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EXHIBIT 10.9
EXECUTION COPY
SHARE PURCHASE AGREEMENT
BY AND AMONG
XXXXXXX X.X. TECNOLOGIA DA INFORMACAO,
XXXXXXXX INTERNATIONAL ATL LIMITED,
JOHI REPRESENTACOES LTDA
AND
ATL-ALGAR TELECOM LESTE, S.A.
DATED AS OF MARCH 25, 1999
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SHARE PURCHASE AGREEMENT
SHARE PURCHASE AGREEMENT, dated as of March 25, 1999 ("Agreement") by
and among XXXXXXX X.X. TECNOLOGIA DA INFORMACAO, a Brazilian corporation
("Lightel"), XXXXXXXX INTERNATIONAL ATL LIMITED, a Cayman Islands exempt limited
company ("Xxxxxxxx"), JOHI REPRESENTACOES LTDA., a Brazilian limited liability
company and wholly-owned subsidiary of Lightel ("Johi"), and ATL-ALGAR TELECOM
LESTE, S.A., a Brazilian corporation ("ATL").
WHEREAS, Xxxxxxxx has exercised its preferential right to acquire from
Lightel 899,523 voting common shares of ATL and 4,071,527 nonvoting preferred
shares of ATL (the "Offered Shares") proposed for transfer by Lightel upon the
terms and conditions (the "Terms and Conditions") referred to in a certain
letter from Lightel to Xxxxxxxx dated January 24, 1999 (the "Notice Letter");
WHEREAS, as a condition precedent to, and in order to effect, the
proposed transfer of the Offered Shares in accordance with such exercise, and
pursuant to the Terms and Conditions, certain agreements and consents need to be
entered into or given pursuant to the several other Transaction Agreements (as
hereinafter defined) concurrently herewith; and
WHEREAS, Williams, Lightel, Johi and ATL desire to enter into this
Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. DEFINITIONS AND INTERPRETATIONS.
The following terms will have the following meanings when used as
capitalized in this Agreement.
"ANATEL" means the Agencia Nacional de Telecomunicacoes, or such other
Governmental Authority which is then regulating the telecommunications business
activities of ATL and its Subsidiaries in Brazil.
"Ancillary Agreements" means Conditional Future Rights Agreement and the Put and
Call Agreement, including all exhibits, attachments, schedules and annexes
thereto, and a certain letter agreement of even date herewith entered into by
the parties hereto in connection with the transactions contemplated hereby.
"Assignment Agreement" means the assignment and release agreement, dated as set
forth in the Escrow Agreement, among Williams, Lightel, Lightel International
Ltd. and Citibank N.A., as administrative agent.
"Banco Central" means Banco Central do Brasil, the central bank of Brazil.
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"Capital Stock" means any and all shares, interests, quotas, participation or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants or options to purchase any of the foregoing.
"Closing" means the consummation and completion of the purchase and sale of the
Offered Shares, the delivery and execution of the Share Purchase Agreement and
the Ancillary Agreements, and all other actions or transactions to be completed
and consummated by the Closing in accordance with this Agreement.
"Closing Date" is defined in Section 2.3 below.
"Concession Agreement" means the Concession Agreement dated April 2, 1998
between ATL and ANATEL, as the same may be amended, supplemented or otherwise
modified from time to time.
"Conditional Future Rights Agreement" means the Conditional Future Rights
Agreement dated as of March 24, 1999, among Lightel, Xxxxx X.X.-Empreendimentos
E Participacoes, Johi and Xxxxxxxx.
"Contractual Obligation" means, as to any Person, any provision of any security
issued by any such Person or any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.
"Conversion Closing" has the meaning given in the Escrow Agreement.
"Debt" of any Person means:
(a) all indebtedness of such Person for borrowed money;
(b) all Obligations of such Person for the deferred purchase price of
property of services (other than trade payables not overdue by more
than 60 days incurred in the ordinary course of such Person's
business);
(c) all Obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments;
(d) all Obligations of such Person created or arising under any
conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event
of default are limited to repossession or sale of such property);
(e) all Obligations of such Person under acceptance, letter of credit
or similar facilities;
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(f) all Obligations of such Person to purchase, redeem, retire defease
or otherwise make any payment in respect of any equity interests in
such Person or any other Person or any warrants, rights, or options
to acquire such capital stock;
(g) all Obligations of such Person in respect of hedge agreements,
valued at the agreement value thereof; and
(h) all indebtedness and other payment Obligations referred to in
clauses (a) through (g) above of another Person secured by (or for
which the holder of such indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on property
(including, without limitation, accounts and contract rights) owned
by such Person, even though such Person has not assumed or become
liable for the payment of such indebtedness or other payment
Obligations;
Debt shall not include any deferred amounts owing (including related interest)
as a license fee in connection with the license and concession received by ATL
to provide Band B wireless communications in the States of Rio de Janeiro and
Espirito Santo or Subordinated Debt (as defined in the Ericsson Loan Agreement
(as defined below)) of the Shareholders.
"Debt Release Letter" means that certain debt release letter, dated as set forth
in the Escrow Agreement, among Xxxxxxxx and Xxxxxxx, pursuant to which Xxxxxxxx
releases Lightel from all of its Obligations under the Intercompany Note (as
defined in the Escrow Agreement).
"Ericsson Loan Documents" has the meaning given in the Ericsson Loan Agreement.
"Ericsson Loan Agreement" is defined in Section 3.1(b)(ii) below.
"Ericsson Security Documents" is defined in Section 3.1(b)(ii) below.
"Escrow Agent" has the meaning given in the Escrow Agreement.
"Escrow Agreement" means the escrow agreement, dated as of March 24, 1999, among
Johi, Lightel, Lightel International Ltd., Xxxxxxxx and Citibank, N.A., as
escrow agent and administrative agent under the Credit Agreement (as defined in
the Escrow Agreement).
"Escrow Property" has the meaning given in the Escrow Agreement.
"Financial Statements" is defined in Section 3.1(f) below.
"GAAP" means Brazilian generally accepted accounting principles as in effect
from time to time.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and includes, for all purposes hereof, ANATEL and the Ministry of
Communications.
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"Johi Agreements" means the Assignment Agreement, the Escrow Agreement, the Johi
Amendment, the Resignations and the Powers of Attorney.
"Johi Amendment" means the amendment to the Articles of Association of Johi,
pursuant to which Lightel effectively agrees to transfer, or cause the transfer
of, all of the Johi Capital Stock to Xxxxxxxx.
"Johi Capital Stock" means all of the Capital Stock issued by Johi as of the
Closing Date.
"Lien" means any lien, security interest or other charge or encumbrance of any
kind, or any other type of preferential arrangement, including without
limitation, the lien or retained security title of a conditional vendor, any
easement, right of way or other encumbrance on title to real property.
"Material Adverse Change" means any material adverse change in the business,
condition (financial or otherwise), operations, performance, properties or
prospects of ATL or ATL and its Subsidiaries, taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the business
condition (financial or otherwise), operations, performance, properties or
prospects of ATL or ATL and its Subsidiaries, taken as a whole, (b) the rights
and remedies of Xxxxxxxx hereunder and under any Ancillary Agreement or (c) the
ability of a Person to perform its Obligations under this Agreement or the
Ancillary Agreements to which it is a party.
"Material Contract" means with respect to any Person, each contract to which
such Person is a party involving aggregate consideration payable to or by such
Person of U.S.$10,000,000 or more or otherwise material to the business,
condition (financial or otherwise), operations, performance, properties or
prospects of such Person, including but not limited to, the Project Contracts.
"Ministry of Communications" means the Ministerio das Comunicacoes, the Ministry
of Communications of Brazil, or such other Governmental Authority which is then
regulating the cellular telecommunications business activities of ATL and its
Subsidiaries.
"Obligation" means with respect to any Person, any payment, performance or other
obligations of such Person of any kind, including, without limitation, any
liability of such Person on any claim, whether or not the right of any creditor
to payment in respect of such claim is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, disputed, undisputed, legal,
equitable, secured or unsecured, and whether or not such claim is discharged,
stayed or otherwise affected by any bankruptcy, insolvency or similar
proceeding. Without limitation, the generality of the foregoing, the obligations
of the parties to this Agreement and the Ancillary Agreements include:
(a) the obligation to pay principal, interest, charges, expenses, fees,
attorneys' fees and disbursements, indemnities and other amounts
payable by any party under this Agreement or any Ancillary
Agreement; and
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(b) the obligation of any such party to reimburse any amount in respect
of any of the foregoing that another party, at the first party's
sole discretion, may elect to pay or advance on behalf of such
party.
"Offered Shares" is defined in the Recitals of this Agreement.
"Person" means an individual, partnership, corporation (including a business
trust), limited liability company, joint stock company, trust, unincorporated
association, joint venture or other entity, or a government or any political
subdivision or agency thereof.
"Power of Attorney" means the power of attorney from Lightel to Xxxxxxxx
authorizing the Johi Amendment and the filing thereof with the appropriate
Governmental Authority.
"Project Contracts" means the Concession Agreement and the Supply Agreements.
"Put and Call Agreement" means the Put and Call Agreement, dated as of March 24,
1999, among Lightel,Xxxxxxxx and Johi.
"Requirement of Law" means as to any Person, the partnership agreement, the
certificate of incorporation and bylaws, estatuto social or other organizational
or governing documents of such Person, and any law, treaty, rule or regulation
or determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Resignations" means the resignations of the General Manager and other officers
and directors of Johi effective as of the Conversion Closing.
"Shareholders" means Xxxxxxx, Xxxx, Xxxxxxxx, SKTI-US, LLC, a limited liability
company organized under the laws of the State of Delaware and any other Person
holding any Capital Stock of ATL.
"Subsidiary" of any Person means any corporation, partnership, joint venture,
limited liability company, trust or estate of which (or in which) more than 50%
of:
(a) the issued and outstanding Capital Stock having ordinary voting
power to elect a majority of the board of directors of a
corporation or similar such entity (irrespective of whether at the
time Capital Stock of any other class or classes of such
corporation shall or might have voting power upon the occurrence of
any contingency),
(b) the interest in the capital or profits of a partnership, joint
venture or limited liability company, or
(c) the beneficial interest in a trust or estate
is at the time directly or indirectly owned or controlled by such Person, by
such Person and one or more of its other Subsidiaries or by one or more of such
Person's other Subsidiaries.
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"Supply Agreements" means the Services Supply Contract dated as of September 4,
1998, between ATL and Ericsson Telecomunicacoes S.A., the Network Operation and
Maintenance Services Agreement dated as of September 4, 1998, between ATL and
Ericsson Telecomunicacoes S.A. and the Supply and Implementation Contract dated
as of September 4, 1998 between ATL and Ericsson Telecomunicacoes S.A., in each
case as amended, modified and supplemented from time to time.
"Transaction Agreements" means the Agreement, the Ancillary Agreements, the Debt
Release Letter and the Johi Agreements.
"U.S. GAAP" means United States generally accepted accounting principles.
SECTION 2. PURCHASE OF JOHI CAPITAL STOCK.
2.1 PURCHASED SHARES. Subject to the terms and conditions of this
Agreement and the other Transaction Agreements, Xxxxxxxx hereby agrees to
purchase, and Lightel hereby agrees to sell to Xxxxxxxx, all of the Johi Capital
Stock.
2.2 PURCHASE PRICE. The purchase price (the "Purchase Price") for the
Johi Capital Stock will be US$265,000,000, payable as set forth in Section 2.3.
2.3 CLOSING. The Closing will take place on the date of this Agreement
by the execution, and delivery of this Agreement and the Ancillary Agreements by
the parties thereto and the deliveries of the Escrow Property pursuant to the
Escrow Agreement. In the event the conditions set forth in the Escrow Agreement
shall not occur on or prior to the date specified in the Escrow Agreement for
distribution of the Escrow Property as contemplated by Section 3 of the Escrow
Agreement, the Escrow Agreement will terminate and the Escrow Property will be
returned pursuant to Section 5 of the Escrow Agreement.
SECTION 3. REPRESENTATIONS AND WARRANTIES.
3.1 ATL'S REPRESENTATIONS AND WARRANTIES. To induce Xxxxxxxx to enter
into this Agreement and to complete the transactions required on the Closing
Date, ATL represents and warrants to Xxxxxxxx as of the date of this Agreement
that:
(a) Due Organization; Due Qualification; Requisite Power. Each of
ATL and its Subsidiaries (i) is an entity, duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization, (ii) is
duly qualified and in good standing as a foreign entity in each other
jurisdiction in which it owns or leases property or in which the conduct of its
business requires it to so qualify or be licensed, (iii) has all requisite
corporate power and authority (including, without limitation, except as
described on Schedule 3.1(a), all governmental licenses, permits and other
approvals) to own or lease and operate its properties and to carry on its
business as now conducted and as proposed to be conducted and (iv) is in
compliance with all material applicable laws, rules and regulations, charters
(except as described on Schedule 3.1), treaties and determinations of an
arbitrator or a court or other Governmental Authority.
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(b) No Subsidiaries, Capital Stock.
(i) As of the date hereof, ATL does not have any Subsidiaries
other than ATL Cayman International ("ATL Cayman"), a Cayman Islands company.
The Shareholders (including directors appointed by Lightel) own directly 100% of
ATL. ATL owns directly 100% of the Capital Stock of ATL Cayman. Prior to the
completion of the transactions contemplated by the Agreement, Lightel and its
directors own 35% of the outstanding capital stock of ATL, consisting of
2,414,511 common shares and 2,556,539 preferred shares (including shares held by
directors of Lightel); Johi owns the Offered Shares comprising 35% of the
outstanding capital stock of ATL, and consisting of 899,523 common shares and
4,071,527 preferred shares; Xxxxxxxx owns 20% of the outstanding capital stock
of ATL, consisting of 2,840,600 preferred shares; and SKTI-US LLC ("LLC") owns
10% of the outstanding capital stock of ATL, consisting of 1,420,300 common
shares.
(ii) As of the date hereof, there is no issued or outstanding
Capital Stock of ATL or ATL Cayman other than as described in Section 3.1(b)(i).
All of the outstanding capital stock of ATL and ATL Cayman has been validly
issued, is fully paid and nonassessable and is owned by the Persons described,
in the amounts specified, in Section 3.1(b)(i) and is free and clear of all
Liens whatsoever, except Liens created pursuant to the Security Documents (as
defined in that certain Secured Loan Agreement (the "Ericsson Loan Agreement")
dated as of March 11, 1999, among ATL, ATL Cayman and Ericsson Project Finance
AB, as initial lender, collateral agent and administrative agent) and any other
agreements related to the Share Pledge Agreement and the Ericsson Loan Agreement
(the "Ericsson Security Documents").
(iii) Immediately after the Closing, the Offered Shares will
represent 35% of the outstanding capital stock of ATL, which total will include
the number of all common and preferred stock issued or otherwise issuable from
other forms of equity or of Debt, including other preferred shares, warrants,
convertible Debt and equity and options to purchase in ATL. The Offered Shares
will have been transferred directly to Johi at or prior to Closing by Lightel,
free and clear of all Liens (other than as set forth in the Ericsson Security
Documents), and upon such transfer Johi will be the sole record and beneficial
owner of the Offered Shares. All of the Offered Shares have been duly authorized
and, contemporaneously with the Closing, will be validly issued, fully paid and
nonassessable, all in compliance with Brazilian Requirements of Law.
(c) Due Authorization, No Violations or Defaults. The execution,
delivery and performance by ATL of this Agreement and the Ancillary Agreements
to which it is or is to be a party and the other transactions contemplated
thereby, are within such Person's powers, have been duly authorized by all
necessary corporate action, and do not violate any Requirement of Law or
Contractual Obligation of such Person or, except for the Liens created under the
Ericsson Security Documents, result in or require the creation or imposition of
any Lien upon or with respect to any of the properties of ATL or any of its
Subsidiaries. Neither ATL nor any of its Subsidiaries is in violation of any
Requirement of Law. No Default or Event of Default (as such terms are defined in
the Ericsson Loan Agreement) has occurred and is continuing.
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(d) No Authorizations or Approvals. Except as described in Schedule
3.1, no authorization or approval, consent or other action by, and no notice to,
recordation with or filing with, any Governmental Authority or any other Person
is required in connection with the due execution, delivery, performance,
recordation, filing, legality, validity, admissibility in evidence or
enforceability of this Agreement or the Ancillary Agreements or the other
transactions contemplated hereby or thereby, except for (i) the issuance by
Banco Central of a certificate of registration in connection with the Offered
Shares; (ii) the authorization by Banco Central of payments abroad in connection
with the Offered Shares; (iii) the translation of this Agreement or any
Ancillary Agreement into Portuguese by a sworn translator, to the extent
required for such agreement to be in proper legal form under the laws of Brazil
for the enforcement thereof in any competent Brazilian court; (iv) the
notarization of signatures of parties to this Agreement and the Ancillary
Agreements signing outside of Brazil and the consularization of this Agreement
and the Ancillary Agreements executed outside of Brazil by a Brazilian consular
official; (v) the registration of this Agreement or any Ancillary Agreement in
the appropriate registry in Brazil or the corporate register of ATL (as the case
may be); (vi) the filing of the Johi Amendment and the Resignations with the
relevant Board of Trade and/or other Governmental Authority in Brazil; and (vii)
those authorizations, approvals, consents, actions, notices or filings which
have been duly obtained or made, as the case may be, and which remain in full
force and effect.
(e) Due Execution and Delivery; Enforceability. This Agreement and
the Ancillary Agreements to which ATL is a party have been duly executed and
delivered by ATL and are the legal, valid and binding obligation of ATL,
enforceable against ATL in accordance with its terms, subject to bankruptcy,
insolvency and other rules of general application applicable to creditors and
general principles of equity.
(f) Financial Statements. The financial statements of ATL as of
December 31, 1998 (the "Financial Statements"), have been prepared in accordance
with GAAP and U.S. GAAP, consistently applied. Such Financial Statements of ATL
as of December 31,1998 and all notes associated with said documents fairly
present the financial condition and the results of operations, and include
balance sheets, a statement of income (U.S. GAAP only), statements of changes in
shareholders' investment, sources and use of funds of ATL (GAAP only) and a
statement of cash flows (U.S. GAAP only), as at the respective dates of and for
the periods referred to in such documents. The U.S. GAAP Financial Statements
contain a note referring to differences from GAAP and are accompanied by a
convenience translation to U.S. Dollars, all in accordance with U.S. GAAP,
consistently applied. The Financial Statements are accompanied by an opinion of
Xxxxxx Xxxxxxxx S/C, independent public accountants.
(g) No Undisclosed Obligations. ATL and its Subsidiaries have no
material Obligations, except for obligations under Material Contracts (but not
Obligations for breach thereof), Obligations reflected or reserved against in
the Financial Statements and Obligations incurred in the ordinary course of
business since December 31, 1998, and Obligations incurred in connection with
the transactions contemplated by the Ericsson Loan Documents.
(h) Accuracy of Information Provided. The information, exhibits,
reports and schedules (collectively, "Information") furnished prior to the date
hereof by ATL to Ericsson Radio System AB or its affiliates ("Ericsson") in
connection with the negotiation of the Ericsson Loan Documents is true and
correct in every material respect and was prepared in good faith and
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ATL has not failed to disclose any material fact to Ericsson that is necessary
to make such Information not misleading in light of conditions existing at the
time of delivery of such Information.
(i) No Material Litigation. There is no action, suit,
investigation, litigation or proceeding against ATL or any of its Subsidiaries
pending or, to the knowledge of ATL, threatened before any arbitrator or
Government Authority affecting ATL or any of its Subsidiaries that (a) is
reasonably likely to have a Material Adverse Effect, or (b) purports to affect
the legality, validity or enforceability of this Agreement or any Ancillary
Agreement or the consummation of the transactions contemplated hereby or
thereby.
(j) No Material Adverse Change. No Material Adverse Change has
occurred since December 31, 1998.
(k) Existing Debt. Set forth on Schedule 3.1(k) hereto is a
complete and accurate list of all existing Debt of the Company and its
Subsidiaries, showing as of the date hereof the principal amount outstanding
thereunder.
(l) Title to Properties. Each of ATL and its Subsidiaries has good
title to, or a valid leasehold interest in, all its real property, and good
title to, or a valid leasehold interest in, all its other property, (a) subject
to customary exceptions in accordance with accepted practices in Brazil for
leases of a similar nature in comparable locations, and none of such property is
subject to any Lien, other than Liens created or not prohibited by the Ericsson
Loan Documents, and (b) except to the extent that the failure to have such title
or interests could not reasonably be expected to have a Material Adverse Effect.
(m) Taxes. Each of ATL and its Subsidiaries has filed or caused to
be filed or has been included in all tax returns required to be filed and has
paid all taxes shown thereon to be due or on any assessment made against it or
any of its property, together with applicable interest and penalties and all
other taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority (other than the amount or validity of which are currently
being contested in good faith by appropriate proceedings). As of the date
hereof, no taxes referred to in the preceding sentence are due and owing to any
Governmental Authority.
(n) Material Contracts. Set forth on Schedule 3.1(n) hereto is a
complete and accurate list of all Material Contracts of each of ATL and its
Subsidiaries, showing as of the date of such schedule the parties, subject
matter and term thereof. Each such Material Contract, except as stated on
Schedule 3.1(n), (a) has been duly authorized, executed and delivered by ATL or
the applicable Subsidiary party thereto and to the actual knowledge of ATL or
the applicable Subsidiary party thereto, but without any specific inquiry being
made, has been executed and delivered by all other parties thereto and (b) has
not been amended or otherwise modified, is in full force and effect and is
binding upon and enforceable against ATL or the applicable Subsidiary party
thereto and, to the knowledge of ATL or the applicable Subsidiary party thereto,
but without any specific inquiry being made, against all other parties thereto
in accordance with its terms. Except as stated on Schedule 3.1(n) there exists
no material default under any Material Contract by ATL or the applicable
Subsidiary party thereto or to the
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knowledge of ATL or the applicable Subsidiary party thereto, by any other
party thereto, which will have a Material Adverse Effect.
3.2 LIGHTEL REPRESENTATIONS AND WARRANTIES. Lightel represents and
warrants to Xxxxxxxx as of the date of this Agreement that:
(a) Due Incorporation. Lightel is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization, and
has the power and authority and the legal right to own and operate its property,
to lease the property it operates and to conduct the business in which it is
currently engaged;
(b) Due Authorization, No Violations or Defaults Lightel has the
power and authority and the legal right to execute and deliver and perform its
obligations under the Transaction Agreements to which Lightel is a party, and
has taken all necessary action to authorize their execution, delivery and
performance of the Transaction Agreements to which Lightel is a party.
(c) Due Execution and Delivery; Enforceability. The Transaction
Agreements to which Lightel is a party have been duly executed and delivered by
Lightel and are the legal, valid and binding obligation of Lightel, enforceable
against Lightel in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally and general equitable
principles (whether considered in a proceeding in equity or law);
(d) No Violation. The execution, delivery and performance of the
Transaction Agreements to which Lightel is a party will not violate in any
material respect any provision of any Requirement of Law or Contractual
Obligation of Lightel and will not result in or require the creation or
imposition of any Lien on any of the properties or revenues of Lightel pursuant
to any such Requirement of Law or Contractual Obligation of Lightel; and
(e) Governmental Authorizations. No material consent or
authorization of, filing with or other act by or in respect of any arbitrator or
Governmental Authority is required in connection with the execution, delivery,
performance, validity or enforceability of the Transaction Agreements to which
Lightel is a party, other than any of the foregoing that have been obtained and
are in full force and effect or are to be obtained pursuant to the Transaction
Agreements to which Lightel is a party.
(f) ATL Representations and Warranties. Lightel has no actual
knowledge that any of the representations and warranties of ATL set forth in
Section 3.1 hereof are not true and correct in all material respects as of the
date hereof, (without any representation or warranty that Lightel has conducted
any investigation in respect thereof, and without regard to any knowledge
Lightel may have been capable of having acquired at any time with respect
thereto).
3.3 XXXXXXXX REPRESENTATIONS AND WARRANTIES. Xxxxxxxx represents and
warrants to Lightel as of the date of the Agreement that:
(a) Due Incorporation. Xxxxxxxx is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization, and
has the power and
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authority and the legal right to own and operate its property, to lease the
property it operates and to conduct the business in which it is currently
engaged;
(b) Due Authorization, No Violations or Defaults Xxxxxxxx has the
power and authority and the legal right to execute and deliver and perform its
obligations under the Transaction Agreements to which it is a party, and has
taken all necessary action to authorize their execution, delivery and
performance of the Transaction Agreements to which it is a party;
(c) Due Execution and Delivery; Enforceability. The Transaction
Agreements to which it is a party have been duly executed and delivered by
Xxxxxxxx and are the legal, valid and binding obligation of Xxxxxxxx,
enforceable against Xxxxxxxx in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally and
general equitable principles (whether considered in a proceeding in equity or
law);
(d) No Violation. The execution, delivery and performance of the
Transaction Agreements to which it is a party will not violate in any material
respect any provision of any Requirement of Law (except Xxxxxxxx makes no such
representation in respect of Regulation 101, as adopted on February 4, 1999, by
ANATEL ("Regulation 101")) or Contractual Obligation of Xxxxxxxx and will not
result in or require the creation or imposition of any Lien on any of the
properties or revenues of Xxxxxxxx pursuant to any such Requirement of Law or
Contractual Obligation of Xxxxxxxx; and
(e) Governmental Authorizations. No material consent or
authorization of, filing with or other act by or in respect of any arbitrator or
Governmental Authority (except Xxxxxxxx makes no such representation in respect
of Regulation 101) is required in connection with the execution, delivery,
performance, validity or enforceability of the Transaction Agreements to which
it is a party, other than any of the foregoing that have been obtained and are
in full force and effect.
(f) ATL Representations and Warranties. Xxxxxxxx has no actual
knowledge that any of the representations and warranties of ATL set forth in
Section 3.1 hereof are not true and correct in all material respects as of the
date hereof (without any representation or warranty that Xxxxxxxx has conducted
any investigation in respect thereof, and without regard to any knowledge
Xxxxxxxx may have been capable of having acquired at any time with respect
thereto).
3.4 LIGHTEL'S AND JOHI'S REPRESENTATION AND WARRANTIES. Lightel and
Johi, jointly and severally, represent and warrant to Xxxxxxxx as of the date of
this Agreement that:
(a) Due Organization; Due Qualification; Requisite Power. Johi (i)
is an entity, duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, (ii) is duly qualified and in good
standing as a foreign entity in each other jurisdiction in which it owns or
leases property or in which the conduct of its business requires it to so
qualify or be licensed, (iii) has all requisite corporate power and authority
(including, without limitation all governmental licenses, permits and other
approvals) to own or lease and operate its properties and to carry on its
business as now conducted and as proposed to be
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13
conducted and (iv) is in compliance with all material applicable laws, rules
and regulations, charters, treaties and determinations of an arbitrator or a
court or other Governmental Authority.
(b) No Subsidiaries, Capital Stock. As of the date hereof, Johi
does not have any Subsidiaries. Except for one quota owned by Xx. Xxxxxxx xx
Xxxxx Xxxxxx, Xxxxxxx owns all of the outstanding Johi Capital Stock, and as of
the date hereof, there is no other issued or outstanding Johi Capital Stock. All
of the outstanding Johi Capital Stock has been validly issued, is fully paid and
nonassessable and is free and clear of all Liens whatsoever.
(c) Due Authorization, No Violations or Defaults. The execution,
delivery and performance by Johi of the Transaction Agreements to which it is or
is to be a party and the transactions contemplated thereby are within such
Person's powers, have been duly authorized by all necessary corporate action,
and do not violate any Requirement of Law or Contractual Obligation of such
Person or result in or require the creation or imposition of any Lien upon or
with respect to any of the properties of Johi (other than pursuant to the terms
of the Escrow Agreement). Johi is not in violation of any Requirement of Law.
(d) No Authorizations or Approvals. Except as described in Section
9 below and as contemplated by the Johi Agreements, no authorization or
approval, consent or other action by, and no notice to, recordation with or
filing with, any Governmental Authority or any other person is required in
connection with the due execution, delivery, performance, recordation, filing,
legality, validity, admissibility in evidence or enforceability of the Johi
Agreements or the other transactions contemplated thereby, except for: (i) the
prior approval by Banco Central for the conversion of certain loans into equity
investments in Johi; (ii) the issuance by Banco Central of an equity certificate
of registration in connection with the Johi Capital Stock to allow Xxxxxxxx to
remit dividends and repatriate equity principal abroad; (iii) the translation of
such Agreements into Portuguese by a sworn translator, to the extent required
for such agreement to be in proper legal form under the laws of Brazil for the
enforcement thereof in any competent Brazilian court; (iv) the notarization of
signatures of parties to such Agreements signing outside of Brazil and the
consularization of such Agreements executed outside of Brazil by a Brazilian
consular official; (v) the registration of such Agreements in the appropriate
registry in Brazil or the corporate register of ATL (as the case may be); (vi)
the filing of the Johi Amendment and the Resignations with the relevant Board of
Trade and/or other Governmental Authority in Brazil; and (vii) those
authorizations, approvals, consents, actions, notices or filings which have been
duly obtained or made, as the case may be, and which remain in full force and
effect.
(e) Due Execution and Delivery; Enforceability. The Transaction
Agreements to which Johi is a party have been duly executed and delivered by
Johi and are the legal, valid and binding obligation of Johi, enforceable
against Johi in accordance with their terms, subject to bankruptcy, insolvency
and other rules of general application applicable to creditors and general
principles of equity.
(f) No Material Litigation. There is no action, suit,
investigation, litigation or proceeding against Johi pending or, to the
knowledge of Johi or Lightel, threatened before any arbitrator or Government
Authority affecting Johi that (i) is reasonably likely to have a Material
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Adverse Effect on Johi, or (ii) purports to affect the legality, validity or
enforceability of any Transaction Agreement or the consummation of the
transactions contemplated thereby.
(g) Existing Obligations. Except for Obligations incurred in
connection with the Transaction Agreements and the transactions contemplated
thereby, Johi does not have any material Obligations.
(h) Title to Properties. Johi has good title to, or a valid
leasehold interest in, all its real property, and good title to, or a valid
leasehold interest in, all its other property, (a) subject to customary
exceptions in accordance with accepted practices in Brazil for Leases of a
similar nature in comparable locations, and none of such property is subject to
any Lien, (b) except to the extent that the failure to have such title or
interests could not reasonably be expected to have a Material Adverse Effect on
Johi.
(i) Taxes. Johi has filed or caused to be filed or has been
included in all tax returns required to be filed and has paid all taxes shown
thereon to be due or on any assessment made against it or any of its property,
together with applicable interest and penalties and all other taxes, fees or
other charges imposed on it or any of its property by any Governmental Authority
(other than the amount or validity of which are currently being contested in
good faith by appropriate proceedings). As of the date hereof, no taxes referred
to in the preceding sentence are due and owing to any Governmental Authority.
(j) Material Contracts. Set forth on Schedule 3.4 hereto is a
complete and accurate list of all Material Contracts of Johi (excluding the
Transaction Agreements), showing as of the date of such schedule, the parties,
subject matter and term thereof. Each such Material Contract, except as stated
on Schedule 3.4, (i) has been duly authorized, executed and delivered by Johi
and to the actual knowledge of Johi and Lightel, but without any specific
inquiry being made, has been executed and delivered by all other parties thereto
and (ii) has not been amended or otherwise modified, is in full force and effect
and is binding upon and enforceable against Johi and, to the knowledge of Johi,
but without any specific inquiry being made, against all other parties thereto
in accordance with its terms. Except as stated on Schedule 3.4 there exists no
material default under any Material Contract by Johi or to the knowledge of Johi
and Lightel, by any other party thereto, which will have a Material Adverse
Effect on Johi.
SECTION 4. [INTENTIONALLY OMITTED]
SECTION 5. [INTENTIONALLY OMITTED]
SECTION 6. [INTENTIONALLY OMITTED]
SECTION 7. INDEMNIFICATION; REMEDY.
7.1 SURVIVAL; RIGHT TO INDEMNIFICATION NOT AFFECTED BY KNOWLEDGE. All
representations and warranties, if any, in each Transaction Agreement will
survive the Closing for one (1) year. If Xxxxxxxx had actual knowledge that a
representation or warranty by ATL herein was not true and correct in all
material respects as of the date hereof, Xxxxxxxx will not have any
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right to indemnification, payment of loss or other remedy based on such
representation and warranty, but Xxxxxxxx' right to indemnification, payment
of loss or other remedy based on a representation or warranty will not be
affected by any investigation that Xxxxxxxx could have conducted or with
respect to any knowledge Xxxxxxxx may have been capable of having acquired at
any time, with respect to the accuracy or inaccuracy of or compliance with,
any such representation or warranty.
7.2 INDEMNIFICATION AND PAYMENT OF LOSS BY LIGHTEL. Lightel will
indemnify and hold harmless Xxxxxxxx and its officers, directors and
representatives (collectively, the "Xxxxxxxx Indemnified Persons") for, and will
pay to the Xxxxxxxx Indemnified Persons the amount of any loss, cost or expense
arising from or in connection with, except as specifically stated in the
Transaction Agreements:
(a) any material inaccuracy on the date hereof of any
representation or warranty made by Lightel in this Agreement or in any other
Transaction Agreement;
(b) any material breach by Lightel of any obligation of Lightel in
this Agreement or any other Transaction Agreement; or
(c) the Johi Agreements and the transactions contemplated thereby,
including any net increase in taxes or other charges imposed by any Governmental
Authority, payable by or assessed against Xxxxxxxx or Johi, that would not have
been owed by Xxxxxxxx if Xxxxxxxx had owned the Offered Shares directly,
including any withholding income tax or other tax in Brazil, and including from
any recharacterization of the transactions set forth in the Johi Agreements by
the authorities in Brazil, but excluding any such amounts arising from or in
connection with the operation of Johi, not contemplated by the Johi Agreements,
after the Conversion Closing.
7.3 INDEMNIFICATION AND PAYMENT OF LOSS BY ATL. ATL will indemnify and
hold harmless each Xxxxxxxx Indemnified Person for, and will pay to the Xxxxxxxx
Indemnified Persons the amount of any loss, cost or expense arising from or in
connection with:
(a) any material inaccuracy on the date hereof of any
representation or warranty made by ATL in this Agreement or any Ancillary
Agreement to which it is a party; or
(b) any material breach by ATL of any obligation of ATL in this
Agreement or any Ancillary Agreement to which it is a party.
7.4 INDEMNIFICATION AND PAYMENT OF LOSS BY XXXXXXXX. Xxxxxxxx will
indemnify and hold harmless ATL and Lightel and their officers, directors and
representatives (collectively, the "A/L Indemnified Persons", and together with
the Xxxxxxxx Indemnified Persons, the "Indemnified Persons") for, and will pay
to the A/L Indemnified Persons the amount of any loss, cost or expense arising
from or in connection with:
(a) any material inaccuracy on the date hereof of any
representation or warranty made by Xxxxxxxx in this Agreement or in any other
Transaction Agreement; or
-14-
16
(b) any material breach by Xxxxxxxx of any obligation of Xxxxxxxx
in this Agreement or any other Transaction Agreement.
7.5 REMEDIES NOT EXCLUSIVE. If ATL has not complied with the provisions
of Section 9, then Xxxxxxxx may seek specific performance thereof to the fullest
extent permitted by applicable Brazilian law, including in accordance with the
provisions of Paragraph 3, Article 118, Brazilian Law No. 6,404 of December 15,
1976, if applicable and the specific performance provisions contained in
Articles 641, 642 and 798 of the Brazilian Code of Civil Procedure. Nothing in
this Agreement or any Ancillary Agreement shall reduce or diminish in any
respect any rights or remedies including specific performance Xxxxxxxx may have
under any other agreement with respect to ATL or Lightel to which Xxxxxxxx is a
party to the extent consistent herewith.
7.6 PROCEDURE FOR INDEMNIFICATION --THIRD PARTY CLAIMS.
(a) Promptly after receipt by an Indemnified Person of notice of
the commencement of any proceeding against it, such Indemnified Person will, if
a claim is to be made against an indemnifying Person hereunder, give notice to
the indemnifying Person of the commencement of such claim and the fact that such
notice is being provided pursuant to this Section 7.6(a), but the failure to so
notify the indemnifying person will not relieve the indemnifying Person of any
liability that it may have to any Indemnified Person, except to the extent that
the indemnifying Person demonstrates that the defense of such action is
prejudiced by the Indemnified Person's failure to give such notice.
(b) If notice is given to an indemnifying Person of the
commencement of any proceeding pursuant to Section 7.6(a) and the indemnifying
Person does not, within twenty (20) days after the Indemnified Person's notice
has been received, give notice to the Indemnified Person of its election to
assume the defense of such proceeding, then the indemnifying Person will be
bound by any determination made in such proceeding or any compromise or
settlement effected by the Indemnified Person.
(c) If any proceeding referred to in this Section 7.6 is brought
against an Indemnified Person, the indemnifying Person may retain counsel of its
choice, reasonably acceptable to the Indemnified Person, to represent the
Indemnified Person and any others the indemnifying Person may reasonably
designate in connection with such proceeding and will pay the fees and
disbursements of such counsel with regard thereto. Upon request by the
indemnifying Person, the Indemnified Person agrees (or, if such Person is not a
party hereto, the relevant party hereto agrees to cause such person) to
cooperate with the indemnifying Person and its counsel in contesting any
proceeding which the indemnifying Person defends, or, if appropriate and related
to the claim in question, in making any counterclaim against the person who
brought the proceeding or any cross-complaint against any person. No proceeding
or related claim or demand may be settled without the consent of the
indemnifying Person. Notwithstanding the foregoing, if a proceeding involves a
tax claim, or if an Indemnified Person determines in good faith that there is a
reasonable probability that a proceeding may adversely affect it or its
affiliates other than as a result of monetary damages for which it would be
entitled to indemnification under this Agreement, then the Indemnified Person
may, by notice to the indemnifying Person, assume the exclusive right to defend,
compromise, or settle such proceeding, but the indemnifying Person will not be
bound by
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any determination of a proceeding so defended or any compromise or
settlement effected without its consent (which may not be unreasonably
withheld).
SECTION 8. NOTICES.
All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when
actually received, and may be (a) delivered by hand, (b) sent by telecopier
(with written confirmation of receipt) or (c) sent by an internationally
recognized overnight delivery service (receipt requested), in each case to the
appropriate addresses and telecopier numbers set forth below (or to such other
addresses and telecopier numbers as a party may designate by notice to the other
parties):
If to Xxxxxxxx or, after the Conversion Closing, Johi, to:
Xxxxxxxx International ATL Limited
Xxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Xx.
Facsimile No.: (000) 000-0000
If to Lightel or, before the Conversion Closing, Johi, to:
Xxxxxxx X.X. - Tecnologia Da Informacao
Avenue Comendador Xxxxxxxxxxx Xxxxxx 2689
Uberlandia - MG Brazil CEP 38402-288
Attention: LouAngela Bianchinni
Facsimile No.: (00-00) 000-0000
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois)
000 X. Xxxxxx Xxxxx, Xxxxx 0000
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxx
Facsimile No.: (000) 000-0000
and
If to ATL, to:
ATL-ALGAR Telecom Leste, X.X.
Xxx Xxxx Xxxxxxx, 00
0xx Xxxxx
Xxx xx Xxxxxxx, Xxxxxx
Attention: Xxxxx Xxxxxx Assis
Facsimile No.: (00-00) 000-0000
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SECTION 9. OBLIGATIONS FOLLOWING THE CLOSING.
(a) Not later than sixty (60) days from the Closing Date, ATL shall
report the indirect transfer of Offered Shares to Xxxxxxxx in full compliance
with Section 40, third paragraph, of the Concession Agreement applicable to ATL,
and shall otherwise take all action and file all notices with each Governmental
Authority in accordance with all Requirement of Laws applicable to ATL.
(b) Within ten (10) days following the Closing Date, ATL and
Lightel agree to assist Xxxxxxxx in applying with the Banco Central for the
issuance of a Certificado de Registro to evidence the Offered Shares as a
foreign investment of Xxxxxxxx so as to allow Xxxxxxxx the receipt of dividends,
proceeds of sale and other shares of ATL received by Xxxxxxxx by way of stock
dividends, share splits or replacement shares. ATL and Lightel agree to provide
the Banco Central with any information and/or document that the Banco Central
may request and to comply with any requirement the Banco Central may make so as
to issue the Certificado de Registro. ATL shall be liable for the payment of any
penalty or fine that might be imposed by the Banco Central or any other
Governmental Authority as a result of an event attributable to ATL in case of
its failure to comply with the terms set forth in the applicable legislation for
the application for registration of foreign investments in Brazil and the
fulfillment of any requirement made by the Banco Central for such purpose or any
other purpose. ATL and Lightel each shall use all reasonable efforts to assist
Xxxxxxxx to cause the Banco Central to issue the Certificado de Registro
evidencing the Offered Shares within sixty (60) days following the Closing Date.
Within five (5) business days following the receipt of such Certificado de
Registro by ATL, ATL agrees to send a copy thereof to Xxxxxxxx. In connection
with the above registration procedures, ATL will bear all administrative costs
and filing fees imposed by the Banco Central, and Xxxxxxx, Xxxx and Xxxxxxxx
will bear its own expenses (including attorney's fees) as provided in Section
11(a) hereof. Lightel will pay the withholding taxes specified in the letter
from Banco Central to Lightel, dated March 16, 1999, payable in respect of the
Johi Agreements as provided in the conversion approval by the Banco Central.
Concurrently with the Closing, Xxxxxxxx will submit the debt equity swap request
with respect to the Lightel intercompany note (which is to be assigned to
Xxxxxxxx pursuant to the Assignment Agreement) on FIRC Communication No. 28
Forms to Banco Central and promptly upon approval of the request by Banco
Central, Xxxxxxxx will effect the conversion thereunder.
SECTION 10. JURISDICTION.
(a) This Agreement may be enforced in the courts of the city of New
York, State of New York located in the Southern District of New York, United
States of America, or in the central courts of the city of Sao Paulo, State of
Sao Paulo, Brazil. Final judgment issued by any of such courts shall be
conclusive and may be enforced in the other courts referred to herein, by suit
on the judgment, a certified or exemplified copy of which shall be conclusive
evidence of the judgment, or in any other manner provided by law.
(b) By the execution and delivery of this Agreement, each party
irrevocably submits to the jurisdiction of any such court in any action, suit or
proceeding arising out of or relating to this Agreement, and each of such
parties designates, appoints and empowers CT
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19
Corporation System, Inc. with an office at 0000 Xxxxxxxx, Xxx Xxxx, XX 00000,
Xxxxxx Xxxxxx of America as its authorized agent to receive for and on its
behalf service of any summons, complaint or other legal process in any such
action, suit or proceeding that another party elects to bring in the State of
New York. Notwithstanding the foregoing, each party hereto reserves the right
to make personal service on each other party of any summons, complaint or
other legal process in any such action, suit or proceeding.
(c) As long as the this Ancillary Agreements remain in force, each
party hereto shall maintain a duly appointed agent for the service of summons,
complaint and other legal process in New York, New York, United States of
America, for purposes of any legal action, suit or proceeding another party may
bring in the courts of the City of New York in respect of this Agreement to
which any of the above parties is a party. Each party shall keep each other
party advised of the identity and location of such agent.
(d) Each party hereto also irrevocably consents, if for any reason
such party's authorized agent for service of process of summons, complaint and
other legal process in any such action, suit or proceeding is not present in New
York, New York, to service of such papers being made out of those courts by
mailing copies of the papers by registered United States air mail, postage
prepaid, to the relevant party at its address specified in the opening of this
Agreement. In such a case, the relevant party shall also send by telex or
facsimile, or have sent by telex or facsimile, a copy of the papers to such
party.
(e) Service in the manner provided in Subsection (c) above in any
such action, suit or proceeding shall be deemed personal service, shall be
accepted by each party hereto, as such and shall be valid and binding upon the
relevant party for all purposes of any such action, suit or proceeding.
(f) Each party hereto irrevocably waives to the fullest extent
permitted by applicable law:
(i) any objection which it may have now or in the future to
the laying of the venue of any such action, suit or proceedings in any court
referred to in this Section;
(ii) any claim that any such action, suit or proceeding has
been brought in an inconvenient forum;
(iii) its right of removal of any matter commenced by a party
under this Section in the courts of the State of New York to any court of the
United States of America; and
(iv) any and all rights to demand a trial be jury in any such
action, suit or proceeding brought against a party by another party.
(g) To the extent that any party hereto may be entitled in any
jurisdiction referred to in Subsection (a) above to claim for itself or its
assets immunity in respect of its obligations under this Agreement or the
Ancillary Agreements from any suit, execution, attachment (whether provisional
or final, in aid of execution, before judgment or otherwise) or other legal
process or to the extent that in any such jurisdictions such immunity (whether
or not claimed) may be attributed to it or its assets, such party irrevocably
agrees not to claim and
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irrevocably waives such immunity to the fullest extent permitted by the laws
of any of such jurisdictions.
(h) To the extent that a party hereto may, in any suit, action or
proceeding brought in any of the courts referred to in Subsection (a) above
arising out of or in connection with this Agreement be entitled to the benefit
of any provision of law requiring another party in such suit, action or
proceeding to post security for the costs of any of such parties (cautio
judicatum solvi), or to post a bond or to take similar action, each party hereby
irrevocably waives such benefit, in each case to the fullest extent now or in
the future permitted under the laws of the State of New York, United States of
America or Brazil.
(i) If a party hereto brings any legal action, suit or proceeding
arising out of or relating to this Agreement, in the central courts of the city
of Sao Paulo, State of Sao Paulo, Brazil, as referred to in Subsection (a), any
party hereto shall be entitled to claim in such Brazilian court the specific
performance of the obligations assumed by the other parties hereunder, or any
portion hereof or thereof, pursuant to the relevant articles of the Brazilian
Code of Civil Procedure, including, but not limited to, Articles 461, 632, 639,
as well as pursuant to Article 118 of Brazilian Law No. 6,404, enacted on
December 15, 1976.
SECTION 11. MISCELLANEOUS.
(a) Each party to this Agreement will bear its respective expenses
incurred in connection with the preparation, negotiation, execution, and
performance of the Transaction Agreements and the transactions contemplated
thereby, including all fees and expenses of agents, representatives, counsel,
and accountants.
(b) This Agreement supersedes all prior agreements between the parties
with respect to its subject matter other than the other Transaction Agreements.
This Agreement may not be amended except by a written agreement of the parties.
Neither the failure nor any delay by any party in exercising any right, power,
or privilege under this Agreement or the agreements or documents referred to in
this Agreement will operate as a waiver of such right, power, or privilege, and
no single or partial exercise of any such right, power, or privilege will
preclude any other or further exercise of such right, power, or privilege or the
exercise of any other right, power, or privilege. To the maximum extent
permitted by applicable law, (a) no claim or right arising out of the
Transaction Agreements can be discharged by one party, in whole or in part, by a
waiver or renunciation of such claim or right unless in writing signed by such
party; (b) no waiver that may be given by a party will be applicable except in
the specific instance for which it is given; and (c) no notice to or demand on
one party will be deemed to be a waiver of any obligation of such party or of
the right of the party giving such notice or demand to take further action
without notice or demand as provided in this Agreement or the documents referred
to in this Agreement.
(c) Each party to this Agreement agrees to execute, acknowledge,
deliver file and record such further certificates, amendments, instruments or
documents, and to do all such other acts and things, as may be required by law
or as may be necessary or advisable to carry out the intent and purpose of this
Agreement.
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(d) All headings and captions contained in this Agreement are inserted
for convenience only and shall not be deemed part of this Agreement.
(e) This Agreement shall be governed and construed in accordance with
the laws of the State of New York.
(f) This Agreement may be signed in one or more counterpart copies,
each of which shall constitute an original and all of which, when taken
together, shall constitute one agreement.
(g) For the purposes of Article 9 of Decree-Law No. 4657 dated
September 4, 1942, the transactions contemplated hereby have been proposed to
Lightel, ATL and Johi by Xxxxxxxx.
(h) Every provision of this Agreement is intended to be several. The
invalidity and unenforceability of any particular provision of this Agreement in
any jurisdiction shall not affect the other provisions hereof, and this
Agreement shall be construed in all respects as if such invalid or unenforceable
provision were omitted.
(i) This Agreement shall be binding upon the parties hereto, their
respective successors, executors, administrators, legal representatives, heirs
and legal assigns and shall inure to the benefit of the parties hereto and,
except as otherwise provided herein, their respective successors, executors,
administrators, legal representatives, heirs and legal assigns. No person other
than the parties hereto and their respective successors, executors,
administrators, legal representatives, heirs and legal assigns, shall have any
rights or claims under this Agreement.
(j) This Agreement constitutes the entire agreement of the parties
hereto on the subject matter hereof, and can only be amended by a written
instrument signed by all of the parties hereto. No party may assign any of its
rights under this Agreement without the prior written consent of the other
parties. Nothing expressed or referred to in this Agreement will be construed to
give any person, other than the parties hereto, any legal or equitable right,
remedy, or claim under or with respect to this Agreement or any provision of
this Agreement. This Agreement and all of its provisions and conditions are for
the sole and exclusive benefit of the parties to this Agreement and their
successors and assigns.
(k) The parties will use their best efforts to coordinate and harmonize
any public announcement or similar publicity with respect to the Transaction
Agreements or the transactions contemplated thereby. The terms hereof shall be
governed by the confidentiality and similar terms contained in the Shareholders'
Agreement, dated as of November 12, 1998, as amended, among the Shareholders of
ATL.
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IN WITNESS WHEREOF, the parties hereto, acting through their duly
authorized representatives, have caused this Agreement to be duly executed as of
the date first above written.
XXXXXXX X.X.- TECNOLOGIA DA
INFORMACAO
/s/ [ILLEGIBLE]
-----------------------------------
Name:
On the ___ day of March, in the year nineteen hundred and ninety nine,
before me personally came ______________________________, ___________ Xxxxxxx
X.X. - Tecnologia Da Informacao, who signed her/his name thereto by order of the
Board of Directors of said corporation.
-------------------------------
Notary
WITNESSES:
------------------------------
Name:
CPF:
------------------------------
Name:
CPF:
One the ___ day of March, in the year nineteen hundred and
ninety nine, before me personally came ______________________ to me known to be
the individual described in, and who witnessed the execution of the foregoing
instrument.
-------------------------------
Notary
One the ___ day of March, in the year nineteen hundred and ninety nine,
before me personally came ______________________ to me known to be the
individual described in, and who witnessed the execution of the foregoing
instrument.
-------------------------------
Notary
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IN WITNESS WHEREOF, the parties hereto, acting through their duly
authorized representatives, have caused this Agreement to be duly executed as of
the date first above written.
XXXXXXXX INTERNATIONAL ATL LIMITED
/s/ XXXX X. XXXXXXXXXX
--------------------------------
Name: Xxxx X. Xxxxxxxxxx, Xx.
Title: President
On the 24TH day of March, in the year nineteen hundred and ninety nine,
before me personally came Xxxx X. Xxxxxxxxxx, President of Xxxxxxxx
International ATL Limited, who signed his name thereto by order of the Board
of Directors of said corporation.
/s/ XXXXXX XXXXXX
------------------------------
Notary
My commission expires June 17, 2001
WITNESSES:
/s/ XXXXX X.XXXXXXX
------------------------------
Name:
CPF:
/s/ XXXXX X. XXXXXXXXXX
------------------------------
Name:
CPF:
On the 24th day of March, in the year nineteen hundred and
ninety nine, before me personally came Xxxxx X. Xxxxxxx to me known to be
the individual described in, and who witnessed the execution of the foregoing
instrument.
/s/ XXXXXX XXXXXX
----------------------------
Notary
One the 24th day of March, in the year nineteen hundred and ninety nine,
before me personally came Xxxxx X. Xxxxxxxxxx to me known to be the
individual described in, and who witnessed the execution of the foregoing
instrument.
/s/ XXXXXX XXXXXX
----------------------------
Notary
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IN WITNESS WHEREOF, the parties hereto, acting through their duly
authorized representatives, have caused this Agreement to be duly executed as of
the date first above written.
JOHI REPRESENTACOES LTDA
[ILLEGIBLE]
---------------------------------------
Name:
Title:
On the ____ day of March, in the year nineteen hundred and ninety nine,
before me personally came ______________________________, ___________ of Johi
Representacoes Ltda., who signed her/his name thereto by order of the Board of
Directors of said corporation.
---------------------------------
Notary
WITNESSES:
------------------------------
Name:
CPF:
------------------------------
Name:
CPF:
One the ___ day of March, in the year nineteen hundred and
ninety nine, before me personally came ______________________ to me known to be
the individual described in, and who witnessed the execution of the foregoing
instrument.
----------------------------
Notary
One the ___ day of March, in the year nineteen hundred and ninety nine,
before me personally came ______________________ to me known to be the
individual described in, and who witnessed the execution of the foregoing
instrument.
----------------------------
Notary
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IN WITNESS WHEREOF, the parties hereto, acting through their duly
authorized representatives, have caused this Agreement to be duly executed as of
the date first above written.
ATL-ALGAR TELECOM LESTE S.A.
/s/ [ILLEGIBLE]
--------------------------------
Name:
Title: Attorney-in-fact
On the ___ day of March, in the year nineteen hundred and ninety nine,
before me personally came ______________________________, ___________ of
ATL-ALGAR Telecom Leste S.A., who signed her/his name thereto by order of the
Board of Directors of said corporation.
----------------------------
Notary
WITNESSES:
/s/ [ILLEGIBLE]
------------------------------
Name:
CPF:
/s/ [ILLEGIBLE]
------------------------------
Name:
CPF:
One the ___ day of March, in the year nineteen hundred and
ninety nine, before me personally came ______________________ to me known to be
the individual described in, and who witnessed the execution of the foregoing
instrument.
--------------------------
Notary
One the ___ day of March, in the year nineteen hundred and ninety nine,
before me personally came ______________________ to me known to be the
individual described in, and who witnessed the execution of the foregoing
instrument.
-------------------------
Notary
-24-
26
Schedule 3.1(a)
DUE ORGANIZATION: DUE QUALIFICATION: REQUISITE POWER
----------------------------------------------------
As of the date of this Share Purchase Agreement, the Company is in compliance
with all material provisions of its By-laws except with respect to the following
matters:
1. The Company has obtained importation credit in the amount of R$628,688.28
from International Importacao e Exportacao Ltda, by a purchase order for
certain equipment, signed on June 26, 1998 by Xxxxx Xxxxx Xxxxx, Chief
Financial Officer of the Company. According to Article 20 of the Company's
By-laws, two officers' signatures were required.
The Company has all governmental licenses, permits and other approvals necessary
to operate its properties and carry on its business except for those licenses
and approvals described on Schedule 3.1(d).
27
Schedule 3.1(d)
AUTHORIZATIONS AND APPROVALS NOT OBTAINED
-----------------------------------------
1. Cell Site Anatel Licenses: See attached Appendix 1 of cell sites for which
Anatel licenses are pending approval.
2. Cell Site Building Permits: Construction/installation/operation permits
("alvaras") were not obtained for some cell sites (see Appendix I hereto
for list of ell sites). These alvaras will not be obtained because the
construction phase of the cell sites has already terminated.
3. Cell Site Safety and Occupancy Permits: These permits ("habite-se") are
pending for all the cell sites (see attached Appendix 1 for list of cell
sites).
4. License from the Ministry of Aeronautics ("COMAR") for all cell sites. This
license is required to show that the signals and frequencies produced by
the cell sites do not interfere with course control devices of airplanes.
Currently, none of the cell sites are licensed (see Appendix 1).
5. Central Bank: The Registration Certificates of the foreign capital held by
Xxxxxxxx International Telecom Limited ("WITL"). Xxxxxxxx International ATL
Limited (as transferee of WITL's entire interest in the Company) and
SKTI-US, LLC have not yet been issued.
6. Network Interconnection: The following executed Network Interconnection
Agreements, by their respective terms, are not deemed to be in effect until
ratification ("homologacao") of the agreements has been granted by ANATEL.
Applications for such ratifications have been submitted and are pending
before ANATEL. Under its own regulations, ANATEL cannot interfere with or
impede interconnection of its concessionaires with networks necessary for
the concessionaires' operations; therefore, the parties are acting under
the agreements despite ANATEL'S delay in formally ratifying the agreements.
a. Network Interconnection Agreement with Empresa Brasileira de
Telcommunicacoes S.A. - Embratel. Aug. 16, 1998.
b. Network Interconnection Agreement with Telerj Celular S/A, Aug.
28, 1998
c. Network Interconnection Agreement with Telest Celular S/A, Aug.
28, 1998
d. Network Interconnection Agreement with Telerj S/A, Aug. 11, 1998
e. Network Interconnection Agreement with Telest S/A, Sept. 13, 1998.
28
7. INPI - The Company is party to the following agreements which are pending
registration at the Industrial Property Institute of Brazil ("INPI"). INPI
registration is necessary to remit royalties abroad and to deduct the
royalty payments as an expense for tax purposes.
a. Software License and Services Agreement with Amdocs(UK) Limited,
dated June 12, 1998.
b. Technology Support Agreement among SKTI, LLC, the Company, Xxxxxxx
X.X.- Tecnologia da Informacao and Xxxxxxxx International Telecom
Limited, dated March 26, 1998.
29
Schedule 3.1 (n)
MATERIAL CONTRACTS
------------------
I. Material Contracts of ATL-Cayman International:
As of the date of the Share Purchase Agreement, the Borrower is not party to
any Material Contracts except for the Loan Documents to which it is party.
II. Material Contracts of ATL-Algar Telecom Leste S.A.
A. As of the date of the Share Purchase Agreement, the Company is not a party
to any Material Contract except for the Loan Documents to which it is party and
the following agreements:
1. Concession Agreement between the Company and ANATEL, dated April 1,
1998, for a term of fifteen (15) years from date of agreement,
renewable for equal periods. Governs the exercise by the Company of
its concession rights to operate a cellular telephone service in Area
3 of the concession areas created by ANATEL in the States of Xxx xx
Xxxxxxx xxx Xxxxxxxx Xxxxx.
0. Technology Support Agreement between the Company, SKTI,LLC, and, as
intervening parties, Xxxxxxx X.X. - Tecnologia da Informacao, and
Xxxxxxxx International Telecom Limited, dated March 26, 1998, for a
term of five (5) years from date of agreement. Governs the supply of
technology by SKTI,LLC to the company.
3. Supply and Implementation Agreement between the Company and Ericsson
Telecomunicacoes S.A., dated September 4, 1998, for a term of five (5)
years from date of agreement. Governs the supply by Ericsson
Telecomunicacoes S.A. of a cellular system to the Company for the
states of Xxx xx Xxxxxxx xxx Xxxxxxxx Xxxxx.
0. Services Supply Contract between the Company and Ericsson
Telecomunicacoes S.A., dated September 4, 1998, for a term of five
(5) years from date of agreement. Governs the supply by Ericsson
Telecomunicacoes S.A. of technical assistance to the Company in
relation to the technology supplied under the agreement in item 3.
5. Network Operation and Maintenance Services Agreement between the
Company and Ericsson Telecomunicacoes S.A., dated September 4, 1998,
for a term of 24 months from the date of the agreement, automatically
extended for periods of a year each. Governs the supply by Ericsson
Telecomunicacoes S.A. to the Company of operation and maintenance
services related to its cellular system supplied under the agreement
described in item 3.
30
6. Site Acquisition Agreement between the Company and Ericsson
Telecomunicacoes S.A., dated September 4, 1998, for a term equal to
that of the agreement described in item 3. Governs Ericsson
Telecomunicacoes S.A.'s providing services of negotiating cell site
leases and administering all technical requirements for the design of
such sites.
7. Software License and Services Agreement between the Company and
Amdocs, dated June 12, 1998, for a term of ten (10) years from date of
agreement. Governs the granting by Amdocs to the Company of a software
license for a billing system and the supply by Amdocs to the Company
of installation, operations and maintenance services related to such
system.
8. R/3 Software License between the Company and SAP Comercio e
Representacoes Ltda, dated July 9, 1998, for an undefined term.
Governs the license of software by SAP to the Company for the
Company's financial and accounting system.
9. Technical Consulting Services Agreement between the Company and SAP
Comercio e Representacoes Ltda, dated July 9, 1998, for an undefined
term. Governs the provision by SAP to the Company of technical
services related to the operation of the system under the agreement
described in item 9 above.
10. Supply of Equipment and Services Agreement between the Company and
Hewlett-Packard Brasil S/A, dated August 20, 1998, for an undefined
term (agreement makes reference to a term in "Annex I" which does not
contain any provision regarding term). Governs the supply of and
technical and maintenance services and related equipment related to
the majority of the personal computers in the Company's offices.
11. Network Interconnection Agreement between the Company and Empresa
Brasileira de Telecomunicacoes S.A. - Embratel, dated July 16, 1998,
for a term to last until either party's concession is terminated.
Governs the Company's interconnection and access to a cellular
telephone network.
12. Network Interconnection Agreement between the Company and Telerj
Celular S/A (with Tele Sudeste Celular Participacoes S.A. signing as
intervening party), dated July 28, 1998, for a term to last until
either party's concession is terminated. Governs the Company's
interconnection and access to a cellular telephone network.
13. Network Interconnection Agreement between the Company and Telest
Celular S/A (with Tele Sudeste Celular Participacoes S.A. signing as
intervening party), dated July 28, 1998, for a term to last until
either party's concession is
31
terminated. Governs the Company's interconnection and access to a cellular
telephone network.
14. Network Interconnection Agreement between the Company and Telerj S/A (with
Tele Norte Leste Participacoes S.A. signing as intervening party), dated
August 11, 1998, for a term to last until either party's concession is
terminated. Governs the Company's interconnection and access to a cellular
telephone network.
15. Network Interconnection Agreement between the Company and Telest S/A (with
Tele Norte Leste Participacoes S.A. signing as intervening party), dated
August 13, 1998, for a term to last until either party's concession is
terminated. Governs the Company's interconnection and access to a cellular
telephone network.
16. Infrastructure Sharing Agreement between the Company and Embratel S.A.,
dated November 3, 1998, for a term of three (3) years as from the date of
the agreement. Governs the parties' mutual use of certain parts of their
respective cellular telephone network equipment and networks.
17. Clearinghouse Services Agreement between the Company and Embratel, S.A.,
dated July 28, 1998, for a term of three (3) years form the date of the
agreement. Governs the centralization and processing of charges for the
Company's use of different operators' cellular networks.
18. Services Agreement between the Company and Xxxxxxxx Consulting do Brasil
Ltda., dated August 13, 1998, for a term from June 1, 1998 to February 28,
1999. Governs the provision of customer care and billing services by
Xxxxxxxx to the Company.
19. Loan Agreement between the Company and Lightel S/A - Tecnologia da
Informacao, dated April 1, 1998, for a loan from Lightel up to the principal
amount of R$50,000,000.00 (fifty million reals), and all amendments
thereto, dated September, October, November and December, 1998 (providing
for interest rate readjustment). This agreement provided for payment to be
due on January 27, 1999. However, on January 27, 1999, the outstanding
amount due was consolidated with amounts due under a verbal loan
arrangement, which has no specified term or payment date, with Algar S/A
Empreendimentos e Participacoes. See the amount corresponding to "Algar" on
Schedule 3.9 for the consolidated outstanding debt related to this
agreement.
20. Agreement for Equipment Purchase and Supply of Consulting and
Installation Services, and Software License, between the Company and Lucent
Technologies Brasil Ltda., dated June 30, 1998, for an undefined term.
Governs the license of software, provision of equipment, and consulting and
installation service by Lucent to the Company.
32
21. Term of Participation ("Termo de Ingresso") in the Cooperative
Arrangement ("Convenio") and in the Agreement for Use of Roaming
between the Company and Telerj Celular S/A, dated October 16, 1998, for
the same term as the Convenio (which is three (3) years from March 25,
1998, automatically renewable for equal periods of one (1) year).
Permits the Company to enter the cooperative arrangements for roaming
among other telephone networks.
22. "Internet IP Direct," Access and Dedicated Line Services Agreement
entered into with Empresa Brasileira de Telecomunicacoes S.A. -
Embratel, dated July 3, 1998, for an undefined term. Governs the use by
the Company of an exclusive telephone line for internet access.
B. Exceptions to due execution of Material Contracts
1. To the knowledge of the Company, all of the agreements under Section
II.A have been duly executed by all parties thereto, except for
agreement (11), which is missing the signature of Hewlett-Packard
Brasil S/A.
2. In addition, the Company is currently using and paying for exclusive
telephone line service (for internet access) with Telecomunicacoes do
Estado do Espirito Santo S.A. e Telecomunicacoes do Estado do Rio de
Janeiro S.A., although written agreements with such parties are still
being negotiated.
C. Exceptions to Enforceability
1. The following agreements under Section II.A above have not been signed
by two witnesses: (7), (8), (11), Exhibit 7 to agreement (13)
(Confidentiality Agreement), Exhibit 7 to agreement (16)
(Confidentiality Agreement), and (17). Under Brazilian law, any
agreement, with or without two witness' signatures, will be fully
enforceable extra-judicially and in ordinary judicial proceedings.
However, if the agreement provides for a certain price or sum to be
paid thereunder and a party thereto wishes to enforce such payment
provision, the agreement will not be eligible for enforcement through
summary proceedings unless it contains two witnesses' signatures.
2. The following documents are lacking formalities for enforcement under
Brazilian law: all exhibits to agreement (11) (neither dated, nor
initialed) and Exhibit 7 to agreement (15) (undated).
D. Material Contract Defaults
33
Schedule 3.4(a)
DUE ORGANIZATION; DUE QUALIFICATION; REQUISITE POWER
----------------------------------------------------
As of the date hereof Johi Representacoes Ltda has all governmental licenses,
permits and other approvals necessary to own or lease and operate its properties
and to carry on its business as now conducted and as proposed to be conducted.
34
Schedule 3.4(d)
NO AUTHORIZATIONS OR APPROVALS
------------------------------
As of the date hereof, no authorization or approval, consent or other Action by,
and no notice to, recordation with or filing with any governmental Authority or
any other Person is required in connection with the due execution, delivery,
performance, recordation, filing, legality, validity, admissibility in evidence
or enforceability of the Johi Agreements (other than the Johi Amendment which
shall be registered within the board of trade), as well as the Power of Attorney
thereby.
35
Schedule 3.4(j)
MATERIAL CONTRACTS
------------------
As of the date hereof, Johi Representacoes Ltda is not party to any Material
Contract, except for the Transaction Agreements to which it is party.
36
The company is aware of no material default under any of the Material Contracts
except for agreements (3) and (7) under Section II.A. above. Under Section 15.I
of agreement (3), Ericsson Telecomunicacoes S.A. ("Ericsson") agreed to deliver
5 mobile switch centers, 1 home location registry (client profile database) and
245 cell sites, all fully operational, by December 15, 1998. As of December 15,
1998, Ericsson had delivered only 2 mobile switch centers, one home location
registry and 14 cell sites. Under Section 2 of agreement (7), Ericsson agreed to
submit to ATL-Algar for review, by September 20, 1998, lease agreements related
to the cell sites and mobile switch centers to be delivered under agreement (3).
As of December 15, 1998, Ericsson had submitted only 90 lease agreements to
ATL-Algar for review.
