FORM OF INTERNATIONAL UNDERWRITING AGREEMENT
100,800,000 SHARES
COMPANHIA DE SANEAMENTO DO PARANA - SANEPAR
NON-VOTING PREFERRED SHARES, NO PAR VALUE,
IN THE FORM OF AMERICAN DEPOSITARY SHARES
INTERNATIONAL UNDERWRITING AGREEMENT
[Insert date]
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXXX XXXXX XXXXXX INC.
ABN AMRO ROTHSCHILD LLC,
As Representatives (the "Representatives")
of the Several International Underwriters,
Dear Sirs:
1. Introductory. Companhia de Saneamento do Parana - SANEPAR, a mixed
capital company (sociedade de economia mista) incorporated under the laws of
Brazil ("Company"), proposes to issue and sell ("International Offering") to the
several Underwriters named in Schedule A hereto ("International Underwriters")
10,080,000 American Depositary Shares ("International Firm Securities in ADS
form") , each American Depositary Share ("ADS") representing ten of the
Company's non-voting preferred shares, no par value ("Securities"), all or part
of which may be delivered in the form of preferred shares at the Underwriters'
election as hereinafter provided. The International Firm Securities in ADS form
and any Securities delivered in the form of preferred shares in lieu thereof as
herein provided are hereinafter called the "International Firm Securities". The
ADSs purchased by the International Underwriters will be evidenced by American
Depositary Receipts ("ADRs") to be issued pursuant to a Deposit Agreement dated
as of April __, 2002 ("Deposit Agreement"), entered into among the Company, The
Bank of New York, as depositary ("Depositary"), and all holders from time to
time of the ADRs.
It is understood that the Company is concurrently entering into a
Brazilian Underwriting Agreement dated the date hereof ("Brazilian Underwriting
Agreement"),
with Banco de Investimentos Credit Suisse First Boston S.A., Banco Citibank
S.A., Banco ABN AMRO Real S.A., BB Banco de Investimento S.A. and the other
Brazilian underwriters named therein ("Brazilian Underwriters") relating to the
concurrent offering and sale of Securities ("Brazilian Securities") in Brazil
("Brazilian Offering").
In addition, as set forth below, the Company proposes to issue and sell
to the International Underwriters, at the option of the International
Underwriters, an aggregate of not more than 2,159,100 additional ADSs
("International Optional Securities in ADS form"), all or part of which may be
delivered in the form of preferred shares at the International Underwriters'
election as hereinafter provided. The International Firm Securities and the
International Optional Securities are hereinafter called the "International
Securities"; the International Firm Securities and the Brazilian Securities are
hereinafter called the "Firm Securities". The International Securities and the
Brazilian Securities are collectively referred to as the "Offered Securities".
Whenever computations are contemplated herein that involve both numbers of ADSs
and numbers of shares of Securities in the form of preferred shares, they shall
be made on a consistent basis, by first converting the number of ADSs into the
number of Securities in the form of preferred shares they represent.
To provide for the coordination of their activities, the International
Underwriters and the Brazilian Underwriters have entered into an Agreement
Between International Underwriters and Brazilian Underwriters which permits
them, among other things, to sell the Offered Securities to each other for
purposes of resale.
Two forms of prospectus are to be used in connection with the offering
and sale of the International Securities and the Brazilian Securities
contemplated by the foregoing, one relating to the International Offering and
one relating to the Brazilian Offering. The prospectus relating to the Brazilian
Offering will be substantially similar to the prospectus for the International
Offering, except that it will be in the Portuguese language and for other
changes required to adopt it to conform to Brazilian capital markets practice
and Brazilian law. Except as the context may otherwise require, references
herein to any prospectus whether in preliminary or final form, and whether as
amended and supplemented, shall include the international and Brazilian versions
thereof.
The Company hereby agrees with the several Underwriters as follows:
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the several Underwriters that:
(a) The conditions for use of Form F-1 as set forth in the
General Instructions thereto, have been satisfied.
(b) A registration statement (No. 333-85634) on Form F-1
relating to the International Securities in the form of preferred
shares, including a form of
prospectus relating to the International Securities, has been filed
with the Securities and Exchange Commission ("Commission") and either
(i) has been declared effective under the Securities Act of 1933
("Act") and is not proposed to be amended or (ii) is proposed to be
amended by amendment or post-effective amendment. If such registration
statement (the "initial registration statement") has been declared
effective, either (A) an additional registration statement (the
"additional registration statement") relating to the International
Securities in the form of preferred shares may have been filed with the
Commission pursuant to Rule 462(b) ("Rule 462(b)") under the Act and,
if so filed, has become effective upon filing pursuant to such Rule and
the International Securities all have been duly registered under the
Act pursuant to the initial registration statement and, if applicable,
the additional registration statement or (B) such an additional
registration statement is proposed to be filed with the Commission
pursuant to Rule 462(b) and will become effective upon filing pursuant
to such Rule and upon such filing the International Securities in the
form of preferred shares will all have been duly registered under the
Act pursuant to the initial registration statement and such additional
registration statement. If the Company does not propose to amend the
initial registration statement or if an additional registration
statement has been filed and the Company does not propose to amend it,
and if any post-effective amendment to either such registration
statement has been filed with the Commission prior to the execution and
delivery of this Agreement, the most recent amendment (if any) to each
such registration statement has been declared effective by the
Commission or has become effective upon filing pursuant to Rule 462(c)
("Rule 462(c)") under the Act or, in the case of the additional
registration statement, Rule 462(b). For purposes of this Agreement,
"Effective Time" with respect to the initial registration statement or,
if filed prior to the execution and delivery of this Agreement, the
additional registration statement means (i) if the Company has advised
the Representatives that it does not propose to amend such registration
statement, the date and time as of which such registration statement,
or the most recent post-effective amendment thereto (if any) filed
prior to the execution and delivery of this Agreement, was declared
effective by the Commission or has become effective upon filing
pursuant to Rule 462(c), or (ii) if the Company has advised the
Representatives that it proposes to file an amendment or post-effective
amendment to such registration statement, the date and time as of which
such registration statement, as amended by such amendment or
post-effective amendment, as the case may be, is declared effective by
the Commission. If an additional registration statement has not been
filed prior to the execution and delivery of this Agreement but the
Company has advised the Representatives that it proposes to file one,
"Effective Time" with respect to such additional registration statement
means the date and time as of which such registration statement is
filed and becomes effective pursuant to Rule 462(b). "Effective Date"
with respect to the initial registration statement or the additional
registration statement (if any) means the date of the Effective Time
thereof. The initial registration statement, as amended at its
Effective Time, including all
information contained in the additional registration statement (if any)
and deemed to be a part of the initial registration statement as of the
Effective Time of the additional registration statement pursuant to the
General Instructions of the Form on which it is filed and including all
information (if any) deemed to be a part of the initial registration
statement as of its Effective Time pursuant to Rule 430A(b) ("Rule
430A(b)") under the Act, is hereinafter referred to as the "Initial
Registration Statement". The additional registration statement, as
amended at its Effective Time, including the contents of the initial
registration statement incorporated by reference therein and including
all information (if any) deemed to be a part of the additional
registration statement as of its Effective Time pursuant to Rule
430A(b), is hereinafter referred to as the "Additional Registration
Statement". The Initial Registration Statement and the Additional
Registration Statement are hereinafter referred to collectively as the
"Registration Statements" and individually as a "Registration
Statement". The form of prospectus relating to the International
Securities, as first filed with the Commission pursuant to and in
accordance with Rule 424(b) ("Rule 424(b)") under the Act or (if no
such filing is required) as included in the Registration Statement, is
hereinafter referred to as the "Prospectus." No document has been or
will be prepared or distributed in reliance on Rule 434 under the Act.
(c) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement:
(i) on the Effective Date of the Initial Registration Statement, the
Initial Registration Statement conformed in all respects to the
requirements of the Act and the rules and regulations of the Commission
("Rules and Regulations") and did not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading,
(ii) on the Effective Date of the Additional Registration Statement (if
any), each Registration Statement conformed, or will conform, in all
respects to the requirements of the Act and the Rules and Regulations
and did not include, or will not include, any untrue statement of a
material fact and did not omit, or will not omit, to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading, and (iii) on the date of this Agreement, the
Initial Registration Statement and, if the Effective Time of the
Additional Registration Statement is prior to the execution and
delivery of this Agreement, the Additional Registration Statement each
conforms, and at the time of filing of the Prospectus pursuant to Rule
424(b) or (if no such filing is required) at the Effective Date of the
Additional Registration Statement in which the Prospectus is included,
each Registration Statement and the Prospectus will conform, in all
respects to the requirements of the Act and the Rules and Regulations,
and none of such documents includes, or will include, any untrue
statement of a material fact or omits, or will omit, to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading. If the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of
this Agreement: on the Effective Date of the Initial Registration
Statement, the Initial Registration Statement and the Prospectus will
conform in all respects to the requirements of the Act and the Rules
and Regulations, none of such documents will include any untrue
statement of a material fact or will omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, and no Additional Registration Statement has
been or will be filed. The two preceding sentences do not apply to
statements in or omissions from a Registration Statement or the
Prospectus based upon written information furnished to the Company by
any International Underwriter through the Representatives specifically
for use therein, it being understood and agreed that the only such
information is that described as such in Section 7(b) hereof.
(d) A registration statement on Form F-6 (No. 333- ) relating
to the ADSs has been filed with the Commission (such registration
statement, including all exhibits thereto, as amended at the time such
registration statement becomes effective, being hereinafter called the
"ADS Registration Statement"); the ADS Registration Statement, as of
its effective date, complied or will comply, and each amendment or
supplement thereto, when it is filed with the Commission or becomes
effective, as the case may be, will comply, in all material respects,
with the applicable requirements of the Act and the Rules and
Regulations, and did not or will not, as of its effective date, contain
any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading.
(e) The Company has been duly incorporated and is validly
existing as a mixed capital company (sociedade de economia mista) in
good standing under the laws of Brazil, with full power and authority
(corporate and other) to own its properties and conduct its business as
described in the Prospectus.
(f) The Company does not have any subsidiaries.
(g) The Company has an authorized and issued capitalization as
set forth in the Prospectus; the Offered Securities, including those
represented by the ADSs, and all other outstanding shares of capital
stock of the Company have been duly authorized; all outstanding shares
of capital stock of the Company are, and, when the Offered Securities
have been delivered and paid for in accordance with this Agreement and
the Brazilian Underwriting Agreement on each Closing Date (as defined
below), such Offered Securities, including those represented by the
ADSs, will have been, validly issued, fully paid and nonassessable and
will conform to the description thereof contained in the Prospectus;
and the shareholders of the Company have no preemptive or similar
rights with respect to the Securities, including those represented by
the ADSs, other than rights that have been waived or otherwise
extinguished with respect to the Offered Securities; except as set
forth in the Prospectus, there are no outstanding securities
convertible into or exchangeable for, or warrants, rights or options to
purchase from the Company, or obligations of the Company to issue, any
class of capital stock of the Company or any such convertible or
exchangeable securities or any such warrants, rights or options; upon
payment and delivery of the Offered Securities being sold by the
Company pursuant to this Agreement and the Brazilian Underwriting
Agreement, the International Underwriters and the Brazilian
Underwriters, respectively, or other persons in whose names ADSs or
Securities are registered will acquire valid and marketable title to
such ADSs or Securities, in each case free and clear of all liens,
encumbrances, preemptive rights and other claims; and there are no
restrictions on transfers of the shares of the Company's capital stock,
including, without limitation, the Offered Securities (other than
restrictions under U.S. and Brazilian securities laws as are generally
applicable).
(h) Upon the deposit of the Securities to be issued by the
Company with or for the account of the Depositary pursuant to the
Deposit Agreement against issuance of the ADRs evidencing ADSs, all
right, title and interest in such Securities, subject to the terms of
the Deposit Agreement, will be transferred to the Depositary free and
clear of all liens, encumbrances, security interests or claims.
(i) The Company has full power and authority to enter into the
Deposit Agreement, and the Deposit Agreement has been duly authorized,
executed and delivered by the Company and, when duly and validly
authorized, executed and delivered by the Depositary, will constitute a
valid and legally binding agreement of the Company enforceable against
the Company in accordance with its terms and subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors'
rights and to general equity principles; upon due issuance by the
Depositary of ADRs evidencing ADSs against the deposit of Securities in
respect thereof in accordance with the Deposit Agreement, such ADRs
will be duly and validly issued and the holders thereof will be
entitled to the rights specified therein and in the Deposit Agreement;
the ADSs representing the Securities will be freely transferable; and
the Deposit Agreement and the ADRs conform to the descriptions thereof
contained in the Registration Statement and the Prospectus.
(j) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person that would give rise to a valid claim against the Company or any
International Underwriter or Brazilian Underwriter for a brokerage
commission, finder's fee or other like payment in connection with this
offering.
(k) Except for the Registration Rights Agreement to be entered
into among the Company and certain of its shareholders ("Registration
Rights Agreement"), there are no contracts, agreements or
understandings between the Company and
any person granting such person the right to require the Company to
file a registration statement under the Act with respect to any
securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities
registered pursuant to a Registration Statement or the ADS Registration
Statement or in any securities being registered pursuant to any other
registration statement filed by the Company under the Act.
(l) The ADSs have been approved for listing on the New York
Stock Exchange subject to notice of issuance, and the Offered
Securities in the form of preferred shares, including those deposited
in respect of ADSs, have been approved for listing on the Bolsa de
Valores de Sao Paulo - BOVESPA ("Sao Paulo Stock Exchange").
(m) No consent, approval, authorization, or order of, or
filing with, any governmental agency or body or any court is required
for the consummation of the transactions contemplated by the Deposit
Agreement, this Agreement or the Brazilian Underwriting Agreement in
connection with the issuance and sale of the Offered Securities by the
Company, including the deposit of any Securities represented by the
ADSs with the Depositary and the issuance of the ADRs evidencing the
ADSs, except (i) as may be required, and will have been obtained or
made prior to or at the First Closing Date (as defined below), from the
Banco Central do Brasil (the Brazilian Central Bank, or the "Central
Bank") and the Comissao de Valores Mobiliarios (the Brazilian
Securities Commission, or the "CVM") relating to the Deposit Agreement,
(ii) as may be required, and will have been obtained or made prior to
or at the First Closing Date, from the CVM relating to the offering of
Securities as provided for in this Agreement and in the Brazilian
Underwriting Agreement, (iii) as may be required, and will have been
obtained or made prior to or at the First Closing Date, from the
Central Bank relating to the payment of the fees and commissions and
the reimbursement of expenses, in each case as contemplated in this
Agreement and in the Deposit Agreement, (iv) for the registration of
the Securities and the ADSs under the Act and such consents, approvals,
authorizations, registrations or qualifications as may be required
under the U.S. Securities Exchange Act of 1934, as amended (the
"Exchange Act") and (v) such as may be required under state securities
laws.
(n) Except as disclosed in the Prospectus (including, without
limitation, the tax on payments of interest on shareholders' equity
described therein), under current laws and regulations of Brazil and
any political subdivision thereof, all dividends and other
distributions (including, without limitation, the payments of interest
on shareholders' equity described therein) declared and payable on the
Offered Securities, including those represented by the ADSs, may be
paid by the Company to the holder thereof in Brazilian reais that may
be converted into foreign currency and freely transferred out of
Brazil, and all such payments made to holders thereof who are
non-residents of Brazil will not be subject to income,
withholding or other taxes under laws and regulations of Brazil or any
political subdivision or taxing authority thereof or therein and will
otherwise be free and clear of any other tax, duty, withholding or
deduction in Brazil or any political subdivision or taxing authority
thereof or therein and without the necessity of obtaining any
governmental authorization in Brazil or any political subdivision or
taxing authority thereof or therein.
(o) The execution, delivery and performance of the Deposit
Agreement, this Agreement and the Brazilian Underwriting Agreement, and
the issuance and sale of the Offered Securities, including the deposit
of any Securities represented by the ADSs with the Depositary and the
issuance of the ADRs evidencing the ADSs, will not (i) conflict with,
result in the creation or imposition of any lien, charge or encumbrance
upon any of the property or assets of the Company pursuant to the terms
of, result in a breach or violation of any of the terms and provisions
of, or constitute a default under, any concession agreement, indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company is a party or by which the Company is
bound or to which any of the properties of the Company is subject, or
(ii) result in a breach or violation of any of the terms and provisions
of, or constitute a default under, any law, any statute, any rule,
regulation, judgment, decree or order of any government, governmental
agency or body or any court, domestic or foreign, having jurisdiction
over the Company or any of its properties or the rules and regulations
of the New York Stock Exchange or the Sao Paulo Stock Exchange, or the
charter or by-laws of the Company, and the Company has full power and
authority to authorize, issue and sell the Offered Securities,
including the ADSs, as contemplated by the Deposit Agreement, this
Agreement and the Brazilian Underwriting Agreement, respectively.
(p) The Company has full power and authority to enter into
this Agreement and the Brazilian Underwriting Agreement, and each of
this Agreement and the Brazilian Underwriting Agreement has been duly
authorized, executed and delivered by the Company and constitutes a
valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors'
rights and to general equity principles, and except that rights to
indemnification may be limited by public policy considerations.
(q) Except as disclosed in the Prospectus, the Company has
good and marketable title to all real properties and interests in real
property (including, without limitation, easements for installing,
operation and maintenance of pipes, pumps and accessory equipment) and
all other properties and assets owned by it, in each case free from
liens, encumbrances and defects ("Liens") that would materially affect
the value thereof or materially interfere with the use made or to
be made thereof by it; and except as disclosed in the Prospectus, the
Company holds all leased real or personal properties under valid and
enforceable leases free of any Liens that would materially interfere
with the use made or to be made thereof by it, and the Company has not
received any notice of any material claim of any sort that has been
asserted by anyone adverse to the rights of the Company in or to any
owned property or interests therein or under any of the leases
described above, or affecting or questioning the rights thereof to the
continued possession of the owned property or interests therein or the
leased premises under any such lease except as would not individually
or in the aggregate have a material adverse effect on the condition
(financial or other), business, properties or results of operations of
the Company ("Material Adverse Effect").
(r) The Company possesses adequate concessions, licenses,
franchises, certificates, authorities or permits or other approvals or
authorizations (collectively, "Approvals") issued by appropriate
governmental agencies or bodies necessary to conduct the business now
operated by it or to own or lease its property or assets, and such
concessions, licenses, franchises, certificates, authorities, permits
and other approvals and authorizations are in full force and effect,
except for Approvals, the non possession of which or non effectiveness
of which would not individually or in the aggregate have a Material
Adverse Effect, and has not received any notice of proceedings relating
to the revocation or modification of any such concession, license,
franchise, certificate, authority or permit or other approval or
authorization that, if determined adversely to the Company, would
individually or in the aggregate have a Material Adverse Effect.
(s) No labor dispute with the employees of the Company, or
with any labor union, exists or, to the knowledge of the Company, is
imminent that might have a Material Adverse Effect.
(t) Except as disclosed in the Prospectus, the Company owns,
possesses or can acquire on reasonable terms, adequate trademarks,
trade names and other rights to inventions, know-how, patents,
copyrights, confidential information and other intellectual property
(collectively, "intellectual property rights") necessary to conduct the
business now operated by it, or presently employed by it, except for
any intellectual property rights, the failure of which to be owned,
possessed or acquired would not, individually or in the aggregate, have
a Material Adverse Effect, and has no reason to believe that the
conduct of its business will conflict with, and has not received any
notice of infringement of or conflict with, asserted rights of others
with respect to any intellectual property rights that, if determined
adversely to the Company, would individually or in the aggregate have a
Material Adverse Effect.
(u) Except in each case as disclosed in the Prospectus, the
Company is not in violation of any statute, any rule, regulation,
decision or order of any governmental agency or body or any court,
domestic or foreign, relating to the
use, disposal or release of hazardous or toxic substances or relating
to the protection or restoration of the environment or human exposure
to hazardous or toxic substances (collectively, "environmental laws"),
and the Company does not own or operate any real property contaminated
with any substance that is subject to any environmental laws, nor is
liable for any off-site disposal or contamination pursuant to any
environmental laws, nor is subject to any claim relating to any
environmental laws, which violation, contamination, liability or claim
would individually or in the aggregate have a Material Adverse Effect;
and, except as disclosed in the Prospectus, the Company is not aware of
any pending investigation which might lead to such a claim. The costs
and liabilities associated with environmental laws (including any
capital or operating expenditures required for clean-up, closure of
properties or compliance with environmental laws or any permit, license
or approval, any related constraints on operating activities and any
potential liabilities to third parties) would not, individually or in
the aggregate, have a Material Adverse Effect.
(v) There are no pending actions, suits or proceedings against
or affecting the Company or any of its properties that, if determined
adversely to the Company, would individually or in the aggregate have a
Material Adverse Effect, or would materially and adversely affect the
ability of the Company to perform its obligations under the Deposit
Agreement, this Agreement or the Brazilian Underwriting Agreement, or
which are otherwise material in the context of the sale of the Offered
Securities; and no such actions, suits or proceedings are threatened
or, to the Company's knowledge, contemplated.
(w) The financial statements included in each Registration
Statement and the Prospectus present fairly the financial position and
shareholders' equity of the Company as of the dates shown and their
results of operations and cash flows for the periods shown, subject to,
in the case of any interim financial statements, any normal recurring
year-end adjustments; and, except as otherwise disclosed in the
Prospectus, such financial statements have been prepared in conformity
with the generally accepted accounting principles in the United States
applied on a consistent basis.
(x) Except as disclosed in or contemplated by the Prospectus,
since the date of the latest audited financial statements included in
the Prospectus there has been no (i) change in the capital stock of the
Company or increase in the short-term debt or the long-term debt
(including the current portion thereof) of the Company or (ii) material
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or government action, order or decree or (iii)
[material adverse change, nor any development or event involving a
prospective material adverse change, in the general affairs, condition
(financial or other), business, properties, prospects, management,
shareholders' equity or results of operations of
the Company], and, except as disclosed in or contemplated by the
Prospectus, the Company has not purchased any of its outstanding
capital stock and there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital
stock.
(y) The Company is not and, after giving effect to the
offering and sale of the Offered Securities and the application of the
proceeds thereof as described in the Prospectus, will not be an
"investment company" as defined in the Investment Company Act of 1940.
(z) Except as described in the Prospectus, the Company has not
sold or issued any Securities during the six-month period preceding the
date of the Prospectus, including any sales pursuant to Rule 144A
under, or under Regulations D of, the Act.
(aa) Ernst & Young, who have certified the financial
statements of the Company, whose report appears in the Prospectus and
who have delivered the letter referred to in Section 6(a) hereof, are
independent public accountants with respect to the Company as required
by the Act and the Rules and Regulations.
(bb) There are no contracts or other documents which are
required to be described in the Prospectus or filed as exhibits to the
Registration Statements by the Act or by the Rules and Regulations
which have not been described in the Prospectus or filed as exhibits to
the Registration Statements.
(cc) No relationship, direct or indirect, exists between or
among the Company on the one hand, and the directors, officers,
shareholders, customers or suppliers of the Company on the other hand,
which is required to be described in the Prospectus which is not so
described.
(dd) The Company has duly filed with the appropriate taxing
authorities all material tax returns, reports and other information
required to be filed by it through the date hereof and has paid all
taxes due thereon and all assessments received by it to the extent that
such taxes have become due, except for any such taxes that are being
contested in good faith and for which adequate reserves are being
maintained in accordance with the generally accepted accounting
principles in the United States and except for any such failure to file
or failure to pay as would not, individually or in the aggregate, have
a Material Adverse Effect, and each such tax return, report or other
information was, when filed, accurate and complete in all material
respects; and, except as described in the Prospectus, there is no tax
deficiency that has been threatened or asserted against the Company or
which might reasonably be expected to be asserted against the Company,
which would result in a Material Adverse Effect.
(ee) To ensure the legality, validity, enforceability or
admissibility into evidence of each of this Agreement, the Brazilian
Underwriting Agreement or the Deposit Agreement in Brazil or any
political subdivision thereof, it is not necessary that this Agreement,
the Brazilian Underwriting Agreement or the Deposit Agreement be
submitted to, filed or recorded with any court or other authority in
Brazil or any political subdivision thereof or that any tax, imposition
or charge be paid in Brazil or any political subdivision thereof on or
in respect of this Agreement, the Brazilian Underwriting Agreement or
the Deposit Agreement, other than court costs, including, without
limitation, filing fees and deposit to guarantee judgment required by
Brazilian law and regulations, except that (A) the signature of the
parties to this Agreement and the Deposit Agreement and any other
document that may be deemed to be or become a party to any such
agreements shall have been notarized by a notary public licensed as
such under the law of the place of signing and the signature of such
notary public (to the extent not located within Brazil) shall have been
authenticated by the Brazilian consular office and each of this
Agreement and the Deposit Agreement shall have been registered with the
appropriate Registry of Deeds and Documents in Brazil, (B) each of this
Agreement and the Deposit Agreement shall have been translated into
Portuguese by a sworn translator in Brazil and (C) this Agreement and
the Deposit Agreement, together with their respective sworn Portuguese
translations, shall have been filed with the CVM and the Deposit
Agreement shall have been filed with the Central Bank.
(ff) No stock exchange, stamp or other issuance or transfer
taxes or duties and no capital gains, income, withholding or other
taxes are payable by or on behalf of the International Underwriters or
the Brazilian Underwriters to Brazil or to any political subdivision or
taxing authority thereof or therein in connection with (i) the entering
into or performing this Agreement and the Brazilian Underwriting
Agreement or receiving payments hereunder and thereunder, and the
issuance or sale of the ADSs and the Securities by the Company in
accordance with this Agreement and the Brazilian Underwriting
Agreement, (ii) the deposit with the Depositary of the Securities
against the issuance of ADRs evidencing the ADSs, (iii) the delivery of
the ADSs to or for the respective accounts of the International
Underwriters in the manner contemplated herein, or (iv) the sale and
delivery outside Brazil by the International Underwriters of the ADSs
to the purchasers thereof, other than Brazilian income tax regarding
the International Underwriters whose income is otherwise subject to
taxation in Brazil and Brazilian withholding tax at a rate of 15% (or
25% if the beneficiary is domiciled in a country that does not impose
income tax or where such tax is imposed at a maximum rate of 20%) on
any payments made by the Company to the International Underwriters in
respect of (A) the underwriting commission and (B) fees, costs and
expenses specified in Section 5(h) hereof, in each case as to which
withholding tax the Company shall pay additional amounts pursuant to
Section 5(i) hereof.
(gg) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be
disclosed in or contemplated by the Prospectus, the Company has not
issued or granted any securities, incurred any material liability or
obligation, direct or contingent (other than liabilities and
obligations which were incurred in the ordinary course of business),
nor entered into any material transaction not in the ordinary course of
business.
(hh) The Company (i) is not, and with the giving of notice or
lapse of time or both would not be, in violation of or in default under
its charter or by-laws, (ii) is not in default, and no event has
occurred which, with notice or lapse of time or both, would constitute
such a default, in the due performance or observance of any term,
covenant or condition contained in any concession agreement, any
material agreement, indenture, mortgage or other agreement or
instrument to which it is a party or by which it is bound or to which
any of its property or assets is subject, or (iii) is not in violation
of any law, governmental rule, regulation or court decree to which it
or its property or assets may be subject; except for, in the case of
each of clause (ii) and (iii), for such defaults, events, violations
and failures which would not, individually or in the aggregate, have a
Material Adverse Effect.
(ii) The Company (i) makes and keeps accurate books and
records and (ii) maintains adequate internal accounting controls, in
each case, to permit preparation of its financial statements and to
maintain issued and ongoing accountability for its assets.
(jj) Neither the Company nor, to the Company's knowledge, any
director, officer, agent, employee or other affiliate or other person
associated with or acting on its or the behalf of the Company, has made
any unlawful contribution, gift or other unlawful payment or incurred
any unlawful expense relating to political activity; made any direct or
indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; made any other unlawful
payment or taken any other unlawful action which would have been in
violation of any provision of applicable Brazilian law or of the U.S.
Foreign Corrupt Practices Act of 1977, as amended ("FCPA"), had any of
such persons been subject to the FCPA; or made any bribe, rebate,
payoff, influence payment, kickback or other unlawful payment.
(kk) The Company has not entered and will not enter into any
contractual arrangement with respect to the distribution of the ADSs or
the Securities that are to be sold hereunder or under the Brazilian
Underwriting Agreement except for this Agreement and the Brazilian
Underwriting Agreement and the other arrangements contemplated herein
and therein.
(ll) In connection with the International Offering and the
Brazilian Offering, until the International Underwriters shall have
notified the Company of the completion of any distribution of the ADSs
outside of Brazil, neither the Company nor any of its affiliates has or
will, either alone or with one or more other persons, bid for or
purchase for any account in which it or any of its affiliates has a
beneficial interest in any Securities or any security of the same class
or series as the Securities or any right to purchase any such
securities of the Company ("Securities Equivalents") or attempt to
induce any person to purchase any Securities or Securities Equivalents,
and neither it nor any of its affiliates will make bids or purchases
for the purpose of creating actual, or apparent, active trading in or
of raising the price of the Securities or Securities Equivalents.
Neither the Company nor any of its affiliates has taken or will take,
directly or indirectly, any action designed to or which might
reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the ADSs or the Securities in connection with the
International Offering and the Brazilian Offering.
(mm) Except as set forth in the Prospectus, there are no
limitations under Brazilian law on the rights of holders of Securities,
ADSs or ADRs evidencing ADSs to hold or vote or transfer their
respective securities, and no approvals are currently required in
Brazil (including any foreign exchange or foreign currency approvals)
in order for the Company to pay dividends declared by the Company to
the holders of Securities or ADRs, including the Depositary.
(nn) The Company and its obligations under this Agreement, the
Brazilian Underwriting Agreement and the Deposit Agreement are subject
to civil and commercial law and to suit and neither the Company nor any
of its properties, assets or revenues has any right of immunity under
Brazilian, New York or U.S. Federal law from any legal action, suit or
proceeding, from the giving of any relief in any such legal action,
suit or proceeding, from setoff or counterclaim, from the jurisdiction
of any Brazilian, New York or U.S. Federal court, from service of
process, attachment upon or prior to judgment, or attachment in aid of
execution of judgment, or from execution of a judgment, or other legal
process or proceeding for the giving of any relief or for the
enforcement of a judgment, in any such court, with respect to its
obligations, liabilities or any other matter under or arising out of or
in connection with this Agreement, the Brazilian Underwriting Agreement
and the Deposit Agreement, and, to the extent that the Company or any
of its properties, assets or revenues may have or may hereafter become
entitled to any such right of immunity in any such court in which
proceedings may at any time be commenced, the Company has waived or
will waive such right to the extent permitted by law and has consented
to such relief and enforcement.
(oo) The Company has the power to submit, and pursuant to this
Agreement and the Deposit Agreement, has legally, validly, effectively
and irrevocably submitted to the personal jurisdiction of any U.S.
Federal or state courts sitting in New York City, and has the power to
designate, appoint and empower, and pursuant to this Agreement and the
Deposit Agreement, has legally, validly and effectively designated,
appointed and empowered, an agent for service of process in any action,
suit or proceeding based on or arising under this Agreement and the
Deposit Agreement in any U.S. federal or state courts sitting in New
York City.
(pp) The Company holds 342 concessions in the state of Parana
for the provision of water and wastewater services, and all such
concessions are valid and binding upon the Company and the relevant
granting authorities thereof, enforceable in accordance with their
respective terms, and are in full force and effect, and the Company has
not received any notice of and it is not aware of proceedings relating
to the revocation or modification of any such concession or the related
concession agreement.
(qq) The Company is not, and upon the sale of the
International Securities as contemplated in the Prospectus it will not
be, and intends to conduct its operations so it does not become (at any
time after the sale of the International Securities contemplated by the
Prospectus), a passive foreign investment company ("PFIC") within the
meaning of Section 1297(a) of the United States Internal Revenue Code
of 1986, as amended (the "Code").
(rr) The Company is neither a "foreign personal holding
company" nor a "foreign investment company" within the meaning of
Sections 552(a) and 1246(b), respectively, of the Code.
(ss) All outstanding shares of the capital stock of the
Company, and all securities convertible into or exercisable or
exchangeable for shares of the capital stock of the Company, that are
held by the Company's executive officers, directors or holders of more
than 5% of the shares of the capital stock of the Company are subject
to valid and binding agreements having substantially the form of
[Exhibit A] hereto (the "Lock-up Agreements") that restrict the holders
thereof from offering, selling, contracting to sell, pledging or
otherwise disposing of, directly or indirectly, any shares of the
Company's capital stock or ADSs representing such shares or securities
convertible into or exchangeable or exercisable for any shares of the
Company's capital stock or ADSs representing such shares, entering into
a transaction that would have the same effect, or entering into any
swap, hedge or other arrangement that transfers, in whole or in part,
any of the economic consequences of ownership of the shares of the
Company's capital stock or ADSs representing such shares, whether any
of these transactions are to be settled by delivery of shares of the
Company's capital stock,
ADSs representing such shares or other securities, in cash or
otherwise, or publicly disclosing the intention to make any offer,
sale, pledge or disposition, or to enter into any transaction, swap,
hedge or other arrangement, without, in each case, the prior written
consent of the Representatives for a period of 180 days after the date
the Prospectus.
(tt) As of , the Company had current and accumulated earnings
and profits, as calculated for U.S. Federal income tax purposes, in an
amount in excess of $ .
3. Purchase, Sale and Delivery of Offered Securities. On the basis of
the representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Company agrees to sell to the
International Underwriters, and the International Underwriters agree, severally
and not jointly, to purchase from the Company, at a purchase price of U.S.$ per
ADS, the respective numbers of ADSs constituting the International Firm
Securities set forth opposite the names of the International Underwriters in
Schedule A hereto, it being understood that the International Underwriters may
elect to receive all or a portion of their allotments in the form of Securities
in the form of preferred shares as provided for below.
The Company will deliver the International Firm Securities in ADS form
to the Representatives for the accounts of the International Underwriters
against payment of the purchase price Federal (same day) funds by wire transfer
to an account at a bank designated by the Company and reasonably acceptable to
the Representatives, at the office of Cravath, Swaine & Xxxxx, 000 Xxxxxx
Xxxxxx, Xxx Xxxx, XX 00000, at 9:00 A.M., New York time, on May [ ], 2002, or at
such other time not later than seven full business days thereafter as the
Representatives and the Company determine, such time being herein referred to as
the "First Closing Date". For purposes of Rule 15c6-1 under the Exchange Act,
the First Closing Date (if later than the otherwise applicable settlement date)
shall be the settlement date for payment of funds and delivery of securities for
all the International Securities sold pursuant to the International Offering.
The International Firm Securities in ADS form shall be delivered in the form of
one or more global ADRs,
in registered definitive form, to be deposited with The Depository Trust
Company, or in such other manner as shall be agreed between the Company and the
Representatives, in such denominations and registered in such names as the
Representatives request and will be made available for checking and packaging at
the above office at least 24 hours prior to the First Closing Date.
In addition, upon written notice from the Representatives given to the
Company from time to time not more than 30 days subsequent to the date of the
Prospectus, the International Underwriters may purchase all or less than all of
the International Optional Securities at the purchase price per ADS to be paid
for the International Firm Securities. The Company agrees to sell to the
International Underwriters such International Optional Securities and the
Underwriters agree, severally and not jointly, to purchase such International
Optional Securities as are indicated in any such written notice. Such
International Optional Securities shall be purchased for the account of each
International Underwriter in the same proportion as the number of ADSs, without
giving effect to the taking of Securities in the form of preferred shares in
lieu thereof, constituting the International Firm Securities set forth opposite
such International Underwriter's name bears to the total number of ADSs, without
giving effect to the taking of Securities in the form of preferred shares in
lieu thereof, constituting the International Firm Securities (subject to
adjustment by the Representatives to eliminate fractions) and may be purchased
by the International Underwriters only for the purpose of covering
over-allotments made in connection with the sale of the International Firm
Securities. No International Optional Securities shall be sold or delivered
unless the International Firm Securities previously have been, or simultaneously
are, sold and delivered. The right to purchase the International Optional
Securities or any portion thereof, to the extent not previously exercised may be
surrendered and terminated at any time upon notice by the Representatives on
behalf of the International Underwriters to the Company. It is understood that
the Representatives are authorized to make payment for and accept delivery of
such International Optional Securities on behalf of the International
Underwriters pursuant to the terms of the Representatives' instructions to the
Company.
Each time for the delivery of and payment for the International
Optional Securities, being herein referred to as an "Optional Closing Date",
which may be the First Closing Date (the First Closing Date and each Optional
Closing Date, if any, being sometimes referred to as a "Closing Date"), shall be
determined by the Representatives but shall be not later than three full
business days after written notice of election to purchase International
Optional Securities is given. The Company will deliver the International
Optional Securities in ADS form being purchased on each Optional Closing Date to
the Representatives for the accounts of the several International Underwriters,
against payment of the purchase price therefor in Federal (same day) funds by
wire transfer to an account at a bank designated by the Company and reasonably
acceptable to the Representatives, at the office of Cravath, Swaine & Xxxxx, 000
Xxxxxx Xxxxxx, Xxx Xxxx, XX 00000. The International Optional Securities in ADS
form will be in the same form as the International Firm Securities in ADS form,
in such denominations and
registered in such names as the Representatives request upon reasonable notice
prior to such Optional Closing Date and will be made available for checking and
packaging at the above office, at a reasonable time in advance of such Optional
Closing Date.
With respect to all or any portion of the International Securities in
ADS form to be purchased and sold hereunder, the Representatives, on behalf of
the several International Underwriters, may elect to have Securities in the form
of preferred shares in respect of such International Securities delivered and
paid for hereunder, in lieu of, and in satisfaction of the Company's obligation
to sell to the several International Underwriters, and the several International
Underwriters' obligations to purchase, such International Securities in ADS
form. Notice of such election with respect to any Closing Date shall be given by
the Representatives to the Company at least 48 hours prior to the related
Closing Date. The purchase price for any Securities in the form of preferred
shares so delivered in lieu of any International Securities in ADS form shall be
the purchase price in U.S. dollars which would otherwise have been applicable
hereunder to such International Securities in ADS form, adjusted on the basis of
the ratio of ten shares of Securities in the form of preferred shares to one
ADS. The International Securities in the form of preferred shares so to be
delivered will be delivered or caused to be delivered to the Representatives for
the accounts of the International Underwriters at the office of Cravath, Swaine
& Xxxxx, 000 Xxxxxx Xxxxxx, Xxx Xxxx, XX 00000. The certificates for
International Securities in the form of preferred shares will be in definitive
form, in such denominations and registered in such names as the Representatives
request and will be made available for checking and packaging at the above
office of Cravath, Swaine & Xxxxx a reasonable time in advance of the related
Closing Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the International Securities for sale to the
public as set forth in the Prospectus.
5. Certain Agreements of the Company. The Company agrees with the
several International Underwriters that:
(a) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, the
Company will file the Prospectus with the Commission pursuant to and in
accordance with subparagraph (1) (or, if applicable and if consented to
by the Representatives, subparagraph (4)) of Rule 424(b) not later than
the earlier of (A) the second business day following the execution and
delivery of this Agreement or (B) the fifteenth business day after the
Effective Date of the Initial Registration Statement.
The Company will advise the Representatives promptly of any
such filing pursuant to Rule 424(b). If the Effective Time of the
Initial Registration Statement is prior to the execution and delivery
of this Agreement and an additional registration statement is necessary
to register a portion of the
International Securities under the Act but the Effective Time thereof
has not occurred as of such execution and delivery, the Company will
file the additional registration statement or, if filed, will file a
post-effective amendment thereto with the Commission pursuant to and in
accordance with Rule 462(b) on or prior to 10:00 P.M., New York time,
on the date of this Agreement or, if earlier, on or prior to the time
the Prospectus is printed and distributed to any International
Underwriter, or will make such filing at such later date as shall have
been consented to by the Representatives.
(b) The Company will advise the Representatives promptly of
any proposal to amend or supplement the initial or any additional
registration statement as filed or the related prospectus or the
Initial Registration Statement, the Additional Registration Statement
(if any) or the Prospectus or the ADS Registration Statement and will
not effect such amendment or supplementation without the
Representatives' prior consent, which shall not be unreasonably
withheld or delayed; and the Company will also advise the
Representatives promptly of the effectiveness of each Registration
Statement (if its Effective Time is subsequent to the execution and
delivery of this Agreement) and the ADS Registration Statement (if its
effectiveness is subsequent to the execution and delivery of this
Agreement) and of any amendment or supplementation of a Registration
Statement or the Prospectus or the ADS Registration Statement and of
the institution by the Commission of any stop order proceedings in
respect of a Registration Statement or the ADS Registration Statement
and will use its best efforts to prevent the issuance of any such stop
order and to obtain as soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the
International Securities is required to be delivered under the Act in
connection with sales by any International Underwriter or dealer, any
event occurs as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, or if it is necessary at any time to amend the
Prospectus to comply with the Act, the Company will promptly notify the
Representatives of such event and will promptly prepare and file with
the Commission, at its own expense, an amendment or supplement which
will correct such statement or omission or an amendment which will
effect such compliance. Neither the Representatives' consent to, nor
the International Underwriters' delivery of, any such amendment or
supplement shall constitute a waiver of any of the conditions set forth
in Section 6.
(d) As soon as practicable, but not later than the
Availability Date (as defined below), the Company will make generally
available to its securityholders an earnings statement covering a
period of at least 12 months beginning after the
Effective Date of the Initial Registration Statement (or, if later, the
Effective Date of the Additional Registration Statement) which will
satisfy the provisions of Section 11(a) of the Act. For the purpose of
the preceding sentence, "Availability Date" means the 45th day after
the end of the fourth fiscal quarter following the fiscal quarter that
includes such Effective Date, except that, if such fourth fiscal
quarter is the last quarter of the Company's fiscal year, "Availability
Date" means the 90th day after the end of such fourth fiscal quarter.
(e) The Company will furnish to the Representatives copies of
the Registration Statement and the ADS Registration Statement (four (4)
of each of which will be signed and will include all exhibits), each
preliminary prospectus relating to the International Securities, and,
so long as a prospectus relating to the International Securities is
required to be delivered under the Act in connection with sales by any
International Underwriter or dealer, the Prospectus and all amendments
and supplements to such documents, in each case in such quantities as
the Representatives reasonably request. The Prospectus shall be so
furnished in New York City on or prior to 5:00 P.M., New York time, on
the business day following the later of the execution and delivery of
this Agreement or the Effective Time of the Initial Registration
Statement. All other such documents shall be so furnished as soon as
available. The Company will pay the expenses of printing and
distributing to the International Underwriters all such documents.
(f) The Company will arrange for the qualification of the
International Securities for sale under the laws of such jurisdictions
in the United States as the Representatives designate and will continue
such qualifications in effect so long as required for the distribution.
(g) During the period of two (2) years hereafter, the Company
will furnish to the Representatives and, upon request, to each of the
other International Underwriters, as soon as practicable after the end
of each fiscal year, a copy of its annual report to stockholders for
such year and any English language version or translation thereof ; and
the Company will furnish to the Representatives (i) as soon as
available, copies of the Portuguese language versions, and any English
language versions or translations, of each report and any definitive
proxy statement of the Company filed with the Commission under the
Exchange Act or mailed to stockholders, all materials, notices and
communications furnished by the Company to its stockholders, public
reports and other reports and financials furnished by the Company to
the Commission, the New York Stock Exchange, the CVM, the Sao Paulo
Stock Exchange and the Depositary, and all quarterly and other reports,
that are made generally available to holders of the shares of the
capital stock of the Company, and (ii) from time to time, such other
information concerning the Company as the Representatives may
reasonably request.
(h) (i) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Company
will pay or cause to be paid all costs and expenses incident to the
performance of its obligations under this Agreement, the Brazilian
Underwriting Agreement and the Deposit Agreement, including, without
limiting the generality of the foregoing, all costs and expenses
incident to or incurred in connection with: the preparation, issuance,
execution and delivery of the Offered Securities; the preparation,
printing and filing under the Act of the Registration Statement, the
Additional Registration Statement (if any), the Prospectus and the ADS
Registration Statement (including in each case all exhibits, amendments
and supplements thereto); for any filing fees and other expenses
(including fees and disbursements of counsel) in connection with
qualification of the International Securities for sale under the laws
of such jurisdictions in the United States as the Representatives
designate and the printing of memoranda relating thereto; for the
filing fee incidental to, and the reasonable fees and disbursements of
counsel to the International Underwriters in connection with, the
review by the National Association of Securities Dealers, Inc. ("NASD")
of the International Securities; the registration of the Securities and
the ADSs with the Commission and the CVM, the receipt of approvals and
authorizations of the CVM, the Central Bank, the Commission and the
NASD and the listing of the Securities and the ADSs on the Sao Paulo
Stock Exchange and the New York Stock Exchange, as the case may be; the
printing (including word processing and duplication costs) and
distribution of the Securities, the ADRs, the Deposit Agreement, this
Agreement, the Brazilian Underwriting Agreement and all other documents
reasonably required in connection with the issuance, purchase and
initial offering of the Securities and the ADSs; the printing and
distribution of copies of the Registration Statement, the ADS
Registration Statement, preliminary prospectuses and the Prospectus
(including any amendments and supplements thereto) to the International
Underwriters, including mailing and shipping; the preparation of ADR
certificates evidencing the ADSs; the appointment of an authorized
agent described in Section 15 hereof; as well as any travel expenses of
the Company's officers and employees and any other expenses of the
Company in connection with attending or hosting meetings with
prospective purchasers of the Offered Securities, the costs, fees and
expenses of any transfer agent or registrar, and the fees and expenses
of Ernst & Young, the Company's independent accountants referred to in
Section 6(a) hereof, and the Company's counsel. (ii) Whether or not the
transactions contemplated in this Agreement are consummated or this
Agreement is terminated, and subject to the provisions of Section 10
hereof, the Company will pay to the Representatives on behalf of the
International Underwriters and the Brazilian Underwriters on the First
Closing Date the sum of up to U.S.$500,000 as the sole reimbursement of
the Underwriters' costs and expenses arising out of or in connection
with the execution, delivery and performance of this Agreement,
including, without limitation, expenses related to the evaluation of
the Company; travel expenses of the International Underwriters' and
Brazilian Underwriters'
officers and employees and any other expenses of the International
Underwriters and Brazilian Underwriters in connection with attending or
hosting drafting sessions, due diligence meetings, and meetings with
prospective purchasers of the Offered Securities; and fees and
disbursements of U.S. counsel for the International Underwriters and
Brazilian counsel for the International and Brazilian Underwriters.
Such amount, plus any amount described in clause (i) paid by the
International Underwriters on behalf of the Company, may be deducted
from the purchase price for the International Securities set forth in
Section 3.
(i) The Company will indemnify and hold harmless the
International Underwriters against any documentary, stamp or similar
issuance tax, including any interest and penalties, on the creation,
issuance and sale of the Offered Securities and on the execution and
delivery of this Agreement, the Brazilian Underwriting Agreement and
the Deposit Agreement. All payments to be made by the Company hereunder
shall be made without withholding or deduction for or on account of any
present or future taxes, duties or governmental charges whatsoever
unless the Company is compelled by law to deduct or withhold such
taxes, duties or charges. In that event, the Company shall pay such
additional amounts as may be necessary in order that the net amounts
received after such withholding or deduction shall equal the amounts
that would have been received if no withholding or deduction had been
made; provided, however, that any withholdings or deduction for or on
account of present taxes, duties or governmental charges in force on
the date hereof imposed by the Brazilian authorities in connection with
the payment of the underwriting commission to the International
Underwriters will be borne by the Company and each of the International
Underwriters in proportion to its commitment to purchase the
International Securities pursuant to this Agreement, in the proportion
of two-thirds by the Company and one-third by such International
Underwriter. If any such taxes, duties or charges are collected by
deduction or withholding, the Company shall provide to the
International Underwriters copies of documents evidencing the
transmittal to the proper authorities of the amount of taxes, duties or
charges deducted or withheld.
(j) For a period of 180 days after the date of the initial
public offering of the Offered Securities, the Company will not offer,
sell, contract to sell, pledge or otherwise dispose of, directly or
indirectly, or file with the Commission a registration statement under
the Act relating to, any additional shares of its capital stock or ADSs
representing such shares or securities convertible into or exchangeable
or exercisable for any shares of its capital stock or ADSs representing
such shares, or publicly disclose the intention to make any such offer,
sale, pledge, disposition or filing, without the prior written consent
of the Representatives.
(k) The Company will comply with the terms of the Deposit
Agreement so that the ADRs evidencing the ADSs will be executed by the
Depositary and delivered to the International Underwriters, pursuant to
this Agreement at the applicable Closing Date; it being understood that
prior to any Closing Date, the Company will deposit or cause to be
deposited Securities with the Depositary in accordance with the
provisions of the Deposit Agreement so that the ADRs evidencing the
ADSs to be delivered to the International Underwriters at such Closing
Date are executed, countersigned and issued by the Depositary against
receipt of such Securities and delivered to the International
Underwriters at such Closing Date.
(l) The Company will apply the net proceeds from the sale of
the Offered Securities being sold by the Company as set forth in the
Prospectus.
(m) The Company will, on a timely basis, make all filings with
and use its reasonable best efforts obtain all consents, approvals,
authorizations or orders from, the Commission, the New York Stock
Exchange, the CVM, the Central Bank, the Sao Paulo Stock Exchange and
any other applicable securities commission that are necessary or
advisable in respect of the International Offering and the Brazilian
Offering; the Company will file promptly all reports and any definitive
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14(d) or 15(d) of the
Exchange Act for so long as the delivery of a prospectus is required in
connection with the offering or sale of the ADSs and the Securities.
(n) The Company will use its reasonable best efforts to (i)
obtain and maintain the listing of the Securities on the Sao Paulo
Stock Exchange, (ii) prior to the Effective Date of the Initial
Registration Statement, apply for listing of the ADSs on the New York
Stock Exchange and use its best efforts to complete that listing,
subject only to official notice of issuance and evidence of
satisfactory distribution, prior to the First Closing Date, (iii) cause
the ADSs to be eligible for settlement through the book-entry
settlement facilities of The Depository Trust Company, and (iv) cause
the ADSs to be eligible for settlement through facilities of
Clearstream Banking, S.A. ("Clearstream Banking") and the Euroclear
System ("Euroclear"); and if the Company is unable to maintain such
listing for the Securities on the Sao Paulo Stock Exchange and New York
Stock Exchange, the Company shall use all reasonable efforts to obtain
and maintain one or more other listings of, or quotations for, the
Securities and the ADSs, as the case may be, on such other stock
exchange or exchanges or markets as the Company may determine in
consultation with the Representatives.
(o) The Company will not, and will cause its affiliates not
to, take, directly or indirectly, any action designed to or which
constitutes or which might reasonably be expected to cause or result in
stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale
of the ADSs or the Securities; and will not, and will cause any of its
affiliated purchasers (as defined in Regulation M under the Exchange
Act) not to, take any action prohibited by Regulation M.
(p) The Company will prepare, and will furnish to the
Depositary or directly to the holders of ADRs, as soon as practicable
after the end of each fiscal year, copies of an English language
version or translation of its annual report for such year (to the
extent prepared or required to be prepared), and also to prepare, and
to furnish to the Depositary copies of an English language version or
translation of its unaudited quarterly consolidated financial
statements for the first three quarters of the fiscal year.
6. Conditions of the Obligations of the Underwriters. The obligations
of the several International Underwriters to purchase and pay for the
International Firm Securities on the First Closing Date and the International
Optional Securities to be purchased on each Optional Closing Date will be
subject to the accuracy of the representations and warranties on the part of the
Company herein, to the accuracy of the statements of Company officers and the
Depositary made pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions
precedent:
(a) The Representatives shall have received a letter, dated
the date of delivery thereof (which, if the Effective Time of the
Initial Registration Statement is prior to the execution and delivery
of this Agreement, shall be on or prior to the date of this Agreement
or, if the Effective Time of the Initial Registration Statement is
subsequent to the execution and delivery of this Agreement, shall be
prior to the filing of the amendment or post-effective amendment to the
registration statement to be filed shortly prior to such Effective
Time), of Ernst & Young Auditores Independentes confirming that they
are independent public accountants within the meaning of the Act and
the applicable published Rules and Regulations thereunder and stating
that:
(i) in their opinion the financial statements
examined by them and included in the Registration Statements
comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published
Rules and Regulations;
(ii) on the basis of a reading of the latest
available interim financial statements of the Company,
inquiries of officials of the Company who have responsibility
for financial and accounting matters and other specified
procedures, nothing came to their attention that caused them
to believe that:
(A) at the date of the latest available
balance sheet read by such accountants, or at a
subsequent specified date not more than three
business days prior to the date of such letter, there
was any change in the capital stock or any increase
in short-term indebtedness or long-term debt of the
Company or, at the date of the latest available
balance sheet read by such accountants, there was any
increase in consolidated net current liabilities or
any decrease in consolidated net assets, as compared
with amounts shown on the latest balance sheet
included in the Prospectus; or
(B) for the period from the closing date of
the latest income statement included in the
Prospectus to the closing date of the latest
available income statement read by such accountants
there were any decreases, as compared with the
corresponding period of the previous year and with
the period of corresponding length ended the date of
the latest income statement included in the
Prospectus, in consolidated net operating revenues or
operating income or in the total or per share amounts
of net income,
except in all cases set forth in clauses (A) and (B) above for
changes, increases or decreases which the Prospectuses disclose have
occurred or may occur or which are described in such letter; and
(iii) they have compared specified Brazilian reais
[and dollar] amounts (or percentages derived from such
Brazilian reais [and dollar] amounts) and other financial
information contained in the Registration Statements (in each
case to the extent that such Brazilian reais [and dollar]
amounts, percentages and other financial information are
derived from the general accounting records of the Company
subject to the internal controls of the Company's accounting
system or are derived directly from such records by analysis
or computation) with the results obtained from inquiries, a
reading of such general accounting records and other
procedures specified in such letter and have found such
Brazilian reais [and dollar] amounts, percentages and other
financial information to be in agreement with such results,
except as otherwise specified in such letter.
For purposes of this subsection, (i) if the Effective Time of
the Initial Registration Statement is subsequent to the execution and
delivery of this Agreement, "Registration Statements" shall mean the
initial registration statement as proposed to be amended by the
amendment or post-effective amendment to be filed shortly prior to its
Effective Time, (ii) if the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement but
the Effective Time of the Additional Registration is subsequent to such
execution and delivery, "Registration Statements" shall mean the
Initial Registration Statement and the additional registration
statement as proposed to be filed or as proposed to be amended by the
post-effective amendment to be filed shortly prior to its Effective
Time, and (iii) "Prospectus" shall mean the prospectus relating to the
International Securities included in the Registration Statements.
(b) If the Effective Time of the Initial Registration
Statement is not prior to the execution and delivery of this Agreement,
such Effective Time shall have occurred not later than 10:00 P.M., New
York time, on the date of this Agreement or such later date as shall
have been consented to by the Representatives. If the Effective Time of
the Additional Registration Statement (if any) is not prior to the
execution and delivery of this Agreement, such Effective Time shall
have occurred not later than 10:00 P.M., New York time, on the date of
this Agreement or, if earlier, the time the Prospectus is printed and
distributed to any International Underwriter, or shall have occurred at
such later date as shall have been consented to by the Representatives.
If the Effective Time of the Initial Registration Statement is prior to
the execution and delivery of this Agreement, the Prospectus shall have
been filed with the Commission in accordance with the Rules and
Regulations and Section 5(a) of this Agreement. The ADS Registration
Statement shall have been declared effective not later than 10:00 P.M.,
New York time, on the date of this Agreement or such later date as
shall have been consented to by the Representatives. Prior to such
Closing Date, no stop order suspending the effectiveness of a
Registration Statement or the ADS Registration Statement shall have
been issued and no proceedings for that purpose shall have been
instituted or, to the knowledge of the Company or the Representatives,
shall be contemplated by the Commission.
(c) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any
development or event involving a prospective change, in the condition
(financial or other), business, properties or results of operations of
the Company which, in the judgment of a majority in interest of the
International Underwriters including the Representatives, is material
and adverse and makes it impractical or inadvisable to proceed with
completion of the public offering or the sale of and payment for the
Offered Securities; (ii) any downgrading in the rating of any debt
securities or preferred stock of the Company by any "nationally
recognized statistical rating organization" (as defined for purposes of
Rule 436(g) under the Act), or any public announcement that any such
organization has under surveillance or review its rating of any debt
securities or preferred stock of the Company (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating) or any
announcement that the Company has been placed on negative outlook;
(iii) a change in U.S., Brazil or international financial, political or
economic conditions or currency exchange
rates or exchange controls as would, in the judgment of a majority in
interest of the International Underwriters including the
Representatives, be likely to prejudice materially the success of the
proposed issue, sale or distribution of the Offered Securities, whether
in the primary market or in respect of dealings in the secondary
market; (iv) any material suspension or material limitation of trading
in securities generally on the New York Stock Exchange, Sao Paulo Stock
Exchange, or any setting of minimum prices for trading on such
exchange, or any suspension of trading of any securities of the Company
on any exchange or in the over-the-counter market; (v) any banking
moratorium declared by U.S. Federal, New York or Brazilian authorities;
(vi) any major disruption of settlements of securities or clearance
services in the United States or Brazil or (vii) any attack on,
outbreak or escalation of hostilities or act of terrorism involving the
United States or Brazil or any declaration of war by the U.S. Congress,
the Brazilian President or any other national or international
calamity, emergency or crisis if, in the judgment of a majority in
interest of the International Underwriters including the
Representatives, the effect of any such attack, outbreak, escalation,
act, declaration, calamity, emergency or crisis makes it impractical or
inadvisable to proceed with completion of the public offering or the
sale of and payment for the Offered Securities.
(d) The Representatives shall have received an opinion, dated
such Closing Date, of Xxxxxxxx Xxxx Advogados, Brazilian counsel for
the Company, to the effect that (subject to customary assumptions and
qualifications reasonably acceptable to the U.S. counsel for the
International Underwriters):
(i) The Company has been duly incorporated and is an
existing mixed capital company (sociedade de economia mista)
in good standing under the laws of Brazil, with power and
authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus;
(ii) The Company has an authorized and issued
capitalization as set forth in the Prospectus; the Offered
Securities delivered on such Closing Date, including those
represented by the ADSs, and all other outstanding shares of
the capital stock of the Company have been duly authorized and
validly issued, are fully paid and nonassessable and conform
to the description thereof contained in the Prospectuses; the
shareholders of the Company have no preemptive or similar
rights with respect to the Offered Securities, including those
represented by the ADSs, other than those rights that have
been validly waived or otherwise extinguished with respect to
the Offered Securities; except as set forth in the Prospectus,
there are no outstanding securities convertible into or
exchangeable for, or warrants, rights or options to purchase
from the Company, or obligations of the Company to issue, any
class of capital stock of the Company or any such convertible
or exchangeable securities or any such warrants, rights or
options; upon payment and delivery of the Offered Securities
being sold by the Company pursuant to this Agreement and the
Brazilian Underwriting Agreement, the International
Underwriters and the Brazilian Underwriters, respectively, or
other persons in whose names ADSs or Securities are registered
will acquire valid and marketable title to such ADSs or
Securities, in each case free and clear of all liens,
encumbrances, preemptive rights and other claims; after the
Securities to be deposited pursuant to the Deposit Agreement
have been so deposited and are represented by the ADSs, such
Securities will continue to be validly issued and outstanding,
fully paid and non-assessable; and there are no restrictions
on transfers of the shares of the Company's capital stock,
including, without limitation, the Offered Securities;
(iii) Upon the deposit of the Securities to be issued
by the Company with or for the account of the Depositary
pursuant to the Deposit Agreement against issuance of the ADRs
evidencing ADSs, all right, title and interest in such
Securities, subject to the terms of the Deposit Agreement,
will be transferred to the Depositary free and clear of all
liens, encumbrances, security interests or claims;
(iv) The Company has full power and authority to
enter into the Deposit Agreement; the Deposit Agreement has
been duly authorized, executed and delivered by the Company
and constitutes a valid and legally binding obligation of the
Company enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating
to or affecting creditors' rights and to general equity
principles, and except that rights to indemnification may be
limited by public policy considerations;
(v) Except for the Registration Rights Agreement,
there are no contracts, agreements or understandings known to
such counsel between the Company and any person granting such
person the right to require the Company to file a registration
statement under the Act with respect to any securities of the
Company owned or to be owned by such person or to require the
Company to include such securities in the securities
registered pursuant to the Registration Statement or the ADS
Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the
Company under the Act;
(vi) No consent, approval, authorization or order of,
or filing with, any Brazilian Federal, state or local
governmental agency or body or any court is required for the
consummation of the transactions contemplated by the Deposit
Agreement, this Agreement or the Brazilian Underwriting
Agreement in connection with the issuance or sale of the
Offered Securities by the Company, including the deposit of
any Securities represented by the ADSs with the Depositary and
the issuance of the ADRs evidencing the ADSs, except (i) as
may be required, and will have been obtained or made prior to
or at the First Closing Date, from the Central Bank and the
CVM relating to the Deposit Agreement, (ii) as may be
required, and will have been obtained or made prior to or at
the First Closing Date, from the CVM relating to the offering
of Securities as provided for in this Agreement and in the
Brazilian Underwriting Agreement, and (iii) as may be
required, and will have been obtained or made prior to or at
the First Closing Date, from the Central Bank relating to the
payment of the fees and commissions and the reimbursement of
expenses, in each case as contemplated in this Agreement and
in the Deposit Agreement;
(vii) The execution, delivery and performance of the
Deposit Agreement, this Agreement and the Brazilian
Underwriting Agreement, and the issuance and sale of the
Offered Securities, including the deposit of any Securities
represented by the ADSs with the Depositary and the issuance
of the ADRs evidencing the ADSs, will not (i) conflict with,
result in the creation or imposition of any lien, charge or
encumbrance upon any of the property or assets of the Company
pursuant to the terms of, result in a breach or violation of
any of the terms and provisions of, or constitute a default
under, any concession agreement, indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to
which the Company is a party or by which the Company is bound
or to which any of the properties of the Company is subject,
or (ii) result in a breach or violation of any of the terms
and provisions of, or constitute a default under, any law, any
statute, any rule, regulation, judgment, decree or order of
any Brazilian Federal or state governmental agency or body or
any court, domestic or foreign, having jurisdiction over the
Company or any of its properties or the rules and regulations
of the Sao Paulo Stock Exchange, or the charter or by-laws of
the Company, and the Company has full power and authority to
authorize, issue and sell the Offered Securities, including
the ADSs, as contemplated by the Deposit Agreement, this
Agreement and the Brazilian Underwriting Agreement,
respectively;
(viii) The Company has full power and authority to
enter into this Agreement and the Brazilian Underwriting
Agreement; each of this Agreement and the Brazilian
Underwriting Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally
binding agreement of the Company enforceable in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent
transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and
to general equity principles, and except that rights to
indemnification may be limited by public policy
considerations;
(ix) Except as set forth or contemplated in the
Prospectus, no stock exchange, stamp or other issuance or
transfer taxes or duties and no capital gains, income,
withholding or other taxes are payable by or on behalf of the
International Underwriters or the Brazilian Underwriters to
Brazil or to any political subdivision or taxing authority
thereof or therein in connection with (i) the entering into or
performing this Agreement and the Brazilian Underwriting
Agreement or receiving payments hereunder and thereunder, and
the issuance or sale of the ADSs and the Securities by the
Company in accordance with this Agreement and the Brazilian
Underwriting Agreement, (ii) the deposit with the Depositary
of the Securities against the issuance of ADRs evidencing the
ADSs, (iii) the delivery of the ADSs to or for the respective
accounts of the International Underwriters in the manner
contemplated herein, or (iv) the sale and delivery outside of
Brazil by the International Underwriters of the ADSs to the
purchasers thereof, other than Brazilian income tax regarding
the International Underwriters whose income is otherwise
subject to taxation in Brazil and Brazilian withholding tax at
a rate of 15% (or 25% if the beneficiary is domiciled in a
country that does not impose income tax or where such tax is
imposed at a maximum rate of 20%) on any payments made by the
Company to the International Underwriters in respect of (A)
the underwriting commission and (B) fees, costs and expenses
specified in Section 5(h) hereof, in each case as to which
withholding tax the Company shall pay additional amounts
pursuant to Section 5(i) hereof;
(x) Such counsel has no reason to believe that the
provisions of this Agreement, the Deposit Agreement and the
Brazilian Underwriting Agreement, including, without
limitation, the indemnification and contribution provisions of
this Agreement and the Deposit Agreement, contravene Brazilian
law or public policy;
(xi) All dividends and other distributions declared
and payable on the Offered Securities, including those
represented by the ADSs, may be paid by the Company to the
holder thereof in Brazilian reais that may be converted into
foreign currency and freely transferred out of Brazil and all
such payments made to holders thereof who are non-residents of
Brazil will not be subject to income, withholding or other
taxes under laws and regulations of Brazil or any political
subdivision or
taxing authority thereof or therein and will otherwise be free
and clear of any other tax, duty, withholding or deduction in
Brazil or any political subdivision or taxing authority
thereof or therein and without the necessity of obtaining any
governmental authorization in Brazil or any political
subdivision or taxing authority thereof or therein, except for
interest on share capital;
(xii) The Company's agreement to the choice of law
provisions set forth in Section 15 hereof and Section 7.6 of
the Deposit Agreement will be recognized and given effect to
by the courts of Brazil, assuming that, under New York law,
such agreement by the Company is legal, valid and binding;
(xiii) Any judgment obtained in a U.S. federal or
state court sitting in New York City arising out of or in
relation to the obligations of the Company under this
Agreement or the Deposit Agreement would be enforced against
the Company in the Brazilian courts, without reconsideration
of the merits or relitigation of the matters adjudicated upon
and without the payment of any stamp, registration or similar
tax or duty (except for certain authentication and translation
proceedings), upon confirmation of that judgment by the
Brazilian Federal Supreme Court; and such confirmation should
be provided if the foreign judgment (A) fulfills all
formalities required for its enforceability under the laws of
the State of New York and the United States, (B) is issued by
a competent court after proper service of process or
sufficient evidence of an absence of default judgment has been
given, as required under applicable law, (C) is not subject to
appeal, as duly certified by the foreign court, (D) is
authenticated by a Brazilian consular office in the United
States and is accompanied by a sworn translation into
Portuguese, by a publicly sworn translator in Brazil, (E) is
not contrary to Brazilian national sovereignty or public
policy and (F) is enforced in compliance with the applicable
procedure under the law of Brazil with respect to the
enforcement of foreign judgments;
(xiv) The submission by the Company to the
jurisdiction of the U.S. federal or state courts sitting in
New York City set forth in this Agreement and the Deposit
Agreement, the waiver by the Company of any immunity and any
objection to the laying of venue of a proceeding of a court
sitting in New York City, the appointment of the authorized
agent named in Section 15 of this Agreement and in Section 7.8
of the Deposit Agreement for the purposes described therein,
and the agreement of the Company that this Agreement and the
Deposit Agreement be governed by and construed in accordance
with the laws of the state of New York, are legal, valid and
binding under Brazilian laws; and service of process effected
in the manner set forth in this Agreement, assuming validity
under the laws of the State of New York, will be effective,
insofar as
Brazilian law is concerned, to confer valid personal
jurisdiction over the Company;
(xv) It is not necessary to ensure the legality,
validity, enforceability or admissibility in evidence of this
Agreement or the Deposit Agreement in Brazil or any political
subdivision thereof that any of them be filed or recorded or
enrolled with any court or authority in Brazil or any
political subdivision thereof or that any stamp, registration
or similar tax be paid in Brazil or any political subdivision
thereof, other than court costs, including filing fees and
deposits to guarantee judgment required by Brazilian law and
regulations, except that (A) the signature of the parties to
this Agreement and the Deposit Agreement and any other
document that may be deemed to be or become a party to any
such agreements shall have been notarized by a notary public
licensed as such under the law of the place of signing and the
signature of such notary public (to the extent not located in
Brazil) shall have been authenticated by the Brazilian
consular office and each of this Agreement and the Deposit
Agreement and any other document that may be deemed to be or
become a part to any such agreements shall have been
registered with the appropriate Registry of Deeds and
Documents in Brazil, (B) each of this Agreement and the
Deposit Agreement shall have been translated into Portuguese
by a sworn translator in Brazil and (C) this Agreement and the
Deposit Agreement, together with their respective sworn
translations into Portuguese, shall have been filed with the
CVM and the Deposit Agreement shall have been filed with the
Central Bank; and any International Underwriter in respect of
this Agreement, and the Depositary and any holder of ADSs in
respect of the Deposit Agreement, are entitled to xxx as
plaintiff in the Brazilian courts for the enforcement of their
respective rights against the Company, and such access will
not be subject to any conditions which are not applicable to
Brazilian persons, except for the payment of certain expenses
and court fees, including the posting of a bond];
(xvi) To the best knowledge of such counsel after due
inquiry, there are no pending actions, suits or proceedings
against or affecting the Company or any of its properties
that, if determined adversely to the Company, would
individually or in the aggregate have a Material Adverse
Effect, or would materially and adversely affect the ability
of the Company to perform its obligations under the Deposit
Agreement, this Agreement or the Brazilian Underwriting
Agreement, or which are otherwise material in the context of
the sale of the Offered Securities; and no such actions, suits
or proceedings are threatened or, to such counsel's knowledge,
contemplated;
(xvii) To the best knowledge of such counsel after
due inquiry, the Company possesses adequate concessions,
licenses, franchises, certificates, authorities or permits or
other approvals or authorizations issued by appropriate
governmental agencies or bodies necessary to conduct the
business now operated by it or to own or lease its property or
assets, and such concessions, licenses, franchises,
certificates, authorities, permits and other approvals and
authorizations are in full force and effect, and has not
received any notice of proceedings relating to the revocation
or modification of any such concession, license, franchise,
certificate, authority or permit or other approval or
authorization that, if determined adversely to the Company,
would individually or in the aggregate have a Material Adverse
Effect;
(xviii) The Company (A) is not, and with the giving
of notice or lapse of time or both would not be, in violation
of or in default under its charter or by-laws, and (B) is not
in default, and no event has occurred which, with notice or
lapse of time or both, would constitute such a default, in the
due performance or observance of any term, covenant or
condition contained in any concession agreement, indenture,
mortgage or other agreement or instrument to which it is a
party or by which it is bound or to which any of its property
or assets is subject, except for, in the case of clause (B),
for such defaults which would not, individually or in the
aggregate, have a Material Adverse Effect;
(xix) The statements set forth in the Prospectus
under the caption "Taxation" to the extent that they
constitute summaries of matters of Brazilian tax law and
regulation or legal conclusions with respect thereto,
constitute a fair summary of the principal Brazilian income
tax consequences of an investment in the Offered Securities;
(xx) Except as set forth in the Prospectus, there are
no limitations under Brazilian law on the rights of holders of
Securities, ADSs or ADRs evidencing ADSs to hold or vote or
transfer their respective securities, and no approvals are
currently required in Brazil (including any foreign exchange
or foreign currency approvals) in order for the Company to pay
dividends declared by the Company to the holders of Offered
Securities, including the Depositary;
(xxi) It is not necessary under the laws of Brazil
for any International Underwriter or holder of ADSs, as a
result solely of its performance of its obligations hereunder,
under the Deposit Agreement or its holding of ADSs, or to
enforce its rights under this Agreement, the Deposit Agreement
or the ADSs, to be licensed, qualified or otherwise entitled
to carry on business in Brazil; and none of the holders of the
ADSs, or the International Underwriters will be deemed
resident, domiciled, carrying on business or subject to any
tax liability in Brazil solely by reason of the holding of the
ADSs, or the execution, delivery, performance or enforcement
of this Agreement, assuming that none of such persons is a
resident of Brazil or has a permanent establishment in Brazil;
(xxii) The performance by the International
Underwriters and the Brazilian Underwriters in Brazil of any
of their rights, duties, obligations and responsibilities
under this Agreement and the Brazilian Underwriting Agreement
will not violate any law applicable in Brazil;
(xxiii) The registration of the Securities underlying
the ADSs in the name of the Depositary does not violate any
law applicable in Brazil or the by-laws of the Company; and
(xxiv) Each of (i) the agreement dated as of January
29, 2002, between the state of Parana and the Company, in
connection with the return of funds relating to amounts
advanced to the Company for future capital increases
("Contrato que entre si fazem o Estado do Parana e a Companhia
de Saneamento do Parana - Sanepar para devolucao em dinheiro
referente ao adiantamento para futuro aumento de capital"),
(ii) the Loan Agreement dated as of January 29, 2002, between
the state of Parana and the Company ("Contrato de
Sub-Emprestimo de Recursos do Acordo de Emprestimo no. BZ-P13
between JBIC and the state of Parana"), relating to the
on-lending by the state of Parana to the Company of funds
disbursed as of January 1, 2002 by The Overseas Economic
Corporation Fund - OECF in connection with the so-called
Paranasan project, and (iii) the agreement for the offsetting
of debts dated as of January 29, 2002, between the state of
Parana and the Company, in the amount of approximately R$39.9
million, has been duly authorized, executed and delivered by
the Company and the state of Parana, and constitutes a valid
and legally binding agreement of the Company and the state of
Parana, enforceable in accordance with its terms.
(xxv) The Registration Statement, the Prospectus,
each preliminary prospectus relating to the International
Securities and the preliminary and final prospectuses relating
to the Brazilian Offering have been duly authorized by the
Company;
(xxvi) The summary of the Company's by-laws and
Brazilian law set forth in the Prospectus with respect to the
Securities and the capital stock of the Company is accurate
and complete in all material respects;
(xxvii) (A) Such counsel has participated in
conferences with the Representatives, officers and other
representatives of the Company and representatives of the
independent certified accountants of the Company, at which
conferences the contents of the Prospectus and related matters
were discussed, and although such counsel has not verified and
does not pass upon or assume any responsibility for the
accuracy, completeness or fairness of the statements contained
in the Prospectus (except and only to the extent set forth in
subclauses (xix) and (xxvi) above), on the basis of the
foregoing (relying as to materiality to a large extent upon
representations and opinions of officers and other
representatives of the Company) it has no reason to believe
that the Prospectus at the date thereof or as of any Closing
Date (except for the financial statements and schedules and
other financial and statistical data included therein, as to
which such counsel need express no opinion), contained or
contains an untrue statement of a material fact or omitted or
omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading; and (B) the descriptions
in the Prospectus of Brazilian statutes, regulations, legal
and governmental proceedings, and contracts and other
documents, insofar as such descriptions constitute summaries
of such statutes, regulations and legal and governmental
proceedings, and contracts and other documents, are accurate
and fairly present the information required to be shown; and
to the best of such counsel's knowledge, there are no
Brazilian statutes, regulations or legal or governmental
proceedings required to be described in a Registration
Statement or the Prospectus which are not described as
required, and there are no franchises, contracts, indentures,
mortgages, loan agreements, notes, leases or other instruments
that are required to be described or referred to in a
Registration Statement or the Prospectus or to be filed as
exhibits to a Registration Statement other than those
described or referred to therein or filed as exhibits thereto;
(xxviii) The holders of outstanding shares of capital
stock of the Company are not entitled to preemptive rights or
other similar rights in connection with the offerings
contemplated by this Agreement or the Brazilian Underwriting
Agreement; and
(xxix) Neither the Company nor any of its assets is
entitled to immunity from suit, execution, attachment or other
legal process in Brazil, other than the assets which are
required to render the services provided by the Company, which
are not subject to attachment.
(e) The Representatives shall have received an opinion, dated
such Closing Date, of , general counsel for the Company, to
the effect
that (subject to customary assumptions and qualifications reasonably
acceptable to the U.S. counsel for the International Underwriters):
(i) Except as disclosed in the Prospectus, the
Company has good and marketable title to all real properties
and interests in real property (including, without limitation,
easements for installing, operation and maintenance of pipes,
pumps and accessory equipment) and all other properties and
assets owned by it, in each case free from Liens that would
materially affect the value thereof or materially interfere
with the use made or to be made thereof by it; and the Company
holds all leased real or personal properties under valid and
enforceable leases free of any Liens that would materially
interfere with the use made or to be made thereof by it; and
the Company has not received any notice of any material claim
of any sort that has been asserted by anyone adverse to the
rights of the Company in or to any owned property or interests
therein or under any of the leases described above, or
affecting or questioning the rights thereof to the continued
possession of the owned property or interests therein or the
leased premises under any such lease except as would not
individually or in the aggregate have a Material Adverse
Effect;
(ii) The Company holds 342 concessions in the state
of Parana for the provision of water and wastewater services,
and all such concessions and the related concession agreements
are valid and binding upon the Company and the relevant
granting authorities thereof, enforceable in accordance with
their respective terms, and are in full force and effect, and
the Company has not received any notice of and it is not aware
of proceedings relating to the revocation or modification of
any such concession or the related concession agreement; and
(iii) The Company (A) is in compliance with any and
all applicable environmental laws of Brazil, (B) has received
all permits, licenses or other approvals required under
applicable environmental laws of Brazil to conduct its
businesses and (C) is in compliance with all terms and
conditions of any such permit, license or approval, except
where such noncompliance with environmental laws of Brazil,
failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals, would not, singly or
in the aggregate, have a Material Adverse Effect; and the
Company has not received notice of any actual or potential
liability for the investigation or remediation of any disposal
or release of hazardous or toxic substances or wastes,
pollutants or contaminants that, if determined adversely to
the Company, would individually or in the aggregate have a
Material Adverse Effect.
(f) The Representatives shall have received an opinion, dated
such Closing Date, of Milbank, Tweed, Xxxxxx & XxXxxx LLP, U.S. counsel
for the Company, to the effect that (subject to customary assumptions
and qualifications reasonably acceptable to the U.S. counsel for the
International Underwriters):
(i) Assuming that this Agreement has been duly
authorized, executed and delivered by the Company under the
laws of Brazil, this Agreement has been duly executed and
delivered by the Company (to the extent execution and delivery
are governed by the laws of the State of New York);
(ii) Assuming that the Deposit Agreement has been
duly authorized, executed and delivered by the Company under
the laws of Brazil, the Deposit Agreement has been duly
executed and delivered by the Company (to the extent execution
and delivery are governed by the laws of the State of New
York) and, assuming due authorization, execution and delivery
of the Deposit Agreement by the Depositary, the Deposit
Agreement will constitute the legal, valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or transfer or other similar laws relating to or
affecting the rights of creditors generally (and to the
possible judicial application of foreign laws or governmental
action affecting the rights of creditors generally), and
except as the enforceability of the Deposit Agreement is
subject to the application of general principles of equity
(regardless of whether considered in a proceeding in equity or
at law), including, without limitation, (a) the possible
unavailability of specific performance, injunctive relief or
any other equitable remedy and (b) concepts of materiality,
reasonableness, good faith and fair dealing;
(iii) Assuming the consummation of the sale of the
ADSs as contemplated by the terms of this Agreement, upon
issuance by the Depositary of ADRs evidencing ADSs against the
deposit of Securities in respect thereof in accordance with
the Deposit Agreement, such ADRs will be duly and validly
issued and will entitle the persons in whose names such ADRs
are registered to the rights specified therein and in the
Deposit Agreement; the ADSs representing the Securities will
be freely transferable; and the Deposit Agreement and the ADSs
conform to the descriptions thereof contained in the
Prospectus;
(iv) Other than the effectiveness of the registration
statement on Form F-1 and the registration statement on Form
F-6 relating to the ADSs under the Act, the deposit of the
Securities with the Depositary against the issuance of ADRs in
accordance with the Deposit Agreement and the
performance by the Company of its obligations under this
Agreement and the Deposit Agreement (including the issuance
and delivery of the International Securities and the issuance,
delivery and sale of the ADSs in the manner contemplated in
this Agreement, the Registration Statement and the
Prospectus), (a) do not require the consent, approval,
authorization, registration or qualification of or with any
governmental agency of the United States or the state of New
York, except such as have been obtained or effected under the
Act or in connection with any listing of the ADSs on the New
York Stock Exchange (but such counsel needs to express no
opinion as to any consent, approval, authorization,
registration or qualification that may be required under state
securities laws), and (b) do not result in any violation of
any U.S. Federal or New York state statute, rule or
regulation, or, to the knowledge of such counsel, any order of
any U.S. Federal or New York state court or governmental
agency or body having jurisdiction over the Company (except as
to U.S. Federal securities laws and state securities laws, as
to which such counsel needs to express no opinion);
(v) The Company is not and, after giving effect to
the offering and sale of the Offered Securities and the
application of the proceeds thereof as described in the
Prospectus, will not be an "investment company" as defined in
the Investment Company Act of 1940;
(vi) The Initial Registration Statement was declared
effective under the Act as of the date and time specified in
such opinion, the Additional Registration Statement (if any)
was filed and became effective under the Act as of the date
and time (if determinable) specified in such opinion, the
Prospectus either was filed with the Commission pursuant to
the subparagraph of Rule 424(b) specified in such opinion on
the date specified therein or was included in the Initial
Registration Statement or the Additional Registration
Statement (as the case may be), and, to the best of the
knowledge of such counsel, no stop order suspending the
effectiveness of a Registration Statement, the ADS
Registration Statement or any part thereof has been issued and
no proceedings for that purpose have been instituted or are
pending or contemplated under the Act, and each Registration
Statement and the Prospectus and the ADS Registration
Statement, and each amendment or supplement thereto, as of
their respective effective or issue dates, complied as to form
in all material respects with the requirements of the Act and
the Rules and Regulations; the descriptions in the
Registration Statements and the Prospectus of statutes, legal
and governmental proceedings and contracts and other documents
are accurate and fairly present the information required to be
shown; and such counsel do not know of any U.S. statutes,
regulations or legal or governmental proceedings required to
be described in a Registration Statement or the Prospectus
which are not described as required or of any contracts or
documents of a character required to be described in a
Registration Statement or the Prospectus or to be filed as
exhibits to a Registration Statement which are not described
and filed as required; it being understood that such counsel
need express no opinion as to the financial statements or
other financial data contained in the Registration Statement
or the Prospectus;
(vii) The statements made in the Prospectus under the
caption "Description of American Depositary Shares," insofar
as such statements purport to summarize certain provisions of
the Deposit Agreement, provide a fair summary of such
provisions;
(viii) The statements made in the Prospectus under
the caption "Taxation--United States Tax Consequences" fairly
and accurately summarize in all material respects the matters
therein described; and
(ix) Under the laws of the state of New York relating
to the submission to personal jurisdiction, the Company has,
pursuant to Section 15 of this Agreement and pursuant to
Section 7.8 of the Deposit Agreement (subject to customary
qualifications reasonably acceptable to the U.S. counsel for
the International Underwriters), validly submitted to the
personal jurisdiction of any New York state court or U.S.
Federal court sitting in the Borough of Manhattan, New York
City, and any appellate court thereof in any suit, action or
proceeding arising out of or relating to this Agreement or the
Deposit Agreement, has validly waived any objection to the
venue of a proceeding in any such court and any immunity to
jurisdiction in such court, and has validly appointed the
authorized agent named in Section 15 of this Agreement and in
Section 7.8 of the Deposit Agreement for the purposes
described therein; and service of process effected on such
agent in the manner set forth in Section 15 of this Agreement
and Section 7.8 of the Deposit Agreement, will be effective to
confer valid personal jurisdiction over the Company in any
suit, action or proceeding arising out of or relating to this
Agreement or the Deposit Agreement.
In addition, said opinion shall state that, subject to
customary qualifications reasonably acceptable to the U.S.
counsel for the International Underwriters, such counsel have
no reason to believe that any part of a Registration Statement
or the ADS Registration Statement or any amendment thereto, as
of its effective date or as of such Closing Date, contained
any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary
to make the statements therein not misleading or that the
Prospectus or any amendment
or supplement thereto, as of its issue date or as of such
Closing Date, contained any untrue statement of a material
fact or omitted to state any material fact necessary in order
to make the statements therein, in the light of the
circumstances under which they were made, not misleading
(except that such counsel need express no views as to
statistical, financial or accounting information contained in
or omitted from said Registration Statements or Prospectus, or
any amendment or supplement thereto).
(g) The Representatives shall have received from Machado,
Meyer, Sendacz e Opice Advogados, Brazilian counsel for the
International Underwriters, such opinion or opinions, dated such
Closing Date, with respect to the incorporation of the Company, the
validity of the Offered Securities delivered on such Closing Date, the
Registration Statements, the ADS Registration Statement, the Prospectus
and other related matters as the Representatives may reasonably
require, and the Company shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon
such matters. In rendering such opinion, Machado, Meyer, Sendacz e
Opice Advogados may rely as to matters governed by New York law upon
the opinion of Cravath, Swaine & Xxxxx referred to below.
(h) The Representatives shall have received from Cravath,
Swaine & Xxxxx, U.S. counsel for the International Underwriters, such
opinion or opinions, dated such Closing Date, with respect to the
validity of the International Securities delivered on such Closing
Date, the Registration Statements, the ADS Registration Statement, the
Prospectus and other related matters as the Representatives may
reasonably require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them
to pass upon such matters. In rendering such opinion, Cravath, Swaine &
Xxxxx may rely as to the incorporation of the Company and all other
matters governed by Brazilian law upon the opinion of Machado, Meyer,
Sendacz e Opice Advogados referred to above.
(i) The Underwriters shall have received an opinion, dated
such Closing Date, from Xxxxx, Xxxxxx & Xxxxxx, LLP, counsel for the
Depositary, to the effect that:
(i) The Deposit Agreement has been duly authorized,
executed and delivered by the Depositary and constitutes a
valid and legally binding obligation of the Depositary
enforceable in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and similar
laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(ii) Upon issuance by the Depositary of the ADRs
evidencing the ADSs in accordance with the Deposit Agreement,
such ADRs will be duly and validly issued and will entitle the
holders thereof to the rights specified therein and in the
Deposit Agreement; and the Deposit Agreement and ADRs conform
to the descriptions thereof in the Prospectus; and
(iii) The ADS Registration Statement was declared
effective under the Act as of the date and time specified in
such opinion, and, to the best of the knowledge of such
counsel, no stop order suspending the effectiveness of the ADS
Registration Statement or any part thereof has been instituted
or is pending or contemplated under the Act, and the ADS
Registration Statement, and each amendment or supplement
thereto, as of their respective effective or issue dates,
complied as to form in all material respects with the
requirements of the Act and the Rules and Regulations.
(j) The Depositary shall have furnished or caused to be
furnished to the Underwriters a certificate satisfactory to the
Representatives of one of its authorized officers with respect to the
deposit with it of the Securities represented by the ADSs against
issuance of the ADRs evidencing the ADSs, the execution, issuance,
countersignature and delivery of the ADRs evidencing the ADSs pursuant
to the Deposit Agreement and such other matters related thereto as the
Representatives reasonably request.
(k) The Representatives shall have received a certificate,
dated such Closing Date, of the President or any Vice President and a
principal financial or accounting officer of the Company in which such
officers, to the best of their knowledge after reasonable
investigation, shall state that: the representations and warranties of
the Company in this Agreement are true and correct; the Company has
complied with all agreements and satisfied all conditions on its part
to be performed or satisfied hereunder at or prior to such Closing
Date; the Additional Registration Statement (if any) satisfying the
requirements of subparagraphs (1) and (3) of Rule 462(b) was filed
pursuant to Rule 462(b), including payment of the applicable filing fee
in accordance with Rule 111(a) or (b) under the Act, prior to the time
either Prospectus was printed and distributed to any International
Underwriter; and subsequent to the date of the most recent financial
statements in the Prospectus, there has been no material adverse
change, nor any development or event involving a prospective material
adverse change, in the condition (financial or other), business,
properties or results of operations of the Company except as set forth
in or contemplated by the Prospectus or as described in such
certificate; they have examined the Registration Statements and the
Prospectus and, in their opinion, the Registration Statements and the
Prospectus, as of their respective Effective Dates, did not include any
untrue statements of a material fact and did not omit to state a
material
fact required to be stated therein or necessary to make the statements
therein not misleading.
(l) The Representatives shall have received a letter, dated
such Closing Date, of Ernst & Young Auditores Independentes which meets
the requirements of subsection (a) of this Section, except that the
specified date referred to in such subsection will be a date not more
than three business days prior to such Closing Date for the purposes of
this subsection.
(m) On such Closing Date, the Brazilian Underwriters shall
have purchased the Brazilian Securities pursuant to the Brazilian
Underwriting Agreement.
(n) The Representatives shall have received the Lock-up
Agreements duly executed by each of the executive officers, directors
and holders of more than 5% of the shares of the capital stock of the
Company, and such Lock-up Agreements shall be in full force and effect.
(o) The Company and the Depositary shall have executed and
delivered the Deposit Agreement, and such Deposit Agreement shall be in
full force and effect.
(p) The approvals by (i) the Central Bank and the CVM of the
Deposit Agreement, (ii) the CVM of the offering of the Securities as
contemplated by this Agreement and the Brazilian Underwriting
Agreement, and (iii) the Central Bank of the payment of fees and
commissions and the reimbursement of expenses set forth in this
Agreement and the Brazilian Underwriting Agreement, shall have been
obtained and shall be in full force and effect.
(q) The NASD shall not have raised any objection with respect
to the fairness and reasonableness of the underwriting terms and
agreements.
(r) (i) The listing of the Securities on the Sao Paulo Stock
Exchange shall be in full force and effect; (ii) the New York Stock
Exchange shall have approved the ADSs for listing, subject only to
official notice of issuance and evidence of satisfactory distribution;
(iii) the ADSs shall have been accepted for settlement through the
facilities of The Depository Trust Company; and (iv) the ADSs shall
have been accepted for settlement through the facilities of Cedel and
Euroclear.
(s) Except as set forth in or contemplated by the Prospectus,
since the date of the latest audited financial statements included in
the Prospectus, there has not been (i) any change in the capital stock
of the Company or increase in the long-term debt (including the current
portion thereof) of the Company, (ii) any material loss or interference
with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court
or government action, order or decree or (iii) any material adverse
change, or any development involving a prospective material adverse
change, in or affecting the business, properties, financial condition,
stockholders' equity or results of operations of the Company taken as a
whole, the effect of which, in any such case described in clause (i) or
(ii), is, in the reasonable judgment of the Representatives, so
material and adverse as to have, or will have, a Material Adverse
Effect on the offering of, or market for, the ADSs.
(t) [CT Corporation System] shall have furnished to the
Representatives a letter confirming its acceptance of appointment as
the authorized agent for the Company in accordance with Section 15
hereof.
The Company will furnish the Representatives with such conformed copies of such
opinions, certificates, letters and documents as the Representatives reasonably
request. the Representatives may in their sole discretion waive on behalf of the
International Underwriters compliance with any conditions to the obligations of
the International Underwriters hereunder, whether in respect of an Optional
Closing Date or otherwise.
7. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless each International Underwriter, its partners, directors and
officers and each person, if any, who controls such International Underwriter
within the meaning of Section 15 of the Act, against any losses, claims, damages
or liabilities, joint or several, to which such International Underwriter,
partners, directors, officers or controlling persons may become subject, under
the Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in any Registration
Statement, the ADS Registration Statement, the Prospectus, or any amendment or
supplement thereto, or any related preliminary prospectus, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each International Underwriter, partners,
directors, officers or controlling persons for any legal or other expenses
reasonably incurred by such International Underwriter, partners, directors,
officers or controlling persons in connection with investigating or defending
any such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in conformity with
written information furnished to the Company by any International Underwriter
through the Representatives specifically for use therein, it being understood
and agreed that the only information furnished by any International Underwriter
consists of the information described as such in subsection (b) below; provided
further, however, that with respect to any untrue statement or omission of a
material fact made in any preliminary prospectus,
the indemnity agreement contained in this Section 7(a) shall not inure to the
benefit of the International Underwriter from whom the person asserting any such
loss, claim, damage or liability purchased the securities concerned, to the
extent that any such loss, claim, damage or liability of the International
Underwriter occurs under the circumstance where it shall have been determined by
a court of competent jurisdiction by final and nonappealable judgment that (w)
the Company had previously furnished copies of the Prospectus to the
Representatives, (x) delivery of the Prospectus was required by the Act to be
made to such person, (y) the untrue statement or omission of a material fact
contained in the preliminary prospectus was corrected in the Prospectus and (z)
there was not sent or given to such person, at or prior to the written
confirmation of the sale of such securities to such person, a copy of the
Prospectus.
(b) Each International Underwriter will severally and not jointly
indemnify and hold harmless the Company, its directors and officers and each
person, if any, who controls the Company within the meaning of Section 15 of the
Act, against any losses, claims, damages or liabilities to which the Company or
any such directors, officers or controlling persons may become subject, under
the Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in any Registration
Statement, the ADS Registration Statement, the Prospectus, or any amendment or
supplement thereto, or any related preliminary prospectus, or arise out of or
are based upon the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished to
the Company by such International Underwriter through the Representatives
specifically for use therein, and will reimburse any legal or other expenses
reasonably incurred by the Company or any such directors, officers or
controlling persons in connection with investigating or defending any such loss,
claim, damage, liability or action as such expenses are incurred, it being
understood and agreed that the only such information furnished by any
International Underwriter consists of (i) the following information in the
Prospectus furnished on behalf of each Underwriter: the names of the
International Underwriters[; any stabilization legend;] the information
regarding the agreement among the underwriters appearing in the fourth (4th)
paragraph under the caption "Underwriting"; the concession and reallowance
figures appearing in the fifth (5th) paragraph under the caption "Underwriting";
the information regarding confirmation of sales appearing in the seventh (7th)
paragraph under the caption "Underwriting"; the information appearing in the
eighth (8th) paragraph under the caption "Underwriting" to the extent relating
to compliance with the rules of the National Association of Securities Dealers,
Inc. (the "NASD"); the seventeenth (17th) and eighteenth (18th) paragraphs under
the caption "Underwriting" (relating to short-sales, syndicate covering
transactions and stabilization transactions, penalty bids, market-making and
similar matters) and the penultimate paragraph under the caption "Underwriting"
(relating to the provision of electronic prospectuses by the International
Underwriters) and (ii) the following information in the Prospectus furnished
on behalf of ABN AMRO Rothschild LLC: "Affiliates of one of the members of ABN
AMRO Rothschild LLC own R$10 million of commercial paper of our company and
manage an investment fund which owns R$15 million of commercial paper of our
company."
(c) Promptly after receipt by an indemnified party under this Section
or Section 9 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under subsection (a) or (b) above or Section 9, notify the indemnifying party of
the commencement thereof; but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to any indemnified
party otherwise than under subsection (a) or (b) above or Section 9. In case any
such action is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party under this Section or Section 9, as the
case may be, for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party unless such settlement (i) includes an unconditional release of such
indemnified party from all liability on any claims that are the subject matter
of such action and (ii) does not include a statement as to, or an admission of,
fault, culpability or a failure to act by or on behalf of an indemnified party.
(d) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the International Underwriters on the other from the offering of
the International Securities or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and the International
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities as well as any other
relevant equitable considerations. The relative benefits received by the Company
on the one hand and the International Underwriters on the other shall be deemed
to be in the same proportion as the total net
proceeds from the offering of the International Securities (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by the International Underwriters. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the
International Underwriters and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such untrue statement or
omission. The amount paid by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the first sentence of this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any action or claim which is the subject of this subsection (d). Notwithstanding
the provisions of this subsection (d), no International Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the International Securities underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages which
such International Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The International Underwriters'
obligations in this subsection (d) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section and Section 9
shall be in addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each partner, director and
officer of any International Underwriter and each person, if any, who controls
any International Underwriter or the QIU (as hereinafter defined) within the
meaning of the Act; and the obligations of the International Underwriters under
this Section shall be in addition to any liability which the respective
International Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each director of the Company, to each officer of the
Company who has signed a Registration Statement and to each person, if any, who
controls the Company within the meaning of the Act.
8. Default of Underwriters. If any International Underwriter or
International Underwriters default in their obligations to purchase
International Securities hereunder on either the First or any Optional Closing
Date and the aggregate number of ADSs constituting the International Securities
that such defaulting International Underwriter or International Underwriters
agreed but failed to purchase does not exceed 10% of the total number of ADSs
constituting the International Securities that the International Underwriters
are obligated to purchase on such Closing Date, the Representatives may make
arrangements satisfactory to the Company for the purchase of such International
Securities by other persons, including any of the International Underwriters,
but if no such arrangements are made by such Closing Date the non-defaulting
International
Underwriters shall be obligated severally, in proportion to their respective
commitments hereunder, to purchase the International Securities that such
defaulting International Underwriters agreed but failed to purchase on such
Closing Date. If any International Underwriter or International Underwriters so
default and the aggregate number of ADSs constituting the International
Securities with respect to which such default or defaults occur exceeds 10% of
the total number of ADSs constituting the International Securities that the
International Underwriters are obligated to purchase on such Closing Date and
arrangements satisfactory to the Representatives and the Company for the
purchase of such International Securities by other persons are not made within
36 hours after such default, this Agreement will terminate without liability on
the part of any non-defaulting International Underwriter or the Company, except
as provided in Section 10 (provided that if such default occurs with respect to
International Optional Securities after the First Closing Date, this Agreement
will not terminate as to the International Firm Securities or any International
Optional Securities purchased prior to such termination). For purposes of this
Section, International Securities in ADS form in lieu of which the International
Underwriters purchase International Securities in the form of preferred shares
shall be treated as International Securities purchased by the International
Underwriters. As used in this Agreement, the term "International Underwriter"
includes any person substituted for an International Underwriter under this
Section. Nothing herein will relieve a defaulting International Underwriter from
liability for its default.
9. Qualified Independent Underwriter. The Company hereby confirms that
at its request ABN AMRO Rothschild LLC has without compensation acted as
"qualified independent underwriter" (in such capacity, the "QIU") within the
meaning of Rule 2720 of the Conduct Rules of the National Association of
Securities Dealers, Inc. in connection with the offering of the International
Securities. The Company will indemnify and hold harmless the QIU under the same
terms and conditions set forth in Section 7 hereof, including the contribution
provisions set forth in Section 7, against any losses, claims, damages or
liabilities, joint or several, to which the QIU may become subject, under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon the QIU's acting (or
alleged failing to act) as such "qualified independent underwriter" and will
reimburse the QIU for any legal or other expenses reasonably incurred by the QIU
in connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred. The indemnification set forth
in this Section 9 shall be in addition to the indemnification provided for in
Section 7 above.
10. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the several International Underwriters set forth
in or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation, or statement as to the results thereof, made by
or on behalf of any International Underwriter, the Company or any of their
respective representatives, officers or directors or any controlling person, and
will survive delivery of and payment
for the International Securities. If this Agreement is terminated pursuant to
Section 8 or if for any reason the purchase of the International Securities by
the International Underwriters is not consummated, the Company shall remain
responsible for the expenses to be paid or reimbursed by it pursuant to Section
5 and the respective obligations of the Company and the International
Underwriters pursuant to Section 7 and the obligations of the Company pursuant
to Section 9 shall remain in effect and if any International Securities have
been purchased hereunder the representations and warranties in Section 2 and all
obligations under Section 5 shall also remain in effect. If the purchase of the
International Securities by the International Underwriters is not consummated
for any reason other than solely because of the termination of this Agreement
pursuant to Section 8 or for reasons other than those relating to any of the
International Underwriters, including, without limitation, the occurrence of any
event specified in clause (iii), (iv), (v), (vi) or (vii) of Section 6(c), the
Company will reimburse the Underwriters for all out-of-pocket expenses
(including fees and disbursements of counsel) reasonably incurred by them in
connection with the offering of the International Securities.
11. Notices. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered, telefaxed or telegraphed
and confirmed to the Representatives at the following addresses: (i) Credit
Suisse First Boston Corporation, Eleven Madison Avenue, New York, N.Y.
10010-3629, Attention: Investment Banking Department - Transactions Advisory
Group (facsimile No.: (000) 000-0000), (ii) Xxxxxxx Xxxxx Xxxxxx Inc., 000
Xxxxxxxxx Xxxxxx, 00xx xxxxx, Xxx Xxxx, N.Y. 10013, Attention: General Counsel
(facsimile No.: (000) 000-0000), and (iii) ABN AMRO Rothschild LLC, 00 Xxxx 00xx
Xxxxxx, 00xx xxxxx, Xxx Xxxx, N.Y. 10055, Attention: Xxxxx Xxxx (facsimile No.:
), or, if sent to the Company, will be mailed, delivered, telefaxed or
telegraphed and confirmed to it at Xxx Xxxxxxxxxx Xxxxxxxx, 0000, Xxxxxxxx, XX
00000-000, Brazil, Attention: [Chief Financial Officer] (facsimile No.:
00-00-000-0000); provided, however, that any notice to an International
Underwriter pursuant to Section 7 will be mailed, delivered or telegraphed,
telefaxed and confirmed to such International Underwriter.
12. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 7, and no other
person will have any right or obligation hereunder.
13. Representation of International Underwriters. The Representatives
will act for the several International Underwriters in connection with this
financing, and any action under this Agreement taken by the Representatives
jointly will be binding upon all the International Underwriters.
14. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
15. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
The Company hereby irrevocably submits to the non-exclusive
jurisdiction of the Federal and state courts in the Borough of Manhattan in The
City of New York in any suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby, and waives any objection
which it may now or hereafter have to the laying of venue of any such suit or
proceeding. The Company irrevocably appoints CT Corporation System, 000 Xxxxxx
Xxxxxx, Xxx Xxxx, XX 00000, as its authorized agent in the Borough of Manhattan
in The City of New York upon which process may be served in any such suit or
proceeding, and agrees that service of process upon such agent, and written
notice of said service to the Company by the person serving the same to the
address provided in Section 11, shall be deemed in every respect effective
service of process upon the Company in any such suit or proceeding. The Company
hereby represents and warrants that the authorized agent above has accepted such
appointment and has agreed to act as said agent for service of process. The
Company further agrees to take any and all action as may be necessary to
maintain such designation and appointment of such agent in full force and effect
for a period of six years from the date of this Agreement. Notwithstanding the
foregoing, any suit or proceeding arising out of or relating to this Agreement
or the transactions contemplated hereby may be instituted by any International
Underwriter, the directors, officers, employees and agents of any International
Underwriter, or by any person who controls any International Underwriter, in any
court of competent jurisdiction in Brazil.
The obligation of the Company in respect of any sum due to any
International Underwriter shall, notwithstanding any judgment in a currency
other than United States dollars, not be discharged until the first business
day, following receipt by such Underwriter of any sum adjudged to be so due in
such other currency, on which (and only to the extent that) such International
Underwriter may in accordance with normal banking procedures purchase United
States dollars with such other currency; if the United States dollars so
purchased are less than the sum originally due to such International Underwriter
hereunder, the Company agrees, as a separate obligation and notwithstanding any
such judgment, to indemnify such International Underwriter against such loss. If
the United States dollars so purchased are greater than the sum originally due
to such International Underwriter hereunder, such International Underwriter
agrees to pay to the Company an amount equal to the excess of the dollars so
purchased over the sum originally due to such International Underwriter
hereunder.
16. Waiver of Immunity. The Company is subject to civil, commercial and
administrative law and to suit in respect of its obligations under this
Agreement, and neither the Company nor any of its properties, assets or revenues
is subject to any right of immunity (sovereign or other) under Brazilian or New
York law, from any legal action,
suit or proceeding, from the giving of any relief in any such legal action, suit
or proceeding, from set-off or counterclaim, from the jurisdiction of any
Brazilian, New York or U.S. Federal court, from service of process, attachment
upon or prior to judgment, or attachment in aid of execution of judgment, or
from execution of a judgment, or other legal process or proceeding for the
giving of any relief or for the enforcement of a judgment, in any such court,
with respect to its obligations, liabilities or any other matter under or
arising out of or in connection with this Agreement; and, to the extent that the
Company or any of its properties, assets or revenues may have or may hereafter
become entitled to any such right of immunity (sovereign or other) in any such
court in which proceedings arising out of, or relating to the transactions
contemplated by this Agreement, may at any time be commenced, the Company hereby
waives or will waive such right to the extent permitted by law and consents to
such relief and enforcement as provided in Section 15 of this Agreement.
If the foregoing is in accordance with the Representatives'
understanding of our agreement, kindly sign and return to the Company one of the
counterparts hereof, whereupon it will become a binding agreement between the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
COMPANHIA DE SANEAMENTO DO PARANA
- SANEPAR,
By.................................
[Insert title]
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written.
Acting on behalf of themselves and as the Representatives of
the several Underwriters.
By CREDIT SUISSE FIRST BOSTON CORPORATION
By.................................................
[Insert title]
By XXXXXXX XXXXX BARNEY INC.
By.................................................
[Insert title]
By ABN AMRO ROTHSCHILD LLC
By.................................................
[Insert title]
SCHEDULE A
[PRINCIPAL
AMOUNT OF
INTERNATIONAL FIRM SECURITIES]
[NUMBER OF
INTERNATIONAL FIRM SECURITIES]
[NUMBER OF INTERNATIONAL FIRM
UNDERWRITER ADSS]
----------- -----
Credit Suisse First Boston Corporation..... [$]
Xxxxxxx Xxxxx Xxxxxx Inc................... [$]
ABN AMRO Rothschild LLC.................... [$]
---------------
Total........................... [$]
