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PAGING NETWORK DO BRASIL S.A.
AND
PAGING BRAZIL HOLDING CO., LLC
PURCHASE AGREEMENT
125,000 UNITS CONSISTING OF
US$125,000,000
13.5% Senior Notes due 2005
AND
125,000 Non-Voting Class B Holding Shares
Dated: May 30, 1997
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125,000 Units
consisting of
US$125,000,000 13 1/2% Senior Notes due 2005 of PAGING NETWORK DO
BRASIL S.A.
(a Brazilian corporation)
and
125,000 Non-Voting Class B Holding Shares of
PAGING BRAZIL HOLDING CO., LLC
(a Delaware limited liability company)
PURCHASE AGREEMENT
May 30, 1997
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
BEAR XXXXXXX & CO. INC.
XXXXXXX, XXXXX & CO.
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxx Xxxxx World Headquarters
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Paging Network do Brasil S.A., a Brazilian corporation (the
"Company"), and Paging Brazil Holding Co., LLC, a Delaware limited liability
company (the "LLC," and together with the Company, the "Issuers"), confirm their
agreement with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
In-
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corporated ("Xxxxxxx Xxxxx") and Bear Xxxxxxx & Co. Inc. and Xxxxxxx, Xxxxx &
Co. (collectively with Xxxxxxx Xxxxx, the "Initial Purchasers") with respect to
the issue and sale by the Issuers and the purchase by the Initial Purchasers,
acting severally and not jointly, of the respective numbers set forth in
Schedule A of an aggregate of 125,000 Units (the "Units") consisting of
US$125,000,000 aggregate principal amount of 13 1/2% Senior Notes due 2005 of
the Company (the "Notes") and an aggregate of 125,000 Non-Voting Class B Member
Interests (the "Holding Shares") of the LLC. Each Unit will consist of US$1,000
principal amount of Notes and one Holding Share. The Units will be issued under
an agreement (the "Unit Agreement") to be dated as of June 6, 1997 among the
Company, the LLC and The Chase Manhattan Bank, as unit agent (the "Unit Agent").
The Notes are to be issued pursuant to an indenture to be dated as of June 1,
1997 (the "Indenture") between the Company, as issuer of the Notes, and The
Chase Manhattan Bank, as trustee (the "Trustee"). Each of the Trustee and Chase
Trust Bank (the "Principal Paying Agent") will act as a co-paying agent with
respect to the Notes under the Indenture. Pursuant to an agreement (which will
contain customary representations as to, among other things, good title, valid
delivery and lack of claims or encumbrances on such common stock) between the
Company and the LLC to be dated June 6, 1997 (the "Company-LLC Subscription
Agreement"), 125,000 shares of common stock (acoes ordinarias), with no par
value, of the Company (the "Common Stock") representing in the aggregate
approximately 7.0% of the common share capital of the Company, will be issued
and delivered by the Company to the LLC for the capital accounts of the holders
of Holding Shares issued as a part of the Units. The Holding Shares have been
authorized and, at the Closing Time (as defined herein) will be issued in
accordance with the terms of the agreement substantially in the form of Exhibit
C hereto dated as of June 6, 1997 (the "LLC Agreement") among the members from
time to time of the LLC.
Approximately US$46,000,000 of the net proceeds from the sale of the
Units (the "Initial Escrow Amount"), representing funds that, together with the
proceeds from the investment thereof, are intended to be sufficient to pay the
first six in-
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terest payments on the Notes, is to be placed in a collateral account in the
United States and pledged to the Trustee, for the benefit of the holders of the
Notes and the Trustee (in its capacity as such under the Indenture) pursuant to
the Escrow Agreement, dated as of June 6, 1997 (the "Escrow Agreement") among
the Company, Chase Manhattan Bank, as Escrow Agent (the "Escrow Agent"), and the
Trustee.
Unless the context otherwise requires, the term "Securities" refers
collectively to the Notes, the Holding Shares and the Units. This agreement
(this "Agreement" or the "Purchase Agreement"), the Unit Agreement, the
Indenture, the Securities, the Exchange Notes (as defined below), the Private
Exchange Notes (as defined below), the Escrow Agreement, the agreement with CT
Corporation System referred to in Section 18 hereof (the "Agency Agreement"),
the Notes Registration Rights Agreement (as defined below), the LLC Agreement,
the Company-LLC Subscription Agreement and the Equity Registration Rights
Agreement (as defined below) are referred to collectively as the "Operative
Documents."
The Securities will be offered and sold to the Initial Purchasers
without registration under the Securities Act of 1933, as amended (the "Act"),
in reliance upon an exemption from the registration requirements of the Act. The
Issuers have prepared and delivered to each Initial Purchaser copies of
preliminary offering memoranda dated March 16, 1997 (the "March Preliminary
Offering Memorandum") and May 16, 1997 (the "May Preliminary Offering Memorandum
and, together with the March Preliminary Offering Memorandum, the "Preliminary
Offering Memorandum") and have prepared and will deliver to each Initial
Purchaser copies of a final offering memorandum dated May 30, 1997 (the "Final
Offering Memorandum"), each to be used by such Initial Purchaser in connection
with its solicitation of purchases of, or offering of, the Securities. "Offering
Memorandum" means, with respect to any date or time referred to in this
Agreement, the most recent offering memorandum (whether the Preliminary Offering
Memorandum or the Final Offering Memorandum, together with any amendment or
supplement to either such document), which has been prepared and delivered by
the
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Issuers to the Initial Purchasers in connection with their solicitation of
purchases of, or offering of, the Securities. The Issuers hereby confirm that
the use of the Offering Memorandum in connection with the offer and resale of
the Securities by the Initial Purchasers in accordance with the terms hereof is
authorized by each of them. If the Issuers prepare a supplement dated the date
hereof to the Preliminary Offering Memorandum containing only pricing related
information, then the term "Offering Memorandum" for purposes of this Agreement
shall refer collectively to the Preliminary Offering Memorandum and such
supplement.
All references in this Agreement to financial statements and
schedules and other information which is "contained," "included" or "stated" in
the Offering Memorandum (or other references of like import) shall be deemed to
mean and include all such financial statements and schedules in the Offering
Memorandum.
The Issuers understand that the Initial Purchasers propose to make
an offering (the "Offering") of the Securities only on the terms and in the
manner set forth herein to purchasers ("Subsequent Purchasers"), as soon as the
Initial Purchasers deem advisable after this Agreement has been executed and
delivered. The Offering will be made only (i) to persons in the United States
whom the Initial Purchasers reasonably believe to be qualified institutional
buyers ("Qualified Institutional Buyers") as defined in Rule 144A under the Act,
as such rule may be amended from time to time ("Rule 144A"), in transactions
under Rule 144A, (ii) to a limited number of other institutional "accredited
investors" (as defined in Rule 501(a)(1), (2), (3) and (7) under Regulation D of
the Act ("Accredited Investors")) in private sales exempt from registration
under the Act and/or (iii) to non-U.S. persons outside the United States to whom
the Initial Purchasers reasonably believe offers and sales of the Securities may
be made in reliance upon Regulation S under the Act ("Regulation S"), in
transactions meeting the requirements of Regulation S.
The Initial Purchasers and other holders of Securities (including
subsequent transferees) will be entitled to the
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benefits of the registration rights agreement, to be dated as of June 6, 1997
(the "Notes Registration Rights Agreement"), between the Company and the Initial
Purchasers, in the form attached hereto as Exhibit A, and the registration
rights agreement, to be dated as of June 6, 1997 (the "Equity Registration
Rights Agreement") among the Issuers and Warburg, Xxxxxx Ventures, L.P., Paging
Network International N.V., IVP Paging (Cayman) L.P., Multiponto
Telecomunicacoes Ltda. and TVA Sistema de Televisao S.A. (together, the
"Shareholders") and Xxxxx Xxxxxx Shareholder Services, as transfer agent (the
"Holding Share Transfer Agent"), in the form attached hereto as Exhibit B.
Pursuant to the Notes Registration Rights Agreement, the Company will agree to
file with the Securities and Exchange Commission (the "Commission") under the
circumstances set forth therein either (i) a registration statement under the
Act registering the Exchange Notes (as defined in the Notes Registration Rights
Agreement) to be offered in exchange for the Notes and to use its best efforts
to cause such registration statement to be declared effective or (ii) under
certain circumstances set forth therein, to file with the Commission a shelf
registration statement pursuant to Rule 415 under the Act relating to the resale
of the Securities by holders thereof or, if applicable, relating to the resale
of Private Exchange Notes (as defined in the Notes Registration Rights
Agreement) by the Initial Purchasers pursuant to an exchange of the Notes for
Private Exchange Notes, and to use its best efforts to cause such shelf
registration statement to be declared effective. Pursuant to the Equity
Registration Rights Agreement, holders from time to time of Holding Shares or
other Registrable Securities (as defined therein) will have (i) the rights to
Demand Registration (as defined therein) or Piggy-Back Registration (as defined
therein), (ii) a Tag-Along Right (as defined therein) and (iii) a requirement to
sell Holding Shares or other Registrable Securities, in each case, in accordance
with all of the provisions of the Equity Registration Rights Agreement.
SECTION 1. Representations and Warranties. (a) Each of the Issuers
individually represents and both of the Issuers jointly and severally warrant to
each of the Initial Purchasers
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as of the date hereof and as of the Closing Time (as defined in Section 3
hereof) that:
(i) As of their respective dates, none of the Offering Memorandum or
any amendment or supplement thereto, and at all times subsequent thereto
up to and as of the Closing Time, the Offering Memorandum, as amended or
supplemented to such time, contained or will contain an untrue statement
of a material fact or omitted or will omit a statement of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the Issuers make no representations or warranties as to any
information contained in or omitted from the Offering Memorandum, or any
such amendment or supplement, in reliance upon, and in conformity with,
information furnished to the Issuers by or on behalf of any Initial
Purchaser specifically for use in the preparation thereof.
(ii) When the Securities are issued and delivered pursuant to this
Agreement, such Securities will not be of the same class (within the
meaning of Rule 144A) as securities of any of the Issuers which are listed
on a national securities exchange registered under Section 6 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
quoted in a U.S. automated inter-dealer quotation system.
(iii) None of the Issuers or any of their affiliates (as defined in
Rule 501(b) under the Act) has, directly or through any agent, sold,
offered for sale, solicited offers to buy or otherwise negotiated in
respect of, any security (as defined in the Act) which is or will be
integrated with the sale of the Securities in a manner that would require
the registration of the Securities under the Act.
(iv) None of the Issuers or any of their respective affiliates (as
such term is defined in Rule 501(b) under the Act) or any person (other
than the Initial Purchasers,
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as to which the Issuers make no representation) acting on the Issuers' behalf
has engaged, in connection with the offering of the Securities, (A) in any form
of general solicitation or general advertising within the meaning of Rule 502(c)
under the Act, (B) in any directed selling efforts within the meaning of Rule
902 under the Act in the United States in connection with the Securities being
offered and sold pursuant to Regulation S under the Act, (C) in any manner
involving a public offering within the meaning of Section 4(2) of the Act or (D)
in any action which would require the registration of the offering and sale of
the Securities pursuant to this Agreement or which would violate applicable
state "blue sky" laws.
(v) Assuming that the representations and warranties of the Initial
Purchasers contained in Section 4 are true, correct and complete, and
assuming compliance by the Initial Purchasers with their covenants in
Section 4, and assuming that the representations and warranties contained
in the Accredited Institutional Investor Letter (substantially in the form
of Annex A to the Offering Memorandum) completed by Accredited Investors
purchasing Securities are true and correct as of the Closing Time, and
assuming compliance by such Accredited Investors with the agreements in
such Accredited Institutional Investor Letter, it is not necessary in
connection with the offer, sale and delivery of the Securities to the
Initial Purchasers in the manner contemplated by, or in connection with
the initial resale of such Securities by the Initial Purchasers in
accordance with, this Agreement to register the Securities under the Act
or to qualify any indenture in respect of the Notes under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act").
(vi) The only subsidiary of the LCC as of the date hereof is the
Company. As of the date hereof, the Company has no subsidiaries. None of
the Issuers owns any shares, quotas or other equity securities or other
equity interests in any firm, partnership, joint venture or other entity
either directly or indirectly (other than the owner-
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ship of equity securities of the Company by the LLC). The Company is a
duly incorporated and validly existing sociedade anonima under the laws of
Brazil. The LLC is a duly organized and validly existing limited liability
company in good standing under the laws of the State of Delaware and has
filed all reports with the Secretary of State of Delaware required to
obtain a certificate of existence from that office. Each of the Issuers
has all requisite power and authority under all applicable laws, and all
necessary authorizations, approvals, orders, licenses (including, without
limitation, all paging licenses), certificates and permits of and from
regulatory or governmental officials, bodies and tribunals, (a) to own,
lease and operate its respective properties and to conduct its respective
businesses as now conducted and as described in the Offering Memorandum
and (b) to enter into, deliver, incur and perform its respective
obligations under the Operative Documents; and is, to the extent
applicable, duly qualified to do business as a foreign corporation in good
standing in all other jurisdictions where the ownership or leasing of its
respective properties or the conduct of its respective businesses requires
such qualification, except where the failure to be so qualified could not
reasonably be expected to have a material adverse effect on (i) the
condition, financial or otherwise, or on the assets, earnings results of
operations, business affairs or business prospects of the Issuers taken as
a whole or (ii) the ability of any of the Issuers to duly and punctually
perform any of its obligations under any of the Operative Documents or to
consummate the transactions contemplated thereby (a "Material Adverse
Effect"); and, to the knowledge of the Issuers, no revocation or
limitation or variation of any such authorization, approval, order,
license or permit is threatened.
(vii) The Company and each of TVA Sistema de Televisao S.A. ("TVA"),
Multiponto Telecomunicacoes Ltda. ("Multiponto") and San Francisco
Telecomunicacoes Ltda ("San Francisco" and together with TVA and
Multiponto, the "Licenseholders") comply in all material respects with the
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terms and conditions of all decisions, policies, authorizations and
licenses announced, rendered, granted or regulated, as the case may be, by
the Brazilian Ministry of Communications (the "Ministry"), and the other
governmental authorities having authority over services provided by the
Company with respect to the construction and operation of the businesses
of the Company, including, without limitation, Brazilian Law No. 9,295 and
Brazilian Presidential Decrees No. 2,056 and 2,196, Ordinances Xx. 000,
Xx. 000 and No. 1,306 of the Ministry and Ordinance No. 232 of the
Ministry of Infrastructure and the regulations, orders and instructions
enacted or issued under the authority of such acts. Except as described in
the Offering Memorandum, there exists no reason or cause that could
justify the variation, suspension, cancellation or termination of any such
authorizations or licenses held or controlled by the Company with respect
to the construction or operation of its businesses, which variation,
suspension, cancellation or termination could be reasonably expected to
have a Material Adverse Effect.
(viii) The Operating Agreements between the Company and each of the
Licenseholders and the Agreements of Promise of Assignment and Transfer of
Permission between the Company and each of the Licenseholders do not
violate any provision of applicable law or require the consent or approval
of, or any filing with or notification to, the Ministry of Communications
or any other competent governmental authority in the Federative Republic
of Brazil, to be effective to provide the benefits intended to be provided
thereunder to the Company and are legally valid and provide the Company
with all rights purported to be provided thereunder.
(ix) At the time of deposit with the Escrow Agent of the Initial
Escrow Amount (as such term is defined in the Escrow Agreement) no Lien
(as such term is defined in the Indenture) exists upon such Collateral (as
such term is defined in the Escrow Agreement) and no right or option to
acquire the same exists in favor of any other person or
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entity, except for the pledge and security interest in favor of the
Trustee for the benefit of the holders of the Notes and the Trustee (in
its capacity as such under the Indenture) to be created or provided for in
the Escrow Agreement, which pledge and security interest shall constitute
a first priority perfected pledge and security interest in and to all of
the Collateral.
(x) Each the Issuers has all requisite power and authority to
execute, issue and deliver the Unit Agreement and to incur and perform all
of the obligations provided for therein. The Units, when executed,
authenticated and issued in accordance with the terms of the Unit
Agreement (assuming the due authorization, execution and delivery thereof
by the Unit Agent) and when delivered against payment of the purchase
price therefor to the Issuers as provided in this Agreement, will
constitute the valid and binding obligations of the Issuers and will be
entitled to the benefits of the Unit Agreement.
(xi) The Notes, the Exchange Notes and the Private Exchange Notes
have been duly authorized by the Company and the Company has all requisite
corporate power and authority to execute, issue and deliver the Notes, the
Exchange Notes and the Private Exchange Notes and to incur and perform all
of the obligations provided for therein. The Notes, when executed,
authenticated and issued in accordance with the terms of the Indenture
(assuming the due authorization, execution and delivery of the Indenture
by the Trustee) and when delivered against payment of the purchase price
therefor as provided in this Agreement, will constitute the valid and
binding obligations of the Company, entitled to the benefits of the
Indenture, and the Exchange Notes and the Private Exchange Notes, if any,
when executed, authenticated, issued and delivered in exchange for the
Notes in the manner contemplated by the Notes Registration Rights
Agreement, will constitute valid and binding obligations of the Company,
entitled to the benefits of the Indenture.
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(xii) The Holding Shares to be purchased by the Initial Purchasers
from the LLC as a part of the Units pursuant to this Agreement have been
duly authorized for issuance and sale to the Initial Purchasers pursuant
to this Agreement by the LLC and, upon payment to the Company of the
purchase price for the Units in accordance with this Agreement, will be
duly issued and delivered by the Company and, to the Company's knowledge,
by the LLC, will be validly issued, fully paid and non-assessable; the
Holding Shares conform to all statements relating thereto in the Offering
Memorandum and such description conforms to the rights set forth in the
LLC Agreement; no holder of Holding Shares will be subject to personal
liability by reason of being such a holder.
(xiii) As of the Closing Time, all of the warranties and
representations of the Company contained in Section 3 of the Company-LLC
Subscription Agreement will be true and correct.
(xiv) Each shareholder of the Company has executed and delivered an
enforceable written commitment (together, the "Shareholder Commitments"),
agreeing that such shareholder will not exercise its voting rights to
receive mandatory statutory dividends (dividendo minimo obrigatorio),
which conform in all material respects to the descriptions thereof in the
Offering Memorandum. Each Shareholder Commitment has been duly authorized,
executed and delivered by the Company, to the Company's knowledge, by each
other party thereto and constitutes the valid and binding obligations of
each party thereto. The Shareholder Commitments, taken together, are
effective to preclude payment of any mandatory statutory dividend.
(xv) This Agreement and the Company-LLC Subscription Agreement have
been, and, as of the Closing Time, the Equity Registration Rights
Agreement and the Unit Agreement will have been, duly authorized, executed
and delivered by each of the Issuers. The Agency Agreement has been, and,
as of the Closing Time, the Escrow Agreement, the Notes Registration
Rights Agreement and the Indenture will have
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been, duly authorized, executed and delivered by the Company. Assuming the
due authorization, execution and delivery by parties thereto other than
the Issuers, this Agreement and the Company-LLC Subscription Agreement
constitute, and, as of the Closing Time, the Equity Registration Rights
Agreement and the Unit Agreement will constitute, the valid and binding
obligations of each of the Issuers. The Agency Agreement constitutes, and
as of the Closing Time, the Escrow Agreement and the Notes Registration
Rights Agreement will constitute, the valid and binding obligations of the
Company. No consent, authorization (including the Certificado de Aprovacao
Previa (the "Prior Authorization") of the issuance of the Notes, the
Exchange Notes and the Private Exchange Notes, if any, and all payments in
respect of the Notes (except as disclosed in the Offering Memorandum)
given by Banco Central do Brasil (the "Brazilian Central Bank")),
approval, license or order of, or filing, registration or qualification
with, any court or governmental body or agency, domestic or foreign, is
required for the performance by the Issuers of their respective
obligations under the Operative Documents (including but not limited to
the obligations of the Company to effect payments of principal of, and
premium, interest and Additional Amounts (as defined in the Indenture) on
the Notes, the Exchange Notes or the Private Exchange Notes, if any, in
United States dollars free of any liability on the part of any holder
thereof) or for the consummation of the transactions contemplated hereby
or thereby, except for (A) the registration of the issue of the Notes, the
Exchange Notes and the Private Exchange Notes with the Brazilian Central
Bank in order to allow the remittance of U.S. dollars from Brazil for
payment on each scheduled due date of principal of, premium, and interest
and Additional Amounts on the Notes, the Exchange Notes and the Private
Exchange Notes, if any, and those costs, fees and commissions set forth in
this Agreement, the Indenture, the Escrow Agreement, the Registration
Rights Agreement and the Equity Registration Rights Agreement covered by
the Prior Authorization, which will be evidenced by the Certificado de
Registro (the "Registra-
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tion Certificate") issued by the Brazilian Central Bank; (B) the approval
of the Brazilian Central Bank for the Company to make any payment in U.S.
dollars not set forth in the Registration Certificate or to make any
payment provided for therein earlier than its originally scheduled date
(including amounts payable pursuant to acceleration of the maturity of the
Notes, the Exchange Notes or the Private Exchange Notes, if any, upon any
default or Event of Default (as defined in the Indenture), a Tax
Redemption (as defined in the Indenture), or a redemption upon a
Significant Equity Offering (as defined in the Indenture)); (C) the
payment of additional interest in the event the Company fails to effect
the Note Registration pursuant to the Note Registration Rights Agreement;
(D) registration under the Act of (x) the Notes, the Exchange Notes or the
Private Exchange Notes, if any, pursuant to the Notes Registration Rights
Agreement and (y) the Holding Shares or other Registrable Securities
pursuant to the Equity Registration Rights Agreement (in each case,
including any filing with the National Association of Securities Dealers,
Inc. (the "NASD")), (E) the qualification of the Indenture under the Trust
Indenture Act or (F) qualifications or authorizations by state securities
or "blue sky" laws in connection with the offer and sale of the Notes, the
Exchange Notes or the Private Exchange Notes, if any, pursuant to the
Notes Registration Rights Agreement or the Holding Shares or other
Registrable Securities pursuant to the Equity Registration Rights
Agreement.
(xvi) The issuance, sale and delivery by the Company of the Notes,
the Exchange Notes and the Private Exchange Notes, if any, and by the LLC
of the Holding Shares and the execution, delivery and performance by the
Issuers of this Agreement, the Unit Agreement, the Company-LLC
Subscription Agreement and the Equity Registration Rights Agreement and
the execution, delivery and performance by the Company of the Agency
Agreement, the Escrow Agreement, the Notes Registration Rights Agreement
and the Indenture, the consummation by the Issuers of the transactions
contemplated hereby and thereby and the related transactions
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described in the Offering Memorandum (including the use of the proceeds
from the sale of the Securities as described in the Offering Memorandum
under the caption "Use of Proceeds") and the compliance by the Issuers
with the terms of the foregoing do not, and, at the Closing Date, will
not, (A) conflict with or constitute or result in a breach or violation by
the Company of its Estatutos or by the LLC of the LLC Agreement (each such
document and any other charter, by-laws or similar organizational document
being an "Organizational Document"), in each case, as in effect on the
date hereof or as of the Closing Time, as the case may be, or (B) conflict
with or constitute or result in a breach or violation by the Issuers of
(x) any of the terms or provisions of, or constitute a default (or an
event which, with notice or lapse of time or both, would constitute a
default) by the Issuers or give rise to any right to accelerate the
maturity or require the prepayment of any indebtedness under, or result in
the creation or imposition of any lien (except for liens contemplated by
the Escrow Agreement), charge or encumbrance upon any property or assets
of the Issuers under, any contract, indenture, mortgage, deed of trust,
loan agreement, note, lease, license, franchise agreement, authorization,
permit, certificate or other agreement or document to which either of the
Issuers is a party or by which either of them may be bound, or to which
either of them or any of their respective assets or businesses is subject,
in any such case, which has occurred or will so result, or (y) assuming
compliance by you with all applicable securities and Blue Sky laws, any
law, statute, rule or regulation, or any judgment, decree or order, in any
such case, of any domestic or foreign court or governmental or regulatory
agency or other body having jurisdiction over the Issuers or any of their
respective properties or assets except in the case of the matters set
forth in the preceding clause (B), for any conflicts, breaches or
violations that would not in the aggregate be reasonably expected to have
a Material Adverse Effect.
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(xvii) As of the Closing Date, the Units, the Unit Agreement, the
Notes, the Exchange Notes, the Private Exchange Notes, the Indenture, the
Escrow Agreement, the Notes Registration Rights Agreement, the Company-LLC
Subscription Agreement, the Holding Shares, the Common Stock and the
Equity Registration Rights Agreement will conform in all material respects
to the descriptions thereof in the Offering Memorandum under the captions
"Description of the Units," "Description of the Notes," "Exchange Offer;
Notes Registration Rights," "Description of the Class B Holding Shares,"
"Description of Company Capital Stock," and "Description of Equity
Registration and Other Rights."
(xviii) The financial statements of the Company included in the
Offering Memorandum, together with the related schedules and notes,
present fairly the financial position of the Company at the date indicated
and the statement of operations, stockholders' equity and cash flows of
the Company for the period specified; said financial statements have been
prepared in conformity with United States generally accepted accounting
principles ("U.S. GAAP"). The balance sheet of the LLC dated March 31,
1997 presents fairly the financial position of the LLC at the date
indicated and has been prepared in conformity with U.S. GAAP. The
supporting schedules, if any, included in the Offering Memorandum present
fairly in accordance with U.S. GAAP the information required to be stated
therein. Ernst & Young Auditores Independentes, S.C., which has examined
such financial statements and schedules as set forth in its report
included in the Offering Memorandum, is an independent public accounting
firm with respect to the Company and the LLC within the meaning of
Regulation S-X under the Act.
(xix) Since the respective dates as of which information is given in
the Offering Memorandum, except as otherwise specifically stated therein,
there has been no (A) material adverse change in the financial condition,
properties, assets, results of operations or prospects of either of the
Issuers whether or not arising in the ordi-
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nary course of business (a "Material Adverse Change"), (B) transaction
entered into by the Company, other than in the ordinary course of
business, that is material to the Company, (C) transaction entered into by
the LLC, other than pursuant to the LLC Agreement, the Company-LLC
Subscription Agreement or in connection with its formation or
administration, or (D) dividend or distribution of any kind declared, paid
or made by the Company on its capital stock or by the LLC on its member
interests.
(xx) The Company has the authorized, issued and outstanding
capitalization set forth in the Offering Memorandum under the subheading
"Actual" under the caption "Capitalization" (except that 8,700 additional
shares of the Company's redeemable preferred stock were subsequently
issued); all of the outstanding capital stock of the Company has been duly
authorized and validly issued, is fully paid and nonassessable and was not
issued in violation of any preemptive or similar rights (whether provided
contractually or pursuant to any Organizational Document). No holder of
any securities of either of the Issuers is entitled to (x) have such
securities (other than the Notes, the Exchange Notes and the Private
Exchange Notes, if any) registered under any registration statement
contemplated by the Notes Registration Rights Agreement or (y) have such
securities (other than the Holding Shares and any other Registrable
Securities) registered under any registration statement contemplated by
the Equity Registration Statement, except to the extent expressly set
forth in the Offering Memorandum; no holder of Common Stock is subject to
personal liability by reason of being such a holder; the Common Stock is
not subject to preemptive or similar rights, except to the extent set
forth in the Offering Memorandum; Banco Itau S.A. has been duly appointed
by the Company as Registrar of the Common Stock; pursuant to the Company's
Organizational Documents, ownership of the Common Stock of the Company is
evidenced solely by book entry records of Banco Itau S.A., as Registrar,
and no certificates with respect to such shares of capital stock exist;
the Common Stock conforms to all
-17-
statements relating thereto in the Offering Memorandum and such
description conforms to the rights set forth in the Estatutos of the
Company and any other document or agreement affecting the Common Stock.
(xxi) The capitalization of the LCC consists solely of Class A
Member Interests and Class B Member Interests. As of the date hereof there
are no Class A Member Interests and no Class B Member Interests issued and
outstanding. Upon issuance and delivery of the Holding Shares as
contemplated by this Agreement, as of the Closing Time there will be
814,955 Class A Member Interests and 125,000 Class B Member Interests
issued and outstanding, and all such issued and outstanding member
interests will have been duly authorized and validly issued, will be fully
paid and non-assessable with no personal liability attaching to any holder
thereof by virtue of the ownership thereof, will not have been issued in
violation of any preemptive or similar rights, and will be owned
beneficially and of record by the members of the LLC in the amounts set
forth on Schedule B. The designations, powers, preferences, rights,
qualifications, limitations and restrictions in respect of the Class B
Member Interests are valid, binding, and enforceable in accordance with
the terms of the LLC Agreement under Delaware law. There are no
outstanding or authorized options, warrants, purchase rights, conversion
rights, exchange rights or other contracts or commitments or preemptive
rights that could require the LLC to issue, sell or otherwise cause to
become outstanding any member interests of the LLC or any other security,
and there are no outstanding securities convertible into such member
interests of the LLC or any other security.
(xxii) Neither the Company nor the LCC is (A) in violation of its
respective Organizational Documents, (B) in default (or, with notice or
lapse of time or both, would be in default) in the performance or
observance of any obligation, agreement, covenant or condition contained
in any contract, indenture, mortgage, deed of trust, loan agreement, note,
lease, license, franchise agreement,
-18-
authorization, permit, certificate or other agreement or instrument to
which it is a party or by which it may be bound, or to which any of its
respective assets or properties is subject, or (C) in violation of any
law, statute, judgment, decree, order, rule or regulation of any domestic
or foreign court with jurisdiction over the Company or the LLC or any of
their respective assets or properties, or other governmental or regulatory
authority, agency or other body, other than, in the case of clauses (B)
and (C), such defaults or violations which, individually or in the
aggregate, could not reasonably be expected to have or result in a
Material Adverse Effect.
(xxiii) The Company owns or possesses, or can acquire on reasonable
terms, adequate licenses, trademarks, service marks, trade names,
copyrights and know-how (including trade secrets and other proprietary or
confidential information, systems or procedures) (collectively,
"intellectual property") necessary to conduct the business now or proposed
to be operated by each of them as described in the Offering Memorandum,
except where the failure to own, possess or have the ability to acquire
any such intellectual property could not, individually or in the
aggregate, be reasonably expected to have a Material Adverse Effect; and,
except as disclosed under the caption "Business - Trademarks" in the Final
Offering Memorandum, no officers or directors of the Company has received
any notice of infringement of or conflict with (and the Company does not
know of any such infringement of or conflict with) asserted rights of
others with respect to any of such intellectual property which, if any
such assertions of infringement or conflict were sustained, individually
or in the aggregate, could reasonably be expected to have or result in a
Material Adverse Effect, the Technical Services Agreement (as defined in
the Offering Memorandum) and the Intellectual Property License (as defined
in the Offering Memorandum) are in full force and effect and the Company
is in compliance with all of its obligations thereunder and the Company
has not received any notice or claim of default with respect thereto.
-19-
(xxiv) The Company and the LLC have obtained all consents,
approvals, orders, certificates, licenses, permits, franchises and other
authorizations of and from, and have made all declarations and filings
with, all governmental and regulatory authorities, all self-regulatory
organizations and all courts and other tribunals necessary to own, lease,
license and use their respective properties and assets and to conduct
their respective businesses in the manner described in the Offering
Memorandum, except to the extent that the failure to so obtain or file,
individually or in the aggregate, could not reasonably be expected to have
or result in a Material Adverse Effect.
(xxv) There is no legal action, suit, proceeding inquiry or
investigation before or by any court or governmental body or agency,
domestic or foreign, now pending or, to the knowledge of the Issuers,
threatened against the Company or the LLC or affecting the Company or the
LLC or any of their respective properties which would, individually or in
the aggregate, have or result in a Material Adverse Effect; the aggregate
of all pending legal or governmental proceedings to which the Company and
the LLC are a party or of which any of their respective properties or
assets are the subject which are not described in the Offering Memorandum,
including ordinary routine litigation incidental to the business, could
not reasonably be expected to result in a Material Adverse Effect. Except
as set forth in the Offering Memorandum, neither the Company nor the LLC
has received any notice or claim of any default (or event, condition or
omission which with notice or lapse of time or both would result in a
default) under any of its respective contracts or has knowledge of any
breach of any of such contracts by the other party or parties thereto,
except such defaults or breaches as could not reasonably be expected to
have or result in a Material Adverse Effect.
(xxvi) The Company and the LLC have filed all necessary federal,
state and foreign income and franchise tax returns, except where the
failure to so file such returns
-20-
would not result in a Material Adverse Effect, and each has paid all taxes
shown as due thereon, except where the Company or the LLC, as the case may
be, (a) has established appropriate U.S. GAAP reserves for, and (b) is
contesting in good faith, the payment of, such taxes; and there is no tax
deficiency that has been asserted against the Company or the LLC, as the
case may be, that would result in a Material Adverse Effect.
(xxvii) None of (a) the Operative Documents, (b) the issuance, sale
and delivery of the Securities to the Initial Purchasers upon payment
therefor as contemplated in this Agreement, (c) the issuance of the
Exchange Notes and any Private Exchange Notes, if any, (d) the issuance of
the Common Stock to the LLC pursuant to the Company-LLC subscription
Agreement or (e) the distribution of the Common Stock of the Company to
holders of the Holding Shares upon a Liquidation Event (as defined in the
LLC Agreement), in each case as contemplated in this Agreement and the
Notes Registration Rights Agreement, the Equity Registration Rights
Agreement and the LLC Agreement, are subject to any registration tax,
stamp duty or similar tax, duty, impost or levy imposed by the Federative
Republic of Brazil or any political subdivision thereof.
(xxviii) Except as otherwise described in the Offering Memorandum,
all payments by the Company or any Guarantor (as defined in the Indenture)
in respect of the Notes, the Exchange Notes, the Private Exchange Notes,
the Indenture, this Agreement, the Indenture and the Notes Registration
Rights Agreement (or by any Guarantor upon default by the Company) are not
subject to withholding or deduction for or on account of any present or
future taxes, duties, assessments or other governmental charges of
whatsoever nature imposed or levied by or on behalf of Brazil or Japan or
any political subdivision or authority thereof or therein having power to
tax; provided, however, that if the Notes, the Exchange Notes or the
Private Exchange Notes are redeemed for any reason prior to the eighth
anniversary of their issue, all payments of interest, fees,
-21-
commissions and original issue discount in respect of the Notes, the
Exchange Notes or the Private Exchange Notes by the Company (or by any
Guarantor upon default by the Company) to holders of the Notes, the
Exchange Notes or the Private Exchange Notes (including payments made
prior to redemption) would be subject to withholding of Brazilian income
tax at a rate of 15 percent, which rate may be reduced to 12 1/2 percent
pursuant to the bilateral treaty aimed at avoiding double taxation entered
into between Brazil and Japan on January 24, 1967 and enacted in Brazil by
Presidential Decree No. 61,899 dated December 14, 1967 (as amended and
supplemented by a protocol dated March 23, 1976 and enacted in Brazil by
Presidential Decree No. 81,194 dated January 9, 1978) and, in accordance
with and subject to the Indenture, the Company will pay such Additional
Amounts (as defined in the Indenture) as may be necessary in order that
the amounts received by the holder of any Note, Exchange Note or Private
Exchange Note after such withholding or deduction shall equal the net
respective amounts which would have been receivable by such holder in the
absence of such withholding imposed by Brazil or by Japan or any political
subdivision or taxing authority thereof or therein.
(xxix) The Company and the LLC each have good and marketable title
to all real and personal property described in the Offering Memorandum as
being owned by it and good and marketable title (subject to limitations on
assignment without the lessor's consent) to a leasehold estate in the real
property described in the Offering Memorandum as being leased by it, free
and clear of all liens, charges, encumbrances or restrictions, except, in
each case, as described in the Offering Memorandum or to the extent the
failure to have such title or the existence of such liens, charges,
encumbrances or restrictions does not result in a Material Adverse Effect.
(xxx) Neither the Company nor the LLC is an "investment company" or
a company "controlled by" an "investment company" as such terms are
defined in the Investment Com-
-22-
pany Act of 1940, as amended, and the rules and regulations thereunder
(the "Investment Company Act"); neither the Company nor the LLC is
otherwise subject to regulation or registration under the Investment
Company Act nor would either the Company or the LLC be subject to
regulation or registration under the Investment Company Act in the absence
of Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act.
(xxxi) Neither the Company nor the LLC nor any of their respective
directors, officers or controlling persons has taken, directly or
indirectly, any action designed, or which might reasonably be expected, to
cause or result, under the Act or otherwise, in, or which has constituted,
stabilization or manipulation of the price of any security of any of the
Issuers to facilitate the sale or resale of the Securities.
(xxxii) Neither the Company nor the LLC has any pension, profit
sharing, deferred compensation, bonus, retirement, stock option, stock
purchase, phantom stock or similar plans, including agreements evidencing
rights to purchase securities of the Company or the LLC, except (A)
certain Management Subscription Agreements, dated as of December 11, 1997,
with Messrs. Trynin and Fregenal, pursuant to which they have subscribed,
respectively, 432 and 324 shares of the Company's Common Stock and (B) the
Company has reserved 2,487 shares of Common Stock which may be issued to
certain executives at the discretion of the Board of Directors.
(xxxiii) None of the Company or the LLC nor any of their properties
or assets has any immunity from the jurisdiction of any court or from any
legal process (whether through service or notice, attachment prior to
judgment, attachment in aid of execution, executing or otherwise) under
the laws of the United States of America or the Federative Republic of
Brazil.
(xxxiv) To ensure the legality, validity, enforceability or
admissibility into evidence of each of this Agreement,
-23-
the Notes Registration Rights Agreement, the Agency Agreement, the
Indenture, the Escrow Agreement, the Units, the Notes, the Exchange Notes
or the Private Exchange Notes, the Company-LLC Subscription Agreement, the
Equity Registration Rights Agreement or the Unit Agreement or any other
document to be furnished hereunder or thereunder in the Federative
Republic of Brazil it is not necessary that this Agreement, the Notes
Registration Rights Agreement, the Agency Agreement, the Indenture, the
Escrow Agreement, the Units, the Notes, the Exchange Notes or the Private
Exchange Notes, the Company-LLC Subscription Agreement, the Equity
Registration Rights Agreement or the Unit Agreement or any such other
document be filed or recorded with any court or other authority in the
Federative Republic of Brazil or that any stamp or similar tax be paid in
the Federative Republic of Brazil, on or in respect of any of this
Agreement, the Notes Registration Rights Agreement, the Agency Agreement,
the Indenture, the Escrow Agreement, the Units, the Notes, the Exchange
Notes or the Private Exchange Notes, the Company-LLC Subscription
Agreement, the Equity Registration Rights Agreement or the Unit Agreement
or any such other document, other than the translation into Portuguese by
a sworn translator, the notarization by a notary public of signatures of
non-Brazilian parties thereto and the consularization of this Agreement,
the Notes Registration Rights Agreement, the Agency Agreement, the
Indenture, the Escrow Agreement, the Company-LLC Subscription Agreement or
the Equity Registration Rights Agreement at the Brazilian Consulate in New
York which will be effected by the Company as soon as reasonably
practicable after execution of such agreements; the Company is not aware
of any reason why the enforcement in Brazil of a judgment in respect of
any of such agreements would be contrary to Brazilian law, national
sovereignty or public policy or "good morals" (as set forth in Brazilian
law) nor is it aware of any provision of any of such agreements which
would for any reason not be upheld by the courts of Brazil.
-24-
(b) Any certificate signed by any officer of any of the Issuers and
delivered to the Initial Purchasers or to counsel for the Initial Purchasers
pursuant to the terms of this Agreement shall be deemed a representation and
warranty by the Issuers to the Initial Purchasers as to the matters covered
thereby.
SECTION 2. Purchase and Sale of the Securities. The Issuers agree to
sell to the Initial Purchasers and, subject to the terms and conditions and in
reliance upon the representations and warranties of the Issuers herein set
forth, each of the Initial Purchasers agrees severally to purchase from the
Issuers, at a purchase price of US$967.5 per Unit, representing US$967.476 per
Note and US$0.024 per Holding Share, the respective number of Units set forth in
Schedule A opposite the name of such Initial Purchaser.
SECTION 3. Delivery and Payment. Delivery of and payment for the
Securities shall be made at 10:00 A.M., New York City time, on June 6, 1997, or
such later date and time not more than two (2) business days thereafter as the
Initial Purchasers and the Company shall agree (such date and time of delivery
and payment for the Securities being herein called the "Closing Time"). Delivery
of the Securities shall be made to the Initial Purchasers against payment by the
Initial Purchasers of the purchase price thereof by wire transfer or certified
or official bank check or checks payable in federal (immediately available)
funds to the order of the Company or as the Issuers may direct. Delivery of the
Securities in definitive form shall be made at such location as the Initial
Purchasers shall reasonably designate at least one business day in advance of
the Closing Time and payment for the Securities shall be made at the offices of
Xxxxxx Xxxxxx & Xxxxxxx, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx. Certificates for
the Securities shall be registered in such names and in such denominations as
the Initial Purchasers may request not less than two full business days in
advance of the Closing Time.
The Issuers agree to have the Securities available for inspection,
checking and packaging by the Initial Purchas-
-25-
ers in New York, New York, not later than 10:00 A.M. on the business day prior
to the Closing Time.
SECTION 4. Resale of the Securities. The Initial Purchasers have
advised the Issuers that they propose to offer the Securities for resale upon
the terms and conditions set forth in this Agreement and in the Offering
Memorandum. Each Initial Purchaser hereby represents and warrants (as to itself
only) to, and agrees with, the Issuers that it (i) is a Qualified Institutional
Buyer, (ii) has not and will not solicit offers for, or offer or sell, the
Securities by means of any form of general solicitation or general advertising
(as those terms are used in Regulation D under the Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the Act and
has not and will not engage in any directed selling efforts within the meaning
of Rule 902 under the Act in the United States in connection with the Securities
being offered and sold pursuant to Regulation S under the Act, (iii) is not
purchasing with a view to or for offer or sale in connection with any
distribution that would be in violation of federal or state law and (iv) will
solicit offers for such Securities pursuant to Rule 144A, Regulation S or
resales not involving a public offering, as applicable, only from, and will
solicit offers for or offer, solicit offers to purchase, sell or deliver the
Securities, as part of their initial offering, only to or from (A) persons in
the United States whom the Initial Purchasers reasonably believe to be Qualified
Institutional Buyers or, if any such person is buying for one or more
institutional accounts for which such person is acting as fiduciary or agent,
only when such person has represented to the Initial Purchaser that each such
account is a Qualified Institutional Buyer, to whom notice has been given that
such sale or delivery is being made in reliance on Rule 144A, and, in each case,
in transactions under Rule 144A, (B) a limited number of other institutional
investors whom the Initial Purchasers reasonably believe to be Accredited
Investors that are purchasing for their own accounts or for the account of an
Accredited Investor for investment purposes and not with a view to, or for offer
or sale in connection with, any distribution of the Securities in violation of
the Act and (C) non-U.S. persons outside the United
-26-
States to whom the Initial Purchasers reasonably believe offers and sales of the
Securities may be made in reliance upon Regulation S under the Act in
transactions meeting the requirements of Regulation S; provided that with
respect to clause (B), each such transfer of Securities is effected by the
delivery to such purchaser of Securities in definitive form and registered in
its name (or its nominee's name) on the books maintained by the Unit Agent; and
provided, further, that with respect to clause (B), such institutional investors
shall be required to complete and deliver an Accredited Institutional Investor
Letter (substantially in the form of Annex A to the Offering Memorandum) to the
Initial Purchasers prior to the confirmation of any order.
SECTION 5. Covenants of the Issuers. Each of the Issuers covenant
with the Initial Purchasers as follows:
(a) Each of the Issuers will use its reasonable best efforts to
obtain on or prior to the Closing Time all government authorizations
(including, but not limited to, the Prior Authorization and any other
necessary authorizations from the Brazilian Central Bank) required in
connection with the issue and sale of the Units, the Notes, the Exchange
Notes, the Private Exchange Notes, the Common Stock delivered to the LLC
pursuant to the Company-LLC Subscription Agreement or the Holding Shares
and the performance of their respective obligations thereunder and under
this Agreement, the Notes Registration Rights Agreement, the Indenture,
the Escrow Agreement, the Units, the Notes, the Agency Agreement, the LLC
Agreement, the Company-LLC Subscription Agreement and the Equity
Registration Rights Agreement, and to cause such authorizations to be
continued in effect so long as any of the Units, the Notes, the Exchange
Notes, the Private Exchange Notes, if any, or the Holding Shares remain
outstanding.
(b) The Issuers will promptly, and in any event not more than 10
days after the Closing Time, (i) make application to the Brazilian Central
Bank for the Registration Certificate and thereafter do all things
reasonably necessary to obtain the Registration Certificate and provide
-27-
evidence thereof to the Initial Purchasers and (ii) do all things
reasonably necessary to obtain the issuance of the Registration
Certificate by the Brazilian Central Bank, as soon as practicable after
such approval is necessitated, to make any payment in dollars not set
forth in the Registration Certificate or to make any payment provided for
therein earlier than its originally scheduled date for payment.
(c) The Issuers will pay such additional amounts as may be necessary
in order that the net amounts receivable by the Initial Purchasers
pursuant to this Agreement after any withholding or deduction for or on
account of any present or future taxes, duties, assessments or other
governmental charges of whatever nature imposed or levied by or on behalf
of Brazil or Japan or any political subdivision thereof or by any
authority therein or thereof having power to tax shall equal the
respective amounts which would have been receivable in the absence of such
withholding or deduction.
(d) The Issuers will furnish to the Initial Purchasers and counsel
for the Initial Purchasers, without charge, such number of copies of the
Preliminary Offering Memorandum and the Offering Memorandum and any
amendments or supplements thereto as the Initial Purchasers and their
counsel may reasonably request.
(e) The Issuers will not at any time make any amendment or
supplement to the Preliminary Offering Memorandum or the Offering
Memorandum without the prior written consent of the Initial Purchasers,
which consent shall not be unreasonably withheld or delayed; provided,
however, that the consent of the Initial Purchasers shall not be required
if in the judgment of the Issuers upon advice of U.S. counsel to the
Issuers any such amendment or supplement is necessary so as to make the
statements contained in the Offering Memorandum not misleading.
(f) If at any time prior to completion of the distribution of the
Securities by the Initial Purchasers to
-28-
purchasers who are not its affiliates (as determined by the Initial
Purchasers) any event shall occur or condition shall exist as a result of
which it is necessary, in the reasonable opinion of the Initial Purchasers
or counsel for the Initial Purchasers, to amend or supplement the Offering
Memorandum in order that the Offering Memorandum, as then amended or
supplemented, will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time it is
delivered to a purchaser, not misleading or if in the reasonable opinion
of the Initial Purchasers or counsel to the Initial Purchasers, such
amendment or supplement is necessary to comply with applicable law, the
Issuers will, subject to paragraph (e) of this Section 5, promptly
prepare, at their own expense, such amendment or supplement as may be
necessary to correct such untrue statement or omission or to effect such
compliance (in form and substance agreed upon by the Initial Purchasers
and counsel to the Initial Purchasers), so that as so amended or
supplemented, the statements in the Offering Memorandum will not include
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances existing at the time it is delivered to a purchaser, not
misleading or so that such Offering Memorandum as so amended or
supplemented will comply with applicable law, as the case may be, and
furnish to the Initial Purchasers such number of copies of such amendment
or supplement as the Initial Purchasers may reasonably request. Each of
the Issuers agrees to notify the Initial Purchasers in writing to suspend
use of the Offering Memorandum as promptly as practicable after the
occurrence of an event specified in this paragraph (f) of which it has
knowledge, and the Initial Purchasers hereby agree upon receipt of such
notice from the Issuers to suspend use of the Offering Memorandum until
the Issuers have amended or supplemented the Offering Memorandum to
correct such misstatement or omission or to effect such compliance.
-29-
(g) Notwithstanding any provision of paragraph (d) or (e) to the
contrary, however, the Issuers' obligations under paragraphs (d) and (e)
and the Initial Purchasers' obligations under paragraph (f) shall
terminate on the date upon which no Initial Purchaser nor any of their
respective affiliates continues to hold Securities acquired as part of
their initial distribution.
(h) None of the Issuers nor any of their affiliates (as defined in
Rule 501(b) under the Act) will solicit any offer to buy or offer or sell
the Units, the Notes, the Exchange Notes or the Private Exchange Notes, if
any, or the Holding Shares by means of any form of general solicitation or
general advertising (as such terms are used in Regulation D under the
Act), or by means of any directed selling efforts (as defined in Rule 902
under the Act) in the United States in connection with the Securities
being offered and sold pursuant to Regulation S or in any manner involving
a public offering within the meaning of Section 4(2) of the Act prior to
the effectiveness of a registration statement with respect to the Units,
the Notes, the Exchange Notes or the Private Exchange Notes or the Holding
Shares, as applicable.
(i) None of the Issuers nor any of their affiliates (as defined in
Rule 501(b) under the Act) will offer, sell or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Act)
which could be integrated with the sale of the Securities in a manner that
would require the registration of any of the Securities under the Act.
(j) The Company will, so long as any Notes, Exchange Notes, Private
Exchange Notes or Holding Shares are outstanding, furnish to the Initial
Purchasers, the Trustee, the Holding Share Transfer Agent and each holder
of any Notes, Exchange Notes, Private Exchange Notes or Holding Shares on
a timely basis, whether or not the Company has a class of securities
registered under the Exchange Act, (i) within 140 days after the end of
each fiscal year, annual reports on Form 20-F (or any successor form)
contain-
-30-
ing the information required to be contained therein (or required
in such successor form); (ii) within 60 days after the end of each of the
first three fiscal quarters of each fiscal year reports on Form 6-K (or
any successor form) containing substantially the same information required
to be contained in Form 10-Q (or required in any successor form); and
(iii) promptly from time to time after the occurrence of an event required
to be therein reported, such other reports on Form 6-K (or any successor
form) containing substantially the same information required to be
contained in Form 8-K (or required in any successor form). Notwithstanding
the foregoing, prior to the filing of the Exchange Offer Registration
Statement with the SEC and in the event that the Company never becomes
subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, the Company will file with the Trustee and provide the
Initial Purchasers and the holders of any of the Securities and
prospective purchasers of any of the Securities designated by such
holders, upon request of such holders or prospective purchasers, all of
the information that would have been required to have been filed with the
SEC pursuant to clauses (i), (ii) and (iii) above. In addition to the
above, the Company and the LLC will make available any further information
required to be delivered pursuant to Rule 144A(d)(4) under the Act to
permit compliance with Rule 144A in connection with resales of any of the
Securities. Each of the reports will be prepared in accordance with U.S.
GAAP consistently applied and will be prepared in accordance with the
applicable rules and regulations of the SEC.
(k) Each of the Issuers will use its reasonable best efforts in
cooperation with the Initial Purchasers to (i) permit the Units, the Notes
and the Holding Shares to be eligible for clearance and settlement through
The Depository Trust Company, the Euroclear System and Cedel Bank, societe
anonyme, and (ii) permit the Securities to be designated as PORTAL
securities in accordance with the rules and regulations of the NASD.
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(l) Each Note, Private Exchange Note, if any, and each Holding Share
will bear the following legend until such legend shall no longer be
necessary or advisable because the applicable Security is no longer
subject to the restrictions on transfer described herein:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
ANY STATE OR OTHER SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS THE TRANSACTION IS EXEMPT
FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT) (AN "ACCREDITED INVESTOR")
OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN
"OFFSHORE TRANSACTION" PURSUANT TO RULE 903 OR 904 OF REGULATION S,
(2) AGREES THAT IT WILL NOT, PRIOR TO (X) THE DATE WHICH IS TWO
YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k)
UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER)
AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR ANY
PREDECESSOR OF THIS SECURITY) OR THE LAST DATE ON WHICH THE COMPANY
OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY OR
ANY PREDECESSOR OF THIS SECURITY AND (Y) SUCH LATER DATE, IF ANY,
-32-
AS MAY BE REQUIRED BY APPLICABLE LAWS (THE "RESALE RESTRICTION
TERMINATION DATE"), OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY
EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO
A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS
A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO
OFFERS AND SALES TO NON-US PERSONS THAT OCCUR OUTSIDE THE UNITED
STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT,
PURSUANT TO RULE 904 OF REGULATION S, (E) TO AN ACCREDITED INVESTOR
THAT IS ACQUIRING THE SECURITIES FOR ITS OWN ACCOUNT, OR FOR THE
ACCOUNT OF SUCH ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON
TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED UPON THE REQUEST
OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "US
PERSON" HAVE THE RESPECTIVE MEANINGS GIVEN TO THEM BY REGULATION S
UNDER THE SECURITIES ACT.
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(m) The Issuers will arrange for the registration and qualification
of the Securities for offering and sale under the applicable securities or
"blue sky" laws of such states and other jurisdictions as the Initial
Purchasers may designate in connection with the resale of the Securities
as contemplated by this Agreement and the Offering Memorandum and will
continue such qualifications in effect for as long as may be necessary to
complete the distribution of the Securities; provided that in no event
shall the Issuers be obligated to (i) qualify as a foreign corporation or
as a dealer in securities in any jurisdiction where it would not otherwise
be required to so qualify but for this Section 5(m), (ii) file any general
consent to service of process in any jurisdiction where it is not at the
Closing Time then so subject or (iii) subject itself to taxation in any
such jurisdiction if it is not so subject. The Issuers will file such
statements and reports as may be required by the laws of each jurisdiction
in which the Securities have been qualified as above provided. The Issuers
shall promptly advise the Initial Purchasers of the receipt by any of the
Issuers of any notification with respect to the suspension of the
qualification or exemption from qualification of the Securities for
offering or sale in any jurisdiction or the institution, threatening or
contemplation of any proceeding for such purpose.
(n) From the date hereof to the Closing Time, none of the Issuers
will issue any press release or other public communication directly or
indirectly or hold any press conference with respect to the Issuers or the
business, financial condition, assets, results of operations or prospects
of the Issuers, without the prior consent of the Initial Purchasers,
unless in the judgment of the Issuers and their counsel, and after
notification to the Initial Purchasers, such press release, communication
or conference is required by law.
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(o) The Company will use the proceeds received from the sale of the
Securities in the manner specified in the Offering Memorandum under the
heading "Use of Proceeds."
(p) Pursuant to the Escrow Agreement, the Company will deposit the
Initial Escrow Amount into a collateral account in the United States,
representing funds that together with the proceeds from the investment
thereof will be sufficient to pay the first six interest payments on the
Notes, and will take all actions necessary to pledge, assign and set over
to the Trustee, for the benefit of the holders of the Notes and the
Trustee (in its capacity as such under the Indenture), and irrevocably
grant to the Trustee for the benefit of the holders of the Notes and the
Trustee (in its capacity as such under the Indenture) a first priority
perfected security interest in, all of its respective right, title and
interest in such collateral account, all funds held therein and all other
Collateral (as such term is defined in the Escrow Agreement) held by the
Escrow Agent or on its behalf, in order to secure the obligations and
indebtedness of the Company under the Indenture, the Escrow Agreement and
the Notes.
(q) The LLC shall comply with all of its obligations under the LLC
Agreement, including but not limited to (i) its obligation pursuant to
Section 7.5 thereof to make a timely QEF Election (as defined therein),
(ii) its obligation to maintain a calendar year as its fiscal year and
(iii) obtaining the consent of Class B members with respect to amendments
of the LLC Agreement to the extent set forth in Section 13.3 thereof.
(r) As soon as reasonably practicable, the Company and Holding LLC
shall register the Common Stock to be held by Holding LLC as a foreign
investment in the name of Holding LLC with the Central Bank of Brazil; the
Company shall, prior to any distribution of Common Stock by Holding LLC
(whether upon liquidation of Holding LLC or otherwise), establish and
shall thereafter maintain an American Depositary Receipt program (the "ADR
Program") providing for deposits from time to time of Common Stock against
is-
-35-
suance by the depositary (the "Depositary") of American Depositary
Receipts ("ADRs") and shall obtain all approvals, authorizations and
consents from, and shall make all filings, declarations or presentations
with, any governmental or administrative body (including but not limited
to the CVM and the Central Bank of Brazil) which shall at any time be
necessary or desirable for the establishment of the ADR Program.
(s) The Issuers shall not, for a period of 180 days from the date of
the Offering Memorandum, without the prior written consent of Xxxxxxx
Xxxxx, directly or indirectly, offer, sell, grant any option to purchase
or otherwise dispose of any debt securities of the Company (other than the
Exchange Notes and the Private Exchange Notes, if any) or any Subsidiary.
SECTION 6. Payment of Expenses. (a) Whether or not any sale of the
Securities is consummated, the Issuers agree jointly and severally to pay and
bear all costs and expenses incident to the performance of all of their
obligations under this Agreement, including (i) the preparation and printing of
the Preliminary Offering Memorandum, the Offering Memorandum and any amendments
or supplements thereto and the cost of furnishing copies thereof to the Initial
Purchasers, (ii) the preparation, issuance, printing and distribution of the
Units, the Notes, the Exchange Notes, the Private Exchange Notes, if any, and
the Holding Shares and any survey of state securities or "blue sky" laws or
legal investment memoranda, (iii) the delivery to the Initial Purchasers of the
Securities, (iv) the fees and disbursements of the Issuers' counsel and
accountants, (v) the qualification of the Securities under the applicable state
securities or "blue sky" laws in accordance with the provisions of Section 5(m)
hereof and any filing for review of the offering with the NASD, if required,
including filing fees and reasonable fees and disbursements of counsel to the
Initial Purchasers in connection therewith and in connection with the
preparation of any survey of state securities or "blue sky" laws or legal
investment memoranda, (vi) any fees charged by rating agencies for rating the
Securities, (vii) the fees and
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expenses of the Trustee, the Paying Agent, the Unit Agent and the Holding Share
Transfer Agent, including the fees and disbursements of their counsel, (viii)
all expenses (including travel expenses) of the Issuers and the Initial
Purchasers in connection with any meetings with prospective investors in the
Securities and (ix) all expenses and listing fees in connection with the
application for designation of the Securities as PORTAL securities and to permit
the Units, the Notes, the Exchange Notes, the Private Exchange Notes and the
Holding Shares, as applicable, to be eligible for clearance through The
Depository Trust Company, the Euroclear System and Cedel Bank, societe anonyme.
Notwithstanding the foregoing, if the sale of the Securities is consummated as
provided for herein, the Initial Purchasers shall reimburse the Issuers for
US$312,500 of the expenses set forth in the preceding clauses (i) through (ix).
(b) If the sale of the Securities provided for herein is not
consummated because any condition to the obligations of the Initial Purchasers
set forth in Section 7 hereof is not satisfied, because this Agreement is
terminated pursuant to Section 11 hereof or because of any failure, refusal or
inability on the part of any of the Issuers to perform all obligations and
satisfy all conditions on their part to be performed or satisfied hereunder
other than by reason of a default by an Initial Purchaser in payment for the
Securities at the Closing Time, the Issuers agree jointly and severally to
reimburse the Initial Purchasers promptly upon demand for all reasonable
out-of-pocket expenses (including reasonable fees and disbursements of their
counsel) that shall have been incurred by it in connection with the proposed
purchase and sale of the Securities.
SECTION 7. Conditions of the Initial Purchasers' Obligations. The
obligations of the Initial Purchasers to purchase and pay for the Securities are
subject to the continued accuracy, as of the Closing Time, of the
representations and warranties of the Issuers herein contained, to the accuracy
of the statements of the Issuers and officers of the Issuers made in any
certificate pursuant to the provisions hereof, to the
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performance by each of the Issuers of its obligations hereunder, and to the
following further conditions:
(a) At the Closing Time, the Initial Purchasers shall have received
the opinion of Xxxxxxx Xxxx & Xxxxxxxxx, United States counsel to the
Issuers, dated as of the Closing Time, in form and substance reasonably
satisfactory to the Initial Purchasers and counsel for the Initial
Purchasers, to the effect that:
(1) no consent, approval, authorization, order, registration
or qualification of or with any court or governmental agency or body
in the United States of America or the State of New York is required
for the execution and delivery by the Company and the LLC, as
applicable, of the Purchase Agreement, the Equity Registration
Rights Agreement, the Notes Registration Rights Agreement, the
Agency Agreement, the Escrow Agreement, the Unit Agreement, the
Company-LLC Subscription Agreement or the Indenture or for the
issuance, sale and delivery of the Notes pursuant to the Purchase
Agreement, the issuance and delivery of the Exchange Notes or the
Private Exchange Notes, if any, in exchange for the Notes in the
manner contemplated by the Notes Registration Rights Agreement, or
the consummation by the Company and the LLC, as applicable, of any
of the transactions contemplated in such instruments and agreements,
or the issuance, sale and delivery of the Holding Shares by the LLC
pursuant to the Purchase Agreement (except for authorizations
required under the securities or Blue Sky laws of certain
jurisdictions, as to which we express no opinion) nor will such
issuance, sale and delivery of the Securities to the Initial
Purchasers or the execution, delivery and performance of such
instruments and agreements by the Company and the LLC, as
applicable, conflict with, or result in a violation of any of the
terms or provisions of, any existing applicable United States
Federal or New York State judgment, order or decree which is known
to such counsel or any
-38-
law, rule or regulation, in any such case, of any government,
governmental instrumentality or court located in the United States
having jurisdiction over the Company or any of its properties or
assets, except that (a) the transactions contemplated by the Notes
Registration Rights Agreement are subject, to the extent set forth
therein, to the registration and other requirements of the Act and
the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act") and (b) the transactions contemplated by the Equity
Registration Rights Agreement are subject, to the extent set forth
therein, to the registration requirements of the Act;
(2) to our knowledge, there is not pending or threatened any
action, suit, proceeding, inquiry or investigation to which the
Company or the LLC is a party, or to which the property of the
Company or the LLC is subject, before or brought by any court or
governmental agency or body in the Federal courts of the United
States or in any State court in the State of New York, which might
reasonably be expected to have or result in a Material Adverse
Effect, or which might reasonably be expected to materially and
adversely affect the properties or assets thereof or the
consummation or performance by the Company or the LLC of its
obligations under any of the Operative Documents;
(3) the execution, delivery and performance of the Operative
Documents, the issuance by the Company of the Notes, the issuance by
the LLC of the Holding Shares and the consummation of the
transactions contemplated in the Operative Documents and compliance
by the Company and the LLC with their respective obligations under
the Operative Documents will not, whether with or without the giving
of notice or lapse of time or both, (a) conflict with or constitute
a breach of, or a default or otherwise cause or permit any holder of
indebtedness of the Company to have a
-39-
right to require the repurchase, redemption or repayment of any of
such indebtedness of the Company or the LLC under or (b) result in
the creation or imposition of any lien (other than liens
contemplated by the Escrow Agreement), charge or encumbrance upon
any property or assets of the Company or the LLC pursuant to any
material contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or any other agreement or instrument,
known to us, to which the Company or the LLC is a party or by which
either of them may be bound, or to which any of the property or
assets of the Company or the LLC is subject, or (c) result in any
violation of the provisions of the LLC Agreement, or any applicable
New York or Federal law, statute, rule, regulation, judgment, order,
writ or decree, known to us, of any government, government
instrumentality or court having jurisdiction over the Company or the
LLC or any of their respective properties, assets or operations
except in the case of (a), (b), or (c) above, such as would not,
either singly or in the aggregate, have a Material Adverse Effect;
(4) the Notes are in the form contemplated by the Indenture
and assuming that (a) the Company has been duly organized and is
validly existing and in good standing under the laws of the
Federative Republic of Brazil, (b) the Company has all requisite
corporate power and authority to issue, sell and deliver the Notes
and the issuance, sale and delivery of the Notes has been duly
authorized by all requisite corporate action by the Company, (c) the
Company has all requisite corporate power and authority to issue and
deliver the Exchange Notes and the Private Exchange Notes in
exchange for the Notes in the manner contemplated by the Notes
Registration Rights Agreement and such issuance and delivery has
been duly authorized by all requisite corporate action of the
Company, (d) the Company has all requisite corporate power and
authority to execute and deliver the Purchase Agree-
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ment, the Unit Agreement, the Indenture, the Escrow Agreement, the
Agency Agreement, the Notes Registration Rights Agreement, the
Equity Registration Rights Agreement and the Company-LLC
Subscription Agreement and to perform its obligations thereunder and
such execution, delivery and performance has been duly authorized by
all requisite corporate action by the Company, (e) the Unit
Agreement, the Indenture, the Escrow Agreement, the Agency
Agreement, the Notes Registration Rights Agreement, the Equity
Registration Rights Agreement and the Company-LLC Subscription
Agreement have been duly executed and delivered by the Company, (f)
the LLC has all requisite limited liability power and authority to
execute and deliver the Unit Agreement, the Company-LLC Subscription
Agreement and the Equity Registration Rights Agreement and to
perform its obligations thereunder and such execution, delivery and
performance has been duly authorized by all requisite limited
liability company action by the LLC, (g) the Unit Agreement, the
Company-LLC Subscription Agreement and the Equity Registration
Rights Agreement have been duly executed and delivered by the LLC,
(I) when the Notes are authenticated by the Trustee in accordance
with the provisions of the Indenture (assuming the due
authorization, execution and delivery of the Indenture by the
Trustee) and delivered and paid for in accordance with the terms of
this Agreement, registered holders of the Notes will be entitled to
the benefits of the Indenture and the Indenture will constitute the
valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, (II) when the Exchange Notes
and the Private Exchange Notes, if any, are authenticated and
delivered in exchange for the Notes in the manner contemplated by
the Notes Registration Rights Agreement, registered holders of the
Exchange Notes and Private Exchange Notes will be entitled to the
benefits of the Indenture and will constitute the valid and binding
obligations of the Company enforceable
-41-
against the Company in accordance with their terms, and (III) each
of the Unit Agreement, the Indenture, the Escrow Agreement, the
Agency Agreement, the Notes Registration Rights Agreement, the
Equity Registration Rights Agreement and the Company-LLC
Subscription Agreement constitutes a valid and binding agreement of
the Company, enforceable against the Company in accordance with its
terms, and (IV) each of the Unit Agreement, the Company-LLC
Subscription Agreement and the Equity Registration Rights Agreement
constitutes a valid and binding obligation of the LLC, enforceable
against the LLC in accordance with its terms, except, in each case,
(x) as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or
similar laws affecting the rights and remedies of creditors
generally and (y) such counsel need express no opinion concerning
the enforceability of, or the enforceability under law under certain
circumstances of, the indemnification provisions of Section 4 of the
Notes Registration Rights Agreement or Section 5 of the Equity
Registration Rights Agreement with respect to a liability where such
indemnification is contrary to public policy;
(5) assuming compliance by the Escrow Agent with the terms of
the Escrow Agreement, the Escrow Agreement creates a valid perfected
security interest in favor of the Trustee in all right, title and
interest of the Company in and to the Escrow Account and the
Collateral;
(6) the statements in the Offering Memorandum under the
headings "Summary -- The Offering," "Description of the Units,"
"Description of the Notes," "Exchange Offer; Notes Registration
Rights" and "Equity Registration and Other Rights," insofar as such
statements purport to summarize certain provisions of the Units, the
Notes, the Exchange Notes, the Private Exchange Notes, the
Indenture, the Notes Registration
-42-
Rights Agreement and the Equity Registration Rights Agreement,
provide a fair summary of such provisions of such agreements and
instruments;
(7) assuming the Securities are issued and sold under the
circumstances contemplated by this Agreement and the representations
and warranties of the Issuers and the Initial Purchasers set forth
herein are true and correct, it is not necessary in connection with
the offer, sale and delivery of the Securities to the Initial
Purchasers and to each Subsequent Purchaser in the manner
contemplated by the Purchase Agreement and the Offering Memorandum
to register the Securities under the 1933 Act or to qualify the
Indenture under the Trust Indenture Act;
(8) assuming the Company invests the net proceeds of the
Offering as described under "Use of Proceeds" in the Final Offering
Memorandum, neither the Company nor the LLC is an "investment
company" or an entity "controlled" by an "investment company," as
such terms are defined in the Investment Company Act of 1940 (the
"Investment Company Act") nor is the Company or the LLC otherwise
subject to regulation or registration under the Investment Company
Act. In forming the foregoing opinion, we are not relying on the
availability of any exemption under Section 3(c)(1) or 3(c)(7) of
the Investment Company Act;
(9) the statements in the Offering Memorandum under the
caption "Tax Considerations -- United States" fairly summarize the
material United States Federal tax consequences of acquiring, owning
and disposing of the Units, the Notes, the Exchange Notes and the
Holding Shares;
(10) the LLC will be treated for federal income tax purposes
as a partnership and, based on the manner in which it intends to
limit its business activities and monitor its "qualifying income"
for purposes of Section 7704(c) of the Internal Revenue Code of
-43-
1986, as amended (the "Code"), it will not be classified as a
publicly traded partnership that is treated as a corporation under
section 7704(a) of the Code.
In addition such counsel shall state that such counsel has
participated in conferences with representatives of the Initial
Purchasers, officers and other representatives of the Issuers and
representatives of the independent certified accountants of the Issuers,
at which conferences the contents of the Offering Memorandum and related
matters were discussed, and although such counsel has not verified and
does not pass upon or assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Offering
Memorandum (except and only to the extent set forth in subclauses (7) and
(10) above), on the basis of the foregoing (relying as to materiality to
the extent such counsel deems appropriate upon opinions of officers and
other representatives of the Issuers), on the basis of the foregoing
nothing has come to its attention to cause it to believe that the Offering
Memorandum at the date thereof or as of the Closing Time, contained or
contains an untrue statement of a material fact or omitted or omits to
state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading (it
being understood that such counsel has not been requested to and does not
make any comment with respect to (i) the financial statements, and the
notes thereto and related schedules, (ii) other financial or statistical
data found in or derivable from the financial, accounting or internal
records of the Issuers or (iii) any forward-looking or projected financial
or statistical data relating to the Issuers, in each case, included in the
Offering Memorandum).
In rendering such opinion, such counsel (A) need not express any
opinion with regard to the application of laws of any jurisdiction other
than the Federal laws of the United States and the laws of the State of
New York and (B) may rely as to matters of fact (but not as to legal
-44-
conclusions), to the extent they deem proper, on certificates of
responsible officers of the Issuers and public officials. Such opinion
shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document
relating to legal opinions, including, without limitation, the Legal
Opinion Accord of the ABA Section of Business Law (1991).
References to the Offering Memorandum in this Section (a) include
any supplement thereto prior to the Closing Time.
(b) At the Closing Time, the Initial Purchasers shall have received
the opinion of Xavier, Bernardes, Braganca, Brazilian counsel to the
Issuers, dated as of the Closing Time, in form and substance satisfactory
to the Initial Purchasers and counsel for the Initial Purchaser, to the
effect that:
(1) the Company has been duly organized and is a validly
existing sociedade anonima in good standing under the laws of the
Federative Republic of Brazil, with full corporate power and
authority to own, lease and operate its assets and properties and
conduct its business currently conducted and as described in the
Offering Memorandum;
(2) the authorized, issued and outstanding capital stock of
the Company is as set forth in the Offering Memorandum under the
subheading "Actual" under the caption "Capitalization" (except that
8,700 additional shares of the Company's redeemable preferred stock
were subsequently issued); the Company does not have any
subsidiaries;
(3) (a) the Company has the requisite corporate power and
authority to issue, sell and deliver the Notes pursuant to the
Purchase Agreement and the issuance, sale and delivery of the Notes
pursuant to the Purchase Agreement have been duly authorized by
-45-
all requisite corporate action by the Company; (b) the Company has
all requisite corporate power and authority to issue and deliver the
Exchange Notes and the Private Exchange Notes in exchange for the
Notes in the manner contemplated by the Notes Registration Rights
Agreement and such issuance and delivery has been duly authorized by
all requisite corporate action by the Company; (c) the Company has
the requisite corporate power and authority to issue, sell and
deliver the Common Stock pursuant to the Company-LLC Subscription
Agreement and the issuance, sale and delivery of the Common Stock
pursuant to the Company-LLC Subscription Agreement has been duly
authorized by all requisite corporate action by the Company; (d) the
Company has all requisite corporate power and authority to execute
and deliver the Purchase Agreement, the Indenture, the Escrow
Agreement, the Unit Agreement, the Company-LLC Subscription
Agreement, the Agency Agreement, the Notes Registration Rights
Agreement and the Equity Registration Rights Agreement and to
perform its obligations thereunder and such execution, delivery, and
performance has been duly authorized by all requisite corporate
action by the Company; (e) the Indenture, the Purchase Agreement,
the Escrow Agreement, the Unit Agreement, the Company-LLC
Subscription Agreement, the Agency Agreement, the Notes Registration
Rights Agreement and the Equity Registration Rights Agreement have
been duly executed and delivered by the Company and are in proper
legal form under the laws of the Federative Republic of Brazil for
the enforcement thereof against the Company and, assuming due
authorization, execution and delivery of the aforesaid agreements by
the other parties thereto, each constitute a valid and legally
binding obligation of the Company, enforceable in accordance with
their respective terms, subject as to enforcement, to applicable
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights generally
and to general equity principles;
-46-
and, assuming the signatures of the parties to the aforesaid
agreements other than the signatures of the Company and any other
Brazilian signatories have been duly notarized by a competent notary
public, it is not necessary to ensure the legality, validity,
enforceability or admissibility in evidence of any of the aforesaid
agreements in the Federative Republic of Brazil or any political
subdivision thereof that any of them be filed or recorded or
enrolled with any court or authority in the Federative Republic of
Brazil or any political subdivision thereof or that any stamp,
registration or similar tax be paid in the Republic of Brazil or any
political subdivision thereof, other than the consularization of
such agreements by a Brazilian Consulate and registration of any
such agreement together with a sworn Portuguese translation thereof,
with the competent Registry of Deeds and Documents and payment of
filing fees therefor;
(4) the Common Stock delivered to the LLC pursuant to the
Company-LLC Subscription Agreement has been duly authorized and, at
the Closing Time, will be validly issued, fully paid and
non-assessable and will have attached to it the rights and benefits
described in the Offering Memorandum, including under the caption
"Description of Company Capital Stock"; at the Closing Time, none of
such Common Stock will have been issued in violation of any
preemptive or other similar rights under any contract or the
Company's Organizational Documents or applicable Brazilian law; no
holder of any of the Common Stock will be subject to personal
liability by reason of being such a holder; at the Closing Time, the
LLC will be the record owner of (A) 125,000 shares of Common Stock
delivered to the LLC pursuant to the Company -LLC Subscription
Agreement, representing approximately 7.0% of the common share
capital of the Company on a fully diluted basis (including for
purposes of such calculation the exercise in full of all outstanding
-47-
subscription bonds) and (B) 814,955 shares of Common Stock delivered
to the LLC by the Founding Class A Member (as defined in the LLC
Agreement), representing 45.6% of the common share capital of the
Company on a fully diluted basis (including for purposes of this
calculation the exercise in full of all outstanding subscription
bonds);
(5) all of the outstanding capital stock of the Company has
been duly authorized and validly issued, is fully paid and
nonassessable and was not issued in violation of any preemptive or
other similar rights under any contract or the Company's
Organizational Documents or applicable Brazilian Law; pursuant to
the Company's Organizational Documents, ownership of all of the
shares of capital stock of the Company is evidenced solely by book
entry records of Banco Itau S.A., as Registrar, and no certificates
with respect to such shares of capital stock exist;
(6) except as set forth in the Offering Memorandum and
assuming compliance by the Company and Holding LLC of their
respective obligations under Section 5(r) of the Purchase Agreement,
(A) there are no limitations under Brazilian law on the rights of
non-Brazilian holders of Common Stock which would not be applicable
to Brazilian holders with respect to their Common Stock, (B) all
dividends and other distributions declared and payable on the Common
Stock may under current Brazilian laws and regulations be paid
directly to the account of a holder of Common Stock in Brazilian
Reais that may be converted into foreign currency that may be freely
transferred out of Brazil, (C) no such dividends and other
distributions, once made to holders of Common Stock who are
non-domiciliaries of Brazil, will be subject to Brazilian laws and
regulations and (D) all such dividends and other distributions are
otherwise free and clear of any other tax, duty, withholding or
deduc-
-48-
tion in Brazil without the necessity of obtaining any governmental
authorization in Brazil;
(7) the Common Stock conforms in all material respects to the
description thereof in the Offering Memorandum under the caption
"Description of Company Capital Stock";
(8) no consent, approval, authorization, license,
qualification or order of or filing or registration with, any court
or governmental or regulatory agency or body of the Federative
Republic of Brazil or any political subdivision thereof, including,
without limitation, the Comissao de Valores Mobiliarios, is required
for the execution and delivery by the Company (and the LLC, as
applicable) of the Purchase Agreement, the Equity Registration
Rights Agreement, the Notes Registration Rights Agreement, the
Agency Agreement, the Escrow Agreement, the Unit Agreement, the
Company-LLC Subscription Agreement or the Indenture or for the
issuance, sale and delivery of the Notes pursuant to the Purchase
Agreement, the issuance and delivery of the Exchange Notes or the
Private Exchange Notes, if any, in exchange for the Notes in the
manner contemplated by the Notes Registration Rights Agreement, or
the consummation by the Company (and the LLC, as applicable) of any
of the transactions contemplated in such instruments and agreements,
including, but not limited to, the obligation of the Company to
effect payments of principal of, and premium, interest and
Additional Amounts (as defined in the Indenture) on the Notes, the
Exchange Notes or the Private Exchange Notes, if any, in United
States dollars free of any liability on the part of any holder
thereof, except for (A) the registration of the issue of the Notes,
the Exchange Notes and the Private Exchange Notes, if any, with the
Brazilian Central Bank to allow the remittance of U.S. dollars from
Brazil for payment on each scheduled due date of principal, interest
and Additional Amounts on
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the Notes, the Exchange Notes and the Private Exchange Notes and
those costs, fees and commissions set forth in the Purchase
Agreement, the Indenture and the Registration Rights Agreement
covered by the Prior Authorization, which will be evidenced by the
Registration Certificate; and (B) the approval of the Brazilian
Central Bank for the Company to make any payment in U.S. dollars not
set forth in the Registration Certificate or to make any payment
provided for therein earlier than its originally scheduled date for
payment (including amounts payable pursuant to acceleration of the
maturity of the Notes, the Exchange Notes or the Private Exchange
Notes, a Tax Redemption (as defined in the Indenture), any optional
redemption by the Company, a redemption upon a Significant Equity
Offering (as defined in the Indenture), a Change of Control (as
defined in the Indenture) or an Asset Sale (as defined in the
Indenture);
(9) the Prior Authorization of the Notes, Exchange Notes and
Private Exchange Notes has been obtained from the Brazilian Central
Bank and is in full force and effect; to the knowledge of such
counsel after due inquiry, there is no reason that the Registration
Certificate should not be expected to be issued by the Central Bank
in due course;
(10) the issuance, sale and delivery of the Notes, the
Exchange Notes and the Private Exchange Notes, if any, the
execution, delivery and performance by the Company of this
Agreement, the Agency Agreement, the Escrow Agreement, the Unit
Agreement, the Company-LLC Subscription Agreement, the Notes
Registration Rights Agreement, the Equity Registration Rights
Agreement and the Indenture, the consummation by the Issuers of the
transactions contemplated hereby, thereby and in the Offering
Memorandum and the compliance by the Issuers with the terms of the
foregoing do not, and, at the Closing Time, will not, conflict with
or constitute or result in a
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breach or violation by the Issuers of (A) any of the terms or
provisions of, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) by
either of the Issuers or give rise to any right to accelerate the
maturity or require the prepayment of any indebtedness under, or
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of either of the Issuers
under, any obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, deed of trust, loan agreement,
lease, license, note, franchise agreement, authorization, permit,
certificate or other agreement or instrument to which either of the
Issuers is a party or by which either of the Issuers may be bound or
to which any of their respective assets or properties may be subject
or (B) any law, rule or regulation of the Federative Republic of
Brazil or any political subdivision thereof or any order, decree or
judgment applicable to either of the Issuers, in any such case, of
any court or governmental or regulatory agency or body or
arbitrator;
(11) the Company is not (A) in violation of its Estatutos, (B)
in violation of any law, statute, judgment, decree, order, rule or
regulation of any domestic or foreign court with jurisdiction over
the Company or any of its assets or properties, or other
governmental or regulatory authority, agency or other body, or (C)
to the knowledge of such counsel, in default (or, with notice or
lapse of time or both, would be in default) in the performance or
observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust, loan
agreement, note, lease, license, franchise agreement, authorization,
permit, certificate or other agreement or instrument to which it is
a party or by which it may be bound, or to which any of its
respective assets or properties is subject other than such defaults
or violations which, individually
-51-
or in the aggregate, could not reasonably be expected to have or
result in a Material Adverse Effect;
(12) the Company has obtained all consents, approvals, orders,
certificates, licenses, permits, franchises and other authorizations
of and from, and has made all declarations and filings with, all
governmental and regulatory authorities, all self-regulatory
organizations and all courts and other tribunals necessary, in each
case, in the Federative Republic of Brazil or any political
subdivision thereof, to own, lease, license and use its properties
and assets and to conduct its businesses as now conducted and in the
manner described in the Offering Memorandum, except to the extent
that the failure to so obtain or file, individually or in the
aggregate, could not reasonably be expected to have a Material
Adverse Effect;
(13) the Company and each of the Licenseholders comply in all
material respects with the terms and conditions of all decisions,
policies, authorizations and licenses announced, rendered, granted
or regulated, as the case may be, by the Brazilian Ministry of
Communications (the "Ministry"), and the other governmental
authorities having authority over services provided by the Company
with respect to the construction and operation of the businesses of
the Company, including, without limitation, Brazilian Law No. 9,295
and Brazilian Presidential Decrees No. 2,056 and 2,196, Ordinances
Xx. 000, Xx. 000 and No. 1,306 of the Ministry and Ordinance No. 232
of the Ministry of Infrastructure and the regulations, orders and
instructions enacted or issued under the authority of such acts.
There exists no reason or cause that could justify the variation,
suspension, cancellation or termination of any such authorizations
or licenses held, controlled or used by the Company with respect to
the construction or operation of its businesses, which variation,
suspension, can-
-52-
cellation or termination could be reasonably expected to have a
Material Adverse Effect;
(14) the Operating Agreements between the Company and each of
the Licenseholders and the Agreements of Promise of Assignment and
Transfer of Permission between the Company and each of the
Licenseholders do not violate any provision of applicable law or
require the consent or approval of, or any filing with or
notification to, the Ministry or any other competent governmental
authority in the Federative Republic of Brazil, to be effective to
provide the benefits intended to be provided thereunder to the
Company and are legally valid and provide the Company with all
rights purported to be provided thereunder;
(15) no legal, regulatory or governmental proceedings are
pending to which the Company or any of the Licenseholders is a party
or to which the assets of the Company are subject which,
individually or in the aggregate, could reasonably be expected to
have or result in a Material Adverse Effect or which, individually
or in the aggregate, would have a material adverse effect on the
power or ability of the Company to perform its obligations under the
Operative Documents or to consummate the transactions contemplated
thereby or by the Offering Memorandum and, to the knowledge of such
counsel, no such material proceedings have been threatened against
the Company or any of the Licenseholders or with respect to any of
the assets or properties of the Company or any of the
Licenseholders;
(16) the Shareholder Commitments have been duly authorized,
executed and delivered by all requisite corporate or other action on
the part of the shareholders party thereto and the Company and
constitute the valid and binding obligation of each of them,
enforceable against them in accordance with their terms. In giving
such opinion, counsel may rely, to
-53-
the extent appropriate, on opinions of counsel to the shareholders;
(17) no holder of any securities of the Company is entitled to
(x) have such securities (other than the Notes, the Exchange Notes
and the Private Exchange Notes, if any) registered under any
registration statement contemplated by the Notes Registration Rights
Agreement or (y) have such securities (other than any Registrable
Securities (as defined in the Equity Registration Rights Agreement))
registered under any registration statement contemplated by the
Equity Registration Rights Agreement, except to the extent expressly
set forth in the Offering Memorandum;
(18) all descriptions in the Offering Memorandum of contracts
and other documents to which the Company is a party are accurate in
all material respects, including, but not limited to, the
Shareholders Agreement, the Operating Agreements, the Transfer
Agreements and the Technical Services Agreement (as each such term
is defined in the Offering Memorandum); to the knowledge of such
counsel, there are no material franchises, contracts, indentures,
mortgages, loan agreements, notes, agreements or other documents
that are not described in the Offering Memorandum;
(19) the statements in the Prospectus under the headings
"Enforceability of Civil Liabilities," "Risk Factors -- Factors
Relating to Brazil -- Controls and Restrictions on US Dollar
Remittances," " -- Factors Relating to Brazil -- Enforceability of
Judgments," "-- Risk Factors Relating to the Company and the
Offering --Regulation and Ownership of Licenses;" "Exchange Rate
Data" (last three paragraphs); "Business -- Government Regulation,"
"-- Legal Proceedings;" "Management -- Employment Agreements," "--
Shares of Common Stock Reserved for Management;" "Certain
Transactions;" "Principal Shareholders"; "Description of the Notes
-- Enforceability of Judg-
-54-
ments," and "-- Certain Bankruptcy Law Considerations" insofar as
such statements constitute a summary of Brazilian statutes, rules,
regulations or of legal matters, provide a fair summary of such
statutes, rules, regulations or legal matters and constitutes all of
the information with respect thereto required to be so disclosed
(upon consultation with United States counsel to the Issuers);
(20) the Company and its obligations under the Operative
Documents are subject to civil and commercial law and to suit in
Brazil and neither the Company nor any of its properties, assets or
revenues has any right of immunity under Brazilian law from any
legal action, suit or proceeding, from the giving of any relief in
any such legal action, suit or proceeding, from setoff or
counterclaim, from the jurisdiction of any Brazilian court, from
service of process, attachment upon or prior to judgment, or
attachment in aid of execution of judgment, or from execution of a
judgment, or other legal process or proceeding for the giving of any
relief or for the enforcement of a judgment, in any such court, with
respect to its obligations, liabilities or any other matter under or
arising out of or in connection with the Operative Documents, and,
to the extent that the Company or any of the Company's properties,
assets or revenues may have or may hereafter become entitled to any
such right of immunity in any such court in which proceedings may at
any time be commenced, the Company has waived or has agreed to waive
such right to the extent permitted by law and has consented to such
relief and enforcement as provided in Section 18 of the Purchase
Agreement and the like provision included in each of the other
Operative Documents;
(21) the Brazilian courts will recognize and give effect to
(a) the choice of the law of the State of New York ("New York law")
as the law governing the Indenture, the Notes, the Exchange Notes,
the Private
-55-
Exchange Notes, if any, this Agreement, the Escrow Agreement, the
Unit Agreement, the Company-LLC Subscription Agreement, the Equity
Registration Rights Agreement and the Notes Registration Rights
Agreement and (b) the appointment by the Company of CT Corporation
System, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as its agent to
receive service of process in the United States of America under the
Indenture, the Notes, the Exchange Notes, the Private Exchange
Notes, if any, this Agreement, the Escrow Agreement, the Unit
Agreement, the Company-LLC Subscription Agreement, the Equity
Registration Rights Agreement and the Notes Registration Rights
Agreement and to the provisions in the Indenture, the Notes, the
Exchange Notes, the Private Exchange Notes, if any, this Agreement,
the Escrow Agreement, the Unit Agreement, the Company-LLC
Subscription Agreement, the Equity Registration Rights Agreement and
the Notes Registration Rights Agreement whereby the Company submits
to the non-exclusive jurisdiction of any Federal or state court
located in the Borough of Manhattan in The City of New York (a "New
York Court"); and the Company has the power to submit and has taken
all necessary corporate action to submit to the non-exclusive
jurisdiction of a New York Court;
(22) the Brazilian courts will recognize a final and
conclusive judgment against the Company for a definite amount by a
New York Court in an action arising out of or in connection with any
of the Operative Documents without reconsideration of the merits
upon ratification of such judgment by the Brazilian Supreme Court;
and ratification of such a judgment will occur if such a judgment
(a) fulfills all formalities required for its enforceability under
the laws of the jurisdiction under which it was granted, (b) is
issued following personal service of process on the Company or on a
properly appointed agent for service of process, (c) is issued by a
competent court after proper service of process, (d) is not
-56-
subject to appeal, (e) is authenticated by a Brazilian consular
office in the country where the foreign judgment is issued and is
accompanied by a sworn translation into Portuguese and (f) is not
contrary to Brazilian law, national sovereignty or public policy or
"good morals" (as set forth in Brazilian law) and does not contain
any provision which is or would for any reason not be upheld by the
courts of Brazil;
(23) no provision of any of the Operative Documents is
contrary to Brazilian law, national sovereignty or public policy or
"good morals" (as set forth in Brazilian law) and none of the
Operative Documents contains any provision which is or would for any
reason not be upheld by the courts of Brazil;
(24) a holder of Notes, Exchange Notes or Private Exchange
Notes, the Trustee under the Indenture, the Escrow Agent under the
Escrow Agreement, the Unit Agent under the Unit Agreement, the
Initial Purchasers under the Purchase Agreement, the Notes
Registration Rights Agreement and the Equity Registration Rights
Agreement and Holding LLC under the Company-LLC Subscription
Agreement are each entitled to xxx as plaintiff in a Brazilian court
for the enforcement of their respective rights under such
instruments and agreements against the Company and such access to
Brazilian courts will not be subject to any conditions which are not
applicable to residents of Brazil or a company incorporated in
Brazil, other than the requirement to post a bond of guarantee with
respect to court costs and legal fees if any such party does not own
real property in Brazil;
(25) payments of interest, principal and premium in respect of
the Notes, Exchange Notes or Private Exchange Notes are not
currently subject under the laws of Brazil or any political
subdivision thereof to any withholding or similar charges or
deductions;
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(26) the statements in the Offering Memorandum under the
caption "Tax Considerations -- Brazil" completely and accurately
summarize the material Brazilian tax consequences of, and the
Brazilian Federal Reserve Department practice relating to,
acquiring, owning and disposing of any of the Notes, the Exchange
Notes, the Private Exchange Notes, the Holding Shares or the Common
Stock;
(27) none of (a) the Operative Documents, (b) the issuance,
sale and delivery of the Securities to the Initial Purchasers upon
payment therefor as contemplated in this Agreement, (c) the issuance
of the Exchange Notes and any Private Exchange Notes, (d) the
issuance of the Common Stock to the LLC pursuant to the Company-LLC
Subscription Agreement or (e) the distribution of the Common Stock
of the Company to holders of the Holding Shares upon a Liquidation
Event (as defined in the LLC Agreement), in each case as
contemplated in this Agreement, the Notes Registration Rights
Agreement, the Equity Registration Rights Agreement and the LLC
Agreement, are subject to any registration tax, stamp duty or
similar tax, duty, impost or levy imposed by the Federative Republic
of Brazil or any political subdivision thereof;
In addition such counsel shall state that such counsel has
participated in conferences with representatives of the Initial
Purchasers, officers and other representatives of the Issuers,
representatives of the independent certified accountants of the Issuers
and United States counsel to the Issuers, at which conferences the
contents of the Offering Memorandum and related matters were discussed,
and although such counsel has not verified and does not pass upon or
assume any responsibility for the accuracy, completeness or fairness of
the statements contained in the Offering Memorandum (except and only to
the extent set forth in subsections (7), (19) and (26) above), on the
basis of the foregoing (relying as to materiality
-58-
to the extent such counsel deems appropriate upon opinions of officers and
other representatives of the Issuers), no facts have come to the attention
of such counsel which lead such counsel to believe that the Offering
Memorandum at the date thereof or as of the Closing Time, contained or
contains an untrue statement of a material fact or omitted or omits to
state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading; (it
being understood that such counsel has not been requested to and does not
make any comment with respect to (i) the financial statements, and the
notes thereto and related schedules, (ii) other financial or statistical
data found in or derivable from the financial, accounting or internal
records of the Issuers and (iii) any forward-looking or projected
financial or statistical data relating to the Issuers, in each case,
included in the Offering Memorandum).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of the Federal laws of the United States or the
laws of the State of New York, upon the opinion of Xxxxxxx Xxxx &
Xxxxxxxxx, United States counsel to the Issuers (which opinion shall be
addressed to the Initial Purchasers and shall be dated and furnished to
the Initial Purchasers at the Closing Time and shall be satisfactory in
form and substance to counsel for the Initial Purchasers) and (B) as to
matters of fact (but not as to legal conclusions), to the extent they deem
proper, on certificates of responsible officers of the Issuers and public
officials. Such opinion shall not state that it is to be governed or
qualified by, or that it is otherwise subject to, any treatise, written
policy or other document relating to legal opinions, including, without
limitation, the Legal Opinion Accord of the ABA Section of Business Law
(1991).
References to the Offering Memorandum in this subsection (b) include
any supplement thereto prior to the Closing Time.
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(c) At the Closing Time, the Initial Purchasers shall have received
the opinion of Morris, Nichols, Asht & Xxxxxxx, special Delaware counsel
to the LLC, dated as of the Closing Time, in form and substance
satisfactory to the Initial Purchasers and counsel for the Initial
Purchasers to the effect
(1) The LLC is duly organized and validly existing as a
limited liability company in good standing under the laws of the
State of Delaware. The LLC has the requisite limited liability
company power and authority to (x) enter into and perform its
obligations under the Purchase Agreement, the Unit Agreement, the
Company-LLC Subscription Agreement and the Equity Registration
Rights Agreement and to issue and deliver the Holding Shares
pursuant to the Purchase Agreement and (y) own its properties and
conduct its business as described in the Offering Memorandum.
(2) All necessary action on the part of the members of the LLC
has been taken to form the LLC under Delaware law and to provide for
its governance as set forth in the LLC Agreement and the LLC
Agreement is valid and in full force and effect in the form attached
to the Purchase Agreement as Exhibit D.
(3) As of the Closing Time, there are 814,955 Class A Holding
Shares and 125,000 Class B Holding Shares authorized, issued and
outstanding, all of which have been duly authorized, validly issued
and are fully paid and non-assessable. No personal liability
attaches to the holders of the Class A Shares or the Class B Shares
by virtue of their ownership thereof. The Class A Shares and the
Class B Shares have not been issued in violation of any preemptive
or similar right arising under the LLC Agreement or Delaware law.
The Holding Shares have the designations, powers, preferences,
rights, qualification, limitations and restrictions set forth in the
LLC Agreement.
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(4) The Holding Shares to be purchased by the Initial
Purchasers from the LLC have been duly authorized for issuance and
sale to the Initial Purchasers pursuant to the Purchase Agreement,
and when issued and delivered by the LLC pursuant to the Purchase
Agreement, will be validly issued, fully paid and non-assessable and
no holder of the Holding Shares is or will be subject to personal
liability by reason of being such a Holder.
(5) All action on the part of LLC and its members necessary
for the authorization, execution, delivery and performance of the
Purchase Agreement, the Unit Agreement, the Company-LLC Subscription
Agreement and the Equity Registration Rights Agreement and each of
such agreements has been executed and delivered and is a valid and
legally binding obligation of the LLC (assuming due authorization,
execution and delivery by each of the other parties thereto).
(6) The statements in the Offering Memorandum under the
heading "Description of the Class B Holding Shares," insofar as such
statements purport to summarize certain provisions of the Class B
Holding Shares, the Class A Holding Shares and the LLC Agreement,
provide a fair summary of such provisions of such instruments and
agreement.
(7) All consents, approvals, orders or authorizations of, or
registrations or qualifications, designations, declarations or
filings with any authority in the State of Delaware on the part of
the LLC or its members required in connection with the consummation
of the transactions contemplated by the Operative Documents have
been made or obtained by the LLC or its members and are in full
force and effect.
(8) Under Delaware law as currently in effect, holders of
Holding Shares are not and will not be required to pay any tax,
levy, impost or fee to, or register or file any document with, any
governmental
-61-
or administrative body in the State of Delaware, with respect to
their ownership of member interests in the LLC.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of the Federal laws of the United States or the
laws of the State of New York, upon the opinion of Xxxxxxx Xxxx &
Xxxxxxxxx, United States counsel to the Issuers, and as to matters
involving the application of the laws of the Federative Republic of
Brazil, upon the opinion of Xavier, Bernardes, Braganca, Brazilian counsel
to the Issuers (which opinions shall be addressed to the Initial
Purchasers and shall be dated and furnished to the Initial Purchasers at
the Closing Time and shall be satisfactory in form and substance to
counsel for the Initial Purchasers) and (B) as to matters of fact (but not
as to legal conclusions), to the extent they deem proper, on certificates
of responsible officers of the Issuers and public officials. Such opinion
shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document
relating to legal opinions, including, without limitation, the Legal
Opinion Accord of the ABA Section of Business Law (1991).
References to the Offering Memorandum in this subsection (c) include
any supplement thereto prior to the Closing Time.
(d) The Initial Purchasers shall have received the favorable
opinion, dated as of the Closing Time, of Xxxxxx Xxxxxx & Xxxxxxx, counsel
for the Initial Purchasers, with respect to certain matters set forth in
subsection (a) of this Section 7.
In rendering such opinions, such counsel (A) need not express any
opinion with regard to the application of laws of any jurisdiction other
than the Federal laws of the United States and the laws of the State of
New York and (B) may rely, as to matters of fact, to the extent they deem
proper on representations or certificates of respon-
-62-
sible officers of the Issuers and certificates of public officials.
In giving its opinion required by this subsection (d) of this
Section 7, such counsel shall additionally state that such counsel has
participated in conferences with officers and other representatives of the
Issuers, representatives of the independent accountants for the Issuers,
United States and Brazilian counsel to the Issuers, representatives of the
Initial Purchasers and Brazilian counsel to the Initial Purchasers at
which conferences the contents of the Offering Memorandum and related
matters were discussed, and although such counsel has not verified and
does not pass upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Offering Memorandum, on the basis of the foregoing (relying as to
materiality to the extent such counsel deems appropriate upon opinions of
officers and other representatives of the Issuers), no facts have come to
the attention of such counsel which lead such counsel to believe that the
Offering Memorandum, at the date thereof or as of the Closing Time,
contained or contains an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading (it
being understood that such counsel has not been requested to and does not
make any comment with respect to (i) the financial statements, and the
notes thereto and related schedules, (ii) other financial or statistical
data found in or derivable from the financial, accounting or internal
records of the Issuers and (iii) any forward-looking or projected
financial or statistical data relating to the Issuers, in each case,
included in the Offering Memorandum).
(e) The Initial Purchasers shall have received the favorable
opinion, dated as of the Closing Time, of Xxxxxxxx Xxxx --Advogados,
counsel for the Initial Purchasers, with respect to each of the matters
set forth in subsection (b) of this Section 7.
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In rendering such opinions, such counsel (A) need not express any
opinion with regard to the application of laws of any jurisdiction other
than the laws of the Federative Republic of Brazil and of the political
subdivisions thereof and (B) may rely, as to matters of fact, to the
extent they deem proper on representations or certificates of responsible
officers of the Issuers and certificates of public officials.
In giving its opinion required by this subsection (e) of this
Section 7, such counsel shall additionally state that such counsel has
participated in conferences with officers and other representatives of the
Issuers, representatives of the independent accountants for the Issuers,
United States and Brazilian counsel to the Issuers, representatives of the
Initial Purchasers and United States counsel to the Initial Purchasers at
which conferences the contents of the Offering Memorandum and related
matters were discussed, and although such counsel has not verified and
does not pass upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Offering Memorandum (except and only to the extent set forth in clause
(7), (19), and (26) of subsection (b) of this Section 7), on the basis of
the foregoing (relying as to materiality to a large extent upon the
representations and opinions of officers and other representatives of the
Issuers), no facts have come to the attention of such counsel which lead
such counsel to believe that the Offering Memorandum, at the date thereof,
contained an untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading (it being
understood that such counsel has not been requested to and does not make
any comment with respect to (i) the financial statements, and the notes
thereto and related schedules, (ii) other financial or statistical data
found in or derivable from the financial, accounting or internal records
of the Issuers and (iii) any forward-looking or projected
-64-
financial or statistical data relating to the Issuers, in each case,
included in the Offering Memorandum).
(f) The following conditions contained in clauses (i) and (ii) of
this subsection (f) shall have been satisfied at and as of the Closing
Time and (x) the Company shall have furnished to the Initial Purchasers a
certificate, signed by the President and the principal financial or
accounting officer of the Company and (y) the LLC shall have furnished to
the Initial Purchasers a certificate, signed by two Members of the
Management Committee (at least one of whom shall also be a Manager of the
LLC); each such certificate shall be dated as of the Closing Time and
shall be to the effect that the signers of such certificate have examined
the Offering Memorandum, any amendment or supplement to the Offering
Memorandum, and this Agreement and that:
(i) the representations and warranties of the Issuers in this
Agreement are true and correct in all material respects on and as of
the Closing Time with the same effect as if made at the Closing Time
and the Issuers have complied with all the agreements and satisfied
all the conditions under this Agreement on their part to be
performed or satisfied at or prior to the Closing Time; and
(ii) since the date of the most recent financial statements
included in the Offering Memorandum (exclusive of any amendment or
supplement thereto), there has been no Material Adverse Change,
whether or not arising in the ordinary course of business. As used
in this subparagraph, the term "Offering Memorandum" means the
Offering Memorandum in the form first used to confirm sales of the
Securities.
(g) At the time that this Agreement is signed and at the Closing
Time, Ernst & Young Auditores Independentes S.C. shall have furnished to
the Initial Purchasers a letter or letters, dated respectively as of the
date of this Agreement and as of the Closing Time, in form and sub-
-65-
stance satisfactory to the Initial Purchasers, confirming that they are
independent certified public accountants within the meaning of the Act and
the applicable published rules and regulations thereunder and containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to initial purchasers and underwriters with respect to
financial statements and certain financial information contained in the
Offering Memorandum.
(h) Subsequent to the date hereof or, if earlier, the dates as of
which information is given in the Offering Memorandum (exclusive of any
amendment or supplement thereto), there shall not have been any change, or
any development involving a prospective change, in or affecting the
business or properties of the Issuers the effect of which is, in the
reasonable judgment of Xxxxxxx Xxxxx, so material and adverse as to make
it impractical or inadvisable to proceed with the purchase and the
delivery of the Securities as contemplated by the Offering Memorandum
(exclusive of any amendment or supplement thereto).
(i) All government authorizations required in connection with the
issue and sale of the Securities as contemplated under this Agreement and
the performance of the Issuers' respective obligations hereunder and under
Indenture, the Agency Agreement, the Company-LLC Subscription Agreement,
the Units, the Notes, the Exchange Notes, the Private Exchange Notes, the
Holding Shares and the Common Stock delivered to the LLC pursuant to the
Subscription Agreement shall be in full force and effect and the Issuers
shall deliver copies of such authorizations (including but not limited to
the Prior Authorization of the Brazilian Central Bank) to the Initial
Purchasers and there shall have been no indication from the Brazilian
Central Bank that the Registration Certificate will not be forthcoming.
(j) At the Closing Time, counsel for the Initial Purchasers shall
have been furnished with such information, certificates and documents
(including an executed
-66-
copy of the Prior Authorization of the Brazilian Central Bank) as they may
reasonably require for the purpose of enabling them to pass upon the
issuance and sale of the Securities as contemplated herein and related
proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all opinions and certificates mentioned
above or elsewhere in this Agreement shall be reasonably satisfactory in
form and substance to the Initial Purchasers and counsel for the Initial
Purchasers.
(k) The Issuers and the Trustee shall have entered into the
Indenture.
(l) The Company shall have taken any and all actions reasonably
required to establish the Escrow Account with the Escrow Agent and to
prepare to file appropriate financing statements in each of the offices
where such filing is necessary or, in the opinion of the Initial
Purchasers, desirable to perfect the lien in favor of the Trustee created
by the Escrow Agreement.
(m) The Issuers and the Initial Purchasers shall have entered into
the Notes Registration Rights Agreement.
(n) The Issuers, the Shareholders, the Holding Share Transfer Agent
and the Initial Purchasers shall have executed the Equity Registration
Rights Agreement.
(o) The Common Stock to be delivered to the LLC by the Company
pursuant to the Company-LLC Subscription Agreement shall have been
delivered to the LLC and all other obligations required to be performed
pursuant to such agreement shall have been fully performed.
(p) The Issuers, the Unit Agent and the Initial Purchasers shall
have entered into the Unit Agreement.
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(q) The Issuers shall have executed the Agency Agreement and CT
Corporation System shall have accepted its appointment thereunder.
(r) The Shareholder Commitments shall have been executed and
delivered and shall be in full force and effect.
If any condition specified in this Section 7 shall not have been
fulfilled in all material respects when and as required to be fulfilled, this
Agreement may be terminated by the Initial Purchasers by notice to the Issuers,
and such termination shall be without liability of any party to any other party
except as provided in Section 6. Notwithstanding any such termination, the
provisions of Sections 1, 8, 18 and 19 shall remain in effect. Notice of such
cancellation shall be given to the Issuers in writing or by telephone, facsimile
transmission or telegraph confirmed in writing. The Issuers shall furnish to the
Initial Purchasers such conformed copies of such opinions, certificates, letters
and documents in such quantities as the Initial Purchasers and counsel for the
Initial Purchasers shall reasonably request.
SECTION 8. Indemnification.
(a) Indemnification of Initial Purchasers. Each of the Issuers
agrees, jointly and severally, to indemnify and hold harmless each Initial
Purchaser and each person, if any, who controls any Initial Purchaser within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Preliminary Offering
Memorandum or the Final Offering Memorandum (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
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(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
8(d) below) any such settlement is effected with the written consent of
the Company; and
(iii) against any and all expense whatsoever, as incurred (including
the reasonable fees and disbursements of counsel chosen by Xxxxxxx Xxxxx),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or
(ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Initial Purchaser through Xxxxxxx Xxxxx expressly for use in the Offering
Memorandum (or any amendment thereto).
(b) Indemnification of Issuers, Directors and Officers. Each Initial
Purchaser severally agrees to indemnify and hold harmless the Issuers, its
directors and each person, if
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any, who controls any of the Issuers within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act against any and all loss, liability, claim,
damage and expense described in the indemnity contained in subsection (a) of
this Section 8, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions made in the Offering
Memorandum in reliance upon and in conformity with written information furnished
to the Issuers by such Initial Purchaser through Xxxxxxx Xxxxx expressly for use
in the Offering Memorandum.
(c) Actions against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement. In the case of parties indemnified pursuant to Section 8(a)
above, counsel to the indemnified parties shall be selected by Xxxxxxx Xxxxx,
and, in the case of parties indemnified pursuant to Section 8(b) above, counsel
to the indemnified parties shall be selected by the Issuers. Notwithstanding the
foregoing sentence, in case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent it
may wish, jointly with any other indemnifying party similarly notified, unless
such indemnified party shall have one or more legal defenses available to it
which are not available to the indemnifying party, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party. After
notice from the indemnifying party to such indemnified party of its election as
aforesaid to assume the defense thereof and approval by such indemnified party
of counsel appointed to defend such action, the indemnifying party will not be
liable to such indemnified party under this Section 8 for any legal or other
expenses other than reasonable costs of investigation, subsequently incurred by
such indemnified party in connection with the defense thereof. An indemnifying
party may participate at its own expense in the
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defense of any such action; provided, however, that counsel to the indemnifying
party shall not (except with the consent of the indemnified party) also be
counsel to the indemnified party. In no event shall the indemnifying parties be
liable for fees and expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising
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out of the same general allegations or circumstances. No indemnifying party
shall, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 8 or Section
9 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) Settlement Without Consent if Failure To Reimburse. If at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 8(a)(ii) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
SECTION 9. Contribution. If the indemnification provided for in
Section 8 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Issuers on the
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one hand and the Initial Purchasers on the other hand from the offering of the
Securities pursuant to this Agreement or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Issuers on the one hand and of the
Initial Purchasers on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Issuers on the one hand and
the Initial Purchasers on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total underwriting discount received by the Initial
Purchasers, bear to the aggregate initial offering price of the Securities.
The relative fault of the Issuers on the one hand and the Initial
Purchasers on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Issuers or by the Initial Purchasers and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Issuers and the Initial Purchasers agree that it would not be
just and equitable if contribution pursuant to this Section 9 were determined by
pro rata allocation (even if the Initial Purchasers were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section 9. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 9 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending
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against any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based upon any
such untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 9, no Initial
Purchaser shall be required to contribute any amount in excess of the amount by
which the total price at which the Securities underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages which
such Initial Purchaser has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 9, each person, if any, who controls an
Initial Purchaser within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act shall have the same rights to contribution as such Initial
Purchaser, and each director of any of the Issuers, each officer, director or
member of any of the Issuers and each person, if any, who controls any of the
Issuers within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act shall have the same rights to contribution as the Company. The
Initial Purchasers' respective obligations to contribute pursuant to this
Section 9 are several in proportion to the number of Securities set forth
opposite their respective names in Schedule A hereto and not joint.
SECTION 10. Representations, Warranties and Agreements To Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Issuers submitted pursuant
hereto, shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any Initial Purchaser or controlling
person, or by or on behalf of the Issuers, and
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shall survive delivery of the Securities to the Initial Purchasers.
SECTION 11. Termination of Agreement.
(a) Termination: General. The Initial Purchasers may terminate this
Agreement, by notice to any of the Issuers, at any time at or prior to the
Closing Time (i) if there has been, since the time of execution of this
Agreement or since the respective dates as of which information is given in the
Offering Memorandum, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Issuers considered as one enterprise, whether or not arising in the ordinary
course of business, or (ii) if there has occurred any material adverse change in
the financial markets in the United States, Brazil, Latin America generally or
in the international financial markets, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or development
involving a prospective change in national or international political, financial
or economic conditions, in each case the effect of which is such as to make it,
in the reasonable judgment of the Initial Purchasers, impracticable to market
the Securities or to enforce contracts for the sale of the Securities, or (iii)
if trading generally on the American Stock Exchange, the New York Stock
Exchange, the Sao Paulo Stock Exchange or the Rio de Janeiro Stock Exchange, in
the NASDAQ National Market System or in the PORTAL market has been suspended or
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by such system
or by order of the Comissao de Valores Mobiliarios, the Commission, the National
Association of Securities Dealers, Inc. or any governmental authority, or (iv)
if a banking moratorium has been declared by either United States Federal or New
York authorities or by the Brazilian Central Bank or any other competent
governmental authority in the Federative Republic of Brazil or any political
subdivision thereof.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without li-
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ability of any party to any other party except as provided in Section 6 hereof,
and provided further that Sections 1, 8, 9, 18 and 19 shall survive such
termination and remain in full force and effect.
SECTION 12. Default By One of the Initial Purchasers. If one or more
of the Initial Purchasers shall fail at the Closing Time to purchase the
Securities which it or they are obligated to purchase under this Agreement (the
"Defaulted Securities"), Xxxxxxx Xxxxx shall have the right, but not the
obligation, within 24 hours thereafter, to make arrangements for one or more of
the nondefaulting Initial Purchasers, or any other Initial Purchasers, to
purchase all, but not less than all, of the Defaulted Securities in such amounts
as may be agreed upon and upon the terms herein set forth; if, however, Xxxxxxx
Xxxxx shall not have completed such arrangements within such 24-hour period,
then this Agreement shall terminate without liability on the part of any
nondefaulting Initial Purchaser.
No action pursuant to this Section shall relieve any defaulting
Initial Purchaser from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either the non-defaulting Initial Purchaser or
the Issuers shall have the right to postpone the Closing Time for a period not
exceeding seven days in order to effect any required changes in the Offering
Memorandum or in any other documents or arrangement.
SECTION 13. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed (and
in the case of Section 18, certified, return receipt requested) or (other than
in the case of Section 18) transmitted by any standard form of
telecommunication. Notices to the Initial Purchasers shall be directed to the
Initial Purchasers c/o Merrill Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated, Xxxxxxx Xxxxx World Headquarters, North Tower, World
Financial Center, New York, New York 10281-1305, attention of Xxxxxxxxxxx X.
Xxxxxxx, Managing
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Director; and notices to the Company shall be directed to the Company's offices
at Rua Xxxxxxxxx Xxxxx, 1.711-1 andar, 04717-910-Birmann 00-Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxxx, Xxxxxxxxx: Xxxxxx X. Xxxxxx, President; and notices to the
LLC shall be directed to the LLC's offices c/o Warburg, Xxxxxx Ventures L.P.,
000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X. Xxxx.
SECTION 14. Information Supplied by the Initial Purchasers. The
statement set forth in the last paragraph on the inside front cover page in the
Offering Memorandum (to the extent such statement relates to the Initial
Purchasers) and the information specifically relating to the Initial Purchasers
under the caption "Plan of Distribution" in the Offering Memorandum constitute
the only information furnished by the Initial Purchasers to the Company for the
purposes of Sections 1, 8 and 9 hereof.
SECTION 15. Parties. This Agreement shall inure to the benefit of
and be binding upon the Initial Purchasers and the Issuers and their respective
successors and legal representatives. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person, firm or
corporation, other than the Initial Purchasers and the Issuers and their
respective successors and legal representatives and the controlling persons and
officers, directors, employees and agents referred to in Sections 8, 9 and 19
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under, by virtue of or in respect of this Agreement or any provision
herein contained. This Agreement and all conditions and provisions hereof are
intended to be for the sole and exclusive benefit of the Initial Purchasers and
the Issuers and their respective successors and legal representatives, and said
controlling persons and officers, directors, employees and agents and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any Initial Purchaser shall be
deemed to be a successor by reason merely of such purchase.
SECTION 16. Governing Law and Time. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
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OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY PROVISIONS RELATING TO
CONFLICTS OF LAWS. Specified times of day refer to New York City time.
SECTION 17. Counterparts. This Agreement may be executed by manual
or facsimile signature in one or more counterparts and, when each party has
executed a counterpart, all such counterparts taken together shall constitute
one and the same agreement.
SECTION 18. Agent for Service; Submission to Jurisdiction; Waiver of
Immunities. By the execution and delivery of this Agreement, the Company (i)
acknowledges that it has, by separate written instrument, designated and
appointed CT Corporation System, 0000 Xxxxxxxx, Xxx Xxxx, XX 00000 ("CT
Corporation System") (and any successor entity), as its authorized agent upon
which process may be served in any suit or proceeding arising out of or relating
to this Agreement that may be instituted in any federal or state court in The
City of New York, Borough of Manhattan, State of New York or brought under
federal or state securities laws, and acknowledge that CT Corporation System has
accepted such designation, (ii) submits to the jurisdiction of any such court in
any such suit or proceeding and (iii) agrees that service of process upon CT
Corporation System and written notice of said service to the Company in
accordance with Section 13 shall be deemed in every respect effective service of
process upon the Company, in any such suit or proceeding. The Company further
agrees to take any and all action, including the execution and filing of any and
all such documents and instruments, as may be necessary to continue such
designation and appointment of CT Corporation System in full force and effect so
long as any of the Units, the Notes, the Exchange Notes or the Private Exchange
Notes shall be outstanding; provided that the Company may and to the extent CT
Corporation System ceases to be able to be served on the basis contemplated
herein shall, by written notice to the Initial Purchasers, designate such
additional or alternative agent for service of process under this Section 18
that (i) maintains an office located in the Borough of Manhattan, City of New
York, State of New York and (ii) is either (x) counsel for the Com-
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pany or (y) a corporate service company which acts as agent for service of
process for other persons in the ordinary course of its business. Such written
notice shall identify the name of such agent for service of process and the
address of the office of such agent for service of process in the Borough of
Manhattan, City of New York, State of New York.
To the extent that the Company has or hereafter may acquire any
immunity from jurisdiction of any court of (i) any jurisdiction in which the
Company owns or leases property or assets, (ii) the United States or the State
of New York or (iii) the Federative Republic of Brazil or any political
subdivision thereof or from any legal process (whether through service of
notice, attachment prior to judgment, attachment in aid of execution, execution
or otherwise) with respect to itself or its property and assets or this
Agreement or any of the Units, the Notes, Exchange Notes or Private Exchange
Notes or actions to enforce judgments in respect of any thereof, the Company
hereby irrevocably waives such immunity in respect of its obligations under the
above-referenced documents, to the extent permitted by law.
SECTION 19. Judgment Currency. Each of the Issuers hereby jointly
and severally agrees to indemnify each Purchaser and each Person, if any, who
controls any Initial Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act and each of their respective officers, directors,
employees and agents against any loss incurred by such party as a result of any
judgment or order being given or made for any U.S. dollar amount due under this
Agreement and such judgment or order being expressed and paid in a currency (the
"Judgment Currency") other than United States dollars and as a result of any
variation as between (i) the rate of exchange at which the United States dollar
amount is converted into the Judgment Currency for the purpose of such judgment
or order and (ii) the spot rate of exchange in The City of New York at which
such party on the date of payment of such judgment or order is able to purchase
United States dollars with the amount of the Judgment Currency actually received
by such party. The foregoing indemnity shall continue in full force and effect
notwith-
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standing any such judgment or order as aforesaid. The term "spot rate of
exchange" shall include any premiums and costs of exchange payable in connection
with the purchase of, or conversion into, United States dollars.
SECTION 20. Prior Agreements Superseded. This Agreement supersedes
all prior agreements, undertakings and arrangements, oral or written, among the
parties hereto with respect to the subject matter hereof.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to each of the Issuers a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Initial Purchasers and the Issuers in accordance with its
terms.
Very truly yours,
PAGING NETWORK DO BRASIL S.A.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
PAGING BRAZIL HOLDING CO., LLC
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Manager
Confirmed and accepted as of
the date first above
written:
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
BEAR, XXXXXXX & CO. INC.
XXXXXXX, XXXXX & CO.
By: Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
By: /s/ Xxxxxxx X. Xxxxx
---------------------------
Name: Xxxxxxx X. Xxxxx
Title: Authorized Signatory
SCHEDULE A
Number of
Units
---------
Name of Initial Purchaser
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated........................................ 75,000
Xxxxxxx, Sachs & Co............................................. 25,000
Bear, Xxxxxxx & Co. Inc......................................... 25,000
Total ........................................... 125,000
-------
SCHEDULE B
Equity Capitalization of Paging Brazil Holding Co., LLC
Number Outstanding
Prior to After
Offering Offering(1)
-------- --------
Class A Member Interests None 814,955
Class B Member Interests None 125,000
----------
1 Immediately following the Offering, all of the outstanding Class A Member
Interests are held beneficially and of record by Warburg, Xxxxxx Ventures,
L.P. and all of the Class B Member Interests are held beneficially and of
record by the holders of Units issued and delivered pursuant to this
Agreement.
EXHIBIT A
[Notes Registration Rights Agreement]
EXHIBIT B
[Equity Registration Rights Agreement]
EXHIBIT C
[LLC Agreement]
