EXHIBIT 2.5
EXECUTION COPY
SHARE PURCHASE AGREEMENT
dated as of
September 25, 2003
by and among
VESPER HOLDING, LTD.,
QUALCOMM DO BRASIL LTDA.
and
EMBRATEL PARTICIPACOES S.A.
TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to which
it is attached but is inserted for convenience only.
PAGE
NO.
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ARTICLE I DEFINITIONS........................................................................................... 1
1.01 Definitions...................................................................................... 1
ARTICLE II SALE OF SHARES AND CLOSING........................................................................... 8
2.01 Certain Other Agreements......................................................................... 8
2.02 Purchase and Sale................................................................................ 8
2.03 Purchase Price................................................................................... 8
2.04 Closing.......................................................................................... 8
2.05 Other Documents.................................................................................. 8
2.06 Further Assurances............................................................................... 8
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLERS........................................................... 8
3.01 Corporate Existence.............................................................................. 9
3.02 Authority........................................................................................ 9
3.03 Corporate Existence of the Brazilian Holding Companies and the Operating Companies............... 9
3.04 Capitalization................................................................................... 9
3.05 No Conflicts..................................................................................... 10
3.06 Governmental Approvals and Filings............................................................... 11
3.07 Affiliate Transactions........................................................................... 11
3.08 Financial Statements............................................................................. 11
3.09 Books and Records................................................................................ 11
3.10 Taxes............................................................................................ 11
3.11 Compliance with Legal Requirements............................................................... 12
3.12 Legal Proceedings; Orders........................................................................ 12
3.13 Software and Intellectual Property............................................................... 12
3.14 Brokers.......................................................................................... 12
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER.......................................................... 13
4.01 Corporate Existence.............................................................................. 13
4.02 Authority........................................................................................ 13
4.03 No Conflicts..................................................................................... 13
4.04 Governmental Approvals and Filings............................................................... 14
4.05 No Other Negotiations............................................................................ 14
4.06 Brokers.......................................................................................... 14
ARTICLE V COVENANTS............................................................................................. 14
5.01 Regulatory and Other Approvals................................................................... 14
5.02 No Solicitations................................................................................. 15
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5.03 Sale of Real Estate Assets....................................................................... 15
5.04 Operating Company Operations..................................................................... 15
5.05 Key Employees.................................................................................... 18
5.06 Conduct of Business.............................................................................. 18
5.07 Right of Last Refusal............................................................................ 18
5.08 No Change of Control Until ANATEL Approval....................................................... 19
5.09 Guarantees....................................................................................... 19
5.10 Vesper Sale...................................................................................... 19
5.11 Certain Transfers................................................................................ 19
ARTICLE VI CONDITIONS TO OBLIGATIONS OF PURCHASER............................................................... 19
6.01 Representations and Warranties................................................................... 19
6.02 Performance...................................................................................... 20
6.03 Orders and Laws; Proceedings..................................................................... 20
6.04 Regulatory Consents and Approvals................................................................ 20
6.05 Other Transactions............................................................................... 20
6.06 QUALCOMM Funding................................................................................. 21
6.07 Business Plan.................................................................................... 21
6.08 Capital Leases and Indebtedness.................................................................. 21
6.09 Licenses......................................................................................... 21
6.10 QUALCOMM Indemnity Agreement..................................................................... 21
6.11 Certain Transfers................................................................................ 21
6.12 Provision........................................................................................ 21
6.13 QUALCOMM Confirmation Letter..................................................................... 21
6.14 Due Diligence.................................................................................... 21
ARTICLE VII CONDITIONS TO OBLIGATIONS OF SELLERS................................................................ 22
7.01 Representations and Warranties................................................................... 22
7.02 Performance...................................................................................... 22
7.03 Orders and Laws; Proceedings..................................................................... 22
7.04 Regulatory Consents and Approvals................................................................ 22
7.05 Other Transactions............................................................................... 22
7.06 Resolution and Settlement Agreements............................................................. 23
7.07 Vesper Spectrums................................................................................. 23
ARTICLE VIII TERMINATION; SURVIVAL; LIMIT ON DAMAGES............................................................ 23
8.01 Termination...................................................................................... 23
8.02 Effect of Termination............................................................................ 24
8.03 Survival of Representations and Warranties....................................................... 24
8.04 Damages.......................................................................................... 24
8.05 Notice/Knowledge of Breach....................................................................... 25
ARTICLE IX MISCELLANEOUS........................................................................................ 25
9.01 Notices.......................................................................................... 25
9.02 Entire Agreement................................................................................. 26
9.03 Expenses......................................................................................... 26
9.04 Public Announcements............................................................................. 27
9.05 Confidentiality.................................................................................. 27
9.06 Waiver........................................................................................... 27
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9.07 Amendment........................................................................................ 28
9.08 No Third Party Beneficiary....................................................................... 28
9.09 No Assignment; Binding Effect.................................................................... 28
9.10 Headings......................................................................................... 28
9.11 Invalid Provisions............................................................................... 28
9.12 Governing Law.................................................................................... 28
9.13 Dispute Resolution............................................................................... 28
9.14 Specific performance............................................................................. 29
EXHIBITS
Exhibit A Shares in the Brazilian Holding Companies and the Operating
Companies
Exhibit B Business Plan
Exhibit C QUALCOMM Confirmation Letter
Exhibit D QUALCOMM Funding Agreement
Exhibit E QUALCOMM Indemnity Agreement
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SHARE PURCHASE AGREEMENT dated as of September 25, 2003, by
and among VESPER HOLDING, LTD. ("VHL"), a Cayman Islands company, QUALCOMM DO
BRASIL LTDA., a limitada organized under the Laws of Brazil ("QdB" and, together
with VHL, "Sellers"), and EMBRATEL PARTICIPACOES S.A., a sociedade por acoes
organized under the Laws of Brazil ("Purchaser"). Capitalized terms not
otherwise defined herein have the meanings set forth in Section 1.01.
WHEREAS, Sellers own such number of shares of capital stock of
Vesper Holding S.A. and Vesper Holding Sao Paulo S.A., each a sociedade por
acoes organized under the Laws of Brazil (collectively, the "Brazilian Holding
Companies"), as are set forth opposite each Seller's name in Exhibit A attached
hereto, which number of shares, in the aggregate, constitute all the issued and
outstanding shares of capital stock of the Brazilian Holding Companies (the
"Shares");
WHEREAS, the Brazilian Holding Companies and QdB own such
number of shares of capital stock of Xxxxxx X.X. and Xxxxxx Sao Paulo S.A., each
a sociedade por acoes organized under the Laws of Brazil (collectively, the
"Operating Companies"), as are set forth opposite each such party's name in
Exhibit A attached hereto, which number of shares, in the aggregate, constitute
all the issued and outstanding shares of capital stock of the Operating
Companies as of the date hereof (the "Opco Shares");
WHEREAS, on the terms and subject to the conditions set forth
in this Agreement, each Seller desires to sell, and Purchaser desires to
purchase, such number of Shares as are set forth opposite each Seller's name in
Exhibit A attached hereto, which, together with any shares that may be issued to
VHL in the capitalization of the Bridge Loans (the "Additional Shares"), in the
aggregate, shall constitute all of the issued and outstanding shares of capital
stock of the Brazilian Holding Companies and the Operating Companies on the
Closing Date (as defined herein);
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, including the representations and
warranties hereunder and in the other documents attached or delivered in
connection herewith, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
1.01 Definitions.(a) Defined Terms. As used in this Agreement,
the following defined terms have the meanings indicated below:
"Acquirer" has the meaning set forth in Section 5.04(g).
"Acquisition Proposal" means any proposal for a merger,
acquisition or other business combination to which any of the Operating
Companies is a party or the direct or indirect acquisition of any equity
interest in, or a substantial portion of the assets of, the Operating Companies,
other than the transactions contemplated by this Agreement.
"Additional Shares" has the meaning set forth in the preamble.
"Affiliate" means any Person that directly, or indirectly
through one of more intermediaries, controls or is controlled by or is under
common control with the Person specified. For purposes of this definition,
control of a Person means the power, direct or indirect, to direct or cause the
direction of the management and policies of such Person whether by Contract or
otherwise and, in any event and without limitation of the previous sentence, any
Person owning more than fifty percent (50%) of the voting securities of another
Person shall be deemed to control that Person.
"Agreement" means this Share Purchase Agreement, the Exhibits,
and the Schedules hereto, as the same shall be amended from time to time, among
the parties hereto in accordance with Section 9.07 below.
"ANATEL" means Agencia Nacional de Telecomunicacoes.
"ANATEL Resolution" means ANATEL's Resolution No. 101 dated
February 4, 1999.
"Brazil" means the Federative Republic of Brazil.
"Brazilian Holding Companies" has the meaning set forth in the
preamble.
"Bridge Loan Assignment Agreement" means the Bridge Loan
Assignment Agreement among QUALCOMM or an Affiliate thereof and VHL to be
entered into at or prior to the Closing Date, pursuant to which VHL shall
acquire the Bridge Loans and shall exchange the Bridge Loans for shares of
capital stock in the Operating Companies.
"Bridge Loans" means all of the outstanding loans made by
QUALCOMM or an Affiliate thereof to the Operating Companies, including all
interest accrued until the date of exchange for shares of the Operating
Companies.
"Business Day" means a day other than Saturday, Sunday or any
day on which commercial banks located in New York City, the city of Sao Paulo or
the city of Rio de Janeiro are authorized or required by Law to remain closed.
"Business Plan" means the business plan developed by QUALCOMM
and the Operating Companies, attached as Exhibit B hereto.
"XXXX" means Conselho Administrativo de Defesa Economica.
"Closing" has the meaning set forth in Section 2.04.
"Closing Date" means (a) the third Business Day (or as
promptly thereafter as practicable) after the day on which the last of the
consents, approvals, actions, filings, notices or waiting periods described in
or related to the filings described in Sections 6.03 and 6.04 and Sections 7.03
and 7.04 has been obtained, made or given or has expired, as applicable, or (b)
such other date as Purchaser and Seller mutually agree upon in writing.
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"Contract" means any agreement, lease, license, evidence of
Indebtedness, mortgage, indenture, security agreement or other contract.
"CT Leasing" means CT Leasing, a Cayman Islands company.
"Definitive Agreements" means, in addition to this Agreement,
the Bridge Loan Assignment Agreement, any corporate documentation pursuant to
which the Operating Companies issue equity, if any, in respect of the
capitalization of the Bridge Loans by VHL or the capitalization in connection
with the QUALCOMM Funding, the Services Agreement, the Tower Sale and Lease
Agreements, the Settlement and Forbearance Agreement, the Settlement and General
Release Agreement, the Resolution and Settlement Agreement, the QUALCOMM Funding
Agreement, the QUALCOMM Indemnity Agreement and such related ancillary
agreements, if and as necessary, including but not limited to any mandatory
agreements required by applicable Laws or regulations in Brazil in connection
with the transactions contemplated herein.
"Dollar" or "US$" means the lawful currency of the United
States of America.
"Embratel" means Empresa Brasileira de Telecomunicacoes S.A. -
Embratel, a sociedade anonima organized under the laws of Brazil.
"Governmental Authority" means the government of Brazil or of
any other nation, or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity (including any federal or other association of or with which any
such nation may be a member or associated) exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Guarantees" has the meaning set forth in Section 5.09.
"ICC" has the meaning set forth in Section 9.13(b).
"Indebtedness" of any Person means all obligations of such
Person (i) for borrowed money, (ii) evidenced by notes, bonds, debentures or
similar instruments, (iii) for the deferred purchase price of goods or services
(other than trade payables or accruals incurred in the ordinary course of
business), (iv) under capital leases and (v) in the nature of guarantees of the
obligations described in clauses (i) through (iv) above of any other Person.
"Knowledge" of any Person means the actual knowledge of the
executive officers of such Person.
"Laws" means all laws, statutes, rules, regulations,
ordinances and other pronouncements having the effect of law of any state,
county, city or other political subdivision or of any Governmental Authority.
"Licenses" means all licenses, permits, certificates of
authority, authorizations, approvals, registrations, franchises and similar
consents granted or issued by any Governmental Authority.
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"Liens" means any mortgage, pledge, assessment, security
interest, lease, lien, adverse claim, levy, charge, court or administrative
attachment order ("embargos") or other encumbrance of any kind.
"Losses" means all actual losses, liabilities, obligations,
damages, settlements, awards or judgments, and all reasonable costs and
expenses, including reasonable legal fees and expenses, other than any indirect,
special, punitive, exemplary or consequential loss or damage (perdas e xxxxx
indiretos e/ou perdas e xxxxx punitivos) (including any loss of revenue or
profit).
"Notice of Determination" has the meaning set forth in Section
5.07(a).
"Notice of Election" has the meaning set forth in Section
5.07(a).
"Opco Shares" has the meaning set forth in the preamble.
"Operating Companies" has the meaning set forth in the
preamble.
"Operating Period" has the meaning set forth in Section
5.04(a).
"Option" with respect to any Person means any security, right,
subscription, warrant, option, "phantom" stock right or other Contract that
gives the right to (i) purchase or otherwise receive or be issued any shares of
capital stock of such Person or any security of any kind convertible into or
exchangeable or exercisable for any shares of capital stock of such Person or
(ii) receive or exercise any benefits or rights similar to any rights enjoyed by
or accruing to the holder of shares of capital stock of such Person, including
any rights to participate in the equity or income of such Person or to
participate in or direct the election of any directors or officers of such
Person or the manner in which any shares of capital stock of such Person are
voted.
"Order" means any writ, judgment, award, decree, injunction,
ruling or similar order issued, entered, made or rendered by any Governmental
Authority or by any arbitrator (in each such case whether preliminary or final).
"Person" means any natural person, corporation, limited
liability company, general partnership, limited partnership, proprietorship,
other business organization, trust, union, association or Governmental
Authority.
"Proceeding" means any action, arbitration, audit, litigation,
proceeding or suit (whether civil, commercial, criminal, administrative, labor
related or tax related) commenced, brought or conducted by or before, or
otherwise involving as a party, any Governmental Authority or arbitrator.
"Purchase Price" has the meaning set forth in Section 2.03.
"Purchaser" has the meaning set forth in the preamble.
"QdB" has the meaning set forth in the preamble.
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"QUALCOMM" means XXXXXXXX Xxxxxxxxxxxx, a Delaware
corporation.
"QUALCOMM Confirmation Letter" means the QUALCOMM Confirmation
Letter in the form of Exhibit C attached hereto.
"QUALCOMM Funding" means US$6.0 million in funding provided by
QUALCOMM, directly or indirectly, to the Operating Companies in accordance with
the QUALCOMM Funding Agreement, which funding shall not result in any recourse
to or repayment obligation of Purchaser or the Operating Companies from and
after the Closing Date.
"QUALCOMM Funding Agreement" means the Agreement dated as of
the date hereof, by and among the Operating Companies and QUALCOMM, attached as
Exhibit D hereto.
"QUALCOMM Indemnity Agreement" means the Agreement dated as of
the Closing Date, by and among the Operating Companies, Purchaser and QUALCOMM,
in the form attached as Exhibit E hereto, if such Agreement is necessary.
"QUALCOMM Party" has the meaning set forth in Section 5.04(e).
"QUALCOMM Put Closing" has the meaning set forth in Section
5.04(e).
"QUALCOMM Put Notice" has the meaning set forth in Section
5.04(e).
"QUALCOMM Put Purchase Price" has the meaning set forth in
Section 5.04(e).
"QUALCOMM Put Right" has the meaning set forth in Section
5.04(e).
"R$" means the lawful currency of Brazil.
"Resolution and Settlement Agreement" means a Resolution and
Settlement Agreement entered into by and among the Operating Companies and each
Resolution Party pursuant to which the Operating Companies shall have received
an express release from such Resolution Party in respect of such Resolution
Party's Indemnifyable Claim (as defined in the QUALCOMM Indemnity Agreement).
"Resolution Party" means each of CGI Telecom International
Inc. and El Camino Resources Arrendamento Mercantil S.A. (or any successor
thereto).
"Sellers" has the meaning set forth in the preamble.
"Services Agreement" means the Services Agreement between
Purchaser (and its appropriate Affiliates) and the Operating Companies to be
entered into prior to Closing.
"Settlement and Forbearance Agreement" means the Vesper
Settlement and Forbearance Agreement relating to the local bank loans of the
Operating Companies.
"Settlement and General Release Agreement" means the
Settlement and General Release Agreement pursuant to which Xxxx Canada
International Inc. shall pay a negotiated fee
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as directed by QUALCOMM in consideration of the discharge of its guarantees in
respect of the local bank loans to the Operating Companies.
"Shares" has the meaning set forth in the preamble.
"SMP Companies" has the meaning set forth in Section 5.07(a).
"SMP Licenses" means the personal mobile service licenses
granted by ANATEL to Brazzaville S.A. and Vesper SMP S.A. pursuant to auction
No. 002/2002/SPV-ANATEL.
"SMP Affiliate" has the meaning set forth in Section 5.07(a).
"SMP Notice Period" has the meaning set forth in Section
5.07(a).
"SMP Offer" has the meaning set forth in Section 5.07(a).
"SMP Offeror" has the meaning set forth in Section 5.07(a).
"SMP Sale Period" has the meaning set forth in Section
5.07(a).
"SMP Subject Terms" has the meaning set forth in Section
5.07(a).
"Spectrum Acquirer" has the meaning set forth in Section
5.04(g).
"Software" means any computer software or applications other
than computer software or applications (i) readily available to any consumer on
an "off-the-shelf" (i.e., uncustomized) basis, and (ii) in respect of which the
license or user fees to be paid to the owner or licensor thereof are less than
$10,000 (or its equivalent in any currency) per year, or $50,000 (or its
equivalent in any currency) in total.
"Tax" means any income, gross income, foreign exchange (IOF),
withholding, financial transaction (including IOF and CPMF), payroll, social
security (including COFINS, PIS, and social contributions on profits and for
educational funds), workers' compensation, unemployment severance (FGTS),
property (IPTU), excise (IPI), service (ISS), sales, use, license, import,
export, value added (ICMS), goods and services or other similar tax (including
any fee, assessment, or other charge in the nature of or in lieu of any tax),
together with any interest or penalty, in addition to tax, imposed by any
Governmental Authority.
"Tax Authority" means with respect to any Tax, the
Governmental Authority that imposes such Tax and the Governmental Authority (if
any) charged with the collection of such Tax.
"Tower Co." means CT Xxxxxx Ltda., a limitada organized under
the Laws of Brazil.
"Tower Investment Agreement" means the agreement pursuant to
which a third party investor shall agree to make a minority investment in Tower
Leasing Co., or its parent companies.
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"Tower Leasing Co." means CT Leasing Ltda., a limitada
organized under the Laws of Brazil.
"Tower Leasing Co. Quotas" has the meaning set forth in
Section 5.04(e).
"Tower Sale and Lease Agreements" means the agreements
providing for the sale and lease back of certain telecommunication tower assets
and related property to be entered into by the Operating Companies prior to
Closing.
"Transaction Expenses" means any out-of-pocket costs and
expenses, including fees and disbursements of legal counsel, financial advisors
and accountants, of Sellers and their Affiliates, incurred in connection with
the structuring, negotiation, execution and closing of this Agreement and the
Definitive Agreements and the transactions contemplated hereby and thereby, and
the transactions contemplated by the circumstances pursuant to which these
Transaction Expenses are required to be paid pursuant to this Agreement.
"Vesper Acquirer" has the meaning set forth in Section
5.04(e).
"Vesper Acquirer Affiliate" has the meaning set forth in
Section 5.04(e).
"Vesper Proceeds" means, in the case of a Vesper Sale, (i) in
the case of the direct or indirect sale, exchange or purchase of the equity
securities of the Operating Companies, the total consideration paid for such
securities by the Vesper Acquirer, plus the principal amount of all Indebtedness
of the Operating Companies outstanding prior to the consummation of such sale,
exchange or purchase, and (ii) in the case of a sale or disposition of the
assets or properties of the Operating Companies, the total consideration paid
for such assets and properties, plus the net value of any current assets not
sold and the principal amount of all Indebtedness assumed by the Vesper
Acquirer.
"Vesper Roll-up" has the meaning set forth in Section 5.04(g).
"Vesper Sale" has the meaning set forth in Section 5.04(e).
"Vesper Spectrums" means the Operating Companies' designated
spectrums within the range from 1850MHz to 1990MHz and any other successor
spectrum issued by ANATEL or otherwise in exchange for all or a portion the
Vesper Spectrums.
"VHL" has the meaning set forth in the preamble.
(b) Construction of Certain Terms and Phrases. Unless the
context of this Agreement otherwise requires, (i) words of any gender include
each other gender; (ii) words using the singular or plural number also include
the plural or singular number, respectively; (iii) the terms "hereof," "herein,"
"hereby" and derivative or similar words refer to this entire Agreement; (iv)
the terms "Article", "Section" or "Exhibit" refer to the specified Article,
Section or Exhibit of this Agreement; and (v) reference to a Law are to include
references to any such Law as amended or re-enacted whether before or after the
date of this Agreement. Whenever this Agreement refers to a number of days, such
number shall refer to calendar days unless Business Days are specified.
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ARTICLE II
SALE OF SHARES AND CLOSING
2.01 Certain Other Agreements. Sellers and Purchaser shall use
commercially reasonable efforts to negotiate, finalize and cause the execution
and delivery of the Services Agreement and the Tower Sale and Lease Agreements
as promptly as practicable after the date hereof, but, in any event, on or
before the Closing Date.
2.02 Purchase and Sale. Sellers agree to sell to Purchaser,
and Purchaser agrees to purchase from Sellers, all of the right, title and
interest of Sellers in and to the Shares and any Additional Shares at the
Closing on the terms and subject to the conditions set forth in this Agreement.
2.03 Purchase Price. The aggregate purchase price for the
Shares and any Additional Shares is R$1.00 per Seller (the "Purchase Price").
2.04 Closing. The closing of the purchase and sale of the
Shares and any Additional Shares (the "Closing") shall take place at 12 noon at
the offices of Vieira, Rezende, Xxxxxxx e Xxxxxxxxx Advogados S/C, on the
Closing Date. At the Closing, Purchaser shall pay to the Sellers the Purchase
Price in cash. Simultaneously, Sellers shall assign and transfer to Purchaser
all of Sellers' respective rights, title and interest in and to the Shares and
any Additional Shares, by means of the execution of the proper share transfer in
the relevant share transfer book of each Brazilian Holding Company and each
Operating Company to transfer to Purchaser the full ownership of the Shares and
any Additional Shares.
2.05 Other Documents. The following shall have occurred at or
prior to the date hereof:
(i) the execution and delivery of the QUALCOMM
Funding Agreement by the parties thereto; and
(ii) the completion and adoption of the Business
Plan by the Operating Companies.
2.06 Further Assurances. Subject to the terms and conditions
of this Agreement, at any time or from time to time after the Closing, as and to
the extent applicable, each of the parties hereto shall execute and deliver such
other documents and instruments, provide such materials and information and take
such other actions as may reasonably be necessary, proper or advisable, to the
extent permitted by applicable Law, to fulfill its obligations under this
Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
Each Seller severally, and not jointly and severally, hereby
represents and warrants to Purchaser as follows:
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3.01 Corporate Existence. Each Seller is duly organized,
validly existing and in good standing under the Laws of its jurisdiction of
organization. Each Seller has full corporate power and authority to execute and
deliver this Agreement and the Definitive Agreements to which it is a party, to
perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby, including without limitation to
own, hold, sell and transfer (pursuant to this Agreement) the Shares owned by
it.
3.02 Authority. The execution and delivery by each Seller of
this Agreement and the Definitive Agreements to which it is a party, and the
performance by such Seller of its obligations hereunder and thereunder, have
been duly and validly authorized by all requisite corporate action, no other
corporate action on the part of such Seller or its stockholders being necessary.
This Agreement has been duly and validly executed and delivered by each Seller
and constitutes, and upon execution and delivery by Seller and each other party
thereto of the Definitive Agreements to which it is a party, such Definitive
Agreements shall constitute, legal, valid and binding obligations of each Seller
enforceable against such Seller in accordance with their respective terms, in
each case, subject to applicable bankruptcy, reorganization, insolvency,
moratorium and other Laws affecting creditors' rights generally as may be in
effect from time to time.
3.03 Corporate Existence of the Brazilian Holding Companies
and the Operating Companies. (a) Each Brazilian Holding Company is duly
incorporated, validly existing and in good standing under the Laws of Brazil,
and has full corporate power and authority to conduct its business as and to the
extent now conducted and to own, use and lease its assets and properties. Each
Brazilian Holding Company is duly qualified, licensed or admitted to do business
and is in good standing in those jurisdictions in which the ownership, use or
leasing of its assets and properties, or the conduct or nature of its business,
makes such qualification, licensing or admission necessary, except for those
jurisdictions in which the adverse effects of any such failures by any Brazilian
Holding Company to be qualified, licensed or admitted and in good standing could
not in the aggregate reasonably be expected to have a material adverse effect on
the Brazilian Holding Companies.
(b) Each Operating Company is duly incorporated, validly
existing and in good standing under the Laws of Brazil, and has full corporate
power and authority to conduct its business as and to the extent now conducted
and to own, use and lease its assets and properties. Each Operating Company is
duly qualified, licensed or admitted to do business and is in good standing in
those jurisdictions in which the ownership, use or leasing of its assets and
properties, or the conduct or nature of its business, makes such qualification,
licensing or admission necessary, except for those jurisdictions in which the
adverse effects of any such failures by any Operating Company to be qualified,
licensed or admitted and in good standing could not in the aggregate reasonably
be expected to have a material adverse effect on the Operating Companies.
3.04 Capitalization. (a) The authorized capital stock of the
Brazilian Holding Companies consists solely of the Shares. As of the Closing,
there shall be no outstanding Options with respect to the Brazilian Holding
Companies. The Shares are duly authorized, validly issued, outstanding, fully
paid and non-assessable. Upon the Closing, Purchaser shall own good and valid
title to the Shares, beneficially and of record, free and clear of all Liens.
9
(b) As of the date hereof, the authorized capital stock
of the Operating Companies consists solely of the Opco Shares. As of the
Closing, there shall be no outstanding Options with respect to the Operating
Companies. The Opco Shares are, and on the Closing Date, any Additional Shares,
shall be, duly authorized, validly issued, outstanding, fully paid and
non-assessable. Upon the Closing, the Brazilian Holding Companies shall own good
and valid title to the Opco Shares and Purchaser shall own good and valid title
to any Additional Shares, in each case, beneficially and of record, free and
clear of all Liens.
3.05 No Conflicts. The execution and delivery by each Seller
of this Agreement do not, and the execution and delivery by each Seller of the
Definitive Agreements to which it is a party, the performance by such Seller of
its respective obligations under this Agreement and such Definitive Agreements
and the consummation of the transactions contemplated hereby and thereby shall
not:
(a) conflict with or result in a violation or breach of
any of the terms, conditions or provisions of the certificate or articles of
incorporation or by-laws or equivalent document or any resolution adopted by the
board of directors, the officers at a duly constituted meeting, shareholders and
quotaholders of such Seller, or any of the Brazilian Holding Companies or the
Operating Companies, as and to the extent applicable;
(b) subject to obtaining the consents, approvals and
actions, making the filings and giving the notices disclosed in Schedule 3.06
hereto, conflict with or result in a violation or breach of any term or
provision of any Law or Order or, filing with, any Governmental Authority,
applicable to such Seller, the Brazilian Holding Companies, the Operating
Companies or any of their respective assets and properties (other than such
conflicts, violations or breaches (i) which could not in the aggregate
reasonably be expected to adversely affect the validity or enforceability of
this Agreement or any of such Definitive Agreements or to have a material
adverse effect on the Brazilian Holding Companies or the Operating Companies or
(ii) as would occur solely as a result of the identity or the legal or
regulatory status of Purchaser or any of its Affiliates);
(c) except as could not, individually or in the
aggregate, reasonably be expected to be materially adverse to the Brazilian
Holding Companies or the Operating Companies or to adversely affect the ability
of such Seller to consummate the transactions contemplated hereby or by any such
Definitive Agreements or to perform its obligations hereunder or thereunder, (i)
conflict with or result in a violation or breach of, (ii) constitute (with or
without notice or lapse of time or both) a default under, (iii) require Seller
to obtain any consent, approval or action of, make any filing with or give any
notice to any Person as a result or under the terms of, (iv) result in or give
to any Person any right of termination, cancellation, acceleration or
modification in or with respect to, or (v) except for Liens created pursuant to
the Tower Sale and Lease Agreements, result in the creation or imposition of any
Lien upon Seller, the Brazilian Holding Companies or the Operating Companies or
any of their respective assets and properties under, any Contract or License to
which such Seller or any of the Brazilian Holding Companies or the Operating
Companies is a party or by which any of their respective assets and properties
is bound.
10
3.06 Governmental Approvals and Filings. Except as disclosed
in Schedule 3.06, no consent, approval or action of, filing with or notice to
any Governmental Authority on the part of any Seller is required in connection
with the execution, delivery and performance of this Agreement or any of the
Definitive Agreements to which it is a party or the consummation of the
transactions contemplated hereby or thereby, except (i) where the failure to
obtain any such consent, approval or action, to make any such filing or to give
any such notice could not reasonably be expected to adversely affect the ability
of such Seller to consummate the transactions contemplated by this Agreement or
any of such Definitive Agreements or to perform its obligations hereunder or
thereunder, or to have a material adverse effect on the Brazilian Holding
Companies or the Operating Companies, and (ii) those as would be required solely
as a result of the identity or the legal or regulatory status of Purchaser or
any of its Affiliates.
3.07 Affiliate Transactions. Except as disclosed in Schedule
3.07(a) or as contemplated by this Agreement or any of the Definitive
Agreements, (i) there is no Indebtedness between any of the Brazilian Holding
Companies or the Operating Companies, on the one hand, and such Seller, any
officer, director or Affiliate (other than any of the Brazilian Holding
Companies and the Operating Companies) of such Seller, on the other, (ii) such
Seller nor any such officer, director or Affiliate provides or causes to be
provided any assets, services or facilities to any of the Brazilian Holding
Companies or the Operating Companies which are individually or in the aggregate
material to the Brazilian Holding Companies or the Operating Companies, and
(iii) none of the Brazilian Holding Companies or the Operating Companies
provides or causes to be provided any assets, services or facilities to such
Seller or any such officer, director or Affiliate which are individually or in
the aggregate material to the Brazilian Holding Companies or the Operating
Companies.
3.08 Financial Statements. Except as set forth in the notes
thereto, (i) the audited balance sheets of the Brazilian Holding Companies and
their consolidated subsidiaries as of December 31, 2002, and the related audited
consolidated statements of operations, stockholders' equity and cash flows for
the fiscal year then ended, and (ii) the unaudited balance sheets of the
Brazilian Holding Companies and their consolidated subsidiaries as of June 30,
2003, and the related unaudited consolidated statements of operations,
stockholders' equity and cash flows for the first six months of the fiscal year
then ended, were prepared in accordance with Brazilian generally accepted
accounting principles and fairly present in all material respects the
consolidated financial condition and results of operations of the Brazilian
Holding Companies and their consolidated subsidiaries as of the respective dates
thereof and for the respective periods covered thereby.
3.09 Books and Records. The minute books, stock record books,
and other similar records of the Brazilian Holding Companies and the Operating
Companies, as made available to Purchaser prior to the execution of this
Agreement, contain a true and complete record, in all material respects, of all
actions taken at all meetings and by all written consents in lieu of meetings of
the board of directors, shareholders or quotaholders of each of the Brazilian
Holding Companies and the Operating Companies, as and to the extent applicable,
and have been maintained in accordance with all applicable Laws.
3.10 Taxes. Except as set forth in Schedule 3.10, (i) each of
the Brazilian Holding Companies and the Operating Companies has timely filed all
material Tax returns, and
11
all such Tax returns are true, accurate and complete in all material respects;
(ii) all Taxes payable by the Brazilian Holding Companies and the Operating
Companies as a result of their operations have been paid consistently with past
practice adopted by the Brazilian Holding Companies or the Operating Companies,
as applicable, or will be paid prior to the Closing Date on the due date
thereof, and such Taxes have been adequately accrued under Brazilian generally
accepted accounting principles and shown on the financial statements of the
Brazilian Holding Companies and the Operating Companies, as applicable; (iii) no
deficiency for any amount of Tax has been asserted or assessed in writing by any
Tax Authority against any of the Brazilian Holding Companies or the Operating
Companies with respect to any of the Brazilian Holding Companies or the
Operating Companies; (iv) none of the Brazilian Holding Companies or the
Operating Companies has consented to extend the time in which any Tax may be
assessed or collected by any Tax Authority; and (v) none of the Brazilian
Holding Companies or the Operating Companies have commenced, or have received
written notice of, any material ongoing or pending Tax contests with any Tax
Authority with respect to any of such Brazilian Holding Companies or Operating
Companies.
3.11 Compliance with Legal Requirements. Each Brazilian
Holding Company and Operating Company believes that, based on its reasonable
interpretation of applicable Laws, it is in substantial compliance with all
material Laws applicable to it or to the conduct or operation of its business or
the ownership or use of any of its assets in a manner similar to other
telecommunication companies in Brazil, except to the extent that any failure to
comply with such Laws could not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the business of the Brazilian
Holding Companies or the Operating Companies.
3.12 Legal Proceedings; Orders. Except as set forth in
Schedule 3.12, as of the date hereof, none of the Brazilian Holding Companies or
the Operating Companies has commenced or has received service of process in
respect of any Proceedings that, individually or in the aggregate with other
such Proceedings, could reasonably be expected to have a material adverse effect
on the business of the Brazilian Holding Companies or the Operating Companies;
or which could reasonably be expected to result in the issuance of an Order
restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement or any of
the Definitive Agreements.
3.13 Software and Intellectual Property. No allegations have
been made in writing against any Brazilian Holding Company or Operating Company
to the effect that it is infringing any rights of any Person with respect to the
intellectual property and Software owned by, licensed to or used by any
Brazilian Holding Company or Operating Company. All intellectual property and
Software used by any Brazilian Holding Company or Operating Company that is not
owned by such Brazilian Holding Company or Operating Company, as applicable, is
properly licensed to such Brazilian Holding Company or Operating Company, as
applicable, except where failure to properly license such intellectual property
or Software could not, individually or in the aggregate, reasonably be expected
to have a material adverse effect on the Brazilian Holding Companies or the
Operating Companies.
3.14 Brokers. Except for Xxxxxx Xxxxxxx & Co. Incorporated,
whose fees, commissions and expenses are the sole responsibility of Sellers, all
negotiations relative to
12
this Agreement and the Definitive Agreements and the transactions contemplated
hereby and thereby have been carried out by Sellers directly with Purchaser
without the intervention of any Person on behalf of Sellers in such manner as to
give rise to any valid claim by any Person against Purchaser or any of the
Brazilian Holding Companies or the Operating Companies for a finder's fee,
brokerage commission or similar payment.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Sellers as
follows:
4.01 Corporate Existence. Purchaser is duly organized, validly
existing and in good standing under the Laws of Brazil. Purchaser has full
corporate power and authority to execute and deliver this Agreement and the
Definitive Agreements to which it is a party, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby.
4.02 Authority. The execution and delivery by Purchaser of
this Agreement and the Definitive Agreements to which it is a party, and the
performance by Purchaser of its obligations hereunder and thereunder, have been
duly and validly authorized by all requisite corporate action, no other
corporate action on the part of Purchaser or its shareholders being necessary.
This Agreement has been duly and validly executed and delivered by Purchaser and
constitutes, and upon the execution and delivery by Purchaser of the Definitive
Agreements to which it is a party, such Definitive Agreements shall constitute,
legal, valid and binding obligations of Purchaser enforceable against Purchaser
in accordance with their terms, in each case, subject to applicable bankruptcy,
reorganization, insolvency, moratorium and other Laws affecting creditors'
rights generally as may be in effect from time to time.
4.03 No Conflicts. The execution and delivery by Purchaser of
this Agreement do not, and the execution and delivery by Purchaser of the
Definitive Agreements to which it is a party, the performance by Purchaser of
its obligations under this Agreement and such Definitive Agreements and the
consummation of the transactions contemplated hereby and thereby shall not:
(a) conflict with or result in a violation or breach of
any of the terms, conditions or provisions of the certificate or articles of
incorporation or by-laws or equivalent document of Purchaser, or any resolution
adopted by the board of directors, the officers at a duly constituted meeting,
or shareholders of Purchaser;
(b) subject to obtaining the consents, approvals and
actions making the filings and giving the notices disclosed in Schedule 4.04,
conflict with or result in a violation or breach of any term or provision of any
Law or Order or filing with, any Governmental Authority, applicable to Purchaser
or any of its assets and properties (other than such conflicts, violations or
breaches which could not in the aggregate reasonably be expected to adversely
affect the validity or enforceability of this Agreement or any of such
Definitive Agreements); or
(c) except as could not, individually or in the
aggregate, reasonably be
13
expected to adversely affect the ability of Purchaser to consummate the
transactions contemplated hereby or by any such Definitive Agreements or to
perform its obligations hereunder or thereunder, (i) conflict with or result in
a violation or breach of, (ii) constitute (with or without notice or lapse of
time or both) a default under, (iii) require Purchaser to obtain any consent,
approval or action of, make any filing with or give any notice to any Person as
a result or under the terms of, or (iv) result in the creation or imposition of
any Lien upon Purchaser or any of its assets or properties under, any Contract
or License to which Purchaser is a party or by which any of its assets and
properties is bound.
4.04 Governmental Approvals and Filings. Except as disclosed
in Schedule 4.04 hereto, no consent, approval or action of, filing with or
notice to any Governmental Authority on the part of Purchaser is required in
connection with the execution, delivery and performance of this Agreement or the
Definitive Agreements to which it is a party or the consummation of the
transactions contemplated hereby or thereby, except where the failure to obtain
any such consent, approval or action, to make any such filing or to give any
such notice could not reasonably be expected to adversely affect the ability of
Purchaser to consummate the transactions contemplated by this Agreement or any
of such Definitive Agreements or to perform its obligations hereunder or
thereunder.
4.05 No Other Negotiations. None of Purchaser, its Affiliates,
or any person authorized by any of them, has engaged in ongoing negotiations (or
ongoing discussions regarding the substantive terms of), nor do any of them have
any agreements or understandings with third parties regarding any direct or
indirect sale or transfer to such third parties of any equity interest in or
assets or properties of the Brazilian Holding Companies or the Operating
Companies, except as otherwise contemplated by this Agreement and the Definitive
Agreements, nor are any such negotiations or discussions contemplated.
4.06 Brokers. Except for UBS Investment Bank Limited and its
Affiliates, whose fees, commissions and expenses are the sole responsibility of
Purchaser, all negotiations relative to this Agreement and the Definitive
Agreements and the transactions contemplated hereby and thereby have been
carried out by Purchaser directly with Sellers without the intervention of any
Person on behalf of Purchaser in such manner as to give rise to any valid claim
by any Person against Sellers or any of the Brazilian Holding Companies or the
Operating Companies for a finder's fee, brokerage commission or similar payment.
ARTICLE V
COVENANTS
5.01 Regulatory and Other Approvals. Each of Purchaser and
Sellers shall, as promptly as practicable and after consultation with each
other, use its best efforts to obtain all material consents, approvals or
actions of, make all filings with and give all notices, and provide such other
information and communications, to any Governmental Authorities, including,
without limitation, ANATEL, or any other Person required to consummate the
transactions contemplated hereby and by the Definitive Agreements. Purchaser and
Sellers shall provide prompt notification to each other when any such consent,
approval, action, filing or notice referred to above is obtained, taken, made or
given, as applicable, and shall advise each
14
other of any communications (and, unless precluded by Law, provide copies of any
such communications that are in writing) with any Governmental Authority or
other Person regarding any of the transactions contemplated by this Agreement,
including, without limitation, the transfers referred to in Section 6.11.
Purchaser and Sellers shall not take any action or make any filing with or give
notice to any Governmental Authorities, including, without limitation, the
ANATEL approval request filed pursuant to this Section 5.01, without the prior
written consent of the other party.
5.02 No Solicitations. Sellers shall not take, nor shall they
permit any Affiliate of Sellers (or authorize or permit any investment banker,
financial advisor, attorney, accountant or other Person retained by or acting
for or on behalf of Sellers or any such Affiliate) to take, directly or
indirectly, any action to solicit, encourage, receive, negotiate, assist or
otherwise facilitate (including by furnishing confidential information with
respect to the Brazilian Holding Companies or the Operating Companies or
permitting access to the assets and properties and books and records of the
Brazilian Holding Companies or the Operating Companies) any offer or inquiry
from any Person concerning an Acquisition Proposal. If Sellers or any such
Affiliate (or any such Person acting for or on their behalf) receives from any
Person any offer, inquiry or informational request referred to above, Sellers
shall promptly advise such Person, by written notice, of the terms of this
Section 5.02 and shall promptly, orally and in writing, advise Purchaser of the
receipt of such offer, inquiry.
5.03 Sale of Real Estate Assets. Sellers shall, and shall
cause the Operating Companies to, use commercially reasonable efforts to
consummate a sale of the real estate assets of the Operating Companies, the
gross proceeds of which sale Sellers expect to be approximately R$20.0 million.
5.04 Operating Company Operations. (a) During the period
beginning on the Closing Date and ending on the fifth (5) year anniversary of
the Closing Date (the "Operating Period"), Purchaser shall cause the Operating
Companies to negotiate in good faith on commercially reasonable terms, and
consistent with the terms of their business plans then in place, to enter into
agreements to provide wholesale wireless network services, including capacity
for Mobile Virtual Network Operators (MVNO) and roaming services to other
domestic and/or international telecommunications services operators on their
CDMA network. To the extent that a telecommunications service operator seeking
such MVNO and/or roaming services from any of the Operating Companies owns or
operates cell-based wireless networks, the Operating Companies shall only be
required to enter into such agreements with such operator if such operator
agrees to provide similar services with its own network(s) to the Operating
Companies on a reciprocal basis. The agreements referenced in this Section
5.04(a) shall be negotiated at market-based rates.
(b) During the Operating Period, Purchaser shall cause
the Operating Companies to (i) maintain cdmaOne(R), cdma2000(R), and/or W-CDMA
as the exclusive radio frequency interface technology for all fixed-wireless and
mobile wireless voice and data services that the Operating Companies provide
using cellular, PCS-based or 3G radio technology infrastructure in the Vesper
Spectrums, and (ii) not deploy any other cellular, PCS-based or 3G radio
technology infrastructure which is not based upon cdmaOne(R), cdma2000(R),
and/or W-CDMA on the Vesper Spectrums, including, but not limited to, GSM, GPRS,
EDGE, DECT
15
and TDMA, provided that such cdmaOne(R), cdma2000(R), and/or W-CDMA technology
continues to be deployed by major wireless telecommunication companies.
(c) During the period beginning on the Closing Date and
ending on the tenth (10) anniversary of the Closing Date, Purchaser shall cause
at least 85% (during years 0-3), 70% (during years 4-5), and 55% (during years
6-10) of all CDMA subscriber terminals purchased by any of the Operating
Companies to utilize CDMA ASICs, including but not limited to mobile station
modems, originally sourced from QUALCOMM or any of its designated Affiliates;
provided, that, such terminals are competitively priced for comparable
performance and features in the regional market.
(d) During the Operating Period, (i) to the extent that
any of the Operating Companies shall offer wireless data services and
applications over their CDMA networks, Purchaser shall cause the Operating
Companies to negotiate in good faith to enter into an agreement with QUALCOMM or
any of its designated Affiliates to provide such applications and services using
BREW(R) technology, to the extent consistent with the business plans of the
Operating Companies; and (ii) to the extent that any of the Operating Companies
seek to purchase CDMA network optimization tools, data collection tools, and
test equipment, Purchaser shall cause the Operating Companies to seek bids from
QUALCOMM to purchase such equipment as it may provide. Purchaser will negotiate
in good faith to enter into sales agreements with QUALCOMM or any of its
designated Affiliates to provide such equipment so long as it is competitively
priced for comparable performance and features.
(e) Purchaser shall not directly or indirectly sell or
otherwise transfer any of the Operating Companies or their assets and properties
(including the Vesper Spectrums), whether by merger or consolidation, a tender
or exchange offer, a leveraged buy-out, a minority investment, the formation of
a joint venture or partnership, or any other transaction (any such transaction,
a "Vesper Sale") to any Person (a "Vesper Acquirer"), and any such sale or
transfer shall be void, unless such Vesper Acquirer agrees in writing to comply
with the terms of this Section 5.04. Notwithstanding any Vesper Sale, Purchaser
shall remain liable for any failure by such Vesper Acquirer to comply with the
terms of Section 5.04, including failure to comply with the following sentence,
unless the Vesper Acquirer or an Affiliate thereof that has provided a full and
unconditional guarantee of the obligations of the Vesper Acquirer (the "Vesper
Acquirer Affiliate") has, at the time of the Vesper Sale, a credit rating from
an internationally recognized credit rating agency that is equal to or higher
than Embratel's credit rating on the date hereof, in each case, from an
internationally recognized credit rating agency; provided, however, that if
Embratel or the Vesper Acquirer or the Vesper Acquirer Affiliate is rated by
more than one such credit rating agency, the highest rating provided by all such
credit rating agencies with respect to Embratel, the Vesper Acquirer and the
Vesper Acquirer Affiliate shall prevail for the purposes hereof. In the event
that a Vesper Acquirer fails for any reason to comply, and to cause the
Operating Companies to comply, with the terms of Section 5.04(b), then QUALCOMM
or any of its applicable Affiliates that own equity interests in CT Leasing (the
"QUALCOMM Party"), shall have the right (the "QUALCOMM Put Right") to sell and
the Vesper Acquirer shall have the obligation to purchase, upon exercise of the
QUALCOMM Put Right, all of the QUALCOMM Party's outstanding equity interest in
CT Leasing (the "Tower Leasing Equity") in exchange for the QUALCOMM Party's pro
rata share of the sum of all remaining lease payments payable by the Operating
Companies pursuant to the Tower Sale and Lease
16
Agreements (the "QUALCOMM Put Purchase Price"). The QUALCOMM Put Right may be
exercised by delivery by the QUALCOMM Party to Vesper Acquirer of a written
notice of such exercise (the "QUALCOMM Put Notice"). The closing of the purchase
and sale of the Tower Leasing Equity pursuant to the exercise of the QUALCOMM
Put Right (the "QUALCOMM Put Closing") shall take place at the offices of Tower
Leasing Co. on the third Business Day after the QUALCOMM Party delivers the
QUALCOMM Put Notice to Vesper Acquirer. At the QUALCOMM Put Closing, Vesper
Acquirer shall pay (x) to the QUALCOMM Party the QUALCOMM Put Purchase Price by
wire transfer of immediately available funds to such account as the QUALCOMM
Party may direct in the QUALCOMM Put Notice and (ii) to Sellers an amount equal
to the Transaction Expenses by wire transfer of immediately available funds to
such account as Sellers may direct. Simultaneously, (1) the QUALCOMM Party shall
assign and transfer to Vesper Acquirer all of the QUALCOMM Party's right, title
and interest in and to the Tower Leasing Equity, by means of the execution of
the proper share transfer and the amendment by CT Leasing of its share register
to transfer to Vesper Acquirer the full ownership of the Tower Leasing Equity
and (2) the Vesper Acquirer shall assume all of the QUALCOMM Party's or any of
its Affiliates' obligations, including pursuant to the "Call Option", set forth
in the Tower Investment Agreement.
(f) During the period beginning on the Closing Date and
ending eighteen (18) months thereafter, Purchaser shall cause the Operating
Companies to use reasonable efforts within their control to continue to offer
service to their existing corporate customers for which cash revenues exceed
associated marginal costs and to use the Vesper Spectrums as used in their
normal course of business, including but not limited to providing fixed-wireless
and data services to the Operating Companies' customers. Without limiting the
foregoing obligation of Purchaser, Purchaser shall use reasonable efforts, and
shall cause the Operating Companies to use reasonable efforts, other than such
efforts that could reasonably be expected to have a material adverse effect on
Purchaser or any of its Affiliates, including, without limitation, the Operating
Companies, to vigorously oppose, through administrative, judicial and
extra-judicial means available, any and all determinations, actions or attempts
of any nature whatsoever from Governmental Authorities with competence to decide
upon spectrum frequency matters, which seek, or would have as a result thereof,
the limitation on the use by the Operating Companies (whether by relocation or
otherwise) of the Vesper Spectrums or any portions thereof, including but not
limited to seeking a temporary administrative and/or judicial order or
injunction permitting continuing operation of the Vesper Spectrums as then
conducted during the pendency of any action taken against any such Governmental
Authority determinations, actions or attempts; provided, however, that in the
event of the relocation of the Vesper Spectrums to an alternative spectrum,
Purchaser shall not be so obligated if the cost of such relocation is borne by
Purchaser or any of its Affiliates, including, without limitation, the Operating
Companies, or by any Governmental Authority or third party. The parties
acknowledge that, in the event that the Operating Companies cease to use the
Vesper Spectrums or any portion thereof pursuant to this Section 5.04(f), the
foreseeable losses of QUALCOMM may include QUALCOMM's direct or indirect
interest in all unpaid lease payments payable by the Operating Companies
pursuant to the Tower Sale and Lease Agreements for the remainder of the term
thereof.
(g) For purposes of Section 5.04(b), (c), (d), (e) and
(f), all references to the Operating Companies shall apply to the Operating
Companies' operation of the Vesper Spectrums. If (i) any of the Operating
Companies are merged with or consolidated into
17
Purchaser or any Affiliate thereof (the "Acquirer") or (ii) any of the Vesper
Spectrums are transferred for any reason whatsoever or consolidated into the
Purchaser or any Affiliate thereof (the "Spectrum Acquirer", and any such
transaction described in clause (i) or (ii) above, a "Vesper Roll-up"), prior to
the effectiveness of any such Vesper Roll-up, the Purchaser shall take all
actions necessary to cause the Acquirer or the Spectrum Acquirer, as applicable,
to agree (A) that the covenants in Section 5.04(b), (c), (d), (e) and (f) shall
apply equally to the Acquirer and to the Spectrum Acquirer with respect to all
business activity conducted by the Acquirer or the Spectrum Acquirer on the
Vesper Spectrums and (B) that QUALCOMM shall be a third party beneficiary of
such agreement and that QUALCOMM shall have the right to enforce the covenants
in Section 5.04(b), (c), (d), (e) and (f).
(h) The parties acknowledge and agree that QUALCOMM is a
third party beneficiary of this Section 5.04 and that QUALCOMM shall have the
right to enforce the provisions of this Section 5.04.
5.05 Key Employees. The Sellers shall cause the Operating
Companies to identify and take appropriate actions to retain key employees of
the Operating Companies in accordance with the Business Plan.
5.06 Conduct of Business. At all times after the date hereof
until the Closing, Sellers shall use their respective reasonable best efforts to
cause the Operating Companies to (i) operate in good faith to achieve the
objectives set forth in the Business Plan, and (ii) maintain all Licenses from
ANATEL as held on the date hereof in a manner consistent with past practice.
5.07 Right of Last Refusal. (a) If at any time on or after the
Closing Date and prior to the date on which the QUALCOMM Put Right is
exercisable, QdB or Breidvika Holding S.A. (the "SMP Affiliate") shall have
received a written good faith offer from an offeror (the "SMP Offeror") to
purchase all of the equity interests in, or a substantial portion of the assets
of Vesper SMP S.A. and Brazzaville S.A., each a sociedade por acoes organized
under the Laws of Brazil (the "SMP Companies") which QdB or the SMP Affiliate
has determined to accept, then QdB shall promptly deliver to Purchaser written
notice of such determination (a "Notice of Determination"), together with a
detailed summary of the terms and conditions of the relevant written offer (the
"SMP Offer"), including the identity of the SMP Offeror. Upon receipt of the
Notice of Determination, Purchaser shall have the right to purchase from QdB or
the SMP Affiliate, as applicable, and, upon the delivery of a Notice of Election
(as defined below) by Purchaser to QdB, QdB shall or shall cause the SMP
Affiliate to sell to Purchaser, the SMP Companies at the price and on the terms
and conditions set forth in the SMP Offer (the "SMP Subject Terms"). Within ten
(10) Business Days after receipt of the Notice of Determination by Purchaser
(the "SMP Notice Period"), Purchaser may deliver a written notice (a "Notice of
Election") to QdB of its election to purchase the SMP Companies. If Purchaser
delivers the Notice of Election to QdB prior to the expiration of the SMP Notice
Period, QdB must sell, or shall cause the SMP Affiliate to sell, and Purchaser
must purchase, subject to ANATEL approval, the SMP Companies within 10 Business
Days from the later of the expiration of the SMP Notice Period or upon obtaining
ANATEL approval, pursuant to the SMP Subject Terms. If QdB has not received a
Notice of Election prior to the expiration of the SMP Notice Period, then QdB
shall have the right, for a period of six months following the expiration
18
of the SMP Notice Period (the "SMP Sale Period"), to sell or otherwise transfer,
or cause the SMP Affiliate to sell or otherwise transfer, the SMP Companies to
the SMP Offeror on the SMP Subject Terms. If, for any reason, QdB or the SMP
Affiliate shall not have sold the SMP Companies to the SMP Offeror before the
expiration of the SMP Sale Period, the provisions of this Section shall again be
in effect.
(b) Sellers shall have the right to return the SMP
Licenses to ANATEL at any time after providing Purchaser with 30 days prior
notice thereof. Such notice shall be deemed a Notice of Determination and the
terms of Section 5.07(a) shall apply thereto.
5.08 No Change of Control Until ANATEL Approval. The parties
expressly acknowledge that nothing in this Agreement shall be construed to
provide Purchaser with control over the Brazilian Holding Companies or the
Operating Companies in breach of the ANATEL Resolution. In furtherance of the
foregoing, Purchaser shall only be entitled to control rights over the Brazilian
Holding Companies and the Operating Companies after the sale of the Shares and
any Additional Shares to Purchaser has been approved by ANATEL.
5.09 Guarantees. Within one hundred eighty (180) days after
the Closing Date, Sellers shall cause the guarantees that the Brazilian Holding
Companies have given in respect of Indebtedness of the Operating Companies
described in Schedule 5.09 (the "Guarantees") to be replaced. Sellers will
indemnify and hold the Brazilian Holding Companies harmless against payments
that the Brazilian Holding Companies have made from and after the Closing in
respect of the Guarantees.
5.10 Vesper Sale. In the event that definitive documentation
with respect to a Vesper Sale is entered into at any time during the period
beginning on the Closing Date and ending on the first anniversary of such date,
then, upon consummation of such Vesper Sale, Purchaser shall pay to Sellers or
any of its designated Affiliates, by wire transfer of immediately available
funds to such account as Sellers may direct, on the date of the consummation of
a Vesper Sale, an amount equal to the sum of (i) 50% of the Vesper Proceeds and
(ii) the Transaction Expenses.
5.11 Certain Transfers. Prior to the Closing, QdB shall
transfer (i) the one share of Xxxxxx X.X. that it owns to Vesper Holding Sao
Paulo S.A., and (ii) the one share of Vesper Sao Paulo S.A. that it owns to
Vesper Holding S.A.
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF PURCHASER
The obligations of Purchaser hereunder to purchase the Shares
and any Additional Shares are subject to the satisfaction, at or before the
Closing, of each of the following conditions (all or any of which may be waived
in whole or in part by Purchaser in its sole discretion):
6.01 Representations and Warranties. The representations and
warranties made by Sellers in this Agreement and in the Definitive Agreements,
taken as a whole, shall be
19
true and correct in all material respects on and as of the Closing Date as
though made on and as of the Closing Date or, in the case of representations and
warranties made as of a specified date earlier than the Closing Date, on and as
of such earlier date.
6.02 Performance. Sellers shall have performed and complied,
in all material respects, with their agreements, covenants and obligations
required by this Agreement and the Definitive Agreements to be so performed or
complied with by Sellers at or before the Closing.
6.03 Orders and Laws; Proceedings. There shall not be in
effect on the Closing Date any Order or Law that became effective after the date
of this Agreement restraining, enjoining or otherwise prohibiting or making
illegal the consummation of any of the transactions contemplated by this
Agreement or any of the Definitive Agreements, and there shall not be pending on
the Closing Date any action or proceeding in, before or by any Governmental
Authority which would reasonably be expected to result in the issuance of any
such Order or the enactment, promulgation or deemed applicability to Purchaser
or the transactions contemplated by this Agreement or the Definitive Agreements
of any such Law.
6.04 Regulatory Consents and Approvals. The approval of
ANATEL, and the filing with XXXX through ANATEL, as necessary to permit
Purchaser and Sellers to perform their obligations under this Agreement and to
consummate the transactions contemplated hereby (a) shall have been duly given
as requested and made, (b) shall be complete in all material respects in
accordance with ANATEL's approval request filed pursuant to Section 5.01 and not
subject to the satisfaction of any condition that has not been satisfied or
waived, and (c) shall be in full force and effect.
6.05 Other Transactions. Prior to or simultaneously with the
Closing, each of the following shall have occurred:
(i) the consummation of the transactions
contemplated by the Bridge Loan Assignment Agreement and the
capitalization of the Bridge Loans into equity of the Operating
Companies,
(ii) the consummation of the transactions
contemplated by the Settlement and Forbearance Agreement by the parties
thereto;
(iii) the delivery by each Seller of such
certificates, documents and instruments providing evidence of the
corporate and shareholder authorizations for such Seller to enter into
and perform the Agreement and the other Definitive Agreements to which
they are a party;
(iv) the delivery by each other party of such
certificates, documents and instruments providing evidence of the
corporate and shareholder authorizations for such other party to enter
into and perform the Definitive Agreements to which it is a party;
(v) the consummation of the transactions
contemplated by the Settlement and General Release Agreement by the
parties thereto; and
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(vi) the consummation of the transactions
contemplated by the Tower Sale and Lease Agreements.
6.06 QUALCOMM Funding. The QUALCOMM Funding shall have
occurred in full.
6.07 Business Plan. The Operating Companies shall have been
operated in good faith to achieve the Business Plan. No deviations from the
Business Plan shall have been caused by the failure of the Operating Companies'
management personnel to execute the Business Plan in good faith.
6.08 Capital Leases and Indebtedness. The total capital leases
and other Indebtedness of the Operating Companies as of the Closing Date shall
not exceed, in the aggregate, the equivalent of R$40 million as of November 30,
2003, plus any amount of ICMS financing of the Operating Companies that accrues
between November 30, 2003 and the Closing Date, in each case, as such amounts
are determined in accordance with Brazilian generally accepted accounting
principles in effect on the date hereof.
6.09 Licenses. The Operating Companies shall have maintained
all Licenses from ANATEL held by such Operating Companies on the date hereof, in
a manner consistent with past practice.
6.10 QUALCOMM Indemnity Agreement. Either (a) the Operating
Companies and each Resolution Party shall have entered into a Resolution and
Settlement Agreement or (b) QUALCOMM shall have entered into the QUALCOMM
Indemnity Agreement with respect to the claims of each Resolution Party which
has not entered into a Resolution and Settlement Agreement.
6.11 Certain Transfers. All of the outstanding quotas of
Velocom Data Comunicacoes Ltda. shall have been transferred to Purchaser, the
Brazilian Holding Companies or the Operating Companies, free and clear of all
Liens, to such Person as Purchaser shall designate by written notice to Sellers
at least three (3) Business Days prior to the Closing. The transfers referred to
in Section 5.11 shall have occurred.
6.12 Provision. The financial and accounting records of the
Operating Companies shall have been adjusted to show a provision that reduces
the value of their permanent assets to fair market value in accordance with
Brazilian generally accepted accounting principles.
6.13 QUALCOMM Confirmation Letter. The Purchaser shall have
received the duly executed original of the QUALCOMM Confirmation Letter.
6.14 Due Diligence. Purchaser shall have satisfactorily
completed its legal and financial review of the business and operations of the
Operating Companies; provided, however, that this condition shall be deemed
satisfied as of the first date that QUALCOMM makes a payment in respect of a
Funding Notice (as such term is defined in the QUALCOMM Funding Agreement).
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ARTICLE VII
CONDITIONS TO OBLIGATIONS OF SELLERS
The obligations of Sellers hereunder to sell the Shares and
any Additional Shares are subject to the satisfaction, at or before the Closing,
of each of the following conditions (all or any of which may be waived in whole
or in part by Sellers in its sole discretion):
7.01 Representations and Warranties. The representations and
warranties made by Purchaser in this Agreement and in the Definitive Agreements,
taken as a whole, shall be true and correct in all material respects on and as
of the Closing Date as though made on and as of the Closing Date or, in the case
of representations and warranties made as of a specified date earlier than the
Closing Date, on and as of such earlier date.
7.02 Performance. Purchaser shall have performed and complied,
in all material respects, with its agreements, covenants and obligations
required by this Agreement and the Definitive Agreements to which Purchaser is a
party to be so performed or complied with by Purchaser at or before the Closing.
7.03 Orders and Laws; Proceedings. There shall not be in
effect on the Closing Date any Order or Law that became effective after the date
of this Agreement restraining, enjoining or otherwise prohibiting or making
illegal the consummation of any of the transactions contemplated by this
Agreement or any of the Definitive Agreements, and there shall not be pending on
the Closing Date any action or proceeding in, before or by any Governmental
Authority which would reasonably be expected to result in the issuance of any
such Order or the enactment, promulgation or deemed applicability to Purchaser
or the transactions contemplated by this Agreement or the Definitive Agreements
of any such Law.
7.04 Regulatory Consents and Approvals. The approval of
ANATEL, and the filing with XXXX through ANATEL, as necessary to permit
Purchaser and Sellers to perform their obligations under this Agreement and to
consummate the transactions contemplated hereby (a) shall have been duly given
as requested and made, (b) shall be complete in all material respects in
accordance with ANATEL's approval request filed pursuant to Section 5.01 and not
subject to the satisfaction of any condition that has not been satisfied or
waived, and (c) shall be in full force and effect.
7.05 Other Transactions. Prior to or simultaneously with the
Closing, each of the following shall have occurred:
(i) the consummation of the transactions
contemplated by the Bridge Loan Assignment Agreement and the
capitalization of the Bridge Loans into equity of the Operating
Companies,
(ii) the consummation of the transactions
contemplated by the Settlement and Forbearance Agreement by the parties
thereto;
(iii) the delivery by Purchaser of such
certificates, documents and instruments providing evidence of the
corporate authorizations for Purchaser to enter into and
22
perform the Agreement and the other Definitive Agreements to which it
is a party;
(iv) the delivery by each other party of such
certificates, documents and instruments providing evidence of the
corporate and shareholder authorizations for such other party to enter
into and perform the Definitive Agreements to which it is a party;
(v) the consummation of the transactions
contemplated by the Settlement and General Release Agreement by the
parties thereto; and
(vi) the consummation of the transactions
contemplated by the Tower Sale and Lease Agreements.
7.06 Resolution and Settlement Agreements. The Operating
Companies and each Resolution Party shall have entered into a Resolution and
Settlement Agreement.
7.07 Vesper Spectrums. The Operating Companies shall obtain a
satisfactory solution to the interference occurring on the Vesper Spectrums due
to the implementation and/or deployment of telecommunications systems as a
result of other Licenses granted by ANATEL, which solution shall entitle the
Operating Companies to operate in their normal course of business.
ARTICLE VIII
TERMINATION; SURVIVAL; LIMIT ON DAMAGES
8.01 Termination. This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned:
(a) at any time before the Closing, by mutual written
agreement of Sellers and Purchaser;
(b) at any time before the Closing, by Sellers or
Purchaser, in the event of a material breach hereof by the non-terminating party
if such non-terminating party fails to cure such breach within five (5) Business
Days following notification thereof by the terminating party;
(c) at any time after December 15, 2003, by Sellers or
Purchaser upon notification of the non-terminating party by the terminating
party if the Closing shall not have occurred on or before such date and such
failure to consummate is not caused by a breach of this Agreement by the
terminating party; or
(d) at any time after the tenth (10th) Business Day after
the date hereof, by Sellers or Purchaser, if the Services Agreement or the Tower
Sale and Lease Agreements have not been executed and delivered by the parties
thereto; provided, however, that such right to terminate shall not be
exercisable after the Services Agreement and the Tower Sale and Lease Agreements
have been executed and delivered by the parties thereto.
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8.02 Effect of Termination. If this Agreement is validly
terminated pursuant to Section 8.01, this Agreement shall forthwith become null
and void, and there shall be no liability or obligation on the part of Sellers
or Purchaser (or any of their respective officers, directors, employees, agents
or other representatives or Affiliates), except that the provisions with respect
to expenses in Section 9.03 and confidentiality in Section 9.05 shall continue
to apply following any such termination.
8.03 Survival of Representations and Warranties. The
representations and warranties contained in this Agreement shall not survive the
Closing, and there shall be no liability after the Closing Date in respect
thereof on the part of any party or its officers, directors, employees, agents
and Affiliates; provided, however, that, in the event that a Vesper Roll-up
occurs within ninety (90) days following the Closing Date, the representations
and warranties contained in this Agreement shall survive the Closing for a
period of one (1) year following the Closing. This Section shall not limit in
any way the survival and enforceability of any covenant or agreement of the
parties hereto which by its terms contemplates performance after the Closing
Date, which shall survive the Closing Date for the respective periods set forth
herein.
8.04 Damages. (a) In the event that there is a material breach
of the representations and warranties made by any party to this Agreement, the
non-breaching party's sole remedy hereunder prior to the Closing Date shall be
to terminate this Agreement under Section 8.01(b); provided, however, that upon
any such valid termination, the breaching party shall reimburse the
non-breaching party up to US$1 million for any of its reasonable out-of-pocket
costs and expenses, including fees and disbursements of legal counsel, financial
advisors and accountants, incurred in connection with the negotiation and
execution of this Agreement and the transactions contemplated hereby, upon
presentation of reasonable documentation thereof. Subsequent to the Closing Date
and only in the event that a Vesper Roll-up occurs within ninety (90) days
following the Closing Date, subject to Sections 8.04(b) and 8.05, each party
shall indemnify the other party for any and all Losses suffered, incurred or
sustained by such other party, resulting from, arising out of or relating to any
breach of representation or warranty of the party contained in this Agreement.
(b) Notwithstanding anything to the contrary contained in
this Agreement, no amounts of indemnity shall be payable as a result of any
claim in respect of a Loss arising under Section 8.04(a):
(i) unless, until and then only to the extent
that the party seeking indemnification has suffered, incurred,
sustained or become subject to Losses referred to in such paragraph in
excess of U.S.$ 12 million in the aggregate; and
(ii) after the party seeking indemnification has
received payments in respect of claims made under such paragraph of
U.S.$ 6 million in the aggregate.
(c) The indemnities set forth in this Section 8.04 shall
be the exclusive remedies of the parties hereto and their respective officers,
directors, employees, agents and Affiliates for any misrepresentation or breach
of warranty and the parties shall not be entitled to a rescission of this
Agreement or to any further indemnification rights or claims of any nature
whatsoever in respect thereof, all of which the parties hereto waive.
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(d) This Section shall not limit in any way a party's
right to indemnification for any and all Losses suffered, incurred or sustained
by such party, resulting from, arising out of or relating to the non-fulfillment
of or failure to perform any covenant or agreement of the other party contained
in this Agreement.
8.05 Notice/Knowledge of Breach. In the event that any party
hereto becomes aware of any facts or circumstances that could result in a right
to terminate this Agreement pursuant to Section 8.01(b), such party shall
provide prompt written notice thereof to the other party. Any failure to provide
such prompt written notice shall result in the waiver of such termination right
based on or relating to such facts or circumstances. To the extent that any
party is aware of any breach of representation or warranty prior to the Closing,
such party shall have no right to indemnification under Section 8.04(a) with
respect to any Losses resulting from, arising out of or relating to such breach.
ARTICLE IX
MISCELLANEOUS
9.01 Notices. All notices, requests and other communications
hereunder must be in writing in the English language and shall be deemed to have
been duly given only if delivered personally or by facsimile transmission or by
internationally recognized courier to the parties at the following addresses or
facsimile numbers:
(a) If to the Brazilian Holding Companies:
Vesper Sao Paulo S.A.
Xx. Xxx Xxxxxx Xxxxxx, 0000/00 degrees Andar
05477-000 Sao Paulo SP Brasil
Attention: General Counsel
Fax: 000 0000 0000 0000
Phone: 000 0000 0000 0000
With copy to:
XXXXXXXX Xxxxxxxxxxxx
Attention: General Counsel
Fax: (000) 000-0000
(b) If to VHL:
Vesper Holding, Ltd.
c/x Xxxxxx and Xxxxxx
Xxxxxx House
P.O. Box 309
Xxxxxx Town
Grand Cayman, Cayman Islands
With copy to:
XXXXXXXX Xxxxxxxxxxxx
25
Attention: General Counsel
Fax: (000) 000-0000
(c) If to QdB:
QUALCOMM do Brasil Ltda.
0000 Xxxxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attention: President
Fax: (000) 000-0000
With copy to:
XXXXXXXX Xxxxxxxxxxxx
Attention: General Counsel
Fax: (000) 000-0000
(d) If to Purchaser, to:
Embratel Participacoes S.A.
Av. Presidente Xxxxxx, 1.012 - 15 degrees andar
Xxx xx Xxxxxxx, 00000-000, Xxxxxx
Attention: Xxxxxx Xxxx
Fax: (00-00) 0000-0000
With copy to:
Attention: Xxxxxxx xx Xxxxxxx Xxxxxx
Fax: (00-00) 0000-0000
All such notices, requests and other communications shall (i) if delivered
personally to the address as provided in this Section 9.01, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section 9.01, be deemed given upon receipt, and (iii) if
delivered by international courier in the manner described above to the address
as provided in this Section 9.01, be deemed given upon receipt (in each case
regardless of whether such notice, request or other communication is received by
any other Person to whom a copy of such notice, request or other communication
is to be delivered pursuant to this Section 9.01). Any party from time to time
may change its address, facsimile number or other information for the purpose of
notices to that party by giving notice specifying such change to the other party
hereto.
9.02 Entire Agreement. This Agreement and the Definitive
Agreements supersede all prior discussions and agreements between the parties
with respect to the subject matter hereof and thereof, and contains the sole and
entire agreement between the parties hereto with respect to the subject matter
hereof.
9.03 Expenses. Whether or not the transactions contemplated
hereby are consummated, each party shall pay its own costs and expenses incurred
in connection with the negotiation, execution and closing of this Agreement and
the Definitive Agreements and the
26
transactions contemplated hereby and thereby, except as otherwise expressly set
forth in Sections 5.04 and 5.10.
9.04 Public Announcements. At all times at or before the
Closing, Sellers and Purchaser shall not issue or make any reports, statements
or releases to the public with respect to this Agreement, the Definitive
Agreements or the transactions contemplated hereby or thereby without the
consent of the other, which consent shall not be unreasonably withheld or
delayed. If the parties are unable to obtain the approval for a public report,
statement or release from the other party and such report, statement or release
is, in the opinion of legal counsel to the relevant party, required by Law or
applicable stock exchange requirements in order to discharge such party's
disclosure obligations, then such party may make or issue the legally required
report, statement or release and promptly furnish the other party with a copy
thereof. Sellers and Purchaser shall also obtain the other party's prior
approval of any press release to be issued immediately following the Closing
announcing the consummation of the transactions contemplated by this Agreement.
9.05 Confidentiality. Each party hereto shall hold, and shall
use its best efforts to cause its Affiliates, and their respective
representatives to hold, in strict confidence from any Person (other than any
such Affiliate or representative), unless compelled to disclose by judicial or
administrative process (including without limitation in connection with
obtaining the necessary approvals of this Agreement and the transactions
contemplated hereby of Governmental Authorities) or by other requirements of Law
all documents and information concerning the other party or any of its
Affiliates furnished to it by the other party or such other party's
representatives in connection with this Agreement or the transactions
contemplated hereby, except to the extent that such documents or information can
be shown to have been (a) previously known by the party receiving such documents
or information, (b) in the public domain (either prior to or after the
furnishing of such documents or information hereunder) through no fault of such
receiving party or (c) later acquired by the receiving party from another source
if the receiving party is not aware that such source is under an obligation to
another party hereto to keep such documents and information confidential;
provided that following the Closing the foregoing restrictions shall not apply
to Purchaser's use of documents and information concerning the Brazilian Holding
Companies or the Operating Companies furnished by Sellers hereunder. In the
event the transactions contemplated hereby are not consummated, upon the request
of the other party, each party hereto shall, and shall cause its Affiliates and
their respective representatives to, promptly (and in no event later than five
(5) Business Days after such request) redeliver or cause to be redelivered all
copies of documents and information furnished by the other party in connection
with this Agreement or the transactions contemplated hereby and destroy or cause
to be destroyed all notes, memoranda, summaries, analyses, compilations and
other writings related thereto or based thereon prepared by the party who
furnished such documents and information or their representatives.
9.06 Waiver. Any term or condition of this Agreement may be
waived at any time by the party that is entitled to the benefit thereof, but no
such waiver shall be effective unless set forth in a written instrument duly
executed by or on behalf of the party waiving such term or condition. No waiver
by any party of any term or condition of this Agreement, in any one or more
instances, shall be deemed to be or construed as a waiver of the same or any
other
27
term or condition of this Agreement on any future occasion. All remedies, either
under this Agreement or by Law or otherwise afforded, shall be cumulative and
not alternative.
9.07 Amendment. This Agreement may be amended, supplemented or
modified only by a written instrument duly executed by or on behalf of each
party hereto.
9.08 No Third Party Beneficiary. The terms and provisions of
this Agreement are intended solely for the benefit of each party hereto and
their respective successors or permitted assigns, and it is not the intention of
the parties to confer third-party beneficiary rights upon any other Person,
unless expressly set forth in this Agreement.
9.09 No Assignment; Binding Effect. Neither this Agreement nor
any right, interest or obligation hereunder may be assigned by any party hereto
without the prior written consent of the other parties hereto and any attempt to
do so shall be void, except (a) for assignments and transfers by operation of
Law and (b) that Purchaser may assign any or all of its rights, interests and
obligations hereunder to a direct or indirect wholly-owned subsidiary of
Purchaser that is a Brazilian resident, provided that any such wholly-owned
subsidiary of Purchaser agrees in writing to be bound by all of the terms,
conditions and provisions contained herein, but no such assignment shall relieve
Purchaser of its obligations hereunder. Subject to the preceding sentence, this
Agreement is binding upon, inures to the benefit of and is enforceable by the
parties hereto and their respective successors and assigns.
9.10 Headings. The headings used in this Agreement have been
inserted for convenience of reference only and do not define or limit the
provisions hereof.
9.11 Invalid Provisions. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under any present or future Law,
and if the rights or obligations of any party hereto under this Agreement shall
not be materially and adversely affected thereby, (a) such provision shall be
fully severable, (b) this Agreement shall be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
and (c) the remaining provisions of this Agreement shall remain in full force
and effect and shall not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom.
9.12 Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of Brazil.
9.13 Dispute Resolution. (a) Any dispute arising between the
parties in connection with this Agreement, its interpretation, validity,
performance, enforceability, breach or termination, shall be settled in an
amicable way by the parties by direct negotiations held in good faith for a term
not exceeding 30 (thirty) calendar days.
(b) If, upon expiration of the negotiation term set forth
in the paragraph above, the parties shall not reach an amicable settlement, the
dispute shall be submitted to the decision of an arbitration panel and shall be
finally settled under the Rules of the Arbitration of the International Chamber
of Commerce ("ICC"). The administration and proper development of the
proceedings shall be determined by the Court of Arbitration of the ICC.
(c) The arbitration shall be governed by the Rules of
Arbitration of the ICC,
28
except as provided otherwise herein, and the tribunal shall adopt the
substantive and procedural laws of Brazil, without giving effect to any conflict
of Law rules contained therein.
(d) Each of the parties shall appoint one arbitrator by
the submission to the ICC Court of the Request for Arbitration and respective
Answer, as provided for in item 8 (4) of the ICC Arbitration Rules. The
arbitrators appointed by the parties shall jointly choose the third arbitrator
in fifteen (15) days, who shall preside over the arbitration tribunal, and who
shall be referred to the ICC Court for approval pursuant to item 9 of the ICC
Arbitration Rules.
(e) Under item 8(4) of the ICC Arbitration Rules, if
either party fails to appoint an arbitrator and/or his deputy, the ICC Court
shall make the respective appointment. If the arbitrators appointed by the
parties do not reach an agreement on the third arbitrator within the time limit,
the third arbitrator shall be appointed by the ICC Court.
(f) The arbitrators shall speak and write English
fluently.
(g) The arbitration shall take place in the city of New
York, United Sates of America and shall be conducted in the English language.
(h) To the fullest extent permitted by Law, the parties
waive their right to file any remedies against (including, but not limited to)
the arbitration award and any defenses against its enforcement. The enforcement
of the award may be requested before any courts having competent jurisdiction.
The arbitration award shall be final and binding for the parties.
(i) The provisions of this Section 9.13 shall continue in
effect until conclusion of all issues or litigation arising from this Agreement.
(j) Except for the fees of the parties' legal advisors
which shall be borne by each party, all other expenses and costs of arbitration
shall be borne by either or both parties as the arbitration panel may award.
9.14 Specific performance. Notwithstanding Section 9.13, the
parties agree that each party may seek the specific performance of the
obligations undertaken herein by the parties, as provided in Articles 461 and
632 of the Brazilian Civil Procedure Code.
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officer of each party hereto as of the date
first above written.
VESPER HOLDING, LTD.
By: ________________________________________
Name:
Title:
QUALCOMM DO BRASIL LTDA.
29
By: ________________________________________
Name:
Title:
By: ________________________________________
Name:
Title:
EMBRATEL PARTICIPACOES S.A.
By: ________________________________________
Name:
Title:
By: ________________________________________
Name:
Title:
WITNESSES:
By: ________________________________________
Name:
Title:
By: ________________________________________
Name:
Title:
30
