EXHIBIT 4.16
EXCHANGE AGREEMENT
dated as of December ___, 2004
among
NET SUL COMUNICACOES LTDA.,
NET SERVICOS DE COMUNICACAO, S.A.
and
THE CONSENTING NOTEHOLDERS NAMED HEREIN
TABLE OF CONTENTS
Article I DEFINITIONS.................................................. 1
SECTION 1.01. Definitions.................................................. 1
Article II EXCHANGE OF THE EXISTING NOTES............................... 3
SECTION 2.01. Elections.................................................... 3
SECTION 2.02. Exchange Date and Instrumento de Confissao de Divida......... 4
SECTION 2.03. Exchange Option.............................................. 4
SECTION 2.04. Real Conversion Option....................................... 4
Article III CONSENT TO AMENDMENT OF THE EXISTING INDENTURE............... 5
SECTION 3.01. Exit Consent................................................. 5
SECTION 3.02. Amendment and Restatement of Existing Indenture.............. 5
Article IV CONDITIONS TO CLOSING........................................ 5
SECTION 4.01. Conditions to Effectiveness.................................. 5
Article V COVENANTS.................................................... 7
SECTION 5.01. Covenants of the Consenting Noteholders...................... 7
Article VI REPRESENTATIONS AND WARRANTIES............................... 8
SECTION 6.01. Representations and Warranties............................... 8
Article VII MISCELLANEOUS................................................ 10
SECTION 7.01. Amendments, etc.............................................. 10
SECTION 7.02. Notices, etc................................................. 10
SECTION 7.03. No Waiver; Remedies.......................................... 11
SECTION 7.04. Binding Effect; Assignments.................................. 11
SECTION 7.05. Termination.................................................. 11
SECTION 7.06. Severability................................................. 11
SECTION 7.07. Execution in Counterparts.................................... 11
SECTION 7.08. Jurisdiction, etc............................................ 11
SECTION 7.09. Governing Law................................................ 12
SECTION 7.10. Waiver of Jury Trial......................................... 12
EXHIBITS
Exhibit A - Form of Instrumento de Confissao de Divida
Exhibit B - Form of Indenture
Exhibit C - Form of Contrato de Emprestimo
i
Exhibit D - Form of Fifth Supplemental Indenture
Exhibit E - Forms of Security Documents
Exhibit F - Financial Indebtedness
ii
EXCHANGE AGREEMENT
EXCHANGE AGREEMENT (this "Agreement"), dated as of December ___, 2004,
among NET SUL COMUNICACOES LTDA., a sociedade limitada organized under the laws
of Brazil (the "Company"), NET SERVICOS DE COMUNICACAO, S.A., a sociedade
anonima organized under the laws of Brazil ("Net Servicos"), and each of the
holders of the Company's Floating Rate Notes due 2005 listed on Schedule I
hereto (the "Consenting Noteholders").
RECITALS
WHEREAS, pursuant to that certain Indenture, dated as of October 31,
1997 (as amended, modified or supplemented from time to time, the "Existing
Indenture"), among the Company, Net Servicos and the other guarantors named
therein, XXXXX FARGO BANK, NATIONAL ASSOCIATION, a national banking association
organized under the laws of the United States, as successor by merger to Xxxxx
Fargo Bank, Minnesota, National Association (in such capacity, the "Trustee"),
JPMORGAN CHASE BANK as Registrar and Paying Agent, JPMORGAN CHASE BANK, LONDON
BRANCH (successor to Chase Manhattan Bank, London Branch), as Transfer Agent,
Calculation Agent and Paying Agent, X.X. XXXXXX BANK LUXEMBOURG S.A. (successor
to Chase Manhattan Bank Luxembourg S.A.), as Paying Agent, and X.X. XXXXXX
TRUST BANK (successor to CHASE TRUST BANK), as Principal Paying Agent, the
Company issued $80 million aggregate principal amount of Floating Rate Notes
due 2005 (the "Existing Notes," and the holders of the Existing Notes, the
"Noteholders");
WHEREAS, the Company has proposed that the Noteholders agree to
surrender their Existing Notes in exchange for the consideration specified
herein on the terms set forth herein; and
WHEREAS, the Consenting Noteholders have agreed to (i) surrender their
Existing Notes on the terms set forth herein and (ii) consent to the amendment
of certain terms of the Existing Indenture;
NOW, THEREFORE, in consideration of the promises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. (a) As used in this Agreement, the following
terms shall have the following meanings:
"Accrued Cash Interest" means an amount of cash equal to simple
interest, calculated at a rate of LIBOR plus 3.0% per annum, accruing on 100% of
the Accrued Obligations from July 1, 2004 through the Exchange Date.
"Accrued Obligations" means, with respect to the Existing Notes held by
any Noteholder, an amount in U.S. dollars equal to (i) the principal amount
outstanding on such Existing Notes as
of the Exchange Date, plus (ii) accrued interest on such Existing Notes though
and including June 30, 2004 (excluding any default or penalty interest and any
premium).
"Agreement" has the meaning assigned in the introductory paragraph of
this Agreement.
"Brazil" means the Federative Republic of Brazil.
"Company" has the meaning assigned in the introductory paragraph of
this Agreement.
"Consenting Noteholders" has the meaning assigned in the introductory
paragraph of this Agreement.
"Exchange Date" has the meaning assigned in Section 2.02 hereof.
"Exchange Rate" means, for any day, the exchange rate publicly
announced by the Central Bank of Brazil as the exchange rate for of the U.S.
Dollar under PTAX 800, Option 5 (selling rate), currency 220 on the SISBACEN
Data System (or its successor) on the most recent preceding business day in
Brazil.
"Exchange Option" has the meaning assigned in Section 2.03 hereof.
"Existing Indenture" has the meaning assigned in the Recitals to this
Agreement.
"Existing Notes" has the meaning assigned in the Recitals to this
Agreement.
"Fifth Supplemental Indenture" has the meaning assigned in Section 3.01
hereof.
"Indenture" has the meaning assigned in Section 2.03(ii) hereof.
"LIBOR" means the rate equal to the British Bankers' Association's
LIBOR rate for deposits in U.S. dollars for a period of three months as reported
by REUTERS (screen page 3750) or, if not available, any other generally
recognized financial information service as of 11:00 a.m. (London time) two
Business Days immediately prior to the Exchange Date; provided, however, that,
if no British Bankers' Association LIBOR rate is available, LIBOR shall instead
be at the rate at which X.X. Xxxxxx Securities Ltd. or one of its affiliate
banks offers to place deposits in U.S. dollars with first-class banks in the
London interbank market for a period of three months at approximately 11:00 a.m.
(London time) two Business Days immediately prior to the Exchange Date, in an
amount comparable to the outstanding principal amount of the Accrued
Obligations.
"Material Adverse Event" means (i) any change, event, development or
condition that could reasonably be expected to result, individually or in the
aggregate, in a material adverse effect on the assets, properties, business,
results of operations, condition (financial or other) or prospects of Net
Servicos and its subsidiaries, taken as a whole or (ii) a disruption or change
in Brazilian financial, political or economic conditions, in the currency
exchange controls applicable to the U.S. dollar or the Brazilian real, or in the
loan syndication, banking and/or capital markets of the United States or Brazil,
in each case since the date of this Agreement, that
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could reasonably be expected to materially impair the benefits to be derived by
the creditors participating in the Restructuring.
"Net Servicos" has the meaning assigned in the introductory paragraph
of this Agreement.
"New Fixed Rate Notes" means the 7.0% senior secured notes of the
Company due December 31, 2009 issued pursuant to the Indenture.
"New Floating Rate Notes" means the floating rate senior secured notes
of the Company due December 31, 2009 issued pursuant to the Indenture.
"New Notes" means the New Fixed Rate Notes and the New Floating Rate
Notes.
"Noteholders" has the meaning assigned in the Recitals to this
Agreement.
"Proceedings" has the meaning assigned in Section 5.01(b) hereof.
"Real Conversion Option" has the meaning assigned in Section 2.01
hereof.
"Real Denominated Loan" has the meaning assigned in Section 2.04
hereof.
"Real Lender" means each Person that agrees to extend a Real
Denominated Loan to the Company, in accordance with Section 2.04(a) of this
Agreement.
"Securities Act" has the meaning assigned in Section 6.01(d) hereof.
"Signature Page" has the meaning assigned in Section 2.01 hereof.
"Termination Date" has the meaning assigned in Section 7.05 hereof.
"Trustee" has the meaning assigned in the Recitals to this Agreement.
(b) Capitalized terms used herein without definition have the
meanings set forth in the Indenture.
ARTICLE II
EXCHANGE OF THE EXISTING NOTES
SECTION 2.01. Elections. Each Consenting Noteholder has elected, by so
indicating on the signature page of this Agreement (such Noteholder's "Signature
Page"), to receive either (a) a combination of cash and a participation in New
Notes (the "Exchange Option") or (b) to make, or to cause an Affiliate to make,
a new loan to Net Servicos and to have its Existing Notes repaid by the Company
(the "Real Conversion Option"), in each case on the terms set forth in this
Article II. Each Consenting Noteholder who has elected the Exchange Option has
further elected, by so indicating on its Signature Page,
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whether it wishes to receive a participation in either New Fixed Rate Notes or
New Floating Rate Notes.
SECTION 2.02. Exchange Date and Instrumento de Confissao de Divida.
(a) The closing of the exchange of Existing Notes pursuant to the
Exchange Option and/or the repayment of Existing Notes pursuant to the Real
Conversion Option (such date, the "Exchange Date"), will take place on the date
specified in writing by the Company following satisfaction of the conditions
precedent set forth in Article IV, provided that such date is prior to the
Termination Date.
(b) On the Exchange Date, following the satisfaction or waiver of
the conditions precedent set forth in Article IV below, the Company, the
Guarantors and each Consenting Noteholder (other than Consenting Noteholders
that elect the Real Conversion Option) shall execute and deliver an
Instrumento de Confissao de Divida, with respect to the New Notes dated as of
the Exchange Date, in substantially the form attached as Exhibit A hereto (with
appropriate conforming changes with respect to the amount owed to such
Consenting Noteholder).
SECTION 2.03. Exchange Option. On the Exchange Date, each Consenting
Noteholder that has elected the Exchange Option shall deliver to the Company any
participation in the Existing Notes then held by such Consenting Noteholder, and
the Company shall deliver or cause to be delivered to or for the account of such
Consenting Noteholder:
(i) an amount of U.S. dollars equal to 40% of the Accrued
Obligations of such Consenting Noteholder;
(ii) an amount of U.S. dollars equal to the Accrued Cash
Interest in respect of such Consenting Noteholder's Accrued
Obligations; and
(iii) pursuant to such Consenting Noteholder's election, as
set forth on its Signature Page, a participation in either
(x) New Fixed Rate Notes; or
(y) New Floating Rate Notes,
in either case, in an original principal amount equal to 60% of the
Accrued Obligations, which New Notes shall be issued pursuant to an
indenture, to be entered into on the Exchange Date (the "Indenture") in
substantially the form attached hereto as Exhibit B.
SECTION 2.04. Real Conversion Option. Following
(i) delivery to the Company of any participation in the Existing Notes held by
each Consenting Noteholder that has elected the Real Conversion Option; and
(ii) delivery by the Company to each such Consenting Noteholder an amount of
U.S. dollars equal to (x) 100% of the Accrued Obligations of such Consenting
Lender plus (y) the Accrued Cash Interest in respect of such Accrued
Obligations;
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each Consenting Noteholder who has elected the Real Conversion Option
shall lend, or shall cause an Affiliate to lend, to the Company an amount of
Brazilian reais (each, a "Real Denominated Loan") equal to (x) 60% of the
Accrued Obligations owing to such Consenting Noteholder multiplied by (y) the
Exchange Rate. Each Real Denominated Loan shall be made pursuant to a contrato
de emprestimo which shall be entered into between the Company and the relevant
Real Lender as of the Exchange Date in substantially the form attached as
Exhibit C hereto with appropriate conforming changes with respect to the amount
of the Real Denominated Loan. Each Real Lender shall extend its Real
Denominated Loan on the Exchange Date if the conditions set forth in this
Section 2.04 are satisfied prior to 12:00 noon (New York City time) on the
Exchange Date, or one Business Day after the Exchange Date if those conditions
are satisfied at or after 12:00 noon (New York City time) on the Exchange Date.
ARTICLE III
CONSENT TO AMENDMENT OF THE EXISTING INDENTURE
SECTION 3.01. Exit Consent. Except as otherwise provided in Section
3.02, on the Exchange Date each Consenting Noteholder will deliver to the
Company a consent, in form and substance reasonably satisfactory to the Company
to the entry by the Trustee on each such Consenting Noteholder's behalf, into
the Fifth Supplemental Indenture to the Existing Indenture (the "Fifth
Supplemental Indenture") in substantially the form attached hereto as Exhibit D,
which will modify, among other things, certain covenants and other provisions of
the Existing Indenture as set forth in the Fifth Supplemental Indenture.
SECTION 3.02. Amendment and Restatement of Existing Indenture. If the
Consenting Noteholders own 100% of the Existing Notes then Outstanding, on the
Exchange Date each Consenting Noteholder will deliver to the Company a consent,
in form and substance reasonably satisfactory to the Company, to an amendment
and restatement of the Existing Indenture. The amendment and restatement of the
Existing Indenture will delete the text of the Existing Indenture in its
entirety and replace it with the text of the Indenture.
ARTICLE IV
CONDITIONS TO CLOSING
SECTION 4.01. Conditions to Effectiveness. The closing of the
transactions contemplated by Article II and Article III shall be subject to the
satisfaction or waiver of the following conditions:
(a) Opinions. Each Consenting Noteholder shall have received an
opinion of:
(i) special Brazilian counsel to the Company and Net
Servicos, dated as of the Exchange Date, in form and substance
satisfactory to such Consenting Noteholder;
(ii) special New York counsel to the Company and Net
Servicos, dated as of the Exchange Date, in such form and substance
satisfactory to such Consenting Noteholder;
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(iii) special Delaware counsel to the Company and Net
Servicos, dated as of the Exchange Date, in such form and substance
satisfactory to such Consenting Noteholder; and
(iv) special British Virgin Islands counsel to the Company
and Net Servicos, dated as of the Exchange Date, in such form and
substance satisfactory to such Consenting Noteholder.
(b) Security Documents; Perfection of Security Interests.
(i) Each of the Security Documents attached hereto as
Exhibit E shall have been executed and delivered by Banco Itau, in its
capacity as Collateral Agent, the Company, Net Servicos and each other
Guarantor party thereto.
(ii) All filings, recordings, registrations and other
actions necessary to perfect the Liens created by the Security
Documents shall have been completed.
(c) Officer's Certificate. On the Exchange Date (i) the
representations and warranties of the Company and Net Servicos contained in this
Agreement shall be true and correct in all material respects; (ii) the Company,
Net Servicos and Net Servicos' subsidiaries shall have complied in all material
respects with all of the agreements and satisfied in all material respects all
of the conditions on their part to be performed or satisfied hereunder on or
before the Exchange Date; (iii) the Company, Net Servicos, the guarantors
thereunder and the Trustee for the New Notes shall have executed and delivered
the Indenture and the Trustee under the Indenture shall have received executed
counterparts thereof; (iv) each of the documents relating to the other Senior
Secured Indebtedness, the Common Terms Agreement and the Intercreditor Agreement
shall have been executed and delivered by Net Servicos, its applicable
subsidiaries and all other parties thereto; (v) no Material Adverse Event shall
have occurred; and (vi) the Consenting Noteholders shall have received a
certificate dated the Exchange Date and signed by an executive officer of the
Company and Net Servicos, to the effect of paragraphs (i) to (v) above.
(d) Required Consenting Parties. Creditors of the Net Parties
representing not less than 85% of the aggregate principal amount of the
outstanding financial indebtedness of Net Servicos and its consolidated
Subsidiaries, based upon the list of outstanding financial indebtedness of Net
Servicos and its consolidated Subsidiaries attached as Exhibit F hereto, shall
have agreed to participate in the Restructuring and PriceWaterhouseCoopers LLP
shall have certified the same to the Consenting Noteholders.
(e) Regulatory Approvals; Material Changes. All required consents,
approvals and authorizations or orders of, or qualifications with, any
governmental body or agency, including but not limited to the Comissao de
Valores Mobiliarios in Brazil and the Central Bank of Brazil, to complete the
Restructuring and all the transactions contemplated thereby shall have been
obtained by the Company and Net Servicos. The terms and conditions of the
documents evidencing the Senior Secured Indebtedness (other than the New Notes)
shall contain no material modifications from the forms of such documents in
existence on the date hereof.
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(f) Private Issuance. The private issuance of shares of Net in
connection with the Restructuring arising from Globo Comunicacoes e
Participacoes S.A.'s preemptive rights as approved by the board of directors of
Net at its meeting held on November 3, 2004 shall have occurred.
(g) Creditors' Advisors' Fees. All reasonable and documented legal
fees of Shearman & Sterling LLP, Xxxxxxxx Xxxx Advogados and Wald Associados
Advogados in connection with the Restructuring shall have been paid in full.
ARTICLE V
COVENANTS
SECTION 5.01. Covenants of the Consenting Noteholders.
(a) Each Consenting Noteholder hereby covenants and agrees that it
will not, prior to the Termination Date:
(i) commence any administration, receivership or
insolvency action or proceeding, judicial or otherwise, under any
jurisdiction, including but not limited to any "acao de execucao,"
"acao ordinaria de cobranca," "acao monitoria," "procedimentos
cautelares," "requerimento de falencia" and "protesto de titulos";
(ii) take any action to enforce the payment of monies
under the Existing Notes;
(iii) exercise any right of set-off or counter-claim
actions, judicial or otherwise, in connection with the Existing Notes;
or
(iv) take any action to perfect or enforce or make demand
under any guarantee or security interest (including but not limited to
any "fianca" or "aval" or similar guarantees) given by any third party
in connection with the Existing Notes;
provided that this covenant will terminate in the event that creditors holding
claims against the Net Parties in an aggregate amount equal to or greater than
$11 million take any of the foregoing actions after the date hereof.
(b) Each Consenting Noteholder will, (i) until the Termination
Date, suspend any and all actions and/ or proceedings, judicial or otherwise,
that may have been initiated by such Consenting Noteholder against the Net
Parties in connection with the Existing Notes, including but not limited to any
"acao de execucao," "acao ordinaria de cobranca," "acao monitoria,"
"procedimentos cautelares," "requerimento de falencia" or "protesto de titulos"
("Proceedings"), and (ii) on the Exchange Date, waive and terminate all
Proceedings.
(c) Each Consenting Noteholder irrevocably agrees not to transfer
any Existing Notes held by it until the Termination Date. Notwithstanding the
foregoing, each Consenting Noteholder may transfer Existing Notes to a third
party if such third party, prior to the transfer of
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such Existing Notes, is or becomes a party to this Exchange Agreement as a
"Consenting Noteholder."
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. Representations and Warranties.
(a) Representations and Warranties of the Consenting Noteholders.
Each of the Consenting Noteholders hereby represents and warrants to the other
parties hereto as follows:
(i) Such Consenting Noteholder is an entity duly
organized and validly existing under the laws of its jurisdiction of
formation.
(ii) Such Consenting Noteholder has all legal and
corporate powers and authority to execute and deliver this Agreement
and to perform all of its obligations set forth herein.
(iii) This Agreement is a legal, valid and binding
obligation of such Consenting Noteholder, enforceable against such
Consenting Noteholder in accordance with its terms.
(iv) Such Consenting Noteholder is acquiring the New Notes
for its own account (or for the account of funds that such Consenting
Noteholder manages), and not as nominee or agent, for the purpose of
investment and not with a view to distribution in violation of the
Securities Act of 1933, as amended (the "Securities Act"). Such
Consenting Noteholder understands that it must bear the economic risk
of its investment for an indefinite period of time because the New
Notes will not be registered under the Securities Act or any applicable
state securities laws and may not be resold unless subsequently
registered under the Securities Act or unless an exemption from such
registration is available. Such Consenting Noteholder hereby agrees
that the New Notes will not be transferred, sold or otherwise disposed
of other than (i) pursuant to a registration statement under the
Securities Act or pursuant to an exemption therefrom and (ii) in
compliance with any applicable state securities laws. Such Consenting
Noteholder acknowledges that, in issuing the New Notes, the Company is
relying on the representations and warranties of such Consenting
Noteholder in this Section 6.01.
(v) Such Consenting Noteholder represents that it is a
sophisticated institutional investor and has such knowledge and
experience in financial and business matters; and that it is capable of
evaluating the merits and risks of its investment in the New Notes.
Such Consenting Noteholder has been given access to all information
regarding the Net Parties that such Consenting Noteholder has requested
in order to evaluate its investment in the New Notes. Such Consenting
Noteholder further represents that it is an "accredited investor" as
such term is defined in Rule 501 of Regulation D of the SEC under the
Securities Act with respect to the purchase of the New Notes.
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(vi) Such Consenting Noteholder hereby acknowledges that,
pursuant to the Indenture, the New Notes shall bear a legend
substantially in the following form (in addition to any other legend
required pursuant to the Indenture):
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. IN ADDITION,
NEITHER THIS SECURITY, NOR ANY INTEREST OR PARTICIPATION HEREIN, MAY
(DIRECTLY OR INDIRECTLY) BE REOFFERED, SOLD, ASSIGNED OR OTHERWISE
TRANSFERRED TO, OR PLEDGED IN FAVOR OF, A COMPETITOR OF NET OR ANY OF
ITS SUBSIDIARIES. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF
(1) REPRESENTS THAT IT IS (A) A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S.
PERSON AND IS ACQUIRING THIS SECURITY IN AN "OFFSHORE TRANSACTION"
PURSUANT TO RULE 903 OF REGULATION S, (2) AGREES THAT IT WILL NOT,
PRIOR TO (X) THE DATE WHICH IS THREE YEARS (OR SUCH SHORTER PERIOD OF
TIME AS PERMITTED BY RULE 144(k) UNDER THE 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, 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) 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 UNTIED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, PURSUANT TO RULE 903 OR RULE 000
XX XXXXXXXXXX X, XX (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES THAT
IT WILL GIVE TO EACH
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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 "U.S.
PERSON" HAVE THE RESPECTIVE MEANINGS GIVEN TO THEM BY REGULATION S
UNDER THE SECURITIES ACT.
(vii) The acquisition by such Consenting Noteholder of the
New Notes shall constitute a confirmation by it, as of the Exchange
Date, of the foregoing representations.
(b) Representations and Warranties of the Company. Each of the
Company and Net Servicos hereby represents and warrants to the other parties
hereto as follows:
(i) Each of the Company and Net Servicos is an entity
duly organized and validly existing under the laws of its jurisdiction
of formation.
(ii) Each of the Company and Net Servicos has all legal
and corporate powers and authority to execute and deliver this
Agreement and to perform all of its obligations set forth herein.
(iii) This Agreement is a legal, valid and binding
obligation of the Company and Net Servicos, enforceable against the
Company and Net Servicos in accordance with its terms.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Amendments, etc. No amendment or waiver of any provision
of this Agreement nor consent to any departure by any Net Party therefrom, shall
in any event be effective unless the same shall be in writing and signed by each
of the Net Parties and each of the Consenting Noteholders party hereto.
SECTION 7.02. Notices, etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy or
telex communication) and mailed, telegraphed, telecopied, telexed or delivered,
if to either the Company or Net Servicos, at its address at Rua Xxxxx Xxxxxx,
1356, Sao Paulo, SP 00000-000, Xxxxxx, Attention: Chief Legal Officer; and if to
any Consenting Noteholder, at the address set forth on its respective Signature
Page. All such notices and communications shall, when mailed, telegraphed,
telecopied or telexed, be effective when deposited in the mails, delivered to
the telegraph company, transmitted by telecopier or confirmed by telex
answerback, respectively. Manual delivery by telecopier of an executed
counterpart of any amendment or waiver of any provision of this Agreement or the
New Notes or of any Exhibit to this Agreement to be executed and delivered
hereunder shall be effective as delivery of an original executed counterpart
thereof.
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SECTION 7.03. No Waiver; Remedies. No failure on the part of any
Consenting Noteholder to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 7.04. Binding Effect; Assignments. This Agreement shall become
effective when it shall have been executed by the Company, Net Servicos and each
Consenting Noteholder and thereafter shall be binding upon and inure to the
benefit of the Net Parties and each Consenting Noteholder and their respective
successors and assigns, except that (i) the Company and Net Servicos may not
assign any of their rights and obligations hereunder, and (ii) any Consenting
Noteholder may assign all or a portion of its rights and obligations hereunder
to any transferee of its Existing Notes, that agrees in writing to be bound by
the terms of this Agreement. Any assignment of this Agreement by the Company or
Net Servicos shall be void and of no effect. If any Consenting Noteholder
transfers all of its holdings of Existing Notes to one or more assignees who are
or become parties to this Agreement and assigns its obligations under this
Agreement to such transferees in compliance with Section 5.01(c), such
Consenting Noteholder shall, to the extent that it assigns its obligations, be
released from its obligations hereunder.
SECTION 7.05. Termination. This Agreement shall terminate on the date
(the "Termination Date") that is the earlier of (i) the Exchange Date and (ii)
(A) February 28, 2005, if either the Company or Consenting Noteholders holding
more than 50% of the aggregate principal amount of Existing Notes held by all
Consenting Noteholders has, by February 21, 2005, notified the other parties
hereto of its intention to terminate this Agreement, and (B) otherwise, March
31, 2005.
SECTION 7.06. Severability. The invalidity, illegality, or
unenforceability in any jurisdiction of any provision under this Agreement shall
not affect or impair the remaining provisions of this Agreement.
SECTION 7.07. Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties to this Agreement in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Manual delivery of an executed counterpart of a signature page to
this Agreement by telecopier shall be effective as delivery of an original
executed counterpart of this Agreement.
SECTION 7.08. Jurisdiction, etc.
(a) Each of the parties hereto irrevocably agrees, for itself and
in respect of its property, generally and unconditionally, that any suit, action
or proceeding arising out of or relating to this Agreement may be instituted in
any state or Federal court in the Borough of Manhattan in The City of New York,
New York, and waives any objection which it may now or hereafter have to the
laying of venue of any such proceeding, and irrevocably submits to the
non-exclusive jurisdiction of such courts in any suit, action or proceeding.
11
(b) To the extent that any party hereto has acquired or hereafter
may acquire any immunity from jurisdiction of any court 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, such party, as the case may be, hereby irrevocably waives such
immunity in respect of their obligations under this Agreement to the full extent
permitted by law.
SECTION 7.09. Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of New York.
SECTION 7.10. Waiver of Jury Trial. Each of the parties hereto hereby
irrevocably waives all right to trial by jury in any action, proceeding or
counterclaim (whether based on contract, tort or otherwise) arising out of or
relating to this Agreement or the transactions contemplated hereby or thereby or
the actions of any party hereto in the negotiation, administration, performance
or enforcement thereof.
[Remainder of page deliberately left blank.]
12
IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
NET SUL COMUNICACOES LTDA.
By: ________________________________ Witness:
Name:
Title:
By: ________________________________ Witness:
Name:
Title:
NET SERVICOS DE COMUNICACAO S.A
By: ________________________________ Witness:
Name:
Title:
By: ________________________________ Witness:
Name:
Title:
CONSENTING NOTEHOLDER SIGNATURE PAGE OF:
CONSENTING NOTEHOLDER
_______________________________
By ____________________________
Name:
Title:
Address of Consenting Noteholder:
Attention:
Telephone:
Facsimile:
Outstanding Principal Amount of Existing Notes: $_____________________________
NOTEHOLDER ELECTIONS
1. By its execution of this Agreement, the above-signed Consenting
Noteholder hereby elects to receive (check either the Exchange Option or the
Real Conversion Option):
____ the EXCHANGE OPTION
OR
_____ the REAL CONVERSION OPTION
2. Complete only if the above-signed Noteholder has elected the Exchange
Option.
The above-signed Consenting Noteholder elects to receive an interest in (select
either the New Floating Rate Notes or the New Fixed Rate Notes):
____ the NEW FLOATING RATE NOTES
OR
____ the NEW FIXED RATE NOTES
Exhibit A
(Free Translation)
PRIVATE INSTRUMENT OF DEBT CONFESSION
This Private Instrument of Debt Confession (Instrument) shall be executed, in
accordance with the law, by and between the following parties ("Parties"):
(a) on the one hand: [ ], a financial institution duly organized and
existing in accordance with the laws of [ ], headquartered at [ ], represented
by [ ] ("The Creditor"); and,
(b) on the other hand :
(i) NET SUL COMUNICACOES LTDA., a Brazilian limited company
with principal office in the city of Porto Alegre, state of Rio Grande
do Sul, at Rua Silveiro No. 1,111, Morro Santa Xxxxxx, registered in
the National Register of Legal Entities (C.N.P.J.) under No.
73.676.512/0001-46, hereby represented in accordance with its By-Laws
by its executive directors, Messrs. Xxxxxxxxx Xxxxx Valim Filho and
Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx ("Net Company"); and
(ii) the companies listed and qualified in "Annex 1" herein,
(together with the Net Company, the "Net Group Companies");
have mutually agreed on the following:
W H E R E A S
(1) Net Servicos and/or some of its restricted subsidiaries were originally
debtors with regard to a series of loans contracted within Brazil and outside it
("Original Loans"), and did not comply with the terms of the respective
instruments;
(2) Net Servicos, for itself and on behalf of some of its restricted
subsidiaries, and the creditors of the Original Loans ("Creditors") negotiated
in good faith a restructuring plan for the Original Loans, which was the object
of a material fact published by Net Servicos on June 28, 2004 ("Restructuring
Plan");
(3) among the Original Loans, forming the object of the Restructuring Plan are
the Floating Rate Notes issued by Net Sul Comunicacoes Ltda., for
US$80,000,000.00 due in 2005 (as "Net Sul Notes");
(4) within the scope of the Restructuring Plan, the Net Sul Notes were
renegotiated as a global note with maturity in 2009, issued for a total of US$ [
] (the "Global Note"), whose terms and conditions are consolidated in the
Indenture and the respective Global Note (the "Indenture") forming a part of
this Instrument as "Annex 2", it being determined that the Creditor shall hold
an installment of the Global Note of US$ [ ] and that the parties have agreed to
sign this Instrument with regard to the payments due to The Creditor by virtue
of the Indenture;
(5) in addition to this Instrument and to other instruments that have amended or
replaced other Original Loans, the Creditors and the Net Group Companies have
executed other documents to formalize the Restructuring Plan, including, with
Banco Itau S.A., in the capacity of collateral agent, (the "Collateral Agent"),
the "Intercreditor Agreement" (a copy of which is attached hereto as "Annex 3"),
and the following pledge agreements (the "Pledge Agreements"):
(a) the Receivables Pledge Agreement with Foreclosure Clause executed
by Net Servicos, Net Sao Paulo Ltda., the Creditors, with the latter represented
by the Collateral Agent and the Centralizing Bank, identified in the same
agreement (a copy of which is attached hereto as "Annex 4");
(b) the Receivables Pledge Agreement with Foreclosure Clause executed
by Net Servicos, Net Rio S.A, the Creditors, with the latter represented by the
Collateral Agent and the Centralizing Bank, identified in the same agreement (a
copy of which is attached hereto as "Annex 5");
(c) the Share Pledge Agreement with Amicable Sale Clause and Other
Covenants executed by Net Group and Creditors, with the latter represented by
the Collateral Agent (a copy of which is attached hereto as "Annex 6");
(d) the Quota Pledge Agreement with Amicable Sale Clause and Other
Covenants executed by Net Group and Creditors, with the latter represented by
the Collateral Agent (a copy of which is attached hereto as "Annex 7"); and
(e) the Asset Pledge Agreement with Amicable Sale Clause and Other
Covenants, executed by Net Group and Creditors, with the latter represented by
the Collateral Agent (a copy of which is attached as "Annex 8");
(6) in accordance with the terms agreed in the Restructuring Plan, the Net Group
Companies have agreed irrevocably and irreversibly to guarantee the payment of
any amounts due by Net Company under the terms of this Instrument without
benefit of order;
(7) as a result of the renegotiation of the Debt and implementation of the
Restructuring Plan, the Net Group Companies acknowledge that they have an
outstanding net debt towards the Creditor on this date for a principal amount of
US$ [ ] ([ ]), with regard to the Indenture.
GIVEN THE ABOVE, and considering the mutual covenants contained herein and other
firm and valid mutual obligations, whose existence and sufficiency are hereby
acknowledged, the Parties have mutually agreed to the following:
CLAUSE 1 DEBT CONFESSION
Net Company acknowledges that it owes The Creditor the net, certain and due
principal amount of US$[ ] ([ ]) ("Confessed Debt" or "Principal Amount"), whose
payment shall be made, in accordance with the terms and conditions of the
Indenture.
CLAUSE 2 OBLIGATION TO PAY BY THE NET GROUP COMPANIES
The Net Group Companies expressly declare that they are aware and that they
agree with the amount of the Confessed Debt, whose liquidity and enforceability
they also acknowledge, assuming hereby jointly and severally, without benefit of
order or any other preference, an irrevocable obligation to pay the interest on
the Confessed Debt and other charges and amounts contemplated in this instrument
and its annexes, in accordance with the wording and deadlines established in
Clauses 3, 4 and 5 of this Instrument and in compliance with the wording of the
Indenture.
FIRST PARAGRAPH The payments made by the Net Group Companies for
liquidation of the obligations established herein under penalty of breach of
contract are made in accordance with the wording and conditions of the
Indenture.
SECOND PARAGRAPH The payment of each of the installments in the terms
and amounts due shall be considered formalized upon effective receipt of the
amounts as contemplated in the Indenture.
THIRD PARAGRAPH If it is necessary to collect the credit with regard to
the Confessed Debt or any of its installments, including fines or Interest due
to The Creditor by the Net Group Companies, the Parties agree that the same
credit may not be collected simultaneously in Brazil and outside it. If there is
a collection of credit with regard to the Indenture outside Brazil, this credit
may only be collected or executed in Brazil if it is demonstrated that it is no
longer being collected abroad.
FOURTH PARAGRAPH In the event of default on the payment obligations by
the Net Group Companies and the Creditor requires that any obligation of the Net
Group Companies be carried out in Brazil, the amount due in US dollars shall be
converted into Brazilian reais at the Exchange Rate (as per the definition
below) of the effective date on which the Net Group Companies pay the Creditor.
CLAUSE 3 INTEREST ON THE CONFESSED DEBT
The Principal amount shall be accreted by the remuneratory interest ("Interest")
corresponding to the annual rate [equal to the quarterly LIBOR rate plus a
spread of 3.0%. For the purposes of this Clause, LIBOR means, with regard to any
interest period, the London Interbank Offered Rate, at which quarterly deposits
in US dollars are offered in the London Interbank market, at 11 a.m. (London
time), two London business days before the first day of this period, in
accordance with the value for this rate published by REUTERS (option 3750), or
by any substitute] or [7% (seven per cent) per year].
The payment of Interest calculated in accordance with Clause 3 above shall be
made in accordance with Clause 3 above by the Net Group Companies to The
Creditor at the time designated in the Indenture.
CLAUSE 4 PAYMENT AND MATURITY OF THE PRINCIPAL AMOUNT OF THE CONFESSED DEBT
Except for the payment events established in the Indenture, the amortization of
the Principal amount of the Confessed Debt shall be made directly by Net Group
to the Creditor, in the following form:
(A) 70% (seventy percent) of the Principal Amount shall be amortized in
accordance with the following fixed schedule:
% OF PRINCIPAL AMOUNT ON DATE OF EFFECTIVENESS TOTAL TO BE AMORTIZED
---------------------------------------------- ---------------------
1.25% on March 15, 2006 total of 5% in 2006
1.25% on June 15, 2006
1.25% on September 15, 2006
1.25% on December 15, 2006
---------------------------------------------------------------------------
3.75% on March 15, 2007 total of 15% in 2007
3.75% on June 15, 2007
3.75% on September 15, 2007
3.75% on December 15, 2007
---------------------------------------------------------------------------
6.25% on March 15, 2008 total of 25% in 2008
6.25% on June 15, 2008
6.25% on September 15, 2008
6.25% on December 15 , 2008
---------------------------------------------------------------------------
6.25% on March 15, 2009 total of 25% in 2009
6.25% on June 15, 2009
6.25% on September 15, 2009
6.25% on December 15, 2009
The amortization percentage of the Principal Amount specified in the table above
shall be
calculated on the basis of the Principal Amount on the Date of Effectiveness.
(B) The remaining 30% (thirty percent) of the Principal Amount shall be
amortized as established in the table below, on the dates indicated in column "A
- Original Payment Date".
However, if (i) the Accumulated DI Factor to the last day of the previous
fiscal quarter, or (ii) the average daily Interest Rate during the second week
prior to the week of the Original Payment Date (set forth in column A), is equal
to or higher than the limits established in column "B - Conditions" of the table
below, the payment of the principal specified in column "A - Original Payment
Date" shall be paid on the "Alternative Payment Date" specified in column C
below:
% OF B - CONDITIONS
PRINCIPAL A - ORIGINAL ------------------------------------------- C - ALTERNATIVE
AMOUNT PAYMENT DATE ACCUMULATED DI RATE EXCHANGE RATE PAYMENT DATE
------ ------------ ------------------- ------------- ------------
1.25% March 15, 2006 1.417 on Dec 31, 2005 R$4.00/US$ Mar 15, 2010
1.25% Jun 15, 2006 1.479 on Mar 31, 2006 R$4.00/US$ Mar 15, 2010
1.25% Sep 15, 2006 1.543 on Jun 30, 2006 R$4.50/US$ Mar 15, 2010
1.25% Dec 15, 2006 1.610 on Sep 30, 2006 R$4.50/US$ Mar 15, 2010
2.50% Mar 15, 2007 1.680 on Dec 31, 2006 R$4.50/US$ Mar 15, 2010
2.50% Jun 15, 2007 1.767 on Mar 31, 2007 R$4.50/US$ Jun 15, 2010
2.50% Sep 15, 2007 1.859 on Jun 30, 2007 R$4.50/US$ Jun 15, 2010
2.50% Dec 15, 2007 1.955 on Sep 30, 2007 R$4.50/US$ Jun 15, 2010
2.50% Mar 15, 2008 2.057 on Dec 31, 2007 R$4.70/US$ Sep 15, 2010
2.50% Jun 15, 2008 2.164 on Mar 31, 2008 R$4.70/US$ Sep 15, 2010
2.50% Sep 15, 2008 2.277 on Jun 30, 2008 R$4.70/US$ Sep 15, 2010
2.50% Dec 15, 2008 2.396 on Sep 30, 2008 R$4.70/US$ Dec 15, 2010
1.25% Mar 15, 2009 2.521 on Dec 31, 2008 R$4.90/US$ Dec 15, 2010
1.25% Jun 15, 2009 2.674 on Mar 31, 2009 R$4.90/US$ Dec 15, 2010
1.25% Sep 15, 2009 2.835 on Jun 30, 2009 R$4.90/US$ Dec 15, 2010
1.25% Dec 15, 2009 3.007 on Sep 30, 2009 R$4.90/US$ Dec 15, 2010
The percentage of Principal amount specified in the table above shall be
calculated based on the Principal amount on the Date of Effectiveness.
FIRST PARAGRAPH: For purposes of this Clause, "Exchange Rate" shall
mean, for any day, the exchange rate published by Central Bank in its SISBACEN
System (or the system that replaces it) as the exchange rate of the US dollar
PTAX 800, Option 5 (selling rate), currency 220, on the immediately preceding
business day in Brazil, or in its absence, the rate which succeeds it.
SECOND PARAGRAPH: For the purposes of this Clause, "Accumulated DI
Factor" means, for any calculation date, the interest rate effective from
January 01, 2004 until the
calculation date.
CLAUSE 5 OPTIONAL EARLY AMORTIZATION OF THE DEBT
Net Group is authorized to advance the payment of the Confessed Debt in
accordance with the terms and conditions described in the Indenture.
CLAUSE 6 LATE PAYMENT
In the event of late payment of any installment in accordance with the
terms of this Instrument, the late amount shall be increased by a fine and other
late payment charges established in the Indenture.
CLAUSE 7 GUARANTEES
The Net Group Companies declare that they are aware that the Confessed Debt is
guaranteed by the assets pledged in accordance with the terms of the
Intercreditor Agreement and respective pledge agreements listed in the Preamble
section (5) items (a), (b), (c), (d) and (e) that shall be enforceable in
accordance with its terms and conditions. The Creditor Institution declares that
it is aware that the foreclosure of such guarantees provided by Net Group,
contemplated in the Pledge Agreement, listed in the Preamble section (5) items
(a), (b), (c), (d) and (e) may only be effected in accordance with the terms and
conditions of the Intercreditor Agreement and in compliance with the terms of
the Pledge Agreements.
FIRST PARAGRAPH The Net Group Companies execute this Instrument as
guarantors and principal payers, jointly responsible for compliance with all the
obligations assumed by Net Company herein, with express waiver of the benefit of
discussion and of the benefits mentioned in Articles 827, 829, 830, 834, 835,
837, 838 and 839 of the Brazilian Civil Code and Article 595 of the Brazilian
Civil Procedure Code, guaranteeing the faithful compliance with all the
obligations assumed by the Net Company in accordance with the terms of this
Instrument.
CLAUSE 8 OBLIGATIONS OF DEBTORS
From this date until the date on which the entire Confessed Debt has been paid
in full, the Net Group Companies undertake to comply with the obligations
established in the Indenture.
CLAUSE 9 DECLARATIONS AND GUARANTEES
The declarations and guarantees provided by the Net Group Companies are those
mentioned in the Indenture.
CLAUSE 10 EVENTS OF DEFAULT
The events of default and the rules for early maturity of this Instrument are
those listed in the Indenture.
CLAUSE 11 TAXES, EXPENSES AND FINES
The Net Group Companies shall jointly and severally bear all the levies, taxes
and charges that apply or may come to apply by force of this Instrument,
including the Imposto sobre Operacoes Financeiras (IOF) [Financial Transactions
Tax] and the Transmissao de Valores e de Creditos e Direitos de Natureza
Financeira (CPMF) [Temporary Tax on Financial Transactions], but excluding
levies, taxes, charges and contributions of any nature, deductions, retentions
and fiscal dues applicable to the income, the Contribuicao Social sobre o Lucro
Liquido [Social Contribution on Net Profits], the contribution to the Programa
de Integracao Social (PIS) [Social Integration Plan], and the contribution to
the Social Investment Fund - FINSOCIAL), present or future, as well as any
interest, fines or other liabilities relating to the latter.
FIRST PARAGRAPH The Net Group Companies shall also bear any expenses
relative to registration at the competent Public Registry of Titles and
Document, and eventual judicial or extrajudicial collection claims on this
Instrument.
SECOND PARAGRAPH The Net Group Companies shall pay all reasonable fees
and expenses incurred, with supporting documentation by the holders of Original
Loans with legal and financial consultants already contracted with the consent
of Net Servicos to negotiate, execute and formalize this Instrument (i.e.
Xxxxxxxx Neto Advogados, Shearman & Sterling LLP and PricewaterhouseCoopers)
regardless of the effective conclusion of the transactions contemplated herein.
THIRD PARAGRAPH The levies, taxes, charges and expenses mentioned in
this Clause shall be refunded to The Creditor within 5 (five) days of the
delivery to Net Servicos of a written request.
CLAUSE 12 DURATION
This Instrument is executed irrevocably and irreversibly and shall take effect
on the date of its signing, binding the Parties, their successors and assignees
of any kind. The obligations of the Net Group shall remain in force until full
payment of the amount due, in accordance with the provisions of this Instrument.
With the full payment of the Confessed Debt by the Net Group Companies to The
Creditor, as expressed herein, the parties shall grant the most ample, general
and unrestricted release of all obligations assumed by the parties, having
nothing further to claim from each other, presently or in the future, with
respect to the payment of the Confessed Debt, the release of this Instrument
constituting a valid release of the pecuniary obligations contemplated in the
Indenture and vice-versa.
CLAUSE 13 ASSIGNMENT
In compliance with the provisions of the Indenture, The Creditor may assign or
transfer to third parties in full or in part, the credit assignments represented
by the Confessed Debt as well as the rights and obligations arising from this
Instrument, simply by informing Net Company of the same in writing.
CLAUSE 14 VALIDITY OF CLAUSES
Each of the provisions of this Instrument shall be independent and distinct from
the others and the illegality, invalidity or ineffectiveness of any of the
provisions shall not affect or impair the legality, effectiveness and
enforceability of the other provisions contained herein, which shall remain
valid and in full force for all legal purposes.
CLAUSE 15 ENTIRE AGREEMENT
This Instrument, the Indenture and related documents, the Pledge Agreements and
the Intercreditor Agreement constitute the entire agreement by Parties with
regard to the transactions contemplated herein and substitute any other
understanding by the Parties in relation to their purpose. Moreover, it is
established that if any other instrument signed by the Parties provides
otherwise than as agreed in such instruments, the provisions of the instruments
listed above shall prevail.
CLAUSE 16 ALTERATIONS AND AMENDMENTS
Any alteration or amendment to this Instrument shall only be considered valid
and produce effect if signed by all the Parties.
CLAUSE 17 WAIVER AND TOLERANCE
The parties recognize that, unless expressly established by this Instrument: (a)
failure to exercise, the concession of a term, tolerance or delay in exercising
any right guaranteed hereby and/or by law shall not constitute a novation or
waiver of these rights, nor shall it harm the eventual exercise of same; (b) the
individual or partial exercise of these rights shall not prevent the exercise of
the remaining rights, or the exercise of any other right; (c) the waiver of any
of these rights shall not be valid, unless granted in writing; and (d) the
waiver of a right shall be implemented restrictively and shall not be considered
as waiver of any other right granted by this Instrument.
CLAUSE 18 NOTICES
The notices and communications required and/or permitted hereby shall be made by
registered mail or through public registry or judicial means, and shall be
addressed to the
Parties at the addresses set forth in the preamble of this Instrument, or to
another address indicated in writing by the Parties, in accordance with this
Clause.
FIRST PARAGRAPH The delivery of these notices and/or communications
shall be considered as the date placed on the receipt slip of the registered
letter or on the date of formalization of the judicial or extrajudicial notice,
as per the case.
SECOND PARAGRAPH The Creditor is authorized to deliver to Net Servicos
the notices and/or communications addressed to any of the Net Group Companies,
and, likewise, any of the Net Group Companies is authorized to deliver to the
Collateral Agent any notice and/or communication addressed to the Creditor
related to the Pledge Agreements mentioned in item (4) of the Preamble to this
Agreement.
THIRD PARAGRAPH Addresses for notices and/or communications:
Net Sul Comunicacoes X.X.
Xxx Xxxxxxxx N(0). 1,111, Morro Santa Xxxxxx
Xxxxx Alegre, RS, CEP: 04719-002
Attention: Xxxxxxxx X. X. Xxxxxxx / Xxxxx Xxxxxx Xxxxxx
Telephone: (00-00) 0000-0000
Fax: (00-00) 0000-0000
[The Creditor]
[ ]
CLAUSE 19 EXTRAJUDICIAL EXECUTIVE TITLE
The Parties acknowledge that this Instrument constitutes an
extrajudicial executive title, for purposes of the provisions of Articles 583
and 585, I and II of the Brazilian Civil Procedural Code, with the alterations
of Law No. 8,953, of December 13, 1994.
FIRST PARAGRAPH - The Net Company hereby undertakes to register this
Instrument at the relevant Public Registry of Titles and Document of [ ], State
of [ ], within 3 (three) business days of this date.
CLAUSE 20 NOVATION
This Instrument shall not constitute a novation of any obligation arising from
the Original Loan Agreement.
CLAUSE 21 APPLICABLE LAW
This Instrument shall be governed by the laws of the Federative Republic of
Brazil.
CLAUSE 22 CHOICE OF JURISDICTION
To settle any doubts and disputes arising from this Instrument, the parties
choose the jurisdiction of the City of Sao Paulo, State of Sao Paulo, expressly
renouncing any other, regardless of its merits.
The Parties, being in full agreement, have signed [ ] ([ ]) copies of this
instrument of equal content and form, in the presence of the witnesses indicated
below.
Sao Paulo, [ ] [ ], 200[ ]
[THE CREDITOR]
P. ________________________________________
Name:
Title:
P. ________________________________________
Name:
Title:
[NET SUL]
P. ________________________________________
Name:
Title:
P. ________________________________________
Name:
Title:
DEBT CONFESSION INSTRUMENT DATED ON [ ]
INTERVENING GUARANTORS
NET SERVICOS DE NET FRANCA LTDA.
COMUNICACAO S.A.: NET GOIANIA LTDA.
ALNOR ALUMINIO DO NORTE LTDA. NET INDAIATUBA LTDA.
ANTENAS COMUNITARIAS NET JOINVILLE LTDA.
BRASILEIRAS LTDA. NET LONDRINA LTDA.
CABODINAMICA TV CABO NET MARINGA LTDA.
SAO PAULO S.A. NET PARANA COMUNICACOES LTDA.
CMA PARTICIPACOES S.A. NET PIRACICABA LTDA.
DABNY, L.L.C. NET RECIFE LTDA.
DR EMPRESA DE DISTRIBUICAO NET RIBEIRAO PRETO S.A.
E RECEPCAO DE TV LTDA. NET RIO S.A.
HORIZONTE SUL NET SAO XXXXXX S.A.
COMUNICACOES LTDA. NET SAO XXXX DO RIO PRETO LTDA.
JONQUIL VENTURE LIMITED NET SAO PAULO LTDA.
MULTICANAL NET SOROCABA LTDA.
TELECOMUNICACOES S.A. NET SUL COMUNICACOES LTDA.
NET ANAPOLIS LTDA. REYC COMERCIO
NET ARAPONGAS LTDA. E PARTICIPACOES LTDA.
NET BAURU LTDA. TV CABO DE CHAPECO LTDA.
NET BELO HORIZONTE LTDA. .
NET BRASILIA LTDA. TV VIDEO CABO
NET CAMPINAS LTDA. DE BELO HORIZONTE S.A.
NET CAMPO GRANDE LTDA.
NET CURITIBA LTDA.
NET FLORIANOPOLIS LTDA.
P. ________________________________________
Name:
Title:
P. ________________________________________
Name:
Title:
Witnesses:
1. - ____________________________
Name: [ ]
ID Number (RG): [ ]
2. - ____________________________
Name: [ ]
ID Number (RG): [ ]
ANNEX 1
TO THE DEBT CONFESSION INSTRUMENT
INTERVENING PARTIES - GUARANTORS
NET SERVICOS DE COMUNICACAO S.A., a joint stock company headquartered
in the city and state of Sao Paulo, at Rua Verbo Divino, N(0). 1,356,
registered in the National Register of Corporate Entities (CNPJ/MF)
under N(0). 00.108.786/0001-65, hereafter duly represented in the form
of its By-Laws;
ALNOR ALUMINIO DO NORTE LTDA., a Brazilian limited liability company
with principal office in the city of Manaus, state of Amazonas, at Rua
Xxxxxx Xxxxxxx N(0). 1,672, Xxxxx, Xxxxx 00 de Janeiro, registered in
the National Register of Corporate EntitieS (CNPJ) under N(0).
34.534.750/0001-65, herein represented in accordance with its By-Laws
by Messrs. Xxxxxxxxx Xxxxx Valim Filho anD Xxxxxxxx Xxxxxxxxxxx Xxxxx
Xxxxxxx;
ANTENAS COMUNITARIAS BRASILEIRAS LTDA., a Brazilian limited liability
company with principal office in the city of Blumenau, state of Santa
Catarina, at Xxxxxxx Xxxxxx X(0). 00, Xxxxx Xxxxx, registered in the
National Register of Corporate Entities (CNPJ) under N(0).
79.375.606/0001-61,herein represented in accordance with its By-Laws by
Messrs. Xxxxxxxxx Xxxxx Xxxxx Filho and Xxxxxxxx Xxxxxxxxxxx Xxxxx
Xxxxxxx;
CABODINAMICA TV CABO SAO PAULO S.A., a Brazilian joint stock company
with principal office in the city of Sao Paulo, state of Sao Paulo, at
Rua Verbo Divino, N(0). 1,356, Chacara Xxxxx Xxxxxxx, registered in the
National Register of Corporate Entities (CNPJ) under N(0).
65.516.254/0001-02, herein represented in accordance with its By-Laws
by its executive directors, Messrs. Xxxxxxxxx Xxxxx Xxxxx Filho and
Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
CMA PARTICIPACOES S.A., a Brazilian joint stock company with principal
office in the city of Sao Paulo, state of Sao Paulo, at Rua Verbo
Divino, N(0). 1.356, Chacara Xxxxx Xxxxxxx, registered in the National
Register of Corporate Entities (CNPJ) under N(0). 31.959.356/0001-80,
herein represented in accordance with its By-Laws by its executive
directors, Messrs. Xxxx Xxxxxxx Xxxxxxxx Xxxxx and Xxxxxxxx Xxxxxxxxxxx
Xxxxx Xxxxxxx;
DABNY, L.L.C., a company constituted and in existence in accordance
with the laws of Delaware, headquartered c/o of The Prentice Hall
Corporation System, Inc. 00 Xxxxxxxxxx Xxxxxx, Xxxxx X-000, Xxxxx, Xxxx
Xxxxxx 00000, herein represented in accordance with its By-Laws by its
executive directors, Messrs. Xxxxxxxxx Xxxxx Valim Filho and Xxxxxxxx
Xxxxxxxxxxx Xxxxx Xxxxxxx;
JONQUIL VENTURE LIMITED, a company constituted and in existence in
accordance with the laws of the British Virgin Islands, headquartered
at Xxxxxxxxx Xxxxxxxx, X.X. Xxx 00, Xxxx Xxxx, Xxxxxxx, herein
represented in accordance with its By-Laws by its executive director,
Sr. Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
MULTICANAL TELECOMUNICACOES S.A., a Brazilian joint stock company, with
principal office in the city and state of Sao Paulo, at Rua Verbo
Divino N(0). 1,356 -
1st floor - part, CEP 04719-002, Chacara Xxxxx Xxxxxxx, registered in
the National Register of Corporate Entities (CNPJ) under N(0).
31.963.481/0001-64, with its By-Laws duly filed at the Board of Trade
of the State of Sao Paulo under N(0). 00.000.000.000, herein
represented in accordance with its By-Laws by its executive directors,
Messrs. Xxxxxxxxx Xxxxx Xxxxx Filho and Xxxxxxxx Xxxxxxxxxxx Xxxxx
Xxxxxxx;
NET BELO HORIZONTE LTDA., a Brazilian limited company, with principal
office in the city of Belo Horizonte, state of Minas Gerais, at Xxxxxxx
Xxxxxxxxxx X(0). 000, Xxxxxxxxxx, XXX 00000-000, registered in the
National Register of Corporate Entities (CNPJ) under N(0).
38.738.308/0001-01, herein represented in accordance with its By-Laws
by its executive directors, Messrs. Xxxxxxxxx Xxxxx Valim Filho and
Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET BRASILIA LTDA., a Brazilian limited company, with principal office
in the city of Xxxxxxxx, Xxxxxxx Xxxxxxxx, XXX/Xxx, Xxxxxx 00, N(0).
725, CEP 70000-000, registered in the National Register of Corporate
Entities (CNPJ) under N(0). 26.499.392/0001-79, herein represented in
accordance with its By-Laws by its executive directors, Messrs.
Xxxxxxxxx Xxxxx Valim Filho and Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET LONDRINA LTDA., a Brazilian limited liability company with
principal office in the city of Londrina, state of Parana, at Xxx
Xxxxxx, X(0). 000, Xxxxxx, registered in the National Register of
Corporate Entities (CNPJ) under N(0). 80.924.459/0001-10, herein
represented in accordance with its By-Laws by its executive directors,
Messrs. Xxxxxxxxx Xxxxx Xxxxx Filho and Xxxxxxxx Xxxxxxxxxxx Xxxxx
Xxxxxxx;
NET RIO S.A a Brazilian joint stock company with principal office in
the city of Rio de Janeiro, state of Rio de Janeiro, at Rua Vilhena de
Moraes, N(0). 000, Xxxxx 00, Xxxxx 000, 0xx Xxxxx, Xxxxx xx Xxxxxx,
registered in the National Register of Corporate Entities (CNPJ) under
N(0). 28.029.775/0001-09, herein represented in accordance with its
By-Laws by its executive directors, Messrs. Xxxxxxxxx Xxxxx Xxxxx Filho
and Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
TV CABO DE CHAPECO LTDA., a Brazilian limited liability company with
principal office in the city of Chapeco, state of Santa Catarina, at
Xxxxxxx Xxxxx Xxxxx, X(0). 000X, Xxxxx 00, registered in the National
Register of Corporate Entities (CNPJ) under N(0). 00.847.530/0001-26,
herein represented in accordance with its By-Laws by Messrs. Xxxxxxxxx
Xxxxx Valim Filho and Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
TV VIDEO CABO DE BELO HORIZONTE S.A., a Brazilian joint stock company
with principal office in the city of Belo Horizonte, state of Minas
Gerais, at Avenida Renascenca, N(0). 505, registered in the National
Register of Corporate Entities (CNPJ) under N(0). 64.195.522/0001-79,
herein represented in accordance with its By-Laws by its executive
directors, Messrs. Xxxxxxxxx Xxxxx Valim Filho and Xxxxxxxx Xxxxxxxxxxx
Xxxxx Xxxxxxx;
NET RECIFE LTDA., a Brazilian limited liability company with principal
office in the city of Recife, state of Pernambuco, at Rua Xxxxxxxxx
Xxxxx N(0). 100, CEP 50070-490, Bairro da Ilha do Xxxxx, registered in
the National Register of Corporate
Entities (CNPJ) under N(0). 08.828.469/0001-25, herein represented in
accordance with its By-Laws by its executive directors, Messrs.
Xxxxxxxxx Xxxxx Valim Filho and Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET SAO PAULO LTDA., a Brazilian limited liability company with
principal office in the city and state of Sao Paulo, at Rua Verbo
Divino N(0). 1,356, ground floor, blocks 1 and 2, CEP 04719-002,
Chacara Xxxxx Xxxxxxx, Sao Paulo - SP, registered in the National
Register of Corporate Entities (CNPJ) under N(0). 65.697.161/0001-21,
herein represented in accordance with its By-Laws by its executive
directors, Messrs. Xxxxxxxxx Xxxxx Xxxxx Filho and Xxxxxxxx Xxxxxxxxxxx
Xxxxx Xxxxxxx;
NET CAMPINAS LTDA., a Brazilian limited liability company with
principal office in the city of Campinas, state of Sao Paulo, at Rua
Jasmim N(0). 610, CEP 13.807-520, Chacara Primavera, registered in the
National Register of Corporate Entities (CNPJ) under N(0).
61.698.510/0001-79, herein represented in accordance with its By-Laws
by its executive directors, Messrs. Xxxxxxxxx Xxxxx Valim Filho and
Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET INDAIATUBA LTDA., a Brazilian limited liability company with
principal office in the city of Indaiatuba, state of Sao Paulo, at Xxx
00 xx Xxxxx, X(0). 0,000/0,000, Xxxx Xxxxxxxx, CEP 13.330-050,
registered in the National Register of Corporate Entities (CNPJ) under
N(0). 58.393.695/0001-07, herein represented in accordance with its
By-Laws by its executive directors, Messrs. Xxxxxxxxx Xxxxx Xxxxx Filho
and Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET FRANCA LTDA., a Brazilian limited liability company with principal
office in the city of Franca, state of Sao Paulo, at Xxx Xxxxxx Xxxxx
Xxxxxxx N(0). 2,837, Jardim Samello, CEP 14405-135, registered in the
National Register of Corporate Entities (CNPJ) under N(0).
60.348.414/0001-38, herein represented in accordance with its By-Laws
by its executive directors, Messrs. Xxxxxxxxx Xxxxx Valim Filho and
Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET SUL COMUNICACOES LTDA., a Brazilian limited liability company with
principal office in the city of Porto Alegre, state of Rio Grande do
Sul, at Rua Silveiro N(0). 1,111, Morro Santa Xxxxxx, CEP 90850-000,
registered in the National Register of Corporate Entities (CNPJ) under
N(0). 73.676.512/0001-46, herein represented in accordance with its
By-Laws by its executive directors, Messrs. Xxxxxxxxx Xxxxx Xxxxx Filho
and Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
DR- EMPRESA DE DISTRIBUICAO E RECEPCAO DE TV LTDA., a Brazilian limited
liability company with principal office in the city of Porto Alegre,
state of Rio Grande do Sul, at Rua Silveiro N(0). 1,111, Morro Santa
Xxxxxx, CEP 90850-000, registered in the National Register of Corporate
Entities (CNPJ) under N(0). 93.088.342/0001-96, herein represented in
accordance with its By-Laws by its executive directors, Messrs.
Xxxxxxxxx Xxxxx Xxxxx Filho and Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET JOINVILLE LTDA., a Brazilian limited liability company with
principal office in
the city of Joinville, state of Santa Catarina, at Avenida Xxxxxxxx
Xxxxx N(0). 419, Bucaren, CEP 89202-300, registered in the National
Register of Corporate Entities (CNPJ) under N(0). 85.271.898/0001-95,
herein represented in accordance with its By-Laws by its executive
directors, Messrs. Xxxxxxxxx Xxxxx Valim Filho and Xxxxxxxx Xxxxxxxxxxx
Xxxxx Xxxxxxx;
NET FLORIANOPOLIS LTDA., a Brazilian limited liability company with
principal office in the city of Florianopolis, state of Santa Catarina,
at Xxxxxxx Xxx Xxxxxx X(0). 000, Xxxxxx, XXX 00000-000 registered in
the National Register of Corporate Entities (CNPJ) under N(0).
72.461.072/0001-47, herein represented in accordance with its By-Laws
by its executive directors, Messrs. Xxxxxxxxx Xxxxx Valim Filho and
Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET MARINGA LTDA., a Brazilian limited liability company with principal
office in the city of Maringa, state of Parana, at Xxxxxxx Xxxxxxx
X(0). 000, Xxxx 00, XXX 87013-330, registered in the National Register
of Corporate Entities (CNPJ) under N(0). 81.712.416/0001-34, herein
represented in accordance with its By-Laws by its executive directors,
Messrs. Xxxxxxxxx Xxxxx Xxxxx Filho and Xxxxxxxx Xxxxxxxxxxx Xxxxx
Xxxxxxx;
NET SAO XXXX DO RIO PRETO LTDA., a Brazilian limited liability company
with principal office in the city of Sao Xxxx do Rio Preto, state of
Sao Paulo, at Rua Lafaiete Xxxxxxx xx Xxxxxx N(0). 1,922, Boa Vista,
CEP 15025-510, registered in the National Register of Corporate
Entities (CNPJ) under N(0). 69.082.832/0001-09, herein represented in
accordance with its By-Laws by its executive directors, Messrs.
Xxxxxxxxx Xxxxx Valim Filho and Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET PIRACICABA LTDA., a Brazilian limited liability company with
principal office in the city of Piracicaba, state of Sao Paulo, at
Avenida Independencia N(0). 3,552, Alemaes, CEP 13416-230, registered
in the National Register of Corporate Entities (CNPJ) under N(0).
64.592.116/0001-40, herein represented in accordance with its By-Laws
by its executive directors, Messrs. Xxxxxxxxx Xxxxx Valim Filho and
Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET GOIANIA LTDA., a Brazilian limited liability company with principal
office in the city of Goiania, state of Goias, at Xxx 00, Xxxxxx j-15,
Lote 08, N(0). 970, Setor Marista, CEP 74000-000 registered in the
National Register of Corporate Entities (CNPJ) under N(0).
33.659.475/0001-43, herein represented in accordance with its By-Laws
by its executive directors, Messrs. Xxxxxxxxx Xxxxx Valim Filho and
Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET CAMPO GRANDE LTDA., a Brazilian limited liability company with
principal office in the city of Campo Grande, state of Mato Xxxxxx do
Sul, at Avenida Xxxxxx Xxxx N(0). 3,004, CEP 79002-075, Centro,
registered in the National Register of Corporate Entities (CNPJ) under
N(0). 24.615.965/0001-57, herein represented in accordance with its
By-Laws by its executive directors, Messrs. Xxxxxxxxx Xxxxx Xxxxx Filho
and Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET SOROCABA LTDA., a Brazilian limited liability company with
principal office in
the city of Sorocaba, State of Sao Paulo, at Avenida Xxxxxxx Xxxxxx
Xxxxxxx N(0). 1,074 and Xxx Xxxxx Xxxxxx X(0). 00, Xxxxxx Xxxxxxxx, CEP
18047-000, registered in the National Register of Corporate Entities
(CNPJ) under N(0). 64.637.903/0001-60, herein represented in accordance
with its By-Laws by its executive directors, Messrs. Xxxxxxxxx Xxxxx
Valim Filho and Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET SAO XXXXXX S.A., a Brazilian joint stock company with principal
office in the city of Sao Xxxxxx, state of Sao Paulo, at Avenida Xx.
Xxxxxx Xxxxxxx, N(0). 1,986, registered in the National Register of
Corporate Entities (CNPJ) under N(0). 57.724.759/0001-34, herein
represented in accordance with its By-Laws by its executive directors,
Messrs. Xxxxxxxxx Xxxxx Xxxxx Filho and Xxxxxxxx Xxxxxxxxxxx Xxxxx
Xxxxxxx;
HORIZONTE SUL COMUNICACOES LTDA., a Brazilian limited liability company
with principal office in the city of Porto Alegre, state of Rio Grande
do Sul, at Rua Silveiro, N(0). 1,111, part, registered in the National
Register of Corporate Entities (CNPJ) under N(0). 94.319.209/0001-66,
herein represented in accordance with its By-Laws by its executive
directors, Messrs. Xxxxxxxxx Xxxxx Valim Filho and Xxxxxxxx Xxxxxxxxxxx
Xxxxx Xxxxxxx;
NET PARANA COMUNICACOES LTDA., a Brazilian limited liability company
with principal office in the city of Curitiba, state of Parana, at Rua
Xxxxx Xxxxxxx Sobrinho, N(0). 557, Merces, registered in the National
Register of Corporate Entities (CNPJ) under N(0). 84.922.681/0001-35,
herein represented in accordance with its By-Laws by its executive
directors, Messrs. Xxxxxxxxx Xxxxx Xxxxx Filho and Xxxxxxxx Xxxxxxxxxxx
Xxxxx Xxxxxxx;
NET CURITIBA LTDA., a Brazilian limited liability company with
principal office in the city of Curitiba, state of Parana, at Rua
Mamore N(0). 340, registered in the National Register of Corporate
Entities (CNPJ) under N(0). 82.342.833/0001-03, herein represented in
accordance with its By-Laws by its executive directors, Messrs.
Xxxxxxxxx Xxxxx Valim Filho and Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET ARAPONGAS LTDA., a Brazilian limited liability company with
principal office in the city of Arapongas, state of Parana, at Rua
Marabu, N(0). 542, registered in the National Register of Corporate
Entities (CNPJ) under N(0). 81.897.118/0001-66, herein represented in
accordance with its By-Laws by its executive directors, Messrs.
Xxxxxxxxx Xxxxx Valim Filho and Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET RIBEIRAO PRETO S.A., a Brazilian limited liability company with
principal office in the city of Ribeirao Preto, state of Sao Paulo, at
Avenida Nove de Julho, N(0). 1,266, registered in the National Register
of Corporate Entities (CNPJ) under N(0). 64.807.456/0001-40, herein
represented in accordance with its By-Laws by its executive directors,
Messrs. Xxxxxxxxx Xxxxx Valim Filho and Xxxxxxxx Xxxxxxxxxxx Xxxxx
Xxxxxxx;
NET BAURU LTDA., a Brazilian limited liability company with principal
office in the city of Bauru, state of Sao Paulo, at Xxxxxxx Xxxxx xx
Xxxxxx, X(0). 466, registered
in the National Register of Corporate Entities (CNPJ) under N(0).
64.083.561/0001-84, herein represented in accordance with its By-Laws
by its executive directors, Messrs. Xxxxxxxxx Xxxxx Valim Filho and
Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET ANAPOLIS LTDA., a Brazilian limited liability company with
principal office in the city of Anapolis, state of Goias, at Xxx Xxxxx,
Xx. 000, registered in the National Register of Corporate Entities
(CNPJ) under N(0). 33.584.277/0001-68, herein represented in accordance
with its By-Laws by its executive directors, Messrs. Xxxxxxxxx Xxxxx
Valim Filho and Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
and
REYC COMERCIO E PARTICIPACOES LTDA., a Brazilian limited liability
company with principal office in the city of Sao Xxxx, state of Santa
Catarina, at Xxx Xxxxxxxxx Xxxx Xxxxxxxx, X(0). 101, registered in the
National Register of Corporate Entities (CNPJ) under N(0).
95.853.263/0001-50, herein represented in accordance with its By-Laws
by its executive directors, Messrs. Xxxxxxxxx Xxxxx Valim Filho and
Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx.
ANNEX TO THE DEBT CONFESSION
INSTRUMENT
COPY OF INDENTURE
INTERCREDITOR AGREEMENT
RECEIVABLES AGREEMENT WITH FORECLOSURE CLAUSE - NET SAO PAULO LTDA.,
RECEIVABLES AGREEMENT WITH FORECLOSURE CLAUSE - NET RIO S.A,
SHARE PLEDGE AGREEMENT WITH AMICABLE SALE CLAUSE AND OTHER COVENANTS
QUOTA PLEDGE AGREEMENT WITH AMICABLE SALE CLAUSE AND OTHER COVENANTS
ASSET PLEDGE AGREEMENT WITH AMICABLE SALE CLAUSE AND OTHER COVENANTS
EXHIBIT B
Indenture
Exhibit C
(Free Translation)
LOAN AGREEMENT
This Loan Agreement ("Agreement") shall be executed, in accordance with the
terms of the law, by the following parties (the "Parties"):
(a) [ ], a financial institution duly organized and existing in
accordance with the laws of [ ], headquartered at [ ], represented by
[ ] (the "Creditor Institution"); and,
(b) NET SUL COMUNICACOES LTDA., a limited Brazilian company, headquartered
in the City of Porto Alegre, State of Rio Grande do sul, at Rua Silveiro, No.
I, III, Morro Santa Xxxxxx, registered in the National Register of Corporate
Entities (CNPJ) under N(degrees). 73.676.512/0001-46 and represented herein in
accordance with its By-Laws (the "Net Company"); and
(c) the companies listed and qualified in "Annex 1" of this Agreement, in
their capacity as guarantors and principal players (the "Guarantors", and
together with the Net Company, the "Net Group Companies");
have mutually agreed as follows:
W H E R E A S
(1) certain Net Group companies were originally debtors in accordance with a
series of loans made in Brazil and abroad (the "Original Loans"), which did not
comply with the terms of their respective instruments;
(2) the Net Group Companies, jointly represented by Net Servicos de
Comunicacao S.A. "Net Servicos", a direct and indirect holding company for the
capital stock of the Net Group Companies, negotiated with their creditors
("Creditors") a restructuring plan for the indebtedness of the Net Group
Companies, which formed the object of a material fact published by Net Servicos
on June 28, 2004 (the "Restructuring Plan");
(3) as part of the Restructuring Plan, the Creditor Institution and the Net
Group Companies provided that the Creditor Institution has the obligation of
refinancing part of the amount due by the Net Group Companies through a new loan
in Brazilian reais, within Brazil, to be granted on the present date by the
Creditor Institution (the "New Loan");
(4) in addition to this Agreement and to the other instruments which amended
or replaced the Original Loans, other documents were executed for the purpose of
formalizing the Restructuring Plan, including the "Intercreditor Agreement"
signed with Banco Itau S.A., in its capacity as Collateral Agent (a copy of
which forms a part of this Agreement as
"Annex 2") and, on [ ], the following pledge agreements (the "Pledge
Agreements"):
(a) the Receivables Pledge Agreement with Foreclosure Clause executed by
Net Servicos, Net Sao Paulo Ltda., the Creditors, with the last of these
represented by the Collateral Agent and the Centralizing Bank identified in the
same agreement (a copy of which forms a part of this Agreement as "Annex 3");
(b) the Receivables Pledge Agreement with Foreclosure Clause executed by
Net Servicos, Net Rio S.A, the Creditors, with the last of these represented by
the Collateral Agent and the Centralizing Bank identified in the same agreement
(a copy of which forms a part of this Agreement as "Annex 4");
(c) the Share Pledge Agreement with Amicable Sale Clause and Other
Covenants executed by the Net Group companies and the Creditors, with the latter
represented by the Collateral Agent (a copy of which forms a part of this
Agreement as "Annex 5");
(d) the Quota Pledge Agreement with Amicable Sale Clause and Other
Covenants executed by the Net Group Companies and the Creditors, with the latter
represented by the Collateral Agent (a copy of which forms a part of this
Agreement as "Annex 6"); and
(e) the Asset Pledge Agreement with Amicable Sale Clause and Other
Covenants executed by the Net Group Companies and the Creditors, with the latter
represented by the Collateral Agent (a copy of which forms a part of this
Agreement as "Annex 7");
(5) the terms with initials in capital letters mentioned herein, unless
otherwise defined herein, shall have the same definition as that attributed to
them in the Glossary, which forms a part of this Agreement as "Annex 8";
(6) subject to the terms and observing the conditions established herein, the
Creditor Institution wishes to grant a New Loan to the Net Company for a total
amount of R$ [ ].
GIVEN THE ABOVE, and considering the mutual covenants in this instrument and
other firm and valid mutual obligations, the existence and sufficiency of which
are recognized herein, the Parties hereby agree on the following:
CLAUSE 1 THE LOAN
The Creditor Institution hereby grants to the Net Company and the Net Company
shall receive from the Creditor Institution a loan for a total amount of
R$ [ ] (the "Principal"),
which is credited on this date via electronic transfer (XXX) to current account
N(degrees). [ ], which the Net Company holds at branch [ ] of the bank [ ].
FIRST PARAGRAPH The total of the Principal, contemplated in this Agreement
is lent by the Creditor Institution to the Net Company for the purposes of
refinancing certain financial liabilities and financial cash needs of debtor.
CLAUSE 2 OBLIGATION TO PAY BY NET GROUP COMPANIES
The Guarantors expressly agree to guarantee the payments referring to this
Agreement, namely, the Principal, interest and other charges and values
established in this Agreement and its annexes, and declare expressly that they
are aware of the present loan and recognize its liquidity, certainty and
enforceability, assuming hereby, jointly and severally, and without any benefit
of order or any other preference, the irrevocable obligation to pay the
interest, the Principal and other charges contemplated in this Agreement and its
annexes, in accordance with the terms and deadlines established in this
Agreement.
FIRST PARAGRAPH The payments by the Net Group Companies for the
liquidation of the obligations contemplated herein, under penalty of breach of
contract, shall be made by electronic transfer (XXX), to the credit of current
account N(degrees). [ ], branch [ ] at [ ] or, through prior notice of at
least 5 (five) business days sent by the Creditor Institution, in another form
defined by the same Creditor Institution.
SECOND PARAGRAPH The payment of each of the installments under the terms
and by the due deadlines shall be considered formalized upon the effective
receipt in the account of the amount indicated in the First Paragraph of this
clause.
THIRD PARAGRAPH Proof of execution of electronic transfer (XXX) to the
current account indicated in the First Paragraph of this Clause, of the amounts
due by the Net Group Companies to the Creditor Institution shall be considered
by the parties to this Agreement as proof of settlement of the Net Group
Companies' obligations with regard to the payment of such amounts.
CLAUSE 3 INTEREST
The Principal amount shall be increased by remuneratory interest ("Interest")
corresponding to, (a) the CDI rate plus a spread or premium of 2% (two percent)
per year between this date and December 14, 2005 and, (b) the CDI rate plus a
spread or premium of 3% (three percent) per year from December 15, 2005
(inclusive) until the final payment of the same amount.
The payment of the Interest in accordance with this Clause shall be made by the
Net Company to the Creditor Institution on a quarterly basis, every March 15,
June 15, September 15 and December 15, from the present date onwards, always
with regard to the immediately preceding period; including the starting date and
excluding the payment date.
FIRST PARAGRAPH For the purposes of this Agreement, "CDI" shall mean an
interest rate, expressed as an annual percentage, corresponding to the result of
compounding on a daily basis, calculated for a year of 252 business days, of the
interest rate of interbank market certificates of deposit (CDI) for one business
day, published by the Central de Custodia e de Liquidacao Financeira de Titulos
(CETIP) [Securities Custody and Settlement Center] under the term "DI rate -
Over Extragrupo", or any other reference rate of the Brazilian Financial System,
which may replace it. The spread or premium shall be calculated on the basis of
a year of 252 business days.
SECOND PARAGRAPH In the event of the temporary unavailability of the CDI
rate at the time of payment of any monetary obligation resulting from the
determination of Interest, the same daily rate produced by the last known CDI
rate shall be used as a replacement until the calculation date, with no
financial compensation being due either from the Net Group Companies or from the
Creditor Institution, as and when the respective DI rate is subsequently
published.
THIRD PARAGRAPH In the absence of the calculation and/or publication of
the CDI rate for a period longer than 15 (fifteen) consecutive business days
after the Date of Effectiveness, or, additionally, in the event of its
extinction or inapplicability due to legal imposition, the CDI rate shall be
replaced by the average rate of daily fundings, backed by federal securities and
determined by the Sistema Especial de Liquidacao e Custodia [Special Liquidation
and Custody System] ("Selic Rate"), or, in its absence, the reference rate of
the Brazilian Financial System that may replace the Selic Rate ("Replacement
Rate").
FOURTH PARAGRAPH In the event that there is no Replacement Rate, the Net
Group Companies and the Creditor Institution shall define, in 5 (five) business
day, jointly and by common agreement, in compliance with the applicable
legislation, a single parameter to be used in the remuneration of all the
respective credits, which shall be proposed by the Net Company. Until this
parameter has been determined, the same known daily rate for the last CDI rate
or Selic rate, as per the case, shall be used to calculate any obligations
established in this Clause.
FIFTH PARAGRAPH If the Replacement Rate is published before the definition
of the new parameter, the Replacement Rate shall be used to calculate the
Interest starting from the date of its publication.
SIXTH PARAGRAPH In the event that the new parameter is not defined by
common agreement by the Net Company and the Creditor Institution within the
period determined above, the parameter used shall be the average cost for
funding in the interbank market for one day interbank transactions, as effected
by the 5 (five) largest private financial institutions, in accordance with the
ranking published by the Central Bank of Brazil.
CLAUSE 4 PAYMENT AND MATURITY OF THE PRINCIPAL AMOUNT
(A) 70% (seventy percent) of the Principal amount shall be paid by the Net
Company to the Creditor Institution in accordance with the following fixed
schedule:
% OF PRINCIPAL AMOUNT ON THE DATE OF
EFFECTIVENESS TOTAL TO BE AMORTIZED
1.25% on March 15, 2006 total of 5% in 2006
1.25% on June 15, 2006
1.25% on September 15, 2006
1.25% on December 15, 2006
3.75% on March 15, 2007 total of 15% in 2007
3.75% on June 15, 2007
3.75% on September 15, 2007
3.75% on December 15, 2007
6.25% on March 15, 2008 total of 25% in 2008
6.25% on June 15, 2008
6.25% on September, 2008
6.25% on December 15, 2008
6.25% on March 15, 2009 total of 25% in 2009
6.25% on June 15, 2009
6.25% on September 15, 2009
6.25% on December 15, 2009
The percentage of amortization of the principal amount specified in the table
above shall be calculated on the basis of the Principal amount on the date of
this Agreement.
(B) The remaining 30% (thirty percent) of the Principal amount shall be
amortized as established in the table below, on the dates indicated in column "A
- Original Payment Date".
If, however, (i) the Accumulated DI Factor until the last day of the
previous quarter, or (ii) the daily average of the Exchange Rate during the
second week prior to the Original Payment Date (set forth in column A), is equal
to or higher than the limits established in column "B - Conditions" of the table
below, the payment of the principal specified in column "A - Original Payment
Date" shall be paid on the "Alternative Payment Date" specified in column C
below:
% OF THE
PRINCIPAL A - ORIGINAL B - CONDITIONS C - ALTERNATIVE
AMOUNT PAYMENT DATE ACCUMULATED DI FACTOR EXCHANGE RATE PAYMENT DATE
1.25% Mar 15, 2006 1.417 on Dec 31, 2005 R$4,00/US$ Mar 15, 2010
1.25% Jun 15, 2006 1.479 on Mar 31, 2006 R$4.00/US$ Mar 15, 2010
1.25% Sep 15, 2006 1.543 on Jun 30, 2006 R$4.50/US$ Mar 15, 2010
1.25% Dec 15, 2006 1.610 on Sep 30, 2006 R$4.50/US$ Mar 15, 2010
2.50% Mar 15, 2007 1.680 on Dec 31, 2006 R$4.50/US$ Mar 15, 2010
2.50% Jun 15, 2007 1.767 on Mar 31, 2007 R$4.50/US$ Jun 15, 2010
2.50% Sep 15, 2007 1.859 on Jun 30, 2007 R$4.50/US$ Jun 15, 2010
2.50% Dec 15, 2007 1.955 on Sep 30, 2007 R$4.50/US$ Jun 15, 2010
2.50% Mar 15, 2008 2.057 on Dec 31, 2007 R$4.70/US$ Sep 15, 2010
2.50% Jun 15, 2008 2.164 on Mar 31, 2008 R$4,70/US$ Sep 15, 2010
2.50% Sep 15, 2008 2.277 on Jun 30, 2008 R$4.70/US$ Sep 15, 2010
2.50% Dec 15, 2008 2.396 on Sep 30, 2008 R$4.70/US$ Dec 15, 2010
1.25% Mar 15, 2009 2.521 on Dec 31, 2008 R$4.90/US$ Dec 15, 2010
1.25% Jun 15, 2009 2.674 on Mar 31, 2009 R$4.90/US$ Dec 15, 2010
1.25% Sep 15, 2009 2.835 on Jun 30, 2009 R$4.90/US$ Dec 15, 2010
1.25% Dec 15, 2009 3.007 on Sep 30, 2009 R$4.90/US$ Dec 15. 2010
The percentage of the Principal amount specified in the table above shall be
calculated on the basis of the value of the Principal amount on the date of this
Agreement.
FIRST PARAGRAPH: For purposes of this Clause, "Exchange Rate" shall mean,
for any day, the exchange rate published by the Central Bank of Brazil in its
SISBACEN System (or any system that may replace it) as the PTAX 800 US dollar
exchange rate, Option 5 (sale rate), currency 220, on the immediately preceding
business day in Brazil, or in its absence, the rate that replaces it.
SECOND PARAGRAPH: For purposes of this Clause, "Accumulated DI factor"
shall mean, for any calculation date, the effective interest rate for the period
from January 01, 2004 until the calculation date, published by the Securities
Custody and Settlement Center -- CETIP.
CLAUSE 5 EARLY OPTIONAL AMORTIZATION OF THE DEBT
The Net Group Companies may anticipate, in compliance with the terms and
conditions of the Intercreditor Agreement, on a pro rata basis, the full or
partial amortization of the debt forming the object of this Agreement, which
does not imply payment of any fine, penalty or premium by the Net Group
Companies. Such amortizations shall be subject to Interest due at the time,
calculated pro rata temporis. The early amortization shall occur always
considering the reverse order of maturity of the Original Payment Dates or
Alternative Payment Dates, as per the case.
CLAUSE 6 EXTENSION OF DEADLINES
Deadlines for the payment of any obligation contemplated in or arising from this
Agreement shall be considered to be automatically extended until the first
subsequent business day, without any increase in interest or any other overdue
charge to the values to be paid, whenever the payment date coincides with a
national holiday, a Saturday or Sunday or a bank holiday in the city of Sao
Paulo.
CLAUSE 7 LATE PAYMENT
In the event of late payment of any installment in accordance with the terms of
Clauses 2, 3 and 4 of this Agreement, the amount in arrears shall be increased
by an irreducible late payment penalty of 2% (two percent) on the same amount.
The fine established in this Clause is not compensatory in character and its
payment shall not prevent the Creditor Institution from claiming the due
indemnity for losses and damages arising from failure to comply with any
obligations assumed in this Agreement.
FIRST PARAGRAPH In addition to the late payment fine mentioned in the caput, the
due and unpaid amount since the day of default until the day of effective
payment of the corresponding values shall be subject, in addition to the
interest rate indicated in Clause 2, to the overdue interest rate of 12%,
calculated pro rata die.
CLAUSE 8 GUARANTEES
The Net Group Companies declare that they are aware that the amounts due by
force of this Agreement are guaranteed by the assets pledged in accordance with
the terms of the Intercreditor Agreement and the respective pledge agreements
listed in the Preamble section items (5) (a), (b), (c), (d) and (e), which shall
be enforceable in accordance with their terms and conditions. The Creditor
Institution declares that it is aware that the foreclosure of such guarantees
provided by the Net Group Companies, contemplated in the Pledge Agreements
listed in the Preamble section items (5) (a), (b), (c), (d) and (e) may only be
realized in accordance with the terms and conditions of the Intercreditor
Agreement and in compliance with the terms of the Pledge Agreements.
FIRST PARAGRAPH The Parties agree that the obligations of the Net Group
Companies arising from this Agreement are guaranteed by the Pledge Agreements,
and therefore, the Parties undertake to sign, on the present date, the Terms of
Adhesion attached to this Agreement as "Annex 12", for the purposes of the
adhesion of the Creditor Institution to the Pledge Agreements and Intercreditor
Agreement. The Net Company undertakes to arrange the registration of the Annex
in the registries of titles and documents and property registries where the
Pledge Agreements are registered within at most 10 (ten) business days. In the
event that the Net Group Companies fail to make the registrations mentioned
above, the Guarantee Agent shall be responsible for carrying out the same
registration, with the costs incurred being the responsibility of the Net Group
Companies, and the same Net Group Companies being obliged to pay to the Special
Entering Creditor a non-compensating monetary fine of R$100,000.00 (one hundred
thousand Brazilian reais) per day, from the 11th (eleventh) day following the
present date until the effective registration of this Terms of Adhesion, without
affecting any damages or losses that may be incurred by the Special Entering
Creditor. It is hereby defined that the same fine shall not be applied in cases
expressly defined as exceptions with regard to the fines established in the
terms of the Pledge Agreements.
SECOND PARAGRAPH The Net Group Companies sign this Agreement in their
capacity as guarantors and principal payers, jointly responsible for compliance
with all the obligations assumed herein by the Net Company, with express waiver
of benefit of order and of the benefits mentioned in articles 827, 829, 830,
834, 835, 837, 838 and 839 of the Brazilian Civil Code and Article 595 of the
Civil Procedure Code, ensuring faithful compliance with all the obligations
assumed by the Net Company in accordance with the terms of this Agreement.
THIRD PARAGRAPH the Net Company shall issue, on this date, in favor of the
Creditor Institution, as guarantee of the payment of the Principal amount and
other applicable charges, a Promissory Note for the total Principal amount,
substantially identical to the model that forms a part of this Agreement as
"Annex 9", which shall be guaranteed by the Net Group Companies and linked to
this Agreement.
FOURTH PARAGRAPH The deadline for presentation for payment of the
Promissory Note, issued in accordance with the terms of this Agreement, shall be
12 (twelve) years from its date of issue, thereby extending the presentation
period covered by Article 34 of the Uniform Geneva Law and Article 21 of Decree
2,044, of December 31, 1908.
CLAUSE 9 OBLIGATIONS OF NET GROUP COMPANIES
From this date until the date on which the Principal has been fully and
irrefutably paid, the Net Group Companies undertake to comply with the
obligations listed below. The references and obligations attributed to Net
Servicos shall be considered obligations and references for all Net Group
Companies, jointly and severally and without the benefit of order.
9.1 UNSCHEDULED COMPULSORY AMORTIZATION
9.1.1. Net Servicos undertakes, in accordance with the terms and conditions of
the Intercreditor Agreement, to anticipate partially or fully, on a pro rata
basis, the amortization of the Principal, which shall not imply payment of any
penalty or premium by the Net Company, in the events described in items (I) and
(V) below. Such amortizations shall be accompanied by Remuneratory Interest due
at the time and calculated pro rata temporis. The Unscheduled Compulsory
Amortization shall always take account of the reverse order of maturity of the
installments of the Principal value.
(I) EXCESS CASH FLOW
On June 15, 2006 and on June 15, for each successive year, Net Servicos shall
amortize the Principal amount equal to the product (i) of the Prepayment
Percentage (PPP) multiplied by (ii) the amount of the Excess Cash Flow
Prepayment Amount of the previous fiscal year, if any.
(II) PREPAYMENT OF SENIOR SECURED INDEBTEDNESS
At most 5 (five) business days before the voluntary prepayment, voluntary
redemption, repurchase or voluntary purchase of any stake in the Senior Secured
Indebtedness or any other Indebtedness of the Net Servicos in existence on the
date of signing of this Agreement, Net Servicos shall notify the Creditor
Institution with regard to the prepayment of the Principal amount equal to the
product of i) the Voluntary Prepayment Percentage multiplied by (ii) the
principal amount of such prepayment, redemption, repurchase or purchase.
(III) NEW DEBT
Within at most 5 (five) business days of the date on which Net Servicos incurs
new Debts (other than Permitted Indebtedness, except in the case of Indebtedness
for Refinancing, incurred for the first time by Net Servicos with regard to the
Senior Secured Indebtedness), Net Servicos shall notify the Creditor Institution
with regard to the prepayment of the Principal amount equal to the product of
the i) Prepayment Percentage and (ii) the Net Proceeds of the Indebtedness
incurred or issued by Net Servicos and its Restricted Subsidiaries.
(IV) ISSUE OF SHARES
(a) Within at most 5 (five) business days counting from effective receipt
by Net Servicos of the proceeds of the full payment or sale of all the shares
issued by Net Servicos for the purposes of implementing the Restructuring
("Issue of Restructuring Shares"), and if the average issue price of these
shares is higher than R$ 0.35 (thirty-five cents) per share, Net Servicos shall
notify the Creditor Institution with regard to the prepayment of the Principal
amount for an amount equivalent to the product of (i) the Prepayment Percentage
and (ii) the Excess Proceeds of the Issue of Restructuring Shares.
(b) Within a maximum of 5 (five) business days counting from the issue of
any Equity Interest by Net Servicos (except for the Issue of Restructuring
Shares), Net Servicos shall notify the Creditor Institution with regard to the
prepayment of the Principal Amount equal to the product of (i) 70% (seventy
percent) and (ii) Prepayment Percentage applicable to the Net Proceeds resulting
from the issue of an Equity Interest by Net Servicos (except for the Issue of
Restructuring Shares). If, on the date immediately preceding the date of issue
of the Equity Interest, the cash and the Cash equivalents of Net Servicos and
its Restricted Subsidiaries are lower than the Minimum Cash Balance, the Net
Proceeds arising from the issue of an Equity Interest shall be considered as
having been reduced by an amount equivalent to the difference between (i) the
Minimum Cash Balance and (ii) the cash and Cash Equivalents of Net Servicos and
its Restricted Subsidiaries on the same date.
(V) SALE OF ASSETS
Net Servicos shall not carry out nor shall it permit its Restricted Subsidiaries
to carry out a Sale of Assets, except where:
(i) Net Servicos or a Restricted Subsidiary, as per the case, receives payment
which, on the date of Sale of the Assets is at least equivalent to the Fair
Market Value of the assets in question, or the Equity Interest issued or sold,
disposed of, assigned or otherwise transferred; and
(ii) at least 80% (eighty per cent) of the payment received by Net Servicos or
any one of its Restricted Subsidiaries is in cash in Brazilian Currency. For the
purposes of this Clause, each one of the items below shall be considered as a
cash payment:
(a) Cash Equivalents;
(b) Titles or securities received by Net Servicos or any of its
Restricted Subsidiaries that are converted into cash by Net Servicos
or any of its Restricted Subsidiaries immediately or within at most
30 (thirty) days.
Within 60 (sixty) days of any Asset Sale, Net Servicos shall notify the Creditor
Institution with regard to the prepayment of the Principal for an amount
equivalent to the product of i) the Prepayment Percentage (PPP) multiplied by
(ii) the lesser of (a) 80% (eighty per cent) of the Net Proceeds from the Asset
Sale and (b) the greater of (I) 50% (fifty per cent) of the Net Proceeds from
the Asset Sale and (II) the same Net Proceeds from the Asset Sale less any
portion/installment to be invested in Capital Expenditures. For purposes of this
Clause and of Clause 9.14, a maximum of 50% (fifty percent) of the Net Proceeds
of the respective Sale of Assets Sale in Capital Expenditures.
9.2 PREPAYMENT NOTIFICATION
9.2.1. Any notification to be sent by Net Servicos to the Creditor Institution
with regard to prepayment to be made in accordance with Clause 9.1 of this
Agreement must specify the date of the relevant prepayment. Notwithstanding the
above, the prepayment date may not occur less than 5 (five) business days or
more than 30 (thirty) business days after the date of delivery of the
corresponding notice to the Creditor Institution, except as contemplated under
Clause 9.1.1 IV (a), on which Net Servicos may carry out the prepayment
regardless of any notice.
9.3. COMPULSORY AMORTIZATION DUE TO A CHANGE IN CONTROL
9.3.1. In the event of change in the Control of Net Servicos, as defined herein,
Net Servicos undertakes to amortize the entire remaining Principal with regard
to this Agreement at the unilateral request of the Creditor Institution,
provided that the same party manifests its interest in amortizing part or the
whole of the Principal that it holds (at the discretion of the same Creditor
Institution), for a sum equal to the same corrected Principal amount, plus
applicable Interest until the payment date, calculated pro rata temporis.
9.3.1.1. For the purposes of Clause 9.3.1. of this Agreement, the transfer of
Control by Net Servicos to: (i) Globo Communicacoes e Participacoes S.A. and/or
its Affiliates; or (ii) Telefonos de Mexico, S.A. and/or its Affiliates shall
not be considered to be an event of change in Control.
9.3.2. For purposes of the above, Net Servicos shall notify the Creditor
Institution of the occurrence of a Change in Control within at most 5 (five)
business days calculated from the date of the same Change in Control.
9.3.3. In the event the Creditor Institution that wishes to amortize the
Principal amount due to it, it shall express this interest to Net Servicos in
writing, within 15 (fifteen) calendar days of the receipt of notice from the
same Net Servicos.
9.3.4. Net Servicos shall amortize the Principal amount within 30 (thirty)
running days from the date of receipt of the notice, in writing, from the
Creditor Institution, informing its interest in amortizing the Principal amount.
9.3.5. Net Servicos shall not be obliged to pay the amortization mentioned in
Clause 9.3.1. in the event that a third party does so, on behalf and by order of
Net Servicos, in accordance with the terms and conditions set forth in Clauses
9.3.1 to 9.3.4 above. In this event, the same third party shall subrogate to
itself the rights relative to the credits that it amortizes.
9.4. PLACE AND FORM OF PAYMENT
9.4.1. The payments to which the Creditor Institution is entitled by force of
the provisions of this Agreement shall be made in the same location and in the
same form as the payments of the Principal amount and interest established
above.
9.5. EXTENSION OF DEADLINES
9.5.1. Deadlines for the payment of any obligation established in or arising
from this Agreement shall be considered to be automatically extended until the
first subsequent business day, with the addition of the respective interest but
without addition of any late payment penalty on the amounts to be paid, whenever
the payment date coincides with a national holiday, a Saturday or Sunday or bank
holidays in the city of Sao Paulo.
9.6. MAINTENANCE OF NET SERVICOS AND ITS RESTRICTED SUBSIDIARIES
0.0.0.Xxx Servicos undertakes to maintain and to ensure that its Restricted
Subsidiaries maintain (i) their validly existing companies with all the
registrations necessary and (ii) the rights, licenses, concessions, privileges,
ownership titles and franchises necessary to the normal conducting of their
respective business, except if the failure to maintain such licenses or
concessions does not affect in any way the Net Group Companies' capacity to
comply with the obligations assumed herein and does not impact Creditor
Institution's risk with respect to receipt of the payment obligations from the
Net Group Companies. This limitation shall not prohibit the events expressly
established in this Agreement regarding (a) the sale, disposal or transfer of
the Restricted Subsidiaries or of any of their assets, in accordance with the
terms of this Agreement, (b) the liquidation, dissolution or division of the
Restricted Subsidiaries listed in "Annex 11" to this Agreement, provided that in
the event of the same division, the resulting entities continue to be held by
Net Servicos or by the Restricted Subsidiaries, and (c) the incorporation or
merger between the Restricted Subsidiaries.
9.6.2. Net Servicos undertakes to maintain and to ensure that its Restricted
Subsidiaries procure and maintain all the authorizations and licenses necessary
for compliance with all the obligations contemplated herein and in the Pledge
Agreements.
9.7. MAINTENANCE OF ASSETS
9.7.1. Net Servicos undertakes to maintain and ensure that its Restricted
Subsidiaries maintain the assets necessary for the conduct of their business in
good use, excepting depreciation and normal wear and tear of the assets in
question, unless the failure to maintain them in good conditions of use does not
affect in any way the Net Group Companies' capacity to comply with the
obligations assumed herein and does not affect the risk to the Creditor
Institution in receiving payment obligations from Net Group Companies.
9.8. MAINTENANCE OF INSURANCE
9.8.1. Net Servicos undertakes to maintain and ensure that its Restricted
Subsidiaries maintain their main assets insured in accordance with the current
market practices for the business area of Net Servicos.
9.9 RESTRICTION ON NEW LIENS
9.9.1. Net Servicos may not create, incur or assume any lien (other than
Permitted Liens) on any of their goods and assets, or any other resource arising
from these goods and assets, in order to guarantee any Indebtedness, unless the
same Lien is intended to guarantee the Principal amount in the same proportion,
prior or concomitantly with the same
Indebtedness, with Net Servicos undertaking to ensure that its Restricted
Subsidiaries respect the prohibition contained herein.
9.10. RESTRICTION ON NEW INDEBTEDNESS
9.10.1. Net Servicos shall maintain on the last day of each fiscal quarter as
indicated below a Consolidated Interest Expense Ratio not lower than the value
indicated below for the respective date:
PERIOD INDEX
-------------------------- -----
Oct 31,2004 - Dec 31, 2004 1.10
Jan 1, 2005 - Dec 31, 2005 1.25
Jan 1, 2006 - Dec 31, 2006 1.35
Jan 1, 2007 - Dec 31, 2007 1.90
Jan 1, 2008 - Dec 31, 2008 2.70
From Jan 1, 2009 4.80
9.10.2. Net Servicos shall maintain, on the last day of each fiscal quarter, as
indicated below an Consolidated Leverage Index not higher than that indicated
below for the respective date:
PERIOD INDEX
-------------------------- -----
Oct 31,2004 - Dec 31, 2004 3.2
Jan 1, 2005 - Dec 31, 2005 3.0
Jan 1, 2006 - Dec 31, 2006 2.5
Jan 1, 2007 - Dec 31, 2007 2.0
From Jan 1, 2008 1.5
9.10.3. Net Servicos may not contract directly or indirectly a new Debt, and
undertakes to ensure that its Restricted Subsidiaries respect the prohibition
contained herein. However, Net Servicos and its Restricted Subsidiaries may
contract a new Debt, on the date of incurring the same Debt if:
(a) the "Financial Coverage Index" is higher than the index indicated
below for the respective date:
PERIOD INDEX
-------------------------- -----
Oct 31,2004 - Dec 31, 2004 1.10
Jan 1, 2005 - Dec 31, 2005 1.25
Jan 1, 2006 - Dec 31, 2006 1.35
Jan 1, 2007 - Dec 31, 2007 1.90
Jan 1, 2008 - Dec 31, 2008 2.70
Jan 1, 2009 and thereon 4.80
and
(b) the "Consolidate Leverage Index" is lower than the index indicated on
the respective date:
PERIOD INDEX
-------------------------- -----
Oct 31,2004 - Dec 31, 2004 3.2
Jan 1, 2005 - Dec 31, 2005 3.0
Jan 1, 2006 - Dec 31, 2006 2.5
Jan 1, 2007 - Dec 31, 2007 2.0
From Jan 1, 2008 1.5
9.10.4. Notwithstanding the above, Net Servicos and its Restricted Subsidiaries
may incur the following Debts at any moment (collectively defined as "Permitted
Debts"):
(i) (a) Secured Senior Debts, (b) any existing Debt on the date of
execution of this Agreement, and; (c) any Debt for Refinancing of any of the
obligations described in sub-items (a) and (b);
(ii) Indebtedness by Net Servicos in connection with any of their
Restricted Subsidiaries, as well as of any of the Restricted Subsidiaries with
Net Servicos or with any other Restricted Subsidiary;
(iii) Debt resulting from any Encumbrance created or whose existence is
permitted in accordance with the provisions of Clause 9.9 above;
(iv) Debt with respect to (a) letters of credit or other similar
instruments and obligations issued with respect to transactions in the normal
course of their business; (b) bail, insurance guarantee and other similar
instruments in the normal course of their business or (c) Hedge transactions
made in the normal course of their businesses, for non-speculative purposes;
(v) Purchase Obligations, capitalized commercial leases and any
Indebtedness intended for Refinancing related to them, whose total aggregate
principal amount due is not, at any time, higher than the Fair Market Value on
the date of acquisition of the assets acquired in connection with the same
contracts and whose principal aggregate amount outstanding does not exceed, at
any time, R$30,000,000.00 (thirty million Brazilian reais), corrected by the
IGP-M Adjustment on January 1 of each fiscal year subsequent to January 1, 2004;
(vi) Debt resulting from checks, bills of exchange or other similar
instruments issued or drawn without the corresponding provision of funds,
provided that this Debt is extinguished within 5 (five) business days of its
occurrence;
(vii) Indebtedness by any Restricted Subsidiary existing on the date on
which this
Restricted Subsidiary has been acquired by Net Servicos, or Indebtedness by any
other Company assumed by the Restricted Subsidiary as a result of the eventual
acquisition of assets held by such company by the Restricted Subsidiary (in any
case other than Indebtedness incurred for such acquisition), as well as any
Refinancing Indebtedness related to such transactions, provided that Net
Servicos is qualified to incur at least an amount in Brazilian reais equivalent
to $1.00 (one U.S. dollar) of additional Indebtedness, in accordance with the
terms of Clause 9.10., after the same acquisition has been made;
(viii) Indebtedness, whose principal aggregate amount at no time exceeds
R$10,000,000.00 (ten million Brazilian reais) corrected by the IGP-M Adjustment
on January 1 of each fiscal year subsequent to January 1, 2004; and
(ix) guarantees of the Principal amount and guarantees for the Debts not
prohibited by this Agreement.
9.10.5. For the purposes of compliance with this Clause, as well as in order to
determine the principal outstanding amount of any Indebtedness incurred in
accordance with Clause 9.10.3:
(a) any obligation by the principal debtor with regard to the Indebtedness
(or by any third party, which could have incurred such Debt in accordance with
the terms of Clause 9.10.3.), arising from any guarantee, lien or surety letter
which guarantees this Indebtedness shall be disregarded to the extent that the
same guarantee, lien or surety letter guarantees the principal amount of the
same Indebtedness;
(b) if the Indebtedness satisfies the criterion of one more type of
Permitted Indebtedness, Net Servicos, at its sole criterion, may classify the
same type of Debt and shall only be required to include the amount and type of
the debt within one of the classifications of the Permitted Indebtedness;
(c) the amount of Debt issued at a discount shall be equivalent to the
amount recorded in the accounts in accordance with Brazilian GAAP.
9.11. RESTRICTION ON THE REALIZATION OF CERTAIN PAYMENTS
9.11.1. Net Servicos shall not declare or pay, nor shall it permit its
Restricted Subsidiaries to declare or pay, whether directly or indirectly,
dividends or interest on shareholders' funds or any other equity interest
to those who have an Equity Interest in Net Servicos or in any Restricted
Subsidiary (including, but not limited to any payment in connection with
merger, acquisition or incorporation transactions involving Net Servicos
and/or its Controlled Subsidiaries), until the final amortization of the
Principal, except dividends and other payments made using Equity Interests
of Net Servicos and/or its Restricted Subsidiaries, which do not contain a
repurchase or redemption obligation by Net Servicos and/or its Restricted
Subsidiaries.
9.11.2. Net Servicos may not carry out any acquisition, amortization or
repurchase transaction (including, but not limited to, in connection with
merger, acquisition or incorporation transactions involving Net Servicos) of
Equity Interests, as per the case, (except those related to the Equity Interest
held by Net Servicos or by its Restricted Subsidiaries). Net Servicos undertakes
to ensure that its Restricted Subsidiaries respect the prohibition contained
herein (all the payments and arrangements established in Clauses
9.11.1 and 9.11.2 shall be referred to jointly as "Restricted Payments").
9.11.3. Net Servicos may not make any Investment other than a Permitted
Investment, undertaking to ensure that its Restricted Subsidiaries respect the
prohibition contained herein.
9.11.4. Notwithstanding the prohibitions listed in Clauses 9.11.1 to 9.11.3
above, Net Servicos and its Restricted Subsidiaries may, as of now, perform,
without any restriction or limitation, the following payments and take the
following actions (each one termed a "Permitted Payment"):
(a) any payment, distribution, amortization, redemption, acquisition or
repurchase (1), which constitutes interest on the own capital and which are
immediately and fully capitalized in the Restricted Subsidiaries; or (2) which
is required by law or statutory provision on the date of execution of this
Agreement by Net Servicos or any of its Restricted Subsidiaries;
(b) payment of any dividend, distribution or any form of payment made by a
Restricted Subsidiary to Net Servicos or to holder of Equity Interest, provided
that the holders of Equity Interest are controlled by Net Servicos, and the
payment is made pro rata;
(c) any payment, distribution, amortization, redemption, acquisition or
repurchase of Equity Interest by Net Servicos or by any company under its direct
or indirect control to the Administrators who are Investors, provided that the
aggregate amount paid with regard to such payment, distribution, amortization,
redemption, acquisition or repurchase of Equity Interest does not exceed
R$2,000,000.00 (two million Reais) in any 12 (twelve) month period; and
(d) the repurchase, redemption or any other form of acquisition of any
Equity Interest in CMA Participacoes S.A. up to R$500,000.00 (five hundred
thousand reais), which is held by Companies other than Net Servicos and its
Subsidiaries.
9.12. RESTRICTION ON CHANGE OF THE DIVIDEND PAYMENT POLICY
9.12.1. Net Servicos may not vote in favor of any changes in the policies
related to dividends of the Unrestricted Subsidiaries, which may increase the
respective distribution of dividends. Net Servicos undertakes to ensure that its
Restricted Subsidiaries respect the prohibition contained herein.
9.13. RESTRICTION ON TRANSACTIONS WITH AFFILIATES
9.13.1. Net Servicos may not make or implement any transaction or contract with
any Affiliates, unless this operation with Affiliates ("Transaction with
Affiliates") is carried out under market conditions and serves the interests of
Net Servicos and its Restricted Subsidiaries, with Net Servicos undertaking to
ensure that its Restricted Subsidiaries respect the prohibition contained
herein.
9.13.1.1. This provision shall not apply to:
(a) any Restricted Payment or Permitted Payment authorized in accordance
with Clause 5.7 above, any Permitted Investment, or any other transaction
specifically excluded from the definition of the term `Restricted Payment';
(b) the execution, maintenance and compliance with any labor agreement,
collective labor agreement, benefit plan, program or any other similar agreement
executed in the normal course of its business, including holidays, insurance
policies, health and retirement plans;
(c) payment, in the normal course of business, of remuneration, premium,
bonus or indemnity or any issue or concession of shares, options or other
securities to employees, directors or board members;
(d) any transaction between Net Servicos and a Restricted Subsidiary or
between Restricted Subsidiaries; and
(e) any transaction arising from agreements in existence on the date of
execution of this Agreement.
9.14 RESTRICTION ON OPERATING INVESTMENTS
9.14.1. Unless otherwise permitted herein, Net Servicos, which undertakes to
ensure that its Restricted Subsidiaries respect the prohibition contained
herein, may not make any Capital Expenditures (except any Capital Expenditure
that constitutes a Permitted Investment or that is made with the resources from
the Sale of Assets, in compliance with the provisions of Clause 9.1.1. (V)):
(i) which exceeds:
(a) for the fiscal year ended December 31, 2004, the amount in
Brazilian reais equivalent to US$ 50,000,000.00 (fifty million US
dollars), and (b) in the case of any year subsequent to 2004, the
amount resulting from the indexation of the amount in reais
equivalent to US$ 50,000,000.00 (fifty million US dollars), indexed
in accordance with the US consumer price index from December 31,
2003 until the last day of the corporate year immediately prior to
the Capital Expenditure;
(ii) which, during any fiscal quarter, exceeds 50% (fifty percent) of the
maximum limit applicable to the respective fiscal year including the same
quarter;
except, however, with respect to items (i) and (ii) above, if in any fiscal year
the amount of Capital Expenditures permitted by this Clause exceeds the amount
of Capital Expenditures effectively made by Net Servicos and its Restricted
Subsidiaries (the amount of this excess referred to as "Excess Amount"), Net
Servicos and its Restricted Subsidiaries shall be entitled to the additional
Capital Expenditures in the immediately subsequent fiscal year for an amount
equal to that permitted in accordance with subitem (i) of this Clause, plus the
lowest of (x) the Excess Amount and (y) 20% (twenty percent) of the amount of
Capital Expenditures that would be permitted with regard to the previous fiscal
year.
9.14.2. The limitation on Capital Expenditures established above shall cease
immediately when the Consolidated Leverage Index, calculated at the end of 4
(four) consecutive fiscal quarters, prior to the date of the same Capital
Expenditures, is equal to or lower than 1 to 1. For purposes of calculation of
Capital Expenditures made in any fiscal year, any Capital Expenditures from the
previous fiscal year, whose use is permitted, shall be considered as used in the
first instance, in the same fiscal year.
9.14.3. For the purposes of calculation of the Capital Expenditure, the amount
in another currency equivalent to US dollar, defined in Clause 9.14.1 (i.a),
shall be calculated on the basis of the average of the Exchange Rate for the
month in which the Capital Expenditure has been carried out or contracted.
9.15. RESTRICTION ON THE DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES
9.15.1. On the date of execution of this Agreement, all the subsidiaries of Net
Servicos shall be Restricted Subsidiaries, except Televisao Cabo Criciuma Ltda.
and TV a Cabo e Comunicacoes de Jundiai S.A. Net Servicos shall not designate
any Controlled Company as Unrestricted. However, any Company that is not a
subsidiary of Net Servicos on the date of execution of this Agreement may be
designated as an Unrestricted Subsidiary by Decision of the Board of Directors
at the time of its acquisition or creation, provided that:
(a) at the time of said designation, such Subsidiary is not a direct or
indirect holder of (i) any share or quota that represents the capital stock,
equity interests, partner's rights, participation certificates or any other
securities that confer participation in the profits or Indebtedness of any
Restricted Subsidiary, which is not being simultaneously designated as an
Unrestricted Subsidiary or (ii) any share or quota representing the capital
stock or Indebtedness of Net Servicos;
(b) the Investment in the same Subsidiary is permitted at the time of its
designation in accordance with the terms of Clause 9.11 above;
(c) the same Subsidiary does not hold any license, permission or
authorization applicable to the exploitation of any Permitted Business on the
date of execution of this Agreement;
(d) considering that all the transactions or agreements between each
Subsidiary and Net Servicos or any Restricted Subsidiary were executed at the
time of the designation,
such transactions and agreement would be permitted in accordance with the
provisions of Clause 9.13; and
(e) immediately after giving effect to such designation, no event shall be
in progress which is an Early Maturity Event or which, by means of notice or
with the passing of time, shall become an Early Maturity Event.
9.15.3. The Board of Directors may redesignate any Unrestricted Subsidiary as a
Restricted Subsidiary if, immediately after such a redesignation takes effect,
(a) there is no Early Maturity Event; and (b) Net Servicos may incur additional
Debt, for an amount in Brazilian reais equivalent to US$ 1.00 (one US dollar),
in accordance with the provisions of Clause 9.10.3.
9.15.4. Net Servicos undertakes to ensure that all and any Restricted Subsidiary
is a joint debtor in the terms and conditions of this Agreement and of the
Pledge Agreement; undertaking to ensure that all the documents necessary for the
formalization of this condition of joint and several debtor are duly signed.
9.16. RESTRICTION ON MERGER, INCORPORATION AND SALE OF ASSETS
9.16.1. Whether by means of an isolated transaction or by means of a series of
operations, Net Servicos is prohibited from merging with, being incorporated by
or incorporating, any Company, disposing of, transferring, leasing or in any
other way disposing of all or a substantial part of its assets to any Company or
companies or from executing any kind of transaction which has a similar result;
Net Servicos undertakes to guarantee that its Restricted Subsidiaries are not a
party to any transaction or series of transactions which, in aggregate, result
in the sale, transfer, lease or disposal of all or a substantial part of the
assets of Net Servicos and its Restricted Subsidiaries, considered in
consolidated form, to any Company or companies (except the Restricted
Subsidiaries listed in "Annex 11", which shall observe the provisions of Clause
9.6), unless, cumulatively:
(a) Net Servicos or a Restricted Subsidiary, if any, as per the case, is the
surviving Person after the transaction, or the Person resulting from the merger
or incorporation, or with which Net Servicos or an eventual Restricted
Subsidiary has merged, or that has acquired or leased the assets owned by Net
Servicos or an eventual Restricted Subsidiary (in any of the cases, the
"Surviving Person"), is a company organized and validly existing under the laws
of the Federal Government of Brazil or of any state of the United States of
America, and the Surviving Person expressly assumes (jointly and severally with
Net Servicos or the eventual Restricted Subsidiary in question, unless these
companies cease to exist as the result of a merger or incorporation), by
amendment to an Agreement, all the obligations contracted by Net Servicos or a
Restricted Subsidiary, if any, as the case may be, by virtue of this Agreement;
(b) immediately after executing the same operation, Net Servicos, the
Restricted Subsidiary, if any, or the Surviving Person, as per the case, is
qualified to incur
Indebtedness for an amount in Brazilian reais equivalent to at least US$ 1.00
(one U.S. dollar), in accordance with the terms of Clause 9.10.3;
(c) immediately after executing such transaction or series of
transactions, pro forma, the taking effect of the same has not caused an Early
Maturity Event;
(d) each of the Net Group Companies has delivered to the Creditor
Institution an instrument in writing ratifying the guarantees provided by it;
and
(e) Net Servicos, its Restricted Subsidiary in question or the Surviving
Person, as the case may be, has delivered to the Creditor Institution a
certificate signed by a Director of Net Servicos, from the Restricted Subsidiary
in question or the Surviving Person and a legal opinion acceptable to the
Creditor Institution, declaring that the same transaction, as well as the
Agreement, as amended, are in accordance with this Clause and that all the
requirements of this Agreement with regard to the transaction have been
satisfied, with the proviso that (i) the lawyer responsible for the opinion
shall be able to accept the veracity of the certificate issued by the Directors
of Net Servicos or by any of the Restricted Subsidiaries, with respect to the
material fact, and (ii) no legal opinion shall be required in the merger,
incorporation, disposal, assignment, transfer or any other type of provision
provided in Clause 9.16.2.
9.16.2. Notwithstanding the provisions of items (b) and (c) above, the
Restricted Subsidiaries may participate in the merger, acquisition and
incorporation, which have Net Servicos and any Restricted Subsidiary as
exclusive counterparties, as well as in transactions whose purpose is the
disposal, transfer or leasing of the whole or part of their assets.
9.16.3. In the event of any merger, incorporation or corporate reorganization
involving a Net Group Company, this Net Group Company or the Company that
results from such a transaction shall assume expressly all the obligations
assumed by the Net Group Company as a result of the guarantees provided in the
Pledge Agreement and this Agreement, by means of this instrument, duly signed
and registered, which shall be immediately delivered to the Creditor
Institution.
9.17. MAINTENANCE OF BOOKS AND RECORDS
9.17.1. Net Servicos shall maintain and ensure that its Restricted Subsidiaries
maintain books, accounts and records of the agreement in accordance with
Brazilian GAAP and all other applicable Brazilian legislation.
9.18. CAPITAL STOCK AND RESTRICTED SUBSIDIARIES
9.18.1. Net Servicos shall hold, at any time, equity interest not lower than the
majority of shares or quotas representative of the capital stock, holding,
partnership rights, beneficiary parties or any other securities that confer
participation in the results of each of the
Restricted Subsidiaries.
9.19. BUSINESSES OF NET SERVICOS AND RESTRICTIONS ON THE TRANSFER OF EXISTING
BUSINESSES
9.19.1. Net Servicos shall not dedicate itself predominantly or permit its
Restricted Subsidiaries to dedicate themselves predominantly to any businesses
or activities other than a Permitted Business. Furthermore, Net Servicos shall
not transfer or permit its Restricted Subsidiaries to transfer, directly or
indirectly, to any Unrestricted Subsidiary (i) any of the licenses, permissions
or authorizations used in a Permitted Business on the date of execution of this
Agreement, or (ii) any property, plant and equipment (as defined in the
consolidated financial statements of Net Servicos) of Net Servicos or its
Restricted Subsidiaries, if used in the licensed service areas of Net Servicos
and its Restricted Subsidiaries, as existing on the date of the execution of
this Agreement. Net Servicos and its Restricted Subsidiaries are however
authorized to promote the Sale of Assets, provided that such sales are in
accordance with the provisions of Clause 9.1.1 (V) above, as well as to pledge
goods and assets provided that such pledges are permitted by Clause 9.9 above.
9.20. CHANGES IN BY-LAWS
9.20.1. Net Servicos shall not make alterations or amendments or permit its
Restricted Subsidiaries to make alterations or amendments, or consent to any
alterations or amendments to the By-Laws of Net Servicos or of any of the
Restricted Subsidiaries, as per the case, unless the same alterations or
amendments do not lead to deterioration of the capacity of Net Servicos and its
Restricted Subsidiaries to liquidate the principal and accessory obligations
assumed in this Agreement.
9.21. TRANSACTIONS OF A SPECULATIVE NATURE
9.21.1. Net Servicos shall not execute or permit its Restricted Subsidiaries to
execute Currency Agreements, Interest Rate Agreements or Futures Agreements,
except in the event that such instruments are executed in the normal course of
business and for non-speculative purposes.
9.22. COMPLIANCE WITH RELEVANT AGREEMENTS
9.22.1. Net Servicos shall comply and shall ensure compliance by its Restricted
Subsidiaries with all the obligations of each Material Agreement to which they
are parties, except in the event that such non-compliance does not have an
adverse material effect on Net Servicos and its Restricted Subsidiaries,
considered in consolidated form, nor cause a adverse material effect on the
rights and funds pertaining to the Creditor Institution.
9.23 ADDITIONAL OBLIGATIONS
9.23.1. Net Servicos shall also be obliged:
(a) to submit to the Creditor Institution:
a.1) (i) its annual financial statements, consolidated and audited,
elaborated in accordance with Brazilian GAAP, within 120 (one
hundred and twenty) days of the last day of the respective
fiscal year, and (ii) its quarterly financial statements,
consolidated and not audited, elaborated in accordance with
generally accepted accounting practices in Brazil, within 60
(sixty) days after the last day of each the three quarters of
the fiscal year;
a.2) at the same time as the delivery of the financial statements,
certifying compliance with the obligations arising from this
Agreement, by Net Servicos and by the Restricted Subsidiaries.
The obligations of a financial nature shall be verified in
accordance with the generally accepted accounting practices in
Brazil;
a.3) immediately (but in any case within at most 10 business days
of the date on which any administrator of Net Servicos or of
any other Restricted Subsidiary becomes aware of the
occurrence of the event), a notice with respect to (i) an
Early Maturity Event as established in this Agreement; (ii)
any act performed by a creditor of Senior Secured Indebtedness
to accelerate the payment of the Indebtedness due to the same
party by Net Servicos or by a Restricted Subsidiary or (iii)
any legal action proposed by any creditor of the Secured
Senior Indebtedness seeking to execute or assert the Debt due
from Net Servicos or from a Restricted Subsidiary;
a.4) immediately (but in any case within at most 10 business days
of the submission of the notice mentioned in section (a.3)
above), a report elaborated by a legal representative of Net
Servicos, describing in detail the event that has occurred and
which was mentioned in section (a.3) above, as well as the
measures that Net Servicos or any Restricted Subsidiary
implemented or shall implement with respect to this event; and
a.5) immediately, a notice informing that an Early Maturity Event,
established herein has been remedied, together with a
certificate from a legal representative of Net Servicos,
describing the steps taken to remedy this event;
(b) not to carry out any transactions outside its business purpose, in
compliance with the statutory, legal and regulatory provisions in force;
(c) to maintain the respective accounting standards and practices of
disclosure of information, unless the change is required for compliance with
Brazilian GAAP;
(d) to provide all and any information that may reasonably be requested by
the Creditor Institution, within at most 10 (ten) business days of the
respective request date, especially the information necessary for the
verification of compliance by Net Servicos with the obligations arising from
this Agreement, it being agreed that any information that is not public and not
compulsory by law shall not be provided to the Competitors of Net Servicos and
its Restricted Subsidiaries; and
(e) to maintain its registration as a publicly held company at the CVM
(Securities and Exchange Commission) updated at all times.
CLAUSE 10 DECLARATIONS AND GUARANTEES BY THE COMPANIES OF NET GROUP
The Net Group Companies hereby provide to the benefit of the Creditor
Institution, the declarations and guarantees below, which they declare to be
faithful and correct on this date. Any references to the Net Group Companies
shall be understood as referring to each individually.
(a) Constitution and Existence. The Net Group Companies are duly organized
and existing companies in accordance with the laws of their country of
organization, with corporate powers and authorities to own, lease and exploit
their assets as well as to administer their businesses in their current manner;
(b) Corporate Powers and Authorizations. All the corporate acts necessary
to authorize the execution and formalization of this Agreement have been duly
arranged and obtained by the Net Group Companies. The Net Group Companies have
the powers necessary to perform all the acts specified herein, and the persons
that represent the Net Group Companies in the execution of this Agreement are
duly authorized for the same;
(c) Validity. The Net Group Companies are authorized, in accordance with
the terms of their respective contracts or By-Laws and of the applicable
legislation, to comply with the obligations contained herein, in the
Intercreditor Agreement, in the Pledge Agreements and in the other Transaction
Documents (as defined in the Intercreditor Agreement), which constitute valid
and binding obligations on the Subsidiaries, being enforceable in accordance
with their wording, limited only by bankruptcy, insolvency, composition with
creditors (concordata) or other similar types of applicable laws that restrict
the credit assignments of the creditors in general;
(d) Absence of Default or Non Compliance with Laws. The terms of this
Agreement do not counteract (a) any agreement or document to which the Net Group
Companies are party or any of their assets and property are linked, except for
the debts contemplated in the Restructuring Plan, including the second and third
public debenture issues of Net Servicos; (b) any law, decree, regulation to
which the companies that integrate the Net Group (and/or their Affiliates) or
any of their assets or property are linked; or (c) any order, decision or
administrative or judicial sentence that affects the
companies that are members of the Net Group or any of their goods and property,
except for the shares mentioned in "Annex 10" of this Agreement;
(e) Consents and Approvals. The execution, formalization and compliance
with this Agreement, the Intercreditor Agreement, the Pledge Agreements and
other Transaction Documents (as defined in the Intercreditor Agreement), as well
as the materialization of the transactions contemplated herein and in the
Transaction Documents (as well as compliance with the terms established in these
documents) do not constitute a violation, conflict, infringement or default with
regard to the (i) By-Laws, as applicable, of the Net Group Companies, (ii)
agreements, mortgages, debt obligations, licenses, leases, loan agreements,
other debt securities or other contracts to which the Net Group Companies are
party or to which the respective goods may be linked, except by the documents
mentioned in Third Paragraph of Clause 11 of this Agreement; or (iii) to laws,
rules, regulations, sentences, orders or existing applicable decrees, issued by
any government, governmental body or office, domestic or foreign, with
jurisdiction over the respective Net Group Company, or over any of its
respective goods or relevant assets;
(f) Veracity of the Declarations. This Contract does not contain any false
or incorrect declaration or omission of material facts;
(g) Subsidiaries. The Restricted Subsidiaries, TV e Comunicacoes de
Jundiai S.A. and Televisao a Cabo Criciuma Ltda. are the only companies in which
Net Servicos, directly or indirectly, (i) holds or is committed to hold an
capital investment or similar interest, and (ii) participates in the Control;
(h) CDI Rate. The Net Group Companies have chosen, in accordance with the
Creditor Institution, the CDI rate as the interest rate to be applied to this
Agreement, hereby declaring that (i) they understand that this rate is subject
to variation, (ii) its form of calculation is known and accepted by the parties,
and (iii) the rate is publicly known, published in the market and easily
accessible to the Parties.
CLAUSE 11 DEFAULT EVENTS
It is expressly covenanted by Parties that the Principal amount and the
respective Interest due and not paid shall mature early with respect to all the
Net Group Companies, upon occurrence of the following events ("Early Maturity
Events"):
(a) regardless of any notice, at any time, any of the Net Group Companies
files for composition with creditors (concordata), self-imposed bankruptcy,
judicial or extrajudicial recovery;
(b) any bankruptcy proceedings, intervention, insolvency or other similar
procedure brought against Net Servicos or any of its Restricted Subsidiaries, if
not fully guaranteed by bankruptcy provisions, as per the case;
(c) regardless of any notice, any of the Net Group Companies defaults on
any payment obligation with respect to (i) the Principal amount, on the
respective maturity date, or (ii) Interest not remedied within 5 (five) days
from the respective maturity date;
(d) default by Net Group Companies on any non-monetary obligation in
accordance with the terms and on the date established herein, that is not
remedied by the deadline established in the Agreement or, if no deadline has
been specified, within 10 (ten) business days of the receipt, by Net Servicos,
of a notice from a Creditor Institution, requiring compliance with the
respective obligation defaulted on;
(e) declaration of early maturity, after the respective grace periods have
elapsed, on any Indebtedness of Net Group Companies, including Indebtedness
related to the Debt Instruments, or of any Restricted Subsidiary, whose
individual or aggregate principal amount is equal to or higher than
R$30,000,000.00 (thirty million Brazilian reais) (or the equivalent of such
amount in other currency(ies), corrected by the IGP-M adjustment since January
1, 2004;
(f) one or more judicial decisions or protests of instruments (unless the
protest was made in error or bad faith, as validly demonstrated by Net Servicos)
against Net Servicos and/or its Restricted Subsidiaries, whose individual or
aggregate amount is higher than R$30,000,000.00 (thirty million Brazilian reais)
(or the equivalent of such amount in other currency(ies) corrected by the IGP-M
Adjustment since January 1, 2004, and with regard to which there is no measure
opposing their execution or deadline for taking such action that has ended;
(g) evidence of falsehood, error or mistake in any relevant aspect of the
declarations appearing in Clause 10 above or Clause 6.1 of the Intercreditor
Agreement;
(h) the confiscation, expropriation or other actions of a similar nature
that apply to all or a substantial part of the assets of Net Servicos and its
Restricted Subsidiaries, where the same event has not been remedied within 60
(sixty) days of its occurrence;
(i) default by Net Servicos and its Restricted Subsidiaries on any
obligation contemplated in the Pledge Agreement and the Intercreditor Agreement,
which is not remedied within the terms specified in the same agreements or, in
their absence, within 10 (ten) business days of receipt by Net Servicos of a
notice by Creditor Institution requiring compliance with the respective
obligation in default;
(j) ineffectiveness or unenforceability, at any time, of the guarantees
granted in accordance with the terms of this Agreement and the Pledge
Agreements;
(k) a substantial alteration in the business purpose of Net Servicos;
(l) default on any obligation appearing in Clause 9.16 by Net Servicos
and/or
its Restricted Subsidiaries; or
(m) any Transaction Document becomes, wholly or in part, null and
ineffective, or compliance with the obligations assumed by Net Servicos or its
Restricted Subsidiaries under such Documents becomes illegal, or (ii) Net
Servicos or any of its Restricted Subsidiaries challenges the enforceability of
any Transaction Document to which they are a party.
FIRST PARAGRAPH The events to which items (b), (e), (f), (g), (j), (k) and
(l) of this Clause 11 refer shall only be considered as Early Maturity Events if
not remedied within 5 (five) days, counted from the receipt by Net Servicos, of
notification informing it of the occurrence of the respective default.
SECOND PARAGRAPH The occurrence of any Early Default Event shall
automatically cause the early maturity of Principal, Interest, late payment
interest and late payment fines, which shall become immediately and
automatically due, regardless of any claim, protest, notice, communication,
judicial or extrajudicial notice or any other type of notice.
THIRD PARAGRAPH Default by the Net Group Companies on their obligations
arising from the loans listed in "Annex 9" of the Intercreditor Agreement, which
have not been converted into Secured Senior Indebtedness, as well as the
declaration of the early maturity of the same debts, shall not constitute an
Early Maturity Event in accordance with the terms of this Agreement.
CLAUSE 12 TAXES, EXPENSES AND FINES
The Net Group Companies shall jointly and severally bear all the levies, taxes
and applicable charges or which come to apply by force hereof, including the
Imposto sobre Operacoes Financeiras (IOF) [Tax on Financial Transactions] and
the Contribuicao Provisoria sobre Movimentacao ou Transmissao de Valores e de
Creditos e Direitos de Natureza Financeira (CPMF) [Temporary Contribution on
Financial Transactions], but excluding taxes or contributions of any nature,
deductions, charges, restrictions and fiscal dues applicable to the revenue,
income or earnings of Creditor Institution, such as income tax, Contribuicao
Social sobre o Lucro Liquido [Social Security Contribution on Net Profits], the
Programa de Integracao Social (PIS) [Social Integration Program contribution],
and the FINSOCIAL [Social Investment Fund] contribution, present or future, as
well as any interest, fines or other related liabilities.
FIRST PARAGRAPH The Net Group Companies shall also bear the expenses
related to the registration in the respective Registry of Deeds and Documents
and any judicial or extrajudicial claims that may arise in connection with this
Agreement.
SECOND PARAGRAPH The Net Group Companies shall also pay the reasonable
fees and expenses incurred with supporting evidence by the holders of Original
Loans with
legal and financial consultants already contracted with the consent of Net
Servicos to negotiate, execute and formalize this Agreement (i.e., Xxxxxxxx Xxxx
Advogados, Shearman & Sterling LLP and PricewaterhouseCooper), regardless of the
effective conclusion of the transactions contemplated herein.
THIRD PARAGRAPH The levies, taxes, charges and expenses mentioned in this
Clause shall be reimbursed to the Creditor Institution within 5 (five) days of
the delivery to Net Servicos of a written request.
CLAUSE 13 EFFECTIVENESS
Notwithstanding the adverse statement in any other document this Agreement is
executed irrevocably and comes into effect on the date of its signing, being
binding on their successors and assignees of any kind. The obligations of the
Net Group Companies shall remain in effect until the full payment of the amount
due, in accordance with the provisions of this Agreement. With the full payment
of the Principal and Interest due by the Net Group Companies to the Creditor
Institution, in the form expressed in this Agreement, the parties shall grant
the broadest, most general and unrestricted quittance of all the obligations
assumed by the parties, with no further claims on each other, present or future,
with regard to payment of the Principal.
CLAUSE 14 ASSIGNMENT
In compliance with all the provisions of the Intercreditor Agreement, the
Creditor Institution may assign or transfer to third parties, fully or
partially, the receivables represented by this Agreement and the other rights
and obligations arising from this Agreement, merely through written
communication to the Net Group Companies. The Net Group Companies may only
assign or transfer to third parties, fully or partially, the receivables
represented by this Agreement and other rights and obligations arising from the
same, after securing prior and express written consent by Creditor Institution
and provided that all the provisions applicable to the Intercreditor Agreement
are observed.
FIRST PARAGRAPH The same assignment by Creditor Institution assumes the
automatic adhesion by the assignee, regardless of any formality to the
Intercreditor and Pledge Agreements.
SECOND PARAGRAPH In accordance with the terms of National Monetary Council
Resolution N(degrees). 2,836, of May 30, 2001 and for purposes of Item V, Third
Paragraph, Article 1 of Complementary Law N(degrees). 105 of January 10, 2001
and subsequent regulations and laws, it is defined, for all legal purposes that
the Net Group Companies hereby recognize and irrevocably, irreversibly, formally
and expressly grant to the Creditor Institution and/or future assignees the
right to assign or transfer freely, whether in full or in part, all their rights
and obligations arising from this Agreement, without need for previous
consent or notification of the Net Group Companies. Each and every assignee
shall observe the confidentiality clause of this Agreement. The Creditor
Institution may only grant access to such confidential information (in order to
avoid doubts, publicly known information shall not be considered confidential)
to an assignee or potential assignee, if the same assignee or potential assignee
has undertaken in writing, (i) to observe the confidentiality of the information
received and (ii) to observe the terms of Clause 9.23.1(d) of this Agreement,
which refers to the restriction on access to information by the Competitors of
Net Group Companies.
THIRD PARAGRAPH If this Agreement is assigned in accordance with the above
terms, the Institution making the assignment shall maintain confidential the
information received by virtue of Clause 9.23.1(a) of this Agreement, with the
same institution authorized to disclose such information (a) to third parties,
only (i) upon request by any governmental authority, (ii) if such information
become public, and (iii) if there is evidence that the same third party has
legally obtained such information before receiving it in a confidential manner
from any of the Net Group Company and (b) to any potential assignee, in the
terms of one of the events considered in item (a) above or upon compliance with
the Second Paragraph above.
FOURTH PARAGRAPH The information relating to the amount, type of currency
and type of instrument held by the Creditor Institution by virtue of this
Agreement is not considered to be confidential and is not, therefore, subject to
the confidentiality clauses of this Agreement and Instrument.
CLAUSE 15 VALIDITY OF CLAUSES
Each of the provisions of this Agreement shall be independent and distinct from
the others and the illegality, invalidity or ineffectiveness of any of the
provisions shall not affect or harm the legality, effectiveness and
enforceability of the other provisions contained herein, which shall remain
valid and in full force for all legal effects and purposes.
CLAUSE 16 ENTIRE AGREEMENT
This Agreement, the Pledge Agreement and the Intercreditor Agreement constitute
the entire agreement by the Parties with respect to the transactions established
herein and shall replace any understanding by the Parties with regard to its
purpose. It is further established that if any other instrument signed by the
Parties diverges from what has been agreed in the same instruments, the terms of
the instruments listed above shall prevail.
CLAUSE 17 ALTERATIONS AND AMENDMENTS
Unless otherwise determined in the Intercreditor Agreement, any alteration
amendment, waiver or tolerance with regard to this Agreement shall only be
considered valid and shall only have an effect if in writing and signed by the
Parties.
CLAUSE 18 WAIVER AND TOLERANCE
The parties recognize that, unless expressly established in this Agreement: (a)
failure to exercise, the concession of a deadline, tolerance or delay in
exercising any right guaranteed by this Agreement and/or by law shall not
constitute a novation or waiver of these rights, nor shall it harm the eventual
exercise of same; (b) the individual or partial exercise of these rights shall
not prevent the subsequent exercise of the remaining rights, or the exercise of
any other right; (c) the waiver of any of these rights shall not be valid unless
granted in writing; and (d) the waiver of a right shall be interpreted
restrictively and shall not be considered as waiver of any other right granted
by this Agreement.
CLAUSE 19 NOTICES
The notices and communications required and/or permitted by this Agreement shall
be made by registered mail or by public registry or judicial means, and shall be
addressed to the Parties at the addresses set forth in the Preamble to this
Agreement, or to another that may indicated in writing by the Parties, in
accordance with the terms of this Clause.
FIRST PARAGRAPH The notices and/or communications shall be considered as
having been delivered on the date appearing on the receipt slip of the
registered letter or on the date of formalization of the judicial or
extrajudicial notification, as per the case.
SECOND PARAGRAPH The Creditor Institution is authorized to deliver to Net
Servicos the notices and/or communications addressed to any of the Net Group
Companies, and, in the same way, any of the Net Group Companies is authorized to
deliver to the Collateral Agent any notice, communication and/or notification
addressed to the Creditor Institution with regard to the Pledge Agreements
mentioned in item (4) of the Preamble to this Agreement.
THIRD PARAGRAPH The addresses for the purpose of notices and/or
communications shall be as follows:
Net Servicos de Comunicacao S.A.,
Rua Verbo Divino, 1,356
Chacara Xxxxx Xxxxxxx - Sao Paulo - SP - Brasil
CEP: 04719-002
Attn: the Executive Directors
Telephone: (00-00) 0000-0000
Fax: (00-00) 0000-0000
Deutsche Bank X.X.
Xxx Xxxxxxxxx Xxxxx, 0000
Xxx Xxxxx - SP
CEP: 04717-910
Atencao: Xxxxxx Xxxxxxx
Telefone: (00-00) 0000-0000
Fax: (00-00) 0000-0000
CLAUSE 20 EXTRAJUDICIAL EXECUTIVE TITLE
The Parties acknowledge that this Agreement and the promissory note mentioned in
the Second Paragraph of Clause 8 constitute extrajudicial executive titles, it
being agreed that the Promissory Note is linked to this Agreement for the
purposes of the provisions of Articles 583 and 585, I and II of the Brazilian
Civil Procedural Code, with the alterations of Law No. 8.953 of December 13,
1994.
FIRST PARAGRAPH - The Net Company hereby undertakes to register this
Agreement at the relevant Public Registry of Titles and Document of [ ], State
of [ ], within at most 3 (three) business days of this date.
CLAUSE 21 CONFIDENTIALITY OBLIGATION
The obligation of confidentiality established in Clause 10.14 of the
Intercreditor Agreement shall apply to the information made available and/or
submitted by the Net Group Companies by virtue of this Agreement, in the exact
terms of the same clause, except in the cases otherwise determined within this
Agreement.
CLAUSE 22 GOVERNING LAW
This Agreement shall be governed by the laws of the Federative Republic of
Brazil.
CLAUSE 23 CHOICE OF JURISDICTION
The parties hereby choose the jurisdiction of the City of Sao Paulo, State of
Sao Paulo, to resolve any doubts or disputes that may arise from this Agreement,
renouncing any other, regardless of its merits.
The Parties, being in full agreement, have signed [-] copies of this Agreement
that are identical in content and form, in the presence of the witnesses
indicated below.
Sao Paulo, [ ] , 200[ ]
[CREDITOR INSTITUTION]
P. ________________________________________
Name:
Position:
P. ________________________________________
Name:
Position:
[THE NET COMPANY]
P. ________________________________________
Name:
Position:
P. ________________________________________
Name:
Position:
LOAN AGREEMENT DATED [ ]
NET GROUP COMPANIES
NET SERVICOS DE NET FRANCA LTDA.
COMUNICACAO S.A.: NET GOIANIA LTDA.
ALNOR ALUMINIO DO NORTE LTDA. NET INDAIATUBA LTDA.
ANTENAS COMUNITARIAS NET JOINVILLE LTDA.
BRASILEIRAS LTDA. NET LONDRINA LTDA.
CABODINAMICA TV CABO NET MARINGA LTDA.
SAO PAULO S.A. NET PARANA COMUNICACOES LTDA.
CMA PARTICIPACOES S.A. NET PIRACICABA LTDA.
DABNY, L.L.C. NET RECIFE LTDA.
DR EMPRESA DE DISTRIBUICAO NET RIBEIRAO PRETO S.A.
E RECEPCAO DE TV LTDA. NET RIO S.A.
HORIZONTE SUL NET SAO XXXXXX S.A.
COMUNICACOES LTDA. NET SAO XXXX DO RIO PRETO LTDA.
JONQUIL VENTURE LIMITED NET SAO PAULO LTDA.
MULTICANAL NET SOROCABA LTDA.
TELECOMUNICACOES S.A. NET SUL COMUNICACOES LTDA.
NET ANAPOLIS LTDA. REYC COMERCIO
NET ARAPONGAS LTDA. E PARTICIPACOES LTDA.
NET BAURU LTDA. TV CABO DE CHAPECO LTDA.
NET BELO HORIZONTE LTDA. TV VIDEO CABO
NET BRASILIA LTDA. DE BELO HORIZONTE S.A.
NET CAMPINAS LTDA.
NET CAMPO GRANDE LTDA.
NET CURITIBA LTDA.
NET FLORIANOPOLIS LTDA.
P. ________________________________________
Name:
Position:
P. ________________________________________
Name:
Position:
Witnesses:
1. - ____________________________
Name: [ ]
ID Card (RG): [ ]
2. - ____________________________
Name: [ ]
ID Card (RG): [ ]
ANNEX 1
TO THE
LOAN AGREEMENT
NET GROUP COMPANIES
NET SERVICOS DE COMUNICACAO S.A., a joint stock company headquartered in the
city and state of Sao Paulo, at Rua Verbo Divino, N(degrees). 1,356, registered
in the National Register of Corporate Entities (CNPJ/MF) under N(degrees).
00.108.786/0001-65, hereafter referred to simply as "Net Servicos" and duly
represented in the form of its By-Laws;
ALNOR ALUMINIO DO NORTE LTDA., a Brazilian limited liability company with
principal office in the city of Manaus, state of Amazonas, at Xxx Xxxxxx Xxxxxxx
X(xxxxxxx). 0,000, Xxxxx, Xxxxx 00 de Janeiro, registered in the National
Register of Corporate Entities (CNPJ) under N(degrees). 34.534.750/0001-65,
herein represented in accordance with its By-Laws by Messrs. Xxxxxxxxx Xxxxx
Valim Filho and Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
ANTENAS COMUNITARIAS BRASILEIRAS LTDA., a Brazilian limited liability company
with principal office in the city of Blumenau, state of Santa Catarina, at
Xxxxxxx Xxxxxx X(xxxxxxx). 00, Xxxxx Xxxxx, registered in the National Register
of Corporate Entities (CNPJ) under N(degrees). 79.375.606/0001-61, herein
represented in accordance with its By-Laws by Messrs. Xxxxxxxxx Xxxxx Xxxxx
Filho and Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx
CABODINAMICA TV CABO SAO PAULO S.A., a Brazilian joint stock company with
principal office in the city of Sao Paulo, state of Sao Paulo, at Rua Verbo
Divino, N(degrees). 1,356, Chacara Xxxxx Xxxxxxx, registered in the National
Register of Corporate Entities (CNPJ) under N(degrees). 65.516.254/0001-02,
herein represented in accordance with its By-Laws by its executive directors,
Messrs. Xxxxxxxxx Xxxxx Xxxxx Filho and Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
CMA PARTICIPACOES S.A., a Brazilian joint stock company with principal office in
the city of Sao Paulo, state of Sao Paulo, at Rua Verbo Divino, N(degrees).
1.356, Chacara Xxxxx Xxxxxxx, registered in the National Register of Corporate
Entities (CNPJ) under N(degrees). 31.959.356/0001-80, herein represented in
accordance with its By-Laws by its executive directors, Messrs. Xxxx Xxxxxxx
Xxxxxxxx Xxxxx and Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
DABNY, L.L.C., ., a company constituted and operating in accordance with the
laws of Delaware, headquartered c/o of The Prentice Hall Corporation System,
Inc. 00 Xxxxxxxxxx Xxxxxx, Xxxxx X-000, Xxxxx, Xxxx Xxxxxx 00000, herein
represented in accordance with its By-Laws by its executive directors, Messrs.
Xxxxxxxxx Xxxxx Valim Filho and Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
JONQUIL VENTURE LIMITED, a company constituted and operating in accordance with
the laws of the British Virgin Islands, headquartered at Xxxxxxxxx Xxxxxxxx,
X.X. Xxx 00, Xxxx Xxxx, Xxxxxxx, herein represented in accordance with its
By-Laws by its executive director, Sr. Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
MULTICANAL TELECOMUNICACOES S.A., a Brazilian joint stock company, headquartered
in the city and state of Sao Paulo, at Rua Verbo Divino N(degrees). 1,356 - 1st
floor - part, CEP 04719-002, Chacara Xxxxx Xxxxxxx, registered in the National
Register of Corporate Entities (CNPJ) under N(degrees). 31.963.481/0001-64,
herein represented in accordance with its By-Laws by its executive directors,
Messrs. Xxxxxxxxx Xxxxx Xxxxx Filho and Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET BELO HORIZONTE LTDA., a Brazilian limited company, with principal office in
the city of Belo Horizonte, state of Minas Gerais, at Xxxxxxx Xxxxxxxxxx
X(xxxxxxx). 000, Xxxxxxxxxx, XXX 00000-000, registered in the National Register
of Corporate Entities (CNPJ) under N(degrees). 38.738.308/0001-01, herein
represented in accordance with its By-Laws by its executive directors, Messrs.
Xxxxxxxxx Xxxxx Valim Filho and Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET BRASILIA LTDA., a Brazilian limited company, headquartered in the city of
Xxxxxxxx, Xxxxxxx Xxxxxxxx, XXX/Xxx, Xxxxxx 00, N(degrees). 725, CEP 70000-000,
registered in the National Register of Corporate Entities (CNPJ) under
N(degrees). 26.499.392/0001-79, herein represented in accordance with its
By-Laws by its executive directors, Messrs. Xxxxxxxxx Xxxxx Valim Filho and
Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET LONDRINA LTDA., a Brazilian limited liability company with principal office
in the city of Londrina, state of Parana, at Xxx Xxxxxx, X(xxxxxxx). 000,
Xxxxxx, registered in the National Register of Corporate Entities (CNPJ) under
N(degrees). 80.924.459/0001-10, herein represented in accordance with its
By-Laws by its executive directors, Messrs. Xxxxxxxxx Xxxxx Xxxxx Filho and
Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET RIO S.A a Brazilian joint stock company with principal office in the city of
Rio de Janeiro, state of Rio de Janeiro, at Rua Vilhena de Moraes, N(degrees).
000, Xxxxx 00, Xxxxx 000, 0xx Xxxxx, Xxxxx xx Xxxxxx, registered in the National
Register of Corporate Entities (CNPJ) under N(degrees). 28.029.775/0001-09,
herein represented in accordance with its By-Laws by its executive directors,
Messrs. Xxxxxxxxx Xxxxx Xxxxx Filho and Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
TV CABO DE CHAPECO LTDA., a Brazilian limited liability company with principal
office in the city of Chapeco, state of Santa Catarina, at Avenida Xxxxx Xxxxx,
N(degrees). 247/01, registered in the National Register of Corporate Entities
(CNPJ) under N(degrees). 00.847.530/0001-26, herein represented in accordance
with its By-Laws by Messrs. Xxxxxxxxx Xxxxx Valim Filho and Xxxxxxxx Xxxxxxxxxxx
Xxxxx Xxxxxxx;
TV VIDEO CABO DE BELO HORIZONTE S.A., a Brazilian joint stock company with
principal office in the city of Belo Horizonte, state of Minas Gerais, at
Avenida Renascenca, N(degrees). 505, registered in the National Register of
Corporate Entities (CNPJ) under N(degrees). 64.195.522/0001-79, herein
represented in accordance with its By-Laws by its executive directors, Messrs.
Xxxxxxxxx Xxxxx Valim Filho and Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET RECIFE LTDA., a Brazilian limited liability company with principal office in
the city of Recife, state of Pernambuco, at Rua Xxxxxxxxx Xxxxx N(degrees). 100,
CEP 50070-490, Bairro da Ilha do Xxxxx, registered in the National Register of
Corporate
Entities (CNPJ) under N(degrees). 08.828.469/0001-25, herein represented in
accordance with its By-Laws by its executive directors, Messrs. Xxxxxxxxx Xxxxx
Valim Filho and Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET SAO PAULO LTDA., a Brazilian limited liability company with principal office
in the city and state of Sao Paulo, at Rua Verbo Divino N(degrees). 1,356,
ground floor, blocks 1 and 2, CEP 04719-002, Chacara Xxxxx Xxxxxxx, Sao Paulo -
SP, registered in the National Register of Corporate Entities (CNPJ) under
N(degrees). 65.697.161/0001-21, herein represented in accordance with its
By-Laws by its executive directors, Messrs. Xxxxxxxxx Xxxxx Xxxxx Filho and
Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET CAMPINAS LTDA., a Brazilian limited liability company with principal office
in the city of Campinas, state of Sao Paulo, at Rua Jasmim N(degrees). 610, CEP
13.807-520, Chacara Primavera, registered in the National Register of Corporate
Entities (CNPJ) under N(degrees). 61.698.510/0001-79, herein represented in
accordance with its By-Laws by its executive directors, Messrs. Xxxxxxxxx Xxxxx
Valim Filho and Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET INDAIATUBA LTDA., a Brazilian limited liability company with principal
office in the city of Indaiatuba, state of Sao Paulo, at Xxx 00 xx Xxxxx,
X(xxxxxxx). 0,000/0,000, Xxxx Xxxxxxxx, CEP 13.330-050, registered in the
National Register of Corporate Entities (CNPJ) under N(degrees).
58.393.695/0001-07, herein represented in accordance with its By-Laws by its
executive directors, Messrs. Xxxxxxxxx Xxxxx Xxxxx Filho and Xxxxxxxx
Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET FRANCA LTDA., a Brazilian limited liability company with principal office in
the city of Franca, state of Sao Paulo, at Xxx Xxxxxx Xxxxx Xxxxxxx N(degrees).
2,837, Jardim Samello, CEP 14405-135, registered in the National Register of
Corporate Entities (CNPJ) under N(degrees). 60.348.414/0001-38, herein
represented in accordance with its By-Laws by its executive directors, Messrs.
Xxxxxxxxx Xxxxx Valim Filho and Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET SUL COMUNICACOES LTDA., a Brazilian limited liability company with principal
office in the city of Porto Alegre, state of Rio Grande do Sul, at Xxx Xxxxxxxx
X(xxxxxxx). 0000, Xxxxx Santa Xxxxxx, CEP 90850-000, registered in the National
Register of Corporate Entities (CNPJ) under N(degrees). 73.676.512/0001-46,
herein represented in accordance with its By-Laws by its executive directors,
Messrs. Xxxxxxxxx Xxxxx Xxxxx Filho and Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
DR- EMPRESA DE DISTRIBUICAO E RECEPCAO DE TV LTDA., a Brazilian limited
liability company with principal office in the city of Porto Alegre, state of
Rio Grande do Sul, at Rua Silveiro N(degrees). 1,111, Morro Santa Xxxxxx, CEP
90850-000, registered in the National Register of Corporate Entities (CNPJ)
under N(degrees). 93.088.342/0001-96, herein represented in accordance with its
By-Laws by its executive directors, Messrs. Xxxxxxxxx Xxxxx Xxxxx Filho and
Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET JOINVILLE LTDA., a Brazilian limited liability company with principal office
in
the city of Joinville, state of Santa Catarina, at Avenida Xxxxxxxx Xxxxx
N(degrees). 419, Bucaren, CEP 89202-300, registered in the National Register of
Corporate Entities (CNPJ) under N(degrees). 85.271.898/0001-95, herein
represented in accordance with its By-Laws by its executive directors, Messrs.
Xxxxxxxxx Xxxxx Valim Filho and Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET FLORIANOPOLIS LTDA., a Brazilian limited liability company with principal
office in the city of Florianopolis, state of Santa Catarina, at Xxxxxxx Xxx
Xxxxxx X(xxxxxxx). 000, Xxxxxx, XXX 00000-000 registered in the National
Register of Corporate Entities (CNPJ) under N(degrees). 72.461.072/0001-47,
herein represented in accordance with its By-Laws by its executive directors,
Messrs. Xxxxxxxxx Xxxxx Valim Filho and Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET MARINGA LTDA., a Brazilian limited liability company with principal office
in the city of Maringa, state of Parana, at Xxxxxxx Xxxxxxx X(xxxxxxx). 000,
Xxxx 00, XXX 87013-330, registered in the National Register of Corporate
Entities (CNPJ) under N(degrees). 81.712.416/0001-34, herein represented in
accordance with its By-Laws by its executive directors, Messrs. Xxxxxxxxx Xxxxx
Xxxxx Filho and Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET SAO XXXX DO RIO PRETO LTDA., a Brazilian limited liability company with
principal office in the city of Sao Xxxx do Rio Preto, state of Sao Paulo, at
Rua Lafaiete Xxxxxxx xx Xxxxxx N(degrees). 1,922, Boa Vista, CEP 15025-510,
registered in the National Register of Corporate EntitieS (CNPJ) under
N(degrees). 69.082.832/0001-09, herein represented in accordance with its
By-Laws by its executive directors, Messrs. Xxxxxxxxx Xxxxx Valim Filho and
Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET PIRACICABA LTDA., a Brazilian limited liability company with principal
office in the city of Piracicaba, state of Sao Paulo, at Avenida Independencia
N(degrees). 3,552, Alemaes, CEP 13416-230, registered in the National Register
of Corporate Entities (CNPJ) under N(degrees). 64.592.116/0001-40, herein
represented in accordance with its By-Laws by its executive directors, Messrs.
Xxxxxxxxx Xxxxx Valim Filho and Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET GOIANIA LTDA., a Brazilian limited liability company with principal office
in the city of Goiania, state of Goias, at Xxx 00, Xxxxxx x-00, Xxxx 00,
X(xxxxxxx). 970, Setor Marista, CEP 74000-000 registered in the National
Register of Corporate Entities (CNPJ) under N(degrees). 33.659.475/0001-43,
herein represented in accordance with its By-Laws by its executive directors,
Messrs. Xxxxxxxxx Xxxxx Valim Filho and Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET XXXXX GRANDE LTDA., a Brazilian limited liability company with principal
office in the city of Campo Grande, state of Mato Xxxxxx do Sul, at Avenida
Xxxxxx Xxxx N(degrees). 3,004, CEP 79002-075, Centro, registered in the National
Register of Corporate Entities (CNPJ) under N(degrees). 24.615.965/0001-57,
herein represented in accordance with its By-Laws by its executive directors,
Messrs. Xxxxxxxxx Xxxxx Xxxxx Filho and Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET SOROCABA LTDA., a Brazilian limited liability company with principal office
in
the city of Sorocaba, State of Sao Paulo, at Avenida Xxxxxxx Xxxxxx Xxxxxxx
N(degrees). 1,074 and Xxx Xxxxx Xxxxxx X(xxxxxxx). 00, Xxxxxx Xxxxxxxx, CEP
18047-000, registered in the National Register of Corporate Entities (CNPJ)
under N(degrees). 64.637.903/0001-60, herein represented in accordance with its
By-Laws by its executive directors, Messrs. Xxxxxxxxx Xxxxx Valim Filho and
Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET SAO XXXXXX S.A., a Brazilian joint stock company with principal office in
the city of Sao Xxxxxx, state of Sao Paulo, at Avenida Xx. Xxxxxx Xxxxxxx,
N(degrees). 1,986, registered in the National Register of Corporate Entities
(CNPJ) under N(degrees). 57.724.759/0001-34, herein represented in accordance
with its By-Laws by its executive directors, Messrs. Xxxxxxxxx Xxxxx Xxxxx Filho
and Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
HORIZONTE SUL COMUNICACOES LTDA., a Brazilian limited liability company with
principal office in the city of Porto Alegre, state of Rio Grande do Sul, at Rua
Silveiro, N(degrees). 1,111, part, registered in the National Register of
Corporate Entities (CNPJ) under N(degrees). 94.319.209/0001-66, herein
represented in accordance with its By-Laws by its executive directors, Messrs.
Xxxxxxxxx Xxxxx Valim Filho and Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET PARANA COMUNICACOES LTDA., a Brazilian limited liability company with
principal office in the city of Curitiba, state of Parana, at Rua Xxxxx Xxxxxxx
Sobrinho, N(degrees). 557, Merces, registered in the National Register of
Corporate Entities (CNPJ) under N(degrees). 84.922.681/0001-35, herein
represented in accordance with its By-Laws by its executive directors, Messrs.
Xxxxxxxxx Xxxxx Xxxxx Filho and Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET CURITIBA LTDA., a Brazilian limited liability company with principal office
in the city of Curitiba, state of Parana, at Rua Mamore N(degrees). 340,
registered in the National Register of Corporate Entities (CNPJ) under
N(degrees). 82.342.833/0001-03, herein represented in accordance with its
By-Laws by its executive directors, Messrs. Xxxxxxxxx Xxxxx Valim Filho and
Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET ARAPONGAS LTDA., a Brazilian limited liability company with principal office
in the city of Arapongas, state of Parana, at Xxx Xxxxxx, X(xxxxxxx). 000,
registered in the National Register of Corporate Entities (CNPJ) under
N(degrees). 81.897.118/0001-66, herein represented in accordance with its
By-Laws by its executive directors, Messrs. Xxxxxxxxx Xxxxx Valim Filho and
Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET RIBEIRAO PRETO S.A., a Brazilian limited liability company with principal
office in the city of Ribeirao Preto, state of Sao Paulo, at Avenida Nove de
Julho, N(degrees). 1,266, registered in the National Register of Corporate
Entities (CNPJ) under N(degrees). 64.807.456/0001-40, herein represented in
accordance with its By-Laws by its executive directors, Messrs. Xxxxxxxxx Xxxxx
Valim Filho and Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx;
NET BAURU LTDA., a Brazilian limited liability company with principal office in
the city of Bauru, state of Sao Paulo, at Avenida Xxxxx de Caxias, N(degrees).
466, registered in the National Register of Corporate Entities (CNPJ) under
N(degrees). 64.083.561/0001-
84, herein represented in accordance with its By-Laws by its executive
directors, Messrs. Xxxxxxxxx Xxxxx Xxxxx Filho and Xxxxxxxx Xxxxxxxxxxx Xxxxx
Xxxxxxx;
NET ANAPOLIS LTDA., a Brazilian limited liability company with principal office
in the city of Anapolis, state of Goias, at Xxx Xxxxx, Xx. 000, registered in
the National Register of Corporate Entities (CNPJ) under N(degrees).
33.584.277/0001-68, herein represented in accordance with its By-Laws by its
executive directors, Messrs. Xxxxxxxxx Xxxxx Valim Filho and Xxxxxxxx
Xxxxxxxxxxx Xxxxx Xxxxxxx;
REYC COMERCIO E PARTICIPACOES LTDA., a Brazilian limited liability company with
principal office in the city of Sao Xxxx, state of Santa Catarina, at Xxx
Xxxxxxxxx Xxxx Xxxxxxxx, X(xxxxxxx). 000, registered in the National Register of
Corporate Entities (CNPJ) under N(degrees). 95.853.263/0001-50, herein
represented in accordance with its By-Laws by its executive directors, Messrs.
Xxxxxxxxx Xxxxx Valim Filho and Xxxxxxxx Xxxxxxxxxxx Xxxxx Xxxxxxx.
ANNEX 2
TO THE
LOAN AGREEMENT
INTERCREDITOR AGREEMENT
ANNEX 3
TO THE
LOAN AGREEMENT
CREDIT PLEDGE AGREEMENT WITH FORECLOSURE CLAUSE - NET SAO PAULO LTDA.,
ANNEX 4
TO THE
LOAN AGREEMENT
CREDIT PLEDGE AGREEMENT WITH FORECLOSURE CLAUSE - NET RIO S.A,
ANNEX 5
TO THE
LOAN AGREEMENT
SHARE PLEDGE AGREEMENT WITH AMICABLE SALE CLAUSE AND OTHER COVENANTS
ANNEX 6
TO THE
LOAN AGREEMENT
QUOTA PLEDGE AGREEMENT WITH AMICABLE SALE CLAUSE AND OTHER COVENANTS
ANNEX 7
TO THE
LOAN AGREEMENT
ASSET PLEDGE AGREEMENT WITH AMICABLE SALE CLAUSE AND OTHER COVENANTS
ANNEX 8
TO THE
LOAN AGREEMENT
GLOSSARY
For the purposes of this Agreement, the terms indicated below shall have the
meaning attributed to them.
"MANAGEMENT INVESTORS" shall mean any officer, director, employee or other
member of the management of Net Servicos or any of its Subsidiaries, as well as
family members, relatives or attorneys-in-fact of any of the above Persons, or
also any of their heirs, executors, successors and legal representatives who, on
any date, have the right to acquire, directly or indirectly, Equity Interests in
the Issuer.
"AFFILIATES" shall mean any Person that, directly or indirectly, controls or is
controlled by or is under the direct or indirect common control with regard to
the specified Person.
"COLLATERAL AGENT" shall mean Banco Itau S.A. or its replacement, nominated in
accordance with the terms of the Intercreditor Agreement
"CASH EQUIVALENTS" shall mean: (i) any evidence of Indebtedness with a maturity
equal to or less than 365 (three hundred and sixty five), issued or guaranteed
by the Federal Government of Brazil or the Federal Government of the United
States, or by any agency or autonomous government entity of the same countries,
provided that the same Indebtedness is unconditionally guaranteed by the Federal
Government of Brazil or by the Federal Government of the United States, as per
the case; (ii) deposits, certificates of deposit or acceptances with a maturity
equal to or less than 365 (three hundred and sixty five) days, issued by a
member institution of the U.S. Federal Reserve System whose combined capital and
surplus and undivided profits, or any similar capital concept, is not less than
US$50,000,000, or its equivalent in another currency or currencies, at the time
of deposit; (iii) commercial paper with a maturity equal to or less than 365
(three hundred and sixty five) days, issued by a corporation (other than an
Affiliate of the Issuer) that is incorporated or organized under Brazilian law
or the laws of any state of the United States, which is rated at least
"A-1" by Standard & Poor's Ratings Services ("Standard & Poor's") or "P-I" by
Xxxxx'x Investor Services Inc. ("Moody's") or any Brazilian affiliate of the
same rating agencies; (iv) investments in any Person with a maturity equal to or
less than 365 (three hundred and sixty five), that are fully and unconditionally
guaranteed by a member bank or institution of the U.S. Federal Reserve System
meeting the requirements of clause (ii) of this definition; (v) repurchase
agreements and reverse repurchase agreements for securities issued or
unconditionally guaranteed by the Federal Government of Brazil or the Federal
Government of the United States, or issued by any agency or autonomous
government entity of the governments of Brazil or the United States, provided
that these are unconditionally guaranteed by the relevant government, in each
case maturing within 1 (one) year or less of the date of acquisition; (vi)
(vi.a) securities issued or fully and unconditionally guaranteed by the Federal
Government of the United States, or issued by any agency or autonomous body of
the government of the same country, provided that these are fully and
unconditionally guaranteed by the relevant government, (vi.b) securities issued
or guaranteed by the government of any other country, or issued by any agency or
autonomous body of the government of the same country, provided that these are
fully and unconditionally guaranteed by the relevant government and have an
investment rating of at least "BBB-", if rated by Standard & Poor's or "Baaa3",
if rated by Moody's, and (vi.c) direct obligations of the National Treasury of
Brazil or of the Central Bank of Brazil that are recorded in the accounts of the
relevant holder as short-term investments; (vii) quotas of fixed-income mutual
funds managed by a financial institution, provided that (a) the same funds are
widely held and Net Servicos and its Restricted Subsidiaries do not hold an
Investment in excess of 30% (thirty per cent) of the aggregate Investment in the
same funds, or (b) the same fund may only invest in Cash Equivalents; (viii)
fixed or floating rate certificates of deposit issued by any bank organized
under Brazilian law that (a) maintains
minimum adjusted shareholders' funds of US$100,000,000 (one hundred million U.S.
dollars), or its equivalent amount in another currency or currencies; (b)
maintains an investment rating with respect to its certificates of deposit, of
at least "BBB-", if rated by Standard & Poor's or "Baaa3", if rated by Moody's
or any other rating agency with a national reputation within Brazil, or (c) is a
branch or subsidiary of a non-Brazilian bank that maintains an investment rating
with respect to its short-term obligations, of at least "BBB-", if rated by
Standard & Poor's or "Baaa3", if rated by Moody's.
"COMPETITOR" shall mean any Person (or Affiliate of any Person) that operates
within Brazil in one or more business areas in which Net Servicos or any one of
its Subsidiaries (including, but not limited to the provision of
telecommunications services, access to the Internet, cable service, satellite
transmission or television (including, but not limited to pay-per-view
services)); with the proviso, however, that any commercial bank, financial
company or fund (or any Affiliate of these) that holds investments in, but does
not control a Competitor, shall not be considered to be a Competitor for the
purposes of this definition.
"INDEPENDENT FINANCIAL ADVISOR" shall mean a Brazilian or United States
investment or commercial bank or independent accounting firm of high reputation
that (a) does not hold, and whose directors and executive officers and
Affiliates, if any, do not hold an investment in Net Servicos or in any of its
Affiliates and (b) which, in the judgment of the Board of Directors of Net
Servicos, is independent of Net Servicos and its Affiliates and is qualified to
perform the task for which it may be retained.
"CONTRACT" or "INCUR" shall mean issue, assume, contract or otherwise become
liable for a Debt, albeit with the proviso that any Indebtedness or Equity
Interest existing at the time when the same Person becomes a subsidiary (whether
through merger, consolidation, acquisition or otherwise) shall be considered to
be Incurred by the same party at the time it becomes a Subsidiary.
"CURRENCY AGREEMENT" shall mean any foreign exchange derivative contract,
including but not limited to currency agreements, currency swap agreements or
other similar contracts or instruments, to which the Person in question is party
or a beneficiary.
"INTEREST RATE AGREEMENT" shall mean, with respect to any Person, any interest
rate derivative agreement, including but not limited to contracts that aim to
protect against movements in interest rates, options on interest rates, interest
rate swaps, caps and collars on interest rates, interest rate futures contracts
or
any other similar instrument, to which the Person in question is party or a
beneficiary.
"MATERIAL CONTRACT" shall mean any contract that provides for the payment or
receipt by Net Servicos or any one of its Restricted Subsidiaries of more than
R$10,000,000 (corrected by the IGP-M Adjustment on January 1 of each fiscal year
subsequent to the date of its execution) or the equivalent amount in another
currency or currencies, or that is otherwise material to the business or
operations of Net Servicos or of its Restricted Subsidiaries, considered as a
whole.
"UNRESTRICTED SUBSIDIARIES" shall mean (a) TV Cabo and Comunicacoes de Jundiai
S.A., (b) Televisao A Cabo Criciuma Ltda., and (c) any other Subsidiary of Net
Servicos that is designated by the Board of Directors as an Unrestricted
Subsidiary, in accordance with the terms of Clause 2.15.
"RESTRICTED SUBSIDIARY" shall mean any Subsidiaries of Net Servicos that are not
Unrestricted Subsidiaries.
"CONTROL" shall mean the power to generate the business of a Person, whether
directly or indirectly, whether through ownership of voting shares, by
contractually guaranteed rights or otherwise. The terms "Subsidiary" and
"Controlling Shareholder" have correlated meanings.
"BOARD RESOLUTION" shall mean a resolution arising from a meeting of the Board
of Directors of Net Servicos that is duly confirmed in the minutes of the
meeting of the Board of Directors at which the same resolution has been adopted,
with the same minutes duly signed by the board of the same meeting, transcribed
in the company ledgers of Net Servicos and registered, where appropriate, at the
Board of Trade of the State of Sao Paulo. A copy of the minutes in question
shall be delivered to the Creditor Institution.
"CONSOLIDATED FINANCING COSTS" shall mean, for any period, the amount equal to
(i) the financial expenses of Net Servicos and its Restricted Subsidiaries for
the same period on a consolidated basis in accordance with Brazilian GAAP minus
(ii) the financial income of Net Servicos and its Restricted Subsidiaries for
the same period, as determined on a consolidated basis in accordance with
Brazilian GAAP.
"CONSOLIDATED INTEREST EXPENSE" shall mean, with respect to any period, the sum,
without duplication, of (a) the interest expense of Net Servicos and its
Restricted
Subsidiaries, accrued and paid or payable in cash for the same period, as
determined on a consolidated basis in accordance with Brazilian GAAP, in any
event, including, without limitation (i) any amortization of debt discount,
excluding any amortization of debt discount with regard to the Senior Secured
Indebtedness, (ii) the net cash cost arising from any Currency Agreement or
Hedging Obligation, including any amortization of discounts, (iii) the interest
portion of any deferred payment obligation, (iv) all commissions, discounts and
other fees and charges owed with regard to letters of credit, bills of exchange,
promissory notes and bankers' acceptances and (b) the interest component of
capitalized lease obligations paid, accrued and/or scheduled to be accrued by
the same Person during the same period, minus (c) interest income of Net
Servicos and its Restricted Subsidiaries, accrued and received or receivable in
cash during the same period, considered on a consolidated basis in accordance
with Brazilian GAAP.
"SENIOR SECURED INDEBTEDNESS" shall mean this Agreement, the Common Terms
Agreement and the respective Instruments of Debt Confession, the Fourth Issue
Debentures, the Company's Notes, as defined in the Intercreditor Agreement
("Notes"), and the notes issued in the context of the exchange offer for the
Floating Rate Notes issued by Net Sul for a consideration of US$80,000,000,
maturing in 2005 ("Net Sul Notes").
EBITDA" shall mean, for any period, the Consolidated Net Income for the same
period, adjusted to exclude the following income or expense items (without
duplication), to the extent that the same items are included in the calculation
of Consolidated Net Income: (i) Consolidated Net Financial Expenses, (ii) total
expenses relating to income tax and social contribution on net income, or other
forms of taxation that may be created, (iii) depreciation, amortization,
including but not limited to the amortization of goodwill and intangibles, and
other charges or losses without effect on the cash position of Net Servicos,
other than charges or losses without effect on the cash position of Net Servicos
that require a provision for future payments; (iv) any net income of any Person
that is not a Restricted Subsidiary; excepting the limitations contained in
clause (v) below, the equity interest of Net Servicos in the net income of the
same Person for the same period shall be included in the same Consolidated Net
Income up to the aggregate amount of cash effectively distributed by the Person
in question during the same period to Net Servicos or a Restricted Subsidiary as
a dividend or other payment of the same nature (subject, in the case of a
dividend or other distribution to a Restricted
Subsidiary, to the limitations contained in clause (v) below); (v) any gain or
loss arising from the disposal of any other form of transfer of any asset of Net
Servicos or of its Restricted Subsidiaries, considered in consolidated form,
that is not disposed of or transferred in any other way in the normal course of
business; (vi) any extraordinary gain or loss; (vii) the cumulative effect of a
change in accounting principles; (viii) any nonrecurring expenses relating to
the Restructuring or to any acquisition by Net Servicos or any Restricted
Subsidiary after the Date of Effectiveness, including but limited to, any charge
and/or expense incurred through bonuses paid to the management of Net Servicos
on account of the Restructuring; (ix) any non-cash compensation charge arising
from any grant of stock, stock options or other similar bonuses.
"REFINANCING INDEBTEDNESS" shall mean Indebtedness that is incurred to refund,
refinance, replace, renew, repay or extend (including that relating to any
defeasance or discharge mechanism) any Indebtedness existing on the Date of
Effectiveness or incurred as a result of the terms of this Agreement (including,
to the extent permitted in this Issue, Indebtedness of Net Servicos that
refinances the Indebtedness of any Restricted Subsidiary, as well as the
Indebtedness of any Restricted Subsidiary that refinances the Indebtedness of
another Restricted Subsidiary) including the Indebtedness that finances
Refinancing Indebtedness, provided that:
(i) the Refinancing Indebtedness matures after the Indebtedness to be
refinanced;
(ii) at the time of contracting such Refinancing Indebtedness, it has a weighted
average maturity that is equal to or greater than the weighted average maturity
of the Indebtedness to be refinanced;
(iii) such Refinancing Indebtedness is incurred in an aggregate principal
amount, or if issued at a discount to face value, at a total issue price that is
equal to or less than the sum of (a) the aggregate principal amount, or if
issued at a discount to face value, the aggregate accreted value outstanding of
the Indebtedness to be refinanced, plus (b) fees, underwriting discounts,
premiums and other costs and expenses incurred in conjunction with the same
Refinancing Indebtedness; and
(iv) Refinancing Indebtedness shall not include (a) Indebtedness of Restricted
Subsidiaries that are not guarantors of the refinancing of the Indebtedness of
Net Servicos or (b) the Indebtedness of Net Servicos or of a Restricted
Subsidiary that refinances the Indebtedness of an Unrestricted Subsidiary.
"CONSOLIDATED TOTAL INDEBTEDNESS" shall mean the aggregate principal amount of
Indebtedness of Net Servicos and its Restricted Subsidiaries on any date,
determined in consolidated form in accordance with Brazilian GAAP.
"INDEBTEDNESS" shall mean, with respect to any Person, without duplication:
(i) any liability, contingent or otherwise, of the same Person (a) relating to
money borrowed by the Person in question, that may or may not be guaranteed in
full or in part by the assets of the same, whether as a cash advance, xxxx,
overdraft or loan agreement; (b) evidenced by a debenture or similar instrument
or by letters of credit, including Purchase Obligations, or any book-entry
security, or (c) unless otherwise determined in this Glossary, instruments
signed with such Persons for the purpose of hedging against movements in
exchange and interest rates (the amount of any such obligation shall be equal at
any time to the value of the hedge that would be paid or received by the same
Person upon its termination);
(ii) any third-party liability similar to those described in subclause (i)
above, which is guaranteed by the Person or for which the same Person is legally
liable;
(iii) any obligation secured by a Lien on the property or assets of the Person,
regardless of whether the guaranteed obligations have been directly assumed by
the Person or for which the same party comes to be legally liable;
(iv) the maximum repurchase or redemption price of any share or quota
representing the capital stock, equity interests, partner's rights,
participation certificates or any other securities that confer a share of the
net income and that carry a repurchase/redemption obligation, or that are
convertible into Indebtedness (except where this is at the option of Net
Servicos) of the same Person, that is not held by Net Servicos or by one of its
Restricted Subsidiaries;
(v) for the exclusive purpose of calculating Consolidated Total Indebtedness in
accordance with Clause 2.10 of the Agreement, "Indebtedness" shall mean (a) debt
securities that are overdue by 60 (sixty) days or more and that are not being
contested in good faith by the same Person, (b) all Capitalized Lease
Obligations to which the same Person is a party and (c) deferred obligations
relating to the purchase price for the assets of the same Person, provided that
the same deferred purchase price is due after 120 (one hundred and twenty) days
reckoned from the date of delivery of the asset in question.
For purposes of Clauses 2.10 and 5.1 of the Agreement, in determining the
principal amount of any Indebtedness that may be incurred by Net Servicos or by
any one of its Restricted Subsidiaries or that is outstanding on any date, (x)
shall be considered on the date of determination as the principal amount of the
Indebtedness to be paid in the event of declaration of early maturity of the
respective indebtedness, if this value is less than the amount of the principal
indebtedness effectively due with regard to the same indebtedness, and (y) the
amount of any such Indebtedness shall be reduced by the amount of any net gain
related to any Currency Agreement linked to the same Indebtedness.
"EXCESS CASH FLOW" shall mean, for any fiscal year, the sum of (i) (a) the cash
and Cash Equivalents of Net Servicos and its Restricted Subsidiaries, taking as
a basis the last day of the same fiscal year minus (b) the Starting Cash Balance
of Net Servicos minus (ii) the Net Cash Proceeds arising from the issuance by
any Equity Interests of Net Servicos during the same fiscal year minus (iii) the
Net Cash Proceeds of Net Servicos obtained through the incurring of any
Indebtedness by Net Servicos or by any one of its Restricted Subsidiaries during
the same fiscal year minus (iv) the Net Cash Proceeds arising from any Asset
Sale during the same fiscal year plus (v) the amount of any Investment by Net
Servicos or any of its Restricted Subsidiaries in any Person that, as a result
of the same Investment, becomes a Restricted Subsidiary, as well as any amount
paid by Net Servicos or any of its Restricted Subsidiaries to acquire any person
or any business or any group of assets
constituting an operating unit of a business (any one of these operations
constituting a "Purchase"), plus (vi) the amount of any prepayments of principal
in respect of Senior Secured Indebtedness during the same fiscal year plus (vii)
the amount of any cash dividend or other cash payment in favor of Net Servicos
arising from its Equity Interests, with the proviso that:
(a) if Net Servicos or any Restricted Subsidiary has, within the same fiscal
year, made any Asset Sale of any person, business or any group of assets
constituting an operating unit of a business (any one of these operations
constituting a "Sale"), the Starting Cash Balance for the same fiscal year
shall, for the purpose of measuring Excess Cash Flow relating to the same fiscal
year, be reduced by an amount equal to the amount of cash or Cash Equivalents
transferred in connection with the same Sale; and
(b) if Net Servicos or any Restricted Subsidiary has, within the same fiscal
year, made any Purchase, the Starting Cash Balance for the same fiscal year
shall, for the purpose of measuring Excess Cash Flow relating to the same fiscal
year, be increased by an amount equal to the amount of cash or Cash Equivalents
acquired in connection with the same Purchase.
"GUARANTEE" shall mean any guarantee that may be granted in accordance with the
terms of this Agreement.
"PERMITTED LIENS" shall mean:
(i) the Liens in existence on the date of signing of the Agreement;
(ii) any Lien on any property acquired, constructed or improved by Net Servicos
or any of its Restricted Subsidiaries after the date of signing of the
Agreement, which has been created, incurred or assumed at the same time as or
within 90 (ninety) days of the relevant acquisition, in order to guarantee the
payment of any portion of the price of acquisition, construction or rebuilding,
including readjustments, interests and financial charges incurred during the
construction, as well as eventual increases in costs. In the event that the same
property has been built or rebuilt, the period of 90 (ninety) days mentioned
above shall be reckoned starting from the end of the relevant building or
rebuilding or from the start of the commercial use of the property in question,
whichever occurs last:
(iii) any Lien that secures all Senior Secured Indebtedness in same proportion
and on an equivalent basis;
(iv) any Guarantee granted in accordance with the Pledge Agreements and the
Intercreditor Agreements;
(v) any Lien on any asset or good acquired by Net Servicos that was already in
existence at the time of acquisition of the same asset, and that in no way
arises from the acquisition of the same, unless the same Lien was created to
secure or provide for payment of part or all of the purchase price;
(vi) any Lien on any asset acquired from a Person that is merged with or
incorporated by Net Servicos or by any one of its Restricted Subsidiaries, or
any Liens already in existence on any asset of a Person at the time that it
becomes a subsidiary of Net Servicos and that does not result in any way from
the operation in question, unless the same Lien was created to secure or provide
for the payment of part or all of the operation;
(vii) any Lien which exclusively guarantees the Indebtedness between (a) Net
Servicos and any one of its Restricted Subsidiaries or (b) the Restricted
Subsidiaries and Net Servicos or between Restricted Subsidiaries;
(viii) any extension, renewal or replacement (or successive extensions, renewals
or replacements), in whole or in part, of any Lien referred to in the preceding
clauses (i) through (vii) inclusive, with the proviso that the principal amount
of Indebtedness to be secured may not exceed the amount of principal guaranteed
immediately prior to the extension, renewal or replacement , and that the
extension, renewal or replacement in question shall be limited to the whole or
part of the property, including the improvements carried out, to which the Lien
to be extended, renewed or replaced shall apply;
(ix) any Lien related to disputes regarding the payment of outstanding taxes
which are being contested diligently and in good faith, in accordance with
appropriate actions or proceedings, provided that provisions for the contested
amounts are made in the accounting ledgers of Net Servicos and/or the its
Restricted Subsidiaries;
(x) Liens (including Liens associated with the granting of any surety letter)
that are not Guarantees arising from Judicial or Administrative actions against
Net Servicos, for which the same Issuer has diligently and in good faith
presented a defense or appeal, as per the case, and the decision, sentence or
judgment has not yet been judged, or if the period within which such defense,
appeal or proceedings may be initiated has not yet expired, with the purpose of
guaranteeing the right of defense or recourse in such judicial or administrative
actions and that effectively prevent the foreclosure of the same Lien;
(xi) Liens created by legal imposition that arise in the normal course of
business;
(xii) Easements, rights-of-way, restrictions and other similar encumbrances
incurred in the normal course of business;
(xiii) Liens incurred in the normal course of business in connection with
workers' compensation claims, unemployment insurance and social security
benefits, as well as Liens granted to ensure the performance of bids, tenders,
leases and other contracts signed in the ordinary course of business, surety
letters, performance bonds and other obligations of a similar nature incurred in
the ordinary course of business, as well as Liens constituted due to legal
imposition;
(xiv) Liens relating to maintenance services, the provision of programming
services, rental of real estate and any other similar Liens arising in the
ordinary course of business relating to obligations that have not been overdue
for more than 60 (sixty) days, or that are guaranteed or that are being
contested diligently and in good faith, in accordance with suitable actions and
procedures, that effectively prevent the discussion of the same Lien;
(xv) pledges, deposits and other Liens that guarantee the performance of
proposals, bids, operations and other contracts (other than for borrowed money),
incurred in the ordinary course of business;
(xvi) Leases, subleases, licenses or sublicenses to third parties;
(xvii) Liens securing obligations arising from Currency Agreements and/or
Interest Rate Agreements incurred in accordance with Clause 2.10 of the
Agreement, provided that the lesser of (a) the Fair Market Value and (b) the
book value of the Liens securing obligations arising from Currency Agreements
and/or Interest Rate Agreements, at no time exceeds R$50,000,000 (fifty million
Brazilian reais), with this amount corrected by the IGP-M Adjustment on January
1 of each fiscal year after June 30, 2004;
(xviii) Any easement or immaterial imperfection of title on real estate in which
Net Servicos or any Restricted Subsidiary has an interest, provided that such
easement or imperfection shall not render such title unusable for purposes of
the business of Net Servicos or the Restricted Subsidiary in question;
(xix) Liens arising from capital leasing operations and Indebtedness associated
with Purchase Obligations, provided that these are in accordance with Clause
2.10.3 of the Agreement and that such guarantees shall be restricted to the
properties or assets underlying such capital leasing operations;
"LIENS" shall mean any real encumbrance, mortgage, charge, pledge, usufruct,
lien, right of preference or priority, assignment for security, claim of rights
or other guarantee or right of any kind on any property or assets of any kind.
Notwithstanding the previous definition, a property shall be considered to be
subject to a Lien when the acquisition or maintenance of the same property by a
Person shall be restricted by any contingent sale and purchase contract,
financial lease or other similar instrument that restricts rights of ownership,
as well as its use or enjoyment, whether fully or in part.
"HEDGING OBLIGATIONS" shall mean the obligations of a Person relating to
Interest Rate or Currency Agreements.
"CONSOLIDATED LEVERAGE RATIO", shall mean the ratio, on any date, of (i) Total
Consolidated Indebtedness, as determined on the same date, to (ii) EBITDA for
the period of the most recent four consecutive fiscal quarters for which
consolidated financial statements of Net Servicos are available, with the
proviso that:
(ii.a) if, since the beginning of the same period, Net Servicos or any
Restricted Subsidiary has made any Asset Sale of any person, business or any
group of assets constituting an operating unit of a business (each of these
operations constituting a "Sale"), the EBITDA for the same period shall be
reduced by an amount equivalent to
the EBITDA (if positive) directly attributable to the assets forming the object
of the Asset Sale in question for the period under consideration, or increased
by an amount equal to EBITDA (if this is negative) directly attributable to the
assets forming the object of the same Asset Sale during the period under
consideration;
(ii.b) if Net Servicos or any Restricted Subsidiary has made an Investment (by
incorporation, merger or otherwise) in any Person that thereby becomes a
Restricted Subsidiary, or through the acquisition of any person, business or
group of assets constituting an operational business unit, including any
Investment or acquisition of assets within the context of a transaction that
makes it necessary to carry out the calculation to which this item refers (each
one of these operations constituting a "Purchase"), the EBITDA for the same
period shall be calculated on a pro forma basis (including the incurring of any
Debt), as if the same Investment or acquisition had occurred on the first day of
the relevant period; and
(ii.c) if any Person which, during the period in question, came to be considered
as a Restricted Subsidiary, merged with or was incorporated by Net Servicos or
any Restricted Subsidiary and that carried out any Sale or Purchase which, if
the same operation had been carried out by Net Servicos or a Restricted
Subsidiary, would have given rise to an accounting adjustment in accordance with
the terms of subclauses (ii.a) and (ii.b) above, the EBITDA for the same period
shall be calculated on a pro forma basis, as if the Sale or Purchase in question
had occurred on the first day of the same period.
For purposes of this definition, whenever it is necessary to make a pro forma
calculation for an Asset Sale, Investment, acquisition of assets or any
transaction made in accordance with Clause 2.16 of the Agreement, or of the
amount of revenues or capital gains arising from the operations in question, the
applicable pro forma calculations shall be carried out in the determined manner
and in good faith by a director of Net Servicos on the basis of reasonable
assumptions.
"CONSOLIDATED INTEREST EXPENSE RATIO" shall mean the ratio between: (i) EBITDA
for the period consisting of the four most recent consecutive fiscal quarters
ending prior to the date of determination for which the consolidated financial
statements of Net Servicos are available, minus the total Capital Expenditure
for the same period, and (ii) the Net Consolidated Interest Expense for the same
four fiscal quarters, determined, in each case, for each fiscal quarter (or
portion thereof) of the four fiscal quarters ending prior to the date of signing
of the Agreement, calculated on a pro forma basis to simulate the Restructuring
as if it had occurred at the beginning of the same four-quarter period, with the
proviso that:
(a.1) if Net Servicos or any Restricted Subsidiary (i) has incurred any
Indebtedness since the beginning of the same period that has not been paid in
full by the date of determination or has incurred any Indebtedness since the
start of the same period, and on the date of determination of the Consolidated
Interest Expense Ratio, the same has
not been paid in full, or if the transaction giving rise to the need to
calculate the Consolidated Interest Expense Ratio is an Incurrence of Debt, then
the EBITDA and Consolidated Interest Expense for the same period shall be
calculated after calculating the same Indebtedness on a pro forma basis, as if
the same Indebtedness had been incurred on the first day of the same period
(albeit for this calculation, the amount of Indebtedness arising from any
revolving credit facility outstanding on the date of the same calculation shall
be computed based on (x) the average daily balance of the same Indebtedness
during the same four fiscal quarters or during any shorter period for which the
same facility was outstanding or (y) the average daily balance of the same
Indebtedness during the period from the date of creation of the same facility
until the date of the same calculation, in the event that the same facility was
created after the end of the same four fiscal quarters), or (ii) has, during the
period for the same calculation, repaid, repurchased, redeemed or otherwise
discharged any Indebtedness (each the same operation constituting a
"Discharge"), with the same Indebtedness no longer outstanding on the date of
the calculation, or if the transaction giving rise to the need to calculate the
Consolidated Interest Expense Ratio involves a discharge of Indebtedness
(provided that the Indebtedness does not relate to any revolving credit facility
that remains to be permanently repaid), the EBITDA and Consolidated Interest
Expense for the same period shall be calculated after calculating the Discharge
of the same Indebtedness on a pro forma basis, as if the same discharge had
occurred on the first day of the same period of calculation;
(a.2) if Net Servicos or any Restricted Subsidiary has, during the calculation
period, made any Asset Sale of any person, business or any group of assets
constituting an operating unit of a business (any the same transaction
constituting a "Sale"), the EBITDA for the same period shall be calculated (x)
by subtracting an amount equal to EBITDA (if positive) directly attributable to
the assets that are the subject of the same Asset Sale for the same period or
increased by an amount equal to the EBITDA (if positive) directly attributable
to the same assets forming the object of the Asset Sale carried out during the
same period, or (y) by adding an amount equal to the EBITDA (if negative)
directly attributable to the same assets forming the object of the Asset Sale
carried out during the same period. To the degree that Net Servicos or any
Restricted Subsidiary is no longer responsible for the same Indebtedness after
the same Asset Sale, the Net Consolidated Interest Expense for the same period
shall be reduced by an amount equivalent to the Net Consolidated Interest
Expense of Net Servicos or any Restricted Subsidiary that has been
paid, repurchased, defeased or otherwise discharged as a result of the same
Asset Sale during the period in question (and if significant Equity Interests in
the Capital Stock of any Restricted Subsidiary are disposed of, this amount
shall be the Net Consolidated Interest Expense for the same period directly
attributable to the Indebtedness of the same Restricted Subsidiary);
(a.3) if during the same calculation period, Net Servicos or any Restricted
Subsidiary (whether by incorporation, merger or otherwise) has made an
Investment in any Person, as a result of which the latter Person becomes a
Restricted Subsidiary, or otherwise acquires any person, business or group of
assets constituting an operating unit of a business, including any the same
Investment or acquisition of assets that gives rise to an obligation to
calculate the Consolidated Interest Expense Ratio in accordance with the
definition herein (any one of these transactions constituting a "Purchase"), the
EBITDA and Consolidated Interest Expense for the same period shall be calculated
after calculating the value of the same Investment or acquisition on a pro forma
basis (including the incurring of any Indebtedness), as if the same Investment
or acquisition had occurred on the first day of the same period;
(a.4) if any Person that comes to be considered as a Restricted Subsidiary
during the period in question or that merged with Net Servicos or with any
Restricted Subsidiary or was incorporated by the same companies, has carried out
any Sale or Purchase that would have required an accounting adjustment in
accordance with subitems (a.1), (a.2) or (a.3) above, the EBITDA and
Consolidated Interest Expense for the period in question shall be calculated
after calculating the effect of the same operation on a pro forma basis, as if
it had occurred on the first day of the same period; and
(a.5) if any Person that comes to be considered as a Restricted Subsidiary
during the period in question or that merged with Net Servicos or with any
Restricted Subsidiary or was incorporated by the same companies, and in any
case, by means of a Purchase has discharged any Indebtedness or carried out any
Sale or Purchase which, if effected by Net Servicos or by a Restricted
Subsidiary during the period in question, would have required an accounting
adjustment in accordance with subitems (a.1), (a.2), (a.3) or (a.4) above, the
EBITDA and the Net Consolidated Interest Expense for the period in question
shall be calculated after calculating the effect of the Sale, Purchase or
Discharge in question on a pro forma basis, as if the same operation had
occurred on the first day of the relevant period.
For the purposes of this definition, whenever it is necessary to calculate on a
pro forma basis the effect of a Asset Sale, Investment or acquisition of assets
or any transaction governed by the provisions of Clause 2.16 of the Agreement,
the EBITDA for the operations in question and the Net Consolidated Interest
Expense associated with any Indebtedness incurred, repaid, repurchased, defeased
or otherwise discharged as a result
of the operations in question, the associated pro forma calculations shall be
carried out by a Director of Net Servicos, based on reasonable assumptions, in
the manner determined in this Agreement and in good faith. If any Indebtedness
bears a floating rate of interest and is being calculated on a pro forma basis,
the interest expense on the same Indebtedness shall be calculated as the average
rate in effect during the same period (taking into account any Interest Rate
Agreement that applies to the same Indebtedness and that remains in force for an
additional period of 12 months reckoned from the relevant calculation date). For
the pro forma calculation of any Indebtedness arising in conjunction with a
revolving credit facility, the interest expense on the same Indebtedness shall
be calculated on the basis of the average daily balance of this Indebtedness
during the period in question.
"DEBT INSTRUMENTS" shall mean this Agreement, the Common Terms Agreement and the
respective Instruments of Debt Confession, as defined in the Intercreditor
Agreement ("Notes"), and the notes issued in the context of the exchange offer
for the Floating Rate Notes issued by Net Sul for an amount of US$80,000,000
maturing in 2005 ("Net Sul Notes"), as well as any Secured Senior Indebtedness
that may be contracted by Net Servicos and the Restricted Subsidiaries.
"PERMITTED INVESTMENT" shall mean an investment carried out by Net Servicos or
by any Restricted Subsidiary:
(i) in a Restricted Subsidiary, in Net Servicos or in a Person which, as a
result of the effecting of the same Investment, comes to be considered as a
Restricted Subsidiary;
(ii) in another Person if, as a result of the same Investment, the same Person
merges with Net Servicos or with any Restricted Subsidiary, or is incorporated
by the same;
(iii) Cash Equivalents;
(iv) receivables of Net Servicos or of any Restricted Subsidiary that are
created or acquired by Net Servicos or by any Restricted Subsidiary in the
regular course of business, in accordance with normal market practices;
(v) securities or other Investments received as consideration for disposals of
property or assets, including Asset Sales made in accordance with the terms of
Clause 2.1.1 (IV) of this Agreement, that have been negotiated in accordance
with normal market practices;
(vi) securities or other Investments received as payment for credits due to Net
Servicos or to any Restricted Subsidiary in the ordinary course of business, or
as a result of the execution or foreclosure of any Lien, or in compliance with
any judicial order, including such orders relating to bankruptcy, composition
with creditors or any similar procedure;
(vii) Investments in existence or validly agreed in writing on the date of
signing of the Agreement;
(viii) deposits constituted in favor of third parties in the normal course of
business with respect to leases or the provision of any public service, in
accordance with the definition of "Permitted Liens" or as agreed under the terms
of Clause 2.9 of the Agreement;
(ix) prepaid expenses, including trade credits, arising during the normal course
of business;
(x) promissory notes issued by Management Investors, acquired as full payment
for shares issued by Net Servicos, whose aggregate principal amount at no time
exceeds R$10,000,000 (ten million Brazilian reais), corrected by the IGP-M
Adjustment on January 1 of each fiscal year following the Date of Effectiveness;
(xi) other Investments that do not exceed the following amounts, in each case
corrected by the IGP-M Adjustment on January 1 of each fiscal year following the
Date of Effectiveness;
(a) R$ 10,000,000 (ten million Brazilian reais), during the fiscal year ending
December 31, 2005;
(b) R$ 20,000,000 (twenty million Brazilian reais), during the fiscal year
ending
December 31, 2006; and
(c) R$ 35,000,000 (thirty five million Brazilian reais), during the fiscal year
ending December 31, 2007 and during each subsequent fiscal year.
"INVESTMENT" shall mean, with regard to any Person, any (i) advance, loan
agreement, receivable or extension of credit (including but not limited to those
arising from guarantees); (ii) full payment of capital with credits, goods or
rights; or (iii) the acquisition of shares, quotas, notes or other debt
securities, or any other negotiable securities issued by any Person.
Notwithstanding the above terms, the issue by Net Servicos of shares or quotas
representing the capital stock, equity interests, partners' rights,
participation certificates or any other securities that confer a right to a
share in the results of Net Servicos (except where these carry a redemption or
repurchase obligation) for exchange for shares or quotas representing the
capital stock, equity interests, partners' rights, participation certificates or
any other securities that confer a right to a share in the results of another
Person or for exchange for assets of another Person shall not be considered to
be an Investment by Net Servicos in the same Person.
"CAPITAL EXPENDITURES" shall mean, with regard to any Person, the sum (without
duplication) of all the investments that have been made, at any time, whether
directly or indirectly, by the Person in question or by any one of its
subsidiaries, in equipment, fixed assets, chattels or improvements, as well as
the respective replacements or substitutions that, in accordance with Brazilian
GAAP, are or should be recorded in the accounts as fixed assets.
"CONSOLIDATED NET INCOME" shall mean, for any period, the net income (loss) of
Net Servicos and its Subsidiaries, determined on a consolidated basis in
accordance with Brazilian GAAP.
"PRE-RESTRUCTURING DEBT" shall mean the amount of R$ 606,781,497.00 with this
amount on Brazilian reais equivalent to US$ 248,777,479.00, on the basis of the
Exchange Rate on the Date of Effectiveness.
"PERMITTED BUSINESS" shall mean (i) the distribution of signals for pay TV,
radio, internet or the provision of other telecommunications services within
Brazil and (ii) any business activity related to item (i) above, carried out by
Net Servicos or any Restricted Subsidiary on the Date of Effectiveness, as well
as the acquisition, interest in or exploitation of any license relating to the
business activities described in item (i) of this definition, the development or
acquisition of programming or distribution rights in accordance with item (i) of
this definition and any other business involving voice, data or video
transmission and telecommunications services.
"PURCHASE OBLIGATIONS" shall mean any Indebtedness Incurred to finance or
refinance the deferred payment of any property or assets used in the normal
course of business of Net Servicos and its subsidiaries, provided that this
Indebtedness is incurred within 6 (six) months of the acquisition of such
property or assets.
"EQUITY INTERESTS" shall mean shares, quotas, warrants, options or other rights
to subscribe to shares and/or quotas, albeit while excluding any debt security
convertible into shares and/or quotas.
"APPLICABLE PERCENTAGE" shall mean (i) with respect to the fiscal years ending
on or prior to December 31, 2007, 70%; (ii) with respect to the fiscal year
ending December 31, 2008, 75%; (iii) with respect to the fiscal year ending
December 31, 2009, 80%; and (iv) with respect to the fiscal years ending on or
after December 31, 2010, 85%.
"VOLUNTARY PREPAYMENT PERCENTAGE" shall mean, with regard to any voluntary
prepayment of Senior Secured Indebtedness, a fraction, represented as a
percentage, the numerator of which is the principal amount of the same Senior
Secured Indebtedness to be prepaid and the denominator is the total principal
value of the obligations relating to the same Senior Secured Indebtedness
immediately prior to such prepayment.
"PREPAYMENT PERCENTAGE" shall mean, for any date of determination, a fraction,
represented in percentage form, the numerator of which is the principal amount
of the Notes outstanding on such date and the denominator, the principal amount
of Senior Secured Indebtedness due on the date of calculation.
"REINVESTMENT PERIOD" shall mean a period of 60 (sixty) days, reckoned from the
receipt of any cash proceeds arising from a Sale of Assets.
"EXCESS CASH FLOW PREPAYMENT AMOUNTS" shall mean, with respect to any fiscal
year, the lesser of (i) the Excess Cash Flow of Net Servicos for the relevant
fiscal year multiplied by the Applicable Percentage for the same fiscal year and
(ii) the difference between (a) the cash and Cash Equivalents of Net Servicos
and its Restricted Subsidiaries on December 31 of the same fiscal year less (b)
the Minimum Cash Balance for the same fiscal year.
"EXCESS SHARE ISSUANCE PROCEEDS FROM THE RESTRUCTURING" shall mean the Net Cash
Proceeds obtained by Net Servicos through the issuance of shares in connection
with the Restructuring minus (i) an amount equivalent to 40% (forty per cent) of
the amount of Pre-Restructuring Indebtedness minus (ii) the value equivalent to
40% (forty per cent) of interest payments in cash by Net Servicos to Creditors
holding its debt securities in connection with the Restructuring minus (iii) the
value equivalent to 20% (twenty per cent) multiplied by (a) the total number of
shares issued by Net Servicos in the context
of the Restructuring at a price per share exceeding R$ 0.35 (thirty five cents)
multiplied by (b) the difference between the average issue price per share of
the same shares and R$ 0.35 (thirty five cents).
"EXCESS PROCEEDS" shall mean any cash proceeds arising from a Asset Sale that
are not applied or invested in accordance with Clause 3.12.1. (IV).
"NET CASH PROCEEDS" shall mean, with respect to any Asset Sale, or the Incurring
or issuance of any Indebtedness or the sale or issuance of any shares or quotas
representing the capital stock, equity interests, partner's rights,
participation certificates or any other securities that confer the right to
participate in the results (including, but not limited to any capital
contribution) of any Person, the total aggregate amount of cash, Cash
Equivalents or securities acquired as a result of a Asset Sale and converted
into cash within 30 (thirty) days of the date of the same acquisition, that are
received periodically (whether in lieu of initial remuneration, payment or
deferred remuneration) for or in the name of the Person in question and in
connection with the above operations, after deducting (without duplication) (a)
reasonable and customary brokerage commissions, underwriting fees and discounts,
remuneration fees, and other similar fees and commissions; (b) the total amount
of taxes paid or payable in connection with or as a result of the same
transaction; and (c) with respect to any Asset Sale, (x) all payments arising
from any Indebtedness that are secured on any assets forming the object of the
Asset Sale in question, in accordance with the terms of any Lien upon such
assets, or that must, in accordance with its terms, or in order to obtain the
necessary consent for the same Asset Sale, or by virtue of the applicable law,
be repaid from the proceeds from the Asset Sale in question and (y) all
distributions and other payments due to minority interest holders in
subsidiaries or joint ventures as a result of the same Asset Sale, or to any
other Person (other than Net Servicos or a Restricted Subsidiary) that holds
rights to the assets disposed of in the Asset Sale in question.
"RESTRUCTURING" shall mean the exchange of the existing Indebtedness of Net
Servicos and some of its Restricted Subsidiaries (including, but not limited to
the U.S. 12 5/8% Senior Guaranteed Notes maturing in 2004, the Net Sul floating
rate notes, the existing working capital and bank loan facilities and the
convertible and non-convertible debentures denominated in Brazilian reais) for
Senior Secured Indebtedness and payment in cash.
"INITIAL CASH BALANCE" shall mean the cash and Cash Equivalents of Net Servicos
and its Restricted Subsidiaries, considering as a basis, the last day of the
immediately preceding fiscal year.
"MINIMUM CASH BALANCE" shall mean R$ 120,000,000 (one hundred and twenty million
Brazilian reais) (i) corrected on January 1 of each year by the IGP-M
Adjustment, or any index that may replace it by the reference date, and (ii)
adjusted in accordance with any expense still outstanding that has been
contracted by the end of the immediately preceding fiscal year.
"PERSON" shall mean any individual, corporation, company, limited company,
voluntary association, joint venture, trust, autonomous government entity,
non-corporate organization or government (or any agency, sector or political
subdivision of the same) or any other entity of any nature.
"FAIR MARKET VALUE" shall mean, with respect to any asset or property, the price
at which the same asset could be negotiated in a transaction under normal market
conditions for cash payment, between a seller and buyer that are both free from
any pressure or compulsion to complete the transaction. Unless otherwise
specified in this Agreement, the Fair Market Value shall be determined in good
faith by the Board of Directors of Net Servicos, and must be approved by a
Resolution of the Board of Directors; albeit, in the event of any transaction or
series of related transactions which, during any period of 12 (twelve)
consecutive months that involves an aggregate consideration equal or greater
than R$ 75,000,000 (seventy five million Brazilian reais) (with this amount
increased by the IGP-M Adjustment on January 1 of each fiscal year following the
date of signing of the Agreement), or the equivalent amount in another currency,
in which the Fair Market Value shall also be determined by an Independent
Financial Consultant.
"IGP-M ADJUSTMENT" shall mean, on any date of determination, a fraction, the
numerator of which is the General Price Index-Market (IGP-M) as calculated and
published by the Xxxxxxx Xxxxxx Foundation - FGV ("IGP-M") on the same date and
the denominator of which is the IGP-M index for January 1, 2004.
"ASSET SALE" shall mean any direct or indirect sale, leasing, conveyance,
transfer or other disposal of shares of Capital Stock of a Restricted Subsidiary
(other than shares held by members of the Board of Directors, or to the extent
required by applicable law), property or other assets, including any licenses
for the provision of cable television services or other related activities
carried out by Net Servicos or by any Restricted Subsidiary, (each the same
activity constituting a "Disposal" for the purposes of this definition) by Net
Servicos or any of its Restricted Subsidiaries (including any disposal by means
of a merger, consolidation or similar operation) Notwithstanding the preceding
provisions, the following operations shall not be considered as Asset Sales:
(i) a disposal by Net Servicos to a Restricted Subsidiary or by a Restricted
Subsidiary to Net Servicos or to another Restricted Subsidiary;
(ii) any disposal arising in the ordinary course of business, including any
disposal of (ii.a) inventory, (ii.b) obsolete assets or (ii.c) surplus assets,
or any disposal of Cash Equivalents, or any non-exclusive licensing of
intellectual property rights;
(iii) transactions over any 12 (twelve) month period that involve assets whose
Fair Market Value is less than R$ 3,000,000 (three million Brazilian reais), the
amount of which shall be increased by the IGP-M Adjustment on January 1 of each
fiscal year, from January 1, 2004 onwards;
(iv) any swap of operating assets by Net Servicos or any of its Restricted
Subsidiaries for operating assets of value equal or greater than its Fair Market
Value;
(v) the definitive Disposal, under normal market conditions, of receivables or
securities representing receivables, arising in the normal course of business
and existing at the time of the same sale, or conversion or swap, in the normal
course of business, of the same receivables for securities representing
receivables that are characterized as a "Permitted Investment";
(vi) a Restricted Payment that is permitted under the terms of Clause 2.11 of
the Agreement; or
(vii) any disposal of assets permitted under the terms of Clause 2.16 of the
Agreement.
ANNEX 9
TO THE
LOAN AGREEMENT
PROMISSORY NOTE MODEL
Amount: R$ [ ]
Place of Issue: Sao Paulo, SP
Date of Issue: [ ]
Maturity: Immediate
Through this Promissory Note, Net Sul Comunicacoes Ltda. shall pay
unconditionally to [ ] ("Creditor Institution"), or to its order, the total
amount of R$ [ ] ([ )], with all the additions established herein.
Remuneratory interest ("Interest") shall accrue on the amount of this Promissory
Note corresponding to (a) the CDI plus a spread of 2% (two percent) per year
between this date and December 14, 2005 and, (b) CDI plus a spread of 3% (three
percent) from December 15, 2005 (inclusive) until the final payment of this
amount.
For the purposes of this Promissory Note, "CDI" shall mean an interest
rate, expressed as annual percentage, which corresponds to the result of the
daily compounding, calculated on the basis of a year of 252 business days, of
the interest rate for interbank certificates of deposit (CDI) for one business
day, published by the Central de Custodia e de Liquidacao Financeira de Titulos
(CETIP) [Securities Custody and Settlement Center] under the title of "Taxa DI -
Over Extragrupo" (DI Rate - Overnight Extragroup) or any reference rate of the
Brazilian Financial System that may replace it. The spread shall be calculated
on the basis of a year of 252 business days.
In the event of delay in effecting the payments due, the amount of this
Promissory Note shall be subject to late payment interest of 12% (twelve
percent) per year, pro rata die, from the date of its submission to the date of
effective payment and of a fixed late payment fine of 2% (two percent) on the
overdue amount, without affecting the Interest that shall continue to accrue
until the date of effective payment.
The payment established in this Promissory Note shall be made in the city of Sao
Paulo, State of Sao Paulo, to the Creditor Institution, or to its order.
The term for presentation of this Promissory Note is of up to 12 (twelve) years
counting from its date of issue, hereby extending the submission period covered
by Article 34 of the Uniform Geneva Law and Article 21 of Decree 2,044, of
December 31, 1908.
This Promissory Note is linked to the Loan Agreement signed by the Creditor
Institution and the signatories hereof on [ ] and guarantees the obligations
assumed in the same agreement.
NET SUL COMUNICACOES LTDA.
----------------------------------------
Name:
Title:
----------------------------------------
Name:
Title:
AVAL GUARANTEE:
NET SERVICOS DE
COMUNICACAO X.X.
XXXXX ALUMINIO DO NORTE LTDA.
ANTENAS COMUNITARIAS
BRASILEIRAS LTDA.
CABODINAMICA TV CABO
SAO PAULO S.A.
CMA PARTICIPACOES S.A.
DABNY, L.L.C.
DR EMPRESA DE DISTRIBUICAO
E RECEPCAO DE TV LTDA.
HORIZONTE SUL
COMUNICACOES LTDA.
JONQUIL VENTURES LIMITED
MULTICANAL
TELECOMUNICACOES S.A.
NET ANAPOLIS LTDA.
NET ARAPONGAS LTDA.
NET BAURU LTDA.
NET BELO HORIZONTE LTDA.
NET BRASILIA LTDA.
NET CAMPINAS LTDA.
NET CAMPO GRANDE LTDA.
NET CURITIBA LTDA. NET FLORIANOPOLIS LTDA.
NET FRANCA LTDA.
NET GOIANIA LTDA.
NET INDAIATUBA LTDA.
NET JOINVILLE LTDA.
NET LONDRINA LTDA.
2
NET MARINGA LTDA.
NET PARANA COMUNICACOES LTDA.
NET PIRACICABA LTDA.
NET RECIFE LTDA.
NET RIBEIRAO PRETO S.A.
NET RIO S.A.
NET SAO XXXXXX S.A.
NET SAO XXXX DO RIO PRETO LTDA.
NET SAO PAULO LTDA.
NET SOROCABA LTDA.
REYC COMERCIO
E PARTICIPACOES LTDA.
TV CABO DE CHAPECO LTDA.
TV VIDEO CABO
DE BELO HORIZONTE S.A.
----------------------------------------
Name:
Title:
----------------------------------------
Name:
Title:
3
ANNEX 10
TO THE
LOAN AGREEMENT
LIST OF ACTIONS, PROCEDURES, LIENS, ENCUMBRANCES AND RESTRICTIONS
Judicial Proceedings
----------------------------------------------------------------------------------------------------------
PLAINTIFF IN ENFORCEMENT ACTION OPERATOR SUBJECT MATTER OBSERVATIONS
NO.
----------------------------------------------------------------------------------------------------------
FEDERAL GOVERNMENT NET SAO PAULO Tax
1999.61.82.053713-2
6th Lower Court of Federal Tax -------
Enforcements
----------------------------------------------------------------------------------------------------------
MUNICIPALITY NET SAO PAULO Tax Attachment of different
705.673-7/97-8 assets that make up the
1st Lower Court of Municipal network.
Tax Enforcements - SP
----------------------------------------------------------------------------------------------------------
FEDERAL GOVERNMENT NET SAO PAULO (XXXXXX Tax
2004.61.04.008510-2 BRANCH)
5th Lower Federal Court in -------
Xxxxxx
----------------------------------------------------------------------------------------------------------
STATE NET X.X. RIO PRETO Tax Attachment of the cable
20.497/01 network .
Ancillary Service of the
SJRPRETO Treasury
----------------------------------------------------------------------------------------------------------
FEDERAL GOVERNMENT NET SERVICOS Tax
2004.61.82.037766-7
5th Lower Court of Federal Tax -------
Enforcements - SP
----------------------------------------------------------------------------------------------------------
FEDERAL GOVERNMENT NET SERVICOS Tax
2004.61.82.051947-4
5th Lower Court of Tax -------
Enforcements - SP
----------------------------------------------------------------------------------------------------------
UNIBANCO NET SERVICOS Loan Agreement
000.02.222752-0,
16th Lower Civil Court of the -------
Central Courts - SP
----------------------------------------------------------------------------------------------------------
STATE NET RIO Tax Attachment of 5% of the
2001/100-004.229-8 company's revenue.
Motion to Stay Execution No.
2004.001.044.800-3
11th Lower Public Treasury
Court - RJ
----------------------------------------------------------------------------------------------------------
STATE NET RIO Tax Attachment of the monthly
2001/100-004.230-4 xxxxxxxx of the company.
11th Lower Public Treasury
Court - RJ
----------------------------------------------------------------------------------------------------------
STATE NET RIO Tax
2001/100-004.231-6 -------
11th Lower Public Treasury
Court - RJ
----------------------------------------------------------------------------------------------------------
STATE NET RIO Tax
2003/100.000.355-8
11th Lower Public Treasury -------
Court - RJ
----------------------------------------------------------------------------------------------------------
Administrative Proceedings:
----------------------------------------------------------------------------------------------------------
TAX AUTHORITY OPERATOR SUBJECT MATTER OBSERVATIONS
PROCEEDING NO.
----------------------------------------------------------------------------------------------------------
Federal Revenue Office NET SAO PAULO Tax -------
AI 52385
----------------------------------------------------------------------------------------------------------
Federal Revenue Office NET SAO PAULO Tax -------
AI 00503
----------------------------------------------------------------------------------------------------------
Federal Revenue Office NET SAO PAULO Tax
AI 1998.00902-7 -------
----------------------------------------------------------------------------------------------------------
08.1.81912-35 NET SAO PAULO Tax -------
Federal Revenue Office
----------------------------------------------------------------------------------------------------------
Federal Revenue Office CABODINAMICA Tax
08.109000/ -------
03695/03
----------------------------------------------------------------------------------------------------------
Federal Revenue Office CABODINAMICA Tax
08.109000/ -------
03695/03
----------------------------------------------------------------------------------------------------------
Rio de Janeiro State Treasury NET RIO Tax
E-04/603.358/94 -------
AI n. 791.691
----------------------------------------------------------------------------------------------------------
Rio de Janeiro State Treasury NET RIO Tax
E-04/146.770/97 -------
AI 01.041552-9
----------------------------------------------------------------------------------------------------------
Rio de Janeiro State Treasury NET RIO Tax
AI 01.049922-6, of April 28,
1998 -------
E-04.177.374/98
----------------------------------------------------------------------------------------------------------
Rio de Janeiro State Treasury NET RIO Tax
AI 01.053492-3 -------
E-04.147.573/97
----------------------------------------------------------------------------------------------------------
Rio de Janeiro State Treasury NET RIO Tax
And - 04/085.241/2002 -------
Infraction Notice No.
03.007333-2
----------------------------------------------------------------------------------------------------------
Federal Revenue Office NET RIO Tax -------
15374.001438/99-84
----------------------------------------------------------------------------------------------------------
Federal Revenue Office NET RIO Tax -------
04203/02-A
----------------------------------------------------------------------------------------------------------
Federal Revenue Office NET RIO Tax
04203/02-B -------
----------------------------------------------------------------------------------------------------------
Federal Revenue Office NET RIO Tax -------
04203/02-C
----------------------------------------------------------------------------------------------------------
Federal Revenue Office MULTICANAL Tax
AI n. -------
15374.004005/2001-20
----------------------------------------------------------------------------------------------------------
Federal Revenue Office DR (PORTO ALEGRE) Tax
11080.013354/ -------
2002-68
----------------------------------------------------------------------------------------------------------
Federal Revenue Office DR (PORTO ALEGRE) Tax -------
11080-013.353/2002-13
----------------------------------------------------------------------------------------------------------
Municipality of Porto Alegre NET SUL Tax
0085/98
-------
----------------------------------------------------------------------------------------------------------
Federal Revenue Office NET BELO HORIZONTE Tax -------
0610100/01055/03
----------------------------------------------------------------------------------------------------------
LIENS:
----------------------------------------------------------------------------------------------------------
OPERATOR ENCUMBERED PROPERTIES TYPE OF LIEN CONTRACT BENEFITING FROM THE
LIEN
----------------------------------------------------------------------------------------------------------
NET CAMPINAS 3,073 Feet of RG/ Conditional Sale Financing Agreement with
Coaxial MT cables, Transfer of Loan in Foreign
year of manufacture Currency - BONY signed with
1998, Manufacturer UNIBANCO - Uniao de Bancos
CommScope, Inc. Brasileiros S/A., filed with
the 1st Registry of Deeds and
Documents of Xxxxxxxx - XX,
xxxxxxxxx Xx. 000000, value:
US$ 364,116.59
----------------------------------------------------------------------------------------------------------
NET CAMPINAS Attenuators, Conditional Sale Financing Agreement with
Equalizers, Amplifiers Transfer of Loan in Foreign
and Carcass for Currency - BONY signed with
Amplifiers, year of UNIBANCO - Uniao de Bancos
manufacture 1998, Brasileiros S/A., filed with
Manufacturer: the 1st Registry of Deeds and
Scientific Atlanta, Documents of Campinas - SP,
Inc. microfilm No. 283302, value:
US$ 635,800.07
----------------------------------------------------------------------------------------------------------
NET CAMPINAS Attenuators, Conditional Sale Financing Agreement with
Equalizers, Amplifiers Transfer of Loan in Foreign
and Carcass for Currency - BONY signed with
Amplifiers, year of UNIBANCO - Uniao de Bancos
manufacture 1998, Brasileiros S/A., filed with
Manufacturer: the 1st Registry of Deeds and
Scientific Atlanta, Documents of Campinas - SP,
Inc. microfilm No. 283303, value:
US$ 342,868.14
----------------------------------------------------------------------------------------------------------
ANNEX 11
TO THE
LOAN AGREEMENT
LIST OF RESTRICTED SUBSIDIARIES TO BE LIQUIDATED, DISSOLVED OR DIVIDED
--------------------------------------------------------------------------------
Alnor Aluminio do Norte Ltda.
--------------------------------------------------------------------------------
Antenas Comunitarias Brasileiras Ltda.
--------------------------------------------------------------------------------
Dabny, L.L.C.
--------------------------------------------------------------------------------
Net Londrina Ltda.
--------------------------------------------------------------------------------
TV Cabo de Chapeco Ltda.
--------------------------------------------------------------------------------
Net Recife Ltda.
--------------------------------------------------------------------------------
Net Campinas Ltda.
--------------------------------------------------------------------------------
Net Indaiatuba Ltda.
--------------------------------------------------------------------------------
Net Franca Ltda.
--------------------------------------------------------------------------------
Net Sul Comunicacoes Ltda.
--------------------------------------------------------------------------------
Net Joinville Ltda.
--------------------------------------------------------------------------------
Net Florianopolis Ltda.
--------------------------------------------------------------------------------
Net Maringa Ltda.
--------------------------------------------------------------------------------
Net Sao Xxxx do Rio Preto Ltda.
--------------------------------------------------------------------------------
Net Piracicaba Ltda.
--------------------------------------------------------------------------------
Net Goiania Ltda.
--------------------------------------------------------------------------------
Net Campo Grande Ltda.
--------------------------------------------------------------------------------
Net Sorocaba Ltda.
--------------------------------------------------------------------------------
Horizonte Sul Comunicacoes Ltda.
--------------------------------------------------------------------------------
Net Curitiba Ltda.
--------------------------------------------------------------------------------
Net Arapongas Ltda.
--------------------------------------------------------------------------------
Net Bauru Ltda.
--------------------------------------------------------------------------------
Net Anapolis Ltda.
--------------------------------------------------------------------------------
Cabodinamica TV Cabo Sao Paulo S.A.
--------------------------------------------------------------------------------
CMA Participacoes S.A.
--------------------------------------------------------------------------------
Multicanal Telecomunicacoes S.A.
--------------------------------------------------------------------------------
TV Video Cabo de Belo Horizonte S.A.
--------------------------------------------------------------------------------
Net Sao Xxxxxx S.A.
--------------------------------------------------------------------------------
Net Ribeirao Preto S.A.
--------------------------------------------------------------------------------
SCHEDULE 12 TO THE
CONTRATO DE
EMPRESTIMO
MODEL OF TERM OF ADHESION
TERM OF ADHESION
This Term of Adhesion, dated [ ] (the "TERM OF ADHESION"), is entered
into by and between the parties below (the "PARTIES"):
(a) NET SERVICOS DE COMUNICACAO S.A., a joint-stock company with its
headquarters in the City and State of Sao Paulo, at Rua Verbo Divino, 1356,
Chacara Xxxxx Xxxxxxx, enrolled in the National Register of Legal Entities
(C.N.P.J.) under No. 00.108.786/0001-65 (the "COMPANY"), herein represented
pursuant to its Bylaws by its officers, Messrs. [ ] and [ ];
(b) The Company's subsidiaries listed on "Schedule A" to this Term (the
"SUBSIDIARIES" and collectively with the Company, the "NET GROUP"), herein
represented by the Company;
(c) Banco ITAU S.A., a financial institution with its headquarters in the
City and State of Sao Paulo, at Praca Xxxxxxx Xxxxxx Xxxxx Aranha, 100, Torre
Itausa, enrolled in the National Register of Legal Entities (C.N.P.J.) under No.
60.701.190/0001-04, in the capacity of collateral agent (the "COLLATERAL
AGENT"), herein represented pursuant to its Bylaws;
4
(d) Each of the financial institutions listed and identified on "Schedule
B" to this Term (the "CREDITORS"), herein represented by the Collateral Agent;
and
(e) Deutsche Bank], a financial institution with its headquarters in the
City of [ ], State of [ ], at [ ], enrolled in the National
Register of Legal Entities (C.N.P.J.) under No. [ ] (the "New JOINING
CREDITOR"),
WHEREAS:
(a) The Company, the Subsidiaries mentioned in each of the agreements listed
below, the Collateral Agent, on its own behalf and on behalf of the creditors
mentioned in the agreements below, and the Creditors, as applicable, have
executed the following agreements:
(i) The Intercreditor Agreement, dated [ ];
(ii) The Receivables Pledge Agreement with an Enforcement Clause, dated [
], referring to the receivables and credit rights of Net Sao Paulo Ltda.
and the Receivables Pledge Agreement with an Enforcement Clause dated [ ],
referring to the receivables and credit rights of Net Rio S.A.
("RECEIVABLES PLEDGE AGREEMENTS");
(iii) The Share Pledge Agreement with an Amicable Sale Clause and
Other Covenants, dated [ ] ("SHARE PLEDGE AGREEMENT");
5
(iv) The Quota Pledge Agreement with an Amicable Sale Clause and
Other Covenants, dated [ ] ("QUOTA PLEDGE AGREEMENT"); and
(v) The Asset Pledge Agreement with an Amicable Sale Clause and
Other Covenants, dated [ ] ("ASSET PLEDGE AGREEMENT", and collectively
with the Receivables Pledge Agreements, the Share Pledge Agreement, the
Quota Pledge Agreement and the Intercreditor Agreement, the "PLEDGE
DOCUMENTS");
(b) Upon the date of the execution of this Term of Adhesion, the New Joining
Creditor and the Net Group enter into the loan agreement (the "Loan Agreement")
and the Loan Agreement provides, on its Clause 8, the adhesion of the New
Joining Creditor on the Pledge Documents.
NOW THEREFORE, the Parties resolve to enter into this Term, which shall be
governed by the following terms and conditions:
1. - Upon execution of this Term of Adhesion, the New Joining Creditor declares
to be totally aware of each of the Pledge Documents, to which it hereby adheres
without any restrictions, and irrevocably and irreversibly undertakes to comply
with all the terms, conditions and obligations established therein, including
the constitution of a Collateral Agent as its attorney according with the terms
of the Intercreditors Agreement. Accordingly, the Pledge Documents will also
secure the obligations assumed by the NET Group resulting from the Loan
Agreement.
2. - For all purposes and effects of the Pledge Documents, the New Joining
Creditor shall have the same rights and obligations as the other Creditors under
the Pledge Documents.
6
3. - Upon the date of execution of the present document, this Term of Adhesion
shall be deemed to be an integral part of each of the Pledge Documents and the
Net Group undertakes to register this Term of Adherence at the competent
Registries of Deeds and Documents and with the Real Estate Registration Offices
within 10 (ten) business days as from this date and to send notarized copies
evidencing such registration to the Collateral Agent and the New Joining
Creditor.
3.1. In case of non compliance with item 3 above, the Collateral Agent will be
deemed to provide the register. Nevertheless, the costs from the register will
be for the Net's Group responsibility.
3.2. - Notwithstanding the in item 3.1 above, the Net Group is deemed to pay to
the New Joining Creditors the amount of R$ 100.000,00 (a hundred thousand reais)
per day, as non compensatory penalty, as from this date up to the formal
register of this Term of Adhesion, without any potential prejudice of loss and
damages which could affect the New Joining Creditor. It is agreed forthwith that
the non compensatory penalty will be inapplicable according with the exemptions
provided in the Pledge Agreement in relation with the penalties.
4. - This Term of Adhesion shall be signed in the same number of counterparts as
each of the Pledge Documents.
4.1. - Upon the date of the execution of this Term of Adhesion, the Parties
expressly agree that each of the Pledge Documents was automatically amended to
reflect the adhesion of the New Joining Creditor. For such purpose, the Parties
agree that the exhibits of each of the Pledge Documents listed below is hereby
supplemented by the documents attached hereto, as indicated below:
7
(a) "Schedule 2" to the Intercreditor Agreement, "Schedule 2" to the Asset
Pledge Agreement, "Schedule 2" to the Share Pledge Agreement, "Schedule 2" to
the Quota Pledge Agreement and "Schedule 2" to the Receivables Pledge Agreements
are supplemented by "Schedule 2" to this Term;
(b) "Schedule 3" to the Intercreditor Agreement, "Schedule 3" to the Asset
Pledge Agreement, "Schedule 3" to the Share Pledge Agreement, "Schedule 3" to
the Quota Pledge Agreement and "Schedule 3" to the Receivables Pledge Agreements
are supplemented by "Schedule 3" to this Term; and
(c) "Schedule 6" to the Asset Pledge Agreement, "Schedule 6" to the Share
Pledge Agreement, "Schedule 6" to the Quota Pledge Agreement and "Schedule 6" to
the Receivables Pledge Agreements are supplemented by "Schedule 6" to this Term;
5. - This Term of Adhesion shall not be deemed a novation of any of the terms
and conditions of the Pledge Documents.
IN WITNESS WHEREOF, the Parties - binding themselves and their successors - sign
this Term of Adhesion in the presence of 2 (two) undersigned witnesses.
Sao Paulo, [ ]
NET SERVICOS DE COMUNICACAO S.A.
-------------------------------------------
Name: Name:
Title: Title:
8
BANCO ITAU S.A.
-------------------------------------------
Name: Name:
Title: Title:
NEW JOINING CREDITOR
-------------------------------------------
Name: Name:
Title: Title:
Witnesses:
1. - ____________________________
Name:
Identity Card (RG):
2. - ____________________________
Name:
Identity Card (RG):
9
EXHIBIT D
Fifth Supplemental
Indenture
Exhibit E
Forms of Security Documents
EXHIBIT F
EXISTING DEBT - 6/30/2004
OUTSTANDING
BALANCE ON
DEBTOR INSTRUMENT CREDITOR / TRUSTEE START DATE MATURITY ORIGINAL AMOUNT 6/30/2004
------------ ---------------------- -------------------- ---------- ---------- ------------------ --------------
Net Servicos Contrato com IFC IFC 3/30/1995 10/15/2004 USD 17,100,000.00 19,087,394.64
Net Servicos Senior Guaranteed Note Wells Fargo 6/18/1996 6/18/2004 USD 185,000,000.00 381,508,864.18
Net Servicos Capital de Giro Banrisul 4/11/2001 4/12/2003 R$ 25,000,000.00 34,980,512.28
Net Servicos Capital de Giro BBA 11/18/2002 12/18/2002 R$ 4,647,987.16 6,839,268.42
Net Servicos Capital de Giro Unibanco 9/30/2002 10/30/2002 R$ 72,167,572.05 103,988,704.61
Net Servicos Res. 63 BBA 11/18/2002 12/18/2002 USD 1,949,690.89 10,526,929.47
Net Servicos Res. 63 BBA 11/18/2002 12/18/2002 USD 1,951,434.13 10,536,341.71
Net Servicos Res. 63 BBA 11/18/2002 12/18/2002 USD 1,811,880.67 9,782,853.33
Net Servicos Res. 63 BBA 11/18/2002 12/18/2002 USD 1,642,183.21 8,866,609.01
Net Servicos Res. 63 BBA 11/18/2002 12/18/2002 USD 2,674,356.44 14,439,602.58
Net Servicos US$-CDI Swap BBA 11/18/2002 12/18/2002 5,746,675.79
Net Servicos Res. 63 BNL 6/12/2002 12/10/2002 USD 7,000,000.00 23,747,780.54
Net Servicos 2a. Emissao de Debentu Oliveira Trust 12/1/1999 12/1/2006 R$ 350,000,000.00 62,349,245.34
Net Servicos 3a. Emissao de Debentu SLW 12/1/2000 12/1/2003 R$ 195,140,000.00 293,503,015.09
Net Campinas Eximbank BCN 6/17/2002 12/16/2002 USD 508,209.50 211,179.01
Net Campinas Eximbank Unibanco 4/13/1998 5/19/2003 USD 364,116.59 116,185.79
Net Campinas Eximbank Unibanco 4/13/1998 6/2/2003 USD 635,800.07 198,883.20
Net Campinas Eximbank Unibanco 4/27/1998 6/2/2003 USD 342,868.14 107,251.82
Net Rio Contrato com IFC IFC 3/30/1995 10/15/2004 USD 7,700,000.00 8,593,187.74
Net Rio Capital de Giro Boston 9/30/2002 10/30/2002 R$ 6,733,964.16 9,703,197.57
Reyc Capital de Giro BBA 11/18/2002 12/18/2002 R$ 1,963,917.11 2,889,800.64
Reyc Capital de Giro BBA 11/18/2002 12/18/2002 R$ 1,100,686.22 1,619,601.83
Reyc Capital de Giro Boston 9/30/2002 10/30/2002 R$ 3,951,962.06 5,694,516.88
Reyc Capital de Giro Brascan 11/29/2002 12/30/2002 R$ 12,885,300.00 17,492,032.21
Reyc Taxa Pre-CDI Swap Brascan 11/29/2002 12/30/2002 1,778,953.52
Reyc Finimp Banco do Brasil 7/16/2002 12/13/2002 USD 8,027,243.32 27,141,884.62
Reyc Finimp Banco do Brasil 11/12/2002 1/6/2003 USD 5,268,860.92 18,224,012.70
Reyc Finimp Banco do Brasil 11/28/2002 1/6/2003 USD 2,024,459.30 6,898,504.51
Reyc Res. 63 Santander 3/21/2003 4/22/2003 USD 2,647,571.50 9,764,193.39
DR Capital de Giro BBA 11/18/2002 12/18/2002 R$ 2,745,332.90 4,039,612.84
DR Contrato com IFC IFC 3/30/1995 10/15/2004 USD 8,000,000.00 8,927,987.09
Net Parana Finimp Banco Brasil 11/13/2002 1/6/2003 USD 136,606.00 472,633.55
Net Parana Contrato com IFC IFC 3/30/1995 10/15/2004 USD 2,200,000.00 2,455,196.53
Net Sul Floating Rate Notes Wells Fargo 10/31/1997 10/15/2005 USD 48,000,000.00 161,060,896.33
Net Sul Floating Rate Notes Wells Fargo 10/31/1997 10/15/2005 USD 32,000,000.00 80,740,005.02
Vicom Eximbank Boston 10/20/1997 7/15/2003 USD 2,125,000.00 874,527.92
Vicom Eximbank Boston 6/22/1998 8/4/2004 USD 3,954,285.00 3,124,194.81
Vicom Eximbank Boston 8/19/1999 8/8/2005 USD 2,400,000.00 3,227,058.84
TOTAL
