Share Purchase Agreement for Common Shares
issued by Embratel Participacoes S.A. with
the option of scheduled payment, as
stipulated below:
This Share Purchase Agreement, made and entered into this 4th day of August
1998, by and between the UNION, represented in the manner set forth in art. 10,
items V, "b" and VII of Decree Law 147, of February 3, 1967, by the Attorney
General's Office of the National Treasury, according to the delegation of powers
registered in Ordinance PGFN/PG No. 410, of July 15, 1998, published in the
Official Journal of the Union on July 16, 1998, to the Banco Nacional de
Desenvolvimento Economico e Social - BNDES, which in this act is represented by
the Manager of its Capital Market Department, Xx. Xxxxxx Xxxxx Xxxxxxx, a
Brazilian, married, administrator, bearer of identity card No. 3.225.536, issued
by IFP/RJ, and registered in the Individual Taxpayer Registry CPF/MG under No.
000.000.000-00, according to the sub-delegation of powers registered in BNDES
Ordinance No. 76, of July 20, 1998, and STARTEL PARTICIPACOES LTDA., a company
with its head office on Xx. Xxxxxxxx, 000, 10th floor, suite 101 Room B,
Xxxxxxxxx Xxxxx, Sao Paulo - SP, registered in the Tax Roll - CGC/MF No.
02.570.353/0001-52, by its legal undersigned representative(s), hereinafter
referred to as BUYER,
WHEREAS
the UNION, in the capacity of majority shareholder of EMBRATEL PARTICIPACOES
S.A., a company with its head office at SCN - Xxxxxx XX0, xxxx X, 0(xxxxxx)
xxxxx, xxxx 000, Xxxxxxxx - XX, registered in the CGC/MF under No.
02.558.124/0001-12 (hereinafter referred to as COMPANY), holds 64,405,151,125
(sixty-four billion, four hundred and five million, one hundred and fifty-one
thousand, one hundred and twenty-five) common shares, issued by the COMPANY,
representing 51.79% (fifty-one point seventy-nine percent) of the voting capital
(hereinafter referred to as COMMON SHARES);
the UNION, by means of BNDES/MC Public Notice 01/98 (hereinafter referred to as
NOTICE), publicly announced the COMPANY's denationalization conditions by means
of the sale of the COMMON SHARES in a Special Public Auction held on July 29,
1998 (hereinafter referred to as AUCTION), within the scope of the
denationalization process of the Federal Telecommunications Companies, pursuant
to Law 9,472, of July 16, 1997;
the BUYER was declared winner of the sales AUCTION of the COMMON SHARES;
resolved to sign the present Share Purchase Agreement, as follows:
ONE
OBJECT
1.1 - By the present instrument, and in accordance with the NOTICE, the UNION
hereby sells the BUYER the COMMON SHARES, clear and disencumbered of any legal
or conventional onus or burden, for the price of R$ 2,650,000,000.00 (two
billion, six hundred and fifty million reais).
1.2 - The transfer of the COMMON SHARES takes place by means of the execution of
this contract, which as of now is valid as the deed for the appropriate
registration in the deposit account in the name of the BUYER in the books of the
depositing institution responsible for the COMPANY's book shares system, as soon
as this system is implemented, without prejudice to the BUYER's immediate
exercise of all the political and asset rights inherent to the ownership of the
COMMON SHARES.
TWO
PAYMENT TERMS
2.1 - The price of the COMMON SHARES shall be paid in the Country's legal tender
in 3 (three) installments, in the following manner: (a) the first at sight,
equivalent to 40% (forty percent) of the price offered; (b) the remainder in two
equal annual installments, falling due in 12 (twelve) and 24 (twenty-four)
months, respective, from this date.
2.2 - The installments of the scheduled price payment will be price-level
restated by the General Price Index - Internal Availability - IGP-DI variation
published by the Fundacao Xxxxxxx Xxxxxx, plus interest of 12% (twelve percent)
per year on the adjusted amount, from this date to its payment;
2.3 - The BUYER may advance payment of the scheduled portion of the price
payment. In the event of the advance payment of the third installment to a date
prior to or on the same date that the second installment falls due, the interest
corresponding to the third installment will be of 9% (nine percent) per annum,
instead of the percentage provided for in item 2.2. above;
2.4 - Payment delays of any of the payment installments will result in a late
payment fine of 10% (ten percent) of the installment in arrears, adjusted in
accordance with clause 2.2., regardless of the accelerated maturity of the
installment falling due, if any;
2.5 - In guarantee of the price's full payment, the BUYER hereby delivers
pledging of 51,395,310,598 (fifty-one billion, three hundred and ninety-five
million, three hundred and ten thousand, five hundred and ninety-eight) COMMON
SHARES in favor of the UNION;
2.5.1. - The guaranty presented according to this Clause 2.5. may later
be replaced by other guarantees that might be accepted by Banco
Nacional de Desenvolvimento Economico e Social - BNDES.
2.6 - Extrajudicial foreclosure of the COMMON SHARES presented as a guaranty for
the purposes of Clause 2.5. above is hereby authorized in the case of the
BUYER'S default for payment of the debt, pursuant to articles 774, II, of the
Civil Code and 275 of the Commercial Code;
2.7 - For the purpose of the extrajudicial sale expressly authorized herein, the
BUYER in this act grants the UNION the irrevocable and irreversible mandate, in
accordance with article 1,317, I and II, of the Civil Code, with specific
powers, in the name of the BUYER, to sell the pledged COMMON SHARES to
whomsoever offers the best price, with the authority to sign contracts and other
instruments, transfer terms of the COMMON SHARES, receive the price and give
acquittance;
2.8 In accordance with paragraph one of article 39, of Law 6,404/76, this
instrument shall be registered in the financial institution responsible for
recording the shares issued by the COMPANY in its books, within the period of
10 (ten) days from the execution of this instrument.
2.9 - The UNION declares it has received the amount of R$ 1,060,000,000 (one
million and sixty million reais) equivalent to the installment paid at sight by
the BUYER, for which it hereby gives full, irreducible and general acquittance;
THREE
RESPONSIBILITY FOR NON-SUBSISTENT ASSETS AND
UNDISCLOSED LIABILITIES
3.1 - The UNION, Ministry of Communications ("MC"), Telecomunicacoes Brasileiras
S.A. - TELEBRAS, the COMPANY, BNDES, Special Supervision Committee - CES and the
independent consultants hired by the BNDES ("CONSULTANTS") shall not be held
responsible for any non-subsistent assets or undisclosed liabilities, whether or
not mentioned in the PUBLIC NOTICE, or in any other document comprising
information concerning the denationalization process of the Federal
Telecommunications Companies.
FOUR
DIVIDENDS
4.1 - The BUYER shall be entitled to the dividends that may be declared as of
the transfer of ownership of the COMMON SHARES.
FIVE
BUYER'S SPECIAL OBLIGATIONS
5.1 - The BUYER and its possible successors are jointly and severally bound, for
whatsoever purpose, including as a result of the later assignment and transfer
of COMMON SHARES, on an irrevocable and irreversible basis and in accordance
with the prevailing legislation, to rigorously perform all the following special
obligations, without prejudice to those provided for in the NOTICE, exercising,
to this end, its voting right in the COMPANY's General Meetings, so as to:
5.1.1 - order full compliance with the Concession Contracts,
Authorization Terms, Brazilian Satellite Exploitation Right
Granting Term and the Commitment Term for Participation in the
Intelsat and Inmarsat Organizations, established by the National
Telecommunications Agency - ANATEL and the COMPANY's subsidiary;
5.1.2 - rigorously comply with and ensure that the COMPANY and its
respective subsidiary comply with the legal and regulatory statutes
and contractual provisions pertinent to the provision of the
telecommunications services granted, taking care that the COMPANY
and its subsidiary undertake the necessary investments to maintain
and improve these services, always with a view to adequately
serving the user and the service's universalization;
5.1.3 - to provide, regardless of that set forth in the Concession
Contract, requests for documents or any information relating to the
COMPANY and its subsidiary that may be solicited by MC, the BNDES
or federal control and auditing agencies, and permit that UNION
employees or persons duly authorized by same have access to the
books and documents relating to the COMPANY's managements prior to
the denationalization;
5.1.4 - assure the COMPANY's current employees and those of its
respective subsidiary, the Supplementary Pension Plans of Telos -
Fundacao Embratel de Seguridade Social, in accordance with the
terms stipulated in the prevailing Statutes and Regulations of the
Benefits Plan, adhering and ratifying the Adhesion Contracts
already executed by the COMPANY and its respective subsidiary with
said entity of Supplementary Pension Plans;
5.1.5 - replace, within the period of 90 (ninety) days, from the
financial settlement of the AUCTION, the sureties or any other
guarantees offered by TELEBRAS or the UNION and by the officers
directly indicated by TELEBRAS and by the UNION in all the
contracts and financial operations, whose rights and obligations
have been assumed by the COMPANY or that are of the responsibility
of the COMPANY's subsidiary;
5.1.6 - exceptionally, in the event the respective creditors or
beneficiaries of the guarantees in the guaranteed or
contra-guaranteed obligations do not agree with the replacement
referred to above, the purchasers shall be obliged to offer
contra-guarantees of a real nature or bank guarantees in favor of
TELEBRAS or the UNION, or other duly accepted guarantees and under
the conditions normally practiced by the market;
5.1.6.1 - the term for replacing or offering the
contra-guarantees referred to in items 5.1.5. and 5.1.6.
above, shall, in any of the hypotheses, be of 90 (ninety)
days, counted from the AUCTION's financial settlement
date;
5.1.7 - order the fulfillment of the universalization goals of the
telecommunications services in accordance with the terms of the
Universalization Goals Plan for the Telecommunications Services
rendered under the public regime, as that approved by Decree 2, 592
of May 15, 1998;
5.1.8 - continue the COMPANY's registration process for negotiating its
securities in the stock exchange with the Brazilian Securities
Commission and stock exchanges, in accordance with the terms of CVM
Instruction 202, of December 6, 1993, in addition to obtaining
approval for the Depositary Receipts program of the COMPANY's
preferred shares, pursuant to CMN Resolution 1,927, of May 27,
1992, with the North American market;
5.1.9 - once registered, maintain the COMPANY as a publicly traded
company, with the registrations referred to in item 5.1.8. above
always current;
5.1.10 - maintain the permanent nature of the COMPANY's Audit Committee.
5.1.11. - maintain the Sole Paragraph of Article 13 of the COMPANY's By-Laws
unchanged;
5.1.12 - order that the COMPANY or its subsidiary offer the employees
Contractual Rescission Incentive Plans, in the case of management
restructuring conducted within 180 (one hundred and eighty) days of
the financial settlement of the at sight installment.
SIX
IRREVOCABILITY AND IRREVERSIBILITY
6.1 - The sale of the COMMON SHARES, object of this instrument, is made on an
irrevocable and irreversible basis, binding the parties and their successors and
assignees for any whatsoever purpose.
SEVEN
GENERAL PROVISIONS
7.1 - The obligations arising from this contract have a specific performance.
7.2 - This contract completes and is as integral part of the NOTICE, will be
interpreted in conformity with the DEFINITIONS AND ABBREVIATIONS of item 1.1 of
Chapter 1 of the PUBLIC NOTICE and is complemented by the other provisions
stipulated therein.
7.3 - The BUYER is obliged to promote, at its expense, this instrument's
registration in a Registry of Deeds and Documents, and, within the period of 30
(thirty) days from the execution of this instrument, remit a certificate of the
registration with said Registry and the account statement of the deposit
concerning the registration provided for in clause 2.8 of this instrument to:
Attorney General of the National Treasury Esplanada
dos Ministerios Edificio sede do Ministerio da
Fazenda - 8(0) andar
Attn.: Procurador Geral da Fazenda Nacional
7.4 - The UNION shall remit to the Federal Control Secretary an authenticated
copy of this instrument within the period of 10 (ten) days from this date, as
set forth in art. 34 of Decree 93,872, of December 23, 1986.
EIGHT
PUBLICATION
8.1 - It shall be incumbent upon the BUYER to promote, at its expense,
publication of this instrument in the Official Gazette, within the period of 20
(twenty) days.
NINE
JURISDICTION
9.1 - The parties hereby agree to submit to the jurisdiction of and that venue
is proper in the court of Brasilia, DF, with the express exclusion of any other,
however more privileged it may be, to settle any doubts arising from this
Contract.
And, in witness whereof, the parties execute this Agreement in 3 (three)
countercopies of the same tenor and to a sole effect, in the presence of the
undersigned witnesses, extracting the copies required for its publication and
execution.
Rio de Janeiro, August 4 , 1998
-------------------------- --------------------------------------
Xxxxxx Xxxxx Xxxxxxx Xxxx Xxxxxxxx Xxxxx Xxxxxxxxx
UNION BUYER
Witnesses:
--------------------------------- --------------------------------
Name: Luiz Xxxxxx Xxxxxxxx xx Xxxxxx Name: Xxxxx Xxxxx
Identity: 2.822.923 SSP-SP Identity: 3.173.766-3 SSP-SP
CPF: 000.000.000-00 CPF: 000.000.000-00
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Name: Xxx Xxxxxxxx
