EXHIBIT 2.2
EXECUTION COPY
NOTE PURCHASE FACILITY AGREEMENT
dated as of
AUGUST 10, 2001
among
TNL PCS S.A.,
AS ISSUER,
TELE NORTE LESTE PARTICIPACOES, S.A.,
AS GUARANTOR,
ABN AMRO BANK N.V.,
AS ADMINISTRATIVE AGENT, INITIAL PURCHASER, TRANCHE A PARTICIPATION AGENT,
TRANCHE B PARTICIPATION AGENT, TRANCHE C PARTICIPATION AGENT,
U.S. COLLATERAL AGENT AND BOOK RUNNER,
BANCO ABN AMRO REAL S.A.,
AS BRAZILIAN COLLATERAL AGENT,
CHASE TRUST BANK,
AS PRINCIPAL PAYING AGENT,
AND
THE TRANCHE D LENDERS PARTY HERETO
Arranged by
ABN AMRO BANK N.V.
BANKBOSTON N.A.
BBVA SECURITIES INC.
CITIBANK/▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
ING BARINGS
▇.▇. ▇▇▇▇▇▇/CHASE
SOCIETE GENERALE
WACHOVIA SECURITIES INC.
▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇
New York, NY
ARTICLE 1
DEFINITIONS AND INTERPRETATION
Section 1.01 Definitions........................................................................... 1
Section 1.02 Accounting Terms and Determinations................................................... 1
Section 1.03 Terms Generally....................................................................... 1
ARTICLE 2
PURCHASE OF THE NOTES
Section 2.01 Commitments to Purchase Notes; Expiration............................................. 2
Section 2.02 Closing and Payments.................................................................. 7
Section 2.03 Principal Repayments.................................................................. 8
Section 2.04 Mandatory Prepayments; Mandatory Commitment Reductions................................ 11
Section 2.05 Interest.............................................................................. 14
Section 2.06 Fees.................................................................................. 14
Section 2.07 Optional Commitment Reductions; Optional Prepayments.................................. 15
Section 2.08 General Provisions as to Payments..................................................... 15
Section 2.09 Funding Losses........................................................................ 17
Section 2.10 Computation of Interest and Fees...................................................... 17
Section 2.11 Regulation D Compensation............................................................. 17
ARTICLE 3
CONDITIONS
Section 3.01 Conditions Precedent to Closing Date.................................................. 18
Section 3.02 Conditions Precedent to each Purchase Date............................................ 21
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Section 4.01 Corporate Existence and Power......................................................... 22
Section 4.02 Corporate and Governmental Authorization; No Contravention............................ 22
Section 4.03 Binding Effect........................................................................ 23
Section 4.04 Financial Information................................................................. 23
Section 4.05 Litigation............................................................................ 24
Section 4.06 Compliance with Laws.................................................................. 24
Section 4.07 Environmental Matters................................................................. 24
Section 4.08 Taxes................................................................................. 24
Section 4.09 Full Disclosure....................................................................... 24
Section 4.10 Information Memorandum................................................................ 24
Section 4.11 Labor Matters......................................................................... 25
Section 4.12 Contracts; Intellectual Property...................................................... 25
Section 4.13 Solvency.............................................................................. 25
Section 4.14 No Regulatory Restrictions on Borrowing............................................... 26
Section 4.15 No Burdensome Restrictions............................................................ 26
Section 4.16 No Immunity........................................................................... 26
Section 4.17 Valid Choice of Law and Submission to Jurisdiction.................................... 26
Section 4.18 Private Offering...................................................................... 26
Section 4.19 Collateral............................................................................ 27
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Section 4.20 Ranking............................................................................... 27
Section 4.21 Investment Company.................................................................... 27
Section 4.22 Material Subsidiaries................................................................. 27
ARTICLE 5
COVENANTS
Section 5.01 Information........................................................................... 27
Section 5.02 Payment of Obligations................................................................ 29
Section 5.03 Maintenance of Property; Insurance.................................................... 29
Section 5.04 Conduct of Business and Maintenance of Existence...................................... 29
Section 5.05 Compliance with Laws.................................................................. 30
Section 5.06 Inspection of Property, Books and Records............................................. 30
Section 5.07 Mergers and Sales of Assets........................................................... 30
Section 5.08 Use of Proceeds....................................................................... 31
Section 5.09 Negative Pledge....................................................................... 31
Section 5.10 Limitation on Debt.................................................................... 33
Section 5.11 Consolidated Debt to Annualized EBITDA; Subordination of Debt Owed to Subsidiaries.... 35
Section 5.12 Consolidated EBITDA to Consolidated Interest Expense.................................. 35
Section 5.13 Restricted Payments................................................................... 35
Section 5.14 Investments........................................................................... 35
Section 5.15 Transactions with Affiliates.......................................................... 36
Section 5.16 No Modification of Certain Documents.................................................. 36
Section 5.17 Limitation on Restrictions Affecting Subsidiaries..................................... 37
Section 5.18 Security Interest in Collateral; Other Vendor Financings.............................. 37
Section 5.19 Further Assurances.................................................................... 37
Section 5.20 Expropriation Proceeds................................................................ 38
Section 5.21 Derivatives Obligations............................................................... 39
Section 5.22 Registrations......................................................................... 39
Section 5.23 Portuguese Translation................................................................ 39
Section 5.24 Additional Purchases.................................................................. 39
Section 5.25 Political Risk Insurance.............................................................. 39
Section 5.26 Supply Contracts...................................................................... 39
Section 5.27 Cross-Default Provisions in Comparable Financings..................................... 39
ARTICLE 6
DEFAULTS
Section 6.01 Events of Default..................................................................... 40
Section 6.02 Notice of Default..................................................................... 43
ARTICLE 7
THE AGENTS
Section 7.01 Appointment and Authorization......................................................... 43
Section 7.02 Agents, Arrangers and Affiliates...................................................... 44
Section 7.03 Action by Agents...................................................................... 44
Section 7.04 Consultation with Experts............................................................. 45
Section 7.05 Liability of Agents................................................................... 45
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Section 7.06 Indemnification....................................................................... 45
Section 7.07 Credit Decision; Exculpatory Provisions............................................... 45
Section 7.08 Successor Agents...................................................................... 46
Section 7.09 Agents' Fees.......................................................................... 46
Section 7.10 Certain Agents; Arrangers............................................................. 46
Section 7.11 Instructions.......................................................................... 46
Section 7.12 Notice of Event of Default............................................................ 47
Section 7.13 Responsibilities of Administrative Agent.............................................. 47
ARTICLE 8
CHANGE IN CIRCUMSTANCES
Section 8.01 Basis for Determining Interest Rate Inadequate or Unfair.............................. 47
Section 8.02 Illegality............................................................................ 47
Section 8.03 Increased Cost and Reduced Return..................................................... 48
Section 8.04 Taxes................................................................................. 49
Section 8.05 Alternative Rate Loans Substituted for Affected Euro-Dollar Loans..................... 51
Section 8.06 Substitution of Purchaser............................................................. 51
Section 8.07 Participants.......................................................................... 52
ARTICLE 9
PARENT GUARANTY
Section 9.01 The Parent Guaranty................................................................... 52
Section 9.02 Guaranty Unconditional................................................................ 52
Section 9.03 Discharge Only upon Payment in Full; Reinstatement.................................... 53
Section 9.04 Waiver by the Guarantor............................................................... 53
Section 9.05 Subrogation........................................................................... 53
Section 9.06 Stay of Acceleration.................................................................. 53
Section 9.07 Instrument for the Payment of Money................................................... 54
ARTICLE 10
MISCELLANEOUS
Section 10.01 Notices............................................................................... 54
Section 10.02 No Waivers; Cumulative Rights......................................................... 54
Section 10.03 Expenses; Indemnification............................................................. 54
Section 10.04 Set-offs; Sharing; PRI Proceeds....................................................... 55
Section 10.05 Amendments and Waivers; Enforcement of Collateral Documents........................... 56
Section 10.06 Successors; Participations and Assignments............................................ 57
Section 10.07 No Reliance on Margin Stock........................................................... 62
Section 10.08 Governing Law; Limited Submission to Jurisdiction; Limited Waiver of Immunity......... 62
Section 10.09 Counterparts; Integration; Effectiveness.............................................. 63
Section 10.10 WAIVER OF JURY TRIAL.................................................................. 63
Section 10.11 Appointment of Agent for Service of Process........................................... 63
Section 10.12 Waiver of Immunity.................................................................... 64
Section 10.13 Judgment Currency..................................................................... 64
Section 10.14 English Language...................................................................... 64
Section 10.15 Confidentiality....................................................................... 64
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Section 10.16 Survival.............................................................................. 65
Section 10.17 Cooperation........................................................................... 65
Section 10.18 Severability.......................................................................... 66
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SCHEDULES, APPENDIX AND EXHIBITS
SCHEDULE 1- Brazilian Permitted Investments - Banks
SCHEDULE 2- Transactions with Affiliates
SCHEDULE 3- Existing Liens
SCHEDULE ▇- ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇- ▇▇▇▇▇▇▇ ▇▇-▇ Participants
SCHEDULE 6- List of Subsidiaries
SCHEDULE 7- Terms of Subordination
SCHEDULE 8- List of Material Subsidiaries
APPENDIX 1 - Definitions
EXHIBIT A-1 - Form of Bank Note One
EXHIBIT A-2 - Form of Bank Note Two
EXHIBIT A-3 - Form of Tranche D - Nokia Note
EXHIBIT A-4 - Form of Tranche D - Siemens Note
EXHIBIT A-5 - Form of Tranche D - Alcatel Note
EXHIBIT B-1 - Form of Notice of Disbursement
EXHIBIT B-2 - Form of Notice of Purchase
EXHIBIT C-1 - Matters Covered by Opinion of Special New York Counsel
for the Issuer and the Guarantor
EXHIBIT C-2 - Matters Covered by Opinion of Special Brazilian Counsel
for the Issuer and the Guarantor
EXHIBIT C-3 - Matters Covered by Opinion of Special Brazilian Counsel
to the Tranche D Lenders
EXHIBIT C-4 - Matters Covered by Opinion of Special New York Counsel
to Nokia
EXHIBIT C-5 - Matters Covered by Opinion of Finnish In-House Counsel
to Nokia
EXHIBIT C-6 - Matters Covered by Opinion of Special New York Counsel to
Siemens and Alcatel
EXHIBIT C-7 - Matters Covered by Opinion of German In-House Counsel to
Siemens
EXHIBIT C-8 - Matters Covered by Opinion of French In-House Counsel to
Alcatel
EXHIBIT D-1 - Matters Covered by Opinion of Special New York Counsel to
the Initial Purchaser
EXHIBIT D-2 - Matters Covered by Opinion of Special Brazilian Counsel
to the Initial Purchaser
EXHIBIT E - Form of Assignment and Assumption Agreement
EXHIBIT F - Form of Security Agreement
EXHIBIT G - Form of Equipment Pledge Agreement
EXHIBIT H-1 - Form of Special Purpose Account Pledge Agreement
EXHIBIT H-2 - Form of Supplier Account Pledge Agreement
EXHIBIT I - Form of Mortgage Deed
EXHIBIT J-1 - Form of Tranche A1 Participation Agreement
EXHIBIT J-2 - Form of Tranche A2 Participation Agreement
EXHIBIT J-3 - Form of Tranche B1 Participation Agreement
EXHIBIT J-4 - Form of Tranche B2 Participation Agreement
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EXHIBIT J-5 - Form of Tranche B3 Participation Agreement
EXHIBIT J-6 - Form of Tranche C Participation Agreement
EXHIBIT J-7 - Form of Tranche D Participation Agreement
EXHIBIT K - Form of Officers' Certificate
vi
NOTE PURCHASE FACILITY AGREEMENT dated as of August 10, 2001 (this
"AGREEMENT") among TNL PCS S.A., as Issuer, TELE NORTE LESTE PARTICIPA**ES,
S.A., as Guarantor, ABN AMRO BANK N.V., as Administrative Agent, Initial
Purchaser, Tranche A Participation Agent, Tranche B Participation Agent,
Tranche C Participation Agent, U.S. Collateral Agent and Book Runner, BANCO ABN
AMRO REAL S.A., as Brazilian Collateral Agent, CHASE TRUST BANK, as Principal
Paying Agent, and the TRANCHE D LENDERS party hereto.
WHEREAS, the Issuer and the Guarantor have requested that the
Purchasers purchase Notes issued by the Issuer (or Participations therein) from
time to time hereunder for the purpose of financing the purchase by the Issuer
from time to time of equipment necessary to operate a mobile telephone network
in the Concession Area, and for working capital purposes, and the Purchasers are
prepared to purchase such Notes (or Participations therein) upon and subject to
the terms and conditions set forth herein;
WHEREAS, the Initial Purchaser and the Participants have, as of the
date hereof, entered into the respective Participation Agreements, pursuant to
which the Initial Purchaser will sell participations in respect of each Tranche
and each Note purchased by the Initial Purchaser hereunder;
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
Section 1.01 Definitions. Capitalized terms, as used herein, have the
meanings ascribed to them in Appendix 1.
Section 1.02 Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with, and all
references to generally accepted accounting principles shall refer to, the
accounting principles generally accepted in Brazil as in effect from time to
time, applied on a basis consistent (except for changes concurred with by the
Issuer's independent public accountants) with those used in the Guarantor's
financial statements referred to in Section 4.04(a) (such principles, so
applied, "GAAP").
Section 1.03 Terms Generally. Unless the context requires otherwise (i)
any definition of or reference to any agreement, instrument or other document
herein shall be construed as referring to such agreement, instrument or other
document as from time to time amended, supplemented, restated or otherwise
modified, (ii) any reference herein to any Person shall be construed to include
such Person's successors and assigns, (iii) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety (including the Schedules, Appendix and Exhibits) and
not to any particular provision hereof, (iv) any references herein to any
statute, resolution, concession, license or approval of or by any governmental
body shall include references to the same as amended, supplemented or
otherwise modified, (v) all references herein to Articles, Sections, Schedules,
Appendices and Exhibits shall be construed to refer to Articles and Sections of,
and Schedules, Appendices and Exhibits to this Agreement, (vi) the definitions
of terms herein shall apply equally to the singular and plural forms of the
terms defined and (vii) any pronoun shall include the corresponding masculine,
feminine and neuter forms.
ARTICLE 2
PURCHASE OF THE NOTES
Section 2.01 Commitments to Purchase Notes; Expiration.
(a) Purchases. Each of the Initial Purchaser (subject to clause (f)
below) and each Tranche D Lender agrees, subject to the terms and conditions of
this Agreement, to purchase Notes (or, in the case of Tranche D Lenders, Tranche
D Participations) from the Issuer (each a "PURCHASE" and, collectively, the
"PURCHASES") in Dollars on any Purchase Date on or before the Commitment
Termination Date (with the initial Purchase Date to be no later than five
Business Days after the Effective Date) in an aggregate principal amount not to
exceed $1,425,000,000, provided that (i) the aggregate principal amount of Bank
Notes that the Initial Purchaser shall be obligated to purchase hereunder shall
not exceed $700,000,000 (as such amount may be reduced hereunder, the "INITIAL
PURCHASER COMMITMENT," which term shall not include Purchases by the Initial
Purchaser of Tranche D Notes as described below); (ii) the aggregate principal
amount of Tranche D Notes and Tranche D Participations that the Tranche D
Lenders shall be permitted or obligated to purchase hereunder shall not exceed
$725,000,000 (as such amount may be reduced hereunder, the "AGGREGATE TRANCHE D
COMMITMENT"); (iii) the aggregate principal amount of Tranche D Notes and
Tranche D Participations that any Tranche D Lender shall be permitted or
obligated to purchase hereunder shall not exceed such Tranche D Lender's Tranche
D Commitment; and (iv) the aggregate amount of all Purchases following the
second anniversary of the Closing Date and terminating on the Commitment
Termination Date shall not exceed $290,000,000 and shall be evidenced by one or
more Tranche D Notes (in accordance with Section 2.01(d)). Each Tranche D Lender
may, at its option, purchase either Tranche D Notes or Tranche D Participations
in Tranche D Notes purchased by the Initial Purchaser in fulfillment of such
Tranche D Lender's respective Tranche D Commitment, subject to the provisions of
Section 2.01(i). Collectively, the Initial Purchaser and the Tranche D Lenders
shall not be obligated to make Purchases on more than 12 Purchase Dates under
this Agreement. Each Purchase shall be in an aggregate minimum amount of
$500,000.
(b) Use of Proceeds. (i) Purchases. The proceeds of each Purchase
pursuant to a Notice of Purchase or disbursement pursuant to a Notice of
Disbursement shall be used by the Issuer to (A) purchase licensed software,
Equipment and related services under the Supply Contracts (including any amounts
incurred thereunder prior to the date hereof, any amounts evidenced by interim
notes issued to the Suppliers thereunder or any amounts paid by the Issuer (and
not funded hereunder) prior to each Purchase Date), (B) pay related taxes,
shipping costs and duties to the extent not included in the purchase price
specified in the Supply Contracts (including any such amounts incurred prior to
the date hereof or paid by the Issuer (and not funded hereunder) prior to the
date hereof) and (C) fund working capital and general corporate purposes,
provided, however, that (x) no more than $1,160,000,000 in aggregate of such
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proceeds for all Purchases may be applied to purposes described in clause (A)
above (the portion of such amount allocated to any Supplier in accordance with
Section 2.01(c)(3), the "CONTRACT AMOUNT" of such Supplier) and purposes
described in clause (B) above (the portion of such amount allocated to any
Supplier in accordance with Section 2.01(c)(3), the "RELATED COST AMOUNT" of
such Supplier) and (y) no more than $265,000,000 in aggregate of such proceeds
for all Purchases may be applied to purposes described in clause (C) above (the
portion of such amount allocated to any Supplier in accordance with Section
2.01(c)(2), the "WORKING CAPITAL AMOUNT" of such Supplier). On each Purchase
Date, each such aggregate amount described above (or portion thereof) shall be
set forth in the relevant Notice of Purchase in the pro rata amounts allocated
among the respective Aggregate Financings of the Suppliers as set forth in
clause (c) below. No Purchaser shall have any responsibility as to the
application of any of such proceeds.
(ii) Pre-Funded Purchase Amounts. The Issuer may, at its
option, on or prior to the fifth Business Day preceding the Purchase
Date occurring on the second anniversary of the Closing Date, deliver
to the Initial Purchaser, the Administrative Agent and the Brazilian
Collateral Agent a Notice of Purchase with respect to a Purchase on
such Purchase Date in an amount equal to the full amount of all
unborrowed Commitments in respect of Tranches A1 through C as of the
date of such Notice of Purchase. The proceeds of such Purchase (the
"PRE-FUNDED PURCHASE AMOUNT") shall be deposited in the Supplier
Collateral Account. The Issuer shall give the Initial Purchaser, the
Tranche D Lenders, the Administrative Agent and the Brazilian
Collateral Agent notice of each disbursement of the Pre-Funded Purchase
Amount (or the Commitment Reduction Amount pursuant to Section 2.04(b))
in substantially the form of Exhibit B-1 hereto (each, a "NOTICE OF
DISBURSEMENT") no later than five Business Days prior to each
disbursement date (it being understood that such disbursements may not
be requested more frequently than monthly). On each Purchase Date when
any funds in respect of a Pre-Funded Purchase Amount (or the Commitment
Reduction Amount pursuant to Section 2.04(b)) are on deposit in the
Supplier Collateral Account, such funds will be distributed by the
Brazilian Collateral Agent (in accordance with the provisions of
Section 2.01(e)) pursuant to a Notice of Disbursement prior to
distributing any amount on such Purchase Date in respect of the
Purchase on such Purchase Date. Funds distributed by the Brazilian
Collateral Agent in connection with a Notice of Disbursement shall be
applied to each Supplier's Aggregate Financing in the manner set forth
in clause (e) below.
(c) Notice of Purchase. The Issuer shall give the Initial Purchaser,
the Tranche D Lenders, the Administrative Agent and the Brazilian Collateral
Agent notice of each Purchase hereunder in substantially the form of Exhibit B-2
hereto (each, a "NOTICE OF PURCHASE") no later than five Business Days prior to
each Purchase Date (or three Business Days in connection with the initial
Purchase Date). The requested amount of each Purchase to be applied to, or in
respect of, any Supplier's Aggregate Financing shall be in a minimum amount of
$500,000. Each Notice of Purchase shall specify, among other things, the portion
of such Purchase to be applied to the Contract Amount, the Related Cost Amount
and the Working Capital Amount in respect of each Supplier's Aggregate Financing
(as set forth below); provided that
(1) the aggregate amount of Purchases (or portions thereof)
applied to fund purchases
3
under the Supply Contract of any Supplier (including the relevant
Contract Amount and Related Cost Amount with respect thereto) and/or
the Working Capital Amount allocated to such Supplier shall not exceed
such Supplier's Aggregate Financing;
(2) the aggregate amount of Purchases (or portions thereof)
applied to the Working Capital Amount of any Supplier shall not exceed
$155,280,702 for the Nokia Supplier, $58,578,947 for the Siemens
Supplier and $51,140,351 for the Alcatel Supplier; and
(3) the aggregate amount of Purchases (or portions thereof)
applied to the aggregate of the Contract Amount and the Related Cost
Amount of any Supplier shall not exceed $679,719,298 for the Nokia
Supplier, $256,421,053 for the Siemens Supplier and $223,859,649 for
the Alcatel Supplier.
(d) Notes. (i) Each Purchase under the Facility shall be evidenced by
grid notations made by the holder of each applicable Note (corresponding to each
Notice of Purchase) in one of five promissory notes of the Issuer, dated as of
the Closing Date, substantially in the form of Exhibit A-1 ("BANK NOTE ONE"),
Exhibit A-2 ("BANK NOTE TWO"), Exhibit A-3 (the "TRANCHE D-NOKIA NOTE"), Exhibit
A-4 (the "TRANCHE D-SIEMENS NOTE") or Exhibit A-5 (the "TRANCHE D-ALCATEL
NOTE"), payable to the Initial Purchaser or the relevant Tranche D Lender, as
the case may be. The portion of any Purchase representing interests in Tranches
A1 through C shall be represented by the Bank Notes, and the portion of any
Purchase relating to any Tranche D Lender's Tranche D Commitment shall be
represented by such Tranche D Lender's respective Tranche D Note (which Tranche
D Note may be purchased directly by such Tranche D Lender or, to the extent not
purchased directly by such Tranche D Lender, by the Initial Purchaser subject to
the Tranche D Participation Agreement). Each Bank Note shall consist of a
Tranche A interest (representing 2/6 of the principal amount thereof and
comprised of equal Tranche A1 and Tranche A2 interests), a Tranche B interest
(representing 3/6 of the principal amount thereof and comprised of equal Tranche
B1, Tranche B2 and Tranche B3 interests) and a Tranche C interest (representing
1/6 of the principal amount thereof). Each Tranche D Note shall consist of a
Tranche D interest (representing the entire principal amount thereof).
(ii) The grid notations made on the Notes in respect of each
Purchase shall evidence the aggregate principal amount of such Purchase
and shall be duly completed with respect to the portion of such
Purchase corresponding to each Supplier's Aggregate Financing, as
follows (the Purchase allocation set forth below being the "BANK NOTE
ONE ALLOCATION METHOD"):
(A) if, after giving effect to the portion of such
Purchase relating to a Supplier's Aggregate Financing, the
aggregate principal amount outstanding relating to such
Supplier's Aggregate Financing will not exceed 60% of such
Supplier's Aggregate Financing, then the portion of such
Purchase representing such Supplier's Aggregate Financing
shall be evidenced by a grid notation in each of Bank Note One
(representing 700/1425 of the principal amount of such
portion) and the relevant Tranche D Note of the relevant
Tranche D Lender in respect of such Supplier (representing
725/1425 of the principal amount of such portion of such
Purchase), and in each case such portion of such Purchase
shall be funded in such amounts under Bank Note One and under
such Tranche D Lender's Tranche D Note;
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(B) if, after giving effect to the portion of such
Purchase relating to a Supplier's Aggregate Financing, the
aggregate principal amount outstanding relating to such
Supplier's Aggregate Financing will exceed 60% of such
Supplier's Aggregate Financing but the amount thereof
evidenced by a grid notation on Bank Note One will not exceed
such Supplier's Aggregate Bank Portion, then the portion of
such Purchase not exceeding 60% of such Supplier's Aggregate
Financing (if any) shall be evidenced by a grid notation in
each of Bank Note One and the relevant Tranche D Note of the
relevant Tranche D Lender in respect of such Supplier (as
described in subclause (A) above) and the portion of such
Purchase exceeding 60% of such Supplier's Aggregate Financing
shall be evidenced by a grid notation in Bank Note One
(representing the entire amount of such excess), and in each
case such portion of such Purchase shall be funded in such
amounts under Bank Note One and under such Tranche D Lender's
Tranche D Note; and
(C) if, after giving effect to the portion of such
Purchase relating to a Supplier's Aggregate Financing, the
aggregate principal amount outstanding relating to such
Supplier's Aggregate Financing which would otherwise be
evidenced by a grid notation on Bank Note One will exceed such
Supplier's Aggregate Bank Portion, then the portion of such
Purchase not exceeding 60% of such Supplier's Aggregate
Financing (if any) shall be evidenced by a grid notation in
each of Bank Note One and the relevant Tranche D Note of the
relevant Tranche D Lender in respect of such Supplier (as
described in subclause (A) above), the portion of such
Purchase exceeding 60% of such Supplier's Aggregate Financing
shall be evidenced by a grid notation in Bank Note One (as
described in subclause (B) above) until the aggregate amounts
so evidenced for such Supplier equals the relevant Supplier's
Aggregate Bank Portion and the portion of such Purchase
exceeding such Supplier's Aggregate Bank Portion shall be
evidenced by a grid notation in the relevant Tranche D Note of
the relevant Tranche D Lender in respect of such Supplier in
the name of the Initial Purchaser (subject to the Tranche D
Participation Agreement) or such Tranche D Lender, as the case
may be (and subject to the provisions of Section 2.01(i)), and
in each case such portion of such Purchase shall be funded in
such amounts under Bank Note One and under such Tranche D
Lender's Tranche D Note.
(iii) A Participant (other than Tranche D Lenders) may elect,
prior to the Closing Date, to purchase its Bank Commitment in the form
of a participation in Bank Note Two, rather than Bank Note One, in
order to accelerate the timing of its Purchases under this Agreement.
If any such Participant(s) so elects to purchase a participation in
Bank Note Two, then on the Closing Date the Issuer will issue (A) Bank
Note Two in a principal amount equal to the aggregate amount of the
Bank Commitments that all such Participant(s) have elected to hold in
the form of participations in Bank Note Two and (B) Bank Note One in a
principal amount equal to the Initial Purchaser Commitment minus the
amount of Bank Note Two. On each Purchase Date, the allocation of the
applicable Purchase in respect of both Bank Note One and Bank Note Two
shall be made pursuant to the Bank Note One Allocation Method, except
that (x) the portion of such
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Purchase that would have been evidenced by a grid notation on the
Tranche D Lender's Tranche D Note and funded under such Tranche D Note
in accordance with the Bank Note One Allocation Method shall instead be
evidenced by a grid notation on Bank Note Two and funded under Bank
Note Two, until the entire amount of Bank Note Two has been purchased
(other than an amount equal to $1,000,000 in aggregate of such
Purchases, which shall be funded on the initial Purchase Date under the
Tranche D Notes, pro rata based on the Tranche D Lenders' respective
Tranche D Commitments) and (y) the portion of such Purchase that would
have been evidenced by a grid notation on Bank Note Two and funded
under Bank Note Two in accordance with the Bank Note One Allocation
Method (if Bank Note Two were allocated identically to Bank Note One
thereunder), but for the allocation under clause (x) above, shall
instead be evidenced by a grid notation on the applicable Tranche D
Lender's Tranche D Note and funded under such Tranche D Note.
(e) Application of Purchases and Disbursements. With respect to each
Purchase, all funds disbursed will be deposited in the Supplier Collateral
Account (it being understood that the Issuer may utilize a third party prime
financial institution to effect the conversion of such funds into reais). The
Brazilian Collateral Agent shall, from the funds so deposited, forward the
respective Contract Amounts due under the relevant Supply Contracts to the
respective Suppliers in accordance with the relevant Notice of Purchase and the
balance (including funds disbursed in respect of the Working Capital Amount and
Related Cost Amounts, but not including the Pre-Funded Purchase Amount or the
Commitment Reduction Amount) to the Issuer (except as provided in Section
2.01(b)(ii)); provided, however, that the proceeds of the first Purchase
hereunder may be used to fund the Working Capital Amount in full (if so elected
by the Issuer) prior to being distributed to any Supplier in satisfaction of
Contract Amounts. With respect to each disbursement under a Notice of
Disbursement, the Brazilian Collateral Agent will disburse the Pre-Funded
Purchase Amount and the Commitment Reduction Amount in accordance with such
Notice of Disbursement, provided that any amounts not so disbursed may be used
to make a prepayment in accordance with Section 2.07(b) (except that the minimum
amounts set forth therein shall not be applicable) so long as (i) no undrawn
Tranche D Commitment then exists, (ii) the Issuer provides notice and evidence
reasonably satisfactory to each of the Initial Tranche D Lenders as to which a
related Contract Amount has not then been fully disbursed hereunder that, after
giving effect to such prepayment, it has financial resources sufficient to meet
fully its obligations under the respective Supply Contracts, (iii) prepayments
of any Pre-Funded Purchase Amount are applied to the then outstanding amount of
Bank Note One and Bank Note Two in accordance with Section 2.03(b), and (iv)
prepayments of any Commitment Reduction Amount are applied to the then
outstanding amounts of the Tranche D-Nokia Note, the Tranche D-Siemens Note and
the Tranche D-Alcatel Note, respectively, in accordance with Section 2.03(b).
Funds in respect of each Supplier's Aggregate Financing shall be applied solely
for the purpose of funding the corresponding Working Capital Amount being funded
in respect of each Supplier's Supply Contract or the corresponding Contract
Amounts or Related Cost Amounts then payable in respect of each Supplier's
Supply Contract.
(f) Limitations on Commitments. Notwithstanding anything to the
contrary herein, the Initial Purchaser shall be obligated, in respect of each
Purchase, to make available only such funds with respect to such Purchases as it
shall previously have received from each Tranche A Participant, Tranche B
Participant, Tranche C Participant and Tranche D Participant to which the
6
Initial Purchaser has sold participations as of the relevant Purchase Date. Any
such Purchase that is not funded in whole, as a consequence of the failure of
any such Participant to provide its related funds, shall be reduced by the
amount of such shortfall. Schedule 5 sets forth, as of the date hereof, the name
of each Participant in respect of Tranches A-1 through C and its respective
Commitment in respect thereof. Notwithstanding the foregoing, nothing in this
clause (f) shall be deemed to relieve (i) the Initial Purchaser from making
available funds in respect of the portions of the Total Non-Participated
Interest being funded on each Purchase Date and (ii) each Tranche D Lender from
making available funds in respect of the portion of its Tranche D Commitment
being funded on each Purchase Date. The Initial Purchaser will purchase Tranche
D Notes, on the Closing Date, on behalf of the Tranche D Lenders that have not
elected to purchase directly a Tranche D Note.
(g) Expiration of Commitments. The obligation of the Purchasers to
make Purchases hereunder shall expire on the earlier to occur of (i) the third
anniversary of the Closing Date or, in respect of Bank Notes, the second
anniversary of the Closing Date, and (ii) the date all of the Commitments
hereunder otherwise terminate in accordance with the terms hereof (including
pursuant to Section 6.01) (such earlier date, the "COMMITMENT TERMINATION
DATE"). None of the Notes will contain any revolving feature and amounts repaid
or prepaid with respect thereto may not be reissued.
(h) Allocation Amounts of Tranches A1 to C. As regards that portion of
each Purchase relating to each of Tranches A1 to C, each Purchaser will be
obligated to fund a pro rata portion of such Tranche in the manner set forth in
the relevant Participation Agreement.
(i) Tranche D Allocation Amounts. As regards that portion of each
Purchase relating to each Supplier's Aggregate Financing represented by Tranche
D (in each case, the "TRANCHE D ALLOCATION AMOUNT"), each Tranche D Lender will
be obligated to fund its respective Tranche D Allocation Amount, by purchasing
either its relevant Tranche D Note or a Tranche D Participation in such Note
equal to such amount, as set forth in the Notice of Purchase relating to such
Purchase in accordance with the provisions of this Article 2. Each Tranche D
Lender shall notify the Administrative Agent, the Initial Purchaser and the
Issuer in writing no later than three Business Days preceding the initial
Purchase Date of its election to purchase its Tranche D Allocation Amount either
in the form of its Tranche D Note or a Tranche D Participation in such Note.
Unless the Administrative Agent and the Initial Purchaser shall have received
such written notice on or prior to the date required therefor, such Tranche D
Lender's Tranche D Allocation Amount shall be evidenced by a Participation in
its relevant Tranche D Note.
Section 2.02 Closing and Payments.
(a) Closing. Subject to satisfaction of each of the conditions
precedent in Section 3.01, the execution of the Transaction Documents and the
issuance of the Notes hereunder (collectively, the "CLOSING") shall take place
on August 10, 2001 or on such other date as the Issuer, the Guarantor, the
Initial Purchaser, the Tranche D Lenders and the Arrangers shall agree (the
"CLOSING DATE").
(b) Funding. Not later than 12:00 Noon (New York City time) on each
Purchase Date, unless the Administrative Agent determines that any applicable
condition specified in
7
Section 3.01 (in respect of the initial Purchase) and/or Section 3.02 (in
respect of each Purchase, including the initial Purchase) shall not have been
satisfied, the Initial Purchaser and/or the relevant Tranche D Lender, as the
case may be, shall, subject to Section 2.01(f), be obligated to make available
in Dollars the full amount of its respective portion of the Issuer's requested
Purchase for such Purchase Date, in immediately available funds to Banco ABN
AMRO Real S.A., as agent for the Administrative Agent, at ABN AMRO Bank N.V.,
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇, account no. 673-001-211-441.
The Administrative Agent will deposit the funds so received from the Purchasers
in the Supplier Collateral Account (for distribution in accordance with Section
2.01(e)), whereupon the Initial Purchaser and/or the relevant Tranche D Lender,
as the case may be, shall be deemed to have Purchased the relevant Notes in an
aggregate principal amount equal to its respective portion of the Issuer's
requested Purchase for such Purchase Date.
(c) Alternative Funding for Tranche D Lenders. The parties hereto
shall in good faith implement, to the extent permitted by applicable law and so
long as no economic disadvantage will result to the Issuer, mechanisms whereby
the portion of Purchases relating to Contract Amounts may be effected either
through direct payments to the Suppliers or through credits given by the
Suppliers under the relevant Supply Contracts with respect to Purchases by the
Tranche D Lenders and, as the case may be, amend the Financing Documents
accordingly.
Section 2.03 Principal Repayments. (a) Generally. The Issuer
unconditionally promises to pay, or cause to be paid, to the account of the
Principal Paying Agent, for the account of the relevant Purchasers, the
Principal Payment Amount on each Principal Payment Date as set forth below:
Principal Payment
Principal Payment Principal Payment Principal Payment Amount Under
Date Occurring in Amount Under Bank Amount Under Each Tranche D
Month Note One Bank Note Two Note
----------------- ----------------- ----------------- -----------------
February 2004 $26,250,000.00 or, if $90,416,666.64 or, if
less, the aggregate less, the aggregate
principal amount principal amount -
outstanding in respect outstanding in respect
of Tranche A1 under Bank of Tranche A1 under
Note One. Bank Note Two.
August 2004 $26,250,000.00 or, if $90,416,666.64 or, if
less, the aggregate less, the aggregate
principal amount principal amount -
outstanding in respect outstanding in respect
of Tranche A2 under Bank of Tranche A2 under
Note One. Bank Note Two.
8
Principal Payment
Principal Payment Principal Payment Principal Payment Amount Under
Date Occurring in Amount Under Bank Amount Under Each Tranche D
Month Note One Bank Note Two Note
----------------- ----------------- ----------------- -----------------
February 2005 $29,999,999.99 or, if $86,666,666.65 or, if
less, the aggregate less, the aggregate
principal amount principal amount _
outstanding in respect outstanding in respect
of Tranche B1 under Bank of Tranche B1 under
Note One. Bank Note Two.
August 2005 $29,999,999.99 or, if $86,666,666.65 or, if
less, the aggregate less, the aggregate
principal amount principal amount _
outstanding in respect outstanding in respect
of Tranche B2 under Bank of Tranche B2 under
Note One. Bank Note Two.
February 2006 $29,999,999.99 or, if $86,666,666.65 or, if
less, the aggregate less, the aggregate
principal amount principal amount _
outstanding in respect outstanding in respect
of Tranche B3 under Bank of Tranche B3 under
Note One. Bank Note Two.
August 2006 $17,500,000.03 or, if $99,166,666.77 or, if
less, the aggregate less, the aggregate
principal amount principal amount _
outstanding in respect outstanding in respect
of Tranche C under Bank of Tranche C under Bank
Note One. Note Two.
February 2007 1/6 of the aggregate
principal amount
outstanding on the
third anniversary of
- - the Closing Date in
respect of Tranche D
under such Tranche D
Note.
August 2007 1/6 of the aggregate
principal amount
outstanding on the
third anniversary of
- - the Closing Date in
respect of Tranche D
under such Tranche D
Note.
9
Principal Payment
Principal Payment Principal Payment Principal Payment Amount Under
Date Occurring in Amount Under Bank Amount Under Each Tranche D
Month Note One Bank Note Two Note
----------------- ----------------- ----------------- -----------------
February 2008 1/6 of the aggregate
principal amount
outstanding on the
third anniversary of
- - the Closing Date in
respect of Tranche D
under such Tranche D
Note.
August 2008 1/6 of the aggregate
principal amount
outstanding on the
third anniversary of
- - the Closing Date in
respect of Tranche D
under such Tranche D
Note.
February 2009 1/6 of the aggregate
principal amount
outstanding on the
third anniversary of
- - the Closing Date in
respect of Tranche D
under such Tranche D
Note.
August 2009 1/6 of the aggregate
principal amount
outstanding on the
third anniversary of
- - the Closing Date in
respect of Tranche D
under such Tranche D
Note.
(b) Application of Prepayments and Commitment Reductions.
(i) In the event that any Prepayment or Commitment
Reduction is made by or on behalf of the Issuer in accordance with the
terms hereof, the amount of such Prepayment or Commitment Reduction
shall be applied, except as set forth in Section 2.04(a), on a pro rata
basis among each of (A) the aggregate of the undrawn Initial Purchaser
Bank Note One Commitment and the then outstanding amount of Bank Note
One, (B) the aggregate of the undrawn Initial Purchaser Bank Note Two
Commitment and the then outstanding amount of Bank Note Two, (C) the
aggregate of the undrawn Tranche D Commitment of the Nokia Lenders and
the then outstanding amount of the Tranche D-Nokia Note, (D) the
aggregate of the undrawn Tranche D Commitment of the Siemens Lenders
and the then outstanding amount of the Tranche D-Siemens Note, and (E)
the aggregate of the undrawn Tranche D Commitment of the Alcatel
Lenders and the then outstanding amount of the Tranche D-Alcatel Note.
Such
10
amounts, as so allocated, shall be applied in the case of any Reduction
Event first to a Mandatory Prepayment under Section 2.04(a) and second
to a mandatory Commitment Reduction under Section 2.04(b).
(ii) After giving effect to the allocation of any
Prepayment or Commitment Reduction as set forth in subclause (i) above,
the amount of any such Prepayment or Commitment Reduction shall be
further applied concurrently (A) in respect of the undrawn Initial
Purchaser Bank Note One Commitment and the then outstanding amount of
Bank Note One, on a pro rata basis among all Tranche Interests in
respect of Tranche A (and within Tranche A, pro rata in respect of
Tranche A1 and Tranche A2), Tranche B (and within Tranche B, pro rata
in respect of Tranche B1, Tranche B2 and Tranche B3) and Tranche C
thereunder, and (B) in respect of the undrawn Initial Purchaser Bank
Note Two Commitment and the then outstanding amount of Bank Note Two,
in each case on a pro rata basis among all Tranche Interests in respect
of Tranche A, Tranche B and Tranche C thereunder.
(iii) After giving effect to the allocation of any
Prepayment as set forth in subclause (i) above, the amount of any such
Prepayment shall be further applied in respect of Tranche D, pro rata
among all remaining Principal Payment Amounts in respect of such
Tranche.
Section 2.04 Mandatory Prepayments; Mandatory Commitment
Reductions.
(a) Mandatory Prepayment. (i) In the event and on each occasion
that any Net Cash Proceeds are received by or on behalf of the Issuer or any of
its Subsidiaries in respect of any Reduction Event, the Issuer shall promptly
request permission from the Central Bank to remit all required amounts under
this Section 2.04 in Dollars to the Administrative Agent under the applicable
ROF and, within five Euro-Dollar Business Days after the Receipt Date for such
Net Cash Proceeds (subject, in each case, to the provisions of this Section
2.04(a) and Section 2.04(d)), prepay the Bank Notes in an aggregate principal
amount equal to the amount of such Net Cash Proceeds allocated thereto under
Section 2.03(b) and prepay Tranche D Notes in an aggregate principal amount
equal to the amount of such Net Cash Proceeds allocated thereto under Section
2.03(b), in each case together with interest thereon to the date of prepayment;
provided, however, that notwithstanding the foregoing, if the applicable
Reduction Event is the incurrence of any Debt described in Section 5.10(c) that
has been incurred to refinance in whole or in part specific Tranche D Notes (or
Tranche D Participations) of a Tranche D Lender, the Net Cash Proceeds thereof
shall be applied first to the prepayment of such Tranche D Notes of such Tranche
D Lender until such Notes are paid in full, and second in the manner set forth
in Section 2.03(b); and provided further, that notwithstanding the foregoing, if
the applicable Reduction Event is the event described in item (iv) of the
definition of "Reduction Event," the Net Cash Proceeds from such Reduction Event
shall be applied as a prepayment of such portion of each relevant Tranche D
Lender's Tranche D Note in respect of the Working Capital Amount of each
relevant Supplier as calculated in accordance with the second proviso of the
definition of "Net Cash Proceeds."
(ii) Notwithstanding the provisions of subclause (i)
above, no Mandatory Prepayment shall be required pursuant to this
Section 2.04(a) in respect of any Net Cash
11
Proceeds (or a portion thereof, if applicable) arising from an Asset
Sale if the Issuer shall deliver to the Administrative Agent a
Responsible Officers' Certificate to the effect that the Issuer or such
Subsidiary elects to apply such Net Cash Proceeds (or a portion thereof
specified in such certificate) on or before a date occurring 180 days
subsequent to the Receipt Date therefor to capital expenditures of the
Issuer incurred in connection with the mobile telephone network
business of the Issuer in the Concession Area (such date, the
"EXPIRATION DATE") and certifying that no Default has occurred and is
continuing. To the extent that the Issuer has so delivered such
Responsible Officers' Certificate and, in the manner and to the extent
specified in such certificate, the Net Cash Proceeds therefrom have not
been applied in full by or on behalf of the Issuer or such Subsidiary
on or before the Expiration Date, or committed to be so applied within
180 days after the Expiration Date pursuant to a binding contract, the
Issuer shall, on the Expiration Date, but subject to Section 2.04(d),
prepay the Notes in the manner set forth herein in an amount equal to
such Net Cash Proceeds that have not been so applied or committed. At
any time that aggregate Net Cash Proceeds by operation of the
immediately preceding sentence exceeding $50,000,000 (or its equivalent
in another currency) have not yet been applied to prepayment of the
Notes (or a Tranche D Participation) or in the manner specified in the
Responsible Officers' Certificate delivered pursuant to this Section
2.04(a)(ii), the Issuer shall immediately deliver to the Brazilian
Collateral Agent for deposit in the Brazilian Special Purpose Account
the entire Net Cash Proceeds not yet so applied and such Net Cash
Proceeds shall be held in the Brazilian Special Purpose Account until
so applied by the Issuer in accordance with, and within the time
periods specified in, this Section 2.04(a)(ii). On or prior to the
Expiration Date in respect of any Reduction Event with respect to which
a Responsible Officers' Certificate has been delivered pursuant to this
Section 2.04(a)(ii), the Issuer shall notify the Administrative Agent
in reasonable detail of the application of the Net Cash Proceeds
required to be applied on such date (including to which Person and for
which purposes such amounts are to be applied).
(b) Mandatory Commitment Reductions. (i) In the event and on each
occasion that any Net Cash Proceeds received by or on behalf of the Issuer or
any of its Subsidiaries in respect of any Reduction Event remain after the
application of such proceeds in accordance with clause (a) above (such remaining
amount, the "COMMITMENT REDUCTION AMOUNT"), the aggregate amount of the undrawn
Initial Purchaser Bank Note One Commitment (and, accordingly the Bank
Commitments thereunder), the undrawn Initial Purchaser Bank Note Two Commitment
(and, accordingly, the Bank Commitments thereunder), the undrawn Tranche D
Commitment of the Nokia Lenders, the undrawn Tranche D Commitment of the Siemens
Lenders and the undrawn Tranche D Commitment of the Alcatel Lenders shall be
reduced by the lesser of (i) the amount of such remaining Net Cash Proceeds
allocated thereto in accordance with Section 2.03(b) and (ii) the aggregate
amount of such undrawn Commitment. As to Purchasers under Tranche A, Tranche B
and Tranche C, the Commitment of each such Purchaser (to the extent then
undrawn) shall be reduced in an amount equal to the product of (w) the aggregate
amount of the reduction in the aggregate undrawn Commitments allocated thereto
in accordance with Section 2.03(b), multiplied by (x) a fraction, the numerator
of which is the Commitment of such Person (including both undrawn amounts and
drawn amounts of Purchases in respect of such Commitment) and the denominator of
which is the aggregate amount of the Initial Purchaser Commitment (including
both undrawn amounts and drawn amounts of Purchases in
12
respect of such Commitment). The undrawn Commitment of the Initial Purchaser in
respect of the Tranche A1 Non-Participated Interest, the Tranche A2
Non-Participated Interest, the Tranche B1 Non-Participated Interest, the Tranche
B2 Non-Participated Interest, the Tranche B3 Non-Participated Interest and the
Tranche C Non-Participated Interest under each Bank Note shall be reduced
ratably with, and simultaneously with, any reduction in the undrawn Tranche A1
Commitment, Tranche A2 Commitment, Tranche B1 Commitment, Tranche B2 Commitment,
Tranche B3 Commitment or Tranche C Commitment, respectively, under such Bank
Note.
(ii) In connection with any Commitment Reduction arising
from any Reduction Event, the Issuer shall, no later than five
Euro-Dollar Business Days after the Receipt Date of the related Net
Cash Proceeds, deposit the Commitment Reduction Amount related to such
Commitment Reduction in the Supplier Collateral Account. The Issuer
shall give the Initial Purchaser, the Tranche D Lenders, the
Administrative Agent and the Brazilian Collateral Agent, Notice(s) of
Disbursement of such funds in accordance with Section 2.01(b)(ii).
(c) Procedure. The Issuer shall notify the Administrative Agent
(which notice may be made by telephone and confirmed by (and effective upon
receipt of) telecopy) of any Mandatory Prepayment or mandatory Commitment
Reduction not later than 3:00 P.M. (in the Administrative Agent's Jurisdiction)
three Euro-Dollar Business Days before the date of such Mandatory Prepayment or
mandatory Commitment Reduction. Each such notice shall be irrevocable and shall
specify the date of such Mandatory Prepayment or mandatory Commitment Reduction,
the principal amount of such Mandatory Prepayment or mandatory Commitment
Reduction (in accordance with Section 2.04(a)) and a reasonably detailed
calculation of the amount thereof. Promptly following receipt of any such
notice, the Administrative Agent shall advise the Purchasers of the contents
thereof. In addition, prior to any Mandatory Prepayment, unless such Mandatory
Prepayment is made on behalf of the Issuer by an entity located outside of
Brazil, the Issuer shall provide to the Administrative Agent a copy of the
applicable prior authorization of the Central Bank relating to such Mandatory
Prepayment. Each Mandatory Prepayment shall be applied as set forth in Section
2.03(b).
(d) Deferral. In the event and on each occasion that the Issuer is
required to make any Mandatory Prepayment on any date other than an Interest
Payment Date, the Issuer may, subject to the terms and conditions set forth in
this Section 2.04(d), defer the date on which such Mandatory Prepayment is
required to be made to the immediately succeeding Interest Payment Date if, and
only to the extent that, no Default has occurred and is continuing on the date
that such prepayment is otherwise required to be made hereunder; provided that
if a Default shall occur when any such deferral shall exist, the Issuer shall be
required to make promptly such Mandatory Prepayment in accordance with Section
2.04(a). As a condition to the deferral of any Mandatory Prepayment by the
Issuer pursuant to this Section 2.04(d), the Issuer shall (1) notify the
Administrative Agent of such deferral prior to the date on which such Mandatory
Prepayment otherwise would be required, (2) as soon as practicable after
becoming aware of the amount to be deferred hereunder, request permission from
the Central Bank to remit such amount in U.S. Dollars to the U.S. Collateral
Account, (3) transfer to the Brazilian Collateral Agent, for deposit in the
Brazilian Special Purpose Account, funds in an aggregate amount equal to the
Mandatory Prepayment being deferred (which deposit shall be made in Reais in an
amount equivalent to such prepayments, based upon the PTAX Exchange Rate) until
such time as the Issuer shall have
13
received the Central Bank approval described in (2) above, at which time the
Brazilian Collateral Agent shall remit to the U.S. Collateral Agent the funds in
the Brazilian Special Purpose Account in Dollars, provided, however, that the
Brazilian Collateral Agent shall only be required to remit such funds to the
U.S. Collateral Account to the extent the funds in the Brazilian Special Purpose
Account exceed $10,000,000 (based upon the PTAX Exchange Rate as of any date).
On each date on which the Issuer is required to make a Mandatory Prepayment that
has been deferred pursuant to this Section 2.04(d), the Brazilian Collateral
Agent and/or U.S. Collateral Agent shall release the funds deposited in the
Brazilian Special Purpose Account and/or the U.S. Collateral Account,
respectively, in respect of such deferred Mandatory Prepayment and (with respect
to funds in the Brazilian Special Purpose Account) apply such funds to purchase
Dollars, which shall be applied to make such Mandatory Prepayment in accordance
with Section 2.07; provided that neither any deficiency of the funds so
released, nor any delay in the release or application of such funds, shall
relieve the Issuer of its obligation to make any Mandatory Prepayment required
to be made hereunder as and when due (giving effect to any applicable deferral
under this Section 2.04(d)), in the full amount required in Dollars, except to
the extent that such deficiency or delay is directly attributable to the
misconduct of the Brazilian Collateral Agent or the U.S. Collateral Agent, as
applicable.
Section 2.05 Interest.
(a) Interest Amount. Each Note shall bear interest on the
outstanding principal amount thereof, for each day during each Interest Period
applicable to such Note from the date such Note is issued until it becomes due,
at a rate per annum equal to the sum of LIBOR for such Interest Period plus the
Margin for such Interest Period (such accrued interest for any Interest Period,
the "INTEREST AMOUNT" for such Interest Period). Notwithstanding the foregoing,
each Note shall bear interest at a maximum rate of LIBOR plus 5.50% per annum
and a minimum rate of LIBOR plus 3.30% per annum, provided that such maximum
rate shall not limit any amount that any Purchaser may be entitled to receive
under clause (b) below or under Sections 2.09 or 2.11 or Article 8. The Interest
Amount, as may be increased pursuant to Section 2.05(b), shall be payable for
each Interest Period on each Interest Payment Date.
(b) Post-Default Interest. Notwithstanding the foregoing, the
Issuer shall pay to the Principal Paying Agent, for the account of the
Purchasers, upon demand, interest at the Post-Default Rate on any principal of
any Note, interest thereon or any other amount due under this Agreement that
shall not be paid in full (whether at stated maturity, by acceleration, by
mandatory prepayment or otherwise) for the period from and including the due
date thereof to but excluding the date the same is paid in full.
(c) Determination of Rates. The Administrative Agent shall
determine each interest rate applicable to each Note hereunder. The
Administrative Agent shall promptly notify the Issuer, each Purchaser and the
Principal Paying Agent of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of clearly demonstrable
error.
Section 2.06 Fees.
(a) The Issuer shall pay to the Principal Paying Agent, for
account of the Initial Purchaser and the respective Tranche D Lenders, a
commitment fee on the daily average
14
undrawn amount of the Initial Purchaser Commitment and the respective Tranche D
Commitments, respectively, as such Commitments may be reduced from time to time
in accordance with Section 2.04(b), for the period from and including the date
of this Agreement to but not including the earlier of (i) the date the Initial
Purchaser Commitment and the respective Tranche D Commitment are fully drawn and
(ii) the Commitment Termination Date, at a rate per annum equal to 1.0%. The
accrued commitment fee shall be payable on each Interest Payment Date and the
Commitment Termination Date.
(b) The Issuer shall pay or cause to be paid to the Agents, for
the accounts of the Arrangers, the Agents and the Purchasers, as the case may
be, such other fees in amounts and at such times as previously agreed upon in
the Fee Letters and any other Financing Document.
Section 2.07 Optional Commitment Reductions; Optional Prepayments.
(a) The Issuer may upon at least ten Euro-Dollar Business Days'
notice to the Administrative Agent and each Tranche D Lender, reduce ratably the
Commitments hereunder in amounts aggregating $10,000,000 or any larger multiple
of $1,000,000, provided that the Issuer provides in such notice evidence
reasonably satisfactory, to each of the Initial Tranche D Lenders as to which a
related Contract Amount has not then been fully disbursed hereunder, that, after
giving effect to such Commitment Reduction, it has financial resources
sufficient to meet fully its obligations under the respective Supply Contracts.
Such notice of optional Commitment Reduction shall not be revocable by the
Issuer. Each Commitment Reduction shall be applied as set forth in Section
2.03(b).
(b) Subject to Section 2.09 hereof and clause (d) below, the
Issuer may upon at least ten Euro-Dollar Business Days' notice to the
Administrative Agent, prepay or cause to be prepaid the Notes in whole at any
time, or from time to time in part, in amounts aggregating $10,000,000 or any
larger multiple of $1,000,000, by paying the principal amount to be prepaid
together with interest accrued thereon to the date of prepayment. Such notice of
Optional Prepayment shall not be revocable by the Issuer. Each Optional
Prepayment shall be applied as set forth in Section 2.03(b).
(c) Promptly after receiving a notice of an Optional Prepayment
pursuant to this Section, the Administrative Agent shall notify each Purchaser
of the contents thereof and of such Purchaser's ratable share of such Optional
Prepayment.
(d) The Issuer shall, prior to such Optional Prepayment, provide
to the Administrative Agent evidence of all necessary government approvals or
authorizations relating to such Optional Prepayment.
Section 2.08 General Provisions as to Payments. (a) The Issuer
shall make each payment of principal of, and interest on, the Notes and any
other amount (including fees) payable under the Financing Documents, not later
than 12:00 Noon (New York City time) on the date one Euro-Dollar Business Day
immediately prior to the date when due hereunder, in federal or other funds in
Dollars immediately available in New York City, to the Principal Paying Agent at
the account identified in writing by the Principal Paying Agent (and any such
payment above shall constitute payment of the relevant obligation by the Issuer
when and to the extent received
15
at such account or address). The Principal Paying Agent will, subject to Section
2.08(c), promptly arrange with the Administrative Agent to distribute, no later
than the date due hereunder, to (i) each Purchaser its ratable share of each
such payment received by the Administrative Agent for the account of such
Purchaser and (ii) any other payment that may be required under each
Participation Agreement. Whenever any payment of principal of, or interest on,
any Note, or any other payment shall be due on a day which is not a Euro-Dollar
Business Day, the date for payment thereof shall be extended to the next
succeeding Euro-Dollar Business Day, unless such Euro-Dollar Business Day falls
in a subsequent calendar month, in which case the date for payment thereof shall
be the next preceding Euro-Dollar Business Day. If the date for any payment of
any amount is extended by operation of law or otherwise, including by operation
of the immediately preceding sentence, interest thereon shall be payable for
such extended time on the extended date for payment of such amount.
(b) Unless the Issuer notifies the Administrative Agent before the
date on which any payment is due from the Issuer to the Purchasers hereunder
that the Issuer will not make, or cause another entity to make, such payment in
full, the Administrative Agent may assume that the Issuer has made or caused to
be made such payment in full to the Principal Paying Agent on such date and the
Administrative Agent may, in reliance on such assumption, cause to be
distributed to the Purchasers on such due date an amount equal to the amount
then due such Purchaser. If and to the extent that the Issuer shall not have so
made such payment, each such Purchaser shall repay to the Principal Paying Agent
forthwith on demand such amount distributed to such Purchaser together with
interest thereon, for each day from the date such amount is distributed to such
Purchaser until the date such Purchaser repays such amount to the Principal
Paying Agent, at the Federal Funds Rate. Nothing in this Section 2.08(b) shall
be deemed to relieve the Issuer or the Guarantor of any of its obligations to
pay the principal of or interest on the Notes or any other amount payable under
the Financing Documents.
(c) On any date on which the aggregate amount paid to the
Principal Paying Agent in respect of principal, interest, fees or other amounts
payable under the Financing Documents, other than amounts to be applied in
accordance with Section 2.07(b), shall be insufficient to pay all such amounts
due on such date, the amount paid shall be applied on a pro rata basis among all
Notes outstanding in the following order of priority:
(i) first, to the payment of accrued but unpaid interest,
fees and other amounts (excluding principal) in respect of the Notes
and accrued but unpaid PRI Premiums pro rata in accordance with the
provisions of this Agreement (it being understood that the Issuer and
the Guarantor shall have no liability for the payment of such PRI
Premiums and that amounts due in respect of such PRI Premiums shall be
paid by or on behalf of the relevant Purchasers out of such accrued but
unpaid interest, fees and other amounts);
(ii) second, to the payment of the then due and unpaid
principal of the Notes pro rata in accordance with the provisions of
this Agreement; and
(iii) third, to the payment of any other amounts then
payable to the Purchasers or any Agent under any Financing Document.
16
The Issuer and the Guarantor agree to use their best efforts to notify
the Administrative Agent and the Principal Paying Agent of an insufficiency as
described in this Section 2.08(c) at least one Euro-Dollar Business Day prior to
the relevant payment date.
(d) The Issuer and the Guarantor agree to make all payments under
the Financing Documents strictly in accordance with the terms hereof and
thereof, regardless of any law, regulation or order now or hereafter in effect
in Brazil or any other jurisdiction (except the laws of the State of New York)
affecting any of such terms or the rights of the Administrative Agent, the
Purchasers or the other Agents with respect thereto.
Section 2.09 Funding Losses. If the Issuer (a) makes any payment
of principal with respect to any Note or a Note is required to bear interest at
the Alternative Rate (whether such payment or requirement is pursuant to Article
2, 6 or 8 or otherwise) on any day other than an Interest Payment Date, (b)
fails to make any required principal payment in respect of any Note on the due
date thereof in accordance with the terms of this Agreement or (c) fails to
effect a Purchase or prepay any Note after notice has been given in accordance
with Section 2.01(c), Section 2.04(c) or 2.07(b), then in each case (a) through
(c) the Issuer shall reimburse each affected Purchaser, upon its written
request, within five Euro-Dollar Business Days of such request (or such longer
period as shall be necessary to resolve any dispute as to the amount of such
loss or expense, provided that the parties thereto are negotiating in good faith
with respect thereto) for any resulting loss or expense incurred by it (or by an
existing or prospective Participant in the related Note), including any loss
incurred in obtaining, liquidating or employing deposits from third parties, but
excluding loss of margin, calculated in accordance with such Purchaser's
customary practices; provided that such Purchaser shall have delivered to the
Issuer, together with any such request, a certificate showing such Person's
calculation of such amount of loss or expense in reasonable detail, which
certificate shall be conclusive in the absence of clearly demonstrable error.
Section 2.10 Computation of Interest and Fees. Interest based on
the Prime Rate hereunder shall be computed on the basis of a year of 365 days
(or 366 days in a leap year) and paid for the actual number of days elapsed
(including the first day but excluding the last day). All other interest and
fees shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day).
Section 2.11 Regulation D Compensation. If and so long as a
reserve requirement of the type described in the definition of "Euro-Dollar
Reserve Percentage" is prescribed by the Board of Governors of the Federal
Reserve System of the United States (or any successor), each Purchaser subject
to such requirement may require the Issuer to pay, contemporaneously with each
payment of interest on each of such Purchaser's Notes, additional interest on
such Note at a rate per annum determined by such Purchaser up to but not
exceeding the excess of (i) (A) the applicable LIBOR divided by (B) one minus
the Euro-Dollar Reserve Percentage over (ii) the applicable LIBOR. Any Purchaser
wishing to require payment of such additional interest (x) shall so notify the
Issuer and the Administrative Agent (and, in the case of any Participant, the
respective Purchaser), in which case such additional interest on the Note or
Notes of such Purchaser shall be payable to such Purchaser at the place
indicated in such notice with respect to each Interest Period commencing at
least three Euro-Dollar Business Days after such Purchaser gives such notice and
(y) shall notify the Issuer at least five Euro-Dollar Business Days before
17
each date on which interest is payable on the Note or Notes of the amount then
due it under this Section. Subject to the limitations of Section 10.06(b), each
Participant shall be entitled to the benefits of this Section 2.11 as if it were
a Purchaser of the Note in which it holds a participation and shall present any
claim in respect thereof to the relevant Purchaser, which shall forward such
claim to the Issuer.
ARTICLE 3
CONDITIONS
Section 3.01 Conditions Precedent to Closing Date. The respective
obligations of the Purchasers with respect to the Closing Date hereunder are
subject to, in addition to the conditions to their respective purchase
obligations set forth in Section 3.02, each of the following terms and
conditions:
(a) the Administrative Agent shall have received duly executed
counterparts of each of the Financing Documents (other than a Mortgage Deed),
each as in full force and effect on the Closing Date and each not subject to any
unsatisfied or unwaived conditions to effectiveness;
(b) the Administrative Agent, the Initial Purchaser, the Initial
Tranche D Lenders and the Brazilian Collateral Agent shall have received:
(i) a Notice of Purchase duly executed by the Issuer
relating to the Note(s) to be issued to the Initial Purchaser (and to
each Tranche D Lender electing to purchase a Tranche D Note rather than
a Tranche D Participation) on the initial Purchase Date, which Notice
of Purchase shall request a Purchase in an amount which shall, after
payment of all or a portion of the Working Capital Amount (as may be
requested by the Issuer pursuant to Section 2.01(e)), equal to at least
the following amount for each Supplier: $136,000,000 with respect to
the Nokia Supplier, $51,200,000 with respect to the Siemens Supplier,
$44,800,000 with respect to the Alcatel Supplier, which amount shall be
applied to fund each Suppliers' Contract Amount; and
(ii) the Notes to be issued on the initial Purchase Date,
duly executed by the Issuer in the aggregate amount of the applicable
Commitments thereunder and in the name of the Initial Purchaser (and of
each Initial Tranche D Lender electing to purchase Tranche D Notes
rather than a Tranche D Participation Interest);
(c) the Administrative Agent shall have received opinions of
counsel, each dated the Closing Date, from:
(i) Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, special New York
counsel to the Issuer and the Guarantor, covering the matters
summarized on Exhibit C-1 hereto, and Ulhoa Canto, Rezende e ▇▇▇▇▇▇
Advogados, special Brazilian counsel to the Issuer and the Guarantor,
covering the matters summarized on Exhibit C-2 hereto, in each case
addressed to the Purchasers and the Administrative Agent;
(ii) Cleary, Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special New York
counsel to Nokia, covering the matters summarized on Exhibit C-4
hereto; and Finnish in-house counsel to
18
Nokia, covering the matters summarized on Exhibit C-5 hereto, in each
case addressed to the Purchasers and the Administrative Agent; and
(iii) ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, special New York counsel
to Siemens and Alcatel, covering the matters summarized on Exhibit C-6
hereto; German in-house counsel to Siemens, covering the matters
summarized on Exhibit C-7 hereto; and French in-house counsel to
Alcatel, covering the matters summarized on Exhibit C-8 hereto, in each
case addressed to the Purchasers and the Administrative Agent.
(d) the relevant Tranche D Lenders shall have received opinions of
counsel, each dated the Closing Date, from:
(i) ▇▇▇▇▇▇ Filho, ▇▇▇▇▇ Filho, Marrey Jr. e ▇▇▇▇▇▇▇
Advogados, special Brazilian counsel to the Tranche D Lenders, covering
the matters summarized on Exhibit C-3 hereto, addressed to the Initial
Tranche D Lenders;
(ii) Cleary, Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special New York
counsel to Nokia, covering such matters as Nokia may have requested,
addressed to Nokia; and
(iii) ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, special New York counsel
to Siemens and Alcatel, covering such matters as Siemens and Alcatel
may have requested, addressed to Siemens and Alcatel.
(e) the Administrative Agent shall have received an opinion of (i)
▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, special New York counsel to the Initial Purchaser, and
(ii) ▇▇▇▇▇, Cescon ▇▇▇▇▇▇▇▇▇▇, Barrieu e ▇▇▇▇▇▇, special Brazilian counsel to
the Initial Purchaser, covering the matters summarized on Exhibits D-1 and D-2
hereto, respectively, and each dated the Closing Date, in each case addressed to
the Purchasers and the Agents;
(f) the Administrative Agent shall have received (i) true and
correct copies of each of the Concession Agreements, each in full force and
effect on the Closing Date and each not subject to any unsatisfied conditions to
effectiveness, and all material and necessary licenses, concessions and
authorizations, and the rights appurtenant thereto to operate the respective
businesses of the Issuer, the Guarantor and the Material Subsidiaries, shall be
in full force and effect to the extent required to be in effect on the Closing
Date (other than the right of the Issuer to operate a PCS network as of the
Closing Date), (ii) a Responsible Officer's Certificate certifying to the
foregoing and (iii) a Responsible Officers Certificate (which may be the same
certificate) certifying that each of the Supply Contracts is in full force and
effect on the Closing Date and not subject to any unsatisfied condition to
effectiveness; provided, however, that the failure of the Supply Contract of any
Supplier to be in full force and effect on the Closing Date without unsatisfied
or unwaived conditions to effectiveness shall not affect the obligations of the
Purchasers with respect to the Aggregate Financings of the unaffected Suppliers
and related Tranche D Lenders;
(g) the Administrative Agent shall have received evidence
satisfactory to it of the satisfaction or waiver of all conditions to the
closing of the transactions contemplated by the Transaction Documents to be
consummated by the Issuer and the Guarantor on the Closing Date as set forth in
the Transaction Documents (including in the Participation Agreements), and that
19
all such transactions will take place prior to or simultaneously with the
transactions contemplated hereby to take place on the Closing Date;
(h) the Issuer and the Guarantor shall each have provided to the
Administrative Agent a Responsible Officers' Certificate certifying that the
Issuer and the Guarantor possess the insurance coverage required under Section
5.03 and attaching an insurance binder or other evidence that the Brazilian
Collateral Agent has been named as the loss payee on all insurance policies
required under Section 5.03(c), other than liability policies payable directly
to third party payees;
(i) the Administrative Agent shall have received the financial
statements referred to in Sections 4.04(a) and (c) together with a Responsible
Officers' Certificate setting forth in reasonable detail the calculations
required to establish that the Guarantor is in compliance with the requirements
of Section 5.11 on the Closing Date after giving effect to the transactions
contemplated to take place under the Transaction Documents on the Closing Date;
(j) immediately before and after giving effect to the transactions
contemplated to take place under the Transaction Documents on the Closing Date,
(i) the representations and warranties of the Issuer and the Guarantor contained
herein and in any other Financing Document to which they are a party shall be
true and correct in all material respects on and as of the Closing Date, unless
stated to relate to a specific earlier date, in which case such representations
and warranties shall be true and correct in all material respects as of such
date, and (ii) no Default shall have occurred and be continuing;
(k) the Administrative Agent shall not have received notice from
the Arrangers that there has occurred, since December 31, 2000, any Material
Adverse Effect.
(l) the Administrative Agent shall have received a copy of the
letter from the Process Agent accepting its appointment as such pursuant to
Section 10.11;
(m) the Administrative Agent shall have received all documents any
Agent may reasonably request relating to the existence of the Issuer and the
Guarantor, the corporate authority for and the validity of this Agreement and
the Notes, and any other matters relevant thereto, all in form and substance
satisfactory to the Agents;
(n) the Administrative Agent shall have received a certificate of
the President, Chief Financial Officer, Secretary, Assistant Secretary,
Directors or duly appointed attorneys-in-fact of each of the Issuer and the
Guarantor, substantially in the form of Exhibit K hereto, each dated as of the
Closing Date, certifying: (i) and attaching true and correct copies of such
Person's charter documents and by-laws, (ii) and attaching the resolutions of
such Person's General Shareholders' Meeting, Board of Directors or Board of
Officers, as the case may be, then in full force and effect authorizing the
execution, delivery and performance of the Financing Documents to which such
Person is a party, (iii) the incumbency and true signatures of the officer(s)
who may execute (or who have executed on behalf of such Person the powers of
attorney granting powers to the individuals who may execute) on behalf of such
Person each Financing Document to which such Person is a party; (iv) the
representations and warranties of the Issuer and the Guarantor contained herein
and in any other Financing Document to which they are a party shall be true
20
and correct in all material respects on and as of the Purchase Date, unless
stated to relate to a specific earlier date, in which case such representations
and warranties shall be true and correct in all material respects as of such
date, and (v) no Default shall have occurred and be continuing;
(o) the Administrative Agent shall have received evidence that all
prior and contemporaneous approvals, authorizations or filings with any
Governmental Authority that may be required in connection with the execution,
delivery and performance of any Financing Document by any Person a party thereto
have been obtained and are in full force and effect (other than such approvals,
authorizations or filings to be provided after the Closing Date, as set forth in
Section 4.02);
(p) the Administrative Agent shall have received evidence
satisfactory to it of the creation and perfection of a first priority security
interest in the Collateral existing and owned by the Issuer as of the Closing
Date in favor of the Secured Parties; and
(q) the Administrative Agent shall have received a Responsible
Officers' Certificate of each of the Suppliers, dated as of the Closing Date,
each affirming that the Supply Contract between such Supplier and the Issuer is
in full force and effect on the Closing Date and is not subject to any
unsatisfied or unwaived conditions to effectiveness; provided, however, that the
failure of the Supply Contract of any Supplier to be in full force and effect on
the Closing Date without unsatisfied or unwaived conditions to effectiveness
shall not affect the obligations of the Purchasers with respect to the Aggregate
Financings of the unaffected Suppliers and related Tranche D Lenders.
Section 3.02 Conditions Precedent to each Purchase Date. The
respective obligations of the Purchasers to make a Purchase on any Purchase Date
are subject (in addition, with respect to the initial Purchase Date, to the
conditions set forth in Section 3.01) to each of the following terms and
conditions:
(a) the Administrative Agent, the Initial Purchaser, the Tranche D
Lenders and the Brazilian Collateral Agent shall have received a Notice of
Purchase duly executed by the Issuer relating to the Purchase(s) to be made on
such Purchase Date;
(b) the Administrative Agent shall have received evidence
satisfactory to it of the prior registration of the financial terms and
conditions of the relevant Purchase and the Parent Guaranty with the Central
Bank under the applicable ROF to enable the Issuer and the Guarantor to pay all
amounts payable hereunder and under the Notes in Dollars, including without
limitation in respect of principal, interest, fees, commissions and expenses;
(c) immediately before and after giving effect to the relevant
Purchase (i) the representations and warranties of the Issuer and the Guarantor
contained herein and in any other Financing Document to which they are a party
shall be true and correct in all material respects on and as of the Purchase
Date, unless stated to relate to a specific earlier date, in which case such
representations and warranties shall be true and correct in all material
respects as of such date, and (ii) no Default shall have occurred and be
continuing;
(d) all prior and contemporaneous approvals, authorizations or
filings with any Governmental Authority that may be required in connection with
the performance of any
21
Financing Document by the Issuer and the Guarantor shall have been obtained and
shall be in full force and effect (other than such approvals, authorizations or
filings to be provided after the Purchase Date, as set forth in Section 4.02);
(e) there shall have been created and perfected a first priority
security interest in the Collateral purchased with the proceeds of the relevant
Purchase existing and owned by the Issuer as of such Purchase Date in favor of
the Secured Parties;
(f) with respect to each Purchase Date occurring on or after the
later of (i) January 1, 2002 and (ii) the date on which ANATEL determines that
the STFC Subsidiaries have met all applicable regulatory milestones for the
provision of STFC services (Servico Telefonico Fixo Comutado) under the relevant
Concession Agreements, all material and necessary licenses, concessions and
authorizations, and the rights appurtenant thereto to operate the business of
the Issuer and the Material Subsidiaries, shall be in full force and effect;
(g) the Agents and the Tranche D Lenders shall have received
payment (prior to such Purchase or simultaneously with such Purchase) in full of
all fees, expenses and other amounts due and payable hereunder (including all
amounts to be paid pursuant to Section 2.06 and all reasonable fees and expenses
payable pursuant to Section 10.03, to the extent the Issuer has received notice
thereof prior to the Purchase Date) or pursuant to any other Financing Document;
and
(h) the Administrative Agent shall not have received notice from
the Arrangers that there has occurred, since the date of the Guarantor's and the
Issuer's latest audited financial statements, any Material Adverse Effect.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Each of the Issuer and the Guarantor hereby represents and warrants, as
of the Closing Date, the date of each Notice of Purchase and each Purchase Date,
that:
Section 4.01 Corporate Existence and Power. Each of the Issuer,
the Guarantor and the Material Subsidiaries is a corporation or other business
entity duly incorporated or organized, validly existing and, where relevant, in
good standing under the laws of its jurisdiction of incorporation or
organization, and has all corporate or other powers and all governmental and
third-party licenses, consents, authorizations and approvals (including in the
case of the Issuer, the Concessions, subject to the fulfillment of
universalization and expansion requirements of the Concession Agreements assumed
by the STFC Subsidiaries identified on Schedule 6 hereto) required to carry on
its business as now conducted, except to the extent that the failure to have any
such powers, licenses, consents, authorizations or approvals, in the aggregate,
has not had and could not reasonably be expected to have a Material Adverse
Effect.
Section 4.02 Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by each of the Issuer and
the Guarantor of each Transaction Document to which it is a party as of the date
this representation is made or deemed made (i) are within the corporate powers
of the Issuer and the Guarantor and have been duly authorized by all
22
necessary corporate action, (ii) require no action by or in respect of, or
filing with, any governmental body, agency or official (including ANATEL) (other
than (x) actions or filings which have been taken or made on or prior to the
Closing Date and (y) actions to be taken and filings to be made after the
Closing Date in respect of (1) the registration with the Central Bank under the
applicable ROF of the relevant payment schedule (Esquema de Pagamento) relating
to each Note and (2) the obtaining of a special approval from the Central Bank
for the Issuer or the Guarantor to make payments on dates earlier than or
falling after the 120th day from the scheduled payment dates indicated in the
payment schedule referred to in (1) above), and (iii) do not contravene, or
constitute a default under, any provision of applicable law or regulation or of
the certificate of incorporation, by-laws or equivalent constitutional document
of the Issuer, the Guarantor or any Material Subsidiary, the Concession or of
any agreement, judgment, injunction, order, decree or other instrument binding
upon the Issuer, the Guarantor, or any of the Material Subsidiaries or any of
their respective properties or result in the creation or imposition of any Lien
on any asset of the Issuer, the Guarantor, or any of the Material Subsidiaries
(other than Liens created pursuant to the Collateral Documents), except for such
contraventions, defaults or Liens that, in the aggregate, have not had and could
not reasonably be expected to have a Material Adverse Effect.
Section 4.03 Binding Effect. The Transaction Documents (including
after giving effect to the transactions contemplated to occur on the Closing
Date and each Purchase Date) to which each of the Issuer and the Guarantor is a
party as of the date this representation is made or deemed made have been duly
authorized, executed and delivered and constitute valid and binding agreements
of the Issuer and the Guarantor, respectively, in each case enforceable in
accordance with their terms, subject to applicable bankruptcy, insolvency or
similar laws affecting creditors' rights generally and general principles of
equity.
Section 4.04 Financial Information. (a) The audited consolidated
balance sheet of the Issuer and the Guarantor and its Consolidated Subsidiaries
as of December 31, 2000 and the related consolidated statements of operations,
cash flows and changes in shareholders' equity for the Fiscal Year then ended,
reported on by PricewaterhouseCoopers Auditores Independentes, copies of which
have been delivered to each of the Purchasers, fairly present, in conformity
with GAAP, the consolidated financial position of the Guarantor and its
Consolidated Subsidiaries as of such date and their consolidated results of
operations and cash flows for such Fiscal Year. As of December 31, 2000, the
Guarantor and its Subsidiaries had no material liabilities, contingent or
otherwise, including liabilities relating to the Concession, liabilities for
taxes, long-term leases or forward or long-term commitments, that are not
properly reflected on such balance sheet in accordance with GAAP or the
footnotes relating thereto.
(b) Since December 31, 2000, there has been no Material Adverse
Effect.
(c) The unaudited balance sheet of the Issuer and the Guarantor
and its Consolidated Subsidiaries as of March 31, 2001 (and, if publicly
available, as of June 30, 2001) copies of which have been delivered to each
Purchaser on or prior to the date hereof, fairly presents, in conformity with
GAAP applied on a basis consistent with the financial statements referred to in
Section 4.04(a), the consolidated financial position of the Issuer and the
Guarantor and its Consolidated Subsidiaries as of March 31, 2001 (and, if
publicly available, as of June 30, 2001).
23
(d) As of the Closing Date and the initial Purchase Date, the
assets of the Issuer, the Guarantor and the Material Subsidiaries are not
subject to any Lien securing Debt in excess of $10,000,000 (whether created
individually, or in respect of Liens created in a series of related
transactions, in the aggregate), except (i) those set forth in Schedule 3 and
(ii) Permitted Liens of the type set forth in clause (b)(ii) of the definition
of "Permitted Liens."
Section 4.05 Litigation. There is no action, suit or proceeding
pending against or, to the knowledge of the Issuer or the Guarantor, threatened
against or affecting the Issuer, the Guarantor or any of the Material
Subsidiaries before any court or arbitrator or any governmental body, agency or
official (a) which, taking into account the probability of an adverse decision
and the magnitude of such adverse decision, could reasonably be expected to have
a Material Adverse Effect or (b) which in any manner draws into question the
validity or enforceability of the Transaction Documents.
Section 4.06 Compliance with Laws. Each of the Issuer and the
Guarantor and the Material Subsidiaries is in compliance with all applicable
laws, ordinances, rules, regulations and requirements of any Governmental
Authority applicable to it (including the Concessions, the Concession Agreements
and laws and regulations governing the Concession, other ANATEL regulations,
Environmental Laws, social security laws and retirement and pension fund laws
and, to the extent applicable, requirements of the Central Bank and the Comissao
de Valores Mobiliarios), except to the extent that non-compliance could not in
the aggregate reasonably be expected to have a Material Adverse Effect.
Section 4.07 Environmental Matters. Any liabilities associated
with, and costs of compliance with, Environmental Laws could not reasonably be
expected to have a Material Adverse Effect with respect to the Issuer, the
Guarantor or the Material Subsidiaries.
Section 4.08 Taxes. Each of the Issuer and the Guarantor and the
Material Subsidiaries has filed all Brazilian income tax returns, and all other
material tax returns, which are required to have been filed by them on or prior
to each date this representation is made or deemed made and has paid all taxes,
assessments and fees due pursuant to such returns or pursuant to any assessment
received by it, except to the extent that any such tax, assessment or fee is
being contested in good faith by appropriate action or proceedings and for which
adequate reserves have been established. The charges, accruals and reserves on
the books of each of the Issuer and the Guarantor and the Material Subsidiaries
in respect of taxes or other governmental charges are, in the opinion of the
Issuer and the Guarantor, adequate.
Section 4.09 Full Disclosure. All written information furnished on
or before the Closing Date by or on behalf of the Issuer and the Guarantor to
the Agents or any Purchaser for purposes of or in connection with the
Transaction Documents (including in any event the Information Memorandum), taken
as a whole, does not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading, it being
understood for purposes of this Section 4.09 that projections as to future
events are not to be viewed as statements of fact.
24
Section 4.10 Information Memorandum. The projections set forth in
the Information Memorandum were based on assumptions believed by the management
of the Issuer and the Guarantor to be reasonable as of the date when prepared
and as of the date hereof, and as of each such date represented or represents
(as the case may be) the good faith estimate by management of the Issuer and the
Guarantor of the future performance of the Issuer and the Guarantor and the
Material Subsidiaries taken as a whole, it being understood for the purposes of
this Section 4.10 that projections as to future events are not to be viewed as
statements of fact and that the actual results during the period or periods
covered by the projections set forth in the Information Memorandum may differ
materially from the projected results. Without limitation of the foregoing,
since the respective dates as of which information is stated in the Information
Memorandum, no event has occurred and no condition has come into existence which
would have caused the projections therein to represent other than the good faith
estimate of management of the Issuer and the Guarantor of the future performance
of the Issuer and the Guarantor and the Material Subsidiaries, taken as a whole.
Section 4.11 Labor Matters. There are no strikes or other material
labor disputes, pending or, to the knowledge of the Issuer or the Guarantor,
threatened, against the Issuer or the Guarantor or any of the Material
Subsidiaries. Hours worked and payments made to the employees of the Issuer and
the Guarantor and the Material Subsidiaries have not been in material violation
of any applicable law dealing with such matters. All material payments
(individually or in the aggregate) due from the Issuer or the Guarantor or any
of the Material Subsidiaries, and payable on account of wages and employee
health and welfare insurance and other benefits have been paid or accrued as a
liability on their respective books.
Section 4.12 Contracts; Intellectual Property. The Issuer and the
Guarantor and each of the Material Subsidiaries (i) has all contracts,
agreements, rights, privileges and franchises (including the Supply Contracts,
interconnection agreements and software licenses) and (ii) owns or possesses or
holds under valid licenses all patents, trademarks, service marks, trade names,
copyrights, licenses, concessions and other intellectual property rights that
are necessary for the operation of their respective properties and businesses,
and none of the Issuer, the Guarantor or any of their respective Subsidiaries is
in violation of any provision thereof, except to the extent that any failure to
comply with clause (i) or (ii) above or any such violations, in the aggregate,
have not had and could not reasonably be expected to have a Material Adverse
Effect. Each of the Issuer and the Guarantor and the Material Subsidiaries
conducts its business without infringement or claim of infringement of any
material license, patent, trademark, trade name, service ▇▇▇▇, copyright, trade
secret or any other intellectual property right of others and there is no
infringement or claim of infringement by others of any material license, patent,
trademark, trade name, service ▇▇▇▇, copyright, trade secret or other
intellectual property right of the Issuer, the Guarantor or any of the Material
Subsidiaries, except to the extent that any such infringements or claims of
infringement, in the aggregate, have not had and could not reasonably be
expected to have a Material Adverse Effect.
Section 4.13 Solvency. As of the Closing Date and each Purchase
Date, after giving effect to the transactions contemplated by the Transaction
Documents to occur on the Closing Date and each Purchase Date: (i) the aggregate
fair market value of the assets of each of the Issuer and the Guarantor will
exceed its liabilities (including contingent, subordinated, unmatured and
unliquidated liabilities), (ii) each of the Issuer and the Guarantor will have
25
sufficient cash flow to enable it to pay its debts as they mature and (iii) each
of the Issuer and the Guarantor will not have unreasonably small capital for the
business in which it and its respective Subsidiaries are engaged.
Section 4.14 No Regulatory Restrictions on Borrowing. Neither the
Issuer nor the Guarantor is subject to any law or regulation limiting or
restricting its ability to execute, deliver and perform its obligations under
the terms of this Agreement and the other Financing Documents, in each case, in
accordance with the terms thereof, other than those set forth in Section 4.02
hereof.
Section 4.15 No Burdensome Restrictions. Taking into account the
full benefits reasonably expected to be derived thereby by the Issuer, the
Guarantor or the Material Subsidiaries, no contract, lease, agreement or other
instrument to which the Issuer or the Guarantor or any of the Material
Subsidiaries is a party or by which any of its property is bound or affected,
and no charge, corporate restriction, judgment, decree or order and no provision
of applicable law or governmental regulation, has had or is reasonably expected
to have a Material Adverse Effect.
Section 4.16 No Immunity. Each of Issuer and the Guarantor is
subject to civil and commercial law with respect to its obligations under the
Financing Documents, and the performance by the Issuer and the Guarantor
thereunder constitute private and commercial acts rather than public or
governmental acts. Neither the Issuer nor the Guarantor is entitled to any
sovereign or similar immunity from the jurisdiction of any court or from any
action, suit or proceeding, or from set-off or service of process in connection
therewith, and none of the properties, assets or revenues of Issuer and the
Guarantor is immune from attachment (before or after judgment) or execution,
except that the Concession and any of the assets of the Issuer or the Guarantor
that are essential to the provision of a public service (including the service
rendered by the Issuer or the Guarantor pursuant to the Concession) may be
immune from attachment (before or after judgment) or execution; provided,
however, that certain assets of the Guarantor that are necessary for the
rendering of public services under the Concession (bens reversiveis) may not be
subject to attachment.
Section 4.17 Valid Choice of Law and Submission to Jurisdiction.
The selection by each of the Issuer and the Guarantor of the laws of the State
of New York as the governing law of this Agreement, the Notes and any other
Financing Document purported to be governed by the laws of the State of New York
constitutes a valid and binding obligation of the Issuer and the Guarantor,
respectively, and does not violate the public policy of Brazil. The submission
by the Issuer and the Guarantor to the jurisdiction of the courts of the United
States and the State of New York pursuant to Section 10.08 and the appointment
by each the Issuer and the Guarantor of an agent for service of process pursuant
to Section 10.11(a) constitutes a valid and binding obligation of the Issuer and
the Guarantor, respectively, and does not violate the public policy of Brazil.
Section 4.18 Private Offering. None of the Issuer, the Guarantor
or any Person acting on its behalf (other than the Agents, the Arrangers or the
Purchasers with respect to which the Issuer and the Guarantor make no
representation or warranty) has offered the Notes or any similar obligations for
sale to, or solicited any offer to buy any of the same from, or otherwise
26
approached or negotiated in respect thereof with, any Person other than the
Agents, the Arrangers and the Purchasers. None of the Issuer, the Guarantor or
any Person acting on its behalf (other than the Agents, the Arrangers or the
Purchasers, with respect to which the Issuer and the Guarantor make no
representation or warranty) has taken, or will take, any action which would
subject the sale of the Notes to Section 5 of the Securities Act.
Section 4.19 Collateral. The Collateral Documents are effective to
create a valid first priority perfected security interest in the Collateral in
favor of the Secured Parties subject to the fulfillment of certain conditions
contained therein.
Section 4.20 Ranking. This Agreement, the Notes and the other
Financing Documents to which the Issuer or the Guarantor is a party and the
obligations evidenced hereby and thereby are and will at all times be direct and
unconditional general obligations of the Issuer and the Guarantor, respectively,
and rank and will at all times rank in right of payment and otherwise at least
pari passu with the most senior (and, in the case of the Guarantor, unsecured)
Debt of the Issuer and the Guarantor, if any, whether now existing or hereafter
outstanding.
Section 4.21 Investment Company. Neither the Issuer, the Guarantor
nor any Material Subsidiary is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
Section 4.22 Material Subsidiaries. Schedule 8 sets forth a
complete and accurate list of the Material Subsidiaries as of the Closing Date.
ARTICLE 5
COVENANTS
Each of the Issuer and the Guarantor agrees that, so long as any Note
remains outstanding or any amount payable under any Note (or any other amount
payable under the Financing Documents) remains unpaid:
Section 5.01 Information. The Issuer and the Guarantor will
furnish to the Administrative Agent for distribution to each Purchaser:
(a) as soon as available and in any event within 120 days after
the end of each Fiscal Year, an audited consolidated and consolidating (to the
extent applicable) balance sheet of the Issuer and the Guarantor as of the end
of such Fiscal Year and the related consolidated and consolidating statements of
income and cash flows for such Fiscal Year (in each case in compliance with
GAAP), setting forth in each case in comparative form the figures for the
previous Fiscal Year, all reported on without material qualification by
PricewaterhouseCoopers Auditores Independentes or other independent public
accountants of internationally recognized standing;
(b) as soon as available and in any event within 60 days after the
end of each Fiscal Quarter of each Fiscal Year, a consolidated and consolidating
(to the extent applicable) balance sheet of the Issuer and the Guarantor as of
the end of such Fiscal Quarter and the related consolidated and consolidating
statements of income and cash flows for such Fiscal Quarter and
27
for the portion of the Fiscal Year ended at the end of such Fiscal Quarter,
setting forth in each case in comparative form the figures for the corresponding
Fiscal Quarter and the corresponding portion of the previous Fiscal Year, all
certified (subject to the absence of footnotes and normal year-end adjustments)
as to fairness of presentation and consistency with GAAP by the Guarantor's
chief financial officer or chief accounting officer;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a Responsible Officers'
Certificate (i) setting forth in reasonable detail the calculations required to
establish whether the Issuer and the Guarantor were in compliance with the
requirements of Sections 5.11 and 5.12 on the date of such financial statements,
(ii) with respect to clause (a) above only, identifying the Material
Subsidiaries as of such date (and specifying the percentage of Total
Consolidated Assets and Consolidated Revenues represented by such Material
Subsidiaries (calculated in accordance with the definition of "Material
Subsidiary")), and (iii) stating whether any Default exists on the date of such
certificate and, if any Default then exists, setting forth the details thereof
and the action which the Issuer and the Guarantor are taking or propose to take
with respect thereto;
(d) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a statement of the firm of
independent public accountants which reported on such statements (i) stating
whether anything has come to their attention to cause them to believe that any
Default existed on the date of such statements and (ii) confirming the
calculations set forth in the Responsible Officers' Certificate delivered
simultaneously therewith pursuant to clause (c) above;
(e) within five Business Days after any Responsible Officer
obtains knowledge of any Default, a Responsible Officers' Certificate setting
forth the details thereof and the action which the Issuer and the Guarantor have
taken, are taking or propose to take with respect thereto;
(f) as soon as reasonably practicable after any Responsible
Officer obtains knowledge thereof, notice of any event or condition which has
had or could reasonably be expected to have a Material Adverse Effect and the
nature of such Material Adverse Effect;
(g) as soon as reasonably practicable after any Responsible
Officer obtains knowledge of (i) the commencement of, or of a written threat by
a Governmental Authority of the commencement of, an action, suit or proceeding
against the Issuer, the Guarantor or any of the Material Subsidiaries before any
court or arbitrator or any governmental body, agency or official which, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect or which questions the validity or enforceability of any Transaction
Document or (ii) the commencement of, or of a written threat by a Governmental
Authority of the commencement of, any action that could reasonably be expected
to lead to an Expropriation Event, a Responsible Officers' Certificate setting
forth the nature of such pending or threatened action, suit or proceeding and
such additional information with respect thereto as may be reasonably requested
by any Purchaser;
(h) promptly after (i) the filing thereof, copies of all
registration statements and other substantive reports filed by the Issuer, the
Guarantor or any Material Subsidiary with any securities exchange or securities
regulatory body; provided that, notwithstanding Section 10.14,
28
any financial information so filed in Portuguese may, if the substance of such
information has theretofore been furnished in English to the Purchasers pursuant
to this Section 5.01, be furnished in Portuguese, along with an English summary
of such information and (ii) the provision thereof to any shareholder thereof,
all public information regarding the Issuer, the Guarantor and any Material
Subsidiaries;
(i) promptly after receipt or delivery thereof, copies of any
material communications with ANATEL or any other regulatory body with respect to
the Concessions to the extent the subject of such communications could
reasonably be expected to lead to a Material Adverse Effect; and
(j) from time to time such additional information regarding the
financial position or business of the Issuer, the Guarantor and the Material
Subsidiaries as the Administrative Agent, at the request of any Purchaser, may
reasonably request.
Section 5.02 Payment of Obligations. Each of the Issuer and the
Guarantor will pay and discharge, and will cause each of the Material
Subsidiaries to pay and discharge, at or before maturity, all their respective
material obligations and liabilities (including pension liabilities, tax
liabilities and claims of materialmen, warehousemen and the like which if unpaid
might by law give rise to a Lien), except where the same are contested in good
faith by appropriate action or proceedings, and will maintain, and will cause
each Material Subsidiary to maintain, in accordance with GAAP appropriate
reserves for the accrual thereof.
Section 5.03 Maintenance of Property; Insurance. (a) The Issuer
and the Guarantor will keep, and will cause each of the Materials Subsidiaries
to keep, all of its property that is useful and necessary in its business in
good working order and condition, ordinary wear and tear excepted.
(b) The Issuer and the Guarantor will maintain, and will cause
each of the Material Subsidiaries to maintain (in the name of the Issuer, the
Guarantor or such Subsidiary), with internationally recognized, financially
sound and responsible insurance companies, insurance on their respective
properties and assets in at least such amounts, against at least such risks and
with such risk retention as are generally maintained, insured against or
retained, as the case may be, by other companies of established repute engaged
in the same or a similar business (but including in any event public liability
insurance) and will furnish to the Purchasers, upon request from the
Administrative Agent, information presented in reasonable detail as to the
insurance so carried.
(c) The Issuer and the Guarantor shall maintain, and cause each of
the Material Subsidiaries to maintain (in the name of the Issuer or such
Subsidiary), in full force and effect all Brazilian regulatory approvals
required for all insurance coverage required by Section 5.03(b) and ensure at
all times that the Brazilian Collateral Agent is named as the loss payee on all
such insurance policies related to the Equipment, other than liability policies
related to the Equipment payable directly to third party payees, maintained
pursuant to Section 5.03(b).
Section 5.04 Conduct of Business and Maintenance of Existence. The
Issuer and the Guarantor will continue, and will cause each of the Material
Subsidiaries to continue, to engage
29
in wireless and fixed-line telecommunications services and other businesses
reasonably incidental thereto and will preserve, renew and keep in full force
and effect and will cause each such Material Subsidiary to preserve, renew and
keep in full force and effect its respective corporate existence and its
respective rights, concessions, privileges and franchises and all other
governmental and third party approvals and licenses necessary or desirable in
the normal conduct of business (including the Concessions), except to the extent
permitted by Section 5.07 or that failure to so preserve, renew and keep in full
force and effect such rights (other than with respect to the Concessions, as to
which such obligations to so preserve, renew and keep in full force and effect
shall be absolute) could not singly or in the aggregate reasonably be expected
to have a Material Adverse Effect;
Section 5.05 Compliance with Laws. The Issuer and the Guarantor
will comply, and will cause each of its Subsidiaries to comply, in all material
respects with all applicable laws, ordinances, rules, regulations and
requirements of Governmental Authorities (including the Concessions, the
Concession Agreements and laws governing the Concessions and Environmental Laws
and the rules and regulations thereunder), except (i) where the necessity of
compliance therewith is being contested in good faith by appropriate action or
proceedings or (ii) to the extent that failure to so comply could not in the
aggregate reasonably be expected to have a Material Adverse Effect.
Section 5.06 Inspection of Property, Books and Records. Each of
the Issuer and the Guarantor will keep, and will cause each of the Material
Subsidiaries to keep, proper books of record and account in which full and
correct entries shall be made of all dealings and transactions in relation to
their respective business and activities; and, during the continuation of an
Event of Default, will permit, and will cause each of its Subsidiaries to
permit, representatives of any Agent, Purchaser or provider of any Required
Political Risk Policy to visit and inspect, upon reasonable notice and during
normal business hours (in any case subject to the provisions of Section 10.15,
as though information received or obtained during such visit were "delivered" to
such Person as provided in such Section), any of their respective properties, to
examine and make abstracts from any of their respective books and records and to
discuss their respective affairs, finances and accounts with their respective
officers, employees and independent public accountants, all at such reasonable
times and as often as may reasonably be requested.
Section 5.07 Mergers and Sales of Assets. (a) Each of the Issuer
and the Guarantor will not, and will not permit any Material Subsidiary to,
consolidate or merge with or into, or convey, transfer or lease all or
substantially all of its assets to, any other Person, provided that the Issuer,
the Guarantor or any Material Subsidiary may merge or consolidate with another
Person or so convey, transfer or lease its assets to another Person if, prior to
or simultaneously with such merger, consolidation, conveyance, transfer or
lease, (i) the Required Interest Holders shall have consented to such
transaction in writing or (ii) (A) the Guarantor shall have provided to the
Administrative Agent the documentation evidencing such transaction and a
Responsible Officers' Certificate certifying that immediately before and after
giving effect to such transaction, the Consolidated Debt to EBITDA Ratio of the
Guarantor and its Consolidated Subsidiaries does not exceed 3.5 to 1, (B)
immediately before and after giving effect to such transaction, no Default shall
exist and be continuing and (C) in the case of any such transaction involving
the Issuer or the Guarantor, the Person surviving such merger or consolidation
or the Person to which such assets have been so conveyed, transferred or leased
(which in each case
30
shall be engaged principally in the telecommunications business in Brazil) shall
explicitly assume in writing all of the obligations of the Issuer or the
Guarantor, respectively, under the Transaction Documents and shall provide to
the Administrative Agent an opinion or opinions of Brazilian, New York and other
relevant independent counsel that such assumption is a legal, valid and binding
obligation of such Person. Nothing shall be construed so as to prohibit the
merger of any Subsidiary specified in Schedule 6 into and with Telecomunicacoes
do Rio de Janeiro S.A.
(b) Each of the Issuer and the Guarantor will not, and will not
permit any Material Subsidiary to, make any Asset Sale, unless (i) the
consideration therefor is not less than the fair market value of the related
asset, (ii) until at least 75% of the purchase price therefor has been paid in
cash or cash equivalents, the obligation to pay such purchase price shall be
secured by a first lien on the assets sold, (iii) if such asset constituted
Collateral hereunder, such Lien on such asset and the proceeds resulting from
the enforcement by the Issuer of such Lien shall be assigned to the Brazilian
Collateral Agent and shall constitute Collateral hereunder, (iv) the Net Cash
Proceeds thereof (whether received at the closing of such Asset Sale or pursuant
to cash payments made at a subsequent date) are applied in accordance with
Section 2.04, (v) prior to or simultaneously with the consummation of such Asset
Sale, the Guarantor shall have provided to the Administrative Agent the
documentation evidencing such Asset Sale and a Responsible Officers' Certificate
certifying compliance (as of the date of, and taking into account the effects
of, such Asset Sale) with Sections 5.11 and 5.12 and (vi) immediately before and
after giving effect to such transaction, no Default shall exist and be
continuing.
Section 5.08 Use of Proceeds. (a) The proceeds of the Notes will
be used by the Issuer in the manner set forth in Section 2.01(b). None of such
proceeds will be used, directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of buying or carrying any "margin stock"
within the meaning of Regulations T, U or X, or otherwise in violation of
Regulations T, U or X.
(b) It is the policy of the Board of Governors of the Federal
Reserve System of the United States that extensions of credit by international
banking facilities may be used only to finance operations of the Issuer or
Issuer's affiliates outside of the United States. By executing this Agreement,
the Issuer acknowledges such policy and hereby agrees that Purchases hereunder
may be used only to finance its operations in Brazil, in accordance with the
terms of this Agreement.
Section 5.09 Negative Pledge. The Issuer and the Guarantor will
not, and will not permit any Material Subsidiary to, directly or indirectly,
create, assume or suffer to exist any Lien on any asset now owned or hereafter
acquired by it, except for the following (collectively, "PERMITTED LIENS"):
(a) Liens on assets of the Guarantor, the Issuer or the Material
Subsidiaries existing on the Closing Date;
(b) (i) Liens on assets of the Issuer created pursuant to Section
5.18 and (ii) Liens on assets of the Issuer created by the Collateral Documents;
31
(c) any Lien existing on any asset of any Person at the time such
Person becomes a Subsidiary or is merged or consolidated with or into the
Issuer, the Guarantor or a Material Subsidiary and not created in contemplation
of such event;
(d) any Lien on any asset of the Guarantor or a Material
Subsidiary consisting of an operating lease entered into in the ordinary course
of business so long as such assets are on-leased in the ordinary course of
business to a customer of the Guarantor or such Material Subsidiary;
(e) any Lien on any asset of the Material Subsidiaries securing
Debt currently or hereafter owed to BNDES and permitted under Section 5.10(b),
including any such Debt that may be included in clause (a) above (but not
including additional Debt incurred pursuant to the last paragraph of Section
5.10);
(f) any Lien on any asset of the Issuer (other than the
Collateral) securing Debt owed to BNDES, provided that the Issuer applies the
proceeds of such Debt to a Prepayment in accordance with Section 2.04;
(g) Liens on any asset of the Guarantor, the Issuer or any
Material Subsidiary created solely for the purpose of securing the payment of
all or part of the purchase price of such asset acquired or constructed in the
ordinary course of business, provided, however, that (i) the aggregate principal
amount of Debt secured by such Liens shall not exceed the lesser of the cost and
fair market value of the property or assets so acquired or constructed, (ii) the
Debt secured by such Liens shall have otherwise been permitted to be issued
under Section 5.10 with respect to the Issuer or the Material Subsidiaries or
Sections 5.11 or 5.12 with respect to the Guarantor, and (iii) such Liens shall
not encumber any other property or assets of the Issuer, the Guarantor or any
Material Subsidiary and shall attach to such property or assets within 90 days
of the construction or acquisition of such assets or property;
(h) Liens on any asset of the Issuer securing Debt permitted to be
incurred in connection with a refinancing under Section 5.10(c) or a Vendor
Financing under Section 5.10(f);
(i) any Lien otherwise permitted hereunder arising out of the
refinancing, extension, renewal or refunding of any Debt secured by any Lien
permitted by any of the foregoing clauses of this Section, provided that the
principal amount of such Debt is not increased and such Debt is not secured by
any assets of a different type or having a substantially higher fair market
value;
(j) Liens for taxes not yet delinquent or due or which are being
contested in good faith by appropriate action or proceedings, provided that
adequate reserves with respect thereto are maintained on the books of the
Issuer, the Guarantor or their respective Subsidiaries, as the case may be;
(k) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other statutory Liens (other than Liens arising or incurred with
respect to litigation and judgments) arising in the ordinary course of business
which do not secure Debt;
32
(l) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case materially
interfere with the ordinary conduct of the business of the Issuer, the Guarantor
and their respective Subsidiaries, taken as a whole;
(m) Liens incurred in the ordinary course of business in
connection with workers compensation claims, unemployment insurance and social
security benefits and Liens securing the performance of bids, tenders, leases
and contracts in the ordinary course of business, statutory obligations, surety
bonds, performance bonds and other obligations of a like nature incurred in the
ordinary course of business (exclusive of obligations in respect of the payment
for borrowed money);
(n) Liens arising out of judgments against the Issuer, the
Guarantor or any Material Subsidiary to the extent such judgments do not result
in an Event of Default under Section 6.01(h); and
(o) Liens on any assets of the Guarantor or any Material
Subsidiary not otherwise permitted by the foregoing clauses of this Section 5.09
securing Debt or other obligations with an aggregate principal or face amount at
any time outstanding not in excess of 4.0% of the Total Consolidated Assets of
the Guarantor, including refinancings thereof subject to the same limitation.
Notwithstanding the foregoing provisions of this Section 5.09, the
Issuer and the Guarantor shall not permit, create, assume or suffer to exist any
Lien on (x) the capital stock of the Issuer or the Concessions or (y) the
capital stock of any Material Subsidiary or of any Subsidiary of the Guarantor
that is a direct or indirect parent of such Material Subsidiary.
Section 5.10 Limitation on Debt. The Issuer will not, and the
Guarantor will not permit any of the Material Subsidiaries to, incur or at any
time be liable with respect to any Debt except any of the following (as
determined on a consolidated basis):
(a) Debt under this Agreement;
(b) Debt owed to BNDES by the Material Subsidiaries, in an
aggregate principal amount not to exceed R$5,000,000,000 at any one time
outstanding and on terms not materially different than those relating to Debt
owed by the Material Subsidiaries to BNDES as of the Closing Date;
(c) Debt incurred by the Issuer the net proceeds of which are used
solely to refinance all or any portion of the Tranche D Notes purchased pursuant
to a Tranche D Commitment and to pay related fees and expenses with respect
thereto; provided that (i) the aggregate principal amount of such Debt shall not
exceed (and shall be used solely to pay) (x) the aggregate principal amount
outstanding of the Tranche D Notes so refinanced, as the case may be, together
with accrued and unpaid interest thereon and all other amounts owing with
respect thereto plus (y) reasonable costs and expenses incurred by the Issuer in
connection with the issuance of such Debt, (ii) the proceeds (net of any amounts
described in clause (i)(y) above in respect of such Debt) of such Debt are
applied to prepay the applicable Tranche D Notes so refinanced in the manner
specified in Section 2.04(a), (iii) if such Debt is Secured Debt, the purchasers
or lenders
33
of such Secured Debt shall have entered into collateral and collateral sharing
arrangements and one or more intercreditor agreements reasonably consented to by
the Required Interest Holders (provided that so long as any such agreement
contains customary terms and conditions, such consent of the Required Interest
Holders shall not be unreasonably withheld), (iv) the average weighted maturity
of such Debt shall be at least six years from the Closing Date, (v) the "all-in"
cost to the Issuer of such Debt shall not exceed that of the Tranche D Notes so
refinanced, (vi) not more than $242,500,000 of the aggregate principal amount of
all Tranche D Notes so refinanced may have scheduled payments on or prior to the
Principal Payment Date occurring in August 2006 (with each Tranche D Lender
having the right to so refinance a ratable amount of the aggregate of its
undrawn Tranche D Commitment or its Purchases in respect of Tranche D Notes as
follows: $142,155,173 for the Nokia Lenders, $53,517,241 for the Siemens Lenders
and $46,827,586 for the Alcatel Lenders) and (vii) simultaneously with the
incurrence of such Debt, both (A) the Issuer shall have provided to the
Administrative Agent the documentation evidencing such Debt and a Responsible
Officers' Certificate certifying compliance and projected compliance (on a pro
forma basis) with Sections 5.11 and 5.12 and (B) immediately before and after
giving effect to the incurrence of such Debt, no Default shall exist and be
continuing;
(d) intercompany Debt (i) of the Issuer owed to the Guarantor or
to a Majority-Owned Subsidiary thereof, (ii) of a Wholly-Owned Subsidiary of the
Issuer owed to the Issuer or another Wholly-Owned Subsidiary of the Issuer or
(iii) of a Material Subsidiary owed to the Guarantor or a Majority-Owned
Subsidiary thereof, provided that any such Debt owed by the Issuer (except Debt
owed to the Guarantor) or the Guarantor shall be subordinated in right of
payment to prior satisfaction in full of the obligations of the Issuer and the
Guarantor to the Purchasers hereunder on substantially the terms set forth in
Schedule 7 hereto and the Issuer and the Guarantor shall enforce such
subordination terms;
(e) Debt of the Material Subsidiaries not otherwise permitted by
this Section 5.10 in an aggregate principal amount at any time outstanding not
to exceed $200,000,000; provided that no such Debt may be owed to BNDES;
(f) Debt incurred by the Issuer pursuant to a Vendor Financing,
provided that such Vendor Financing must comply with the provisions of Sections
5.18(d) and 5.19(d);
(g) Debt of the Issuer up to an aggregate principal amount of
$10,000,000 at any time outstanding incurred for the purpose of financing the
payment of all or part of the purchase price of property or assets acquired or
constructed; provided that the aggregate principal amount of such Debt shall not
exceed the lesser of the cost and fair market value of the property or assets so
assigned or constructed;
(h) Debt owed to BNDES by the Issuer, provided that the Issuer
applies the proceeds of such Debt to a Prepayment in accordance with Section
2.04;
(i) any Guaranties of the obligations of the Issuer under this
Agreement provided by the Material Subsidiaries of the Guarantor under the last
paragraph of this Section 5.10; or
34
(j) Debt of the Issuer or a Material Subsidiary which is issued to
refund or refinance any Debt outstanding or permitted to be incurred under this
Section 5.10 (other than Debt described in Section 5.10(c)), provided that the
principal amount of the Debt so issued shall not exceed the principal amount of
the Debt so refinanced and the Debt so issued shall have an average weighted
maturity equal to or greater than the average weighted maturity of the Debt so
refinanced.
Notwithstanding the foregoing provisions of this Section 5.10, but
subject to all other terms and conditions of this Agreement, the Material
Subsidiaries may incur aggregate Debt in excess of the amounts otherwise
permitted to be incurred by the Material Subsidiaries hereunder, provided that
all Material Subsidiaries from time to time shall have first delivered to the
Administrative Agent and thereafter shall maintain in effect an executed joint
and several Guaranty of the obligations of the Issuer under the Financing
Documents containing provisions substantially similar to those of Article 9
hereof, each such delivery to be accompanied by: (i) the relevant prior
authorization in respect of such Guaranty from the Central Bank, (ii) customary
opinions of independent U.S. and Brazilian counsel regarding the enforceability
of such Guaranty and (iii) such other documents or instruments as the
Administrative Agent may reasonably request establishing the validity and
enforceability of the Guaranty; provided, further, that upon each designation of
Material Subsidiaries in accordance with the definition thereof, any Subsidiary
added to such designation promptly shall execute and deliver the foregoing
Guaranty, and upon such delivery, any Subsidiary that has been removed from such
designation shall be released from its obligation under its Guaranty previously
delivered under this paragraph.
Section 5.11 Consolidated Debt to Annualized EBITDA; Subordination
of Debt Owed to Subsidiaries. (a) As of the last day of any Fiscal Quarter, the
Consolidated Debt to EBITDA Ratio of the Guarantor and its Consolidated
Subsidiaries will not be greater than the 4.0 to 1.
(b) The Guarantor shall not be permitted to incur Debt owing to
any Subsidiary unless such Debt shall be subordinated in right of payment to the
obligations of the Guarantor to the Purchasers hereunder on substantially the
terms set forth in Schedule 7 hereto.
Section 5.12 Consolidated EBITDA to Consolidated Interest Expense.
As of the last day of any Fiscal Quarter, the Consolidated EBITDA to
Consolidated Interest Expense Ratio of the Guarantor and its Consolidated
Subsidiaries will not be less than 1.75 to 1.
Section 5.13 Restricted Payments. None of the Issuer, the
Guarantor or any Material Subsidiary will declare or make any Restricted Payment
unless (i) simultaneously with the consummation of such Restricted Payment, the
Guarantor shall have provided to the Administrative Agent the documentation
evidencing such Restricted Payment and a Responsible Officer's Certificate
certifying compliance (as of the date of such Restricted Payment) with Sections
5.11 and 5.12 (taking into account the amount of Debt existing on the date of
such Restricted Payment) and (ii) immediately before and after giving effect to
such Restricted Payment, no Default shall exist and be continuing.
Notwithstanding the foregoing, no Restricted Payments on Debt subordinated to
the loans hereunder shall be made in contravention of the relevant subordination
terms set forth in Schedule 7 hereof.
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Section 5.14 Investments. The Issuer and the Guarantor will not,
and will not permit any of the Material Subsidiaries to, make or acquire on or
after the Effective Date any Investment in any Person other than (and provided
that immediately before such Investment is made and immediately after giving
effect thereto, no Default shall exist and be continuing):
(a) Investments comprising intercompany Debt permitted pursuant to
Section 5.10(d);
(b) Temporary Cash Investments;
(c) Trade or Commercial Finance Notes made payable to the Issuer,
the Guarantor or such Material Subsidiary;
(d) Debt obligations constituting all or part of the consideration
received for assets sold in accordance with Section 5.07(b);
(e) Investments in Wholly-Owned Subsidiaries; and
(f) other Investments to the extent that immediately before and
after giving effect to such Investment, (i) the Consolidated Debt to EBITDA
Ratio of the Guarantor and its Consolidated Subsidiaries does not exceed 3.5 to
1, and the Guarantor shall have provided to the Administrative Agent a
Responsible Officer's Certificate certifying as to such Ratio and (ii) no
Default shall exist and be continuing.
Section 5.15 Transactions with Affiliates. Except as set forth on
Schedule 2 hereof, each of the Issuer and the Guarantor will not, and will not
permit any Material Subsidiary to, directly or indirectly, (i) pay any funds to
or for the account of any Affiliate, (ii) make any Investment in any Affiliate
(whether by acquisition of stock or indebtedness, by loan, advance, transfer of
property, guarantee or other agreement to pay, purchase or service, directly or
indirectly, any Debt, or otherwise), (iii) lease, sell, transfer or otherwise
dispose of any assets, tangible or intangible, to or from any Affiliate, or (iv)
participate in, or effect, any transaction with any Affiliate, except in the
case of clauses (i) through (iv) above on an arms-length basis on terms at least
as favorable to the Issuer, Guarantor or such Material Subsidiary as could have
been obtained from a third party that was not an Affiliate; provided further,
that the foregoing provisions of this Section shall not prohibit any such Person
from declaring or paying any lawful dividend or other payment ratably in respect
of all its capital stock of the relevant class so long as, after giving effect
thereto, no Default shall have occurred and be continuing. The Issuer and the
Guarantor shall furnish to the Administrative Agent a Responsible Officers'
Certificate with respect to any transaction described in items (ii) or (iii)
above with a fair market value in excess of $30,000,000, no later than three
Business Days prior to effecting the transaction, certifying that such
transaction was conducted on an arm's-length basis on terms that could have been
obtained from a third party and describing in reasonable detail such
transaction.
Section 5.16 No Modification of Certain Documents. Without the
prior written consent of the Required Interest Holders, each of the Issuer and
the Guarantor will not, and will not permit any Material Subsidiary to, amend,
consent to or solicit any amendment or supplement to, or any waiver or other
modification of (i) its Estatuto Social, Contrato Social or other constitutive
documents, (ii) any Transaction Document or any of the ancillary agreements
36
referred to therein or (iii) any governmental license, authorization, consent or
approval necessary or desirable for the operation of its business if any such
amendment, supplement, waiver, or modification could have a Material Adverse
Effect or otherwise materially and adversely affect the rights or remedies of
the Purchasers under this Agreement, the Notes or the other Financing Documents
or their ability to enforce the same.
Section 5.17 Limitation on Restrictions Affecting Subsidiaries.
The Issuer and the Guarantor will not, and will not permit any Subsidiary of the
Issuer or the Guarantor, respectively, to enter into, or suffer to exist, any
agreement with any Person, other than this Agreement, which prohibits or limits
in any material respect the ability of any such Subsidiary to pay dividends or
make other distributions or pay any Debt owed to either the Issuer or the
Guarantor or any Subsidiary thereof or make loans or advances to either the
Issuer or the Guarantor or any Subsidiary thereof.
Section 5.18 Security Interest in Collateral; Other Vendor
Financings.
(a) In order to further secure the full and punctual payment of
the obligations of the Issuer and the Guarantor under the Notes and the
Guaranty, respectively, the Issuer will pledge and grant to the Secured Parties
a continuing first priority security interest in and to the Collateral. In
furtherance of the foregoing, the Issuer agrees to execute a Mortgage Deed in
respect of any real property acquired by the Issuer, as soon as practicable
after the acquisition thereof but in no event later than 60 days after the
acquisition thereof.
(b) The Issuer and the Guarantor will, at their sole cost and
expense, do, execute, acknowledge and deliver all acts, deeds, conveyances and
other instruments as any Agent shall from time to time reasonably request with
respect to the granting and continuation of a security interest in and to the
Collateral.
(c) Without limitation of Permitted Liens under Section 5.09 that
do not secure Debt, and except for the Liens described in clause (d) below, the
Issuer and the Guarantor will not, and will not permit any of their respective
Subsidiaries to, create, assume or suffer to exist any Lien on the Collateral at
any time, except for any Lien continued or created pursuant to the Collateral
Documents.
(d) In order to further secure the full and punctual payment of
the obligations under the Notes, the Issuer agrees that it will not become a
party to any secured Vendor Financing the terms of which do not grant to the
Secured Parties a pro rata Lien on any property or assets securing such Vendor
Financing, such pro rata Lien to be evidenced by an intercreditor agreement
executed by the Required Interest Holders, provided, however, that, if required
pursuant to the terms of such Vendor Financing, the Issuer may grant to the
creditors of such Vendor Financing a pro rata Lien on the Collateral, such pro
rata Lien to be evidenced by an intercreditor agreement approved by the Required
Interest Holders.
Section 5.19 Further Assurances. (a) The Issuer and the Guarantor
will, at their sole cost and expense, do, execute, acknowledge and deliver all
such further acts, deeds, conveyances, mortgages, assignments, notices of
assignment and transfers as the Administrative Agent, the U.S. Collateral Agent
or the Brazilian Collateral Agent shall from time to time
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reasonably request, which may be necessary in the reasonable judgment of such
Agent from time to time to implement and give full effect to the Financing
Documents and to assure, perfect, convey, assign and transfer to the Secured
Parties the property and rights conveyed or assigned pursuant to the Collateral
Documents.
(b) All reasonable costs and expenses in connection with the grant
or continuation of any security interests under the Collateral Documents,
including reasonable legal fees and other reasonable costs and expenses in
connection with the grant, registration, perfection, maintenance or continuation
of any security interests under the Collateral Documents or the preparation,
execution, delivery, recordation or filing of documents and any other acts of
any of the Administrative Agent or the Brazilian Collateral Agent may reasonably
request in connection with the grant, registration, perfection, maintenance or
continuation of such security interests, shall be paid by the Issuer and the
Guarantor promptly upon demand.
(c) Each of the Issuer and the Guarantor will not, and will not
permit any Material Subsidiary to, enter into or become subject to any agreement
which would impair their ability to comply, or which would purport to prohibit
them from complying, with the provisions of this Section or Section 5.18.
(d) The Issuer will not, and will not permit its respective
Subsidiaries to, become a party to any Vendor Financing or other financing of
equipment or services the terms of which (i) permit or require the Issuer or
such Subsidiary to make prepayments thereunder (other than prepayments
consisting of the proceeds of a subsequent Vendor Financing incurred solely for
the purpose of prepaying such earlier Vendor Financing) in a manner other than
pro rata (based on principal amount committed) with other existing Vendor
Financings (including the Facility) or (ii) are materially more favorable to the
creditors thereunder (in terms of pricing, tenors, fees, structure, collateral
or guarantees) than those offered to the Purchasers under the Facility.
(e) The Issuer and the Guarantor will, and will cause each of
their respective Subsidiaries to, take all actions necessary so that the Debt
incurred under the Facility shall, at any time such Debt is outstanding, rank
pari passu in right of payment with all other existing and future secured and
unsubordinated Debt of the Issuer and, with respect to the Parent Guaranty, all
other existing and future unsecured and unsubordinated Debt of the Guarantor.
Section 5.20 Expropriation Proceeds. Each of the Issuer and the
Guarantor shall cause (and shall cause each of its Affiliates to cause) all Net
Cash Proceeds of any Expropriation Event to be delivered to the Brazilian
Collateral Agent as representative of the Secured Parties (or, if received
outside Brazil, to the U.S. Collateral Agent). If any of the Issuer and the
Guarantor or any Affiliate thereof receives any such proceeds, it shall hold
such amounts in trust for and on behalf of the Secured Parties, segregated from
its other funds, and shall immediately deliver such amounts in the exact form
received (duly endorsed, if appropriate, in a manner satisfactory to the
Brazilian Collateral Agent (or, if received outside Brazil, to the U.S.
Collateral Agent)) to the Brazilian Collateral Agent (or, if received outside
Brazil, to the U.S. Collateral Agent) for application in accordance with the
Financing Documents. The Issuer and the Guarantor shall not, and shall not
permit any of their respective Affiliates to, agree to any settlement or
compensation with respect to any Expropriation Event involving proceeds equal to
or exceeding $10,000,000 without the prior written consent of the Administrative
Agent. Any insurance
38
proceeds received by any Agent in respect of any such Expropriation Event under
the Required Political Risk Policy will be distributed to the Purchasers
entitled thereto under the Financing Documents and the Net Cash Proceeds of such
Expropriation Event payable to such Purchasers shall be reduced commensurately.
Section 5.21 Derivatives Obligations. The Issuer and the Guarantor
will not, and will not permit any of their respective Subsidiaries to, incur or
at any time be liable with respect to any Derivatives Obligations other than
Derivatives Obligations entered into for bona fide hedging purposes (and not for
speculative purposes) to protect the Issuer, the Guarantor and their respective
Subsidiaries against interest rate or foreign currency risk.
Section 5.22 Registrations. The Issuer shall maintain in full
force and effect all Central Bank and other regulatory approvals and
authorizations in respect of the Notes and the other Financing Documents and
shall seek and obtain all further approvals and authorizations that are
necessary to maintain the effect of such approvals and authorizations on terms
and conditions no less favorable to the Purchasers than those in effect on the
Closing Date.
Section 5.23 Portuguese Translation. The Issuer and the Guarantor
will cause an accurate and complete translation of this Agreement in Portuguese
to be registered in the Brazilian Public Registry of Deeds and Records with
jurisdiction over the Issuer and the Guarantor (or any successor registry
thereto), at their own expense, and shall provide a copy of such translation and
evidence of such registration to the Administrative Agent not later than 60 days
after the Closing Date.
Section 5.24 Additional Purchases. With respect to each Note
issued hereunder, the Issuer and the Guarantor shall register the financial
terms and conditions of such Note with the Central Bank under the applicable ROF
permitting the Issuer to issue such Note under the terms hereof, and shall
furnish evidence of such registration to the Administrative Agent. Promptly upon
the first Purchase and any additional Purchase, the Issuer shall, to the extent
necessary, (i) register with the Central Bank the relevant payment schedule
relating to such Purchase under the applicable ROF permitting remittance of
Dollars from Brazil for payment on each due date of principal, interest, fees,
commissions, expenses and other amounts payable by the Issuer or the Guarantor
under the Financing Documents in respect of such Purchase, (ii) take any other
action necessary to ensure that any payments due in respect of such Purchase can
be remitted from Brazil in Dollars, and (iii) provide a copy of such
applications, proof of filing or other evidence or action taken to the
Administrative Agent, not later than 30 days after the relevant Purchase Date.
Promptly upon receipt, the Issuer will furnish a copy of all such certificates
and evidences to the Administrative Agent.
Section 5.25 Political Risk Insurance. The Issuer shall observe
and comply with all the terms and provisions of each Required Political Risk
Policy to be observed or performed by it.
Section 5.26 Supply Contracts. The Issuer shall, in each Notice of
Purchase or Notice of Disbursement, request Purchases or disbursements,
respectively, for all Contract Amounts due as of the dates of such Notices in
accordance with the respective Supply Contracts.
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Section 5.27 Cross-Default Provisions in Comparable Financings.
The Guarantor and the Issuer agree that, in the event that either of them or any
of the Material Subsidiaries enters into a future financing arrangement with one
or more banking institutions and such financing arrangement (1) provides for an
event of default upon a cross-default under other Material Financial Obligations
of the ISSUER, the Guarantor AND THE MATERIAL SUBSIDIARIES, and (2) such
financing arrangement also contains a tenor in excess of two (2) years, then the
Guarantor and the Issuer will amend Section 6.01(e) hereof to provide that an
Event of Default shall occur upon a default under any Material Financial
Obligation.
ARTICLE 6
DEFAULTS
Section 6.01 Events of Default. If one or more of the following
events ("EVENTS OF DEFAULT") shall occur:
(a) the Issuer, the Guarantor or any Material Subsidiary shall
fail to pay (i) any principal payable by it under the Financing Documents when
due, (ii) any interest or fees payable by it under the Financing Documents
within 3 (three) Business Days after the date when due, (iii) any amount payable
under Article 9 when due (giving effect to any grace period applicable under
this Section 6.01(a) to the Issuer's underlying payment obligation) or (iv) any
other amount payable by it under the Financing Documents within ten (10)
Business Days after the date when due;
(b) the Issuer, the Guarantor or any Material Subsidiary shall
fail to observe or perform any covenant or agreement contained in Sections
5.01(e) or (f), 5.04, 5.07, 5.08, 5.09, 5.10, 5.11, 5.12, 5.13, 5.14, 5.15,
5.16, 5.19, 5.20, and 5.25;
(c) the Issuer, the Guarantor or any Material Subsidiary shall
fail to observe or perform any covenant or agreement contained in any
Transaction Document (except as set forth in clauses (a) and (b) above) and such
failure (if capable of remedy) remains unremedied for a period of 30 (thirty)
days after the earlier of (i) the date the Issuer, the Guarantor or such
Material Subsidiary obtains knowledge of the breach thereof or (ii) the date the
Issuer, the Guarantor or such Material Subsidiary receives written notice
thereof from any Agent or Purchaser;
(d) any representation, warranty, certification or statement made
by the Issuer or the Guarantor in any Financing Document or in any certificate,
financial statement or other document delivered pursuant to any Financing
Document (including any Notice of Purchase or Notice of Disbursement) shall
prove to have been incorrect in any material respect when made (or deemed made)
and such condition (if capable of remedy) remains unremedied for a period of 30
(thirty) days after the earlier of (i) the date the Issuer or the Guarantor
obtains knowledge thereof or (ii) the date the Issuer or the Guarantor receives
written notice thereof from any Agent or Purchaser;
(e) any event or condition shall occur which results in the
acceleration of the maturity of any Material Financial Obligation;
40
(f) the Issuer, the Guarantor or any of the Material Subsidiaries
shall commence a voluntary case or other proceeding seeking liquidation,
reorganization, "concordata" or other relief with respect to itself or its debts
under any domestic or foreign bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property, or shall consent to any such relief or to the appointment of or
taking possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment for the
benefit of creditors, or shall fail generally to pay its debts as they become
due, or shall take any corporate action to authorize any of the foregoing;
(g) an involuntary case or other proceeding shall be commenced
against the Issuer, the Guarantor or any of the Material Subsidiaries seeking
liquidation, reorganization or other relief with respect to it or its debts
under any domestic or foreign bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of 60 days; or an order for relief shall
be entered against the Issuer, the Guarantor or any of the Material Subsidiaries
under any domestic or foreign bankruptcy laws as now or hereafter in effect;
(h) judgments or orders for the payment of money exceeding
$30,000,000 in aggregate amount shall be rendered against the Issuer, the
Guarantor or any of the Material Subsidiaries and the same shall remain
undischarged and unstayed, unless fully and adequately bonded or insured, at any
time following the 30th day after entry thereof;
(i) a Change of Control shall occur;
(j) any event or condition shall occur after the date hereof which
results in (i) a moratorium on, or rescheduling of, the payment of Debt of the
Issuer or the Guarantor or (ii) the imposition of currency controls or
regulations that prohibit or could reasonably be expected to prohibit the Issuer
or the Guarantor from performing, or could materially limit their ability to
perform, their respective obligations under the Financing Documents (including
the Notes and the Guaranty) in accordance with the terms thereof;
(k) (i) the Issuer, the Guarantor or any of the Material
Subsidiaries shall, to the extent applicable to such Person, fail to comply with
the terms of any Concession Agreements, any Concession, any approval granted by
the Central Bank, any vendor agreement (other than the Supply Contracts) or any
interconnection agreement necessary or desirable in the conduct of the business
of the Issuer or the Guarantor, which failure to so comply could in the
aggregate reasonably be expected to have a Material Adverse Effect, or (ii) any
Concession Agreement, any Concession, any approval granted by the Central Bank,
any vendor agreement (other than the Supply Contracts) or any interconnection
agreement shall fail to be in full force and effect or any party thereto shall
so assert in writing (which assertion or failure could reasonably be expected to
have a Material Adverse Effect);
(l) an Expropriation Event shall occur, without the provision of
prompt and fair compensation therefor (as determined by the Required Interest
Holders);
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(m) any Lien created or continued by any of the Collateral
Documents in respect of a material portion of the Collateral shall at any time
fail to constitute a valid and, subject to (x) the filing of the Equipment
Pledge Agreement and the Special Purpose Account Pledge Agreement with the
competent Registry of Deeds and Documents, each within 20 days after the Closing
Date, and (y) the filing of the Mortgage Deeds with the competent Real Estate
Property Registry within 20 days after receipt by the Issuer of all documents
required prior to such filing from Persons other than the Issuer and the
Guarantor, perfected Lien securing the obligations purported to be secured
thereby, with the priority required by the Financing Documents, or any party to
any Collateral Document (other than the Purchasers or the Agents) shall so
assert in writing;
(n) any Financing Document shall at any time fail to constitute a
valid and binding agreement of the Issuer, the Guarantor or any Material
Subsidiary party thereto or any such Person (or any Affiliate thereof) shall so
assert in writing;
(o) any Required Political Risk Policy shall cease to be in full
force and effect for a period of 30 days due to any reason arising from the
conduct or misconduct of the Issuer or the Guarantor; provided, however, that
the Issuer may deliver to the Administrative Agent substitute or replacement
political risk insurance policies (each, a "SUBSTITUTE POLITICAL RISK POLICY")
for any Required Political Risk Policy, and such substitution or replacement
shall not constitute an Event of Default under this clause (o), so long as each
such Substitute Political Risk Policy (i) covers such risks and in such amounts
as are covered by the Required Political Risk Policy being replaced, (ii) is
executed and delivered and otherwise in full force and effect prior to the
termination or cancellation of the replaced Required Political Risk Policy and
(iii) is satisfactory to the Purchasers covered by the replaced Required
Political Risk Policy; or
(p) any event or condition shall occur after the date hereof which
results in the suspension in any material respect, cancellation, illegality,
unenforceability or early termination or revocation of any Supply Contract
(other than solely as a result of a breach of such Supply Contract by the
relevant Supplier), or the validity thereof shall be challenged by the Issuer,
the Guarantor or any Material Subsidiary or any Affiliate thereof;
then, and in every such event, the Administrative Agent shall, if requested by
the Required Bank Interest Holders or the Required Tranche D Interest Holders,
by notice to the Issuer and the Guarantor declare the Bank Commitments or the
Tranche D Commitments, as applicable, hereunder to be terminated and/or the Bank
Notes or the Tranche D Notes outstanding, as applicable (together with accrued
interest thereon), to be immediately due and payable, and such Commitments shall
thereupon be terminated and such Notes (together with accrued interest thereon
and all other amounts due under the Financing Documents) shall thereupon become,
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Issuer and the Guarantor;
provided that, if any Event of Default specified in clause (f) or (g) occurs,
then without any notice to the Issuer or the Guarantor or any other act by any
Agent or the Purchasers, the Bank Commitments and the Tranche D Commitments
shall be immediately terminated and any Notes outstanding (together with accrued
interest thereon) shall become immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Issuer and the
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Guarantor. The Administrative Agent shall promptly distribute to each Purchaser
a copy of any acceleration request received by it hereunder.
Section 6.02 Notice of Default. Promptly upon the request of any
Purchaser, the Administrative Agent shall give notice to the Issuer of the
occurrence of any event referred to in Section 6.01(c) or Section 6.01(d) and
shall thereupon notify all the Purchasers thereof.
(a) Upon the occurrence and during the continuance of an Event of
Default, the proceeds of any sale of, or other realization upon, all or any part
of the Collateral shall be applied by the U.S. Collateral Agent and Brazilian
Collateral Agent, as applicable, in the following order of priorities:
(i) first, to payment of the expenses of such sale or
other realization, including reasonable compensation to agents and
counsel for the U.S. Collateral Agent and Brazilian Collateral Agent,
and all other expenses, liabilities and advances owed to the U.S.
Collateral Agent and Brazilian Collateral Agent in connection with the
discharge of their respective duties under this Agreement or any other
Financing Documents, pro rata among them in proportion to the amounts
owed, in connection therewith;
(ii) second, to the ratable payment of any other
unreimbursed expenses for which the Agents or any Purchaser is to be
reimbursed pursuant to Section 10.03 or similar provision of any
Financing Document;
(iii) third, to the ratable payment of accrued but unpaid
interest on the Notes outstanding pro rata in accordance with the
provisions of this Agreement;
(iv) fourth, to the ratable payment of unpaid principal of
Notes outstanding pro rata in accordance with the provisions of this
Agreement;
(v) fifth, to the ratable payment of all other
obligations of the Issuer and the Guarantor owing to any of the Secured
Parties under the Financing Documents, until all such obligations shall
have been paid in full; and
(vi) finally, to payment to the Issuer or its respective
successors or assigns, or as a court of competent jurisdiction may
direct, of any surplus then remaining from such proceeds.
(b) Subject to the foregoing provisions of this Section 6.02, the
U.S. Collateral Agent or the Brazilian Collateral Agent, as the case may be, may
make distributions hereunder in cash or in kind or, on a ratable basis, in any
combination thereof, in each case as directed in writing by the Required
Interest Holders.
ARTICLE 7
THE AGENTS
Section 7.01 Appointment and Authorization. (a) Administrative
Agent. Pursuant to Article 1288 et. seq. of the Brazilian Civil Code (including
Article 1317 thereof), each Purchaser
43
irrevocably appoints and authorizes and designates as its attorney-in-fact the
Administrative Agent to enter into and act as its agent and attorney-in-fact in
connection with the Collateral Documents and other Financing Documents to which
the Administrative Agent is party and to take such action on its behalf and to
exercise such powers under such Financing Documents as are delegated to the
Administrative Agent by the terms hereof or thereof, together with all such
powers as are reasonably incidental thereto.
(b) Collateral Agents. Pursuant to Article 1288 et. seq. of the
Brazilian Civil Code (including Article 1317 thereof), each Purchaser, each
Agent (except for the Brazilian Collateral Agent), the Tranche A Participation
Agent on behalf of the Tranche A Participants, the Tranche B Participation Agent
on behalf of the Tranche B Participants and the Tranche C Participation Agent on
behalf of the Tranche C Participants hereby irrevocably appoints and authorizes
and designates as its attorney-in-fact each of the Brazilian Collateral Agent
and the U.S. Collateral Agent to enter into and act as its and their agent and
attorney-in-fact in connection with the Collateral Documents and other Financing
Documents to which the Brazilian Collateral Agent or the U.S. Collateral Agent,
respectively, is party and to take such action as agent on its and their behalf
and to exercise such powers under such Financing Documents as are delegated to
the Brazilian Collateral Agent by the terms hereof or thereof, together with all
such powers as are reasonably incidental thereto. Without limiting the
generality of the foregoing, each Purchaser, each Agent (except for the
Brazilian Collateral Agent), the Tranche A Participation Agent on behalf of the
Tranche A Participants, the Tranche B Participation Agent on behalf of the
Tranche B Participants and the Tranche C Participation Agent on behalf of the
Tranche C Participants hereby grants the Brazilian Collateral Agent and the U.S.
Collateral Agent special powers to make and receive any pledges or mortgages, to
give receipts and releases, to settle, to waive rights, to novate, to agree on
terms and to receive service of process in connection with the Collateral
Documents (to which the Brazilian Collateral Agent or the U.S. Collateral Agent,
respectively, is party). Each action taken by the Brazilian Collateral Agent and
the U.S. Collateral Agent in connection with the transactions contemplated
hereunder is performed on behalf of the Secured Parties (except for the
Brazilian Collateral Agent and the U.S. Collateral Agent).
(c) Principal Paying Agent. Pursuant to Article 1288 et. seq. of
the Brazilian Civil Code (including Article 1317 thereof), each Purchaser
irrevocably appoints and authorizes and designates as its attorney-in-fact the
Principal Paying Agent to enter into and act as its agent and attorney-in-fact
in connection with the Financing Documents to which the Principal Paying Agent
is party and to take such action on its behalf and to exercise such powers under
such Financing Documents as are delegated to the Principal Paying Agent by the
terms hereof or thereof, together with all such powers as are reasonably
incidental thereto.
Section 7.02 Agents, Arrangers and Affiliates. Each Agent or
Arranger that is also a Purchaser shall have the same rights and powers under
the Transaction Documents as any other Purchaser and may exercise or refrain
from exercising the same as though it were not an Agent or an Arranger, and each
Agent and its respective Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Issuer, the Guarantor or any
of their Subsidiaries or Affiliates as if it were not an Agent or an Arranger.
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Section 7.03 Action by Agents. The obligations of the Agents
hereunder are only those expressly set forth herein. Without limiting the
generality of the foregoing, no Agent shall be required to take any action with
respect to any Default, except as expressly provided in Article 6.
Section 7.04 Consultation with Experts. Each Agent may consult
with legal counsel (who may be counsel for the Issuer or the Guarantor),
independent public accountants and other experts selected by it with reasonable
care and shall not be liable for any action taken or omitted to be taken by it
in good faith in accordance with the advice of such counsel, accountants or
experts.
Section 7.05 Liability of Agents. No Agent nor any of their
respective affiliates nor any of their respective directors, officers, agents
and employees shall be liable for any action taken or not taken by it or any of
them in connection herewith (i) with the consent or at the request of the
Required Interest Holders (or such different number of Purchasers or other
Persons as any provision hereof expressly requires for such consent or request)
or (ii) in the absence of its own gross negligence or willful misconduct. No
Agent nor any of its respective Affiliates nor any of its respective directors,
officers, agents and employees shall be responsible for or have any duty to
ascertain, inquire into or verify (i) any statement, warranty or representation
made in connection with this Agreement or any other Financing Document or any
issuance of the Notes; (ii) the performance or observance of any of the
covenants or agreements of the Issuer or the Guarantor in any Financing Document
or Other Transaction Document, provided, however, that the Administrative Agent
shall give prompt notice to each Purchaser of any Default of which it receives
actual notice in its capacity as Administrative Agent hereunder; (iii) the
satisfaction of any condition specified in Article 3, except receipt of items
required to be delivered to any Agent; (iv) the value of any Collateral or
effectiveness of any Collateral Document; or (v) the validity, effectiveness or
genuineness of any Transaction Document or any other instrument or writing
furnished in connection herewith. No Agent shall incur any liability by acting
in reliance upon any notice, consent, certificate, statement or other writing
(which may be a bank wire, telex, facsimile or similar writing) reasonably
believed by it to be genuine or to be signed by the proper party or parties.
Without limiting the generality of the foregoing, the use of the term "agent" in
this Agreement with reference to any Agent is not intended to connote any
fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable law. Instead, such term is used merely as a matter of
market custom and is intended to create or reflect only an administrative
relationship between independent contracting parties.
Section 7.06 Indemnification. Each Purchaser shall, ratably in
accordance with the aggregate outstanding principal amount of Notes held by such
Purchaser, indemnify each Agent, its respective Affiliates and their respective
directors, officers, agents and employees (to the extent not reimbursed by the
Issuer or the Guarantor) against any cost, expense (including counsel fees and
disbursements and any agency fees then due), claim, demand, action, loss,
liability, tax, penalty or interest with respect thereto, including the costs
and expenses of defending itself against any liability (except to the extent
resulting from such Person's gross negligence or willful misconduct) that such
Person may suffer or incur in connection with this Agreement or any action taken
or omitted by such Person hereunder, provided, however, that to the extent any
such cost, expense, claim, demand, action, loss, liability, tax, penalty or
interest arises solely against a Participation Agent (in its capacity as such)
under a Participation
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Agreement, then the indemnity hereunder to such Participation Agent will be due
entirely and only from the Purchasers party to such Participation Agreement.
Section 7.07 Credit Decision; Exculpatory Provisions. Each
Purchaser acknowledges that it has, independently and without reliance on any
Agent, the Arrangers or any other Purchaser, and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Purchaser also acknowledges that it
will, independently and without reliance on any Agent, the Arrangers or any
other Purchaser, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking any action under the Financing Documents. Neither the U.S. Collateral
Agent nor the Brazilian Collateral Agent makes any representations as to the
value or condition of the Collateral, or the title of any Secured Party thereto
or as to the rights and interests granted or the security afforded by this
Agreement or any tax and any penalties or interest with respect thereto, which
may be assessed, levied or collected by any jurisdiction in connection with this
Agreement, the other relevant Financing Documents or the attachment or
perfection of the security interest granted to either the U.S. Collateral Agent
or the Brazilian Collateral Agent in any Collateral.
Section 7.08 Successor Agents. Any Agent may (and, at the request
of the Required Interest Holders, shall) resign at any time by giving notice
thereof to the Purchasers, the Issuer and the Guarantor. Upon any such
resignation, the Required Interest Holders shall have the right to appoint a
successor Agent to replace the resigning Agent with (provided that no Event of
Default has occurred and is continuing) the consent of the Issuer and the
Guarantor (which consent shall not be unreasonably withheld). If no successor
Agent shall have been so appointed by the Required Interest Holders (with the
consent of the Issuer and the Guarantor, if appropriate) and shall have accepted
such appointment, within 30 days after the retiring Agent gives notice of
resignation, then the retiring Agent may, on behalf of the Purchasers, appoint a
successor Agent in such capacity, which successor Agent shall be (i) in the case
of a successor to the Administrative Agent or the Principal Paying Agent, a
commercial bank organized or licensed under the laws of the United States or of
any state thereof and having a combined capital and surplus of at least
$100,000,000 or (ii) in the case of a successor to the Brazilian Collateral
Agent, a commercial bank organized or licensed under the laws of Brazil having a
combined capital and surplus of at least $50,000,000, or a Brazilian branch of a
commercial bank meeting the requirements of clause (i) above. Upon the
acceptance of its appointment as an Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the rights
and duties of the retiring Agent in its capacity as such, and the retiring Agent
shall be discharged from its duties and obligations hereunder. After any
retiring Agent resigns as Agent hereunder, the provisions of this Article shall
inure to its benefit as to actions taken or omitted to be taken by it while it
was Agent.
Section 7.09 Agents' Fees. The Issuer and the Guarantor shall pay
to each of the Agents for its own account fees in the amounts and at the times
previously agreed upon between the Issuer and the Guarantor and such Agent,
including any such fees payable under the Fee Letters.
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Section 7.10 Certain Agents; Arrangers. The Arrangers and the Book
Runner, in their respective capacities as such, shall have no duties or
obligations under the Financing Documents and shall not have a fiduciary
relationship with any Purchaser.
Section 7.11 Instructions. Except as otherwise provided in this
Agreement and the other Financing Documents, the Brazilian Collateral Agent
shall only take such action under this Agreement and the other Financing
Documents as it shall be directed in writing in accordance herewith and
therewith. The Brazilian Collateral Agent shall not be required to exercise any
discretionary power granted to it herein or in any Finance Document, but may act
or refrain from acting upon the written direction of the Required Interest
Holders.
Section 7.12 Notice of Event of Default. The Brazilian Collateral
Agent shall not be deemed to have actual, constructive, direct or indirect
notice or knowledge of the occurrence of any Default or Event of Default unless
and until the it shall have received a notice from the Issuer, the Guarantor,
the Administrative Agent or any Purchaser indicating that any Default or Event
of Default has occurred. The Brazilian Collateral Agent shall have no obligation
whatsoever either prior to or after receiving such notice to inquire whether a
Default or Event of Default has, in fact, occurred and shall be entitled to rely
conclusively, and shall be protected in so relying, on any notice so furnished
to it.
Section 7.13 Responsibilities of Administrative Agent. The
Administrative Agent shall promptly transmit to each Purchaser each notice or
other document received by the Administrative Agent from the Issuer or the
Guarantor addressed to, or calling for action by, such Purchaser. With respect
to the documents referred to in Section 3.01, the Administrative Agent shall
forward (or arrange for counsel to forward) to each Purchaser copies of such
documents subsequent to the Closing Date, and with respect to documents referred
to in Section 3.02 for Purchases subsequent to the initial Purchase, the
Administrative Agent shall forward to each Purchaser copies of such documents as
soon as practicable.
ARTICLE 8
CHANGE IN CIRCUMSTANCES
Section 8.01 Basis for Determining Interest Rate Inadequate or
Unfair. If on or before the first day of any Interest Period applicable to any
Note, the Administrative Agent is advised by the Required Interest Holders that
LIBOR as determined by the Administrative Agent will not adequately and fairly
reflect the cost to such Purchasers of funding such Notes for such Interest
Period, then the Administrative Agent shall forthwith give notice thereof to the
Issuer and the Purchasers, whereupon until the Administrative Agent notifies the
Issuer that the circumstances giving rise to such suspension no longer exist (i)
the obligations of the Purchasers to purchase Notes or fund outstanding Notes at
the Euro-Dollar Rate shall be suspended, (ii) each outstanding Note bearing
interest at the Euro-Dollar Rate shall be converted to a Note bearing interest
at the Alternative Rate, and (iii) all calculations of Interest Amounts which
would otherwise be based on LIBOR shall instead be based on the Alternative Base
Rate.
Section 8.02 Illegality. If, on or after the date of this
Agreement, the adoption of any applicable law, rule or regulation, or any
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change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Purchaser (or its Applicable Lending Office) with
any request or directive issued on or after the date of this Agreement (whether
or not having the force of law) of any such authority, central bank or
comparable agency, shall make it unlawful or impossible for any Purchaser (or
its Applicable Lending Office) to purchase Notes or maintain outstanding Notes
at the Euro-Dollar Rate and such Purchaser shall so notify the Administrative
Agent, the Administrative Agent shall forthwith give notice thereof to the other
Purchasers and the Issuer, whereupon until such Purchaser notifies the Issuer
and the Administrative Agent that the circumstances giving rise to such
suspension no longer exist, the obligation of such Purchaser to purchase Notes
or maintain outstanding Notes at the Euro-Dollar Rate shall be suspended. Before
giving any notice to the Administrative Agent pursuant to this Section, such
Purchaser shall designate a different Applicable Lending Office if such
designation will avoid the need for giving such notice and will not, in the
judgment of such Purchaser, be otherwise disadvantageous to such Purchaser. If
such notice is given, (i) each outstanding Note held by such Purchaser bearing
interest at the Euro-Dollar Rate shall be converted into a Note bearing the
Alternative Rate either (a) on the last day of the then current Interest Period
applicable to such Note if such Purchaser may lawfully continue to hold and
maintain such Note to such day or (b) immediately if such Purchaser shall
determine that it may not lawfully continue to hold and maintain such Note to
such day, and (ii) all calculations of Interest Amounts with respect to such
Notes which would otherwise be based on LIBOR shall instead be based on the
Alternative Base Rate. Interest and principal on any such Note bearing the
Alternative Rate shall be payable on the same dates as, and on a pro rata basis
with, the interest and principal payable on the related Notes bearing the
Euro-Dollar Rate of the other Purchasers.
Section 8.03 Increased Cost and Reduced Return. (a) If on or after
the date hereof, the adoption of any applicable law, rule or regulation, or any
change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Purchaser (or its Applicable Lending Office) with
any request or directive issued on or after the date of this Agreement (whether
or not having the force of law) of any such authority, central bank or
comparable agency, shall impose, modify or deem applicable any reserve
(including any such requirement imposed by the Board of Governors of the Federal
Reserve System of the United States), special deposit, insurance assessment or
similar requirement against assets of, deposits with or for the account of, or
credit extended by, any Purchaser (or its Applicable Lending Office) or shall
impose on any Purchaser (or its Applicable Lending Office) or the London
interbank market any other condition affecting the Notes or Participation in the
Notes held by such Purchaser bearing the Euro-Dollar Rate or its obligation to
hold or fund Notes bearing the Euro-Dollar Rate and the result of any of the
foregoing is to increase the cost to such Purchaser (or its Applicable Lending
Office) of holding or funding any Note bearing the Euro-Dollar Rate, or to
reduce the amount of any sum received or receivable by such Purchaser (or its
Applicable Lending Office) under this Agreement or under any Note with respect
thereto, in each case by an amount deemed by such Purchaser to be material,
then, within 15 days after demand by such Purchaser (with a copy to the
Administrative Agent), the Issuer shall pay to such Purchaser such additional
amount or amounts as will compensate such Purchaser for such increased cost or
reduction.
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(b) If any Purchaser shall have determined that, after the date
hereof, the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any such law, rule or regulation, or any change in
the interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive issued on or after the date
of this Agreement regarding capital adequacy (whether or not having the force of
law) of any such authority, central bank or comparable agency, has or would have
the effect of reducing the rate of return on capital of such Purchaser (or its
Parent) as a consequence of such Purchaser's obligations hereunder to a level
below that which such Purchaser (or its Parent) could have achieved but for such
adoption, change, request or directive (taking into consideration its policies
with respect to capital adequacy) by an amount deemed by such Purchaser to be
material, then from time to time, within 15 days after demand by such Purchaser
(with a copy to the Administrative Agent), the Issuer shall pay to such
Purchaser such additional amount or amounts as will compensate such Purchaser
(or its Parent) for such reduction.
(c) Each Purchaser will promptly notify the Issuer and the
Administrative Agent of any event of which it has knowledge, occurring after the
date hereof, which will entitle such Purchaser to compensation pursuant to this
Section 8.03 and Section 2.11 and will designate a different Applicable Lending
Office if such designation will avoid the need for, or reduce the amount of,
such compensation and will not, in the judgment of such Purchaser, be otherwise
disadvantageous to it. A certificate of any Purchaser claiming compensation
under this Section shall set forth in reasonable detail its calculation of the
additional amount or amounts to be paid to it hereunder and shall be conclusive
in the absence of clearly demonstrable error. In determining such amount, such
Purchaser may use any reasonable averaging and attribution methods.
Notwithstanding the foregoing clauses (a) and (b) of this Section 8.03, neither
the Issuer nor the Guarantor shall be obligated to compensate any Purchaser for
any amount arising or accruing more than 90 days before the day on which such
Purchaser notifies the Issuer that it demands or proposes to demand such
compensation under this Section 8.03.
Section 8.04 Taxes. (a) For purposes of this Section 8.04, the
following terms have the following meanings:
"TAXES" means any and all present or future taxes, duties,
levies, imposts, contributions, deductions, charges or withholdings of
any nature with respect to any payment by the Issuer, the Guarantor or
any Subsidiary (each a "PAYOR" for purposes of this Section 8.04)
pursuant to any Financing Document, now or hereafter imposed, levied,
collected, withheld or assessed by any taxation authority or other
authority and all interest, penalties or similar liabilities with
respect thereto, excluding, in the case of each Purchaser and any
Agent, taxes imposed on or measured by its income or gross receipts,
and franchise or similar taxes imposed on it, by a jurisdiction (i)
under the laws of which such Purchaser or Agent (as the case may be) is
organized or in which its principal executive office is located or, in
the case of each Purchaser, in which its Applicable Lending Office is
located or (ii) in which it is deemed to be doing business (other than
being so deemed solely as a result of having executed, delivered or
performed its obligations under, or received a payment under, or
enforced this Agreement or any other Financing Document).
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"OTHER TAXES" means any present or future stamp or documentary
taxes and any other excise or property taxes, or similar charges or
levies, which arise from any payment made or being required to be made
pursuant to this Agreement or under any Note or from the execution,
delivery, registration, recording or enforcement of, or otherwise with
respect to any Financing Document.
(b) Any and all payments by any Payor to or for the account of any
Purchaser or any Agent hereunder or under any other Financing Document shall be
made without deduction or withholding for any Taxes or Other Taxes; provided
that, if any Payor shall be required by law to deduct any Taxes or Other Taxes
from any such payments, (i) the sum payable shall be increased as necessary so
that after making all required deductions and withholdings (including deductions
and withholdings applicable to additional sums payable under this Section 8.04)
such Purchaser or any Agent (as the case may be) receives an amount equal to the
sum it would have received had no such deductions or withholdings been made,
(ii) such Payor shall make such deductions or withholdings, (iii) such Payor
shall pay the full amount deducted or withheld to the relevant taxation
authority or other authority in accordance with applicable law and (iv) such
Payor shall promptly furnish to the Administrative Agent, at its address
specified in or pursuant to Section 10.01, the original or a certified copy of a
receipt evidencing payment thereof (a copy of which shall be forwarded by the
Administrative Agent to any Purchaser upon request).
(c) Each Payor agrees to indemnify each Purchaser and each Agent
for the full amount of Taxes or Other Taxes levied, imposed or assessed on (and
whether or not paid directly by) or paid by such Purchaser or any Agent (as the
case may be), whether or not correctly or legally imposed, paid by such
Purchaser or any Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto.
Each Payor acknowledges that any payment made to any Purchaser or Agent or to
any taxation authority or other authority in respect of the indemnification
obligations of such Payor provided in this clause (c) shall constitute a payment
in respect of which the provisions of clause (b) and this clause shall apply.
(d) Upon the written request of any Payor, each Purchaser and each
Agent will promptly provide to such Payor such form, certification or similar
documentation (each duly completed, accurate and signed) as is required by
Brazil and each other jurisdiction otherwise imposing Taxes or Other Taxes and
only if required or permitted under applicable law in order to obtain an
exemption from, or reduced rate of, deduction, payment or withholding of Taxes
or Other Taxes to which such Purchaser or any Agent is entitled pursuant to an
applicable tax treaty or the law of Brazil or such other jurisdiction; provided
that no Purchaser or Agent shall have any obligation to provide such form,
certification or similar document if, in the sole judgment of such Purchaser or
Agent, the provision of such form, certification or similar document will be
unduly burdensome, will require such Purchaser or Agent to disclose any
confidential or proprietary information or will otherwise be disadvantageous to
such Purchaser or Agent. Subject to the proviso in the immediately preceding
sentence, the Payors shall not be required to pay any additional amounts to or
indemnify any Purchaser or Agent under Section 8.04(b) or 8.04(c) for any Taxes
or Other Taxes to the extent that such Taxes or Other Taxes would not be imposed
but for the failure by such Purchaser or Agent (as the case may be) to provide
any form, certification or similar document as required by this clause (d);
provided that if a Purchaser that is otherwise exempt from or subject to a
reduced rate of withholding tax, becomes subject to
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Taxes because of its failure to deliver a form required hereunder, such Payor
shall take such steps as such Purchaser shall reasonably request to assist such
Purchaser to recover such Taxes.
(e) If any Payor is required to pay additional amounts to or for
the account of any Purchaser pursuant to this Section 8.04 as a result of a
change of law occurring after the date hereof, then such Purchaser, at the
request of such Payor, will use its best efforts to change the jurisdiction of
its Applicable Lending Office if, in the sole judgment of such Purchaser, such
change (i) will eliminate or reduce any such additional payment which may
thereafter accrue and (ii) is not otherwise disadvantageous to such Purchaser.
Section 8.05 Alternative Rate Loans Substituted for Affected
Euro-Dollar Loans. If (i) the obligation of any Purchaser to hold Notes bearing
the Euro-Dollar Rate or fund outstanding Notes bearing the Euro-Dollar Rate has
been suspended pursuant to Section 8.02 or (ii) any Purchaser has demanded
compensation under Section 2.11 or 8.03 with respect to Notes bearing the
Euro-Dollar Rate, and in any such case the Issuer shall, by at least five
Euro-Dollar Business Days' prior notice to such Purchaser through the
Administrative Agent, have elected that the provisions of this Section 8.05
shall apply to such Purchaser, then, unless and until such Purchaser notifies
the Issuer that the circumstances giving rise to such suspension or demand for
compensation no longer exist,
(a) from the first Interest Period commencing thereafter, all
outstanding Notes of the Issuer which would otherwise be funded by such
Purchaser at the Euro-Dollar Rate shall instead bear the Alternative Rate (on
which interest and principal shall be payable contemporaneously with the related
Notes held by the other Purchasers);
(b) all calculations of the Interest Amounts which would otherwise
be based on LIBOR for such Purchaser shall instead be based on the Alternative
Base Rate; and
(c) until all Notes held by such Purchaser bearing the Euro-Dollar
Rate have been repaid (or converted to the Alternative Rate), all payments of
principal which would otherwise be applied to repay such Notes shall be applied
to repay Notes bearing the Alternative Rate.
If such Purchaser notifies the Issuer that the circumstances giving
rise to such suspension or demand for compensation no longer exist, the
principal amount of each such Note bearing the Alternative Rate shall again
accrue interest based on the Euro-Dollar Rate on the first day of the next
succeeding Interest Period applicable to the related Notes bearing interest
based on the Euro-Dollar Rate held by the other Purchasers.
Section 8.06 Substitution of Purchaser. If (i) the obligation of
any Purchaser to purchase or maintain Notes at the Euro-Dollar Rate has been
suspended pursuant to Section 8.02 or (ii) any Purchaser has demanded
compensation under Section 2.11, 8.03 or 8.04, the Issuer shall have the right
to seek a substitute purchaser or purchasers (each a "SUBSTITUTE PURCHASER"),
which may be one or more of the Purchasers or one or more other purchasers
reasonably satisfactory to the Administrative Agent, to purchase the Notes held
by such Purchaser (the "AFFECTED PURCHASER") and, if the Issuer locates one or
more Substitute Purchasers, the Affected Purchaser shall, upon payment (A) by
the Issuer or the Guarantor to the Administrative Agent of the fee referred to
in Section 10.06(c) and (B) by the Substitute
51
Purchaser to such Affected Purchaser of the purchase price agreed between such
Affected Purchaser and the Substitute Purchaser or Purchasers (or, failing such
agreement, a purchase price in the amount of the outstanding principal amount of
the Notes held by such Affected Purchaser and accrued interest thereon to the
date of payment) plus any amount (other than principal and interest) then due to
such Affected Purchaser or accrued for such Affected Purchaser's account
hereunder, assign all its rights and obligations under this Agreement and the
Notes (including its Commitment (if any)) to the Substitute Purchaser or
Purchasers, and the Substitute Purchaser or Purchasers shall assume such rights
and obligations, whereupon (x) the Commitment of each Substitute Purchaser that
is already a Purchaser shall be increased by the portion of the Affected
Purchaser's Commitment so assigned to and assumed by it and (y) each Substitute
Purchaser that is not already a Purchaser shall become a Purchaser party to this
Agreement and shall acquire all the rights and obligations of a Purchaser with a
Commitment equal to the portion of the Affected Purchaser's Commitment so
assigned to and assumed by it.
Section 8.07 Participants. Each of the Issuer and the Guarantor
agrees that references in Section 8.06 to "Affected Purchaser" shall refer only
to the Tranche A Participant, the Tranche B Participant, the Tranche C
Participant or the Tranche D Participant (or, to the extent that a portion of
any Note that has not been participated, the Initial Purchaser) actually so
affected in the relevant respect. Any Participant presenting a claim under this
Article 8 shall present such claim to the Administrative Agent, which shall
forward such claim to the Issuer.
ARTICLE 9
PARENT GUARANTY
Section 9.01 The Parent Guaranty. The Guarantor hereby absolutely,
unconditionally and irrevocably guarantees as primary obligor the full and
punctual payment when due (whether at stated maturity, upon acceleration or
otherwise) of any amount payable by the Issuer under this Agreement and the
other Financing Documents for all purposes.
Section 9.02 Guaranty Unconditional. The obligations of the
Guarantor under the Parent Guaranty shall be unconditional and absolute and,
without limiting the generality of the foregoing, shall not be released,
discharged or otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of the Issuer under this Agreement or any
Note, by operation of law or otherwise;
(b) any modification or amendment of or supplement to this
Agreement or any Note;
(c) any release, impairment, non-perfection or invalidity of any
direct or indirect security for any obligation of the Issuer under this
Agreement or any Note;
(d) any change in the corporate existence, structure or ownership
of the Issuer, or any insolvency, bankruptcy, reorganization, "concordata" or
other similar proceeding affecting the Issuer or its assets or any resulting
release or discharge of any obligation of the Issuer contained in this Agreement
or any Note;
52
(e) the existence of any claim, set-off or other rights which the
Guarantor may have at any time against the Issuer, any Agent, any Purchaser or
any other Person, whether in connection herewith or any unrelated transactions,
provided that nothing herein shall prevent the assertion of any such claim by
separate suit or compulsory counterclaim;
(f) any invalidity or unenforceability relating to or against the
Issuer for any reason of this Agreement or any Note or any other Financing
Document, or any provision of applicable law or regulation purporting to
prohibit the payment by the Issuer of the principal of or interest on any Note
or any other amount payable by it under this Agreement; or
(g) any other act or omission or delay of any kind by the Issuer,
any Agent, any Purchaser or any other Person or any other circumstance
whatsoever which might, but for the provisions of this Section 9.02, constitute
a legal or equitable discharge of the Guarantor's obligations hereunder.
Section 9.03 Discharge Only upon Payment in Full; Reinstatement.
The Guarantor's obligations under the Parent Guaranty shall remain in full force
and effect until all amounts payable by the Guarantor and the Issuer under this
Agreement and any other Financing Documents shall have been paid in full. If at
any time any payment of or any amount payable by the Issuer under this Agreement
or any other Financing Document is rescinded or must be otherwise restored or
returned upon the insolvency, bankruptcy or reorganization of the Issuer or
otherwise, the Guarantor's obligations under the Parent Guaranty with respect to
such payment shall be reinstated at such time as though such payment had been
due but not made at such time.
Section 9.04 Waiver by the Guarantor. The Guarantor hereby
irrevocably and unconditionally waives, to the fullest extent permitted by
applicable law: (a) notice of acceptance of this Guaranty and notice of any
liability to which the Guaranty may apply, (b) all notices that may be required
by statute, rule or law or otherwise to preserve intact any rights of any
Purchaser against the Issuer or the Guarantor, including any demand,
presentment, protest, proof of notice of non-payment, notice of any failure on
the part of the Issuer or the Guarantor to perform and comply with any covenant,
agreement, term, condition or provision of any agreement and any other notice to
any other party that may be liable in respect of the obligations guaranteed
hereby (including the Issuer, the Guarantor and any other guarantor thereof from
time to time) except any of the foregoing as may be expressly required
hereunder, (c) any right to the enforcement, assertion or exercise by any
Purchaser of any right, power, privilege or remedy conferred upon any Purchaser
under any Note or otherwise, (d) any requirement that any Purchaser exhaust any
right, power, privilege or remedy, or mitigate any damages resulting from a
default, under any Note, or proceed to take any action against the Issuer or any
other Person under or in respect of any Note or otherwise, or protect, secure,
perfect or ensure any Lien on any property at any time constituting Collateral,
and (e) to the extent not already covered, the Guarantor expressly and
irrevocably waives all benefits it may have or claim under articles 1491, 1493,
1494, 1498, 1499, 1500, 1502, 1503 and 1504 of the Brazilian Civil Code,
articles 261 and 262 of the Brazilian Commercial Code and article 595 of the
Brazilian Civil Procedure Code.
Section 9.05 Subrogation. Upon making full payment with respect to
any obligation of the Issuer under this Article 9, the Guarantor shall be
subrogated to the rights of the payee against the Issuer with respect to such
obligation; provided that the Guarantor shall not enforce
53
any payment by way of subrogation against the Issuer so long as any amount
payable by the Issuer hereunder or under any other Financing Document remains
unpaid.
Section 9.06 Stay of Acceleration. In the event that acceleration
of the time for payment of any amount payable by the Issuer under this Agreement
or its Notes is stayed upon insolvency, bankruptcy or reorganization of the
Issuer, all such amounts otherwise subject to acceleration under the terms of
this Agreement shall nonetheless be payable by the Guarantor under the Parent
Guaranty forthwith on demand by the Administrative Agent made at the request of
the Required Interest Holders.
Section 9.07 Instrument for the Payment of Money. The Guarantor
hereby acknowledges that the Guaranty in this Article constitutes an instrument
for the payment of money, and consents and agrees that any Purchaser or the
Administrative Agent, at its sole option, in the event of a dispute by the
Guarantor in the payment of any moneys due hereunder, shall have the right to
bring motion action under New York CPLR Section 3213.
ARTICLE 10
MISCELLANEOUS
Section 10.01 Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including bank wire,
facsimile or similar writing) and shall be given to such party at its address or
facsimile number set forth on the signature pages hereof or at such other
address or facsimile number as such party may hereafter specify for the purpose
by notice to the Administrative Agent, the Issuer and the Guarantor. Each such
notice, request or other communication shall be effective when received.
Section 10.02 No Waivers; Cumulative Rights. No failure or delay by
any Agent or any Purchaser in exercising any right, power or privilege hereunder
or under any other Financing Document shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
Section 10.03 Expenses; Indemnification. (a) The Issuer and the
Guarantor shall pay (i) all reasonable out-of-pocket expenses of the Agents and
the Initial Purchaser, including reasonable and duly documented fees and
disbursements of New York and Brazilian counsel, in connection with the
preparation and administration of the Financing Documents, any waiver or consent
(or proposed waiver or consent) thereunder or any amendment (or proposed
amendment) thereof (unless requested solely by the Purchasers), or any Default
or alleged Default thereunder (other than any such expenses incurred by the
Agents in connection with any refinancing under section 5.10(c), which expenses
shall be paid by the Tranche D Lender(s) requesting such refinancing), (ii) all
reasonable out-of-pocket expenses of the Tranche D Lenders, including, after
approval thereof (not to be unreasonably withheld), the reasonable fees and
disbursements of New York and Brazilian counsel of such Tranche D Lenders, in
connection with the preparation of the Financing Documents, any waiver or
consent (or proposed waiver or consent) thereunder or any amendment (or
proposed amendment) thereof (unless requested solely by the
54
Purchasers), or any Default or alleged Default thereunder, (iii) all reasonable
out-of-pocket expenses of the Agents and the Initial Purchaser, including
reasonable fees and disbursements of counsel, in connection with any financing
pursuant to Sections 5.10(c) or 5.18(d), (iv) following the occurrence and
during the continuance of an Event of Default or an alleged Event of Default,
the fees and expenses of consultants and other experts retained by the Agents or
Purchasers and (v) all reasonable out-of-pocket expenses incurred by the Agents
and Purchasers, including (without duplication) the reasonable fees and
disbursements of outside counsel, in connection with such Event of Default and
collection, bankruptcy, insolvency, work-out and any enforcement proceedings
reasonably resulting therefrom.
(b) Each of the Issuer and the Guarantor agrees to indemnify the
Agents, the Arrangers and each Purchaser, their respective Affiliates and the
respective directors, officers, agents and employees of the foregoing (each an
"INDEMNITEE") and hold each Indemnitee harmless from and against any and all
liabilities, losses, damages, costs and expenses of any kind, including the
reasonable fees and disbursements of counsel and settlement costs, which may be
incurred by such Indemnitee in connection with any investigation or
administrative or judicial proceeding (whether or not such Indemnitee shall be
designated a party thereto) brought or threatened relating to or arising out of
this Agreement or any of the other Transaction Documents or any actual or
proposed use of proceeds of Notes hereunder; provided that no Indemnitee shall
have the right to be indemnified hereunder for such Indemnitee's own gross
negligence or willful misconduct.
Section 10.04 Set-offs; Sharing; PRI Proceeds. (a) If (i) an Event
of Default has occurred and is continuing and (ii) the Required Interest Holders
have requested the Administrative Agent to declare the Notes to be immediately
due and payable pursuant to Section 6.01, or the Notes have become immediately
due and payable without notice as provided in Section 6.01, then any Purchaser
is hereby authorized by the Issuer and the Guarantor at any time and from time
to time, to the extent permitted by applicable law, without notice to the Issuer
or the Guarantor (any such notice being expressly waived by the Issuer and the
Guarantor), to set off and apply all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Purchaser to or for the account of the Issuer or the
Guarantor against any obligations of the Issuer or the Guarantor to such
Purchaser now or hereafter existing under this Agreement, regardless of whether
any such deposit or other obligation is then due and payable or is in the same
currency or is booked or otherwise payable at the same office as the obligation
against which it is set off and regardless of whether such Purchaser shall have
made any demand for payment under this Agreement or any of the other Transaction
Documents. Each Purchaser agrees promptly to notify the Issuer after any such
set-off and application made by such Purchaser; provided that any failure to
give such notice shall not affect the validity of such setoff and application.
The rights of the Purchasers under this subsection are in addition to any other
rights and remedies which such Purchasers may have.
(b) The Purchasers agree that if they shall, by exercising any
right of set-off or counterclaim or otherwise, receive payment of a proportion
of the aggregate amount of principal and interest then due with respect to the
Notes held by it, except for the proceeds of a Required Political Risk Policy
(which shall be distributed as contemplated by the Tranche B Participation
Agreements), which is greater than the proportion received by any other
Purchaser in respect of the aggregate amount of principal and interest then due
with respect to the Note held by such
55
other Purchaser, the Purchaser receiving such proportionately greater payment
shall purchase such participations in the Note held by the other Purchaser, and
such other adjustments shall be made, as may be required so that all such
payments of principal and interest with respect to the Notes held by such
Purchasers shall be shared by the Purchasers pro rata; provided that nothing in
this Section shall impair the right of a Purchaser to exercise any right of
set-off or counterclaim it may have and to apply the amount subject to such
exercise to the payment of indebtedness of the Issuer or the Guarantor other
than its indebtedness in respect of the Notes. Each of the Issuer and the
Guarantor agrees, to the fullest extent it may effectively do so under
applicable law, that any holder of a participation in a Note (including any
Tranche A Participant, Tranche B Participant, Tranche C Participant or Tranche D
Participant), whether or not acquired pursuant to the foregoing arrangements,
may exercise rights of set-off or counterclaim and other similar rights with
respect to such participation as fully as if such holder of a participation were
a direct creditor of the Issuer and the Guarantor in the amount of such
participation.
Section 10.05 Amendments and Waivers; Enforcement of Collateral
Documents. (a) Any provision of this Agreement or the Notes may be amended or
waived if, but only if, such amendment or waiver is in writing and is signed by
each of the Issuer and the Guarantor and the Administrative Agent with the
consent of the Required Interest Holders; provided that no such amendment or
waiver shall:
(i) unless signed by all Interest Holders in respect of
Tranche A, Tranche B (it being understood that the Interest Holders in
respect of Tranche B may be required to seek the consent of each
Political Risk Insurer with respect to subclauses (B), (C), (E) and (F)
herein), Tranche C or Tranche D (for purposes of this clause (i), such
Tranche A, Tranche B, Tranche C or Tranche D, the "AFFECTED TRANCHE"),
(A) subject any Interest Holder in respect of the Affected Tranche to
any additional financial obligation, (B) reduce the principal,
interest, fees or other amounts payable under any Financing Document in
respect of the Affected Tranche, (C) postpone the date fixed for any
scheduled payment of principal, interest, fees or other amounts payable
under any Financing Document in respect of the Affected Tranche or (D)
reduce the amount payable to any Interest Holder in respect of the
Affected Tranche pursuant to Section 8.03, 8.04 or 10.03, (E) effect a
release of the Guarantor from its obligations under Article 9, or (F)
except in connection with the incurrence of Debt pursuant to (and
satisfying the requirement of) Section 5.10(c) or Section 5.18(d),
amend the definition of "Secured Parties";
(ii) unless signed by all Interest Holders of Bank Voting
Interests, amend or waive the definition of the term "Bank Voting
Interests" or delete Section 5.01(a); and unless signed by all Interest
Holders of Tranche D Voting Interests, amend or waive the definition of
the term "Tranche D Voting Interests";
(iii) unless signed by all Interest Holders (it being
understood that the Interest Holders in respect of Tranche B may be
required to seek the consent of each Political Risk Insurer with
respect to subclause (B) herein), (A) add any new tranche of
commitments or notes under this Agreement (except in respect of a
refinancing under Section 5.10(c)) or (B) amend or waive any provision
of this Section 10.05 or the definition of the term "Voting Interests",
"Interest Holder" or "Required Interest
56
Holders" or any other definition or provision contained herein
specifying the number or percentage of Interest Holders required to
waive, amend or modify any rights hereunder or make any determination
or grant any consent hereunder; or
(iv) unless signed by all Interest Holders adversely
affected thereby and, with respect to Section 2.08, each Political Risk
Insurer, amend or waive any provision of this Agreement governing the
application of payments among Tranches or any Tranche D Commitments, as
applicable, including Sections 2.07 and 2.08.
For the avoidance of doubt, all voting rights in respect of each
Tranche shall terminate upon repayment in full of the respective Note and
termination of the respective Commitment.
(b) The Brazilian Collateral Agent and the U.S. Collateral Agent
shall not agree to an amendment or waiver of, or take any action to foreclose
upon any Collateral under, any Collateral Document to which it is a party
without the prior written consent or instruction of the Required Interest
Holders, provided, however, that the Brazilian Collateral Agent shall be
permitted to agree to an amendment of (i) the Equipment Pledge Agreement as
contemplated by Section 6(b) thereof and (ii) one or more of the Mortgage Deeds,
in each case resulting from either: (A) the purchase of property or assets that
are required to be included in the Exhibits thereto or (B) the sale of property
or assets permitted to be (and which are being) sold or disposed of in
accordance with the provisions hereof, without the prior written consent or
instruction of the Interest Holders so long as the Issuer, in the case of a sale
of property or assets, certifies to the Administrative Agent or the U.S.
Collateral Agent, as the case may be (which Agent may instruct the Brazilian
Collateral Agent accordingly), that the sale or disposition is permitted under
and complies with the provisions governing Asset Sales under this Agreement. Any
provision of any Financing Document other than this Agreement, the Notes and the
Collateral Documents may be amended or waived if, but only if (in addition to
any requirements for amendment or waiver provided therein), such amendment or
waiver is in writing and is signed by the Issuer, the Guarantor and the
Administrative Agent with the consent of the Required Interest Holders.
Notwithstanding the foregoing provisions of this clause (b), no such amendment
or waiver shall, unless signed or consented to by all Secured Interest Holders
and each Political Risk Insurer (with respect to clause (x) herein and clause z,
as it regards Section 6.02(a)), (x) effect or permit a release of all or
substantially all of the Collateral, except in the case of a release of
Collateral in connection with the termination of a Collateral Document in
accordance with the terms thereof or (y) (except as permitted under Sections
5.10(c) or 5.18(d)) provide for the sharing of such Collateral with any other
obligations or (z) change any collateral sharing provisions (including Section
6.02).
Section 10.06 Successors; Participations and Assignments.
(a) Benefits; Transfers. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that neither the Issuer nor the Guarantor may
assign or otherwise transfer any of its rights or obligations under this
Agreement without the prior written consent of all the Purchasers.
(b) (i) Participations to Participants. The Initial Purchaser
may at any time sell to one or more banks or other institutions (each, including
any Tranche A Participant, Tranche B
57
Participant, Tranche C Participant and Tranche D Participant, a "PARTICIPANT")
participating interests in its Notes (in an aggregate principal amount of not
less than $5,000,000 per participating interest), pursuant to a Participation
Agreement signed by such Participant and such Initial Purchaser, with (and
subject to) the subscribed consent of the Administrative Agent and (except
during the continuation of an Event of Default and except any participation sold
to a Participant party to the Participation Agreements as of the Closing Date)
of the Issuer (which shall not be unreasonably withheld; it being understood
that a material increase in the economic burden on the Issuer, by way of
application of Article 8 or otherwise, would be a reasonable basis for
withholding of consent other than with respect to a sale of a Participation to
an Initial Tranche D Lender). Upon the sale by the Initial Purchaser of any such
participation interest to a Participant, (A) such Participant shall have all the
rights and obligations of a Purchaser hereunder, (B) the Initial Purchaser shall
be released from its obligations hereunder to a corresponding extent, (C) such
Participant shall be solely responsible for the performance of its duties
hereunder, and (D) the Issuer, the Guarantor and the Administrative Agent shall
deal solely and directly with such Participant in connection with such
Participant's rights and obligations under this Agreement. As contemplated by
Sections 2.09 and 2.11 and Article 8, each of the Issuer and the Guarantor
agrees that each Participant shall be entitled to the benefits of such Sections
and Articles with respect to its participating interest. An assignment or other
transfer which is not permitted by clause (c) below shall be given effect for
purposes of this Agreement only to the extent of a participating interest sold
in accordance with this clause (b). Subject to Section 10.15, the Initial
Purchaser may deliver any documents received by it in connection herewith to any
Participants in its Note(s).
(ii) Other Participations. Notwithstanding Section
10.06(b)(i), any Purchaser may, without the consent of the Issuer or
the Administrative Agent, sell participations to one or more financial
institutions or other Persons (other than non-financial institutions
that such Purchaser reasonably believes may be a competitor of the
Issuer or the Guarantor) (a "PARTICIPANT") in all or a portion of such
Purchaser's rights and obligations under this Agreement and the other
Financing Documents (including all or a portion of its Notes in the
form of a subparticipation under the relevant Participation Agreement,
but excluding the assignment of a Purchaser's rights under any
Participation Agreement, which shall be subject to clause (c) below);
provided that (i) such Purchaser's obligations under this Agreement and
the other Financing Documents shall remain unchanged, (ii) such
Purchaser shall remain solely responsible to the other parties hereto
or thereto for the performance of such obligations and (iii) the
Issuer, the Guarantor and the Administrative Agent shall continue to
deal solely and directly with such Purchaser in connection with such
Purchaser's rights and obligations under this Agreement and the other
Financing Documents. Any agreement or instrument (other than the
applicable Participation Agreement) pursuant to which a Purchaser sells
such a participation shall provide that such Person shall retain the
sole right to enforce this Agreement and the other Financing Documents
and to approve any amendment, modification or waiver of any provision
of this Agreement or any other Financing Document; provided that such
agreement or instrument may provide that such Person will not, without
the consent of the participant, agree to any amendment, modification or
waiver described in clauses (a)(i), (ii), (iii) or (iv) of Section
10.05 that affects such participant. No participant shall be entitled
to receive any greater amount pursuant to Section 2.09, Section 2.11 or
Article 8 than the selling Purchaser would have been entitled to
receive on the date of such sale
58
(with subsequent developments not being subject to comparison) in
respect of the interest sold to such participant had no such sale
occurred. Each Purchaser that sells a participation shall, as agent of
the Issuer and Guarantor solely for the purposes of this Section
10.06(b)(ii), record in book entries maintained by such Purchaser the
name and amount of the participation of each participant entitled to
receive payments in respect of such participating interests.
(c) Assignments, Generally. Each Purchaser may at any time assign
to one or more banks or other institutions (each an "ASSIGNEE") all or any
portion of the Notes and/or Commitment of one or more Tranches held by such
Purchaser or all or a portion of its rights under any relevant Participation
Agreement, which Notes and/or Commitment need not be pro rata with respect to
the Tranches (in an aggregate principal amount at least equal to $5,000,000 per
assignment, and after giving effect to which such assignor Purchaser holds Notes
of each Tranche (or an interest in a Participation Agreement) included in such
assignment in an aggregate principal amount with respect to such Tranche, that
is at least equal to $5,000,000), together, in each case, with a corresponding
portion of the rights and obligations of such Purchaser under this Agreement and
its Notes and/or Commitment (or the relevant Participation Agreement), and such
Assignee shall purchase such Notes (or the relevant Participation Agreement, as
the case may be), pursuant to an Assignment and Assumption Agreement
substantially in the form of Exhibit E hereto signed by such Assignee and such
transferor Purchaser, with (and subject to) the subscribed consent of the
Administrative Agent and (except during the continuation of an Event of Default)
of the Issuer or the Guarantor (which shall not be unreasonably withheld; it
being understood that (x) a material increase in the economic burden on the
Issuer or (y) a transfer of an interest in a Note to a competitor of the Issuer
(in the reasonable judgment of the Issuer) would be a reasonable basis for
withholding of consent, other than, with respect to clause (x) above, any such
increase in economic burden that may result from the sale of a Participation by
an Initial Tranche D Lender to a financial institution); provided no such
consent shall be required if (i) an Assignee acquiring an interest in the Bank
Note or a Tranche D Note is an Eligible Transferee (subject, in the case of an
assignment by a Tranche D Lender, to any restrictions set forth in the
applicable Tranche D Participation Agreement) or (ii) an Assignee of a Tranche D
Commitment is a Tranche D Affiliate. When such instrument has been signed and
delivered by all parties thereto (with required consents) and such Assignee has
paid to such transferor Purchaser the purchase price agreed between them, such
Assignee shall be a Purchaser party to this Agreement (or the relevant
Participation Agreement) and shall have all the rights and obligations of a
Purchaser, and the transferor Purchaser shall be released from its obligations
hereunder (or the relevant Participation Agreement) to a corresponding extent,
and no further consent or action by any party shall be required. Upon the
consummation of any assignment pursuant to this subsection, the transferor
Purchaser, the Administrative Agent, the Issuer and the Guarantor shall make
appropriate arrangements so that, if required, new Notes are issued to the
Assignee. In connection with any such assignment, the transferor Purchaser shall
pay to the Administrative Agent an administrative fee for processing such
assignment in the amount of $3,000. Any Purchaser may at any time assign all or
any portion of its rights under this Agreement and its Notes (or the relevant
Participation Agreement) to a Federal Reserve Bank of the United States;
provided, however, that no such assignment shall release the transferor
Purchaser from its obligations hereunder.
59
(d) Limitations on Certain Costs. No Assignee, participant (other
than a Tranche A Participant, a Tranche B Participant, Tranche C Participant or
Tranche D Participant) or other transferee of any Purchaser's rights shall be
entitled to receive any greater payment under Section 8.03 or 8.04 than such
Purchaser would have been entitled to receive with respect to the rights
transferred, unless such transfer is made (w) by a Tranche D Lender to an
Eligible Transferee, (x) with the prior written consent of the Issuer or the
Guarantor, (y) by reason of the provisions of Section 8.02, 8.03 or 8.04
requiring such Purchaser to designate a different Applicable Lending Office
under certain circumstances or (z) (in the case of an assignment in accordance
with Section 10.06(c) not requiring consent of the Issuer or Guarantor) at the
time of such assignment no such difference in entitlement existed.
Notwithstanding anything to the contrary in the immediately preceding sentence,
each Tranche A Participant, each Tranche B Participant, each Tranche C
Participant and each Tranche D Participant shall be entitled to the benefit of
Section 2.11; provided that no other participant shall be entitled to such
benefits.
(e) Maintenance of Registry. Each of the Issuer and the Guarantor
hereby designates the Administrative Agent to serve as such Person's agent,
solely for purposes of this Section 10.06(e), to maintain a register (the
"REGISTER") on which the Administrative Agent will record the Notes purchased by
each Purchaser and each repayment in respect of the principal amount of the
Notes held by each Purchaser and to retain a copy of each Assignment and
Assumption Agreement delivered to the Administrative Agent pursuant to this
Section. Failure to make any such recordation, or any error in such recordation,
shall not affect either the obligations of the Issuer or the Guarantor in
respect of such Notes. The entries in the Register shall be presumed correct
absent evidence to the contrary, and the Issuer, the Guarantor, the Agents and
the Purchasers shall treat each Person in whose name a Note is registered as the
owner thereof for all purposes of this Agreement, subject to the requirements of
Section 10.06(c). With respect to any Purchaser, the assignment or other
transfer of the Notes of such Purchaser and the rights to the principal of, and
interest on, any Note issued pursuant to this Agreement shall not be effective
until such assignment or other transfer is recorded on the Register and, except
to the extent provided in this Section 10.06(e), otherwise complies with Section
10.06, and prior to such recordation all amounts owing to the transferor
Purchaser with respect to such Notes shall remain owing to the transferor
Purchaser. The registration of assignment or other transfer of all or part of
any Notes for a Purchaser shall be recorded by the Administrative Agent on the
Register only upon the acceptance by the Administrative Agent of a properly
executed and delivered Assignment and Assumption Agreement. The Administrative
Agent may make provision for any Note to clear through Euroclear and
Clearstream, provided that no assignment of such Note or any rights to any such
Note shall be effective unless and until such assignment is recorded on the
Register and otherwise complies with this Section 10.06(e). No participation may
be sold in any Note held in Euroclear or Clearstream. The Register shall be
available at the offices where kept by the Administrative Agent for inspection
by the Issuer, the Guarantor and any Purchaser at any reasonable time upon
reasonable prior notice to the Administrative Agent. The Issuer and the
Guarantor may not replace any Purchaser pursuant to Section 8.06, unless, with
respect to any Notes held by such Purchaser, the requirements of Section
10.06(c) have been satisfied.
(f) Certain Additional Restrictions on Transfer. The parties
hereto acknowledge that the Notes and any interests therein (each participation
or other interest in a Note, a "NOTE INTEREST") are not and are not intended to
be "securities" as defined in the Securities Act, and
60
that the issuance, sale and transfer of the Notes and Note Interests are not
intended to be subject to the provisions governing the issuance, sale and
transfer of "securities" thereunder. Notwithstanding the foregoing, the
Purchasers (including each Assignee and including, for this purpose, each
Participant and each transferee of a Purchaser's, or Participant's interest in a
Note, by its acceptance of such Note or interest therein) (each, for purposes of
this Section 10.06(f) only, an "INTERESTHOLDER") hereby agree to the additional
restrictions on transfer with respect to the Notes and Note Interests, without
regard to whether the Notes or any Note Interests are "securities" as so
defined.
(i) Each Interestholder understands that the Notes are
being offered only in a transaction not involving any public offering
within the meaning of the Securities Act, and that, if in the future
such Interestholder decides to resell, pledge or otherwise transfer any
of the Notes (or interests therein), such Notes (or interests therein)
may be resold, pledged or transferred in compliance with this Agreement
and only to the Issuer thereof or pursuant to an exemption from, or
otherwise in compliance with, applicable securities laws.
(ii) Each Interestholder may hold its interests in any
Note through Euroclear, Clearstream or another depository; provided no
such Interestholder may sell any participations in the interest so held
through a depository. It is acknowledged that neither Euroclear nor
Clearstream will undertake to enforce the restrictions on transfer
contained in this Section 10.06(f). Each Purchaser understands that the
Notes will, unless otherwise agreed by the Issuer and the
Interestholder thereof, bear a legend to the following effect:
THE INTERESTHOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES FOR
THE BENEFIT OF THE ISSUER THAT THIS NOTE MAY NOT BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE
TRANSFER RESTRICTIONS CONTAINED IN THE NOTE PURCHASE FACILITY
AGREEMENT DATED AS OF AUGUST 10, 2001 AMONG TNL PCS S.A., TELE
NORTE LESTE PARTICIPACOES S.A. AND THE PURCHASERS AND AGENTS
REFERRED TO THEREIN, AS AMENDED FROM TIME TO TIME. WITHOUT
LIMITATION OF THE FOREGOING, THE INTERESTHOLDER HEREOF
ACKNOWLEDGES AND UNDERSTANDS THAT THIS NOTE IS NOT BEING
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED, OR OTHER APPLICABLE SECURITIES LAWS.
(iii) Each Interestholder (i) represents that it is
acquiring its Notes (or participations therein) solely for financing or
investment purposes and not with a view toward, or for sale in
connection with, any distribution thereof in contravention of
applicable securities laws, has received and reviewed such information
as it deems necessary to evaluate the merits and risks of its
investment in the Notes, is an "accredited investor" within the meaning
of Rule 501(a) under the Securities Act and has such knowledge and
experience in financial and business matters as to be capable of
evaluating the merits and risks of its investment in the Notes,
including a complete loss of its investment and (ii) agrees that it
will not solicit offers for, or offer to sell, the Notes or
participations therein, by any form of general solicitation or general
advertising (as those terms are used in Regulation D under the
Securities Act) or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act or any other
61
securities law. Notwithstanding the above, each party hereto hereby
acknowledges that ABN AMRO Bank N.V. (as the Initial Purchaser) may
participate interests in the Notes to Tranche A Participants, Tranche B
Participants, Tranche C Participants and Tranche D Participants.
(g) Participation Agreements. Each of the Issuer and the Guarantor
and each Agent hereby acknowledges receipt of (i) the Tranche A Participation
Agreements and the rights and responsibilities granted or assumed by ABN AMRO
Bank N.V., the Tranche A Participants and the other parties thereto, (ii) the
Tranche B Participation Agreements and the rights and responsibilities granted
or assumed by ABN AMRO Bank N.V., the Tranche B Participants and the other
parties thereto, (iii) the Tranche C Participation Agreement and the rights and
responsibilities granted or assumed by ABN AMRO Bank N.V., the Tranche C
Participants and the other parties thereto and (iv) the Tranche D Participation
Agreement and the rights and responsibilities granted or assumed by ABN AMRO
Bank N.V., the Tranche D Participants and the other parties thereto.
(h) Conversion of Tranche D Participation to Direct Tranche D
Note. Each Tranche D Lender holding a Tranche D Participation shall have a one
time right, on ten Business Days' prior written notice to the Administrative
Agent and the Initial Purchaser, to elect to either (i) convert such Tranche D
Participation (held through a Tranche D Participation Agreement) into a direct
interest in its applicable Tranche D Note or (ii) convert its direct interest in
its applicable Tranche D Note into a Tranche D Participation (held through a
Tranche D Participation Agreement). In connection with any such election, such
Tranche D Lender shall pay all out-of-pocket expenses of the Administrative
Agent and the Initial Purchaser in effecting such conversion (including all
reasonable fees and disbursements of counsel) up to a limit of $20,000, it being
understood that any expenses in excess thereof shall be paid by the Issuer
pursuant to Section 10.03. The Issuer and the Guarantor agree to cooperate
reasonably with the Administrative Agent, the Initial Purchaser and such Tranche
D Lender in effecting such conversion, including entering into any changes to
the Collateral Documents as may be necessary in connection therewith.
Section 10.07 No Reliance on Margin Stock. Each of the Purchasers
represents to the Administrative Agent and each of the other Purchasers that it
in good faith is not relying upon any "margin stock" (as defined in Regulation
U) as collateral in the extension or maintenance of the credit provided for in
this Agreement.
Section 10.08 Governing Law; Limited Submission to Jurisdiction;
Limited Waiver of Immunity.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York. Each of the parties hereto
hereby submits to the nonexclusive jurisdiction of the United States District
Court for the Southern District of New York and of any New York State court
sitting in New York City solely for purposes of resolving any disputes arising
out of this Agreement or any other Financing Document. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court
62
and any claim that any such proceeding brought in such a court has been brought
in an inconvenient forum.
(b) Notwithstanding the foregoing, except as set forth in Section
10.12, nothing in this Section 10.08 shall constitute a waiver by any party of
any substantive or procedural right or defense to any suit, action or proceeding
not brought under this Section 10.08, and no party shall argue or assert in any
forum that any agreement by a party not to assert or to waive any substantive or
procedural right or defense under this Section 10.08 constitutes an agreement
not to assert or to waive any substantive or procedural right or defense in any
such other suit, action or proceeding.
(c) The provisions of this Section 10.08 are for the sole and
exclusive benefit of the parties hereto (including their respective successors
and assigns as and to the extent provided for in this Agreement); and no term or
provision hereof shall be construed to confer a benefit upon, or grant a right
or privilege to, any other Person.
Section 10.09 Counterparts; Integration; Effectiveness. This
Agreement may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument. This Agreement constitutes the entire agreement and
understanding among the parties hereto and supersedes any and all prior
agreements and understandings, oral or written, relating to the subject matter
hereof. This Agreement shall become effective when the Administrative Agent has
received, from each of the parties listed on the signature pages hereof, a
counterpart hereof signed by such party or facsimile or other written
confirmation satisfactory to the Administrative Agent confirming that such party
has signed a counterpart hereof.
Section 10.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
BROUGHT UNDER SECTION 10.08(a) HEREOF.
Section 10.11 Appointment of Agent for Service of Process. (a) Each
of the Issuer and the Guarantor agrees that it shall, at all times while this
Agreement remains in effect, maintain an agent for service of process in the
Borough of Manhattan, New York City, State of New York. Each of the Issuer and
the Guarantor hereby initially designates, appoints, authorizes and empowers as
its agent for service of process, CT Corporation System (the "PROCESS AGENT") at
its offices currently located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ to
receive for and on behalf of the Issuer and the Guarantor service of any and all
process, notices or other documents that may be served in any suit, action or
proceeding relating to the Financing Documents in any New York State or Federal
court sitting in The State of New York. Prior to terminating any appointment of
any Process Agent appointed hereunder, the Issuer and the Guarantor shall ensure
that a replacement Process Agent meeting the requirements set forth herein shall
have accepted its appointment and evidence thereof shall have been provided to
the Administrative Agent.
(b) In lieu of service upon its agent, each of the Issuer and the
Guarantor consents to process being served in any suit, action or proceeding
relating hereto by mailing a copy thereof by overnight courier, postage prepaid,
to its address designated pursuant to Section 10.01. Each
63
of the Issuer and the Guarantor agrees that such service (1) shall be deemed in
every respect effective service of process upon it in any such suit, action or
proceeding and (2) shall, to the fullest extent permitted by law, be taken and
held to be valid personal service upon and personal delivery to it.
(c) Nothing in this Section shall affect the right of any party
hereto to serve process in any manner permitted by law, or limit any right that
any party hereto may have to bring proceedings against any other party hereto in
the courts of any jurisdiction or to enforce in any lawful manner a judgment
obtained in one jurisdiction in any other jurisdiction.
Section 10.12 Waiver of Immunity. To the extent that any party has
or hereafter may be entitled to claim or may acquire, for itself or any of its
assets, any immunity from suit, jurisdiction of any court or from any legal
process (whether through service or notice, attachment prior to judgment,
attachment in aid of execution, or otherwise) with respect to itself or its
property, it hereby irrevocably waives such immunity in respect of its
obligations hereunder to the extent permitted by applicable law and, without
limiting the generality of the foregoing, agrees that the waivers set forth in
this Section shall be effective to the fullest extent now or hereafter permitted
under the Foreign Sovereign Immunities Act of 1976 of the United States of
America and are intended to be irrevocable for purposes of such Act.
Section 10.13 Judgment Currency. If for the purposes of enforcing
the obligations of the Issuer or the Guarantor hereunder it is necessary to
convert a sum due from such Person in Dollars into another currency, the parties
hereto agree, to the fullest extent that they may effectively do so under
applicable laws, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Administrative Agent and the
Purchasers could purchase Dollars with such currency at or about 11:00 A.M. (New
York City time) on the Business Day preceding that on which final judgment is
given. The obligations in respect of any sum due to the Administrative Agent and
the Purchasers hereunder shall, notwithstanding any adjudication expressed in a
currency other than Dollars, be discharged only to the extent that on the
Business Day following receipt by the Administrative Agent and the Purchasers of
any sum adjudged to be so due in such other currency the Administrative Agent
and the Purchasers may in accordance with normal banking procedures purchase
Dollars with such other currency; if the amount of Dollars so purchased is less
than the sum originally due to the Administrative Agent and the Purchasers in
Dollars, each of the Issuer and the Guarantor agrees, to the fullest extent that
it may effectively do so under applicable law, as a separate obligation and
notwithstanding any such adjudication, to indemnify the Administrative Agent and
the Purchasers against such loss, and if the amount of Dollars so purchased
exceeds the sum originally due to the Administrative Agent and the Purchasers,
the Administrative Agent or such Purchaser, as the case may be, shall remit such
excess to the Issuer or the Guarantor, as applicable.
Section 10.14 English Language. Any translation of this Agreement
or any Note into another language shall have no interpretive effect. All
documents or notices to be delivered pursuant to or in connection with this
Agreement shall be in the English language, or, if any such document or notice
is not in the English language, accompanied by an English translation thereof,
and the English language version of any such document or notice shall control
for purposes hereof.
64
Section 10.15 Confidentiality. Each Agent, Purchaser and
participant (by its acceptance of a participation in any Note) agrees to use
commercially reasonable efforts to keep any information delivered or made
available by the Issuer and the Guarantor pursuant to this Agreement or any
other Financing Document confidential from anyone other than persons employed or
retained by such Agent, Purchaser or participant who are engaged in evaluating,
approving, structuring or administering the credit facility contemplated hereby
and by the other Financing Documents; provided that nothing herein shall prevent
any Agent, participant or Purchaser from disclosing such information (a) to any
other Agent, Purchaser or participant, (b) to any other Person if reasonably
necessary or desirable to the administration of the credit facility contemplated
hereby, (c) upon the order of any court or administrative agency, provided that
the party under such order shall make reasonable efforts to notify either the
Issuer or the Guarantor, as the case may be, of such order, (d) upon the request
or demand of any regulatory agency or authority, (e) which had been publicly
disclosed other than as a result of a disclosure by any Agent, Purchaser or
participant prohibited by this Agreement, (f) in connection with any litigation
or proceeding to which any Agent, Purchaser or participant, its respective
Subsidiaries or Parent may be a party, (g) to the extent necessary in connection
with the exercise of any remedy hereunder, (h) to such Purchaser's, Agent's or
participant's legal counsel and independent auditors, (i) to any direct or
indirect contractual counterparty in swap agreements or such contractual
counterparty's professional advisor and (j) to any provider of any Required
Political Risk Policy. The right of any Purchaser (other than ABN AMRO Bank N.V.
with respect to disclosures to Tranche A Participants, Tranche B Participants,
Tranche C Participants and Tranche D Participants) to disclose any such
information to any Assignee or participant is subject to the execution and
delivery by such Person of a written agreement in favor of the Issuer and the
Guarantor containing provisions substantially similar to those contained in this
Section (and requiring such Person to be bound by such provisions).
Section 10.16 Survival. All covenants, agreements, representations
and warranties made by the Issuer and the Guarantor herein and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of this Agreement and the
Purchase of the Notes, regardless of any investigation made by any such other
party or on its behalf and notwithstanding that any Agent or any Purchaser may
have notice or knowledge of any Default or incorrect representation or warranty
at the time any credit is extended hereunder or under any other Financing
Document, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Note or any fee or any other amount payable
under this Agreement is outstanding and unpaid and so long as the Commitments
have not expired or terminated. The provisions of Sections 2.09, 8.03, 8.04,
10.03 , 10.04 and Article 7 shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the
repayment of the Notes, the expiration or termination of the Commitments, the
resignation or removal of any Agent or the termination of this Agreement or any
provision hereof.
Section 10.17 Cooperation. If the Issuer so requests, the parties
hereto agree to negotiate in good faith in order to consider certain alternative
structures with respect to the Facility in order to improve the economic costs
of the Facility for the Issuer. Such restructuring may include, among other
components, (1) the substitution of the Issuer for a wholly-owned
special-purpose Subsidiary of the Issuer incorporated outside of Brazil, (2) the
guarantee of such
65
Subsidiary's obligations by the Issuer and the Guarantor, (3) appropriate
collateral security being granted by such Subsidiary and the Issuer to the
Purchasers, including such Subsidiary's share capital, and (4) the entering into
of certain cross-currency swaps by such Subsidiary. Any such restructuring will
not affect any Notes issued prior to the effectiveness of such restructuring,
and no Purchaser shall be required to approve any such restructuring with
respect to such Purchaser's Commitments or Tranche Interests.
Section 10.18 Severability. In the event any provision of this
Agreement shall be held invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions hereof will not in any
way be affected or impaired thereby, and the parties hereto will negotiate in
good faith to amend this Agreement to replace the invalid, illegal or
unenforceable provision with a valid provision that will approximate the intent
of the replaced provision.
66
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
TNL PCS S.A., as Issuer
By: ______________________________________
Name: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Attorney-in-fact
By: ______________________________________
Name: Tarso ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Attorney-in-fact
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇.▇▇▇-▇▇▇ ▇▇▇▇▇▇
Telephone: ▇▇-▇▇-▇▇▇▇-▇▇▇▇
Facsimile: ▇▇-▇▇-▇▇▇▇-▇▇▇▇
E-mail: ▇▇▇@▇▇▇▇▇▇▇.▇▇▇.▇▇
Attention: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
State of New York )
County of New York ) ss.:
Sworn before me this ___ day of August 2001.
________________________________
Notary Public
S-1
TELE NORTE LESTE PARTICIPACOES
S.A., as Guarantor
By: ______________________________________
Name: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Attorney-in-fact
By: ______________________________________
Name: Tarso ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Attorney-in-fact
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇.▇▇▇-▇▇▇ ▇▇▇▇▇▇
Telephone: ▇▇-▇▇-▇▇▇▇-▇▇▇▇
Facsimile: ▇▇-▇▇-▇▇▇▇-▇▇▇▇
E-mail: ▇▇▇@▇▇▇▇▇▇▇.▇▇▇.▇▇
Attention: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
State of New York )
County of New York ) ss.:
Sworn before me this ___ day of August 2001.
________________________________
Notary Public
S-2
ABN AMRO BANK N.V.,
as Initial Purchaser, Administrative
Agent, Tranche A Participation Agent,
Tranche B Participation Agent, Tranche C
Participation Agent, U.S. Collateral Agent
and Book Runner
By: ______________________________________
Name:
Title:
By: ______________________________________
Name:
Title:
Address:
Telephone:
Facsimile:
E-mail:
Attention:
______________________________________
Witness
______________________________________
Witness
State of New York )
County of New York ) ss.:
Sworn before me this ___ day of August 2001.
________________________________
Notary Public
S-3
BANCO ABN AMRO REAL S.A.,
as Brazilian Collateral Agent
By: ______________________________________
Name:
Title:
By: ______________________________________
Name:
Title:
Address: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇-▇▇▇
Telephone: ▇▇-▇▇-▇▇▇▇-▇▇▇▇
Facsimile: ▇▇-▇▇-▇▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
State of New York )
County of New York ) ss.:
Sworn before me this ___ day of August 2001.
________________________________
Notary Public
S-4
CHASE TRUST BANK,
as Principal Paying Agent
By: ______________________________________
Name:
Title:
Address:
Telephone:
Facsimile:
E-mail:
Attention:
State of New York )
County of New York ) ss.:
Sworn before me this ___ day of August 2001.
________________________________
Notary Public
S-5
NOKIA OYJ,
as Tranche D Lender
By: ______________________________________
Name: Esa Kaunistola
Title: Senior Legal Counsel
Address: ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇-▇▇▇▇▇ ▇▇▇▇▇
Telephone:▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
E-mail: ▇▇▇.▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
Attention: Esa Kaunistola
State of New York )
County of New York ) ss.:
Sworn before me this ___ day of July 2001.
________________________________
Notary Public
S-6
SIEMENS AG,
as Tranche D Lender
By: ______________________________________
Name:
Title:
By: ______________________________________
Name:
Title:
Address: SIEMENS ▇▇
▇▇▇ ▇▇▇ ▇ ▇▇▇
▇-▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇
Telephone: ▇▇-▇▇-▇▇▇-▇▇▇▇▇
Facsimile: 49-89-722-41225
Attention: ▇▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Account # SIEMENS ▇▇
▇▇▇▇▇ Manhattan Bank, New York
SWIFT CODE: CHAUSUS 33
Account No.: ▇▇▇-▇▇▇▇-▇▇▇
Reference: for ICM, ARE 7277,
Project "Telemar"
State of New York )
County of New York ) ss.:
Sworn before me this ___ day of August 2001.
________________________________
Notary Public
S-7
ELECTRO BANQUE S.A.,
as Tranche D Lender
By: ______________________________________
Name:
Title:
Address: ELECTRO BANQUE
▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇
Telephone: ▇▇-▇-▇▇▇▇-▇▇▇▇
Facsmilie: ▇▇-▇-▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Account #: Alcatel
ABN AMRO Bank New York
Account No.: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
SWIFT CODE: ▇▇▇▇▇▇▇▇▇▇▇
State of New York )
County of New York ) ss.:
Sworn before me this ___ day of August 2001.
________________________________
Notary Public
S-8
SCHEDULE 1
BRAZILIAN PERMITTED INVESTMENTS - BANKS
LOCAL BANKS
Banco ABC Brasil S.A.
Banco Alfa S.A.
Banco America do Sul S.A.
Banco Barclays e ▇▇▇▇▇▇▇ ▇.▇.
Banco BBA Creditanstalt S.A.
Banco BBM S.A.
Banco Bilbao Vizcaya Argentaria S.A.
Banco Boavista InterAtlantico S.A.
Banco Bozano ▇▇▇▇▇▇▇▇ ▇.▇.
Banco Bradesco S.A.
Banco Brascan
Banco CCF Brasil S.A.
Banco Chase Manhattan S.A.
Banco Citibank S.A.
Banco Credibanco S.A.
Banco de Credito Nacional S.A.
Banco do Brasil S.A.
Banco Europeu para America Latina S.A.
Banco Industrial e Comercial S.A.
Banco Inter American Express S.A.
Banco Itau S.A.
Banco Mercantil de Sao Paulo S.A.
Banco Panamericano S.A.
Banco Real ABN AMRO S.A.
Banco Safra S.A.
Banco Santander Brasil S.A.
Banco ▇▇▇▇▇▇
Banco Sudameris Brasil S.A.
Banco Sumitomo Brasileiro
Banco Unibanco S.A.
Banco Votorantim S.A.
Banco Wachovia S.A.
Banespa S.A.
BankBoston
Banque Nationale de Paris Brasil
Caixa Economica Federal
Credit Suisse First Boston Garantia
Deutsche Bank ▇.▇.
▇▇▇▇▇▇▇▇ Bank Brasil S.A.
HSBC Bank Brasil S.A.
Lloyds Bank
Multi Banco S.A.
OFFSHORE BANKS
ABN-AMRO Bank N.V.
Banco Bilbao Vizcaya Argentaria, Nassau Branch
Banco Itau Europa
Bank Austria
Bank Boston
Bank of America, N.A
Bank of New York
Bankers Trust International PLC
Banque CCF
Banque Nationale de Paris
Bayerische Hypotheken und Wechsel Bank AG
Bayerische Landesbank Girozentrale
Canadian Imperial Bank
Citibank, N.A
Comerica Bank
Deutsche Bank ▇▇
▇▇▇▇▇▇▇▇ Bank
HSBC Bank
Istituto Bancario Sao Paolo di Torino
JPMorgan Securities Inc.
Lloyds Bank
Mellon Bank
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corporation
▇▇▇▇▇▇ Guaranty Trust Company of New York
Royal Bank of Scotland
Safra National Bank of New York
Sumitomo Bank
The Chase Manhattan Bank
Wachovia Bank N.A
Westdeutsche Landesbank Girozentrale
Schedule 1-2
SCHEDULE 2
TRANSACTIONS WITH AFFILIATES
NONE.
SCHEDULE 3
EXISTING LIENS
Accounts Receivable pledged as collateral in connection with Debt owed
to BNDES by each of the following Material Subsidiaries outstanding in the
following amounts as of the date this Agreement:
Telecomunicacoes do Rio de Janeiro S.A.: R$ 582,715,900
Telecomunicacoes de Minas Gerais S.A.: 209,900,615
Telecomunicacoes do Ceara S.A.: 56,418,542
Telecomunicacoes da Bahia S.A.: 109,872,782
Telecomunicacoes de Pernambuco S.A.: 119,891,048
Telecomunicacoes do Espirito Santo S.A.: 48,372,682
Telecomunicacoes do Maranhao S.A.: 30,375,709
Telecomunicacoes do Para S.A.: 72,823,291
-----------------------------------------------------------------------
Total: R$1,230,370,569
SCHEDULE 4
CONCESSION AREA
CONCESSION AREA FOR THE RENDERING OF STFC SERVICES:
Region I (in accordance with the General Granting Plan approved by Decree no.
2.534, of April 2, 1998): geographic area corresponding to the territories of
the States of Rio de Janeiro, Minas Gerais, Espirito Santo, Bahia, Sergipe,
Alagoas, Pernambuco, Paraiba, Rio Grande do Norte, Ceara, Piaui, Maranhao, Para,
Amapa, Amazonas and Roraima, Brazil.
CONCESSION AREA FOR THE RENDERING OF PCS SERVICES:
Region I (in accordance with the General Authorization Plan for the Mobile
Personal Service approved by ANATEL Resolution no. 248, of December 19, 2000):
geographic area corresponding to the territories of the States of Rio de
Janeiro, Minas Gerais, Espirito Santo, Bahia, Sergipe, Alagoas, Pernambuco,
Paraiba, Rio Grande do Norte, Ceara, Piaui, Maranhao, Para, Amapa, Amazonas and
Roraima, Brazil.
SCHEDULE 5
TRANCHE A1-C PARTICIPANTS
BANK NOTE BANK NOTE
ONE AMOUNT TWO AMOUNT
---------- ----------
TRANCHE A1
Tranche A1 Participants:
Banco Bilbao Vizcaya Argentaria, S.A. ---------- 11,458,333.33
BLAFCO - Boston Latin America Finance Company ---------- 11,458,333.33
Citibank N.A. - International Banking Facility ---------- 11,458,333.33
ING Bank N.V. - Curacao Branch 11,458,333.33 ----------
The Chase Manhattan Bank ---------- 11,458,333.33
Societe Generale, New York Branch ---------- 11,458,333.33
Wachovia Bank N.A. 11,458,333.33 ----------
ABB Structured Finance B.V. 3,333,333.34 ----------
Bayerische Landesbank Girozenrrale ---------- 10,000,000.00
Credit Agricole Indosuez ---------- 5,000,000.00
Banco Lloyds TSB S/A - Cayman Islands Branch ---------- 6,666,666.66
Tranche A1 Non-Participated Interest: ---------- 11,458,333.33
ABN AMRO Bank N.V.
TOTAL TRANCHE A1 26,250,000.00 90,416,666.64
TRANCHE A2
Tranche A2 Participants:
Banco Bilbao Vizcaya Argentaria, S.A. ---------- 11,458,333.33
BLAFCO - Boston Latin America Finance Company ---------- 11,458,333.33
Citibank N.A. - International Banking Facility ---------- 11,458,333.33
ING Bank N.V. - Curacao Branch 11,458,333.33 ----------
The Chase Manhattan Bank ---------- 11,458,333.33
Societe Generale, New York Branch ---------- 11,458,333.33
Wachovia Bank N.A. 11,458,333.33 ----------
ABB Structured Finance B.V. 3,333,333.34 ----------
Bayerische Landesbank Girozenrrale ---------- 10,000,000.00
Credit Agricole Indosuez ---------- 5,000,000.00
Banco Lloyds TSB S/A - Cayman Islands Branch ---------- 6,666,666.66
Tranche A2 Non-Participated Interest: ---------- 11,458,333.33
ABN AMRO Bank N.V.
TOTAL TRANCHE A2 26,250,000.00 90,416,666.64
BANK NOTE BANK NOTE
ONE AMOUNT TWO AMOUNT
---------- ----------
TRANCHE B1
Tranche B1 Participants:
Banco Bilbao Vizcaya Argentaria, S.A. ---------- 10,833,333.33
BLAFCO - Boston Latin America Finance Company ---------- 10,833,333.33
Citibank N.A. - International Banking Facility ---------- 10,833,333.33
ING Bank N.V. - Curacao Branch 10,833,333.33 ----------
The Chase Manhattan Bank ---------- 10,833,333.33
Societe Generale, New York Branch ---------- 10,833,333.33
Wachovia Bank N.A. 10,833,333.33 ----------
ABB Structured Finance B.V. 3,333,333.33 ----------
Safra National Bank of New York ---------- 6,666,666.67
Credit Agricole Indosuez ---------- 5,000,000.00
Fortis Banque France S.A. 5,000,000.00 ----------
Banco Lloyds TSB S/A - Cayman Islands Branch ---------- 6,666,666.67
Landesbank Schleswig-Holstein Girozentrale ---------- 3,333,333.33
Tranche B1 Non-Participated Interest: ---------- 10,833,333.33
ABN AMRO Bank N.V.
TOTAL TRANCHE B1 29,999,999.99 86,666,666.65
TRANCHE B2
Tranche B2 Participants:
Banco Bilbao Vizcaya Argentaria, S.A. ---------- 10,833,333.33
BLAFCO - Boston Latin America Finance Company ---------- 10,833,333.33
Citibank N.A. - International Banking Facility ---------- 10,833,333.33
ING Bank N.V. - Curacao Branch 10,833,333.33 ---------
The Chase Manhattan Bank ---------- 10,833,333.33
Societe Generale, New York Branch ---------- 10,833,333.33
Wachovia Bank N.A. 10,833,333.33 ----------
ABB Structured Finance B.V. 3,333,333.33 ----------
Safra National Bank of New York ---------- 6,666,666.67
Credit Agricole Indosuez ---------- 5,000,000.00
Fortis Banque France S.A. 5,000,000.00 ----------
Banco Lloyds TSB S/A - Cayman Islands Branch ---------- 6,666,666.67
Landesbank Schleswig-Holstein Girozentrale ---------- 3,333,333.33
Tranche B2 Non-Participated Interest: 10,833,333.33
ABN AMRO Bank N.V.
TOTAL TRANCHE B2 29,999,999.99 86,666,666.65
Schedule 1-2
BANK NOTE BANK NOTE
ONE AMOUNT TWO AMOUNT
---------- ----------
TRANCHE B3
Tranche B3 Participants:
Banco Bilbao Vizcaya Argentaria, S.A. ---------- 10,833,333.33
BLAFCO - Boston Latin America Finance Company ---------- 10,833,333.33
Citibank N.A. - International Banking Facility ---------- 10,833,333.33
ING Bank N.V. - Curacao Branch 10,833,333.33 ----------
The Chase Manhattan Bank ---------- 10,833,333.33
Societe Generale, New York Branch ---------- 10,833,333.33
Wachovia Bank N.A. 10,833,333.33 ----------
ABB Structured Finance B.V. 3,333,333.33 ----------
Safra National Bank of New York ---------- 6,666,666.66
Credit Agricole Indosuez ---------- 5,000,000.00
Fortis Banque France S.A. 5,000,000.00 ----------
Banco Lloyds TSB S/A - Cayman Islands Branch ---------- 6,666,666.67
Landesbank Schleswig-Holstein Girozentrale ---------- 3,333,333.34
Tranche B3 Non-Participated Interest 10,833,333.33
ABN AMRO Bank N.V.
TOTAL TRANCHE B3 29,999,999.99 86,666,666.65
TRANCHE C
Tranche C Participants:
Banco Bilbao Vizcaya Argentaria, S.A. ---------- 7,083,333.35
BLAFCO - Boston Latin America Finance Company ---------- 7,083,333.35
Citibank N.A. - International Banking Facility ---------- 7,083,333.35
ING Bank N.V. - Curacao Branch 7,083,333.35 ----------
The Chase Manhattan Bank ---------- 7,083,333.35
Societe Generale, New York Branch ---------- 7,083,333.35
Wachovia Bank N.A. 7,083,333.35 ----------
ABB Structured Finance B.V. 3,333,333.33 ----------
Credit Agricole Indosuez ---------- 5,000,000.00
Credit Suisse First Boston (Bahamas) Ltd. ---------- 20,000,000.00
Banco Lloyds TSB S/A - Cayman Islands Branch ---------- 6,666,666.67
General Electric Capital Corporation ---------- 25,000,000.00
Tranche C Non-Participated Interest:
ABN AMRO Bank N.V. 7,083,333.35
TOTAL TRANCHE C 17,500,000.03 99,166,666.77
Schedule 1-3
SCHEDULE 6
LIST OF SUBSIDIARIES
Telecomunicacoes do Rio de Janeiro S.A.
Telecomunicacoes de Minas Gerais S.A.
Telecomunicacoes do Espirito Santo S.A.
Telecomunicacoes da Bahia S.A.
Telecomunicacoes de Sergipe S.A.
Telecomunicacoes de Alagoas S.A.
Telecomunicacoes de Pernambuco S.A.
Telecomunicacoes da Paraiba S.A.
Telecomunicacoes do Rio Grande do Norte S.A.
Telecomunicacoes do Ceara S.A.
Telecomunicacoes do Piaui S.A.
Telecomunicacoes do Maranhao S.A.
Telecomunicacoes do Para S.A.
Telecomunicacoes do Amapa S.A.
Telecomunicacoes do Amazonas S.A.
Telecomunicacoes de Roraima S.A.
SCHEDULE 7
TERMS OF SUBORDINATION
This schedule sets forth the terms and conditions of the subordination
of intercompany Debt incurred by the Issuer or the Guarantor as permitted by the
Agreement. Provisions to this effect shall be included or incorporated in all
agreements and instruments governing and evidencing intercompany Debt of the
Issuer and the Guarantor.
1. General. To the extent and in the manner set forth herein, at any
time when any Default (with respect to Debt owed by the Issuer) or Event of
Default (with respect to Debt owed by the Guarantor) shall have occurred and be
continuing, the payment of the principal of and interest on any Debt of (i) the
Guarantor owed to any Subsidiary (other than the Issuer) of either the Issuer or
the Guarantor or (ii) the Issuer owed to any Subsidiary of either the Issuer or
the Guarantor (collectively, "Subordinated Debt" and the Guarantor or the
Issuer, as obligor on the Subordinated Debt, the "Debtor") and other amounts
payable on or in respect thereof (whether in respect of principal, interest,
premium, fees, indemnities, commissions or otherwise) shall be absolutely and
unconditionally postponed and expressly made subordinate and subject to the
prior payment in full of the Notes and all other amounts payable to the
Purchasers pursuant to this Agreement and the other Financing Documents
(collectively, the "Senior Debt Obligations"). Each holder of Subordinated Debt
(each, a "Subordinated Lender") shall agree that, at any time when any Default
(with respect to Debt owed by the Issuer) or Event of Default (with respect to
Debt owed by the Guarantor) shall have occurred and be continuing, it will not
ask, demand, ▇▇▇ for, take or receive from the Debtor, by set-off or in any
other manner, or retain, payment (in whole or in part) of the Subordinated Debt,
or any security therefor, unless and until all of the Senior Debt Obligations
have been fully and finally paid, satisfied and discharged. Each Subordinated
Lender shall direct the Debtor to make, and the Debtor shall make, such prior
payment of the Senior Debt Obligations.
2. No Acceleration of Subordinated Debt. Each Subordinated Lender shall
agree that, until the indefeasible payment in full of the Senior Debt
Obligations, neither the principal of nor interest on any Subordinated Debt
shall be accelerated due to any default or otherwise.
3. No Proceedings Against Debtor; No Collateral. Each Subordinated
Lender shall agree that, until the indefeasible payment in full of the Senior
Debt Obligations, it will not, whether or not any default shall exist under any
Transaction Document, (a) commence any proceeding against the Debtor in
bankruptcy, insolvency or receivership, (b) take any collateral security,
guaranty or other assurance for the Subordinated Debt or (c) otherwise exercise
any remedy for the recovery of any Subordinated Debt.
4. Payment of Amounts Received by Subordinated Lenders. Each
Subordinated Lender shall agree that, at any time when any Default (with respect
to Debt owed by the Issuer) or Event of Default (with respect to Debt owed by
the Guarantor) shall have occurred and be continuing, in the event that it
receives any payment or distribution of assets by or on behalf of the Debtor on
account or in respect of the Subordinated Debt, the Subordinated Lender shall
hold such assets as property of the Purchasers and for their benefit and,
promptly after receipt thereof, shall pay over or deliver to the Administrative
Agent such distribution or payment in precisely the form
received (except for the endorsement or assignment by the Subordinated Lender
where necessary) for application in accordance with the Financing Documents. In
the event of the failure of the Subordinated Lender to make any such endorsement
or assignment, the Administrative Agent shall be irrevocably authorized and
empowered by and on behalf of each Subordinated Lender to effect the same.
5. Payment Upon Dissolution, Etc. Each Subordinated Lender shall agree
that, in the event of (a) any insolvency or bankruptcy case, or proceeding,
arrangement, reorganization or similar event in connection therewith, relative
to the Debtor and its creditors as such, or to its assets, or (b) any
liquidation, dissolution or other winding up of the Debtor, or any equivalent or
analogous procedure under the laws of any jurisdiction in which the Debtor is
incorporated, domiciled or resident or carries on business or has assets, or (c)
any assignment for the benefit of creditors or other marshaling of assets and
liabilities of the Debtor, the Purchasers shall be entitled to receive payment
in full of all amounts due or to become due on or in respect of all Senior Debt
Obligations before any Subordinated Lender shall be entitled to receive any
payment on account of the Subordinated Debt and, to that end, any payment or
distribution of any kind or character which may be payable or deliverable in
respect of the Subordinated Debt in any such event shall instead be paid or
delivered to the Purchasers or their representatives for application to the
Senior Debt Obligations, whether or not then due, until such time as the Senior
Debt Obligations shall have been fully and indefeasibly paid and satisfied in
accordance with the Financing Documents. Each Subordinated Lender additionally
agrees to instruct the trustee in bankruptcy, liquidator, assignee or other
person distributing the assets of the Debtor or their proceeds to pay
distributions on the Subordinated Debt to the Purchasers until the Senior Debt
is indefeasibly paid in full.
6. Authorizations to the Administrative Agent. Each Subordinated Lender,
at any time when any Default (with respect to Debt owed by the Issuer) or Event
of Default (with respect to Debt owed by the Guarantor) shall have occurred and
be continuing, (a) shall irrevocably authorize and empower (without imposing any
obligations on) the Administrative Agent to demand, ▇▇▇ for, collect, receive
and grant receipt for all payments and distributions on or in respect of its
Subordinated Debt which are required to be paid or delivered to the Purchasers
as provided herein, and to file and prove all claims therefor and take all such
other action, in the name of the Subordinated Lender or otherwise, as the
Administrative Agent may determine to be necessary or desirable for the
enforcement of these subordination in accordance with the Financing Documents,
(b) shall irrevocably authorize and empower (without imposing any obligation)
the Administrative Agent to vote the Subordinated Debt (including, without
limitation, voting the Subordinated Debt in favor of or in opposition to any
matter which may come before any meeting of creditors of the Debtor generally or
in connection with, or in anticipation of, any insolvency, liquidation,
reorganization, "concordata," or bankruptcy case or proceeding, or any
proceeding under any laws relating to the relief of debtors, readjustment of
indebtedness, arrangements, compositions or extensions relative to the Debtor)
in such manner as the Administrative Agent shall instruct or otherwise in
accordance with the Financing Documents, and (c) shall agree to execute and
deliver to the Administrative Agent all such further instruments confirming the
above authorization, and all such powers of attorney, proofs of claim,
assignments of claim and other instruments, and to take all such other action,
as may be requested by it in order to enable it to enforce all claims upon or in
respect of the Subordinated Debt.
7-2
7. No Waiver; Modification to Senior Debt. Each Subordinated Lender
shall agree that no failure on the part of the Purchasers, acting through their
representatives or the Administrative Agent, and no delay in exercising, any
right, remedy or power hereunder shall operate as a waiver thereof by them, nor
shall any single or partial exercise of any right, remedy or power hereunder
preclude any other or future exercise by the Administrative Agent or the
Purchasers or their representatives of any other right, remedy or power. Each
and every right, remedy and power granted to the Purchasers and their respective
representatives, or allowed them by applicable law or other agreement shall be
cumulative and not exclusive, and may be exercised by the Administrative Agent
or their respective representatives, from time to time.
Each Subordinated Lender shall agree that, at any time, without the consent of
or notice to such Subordinated Lender, without incurring responsibility or
liability to such Subordinated Lender and without impairing or releasing the
subordination provided herein or the obligations of the Subordinated Lenders
hereunder, the Purchasers in accordance with the Financing Documents, may, to
the extent otherwise provided by applicable law, do any one or more of the
following: (a) change the manner, place or terms of payment of or extend the
time of payment of, or renew or alter, Senior Debt Obligations or any collateral
security or Guaranty therefor, or otherwise amend or supplement in any manner
the Senior Debt Obligations or any instruments evidencing the same or any
Financing Document; (b) sell, exchange, release or otherwise deal with any
property pledged, mortgaged or otherwise securing the Senior Debt Obligations;
(c) release any Person liable in any manner for the Senior Debt Obligations; and
(d) exercise or refrain from exercising any rights against the Debtor and any
other Person; and (e) assign and transfer the Senior Debt Obligations in
accordance with the Financing Agreement.
8. Subrogation. Each Subordinated Lender shall agree that, subject to
the indefeasible payment in full of all Senior Debt Obligations, it shall be
subrogated to the rights of the Purchasers to receive distribution of assets of
the Debtor, or payments by or on behalf of the Debtor, made on the Senior Debt
Obligations, until Subordinated Debt shall be paid in full. For purposes of such
subrogation, no payments or distributions to the Purchasers by the Subordinated
Lenders pursuant to the provisions hereof of any cash, property or securities to
which the Subordinated Lenders would be entitled except for the provisions
hereof shall, as among the Debtor, its creditors other than the Purchasers and
the Subordinated Lenders, be deemed to be a payment or distribution by the
Debtor on account of the Senior Debt Obligations.
9. Benefit of Subordination Provisions. Nothing contained herein shall
impair, as among the Debtor, its creditors other than the Purchasers and the
Subordinated Lenders, the obligation of the Debtor, to pay the principal of and
interest on the Subordinated Debt as and when the same shall become due and
payable in accordance with the terms thereof or affect the relative rights
against the Debtor of the Subordinated Lenders and creditors of the Debtor other
than the Purchasers.
10. Immediate Recourse. Each Subordinated Lender shall waive any right it
may have of first requiring the Purchasers (or any agent on their behalf) to
proceed against or enforce any other right or security or claim payment from any
Person before claiming the benefit of these terms and conditions of Subordinated
Debt. The Purchasers (or any agent on their behalf) may refrain from applying or
enforcing any money, rights or security.
11. Further Assurances. Each Subordinated Lender shall agree that it
will, at its own cost, take any further action as the Administrative Agent may
reasonably request in order to carry out
7-3
more fully the intent and purpose of these subordination provisions.
Additionally, if the Purchasers are not entitled to do any of the things
provided for in these subordination provisions, each Subordinated Lender agrees
to do so on their behalf, in good time, and as directed by the Administrative
Agent.
7-4
SCHEDULE 8
LIST OF MATERIAL SUBSIDIARIES
AMOUNTS IN BRL MILLION
-------------------------------------------------------------------------------------------------------------------
Dated as of June 30, 2001 TRJ TMG TES TBA TPE
-------------------------------------------------------------------------------------------------------------------
Net Revenues 1,359,959 28.25% 1,080,596 22.45% 218,199 4.53% 542,410 11.27% 326,824 6.79%
Total Assets 6,210,826 29.81% 3,761,557 18.06% 749,317 3.60% 2,001,662 9.61% 1,311,089 6.29%
-------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
Dated as of June 30,2001 TCE TMA TPA TNL - Consolidated
----------------------------------------------------------------------------------------------------
Net Revenues 267,294 5.55% 123,566 2.57% 198,130 4.12% R$4,813,419
Total Assets 1,167,343 5.60% 635,410 3.05% 967,082 4.64% R$20,832,951
----------------------------------------------------------------------------------------------------
---------------------------------------------------------
Dated as of June 30, 2001 MATERIAL SUBSIDIARIES/TOTAL
---------------------------------------------------------
Net Revenues R$4,116,978 85.53%
Total Assets R$16,804,286 80.66%
---------------------------------------------------------
MATERIAL SUBSIDIARIES: TRJ Telecomunicacoes do Rio de Janeiro S/A
TMG Telecomunicacoes de Minas Gerias S/A
TES Telecomunicacoes do Espirito Santo S/A
TBA Telecomunicacoes da Bahia S/A
TPE Telecomunicacoes de Pernambuco S/A
TCE Telecomunicacoes do Ceara S/A
TMA Telecomunicacoes do Maranhao S/A
TPA Telecomunicacoes do Para S/A
APPENDIX 1
DEFINITIONS
"ABN AMRO" means ABN AMRO Bank N.V.
"ACTUAL CONTRACT VALUE" means, with respect to the Supply Contract of
each Supplier, as of any date, such Supplier's aggregate Contract Amount and
Related Cost Amount funded as of such date pursuant to Purchases hereunder.
"ADMINISTRATIVE AGENT" means ABN AMRO Bank N.V. in its capacity as
administrative agent for the Purchasers hereunder.
"ADMINISTRATIVE AGENT'S JURISDICTION" means Amsterdam, the Netherlands,
or New York, New York or such other jurisdiction as the Administrative Agent may
designate by notice to the Issuer, the Guarantor, the other Agents and the
Purchasers, provided that no such designation may occur in the event that such
designation would be materially disadvantageous to the Purchasers.
"AFFECTED PURCHASER" has the meaning set forth in Section 8.06.
"AFFILIATE" means, with respect to a specified Person (i) another
Person that directly, or indirectly through one or more intermediaries, controls
the specified Person (a "CONTROLLING PERSON") or (ii) another Person which is
controlled by or is under common control with a Controlling Person. As used in
this definition, the term "CONTROL" means possession, directly or indirectly, of
the power to vote 20% or more of any class of voting securities of a Person or
to direct or cause the direction of the management or policies of a Person,
whether through the ownership of voting securities, by contract or otherwise,
provided, however, that, with respect to Telemar Participacoes S.A., the term
"CONTROL" shall be deemed to apply to any Person possessing, directly or
indirectly, 5% or more of the voting shares thereof.
"AGENTS" means the Administrative Agent, the Brazilian Collateral
Agent, the U.S. Collateral Agent, the Principal Paying Agent, the Participation
Agents and the Book Runner, collectively.
"AGGREGATE BANK PORTION" means, with respect to each Supplier's
Aggregate Financing, the portion thereof being funded through Tranches A1
through C of this Facility, in the following respective amounts:
Nokia Lenders: $410,000,000
Siemens Lenders: $155,000,000
Alcatel Lenders: $135,000,000
"AGGREGATE FINANCING" means, with respect to each Supplier, a financing
arrangement encompassed by this Facility in respect of the Maximum Contract
Value and the Working Capital Amount of such Supplier in the following
respective amounts:
Nokia Supplier: $835,000,000
Siemens Supplier: $315,000,000
Alcatel Supplier: $275,000,000
"AGGREGATE PRI PAYMENT" means the aggregate principal amount under the
Notes paid by the Political Risk Insurers to the Tranche B Insureds under the
terms of each Required Political Risk Policy.
"AGGREGATE TRANCHE D ALLOCATION AMOUNT" means, with respect to any
Tranche D Participant, as of any date, the sum of all Tranche D Allocation
Amounts with respect to all Tranche D Notes attributable to such Tranche D
Participant as of such date.
"AGGREGATE TRANCHE D COMMITMENT" has the meaning set forth in Section
2.01(a).
"AGREEMENT" has the meaning set forth in the preamble hereto.
"ALCATEL" means Alcatel, a corporation organized under the laws of
France.
"ALCATEL LENDERS" means, collectively, the Initial Alcatel Lenders and
all Assignees who acquire an interest in the Tranche D - Alcatel Note in
accordance with the terms and conditions of this Agreement and the respective
Tranche D Participation Agreement.
Appendix
-2-
"ALCATEL SUPPLIER" means, collectively, the respective named
contractors and suppliers parties to the Alcatel Supply Contract, and their
respective permitted successors and assigns.
"ALCATEL SUPPLY CONTRACT" means the Private Agreement for Sale of Goods
and Rendering of Services, dated July 6, 2001, among TNL PCS S.A., Tele Norte
Leste Participacoes, S.A. and Alcatel Telecomunicacoes S.A. (Contrato No.
VPF/SUP/0XX-2001) and each other contract or agreement identified as an Alcatel
Supply Contract from time to time by joint notice from the Issuer and the
Initial Alcatel Lender.
"ALTERNATIVE BASE RATE" means, for any day, a rate per annum equal to
the higher of (i) the Prime Rate for such day minus 1.50% and (ii) the Federal
Funds Rate for such day minus 1.0%.
"ALTERNATIVE RATE" means, for any day, a rate per annum equal to the
Alternative Base Rate plus the Margin (subject to a minimum Margin of 3.30% per
annum and a maximum Margin of 5.50% per annum, and provided that such maximum
rate shall not limit any amount that any Purchaser may be entitled to receive
under Sections 2.05(b), 2.09 or 2.11 or Article 8).
"ANATEL" means the Agencia Nacional de Telecomunicacoes, the regulatory
agency responsible for regulating all telecommunications services in Brazil.
"APPLICABLE LENDING OFFICE" means, with respect to any Purchaser, its
office, branch or Affiliate located at its address set forth on the signature
pages hereof (or, in the case of a Participant on the signature pages of the
relevant Participation Agreement) or such other office, branch or Affiliate of
such Purchaser as it may hereafter designate by notice to the Issuer, the
Guarantor and the Administrative Agent.
"ARRANGERS" means ABN AMRO, BankBoston N.A., BBVA Securities Inc.,
Citibank/▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ING, ▇.▇. ▇▇▇▇▇▇/▇▇▇▇▇, Societe Generale and
Wachovia Securities Inc.
"ASSET SALE" means any sale, lease or other disposition by the Issuer,
any Subsidiary of the Issuer, the Guarantor or any Material Subsidiary of any
asset, including any sale-leaseback transaction, whether or not involving a
capital lease, but excluding:
(i) dispositions of (A) inventory (including handsets and related
accessories), (B) cash, cash equivalents and other cash management investments
and (C) obsolete, unused or unnecessary equipment, in each case in the ordinary
course of business;
(ii) dispositions to the Issuer, the Guarantor or a Specified
Wholly-Owned Subsidiary of the Issuer;
(iii) the grant of leases or sub-leases to other Persons not
materially interfering with the conduct of the business of the Issuer, the
Guarantor or any of its Subsidiaries, provided that (i) the Issuer, the
Guarantor or such Subsidiary retains the right to use, and does so use, such
leased or sub-leased assets in its business and (ii) each lessee or sub-lessee
agrees to subordinate its interest in such lease or sub-lease to the Brazilian
Collateral Agent, on behalf of the holders
Appendix
-3-
of Secured Debt, pursuant to documentation in form and substance reasonably
satisfactory to the Administrative Agent;
(iv) any disposition of assets not otherwise excluded pursuant to
clauses (i)-(iii) above to the extent that the fair market value of all such
assets disposed of in any Fiscal Year does not exceed $10,000,000; and
(v) any merger, consolidation or asset transfer permitted under
Section 5.07(a).
"ASSIGNEE" has the meaning set forth in Section 10.06(c).
"BANK COMMITMENT" means, collectively, the Tranche A1 Commitment, the
Tranche A2 Commitment, the Tranche B1 Commitment, the Tranche B2 Commitment, the
Tranche B3 Commitment and the Tranche C Commitment.
"BANK NOTE ONE" has the meaning set forth in Section 2.01(d).
"BANK NOTE ONE ALLOCATION METHOD" has the meaning set forth in Section
2.01(d)(ii).
"BANK NOTE TWO" has the meaning set forth in Section 2.01(d).
"BANK NOTES" means, collectively, Bank Note One and Bank Note Two.
"BANK VOTING INTERESTS" means, as of any date, (a) the aggregate
principal amount of the Tranche A Participations, the Tranche B Participations
(minus the Aggregate PRI Payment made as of such date) and the Tranche C
Participations (representing Voting Interests of the Tranche A Participants,
Tranche B Participants and Tranche C Participants, respectively, and, in each
such case, the applicable Initial Purchaser Voting Interest, which shall
represent a Voting Interest of the Initial Purchaser), and (b) the Aggregate PRI
Payment made as of such date (which shall represent a Voting Interest of each
Political Risk Insurer in accordance with its pro rata share thereof), in each
case (i) including the principal amount of any undrawn Commitments and each
Purchase related to such Commitments and (ii) excluding any such principal
amount (A) beneficially held by any Non-Voting Person, (B) guaranteed by any
Non-Voting Person, except pursuant to any guarantee by the Issuer or its
Affiliates set forth in, or required by, the Financing Documents or (C) subject
to any voting agreement or other requirement to consult with, or take direction
from, any Non-Voting Person with respect to any proposed vote under the
Financing Documents.
"BNDES" means Banco Nacional de Desenvolvimento Economico e Social, the
Brazilian national development bank.
"BOOK RUNNER" means ABN AMRO Bank N.V.
"BRAZIL" means the Federative Republic of Brazil and any agency,
authority or instrumentality thereof.
"BRAZILIAN COLLATERAL AGENT" means Banco ABN AMRO Real S.A., in its
capacity as Brazilian Collateral Agent for the Secured Parties.
Appendix
-4-
"BRAZILIAN PERMITTED INVESTMENTS" means (i) direct obligations of
Brazil, (ii) direct obligations of any agency or instrumentality thereof
(including the Central Bank) to the extent such obligations are fully backed by
the full faith and credit of Brazil, (iii) deposits with, including certificates
of deposit issued by, the banks listed on Schedule 1 hereto and any additional
internationally recognized, financially sound and responsible financial
institution in Brazil proposed in writing by the Issuer to the Administrative
Agent from time to time and not rejected on reasonable grounds by the
Administrative Agent within five days after such notice, (iv) repurchase
agreements with respect to securities described in clause (i) or (ii) above
entered into with an office of a bank or trust company referred to in clause
(iii) above, (v) shares and/or quotas of any money market or mutual fund
substantially all of the assets of which are invested in securities and
instruments of the types set forth in clauses (i) through (iv) above and (vi)
securities and instruments substantially similar to those described in clauses
(i) through (v) above and approved in writing by the Administrative Agent from
time to time.
"BRAZILIAN SPECIAL PURPOSE ACCOUNT" means the account established by
the Issuer with the Depositary (as defined in the Special Purpose Account Pledge
Agreement) and maintained in the name of the Issuer pursuant to the Special
Purpose Account Pledge Agreement and identified in writing by the Brazilian
Collateral Agent to the Issuer, the Collateral Agent and the Administrative
Agent as the "Brazilian Special Purpose Account."
"BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banks in the Administrative Agent's Jurisdiction, New York
City, Sao Paulo, Rio de Janeiro and London are authorized or required by law to
close.
"CENTRAL BANK" means Banco Central do Brasil or any successor thereof.
"CHANGE OF CONTROL" shall mean either (a) the failure of the Guarantor
to beneficially own, free of Liens, directly or indirectly, at least 70% of each
of the voting capital stock and any non-voting capital stock of the Issuer, or
(b) the failure of the Guarantor to possess the power to elect a majority of the
members of the Board of Directors or any similar governing body of the Issuer.
"CLEARSTREAM" means Clearstream Banking, societe anonyme.
"CLOSING" has the meaning set forth in Section 2.02(a).
"CLOSING DATE" has the meaning set forth in Section 2.02(a).
"COLLATERAL" means any collateral subject to any of the Collateral
Documents.
"COLLATERAL DOCUMENTS" means the Equipment Pledge Agreement, the
Mortgage Deeds, the Special Purpose Account Pledge Agreement, the Supplier
Account Pledge Agreement, the Security Agreement and any other security
agreements or mortgages delivered pursuant to the Financing Documents, including
the provisions of Sections 5.18 and 5.19 hereof, and any instruments of
collateral assignment or other similar agreements executed pursuant to the
foregoing.
Appendix
-5-
"COMMITMENT" means, without duplication, (i) as to the Initial
Purchaser, the obligation, on and subject to the terms and conditions of this
Agreement, including but not limited to Section 2.01(f) hereunder, to make
Purchases in the aggregate principal amount up to but not exceeding the Initial
Purchaser Commitment, (ii) as to each Tranche D Lender, the obligation, on and
subject to the terms and conditions of the Agreement, to make Purchases in the
aggregate principal amount of its respective Tranche D Commitment and (iii) as
to each other Purchaser, the obligation, on and subject to the terms and
conditions of this Agreement, to make Purchases in the aggregate principal
amount specified opposite its name on the signature pages of the relevant
Participation Agreement or Assignment and Assumption Agreement (the latter
substantially in the form set forth in Exhibit E hereto).
"COMMITMENT REDUCTION" means a mandatory reduction of Commitments
pursuant to Section 2.04(b) or an optional reduction of Commitments pursuant to
Section 2.07(a).
"COMMITMENT REDUCTION AMOUNT" has the meaning set forth in Section
2.04(b).
"COMMITMENT TERMINATION DATE" has the meaning set forth in Section
2.01(g).
"CONCESSION" means a concession or an authorization granted by ANATEL
to any of the Issuer, the Guarantor, the Material Subsidiaries and the STFC
Subsidiaries to provide telecommunications services in the Concession Area
pursuant to, inter alia, the concession agreements entered into between ANATEL
and the STFC Subsidiaries for the rendering of Servico Telefonico Fixo Comutado
(STFC) and the Authorization Term, dated March 12, 2001, between ANATEL and the
Issuer, which authorizes the Issuer to provide Servico Movel Pessoal (PCS).
"CONCESSION AGREEMENT" means the concession agreements and the
Authorization Term entered into by the Issuer, the Guarantor, a Material
Subsidiary or an STFC Subsidiary and ANATEL pursuant to which ANATEL has granted
a Concession to the Issuer, the Guarantor, the Material Subsidiary or the STFC
Subsidiary.
"CONCESSION AREA" means the geographic areas in which the Issuer, the
Guarantor, the Material Subsidiaries and the STFC Subsidiaries have the right to
offer telecommunications services pursuant to applicable Concessions, as set
forth in Schedule 4 hereto.
"CONSOLIDATED DEBT" means, at any date, the total amount of Debt of the
Guarantor and its Consolidated Subsidiaries.
"CONSOLIDATED DEBT TO EBITDA RATIO" means, as of the last day of any
Fiscal Quarter, the ratio of (i) Consolidated Debt to (ii) Consolidated EBITDA
for the four consecutive Fiscal Quarters ending on such day, each determined at
such day.
"CONSOLIDATED EBITDA" means, for any period of four consecutive Fiscal
Quarters, Consolidated Net Income for such period plus, to the extent deducted
in determining Consolidated Net Income for such period, the aggregate amount of
(i) Consolidated Interest Expense, (ii) taxes based upon income and (iii)
depreciation, amortization and other similar non-cash charges.
Appendix
-6-
"CONSOLIDATED EBITDA TO CONSOLIDATED INTEREST EXPENSE RATIO" means, as
of the last day of any Fiscal Quarter, the ratio of (i) Consolidated EBITDA for
the four consecutive Fiscal Quarters ending on such day to (ii) Consolidated
Interest Expense for the four consecutive Fiscal Quarters ending on such day.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the interest
expense of the Guarantor and its Consolidated Subsidiaries.
"CONSOLIDATED NET INCOME" means, for any period, the net income of the
Guarantor and its Consolidated Subsidiaries, determined on a consolidated basis
for such period, adjusted to exclude the effect of any extraordinary or other
non-recurring gain or extraordinary or other non-recurring loss.
"CONSOLIDATED REVENUES" means, for any period the net revenues of the
Guarantor and its Consolidated Subsidiaries, as determined in accordance with
GAAP.
"CONSOLIDATED SUBSIDIARIES" means, with respect to any Person, at any
date, those Subsidiaries or other entities the accounts of which would be
consolidated with those of such Person in its consolidated financial statements
if such statements were prepared as of such date.
"CONTRACT AMOUNT" has the meaning set forth in Section 2.01(b)(i).
"DEBT" of any Person means, at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade and commercial accounts payable arising in the ordinary
course of business and repaid within 90 days of the provision of such property
or services and except obligations arising under indefeasible rights of use and
other telecommunications capacity agreements entered into in the ordinary course
of business, (iv) all obligations of such Person as lessee which are capitalized
(or, if such Person is not governed by GAAP, would be capitalized) in accordance
with GAAP, (v) all obligations (whether or not contingent) of such Person to
reimburse any bank or other Person in respect of amounts paid under a letter of
credit, performance bond or similar instrument (collectively in this definition,
"TRADE LETTERS OF CREDIT"), (vi) all capital stock of such Person or any of its
Subsidiaries that, by its terms is mandatorily redeemable or subject to
repurchase or a sinking fund on or before December 31, 2009, (vii) all Debt
pursuant to any of the foregoing clauses secured by a Lien on any asset of such
Person, whether or not such Debt is otherwise a Debt of such Person (and to the
extent not otherwise included in items (i) through (vi) above), and (viii) all
Guaranties by such Person of Debt of another Person (each such Guaranty to
constitute Debt in an amount equal to the amount of such other Person's Debt
guaranteed thereby to the extent not otherwise included in items (i) through
(vii)).
"DEFAULT" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"DEFAULT INTEREST PERIOD" means, during any period while any principal
of any Note, interest thereon or any other amount due under this Agreement is
not paid in full, each
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successive period as the Administrative Agent shall from time to time choose;
provided that (a) no such period shall exceed three (3) months, and (b) the
first such period shall commence as of the date on which such principal,
interest or other amount became due and each succeeding period shall commence
upon the expiry of the immediately preceding such period.
"DERIVATIVES OBLIGATIONS" of any Person means all obligations of such
Person in respect of any rate swap transaction, basis swap, forward rate
transaction, bond option, interest rate option, foreign exchange transaction,
cap transaction, floor transaction, collar transaction, currency swap
transaction, cross-currency rate swap transaction, currency option or any other
similar transaction (including any option with respect to any of the foregoing
transactions) or any combination of the foregoing transactions.
"DETERMINATION DATE" means, for any Interest Period, the second
Euro-Dollar Business Day prior to the first day of such Interest Period.
"DOLLARS" and "$" means the lawful currency of the United States.
"EFFECTIVE DATE" means the date this Agreement is executed by all of
the parties hereto.
"ELIGIBLE TRANSFEREE" means a commercial bank, finance company,
insurance company, export credit agency or other financial institution or fund
which is engaged in making, purchasing or otherwise investing in commercial
loans in the ordinary course of its business, and having total assets in excess
of $100,000,000.
"ENVIRONMENTAL LAWS" means any and all statutes, laws, judicial
decisions, regulations, ordinances, rules, judgments, orders, decrees, plans,
injunctions, permits, concessions, grants, franchises, licenses, agreements and
other governmental restrictions relating to the environment or the effect of the
environment on human health or to emissions, discharges or releases of
pollutants, contaminants, toxics, caustics, petroleum and other hydrocarbons, or
any similar substances or wastes into the environment, including ambient air,
surface water, ground water or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants or wastes or the clean-up or other
remediation thereof.
"EQUIPMENT" means equipment purchased by the Issuer under any Supply
Contract.
"EQUIPMENT PLEDGE AGREEMENT" means the Equipment Pledge Agreement,
substantially in the form of Exhibit G, dated as of August 10, 2001.
"EUROCLEAR" means Euroclear Bank, S.A./N.V., as operator of the
Euroclear System.
"EURO-DOLLAR BUSINESS DAY" means any day (except a Saturday or Sunday)
on which commercial banks are open for international business (including
dealings in Dollar deposits) in London.
"EURO-DOLLAR RATE" means a rate of interest determined pursuant to
Section 2.05 on the basis of LIBOR.
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"EURO-DOLLAR RESERVE PERCENTAGE" means, for any day, that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System of the United States, for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion Dollars in
respect of "EUROCURRENCY LIABILITIES" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
the Notes is determined or any category of extensions of credit or other assets
which includes loans by a non-United States office of any Purchaser to United
States residents).
"EVENTS OF DEFAULT" has the meaning set forth in Section 6.01.
"EXPIRATION DATE" has the meaning set forth in Section 2.04(a).
"EXPROPRIATION EVENT" means the condemnation, seizure, intervention,
compulsory purchase or expropriation of all or any substantial part of the
assets (including any Concession) of the Issuer, the Guarantor or any of their
respective Subsidiaries by any governmental body, agency or official.
"FACILITY" means the note purchase facility established pursuant to the
terms and conditions of this Agreement.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System of the United States arranged by Federal funds brokers on
such day, as published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day, provided that (i) if such day is not a Business
Day, the Federal Funds Rate for such day shall be such rate on such transactions
on the next preceding Business Day as so published on the next succeeding
Business Day, and (ii) if no such rate is so published on such next succeeding
Business Day, the Federal Funds Rate for such day shall be the average rate
quoted to the Administrative Agent on such day on such transactions as
determined by the Administrative Agent.
"FEE LETTERS" means, collectively, (a) the agents' fee letter, dated
August 10, 2001, among the Issuer, the Guarantor, the Principal Paying Agent and
ABN AMRO, (b) the fee letter, dated August 10, 2001, between the Issuer, the
Guarantor, the Administrative Agent, the Principal Paying Agent and each Initial
Tranche D Lender, in connection with certain Purchase Date fees hereunder, (c)
the arranger's fee letter, dated August 10, 2001, among ABN AMRO and each
Initial Tranche D Lender, in connection with certain fees payable hereunder, and
(d) the clear market letter, dated August 10, 2001, among the Issuer, the
Guarantor, ABN AMRO and each Initial Tranche D Lender, in connection with
certain clear market agreements.
"FINANCING DOCUMENTS" means this Agreement, the Notes, the Collateral
Documents, each Required Political Risk Policy, the Participation Agreements,
the Interest Recovery Agreement, the Fee Letters, any Guaranty issued by a
Material Subsidiary hereunder, any certificate or notice delivered pursuant
hereto or thereto, any amendment, waiver or modification of any of the foregoing
and any other document designated by the Issuer or the Guarantor as a
Appendix
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Financing Document (with the consent of the Administrative Agent, which consent
shall not be unreasonably withheld).
"FISCAL QUARTER" of any Person means a fiscal quarter of such Person.
"FISCAL YEAR" of any Person means a fiscal year of such Person.
"GAAP" has the meaning set forth in Section 1.02.
"GOVERNMENTAL AUTHORITY" means (i) any national, state, provincial or
local government; or (ii) any department, commission, board, bureau, agency,
tribunal (arbitral or otherwise), regulatory or other authority,
instrumentality, judicial, fiscal, legislative, executive or administrative body
of any entity described in clause (i) above, however constituted.
"GUARANTOR" means Tele Norte Leste Participacoes S.A., a corporation
duly organized under the laws of the Federative Republic of Brazil.
"GUARANTY" by any Person means any obligation, contingent or otherwise,
of such Person directly or indirectly guaranteeing any Debt or other obligation
of any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt or other obligation (whether arising by virtue of partnership arrangements,
by virtue of an agreement to keep-well, to purchase assets, goods, securities or
services, to take-or-pay, or to maintain financial statement conditions or
otherwise), (ii) to reimburse a bank for amounts drawn under a letter of credit
for the purpose of paying such Debt or (iii) entered into for the purpose of
assuring in any other manner the holder of such Debt or other obligation of the
payment thereof or to protect such holder against loss in respect thereof (in
whole or in part), provided that the term "GUARANTY" shall not include
endorsements for collection or deposit in the ordinary course of business. The
term "GUARANTY" used as a verb has a corresponding meaning.
"INDEMNITEE" has the meaning set forth in Section 10.03(b).
"INFORMATION MEMORANDUM" means the "Confidential Information
Memorandum" of the Issuer and the Guarantor dated July 2001, relating to the
transactions described herein.
"INITIAL ALCATEL LENDER" means Electro Banque (an Affiliate of
Alcatel), and each Tranche D Affiliate thereof who acquires an interest in the
Tranche D - Alcatel Note in accordance with the terms and conditions of this
Agreement and the respective Tranche D Participation Agreement.
"INITIAL NOKIA LENDER" means Nokia, and each Tranche D Affiliate
thereof who acquires an interest in the Tranche D - Nokia Note in accordance
with the terms and conditions of this Agreement and the respective Tranche D
Participation Agreement.
"INITIAL PURCHASER" means ABN AMRO Bank N.V.
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"INITIAL PURCHASER BANK NOTE ONE COMMITMENT" means the obligation of
the Initial Purchaser to purchase an amount of Bank Note One hereunder.
"INITIAL PURCHASER BANK NOTE TWO COMMITMENT" means the obligation of
the Initial Purchaser to purchase an amount of Bank Note Two hereunder.
"INITIAL PURCHASER COMMITMENT" has the meaning set forth in Section
2.01(a), and shall also mean, collectively, the Initial Purchaser Bank Note One
Commitment and the Initial Purchaser Bank Note Two Commitment.
"INITIAL PURCHASER VOTING INTERESTS" means the aggregate principal
amount of Tranche A, Tranche B and Tranche C not sold by the Initial Purchaser
pursuant to the relevant Participation Agreements, which amounts shall represent
Voting Interests of the Initial Purchaser.
"INITIAL SIEMENS LENDER" means Siemens, and each Tranche D Affiliate
thereof who acquires an interest in the Tranche D - Siemens Note in accordance
with the terms and conditions of this Agreement and the respective Tranche D
Participation Agreement.
"INITIAL TRANCHE D LENDERS" means each of the Initial Alcatel Lender,
the Initial Nokia Lender and the Initial Siemens Lender.
"INTEREST AMOUNT" has the meaning set forth in Section 2.05(a).
"INTEREST HOLDER" means, at any time, any holder of a Voting Interest.
"INTEREST PAYMENT DATE" means the date in November 2001 falling three
months after the initial Purchase Date and each date falling three months
thereafter in February, May, August and November (or, if any such date is not a
Euro-Dollar Business Day, the next succeeding Euro-Dollar Business Day, unless
such Euro-Dollar Business Day falls in a subsequent calendar month, in which
case the date for payment thereof shall be the next preceding Euro-Dollar
Business Day) and, with respect to each Note, each date on which principal is
payable (or paid) with respect to such Note in accordance with the terms of this
Agreement (whether by Prepayment, on a Principal Payment Date or otherwise).
"INTEREST PERIOD" means, with respect to each Note, the period (a)
commencing on (i) in the case of the first Interest Period for such Note, the
calendar day immediately following the Purchase Date therefor or (ii) in the
case of any Interest Period subsequent thereto, the date immediately succeeding
the Interest Payment Date for the immediately preceding Interest Period and (b)
ending on the next succeeding Interest Payment Date.
"INTEREST RECOVERY AGREEMENT" means the Interest and Commitment Fee
Recovery Agreement, dated as of August 10, 2001, among the Initial Purchaser,
Nokia, Siemens and Alcatel.
"INVESTMENT" means any investment in any Person, whether by means of
share purchase, capital contribution, loan, Guaranty, time deposit or otherwise
(but not including any demand deposit), excluding (i) any account receivable
created or acquired in the ordinary course of
Appendix
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business and payable or dischargeable in accordance with reasonable and
customary trade terms which, in the case of any account receivable arising in
respect of the delivery of telecommunications or other services, does not exceed
120 days and (ii) indefeasible rights of use and other telecommunications
capacity agreements entered into in the ordinary course of business.
"ISSUER" means TNL PCS S.A., a corporation duly organized under the
laws of the Federative Republic of Brazil.
"LIBOR" applicable to any Interest Period means (i) the arithmetic mean
(rounded upward, if necessary, to the nearest 1/100th of 1%) of the offered
rates for deposits in Dollars, for a period approximately equal to such Interest
Period and in an amount approximately equal to the Notes to which such Interest
Period applies, quoted on the Determination Date for such Interest Period (a) as
such rates appear on the Reuters Screen LIBO page (or such other page as may
replace the designated page on the Reuters Screen) (the "REUTERS SCREEN LIBO
PAGE") as of 11:00 A.M. (London time) on such date, or (b) if, as of 11:00 A.M.
(London time) on any such date at least two such rates do not appear on the
Reuters Screen LIBO Page, as such rate appears on the Telerate Service Page 3750
(or such other page as may replace the designated page on the Telerate Service
or such other service as may be nominated by the British Bankers' Association)
("TELERATE PAGE 3750") as of 11:00 A.M. (London time) on such date, or (ii) if,
as of 11:00 A.M. (London time) on any such date fewer than two such rates appear
on the Reuters Screen LIBO Page and no such rate appears on Telerate Page 3750,
the arithmetic mean (calculated as mentioned above) of the respective rates per
annum at which deposits in Dollars are offered to the Administrative Agent in
the London interbank market at 11:00 A.M. (London time) on the Determination
Date for such Interest Period, by Citibank, ING and ▇.▇. ▇▇▇▇▇▇, for a period
approximately equal to such Interest Period and in an amount approximately equal
to the principal amount of the Notes to which such Interest Period is to apply.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind, or any other type of
preferential arrangement that has substantially the same practical effect as a
security interest, in respect of such asset. For the purpose of this definition,
the Guarantor or any of its Subsidiaries shall be deemed to own subject to a
Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease, or other
title retention agreement relating to such asset.
"MAJORITY-OWNED SUBSIDIARY" means with respect to any Person, any
Subsidiary of such Person of which more than 50.0% of the capital stock, in
aggregate, is owned directly by such Person or through one or more of its other
Subsidiaries.
"MANDATORY PREPAYMENT" means the required prepayment of Notes by or on
behalf of the Issuer pursuant to Section 2.04(a).
"MARGIN" shall mean for each Interest Period, the average bid spread
over comparable U.S. Treasuries of the Brazil Sovereign Bond due 2007 ("BRAZIL
'07") for the 90 day period ending three Business Days prior to the commencement
of such Interest Period; provided that, if the Brazil '07 loses significant
liquidity in the opinion of Issuer and the Administrative Agent,
Appendix
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and as a result, ceases to be an appropriate benchmark for the Margin, another
benchmark shall be selected that is mutually agreeable to the Administrative
Agent, the Issuer, Persons holding at least 66?% of the sum of the Bank Voting
Interests in respect of the Tranche C Participations and the Tranche C
Non-Participated Interest and Persons holding at least 66?% of the sum of the
Tranche D Voting Interests.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
financial condition, results of operations, business, assets (including the
Concessions) or prospects of either (A) the Issuer or (B) the Guarantor and its
Consolidated Subsidiaries taken as a whole; (ii) the ability of either the
Issuer or the Guarantor to perform its respective obligations under this
Agreement, the Notes or any other Transaction Document to which it is a party;
(iii) the validity or enforceability of or the rights and remedies of the
Agents, the Purchasers and/or the Participants under, this Agreement, the Notes
or any other Financing Document; and (iv) the validity of the Concessions or the
ability of the Issuer or the Guarantor to provide services thereunder.
"MATERIAL FINANCIAL OBLIGATIONS" means a principal or face amount of
Debt (other than the Notes) and/or payment or collateralization obligations in
respect of Derivatives Obligations of the Issuer, the Guarantor and/or one or
more of the Material Subsidiaries, arising in one or more related or unrelated
transactions, exceeding in the aggregate $10,000,000 for any single liability or
$100,000,000 for all liabilities.
"MATERIAL SUBSIDIARIES" means, collectively, those Subsidiaries of the
Guarantor designated by the Guarantor accounting for both (i) at least 80% of
consolidated assets of the Guarantor and its Subsidiaries (calculated by
aggregating the unconsolidated assets other than goodwill created after the
Closing Date of each Subsidiary) at the Closing Date or at the end of the most
recent Fiscal Quarter and (ii) at least 80% of consolidated revenues of the
Guarantor and its Subsidiaries (calculated by aggregating the unconsolidated
revenues of each Subsidiary) for the most recent four consecutive Fiscal
Quarters (in each such case excluding the non-consolidated assets and revenues
of the Issuer from such computation), provided that (x) the Guarantor shall
designate the Material Subsidiaries meeting such definition at the Closing Date
and no more frequently than annually thereafter, unless required by a
transaction permitted under Section 5.07 (provided further that no change in any
such designation may be made when any Default shall have occurred and be
continuing), (y) in the absence of a different designation by the Guarantor, the
designation of Material Subsidiaries most recently made by the Guarantor shall
continue in effect, and (z) unless required to reach the 80% thresholds in the
foregoing definition, the Guarantor may designate no more than ten Subsidiaries
as comprising the Material Subsidiaries.
"MAXIMUM CONTRACT VALUE" means, with respect to the Supply Contract of
each Supplier, as of any date, the sum of the Contract Amount and Related Cost
Amount with respect to such Supply Contract.
"MORTGAGE DEEDS" means the amended and restated mortgage deeds
substantially in the form of Exhibit I.
Appendix
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"NET CASH PROCEEDS" means, with respect to any Reduction Event, an
amount (not less than zero) equal to the cash proceeds received by the Issuer or
any of its Subsidiaries from or in respect of such Reduction Event (including,
without duplication, any cash proceeds received as income or other proceeds of
any noncash proceeds of any Asset Sale), less (x) any expenses (including
reasonable make-ready expenses) reasonably incurred by the Issuer in respect of
such Reduction Event and (y) if such Reduction Event is an Asset Sale, (I) the
amount of any Debt secured by a Lien permitted hereunder on any asset disposed
of in such Asset Sale and (II) to the extent not deducted under clause (x)
above, any taxes actually paid or to be payable by the Issuer (as reasonably
estimated by a senior financial or accounting officer of the Issuer, giving
effect to the overall tax position of such Person) in respect of such Asset
Sale; provided that, with respect to a Reduction Event described in clause (iii)
of the definition of Reduction Event (a "VENDOR PREPAYMENT EVENT"), "Net Cash
Proceeds" shall be deemed to be an amount equal to the amount required to be
prepaid in respect of the Vendor Prepayment Event times a fraction, the
numerator of which is the aggregate principal amount outstanding under this
Agreement as of the date of such Vendor Prepayment Event and the denominator of
which is the sum of the aggregate principal amount outstanding under this
Agreement plus the aggregate principal amount outstanding under the applicable
Vendor Financing as of the date of such Vendor Prepayment Event; provided,
further, that, with respect to a Reduction Event described in clause (iv) of the
definition of Reduction Event, "Net Cash Proceeds" with respect to any Tranche D
Lender shall mean an amount equal to the Working Capital Amount actually funded
by such Tranche D Lender (or the related Supplier) multiplied by a fraction
equal to (A) Maximum Contract Value of such Supplier minus the Actual Contract
Value of such Supplier divided by (B) such Maximum Contract Value.
"NOKIA" means Nokia Oyj, a corporation organized under the laws of
Finland.
"NOKIA LENDERS" means, collectively, the Initial Nokia Lenders and all
Assignees who acquire an interest in the Tranche D - Nokia Note in accordance
with the terms and conditions of this Agreement and the respective Tranche D
Participation Agreement.
"NOKIA SUPPLIER" means, collectively, the respective named contractors
and suppliers parties to the Nokia Supply Contract, and their respective
permitted successors and assigns.
"NOKIA SUPPLY CONTRACT" means the Private Contract for Purchase and
Sale of Goods and Services, dated May 11, 2001, among TNL PCS S.A., Tele Norte
Leste Participacoes, S.A. and Nokia do Brasil Ltda., and each other contract or
agreement identified as a Nokia Supply Contract from time to time by joint
notice from the Issuer and the Initial Nokia Lender.
"NON-VOTING PERSON" means the Issuer, the Guarantor or any of their
respective Affiliates.
"NOTES" means, collectively, the Bank Notes and the Tranche D Notes.
"NOTICE OF DISBURSEMENT" has the meaning set forth in Section
2.01(b)(ii).
"NOTICE OF PURCHASE" has the meaning set forth in Section 2.01(c).
Appendix
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"OPTIONAL PREPAYMENT" means an optional prepayment of Notes by or on
behalf of the Issuer pursuant to Section 2.07(b).
"OTHER TRANSACTION DOCUMENTS" means the Supply Contracts and the
Concession Agreements.
"PARENT" means, with respect to any Purchaser, any Person controlling
such Purchaser (whether through the ownership of voting securities, by contract
or otherwise).
"PARENT GUARANTY" means the Guaranty of the Guarantor pursuant to
Article 9 hereof.
"PARTICIPANT" has the meaning set forth in Section 10.06(b).
"PARTICIPATION AGENTS" means each Participation Agent under each of the
Participation Agreements.
"PARTICIPATION AGREEMENTS" means, collectively, each of the Tranche A1
Participation Agreement, the Tranche A2 Participation Agreement, the Tranche B1
Participation Agreement, the Tranche B2 Participation Agreement, the Tranche B3
Participation Agreement, the Tranche C Participation Agreement and each Tranche
D Participation Agreement, in each case (other than with respect to the Tranche
D Participation Agreements) relating to either Bank Note One or Bank Note Two.
"PAYOR" has the meaning set forth in Section 8.04.
"PERMITTED LIENS" has the meaning set forth in Section 5.09.
"PERSON" means an individual, a corporation, a limited liability
company, a partnership, an association, a trust or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
"POLITICAL RISK INSURER" means each of AIG Global Trade & Political
Risk Insurance Co., Zurich-American Insurance Group and Sovereign Risk Insurance
Ltd.
"POST-DEFAULT RATE" means, in respect of any principal of any Note,
interest thereon or any other amount due under this Agreement that shall not be
paid in full (whether at stated maturity, by acceleration, by mandatory
prepayment or otherwise), a rate per annum equal the sum of (A) the interest
that would otherwise apply during the Default Interest Period plus (B) 1.0%
(such accrued interest for any Default Interest Period, the "DEFAULT INTEREST
AMOUNT" for such Interest Period).
"PREPAYMENT" means any Optional Prepayment or Mandatory Prepayment.
"PRE-FUNDED PURCHASE AMOUNT" has the meaning set forth in Section
2.01(b)(ii).
"PRIME RATE" means the rate of interest publicly announced by ABN AMRO
at its New York branch from time to time as its Prime Rate.
Appendix
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"PRINCIPAL PAYING AGENT" means Chase Trust Bank in its capacity as
Principal Paying Agent hereunder.
"PRINCIPAL PAYMENT AMOUNT" means the amount payable in respect of the
principal amount of Notes outstanding on each Principal Payment Date, as set
forth in Section 2.03.
"PRINCIPAL PAYMENT DATE" means each Interest Payment Date falling in
August and February, commencing with the Interest Payment Date falling in
February 2004.
"PRI PREMIUM" means the amount payable on the Closing Date and each
Interest Payment Date as a premium under the Required Political Risk Policy.
"PROCESS AGENT" has the meaning set forth in Section 10.11(a).
"PTAX EXCHANGE RATE" means, as of any date, the average of the purchase
and sale rate for Dollars published by the Central Bank of Brazil on such date
through the SISBACEN data system under rate PTAX 800, option 5.
"PURCHASE" has the meaning set forth in Section 2.01(a).
"PURCHASE DATE" means the date specified in each Notice of Purchase (or
Notice of Disbursement) as the date on which the Initial Purchaser and/or any
Tranche D Lender will effect a Purchase from the Issuer (or, in the case of a
Notice of Disbursement, the date on which the Issuer will effect a disbursement
from the Supplier Collateral Account in accordance with Section 2.01(b)(ii))
under the terms and subject to the conditions set forth in this Agreement,
provided that each Purchase Date must be an Interest Payment Date (other than
the first Purchase Date, which must be a Business Day).
"PURCHASER" means, collectively, (i) the Initial Purchaser, (ii) each
Participant, (iii) each Tranche D Lender and (iv) each Assignee.
"QUALIFIED VENDOR" means an internationally recognized supplier of
telecommunications equipment.
"REAIS" and "R$" means the lawful currency of Brazil.
"RECEIPT DATE" means the date on which any cash proceeds are received
by the Issuer or any of its Subsidiaries in respect of any Reduction Event.
"REDUCTION EVENT" means (i) the incurrence of any Debt by the Issuer or
its respective Subsidiaries, other than Debt permitted to be incurred by the
Issuer pursuant to Section 5.10 (except for Section 5.10(h)); (ii) any Asset
Sale; (iii) a reduction event, optional prepayment, optional redemption,
mandatory prepayment, mandatory redemption or similar event under any Vendor
Financing (other than a prepayment consisting of the proceeds of a subsequent
Vendor Financing incurred solely for the purpose of prepaying such Vendor
Financing), (iv) the failure by the Issuer to order a Supplier's Maximum
Contract Value as of the Commitment Termination Date or (v) any Expropriation
Event resulting in the receipt by the Guarantor or any Affiliate thereof of any
payment, indemnity, insurance proceeds or other amounts in respect thereof
(other
Appendix
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than proceeds of the Required Political Risk Policy). The description of any
transaction as falling within the above definition does not affect any
limitation on such transaction imposed by Article 5 of this Agreement.
"REGISTER" has the meaning set forth in Section 10.06(e).
"REGULATIONS T, U AND X" means Regulations T, U and X, respectively, of
the Board of Governors of the Federal Reserve System of the United States, as in
effect from time to time.
"RELATED COST AMOUNT" has the meaning set forth in Section 2.01(b)(i).
"REQUIRED BANK INTEREST HOLDERS" means, at any time, Persons holding at
least 66 2/3% of the sum of the Bank Voting Interests.
"REQUIRED INTEREST HOLDERS" means, at any time, Persons holding at
least (i) 50.1% of the sum of the Bank Voting Interests and (ii) 66 2/3% of the
sum of the Tranche D Voting Interests, with each of such clauses (i) and (ii)
calculated separately; provided, however, that, as of and subsequent to the
fourth anniversary of the Closing Date (so long as no Default under Section 6.01
shall then exist), "REQUIRED INTEREST HOLDERS" shall mean, at any time, Persons
holding at least 50.1% of the sum of the Voting Interests.
"REQUIRED POLITICAL RISK POLICY" means (i) each Required Tranche B
Policy and (ii) any Substitute Political Risk Policy; provided that each
Required Political Risk Policy shall have been approved in specimen form by the
Issuer and the Tranche D Lenders (such approval not to be unreasonably
withheld); and provided further that in the event any Required Tranche B Policy
is replaced in full by any Substitute Political Risk Policy, such Required
Tranche B Policy shall no longer be considered a "Financing Document".
"REQUIRED TRANCHE B POLICY" means each political risk insurance policy
issued by a Political Risk Insurer to the Tranche B Participation Agent and the
Tranche B Insureds with respect to their respective Tranche B Participations.
"REQUIRED TRANCHE D INTEREST HOLDERS" means, at any time, Persons
holding at least 66 2/3% of the sum of the Tranche D Voting Interests.
"RESPONSIBLE OFFICER" means, unless the context otherwise indicates, an
officer of the Issuer or the Guarantor, as applicable.
"RESPONSIBLE OFFICERS' CERTIFICATE" means, unless the context otherwise
indicates, a certificate executed on behalf of the Issuer or the Guarantor, as
the case may be, by any two officers of the Issuer or the Guarantor,
respectively, one of whom shall be either the chief financial officer or chief
accounting officer.
"RESTRICTED PAYMENT" means (i) any dividend or other distribution on
any shares of the capital stock of the Issuer the Guarantor or a Subsidiary
(except (a) dividends payable solely in shares of its capital stock other than
mandatorily redeemable preferred stock, (b) dividends required to be made under
Brazilian law and (c) dividends of any Subsidiary of the Issuer or Guarantor
(other than the Issuer) declared and paid in the ordinary course of business pro
rata to
Appendix
-17-
all shareholders of such Subsidiary), (ii) any payment on account of the
purchase, redemption, retirement or acquisition of (a) any shares of the capital
stock of the Issuer, the Guarantor or a Subsidiary or (b) any option, warrant or
other right to acquire shares of its capital stock (but not including payments
of principal, premium (if any) or interest made pursuant to the terms of
convertible debt securities prior to conversion), (iii) any Investment in any
Person that has any direct or indirect ownership interest in the Issuer, the
Guarantor or a Subsidiary (other than intercompany Debt permitted pursuant to
Section 5.10(d)), or (iv) any payment on account of the redemption, repurchase,
defeasance, acquisition or retirement for value, in each case, prior to any
scheduled maturity or repayment of any Debt which is subordinate in right of
payment to the Notes (including pursuant to the Parent Guaranty).
"ROF" means Registro de Operacao Financeira, the registration required
by the Central Bank for cross-border credit transactions, such as the
transaction contemplated herein, pursuant to Central Bank Circular no. 3027, of
February 21, 2001.
"SECURED DEBT" means, as of any date of determination, all Debt to the
extent secured by any of the Issuer's or any of its Subsidiaries' assets,
whether tangible or intangible.
"SECURED INTEREST HOLDER" means, at any time, any Interest Holder as a
beneficiary under the Collateral Documents.
"SECURED PARTY" means with respect to the Security Agreement, the U.S.
Collateral Agent on behalf of each of the Purchasers and each Agent and, with
respect to any other Collateral Document, each of the Purchasers and each Agent
represented or not by the Brazilian Collateral Agent.
"SECURITIES ACT" means the United States Securities Act of 1933, as
amended, and rules and regulations promulgated by the United States Securities
and Exchange Commission thereunder.
"SECURITY AGREEMENT" means the Security Agreement, substantially in the
form of Exhibit F, dated as of August 10, 2001, between TNL PCS S.A. and ABN
AMRO Bank N.V.
"SIEMENS" means Siemens AG, a corporation organized under the laws of
Germany.
"SIEMENS LENDERS" means, collectively, the Initial Siemens Lenders and
all Assignees who acquire an interest in the Tranche D - Siemens Note in
accordance with the terms and conditions of this Agreement and the respective
Tranche D Participation Agreement.
"SIEMENS SUPPLIER" means, collectively, the respective named
contractors, subcontractors and suppliers parties to the Siemens Supply
Contract, and their respective permitted successors and assigns.
"SIEMENS SUPPLY CONTRACT" means the Private Contract for the Sale and
Purchase of Goods and Services, dated May 31, 2001, among TNL PCS S.A., Tele
Norte Leste Participacoes S.A., Siemens Ltds. and Siemens AG (Contract No.
PCS/SUP/002-2001), and each other contract or agreement identified as a Siemens
Supply Contract from time to time by joint notice from the Issuer and the
Initial Siemens Lender.
Appendix
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"SPECIAL PURPOSE ACCOUNT PLEDGE AGREEMENT" means the Special Purpose
Account Pledge Agreement, substantially in the form of Exhibit H-1.
"SPECIFIED WHOLLY-OWNED SUBSIDIARY" means any Wholly-Owned Subsidiary
of the Issuer or the Guarantor; provided that, prior to the date on which the
Issuer or the Guarantor or any of their respective Subsidiaries makes any
Investment therein (other than Investments for purposes of formation in amounts
not more than $1,000 (or the currency equivalent thereof)), (i) such Specified
Wholly-Owned Subsidiary has executed a Guaranty of all principal of and interest
on the Notes and all other amounts payable hereunder, on terms and conditions
substantially identical to the Parent Guaranty, (ii) such Specified Wholly-Owned
Subsidiary has provided a security interest in substantially all of its assets
in support of its Guaranty referred to in clause (i) above, pursuant to one or
more Collateral Documents and (iii) the Issuer or the Guarantor, as applicable,
shall have furnished opinions of external counsel substantially similar to those
required pursuant to Section 3.01 to the extent relevant to the matters referred
to in clauses (i) and (ii) above.
"STFC SUBSIDIARIES" means the Subsidiaries and the Material
Subsidiaries, identified on Schedule 6 hereto, controlled by the Guarantor which
are engaged in providing Servico Telefonico Fixo Comutado (STFC) within the
relevant Concession Area.
"SUBSIDIARY" means, as to any Person, any corporation or other entity
of which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by such Person. Unless
otherwise specified, "SUBSIDIARY" means a direct or indirect Subsidiary of the
Guarantor.
"SUBSTITUTE POLITICAL RISK POLICY" shall have the meaning set forth in
Section 6.01(o).
"SUBSTITUTE PURCHASER" has the meaning set forth in Section 8.06.
"SUPPLIER ACCOUNT PLEDGE AGREEMENT" means the Supplier Account Pledge
Agreement, substantially in the form of Exhibit H-2.
"SUPPLIER COLLATERAL ACCOUNT" means the account established by the
Issuer with the Depositary (as defined in the Supplier Account Pledge Agreement)
and maintained in the name of the Issuer pursuant to the Supplier Account Pledge
Agreement and identified in writing by the Brazilian Collateral Agent to the
Issuer, the U.S. Collateral Agent and the Administrative Agent as the "Supplier
Collateral Account".
"SUPPLIERS" means the Alcatel Supplier, the Nokia Supplier and the
Siemens Supplier.
"SUPPLY CONTRACTS" means the Alcatel Supply Contract, the Nokia Supply
Contract and the Siemens Supply Contract.
"TEMPORARY CASH INVESTMENTS" means (i) any Investment in (a) direct
obligations of the United States or any agency thereof, or obligations
guaranteed by the United States or any agency thereof and (b) time deposits
with, including certificates of deposit issued by, any office located in the
United States of any bank or trust company which is organized under the laws of
Appendix
-19-
the United States or any State thereof and has capital, surplus and undivided
profits aggregating at least $1,000,000,000; provided in each case that any
Investment referred to in clauses (a) and (b) above matures within three months
from the date of acquisition thereof by the Issuer, the Guarantor or any of
their respective Subsidiaries, and (ii) with respect to the Issuer, the
Guarantor and their respective Subsidiaries, Brazilian Permitted Investments.
"TOTAL CONSOLIDATED ASSETS" means, as of any date, the total amount of
assets of the Guarantor and its Consolidated Subsidiaries (other than goodwill
created after the Closing Date).
"TOTAL NON-PARTICIPATED INTEREST" means the sum of the Tranche A1
Non-Participated Interest, the Tranche A2 Non-Participated Interest, the Tranche
B1 Non-Participated Interest, the Tranche B2 Non-Participated Interest, the
Tranche B3 Non-Participated Interest and the Tranche C Non-Participated
Interest.
"TRADE OR COMMERCIAL FINANCE NOTE" means any note or deferred payment
obligation (whether or not evidenced by a note) issued by a Person to the Issuer
or the Guarantor or one of their respective Subsidiaries to finance such
Person's purchase of inventory or equipment from the Issuer or the Guarantor or
any of their respective Subsidiaries in the ordinary course of business.
"TRANCHE" means any of Tranche A, Tranche B, Tranche C or Tranche D.
"TRANCHE A" means the financing provided to the Issuer by the
Purchasers under their Tranche A1 and Tranche A2 Commitments.
"TRANCHE A PARTICIPANTS" means the Participants party to the respective
Tranche A Participation Agreements and each Assignee thereof (as permitted under
the respective Tranche A Participation Agreements).
"TRANCHE A PARTICIPATION AGENT" means ABN AMRO Bank N.V., as Tranche A1
Participation Agent and Tranche A2 Participation Agent under the Tranche A1
Participation Agreement and Tranche A2 Participation Agreement, respectively.
"TRANCHE A PARTICIPATION AGREEMENTS" means, collectively, the Tranche
A1 Participation Agreement and the Tranche A2 Participation Agreement.
"TRANCHE A1" means the financing provided to the Issuer by the
Purchasers under their Tranche A1 Commitments.
"TRANCHE A1 COMMITMENT" means, with respect to the Initial Purchaser
and the Tranche A1 Participants, the aggregate amount set forth opposite their
names in Schedule 1 to the Tranche A1 Participation Agreements.
"TRANCHE A1 NON-PARTICIPATED INTEREST" means any interest in the Notes
in respect of Tranche A1 other than the Tranche A1 Participations.
"TRANCHE A1 PARTICIPATION" means any participation in any Notes and the
Initial Purchaser Commitment sold pursuant to the Tranche A1 Participation
Agreements.
Appendix
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"TRANCHE A1 PARTICIPATION AGREEMENT" means the two agreements,
substantially in the form of Exhibit J-1, dated as of August 10, 2001 among ABN
AMRO Bank N.V., as Administrative Agent, Initial Purchaser and Tranche A1
Participation Agent, the Tranche A1 Participants party thereto, the Issuer and
the Guarantor, in each case relating to Bank Note One or Bank Note Two.
"TRANCHE A2" means the financing provided to the Issuer by the
Purchasers under their Tranche A2 Commitments.
"TRANCHE A2 COMMITMENT" means, with respect to the Initial Purchaser
and the Tranche A2 Participants, the aggregate amount set forth opposite their
names in Schedule 1 to the Tranche A2 Participation Agreements.
"TRANCHE A2 NON-PARTICIPATED INTEREST" means any interest in the Notes
in respect of Tranche A2 other than the Tranche A2 Participations.
"TRANCHE A2 PARTICIPATION" means any participation in any Notes and the
Initial Purchaser Commitment sold pursuant to the Tranche A2 Participation
Agreements.
"TRANCHE A2 PARTICIPATION AGREEMENT" means the two agreements,
substantially in the form of Exhibit J-2, dated as of August 10, 2001 among ABN
AMRO Bank N.V., as Administrative Agent, Initial Purchaser and Tranche A2
Participation Agent, the Tranche A2 Participants party thereto, the Issuer and
the Guarantor, in each case relating to Bank Note One or Bank Note Two.
"TRANCHE B" means the financing provided to the Issuer by the
Purchasers under their Tranche B1 Commitments, Tranche B2 Commitments and
Tranche B3 Commitments.
"TRANCHE B INSUREDS" means the Tranche B Participants (including the
Initial Purchaser to the extent of the Tranche B Non-Participated Interests)
that elect to become beneficiaries under the Required Political Risk Policy in
accordance with the respective Tranche B Participation Agreements.
"TRANCHE B NON-PARTICIPATED INTERESTS" means, collectively, the Tranche
B1 Non-Participated Interest, the Tranche B2 Non-Participated Interest and the
Tranche B3 Non-Participated Interest.
"TRANCHE B PARTICIPANTS" means the Participants party to the respective
Tranche B Participation Agreements and each Assignee thereof (as permitted under
the respective Tranche B Participation Agreements).
"TRANCHE B PARTICIPATION" means any participation in any Notes and the
Initial Purchaser Commitment sold pursuant to the Tranche B Participation
Agreements.
"TRANCHE B PARTICIPATION AGENT" means ABN AMRO Bank N.V., as Tranche B
Participation Agent under the Tranche B Participation Agreements.
Appendix
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"TRANCHE B PARTICIPATION AGREEMENTS" means, collectively, the Tranche
B1 Participation Agreements, the Tranche B2 Participation Agreements and the
Tranche B3 Participation Agreements.
"TRANCHE B1" means the financing provided to the Issuer by the
Purchasers under their Tranche B1 Commitments.
"TRANCHE B1 COMMITMENT" means, with respect to the Initial Purchaser
and the Tranche B1 Participants, the aggregate amount set forth opposite their
names in Schedule 1 to the Tranche B1 Participation Agreements.
"TRANCHE B1 NON-PARTICIPATED INTEREST" means any interest in the Notes
in respect of Tranche B1 other than the Tranche B1 Participations.
"TRANCHE B1 PARTICIPATION" means any participation in any Notes and the
Initial Purchaser Commitment sold pursuant to the Tranche B1 Participation
Agreements.
"TRANCHE B1 PARTICIPATION AGREEMENT" means the two agreements,
substantially in the form of Exhibit J-3, dated as of August 10, 2001 among ABN
AMRO Bank N.V., as Administrative Agent, Initial Purchaser and Tranche B1
Participation Agent, the Tranche B1 Participants party thereto, the Issuer and
the Guarantor, in each case relating to Bank Note One or Bank Note Two.
"TRANCHE B2" means the financing provided to the Issuer by the
Purchasers under their Tranche B2 Commitments.
"TRANCHE B2 COMMITMENT" means, with respect to the Initial Purchaser
and the Tranche B2 Participants, the aggregate amount set forth opposite their
names in Schedule 1 to the Tranche B2 Participation Agreements.
"TRANCHE B2 NON-PARTICIPATED INTEREST" means any interest in the Notes
in respect of Tranche B2 other than the Tranche B2 Participations.
"TRANCHE B2 PARTICIPATION" means any participation in any Notes and the
Initial Purchaser Commitment sold pursuant to the Tranche B2 Participation
Agreements.
"TRANCHE B2 PARTICIPATION AGREEMENT" means the two agreements,
substantially in the form of Exhibit J-4, dated as of August 10, 2001 among ABN
AMRO Bank N.V., as Administrative Agent, Initial Purchaser and Tranche B2
Participation Agent, the Tranche B2 Participants party thereto, the Issuer and
the Guarantor, in each case relating to Bank Note One or Bank Note Two.
"TRANCHE B3" means the financing provided to the Issuer by the
Purchasers under their Tranche B3 Commitments.
"TRANCHE B3 COMMITMENT" means, with respect to the Initial Purchaser
and the Tranche B3 Participants, the aggregate amount set forth opposite their
names in Schedule 1 to the Tranche B3 Participation Agreements.
Appendix
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"TRANCHE B3 NON-PARTICIPATED INTEREST" means any interest in the Notes
in respect of Tranche B3 other than the Tranche B3 Participations.
"TRANCHE B3 PARTICIPATION" means any participation in any Notes and the
Initial Purchaser Commitment sold pursuant to the Tranche B3 Participation
Agreements.
"TRANCHE B3 PARTICIPATION AGREEMENT" means the two agreements,
substantially in the form of Exhibit J-5, dated as of August 10, 2001 among ABN
AMRO Bank N.V., as Administrative Agent, Initial Purchaser and Tranche B
Participation Agent, the Tranche B Participants party thereto, the Issuer and
the Guarantor, in each case relating to Bank Note One or Bank Note Two.
"TRANCHE C" means the financing provided to the Issuer by the
Purchasers under their Tranche C Commitments.
"TRANCHE C COMMITMENT" means, with respect to the Initial Purchaser and
the Tranche C Participants, the aggregate amount set forth opposite their names
in Schedule 1 to the Tranche C Participation Agreements.
"TRANCHE C NON-PARTICIPATED INTEREST" means any interest in the Notes
in respect of Tranche C other than the Tranche C Participations.
"TRANCHE C PARTICIPANTS" means the Participants party to the Tranche C
Participation Agreement and each Assignee thereof (as permitted under the
Tranche C Participation Agreements).
"TRANCHE C PARTICIPATION" means any participation in any Notes and the
Initial Purchaser Commitment sold pursuant to the Tranche C Participation
Agreements.
"TRANCHE C PARTICIPATION AGENT" means ABN AMRO Bank N.V., as Tranche C
Participation Agent under the Tranche C Participation Agreements.
"TRANCHE C PARTICIPATION AGREEMENT" means the two agreements,
substantially in the form of Exhibit J-6, dated as of August 10, 2001 among ABN
AMRO Bank N.V., as Administrative Agent, Initial Purchaser and Tranche C
Participation Agent, the Tranche C Participants party thereto, the Issuer and
the Guarantor, in each case relating to Bank Note One or Bank Note Two.
"TRANCHE D" means the financing provided to the Issuer by the
Purchasers under their Tranche D Commitments.
"TRANCHE D AFFILIATE" means, in each case, subject to the consent of
the Issuer or the Guarantor (such consent not to be unreasonably withheld) (i)
in the case of the Alcatel Lenders or the Alcatel Suppliers, any direct or
indirect Subsidiary of Alcatel, (ii) in the case of the Nokia Lenders or the
Nokia Supplier, any direct or indirect Subsidiary of Nokia, and (iii) in the
case of the Siemens Lenders or the Siemens Supplier, any direct or indirect
Subsidiary of Siemens.
Appendix
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"TRANCHE D COMMITMENT" means, with respect to each Tranche D Lender,
its agreement to make Purchases of Notes or Tranche D Participations hereunder
not to exceed the following respective amounts:
Nokia Lenders: $425,000,000
Siemens Lenders: $160,000,000
Alcatel Lenders: $140,000,000
"TRANCHE D - ALCATEL NOTE" has the meaning set forth in Section
2.01(d).
"TRANCHE D ALLOCATION AMOUNT" has the meaning set forth in Section
2.01(i).
"TRANCHE D LENDERS" means the Alcatel Lenders, the Nokia Lenders and
the Siemens Lenders. For ease of reference herein, reference to the Tranche D
Lender corresponding to a Supplier shall mean (i) the Alcatel Lenders in the
case of the Alcatel Supplier, (ii) the Nokia Lenders in the case of the Nokia
Supplier and (iii) the Siemens Lenders in the case of the Siemens Supplier.
"TRANCHE D - NOKIA NOTE" has the meaning set forth in Section 2.01(d).
"TRANCHE D NOTES" means, collectively, the Tranche D-Nokia Note, the
Tranche D-Siemens Note and the Tranche D-Alcatel Note; a "TRANCHE D NOTE," with
respect to the Nokia Lenders, means the Tranche D-Nokia Note, with respect to
the Siemens Lenders, means the Tranche D-Siemens Note and, with respect to the
Alcatel Lenders, means the Tranche D-Alcatel Note.
"TRANCHE D PARTICIPANTS" means the Participants party to the Tranche D
Participation Agreements and each assignee thereof (as permitted under the
respective Tranche D Participation Agreements.
"TRANCHE D PARTICIPATION" means any participation in a Tranche D Note
held by a Tranche D Lender, whether such participation is held directly through
such Tranche D Note or through a Tranche D Participation Agreement.
"TRANCHE D PARTICIPATION AGREEMENT" means each of the three
agreements, each substantially in the form of Exhibit J-7, dated as of August
10, 2001 among ABN AMRO Bank N.V., as Administrative Agent and Initial
Purchaser, the Issuer and the Guarantor and, under the respective agreements,
Nokia, Siemens and Electro Banque (an Affiliate of Alcatel).
"TRANCHE D - SIEMENS NOTE" has the meaning set forth in Section
2.01(d).
"TRANCHE D VOTING INTERESTS" means the aggregate principal amount of
the Tranche D Participations (including Notes purchased in lieu of a Tranche D
Participation) (i) including the principal amount of any undrawn Commitments and
each Tranche D Note purchased related to such Commitments and (ii) excluding any
such principal amount (A) beneficially held by any Non-Voting Person, (B)
guaranteed by any Non-Voting Person, except pursuant to any guarantee by the
Issuer or its Affiliates set forth in, or required by, the Financing Documents
or (C) subject
Appendix
-24-
to any voting agreement or other requirement to consult with, or take direction
from, any Non-Voting Person with respect to any proposed vote under the
Financing Documents.
"TRANCHE INTERESTS" means, collectively, the interests of the
Purchasers under Tranche A, Tranche B, Tranche C and Tranche D under all Notes
outstanding under this Agreement.
"TRANSACTION DOCUMENTS" means the Financing Documents and the Other
Transaction Documents.
"UNITED STATES" means the United States of America, including the
States and the District of Columbia, but excluding its territories and
possessions.
"U.S. COLLATERAL ACCOUNT" means the account no. 456062547741
established by the U.S. Collateral Agent and maintained in the name of the U.S.
Collateral Agent pursuant to the Security Agreement.
"U.S. COLLATERAL AGENT" means ABN AMRO Bank N.V., New York, in its
capacity as U.S. Collateral Agent for the Secured Parties.
"VENDOR FINANCING" means any secured or unsecured indebtedness of the
Issuer or any of its Subsidiaries (other than Debt permitted by Section 5.10(g))
arranged, directly or indirectly (whether through incurrence by the Guarantor or
otherwise) by a Qualified Vendor incurred for the purpose of purchasing
telecommunications goods or services from such Qualified Vendor, provided that
the financing provided under any Vendor Financing shall (i) not be guaranteed by
any Affiliate of the Guarantor that does also not provide a similar guarantee to
the Secured Parties, (ii) not be secured by any collateral that is not also
provided for the ratable benefit of all Secured Parties hereunder, (iii) not
provide for the final payment of principal thereof on a Principal Payment Date
occurring earlier than the latest Principal Payment Date, and not provide for an
amortization schedule that has a weighted average life earlier than the weighted
average life derived from the Principal Payment Dates, without providing for the
ratable repayment of the principal of the Notes on such dates, (iv) not provide
for the payment of interest to the creditors thereunder at a rate higher than
the rate set forth in Section 2.05 hereof without providing for the payment of
interest at such higher rate with respect to the Notes issued hereunder or (v)
not contain any other term that is materially more favorable to the creditors
thereunder (in terms of pricing, tenors, fees, structure, collateral or
guarantees) than those offered to the Secured Parties under the terms of this
Agreement without extending such terms ratably to the Secured Parties.
"VOTING INTERESTS" means, as of any date, the sum of the Bank Voting
Interests and the Tranche D Voting Interests.
"WHOLLY-OWNED SUBSIDIARY" means, with respect to any Person, any
Subsidiary of such Person of which 100% of the capital stock (except for
directors' qualifying shares, and any one share issued to a Person other than
such Person or any of its Wholly-Owned Subsidiaries to qualify such Subsidiary
as a "limitada" or other relevant juridical entity under applicable law) is
owned directly by such Person or through one or more of its other Wholly-Owned
Subsidiaries.
"WORKING CAPITAL AMOUNT" has the meaning set forth in Section 2.01(b).
▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇-▇
FORM OF BANK NOTE ONE
EXHIBIT A-2
FORM OF BANK NOTE TWO
EXHIBIT A-3
FORM OF TRANCHE D-NOKIA NOTE
EXHIBIT A-4
FORM OF TRANCHE D-SIEMENS NOTE
EXHIBIT A-5
FORM OF TRANCHE D-ALCATEL NOTE
EXHIBIT B-1
FORM OF NOTICE OF DISBURSEMENT
EXHIBIT B-2
FORM OF NOTICE OF PURCHASE
EXHIBIT C-1
MATTERS COVERED BY OPINION OF SPECIAL NEW YORK COUNSEL FOR THE
ISSUER AND THE GUARANTOR
EXHIBIT C-2
MATTERS COVERED BY OPINION OF SPECIAL BRAZILIAN COUNSEL
FOR THE ISSUER AND THE GUARANTOR
EXHIBIT C-3
MATTERS COVERED BY OPINION OF SPECIAL BRAZILIAN COUNSEL TO
THE TRANCHE D LENDERS
EXHIBIT C-4
MATTERS COVERED BY OPINION OF SPECIAL
NEW YORK COUNSEL TO NOKIA
EXHIBIT C-5
MATTERS COVERED BY OPINION OF FINNISH COUNSEL TO NOKIA
EXHIBIT C-6
MATTERS COVERED BY OPINION OF SPECIAL NEW YORK COUNSEL TO
SIEMENS AND ALCATEL
EXHIBIT C-7
MATTERS COVERED BY OPINION OF GERMAN COUNSEL TO SIEMENS
EXHIBIT C-8
MATTERS COVERED BY OPINION OF FRENCH COUNSEL TO ALCATEL
EXHIBIT D-1
MATTERS COVERED BY OPINION OF SPECIAL NEW YORK COUNSEL TO
THE INITIAL PURCHASER
EXHIBIT D-2
MATTERS COVERED BY OPINION OF SPECIAL BRAZILIAN COUNSEL TO
THE INITIAL PURCHASER
EXHIBIT E
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT F
FORM OF SECURITY AGREEMENT
EXHIBIT G
FORM OF EQUIPMENT PLEDGE AGREEMENT
EXHIBIT H-1
FORM OF SPECIAL PURPOSE ACCOUNT PLEDGE AGREEMENT
EXHIBIT H-2
FORM OF SUPPLIER ACCOUNT PLEDGE AGREEMENT
EXHIBIT I
FORM OF MORTGAGE DEED
Appendix
-2-
EXHIBIT J-1
FORM OF TRANCHE A1 PARTICIPATION AGREEMENT
Appendix
-3-
EXHIBIT J-2
FORM OF TRANCHE A2 PARTICIPATION AGREEMENT
EXHIBIT J-3
FORM OF TRANCHE B1 PARTICIPATION AGREEMENT
EXHIBIT J-4
FORM OF TRANCHE B2 PARTICIPATION AGREEMENT
EXHIBIT J-5
FORM OF TRANCHE B3 PARTICIPATION AGREEMENT
EXHIBIT J-6
FORM OF TRANCHE C PARTICIPATION AGREEMENT
EXHIBIT J-7
FORM OF TRANCHE D PARTICIPATION AGREEMENT
EXHIBIT K
FORM OF OFFICERS' CERTIFICATE