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EXHIBIT 10.35
STOCK PURCHASE AGREEMENT
AGREEMENT (this "Agreement") as of January 21, 1997, among ABC
Industria e Comercio S.A. - ABC INCO, a Brazilian corporation ("Seller"),
Xxxxxxx X.X. Tecnologia da Informacao, a Brazilian closed corporation
("Company"), Xxxxx X.X. - Empreendimentos e Participacoes, a Brazilian
corporation ("Sponsor"), and Xxxxxxxx International Telecom Limited, a Cayman
Islands company ("Xxxxxxxx").
WHEREAS, Company, Sponsor and Xxxxxxxx have concurrently herewith
entered into the Subscription and Shareholders Agreement pursuant to which
Xxxxxxxx shall subscribe to twenty-one million, nine hundred ninety-three
thousand, twenty-nine (21,993,029) Shares; and
WHEREAS, as part of such transaction, Seller shall sell to Xxxxxxxx
thirty-one million, two hundred five thousand, three hundred eighty-six
(31,205,386) Shares pursuant to this Agreement; and
WHEREAS, on the basis of the representations and warranties and subject
to the conditions set forth herein, Seller desires to sell to Xxxxxxxx and
Xxxxxxxx desires to purchase from Seller the Shares.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
Section 1.1 Definitions. Unless otherwise defined herein, the
capitalized terms used herein shall have the meanings given them in the
Subscription and Shareholders Agreement ("Subscription and Shareholders
Agreement") dated January 21, 1997 among Xxxxxxx X.X. Tecnologia da Informacao,
Xxxxx X.X. - Empreendimentos e Participacoes and Xxxxxxxx International Telecom
Limited.
Section 1.2 Interpretation.
(a) headings and underlinings are for convenience only and do not
affect the interpretation of this Agreement;
(b) words importing the singular include the plural and vice versa;
(c) words importing a gender include any gender;
(d) an expression importing a natural person includes any company,
partnership, trust, joint venture, association, corporation or other body
corporate and any Authority;
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(e) a reference to a (i) Section, Article or party is a reference to
that Section or Article of, or that party, to this Agreement; and (ii) Exhibit,
Annex or Schedule is a reference to that Exhibit, Annex or Schedule to the
Subscription and Shareholders Agreement;
(f) a reference to a document includes an amendment or supplement to,
or replacement or novation of, that document but disregarding any amendment,
supplement, replacement or novation made in breach of this Agreement;
(g) a reference to a party to any document includes that party's
successors and permitted assigns.
(h) a reference to an agreement includes an undertaking, deed,
agreement or legally enforceable arrangement or undertaking in writing; and
(i) a reference to a document includes any agreement in writing, or any
certificate, notices instrument or other document of any kind.
ARTICLE 2
PURCHASE AND SALE; PROJECT
Section 2.1 Purchase and Sale.
(a) Subject to the terms and conditions set forth herein, on the
Closing, Xxxxxxxx shall purchase from Seller and Seller shall sell to Xxxxxxxx
thirty-one million, two hundred five thousand, three hundred eighty-six
(31,205,386) Shares, constituting eleven and seventy-three hundredths percent
(11.73%) of all of the issued and outstanding Shares. The Shares to be acquired
by Xxxxxxxx shall consist of Xxxxxxxx Common Shares and Xxxxxxxx Preferred
Shares. For the purpose of this Agreement, "Xxxxxxxx Common Shares" means three
million, seven hundred fifty-five thousand, three hundred one (3,755,301) voting
common Shares to be acquired by Xxxxxxxx under this Agreement, and representing,
after giving effect to the Xxxxxxxx Subscription, the provisions of Exhibit 14.2
of the Subscription and Shareholders Agreement, and the acquisition of such
Shares under this Agreement, five percent (5%) of the total issued and
outstanding Common Shares of the Company. For the purpose of this Agreement,
"Xxxxxxxx Preferred Shares" means twenty-seven million, four hundred fifty
thousand, eighty-five (27,450,085) non-voting preferred Shares to be acquired by
Xxxxxxxx under this Agreement, and representing, after giving effect to the
Xxxxxxxx Subscription, the provisions of Exhibit 14.2 of the Subscription and
Shareholders Agreement, and the acquisition of such Shares under this Agreement,
seventy-two and eighty-two hundredths percent (72.82%) of the total issued and
outstanding preferred Shares of the Company. The Xxxxxxxx Preferred Shares
shall be of the same class as and having the same rights as all other existing
or future preferred Shares of the Company including, without limitation,
preferred Shares of the Company held by the IFC.
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(b) The purchase price for the Shares shall be twenty-eight million,
one hundred fifty-six thousand, four hundred eight dollars and fifty-six cents
(US$28,156,408.56), payable at the Closing.
Section 2.2 The Project. Seller covenants that the Project to be funded
shall be as described in Article 2 of the Subscription and Shareholders
Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Section 3.1 Representations and Warranties of the Company. The Company
represents and warrants that:
(a) it is a corporation duly incorporated and validly existing under
the laws of Brazil and has the corporate power to own its assets, conduct its
business as presently conducted and to enter into and perform its obligations
under this Agreement, each Transaction Document to which it is a party, and any
agreements in implementation hereof and thereof. Exhibit 3.1(a) is a copy of the
By-laws of the Company and each of its Subsidiaries, together with all
amendments to date, which are duly registered with the competent commercial
registry;
(b) it has full power and authority to undertake the obligations under
this Agreement, each Transaction Document to which it is a party, and any
agreements in implementation hereof and thereof, to execute and deliver this
Agreement and each such Transaction Document, to perform its obligations
hereunder and thereunder and observe the terms and provisions mentioned herein
and therein;
(c) the authorized share capital of the Company is three hundred
million one hundred and twenty thousand (300,120,000) common and preferred
registered Shares of no par value of which two hundred million (200,000,000)
common Shares and twelve million seven hundred ninety-three thousand six hundred
fifty-eight (12,793,658) preferred Shares have been issued and fully paid, and
no options, warrants, rights or other capital stock of the Company are
outstanding. Set forth in Schedule 3.1(c) is the authorized and issued share
capital of each of the Subsidiaries of the Company, which issued share capital
is fully paid;
(d) the Xxxxxxxx Shares, after giving effect to the Xxxxxxxx
Subscription under the Subscription and Shareholders Agreement, the provisions
of Side Letters 1, 2 and 3 set forth in Exhibit 14.2, and the acquisition of the
Xxxxxxxx Shares hereunder, shall represent twenty percent (20%) of the total
issued and outstanding Shares of the Company. Except as set forth in Schedule
3.1(d), the Xxxxxxxx Shares shall be available at the Closing for (i)
subscription by Xxxxxxxx under the Xxxxxxxx Subscription; (ii) acquisition by
Xxxxxxxx under this Agreement; and (iii) issuance to Xxxxxxxx under the
provisions of Side Letters 1, 2 and
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3 set forth in Exhibit 14.2, and shall be free from any preemptive rights,
Liens, charges or encumbrances whatsoever;
(e) the execution and delivery of each Transaction Document to which it
is a party, including this Agreement, and the performance of the obligations set
forth herein and therein, have been duly authorized by all necessary action on
its part and constitutes valid and legally binding obligations of the Company,
enforceable in accordance with their terms;
(f) the execution and delivery of any Transaction Document to which it
is a party, including this Agreement, and the performance of its obligations
hereunder and thereunder shall not conflict with or result in a breach of any of
the terms, conditions or provisions of, or constitute a default or require any
consent under (i) any provision of its Estatuto Social; (ii) any provision of
any applicable law, regulation, rule, decree, judgment or order to which it is
subject; or (iii) any indenture, mortgage, agreement or other instrument or
arrangement to which the Company is a party or by which it is bound;
(g) all dealings between any company of the Algar Group, including the
Company and any of the Sponsor's Subsidiaries and Affiliates, on the one hand,
and any company of the Company Group, on the other hand, shall be remain on
normal arm's-length terms as if between unrelated parties; all such transactions
which occurred during 1996 are summarized in Schedule 3.1(g);
(h) neither the Company nor any of its property enjoys any right of
immunity from set-off, suit or execution in respect of its assets or its
obligations under any Transaction Document;
(i) all governmental, corporate, shareholders' and creditors'
authorizations, consents, approvals, waivers and licenses required for the
execution and delivery of this Agreement and the performance of its obligations
hereunder have been duly obtained or granted and are in full force and effect;
(j) it has made the notifications to the Brazilian competent Authority,
which are required to be made pursuant to applicable law (and has caused its
Subsidiaries engaged in the Telecommunications and Information Technology Sector
to also notify the Brazilian competent Authority) of any and all changes in
their respective shareholdings as a result of each corporate restructuring which
has been undertaken by the Company and its Subsidiaries since the date of the
organization of the Company and each of its Subsidiaries to date;
(k) except as set forth in Schedule 3.1(k), it has complied with and is
in compliance in all material respects with all applicable laws, regulations,
ordinances, rules, orders, judgments, decrees and awards of any Authority in
connection with its assets, properties and business. It has not received any
notice of any failure to comply with, nor
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are there any circumstances which indicate that it is in violation of
any such laws, regulations, ordinances, orders, judgments or decrees;
(l) it has not, nor has any of its directors, officers, managers,
employees, agents or representatives directly or indirectly, offered, paid or
promised to pay, or authorized the payment of any money or other thing of value
(including any fee, gift, sample, travel expense, or entertainment with a value
in excess of US$250 or the equivalent thereof in any currency) to any person who
is an official, officer, agent, employee or representative of any government or
instrumentality thereof or of any government-owned or non-government owned
existing or prospective customer, to any political party or official thereof, to
any candidate for political or political party office, or to any other person or
Authority while knowing or having reason to believe that all or any portion of
such money or thing of value would be offered, given or promised, directly or
indirectly, to any such official, officer, agent, employee, representative,
political party, political party official or candidate, to obtain or retain
business. All payments made by the Company to third parties are made by check
mailed or otherwise delivered to the principal place of business of a party; or
by wire transfer to a bank located in the same jurisdiction as such place of
business of a party, in all cases in the name of such third party;
(m) each transaction of the Company has been properly and accurately
recorded on the books and records of the Company, and each document (including
any contract, invoice or receipt) on which entries in the Company's books and
records are based is complete and accurate in all respects. The Company has
maintained a system of internal accounting controls adequate to insure that each
maintains no off-the-books accounts and the assets of the Company are used only
in accordance with the directives of the Company's management;
(n) the Company has at all times during the previous five-year period
complied with the export control laws of the United States with respect to
products, services and technology obtained from the United States, and with
those of any other jurisdictions, to the extent such U.S. and other laws were or
are applicable. Except as set forth in Schedule 3.1(n) no product sold or
service performed by the Company in the previous five-year period has been sold
or performed, directly or indirectly, to or for the benefit of, nor has the
Company had any business dealings whatsoever with, any person of or in Cuba,
Iran, Iraq, Libya, Serbia, Montenegro or Serbian-controlled portions of Croatia
or Bosnia, or North Korea, or any person owned or controlled by any of the
foregoing (including without limitation "specially designated nationals").
Except as set forth on Schedule 3.1(n), no product sold or service performed by
the Company during the previous five-year period has contained more than ten
percent (10%) U.S. content by value or was manufactured or provided using any
U.S. origin technical data;
(o) except as set forth on Schedule 3.1(o), during the previous
five-year period, no product has been sold or service performed by the Company
to or for the benefit of
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customers in Bahrain, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia,
Sudan, Syria, United Arab Emirates, or Yemen; and
(p) the representations referred to in Subsections (a) through (o)
above are also made on behalf of each Subsidiary and Affiliate of the Company
and therefore applicable to each of such Subsidiaries and Affiliates "mutatis
mutandis?.
Section 3.2 Representations and Warranties of the Sponsor. The Sponsor
hereby represents and warrants to Xxxxxxxx that:
(a) it is a corporation duly incorporated and validly existing under
the laws of Brazil and has the corporate power to own its assets, conduct its
business as presently conducted and to enter into this Agreement and any
agreements in implementation hereof;
(b) it has full power and authority to undertake the obligations
hereunder, to execute and deliver this Agreement, to perform its obligations and
observe the terms and provisions mentioned herein;
(c) the execution and delivery of this Agreement and the performance of
the obligations set forth herein have been duly authorized by all necessary
action on its part and constitute valid and legally binding obligations of the
Sponsor, enforceable in accordance with its terms;
(d) the execution and delivery of this Agreement and the performance of
its obligations hereunder shall not conflict with or result in a breach of any
of the terms, conditions or provisions of, or constitute a default or require a
consent under (i) any provision of its Estatuto Social; (ii) any provision of
any applicable law, regulation, rule, decree, judgment or order to which it is
subject; (iii) any provision of any indenture, mortgage, agreement or other
instrument or arrangement to which it is a party, or which is binding upon it or
any of its assets;
(e) all governmental, corporate, shareholders?, and creditors?
authorizations, consents, approvals, waivers and licenses required for the
execution and delivery of this Agreement and the performance of its obligations
hereunder have been duly obtained or granted and are in full force and effect;
(f) except as set forth in Schedule 3.2(f), neither the Sponsor nor any
Subsidiary or Affiliate of the Sponsor, except the Company, nor any statutory
director ("conselheiro") or officer ("diretor") of any of the Sponsor, the
Seller, the Company or CTBC, has acquired any shares in CTBC or any options,
warrants or other rights in respect of such shares, from subscribers of CTBC or
otherwise. Schedule 3.2(f) sets forth all of the purchases, options or rights,
whether written or oral, to acquire any shares in CTBC, held, owned or
controlled by the Sponsor, any company of the Algar Group or their respective
Subsidiaries or Affiliates;
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(g) when delivered at the Closing, the report on CTBC shares described
in Section 5.1(o) shall be true and correct in all respects; and
(h) it is the lawful owner, free and clear of all Liens, of one hundred
ninety-nine million, nine hundred ninety-nine thousand, nine hundred and
ninety-five (199,999,995) common voting Shares and zero (0) preferred non-voting
Shares representing approximately ninety three point ninety nine percent
(93.99%) of the total number of issued and outstanding share capital of the
Company on the date of this Agreement.
Section 3.3 Representations and Warranties of the Seller. The Seller
hereby represents and warrants to Xxxxxxxx that:
(a) it is a corporation duly incorporated and validly existing under
the laws of Brazil and has the corporate power to own its assets, conduct its
business as presently conducted and to enter into this Agreement and any
agreements in implementation hereof.
(b) it has full power and authority to undertake the obligations
hereunder, to execute and deliver this Agreement, to perform its obligations and
observe the terms and provisions mentioned herein.
(c) the execution and delivery of this Agreement and the performance of
the obligations set forth herein have been duly authorized by all necessary
action on its part and constitute valid and legally binding obligations of the
Seller enforceable in accordance with its terms.
(d) the execution and delivery of this Agreement and the performance of
its obligations hereunder shall not conflict with or result in a breach of any
of the terms, conditions or provisions of, or constitute a default or require a
consent under (i) any provision of its Estatuto Social; (ii) any provision of
any applicable law, regulation, rule, decree, judgment or order to which it is
subject; (iii) any provision of any indenture, mortgage, agreement or other
instrument or arrangement to which it is a party, or which is binding upon it or
any of its assets.
(e) all governmental, corporate, shareholders', and creditors'
authorizations, consents, approvals, waivers and licenses required for the
execution and delivery of this Agreement and the performance of its obligations
hereunder have been duly obtained or granted and are in full force and effect.
(f) it is the lawful owner, free and clear of all Liens, of three
million, seven hundred fifty-five thousand, three hundred one (3,755,301) common
voting Shares and twenty-seven million, four hundred fifty thousand, eighty-five
(27,450,085) Preferred non-voting Shares representing approximately eleven and
seventy-three hundreds percent (11.73%) of the total number of issued and
outstanding share capital of the Company on the date of this Agreement.
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Section 3.4 Representations and Warranties of the Company, the Seller
and the Sponsor. Without limiting the contents of the representations and
warranties contained in Sections 3.1, 3.2 and 3.4 of this Agreement, the
Company, the Seller and the Sponsor, jointly and severally, further represent
and warrant to Xxxxxxxx that:
(a) Schedule 3.3(a) are the lists of the present shareholders of each
of the Company and its Subsidiaries including CTBC. Each of the Seller, Sponsor,
the Company and the Subsidiaries and Affiliates of the Seller, Sponsor and the
Company, and the shareholders of such entities, have no other direct and/or
indirect equity or quasi-equity interest in any direct and/or indirect
Subsidiary of the Company, including CTBC, except as set forth in Schedule
3.3(a);
(b) under prevailing legislation, the subscribers of CTBC have the
right to receive shares in exchange for subscribers' fees already paid to CTBC
for the right to use the respective telephone line. The shares, to be subscribed
for by the new subscribers, can be common voting shares and/or preferred
non-voting shares, with due observance of the limits set forth in the Brazilian
Corporate Law (Xxx xxx Sociedades Anonimas). Except for these shares and capital
increases, there exists no other options, warrants or any other rights which
might result in the effective reduction of the percentage equity interest of the
Company in any of its Subsidiaries and Affiliates;
(c) a copy of the audited consolidated financial statements of Lightel
Servicos and its Subsidiaries as of December 31, 1995 and the unaudited
consolidated financial statements of the Company and its Subsidiaries as of
September 30, 1996, are set forth in Exhibit 3.3(c). Such documents fairly
completely and accurately present the financial position of Lightel Servicos and
the Company and their respective Subsidiaries at the relative dates and for the
respective periods covered, and have been prepared in conformity with accounting
principles generally accepted in Brazil and applied on a consistent basis
throughout the periods involved. Except as set forth in Schedule 3.3(c), Lightel
Servicos owns no other assets, equity or business;
(d) since the date of the financial statements drawn up on September
30, 1996, the Company and each of its Subsidiaries and Affiliates have not
suffered any material adverse change in their business prospects or financial
condition or incurred any substantial or unusual loss or liability. For the
purposes hereof, the term "material" means any transaction (or a series of
related transactions) valued at or an event (or series of related events)
resulting in a loss or liability or change in financial position (or which can
reasonably be expected to result in a loss or liability or change in financial
position) equal to or exceeding five million U.S. dollars (US$5,000,000) or its
Dollar Equivalent in Reais. Since such date, the Company and each of its
Subsidiaries and Affiliates have not undertaken or agreed to undertake any
substantial obligation outside the ordinary course of business;
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(e) the books and records of the Company and each of its Subsidiaries
and Affiliates have been prepared and maintained in accordance with accounting
principles generally accepted in Brazil and consistently applied. The books of
account of the Company and its Subsidiaries and Affiliates comply with the
requirements of Brazilian law and are not affected by any extraordinary or
non-recurring item;
(f) since the date of the formation of the Company and of each of its
Subsidiaries and Affiliates, there have been no liabilities, asserted
liabilities or obligations of any nature affecting the Company or such
Subsidiary or Affiliate, respectively, whether absolute, accrued, contingent or
otherwise, other than those disclosed or reflected: (i) on each of the audited
financial statements of the Company or such Subsidiary or Affiliate; or (ii) if
arising after the date of the most recent audited financial statements of such
entity, in the most recent unaudited financial statements of such entity, or
(iii) if arising after the date of the most recent unaudited financial
statements of such entity, in the books and records of such entity;
(g) since the date of its formation, the Company has ascertained and
paid all taxes and quasi-tax contributions measured on its profits or levied by
virtue of corporate restructurings and has further timely and punctually filed
any tax returns required by the federal, state and municipal laws in Brazil;
(h) all tax returns and reports of the Company and each of its
Subsidiaries and Affiliates required by law to be filed have been duly filed and
all tax assessments, fees and other governmental charges upon the Company and
each of its Subsidiaries and Affiliates, or their properties, or their income or
assets, which are due and payable, have been paid, other than those presently
payable without penalty or interest. If such taxes are not yet due, adequate
provisions have been made in the accounting records of the Company and each of
its Subsidiaries and Affiliates for the payment of such taxes;
(i) except as set forth in Schedule 3.3(i), the Company and each of its
Subsidiaries and Affiliates are not engaged in nor, to the best of their
knowledge, threatened by, any litigation, arbitration or administrative
proceeding the outcome of which might materially and adversely affect their
business prospects or financial position. To the best of their knowledge and
belief, the Company and each of its Subsidiaries and Affiliates are not in
violation of any statute or regulation of any governmental authority and no
judgement or order has been issued which has or is likely to have any materially
adverse effect on the Company's and each Subsidiary's and Affiliate's business
prospects or financial position;
(j) the Company and each of its Subsidiaries and Affiliates have good
and unencumbered title to all of the properties at which their business are
carried on or are proposed to be carried on for the purposes of the Project;
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(k) the Company and each of its Subsidiaries and Affiliates have the
right to all concessions, permissions, authorizations, trademarks, trade names,
patents and license agreements necessary for the conduct of their business as
now conducted and as proposed to be conducted, without any known conflict with
the rights of others;
(l) no person, firm or company has (other than as a shareholder and,
according to law, as an employee) any right to participate in the profits of the
Company and any Subsidiary or Affiliate. The Company and each of its
Subsidiaries and Affiliates are not managed by any third party;
(m) since the date of its formation, the Company has not engaged in any
transaction or operation inconsistent with its status of a holding company;
(n) except as set forth in Schedule 3.3(n), neither the Company nor any
of its Subsidiaries or Affiliates is a party to any labor suit brought against
it by any of its former employees claiming in court any payments associated with
the labor relationship with the Company or any Subsidiary or Affiliate, nor is
the Company or any Subsidiary or Affiliate a party to any legal action
instituted by any third party;
(o) except as set forth in Schedule 3.3(o), neither the Company nor any
of its Subsidiaries or Affiliates is a party to, or committed to enter into, any
material contract (i.e., contract other than in the ordinary course of
business), which would or might affect the judgment of a prospective investor;
(p) except as set forth in Schedule 3.3(p), neither the Company nor any
of its Subsidiaries or Affiliates have any outstanding mortgage, charge or other
Lien on any of their respective assets, and no contract or arrangement,
conditional or unconditional, exists for the creation by any of such entities of
any mortgage, charge or other Lien;
(q) the Sponsor, the Seller, the Company and CTBC are in compliance in
all respects with, and no breach has occurred with respect to, their respective
obligations under the mortgages, charges, or other Liens and contracts or
arrangements, conditional or unconditional, set forth in Schedule 3.3(p) and
under the following agreements, entered into with the International Finance
Corporation, all of which are dated July 18, 1996: (i) Common Terms Agreement;
(ii) Subscription and Shareholders Agreement; (iii) Loan Agreement; (iv) Put
Option Agreement; and (v) Guarantee Agreement; and any other agreement entered
into with the International Finance Corporation by such entities;
(r) except as set forth in Schedule 3.3(r), there are no contracts or
other arrangements, written or oral, regarding the contribution or transfer of
CTBC shares to Lightel;
(s) the Sponsor and the Seller agree to indemnify, defend and hold
Xxxxxxxx and its Affiliates harmless from any damages, losses, lost profits,
liabilities and contingencies
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of any nature whatsoever derived from (i) any corporate restructuring that
either the Company or any of its Subsidiaries (which are engaged in the
Telecommunications and Information Technology Sector) might have undertaken
to date; (ii) the inaccuracy of any representations and warranties contained
in this Agreement; (iii) the breach of any covenant or agreement of the
Sponsor, the Seller or the Company under this Agreement; and (iv) all
undisclosed liabilities of the Company, its Subsidiaries or Affiliates
arising prior to the Closing.
Section 3.5 Exercise of Sponsor's and Seller's Voting Rights. Each of
the Sponsor and Seller agree to exercise its voting rights and/or any other
rights granted to it by law or otherwise, so as to permit the Company the
fulfillment of all of its obligations hereunder and to achieve the prompt and
effective implementation of this Agreement.
Section 3.6 Warranty. Each of the Company, the Sponsor and the Seller
acknowledges that it has made the representations and warranties referred to in
Sections 3.1 through 3.5 with the intention of persuading Xxxxxxxx to enter into
this Agreement and that Xxxxxxxx has entered into this Agreement on the basis
of, and in full reliance on, each of such representations and warranties. Each
of the Company, the Seller and the Sponsor warrants to Xxxxxxxx that each of
such representations and warranties is true and correct in all material respects
as of the date of this Agreement and that none of them omits any matter the
omission of which makes any of such representations or warranties misleading.
For the purposes hereof the phrase "in all material respects" means the absence
of any event, condition or circumstance which might jeopardize the transactions
contemplated in this Agreement, the Xxxxxxxx Subscription or the ownership by
Xxxxxxxx of the Xxxxxxxx Shares, or the knowledge of which would cause a
reasonable investor to refrain from making an investment such as the Xxxxxxxx
Subscription, on the existing terms set forth herein.
Section 3.7 Rights and Remedies not Limited. William's rights and
remedies in relation to any misrepresentation or breach of warranty on the part
of the Company, the Seller or the Sponsor are not prejudiced:
(a) by an investigation by or on behalf of Xxxxxxxx into the affairs of
the Company;
(b) by the execution or the performance of this Agreement; or
(c) by any other act or thing which may be done by or on behalf of
Xxxxxxxx in connection with this Agreement and which might, apart from this
Section, prejudice such rights or remedies.
Section 3.8 Representations and Warranties for Xxxxxxxx Acquisition.
For the purpose of the acquisition and payment for the Xxxxxxxx Shares, the
Company shall represent and warrant that:
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(a) the representations and warranties made or confirmed in Sections
3.1, 3.2, 3.3, 3.4 and 3.6 continue to be true;
(b) no Event of Suspension and/or Cancellation has happened and is
continuing;
(c) since the date of this Agreement, nothing has occurred which might
materially adversely affect the carrying out of the Project or the Company's
business prospects or financial condition or the business prospects or financial
condition of each of its Subsidiaries and Affiliates, or make it improbable that
the Company or any of its Subsidiaries or Affiliates shall be able to fulfill
any of its obligations under any agreement to which the Company, each Subsidiary
or Affiliate is a party, including this Agreement; nor has the Company or any
Subsidiary or Affiliate incurred any substantial or unusual loss or liability.
For the purposes hereof the phrase "materially adversely affect" means any
event, condition or circumstance which might jeopardize the transactions
contemplated in this Agreement, Xxxxxxxx' acquisition or the ownership by
Xxxxxxxx of the Xxxxxxxx Shares, or the knowledge of which would cause a
reasonable investor to refrain from making an investment such as Xxxxxxxx'
acquisition of the Xxxxxxxx Purchased Shares, on the existing terms set forth
herein; and
(d) the proceeds from the acquisition and payment are, at the date of
the relevant request, needed by the Company for the purposes of the Project, the
details of which are set forth in Schedule 2.1, or shall be needed for that
purpose within three (3) months of such date.
Section 3.9 Representations and Warranties of Xxxxxxxx. Xxxxxxxx hereby
represents and warrants to the Sponsor, Seller and the Company that:
(a) it is a limited company duly incorporated and validly existing
under the laws of the Cayman Islands, British West Indies, and has the corporate
power to own its assets, conduct its business as presently conducted and to
enter into this Agreement and any agreements in implementation hereof;
(b) it has full power and authority to undertake the obligations
hereunder, to execute and deliver this Agreement, to perform its obligations and
observe the terms and provisions mentioned herein;
(c) the execution and delivery of this Agreement and the performance of
the obligations set forth herein have been duly authorized by all necessary
action on its part and constitute valid and legally binding obligations of
Xxxxxxxx, enforceable in accordance with its terms;
(d) the execution and delivery of this Agreement and the performance of
its obligations hereunder shall not conflict with or result in a breach of any
of the terms, conditions or provisions of, or constitute a default or require a
consent under (i) any
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provision of its Memorandum and Articles of Association; (ii) any provision of
any applicable law, regulation, rule, decree, judgment or order to which it is
subject; (iii) any provision of any indenture, mortgage, agreement or other
instrument or arrangement to which it is a party, or which is binding upon it
or any of its assets; and
(e) all governmental, corporate, shareholders?, and creditors?
authorizations, consents, approvals, waivers and licenses required for the
execution and delivery of this Agreement and the performance of its obligations
hereunder have been duly obtained or granted and are in full force and effect.
ARTICLE 4
XXXXXXXX ACQUISITION OF SHARES
Section 4.1 Acquisition of Shares by Xxxxxxxx.
(a) On the terms and subject to the conditions of this Agreement,
Xxxxxxxx shall have the right to acquire the Xxxxxxxx Preferred Shares and the
Xxxxxxxx Common Shares (collectively, the "Xxxxxxxx Purchased Shares") and pay
therefor an aggregate price not to exceed twenty-eight million, one hundred
fifty-six thousand, four hundred eight dollars and fifty-six cents
($28,156,408.56). After giving effect to the acquisition of the Xxxxxxxx Shares
pursuant to this Agreement, the provisions of Exhibit 14.2 of the Subscription
and Shareholders Agreement and the Xxxxxxxx Subscription, together the Xxxxxxxx
Shares shall represent twenty percent (20%) of the total issued and outstanding
Shares of the Company.
(b) The Seller shall request Xxxxxxxx to acquire the totality of the
Xxxxxxxx Purchased Shares by delivering to Xxxxxxxx, at least seven (7) Business
Days prior to the proposed date of acquisition, a request substantially in the
form of Exhibit 4.1(b).
(c) Xxxxxxxx shall pay the aggregate of the acquisition price of the
Xxxxxxxx Purchased Shares in one lump sum to the credit of the Company at the
bank specified in the request for acquisition or at such other bank in such
place as Xxxxxxxx and the Seller from time to time agree.
(d) Notwithstanding anything contained in this Agreement, Xxxxxxxx may,
at any time and from time to time, in its discretion and without request by the
Seller, acquire and pay, on the terms set out in Subsection (a) above, for any
or all of the Xxxxxxxx Purchased Shares; provided that Xxxxxxxx may not acquire
Shares after giving effect to the acquisition of the Xxxxxxxx Purchased Shares
hereunder, and the Xxxxxxxx Subscription, the provisions of Exhibit 14.2 of the
Subscription and Shareholders Agreement representing more than twenty per cent
(20%) of the total issued and outstanding share capital of the Company pursuant
to this Section.
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(e) Upon the acquisition and payment by Xxxxxxxx under this Section,
the Seller shall:
(i) transfer to Xxxxxxxx the number of Xxxxxxxx Purchased Shares so
acquired free of all Liens and which shall rank, pari passu in all respects with
all other Shares of the same category of Xxxxxxxx Purchased Shares and deliver
to Xxxxxxxx two (2) share certificates evidencing valid title to such number of
Xxxxxxxx Preferred Shares and Xxxxxxxx Common Shares, respectively; and
(ii) furnish to Xxxxxxxx evidence that the Xxxxxxxx Shares have
been duly and validly authorized, issued and delivered in compliance with
Brazilian law and that all other legal requirements in connection with the
authorization, issue and delivery have been duly satisfied, including the making
of the proper entries in the shareholders registry book of the Company.
Section 4.2 Actions Prohibited until Xxxxxxxx Purchased Shares
Acquired. Until all of the Xxxxxxxx Purchased Shares have been acquired or the
acquisition and payment of the Xxxxxxxx Purchased Shares hereunder has been
canceled as provided in Section 4.3 whichever first occurs:
(a) the Company shall not, unless Xxxxxxxx otherwise agrees:
(i) issue any Shares of any class, except in accordance with the
Financial Plan;
(ii) increase its subscribed, paid in and authorized capital except
in accordance with the provisions of this Agreement;
(iii) change the rights attached to, any of its Shares of any
class; or
(iv) take any other action by amendment of its Estatuto Social or
through reorganization, consolidation, merger or sale of assets, or otherwise
which might result in the equity interest in the Company represented by the
Xxxxxxxx Shares being equivalent to less than twenty percent (20%) of the total
issued and outstanding Shares of the Company.
Section 4.3 Suspension and Cancellation of Xxxxxxxx Acquisition. (a)
Xxxxxxxx may, by notice to the Seller, suspend or cancel the acquisition of the
Xxxxxxxx Purchased Shares:
if:
(i) by February 28, 1997 any of the conditions of acquisition and
payment under this Agreement as set forth in Section 5.1 has not been met; or
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(ii) the Seller has not made available the Shares for the
acquisition by Xxxxxxxx;
(iii) if any Event of Suspension and/or Cancellation has occurred
and is continuing, or if the Event of Suspension and/or Cancellations specified
in Section 6.1 (m) is, in the reasonable opinion of Xxxxxxxx, imminent; or
(iv) if, at any time, in the reasonable opinion of Xxxxxxxx, there
exists any situation which indicates that performance by each the Company or
Seller of any of its obligations under this Agreement cannot be expected.
(b) The exercise by Xxxxxxxx of its right of suspension does not
preclude Xxxxxxxx from exercising its right of cancellation, either for the same
or another reason. A suspension does not limit any other provision of this
Agreement.
Section 4.4 Obligations of the Company after Xxxxxxxx Acquires the
Xxxxxxxx Shares.
(a) Within ten (10) Business Days following the acquisition and payment
for the Xxxxxxxx Purchased Shares, the Seller and the Company each agrees to
assist Xxxxxxxx in applying with the Banco Central for the issuance of the
Certificado de Registro to evidence the Xxxxxxxx Purchased Shares as a foreign
investment of Xxxxxxxx so as to allow Xxxxxxxx the receipt of dividends,
proceeds of sale of the Xxxxxxxx Purchased Shares and any other Shares of the
Company received by Xxxxxxxx by way of stock dividends, share splits or
replacement shares.
(b) The Seller and the Company each agrees 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.
(c) The Seller and the Company shall be liable for the payment of any
penalty or fine that might be imposed by the Banco Central as a result of an
event attributable to the Company 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.
(d) The Seller and the Company shall each make its best efforts to
assist Xxxxxxxx to cause the Banco Central to issue the Certificado de Registro
evidencing the Xxxxxxxx Purchased Shares within sixty (60) days following the
Closing. Within two (2) Business Days following the receipt of such Certificado
de Registro by the Company, the Company agrees to send the original copy thereof
to Xxxxxxxx.
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ARTICLE 5
CONDITIONS OF XXXXXXXX' ACQUISITION OF XXXXXXXX PURCHASED SHARES
Section 5.1 Conditions of the Xxxxxxxx' Acquisition. The obligation of
Xxxxxxxx to make the acquisition and payment hereunder is subject to the
fulfillment, in a manner satisfactory to Xxxxxxxx, prior to or concurrently with
the making of such acquisition and payment, of the following conditions:
(a) the Sponsor, the Company, its Subsidiaries and Affiliates have
performed all of their respective obligations due to be performed under the
Transaction Documents, including this Agreement, in each case due to be
performed prior to the disbursement;
(b) arrangements have been made by the Company and by each of its
Subsidiaries and Affiliates with respect to the installation and operation of an
accounting and cost control system and a management information system
satisfactory to Xxxxxxxx and for the confirmation of Xxxxxx Xxxxxxxx as Auditors
for the Company and for each of its Subsidiaries and Affiliates;
(c) the Company, each of its Subsidiaries and Affiliates have insured
their respective properties and business with adequate coverage covering risks
normally covered by companies engaged in the relevant Telecommunications and
Information Technology Sector pursuant to the minimum insurance requirements set
forth in Schedule 5.1(c) and Xxxxxxxx has been provided with copies of all
insurance policies together with a certificate of the insurer confirming that
such policies are in effect;
(d) all the Transactions Documents have been entered into by all
parties to them, have become (or, as the case may be, remain) unconditional and
fully effective in accordance with their respective terms; and, if Xxxxxxxx
requires, Xxxxxxxx has received a copy of each Transaction Document to which it
is not a party, certified as a true and complete copy by the Company;
(e) the Board of Directors of the Company shall have: (i) convened an
Extraordinary Shareholders Meeting of the Company to be held on the Closing
Date, at which the Sponsor shall vote to appoint the Xxxxxxxx Director to the
Board of Directors of the Company; and (ii) adopted a Board resolution stating
the policy of the Company regarding CTBC shares in the terms described in
Section 10.11;
(f) the Seller and the Company have obtained, or made adequate
arrangements for obtaining, all Authorizations and other necessary approvals or
consents for:
(i) the acquisition of the Xxxxxxxx Purchased Shares;
(ii) the carrying on of the business of the Company as it is
presently carried on and is contemplated to be carried on;
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(iii) the carrying out of the Project and the implementation of the
Financial Plan; and
(iv) the due execution and delivery of, and performance under, the
Transaction Documents, and any documents necessary or desirable in their
implementation and delivery of the Xxxxxxxx Purchased Shares;
(g) and has provided Xxxxxxxx with copies of those Authorizations,
certified as true and complete copies by the Company, if Xxxxxxxx so requires;
(h) Xxxxxxxx has received a legal opinion substantially in the form of
Exhibit 5.1(h) from the Sponsor's and the Company's in-house general counsel,
with respect to:
(i) the organization, existence, operations and corporate
restructurings of each of the Company, its Subsidiaries and Affiliates, and the
formation of their respective authorized, subscribed and paid-in share capital;
(ii) the matters referred to in Subsections (d), (e) and (f) above;
(iii) the title of the Company, each of its Subsidiaries and
Affiliates to, or other interest of the Company, each of its Subsidiaries and
Affiliates in their respective immovable and moveable assets;
(iv) the authorization, execution, validity and enforceability of
this Agreement, and any documents in implementation of this Agreement;
(v) the validity, effectiveness and enforceability of the
Concessions and the Portarias;
(vi) the terms and conditions for the payment of the compensation
due to CTBC in the event the Concession Agreement is terminated for any reason
whatsoever;
(vii) the representations and warranties of the Sponsor and the
Company contained in this Agreement are true and accurate in all respects as of
the Closing Date and the Sponsor and the Company are in full compliance in all
respects with the covenants contained in this Agreement as of the Closing Date;
and
(viii) such other matters relating to the transactions contemplated
by this Agreement, and any other Transaction Documents as Xxxxxxxx reasonably
requests;
(i) Xxxxxxxx has received (if Xxxxxxxx so requires) reimbursement of
fees and expenses of Xxxxxxxx' counsel and other expenses as provided in Section
10.9 unless paid beforehand directly to such counsel upon the request of
Xxxxxxxx;
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(j) Xxxxxxxx has received the Certificate of Incumbency and Authority;
(k) the Company and each of its Subsidiaries and Affiliates shall be in
compliance with national and local environmental, safety and health laws and
standards and the relevant World Bank Guidelines;
(l) since the date of the latest financial statements attached hereto,
the Company has not, nor has any of its Subsidiaries and Affiliates, incurred
any loss or liability;
(m) after giving effect to the acquisition of the Xxxxxxxx Purchased
Shares, the Company shall not be in violation of:
(i) its Estatuto Social;
(ii) any provision contained in any document to which the Company
is a party (including this Agreement) or by which the Company is bound; or
(iii) any applicable Brazilian law, rule or regulation;
(n) immediately after the acquisition of the Xxxxxxxx Purchased Shares
and having given effect to the Xxxxxxxx Subscription, Xxxxxxxx shall not have
acquired or paid for a higher proportion of the Xxxxxxxx Purchased Shares than
the proportion which all of the remaining Shareholders of the Company have by
then subscribed or paid for of the total number of Shares to be subscribed by
them in accordance with the Financial Plan;
(o) the Sponsor shall have delivered to Xxxxxxxx a true and correct
report of all shares of CTBC acquired by the Sponsor, the Company or any their
respective Subsidiaries or Affiliates, from a non-Affiliate from the date hereof
until the Closing Date, indicating the number and class of shares acquired, the
identity of the purchaser and of any subsequent transferees or assignees of such
shares, the date of the purchases and subsequent transfers or assignments of
such shares, if any, and the effective net price paid for such shares upon
initial purchase and any subsequent transfers or assignments;
(p) no Event of Suspension and/or Cancellation shall have occurred and
be continuing; and
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(q) the Sponsor shall have delivered to Xxxxxxxx an update of Schedule
3.1(g), to reflect any additional transactions which have occurred between the
date hereof and the Closing Date;
Section 5.2 Company Certification. Seller shall have caused the Company
to deliver to Xxxxxxxx as part of the request for the subscription and
disbursement under the Xxxxxxxx Subscription a certification, substantially in
the form of Exhibit 4.1(b) signed by the President of the Company with respect
to the matters referred to in Section 3.8 and the conditions specified in
Section 5.1, expressed to be effective as of the date of the subscription and
disbursement under the Xxxxxxxx Subscription; and such evidence as Xxxxxxxx
reasonably requests of the proposed utilization of the proceeds of the
acquisition and payment for the Xxxxxxxx Purchased Shares.
Section 5.3 Conditions for Xxxxxxxx Benefit. The conditions in Sections
5.1 and 5.2 are for the benefit of Xxxxxxxx and may be waived only by Xxxxxxxx
at its sole discretion.
Section 5.4 Saving of Rights. Unless Xxxxxxxx otherwise notifies the
Seller and the Company, and without limiting the generality of Section 10.12,
the right of Xxxxxxxx to require compliance with any condition under this
Agreement which Xxxxxxxx waives in respect of the acquisition hereunder is
preserved for the purpose of the future exercise of any other right of Xxxxxxxx
hereunder.
ARTICLE 6
EVENTS OF SUSPENSION AND/OR CANCELLATION
OF XXXXXXXX ACQUISITION
Section 6.1 Events of Suspension and/or Cancellation. Each of the
following events constitutes an Event of Suspension and/or Cancellation:
(a) if the Company, any Subsidiary or Affiliate fails to carry out the
Project and conduct its business with due diligence and efficiency in accordance
with sound engineering, financial and business practices; if the Company fails
to carry out the Project in accordance with the Project description which is
contained in Schedule 2.1 (subject to any modifications to which Xxxxxxxx may
agree); or fails to cause the funding specified in the Financial Plan to be
applied exclusively to the Project;
(b) if the Company, any of its Subsidiaries or Affiliates fails to
maintain at all times a firm of independent public accountants of international
standing and sound reputation as auditors of each of such companies;
(c) if the Company, any Subsidiary or Affiliate fails to design,
construct, operate and maintain all plant and equipment in compliance with the
applicable environmental,
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occupational health and safety requirements of the Government of Brazil and
the local authorities, and applicable World Bank Guidelines;
(d) except to the extent required by Brazilian laws, if the Company
declares or pays any dividend or makes directly or indirectly any distribution
on its share capital, or purchases, redeems or otherwise acquires any Shares of
the Company or any option over the same prior to Closing or the cancellation by
Xxxxxxxx of the acquisition of the Xxxxxxxx Shares, as the case may be;
(e) if either the Company or any Subsidiary or Affiliate enters into
any transaction with any person other than in the ordinary course of business,
on ordinary commercial terms and on the basis of arm's-length arrangements;
(f) if either the Company or any Subsidiary or Affiliate enters into
any partnership (except for the purpose of carrying out the Project),
profit-sharing or royalty agreement or other similar arrangement whereby the
Company's or any Subsidiary's or Affiliate's income or profits are, or might be,
shared with any other person; or if the Company or any Subsidiary or Affiliate
enters into any management contract or similar arrangement whereby the business
or operations of the relevant company are managed by any other person;
(g) if the Company forms any Subsidiary or acquires shares of any
company, unless each of such Subsidiary and company is designed to be a company
of the Company Group;
(h) if the Company changes its Estatuto Social in any manner which
would be inconsistent with the provisions of any Transaction Document; changes
its Fiscal Year; changes the nature of its present and contemplated business or
operations or change the nature or scope of the Project; sells, transfers,
leases or otherwise disposes of all or a substantial part of its assets (whether
in a single transaction or in a series of transactions, related or otherwise)
other than sales, transfers, leases or other forms of disposal in the ordinary
course of business; or undertakes or permits any merger, consolidation, spin-off
or the transformation of the legal structure of any company of the Company Group
into any other structure;
(i) if the Company terminates, amends or grants any waiver in respect
of any provision of any Transaction Document;
(j) if the Sponsor, any Subsidiary or Affiliate of the Company fails to
perform any obligation under any Transaction Document to which it is a party;
(k) if the Sponsor, the Company or any of their respective Subsidiaries
or Affiliates fails to perform any of its obligations under this Agreement or
any other
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agreement between the Sponsor, the Company or such Subsidiary or Affiliate,
on the one hand, and Xxxxxxxx, on the other hand;
(l) if any representation or warranty confirmed or made in Article 3 or
in connection with the execution and delivery of this Agreement, or in
connection with the request for acquisition and payment under this Agreement,
shall be found to be incorrect in any material respect. For the purposes hereof
the phrase "in any material respect" means the existence of any event, condition
or circumstance which might jeopardize the transactions contemplated in this
Agreement, the Xxxxxxxx Subscription or the ownership by Xxxxxxxx of the
Xxxxxxxx Shares, or the knowledge of which would cause a reasonable investor to
refrain from making an investment such as the acquisition of the Xxxxxxxx
Shares, on the existing terms set forth herein;
(m) if any government or governmental Authority shall have condemned,
nationalized, seized, or otherwise expropriated (including in any gradual or
progressive manner), all or any substantial part of the property or other assets
of the Sponsor, the Company, any Subsidiary or Affiliate or of the share capital
of the relevant company or shall have assumed custody or control of such
property or other assets or of the business or operations of the Sponsor, the
Company, any Subsidiary or Affiliate or of the share capital of the relevant
company, or shall have taken any action for the dissolution or disestablishment
of the Sponsor, the Company, any Subsidiary or Affiliate or any action that
would prevent any of such companies or its officers from carrying on its
business or operations or a substantial part thereof;
(n) if a decree or order by a court is entered against the Company, the
Sponsor, any of the Company's Subsidiaries or Affiliates:
(i) adjudging the Company, the Sponsor, any of the Company's
Subsidiaries or Affiliate, "concordatarias", bankrupt or insolvent;
(ii) approving as properly filed a petition seeking reorganization,
"concordata" arrangement, adjustment or composition of, or in respect of, the
Company, the Sponsor, any of the Company's Subsidiaries or Affiliates under any
applicable law;
(iii) appointing a receiver, liquidator, assignee, trustee,
"comissario," sequestrator (or other similar official) of the Company, the
Sponsor, any of the Company's Subsidiaries or Affiliates or of any substantial
part of the property or other assets owned by any of such persons; or
(iv) ordering the dissolution, winding up or liquidation of the
affairs of the Company, the Sponsor, any of the Company's Subsidiaries, or any
Affiliate;
(v) or any petition is filed seeking any of the above and is not
dismissed within thirty (30) days;
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(o) if the Company, the Sponsor, any of the Company's Subsidiaries or
Affiliates:
(i) requests a moratorium or suspension of payment of debts from
any court;
(ii) institutes proceedings or takes any form of corporate action
to be liquidated, adjudicated bankrupt or insolvent;
(iii) consents to the institution of bankruptcy or insolvency
proceedings against it;
(iv) files a petition or answer or consent seeking reorganization
("concordata") or relief under any applicable law, consents to the filing of any
such petition or to the appointment of a receiver, liquidator, "comissario"
assignee, trustee, sequestrator (or other similar official) of the Company, the
Sponsor, any of the Company's Subsidiaries or Affiliates, or of substantial part
of their respective properties;
(v) makes a general assignment for the benefit of creditors; or
(vi) admits in writing its inability to pay its debts generally as
they become due or otherwise becomes insolvent;
(p) if an attachment or analogous process is levied or enforced upon or
issued against any of the assets of the Company, the Sponsor, any of the
Company's Subsidiaries or Affiliates, is not discharged within thirty (30) days;
(q) if any other event occurs which under any applicable law would have
an effect analogous to any of those events listed in Subsections (n), (o), and
(p) above;
(r) if any provision of any Transaction Document is revoked, terminated
or ceases to be in full force and effect or the performance of the obligations
of any party to such agreements becomes unlawful or any such document is
declared to be void or is repudiated or its validity or enforceability at any
time is contested by any person and the provision is not restored or replaced by
a provision acceptable to Xxxxxxxx, or such repudiation or challenge withdrawn
within thirty (30) days of Xxxxxxxx' notice to the Company requiring that
restoration, replacement or withdrawal;
(s) if this Agreement, any Concession, the Concession Agreement, or any
Portaria:
(i) is breached by the relevant party to it and such breach may
have an adverse effect on the ability of the Company to perform and observe its
obligations under any Transaction Document; or
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(ii) is revoked, terminated or ceases to be in full force and
effect without the prior consent of Xxxxxxxx, or performance of the obligations
under this Agreement, any Concession, Concession Agreement or under any of the
Portarias becomes unlawful; or any of such agreements, concessions or Portarias
is declared to be void or is repudiated or its validity or enforceability at any
time is contested by any party to it.
(t) if a default shall have occurred with respect to any indebtedness
of the Company or under any agreement pursuant to which there is outstanding any
such indebtedness of the Company, and such default shall have continued for more
than any applicable period of grace;
(u) if any Authorization necessary for the carrying out of the Project
and the Company's business and operations generally, as well as the business and
operations of each of its Subsidiaries or Affiliates or for the performance by
the Company, each Subsidiary or Affiliate of its obligations under each
Transaction Document is not obtained when required or otherwise at any time
ceases to be in full force and effect, including in respect of the remittance to
Xxxxxxxx or its assigns in freely convertible currency any amounts of dividends
on, or proceeds of sale of, the Xxxxxxxx Shares and the relevant Authorization
is not restored or reinstated within thirty (30) days of notice by Xxxxxxxx to
the Company requiring that restoration or reinstatement;
(v) if any provision of this Agreement is or becomes invalid, illegal
or unenforceable;
(w) if any of the Sponsor, the Company or CTBC are not in compliance in
all respects with their obligations under mortgages, charges or other liens and
contracts or arrangements, conditional or unconditional, set forth in Schedule
3.3(p) and the agreements with the International Finance Corporation mentioned
in Section 3.3(q);
(x) if any occurrences, events, circumstances or conditions which,
individually or in the aggregate, constitute a material adverse change, shall
have occurred or arisen after the date hereof, including any occurrences,
events, circumstances or conditions which, notwithstanding the Sponsor's or the
Company's disclosure to Xxxxxxxx prior to the Closing Date, have or with the
passage of time or the giving of notice or both, would have a material adverse
effect on William's rights under this Agreement or a material adverse effect on
either the Company taken as a whole or on CTBC; or
(y) if after the date hereof, the Sponsor or any of its Subsidiaries or
Affiliates, excluding the Company, shall have acquired by any means, directly or
indirectly, any shares of CTBC other than those expressly disclosed in this
Agreement to be held, directly or indirectly, legally or beneficially, by such
persons and entities.
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ARTICLE 7
CERTAIN RIGHTS AND OBLIGATIONS OF THE PARTIES
Section 7.1 Tag Along Rights; Preemptive Rights; Xxxxxxxx Director.
With respect to the Xxxxxxxx Shares acquired hereunder, Xxxxxxxx shall have the
same rights as it has under Articles 7 and 8 of the Subscription and
Shareholders Agreement.
Section 7.2 Rights of First Notice. With respect to the Xxxxxxxx Shares
acquired hereunder, Sponsor shall have the same rights as it has under Section
7.9 of the Subscription and Shareholders Agreement.
Section 7.3 Public Offering. With respect to the Xxxxxxxx Shares
acquired hereunder, Xxxxxxxx shall have the same rights as it has under Article
9 of the Subscription and Shareholders Agreement.
Section 7.4 Miscellaneous Obligations. Seller and Sponsor hereby
covenant and agree to be bound by and perform the obligations of Sponsor and
Company set forth in Articles 10 and 11 of the Subscription and Shareholders
Agreement and with respect to the Xxxxxxxx Shares acquired hereunder, Xxxxxxxx
shall have the same rights as it has under Articles 10 and 11 of the
Subscription and Shareholders Agreement.
ARTICLE 8
OBLIGATIONS OF THE COMPANY
Section 8.1 Termination of the Concession. If during the term of this
Agreement the Concession Agreement is terminated for whatever reason, the
proceeds derived from the termination of said agreement ("Termination Proceeds")
payable to the Company by CTBC in accordance with the Concession Agreement and
the applicable laws shall be immediately distributed by the Company to its
Shareholders as cash dividends.
Section 8.2 Vote on Cash Dividend Distribution. In the capacity of
controlling Shareholder of the Company, the Sponsor hereby agrees to vote its
shares in favor of the cash dividends distribution referred to in Section 8
and to cause the Company to hold the relevant shareholders meeting within thirty
(30) days following the actual receipt of the Termination Proceeds by the
Company.
Section 8.3 Affirmative Covenants. Unless Xxxxxxxx otherwise agrees,
the Company shall, and shall cause each of its Subsidiaries and Affiliates to:
(a) carry out the Project and conduct its business with due diligence
and efficiency and in accordance with sound engineering, financial and business
practices and maintain adequate insurance coverage of its business and assets
pursuant to the minimum insurance requirements set forth in Schedule 5.1(c)
hereto and Subsection (y) below;
(b) carry out the Project in accordance with the Project description in
Schedule 2.1;
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(c) cause the financing specified in the Financial Plan to be applied
exclusively to the Project;
(d) promptly install and maintain the accounting and cost control
system and management information system referred to in Section 5.1(b) of this
Agreement, and maintain books of account and other records adequate to reflect
truly and fairly its financial condition and the results of its operations
(including the progress of the Project) in conformity with accounting principles
which are generally accepted in Brazil, consistently applied;
(e) maintain a Debt to Shareholders Equity Ratio not greater than
50/50;
(f) as soon as available, but in any event within sixty (60) days after
the end of each quarter of each Fiscal Year, deliver to Xxxxxxxx, in English at
the Company's expense:
(i) two (2) copies of the Company's complete Financial Statements
and the complete Financial Statements of each of its Subsidiaries for such
quarter prepared in conformity with accounting principles which are generally
accepted in Brazil, consistently applied and, if requested by Xxxxxxxx,
certified by an officer of the relevant company;
(ii) a report on any factors materially affecting or which might
materially affect the Company's business and operations or the business and
operations of any of its Subsidiaries or its financial condition;
(iii) during implementation of the Project, a report, in a form
satisfactory to Xxxxxxxx, on the implementation and progress of the Project,
including any factors materially affecting or which might materially affect the
Project or the implementation of the Financial Plan;
(iv) as requested by Xxxxxxxx, a semi-annual statement by the
Company of all material transactions between the Company, any Subsidiary or
Affiliate and any company of the Algar Group, and a certification by the chief
financial officer of the Company and its Auditors that those transactions were
and remain on the basis of arms'-length arrangements. For the purposes hereof,
the term "material" shall mean any transaction (or a series of related
transactions) valued at or resulting in a liability equal to or exceeding One
Hundred Thousand U.S. Dollars (U.S.$100,000) or its Dollar Equivalent in Reais.
For the purposes of such Auditor's certifications, the Auditors shall adhere to
the reporting standards established (A) by the securities laws and regulations
and stock exchange rules then in effect in Brazil, including without limitation,
the rules and regulations promulgated by the Comisao de Valores Mobiliarios
(CVM) and (B) by December 31, 1997, by the securities laws and regulations and
stock exchange rules then in effect in the United States of America, including
without limitation, the rules and regulations promulgated under the Securities
Acts of 1933 and 1934 and by the U.S. Securities and Exchange Commission; and
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(v) a statement of all shares, if any, of CTBC acquired during such
quarter by the Sponsor or any of its Subsidiaries or Affiliates;
(g) as soon as available but in any event within one hundred and twenty
(120) days after the end of each Fiscal Year, deliver to Xxxxxxxx, in English at
the Company's expense:
(i) two (2) copies of the complete Financial Statements of the
Company and each of its Subsidiaries for such Fiscal Year (which are in
agreement with its books of account and prepared in accordance with accounting
principles which are generally accepted in Brazil, consistently applied),
together with an audit report on them;
(ii) a copy of any management letter or other communication from
the Auditors to the Company or to any of its Subsidiaries commenting, with
respect to such Fiscal Year, on, among other things, the adequacy of the
relevant company's financial control procedures and accounting systems and
management information system;
(iii) a report by the Auditors certifying that, based on the
relevant financial statements, the Company and its Subsidiaries were in
compliance with the financial covenant contained in Subsection (e) above as of
the end of the relevant Fiscal Year or, as the case may be, detailing any
non-compliance;
(iv) a review of the operations of both the Company and its
Subsidiaries during such Fiscal Year, in a form satisfactory to Xxxxxxxx,
containing the information listed in Schedule 12.3(g)(iv); and
(v) a statement by the Company of all transactions between the
Company, any Subsidiary or Affiliate and any company of the Algar Group during
such Fiscal Year and a certification by the chief financial officer of the
Company and its Auditors that those transactions were and remain on the basis of
arms'-length arrangements; for the purposes of such Auditor's certifications,
the Auditors shall adhere to the reporting standards established (A) by the
securities laws and regulations and stock exchange rules then in effect in
Brazil, including without limitation, the rules and regulations promulgated by
the Comisao de Valores Mobiliarios (CVM) and (B) by December 31, 1997, by the
securities laws and regulations and stock exchange rules then in effect in the
United States of America, including without limitation, the rules and
regulations promulgated under the Securities Acts of 1933 and 1934 and by the
U.S. Securities and Exchange Commission; and
(h) the Company shall request and make best efforts to obtain from its
Affiliates as soon as possible the information and documentation referred to in
Subsection (f) (i) and (ii) and Subsection (g) (i) through (iv) above and shall
provide Xxxxxxxx with the relevant information and documentation as soon as they
are available;
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(i) deliver to Xxxxxxxx promptly following receipt a copy of any
management letter or other communication sent by the Auditors or any accountants
retained by the Company and the Subsidiaries to the relevant company or to its
management in relation to the financial, accounting and other systems,
management or accounts of the relevant company if not provided pursuant to
Subsection (g) (ii) above, in English at the Company's expense;
(j) promptly notify Xxxxxxxx by facsimile not less than ten (10) days
before any meeting of the Board of Directors and shareholders? meetings of the
Company including the agenda of such meetings;
(k) promptly deliver to Xxxxxxxx two (2) copies, in English at the
Company's expense of:
(i) all notices, reports and other communications of the Company to
its shareholders; and
(ii) the minutes of all board of directors? and shareholders'
meetings;
(l) promptly provide to Xxxxxxxx such information as Xxxxxxxx from time
to time shall reasonably request about the Company and any company of the
Company Group;
(m) permit representatives of Xxxxxxxx to visit any of the premises
where the businesses of the Company and its Subsidiaries are conducted and to
have access to the books of account and records of the relevant company to the
extent necessary to permit Xxxxxxxx an evaluation of the performance of the
relevant company; provided that Xxxxxxxx notifies the Company in writing of the
purpose of any of such visit at least fifteen (15) calendar days prior to the
date of the proposed visit;
(n) promptly notify Xxxxxxxx of any proposed change in the nature or
scope of the Project or the business or operations of the Company and of any
event or condition which might materially and adversely affect the carrying out
of the Project or the carrying on of the Company's business or operations or the
operations and business of any of its Subsidiaries or Affiliates;
(o) promptly notify Xxxxxxxx by facsimile as soon as it becomes aware
of any litigation or administrative proceedings before any Authority or arbitral
body which materially and adversely affects or may have a material and adverse
effect on the Company, any Subsidiary or Affiliate, its assets or the Project or
on the ability of the relevant company to perform and observe its obligations
under any Transaction Document, including this Agreement;
(p) design, construct, operate and maintain all of its plant
and equipment in compliance with the applicable laws and regulations, as well
as the applicable
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environmental, occupational health and safety requirements of the Government
of Brazil, the local authorities and applicable World Bank Guidelines;
(q) within forty-five (45) calendar days after the end of each Fiscal
Year, deliver to Xxxxxxxx an annual monitoring report, in the form specified by
the International Finance Corporation, confirming compliance with the applicable
national and local requirements and standards, as well as the compliance with
the World Bank Guidelines referred to in Subsection (p) above or, as the case
may be, detailing any non compliance together with the action being taken to
ensure compliance;
(r) if Xxxxxx Xxxxxxxx ceases to be the Auditors of the Company for any
reason, appoint and maintain as the auditors of the Company another firm of
independent public accountants of international standing and sound reputation;
(s) obtain and maintain in force (or where appropriate, promptly renew)
all Authorizations necessary for carrying out the Project and the Company's
business and operations generally;
(t) perform and observe all the conditions and restrictions contained
in, or imposed on the Company by, any such Authorizations;
(u) provide Xxxxxxxx within thirty (30) days prior to the start of each
Fiscal Year with a plan detailing the Company Group's investment program in the
Telecommunications and Information Technology Sector and funding of such program
for the relevant Fiscal Year;
(v) file all relevant tax returns and pay all taxes promptly upon the
same becoming due except to the extent that the taxes are being contested in
good faith and by appropriate means and an adequate reserve has been set aside
with respect thereto;
(w) cause its Subsidiaries and Affiliates to negotiate in good faith
access and interconnect agreements with any other telecommunications operators
in Brazil as may be required by the relevant Authorities;
(x) contest where practicable all acts or proceedings by any
governmental Authorities that might reasonably be expected to adversely affect
any Concession, Portaria, license or consent necessary for the conduct of the
operations of any company of the Company Group or the performance of the
obligations of the relevant company in respect of the transactions contemplated
hereby;
(y) insure its assets and properties against general third party,
including product liability covering all of its activities, with a minimum loss
limit of one million Dollars ($1,000,000) Equivalent, naming Xxxxxxxx as
"additional insured" under the liability policy
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and provide Xxxxxxxx with a statement of the Company's overall insurance
strategy for the protection of its assets and operations;
(z) comply with and cause its subsidiaries and Affiliates to comply
with all of the provisions of the mortgages, charges and other liens or
contracts and arrangements set forth in Schedule 3.3(p) and all of the
agreements entered into with the International Finance Corporation mentioned in
Section 3.4(q);
(aa) all: (i) dealings between the Sponsor or any of its Subsidiaries
or Affiliates, on the one hand, and the Company or any company of the Company
Group, on the other hand; and (ii) investments in any company of the Company
Group, made directly or indirectly by shareholders, directors, officers and
other top-level management personnel of any company of the Algar Group, shall
be: (A) established and remain on normal arm's-length terms as if between
unrelated parties and in accordance with the provisions of Brazilian corporate
law regarding fiduciary duties of administrators in respect of Business
Opportunities, and regarding the protection of minority shareholders' rights;
and (B) disclosed to Xxxxxxxx in writing on a timely basis and in accordance
with the reporting standards established by the securities laws and regulations
and stock exchange rules then in effect in Brazil and the United States of
America;
(ab) prior to or at the Closing adopt a Board resolution substantially
identical to the resolution described in Section 10.11 of the Subscription and
Shareholders Agreement; and
(ac) the Company shall take and it shall cause its Subsidiaries and
Affiliates to take any action that Xxxxxxxx may reasonably request to give
effect to the provisions contained in this Agreement, providing Xxxxxxxx with
evidence thereof.
Section 8.4 Negative Covenant. Unless Xxxxxxxx agrees, the Company
shall not and shall cause each of its Subsidiaries not to: (a) sell, transfer,
lease or otherwise dispose of all or a substantial part of its assets (whether
in a single transaction or in a series of transactions, related or otherwise)
other than sales, transfers, leases or other forms of disposal in the ordinary
course of business; (b) create or permit to exist any Lien on any of, its
property, revenues or other assets, present or future, except for security
created to secure all or any part of indebtedness incurred or assumed by the
Company or by any of its Subsidiaries to pay all or any part of the purchase
price of any property or assets acquired by the Company or by any of its
Subsidiaries after the date of this Agreement, provided that any such security
shall be confined solely to the property or asset so acquired; or (c) propose or
vote in favor of any shareholder or Board resolution of the Company to increase
the capital of the Company, if such resolution is in conflict with the
anti-dilution rights of Xxxxxxxx under Brazilian law, the Estatuto Social of the
Company, or the provisions of this Agreement, including without limitation,
Sections 3.1(d), 4.1, 4.2(b)(iv), 7.8, 10.3(a)(ii), 10.6 and 10.7 of the
Subscription and Shareholders Agreement.
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ARTICLE 9
XXXXXXXX PUT OPTION
Section 9.1 Xxxxxxxx shall have the option, exercisable in its
discretion, at any time during the Exercise Period, by delivering to the Sponsor
a Notice of Exercise, with a copy to the Company, to sell to the Sponsor all,
but not less than all, of the Option Shares then held by Xxxxxxxx at the greater
of the Exercise Price or the Floor Price, and otherwise upon the terms and
conditions of this Agreement, and the Sponsor hereby agrees to purchase and pay
for such Option Shares in accordance herewith.
Section 9.2 After receiving the Notice of Exercise, the Sponsor shall
on the Settlement Date and at the Settlement Place, pay to Xxxxxxxx in full, in
Dollars, in immediately available funds, to the bank account in the City of New
York, New York, United States of America, designated by Xxxxxxxx, the Exercise
Price.
Section 9.3 Xxxxxxxx shall, on the Settlement Date at the Settlement
Place, against payment in full of the Exercise Price for the Option Shares,
execute in the relevant corporate books of the Company deeds of transfer for the
Option Shares purchased by the Sponsor and shall, as appropriate, endorse in the
name of the Sponsor or deliver to the Company for cancellation the share
certificates (or the provisional share certificates) issued by the Company
representing such Option Shares, free and clear of all Liens, together with all
documents required to transfer title to such Option Shares to the Sponsor.
Section 9.4 Without prejudice to any remedies available to Xxxxxxxx
under this Agreement or otherwise, in the event that, after Xxxxxxxx shall have
delivered a Notice of Exercise of the Sponsor, the Sponsor shall fail to
purchase and pay for all or any of the Option Shares specified in the Notice of
Exercise as herein provided, Xxxxxxxx shall be free to sell, transfer or
otherwise dispose of any such unpurchased and unpaid Option Shares to a third
party willing to purchase such unpurchased and unpaid Option Shares, without
affecting any rights Xxxxxxxx may have against the Sponsor for the failure to
purchase or pay for the Option Shares specified in the Notice of Exercise,
including the rights set forth in Section 10.3(i) hereof.
Section 9.5 Nothing in this Agreement shall limit the right of
Xxxxxxxx, at any time, to sell, transfer or otherwise dispose of all of its
Option Shares which are not then subject to a Notice of Exercise.
Section 9.6 (a) The Sponsor shall not take any action, including,
without limitation, voting in favor of any resolution of the Shareholders of the
Company, which would permit the Estatuto Social of the Company to be amended in
a way that may impair the exercise of, or that may alter or prejudice the rights
of Xxxxxxxx in relation to the Put Option.
(b) The Sponsor shall procure that any Shareholder of the Company
waives whatever right of first refusal such Shareholder may have in respect of
the transfer of the
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Option Shares to the Sponsor (whether set out in the Estatuto Social of the
Company or otherwise) insofar as it is necessary so to do in order to give
effect to the provisions of the Put Option.
ARTICLE 10
MISCELLANEOUS
Section 10.1 Information to Third Party. The Seller, the Company and
the Sponsor agree to inform any Third Party and Investor of this Agreement and
to cause the relevant party to adhere and be bound by all the terms and
conditions set forth herein as a condition precedent to the actual acquisition
and/or subscription of any Share of the Company.
Section 10.2 Entire Agreement. This Agreement and the Subscription and
Shareholders Agreement, and their respective Schedules and Exhibits, and all
other documents delivered at the Closing, constitute 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.
Section 10.3 Jurisdiction.
(a) At the option of Xxxxxxxx, 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 of the
Seller, the Company and the Sponsor irrevocably submits to the jurisdiction of
any such court in any action, suit or proceeding arising out of or relating to
this Agreement or any other Transaction Document to which any of such party is a
party and each of such parties designates, appoints and empowers CT 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 Xxxxxxxx elects to bring in the State of New York.
Notwithstanding the foregoing, Xxxxxxxx reserves the right to make personal
service on each of the Seller, the Company and the Sponsor of any summons,
complaint or other legal process in any action, suit or proceeding.
(c) As long as this Agreement remains in force, each of the
Seller, the Company and the Sponsor 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 Xxxxxxxx may bring in the courts of the City
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of New York in respect of this Agreement or any other Transaction Document to
which any of the above parties is a party. The Seller, the Company and the
Sponsor shall keep Xxxxxxxx advised of the identity and location of such agent.
(d) Each of the Seller, the Company and the Sponsor also irrevocably
consents, if for any reason the Seller's, the Company's or the Sponsor?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, Xxxxxxxx shall also send by telex or facsimile, or have sent by
telex or facsimile, a copy of the papers to the Seller, the Company or the
Sponsor, as the case may be.
(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 the Seller, the Company or the Sponsor, as the case may be, as such and shall
be valid and binding upon the relevant party for all purposes of any such
action, suit or proceeding.
(f) Each of the Seller, the Company and the Sponsor 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 Xxxxxxxx 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 the Seller and/or the Company and/or
the Sponsor by Xxxxxxxx.
(g) To the extent that any of the Seller, the Company or the Sponsor
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 any other Transaction Document to which any of the above parties is
a party 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, each of the Seller, the Company and the
Sponsor irrevocably agrees not to claim and irrevocably waives such immunity to
the fullest extent permitted by the laws of any of such jurisdictions.
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(h) To the extent that the Seller, the Company and/or the Sponsor 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 or any
other Transaction Document to which the Seller, the Company and/or the Sponsor
is a party, be entitled to the benefit of any provision of law requiring
Xxxxxxxx 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 of the Seller, the Company and the Sponsor 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 Xxxxxxxx brings any legal action, suit or proceeding arising out
of or relating to this Agreement or any other Transaction Document to which the
Seller, the Company or the Sponsor is a party, 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 under
any of the Transaction Documents, 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.
(j) The parties hereto hereby acknowledge that the mere payment of
damages by the defaulting party to the non-defaulting parties shall not be
deemed appropriate indemnification for the failure by such defaulting party to
comply with its obligations hereunder or under any of the Transaction Documents.
Section 10.4 Counterparts. This Agreement may be signed in one or more
counterpart copies all of which, when taken together, shall constitute one
document.
Section 10.5 Assignment. This Agreement shall bind and inure to the
benefit of the parties hereto, their successors and assigns. No party may assign
or transfer any of its rights and obligations hereunder, provided that Xxxxxxxx
may assign, in whole or in part, the Shares it comes to hold in the Company; and
provided, further, that Xxxxxxxx may also assign to any Third Party which comes
to acquire at least fifty per cent (50%) of the Xxxxxxxx Shares acquired
hereunder the rights mentioned in Articles 7 and 9, but no other rights.
Section 10.6 Translation and Registration. The Company agrees to effect
an official translation of this Agreement into Portuguese, and subject to the
prior review and approval of such translation by Xxxxxxxx or its advisors, to
register this Agreement with the Cartorio de Registro de Titulos e Documentos in
the relevant jurisdiction and to provide Xxxxxxxx with a copy of such
translation and satisfactory evidence of the registration of this Agreement with
the above mentioned "Cartorio".
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Section 10.7 Translation and Registration Costs. The Company agrees to
bear all the costs and expenses and to pay any and all taxes, charges or fees
that may be levied or assessed on the translation and registration of this
Agreement with the "Cartorio" referred to in the preceding Section.
Section 10.8 Taxes. The Company shall also pay all taxes (including
stamp taxes), duties, fees or other charges payable on or in connection with the
execution, issue and delivery of the Xxxxxxxx Shares and the translation,
registration or notarization of any documents related to this Agreement or to
the Xxxxxxxx Shares, and shall, upon notice from Xxxxxxxx, reimburse Xxxxxxxx or
its assigns for any such taxes, duties, fees or other charges paid by Xxxxxxxx
or its assigns thereon. The Sponsor shall pay all taxes, duties, fees and other
charges incurred in connection with the enforcement, sale, transfer or delivery
of the Option Shares and any documents related thereto so that Xxxxxxxx receives
in its bank account the Exercise Price without deduction for or on account of
any such taxes, duties, fees or other charges. The Company or the Sponsor, as
the case may be, shall reimburse Xxxxxxxx for any such charges paid by Xxxxxxxx
thereon.
Section 10.9 Fees and Expenses. The Company shall pay or cause to be
paid to Xxxxxxxx or as Xxxxxxxx may direct:
(a) the fees and expenses of Xxxxxxxx' counsel in Brazil incurred in
connection with: (i) the preparation of Xxxxxxxx' investment in the Company;
(ii) the preparation, review, execution and, where appropriate, registration,
delivery and translation of each Transaction Document, including this Agreement,
the Xxxxxxxx Shares and any other documents related to this Agreement or the
Xxxxxxxx Shares; (iii) the giving of any legal opinion required by Xxxxxxxx
under this Agreement; (iv) any amendment or modification to, or waiver under,
this Agreement; (v) the registration (where appropriate) and delivery of the
evidences of payments by or to Xxxxxxxx in relation to the Xxxxxxxx acquisition
hereunder; and (vi) the exercise by Xxxxxxxx of its rights or powers consequent
upon, or arising out of, the occurrence of any Event of Suspension and/or
Cancellation; and
(b) all of Xxxxxxxx' reasonable costs and expenses, including legal
fees, incurred by Xxxxxxxx in relation to the protection or enforcement, or
attempted protection or enforcement, of any rights under this Agreement.
Section 10.10 Notices and Requests. Any notice, request or other
communication to be given or made under this Agreement shall be in writing and
except as otherwise provided in this Agreement it shall be deemed to have been
duly given or made when it shall be delivered by hand, mail (or airmail if sent
to another country), cable, telex or telecopier to the party to which it is
required or permitted to be given or made at the relevant address for
communications of such party which is specified at the opening of this Agreement
or at such other address for communication as any party shall have designated by
notice to the parties giving or making such notice, request or other
communication.
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Section 10.11 Evidence of Authority. The Seller shall furnish to
Xxxxxxxx the Certificate of Incumbency and Authority, that is, a certificate, in
the form of Exhibit 1.1(v) and in substance satisfactory to Xxxxxxxx, evidencing
the authority of the person or persons who will, on behalf of the Seller, sign
the requests and certifications provided for in this Agreement, or take any
other action or execute any other document required or permitted to be taken or
executed by the Seller under this Agreement, and the authenticated specimen
signature of each such person.
Section 10.12 Saving of Rights.
(a) No course of dealing or waiver by Xxxxxxxx in connection with any
condition of Xxxxxxxx acquisition of the Xxxxxxxx Purchased Shares shall impair
any right, power or remedy of Xxxxxxxx with respect to any other condition, or
be construed to be a waiver thereof.
(b) Unless otherwise notified to the Seller, the Company or the Sponsor
by Xxxxxxxx and without prejudice to the generality of Subsection (a) above, the
right of Xxxxxxxx to require compliance with any condition under this Agreement
which may be waived by Xxxxxxxx in respect of the Xxxxxxxx acquisition of the
Xxxxxxxx Purchased Shares or in connection with any right granted to Xxxxxxxx
hereunder is expressly preserved for the purposes of future exercise of any of
the Xxxxxxxx' rights hereunder.
(c) No course of dealing and no delay in exercising, or omission to
exercise, any right, power or remedy accruing to Xxxxxxxx upon any default under
this Agreement or any other agreement, including the other Transaction
Documents, shall impair any such right, power or remedy or be construed to be a
waiver thereof or an acquiescence therein; nor shall the action of Xxxxxxxx in
respect of any such default, or any acquiescence by it therein, affect or impair
any right, power or remedy of Xxxxxxxx in respect of any other default.
(d) Waiver of a breach of this Agreement or of any power, right
authority, discretion or remedy arising upon a breach of this Agreement must be
in writing and signed by the party granting the waiver. A breach of this
Agreement is not waived by any failure or delay in exercise, or partial
exercise, of any power, right, authority, discretion or remedy. A power, right,
authority, discretion or remedy created or arising upon a breach of this
Agreement is not waived by any failure or delay in the exercise, or a partial
exercise, of that or any other power, right, authority, discretion or remedy.
Section 10.13 English Language. All documents to be furnished or
communications to be given or made under this Agreement shall be in the English
language or, if in another language, shall be accompanied by a translation into
English certified by a representative of the Company or the Sponsor, as the case
may be, which English translations shall be the governing version between the
parties hereto.
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Section 10.14 Term of Validity. This Agreement shall be valid as of the
date of its signing and shall continue to be in full force until the earlier of
(i) ten (10) years after the date of its signing, or (ii) the date on which
Xxxxxxxx ceases to hold at least fifty per cent (50%) of the Xxxxxxxx Shares
subscribed pursuant to this Agreement.
Section 10.15 No Deduction. Any payments to Xxxxxxxx hereunder
associated with or resulting from the implementation of any transaction
contemplated to herein shall be made without deduction on or for the account of
any taxes, fees, duties or other charges.
IN WITNESS WHEREOF, the parties hereto, acting through their duly
authorized representatives, have caused this Agreement to be signed in its
names, as of the date first above written.
ABC INDUSTRIA E COMERCIO S.A. - ABC INCO
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
XXXXXXX X.X. TECNOLOGIA DA INFORMACAO
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
XXXXX X.X. - EMPREEENDIMENTOS E PARTICIPACOES
By:
-----------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
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XXXXXXXX INTERNATIONAL TELECOM LIMITED
By: /s/ XXXX X. XXXXXXXXX, XX.
----------------------------------------
Name:
---------------------------------------
Title:
---------------------------------------
Witnesses:
1.
---------------------------
Name
ID No.
2.
----------------------------
Name
ID No.
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