(b) The Company shall, at least ninety days prior to the termination
of the Xxxxxx Supply Agreement, enter into a replacement supply agreement for
the Xxxxxx Supply Agreement which shall provide for the supply to the Company of
equipment and services similar in nature to those provided under the Xxxxxx
Supply Agreement, including point-to-point microwave technology and equipment,
having the specifications and in the quantities required by the Business Plan
for the period after the expiration of the Xxxxxx Supply Agreement (the
"Replacement Xxxxxx Supply Agreement"). In addition, at such time, the Company
shall also enter into a financing agreement equivalent in all material respects
to the Xxxxxx Note Purchase Agreement with the supplier under the Replacement
Xxxxxx Supply Agreement which shall provide for the financing, either through
the extension of loans or the purchase of notes having a aggregate principal
amount of not less than $22,000,000, of the technology and equipment to be
provided under the Replacement Xxxxxx Supply Agreement (the "Replacement Xxxxxx
Financing Agreement") and each of the creditor parties thereunder shall become a
Pari Passu Creditor Party under this Agreement by means of the agent under the
Replacement Xxxxxx Financing Agreement executing an Accession Agreement.
SECTION 4.10 GUARANTIES AND COLLATERAL.
(a) The Pari Passu Obligations shall (and the obligations under any
Hedging Contracts providing for the transfer or mitigation of interest rate risk
with respect to the Pari Passu Obligations may) at all times be secured by first
priority Liens in favor of the Collateral Agent on all assets, real and
personal, of HoldCo, the Company and its Subsidiaries, subject to the collateral
sharing arrangements set forth in Section 9.6 hereof and the limitations set
forth in this Section and the Collateral Documents.
(b) Promptly after the earlier of January 1, 2002 and the date such
grant shall become legal under Brazilian law and the terms of the Mirror
Authorizations, whether as a result of a change in law, an amendment to the
Mirror Authorizations or otherwise, the Company shall deliver to the Collateral
Agent such additional documents, and take such other steps, as may be necessary
or requested by the Collateral Agent to grant a first priority security interest
in the Mirror Authorizations to the Collateral Agent for the benefit of the
Secured Parties.
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(c) Within 10 days after the end of each Fiscal Quarter (or with
respect to accounts receivable, Cash Equivalents, Intercompany Debt and
Shareholder Loans ("Receivables Assets") within 10 days after the end of each
calendar month), the Company shall deliver to the Collateral Agent:
(i) a listing, certified as true, accurate and complete by a
Senior Officer of the Company, of all equipment, all accounts (including
accounts receivable), all Material Contracts, all Intellectual Property
Rights, general intangibles and other personal property or fixtures in
which the Company or any Subsidiary acquired an interest, and all
Shareholder Loans and other loans made by Affiliates to the Company, during
the immediately preceding Fiscal Quarter (or, with respect to Receivables
Assets, calendar month); and
(ii) amendments to the relevant Collateral Documents or other
documents, executed by the appropriate Company Party, in the form described
in such Collateral Documents and otherwise in form and substance
satisfactory to the Collateral Agent, as may be necessary to be signed by
such party, filed, recorded or registered with any Governmental Authority
in order to create in such personal property or fixtures constituting
Collateral a valid, enforceable and first priority Lien in favor of the
Collateral Agent for the benefit of the Secured Parties or as may otherwise
be requested by the Collateral Agent (or, in the case of the Proceeds
Account Pledge Agreements, in favor of the respective Proceeds Collateral
Agent, for the benefit of the respective Proceeds Secured Parties or as may
otherwise be requested by the Proceeds Collateral Agent);
provided, that (A) the listing and amendments in respect of the Company
Equipment Pledge Agreement or any Subsidiary Equipment Pledge Agreement required
to be delivered pursuant to clauses (i) and (ii) on any date need not contain or
cover equipment and other assets with book value of less than $50,000 per item,
up to an aggregate book value of $5,000,000 for the Company and the
Subsidiaries, taken as a whole, provided further, however, that this clause (A)
shall not apply to any equipment or other asset from time to time acquired under
or pursuant to any Supply Agreement (including civil works required in
connection with any Supply Agreement) or without which the functioning of the
fixed switched telephony network of the Company and its Subsidiaries would be
materially adversely affected (including customer premise equipment not
otherwise excluded from the Collateral), and (B) if the Company, since the date
of the last amendment to the Collateral Documents required pursuant to clause
(ii) above, has, in the aggregate, incurred Pari Passu Debt in excess of
$25,000,000 under the Pari Passu Financing Agreements, the Company shall comply
with the requirements of clauses (i) and (ii) above within 30 days of exceeding
such amount.
(d) Upon acquisition or lease by the Company or any of the
Subsidiaries during any Fiscal Quarter of (i) any switch site, call center, data
center or billing center or (ii) any other Real Property (other than cell site
leases) with a book or Fair Market Value in excess of $100,000, the Company,
within 10 days after the end of such Fiscal Quarter, shall (1) execute and
deliver, or shall cause such Subsidiary to execute and deliver, to the
Collateral Agent a Mortgage or other Pari Passu Collateral Document in respect
of such Real Property in form and substance satisfactory to the Collateral
Agent, and (2) cause such Mortgage or other Pari Passu
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Collateral Documents to be filed, recorded or registered with any Governmental
Authority as necessary in order to create in such Real Property a valid,
enforceable and first priority Lien in favor of the Collateral Agent for the
benefit of the Secured Parties, provided, that if the Company, since the last
date upon which any filing, recording or registration of any Mortgage or other
Collateral Document as necessary pursuant to this Section 4.10(d) was made, has,
in the aggregate, incurred Pari Passu Debt in excess of $25,000,000 under the
Pari Passu Financing Agreements, the Company shall comply with the requirements
of this Section 4.10(d) within 30 days of exceeding such amount. The Company and
such Subsidiary, at their own expense, shall execute and deliver, or cause to be
executed and delivered, and thereafter cause to be registered, filed or recorded
with the appropriate Governmental Authority, any and all documents and
instruments deemed by the Collateral Agent to be necessary or desirable for the
creation, perfection or first priority of the Liens referred to in paragraphs
(c) and (d) and shall pay all Taxes and fees related to such registration,
filing or recording.
(e) When entering into any Material Contract, the Company shall, and
shall cause each Subsidiary to, use commercially reasonable efforts to obtain a
Consent to Assignment, duly executed by the other party to the Material
Contract, and deliver the same to the Collateral Agent, provided that with
respect to any agreements with Affiliates of the Company, the Company shall
obtain a Consent to Assignment, duly executed by the other party to the Material
Contract, and deliver the same to the Collateral Agent.
(f) Within twenty days after the creation or acquisition after the
date hereof of any Wholly-Owned Subsidiary, the Company shall cause such
Subsidiary to execute and deliver to the Collateral Agent a Subsidiary Guaranty,
the Subsidiary Security Agreements, a Mortgage, and such other Pari Passu
Collateral Documents, and record, register or file such documents, in each case
as may necessary or requested by the Collateral Agent to create first priority
Liens in all assets of such Subsidiary, as the Collateral Agent or the Pari
Passu Creditors may request and the Company shall grant, or cause to be granted,
a first priority Lien on all of the issued and outstanding Capital Stock of such
Subsidiary pursuant to a Company Pledge Agreement or Subsidiary Pledge
Agreement, in each case in form and substance satisfactory to the Collateral
Agent.
(g) The standard form lease agreement of the Company and the
Subsidiaries pursuant to which such Company Party leases facilities or portions
of facilities, including cell sites ("Leased Facilities"), at which any
Collateral will be located (a "Lease") shall include a form of Consent and
Waiver and the Company shall use commercially reasonable efforts to cause such
provisions to be contained in each Lease executed after November 4, 1999 when
executed. The Company Parties shall further use commercially reasonable efforts
to obtain a subordination, non-disturbance and attornment agreement from each
mortgagee holding a Lien on any Leased Facilities and each ground lessor with
respect to the Leased Facilities, which shall be in form and substance
reasonably satisfactory to the Collateral Agent.
(h) The Company and each of the Subsidiaries shall enter into and
shall use its best efforts to cause each bank with which the Company or such
Subsidiary maintains a deposit account (the "Depository Bank") to enter into a
Deposit Account Agreement with the Collateral Agent pursuant to which such
Depository Bank will (i) acknowledge that the Collateral Agent, for the benefit
of the Secured Parties, has been granted a first-priority security interest in
and to
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all credit rights of the Company against the Depository Bank in respect of funds
from time to time deposited by the Company or the Subsidiary into each deposit
account held by such Depository Bank, (ii) agrees that, upon notice from the
Collateral Agent that an Event of Default has occurred, the Depository Bank (A)
will not make any disbursements from any deposit account except in accordance
with written instructions from the Collateral Agent and (B) if so directed by
the Collateral Agent, will transfer all amounts in such accounts to the Cash
Collateral Account, (iii) waive and agree not to assert, claim or exercise any
right of set-off, bankers' lien or similar right with respect to any deposit
account or the funds from time to time deposited therein and (iv) agree not to
revoke the agreements set forth in the Deposit Account Agreement at any time
that any deposit account is maintained by the Company or any Subsidiary at the
Depository Bank without the prior written consent of the Collateral Agent.
(i) Concurrently with the establishment of any brokerage account with
respect to any Cash Equivalents (other than any Cash Equivalents held in the
Note Proceeds Accounts, to which clause (l) and not this clause (i) shall
apply), the Company shall (i) cause the broker with which such account is
established to execute and deliver to the Collateral Agent a custodial account
agreement, in form and substance satisfactory to the Collateral Agent, pursuant
to which the broker will acknowledge that the Collateral Agent has a valid,
enforceable and first priority security interest in the Cash Equivalents from
time to time deposited in the brokerage account and agreeing that, upon notice
from the Collateral Agent that an Event of Default has occurred, such broker
shall cause the Cash Equivalents deposited in the brokerage account to be
transferred to a custodial account over which the Collateral Agent shall have
sole dominion and control and (ii) execute and deliver to the Collateral Agent
an irrevocable power of attorney with respect to the brokerage account in form
and substance reasonably satisfactory to the Collateral Agent. Immediately upon
the acquisition by the Company of any Cash Equivalents having, either
individually or in the aggregate, either a face amount or Fair Market Value in
excess of $25,000,000, and not later than thirty (30) days after acquisition of
any other Cash Equivalent held in excess of thirty (30) days, the Company shall
cause a Cash Collateral Pledge Agreement with respect to any such Cash
Equivalent to be filed, recorded or registered with any Governmental Authority
in order to create in such Cash Equivalent (if then in existence) a valid,
enforceable and first priority Lien in favor of the Collateral Agent for the
benefit of the Secured Parties or as may otherwise be requested by the
Collateral Agent.
(j) Concurrently with the receipt by or for the account of the Company
or any Subsidiary of Non-Cash Proceeds of any Asset Disposition, the Company
shall promptly perform or cause to be performed all actions the Collateral Agent
considers necessary or advisable to grant, create, perfect and maintain
perfected a first priority security interest in such Non-Cash Proceeds in favor
of the Collateral Agent for the benefit of the Secured Parties.
(k) If during any Fiscal Quarter the Company or any Subsidiary enters
into any Material Contract or Lease as to which a Consent to Assignment or
Consent and Waiver is not being obtained, or that is subject to any legal or
contractual restriction that would prevent a first priority Lien to be created
in favor of the Collateral Agent for the benefit of the Secured Parties or that
would limit or restrict the ability of the Collateral Agent on behalf of the
Secured Parties from legally or practically exercising or enforcing their rights
to foreclose upon or transfer to a third party upon such foreclosure any part of
such Collateral or that would in any material respect hinder or limit the value
of the Collateral upon such foreclosure or transfer, the
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Company shall, within 10 days after the end of such Fiscal Quarter, notify the
Collateral Agent of such occurrence.
(l) Upon the receipt by the Company of any proceeds of any issuance of
Notes pursuant to any Note Purchase Agreement not immediately used for the
purposes set forth in clause (A) or (B) of the proviso to Section 2.2(a) of such
Note Purchase Agreement, the Company shall (i) promptly make Investments in (I)
marketable direct obligations issued by the Government of Brazil, the Central
Bank or any agency thereof and backed by the full faith and credit of the
Government of Brazil, in each case that (x) mature within ninety days from the
date of acquisition thereof, (y) are indexed to or denominated in Dollars, and
(z) are reasonably satisfactory to the Purchaser Parties specified in the
respective Note Purchase Agreement, or (II) certificates of deposit, in each
case that (u) mature within ninety days from the date of acquisition thereof,
(v) are subject to a swap agreement that has the effect of indexing the
principal amount thereof to Dollars that is with a counterparty acceptable to
the Purchaser Parties specified in the respective Note Purchase Agreement and
(w) is issued by a financial institution reasonably acceptable to the Purchaser
Parties specified in the respective Note Purchase Agreement and (ii) at all
times hold such excess or Cash Equivalents in which such excess cash is invested
in Proceeds Accounts (each of which Proceeds Accounts will hold only the excess
proceeds from one of the Note Purchase Agreement) with a broker that shall be
acceptable to the Purchaser Parties specified in the respective Note Purchase
Agreement to the extent provided therein and with respect to which the Company
has (1) delivered a power of attorney in form and substance acceptable to the
respective Initial Facility Agent and the Purchaser Parties specified in the
respective Note Purchase Agreement and (2) executed and delivered Proceeds
Account Pledge Agreements pursuant to which the credit rights of the Company (if
such Proceeds Account is a deposit account) and the Cash Equivalents held in
each such Proceeds Account are pledged to the respective Proceeds Collateral
Agent for the ratable benefit of the Purchaser Parties under the respective Note
Purchase Agreement, which Proceeds Account Pledge Agreement has been filed,
recorded or registered with each relevant Governmental Authority.
Notwithstanding anything herein to the contrary, each Proceeds Account will be
Collateral only for the respective Note Purchase Agreement and shall not
constitute Common Collateral or collateral for any other Note Purchase Agreement
or any other Pari Passu Financing Agreement.
SECTION 4.11 SUBORDINATION OF INTERCOMPANY DEBT AND AFFILIATE AGREEMENTS.
The Company shall cause (a) all Intercompany Debt, (b) all Debt owed by the
Company or any Subsidiary to the Parent Shareholders, the Shareholders, or
HoldCo, or any of their respective Affiliates (other than Debt owed under the
Qualcomm/Ericsson Note Purchase Agreement), and (c) all payment obligations
under Affiliate Agreements to be subordinated to the Pari Passu Obligations
pursuant to the terms of the Intercompany Debt Subordination Agreement or the
Shareholder Pledge Agreement, as the case may be.
SECTION 4.12 INTEREST RATE PROTECTION. The Company shall maintain a prudent
hedging program protecting against interest rate fluctuations with respect to
the Pari Passu Financings and all other Debt of the Company and the Subsidiaries
bearing interest at a floating rate outstanding from time to time.
SECTION 4.13 ENVIRONMENTAL COMPLIANCE. The Company shall comply, and shall
cause its Subsidiaries to comply, in all material respects with all
Environmental Requirements
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and shall not cause or permit to exist on any Real Property any Hazardous
Materials, unless the presence of such materials is necessary or desirable for
the conduct of the business of the Company and its Subsidiaries, all necessary
Governmental Approvals for such activity have been obtained and there is no
material risk that any Material Environmental Damages could result from such
activity.
SECTION 4.14 YEAR 2000 COMPLIANCE. The Company shall use commercially
reasonable efforts to ensure that all internal information systems and other
computer systems and equipment of the Company and its Subsidiaries will be Year
2000 Compliant, except to the extent that any failure of such systems and
equipment to be Year 2000 Compliant would not reasonably be likely to result in
a Material Adverse Effect. The Company will promptly notify the Collateral Agent
in the event the Company discovers or determines that any computer application
that is material to its or any of the Subsidiaries' business and operations will
not be Year 2000 Compliant on a timely basis.
SECTION 4.15 REGISTRATION OF PRIOR APPROVALS, ETC. Within 30 days after a
disbursement of a Pari Passu Financing under any of the Pari Passu Financing
Agreements to the Company pursuant to a Prior Approval, the Company shall
register the applicable Prior Approval with the Central Bank together with all
relevant foreign exchange contracts in order to obtain a Certificate of
Registration and shall provide the Collateral Agent with satisfactory evidence
of such registration. In addition, the Company shall maintain in full force and
effect all Central Bank approvals and authorizations required in respect of
payment of interest, principal and any other amounts due under the Pari Passu
Financing Agreements and shall seek and obtain all further approvals and
authorizations that are necessary to maintain the effect of such approvals and
authorizations on terms and conditions no less favorable than those in effect on
the Closing Date.
SECTION 4.16 FURTHER ASSURANCES.
(a) Each Company Party will, at the Company's sole cost and expense,
do, execute, acknowledge and deliver all such further acts, deeds, conveyances,
mortgages, assignments, notices of assignment and transfers as the Collateral
Agent shall from time to time reasonably request, which may be necessary in the
reasonable judgment of such Agent from time to time to assure, perfect, convey,
assign and transfer to the Collateral Agent the property and rights conveyed or
assigned pursuant to the Pari Passu Collateral Documents (or, in the case of the
Proceeds Account Pledge Agreements, to the respective Proceeds Collateral Agent
the property and rights conveyed or assigned pursuant thereto).
(b) The Company will not, and will not permit any of its Subsidiaries
to, enter into or become subject to any agreement which would impair their
ability to comply, or which would purport to prohibit them from complying, with
the provisions of this Section or Section 4.10.
(c) The Company shall use commercially reasonable efforts to obtain
all further approvals and authorizations that are necessary to permit all
payments from time to time required under the Pari Passu Financing Documents,
including Mandatory Prepayments,
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Mandatory Repurchases and Mandatory Partial Repurchases and payments due upon
acceleration.
(d) The Company shall use its best efforts to cause, as promptly as
practicable, one fully executed original of each of the Note Documents set forth
in Part A of Schedule 2.3 to be translated into the Portuguese language by a
sworn translator.
(e) The Company shall, and shall cause each other Company Party, to
pursue diligently immediately after the Closing Date any matter set forth on
Schedule 2.3 and to resolve any such matter by the date set forth opposite
thereto on Schedule 2.3.
ARTICLE 5.
NEGATIVE COVENANTS OF THE COMPANY
So long as any portion of the Pari Passu Commitments is in effect or any
Pari Passu Obligations remain unpaid or have not been performed in full:
SECTION 5.1. LIENS. The Company shall not, and shall not permit any of the
Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any asset of the Company or any of the
Subsidiaries, or any income or profits therefrom, whether now owned or hereafter
acquired, except:
(a) Liens securing the Obligations;
(b) Existing Liens;
(c) (i) Liens for taxes, assessments or charges of any Governmental
Authority for claims that are not material and are not yet due or are being
contested in good faith by appropriate proceedings, which have the effect of
preventing forfeiture or sale of the assets to which such Liens attach, and, in
each case, with respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with GAAP; (ii) statutory Liens of
landlords and Liens of carriers, warehousemen, mechanics, materialmen, bankers
and other Liens imposed by law for amounts that are not material and that are
not overdue by more than thirty days or that are being contested in good faith
by appropriate proceedings which have the effect of preventing forfeiture or
sale of the assets to which such Liens attach, and with respect to which
adequate reserves or other appropriate provisions are being maintained in
accordance with GAAP; (iii) easements, rights-of-way, covenants, consents,
reservations, encroachments, variations and other restrictions, charges or
encumbrances (whether or not recorded); (iv) building restrictions, zoning laws
and other statutes, laws, rules, regulations, ordinances and restrictions; and
(v) leases or subleases granted in the ordinary course of business to others not
materially interfering with the business of the Company or any of the
Subsidiaries;
(d) Liens on assets securing Permitted CPE Financing or Purchase Money
Debt permitted to be incurred or assumed pursuant to Section 5.2(a)(iii) or (ix)
(including any interest or title of a lessor under any Capitalized Lease or any
Operating Lease arising out of a
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Sale and Leaseback Transaction), provided that any such Lien does not encumber
any property other than the assets acquired with the proceeds of such Debt;
(e) Pari Passu Liens securing Pari Passu Obligations (other than the
Obligations) in respect of Other Pari Passu Debt otherwise permitted to be
incurred pursuant to Section 5.2(a)(i);
(f) Liens existing on assets of any Person at the time such Person
becomes a Subsidiary, provided that (i) such Lien was not created in
contemplation of such Person becoming a Subsidiary, and (ii) such Lien does not
encumber any assets other than the assets subject to such Lien at the time such
Person becomes a Subsidiary;
(g) Liens securing Debt under Interest Hedge Agreements, to the extent
such Debt thereunder is permitted to be secured by Section 5.2(a)(viii);
(h) any Lien securing Permitted Refinancing Debt constituting a
renewal, extension, refunding, refinancing or replacement of any Existing Lien
or any Lien permitted by Section 5.1(e), 5.1(f) or 5.1(g), provided that (i) the
amount of Debt or other obligation secured by such renewal, extension,
refunding, refinancing or replacement Lien does not exceed the amount of the
Debt or other obligation renewed, extended, refunded, refinanced or replaced by
such Permitted Refinancing Debt, unless such excess is otherwise permitted
hereby at the time of the extension, renewal, refunding, refinancing or
replacement, (ii) the average weighted maturity of such Debt or other obligation
is not shortened and (iii) such Lien is limited to all or a part of the property
subject to the Lien extended, renewed, refunded, refinanced or replaced; and
(i) other Liens incidental to the conduct of the business or the
ownership of the assets of the Company or any of the Subsidiaries that (i) were
not incurred in connection with borrowed money or other Debt, (ii) do not in the
aggregate materially detract from the value of the assets subject thereto or
materially impair the use thereof in the operation of such business and (iii) do
not secure obligations aggregating in excess of $1,000,000.
SECTION 5.2. DEBT.
(a) The Company shall not, and shall not permit any of the
Subsidiaries to, directly or indirectly, create, incur, assume, guaranty, or
otherwise become or remain liable with respect to, any Debt, except, subject to
Section 5.2(b):
(i) the Obligations, Funding Gap Financing and Exchange Debt (and
any Permitted Refinancing Debt in respect of any of the foregoing),
provided that the aggregate principal amount of all such Debt does not
exceed [***] at any time outstanding;
(ii) Existing Debt (other than Other Pari Passu Debt or Purchase
Money Debt), provided that all such Existing Debt is repaid on the Closing
Date out of the proceeds of Notes issued on such date;
(iii) Purchase Money Debt (including Capitalized Leases and
Attributable Debt arising out of a Sale and Leaseback Transaction) and any
Permitted
[*] 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.
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Refinancing Debt in respect of any of the foregoing, provided that the
aggregate outstanding principal amount of all such Debt does not exceed (A)
prior to December 31, 2002, [***] and (B) after December 31, 2002, [***];
(iv) Debt of the Company under the Working Capital Facility;
(v) Intercompany Debt (i) of the Company to any Subsidiary
Guarantor or (ii) of a Subsidiary to the Company or a Subsidiary Guarantor,
to the extent otherwise permitted hereunder and in compliance with Sections
4.10, 4.11 and 5.4, provided that such Intercompany Debt is evidenced by
promissory notes pledged and delivered to the Collateral Agent for the
benefit of the Secured Parties;
(vi) Contingent Obligations of any Subsidiary Guarantor in the
form of guaranties of Other Pari Passu Debt of the Company that is
otherwise permitted under this Section 5.2;
(vii) Shareholder Loans;
(viii) unsecured Debt under (A) Interest Hedge Agreements;
provided, however, the Debt thereunder may be secured (i) by the Collateral
(but no other assets of the Company and the Subsidiaries), if such Debt is
owed to a Swap Lender and constitutes a part of the Pari Passu Obligations
or (ii) by the same collateral as secures the Debt to which such Interest
Hedge Agreement relates (but no other assets of the Company and the
Subsidiaries), if the Debt to which the Interest Hedge Agreement relates is
permitted by Section 5.1 to be secured and (B) Currency Hedge Agreements
contemplated by Section 4.10(l);
(ix) Permitted CPE Financing in an aggregate principal amount at
any time outstanding not to exceed (i) through December 31, 2000, [***] (ii)
from January 1, 2001 through December 31, 2001, [***] and, (iii) after
December 31, 2001, [***] and
(x) Permitted ICMS Debt.
(b) Notwithstanding anything herein to the contrary, the aggregate
principal amount of Debt at any time outstanding pursuant to clauses (iii), (iv)
and (ix) of Section 5.2(a) shall not exceed [***].
(c) For purposes of determining compliance with the foregoing Section
5.2(a), (i) in the event that an item of Debt meets the criteria of more than
one of the types of Debt described above, the Company, at its discretion, will
classify such item of Debt at the time of its incurrence and will only be
required to include the amount and type of such Debt in one of the above clauses
and (ii) an item of Debt may be divided and classified from time to time in more
than one of the types of Debt described above.
SECTION 5.3. RESTRICTED PAYMENTS. The Company shall not, and shall not
permit any Subsidiary to, directly or indirectly, declare, pay or make, or agree
to declare, pay or make, any
[*] 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.
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Restricted Payment, except for dividends, distributions or payments by any
Subsidiary to any Subsidiary Guarantor or the Company.
SECTION 5.4. INVESTMENTS AND ACQUISITIONS. The Company shall not, and shall
not permit any of the Subsidiaries to, directly or indirectly, make or own any
Investment or Acquisition, except:
(a) Investments in Cash Equivalents;
(b) (i) security deposits, advance payments and trade credits extended
by the Company or any Subsidiary on usual and customary terms in the ordinary
course of business, and (ii) advances by the Company or any Subsidiary to
employees for moving, relocation and travel expenses, drawing accounts and
similar expenditures in the ordinary course of business and not to exceed
$200,000 at any time outstanding;
(c) Investments by the Company or any of the Subsidiary Guarantors in
any Subsidiary Guarantor, provided that (i) the aggregate amount of all such
Investments in Subsidiary Guarantors does not exceed [***] at any time, and (ii)
if any such Investment is in the form of Intercompany Debt, Section 4.11 is
complied with;
(d) Investments in Hedging Contracts as contemplated by Section 4.12
and as permitted by Sections 5.2(a)(viii) and 5.16;
(e) Investments in Vesper Cayman SPV or any other single purpose,
bankruptcy-remote entity if such entity substantially concurrently uses the
proceeds of any such Investment to make a payment under any Pari Passu Financing
Agreement; and
(f) any Investments not otherwise permissible hereunder (including
Investments in Non-Cash Proceeds of permitted Asset Dispositions but excluding
Investments in Vesper Cayman SPV); provided that the aggregate amount of such
Investments, in the aggregate, does not exceed (i) on or prior to December 31,
2000, [***] (ii) after December 31, 2000 and on or prior to December 31, 2002,
[***] or (iii) after December 31, 2002, [***] at any time outstanding.
SECTION 5.5. OPERATING COVENANTS.
(a) MINIMUM ANNUALIZED REVENUES. The Company will not permit
Annualized Revenues as of the last day of any Fiscal Quarter set forth on
Schedule 5, determined on a consolidated basis, to be less than the amount set
forth opposite such Fiscal Quarter in column A of Schedule 5.
(b) SUBSCRIBERS. The Company will not permit the total number of
Subscribers as of the end of any Fiscal Quarter set forth on Schedule 5 to be
less than the number set forth opposite such Fiscal Quarter in column B of
Schedule 5.
[*] 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.
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SECTION 5.6. FINANCIAL COVENANTS.
(a) SENIOR DEBT TO TOTAL CAPITALIZATION. The Company will not permit
the ratio of Senior Debt to Total Capitalization, determined on a consolidated
basis:
(i) to exceed, if any Exchange Debt is issued before December 31,
2002, the Target Ratio at any time from the date of issuance of such
Exchange Debt through December 31, 2002; and
(ii) to exceed [***] at any time after December 31, 2002.
For purposes of the foregoing, "TARGET RATIO" means the ratio of Senior Debt to
Total Capitalization determined pursuant to the terms of the Exchange Debt
Agreement, which shall not be less than [***].
(b) TOTAL DEBT TO TOTAL CAPITALIZATION. The Company will not permit
the ratio of Total Debt (other than Qualifying Shareholder Loans) to Total
Capitalization, determined on a consolidated basis, to exceed [***] at any time
on or before December 31, 2002.
(c) TOTAL DEBT TO ANNUALIZED EBITDA. The Company will not permit the
ratio of (i) Total Debt (other than Qualifying Shareholder Loans) outstanding on
the last day of any Fiscal Quarter ending on any date set forth on Schedule 5,
determined on a consolidated basis, to (ii) Annualized EBITDA at such date,
determined on a consolidated basis, to be greater than the ratio set forth
opposite such date in column C of Schedule 5.
(d) EBITDA TO INTEREST EXPENSE. The Company will not permit the ratio
of (i) EBITDA for the two consecutive Fiscal Quarters ending on any date set
forth on Schedule 5, determined on a consolidated basis, to (ii) Interest
Expense for such two consecutive Fiscal Quarters, determined on a consolidated
basis, to be less than the ratio set forth opposite such date in column D of
Schedule 5.
(e) EBITDA TO FIXED CHARGES. The Company will not permit the ratio of
(i) EBITDA for the two consecutive Fiscal Quarters ending on any date set forth
on Schedule 5, determined on a consolidated basis, to (ii) Fixed Charges for
such two consecutive Fiscal Quarters, determined on a consolidated basis, to be
less than the ratio set forth opposite such date in column E of Schedule 5.
(f) MAXIMUM CAPITAL EXPENDITURES. The Company will not permit Capital
Expenditures during any Fiscal Year ending on any date set forth on Schedule 5
to exceed the amount set forth opposite such period in column F of Schedule 5.
For purposes of this Section 5.6(f), Capital Expenditures for any period
denominated in Reais shall be converted into Dollars by applying the Average
Conversion Factor for such period to such expenditures. To the extent the amount
set forth in the table for any period is not used in such period, 100% of the
unused portion of such amount may be used in the immediately succeeding period,
without carryforward to any subsequent period. Any use in any period shall be
attributable (i) first, to the amount of any carryforward and (ii) second, to
the amount permitted for 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.
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SECTION 5.7. RESTRICTION ON FUNDAMENTAL CHANGES. The Company shall not, and
shall not permit any of the Subsidiaries to, directly or indirectly, enter into
any merger, consolidation, reorganization or recapitalization, reclassify its
Capital Stock, liquidate, wind up or dissolve or sell, lease, transfer or
otherwise dispose of, in one transaction or a series of transactions, all or
substantially all of its or their business or assets, whether now owned or
hereafter acquired, provided that as long as no Default or Event of Default
shall exist after giving effect to such merger, consolidation or sale, any of
the Subsidiaries may be merged or consolidated with or into the Company or any
Subsidiary Guarantor, or be liquidated, wound up or dissolved, or all or
substantially all of its business or assets may be sold, leased, transferred or
otherwise disposed of, in one transaction or a series of transactions, to the
Company or any Subsidiary Guarantor.
SECTION 5.8. ASSET DISPOSITIONS; EVENT OF LOSS.
(a) The Company shall not, and shall not permit any of the
Subsidiaries to, directly or indirectly, make or agree to make, any Asset
Disposition (other than an Event of Loss), unless:
(i) no Default or Event of Default then exists or would result
therefrom;
(ii) the Asset Disposition does not involve the Mirror
Authorizations and is otherwise permissible under Sections 5.7 and 5.11;
(iii) the Company or any of the Subsidiaries involved in such
Asset Disposition, as applicable, receives aggregate consideration at least
equal to the Fair Market Value of the assets subject to such Asset
Disposition, and such consideration is either in the form of cash or
Non-Cash Proceeds otherwise permitted by Section 5.4(f), provided any such
Non-Cash Proceeds are subject to a first priority security interest in
favor of the Collateral Agent for the benefit of the Secured Parties as
required by Section 4.10(j);
(iv) not less than 15 days prior to the date on which the Company
or any of its Subsidiaries anticipates that an Asset Disposition shall
occur (or, with respect to any Asset Disposition for which the Company or
any of the Subsidiaries anticipates the receipt of aggregate consideration
with a Fair Market Value of less than $10,000,000, within 60 days after the
end of each Fiscal Quarter), the Company shall provide to each of the Pari
Passu Agents and the Pari Passu Creditors (A) notice of such event, (B) a
certificate of a Senior Officer setting forth (1) a good faith estimate of
the portion of the Net Cash Proceeds thereof that will be reinvested or
tendered for prepayment in accordance with Section 5.8(a)(v)(A), if
applicable, (2) a description of such Asset Disposition and any Non-Cash
Proceeds in reasonable detail, (3) the date or scheduled date of such Asset
Disposition, and (4) a certification that such Asset Disposition complies
(or complied) with the provisions of this Section 5.8, and (C) a
certificate by its Chief Financial Officer demonstrating that the Company
and its Subsidiaries are (or were) in compliance with the Financial and
Operating Covenants, giving pro forma effect to such Asset Disposition; and
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(v) the Company:
(A) causes that portion of the Net Cash Proceeds thereof
that is identified in such notice as being reinvested pursuant to this
clause (A),
(1) in the case of any Asset Disposition for which the
Company or any of the Subsidiaries receives Gross Cash Proceeds
in excess of $5,000,000, on the closing date of such Asset
Disposition, to be deposited into a Cash Collateral Account with,
and subject to a valid, enforceable and first priority pledge to,
the Collateral Agent to secure the Pari Passu Obligations as
provided in the Pari Passu Collateral Documents and Section 4.10
(with amounts from time to time contained in the Cash Collateral
Account (together with any investment earnings thereon) being
invested and reinvested in Cash Equivalents subject to a valid,
enforceable and first priority pledge in favor of the Collateral
Agent as set forth in the Cash Collateral Pledge Agreement and
Section 4.10), in each case until reinvested or used to prepay or
repurchase the Pari Passu Financings, in accordance with clause
(B) below, and
(2) to be reinvested into Additional Assets within 180
days after the consummation of such disposition, and
(B) causes the balance of any such Net Cash Proceeds
remaining after such reinvestment period, or that the Company
otherwise elects not to reinvest, and any Cash Equivalents in which
such amounts may from time to time be invested and any income thereon
(collectively, the "Asset Disposition Prepayment Amount"), to be
applied to prepay or repurchase the Pari Passu Obligations as provided
in Article 8 hereof and the Pari Passu Financing Agreements; and
(vi) in the case of an Asset Disposition involving any
Collateral, such transaction satisfies the conditions for release of such
Collateral under the respective Collateral Documents and the respective
Pari Passu Financing Agreements (which may, among other possible
conditions, require the prior written consent of the Pari Passu Creditors).
(b) In the case of any Event of Loss,
(i) other than with respect to any Event of Loss which is not an
Expropriation Event and the Fair Market Value of the assets subject to
which Event of Loss (other than an Expropriation Event) is $5,000,000 or
less, promptly upon receipt, the Company shall cause the Net Cash Proceeds
of such Event of Loss to be deposited into the Cash Collateral Account with
and pledged to the Collateral Agent to secure the Pari Passu Obligations as
provided in the Pari Passu Collateral Documents and Section 4.10, in each
case until reinvested or used to prepay the Pari Passu Financings or
otherwise applied as provided herein; and
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(ii) the Company shall:
(A) if such Event of Loss is not an Expropriation Event and
the Fair Market Value of the assets subject to such Event of Loss
(other than an Expropriation Event) is $25,000,000 or less, or the
Collateral Agent and the Required Pari Passu Creditors shall so agree
in writing, cause the Net Cash Proceeds of such Event of Loss, and any
Cash Equivalents in which such amounts may from time to time be
invested and any income thereon (collectively, the "Event of Loss
Application Amount"), to be used to restore or repair the assets
subject to such Event of Loss or reinvested into Additional Assets, in
each case within 270 days after the receipt thereof, or
(B) if clause (A) does not apply, or if there remains a
balance of any such Net Cash Proceeds after such reinvestment period,
or if the Company so elects, cause such Net Cash Proceeds and the
balance of the Event of Loss Application Amount to be applied to
prepay or repurchase the Pari Passu Obligations as provided in Article
8 hereof and the Pari Passu Financing Agreements.
(c) Notwithstanding anything in this Section 5.8 or the definition of
"Asset Disposition" or "Event of Loss" to the contrary, if any sale, transfer or
other disposition of any asset or assets of the Company or any of the
Subsidiaries, or any Event of Loss, that otherwise would not result in any
obligation to use the proceeds thereof to make a Mandatory Prepayment under the
Pari Passu Financing Agreements, gives rise to a requirement to prepay, redeem,
purchase, defease or otherwise satisfy or retire any Debt (other than Pari Passu
Debt or Purchase Money Debt permitted to be outstanding under Section 5.2) under
any agreement or document pursuant to which such Debt is outstanding, then,
notwithstanding any other provision of this Agreement, (a) such disposition
shall constitute an "Asset Disposition" or "Event of Loss," as applicable, (b)
all Net Cash Proceeds thereof shall constitute Asset Disposition Prepayment
Amounts or Event of Loss Application Amount, (c) all Non-Cash Proceeds shall be
pledged to the Collateral Agent as required by Section 4.10(j) and (d) promptly
upon receipt thereof, such proceeds shall be applied to make a Mandatory
Prepayment pursuant to Article 8 hereof and the Note Purchase Agreements. Any
such Mandatory Prepayment shall be required to be made, whether or not any such
prepayment, redemption, purchase, defeasance or other satisfaction or retirement
is then permissible under Section 5.11 and without waiving any Default or Event
of Default that would result therefrom under such Section.
(d) All amounts from time to time deposited into the Cash Collateral
Account pursuant to this Section 5.8 shall be released to the Company upon
submission to the Collateral Agent of a certificate by a Senior Officer of the
Company to the effect that such amounts will be used substantially
contemporaneously with such release for the purposes permitted by this Section
5.8 and the other Pari Passu Financing Documents.
(e) The Company shall not and shall cause the Subsidiaries not to
agree to any settlement or compensation with respect to any Expropriation Event
without the prior written consent of the Collateral Agent and all Pari Passu
Creditors.
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SECTION 5.9. SALES OF RECEIVABLES. The Company shall not, and shall not
permit any of the Subsidiaries to, directly or indirectly, sell with or without
recourse, discount (except in the ordinary course of business to resolve
disputes with customers) or otherwise sell for less than the face value thereof
or for consideration other than cash, any of its accounts, instruments, chattel
paper, general intangibles for the payment of money or other receivables.
SECTION 5.10. SALE AND LEASEBACK. The Company will not, and will not permit
any Subsidiary to, enter into any Sale and Leaseback Transaction unless:
(a) no Default or Event of Default then exists;
(b) the Company or such Subsidiary would be entitled to
(i) incur Debt in an amount equal to the Attributable Debt with
respect to such Sale and Leaseback Transaction pursuant Section 5.2; and
(ii) incur a Lien to secure such Attributable Debt pursuant to
Section 5.1;
(c) the consideration received by the Company or such Subsidiary in
connection with such Sale and Leaseback Transaction is at least equal to the
Fair Market Value of the assets or property subject thereto; and
(d) the transfer of such assets or property is permitted by Section
5.8, and to the extent required by Section 5.8, the Company applies the proceeds
of such transaction in compliance with Section 5.8;
provided that the aggregate principal amount of all Attributable Debt arising
from such Sale and Leaseback Transactions does not exceed [***] at any
time outstanding.
SECTION 5.11. TRANSACTIONS WITH AFFILIATES.
(a) The Company shall not, and shall not permit any of the
Subsidiaries to, directly or indirectly, enter into any transaction (including
the transfer or lease of any property or the rendering of any service but
excluding any transactions pursuant to the Qualcomm/Ericsson Note Purchase
Agreement, an "Affiliate Transaction") with any Shareholder, Parent Shareholder
or any Affiliate of the Company, any of the Subsidiaries, any Shareholder, or
any Parent Shareholder, unless such transaction is on fair and reasonable terms
no less favorable to the Company or any of the Subsidiaries than those terms
that might be obtained at the time in a comparable arm's length transaction with
a Person who is not an Affiliate of the Company or, if such transaction is not
one that by its nature could be obtained from such other Person, is on fair and
reasonable terms and was negotiated in good faith, provided that this Section
5.11 shall not restrict (1) dividends, distributions and other payments and
transfers on account of the Capital Stock of the Company or any of the
Subsidiaries otherwise permitted by Section 5.3, (2) any transaction in the
ordinary course of business between the Company and any Subsidiary Guarantor or
between or among Subsidiary Guarantors, (3) the payment of reasonable and
customary fees to the directors of the Company and its Subsidiaries who are not
employees of the Company or its Subsidiaries, (4) loans or advances permitted
under Section 5.4(b)(ii), (5)
[*] 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.
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transactions under the Supply Agreements, the BCI Technical Services Agreement,
the Know-How Agreement and the Secondment Agreement, in each case as in effect
on the Closing Date and as amended with the consent of the Pari Passu Creditors
in accordance with Section 9.8 or (6) transactions under the VeloCom Technical
Services Agreement that are on substantially identical terms as those applicable
to transactions under the BCI Technical Services Agreement as in effect on the
Closing Date.
(b) The Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, engage in any transaction that would
result in the bundling or sharing of services with any other Affiliate, except
that:
(i) prior to a Non-Recourse Assignment of all or any portion of
the Notes or the Commitments, the Company or any of the Subsidiaries may
engage in any transaction that would result in the bundling or sharing of
services with any Affiliate, or in a sharing of revenues or profits with
any Affiliate, provided that (I) all such transactions, comply with Section
5.11(a) and (II) the Company shall, and shall require its Subsidiaries to,
within 10 days after the end of each Fiscal Quarter, deliver to the
Collateral Agent and each of the Pari Passu Creditor Parties a report
providing a detailed summary of all transactions, arrangements and
agreements with any Affiliate during such Fiscal Quarter.
(ii) after a Non-Recourse Assignment of all or any portion of the
Notes or the Commitments, the Company or any of the Subsidiaries may engage
in any transaction that would result in the bundling or sharing of services
with an Affiliate, or in a sharing of revenues or profits with any
Affiliate, provided that (I) all such transactions comply with Section
5.11(a), (II) the Company shall, and shall require its Subsidiaries to,
within 10 days after the end of each Fiscal Quarter, deliver to the
Collateral Agent, each of the Pari Passu Creditor Parties and the
independent certified public accountants of the Company a report providing
a detailed summary of all transactions, arrangements and agreements with
any Affiliate during such Fiscal Quarter and (III) in accordance with
Section 4.1(f)(II), a written statement is issued by the independent
certified public accountants of the Company certifying that the Company or
its Subsidiaries, as the case may be, have complied with Section 5.11(a).
SECTION 5.12. PREPAYMENT OF DEBT. The Company shall not, and shall not
permit any of the Subsidiaries to, directly or indirectly, make any voluntary or
mandatory payment or distribution on account of, or voluntarily or mandatorily
purchase, acquire, redeem or retire, any Debt, prior to 30 days before its
originally stated maturity (or its stated maturity on the date hereof, in the
case of Debt outstanding on the date hereof), or in the case of interest, its
stated due date, or directly or indirectly become obligated to do any of the
foregoing by amending the terms thereof or otherwise, except for:
(a) optional or mandatory prepayments or repurchases of, or payments
or distributions on account of the purchase, acquisition, repurchase, redemption
or other retirement of Pari Passu Debt or of other amounts pursuant to the Pari
Passu Financing Documents prior to their stated maturity, provided that if the
Company makes any such prepayment or repurchase, or makes any such payment or
distribution on account of the purchase, acquisition, repurchase,
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redemption or other retirement of Pari Passu Debt in accordance with the terms
of the applicable Pari Passu Financing Agreement, the Company must elect to
optionally prepay or voluntarily repurchase all other Pari Passu Debt on a pro
rata basis (based upon the respective principal amounts outstanding under the
respective Pari Passu Financing Agreements) under the optional prepayment or
voluntary repurchase terms of the respective Pari Passu Financing Agreements;
(b) prepayments made with the proceeds of Refinancing Debt (other than
in respect of Pari Passu Debt) incurred for the purpose of refinancing the Debt
being prepaid, to the extent permitted by Section 5.2;
(c) prepayments of accounts payable;
(d) prepayments by Subsidiaries of Debt owed to the Company or to
Subsidiary Guarantors, to the extent otherwise permissible under the
Intercompany Debt Subordination Agreement;
(e) repurchase of Exchange Debt with the proceeds of Qualified Funded
Equity pursuant to Section 3(d) of the Capital Contribution Agreement;
(f) prepayments under the Working Capital Facility; and
(g) prepayment of Purchase Money Debt permitted by Section
5.2(a)(iii).
SECTION 5.13. LIMITATION ON CONTINGENT OBLIGATIONS. The Company shall not,
and shall not permit any Subsidiary of the Company to, at any time Guaranty,
assume, be obligated with respect to, or permit to be outstanding any Contingent
Obligation other than (a) obligations under agreements of the Company or any of
its Subsidiaries entered into in connection with leases of real property or the
acquisition of services, supplies and equipment in the ordinary course of
business of the Company or any of its Subsidiaries, (b) as may be contained in
any Pari Passu Financing Document, (c) obligations under Hedging Contracts
otherwise permissible under Section 5.2(a)(viii), and (d) a guaranty of any
obligation of any employee of the Company or any of its Subsidiaries, provided
that the aggregate amount guarantied under all such Contingent Obligations under
clause (a) and (d) of this Section 5.13 shall not exceed [***] at any time.
SECTION 5.14. AMENDMENTS OF CHARTER DOCUMENTS, MATERIAL CONTRACTS OR
SUBORDINATED DEBT INSTRUMENTS.
(a) HoldCo and the Company shall not, and shall not permit any of
their Subsidiaries to amend its charter, bylaws or other constitutive documents
(other than ministerial amendments and amendments to give effect to permitted
capital increases) in any respect that affects the voting rights of Capital
Stock included in the Collateral or holders thereof, affects the validity or
enforceability of any Material Contract, Pari Passu Financing Document or Lien
thereunder or that is adverse to the Pari Passu Creditors in any material
respect.
(b) The Company shall not, and shall not permit any of the
Subsidiaries to, consent to, implement or otherwise permit or suffer, any
termination, amendment, modification, supplement or waiver of, or fail to
enforce any rights under any provision of, a Material Contract
[*] 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.
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or any rights of the Company or any Subsidiary thereunder, except (i) the
amendment of the Shareholder Agreement in accordance with the Shareholder
Consent and Agreement, (ii) if such termination, amendment, modification,
supplement, waiver or failure is not reasonably likely to have a Material
Adverse Effect (or with respect to Material Contracts with Affiliates of the
Company or the Subsidiaries, if such termination, amendment, modification,
supplement, waiver or failure to enforce is not adverse to the Pari Passu
Creditor Parties in any material respect) or (iii) a termination of any Supply
Agreement based upon a default by the supplier thereunder, if a substitute
contract, which is equivalent in all material respects to such terminated Supply
Agreement, is entered into within 120 days.
(c) The Company shall not amend any of the indentures, loan
agreements, note purchase agreements or other financing documents relating to
Shareholder Loans, Exchange Debt, Excluded Debt (including Permitted Unsecured
Debt), Funding Gap Financing in the form of Debt or any Subordinated Debt, or
waive or otherwise relinquish any of its rights or causes of action under or
arising out of any of the foregoing, with respect to interest rates, principal
or interest payment amounts, principal or interest payment dates, subordination,
representations or covenants, or events of default, or with respect to other
provisions in a manner that is adverse to the Pari Passu Creditor Parties in any
material respect.
SECTION 5.15. RESTRICTIVE AGREEMENTS; SUBSIDIARY PREFERRED STOCK.
(a) The Company shall not, and shall not permit any of the
Subsidiaries to, enter into any Contractual Obligation or any other consensual
encumbrance or restriction of any kind that, directly or indirectly, restricts
or limits the ability of any of the Subsidiaries to (i) pay dividends or make
distributions on its Capital Stock, (ii) pay Debt owed to the Company or any of
the Subsidiaries, (iii) make any loans or advances to the Company (except as
provided in the Intercompany Debt Subordination Agreement or contemplated by
Section 4.11) or any Subsidiary or (iv) transfer any of its property to the
Company or any Subsidiary, except, in any such case, any restriction or
prohibition (A) pursuant to any agreement in effect on the Closing Date or
pursuant to an agreement effecting a renewal, extension, refinancing or
refunding of any such agreement; provided, however, that the provisions
contained in such renewal, extension, refinancing or refunding agreement
relating to such encumbrance or restriction are no more restrictive than the
provisions contained in the agreement the subject thereof, (B) restricting, in
customary fashion, the subletting or assignment of property subject to any lease
governing any leasehold interest of any Subsidiary, (C) under purchase money
obligations for property acquired in the ordinary course of business that impose
restrictions of the type referred to in clause (iv) of this Section 5.15(a) on
such acquired property, (D) of the type referred to in clause (iv) of this
Section 5.15(a) contained in security agreements securing Debt of a Subsidiary
to the extent that such Liens are Permitted Liens and restrict the transfer of
the collateral subject to such security agreements without restricting the
transfer of any other property.
(b) The Company shall not permit any of its Subsidiaries to issue any
Capital Stock that, by its terms, is preferred as to payment of dividends or
distributions, or as to the distribution of assets upon any voluntary or
involuntary liquidation of the issuer thereof, over any other class of Capital
Stock of such Person ("Preferred Stock"), except Preferred Stock issued to and
at all times held by the Company or any Subsidiary Guarantor.
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SECTION 5.16. SPECULATIVE HEDGING CONTRACTS. The Company shall not, and
shall not permit any of the Subsidiaries to, enter into or be obligated under
any Hedging Contract (contingent or otherwise) except if both of the following
conditions are satisfied with respect to such Hedging Contract: (a) such
contract was entered into in the ordinary course of business of such Person for
the purpose of directly mitigating risks associated with liabilities,
commitments or assets held by such Person and not for purposes of speculation or
taking a "market view," and (b) such contract does not contain any provision
(including a "walk-away" provision) exonerating the non-defaulting party from
its obligations to make payments on outstanding transactions to the defaulting
party.
SECTION 5.17. PAYMENTS UNDER OR AMENDMENTS OR WAIVERS OF AFFILIATE
AGREEMENTS. The Company shall not, and shall not permit any of the Subsidiaries
to, directly or indirectly,
(a) advance or prepay any amount under any Affiliate Agreements or
make any prepayment or distribution that is not required thereunder,
(b) make any payment or distribution pursuant to any Affiliate
Agreement relating to services providing revenue-generating support to the
Company or any of its Subsidiaries on arms-length terms and conditions
(including the BCI Technical Services Agreement and the Secondment Agreement,
each as in effect on the Closing Date, but excluding the Know-How Agreement), in
violation of the provisions of the Shareholder Pledge Agreement,
(c) make any payment or distribution pursuant to any Affiliate
Agreement involving the payment of management or other similar fees (including
the Know-How Agreement or any agreement subject to Section 5.18) if an Event of
Default then exists or would result therefrom, giving effect to such payment on
a pro forma basis as of the last day of the immediately preceding Fiscal
Quarter, or, in violation of the provisions of the Shareholder Pledge Agreement,
or
(d) amend any Affiliate Agreement in a manner that (i) could
reasonably be expected to have an adverse effect on the rights or remedies of
the Pari Passu Creditor Parties, or (ii) would cause such Affiliate Agreement to
violate the terms of Section 5.11.
SECTION 5.18. MANAGEMENT FEES. The Company and its Subsidiaries shall not
pay any management or similar fee, other than pursuant to the Know-How
Agreement, the BCI Technical Services Agreement and the Secondment Agreement,
each as in effect on the Closing Date (to the extent any of these agreements
require the payment of any management fees), or a management agreement approved
by the Required Pari Passu Creditors; provided that the obligation of the
Company under any such management agreement (including the Know-How Agreement)
shall be subordinated in accordance with the Shareholder Pledge Agreement to the
prior payment in full of the Pari Passu Obligations in accordance with the terms
of the Shareholder Pledge Agreement (in the case of any Affiliate Agreement) or
on terms satisfactory to the Collateral Agent (in any other case).
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ARTICLE 6.
EVENTS OF DEFAULT
SECTION 6.1. EVENTS OF DEFAULT. The occurrence of any one or more of the
following events, acts or occurrences shall constitute an event of default (each
an "Event of Default"):
(a) FAILURE TO MAKE PAYMENTS. The Company or any Designated
Repurchaser shall fail to pay to the Paying Agent, to any Pari Passu Creditor
Party or, in the case of expenses, to any other Person entitled thereto (i) any
principal of any Note or any Other Pari Passu Debt as and when due under the
Pari Passu Financing Documents (whether at stated maturity, upon acceleration,
pursuant to a Mandatory Repurchase or a Mandatory Partial Repurchase, upon
required Mandatory Prepayment or otherwise), (ii) any interest payable under the
Pari Passu Financing Documents within three Business Days of the date when due
under the Pari Passu Financing Documents, or (iii) any expenses, fees or other
amounts payable (other than principal or interest payments) under the Pari Passu
Financing Documents within five Business Days of the date when due under the
Pari Passu Financing Documents; or
(b) DEFAULT IN OTHER DEBT. The Company or any Subsidiary shall default
in (i) the payment (whether at stated maturity, upon acceleration, upon required
prepayment or otherwise), beyond any period of grace provided therefor, of any
principal of or interest on any other secured Debt or any Exchange Debt, or
other unsecured Debt with a principal amount in excess of $10,000,000 (or any
Interest Hedge Agreement or Currency Hedge Agreement having a notional principal
amount of $10,000,000 or more) (collectively, "Specified Debt"), or (ii) any
other breach or default (or other event or condition), beyond any period of
grace provided therefor, shall occur under any agreement, indenture or
instrument relating to any such Specified Debt, if the effect of such breach or
default (or such other event or condition) is to cause, or to permit the holder
or holders of the Specified Debt (or a Person on behalf of such holder or
holders) to cause (upon the giving of notice, the lapse of time or both, or
otherwise), such Specified Debt to become or be declared due and payable, or
required to be prepaid, redeemed, purchased or defeased (or an offer of
prepayment, redemption, purchase or defeasance be made prior to its stated
maturity (other than by a scheduled mandatory prepayment)) or to cause, or to
permit the holder or holders thereof to cause, the Company or any Subsidiary to
be deprived of any assets having a value in excess of $10,000,000 due to a
breach or default under any such agreement, indenture or instrument; or
(c) BREACH OF CERTAIN COVENANTS. Any Company Party shall fail to
perform, comply with or observe any agreement, covenant or obligation under
Section 4.1(a), (b) or (g), Section 4.3 (solely insofar as it requires the
preservation of the corporate existence of the Company), Section 4.6, Section
4.8(b), (d) or (e) or Section 4.10 or any Section of Article 5, under any
Collateral Document, under the Capital Contribution Agreement, or under the
Exchange Debt Agreement, provided that the Shareholders shall have the right
(but not the obligation) to cure any Default under Section 5.6 by purchasing or
making capital contributions with respect to Capital Stock (other than
Redeemable Capital Stock) of the Company or purchasing or making advances in the
form of Shareholder Loans complying with Section 4.11 if (i) such cure is
effected prior to the date on which the financial statements required by Section
4.1(a) or (b), as applicable, which would show such Default, are required to be
delivered to the
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Collateral Agent pursuant to such Section and (ii) such financial statements are
accompanied by a certificate from the Chief Financial Officer of the Company
setting forth the amount of and enclosing certified copies of the instrument or
instruments containing the terms of the Capital Stock or Shareholder Loans so
purchased or advanced or of the Capital Stock with respect to which such
contributions were made, as the case may be; or
(d) OTHER DEFAULTS UNDER PARI PASSU FINANCING DOCUMENTS. Any Company
Party shall fail to perform, comply with or observe any agreement, covenant or
obligation under any provision of any Pari Passu Financing Document (other than
those provisions referred to in Sections 6.1(a), (c) and (p)) and such failure
shall not have been remedied within 30 days after a Senior Officer of the
Company Party becomes aware of such failure or written notice thereof is given
by the Collateral Agent to the Company; or
(e) BREACH OF WARRANTY. Any representation or warranty or
certification made or furnished by or on behalf of any Company Party under any
Pari Passu Financing Document (or any certificate or other instrument delivered
pursuant thereto) shall prove to have been false or incorrect in any material
respect when made (or deemed made) and (i) shall not have been remedied within
10 days after the date on which a Senior Officer of any Company Party becomes
aware of such false or incorrect statement or, (ii) whether or not remedied
within such 10-day period, any such falsehood or incorrectness and any such
remedy and the consequences of such falsehood or incorrectness and such remedy,
collectively, shall have had or could reasonably be expected to have a Material
Adverse Effect; or
(f) INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. There shall
be commenced against HoldCo, the Company, or any of the Subsidiaries, or against
any Shareholder Party (each a "Specified Company Party"), an involuntary case
seeking the dissolution, liquidation, reorganization or other relief in respect
of such Specified Company Party or its debts or if a substantial part of its
assets, under any Bankruptcy Law or an involuntary case or proceeding seeking
the appointment of a receiver, liquidator, sequestrator, custodian, trustee or
other officer having similar powers of any Specified Company Party or to take
possession of all or a substantial portion of its property or to operate all or
a substantial portion of its business, and any of the following events occur:
(i) such Specified Company Party consents to the institution of such involuntary
case or proceeding; (ii) the petition commencing the involuntary case or
proceeding is not timely controverted; (iii) the petition commencing such
involuntary case or proceeding remains undismissed and unstayed for a period of
60 days; or (iv) an order for relief shall have been issued or entered therein;
or
(g) VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. Any Specified
Company Party shall institute a voluntary case seeking the dissolution,
liquidation, "concordata," reorganization or other relief in respect of any such
Specified Company Party under any Bankruptcy Law, or shall consent thereto; or
shall consent to the conversion of an involuntary case to a voluntary case; or
shall file a petition, answer a complaint or otherwise institute any proceeding
seeking, or shall consent to or acquiesce in the appointment of, a receiver,
liquidator, sequestrator, custodian, trustee or other officer with similar
powers of it or to take possession of all or a substantial portion of its
property or to operate all or a substantial portion of its business; or shall
make a general assignment for the benefit of creditors; or shall generally not
pay its debts as they become due; or the Board of Directors of any Specified
Company Party (or any
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committee thereof) adopts any resolution or otherwise authorizes action to
approve any of the foregoing; or
(h) CHANGE OF CONTROL. A Change of Control shall occur at any time; or
(i) TERMINATION OF PARI PASSU FINANCING DOCUMENTS. Any Pari Passu
Financing Document, or any material provision thereof, shall cease to be in full
force and effect for any reason, or any Lien in favor of the Collateral Agent or
the Proceeds Collateral Agent under any Collateral Document shall fail to have
the priority required hereunder or thereunder, except in the case of any Pari
Passu Financing Agreement or Lien, upon a release or termination of such Pari
Passu Financing Document or Lien pursuant to the terms thereof; or any Company
Party shall contest or purport to repudiate or disavow any of its obligations
under or the validity or enforceability of any Pari Passu Financing Document or
any material provision thereof; or
(j) FAILURE OF SUBORDINATION. The Subordination Agreement covering any
Intercompany Debt, any Shareholder Loan, any Affiliate Agreement or any
Subordinated Debt, at any time and for any reason other than satisfaction in
full of the Pari Passu Obligations, ceases to be in full force and effect; or
any holder of any such Intercompany Debt, Shareholder Loan or Subordinated Debt,
or the person (other than the Company or any of the Subsidiaries) party to any
Affiliate Agreement, shall contest or purport to repudiate or disavow such
subordination or denies that it has any further obligation under such
Subordination Agreement; or payments are made under any Intercompany Debt, any
Shareholder Loan, any Affiliate Agreement or any such Subordinated Debt in
violation of the subordination provisions applicable to such Debt or included in
such Subordination Agreement; or
(k) JUDGMENTS AND ATTACHMENTS; IMPOSITIONS OF PENALTIES. HoldCo, the
Company or any of the Subsidiaries shall suffer (i) any money judgments, fines,
penalties (including penalties under any Mirror Authorization), writs or
warrants of attachment or similar processes that, in the case of the Company or
any Subsidiary, individually or in the aggregate, involve an amount or value in
excess of $10,000,000 or (ii) any other, non-monetary judgment or decree
(including a judgment for injunctive relief) that, in the case of the Company or
any Subsidiary, individually or in the aggregate, would be reasonably likely to
result in a Material Adverse Effect, and, in any such case, such judgments,
fines, penalties, writs, warrants or other orders shall not have been, if
involving money, fully bonded or insured to the reasonable satisfaction of the
Collateral Agent or shall continue unvacated, undischarged, unsatisfied and
unstayed (A) for a period of 30 days from the date of entry thereof, (B) in the
case of any such writ or warrant of attachment or similar process, until 10 days
prior to the date of any proposed sale thereunder or (C) in the case of any such
non-monetary judgment, until the effectiveness of such judgment; or (iii) a
judgment creditor shall obtain possession of any assets of HoldCo, or any assets
of the Company or any of the Subsidiaries with a Fair Market Value in excess of
$1,000,000, in each case by any means, including levy, distraint, replevin or
self-help; or
(l) LOSS OF LICENSES. Any Governmental Authority terminates, revokes,
suspends, materially modifies in an adverse manner, or fails to renew any
material license, permit, franchise or other Governmental Approval of the
Company or any of the Subsidiaries, including any of the Mirror Authorizations
(including the Data Licenses unless the Company demonstrates to the reasonable
satisfaction of the Initial Facility Agents that the termination,
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revocation, suspension, material adverse modification or non-renewal of any such
Data License could not reasonably be expected to have a material adverse effect
on or result in a material adverse change in the business, assets, results of
operations, condition (financial or otherwise) or prospects of the Company and
any of its Subsidiaries to the extent such Subsidiary's business is material to
the Expanded Project) or any other material permits or licenses relating to the
Expanded Project, or the Company or any of the Subsidiaries for any reason loses
(by forfeiture or otherwise) any material license, permit, franchise or other
Governmental Approval; or the Company or any of the Subsidiaries suffers the
imposition of any restraining order, escrow, suspension or impound of funds in
connection with any proceeding (judicial or administrative) with respect to any
license, permit, franchise or other Governmental Approval, except where the
foregoing, in the aggregate, (i) does not relate to any Mirror Authorization or
other material Governmental Approval issued by Anatel, and (ii) otherwise could
not be reasonably expected to have a Material Adverse Effect; or
(m) EXPROPRIATION. An Expropriation Event occurs or any Governmental
Authority shall take any similar action that is reasonably likely to have a
Material Adverse Effect; or HoldCo, the Company or a Subsidiary shall be
prevented from exercising normal control over all or a substantial part of its
property to the extent such disability is reasonably likely to have a Material
Adverse Effect; or
(n) EXCHANGE CONTROLS; DEBT MORATORIUM. Any Governmental Authority
shall (i) declare a moratorium on the payment of indebtedness of Brazil or any
Governmental Authority thereof or corporations therein or (ii) impose foreign
exchange control regulation that prohibits or could reasonably be expected to
prohibit or could limit the ability of any Company Party to perform its
obligations under the Pari Passu Financing Documents; or
(o) ABANDONMENT OF PROJECT. Other than for reasons beyond the
Company's reasonable control, construction under any one of the Supply
Agreements shall have been suspended or operations of the Company (or of any
Subsidiary of the Company to the extent such Subsidiary's business is material
to the Expanded Project) shall have ceased, in either case for a period of 180
days; provided that this clause (o) shall not apply to any suspension or
cessation directly attributable to a default by a supplier under any Supply
Agreement; or
(p) CERTAIN INDEMNIFICATION OBLIGATIONS. The Company shall fail to
satisfy within the time period set forth in Section 8.2(b) or any equivalent
provision of any Pari Passu Financing Document any indemnification obligation in
respect of the Paying Agent's failure to pay to the Collateral Agent or the
respective Pari Passu Facility Agent (i) any principal of any Note or any other
Pari Passu Debt as and when such principal is due (whether at stated maturity,
upon acceleration, pursuant to a Mandatory Repurchase or a Mandatory Partial
Repurchase, upon required Mandatory Prepayment or otherwise), (ii) any interest
payable under the Pari Passu Financing Documents within three Business Days of
the date when such interest is due or, (iii) any Fees, expenses or the other
amounts payable under the Pari Passu Financing Documents within five Business
Days of the date when such Fees, expenses or other amounts are due; or
(q) FAILURE OF VESPER CAYMAN SPV TO MAKE PAYMENTS. Vesper Cayman SPV
shall fail to pay any amounts due under any of the Purchasers' Fee Letters
within five Business Days of the date when due.
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SECTION 6.2. REMEDIES. If an Event of Default occurs, the Pari Passu
Creditor Parties shall have the rights and remedies set forth in the respective
Pari Passu Financing Agreements, this Agreement, the other Pari Passu Financing
Documents and Applicable Law.
ARTICLE 7.
THE COLLATERAL AGENT AND THE PARI PASSU CREDITORS
SECTION 7.1. AUTHORIZATION AND ACTION.
(a) Pursuant to Article 1288 of the Brazilian Civil Code, each Pari
Passu Facility Agent hereby irrevocably appoints and authorizes LaSalle Bank
National Association to act as attorney-in-fact for purposes of Article 1317 of
the Brazilian Civil Code and Collateral Agent hereunder and under the Pari Passu
Financing Documents, on behalf of all Pari Passu Creditor Parties, to execute
and deliver or accept, on their behalf, the Pari Passu Financing Documents and
any other documents, instruments and agreements related thereto or hereto, to
take such action on their behalf under the provisions hereof and thereof and to
exercise such rights, remedies, powers and privileges hereunder and thereunder
as are delegated to the Collateral Agent by the terms hereof and thereof,
together with such rights, remedies, powers and privileges as are reasonably
incidental thereto.
(b) The Collateral Agent shall not, without the prior approval of the
requisite percentage of the Pari Passu Creditors, as specified in Article 9 (the
"Required Percentage"), acting through their respective Pari Passu Facility
Agents, consent to any departure by the Company or any other Company Party from
the terms of, waive any default or otherwise amend this Agreement or any other
Pari Passu Financing Documents. The Collateral Agent will, to the extent
practicable under the circumstances, consult with the Pari Passu Facility
Agents, prior to taking action on their behalf under the Pari Passu Financing
Documents. The Collateral Agent will not take any action contrary to the written
direction of the Required Percentage of the Pari Passu Creditors acting through
their respective Pari Passu Facility Agents, will take any lawful action not
contrary to the provisions of the Pari Passu Financing Documents prescribed in
written instructions of the Required Percentage of the Pari Passu Creditors
acting through their respective Pari Passu Facility Agents and, as to any
matters not expressly provided for by the Pari Passu Financing Documents
(including enforcement or collection), may decline to take any action, except
upon the written instructions of the Required Percentage of the Pari Passu
Creditors acting through their respective Pari Passu Facility Agents; provided,
however, that the Collateral Agent may not fail to take any action with respect
to any amendment to the Pari Passu Collateral Documents pursuant to Section
4.10, whether or not specifically instructed by the Required Percentage of the
Pari Passu Creditors to take such action, that is required to be taken by the
terms of this Agreement or any Pari Passu Collateral Document. If such
instructions are requested reasonably promptly, the Collateral Agent shall be
absolutely entitled to refrain from taking any action and shall not have any
liability to the Company or any Subsidiary or any other Pari Passu Creditor
Party for refraining from taking any action until it shall have received such
instructions; provided, however, that the Collateral Agent shall in no event be
required to take or refrain from taking any action that in its opinion, would be
contrary to the provisions of any Pari Passu Financing Document or Applicable
Law or could be reasonably likely to result in material liability to the
Collateral Agent.
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(c) The Collateral Agent shall have no duties or responsibilities
except those expressly set forth in the Pari Passu Financing Documents. No duty
to act, or refrain from acting, and no other obligation, covenant,
responsibility or liability whatsoever, shall be implied on the basis of any
right, power or authority granted to the Collateral Agent or shall become
effective in the event of any temporary or partial exercise of such rights,
power or authority. The Collateral Agent shall not be required to exercise any
right, power, remedy or privilege granted to it in any Pari Passu Financing
Document, to ascertain or inquire whether any Default or Event of Default has
occurred and is continuing, or to inspect the property (including the books and
records) of the Company or any Subsidiary or to take any other affirmative
action, except as provided in Section 6.2, or unless requested or directed to do
so in accordance with the provisions of Section 7.1(b).
(d) WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE USE OF THE
TERM "AGENT" IN THIS AGREEMENT WITH RESPECT TO THE COLLATERAL AGENT IS NOT
INTENDED TO AND DOES NOT CONNOTE ANY FIDUCIARY OR OTHER EXPRESS OR IMPLIED
OBLIGATION ARISING UNDER AGENCY DOCTRINE OR ANY OTHER APPLICABLE LAW; INSTEAD,
SUCH TERM IS USED MERELY AS A MATTER OF MARKET CUSTOM AND IS INTENDED TO CREATE
OR REFLECT ONLY AN ADMINISTRATIVE RELATIONSHIP AMONG INDEPENDENT CONTRACTING
PARTIES.
(e) The duties of the Collateral Agent shall be mechanical and
administrative in nature. The Collateral Agent shall not have by reason of this
Agreement or otherwise a fiduciary relationship in respect of any other Pari
Passu Creditor Party. Except for notices, reports and other documents and
information expressly required to be furnished to the Pari Passu Creditors by
the Collateral Agent hereunder, the Collateral Agent shall not have any duty or
responsibility to provide any Pari Passu Creditor Party with any credit or other
information concerning the affairs, financial condition or business of the
Company or any other Company Party that may come into the possession of the
Collateral Agent or any of their Affiliates.
SECTION 7.2. EXCULPATION; COLLATERAL AGENT'S RELIANCE; ETC. Neither the
Collateral Agent in its capacity as such nor any of its directors, officers,
agents, attorneys or employees shall be liable to any Company Party or any other
Pari Passu Creditor Party for any action lawfully taken or omitted to be taken
by it or them (whether negligently or otherwise) under or in connection with any
Pari Passu Financing Document (a) with the consent or at the request of the
Required Percentage of the Pari Passu Creditors, as applicable, or (b) in any
other circumstances, except for its or their own gross negligence or willful
misconduct. The Collateral Agent makes no warranty or representation to any
other Pari Passu Creditor Party and shall not be responsible to any other Pari
Passu Creditor Party for any recitals, statements, warranties or representations
made in, or in connection with, any Pari Passu Financing Document or for the
execution, effectiveness, genuineness, validity, enforceability, collectibility,
or sufficiency of any Pari Passu Financing Document or any financial
information, opinions of counsel or other documents executed and delivered
pursuant thereto, or for the financial condition of any Company Party. The
Collateral Agent shall not be responsible to any Pari Passu Creditor Party for
the satisfaction of any condition specified in Article 2, except receipt of
items required to be delivered to the Collateral Agent, or for the value,
effectiveness, priority, genuineness or validity of any Collateral or any Lien
thereon. The Collateral Agent may treat the registered holder of any Note
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as the holder thereof until the Collateral Agent receives the related Assignment
and Acceptance signed by such holder and the assignee and in form satisfactory
to the Collateral Agent. The Collateral Agent shall be entitled to rely upon any
notice, certificate or other writing believed by the Collateral Agent to be
genuine and correct and to have been signed or sent by the proper Person or
Persons. The Collateral Agent shall be entitled to consult with legal counsel,
independent public accountants and other experts selected by the Collateral
Agent and to act in reliance upon the advice of such counsel and other experts
concerning its actions and duties hereunder.
SECTION 7.3. COLLATERAL AGENT AND AFFILIATES. The Collateral Agent shall,
in its capacity as a Pari Passu Creditor, have the same rights, powers and
obligations under this Agreement and the other Pari Passu Financing Documents as
any other Pari Passu Creditor and may exercise or refrain from exercising the
same as though it were not the Collateral Agent, including the right to give or
deny consent to any action requiring consent or direction of the Required Pari
Passu Creditors or all or a specified percentage of the Pari Passu Creditors.
The Collateral Agent in its individual capacity and its Affiliates may accept
deposits from, lend money to, act as trustee under indentures of, and generally
engage in any kind of business with, the Company, any of the Subsidiaries and
any Affiliate of the Company, all as if the Collateral Agent were not the
Collateral Agent and without any duty to account therefor to the Pari Passu
Creditors. The Collateral Agent shall be entitled to receive from the Company or
from the Paying Agent its fees or portions thereof in connection with this
transaction without any liability to account therefor to any other Pari Passu
Creditor, except as the Collateral Agent may have expressly agreed.
SECTION 7.4. PARI PASSU CREDITOR CREDIT DECISION. Each Pari Passu Creditor
Party acknowledges that it has, independently and without reliance upon the
Collateral Agent or any other Pari Passu Creditor Party and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Pari Passu Creditor
Party also acknowledges that it will, independently and without reliance upon
the Collateral Agent or any other Pari Passu Creditor Party and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Pari
Passu Financing Documents.
SECTION 7.5. INDEMNIFICATION. The Collateral Agent shall in no event be
required to take any action under the Pari Passu Financing Documents or in
relation thereto unless it shall first be indemnified to its satisfaction by the
other Pari Passu Creditor Parties against any and all liability and expense that
they may incur by reason of taking any such action. Each Pari Passu Creditor
agrees to indemnify and hold the Collateral Agent harmless (to the extent not
promptly paid or reimbursed by the Company), ratably according to their
respective Pari Passu Commitments, from and against any and all (a) costs,
expenses and other amounts incurred by the Collateral Agent otherwise payable by
the Company pursuant to Section 10.1 and (b) Indemnified Liabilities that may be
imposed on, incurred by, or asserted against the Collateral Agent, except to the
extent they are finally adjudged by a court of competent jurisdiction to have
directly resulted from the gross negligence or willful misconduct of the
Collateral Agent. Without limitation of the foregoing, each Pari Passu Creditor
Party agrees to reimburse the Collateral Agent promptly upon demand for its
ratable share of any out-of-pocket expenses (including counsel fees) incurred by
the Collateral Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
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negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, the Pari Passu Financing Documents, to the
extent that the Collateral Agent is not promptly reimbursed for such expenses by
the Company.
SECTION 7.6. SUCCESSOR COLLATERAL AGENT. Subject to the penultimate
sentence of this Section 7.6, the Collateral Agent may resign at any time as
Collateral Agent under the Pari Passu Financing Documents by giving 30 days'
written notice thereof to the Pari Passu Creditors and the Company. Upon any
such resignation, the Required Pari Passu Creditors shall have the right to
appoint a successor Collateral Agent with the written consent of the Company
(unless a Default or Event of Default shall then exist), which shall not be
unreasonably withheld. If no successor Collateral Agent shall have been so
appointed by the Required Pari Passu Creditors and shall have accepted such
appointment, within 30 days after the retiring Collateral Agent's notice of
resignation, then the retiring Collateral Agent may, on behalf of the Pari Passu
Creditors, appoint a successor Collateral Agent, which shall (i) be a financial
institution, or a branch or agency of a financial institution, organized or
licensed to do business under the laws of the United States of America or any
State thereof and (ii) be entitled to charge customary collateral agency fees.
Upon the acceptance of any appointment as the Collateral Agent by a successor
Collateral Agent, such successor Collateral Agent shall thereupon 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 of its
duties and obligations under the Pari Passu Financing Documents. Upon any
retiring Collateral Agent's resignation, the provisions of this Article 7 (as
well as other expense reimbursement, indemnification and exculpatory provisions
in the other Pari Passu Financing Documents) shall continue in effect for its
benefit as to any actions taken or omitted by it while it was Collateral Agent.
SECTION 7.7. EXCESS PAYMENTS. If any Pari Passu Creditor shall obtain any
payment or other recovery (whether voluntary, involuntary, by application of
setoff or otherwise) on account of any Pari Passu Obligations in excess of its
pro rata share of payments and other recoveries on account of such Pari Passu
Obligations obtained by all Pari Passu Creditors, such Pari Passu Creditor shall
purchase from the other Pari Passu Creditors such participations in such Pari
Passu Obligations held by them as shall be necessary to cause such purchasing
Pari Passu Creditor to share the excess payment or other recovery ratably with
each of the other Pari Passu Creditors; provided, however, that if all or any
portion of the excess payment or other recovery is thereafter recovered from
such purchasing Pari Passu Creditor, the purchase shall be rescinded and the
purchase price restored to such Pari Passu Creditor to the extent of such
recovery, but without interest. The Company agrees that any Pari Passu Creditor
so purchasing a participation from another Pari Passu Creditor pursuant to this
Section 7.7 may, to the fullest extent permitted by Applicable Law and by
Section 10.10, exercise all of its rights of payment (including setoff) with
respect to such participation as fully as if such Pari Passu Creditor were the
direct creditor of the Company in the amount of such participation.
SECTION 7.8. PARI PASSU CREDITORS. The provisions of this Article 7 are
solely for the benefit of the Collateral Agent and the Pari Passu Creditors and
the Company shall not have any rights to rely on or enforce any of the
provisions hereof (except that the provisions of Sections 7.6, 7.9(b), 7.9(e)
and 7.10(a) are also for the benefit of the Company). In performing its
functions and duties under the Pari Passu Financing Documents, the Collateral
Agent shall act solely as Collateral Agent of the Pari Passu Creditors and does
not assume and shall not be
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deemed to have assumed any obligation toward or relationship of agency or trust
with or for the Company. Nothing in this Section 7.8 shall apply to any
foreclosure under any Proceeds Account Pledge Agreement.
SECTION 7.9. COLLATERAL AND GUARANTY MATTERS.
(a) Except as specifically otherwise provided in any of the Pari Passu
Collateral Documents, the Collateral Agent is hereby authorized on behalf of all
of the Pari Passu Creditors, without assumption of any duty or obligation in
respect of and without the necessity of any notice to or further consent from
any other Pari Passu Creditor Party, to take any action with respect to any
Common Collateral or Pari Passu Collateral Documents that may be necessary to
perfect and maintain perfected the Collateral Agent's Liens upon the Common
Collateral. Without limiting or limitation of the foregoing, the Collateral
Agent shall promptly take any actions as are reasonably required to enable the
Company to effectuate the provisions of Section 4.10, including reviewing as to
form and substance any proposed amendment to the Pari Passu Collateral Documents
prepared pursuant thereto and consenting to and executing any such amendment in
such manner as may be necessary to permit such amendment to be filed, recorded
or registered with any Governmental Authority.
(b) The Pari Passu Creditors hereby irrevocably authorize the
Collateral Agent, in its discretion, to release (I) any Lien held by the
Collateral Agent upon any Collateral or (II) any proceeds held in the Cash
Collateral Account (i) with respect to any Lien, from and after the day of
termination of any Pari Passu Collateral Document pursuant to the terms thereof;
(ii) constituting property being sold or disposed of if (1) the Company
certifies to the Collateral Agent that the sale or disposition is permitted
under the relevant Pari Passu Collateral Document, and the relevant Pari Passu
Financing Agreement and Section 5.8 is being complied with in connection
therewith and (2) the Collateral Agent confirms the certification of the Company
(and the Collateral Agent may rely conclusively on any such certificate, without
further inquiry, unless notified to the contrary by the Required Pari Passu
Creditors); (iii) constituting cash proceeds deposited into the Cash Collateral
Account being withdrawn by the Company if (1) the Company certifies to the
Collateral Agent that the withdrawal is permitted under the relevant Pari Passu
Collateral Document, and the relevant Pari Passu Financing Agreement and Section
5.8 is being complied with in connection therewith and (2) the Collateral Agent
confirms the certification of the Company (and the Collateral Agent may rely
conclusively on any such certificate, without further inquiry, unless notified
to the contrary by Required Pari Passu Creditors); or (iv) approved, authorized
or ratified in writing by all Pari Passu Creditors in accordance with Section
9.8; provided, however, that (x) the Collateral Agent shall not be required to
execute any such documents on terms that create any obligation or entail any
consequence other than the release of such Liens without recourse or warranty,
and (y) such release shall not in any manner discharge, affect or impair the
Pari Passu Obligations, the Guaranties or any other Liens upon (or obligations
of the Company Parties in respect of) all assets retained by the Company
Parties, including the proceeds of any Asset Disposition, all of which shall
continue to constitute part of the Collateral. Upon request by the Collateral
Agent at any time, the other Pari Passu Creditor Parties will confirm in writing
the Collateral Agent's authority to release particular types or items of
Collateral pursuant to this Section 7.9(b).
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(c) The Collateral Agent shall have no obligation whatsoever to any
other Pari Passu Creditor Party or other Person to assure that the Collateral
exists or is owned by the Company or a Subsidiary or (except as otherwise
expressly required by the Pari Passu Collateral Documents) is cared for,
protected or insured, or that the Liens of the Collateral Agent thereunder have
been properly created, perfected, protected or enforced or are entitled to any
particular priority.
(d) Except as otherwise specifically provided in this Agreement, the
Collateral Agent may act in any manner it may deem appropriate in respect of the
Collateral, in its discretion, and the Collateral Agent shall not have any duty
or liability whatsoever with respect thereto to any other Pari Passu Creditor
Party.
(e) Each Pari Passu Creditor hereby approves the form of the other
Pari Passu Financing Documents attached as exhibits to this Agreement or
approved by the Initial Purchasers on or prior to the Closing Date and hereby
authorizes the Collateral Agent on its behalf to accept from the Company and the
other Company Parties and execute and deliver as Collateral Agent, the other
Pari Passu Financing Documents in substantially the form of such exhibits, with
such changes, additions or deletions as the Collateral Agent, in its reasonable
discretion, may approve as reasonably necessary or appropriate, such approval to
be conclusively evidenced by the Collateral Agent's acceptance or execution
thereof. Each Pari Passu Creditor also authorizes the Collateral Agent to
accept, or execute and deliver, such additional documents (including financing
statements, opinions, certificates and other documents in form and substance
satisfactory to the Collateral Agent, in its discretion) in connection with the
closing pursuant to Section 2.1 or any subsequent closing for the pledge of any
other Collateral or any additional Guaranties as the Collateral Agent, in its
reasonable discretion, may approve, such approval to be conclusively evidenced
by the Collateral Agent's acceptance or execution thereof.
SECTION 7.10. OBLIGATIONS OF PARI PASSU CREDITORS SEVERAL; RIGHT TO
INITIATE JUDICIAL PROCEEDINGS.
(a) Each Pari Passu Creditor's obligations hereunder are several, and
not joint or joint and several. The failure of any Pari Passu Creditor to make
any Pari Passu Financing or otherwise to perform its obligations hereunder or
under the applicable Pari Passu Financing Agreement will not increase the
obligations of any other Pari Passu Creditor. Nothing contained in this
Agreement and no action taken by the Collateral Agent or any other Pari Passu
Creditor Party pursuant to this Agreement shall be deemed to constitute the
Collateral Agent and any other Pari Passu Creditor Party to be a partnership, an
association, a joint venture or any other kind of entity.
(b) Subject to Section 9.3, the Collateral Agent has the right and
power to institute and maintain such suits and proceedings as it may deem
appropriate to protect and enforce the rights vested in it by this Agreement and
the Pari Passu Collateral Documents and may, either after entry or without
entry, proceed by suit or suits at law or in equity to enforce such rights and
to foreclose upon Common Collateral and to sell all or, from time to time, any
of the Common Collateral as permitted by the Pari Passu Collateral Documents;
provided, however, that the Collateral Agent shall not be required to exercise
any discretionary power granted to the Collateral Agent herein or in the Pari
Passu Collateral Documents.
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SECTION 7.11. CO-AGENTS. No Co-Agent, in such capacity, shall have any
right, power, obligation, liability, duty or responsibility whatsoever under the
Pari Passu Financing Documents, and no Co-Agent shall be deemed to have any
fiduciary relationship with any Pari Passu Creditor. Each Pari Passu Creditor
acknowledges that it has not relied, and will not rely, on any of the Co-Agents
in deciding to enter into this Agreement or in taking or not taking any action
hereunder.
SECTION 7.12. PAYING AGENCY AGREEMENT. Each Pari Passu Facility Agent
hereby approves the form of the Paying Agency Agreement and hereby authorizes,
on behalf of the Pari Passu Creditors under the respective Pari Passu Financing
Agreement, the Collateral Agent on its behalf to accept from the Company and
execute and deliver as Collateral Agent on behalf of the Pari Passu Creditor
Parties the Paying Agency Agreement in the form executed and delivered by the
Initial Facility Agents. Without limitation, each Pari Passu Facility Agent
agrees, on behalf of itself and the Pari Passu Creditors under the respective
Pari Passu Creditor Agreement, to be bound by the Paying Agency Agreement, any
amendment thereto adopted in accordance with the terms hereof and by any notices
that the Collateral Agent may deliver thereunder on the Pari Passu Creditor
Parties' behalf.
ARTICLE 8.
CERTAIN MANDATORY PREPAYMENTS
SECTION 8.1 MANDATORY PREPAYMENTS. Upon the occurrence of the following
events the Company shall be required to mandatorily prepay the Pari Passu
Financings or repurchase the Pari Passu Financings to the extent described below
("Mandatory Prepayments"):
(a) ASSET DISPOSITIONS AND EVENTS OF LOSS. The Company shall make
Mandatory Prepayments out of the proceeds of Asset Dispositions and Events of
Loss as described in, and in accordance with, Section 5.8.
(b) EXCESS CASH FLOW. Within 30 days after the delivery of the
financial statements required to be delivered pursuant to Section 4.1(a) but in
no event later than 150 days after the end of each Fiscal Year, commencing with
the Fiscal Year ending December 31, 2000, the Company shall make a Mandatory
Prepayment, without premium or penalty, of the Pari Passu Debt in an amount
equal to the "required percentage" of the Excess Cash Flow for such Fiscal Year;
for any Fiscal Year commencing (i) prior to the third anniversary of the Closing
Date, the "required percentage" shall be [***]; and (ii) after the third
anniversary of the Closing Date, the "required percentage" shall be [***].
(c) EQUITY OFFERINGS. Subject to Section 8.1(f), upon the completion
of an initial public offering of equity securities or securities convertible
into or exchangeable for equity securities or securities which grant the right
to purchase or acquire equity securities (including warrants or options issued
on a standalone basis or as a part of any other security issuance) by the
Company, any of the Subsidiaries, HoldCo or any HoldCo Parent, the Company shall
make a Mandatory Prepayment, without premium or penalty, of the Pari Passu Debt
in an amount equal to [***] of the Excess Proceeds of such equity offering.
[*] 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.
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(x) DEBT FINANCINGS. Subject to Section 8.1(f), upon the completion of
any incurrence or issuance of Debt for borrowed money by the Company, any of the
Subsidiaries or HoldCo, the Company shall make a Mandatory Prepayment, without
premium or penalty, of the Pari Passu Debt in an amount equal to [***] of the
Excess Proceeds of such incurrence or issuance of Debt for borrowed money except
that this Section 8.1(d) shall not apply to the net proceeds of any such
incurrence or issuance of Debt for borrowed money (i) in the amounts
contemplated to be funded under the Commitments or the Additional Commitments
described in any Note Purchase Agreement (as in effect on the date hereof) and
(ii) to be funded under any Debt permitted by Section 5.2 on the date hereof
(other than Debt permitted by Section 5.2(a)(x) and Permitted Refinancing Debt
in respect of the Obligations).
(e) NOTICE AND APPLICATION OF MANDATORY PREPAYMENTS; INTEREST.
(i) The Company shall give the Collateral Agent not less than
five Business Day's prior written notice of the date on which a Mandatory
Prepayment will be made.
(ii) Each Mandatory Prepayment shall be paid to the Paying Agent
in accordance with the terms of Section 8.2 hereof and shall be distributed
by the Collateral Agent to the Pari Passu Facility Agents for the account
of the respective Pari Passu Creditors in respect of the Pari Passu
Obligations in accordance with the terms of Section 9.6 hereof.
(iii) To the extent required by the respective Pari Passu
Financing Agreements, each Mandatory Prepayment shall be made together with
interest accrued on the principal amount prepaid and "break funding"
compensation.
(f) FUNDING GAP FINANCINGS. Notwithstanding Sections 8.1(c) and
8.1(d), no Mandatory Prepayments shall be required pursuant to such Sections
with respect to any Funding Gap Financings.
SECTION 8.2. MANNER OF PAYMENT OF MANDATORY PREPAYMENTS.
(a) The Company or any Designated Repurchaser shall make each
Mandatory Prepayment to the Paying Agent in Dollars and in immediately available
funds, without any deduction whatsoever, including any deduction for any setoff,
recoupment, counterclaim or Taxes (other than Excluded Taxes), at the Paying
Agent's Office for deposit in the Paying Agent's Account (which amount will be
held in trust for the Collateral Agent) at such time as shall provide the Paying
Agent with sufficient time to, in turn, pay such amount to the Collateral Agent
in Dollars and in immediately available funds, without any deduction whatsoever,
including any deduction for any setoff, recoupment, counterclaim or Taxes at the
Collateral Agent's Office, for deposit in the Collateral Agent's Account for the
account of the Pari Passu Facility Agents not later than 12:00 noon (New York
time) on the due date thereof. The Collateral Agent shall, in turn, immediately
pay such amount in Dollars and in immediately available funds, without any
deduction whatsoever, including any deduction for any setoff, recoupment,
counterclaim or Taxes to each Pari Passu Facility Agent for the account of the
Pari Passu Creditors entitled to such payment. Any payments received by the
Collateral Agent after
[*] 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.
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12:00 noon (New York time) on any Business Day shall be deemed received on the
next succeeding Business Day. Not later than 2:00 p.m. (New York time) on the
day such payment is made, the Collateral Agent shall initiate a wire transfer to
each Pari Passu Facility Agent, for the account of the Applicable Purchasing
Office of the respective Pari Passu Creditors, in Dollars and in immediately
available funds, of such Pari Passu Creditor's share of the payment so made,
determined pursuant to Section 9.6 hereof. Delivery shall be made by the Paying
Agent in accordance with the written instructions satisfactory to the Paying
Agent given to the Paying Agent by the Collateral Agent; by the Collateral Agent
in accordance with the written instructions satisfactory to the Collateral Agent
from time to time given to the Collateral Agent by each Pari Passu Facility
Agent; and by each Pari Passu Facility Agent in accordance with the written
instructions satisfactory to the Pari Passu Facility Agent from time to time
given to the Pari Passu Facility Agent by each Pari Passu Creditor. Any
Mandatory Prepayment by the Company or any Designated Repurchaser to the Paying
Agent in accordance with this Section 8.2(a) shall satisfy pro tanto and shall
be conclusive and shall discharge the Company or such Designated Repurchaser of
its corresponding obligations to make any such Mandatory Prepayment to the Pari
Passu Creditor Parties.
(b) To the extent that the Company or any Designated Repurchaser makes
any Mandatory Prepayment (including any related amounts payable under Section
8.1(e)(iii)) due under this Agreement to the Paying Agent, the Company hereby
indemnifies the Pari Passu Creditor Parties against any failure on the part of
the Paying Agent to pay, in accordance with the instructions provided to the
Paying Agent by the Collateral Agent pursuant to Section 8.2(a), the Mandatory
Prepayment due to the Collateral Agent in respect of the Pari Passu Financings
by the due date and time thereof in an amount, at a minimum, equal to the
portion of such payment made to the Paying Agent not paid to the Collateral
Agent as aforesaid and agrees to pay such amount in respect of such Mandatory
Prepayment (including such related amounts) due, plus interest at the
Post-Default Rate, not later than (i) one Business Day after the due date
thereof, in the case of payments of principal, (ii) three Business Days after
the due date thereof, in the case of payments of interest and (iii) five
Business Days after the due date thereof, in the case of expenses or other
amounts payable under the Pari Passu Financing Documents. This indemnity
constitutes a separate and independent obligation from the obligations of the
Company under the Pari Passu Financings and shall give rise to a separate and
independent cause of action. To the extent that the Paying Agent makes any
Mandatory Prepayment to the Collateral Agent with respect to which the Pari
Passu Creditor Parties have received a payment from the Company in satisfaction
of its indemnification obligations set forth in this Section 8.2(b), each Pari
Passu Creditor Party shall promptly return to the Company any such
indemnification payment so made by the Company, together with interest at the
Federal Funds Rate from one Business Day after the later of (x) the date on
which the payment from the Paying Agent was received by such Pari Passu Creditor
Party and (y) the date on which such indemnification payment from the Company
was received by such Pari Passu Creditor Party, to but excluding the date on
which such payment is returned to the Company.
(c) Notwithstanding anything in this Section 8.2 to the contrary, the
Company or any Designated Repurchaser may, subject to the receipt of any
necessary Governmental Approvals and in lieu of making any Mandatory Prepayment
to the Paying Agent, make any Mandatory Prepayment to the Collateral Agent in
Dollars and in immediately available funds,
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without any deduction whatsoever, including any deduction for any setoff,
recoupment, counterclaim or Taxes (other than Excluded Taxes), at the Collateral
Agent's Office, for deposit in the Collateral Agent's Account for the account of
the Pari Passu Facility Agents not later than 12:00 noon (New York time) on the
due date thereof. Any payments received by the Collateral Agent after 12:00 noon
(New York time) on any Business Day shall be deemed received on the next
succeeding Business Day.
(d) Whenever any payment to be made hereunder shall be due on a day
that is not a Business Day (or, in the case of any payment with respect to any
Euro-Dollar Rate Loan, not a Euro-Dollar Business Day) such payment shall
instead be made on the next succeeding Business Day (or, in the case of any such
payment with respect to any Euro-Dollar Rate Loan, the next succeeding
Euro-Dollar Business Day), together with interest accrued during the period of
such extension.
ARTICLE 9.
INTERCREDITOR MATTERS
SECTION 9.1. EQUAL RANKING OF LIENS ON COMMON COLLATERAL, ETC.
(a) EQUAL RANKING OF LIENS.
(i) Each of the Pari Passu Creditor Parties, for itself and its
respective successors and assigns, agrees that (A) to the extent and in the
manner provided in this Section 9.1(a), and subject to Section 9.1(a)(iii),
all Liens securing the Obligations and all Pari Passu Liens shall be of
equal priority and ranking with respect to the Common Collateral, (B) the
Purchaser Parties shall conclusively be deemed to have permitted the
Company to incur the Other Pari Passu Debt and related Pari Passu Liens in
reliance upon the covenants and provisions contained in this Article 9 and
(C) the provisions of this Section 9.1(a)(i) apply notwithstanding anything
to the contrary in the Pari Passu Financing Documents.
(ii) The agreements set forth in Section 9.1(a)(i) shall at all
times apply regardless of (A) the order or time as of which any of the
Liens securing the Obligations and the Pari Passu Liens are granted or
attach to any or all of the Common Collateral, (B) the order or time of
registrations, filings or recordings, physical possession of any of the
Common Collateral or other steps of perfection, (B) whether any of the Pari
Passu Obligations secured by the Liens securing the Obligations and the
Pari Passu Liens is outstanding on the date hereof or hereafter incurred or
arising and, if hereafter incurred or arising, whether incurred or arising
pursuant to a commitment or otherwise and (D) whether the Liens in question
secure the obligations of the Company, any other Company Party, any
Guarantor, any Subsidiary or any Pari Passu Guarantor.
(iii) Subject to the following provisions of this Section
9.1(a)(iii), this Article 9 shall be without any further force or effect
with respect to any Common Collateral (and the proceeds thereof) if, and to
the extent that, a court of appropriate jurisdiction shall have issued a
final and non-appealable order avoiding or subordinating
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either or any of the Liens securing the Obligations or the Pari Passu Liens
on such Common Collateral. If and to the extent that any Lien securing the
Obligations or any Pari Passu Lien on any Common Collateral is avoided or
subordinated, then notwithstanding anything in this Article 9 to the
contrary the other Liens securing the Obligations and Pari Passu Liens on
such Common Collateral shall be senior and in all respects prior to such
avoided or subordinated Lien thereon and all provisions of this Article 9
(other than this Section 9.1(a)(iii) and Sections 9.1(b), 9.1(c) and
9.7(a)) shall be without any further force or effect pursuant to the first
sentence of this Section 9.1(a)(iii) with respect to such avoided or
subordinated Lien.
Nothing in this Section 9.1(a)(iii) shall apply to the avoidance or
subordination of any Guaranty or any Pari Passu Guaranty made by any
Company Party (including any Guaranty given by any Subsidiary Guarantor)
and the resulting termination or reduction of any Lien securing the
Obligations or Pari Passu Lien securing such Guaranty or Pari Passu
Guaranty, respectively. Without limitation, Section 9.6 shall continue to
apply to cash proceeds of any Realization with respect to Common Collateral
of such Company Party, irrespective of any such avoidance or subordination.
(b) CERTAIN AGREEMENTS TO EFFECTUATE PROVISIONS HEREOF.
(i) Each of the Pari Passu Creditor Parties agrees not to (A)
take, or cause to be taken, any action (x) to challenge the legality,
validity, enforceability, perfection or priority of the Liens of any other
Pari Passu Creditor Party in any Common Collateral or (y) the purpose or
effect of which would give its Lien a preference or priority over the Lien
of any other Pari Passu Creditor Party (except as contemplated hereby), (B)
induce any other Person to take such action or (C) cooperate with any other
Person in taking such action.
(ii) The Other Pari Passu Debt shall not be secured at any time
by any Liens on any assets of the Company or any of the Subsidiaries other
than (A) Common Collateral in which the Purchaser Parties have a Lien of
equal ranking and priority and (B) Liens under any Proceeds Account Pledge
Agreement.
(iii) Each Other Pari Passu Creditor Party waives any requirement
for marshaling of assets by the Purchaser Parties in connection with any
Foreclosure Action of the Liens on any Collateral (including the proceeds
thereof) or any other Realization and any other principle of election of
remedies.
(c) REPRESENTATIONS AND WARRANTIES OF PARI PASSU CREDITORS.
(i) Each Pari Passu Creditor Party represents and warrants to
each of the other Pari Passu Creditor Parties that the execution, delivery
and performance of this Agreement are within its corporate or other entity
power and authority and have been duly authorized by all necessary
corporate or other entity action and that this Agreement constitutes the
legal, valid and binding obligation of such party enforceable against it in
accordance with its terms, except as enforceability may be limited by
equitable principles
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or by receivership, bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or limiting creditors' rights generally.
(ii) Each Pari Passu Facility Agent represents and warrants to
each of the other Pari Passu Creditor Parties that it agrees and consents,
and that all Pari Passu Creditors under the Pari Passu Financing Agreement
under which it is acting have consented, to the provisions of this Common
Terms Agreement and are bound by such provisions, including the provisions
(A) with respect to the taking of Foreclosure Actions with respect to
Common Collateral by the Collateral Agent on behalf of all Pari Passu
Creditor Parties, and (B) limiting the rights of the Pari Passu Creditor
Parties to take any Foreclosure Action with respect to Common Collateral
except pursuant to this Article 9.
(d) LIMITATION ON OTHER PARI PASSU DEBT, ETC. The provisions of this
Article 9 (including those regarding the priority of the Liens in the Common
Collateral) shall be binding against the Pari Passu Creditor Parties with
respect to any other Debt of the Company or any other Lien on the assets of any
Company Party only if and to the extent such other Debt constitutes Other Pari
Passu Debt or such other Lien constitutes a Permitted Lien within the meaning of
Section 5.1(e) and is secured only by Collateral.
(e) INTERCREDITOR AGREEMENT PRECEDENCE.
(i) Notwithstanding anything to the contrary contained in any of
the Pari Passu Financing Documents (A) any Foreclosure Action or other
Realization with respect to Common Collateral shall be undertaken by the
Collateral Agent on behalf of all Pari Passu Creditor Parties pursuant to
this Article 9, rather than pursuant to the provisions of the particular
Pari Passu Financing Documents, and the Collateral Agent hereunder shall be
entitled to take all Foreclosure Actions and engage in all Realizations
that the respective Pari Passu Creditor Parties would otherwise be entitled
to take or in which the Pari Passu Creditor Parties would otherwise be
entitled to engage; and (B) the application of the proceeds of any
Realization on Common Collateral shall be subject to the provisions of
Section 9.6.
(ii) Notwithstanding anything to the contrary contained in any of
the Pari Passu Financing Documents, no Pari Passu Creditor Party may
demand, xxx for, collect, enforce any claim for (including by way of
attachment or levy) with respect to Pari Passu Debt as against HoldCo, the
Company, any Guarantor or any other Subsidiary or their respective
property, whether or not such Subsidiary is a Company Party and whether or
not such property constitutes Common Collateral, except as permitted by and
in accordance with Section 9.3 and except that nothing herein shall prevent
any Pari Passu Creditor Party from (A) exercising any right of set off or
(B) bringing any legal action against any Company Party following the
occurrence of any Event of Default under the relevant Pari Passu Financing
or Pari Passu Financing Agreement in order to enforce such Company Party's
Obligations under the applicable Pari Passu Financing Documents and obtain
a judgment in respect thereof, as long as any such action does not
interfere with the prosecution of any Foreclosure Action by the Collateral
Agent and the proceeds thereof are promptly turned over to the Collateral
Agent for distribution pursuant to this Article 9.
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(iii) The Pari Passu Creditor Parties shall from time to time
execute, deliver and record such instruments and documents as may be
required, in the judgment of counsel to the Collateral Agent, to implement
the provisions of this Article 9 and to permit the collective exercise by
the Pari Passu Creditor Parties of all their rights, remedies, powers and
privileges with respect to the Collateral under the respective Pari Passu
Financing Documents pursuant to the provisions hereof.
(iv) Notwithstanding the foregoing, nothing herein shall impair
or otherwise limit the rights, remedies and powers of the Pari Passu
Creditor Parties under the Pari Passu Financing Documents or Applicable Law
not expressly addressed herein, including the right of any Pari Passu
Creditor Parties under any Pari Passu Financing Document to declare a
Default or Event of Default under such Pari Passu Financing Document and to
accelerate or require the repurchase of the Pari Passu Financings
outstanding under the respective Pari Passu Financing Agreement, to
commence a Foreclosure Action and to pursue any Realization with respect to
the Proceeds Account constituting a part of the Collateral under the
respective Pari Passu Financing Agreement and any other rights, remedies
and powers of the Pari Passu Creditor Parties and the Pari Passu Facility
Agents set forth in the respective Pari Passu Financing Documents.
SECTION 9.2. NOTICES OF DEFAULT AND ACCELERATION.
(a) NOTICE OF DEFAULT. Promptly after the Pari Passu Facility Agent
under any Pari Passu Financing Agreement receives notice of the occurrence of,
or the Pari Passu Creditors under any Pari Passu Financing Agreement declare, in
accordance with the terms thereof, a Pari Passu Event of Default thereunder, the
Pari Passu Facility Agent under such Pari Passu Financing Agreement shall notify
the Collateral Agent and each other Pari Passu Facility Agent in writing of such
occurrence or decision (a "Notice of Pari Passu Event of Default"). Promptly
after the waiver of any Pari Passu Event of Default under any Pari Passu
Financing Agreement, or the determination of the Pari Passu Creditors under any
Pari Passu Financing Agreement to rescind and annul any prior declaration of any
Pari Passu Event of Default thereunder, the Pari Passu Facility Agent under such
Pari Passu Financing Agreement shall notify the Collateral Agent and each other
Pari Passu Facility Agent in writing of such waiver or rescission and annulment.
(b) NOTICE OF ACCELERATION, MANDATORY REPURCHASE OR MANDATORY PARTIAL
REPURCHASE. Promptly after the decision of the Pari Passu Creditors under any
Pari Passu Financing Agreement to accelerate the Pari Passu Debt outstanding
thereunder or to declare a Mandatory Repurchase Event prior to the Initial
Repurchase Date of any Note outstanding thereunder, in either case, in
accordance with the terms thereof, the Pari Passu Facility Agent under such Pari
Passu Financing Agreement shall notify the Collateral Agent and each other Pari
Passu Facility Agent in writing of such decision. Promptly after the
determination of the Pari Passu Creditors under any Pari Passu Financing
Agreement to rescind and annul any prior acceleration of the Pari Passu Debt
outstanding thereunder or to rescind and annul any prior Mandatory Repurchase,
the Pari Passu Facility Agent under such Pari Passu Financing Agreement shall
notify the Collateral Agent and each other Pari Passu Facility Agent in writing
of such rescission and annulment.
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(c) FAILURE TO PROVIDE NOTICE. The failure of any Pari Passu Facility
Agent to give any notice provided for in this Section 9.2 to the Collateral
Agent or any other Pari Passu Facility Agent shall not impair or limit the
effectiveness under any Pari Passu Financing Agreement of the occurrence or
declaration (or waiver, rescission or annulment) of any Pari Passu Event of
Default, the acceleration (or rescission or annulment of any acceleration) of
any Pari Passu Debt or the Mandatory Repurchase (or rescission or annulment of
any Mandatory Repurchase) of any Pari Passu Debt outstanding thereunder.
SECTION 9.3. FORECLOSURE ACTIONS AND OTHER REALIZATIONS.
(a) INSTRUCTION TO COMMENCE FORECLOSURE ACTION. After the acceleration
of any Pari Passu Debt under, and in accordance with the applicable provisions
of, any Pari Passu Financing Agreement, the Pari Passu Creditors holding at
least a majority in principal amount of the Pari Passu Debt outstanding under
such Pari Passu Financing Agreement shall be entitled to instruct the Collateral
Agent to commence, no earlier than the thirty-first (31st) day after the date of
the notice required by Section 9.3(b), Foreclosure Action with respect to the
Common Collateral.
(b) NOTICE OF INSTRUCTION TO COMMENCE FORECLOSURE ACTION. Promptly
after the determination of the Pari Passu Creditors under any Pari Passu
Financing Agreement to instruct the Collateral Agent to commence Foreclosure
Action with respect to the Common Collateral, in accordance with Section 9.3(a),
the Pari Passu Facility Agent under such Pari Passu Financing Agreement shall
notify the Collateral Agent and each other Pari Passu Facility Agent in writing
of such decision.
(c) RECONSIDERATION PERIOD. Unless the Reconsideration Period (as
defined below) is waived by the Pari Passu Creditors pursuant to Section 9.3(d),
during the thirty (30)-day period following the date of the notice required by
Section 9.3(b) (the "Reconsideration Period"), the Pari Passu Creditors under
any Pari Passu Financing Agreement that have decided to instruct the Collateral
Agent to commence Foreclosure Action with respect to the Common Collateral (the
"Initiating Pari Passu Creditors") will be required to consult regarding the
advisability of commencing Foreclosure Action with any other Pari Passu Creditor
Party that makes a request therefor.
(d) POLLING OF PARI PASSU CREDITORS; WAIVER OF RECONSIDERATION PERIOD.
A notice from any Pari Passu Facility Agent delivered pursuant to Section 9.3(b)
shall constitute, and be deemed to be, a request by the Initiating Pari Passu
Creditors for the Collateral Agent to poll the other Pari Passu Creditors in
accordance with Section 9.4 as to whether the Reconsideration Period should be
waived. If the Pari Passu Creditors holding at least a majority in principal
amount of the Pari Passu Debt outstanding under each Significant Pari Passu
Facility, voting as separate classes, vote to waive the Reconsideration Period,
then the Reconsideration Period shall be waived and immediately terminated, and
the Initiating Pari Passu Creditors forthwith shall not be required to consult
regarding the advisability of commencing Foreclosure Action with any other Pari
Passu Creditor, whether or not such Pari Passu Creditor is a Pari Passu Creditor
with respect to a Significant Pari Passu Facility and whether it voted not to
waive the Reconsideration Period.
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(e) COMMENCEMENT OF FORECLOSURE ACTION. Unless the Collateral Agent
shall have received, prior to or upon the expiration of the Reconsideration
Period, a notice from the respective Pari Passu Facility Agent that the
Initiating Pari Passu Creditors have decided, in accordance with Section 9.3(f),
to rescind the instruction to commence Foreclosure Action, the Collateral Agent
shall, immediately upon the expiration of the Reconsideration Period or the
earlier termination upon waiver of the Reconsideration Period pursuant to
Section 9.3(d), commence Foreclosure Action against the Common Collateral.
(f) RESCISSION AND ANNULMENT OF INSTRUCTION.
(i) Provided the Reconsideration Period has not been waived in
accordance with Section 9.3(d), at any time after the instruction to
commence Foreclosure Action has been given by the Initiating Pari Passu
Creditors and before all or any portion of the Common Collateral shall have
been sold, otherwise disposed of or otherwise applied or foreclosed upon,
any Initiating Pari Passu Creditor may request the respective Pari Passu
Facility Agent to poll the other Initiating Pari Passu Creditors with
respect to rescission and annulment of such instruction. Upon receipt of
any such request for a poll of the other Initiating Pari Passu Creditors,
the respective Pari Passu Facility Agent shall promptly poll the Initiating
Pari Passu Creditors in accordance with the procedures set forth in the
respective Pari Passu Financing Agreement (or such procedures as such agent
may adopt and comparable to those set forth in Section 9.4, if no
procedures are set forth in such agreement). If the Initiating Pari Passu
Creditors holding at least a majority in principal amount of the Pari Passu
Debt outstanding under the respective Pari Passu Financing Agreement vote
to rescind and annul the instruction to commence Foreclosure Action, the
respective Pari Passu Facility Agent shall, by written notice to the
Company and the Collateral Agent, with a copy of such notice to each of the
other Pari Passu Facility Agents, instruct the Collateral Agent not to
commence any Foreclosure Action that has not theretofore been commenced and
immediately to rescind and annul any Foreclosure Action that has
theretofore been commenced. In accordance with such instruction, the
Collateral Agent shall provide written notice of such rescission and
annulment to the Company and no Foreclosure Action shall be commenced and
any Foreclosure Action that has been commenced shall immediately be
rescinded and annulled.
(ii) If the Reconsideration Period has been waived in accordance
with Section 9.3(d), at any time after the instruction to commence
Foreclosure Action has been given by the Initiating Pari Passu Creditors
and before all or any portion of the Common Collateral shall have been
sold, otherwise disposed of or otherwise applied or foreclosed upon, Pari
Passu Creditors holding at least a majority in principal amount of the Pari
Passu Debt under a Significant Pari Passu Facility may request the
Collateral Agent to poll the Pari Passu Creditors under the other
Significant Pari Passu Facilities with respect to rescission and annulment
of such instruction. Upon receipt of any such request for a poll of the
Pari Passu Creditors under the other Significant Pari Passu Facilities, the
Collateral Agent shall promptly poll such Pari Passu Creditors in
accordance with the procedures set forth in Section 9.4. If the Pari Passu
Creditors holding at least a majority in principal amount of the Pari Passu
Debt outstanding under each Significant Pari Passu Facility, voting as
separate classes, vote to rescind and annul the instruction to commence
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Foreclosure Action, the Collateral Agent shall provide written notice of
such rescission and annulment to the Company and no Foreclosure Action
shall be commenced and any Foreclosure Action that has been commenced shall
immediately be rescinded and annulled.
(iii) Notwithstanding anything in this Section 9.3 to the
contrary, if the Initiating Pari Passu Creditors are not Pari Passu
Creditors under a Significant Pari Passu Facility and if the
Reconsideration Period has not been waived in accordance with Section
9.3(d), at any time after the instruction to commence Foreclosure Action
has been given by the Initiating Pari Passu Creditors and before all or any
portion of the Common Collateral shall have been sold, otherwise disposed
of or otherwise applied or foreclosed upon, Pari Passu Creditors holding at
least a majority in principal amount of the Pari Passu Debt under a
Significant Pari Passu Facility may request the Collateral Agent to poll
the Pari Passu Creditors under the other Significant Pari Passu Facilities
with respect to rescission and annulment of the instruction to commence
Foreclosure Action given by the Initiating Pari Passu Creditors. Upon
receipt of any such request for a poll of the Pari Passu Creditors under
the Significant Pari Passu Facilities, the Collateral Agent shall promptly
poll such Pari Passu Creditors in accordance with the procedures set forth
in Section 9.4. If the Pari Passu Creditors holding at least a majority in
principal amount of the Pari Passu Debt outstanding under each of not less
than two Significant Pari Passu Facilities, voting as separate classes,
(which two or more Significant Pari Passu Facilities represent, in the
aggregate, at least sixty-six and two-thirds percent (66-2/3%) in principal
amount of all Pari Passu Debt outstanding) vote to rescind and annul the
instruction to commence Foreclosure Action given by the Initiating Pari
Passu Creditors, the Collateral Agent shall provide written notice of such
rescission and annulment to the Pari Passu Facility Agent representing the
Initiating Pari Passu Creditor Parties, all other Pari Passu Facility
Agents and the Company and no Foreclosure Action shall be commenced and any
Foreclosure Action that has been commenced shall immediately be rescinded
and annulled.
(iv) No such rescission or annulment shall affect any subsequent
default or Foreclosure Action or impair any right consequent thereto.
SECTION 9.4. VOTING AND POLLING PROCEDURES.
(a) POLLING OF PARI PASSU CREDITORS. In connection with any matter
that must be agreed by the Required Pari Passu Creditors or all or a specified
percentage of the Pari Passu Creditors under each Pari Passu Financing Agreement
or of the Pari Passu Creditors under the Significant Pari Passu Facilities and
as to which the Collateral Agent has been or, pursuant to the provisions hereof,
is deemed to have been requested by any Pari Passu Creditor Party to poll the
Pari Passu Creditors or the Pari Passu Creditors under the Significant Pari
Passu Facilities, each Pari Passu Facility Agent will, on behalf of the
Collateral Agent, poll its respective Pari Passu Creditors as to such matter and
provide a written notice to the Collateral Agent of the results thereof.
(b) POLLING PROCEDURES. In polling the Pari Passu Creditors, the
duties of the Collateral Agent shall be to give notice to each Pari Passu
Facility Agent, which notice shall in
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turn be given by each Pari Passu Facility Agent to their respective Pari Passu
Creditors and shall be sufficient to explain the matter to be acted upon and to
receive and record their respective responses to the action requested in such
notice. For the purposes of this Agreement, polls may be taken orally or in
writing, provided that the methods used by the Pari Passu Facility Agent in
conducting polls hereunder shall be in conformity with the provisions of the
Pari Passu Financing Documents.
(c) BINDING EFFECT. If the Required Pari Passu Creditors or all or a
specified percentage of the Pari Passu Creditors under each Pari Passu Financing
Agreement or of the Pari Passu Creditors under the Significant Pari Passu
Facilities, as the case may be, agree to take action with respect to any matter
governed by this Article 9, the Collateral Agent, on behalf of the Pari Passu
Creditor Parties, shall provide any notice and execute any agreements or other
documents required to give effect to such agreement. Such notices and agreements
shall be binding on all Pari Passu Creditor Parties, and their respective
successors and assigns.
(d) SWAP LENDERS. Notwithstanding anything to the contrary contained
in this Agreement, no Swap Lender, in its capacity as a Swap Lender, shall have
any voting rights with respect to the Collateral.
SECTION 9.5. DIRECTION OF FORECLOSURE ACTION. From and after the
determination of the Pari Passu Creditors under any Pari Passu Financing
Agreement to instruct the Collateral Agent to commence Foreclosure Action with
respect to the Common Collateral, and until all of the Obligations and Other
Pari Passu Obligations shall have been finally paid in full, the Collateral
Agent shall act hereunder in accordance with the instructions of (x) the
Initiating Pari Passu Creditors holding a majority in principal amount of the
outstanding Pari Passu Debt under the respective Pari Passu Financing Documents
or (y) if the Reconsideration Period has been waived in accordance with Section
9.3(d), the Pari Passu Creditors holding at least a majority in principal amount
of the outstanding Pari Passu Debt under each Significant Pari Passu Facility,
each voting as a separate class, provided that in no event shall the Collateral
Agent be instructed to cease prosecution of any Foreclosure Action unless such
Foreclosure Action is rescinded and annulled in accordance with Section 9.3(f).
In so acting, the Collateral Agent shall not be affected by any instructions
given by any Person other than the Persons identified in clause (x) or (y)
above, as the case may be, or be required to obtain the consent of any other
Person to take any action hereunder.
SECTION 9.6. ALLOCATION OF MANDATORY PREPAYMENTS; APPLICATION OF CASH
PROCEEDS FROM PREPAYMENT AND REALIZATION, APPLICATION OF SET OFF.
(a) ALLOCATION OF MANDATORY PREPAYMENTS.
(i) Subject to Section 9.6(a)(iii), all proceeds of any Mandatory
Prepayment (other than interest and "break funding" compensation payable in
respect thereof) shall be paid to the Paying Agent (which amount shall be
held in trust by the Paying Agent for the Pari Passu Facility Agents), or
to the Pari Passu Facility Agents and thereafter shall be applied ratably
in accordance with the respective principal amounts of Pari Passu Debt
becoming due and payable on account of such Mandatory Prepayment under the
respective Pari Passu Financing Agreements, for application in accordance
with
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Sections 2.9 and 2.7 of the Note Purchase Agreements or the equivalent
provisions of the Other Pari Passu Financing Agreements.
(ii) Subject to Section 9.6(a)(iii), all interest and "break
funding" compensation payable in respect of any Mandatory Prepayment shall
be paid to the Paying Agent, shall be held in trust for the Pari Passu
Facility Agents or to the Pari Passu Facility Agents and thereafter shall
be applied to the ratable payment to the Pari Passu Facility Agents
according to the amounts payable on account of interest and "break funding"
compensation under the respective Pari Passu Financing Agreements, for
application in accordance with Section 2.9 and 2.7 of the Note Purchase
Agreements or the equivalent provisions of the Other Pari Passu Financing
Agreements.
(iii) If the amount of any Mandatory Prepayment exceeds the
aggregate amount payable to the Paying Agent or the Pari Passu Facility
Agents pursuant to subsections (i) and (ii) above, any such excess shall be
reapplied in the following order: first, to the ratable payment of fees,
costs and expenses due and payable to the Collateral Agent under this
Agreement or any other Pari Passu Financing Documents; second, to the
Paying Agent for payment to each Pari Passu Facility Agent, for the ratable
benefit of each of the Pari Passu Creditor Parties, ratably according to
the respective amounts of other Pari Passu Obligations then due and payable
(in each case in accordance with the respective amounts owed therefor), for
application in accordance with Section 2.9 and 2.7 of the Note Purchase
Agreements or the equivalent provision of the Other Pari Passu Financing
Agreements; provided, however, that if a Notice of Default remains in
effect, such application shall be made ratably according to the respective
amounts of Pari Passu Obligations, whether any such amount is then due and
payable; and third, to the Company Party that tendered such Mandatory
Prepayment (which payment will be accompanied by a mandatory reduction of
the Pari Passu Commitments on a pro rata basis (in accordance with the
respective amounts of such Pari Passu Commitments) under Section 2.9 of the
Note Purchase Agreements or the equivalent provisions of the Other Pari
Passu Financing Agreements).
(b) ALLOCATION OF CASH PROCEEDS OF REALIZATION OR SET-OFF. Whenever
any payment received by the Collateral Agent pursuant to a Realization or other
recovery in respect of the Pari Passu Obligations is insufficient to pay in
full, or the amount of any set off taken by any Pari Passu Creditor Party in
accordance with Section 10.10 is insufficient to satisfy in full, all amounts
then due and payable to all of the Pari Passu Creditor Parties under all of the
Pari Passu Financing Documents:
(i) IF NOTICE OF DEFAULT IS NOT IN EFFECT. If the Collateral
Agent has not received a Notice of Pari Passu Event of Default in
accordance with Section 9.2(a) (or if all Notices of Pari Passu Event of
Default previously given shall have ceased to be in effect), such payment
shall be applied in the following order: first, to the ratable payment of
fees, costs and expenses due and payable to the Collateral Agent under this
Agreement or any other Pari Passu Financing Documents; and second, to each
Pari Passu Facility Agent, for the ratable benefit of each of the Pari
Passu Creditor Parties under each Pari Passu Financing Agreement, ratably
according to the respective amounts of Pari Passu Debt and other Pari Passu
Obligations then due and payable (in each case in accordance
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with the respective amounts owed therefor), for application in accordance
with Section 2.9 of the Note Purchase Agreements or the equivalent
provision of the Other Pari Passu Financing Agreements; or
(ii) IF NOTICE OF DEFAULT IS IN EFFECT. If the Collateral Agent
has received a Notice of Pari Passu Event of Default in accordance with
Section 9.2(a) that remains in effect, such payment shall be applied in the
following order: first, to the ratable payment of fees, costs and expenses
due and payable to the Collateral Agent under this Agreement or any other
Pari Passu Financing Documents; and second, to each Pari Passu Facility
Agent, for the ratable benefit of each of the Pari Passu Creditor Parties
under each Pari Passu Financing Agreement, ratably according to the
respective amounts of Pari Passu Debt and other Pari Passu Obligations,
regardless of whether any such amount is then due and payable (in each case
in accordance with the respective amounts owed therefor), for application
in accordance with Section 2.9 of the Note Purchase Agreements or the
equivalent provision of the Other Pari Passu Financing Agreements.
SECTION 9.7. PAYMENTS SET ASIDE. Notwithstanding anything to the contrary
herein contained, this Article 9 shall continue to be effective or be
reinstated, as the case may be, if at any time any payment or distribution, or
any part thereof, of or with respect to any or all of the Pari Passu Debt or the
Liens securing the Obligations and the Pari Passu Liens is rescinded,
invalidated, declared to be fraudulent or preferential or otherwise required to
be restored or returned by any Pari Passu Creditor Party in connection with any
Insolvency or Liquidation Proceeding involving any Specified Company Party or
otherwise, or if any Pari Passu Creditor Party elects to return any such payment
or distribution or any part thereof in its discretion, all as though such
payment or distribution had not been made. Each of the Pari Passu Creditor
Parties agrees to reimburse to the Collateral Agent its pro rata share of any
distribution in respect of Common Collateral to the extent the same is actually
paid over to such Pari Passu Creditor Party, and subsequently rescinded,
avoided, or otherwise required to be returned by the Collateral Agent.
SECTION 9.8. MODIFICATIONS, AMENDMENTS, WAIVERS AND CONSENTS OF PARI PASSU
FINANCING DOCUMENTS.
(a) WRITING. Notwithstanding any provisions of any Pari Passu
Financing Document, no amendment of any provision of Article 9 or any of the
Pari Passu Financing Documents other than any of the Initial Purchaser
Guaranties (including a waiver or consent relating thereto) shall be effective
against any Pari Passu Creditor Party unless the same shall be in writing and
signed and consented to by or on behalf of each Pari Passu Creditor Party the
approval or consent of which is required under this Agreement or the applicable
Pari Passu Financing Document. The consent of each Pari Passu Creditor shall be
conclusively evidenced by the signature of the relevant Pari Passu Facility
Agent acting on its behalf. Notwithstanding any provisions of any Pari Passu
Financing Document, no amendment of any provision of the Pari Passu Financing
Documents other than any of the Initial Purchaser Guaranties (including any
waiver or consent relating thereto) shall be effective against any Company Party
that is a party thereto unless the same shall be in writing and signed by such
Company Party, provided that nothing herein shall be deemed to require the
approval or consent of the Company or any other Company Party to any amendment
or waiver of any provision of this Article 9 (other than
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any provision of Section 9.3, 9.5 or 9.6 relating to the percentage of Pari
Passu Creditors the consent or approval of which is required to take or cause to
be taken any action, to give or cause to be given any instruction, or to rescind
or annul or to cause to be rescinded or annulled any action or instruction, any
provision of Section 9.4 relating to the procedures for polling Pari Passu
Creditors with respect to any amendment of or consent or waiver under this
Agreement or to the binding nature of any decision made in accordance with this
Article 9 on the Pari Passu Creditor Parties, any provision of Section 9.3 that
would have the effect of shortening or eliminating the Reconsideration Period or
this Section 9.8).
Notwithstanding anything in the Pari Passu Financing Documents to
the contrary, (i) no amendment that has the effect of (a) increasing the duties
or obligations of the Collateral Agent, any Pari Passu Facility Agent or any
Co-Agent, (b) increasing the standard of care or performance required on the
part of the Collateral Agent, any Pari Passu Facility Agent or any Co-Agent, or
(c) reducing or eliminating the indemnities or immunities to which the
Collateral Agent, any Pari Passu Facility Agent or any Co-Agent is entitled
(including any amendment of this Section 9.8), shall be effective unless the
same shall be signed and consented to by or on behalf of the Collateral Agent,
such Pari Passu Facility Agent or such Co-Agent, as the case may be; (ii) no
amendment of any provision of Section 9.3, 9.5 or 9.6 relating to the percentage
of Pari Passu Creditors the consent or approval of which is required to take or
cause to be taken any action, to give or cause to be given any instruction, or
to rescind or annul or to cause to be rescinded or annulled any action or
instruction, of any provision of Section 9.4 relating to the procedures for
polling Pari Passu Creditors with respect to any amendment of or consent or
waiver under this Agreement or to the binding nature of any decision made in
accordance with this Article 9 on the Pari Passu Creditor Parties, of any
provision of Section 9.3 that would have the effect of shortening or eliminating
the Reconsideration Period or of this Section 9.8 shall be effective without the
consent of the Company and all Pari Passu Facility Agents (acting with the
consent of each Pari Passu Creditor); and (iii) prior to the Initial Purchaser
Release Date relating to any Vendor Party, no amendment of any of the Pari Passu
Financing Documents (including a waiver or consent relating thereto) shall be
effective without the consent of such Vendor Party (except that this clause
(iii) does not apply to any amendment of any Note Purchase Agreement to which
such Vendor Party is not a party or of any Note issued pursuant thereto).
(b) VOTING REQUIREMENTS FOR AMENDMENTS TO PARI PASSU FINANCING
DOCUMENTS. Notwithstanding any provisions of any Pari Passu Financing Document:
(i) AMENDMENTS REQUIRING APPROVAL OF ALL PARI PASSU CREDITORS
UNDER SIGNIFICANT PARI PASSU FACILITIES. No amendment, waiver or consent
that has the effect of (A) decreasing the amount, or advancing the stated
termination or reduction date, of any commitment of any Pari Passu Creditor
under any Pari Passu Financing Agreement; or altering the obligation of any
Initial Purchaser to provide Additional Commitments under Section 2.5(a) of
the Note Purchase Agreements; provided, that the parties acknowledge that
this clause (A) shall not impair the right of the Company to terminate in
whole or permanently reduce in part, without premium or penalty, the
Commitments of the Purchasers under any Note Purchase Agreement in
accordance with Section 2.5(f) thereof or of any other Pari Passu Creditors
in accordance with the terms of any Pari Passu Financing Agreement, (B)
accelerating the principal amortization, interest
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payment schedule with respect to or the stated maturity, Final Maturity
Date or Initial Repurchase Date, as the case may be, of any Pari Passu Debt
under any Pari Passu Financing Agreement; (C) releasing any Common
Collateral with a Fair Market Value in excess of $1,000,000, other than any
Common Collateral released by the Collateral Agent in accordance with the
provisions of Section 7.9(b)(i), (ii) or (iii) as in effect as of the date
hereof, from any Lien securing the Obligations or Pari Passu Lien; (D)
expanding the obligations of the Company to prepay or repurchase any Pari
Passu Debt (including the obligations as to Mandatory Prepayments); (E)
permitting the creation of any Lien ranking prior to or on parity with the
Liens securing the Obligations or the Pari Passu Liens (other than a Pari
Passu Lien securing Other Pari Passu Debt); (F) changing the definition of
"Other Pari Passu Debt," "Excluded Debt," "Foreclosure Action," "Funding
Gap Financing," "Permitted ICMS Debt," "Realization," or "Significant Pari
Passu Facilities;" (G) altering the provisions of Section 9.6; (H) altering
the provisions of this subsection (b); or (I) altering the provisions of
Section 9.1(a), 9.1(d), 9.1(e), 9.2, 9.3, 9.5, 9.6, 9.9 or 10.11(b) shall
be effective unless the same shall be signed by or on behalf of all of the
Pari Passu Creditors under the Significant Pari Passu Facilities.
(ii) AMENDMENTS REQUIRING APPROVAL OF A MAJORITY OF PARI PASSU
CREDITORS UNDER THE SIGNIFICANT PARI PASSU FACILITIES. No amendment, waiver
or consent that has the effect of (A) increasing the rate of interest or
Fees under the Purchasers' Fee Letters accruing with respect to any Pari
Passu Debt or (B) making the covenants, representations, events of default
or lender rights and remedies benefiting any Purchaser Party under this
Agreement, the related Note Purchase Agreement and its Notes more
burdensome (as a whole) than the covenants, representations, Events of
Default or rights and remedies contained in this Agreement and the Note
Purchase Agreements and Notes on the date hereof shall be effective unless
the same shall be signed by or on behalf of the Pari Passu Creditors
holding at least a majority in principal amount of the Pari Passu Debt
outstanding under each Significant Pari Passu Facility.
(iii) CERTAIN AMENDMENTS OF THE COLLATERAL DOCUMENTS.
(A) If the Company enters into any Other Pari Passu
Financing Agreement, the Other Pari Passu Facility Agents, the
Other Pari Passu Creditors, the Company Parties and the
Collateral Agent shall enter into such amendments to the Pari
Passu Collateral Documents as may be required to secure the Pari
Passu Obligations under the Other Pari Passu Financing Documents
with Pari Passu Liens on the Common Collateral. All such
amendments shall be in form and substance satisfactory to the
Collateral Agent, shall be consistent with the provisions of this
Article 9, shall not require the consent of any Person other than
all Pari Passu Facility Agents and shall be accompanied by such
legal opinions and other documents as the Collateral Agent or any
Pari Passu Facility Agent may require.
(B) All amendments to the Pari Passu Collateral Documents as
are required by Section 4.10, all amendments to the Company
Equipment Pledge Agreement or any Subsidiary Equipment Pledge
Agreement for the purpose of removing and naming a successor to
any Person designated as the depositary
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thereunder and all amendments to the HoldCo Stock Pledge
Agreement, the Company Stock Pledge Agreement or any Subsidiary
Stock Pledge Agreement for the purpose of removing and naming a
successor to any individual shareholder named therein shall be in
form and substance satisfactory to the Collateral Agent, shall be
consistent with the provisions of such Section 4.10 and shall not
require the consent of any Person other than (I) the Collateral
Agent, (II) the Company Parties party to such Pari Passu
Collateral Document, (III) in the case of the Company Equipment
Pledge Agreement or the Subsidiary Equipment Pledge Agreement,
the Person designated as the depositary and, if applicable, the
successor to such Person and (IV) in the case of the HoldCo Stock
Pledge Agreement, the Company Stock Pledge Agreement or any
Subsidiary Stock Pledge Agreement, any individual shareholder
named therein and, if applicable, the successor to such
individual shareholder.
(C) All amendments to the Proceeds Account Pledge Agreements
as are required by Section 4.10 and all amendments to the
Proceeds Account Pledge Agreement for the purpose of removing and
naming a successor to any Person designated as the depositary
thereunder shall be in form and substance satisfactory to the
Proceeds Collateral Agent, shall be consistent with the
provisions of such Section 4.10 and shall not require the consent
of any Person other than (I) the respective Proceeds Collateral
Agent, (II) the Company and (III) the Person designated as the
depositary and, if applicable, the successor to such Person.
(D) Subject to Section 9.8(a), any amendment of the Exchange
Debt Agreement shall not require the consent of any Person other
than the Vendor Parties and the Company.
(iv) OTHER AMENDMENTS. Except as otherwise provided in
subsections (i), (ii) and (iii) or as set forth specifically in Section 9.3
or 9.4, no other amendment, waiver or consent in respect of this Agreement
or any other Pari Passu Financing Document (other than the Pari Passu
Financing Agreements and the related Notes) shall be effective unless
signed by each Pari Passu Facility Agent, acting upon the instruction of
the Required Pari Passu Creditors or all or a specified percentage of the
Pari Passu Creditors (or specific Pari Passu Creditor Parties) under, and
as provided in, the respective Pari Passu Financing Agreement.
Notwithstanding anything herein to the contrary, Schedules 1.1(a), 3.1(a),
3.17 and 10.4 may be amended by written notice by the Company to the
Collateral Agent, to the extent necessary to reflect transactions occurring
after the date hereof that are otherwise permissible hereunder.
(c) NO WAIVER. Any waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given. No notice to or
demand on the Company in any case shall entitle the Company to any other or
further notice or demand in similar or other circumstances. Any amendment
effected in accordance with this Section 9.8 shall be binding upon each present
and future Pari Passu Creditor Party and the Company Parties.
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All references in this Section to "Pari Passu Creditor Parties" shall
include each Vendor Party that has provided an Initial Purchaser Guaranty, until
such Initial Purchaser Guaranty has been terminated.
SECTION 9.9 NO EFFECT ON INITIAL PURCHASER GUARANTIES. Nothing in this
Agreement shall: (a) require the sharing or distribution (pursuant to Section
9.6 or otherwise) of amounts received or owing under any Initial Purchaser
Guaranty other than according to the terms of such Initial Purchaser Guaranty;
(b) act to limit the circumstances under which beneficiaries of any Initial
Purchaser Guaranty can or do assert rights under such Initial Purchaser
Guaranty; or (c) limit or delay the degree or extent of any indemnification,
reimbursement, keep-well or similar payment or undertaking otherwise available
under any Initial Purchaser Guaranty.
ARTICLE 10.
MISCELLANEOUS
SECTION 10.1. EXPENSES. The Company shall pay promptly after demand:
(a) any and all reasonable attorneys' fees and disbursements
(including allocated costs of in-house counsel) and other reasonable
out-of-pocket costs and expenses incurred by the Collateral Agent in connection
with (i) the closing of the transactions contemplated hereby, including
recording costs and search and filing fees, in each case whether or not the
Closing Date occurs, and (ii) after the Closing Date, any amendments to or the
administration of the Pari Passu Financing Documents (including costs and
expenses of the Collateral Agent, including their counsel, incurred in
connection with inspections and additional or amendments to Pari Passu
Collateral Documents as contemplated by Sections 4.2 and 4.10, respectively);
and
(b) any and all costs and expenses (including fees and disbursements
of in-house and other attorneys, appraisers, consultants and other experts)
incurred by the Pari Passu Creditor Parties, after an actual or alleged Default
or Event of Default, in any workout, restructuring or similar arrangements or in
connection with the protection, preservation, exercise or enforcement of any of
the terms of the Pari Passu Financing Documents or in connection with any
foreclosure, collection or bankruptcy proceedings.
Notwithstanding the foregoing, to the extent the Company shall have been billed
on or before the Closing Date for any amounts under paragraph (a) above and,
such expenses are denominated in a currency other than Reais, the Company shall
pay such expenses within 90 days after the Closing Date.
SECTION 10.2. INDEMNITY.
(a) The Company shall indemnify, defend and hold harmless each Pari
Passu Creditor Party and the officers, directors, employees, agents, attorneys,
affiliates, successors and assigns of each Pari Passu Creditor Party
(collectively, the "Indemnitees") from and against (i) any and all stamp,
recordation, transaction, transfer and documentary or other similar taxes,
assessments or charges made by any Governmental Authority by reason of the
execution,
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delivery, filing or recording of the Pari Passu Financing Documents, the making
or repayment of the Notes or any Other Pari Passu Debt or any payment in
relation thereto (other than Excluded Taxes), and (ii) any and all liabilities,
losses, damages, penalties, judgments, claims, costs and expenses of any kind or
nature whatsoever (including reasonable attorneys' fees, including allocated
costs of in-house counsel, and disbursements in connection with any actual or
threatened investigative, administrative or judicial proceeding, whether or not
such Indemnitee shall be designated a party thereto) that may be imposed on,
incurred by or asserted against such Indemnitee, in any manner relating to the
Pari Passu Financing Documents or any transactions contemplated therein, the
Material Contracts or any transactions contemplated therein, in each case only
to the extent arising in connection with any claim, investigation, litigation or
proceeding related to or in connection with the transactions contemplated by the
Pari Passu Financing Agreements, any other Pari Passu Financing Document or any
Material Contract (whether or not the relevant claim, investigation, litigation
or proceeding is brought by the Company, its Shareholders or Parent Shareholders
or creditors or an Indemnitee is otherwise a party thereto), and in any case,
whether or not such transactions are consummated, and the Notes or Other Pari
Passu Debt or the use or intended use of the proceeds of the Notes or Other Pari
Passu Debt (the "Indemnified Liabilities"); provided that no Indemnitee shall
have the right to be indemnified or held harmless hereunder for its own gross
negligence or willful misconduct, or for liabilities, losses, damages,
penalties, judgments, claims, costs or expenses attributable solely to the
actions or omission of another Indemnitee.
(b) Without limiting the generality of the foregoing, the Company
further agrees to fully and promptly pay, perform, discharge, defend, indemnify
and hold harmless each Indemnitee from and against any Environmental Damages;
provided that the Company shall not have any obligation to any Indemnitee
hereunder with respect to any Environmental Damages to the extent such
Environmental Damages arise solely from the gross negligence or willful
misconduct of that Indemnitee. To the extent that the undertaking to defend,
indemnify, pay and hold harmless set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, the Company
shall contribute the maximum portion that it is permitted to pay and satisfy
under applicable law to the payment and satisfaction of all Environmental
Damages incurred by the Indemnitees or any of them subject to the same type of
qualifications and exclusions provided in this Section 10.2 with respect to
indemnification for Indemnified Liabilities.
(c) Each Indemnitee will promptly notify the Company of each event of
which it has knowledge that may give rise to a claim under clause (ii) of
Section 10.2(a), provided that the failure to so notify the Company shall in no
way impair the Company's obligations under this Section 10.2 (except to the
extent that such failure to so notify (i) arises from the gross negligence or
willful misconduct of such Indemnitee and has an adverse effect on the Company
or (ii) increases any amounts payable or indemnifiable by the Company under this
Section 10.2). If any investigative, judicial or administrative proceeding is
brought against any Indemnitee indemnified or intended to be indemnified
pursuant to this Section 10.2, the Company, to the extent and in the manner
directed by the Indemnitee, will resist and defend such proceeding with counsel
designated by the Company (which counsel shall be reasonably satisfactory to the
Indemnitee). Each Indemnitee will use its best efforts to cooperate in the
defense of any such action, writ, or proceeding. The Company shall keep such
Indemnitee
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advised of the status of such defense and consult with such Indemnitee prior to
taking any material position with respect thereto. Such Indemnitee shall,
however, be entitled to employ counsel separate from counsel for the Company and
from any other party in such proceeding if such Indemnitee shall reasonably
determine that a conflict of interest or other circumstance exists that makes
representation by counsel chosen by the Company not advisable. The fees and
disbursements of such separate counsel shall be paid by the Company. Such
Indemnitee shall not agree to the settlement of any such claim without the
consent of the Company, unless the Company shall have been given notice of the
commencement of an action and shall have failed to provide the defense thereof
as herein provided or an Event of Default shall have occurred and if
notwithstanding the foregoing, such Indemnitee settles any such claim, the
Company shall have no obligation under this Section 10.2 in respect of such
claim.
(d) To the extent that the undertaking to indemnify and hold harmless
set forth in Section 10.2(a) may be unenforceable as violative of any Applicable
Law or public policy, the Company shall make the maximum contribution to the
payment and satisfaction of each of the Indemnified Liabilities that is
permissible under Applicable Law subject to the same type of qualifications and
exclusions provided in this Section 10.2 with respect to indemnification for
Indemnified Liabilities. All Indemnified Liabilities shall be payable on demand.
SECTION 10.3. CUMULATIVE REMEDIES; FAILURE OR DELAY. The rights and
remedies provided for under this Agreement are cumulative and are not exclusive
of any rights and remedies that may be available to the Pari Passu Creditor
Parties under Applicable Law or otherwise. No failure or delay on the part of
any Pari Passu Creditor Party in the exercise of any power, right or remedy
under the Pari Passu Financing Documents shall impair such power, right or
remedy or operate as a waiver thereof, nor shall any single or partial exercise
of any such power, right or remedy preclude other or further exercise thereof or
of any other power, right or remedy.
SECTION 10.4. NOTICES, ETC. All notices and other communications under this
Agreement shall be in writing and (except for financial statements, other
related informational documents and routine communications, which may be sent by
first-class mail, postage prepaid) shall be personally delivered or sent by
prepaid courier, by overnight, registered or certified mail (postage prepaid),
or by facsimile, and shall be deemed given when received by the intended
recipient thereof. Unless otherwise specified in a notice sent or delivered in
accordance with this Section 10.4, all notices and other communications shall be
given to the parties hereto at their respective addresses (or to their
respective facsimile numbers) indicated in Schedule 1.1(a) (in the case of the
Agents) or 10.4 (in the case of the Company and HoldCo).
SECTION 10.5. TAXES.
(a) Except to the extent required by law, any and all payments by or
on account of the Company arising under this Agreement shall be made free and
clear of and without deduction for any and all present or future Taxes (other
than Excluded Taxes). Sections 2.8 and 2.12 of the Note Purchase Agreements or
any equivalent provisions of the Other Pari Passu Financing Agreements shall be
applicable to all Taxes payable in respect of payments arising under this
Agreement, mutatis mutandis.
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(b) Without prejudice to the survival of any other agreement of the
Company hereunder, the agreements and obligations of the Company contained in
this Section 10.5 shall survive the payment in full of principal of and interest
on the Notes and Other Pari Passu Debt.
SECTION 10.6. CURRENCY EQUIVALENTS; JUDGMENT CURRENCY.
(a) If for the purposes of obtaining judgment in any court it is
necessary to convert a sum due hereunder or under any other Pari Passu Financing
Document in Dollars into another currency, the parties hereto agree, to the
fullest extent that they may effectively do so, that the rate of exchange used
shall be that at which in accordance with normal banking procedures the
Collateral Agent could purchase Dollars with such other currency at the close of
business in New York City on the Business Day preceding that on which final
judgment is given.
(b) The obligation of the Company in respect of any sum due from it to
any Pari Passu Creditor Party hereunder or under any other Pari Passu Financing
Document shall, notwithstanding any judgment in a currency other than Dollars,
be discharged only to the extent that on the Business Day following receipt by
such Pari Passu Creditor Party of any sum adjudged to be so due in such other
currency such Pari Passu Creditor Party may in accordance with normal banking
procedures purchase Dollars with such other currency; if the Dollars so
purchased are less than the sum originally due to such Pari Passu Creditor Party
in Dollars based on the PTAX 800 Rate on the date of such judgment, the Company
agrees, as a separate obligation and notwithstanding any such judgment, to
indemnify such Pari Passu Creditor Party against such loss, and if the Dollars
so purchased exceed the sum originally due to any such Pari Passu Creditor
Party, such Pari Passu Creditor Party agrees to remit to the Company such
excess.
SECTION 10.7. CONFIDENTIALITY.
(a) Each Agent and each Pari Passu Creditor Party shall maintain any
confidential information that it may receive from any Company Party pursuant to
this Agreement, including any confidential information of or relating to any
third-party contained in any Material Contract, and shall not disclose such
information to third parties without the prior consent of such Company Party,
except for disclosure: (i) to legal counsel, accountants and other professional
advisors to the Pari Passu Creditor Parties on a need-to-know basis who have
agreed to be subject to this Section 10.7; (ii) to regulatory officials having
jurisdiction over the Pari Passu Creditor Parties; (iii) required by Applicable
Law or in connection with any legal proceeding; (iv) to any other Pari Passu
Creditor Parties; (v) to another Person in connection with a potential
assignment or Participation under any Pari Passu Financing Agreement, provided
that such Person shall have agreed in writing to be subject to this Section
10.7; (vi) to prospective purchasers of Collateral after an Event of Default;
and (vii) of information that has been previously disclosed publicly without
breach of this provision.
(b) The Company shall maintain this Agreement and the other Pari Passu
Financing Documents confidential and shall not disclose them to third parties,
except for disclosure: (i) to legal counsel, accountants and other professional
advisors to the Company Parties on a need-to-know basis who have agreed to be
subject to this Section 10.7; (ii) to regulatory officials having jurisdiction
over the Company Party; (iii) required by Applicable Law or in connection with
any legal proceeding; (iv) to the Pari Passu Creditor Parties; (v) at the
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request of any Pari Passu Pari Passu Creditor Party, to another Person in
connection with a potential Assignment or Participation; and (vi) of information
that has been previously disclosed publicly without breach of this provision,
provided that the Company shall request confidential treatment in all its SEC
filings, in accordance with then-effective SEC rules and regulations, with
respect to such portions of the Pari Passu Financing Documents as the Collateral
Agent may reasonably designate from time to time.
SECTION 10.8. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (OTHER THAN
CHOICE OF LAW RULES THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANY OTHER
JURISDICTION).
SECTION 10.9. CHOICE OF FORUM.
(a) Pursuant to Section 5-1402 of the New York General Obligations
Law, all actions or proceedings arising in connection with this Agreement may be
tried and litigated in, and each of HoldCo and the Company hereby consents to
the non-exclusive jurisdiction of, state or Federal courts located in the
Borough of Manhattan, New York City, State of New York, unless such actions or
proceedings are required to be brought in another court to obtain subject matter
jurisdiction over the matter in controversy. EACH OF THE COMPANY AND THE PARI
PASSU CREDITOR PARTIES WAIVES ANY RIGHT IT MAY HAVE TO ASSERT THE DOCTRINE OF
FORUM NON CONVENIENS, TO ASSERT THAT IT IS NOT SUBJECT TO THE JURISDICTION OF
SUCH COURTS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN
ACCORDANCE WITH THIS SECTION.
(b) The Company hereby irrevocably appoints CT Corporation Systems
(which has consented thereto) with offices on the date hereof at 000 Xxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as its Process Agent (the "Process Agent") to
receive for and on behalf of the Company service of process in the County of New
York relating to this Agreement and any other Pari Passu Financing Documents
that are not governed by Brazilian law. SERVICE OF PROCESS IN ANY ACTION OR
PROCEEDING AGAINST THE COMPANY MAY BE MADE ON THE PROCESS AGENT BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY ANY OTHER METHOD OF SERVICE
PROVIDED FOR UNDER APPLICABLE LAWS IN EFFECT IN THE STATE OF NEW YORK, AND THE
PROCESS AGENT IS HEREBY AUTHORIZED AND DIRECTED TO ACCEPT SUCH SERVICE FOR AND
ON BEHALF OF THE COMPANY AND TO ADMIT SERVICE WITH RESPECT THERETO. SUCH SERVICE
UPON THE PROCESS AGENT SHALL BE DEEMED EFFECTIVE PERSONAL SERVICE ON THE
COMPANY, SUFFICIENT FOR PERSONAL JURISDICTION, AND SHALL BE LEGAL AND BINDING
UPON THE COMPANY FOR ALL PURPOSES, NOTWITHSTANDING ANY FAILURE OF THE PROCESS
AGENT TO MAIL COPIES OF SUCH LEGAL PROCESS TO THE COMPANY, OR ANY FAILURE ON THE
PART OF THE COMPANY TO RECEIVE THE SAME. The Company confirms that it has
instructed the Process Agent to mail to the Company, upon service of process
being made on the Process Agent pursuant to this Section, a copy of the summons
and complaint or other legal process served upon it, by registered mail, return
receipt requested, at the Company's address set
Common Terms Agreement
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forth in Schedule 10.4, or to such other address as the Company may notify the
Process Agent in writing. The Company agrees that it will at all times maintain
a Process Agent to receive service of process in the County of New York on its
behalf with respect to this Agreement. If for any reason the Process Agent or
any successor thereto shall no longer serve as such Process Agent or shall have
changed its address without notification thereof to the Pari Passu Creditor
Parties, the Company, immediately after gaining knowledge thereof, irrevocably
shall appoint a substitute Process Agent acceptable to the Collateral Agent in
the County of New York and advise the Collateral Agent thereof.
(c) Nothing contained in this Section shall preclude the Pari Passu
Creditor Parties from bringing any action or proceeding arising out of or
relating to this Agreement in the courts of any place where the Company or any
of its assets may be found or located.
SECTION 10.10. SETOFF. In addition to any rights now or hereafter granted
under Applicable Law, during the existence and continuation of any Event of
Default, each Pari Passu Creditor Party is hereby irrevocably authorized by the
Company, at any time or from time to time, without notice to the Company or to
any other Person, any such notice being hereby expressly waived, to set off and
to appropriate and to apply any and all deposits (general or special, including
certificates of deposit, whether matured or unmatured, but not including trust
accounts) and any other indebtedness, in each case whether direct or indirect or
contingent or matured or unmatured at any time held or owing by such Pari Passu
Creditor Party to or for the credit or the account of the Company, against and
on account of the obligations of the Company to such Pari Passu Creditor Party
under the Pari Passu Financing Documents to which the Company is a party,
irrespective of whether or not such Pari Passu Creditor Party shall have made
any demand for payment and although such obligations may be contingent and
unmatured, provided that any such amounts shall be applied in accordance with
Section 9.6 hereof. Each Pari Passu Creditor Party agrees to promptly notify the
Company and the Collateral Agent after any such set-off or application made by
such Pari Passu Creditor Party. The Company agrees that, except as otherwise
provided herein or in any Pari Passu Financing Document, its payment hereunder
and the under the Pari Passu Financing Documents shall be made without off-set,
deduction or counterclaim.
SECTION 10.11 NATURE OF VESPER CAYMAN SPV'S OBLIGATIONS; REMOVAL OF PAYING
AGENT.
(a) Notwithstanding anything herein or in any of the Note Documents or
other Pari Passu Financing Documents to the contrary, (a) the Company shall have
no direct or contingent obligations (including by reason of Section 10.2 hereof)
in respect of Vesper Cayman SPV's obligations under the Purchasers' Fee Letters
and (b) Vesper Cayman SPV shall not be deemed to be a Company Party for purposes
of, and the obligations of Vesper Cayman SPV under the Purchasers' Fee Letters
shall not constitute Obligations to the respective Purchaser Parties or Pari
Passu Obligations to the Pari Passu Creditor Parties that are secured by the
collateral or the Common Collateral (as the case may be) under, the Proceeds
Account Pledge Agreement or the Pari Passu Collateral Documents (as the case may
be).
(b) Upon the vote of the Purchasers holding at least a majority in
principal amount of the Notes outstanding under each of the Note Purchase
Agreements, the Initial
Common Terms Agreement
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Facility Agents and the Collateral Agent shall direct the Company to, and, if
such direction is given, the Company shall terminate the appointment of the
Paying Agent in accordance with subparagraphs (a) and (c) of Paragraph 11 of the
Paying Agency Agreement if (i) the Paying Agent fails on two occasions at any
time during the term of the Paying Agency Agreement to make any payment to any
Initial Facility Agent or to the Collateral Agent in accordance with Paragraph 4
of the Paying Agency Agreement or (ii) a Paying Agent Change of Control (as
defined in the Paying Agency Agreement) occurs or notice of an impending
occurrence of a Paying Agent Change of Control has been given, unless the
Company demonstrates to the reasonable satisfaction of the Initial Facility
Agents and the Collateral Agent that such Paying Agent Change of Control could
not reasonably be expected to expose the Pari Passu Creditors to materially
increased risk.
SECTION 10.12. HEADINGS. The Article and Section headings used in this
Agreement are for convenience of reference only and shall not affect the
construction hereof.
SECTION 10.13. SEVERABILITY. If any provision of this Agreement shall be
held to be invalid, illegal or unenforceable under Applicable Law in any
jurisdiction, such provision shall be ineffective only to the extent of such
invalidity, illegality or unenforceability, which shall not affect any other
provisions hereof or the validity, legality or enforceability of such provision
in any other jurisdiction.
SECTION 10.14. SURVIVAL OF AGREEMENTS, REPRESENTATIONS AND WARRANTIES. All
agreements, representations and warranties made herein shall survive the
execution and delivery of this Agreement, the closing and the extensions of
credit hereunder and shall continue as valid and enforceable agreements,
representations and warranties (when made hereunder) until payment and
performance of any and all Pari Passu Obligations. Any investigation at any time
made by or on behalf of the Pari Passu Creditor Parties shall not diminish the
right of the Pari Passu Creditor Parties to rely thereon. Without limitation,
the agreements and obligations of the Company contained in Sections 10.1 and
10.2 and the obligations of the Pari Passu Creditor Parties under Section 7.5
shall survive the payment in full of all other Pari Passu Obligations.
SECTION 10.15. EXECUTION IN COUNTERPARTS.
(a) This Agreement may be executed in any number of counterparts, each
of which counterparts, when so executed and delivered, shall be deemed to be an
original and all of which counterparts, taken together, shall constitute but one
and the same Agreement. This Agreement shall become effective upon the execution
of a counterpart hereof by each of the parties hereto. Faxed signatures to this
Agreement shall be binding to the extent set forth in clause (b).
(b) This Agreement shall be effective immediately upon its execution
by all parties hereto, provided that, on the Closing Date, each party hereto
shall deliver originally executed signature pages that, if executed in Brazil,
have been witnessed by two witnesses or, if executed outside of Brazil, have
been notarized by a notary public licensed as such under the laws of the place
of signing.
Common Terms Agreement
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SECTION 10.16. COMPLETE AGREEMENT; SUCCESSORS AND ASSIGNS; THIRD-PARTY
BENEFICIARIES. This Agreement, together with the other Pari Passu Financing
Documents, is intended by the parties as the final expression of their agreement
regarding the subject matter hereof and as a complete and exclusive statement of
the terms and conditions of such agreement. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns. The Company may not assign or transfer any interest
hereunder without the prior written consent of each Pari Passu Facility Agent
party hereto. All Pari Passu Creditor Parties that are not signatories to this
Agreement are intended to be third-party beneficiaries of this Agreement.
Otherwise, there are no third-party beneficiaries of this Agreement.
SECTION 10.17. NO FIDUCIARY DUTIES OR PARTNERSHIP; LIMITATION OF LIABILITY,
ETC.
(a) The relationship between the Company Parties and each Pari Passu
Creditor Party is solely that of debtor and creditor, and neither the Collateral
Agent, any Co-Agent, nor any other Pari Passu Creditor Party has any fiduciary
or other special relationship with any Company Party, and no term or condition
of any of the Pari Passu Financing Documents shall be construed so as to deem
the relationship between any Company Party and any Pari Passu Creditor Party to
be other than that of debtor and creditor. No joint venture or partnership is
created by this Agreement or any other Pari Passu Financing Document among any
Pari Passu Creditor Parties or among any Company Party and any Pari Passu
Creditor Party. The obligations of the Pari Passu Creditor Parties hereunder and
thereunder are several and not joint. No Pari Passu Creditor Party shall be
liable for the conduct of the Collateral Agent or any other Pari Passu Creditor
Party and the Collateral Agent shall not be liable for the conduct of any Pari
Passu Creditor Party.
(b) No claim shall be made by any Company Party against any Pari Passu
Creditor Party or by any Pari Passu Creditor Party against any Company Party or
the Affiliates, directors, officers, employees or agents of any Pari Passu
Creditor Party or Company Party for any special, indirect, consequential or
punitive damages in respect of any claim for breach of contract or under any
other theory of liability arising out of or related to the transactions
contemplated by this Agreement, or any act, omission or event occurring in
connection therewith; and the Company, on behalf of itself and the Subsidiaries,
and the Pari Passu Creditor Parties waive, release and agree not to xxx upon any
claim for any such damages, whether or not accrued and whether or not known or
suspected to exist in its favor.
(c) All attorneys, accountants, appraisers and other professional
Persons and consultants retained by the Pari Passu Creditor Parties shall have
the right to act exclusively in the interest of the Pari Passu Creditor Parties
and shall have no duty of disclosure, duty of loyalty, duty of care or other
duty or obligation of any type or nature whatsoever to the Company or any of the
Subsidiaries or any of their shareholders, Affiliates or any other Person,
except as required by or arising under any Applicable Law or otherwise under the
terms of this Agreement.
SECTION 10.18. NO RELIANCE ON MARGIN STOCK. Each of the Pari Passu
Creditors represents to each other party that it in good faith is not relying
upon any "margin stock" (as defined in Regulation U) as collateral in the
extension or maintenance of the credit provided for in this Agreement or the
Pari Passu Financing Agreements.
Common Terms Agreement
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123
SECTION 10.19. WAIVER OF IMMUNITY. To the extent that a Company Party has
or hereafter may be entitled to claim or may acquire, for itself or any of its
assets, any immunity from suit, jurisdiction of any court or from any legal
process (whether through service of notice, attachment prior to judgment,
attachment in aid of execution, or otherwise) with respect to itself or its
property, it hereby irrevocably waives such immunity in respect of its
obligations hereunder and under the Pari Passu Financing Documents to the extent
permitted by Applicable Law and without limiting the generality of the
foregoing, agrees that the waivers set forth in this Section shall be effective
to the fullest extent now or hereafter permitted under the Foreign Sovereign
Immunities Act of 1976 of the United States of America and are intended to be
irrevocable for purposes of such Act.
SECTION 10.20. ENGLISH LANGUAGE. Any translation of this Agreement or any
Note or Pari Passu Financing Agreement into another language shall have no
interpretive effect. All documents or notices to be delivered pursuant to or in
connection with this Agreement and the Pari Passu Financing Agreements shall be
in the English language, or, if any such document or notice is not in the
English language, accompanied by an English translation thereof, and the English
language version of any such document or notice shall control for purposes
hereof.
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Common Terms Agreement
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124
SECTION 10.21. WAIVER OF TRIAL BY JURY. THE COMPANY PARTIES AND THE PARI
PASSU CREDITOR PARTIES WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY ACTION UNDER
THIS AGREEMENT OR ANY ACTION ARISING OUT OF THE TRANSACTIONS CONTEMPLATED
HEREBY, REGARDLESS OF WHICH PARTY INITIATES SUCH ACTION OR ACTIONS.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date first set forth above.
XXXXXX X.X., a sociedade anonima organized
under the laws of Brazil
By:
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Name:
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Title:
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By:
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Name:
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Title:
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WITNESS
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WITNESS
Common Terms Agreement
114
125
VESPER HOLDING S.A., a sociedade anonima
organized under the laws of Brazil
By:
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Name:
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Title:
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By:
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Name:
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Title:
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WITNESS
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WITNESS
Common Terms Agreement
115
126
ABN AMRO BANK N.V.
as Nortel Facility Agent and Qualcomm/Ericsson
Facility Agent
By:
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Name:
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Title:
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By:
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Name:
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Title:
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Common Terms Agreement
116
127
XXXXXX CORPORATION
a Delaware corporation, as Xxxxxx Facility Agent
By:
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Name:
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Title:
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Common Terms Agreement
117
128
LASALLE BANK NATIONAL ASSOCIATION
as Collateral Agent
By:
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Name:
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Title:
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Common Terms Agreement
118
129
EXHIBIT A-1
FORM OF NORTEL NOTE PURCHASE AGREEMENT
FILED AS EXHIBIT 10.4 TO THE REGISTRATION STATEMENT
130
EXHIBIT A-2
FORM OF QUALCOMM/ERICSSON NOTE PURCHASE AGREEMENT
FILED AS EXHIBIT 10.5 TO THE REGISTRATION STATEMENT
131
EXHIBIT A-3
FORM OF XXXXXX NOTE PURCHASE AGREEMENT
OMITTED AS NOT MATERIAL
132
EXHIBIT B
FORM OF
CONTINUING LIMITED RECOURSE GUARANTY
CONTINUING LIMITED RECOURSE GUARANTY, dated as of December 17, 1999 (as
amended from time to time, the "Guaranty"), by VESPER HOLDING S.A., a Brazilian
socidade anonima (the "Guarantor"), in favor of LASALLE BANK NATIONAL
ASSOCIATION ("LaSalle"), as common administrative and collateral agent for
itself, the Nortel Facility Agent, the Nortel Purchasers, the Qualcomm/Ericsson
Facility Agent, the Qualcomm/Ericsson Purchasers, the Xxxxxx Facility Agent, the
Xxxxxx Purchasers, the Other Pari Passu Facility Agents, and the other Pari
Passu Creditors (each as defined in the Common Terms Agreement referred to
below). LaSalle in such capacities, together with its successors in such
capacities, is referred to herein as the "Collateral Agent"; each of the
Collateral Agent and the Pari Passu Secured Parties are referred to herein as a
"Beneficiary" and all collectively, the "Beneficiaries").
R E C I T A L S
A. Pursuant to certain Pari Passu Financing Agreements referred to in
the Common Terms Agreement dated as of December 13, 1999 (as amended from time
to time, the "Common Terms Agreement") by and among the Guarantor, XXXXXX X.X.,
a sociedade anonima organized under the laws of Brazil and a wholly-owned
subsidiary of the Guarantor (the "Company"), the Collateral Agent, ABN AMRO,
individually and as "Nortel Facility Agent" and the "Qualcomm/Ericsson Facility
Agent", and the "Other Pari Passu Facility Agents" (as defined in the Common
Terms Agreement), the Beneficiaries have agreed to make or may in the future
make certain credit facilities available to the Company, subject to the terms
and conditions set forth therein.
B. The Guarantor is the parent company and owns over 99% of the
outstanding capital stock of the Company.
C. In consideration of the provision of the credit facilities evidenced
by the Pari Passu Financing Agreements and the Common Terms Agreement, the
Guarantor has agreed, at the request of the Company, to guaranty unconditionally
any and all obligations of the Company to the Beneficiaries under the Pari Passu
Financing Documents (as defined in the Common Terms Agreement) as provided
herein.
VESPER HOLDING S.A. GUARANTY
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A G R E E M E N T
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Guarantor agrees as follows:
ARTICLE I
DEFINITIONS AND RELATED MATTERS
SECTION 1.1. DEFINITIONS. Terms with initial capital letters not
otherwise defined herein have the respective meanings set forth in the Common
Terms Agreement. In addition, the following terms with initial capital letters
have the following meanings:
"BENEFICIARY" is defined in the Preamble.
"COMPANY" is defined in the Recitals.
"COLLATERAL" is defined in Section 2.2.
"COMMON TERMS AGREEMENT" is defined in the Recitals.
"GUARANTOR" is defined in the Preamble.
"OBLIGATIONS" is defined in Section 2.1(b).
"OBLIGOR" is defined in Section 2.2.
SECTION 1.2. RELATED MATTERS.
(a) GOVERNING LAW. This Guaranty shall be governed by, and construed in
accordance with, the laws of the State of New York (other than choice of law
rules that would require the application of the laws of any other jurisdiction).
(b) HEADINGS. The Article and Section headings used in this Guaranty are for
convenience of reference only and shall not affect the construction hereof.
(c) SEVERABILITY. If any provision of this Guaranty shall be held to be invalid,
illegal or unenforceable under Applicable Law in any jurisdiction, such
provision shall be ineffective only to the extent of such invalidity, illegality
or unenforceability, which shall not affect any other provisions hereof or the
validity, legality or enforceability of such provision in any other
jurisdiction.
SECTION 1.3. INTERPRETATION. Section 1.2 of the Common Terms Agreement
shall govern the interpretation of this Guaranty, provided that all references
therein to the "Agreement" shall be read as being to this Guaranty.
VESPER HOLDING S.A. GUARANTY
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ARTICLE II
GUARANTY
SECTION 2.1. GUARANTY.
(a) Subject to Section 2.4, the Guarantor unconditionally and
irrevocably guaranties and promises to pay to the order of the Collateral Agent,
on demand, in lawful money of the United States of America, any and all
Obligations (as defined below) of the Company from time to time owed to the
Beneficiaries. The Guarantor further agrees that if the Company shall fail to
pay in full when due any of its Obligations, the Guarantor, subject to Section
2.4, will pay the same on demand, in like currency, as a principal obligor, and
not as a surety.
(b) The term "Obligations" is used herein in its most
comprehensive sense and includes any and all present and future obligations and
liabilities of the Company of every type and description owing to any
Beneficiary arising under the Common Terms Agreement or the other Pari Passu
Financing Documents, or any of its successors or assigns, or any Person entitled
to indemnification under such documents, whether for principal, interest, letter
of credit or other reimbursement obligations, cash collateral cover, fees,
expenses, indemnities or other amounts (including attorneys' fees and expenses),
in each case whether due or not due, direct or indirect, joint and/or several,
absolute or contingent, voluntary or involuntary, liquidated or unliquidated,
determined or undetermined, now or hereafter existing, renewed or restructured,
whether or not from time to time decreased or extinguished and later increased,
created or incurred, whether or not arising after the commencement of a
proceeding under any Bankruptcy Law (including post-petition interest) and
whether or not allowed or allowable as a claim in any such proceeding, and
whether or not recovery of any such obligation or liability may be barred by a
statute of limitations or such obligation or liability may otherwise be
unenforceable. All Obligations shall be conclusively presumed to have been
created in reliance on this Guaranty.
(c) All payments hereunder shall be made on the same basis as
payments by the Company under Section 2.8 of the Nortel Note Purchase Agreement.
SECTION 2.2. CONTINUING AND IRREVOCABLE GUARANTY. This is a continuing
guaranty of the Obligations and may not be revoked and shall not otherwise
terminate unless and until the Obligations have been indefeasibly paid and
performed in full. If, notwithstanding the foregoing, the Guarantor shall have
any right under Applicable Law to terminate this Guaranty prior to indefeasible
payment in full of the Obligations, no such termination shall be effective until
noon the next Business Day after the Collateral Agent shall have received
written notice thereof, signed by the Guarantor. Any such termination shall not
affect this Guaranty in relation to (a) any Obligation that was incurred or
arose prior to the effective time of such notice, (b) any Obligation incurred or
arising after such effective time where such Obligation is incurred or arises
either pursuant to commitments existing at such effective time or incurred for
the purpose of protecting or enforcing rights against the Company, the Guarantor
or any other guarantor of or other Person directly or indirectly liable on the
Obligations or any portion thereof (each of the Company, the Guarantor and any
such other Person is referred to herein as an "Obligor") or any security
("Collateral") given for the Obligations or any other guaranties of the
Obligations or any
VESPER HOLDING S.A. GUARANTY
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portion thereof or (c) any renewals, extensions, readvances, modifications or
rearrangements of any of the foregoing.
SECTION 2.3. NATURE OF GUARANTY. The liability of the Guarantor
hereunder is independent of and not in consideration of or contingent upon the
liability of the Company or any other Obligor and a separate action or actions
may be brought and prosecuted against the Guarantor, whether or not any action
is brought or prosecuted against the Company or any other Obligor or whether the
Company or any other Obligor is joined in any such action or actions. This
Guaranty shall be construed as a continuing, absolute and unconditional guaranty
of payment (and not merely of collection) without regard to:
(a) the legality, validity or enforceability of the Pari Passu
Financing Agreements, Common Terms Agreement or any other Pari Passu
Financing Document, any of the Obligations, any Lien or Collateral;
(b) any defense (other than payment), set-off or counterclaim
that may at any time be available to the Company or any other Obligor
against, and any right of setoff at any time held by, any Beneficiary;
or
(c) any other circumstance whatsoever (with or without notice
to or knowledge of the Guarantor or any other Obligor), whether or not
similar to any of the foregoing, that constitutes, or might be
construed to constitute, an equitable or legal discharge of the Company
or any other Obligor, in bankruptcy or in any other instance.
Any payment by any Obligor or other circumstance that operates to toll
any statute of limitations applicable to such Obligor shall also operate to toll
the statute of limitations applicable to the Guarantor. When making any demand
hereunder (including by commencement or continuance of any legal proceeding),
the Beneficiaries may, but shall be under no obligation to, make a similar
demand on all or any of the other Obligors, and any failure by any Beneficiary
to make any such demand shall not relieve the Guarantor of its obligations
hereunder.
SECTION 2.4. AUTHORIZATION. The Guarantor authorizes each Beneficiary,
without notice to or further assent by the Guarantor, and without affecting the
Guarantor's liability hereunder (regardless of whether any subrogation or
similar right that the Guarantor may have or any other right or remedy of the
Guarantor is extinguished or impaired), from time to time to:
(a) permit the Company to increase or create Obligations, or
terminate, release, compromise, subordinate, extend, accelerate or
otherwise change the amount or time, manner or place of payment of, or
rescind any demand for payment or acceleration of, the Obligations or
any part thereof (including increasing or decreasing the rate of
interest thereon), or otherwise amend the terms and conditions of the
Common Terms Agreement, any other Pari Passu Financing Document or any
provision thereof;
(b) take and hold Collateral from the Company or any other
Person, perfect or refrain from perfecting a Lien on such Collateral,
and exchange, enforce, subordinate, release (whether intentionally or
unintentionally), or take or fail to take any other action in respect
of, any such Collateral or Lien or any part thereof;
VESPER HOLDING S.A. GUARANTY
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136
(c) exercise in such manner and order as it elects in its sole
discretion, fail to exercise, waive, suspend, terminate or suffer
expiration of, any of the remedies or rights of such Beneficiary
against the Company or any other Obligor in respect of any Obligations
or any Collateral;
(d) release, add or settle with any Obligor in respect of this
Guaranty, any other Pari Passu Financing Document or the Obligations;
(e) accept partial payments on the Obligations and apply any
and all payments or recoveries from any Obligor or Collateral to such
of the Obligations as any Beneficiary may elect in its sole discretion,
whether or not such Obligations are secured or guaranteed;
(f) refund at any time, at such Beneficiary's sole discretion,
any payments or recoveries received by such Beneficiary in respect of
any Obligations or Collateral; and
(g) otherwise deal with the Company, any other Obligor and any
Collateral as such Beneficiary may elect in its sole discretion.
SECTION 2.5. CERTAIN WAIVERS. To the fullest extent permitted by
Applicable Law, the Guarantor waives:
(a) the right to require the Beneficiaries to proceed against
the Company or any other Obligor, to proceed against or exhaust any
Collateral or to pursue any other remedy in any Beneficiary's power
whatsoever and the right to have the property of the Company or any
other Obligor first applied to the discharge of the Obligations;
(b) all rights and benefits under Applicable Law purporting to
reduce a guarantor's obligations in proportion to the obligation of the
principal or providing that the obligation of a surety or guarantor
must neither be larger nor in other respects more burdensome than that
of the principal;
(c) the benefit of any statute of limitations affecting the
Obligations or the Guarantor's liability hereunder;
(d) any requirement of marshaling or any other principle of
election of remedies and all rights and defenses arising out of an
election of remedies by any Beneficiary, even though that election of
remedies, such as nonjudicial foreclosure with respect to the security
for a guaranteed obligation, has destroyed the Guarantor's rights of
subrogation and reimbursement against the Company;
(e) any right to assert against any Beneficiary any defense
(legal or equitable), set-off, counterclaim and other right that the
Guarantor may now or any time hereafter have against the Company or any
other Obligor;
(f) presentment, demand for payment or performance (including
diligence in making demands hereunder), notice of dishonor or
nonperformance, protest, acceptance
VESPER HOLDING S.A. GUARANTY
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137
and notice of acceptance of this Guaranty, and all other notices of any
kind, including (i) notice of the existence, creation or incurrence of
new or additional Obligations, (ii) notice of any action taken or
omitted by the Beneficiaries in reliance hereon, (iii) notice of any
default by the Company or any other Obligor, (iv) notice that any
portion of the Obligations is due and (v) notice of any action against
the Company or any other Obligor, or any enforcement of other action
with respect to any Collateral, or the assertion of any right of any
Beneficiary hereunder;
(g) any rights, defenses and other benefits the Guarantor may
have by reason of any failure of any Beneficiary to comply with
Applicable Law in connection with a disposition of Collateral;
(h) all defenses that at any time may be available to the
Guarantor by virtue of any valuation, stay, moratorium or other law now
or hereafter in effect and ALL RIGHTS AND DEFENSES THAT ARE OR MAY
BECOME AVAILABLE TO THE GUARANTOR BY REASON OF APPLICABLE LAW; and
(i) to the extent not covered under the preceding items, all
benefits under articles 1491, 1498, 1499, 1500, 1502, 1503 and 1504 of
the Brazilian Civil Code, under articles 261 and 262 of the Brazilian
Commercial Code and under article 595 of the Brazilian Civil Procedure
Code.
SECTION 2.6. SUBROGATION; CERTAIN AGREEMENTS.
(a) THE GUARANTOR WAIVES ANY AND ALL RIGHTS OF SUBROGATION, INDEMNITY OR
REIMBURSEMENT, AND ANY AND ALL BENEFITS OF AND RIGHTS TO ENFORCE ANY POWER,
RIGHT OR REMEDY THAT ANY BENEFICIARY MAY NOW OR HEREAFTER HAVE IN RESPECT OF THE
OBLIGATIONS AGAINST THE COMPANY OR ANY OTHER OBLIGOR, ANY AND ALL BENEFITS OF
AND RIGHTS TO PARTICIPATE IN ANY COLLATERAL, WHETHER REAL OR PERSONAL PROPERTY,
NOW OR HEREAFTER HELD BY ANY BENEFICIARY, AND ANY AND ALL OTHER RIGHTS AND
CLAIMS (AS DEFINED IN THE BANKRUPTCY CODE) THE GUARANTOR MAY HAVE AGAINST THE
COMPANY OR ANY OTHER OBLIGOR, UNDER APPLICABLE LAW OR OTHERWISE, AT LAW OR IN
EQUITY, BY REASON OF ANY PAYMENT HEREUNDER, UNLESS AND UNTIL THE OBLIGATIONS
SHALL HAVE BEEN PAID IN FULL. Without limitation, the Guarantor shall exercise
no voting rights, shall file no claim, and shall not participate or appear in
any bankruptcy or insolvency case involving the Company with respect to the
Obligations unless and until all the Obligations shall have been paid in full.
If, notwithstanding the foregoing, any amount shall be paid to the Guarantor on
account of any such rights at any time, such amount shall be held in trust for
the benefit of the Beneficiaries and shall forthwith be paid to the Collateral
Agent to be held as Collateral or credited and applied in accordance with the
terms of the Common Terms Agreement and the other Pari Passu Financing Documents
upon the Obligations, whether matured, unmatured, absolute or contingent, in the
discretion of the Collateral Agent.
VESPER HOLDING S.A. GUARANTY
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(b) The Guarantor assumes the responsibility for being and keeping itself
informed of the financial condition of the Company and each other Obligor and of
all other circumstances bearing upon the risk of nonpayment of the Obligations
that diligent inquiry would reveal, and agrees that the Beneficiaries shall have
no duty to advise the Guarantor of information regarding such condition or any
such circumstances.
(c) The Guarantor agrees that the books and records of the Beneficiaries showing
the account between the Beneficiaries and the Company shall be admissible in any
proceeding or action and shall constitute prima facie proof of the items therein
set forth. The Guarantor agrees that it shall be bound by each and every ruling,
order and judgment obtained by any Beneficiary against the Company or other
Obligor in respect of the Obligations, whether or not the Guarantor is a party
to, or has received notice of, the action or proceeding in which such ruling,
order or judgment is issued and rendered.
SECTION 2.7. BANKRUPTCY NO DISCHARGE.
(a) Without limiting Section 2.3, this Guaranty shall not be discharged or
otherwise affected by any bankruptcy, reorganization or similar proceeding
commenced by or against the Company or any other Obligor, including (i) any
discharge of, or bar or stay against collecting, all or any part of the
Obligations in or as a result of any such proceeding, whether or not assented to
by any Beneficiary, (ii) any disallowance of all or any portion of any
Beneficiary's claim for repayment of the Obligations, (iii) any use of cash or
other collateral in any such proceeding, (iv) any agreement or stipulation as to
adequate protection in any such proceeding, (v) any failure by any Beneficiary
to file or enforce a claim against the Company or any other Obligor or its
estate in any bankruptcy or reorganization case, or (vi) any amendment,
modification, stay or cure of any Beneficiary's rights that may occur in any
such proceeding. The Guarantor understands and acknowledges that by virtue of
this Guaranty, it has specifically assumed any and all risks of any such
proceeding with respect to the Company and each other Obligor.
(b) Any Event of Default under Section 6.1(f) or (g) of the Common Terms
Agreement shall render all Obligations automatically due and payable for
purposes of this Guaranty, notwithstanding any stay of the right of the
Beneficiaries to accelerate the Obligations.
(c) Notwithstanding anything to the contrary herein contained, this Guaranty
(and any Lien on any Collateral securing this Guaranty or the Obligations) shall
continue to be effective or be reinstated, as the case may be, if at any time
any payment, or any part thereof, of any or all of the Obligations is rescinded,
invalidated, declared to be fraudulent or preferential or otherwise required to
be restored or returned by any Beneficiary in connection with any bankruptcy,
reorganization or similar proceeding involving the Company, any other Obligor or
otherwise, if the proceeds of any Collateral are required to be returned by such
Beneficiary under any such circumstances, or if any Beneficiary elects to return
any such payment or proceeds or any part thereof in its sole discretion, all as
though such payment had not been made or such proceeds had not been received.
Without limiting the generality of the foregoing, if prior to any such
rescission, invalidation, declaration, restoration or return, this Guaranty
shall have been canceled or surrendered (or if any Lien or Collateral shall have
been released or terminated in connection with such cancellation or surrender),
this Guaranty (and such Lien and Collateral) shall be
VESPER HOLDING S.A. GUARANTY
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reinstated in full force and effect, and such prior cancellation or surrender
shall not diminish, discharge or otherwise affect the obligations of the
Guarantor in respect of the amount of the affected payment or application of
proceeds (or such Lien or Collateral).
SECTION 2.8. NON-RECOURSE GUARANTY. The Guarantor, the Collateral Agent
and the Beneficiaries agree that the Guarantor shall not be personally liable
for the payment of any sums guaranteed hereunder. The rights of the Collateral
Agent and the Beneficiaries to enforce this Guaranty shall be solely limited to
the right to proceed against the security for this Guaranty pledged pursuant to
the Stock Pledge Agreement of even date herewith, by and among the Guarantor,
Linneu Albuquerque Xxxxx, the Company and the Collateral Agent, (the "HoldCo
Stock Pledge Agreement") and the Collateral Agent and the Beneficiaries shall
not have the right to proceed directly against the Guarantor for the
satisfaction of the Obligations or for any deficiency remaining unpaid on such
Obligations after the foreclosure upon any property securing this Guaranty. It
is expressly understood and agreed, however, that nothing contained in this
Section 2.8 shall (a) impair in any manner or in any way constitute or be deemed
a release of the obligations evidenced by this Guaranty; (b) otherwise affect or
impair the enforceability of the liens, assignments, rights and security
interests created by the HoldCo Stock Pledge Agreement or any other instrument
or agreement evidencing, securing or relating to the obligations evidenced by
this Guaranty; or (c) waive any rights which the Collateral Agent and the
Beneficiaries may have to proceed against the Guarantor for any tort, or limit
the amount of any judgment which the Collateral Agent and the Beneficiaries may
obtain by reason thereof. Further, nothing in this Section 2.8 shall preclude
the Collateral Agent and the Beneficiaries from foreclosing the liens and
security interests arising under the HoldCo Stock Pledge Agreement or from
enforcing any of its rights and remedies in law or in equity against the
Guarantor or any other person or entity except as expressly stated in this
Section 2.8,
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Guarantor represents and warrants that all representations and
warranties made with respect to it, its assets and its obligations in Article 3
of the Common Terms Agreement are true and correct and makes the following
additional representations and warranties, all of which shall survive until
termination of this Guaranty pursuant to Section 2.2.
SECTION 3.1. FINANCIAL BENEFIT. The Guarantor hereby acknowledges and
warrants it has derived or expects to derive a financial advantage from each
Note purchase or other extension of credit and each renewal, extension, release
of Collateral, or other relinquishment of legal rights, made or granted or to be
made or granted by the Beneficiaries in connection with the Obligations.
SECTION 3.2. SOLVENCY. After giving effect to this Guaranty and the
other Pari Passu Financing Documents to which the Guarantor is a party, and the
transactions contemplated hereby and thereby (including each Note that may be
purchased or loan that may be made under the Pari Passu Financing Agreements),
the Guarantor is Solvent.
VESPER HOLDING S.A. GUARANTY
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ARTICLE IV
COVENANTS
The Guarantor covenants that it will comply with all covenants
pertaining to it, its assets and its obligations under Articles 4 and 5 of the
Common Terms Agreement until termination of this Guaranty pursuant to Section
2.2.
ARTICLE V
MISCELLANEOUS
SECTION 5.1. EXPENSES. The Guarantor shall pay to the Collateral Agent
any and all costs and expenses (including attorneys' fees and expenses), that
any Beneficiary may incur in connection with (a) the collection of all sums
guarantied hereunder or (b) the exercise or enforcement of any of the rights,
powers or remedies of the Beneficiaries under this Guaranty or Applicable Law.
All such amounts and all other amounts payable hereunder shall be payable on
demand, together with interest at the Base Rate plus 6% per annum.
SECTION 5.2. AMENDMENTS AND OTHER MODIFICATIONS. No amendment of any
provision of this Guaranty (including a waiver thereof or consent relating
thereto) shall be effective unless the same shall be in writing and signed by
the Collateral Agent. Any waiver or consent relating to any provision of this
Guaranty shall be effective only in the specific instance and for the specific
purpose for which given. No notice to 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.
SECTION 5.3. CUMULATIVE REMEDIES; FAILURE OR DELAY. The rights and
remedies provided for under this Guaranty are cumulative and are not exclusive
of any rights and remedies that may be available to the Beneficiaries under
Applicable Law or otherwise. No failure or delay on the part of any Beneficiary
in the exercise of any power, right or remedy under this Guaranty shall impair
such power, right or remedy or shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power, right or remedy preclude other or
further exercise of such or any other power, right or remedy.
SECTION 5.4. NOTICES, ETC. All notices and other communications under
this Guaranty shall be in writing and shall be personally delivered or sent by
prepaid courier, by overnight, registered or certified mail (postage prepaid),
or by prepaid telex, telecopy or telegram, and shall be deemed given when
received by the intended recipient thereof. Unless otherwise specified in a
notice given in accordance with the foregoing provisions of this Section 5.4,
all notices and other communications shall be given to the parties hereto at
their respective addresses (or to their respective telex or telecopier numbers)
indicated on Schedule 5.4.
SECTION 5.5. SUCCESSORS AND ASSIGNS. This Guaranty and each amendment
hereof shall be binding upon and, subject to the next sentence, inure to the
benefit of the Guarantor, the Beneficiaries and their respective successors and
assigns. The Guarantor shall not assign any of its rights or obligations
hereunder without the prior written consent of the Collateral Agent. The
VESPER HOLDING S.A. GUARANTY
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benefit of this Guaranty shall automatically pass with any assignment of the
Obligations (or any portion thereof), to the extent of such assignment. In
connection with any assignment or grant of participation, each Beneficiary may
disclose to any Person all documents and information that such Beneficiary has
relating to the Guarantor and this Guaranty, whether furnished by the Company,
the Guarantor or otherwise. The Guarantor further agrees that the Beneficiaries
may disclose such documents and information to the Company and any other
Obligors.
SECTION 5.6. CHOICE OF FORUM.
(a) Pursuant to Section 5-1402 of the New York General Obligations Law, all
actions or proceedings arising in connection with this Guaranty may be tried and
litigated in state or Federal courts located in the Borough of Manhattan, New
York City, State of New York, unless such actions or proceedings are required to
be brought in another court to obtain subject matter jurisdiction over the
matter in controversy. THE GUARANTOR AND EACH OF THE BENEFICIARIES WAIVES ANY
RIGHT IT MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS, TO ASSERT THAT
IT IS NOT SUBJECT TO THE JURISDICTION OF SUCH COURTS OR TO OBJECT TO VENUE TO
THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 5.6.
(b) The Guarantor hereby irrevocably appoints CT Corporation Systems (the
"Process Agent," which has consented thereto) with offices on the date hereof at
000 0xx Xxx Xxxx, Xxx Xxxx 00000, as Process Agent to receive for and on behalf
of the Guarantor service of process in the County of New York relating to this
Guaranty. SERVICE OF PROCESS IN ANY ACTION OR PROCEEDING AGAINST THE GUARANTOR
MAY BE MADE ON THE PROCESS AGENT BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, OR BY ANY OTHER METHOD OF SERVICE PROVIDED FOR UNDER APPLICABLE LAWS
IN EFFECT IN THE STATE OF NEW YORK, AND THE PROCESS AGENT IS HEREBY AUTHORIZED
AND DIRECTED TO ACCEPT SUCH SERVICE FOR AND ON BEHALF OF THE GUARANTOR AND TO
ADMIT SERVICE WITH RESPECT THERETO. SUCH SERVICE UPON THE PROCESS AGENT SHALL BE
DEEMED EFFECTIVE PERSONAL SERVICE ON THE GUARANTOR, SUFFICIENT FOR PERSONAL
JURISDICTION, TEN (10) DAYS AFTER MAILING, AND SHALL BE LEGAL AND BINDING UPON
THE GUARANTOR FOR ALL PURPOSES, NOTWITHSTANDING ANY FAILURE OF THE PROCESS AGENT
TO MAIL COPIES OF SUCH LEGAL PROCESS TO THE GUARANTOR, OR ANY FAILURE ON THE
PART OF THE GUARANTOR TO RECEIVE THE SAME. The Guarantor confirms that it has
instructed the Process Agent to mail to the Guarantor, upon service of process
being made on the Process Agent pursuant to this Section 5.6(b), a copy of the
summons and complaint or other legal process served upon it, by registered mail,
return receipt requested, at the Guarantor's address set forth in Schedule 5.4,
or to such other address as the Guarantor may notify the Process Agent in
writing. The Guarantor agrees that it will at all times maintain a process agent
to receive service of process in the County of New York on its behalf with
respect to this Guaranty. If for any reason the Process Agent or any successor
thereto shall no longer serve as such process agent or shall have changed its
address without notification thereof to the Beneficiaries, the Guarantor,
immediately after
VESPER HOLDING S.A. GUARANTY
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gaining knowledge thereof, irrevocably shall appoint a substitute process agent
acceptable to the Collateral Agent in the County of New York and advise the
Collateral Agent thereof.
(c) Nothing contained in this Section shall preclude the Beneficiaries from
bringing any action or proceeding arising out of or relating to this Guaranty in
the courts of any place where the Guarantor or any of its assets may be found or
located.
SECTION 5.7. SET OFF. In addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
upon the occurrence and during the continuance of any Event of Default, each
Beneficiary, each holder or transferee of any Obligations or any Person with any
interest therein is hereby irrevocably authorized by the Guarantor, at any time
or from time to time, without notice to the Guarantor or to any other Person,
any such notice being hereby expressly waived, to set off and to appropriate and
to apply any and all deposits (general or special, including certificates of
deposit, whether matured or unmatured, but not including trust accounts) and any
other Debt, in each case whether direct or indirect or contingent or matured or
unmatured at any time held or owing by such Beneficiary, such holder, such
transferee or such other Person, to or for the credit or the account of the
Guarantor, against and on account of the obligations of the Guarantor to such
Beneficiary, such holder, such transferee, or such other Person under this
Guaranty or the other Pari Passu Financing Documents to which the Guarantor is a
party, irrespective of whether or not such Beneficiary, such holder, such
transferee or such other Person shall have made any demand for payment and
although such obligations may be contingent and unmatured. The Beneficiary
agrees to notify the Guarantor promptly of any such set-off and the application
made by such Beneficiary, provided that the failure to give such notice shall
not affect the validity of such set-off and application.
SECTION 5.8. COMPLETE AGREEMENT. This Guaranty, together with the
exhibits and schedules hereto and the other Pari Passu Financing Documents, is
intended by the parties as the final expression of their agreement regarding the
subject matter hereof and as a complete and exclusive statement of the terms and
conditions of such agreement.
SECTION 5.9. LIMITATION OF LIABILITY. No claim shall be made by the
Guarantor against any Beneficiary or the Affiliates, directors, officers,
employees or agents of any Beneficiary for any special, indirect, consequential
or punitive damages in respect of any claim for breach of contract or under any
other theory of liability arising out of or related to the transactions
contemplated by this Guaranty, or any act, omission or event occurring in
connection therewith; and the Guarantor waives, releases and agrees not to xxx
upon any claim for any such damages, whether or not accrued and whether or not
known or suspected to exist in its favor.
SECTION 5.10. CURRENCY EQUIVALENTS; JUDGMENT CURRENCY.
(a) If for the purposes of obtaining judgment in any court it is necessary to
convert a sum due hereunder or under any other Pari Passu Financing Document in
Dollars into another currency, the parties hereto agree, to the fullest extent
that they may effectively do so, that the rate of exchange used shall be that at
which in accordance with normal banking procedures the
VESPER HOLDING S.A. GUARANTY
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Collateral Agent could purchase Dollars with such other currency at the close of
business in New York City on the Business Day preceding that on which final
judgment is given.
(b) The obligation of the Guarantor in respect of any sum due from it to any
Beneficiary hereunder or under any other Pari Passu Financing Document shall,
notwithstanding any judgment in a currency other than Dollars, be discharged
only to the extent that on the Business Day following receipt by such
Beneficiary of any sum adjudged to be so due in such other currency such
Beneficiary may in accordance with normal banking procedures purchase Dollars
with such other currency; if the Dollars so purchased are less than the sum
originally due to such Beneficiary in Dollars, the Guarantor agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify such
Beneficiary against such loss, and if the Dollars so purchased exceed the sum
originally due to any such Beneficiary, such Beneficiary agrees to remit to the
Guarantor such excess.
SECTION 5.11. WAIVER OF IMMUNITY. To the extent that the Guarantor has
or hereafter may be entitled to claim or may acquire, for itself or any of its
assets, any immunity from suit, jurisdiction of any court or from any legal
process (whether through service of notice, attachment prior to judgment,
attachment in aid of execution, or otherwise) with respect to itself or its
property, it hereby irrevocably waives such immunity in respect of its
obligations hereunder and the other Pari Passu Financing Documents to which it
is a party to the extent permitted by Applicable Law and without limiting the
generality of the foregoing, agrees that the waivers set forth in this Section
5.11 shall be effective to the fullest extent now or hereafter permitted under
the Foreign Sovereign Immunities Act of 1976 of the United States of America and
are intended to be irrevocable for purposes of such Act.
SECTION 5.12. ENGLISH LANGUAGE. Any translation of this Guaranty into
another language shall have no interpretive effect. All documents or notices to
be delivered pursuant to or in connection with this Guaranty shall be in the
English language, or, if any such document or notice is not in the English
language, accompanied by an English translation thereof, and the English
language version of any such document or notice shall control for purposes
hereof.
VESPER HOLDING S.A. GUARANTY
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SECTION 5.13. WAIVER OF TRIAL BY JURY. THE GUARANTOR AND THE
BENEFICIARIES (BY ACCEPTANCE HEREOF) WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY
ACTION UNDER THIS GUARANTY OR ANY ACTION ARISING OUT OF THE TRANSACTIONS
CONTEMPLATED HEREBY, REGARDLESS OF WHICH PARTY INITIATES SUCH ACTION OR ACTIONS.
IN WITNESS WHEREOF, the Guarantor has duly executed this Guaranty as of
the date set forth above in the presence of the undersigned witnesses .
VESPER HOLDING S.A.
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
--------------------------------------
Witness
--------------------------------------
Witness
VESPER HOLDING S.A. GUARANTY
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SCHEDULE 5.4.
ADDRESSES
Vesper Holding, S.A.:
Xxxxxxx Xxxxxxxxx xx Xxxxx, 000,
00(X) xxxxx
Xxxxxx Xxx xx Xxxxxxx - XX
Xxxxxx
Fax: 00 00 000-0000
Phone: 00 00 000-0000
Attention: Xxxxxx Xxxxx
Collateral Agent:
LaSalle Bank National Association
000 X. XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Phone: (000) 000-0000
Attention: Xxxxx X. Xxxx
VESPER HOLDING S.A. GUARANTY
Instructions
14
146
EXHIBIT C-1A
FORM OF
COMPANY EQUIPMENT PLEDGE AGREEMENT
This Company Equipment Pledge Agreement (the "Equipment Pledge
Agreement") is made as of December 17, 1999 by and among:
(a) Xxxxxx X.X., a company (sociedade anonima) duly organized
and existing in accordance with the laws of the Federative Republic of Brazil
("Brazil"), with its head office in the City of Rio de Janeiro, State of Rio de
Janeiro, at Xxxxxxx Xxxxxxxxx xx Xxxxx, 000, 00(X) andar, enrolled in the Legal
Entities National List of the Ministry of Finance (C.N.P.J./M.F.) under nr.
02.730.101/0001-43, herein represented in accordance with its Bylaws (the
"Company");
(b) LaSalle Bank National Association, a financial institution
duly organized and existing under the laws of the United States of America, with
its offices at 000 X. XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx, represented
herein by its duly authorized representative, as identified and qualified in the
signature pages hereof, acting as collateral agent for the Pari Passu Secured
Parties (as defined below) (in such capacity, together with its successors in
such capacity, the "Collateral Agent"); and
(c) Xx. Xxxx Xxxx xx Xxxxxxxx Xxxxxxx Jr., a Brazilian, who is
single, with the profession of lawyer and resident and domiciled at Avendia
Republica do Chile, n(O) 500, 25(O) floor in the City of Rio de Janeiro, State
of Rio de Janeiro, bearer of identity card (RG) nr. [***] SSP/PR and
enrolled in the Individual Taxpayers' List (C.P.F./M.F.) under nr.
[***](the "Depository").
W I T N E S S E T H
WHEREAS, the Company has entered into (i) that certain Secured Note
Purchase Agreement dated as of December 13, 1999 (as amended from time to time,
the "Nortel Note Purchase Agreement") with ABN AMRO Bank N.V. ("ABN AMRO"), as
administrative agent (in such capacity, the "Nortel Facility Agent"), Nortel
Networks Corporation ("Nortel"), as initial Purchaser, and the other Purchasers
from time to time party thereto; (ii) that certain Secured Note Purchase
Agreement dated as of December 13, 1999 (as amended from time to time, the
"Qualcomm/Ericsson Note Purchase Agreement") with ABN AMRO, as administrative
agent (in such capacity, the "Qualcomm/Ericsson Facility Agent"), ABN AMRO and
Xxxxxxxx Xxxxxxxxxxxx, as initial Purchasers, the other Purchasers from time to
time party thereto and Telefonaktiebolaget LM Ericsson (publ.) ("Ericsson")
individually; and (iii) that certain Secured Note Purchase Agreement dated as of
December 13, 1999 (as amended from time to time, the "Xxxxxx Note Purchase
Agreement" and, together with the Nortel Note Purchase Agreement and
[*] 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.
Company Equipment Pledge Agreement
Page 1 of 22
147
the Qualcomm/Ericsson Note Purchase Agreement, the "Note Purchase Agreements")
with Xxxxxx Corporation ("Xxxxxx"), as administrative agent (the "Xxxxxx
Facility Agent" and, together with the Nortel Facility Agent and the
Qualcomm/Ericsson Facility Agent, the "Initial Facility Agents"), Xxxxxx, as
initial Purchaser, and the other Purchasers from time to time party thereto (all
such Initial Facility Agents, initial Purchasers, other Purchasers, and the
Collateral Agent, the "Secured Parties", and each a "Secured Party");
WHEREAS, the Company may, after the date hereof, enter into other note
purchase or loan agreements (the "Other Pari Passu Financing Agreements" and,
together with the Note Purchase Agreements the "Pari Passu Financing
Agreements") with other facility agents (the "Other Pari Passu Facility
Agents"), and purchasers or lenders (the "Other Pari Passu Creditors") pursuant
to which other notes are issued or loans extended that rank on a pari passu
basis with and are secured by the same collateral as the Notes and the Note
Purchase Agreements;
WHEREAS, the Company may, pursuant to the terms and conditions set
forth in the Common Terms Agreement, after the date hereof, enter into Interest
Hedge Agreements with a Pari Passu Creditor, any Affiliate of a Pari Passu
Creditor or any other financial institution reasonably acceptable to the
Collateral Agent, that acts as the counterparty in any Interest Hedge Agreement
in respect of the Pari Passu Obligations ("Swap Lender" and, together with the
Secured Parties and the Other Pari Passu Creditors Parties, the "Pari Passu
Secured Parties");
WHEREAS, in connection with the Note Purchase Agreements, HoldCo, the
Company, the Initial Facility Agents, the Collateral Agent and the Other Pari
Passu Facility Agents have entered or will enter, as the case may be, into that
certain Common Terms Agreement dated as of December 13, 1999 (as amended from
time to time, the "Common Terms Agreement") which sets forth certain common
terms, conditions and covenants relating to the Pari Passu Financing Agreements;
and
WHEREAS, it is a covenant entered into in connection with the purchase
of the Notes by the Secured Parties from the Company under the Note Purchase
Agreements that the Company shall have executed and delivered this Equipment
Pledge Agreement to the Collateral Agent for the ratable benefit of the Pari
Passu Secured Parties.
NOW, THEREFORE, in consideration of the foregoing premises and mutual
covenants contained herein, the parties hereto agree as follows:
1. Defined Terms.
(a) Capitalized terms used and not otherwise defined in this
Equipment Pledge Agreement are used herein with the same meanings ascribed to
them in the Common Terms Agreement. All terms defined in this Equipment Pledge
Agreement in the singular shall have the same meanings when used in the plural
and vice versa. The words "hereof," "herein," and "hereunder" and words of
similar import when used in this Equipment Pledge Agreement
Company Equipment Pledge Agreement
Page 2 of 22
148
shall, unless the context otherwise requires, refer to this Equipment Pledge
Agreement as a whole and not to any particular provision of this Equipment
Pledge Agreement, and section, subsection, schedule and exhibit references are
to this Equipment Pledge Agreement unless otherwise specified. All terms defined
in this Equipment Pledge Agreement shall have the defined meanings contained
herein when used in any certificate or other document made or delivered pursuant
hereto.
(b) Except as otherwise stated herein, all terms and
conditions of the Note Purchase Agreements, the Notes, the Common Terms
Agreement (including Article 1 and, except for Sections 10.8, 10.9, 10.19 and
10.20 thereof, Article 10 thereof), and, when executed and delivered, the Other
Pari Passu Financing Documents shall fully and automatically apply to this
Equipment Pledge Agreement, mutatis mutandis, and shall be deemed as an integral
part hereof, as if they were transcribed herein.
2. Pledge; Grant of Security Interest. In order to secure the full and
prompt payment and performance when due (whether at stated maturity, by
acceleration or otherwise) of all obligations and liabilities of the Company
under each of the Note Purchase Agreements and any Note issued thereunder and of
all obligations and liabilities of the Company to the Pari Passu Secured
Parties, which may arise under, out of, or in connection with, the Note Purchase
Agreements, the Common Terms Agreement, or any other Pari Passu Financing
Document, whether on account of principal, interest, reimbursement obligations,
fees, indemnities, costs, expenses or otherwise (including, without limitation,
all fees and disbursements of counsel to the Pari Passu Secured Parties that are
required to be paid by the Company pursuant to the terms of the Note Purchase
Agreements, the Common Terms Agreement or any other Pari Passu Financing
Document) (collectively, the "Obligations"), and all obligations of the Company
to the Collateral Agent or the Pari Passu Secured Parties created under this
Equipment Pledge Agreement (such obligations together with the Obligations being
collectively referred to as the "Secured Obligations"), which, for purposes of
Article 761 of the Brazilian Civil Code, are estimated to be in (but expressly
not limited to) the principal amount of up to US$1,019,000,000, equivalent on
the date hereof to R$ 1,875,673,300, with original final maturity on July 1,
2012 (subject to mandatory and optional repurchase and acceleration thereunder)
or as otherwise provided for in the Note Purchase Agreements, the Common Terms
Agreement or the Notes, the Company hereby pledges, assigns and transfers (which
transfer is effected by means of the constituti clause, pursuant to Articles 274
and 199 of the Brazilian Commercial Code) to the Collateral Agent for the
benefit of the Pari Passu Secured Parties, pursuant to the provisions of
Articles 271 to 279 of the Brazilian Commercial Code and Article 768 et seq. of
the Brazilian Civil Code:
(a) the equipment described and identified in Exhibit 1 hereto
(the "Equipment");
(b) the inventory, spare parts, supplies and other tangible
personal property described and identified in Exhibit 2 hereto (the
"Inventory");
Company Equipment Pledge Agreement
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149
(c) the rights arising from the insurance policies with
respect to the Equipment and Inventory as fully described and identified in
Exhibit 3 hereto (the "Insurance Rights"; and
(d) all proceeds and products of the property referred to in
clauses (a), (b) and (c), including (A) whatever is now or hereafter received
upon the sale, exchange, disposition or operation of any such property, and (B)
any proceeds or Products of items in clause (A) (together with the Insurance
Rights, the Equipment and the Inventory, the "Pledged Assets").
Notwithstanding anything in this Equipment Pledge Agreement to
the contrary, Exhibits 1 and 2 are not required to include any assets that would
otherwise be included as Collateral under the Common Terms Agreement, the book
value of which is less than $50,000 per item; provided, that the aggregate book
value of the assets of the Company and its Subsidiaries not listed on such
Exhibits does not exceed [***] in the aggregate for the Company and the
Subsidiaries taken as a whole.
3. Restriction on Transfer and Encumbrance. The Pledged Assets may not
be sold or transferred by the Company (except as permitted under the Common
Terms Agreement) or by any other means whatsoever become subject to any Liens
(except for those created hereby and those permitted under the Common Terms
Agreement) until this Equipment Pledge Agreement is terminated pursuant to
Section 13 hereof.
4. Registration of the Pledge of the Pledged Assets. The Company shall,
within fifteen (15) days after the execution of this Equipment Pledge Agreement
or any Amendment (as defined below) entered into with respect to Section 6,
register this Equipment Pledge Agreement or such Amendment, as applicable,
together with its sworn translation into the Portuguese language, in the
competent Registry of Titles and Deeds (Cartorio de Registro de Titulos e
Documentos) in Brazil and deliver to the Collateral Agent evidence of such
registration in form and substance reasonably satisfactory to the Collateral
Agent. All expenses incurred in connection with such sworn translations and with
such registrations shall be paid by the Company.
5. Representations and Warranties. The Company hereby repeats herein as
of the date hereof all of the representations and warranties set forth in
Article 3 of the Common Terms Agreement, except for the representation and
warranty set forth in the third sentence of Section 3.2 of the Common Terms
Agreement. In addition, the Company hereby represents and warrants to the
Collateral Agent, for the benefit of the Pari Passu Secured Parties, as follows:
(a) This Equipment Pledge Agreement constitutes a legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, and the security interest created hereby will, upon
completion of the registration required by Section 4 hereof, constitute a legal,
valid and perfected first priority security interest in the Pledged Assets,
enforceable in accordance with its terms against all creditors of the Company,
in each
[*] 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.
Company Equipment Pledge Agreement
Page 4 of 22
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case as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to creditors' rights generally;
provided, however, that any security interest to be created herein on any
Pledged Asset which has not been issued to, or received or acquired by, the
Company on or before the date hereof shall be deemed to have been created,
perfected and to be in full force only (i) after such Pledged Asset is issued
to, or received or acquired by, the Company and (ii) on the date when the Lien
of the Collateral Agent, for the benefit of the Pari Passu Secured Parties
thereon, shall have been registered as provided in Section 4 hereof or as
otherwise may be in the future required by Brazilian law; and provided, further,
that, the pledge created hereby will secure the obligations of the Company to
the Other Pari Passu Secured Parties only upon the effectiveness of the Other
Pari Passu Financing Agreements and the registrations required by Section 4
hereof.
6. Covenants. The Company shall enter into amendments to this Equipment
Pledge Agreement with the Collateral Agent, substantially in the form of Exhibit
5 hereto (each an "Amendment"), (a) as and when required by Section 4.10 of the
Common Terms Agreement, in order to extend the pledge created hereby to the
relevant Pledged Assets (which shall then be subject to all terms and conditions
provided herein) promptly after title to any additional Pledged Assets is
acquired by the Company, all pursuant to the provisions of the Common Terms
Agreement, and (b) upon the entering by the Company into any Other Pari Passu
Financing Documents (or any Interest Hedge Agreement in respect of the Notes),
in order to extend the pledge created hereunder to the other Pari Passu Secured
Parties to secure the obligations assumed by the Company thereunder, and the
Company shall make all filings and registrations and obtain all authorizations
necessary to create a first priority perfected security interest in the Pledged
Assets to which the security interest created hereby was extended in favor of
the Collateral Agent for the benefit of the Pari Passu Secured Parties, and take
such further actions as the Collateral Agent may reasonably request for the
purposes of obtaining or preserving the full benefits of this Equipment Pledge
Agreement and of the rights and powers herein granted with respect to all such
after-acquired Pledged Assets and in favor of all such subsequent Pari Passu
Secured Parties. For purposes of clause (a) of the foregoing sentence, "Pledged
Assets" shall include, and for purposes of clause (i) of section 2(a) the term
"equipment" shall include: all towers, antennas, switches, computer equipment,
cables (including fiber optic cables), amplifiers, rotating equipment (such as
generators and compressors), electrical equipment including transformers,
switchgear and electrical apparatus, other telecommunications equipment, tools,
office machinery (including computers, typewriters and duplicating machines),
motor vehicles, airplanes, furniture, furnishings and trade fixtures, in each
case together with all computer programs related to any of the foregoing and all
accessions, components, repair parts, spare parts, improvements, replacements,
substitutions and additions to, of or with respect to any of the foregoing. The
Company shall provide the Collateral Agent with evidence of registration of each
such Amendment in the appropriate Registry of Titles and Deeds in Brazil
(Cartori de Registro de Titulos e Documentos) within fifteen (15) days after the
execution of such Amendment.
Company Equipment Pledge Agreement
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7. Transfer of Possession. The Company hereby transfers the possession
of the Pledged Assets, for the benefit and on behalf of the Collateral Agent, to
the Depository, which undertakes its responsibility (as a "Fiel Depositario")
for the Collateral Agent, in accordance with the applicable Brazilian
legislation for the safeguarding and maintenance of the Pledged Assets, as if
they were his/her own. In the event of foreclosure of the pledge by this
Equipment Pledge Agreement, the Depository irrevocably and unconditionally
undertakes to deliver to the Collateral Agent, upon its request, the Pledged
Assets.
8. Records and Inspection. The Company shall keep or cause to be kept
accurate and complete records of the Pledged Assets at the Company's chief
executive office. The Collateral Agent and its employees and agents shall have
the right, at all times during the Company's usual business hours, to (a)
inspect, and verify the quality, quantity, value and condition of, or any other
matter relating to, the Pledged Assets, (b) inspect all records relating thereto
and to make (or require the Company to provide) copies of such records, and (c)
enter upon all premises upon which any of the Pledged Assets are located. In the
case of Pledged Assets in the possession of a third Person, the Collateral Agent
may during the existence of any Event of Default contact such third Person for
the purpose of making such inspection and verification. The Collateral Agent
shall have the absolute right to share any information it gains from such
inspection or verification with the other Secured Parties.
9. Remedies. Without prejudice to the foregoing provisions, upon the
occurrence and during the continuation of an Event of Default, the Collateral
Agent is hereby irrevocably authorized and entitled to, dispose of, collect,
receive, appropriate and/or realize upon the Pledged Assets (or any part
thereof) and may forthwith sell, assign, give option or options to purchase or
otherwise dispose of and deliver the Pledged Assets or any part thereof at such
price and upon such terms and conditions as it may deem appropriate,
irrespective of any prior or subsequent notice to the Company, in accordance
with the provisions set forth in Article 774, Item III, of the Brazilian Civil
Code, and apply the proceeds thus received for payment of the Secured
Obligations as are then due and payable. Any notice by the Collateral Agent that
an Event of Default has occurred and is continuing or has ceased shall be
conclusive as against all third parties. The Company hereby irrevocably appoints
the Collateral Agent as its attorney-in-fact, and for such purpose it has
executed and delivered to the Collateral Agent on the date hereof a
power-of-attorney substantially in the form Exhibit 4 hereto. The Company agrees
to deliver an equivalent power-of-attorney to each successor Collateral Agent.
For the purposes hereof, it is hereby agreed and understood that (a) the
proceeds of any such sale shall be applied in accordance with the terms of the
Common Terms Agreement, and (b) in the event of any deficiency of the proceeds
of any such sale, the Company shall remain liable for the payment of the
corresponding balance of the Secured Obligations.
10. Amendments, Etc., with Respect to the Secured Obligations. The
Company shall remain obligated hereunder, and the Pledged Assets shall remain
subject to the security interests granted hereby, at all times until termination
of this Equipment Pledge Agreement pursuant to
Company Equipment Pledge Agreement
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Section 13 notwithstanding that, without limitation and without any reservation
of rights against the Company, and without notice to or further assent by the
Company:
(a) any demand for payment of any of the Secured Obligations
made by any Pari Passu Secured Party may be rescinded by such Pari Passu Secured
Party in accordance with the terms of the respective Pari Passu Financing
Document, or Article 9 of the Common Terms Agreement and any Other Pari Passu
Financing Document;
(b) the Common Terms Agreement, the Note Purchase Agreements,
the Notes and any other Pari Passu Financing Document are amended, modified or
supplemented in whole or part, in accordance with the terms of such agreement;
and
(c) any guaranty, right to setoff or other collateral security
at any time held by the Collateral Agent for the benefit of the Pari Passu
Secured Parties for the payment of the Secured Obligations may be sold,
exchanged, waived, surrendered or released.
11. Certain Waivers by the Company. Neither the Collateral Agent nor
any Pari Passu Secured Party shall have any obligation to protect, secure,
perfect or insure any other Lien at any time held by it as security for the
Secured Obligations or any property subject thereto. The Company waives any and
all notice of the creation, renewal, extension or accrual of any of the Secured
Obligations and notice of, or proof of reliance by, the Collateral Agent or any
Pari Passu Secured Party upon this Equipment Pledge Agreement; each of the
Secured Obligations shall conclusively be deemed to have been created,
contracted or incurred in reliance upon this Equipment Pledge Agreement; and all
dealings between the Company, on the one hand, and the Collateral Agent and the
Pari Passu Secured Parties, on the other, shall likewise be conclusively
presumed to have been had or consummated in reliance upon this Equipment Pledge
Agreement. The Company waives diligence, presentment, protest, demand for
payment and notice of default or nonpayment to or upon the Company with respect
to the Secured Obligations.
12. Pursuit of Rights and Remedies Against the Company. When pursuing
its rights and remedies hereunder against the Company, the Collateral Agent may,
but shall be under no obligation to, pursue such rights and remedies as it may
have against any third party or against any collateral security for or Guaranty
of the Secured Obligations or any right of offset with respect thereto, and any
failure by the Collateral Agent to pursue such other rights or remedies or to
collect any payments from such third party or to realize upon any such
collateral security or Guaranty or to exercise any such right of offset, or any
release of such third party or of any such collateral security, Guaranty or
right of offset, shall not relieve the Company of any liability hereunder, and
shall not impair or affect the rights and remedies, whether express, implied or
available as a matter of law, of the Collateral Agent or the Pari Passu Secured
Parties.
13. Termination and Release. When the Secured Obligations have been
indefeasibly satisfied in full, the Notes are no longer outstanding and no other
amount is then outstanding or owing to any Pari Passu Secured Party under the
Notes, the Note Purchase Agreements, the
Company Equipment Pledge Agreement
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Common Terms Agreement and any other Pari Passu Financing Document and all Pari
Passu Commitments have terminated, then, and only then, shall this Equipment
Pledge Agreement and the security interests created hereby be released, at the
Company's expense; otherwise, this Equipment Pledge Agreement and the security
interests created hereby shall remain in full force and effect. No release of
this Equipment Pledge Agreement, or of the Lien created and evidenced hereby,
shall be valid unless executed by the Collateral Agent. The Collateral Agent,
upon the Company's request, at the Company's expense and to the extent
authorized to do so by Article 7 of the Common Terms Agreement and in accordance
with this Section 13, shall execute and deliver to the Company all documents
reasonably necessary to evidence such release. To the fullest extent permitted
by Applicable Law, this Equipment Pledge Agreement shall continue to be
effective or shall be reinstated, as the case may be, if at any time any amount
received by the Pari Passu Secured Parties in respect of the Secured Obligations
is rescinded or must otherwise be restored or returned by the Secured Parties
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
the Company, upon the appointment of any intervenor or conservator of, or agent
or similar official for, the Company or any part of their respective assets, or
otherwise, all as though such payments had not been made.
14. Waivers and Amendments. Notwithstanding any provisions of this
Equipment Pledge Agreement, no amendment of any provision of this Equipment
Pledge Agreement (including any waiver or consent relating thereto) shall be
effective unless the same shall have been consented to and signed in accordance
with Section 9.8 of the Common Terms Agreement.
15. Severability. If any provision of this Equipment Pledge Agreement
shall be held to be invalid, illegal or unenforceable under Applicable Law in
any jurisdiction, such provision shall be ineffective only to the extent of such
invalidity, illegality or unenforceability, and shall not affect any other
provisions hereof or the validity, legality or enforceability of such provision
in any other jurisdiction. Where provisions of any Applicable Law resulting in
such prohibition or unenforceability may be waived they are hereby waived by the
Company, the Depository and the Collateral Agent to the full extent permitted by
Applicable Law so that this Equipment Pledge Agreement shall be deemed a valid
and binding agreement, and the security interest created hereby shall constitute
a continuing first priority Lien on and perfected, first priority security
interest in the Pledged Assets, in each case enforceable against the Company in
accordance with its terms.
16. Authority of the Collateral Agent. The Company acknowledges that
the rights and responsibilities of the Collateral Agent under this Equipment
Pledge Agreement with respect to any action taken by the Collateral Agent or the
exercise or non-exercise by the Collateral Agent of any option, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Equipment Pledge Agreement shall, as between the Collateral Agent
and the other Pari Passu Secured Parties, be governed by the Pari Passu
Financing Documents and by such other agreements with respect thereto as may
exist from time to time among them, but, as between the Collateral Agent and the
Company, the Collateral Agent shall be conclusively presumed to be acting as
agent for the Pari Passu Secured Parties with full and valid authority so to act
or refrain from acting, and
Company Equipment Pledge Agreement
Page 8 of 22
154
the Company shall be under no obligation or entitlement to make any inquiry
respecting such authority.
17. Complete Agreement; Successors and Assigns; Third-Party
Beneficiaries. This Equipment Pledge Agreement is intended by the parties as the
final expression of their agreement regarding the subject matter hereof and as a
complete and exclusive statement of the terms and conditions of such agreement.
This Equipment Pledge Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns. All Pari
Passu Secured Parties that are not signatories to this Equipment Pledge
Agreement are intended to be third-party beneficiaries of this Equipment Pledge
Agreement. Otherwise, there are no third-party beneficiaries of this Equipment
Pledge Agreement.
18. Waiver of Immunity. To the extent that the Company has or hereafter
may be entitled to claim or may acquire, for itself or any of the Pledged
Assets, any immunity from suit, jurisdiction of any court or from any legal
process (whether through service of notice, attachment prior to judgment,
attachment in aid of execution, or otherwise) with respect to itself or its
property, it hereby irrevocably waives such immunity in respect of its
obligations hereunder to the extent permitted by Applicable Law.
19. GOVERNING LAW; JURISDICTION. THIS EQUIPMENT PLEDGE AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
BRAZIL. THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION
OF THE COURTS SITTING IN THE CITY OF RIO DE JANEIRO, BRAZIL, IN ANY ACTION OR
PROCEEDING TO RESOLVE ANY DISPUTE OR CONTROVERSY RELATED TO OR ARISING FROM THIS
EQUIPMENT PLEDGE AGREEMENT AND THE PARTIES HERETO IRREVOCABLY AGREE THAT ALL
CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN
SUCH COURTS.
20. No Duty on Agent's Part. The powers conferred on the Collateral
Agent hereunder are solely to protect the Collateral Agent's and the Pari Passu
Secured Parties' interests in the Pledged Assets and shall not impose any duty
upon the Collateral Agent to exercise or on the Pari Passu Secured Parties to
cause the Collateral Agent to exercise any such powers. The Collateral Agent
shall be accountable only for amounts that it actually receives as a result of
the exercise of such powers, and neither the Collateral Agent nor any Pari Passu
Secured Party nor any of its respective officers, directors, employees or agents
shall be responsible to the Company for any act or failure to act hereunder
except to the extent otherwise provided in Section 7.2 of the Common Terms
Agreement.
21. Notices. All notices and other communications under this Equipment
Pledge Agreement shall be in writing and shall be personally delivered or sent
by prepaid courier, by overnight, registered or certified mail (postage
prepaid), or by facsimile, and shall be deemed given when received by the
intended recipient thereof. Unless otherwise specified in a notice sent or
Company Equipment Pledge Agreement
Page 9 of 22
155
delivered in accordance with Section 10.4 of the Common Terms Agreement, all
notices and other communications shall be given to the parties hereto at their
respective addresses (or to their respective facsimile numbers) indicated in
Schedule 1.1(a) of the Common Terms Agreement (in the case of the Collateral
Agent), in Schedule 10.4 of the Common Terms Agreement (in the case of the
Company) or in clause (c) of the Preamble to this Equipment Pledge Agreement (in
the case of any Depository).
22. Survival of Agreements, Representations and Warranties. All
agreements, representations and warranties made herein shall survive the
execution and delivery of this Equipment Pledge Agreement and the closing and
shall continue as valid and enforceable agreements, representations and
warranties (when made hereunder) until payment and performance of any and all
Secured Obligations. Any investigation at any time made by or on behalf of the
Collateral Agent or the Pari Passu Secured Parties shall not diminish the right
of the Collateral Agent or the Pari Passu Secured Parties to rely thereon.
Company Equipment Pledge Agreement
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156
23. Specific Performance. For the purposes hereof, the Collateral Agent
may seek the specific performance of the obligations undertaken herein by the
Company, as provided in Articles 461, 621 and 632 of the Brazilian Civil
Procedure Code.
IN WITNESS WHEREOF, the parties have caused this Company Equipment
Pledge Agreement to be duly executed in the presence of the undersigned
witnesses.
Company:
XXXXXX X.X.
By: By:
------------------------------ --------------------------------
Name: Name:
Title: Title:
Collateral Agent:
LASALLE BANK NATIONAL ASSOCIATION
By: By:
------------------------------ --------------------------------
Name: Name:
Title: Title:
Depository:
---------------------------------
Name:
ID:
Witnesses:
--------------------------------- --------------------------------
Name: Name:
ID: ID:
Company Equipment Pledge Agreement
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EXHIBIT 1
LIST OF EQUIPMENT
Company Equipment Pledge Agreement
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EXHIBIT 2
LIST OF INVENTORY
Company Equipment Pledge Agreement
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EXHIBIT 3
LIST OF INSURANCE RIGHTS
A) Insurance Policy AGF Brasil Seguros nr. [***], dated as of August
20, 1999 - "AGF Empresa" - acquired by Mirror S/A to cover property
fire/lightning/explosion risk of the offices located at Xx. Xxxxx - 00/00
xxxxxx, Xxx xx Xxxxxxx, XX, and an office branch located in Vitoria, ES. Limit
of insured amount: R$ 2,500,000.
B) Amendment to insurance policy "AGF Empresa" described above. Amended
to include insurance coverage for equipment used by third parties. Limit of
insured amount: R$ 900,000.
C) A Letter of AGF Brasil Seguros, dated as of December 4, 1999,
attesting that AGF is about to issue an insurance policy to Vesper S/A to cover
"Civil Liability Risk" for all offices, which shall include coverage for
Operations, Employer and Accidents involving Vehicles. Limit of insured amount:
R$ 2,000,000 (two million Brazilian reais). The insurance policy shall cover the
company's headoffices, as well as local and regional branches and warehouses.
D) Insurance Policy AGF Brasil Seguros, nr. [***], covering
property fire/smoke/airplane crash risk (up to R$ 3,000,000), Electrical Damage
risk (up to R$ 100,000), Sprinklers' water damage risk (up to R$ 300,000),
Damage to Electronic Equipment (R$ 50,000), Robbery (up to R$ 100,000), for the
offices of Mirror S/A located at Xx. Xxxxx - 00 xxx 00 xxxxxx, Xxx xx Xxxxxxx,
XX. Maximum limit of insurance: R$ 3,000,000.
E) Amendment to Insurance Policy AGF Brasil Seguros, nr.
[***], Item 01,covering property fire/smoke/airplane crash risk
(up to R$ 3,000,000), Electrical Damage risk (up to R$ 100,000), Sprinklers'
water damage risk (up to R$ 300,000), Damage to Electronic Equipment (R$
50,000), Robbery (up to R$ 100,000), to include the offices of Mirror S/A
located at Xx. Xxxxx - 00, 00 and 23 floors, Rio de Janeiro, RJ. Maximum limit
of insurance: R$ 3,000,000.
F) Amendment to Insurance Policy AGF Brasil Seguros, nr.
[***], Item 03, covering property fire/smoke/airplane crash risk
(up to R$ 300,000) for the offices of Mirror S/A located at Xx. Xxxxxxxx xx
Xxxxxxxxxxx, 00 - Xxx Xxxx/ Xxxxxxx, XX.
G) Amendment to Insurance Policy AGF Brasil Seguros, nr.
[***], Item 04, covering property fire/smoke/airplane crash risk
(up to R$ 900,000) for the offices of Mirror S/A located at Xx. Xxxxxxx Xxxxxx,
000X - Xxx Xxxxx, XX.
[*] 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.
Company Equipment Pledge Agreement
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H) Amendment to Insurance Policy AGF Brasil Seguros, nr.
[***], Item 05, covering property fire/smoke/airplane crash risk
(up to R$ 700,000) for the offices of Mirror S/A located at Xx. Xxxxxx Xxxxxxx,
000 - Xxxxxx, AM.
I) Amendment to Insurance Policy AGF Brasil Seguros, nr.
[***], Item 06, covering property fire/smoke/airplane crash risk
(up to R$ 500,000) for the offices of Mirror S/A located at Xx. Xxxx Xxxxxxx,
0000, Xxxxxxxx, XX.
J) Amendment to Insurance Policy AGF Brasil Seguros, nr.
[***], Item 07, covering property fire/smoke/airplane crash risk
(up to R$ 300,000) for the offices of Mirror S/A located at Xx. Xxxxxxxx
Xxxxxxx, 0000, Xxxxxx, AP.
K) Amendment to Insurance Policy AGF Brasil Seguros, nr.
[***], Item 08, covering property fire/smoke/airplane crash risk
(up to R$ 1,000,000) for the offices of Mirror S/A located at Xx. Xxxxxx, 0000,
Xxx xx Xxxxxxx, XX.
L) Amendment to Insurance Policy AGF Brasil Seguros, nr.
[***], Item 09, covering property fire/smoke/airplane crash risk
(up to R$ 500,000) for the offices of Mirror S/A located at Rua Sao Xxxxxx, 404
- Recife,PE.
[*] 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.
Company Equipment Pledge Agreement
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EXHIBIT 4
FORM OF POWER OF ATTORNEY
By this Power of Attorney, Xxxxxx X.X., a company (sociedade anonima)
duly organized and existing in accordance with the laws of the Federative
Republic of Brazil, with its head office in the City of Rio de Janeiro, State of
Rio de Janeiro, enrolled in the Legal Entities National List of the Ministry of
Finance (C.N.P.J./M.F.) under nr. 02.730.101/0001-43 (the "Appointer"), herein
represented in accordance with its Bylaws, irrevocably constitutes and appoints
LaSalle Bank National Association, a financial institution duly organized and
existing under the laws of the United States of America (the "Collateral Agent")
as its attorney-in-fact to act in its name and place, to the fullest extent
permitted by law and in accordance with the terms of the Equipment Pledge
Agreement (as defined below), to do and perform all and every act and thing
whatsoever necessary or desirable, in connection with the Company Equipment
Pledge Agreement dated as of December 17, 1999, entered into by and among the
Appointer and the Collateral Agent (for the benefit of the Pari Passu Secured
Parties referred to therein), and the Depository (as defined therein) (as
amended, supplemented or otherwise modified from time to time, the "Equipment
Pledge Agreement") including, without limitation:
(a) upon the occurrence and during the continuation of an
Event of Default, to dispose of, collect, receive, appropriate, withdraw,
transfer and/or realize upon the Pledged Assets (or any part thereof) and
forthwith sell, assign, give option or options to purchase or otherwise dispose
of and deliver the Pledged Assets or any part thereof at such prices and upon
such terms and conditions as it may deem appropriate, irrespective of any prior
or subsequent notice to the Company, in accordance with the provisions set forth
in Article 774, Item III, of the Brazilian Civil Code, and, apply the proceeds
thus received for the payment of the Secured Obligations, being vested with all
necessary powers incidental thereto, including, without limitation, the power
and authority to purchase foreign currency and make all remittances abroad, to
sign any necessary foreign exchange contract with financial institutions in
Brazil that may be required to make such remittances and to represent the
Appointer before the Central Bank and any other Brazilian governmental authority
when necessary to accomplish the purposes of the Equipment Pledge Agreement;
(b) upon the occurrence and during the continuation of an
Event of Default, to take all necessary actions and to execute any instrument
before any Governmental Authority in the case of a public sale of the Pledged
Assets (as defined in the Equipment Pledge Agreement) in accordance with the
terms and conditions set out therein; and
(c) upon the occurrence and during the continuation of an
Event of Default, to take any action and to execute any instrument consistent
with the terms of the
Company Equipment Pledge Agreement
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162
Equipment Pledge Agreement as it may deem necessary or advisable to accomplish
the purposes of the Equipment Pledge Agreement.
Any notice by the Collateral Agent that an Event of Default has
occurred and is continuing or has ceased shall be conclusive as against all
third parties.
Capitalized terms used, but not defined herein shall have the meaning
ascribed to them in the Equipment Pledge Agreement.
The powers granted herein are in addition to the powers granted by the
Appointer to the Collateral Agent in the Equipment Pledge Agreement and do not
cancel or revoke such powers.
This power of attorney shall be irrevocable, valid and effective until
the Equipment Pledge Agreement has terminated in accordance with its terms.
Company Equipment Pledge Agreement
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Any successor Collateral Agent shall automatically succeed to the
rights of the Collateral Agent hereunder.
IN WITNESS WHEREOF, the Appointer has caused its duly authorized
representatives to execute this power of attorney on [o] 1999.
Appointer:
XXXXXX X.X.
By: By:
------------------------------ --------------------------------
Name: Name:
Title: Title:
Company Equipment Pledge Agreement
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EXHIBIT 5
FORM OF
AMENDMENT TO COMPANY EQUIPMENT PLEDGE AGREEMENT
This [o] Amendment to the Company Equipment Pledge Agreement
("Amendment") is made as of [o], 1999 by and among:
(a) Xxxxxx X.X., a company (sociedade anonima) duly organized
and existing in accordance with the laws of the Federative Republic of Brazil
("Brazil"), with its head office in the City of Rio de Janeiro, State of Rio de
Janeiro, at Xxxxxxx Xxxxxxxxx xx Xxxxx, 000, 00(X) and are enrolled in the
Legal Entities National List of the Ministry of Finance (C.N.P.J./M.F.) under
nr. 02.730.101/0001-43, herein represented in accordance with its Bylaws (the
"Company"); and
(b) LaSalle Bank National Association, a financial institution
duly organized and existing under the laws of the United States of America,
with its offices at 000 X. XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx,
represented herein by its duly authorized representative, as identified and
qualified in the signature pages hereof acting as collateral agent for the Pari
Passu Secured Parties (in such capacity, together with its successors in such
capacity the "Collateral Agent"); and
(c) Xx. Xxxx Xxxx xx Xxxxxxxx Xxxxxxx Jr., a Brazilian, who is
single, with the profession of lawyer and resident and domiciled at Avendia
Republica do Chile, n(O) 500, 25(O) floor in the City of Rio de Janeiro, State
of Rio de Janeiro, bearer of identity card (RG) nr. 3659637-6 SSP/PR and
enrolled in the Individual Taxpayers' List (C.P.F./M.F.) under nr.
000.000.000-00 (the "Depository");
WHEREAS, on December 17, 1999, the parties hereto entered into a
Company Equipment Pledge Agreement (the "Equipment Pledge Agreement"),
registered with the Registry of Titles and Deeds of the City of [o] under number
[o];
WHEREAS, the parties hereto have agreed to amend the Equipment Pledge
Agreement in order to [grant to the Collateral Agent, for the ratable benefit of
the Pari Passu Secured Parties, a perfected first priority security interest in
the Pledged Assets], [extend the pledge created thereunder to secure its
Obligations assumed under the [Pari Passu Financing Document] dated [o] entered
into between the Company and [o];
WHEREAS, pursuant to the terms hereof, the parties hereto desire to
amend the Equipment Pledge Agreement;
Company Equipment Pledge Agreement
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NOW, THEREFORE, the parties hereto enter into this Amendment No. __ to
the Equipment Pledge Agreement under the following terms and conditions:
1. Capitalized terms used and not otherwise defined herein shall have
the meaning ascribed to them in the Equipment Pledge Agreement.
2. The Company hereby [pledges and transfers any additional Pledged
Assets contained in the new Exhibit [o] attached hereto (and which were not
contained in the original Exhibit [o] of the Equipment Pledge Agreement) to the
Collateral Agent, for the benefit of the Pari Passu Secured Parties]/[extends
the pledge created under the Equipment Pledge Agreement to secure its
Obligations under the Other Pari Passu Financing Documents listed in Exhibit [o]
hereto, and for the purposes hereof and of the Equipment Pledge Agreement, each
of the Other Pari Passu Creditor Parties listed in Exhibit [o] shall be a Pari
Passu Secured Party under the Equipment Pledge Agreement].
3. The Company hereby represents and warrants to and in favor of the
Collateral Agent, for the benefit of the Pari Passu Secured Parties that:
(a) The execution, delivery, performance and [grant
of the security interest/extension of the pledge created under the
Equipment Pledge Agreement] pursuant to this Amendment have been duly
authorized by all necessary corporate action on the part of the
Company. This Amendment has been duly executed and delivered by the
Company. The execution, delivery, performance and [grant of the
security interest/extension of the pledge created under the Equipment
Pledge Agreement] do not and will not (i) violate any provision of any
charter or other organizational documents of the Company, (ii) conflict
with, result in a breach of, or constitute (or, with the giving of
notice or lapse of time or both, would constitute) a default under, or,
except for consents and approvals that have been obtained and are in
full force and effect, require the approval or consent of any Person
pursuant to, any material Contractual Obligation of the Company
(including any provisions of any Material Contract or any contracts
relating to Debt to which the Company is a party), or violate any
Applicable Law binding on the Company, or (iii) result in the creation
or imposition of any Lien upon any asset of the Company or any income
or profits therefrom, except for the Lien [created/extended] hereby in
favor of the Collateral Agent, for the ratable benefit of the Secured
Parties, under the Equipment Pledge Agreement.
(b) This Amendment and the Equipment Pledge
Agreement, as amended hereby, each constitutes a legal, valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, and the security interest [created/extended]
hereby will, upon completion of the registrations required by Section 5
hereof, constitute a legal, valid and perfected first priority security
interest in the Pledged Assets, enforceable in accordance with its
terms
Company Equipment Pledge Agreement
Page 20 of 22
166
against all creditors of the Company, in each case, except as
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to creditors' rights
generally.
4. All provisions of the Equipment Pledge Agreement not amended or
modified herein shall remain in full force and effect in accordance with the
terms of the Equipment Pledge Agreement.
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167
5. The Company, at its own cost and expense, shall, within fifteen (15)
days after the execution of this Amendment, register this Amendment, together
with a sworn translation hereof, with the competent Registry of Titles and Deeds
(Cartorio de Registro de Titulos e Documentos) in Brazil, and deliver to the
Collateral Agent evidence of such registration in form and substance reasonably
satisfactory to the Collateral Agent.
IN WITNESS WHEREOF, the parties have caused this Amendment No.____ to
the Company Equipment Pledge Agreement to be duly executed in the presence of
the undersigned witnesses.
Company:
XXXXXX X.X.
By: By:
------------------------------ --------------------------------
Name: Name:
Title: Title:
Collateral Agent:
LASALLE BANK NATIONAL ASSOCIATION
By: By:
------------------------------ --------------------------------
Name: Name:
Title: Title:
Depository:
By:
---------------------------------
Name:
ID:
Witnesses:
--------------------------------- -----------------------------------
Name: Name:
ID: ID:
Company Equipment Pledge Agreement
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EXHIBIT C-1B
COMPANY RECEIVABLES PLEDGE AGREEMENT
This Company Receivables Pledge Agreement (this "Receivables Pledge
Agreement") is made as of December 17, 1999, by and between:
(a) Xxxxxx X.X., a company (sociedade anonima) duly organized
and existing in accordance with the laws of the Federative Republic of Brazil
("Brazil"), with its head office in the City of Rio de Janeiro, State of Rio de
Janeiro, at Xxxxxxx Xxxxxxxxx xx Xxxxx, 000, 00(X) andar, enrolled in the Legal
Entities National List of the Ministry of Finance (C.N.P.J./M.F.) under nr.
02.730.101/0001-43, herein represented in accordance with its Bylaws (the
"Company"); and
(b) LaSalle Bank National Association, a financial institution
duly organized and existing under the laws of the United States of America, with
its offices at 000 X. XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx, represented
herein by its duly authorized representative, as identified and qualified in the
signature pages hereof acting as collateral agent for the Pari Passu Secured
Parties (as defined below) (in such capacity, together with its successors in
such capacity, the "Collateral Agent").
W I T N E S S E T H
WHEREAS, the Company has entered into (i) that certain Secured Note
Purchase Agreement dated as of December 13, 1999 (as amended from time to time,
the "Nortel Note Purchase Agreement") with ABN AMRO Bank N.V. ("ABN AMRO"), as
administrative agent (in such capacity, the "Nortel Facility Agent"), Nortel
Networks Corporation ("Nortel"), as initial Purchaser, and the other Purchasers
from time to time party thereto; (ii) that certain Secured Note Purchase
Agreement dated as of December 13, 1999 (as amended from time to time, the
"Qualcomm/Ericsson Note Purchase Agreement") with ABN AMRO, as administrative
agent (in such capacity, the "Qualcomm/Ericsson Facility Agent"), ABN AMRO and
Xxxxxxxx Xxxxxxxxxxxx, as initial Purchasers, the other Purchasers from time to
time party thereto and Telefonaktiebolaget LM Ericsson (publ.) ("Ericsson")
individually; and (iii) that certain Secured Note Purchase Agreement dated as of
December 13, 1999 (as amended from time to time, the "Xxxxxx Note Purchase
Agreement" and, together with the Nortel Note Purchase Agreement and the
Qualcomm/Ericsson Note Purchase Agreement, the "Note Purchase Agreements") with
Xxxxxx Corporation ("Xxxxxx"), as administrative agent (in such capacity, the
"Xxxxxx Facility Agent" and, together with the Nortel Facility Agent and the
Qualcomm/Ericsson Facility Agent, the "Initial Facility Agents"), Xxxxxx, as
initial Purchaser, and the other Purchasers from time to time party thereto (all
such Initial Facility Agents, initial Purchasers, other Purchasers, and the
Collateral Agent, the "Secured Parties", and each a "Secured Party");
Company Receivables Pledge Agreement
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WHEREAS, the Company may, after the date hereof, enter into other note
purchase or loan agreements (the "Other Pari Passu Financing Agreements" and,
together with the Note Purchase Agreements the "Pari Passu Financing
Agreements") with other facility agents (the "Other Pari Passu Facility
Agents"), and purchasers or lenders (the "Other Pari Passu Creditors") pursuant
to which other notes are issued or loans extended that rank on a pari passu
basis with and are secured by the same collateral as the Notes and the Note
Purchase Agreements;
WHEREAS, the Company may, pursuant to the terms and conditions set
forth in the Common Terms Agreement, after the date hereof, enter into Interest
Hedge Agreements with a Pari Passu Creditor, any Affiliate of a Pari Passu
Creditor or any other financial institution reasonably acceptable to the
Collateral Agent, that acts as the counterparty in any Interest Hedge Agreement
in respect of the Pari Passu Obligations ("Swap Lender" and, together with the
Secured Parties and the Other Pari Passu Creditor Parties, the "Pari Passu
Secured Parties");
WHEREAS, in connection with the Note Purchase Agreements, HoldCo, the
Company, the Initial Facility Agents, the Collateral Agent and the Other Pari
Passu Facility Agents have entered or will enter, as the case may be, into that
certain Common Terms Agreement dated as of December 13, 1999 (as amended from
time to time, the "Common Terms Agreement") which sets forth certain common
terms, conditions and covenants relating to the Pari Passu Financing Agreements;
and
WHEREAS, it is a covenant entered into in connection with the purchase
of the Notes by the Pari Passu Secured Parties from the Company under the Note
Purchase Agreements that the Company shall have executed and delivered this
Receivables Pledge Agreement to the Collateral Agent for the ratable benefit of
the Pari Passu Secured Parties.
NOW, THEREFORE, in consideration of the foregoing premises and mutual
covenants contained herein, the parties hereto agree as follows:
1. Defined Terms.
(a) Capitalized terms used and not otherwise defined in this
Receivables Pledge Agreement are used herein with the same meanings ascribed to
such terms in the Common Terms Agreement. All terms defined in this Receivables
Pledge Agreement in the singular shall have the same meanings when used in the
plural and vice versa. The words "hereof," "herein," and "hereunder" and words
of similar import when used in this Receivables Pledge Agreement shall, unless
the context otherwise requires, refer to this Receivables Pledge Agreement as a
whole and not to any particular provision of this Receivables Pledge Agreement,
and section, subsection, schedule and exhibit references are to this Receivables
Pledge Agreement unless otherwise specified. All terms defined in
Company Receivables Pledge Agreement
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this Receivables Pledge Agreement shall have the defined meanings contained
herein when used in any certificate or other document made or delivered pursuant
hereto.
(b) Except as otherwise stated herein, all terms and
conditions of the Note Purchase Agreements, the Notes, the Common Terms
Agreement (including Article 1 and, except for Sections 10.8, 10.9, 10.19 and
10.20, Article 10 thereof), and, when executed and delivered, the Other Pari
Passu Financing Agreements, shall fully and automatically apply to this
Receivables Pledge Agreement, mutatis mutandis, and shall be deemed as an
integral part hereof, as if they were transcribed herein.
2. Pledge; Grant of Security Interest.
(a) In order to secure the full and prompt payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of all obligations and liabilities of the Company under each of the
Note Purchase Agreements and any Note issued thereunder and of all obligations
and liabilities of the Company to the Pari Passu Secured Parties, which may
arise under, out of, or in connection with, the Note Purchase Agreements, the
Common Terms Agreement or any other Pari Passu Financing Document, whether on
account of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses or otherwise (including, without limitation, all fees and
disbursements of counsel to the Pari Passu Secured Parties that are required to
be paid by the Company pursuant to the terms of the Note Purchase Agreements,
the Common Terms Agreement or any other Pari Passu Financing Document) (the
"Obligations"), and all obligations of the Company to the Collateral Agent or
the Pari Passu Secured Parties created under this Receivables Pledge Agreement
(such obligations, together with the Obligations being collectively referred to
as the "Secured Obligations"), which, for the purposes of Article 761 of the
Brazilian Civil Code, are estimated to be in (but expressly not limited to) the
principal amount of up to US$1,019,000,000, equivalent on the date hereof to
R$1,875,673,300, with an original final maturity on July 1, 2012 (subject to
mandatory and optional repurchase and acceleration thereunder) or as otherwise
provided for in the Note Purchase Agreements, the Common Terms Agreement or the
Notes, the Company hereby pledges to the Collateral Agent for the ratable
benefit of the Pari Passu Secured Parties, pursuant to the provisions of
Articles 271 to 279 of the Brazilian Commercial Code and Article 768 et seq. of
the Brazilian Civil Code:
(i) the Company's receivables from its customers, as
described and identified in Exhibit 1 hereto, and all credit rights
related thereto, whether existing as of the date hereof or hereafter,
and whether arising out of telecommunications services provided from
time to time by the Company to such instances or otherwise (the
"Receivables");
(ii) the Company's credit rights existing as of the
date hereof and hereafter arising against the financial institutions
specified in Exhibit 2 hereto (the "Banks"),
Company Receivables Pledge Agreement
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in connection with the amounts collected by such financial institutions
in relation to the Collection Accounts (as defined below) arising in
connection with the Receivables (the "Collection Account Rights");
(iii) all statements, certificates and instruments
representing or evidencing each Collection Account (including the
reports referred to in Section 9(b) hereof), and all Cash Equivalents
and other property from time to time received, receivable or otherwise
distributed in respect of such Cash Equivalents and held in or credited
to each Collection Account; and
(iv) all interest, dividends, premium and other
income derived from any such funds from time to time contained in the
Collection Accounts, all Investments made with any of such funds and
all statements, certificates and instruments representing or evidencing
such Investments and any financial instruments related thereto and the
balance from time to time of the Collection Accounts and, to the extent
not included in the foregoing, all proceeds, products and accessions of
and to any and all of the Collateral referred to in clauses (i), (ii)
and (iii) above, including any and all funds, moneys, incomes or
instruments of whatever nature received upon any collections on, or
exchange, sale or other disposition of any of the Receivables,
Collection Account Rights and the foregoing and any property into which
any of the foregoing is converted, whether cash or non-cash proceeds,
and any and all other amounts paid or payable under or in connection
with any of the foregoing and any and all documents or instruments
related thereto (the "Proceeds," and together with the Receivables and
the Collection Account Rights, the "Pledged Assets").
(b) The Company shall deposit or cause to be deposited all
proceeds, funds or moneys arising from the Receivables in the Collection
Accounts listed in Exhibit 2 hereto (the "Collection Accounts").
3. Restriction on Transfer and Encumbrance. The Pledged Assets may not
be sold or transferred by the Company or by any other means whatsoever become
subject to any Liens (except for those created hereby and those permitted under
the Common Terms Agreement) until this Receivables Pledge Agreement is
terminated pursuant to Section 15 hereof.
4. Registration of the Pledge of the Pledged Assets. The Company shall,
within fifteen (15) days after the execution of this Receivables Pledge
Agreement or any Amendment (as defined below) entered into with respect to
Section 6, register this Receivables Pledge Agreement or such Amendment, as
applicable, together with its sworn translation into the Portuguese language,
with the competent Registry of Titles and Deeds (Cartorio de Registro de Titulos
e Documentos) in Brazil and deliver to the Collateral Agent evidence of such
registration in form and substance reasonably satisfactory to the
Company Receivables Pledge Agreement
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Collateral Agent. All expenses incurred in connection with such sworn
translation and with such registrations shall be paid by the Company.
5. Representations and Warranties. The Company hereby repeats herein as
of the date hereof all of the representations and warranties set forth in
Article 3 of the Common Terms Agreement, except for the representation and
warranty set forth in the third sentence of Section 3.2 of the Common Terms
Agreement. In addition, the Company hereby represents and warrants to the
Collateral Agent, for the benefit of the Pari Passu Secured Parties, as follows:
(a) This Receivables Pledge Agreement constitutes a legal,
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, and the security interest created hereby will, upon
completion of the registration required by Section 4 hereof, constitute a legal,
valid and perfected first priority security interest in the Pledged Assets,
enforceable in accordance with its terms against all creditors of the Company,
in each case as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to creditors' rights
generally; provided, however, that any security interest to be created hereby in
any Pledged Asset which has not been issued to, or received or acquired by, the
Company on or before the date hereof shall be deemed to have been created,
perfected and to be in full force only (i) after such Pledged Asset is issued
to, or received or acquired by, the Company or the Bank and (ii) on the date
when the Lien of the Collateral Agent, for the ratable benefit of the Pari Passu
Secured Parties thereon, shall have been registered as provided in Section 4
hereof or as may be in the future required by Brazilian law; and provided
further that, the pledge created hereby will secure the obligations of the
Company to the Other Pari Passu Secured Parties only upon the effectiveness of
the Other Pari Passu Financing Agreements and the registration required by
Section 4 hereof.
6. Covenants. The Company shall enter into amendments to this
Receivables Pledge Agreement with the Collateral Agent, substantially in the
form of Exhibit 5 hereto (each an "Amendment"), (a) upon investment of any funds
held in any Collection Account, and as and when required by Section 4.10 of the
Common Terms Agreement, in order to extend the Lien created hereunder to any
such Investment as well as any statements, certificates, instruments and
receipts, either physical or electronic, evidencing such Investments (which
shall then be subject to all terms and conditions provided herein) and to any
other additional Pledged Assets (which shall then be subject to all terms and
conditions provided herein) promptly after title to such Pledged Assets is
acquired by the Company, all pursuant to the provisions of the Common Terms
Agreement, and (b) upon the entering by the Company into any Other Pari Passu
Financing Documents (or any Interest Hedge Agreement in respect of the Notes),
in order to extend the Lien created hereby to the other Pari Passu Secured
Parties party thereto to secure the obligations assumed by the Company
thereunder; and the Company shall make all filings and registrations and obtain
all authorizations necessary to create a first priority perfected
Company Receivables Pledge Agreement
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security interest in the Pledged Assets to which the security interest created
hereby was extended in favor of the Collateral Agent for the benefit of the Pari
Passu Secured Parties, and take such further actions as the Collateral Agent may
reasonably request for the purposes of obtaining or preserving the full benefits
of this Receivables Pledge Agreement and of the rights and powers herein granted
with respect to all such after-acquired Pledged Assets and in favor of all such
subsequent Pari Passu Secured Parties. Each Bank shall, to the extent necessary
under Brazilian Law, include a legend in any such statements, certificates,
instruments or receipts, as appropriate, evidencing that invested funds are
subject to a Lien in favor of the Collateral Agent hereunder. The Company shall
provide the Collateral Agent with evidence of the registration of each such
Amendment in the appropriate Registry of Titles and Deeds in Brazil (Cartori de
Registro de Titulos e Documentos) within fifteen (15) days after the execution
of each such Amendment.
7. Appointment and Duties of Banks
(a) The Company and each of the Banks shall execute and
deliver to the Collateral Agent a Deposit Account Agreement substantially in the
form of Exhibit 4 hereto with respect to each Collection Account whereby each
Bank agrees to act as depositary pursuant to Section 281 of the Brazilian
Commercial Code of the amounts deposited in the respective Collection Account
and shall assume full responsibility for the safety, control and accurate
maintenance and preservation of the Collection Account specified therein and the
funds deposited therein in accordance with the terms and conditions set forth
therein. Each Bank shall be subject to the obligations and liabilities provided
for in this Receivables Pledge Agreement, the provisions set forth under Title
XIV of the Brazilian Commercial Code, Section 774 of the Brazilian Civil Code
and any other applicable legal provisions under Applicable Law.
(b) Prior to the occurrence of an Event of Default (as
evidenced by a written notice from the Collateral Agent to each Bank
irrespective of any notice to the contrary from the Company), each Bank shall
make investments with funds on deposit ("Investments") in or otherwise
administer the respective Collection Account pursuant to the instructions of the
Company; provided that such Investments are made in Investments permissible
pursuant to the Common Terms Agreement. Upon the occurrence and during the
continuation of an Event of Default (as evidenced by a written notice from the
Collateral Agent to each Bank irrespective of any notice to the contrary from
the Company), each Bank shall only act pursuant to the instructions it receives
from the Collateral Agent with respect to the relevant Collection Account and
the funds on deposit therein or the Investments made with such funds, the
Pledged Assets or any other provision of this Receivables Pledge Agreement.
(c) The Company and the Collateral Agent hereby vest each Bank
with full powers to manage and invest the funds deposited in the relevant
Collection Account as directed by the Company (except as expressly otherwise
provided in Section 7(b) above).
Company Receivables Pledge Agreement
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Nothing contained herein shall, however, prevent the Collateral Agent upon the
occurrence and continuation of an Event of Default (as evidenced by a written
notice from the Collateral Agent to each Bank irrespective of any notice to the
contrary from the Company) from instructing any Bank, from time to time, as to
the investment of such funds.
(d) The Company, the Collateral Agent and each Bank hereby
agree that any such investment may be liquidated (without regard to maturity
date) by the Bank or the Collateral Agent whenever necessary to make any
distribution or transfer required by this Receivables Pledge Agreement. Neither
any Bank nor, except to the extent provided in Section 7.2 of the Common Terms
Agreement, the Collateral Agent shall have any liability for any investment loss
resulting from any such liquidation of Investments.
(e) The Company and the Collateral Agent hereby irrevocably
appoint and constitute each Bank as their attorney-in-fact pursuant to Article
1288 and following of the Civil Code, granting it special powers for the
specific purpose of maintaining and operating the Collection Accounts, with
powers to invest and transfer the funds from the Collection Accounts as provided
in the Common Terms Agreement or in the other Pari Passu Financing Documents,
being vested will all necessary powers incidental thereto, including, without
limitation, the power and authority to make all remittances abroad in respect of
the Obligations, to sign any necessary foreign exchange contract with financial
institutions in Brazil that may be required to make such remittances and to
represent the Company before the Central Bank. Therefore, as a result of the
powers granted hereby, the Bank shall act as an attorney-in-fact, specifically
with respect to the maintenance and operation of the Collection Accounts and as
depositary of the Collection Account, as provided herein.
8. Undertaking of Each Bank. During the term of this Receivables Pledge
Agreement, each Bank shall expressly undertake:
(a) To receive any and all amounts that shall be deposited by
or on behalf of the Company in the relevant Collection Account, effect the
transfers set forth herein and carry on its duties for the proper maintenance
and preservation of the funds existing in such Collection Account.
(b) To operate and manage, or permit the operation and
management of, the relevant Collection Account only as authorized by this
Receivables Pledge Agreement.
(c) To insert in its computer systems, mailing documents and
any other document or system a legend stating that the operation and management
of the relevant Collection Account shall be made in accordance with the terms
and conditions of this Receivables Pledge Agreement and the other Pari Passu
Financing Documents.
Company Receivables Pledge Agreement
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(d) To invest the funds deposited in the relevant Collection
Account only in accordance with the terms and conditions of this Receivables
Pledge Agreement and the other Pari Passu Financing Documents.
9. Withdrawals and Transfers.
(a) The Company shall have no right to withdraw any cash from
the Collection Account or otherwise dispose of or transfer any Pledged Assets
except as expressly provided herein and in the Common Terms Agreement. Any
withdrawal, transfer or investment requested by the Company in accordance with
the provisions hereof is expressly understood to be made with the permission of
the relevant Bank in the exercise of its exclusive possession of and control
over the relevant Collection Account. The Company shall instruct the Bank to
make withdrawals from the relevant Collection Account only if no Event of
Default exists and only for purposes not prohibited by the Common Terms
Agreement, or as otherwise approved in writing by the Collateral Agent.
(b) Not later than ten (10) days after the end of each
calendar month, each Bank shall provide the Collateral Agent and the Company
with reports in form and substance reasonable acceptable to the Company and the
Collateral Agent on (i) the amounts deposited in the respective Collection
Account by the Company in the preceding month, so long as any amounts have been
deposited in, withdrawn from or transferred to or from any of the Collection
Accounts; (ii) accrued amounts existing therein as from its opening; (iii) the
investments of the funds of such Collection Account made during the month
covered by the relevant report and any revenues and gains obtained therewith;
and (iv) the balance existing in such Collection Account, as well as the
releases made during the relevant period, so that the Collateral Agent and the
Company are fully informed and updated in respect of the Collection Accounts, as
well as of the total amounts and Investments subject to the Lien created
hereunder. Each Bank shall maintain such reports reflecting such amounts,
investments and funds described in the preceding sentence held in such
Collection Account and such reports shall at all times be deemed an integral
part hereof as if they were transcribed herein.
10. Rights and Powers of Collateral Agent Upon Event of Default.
(a) If an Event of Default has occurred and is continuing, the
Collateral Agent may, and shall be entitled to instruct each Bank to, without
being required to give any notice (except written notice of such Event of
Default as may be required by mandatory requirements of law), without limitation
and in addition to any and all rights with respect to the Pledged Assets granted
to the Collateral Agent or the Pari Passu Secured Parties under the Common Terms
Agreement and the other Pari Passu Financing Documents:
Company Receivables Pledge Agreement
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(i) personally, or by agents or attorneys,
immediately take possession of the Pledged Assets or any part thereof,
from the Company, any Bank or any other Person who then has possession
of any part thereof with or without notice or process of law;
(ii) instruct the obligor or obligors on or any
counter-parties to any Receivable or agreement, instrument or other
obligation in respect of or relating to the Company, any Bank or the
Pledged Assets to make any payment required by the terms of such
instrument, agreement or obligation directly to the Collateral Agent or
the relevant Bank to be applied to the Secured Obligations in
accordance with the terms of the Common Terms Agreement;
(iii) take possession of the Pledged Assets or any
part thereof by directing the Banks or the Company in writing to
deliver the same to the Collateral Agent at any place or places
designated by the Collateral Agent, it being understood that the Bank's
obligation so to deliver the Pledged Assets is of the essence of this
Receivables Pledge Agreement and that, accordingly, upon application to
a court having jurisdiction, the Collateral Agent shall be entitled to
a judicial order requiring specific performance by the Bank of such
obligation pursuant to Articles 461, 621 and 632 of the Brazilian Civil
Procedure Code;
(iv) withdraw any and all cash and liquidate any and
all Investments in the Collection Accounts and apply such cash, the
liquidation proceeds of Investments and other cash, if any, then held
in the Collection Accounts to the Secured Obligations in accordance
with the terms of the Common Terms Agreement; and
(v) sell, assign or otherwise liquidate the Pledged
Assets or any part thereof at public or private sale, for cash, upon
credit or for future delivery, and at such prices as the Collateral
Agent may deem satisfactory and take possession of the proceeds of any
such sale or liquidation and apply the same to the Secured Obligations
in accordance with the terms of the Common Terms Agreement.
(b) Promptly after the cessation of an Event of Default, the
Collateral Agent shall send written notice of such cessation to each Bank and
each such Bank shall immediately and conclusively rely on such notice in
determining whether to act pursuant to the instructions it receives from the
Company with respect to the Collection Account.
11. Remedies. Without prejudice to the foregoing provisions, upon the
occurrence and during the continuation of an Event of Default, the Collateral
Agent is hereby irrevocably authorized and entitled to, dispose of, collect,
receive, appropriate and/or realize upon the Pledged Assets (or any part
thereof) and may forthwith sell, assign, give option or options to purchase or
otherwise dispose of and deliver the Pledged Assets
Company Receivables Pledge Agreement
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or any part thereof at such price and upon such terms and conditions as it may
deem appropriate, irrespective of any prior or subsequent notice to the Company,
in accordance with the provisions set forth in Article 774, Item III, of the
Brazilian Civil Code, and Article 277 of the Brazilian Commercial Code, and
apply the proceeds thus received for payment of the Secured Obligations. Any
notice by the Collateral Agent that an Event of Default has occurred and is
continuing or has ceased shall be conclusive as against all third parties.
Without limitation, upon the occurrence and during the continuation of an Event
of Default, the Collateral Agent shall be entitled to instruct obligors of the
Company under the Pledged Assets to make any payment required by such Pledged
Asset directly to the Collateral Agent, to be applied to the Secured Obligations
as provided in the Common Terms Agreement. Upon the occurrence of an event which
with the passage of time would become an Event of Default the Company shall
provide the Collateral Agent, upon the Collateral Agent's request with the
addresses of all obligors with respect to the Pledged Assets. The Company hereby
irrevocably appoints the Collateral Agent as attorney-in-fact, and for such
purpose has executed and delivered to the Collateral Agent on the date hereof a
power-of-attorney substantially in the form of Exhibit 3. The Company agrees to
deliver an equivalent power-of-attorney to each successor Collateral Agent. For
the purposes hereof, it is hereby agreed and understood that the proceeds of any
such sale shall be applied in accordance with the terms of the Common Terms
Agreement and (b) in the event of any deficiency of the proceeds of any such
sale, the Company shall remain liable for the payment of the corresponding
balance.
12. Amendments, Etc. with Respect to the Secured Obligations.
The Company shall remain obligated hereunder, and the Pledged
Assets shall remain subject to the security interests granted hereby, at all
times until termination of this Receivables Pledge Agreement pursuant to Section
15, notwithstanding that, without limitation and without any reservation of
rights against the Company, and without notice to or further assent by the
Company:
(a) any demand for payment of any of the Secured Obligations
made by any Pari Passu Secured Party is rescinded by such Pari Passu Secured
Party in accordance with the terms of the respective Pari Passu Financing
Agreement, or Article 9 of the Common Terms Agreement and any Other Pari Passu
Financing Document;
(b) the Common Terms Agreement, the Note Purchase Agreements,
the Notes and any Other Pari Passu Financing Document may be amended, modified
or supplemented, in whole or part, in accordance with the terms of such
agreement; and
(c) any guaranty, right of offset or other collateral security
at any time held by the Collateral Agent for the benefit of the Pari Passu
Secured Parties for the payment of the Secured Obligations may be sold,
exchanged, waived, surrendered or released.
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178
13. Certain Waivers by the Company. Neither the Collateral Agent nor
any Pari Passu Secured Party shall have any obligation to protect, secure,
perfect or insure any other Lien at any time held by it as security for the
Secured Obligations or any property subject thereto. The Company waives any and
all notice of the creation, renewal, extension or accrual of any of the Secured
Obligations and notice of, or proof of reliance by, the Collateral Agent or any
Pari Passu Secured Party upon this Receivables Pledge Agreement; each of the
Secured Obligations shall conclusively be deemed to have been created,
contracted or incurred in reliance upon this Receivables Pledge Agreement; and
all dealings between the Company, on the one hand, and the Collateral Agent and
the Pari Passu Secured Parties, on the other, shall likewise be conclusively
presumed to have been had or consummated in reliance upon this Receivables
Pledge Agreement. The Company waives diligence, presentment, protest, demand for
payment and notice of default or nonpayment to or upon the Company with respect
to the Secured Obligations.
14. Pursuit of Rights and Remedies against the Company. When pursuing
its rights and remedies hereunder against the Company, the Collateral Agent may,
but shall be under no obligation to, pursue such rights and remedies as it may
have against any third party or against any collateral security for or Guaranty
of the Secured Obligations or any right of offset with respect thereto, and any
failure by the Collateral Agent to pursue such other rights or remedies or to
collect any payments from such third party or to realize upon any such
collateral security or Guaranty or to exercise any such right of offset, or any
release of such third party or of any such collateral security, Guaranty or
right of offset, shall not relieve the Company of any liability hereunder, and
shall not impair or affect the rights and remedies, whether express, implied or
available as a matter of law, of the Collateral Agent or the Pari Passu Secured
Parties.
15. Termination and Release. When the Secured Obligations have been
indefeasibly satisfied in full, the Notes are no longer outstanding and no other
amount is then outstanding or owing to any Pari Passu Secured Party under the
Notes, the Note Purchase Agreements, the Common Terms Agreement and any other
Pari Passu Financing Document and all Pari Passu Commitments have terminated,
then, and only then, shall this Receivables Pledge Agreement and the security
interests created hereby be released and this Receivables Pledge Agreement shall
terminate, at the Company's expense; otherwise, this Receivables Pledge
Agreement and the security interests created hereby shall remain in full force
and effect. No release of this Receivables Pledge Agreement, or of the Lien
created and evidenced hereby, shall be valid unless executed by the Collateral
Agent. The Collateral Agent, upon the Company's request, at the Company's
expense and to the extent authorized to do so by Article 7 of the Common Terms
Agreement and in accordance with this Section 15, shall execute and deliver to
the Company all documents reasonably necessary to evidence such release. To the
fullest extent permitted by Applicable Law, this Receivables Pledge Agreement
shall continue to be effective or be reinstated, as the case may be, if at any
time any amount received by the Collateral Agent or any other Pari Passu
Company Receivables Pledge Agreement
Page 11 of 26
179
Secured Party in respect of the Secured Obligations is rescinded or must
otherwise be restored or returned by the Collateral Agent or such Pari Passu
Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Company or upon the appointment of any intervenor or
conservator of, or agent or similar official for, the Company or any part of its
assets, or otherwise, all as though such payments had not been made.
16. Resignation or Removal of Bank. Any Bank may resign at any time by
giving at least thirty (30) days' prior written notice thereof to the Collateral
Agent and the Company, and may be removed at any time with or without cause by
the Company, or upon the occurrence and during the continuation of an Event of
Default (as evidenced by a written notice from the Collateral Agent to such
Bank) by the Collateral Agent. Upon any such resignation or removal, the Company
shall have the right to appoint a successor Bank subject to prior approval of
any such successor Bank by the Collateral Agent (which approval shall not be
unreasonably withheld). If no successor Bank shall have been so appointed by the
Company and shall have accepted its appointment within thirty (30) days after
the resignation or removal of the retiring Bank, the Collateral Agent shall have
the right to appoint a successor Bank. Upon the acceptance of its appointment as
bank, the successor Bank shall thereupon succeed to and be vested with all the
rights, powers, privileges and duties of the retiring Bank and the retiring Bank
shall be discharged from its duties and obligations under this Receivables
Pledge Agreement.
17. Waivers and Amendments. Notwithstanding any provisions of this
Receivables Pledge Agreement, no amendment of any provision of this Receivables
Pledge Agreement (including any waiver or consent relating thereto) shall be
effective unless the same shall have been consented to and signed in accordance
with Section 9.8 of the Common Terms Agreement.
18. Severability. If any provision of this Receivables Pledge Agreement
shall be held to be invalid, illegal or unenforceable under Applicable Law in
any jurisdiction, such provision shall be ineffective only to the extent of such
invalidity, illegality or unenforceability, and shall not affect any other
provisions hereof or the validity, legality or enforceability of such provision
in any other jurisdiction. Where provisions of any Applicable Law resulting in
such prohibition or unenforceability may be waived they are hereby waived by the
Company, each Bank and the Collateral Agent to the full extent permitted by
Applicable Law so that this Receivables Pledge Agreement shall be deemed a valid
and binding agreement, and the security interest created hereby shall constitute
a continuing first priority Lien on and perfected first priority security
interest in the Pledged Assets, in each case enforceable against the Company in
accordance with its terms.
19. Authority of the Collateral Agent. The Company acknowledges that
the rights and responsibilities of the Collateral Agent under this Receivables
Pledge Agreement with respect to any action taken by the Collateral Agent or the
exercise or non-exercise by the
Company Receivables Pledge Agreement
Page 12 of 26
180
Collateral Agent of any option, request, judgment or other right or remedy
provided for herein or resulting or arising out of this Receivables Pledge
Agreement shall, as between the Collateral Agent and the other Pari Passu
Secured Parties, be governed by the Pari Passu Financing Documents and by such
other agreements with respect thereto as may exist from time to time among them,
but, as between the Collateral Agent and the Company, the Collateral Agent shall
be conclusively presumed to be acting as agent for the Pari Passu Secured
Parties with full and valid authority so to act or refrain from acting, and the
Company shall be under no obligation or entitlement to make any inquiry
respecting such authority.
20. Complete Agreement; Successors and Assigns; Third-Party
Beneficiaries. This Receivables Pledge Agreement is intended by the parties as
the final expression of their agreement regarding the subject matter hereof and
as a complete and exclusive statement of the terms and conditions of such
agreement. This Receivables Pledge Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns.
All Pari Passu Secured Parties that are not signatories to this Receivables
Pledge Agreement are intended to be third-party beneficiaries of this
Receivables Pledge Agreement. Otherwise, there are no third-party beneficiaries
of this Receivables Pledge Agreement.
21. Waiver of Immunity. To the extent that the Company has or hereafter
may be entitled to claim or may acquire, for itself or any of the Pledged
Assets, any immunity from suit, jurisdiction of any court or from any legal
process (whether through service of notice, attachment prior to judgment,
attachment in aid of execution, or otherwise) with respect to itself or its
property, it hereby irrevocably waives such immunity in respect of its
obligations hereunder to the extent permitted by Applicable Law.
22. GOVERNING LAW; JURISDICTION. THIS RECEIVABLES PLEDGE AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS
OF BRAZIL. THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE
JURISDICTION OF THE COURTS SITTING IN THE CITY OF RIO DE JANEIRO, BRAZIL, IN ANY
ACTION OR PROCEEDING TO RESOLVE ANY DISPUTE OR CONTROVERSY RELATED TO OR ARISING
FROM THIS RECEIVABLES PLEDGE AGREEMENT AND THE PARTIES HERETO IRREVOCABLY AGREE
THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH COURTS.
23. No Duty on Agent's Part. The powers conferred on the Collateral
Agent hereunder are solely to protect the Collateral Agent's and the Pari Passu
Secured Parties' interests in the Pledged Assets and shall not impose any duty
upon the Collateral Agent to exercise or on the Pari Passu Secured Parties to
cause the Collateral Agent to exercise any such powers. The Collateral Agent
shall be accountable only for amounts that it actually receives as a result of
the exercise of such powers, and neither the Collateral Agent nor any
Company Receivables Pledge Agreement
Page 13 of 26
181
Pari Passu Secured Party nor any of its respective officers, directors,
employees or agents shall be responsible to the Company for any act or failure
to act hereunder except to the extent otherwise provided in Section 7.2 of the
Common Terms Agreement.
24. Notices. All notices and other communications under this
Receivables Pledge Agreement shall be in writing and shall be personally
delivered or sent by prepaid courier, by overnight, registered or certified mail
(postage prepaid), or by facsimile, and shall be deemed given when received by
the intended recipient thereof. Unless otherwise specified in a notice sent or
delivered in accordance with Section 10.4 of the Common Terms Agreement, all
notices and other communications shall be given to the parties hereto at their
respective addresses (or to their respective facsimile numbers) indicated in
Schedule 1.1(a) of the Common Terms Agreement (in the case of the Collateral
Agent), in Schedule 10.4 of the Common Terms Agreement (in the case of the
Company) or in the respective Deposit Account Agreement (in the case of any
Bank).
25. Survival of Agreements, Representations and Warranties. All
agreements, representations and warranties made herein shall survive the
execution and delivery of this Receivables Pledge Agreement and the closing and
shall continue as valid and enforceable agreements, representations and
warranties (when made hereunder) until payment and performance of any and all
Secured Obligations. Any investigation at any time made by or on behalf of the
Collateral Agent or the Pari Passu Secured Parties shall not diminish the right
of the Collateral Agent or the Pari Passu Secured Parties to rely thereon.
Company Receivables Pledge Agreement
Page 14 of 26
182
26. Specific Performance. For the purposes hereof, the Collateral Agent
may seek the specific performance of the obligations undertaken herein by the
Company, as provided in Articles 461, 621 and 632 of the Brazilian Civil
Procedure Code.
IN WITNESS WHEREOF, the parties have caused this Company Receivables
Pledge Agreement to be duly executed in the presence of the undersigned
witnesses.
Company:
XXXXXX X.X.
By: By:
------------------------------ --------------------------------
Name: Name:
Title: Title:
Collateral Agent:
LASALLE BANK NATIONAL ASSOCIATION
By: By:
------------------------------ --------------------------------
Name: Name:
Title: Title:
Witnesses:
--------------------------------- -----------------------------------
Name: Name:
ID: ID:
Company Receivables Pledge Agreement
Page 15 of 26
183
EXHIBIT 1
LIST OF RECEIVABLES
NONE.
Company Receivables Pledge Agreement
Page 16 of 26
184
EXHIBIT 2
LIST OF BANKS AND COLLECTION ACCOUNTS
----------------------------------------------------------------------------------------------------------
Bank Branch Account number Branch Address
----------------------------------------------------------------------------------------------------------
Unibanco 0300 [***] Xxx Xxxxxxxxxx 00,
00(X)xxxxx,
xxxxxx Xxx xx Xxxxxxx
----------------------------------------------------------------------------------------------------------
Unibanco 0300 [***] Xxx Xxxxxxxxxx 00,
00(X)xxxxx,
xxxxxx Xxx xx Xxxxxxx
----------------------------------------------------------------------------------------------------------
Banco Real 0403 [***] Xxxxxxx Xxx Xxxxxx, 00,
0(X)xxxxx,
xxxxxx Xxx xx Janeiro
----------------------------------------------------------------------------------------------------------
Bradesco 0026 - 4 [***] Xxx 0(0)xx Xxxxx, 00/00
0(X)xxxxx,
xxxxxx Xxx xx Xxxxxxx
----------------------------------------------------------------------------------------------------------
Banco Itau 0911 [***] Praca Pio X, 99,
8(O)andar,
centro Rio de Janeiro
----------------------------------------------------------------------------------------------------------
Citibank 003 [***] Xxx xx Xxxxxxxxxx, 000,
00(X)xxxxx,
xxxxxx Xxx xx Xxxxxxx
----------------------------------------------------------------------------------------------------------
Banco do Brasil 1755 - 8 [***] Xxx Xxxxx Xxxx, 000,
0(X)xxxxx,
xxxxxx Xxx xx Xxxxxxx
----------------------------------------------------------------------------------------------------------
ABN-AMRO 0104 [***] Xxx xx Xxxxxxx, 000,
0(X)xxxxx,
xxxxxx Xxx xx Xxxxxxx
----------------------------------------------------------------------------------------------------------
Caixa Economica Federal 0202 [***] Xxx Xxxxx x Xxxxxx, 00
Xxxxx xx Xxxxxxxxxx,
Rio de Janeiro
----------------------------------------------------------------------------------------------------------
[*] 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.
Company Receivables Pledge Agreement
Page 17 of 26
185
EXHIBIT 3
FORM OF
POWER OF ATTORNEY
By this Power of Attorney, Xxxxxx X.X., a company (sociedade anonima)
duly organized and existing in accordance with the laws of the Federative
Republic of Brazil, with its head office in the City of Rio de Janeiro, State of
Rio de Janeiro, at Xxxxxxx Xxxxxxxxx xx Xxxxx, 000, 00(0) andar, enrolled in the
Legal Entities National List of the Ministry of Finance (C.N.P.J./M.F.) under
nr. 02.730.101/0001-43, herein represented in accordance with its By-laws (the
"Appointer"), irrevocably constitutes and appoints LaSalle Bank National
Association, a financial institution duly organized and existing under the laws
of the United States of America (the "Collateral Agent") as its attorney-in-fact
to act in its name and place, to the fullest extent permitted by law and in
accordance with the terms of the Receivables Pledge Agreement (as defined
below), to do and perform all and every act and thing whatsoever necessary or
desirable, in connection with the Company Receivables Pledge Agreement dated as
of December 17, 1999, entered into by and between the Appointer and the
Collateral Agent (for the benefit of the Pari Passu Secured Parties referred to
therein) (as amended, supplemented or otherwise modified from time to time, the
"Receivables Pledge Agreement") including, without limitation:
(a) upon the occurrence and during the continuation of an
Event of Default, to dispose of, collect, receive, appropriate, withdraw,
transfer and/or realize upon the Pledged Assets (or any part thereof) and
forthwith sell, assign, give option or options to purchase or otherwise dispose
of and deliver the Pledged Assets or any part thereof at such prices and upon
such terms and conditions as it may deem appropriate, irrespective of any prior
or subsequent notice to the Appointer, in accordance with the provisions set
forth in Article 774, Item III, of the Brazilian Civil Code and apply the
proceeds thus received for the payment of the Secured Obligations, being vested
with all necessary powers incidental thereto, including, without limitation, the
power and authority to (i) instruct obligors of the Company to make payments
required by such Pledged Assets directly to the Collateral Agent to be applied
to the Secured Obligations as provided in the Common Terms Agreement and (ii)
purchase foreign currency and make all remittances abroad, to sign any necessary
foreign exchange contract with financial institutions in Brazil that may be
required to make such remittances and to represent the Appointer before the
Central Bank and any other Brazilian Governmental Authority when necessary to
accomplish the purposes of the Receivables Pledge Agreement;
(b) upon the occurrence and during the continuation of an
Event of Default, to take all necessary actions and to execute any instrument
before any Governmental
Company Receivables Pledge Agreement
Page 18 of 26
186
Authority in the case of a public sale of Pledged Assets (as defined in the
Receivables Pledge Agreement) in accordance with the terms and conditions set
forth in the Receivables Pledge Agreement; and
(c) upon the occurrence and during the continuation of an
Event of Default, to take any action and to execute any instrument consistent
with the terms of the Receivables Pledge Agreement as it may deem necessary or
advisable to accomplish the purposes of the Receivables Pledge Agreement.
Any notice by the Collateral Agent that an Event of Default has
occurred and is continuing or has ceased shall be conclusive as against the
Banks and all other third parties.
Capitalized terms used, but not defined herein, shall have the meaning
ascribed to them in the Receivables Pledge Agreement.
The powers granted herein are in addition to the powers granted by the
Appointer to the Collateral Agent in the Receivables Pledge Agreement and do not
cancel or revoke any of such powers.
This power of attorney shall be irrevocable, valid and effective until
the Receivables Pledge Agreement has been terminated in accordance with its
terms.
Company Receivables Pledge Agreement
Page 19 of 26
187
Any successor Collateral Agent shall automatically succeed to the
rights of the Collateral Agent hereunder.
IN WITNESS WHEREOF, the Appointer has caused its duly authorized
representatives to execute this power of attorney on December 17, 1999.
Appointer:
XXXXXX X.X.
By: By:
------------------------------ --------------------------------
Name: Name:
Title: Title:
Company Receivables Pledge Agreement
Page 20 of 26
188
EXHIBIT 4
FORM OF
DEPOSIT ACCOUNT AGREEMENT
To
[BANK]
Attn.: Mr. [o]
Re: Company Receivables Pledge Agreement, dated as of December 17,
1999 (the "Receivables Pledge Agreement"), entered into by and
between Xxxxxx X.X. (the "Company") and LaSalle Bank National
Association (the "Collateral Agent").
Dear Sirs:
Please be advised that, pursuant to the Receivables Pledge Agreement
referenced above, all credit rights of the Company for any and all funds and
investments (the "Funds") from time to time held or deposited in our account nr.
[o] with branch nr. [o] with your institution (the "Collection Account") have
been pledged in favor of the Collateral Agent. Capitalized terms used but not
defined herein shall have the same meanings set forth in the Receivables Pledge
Agreement.
The Company hereby irrevocably instructs you to, upon the occurrence
and during the continuation of an Event of Default under the Receivables Pledge
Agreement, as shall be evidenced by a written notice to you by the Collateral
Agent (irrespective of any notice to the contrary from the Company), (i) pay
over and transfer upon a written request from the Collateral Agent any and all
Funds to or to the order of the Collateral Agent pursuant to the instructions
contained in such written request and (ii) act as a "Bank" (as defined in the
Receivables Pledge Agreement) pursuant to the instructions of the Collateral
Agent with respect to any and all matters relating to the Collection Account,
including, without limitation, the segregation of the Funds in other separate
account(s) and the direction of the investments to be made with the Funds; in
each case in accordance with the terms and conditions of the Receivables Pledge
Agreement. For such purposes, please find attached a
Company Receivables Pledge Agreement
Page 21 of 26
189
copy of the Receivables Pledge Agreement, together with a sworn translation
thereof into Portuguese.
Promptly after the cessation of an Event of Default, the
Collateral Agent shall send written notice of such cessation to you and you
shall immediately and conclusively rely on such notice in determining whether to
act pursuant to the instructions you receive from the Company with respect to
the Collection Account.
Company Receivables Pledge Agreement
Page 22 of 26
190
Upon your execution and return of a counterpart of this letter to us,
with a copy to the Collateral Agent, you shall (i) undertake the
responsibilities in respect of the Collection Account and the Funds deposited or
to be deposited therein in accordance with the terms and conditions set forth in
the Receivables Pledge Agreement and (ii) be bound by all provisions, terms and
conditions of the Receivables Pledge Agreement as if you were an original party
thereto. This Deposit Account Agreement and the instructions contained herein
may not be revoked, amended or modified without the written consent of the
Collateral Agent.
Yours truly,
Company
XXXXXX X.X.
By: By:
------------------------------ --------------------------------
Name: Name:
Title: Title:
Agreed and acknowledged:
[BANK]
By: By:
------------------------------ --------------------------------
Name: Name:
Title: Title:
Copy to:
LaSalle Bank National Association
000 X. XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxx
Company Receivables Pledge Agreement
Page 23 of 26
191
EXHIBIT 5
FORM OF
AMENDMENT TO COMPANY RECEIVABLES PLEDGE AGREEMENT
This [o] Amendment to the Company Receivables Pledge Agreement
(hereinafter referred to as this "Amendment") is made as of [o], by and between:
(a) Xxxxxx X.X., a company (sociedade anonima) duly organized
and existing in accordance with the laws of the Federative Republic of Brazil,
with its head office in the City of Rio de Janeiro, State of Rio de Janeiro, at
Xxxxxxx Xxxxxxxxx xx Xxxxx, 000, 00(0)xxxxx, enrolled in the Legal Entities
National List of the Ministry of Finance (C.N.P.J./M.F.) under nr.
02.730.101/0001-43, herein represented in accordance with its Bylaws (the
"Company"); and
(b) LaSalle Bank National Association, a financial institution
duly organized and existing under the laws of the United States of America, with
its offices at 000 X. XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx, represented
herein by its duly authorized representative, as identified and qualified in the
signature pages hereof acting as the Collateral Agent for the Pari Passu Secured
Parties (in such capacity, together with its successors in such capacity, the
"Collateral Agent");
WHEREAS, on December 17, 1999, the parties hereto entered into a
Company Receivables Pledge Agreement (the "Receivables Pledge Agreement")
registered with the Registry of Titles and Deeds of the City of [o] under number
[o];
WHEREAS, the parties hereto have agreed to amend the Receivables Pledge
Agreement in order to [grant to the Collateral Agent, for the ratable benefit of
the Pari Passu Secured Parties, a perfected first priority security interest in
the Pledged Assets]/[extend the pledge created thereunder to secure its
Obligations assumed under the [Pari Passu Financing Documents] dated [o] entered
into between the Company and [o];
WHEREAS, pursuant to the terms hereof, the parties hereto desire to
amend the Receivables Pledge Agreement;
NOW, THEREFORE, the parties hereto enter into Amendment No. ___ to the
Receivables Pledge Agreement under the following terms and conditions:
1. Capitalized terms used and not otherwise defined herein
shall have the meaning ascribed to them in the Receivables Pledge Agreement.
Company Receivables Pledge Agreement
Page 24 of 26
192
2. The Company hereby [pledges, and transfers any additional
Pledged Assets contained in the new Exhibit [o] attached hereto (and which were
not contained in the original Exhibit [o] of the Receivables Pledge Agreement)
to the Collateral Agent, for the benefit of the Secured Parties]/[extends the
pledge created under the Receivables Pledge Agreement to secure its Obligations
under the Other Pari Passu Financing Documents listed in Exhibit [o] hereto, and
for purposes hereof and of the Receivables Pledge Agreement, each of the Other
Pari Passu Creditor Parties listed in Exhibit [o] shall be a Pari Passu Secured
Party under the Receivables Pledge Agreement].
3. The Company hereby represents and warrants to and in favor
of the Collateral Agent, for the benefit of the Pari Passu Secured Parties that:
(a) The execution, delivery, performance and [grant
of the security interest/extension of the pledge created under the
Receivables Pledge Agreement] pursuant to this Amendment have been duly
authorized by all necessary corporate action on the part of the
Company. This Amendment has been duly executed and delivered by the
Company. The execution, delivery, performance and [grant of the
security interest/extension of the pledge created under the Receivables
Pledge Agreement] do not and will not (i) violate any provision of any
charter or other organizational documents of the Company, (ii) conflict
with, result in a breach of, or constitute (or, with the giving of
notice or lapse of time or both, would constitute) a default under, or,
except for consents and approvals that have been obtained and are in
full force and effect, require the approval or consent of any Person
pursuant to, any material Contractual Obligation of the Company
(including any provisions of any Material Contract or any contracts
relating to Debt to which the Company is a party), or violate any
Applicable Law binding on the Company, or (iii) result in the creation
or imposition of any Lien upon any asset of the Company or any income
or profits therefrom, except for the Lien [created/extended] hereby in
favor of the Collateral Agent, for the ratable benefit of the Secured
Parties, under the Receivables Pledge Agreement.
(b) This Amendment and the Receivables Pledge
Agreement, as amended hereby, each constitutes a legal, valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, and the security interest [created/extended]
hereby will, upon completion of the registrations required by Section 5
hereof, constitute the legal, valid and perfected first priority
security interest in the Pledged Assets, enforceable in accordance with
its terms against all creditors of the Company, in each case, except as
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to creditors' rights
generally.
4. All provisions of the Receivables Pledge Agreement not amended or
modified herein shall remain in full force and effect in accordance with the
terms of the Receivables Pledge Agreement.
Company Receivables Pledge Agreement
Page 25 of 26
193
5. The Company, at its own cost and expense, shall, within fifteen (15)
days after the execution of this Amendment, register this Amendment, together
with a sworn translation hereof, with the competent Registry of Titles and Deeds
(Cartorio de Registro de Titulos e Documentos) in Brazil and deliver to the
Collateral Agent evidence of such registration in form and substance reasonably
satisfactory to the Collateral Agent.
IN WITNESS WHEREOF, the parties have caused this Amendment No.___ to
the Company Receivables Pledge Agreement to be duly executed in the presence of
the undersigned witnesses.
Company:
XXXXXX X.X.
By: By:
------------------------------ --------------------------------
Name: Name:
Title: Title:
Collateral Agent:
LASALLE BANK NATIONAL ASSOCIATION
By: By:
------------------------------ --------------------------------
Name: Name:
Title: Title:
Witnesses:
-------------------------------- -----------------------------------
Name: Name:
Company Receivables Pledge Agreement
Page 26 of 26
194
EXHIBIT C-1C
FORM OF
COMPANY CONTRACTS PLEDGE AGREEMENT
This Pledge Agreement (the "Contracts Pledge Agreement") is made on
December 17, 1999 by and among:
(a) Xxxxxx X.X., a company (sociedade anonima) duly organized
and existing in accordance with the laws of the Federative Republic of Brazil
("Brazil"), with its head office in the City of Rio de Janeiro, State of Rio de
Janeiro, at Xxxxxxx Xxxxxxxxx xx Xxxxx, 000, 00(0)xxxxx, enrolled in Legal
Entities National List of the Ministry of Finance (C.N.P.J./M.F.) under nr.
02.730.101/0001-43, herein represented in accordance with its Bylaws (the
"Company"); and
(b) LaSalle Bank National Association, a financial institution
duly organized and existing under the laws of the United States of America, with
its registered office at 000 X. XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx,
represented herein by its duly authorized representative, as identified and
qualified in the signature pages hereof, acting as collateral agent for the Pari
Passu Secured Parties (as defined below) (in such capacity, together with its
successors in such capacity, the "Collateral Agent").
W I T N E S S E T H
WHEREAS, the Company has entered into (i) that certain Secured Note
Purchase Agreement dated as of December 13, 1999 (as amended from time to time,
the "Nortel Note Purchase Agreement") with ABN AMRO Bank N.V. ("ABN AMRO"), as
administrative agent (in such capacity, the "Nortel Facility Agent"), Nortel
Networks Corporation ("Nortel"), as initial Purchaser, and the other Purchasers
from time to time party thereto; (ii) that certain Secured Note Purchase
Agreement dated as of December 13, 1999 (as amended from time to time, the
"Qualcomm/Ericsson Note Purchase Agreement") with ABN AMRO, as administrative
agent (in such capacity, the "Qualcomm/Ericsson Facility Agent"), ABN AMRO and
Xxxxxxxx Xxxxxxxxxxxx, as initial Purchasers, the other Purchasers from time to
time party thereto and Telefonaktiebolaget LM Ericsson (publ.) ("Ericsson"),
individually; and (iii) that certain Secured Note Purchase Agreement dated as of
December 13, 1999 (as amended from time to time, the "Xxxxxx Note Purchase
Agreement" and, together with the Nortel Note Purchase Agreement and the
Qualcomm/Ericsson Note Purchase Agreement, the "Note Purchase Agreements") with
Xxxxxx Corporation ("Xxxxxx"), as administrative agent (in such capacity, the
"Xxxxxx Facility Agent" and, together with the Nortel Facility Agent and the
Qualcomm/Ericsson Facility Agent, the "Initial Facility Agents"), Xxxxxx, as
initial Purchaser, and the other Purchasers
Company Contracts Pledge Agreement
195
from time to time party thereto (all such Initial Facility Agents, initial
Purchasers, other Purchasers, and the Collateral Agent, the "Secured Parties",
and each a "Secured Party");
WHEREAS, the Company may, after the date hereof, enter into other note
purchase or loan agreements (the "Other Pari Passu Financing Agreements" and,
together with the Note Purchase Agreements the "Pari Passu Financing
Agreements") with other facility agents (the "Other Pari Passu Facility
Agents"), and purchasers or lenders (the "Other Pari Passu Creditors") pursuant
to which other notes are issued or loans extended that rank on a pari passu
basis with and are secured by the same collateral as the Notes and the Note
Purchase Agreements;
WHEREAS, the Company may, pursuant to the terms and conditions set
forth in the Common Terms Agreement, after the date hereof, enter into Interest
Hedge Agreements with a Pari Passu Creditor, any Affiliate of a Pari Passu
Creditor or any other financial institution reasonably acceptable to the
Collateral Agent, that acts as the counterparty in any Interest Hedge Agreement
in respect of the Pari Passu Obligations ("Swap Lender" and, together with the
Secured Parties and the Other Pari Passu Creditor Parties, the "Pari Passu
Secured Parties");
WHEREAS, in connection with the Note Purchase Agreements, HoldCo, the
Company, the Initial Facility Agents, the Collateral Agent and the Other Pari
Passu Facility Agents have entered or will enter, as the case may be, into that
certain Common Terms Agreement dated as of December 13, 1999 (as amended from
time to time, the "Common Terms Agreement") which sets forth certain common
terms, conditions and covenants relating to the Pari Passu Financing Agreements;
and
WHEREAS, it is a covenant entered into in connection with the purchase
of the Notes by the Pari Passu Secured Parties from the Company under the Note
Purchase Agreements that the Company shall have executed and delivered this
Contracts Pledge Agreement to the Collateral Agent for the ratable benefit of
the Pari Passu Secured Parties.
NOW, THEREFORE, in consideration of the foregoing premises and mutual
covenants contained herein, the parties hereto agree as follows:
1. Defined Terms.
(a) Capitalized terms used and not otherwise defined in this
Contracts Pledge Agreement are used herein with the same meanings ascribed to
them in the Common Terms Agreement. All terms defined in this Contracts Pledge
Agreement in the singular shall have the same meanings when used in the plural
and vice versa. The words "hereof," "herein," and "hereunder" and words of
similar import when used in this Contracts Pledge Agreement shall, unless the
context otherwise requires, refer to this Contracts Pledge Agreement as a whole
and not to any particular provision of this
Company Contracts Pledge Agreement
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Contracts Pledge Agreement, and section, subsection, schedule and exhibit
references are to this Contracts Pledge Agreement unless otherwise specified.
All terms defined in this Contracts Pledge Agreement shall have the defined
meanings contained herein when used in any certificate or other document made or
delivered pursuant hereto.
(b) Except as otherwise stated herein, all terms and
conditions of the Note Purchase Agreements, the Notes, the Common Terms
Agreement (including Article 1 and, except for Sections 10.8, 10.9, 10.19 and
10.20, Article 10 thereof), and, when executed and delivered, the Other Pari
Passu Financing Documents, shall fully and automatically apply to this Contracts
Pledge Agreement, mutatis mutandis, and shall be deemed as an integral part
hereof, as if they were transcribed herein.
2. PLEDGE; GRANT OF SECURITY INTEREST.
(a) In order to secure the full and prompt payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of all obligations and liabilities of the Company under each of the
Note Purchase Agreements and any Note issued thereunder and of all obligations
and liabilities of the Company to the Pari Passu Secured Parties, which may
arise under, out of, or in connection with, the Note Purchase Agreements, the
Common Terms Agreement, or any other Pari Passu Financing Document, whether on
account of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses or otherwise (including, without limitation, all fees and
disbursements of counsel to the Pari Passu Secured Parties that are required to
be paid by the Company pursuant to the terms of the Note Purchase Agreements,
the Common Terms Agreement or any other Pari Passu Financing Document)
(collectively, the "Obligations"), and all obligations of the Company to the
Collateral Agent or the Pari Passu Secured Parties created under this Contracts
Pledge Agreement (such obligations together with the Obligations being
collectively referred to as the "Secured Obligations"), which, for the purposes
of Article 761 of the Brazilian Civil Code, are estimated to be in (but
expressly not limited to) the principal amount of up to US$1,019,000,000,
equivalent on the date hereof to R$1,875,673,300, with original final maturity
on July 1, 2012 (subject to mandatory and optional repurchase and acceleration
thereunder) or as otherwise provided for in the Note Purchase Agreements, the
Common Terms Agreement or the Notes, the Company hereby pledges to the
Collateral Agent for the benefit of the Pari Passu Secured Parties, pursuant to
the provisions of Articles 271 to 279 of the Brazilian Commercial Code and
Article 768 et seq. of the Brazilian Civil Code:
(i) all its rights to the trademarks and other
Intellectual Property Rights described and identified in Exhibit 1
hereto (the "Intellectual Property");
(ii) all its rights to the loan agreements, promissory
notes and other Intercompany Debt described in Exhibit 2 hereto (the
"Intercompany Debt");
Company Contracts Pledge Agreement
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(iii) all its rights arising from or under the contracts
described and identified in Exhibit 3 hereto (the "Material
Contracts");
(iv) subject to Section 2(b) below, all its rights to the
Mirror Authorizations and other Government Approvals described in
Exhibit 4 hereto (the "Authorizations");
(v) the other intangible assets and rights described in
Exhibit 5 hereto (the "Intangibles");
(vi) all its rights to any proceeds from the sale or
transfer of the Authorizations and all its rights to any
indemnification or compensation from any Governmental Authority in
connection with the Authorizations (the "Other Rights"); and
(vii) all proceeds and products of the property referred
to in clauses (i) through (vi), including (A) whatever is now or
hereafter received upon the sale, exchange, disposition or operation
of any such property, and (B) any proceeds or products of items in
clause (A) (together with the Other Rights, the Intellectual
Property, the Material Contracts, the Intercompany Debt, the
Authorizations and the Intangibles, the "Pledged Assets").
(b) The pledge of the Authorizations shall be effective and
enforceable on the date a transfer or pledge thereof becomes permissible under
applicable Brazilian rules and regulations and, to the extent required by law,
upon receipt of an approval by the Governmental Authority granting the
Authorizations.
3. Restriction on Transfer and Encumbrance. The Pledged Assets may not
be sold or transferred by the Company or by any other means whatsoever become
subject to any Liens (except for those created hereby and those permitted under
the Common Terms Agreement) until termination of this Contracts Pledge Agreement
pursuant to Section 11 hereof.
4. Registration of the Pledge of the Pledged Assets. The Company shall,
within fifteen (15) days after the execution of this Contracts Pledge Agreement
or any Amendment (as defined below) entered into with respect to Section 6,
register this Contracts Pledge Agreement, or such Amendment, as applicable,
together with its sworn translation into the Portuguese language, in the
competent Registry of Titles and Deeds (Cartorio de Registro de Titulos e
Documentos) in Brazil and, with respect to the Intellectual Property, in the
National Institute of Industrial Property (Instituto Nacional de Propriedade
Industrial), and deliver to the Collateral Agent evidence of such registrations
in form and substance reasonably satisfactory to the Collateral Agent. All
expenses
Company Contracts Pledge Agreement
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incurred in connection with such sworn translation and with such registrations
shall be paid by the Company.
5. Representations and Warranties. The Company hereby repeats herein as
of the date hereof all of the representations and warranties set forth in
Article 3 of the Common Terms Agreement, except for the representation and
warranty set forth in the third sentence of Section 3.2 of the Common Terms
Agreement. In addition, the Company hereby represents and warrants to the
Collateral Agent, for the benefit of the Pari Passu Secured Parties, as follows:
(a) This Contracts Pledge Agreement constitutes a legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, and, the security interest created hereby will, upon
completion of the registrations required by Section 4 hereof, constitute a
legal, valid and perfected first priority security interest in the Pledged
Assets, enforceable in accordance with its terms against all creditors of the
Company, in each case, as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to creditors' rights
generally, provided, however, that any security interest to be created hereby in
any Pledged Asset which has not been issued to, or received or acquired by, the
Company on or before the date hereof shall be deemed to have been created,
perfected and to be in full force only (i) after such Pledged Asset is issued
to, or received or acquired by, the Company and (ii) on the date when the Lien
of the Collateral Agent, for the ratable benefit of the Pari Passu Secured
Parties thereon, shall have been registered as provided in Section 4 hereof or
as may be in the future required by Brazilian law; and provided further that,
the pledge created hereby will secure the obligations of the Company to the
Other Pari Passu Secured Parties only upon the effectiveness of the Other Pari
Passu Financing Documents and the registrations required by Section 4 hereof.
6. Covenants. The Company shall enter into amendments to this Contracts
Pledge Agreement with the Collateral Agent, substantially in the form of Exhibit
7 hereto (each an "Amendment"), (a) as and when required by Section 4.10 of the
Common Terms Agreement, in order to extend the Lien created hereby to the
relevant Pledged Assets (which shall be then subject to all terms and conditions
provided herein) promptly after title to additional Pledged Assets is acquired
by the Company, all pursuant to the provisions of the Common Terms Agreement,
and (b) upon the entering by the Company into any Other Pari Passu Financing
Documents (or any Interest Hedge Agreement in respect of the Notes), in order to
extend the Lien created hereby to the other Pari Passu Secured Parties party
thereto to secure the obligations assumed by the Company thereunder; and the
Company shall make all filings and registrations and obtain all authorizations
necessary to create a first priority, perfected security interest, to the extent
permitted by Brazilian law and regulations, in the Pledged Assets to which the
security interest created hereby was extended in favor of the Collateral Agent,
for the benefit of the Pari Passu Secured Parties, and take such further actions
as the Collateral Agent may
Company Contracts Pledge Agreement
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reasonably request for the purposes of obtaining or preserving the full benefits
of this Contracts Pledge Agreement and of the rights and powers herein granted
with respect to all such after-acquired Pledged Assets and in favor of all
subsequent Pari Passu Secured Parties. The Company shall provide the Collateral
Agent with evidence of the registration of each such Amendment in the
appropriate Registry of Titles and Deeds in Brazil (Cartorio de Registro de
Titulos e Documentos) and the National Institute of Industrial Property
(Instituto Nacional de Propiedade Industrial), if applicable, within fifteen
(15) days after execution of each such Amendment.
7. Remedies. Without prejudice to the foregoing provisions, upon the
occurrence and during the continuation of an Event of Default, the Collateral
Agent is hereby irrevocably authorized and entitled to dispose of, collect,
receive, appropriate and/or realize upon the Pledged Assets (or any part
thereof) and may forthwith sell, assign, give option or options to purchase or
otherwise dispose of and deliver the Pledged Assets or any part thereof at such
price and upon such terms and conditions as it may deem appropriate,
irrespective of any prior or subsequent notice to the Company, in accordance
with the provisions set forth in Article 774, Item III, of the Brazilian Civil
Code, and Article 277 of the Brazilian Commercial Code, and apply the proceeds
thus received for the payment of the Secured Obligations. Any notice by the
Collateral Agent that an Event of Default has occurred and is continuing or has
ceased shall be conclusive as against all third parties. Without limitation,
upon the occurrence and during the continuation of an Event of Default, the
Collateral Agent shall be entitled to instruct obligors of the Company under the
Pledged Assets (including the other party to the Material Contracts and the
borrowers under the Intercompany Debt) to make any payments required by such
Pledged Asset directly to the Collateral Agent, to be applied to the Secured
Obligations as provided in the Common Terms Agreement. The Company hereby
irrevocably appoints the Collateral Agent as its attorney-in-fact, and for such
purpose it has executed and delivered to the Collateral Agent on the date hereof
a power-of-attorney substantially in the form of Exhibit 6 hereto. The Company
agrees to deliver an equivalent power-of-attorney to each successor Collateral
Agent. For the purposes hereof, it is hereby agreed and understood that (a) the
proceeds of any such sale shall be applied in accordance with the terms of the
Common Terms Agreement, and (b) in the event of any deficiency of the proceeds
of any such sale or other realization, the Company shall remain liable for the
payment of the corresponding balance of the Secured Obligations.
8. Amendments, Etc., with Respect to the Secured Obligations. The
Company shall remain obligated hereunder, and the Pledged Assets shall remain
subject to the security interests granted hereby, at all times until termination
of this Contracts Pledge Agreement pursuant to Section 11 hereof notwithstanding
that, without limitation and without any reservation of rights against the
Company, and without notice to or further assent by the Company:
Company Contracts Pledge Agreement
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200
(a) any demand for payment of any of the Secured Obligations
made by any Pari Passu Secured Party may be rescinded by such Pari Passu Secured
Party in accordance with the terms of the respective Pari Passu Financing
Agreement, or Article 9 of the Common Terms Agreement or any Other Pari Passu
Financing Document;
(b) the Common Terms Agreement, the Note Purchase Agreements,
the Notes and any Other Pari Passu Financing Document may be amended, modified
or supplemented, in whole or part, in accordance with the terms of such
agreement; and
(c) any guaranty, right of offset or other collateral security
at any time held by the Collateral Agent for the benefit of the Pari Passu
Secured Parties for the payment of the Secured Obligations may be sold,
exchanged, waived, surrendered or released.
9. Certain Waivers by the Company. Neither the Collateral Agent nor any
Pari Passu Secured Party shall have any obligation to protect, secure, perfect
or insure any other Lien at any time held by it as security for the Secured
Obligations or any property subject thereto. The Company waives any and all
notice of the creation, renewal, extension or accrual of any of the Secured
Obligations and notice of, or proof of reliance by, the Collateral Agent or any
Pari Passu Secured Party upon this Contracts Pledge Agreement; each of the
Secured Obligations shall conclusively be deemed to have been created,
contracted or incurred in reliance upon this Contracts Pledge Agreement; and all
dealings between the Company, on the one hand, and the Collateral Agent and the
Pari Passu Secured Parties, on the other, shall likewise be conclusively
presumed to have been had or consummated in reliance upon this Contracts Pledge
Agreement. The Company waives diligence, presentment, protest, demand for
payment and notice of default or nonpayment to or upon the Company with respect
to the Secured Obligations.
10. Pursuit of Rights and Remedies Against the Company. When pursuing
its rights and remedies hereunder against the Company, the Collateral Agent may,
but shall be under no obligation to, pursue such rights and remedies as it may
have against any third party or against any collateral security for or Guaranty
of the Secured Obligations or any right of offset with respect thereto, and any
failure by the Collateral Agent to pursue such other rights or remedies or to
collect any payments from such third party or to realize upon any such
collateral security or Guaranty or to exercise any such right of offset, or any
release of such third party or of any such collateral security, Guaranty or
right of offset, shall not relieve the Company of any liability hereunder, and
shall not impair or affect the rights and remedies, whether express, implied or
available as a matter of law, of the Collateral Agent or the Pari Passu Secured
Parties.
11. Termination and Release. When the Secured Obligations have been
indefeasibly satisfied in full, the Notes are no longer outstanding and no other
amount is then outstanding or owing to any Pari Passu Secured Party under the
Notes, the Note
COMPANY CONTRACTS PLEDGE AGREEMENT
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Purchase Agreements, the Common Terms Agreement and any other Pari Passu
Financing Document, and all Pari Passu Commitments have terminated, then, and
only then, shall this Contracts Pledge Agreement and the security interests
created hereby be released and this Contracts Pledge Agreement shall terminate,
at the Company's expense; otherwise, this Contracts Pledge Agreement and the
security interests created hereby shall remain in full force and effect. No
release of this Contracts Pledge Agreement, or of the Lien created and evidenced
hereby, shall be valid unless executed by the Collateral Agent. The Collateral
Agent, upon the Company's request, at the Company's expense and to the extent
authorized to do so by Article 7 of the Common Terms Agreement and in accordance
with this Section 11, shall execute and deliver to the Company all documents
reasonably necessary to evidence such release. To the fullest extent permitted
by Applicable Law, this Contracts Pledge Agreement shall continue to be
effective or shall be reinstated, as the case may be, if at any time any amount
received by the Collateral Agent or any other Pari Passu Secured Party in
respect of the Secured Obligations is rescinded or must otherwise be restored or
returned by the Collateral Agent or such Pari Passu Secured Party upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Company or upon the appointment of any intervenor or conservator of, or agent or
similar official for, the Company or any part of its assets, or otherwise, all
as though such payments had not been made.
12. Waivers and Amendments. Notwithstanding any provisions of this
Contracts Pledge Agreement, no amendment of any provision of this Contracts
Pledge Agreement (including any waiver or consent relating thereto) shall be
effective unless the same shall have been consented to and signed in accordance
with Section 9.8 of the Common Terms Agreement.
13. Severability. If any provision of this Contracts Pledge Agreement
shall be held to be invalid, illegal or unenforceable under Applicable Law in
any jurisdiction, such provision shall be ineffective only to the extent of such
invalidity, illegality or unenforceability, and shall not affect any other
provisions hereof or the validity, legality or enforceability of such provision
in any other jurisdiction. Where provisions of any Applicable Law resulting in
such prohibition or unenforceability may be waived they are hereby waived by the
Company and the Collateral Agent to the full extent permitted by Applicable Law
so that this Contracts Pledge Agreement shall be deemed a valid and binding
agreement, and the security interest created hereby shall constitute a
continuing first priority Lien on and perfected first priority security interest
in the Pledged Assets, in each case enforceable against the Company in
accordance with its terms.
14. Authority of the Collateral Agent. The Company acknowledges that
the rights and responsibilities of the Collateral Agent under this Contracts
Pledge Agreement with respect to any action taken by the Collateral Agent or the
exercise or non-exercise by the Collateral Agent of any option, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Contracts Pledge Agreement shall, as between the
COMPANY CONTRACTS PLEDGE AGREEMENT
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202
Collateral Agent and the other Pari Passu Secured Parties, be governed by the
Pari Passu Financing Documents and by such other agreements with respect thereto
as may exist from time to time among them, but, as between the Collateral Agent
and the Company, the Collateral Agent shall be conclusively presumed to be
acting as agent for the Pari Passu Secured Parties with full and valid authority
so to act or refrain from acting, and the Company shall be under no obligation
or entitlement to make any inquiry respecting such authority.
15. Complete Agreement; Successors and Assigns; Third-Party
Beneficiaries. This Contracts Pledge Agreement is intended by the parties as the
final expression of their agreement regarding the subject matter hereof and as a
complete and exclusive statement of the terms and conditions of such agreement.
This Contracts Pledge Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns. All Pari
Passu Secured Parties that are not signatories to this Contracts Pledge
Agreement are intended to be third-party beneficiaries of this Contracts Pledge
Agreement. Otherwise, there are no third-party beneficiaries of this Contracts
Pledge Agreement.
16. Waiver of Immunity. To the extent that the Company has or hereafter
may be entitled to claim or may acquire, for itself or any of the Pledged
Assets, any immunity from suit, jurisdiction of any court or from any legal
process (whether through service of notice, attachment prior to judgment,
attachment in aid of execution, or otherwise) with respect to itself or its
property, it hereby irrevocably waives such immunity in respect of its
obligations hereunder to the extent permitted by Applicable Law.
17. GOVERNING LAW; JURISDICTION. THIS CONTRACTS PLEDGE AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
BRAZIL. THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION
OF THE COURTS SITTING IN THE CITY OF RIO DE JANEIRO, BRAZIL, IN ANY ACTION OR
PROCEEDING TO RESOLVE ANY DISPUTE OR CONTROVERSY RELATED TO OR ARISING FROM THIS
CONTRACTS PLEDGE AGREEMENT AND THE PARTIES HERETO IRREVOCABLY AGREE THAT ALL
CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN
SUCH COURTS.
18. No Duty on Agent's Part. The powers conferred on the Collateral
Agent hereunder are solely to protect the Collateral Agent's and the Pari Passu
Secured Parties' interests in the Pledged Assets and shall not impose any duty
upon the Collateral Agent to exercise or on the Pari Passu Secured Parties to
cause the Collateral Agent to exercise any such powers. The Collateral Agent
shall be accountable only for amounts that it actually receives as a result of
the exercise of such powers, and neither the Collateral Agent nor any Pari Passu
Secured Party nor any of its respective officers, directors, employees or agents
COMPANY CONTRACTS PLEDGE AGREEMENT
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shall be responsible to the Company for any act or failure to act hereunder
except to the extent otherwise provided in Section 7.2 of the Common Terms
Agreement.
19. Notices. All notices and other communications under this Contracts
Pledge Agreement shall be in writing and shall be personally delivered or sent
by prepaid courier, by overnight, registered or certified mail (postage
prepaid), or by facsimile, and shall be deemed given when received by the
intended recipient thereof. Unless otherwise specified in a notice sent or
delivered in accordance with Section 10.4 of the Common Terms Agreement, all
notices and other communications shall be given to the parties hereto at their
respective addresses (or to their respective facsimile numbers) indicated in
Schedule 1.1(a) of the Common Terms Agreement (in the case of the Collateral
Agent) or in Schedule 10.4 of the Common Terms Agreement (in the case of the
Company).
20. Survival of Agreements, Representations and Warranties. All
agreements, representations and warranties made herein shall survive the
execution and delivery of this Contracts Pledge Agreement and the closing and
shall continue as valid and enforceable agreements, representations and
warranties (when made hereunder) until payment and performance of any and all
Secured Obligations. Any investigation at any time made by or on behalf of the
Collateral Agent or the Pari Passu Secured Parties shall not diminish the right
of the Collateral Agent or the Pari Passu Secured Parties to rely thereon.
COMPANY CONTRACTS PLEDGE AGREEMENT
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21. Specific Performance. For the purposes hereof, the Collateral Agent
may seek the specific performance of the obligations undertaken herein by the
Company, as provided in Articles 461, 621 and 632 of the Brazilian Civil
Procedure Code.
IN WITNESS WHEREOF, the parties have caused this Company Contracts
Pledge Agreement to be duly executed in the presence of the undersigned
witnesses.
Company:
XXXXXX X.X.
By By:
-------------------------- -------------------------
Name: Name:
Title: Title:
Collateral Agent:
LASALLE BANK NATIONAL ASSOCIATION
By: By:
-------------------------- -------------------------
Name: Name:
Title: Title:
Witnesses:
-------------------------- -------------------------
Name: Name:
ID: ID:
COMPANY CONTRACTS PLEDGE AGREEMENT
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EXHIBIT 1
LIST OF INTELLECTUAL PROPERTY
1. 821920162 filed on August 23, 1999 for the word trademark Vesper in Local
Class 09.35 (communications apparatus in general and their components).
2. 821920170 filed on August 23, 1999 for the word trademark Vesper in Local
Class 38.10 (communications, publicity and advertising services).
3. 822085364 filed on October 7, 1999 for the composite trademark Vesper
(colored stars) in Local Class 09.35 (communications apparatus in general and
their components).
4. 822085372 filed on October 7, 1999 for the composite trademark Vesper in
Local Class 38.10 (communications publicity and advertising services).
5. 821866508 filed on July 28, 1999 for the word trademark Xxxxxxx in Local
Class 09.35 (communications apparatus in general and their components).
6. 821866494 filed on July 28, 1999 for the word trademark Xxxxxxx in Local
Class 38.10 (communications, publicity and advertising services).
7. 821866486 filed on July 28, 1999 for the word trademark Atimo in Local Class
09.35 (communications apparatus in general and their components).
8. 821866478 filed on July 28, 1999 for the word trademark Atimo in Local Class
38.10 (communications, publicity and advertising services).
COMPANY CONTRACTS PLEDGE AGREEMENT
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EXHIBIT 2
LIST OF INTERCOMPANY DEBT
1. Intercompany Debt in the approximate principal amount of $183,659.09
as of September 30, 1999 owing to the Company from Vesper Sao Paulo S.A.
2. Intercompany Debt in the approximate principal amount of $120.00 as
of September 30, 1999 owing to the Company from Vesper Holding S.A.
3. Intercompany Debt in the approximate principal amount of $295,224.04
owing to the Company from Qualcomm do Brasil Ltda.
COMPANY CONTRACTS PLEDGE AGREEMENT
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EXHIBIT 3
LIST OF MATERIAL CONTRACTS
1) Secondment Agreement with Xxxx Canada International, Inc. dated August
15, 1999 (including that certain Sideletter relating thereto dated as of
August 15, 1999).
2) Technical Services Agreement with Xxxx Canada International, Inc. dated
May 27, 1999 (including that certain Sideletter relating thereto dated as
of May 27, 1999).
3) Know-How Transfer and Technical Services Agreement with Xxxx Canada
International, Inc. dated August 15, 1999 (including that certain
Sideletter related thereto dated as of August 15, 1999, the "Know-How
Agreement").
4) Shareholder Agreement dated as of February 4, 1999 relating to Vesper
Holding S.A. and the Company.
5) Interconnection Agreement with Empresa Brasileira de Telecomunicacoes
S.A. dated June 22, 1999.
6) Interconnection Agreement with Telemar S.A. dated June 22, 1999.
7) Interconnection Agreement with Intelig Telecomunicacoes Ltda. (formerly
known as Bonari Holding Ltda.) dated August 5, 1999.
8) Telecommunication Services Agreement (leased lines) with MetroRED
Telecomunicacoes Ltda. dated August 12, 1999.
9) Leased Lines Agreement with Empresa Brasileira de Telecomunicacoes S.A.
dated August 18, 1999.
10) Leased Lines Agreement with Engeredes-Engenharia de Redes S.A. dated
August 12, 1999.
11) Equipment Supply Agreement, dated as of December 3, 1999, between the
Company and Motorola Do Brazil Ltda.
12) Amended Memorandum of Understanding with CGI Telecom dated October 15,
1999.
Company Contracts Pledge Agreement
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13) Capital Contribution Agreement dated December 13, 1999 by and among
VESPER HOLDING S.A., a Brazilian sociedade anonima; XXXXXX X.X. a
Brazilian sociedade anonima; XXXX CANADA INTERNATIONAL (BRAZIL TELECOM I)
LIMITED, a British Virgin Islands Company; QUALCOMM DO BRASIL LTDA., a
Brazilian limitada; VELOCOM CAYMAN BRASIL HOLDINGS, a Cayman Islands
company; and the Collateral Agent (as defined in the Common Terms
Agreement) on behalf of the Secured Parties (as defined in the Common
Terms Agreement).
14) Lease Agreement, dated May 7, 1999, between Fundacao Vale do Rio Doce de
Seguridade Social - Valia and Mirror S.A., regarding Rooms 801, 802, 803,
806, at Xx Xxxxxxxxxx Xxxxxx 0000, Xxxxxx Xxxx - Xxx xx Xxxxxxx - XX.
15) Lease Agreement, dated March 11, 1999, between Caixa Previdencia dos
Funcionarios do Banco do Brasil - Previ and Canbra Telefoncia S.A.,
regarding 24th and 25th floors at Av. Republica do Xxxxx x(xxxxxx) 000,
Xxxxxx - Xxx xx Xxxxxxx - XX.
16) Lease Agreement, dated June 16, 1999, between Caixa Previdencia dos
Funcionarios do Banco do Brasil - Previ and Mirror S.A., regarding 00xx
xxxxx xx Xx. Xxxxxxxxx do Xxxxx x(xxxxxx) 000, Xxxxxx - Xxx xx Xxxxxxx -
XX.
17) Lease Agreement, dated June 21, 1999 between Caixa Previdencia dos
Funcionarios do Banco do Brasil - Previ and Mirror S.A., regarding 00xx
xxxxx xx Xx. Xxxxxxxxx do Xxxxx x(xxxxxx) 000, Xxxxxx - Xxx xx Xxxxxxx -
XX.
18) Lease Agreement, dated May 14, 1999 between Caixa Previdencia dos
Funcionarios do Banco do Brasil - Previ and Mirror S.A., regarding 00xx
xxxxx xx Xx. Xxxxxxxxx do Xxxxx x(xxxxxx) 000, Xxxxxx - Xxx xx Xxxxxxx -
XX.
19) Lease Agreement, dated June 10, 1999 between Xxxxxxxx Xxxxxxxxxx xx
Xxxxxxx e Xxxxx Xxxxxxxxx Ogioni xx Xxxxxxx and Mirror S.A., regarding
Av. Rio Xxxxxx n(degree) 1 Bairro Santa Lucia, Vitoria - Espirito Santo.
20) Lease Agreement, dated June 15, 1999 between Fundacao Vale do Rio Doce de
Seguridade Social - Valia and Mirror S.A., regarding Rooms 1.402 e 1.403,
at Xx Xxxxxxxxxx Xxxxxx 0000, Xxxxxx Xxxx - Xxx xx Xxxxxxx - XX.
21) Lease Agreement, dated July 30, 1999 between Fundacao Vale do Rio Doce de
Seguridade Social - Valia and Mirror S.A., regarding Rooms 1.401 and
1.404, at Xx Xxxxxxxxxx Xxxxxx 0000, Xxxxxx Xxxx - Xxx xx Xxxxxxx - XX.
Company Contracts Pledge Agreement
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22) Lease Agreement, dated August 31, 1999 between Fundacao Vale do Rio Doce
de Seguridade Social - Valia and Mirror S.A., regarding Rooms 1.405, at
Xx Xxxxxxxxxx Xxxxxx 0000, Xxxxxx Xxxx - Xxx xx Xxxxxxx - XX.
23) Lease Agreement, dated July 20, 1999 between Cosmo Shop Comercio e
Servicos Ltda. and Mirror S.A., regarding Xxxxxxx Xxxxxx x(xxxxxx) 0000,
Xxx xx Xxxxxxx - XX.
24) Lease Agreement, dated July 20, 1999 between Xxxxxxxx Xxxxxxxx xx
Xxxxxxxx e Xxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx and Mirror S.A., regarding Xxx
Xxxxxxxx Xxxxxxx x(xxxxxx) 0000, Xxxxxx - Xxxxx.
00) Lease Agreement, dated August 9, 1999 between Empresa Brasileira de
Telecomunicacoes S.A. - Embratel and Mirror S.A., regarding Xxx Xxxxxxxx
Xxxxx x(xxxxxx) 0.00, 0xx xxxxx - Xxxx Horizonte - MG, Xxx xx Xxxxx
x(xxxxxx) 000, 0xx xxxxx xxxx xxxxxxxx 0 and 2nd floor from building 0,
Xxxxxxxx - X.X., xxx Xx. Xxxxxx xx Xxxxxx n(degree) 1554, 2nd floor from
building 1, Fortaleza - CE.
26) Lease Agreement, dated June 18, 1999 between Francisco Xxxxx xx Xxxxx e
Xxxxxxx Xxxxxxxxx xx Xxxxx and Mirror S.A., regarding Xx. Xxxxxxx Xxxxxx
x(xxxxxx) 000 - X, Xxx Xxxxx - Xxxxxxx.
Company Contracts Pledge Agreement
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EXHIBIT 4
LIST OF AUTHORIZATIONS
1. Instrument of Authorization for Operation of a Switched Fixed
Telephone Service for the mode LOCAL issued by the Agencia Nacional de
Telecomunicacoes (National Telecommunications Agency) ("Anatel") to the Company,
under its prior name "Canbra Telefonica S.A." on February 4, 1999.
2. Instrument of Authorization for Operation of a Switched Fixed
Telephone Service for the mode NATIONAL LONG DISTANCE OF INTRA-REGIONAL SCOPE,
issued by Anatel to the Company, under its prior name "Canbra Telefonica S.A."
on February 4, 1999.
3. License number 4.840 for packet switched network services, License
number 4.839 for circuit switched network services, License number 4.841 for
dedicated line services License number 4.842 for special services of audio and
License number 4.843 for video signal retransmission, issued by Anatel to the
Company on September 23, 1999.
Company Contracts Pledge Agreement
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EXHIBIT 5
LIST OF OTHER INTANGIBLES
Surety Bond issued by Chubb do Brasil Cia de Seguros, Policy Number: [***].
[*] 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.
Company Contracts Pledge Agreement
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EXHIBIT 6
FORM OF POWER OF ATTORNEY
By this Power of Attorney, Xxxxxx X.X. (the "Appointer"), a company
(sociedade anonima) duly organized and existing in accordance with the laws of
the Federative Republic of Brazil, with its head office in the City of Rio de
Janeiro, State of Rio de Janeiro, at Xxxxxxx Xxxxxxxxx xx Xxxxx, 000, 00(0)
andar, enrolled in the Legal Entities National List of the Ministry of Finance
(C.N.P.J./M.F.) under nr. 02730101/001-43, herein represented in accordance with
its Bylaws, irrevocably constitutes and appoints LaSalle Bank National
Association, a financial institution duly organized and existing under the laws
of the United States of America (the "Collateral Agent") as its attorney-in-fact
to act in its name and place, to the fullest extent permitted by law and in
accordance with the terms of the Contracts Pledge Agreement (as defined below),
to do and perform all and every act and thing whatsoever necessary or desirable,
in connection with the Company Contracts Pledge Agreement dated as of December
17, 1999, entered into by and among the Appointer and the Collateral Agent (for
the benefit of the Pari Passu Secured Parties referred to therein), (as amended,
supplemented or otherwise modified from time to time, the "Contracts Pledge
Agreement") including, without limitation:
(a) upon the occurrence and during the continuation of an
Event of Default, to dispose of, collect, receive, appropriate, withdraw,
transfer and/or realize upon the Pledged Assets (or any part thereof) and
forthwith sell, assign, give option or options to purchase or otherwise dispose
of and deliver the Pledged Assets or any part thereof at such prices and upon
such terms and conditions as the Collateral Agent may deem appropriate,
irrespective of any prior or subsequent notice to the Appointer, in accordance
with the provisions set forth in Article 774, Item III, of the Brazilian Civil
Code, apply the proceeds thus received for the payment of the Secured
Obligations being vested with all necessary powers incidental thereto,
including, without limitation, the power and authority to (i) instruct obligors
of the Company under the Pledged Assets (including the other party to the
Material Contracts and the borrowers under the Intercompany Debt) to make any
payments required by such Pledged Asset directly to the Collateral Agent, to be
applied to the Secured Obligations as provided in the Common Terms Agreement,
and (ii) purchase foreign currency and make all remittances abroad, to sign any
necessary foreign exchange contract with financial institutions in Brazil that
may be required to make such remittances and to represent the Appointer before
the Central Bank and any other Brazilian governmental authority when necessary
to accomplish the purposes of the Contracts Pledge Agreement;
(b) upon the occurrence and during the continuation of an
Event of Default, to take all necessary actions and to execute any instrument
before any Governmental Authority in the case of a public sale of the Pledged
Assets (as defined in the Contracts Pledge Agreement) in accordance with the
terms and conditions set out therein; and
Company Contracts Pledge Agreement
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(c) upon the occurrence and during the continuation of an
Event of Default, to take any action and to execute any instrument consistent
with the terms of the Contracts Pledge Agreement as it may deem necessary or
advisable to accomplish the purposes of the Contracts Pledge Agreement.
Any notice by the Collateral Agent that an Event of Default has
occurred and is continuing or has ceased shall be conclusive as against all
third parties.
Capitalized terms used, but not defined herein shall have the meaning
ascribed to them in the Contracts Pledge Agreement.
The powers granted herein are in addition to the powers granted by the
Appointer to the Collateral Agent in the Contracts Pledge Agreement and do not
cancel or revoke any of such powers.
This power of attorney shall be irrevocable, valid and effective until
the Contracts Pledge Agreement has terminated in accordance with its terms.
Company Contracts Pledge Agreement
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Any successor Collateral Agent shall automatically succeed to the
rights of the Collateral Agent hereunder.
IN WITNESS WHEREOF, the Appointer has caused its duly authorized
representatives to execute this power of attorney on December 17, 1999.
Appointer:
XXXXXX X.X.
By: By:
------------------------------ --------------------------------
Name: Name:
Title: Title:
Company Contracts Pledge Agreement
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EXHIBIT 7
FORM OF
AMENDMENT TO COMPANY CONTRACTS PLEDGE AGREEMENT
This [o] Amendment to the Pledge Agreement (hereinafter referred to as
this "Amendment") is made as of [o], 1999 by and among:
(a) Xxxxxx X.X., a company (sociedade anonima) duly organized and
existing in accordance with the laws of the Federative Republic of Brazil, with
its head office in the City of Rio de Janeiro, State of Rio de Janeiro, at
Xxxxxxx Xxxxxxxxx xx Xxxxx, 000, 00(0) andar, enrolled in the Legal Entities
National List of the Ministry of Finance (C.N.P.J./M.F.) under nr.
02.730.101/0001-43, herein represented in accordance with its Bylaws (the
"Company"); and
(b) LaSalle Bank National Association, a financial institution duly
organized and existing under the laws of the United States of America, with its
offices at 000 X. XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx, represented
herein by its duly authorized representative, as identified and qualified in the
signature pages hereof acting as Collateral Agent for the Pari Passu Secured
Parties (the "Collateral Agent").
WHEREAS, on December 17, 1999, the parties hereto entered into a
Company Contracts Pledge Agreement (the "Contracts Pledge Agreement"),
registered with the Registry of Titles and Deeds of the City of [o] under number
[o] and with the National Institute of Intellectual Property under number [o];
WHEREAS, the parties have agreed to amend the Contracts Pledge
Agreement in order to [grant to the Collateral Agent, for the ratable benefit of
the Pari Passu Secured Parties, to the extent permitted under applicable
Brazilian law and regulations, a perfected first priority security interest in
the Pledged Assets]/[extend the pledge created thereunder to secure its
Obligations assumed under the [Pari Passu Financing Document] dated [o] entered
into between the Company and [o]];
WHEREAS, pursuant to the terms hereof, the parties hereto desire to
amend the Contracts Pledge Agreement;
NOW, THEREFORE, the parties hereto enter into this Amendment No. __ to
the Company Contracts Pledge Agreement under the following terms and conditions:
1. Capitalized terms used and not otherwise defined herein
shall have the meaning ascribed to them in the Contracts Pledge Agreement.
COMPANY CONTRACTS PLEDGE AGREEMENT
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2. The Company hereby [pledges, and transfers any additional
Pledged Assets contained in the new Exhibit [o] attached hereto (and which were
not contained in the original Exhibit [o] to the Contracts Pledge Agreement) to
the Collateral Agent, for the benefit of the Pari Passu Secured
Parties]/[extends the pledge created under the Contract Pledge Agreement to
secure its Obligations under the Other Pari Passu Financing Documents listed in
Exhibit [o] hereto, and for the purposes hereof and of the Contracts Pledge
Agreement, each of the Other Pari Passu Creditor Parties listed in Exhibit [o]
shall be a Pari Passu Secured Party under the Contracts Pledge Agreement].
3. The Company hereby represents and warrants to and in favor
of the Collateral Agent, for the benefit of the Pari Passu Secured Parties that:
(a) The execution, delivery, performance and [grant
of the security interest/extension of the pledge created under the
Contracts Pledge Agreement] pursuant to this Amendment have been duly
authorized by all necessary corporate action on the part of the
Company. This Amendment has been duly executed and delivered by the
Company. The execution, delivery, performance and [grant of the
security interest/extension of the pledge created under the Contracts
Pledge Agreement] do not and will not (i) violate any provision of any
charter or other organizational documents of the Company, (ii) conflict
with, result in a breach of, or constitute (or, with the giving of
notice or lapse of time or both, would constitute) a default under, or,
except for consents and approvals that have been obtained and are in
full force and effect, require the approval or consent of any Person
pursuant to, any material Contractual Obligation of the Company
(including any provisions of any Material Contract or any contracts
relating to Debt to which the Company is a party), or violate any
Applicable Law binding on the Company, or (iii) result in the creation
or imposition of any Lien upon any asset of the Company or any income
or profits therefrom, except for the Lien [created/extended] hereby in
favor of the Collateral Agent, for the ratable benefit of the Secured
Parties, under the Contracts Pledge Agreement.
(b) This Amendment and the Contracts Pledge
Agreement, as amended hereby, each constitutes a legal, valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, and the security interest [created/extended]
hereby will, upon completion of the registrations required by Section 5
hereof, constitute a legal, valid and perfected first priority security
interest in the Pledged Assets, enforceable in accordance with its
terms against all creditors of the Company, in each case, except as
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to creditors' rights
generally.
Company Contracts Pledge Agreement
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4. All provisions of the Contracts Pledge Agreement not amended or
modified herein shall remain in full force and effect in accordance with the
terms of the Contracts Pledge Agreement.
Company Contracts Pledge Agreement
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218
5. The Company, at its own cost and expense, shall, within fifteen (15)
days after the execution of this Amendment, register this Amendment, together
with a sworn translation hereof, with the competent Registry of Titles and Deeds
(Cartorio de Registro de Titulos e Documentos) and, with respect to the
Intellectual Property, the National Institute of Industrial Property (Instituto
Nacional de Propriedade Industrial) in Brazil and deliver to the Collateral
Agent evidence of such registrations in form and substance reasonably
satisfactory to the Collateral Agent.
IN WITNESS WHEREOF, the parties have caused this Amendment No. __ to
the Company Contracts Pledge Agreement to be duly executed in the presence of
the undersigned witnesses.
Company:
XXXXXX X.X.
By: By:
------------------------------ ---------------------------------
Name: Name:
Title: Title:
Collateral Agent:
LASALLE BANK NATIONAL ASSOCIATION
By: By:
------------------------------ ---------------------------------
Name: Name:
Title: Title:
Witnesses:
--------------------------------- ------------------------------------
Name: Name:
ID: ID:
Company Contracts Pledge Agreement
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EXHIBIT C-1D
CASH COLLATERAL ACCOUNT AND
CASH EQUIVALENTS PLEDGE AGREEMENT
This Cash Collateral Account and Cash Equivalents Pledge Agreement (the
"Cash Collateral Pledge Agreement"), is made on December 17, 1999, by and
between:
(a) Xxxxxx X.X., a company (sociedade anonima) duly organized
and existing in accordance with the laws of the Federative Republic of Brazil
("Brazil"), with its head office in the City of Rio de Janeiro, State of Rio de
Janeiro, at Xxxxxxx Xxxxxxxxx xx Xxxxx, 000, 00(0)xxxxx, enrolled in the Legal
Entities National List of the Ministry of Finance (C.N.P.J./M.F.) under nr.
02.730.101/0001-43, herein represented in accordance with its Bylaws (the
"Company"); and
(b) LaSalle Bank National Association, a financial institution
duly organized and existing under the laws of the United States of America, with
its offices at 000 X. XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx represented
herein by its duly authorized representative, as identified and qualified in the
signature pages hereof, acting as collateral agent for the Pari Passu Secured
Parties (as defined below) (in such capacity, together with its successors in
such capacity, the "Collateral Agent").
W I T N E S S E T H
WHEREAS, the Company has entered into (i) that certain Secured Note
Purchase Agreement dated as of December 13, 1999 (as amended from time to time,
the "Nortel Note Purchase Agreement") with ABN AMRO Bank N.V. ("ABN AMRO"), as
administrative agent (in such capacity, the "Nortel Facility Agent"), Nortel
Networks Corporation ("Nortel"), as initial Purchaser, and the other Purchasers
from time to time party thereto; (ii) that certain Secured Note Purchase
Agreement dated as of December 13, 1999 (as amended from time to time, the
"Qualcomm/Ericsson Note Purchase Agreement") with ABN AMRO, as administrative
agent (in such capacity, the "Qualcomm/Ericsson Facility Agent"), ABN AMRO and
Xxxxxxxx Xxxxxxxxxxxx, as initial Purchasers, the other Purchasers from time to
time party thereto, and Telefonaktiebolaget LM Ericsson (publ.) ("Ericsson"),
individually; and (iii) that certain Secured Note Purchase Agreement dated as of
December 13, 1999 (as amended from time to time, the "Xxxxxx Note Purchase
Agreement" and, together with the Nortel Note Purchase Agreement and the
Qualcomm/Ericsson Note Purchase Agreement, the "Note Purchase Agreements") with
Xxxxxx Corporation ("Xxxxxx"), as administrative agent (in such capacity, the
"Xxxxxx Facility Agent" and, together with the Nortel Facility Agent and the
Qualcomm/Ericsson Facility Agent, the "Initial Facility Agents"), Xxxxxx, as
initial Purchaser, and the other Purchasers from time to time party thereto (all
such Initial Facility Agents, initial Purchasers, other Purchasers, and the
Collateral Agent, the "Secured Parties", and each a "Secured Party");
Cash Collateral and Cash Equivalents Pledge Agreement
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WHEREAS, the Company may, after the date hereof, enter into other note
purchase or loan agreements (the "Other Pari Passu Financing Agreements" and,
together with the Note Purchase Agreements the "Pari Passu Financing
Agreements") with other facility agents (the "Other Pari Passu Facility
Agents"), and purchasers or lenders (the "Other Pari Passu Creditors") pursuant
to which other notes are issued or loans extended that rank on a pari passu
basis with and are secured by the same collateral as the Notes and the Note
Purchase Agreements;
WHEREAS, the Company may, pursuant to the terms and conditions set
forth in the Common Terms Agreement, after the date hereof, enter into Interest
Hedge Agreements with a Pari Passu Creditor, any Affiliate of a Pari Passu
Creditor or any other financial institution reasonably acceptable to the
Collateral Agent, that acts as the counterparty in any Interest Hedge Agreement
in respect of the Pari Passu Obligations ("Swap Lender" and, together with the
Secured Parties and the Other Pari Passu Creditor Parties, the "Pari Passu
Secured Parties");
WHEREAS, in connection with the Note Purchase Agreements, HoldCo, the
Company, the Initial Facility Agents, the Collateral Agent and the Other Pari
Passu Facility Agents have entered or will enter, as the case may be, into that
certain Common Terms Agreement dated as of December 13, 1999 (as amended from
time to time, the "Common Terms Agreement") which sets forth certain common
terms, conditions and covenants relating to the Pari Passu Financing Agreements;
and
WHEREAS, it is a covenant entered into in connection with the purchase
of the Notes by the Secured Parties from the Company under the Note Purchase
Agreements that the Company shall have executed and delivered this Cash
Collateral Pledge Agreement to the Collateral Agent for the ratable benefit of
the Pari Passu Secured Parties.
NOW, THEREFORE, in consideration of the foregoing premises and mutual
covenants contained herein, the parties hereto agree as follows:
1. Defined Terms.
(a) Capitalized terms used and not otherwise defined in this
Cash Collateral Pledge Agreement are used herein with the same meanings ascribed
to them in the Common Terms Agreement. All terms defined in this Cash Collateral
Pledge Agreement in the singular shall have the same meanings when used in the
plural and vice versa. The words "hereof," "herein," and "hereunder" and words
of similar import when used in this Cash Collateral Pledge Agreement shall,
unless the context otherwise requires, refer to this Cash Collateral Pledge
Agreement as a whole and not to any particular provision of this Cash Collateral
Pledge Agreement, and section, subsection, schedule and exhibit references are
to this Cash Collateral Pledge Agreement unless otherwise specified. All terms
defined in this Cash Collateral Pledge Agreement shall have the defined meanings
contained herein when used in any certificate or other document made or
delivered pursuant hereto.
Cash Collateral and Cash Equivalents Pledge Agreement
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(b) Except as otherwise stated herein, all terms and
conditions of the Note Purchase Agreements, the Notes, the Common Terms
Agreement (including Article 1 and, except for Sections 10.8, 10.9, 10.19 and
10.20, Article 10 thereof) and, when executed and delivered, the Other Pari
Passu Financing Documents shall fully and automatically apply to this Cash
Collateral Pledge Agreement, mutatis mutandis, and shall be deemed as an
integral part hereof, as if they were transcribed herein.
2. Pledge; Grant of Security Interest.
(a) In order to secure the full and prompt payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of all obligations and liabilities of the Company under each of the
Note Purchase Agreements and any Note issued thereunder and of all obligations
and liabilities of the Company to the Pari Passu Secured Parties, which may
arise under, out of, or in connection with, the Note Purchase Agreements, the
Common Terms Agreement, or any other Pari Passu Financing Document, whether on
account of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses or otherwise (including, without limitation, all fees and
disbursements of counsel to the Pari Passu Secured Parties that are required to
be paid by the Company pursuant to the terms of the Note Purchase Agreements,
the Common Terms Agreement or any other Pari Passu Financing Document) (the
"Obligations"), and all obligations of the Company to the Collateral Agent or
the Pari Passu Secured Parties created under this Cash Collateral Pledge
Agreement (such obligations together with the Obligations being collectively
referred to as the "Secured Obligations"), which, for the purposes of Article
761 of the Brazilian Civil Code, are estimated to be in (but expressly not
limited to) the principal amount of up to US$1,019,000,000, equivalent on the
date hereof to R$1,875,673,300, with original final maturity on July 1, 2012
(subject to mandatory and optional repurchase and acceleration thereunder) or as
otherwise provided for in the Note Purchase Agreements, the Common Terms
Agreement or the Notes, the Company hereby pledges to the Collateral Agent for
the benefit of the Pari Passu Secured Parties, pursuant to the provisions of
Articles 271 to 279 of the Brazilian Commercial Code and Article 768 et seq. of
the Brazilian Civil Code:
(i) all its credit rights against each financial
institution (each a "Depositary") with respect to the accounts set
forth in Exhibit 1 hereto (each, a "Special Purpose Account"), in
which, to the extent required by Section 5.8 of the Common Terms
Agreement, the Company shall deposit or cause to be deposited all Net
Cash Proceeds of any Asset Sale or Event of Loss or of any Investments
from time to time made with such Net Cash Proceeds, including the
credit balance from time to time of each Special Purpose Account, and
all interest, dividends and other income derived from such balances,
funds and Investments and all moneys and Cash Equivalents held in or
for each such Special Purpose Account;
(ii) all its credit rights against each Depositary
with respect to the accounts set forth in Exhibit 2 hereto (each, an
"Excess Cash Equivalents Account" and,
Cash Collateral and Cash Equivalents Pledge Agreement
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222
together with the Special Purpose Accounts, the "Accounts"), in which,
to the extent required by Section 4.10 of the Common Terms Agreement,
the Company shall deposit or cause to be deposited all excess Cash
Equivalents and Proceeds of the Excess Cash Equivalents Account and any
Investments from time to time made with such Proceeds, including the
credit balance from time to time of each Excess Cash Equivalents
Account, and all interest, dividends and other income derived from such
balances, funds and Investments and all moneys and Cash Equivalents
held in or for each such Excess Cash Equivalents Account;
(iii) all Investments described on Exhibit 3 and all
interest, dividends and other property received, receivable or
otherwise distributed in respect of such Investments and deposited in
any Account;
(iv) all quotas of any investment funds (fundo de
investimento financeiro exclusivo) described on Exhibit 4 (each, a
"Fund") having the non-discretionary exclusive administrator and
manager set forth opposite such fund's name on such Exhibit 4 (each, a
"Fund Administrator") and all interest, dividends and other property
received, receivable or otherwise distributed in respect of such
Investments;
(v) all statements, certificates, instruments or
receipts, whether physical or electronic, evidencing any of the
Accounts, Investments or Funds referred to in clauses (i) through (iv)
(including the reports referred to in Section 9(c) and 12(c) hereof);
and
(vi) to the extent not included in the foregoing, all
proceeds and products of the property referred to in clauses (i)
through (iv), including all interest, dividends, premium and other
income derived from any such funds and investments and all statements,
certificates and instruments representing or evidencing such
Investments and any financial instrument related thereto and whatever
is received upon any collections on, or exchange, sale or other
disposition of any of such property, whether cash or non-cash proceeds,
and any and all other amounts paid or payable under or in connection
with any of the foregoing and any and all documents or instruments
related thereto (the "Proceeds" and together with the property referred
to in clauses (i) through (v), the "Pledged Assets").
(b) Each Account shall be established by the Company as a
special, segregated, restricted and irrevocable cash account (conta vinculada)
with the relevant Depositary, which shall be maintained at all times until the
termination of this Cash Collateral Pledge Agreement in the exclusive possession
and control of such Depositary, and which shall at all times be subject to this
Cash Collateral Pledge Agreement, the Note Purchase Agreements, the Common Terms
Agreements and the other Pari Passu Financing Documents.
Cash Collateral and Cash Equivalents Pledge Agreement
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(c) To the extent required by Section 5.8 of the Common Terms
Agreement, the Company shall deposit or cause to be deposited into a Special
Purpose Account all Net Cash Proceeds of any Asset Sale or Event of Loss. The
Company shall deposit or cause to be deposited all Proceeds of any Special
Purpose Account or of any Investments from time to time contained therein into
such Special Purpose Account.
(d) The Company shall deposit or cause to be deposited all
Proceeds of Investments required to be pledged to the Collateral Agent pursuant
to Section 4.10 of the Common Terms Agreement and any Proceeds of the Excess
Cash Equivalent Account and any Investments from time to time contained therein
into the Excess Cash Equivalents Account.
3. Restriction on Transfer and Encumbrance. The Pledged Assets may not
be sold or transferred by the Company (except as permitted under the Common
Terms Agreement) or by any other means whatsoever become subject to any Liens
(except for those created hereby and those permitted under the Common Terms
Agreement) until this Cash Collateral Pledge Agreement is terminated pursuant to
Section 15 hereof.
4. Registration of the Pledge of the Pledged Assets. The Company shall,
within fifteen (15) days after the execution of this Cash Collateral Pledge
Agreement or any Amendment (as defined below) entered into in accordance with
Section 6, register this Cash Collateral Pledge Agreement or such Amendment,
together with its sworn translation into the Portuguese language, with the
competent Registry of Titles and Deeds (Cartorio de Registro de Titulos e
Documentos) in Brazil and deliver to the Collateral Agent evidence of such
registration in form and substance reasonably satisfactory to the Collateral
Agent. All expenses incurred in connection with such sworn translation and with
such registrations shall be paid by the Company.
5. Representations and Warranties. The Company hereby repeats herein as
of the date hereof all of the representations and warranties set forth in
Article 3 of the Common Terms Agreement, except for the representation and
warranty set forth in the third sentence of Section 3.2 of the Common Terms
Agreement. In addition, the Company hereby represents and warrants to the
Collateral Agent, for the benefit of the Pari Passu Secured Parties, as follows:
(a) This Cash Collateral Pledge Agreement constitutes a legal,
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, and the security interest created hereby will, upon
completion of the registration required by Section 4 hereof, constitute a legal,
valid and perfected first priority security interest in the Pledged Assets,
enforceable in accordance with its terms against all creditors of the Company,
in each case as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to creditors' rights
generally; provided, however, that any security interest to be created hereby in
any Pledged Asset which has not been issued to, or received or acquired by, the
Company on or before the date hereof shall be deemed to have been created,
perfected and to be in full force only (i) after such Pledged Asset is issued
to, or received or acquired by, the Company or the Depositary and (ii) on the
date when the Lien of the Collateral
Cash Collateral and Cash Equivalents Pledge Agreement
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Agent, for the ratable benefit of the Pari Passu Secured Parties thereon, shall
have been registered as provided in Section 4 hereof or as may be in the future
required by Brazilian law; and provided further that, the pledge created hereby
will secure the obligations of the Company to the other Pari Passu Secured
Parties only upon the effectiveness of the Other Pari Passu Financing Agreements
and the registration required by Section 4 hereof.
6. Covenants. The Company shall enter into amendments to this
Cash Collateral Pledge Agreement with the Collateral Agent substantially in the
form of Exhibit 7 hereto (each an "Amendment") (a) upon investment of any funds
contained in any Account (including any investment in or acquisition of quotas
of any Fund), and as and when required by Section 4.10 of the Common Terms
Agreement, in order to extend the Lien created hereby to the relevant Investment
as well as any statements, certificates, instruments, or receipts, either
physical or electronic, evidencing such Investment (which shall then be subject
to all terms and conditions provided herein) promptly after title to such
Investment is acquired by the Company, all pursuant to the provisions of the
Common Terms Agreement, (b) upon opening of any Account when required by Section
4.10 or 5.8 of the Common Terms Agreement, and (c) upon the entering by the
Company into any Other Pari Passu Financing Documents (or any Interest Hedge
Agreement in respect of the Notes), in order to extend the Lien created
hereunder to the other Pari Passu Secured Parties party thereto to secure the
obligations assumed by the Company thereunder; and the Company shall make all
filings and registrations and obtain all authorizations necessary to create a
first priority, perfected security interest in the relevant Pledged Assets to
which the security interest created hereby was extended in favor of the
Collateral Agent, for the benefit of the Pari Passu Secured Parties, and take
such further actions as the Collateral Agent may reasonably request for the
purposes of obtaining or preserving the full benefits of this Cash Collateral
Pledge Agreement and of the rights and powers herein granted with respect to all
such after-acquired Pledged Assets and in favor of all such subsequent Pari
Passu Secured Parties. Each Depositary and each Fund Administrator shall, to the
extent necessary under Brazilian law, include a legend in any such statements,
certificates, instruments or receipts, as appropriate, evidencing that such
invested funds are subject to a Lien in favor of the Collateral Agent hereunder.
The Company shall provide the Collateral Agent with evidence of the registration
of each such Amendment in the appropriate Registry of Titles and Deeds in Brazil
(Cartorio de Registro de Titulos e Documentos) within fifteen (15) days after
the execution of each such Amendment.
7. Appointment and Duties of Depositaries. The Company and each of the
Depositaries appointed from time to time shall execute and deliver to the
Collateral Agent a Deposit Account Agreement substantially in the form of
Exhibit 5 hereto with respect to each Account whereby each Depositary accepts
appointment as depositary pursuant to Section 281 of the Brazilian Commercial
Code of the amounts deposited in the respective Account and shall assume full
responsibility for the safety, control and accurate maintenance and preservation
of the Account specified therein and the funds deposited therein in accordance
with the terms and conditions set forth therein. The Company hereby agrees that
the appointment of the Depositary
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shall be subject to, and further agrees that it shall cause the Depositary to
comply with, the provisions set forth under Title XIV of the Brazilian
Commercial Code, Section 774 of the Brazilian Civil Code and any other
applicable legal provisions under Applicable Law, and all of the terms and
conditions of this Cash Collateral Pledge Agreement, including, without
limitation, the following provisions:
(a) Prior to the occurrence of an Event of Default (as
evidenced by a written notice from the Collateral Agent to each Depositary
irrespective of any notice to the contrary from the Company), the Company shall
cause each Depositary to make investments with funds on deposit ("Investments")
in or otherwise administer the respective Account pursuant to the instructions
of the Company; provided that such Investments are permissible pursuant to the
terms of the Common Terms Agreement. Upon the occurrence and during the
continuation of an Event of Default (as evidenced by a written notice from the
Collateral Agent to each Depositary irrespective of any notice to the contrary
from the Company), the Company shall cause each Depositary to act only pursuant
to the instructions it receives from the Collateral Agent with respect to the
respective Account and the funds on deposit therein or the Investments made with
such funds, the Pledged Assets or any other provision of this Cash Collateral
Pledge Agreement.
(b) The Company and the Collateral Agent hereby vest each
Depositary with full powers to manage and invest the funds deposited in the
relevant Account as directed by the Company (except as expressly otherwise
provided in Section 7(b) above). Nothing contained herein shall, however,
prevent the Collateral Agent upon the occurrence and during the continuation of
an Event of Default (as evidenced by a written notice from the Collateral Agent
to each Depositary irrespective of any notice to the contrary from the Company)
from instructing any Depositary, from time to time, as to the investment of such
funds.
(c) The Company and the Collateral Agent hereby agree that any
such Investment may be liquidated (without regard to maturity date) by the
Depositary or the Collateral Agent whenever necessary to make any distribution
or transfer required by this Cash Collateral Pledge Agreement. Neither any
Depositary nor, except to the extent provided in Section 7.2 of the Common Terms
Agreement, the Collateral Agent shall have any liability for any investment loss
resulting from any such liquidation of Investments.
(d) The Company and the Collateral Agent hereby irrevocably
appoint and constitute each Depositary as their attorney-in-fact pursuant to
Article 1288 et. seq. of the Brazilian Civil Code, granting it special powers
for the specific purpose of maintaining and operating the respective Account,
with powers to invest and transfer the funds from the respective Account as
provided in the Common Terms Agreement or in the other Pari Passu Financing
Documents, being vested with all necessary powers incidental thereto, including,
without limitation, the power and authority to make all remittances abroad in
respect of the Obligations, to sign any necessary foreign exchange contract with
financial institutions in Brazil that may be required to make such remittances
and to represent the Company before the Central Bank. Therefore, as a result of
the powers granted hereby, each Depositary shall act as an
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attorney-in-fact, specifically with respect to the maintenance and operation of
the respective Account and as depositary of the Pledged Assets, as provided
herein.
8. Undertakings With Respect to Each Depositary. During the term of
this Cash Collateral Pledge Agreement, the Company shall cause each Depositary:
(a) To receive any and all amounts that shall be deposited by
or on behalf of the Company in the relevant Account, effect the transfers set
forth herein and carry on its duties for the proper maintenance and preservation
of the funds existing in such Account.
(b) To operate and manage, or permit the operation and
management of, the relevant Account only as authorized by this Cash Collateral
Pledge Agreement.
(c) To insert in its computer systems, mailing documents and
any other system or documents, where required by Applicable Law, a legend
stating that the operation and management of the relevant Account shall be made
in accordance with the terms and conditions of this Cash Collateral Pledge
Agreement.
(d) To invest the funds deposited in the relevant Account only
in accordance with the terms and conditions of this Cash Collateral Pledge
Agreement.
9. Withdrawals and Transfers from Accounts.
(a) The Company shall have no right to withdraw any cash from
the Accounts or otherwise dispose of or transfer any Pledged Assets except as
expressly provided herein and in the Common Terms Agreement. Any withdrawal,
transfer or investment requested by the Company in accordance with the
provisions hereof is expressly understood to be made with the permission of the
relevant Depositary in the exercise of its exclusive possession of and control
over the relevant Account. The Company shall instruct the Depositary to make
withdrawals from the relevant Account only if no Event of Default exists and
only for purposes not prohibited by the Common Terms Agreement, or as otherwise
approved in writing by the Collateral Agent.
(b) The amounts to be transferred from any Special Purpose
Account shall be calculated by the Company and communicated to the relevant
Depositary and the Collateral Agent by the Company in writing at least three (3)
Business Days prior to each date on which a transfer is to be made, which
writing shall state that (i) such transfer is being made in accordance with the
provisions and requirements of the Common Terms Agreement and (ii) no Event of
Default then exists.
(c) Not later than ten (10) days after the end of each
calendar month, the Company shall provide the Collateral Agent with reports in
form and substance reasonably acceptable to the Collateral Agent on (i) the
amounts deposited in the Accounts by the Company during the preceding month, so
long as any amounts have been deposited in, withdrawn from or
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transferred to or from any of the Accounts; (ii) accrued amounts existing
therein as from its opening; (iii) the investments of the funds of each Account
made during the month covered by the relevant report and any revenues and gains
obtained therewith and (iv) the balance existing in each Account, as well as the
releases made during the relevant period, so that the Collateral Agent are fully
informed and updated in respect of the Accounts, as well as of the total amounts
and Investments subject to the Lien created hereunder. The Company shall
maintain such reports reflecting such amounts, investments and funds described
in the preceding sentence held in such Account and such reports shall at all
times be deemed an integral part hereof as if they were transcribed herein.
10. Appointment and Duties of Fund Administrator.
(a) The Company and each of the Fund Administrators appointed
from time to time shall execute and deliver to the Collateral Agent a Deposit
Account Agreement substantially in the form of Exhibit 6 hereto with respect to
each Fund whereby each Fund Administrator shall assume total responsibility for
proper management and administration of such Fund, its compliance with all
Applicable Laws and regulations, the payment of all applicable taxes and other
duties and charges and the investment by the Fund only in investments set forth
in clause (e) of this Section 10 of this Cash Collateral Pledge Agreement. The
Company hereby agrees that the appointment of each Fund Administrator shall be
subject to, and further agrees that it shall cause each Fund Administrator to
comply with, the provisions set forth in Applicable Law related to the
management of investment funds in Brazil, and in this Cash Collateral Pledge
Agreement, including, without limitation, the following provisions:.
(b) Prior to the occurrence of an Event of Default (as
evidenced by a written notice from the Collateral Agent to each Fund
Administrator irrespective of any notice to the contrary from the Company), each
Fund Administrator shall make Investments with funds deposited in any Fund in or
otherwise administer such funds pursuant to the provisions set forth in clause
(e) of this Section 10 of this Cash Collateral Pledge Agreement. Upon the
occurrence and during the continuation of an Event of Default (as evidenced by a
written notice from the Collateral Agent to each Fund Administrator irrespective
of any notice to the contrary from the Company), each Fund Administrator shall
only act pursuant to the instructions it receives from the Collateral Agent with
respect to such Fund and the funds on deposit therein or the Investments made
with such funds, the Pledged Assets or any other provision of this Cash
Collateral Pledge Agreement.
(c) The Company and the Collateral Agent hereby vest each Fund
Administrator with full powers to manage and invest the funds deposited with
them as directed by the Company (except as expressly otherwise provided in
Section 10(b) above). Nothing contained herein shall, however, prevent the
Collateral Agent upon the occurrence and during the continuation of an Event of
Default (as evidenced by a written notice from the Collateral Agent to each Fund
Administrator irrespective of any notice to the contrary from the Company) from
instructing any Fund Administrator, from time to time, as to the investment of
such funds.
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(d) The Company, the Collateral Agent and each Fund
Administrator hereby agree that any such Investment may be liquidated (without
regard to maturity date) by the Collateral Agent whenever necessary to make any
distribution or transfer required by this Cash Collateral Pledge Agreement.
Neither any Fund Administrator nor, except to the extent provided in Section 7.2
of the Common Terms Agreement, the Collateral Agent, shall have any liability
for any investment loss resulting from any such liquidation of Investments.
Additionally, no Fund Administrator shall have liability for any loss resulting
from decline in value of the Pledged Assets in response to market fluctuations
and/or defaults (credit risks), including losses of the entire amount invested,
so long as it is acting in accordance with the terms and conditions of this Cash
Collateral Pledge Agreement and Applicable Law.
(e) Each Fund shall only make Investments in (i) Dollars and
Reais; (ii) marketable direct obligations issued or unconditionally guarantied
by the United States Government or issued by any agency thereof and backed by
the full faith and credit of the United States, in each case maturing within one
year from the date of acquisition thereof; (iii) marketable direct obligations
issued or unconditionally guarantied by the Government of Brazil, the Central
Bank or any agency thereof and backed by the full faith and credit of the
Government of Brazil, in each case maturing within ninety (90) days from the
date of acquisition thereof; (iv) commercial paper issued by United States
corporations having, at the time of acquisition, a rating of at least A-1 or
better or P-1 or better, by S&P or Xxxxx'x; (v) demand deposits, certificates of
deposit, other time deposits, and bankers' acceptances maturing within one year
from the date of acquisition thereof issued by any bank operating under the laws
of the United States or any state thereof or the District of Columbia that has
combined capital and surplus of not less than $500,000,000; (vi) demand
deposits, certificates of deposit, other time deposits, and bankers' acceptances
maturing within 90 days from the date of acquisition thereof issued by any bank
listed on Schedule 1.1(d) to the Common Terms Agreement; (vii) repurchase
agreements with a term of less than 30 days with respect to any of the
securities of the types described in the foregoing clauses (ii), (iii) and (iv);
(viii) institutional money market funds organized under the laws of the United
States of America or any state thereof or the laws of Brazil (A) substantially
all of whose assets are securities of the types described in the foregoing
clauses (ii), (iii), (iv), (v) and (vi) or (B) substantially all of whose assets
are securities of the types described in the foregoing clauses (b), (c), (d),
(e) and (f) and floating-rate securities with a maturity of less than two years
consisting of marketable direct obligations issued or unconditionally guarantied
by the Government of Brazil, the Central Bank, any agency thereof and backed by
the full faith and credit of the Government of Brazil, provided that the
aggregate amount of Cash Equivalents under this clause (viii)(B) shall not at
any time exceed (x) prior to or on December 31, 2002, [***] (or, with
respect to a date prior to September 30, 2000, [***], to the extent the
excess over [***] represents Funded Equity contributed to the Company
prior to December 31, 1999 and held on the date of such determination in an
Account or Fund subject to this Cash Collateral Pledge Agreement) or (y) after
December 31, 2002, [***] and (ix) other Investments from time to time
approved by the Required Pari Passu Creditors in writing.
[*] 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.
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(f) The Company will indemnify each Fund Administrator against
any loss, liability, cost, claim, action, demand or expense (including, but not
limited to) all reasonable costs, charges and expenses paid or incurred in
disputing or defending any of the foregoing) which it may incur or which may be
made against it arising out of or in connection with its appointment hereunder
or the exercise of its functions, except such as may result from a breach by
such Fund Administrator of any provision of this Cash Collateral Pledge
Agreement or Applicable Law, or the gross negligence or willful misconduct of
such Fund Administrator or any of its officers, directors, employees, or agents.
11. Undertakings With Respect to Each Fund Administrator. During the
term of this Cash Collateral Pledge Agreement, the Company shall cause each Fund
Administrator:
(a) To receive any and all amounts that shall be deposited by
or on behalf of the Company with such Fund Administrator, effect the transfers
set forth herein and carry on its duties for the proper management of the such
amounts and each Fund.
(b) To operate and manage, or permit the operation and
management of, the any Fund only as authorized by this Cash Collateral Pledge
Agreement.
(c) To insert in its computer systems, mailing documents and
any other system or documents, where required by Applicable Law, a legend
stating that the operation and management of the funds deposited with such Fund
Administrator and any Fund shall be in accordance with the terms and conditions
of this Cash Collateral Pledge Agreement.
(d) To invest the funds deposited with such Fund Administrator
and any Fund only in accordance with the terms and conditions of this Cash
Collateral Pledge Agreement.
12. Withdrawals and Transfers from Funds.
(a) The Company shall have no right to withdraw any cash on
deposit with any Fund Administrator or otherwise dispose of or transfer any
Pledged Assets except as expressly provided herein and in the Common Terms
Agreement. The Company shall instruct each Fund Administrator to make
withdrawals from funds on deposit with such Fund Administrator or to redeem any
quotas of the Fund only if no Event of Default exists and to the extent
necessary to make payments for purposes not prohibited by the Common Terms
Agreement, or as otherwise approved in writing by the Collateral Agent.
(b) The amounts to be transferred from deposit with any Fund
Administrator or as a result of a redemption or disposition of the quotas of any
Fund (to the extent that such funds that were invested in such quotas of such
Fund would otherwise have been required to be held in a Special Purpose Account)
shall be calculated by the Company and communicated to each Fund Administrator
and the Collateral Agent by the Company in writing at least three (3) Business
Days prior to each date on which a transfer is to be made, which writing shall
state that
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(i) such transfer is being made in accordance with the provisions and
requirements of the Common Terms Agreement and (ii) no Event of Default then
exists.
(c) Not later than ten (10) days after the end of each
calendar month, the Company shall provide the Collateral Agent with reports in
form and substance reasonably acceptable to the Collateral Agent on the amounts
deposited with each Fund Administrator and invested in the Funds by the Company
during the preceding month, so long as any amounts have been deposited in,
withdrawn from or transferred to or from such Fund Administrator, as required by
Applicable Law, so that the Collateral Agent is fully informed and updated in
respect of the amounts on deposit with such Fund Administrator and the Funds, as
well as of the total amounts and Investments subject to the Lien created
hereunder. The Company shall properly maintain such reports which shall at all
times be deemed an integral part hereof as if they were transcribed herein.
13. Rights and Powers of the Collateral Agent Upon an Event of Default.
(a) If an Event of Default has occurred and is continuing, the
Collateral Agent may, and shall be entitled to instruct each Depositary to,
without being required to give any notice (except written notice of such Event
of Default as may be required by mandatory requirements of law), without
limitation and in addition to any and all rights with respect to the Pledged
Assets granted to the Collateral Agent or the Pari Passu Secured Parties under
the Common Terms Agreement and the other Pari Passu Financing Documents:
(i) personally, or by agents or attorneys,
immediately take possession of the Pledged Assets or any part thereof,
from the Company, any Depository, any Fund Administrator or any other
Person who then has possession of any part thereof with or without
notice or process of law;
(ii) instruct the obligor or obligors on or any
counterparties to any agreement, instrument or other obligation in
respect of or relating to the Company or the Pledged Assets to make any
payment required by the terms of such instrument, agreement or
obligation directly to the Collateral Agent, the relevant Depositary or
the relevant Fund Administrator to be applied to the Secured
Obligations in accordance with the terms of the Common Terms Agreement;
(iii) take possession of the Pledged Assets or any
part thereof by directing the Company, the relevant Depositary or the
relevant Fund Administrator in writing to deliver the same to the
Collateral Agent at any place or places designated by the Collateral
Agent it being understood that the Company's, each Depositary's and
each Fund Administrator's obligation so to deliver the Pledged Assets
is of the essence of this Cash Collateral Pledge Agreement and that,
accordingly, upon application to a court having jurisdiction, the
Collateral Agent shall be entitled to a judicial order requiring
specific performance by the Company, each Depositary and each Fund
Administrator, as
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the case may be, of such obligation pursuant to Articles 461, 621 and
632 of the Brazilian Civil Procedure Code;
(iv) withdraw any and all cash, liquidate any and all
Investments in the Accounts and redeem any and all quotas in any Funds
or otherwise held hereunder and apply such cash, the liquidation
proceeds of Investments, redemption proceeds of quotas in any Funds and
other cash, if any, then held in the Accounts, held by any Fund
Administrator or otherwise held hereunder to the Secured Obligations in
accordance with the terms of the Common Terms Agreement; and
(v) sell, assign or otherwise liquidate the Pledged
Assets or any part thereof at public or private sale, for cash, upon
credit or for future delivery, and at such prices as the Collateral
Agent may deem satisfactory and take possession of the proceeds of any
such sale or liquidation and apply the same to the Secured Obligations
in accordance with the terms of the Common Terms Agreement.
(b) Promptly after the cessation of an Event of Default, the
Collateral Agent shall send written notice of such cessation to each Depositary
and each Fund Administrator and each such Depositary and each such Fund
Administrator shall immediately and conclusively rely on such notice to act
pursuant to the instructions it receives from the Company with respect to the
respective Account.
11. Remedies. Without prejudice to any of the foregoing provisions,
upon the occurrence and during the continuation of an Event of Default, the
Collateral Agent is hereby irrevocably authorized and entitled to, dispose of,
collect, receive, appropriate and/or realize upon the Pledged Assets (or any
part thereof) and may forthwith sell, assign, give option or options to purchase
or otherwise dispose of and deliver the Pledged Assets or any part thereof at
such price and upon such terms and conditions as it may deem appropriate,
irrespective of any prior or subsequent notice to the Company, in accordance
with the provisions set forth in Article 774, Item III, of the Brazilian Civil
Code, and Article 277 of the Brazilian Commercial Code, and apply the proceeds
thus received for payment of the Secured Obligations. Any notice by the
Collateral Agent that an Event of Default has occurred and is continuing or has
ceased shall be conclusive as against each Depository and all other third
parties. Without limitation, upon the occurrence and during the continuation of
an Event of Default, the Collateral Agent shall be entitled to instruct obligors
under the Investments constituting Pledged Assets hereunder to make payments
required by such Pledged Assets directly to the Collateral Agent, to be applied
to the Secured Obligations as provided in the Common Terms Agreement. The
Company hereby irrevocably appoints the Collateral Agent as attorney-in-fact,
and for such purpose has executed and delivered to the Collateral Agent on the
date hereof a power-of-attorney substantially in the form of Exhibit 8 hereto.
The Company agrees to deliver an equivalent power-of-attorney to each successor
Collateral Agent. For the purposes hereof, it is hereby agreed and understood
that (a) the proceeds of any such sale shall be applied in accordance with the
terms of the Common Terms Agreement and (b) in the event of any deficiency of
the proceeds of any such sale or other
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realization, the Company shall remain liable for the payment of the
corresponding balance of the Secured Obligations.
12. Amendments, Etc. with Respect to the Secured Obligations. The
Company shall remain obligated hereunder, and the Pledged Assets shall remain
subject to the security interests granted hereby, at all times until termination
of this Cash Collateral Pledge Agreement pursuant to Section 15, notwithstanding
that, without limitation and without any reservation of rights against the
Company, and without notice to or further assent by the Company:
(a) any demand for payment of any of the Secured Obligations
made by any Pari Passu Secured Party is rescinded by such Pari Passu Secured
Party in accordance with the terms of the respective Pari Passu Financing
Agreement, or Article 9 of the Common Terms Agreement or any Other Pari Passu
Financing Document;
(b) the Common Terms Agreement, the Note Purchase Agreements,
the Notes and any Other Pari Passu Financing Document may be amended, modified
or supplemented, in whole or in part, in accordance with the terms of such
agreement; and
(c) any guaranty, right to setoff or other collateral security
at any time held by the Collateral Agent for the benefit of the Pari Passu
Secured Parties for the payment of the Secured Obligations may be sold,
exchanged, waived, surrendered or released.
14. Certain Waivers by the Company. Neither the Collateral Agent nor
any Pari Passu Secured Party shall have any obligation to protect, secure,
perfect or insure any other Lien at any time held by it as security for the
Secured Obligations or any property subject thereto. The Company waives any and
all notice of the creation, renewal, extension or accrual of any of the Secured
Obligations and notice of, or proof of reliance by, the Collateral Agent or any
Pari Passu Secured Party upon this Cash Collateral Pledge Agreement; each of the
Secured Obligations shall conclusively be deemed to have been created,
contracted or incurred in reliance upon this Cash Collateral Pledge Agreement;
and all dealings between the Company, on the one hand, and the Collateral Agent
and the Pari Passu Secured Parties, on the other, shall likewise be conclusively
presumed to have been had or consummated in reliance upon this Cash Collateral
Pledge Agreement. The Company waives diligence, presentment, protest, demand for
payment and notice of default or nonpayment to or upon the Company with respect
to the Secured Obligations.
15. Pursuit of Rights and Remedies against the Company. When pursuing
its rights and remedies hereunder against the Company, the Collateral Agent may,
but shall be under no obligation to, pursue such rights and remedies as it may
have against any third party or against any collateral security for or Guaranty
of the Secured Obligations or any right of offset with respect thereto, and any
failure by the Collateral Agent to pursue such other rights or remedies or to
collect any payments from such third party or to realize upon any such
collateral security or Guaranty or to exercise any such right of offset, or any
release of such third party or of any such collateral security, Guaranty or
right of offset, shall not relieve the Company of any liability
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hereunder, and shall not impair or affect the rights and remedies, whether
express, implied or available as a matter of law, of the Collateral Agent or the
Pari Passu Secured Parties.
16. Termination and Release. When the Secured Obligations have been
indefeasibly satisfied in full, the Notes are no longer outstanding and no other
amount is then outstanding or owing to any Pari Passu Secured Party under the
Notes, the Note Purchase Agreements, the Common Terms Agreement and any other
Pari Passu Financing Document and all Pari Passu Commitments have terminated,
then, and only then, shall this Cash Collateral Pledge Agreement and the
security interests created hereby be released and this Cash Collateral Pledge
Agreement shall terminate, at the Company's expense; otherwise, this Cash
Collateral Pledge Agreement and the security interests created hereby shall
remain in full force and effect. No release of this Cash Collateral Pledge
Agreement, or of the Lien created and evidenced hereby, shall be valid unless
executed by the Collateral Agent. The Collateral Agent, upon the Company's
request, at the Company's expense and to the extent authorized to do so by
Article 7 of the Common Terms Agreement and in accordance with this Section 15,
shall execute, and deliver to the Company all documents reasonably necessary to
evidence such release. To the fullest extent permitted by Applicable Law, this
Cash Collateral Pledge Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any amount received by the
Collateral Agent or any other Pari Passu Secured Party in respect of the Secured
Obligations is rescinded or must otherwise be restored or returned by the
Collateral Agent or such Pari Passu Secured Party upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Company or upon
the appointment of any intervenor or conservator of, or agent or similar
official for, the Company or any part of its assets, or otherwise, all as though
such payments had not been made.
17. Resignation or Removal of Depositary or Fund Administrator. Any
Depositary or Fund Administrator may resign at any time by giving at least
thirty (30) days' prior written notice thereof to the Collateral Agent and the
Company, and may be removed at any time with or without cause by the Company
(and shall be removed by the Company in the event of a repeated failure of any
Depositary or Fund Administrator to perform its duties in accordance with
instructions by the Company that are consistent with the provisions of Sections
7 and 8 of this Cash Collateral Pledge Agreement), or upon the occurrence and
during the continuation of an Event of Default (as evidenced by a written notice
from the Collateral Agent to such Depositary or such Fund Administrator) by the
Collateral Agent. Upon any such resignation or removal, the Company shall have
the right to appoint a successor depositary subject to prior approval of any
such successor depositary by the Collateral Agent (which approval shall not be
unreasonably withheld). If no successor depositary or administrator shall have
been so appointed by the Company and shall have accepted its appointment within
thirty (30) days after the resignation or removal of the retiring Depositary or
Fund Administrator, as the case may be, the Collateral Agent shall have the
right to appoint a successor depositary or administrator, as the case may be.
Upon the acceptance of its appointment as Depositary or Fund Administrator, as
the case may be, the successor depositary or administrator shall thereupon
succeed to and be vested with all the rights, powers, privileges and duties of
the retiring Depositary or Fund Administrator, as the case
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may be, and the retiring Depositary or Fund Administrator shall be discharged
from its duties and obligations under this Cash Collateral Pledge Agreement.
18. Waivers and Amendments. Notwithstanding any provisions of this Cash
Collateral Pledge Agreement, no amendment of any provision of this Cash
Collateral Pledge Agreement (including any waiver or consent relating thereto)
shall be effective unless the same shall have been consented to and signed in
accordance with Section 9.8 of the Common Terms Agreement.
19. Severability. If any provision of this Cash Collateral Pledge
Agreement shall be held to be invalid, illegal or unenforceable under Applicable
Law in any jurisdiction, such provision shall be ineffective only to the extent
of such invalidity, illegality or unenforceability, and shall not affect any
other provisions hereof or the validity, legality or enforceability of such
provision in any other jurisdiction. Where provisions of any Applicable Law
resulting in such prohibition or unenforceability may be waived they are hereby
waived by the Company, each Depositary and the Collateral Agent to the full
extent permitted by Applicable Law so that this Cash Collateral Pledge Agreement
shall be deemed a valid and binding agreement, and the security interest created
hereby shall constitute a continuing first priority Lien on and perfected, first
priority security interest in the Pledged Assets, in each case enforceable
against the Company in accordance with its terms.
20. Authority of the Collateral Agent. The Company acknowledges that
the rights and responsibilities of the Collateral Agent under this Cash
Collateral Pledge Agreement with respect to any action taken by the Collateral
Agent or the exercise or non-exercise by the Collateral Agent of any option,
request, judgment or other right or remedy provided for herein or resulting or
arising out of this Cash Collateral Pledge Agreement shall, as between the
Collateral Agent and the other Pari Passu Secured Parties, be governed by the
Pari Passu Financing Documents and by such other agreements with respect thereto
as may exist from time to time among them, but, as between the Collateral Agent
and the Company, the Collateral Agent shall be conclusively presumed to be
acting as agent for the Pari Passu Secured Parties with full and valid authority
so to act or refrain from acting, and the Company shall be under no obligation
or entitlement to make any inquiry respecting such authority.
21. Complete Agreement; Successors and Assigns; Third-Party
Beneficiaries. This Cash Collateral Pledge Agreement is intended by the parties
as the final expression of their agreement regarding the subject matter hereof
and as a complete and exclusive statement of the terms and conditions of such
agreement. This Cash Collateral Pledge Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns. All Pari Passu Secured Parties that are not signatories to this Cash
Collateral Pledge Agreement are intended to be third-party beneficiaries of this
Cash Collateral Pledge Agreement. Otherwise, there are no third-party
beneficiaries of this Cash Collateral Pledge Agreement.
22. Waiver of Immunity. To the extent that the Company has or hereafter
may be entitled to claim or may acquire, for itself or any of the Pledged
Assets, any immunity from suit,
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jurisdiction of any court or from any legal process (whether through service of
notice, attachment prior to judgment, attachment in aid of execution, or
otherwise) with respect to itself or its property, it hereby irrevocably waives
such immunity in respect of its obligations hereunder to the extent permitted by
Applicable Law.
23. GOVERNING LAW; JURISDICTION. THIS CASH COLLATERAL PLEDGE AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS
OF BRAZIL. THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE
JURISDICTION OF THE COURTS SITTING IN THE CITY OF RIO DE JANEIRO, BRAZIL, IN ANY
ACTION OR PROCEEDING TO RESOLVE ANY DISPUTE OR CONTROVERSY RELATED TO OR ARISING
FROM THIS CASH COLLATERAL PLEDGE AGREEMENT AND THE PARTIES HERETO IRREVOCABLY
AGREE THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH COURTS.
24. No Duty on Agent's Part. The powers conferred on the Collateral
Agent hereunder are solely to protect the Collateral Agent's and the Pari Passu
Secured Parties' interests in the Pledged Assets and shall not impose any duty
upon the Collateral Agent to exercise or on the Pari Passu Secured Parties to
cause the Collateral Agent to exercise any such powers. The Collateral Agent
shall be accountable only for amounts that it actually receives as a result of
the exercise of such powers, and neither the Collateral Agent nor any Pari Passu
Secured Party nor any of its respective officers, directors, employees or agents
shall be responsible to the Company for any act or failure to act hereunder
except to the extent otherwise provided in Section 7.2 of the Common Terms
Agreement.
25. Notices. All notices and other communications under this Cash
Collateral Pledge Agreement shall be in writing and shall be personally
delivered or sent by prepaid courier, by overnight, registered or certified mail
(postage prepaid), or by facsimile, and shall be deemed given when received by
the intended recipient thereof. Unless otherwise specified in a notice sent or
delivered in accordance with Section 10.4 of the Common Terms Agreement, all
notices and other communications shall be given to the parties hereto at their
respective addresses (or to their respective facsimile numbers) indicated in
Schedule 1.1(a) of the Common Terms Agreement (in the case of the Collateral
Agent), in Schedule 10.4 of the Common Terms Agreement (in the case of the
Company), in the respective Deposit Account Agreement (in the case of any
Depositary) or in the respective Fund Administrator Agreement (in the case of
any Fund Administrator).
26. Survival of Agreements, Representations and Warranties. All
agreements, representations and warranties made herein shall survive the
execution and delivery of this Cash Collateral Pledge Agreement and the closing
and shall continue as valid and enforceable agreements, representations and
warranties (when made hereunder) until payment and performance of any and all
Secured Obligations. Any investigation at any time made by or on behalf of the
Collateral Agent or the Pari Passu Secured Parties shall not diminish the right
of the Collateral Agent or the Pari Passu Secured Parties to rely thereon.
Cash Collateral and Cash Equivalents Pledge Agreement
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27. Specific Performance. For the purposes hereof, the Collateral Agent
may seek the specific performance of the obligations undertaken herein by the
Company, as provided in Articles 461, 621 and 632 of the Brazilian Civil
Procedure Code.
IN WITNESS WHEREOF, the parties have caused this Cash Collateral Pledge
Agreement to be duly executed in the presence of the undersigned witnesses.
Company:
XXXXXX X.X.
By: By:
---------------------- -------------------------
Name: Name:
Title: Title:
Collateral Agent:
LASALLE BANK NATIONAL ASSOCIATION
By: By:
---------------------- -------------------------
Name: Name:
Title: Title:
Witnesses:
------------------------- ----------------------------
Name: Name:
ID: ID:
Cash Collateral and Cash Equivalents Pledge Agreement
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EXHIBIT 1
LIST OF SPECIAL PURPOSE ACCOUNTS AND DEPOSITARIES
NONE
Cash Collateral and Cash Equivalents Pledge Agreement
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EXHIBIT 2
LIST OF EXCESS CASH EQUIVALENTS ACCOUNTS AND DEPOSITARIES
Cash Collateral and Cash Equivalents Pledge Agreement
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EXHIBIT 3
LIST OF INVESTMENTS HELD IN ACCOUNTS
Cash Collateral and Cash Equivalents Pledge Agreement
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EXHIBIT 4
LIST OF OTHER FUNDS AND FUND ADMINISTRATORS
Cash Collateral and Cash Equivalents Pledge Agreement
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EXHIBIT 5
FORM OF DEPOSIT ACCOUNT AGREEMENT
To:
[BANK]
Attn.: Mr. [o]
Re: Account Nr.
and
Cash Collateral Account and Cash Equivalents Pledge Agreement,
dated as of December 17, 1999 (the "Cash Collateral Pledge
Agreement"), entered into by and between Xxxxxx X.X. (the
"Company") and LaSalle Bank National Association, (the
"Collateral Agent").
Dear Sirs:
Please be advised that, pursuant to the Cash Collateral Pledge
Agreement referenced above, all credit rights of the Company for any and all
Cash Equivalents, funds and other investments from time to time held in or
deposited in our account (the "Account") nr. [o] with branch nr. [o] with your
institution (the "Pledged Assets") have been pledged in favor of the Collateral
Agent. Capitalized terms used but not defined herein shall have the same
meanings set forth in the Cash Collateral Pledge Agreement.
The Company hereby irrevocably instructs you to, upon the occurrence
and during the continuation of an Event of Default under the Cash Collateral
Pledge Agreement, as shall be evidenced by a written notice to you by the
Collateral Agent (irrespective of any notice to the contrary from the Company),
(i) pay over and transfer upon a written request from the Collateral Agent any
and all Pledged Assets to or to the order of the Collateral Agent pursuant to
the instructions contained in such written request, and (ii) act as a
"Depositary" (as defined in the Cash Collateral Pledge Agreement) pursuant to
the instructions of the Collateral Agent with respect to any and all matters
relating to the Account, including, without limitation, the segregation of the
Pledged Assets in other separate account(s) and the direction of the Investments
to be made with the Pledged Assets, in each case in accordance with the terms
and conditions of the Cash Collateral Pledge Agreement. For such purposes,
please find attached a copy of the Cash Collateral Pledge Agreement, together
with a sworn translation thereof into Portuguese. Promptly after the cessation
of an Event of Default, the Collateral Agent shall send written notice of such
cessation to you and you shall immediately and conclusively rely on such notice
in determining whether to act pursuant to the instructions you receive from the
Company with respect to the Account. This
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Deposit Account Agreement and the instructions contained herein may not be
revoked, amended or modified without the written consent of the Collateral
Agent.
Cash Collateral and Cash Equivalents Pledge Agreement
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Notwithstanding anything herein to contrary, the Depositary shall be
permitted to act in accordance with the determinations of any court order or
judicial decision binding on the Depositary and/or the Pledged Assets without
being required to dispute such court order or judicial decision.
Yours truly,
Company
XXXXXX X.X.
By: By:
---------------------- -------------------------
Name: Name:
Title: Title:
Agreed and acknowledged:
[BANK]
By: By:
---------------------- -------------------------
Name: Name:
Title: Title:
Copy to:
LASALLE BANK NATIONAL ASSOCIATION
000 X. XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxx
Cash Collateral and Cash Equivalents Pledge Agreement
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FORM OF FUND ADMINISTRATOR AGREEMENT
To:
[FUND ADMINISTRATOR]
Attn.: Mr. [o]
Re: [Fund Name(s)] (the "Fund(s)")
and
Cash Collateral Account and Cash Equivalents Pledge Agreement,
dated as of December 17, 1999 (the "Cash Collateral Pledge
Agreement"), entered into by and between Xxxxxx X.X. (the
"Company") and LaSalle Bank National Association (the
"Collateral Agent").
Dear Sirs:
Please be advised that, pursuant to the Cash Collateral Pledge
Agreement referenced above, all funds deposited from time to time with you and
all quotas in the Fund(s) identified above acquired by you on behalf of the
Company (the "Pledged Assets") have been pledged in favor of the Collateral
Agent. Capitalized terms used but not defined herein shall have the same
meanings set forth in the Cash Collateral Pledge Agreement.
The Company hereby irrevocably instructs you to, upon the occurrence
and during the continuation of an Event of Default under the Cash Collateral
Pledge Agreement, as shall be evidenced by a written notice to you by the
Collateral Agent (irrespective of any notice to the contrary from the Company),
(i) pay over and transfer upon a written request from the Collateral Agent any
and all Pledged Assets to or to the order of the Collateral Agent pursuant to
the instructions contained in such written request, and (ii) act pursuant to the
instructions of the Collateral Agent with respect to any and all matters
relating to the Funds and the quotas therein, including, without limitation, the
segregation of the Pledged Assets and the direction of the Investments to be
made with or redemptions of the Pledged Assets, in each case in accordance with
the terms and conditions of the Cash Collateral Pledge Agreement. For such
purposes, please find attached a copy of the Cash Collateral Pledge Agreement,
together with a sworn translation thereof into Portuguese. Promptly after the
cessation of an Event of Default, the Collateral Agent shall send written notice
of such cessation to you and you shall immediately and conclusively rely on such
notice to act pursuant to the instructions you receive from the Company with
respect to the funds on deposit with you and the Funds. This Fund Administrator
Agreement and the instructions contained herein may not be revoked, amended or
modified without the written consent of the Collateral Agent.
Cash Collateral and Cash Equivalents Pledge Agreement
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Notwithstanding anything herein to contrary, the Fund Administrator
shall be permitted to act in accordance with the determinations of any court
order or judicial decision binding on the Fund Administrator and/or the Fund
without being required to dispute such court order or judicial decision.
Yours truly,
Company
XXXXXX X.X.
By: By:
---------------------- -------------------------
Name: Name:
Title: Title:
Agreed and acknowledged:
[ADMINISTRATOR]
By: By:
---------------------- -------------------------
Name: Name:
Title: Title:
Copy to:
LASALLE BANK NATIONAL ASSOCIATION
000 X. XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxx
Cash Collateral and Cash Equivalents Pledge Agreement
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EXHIBIT 7
FORM OF AMENDMENT TO CASH COLLATERAL ACCOUNT AND
CASH EQUIVALENTS PLEDGE AGREEMENT
This [o] Amendment to the Cash Collateral Account and Cash Equivalents
Pledge Agreement (hereinafter referred to as this "Amendment") is made as of [o]
by and between:
(a) Xxxxxx X.X., a company (sociedade anonima) duly organized
and existing in accordance with the laws of the Federative Republic of Brazil,
with its head office in the City of Rio de Janeiro, State of Rio de Janeiro, at
Xxxxxxx Xxxxxxxxx xx Xxxxx, 000, 00(X) andar, enrolled in the Legal Entities
National List of the Ministry of Finance (C.N.P.J./M.F.) under nr.
02.730.101/0001-43, herein represented in accordance with its Bylaws (the
"Company"); and
(b) LaSalle Bank National Association, a financial institution
duly organized and existing under the laws of the United States of America, with
its offices at 000 X. XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx, represented
herein by its duly authorized representative, as identified and qualified in the
signature pages hereof, acting as collateral agent for the Pari Passu Secured
Parties (in such capacity, together with its successors in such capacity, the
"Collateral Agent").
WHEREAS, on December 17, 1999, the parties hereto entered into a Cash
Collateral Account and Cash Equivalents Pledge Agreement (the "Cash Collateral
Pledge Agreement"), registered with the Registry of Titles and Deeds of the City
of [o] under number [o];
WHEREAS, the parties hereto have agreed to amend the Cash Collateral
Pledge Agreement in order to [grant to the Collateral Agent, for the ratable
benefit of the Pari Passu Secured Parties, a perfected first priority security
interest in the Pledged Assets]/[extend the pledge created thereunder to secure
its Obligations assumed under the [Pari Passu Financing Document] dated [o]
between the Company and [o];
WHEREAS, pursuant to the terms hereof, the parties hereto desire to
amend the Cash Collateral Pledge Agreement;
NOW, THEREFORE, the parties hereto enter into this Amendment No. __ to
the Cash Collateral Pledge Agreement under the following terms and conditions:
1. Capitalized terms used and not otherwise defined herein
shall have the meaning ascribed to them in the Cash Collateral Pledge Agreement.
Cash Collateral and Cash Equivalents Pledge Agreement
Page 28 of 33
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2. The Company hereby [pledges, and transfers any additional
Pledged Assets contained in the new Exhibit [o] attached hereto (and which were
not contained in the original Exhibit [o] to the Cash Collateral Pledge
Agreement) to the Collateral Agent, for the benefit of the Pari Passu Secured
Parties]/[extends the pledge created under the Cash Collateral Pledge Agreement
to secure its Obligations under the Other Pari Passu Financing Documents listed
in Exhibit [o] hereto, and for purposes hereof and of the Cash Collateral Pledge
Agreement, each of the Other Pari Passu Creditor Parties listed in Exhibit [o]
shall be a Pari Passu Secured Party under the Cash Collateral Pledge Agreement].
3. The Company hereby represents and warrants to and in favor
of the Collateral Agent, for the benefit of the Pari Passu Secured Parties that:
(a) The execution, delivery, performance and [grant
of the security interest/extension of the pledge created under the Cash
Collateral Pledge Agreement] pursuant to this Amendment have been duly
authorized by all necessary corporate action on the part of the
Company. This Amendment has been duly executed and delivered by the
Company. The execution, delivery, performance and [grant of the
security interest/extension of the pledge created under the Cash
Collateral Pledge Agreement] do not and will not (i) violate any
provision of any charter or other organizational documents of the
Company, (ii) conflict with, result in a breach of, or constitute (or,
with the giving of notice or lapse of time or both, would constitute) a
default under, or, except for consents and approvals that have been
obtained and are in full force and effect, require the approval or
consent of any Person pursuant to, any material Contractual Obligation
of the Company (including any provisions of any Material Contract or
any contracts relating to Debt to which the Company is a party), or
violate any Applicable Law binding on the Company, or (iii) result in
the creation or imposition of any Lien upon any asset of the Company or
any income or profits therefrom, except for the Lien [created/extended]
hereby in favor of the Collateral Agent, for the ratable benefit of the
Secured Parties, under the Cash Collateral Pledge Agreement.
(b) This Amendment and the Cash Collateral Pledge
Agreement, as amended hereby, each constitutes a legal, valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, and the security interest [created/extended]
hereby will, upon completion of the registrations required by Section 5
hereof, constitute a legal, valid and perfected first priority security
interest in the Pledged Assets, enforceable in accordance with its
terms against all creditors of the Company, in each case, except as
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to creditors' rights
generally.
4. All provisions of the Cash Collateral Pledge Agreement not amended
or modified herein shall remain in full force and effect in accordance with the
terms of the Cash Collateral Pledge Agreement.
Cash Collateral and Cash Equivalents Pledge Agreement
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5. The Company, at its own cost and expense, shall, within fifteen (15)
days after the execution of this Amendment, register this Amendment, together
with a sworn translation hereof, with the competent Registry of Titles and Deeds
(Cartorio de Registro de Titulos e Documentos) in Brazil and deliver to the
Collateral Agent evidence of such registration in form and substance reasonably
satisfactory to the Collateral Agent.
IN WITNESS WHEREOF, the undersigned have caused this Amendment No. ___
to the Cash Collateral Account and Cash Equivalents Pledge Agreement to be duly
executed in the presence of the undersigned witnesses.
Company:
XXXXXX X.X.
By: By:
---------------------- -------------------------
Name: Name:
Title: Title:
Collateral Agent:
LASALLE BANK NATIONAL ASSOCIATION
By: By:
---------------------- -------------------------
Name: Name:
Title: Title:
Witnesses:
------------------------- ----------------------------
Name: Name:
ID:
Cash Collateral and Cash Equivalents Pledge Agreement
Page 30 of 33
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EXHIBIT 8
FORM OF POWER OF ATTORNEY
By this Power of Attorney, Xxxxxx X.X., a company (sociedade anonima)
duly organized and existing in accordance with the laws of the Federative
Republic of Brazil, with its head office in the City of Rio de Janeiro, State of
Rio de Janeiro at Xxxxxxx Xxxxxxxxx xx Xxxxx, 000, 00(0) andar, enrolled in the
Legal Entities National List of the Ministry of Finance (C.N.P.J./M.F.) under
nr. 02.730.101/0001-43, herein represented in accordance with its Bylaws (the
"Appointer"), irrevocably constitutes and appoints LaSalle Bank National
Association, a financial institution duly organized and existing under the laws
of the United States of America (the "Collateral Agent") as its attorney-in-fact
to act in its name and place, to the fullest extent permitted by law and in
accordance with the terms of the Cash Collateral Pledge Agreement (as defined
below), to do and perform all and every act and thing whatsoever necessary or
desirable, in connection with the Cash Collateral Account and Cash Equivalents
Pledge Agreement dated as of December 17, 1999, entered into by and between the
Appointer and the Collateral Agent (for the benefit of the Pari Passu Secured
Parties referred to therein) (as amended, supplemented or otherwise modified
from time to time, the "Cash Collateral Pledge Agreement") including, without
limitation:
(a) upon the occurrence and during the continuation of an
Event of Default, to dispose of, collect, receive, appropriate, withdraw,
transfer and/or realize upon the Pledged Assets (or any part thereof) and
forthwith sell, assign, give option or options to purchase or otherwise dispose
of and deliver the Pledged Assets or any part thereof at such prices and upon
such terms and conditions as it may deem appropriate, irrespective of any prior
or subsequent notice to the Appointer, in accordance with the provisions set
forth in Article 774, Item III, of the Brazilian Civil Code, apply the proceeds
thus received for the payment of the Secured Obligations, being vested with all
necessary powers incidental thereto, including, without limitation, the power
and authority to (i) instruct obligors under the Investments constituting
Pledged Assets hereunder to make payment required by such Pledged Assets
directly to the Collateral Agent, and (ii) purchase foreign currency and make
all remittances abroad, to sign any necessary foreign exchange contract with
financial institutions in Brazil that may be required to make such remittances
and to represent the Appointer before the Central Bank and any other Brazilian
governmental authority when necessary to accomplish the purposes of the Cash
Collateral Pledge Agreement;
(b) upon the occurrence and during the continuation of an
Event of Default, to endorse checks, to purchase foreign currency with any
Pledged Asset and remit such currency abroad and, for this purpose, to take all
action in connection thereto, including, without limitation, to execute exchange
contracts and any other instruments or agreements and to represent the Appointer
before the Central Bank of Brazil and any bank or financial institution in
Brazil;
Cash Collateral and Cash Equivalents Pledge Agreement
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(c) upon the occurrence and during the continuation of an
Event of Default, to take all necessary actions and to execute any instrument
before any Governmental Authority, including, without limitation, the Brazilian
Securities and Exchange Commission ("CVM") and before any stock exchange, in the
case of a public sale of the Pledged Assets following the occurrence and during
the continuation of an Event of Default; and
(d) upon the occurrence and during the continuation of an
Event of Default, to take any action and to execute any instrument consistent
with the terms of the Cash Collateral Pledge Agreement as the Collateral Agent
may deem necessary or advisable to accomplish the purposes of the Cash
Collateral Pledge Agreement.
Any notice by the Collateral Agent that an Event of Default has
occurred and is continuing or has ceased shall be conclusive as against each
Depository and all other third parties.
Capitalized terms used, but not defined herein, shall have the meaning
ascribed to them in the Cash Collateral Pledge Agreement.
The powers granted herein are in addition to the powers granted by the
Appointer to the Collateral Agent in the Cash Collateral Pledge Agreement and do
not cancel or revoke any of such powers.
This power of attorney shall be irrevocable, valid and effective until
the Cash Collateral Pledge Agreement has terminated in accordance with its
terms.
Cash Collateral and Cash Equivalents Pledge Agreement
Page 32 of 33
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Any successor Collateral Agent shall automatically succeed to the
rights of the Collateral Agent hereunder.
IN WITNESS WHEREOF, the Appointer has caused its duly authorized
representatives to execute this power of attorney on December 17, 1999.
Appointer:
XXXXXX X.X.
By: By:
---------------------- -------------------------
Name: Name:
Title: Title:
Cash Collateral and Cash Equivalents Pledge Agreement
Page 33 of 33
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EXHIBIT C-1E
FORM OF COMPANY STOCK PLEDGE AGREEMENT
INTENTIONALLY OMITTED
253
EXHIBIT C-1F
FORM OF MORTGAGE
INTENTIONALLY OMITTED
254
EXHIBIT C-2
HOLDCO STOCK PLEDGE AGREEMENT
This HoldCo Stock Pledge Agreement (the "Stock Pledge Agreement") is
made on December 17, 1999, by and among:
(a) Vesper Holding S.A., a company (sociedade anonima) duly
organized and existing in accordance with the laws of the Federative Republic of
Brazil ("Brazil"), with its head office in the City of Rio de Janeiro, State of
Rio de Janeiro, at Xxxxxxx Xxxxxxxxx xx Xxxxx, 000, 00(X) andar, enrolled with
the Legal Entities National List of the Ministry of Finance (C.N.P.J./M.F.)
under nr. 02.763.387/0001-63, herein represented in accordance with its Bylaws
("HoldCo");
(b) Linneu Albuquerque Xxxxx, Brazilian, whose address is Xxx
Xxxxx Xxxxxx 00, xxxxxxxxx 000, Xxxx of Niterori, State of Rio de Janeiro,
Brazil, with identity card n(O) [***] ("Linneu" and together with HoldCo,
the "Pledgors");
(c) Xxxxxx X.X., a company (sociedade anonima) duly organized
and existing in accordance with the laws of Brazil, with its head office in the
City of Rio de Janeiro, State of Rio de Janeiro, at Xxxxxxx Xxxxxxxxx xx Xxxxx,
000, 00(X) andar, enrolled in the Legal Entities National List of the Ministry
of Finance (C.N.P.J./M.F.) under nr. 02.730.101/0001-43, herein represented in
accordance with its Bylaws (the "Company"); and
(d) LaSalle Bank National Association, a financial institution
duly organized and existing under the laws of the United States of America, with
its offices at 000 X. XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx, represented
herein by its duly authorized representative, as identified and qualified in the
signature pages hereof, acting as collateral agent for the Pari Passu Secured
Parties (as defined below) (in such capacity, together with its successors in
such capacity, the "Collateral Agent").
W I T N E S S E T H
WHEREAS, the Company has entered into (i) that certain Secured Note
Purchase Agreement dated as of December 13, 1999 (as amended from time to time,
the "Nortel Note Purchase Agreement") with ABN AMRO Bank N.V. ("ABN AMRO"), as
administrative agent (in such capacity, the "Nortel Facility Agent"), Nortel
Networks Corporation ("Nortel"), as initial Purchaser, and the other Purchasers
from time to time party thereto; (ii) that certain Secured Note Purchase
Agreement dated as of December 13, 1999 (as amended from time to time, the
"Qualcomm/Ericsson Note Purchase Agreement") with ABN AMRO, as administrative
agent (in such capacity, the "Qualcomm/Ericsson Facility Agent"), ABN AMRO and
Xxxxxxxx Xxxxxxxxxxxx, as initial Purchasers, and the other Purchasers from time
to time party thereto and Telefonaktiebolaget LM Ericsson
[*] 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.
1
255
(publ.) ("Ericsson") individually; and (iii) that certain Secured Note Purchase
Agreement dated as of December 13, 1999 (as amended from time to time, the
"Xxxxxx Note Purchase Agreement" and, together with the Nortel Note Purchase
Agreement and the Qualcomm/Ericsson Note Purchase Agreement, the "Note Purchase
Agreements") with Xxxxxx Corporation ("Xxxxxx"), as administrative agent (in
such capacity, the "Xxxxxx Facility Agent" and, together with the Nortel
Facility Agent and the Qualcomm/Ericsson Facility Agent, the "Initial Facility
Agents"), Xxxxxx, as initial Purchaser, and the other Purchasers from time to
time party thereto (all such Initial Facility Agents, initial Purchasers, other
Purchasers and the Collateral Agent, the "Secured Parties," and each a "Secured
Party");
WHEREAS, the Company may, after the date hereof, enter into other note
purchase or loan agreements (the "Other Pari Passu Financing Agreements" and,
together with the Note Purchase Agreements, the "Pari Passu Financing
Agreements") with other facility agents (the "Other Pari Passu Facility Agents")
and purchasers or lenders (the "Other Pari Passu Creditors") pursuant to which
other notes are issued or loans extended that rank on a pari passu basis with
and are secured by the same collateral as the Notes and the Note Purchase
Agreements;
WHEREAS, the Company may, pursuant to the terms and conditions set
forth in the Common Terms Agreement, after the date hereof, enter into Interest
Hedge Agreements with a Pari Passu Creditor, any Affiliate of a Pari Passu
Creditor or any other financial institution reasonably acceptable to the
Collateral Agent, that acts as the counterparty in any Interest Hedge Agreement
in respect of the Pari Passu Obligations ("Swap Lender" and, together with the
Secured Parties and the Other Pari Passu Creditors, the "Pari Passu Secured
Parties");
WHEREAS, in connection with the Note Purchase Agreements, HoldCo, the
Company, the Initial Facility Agents, the Collateral Agent and the Other Pari
Passu Facility Agents have entered or will enter, as the case may be, into that
certain Common Terms Agreement dated as of December 13, 1999 (as amended from
time to time, the "Common Terms Agreement") which sets forth certain common
terms, conditions and covenants relating to the Pari Passu Financing Agreements;
WHEREAS, HoldCo is the legal owner of 525,870 common shares
representing the Capital Stock of the Company, and Linneu is the legal owner of
1 common share representing the Capital Stock of the Company;
HOLDCO STOCK PLEDGE AGREEMENT
2
256
WHEREAS, HoldCo has entered into that certain HoldCo Guaranty dated as
of even date herewith (as amended from time to time, the "HoldCo Guaranty")
pursuant to which HoldCo has guaranteed the obligations of the Company to the
Pari Passu Creditor Parties; and
WHEREAS, it is a covenant entered into in connection with the purchase
of the Notes by the Secured Parties from the Company under the Note Purchase
Agreements that the Pledgors and the Company shall have executed and delivered
this Stock Pledge Agreement to the Collateral Agent for the ratable benefit of
the Pari Passu Secured Parties;
NOW, THEREFORE, in consideration of the foregoing premises and mutual
covenants contained herein, the parties hereto agree as follows:
1. Defined Terms.
(a) Capitalized terms used and not otherwise defined in this
Stock Pledge Agreement are used herein with the same meanings ascribed to such
terms in the Common Terms Agreement. All terms defined in this Stock Pledge
Agreement in the singular shall have the same meanings when used in the plural
and vice versa. The words "hereof," "herein," and "hereunder" and words of
similar import when used in this Stock Pledge Agreement shall, unless the
context otherwise requires, refer to this Stock Pledge Agreement as a whole and
not to any particular provision of this Stock Pledge Agreement, and section,
subsection, schedule and exhibit references are to this Stock Pledge Agreement
unless otherwise specified. All terms defined in this Stock Pledge Agreement
shall have the defined meanings contained herein when used in any certificate or
other document made or delivered pursuant hereto.
(b) Except as otherwise stated herein, all terms and
conditions of the Note Purchase Agreements, the Notes, the Common Terms
Agreement (including Article 1 and, except for Sections 10.8, 10.9, 10.19 and
10.20, and Article 10 thereof), the HoldCo Guaranty and, when executed and
delivered, the Other Pari Passu Financing Documents, shall fully and
automatically apply to this Stock Pledge Agreement, mutatis mutandis, and shall
be deemed as an integral part hereof, as if they were transcribed herein.
2. Pledge; Grant of Security Interest.
HOLDCO STOCK PLEDGE AGREEMENT
3
257
(a) In order to secure the full and prompt payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of (i) all obligations and liabilities of the Company under each of
the Note Purchase Agreements and any Note issued thereunder, and of all
obligations and liabilities of the Company to the Pari Passu Secured Parties,
which may arise under, out of, or in connection with, the Note Purchase
Agreements, the Common Terms Agreement or any other Pari Passu Financing
Document, and (ii) all obligations and liabilities of HoldCo that may arise
under or in connection with the HoldCo Guaranty, in each case, whether on
account of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses or otherwise (including, without limitation, all fees and
disbursements of counsel to the Pari Passu Secured Parties that are required to
be paid by the Company pursuant to the terms of the Note Purchase Agreements,
the Common Terms Agreement or any other Pari Passu Financing Document) (the
"Obligations"), and all obligations of the Company to the Collateral Agent and
the Pari Passu Secured Parties created under this Stock Pledge Agreement (such
obligations together with the Obligations being collectively referred to as the
"Secured Obligations"), which for the purposes of Article 761 of the Brazilian
Civil Code, are estimated to be in (but expressly not limited to) the principal
amount of up to US$1,019,000,000, equivalent on the date hereof to
R$1,875,673,300, with original final maturity on July 1, 2012 (subject to
mandatory and optional repurchase and acceleration thereunder) or as otherwise
provided for in the Note Purchase Agreements, the Pledgors hereby pledge to the
Collateral Agent, for the ratable benefit of the Pari Passu Secured Parties,
pursuant to the provisions of Articles 271 to 279 of the Brazilian Commercial
Code and Articles 768 et seq. of the Brazilian Civil Code, 100% of the shares
representing the Capital Stock of the Company (the "Shares") as follows:
(i) HoldCo pledges 525,870 common shares of the Company,
as identified in Schedule A hereto; and
(ii) Linneu pledges 1 common share of the Company, as
identified in Schedule A hereto.
(b) In addition to the Shares, each Pledgor hereby pledges (i)
all shares representing the Capital Stock of the Company which may be from time
to time subscribed, purchased or acquired by such Pledgor, whether or not in
addition to, in substitution of, as a conversion of or in exchange for any
shares of the Company held by such Pledgor, together with all options or rights
of any nature whatsoever that may be issued or granted by the Company to any
Pledgor in respect of his or its interest in the Company while this Stock
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Pledge Agreement is in effect ("Additional Shares," and, together with the
Shares, the "Pledged Shares"), and (ii) all profits, bonuses, premiums, income,
cash, rights, distributions, dividends, interests and all other amounts
received, receivable or otherwise distributed to it upon any collection,
exchange, sale or other disposition of any of the Pledged Shares, and any
property into which any of the Pledged Shares is converted (including any
deposits, securities or negotiable instruments), and all other amounts paid or
payable under or in connection with any of the Pledged Shares, and, in any
event, including all dividends or other income from the Pledged Shares,
collections thereon or distributions with respect thereto (the "Proceeds" and,
together with the Pledged Shares, the "Pledged Assets").
3. Restriction on Transfer and Encumbrance. The Pledged Assets may not
be sold or transferred by the Pledgors (except as permitted under the Common
Terms Agreement) or by any other means whatsoever become subject to any Liens
(except for those created hereby and those permitted under the Common Terms
Agreement) until the termination of this Stock Pledge Agreement pursuant to
Section 13 hereof.
4. Registration of the Pledge of the Pledged Assets. The Pledgors
shall, (i) within fifteen (15) days after the execution of this Stock Pledge
Agreement, or any issuance, receipt or acquisition of any Additional Shares or
Proceeds as set forth in Section 2(b), register this Stock Pledge Agreement or
any Amendment (as defined below) entered into in accordance with Section 6(e),
register this Stock Pledge Agreement or such Amendment, as applicable, together
with its sworn translation into the Portuguese language, with the competent
Registry of Titles and Deeds (Cartorio de Registro de Titulos e Documentos) in
Brazil and deliver to the Collateral Agent evidence of such registration in form
and substance reasonably satisfactory to the Collateral Agent, and (ii)
concurrently with the execution of this Stock Pledge Agreement, cause the pledge
created hereby to be registered in the appropriate corporate books of the
Company (including the books for Registro de Acoes Nominativas), as provided by
Article 39 of Law nr. 6,404 (Corporations Law), and deliver to the Collateral
Agent evidence of such registration in form and substance reasonably
satisfactory to the Collateral Agent. All expenses incurred in connection with
such sworn translation and with such registrations shall be paid by HoldCo or by
the Company. If either Pledgor acquires (by purchase, stock dividend or
otherwise) any Additional Shares of the Company at any time or from time to time
after the date hereof, such Pledgor will promptly thereafter pledge and register
the pledge of such Additional Shares in accordance with the provisions hereof.
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5. Representations and Warranties.
(a) Representations and Warranties of HoldCo. HoldCo represents and
warrants that all representations and warranties made with respect to it, its
assets and its obligations in Article 3 of the Common Terms Agreement, except
for the representation and warranty set forth in the third sentence of Section
3.2 of the Common Terms Agreement are true and correct. In addition, HoldCo
hereby represents and warrants to the Collateral Agent, for the benefit of the
Pari Passu Secured Parties, as follows:
(i) The security interest created hereby will, upon completion
of the registrations required by Section 4 hereof, constitute a legal, valid and
perfected first priority security interest in the Pledged Assets, enforceable in
accordance with its terms against all creditors of such Pledgor, in each case,
except as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to creditors' rights generally;
provided, however, that any security interest to be created hereby on any
Pledged Asset which has not been issued to, or received or acquired by, any
Pledgor on or before the date hereof shall be deemed to have been created,
perfected and to be in full force only (x) after such Pledged Asset is issued
to, or received or acquired by, such Pledgor, and (y) on the date when the Lien
of the Collateral Agent, for the ratable benefit of the Pari Passu Secured
Parties thereon shall have been registered as provided in Section 4 hereof or as
may be in the future required by Brazilian law; and provided, further, that, the
pledge created hereby will secure the obligations of the Company and HoldCo to
the Other Pari Passu Secured Parties only upon the effectiveness of the Other
Pari Passu Financing Agreements and the registrations required by Section 4
hereof.
(b) Representations and Warranties of Linneau. Linneau hereby
represents and warrants to the Collateral Agent, for the benefit of the Pari
Passu Secured Parties, as follows:
(i) he has the capacity and legal right to enter into, to
perform his obligations under and to grant the security interest in the Pledged
Assets pledged by him pursuant to this Stock Pledge Agreement. The execution,
delivery, performance and grant of the security interest pursuant to this Stock
Pledge Agreement do not and will not (i) conflict with, result in a breach of,
or constitute (or, with the giving of notice or lapse of time or both, would
constitute) a default under, or, except for consents and approvals that have
been obtained and are in full force and effect, require the approval or consent
of any Person
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pursuant to, any material Contractual Obligation of Linneu, or violate any
Applicable Law binding on Linneu, or (iii) result in the creation or imposition
of any Lien upon any asset of Linneu or any income or profits therefrom, except
for the Lien created in favor of the Collateral Agent, for the ratable benefit
of the Pari Passu Secured Parties, under this Stock Pledge Agreement.
(ii) No consent, approval, authorization, exemption, order or
decree of any Governmental Authority is required to be obtained by him for the
execution, delivery and performance and grant of the security interest in the
Pledged Assets pledged by him pursuant to this Stock Pledge Agreement, except
for filings, recordings and Governmental Authorizations required in connection
with the perfection of the Liens created hereby.
(iii) This Stock Pledge Agreement constitutes a legal, valid
and binding obligation of him, enforceable against him in accordance with its
terms, and the security interest created hereby will, upon completion of the
registrations required by Section 4 hereof, constitute the legal, valid and
perfected first priority security interest in the Pledged Assets, enforceable in
accordance with its terms against all creditors of him, except as enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to creditors' rights generally; provided, however, that
any security interest to be created hereby on any Pledged Asset which has not
been issued to, or received or acquired by, him on or before the date hereof
shall be deemed to have been created, perfected and to be in full force only (x)
after such Pledged Asset is issued to, or received or acquired by, him, and (y)
on the date when the Lien of the Collateral Agent, for the ratable benefit of
the Pari Passu Secured Parties thereon shall have been registered as provided in
Section 4 hereof or as may be in the future required by Brazilian law; and
provided, further, that the pledge created hereby will secure the obligations of
the Company and HoldCo to the Other Pari Passu Secured Parties only upon the
effectiveness of the Other Pari Passu Financing Agreements and the registrations
required by Section 4 hereof.
(iv) No consent, approval, authorization, exemption, order or
decree of any Governmental Authority is required to be obtained by him for (i)
the pledge by him of the Pledged Assets pursuant to this Stock Pledge Agreement,
or the execution, delivery or performance by him of this Stock Pledge Agreement,
(ii) the validity or enforceability of this Stock Pledge Agreement, (iii) the
perfection or the maintenance of the security interests created hereby
(including the first priority nature of such security interests), or (iv) the
exercise by the Collateral Agent of the rights provided for in this Stock Pledge
Agreement or
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the remedies in respect of the Pledged Assets pursuant to this Stock Pledge
Agreement or Applicable Law, except (x) for the registrations required by
Section 4 hereof or (y) to the extent the same have been obtained and are in
full force and effect. No other Governmental Approval is or will be required,
and no consent or approval is or will be necessary to avoid default under any
material Contractual Obligation of him in connection with the execution,
delivery, performance and grant of the security interest pursuant to this Stock
Pledge Agreement or to ensure the legality, validity, enforceability thereof or
exercise by the Collateral Agent on behalf of the Pari Passu Secured Parties of
their rights and remedies thereunder.
(v) No Applicable Laws prohibit the consummation of the
transactions contemplated by this Stock Pledge Agreement. No order, judgment or
decree of any Governmental Authority or arbitrator, and no action, suit or
proceeding is pending or, to his knowledge, threatened against or affecting him
or any of its respective properties that could reasonably be expected to enjoin,
prohibit, restrain or otherwise adversely affect in a material manner his
ability to perform his obligations hereunder or the validity, enforceability,
perfection or priority of the Lien created hereunder or the validity, legality
or enforceability of this Stock Pledge Agreement or any of the transactions
contemplated hereby.
(vi) He is the legal and beneficial owner of the Pledged
Assets pledged by him and the Pledged Assets pledged by him are free and clear
of any Lien, except for the security interest created by this Stock Pledge
Agreement.
(vii) The Shares identified in Schedule A hereto constitute
all the issued and outstanding shares of all classes of the Capital Stock of the
Company as of the date hereof and are not subject to any transfer or sale
restrictions, except as provided herein and in the Mirror Authorizations, the
Shareholder Agreement and the Common Terms Agreement.
(viii) All of the Shares have been, and all of the Additional
Shares when issued will be, duly authorized, validly issued and are, or, in the
case of the Additional Shares, will be fully paid and non-assessable.
(ix) No income, stamp or other Tax imposed by any Governmental
Authority in Brazil, Canada or the United States (whether by withholding or
otherwise) by virtue the execution, delivery or performance by him remains
unpaid, other than payment of a registration fee to the Registry of Titles and
Deeds (Cartorio de Registro de Titulos e
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Documentos) in Brazil in connection with the registration of this Stock Pledge
Agreement as contemplated by Section 4.
6. Covenants. The Pledgors and the Company covenant and agree with the
Collateral Agent, for the benefit of the Pari Passu Secured Parties, that from
and after the date of this Stock Pledge Agreement until the termination of this
Stock Pledge Agreement pursuant to Section 13:
(a) All dividends, cash or other property paid or in respect
of the Pledged Assets (including dividends, interest on capital or payments as a
result of redemption, capital reduction or otherwise) shall be paid to the
Collateral Agent irrespective of the occurrence of an Event of Default;
(b) Without the prior written consent of the Collateral Agent,
the Pledgors will not (i) change their respective names; (ii) create, incur or
permit to exist any Lien or option in favor of, or any claim of any Person with
respect to any of the Pledged Assets, or any interest therein, except for the
security interest created hereby; or (iii) sell, assign, transfer, exchange, or
otherwise dispose of the Pledged Assets. The Pledgors will defend the right,
title and interest of the Collateral Agent for the ratable benefit of the Pari
Passu Secured Parties in and to the Pledged Assets against the claims and
demands of all Persons whomsoever;
(c) At any time and from time to time, upon the written
request of the Collateral Agent, and at the sole expense of the Pledgors, the
Pledgors will promptly and duly execute and deliver such further instruments and
documents and take such further actions as the Collateral Agent may reasonably
request for the purposes of obtaining or preserving the full benefits of this
Stock Pledge Agreement and of the rights and powers herein granted. If any
amount payable under or in connection with any of the Pledged Assets shall be or
become evidenced by any promissory note, other instrument or chattel paper, such
note, instrument or chattel paper shall be immediately delivered to the
Collateral Agent, duly endorsed in a manner satisfactory to the Collateral
Agent, to be held as Pledged Assets pursuant to this Stock Pledge Agreement;
(d) Each Pledgor shall grant, and execute and deliver, to the
Collateral Agent (for the ratable benefit of the Pari Passu Secured Parties) on
the date hereof, and shall
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maintain in full force and effect until the full payment of the Secured
Obligations, a power of attorney substantially in the form of Exhibit 1 hereto;
(e) Each Pledgor shall enter into amendments to this Stock
Pledge Agreement with the Collateral Agent substantially in the form of Exhibit
2 hereto (each, an "Amendment"), (i) upon the receipt of Additional Shares or
Proceeds, and as and when required by Section 4.10 of the Common Terms
Agreement, in order to extend the Lien created hereby to such Additional Shares
or Proceeds and (ii) upon the entering by the Company into any Other Pari Passu
Financing Document (or any Interest Hedge Agreement in respect of the Notes) in
order to extend the Lien created hereunder to the other Pari Passu Secured
Parties party thereto to secure the obligations assumed by the Company
thereunder; and the Pledgors shall make all filings and registrations and obtain
all authorizations necessary to create a first priority, perfected security
interest in the Pledged Assets securing obligations to which the security
interest created hereby was extended in favor of the Collateral Agent, for the
benefit of the Pari Passu Secured Parties, and take such further actions as the
Collateral Agent may reasonably request for the purposes of obtaining or
preserving the full benefits of this Stock Pledge Agreement and of the rights
and powers herein granted with respect to such after-acquired Pledged Assets and
in favor of such subsequent Pari Passu Secured Parties; and
(f) The Company shall, upon receipt of a certificate of the
Collateral Agent stating that an Event of Default has occurred and is
continuing, comply with all written instructions received by it from the
Collateral Agent in connection with this Stock Pledge Agreement.
7. Mirror Authorizations. The Collateral Agent, on behalf of all of the
Pari Passu Secured Parties, acknowledges that the Pledged Shares are subject to
the applicable provisions of the Mirror Authorizations and Applicable Law and
that the consent of Anatel will be required for the transfer of the Pledged
Shares upon foreclosure without impairing the maintenance of the Mirror
Authorizations, in the event of such transfer resulting in a change of the
control of the Company.
8. Voting Rights.
(a) Voting Rights after an Event of Default. To the extent
consistent with their fiduciary duties to the Company and their duties and
responsibilities as controlling
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shareholders, at any time and from time to time
after the occurrence and during the continuation of an Event of Default, the
Pledgors shall exercise all voting, consent and other rights in respect of the
Pledged Shares in accordance with, and shall take no action that is inconsistent
with, the written instructions of the Collateral Agent, including, without
limitation, any such rights in respect of the following matters:
(i) any amendment to or other modification of the
Company's by-laws or other constitutive documents;
(ii) capital increases or reductions, the issuance of
convertible debentures, subscription bonuses or any options for the
acquisition of Additional Shares or other debt or equity interests
in the Company;
(iii) the declaration or payment of dividends,
profits, bonuses, premiums and any other distributions of
Additional Shares or Proceeds by the Company;
(iv) the issuance of debentures or the incurrence of
any other Debt by the Company;
(v) any merger, consolidation, spin-off or other
similar transaction relating to the Company and/or any of its
Subsidiaries or the conversion into another corporate type;
(vi) the liquidation, dissolution, bankruptcy,
reorganization or other act that may imply a financial
restructuring of the Company or any of its Subsidiaries;
(vii) cancellation of the listing of any shares of the
Company on any stock exchange or any public or private offering of
shares of the Company;
(viii) the pledge or assignment of any revenues or
other property of the Company and/or its Subsidiaries as collateral
for any Debt to be entered into by the Company and/or its
Subsidiaries or the creation of any Liens or encumbrances affecting
the assets of the Company;
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(ix) the acquisition or disposal of any fixed or
capital assets or Investments (whether by purchase of stock, notes
or other securities, loan advance or otherwise) in other Persons by
the Company;
(x) the disposition or acquisition of, or subscription
for, equity holdings in other Persons now or hereafter existing;
(xi) any change in the functions of the executive
officers comprising the Board of Officers or any other Senior
Officer;
(xii) any amendment to or modification of the Mirror
Authorizations;
(xiii) the entering into of any Material Contracts, or
any other transactions with any Person; and
(xiv) the appointment or removal of the members of the
Board of Directors, executive committee or any other committee, any
other Senior Officer, group or any individual authorized to
exercise decision-making authority with respect to the business and
operations of the Company.
(b) The Pledgors and the Company shall not cast any vote, give
any consent, waiver or ratification or take (or omit to take) any action which
would violate or be inconsistent with any of the terms of this Stock Pledge
Agreement, the HoldCo Guaranty, the Common Terms Agreement or any other Pari
Passu Financing Document, or which would otherwise have the effect of impairing
the value of the Pledged Assets or any part thereof or the priority of the
security interests of the Collateral Agent for the ratable benefit of the Pari
Passu Secured Parties. Nothing contained in this Stock Pledge Agreement shall be
interpreted to require the Pledgors to transfer voting, consent, dividend or
subscription rights to the Collateral Agent.
9. Remedies. Without prejudice to the foregoing provisions, upon the
occurrence and during the continuation of an Event of Default, the Collateral
Agent is hereby irrevocably authorized and entitled to, dispose of, collect,
receive, appropriate and/or realize upon the Pledged Assets (or any part
thereof) and may forthwith sell, assign, give option or options to purchase or
otherwise dispose of and deliver the Pledged Assets
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or any part thereof at such price and upon such terms and conditions as it may
deem appropriate, irrespective of any prior or subsequent notice to the Pledgors
or the Company, in accordance with the provisions set forth in Article 774, Item
III, of the Brazilian Civil Code, and Article 277 of the Brazilian Commercial
Code, and apply the proceeds thus received for payment of the Secured
Obligations. Any notice by the Collateral Agent that an Event of Default has
occurred and is continuing or has ceased shall be conclusive as against each
Pledgor and all other third parties. Each of the Pledgors hereby irrevocably
appoints the Collateral Agent as its attorney-in-fact, and for such purpose it
has executed and delivered to the Collateral Agent on the date hereof a
power-of-attorney substantially in the form Exhibit 1 hereto. The Pledgors agree
to deliver an equivalent power-of-attorney to each successor Collateral Agent.
For the purposes hereof, it is hereby agreed and understood that (a) the
proceeds of any such sale shall be applied in accordance with the terms of the
Common Terms Agreement and (b) in the event of any deficiency of the proceeds of
any such sale or other realization, the Company shall remain liable for the
payment of the corresponding balance of the Secured Obligations.
10. Amendments, etc. with Respect to the Secured Obligations. The
Pledgors shall remain obligated hereunder, and the Pledged Assets shall remain
subject to the security interests granted hereby, at all times until termination
of this Stock Pledge Agreement pursuant to Section 13, notwithstanding that, and
without limitation and without any reservation of rights against the Pledgors,
and without notice to or further assent by the Pledgors:
(a) any demand for payment of any of the Secured Obligations
made by any Pari Passu Secured Party is rescinded by such Pari Passu Secured
Party in accordance with the terms of the respective Pari Passu Financing
Agreement, or Article 9 of the Common Terms Agreement or any Other Pari Passu
Financing Document;
(b) the liability of the Pledgors or any other third party
upon or for any part of the Secured Obligations, or any collateral security or
guarantee therefor or right of setoff with respect thereto, is, from time to
time, in whole or in part, renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered, or released by the Pari Passu Secured Parties;
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(c) the Common Terms Agreement, the Note Purchase Agreements,
the Notes and any Other Pari Passu Financing Document may be amended, modified
or supplemented, in whole or in part, in accordance with the terms of such
agreement; and
(d) any guaranty, right to setoff or other collateral security
at any time held by the Collateral Agent for the benefit of the Pari Passu
Secured Parties for the payment of the Secured Obligations may be sold,
exchanged, waived, surrendered or released.
11. Certain Waivers by the Pledgors. Neither the Collateral Agent nor
any Pari Passu Secured Party shall have any obligation to protect, secure,
perfect or insure any other Lien at any time held by it as security for the
Secured Obligations or any property subject thereto. Each Pledgor waives any and
all notice of the creation, renewal, extension or accrual of any of the Secured
Obligations and notice of, or proof of reliance by, the Collateral Agent or any
Pari Passu Secured Party upon this Stock Pledge Agreement; each of the Secured
Obligations shall conclusively be deemed to have been created, contracted or
incurred in reliance upon this Stock Pledge Agreement; and all dealings between
the Company and the Pledgors, on the one hand, and the Collateral Agent and the
Pari Passu Secured Parties, on the other, shall likewise be conclusively
presumed to have been had or consummated in reliance upon this Stock Pledge
Agreement. Each Pledgor waives diligence, presentment, protest, demand for
payment and notice of default or nonpayment to or upon the Pledgors or the
Company with respect to the Secured Obligations.
12. Pursuit of Rights and Remedies against the Pledgors. When pursuing
its rights and remedies hereunder against the Pledgors, the Collateral Agent
may, but shall be under no obligation to, pursue such rights and remedies as it
may have against any third party or against any collateral security for or
Guaranty of the Secured Obligations or any right of offset with respect thereto,
and any failure by the Collateral Agent to pursue such other rights or remedies
or to collect any payments from such third party or to realize upon any such
collateral security or guaranty or to exercise any such right to setoff, or any
release of such third party or of any such collateral security, Guaranty or
right of offset, shall not relieve the Pledgors of any liability hereunder, and
shall not impair or affect the rights and remedies, whether express, implied or
available as a matter of law, of the Collateral Agent or the Pari Passu Secured
Parties.
13. Termination and Release. When the Secured Obligations have been
indefeasibly satisfied in full, the Notes are no longer outstanding and no other
amount is then
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outstanding or owing to any Pari Passu Secured Party under the Notes, the Note
Purchase Agreements, the Common Terms Agreement and any other Pari Passu
Financing Document and all Pari Passu Commitments have terminated, then, and
only then, shall this Stock Pledge Agreement and the security interests created
hereby be released and this Stock Pledge Agreement shall terminate, at HoldCo's
expense; otherwise, this Stock Pledge Agreement and the security interests
created hereby shall remain in full force and effect. No release of this Stock
Pledge Agreement, or of the Lien created and evidenced hereby, shall be valid
unless executed by the Collateral Agent. The Collateral Agent, upon the
Pledgors' request, at HoldCo's expense and to the extent authorized to do so
pursuant to Article 7 of the Common Terms Agreement and in accordance with this
Section 14, shall execute and deliver to the Pledgors all documents reasonably
necessary to evidence such release. To the fullest extent permitted by
Applicable Law, this Stock Pledge Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any amount received by the
Collateral Agent or any other Pari Passu Secured Party in respect of the Secured
Obligations is rescinded or must otherwise be restored or returned by the
Collateral Agent or such Pari Passu Secured Party upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Pledgors or the
Company or upon the appointment of any intervenor or conservator of, or agent or
similar official for, the Pledgors or the Company or any part of their
respective assets, or otherwise, all as though such payments had not been made.
14. Waivers and Amendments. Notwithstanding any provisions of this
Stock Pledge Agreement, no amendment of any provision of this Stock Pledge
Agreement (including any waiver or consent relating thereto) shall be effective
unless the same shall have been consented to and signed in accordance with
Section 9.8 of the Common Terms Agreement.
15. Severability. If any provision of this Stock Pledge Agreement shall
be held to be invalid, illegal or unenforceable under Applicable Law in any
jurisdiction, such provision shall be ineffective only to the extent of such
invalidity, illegality or unenforceability, and shall not affect any other
provisions hereof or the validity, legality or enforceability of such provision
in any other jurisdiction. Where provisions of any Applicable Law resulting in
such prohibition or unenforceability may be waived they are hereby waived by the
Pledgors, the Company and the Collateral Agent to the full extent permitted by
Applicable Law so that this Stock Pledge Agreement shall be deemed a valid and
binding agreement, and the security interest created hereby shall constitute a
continuing first priority Lien on and perfected first
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priority security interest in the Pledged Assets, in each case enforceable
against the Pledgors in accordance with its terms.
16. Authority of the Collateral Agent. The Pledgors and the Company
acknowledge that the rights and responsibilities of the Collateral Agent under
this Stock Pledge Agreement with respect to any action taken by the Collateral
Agent or the exercise or non-exercise by the Collateral Agent of any option,
request, judgment or other right or remedy provided for herein or resulting or
arising out of this Stock Pledge Agreement shall, as between the Collateral
Agent and the other Pari Passu Secured Parties, be governed by the Pari Passu
Financing Documents and by such other agreements with respect thereto as may
exist from time to time among them, but, as between the Collateral Agent, the
Pledgors and the Company, the Collateral Agent shall be conclusively presumed to
be acting as agent for the Pari Passu Secured Parties with full and valid
authority so to act or refrain from acting, and the Pledgors shall be under no
obligation or entitlement to make any inquiry respecting such authority.
17. Complete Agreement; Successors and Assigns; Third-Party
Beneficiaries. This Stock Pledge Agreement is intended by the parties as the
final expression of their agreement regarding the subject matter hereof and as a
complete and exclusive statement of the terms and conditions of such agreement.
This Stock Pledge Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns. All Pari Passu
Secured Parties that are not signatories to this Stock Pledge Agreement are
intended to be third-party beneficiaries of this Stock Pledge Agreement.
Otherwise, there are no third-party beneficiaries of this Stock Pledge
Agreement.
18. Waiver of Immunity. To the extent that a Pledgor has or hereafter
may be entitled to claim or may acquire, for itself or any of the Pledged Assets
pledged by it pursuant to this Stock Pledge Agreement, any immunity from suit,
jurisdiction of any court or from any legal process (whether through service of
notice, attachment prior to judgment, attachment in aid of execution, or
otherwise) with respect to itself or its property, it hereby irrevocably waives
such immunity in respect of its obligations hereunder to the extent permitted by
Applicable Law.
19. GOVERNING LAW; JURISDICTION. THIS STOCK PLEDGE AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF BRAZIL.
THE PARTIES HERETO
HOLDCO STOCK PLEDGE AGREEMENT
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IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS SITTING IN
THE CITY OF RIO DE JANEIRO, BRAZIL, IN ANY ACTION OR PROCEEDING TO RESOLVE ANY
DISPUTE OR CONTROVERSY RELATED TO OR ARISING FROM THIS STOCK PLEDGE AGREEMENT
AND THE PARTIES HERETO IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH COURTS.
20. No Duty on Agent's Part. The powers conferred on the Collateral
Agent hereunder are solely to protect the Collateral Agent's and the Pari Passu
Secured Parties' interests in the Pledged Assets and shall not impose any duty
upon the Collateral Agent to exercise or on the Pari Passu Secured Parties to
cause the Collateral Agent to exercise any such powers. The Collateral Agent
shall be accountable only for amounts that it actually receives as a result of
the exercise of such powers, and neither the Collateral Agent nor any Pari Passu
Secured Party nor any of its respective officers, directors, employees or agents
shall be responsible to the Pledgors or the Company for any act or failure to
act hereunder except to the extent otherwise provided in Section 7.2 of the
Common Terms Agreement.
21. Notices. All notices and other communications under this Stock
Pledge Agreement shall be in writing and shall be personally delivered or sent
by prepaid courier, by overnight, registered or certified mail (postage
prepaid), or by facsimile, and shall be deemed given when received by the
intended recipient thereof. Unless otherwise specified in a notice sent or
delivered in accordance with Section 10.4 of the Common Terms Agreement, all
notices and other communications shall be given to the parties hereto at their
respective addresses (or to their respective facsimile numbers) indicated in
Schedule 1.1(a) of the Common Terms Agreement (in the case of the Collateral
Agent), in Schedule 10.4 of the Common Terms Agreement (in the case of HoldCo or
the Company) or in clause (b) of the Preamble to this Stock Pledge Agreement (in
the case of Linneu).
22. Survival of Agreements, Representations and Warranties. All
agreements, representations and warranties made herein shall survive the
execution and delivery of this Stock Pledge Agreement and the closing and shall
continue as valid and enforceable agreements, representations and warranties
(when made hereunder) until payment and performance of any and all Secured
Obligations. Any investigation at any time made by or on behalf of the
Collateral Agent or the Pari Passu Secured Parties shall not diminish the right
of the Collateral Agent or the Pari Passu Secured Parties to rely thereon.
HOLDCO STOCK PLEDGE AGREEMENT
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23. Specific Performance. For the purposes hereof, the Collateral Agent
may, seek the specific performance of the obligations undertaken herein by the
Company and the Pledgors, as provided in Articles 461, 621 and 632 of the
Brazilian Civil Procedure Code.
IN WITNESS WHEREOF, the parties have caused this HoldCo Stock Pledge
Agreement to be duly executed in the presence of the undersigned witnesses.
Company:
XXXXXX X.X.
By: By:
----------------------------------- ----------------------------------
Name: Name:
Title: Title:
Linneu:
--------------------------------------
Name: Linneu Albuquerque Xxxxx
HOLDCO STOCK PLEDGE AGREEMENT
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VESPER HOLDING S.A.:
By: By:
----------------------------------- --------------------------------
Name: Name:
Title: Title:
Collateral Agent:
LASALLE BANK NATIONAL ASSOCIATION
By: By:
----------------------------------- --------------------------------
Name: Name:
Title: Title:
Witnesses:
-------------------------------------- -----------------------------------
Name: Name:
ID: ID:
HOLDCO STOCK PLEDGE AGREEMENT
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SCHEDULE A
DESCRIPTION OF PLEDGED SHARES
NAME SHARE REGISTRATION NO./CLASS OF SHARES
NUMBER
------------------------- -------------------------- -------------------------
HoldCo 525,870/Common
Linneu 1/Common
HOLDCO STOCK PLEDGE AGREEMENT
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EXHIBIT 1
FORM OF POWER OF ATTORNEY
By this power of attorney, Vesper Holding S.A., a company (sociedade
anonima) duly organized and existing in accordance with the laws of the
Federative Republic of Brazil, with head office in the City of Rio de Janeiro,
State of Rio de Janeiro, at Xxxxxxx Xxxxxxxxx xx Xxxxx, 000, 00(0) andar,
enrolled in the Legal Entities National List of the Ministry of Finance
(C.N.P.J./M.F.) under nr. 02.763.387/0001-63, ("HoldCo") herein represented in
accordance with its Bylaws (the "HoldCo Appointer"), and Linneu Albuquerque
Xxxxx, a Brazilian, whose address is Xxx Xxxxx Xxxxxx 00, xxxxxxxxx 000, Xxxx of
Niterori, State of Rio de Janeiro, Brazil and identity card n(0) [***]
("Linneu" and together with the HoldCo Appointer, the "Appointers"); irrevocably
constitute and appoint LaSalle Bank National Association (the "Collateral
Agent") as their attorney-in-fact to act in their name and place, to the fullest
extent permitted by law, to do and perform all and every act and thing
whatsoever necessary or desirable, in connection with the HoldCo Stock Pledge
Agreement, dated December 17, 1999 entered into by and between the Appointers,
the Collateral Agent (for the benefit of the Pari Passu Secured Parties referred
to therein) and Xxxxxx X.X. (the "Company") (as amended, supplemented or
otherwise modified from time to time, the "Stock Pledge Agreement") including
without limitation:
(a) upon the occurrence and during the continuation of an
Event of Default, to dispose of, collect, receive, appropriate, withdraw,
transfer and/or realize upon the Pledged Assets (or any part thereof) and may
forthwith sell, assign, give option or options to purchase or otherwise dispose
of and deliver the Pledged Assets or any part thereof at such prices and upon
such terms and conditions as it may deem appropriate, irrespective of any prior
or subsequent notice to the Company, in accordance with the provisions set forth
in Article 774, Item III, of the Brazilian Civil Code, apply the proceeds thus
received for the payment of the Secured Obligations which became then due and
payable, being vested with all necessary powers incidental thereto, including,
without limitation, the power and authority to purchase foreign currency and
make all remittances abroad, to sign any necessary foreign exchange contract
with financial institutions in Brazil that may be required to make such
remittances and to represent the Company before the Central Bank and any other
Brazilian governmental authority when necessary to accomplish the purposes of
the Stock Pledge Agreement;
[*] 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.
HOLDCO STOCK PLEDGE AGREEMENT
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275
(b) upon the occurrence and during the continuation of an
Event of Default, to take all actions necessary to and receive all dividends,
profits, bonuses, premiums, income, cash, rights, distributions, interests and
all other amounts paid, received or otherwise distributed in connection with the
shares (the "Shares") of the Company owned by the Appointers from time to time,
including, upon the occurrence and during the continuation of an Event of
Default under the Common Terms Agreement (as such term is defined in the Stock
Pledge Agreement), all amounts payable upon or in respect of any foreclosure of
such Shares pursuant to Section 9 of this Stock Pledge Agreement;
(c) upon the occurrence and during the continuation of an
Event of Default, to endorse checks, to purchase foreign currency with any
Proceeds and remit such currency abroad and, for this purpose, to take all
action in connection thereto, including, without limitation, to execute exchange
contracts and any other instruments or agreements and to represent the
Appointers before the Central Bank of Brazil and any bank or financial
institution in Brazil;
(d) upon the occurrence and during the continuation of an
Event of Default, to take all necessary actions and to execute any instrument
before any Governmental Authority, including, without limitation, the Brazilian
Securities and Exchange Commission ("CVM") and before any stock exchange, in the
case of a public sale of the Pledged Assets following the occurrence and during
the continuation of an Event of Default; and
(e) upon the occurrence and during the continuation of an
Event of Default, to take any action and to execute any instrument consistent
with the terms of the Stock Pledge Agreement as the Collateral Agent may deem
necessary or advisable to accomplish the purposes of the Stock Pledge Agreement.
Any notice by the Collateral Agent that an Event of Default has
occurred and is continuing or has ceased shall be conclusive as against each
Appointer and all other third parties.
Capitalized terms used, but not defined herein, shall have the meaning
attributed to them in the Stock Pledge Agreement.
HOLDCO STOCK PLEDGE AGREEMENT
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276
The powers granted herein are in addition to the powers granted by the
Appointer to the Collateral Agent in the Stock Pledge Agreement and do not
cancel or revoke any of such powers.
This power of attorney shall be irrevocable, valid and effective until
the Stock Pledge Agreement has been terminated in accordance with its terms.
HOLDCO STOCK PLEDGE AGREEMENT
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277
Any successor Collateral Agent shall automatically succeed to the
rights of the Collateral Agent hereunder.
IN WITNESS WHEREOF, Linneu has executed, and HoldCo has caused its duly
authorized representatives to execute, this power of attorney on December 17,
1999.
Linneu:
--------------------------------------
Name: Linneu Albuquerque Xxxxx
HoldCo:
VESPER HOLDING S.A.
By: By:
----------------------------------- -----------------------------------
Name: Name:
Title: Title:
HOLDCO STOCK PLEDGE AGREEMENT
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EXHIBIT 2
FORM OF
AMENDMENT TO HOLDCO STOCK PLEDGE AGREEMENT
This [o] Amendment to the HoldCo Stock Pledge Agreement (hereinafter
referred to as this "Amendment") is made as of [o], 1999 by and among:
(a) Vesper Holding S.A., a company (sociedade anonima) duly
organized and existing in accordance with the laws of the Federative Republic of
Brazil ("Brazil"), with head office in the City of Rio de Janeiro, State of Rio
de Janeiro, at Xxxxxxx Xxxxxxxxx xx Xxxxx, 000, 00(0)xxxxx, enrolled in the
Legal Entities National List of the Ministry of Finance (C.N.P.J./M.F.) under
nr. 02.763.387/0001-63 herein represented in accordance with its
Bylaws("HoldCo");
(b) Linneu Albuquerque Xxxxx, a Brazilian, whose address is
Xxx Xxxxx Xxxxxx 00, xxxxxxxxx 000, Xxxx of Niterori, State of Rio de Janeiro,
Brazil and identity card n(O) [***] ("Linneu" and together with HoldCo, the
"Pledgors");
(c) Xxxxxx X.X., a company (sociedade anonima) duly organized
and existing in accordance with the laws of Brazil, with its head office in the
City of Rio de Janeiro, State of Rio de Janeiro, enrolled in the Legal Entities
National List Taxpayers' List (C.N.P.J./M.F.) under nr. 02730101/001-43, herein
represented in accordance with its Bylaws and hereinafter referred to as the
"Company"; and
(d) LaSalle Bank National Association, a financial institution
duly organized and existing under the laws of the United States of America, with
its offices at 000 X. XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx, represented
herein by its duly authorized representative, as identified and qualified in the
signature pages hereof, acting as collateral agent for the Pari Passu Secured
Parties (in such capacity, together with its successors in such capacity, the
"Collateral Agent").
WHEREAS, on December 17, 1999, the parties hereto entered into a HoldCo
Stock Pledge Agreement (the "Stock Pledge Agreement"), registered with the
Registry of Titles and Deeds of the City of [o] under number [o];
WHEREAS, the parties hereto have agreed to amend the Stock Pledge
Agreement in order to [grant to the Collateral Agent, for the ratable benefit of
the Pari Passu Secured Parties, to the extent permitted under applicable
Brazilian law and regulations, a perfected first priority security interest in
the Additional Shares]/[extend the pledge created
[*] 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.
HOLDCO STOCK PLEDGE AGREEMENT
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279
thereunder to secure its Obligations assumed under the [Pari Passu Financing
Document] dated [o] entered into between the Company and [o] ;
WHEREAS, pursuant to the terms hereof, the parties hereto desire to
amend the Stock Pledge Agreement;
NOW, THEREFORE, the parties hereto enter into this Amendment No. ___ to
the Stock Pledge Agreement ("Amendment") under the following terms and
conditions:
1. Capitalized terms used and not otherwise defined herein
shall have the meaning ascribed to them in the Stock Pledge Agreement.
2. Each Pledgor hereby [pledges, and transfers the Additional
Shares listed in the new Schedule 1 attached hereto (and which were not
contained in the original Schedule 1 of the Stock Pledge Agreement) to the
Collateral Agent, for the benefit of the Pari Passu Secured Parties]/[extends
the pledge created under the Stock Pledge Agreement to secure its Obligations
under the Other Pari Passu Financing Documents listed in Schedule 2 hereto, and
for the purposes hereof and of the Stock Pledge Agreement, the Other Pari Passu
Creditors listed in Schedule 2 shall be a Pari Passu Secured Party under the
Stock Pledge Agreement].
3. Each Pledgor hereby represents and warrants to and in favor
of the Collateral Agent, for the benefit of the Pari Passu Secured Parties,
that:
(a) In the case of HoldCo, the execution, delivery,
performance and [grant of the security interest/extension of the pledge
created under the Stock Pledge Agreement] pursuant to this Amendment
have been duly authorized by all necessary corporate action on the part
of HoldCo. This Amendment has been duly executed and delivered by
HoldCo. The execution, delivery, performance and [grant of the security
interest/extension of the pledge created under the Stock Pledge
Agreement] do not and will not (i) violate any provision of any charter
or other organizational documents of HoldCo, (ii) conflict with, result
in a breach of, or constitute (or, with the giving of notice or lapse
of time or both, would constitute) a default under, or, except for
consents and approvals that have been obtained and are in full force
and effect, require the approval or consent of any Person pursuant to,
any material Contractual Obligation of HoldCo (including any provisions
of any Material
HOLDCO STOCK PLEDGE AGREEMENT
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280
Contract or any contracts relating to Debt to which HoldCo is a party),
or violate any Applicable Law binding on HoldCo, or (iii) result in the
creation or imposition of any Lien upon any asset of HoldCo or any
income or profits therefrom, except for the Lien [created/extended]
hereby in favor of the Collateral Agent, for the ratable benefit of the
Secured Parties, under this Stock Pledge Agreement.
(b) In the case of Linneu, he has the capacity and
legal right to enter into, to perform his obligations under and to
grant the security interest in the Pledged Assets pledged by him
pursuant to this Stock Pledge Agreement. The execution, delivery,
performance and grant of the security interest pursuant to this Stock
Pledge Agreement do not and will not (i) conflict with, result in a
breach of, or constitute (or, with the giving of notice or lapse of
time or both, would constitute) a default under, or, except for
consents and approvals that have been obtained and are in full force
and effect, require the approval or consent of any Person pursuant to,
any material Contractual Obligation of Linneu, or violate any
Applicable Law binding on Linneu, or (iii) result in the creation or
imposition of any Lien upon any asset of Linneu or any income or
profits therefrom, except for the Lien [created/extended] hereby in
favor of the Collateral Agent, for the ratable benefit of the Secured
Parties, under the Stock Pledge Agreement.
(c) This Amendment and the Stock Pledge Agreement, as
amended hereby, each constitutes a legal, valid and binding obligation
of such Pledgor, enforceable against each Pledgor in accordance with
its terms, and the security interest [created/extended] hereby will,
upon completion of the registrations required by Section 5 hereof,
constitute a legal, valid and perfected first priority security
interest in the Pledged Assets, enforceable in accordance with its
terms against all creditors of such Pledgor, in each case, except as
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to creditors' rights
generally.
4. All provisions of the Stock Pledge Agreement not amended or
modified herein shall remain in full force and effect in accordance with the
terms of the Stock Pledge Agreement.
5. The Company, at its own cost and expense, shall, within
fifteen (15) days after the execution of this Amendment (i) register this
Amendment, together with a
HOLDCO STOCK PLEDGE AGREEMENT
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281
sworn translation hereof, with the competent Registry of Titles and Deeds
(Cartorio de Registro de Titulos e Documentos) in Brazil and deliver to the
Collateral Agent evidence of such registration in form and substance reasonably
satisfactory to the Collateral Agent, and (ii) concurrently with the execution
of this Agreement, register the pledge created hereby in the appropriate
corporate books of the Company (including the books for Registro de Acoes
Nominativas), as provided by Article 39 of Law 6,404 (Corporations Law), and
deliver to the Collateral Agent evidence of such registration in form and
substance reasonably satisfactory to the Collateral Agent.
HOLDCO STOCK PLEDGE AGREEMENT
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282
IN WITNESS WHEREOF, the parties have caused this Amendment No. ___ to
the Stock Pledge Agreement to be duly executed in the presence of the
undersigned witnesses.
HoldCo:
VESPER HOLDING S.A.
By: By:
----------------------------------- --------------------------------
Name: Name:
Title: Title:
Linneu:
--------------------------------------
Name: Linneu Albuquerque Xxxxx
ID: [***]
Company:
XXXXXX X.X.
By: By:
----------------------------------- --------------------------------
Name: Name:
Title: Title:
Collateral Agent:
LASALLE BANK NATIONAL ASSOCIATION
[*] 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.
HOLDCO STOCK PLEDGE AGREEMENT
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283
By: By:
----------------------------------- --------------------------------
Name: Name:
Title: Title:
Witnesses:
-------------------------------------- -----------------------------------
Name: Name:
ID:
HOLDCO STOCK PLEDGE AGREEMENT
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EXHIBIT C-3A
SHAREHOLDER PLEDGE
AND
SUBORDINATION AGREEMENT
SHAREHOLDER PLEDGE AND SUBORDINATION AGREEMENT, dated as of December
17, 1999 (as amended from time to time, the "Agreement"), by and among
(1) XXXXXX X.X., a sociedade anonima organized under the laws
of Brazil (the "Company");
(2) VESPER HOLDING S.A., a sociedade anonima organized under
the laws of Brazil (the "HoldCo");
(3) XXXX CANADA (BRAZIL TELECOM I) LIMITED, a company
organized under the laws of the British Virgin Islands ("BCI Brazil");
(4) QUALCOMM DO BRASIL LTDA., a limitada organized under the
laws of Brazil ("Qualcomm Brazil");
(5) VELOCOM CAYMAN BRASIL HOLDINGS, a company organized under
the laws of The Cayman Islands ("VeloCom Cayman" and, together with BCI
Brazil and Qualcomm Brazil, the "Shareholders," and each, a
"Shareholder");
(6) XXXX CANADA INTERNATIONAL INC., a Canadian corporation
("BCI");
(7) XXXXXXXX XXXXXXXXXXXX, a Delaware corporation
("Qualcomm");
(8) VELOCOM INC., a Delaware corporation ("VeloCom" and,
together with BCI and Qualcomm, the "Parent Shareholders;" and each, a
"Parent Shareholder;" and together with HoldCo and the Shareholders,
the "Shareholder Parties"); and
(9) LASALLE BANK NATIONAL ASSOCIATION, ("LaSalle"), as
collateral agent and common administrative agent for the "Pari Passu
Facility Agents" under the "Pari Passu Financing Agreements" (each
referred to below) that now or in the future are parties to the Common
Terms Agreement described below, and the creditors from time to time
under the Pari Passu Financing Agreements (the "Pari Passu Creditors")
(in such capacity, LaSalle, or any successor in such capacity, is
referred to herein as the "Collateral Agent").
R E C I T A L S
WHEREAS, the Company has entered into (i) that certain Secured Note
Purchase Agreement dated as of December 13, 1999 (as amended from time to time,
the "Nortel Note Purchase Agreement") with ABN AMRO Bank N.V. ("ABN AMRO"), as
administrative agent
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285
(in such capacity, the "Nortel Facility Agent"), Nortel Networks Corporation
("Nortel"), as initial Purchaser, and the other Purchasers thereunder from time
to time party thereto; (ii) that certain Secured Note Purchase Agreement dated
as of December 13, 1999 (as amended from time to time, the "Qualcomm/Ericsson
Note Purchase Agreement") with ABN AMRO, as administrative agent ((in such
capacity, the "Qualcomm/Ericsson Facility Agent"), ABN AMRO and Xxxxxxxx
Xxxxxxxxxxxx, as initial Purchasers, Telefonaktiebolaget LM Ericsson (Publ)
("Ericsson"), and the other Purchasers thereunder from time to time party
thereto; and (iii) that certain Secured Note Purchase Agreement dated as of
December 13, 1999 (as amended from time to time, the "Xxxxxx Note Purchase
Agreement" and, together with the Nortel Note Purchase Agreement and the
Qualcomm/Ericsson Note Purchase Agreement, the "Note Purchase Agreements") with
Xxxxxx Corporation ("Xxxxxx"), as administrative agent ((in such capacity, the
"Xxxxxx Facility Agent" and, together with the Nortel Facility Agent and the
Qualcomm/Ericsson Facility Agent, the "Initial Facility Agents"), Xxxxxx, as
initial Purchaser, and the other Purchasers thereunder from time to time party
thereto (all such Initial Facility Agents, Initial Purchasers and, other
Purchasers, and the Collateral Agent the "Pari Passu Secured Parties," and each
a "Pari Passu Secured Party");
WHEREAS, the Company may, after the date hereof, enter into other note
purchase or loan agreements (the "Other Pari Passu Financing Agreements" and,
together with the Note Purchase Agreements the "Pari Passu Financing
Agreements") with other facility agents (the "Other Pari Passu Facility Agents")
and purchasers or lenders (the "Other Pari Passu Creditors") pursuant to which
other notes are issued or loans extended that rank on a pari passu basis with
and are secured by the same collateral as the Notes and the Note Purchase
Agreements;
WHEREAS, the Company may, pursuant to the terms and conditions set
forth in the Common Terms Agreement, after the date hereof, enter into Interest
Hedge Agreements with a Pari Passu Creditor, any Affiliate of a Pari Passu
Creditor or any other financial institution reasonably acceptable to the
Collateral Agent, that acts as the counterparty in any Interest Hedge Agreement
in respect of the Pari Passu Obligations ("Swap Lender" and, together with the
Pari Passu Secured Parties and the Other Pari Passu Creditors, the "Pari Passu
Secured Parties");
WHEREAS, in connection with the Note Purchase Agreements, HoldCo, the
Company, the Initial Facility Agents, the Collateral Agent and the Other Pari
Passu Facility Agents have entered or will enter, as the case may be, into that
certain Common Terms Agreement dated as of December 13, 1999 (as amended from
time to time, the "Common Terms Agreement") which sets forth certain common
terms, conditions and covenants relating to the Pari Passu Financing Agreements;
WHEREAS, each of the Shareholder Parties has agreed that any Subject
Loan that is intended to constitute a Shareholder Loan within the meaning of the
Common Terms Agreement that is made in the future by such Shareholder Party
(upon and only upon the making of any such Subject Loan, each such Shareholder
Party making such a Subject Loan shall be a "Pledging Lender"), (each of which
Shareholder Loans outstanding shall be described in Schedule 1, which schedule
shall be as amended from time to time to reflect any Shareholder Loans made
after the date hereof) shall be subject to a first priority pledge in favor of
the Collateral Agent, for the benefit of the Pari Passu Secured Parties, (such
Shareholder Loans, together with all notes, certificates, instruments, interest
coupons and other loan documents from time to time
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286
evidencing such such Shareholder Loans, and any and all rights, remedies, powers
and privileges relating thereto, the "Pledged Debt");
WHEREAS, each of the Shareholder Parties has agreed that any Affiliate
Agreement or any Subject Loan that is not intended to be constitute a
Shareholder Loan within the meaning of the Common Terms Agreement entered into
as of the date hereof or to be entered into in the future by such Shareholder
Party (upon and only upon the entering into of any such Affiliate Agreement,
each such Shareholder Party entering into such Affiliate Agreement or making a
Subject Loan that is not intended to constitute a Shareholder Loan, an
"Affiliate Party"), shall be subordinated to the Pari Passu Debt to the extent
set forth in the Common Terms Agreement (each of which Affiliate Agreements
being described in Schedule 2, which schedule shall be amended from time to time
to reflect any Affiliate Agreements entered into after the date hereof);
WHEREAS, immediately upon the making of any Subject Loan to the Company
or any Subsidiary by any Shareholder Party or any Affiliate of any Shareholder
Party that is not a Shareholder Party as of the date of this Agreement or
immediately upon the entering into of any Affiliate Agreement by any Shareholder
Party or any Affiliate of any Shareholder Party that is not an Affiliate Party
as of the date of this Agreement, such Pledging Lender or Affiliate Party, as
the case may be, shall and the Company shall, or the Company shall cause the
Subsidiary to which such Subject Loan is made or with which such Affiliate
Agreement is entered into to, execute and deliver to the Collateral Agent, for
the benefit of the Pari Passu Secured Parties, an Accession Agreement
substantially in the form of Exhibit A hereto (an "Accession Agreement") with
respect to such Subject Loan or Affiliate Agreement, as the case may be;
WHEREAS, it is a condition to the extension of the Pari Passu
Financings that each Subject Loan and each Affiliate Agreement be subject to the
provisions of this Agreement; and
WHEREAS, it is a condition to the extension of the Pari Passu
Financings that each Shareholder Party that is an entity organized under the
laws of Brazil, in addition to being a party to this Agreement, also enter into
a Brazilian Shareholder Pledge Agreement substantially in the form of Exhibit C
hereto.
NOW, THEREFORE, in consideration of the foregoing premises and mutual
covenants contained herein, the parties hereto agree as follows:
A G R E E M E N T
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE 1.
DEFINITIONS AND RELATED MATTERS
SECTION 1.1 DEFINED TERMS GENERALLY. All capitalized terms used but not
otherwise defined herein shall have the meanings assigned to such terms in the
Common Terms Agreement (as defined below).
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287
SECTION 1.2 DEFINITIONS. The following terms with initial capital
letters have the following meanings:
"ACCELERATION" is defined in Section 7.2.
"ACCESSION AGREEMENT" is defined in the Recitals.
"AFFILIATE PARTY" is defined in the Recitals.
"AGREEMENT" is defined in the Preamble.
"COLLATERAL AGENT" is defined in the Preamble.
"COMPANY" is defined in the Preamble and includes its successors and
assigns.
"CHARGES" means all US or foreign federal, state, county, city,
municipal or other Taxes, levies, assessments or charges that, if not paid when
due, may result in a Lien of any Governmental Authority against Collateral.
"JUNIOR CREDITOR" means the Pledging Lenders, the Affiliate Parties and
any other holder of Junior Obligations, from time to time, and includes their
respective successors and assigns.
"JUNIOR DOCUMENTS" means the documents evidencing the Shareholder Loans
and the Specified Affiliate Agreements and all promissory notes, and other
instruments, agreements and documents executed at any time pursuant thereto or
in connection therewith, including all amendments thereto.
"JUNIOR OBLIGATIONS" means any and all present and future obligations
and liabilities of the Company or any Subsidiary of every type or description to
any Junior Creditor, or any Person entitled to indemnification, arising under or
in connection with any Subject Loan, Shareholder Loan or Affiliate Agreement,
whether for principal, premium, interest, fees, expenses, subrogation claims,
indemnities or other amounts (including attorneys' fees and expenses), in each
case whether due or not due, direct or indirect, joint and/or several, absolute
or contingent, voluntary or involuntary, liquidated or unliquidated, determined
or undetermined, now or hereafter existing, renewed or restructured, whether or
not from time to time decreased or extinguished and later increased, created or
incurred, whether or not arising after the commencement of a proceeding under
any Bankruptcy Law (including post-petition interest) and whether or not allowed
or allowable as a claim in any such proceeding, and whether or not recovery of
any such obligation or liability may be barred by a statute of limitations or
such obligation or liability may otherwise be unenforceable.
"OBLIGOR" is defined in Section 8.3.
"OFFICERS' CERTIFICATE" means, with respect to any Pledging Lender or
the Company, a certificate signed by the Chief Executive Officer, the President
or any Vice President, and by the Chief Financial Officer or the Treasurer or
any Assistant Treasurer, of such Pledging Lender or the Company, as applicable,
and delivered to the Collateral Agent.
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288
"PAID IN FULL" and "PAYMENT IN FULL" means, with respect to any Senior
Obligations, that (i) such Senior Obligations has been indefeasibly paid in full
in cash in such currency as may be specified in the applicable Senior Documents,
or (ii) the Pari Passu Secured Parties have otherwise accepted an amount as full
payment of the Senior Obligations.
"PARI PASSU CREDITORS" is defined in the Preamble and includes their
successors and assigneds.
"PARI PASSU SECURED PARTIES" is defined in the Recitals.
"PERMITTED SALES" is defined in Section 4.8(a).
"PLEDGE EFFECTIVENESS DATE" means the date on which a Subject Loan is
made by a Shareholder Party.
"PLEDGED COLLATERAL" is defined in Section 2.1.
"PLEDGED DEBT" is defined in the Recitals.
"PLEDGING LENDER" is defined in the Recitals.
"PROCEEDS" is defined in Section 2.1(e).
"PROCESS AGENT" is defined in Section 9.8(b).
"QUALIFYING AFFILIATE AGREEMENT" means any Affiliate Agreement relating
to services providing revenue-generating support to the Company or any of its
Subsidiaries on arms-length terms and conditions (including the Technical
Services Agreements and the Secondment Agreement, each as in effect on the
Closing Date, but excluding the Know-How Agreement).
"SECURED OBLIGATIONS" is defined in Section 2.2.
"SECURITY INTEREST" is defined in Section 2.1.
"SENIOR COLLATERAL" is defined in Section 8.3.
"SENIOR DOCUMENTS" means the Pari Passu Financing Documents.
"SENIOR OBLIGATIONS" means any and all present and future obligations
and liabilities of the Company or any Subsidiary of every type or description to
any Pari Passu Secured Party or Proceeds Pari Passu Secured Party, or any Person
entitled to indemnification, arising under or in connection with the Senior
Documents, whether for principal, premium, interest, letter of credit or other
reimbursement obligations, cash collateral cover, fees, expenses, indemnities or
other amounts (including attorneys' fees and expenses), in each case whether due
or not due, direct or indirect, joint and/or several, absolute or contingent,
voluntary or involuntary, liquidated or unliquidated, determined or
undetermined, now or hereafter existing, renewed or restructured, whether or not
from time to time decreased or extinguished and later increased, created or
incurred, whether or not arising after the commencement of a proceeding under
any Bankruptcy
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Law (including post-petition interest) and whether or not allowed or allowable
as a claim in any such proceeding, and whether or not recovery of any such
obligation or liability may be barred by a statute of limitations or such
obligation or liability may otherwise be unenforceable.
"PLEDGING LENDER" is defined in the Preamble and includes its
successors and assigns.
"SPECIFIED AFFILIATE AGREEMENT" means (i) the Know-How Agreement and
(ii) any agreement pursuant to which the Company or any of its Subsidiaries is
required to pay any management or similar fee to any Affiliate, other than the
BCI Technical Services Agreement and the Secondment Agreement, each as in effect
on the Closing Date (to the extent any of these agreements requires the payment
of any management fees).
"SUBJECT LOAN" means any loan made by any Shareholder Party to the
Company or any Subsidiary.
"SUPPLEMENTAL DOCUMENTATION" means registrations, financing statements,
continuation statements, consents, acknowledgments, assignments, schedules of
Pledged Collateral and other instruments or documents necessary or requested by
the Collateral Agent (i) to perfect and maintain perfected the Security Interest
on any Pledged Collateral or its first priority, or (ii) so that the Collateral
Agent receives all interest, dividends and distributions from time to time paid
with respect to, and all other Proceeds of, all Pledged Collateral the
Collateral Agent is entitled to receive hereunder.
"UCC" means the Uniform Commercial Code (as amended from time to time)
of the State of New York.
SECTION 1.3 RELATED MATTERS. Section 1.2 of the Common Terms Agreement
(other than Section 1.2(b)) shall govern the interpretation of this Agreement
and is hereby incorporated herein by reference, provided that all references
therein to "this Agreement" shall be read as being to this Agreement.
SECTION 1.4 DETERMINATIONS. Any numerical determination or calculation
contemplated by this Agreement that is made by any Pari Passu Secured Party
shall be presumed correct and be binding upon the Shareholder Parties and the
Company and, in the case of determinations by the Collateral Agent, also the
other Pari Passu Secured Parties, in the absence of manifest error. References
in this Agreement to any "determination" by any Pari Passu Secured Party include
good faith estimates by such Pari Passu Secured Party (in the case of
quantitative determinations), and good faith beliefs by such Pari Passu Secured
Party (in the case of qualitative determinations). All consents and other
actions of any Pari Passu Secured Party contemplated by this Agreement may be
given, taken, withheld or not taken in good faith in such Pari Passu Secured
Party's absolute and sole discretion (whether or not so expressed), except as
otherwise expressly provided herein.
SECTION 1.5 INDEPENDENCE OF COVENANTS. All covenants under this
Agreement shall each be given independent effect so that if a particular action
or condition is not permitted by any such covenant, the fact that it would be
permitted by another covenant, by an exception thereto, or be otherwise within
the limitations thereof, shall not permit such action to be taken or such
condition to exist.
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ARTICLE 2.
THE SECURITY INTEREST IN PLEDGED DEBT;
SECURED OBLIGATIONS
SECTION 2.1. SECURITY INTEREST IN PLEDGED DEBT. To secure the payment
and performance of the Secured Obligations (as defined below) as and when due,
each Pledging Lender shall by this Agreement, on the respective Pledge
Effectiveness Date with respect to any Subject Loan, convey, pledge, assign and
transfer to the Collateral Agent, and grant to the Collateral Agent, as agent
and representative for the equal and ratable benefit of the Pari Passu Secured
Parties, a security interest (the "Security Interest") in, all right, title,
claim and interest of such Pledging Lender in and to the following property, as
and when owned, existing, acquired or arising, and wherever located (such
property being, collectively, the "Pledged Collateral"):
(a) The Pledged Debt;
(b) Any and all indebtedness of any Person obligated with
respect to any of the Pledged Debt, or any successor thereto, that any Pledging
Lender acquires or has the right to acquire from time to time in any manner in
substitution for or in addition to any of the foregoing (including additional
Pledged Debt issued in payment of accrued interest), together with any and all
interest coupons (if any) attached thereto and any and all notes and other loan
documents from time to time evidencing or securing such indebtedness;
(c) Any and all additions to or replacements for any of the
foregoing;
(d) Any and all rights, powers, remedies and privileges of
such Pledging Lender under or with respect to any of the foregoing;
(e) Any and all proceeds and products of any of the foregoing,
whether now held and existing or hereafter acquired or arising, including any
and all cash, securities, instruments and other property from time to time paid,
payable or otherwise distributed in respect of or in exchange for any or all of
the foregoing (collectively, the "Proceeds"). "Proceeds" shall include (i) any
options, warrants, securities or other property issued or delivered by the
issuer of or obligor on any Pledged Collateral as a dividend or distribution in
connection with any merger or other reorganization and (ii) any property
received upon the liquidation or dissolution of any issuer of or obligor on any
Pledged Collateral or upon or in respect of any distribution of capital).
SECTION 2.2. SECURED OBLIGATIONS. The Security Interest shall secure,
for the equal and ratable benefit of the Pari Passu Secured Parties, the full
and prompt payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of
(a) all obligations and liabilities of the Company under each
of the Note Purchase Agreements and any Note issued thereunder and all
obligations and liabilities of the Company to the Pari Passu Secured
Parties, which may arise under, out of, or in connection with, the Note
Purchase Agreements, the Common Terms Agreement or any other Pari Passu
Financing Document, whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including,
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without limitation, all fees and disbursements of counsel to the Pari
Passu Secured Parties that are required to be paid by the Company
pursuant to the terms of the Note Purchase Agreements, the Common Terms
Agreement or any other Pari Passu Financing Document); and
(b) all obligations and liabilities of each Pledging Lender of
every type or description to any Pari Passu Secured Party, or any of
its successors or assigns, arising under or in connection with this
Agreement or any other Pari Passu Financing Documents, including for
reimbursement of amounts that may be advanced or expended by the
Collateral Agent (i) to satisfy amounts required to be paid by any
Pledging Lender under this Agreement or any other Pari Passu Loan
Documents for claims and Charges, together with interest thereon to the
extent provided, or (ii) to maintain or preserve any Pledged Collateral
or to create, perfect, continue or protect any Pledged Collateral or
the Security Interest therein, or its priority;
in each case whether due or not due, direct or indirect, joint and/or several,
absolute or contingent, voluntary or involuntary, liquidated or unliquidated,
determined or undetermined, now or hereafter existing, renewed or restructured,
whether or not from time to time decreased or extinguished and later increased,
created or incurred, whether or not arising after the commencement of a
proceeding under any Bankruptcy Law (including post-petition interest) and
whether or not allowed or allowable as a claim in any such proceeding, and
whether or not recovery of any such obligation or liability may be barred by a
statute of limitations or such obligation or liability may otherwise be
unenforceable (all obligations and liabilities described in this Section 2.2 are
collectively referred to as the "Secured Obligations").
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. REPRESENTATIONS AND WARRANTIES OF AFFILIATE PARTIES. Each
Affiliate Party as of the date of this Agreement, severally and not jointly or
jointly and severally, represents and warrants to the Collateral Agent, for the
benefit of the Pari Passu Secured Parties, that all representations and
warranties made with respect to it, its assets and its obligations in Sections
3.1, 3.2, 3.3 and 3.4 of the Common Terms Agreement are true and correct and
makes the following additional representations and warranties:
(a) No Applicable Laws prohibit the consummation of the
transactions contemplated by this Agreement or such Affiliate Party's Affiliate
Agreement or Subject Loan. No order, judgment or decree of any Governmental
Authority or arbitrator, and no action, suit or proceeding is pending or to such
Affiliate Party's knowledge, threatened against or affecting such Affiliate
Party, the Company, any of the Subsidiaries or any of their respective
properties that could reasonably be expected to have a Material Adverse Effect
or that would enjoin, prohibit, restrain or otherwise adversely affect in a
material manner the validity, legality or enforceability of this Agreement or
such Affiliate Party's Affiliate Agreement or Subject Loan, or the consummation
of the transactions contemplated hereby or thereby.
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(c) The execution and delivery of this Agreement is sufficient
to cause such Affiliate Party's Affiliate Agreement or Subject Loan, as the case
may be, to be subordinate to the Pari Passu Debt to the extent required by the
Common Terms Agreement.
SECTION 3.2. REPRESENTATIONS AND WARRANTIES OF PLEDGING LENDERS. Upon
and only upon the making of any Subject Loan that is intended to constitute a
Shareholder Loan, the Pledging Lender making such Subject Loan shall, as of the
Pledge Effectiveness Date, represents and warrants to the Collateral Agent, for
the benefit of the Pari Passu Secured Parties, that all representations and
warranties made with respect to it, its assets, its obligations and the Security
Interest in Sections 3.1, 3.2, 3.3 and 3.4 of the Common Terms Agreement are
true and correct, as of such date, and shall make the following additional
representations and warranties:
(a) Such Pledging Lender has good and marketable title to all
Pledged Collateral. The Security Interest constitutes a valid, perfected and
first priority Lien in all of the Pledged Collateral and secures payment and
performance of the Secured Obligations.
(b) The Pledged Collateral is free and clear of all Liens
other than the Security Interest and the Shareholder Agreement.
(c) The execution and delivery of this Agreement and the
filing of the Supplemental Documentation specified by the Collateral Agent is
sufficient to cause such Pledging Lender's Subject Loan to constitute a
Shareholder Loan within the meaning prescribed in the Common Terms Agreement.
(d) No Applicable Laws prohibit the consummation of the
transactions contemplated by this Agreement or such Pledging Lender's
Shareholder Loan. No order, judgment or decree of any Governmental Authority or
arbitrator, and no action, suit or proceeding is pending or, to such Pledging
Lender's knowledge, threatened against or affecting such Pledging Lender, the
Company, any of the Subsidiaries or any of their respective properties that
could reasonably be expected to have a Material Adverse Effect or that would
enjoin, prohibit, restrain or otherwise adversely affect in a material manner
the validity, legality or enforceability of this Agreement or such Pledging
Lender's Shareholder Loan, or the consummation of the transactions contemplated
hereby or thereby.
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SECTION 3.3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants, and will represent and warrant, on the date that any
Shareholder Loan is made or any Affiliate Agreement is entered into, to the
Collateral Agent, for the benefit of the Pari Passu Secured Parties, that all
representations and warranties made with respect to it, its assets, its
obligations and the Subject Loans and Affiliate Agreements in Article 3 of the
Common Terms Agreement are true and correct and, in addition, represents and
warrants, or shall represent and warrant as of such, that the Pledged Collateral
with respect to each Subject Loan and each Affiliate Agreement is in full force
and effect.
ARTICLE 4.
PLEDGING LENDERS'
COVENANTS, AGREEMENTS AND WAIVERS
Upon and only upon the making of any Subject Loan that is intended to
constitute a Shareholder Loan, the Company and the Pledging Lender making such
Subject Loan shall covenant, severally, and not jointly or jointly and
severally, to the Collateral Agent, for the benefit of the Pari Passu Secured
Parties, as follows:
SECTION 4.1. CERTAIN AGREEMENTS REGARDING THE PLEDGED DEBT.
(a) The Company hereby consents to the Security Interest of
the Collateral Agent in the Pledged Collateral.
(b) The Company agrees that the Subject Loans will not be
amended or otherwise modified except in accordance with the Common Terms
Agreement.
(c) The Company and each Pledging Lender hereby agree that
upon receipt by the Company of notice from the Collateral Agent that an Event of
Default exists (irrespective of any notice to the contrary from the Company):
(i) the Company shall pay and deliver all cash or other
property from time to time payable or otherwise distributable in
respect of the Pledged Collateral directly to the Collateral Agent,
without any defense, setoff, recoupment or deduction of any kind; and
(ii) the Company will deliver directly to the
Collateral Agent any notes and other instruments executed after the
date hereof from time to time evidencing any Pledged Debt.
(d) The Company expressly waives as against the Collateral
Agent any setoff or other defense to payment and performance by the Company
under the Pledged Collateral and any claim against the Pari Passu Secured
Parties, whether arising under the Pledged Collateral or otherwise.
(e) Promptly after the cessation of an Event of Default, the
Collateral Agent shall send written notice of such cessation to each of the
Pledging Lenders and the Company, and each Pledging Lender shall immediately and
conclusively be entitled to rely on such notice
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and the Company shall immediately cease to be obligated to comply with Section
4.1(c), in each case, unless and until the Collateral Agent delivers a
subsequent notice of Event of Default.
SECTION 4.2. DELIVERY OF PLEDGED COLLATERAL, ETC.
(a) Each Pledging Lender has delivered to the Collateral Agent
all promissory notes and other instruments or documents included in the Pledged
Collateral, together with all Supplemental Documentation, and has made all
registrations and filings, has obtained all Governmental Approvals, and has
taken all other actions that may be necessary in order for the Security Interest
to be valid, perfected or of first priority or that was requested by the
Collateral Agent to assure the priority of the Security Interest therein.
(b) All Pledged Collateral is in suitable form for transfer by
delivery, or is duly endorsed to the order of the Collateral Agent and in form
and substance satisfactory to the Collateral Agent. In addition, the Collateral
Agent shall have the right at any time to exchange certificates or instruments
representing or evidencing Pledged Collateral for certificates or instruments of
smaller or larger denominations.
SECTION 4.3. FURTHER ASSURANCES. Each Pledging Lender shall, at its own
expense, perform on request of the Collateral Agent, such acts as may be
necessary or advisable in the opinion of the Collateral Agent, or that the
Collateral Agent may reasonably request at any time, to assure the validity,
perfection and first priority of the Security Interest, to exercise the rights
and remedies of the Pari Passu Secured Parties hereunder or to carry out the
intent of this Agreement. Without limitation, at the Collateral Agent's request,
each Pledging Lender shall execute and deliver (or cause any third party to
execute and deliver) to the Collateral Agent, at any time and from time to time,
all Supplemental Documentation that the Collateral Agent reasonably may request,
in form and substance acceptable to the Collateral Agent.
SECTION 4.4. POWER OF ATTORNEY. Each Pledging Lender upon and only upon
the making of any Subject Loan shall irrevocably appoint the Collateral Agent
and its employees and agents as such Pledging Lender's true and lawful
attorneys-in-fact, with full power of substitution, to do (a) all things
required to be done by such Pledging Lender under this Agreement or the other
Pari Passu Financing Documents, and (b) all things that the Collateral Agent may
deem necessary or advisable to assure the validity, perfection and first
priority of the Security Interest or otherwise to exercise the rights and
remedies of the Pari Passu Secured Parties hereunder or carry out the intent of
this Agreement, in each case irrespective of whether an Event of Default then
exists (except as otherwise provided herein) and at the Pledging Lender's
expense. Without limitation, the Collateral Agent and its officers and agents
shall be entitled to do all of the following, as fully as any Pledging Lender
might:
(a) sign the name of such Pledging Lender on any Supplemental
Documentation and to deliver and file such Supplemental Documentation
to or with such Persons as the Collateral Agent, in its sole
discretion, may elect; and
(b) affix, by facsimile signature or otherwise, the general or
special endorsement of any Pledging Lender, in such manner as the
Collateral Agent shall deem
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advisable, to any Pledged Collateral that has been delivered to or
obtained by the Collateral Agent without appropriate endorsement or
assignment.
In addition, during the existence of an Event of Default, the
Collateral Agent or its employees or agents may, without notice to any Pledging
Lender and at such time or times as the Collateral Agent in its sole discretion
may determine, in any Pledging Lender's or in the Collateral Agent's name
collect any and all amounts due to any Pledging Lender from obligors with
respect to any Pledged Debt by legal proceedings or otherwise. The Collateral
Agent shall be under no obligation whatsoever to take any of the foregoing
actions, and except to the extent provided in Section 7.2 of the Common Terms
Agreement, the Collateral Agent and its shareholders, directors, officers,
employees and agents shall have no liability or responsibility for any act taken
or omitted with respect thereto. A copy of this Agreement and, if applicable, a
statement by the Collateral Agent that an Event of Default exists shall be
conclusive evidence of the Collateral Agent's right to act under this Section
4.4 as against all third parties.
On the date hereof, each Pledging Lender is delivering to the
Collateral Agent a separate power-of-attorney to the effect set forth in this
Section 4.3, duly executed by such Pledging Lender.
SECTION 4.5. CHANGES AFFECTING SECURITY INTEREST. No Pledging Lender
shall take any action that may affect the validity or first priority of the
Security Interest (including, in the case of any Pledging Lender based in
Brazil, [TO COME FROM XXXXXXX XXXXX] or in the case of any Pledging Lender based
in the United States, adopt a trade name or change its name, chief executive
office, principal place of business, identity or structure) unless, 15 days
prior to taking such action, such Pledging Lender gives written notice to the
Collateral Agent of such event and delivers to the Collateral Agent such
Supplemental Documentation, and takes such other action, as may be required to
preserve the validity or first priority of the Security Interest or requested by
the Collateral Agent.
SECTION 4.6. PAYMENT OF CHARGES AND CLAIMS. Each Pledging Lender shall
pay (a) all Charges imposed upon any Pledged Collateral, and (b) all claims that
have become due and payable and, under Applicable Law, have or may become Liens
upon any Pledged Collateral, in each case before any penalty shall be incurred
with respect thereto; provided that, unless foreclosure, levy or similar
proceedings shall have commenced, such Pledging Lender need not pay or discharge
any such Charges or claims so long as the validity or amount thereof is being
contested in good faith and by appropriate proceedings and so long as adequate
reserves therefor have been established in accordance with GAAP. If any Pledging
Lender fails to pay or obtain the discharge of any Charge, claim or Lien
required to be paid or discharged under this Section and asserted against any
Pledged Collateral, such Pledging Lender shall so notify the Collateral Agent
and, regardless of whether such notice is given, the Collateral Agent may, at
any time and from time to time, in its sole discretion and without waiving or
releasing any obligation of such Pledging Lender under this Agreement or the
other Pari Passu Loan Documents or waiving any Event of Default, make such
payment, obtain such discharge or take such other action with respect thereto as
the Collateral Agent deems advisable.
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SECTION 4.7. DUTY OF CARE.
(a) The Pari Passu Secured Parties shall have no duty of care
with respect to the Pledged Collateral, except that each Pari Passu Secured
Party shall have an obligation to exercise reasonable care with respect to
Pledged Collateral in its possession; provided that (i) each Pari Passu Secured
Party shall be deemed to have exercised reasonable care if Pledged Collateral in
its possession is accorded treatment substantially comparable to that which such
Pari Passu Secured Party accords its own property or treatment substantially in
accordance with actions requested by any Pledging Lender in writing, although
such Pari Passu Secured Party shall not be obligated to comply with any such
requests, and (ii) the Pari Passu Secured Parties shall have no obligation to
take any actions to preserve rights against other parties with respect to any
Pledged Collateral. Without limitation, the Pari Passu Secured Parties shall (A)
bear no risk or expense with respect to any Pledged Collateral and (B) have no
duty with respect to calls, conversions, presentments, maturities, notices or
other matters relating to Pledged Collateral, or to maximize interest or other
returns with respect thereto.
(b) The Collateral Agent may at any time deliver or redeliver
the Pledged Collateral or any part thereof to any Pledging Lender and the
receipt of any of the same by such Pledging Lender shall be complete and full
acquittance for the Pledged Collateral so delivered, and the Collateral Agent
thereafter shall be discharged from any liability or responsibility therefor.
SECTION 4.8. SALE OF COLLATERAL; FURTHER ENCUMBRANCES.
(a) No Pledging Lender shall (i) except for dispositions
expressly permitted by this Section 4.8 (collectively, "Permitted Sales"), sell,
lease or otherwise dispose of any Pledged Collateral, or any interest therein,
or (ii) grant or suffer to exist any Lien in or on any Pledged Collateral. If
any Pledged Collateral, or any interest therein, is disposed of in violation of
these provisions, the Security Interest shall continue in such Pledged
Collateral or interest notwithstanding such disposition, the Person to which the
Pledged Collateral or interest is being transferred shall be bound by this
Agreement, and such Pledging Lender shall deliver all Proceeds thereof to the
Collateral Agent to be held as Pledged Collateral hereunder.
(b) Any disposition by any Pledging Lender of any Subject Loan
shall be permitted, provided (i) the transferee becomes a party hereto by
executing an Accession Agreement if (A) such loan is, and intended to continue
to constitute, a Shareholder Loan or (B) the transferee is a Shareholder Party,
or any of their respective Affiliates, (ii) if clause (i) applies, on or prior
to the date of such disposition, all actions required by Sections 4.2 and 4.4
have been taken, and (iii) if clause (i) does not apply, no Event of Default
results from such disposition.
(c) Concurrently with any Permitted Sale, the Security
Interest shall automatically be released from the Pledged Collateral so disposed
of; provided, however, that the transferring Pledging Lender and the Company
each delivers to the Collateral Agent an Officers Certificate stating that all
conditions to such release set forth herein have been satisfied.
(d) Upon satisfaction of all conditions precedent set forth
herein, the Collateral Agent shall execute and deliver any releases or other
documents reasonably requested by the
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relevant Pledging Lender to accomplish or confirm the release of Pledged
Collateral provided by this Section. Any such release shall specifically
describe that portion of the Pledged Collateral to be released, shall be
expressed to be unconditional and shall be without recourse or warranty (other
than a warranty that the Collateral Agent has not assigned its rights and
interests to any other Person). The Company shall pay all of the Collateral
Agent's expenses in connection with any such release and other documents.
SECTION 4.9. CERTAIN WAIVERS. Except as otherwise provided in this
Agreement, each Pledging Lender, upon and only upon the making of a Subject
Loan, shall hereby waive: (a) presentment, protest, notice of dishonor, release,
compromise, settlement, extension or renewal and any other notice of or with
respect to the Secured Obligations and hereby ratifies and confirms whatever the
Collateral Agent may do in this regard; (b) notice prior to taking possession or
control of any Pledged Collateral; (c) ANY BOND OR SECURITY THAT MIGHT BE
REQUIRED BY ANY COURT PRIOR TO ALLOWING THE COLLATERAL AGENT TO EXERCISE ANY OF
ITS RIGHTS, POWERS OR REMEDIES; (d) the benefit of all valuation, appraisement,
redemption and exemption laws; (e) any rights to require marshaling of the
Pledged Collateral upon any sale or otherwise to direct the order in which the
Pledged Collateral shall be sold; (f) any setoff; and (g) any defenses arising
by reason of any disability or defense of any Person.
ARTICLE 5.
SUBSEQUENT SHAREHOLDER LOANS
AND SUBSEQUENT AFFILIATE AGREEMENTS
AND SUBJECT LOANS
SECTION 5.1. SUBSEQUENT SHAREHOLDER LOANS. Prior to or
contemporaneously with the making of any Subject Loan that is intended to
constitute a Shareholder Loan by any Shareholder Party or any Affiliate of any
Shareholder Party to the Company or any Subsidiary at any time or from time to
time after the date hereof:
(a) the Shareholder Party shall, or shall cause such Affiliate
of such Shareholder Party to, and the Company shall, or shall cause such
Subsidiary to, execute and deliver to the Collateral Agent (A) if such Affiliate
is not then a party to this Agreement, an Accession Agreement substantially in
the form of Exhibit A, (B) an amendment to this Agreement substantially in the
form of Exhibit B, supplementing Schedule 1 hereto to pledge such Subject Loan
as additional Pledged Collateral and (C) an opinion of counsel to the effect
that the Pledging Lender has granted a legal, valid, perfected and first
priority security interest in favor of the Collateral Agent in the loan,
securing the performance of the Secured Obligations, and has completed, or
caused to be completed, all necessary filings and registrations to that effect;
(b) the Shareholder Party shall, or shall cause such Affiliate
of such Shareholder Party to, deliver to the Collateral Agent all notes and
other loan documents from time to time evidencing such Subject Loan, which shall
be in suitable form for transfer by delivery, or be duly endorsed to the order
of the Collateral Agent and in form and substance satisfactory to the Collateral
Agent, together with all Supplemental Documentation;
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(c) the Shareholder Party shall, or shall cause such Affiliate
of such Shareholder Party to, promptly make all registrations and filings,
obtain all Governmental Approvals, and take all other actions that may be
necessary in order for the Security Interest to be perfected or of first
priority or that shall be requested by the Collateral Agent to assure the
priority of the Security Interest therein; and
(d) the Shareholder Party shall, or shall cause such Affiliate
of such Shareholder Party to, execute and deliver to the Collateral Agent a
separate power-of-attorney to the effect set forth in this Section 4.4.
SECTION 5.2. SUBSEQUENT AFFILIATE AGREEMENTS. Prior to or
contemporaneously with the making of any Subject Loan or the entering into of
any Affiliate Agreement by any Affiliate of any Shareholder Party with the
Company or any Subsidiary at any time or from time to time after the date
hereof, such Shareholder Party shall cause such Affiliate of such Shareholder
Party, if such Affiliate Party is not then a party to this Agreement, to, and
the Company shall, or shall cause such Subsidiary to, execute and deliver to the
Collateral Agent (A) an Accession Agreement substantially in the form of Exhibit
A, and (B) an amendment to this Agreement substantially in the form of Exhibit
B, supplementing Schedule 2 hereto to include such Affiliate Agreement.
Contemporaneously with the making of any Subject Loan or the entering into of
any Affiliate Agreement by any Shareholder Party or any Affiliate of any
Shareholder Party at any time or from time to time after the date hereof, if
such Affiliate Party is then a party to this Agreement, Schedule 2 shall be
supplemented to include such Subject Loan or Affiliate Agreement pursuant to the
provisions of Section 9.1.
SECTION 5.3. SUBSEQUENT JUNIOR OBLIGATIONS GENERALLY. Notwithstanding
anything herein to the contrary, the provisions of this Agreement (other than
this Article 5 which shall be binding on each party hereto) will not apply to or
be effective with respect to any Shareholder Party unless and until it has made
a Subject Loan or entered into an Affiliate Agreement, and then only the
provisions of this Agreement (other than this Article 5 which shall be binding
on each party hereto) applicable to the Subject Loan that is intended to
constitute a Shareholder Loan, other Subject Loan or Affiliate Agreement shall
be applicable to the Shareholder Party that made or entered into such Junior
Obligation.
ARTICLE 6.
TERMS OF SUBORDINATION OF JUNIOR OBLIGATIONS
SECTION 6.1. SUBORDINATION OF JUNIOR OBLIGATIONS. Each Shareholder
Party, for itself and its successors and assigns, agrees that, upon and only
upon the making of any Subject Loan or the entering into of any Affiliate
Agreement (a) to the extent and in the manner provided in this Agreement, the
Junior Obligations are hereby expressly made subordinate and subject in right of
payment to the prior Payment in Full of all Senior Obligations, (b) the
subordination is for the benefit of the Pari Passu Secured Parties, (c) the Pari
Passu Secured Parties shall conclusively be deemed to have extended or acquired
the Senior Obligations, whether now outstanding or hereafter created, incurred,
assumed or guarantied, in reliance upon the covenants and provisions contained
in this Agreement and (d) the provisions of this Agreement apply notwithstanding
anything to the contrary in the Junior Documents.
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SECTION 6.2. NO PAYMENTS IN RESPECT OF PLEDGED DEBT, ETC.
(a) The Company shall not make, and no Pledging Lender shall
ask for, take or receive any payment or distribution of any kind or character,
whether in cash, securities or other property, on account of principal, premium,
interest or any other amount constituting or payable with respect to Pledged
Debt, except for payments of interest in the form of additional Pledged Debt,
provided Section 4.1 is complied with.
(b) No Pledging Lender shall accelerate, demand, xxx for,
collect, enforce any claim for or set off with respect to principal, premium,
interest or any other amount constituting or payable with respect to Pledged
Debt, or otherwise exercise any remedy under the Pledged Debt or otherwise
available to it with respect thereto (including filing, taking or maintaining
any proceeding under the Bankruptcy Law against or with respect to the Company
under any Pledged Collateral) or take any other action against the Company or
its property; provided that such Pledging Lender shall file a proof of claim in
respect of the Pledged Collateral in any Insolvency or Liquidation Proceeding or
any similar proceeding as and when required therein. So long as an Acceleration
shall exist, the Collateral Agent, upon notice to such Pledging Lender, shall
have the right to exercise any or all of the foregoing rights and remedies and
to hold as Pledged Collateral any and all cash and other property received in
connection therewith.
(c) All cash and other property required to be delivered to
the Collateral Agent hereunder shall, if received by any Pledging Lender, be
received in trust for the benefit of the Pari Passu Secured Parties, be
segregated from the other property of the Pledging Lenders, and promptly be
delivered to the Collateral Agent in the same form as so received (with any
appropriate endorsements or assignments).
SECTION 6.3. NO PAYMENT ON JUNIOR OBLIGATIONS UNDER SPECIFIED AFFILIATE
AGREEMENTS IN CERTAIN CIRCUMSTANCES.
(a) During the existence of a Default or Event of Default, or
if a Default or Event of Default would result from any such payment or
distribution, giving effect to such payment or distribution on a pro forma basis
as of the last day of the immediately preceding Fiscal Quarter, no direct or
indirect payment or distribution of any kind or character, whether in cash,
securities or other property, shall be made by the Company or any Subsidiary,
and the Affiliate Parties party to such agreement shall not be entitled to
receive or retain any payment or distribution, on account of any Junior
Obligations under any Specified Affiliate Agreement.
(b) The Company shall give prompt written notice to the
Affiliate Parties of the occurrence of any Default or Event of Default. Failure
to give such notice shall not affect the subordination of the Junior Obligations
under Specified Affiliate Agreements to the Senior Obligations as provided
herein.
(c) Promptly after the cessation of an Event of Default, the
Collateral Agent shall send written notice of such cessation to each of the
Affiliate Parties and the Company, and each Affiliate Party shall immediately
and conclusively be entitled to rely on such notice and the Company and each
Subsidiary shall immediately cease to be obligated to comply with Section
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6.3(a), in each case, unless and until the Collateral Agent delivers a
subsequent notice of the occurrence and continuation of a Default or an Event of
Default.
SECTION 6.4. SUBORDINATION OF JUNIOR OBLIGATIONS ON DISSOLUTION,
LIQUIDATION OR REORGANIZATION OF THE COMPANY OR ANY
SUBSIDIARY.
In the event of any Insolvency or Liquidation Proceeding:
(a) Upon any payment or distribution of assets of the Company,
any Subsidiary, or the estate created by the commencement of any such Insolvency
or Liquidation Proceeding, of any kind or character, whether in cash, securities
or other property, the Pari Passu Secured Parties shall first be entitled to
receive Payment in Full of all Senior Obligations, before the Junior Creditors
shall be entitled to receive any payment or distribution on account of
principal, premium, interest or any other amount constituting or payable with
respect to Junior Obligations.
(b) Any payment or distribution of assets of the Company, any
Subsidiary, or the estate created by the commencement of any such Insolvency or
Liquidation Proceeding, of any kind or character, whether in cash, securities or
other property (including any such payment or distribution that may be payable
or deliverable by reason of the payment of any other indebtedness of the Company
or any Subsidiary that is subordinated to the payment of the Junior
Obligations), to which the Junior Creditors would be entitled except for the
provisions of this Section 6.4, shall be paid by the liquidating trustee, agent
or other Person making such payment or distribution directly to the Collateral
Agent, until all Senior Obligations are Paid in Full, after giving effect to any
concurrent payments or distributions with respect to Senior Obligations to or
for the benefit of the Pari Passu Secured Parties.
(c) The Company shall give prompt written notice to the Junior
Creditors of any Insolvency or Liquidation Proceeding. Failure to give such
notice shall not affect the subordination of the Junior Obligations to the
Senior Obligations as provided herein.
SECTION 6.5. LIENS. Each Junior Creditor agrees that the Junior
Obligations shall not be secured by any Liens on assets of the Company or any
Subsidiary.
SECTION 6.6. PAYMENTS UNDER OR AMENDMENTS OR WAIVERS OF AFFILIATE
AGREEMENTS; PAYMENT OF MANAGEMENT FEES.
Each Affiliate Party acknowledges that
(a) except as permitted by Section 5.17 of the Common Terms
Agreement, the Company shall not, and shall not permit any of the
Subsidiaries to, directly or indirectly, (i) advance or prepay any
amount under any Affiliate Agreements or make any prepayment or
distribution that is not required thereunder, or (ii) amend any
Affiliate Agreement in a manner that (x) could reasonably be expected
to have an adverse effect on the rights or remedies of the Pari Passu
Lender Parties or (y) would cause such Affiliate Agreement to violate
the terms of Section 5.11 of the Common Terms Agreement, and
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(b) the Company and its Subsidiaries shall not pay any
management or similar fee under any Affiliate Agreement, other than
pursuant to the Know-How Agreement, the BCI Technical Services
Agreement and the Secondment Agreement, each as in effect on the
Closing Date (to the extent any of these agreements require the payment
of any management fees), or pursuant to a management agreement approved
by the Required Pari Passu Lenders.
ARTICLE 7.
EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT
SECTION 7.1. EVENT OF DEFAULT. The occurrence of one or more "Events of
Default" (as defined in the Common Terms Agreement) shall constitute an "Event
of Default."
SECTION 7.2. REMEDIES. If upon or after the occurrence of any Event of
Default, the Collateral Agent is directed by the Pari Passu Lenders to exercise
remedies under this Agreement (the occurrence of any such event shall be
referred to as an "Acceleration"), then, whether or not all the Secured
Obligations shall have become immediately due and payable:
(a) In addition to all its other rights, powers and remedies
under this Agreement and Applicable Law, each Pari Passu Secured Party shall
have, and may exercise, any and all of the rights, powers and remedies of a Pari
Passu Secured Party under the UCC, all of which rights, powers and remedies
shall be cumulative and not exclusive, to the extent permitted by Applicable
Law.
(b) The Collateral Agent shall have the right, all at the
Collateral Agent's sole option and as the Collateral Agent in its discretion may
deem necessary or advisable, to do any or all of the following:
(i) foreclose the Security Interest by any available
judicial procedure or without judicial process;
(ii) notify the Company that all payments thereon are
to be made directly and exclusively to or as specified by the
Collateral Agent;
(iii) collect by legal proceedings or otherwise all
interest, principal or other sums now or hereafter payable upon or on
account of the Pledged Collateral;
(iv) enter into any extension or reorganization
agreement or any other agreement relating to or affecting the Pledged
Collateral and, in connection therewith, deposit or surrender control
of any Pledged Collateral or accept other property in exchange
therefor;
(v) settle, compromise or release, on terms
acceptable to the Collateral Agent, in whole or in part, any amounts
owing on the Pledged Collateral or any disputes with respect thereto;
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(vi) receive, open and dispose of all mail addressed
to any Pledging Lender and notify postal authorities to change the
address for delivery thereof to such address as the Collateral Agent
may designate, provided that the Collateral Agent agrees that it will
promptly deliver over to such Pledging Lender any such opened mail as
does not relate to the Pledged Collateral; and
(vii) exercise any and all other rights, powers,
privileges and remedies of an owner of the Pledged Collateral, all
without liability except to account for property actually received by
it, but the Collateral Agent shall have no duty to the Pledging Lenders
to exercise any such right, power or privilege and shall not be
responsible for any failure to do so or delay in so doing.
(c) The Collateral Agent shall have the right to sell or
otherwise dispose of all or any Pledged Collateral at public or private sale or
sales, with such notice as may be required by Section 7.4, in lots or in bulk,
at any exchange, over the counter or at any of the Collateral Agent's offices or
elsewhere, for cash or on credit, with or without representations or warranties,
all as the Collateral Agent, in its discretion, may deem advisable. The Pledged
Collateral need not be present at any such sales. If sale of all or any part of
the Pledged Collateral is made on credit or for future delivery, the Pledged
Collateral so sold may be retained by the Collateral Agent until the sale price
is paid by the purchaser thereof, but the Pari Passu Secured Parties shall not
incur any liability in case any such purchaser shall fail to take up and pay for
the Pledged Collateral so sold and, in case of any such failure, such Pledged
Collateral may be sold again upon like notice. The Collateral Agent shall not be
obligated to make any sale of the Pledged Collateral regardless of notice of
sale having been given. The Pari Passu Secured Parties may purchase all or any
part of the Pledged Collateral at public or, if permitted by Applicable Law,
private sale, and in lieu of actual payment of the purchase price, the
Collateral Agent may apply against such purchase price any amount of the Secured
Obligations. Each Pledging Lender agrees that any sale of Pledged Collateral
conducted by the Collateral Agent in accordance with the foregoing provisions of
this Section and Section 5.3 shall be deemed to be a commercially reasonable
sale under Section 9-504 of the UCC.
SECTION 7.3. APPLICATION OF PROCEEDS.
(a) Any cash proceeds received by the Collateral Agent in
respect of any sale of, collection from, or other realization upon, all or any
part of the Pledged Collateral following the occurrence of an Acceleration or
otherwise shall be applied as provided in Article 9 of the Common Terms
Agreement.
(b) Any surplus of cash and any notes and other receivables
held by the Collateral Agent and remaining after payment in full of all the
Secured Obligations shall be reassigned and redelivered as provided in Section
8.7.
(c) Payments received from any third party on account of any
Pledged Collateral shall not reduce the Secured Obligations until paid in cash
to the Collateral Agent. The application of proceeds by the Collateral Agent
shall be without prejudice to the Collateral Agent's rights as against any
Pledging Lender or other Persons with respect to any Secured Obligations that
may then be or remain unpaid.
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(d) If at any time after an Acceleration any Pledging Lender
receives any collections upon or other Proceeds of any Pledged Collateral,
whether in the form of cash, notes or otherwise, such Proceeds shall be received
in trust for the Pari Passu Secured Parties and such Pledging Lender shall keep
all such Proceeds separate and apart from all other funds and property so as to
be capable of identification as the property of the Pari Passu Secured Parties
and promptly deliver such Proceeds to the Collateral Agent in the identical form
received.
SECTION 7.4. NOTICE. Unless the Pledged Collateral is of a type
customarily sold on a recognized market, the Collateral Agent will send or
otherwise make available to the Pledging Lender to which any Pledged Collateral
is payable reasonable notice of the time and place of any public sale or of the
time on or after which any private sale of such Pledged Collateral is to be
made. Each Pledging Lender agrees that any notice required to be given by the
Collateral Agent of a sale or other disposition of Pledged Collateral, or any
other intended action by the Collateral Agent, that is received in accordance
with the provisions set forth in Section 9.3 five days prior to such proposed
action shall constitute commercially reasonable and fair notice thereof to the
Pledging Lenders. The Collateral Agent may adjourn any public or private sale
from time to time by announcement at the time and place fixed therefor and such
sale may, without further notice, be made at the time and place to which it was
so adjourned. Each Pledging Lender hereby waives any right to receive notice of
any public or private sale of any Pledged Collateral or other security for the
Secured Obligations except as expressly provided for in this Section.
ARTICLE 8.
CERTAIN WAIVERS AND AGREEMENTS
SECTION 8.1. RELATIVE RIGHTS; ETC.
(a) This Agreement defines the relative rights of the Junior
Creditors, on the one hand, and the Pari Passu Secured Parties, on the other
hand. Nothing in this Agreement is intended to or shall:
(i) impair, as between the Company or a Subsidiary and
the Junior Creditors, the obligation of the Company, which is absolute
and unconditional, to pay all principal, premium, interest and other
amounts constituting or payable with respect to Junior Obligations as
and when the same shall become due and payable in accordance with the
terms of the Junior Obligations;
(ii) adversely affect the relative rights against the
Company or any Subsidiary of the Junior Creditors and other creditors
of the Company; or
(iii) prevent the Junior Creditors from exercising all
remedies otherwise permitted by Applicable Law upon a default or event
of default under the terms of the Junior Obligations,
subject, however, in each case to (A) the rights of the Pari Passu Secured
Parties under this Agreement to receive payments or distributions otherwise
payable or deliverable to, or received by, the Junior Creditors upon the
exercise of any such remedy, and (B) the restrictions set forth elsewhere in
this Agreement.
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(b) Without limitation, if the Company fails because of this
Agreement to pay principal of or interest on the Junior Obligations on the due
date, such failure shall still be considered a payment default or payment event
of default under such Junior Obligations, as the case may be.
SECTION 8.2. PROVISIONS TO EFFECTUATE SUBORDINATION OF JUNIOR
OBLIGATIONS.
(a) If, notwithstanding the provisions of Section 6.2, any
Pledging Lender, and notwithstanding the provisions of Section 6.3, any
Affiliate Party, shall have received any direct or indirect payment or
distribution of any kind or character, whether in cash, securities or other
property, in contravention of such provisions, then, unless and until such
payment or distribution is no longer prohibited by this Agreement, such payment
or distribution shall be held in trust for the Pari Passu Secured Parties and
shall be promptly paid over to the Collateral Agent, for application to the
payment of the Senior Obligations, until all Senior Obligations shall have been
Paid in Full, after giving effect to any concurrent payments or distributions
with respect to Senior Obligations to or for the benefit of the Pari Passu
Secured Parties.
(b) Each Junior Creditor shall, at its expense, duly and
promptly take (i) such actions as the Collateral Agent may request after the
occurrence and during the continuation of an Event of Default, (A) to collect
the Junior Obligations for the account of the Pari Passu Secured Parties, (B) to
execute and deliver to the Pari Passu Secured Parties such assignments or other
instruments as may be requested in order to enable the Pari Passu Secured
Parties to enforce any and all claims with respect to the Junior Obligations,
(C) to collect and receive any and all payments and distributions that may be
payable or deliverable with respect to the Junior Obligations and to which the
Pari Passu Secured Parties are entitled hereunder and (D) to enable the Pari
Passu Secured Parties to exercise the remedies of the Pari Passu Secured Parties
hereunder; and (ii) such actions as the Collateral Agent may reasonably request,
whether or not an Event of Default shall have occurred and be continuing, to
enable the Pari Passu Secured Parties to exercise the rights of the Pari Passu
Secured Parties hereunder or to carry out the provisions and intent of this
Agreement.
(c) Each Junior Creditor hereby irrevocably appoints the
Collateral Agent and its employees and agents as such Junior Creditor's true and
lawful attorneys-in-fact, with full power of substitution, to (i) do all things
required to be done by such Junior Creditor under this Agreement, and (ii)
enable the Pari Passu Secured Parties to exercise the rights and remedies of the
Pari Passu Secured Parties hereunder (including under Section 8.2(d)) or to
carry out the provisions and intent of this Agreement.
(d) In the event of any Insolvency or Liquidation Proceeding,
the Collateral Agent is irrevocably authorized and empowered, in its discretion,
to the exclusion of the Junior Creditors, to (i) make and present for and on
behalf of the Junior Creditors such proofs of claim on account of the Junior
Obligations or other motions or pleadings as the Collateral Agent may deem
expedient or proper, (ii) vote such claims in any such proceeding, (iii) demand,
xxx for, collect and receive any and all payments or distributions with respect
to Junior Obligations in whatever form, give acquittance therefor, and apply
such payments or distributions on account of the Senior Obligations, and (iv)
take such other actions, in the name of the Pari Passu Secured Parties, the
Junior Creditors or otherwise, as the Collateral Agent may deem necessary or
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advisable for the enforcement of this Agreement. To the extent that payments or
distributions are made in property other than cash, the Junior Creditors
irrevocably authorizes the Collateral Agent to sell such property to such buyers
and on such terms as the Collateral Agent, in its discretion, shall determine.
(d) Each Junior Creditor agrees not to (i) take, or cause to
be taken, any action (A) to challenge the legality, validity, enforceability, or
amount of the Senior Obligations or (B) the purpose or effect of which would
give the Junior Obligations a preference or priority over any Senior
Obligations, (ii) induce any other Person to take such action or (iii) cooperate
with any other Person in taking such action.
SECTION 8.3. NATURE OF AGREEMENT. This Agreement, and the liability of
each Junior Creditor hereunder, is independent of and not in consideration of or
contingent upon the liability of the Company, any Subsidiary Guarantor or any
other Person directly or indirectly liable on the Senior Obligations or the
Secured Obligations or any portion thereof (a "Guarantor;" each of the Company
and the Guarantors is referred to herein as an "Obligor") and this Agreement may
be enforced, Foreclosure Action or other action may be taken against all or any
Pledged Collateral, whether or not action is brought or prosecuted against the
Company or any other Obligor or whether the Company or any other Obligor is
joined in any such action or whether any Foreclosure Action or other action is
taken with respect to any collateral for the Senior Obligations (the "Senior
Collateral") or any other collateral. This Agreement shall be construed as
continuing, absolute and unconditional without regard to:
(a) the legality, validity or enforceability of the
Common Terms Agreement or any other Senior Document, any Senior
Obligations (which term, for purposes of Sections 8.3 through 8.8,
shall include all Secured Obligations), any Lien or Senior Collateral
or any guaranty of the Senior Obligations or any part thereof (a
"Guaranty");
(b) any defense (other than payment), setoff or
counterclaim that may at any time be available to the Company or any
other Obligor against, and any right of setoff at any time held by, any
Pari Passu Secured Party;
(c) any act or failure to act on the part of the
Company or any other Obligor or any Pari Passu Secured Party, or any
noncompliance by the Company or any other Obligor with the provisions
and covenants of, or any other default under, the Common Terms
Agreement or any other Senior Document, regardless of any knowledge
thereof that any Pari Passu Secured Party may have or be otherwise
charged with;
(d) any increase, decrease or other change in the
amount of time, manner or place of payment of the Senior Obligations or
any part thereof or other amendment to the terms and conditions of the
Common Terms Agreement, any other Senior Document or any provision
thereof;
(e) any exchange, release (whether intentionally or
unintentionally), or non-perfection of any Lien on any other collateral
or any part thereof or any release of or
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settlement with any Obligor in respect of this Agreement, any other
guaranty or any of the Senior Obligations;
(f) any requirement of marshaling or other election
of remedies by any Pari Passu Secured Party;
(g) any failure to exercise, waiver or termination,
of any of the remedies or rights of any Pari Passu Secured Party
against the Company or any other Obligor in respect of any Senior
Obligations or any other collateral; or
(h) any other circumstance whatsoever (with or
without notice to or knowledge of any Junior Creditor or any other
Obligor), whether or not similar to any of the foregoing, that
constitutes, or might be construed to constitute, an equitable or legal
discharge of the Company or any other Obligor for the Senior
Obligations, in bankruptcy or in any other instance.
SECTION 8.4. AUTHORIZATION. Each Junior Creditor authorizes each Pari
Passu Secured Party, without notice to or further assent by any Junior Creditor,
and without affecting any Junior Creditor's liability hereunder (regardless of
whether any subrogation or similar right that such Junior Creditor may have or
any other right or remedy of such Junior Creditor is extinguished or impaired or
the ultimate recovery by any Junior Creditor is reduced or eliminated), from
time to time to:
(a) permit the Company or any other Obligor to
increase or create Senior Obligations, or terminate, release,
compromise, subordinate, extend, accelerate or otherwise change the
amount or time, manner or place of payment of, or rescind any demand
for payment or acceleration of, the Senior Obligations or any part
thereof (including increasing or decreasing the rate of interest
thereon), or otherwise amend the terms and conditions of Common Terms
Agreement, any other Senior Document or any provision thereof;
(b) take and hold Senior Collateral from the Company
or any other Person, perfect or refrain from perfecting a Lien on such
Senior Collateral, and exchange, enforce, subordinate, release (whether
intentionally or unintentionally), or take or fail to take any other
action in respect of, any such Senior Collateral or Lien or any part
thereof;
(c) exercise in such manner and order as it elects in
its discretion, fail to exercise, waive, suspend, terminate or suffer
expiration of, any of the remedies or rights of such Pari Passu Secured
Party against the Company or any other Obligor or any Senior
Collateral;
(d) release, add or settle with any such other
Obligor in respect of any Guaranty, the Senior Obligations;
(e) accept partial payments on the Senior Obligations
and apply any and all payments or recoveries from any Obligor or Senior
Collateral to such of the Senior Obligations as any Pari Passu Secured
Party may elect in its discretion, whether or not such Senior
Obligations are otherwise secured or guarantied;
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(f) refund at any time, at such Pari Passu Secured
Party's discretion, any payments or recoveries received by such Pari
Passu Secured Party in respect of any Senior Obligations or Senior
Collateral; and
(g) otherwise deal with the Company, any other
Obligor and any Senior Collateral as such Pari Passu Secured Party may
elect in its sole discretion.
SECTION 8.5. CERTAIN WAIVERS.
(a) Each Junior Creditor waives:
(i) all rights and benefits under Applicable Law
purporting to reduce a guarantor's obligations in proportion to the
obligation of the principal or providing that the obligation of a
surety or guarantor must neither be larger nor in other respects more
burdensome than that of the principal;
(ii) the benefit of any statute of limitations
affecting the Senior Obligations or any Junior Creditor's liability
hereunder;
(iii) any requirement of marshaling or any other
principle of election of remedies;
(iv) any right to assert against any Pari Passu
Secured Party any defense (legal or equitable), setoff, counterclaim
and other right that any Junior Creditor may now or any time hereafter
have against the Company or any other Obligor;
(v) presentment, demand for payment or performance
(including diligence in making demands hereunder), notice of dishonor
or nonperformance, protest, acceptance and notice of acceptance of this
Agreement, and all other notices of any kind, including (A) notice of
the existence, creation or incurrence of new or additional Senior
Obligations, (B) notice of any action taken or omitted by the Pari
Passu Secured Parties in reliance hereon, (C) notice of any default by
the Company or any other Obligor, (D) notice that any portion of the
Senior Obligations is due, and (E) notice of any action against the
Company or any other Obligor, or any enforcement or other action with
respect to any Senior Collateral, or the assertion of any right of any
Pari Passu Secured Party hereunder; and
(vi) all defenses that at any time may be available
to any Junior Creditor by virtue of any valuation, stay, moratorium or
other law now or hereafter in effect.
(b) The Junior Creditors waive specifically (i) the right to
seek to give credit (secured or otherwise) to the Company in any way under
Section 364 of the Bankruptcy Law unless the same is subordinated in all
respects to all Senior Obligations in accordance with the terms and conditions
of this Agreement; (ii) the right to take a position inconsistent with or
contrary to that of the Pari Passu Secured Parties (including a position by the
Pari Passu Secured Parties to take no action) if the Company seeks to use, sell
or lease Pledged Collateral (or the proceeds thereof) under Section 363 of the
Bankruptcy Law or seeks to accept or reject any executory contract or lease
under Section 365 of the Bankruptcy Law; and (iii) the right to
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receive any collateral (including any "super priority" or equal or "priming" or
replacement Lien) for the Junior Obligations.
SECTION 8.6. NO SUBROGATION; CERTAIN AGREEMENTS.
(a) EACH JUNIOR CREDITOR WAIVES ANY AND ALL RIGHTS OF
SUBROGATION, INDEMNITY, CONTRIBUTION OR REIMBURSEMENT, ANY BENEFIT OF, OR RIGHT
TO ENFORCE, ANY REMEDY THAT THE PARI PASSU SECURED PARTIES NOW OR HEREAFTER MAY
HAVE AGAINST THE COMPANY OR ANY OTHER OBLIGOR (OTHER THAN RIGHTS OF CONTRIBUTION
FROM OBLIGORS OTHER THAN THE COMPANY) OR ANY OTHER PERSON IN RESPECT OF THE
SENIOR OBLIGATIONS, ANY BENEFIT OF, AND ANY RIGHT TO PARTICIPATE IN, ANY
COLLATERAL OR SECURITY, WHETHER REAL OR PERSONAL PROPERTY, NOW OR HEREAFTER HELD
BY ANY PARI PASSU SECURED PARTY AND ANY AND ALL OTHER RIGHTS AND CLAIMS (AS
DEFINED IN THE BANKRUPTCY LAW) ANY PARI PASSU SECURED PARTY MAY HAVE AGAINST THE
COMPANY OR ANY OTHER OBLIGOR, UNDER APPLICABLE LAW OR OTHERWISE, UNLESS AND
UNTIL THE SENIOR OBLIGATIONS SHALL HAVE BEEN PAID IN FULL. If, notwithstanding
the foregoing, any amount shall be paid to any Junior Creditor on account of any
such rights at any time, such amount shall be held in trust for the benefit of
the Pari Passu Secured Parties and shall forthwith be paid to the Collateral
Agent to be held as Senior Collateral or credited and applied in accordance with
the terms of the Senior Documents upon the Senior Obligations, whether matured,
unmatured, absolute or contingent, in the Collateral Agent's discretion.
(b) Each Junior Creditor assumes the responsibility for being
and keeping itself informed of the financial condition of the Company and each
other Obligor and of all other circumstances bearing upon the risk of nonpayment
of the Senior Obligations that diligent inquiry would reveal, and agrees that
the Pari Passu Secured Parties shall have no duty to advise the Junior Creditor
of information regarding such condition or any such circumstances.
SECTION 8.7. BANKRUPTCY NO DISCHARGE.
(a) Without limiting Section 8.3, this Agreement shall not be
discharged or otherwise affected by any Insolvency or Liquidation Proceeding
commenced by or against the Company or any other Obligor, including (i) any
discharge of, or bar or stay against collecting, all or any part of the Senior
Obligations in or as a result of any such proceeding, whether or not assented to
by any Pari Passu Secured Party, (ii) any disallowance of all or any portion of
any Pari Passu Secured Party's claim for repayment of the Senior Obligations,
(iii) any use of cash or other Senior Collateral in any such proceeding under US
Bankruptcy Law, (iv) any agreement or stipulation as to adequate protection in
any such proceeding under US Bankruptcy Law, (v) any failure by any Pari Passu
Secured Party to file or enforce a claim against the Company or any other
Obligor or its estate in any such proceeding, (vi) any amendment, modification,
stay or cure of any Pari Passu Secured Party's rights that may occur in any such
proceeding, (vii) any election by any Pari Passu Secured Party under Section
1111(b)(2) of US Bankruptcy Law, or (viii) any borrowing or grant of a Lien
under Section 364 of US Bankruptcy Law. Each Junior Creditor understands and
acknowledges that, by virtue of this Agreement, it has specifically
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309
assumed any and all risks of any such proceeding with respect to the Company and
each other Obligor.
(b) Any Event of Default under Section 6.1(f) and (g) of the
Common Terms Agreement shall render all Senior Obligations automatically due and
payable for purposes of this Agreement.
SECTION 8.8. TRANSFEREES OF JUNIOR CREDITORS; NOTICE OF SUBORDINATION.
(a) No Junior Creditor shall at any time assign, grant
participations in, encumber or otherwise dispose of, all or any portion of the
Junior Documents or any Junior Obligations, except if, in the case of an
assignment or participation only, any such assignee or participant shall have
assumed, in a writing satisfactory to the Collateral Agent, all the obligations
of the Junior Creditor under this Agreement.
(b) Each Junior Creditor will place on each promissory note or
other instrument subordinated hereunder a conspicuous legend stating that it is
subject to this Agreement.
(c) Each Junior Creditor warrants and represents that (i) it
has not previously assigned or otherwise disposed of any interest in the Junior
Obligations, and (ii) no party owns an interest in the Junior Obligations other
than the Junior Creditors.
ARTICLE 9.
GENERAL
SECTION 9.1. AMENDMENTS AND OTHER MODIFICATIONS. No amendment of any
provision of this Agreement (including a waiver thereof or consent relating
thereto) shall be effective unless the same shall be in writing and signed by
the Collateral Agent, any Junior Creditor affected thereby and, if the rights or
obligations of the Company are materially affected thereby, the Company,
provided that the foregoing shall not apply to (a) the addition of any Junior
Creditor pursuant to an Accession Agreement duly executed and delivered by the
Company, any Subsidiary party to the related Junior Documents, the Collateral
Agent and such Junior Creditor or (b) the supplementation of Schedule 1 or
Schedule 2 pursuant to Article 5. Any waiver or consent relating to any
provision of this Agreement shall be effective only in the specific instance and
for the specific purpose for which given. No notice to or demand on the Junior
Creditors in any case shall entitle the Junior Creditors to any other or further
notice or demand in similar or other circumstances.
SECTION 9.2. CUMULATIVE REMEDIES; FAILURE OR DELAY. The rights and
remedies provided for under this Agreement are cumulative and are not exclusive
of any rights and remedies that may be available to the Pari Passu Secured
Parties under Applicable Law, the other Senior Documents or otherwise. No
failure or delay on the part of the Pari Passu Secured Parties in the exercise
of any power, right or remedy under this Agreement shall impair such power,
right or remedy or shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or remedy preclude other or further
exercise of such or any other power, right or remedy.
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SECTION 9.3. NOTICES, ETC. All notices and other communications under
this Agreement shall be in writing and shall be personally delivered or sent by
prepaid courier, by overnight, registered or certified mail (postage prepaid) or
by facsimile, and shall be deemed given when received by the intended recipient
thereof. Unless otherwise specified in a notice given in accordance with the
foregoing provisions of this Section 9.3, notices and other communications shall
be given to the parties hereto at their respective addresses (or to their
respective facsimile numbers) indicated on Schedule 1.1(a) to the Common Terms
Agreement (in the case of the Collateral Agent), Schedule 10.4 to the Common
Terms Agreement (in the case of the Company or HoldCo) or Schedule 9.3 hereto
(in the case of any Shareholder Party).
SECTION 9.4. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and, subject to the next sentence, inure to the benefit of the Junior
Creditors, the Pari Passu Secured Parties, the Company, the Subsidiaries and
their respective successors and assigns. Neither any Junior Creditor nor the
Company or any Subsidiary shall assign or transfer any of its rights or
obligations hereunder without the prior written consent of the Collateral Agent.
The benefits of this Agreement shall pass automatically with any assignment of
the Senior Obligations or the Secured Obligations (or any portion thereof), to
the extent of such assignment.
SECTION 9.6. PAYMENTS SET ASIDE. Notwithstanding anything to the
contrary herein contained, this Agreement, the Secured Obligations and the
Security Interest and the subordinations hereunder shall continue to be
effective or be reinstated, as the case may be, if at any time any payment, or
any part thereof, of any or all of the Senior Obligations or the Secured
Obligations are rescinded, invalidated, declared to be fraudulent or
preferential or otherwise required to be restored or returned by any Pari Passu
Secured Party in connection with any Insolvency or Liquidation Proceeding
involving the Company, any other Obligor, any Pledging Lender or any other party
liable with respect to the Senior Obligations or the Secured Obligations or
otherwise, if the proceeds of any Pledged Collateral are required to be returned
by such Pari Passu Secured Party under any such circumstances, or if any Pari
Passu Secured Party elects to return any such payment or proceeds or any part
thereof in its sole discretion, all as though such payment had not been made or
such proceeds not been received. Without limiting the generality of the
foregoing, if prior to any such rescission, invalidation, declaration,
restoration or return, this Agreement shall have been canceled or surrendered or
the Security Interest or any Pledged Collateral shall have been released or
terminated in connection with such cancellation or surrender, this Agreement and
the Security Interest and such Pledged Collateral shall be reinstated in full
force and effect, and such prior cancellation or surrender shall not diminish,
discharge or otherwise affect the obligations of the Pledging Lenders in respect
of the amount of the affected payment or application of proceeds, the Security
Interest or such Pledged Collateral.
SECTION 9.6. CONTINUING AGREEMENT OF SUBORDINATION; CONTINUING SECURITY
INTEREST; TERMINATION.
(a) This Agreement shall create a continuing agreement of
subordination of the Junior Obligations and a continuing security interest in
the Pledged Collateral and, except as provided below, the Security Interest and
all agreements, representations and warranties made herein shall survive until,
and this Agreement shall terminate only upon, the indefeasible
27
311
Payment in Full of the Senior Obligations and the Secured Obligations and
termination of all financing arrangements between the Company and the Pari Passu
Secured Parties.
(b) Any investigation at any time made by or on behalf of the
Pari Passu Secured Parties shall not diminish the right of the Pari Passu
Secured Parties to rely on the agreements, representations or warranties set
forth herein.
(c) After termination of this Agreement, the Collateral Agent
shall, upon the request and at the expense of the Pledging Lenders, forthwith
assign, transfer and deliver to such Pledging Lender its order, against receipt
and without recourse to the Pari Passu Secured Parties, such of the Pledged
Collateral as may be in possession of the Collateral Agent and as shall not have
been sold or otherwise applied pursuant to the terms hereof, together with
proper instruments (including UCC termination statements on Form UCC-2 or such
other form as may be appropriate in any jurisdiction) acknowledging the
termination of this Agreement.
SECTION 9.7. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (OTHER THAN
CHOICE OF LAW RULES THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANY OTHER
JURISDICTION).
SECTION 9.8. CHOICE OF FORUM.
(a) Pursuant to Section 5-1402 of the New York General
Obligations Law, all actions or proceedings arising in connection with this
Agreement shall be tried and litigated in, and the Company, each of the Pari
Passu Secured Parties and each of the Junior Creditors hereby consent to the
non-exclusive jurisdiction of, state or federal courts located in the Borough of
Manhattan, New York City, State of New York, unless such actions or proceedings
are required to be brought in another court to obtain subject matter
jurisdiction over the matter in controversy. EACH OF THE JUNIOR CREDITORS AND
THE PARI PASSU SECURED PARTIES WAIVES ANY RIGHT IT MAY HAVE TO ASSERT THE
DOCTRINE OF FORUM NON CONVENIENS, TO ASSERT THAT IT IS NOT SUBJECT TO THE
JURISDICTION OF SUCH COURTS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING
IS BROUGHT IN ACCORDANCE WITH THIS SECTION.
(b) Each Junior Creditor hereby irrevocably appoints CT
Corporation Systems (which has consented thereto) with offices on the date
hereof at 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as its Process Agent (the
"Process Agent") to receive for and on behalf of such Junior Creditor service of
process in the County of New York relating to this Agreement. SERVICE OF PROCESS
IN ANY ACTION OR PROCEEDING AGAINST ANY JUNIOR CREDITOR MAY BE MADE ON THE
PROCESS AGENT BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY
ANY OTHER METHOD OF SERVICE PROVIDED FOR UNDER APPLICABLE LAWS IN EFFECT IN THE
STATE OF NEW YORK, AND THE PROCESS AGENT IS HEREBY AUTHORIZED AND DIRECTED TO
ACCEPT SUCH SERVICE FOR AND ON BEHALF OF SUCH JUNIOR CREDITOR AND TO ADMIT
SERVICE WITH RESPECT THERETO. SUCH SERVICE UPON THE PROCESS AGENT SHALL BE
DEEMED EFFECTIVE PERSONAL SERVICE ON SUCH JUNIOR CREDITOR, SUFFICIENT
28
312
FOR PERSONAL JURISDICTION, 10 DAYS AFTER MAILING, AND SHALL BE LEGAL AND BINDING
UPON SUCH JUNIOR CREDITOR FOR ALL PURPOSES, NOTWITHSTANDING ANY FAILURE OF THE
PROCESS AGENT TO MAIL COPIES OF SUCH LEGAL PROCESS TO SUCH JUNIOR CREDITOR, OR
ANY FAILURE ON THE PART OF SUCH JUNIOR CREDITOR TO RECEIVE THE SAME. Each Junior
Creditor confirms that it has instructed the Process Agent to mail to such
Junior Creditor, upon service of process being made on the Process Agent
pursuant to this Section, a copy of the summons and complaint or other legal
process served upon it, by registered mail, return receipt requested, at such
Junior Creditor's address set forth in either Schedule 10.4 to the Common Terms
Agreement or Schedule 9.3 hereto, or to such other address as such Junior
Creditor may notify the Process Agent in writing. Each Junior Creditor agrees
that it will at all times maintain a process agent to receive service of process
in the County of New York on its behalf with respect to this Agreement. If for
any reason the Process Agent or any successor thereto shall no longer serve as
such process agent or shall have changed its address without notification
thereof to the Collateral Agent, such Junior Creditor, immediately after gaining
knowledge thereof, irrevocably shall appoint a substitute process agent
acceptable to the Collateral Agent in the County of New York and advise the
Collateral Agent thereof.
(c) Nothing contained in this Section shall preclude any Pari
Passu Secured Party from bringing any action or proceeding arising out of or
relating to this Agreement in the courts of any place where any Junior Creditor
or any of its assets may be found or located.
SECTION 9.9. MAXIMUM LIABILITY OF JUNIOR CREDITORS. The aggregate
amount of payments or distributions with respect to Junior Obligations held by
any Junior Creditor that is not a direct or indirect owner of Capital Stock of
the Company that the Pari Passu Secured Parties shall be entitled to receive
under this Agreement, and the Security Interest in the Pledged Debt owed to any
such Junior Creditor, shall be limited to an aggregate amount equal to the
largest amount that would not render its obligations hereunder subject to
avoidance under Section 548 of the Bankruptcy Law or any applicable provisions
of comparable state law.
SECTION 9.10. HEADINGS. The Article and Section headings used in this
Agreement are for convenience of reference only and shall not affect the
construction hereof.
SECTION 9.11. SEVERABILITY. If any provision of this Agreement shall be
held to be invalid, illegal or unenforceable under Applicable Law in any
jurisdiction, such provision shall be ineffective only to the extent of such
invalidity, illegality or unenforceability, which shall not affect any other
provisions hereof or the validity, legality or enforceability of such provision
in any other jurisdiction.
SECTION 9.12. EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement. This Agreement
shall become effective upon the execution of a counterpart hereof by each of the
parties hereto.
SECTION 9.13. COMPLETE AGREEMENT. This Agreement, together with the
exhibits and schedules hereto, is intended by the parties as a final expression
of their agreement regarding the
29
313
subject matter hereof and as a complete and exclusive statement of the terms and
conditions of such agreement.
SECTION 9.14. LIMITATION OF LIABILITY. No claim shall be made by any
Junior Creditor against the Pari Passu Secured Parties or the Affiliates,
directors, officers, employees or agents of the Pari Passu Secured Parties for
any special, indirect, consequential or punitive damages in respect of any claim
for breach of contract or under any other theory of liability arising out of or
related to the transactions contemplated by this Agreement and the other Pari
Passu Financing Documents, or any act, omission or event occurring in connection
therewith; and each Junior Creditor hereby waives, releases and agrees not to
xxx upon any claim for any such damages, whether or not accrued and whether or
not known or suspected to exist in its favor.
SECTION 9.15. CONFLICTING AGREEMENTS; COLLATERAL SPECIFICALLY COVERED
BY OTHER AGREEMENTS. To the extent the terms and provisions of this Agreement
conflict with the terms and provisions of the Common Terms Agreement or any
other Senior Document, the terms and provisions of this Agreement shall govern
as they relate to the Pledged Collateral.
SECTION 9.16. WAIVER OF TRIAL BY JURY. EACH JUNIOR CREDITOR AND THE
PARI PASSU SECURED PARTIES WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY ACTION
UNDER THIS AGREEMENT OR ANY ACTION ARISING OUT OF THE TRANSACTIONS CONTEMPLATED
HEREBY, REGARDLESS OF WHICH PARTY INITIATES SUCH ACTION OR ACTIONS.
30
314
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date first set forth above.
VESPER HOLDING S.A., a sociedade anonima
organized under the laws of Brazil
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
-----------------------------------------
WITNESS
-----------------------------------------
WITNESS
XXXX CANADA INTERNATIONAL (BRAZIL
TELECOM I) LIMITED, a British Virgin
Islands company
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
31
315
QUALCOMM DO BRASIL LTDA., a limitada
organized under the laws of Brazil
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
-----------------------------------------
WITNESS
-----------------------------------------
WITNESS
VELOCOM CAYMAN BRASIL HOLDINGS, a
Cayman Islands company
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
XXXX CANADA INTERNATIONAL INC.,
a Canadian corporation
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
VELOCOM INC.,
a Delaware corporation
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
32
316
XXXXXXXX XXXXXXXXXXXX, a Delaware
corporation
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
LASALLE BANK NATIONAL ASSOCIATION
as Collateral Agent
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
AGREED TO AND ACCEPTED AS
OF THE DATE OF THIS
AGREEMENT:
COMPANY:
XXXXXX X.X., a sociedade anonima
organized under the laws of Brazil
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
----------------------------------
Witness
----------------------------------
Witness
33
317
EXHIBIT A
ACCESSION AGREEMENT
THIS ACCESSION AGREEMENT (this "Agreement"), dated as of
________________, is entered into by and among XXXXXX X.X., a sociedade anonima
organized under the laws of Brazil (the "Company"), LASALLE BANK NATIONAL
ASSOCIATION, as collateral agent and common administrative agent (the
"Collateral Agent"), and _______________ (the "Junior Creditor").
Capitalized terms not otherwise defined herein shall have the meanings
set forth in that certain Shareholder Pledge and Subordination Agreement, dated
as of December 17, 1999 (the "Shareholder Pledge Agreement"), among the Company
and the corporations or other entities named as Pledging Lenders therein, the
natural persons and/or the corporations or other entities named as Affiliate
Parties therein and the Collateral Agent, as agent and representative for the
institutions that now or in the future are parties to the Common Terms Agreement
described therein, to which Shareholder Pledge Agreement this Accession
Agreement has been appended pursuant to Section 4.1 thereof.
RECITALS
A. Pursuant to the Common Terms Agreement, under certain
circumstances the Company may incur Shareholder Loans from any Pledging Lender
or Affiliate Loans from any Affiliate Lender and the Company or any Subsidiary
may enter into Affiliate Agreements with any Affiliate Party. The Shareholder
Pledge Agreement contemplates that a Pledging Lender, an Affiliate Lender or an
Affiliate Party will enter into an Accession Agreement pursuant to which such
Pledging Lender, Affiliate Lender or Affiliate Party will agree to be bound by
the terms and conditions set forth in the Shareholder Pledge Agreement as if an
original party thereto.
B. The undersigned Junior Creditor is (check applicable):
_____ a Pledging Lender, including in respect of the
Shareholder Loan described on Schedule 1 hereto (and the
Pledging Lender is also entering into an Amendment to the
Shareholder Pledge Agreement supplementing Schedule 1 thereto
with the information shown on Schedule 1 hereto);
_____ an Affiliate Party in respect of the Specified
Affiliate Agreement described on Schedule 1 hereto (and
Schedule 2 thereto shall be supplemented with the information
shown on Schedule 1 hereto); or
Shareholder Pledge and Subordination Agreement
Exhibit A
i
318
_____ an Affiliate Party in respect of an Affiliate
Agreement (other than a Specified Affiliate Agreement) or
Subject Loan described on Schedule 1 hereto (and Schedule 2
thereto shall hereby be supplemented with the information
shown on Schedule 1 hereto); or
C. By this Accession Agreement, the undersigned Junior Creditor and the
Company (and the relevant Subsidiary, if any) desire to acknowledge and affirm
the terms and conditions set forth in the Shareholder Pledge Agreement
applicable to the Junior Creditor and the Junior Obligations.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein and intending to be legally bound
hereby, the parties hereto hereby covenant and agree as follows:
1. The [Pledging Lender or Affiliate Party] hereby agrees to
be bound by the Shareholder Pledge Agreement as if an original party
thereto and is attaching hereto the powers of attorney required by
Section 4.4 and 8.2(c) of the Shareholder Pledge Agreement.
2. The [Pledging Lender or Affiliate Party] hereby makes, as
of the date hereof, all representations and warranties set forth in
Section [3.1 or 3.2] of the Shareholder Pledge Agreement.
3. The Shareholder Pledge Agreement and this Accession
Agreement set forth the entire agreement and understanding between the
parties as to the subject matter hereof and supersede all prior and
contemporaneous discussions, agreements and understandings of any and
every nature among them.
4. This Accession Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and all
of which together shall be deemed to be one and the same instrument,
and shall become effective when one or more counterparts have been
signed by each of the parties.
Shareholder Pledge and Subordination Agreement
Exhibit A
ii
319
IN WITNESS WHEREOF, the undersigned have executed this Accession
Agreement as of the date set forth above.
VESPER HOLDING S.A., a sociedade anonima
organized under the laws of Brazil
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
-----------------------------------------
WITNESS
-----------------------------------------
WITNESS
Shareholder Pledge and Subordination Agreement
Exhibit A
iii
320
LASALLE BANK NATIONAL ASSOCIATION
as Collateral Agent
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
[JUNIOR CREDITOR]
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Shareholder Pledge and Subordination Agreement
Exhibit A
iv
321
EXHIBIT B
FORM OF AMENDMENT
TO
SHAREHOLDER PLEDGE
AND
SUBORDINATION AGREEMENT
This ______ Amendment to the Shareholder Pledge and Subordination
Agreement (this "Amendment") is made as of ________, ___ by and among
a. The undersigned Pledging Lender;
x. XXXXXX S.A., a sociedade anonima organized under the laws
of Brazil (the "Company"); and
x. XXXXXXX BANK NATIONAL ASSOCIATION, ("LaSalle"), as
collateral agent and common administrative agent for the "Pari Passu
Facility Agents" under the "Pari Passu Financing Agreements" (each
referred to below) that now or in the future are parties to the Common
Terms Agreement described below, and the creditors from time to time
under the Pari Passu Financing Agreements (the "Pari Passu Creditors")
(in such capacity, LaSalle, or any successor in such capacity, is
referred to herein as the "Collateral Agent").
R E C I T A L S
A. Pursuant to the Pari Passu Financing Agreements referred to in the
Common Terms Agreement dated ____________, 1999 (as amended from time to time,
the "Common Terms Agreement") by and among the Company, the Pari Passu Facility
Agents and the Collateral Agent, the Pari Passu Creditors have agreed to make
certain credit facilities available to the Company subject to the conditions set
forth therein and subject to increase under certain circumstances set forth
therein;
B. Pursuant to a condition to the extension of the credit facilities to
be made available by the Pari Passu Creditors, certain Shareholder Parties
entered into a Shareholder Pledge and Subordination Agreement dated ________,
1999 with the Company and the Collateral Agent (the "Shareholder Pledge
Agreement"); and
C. Pursuant to the Shareholder Pledge Agreement, the Company and the
Pledging Lender, or an Affiliate of the Pledging Lender that is a party to the
Shareholder Pledge Agreement, have agreed, prior to or contemporaneously with
the incurrence of any additional Subject Loan, executed and deliver or to cause
the relevant Pledging Lender to execute and
Shareholder Pledge and Subordination Agreement
Exhibit B
i
322
deliver to the Collateral Agent this Amendment in order to give the Collateral
Agent a perfected first priority pledge in the Pledged Collateral;
NOW, THEREFORE, the parties hereto enter into this Amendment under the
following terms and conditions:
1. Capitalized terms used and not otherwise defined herein shall have
the meaning ascribed to them in the Shareholder Pledge Agreement.
2. Schedule 1 to the Shareholder Pledge Agreement is hereby
supplemented by Schedule 1 attached hereto which shall be part of Schedule 1 to
the Shareholder Pledge Agreement for all purposes thereof. Without limitation,
the indebtedness listed on Schedule 1 hereto shall constitute Pledged Debt for
purposes of, and is hereby pledged by the undersigned Pledging Lender to the
Collateral Agent pursuant to, Section 5.1 of the Shareholder Pledge Agreement.
3. The Pledging Lender hereby makes, as of the date hereof and after
giving effect to this Amendment), all representations and warranties set forth
in Section [3.1 or 3.2] of the Shareholder Pledge Agreement.
4. All provisions of the Shareholder Pledge Agreement not amended or
modified herein shall remain in full force and effect in accordance with the
terms of the Shareholder Pledge Agreement.
5. The Shareholder Pledge Agreement and this Amendment set forth the
entire agreement and understanding between the parties as to the subject matter
hereof and supersede all prior and contemporaneous discussions, agreements and
understandings of any and every nature among them.
6. This Amendment may be executed in two or more counterparts, each of
which shall be deemed to be an original and all of which together shall be
deemed to be one and the same instrument, and shall become effective when one or
more counterparts have been signed by each of the parties.
IN WITNESS WHEREOF, the undersigned have caused this instrument to be
duly executed in the presence of the undersigned witnesses.
Shareholder Pledge and Subordination Agreement
Exhibit B
ii
323
VESPER HOLDING S.A., a sociedade anonima
organized under the laws of Brazil
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
-----------------------------------------
WITNESS
-----------------------------------------
WITNESS
Shareholder Pledge and Subordination Agreement
Exhibit B
iii
324
LASALLE BANK NATIONAL ASSOCIATION
as Collateral Agent
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
[PLEDGING LENDER]
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Shareholder Pledge and Subordination Agreement
Exhibit B
iv
325
FORM OF BRAZILIAN SHAREHOLDER PLEDGE AGREEMENT
Shareholder Pledge and Subordination Agreement
Exhibit B
v
326
SCHEDULE 9.3.
ADDRESSES
XXXX CANADA INTERNATIONAL (BRAZIL TELECOM I) LIMITED
Arawak Xxxxxxxx
Road Town, Tortola
British Virgin Islands
Attention: Secretary
XXXX CANADA INTERNATIONAL INC.
0000 xx xx Xxxxxxxxxxx Xx. Xxxx
Xxxxx 0000
Xxxxxxxx, Xxxxxx X0X0X0
Fax: (000) 000-0000
Attention: Vice President, Law and Corporate Secretary
VELOCOM INC.
0000 X. Xxxxxxx'x Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
Phone: (000) 000-0000
Attn: Xxxxxxx X. Xxxxx
VELOCOM CAYMAN BRASIL HOLDINGS
XXXXXX AND CALDER
Xxxxxx House
P.O. Box 309
GRAND CAYMAN, CAYMAN ISLANDS
Fax: (000) 000-0000
Phone: (000) 000-0000
cc: Xxxxxxx X. Xxxxx
0000 X. Xxxxxxx'x Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
327
Fax: (000) 000-0000
Phone: (000) 000-0000
XXXXXXXX XXXXXXXXXXXX
0000 Xxxxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Fax: (000) 000-0000
Phone: (000) 000-0000
Attn: Xxxx Xxxxxxxx; Vice President Project Finance & Direct Investments
QUALCOMM DO BRASIL LTDA.
Av. Eng. Xxxx Xxxxxx Xxxxxxx, 550 8(0) andar
04571-000 Sao Paulo, SP, Brasil
Fax: (5511) 0000-0000
Phone: (5511) 0000-0000 / 5503-4500
Attn: Xxxxxx Xxxxxx; Senior Director Finance
328
EXHIBIT C-3B
FORM OF
BRAZILIAN SHAREHOLDER PLEDGE AGREEMENT
This Brazilian Shareholder Pledge Agreement (the "Pledge Agreement") is
made on December 17, 1999 by and among:
(a) Qualcomm do Brasil Ltda., a limited liability company duly
organized and existing in accordance with the laws of Federative Republic
of Brazil ("Brazil"), with its head office in the City of Sao Paulo, State
of Sao Paulo, at Avenida Eng. Xxxx Xxxxxx Xxxxxxx, 550 8(o) andar, enrolled
in the Legal Entities National List of the Ministry of Finance
(C.N.P.J./M.F.) under nr. 004.386.665/0001-81, herein represented in
accordance with its Bylaws ("Qualcomm");
(b) Vesper Holding S.A., a corporation (sociedade anonima) duly
organized and existing in accordance with the laws of Brazil, with its head
office in the City of Rio de Janeiro, State of Rio de Janeiro, at Xxxxxxx
Xxxxxxxxx xx Xxxxx, 000, 00(x) andar, enrolled in the Legal Entities
National List of the Ministry of Finance (C.N.P.J./M.F.) under nr.
02.763.387/0001-63, herein represented in accordance with its Bylaws
("HoldCo", and together with Qualcomm, the "Shareholders"); and
(c) LaSalle Bank National Association, a financial institution duly
organized and existing under the laws of the United States of America, with
its offices at 000 X. XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx
represented herein by its duly authorized representative, as identified and
qualified in the signature pages hereof, acting as collateral agent for the
Pari Passu Secured Parties (as defined below) (in such capacity, together
with its successors in such capacity, the "Collateral Agent").
W I T N E S S E T H
WHEREAS, Xxxxxx X.X. (the "Company") has entered into (i) that certain
Secured Note Purchase Agreement dated as of December 13, 1999 (as amended from
time to time, the "Nortel Note Purchase Agreement") with ABN AMRO Bank N.V.
("ABN AMRO"), as administrative agent (in such capacity, the "Nortel Facility
Agent"), Nortel Networks Corporation ("Nortel"), as initial Purchaser, and the
other Purchasers from time to time party thereto; (ii) that certain Secured Note
Purchase Agreement dated as of December 13, 1999 (as amended from time to time,
the "Qualcomm/Ericsson Note Purchase Agreement") with ABN AMRO, as
administrative agent (in such capacity, the "Qualcomm/Ericsson Facility Agent"),
ABN AMRO and Xxxxxxxx Xxxxxxxxxxxx, as initial Purchasers, the other Purchasers
from time to time party thereto and Telefonaktiebolaget LM Ericsson (publ.)
("Ericsson"), individually; and (iii) that certain Secured Note Purchase
Agreement dated as
329
of December 13, 1999 (as amended from time to time, the "Xxxxxx Note Purchase
Agreement" and, together with the Nortel Note Purchase Agreement and the
Qualcomm/Ericsson Note Purchase Agreement, the "Note Purchase Agreements") with
Xxxxxx Corporation ("Xxxxxx"), as administrative agent (in such capacity, the
"Xxxxxx Facility Agent" and, together with the Nortel Facility Agent and the
Qualcomm/Ericsson Facility Agent, the "Initial Facility Agents"), Xxxxxx, as
initial Purchaser, and the other Purchasers from time to time party thereto (all
such Initial Facility Agents, initial Purchasers, other Purchasers and the
Collateral Agent, the "Secured Parties", and each a "Secured Party");
WHEREAS, the Company may, after the date hereof; enter into other note
purchase or loan agreements (the "Other Pari Passu Financing Agreements" and,
together with the Note Purchase Agreements the "Pari Passu Financing
Agreements") with other facility agents (the "Other Pari Passu Facility
Agents"), and purchasers or lenders (the "Other Pari Passu Creditors") pursuant
to which other notes are issued or loans extended that rank on a pari passu
basis with and are secured by the same collateral as the Notes and the Note
Purchase Agreements;
WHEREAS, the Company may, pursuant to the terms and conditions set forth in
the Common Terms Agreement, after the date hereof, enter into Interest Hedge
Agreements with a Pari Passu Creditor, any Affiliate of a Pari Passu Creditor
or any other financial institution reasonably acceptable to the Collateral
Agent, that acts as the counterparty in any Interest Hedge Agreement in respect
of the Pari Passu Obligations ("Swap Lender" and, together with the Secured
Parties and the Other Pari Passu Creditors, the "Pari Passu Secured Parties");
WHEREAS, in connection with the Note Purchase Agreements, HoldCo, the
Company, the Initial Facility Agents, the Collateral Agent and the Other Pari
Passu Facility Agents have entered or will enter, as the case may be, into that
certain Common Terms Agreement dated as of December 13, 1999 (as amended from
time to time, the "Common Terms Agreement") which sets forth certain common
terms, conditions and covenants relating to the Pari Passu Financing
Agreements; and
WHEREAS, it is a covenant entered into in connection with the purchase of
the Notes by the Secured Parties from the Company under the Note Purchase
Agreements that the Shareholders shall have executed and delivered this Pledge
Agreement to the Collateral Agent for the ratable benefit of the Pari Passu
Secured Parties;
NOW, THEREFORE, in consideration of the foregoing premises and mutual
covenants contained herein, the parties hereto agree as follows:
1. Defined Terms. (a) Capitalized terms used and not otherwise defined in
this Pledge Agreement are used herein with the same meanings ascribed to them in
the Common Terms Agreement. All terms defined in this Pledge Agreement in the
singular shall have the same meanings when used in the plural and vice versa.
The words "hereof", "herein", and "hereunder" and words of similar import when
used in this Pledge Agreement
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330
shall, unless the context otherwise requires, refer to this Pledge Agreement as
a whole and not to any particular provision of this Pledge Agreement, and
section, subsection, schedule and exhibit references are to this Pledge
Agreement unless otherwise specified. All terms defined in this Pledge Agreement
shall have the defined meanings contained herein when used in any certificate or
other document made or delivered pursuant hereto.
(b) Except as otherwise stated herein, all terms and conditions of the
Notes, the Note Purchase Agreements, the Common Terms Agreement (including
Article 1 and, except for Sections 10.8, 10.9, 10.19 and 10.20, Article 10
thereof), and, when executed and delivered the Other Pari Passu Documents,
shall fully and automatically apply to this Pledge Agreement mutatis mutandis
and shall be deemed as an integral part hereof, as if they were transcribed
herein.
2. Pledge; Grant of Security Interest. In order to secure the full and
prompt payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of all obligations of the Company under each of the
Note Purchase Agreements and any Note issued thereunder and of all obligations
and liabilities of the Company to the Pari Passu Secured Parties, which may
arise under, out of, or in connection with, the Note Purchase Agreements, the
Common Terms Agreement, or any other Pari Passu Financing Document, whether on
account of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses or otherwise (including, without limitation, all fees and
disbursements of counsel to the Pari Passu Secured Parties that are required to
be paid by the Company pursuant to the terms of the Note Purchase Agreements,
the Common Terms Agreement or any other Pari Passu Financing Document) (the
"Obligations"), and all obligations of the Shareholders to the Collateral Agent
or the Pari Passu Secured Parties created under this Pledge Agreement (being
such obligations together with the Obligations being collectively referred to as
the "Secured Obligations"), which, for the purposes of Article 761 of the
Brazilian Civil Code, are estimated to be in (but expressly not limited to) the
principal amount of up to US$1,019,000,000, equivalent on the date hereof to
R$l,875,673,300, with original final maturity on July 1, 2012 (subject to
mandatory and optional repurchase and acceleration thereunder) or as otherwise
provided for in the Note Purchase Agreements, the Common Terms Agreement or the
Notes each Shareholder hereby pledges to the Collateral Agent for the benefit of
the Pari Passu Secured Parties, pursuant to the provisions of Articles 271 to
279 of the Brazilian Commercial Code and Article 768 of the Brazilian Civil
Code, all its rights to the loan agreements and promissory notes fully described
in Exhibit 1 hereto (the "Pledged Assets").
3. Restriction on Transfer and Encumbrance. The Pledged Assets may not be
sold or transferred by any of the Shareholders or by any other means that
whatsoever become subject to any Liens (except for those created hereby and
those permitted under the Common Terms Agreement) until this Pledge Agreement
has been terminated pursuant to Section 12 hereof.
4. Registration of the Pledge. The Shareholders shall within fifteen (15)
days after execution of this Pledge Agreement or any Amendment (as defined
below) entered
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331
into in accordance with Section 6, register this Pledge Agreement or such
Amendment, together with its sworn translation into the Portuguese language,
with the competent Registry of Titles and Deeds (Cartorio de Registro de Titulos
e Documentos) in Brazil, and deliver to the Collateral Agent evidence of such
registration in form and substance reasonably satisfactory to the Collateral
Agent. All expenses incurred in connection with such sworn translation and with
such registrations shall be paid by the Shareholders.
5. Representations and Warranties. Each Shareholder represents and warrants
that all representations and warranties made with respect to it, its assets and
its obligations in Article 3 of the Common Terms Agreement except for the
representation and warranty set forth in the third sentence of Section 3.2 of
the Common Terms Agreement are true and correct. In addition, each Shareholder
hereby represents and warrants to the Collateral Agent, for the benefit of the
Pari Passu Secured Parties, that the security interest created hereby will, upon
completion of the registrations required by Section 4 hereof, constitute a
legal, valid and perfected first priority security interest in the Pledged
Assets, enforceable in accordance with its terms against all creditors of such
Shareholder, in each case, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to
creditors' rights generally; provided, however, that any security interest to be
created hereby on any Pledged Asset which has not been issued to, or received or
acquired by, any Shareholder on or before the date hereof shall be deemed to
have been created, perfected and to be in full force only (x) after such Pledged
Asset is issued to, or received or acquired by, such Shareholder, and (y) on the
date when the Lien of the Collateral Agent, for the ratable benefit of the Pari
Passu Secured Parties thereon shall have been registered as provided in Section
4 hereof or as may be in the future required by Brazilian law; and provided,
further, that, the pledge created hereby will secure the obligations of the
Company to the Other Pari Passu Secured Parties only upon the effectiveness of
the Other Pari Passu Financing Agreements and the registrations required by
Section 4 hereof.
6. Covenants. The Shareholders shall enter into amendments to this Pledge
Agreement with the Collateral Agent, substantially in the form of Exhibit 2
hereto (each an "Amendment"), as and when required by Section 4.10 of the Common
Terms Agreement, in order to extend the pledge created hereby to the relevant
Pledged Assets (which shall include all shareholder loans from time to time
extended by the Shareholders and then be subject to all terms and conditions
provided herein) promptly after any additional Pledged Assets are made or
extended by the Shareholders, all pursuant to the provisions of the Common Terms
Agreement, and the Shareholders shall make all filings and registrations and
obtain all authorizations necessary to create a first priority perfected
security interest in the Pledged Assets to which the security interest created
hereby was extended in favor of the Collateral Agent for the benefit of the
Pari Passu Secured Parties, and take such further actions as the Collateral
Agent may reasonably request for the purposes of obtaining or preserving the
full benefits of this Pledge Agreement and of the rights and powers herein
granted with respect to all such after-acquired Pledged Assets and in favor of
all such subsequent Pari Passu Secured Parties. The Shareholders shall provide
the Collateral Agent with evidence of registration of each such Amendment in the
appropriate Registry of
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332
Titles and Deeds in Brazil (Cartorio de Registro de Titulos e Documentos) within
fifteen (15) days after the execution of such Amendment.
7. Rights and Powers of Collateral Agent Upon an Event of Default.
(a) If an Event of Default has occurred and is continuing, the Collateral
Agent may, and shall be entitled to instruct the Company to, without being
required to give any notice (except written notice of such Event of Default as
may be required by mandatory requirements of law), without limitation and in
addition to any and all rights with respect to the Pledged Assets granted to the
Collateral Agent or the Pari Passu Secured Parties under the Common Terms
Agreement and the other Pari Passu Financing Documents:
(i) instruct the Company to make any payment required by the terms of the
Pledged Assets directly to the Collateral Agent to be applied to the Secured
Obligations in accordance with the terms of the Common Terms Agreement; and
(ii) take possession of the Pledged Assets or any part thereof by directing
the Shareholders in writing to deliver the same to the Collateral Agent at any
place or places designated by the Collateral Agent it being understood that the
Shareholders' obligation so to deliver the Pledged Assets is of the essence of
this Pledge Agreement and that, accordingly, upon application to a court having
jurisdiction, the Collateral Agent shall be entitled to a judicial order
requiring specific performance by the Shareholders of such obligation pursuant
to Articles 461, 621 and 632 of the Brazilian Civil Procedure Code.
8. Remedies. Upon the occurrence and during the continuation of an Event of
Default, the Collateral Agent is hereby irrevocably authorized and entitled to
dispose of, collect, receive, appropriate and/or realize upon the Pledged Assets
(or any part thereof) and may forthwith sell, assign, give option or options to
purchase or otherwise dispose of and deliver the Pledged Assets or any part
thereof at such price and upon such terms and conditions as it may deem
appropriate, irrespective of any prior or subsequent notice to any Shareholder,
in accordance with the provisions set forth in Article 774, Item III, of the
Brazilian Civil Code and Article 277 of the Brazilian Commercial Code and apply
the proceeds thus received for payment of the Secured Obligations. Without
limitation, upon the occurrence and during the continuation of an Event of
Default, the Collateral Agent shall be entitled to instruct the Company to make
all payments in respect of the Pledged Assets directly to the Collateral Agent,
to be applied to the Secured Obligations. Each of the Shareholders hereby
irrevocably appoints the Collateral Agent as its attorney-in-fact, and for such
purpose it has executed and delivered to the Collateral Agent on the date hereof
a power of attorney substantially in the form of Exhibit 4 hereto. The
Shareholders agree to deliver an equivalent power of attorney to each successor
Collateral Agent. For the purposes hereof, it is hereby agreed and understood
that (a) the proceeds of any such sale shall be applied in accordance with the
terms of the Common Terms Agreement, and (b) in the event of any deficiency of
the proceeds of any such sale or realization, the Company shall remain liable
for the payment of the corresponding balance of the Secured Obligations.
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333
9. Amendments, etc. with Respect to the Secured Obligations. The
Shareholders shall remain obligated hereunder, and the Pledged Assets shall
remain subject to the security interests granted hereby, at all times until
termination of this Pledge Agreement pursuant to Section 12, notwithstanding
that, without limitation and without any reservation of rights against the
Shareholders, and without notice to or further assent by the Shareholders:
(a) any demand for payment of any of the Secured Obligations made by
any Pari Passu Secured Party is rescinded by such Pari Passu Secured Party
in accordance with the terms of the respective Pari Passu Financing
Agreement or Article 9 of the Common Terms Agreement, or any Other Pari
Passu Financing Document;
(b) the Common Terms Agreement, the Note Purchase Agreements, the
Notes and any Other Pari Passu Financing Document may be amended, modified
or supplemented, in whole or in part, in accordance with the terms of such
agreement; and
(c) any guaranty, right to setoff or other collateral security at any
time held by the Collateral Agent for the benefit of the Pari Passu Secured
Parties for the payment of the Secured Obligations may be sold, exchanged,
waived, surrendered or released.
10. Certain Waivers. Neither the Collateral Agent nor any Pari Passu
Secured Party shall have any obligation to protect, secure, perfect or insure
any other Lien at any time held by it as security for the Secured Obligations or
any property subject thereto. Each Shareholder waives any and all notice of the
creation, renewal, extension or accrual of any of the Secured Obligations and
notice of, or proof of reliance by, the Collateral Agent or any Pari Passu
Secured Party upon this Pledge Agreement; each of the Secured Obligations shall
conclusively be deemed to have been created, contracted or incurred in reliance
upon this Pledge Agreement; and all dealings between the Shareholders, on the
one hand, and the Collateral Agent and the Pari Passu Secured Parties, on the
other, shall likewise be conclusively presumed to have been had or consummated
in reliance upon this Pledge Agreement. Each Shareholder waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Company or the Shareholders with respect to the Secured Obligations.
11. Pursuit of Rights and Remedies against the Shareholders. When pursuing
its rights and remedies hereunder against the Shareholders, the Collateral Agent
may, but shall be under no obligation to, pursue such rights and remedies as it
may have against any other third party or against any collateral security for
the Secured Obligations or any right to setoff with respect thereto, and any
failure by the Collateral Agent to pursue such other rights or remedies or to
collect any payments from the Shareholders or any such other third party or to
realize upon any such collateral security or Guaranty or to exercise any such
right of offset, or any release of any such third party or of any such
collateral security, Guaranty or right of offset, shall not relieve the
Shareholders of any liability hereunder,
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334
and shall not impair or affect the rights and remedies, whether express, implied
or available as a matter of law, of the Collateral Agent or the Pari Passu
Secured Parties.
12. Termination and Release. When the Secured Obligations have been
indefeasibly satisfied in full, the Notes are no longer outstanding and no other
amount is then outstanding or owing to any Pari Passu Secured Party under the
Notes, the Note Purchase Agreements, the Common Terms Agreement and any Pari
Passu Financing Document and all Pari Passu Commitments have terminated, then,
and only then, shall this Pledge Agreement and the security interests created
hereby be released and this Pledge Agreement shall terminate, at the
Shareholders' expense; otherwise, this Pledge Agreement and the security
interests created hereby shall remain in full force and effect. No release of
this Pledge Agreement, or of the Lien created and evidenced hereby, shall be
valid unless executed by the Collateral Agent. The Collateral Agent, upon the
Company's request, at the Company's expense and to the extent authorized to do
so by Article 7 of the Common Terms Agreement and in accordance with this
Section 12, shall execute, and deliver to the Company all documents reasonably
necessary to evidence such release. To the fullest 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 any amount received by the
Collateral Agent or any other Pari Passu Secured Party in respect of the Secured
Obligations is rescinded or must otherwise be restored or returned by the
Collateral Agent or any other Pari Passu Secured Party upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Company, upon the
appointment of any intervenor or conservator of, or agent or similar official
for, any of the Shareholders or any part of their respective assets, or
otherwise, all as though such payments had not been made.
13. Waivers and Amendments. Notwithstanding any provisions of this Pledge
Agreement, no amendment of any provision of this Pledge Agreement (including
any waiver or consent relating thereto) shall be effective unless the same shall
have been consented to and signed in accordance with Section 9.8 of the Common
Terms Agreement.
14. Severability. If any provision of this Pledge Agreement shall be held
to be invalid, illegal or unenforceable under Applicable Law in any
jurisdiction, such provision shall be ineffective only to the extent of such
invalidity, illegality or unenforceability, and shall not affect any other
provisions hereof or the validity, legality or enforceability of such provision
in any other jurisdiction. Where provisions of any Applicable Law resulting in
such prohibition or unenforceability may be waived they are hereby waived by the
Shareholders, the Company and the Collateral Agent to the full extent permitted
by Applicable Law so that this Pledge Agreement shall be deemed a valid and
binding agreement, and the security interest created hereby shall constitute a
continuing first priority Lien on and perfected first priority security interest
in the Pledged Assets, in each case enforceable against the Shareholders in
accordance with its terms.
15. Authority of the Collateral Agent. The Shareholders acknowledge that,
with respect to the rights and responsibilities of the Collateral Agent under
this Pledge Agreement in respect of any action taken by the Collateral Agent or
the exercise or non-exercise by the
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Brazilian Shareholder Pledge Agreement
335
Collateral Agent of any option, request, judgment or other right or remedy
provided for herein or resulting or arising out of this Pledge Agreement, the
Collateral Agent shall as between the Collateral Agent and the other Pari Passu
Secured Parties, be governed by the Pari Passu Financing Documents and by such
other agreements with respect thereto as may exist from time to time among them,
but, as between the Collateral Agent, the Shareholders and the Company, the
Collateral Agent shall be conclusively presumed to be acting as agent for the
Pari Passu Secured Parties with full and valid authority so to act or refrain
from acting, and the Shareholders shall be under no obligation or entitlement to
make any inquiry respecting such authority.
16. Complete Agreement; Successors and Assigns; Third-Party Beneficiaries.
This Pledge Agreement is intended by the parties as the final expression of
their agreement regarding the subject matter hereof and as a complete and
exclusive statement of the terms and conditions of such agreement. This Pledge
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. All Pari Passu Secured Parties that
are not signatories to this Pledge Agreement are intended to be third-party
beneficiaries of this Pledge Agreement. Otherwise, there are no third-party
beneficiaries of this Pledge Agreement.
17. Waiver of Immunity. To the extent that a Pledgor has or hereafter may
be entitled to claim or may acquire, for itself or any of the Pledged Assets,
any immunity from suit, jurisdiction of any court or from any legal process
(whether through service of notice, attachment prior to judgment, attachment in
aid of execution, or otherwise) with respect to itself or its property, it
hereby irrevocably waives such immunity in respect of its obligations hereunder
to the extent permitted by Applicable Law.
18. GOVERNING LAW; JURISDICTION. THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF BRAZIL. THE PARTIES
HERETO IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS
SITTING IN THE CITY OF RIO DE JANEIRO, BRAZIL, IN ANY ACTION OR PROCEEDING TO
RESOLVE ANY DISPUTE OR CONTROVERSY RELATED TO OR ARISING FROM THIS PLEDGE
AGREEMENT AND THE PARTIES HERETO IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF
SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH COURTS.
19. No Duty on Agent's Part. The powers conferred on the Collateral Agent
hereunder are solely to protect the Collateral Agent's and the Pari Passu
Secured Parties' interests in the Pledged Assets and shall not impose any duty
upon the Collateral Agent to exercise or on the Pari Passu Secured Parties to
cause the Collateral Agent to exercise any such powers. The Collateral Agent
shall be accountable only for amounts that it actually receives as a result of
the exercise of such powers, and neither the Collateral Agent nor any Pari Passu
Secured Party nor any of its respective officers, directors, employees or agents
shall be responsible to the Shareholders or the Company for any act or failure
to act
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Brazilian Shareholder Pledge Agreement
336
hereunder except to the extent otherwise provided in Section 7.2 of the Common
Terms Agreement.
20. Notices. All notices and other communications under this Pledge
Agreement shall be in writing and shall be personally delivered or sent by
prepaid courier, by overnight, registered or certified mail (postage prepaid),
or by facsimile, and shall be deemed given when received by the intended
recipient thereof. Unless otherwise specified in a notice sent or delivered in
accordance with Section 10.4 of the Common Terms Agreement, all notices and
other communications shall be given to the parties hereto at their respective
addresses (or to their respective facsimile numbers) indicated in Exhibit 1.1(a)
of the Common Terms Agreement (in the case of the Collateral Agent), in Exhibit
10.4 of the Common Terms Agreement (in the case of the Company) or in the
Preamble to this Pledge Agreement (in the case of the Shareholders).
21. Survival of Agreements, Representations and Warranties. All agreements,
representations and warranties made herein shall survive the execution and
delivery of this Pledge Agreement and the closing and shall continue as valid
and enforceable agreements, representations and warranties (when made hereunder)
until payment and performance of any and all Secured Obligations. Any
investigation at any time made by or on behalf of the Collateral Agent or the
Pari Passu Secured Parties shall not diminish the right of the Collateral Agent
or the Pari Passu Secured Parties to rely thereon
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22. Specific Performance. For the purposes hereof, the Collateral Agent may
seek the specific performance of the obligations undertaken herein by the
Shareholders, as provided in Articles 461, 621 and 632 of the Brazilian Civil
Procedure Code.
IN WITNESS WHEREOF, the parties have caused this Pledge Agreement to be duly
executed in the presence of the undersigned witnesses.
Collateral Agent:
LaSalle Bank National Association
/s/ Andreas Xxxxxx Xxxxxxxxx
--------------------------------- -----------------------------------
Name: Name:
Title: Attorney-in-fact Title:
Witnesses:
--------------------------------- -----------------------------------
Name: Name:
ID: ID:
Shareholders:
Vesper Holding, S.A.
/s/ Xxxxxx Xxxxx /s/ Xxxxxxx Xxxxxxxxx Xxxxxx
--------------------------------- -----------------------------------
Name: Name:
Title: Director of Finance Title: Director of Operations
Witnesses:
--------------------------------- -----------------------------------
Name: Name:
ID: ID:
Qualcomm do Brasil Ltda.
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338
/s/ Xxxxxx Xxxxxx /s/ Xxxxxx Xxxxxxxxxxx
--------------------------------- -----------------------------------
Name: Name:
Title: Director of Finance Title:
Witnesses:
--------------------------------- -----------------------------------
Name: Name:
ID: ID:
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EXHIBIT 1
LIST OF INTERCOMPANY DEBT
None
Page 12
Brazilian Shareholder Pledge Agreement
340
EXHIBIT 2
[FORM OF
AMENDMENT TO BRAZILIAN SHAREHOLDER PLEDGE AGREEMENT
This [o] Amendment to the Pledge Agreement (hereinafter referred to as this
"Amendment") is made as of [o], 1999 by and among:
(a) Qualcomm do Brasil Ltda., a limited liability company duly
organized and existing in accordance with the laws of Federative Republic
of Brazil ("Brazil"), with its head office in the City of Sao Paulo, State
of Sao Paulo, at Avenida Eng. Xxxx Xxxxxx Xxxxxxx, 550 8(o) andar, enrolled
in the Legal Entities National List of the Ministry of Finance
(C.N.P.J./M.F.) under nr. 004.386.665/0001-81, herein represented in
accordance with its Bylaws ("Qualcomm");
(b) Vesper Holding S.A., a corporation (sociedade anonima) duly
organized and existing in accordance with the laws of the Brazil, with its
head office in the City of Rio de Janeiro, State of Rio de Janeiro, at
Xxxxxxx Xxxxxxxxx xx Xxxxx, 000, 00(x) andar, enrolled in the Legal
Entities National List of the Ministry of Finance (C.N.P.J./M.F.) under nr.
02.763.387/0001-63, herein represented in accordance with its Bylaws
("HoldCo", and together with Qualcomm, the "Shareholders") and
(c) LaSalle Bank National Association, a financial institution duly
organized and existing under the laws of the United States of America, with
its registered office at 000 XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx
represented herein by its duly authorized representative, as identified and
qualified in the signature pages hereof, acting as collateral agent for the
Pari Passu Secured Parties (as defined below) (in such capacity, together
with its successors in such capacity, the "Collateral Agent").
WHEREAS, on December 17, 1999, the parties hereto entered into a Brazilian
Shareholder Pledge Agreement (the "Pledge Agreement"), registered with the
Registry of Titles and Deeds of the City of [o] under number [o];
WHEREAS, the parties have agreed to amend the Pledge Agreement in order to
[grant to the Collateral Agent, for the ratable benefit of the Pari Passu
Secured Parties a perfected first priority security interest in the Pledged
Assets]/[extend the pledge created thereunder to secure its Obligations assumed
under the Pari Passu Financing Document] dated [o] between the Company and [o];
WHEREAS, pursuant to the terms hereof, the parties hereto desire to amend
the Pledge Agreement;
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341
NOW, THEREFORE, the parties hereto enter into this Amendment No. ___ to the
Pledge Agreement under the following terms and conditions:
1. Capitalized terms used and not otherwise defined herein shall have the
meaning ascribed to them in the Pledge Agreement.
2. Each Shareholder hereby [pledges, and transfers any additional Pledged
Assets contained in the new Exhibit 1 attached hereto (and which were not
contained in the original Exhibit 1 of the Pledge Agreement) to the Collateral
Agent, for the benefit of the Pari Passu Secured Parties]/[extends the pledge
created under the Pledge Agreement to secure its Obligations under the Other
Pari Passu Financing Documents listed in Exhibit 2 hereto, and for the purposes
hereof and of the Pledge Agreement, each of the Other Pari Passu Creditors
listed in Exhibit 2 shall be a Pari Passu Secured Party under the Pledge
Agreement.
3. Each Shareholder hereby represents and warrants to and in favor of the
Collateral Agent, for the benefit of the Pari Passu Secured Parties that:
(a) the execution, delivery, performance and [grant of the security
interest/extension of the pledge created under the Pledge Agreement]
pursuant to this Amendment have been duly authorized by all necessary
corporate action on the part of such Shareholder. This Amendment has been
duly executed and delivered by the Shareholder. The execution, delivery,
performance and [grant of the security interest/extension of the pledge
created under the Pledge Agreement] do not and will not (i) violate any
provision of any charter or other organizational documents of the
Shareholder, (ii) conflict with, result in a breach of, or constitute (or,
with the giving of notice or lapse of time or both, would constitute) a
default under, or, except for consents and approvals that have been
obtained and are in full force and effect, require the approval or consent
of any Person pursuant to, any material Contractual Obligation of the
Shareholder (including any provisions of any Material Contract or any
contracts relating to Debt to which Shareholder is a party), or violate any
Applicable Law binding on the Shareholder, or (iii) result in the creation
or imposition of any Lien upon any asset of the Shareholder or any income
or profits therefrom, except for the Lien [created/extended] hereby in
favor of the Collateral Agent, for the ratable benefit of the Secured
Parties, under the Pledge Agreement.
(b) This Amendment and the Pledge Agreement, as amended hereby, each
constitutes a legal, valid and binding obligation of such Shareholder,
enforceable against each Shareholder in accordance with its terms, and the
security interest [created/extended] hereby will, upon completion of the
registrations required by Section 5 hereof, constitute a legal, valid and
perfected first priority security interest in the Pledged Assets,
enforceable in accordance with its terms against all creditors of such
Shareholder, in each case, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to creditors' rights generally,
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Brazilian Shareholder Pledge Agreement
342
4. All provisions of the Pledge Agreement not amended or modified herein
shall remain in full force and effect in accordance with the terms of the Pledge
Agreement.
5. The Shareholders, at their own cost and expense, shall within fifteen
(15) days after the execution of this Amendment, register this Amendment,
together with a sworn translation hereof, with the competent Registry of Titles
and Deeds (Cartorio de Registro de Titulos e Documentos) in Brazil, and deliver
to the Collateral Agent evidence of such registration in form and substance
reasonably satisfactory to the Collateral Agent.
IN WITNESS WHEREOF, the undersigned have caused this Amendment No. __ to
the Brazilian Shareholder Pledge Agreement to be duly executed in the presence
of the undersigned witnesses.
Shareholder:
Vesper Holding, S.A.
--------------------------------- -----------------------------------
Name: Name:
Title: Title:
Qualcomm do Brasil Ltda.
--------------------------------- -----------------------------------
Name: Name:
Title: Title:
Collateral Agent:
LaSalle Bank National Association
--------------------------------- -----------------------------------
Name: Name:
Title: Title:
Witnesses:
--------------------------------- -----------------------------------
Name: Name:
Title: Title:
Page 15
Brazilian Shareholder Pledge Agreement
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EXHIBIT 3
[DATE]
To
[o]
Ref: Brazilian Shareholder Pledge
Agreement (the "Pledge Agreement"),
dated December 17, 1999 entered into by
and among Qualcomm do Brasil S.A.
("Qualcomm"), Vesper Holding S.A.
("HoldCo", and together Qualcomm, the
"Shareholders"), and LaSalle Bank
National Association (the "Collateral
Agent")
Dear Sirs,
Please be advised that, pursuant to the Pledge Agreement referenced above,
all of our rights to [o] (the "Pledged Instrument") have been pledged, as set
forth in the Pledge Agreement, in favor of the Collateral Agent (for the benefit
of the Pari Passu Secured Parties, as defined in the Pledge Agreement).
Capitalized terms used but not defined herein shall have the same meanings set
forth in the Pledge Agreement.
The Shareholders hereby irrevocably instructs you to, upon the occurrence
and during the continuation of an Event of Default under the Pledge Agreement,
as shall be evidenced by a written notice to you by the Collateral Agent
(irrespective of any notice to the contrary from the Shareholders or the
Company) pay over and transfer upon a written request from the Collateral Agent
any and all Pledged Assets to or to the order of the Collateral Agent pursuant
to the instructions contained in such written request. Promptly after the
cessation of an Event of Default, the Collateral Agent shall send written notice
of such cessation to you and you shall immediately and conclusively rely on such
notice in determining whether to act pursuant to the instructions you receive
from the Shareholders with respect to the Pledged Assets. Upon your execution
and return of a counterpart of this letter to us, with a copy to the Collateral
Agent, you shall be bound by all provisions, terms and conditions of
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Brazilian Shareholder Pledge Agreement
344
the Pledge Agreement as if you were an original party thereto. This instructions
contained herein may not be revoked, amended or modified without the written
consent of the Collateral Agent. Please find attached a copy of the Pledge
Agreement, together with a sworn translation thereof into Portuguese.
Very truly yours,
----------------------------------------
Name:
Title:
Acknowledged and Agreed:
Place and Date:
By:
-------------------------------
Name:
Title:
copy to Collateral Agent
LaSalle Bank N.A.
000 X. XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Fax (000) 000-0000
Phone (000) 000-0000
Attention: Xxxxx X. Xxxx
Page 17
Brazilian Shareholder Pledge Agreement
345
EXHIBIT 4
FORM OF POWER OF ATTORNEY
By this Power of Attorney, Qualcomm do Brazil Ltda., a limited liability
company duly organized and existing in accordance with the laws of the
Federative Republic of Brazil ("Brazil"), with its head office in the City of
Sao Paulo, State of Sao Paulo, at Avenida Eng. Xxxx Xxxxxx Xxxxxxx, 550 8[o]
andar, enrolled in the Legal Entities National List of the Ministry of Finance
(C.N.P.J./M.F.) under nr. 004.386.665/0001-81, herein represented in accordance
with its Bylaws ("Qualcomm") and Vesper Holding S.A., a corporation (sociedade
anonima) duly organized and existing in accordance with the laws of Brazil,
with its head office in the City of Rio de Janeiro, State of Rio de Janeiro,
at Xxxxxxx Xxxxxxxxx xx Xxxxx, 000, 00[x] andar, enrolled in the Legal Entities
National List of the Ministry of Finance (C.N.P.J./M.F.) under nr.
02.763.387/0001-63, herein represented in accordance with its Bylaws ("HoldCo",
and together with Qualcomm, the "Appointers"); irrevocably constitutes and
appoints LaSalle Bank National Association, a financial institution duly
organized and existing under the laws of the United States of America (the
"Collateral Agent") as its attorney-in-fact to act in its name and place, to the
fullest extent permitted by law and in accordance with the terms of the Pledge
Agreement (as defined below), to do and perform all and every act and thing
whatsoever necessary or desirable, in connection with the Brazilian Shareholder
Pledge Agreement dated as of December 17, 1999, entered into by and among the
Appointers, and the Collateral Agent (for the benefit of the Pari Passu Secured
Parties referred to therein), (as amended, supplemented or otherwise modified
from time to time, the "Pledge Agreement") including, without limitation:
(a) upon the occurrence and during the continuation of an Event of Default,
to dispose of, collect, receive, appropriate, withdraw, transfer and/or realize
upon the Pledged Assets (or any part thereof) and forthwith sell, assign, give
option or options to purchase or otherwise dispose of and deliver the Pledged
Assets or any part thereof at such prices and upon such terms and conditions as
it may deem appropriate, irrespective of any prior or subsequent notice to the
Appointer or the Company, in accordance with the provisions set forth in Article
774, Item III, of the Brazilian Civil Code, apply the proceeds thus received for
the payment of the Secured Obligations, being vested with all necessary powers
incidental thereto, including, without limitation, the power and authority to
(i) instruct the Company to make all payments in respect of the Pledged Assets
directly to the Collateral Agent and (ii) purchase foreign currency and make all
remittances abroad, to sign any necessary foreign exchange contract with
financial institutions in Brazil that may be required to make such remittances
and to represent the Company before the Central Bank and any other Brazilian
Governmental Authority when necessary to accomplish the purposes of the Pledge
Agreement;
(b) upon the occurrence and during the continuation of an Event of Default,
to endorse checks, to purchase foreign currency with any Proceeds and remit such
currency abroad and, for this purpose, to take all action in connection thereto,
including, without
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Brazilian Shareholder Pledge Agreement
346
limitation, to execute exchange contracts and any other instruments or
agreements and to represent the Appointers before the Central Bank of Brazil and
any bank or financial institution in Brazil;
(c) upon the occurrence and during the continuation of an Event of Default,
to take all necessary actions and to execute any instrument before any
Governmental Authority, including, without limitation, the Brazilian Securities
and Exchange Commission ("CVM") and before any stock exchange, in the case of a
public sale of the Pledged Assets following the occurrence and during the
continuation of an Event of Default; and
(d) upon the occurrence and during the continuation of an Event of Default,
to take any action and to execute any instrument consistent with the terms of
the Pledge Agreement as the Collateral Agent may deem necessary or advisable to
accomplish the purposes of the Pledge Agreement.
Any notice by the Collateral Agent that an Event of Default has occurred
and is continuing or has ceased shall be conclusive as against all other third
parties.
Capitalized terms used, but not defined herein shall have the meaning
ascribed to them in the Pledge Agreement.
The powers granted herein are in addition to the powers granted by the
Appointers to the Collateral Agent in the Pledge Agreement and do not cancel or
revoke, any of such powers.
This power of attorney shall be irrevocable, valid and effective until the
Pledge Agreement has terminated in accordance with its terms.
Any successor Collateral Agent shall automatically succeed to the rights of
the Collateral Agent hereunder.
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Brazilian Shareholder Pledge Agreement
347
IN WITNESS WHEREOF, each Appointer has caused its duly authorized
representative to execute this power of attorney on [o], 1999.
SHAREHOLDERS
VeloCom Cayman Brasil Holdings S.A.
---------------------------- ------------------------------
Name: Name:
Title: Title:
Qualcomm do Brasil Ltda.
---------------------------- ------------------------------
Name: Name:
Title: Title:
Page 20
Brazilian Shareholder Pledge Agreement
348
EXHIBIT C-4
FORM OF CONSENT AND WAIVER
This agreement and any rights and obligations arising hereunder or relating
hereto may be freely assigned by Vesper to any third party without the prior
consent of [counterparty], provided that written notice of such assignment is
provided within [ ] days thereof. [Counterparty] shall give effect to any such
assignment and shall continue this agreement with any assignee, which shall be
entitled to all rights under this agreement as if it were the original party
hereto.
349
EXHIBIT C-5
FORM OF CONSENT TO ASSIGNMENT
The undersigned, _______________________ ("Contractor"), has been advised
by Xxxxxx X.X., a Brazilian sociedade anonima ("Vesper") that Vesper has entered
into certain secured note purchase agreements and related documents
(collectively, as the same may be amended, supplemented or otherwise modified
from time to time, the "Note Documents") with certain of its vendors or other
lenders (including their assignees and successors, the "Lenders") and Lasalle
Bank National Association, as collateral agent (including its successors, the
"Collateral Agent") pursuant to which Vesper expects to obtain funds to finance
the construction and working capital requirements of its fixed switched
telephony network and certain other operations (collectively, the "Project").
Pursuant to certain pledge and security agreements and certain mortgages
(collectively, as amended from time to time, the "Security Documents"), Vesper
has assigned or will assign in the future to the Collateral Agent, for its
benefit and for the benefit of the Lenders (collectively, the "Secured
Parties"), or granted or will grant in the future to the Collateral Agent for
the benefit of the Secured Parties, a security interest and lien in,
substantially all present and future assets of Vesper. In connection therewith,
Vesper has requested Contractor to consent to the assignment to the Collateral
Agent, for the benefit of the Secured Parties as security, of Vesper's interest
in certain agreements between Contractor and Vesper relating to the Project.
Contractor expects to derive significant benefits from the construction and
operation of the Project and from the performance of such Note Documents and is
therefore willing to execute this Consent and Agreement (this "Consent").
Contractor and Vesper hereby agree with the Collateral Agent for the
benefit of the Secured Parties as follows:
SECTION 1 Definitions.
1.1 Unless otherwise defined herein, all capitalized terms shall have the
meanings assigned them in the Note Documents, and, in addition, certain terms
are defined in the body hereof and the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):
"Assigned Contracts" means, collectively, the contracts listed on
Schedule 1 hereto, in each case as amended from time to time.
"Obligations" means all obligations of Vesper now or hereafter
existing under the Note Documents, whether for principal, interest, fees,
expenses or otherwise.
SECTION 2 General Covenants.
2.1 Consent. Contractor hereby consents to Vesper's assigning, pledging,
mortgaging and/or granting a security interest in Vesper's right title and
interest in and to the Assigned Contracts, as security for the Obligations, to
the Collateral Agent for the benefit of the Secured Parties pursuant to any of
the Security Documents. Contractor further consents to the exercise, subject to
the notice provisions of this Consent, by the Collateral Agent and the other
Secured
2
350
Parties of their rights under any of the Security Documents, including, without
limitation, any actions to collect amounts due, foreclosing upon or otherwise
succeeding to the interest of Vesper under the Assigned Contracts and
substituting a purchaser at the foreclosure sale for Vesper as a party to the
Assigned Contracts. Contractor agrees to execute and deliver all amendments to
the Assigned Contracts and all further documents as may be necessary for the
exercise of the rights of the Collateral Agent hereunder.
2.2 Payments. Contractor acknowledges and agrees that neither the
Collateral Agent nor any of the Secured Parties shall have any obligation or
liability under the Assigned Contracts by virtue of the Security Documents or
this Consent, nor shall the Collateral Agent or any of the Secured Parties be
obligated to perform any of the obligations or duties of Vesper under the
Assigned Contracts or to take any action or collect or enforce any claim for
payment assigned under the Security Documents, unless the Collateral Agent or
any Secured Party shall acquire all right, title and interest of Vesper in the
relevant Assigned Contract pursuant to a foreclosure sale.
2.3 Performance by Collateral Agent. The Collateral Agent shall be
entitled, but shall not be obligated, (i) to exercise any and all rights of
Vesper under the Assigned Contracts and/or (ii) to perform, discharge and/or pay
in full, and to cure any default in respect of, any and all obligations and
liabilities, now or hereafter arising, of Vesper to Contractor under the
Assigned Contracts, and, in either case, Contractor shall comply in all respects
with the exercise by the Collateral Agent of its rights hereunder and will
promptly execute and deliver to the Collateral Agent all instruments, documents
or other information and take any action reasonably necessary or appropriate or
that the Collateral Agent may reasonably request, in order to enable the
Collateral Agent to exercise all such rights. The Collateral Agent shall give
Contractor prior written notice of any intended exercise of its rights
hereunder.
2.4 Independent Agreements. Contractor and Vesper acknowledge and agree
that they have entered into the Assigned Contracts independently of the
execution and delivery by Vesper of the Note Documents. Contractor and Vesper
further acknowledge and agree that the Collateral Agent and the Lenders have
entered into the Note Documents in reliance upon the Assigned Contracts and this
Consent.
2.5 Notice of Default. Each of Contractor and Vesper agrees to give prompt
notice in writing to the Collateral Agent of any material failure known to it in
the performance or observance of the obligations of the other under any of the
Assigned Contracts and of any actions proposed to be taken by it in connection
therewith.
2.6 Termination, Amendment, Waiver, Assignment of Assigned Contracts. Until
the date on which the Obligations shall have been paid in full and all
commitments under the Note Documents have been terminated, each of Contractor
and Vesper agrees that it will not, without the prior written consent of the
Collateral Agent or as otherwise expressly permitted by the terms of the Note
Documents: (i) cancel or terminate any Assigned Contract, or suspend its or the
other's performance under such Assigned Contract; (ii) amend, supplement or
otherwise modify in any material adverse respect any Assigned Contract; (iii)
waive any material default under or breach of any Assigned Contract; (iv) assign
or otherwise transfer any of its right, title and interest in or delegate its
duties under any Assigned Contract in any manner, unless such assignment or
transfer is permitted by such Assigned Contract and the transferee enters into a
3
351
consent and agreement substantially equivalent to this Consent in the judgment
of the Collateral Agent; or (v) accept, consent to or acquiesce in any of the
foregoing. Each of Contractor and Vesper agrees that any cancellation,
termination, suspension, amendment, supplement, modification, waiver,
assignment, delegation, acceptance, consent or acquiescence purported to be
effected in contravention of the foregoing shall be void ab initio.
2.7 Delivery of information. Contractor shall deliver, or cause to be
delivered, to the Collateral Agent at the office specified in Section 3 hereof
(or to such other Person or in such other manner as the Collateral Agent may
from time to time hereafter specify in writing), a copy of each material notice
given or received by Contractor pursuant to the relevant notice section of each
of the Assigned Contracts as the Collateral Agent may reasonably request. In
addition, each of Contractor and Vesper shall permit the Collateral Agent and
the Secured Parties to examine their respective books and records as they relate
to the Assigned Contracts during regular business hours and upon reasonable
prior notice.
SECTION 3 Certain Agreements.
3.1 Notwithstanding anything to the contrary in the Know How Agreement:
(a) No fee shall be payable pursuant to Section 3.1 of the Know-How
Agreement unless actual EBITDA for Vesper for the relevant period is a positive
number.
(b) The references to the "Business Plan" contained in Section
3.1.2(b) of the Know-How Agreement are to the Business Plan of Vesper, as
approved by the Board of Directors of HoldCo in June, 1999.
SECTION 4 Miscellaneous Provisions
4.1 Binding Agreement. This Consent shall be binding upon the successors
and assigns of Contractor and Vesper and shall inure, together with the rights
and remedies of the Collateral Agent hereunder, to the benefit of Vesper, the
Collateral Agent and the Secured Parties and their respective successors,
transferees and assigns. Each of Contractor and Vesper hereby acknowledges and
agrees that the Collateral Agent and each of the Secured Parties may transfer,
convey and assign all its right, title and interest in and to this Consent.
4.2 Conflicting Provisions. In the event of any conflict between the
provisions of this Consent and the provisions of any Assigned Contract or any
other agreement or other document to which the Contractor is a party
(collectively, the "Contractor Documents"), the provisions of this Consent shall
control and such Contractor Document shall be deemed to have been amended
accordingly.
4.3 Waiver and Amendment. No termination, amendment or waiver of any
provision of this Consent or consent to any departure by Contractor from any
provision of this Consent shall in any event be effective unless the same shall
be in writing and signed by Contractor, Vesper and the Collateral Agent and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which it was given.
4
352
4.4 Notices. All notices and other communications provided for hereunder
shall be in writing (including telecopier communication) and, if to Contractor,
mailed, telecopied or delivered to it at ____________________________________;
Attention: ________________________________; Telephone: __________; Fax:
__________; with a copy to: ____________________________________________;
Attention: __________________________________________; Telephone: ___________;
Fax: ___________,if to Vesper or the Collateral Agent, mailed, telecopied or
delivered to it at its address set forth in the Note Documents; or as to each
party at such other address as shall be designated by such party in a written
notice to the other parties. All such notices and other communications shall be
effective upon receipt.
4.5 GOVERNING LAW. THIS CONSENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
4.6 Counterparts. This Consent may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same Consent. Faxed signatures shall be
binding for all purposes.
[The remainder of this page has been intentionally left blank.]
5
353
IN WITNESS WHEREOF, Contractor and Vesper, each by its duly authorized
officers, have duly executed this Consent as of the date set forth below.
Dated as of _____________, 1999
--------------------------------------------------
By
------------------------------------------------
Name:
Title:
XXXXXX X.X.
a Brazilian sociedade anonima
By /s/ Xxxxxxx Xxxxxxxxx Xxxxxx/Xxxxxx Xxxxxxxxxxx
------------------------------------------------
Name:
Title: Director of Operations/Executive Vice
President
LASALLE BANK NATIONAL ASSOCIATION
as Collateral Agent
By /s/ Xxxxx X. Xxxx
------------------------------------------------
Name:
Title: Assistant Vice President
6
354
SCHEDULE 1
ASSIGNED CONTRACTS
355
EXHIBIT D
FORM OF
ACCESSION AGREEMENT
THIS ACCESSION AGREEMENT (the "Accession Agreement"), dated as of
_______________, is entered into by and among the Company (as defined below),
the Collateral Agent (as defined below) and [NAME OF OTHER PARI PASSU FACILITY
AGENT], an Other Pari Passu Facility Agent (in such capacity, including its
successors in such capacity, the "Facility Agent") under [NAME OF OTHER PARI
PASSU FACILITY AGREEMENT] (as amended from time to time, the "Facility
Agreement"), on behalf of itself and the purchasers or note purchasers from time
to time party to the Facility Agreement (the "Pari Passu Creditors").
Reference is hereby made to the Common Terms Agreement, dated as of
December 13, 1999 (as the same may be amended, supplemented, replaced, renewed
or otherwise modified from time to time, the "Common Terms Agreement"), by and
among:
1) VESPER HOLDING S.A., a sociedade anonima organized under the laws
of Brazil ("HoldCo");
2) XXXXXX X.X., a sociedade anonima organized under the laws of
Brazil and a wholly-owned subsidiary of HoldCo (the "Company");
3) ABN AMRO BANK N.V. ("ABN AMRO"), as Agent for itself, NORTEL
NETWORKS CORPORATION, a Canadian corporation ("Nortel"), as
initial purchaser under, and the other purchasers (the "Nortel
Purchasers") from time to time party to the "Nortel Note Purchase
Agreement" referred to therein (in such capacity, together with
its successors in such capacity, the "Nortel Facility Agent");
4) ABN AMRO, as Agent for itself and XXXXXXXX XXXXXXXXXXXX, a
Delaware corporation ("Qualcomm"), as initial purchasers under,
and the other purchasers (the "Qualcomm/Ericsson Purchasers")
from time to time party to the "Qualcomm/Ericsson Note Purchase
Agreement" referred to therein (in such capacity, together with
its successors in such capacity, the "Qualcomm/Ericsson Facility
Agent");
5) XXXXXX CORPORATION, a Delaware corporation, ("Xxxxxx"), as Agent
for itself, as initial purchaser under, and the other purchasers
(the "Xxxxxx Purchasers" and, together with the Nortel Purchasers
and the Qualcomm/Ericsson Purchasers, the "Purchasers") from time
to time party to the "Xxxxxx Note Purchase Agreement" referred to
therein (in such capacity, together with its successors in such
capacity, the "Xxxxxx Facility Agent" and together with the
Nortel Facility Agent and the Qualcomm/Ericsson Facility Agent,
the "Initial Facility Agents");
Accession Agreement
1
356
6) each Agent under the Other Pari Passu Financing Agreements that
may thereafter become party thereto by executing an Accession
Agreement, for themselves and the purchasers from time to time
party to the Other Pari Passu Financing Agreements (in such
capacity, together with its respective successors in such
capacity, the "Other Pari Passu Facility Agents"); and
7) LASALLE BANK NATIONAL ASSOCIATION, as common administrative and
collateral agent for itself, the Nortel Facility Agent, the
Nortel Purchasers, the Qualcomm/Ericsson Facility Agent, the
Qualcomm/Ericsson Purchasers, the Xxxxxx Facility Agent, the
Xxxxxx Purchasers, the Other Pari Passu Facility Agents, and the
Other Pari Passu Creditors (together with its successors in such
capacities, the "Collateral Agent").
Capitalized terms used but not defined herein have the meanings
assigned to them in the Common Terms Agreement.
RECITALS
A. The Common Terms Agreement contemplates that from time to time an
Other Pari Passu Facility Agent will agree, on behalf of itself and the Pari
Passu Creditors for which it is an agent, to be bound by the terms and
conditions set forth in the Common Terms Agreement as if each were an original
party thereto.
B. By this Accession Agreement, the undersigned Facility Agent desires
to acknowledge and affirm, on behalf of itself and the Pari Passu Creditors from
time to time party to the Facility Agreement, that the terms and conditions set
forth in the Common Terms Agreement are applicable to the undersigned Facility
Agent and all of the Pari Passu Creditors as if each were an original party
thereto.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein and intending to be legally bound
hereby, the parties hereto hereby covenant and agree as follows:
1. The undersigned Facility Agent, on behalf of itself and the Pari
Passu Creditors, hereby agrees that each will be bound by the Common Terms
Agreement as if each were an original party thereto, effective upon the
Effective Date (as defined below).
2. The undersigned Facility Agent hereby makes the representations set
forth in the Common Terms Agreement as being made by the "Pari Passu Facility
Agents". Without limitation, the undersigned Facility Agent represents and
warrants to each of the Other Pari Passu Creditors that it agrees and consents,
and that all Pari Passu Creditors under the Facility Agreement have consented,
to the provisions of Article 9 of the Common Terms Agreement and are bound by
such provisions, including the provisions (a) with respect to the taking of
Accession Agreement
2
357
Foreclosure Actions with respect to Common Collateral by the Collateral Agent on
behalf of all Pari Passu Creditors, and (b) limiting the rights of the Pari
Passu Creditors to take any Foreclosure Action with respect to Common Collateral
except pursuant to such Article 9.
3. The undersigned Facility Agent further confirms that, based upon an
opinion of legal counsel received by the undersigned, all Debt under the
Facility Agreement conforms and will conform to the requirements of the Common
Terms Agreement for Other Pari Passu Debt and that the Facility Agreement
conforms to the requirements of the Common Terms Agreement for an Other Pari
Passu Financing Agreement.
4. The undersigned Facility Agent, on behalf of itself and the Pari
Passu Creditors, (a) confirms that it has received a copy of the Common Terms
Agreement and the other Pari Passu Financing Documents, together with copies of
the financial statements referred to in Section 2.1 and 4.1 of the Common Terms
Agreement prior to the date hereof and such other documents and information as
it has deemed appropriate to make its own decision to enter into this Accession
Agreement; (b) agrees that it will, independently and without reliance upon the
Collateral Agent or any other Purchaser Party, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Common Terms Agreement
or the Other Pari Passu Financing Documents; (c) appoints and authorizes the
Collateral Agent to take such actions on its behalf and to exercise such powers
under the Pari Passu Financing Documents as are delegated to such Agent by the
terms thereof, together with such powers as are reasonably incidental thereto;
(d) agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Common Terms Agreement or the other Pari
Passu Financing Documents are required to be performed by it as a Pari Passu
Facility Agent or Pari Passu Creditor; (e) specifies as its address for notices
the office set forth beneath its name on the signature pages hereof; and (f) has
provided to the Collateral Agent for distribution to all Pari Passu Creditors, a
true, correct and complete copy of the Facility Agreement and all Other Pari
Passu Financing Documents.
5. Following the execution of this Accession Agreement it will be
delivered to the Collateral Agent for acceptance in its discretion. The
effective date of this Accession Agreement shall be ____________________ or the
date on which the Collateral Agent accepts this Accession Agreement in its
discretion, whichever is later (the "Effective Date"). If the Collateral Agent
shall fail to accept and execute this Accession Agreement prior to the
expiration of ____ days after the date hereof, this Accession Agreement shall be
without force and effect for any purpose.
6. Upon acceptance and execution by the Collateral Agent, as of the
Effective Date, (a) the Facility Agent shall be a party to the Common Terms
Agreement and have the rights and obligations of a Pari Passu Facility Agent
thereunder and under the other Pari Passu Financing Documents (including the
Pari Passu Collateral Documents) and (b) the Pari Passu Creditors shall have the
rights and obligations of Pari Passu Creditors thereunder and under the other
Pari Passu Financing Documents (including the Pari Passu Collateral Documents).
Accession Agreement
3
358
7. Upon such acceptance and execution by the Collateral Agent, from and
after the Effective Date, the Collateral Agent shall make all payments under the
Common Terms Agreement and the other Pari Passu Financing Documents in respect
of the Facility Agent and the Pari Passu Creditors under the Facility Agreement
and the other Pari Passu Financing Documents to which they are parties or their
respective interests thereunder (including distributions of Mandatory
Prepayments and proceeds of Common Collateral) to the Facility Agent.
8. THIS ACCESSION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF NEW YORK.
9. This Accession Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument, and shall become
effective when one or more counterparts have been signed by each of the parties.
[The remainder of this page has been intentionally left blank.]
Accession Agreement
4
359
IN WITNESS WHEREOF, the undersigned have executed this Accession
Agreement as of the date set forth above.
XXXXXX X.X., a sociedade anonima organized
under the laws of Brazil
By:
-------------------------------------------
Name:
Title:
By:
-------------------------------------------
Name:
Title:
LASALLE BANK NATIONAL ASSOCIATION,
as Collateral Agent
By:
-------------------------------------------
Name:
Title:
[NAME OF OTHER PARI PASSU FACILITY AGENT] on
behalf of itself and the Pari Passu Creditors
By:
-------------------------------------------
Name:
Title:
---------------------------------------- ---------------------------------------
Account Name:
----------------- ----------------
Account No.:
----------------- ----------------
----------------- ---------------
ABA No.:
----------------- ----------------
Fax: Ref: ---------------
-----------------
Phone:
------------------
Attention:
-----------------
---------------------------------------- ---------------------------------------
Accession Agreement
5
360
EXHIBIT E
FORM OF INTERCOMPANY DEBT SUBORDINATION
INTENTIONALLY OMITTED
361
EXHIBIT F-1
FORM OF
SECRETARY'S CERTIFICATE
TO: LASALLE BANK NATIONAL ASSOCIATION, AS COLLATERAL
AGENT UNDER THE COMMON TERMS AGREEMENT REFERRED TO
BELOW
THE INITIAL FACILITY AGENTS REFERRED TO BELOW
C/O LASALLE BANK NATIONAL ASSOCIATION, AS
COLLATERAL AGENT
000 X. XXXXXXX XXXXXX, XXXXX 0000
XXXXXXX, XXXXXXXX 00000
ATTENTION: XXXXX X. XXXX
Reference is hereby made to the Common Terms Agreement, dated as of
December 13, 1999 (as the same may be amended, supplemented, replaced, renewed
or otherwise modified from time to time, the "Common Terms Agreement"), by and
among:
1) VESPER HOLDING S.A., a sociedade anonima organized under the laws
of Brazil ("HoldCo");
2) XXXXXX X.X., a sociedade anonima organized under the laws of
Brazil and a wholly-owned subsidiary of HoldCo (the "Company");
3) ABN AMRO BANK N.V. ("ABN AMRO"), as Agent for itself, NORTEL
NETWORKS CORPORATION, a Canadian CORPORATION ("Nortel"), as
initial purchaser under, and the other purchasers (the "Nortel
Purchasers") from time to time party to the "Nortel Note Purchase
Agreement" referred to therein (in such capacity, together with
its successors in such capacity, the "Nortel Facility Agent");
4) ABN AMRO, as Agent for itself and XXXXXXXX XXXXXXXXXXXX, a
Delaware corporation ("Qualcomm"), as initial purchasers under,
and the other purchasers (the "Qualcomm/Ericsson Purchasers")
from time to time party to the "Qualcomm/Ericsson Note Purchase
Agreement" referred to therein (in such capacity, together with
its successors in such capacity, the "Qualcomm/Ericsson Facility
Agent");
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362
5) XXXXXX CORPORATION, a Delaware corporation, ("Xxxxxx"), as Agent
for itself, as initial purchaser under, and the other purchasers
(the "Xxxxxx Purchasers" and, together with the Nortel Purchasers
and the Qualcomm/Ericsson Purchasers, the "Purchasers") from time
to time party to the "Xxxxxx Note Purchase Agreement" referred to
therein (in such capacity, together with its successors in such
capacity, the "Xxxxxx Facility Agent" and together with the
Nortel Facility Agent and the Qualcomm/Ericsson Facility Agent,
the "Initial Facility Agents");
6) each Agent under the Other Pari Passu Financing Agreements that
may thereafter become party thereto by executing an Accession
Agreement, for themselves and the purchasers from time to time
party to the Other Pari Passu Financing Agreements (in such
capacity, together with its respective successors in such
capacity, the "Other Pari Passu Facility Agents"); and
7) LASALLE BANK NATIONAL ASSOCIATION, as common administrative and
collateral agent for itself, the Nortel Facility Agent, the
Nortel Purchasers, the Qualcomm/Ericsson Facility Agent, the
Qualcomm/Ericsson Purchasers, the Xxxxxx Facility Agent, the
Xxxxxx Purchasers, the Other Pari Passu Facility Agents, and the
Other Pari Passu Creditors (together with its successors in such
capacities, the "Collateral Agent").
Capitalized terms used but not defined herein have the meanings
assigned to them in the Common Terms Agreement.
Pursuant to Schedule 2.1 to the Common Terms Agreement, the undersigned
hereby certifies that he or she is the duly appointed, qualified and acting
[INSERT TITLE (SECRETARY OR EQUIVALENT)] of [INSERT NAME OF COMPANY PARTY] (the
"Company Party") and hereby further certifies as follows: [PRESIDENT OR OTHER
EXECUTIVE OFFICER FOR BRAZILIAN COMPANY PARTIES]
1. Attached as Appendix A is a true, correct and complete copy of the
Bylaws, Articles of Association and other charter documents of the Company
Party, including all amendments, as in effect on the date hereof, and, in the
case of any such charter document filed with the Governmental Authority of the
Company Party's jurisdiction of formation, certified by such Governmental
Authority.
2. Attached as Appendix B are true, correct and complete copies of all
necessary corporate resolutions and approvals duly adopted by the Board of
Directors or shareholders of the Company Party with respect to the Note
Documents to which the Company Party is or will be a party. Such resolutions
have not been modified or rescinded and remain in full force and effect as of
the date hereof.
[3. Attached as Appendix C is a true, correct and complete copy of each
Material Contract (other than an Affiliate Agreement), including all amendments,
as in effect on the date hereof.] [FOR COMPANY AND HOLDCO ONLY - NOT ALL COMPANY
PARTIES]
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363
[4. Attached as Appendix D is a true, correct and complete copy of each
Affiliate Agreement involving the payment of management or similar fees,
including all amendments, as in effect on the date hereof.] [FOR COMPANY AND
HOLDCO ONLY - NOT ALL COMPANY PARTIES]
[5. Attached as Appendix E is a true, correct and complete copy of each
Affiliate Agreement referred to in clause (b) of Section 5.17 of the Common
Terms Agreement, including all amendments, as in effect on the date hereof.]
[FOR COMPANY AND HOLDCO ONLY - NOT ALL COMPANY PARTIES]
3/6. The following are the names of, the offices held by, and the
genuine signatures of, the officers of the Company Party authorized to sign the
Pari Passu Financing Documents to which the Company Party is a party for and on
behalf of the Company Party:
Name Office Signature
------------------------ ------------------------ ------------------------
------------------------ ------------------------ ------------------------
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364
The undersigned have executed this Certificate as of the ___ day of
December, 1999.
Date: _________________, ____.
Name: ________________________________
Title: [Secretary][PRESIDENT OR OTHER EXECUTIVE
OFFICER FOR BRAZILIAN COMPANY PARTIES]
The undersigned certifies that he or she is the duly appointed,
qualified and acting [INSERT TITLE (PRESIDENT OR CHIEF FINANCIAL OFFICER IN THE
CASE OF ANY BRAZILIAN COMPANY PARTIES] OR EQUIVALENT)] of the Company Party and
further certifies that ________________ is the duly appointed, qualified and
acting [secretary][PRESIDENT OR OTHER EXECUTIVE OFFICER FOR BRAZILIAN COMPANY
PARTIES] of the Company Party and that the signature set forth above is his or
her genuine signature.
Date: _________________, ____.
Name:
-------------------------------
Title: [President]
Secretary's Certificate
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365
APPENDIX A
CHARTER DOCUMENTS
Secretary's Certificate
5
000
XXXXXXXX X
CORPORATE RESOLUTIONS AND APPROVALS
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367
APPENDIX C
MATERIAL CONTRACTS
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7
368
APPENDIX D
CERTAIN AFFILIATE AGREEMENTS
Secretary's Certificate
8
000
XXXXXXXX X
OTHER AFFILIATE AGREEMENTS
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370
EXHIBIT F-2
FORM OF
OFFICERS' CERTIFICATE
TO: LASALLE BANK NATIONAL
ASSOCIATION, AS COLLATERAL AGENT
UNDER THE COMMON TERMS AGREEMENT
REFERRED TO BELOW
THE INITIAL FACILITY AGENTS REFERRED TO
BELOW
C/O LASALLE BANK NATIONAL ASSOCIATION, AS COLLATERAL AGENT
000 X. XXXXXXX XXXXXX, XXXXX 0000
XXXXXXX, XXXXXXXX 00000
ATTENTION: XXXXX X. XXXX
Reference is hereby made to the Common Terms Agreement, dated as of
December 13, 1999 (as the same may be amended, supplemented, replaced, renewed
or otherwise modified from time to time, the "Common Terms Agreement"), by and
among:
1) VESPER HOLDING S.A., a sociedade anonima organized under the laws
of Brazil ("HoldCo");
2) XXXXXX X.X., a sociedade anonima organized under the laws of
Brazil and a wholly-owned subsidiary of HoldCo (the "Company");
3) ABN AMRO BANK N.V. ("ABN AMRO"), as Agent for itself, NORTEL
NETWORKS CORPORATION, a Canadian corporation ("Nortel"), as
initial purchaser under, and the other purchasers (the "Nortel
Purchasers") from time to time party to the "Nortel Note Purchase
Agreement" referred to therein (in such capacity, together with
its successors in such capacity, the "Nortel Facility Agent");
4) ABN AMRO, as Agent for itself and XXXXXXXX XXXXXXXXXXXX, a
Delaware corporation ("Qualcomm"), as initial purchasers under,
and the other purchasers (the "Qualcomm/Ericsson Purchasers")
from time to time party to the "Qualcomm/Ericsson Note Purchase
Agreement" referred to therein (in such capacity, together with
its successors in such capacity, the "Qualcomm/Ericsson Facility
Agent");
5) XXXXXX CORPORATION, a Delaware corporation, ("Xxxxxx"), as Agent
for itself, as initial purchaser under, and the other purchasers
(the "Xxxxxx Purchasers" and, together with the Nortel Purchasers
and the Qualcomm/Ericsson Purchasers, the
Officers' Certificate
1
371
"Purchasers") from time to time party to the "Xxxxxx Note
Purchase Agreement" referred to therein (in such capacity,
together with its successors in such capacity, the "Xxxxxx
Facility Agent" and together with the Nortel Facility Agent and
the Qualcomm/Ericsson Facility Agent, the "Initial Facility
Agents");
6) each Agent under the Other Pari Passu Financing Agreements that
may thereafter become party thereto by executing an Accession
Agreement, for themselves and the purchasers from time to time
party to the Other Pari Passu Financing Agreements (in such
capacity, together with its respective successors in such
capacity, the "Other Pari Passu Facility Agents"); and
7) LASALLE BANK NATIONAL ASSOCIATION, as common administrative and
collateral agent for itself, the Nortel Facility Agent, the
Nortel Purchasers, the Qualcomm/Ericsson Facility Agent, the
Qualcomm/Ericsson Purchasers, the Xxxxxx Facility Agent, the
Xxxxxx Purchasers, the Other Pari Passu Facility Agents, and the
Other Pari Passu Creditors (together with its successors in such
capacities, the "Collateral Agent").
Capitalized terms used but not defined herein have the meanings
assigned to them in the Common Terms Agreement.
This Officers' Certificate is being delivered pursuant to Section 2.1
of the Common Terms Agreement. The undersigned are the [INSERT TITLES (PRESIDENT
AND CHIEF FINANCIAL OFFICER OR EQUIVALENT)] of [INSERT NAME OF THE COMPANY,
HOLDCO OR VESPER CAYMAN SPV] (the "Company Party") and hereby each further
certify as of the date hereof, in their respective capacities as officers of the
Company Party, as follows:
1. We have carefully reviewed the terms of the Pari Passu Financing
Documents to which the Company Party is a party and have made, or caused to be
made, such review of the Company and its business affairs as we have considered
necessary for the purposes of preparing this Officers' Certificate.
2. We have carefully prepared and reviewed the contents of this
Officers' Certificate and have conferred with counsel for the Company Party for
the purpose of discussing the meaning of any provisions hereof that we desired
to have clarified.
3. All representations and warranties of the Company Party contained in
the Pari Passu Financing Documents to which the Company Party is a party are
true and correct in all material respects as of the date hereof as if made on
such date (except for representations that are made only as of a specific date
therein, which are true and correct as of such date).
4. No Default or Event of Default exists on and as of the date hereof
or would result from the issuance of the Notes on the Closing Date.
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372
[5. Attached hereto as Appendix A is a Compliance Certificate setting
forth the calculations by which we have determined that the Company is in
compliance with the Financial and Operating Covenants contained in the Common
Terms Agreement.][FOR COMPANY ONLY--NOT HOLDCO OR VESPER CAYMAN]]
[6. Attached as Appendix B is a true, correct and complete copy of the
Business Plan for the Company Party, including all amendments, as in effect on
the date hereof.[FOR COMPANY ONLY--NOT HOLDCO OR VESPER CAYMAN]
[7. Attached as Appendix C is a true, correct and complete copy of the
financial statements referred to in Section 3.6 of the Common Terms
Agreement.][FOR COMPANY ONLY--NOT HOLDCO OR VESPER CAYMAN]
[8. All of the assets listed in the exhibits to the Collateral
Documents constitute all of the Collateral of the Company Party][FOR COMPANY
ONLY--NOT HOLDCO OR VESPER CAYMAN]
5/9. All of the conditions precedent set forth in Sections 2.1 and 2.2
of the Common Terms Agreement have been satisfied and Sections 3.1 and 3.2 of
each of the Note Purchase Agreements have been satisfied.
6/10. The undersigned understand that the Purchaser Parties are relying
materially on the truth and accuracy of the foregoing in connection with the
extension of credit to the Company under the Common Terms Agreement.
Date: , .
----------------- ----
Name:
--------------------------------------------
Title: [President] (Company Party)
Name:
--------------------------------------------
Title: [Chief Financial Officer] (Company Party)
Officers' Certificate
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373
EXHIBIT F-3
FORM OF
COMPLIANCE CERTIFICATE
TO: LASALLE BANK NATIONAL
ASSOCIATION, AS COLLATERAL AGENT
UNDER THE COMMON TERMS AGREEMENT
REFERRED TO BELOW
THE INITIAL FACILITY AGENTS REFERRED TO
BELOW
C/O LASALLE BANK NATIONAL
ASSOCIATION, AS COLLATERAL AGENT
000 X. XXXXXXX XXXXXX, XXXXX 0000
XXXXXXX, XXXXXXXX 00000
ATTENTION: XXXXX X. XXXX
Reference is hereby made to the Common Terms Agreement, dated as of
December 13, 1999 (as the same may be amended, supplemented, replaced, renewed
or otherwise modified from time to time, the "Common Terms Agreement"), by and
among:
1) VESPER HOLDING S.A., a sociedade anonima organized under the laws
of Brazil ("HoldCo");
2) XXXXXX X.X., a sociedade anonima organized under the laws of
Brazil and a wholly-owned subsidiary of HoldCo (the "Company");
3) ABN AMRO BANK N.V. ("ABN AMRO"), as Agent for itself, NORTEL
NETWORKS CORPORATION, a Canadian corporation ("Nortel"), as
initial purchaser under, and the other purchasers (the "Nortel
Purchasers") from time to time party to the "Nortel Note Purchase
Agreement" referred to therein (in such capacity, together with
its successors in such capacity, the "Nortel Facility Agent");
4) ABN AMRO, as Agent for itself and XXXXXXXX XXXXXXXXXXXX, a
Delaware corporation ("Qualcomm"), as initial purchasers under,
and the other purchasers (the "Qualcomm/Ericsson Purchasers")
from time to time party to the "Qualcomm/Ericsson Note Purchase
Agreement" referred to therein (in such capacity, together with
its successors in such capacity, the "Qualcomm/Ericsson Facility
Agent");
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374
5) XXXXXX CORPORATION, a Delaware corporation, ("Xxxxxx"), as Agent
for itself, as initial purchaser under, and the other purchasers
(the "Xxxxxx Purchasers" and, together with the Nortel Purchasers
and the Qualcomm/Ericsson Purchasers, the "Purchasers") from time
to time party to the "Xxxxxx Note Purchase Agreement" referred to
therein (in such capacity, together with its successors in such
capacity, the "Xxxxxx Facility Agent" and together with the
Nortel Facility Agent and the Qualcomm/Ericsson Facility Agent,
the "Initial Facility Agents");
6) each Agent under the Other Pari Passu Financing Agreements that
may thereafter become party thereto by executing an Accession
Agreement, for themselves and the purchasers from time to time
party to the Other Pari Passu Financing Agreements (in such
capacity, together with its respective successors in such
capacity, the "Other Pari Passu Facility Agents"); and
7) LASALLE BANK NATIONAL ASSOCIATION, as common administrative and
collateral agent for itself, the Nortel Facility Agent, the
Nortel Purchasers, the Qualcomm/Ericsson Facility Agent, the
Qualcomm/Ericsson Purchasers, the Xxxxxx Facility Agent, the
Xxxxxx Purchasers, the Other Pari Passu Facility Agents, and the
Other Pari Passu Creditors (together with its successors in such
capacities, the "Collateral Agent").
Capitalized terms used but not defined herein have the meanings
assigned to them in the Common Terms Agreement.
This Compliance Certificate is being delivered pursuant to Section
4.1(c) of the Common Terms Agreement and relates to certain financial statements
of the Company (the "Financial Statements") as of and for periods ended
______________, ____ (the "Financial Statement Date"). The undersigned are the
chief financial officer (the "CFO") and the president, respectively, of the
Company and hereby certify as of the date hereof, in their respective capacities
as officers of the Company, as follows:
1. We have reviewed the terms of the Note Documents and the Other Pari
Passu Financing Documents and have made, or have caused to be made under our
supervision, a review in reasonable detail of the transactions and condition of
the Company for the accounting period covered by the Financial Statements.
2. Such review has not disclosed the existence of any Default or Event
of Default, as such terms are defined in the Common Terms Agreement and the Note
Purchase Agreements, respectively, during such accounting period or as of the
Financial Statement Date and we do not
Compliance Certificate
2
375
have knowledge of the existence, as of the date of this Compliance Certificate,
of any Default or Event of Default, except as follows:(1)
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
The CFO hereby further certifies as of the Financial Statement Date, in
his capacity as an officer of the Company, as follows:
=================================================================================== =================== ==================
ACTUAL TARGET
AMOUNT AMOUNT
THE CFO HEREBY CERTIFIES THAT THE COMPANY IS IN COMPLIANCE WITH AS OF THE AS OF THE
EACH OF THE FOLLOWING FINANCIAL AND OPERATING COVENANTS: QUARTER QUARTER
ENDING ENDING
----------------------------------------------------------------------------------- ------------------- ------------------
A. MINIMUM ANNUALIZED REVENUES (Section 5.5(a) of the Common Terms Agreement)
----------------------------------------------------------------------------------- ------------------- ------------------
1. Total revenues of the Company and its Subsidiaries for the most
recently ended Fiscal Quarter preceding the date hereof,
determined on a consolidated basis in accordance with GAAP and
converted from Reais to Dollars (if necessary) by applying the
Average Conversion Factor for the relevant period to the
aggregate amount of such revenues for such period: $__________
----------------------------------------------------------------------------------- ------------------- ------------------
2. Total revenues of the Company and its Subsidiaries for the
Fiscal Quarter preceding the Fiscal Quarter referred to in A.1
above, determined on a consolidated basis in accordance with
GAAP and converted from Reais to Dollars (if necessary) by
applying the Average Conversion Factor for the relevant period
to the aggregate amount of such revenues for such period: $__________
=================================================================================== =================== ==================
-------------------------------------
(1) Specify the nature and period of existence of the Default or Event of
Default (if any) and what action the Company has taken, is taking, or
proposes to take with respect thereto.
Compliance Certificate
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376
=================================================================================== =================== ==================
ACTUAL TARGET
AMOUNT AMOUNT
THE CFO HEREBY CERTIFIES THAT THE COMPANY IS IN COMPLIANCE WITH AS OF THE AS OF THE
EACH OF THE FOLLOWING FINANCIAL AND OPERATING COVENANTS: QUARTER QUARTER
ENDING ENDING
----------------------------------------------------------------------------------- ------------------- ------------------
3. Annualized Revenues as of the end of the last day of the Fiscal
Quarter most recently ended prior the date hereof:(2) $__________ $__________
----------------------------------------------------------------------------------- ------------------- ------------------
B. SUBSCRIBERS (Section 5.5(b) of the Common Terms Agreement)
----------------------------------------------------------------------------------- ------------------- ------------------
1. Total customers receiving telecommunications services from the
Company and its Subsidiaries as of the end of the Fiscal
Quarter most recently ended prior to the date hereof: __________ __________
----------------------------------------------------------------------------------- ------------------- ------------------
C. SENIOR DEBT TO TOTAL CAPITALIZATION RATIO (Section 5.6(a) of the Common Terms Agreement)
----------------------------------------------------------------------------------- ------------------- ------------------
1. As of the date hereof, the aggregate principal amount (or, in
the case of Debt issued at a discount to par, issue price) of
all Debt of the Company and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP and converted from
Reais to Dollars (if necessary) by applying the PTAX 800 Rate
in effect as of the date hereof to the aggregate amount of such $__________
Debt:
----------------------------------------------------------------------------------- ------------------- ------------------
2. As of the date hereof, the aggregate principal amount (or
issue price, as applicable) of all Excluded Debt determined on
a consolidated basis in accordance with GAAP and converted
from Reais to Dollars (if necessary) by applying the PTAX 800
Rate in effect as of the date hereof to the aggregate amount
of such Excluded Debt: $__________
=================================================================================== =================== ==================
-------------------------------------
(2) [A.1. plus A.2.] multiplied by two.
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377
=================================================================================== =================== ==================
ACTUAL TARGET
AMOUNT AMOUNT
THE CFO HEREBY CERTIFIES THAT THE COMPANY IS IN COMPLIANCE WITH AS OF THE AS OF THE
EACH OF THE FOLLOWING FINANCIAL AND OPERATING COVENANTS: QUARTER QUARTER
ENDING ENDING
----------------------------------------------------------------------------------- ------------------- ------------------
3. As of the date hereof, the aggregate principal amount of
outstanding Shareholder Loans determined on a consolidated
basis in accordance with GAAP and converted from Reais to
Dollars (if necessary) by applying the PTAX 800 Rate in effect $__________
as of the date hereof to the aggregate amount of such
Shareholder Loans:
----------------------------------------------------------------------------------- ------------------- ------------------
4. Senior Debt as of the date hereof:(3) $__________
----------------------------------------------------------------------------------- ------------------- ------------------
5. Funded Equity as of the date hereof: $__________
----------------------------------------------------------------------------------- ------------------- ------------------
6. Total Capitalization as of the date hereof:(4) $__________
----------------------------------------------------------------------------------- ------------------- ------------------
7. Senior Debt to Total Capitalization Ratio as of the date
hereof:(5) _____:_____ _____:_____(6)
----------------------------------------------------------------------------------- ------------------- ------------------
D. TOTAL DEBT TO TOTAL CAPITALIZATION RATIO (Section 5.6(b) of the Common Terms Agreement)(7)
----------------------------------------------------------------------------------- ------------------- ------------------
1. Total Debt to Total Capitalization Ratio as of the date hereof:(8) [***]
_____:_____
=================================================================================== =================== ==================
----------
(3) C.1. minus the sum of [C.2. plus C.3.].
(4) The sum of C.1. and C.5.
(5) The ratio of C.4. to C.6.
(6) The Target Ratio (the Ratio of Senior Debt to Total Capitalization
determined pursuant to the terms of the Exchange Debt Agreement, which
shall not be less than [***]) from the date of the issuance of Exchange
Debt through December 31, 2002 and after December 31, 2002, [***].
(7) Applicable only through 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.
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378
=================================================================================== =================== ==================
ACTUAL TARGET
AMOUNT AMOUNT
THE CFO HEREBY CERTIFIES THAT THE COMPANY IS IN COMPLIANCE WITH AS OF THE AS OF THE
EACH OF THE FOLLOWING FINANCIAL AND OPERATING COVENANTS: QUARTER QUARTER
ENDING ENDING
----------------------------------------------------------------------------------- ------------------- ------------------
E. TOTAL DEBT TO ANNUALIZED EBITDA RATIO (Section 5.6(c) of the Common Terms Agreement)
----------------------------------------------------------------------------------- ------------------- ------------------
1. EBITDA for the most recently ended Fiscal Quarter preceding
the date hereof, determined on a consolidated basis in
accordance with GAAP and converted from Reais to Dollars (if
necessary) by applying the Average Conversion Factor for the $__________
relevant period to the aggregate of such amount:
----------------------------------------------------------------------------------- ------------------- ------------------
2. EBITDA for the Fiscal Quarter preceding the Fiscal Quarter
referred to in E.1. above, determined on a consolidated basis
in accordance with GAAP and converted from Reais to Dollars
(if necessary) by applying the Average Conversion Factor for
the relevant period to the aggregate of such amount: $__________
----------------------------------------------------------------------------------- ------------------- ------------------
3. Annualized EBITDA as of the end of the last day of the Fiscal
Quarter most recently ended prior to the date hereof:(9) $__________
----------------------------------------------------------------------------------- ------------------- ------------------
4. Ratio of Total Debt to Annualized EBITDA as of the end of the
last day of the Fiscal Quarter most recently ended prior to the _____:_____ _____:_____
date hereof:(10)
----------------------------------------------------------------------------------- ------------------- ------------------
F. INTEREST COVERAGE RATIO (Section 5.6(d) of the Common Terms Agreement)
=================================================================================== =================== ==================
-------------------------------------
[Footnote continued from previous page]
(8) The ratio of C.1. to C.5.
(9) [E.1. plus E.2.] multiplied by two.
(10) The ratio of C.1. to E.3..
Compliance Certificate
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379
=================================================================================== =================== ==================
ACTUAL TARGET
AMOUNT AMOUNT
THE CFO HEREBY CERTIFIES THAT THE COMPANY IS IN COMPLIANCE WITH AS OF THE AS OF THE
EACH OF THE FOLLOWING FINANCIAL AND OPERATING COVENANTS: QUARTER QUARTER
ENDING ENDING
----------------------------------------------------------------------------------- ------------------- ------------------
1. EBITDA of the Company and its Subsidiaries for the two
consecutive Fiscal Quarters most recently ended prior to the
date hereof determined on a consolidated basis in accordance
with GAAP and converted from Reais to Dollars (if necessary)
by applying the Average Conversion Factor for the relevant
period to the aggregate of such amount: $__________
----------------------------------------------------------------------------------- ------------------- ------------------
2. Interest Expense for the two consecutive Fiscal Quarters most
recently ended prior to the date hereof, determined on a
consolidated basis in accordance with GAAP and converted from
Reais to Dollars (if necessary) by applying the Average
Conversion Factor for such period to such amount: $__________
----------------------------------------------------------------------------------- ------------------- ------------------
3. Interest Coverage Ratio as of the date hereof:(11) _____:_____ _____:____
----------------------------------------------------------------------------------- ------------------- ------------------
G. FIXED CHARGE COVERAGE RATIO (Section 5.6(e) of the Common Terms Agreement)
----------------------------------------------------------------------------------- ------------------- ------------------
1. Fixed Charges for the two consecutive Fiscal Quarters most
recently ended prior to the date hereof, determined on a
consolidated basis in accordance with GAAP and converted from
Reais to Dollars (if necessary) by applying the Average
Conversion Factor for such period to such amount: $__________
----------------------------------------------------------------------------------- ------------------- ------------------
2. Fixed Charge Coverage Ratio as of the date hereof:(12) _____:_____ _____:_____
----------------------------------------------------------------------------------- ------------------- ------------------
H. CAPITAL EXPENDITURES (Section 5.6(f) of the Common Terms Agreement)(13)
=================================================================================== =================== ==================
------------
(11) Ratio of F.1. to F.2..
(12) Ratio of F.1. to G.1.
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7
380
=================================================================================== =================== ==================
ACTUAL TARGET
AMOUNT AMOUNT
THE CFO HEREBY CERTIFIES THAT THE COMPANY IS IN COMPLIANCE WITH AS OF THE AS OF THE
EACH OF THE FOLLOWING FINANCIAL AND OPERATING COVENANTS: QUARTER QUARTER
ENDING ENDING
----------------------------------------------------------------------------------- ------------------- ------------------
1. Capital Expenditures for the Fiscal Year most recently
ended prior to the date hereof, determined on a consolidated
basis in accordance with GAAP and converted from Reais to
Dollars (if necessary) by applying the Average Conversion
Factor over the relevant period to the aggregate amount of
Capital Expenditures during such period: $__________ $_________(14)
=================================================================================== =================== ==================
--------------
[Footnote continued from previous page]
(13) Applicable only to year end certifications.
(14) To the extent the amount set forth in Schedule 5 to the Common Terms
Agreement for any period exceeds Capital Expenditures for such period, 100%
of such excess may be applied to the immediately succeeding period, without
carryforward to any subsequent period. Any Capital Expenditure during any
period shall be attributable against (i) first, the amount of any
carryforward and (ii) second, the amount permitted for such period.
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381
The undersigned have executed this Compliance Certificate as of the
____th day of _______________, _____.
Signed:
-----------------------------
Name:
-------------------------------
Title: President
Signed:
-----------------------------
Name:
-------------------------------
Title: Chief Financial Officer
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382
EXHIBIT F-4
FORM OF
SOLVENCY CERTIFICATE
TO: LASALLE BANK NATIONAL
ASSOCIATION, AS COLLATERAL AGENT
UNDER THE COMMON TERMS AGREEMENT
REFERRED TO BELOW
THE INITIAL FACILITY AGENTS REFERRED TO BELOW
C/O LASALLE BANK NATIONAL
ASSOCIATION, AS COLLATERAL AGENT
000 X. XXXXXXX XXXXXX, XXXXX 0000
XXXXXXX, XXXXXXXX 00000
ATTENTION: XXXXX X. XXXX
Reference is hereby made to the Common Terms Agreement, dated as of
December 13, 1999 (as the same may be amended, supplemented, replaced, renewed
or otherwise modified from time to time, the "Common Terms Agreement"), by and
among:
1) VESPER HOLDING S.A., a sociedade anonima organized under the laws
of Brazil ("HoldCo");
2) XXXXXX X.X., a sociedade anonima organized under the laws of
Brazil and a wholly-owned subsidiary of HoldCo (the "Company");
3) ABN AMRO BANK N.V. ("ABN AMRO"), as Agent for itself, NORTEL
NETWORKS CORPORATION, a Canadian corporation ("Nortel"), as
initial purchaser under, and the other purchasers (the "Nortel
Purchasers") from time to time party to the "Nortel Note Purchase
Agreement" referred to therein (in such capacity, together with
its successors in such capacity, the "Nortel Facility Agent");
4) ABN AMRO, as Agent for itself and XXXXXXXX XXXXXXXXXXXX, a
Delaware corporation ("Qualcomm"), as initial purchasers under,
and the other purchasers (the "Qualcomm/Ericsson Purchasers")
from time to time party to the "Qualcomm/Ericsson Note Purchase
Agreement" referred to therein (in such capacity, together with
its successors in such capacity, the "Qualcomm/Ericsson Facility
Agent");
Solvency Certificate
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383
5) XXXXXX CORPORATION, a Delaware corporation, ("Xxxxxx"), as Agent
for itself, as initial purchaser under, and the other purchasers
(the "Xxxxxx Purchasers" and, together with the Nortel Purchasers
and the Qualcomm/Ericsson Purchasers, the "Purchasers") from time
to time party to the "Xxxxxx Note Purchase Agreement" referred to
therein (in such capacity, together with its successors in such
capacity, the "Xxxxxx Facility Agent" and together with the
Nortel Facility Agent and the Qualcomm/Ericsson Facility Agent,
the "Initial Facility Agents");
6) each Agent under the Other Pari Passu Financing Agreements that
may thereafter become party thereto by executing an Accession
Agreement, for themselves and the purchasers from time to time
party to the Other Pari Passu Financing Agreements (in such
capacity, together with its respective successors in such
capacity, the "Other Pari Passu Facility Agents"); and
7) LASALLE BANK NATIONAL ASSOCIATION, as common administrative and
collateral agent for itself, the Nortel Facility Agent, the
Nortel Purchasers, the Qualcomm/Ericsson Facility Agent, the
Qualcomm/Ericsson Purchasers, the Xxxxxx Facility Agent, the
Xxxxxx Purchasers, the Other Pari Passu Facility Agents, and the
Other Pari Passu Creditors (together with its successors in such
capacities, the "Collateral Agent").
Capitalized terms used but not defined herein have the meanings
assigned to them in the Common Terms Agreement.
This Solvency Certificate is being delivered pursuant to Section 2.1 of
the Common Terms Agreement. The undersigned are the [INSERT TITLES (PRESIDENT
AND CHIEF FINANCIAL OFFICER OR EQUIVALENT)] of [INSERT NAME OF COMPANY PARTY]
(the "Company Party") and hereby each further certify as of the date hereof, in
their respective capacities as officers of the Company Party, as follows:
1. We have responsibility for (a) the management and financial affairs
of the Company Party and the preparation of financial statements of the Company
Party, and (b) reviewing the financial and other aspects of the Company Party's
involvement in the Expanded Project and the other Permitted Business of the
Company Party.
2. We have carefully prepared and/or reviewed the contents of this
Solvency Certificate and have conferred with counsel for the Company Party for
the purpose of discussing the meaning of any provisions hereof that we desired
to have clarified.
3. Based upon the foregoing and upon the best of our knowledge after
due diligence, we have concluded that the Company Party is Solvent (as such term
is defined in the Common Terms Agreement), and the execution and delivery by the
Company Party of the Note Documents and the Other Pari Passu Financing Documents
to which it is a party, the performance of its obligations thereunder, and the
issuances of Notes contemplated by the Note Purchase Agreements, will not cause
the Company Party to fail to be Solvent.
Solvency Certificate
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4. The undersigned understand that the Purchaser Parties are relying
materially on the truth and accuracy of the foregoing in connection with the
extension of credit to the Company Party under the Note Purchase Agreement.
Solvency Certificate
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The undersigned have executed this Solvency Certificate as of the ___th
day of ___________, ____.
Name:
--------------------------------------------
Title: [President] (Company Party)
Name:
--------------------------------------------
Title: [Chief Financial Officer] (Company Party)
Solvency Certificate
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EXHIBIT G-1
FORM OF OPINION OF US COUNSEL
INTENTIONALLY OMITTED
387
EXHIBIT G-2
FORM OF LEGAL OPINION OF LOCAL COUNSEL
INTENTIONALLY OMITTED
388
EXHIBIT G-3
FORM OF LEGAL OPINION OF BRAZILIAN COUNSEL
INTENTIONALLY OMITTED
389
EXHIBIT G-4
FORM OF LEGAL OPINION
We are of the opinion that:
1. Obligor is a corporation, duly incorporated, validly existing, and in
good standing under the laws of the State of Delaware. Obligor has all requisite
corporate power and authority and the legal right to own and operate its
properties, to carry on its business as heretofore conducted, to enter into the
Financing Documents to which it is or will be a party and to carry out the
transactions contemplated thereby.
2. The execution and delivery by Obligor of the Financing Documents to
which it is a party and the performance of its obligations thereunder have been
duly authorized by all necessary corporate action. The Sideletter has been duly
executed and delivered by Obligor. The ACCA has been duly authorized and, upon
delivery thereof by the Collateral Agent in accordance with the provisions of
the Sideletter, will have been duly delivered by Obligor.
3. The execution, delivery and performance by Obligor of the Financing
Documents does not and will not violate any constitution, statute, law or
regulation of the State of Colorado or require any authorization, consent,
waiver or approval of any governmental authority or regulatory body of the State
of Colorado, in each case applicable to Obligor.
4. The execution, delivery and performance by Obligor of the Financing
Documents does not (i) violate (A) the certificate of incorporation or bylaws of
Obligor, or (B) to our knowledge, any order, judgment or decree of any court or
other agency of government binding on Obligor or its property, or (ii) result in
a breach of or default under any indenture, loan agreement or other material
contract of Obligor listed on Schedule B which Obligor has informed us is a list
of all material contracts of Obligor (each a "Material Contract"), (B) result in
any obligations of Obligor under any Material Contract becoming due and payable
or subject to redemption or repurchase (including at the option of any party) or
(C) result in or require the creation or imposition of any lien or encumbrance
upon any assets of Obligor under any Material Contract.
5. You have requested that we advise you whether a court of the State of
Colorado would give effect to the choice of law provision in the Financing
Documents in favor of the laws of the State of New York. While the courts of the
State of Colorado generally give effect to a choice of law provision within a
contract, you should be aware that a court of the State of Colorado might not
give effect to the choice of law provisions contained in the Financing Documents
if it found that: (i) a jurisdiction other than New York has a materially
greater interest than New York in the determination of a particular issue
arising under the Financing Documents, (ii) the law of such other jurisdiction
would
1
390
be the applicable law absent the parties choice of law, and (iii) the
application of the law of New York would be contrary to a fundamental policy of
such other jurisdiction. In such event, the court might apply the law of such
other jurisdiction pursuant to Section 187 of the RESTATEMENT (SECOND) OF
CONFLICTS OF LAW. Although we have not investigated or researched the question,
we are presently unaware of any fundamental policy of the State of Colorado
which would be contrary to the application of the law of New York to the
Financing Documents. We render no opinion as to the enforceability of the choice
of law provision in the Financing Documents if reviewed by a court of any
jurisdiction other than the State of Colorado.
2
391
EXHIBIT H
EXCHANGE DEBT AGREEMENT
This EXCHANGE DEBT AGREEMENT, dated as of December 17, 1999 (as amended
from time to time, the "Agreement"), by and among XXXXXX X.X., a sociedade
anomina organized under the laws of Brazil (the "Company") and a wholly owned
subsidiary of Vesper Holding, S.A., a sociedade anomina organized under the laws
of Brazil ("HoldCo"); NORTEL NETWORKS CORPORATION, a Canadian corporation
("Nortel"), as the initial purchaser under the "Nortel Note Purchase Agreement"
referred to below; XXXXXXXX XXXXXXXXXXXX, a Delaware corporation ("Qualcomm"),
as an initial purchaser under the "Qualcomm/Ericsson Note Purchase Agreement"
referred to below; TELEFONAKTIEBOLAGET LM ERICSSON (PUBL.), a Swedish company
("Ericsson"), XXXXXX CORPORATION, a Delaware corporation ("Xxxxxx", as the
initial purchaser under the "Xxxxxx Note Purchase Agreement" referred to below.
R E C I T A L S
A. The Company has entered into (i) that certain Note Purchase
Agreement dated as of December 13, 1999 (the "Nortel Note Purchase Agreement")
with ABN Amro Bank, as administrative agent (the "Nortel Facility Agent"),
Nortel, as initial purchaser, and the other Purchasers thereunder; (ii) that
certain Note Purchase Agreement dated as of December 13, 1999 (the
"Qualcomm/Ericsson Note Purchase Agreement") with Qualcomm, as administrative
agent (the "Qualcomm/Ericsson Facility Agent"), ABN Amro Bank N.V. and Qualcomm,
as initial Purchasers, the other Purchasers thereunder and Ericsson; and (iii)
that certain Note Purchase Agreement dated as of December 13, 1999 (the "Xxxxxx
Note Purchase Agreement" and, together with the Nortel Note Purchase Agreement
and the Qualcomm/Ericsson Note Purchase Agreement, the "Note Purchase
Agreements") with the Xxxxxx, as administrative agent (the "Xxxxxx Facility
Agent" and, together with the Nortel Facility Agent and the Qualcomm/Ericsson
Facility Agent, the "Facility Agents"), Xxxxxx, as initial Purchaser, and the
other Purchasers thereunder.
B. In connection with the Note Purchase Agreements, HoldCo, the
Company, the Facility Agents, the administrative agents under each Other Pari
Passu Financing Agreement and LASALLE BANK NATIONAL ASSOCIATION, as common
administrative and collateral agent for itself, the Nortel Facility Agent, the
Nortel Purchasers, the Qualcomm/Ericsson Facility Agent, the Qualcomm/Ericsson
Purchasers, the Xxxxxx Facility Agent, the Xxxxxx Purchasers, the Other Pari
Passu Facility Agents, and the other Pari Passu Creditors (together with its
successors in such capacities, the "Collateral Agent") have entered into that
certain Common Terms Agreement dated as of December 13, 1999 (as amended from
time to time, the "Common Terms Agreement"), which sets forth certain common
terms, conditions and covenants relating to the Note Purchase Agreements and
each Other Pari Passu Financing Agreement.
C. The Company and each of the Vendor Purchasers have agreed that, on
the terms and subject to the conditions set forth in this Agreement, the Common
Terms Agreement and each of the Note Purchase Agreements and subject to receipt
of prior approval from the Central Bank from time to time, the Vendor Purchasers
may require the Company to issue, and each of the Vendor Purchasers may and,
under the circumstances set forth herein, shall accept, in
392
exchange for all or a portion of the Notes purchased and held by them pursuant
to the respective Note Purchase Agreement, debt securities as further described
in this Agreement (the "Exchange Debt").
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS AND RELATED MATTERS
SECTION 1.1 DEFINED TERMS GENERALLY. All capitalized terms used but not
otherwise defined herein shall have the meanings assigned to such terms in the
Common Terms Agreement.
SECTION 1.2 DEFINITIONS. The following terms with initial capital
letters have the following meanings:
"ADDITIONAL EXCHANGE DEBT" means Exchange Debt issued as
payment in kind of interest accrued with respect to any Exchange Debt (whether
Initial Exchange Debt or Additional Exchange Debt) as permitted or required by
the Indenture and the Description of Notes, as may be modified by the Purchasers
pursuant to Section 2.3(a).
"AGREEMENT" is defined in the Preamble and includes all
Exhibits.
"COMPANY SPREAD" is defined in Section 2.3(b)(ii).
"COMPANY'S BANK" is defined in Section 2.3(b)(ii).
"CONVERSION DATE" means the date of conversion of Notes and
issuance of Exchange Debt.
"CONVERTING VENDOR PURCHASER" is defined in Section 2(e)(i)
and includes a Vendor Purchaser who elects pursuant to Section 2.2 to convert a
portion of the Notes held by it under its Note Purchase Agreement into Exchange
Debt.
"CONVERSION PORTION" is defined in Section 2.1(e)(i).
"DESIGNATED TRUSTEE" means any Person designated by the
Required Vendor Purchasers to act as the trustee under the Indenture.
"DISPUTED MARKET TERMS" is defined in Section 2.3(c).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
EXCHANGE DEBT AGREEMENT
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393
"EXCHANGE DEBT" is defined in the Recitals.
"EXCHANGE DEBT CONVERSION AGREEMENT" is defined in Section
2.1(a)(ii).
"EXCHANGE DEBT DOCUMENTS" is defined in Section 2.1(a)(iv).
"FACILITY AGENTS" is defined in the Recitals.
"FINAL OFFERING MEMORANDUM" is defined in Section 2.4(d)(ii).
"XXXXXX FACILITY AGENT" is defined in the Recitals.
"XXXXXX NOTE PURCHASE AGREEMENT" is defined in the Recitals.
"INDENTURE" is defined in Section 2.1(a)(i).
"INITIAL EXCHANGE DEBT" means Exchange Debt issued pursuant to
Section 2.1 or Section 2.2.
"INITIATING VENDOR PURCHASER" is defined in Section 2.1(b).
"MARKET SPREAD" means the semi-annual equivalent yield to
maturity of any Tranche of Exchange Debt (expressed as a spread over the U.S.
Treasury Yield) determined in accordance with Section 2.3(b).
"NON-CONVERTING VENDOR PURCHASER" is defined in Section
2.1(e)(i) and includes any Vendor Purchaser who elects under Section 2.2 not to
convert any Notes held by it under its Note Purchase Agreement into Exchange
Debt.
"NON-RECOURSE PARTICIPATION" means a Participation granted by
a Vendor Purchaser under the applicable Note Purchaser Agreement other than a
Participation that is fully guarantied by such Vendor Purchaser with respect to
principal, interest and any other amounts payable under the applicable Note
Purchase Agreement, the applicable Note(s) and the Common Terms Agreement.
"NORTEL FACILITY AGENT" is defined in the Recitals.
"NORTEL NOTE PURCHASE AGREEMENT" is defined in the Recitals.
"NOTICE OF CONVERSION TO EXCHANGE DEBT" means a notice, given
by each Vendor Purchaser to the respective Facility Agent pursuant to Section
2.4(a), and to Section 2.7 of the respective Note Purchase Agreement,
substantially in the form attached hereto as Exhibit A.
"NOTICE OF DISPUTED TERMS AND CONDITIONS" is defined in
Section 2.3(c).
"NOTICE OF NEGOTIATION" is defined in Section 2.1(a).
EXCHANGE DEBT AGREEMENT
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394
"NOTICE OF PROPOSED CONVERSION TO EXCHANGE DEBT" means a
notice, given by the Initiating Vendor Purchaser to each other Vendor Purchaser
pursuant to Section 2.1(b), substantially in the form attached hereto as Exhibit
B.
"NOTICE OF PROPOSED TERMS AND CONDITIONS" is defined in
Section 2.1(d)(iii).
"NOTIFYING FACILITY AGENT" is defined in Section 2.2.
"OFFERING MEMORANDUM" is defined in Section 2.4(d)(ii).
"OUTSIDE BANK" is defined in Section 2.3(c).
"PORTAL" is defined in Section 5.1(a).
"PRELIMINARY OFFERING MEMORANDUM" is defined in Section
2.4(d)(ii).
"PRICING DATE" is defined in Section 2.3(a).
"PROCESS AGENT" is defined in Section 5.9(b).
"PURCHASERS' BANK" is defined in Section 2.3(b).
"PURCHASER SPREAD" is defined in Section 2.3(a)(ii).
"QUALCOMM/ERICSSON FACILITY AGENT" is defined in the Recitals.
"QUALCOMM/ERICSSON NOTE PURCHASE AGREEMENT" is defined in the
Recitals.
"QUALIFYING DEBT OFFERING" means an offering of Excluded Debt
by the Company that, if a Notice of Proposed Conversion to Exchange Debt has
previously been given pursuant to Section 2.1(b), is reasonably expected to be
completed on or before the Conversion Date proposed in such notice or such other
date as the Converting Vendor Purchasers agree in accordance Section 2.1(d).
"REGISTERED EXCHANGE DEBT" is defined in Section 5.1(a).
"REGISTRATION RIGHTS AGREEMENT" is defined in Section 2.3(e).
"REQUESTING VENDOR PURCHASER" is defined in Section 2.1(a).
"REQUIRED VENDOR PURCHASERS" means Vendor Purchasers holding
more than 50% (in Dollar amount) of the sum of (a) the aggregate outstanding
principal amount of the Notes held by all of the Vendor Purchasers under the
respective Note Purchase Agreements, plus (b) until the termination of such
commitments, the undrawn amount of the aggregate Commitments under such Note
Purchase Agreements, if any, provided that the Commitments or Notes, as
applicable, of any Non-Converting Vendor Purchaser shall be disregarded for
purposes
EXCHANGE DEBT AGREEMENT
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395
of this determination at all times after such Vendor Purchaser has indicated in
a notice pursuant to Section 2.1(e) that such Vendor Purchaser is a
Non-Converting Vendor Purchaser.
"RESALE DATE" means the date designated by the Required Vendor
Purchasers on which an offering of Exchange Debt for resale by the Vendor
Purchasers is expected to close.
"RESALE DOCUMENTS" is defined in Section 2.1(a)(iv).
"SENIOR DISCOUNT EXCHANGE DEBT" is defined in Section 2.3(a).
"SUBORDINATED EXCHANGE DEBT" is defined in Section 2.3(a).
"TARGET RATIO" means with respect to the Company, a ratio of
Senior Debt to Total Capitalization to be determined in accordance with Section
2.1, which ratio shall not be less than [***], calculated in accordance with
Section 5.6(a) of the Common Terms Agreement.
"TRANCHE" means (i) all Initial Exchange Debt issued on the
same Conversion Date pursuant Section 2.1; (ii) as provided in Section 2.2, all
Initial Exchange Debt issued pursuant to Section 2.2 in respect of Initial
Exchange Debt issued pursuant to Section 2.1; and (iii) all Additional Exchange
Debt issued with respect to any Exchange Debt of a particular Tranche, all of
which Initial Exchange Debt and Additional Exchange Debt of any Tranche having
the same terms including with respect to covenants, events of default and
remedies, as the Initial Exchange Debt of such Tranche issued pursuant to
Section 2.1.
"U.S. TREASURY YIELD" means, with respect to any Tranche of
Exchange Debt, the rate per annum equal to the semiannual equivalent yield to
maturity of the Comparable Treasury Issue on the Pricing Date, assuming a price
for the Comparable Treasury Issue (expressed as a percentage of its principal
amount) equal to the applicable Comparable Treasury Price on the Pricing Date.
For purposes of this definition, (i) "Comparable Treasury Issue" means the
United States Treasury security selected by the Purchasers' Bank as having a
maturity comparable to the term of the relevant Tranche of Exchange Debt that
would be utilized, at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt securities of
comparable maturity to the term of such Tranche; (ii) "Comparable Treasury
Price" means, with respect to the relevant Pricing Date, (a) the average of the
applicable Reference Treasury Dealer Quotations for such Pricing Date, after
excluding the highest and lowest such applicable Reference Treasury Dealer
Quotations, or (b) if the Purchasers' Bank obtains fewer than four such
Reference Treasury Dealer Quotations, the average of all such quotations; (iii)
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any Pricing Date for Exchange Debt, the average, as
determined by the Purchasers' Bank, of the bid and asked prices for the
Comparable Treasury Issue for such Exchange Debt (expressed in each case as a
percentage of its principal amount) quoted by such Reference Treasury Dealer at
5:00 p.m. on the Pricing Date; and (iv) "Reference Treasury Dealer" means at
least four primary U.S. Government securities dealers in New York City as the
Purchasers' Bank shall select.
[*] 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.
EXCHANGE DEBT AGREEMENT
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396
"VENDOR PURCHASERS" means such of Nortel, Qualcomm, Ericsson
and Xxxxxx as have not assigned all of their Notes and Commitments under the
Note Purchase Agreements in a Non-Recourse Assignment.
SECTION 1.3 RELATED MATTERS. Section 1.2 of the Common Terms Agreement
(other than Section 1.2(b)) shall govern the interpretation of this Agreement
and is hereby incorporated herein by reference, provided that all references
therein to "this Agreement" shall read as being to this Agreement. For purposes
of this Agreement, all Notes and Commitments subject to an Initial Purchaser
Guarantee provided by a Vendor Purchaser shall be deemed held by and outstanding
to such Vendor Purchaser.
SECTION 1.4 DETERMINATIONS. Any determination or calculation
contemplated by this Agreement that is made by any Vendor Purchaser shall be
presumed correct and be binding upon the Company Parties, in the absence of
manifest error. References in this Agreement to any "determination" by any
Vendor Purchaser include good faith estimates by such Vendor Purchaser (in the
case of quantitative determinations), and good faith beliefs by such Vendor
Purchaser (in the case of qualitative determinations). All consents and other
actions of any Vendor Purchaser contemplated by this Agreement may be given,
taken, withheld or not taken in good faith in such Vendor Purchaser's absolute
and sole discretion (whether or not so expressed), except as otherwise expressly
provided herein.
ARTICLE II
CONVERSION OF NOTES TO EXCHANGE DEBT; DELIVERY OF EXCHANGE DEBT
SECTION 2.1 OPTIONAL CONVERSION OF NOTES TO EXCHANGE DEBT.
(a) NOTICE OF NEGOTIATION. If on any single occasion prior to
December 31, 2002, any of the Vendor Purchasers (the "Requesting Vendor
Purchaser") either (1) gives a Notice of Proposed Conversion to Exchange Debt
pursuant to Section 2.1(b) or (2) determines in its discretion that it may make
a Non-Recourse Assignment of all or any portion of the Notes and Commitments
held by it under the respective Note Purchase Agreement within the next four
months and, in connection therewith, believes it to be advisable to commence
negotiations of the terms and conditions of the Exchange Debt Documents, the
Requesting Vendor Purchaser shall provide a notice to such effect (a "Notice of
Negotiation") to the other Vendor Purchasers and the Company, and the Company
shall promptly enter into good faith negotiations with the Requesting Vendor
Purchaser, which negotiations may be joined by the other Vendor Purchasers. Such
negotiations shall be conducted [in New York] and shall be concluded as
expeditiously as possible, consistent with a schedule that is customary for
negotiations of high yield debt transactions between issuers and underwriters,
and shall include, at the discretion of the Required Vendor Purchasers, the
following agreements and documents, the terms of which shall be in accordance
with Section 2.3:
EXCHANGE DEBT AGREEMENT
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397
(i) an indenture pursuant to which the Exchange Debt shall be
issued and setting forth the covenants, events of default, subordination
provisions and other terms and conditions of the Exchange Debt consistent with
this Agreement (together with any supplemental indenture contemplated by this
Section 2.1(a), the "Indenture");
(ii) a purchase document pursuant to which the Exchange Debt
will be acquired by the Converting Vendor Purchasers and setting forth
representations and warranties, covenants, conditions to issuance, indemnities
and other customary provisions consistent with this Agreement, including the
delivery of customary comfort letters upon any Resale Date (the "Exchange Debt
Conversion Agreement");
(iii) if such an agreement will be required in connection with
the Exchange Debt of such Tranche pursuant to Section 2.3(c), the Registration
Rights Agreement; and
(iv) any other documents (other than an Offering Memorandum)
related to the resale by the Converting Vendor Purchasers of the Exchange Debt
as may be reasonably required by the Converting Vendor Purchasers, including
issuer's counsel opinions, comfort letters and other documents that would
customarily be required in connection with resale pursuant to Rule 144A or
Regulation S of high yield debt securities of Brazilian or other emerging market
issuers in the telecommunications business ("Resale Documents" or, together with
the documents listed in clauses (i) through (iii) the "Exchange Debt
Documents").
All decisions with regard to the terms and conditions of the
Exchange Debt Documents shall be made, on behalf of the Converting Vendor
Purchasers, by the Requesting Vendor Purchaser, unless the Required Vendor
Purchasers determine otherwise, after consultation with all Converting Vendor
Purchasers. At the request of the Converting Vendor Purchasers, the negotiation
(or completion of the negotiation) of all or a part of the substantive covenants
and events of default of the Indenture in respect of any Tranche of Exchange
Debt may be deferred until after issuance of such Exchange Debt pursuant to
Section 2.1(e)(i). In any such case, such covenants or events of default shall
not be included in the related Indenture on the initial Conversion Date, and
negotiation of such covenants and events of default shall be concluded, and the
Indenture shall be supplemented to include such covenants and events of default,
in each case as expeditiously as possible thereafter.
(b) NOTICE OF PROPOSED CONVERSION TO EXCHANGE DEBT.
(i) If at any time prior to December 31, 2002, any of
the Vendor Purchasers (the "Initiating Vendor Purchaser") determines in
its discretion that it may make a Non-Recourse Assignment of all or any
portion of the Notes and Commitments held by it under the respective
Note Purchase Agreement and desires to convert all or any portion of
the Notes held by it and the other Vendor Purchasers into Exchange
Debt, it shall give to each of the other Vendor Purchasers a Notice of
Proposed Conversion to Exchange Debt. Any such Notice of Proposed
Conversion to Exchange Debt shall (i) state that a Non-Recourse
Assignment is being proposed, (ii) set forth the proposed Conversion
Date (which shall not be less than sixty Business Days after the date
on
EXCHANGE DEBT AGREEMENT
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398
which such notice is received or if terms have been previously
negotiated pursuant to Section 2.1(a), twenty Business Days) and the
proposed Pricing Date, (iii) indicate a proposed Target Ratio and an
estimate of the aggregate principal amount of Notes that will have to
be converted into Exchange Debt in order to achieve such Target Ratio,
(iv) set forth the final maturity date of such Tranche of Exchange
Debt, will shall be no earlier than the date that is one year after the
latest Final Maturity Date, (v) if not previously agreed in
negotiations under Section 2.1(a), specify whether such Tranche of
Exchange Debt will be Senior Discount Exchange Debt or Subordinated
Exchange Debt, (vi) if not previously agreed in negotiations under
Section 2.1(a), set forth whether such Tranche of Exchange Debt will be
unsecured or secured by a second priority lien on the Collateral and
(vii) in the case of any Exchange Debt with a final maturity date after
the date that is one year after the latest Final Maturity Date, specify
any terms of optional redemption of such Tranche (with the redemption
prices being specified by reference to the Market Spread). If the terms
and conditions of the Exchange Debt Documents have not been previously
negotiated, a Notice of Proposed Conversion to Exchange Debt shall
constitute a Notice of Negotiation as contemplated by Section 2.1(a)
and the Company and the Vendor Purchasers shall promptly commence
negotiation of the Exchange Debt Documents in accordance with such
Section. The terms and conditions of any Tranche of Exchange Debt shall
be those that are customary for high yield debt transactions by
Brazilian or other emerging market issuers similar to the Company on
the proposed Pricing Date as determined in accordance with Sections
2.1(a) and 2.3.
(ii) Notwithstanding anything contained in this
Section 2.1(b) to the contrary, if negotiations have commenced pursuant
to the delivery of a Notice of Proposed Conversion to Exchange Debt,
and a change has occurred in market conditions that would adversely
affect the sale of the Exchange Debt, as determined in the sole
discretion of the Required Vendor Purchasers, after consultation with
the Converting Vendor Purchasers and approved by the Initiating Vendor
Purchaser, then the Initiating Vendor Purchaser may provide notice to
the Company that the negotiations are to cease. The Company shall be
obligated to re-enter negotiations at a later date after receiving
notification by any Vendor Purchaser that the Required Vendor
Purchasers have determined that market conditions are such that a sale
of the Exchange Debt is feasible and they are prepared to restart
negotiations. In any such case, the Conversion Date shall be reset by
the Required Vendor Purchasers to a date reasonably acceptable to the
Company that is no more than 20 Business Days after the date on which
such notice to restart negotiations is given to the Company. This
Section 2.1(b)(ii) shall be applicable to all such restarted
negotiations (without limitation on the number of restarts) unless and
until the Exchange Debt described in the Notice of Proposed Conversion
to Exchange Debt has been issued.
(iii) In the event that negotiations are suspended
pursuant to clause (ii) above prior to the expiration of the ten-day
period for notification to the Initiating Vendor Purchaser referred to
in Section 2.1(e), any Vendor Purchaser who has not given notice
pursuant to such Section shall have ten days from the date on which
negotiations are
EXCHANGE DEBT AGREEMENT
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399
reinitiated (if any) to notify the Initiating Vendor Purchaser of
its election to convert or not to convert in accordance with Section
2.1(e)(i).
(c) NOTICE TO THE COMPANY. Simultaneously with sending a
Notice of Proposed Conversion to Exchange Debt to the other Vendor Purchasers,
the Initiating Vendor Purchaser shall notify the Company of the proposed
Conversion Date and the proposed Pricing Date.
(d) VOTE, OBJECTION OF THE VENDOR PURCHASERS; NOTICE OF
PROPOSED TERMS AND CONDITIONS.
(i) The establishment of the Target Ratio, the
issuance of a Tranche of Exchange Debt and the terms and conditions of
any such Tranche shall require the approval of the Required Vendor
Purchasers.
(ii) Unless Vendor Purchasers holding more than 49%
of sum of (x) the aggregate principal amount of the Notes held by all
of the Vendor Purchasers under the respective Note Purchase Agreements,
plus (y) until the termination of such Commitments, the undrawn
amount of the aggregate Commitments held by all Vendor Purchasers under
such Note Purchase Agreements, object in writing within ten Business
Days after the date of any Notice of Proposed Conversion to Exchange
Debt, the Target Ratio and the issuance of the Tranche of Exchange Debt
proposed to be issued, on the terms and conditions set forth in the
Notice of Proposed Conversion to Exchange Debt and as contemplated by
this Agreement, shall be deemed to have been approved by the Required
Vendor Purchasers. For purposes of the foregoing sentence, any Loans or
Commitments held by any Non-Converting Vendor Purchaser shall be
disregarded. If any Vendor Purchaser wishes to propose a different
Target Ratio or different terms and conditions for any Tranche of
Exchange Debt from those set forth in the Notice of Proposed Conversion
to Exchange Debt, such Vendor Purchaser shall notify the other Vendor
Purchasers thereof prior to the expiration of ten Business Days from
the date of the Notice of Proposed Conversion to Exchange Debt. Unless
such proposed different Target Ratio or different terms and conditions
are approved by the affirmative vote of the Required Vendor Purchasers
within five Business Days after such proposal is delivered to the other
Vendor Purchasers, such proposal shall be deemed rejected.
(iii) The Initiating Vendor Purchaser shall promptly
notify the Company of the approval of any issuance of Exchange Debt
pursuant to this Section 2(d), which notice shall include all terms and
conditions thereof referred to in the related Notice of Proposed
Conversion to Exchange Debt (other than the U.S. Treasury Rate and any
other terms and conditions to be determined on the Pricing Date (the
"Notice of Proposed Terms and Conditions").
(e) CONVERSION OPTION.
(i) Upon approval of the issuance of any Tranche of
Exchange Debt pursuant to Section 2.1(d), each Vendor Purchaser shall
have the option of converting, in
EXCHANGE DEBT AGREEMENT
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accordance with the terms of this Agreement, on a pro rata basis
(calculated based upon the respective principal amount of the Notes
then held by them), a principal amount of Notes held by such Vendor
Purchasers under its respective Note Purchase Agreement into a like
principal amount (or, in the case of Senior Discount Exchange Debt,
issue price) of Initial Exchange Debt such that (x) after giving effect
to all such conversions by all Purchasers, the Senior Debt to Total
Capitalization Ratio shall be less than or equal to the Target Ratio;
and (y) the aggregate principal amount of Notes so exchanged for
Initial Exchange Debt does not exceed the principal amount of Notes
being assigned by such Converting Vendor Purchasers pursuant to a
Non-Recourse Assignment (the principal amount of exchanged Notes being
the "Conversion Portion"). Each Vendor Purchaser shall notify the
Initiating Vendor Purchaser and all other Vendor Purchasers within ten
Business Days after receipt by such Vendor Purchaser of any Notice of
Proposed Conversion to Exchange Debt pursuant to Section 2.1(a) whether
it elects to convert and each Vendor Purchaser electing to convert in
accordance with such Notice (a "Converting Vendor Purchaser") shall be
obligated to convert Notes on the terms and conditions set forth in
such Notice of Proposed Conversion to Exchange Debt and this Agreement,
provided that all conditions to conversion set forth in the Exchange
Debt Conversion Agreement are satisfied or waived by each of the
Converting Vendor Purchasers on the Conversion Date in respect of such
Initial Exchange Debt. If any Vendor Purchaser elects not to convert
its full Conversion Portion (a "Non-Converting Vendor Purchaser"), the
Converting Vendor Purchasers shall recalculate each of their respective
Conversion Portions in accordance with this Section 2.1(e)(i). Any
Vendor Purchaser not providing a notice pursuant to this Section
2.1(e)(i) within such ten-day period shall be deemed to be a
Non-Converting Purchaser. The Conversion Portion calculated hereunder
shall be for estimate purposes only and the final conversion amount
shall be determined by mutual agreement of the Converting Vendor
Purchasers on the Conversion Date in respect of such Initial Exchange
Debt.
(ii) A Non-Converting Vendor Purchaser shall not
engage in a Non-Recourse Assignment of any Notes or Commitments that it
holds (or grant any Non-Recourse Participation, in respect of any
Loans or Commitments held by it) under the applicable Note Purchase
Agreement until the later of: (a) the date on which the Converting
Vendor Purchasers have sold, on a non-recourse basis at a price equal
to par, all of the Exchange Debt then being held by them and (b)
January 1, 2003; provided, that the terms of this clause (ii) shall not
apply if such Non-Converting Vendor Purchaser (x) has purchased from
the Converting Vendor Purchasers, on a pro rata basis, a principal
amount of Exchange Debt (at a price of par plus accrued interest) equal
to the amount of Exchange Debt that the Non-Converting Vendor Purchaser
would have acquired through conversion under subclause (i) above and
pursuant to Section 2.2, if such Non-Converting Vendor Purchaser had
initially elected to convert when the other Converting Vendor
Purchasers converted, (y) agrees to convert any additional amounts of
Notes as may be necessary required pursuant to Section 2.2 and (z)
executes all documents reasonable required by the Converting Vendor
Purchasers in connection with the foregoing clauses (x) and (y). After
satisfying the conditions in clauses (x), (y) and (z) above, such
Non-Converting Vendor Purchaser shall be considered a Converting Vendor
EXCHANGE DEBT AGREEMENT
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Purchaser for purposes of this Agreement. Notwithstanding anything
herein to the contrary, no Non-Converting Vendor Purchaser shall have
any right to determine any matter relating to any Tranche of Exchange
Debt unless it becomes a Converting Vendor Purchaser as contemplated by
the immediately preceding sentence.
(iii) The Initiating Vendor Purchaser, or Nortel,
with respect to a Non-Converting Vendor Purchaser pursuant to Section
2.2, shall provide written notice to the relevant Initial Facility
Agent with respect to a Non-Converting Vendor Purchaser, notifying such
Initial Facility Agent that, notwithstanding anything contained in the
applicable Note Purchase Agreement, such Non-Converting Vendor
Purchaser is not allowed to engage in a Non-Recourse Assignment of any
Notes or Commitments that it holds (or grant any Participation, as
defined in the applicable Note Purchase Agreement, in respect of any
Loans or Commitments held by it) under the applicable Note Purchase
Agreement until the Initial Facility Agent is otherwise notified by the
Initiating Vendor Purchaser, or Nortel, with respect to a
Non-Converting Vendor Purchaser pursuant to Section 2.2. The Initiating
Vendor Purchaser, or Nortel, with respect to a Non-Converting Vendor
Purchaser pursuant to Section 2.2, shall promptly, and in any event
within five Business Days, provide the following notices, as
applicable, to the relevant Initial Facility Agent: (1) notice that the
Converting Vendor Purchasers have sold, on a non-recourse basis, all of
the Exchange Debt then being held by them; provided that if such sales
occur prior to January 1, 2003, the notice shall specify that the
Non-Converting Vendor Purchaser is prohibited from engaging in a
Non-Recourse Assignment of any Notes or Commitments that it holds (or
grant any Participation, as defined in the applicable Note Purchase
Agreement, in respect of any Loans or Commitments held by it) under the
applicable Note Purchase Agreement until January 1, 2003 and (2) notice
that the Non-Converting Vendor Purchaser has become a Converting Vendor
Purchaser in accordance with Section 2.1(e)(ii) and the Non-Converting
Vendor Purchaser is allowed to sell, assign or transfer any of its
interest in the Notes or Commitments (including by way of
Participation) under such Note Purchase Agreement without restriction
under this Agreement.
(f) QUALIFYING DEBT OFFERING. Notwithstanding
anything herein to the contrary:
(i) At any time after a Vendor Purchaser has
delivered a Notice of Negotiation or a Notice of Proposed Conversion to
Exchange Debt and no later than ten Business Days prior to the proposed
Conversion Date in respect of any proposed issuance of Initial Exchange
Debt, the Company may notify the Vendor Purchasers that it is in the
process of initiating a Qualifying Debt Offering. If any such notice is
given after the receipt by the Company of any Notice of Proposed
Conversion to Exchange Debt, such notice shall state that the proceeds
of such Qualifying Debt Offering will be applied to the prepayment of
Notes in accordance with Article 8 of the Common Terms Agreement and,
together with such notice, the Company shall provide a letter from the
managing underwriting firm engaged by the Company for such Qualifying
Debt Offering confirming the expected date of closing of such
Qualifying Debt Offering and
EXCHANGE DEBT AGREEMENT
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acknowledging that the net proceeds of such offering will be used to
prepay the Notes on a pro rata basis in accordance with Article 8 of
the Common Terms Agreement such that the aggregate amount of Notes
prepaid is equal to the aggregate amount of the Conversion Portions of
the Converting Vendor Purchasers.
(ii) Upon giving a notice pursuant to Section
2.1(f)(i) the Company shall be obligated upon the closing of such
Qualifying Debt Offering to prepay a pro rata share of each Vendor
Purchaser's Notes in accordance with Article 8 of the Common Terms
Agreement and upon such prepayment, the Company shall not be required
to issue any Exchange Debt as contemplated by the related Notice of
Proposed Conversion to Exchange Debt or pursuant to Section 2.2;
provided, that if such Qualifying Debt Offering does not close and
payment is not received by the Vendor Purchasers within 30 days from
the Conversion Date proposed in the Notice of Proposed Conversion to
Exchange Debt (or such later date as the Converting Vendor Purchasers
shall unanimously agree in their discretion), the Converting Vendor
Purchasers shall have the right to initiate, and the Company shall have
the obligation to take such steps as are otherwise required pursuant to
this Agreement without regard to this Section 2.1(f) (including
negotiating Exchange Debt Documents in accordance with Section 2.1(a),
if applicable).
SECTION 2.2 MAINTENANCE OF TARGET RATIO; MANDATORY CONVERSION.
(a) If at any time from and after any conversion of any Notes
into Initial Exchange Debt and prior to December 31, 2002, any Facility Agent
(the "Notifying Facility Agent") provides notice to the Vendor Purchasers, under
their respective Note Purchase Agreements, that, giving effect to any proposed
Issuance of Notes pursuant to a Notice of Issuance under any of the Note
Purchase Agreements and the contribution to the Company of Qualifying Funded
Equity in an amount sufficient to maintain a Senior Debt to Total Capitalization
Ratio of [***], the Senior Debt to Total Capitalization Ratio is greater than
the Target Ratio then the Vendor Purchasers (other than the Initiating Vendor
Purchaser) shall have the option to convert in accordance with the terms of this
Agreement, a principal amount of the Notes then held by the Vendor Purchasers
under their respective Note Purchase Agreements.
(b) Any Vendor Purchaser electing not to convert its Notes
pursuant to Section 2.2(a) shall so notify the Notifying Facility Agent and the
other Vendor Purchasers within five Business Days after receipt of notice from
the Notifying Facility Agent of its election not convert and shall thereafter be
considered a Non-Converting Vendor Purchaser and shall be subject to Sections
2.2(e)(ii) and (iii).
(c) Any Vendor Purchaser electing to convert its Notes
pursuant to Section 2.2(a) shall so notify the Notifying Facility Agent and the
other Vendor Purchasers within five Business Days after receipt of notice from
the Notifying Facility Agent and shall be considered a Converting Vendor
Purchaser and shall be obligated to convert Notes, on a pro rata basis
(calculated based upon the respective principal amount of the Notes held by
them), into a like principal amount (or, in the case of Senior Discount Exchange
Debt, issue price) of Initial
[*] 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.
EXCHANGE DEBT AGREEMENT
12
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Exchange Debt such that, after giving effect to all such conversions by all
Converting Vendor Purchasers, the Senior Debt to Total Capitalization Ratio
shall be equal to the Target Ratio; provided, however, that no such conversion
shall be effectuated unless (a) the Company is at that time in compliance with
Section 5.6(b) of the Common Terms Agreement on the Conversion Date prior to
giving effect to the Notes contemplated by the Notice of Issuance, (b)
Qualifying Funded Equity shall have been contributed to the Company such that,
after giving effect to all such contributions and prior to giving effect to any
issuance of Initial Exchange Debt pursuant to this Section 2.2 the Senior Debt
to Total Capitalization Ratio of the Company shall be equal to [***] and (c) all
conditions to conversion set forth in the Exchange Debt Conversion Agreement
(including those set forth in Section 2.3) are satisfied. If any conversion of
Notes and issuance of Initial Exchange Debt is made pursuant to this Section
2.2, such Initial Exchange Debt shall be deemed to be part of the same Tranche
of Exchange Debt as the Initial Exchange Debt last issued pursuant to Section
2.1.
(d) Any Vendor Purchaser not providing notice to the Notifying
Facility Agent pursuant to clause (b) or (c) above shall be deemed to be a
Non-Converting Purchaser and shall be subject to Sections 2.1(e)(ii) and (iii).
SECTION 2.3 TERMS OF EXCHANGE DEBT, EXCHANGE DEBT DOCUMENTS.
(a) MARKET TERMS GENERALLY.
(i) Each Tranche of Exchange Debt shall be issued at a
semi-annual equivalent yield to maturity (determined without regard to
the following proviso) equal to the sum of (a) the Market Spread
determined pursuant to Section 2.3(a)(ii) and (b) the U.S. Treasury
Yield on the date that is three Business Days (or such longer period as
may be set forth in the Exchange Debt Conversion Agreement with respect
to such Tranche) prior to the initial Conversion Date of such Tranche
pursuant to Section 2.1 (the "Pricing Date"), provided that to the
extent any Exchange Debt remains outstanding after December 31, 2002
and is held by any Vendor, such Exchange Debt shall bear interest at a
rate equal to the rate applicable to such Exchange Debt prior to
December 31, 2002 plus [***]. If any Vendor sells, assigns or transfers
the Exchange Debt at any time after December 31, 2002, such Exchange
Debt shall bear interest at a rate equal to the rate applicable to such
Exchange Debt immediately prior to such sale, assignment or transfer.
(ii) Each Tranche of Exchange Debt (and the related Indenture
and other Exchange Debt Documents) shall have the terms and conditions
set forth in the Notice of Proposed Conversion to Exchange Debt (to the
extent referred to in clauses (iv), (v) and (vi) of Section 2.1(b)), as
modified or affirmed pursuant to Section 2.1(d), shall and such
covenants, events of default and other terms and conditions (including
all terms and conditions referred to in the definition of "Excluded
Debt") as the Required Vendor Purchasers and the Company determine
during negotiations pursuant to Section 2.1(a) and in accordance with
this Section 2.3(a) as being customary for high yield debt
[*] 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.
EXCHANGE DEBT AGREEMENT
13
404
transactions by Brazilian or other emerging market issuers in the
telecommunications business on the Pricing Date. Terms of any Tranche
of Exchange Debt shall include whether such debt will be senior
unsecured Debt (in which case such Exchange Debt will be issued at a
discount to its principal amount, and will not require any payments of
principal or interest until a date specified in such notice that is at
least one year after the latest Final Maturity Date ("Senior Discount
Exchange Debt")) or subordinated Debt (in which case interest on such
Exchange Debt will be paid currently, subject to the subordination
provisions thereof ("Subordinated Exchange Debt")) and whether such
Tranche of Exchange Debt will be unsecured or secured by a second
priority lien on the Collateral.
(iii) To the extent any of the Vendor Purchasers shall hold
any Exchange Debt on December 31, 2002, the Company shall redeem Exchange Debt
then outstanding to the Vendor Purchasers on a pro rata basis as contemplated by
Section 3(d) of the Capital Contribution Agreement.
(b) DETERMINATION OF MARKET SPREAD. The Market Spread shall be
determined as follows:
(i) The Company shall retain an investment bank
internationally recognized as active in underwriting and trading high
yield debt securities of Brazilian or other emerging market issuers
(the "Company's Bank") which, within five Business Days after the
receipt by the Company of any Notice of Proposed Terms and Conditions,
shall render a written opinion to the Company and each of the
Purchasers setting forth the semi-annual equivalent yield to maturity
(expressed as a spread over the applicable U.S. Treasury Yield) that,
in the opinion of the Company's Bank, would be required for such
Tranche of Exchange Debt to be resold at a price equal to par (or, in
the case of Senior Discount Exchange Debt, its accreted value) pursuant
to a Resale Transaction (the "Company Spread"), taking into account all
terms and conditions of such Tranche. All fees and expenses of the
Company's Bank shall be borne by the Company.
(ii) If the Required Vendor Purchasers fail to give
the Company notice of their objection to the Company Spread within five
Business Days after receipt of the opinion of the Company's Bank, then
the Company Spread shall be the Market Spread for purposes of the
applicable Tranche of Exchange Debt.
(iii) If the Required Vendor Purchasers give the
notice described in clause (ii), then the Converting Vendor Purchasers
shall retain an investment bank internationally recognized as active in
underwriting and trading high yield debt securities of Brazilian or
other emerging market issuers, other than the Company's Bank (the
"Purchasers' Bank"), which, within five Business Days after the date of
such notice, shall render a written opinion to the Company and each of
the Vendor Purchasers setting forth the semi-annual equivalent yield to
maturity (expressed as a spread over the applicable U.S. Treasury
Yield) that, in the opinion of the Purchasers' Bank, would be required
for such Tranche of Exchange Debt to be resold at a price equal to par
(or, in the case of
EXCHANGE DEBT AGREEMENT
14
405
Senior Discount Exchange Debt, its accreted value) pursuant to a Resale
Transaction (the "Purchaser Spread"), taking into account all terms and
conditions of such Tranche. All fees and expenses of the Purchasers'
Bank shall be borne by the Vendor Purchasers on a pro rata basis in
accordance with their Commitments and shall not be reimbursable by the
Company.
(iv) If the Purchasers' Bank has rendered an opinion
as described in clause (iii), then the average of the Company Spread
and the Purchaser Spread shall be the Market Spread for purposes of the
applicable Tranche of Exchange Debt.
(c) DISPUTED MARKET TERMS. To the extent the Converting Vendor
Purchasers and the Company cannot agree what is "market" with respect to certain
terms, other than Market Spread (the "Disputed Market Terms"), within ten days
prior to the Conversion Date set forth in the related Notice of Proposed
Conversion to Exchange Debt, then the Required Vendor Purchasers shall provide
to the Company a notice (a "Notice of Disputed Terms and Conditions") which
shall contain the Disputed Market Terms as proposed by the Converting Vendor
Purchasers. Unless, no later than five Business Days after the receipt by the
Company of such Notice of Disputed Terms and Conditions, the Company objects in
writing to any term set forth in such notice, the relevant Tranche of Exchange
Debt (and the related Exchange Debt Documents) shall have the terms and
conditions set forth in such notice, together with all other terms and
conditions that have been mutually agreed. Any such objection shall include a
written opinion of the Company's Bank to the effect that such term as set forth
in such notice is not customary in connection with private placements of high
yield debt securities by Brazilian or other emerging market issuers in the
telecommunications business which opinion shall include a revised term that, in
the opinion of the Company's Bank, is customary in such transactions. Any such
revised term shall be deemed agreed by the Required Vendor Purchasers as
established by the Company's Bank; provided, however, that if the Purchasers'
Bank renders a written opinion to the effect that any such other term as
established by the Company's Bank is not customary in connection with private
placements of high yield debt securities by Brazilian or other emerging market
issuers in the telecommunications business, then (i) to the extent the Disputed
Market Term is a financial term (such as a ratio or basket limit), then the
average of such financial term as proposed by the Company's Bank and such
financial term as proposed by the Purchaser's Bank shall be the term for
purposes of the applicable Tranche of Exchange Debt and (ii) otherwise, or if
the Company and the Converting Vendor Purchasers agree that clause (i) shall not
be applicable, the Company and the Required Vendor Purchasers shall negotiate in
good faith resolve the differences reflected in such opinions and if the Company
and the Converting Vendor Purchasers are not able to resolve the Disputed Market
Terms, the Company's Bank and the Purchaser's Bank shall mutually select a third
bank (the "Outside Bank") which shall, within ten days of its appointment render
a written opinion, taking into consideration the opinions rendered by the
Company's Bank and the Purchaser's Bank, containing the terms relating to the
Disputed Market Terms that such Outside Bank has determined to be customary in
connection with private placements of high yield debt securities by Brazilian or
other emerging market issuers in the telecommunications business, in which case
the Disputed Market Terms shall be as established by such opinion.. All fees and
expenses of the Outside Bank shall be borne by the Company.
EXCHANGE DEBT AGREEMENT
00
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(x) QUALIFYING DEBT OFFERING. If the Company has completed a
Qualifying Debt Offering prior to the date on which a Notice of Negotiation or a
Notice of Proposed Conversion to Exchange Debt is given, the Company may propose
that the terms and conditions of such Qualifying Debt Offering (other than the
Market Spread) serve as a base for the negotiation of the terms and conditions
of the Exchange Debt (and the related Exchange Debt Documents) pursuant to
Section 2.1(a) and this Section 2.3. If the Company provides such a notice, then
the Company (x) may suspend or refuse to begin negotiations under Section 2.1(a)
until the Converting Vendor Purchasers determine whether they will accept the
Company's proposal of terms and conditions and (y) shall immediately provide the
Vendor Purchasers with all documents necessary to evaluate the terms and
conditions of the Qualifying Debt Offering. If the Converting Vendor Purchasers
elect to accept the terms and conditions contained in the Qualifying Debt
Offering, in whole or in part, as the terms and conditions of the Exchange Debt,
then, notwithstanding anything herein to the contrary, the Exchange Debt
Documents shall be prepared on the basis of such accepted terms, provided that
the balance of the terms and conditions of the Exchange Debt Documents shall be
negotiated pursuant to 2.1(a) and this Section 2.3.
(e) REGISTRATION RIGHTS AGREEMENT. On the written opinion of
Purchasers' Bank to the effect that any sale by the Converting Vendor Purchasers
of the Exchange Debt would require either (a) the providing of customary
registration rights to the holders of Exchange Debt or (b) a specified increase
in the rate of interest that such Tranche of Exchange Debt would otherwise bear
(unless the Company agrees to the increase in the interest rate specified in
such opinion), the Company shall enter into a registration rights agreement with
each of the Converting Vendor Purchasers containing the customary terms and
conditions for registration rights agreements entered into in connection with a
private placement of high yield debt securities (the "Registration Rights
Agreement"). To the extent permissible under Applicable Law, such Registration
Rights Agreement shall provide that the Exchange Debt issued thereunder may be
exchanged, pursuant to as exchange offer registered under the Securities Act,
for registered Exchange Debt having identical terms and conditions as the
Exchange Debt except with respect to restrictions on transferability.
SECTION 2.4 CONVERSION DATES; ISSUANCE AND DELIVERY OF EXCHANGE DEBT
AND DELIVERY OF EXCHANGE DEBT DOCUMENTS.
(a) INITIAL CONVERSION; NOTICE OF CONVERSION TO EXCHANGE DEBT;
CONVERSION DATE; DELIVERIES ON THE PRICING DATE.
(i) As soon as practicable after establishment of the
terms of any Tranche of Exchange Debt, including the Market Spread and
the Conversion Portion, pursuant to Sections 2.3 and 2.1, respectively,
the Initiating Vendor Purchaser and the Company shall mutually
determine the Pricing Date and Conversion Date in respect of such
Tranche, which shall be the date set forth in the related Notice of
Proposed Conversion to Exchange Debt or as soon as practicable
thereafter. Each Converting Vendor Purchaser and the Company shall
deliver to the Facility Agent under the respective Note Purchase
Agreement a Notice of Conversion to Exchange Debt, not later
EXCHANGE DEBT AGREEMENT
16
407
than 12:00 noon (New York time) at least three Euro-Dollar Business
Days prior to such Conversion Date, of such Vendor Purchasers'
intention to convert into Initial Exchange Debt Notes held by it under
its respective Note Purchase Agreement in a principal amount equal to
such Vendor Purchaser's Conversion Portion.
(ii) On the Pricing Date, the Company shall execute
and deliver the Exchange Debt Conversion Agreement, together with such
other documents as may be required by such document.
(b) ADDITIONAL CONVERSIONS; NOTICE OF CONVERSION TO EXCHANGE
DEBT; CONVERSION DATE. If any Notes held by the Vendor Purchasers under their
respective Note Purchase Agreements are to be converted and Initial Exchange
Debt is to be issued pursuant to Section 2.2, each Converting Vendor Purchaser
and the Company shall, promptly upon election to convert by such Converting
Vendor Purchaser and satisfaction of all conditions to issuance of the relevant
Exchange Debt, deliver to the Facility Agent under each respective Note Purchase
Agreement a Notice of Conversion to Exchange Debt, not later than 12:00 noon
(New York time) at least three Euro Dollar Business Days prior to the Conversion
Date. The Conversion Date with respect thereto shall be the date on which the
Qualifying Funded Equity required to be contributed to the Company, as described
in Section 2.2, shall have been contributed to the Company, provided, that date
shall be no earlier than three Euro-Dollar Business Days after the date of
Notice of Conversion to Exchange Debt delivered pursuant to this Section 2.4(b).
(c) CONVERSION DATE DELIVERIES AND CONDITIONS; CONVERSION.
(i) On each Conversion Date, with respect to Initial
Exchange Debt issued pursuant to Section 2.1, the Company will (A)
execute and deliver (and cause the Designated Trustee to execute and
deliver) to each of the Vendor Purchasers the Indenture (as defined
below) (or a supplement to the Indenture) with respect to such Tranche
of Exchange Debt; (B) execute and deliver to each of the Vendor
Purchasers, if determined to be required in accordance with the
provisions of Section 2.3(c), the Registration Rights Agreement with
respect to such Tranche of Exchange Debt, (C) cause to be delivered to
each Vendor Purchaser an opinion of counsel to the Company, addressed
to each of the Vendor Purchasers reasonably satisfactory to the Vendor
Purchasers, (D) cause to be delivered to the Vendor Purchasers evidence
that all Governmental Approvals for the execution, delivery and
performance of the Indenture, and the issuance, repayment and payment
of interest (including by issuance of additional Exchange Debt if
applicable) on all Initial Exchange Debt being issued on such
Conversion Date, have been obtained and are in full force and effect
except for (a) a certificate of registration ("Certificate of
Registration") from the Central Bank, to be requested within 30 days
after such Conversion Date, which will enable the Company to make
remittances from Brazil in Dollars of the scheduled principal of, and
interest on, the Exchange Debt, and the fees and expenses that will not
be paid on such Conversion Date and that have been approved pursuant to
the Prior Approval and (b) any further authorization from the Central
Bank, which will enable the Company to make remittances from Brazil in
Dollars to make payments contemplated in the documents
EXCHANGE DEBT AGREEMENT
17
408
relating to the Exchange Debt, including those documents contemplated
in Section 2.4 (a)(ii), not specifically covered by the Certificates of
Registration or to make payments that are specifically covered by the
Certificates of Registration earlier than their respective due dates,
whether upon acceleration, redemption, repurchase or otherwise; and (F)
take such other actions, and deliver such other documents,
certificates, opinions or instruments, as may be required by the
Exchange Debt Documents.
(ii) On each Conversion Date with respect to Initial
Exchange Debt issued pursuant to Section 2.2, the Company will (A)
cause to be delivered to each Vendor Purchaser an opinion of counsel to
the Company, addressed to each of the Vendor Purchasers, in form and
substance reasonably satisfactory to the Vendor Purchasers, (B) cause
to be delivered to the Vendor Purchasers evidence that all Governmental
Approvals for the execution, delivery and performance of the Indenture
(or any supplemental indenture), and the issuance, repayment and
payment of interest (including by issuance of additional Exchange Debt
if applicable) on all Exchange Debt being issued on such Conversion
Date, have been obtained and are in full force and effect and (C) take
such other actions, and deliver such other documents, certificates,
opinions or instruments, as may be required by the Exchange Debt
Documents.
(iii) On each Conversion Date, (A) the Company will
deliver the Initial Exchange Debt to be issued by each Purchaser in the
form of one or more certificates evidencing the Initial Exchange Debt
being issued in a form described in the Exchange Debt Conversion
Agreement; (B) the Facility Agent for each Note Purchase Agreement
shall cause appropriate entries on the register maintained therefor by
each Facility Agent with respect to each Purchaser to reflect the
conversion of the Conversion Portion into Initial Exchange Debt and the
reduction in the principal amount of the Note(s) held by such Vendor
Purchaser under the Note Purchase Agreement by the principal amount of
the Conversion Portion and (C) each Vendor Purchaser will surrender the
Note(s) held by such Vendor Purchaser under the respective Note
Purchase Agreement and the Facility Agent for each Note Purchase
Agreement will issue a new Note in the principal amount of the Note(s)
held by such Vendor Purchaser under the Note Purchase Agreement and the
Conversion Portion; and (iv) the Company will have complied with each
of the covenants set forth in Article V hereof and the Exchange Debt
Documents.
(v) To the extent necessary to be able to convert
into Initial Exchange Debt its pro rata portion of Notes as from time
to time required hereby, each Vendor Purchaser shall purchase Notes
under the respective Note Purchase Agreement that are then not
reflected in the Register as being held by it but are subject to an
Initial Purchaser Guarantee provided by it.
EXCHANGE DEBT AGREEMENT
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(x) DELIVERIES ON THE RESALE DATE; OFFERING MEMORANDA.
(i) If the Required Vendor Purchasers elect to resell
any Exchange Debt at any time, then on the Resale Date the Company
shall execute and deliver the Resale Documents.
(ii) If the Required Vendor Purchasers elect to
resell any Exchange Debt at any time, then not later than seventy-five
days after the Required Vendor Purchasers notify the Company that they
intend to resell any Exchange Debt that is being or has been issued to
them (which notice may be given at any time on or after the date notice
is given by the Initiating Vendor Purchaser pursuant to Section
2.1(d)(iii) that the Required Vendor Purchasers have approved the
issuance of any Exchange Debt), the Company shall deliver to each
Converting Vendor Purchaser, a preliminary confidential offering
memorandum with respect to such Exchange Debt in customary form for a
high yield debt offering by a Brazilian or other emerging market issuer
and reasonably satisfactory as to form and substance to each Converting
Vendor Purchasers (the "Preliminary Offering Memorandum"). Not later
than on the applicable Resale Date the Company shall deliver to each of
the Converting Vendor Purchasers a final confidential offering
memorandum in customary form for a high yield debt offering by a
Brazilian or other emerging market issuer and reasonably satisfactory
as to form and substance to each Converting Vendor Purchasers (the
"Final Offering Memorandum", together with the Preliminary Offering
Memorandum, the "Offering Memoranda")). The Company and the Converting
Vendor Purchasers shall cooperate in good faith in the preparation of
such Offering Memoranda.
(e) Notwithstanding anything contained herein to the contrary,
in addition to the delivery requirements set forth in this Section 2.4, the
Company shall execute and deliver all other documents, certificates, opinions or
instruments as may be required by, and by the dates set forth in, the Exchange
Debt Documents.
(f) GOVERNMENTAL APPROVALS. Promptly after being notified that
the Vendor Purchasers have decided to convert any portion of their Notes into
Exchange Debt, the Company shall use its best efforts to obtain all Governmental
Approvals for the execution, delivery and performance of the Indenture (or any
supplemental indenture), and the issuance, repayment and payment of interest
(including by issuance of Additional Exchange Debt if applicable) on all
Exchange Debt to be issued on the Conversion Date with respect to such Exchange
Debt, and to ensure that all such approvals will be in full force and effect on
such Conversion Date and at all times thereafter.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby repeats herein as of the date hereof and as of each
Conversion Date, and as of each date on which Exchange Debt is issued, all of
the representations and warranties set forth in Section 3 of the Common Terms
Agreement, which representations and warranties are hereby incorporated herein
by reference.
EXCHANGE DEBT AGREEMENT
19
410
ARTICLE IV
COVENANTS & CONDITIONS
SECTION 4.1 COVENANT RELATING TO ISSUANCE OF EXCHANGE DEBT. The Company
agrees, and the Exchange Debt Documents shall provide, in addition to any other
terms and conditions agreed pursuant to Section 2.3, that the Company will take
(i) all actions that may be necessary so that, for as long as the Exchange Debt
is outstanding, the aggregate amount of such Exchange Debt is eligible for
resale under Section (e)(3)(i) of Rule 144 and (ii) commercially reasonable
efforts to ensure that such Exchange Debt is eligible for resale under
Regulation S of the Securities Act of 1933.
SECTION 4.2 CONDITIONS TO ISSUANCE OF EXCHANGE DEBT. The obligation of
the Vendor Purchasers to convert any Notes into Exchange Debt pursuant to
Section 2.1 or 2.2 is or will be conditioned upon customary terms and conditions
to be set forth in the Exchange Debt Conversion Agreement, including the
delivery of the documents referred to in Section 2.4, the accuracy in all
material respects of all representations and warranties set forth this Agreement
and the Exchange Debt Conversion Agreement, and compliance by the Company with
the covenants and other terms of this Agreement and the Exchange Debt Conversion
Agreement. The Company shall use its best efforts to ensure that all conditions
to conversion are satisfied as soon as practicable.
SECTION 4.3 UNDERTAKING TO COOPERATE REGARDING SALE OF EXCHANGE DEBT OR
INCLUDE EXCHANGE DEBT IN OFFERING OF PERMITTED UNSECURED DEBT.
(a) The Company shall cooperate in good faith with the Vendor
Purchasers and any placement agents or underwriters retained by them to effect
the resale of the Exchange Debt and shall take all commercially reasonable
steps, as the Vendor Purchasers may request, to assist in the resale of the
Exchange Debt, which steps shall include conducting roadshows and other related
activities, at the Company's expense.
(b) In case the Company engages in any offering of Excluded
Debt (including Permitted Unsecured Debt), the Company shall use commercially
reasonable efforts to include any then outstanding Exchange Debt in such
offering, including any related roadshow, at the Company's expense.
ARTICLE V
MISCELLANEOUS
SECTION 5.1. EXPENSES.
(a) EXPENSES TO BE BORNE BY THE COMPANY. The Company will pay
all reasonable expenses incidental to the performance of obligations of the
Company under this Agreement, and all expenses incidental to the performance of
the obligations of the Company,
EXCHANGE DEBT AGREEMENT
20
411
any Facility Agent, any trustee and, other than as set forth in subsection (b),
any Purchaser under the Indenture and the Registration Rights Agreement,
including (i) all fees and expenses incurred by the Company and each of the
Vendor Purchasers in connection with negotiating this Agreement, each Indenture
or supplement to the Indenture, each Registration Rights Agreement (if any) and
each Exchange Debt Conversion Agreement or other Exchange Debt Documents,
including the fees and expenses of outside legal counsel and accountants to the
Company and to each of the Vendor Purchasers and other costs and expenses
incurred by the Company and each of the Vendor Purchasers in connection
therewith, (ii) all reasonable expenses incurred in connection with the
preparation of the Offering Memoranda or the execution, issue, packaging and
initial delivery of the Exchange Debt and any Exchange Debt issued pursuant to a
registered exchange offer (the "Registered Exchange Debt"), the preparation and
printing of the certificates representing the Exchange Debt and the Registered
Exchange Debt, any offering document and amendments and supplements thereto, and
any other document relating to the issuance, offer, resale, exchange and
delivery of the Exchange Debt and the Registered Exchange Debt; (iii) the costs
of qualifying the Exchange Debt and the Registered Exchange Debt for trading in
the Private Offerings, Resales and Trading through Automated Linkages ("PORTAL")
Market and any reasonable expenses incidental thereto; (iv) the costs of
obtaining ratings for the Exchange Debt and the Registered Exchange Debt from
such rating agencies as the Required Vendor Purchasers may reasonably request;
(v) the reasonable costs of any advertising approved by the Company in
connection with the issue of the Exchange Debt and the Registered Exchange Debt
or subsequent resales by the Converting Vendor Purchasers of the Exchange Debt;
(vi) any reasonable expenses (including fees and disbursements of outside
counsel) incurred in connection with qualification of the Exchange Debt and the
Registered Exchange Debt for sale under the laws of such jurisdictions in the
United States and Canada as the Vendor Purchasers designate and the preparation
and printing of memoranda relating thereto; (vii) if a Registration Rights
Agreement is entered into, all costs, fees and reasonable expenses related to
the registration of the Exchange Debt under the Securities Act and the Exchange
Act, including all registration fees and the costs of printing and distributing
preliminary and definitive registration statements, and any amendments and
supplements thereto; (viii) the reasonable fees and expenses of the Designated
Trustee (or any successor Designated Trustee) under the Indenture or any
successor indenture and the fees and expenses of the Designated Trustee's (or
such successor Designated Trustee's) legal counsel; (ix) all filing fees with
the SEC in respect of such registrations of the Exchange Debt as may be required
pursuant to the Registration Rights Agreement; (x) the reasonable fees and
expenses of outside counsel for the Company and of its independent public
accountants, including the expenses of any special audits or "cold comfort"
letters, incurred in connection with the Offering Memoranda and, if applicable,
such preliminary and definitive registration statements, and such registrations
of the Exchange Debt and the Registered Exchange Debt, as may be required
pursuant to the Registration Rights Agreement; (xi) the reasonable travel and
other out-of-pocket costs and expenses (including salaries and other
compensation of participating individuals) of making available officers of the
Company to attend and make presentations and answer questions at a meeting or
meetings of prospective investors; (xii) all NASD filing fees incurred in
connection with the offer, exchange, delivery or resale of any of the Exchange
Debt and Registered Exchange Debt; and (xiii) the costs of obtaining such CUSIP
(or equivalent) numbers as may be required for the Exchange Debt and the
Registered Exchange Debt.
EXCHANGE DEBT AGREEMENT
21
412
(b) EXPENSES TO BE BORNE BY THE VENDOR PURCHASERS AND OTHERS.
Notwithstanding the foregoing, the Company shall not be responsible for any (i)
underwriting discounts and commissions, and placement fees payable in connection
with the resale of any of the Exchange Debt held by any Vendor Purchaser; (ii)
the costs and expenses (including attorneys' fees and expenses) of such
underwriters and placement agents as any Vendor Purchaser may engage in
connection with the resale of any of the Exchange Debt held by such Vendor
Purchaser; and (iii) the fees and expenses of the Purchasers' Bank, to the
extent provided herein.
SECTION 5.2. WAIVERS; AMENDMENTS IN WRITING. No amendment of any
provision of this Agreement or any Exchange Debt Document or Exchange Debt
(including a waiver thereof or consent relating thereto) shall be effective
unless the same shall be in writing and signed or consented to by (a) the
Company and (b) (i) in the case of this Agreement, each of the Vendor Purchasers
and (ii) in the case of any Exchange Debt Agreement or Exchange Debt, each of
the Converting Vendor Purchasers.
SECTION 5.3. CUMULATIVE REMEDIES; FAILURE OR DELAY. The rights and
remedies provided for under this Agreement are cumulative and are not exclusive
of any rights and remedies that may be available to the Vendor Purchaser under
Applicable Law or otherwise. No failure or delay on the part of any Vendor
Purchaser in the exercise of any power, right or remedy under this Agreement
shall impair such power, right or remedy or operate as a waiver thereof, nor
shall any single or partial exercise of any such power, right or remedy preclude
other or further exercise thereof or of any other power, right or remedy.
SECTION 5.4. NOTICES, ETC. All notices and other communications under
this Agreement shall be in writing and (except for informational documents and
routine communications, which may be sent by first-class mail, postage prepaid)
shall be Personally delivered or sent by prepaid courier, by overnight,
registered or certified mail (postage prepaid), or by facsimile, and shall be
deemed given when received by the intended recipient thereof. Unless otherwise
specified in a notice sent or delivered in accordance with this Section 5.4, all
notices and other communications shall be given to the parties hereto at their
respective addresses (or to their respective facsimile numbers) indicated in
Schedule 1.1(a) to the Common Terms Agreement (in the case of the Facility
Agents) or Schedule 9.5 (in the case of the Company).
SECTION 5.5 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. The Company may not assign or transfer any
interest hereunder without the prior written consent of each Purchaser Party.
SECTION 5.6. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (OTHER THAN
CHOICE OF LAW RULES THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANY OTHER
JURISDICTION).
EXCHANGE DEBT AGREEMENT
22
413
SECTION 5.7. CHOICE OF FORUM.
(a) CHOICE OF FORUM; SUBMISSION TO JURISDICTION. Pursuant to
Section 5-1402 of the New York General Obligations Law, all actions or
proceedings arising in connection with this Agreement may be tried and litigated
in, and the Company hereby consents to the nonexclusive jurisdiction of, state
or Federal courts located in the Borough of Manhattan, New York City, State of
New York, unless such actions or proceedings are required to be brought in
another court to obtain subject matter jurisdiction over the matter in
controversy. THE COMPANY WAIVES ANY RIGHT IT MAY HAVE TO ASSERT THE DOCTRINE OF
FORUM NON CONVENIENS, TO ASSERT THAT IT IS NOT SUBJECT TO THE JURISDICTION OF
SUCH COURTS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN
ACCORDANCE WITH THIS SECTION.
(b) APPOINTMENT OF AGENT. The Company hereby irrevocably
appoints CT Corporation Systems (the "Process Agent," which has consented
thereto) with offices on the date hereof at 000 0xx Xxxxxx , Xxx Xxxx, Xxx Xxxx
00000, as Process Agent to receive for and on behalf of the Company service of
process in the County of New York relating to this Agreement. SERVICE OF PROCESS
IN ANY ACTION OR PROCEEDING AGAINST the Company MAY BE MADE ON THE PROCESS AGENT
BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY ANY OTHER
METHOD OF SERVICE PROVIDED FOR UNDER APPLICABLE LAWS IN EFFECT IN THE STATE OF
NEW YORK, AND THE PROCESS AGENT IS HEREBY AUTHORIZED AND DIRECTED TO ACCEPT SUCH
SERVICE FOR AND ON BEHALF OF THE COMPANY AND TO ADMIT SERVICE WITH RESPECT
THERETO. SUCH SERVICE UPON THE PROCESS AGENT SHALL BE DEEMED EFFECTIVE PERSONAL
SERVICE ON the Company, SUFFICIENT FOR PERSONAL JURISDICTION, 10 DAYS AFTER
MAILING, AND SHALL BE LEGAL AND BINDING UPON THE COMPANY FOR ALL PURPOSES,
NOTWITHSTANDING ANY FAILURE OF THE PROCESS AGENT TO MAIL COPIES OF SUCH LEGAL
PROCESS TO THE COMPANY, OR ANY FAILURE ON THE PART OF THE COMPANY TO RECEIVE THE
SAME. The Company confirms that it has instructed the Process Agent to mail to
the Company, upon service of process being made on the Process Agent pursuant to
this Section, a copy of the summons and complaint or other legal process served
upon it, by registered mail, return receipt requested, at the Company's address
set forth in Schedule 9.5 of the Common Terms Agreement, or to such other
address as the Company may notify the Process Agent in writing. The Company
agrees that it will at all times maintain a Process Agent to receive service of
process in the County of New York on its behalf with respect to this Agreement.
If for any reason the Process Agent or any successor thereto shall no longer
serve as such Process Agent or shall have changed its address without
notification thereof to the Purchaser Parties, the Company, immediately after
gaining knowledge thereof, irrevocably shall appoint a substitute Process Agent
acceptable to the Facility Agents in the County of New York and advise the
Facility Agents thereof.
(c) FORUM SELECTION NOT EXCLUSIVE. Nothing contained in this
Section shall preclude the Purchaser Parties from bringing any action or
proceeding arising out of or relating to this Agreement, the Indenture or any
other agreement or instrument related to the Exchange Debt in the courts of any
place where the Company or any of its assets may be found or located.
EXCHANGE DEBT AGREEMENT
23
414
SECTION 5.8. CURRENCY EQUIVALENTS; JUDGMENT CURRENCY.
(a) CURRENCY EQUIVALENTS. If for the purposes of obtaining
judgment in any court it is necessary to convert a sum due hereunder, under the
Indenture or under any other agreement or instrument related to the Exchange
Debt in Dollars into another currency, the parties hereto agree, to the fullest
extent that they may effectively do so, that the rate of exchange used shall be
that at which in accordance with normal banking procedures the Facility Agents
could purchase Dollars with such other currency at the close of business in New
York City on the Business Day preceding that on which final judgment is given.
(b) JUDGMENT CURRENCY. The obligation of the Company in
respect of any sum due from it to any Purchaser Party hereunder, under the
Indenture or under any other agreement or instrument related to the Exchange
Debt shall, notwithstanding any judgment in a currency other than Dollars, be
discharged only to the extent that on the Business Day following receipt by such
Purchaser Party of any sum adjudged to be so due in such other currency such
Purchaser Party may in accordance with normal banking procedures purchase
Dollars with such other currency; if the Dollars so purchased are less than the
sum originally due to such Purchaser Party in Dollars, the Company agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify such
Purchaser Party against such loss, and if the Dollars so purchased exceed the
sum originally due to any such Purchaser Party, such Purchaser Party agrees to
remit to the Company such excess.
SECTION 5.9. HEADINGS. The Article and Section headings used in this
Agreement are for convenience of reference only and shall not affect the
construction hereof.
SECTION 5.10. SEVERABILITY. If any provision of this Agreement shall be
held to be invalid, illegal or unenforceable under Applicable Law in any
jurisdiction, such provision shall be ineffective only to the extent of such
invalidity, illegality or unenforceability, which shall not affect any other
provisions hereof or the validity, legality or enforceability of such provision
in any other jurisdiction.
SECTION 5.11. SURVIVAL OF AGREEMENTS, REPRESENTATIONS AND WARRANTIES.
All agreements, representations and warranties made herein shall survive the
execution and delivery of this Agreement, the Conversion Dates, and, unless no
Exchange Debt is outstanding on such date, December 31, 2002, and shall continue
until payment and performance of any and all Obligations. Any investigation at
any time made by or on behalf of the Purchaser Parties shall not diminish the
right of the Purchaser Parties to rely thereon. Without limitation, the
agreements and obligations of the Company contained in Section 5.1 shall survive
the payment in full of all other Obligations.
SECTION 5.12. EXECUTION IN COUNTERPARTS.
(a) This Agreement may be executed in any number of
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same Agreement. This Agreement shall become effective
upon the execution of a counterpart hereof by each of the
EXCHANGE DEBT AGREEMENT
24
415
parties hereto. Faxed signatures to this Agreement shall be binding to the
extent set forth in clause (b).
(b) This Agreement shall be effective immediately upon its
execution by all parties hereto, provided that, on the Closing Date, each party
hereto shall deliver originally executed signature pages that, if executed in
Brazil, have been witnessed by two witnesses or, if executed outside of Brazil,
have been notarized by a notary public licensed as such under the laws of the
place of signing.
SECTION 5.13. COMPLETE AGREEMENT; THIRD PARTY BENEFICIARIES. This
Agreement, together with the other Note Documents, is intended by the parties as
the final expression of their agreement regarding the subject matter hereof and
as a complete and exclusive statement of the terms and conditions of such
agreement. There are no third party beneficiaries of this Agreement.
SECTION 5.14. NO FIDUCIARY DUTIES OR PARTNERSHIP; LIMITATION OF
LIABILITY, ETC.
(a) DEBTOR AND CREDITOR RELATIONSHIP. The relationship between
the Company Parties and each Purchaser Party is solely that of debtor and
creditor, and neither any Facility Agent nor any other Purchaser Party has any
fiduciary or other special relationship with any Company Party, and no term or
condition of any of the Note Documents shall be construed so as to deem the
relationship between any Company Party and any Purchaser Party to be other than
that of debtor and creditor. No joint venture or partnership is created by this
Agreement or any other Note Document among any Purchaser Parties or among any
Company Party and any Purchaser Party.
(b) LIMITATION OF LIABILITY. No claim shall be made by any
Company Party against any Purchaser Party or the Affiliates, directors,
officers, employees or agents of any Purchaser Party for any special, indirect,
consequential or punitive damages in respect of any claim for breach of contract
or under any other theory of liability arising out of or related to the
transactions contemplated by this Agreement, or any act, omission or event
occurring in connection therewith; and the Company, on behalf of itself and the
other Company Parties, waives, releases and agrees not to xxx upon any claim for
any such damages, whether or not accrued and whether or not known or suspected
to exist in its favor.
(c) NO OTHER DUTIES. All attorneys, accountants, appraisers
and other professional Persons and consultants retained by the Purchaser Parties
shall have the right to act exclusively in the interest of the Purchaser Parties
and shall have no duty of disclosure, duty of loyalty, duty of care or other
duty or obligation of any type or nature whatsoever to any of the Company
Parties or any of their respective holders of Capital Stock, Affiliates or any
other Person except as required by or arising under any Applicable Law.
SECTION 5.15. WAIVER OF IMMUNITY. To the extent that a Company Party
has or hereafter may be entitled to claim or may acquire, for itself or any of
its assets, any immunity from suit, jurisdiction of any court or from any legal
process (whether through service or notice, attachment prior to judgment,
attachment in aid of execution, or otherwise) with respect to itself
EXCHANGE DEBT AGREEMENT
25
416
or its property, it hereby irrevocably waives such immunity in respect of its
obligations hereunder and under the Note Purchase Agreements to the extent
permitted by Applicable Law and without limiting the generality of the
foregoing, agrees that the waivers set forth in this Section shall be effective
to the fullest extent now or hereafter permitted under the Foreign Sovereign
Immunities Act of 1976 of the United States of America and are intended to be
irrevocable for purposes of such Act.
SECTION 5.16. ENGLISH LANGUAGE. Any translation of this Agreement, the
Indenture or any other agreement or instrument related to the Exchange Debt into
another language shall have no interpretive effect. All documents or notices to
be delivered pursuant to or in connection with this Agreement, the Indenture and
any other agreement or instrument related to the Exchange Debt shall be in the
English language, or, if any such document or notice is not in the English
language, accompanied by an English translation thereof, and the English
language version of any such document or notice shall control for purposes
hereof.
(Space intentionally left blank.)
EXCHANGE DEBT AGREEMENT
26
417
SECTION 5.17. WAIVER OF TRIAL BY JURY. THE COMPANY AND THE VENDOR
PURCHASERS WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY ACTION UNDER THIS
AGREEMENT, THE INDENTURE OR ANY OTHER AGREEMENT OR INSTRUMENT RELATED TO THE
EXCHANGE DEBT OR ANY ACTION ARISING OUT OF THE TRANSACTIONS CONTEMPLATED HEREBY,
REGARDLESS OF WHICH PARTY INITIATES SUCH ACTION OR ACTIONS.
IN WITNESS WHEREOF, the parties hereto have caused this Exchange Debt Agreement
to be executed and delivered as of the date first set forth above.
THE COMPANY:
XXXXXX X.X, a sociedade anomina organized
under the laws of Brazil
BY:
--------------------------------------
NAME:
------------------------------------
TITLE:
-----------------------------------
BY:
--------------------------------------
NAME:
------------------------------------
TITLE:
-----------------------------------
EXCHANGE DEBT AGREEMENT
27
418
NORTEL:
NORTEL NETWORKS CORPORATION, a
Canadian corporation
BY:
--------------------------------------
NAME:
------------------------------------
TITLE:
-----------------------------------
BY:
--------------------------------------
NAME:
------------------------------------
TITLE:
-----------------------------------
QUALCOMM:
XXXXXXXX XXXXXXXXXXXX, a Delaware
corporation
BY:
--------------------------------------
NAME:
------------------------------------
TITLE:
-----------------------------------
XXXXXX:
XXXXXX CORPORATION, a Delaware
corporation
BY:
--------------------------------------
NAME:
------------------------------------
TITLE:
-----------------------------------
EXCHANGE DEBT AGREEMENT
28
419
ERICSSON
TELEFONAKTIEBOLAGET LM ERICSSON
(PUBL.), a Swedish company
BY:
--------------------------------------
NAME:
------------------------------------
TITLE:
-----------------------------------
EXCHANGE DEBT AGREEMENT
29
420
EXHIBIT A
NOTICE OF CONVERSION TO EXCHANGE DEBT
TO: [APPLICABLE FACILITY AGENT]
DATE:
IN ACCORDANCE WITH [SECTION 2.4(A)] OR [SECTION 2.4(B)] OF THE EXCHANGE DEBT
AGREEMENT AND SECTION 2.7 OF THE [APPLICABLE NOTE PURCHASE AGREEMENT], THIS
DOCUMENT SHALL SERVE AS NOTICE THAT [VENDOR PURCHASER] INTENDS TO CONVERT INTO
EXCHANGE DEBT, $[CONVERSION PORTION] OF PRINCIPAL AMOUNT OF NOTES HELD BY IT
UNDER THE [APPLICABLE NOTE PURCHASE AGREEMENT] ON [CONVERSION DATE - NOT TO BE
LESS THAN THREE EURO-DOLLAR BUSINESS DATES AFTER THE DATE OF THIS NOTICE].
[VENDOR PURCHASER]
BY:
-------------------------------
NAME:
TITLE:
XXXXXX X.X.
BY:
-------------------------------
NAME:
TITLE:
BY:
-------------------------------
NAME:
TITLE:
EXCHANGE DEBT AGREEMENT
30
421
EXHIBIT B
NOTICE OF PROPOSED CONVERSION TO EXCHANGE DEBT
TO: [VENDOR PURCHASERS OTHER THAN INITIATING VENDOR PURCHASER]
[COMPANY, IF NO NEGOTIATIONS HAVE COMMENCED UNDER SECTION 2.1(A) OF THE
EXCHANGE DEBT AGREEMENT]
DATE:
THIS NOTICE IS BEING DELIVERED IN ACCORDANCE WITH SECTION 2.1(B) OF THE EXCHANGE
DEBT AGREEMENT.
(i) A NON-RECOURSE ASSIGNMENT IS BEING CONSIDERED BY [INITIATING VENDOR
PURCHASER].
(ii) THE PROPOSED CONVERSION DATE IS ___________.
(iii) THE PROPOSED TARGET RATIO IS ______________.
(iv) THE FINAL MATURITY DATE OF THE TRANCHE OF EXCHANGE DEBT TO BE ISSUED IS
____________.
(v) THE TRANCHE OF EXCHANGE DEBT WILL BE [SENIOR DISCOUNT EXCHANGE DEBT] OR
[SUBORDINATED EXCHANGE DEBT].
[IF THE FINAL MATURITY OF THE TRANCHE OF DEBT IS A DATE AFTER THE DATE THAT IS
ONE YEAR AFTER THE LATEST FINAL MATURITY DATE:
(vi) FOLLOWING ARE THE TERMS OF OPTIONAL REDEMPTION OF THE TRANCHE OF EXCHANGE
DEBT: [SPECIFY, WITH REDEMPTION PRICES BEING SPECIFIED BY REFERENCE TO MARKET
SPREAD.]
[IF NEGOTIATIONS WITH COMPANY HAVE NOT BEEN COMMENCED UNDER SECTION 2.1(A) OF
THE EXCHANGE DEBT AGREEMENT:
THIS NOTICE CONSTITUTES A NOTICE OF NEGOTIATION UNDER SECTION 2.1(A) OF THE
EXCHANGE DEBT AGREEMENT.]
[INITIATING VENDOR PURCHASER]
BY:
-------------------------------
NAME:
TITLE:
EXCHANGE DEBT AGREEMENT
31
422
SCHEDULE 1.1(a)
AGENTS' INFORMATION
COLLATERAL AGENT'S OFFICE
LaSalle Bank National Association
000 X. XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Phone: (000) 000-0000
Attention: Xxxxx X. Xxxx
COLLATERAL AGENT'S ACCOUNT (for funding of Mandatory Prepayments and other
payments by the Paying Agent or any Company Party):
LaSalle Bank N.A.
Chicago, IL
ABA No.: [***]
Credit: Vesper Collateral Agent Acct [***]
Account No.: [***]
Attn: Xxxxx Xxxx, ext. 47807
PAYING AGENT'S XXXXXX
Xxxxx Xxxxx Xxxx
Xxxxxxx Xxxx Xxxxxxxx, 00xx Xxxxx
0-00 Xxxxxxx 0-xxxxx
Xxxxxx-xx, Xxxxx 000 Xxxxx
Fax: 000-000-000-0000/8178
Phone: 000-000 000-0000
Attention: Xxxxxxx Xxxxx
Ref: Xxxxxx X.X.
PAYING AGENT'S ACCOUNT (for funding of Mandatory Prepayments by the Company):
Account No. [***]
The Chase Manhattan Bank
ABA No.: [***]
[*] 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.
Common Terms Agreement
1
423
PARI PASSU FACILITY AGENTS:
PARI PASSU FACILITY AGENT ADDRESS Account
------------------------------------- -------------------------------------- ---------------------------------------
Nortel Facility Agent ABN AMRO Bank N.V. Account Name: Syndications Suspense
Agency Services Account
0000 Xxxxxx xx xxx Xxxxxxxx, 0xx Xxxxx Account No.: [***]
Xxx Xxxx, Xxx Xxxx 00000 ABN AMRO Bank, NY
Fax: 000-000-0000 ABA No.: [***]
Phone: 000-000-0000 Ref: For Nortel NPA: Nortel-Vesper
Attention: Xxxxx Xxxxxxxx (Brazil)
Qualcomm/Ericsson Facility Agent ABN AMRO Bank N.V. Account Name: Syndications Suspense
Agency Services Account
1325 Avenue of the Americas, 9th Account No.: [***]
Floor ABN AMRO Bank, NY
Xxx Xxxx, Xxx Xxxx 00000 ABA No.: [***]
Fax: 000-000-0000 Ref: For Qualcomm/Ericsson NPA:
Phone: 000-000-0000 Qualcomm/Ericsson-Vesper (Brazil)
Attention: Xxxxx Xxxxxxxx
Xxxxxx Facility Agent Xxxxxx Corporation Account No.: [***]
c/x Xxxxxx do Brasil Chase New York
Xxxxxxx xx Xxxxxxxx, 000 - Xxxxxxxxxx XXX No.: {***]
06465-100 - Barueri - SP (Brasil) Ref: Xxxxxx Corporation
Telephone: 00 00 0000-0000
Fax: 00 00 0000-0000
Attention: Xxxxxxx Xxxxxxxx
Sales Finance Manager
[*] 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.
Common Terms Agreement
2
424
SCHEDULE 1.1(b)
EXISTING DEBT
1. Capitalized Leases pursuant to that certain Leasing Agreement with IBM
Brasil Leasing Arrendamento Mercantil S.A. in the total amount of $1,800,000.
2. Debt incurred pursuant to that certain loan facility agreement between
the Company and Nortel dated as of October 25, 1999.
3. Debt incurred pursuant to that certain loan facility agreement between
the Company and Ericsson Telecomunicacoes S.A. dated as of a date prior to the
Closing Date.
Common Terms Agreement
1
425
SCHEDULE 1.1(c)
EXISTING LIENS
Liens related to the Capitalized Leases set forth on Schedule 1.1(b).
Common Terms Agreement
1
426
SCHEDULE 1.1(d)
ACCEPTABLE BRAZILIAN DEPOSITORY INSTITUTIONS
Credit Commerciale de France SA
Fleet Boston Corporation
Banco BBA-Creditanstalt S.A.
Banco Bradesco S.A.
Citibank, N.A.
CS First Boston Garantia
Banco Itau S.A.
Banco Safra S.A.
Uniao de Bancos Brasileiros S.A.
Banco Real
ABN AMRO Bank N.V.
Common Terms Agreement
427
SCHEDULE 1.1(e)
PERMITTED TRANSFEREES
[***]
[*] 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.
Common Terms Agreement
428
SCHEDULE 2.1
CLOSING DOCUMENTS
MAJOR NOTE DOCUMENTS.
The following, in each case duly executed by all parties, and notarized or
witnessed, as appropriate:
1. Nortel Note Purchase Agreement, substantially in the form of Exhibit A-1 to
the Common Terms Agreement
Schedule 1.1(a) - Commitments
Schedule 1.1(b) - Purchaser Information
Exhibit A - Form of Note
Exhibit B-1 - Form of Notice of Issuance
Exhibit B-2 - Form of Notice of Responsible Officer
Exhibit C - Form of Proceeds Account Pledge Agreement
Exhibit D - Form of Notice of Continuation/Conversion
Exhibit E - Form of Commitment Increase Agreement
Exhibit F - Form of Cancellation Certificate
Exhibit G-1 - Form of Non-Recourse Assignment and Acceptance
Exhibit G-2 - Form of Recourse Assignment and Acceptance
2. Qualcomm/Ericsson Note Purchase Agreement, substantially in the form of
Exhibit A-2 to the Common Terms Agreement
Schedule 1.1(a) - Commitments
Schedule 1.1(b) - Purchaser Information
Exhibit A - Form of Note
Exhibit B-1 - Form of Notice of Issuance
Exhibit B-2 - Form of Notice of Responsible Officer
Common Terms Agreement
1
429
Exhibit C - Form of Proceeds Account Pledge Agreement
Exhibit D - Form of Notice of Continuation/Conversion
Exhibit E - Form of Commitment Increase Agreement
Exhibit F - Form of Cancellation Certificate
Exhibit G-1 - Form of Non-Recourse Assignment and Acceptance
Exhibit G-2 - Form of Recourse Assignment and Acceptance
3. Xxxxxx Note Purchase Agreement, substantially in the form of Exhibit A-3 to
the Common Terms Agreement
Schedule 1.1(a) - Commitments
Schedule 1.1(b) - Purchaser Information
Exhibit A - Form of Note
Exhibit B-1 - Form of Notice of Issuance
Exhibit B-2 - Form of Notice of Responsible Officer
Exhibit C - Form of Proceeds Account Pledge Agreement
Exhibit D - Form of Notice of Continuation/Conversion
Exhibit E - Form of Commitment Increase Agreement
Exhibit F - Form of Cancellation Certificate
Exhibit G-1 - Form of Non-Recourse Assignment and Acceptance
4. Capital Contribution Agreement and related documents
Schedule 1 - Ownership Percentage of HoldCo
Schedule 2 - Account and Address Information
Exhibit A - Form of Contribution Certificate
Exhibit B - Form of Support Obligation
Common Terms Agreement
2
430
5. Support Obligations executed by the Collateral Agent and each of the Parent
Shareholders:
PARENT SHAREHOLDER
BCI
VeloCom
Qualcomm
6. Global Note under Nortel Note Purchase Agreement
7. Notes under Qualcomm/Ericsson Note Purchase Agreement
8. Common Terms Agreement
Schedule 1.1(a) - Agents' Information
Schedule 1.1(b) - Existing Debt
Schedule 1.1(c) - Existing Liens
Schedule 1.1(d) - Acceptable Brazilian Depository Institutions
Schedule 1.1(e) - Permitted Transferees
Schedule 2.1 - Closing Documents
Schedule 2.3 - Post-Closing Matters
Schedule 3.1(a) - Organization of the Borrower Parties
Schedule 3.5(b) - Capitalization Subsidiaries, HoldCo
Schedule 3.8 - Material Litigation
Schedule 3.16 - Environmental Condition
Schedule 3.17 - Affiliate Agreements
Schedule 3.23 - Certain Restrictions
Schedule 3.26 - Permits
Schedule 4.1(d) - Operating Reports
Common Terms Agreement
3
431
Schedule 5 - Financial and Operating Covenants
Schedule 10.4. - Company Information
Exhibit A-1 - Form of Nortel Note Purchase Agreement
Exhibit A-2 - Form of Qualcomm/Ericsson Note Purchase Agreement
Exhibit A-3 - Form of Xxxxxx Note Purchase Agreement
Exhibit B - Form of HoldCo Guaranty
Exhibit C-1A - Form of Company Equipment Pledge Agreement
Exhibit C-1B - Form of Company Receivables Pledge Agreement
Exhibit C-1C - Form of Company Contracts Pledge Agreement
Exhibit C-1D - Form of Cash Collateral Pledge Agreement
Exhibit C-1E - Form of Mortgage
Exhibit C-2 - Form of HoldCo Stock Pledge Agreement
Exhibit C-3A - Form of Shareholder Pledge Agreement
Exhibit C-3B - Form of Brazilian Shareholder Pledge Agreement
Exhibit C-4 - Form of Consent and Waiver
Exhibit C-5 - Form of Consent to Assignment
Exhibit D - Form of Accession Agreement
Exhibit E - Form of Intercompany Debt Subordination Agreement
Exhibit F-1 - Form of Secretary's Certificate
Exhibit F-2 - Form of Officers' Certificate
Exhibit F-3 - Form of Compliance Certificate
Exhibit F-4 - Form of Solvency Certificate
Exhibit G-1 - Form of Legal Opinion of Company Parties' US Counsel
Common Terms Agreement
4
432
Exhibit G-2 - Form of Legal Opinion of Company Parties' Local Counsel
(for Company Parties not formed under the laws of Brazil or the
United States)
Exhibit G-3 - Form of Legal Opinion of Company Parties' Brazilian
Counsel
Exhibit G-4 - Form of Legal Opinion of California/Colorado Local
Counsel
Exhibit H - Form of Exchange Debt Agreement
9. Exchange Debt Agreement
MATERIAL CONTRACTS.
Copies of each of the following, including all amendments through the
Closing Date, duly executed by all parties thereto and certified as true,
correct and complete copies by a Senior Officer of the Company:
10. BCI Technical Services Agreement
11. Know-How Agreement
12. Secondment Agreement
13. Shareholder Agreement, including all exhibits and annexes thereto, and
including the Shareholder Consent and Agreement
Exhibit A - Articles of Association of the Company
Exhibit B - Operating Company Articles of Association
Exhibit C - Cross Option Agreements
Exhibit D - Agreement (Memorandum de Entendimento) between Taquari
Participacoes S.A. and SLI Wireless S.A.
Annex I - Initial Business Plan
Annex II - Technical Services Agreement Term Sheet
Annex III - Nortel and Qualcomm Vendor Finance Facilities Terms and
Conditions
Annex IV - Out of Pocket Expense
14. Interconnection Agreements, including with Empresa Brasileira de
Telecomunicacoes S.A., Telemar S.A. and Intelig Telecomunicacoes Ltda.
Common Terms Agreement
5
433
15. Leased Line Agreements, including with MetroRED Telecomunicacoes Ltda.,
Empresa Brasileira de Telecomunicacoes S.A., and Engeredes-Engenharia de
Redes S.A.
16. Evidence of Execution of Xxxxxx Supply Agreement
17. Amendments extending the term of the Technical Services Agreements, the
Know-How Agreement, and the Secondment Agreement, at the option of the
Company, to a date at least 180 days after the Initial Repurchase Date
18. CGI Agreement
19. Motorola Supply Agreement
20. Any other Material Contracts
GUARANTIES AND COLLATERAL DOCUMENTS.
Each of the following, duly executed by all parties thereto and together
with a translation into Portuguese and evidence of the completion of all
filings and registrations required in order for such documents to create a
valid and first priority Lien in the Collateral subject thereto, including
those listed below:
21. Company Equipment Pledge Agreement
Exhibit 1 - List of Equipment
Exhibit 2 - List of Inventory
Exhibit 3 - List of Insurance Rights
Exhibit 4 - Form of Power of Attorney
Exhibit 5 - Form of Amendment to Company Equipment Pledge Agreement
Evidence of Registration of Company Equipment Pledge Agreement
22. Power of Attorney with respect to Company Equipment Pledge Agreement
23. Company Receivables Pledge Agreement
Exhibit 1 - List of Receivables
Exhibit 2 - List of Banks and Collection Accounts
Exhibit 3 - Form of Power of Attorney
Common Terms Agreement
6
434
Exhibit 4 - Form of Deposit Account Agreement
Exhibit 5 - Form of Amendment to Company Receivables Pledge Agreement
Evidence of Registration of Company Receivables Pledge Agreement
24. Deposit Account Agreement in respect of each deposit account maintained by
the Company or any Subsidiary on the Closing Date
25. Power of Attorney with respect to Company Receivables Pledge Agreement
26. Company Contracts Pledge Agreement
Exhibit 1 - List of Intellectual Property
Exhibit 2 - List of Intercompany Debt
Exhibit 3 - List of Material Contracts
Exhibit 4 - List of Authorizations
Exhibit 5 - List of Intangibles
Exhibit 6 - Form of Power of Attorney
Exhibit 7 - Form of Amendment to Company Contracts Pledge Agreement
Evidence of Registration of Company Contracts Pledge Agreement
27. Power of Attorney with respect to Company Contracts Pledge Agreement
28. Registration of pledge on the Intellectual Property with the National
Institute of Industrial Property
29. Cash Collateral Pledge Agreement (if the Company or any Subsidiary has Cash
Equivalents as of the Closing Date in excess of $25,000,000 that are not
held in the Proceeds Accounts)
Exhibit 1 - List of Special Purpose Accounts and Depositaries
Exhibit 2 - List of Excess Cash Equivalents Accounts and Depositaries
Exhibit 3 - List of Pledged Assets
Exhibit 4 - Form of Deposit Account Agreement
Common Terms Agreement
7
435
Exhibit 5 - Form of Amendment to Cash Collateral Account and Cash
Equivalents Pledge Agreement
Exhibit 6 - Form of Power of Attorney
Evidence of Registration of Cash Collateral Pledge Agreement
30. Deposit Account Agreement(s) with respect to the Cash Collateral Pledge
Agreement (if the Company or any Subsidiary has Cash Equivalents as of the
Closing Date that are not held in the Proceeds Accounts)
31. Power of Attorney with respect to Cash Collateral Pledge Agreement (if the
Company or any Subsidiary has Cash Equivalents as of the Closing Date that
are not held in the Proceeds Accounts)
32. HoldCo Stock Pledge Agreement
Schedule A - Description of Pledged Shares
Exhibit 1 - Form of Power of Attorney
Copies of the Share Registry book showing registration of the HoldCo
pledge
Evidence of Registration of HoldCo Stock Pledge Agreement
33. Power of Attorney with respect to HoldCo Stock Pledge Agreement
34. HoldCo Guaranty
35. Proceeds Account Pledge Agreement (or such other type of Pledge Agreement
as is applicable to the securities held in the Proceeds Account) with
respect to the Nortel Note Purchase Agreement
Exhibit 1 - List of Investments (or List of Securities, as applicable)
Exhibit 2 - Form of Power of Attorney
Exhibit 3 - Form of Amendment to Proceeds Account Pledge Agreement
Evidence of Registration of Proceeds Account Pledge Agreement
36. Power of Attorney with respect to the Nortel Note Purchase Agreement
Proceeds Account Pledge Agreement
Common Terms Agreement
8
436
37. Proceeds Account Pledge Agreement (such other type of Pledge Agreement as
is applicable to the securities held in the Proceeds Account) with respect
to the Qualcomm/Ericsson Note Purchase Agreement
Exhibit 1 - List of Investments (or List of Securities, as applicable)
Exhibit 2 - Form of Power of Attorney
Exhibit 3 - Form of Amendment to Proceeds Account Pledge Agreement
Evidence of Registration of Proceeds Account Pledge Agreement
38. Power of Attorney with respect to the Qualcomm/Ericsson Note Purchase
Agreement Proceeds Account Pledge Agreement
OTHER COLLATERAL DOCUMENTS, ETC.
The following, in each case duly executed by all parties, as appropriate:
39. Copies of Insurance policies, loss payable endorsements, insurance
certificates, and other documents as are reasonably required by the
Collateral Agent evidencing the existence of all Insurance required by
Section 4.6 or the Collateral Documents
40. List of all site leases signed after November 4, 1999 that do not contain
Consent and Waiver, certified by a Senior Officer of the Company
41. Consent to Assignment, substantially in the form of Exhibit C-5 with such
modifications thereto as are reasonably required by the Initial Purchasers,
relating to each of the following Material Contracts, as in effect on the
Closing Date:
Interconnection Agreements, including with Empresa Brasileira de
Telecomunicacoes S.A., Telemar S.A. and Intelig Telecomunicacoes
Ltda.
Nortel Supply Agreement
Ericsson Supply Agreement
BCI Technical Services Agreement
Know-How Agreement
Secondment Agreement
Performance bonds under the Supply Agreements and any other Material
Contracts requiring same, including the following:
Common Terms Agreement
9
437
Nortel Supply Agreement
Ericsson Supply Agreement
42. Shareholder Pledge Agreement, together with such additional filings,
registrations and similar actions as are reasonably required by the
Collateral Agent:
SHAREHOLDER
BCI
VeloCom
Qualcomm
Xxxx Canada International (Brazil Telecom I) Limited
VeloCom Cayman Brasil Holdings
Qualcomm do Brasil Ltda.
HoldCo
43. Brazilian Shareholder Pledge Agreement, together with such additional
filings, registrations and similar actions as are reasonably required by
the Collateral Agent:
SHAREHOLDER
Qualcomm do Brasil Ltda.
HoldCo
Evidence of Registration of Brazilian Shareholder Pledge Agreement
44. Mortgage, together with other documents and other required filings to
perfect security interests, for (i) any switch site, call center, data
center or billing center or (ii) such of the other Real Property listed
below or acquired or leased by the Company or any Subsidiary prior to the
Closing Date (other than cell site leases) having a book or Fair Market
Value in excess of $100,000:
PROPERTY
Xxx Xxxxxxx Xxxxxxxx Xxxxxxxxxxx, Xxxxx, Xxx xx Xxxxxxx
Xxxxxxx 00 de Novembro, 117, Belem, Para
Evidence of recordation of each Mortgage
Common Terms Agreement
10
438
45. All notices, consents, waivers, estoppel certificates and other documents
relating to the Collateral or the Collateral Documents that the Collateral
Agent or Proceeds Collateral Agent, as the case may be, may request
MISCELLANEOUS NOTE DOCUMENTS.
The following, in each case duly executed by all parties, and notarized or
witnessed, as appropriate:
46. Administrative Agent's Letter under each of the Note Purchase Agreements
Nortel Note Purchase Agreement
Qualcomm/Ericsson Note Purchase Agreement
Xxxxxx Note Purchase Agreement
47. Purchasers' Fee Letter under each of the Note Purchase Agreements
Nortel Note Purchase Agreement
Qualcomm/Ericsson Note Purchase Agreement
Xxxxxx Note Purchase Agreement
48. Collateral Agent's Letter under the Common Terms Agreements
49. Proceeds Collateral Agent's Letters under each of the Note Purchase
Agreements
Nortel Note Purchase Agreement
Qualcomm/Ericsson Note Purchase Agreement
50. Paying Agency Agreement
51. Notice of Issuance under each of the Note Purchase Agreements with respect
to Notes to be issued on the Closing Date
Nortel Note Purchase Agreement
Qualcomm/Ericsson Note Purchase Agreement
DOCUMENTS RELATING TO THE RECOURSE ASSIGNMENT OF THE NORTEL NOTE PURCHASE
AGREEMENT.
The following, in each case duly executed by all parties, as appropriate:
Common Terms Agreement
11
439
52. Nortel Guaranty
53. Assignments and Acceptances regarding all Commitments under the Nortel Note
Purchase Agreement, including the related addendum thereto
54. Letter Agreement regarding Front End Fees
55. Secretary's Certificate certifying to charter documents of Nortel and
corporate and signatory authority
56. Letter from Xxxxxx Trust Company of New York, Nortel's Agent of Service of
Process in the State of New York, accepting appointment to serve as such
57. Legal Opinion of in-house counsel to Nortel Networks Corporation, addressed
and acceptable in form and substance to the Purchasers under the Nortel
Note Purchase Agreement
58. Legal Opinion of GD&C, addressed and acceptable in form and substance to
the Purchasers under the Nortel Note Purchase Agreement
DOCUMENTS RELATING TO THE RECOURSE ASSIGNMENT OF THE QUALCOMM/ERICSSON NOTE
PURCHASE AGREEMENT.
The following, in each case duly executed by all parties, as appropriate:
59. Ericsson Guaranty
60. Agency Agreement between ABN AMRO and Ericsson
61. Commitment Letter
62. General Counsel's Certificate certifying to charter documents of Ericsson
OTHER DOCUMENTS.
Copies of each of the following, including all amendments through the
Closing Date, certified as true, correct and complete copies by a Senior
Officer of the Company:
63. Business Plan for the Company
64. Copies of each of the financial statements referred to in Section 3.6 of
the Common Terms Agreement
Common Terms Agreement
12
440
65. Evidence of the completion, or irrevocable commitments (subject only to
customary closing conditions, not including "material adverse change" or
"market condition" outs), in form and substance reasonably satisfactory to
the Initial Purchasers in respect of, a private equity offering by VeloCom
Inc., the net proceeds of which equal, together with equity previously
contributed to VeloCom Inc., at least $250,000,000.
66. Any other documentation relating to the equity of the Company, the
Subsidiaries or HoldCo
GOVERNMENTAL APPROVALS AND RELATED MATTERS. Copies of each of the following,
including all amendments through the Closing Date, duly executed by all
parties thereto and certified as true, correct and complete copies by a
Senior Officer of the Company:
67. Mirror Authorizations
68. Brazilian Central Bank Approval ("Prior Approval") which authorizes the
closing of a foreign exchange transaction for the entrance of the proceeds
of the Notes issued on the Closing Date into Brazil and approves the basic
financial terms thereof, including all scheduled payments of principal,
interest, fees, expenses and commissions in respect thereof and optional
redemptions, repurchases or prepayments no less frequently than quarterly
(or such lesser frequency as may then be generally approved by the Central
Bank).
69. Letter from or evidence of Anatel's approval of pledge by HoldCo and Linneu
of 100% of the stock of the Company.
70. Letters from CT Corporation Systems accepting appointment to serve as agent
for service of process for each of the Company Parties under each of the
Pari Passu Financing Documents to which such Company Party is a party.
71. Copies of any permits/licenses that are set forth in Item 2 of Part B of
Schedule 3.26 obtained as of the Closing Date and copies of an exemplar of
each permit/license that is of the type set forth in Item 1 of Part B of
Schedule 3.26.
CHARTER DOCUMENTATION AND CERTIFICATES.
The following, in the case of certificates and the like, duly executed by
the parties specified herein or therein:
72. For each of the following Company Parties, as of a recent date, the
charter, as amended, certified by the appropriate Governmental Authority of
its jurisdiction of its formation, and, to the extent available, good
standing certificates and tax status certificates (showing no unpaid tax
liabilities) by the appropriate Governmental Authorities of its
jurisdiction of formation:
Common Terms Agreement
13
441
Company Party
HoldCo
The Company
Vesper Cayman SPV
Xxxx Canada International (Brazil Telecom I) Limited
Qualcomm do Brasil Ltda.
VeloCom Cayman Brasil Holdings
73. For each of the B Company Partieso (other than Xxxxxxxx Xxxxxxxxxxxx), a
secretary's certificate dated the Closing Date in substantially the form of
Exhibit F-1, including all exhibits
74. For each of the Company, HoldCo and Vesper Cayman SPV, an officers'
certificate, in substantially the form of Exhibit F-2, including all
attachments and, in the case of the Company and HoldCo, a certification
that the assets listed in the exhibits to the Collateral Documents
constitute all of the assets of the Company and HoldCo constituting
Collateral as of the Closing Date
75. A Compliance Certificate in substantially the form of Exhibit F-3,
demonstrating compliance with the Financial and Operating Covenants as of
the Closing Date, giving pro forma effect to the Notes proposed to be
issued on such date
76. For each of the Company Parties (other than Xxxxxxxx Xxxxxxxxxxxx), a
Solvency Certificate in substantially the form of Exhibit F-4
77. Lien searches in each jurisdiction where HoldCo, the Company or any
Subsidiary maintains an office or has property, showing no registrations,
financing statements or other Lien instruments of record affecting the
Collateral
LEGAL OPINIONS.
Favorable legal opinions dated the Closing Date addressed to the Agents and
the Purchasers from:
78. Milbank, Tweed, Xxxxxx & XxXxxx LLP, US counsel to the Company Parties,
substantially in the form of Exhibit G-1 to the Common Terms Agreement (or,
if there is no such Exhibit on the date hereof, acceptable in form and
substance to the Initial Purchasers)
Common Terms Agreement
14
442
79. Local counsel to the Company Parties (other than those formed under the
laws of Brazil or the United States), substantially in the form of Exhibit
G-2 to the Common Terms Agreement (or, if there is no such Exhibit on the
date hereof, acceptable in form and substance to the Initial Purchasers)
80. Xxxxxxxx Guimaraes Advogados, Brazilian counsel to the Company Parties,
substantially in the form of Exhibit G-3 to the Common Terms Agreement (or,
if there is no such Exhibit on the date hereof, acceptable in form and
substance to the Initial Purchasers)
81. Local counsel to the Company Parties (in each case incorporated in a state
of the United States, the principal executive office of which is located in
a state other than the state of incorporation), substantially in the form
of Exhibit G-4 to the Common Terms Agreement (or if there is no such
Exhibit on the date hereof, acceptable in form and substance to the Initial
Purchasers)
Common Terms Agreement
15
443
SCHEDULE 2.3
POST CLOSING MATTERS
ITEM DUE DATE
---- --------
A. CONSULARIZATION OF EACH OF THE FOLLOWING DOCUMENTS GOVERNED BY NEW YORK LAW:
1. Nortel Note Purchase Agreement
2. Qualcomm/Ericsson Note Purchase Agreement
3. Xxxxxx Note Purchase Agreement
4. Capital Contribution Agreement
5. Support Obligations of
BCI 30 days after receipt of
fully notarized
VeloCom signature pages
Qualcomm
6. Common Terms Agreement
7. HoldCo Guaranty
8. Paying Agency Agreement
9. Shareholder Pledge Agreement
B. SWORN TRANSLATION AND, AS NECESSARY TO PERFECT SECURITY INTERESTS, EVIDENCE
OF REGISTRATION OF EACH OF THE FOLLOWING DOCUMENTS GOVERNED BY BRAZILIAN LAW:
1. Company Equipment Pledge Agreement
2. Power of Attorney under Company Equipment Pledge Agreement
3. Company Receivables Pledge Agreement
4. Deposit Account Agreement(s) under Company Receivables Pledge
Agreement
5. Power of Attorney under Company Receivables Pledge Agreement 15 days after Closing
6. Company Contracts Pledge Agreement
7. Power of Attorney with respect to Company Contracts Pledge Agreement
8. Cash Collateral Pledge Agreement (if executed at Closing pursuant to
Schedule 2.1)
Common Terms Agreement
1
444
ITEM DUE DATE
---- --------
B. SWORN TRANSLATION AND, AS NECESSARY TO PERFECT SECURITY INTERESTS, EVIDENCE
OF REGISTRATION OF EACH OF THE FOLLOWING DOCUMENTS GOVERNED BY BRAZILIAN LAW
(CONT'D):
9. Deposit Account Agreement(s) under Cash Collateral Pledge Agreement
(if executed at Closing pursuant to Schedule 2.1)
10. Power of Attorney with respect to Cash Collateral Pledge Agreement (if
executed at Closing pursuant to Schedule 2.1)
11. HoldCo Stock Pledge Agreement
12. Power of Attorney with respect to HoldCo Stock Pledge Agreement
13. Proceeds Account Pledge Agreement under Nortel Note Purchase Agreement 15 days after Closing
14. Power of Attorney with respect to Proceeds Account Pledge Agreement
under Nortel Note Purchase Agreement
15. Proceeds Account Pledge Agreement under Qualcomm/Ericsson Note
Purchase Agreement
16. Power of Attorney with respect to Proceeds Account Pledge Agreement
under Qualcomm/Ericsson Note Purchase Agreement
17. Brazilian Shareholder Pledge Agreement
C. EVIDENCE OF FILING AND RECORDATION OF THE MORTGAGES RELATED TO THE FOLLOWING
PROPERTIES:
1. Mortgage related to Xxx Xxxxxxx Xxxxxxxx Xxxxxxxxxxx, Xxxxx, Xxx xx 00 days after Closing
Janeiro
2. Mortgage related to Xxxxxxx 00 xx Xxxxxxxx, 000, Xxxxx, Xxxx 120 days after Closing
D. PREPARATION OF THE FOLLOWING SCHEDULES AND FILING OF AMENDMENT TO THE COMPANY
EQUIPMENT PLEDGE AGREEMENT:
1. Exhibit 1 to Company Equipment Pledge Agreement - List of Equipment 15 days after
acquisition by the
Company of title to
2. Exhibit 2 to Company Equipment Pledge Agreement - List of Inventory more than $25,000,000
of Equipment and
Inventory
E. DELIVERY OF THE FOLLOWING REPORTS REGARDING TRIAL RUNS:
Common Terms Agreement
2
445
ITEM DUE DATE
---- --------
1. An initial operating report, including information with respect to the January 31, 2000
items described in Section 4.1(d), accompanied by a certificate of the
chief financial officer of the Company with respect to any material
modifications to the Business Plan as in effect as of the Closing Date
resulting from the Trial Runs or the Commercial Launch
2. A report as to the determination of the Board of Directors of the March 31, 2000
Company regarding the "Fiber Case," accompanied by a certificate of
the chief financial officer of the Company with respect to any
material modifications to the Business Plan as in effect as of the
Closing Date resulting from such determination
F. DELIVERY OF THE FOLLOWING MISCELLANEOUS CLOSING DOCUMENTS:
1. Certificate of Tax Status of HoldCo 15 days after Closing
Common Terms Agreement
3
446
SCHEDULE 3.1(a)
ORGANIZATION OF COMPANY PARTIES (OTHER THAN THE COMPANY)
COMPANY PARTY FORM AND STATE OF ORGANIZATION
------------- ------------------------------
Vesper Holding S.A. sociedade anonima (Brazil)
Xxxx Canada International (Brazil corporation (British Virgin
Telecom I) Limited Islands)
VeloCom Cayman Brasil Holdings corporation (The Cayman Islands)
Qualcomm do Brasil Ltda. limitada (Brazil)
Xxxx Canada International, Inc. corporation (Canada)
VeloCom Inc. corporation (Delaware)
Xxxxxxxx Xxxxxxxxxxxx corporation (Delaware)
ORGANIZATION OF THE COMPANY AND
SUBSIDIARIES
COMPANY/SUBSIDIARY FORM AND STATE OF ORGANIZATION
------------------ ------------------------------
Xxxxxx X.X. sociedade anonima (Brazil)
Vesper Cayman limited liability, exempted
company (The Cayman Islands)
Common Terms Agreement
447
SCHEDULE 3.5(b)
CAPITAL STOCK OF THE SUBSIDIARIES, THE COMPANY AND HOLDCO
1. HOLDCO
CONVERTIBLE,
OUTSTANDING OUTSTANDING EXCHANGEABLE CAPITAL AGREEMENTS RE
CAPITAL STOCK CAPITAL STOCK STOCK, RIGHTS & ISSUANCE, VOTING OR SALE RECORD AND BENEFICIAL
(AS OF THE DATE HEREOF) (AS OF THE CLOSING DATE) COMMITMENTS OF CAPITAL STOCK OWNER OF CAPITAL STOCK
----------------------- ------------------------ -------------------- ------------------------ ----------------------
151,704 Common and 184,384 Common and None Shareholder Agreement Xxxx Canada International
151,704 Preferred 184,384 Preferred (Brazil Telecom I)
Limited
217,854 Common and 264,784 Common and None Shareholder Agreement VeloCom Cayman Brasil
217,854 Preferred 264,784 Preferred Holdings
71,442 Common and 86,832 Common and None Shareholder Agreement Qualcomm do Brasil
71,442 Preferred 86,832 Preferred Ltda.
2. COMPANY
CONVERTIBLE, EXCHANGEABLE AGREEMENTS RE ISSUANCE,
OUTSTANDING CAPITAL STOCK, RIGHTS & VOTING OR SALE OF CAPITAL RECORD AND BENEFICIAL
CAPITAL STOCK COMMITMENTS STOCK OWNER OF CAPITAL STOCK
------------- ------------------------- ------------------------- ----------------------
525,870 Common None None HoldCo
1 Common None None Linneu Albuquerque Xxxxx
3. SUBSIDIARIES
AUTHORIZED AND
SUBSIDIARY ISSUED CAPITAL STOCK RECORD AND BENEFICIAL OWNER OF CAPITAL STOCK
---------- -------------------- --------------------------------------------
Vesper Cayman 1 Share Xxxxxx X.X.
Common Terms Agreement
1
448
4. CAPITAL STOCK HELD BY SUBSIDIARIES
CONVERTIBLE, EXCHANGEABLE AGREEMENTS RE ISSUANCE,
CAPITAL STOCK, RIGHTS & VOTING OR SALE OF CAPITAL RECORD AND BENEFICIAL
SUBSIDIARY COMMITMENTS STOCK OWNER OF CAPITAL STOCK
---------- ------------------------- ------------------------- ----------------------
Xxxx Xxxx Xxxx Xxxx
0. JOINT VENTURES AND OTHER INVESTMENTS (OTHER THAN IN SUBSIDIARIES)
HOLDER OF INVESTMENT DESCRIPTION OF INVESTMENT (INCLUDING AMOUNT AS OF THE DATE HEREOF)
-------------------- ------------------------------------------------------------------
None None
Common Terms Agreement
2
449
SCHEDULE 3.8
MATERIAL LITIGATION
None.
Common Terms Agreement
450
SCHEDULE 3.16
ENVIRONMENTAL CONDITION
None.
Common Terms Agreement
451
SCHEDULE 3.17
AFFILIATE AGREEMENTS
1. Secondment Agreement with Xxxx Canada International, Inc. dated August
15, 1999.
2. Technical Services Agreement with Xxxx Canada International, Inc. dated
May 27, 1999.
3. Know-How Transfer and Technical Services Agreement with Xxxx Canada
International, Inc. dated August 15, 1999.
4. Technical Services Agreement with VeloCom Inc. to be entered into as of
a date prior to the Closing Date.
Common Terms Agreement
452
SCHEDULE 3.23
CERTAIN RESTRICTIONS
None.
Common Terms Agreement
453
SCHEDULE 3.26
LICENSES, PERMITS OR APPROVALS
PART A
1. Instrument of Authorization for Operation of a Switched Fixed Telephone
Service for the mode LOCAL issued by the Agencia Nacional de Telecomunicacoes
(National Telecommunications Agency) ("Anatel") to the Company, under its prior
name "Canbra Telefonica S.A." on February 4, 1999.
2. Instrument of Authorization for Operation of a Switched Fixed Telephone
Service for the mode NATIONAL LONG DISTANCE OF INTRA-REGIONAL SCOPE, issued by
Anatel to the Company, under its prior name "Canbra Telefonica S.A." on February
4, 1999.
3. Licenses for packet switched network services, circuit switched network
services, dedicated line services and special services of audio and video signal
retransmission, issued by Anatel to the Company on September 23, 1999.
PART B
1. Municipal License to allow installation and use of antennas and use of
administrative offices ("Xxxxxx Municipal - Licenca de Uso e Funcionamento")
issued for each administrative office, switch site and antenna sites.
2. Anatel's licenses for the use of antennas ("Licenca de Funcionamento de
Estacao") issued for each antenna sites.
Common Terms Agreement
454
SCHEDULE 4.1(d)
FORM OF OPERATING REPORTS
Operating Report No. [ ]
Fiscal Quarter Ending [Day, Month, Year]
REPORTING CATEGORY ACTUAL BUDGET
------------------ ------ ------
FISCAL QUARTER CUMULATIVE FISCAL QUARTER CUMULATIVE
-------------- ---------- -------------- ----------
A. Sites
a) Call sites constructed
b) Switch sites constructed
c) Call sites in service
d) Switch sites in service
e) Fibre notes in service
Residential Business Residential Business Residential Business Residential Business
----------- -------- ----------- -------- ----------- -------- ----------- --------
B. Number of Subscribers
a) New subscribers acquired,
per Subscriber Segment
b) Total number of subscribers,
per Subscriber Segment
c) Churn, per Subscriber Segment N/A N/A
C. Subscriber Lines
a) Total Lines in service,
per Subscriber Segment
Common Terms Agreement
455
REPORTING CATEGORY ACTUAL BUDGET
------------------ ------ ------
Residential Business Residential Business Residential Business Residential Business
----------- -------- ----------- -------- ----------- -------- ----------- --------
D. Subscriber Billing
a) Average age of receivables N/A N/A
b) Minutes of use N/A N/A
c) Average billing, per Subscriber
Segment
(for each month of Fiscal Quarter)
I)-activation fees: N/A N/A
Jan. (e.g. For Q1)
Feb.
March
II)-monthly billing fees:* N/A N/A
Jan.
Feb.
March
* Excludes activation fees. Includes monthly and per minute.
Common Terms Agreement
456
SCHEDULE 5
FINANCIAL AND OPERATING COVENANTS
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
-------- -------- -------- -------- -------- --------
MAXIMUM
MINIMUM CAPITAL
REVENUES MINIMUM TOTAL DEBT TO EBITDA TO EXPENDITURE
(IN MILLIONS OF SUBSCRIBERS (IN ANNUALIZED INTEREST EBITDA TO (IN MILLIONS OF
FISCAL QUARTER ENDING DOLLARS) THOUSANDS) EBITDA EXPENSE FIXED CHARGES DOLLARS)
--------------------- --------------- --------------- ------------- --------- ------------- ---------------
December 31, 1999 [***]
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 [***] [***]
Common Terms Agreement
[*] 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.
457
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
-------- -------- -------- -------- -------- --------
MAXIMUM
MINIMUM CAPITAL
REVENUES MINIMUM TOTAL DEBT TO EBITDA TO EXPENDITURE
(IN MILLIONS OF SUBSCRIBERS (IN ANNUALIZED INTEREST EBITDA TO (IN MILLIONS OF
FISCAL QUARTER ENDING DOLLARS) THOUSANDS) EBITDA EXPENSE FIXED CHARGES DOLLARS)
--------------------- --------------- --------------- ------------- --------- ------------- ---------------
September 30, 2002 [***] [***]
December 31, 2002 [***] [***] [***]
March 31, 2003 [***] [***] [***] [***] [***]
June 30, 2003 [***] [***] [***] [***] [***]
September 30, 2003 [***] [***] [***] [***] [***]
December 31, 2003 [***] [***] [***] [***] [***] [***]
March 31, 2004 [***] [***] [***] [***] [***]
June 30, 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.
Common Terms Agreement
458
SCHEDULE 10.4
COMPANY AND HOLDCO INFORMATION
THE COMPANY:
ADDRESS FOR NOTICES:
Xxxxxxx Xxxxxxxxx xx Xxxxx, 000,
00(x) xxxxx
Xxxxxx Xxx xx Xxxxxxx - XX
Xxxxxx
Fax: 00 00 000-0000
Phone: 00 00 000-0000
Attention: Xxxxxx Xxxxx
COMPANY ACCOUNT (for the funding of Pari Passu Financings):
Bank: Citibank New York
Account Name: Banco Citibank S.A. - Sao Paulo
Account Number: [***]
ABA Number: [***]
Swift Code: XXXXXXXX
Beneficiary name in Brazil: Xxxxxx X.X.
Beneficiary account in Citibank/Brazil: [***]
Beneficiary branch on Citibank/Brazil: 003
HOLDCO:
ADDRESS FOR NOTICES:
Xxxxxxx Xxxxxxxxx xx Xxxxx, 000,
00(x) xxxxx
Xxxxxx Xxx xx Xxxxxxx - XX
Xxxxxx
Fax: 00 00 000-0000
Phone: 00 00 000-0000
Attention: Xxxxxx Xxxxx
[*] 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.
Common Terms Agreement
