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Exhibit 2.9
SHARE SUBSCRIPTION AGREEMENT
Agreement for the Subscription of Shares ("Agreement") entered into on June 15,
1999 between the following parties, to wit, the party of the first part:
RBS Administracao e Cobrancas Ltda., a limited-liability joint-stock corporation
with head office at Avenida Xxxxx Xxxxxxxxx, 400, in the City of Porto Alegre,
State of Rio Grande do Sul, registered with the CNPJ/MP under No.
94.995.693/0001-43, herein represented by its directors, Messrs. Xxxxxx Xxxxxxx
Sirotsky and Xxxxxx Xxxxxxxxx Xxxxxx ("RBS");
MLSP -- Comercio e Participacoes Ltda., a limited-liability joint-stock
corporation, duly organized and existing in accordance with the laws of the
Federative Republic of Brazil, with head office at Xxx Xxxxxxx Xxxxxxx,
000/000, Xxxxxx Higienopolis, in the City of Porto Alegre, State of Rio Grande
do Sul, registered with the CNPJ under No. 02.429.422/0001-02, with its
Corporate Charter duly recorded at the Rio Grande do Sul State Trade Board on
March 24, 1998, under No. 00.000.000.000, herein represented by its managing
partners Messrs. Xxxxxx Xxxxxxxxx Xxxxxx, a Brazilian citizen, married, an
electronics engineer, holder of RG Identification Card No. 8000873409 SSP-RS
and registered with the CPF/MF under No. 000.000.000-00, residing and domiciled
in the City of Porto Alegre, State of Rio Grande do Sul at Rua Coronel Camisao,
237, apto. 601, and Xxxxxxx Xxxxx Xxxxxxx, a Brazilian citizen, divorced, an
electronics engineer, holder of RG Identification Card No. 4007554423 SSP-RS
and registered with the CPF/MF under No. 000.000.000-00, residing and domiciled
in the City of Porto Alegre, State of Rio Grande do Sul at Xxx Xx. Xxxx, 000,
apto. 202-B ("MLSP");
Xxxxxx Xxxxxxx xx Xxxxx, a Brazilian citizen, divorced, an attorney, holder of
RG Identification Card No. 1006824658 SSP-RS and registered with the CPF/MF
under No. 000.000.000-00, residing and domiciled in the City of Porto Alegre,
State of Rio Grande do Sul at Rua Engenheiro Xxxxxxx Xxxxxxxx, 164, apto. 301
("Afonso");
Luiz Xxxxxxx Xxxxxxxxxx, a Brazilian citizen, single, a business manager, holder
of RG Identification Card No. 2006515817 SSP-RS and registered with the CPF/MF
under No. 000.000.000-00, residing and domiciled in the City of Porto Alegre,
State of Rio Grande do Sul at Xxxxxxx Xxxxx Xxxxx, 0000 ("Xxxxxxxxxx"); and
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Xxxxxx Xxxx Xxxxx de Xxxxx, a Brazilian citizen, married, a systems analyst,
holder of RG Identification Card No. 5002912995 SSP-RS and registered with the
CPF/MF under No. 000.000.000-00, residing and domiciled in the City of Porto
Alegre, State of Rio Grande do Sul, at Xxx Xxxxxxxxxxx Xxxxxxx, 000, apto. 401
("Xxxxxx");
RBS, MLSP, Xxxxxxxxxx, Xxxxxx and Xxxxxx shall herein be referred to jointly as
"Current Controlling Parties;" and the party of the second part,
Telefonica Interactiva Brasil Ltda., a limited-liability joint-stock corporation
with head office at Rua da Consolacao 247, 6(degree) andar, sala 28-A, in the
City of Sao Paulo, State of Sao Paulo, registered with the CNPJ under No.
03.185.736/0001-70, herein represented by its representative, Xx. Xxxx Xxxxx
Saena de Buruage and by its Manager Representative Xx. Xxxxx X. Xxxxxxx
("Telefonica Interactiva Brasil");
and as Consenting Mediator:
Nutec Informatica S.A., a joint-stock corporation with head office in the City
of Porto Alegre, State of Rio Grande do Sul at Rua Silveiro, 1,111, sub-solo,
Morro de Santa Tereza, registered with the CNPJ under No. 91.088.328/0001-67,
herein represented by its Directors, Messrs. Xxxxxx Xxxxxxx Sirotsky and Xxxxxx
Xxxx Xxxxx de Xxxxx ("NUTEC");
RBS, MLSP, Barichello, Xxxxxx, Xxxxxx and Telefonica Interactiva Brasil are
henceforth to be referred to jointly as "Parties."
WHEREAS the Current Controlling Parties are joint holders of 16,613,504 (sixteen
million, six hundred thirteen thousand, five hundred four) shares of the total
capital of Nutec, a privately held company identified above, with 14,538,349
(fourteen million, five hundred thirty-eight thousand, three hundred forty-nine)
being common shares (the "Common Shares"), and 2,075,155 (two million,
seventy-five thousand, one hundred fifty-five) being preferred shares, classes A
and B (the "Preferred Shares");
WHEREAS Nutec is one of the leading companies in the market for the supply of
Internet access, production, development and distribution of content by
Internet, and also includes among its principal activities the development,
production, installation and maintenance of information systems, as well as
consulting, operational assistance, training and the holding of courses and
seminars in information services, as well as the marketing and representation of
information service systems.
WHEREAS Nutec holds as its principal asset the brand name "ZAZ" and the
technical know-how of the members of its staff, and also holds
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representative interests in the control of other corporations which also provide
Internet access;
WHEREAS Telefonica Interactiva Brazil is a subsidiary company of Telefonica
Interactiva S.A., a Spanish corporation active in the market for the supply of
Internet access in Spain and in other countries, and which has long experience
in this area, having an interest in developing that activity in Brazil through a
controlling shareholder interest in Nutec, through Telefonica Interactiva
Brasil;
WHEREAS the Current Controlling Parties have an interest in transferring control
of Nutec to a strategic partner, and consequently agree that Telefonica
Interactiva Brazil will subscribe new shares in the capital of Nutec that will
ensure corporate control.
the Parties have duly agreed among themselves to enter into this Subscription
Agreement, pursuant to the following terms and conditions:
CLAUSE I - SUBSCRIPTION OF SHARES
1.1. Subscription. The Current Controlling Parties will, on this date, hold the
Nutec extraordinary general assembly, on which occasion they may decide on the
issuance of 3,323,498 (three million, three hundred twenty-three thousand, four
hundred ninety-eight) new common shares, representing an interest equivalent to
16.67% of the total capital stock and representing control of Nutec
("Controlling Shares"). Such Controlling Shares shall be completely subscribed
by Telefonica Interactiva Brazil. RBS, MLSP, Xxxxxxxxxx, Xxxxxx and Xxxxxx
expressly waive their right of first refusal to subscribe the Controlling
Shares.
1.2 Subscription Price. The Controlling Shares shall be paid-in by Telefonica
Interactiva Brasil at the time of the subscription, in the country's current
legal tender currency. In exchange for the Controlling Shares, Telefonica
Interactiva Brasil shall pay the total subscription price of R$ 411,847,872,16,
equivalent on this date to US$ 233,077,460.20, which corresponds to the
subscription price of R$ 123.92 / US$ 20.13 per share.
CLAUSE 2. WARRANTS AND REPRESENTATIONS BY THE CONTROLLING PARTIES
The Current Controlling Parties provide and give to Telefonica Interactiva
Brasil, jointly and individually, the following warrants and representations.
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2.1. Capital Stock of Nutec. The capital stock of Nutec on this date is R$
4,638,764.16, represented solely by 16,613,504 registered shares without par
value, 14,538,349 of them being common shares and 2,075,155 being preferred
shares of classes A and B, validly issued, completely subscribed and paid-in.
There are no other shares in Nutec's capital, whether authorized, issued or
outstanding, nor have any subscriptions been agreed to as of this date, nor
options or other obligations of any kind (whether or not represented by
certificates) which impose on Nutec the obligation to issue shares of its own
capital, except for the subscription of shares mentioned in Clause 1.1 above.
2.2. Ownership of the Shares. The Current Controlling Parties are, as a whole,
the legal owners of 100% (one hundred percent) of the Common and Preferred
Shares, completely paid-in and free and clear of encumbrances, pledges, liens,
options, rights of refusal or priority for the purchase, and other claims of any
nature, and they have full right, power and authority under their respective
corporate charters, as the case may be, to participate in and vote in the Nutec
extraordinary general shareholders assembly. The number of Common Shares and
Preferred Shares which each Current Controlling Party owns on the date of this
Agreement is specified in Annex 2.2 to this Agreement. As of this date, there
are no court orders, administrative proceedings or other facts or circumstances
pending which might prevent or interfere with consummation of the transaction as
provided for in Clause 1 of this Agreement.
2.3. Existence and Compliance of Status. Nutec (a) is a corporation duly
organized, in valid existence and with compliant status in accordance with the
laws of the Federative Republic of Brazil; (b) it has full power and corporate
authority to own or maintain, under lease or similar agreement, the properties
and assets that it currently owns or maintains, as well as to engage in its
activities and business as it currently does; (c) it owns all necessary licenses
and authorizations issued by federal, state and municipal agencies to engage in
its activities, and the exercise of these activities is not in violation of any
administrative standard or regulation. The Current Controlling Parties have
previously submitted to Telefonica Interactiva Brasil copies of the corporate
charter, the Nutec Corporate Bylaws and those of the corporations mentioned in
Clause 2.4 of this Agreement, currently valid and recorded with the respective
Trade Boards. These copies submitted to Telefonica Interactiva Brasil represent
the entire and actual status of the documents of the respective corporations.
2.4. Investments in Other Corporations. Annex 2.4 to this Agreement contains a
complete and accurate list of each corporation, association or other entity in
which Nutec holds shares, quotas or other interests (the corporations on this
list in which Nutec holds an interest in the capital stock representing control
are hereinafter to be referred to as "Subsidiaries"), showing in each case the
following: (a) the number of shares or quotas, or of other interests held by
Nutec; and (b) Nutec's total
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investment in each of these corporations or entities. All shares, quotas or
other interests in such corporations owned by Nutec were validly issued,
completely subscribed and paid-in, and Nutec holds good title to each such
share, quota or other interest in each such entity. As of this date no
subscriptions, options or other obligations of any kind (whether or not
represented by certificates) have been engaged which might impose on Nutec the
obligation to issue shares, quotas or other capital interests of the
corporations listed in Annex 2.4, nor the obligation to sell, transfer or
alienate any shares, quotas or other interests owned by Nutec.
2.5. Employees. Annex 2.5 of this instrument contains a complete and accurate
list of all advisers, directors, managers and other employees of Nutec and its
subsidiaries, as well as their respective compensation and of all unions with
which they are affiliated and collective agreements signed by Nutec. All
employees of Nutec and the subsidiaries are properly recorded in the
appropriate corporate books, along with the respective compensation due to each,
at all times in accordance with the applicable laws and regulations. Both Nutec
and its subsidiaries have completed all records and filings and have taken all
necessary measures in accordance with the laws and regulations, with respect to
retirement contributions, labor laws and social contributions. All retirement
contributions and social contributions due have been completely paid or
appropriate reserves have been made on the respective balance sheets for the
fiscal year ending December 31, 1998. Except as shown in Annex 2.5A, Nutec and
the Subsidiaries are not involved in any other labor disputes. Telefonica
Interactiva Brasil and Nutec may, at their free discretion, choose the private
retirement plan for the Nutec employees.
2.6. Nutec Financial Statements and Ledgers. The Current Controlling Parties
provided Telefonica Interactiva Brasil with the balance sheet and financial
statements, accompanied by Explanatory Notes and the opinion of Nutec's
independent auditors, for the fiscal years ending December 31, 1994, December
31, 1995, December 31, 1996, December 31, 1997, December 31, 1998, as well as
the audited balance sheet corresponding to the first quarter of 1999, with all
such documents being attached to this instrument as Annex 2.6. Except with
respect to the facts indicated in the reports prepared by the independent
auditors "Chameski & Associados Auditores," which form an integral part of this
Agreement, those balance sheets and financial statements (a) are complete and
accurate in all relevant aspects; (b) are consistent with Nutec's books and
ledgers and of those of the Subsidiaries; (c) were prepared in a manner
consistent with generally accepted accounting principles in the Federative
Republic of Brazil; and (d) accurately reflect Nutec's financial status and that
of its Subsidiaries on the specified date, and correctly show the results of
their operations during the
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fiscal years to which they refer. Except where shown in Annex 2.6.A to this
instrument, as of this date Nutec has no obligation or liability (absolute,
contingent or of any other nature, due or to become due) other than those
obligations and liabilities assumed thereby during the normal and regular course
of its activities or as disclosed in the financial statements provided or in the
notes thereto which are attached or in the reports forming part of Annex 2.6 of
this Agreement. There shall be no compensation to Telefonica Interactiva Brasil
and/or to Nutec as a consequence of any accounting adjustments, in particular
those mentioned in the correspondence of the audit firm Xxxxxx Xxxxxxxx dated
June 11, 1999.
2.7. Financial Statements of the Subsidiaries. The Current Controlling Parties
have provided to Telefonica Interactiva Brasil the unaudited balance sheet and
financial statements of the Nutec Subsidiaries for the base years ending on
December 31, 1994, December 31, 1995, December 31, 1996, December 31, 1997 and
December 31, 1998, with all those documents being attached to this instrument as
Annex 2.7. Those balance sheets and financial statements (a) are complete and
accurate in all relevant aspects, (b) are consistent with the books and ledgers
of the respective Subsidiaries, (c) were prepared in a fashion consistent with
generally accepted accounting principles in Brazil, and (d) faithfully reflect
the Subsidiaries' financial status on the specified date, and correctly show the
results of their operations during the referenced fiscal years. Except with
respect to the statements made in Annex 2.7.A of this instrument, as of this
date the Subsidiaries owe no obligation or liability (absolute, contingent or of
another nature, due or to become due) other than the obligations and liabilities
assumed thereby during the normal and regular course of their activities or as
disclosed in the financial statements provided for in the notes attached hereto,
as well as in the reports comprising Annex 2.7 of this instrument.
2.8. Tax Issues. The Current Controlling Parties have provided to Telefonica
Interactiva Brasil copies of all income tax returns submitted by Nutec and its
Subsidiaries for the base years ending December 31, 1994, December 31, 1995,
December 31, 1996 and December 31, 1997, all of them attached to this instrument
as Annex 2.8. Nutec and its Subsidiaries submitted within the respective
deadlines all required federal, state and municipal tax returns. Except as set
forth in Annex 2.8.A of this instrument, all taxes, duties, fees and fiscal and
para-fiscal contributions specified as being due and payable with respect to
such declarations, and any and all taxes posted, fees and fiscal and para-fiscal
contributions on their respective activities, as well as taxes on real and
movable assets for which payment is required, except taxes not yet due, were
paid within the respective deadlines. Except with respect to the items listed
on the respective balance sheets
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of December 31, 1998 and pending items listed in Annex 2.8, Nutec and its
Subsidiaries have no debt relative to any federal, state, municipal or other
taxes corresponding to any fiscal year prior to that date, and adequate
provisions have been made on the balance sheets mentioned in Clauses 2.6 and 2.7
above for payment, by Nutec and its Subsidiaries, for all federal, state and
municipal taxes pending and unpaid, whether or not due and whether or not in
dispute. Based on its auditors' recommendations, adequate provisions had been
made on the books and ledgers of Nutec and its subsidiaries, as of December 31,
1998, relative to all such taxes existing on that date.
2.9. Dial-Up Access Clients. The minimum number of dial-up access clients as of
May 31, 1999 is 170,000, and there was no significant change which reduced the
number of Nutec subscribers by 3% (three percent) or more. The access agreement
models are represented in Annex 2.9.
2.10. Audience. The audience to the portal xxx.xxx.xxx.xx represented
approximately 200,000,000 (two hundred million) pages visited ("Page View") per
month, in May 1999. As of June 1, 1999, there were no significant changes which
reduced the number of visits to the xxx.xxx.xxx.xx portal by 10% (ten percent)
or more, as Telefonica Interactiva Brasil has already performed a good and
sufficient audience audit for purposes of this Clause.
2.11. Accounts Receivable. Except with respect to the reserves shown on the
respective balance sheets of December 31, 1998, and with the exception of the
statement in Annex 2.11 of this Agreement, as well as an estimate of 12% (twelve
percent) of the total xxxxxxxx for doubtful collections, all accounts receivable
(including trade bills for invoices), credit instruments and other obligations
corresponding to cash payments to Nutec and/or its Subsidiaries shall constitute
valid and legally enforceable obligations (except those issued as uncollectable
debts prior to December 31, 1998). As of the date of the aforementioned balance
sheet, there have been no changes to the accounts receivable, credit instruments
or other obligations, except for changes resulting from the normal and regular
course of business.
2.12. Bank Accounts. Annex 2.12 of this Agreement is an accurate list of all
bank accounts and bank balances existing on June 11, 1999, as well as bank
lines of credit maintained by Nutec and its Subsidiaries on that date, with an
indication of the names of the individuals authorized to manage them in each
case.
2.13. Insurance. Annex 2.13 of this instrument contains an accurate list of all
insurance policies maintained by Nutec and/or its subsidiaries, against risks
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usually covered by companies in the same area of activity, identifying, in each
case, the respective insurer, the value of the premium and coverage, the type of
insurance, the policy number and claims pending thereon. Each policy specified
in Annex 2.13 is currently in full force and effect, and neither Nutec nor its
subsidiaries have failed to provide notification or submit any relevant claim
relating to any insurance policy.
2.14. Geographic Coverage and Legality of Nutec Operations. Annex 2.14 to this
Agreement presents a list containing all the cities in which Nutec directly or
indirectly offers Internet access supply services and services relating to its
corporate objective. The exercise of these activities by Nutec is not in
violation of any current rule or regulation or with its relationship to any
principal or accessory contractual obligation assumed by Nutec or by the
Current Controlling Parties.
2.15. Franchise Agreements. Annex 2.15 to this Agreement contains a list of all
franchise agreements signed by Nutec by which Nutec indirectly offers Internet
access supply services. These franchise agreements have been duly signed and are
legally valid and enforceable and the exercise of these activities by the
franchisees and/or by Nutec is not in violation with any current rule or
regulation or with any principal or accessory contractual obligation assumed by
Nutec or by the Current Controlling Parties.
2.16. Labor Agreements. There is no labor agreement relating to any employee of
Nutec or its Subsidiaries which cannot be rescinded without obligation,
compensation or penalty subject to up to 30 (thirty) days prior notice, except
in cases in which there is a specific legal provision or collective labor
agreement to the contrary.
2.17. Commercial Agreements. Except with respect to the provision of Annex 2.17
to this Agreement, there are no agreements relating to licensing operations or
distribution, marketing, representation, agency, commission, publicity or
brokerage agreements signed between Nutec or its Subsidiaries, which cannot be
canceled without obligation, compensation or penalty subject to up to 30
(thirty) days prior notice.
2.18. Supply Agreements. Except with respect to the provisions of Annex 2.18 to
this Agreement, there are no agreements assigned by Nutec or its Subsidiaries
for the future purchase of materials, supplies, services, merchandise or
equipment involving disbursements, for the remaining period of validity, of
amounts equivalent on this date to US$ 50,000.00 (fifty thousand U.S. dollars)
or for which the validity period is greater than 12 (twelve) months or
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which, if considered along with all other agreements of the same nature, involve
disbursements in excess of a sum equivalent on this date to a total of US$
50,000.00.
2.19. Purchase Option. There are no agreements, contracts or commitments signed
by Nutec, the Subsidiaries or the Current Controlling Parties, pursuant to which
any shareholder, quota holder, director, manager or employee of Nutec or its
Subsidiaries has or may acquire in the future a right to any property or right
of Nutec or its Subsidiaries, or to the revenue deriving from its respective
activities.
2.20. Right of First Refusal. There are no agreements, commitments or accords
signed by Nutec, its Subsidiaries or its Current Controlling Parties aimed at a
transfer, or which contains any concession of preferential rights to third
parties, for the purchase of any asset, property or right of Nutec and/or of its
Subsidiaries.
2.21. Loans. Except with respect to the guarantees signed on this date, there
are no agreements, contracts or documents signed by Nutec, its Subsidiaries or
its Current Controlling Parties with respect to a cash loan or for which Nutec
or its Subsidiaries have any current line of credit or have assumed any
obligations with respect thereto.
2.22. Assets. The assets listed in Annex 2.22 of this Agreement are in good
maintenance and use condition, and are all capable of being satisfactorily used
in the activities for which they were designed. Nutec is the legitimate owner
and holder thereof, maintaining good and negotiable title to all assets listed
in Annex 2.22, free and clear of any encumbrances, restrictions or any other
right of guarantee. All Assets are the sole property of Nutec or its
Subsidiaries, which hold rights to them corresponding from good and negotiable
title.
2.23. Intellectual and Industrial Property. Annex 2.23 contains a complete list
of all commercial names, trademarks, logos, domains, software, copyrights and
other elements of industrial and intellectual property used by Nutec and its
Subsidiaries in their operations, on which Nutec owns all rights in its capacity
as holder thereof as recorded in its name with the National Industrial Property
Institute, at the National Library, and/or with any other body or entity, except
where disclosed otherwise in Annex 2.23, and it is hereby stated that Telefonica
Interactiva Brasil has full knowledge of pending items referring to the
administrative procedures mentioned in Annex 2.23. and there is no compensation
or future payment
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due for denial, opposition or failure to obtain final recording of the
aforementioned trademarks and in particular of the trademark ZAZ.
2.24. Rental and Leasing Agreements. Annex 2.24 contains a complete list of the
equipment and facility rental and leasing agreements signed by Nutec and its
Subsidiaries. These agreements have been duly signed and are legally valid and
enforceable and are not in violation of any current rule or regulation with
respect to any principal or accessory contractual obligations assumed by Nutec
or by the Current Controlling Parties.
2.24.1. All real properties occupied by Nutec or its Subsidiaries, as well as
all machinery equipment, tools, offices, accessories, vehicles, facilities and
other assets and properties held or used by Nutec and its Subsidiaries are in
good maintenance condition and in good operation and repair, with the exception
of normal wear and tear. None of the facilities, buildings or other assets and
properties of Nutec and its Subsidiaries, or the operation and maintenance
thereof as occurs currently, are in violation of any current zoning law, order
or administrative regulation, nor violate any restrictive clause or any legal
provision, the exception of which might, in any relevant aspect, interfere with
or impede the ongoing use thereof for the purposes for which they are currently
being used, or would considerably affect the value of such assets and
properties. No notification issued by any body, office or government authority
has been submitted to Nutec or to the Subsidiaries or to the Current Controlling
Parties, either with respect to any of the assets and properties of Nutec and
the Subsidiaries, claiming any violation of any law, order or regulation, or
demanding or warning it of the need to perform any work, repair, construction or
installation with respect to such assets and properties, without having failed
to have fulfilled them. Nutec and Subsidiaries have good and negotiable title to
all their properties and assets, including the properties and assets disclosed
on the respective balance sheets of December 31, 1998 and in Annex 2.24, free
and clear of guarantees, liens, encumbrances, mortgages, pledges, commitments,
restrictions, reserves or other obligations or charges of any kind.
2.25. Compliance with Laws, Regulations and Agreements. Except as stated to
Telefonica Interactiva Brasil in Annex 2.25 to this Agreement, neither Nutec nor
the Current Controlling Parties nor the Subsidiaries have violated any relevant
provisions, or are in breach of any term of any agreement, accord, plan,
leasing or licensing agreement, the violation or breach of fulfillment of which
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could have a significant adverse effect on Nutec's business or financial status.
2.26. Non-Violation. With the exception of other annexes already listed in this
Agreement, the entering into of this Agreement, and the issuance and
subscription of the Controlling Shares pursuant to the terms provided for
herein, did not violate any legal provision known to the Current Controlling
Parties, or any agreements or instruments to which Nutec, the Current
Controlling Parties or the Subsidiaries are party, nor will result in the early
expiration of any obligation provided for in the aforementioned agreements or
instruments, or in the filing of any lien or charge on any assets of Nutec or
the Subsidiaries; similarly, there are no existing circumstances, facts or
commitments with respect to Nutec or the Subsidiaries, or to their respective
businesses, by virtue of which, according to the terms of the applicable laws
current on this date, any change in the ownership of its shares or quotas, as
the case may be, will result in any change in the powers, rights, prerogatives
or authority of Nutec or other Subsidiaries in carrying out their businesses or
with respect to the ownership or possession of the assets used in their
respective activities.
2.27. Litigation. Except where described in Annex 2.27 of this Agreement. there
is no litigation, legal or administrative proceeding, labor claim or government
investigation pending or imminent against Nutec or against its Subsidiaries.
2.28. Liability Accounts. No shareholder, quota holder, director, manager or
employee of Nutec or its Subsidiaries, or any corporation in which any such
individual has a significant interest, is currently, directly or indirectly,
party to a transaction with Nutec or the Subsidiaries which would require
payment to such shareholder, quota holder, director, employee or corporation, or
any one thereof.
2.29. Surety and Avals. With the exception of guarantees granted to banking
institutions on this date with the knowledge of Telefonica Interactiva Brasil,
neither Nutec nor the Subsidiaries are guarantors, surety holders or, in any
other way guarantors of any third party obligations, nor are party, to any
agreement or accord by virtue of which they are required to honor any such
obligations.
2.30. Powers of Attorney. Annex 2.30 contains a true and accurate copy of all
power of attorney instruments granted by Nutec and the Subsidiaries, appointing
"ad negotia" attorneys.
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CLAUSE 3. ADDITIONAL WARRANTS AND REPRESENTATIONS BY THE CURRENT CONTROLLING
PARTIES
Each of the Current Controlling Parties, considered individually, also warrants
and represents the following to Telefonica Interactiva Brasil:
3.1. Existence and Regularity of Status of the Current Controlling Parties as
Legal Entities. That RBS and MLSP are organizations that are duly organized and
in valid existence and in regular compliance, with full power and corporate
authority to engage in business as they are currently doing and to own the
properties and assets that they currently own.
3.2. Authorization to Sign the Agreement and Anticipated Transactions. That RBS
and MLSP have full power and corporate authority to enter into this Agreement
and to consummate the transactions provided for herein. That also in the case of
RBS and MLSP, the signing and fulfillment of this Agreement and of the other
instruments provided for herein were duly authorized for all necessary corporate
measures, and that it is not necessary to have any additional corporate
authorization on their part or on the part of their shareholders to consummate
the transactions provided for herein. That this Agreement and the other
instruments provided for herein constitute and shall constitute legal, valid and
binding obligations on them, enforceable against the Current Controlling Party
in accordance with its terms and conditions.
3.3. Non-Violation. That consummation of the transactions provided for in this
Agreement shall not constitute or result in the violation of any term. condition
or provision, nor shall constitute breach pursuant to the terms thereof, nor
shall result in the creation of any encumbrance, charge or lien on any of its
properties or assets, in the case of Xxxxxxxxxx, Xxxxxx and Xxxxxx, in
accordance with any agreement or other instrument to which it is party or to
which any of its assets are bound, and in the case of RBS and MLSP, in
accordance with (a) their Corporate Bylaws; (b) any agreement or other
instrument to which they might be party or by which any of their assets might be
bound. Nor shall any law, regulation, judgment, order or court order which is
binding thereon violate such consummation, nor result in the loss of any
license, authorization, certificate, approval or right which they enjoy or have,
nor shall give the right of cancellation to any party of any relevant agreement
to which it is party.
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CLAUSE 4. WARRANTS AND REPRESENTATIONS OF TELEFONICA INTERACTIVA BRASIL
Telefonica Interactiva Brasil warrants and represents the following to the
Current Controlling Parties:
4.1. Existence and Regularity of Situation. Telefonica Interactiva Brasil is a
corporation duly organized and in valid existence in accordance with the laws of
the Federative Republic of Brazil and has all necessary power and authority to
conduct its business, as well as to sign this Agreement.
4.2. Non-Violation. The signing of this Agreement and the fulfillment of the
transactions included herein were duly and validly authorized by all necessary
corporate acts. Telefonica Interactiva Brasil has full right, authority and
legal capacity to assume the obligations provided for in this Agreement. This
Agreement constitutes a valid obligation by Telefonica Interactiva Brasil, and
is binding thereon in accordance with its respective terms and conditions,
Telefonica Interactiva Brasil's signing of this Agreement, the execution of the
transactions provided for therein and the fulfillment by Telefonica Interactiva
Brasil of its respective obligations by virtue of this Agreement shall not be in
conflict or result in a violation of any provision of:
(a) its corporate bylaws;
(b) any agreement, contract, mortgage, lease, license or other contract to
which Telefonica Interactiva Brasil is party or in which it or any of its
assets are involved;
(c) any governmental concession or license, or any permit or authorization, or
any ruling or order by any government court or body applying to Telefonica
Interactiva Brasil or to any of its assets:
(d) any law, provision, decree, rule or regulation of any jurisdiction.
CLAUSE 5. LIABILITY OF THE CURRENT CONTROLLING PARTIES
5.1. The Current Controlling Parties shall be individually, jointly and
severally liable to Telefonica Interactiva Brasil and to Nutec for the
following:
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(a) any and all taxes, fiscal contributions or retirement contributions,
including legal increases, fines and adjustments, which may fail to be
paid or collected by Nutec or by any of its Subsidiaries on the dates
required by Law and with respect to causes occurring up to this date
inclusive, as well as any pecuniary obligation of any nature, including,
but not limited to, obligations of a civil, commercial, labor, fiscal or
retirement nature of Nutec and/or its Subsidiaries and with respect to
acts or events occurring or practiced up to this date, including,
independently of the time when they were verified by Telefonica
Interactiva Brasil and/or Nutec and/or by the Subsidiaries, or demanded
and/or claimed by Nutec and/or by its Subsidiaries not reflected in the
respective balance sheet of December 31, 1998, as having been identified
by the auditors or revealed to Telefonica Interactiva Brasil by the
Current Controlling Parties and/or by Nutec and/or by its Subsidiaries,
pursuant to the provision contained in the final section of clause 2.6
above;
(b) any and all harm, loss, damage, expense or cost duly incurred by
Telefonica Interactiva Brasil and/or by Nutec and/or by the Subsidiaries
resulting in the inaccuracy or untruthfulness of any declaration made or
guaranteed, given by the Current Controlling Parties pursuant to the terms
of Clauses 2 and 3 above or of the failure to comply with any other
commitments assumed therein in this Agreement or in documents and/or
instruments relating to this Agreement; and
(c) any and all expenses or costs (including legal fees and fees of other
professionals required for the calculation of values) which Telefonica
Interactiva Brasil and/or Nutec and/or its Subsidiaries may incur by
reason of the occurrence of any of the events provided for in letters (a)
and (b) above.
5.2. The liability of the Current Controlling Parties with respect to the
elements mentioned in Clause 5.1 above shall be subject to the following
limitations:
(a) with respect to those contingencies which result from administrative and
judicial proceedings under way, as set forth in Annex 2.27 to this
Agreement, the Current Controlling Parties shall be liable only for such
amount as exceeds the global value equivalent to US$ 300,000.00 (three
hundred thousand U.S. dollars);
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(b) with respect to unknown contingencies up to an individual amount
equivalent to US$ 5,000.00 (five thousand U.S. dollars), the Current
Controlling Parties shall be subject to no liability for payment; unknown
contingencies in amounts greater than US$ 5,000.00 (five thousand dollars)
shall be the liability of the Current Controlling Parties, which shall
undertake actual disbursement when the cumulative value owed attains a
value equivalent to US$ 150,000.00 (one hundred fifty thousand U.S.
dollars).
(c) The liability of the Current Controlling Parties vis-a-vis Telefonica
Interactiva Brasil and/or Nutec and/or its Subsidiaries shall not exceed a
period of 6 years, as of the signing date of this Agreement, except in the
event of any act or notification by the authorities with jurisdiction
within the aforementioned period, in which case the liability of the
Current Controlling Parties shall not cease, even if resolution of the
issues covered by such findings or notifications occurs on a subsequent
date.
5.3. With respect to directing the proceedings, legal or administrative, as well
as labor claims involving debts and/or obligations, the payment of which is the
liability of the Current Controlling Parties pursuant to this Clause 5, the
following procedure shall be carried out:
(i) With respect to the legal and administrative proceedings and the labor
claims under way as specified in Annex 2.27 which are being handled by
outside attorneys, they shall continue to be handled in the same way,
pursuant to the provision contained in Clause 5.2 (a) above with respect
to payment liability.
(ii) With respect to the legal or administrative processes, and to labor claims
underway as specified in Annex 5.3 to this Agreement, which are being
handled by the internal legal department of RBS or its parent companies,
affiliates or subsidiaries, the Current Controlling Parties, within 90
(ninety) days subsequent to this date, shall notify Nutec and/or the
Subsidiaries to provide for substitution of the professional or
professionals specified by the Current Controlling Parties, informing them
that the progress of the proceeding shall fall to the Current Controlling
Parties, in accordance with the provision contained in Clause 5.2 (a)
above with respect to the liability for payment.
(iii) With respect to proceedings of any nature that are currently existing and
have not been disclosed to Telefonica Interactiva Brasil, they shall
continue
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to be handled in the same fashion, although under the responsibility of
the Current Controlling Parties, in accordance with the provision
contained in item 5.2. (b) above. With respect to those occurring after
this date, the provisions contained in the remainder of this Clause 5
shall be followed.
5.4. It shall be agreed that Telefonica Interactiva Brasil and Nutec promise to
inform the Current Controlling Parties about any auditing of Nutec and/or the
Subsidiaries, in order to give the Current Controlling Parties the opportunity
to appropriately clarify the matter.
5.5. Taking the knowledge of any debtor obligation, the payment or fulfillment
of which is the liability of the Current Controlling Parties according to this
Clause 5, Telefonica Interactiva Brasil must immediately notify the Current
Controlling Parties of this requirement in writing, and such notification shall
be required to set forth the details of the effective liability attributed to
it, and the respective supporting documentation.
5.5.1. In any event, the notification from Telefonica Interactiva Brasil must
be issued and received by the Current Controlling Parties within a period of at
least half the period established to present defenses or appeals, or to adopt
other applicable procedural measures, under penalty of Telefonica Interactiva
Brasil's being subject to the provision contained in Clause 5.5.2 below.
5.5.2. In the event that Telefonica Interactiva Brasil for any reason fails to
notify the Current Controlling Parties within the legal period for the
presentation of defenses, appeals for the adoption of applicable procedural
measures, with respect to any debt or obligation for which the Current
Controlling Parties are liable, Telefonica Interactiva Brasil and/or Nutec
and/or its Subsidiaries shall remain as the sole and exclusive parties liable
for such debtor obligations, including with respect to professional legal fees,
costs and procedural expenses. However, in the event that Telefonica Interactiva
Brasil notifies the Current Controlling Parties after the period established in
clause 5.5.1 above, although still with sufficient time for the Current
Controlling Parties to take the applicable legal and/or procedural measures in
the case, Telefonica Interactiva Brasil must assume 20% (twenty percent) of
the judgment, to the extent that it resulted from the delay.
5.6. Pursuant to the other provisions of this Clause 5, the Current Controlling
Parties, once notified on a timely basis of the existence of an administrative
and/or judicial proceeding, may resort to such administrative or legal defenses
as they deem applicable, assuming complete liability for all expenses deriving
therefrom, including professional fees for attorneys, costs and procedural
expenses, with Telefonica Interactiva Brasil promising to ensure that Nutec
and or its Subsidiaries grant the necessary powers of attorney for this purpose
to the attorneys
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specified by the Current Controlling Parties, exempting Telefonica Interactiva
Brasil, Nutec and the Subsidiaries, as the case may be, from any liability and
compensating them for any harm deriving therefrom, also in accordance with the
provisions of clause 5.8 below.
5.6.1. If, upon being notified by Telefonica Interactiva Brasil in the form set
forth in Clauses 5.5.1 and 5.5.2 above, the Current Controlling Parties fail,
for any reason, to assume the defense of any obligation, debt, claim and/or
process for which they are responsible pursuant to the terms of this Clause 5,
Telefonica Interactiva Brasil and/or Nutec and/or the Subsidiaries shall defend
the case diligently, with the Current Controlling Parties being required to
reimburse all costs incurred by Nutec and/or by the Subsidiaries and/or by
Telefonica Interactiva Brasil in the respective defense, plus a compensatory
fine of 20% (twenty percent) of the total expense, even in the event that the
defense is successful, and the Current Controlling Parties must, after the
defense, assume direction and control of the cases.
5.7. The Current Controlling Parties shall keep Telefonica Interactiva Brasil
and Nutec or the Subsidiaries, as the case may be, periodically and fully
informed as to progress and all occurrences, facts, measures or steps that are
relevant to the proceedings and claims over which direction and control are its
responsibility pursuant to this Agreement.
5.8. It is henceforth agreed that Telefonica Interactiva Brasil, Nutec and the
Subsidiaries, as the case may be, shall cooperate (including in the delivery of
the documents needed for undertaking the corresponding proceeding) provided that
they have been requested along with the Current Controlling Parties and the
attorneys selected thereby for undertaking the proceedings for which the former
are liable, and control pursuant to the terms of this Clause 5, at all times
avoiding engaging in acts which may hamper the responsibility of the Current
Controlling Parties. In the same way, the Current Controlling Parties promise to
not engage in any act nor to permit the practice of any act or the occurrence of
any event, with respect to the proceedings which may result in an adverse
effect, or may harm the interests of Telefonica Interactiva Brasil, Nutec and
the Subsidiaries or constitute a negative precedent, contrary to the interests
thereof. The Parties agree to make their best efforts to cooperate with each
other in order to close out all proceedings in a fashion both definitive and
satisfactory to the Parties, at all times in compliance with the right of the
Current Controlling Parties to exhaust all procedural and administrative levels
and to resort to the parceling of debts, the only exception being that
Telefonica Interactiva Brasil shall be entitled to require that the Current
Controlling Parties close the cases in question with a significant likelihood of
loss, based on an opinion from the law offices of Xxxxxxxx Xxxx Advogados or a
law office of a similar reputation, and which basically are or will be causing
it harm.
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CLAUSE 6. GUARANTEE
6.1. As a guarantee of timely payment of the obligations and contingencies of
Nutec and or its subsidiaries which are to be assumed by the Current Controlling
Parties pursuant to Clause 5 above, RBS shall irrevocably and unconditionally
guarantee Telefonica Interactiva Brasil, Nutec and the Subsidiaries, for a
period of 2 years, the credits held thereby against Nutec, resulting from loan
transactions engaged through Loan Agreements entered into on that date, the
values of which are R$ 10,602,000.00 and R$ 7,068,000.00 (the "Credits"). To
this end, RBS henceforth irrevocably and unconditionally authorizes Telefonica
Interactiva Brasil and/or Nutec to deduct from such Credits any amounts paid
thereby as a result of the obligations for which the Current Controlling Parties
are liable pursuant to the terms of this Agreement and in accordance with the
procedures agreed to in Clause 5.
6.2. RBS shall also irrevocably and unconditionally guarantee in favor of
Telefonica Interactiva Brasil, Nutec and the Subsidiaries, for a period of 180
days as of the subscription date of the Controlling Shares, a sum equivalent to
5% of the total value of the Subscription Price, which amount shall be
formalized through a loan agreement. To that end, RBS henceforth irrevocably and
unconditionally authorizes Telefonica Interactiva Brasil and/or Nutec and/or its
Subsidiaries to deduct from the loan amounts any sums paid thereby as a
consequence of obligations for which the Current Controlling Parties are liable
pursuant to the terms of this Agreement, and in accordance with the procedures
agreed to in Clause 5.
6.3. Interest and an inflation adjustment shall apply to all loan amounts
pursuant to the terms of clauses 6.1 and 6.2 above, as well as delinquent
interest and fines in the event of a delay or improper withholding of any sums.
CLAUSE 7. EXPENSES THAT ARE THE LIABILITY AND IN THE INTEREST OF THE CURRENT
CONTROLLING PARTIES
7.1. It shall be henceforth agreed that the following expenses shall be assumed
solely by the Current Controlling Parties:
(a) any and all expenses incurred and/or paid by Nutec and/or by its
Subsidiaries by reason of issues relating to the transaction
governed by this Agreement, including, but not limited to, payments
made and/or to be made by Nutec and/or by the Subsidiaries to
consultants,
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attorneys, appraisers, bankers and others for services relating to
this Agreement;
(b) expenses, costs and expenditures incurred and/or paid by Nutec
and/or by the Subsidiaries involving debts and/or obligations, the
payment of which is the responsibility of the Current Controlling
Parties pursuant to the terms of Clause 5.1 above, and/or related to
operations outside the normal and regular course of business of
Nutec and the Subsidiaries.
CLAUSE 8. SHAREHOLDER AGREEMENT
The Parties shall enter into a Shareholder Agreement on this date, to govern
certain rights and obligations deriving from their capacity as shareholders of
Nutec.
CLAUSE 9. RESOLUTION OF DISPUTES
Any dispute as may arise relating to the application of the provisions of this
Agreement shall be resolved through an arbitration proceeding pursuant to the
terms of this Clause 10 and in accordance with the following provisions.
9.1. In the event of a dispute. any of the Parties may provide written notice
to the others that it intends to resort to the dispute resolution procedures
provided for herein ("Dispute Resolution Notice"). In the event that one of the
Parties issues a Dispute Resolution Notice to the other Party, the Parties agree
to attempt to amicably resolve the issue, complaint, dispute or controversy that
has arisen between them, for a period of 30 (thirty) days counting from the date
of receipt of the Dispute Resolution Notice. In the event that the Parties are
unable to come to an agreement within the anticipated period, the issue,
complaint, dispute or controversy shall be settled through binding and final
arbitration by the Sao Paulo State Federation of Industries (FIESP) in Sao
Paulo, in accordance with the arbitration rules established by the "United
Nations Commission on International Trade Law" ("UNCITRAL").
9.2. The Arbitration Panel shall consist of 3 (three) arbitrators. I (one) of
which shall be appointed by Telefonica Interactiva Brasil and I (one) of which
shall be appointed by RBS. The third arbitrator, who shall act as chairman of
the Arbitration Panel, shall be appointed by the arbitrators appointed by
Telefonica Interactiva Brasil and by RBS. All the arbitrators shall be fluent in
Portuguese and, upon handing down their decision, they shall conform to the law.
The costs of the arbitration and execution of the decision shall be an issue to
be determined by the Arbitration Panel, in accordance with this Agreement and
the laws of the Federative Republic of Brazil.
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CLAUSE 10. FINAL PROVISIONS
10.1. Assignment and Transfer. None of the Parties may assign or transfer its
rights and obligations resulting from this Agreement without the express written
consent of all the other Parties.
10.2. Change. No Clauses of this Agreement may be changed or amended, except
subject to mutual written agreement of all the Parties.
10.3. Expenses. Each of the Parties shall be liable for the expenses incurred
thereby with respect to the negotiation, preparation and closing of the
transaction covered by this Agreement, including omissions of any nature and
professional fees (brokerage, intermediation, advising, auditing, attorney and
any other). Each of the Parties to this Agreement agrees to compensate the other
party and hold the other party harmless of any liability vis-a-vis any
individual, firm or corporation for brokerage fees, commissions, intermediation
or other similar charges relating to this transaction, for which such party, its
employees or representatives are liable.
10.4. Waiver. The waiver by any of the Parties with respect to any requirement
or right deriving from this Agreement shall only be valid if submitted in
writing and signed. No tolerance or delay by any of the Parties in ensuring
fulfillment of the obligations provided for in this Agreement shall constitute a
novation, nor shall harm or restrict the rights of such Party, nor exempt the
other Party from complete fulfillment of its obligations as provided for herein.
10.5. Confidentiality. The terms of this Agreement and the information provided
or obtained by the Parties, their administrators, agents, technicians and
consultants with respect to the objective of this Agreement or as a consequence
thereof must be Confidential, and may not be disclosed by any of the Parties in
any form, unless such information must be provided by virtue of the law or
applicable regulation to either of the Parties. Any information to be provided
by legal or regulatory requirement must be previously communicated to the other
Party.
10.6. Notification. Any notification or communication which is required or
permitted in accordance with this Agreement must be made in writing and shall be
considered as being delivered and carried out if sent by telex, fax, messenger
or mail with notice of receipt ("NR") to the address specified in writing by the
Party to which
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it must be sent, and it shall be considered as having been received on the date
of its receipt. Notwithstanding the above provision, all changes sent by fax
must be confirmed by mail sent with an NR. For purposes of this Clause, RBS,
Barichello and Afonso shall be considered as being a single party, and a
notification and/or communication made to RBS only, as set forth herein, shall
constitute notification and/or communication to RBS, Barichello and Afonso.
Unless the Parties have received a communication in conflict with the others,
the aforementioned communications and notifications must be sent to the
following addresses:
For RBS, Xxxxxxxxxx, Xxxxxx:
RBS Administracao e Cobrancas Ltda.
Xx. Xxxxx Xxxxxxxxx, 000, 0x xxxxx
Xxxxx Xxxxxx / XX
Attn.: Xxxxxx Xxxxxxx xx Xxxxx
Fax: (000) 000 0000
For Xxxxxx Xxxx Xxxxx de Xxxxx:
Xxx Xxxxxxxxxxx xx Xxxxxxx, Xx. 000, Xx. 000
Xxxxx Xxxxxx / XX
Attn.: Xxxxxx Xxxx Xxxxx de Xxxxx
Fax: (000) 000 0000
For MLSP:
MLSP Comercio e Participacoes Ltda.
Attn. Nutec Informatica X.X.
Xxx Florida, 1821, 11(degree) andar, Brooklin
04565-001 Sao Paulo, SP
Attn.: Xxxxxxx Xxxxxxx
Fax: (000)0000-0000
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The following annexes to this agreement have not been included:
- Annex 2.2 - List of shareholders
- Annex 2.4 - Investments in other corporations
- Annex 2.5 - List of employees
- Annex 2.5.A - Labor disputes
- Annex 2.6 - Financial statements and ledgers of Nutec
- Annex 2.6.A - List of liabilities
- Annex 2.7 - Financial statements of subsidiaries
- Annex 2.7.A - List of subsidiaries' liabilities
- Annex 2.8 - Income tax returns submitted by Nutec and its
subsidiaries
- Annex 2.8.A - Overdue taxes
- Annex 2.9 - List of dial-up access clients
- Annex 2.11 - Allowances for doubtful accounts
- Annex 2.12 - List of bank accounts
- Annex 2.13 - List of insurance policies
- Annex 2.14 - Geographic coverage of Nutec Operations
- Annex 2.16 - List of franchise agreements
- Annex 2.17 - List of commercial agreements with penalty
provisions for early termination
- Annex 2.18 - List of supply agreements in excess of US$ 50,000
or with a term greater than 12 months
3
23
- Annex 2.22 - List of assets
- Annex 2.23 - List of commercial names, trademarks and other
intellectual and industrial property
- Annex 2.24 - List of rental and leasing agreements
- Annex 2.25 - Violations of laws, regulations or agreements
- Annex 2.27 - Pending judicial proceedings
- Annex 2.30 - List of powers of attorney granted
- Annex 5.2 - List of legal, administrative or labor proceedings
addressed internally by RBS or its parent company.
Copies of the annexes not included herein will be provided upon request.
4
