EXHIBIT 1.2
Vale Overseas Limited
Debt Securities
Guaranteed by Companhia Vale do Rio Doce
UNDERWRITING AGREEMENT
BASIC PROVISIONS
[Date]
To the Underwriters
named in the
Terms Agreement
supplemental hereto
Ladies and Gentlemen:
Vale Overseas Limited, a Cayman Islands exempted company incorporated
with limited liability (the "Company"), proposes, subject to the terms and
conditions stated herein, to issue and sell from time to time certain of its
debt securities specified in the Terms Agreement described below. The debt
securities will be irrevocably and unconditionally guaranteed (the "Guaranty")
as to payment of principal, premium (if any) and interest by Companhia Vale do
Rio Doce, a company organized under the laws of Brazil, as guarantor (the
"Guarantor"). Unless otherwise specified in the Terms Agreement, such debt
securities will be issued under an Indenture dated as of March 8, 2002, as
amended or supplemented from time to time (the "Indenture"), among the Company,
the Guarantor and JPMorgan Chase Bank, as trustee (the "Trustee"). Such debt
securities may have varying designations, denominations, currencies, interest
rates and payment dates, maturities, redemption provisions and selling prices.
Whenever the Company and the Guarantor determine to make an offering of
debt securities through one or more investment banking firms, they will enter
into a terms agreement (the "Terms Agreement") with such firm or firms (such
firms constituting the "Underwriters") named therein providing for the sale of
the specific series of debt securities to be issued and sold by the Company
pursuant thereto (the "Offered Debt Securities"), and the purchase and offering
thereof by such Underwriters. The Offered Debt Securities and the Guaranty are
referred to herein collectively as the "Securities." The Terms Agreement shall
be substantially in the form of Exhibit A hereto and shall incorporate by
reference the basic provisions set forth herein.
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Unless the context otherwise requires, as used hereinafter, (a) the
term "Agreement" shall refer to the Terms Agreement duly executed by the parties
thereto applicable to a specific offering incorporating the basic provisions set
forth herein; (b) the term "Underwriter" or "Underwriters" shall each refer to
the one or more investment banking firms which are parties to the Agreement; (c)
"you" or "your" or the "Representatives" shall refer to any manager or
co-managers of an underwriting syndicate so specified in the Agreement, or, if
none is or are so named, to the Underwriter or Underwriters; (d) "Registration
Statement" shall mean the registration statement referred to in the first
sentence of Section 1(a), including exhibits and financial statements, as
amended or supplemented at the Execution Time and, in the event any
post-effective amendment thereto or any Rule 462(b) Registration Statement
becomes effective prior to the Closing Date, shall also mean such registration
statement as so amended or such Rule 462(b) Registration Statement, as the case
may be; (e) "Prospectus" shall mean the prospectus supplement relating to the
Securities that was first filed pursuant to Rule 424(b) after the Execution Time
(the "Prospectus Supplement"), together with the prospectus contained in the
Registration Statement at the Effective Date including, any preliminary
prospectus (the "Basic Prospectus"); (f) "Execution Time" shall mean the date
and time that the Agreement is executed and delivered by the parties thereto;
and (g) "Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective. Any reference herein
to the Registration Statement or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein which were filed with or
furnished to the Commission under the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Securities and Exchange Commission
(the "Commission") thereunder (the "Exchange Act") on or before the Effective
Date of the Registration Statement or the issue date of the Prospectus; and any
reference herein to the terms "amend," "amendment" or "supplement" with respect
to the Registration Statement or the Prospectus shall be deemed to refer to and
include the filing or furnishing of any document under the Exchange Act after
the Effective Date of the Registration Statement or the issue date of the
Prospectus that is incorporated therein by reference.
SECTION 1. Representations and Warranties. Each of the Company and the
Guarantor, jointly and severally, represents and warrants to each Underwriter,
as of the date hereof, as follows:
(a) A registration statement on Form F-3 (File No. 333-_____),
including a Basic Prospectus, relating to the Securities has
been prepared by the Company and the Guarantor in conformity
in all material respects with the requirements of the
Securities Act of 1933, as amended, and the rules and
regulations of the Commission thereunder (the "Act"), the
Trust Indenture Act of 1939, as amended, and the rules and
regulations of the Commission thereunder (the "Trust Indenture
Act") and has been filed with the Commission and has become
effective. Such registration statement may have been amended
or supplemented from time to time prior to the date of this
Agreement; any such amendment to the
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registration statement was so prepared and filed and any such
amendment has become effective. A Prospectus Supplement
relating to the Securities has been so prepared and will be
filed pursuant to Rule 424(b) under the Act.
(b) On the Effective Date, the Registration Statement did or
will, and when the Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date (as
defined herein), the Prospectus (and any supplement thereto)
will, comply in all material respects with the applicable
requirements of the Act and the Trust Indenture Act; on the
Effective Date and at the Execution Time, the Registration
Statement did not or will not contain any untrue statement of
a material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements
therein not misleading; on the Effective Date and on the
Closing Date the Indenture did or will comply in all material
respects with the applicable requirements of the Trust
Indenture Act; and, on the date of any filing pursuant to Rule
424(b) and on the Closing Date, the Prospectus (together with
any supplement thereto) will not, include any untrue statement
of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided, however, that neither the Company nor the Guarantor
makes any representations or warranties as to (i) that part of
the Registration Statement which shall constitute the
Statement of Eligibility and Qualification (Form T-1) under
the Trust Indenture Act of the Trustee or (ii) the information
contained in or omitted from the Registration Statement or the
Prospectus (or any supplement thereto) in reliance upon and in
conformity with information furnished in writing to the
Company or the Guarantor by or on behalf of any Underwriter
through you expressly for inclusion in the Registration
Statement or the Prospectus (or any supplement thereto).
(c) The documents incorporated by reference in the
Registration Statement pursuant to Item 6 of Form F-3 under
the Act, at the time they were filed with the Commission,
complied in all material respects with the requirements of the
Exchange Act and, the Registration Statement, when it became
effective, or at the time of filing of the latest Annual
Report on Form 20-F, if later, complied in all material
respects with the requirements of the Act and did not contain
an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading and any further documents deemed to be or, in the
case of a Report on Form 6-K, designated as being incorporated
by reference in the Registration Statement after the date of
this Agreement but prior to the termination of the offering of
Securities, will, when they are filed with or furnished to the
Commission, comply in all material respects with the
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requirements of the Act, and when read together with the other
information included or incorporated in the Registration
Statement, will not contain an untrue statement of a material
fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading, and neither the Company nor
the Guarantor have distributed any offering material in
connection with the offering or sale of the Securities other
than the Registration Statement, the Basic Prospectus, the
Prospectus or any other materials, if any, permitted by the
Act;
(d) Each of the Company and the Guarantor has been duly
organized and is validly existing as a company in good
standing under the laws of its respective jurisdiction of
incorporation, with corporate power and authority to own its
properties and conduct its business as described in the
Prospectus;
(e) The Indenture has been duly authorized, executed and
delivered, has been duly qualified under the Trust Indenture
Act, and constitutes a legal, valid and binding instrument
enforceable against each of the Company and the Guarantor in
accordance with its terms (subject, as to enforcement of
remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting creditors'
rights generally from time to time in effect and to general
principles of equity, including, without limitation, concepts
of materiality, reasonableness, good faith and fair dealing,
regardless of whether considered in a proceeding in equity or
at law(collectively referred to as the "Enforceability
Exceptions")); and the Securities have been duly authorized
and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by
the Underwriters pursuant to this Agreement, will constitute
legal, valid and binding obligations of the Company and the
Guarantor, as applicable, entitled to the benefits of the
Indenture, subject to the Enforceability Exceptions;
(f) The Indenture and the Securities conform in all material
respects to the descriptions thereof contained in the
Prospectus;
(g) Neither the issue and sale of the Securities nor the
consummation of any other of the transactions herein
contemplated nor the fulfillment of the terms hereof will
conflict with or result in a breach or violation of (i) the
bylaws of the Company or the Guarantor, (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which the Company or the
Guarantor is a party or bound or to which its property is
subject, or (iii) any existing statute, law, rule, regulation,
judgment, order or decree applicable to the Company or the
Guarantor of any court, regulatory body, administrative
agency, governmental body, arbitrator or
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other authority having jurisdiction over the Company or the
Guarantor or any of their respective properties, except in the
case of (ii) and (iii) as would not, individually or in the
aggregate, have a material adverse effect on the performance
of this Agreement or on the condition (financial or
otherwise), prospects, earnings, business or properties of the
Guarantor and its subsidiaries, taken as a whole.
(h) No consent, approval, authorization, filing with or order
of any court or governmental agency or body is required in
connection with the transactions contemplated in the Agreement
except for (i) such as have been obtained under the Act and
the Trust Indenture Act, such as may be required under the
blue sky laws of any jurisdiction in connection with the
purchase and distribution of the Securities by the
Underwriters in the manner contemplated herein and in the
Prospectus and such as may be set forth in the Terms Agreement
and (ii) authorization given by the Central Bank of Brazil.
(i) The consolidated historical financial statements and
schedules of the Guarantor and its consolidated subsidiaries
included in the Prospectus and the Registration Statement
present fairly in all material respects the financial
condition, results of operations and cash flows of the
Guarantor as of the dates and for the periods indicated,
comply as to form with the applicable accounting requirements
of the Act and have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis
throughout the periods involved (except as otherwise noted
therein);
(j) The Guarantor and each of its subsidiaries maintain a
system of internal accounting sufficient to provide reasonable
assurance that (i) transactions are executed in accordance
with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation
of financial statement in conformity with generally accepted
accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the
exiting assets at reasonable intervals and appropriate action
is taken with respect to any differences; and,
(k) This Agreement has been duly authorized, executed and
delivered by each of the Company and the Guarantor.
Any certificate signed by any officer of the Company or the Guarantor,
as the case may be, and delivered to you or counsel for the Underwriters in
connection with the offering of Securities shall be deemed a representation and
warranty by the Company or Guarantor, as applicable, to each Underwriter as to
the matters covered thereby on the date of such certificate.
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SECTION 2. Purchase and Sale. Subject to the terms and conditions and
in reliance upon the representations and warranties set forth in the Agreement,
the Company agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Company, at the purchase price
set forth in Terms Agreement the principal amount of the Securities set forth
opposite such Underwriter's name in the Terms Agreement.
Delivery of and payment for the Securities shall be made on the date
and at the time specified in the Terms Agreement or at such time on such later
date not more than three Business Days after the foregoing date as you shall
designate, which date and time may be postponed by agreement among the
Representatives, the Company and Guarantor or as provided in Section 9 hereof
(such date and time of delivery and payment for the Securities being herein
called the "Closing Date"). Delivery of the Securities shall be made to you for
the respective accounts of the several Underwriters against payment by the
several Underwriters through you of the purchase price thereof to or upon the
order of the Company by wire transfer payable in same-day funds to an account
specified by the Company. Delivery of the Securities shall be made through the
facilities of The Depository Trust Company unless you shall otherwise instruct.
SECTION 3. Covenants of the Company. Each of the Company and the
Guarantor covenants with each Underwriter as follows:
(a) Immediately following the execution of the Terms
Agreement, the Company and the Guarantor will prepare a
Prospectus Supplement setting forth the principal amount of
Securities covered thereby and their terms not otherwise
specified in the Basic Prospectus, the names of the
Underwriters participating in the offering and the principal
amount of Securities which each severally has agreed to
purchase, the names of the Underwriters acting as co-managers
in connection with the offering, if any, the price at which
the Securities are to be purchased by the Underwriters from
the Company, the initial public offering price, the selling
concession and reallowance, if any, and such other information
as you, the Company and the Guarantor deem appropriate in
connection with the offering of the Securities. The Company
and the Guarantor will promptly transmit copies of the
Prospectus Supplement to the Commission for filing pursuant to
Rule 424(b) of the Regulations and will furnish to the
Underwriters as many copies of the Prospectus and such
Prospectus Supplement as you shall reasonably request.
(b) Prior to the termination of the offering of the
Securities, the Company and the Guarantor will not file any
amendment of the Registration Statement or supplement to the
Prospectus or any Rule 462(b) Registration Statement unless
you have been furnished a copy for review prior to filing and
the Company and the Guarantor will not file any such proposed
amendment or supplement to which you reasonably object. The
Company and the Guarantor will promptly advise you (1) when
the Prospectus, and
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any supplement thereto, shall have been filed (if required)
with the Commission pursuant to Rule 424(b) or when any Rule
462(b) Registration Statement shall have been filed with the
Commission, (2) when, prior to termination of the offering of
the Securities, any amendment to the Registration Statement
shall have been filed or become effective, (3) of any request
by the Commission or its staff for any amendment of the
Registration Statement, or any Rule 462(b) Registration
Statement, or for any supplement to the Prospectus or for any
additional information, (4) of the issuance by the Commission
of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of
any proceeding for that purpose and (5) of the receipt by the
Company or the Guarantor, as the case may be, of any
notification with respect to the suspension of the
qualification of the Securities for sale in any jurisdiction
or the institution or threatening of any proceeding for such
purpose. The Company and the Guarantor will use their
commercially reasonable efforts to prevent the issuance of any
such stop order or the suspension of any such qualification
and, if issued, to obtain as soon as possible the withdrawal
thereof.
(c) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any
event occurs as a result of which the Prospectus as then
supplemented would include any untrue statement of a material
fact or omit to state any material fact necessary to make the
statements therein in the light of the circumstances under
which they were made not misleading, or if it shall be
necessary to amend the Registration Statement or supplement
the Prospectus to comply with the Act or the Exchange Act, the
Company and the Guarantor promptly will (1) notify you of such
event, (2) prepare and file with the Commission an amendment
or supplement which will correct such statement or omission or
effect such compliance and (3) supply any supplemented
Prospectus to you in such quantities as you may reasonably
request.
(d) As soon as practicable, the Guarantor will make generally
available to its security holders and to the Representatives
an earnings statement or statements of the Guarantor and its
subsidiaries which will satisfy the provisions of Section
11(a) of the Act and Rule 158 under the Act.
(e) The Company and the Guarantor will furnish to the
Representatives and to counsel for the Underwriters, without
charge, signed or conformed copies of the Registration
Statement (including exhibits thereto) and to each other
Underwriter a copy of the Registration Statement (without
exhibits thereto) and, so long as delivery of a prospectus by
an Underwriter or dealer may be required by the Act, as many
copies of each preliminary Prospectus and the Prospectus and
any supplement thereto as the Representatives may reasonably
request.
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(f) The Company and the Guarantor will arrange, if necessary,
for the qualification of the Securities for sale under the
laws of such jurisdictions as you may designate, will maintain
such qualifications in effect so long as required for the
distribution of the Securities; provided that in no event
shall either the Company or the Guarantor be obligated to
qualify to do business in any jurisdiction where it is not now
so qualified or to take any action that would subject either
of them to service of process in suits, other than those
arising out of the offering or sale of the Securities, in any
jurisdiction where either of them is not now so subject.
(g) The Company and the Guarantor will furnish, upon request
of an Underwriter, for a period of two years from the date of
this Agreement (unless otherwise publicly available on the
Commission's ▇▇▇▇▇ website or the Company's or the Guarantor's
website) (i) copies of any reports or other communications
which the Guarantor shall send to its shareholders or which
the Company or the Guarantor shall from time to time publish
or publicly disseminate, (ii) copies of all annual and other
reports filed with the Commission on Forms 20-F and 6-K, or
such other similar form as may be designated by the
Commission, (iii) copies of documents or reports filed with
any securities exchange on which any class of securities of
the Company is listed, and (iv) such other information as the
Underwriters may reasonably request regarding the Company or
the Guarantor and its subsidiaries, in each case, as soon as
such communications, documents or information become
available.
(h) The Company and the Guarantor will apply the net proceeds
from the sale of the Securities in the manner set forth under
the caption "Use of Proceeds" in the Prospectus Supplement.
SECTION 4. Conditions of Underwriters' Obligation. The obligations of
the Underwriters to purchase Securities pursuant to the Terms Agreement are
subject to the accuracy of the representations and warranties on the part of
each of the Company and the Guarantor herein contained, to the accuracy of the
statements of the Company's directors and the Guarantor's officers made in any
certificate furnished pursuant to the provisions hereof, to the performance by
each of the Company and the Guarantor of all of its respective covenants and
other obligations hereunder and to the following further conditions:
(a) The Guarantor shall have requested and caused the General
Counsel of the Guarantor to have furnished to you his opinion dated the
Closing Date and addressed to the Representatives, to the effect that:
(i) The Guarantor (1) is a duly organized and validly existing
company under the laws of Brazil, (2) has the full corporate
power and authority necessary to own its property and assets
and to conduct its business as now being conducted, (3) is
duly qualified and authorized to do business
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in Brazil and (4) has all power and authority necessary to own
or hold its respective properties and to conduct the
businesses in which it is engaged, except where the failure to
be so qualified or have such power or authority would not,
individually or in the aggregate, have a material adverse
effect on the performance of its obligations under the
Securities or on the condition (financial or otherwise),
prospects, earnings, business or properties of the Guarantor
and its subsidiaries, taken as a whole.
(ii) The Guarantor has full right, power and authority to
execute and deliver each of the Indenture, the Agreement, the
Offered Debt Securities and the Guaranty and to perform its
obligations thereunder, and all corporate action required to
be taken for the due and proper authorization, execution and
delivery of the Indenture, the Agreement and the Securities
and the consummation of the transactions contemplated thereby
has been duly and validly taken;
(iii) Each of the Agreement, the Indenture and the Guaranty
has been duly authorized, executed and delivered by the
Guarantor;
(iv) The execution, delivery and performance by the Guarantor
of each of the Agreement, the Indenture and the Guaranty, the
issuance and sale by the Company of the Offered Debt
Securities and compliance by the Guarantor and the Company, as
applicable, with the terms thereof and the consummation of the
transactions contemplated by each of the Agreement and the
Indenture will not conflict with or result in a breach or
violation of (i) the bylaws of the Guarantor, (ii) the terms
of any indenture, contract, lease, mortgage, deed of trust,
note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which the Guarantor or
any of its subsidiaries is a party or bound or to which its or
their property is subject, or (iii) any existing statute, law,
rule, regulation, judgment, order or decree applicable to the
Guarantor of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority in
Brazil having jurisdiction over the Guarantor or any of its
properties, except in the case of (ii) and (iii) as would not,
individually or in the aggregate, have a material adverse
effect on the performance of the Agreement, the Indenture, the
Offered Debt Securities or the Guaranty, or on the condition
(financial or otherwise), prospects, earnings, business or
properties of the Guarantor and its subsidiaries, taken as a
whole, whether or not arising from transactions in the
ordinary course of business.
(v) To the best of such counsel's knowledge, except as
described in the Prospectus, there are no legal, governmental
or regulatory investigations, actions, suits or proceedings
pending in Brazil to which the Guarantor or any of its
subsidiaries is a party which could reasonably be expected to
result in a material adverse change in the financial position,
stockholders' equity, results of operations, business
operations or properties of the
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Guarantor and its subsidiaries taken as a whole or on the
performance by the Guarantor of its obligations under the
Offered Debt Securities, the Guaranty, the Agreement and the
Indenture; and to the best of his knowledge, no such
investigations, actions, suits or proceedings are threatened
or contemplated by any Brazilian governments or regulatory
authority or threatened by others in Brazil.
In rendering the above opinion, such counsel shall
additionally state that, based on his examination of the
Registration Statement, the Prospectus and each amendment
thereof or supplement thereto, although he is not passing upon
and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement and the Prospectus and any amendment or
supplement thereto, on the basis of the foregoing, nothing has
come to his attention that would lead him to believe that on
the Effective Date the Registration Statement contained any
untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading or that the
Prospectus as of its date and on the Closing Date included or
includes any untrue statement of a material fact or omitted or
omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading (except that no such
statement need be made by such counsel with respect to the
financial statements and other financial and statistical data
or information concerning mineral reserves included in the
Registration Statement, the Prospectus or in any amendment or
supplement thereto).
(b) The Company shall have requested and caused Cleary, Gottlieb, ▇▇▇▇▇
& ▇▇▇▇▇▇▇▇, special United States counsel to the Company and the Guarantor, or
such other firm as may be reasonably acceptable to you, to the effect that:
(i) The Indenture has been duly executed and delivered by each of the
Company and the Guarantor under the law of the State of New York and
qualified under the Trust Indenture Act, and is a valid, binding and
enforceable agreement of the Company and the Guarantor.
(ii) The Offered Debt Securities have been duly executed and delivered
by the Company under the law of the State of New York and are the
valid, binding and enforceable obligations of the Company, entitled to
the benefits of the Indenture.
(iii) The Guaranty has been duly executed and delivered by the
Guarantor under the law of the State of New York and is a valid,
binding and enforceable obligation of the Guarantor.
(iv) The statements set forth in the Prospectus under the heading
"Description of Debt Securities" and the description of the Securities
in the Prospectus, insofar as
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such statements purport to summarize certain provisions of the
Securities and the Indenture, provide a fair summary of such
provisions, and the statements (if any) set forth in the Prospectus
under the heading "Taxation-Certain United States Tax Considerations,"
insofar as such statements purport to summarize certain federal income
tax laws of the United States, constitute a fair summary of the
principal U.S. federal income tax consequences of an investment in the
Securities.
(v) The Agreement has been duly executed and delivered by each of the
Company and the Guarantor under the law of the State of New York.
(vi) The issuance and sale of the Offered Debt Securities to
Underwriters pursuant to this Agreement, and the performance by the
Company and the Guarantor of their respective obligations in the
Agreement, the Indenture, the Offered Debt Securities and the Guaranty,
do not require any consent, approval, authorization, registration or
qualification of or with any governmental authority of the United
States or the State of New York, except such as have been obtained or
effected under the Act, the Exchange Act and the Trust Indenture Act
(but such counsel need not express any opinion as to any consent,
approval, authorization, registration or qualification that may be
required under state securities or Blue Sky laws).
(vii) Neither the Company nor the Guarantor is and, after giving
effect to the offering and sale of the Offered Debt Securities and the
Guaranty and the application of the proceeds thereof as described in
the Prospectus neither will be an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
(viii) Under the laws of the State of New York relating to submission
to jurisdiction, each of the Company and the Guarantor, pursuant to
Section 11 of this Agreement, (i) has validly and irrevocably submitted
to the personal jurisdiction of any state or federal court located in
the City, County and State of New York in any action arising out of or
related to the Purchase Agreement, (ii) to the fullest extent permitted
by law, has validly and irrevocably waived any objection to the venue
of a proceeding in any such court, and (iii) has validly appointed Rio
Doce America, Inc. as its initial authorized agent for the purpose
described in Section 11 of this Agreement.
Such counsel shall additionally state in such opinion or in a separate letter
that, although it is not passing upon and does not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus (except to the extent provided in
subsection (iii) of this Section (b)), (A) nothing has come to the attention of
such counsel that would lead such counsel to believe that on the Effective Date
the Registration Statement contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus as of its date
and on the Closing Date included or includes any untrue statement of a material
fact
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or omitted or omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (except that no such statement need be made by such counsel with
respect to the financial statements and other financial and statistical data or
information concerning mineral reserves included in the Registration Statement,
the Prospectus or in any amendment or supplement thereto), (ii) no information
has come to such counsel's attention that causes it to believe that the
documents incorporated by reference in the Registration Statement and the
Prospectus (except the financial statements and schedules and other financial
and statistical data or information concerning mineral reserves included
therein, as to which such counsel need express no view), as of the Execution
Time, were not appropriately responsive in all material respects to the
requirements of the Exchange Act, (iii) such counsel does not know of any
contracts or other documents of a character required to be filed as exhibits to
the Registration Statement or required to be described in the Registration
Statement or the Prospectus that are not filed or described as required and (iv)
such counsel confirms that (based solely upon a telephonic confirmation from a
representative of the Commission) the Registration Statement is effective under
the Act and, to the best of such counsel's knowledge, no stop order with respect
thereto has been issued, and no proceeding for that purpose has been instituted
or threatened, by the Commission.
In rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the State of New York or the
Federal laws of the United States, to the extent they deem proper and specified
in such opinion, upon the opinion of other counsel of good standing whom they
believe to be reliable and who are satisfactory to counsel for the Underwriters
and (B) as to matters of fact, to the extent they deem proper, on certificates
of responsible officers of the Company and the Guarantor and public officials.
(3) The opinion, dated as of the Closing Date of Hunter & Hunter,
special Cayman Islands counsel to the Company, or such other firm or attorney as
may be reasonably acceptable to you, in form and substance satisfactory to you,
to the effect that:
(i) The Company is duly incorporated and validly existing in good
standing as an exempted company under the laws of the Cayman Islands
and has full power to enter into and perform its obligations under the
Agreement, the Indenture and the Offered Debt Securities and to carry
on its business as contemplated in this Agreement, the Indenture and
the Offered Debt Securities and the Prospectus.
(ii) The Company has taken all necessary corporate action to authorize
the execution and delivery of the Agreement, the Indenture and the
Offered Debt Securities and the transactions contemplated thereby.
(iii) Neither the execution nor delivery of the Agreement, the
Indenture and the Offered Debt Securities nor the transactions
contemplated therein nor compliance with the terms and provisions
thereof nor the issue of the Prospectus will (a) contravene any
provision of any existing law, statute, decree, rule or regulation of
12
the Cayman Islands or any Cayman Islands published judgment, decree or
permit to which the Company is subject or (b) violate any provisions of
the Memorandum and Articles of Association of the Company.
(iv) The Agreement and the Indenture have been duly executed by or on
behalf of the Company.
(v) The Offered Debt Securities, when executed (by any two directors
of the Company, any two attorneys-in-fact appointed under the a power
of attorney (each an "Attorney") or any director of the Company and any
Attorney, acting jointly), completed and authenticated and delivered by
or on behalf of the Company, will constitute legal, valid and binding
obligations of the Company and will rank pari passu without any
preference among themselves and at least equally with all other present
and future unsecured and unsubordinated obligations of the Company
(other than obligations preferred by law).
(vi) No consents or approvals of or exemptions by any governmental or
public bodies and/or authorities in the Cayman Islands are required in
connection with the issue of the Prospectus and the entry into,
execution, delivery and performance by the Company of the Agreement,
the Indenture, the Offered Debt Securities or any of them and the
transactions contemplated therein including, without limitation, any
listing of the Offered Debt Securities outside of the Cayman Islands.
(vii) It is not necessary or advisable to file the Prospectus or the
Agreement, the Indenture, the Offered Debt Securities or any other
instrument relating thereto in any court, public office, register or
elsewhere in the Cayman Islands.
(viii) There are currently no taxes or other governmental charge
payable under the laws of the Cayman Islands or to any governmental
authority of or in the Cayman Islands in respect of any amount payable
by way of the principal or interest on the Offered Debt Securities, or
in respect of any amount payable under the Agreement, the Indenture or
the Offered Debt Securities and there are currently no taxes or capital
gains taxes and no estate duty, inheritance of gift tax imposed by the
Cayman Islands or any authority thereof or therein respect of the
Offered Debt Securities.
(ix) Under Cayman Islands law there is no requirement for any of the
parties to the Agreement, the Indenture or the Offered Debt Securities
to make any deduction from or any withholding of any part of any
payment under any of the Agreement, the Indenture or the Offered Debt
Securities. Subject to any qualifications specified by such counsel
concerning stamp duty, there are no stamp or registration or similar
taxes or charges payable in the Cayman Islands in respect of the
Agreement, the Indenture or the Offered Debt Securities or the
enforcement thereof in the Courts of the Cayman Islands.
13
(x) The Courts of the Cayman Islands will observe and give effect,
upon proof of the relevant provisions of the laws of the State of New
York to the choice of the laws of the State of New York as the
governing law of the Agreement, the Indenture and the Offered Debt
Securities. The submission by the Company to the jurisdiction of the
courts of the State of New York with respect to the Agreement, the
Indenture and the Offered Debt Securities is valid and binding upon it.
(xi) A final and conclusive judgment in personam of the courts of the
State of New York having competent jurisdiction for a debt or definite
sum of money (not being a sum payable in respect of taxes or other
charges of a like nature or in respect of a fine or other similar
penalty) and obtained without fraud or without breaching the principles
of natural justice in the Cayman Islands or in contravention of Cayman
Islands public policy in respect of the Agreement, the Indenture or the
Offered Debt Securities would be recognized and enforced by the Courts
of the Cayman Islands by originating action on such judgment.
(xii) Under Cayman Islands law, neither the Company nor any of its
properties or assets are immune from institution of legal proceedings
or the obtaining or execution of a judgment in the Cayman Islands.
(xiii) To the best of such counsel's knowledge based upon a
certificate signed by two directors of the Company and the examination
of the Cause Book and Register of Writs and other Originating Process
of the Cayman Islands Grand Court conducted on in
respect of proceedings filed with the Court during the last twelve
months (and assuming that such Cause Books are a complete record
of proceedings filed with the Grand Court for that period), there
is no litigation pending to which the Company is a party which
would jeopardize the Company's ability to discharge its
obligations resulting from the Agreement, the Indenture and the
Offered Debt Securities.
(xiv) The statements contained in the Prospectus with regard to Cayman
Islands law and taxation are true and accurate.
(xv) It is not necessary under the laws of the Cayman Islands that
any of the Underwriters or the holders of the Securities be authorized,
licensed or qualified to carry on business in the Cayman Islands for
their entry into, execution, delivery, performance or enforcement of
the Agreement, the Indenture or the Offered Debt Securities, as
applicable, to which they are parties.
(xvi) None of the Underwriters or the holders of the Securities will
be deemed to be resident, domiciled, carrying on business or subject to
taxation in the Cayman Islands by reason only of their entry into,
execution, delivery, performance or enforcement of, or receipt of any
payment under, the Agreement, the Indenture or the Offered Debt
Securities, as applicable, to which they are parties.
14
(xvii) The Company has an authorized share capital of US$1,000 and has
an outstanding and issued share capital of 1,000 ordinary shares of
US$1.00 each which, based only upon a certificate signed by two
directors of the Company and the copy of the Register of Members of the
Company provided to us, are held by Companhia Vale do Rio Doce, are
fully paid and non-assessable, and are free and clear of all liens,
encumbrances, equities or claims.
(4) The opinion, dated as of the Closing Date of ▇▇▇▇▇▇▇▇ ▇▇▇▇
Advogados, special Brazilian counsel to the Company and the Guarantor, or such
other firm or attorney as may be reasonably acceptable to you, in form and
substance satisfactory to you, to the effect that:
(i) No consent, approval, authorization, notice, filing or registration
with any court or governmental agency or commission or public body or
authority in Brazil is required for (i) the execution, delivery and
performance by the Guarantor of the Indenture, the Agreement, the
Guaranty and the Offered Debt Securities, or (ii) the validity and
enforceability of any of the Indenture, the Agreement, Guaranty and the
Offered Debt Securities, except as have been obtained and are in full
force and effect; provided, however, that the remittance abroad by the
Guarantor of any payments in foreign currency under the Indenture, the
Agreement, the Guaranty and the Offered Debt Securities, which are not
contemplated in a specific authorization issued by the Central Bank of
Brazil shall require a prior approval from the Central Bank of Brazil.
(ii) Subject to the translation of each of the Indenture, the Guaranty,
the Agreement and the Offered Debt Securities into Portuguese, each of
the Indenture, the Agreement, the Guaranty, and the Offered Debt
Securities is in proper legal form under the laws of Brazil for the
enforcement thereof in such jurisdiction.
(iii) The choice of New York law as the law in accordance with which
the Indenture, the Agreement, the Guaranty and the Offered Debt
Securities shall be governed is a valid choice of law under the laws of
Brazil and shall be recognized and applied by the courts of Brazil, to
the extent that such law does not offend Brazilian national
sovereignty, public order or good morals.
(iv) The submission of the Guarantor to the non-exclusive jurisdiction
of any Federal or State Court in the City, County and State of New York
is a legal, valid and binding submission. Any judgment against the
Guarantor issued by a court of the State of New York or a federal court
sitting in New York City of any sum payable by it under the Indenture,
the Agreement, the Guaranty or the Offered Debt Securities would be
recognized and enforced in the courts of Brazil without a substantive
reexamination of the merits.
(v) Except as otherwise specified by such counsel in such opinion, no
stamp, registration, documentary transfer or similar taxes are payable
under the laws of
15
Brazil by reason of any of the transactions contemplated by the Indenture
or the Agreement or in relation to the execution, delivery or performance
of, or any enforcement proceedings in respect of the Indenture, the
Agreement, the Guaranty or the Offered Debt Securities brought in the
courts of Brazil.
(vi) The statements contained under the headings "Taxation -- Brazilian Tax
Considerations" in the Prospectus, which provide a summary of the Brazilian
tax considerations relating to an investment in the Securities by a
nonresident in Brazil and (ii) "Enforcement of Civil Liabilities Against
Non-U.S. Persons -- Brazil" in the Prospectus, to the extent that they
constitute summaries of existing Brazilian statutes, rules, regulations,
legal, governmental and regulatory proceedings and other matters of law
fairly summarize the matters described therein in all material respects.
(d) You shall have received from ▇▇▇▇▇▇▇▇ Chance, counsel for the
Underwriters,such opinion or opinions, dated the Closing Date and addressed to
you, with respect to the issuance and sale of the Securities, the Indenture, the
Registration Statement, the Prospectus and other related matters as you may
reasonably require, and the Company and the Guarantor shall have furnished to
such counsel such documents as they request for the purpose of enabling them to
pass upon such matters.
(e) The Guarantor shall have requested and caused PricewaterhouseCoopers,
independent auditors for the Guarantor, and such other independent auditors as
may be specified in the Terms Agreement, to have furnished to you, at the
Execution Time and at the Closing Date, letters, (which may refer to letters
previously delivered to one or more of you), dated respectively as of the
Execution Time and as of the Closing Date, in form and substance satisfactory to
you, confirming that they are independent accountants within the meaning of the
Act and the Exchange Act and covering the matters that are ordinarily covered by
"comfort letters" drafted in accordance with Statement of Accounting Standards
No. 72.
(f) The Company shall have furnished to you a certificate, signed by two
directors of the Company with specific knowledge of the financial matters of the
Company, reasonably satisfactory to you, dated the Closing Date, to the effect
that the signers of such certificate have carefully examined the Registration
Statement, the Prospectus, and the Agreement and that:
(i) the representations and warranties of the Company in this Agreement are
true and correct on and as of the Closing Date with the same effect as if
made on the Closing Date and the Company has complied with all the
agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or, to the Company's knowledge, threatened; and
16
(iii) since the date of the most recent financial statements included or
incorporated by reference in the Prospectus (exclusive of any supplement
thereto), there has been no material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or properties of
the Company, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto)
(g) The Guarantor shall have furnished to you a certificate, signed by two
executive officers of the Guarantor with specific knowledge of the financial
matters of the Guarantor, reasonably satisfactory to you, dated the Closing
Date, to the effect that the signers of such certificate have carefully examined
the Registration Statement, the Prospectus, and the Agreement and that:
(i) the representations and warranties of the Guarantor in this Agreement
are true and correct on and as of the Closing Date with the same effect as
if made on the Closing Date and the Guarantor has complied with all the
agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or, to the Guarantor's knowledge, threatened; and
(iii) since the date of the most recent financial statements included or
incorporated by reference in the Prospectus (exclusive of any supplement
thereto), there has been no material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or properties of
the Guarantor and its subsidiaries, taken as a whole, except as set forth
in or contemplated in the Prospectus (exclusive of any supplement thereto)
(h) Subsequent to the Execution Time or, if earlier, the dates as of which
information is given in the Registration Statement (exclusive of any amendment
thereof) and the Prospectus (exclusive of any supplement thereto), there shall
not have been any change, or any development involving a prospective change, in
or affecting the condition (financial or otherwise), earnings, business or
properties of the Guarantor and its subsidiaries, taken as a whole, whether or
not arising from transactions in the ordinary course of business, except as set
forth in or contemplated in the Prospectus (exclusive of any supplement thereto)
the effect of which is, in your sole judgment, so material and adverse as to
make it impractical or inadvisable to proceed with the offering or delivery of
the Securities as contemplated by the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement thereto).
(i) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the debt securities issued by or guaranteed by
either the Company or the Guarantor by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the Act) or
any notice given of any intended or
17
potential decrease in any such rating or of a possible change in any such rating
that does not indicate the direction of the possible change.
(j) Prior to the Closing Date, the Company and the Guarantor shall have
furnished to the Underwriters such further information, certificates and
documents as the Underwriters may reasonably request.
SECTION 5. Payment of Expenses. All expenses incident to the performance of
each party's obligations under this Agreement shall be paid in the manner
specified in the Terms Agreement.
SECTION 6. Indemnification and Contribution. (a) The Company and the
Guarantor, jointly and severally, agree to indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of each Underwriter
and each person who controls any Underwriter within the meaning of either the
Act or the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or other existing Federal or state statutory law
or regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement for the registration of the Securities
as originally filed or in any amendment thereof, or in any preliminary
prospectus or the Prospectus, or in any amendment thereof or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and agrees to reimburse each such indemnified
party, as incurred, for any legal or other documented expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company and the
Guarantor will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company or the Guarantor by or on behalf of any Underwriter through the
Representatives expressly for inclusion therein; provided further, that with
respect to any untrue statement or omission of material fact made in any
preliminary prospectus, the indemnity agreement contained in this Section 6(a)
shall not inure to the benefit of any Underwriter from whom the person asserting
any such loss, claim, damage or liability purchased the securities concerned, to
the extent that any such loss, claim, damage or liability of such Underwriter
occurs under the circumstance where it shall have been determined by a court of
competent jurisdiction by final and nonappealable judgment that (w) the Company
or the Guarantor had previously furnished copies of the Prospectus to the
Representatives, (x) delivery of the Prospectus was required by the Act to be
made to such person, (y) the untrue statement or omission of a material fact
contained in the preliminary prospectus was corrected in the Prospectus and (z)
there was not sent or given to such person, at or prior to the written
confirmation of the sale of such securities to such person, a copy of the
Prospectus. This
18
indemnity agreement will be in addition to any liability which the Company and
the Guarantor may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify and hold
harmless the Company and the Guarantor, each of their respective directors, each
of their respective officers who signs the Registration Statement, and each
person who controls the Company or the Guarantor within the meaning of either
the Act or the Exchange Act, to the same extent as the foregoing indemnity from
the Company and the Guarantor to each Underwriter, but only with reference to
written information relating to such Underwriter furnished to the Company or the
Guarantor by or on behalf of such Underwriter through the Representatives
expressly for inclusion in the documents referred to in the foregoing indemnity.
This indemnity agreement will be in addition to any liability which any
Underwriter may otherwise have. The Company and the Guarantor acknowledge that
the statements identified in the Terms Agreement as "Information Furnished by
the Underwriters" constitute the only information furnished in writing by or on
behalf of the several Underwriters for inclusion in any preliminary prospectus
or the Prospectus.
(c) Promptly after receipt by an indemnified party under this Section 6 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 6, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
satisfactory to the indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest, (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. It is understood, however,
that the indemnifying
19
party shall, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable fees
and expenses of only one separate firm of attorneys (in addition to any local
counsel) at any time for all such indemnified parties. The indemnifying party
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify each
indemnified party from and against any loss or liability by reason of such
settlement or judgment. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section 6 is unavailable to or insufficient to hold harmless an indemnified
party for any reason, the Company, the Guarantor and the Underwriters severally
agree to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other documented expenses reasonably incurred in connection
with investigating or defending same) (collectively "Losses") to which the
Company and the Guarantor and one or more of the Underwriters may be subject in
such proportion as is appropriate to reflect the relative benefits received by
the Company and the Guarantor on the one hand and by the Underwriters on the
other from the offering of the Securities; provided, however, that in no case
shall any Underwriter (except as may be provided in any agreement among
underwriters relating to the offering of the Securities) be responsible for any
amount in excess of the underwriting discount or commission applicable to the
Securities purchased by such Underwriter hereunder. If the allocation provided
by the immediately preceding sentence is unavailable for any reason, the Company
and the Guarantor and the Underwriters severally shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company and the Guarantor on the one hand and of the
Underwriters on the other in connection with the statements or omissions which
resulted in such Losses as well as any other relevant equitable considerations.
Benefits received by the Company and the Guarantor shall be deemed to be equal
to the total net proceeds from the offering (before deducting expenses) received
by it, and benefits received by the Underwriters shall be deemed to be equal to
the total underwriting discounts and commissions, in each case as set forth on
the cover page of the Prospectus. Relative fault shall be determined by
reference to, among other things, whether any untrue or any alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information provided by the Company or the Guarantor on
the one hand or the Underwriters on the other, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The Company, the Guarantor and the
Underwriters agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation which does
not take account of
20
the equitable considerations referred to above. Notwithstanding the provisions
of this paragraph (d), no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For purposes
of this Section 6, each person who controls an Underwriter within the meaning of
either the Act or the Exchange Act and each director, officer, employee and
agent of an Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls the Company or the Guarantor within
the meaning of either the Act or the Exchange Act, each officer of the Company
or the Guarantor who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company and the Guarantor, subject in each case to the applicable terms and
conditions of this paragraph (d).
SECTION 7. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements, including the agreement of the
Company and the Guarantor in Section 6 hereof with respect to indemnity and
contribution, contained in this Agreement or contained in certificates issued by
the Company and the Guarantor, as the case may be, submitted pursuant hereto,
shall remain operative and in full force and effect, regardless of any
termination of this Agreement, or any investigation made by or on behalf of any
Underwriter or controlling person, or by or on behalf of the Company or the
Guarantor, and shall survive delivery of any Securities to the Underwriters,
provided, however, that no such representations and warranties or agreements
shall be deemed to have been given as to any point in time other than the date
hereof or as otherwise expressly provided herein. The provisions in Sections 5
and 6 shall survive the termination or cancellation of this Agreement.
SECTION 8. Termination. This Agreement shall be subject to termination in
your absolute discretion, by notice given to the Company and the Guarantor prior
to delivery of and payment for the Securities, if at any time prior to such time
(i) trading in the Guarantor's American Depositary Receipts shall have been
suspended by the Commission or the New York Stock Exchange or trading in
securities generally on the New York Stock Exchange shall have been suspended or
limited or minimum prices shall have been established on such Exchange, (ii)
there shall have occurred a material disruption in securities settlement,
payment or clearance services in the United States, (iii) a banking moratorium
shall have been declared either by Federal or New York State authorities or (iv)
there shall have occurred any outbreak or escalation of hostilities, declaration
by the United States of a national emergency or war, or other calamity or crisis
the effect of which on financial markets is such as to make it, in the sole
judgment of the Representatives, impractical or inadvisable to proceed with the
offering or delivery of the Securities as contemplated by the Prospectus
(exclusive of any supplement thereto).
SECTION 9. Default by an Underwriter. If one or more of the Underwriters
shall fail at the Closing Date to purchase the Securities which it or they are
obligated to purchase under the Agreement (the "Defaulted Securities"), then you
shall have the right, within 36 hours thereafter, to make arrangements for one
or more of the non-defaulting
21
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth. If, however, by the end of such 36 hours you shall not
have completed such arrangements for the purchase of all the Defaulted
Securities then:
(a) if the aggregate amount of Defaulted Securities does not exceed 10% of
the aggregate amount of the Securities to be purchased pursuant to the
Terms Agreement, the non-defaulting Underwriters shall be obligated to
purchase the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations of
all such non-defaulting Underwriters, or
(b) if the aggregate amount of Defaulted Securities exceeds 10% of the
aggregate amount of the Securities to be purchased pursuant to the Terms
Agreement, this Agreement shall terminate, without any liability on the
part of any non-defaulting Underwriter or the Company and the Guarantor.
In the event of a default by any Underwriter or Underwriters as set forth in
this Section, either you or the Company or the Guarantor shall have the right to
postpone the Closing Date for a period not exceeding seven days in order that
any required changes in the Registration Statement or Prospectus or in any other
documents or arrangements may be effected. Any action taken under this Section
shall not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
SECTION 10. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to you at the address indicated in the Terms
Agreement; notices to the Company or the Guarantor shall be directed to each of
them at Diretoria Financeira, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇, ▇▇▇▇▇-▇▇▇ ▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇▇ (telefax: 5521-3814-4679), Attention: Finance Department.
SECTION 11. Governing Law; Submission to Jurisdiction. This Agreement and
each Terms Agreement shall be governed by and construed in accordance with the
laws of the State of New York applicable to agreements made and to be performed
in such State. Each of the Company and the Guarantor submits to the
non-exclusive jurisdiction of any Federal or State court in the City, County and
State of New York, United States of America, in any legal suit, action or
proceeding based on or arising under this Agreement and agrees that all claims
in respect of such suit or proceeding may be determined in any such court. Each
of the Company and the Guarantor waives, to the extent permitted by law, the
defense of an inconvenient forum or objections to personal jurisdiction with
respect to the maintenance of such legal suit, action or proceeding. Each of the
Company and the Guarantor hereby designates and appoints Rio Doce America,
Inc.(the "Process Agent"), as its authorized agent, upon whom process may be
served in any such legal suit, action or proceeding, it being understood that
the designation and appointment of the
22
Process Agent as such authorized agent shall become effective immediately
without any further action on the part of either the Company or the Guarantor.
Such appointment shall be irrevocable to the extent permitted by applicable law
and subject to the appointment of a successor agent in the United States on
terms substantially similar to those contained in this Section 11 and reasonably
satisfactory to you. If the Process Agent shall cease to act as agent for
services of process for either the Company or the Guarantor, the Company or the
Guarantor, as the case may be, shall appoint, without unreasonable delay,
another such agent, and notify you of such appointment. Each of the Company and
the Guarantor represents to the Underwriters that it has notified the Process
Agent of such designation and appointment and that the Process Agent has
accepted the same in writing. Each of the Company and the Guarantor hereby
authorizes and directs the Process Agent to accept such service. Each of the
Company and the Guarantor further agrees that service of process upon the
Process Agent and written notice of said service to such party shall be deemed
in every respect effective service of process upon the Company or the Guarantor,
as the case may be, in any such legal suit, action or proceeding. Nothing herein
shall affect the right of any Underwriter or any person controlling any
Underwriter to serve process in any other manner permitted by law.
SECTION 12. Parties. This Agreement shall inure to the benefit of and be
binding upon you, the Company and the Guarantor, and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed as given to any person, firm or corporation, other than the
parties hereto and their respective successors and the controlling persons and
officers and directors referred to in Section 6 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the parties and their respective successors and said
controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Securities from any Underwriter shall be deemed to be a successor
by reason merely of such purchase.
23
Exhibit A
VALE OVERSEAS LIMITED
TERMS AGREEMENT
Debt Securities
Guaranteed by Companhia Vale do Rio Doce
[Date]
To: The Underwriters identified herein
Ladies and Gentlemen:
Vale Overseas Limited (the "Company") agrees to sell to the several
Underwriters named in Schedule I hereto for their respective accounts, on and
subject to the terms and conditions of the Underwriting Agreement Basic
Provisions attached hereto as Exhibit I (the "Agreement"), the following
securities (the "Securities") on the following terms:
Title:
Principal Amount:
Interest:
Maturity:
Optional Redemption:
Listing:
Purchase Price: ____% of the principal amount, plus accrued interest, if
any, from ____________.
Closing: 9:30 a.m. on ____________, at the offices of Cleary, Gottlieb,
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, One Liberty Plaza, New York, New York, in Federal (same day)
funds.
Lead Underwriter:
Payment of Expenses:
Qualifications to Any Covenants or Representations Made by the Company or
the Guarantor:
24
Information Furnished by the Underwriters (for purposes of Section 6(b) of
the Underwriting Agreement Basic Provisions):
The respective principal amounts of the Securities to be purchased by each
of the Underwriters are set forth opposite their names in Schedule A hereto.
The provisions of the Underwriting Agreement Basic Provisions are
incorporated herein by reference. Capitalized terms used herein and not
otherwise defined shall have the meanings assigned to them in the Underwriting
Agreement Basic Provisions.
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to the Company and the Guarantor one of the counterparts
hereof, whereupon it will become a binding agreement among the Company, the
Guarantor and the several Underwriters in accordance with its terms.
Very truly yours,
VALE OVERSEAS LIMITED
By________________________________________________
Name:
Title:
By________________________________________________
Name:
Title:
COMPANHIA VALE DO RIO DOCE
By________________________________________________
Name:
Title:
By________________________________________________
Name:
Title:
25
The foregoing Terms Agreement is hereby
confirmed and accepted as of the date first
above written.
[ ]
acting on behalf of itself and as
representative of the
several Underwriters
By_______________________________________
Name:
Title:
26
SCHEDULE I
Principal Amount of
Underwriter Securities
27