Document:

Exhibit 4.1

 

PROMISSORY NOTE

U.S.$119,817,876.83 (One Hundred Nineteen Million Eight Hundred Seventeen Thousand Eight Hundred Seventy Six United States Dollars And Eighty Three Cents)

 

	São Paulo/SP	July 31, 2013

 

FOR VALUE RECEIVED as a loan, the undersigned TIM Celular  S.A., a corporation duly constituted and domiciled in the Federative Republic of Brazil and enrolled with the CNPJ under number 04.206.050/0001-80 with domicile at Av. Giovanni Gronchi 7143, São Paulo – SP, 05724-005 (the “Borrower”), unconditionally promises to pay to the order of BANK OF AMERICA, N.A. (the “Bank”), the principal sum of U.S.$119,817,876.83 (One Hundred Nineteen Million Eight Hundred Seventeen Thousand Eight Hundred Seventy Six United States Dollars And Eighty Three Cents) on the Maturity Date (as defined below).

The Borrower promises to pay interest on the unpaid balance of the Loan (as defined below) from and including the date of the Loan to but excluding the date such Loan is due at a rate per annum for such period equal to LIBOR Rate plus Margin, subject to the provisions of Section 3(c) hereof.  Accrued interest shall be payable on each Interest Period and the Maturity Date, provided that (a) interest payable at the Default Rate (as defined below) pursuant to Section 3(c) hereof shall be payable upon demand and (b) if the time for any payment is extended by operation of law or otherwise, interest shall continue to accrue for such extended period.

All payments hereunder shall be made in U.S. Dollars and in immediately available funds, without deduction, set-off or counterclaim.  The Bank shall maintain on its books records setting forth the amounts of principal, interest and other sums paid or payable by the Borrower from time to time hereunder.  In the event of any dispute, action or proceeding relating to this Note, such records shall be conclusive in the absence of manifest error.

1.           Certain Definitions.  As used herein, the following terms shall have the corresponding meanings.

“Anti-Terrorism Laws” means the Executive Order, the regulations administered by OFAC, the Bank Secrecy Act (31 U.S.C. §§ 5311 et seq.), the Money Laundering Control Act of 1986 (18 U.S.C. §§ 1956 et seq.), the United States of America Patriot Act and any similar law or regulation enacted in the United States, or any similar regulation or sanction enacted, administered or enforced by the United Nations Security Council, any institution of the European Union or any government authority, including (without limitation) regulations or sanctions relating to restrictive measures against Iran.

“Banking Day” means any day on which commercial banks are not authorized or required to close in New York City or Sao Paulo and which is also a day on which dealings in U.S. Dollar deposits are carried out in the London interbank market.

  

  

  

 

“Borrower’s Economic Group” means Tim Participações S.A., Intelig Telecomunicações Ltda., Tim Celular S.A, and after Acquisition  Eletropaulo Telecomunicações Ltda. and AES Communications Rio de Janeiro S.A.

“Brazil” shall mean The Federative Republic of Brazil.

“Brazilian Note” means the promissory note of the Borrower payable to the Bank governed by Brazilian Law, in the form of Exhibit A hereto.

“Change of Control” means  at any moment Telecom Italia S.p.A. ceases to be, in relation to the Borrower, the holder, directly or indirectly, of at least (i) 50% plus one of the shares representative of the voting capital stock of the Borrower; or (ii) portion of the capital stock of the Borrower assuring it to have the rights to elect the board of directors of the Borrower or manage and guide the operations and corporate activities of the Borrower unless the new direct or indirect controlling shareholder(s) are(a) company(ies) with a minimum rating equivalent to or better than a rating classification by Moody ́s of Ba1 or by S&P of BB+.

“Commitment” means US$119,817,876.83

“Default Rate” means, in respect of any amount not paid when due, a rate per annum during the period commencing on the due date until such amount is paid in full equal to a fixed rate of 1.00% p.y above the rate of interest applicable to principal hereof (including the Margin).

“Designated Jurisdiction” means any of Burma/Myanmar, Cuba, Iran, North Korea, Sudan or any other country or territory to the extent that such country or territory itself is the subject of any Sanction.

“Designated Person” means a person: (a) listed in the annex to, or otherwise subject to the provisions of, the Executive Order; (b) named as a “Specially Designated National and Blocked Person” on the most current list published by OFAC at its official website or any replacement website or other replacement official publication of such list; (c) publicly designated by the US Secretary of the Treasury to be owned or controlled by, or acting for or on behalf of, any person referred to in clause (a) or (b) above, or otherwise determined by the US Secretary of State to be subject to the terms of Section 1 of the Executive Order; (d) or entity publicly designated by the US Secretary of State to have committed, or to pose a significant risk of committing, acts of “terrorism” as defined in the Executive Order that threaten the security of US nationals or the national security, foreign policy, or economy of the United States; or (e) which otherwise is, by public designation of the United Nations Security Council or US or EU government authority, the subject of any Sanction.

“Drawdown Date” means September 20, 2013 or any other date on which the Bank makes the Loan to the Borrower.

“EBITDA”  means earnings before amortization, depreciation, interest paid and received, results of equity investments, results of non-operational income, income tax and social contribution.

  

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“Event of Default” shall have the meaning set forth in Section 10 hereof.

“Executive Order” means US Executive Order No. 13224 on Blocking Property and Prohibiting Transactions with Persons who Commit, Threaten to Commit, or Support Terrorism, which came into effect on 24 September 2001, as amended.

“Export-Control Laws” means with respect to the Borrower, (i) any laws, statutes, decrees, regulations or ordinances of Brazil which regulates the export of goods (whether directly or indirectly) to or for the rendering of services in a certain country or countries and (ii) the US Export Administration Regulations.

“Federal Funds Rate” means, with respect to a Variable Rate Loan (i) for the first day of the Loan, the rate per annum at which U.S. Dollar deposits with an overnight maturity and in a comparable principal amount to the Loan are offered by the Bank in the Federal funds market at approximately the time the Borrower requests the Loan on such day, and (ii) for each day thereafter that the Loan is outstanding, the rate per annum at which U.S. Dollar deposits with an overnight maturity and in a comparable principle amount to the Loan are offered by the Bank in the Federal funds market at approximately the time the Borrower notifies the Bank pursuant to Section 5(b) hereof of its election to continue the Loan; provided that if the Borrower fails to notify the Bank pursuant to Section 5(b) of its election to continue or repay the Loan, the Federal Funds Rate shall mean the rate per annum at which U.S. Dollar deposits with an overnight maturity and in a comparable amount are offered by the Bank in the Federal funds market at approximately 2:00 p.m. New York City time.

“Indebtedness” means, with respect to any Person, any amount payable by such Person pursuant to an agreement or instrument involving or evidencing money borrowed or received, the advance of credit, debt capital markets transactions (including bonds and debentures), a lease, a conditional sale or a transfer with recourse or with an obligation to repurchase, pursuant to a lease with substantially the same economic effect as any such agreement or instrument, or any such agreement, instrument or arrangement secured by any lien or other encumbrance upon any property owned by such Person, even though such Person has not assumed or become liable for the payment of any money under such agreement, instrument or arrangement, to which such Person is a party as debtor, borrower or guarantor.

 

“Interest Period” for the Loan means each of the following interest payment dates: (i) December 20, 2013; (ii) March 20, 2014; (iii) June 20, 2014; (iv) September 22, 2014; (v) December 22, 2014; (vi) March 20, 2015; (vii) June 22, 2015; (viii) September 21, 2015; (ix) December 21, 2015; (x) March 21, 2016; (xi) June 20, 2016 and (xii) September 20, 2016; provided that:

 

(x)       any Interest Period that would otherwise end on a day that is not a Banking Day shall be extended to the next succeeding Banking Day unless such Banking Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Banking Day; and

 

(y)       any Interest Period which begins on the last Banking Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such

 

  

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Interest Period) shall end on the last Banking Day of the calendar month at the end of such Interest Period.

“LIBOR Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, the rate appearing on Reuters BBA Libor Rates Page 3750 (or on any successor or substitute page of such page) providing rate quotations comparable to those currently provided on such page of such page, as determined by the Bank from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two Banking Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to such Interest Period.  In the event that such rate is not available at such time for any reason, then the “LIBOR Rate” with respect to such Eurodollar Borrowing for such Interest Period shall be the rate at which dollar deposits of $5,000,000 and for a maturity comparable to such Interest Period are offered by the principal London office of the Bank in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Banking Days prior to the commencement of such Interest Period.

“Loan” shall have the meaning set forth in Section 2.

“Margin” shall mean 1.35% per annum.

“Maturity Date” means September 20, 2016.

“Moody’s” means Moody's Investors Service, Inc. and its successors.

“Net Worth” means, for any Person, the patrimony (net worth) of such Person, as stated in its annual or quarterly audited financial statements disclosed.

“Note” means this Promissory Note.

“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.

“Person” means any corporation, natural person, firm, joint venture, partnership, trust, unincorporated organization or government, or any political subdivision, department or agency of any government.

“Prime Rate” means the rate of interest per annum publicly announced from time to time by the Bank as its prime rate in effect at its branch office in New York City; any change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.

“Regulatory Change” means any change after the date hereof in United States federal, state or foreign laws or regulations (including Regulation D (as defined in the definition of Reserve Requirement)) or the adoption or making after such date of any interpretations, directives or requests applying to a class of banks including the Bank of or under any United States federal or state, or any foreign, laws or regulations, including Basel III advisory opinions, (whether or not having the force of

 

  

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law) by any court or governmental or monetary authority charged with the interpretation or administration thereof.

“Reserve Requirement” means, with respect to any Interest Period, the average maximum rate at which reserves (including any marginal, supplemental or emergency reserves) are required to be maintained during the Interest Period under Regulation D of the Board of Governors of the Federal Reserve System as amended or supplemented from time to time (“Regulation D”) by member banks of the Federal Reserve System in New York City with deposits exceeding one billion U.S. Dollars against “Eurocurrency Liabilities” (as such term is used in Regulation D).  Without limiting the effect of the foregoing, the Reserve Requirement shall reflect any other reserves required to be maintained by such member banks by reason of any Regulatory Change against (i) any category of liabilities which includes deposits by reference to which the LIBO Rate is to be determined or (ii) any category of extensions of credit or other assets which includes the Loan evidenced by this Note.

“Sanction” means any international economic sanction administered or enforced by OFAC, the United Nations Security Council or the European Union.

“Subsidiary” means, with respect to the Borrower, at any time, any entity of which more than fifty percent (50%) of the outstanding voting stock or other equity interest entitled ordinarily to vote in the election of the directors or other governing body (however designated) of such entity is at the time beneficially owned or controlled directly or indirectly by the Borrower.

“S&P”  means Standard & Poor's Ratings Group, a division of McGraw Hill, Inc. and its successors.

“Total Net Debt”  means the sum of (a) all financial debt, including  loans, advances on foreign exchange contracts, exchange acceptances, derivative contracts of every order, including options, futures and forwards, and lease agreements; all obligations arising from the issuance of debt securities (whether issued domestically or abroad), including debentures, bonds, promissory notes or other securities representing debt minus (b) free and unencumbered cash position which includes marketable securities, cash and cash equivalents.

“Variable Rate” means, for any day, the higher of (i) Federal Funds Rate for such day plus 0.5% and (ii) the Prime Rate.

2.           The Loan.

(a)         The Bank agrees, on the terms and conditions of this Note, to make one loan (the “Loan”) to the Borrower on the Drawdown Date in an aggregate principal amount up to but not exceeding the aggregate amount of the Commitment.

(b)         The Borrower may borrow the Loan by giving the Bank notice by 11:00am, New York City time in a form reasonably requested by the Bank (the “Notice of Borrowing”), at least three Banking Days prior to Drawdown Date. Upon receipt of the Notice of Borrowing, the Bank shall disburse the Loan in Dollars into the account designated by the Borrower in such Notice of Borrowing.

  

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(c)         Amounts that are prepaid or repaid may not be reborrowed.

3.           Payments; Prepayments; Fees.

(a)         Place and Time of Payment.  All payments of principal of and interest on this Note and all other amounts payable hereunder shall be made by deposit to account no                      Swift Code:                                , Account Name: Bank of America, Attn: International Loan Services of the Bank at the Branch Office not later than 12:00 p.m. (New York time) on the dates due, or to such other account as the Bank may designate in writing to the Borrower.

(b)         Payments to be made on Banking Days.  Whenever any payment hereunder shall be stated to be due on a day other than a Banking Day, such payment shall be made on the next succeeding Banking Day (unless such next succeeding Banking Day would fall in the succeeding calendar month, in which case such payment shall be made on the next preceding Banking Day), and any such extension or reduction of time shall in such case be reflected in the computation of payment of interest.

(c)          Interest on Overdue Principal and Other Amounts.  In the event that any principal hereof, any interest hereon or any other amount payable by the Borrower hereunder is not paid when due (by reason of demand or otherwise) in accordance with the terms of this Note, the Borrower will pay, to the extent permitted by applicable law, interest on such past-due amount from the date such amount becomes due until the date the same is paid in full, at a rate per annum equal to the Default Rate in effect from time to time.

(d)          Voluntary Prepayments.  The Borrower may, upon five Banking Days' notice to the Bank, prepay this Note on any Banking Day; provided, however, that (x) the minimum amount of any such prepayment shall be $5,000,000.00 or any larger multiple thereof and (y) such prepayment is made together with accrued interest and any break-funding amounts due pursuant to Section 5(c). For avoidance of doubt there will be no break-funding cost if the Prepayment occurs on a Interest Period.

4.           Interest.  All computations of interest hereon shall be made on the basis of a year of 360 days for the actual number of days (including the first day but excluding the last day) occurring in the period for which interest is payable.

5.           Additional Costs, Etc.; Illegality

(a)          If as a result of any Regulatory Change the Bank reasonably determines, with evidence supporting such determination, that the cost to the Bank of making or maintaining the Loan is increased, or any amount received or receivable by the Bank hereunder is reduced, or the Bank is required to make any payment in connection with any transaction contemplated hereby, then the Borrower shall pay to the Bank, upon the Bank’s written demand, such additional amount or amounts as the Bank reasonably determines will compensate the Bank for such increased cost, reduction or payment, provided that (A) before the Bank gives such written demand, the Bank agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to designate

 

  

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a different office (lending branch) if such designation would (i) avoid the need of the Bank for giving such written demand for compensation, (ii) allow the Bank to make and maintain the Loan hereunder and (iii) not, in the reasonable judgment of the Bank, be materially disadvantageous (economically or otherwise) to the Bank; and (B) if the Bank gives to the Borrower such written demand, the Bank will provide to the Borrower, together with such written demand, information in connection to the circumstances giving rise to, and the amount of, such compensation and, where practicable, the details of the calculation of the amount of such compensation. If any event of additional cost occurs the borrower will be able to prepay the Loan without break-funding cost within 60 days from the written notice of the Bank.

(b)          Notwithstanding any other provision of this Note, if the adoption of or any change in any applicable law or regulation or in the interpretation or application thereof by any governmental authority (in each case, at any time on or after the date hereof) shall make it (or be asserted by it to be) unlawful for the Bank to honor its obligation to make or maintain its Loan hereunder (and, in the opinion of the Bank, the designation of a different applicable Bank office would either not avoid such unlawfulness or would be disadvantageous to the Bank), then the Bank shall promptly notify the Borrower, following which notice: (i) the Bank’s commitment (if still available) shall be suspended until such time as the Bank may again make and maintain its Loans or (ii) if such applicable law shall so mandate, the Bank’s Loans shall be prepaid by the Borrower, together with accrued and unpaid interest thereon and all other amounts payable to the Bank by the Borrower under the Loan Documents, on or before such date as shall be mandated by such applicable law; provided that if it is lawful for the Bank to maintain its Loan until the Maturity Date (and not otherwise deemed undesirable by the Bank in its sole discretion), then such payment shall be made on the Maturity Date. Any such funds so prepaid may not be reborrowed.

(c)          The Borrower shall pay to the Bank, upon the request of the Bank, such amount or amounts as shall be sufficient (in the reasonable opinion of the Bank) to compensate it for any loss, cost or expense which the Bank determines is attributable to any prepayment of any Loan, provided that the Bank previously delivers to the Borrower information relating to such costs, expenses and/or charges.

6.           Taxes.

(a)         Payments Free and Clear.  Any and all payments by the Borrower hereunder shall be made free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all interest, penalties or other liabilities with respect thereto including but not limited to the taxes imposed by Brazilian tax authorities, such as the Imposto sobre Operações Financeiras (IOF) created pursuant to certain applicable laws (including Decrees 7,456/2011 and 7,457/2011), excluding taxes imposed on or measured by the net income or capital of the Bank by the jurisdiction (or any political subdivision of such jurisdiction) in which the Bank's lending office is located or under which the Bank is organized (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter called “Taxes”). If the Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder to the Bank, (x) the Borrower shall forthwith pay to the Bank such additional amount as may be necessary so that after making all required deductions for Taxes (including deductions applicable to

 

  

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additional amounts payable under this Section 6) the Bank receives an amount equal to the sum it would have received had no such deductions been made, (y) the Borrower shall make such deductions and (z) the Borrower shall pay the full amount deducted to the relevant taxing authority or other authority in accordance with applicable law.

(b)           Payment of Stamp Taxes.  In addition, the Borrower shall pay any present or future stamp or documentary taxes or other excise or property taxes, charges or similar levies which arise in any jurisdiction from any payment made hereunder or from the execution, delivery, registration or enforcement of, or otherwise with respect to, this Note (all such taxes, charges or levies being herein called “Other Taxes”).

(c)           Reimbursement of Taxes Paid by the Bank.  The Borrower will reimburse the Bank for the full amount of Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed on amounts payable under this Section 6) paid by the Bank or any liabilities (including, without limitation, penalties, interest and expenses other than those attributable to the gross negligence of the Bank) arising therefrom or with respect thereto.  Reimbursement under this Section 6(c) for any Taxes, Other Taxes or liabilities shall be made within 30 days from the date the Bank makes written demand therefor.

(d)           Tax Certificates.  Within 30 days after the date of any payment of Taxes, the Borrower will furnish to the Bank the original or a certified copy of a receipt evidencing payment thereof.

7.            Conditions Precedent to the Loan.

In addition to having received a Notice of Borrowing as set forth in Section 2(b) hereto, the obligation of the Bank to make the Loan hereunder is subject to the condition precedent that all of the following conditions shall have been fulfilled to the satisfaction of the Bank and its counsel on or before the Drawdown Date:

(a)           Corporate Documents.  The Bank shall have received certified copies of the charter and by-laws (or equivalent documents) of the Borrower and of all corporate authority for the Borrower (including, without limitation, board of director resolutions, powers of attorney and evidence of the incumbency of officers) with respect to the execution, delivery and performance of this Note and each other document to be delivered by the Borrower in connection herewith.

(b)           Documents Supporting the Loan.  The Bank shall have received this Note duly executed by the Borrower.

(c)           Process Agent Acceptance.   The Borrower irrevocably appoints Telecom Italia Sparkle of North America, Inc. as its agent of process.  The Bank shall have received an executed letter, in form and substance satisfactory to the Bank, from Telecom Italia Sparkle of North America, Inc acceptable to the Bank, acknowledging such agent's acceptance of its appointment as agent for service of process with respect to the Borrower for a period of time ending no earlier than the date six months after the Maturity Date and that all of the fees payable to such process agent, if any, shall have been paid in full.

  

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(d)           No Material Adverse Change.  There shall not have occurred any event which, in the opinion of the Bank, would involve a material adverse change in the business, economic or financial condition of the Borrower or in general market conditions.

(e)           No Event of Default; Accuracy of Representations and Warranties.  On the Date of this agreement, (x) no Event of Default or event that with notice or lapse of time or both would become an Event of Default shall have occurred and be continuing; and (y) the representations and warranties made by the Borrower in Section 8 hereof shall be true and correct on and as of the Drawdown Date.

(f)           Government Approvals.  The Bank shall have received the Financial Transaction Registration (ROF) issued by the Central Bank of Brazil.

(g)          Other Documents.  The Bank shall have received such other documents as the Bank or its counsel may reasonably request.

8.            Representations and Warranties.  The Borrower represents and warrants to the Bank as follows:

(a)           Incorporation and Existence.  The Borrower is a company duly organized, validly existing and in good standing under the laws of Brazil and has the power and authority to execute and deliver this Note, to incur the obligations to be incurred by it hereunder and to perform and observe the provisions hereof.

(b)           Corporate Power and Authority.  The Borrower has taken all necessary action to authorize the execution and delivery of this Note and all other documents to be executed and delivered by it in connection herewith and the performance of its obligations hereunder.

(c)           Legally Enforceable Note.  This Note has been duly executed and delivered by the Borrower and constitutes a legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium and similar laws affecting creditors' rights generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

(d)           Governmental Authorizations.  All governmental authorizations, including, without limitation, Financial Transaction Registration (ROF) issued by the Central Bank of Brazil, and actions of any kind necessary for the due execution, delivery and performance of this Note by the Borrower or required for the validity or enforceability against the Borrower of this Note, have been obtained or performed and are valid and subsisting in full force and effect.

(e)           Consent and Approvals.  No consent or approval of, or notice to, any creditor of the Borrower is required by the terms of any agreement or instrument evidencing any Indebtedness of the Borrower for the execution or delivery of, or the performance of the obligations of the Borrower under, this Note, and such execution, delivery and performance will not result in any breach or violation of, or 

 

  

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constitute a default under, the charter or by-laws of the Borrower or any agreement, instrument, judgment, order, statute, rule or regulation applicable to the Borrower or to any of its property.

(f)           Pari Passu Status.  The payment obligations of the Borrower under this Note rank at least pari passu with all of its other senior unsecured Indebtedness, whether now existing or hereafter outstanding, except for obligations accorded preference by mandatory provisions of law.

(g)           Absence of Litigation.  There are no actions, proceedings (judicial or administrative) or claims pending or, to the knowledge of the Borrower, threatened, the adverse determination of which might have a material adverse effect on the financial condition of the Borrower or impair its ability to perform its obligations under, or affect the validity or enforceability of, this Note.

(h)           IBF Language. The Borrower, a nonbank entity located outside the United States of America, understands that it is the policy of the Board of Governors of the Federal Reserve System of the United States that extensions of credit by international banking facilities, such as the Loan hereunder, may be used only to finance operations of the Borrower, or that of the Borrower’s affiliates, outside the United States.

(i)           Waiver of Sovereign Immunity; Commercial Activity.  Neither the Borrower nor its property has any right of immunity on the grounds of sovereignty or otherwise from jurisdiction, attachment (before or after judgment) or execution in respect of any action or proceeding relating in any way to this Note that may be brought in the courts of Brazil or New York and the Borrower hereby irrevocably waives any right to immunity.  The execution, delivery and performance of this Note by the Borrower constitute commercial transactions.

(j)           Use of Proceeds.  The proceeds of the Loan shall be entirely used for repayment of obligations under the Promissory Note issued by the Borrower in favor of the Bank on September 6, 2011, in a principal amount of U.S.$119,817,876.63, and will not be used to finance the Borrower’s operations in the United States, in accordance to Section 8(h) hereof.

(k)           Absence of Event Default. No Event of Default exists or has occurred and is continuing and no Event of Default will occur as a result of the execution of this Note and disbursement of the Loan.

(l)           No Violation of Laws.  The execution, delivery and performance by the Borrower of this Note does not and will not violate any provision of any law, regulation, order, writ, judgment, injunction, decree, determination or award presently in effect having applicability to the Borrower.

(m)           Compliance with Laws.  The Borrower is in compliance with all laws, including environmental laws.

(n)           Margin Stock.  The Borrower will not use the proceeds of borrowings made hereunder, directly or indirectly, or immediately, incidentally or ultimately, for the purpose of purchasing or carrying any securities listed in a public exchange market or to extend credit to others for the purpose

 

  

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of purchasing or carrying equity securities or to refinance or refund indebtedness originally incurred for such purpose.

(o)           Operating Company.  The Borrower is an operating company and not a holding company. The Borrower is not or does not hold itself out as being engaged primarily, or proposing to engage primarily, in the business of investing, reinvesting, or trading in securities. The Borrower is not engaged or proposing to engage in the business of investing, reinvesting, owning, holding, or trading in securities nor does it own or propose to acquire investment securities having a value exceeding 40% of the value of such Borrower's total assets (exclusive of government securities and cash items) on an unconsolidated basis.

(p)           Form of Documents.  This Note and the Brazilian Note attached hereto as Exhibit “A” are in proper legal form under the laws of Brazil for the enforcement thereof against the Borrower, under such laws.  Under the laws of Brazil, (A) the choice of the laws of the State of New York as set forth in the Note to which the Borrower is party governed by the law of the State of New York is a valid choice of law, and (B) the irrevocable submission to jurisdiction and consent to service of process and appointment of an agent for service of process by the Borrower, in each case, as set forth herein is legal, valid, binding and effective.

(q)           Anti-Terrorism.  Neither the Borrower nor any of its respective brokers or other agents:

(i)           to its knowledge is in violation of any Anti-Terrorism Law or Export-Control Law;

(ii)          to its knowledge is a Designated Person;

(iii)         to its knowledge deals in any property or interest in property blocked pursuant to any Anti-Terrorism Law or Export-Control Law; or

(iv)         to its knowledge is located, incorporated or ordinarily resident in a Designated Jurisdiction.

Anything to the contrary in this Section 8(q) notwithstanding, the Borrower and the Bank agree that the Borrower’s existing international roaming agreements entered into with companies located in Iran, Sudan and Cuba shall not be deemed to constitute a breach of any Anti-Terrorism Law or any Export-Control Law, but only to the extent that (x) each such agreement was entered into on arms’-length terms and conditions, (y) each such agreement was entered into by the Borrower in the ordinary course of its business, and (z) the Borrower did not enter into any such agreement with the intent to breach or evade any Anti-Terrorism Law or any Export-Control Law.

9.           Covenants.  From the date hereof, the Borrower covenants as follows:

(a)         Lines of Business.  The Borrower will at all times continue to engage in the same line of business engaged in by the Borrower on the date hereof , and will not (i) engage to any substantial extent in any line or lines of business activity other than such current lines of business including the

 

  

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Acquisition of Eletropaulo Telecomunicações Ltda. and AES Communications Rio de Janeiro S.A. which is hereby consented to by the Bank, or (ii) change its corporate purpose (objeto social).

 

  (b)           Limitation on Fundamental Changes.  The Borrower will not convey, sell, lease, transfer or otherwise dispose of, in one transaction or in a series of transactions, its property, or create, assume or suffer or permit to exist any sale-lease back transactions except:

 

	 	
I. 

	
in the ordinary course of its business;

 

	 	
II. 

	
of obsolete or unused assets;

 

	 	
III. 

	
within the Group in arm ́s Length transaction; and

 

	 	
IV. 

	
any other disposal for an aggregate consideration not exceeding 30% of Borrower’s total assets (as stated in its most recent annual or quarterlyfinancial statements disclosed).

 

(c)           Financial Information.  The Borrower shall deliver, upon written request, to the Bank (i) within 90 days following the end of each fiscal year of the Borrower, its annual audited financial statements; and (ii) within 90 days following the end of each fiscal year of Tim Participações S.A., the annual audited consolidated financial statements of Tim Participações S.A.; (iii) within 45 days following the end of each fiscal quarter of Tim Participações S.A., the quarterly audited consolidated financial statements of Tim Participações S.A.; all in accordance with Brazilian GAAP or IFRS standards.

(d)           Corporate Existence, Approvals.  The Borrower shall maintain and keep in full force and effect its legal and corporate existence, rights (including without limitation all real and intellectual property rights), privileges, licenses, franchises and all approvals and consents required by third parties and/or any governmental authority for the incurrence of the Loan and conduct of its business, as applicable.

(e)           Compliance.  The Borrower will do or cause to be done all things from time to time necessary to comply and, as applicable, cause each of its Subsidiaries to comply in all material respects with all applicable laws, rules, orders and regulations (including environmental laws).

(f)           Notice of Event of Default.  The Borrower will notify the Bank in writing as soon as it becomes aware of the occurrence of any event that results or may result in the nonperformance or default by the Borrower of any obligation under this Note and/or any other instrument related hereto.

(g)           Insurance.  The Borrower will maintain its property duly insured with reputable insurance companies or associations in such amounts and covering such risks as are usually carried by companies engaged in similar businesses and owning similar properties in Brazil, and, upon the request of the Bank, promptly furnish to the Bank copies or other evidence of such insurance policies as may be in effect from time to time.

  

12

  

 

(h)           Transactions with Affiliates.  The Borrower will not enter, directly or indirectly, into any transaction with an affiliate, except (A) in the ordinary course of and pursuant to the reasonable requirements of its business and upon commercially reasonable terms that are no less favorable to it than those which might be obtained in a comparable arm’s-length transaction at the time from a Person which is not such an affiliate, and (B) for intercompany loans which, in the aggregate, do not and will not result in the Borrower being in a materially weaker economic and financial condition.  For purposes hereof, “materially weaker economic and financial condition” means the ratio of Total Net Debt to EBITDA of the Borrower exceeding 3.5x, based on its most recent financial statements.

(i)           Additional Information and Documents.  The Borrower will deliver to the Bank such other information and/or documentation respecting the Borrower or the Borrower’s business, properties or the condition or operations, financial or otherwise, of the Borrower, as the Bank may from time to time reasonably request.

(j)           Ranking.  The Borrower will take any and all actions necessary such that its payment obligations hereunder as of the date hereof shall rank at least pari passu in all respects with all other senior unsecured Indebtedness of the Borrower, whether now existing or hereafter outstanding,

(k)           Mergers Etc.   With the exception of any incorporation, merger, consolidation, division, transfer or reorganization occurring among companies within the Borrower’s Economic Group, the Borrower will not be incorporated, or merge or transfer all or substantially all its assets to another entity or as another entity if, by the time of such incorporation, merger, consolidation, division, transfer or reorganization, the resulting entity, survivor or transferee, after such action, (1) does not assume all the obligations stipulated in this Note or any other document in connection herewith in which it is a party or to which its predecessor has been a party, by order of law or by means of an agreement reasonably satisfactory to the Bank; and/or (2) has a materially weaker economic and financial condition than the Borrower, as appropriate and if applicable, prior to such merger, consolidation, division, transfer or reorganization. For purposes of item (2) of this Section, “materially weaker economic and financial condition” means the resulting entity, survivor or transferee presents a ratio of the Total Net Debt to EBITDA exceeding 3.5x, based on its pro-forma consolidated financial statements.

(l)           Dividends.  The Borrower will not distribute or pay dividends, interest on own capital or any other profit participation established in contract or in corporate documentation, above the minimum amount determined by law or in corporate documentation in effect on any such date unless at the time of such distribution or payment there shall not exist, and shall not thereby arise or result from such distribution or payment, any Event of Default or other event or condition which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

(m)           Capital Expenditures, Investments, Loans and Advances.  In case of any Event of Default or event or condition which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default the Borrower will not, and will not permit any subsidiary to, make any capital expenditure, investment, loan or advance other than in the ordinary course of business consistent with past practices in relation to its existing business.

  

13

  

 

(n)           Anti-Terrorism/Sanctions Covenants.

(i)           The Borrower shall not knowingly engage in any transaction that violates any of the applicable prohibitions set forth in any Anti-Terrorism Law or Export-Control Law.

(ii)          To the knowledge of the Borrower, (i) none of the funds or assets of the Borrower that are used to repay the Loan shall constitute property of, or shall be beneficially owned directly or indirectly by, any Designated Person and (ii) no Designated Person shall have any direct or indirect interest in the Borrower that would constitute a violation of any Anti-Terrorism Laws or Export-Control Laws.

(iii)         The Borrower shall not knowingly fund all or part of any payment under this Note out of proceeds derived from transactions that violate the applicable prohibitions set forth in any Anti-Terrorism Law or Export-Control Law.

(iv)         The Borrower shall not knowingly, directly or indirectly, use the proceeds of the Loan to lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other person to fund activities of or business with any Designated Person or any person or business located in a Designated Jurisdiction.

(v)          No US Subsidiary or any officer, director, employee or agent of the Borrower that is a US citizen, shall knowingly participate in or facilitate transactions or business planning involving any Designated Person or any Designated Jurisdiction.

Anything to the contrary in this Section 9(n) notwithstanding, the Borrower and the Bank agree that the Borrower’s existing international roaming agreements entered into with companies located in Iran, Sudan and Cuba shall not be deemed to constitute a breach of any Anti-Terrorism Law or any Export-Control Law, but only to the extent that (x) each such agreement was entered into on arms’-length terms and conditions, (y) each such agreement was entered into by the Borrower in the ordinary course of its business, and (z) the Borrower did not enter into any such agreement with the intent to breach or evade any Anti-Terrorism Law or any Export-Control Law.

(o)           Process Agent Acceptance.   The Borrower shall appoint an agent of process located in New York and acceptable to the Bank,  if Telecom Italia Sparkle of North America, Inc. for any reason, ceases to act as its agent of process. The Bank shall have received an executed letter, in form and substance satisfactory to the Bank, acknowledging such agent's acceptance of its appointment as agent for service of process with respect to the Borrower for a period of time ending no earlier than the date six months after the Maturity Date and that all of the fees payable to such process agent, if any, shall have been paid in full. The appointment shall take place within 3 Business Days after Italia Sparkle of North America, Inc. ceases to act as its an agent of process.

10.           Events of Default.  If any of the following events (“Events of Default”) shall occur and be continuing:

  

14

  

 

(a)           The Borrower fails to pay any principal and interest or any portion thereof within two (2) calendar days from the date such amount becomes due and payable (whether at stated maturity or otherwise), provided that such two (2) calendar days cure period is only granted to the Borrower by the Bank if the Borrower delivers to the Bank, on the date immediately following such amount’s due date for payment, a notification, by the legal representative of the Borrower declaring that the Borrower has sufficient cash, on that date, to honor its payment obligations due on such date, that the non-payment occurred due to an operational error not within the Borrower’s control for remedy and that the payment will be made on the immediately following day, and provided further that such two (2) calendar days cure period does not affect the Borrower’s obligation to pay overdue interest on any interest or other amount in accordance with Section 3(c) - Interest on Overdue Principal and Other Amounts hereof; or

(b)           The Borrower fails to perform or observe any covenant or agreement contained herein to be performed or observed by it or any representation or warranty of the Borrower in this Note or in any other document delivered in connection herewith proves to have been incorrect, incomplete or misleading in any material respect at the time it was made or repeated or deemed to have been made or repeated; or

(c)            The Borrower shall (i) be in default, event of default or other similar condition or event (however described) under one or more agreements or instruments in respect of any Indebtedness entered into between the Borrower and the Bank or its affiliates; or (ii) be in default, event of default or other similar condition or event (however described) under one or more instruments or agreements in respect of any Indebtedness entered into between the Borrower and any party, other than the Bank or its affiliates, which default, event of default, other condition or event causes, involves or may cause or involve, in accordance with the provisions of such agreements or instruments, the early maturity or acceleration of Indebtedness in an aggregate amount exceeding US$100,000,000.00 (One hundred million United States Dollars) (or its equivalent in other currencies); or

(d)           The Borrower (i) is dissolved, (ii) commences a voluntary case in bankruptcy or any other action or proceeding for any other relief under any law affecting creditors' rights that is similar to a bankruptcy, debt rehabilitation or reorganization proceeding, law or (iii) consents by answer or otherwise to the commencement against it of an involuntary case in bankruptcy or any other such action or proceeding, or a proceeding is commenced in an involuntary case in bankruptcy in respect of the Borrower or any material Subsidiary or any property of the Borrower or any such material Subsidiary; or

(e)           Any governmental authority or court takes any action that, in the reasonable opinion of the Bank, materially adversely affects the condition of the Borrower or its ability to perform its obligations under this Note; or

(f)           A moratorium is enacted by Brazil or the central bank or any agency or political subdivision of Brazil affecting the Borrower's right and obligation to effect payment under this Note or otherwise to perform its obligations hereunder; or

  

15

  

 

(g)           The payment obligations of the Borrower under this Note cease to rank at least pari passu with all of its other senior unsecured Indebtedness, except for obligations accorded preference by mandatory provisions of law; or

(h)           The Borrower suffers protest of bills (Protesto) in an individual or aggregate amount equal to or exceeding US$100,000,000.00 (one hundred million United States Dollars) (or its equivalent in other currencies), and such protest(s) is(are) not cancelled within 15 São Paulo business days; or

(i)           This Note shall, at any time and for any reason, cease to be in full force and effect or shall be declared to be null and void, or the validity or enforceability thereof shall be contested by the Borrower, or the Borrower shall deny that it has any or further liability or obligation hereunder or thereunder; or

(j)           Any judicial proceeding is filed against the Borrower which may materially adversely affect is financial condition; or

(k)          A Change of Control occurs;

THEN, in any such case, if the Bank shall elect by notice to the Borrower, the unpaid principal amount of this Note, together with accrued interest, shall become forthwith due and payable; provided that in the case of an Event of Default under clause (d) above, the unpaid principal amount of this Note, together with accrued interest, shall immediately become due and payable without any notice or other action by the Bank.

11.           Notices.  All notices, requests, demands or communications hereunder shall be in writing and shall be given to or made upon the respective parties hereto at the following addresses:

 

  

16

  

 

	
If to the Borrower:

	
If to the Bank:

	
Tim Celular S.A

	
Bank of America, N.A.

	 	 
	
Av. Das Américas 3.434

7o andar , Bloco 1

Rio de Janeiro – RJ, 22640-102, Brasil

Attn.:Rodrigo Guimarães Galvão

(Gerência de Tesouraria)

 Tel:55-021-4009-3100

Fax:55-021-4109-3943

	
50 Rockefeller Plaza

New York NY 10020-1605– EUA

Attn.: Portia Poindexter

Telefone: + 1.646-855-0870

Fac-símile: + 1.704-409-0655

E-mail:  portia.poindexter@bankofamerica.com

	 	 
	  	
With a copy to:

	 	 
	  	
BANK OF AMERICA MERRILL LYNCH BANCO MÚLTIPLO S.A.

Avenida Brigadeiro Faria Lima, n° 3400, 18° andar

São Paulo, SP – 04538-132 – Brasil

Att.: Cristiana Costa / Fernanda Herrera Castro

Telefone: + 55 (11) 2188 4710 / 4486

Fac-símile: + 55 (11) 2188 4512 / 4595

E-mail: cristiana.costa@baml.com / fernanda.castroherrera@baml.com

c/c: Departamento Júridico

Attn.: André Teixeira / Eduardo Furlan

Telefone: + 55 (11) 2188-4428 / + 55 (11) 2188-4738

Fac-símile: + 55 (11) 2188-4227

E-mail: andreaulus.teixeira@baml.com / eduardo.furlan@baml.com

12.           Miscellaneous.

(a)           The Borrower waives presentment, notice of dishonor, protest and any other formality with respect to this Note.

(b)           This Note sets forth the entire agreement between the parties hereto, supersedes all prior communications and understandings of any nature and may not be amended, supplemented or altered except in a writing signed by both parties hereto.

(c)           The Borrower agrees to reimburse the Bank in full on demand, whenever an Event of Default has occurred, for all reasonable costs, expenses and charges including reasonable attorneys’ fees incurred by the Bank during or as a result of such Event of Default, or incurred by the Bank in enforcing its rights and remedies under this Note or in accordance with applicable law provided that the Bank previously delivers to the Borrower information relating to such costs, expenses and/or charges.

(d)           This Note shall be binding on the Borrower and its successors and assigns and shall inure to the benefit of the Bank and its successors and assigns, except that the Borrower may not delegate any obligations hereunder without the prior written consent of the Bank.  The Bank may at any time, without consent from the Borrower, assign or otherwise transfer or sell participations in this

 

  

17

  

 

Note or any of its rights with respect thereto to any third party, including, but not limited, to any Federal Reserve Bank or to any banks, financial institutions or any affiliates of the Bank (including, any entity (whether a corporation, partnership, trust or otherwise) that is engaged in making, purchasing, holding or otherwise investing in bank loans and similar extensions of credit in the ordinary course of its business and is administered or managed by the Bank or an affiliate of the Bank).

(e)           The Bank agrees (on behalf of itself and each of its affiliates, directors, officers, employees and representatives) to use reasonable precautions to keep confidential, in accordance with safe and sound banking practices, any non-public information supplied to it by the Borrower pursuant to this Note which is identified by the Borrower as being confidential at the time the same is delivered to the Bank, provided that nothing herein shall limit the disclosure of any such information (A) to any subsidiaries or affiliates of the Bank, (B) to the extent required by statute, rule, regulation or judicial process, (C) to counsel for the Bank, (D) to bank examiners, auditors or accountants, (E) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Note or the enforcement of rights hereunder, (F) to any actual or prospective assignee or participant, or (G) to any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations; provided, further, that in no event shall the Bank be obligated or required to return any materials furnished by the Borrower.

(f)           Any suit, action or proceeding against the Borrower with respect to this Note or on any judgment entered by any court in respect thereof may be brought in the Supreme Court of the State of New York, County of New York, or in the United States District Court for the Southern District of New York or in the courts of Brazil, as the Bank may elect in its sole discretion, and the Borrower submits to the nonexclusive jurisdiction of such courts for the purpose of any such suit, action or proceeding or judgment.  The Borrower hereby waives any objection which it may now or hereafter have to the laying of the venue of any suit, action or proceeding arising out of or relating to this Note brought in such courts, and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.  The Borrower irrevocably appoints Telecom Italia Sparkle of North America, Inc.745 Fifth Avenue 27th Floor New York, New York 10151 Tel: (212) 310-9000, as its agent to receive service of process or other legal summons for purposes of any such suit, action or proceeding, and agrees that the failure of such agent to give any notice of any such process or summons to the Borrower shall not impair or affect the validity of such service or of any judgment based thereon.  So long as the Borrower has any obligation under this Note, it will maintain a duly appointed agent in New York City for the service of such process or summons.

(g)           TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE BORROWER WAIVES ITS RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS NOTE AND  THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

(h)           This Note shall be governed by and interpreted and construed in accordance with the law of the State of New York, without regard to principles of conflicts of laws. For purposes solely of article 9 of Brazilian Decree-Law No. 4.657 dated September 4, 1942, the transactions contemplated hereby have been proposed to the Borrower by the Bank. For any purposes hereof, including, but not

 

  

18

  

 

limited to, the enforcement, collection and payment of the Loan in Brazil, in the Bank’s sole discretion, the parties hereto agree that (i) the Loan shall be deemed as an enforceable out-of-court debt instrument (título executivo extra-judicial), pursuant to Section 585, II, of the Brazilian Civil Procedure Code (Law 5,869/73); (ii) all amounts (including, without limitation, the principal, interests, expenses and taxes) owed by the Borrower herein shall be deemed as a net and certain debt (dívida liquida e certa) to the extent that the Bank is required to enforce, collect or defend them before any Brazilian Courts and authorities against the Borrower.  The Borrower further acknowledges and consents that any discussion or enforcement and collection of the Loan and related amounts in Brazil shall be made through an expedited enforcement claim (ação de execução) or any other means elected by the Bank, at its sole discretion; and (iii) in accordance with Section 585, § 2th, of the Brazilian Civil Procedure Code (Law 5,869/73), this Note complies with all the requirements of, and contains all the formalities of, the place where it has been executed.  The Borrower agrees that any evidence of payment of the principal amount due under this Note in the amount set forth herein, shall constitute valid and sufficient evidence of the validity and enforceability of this Note before any Brazilian Courts, as the case may be.  Finally, the Borrower agrees that the Bank shall be waived of any requirement to present any bonds or security, including, but not limited to, the one set forth in Article 835 of the Brazilian Civil Code or any other similar law, for the discussion or enforcement of this Note and/or the Loan before any Brazilian Courts, it being agreed that the Borrower hereby expressly waives any right to request the Bank to post any bond required to initiate or file lawsuits against the Borrower in any jurisdiction.

(i)           To the extent that the Borrower may now or hereafter be entitled, in any jurisdiction in which judicial proceedings may at any time be commenced with respect to this Note, to claim for itself or its revenues or properties any immunity from the jurisdiction of any court or from legal process (whether from service or notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise), and to the extent that in any such jurisdiction there may be attributed to the Borrower any such immunity (whether or not claimed), the Borrower hereby irrevocably agrees not to claim, and hereby waives, such immunity in respect of its obligations under this Note.

(j)           Each reference in this Note to U.S. Dollars is of the essence.  The obligation of the Borrower in respect of any amount due under the Note shall, notwithstanding any payment in any other currency (whether pursuant to a judgment or otherwise), be discharged only to the extent of the amount in U.S. Dollars that the Bank may, in accordance with normal banking procedures, purchase with the sum paid in such other currency (after any premium and costs of exchange) on the Banking Day immediately following the day on which the Bank receives such payment.  If the amount in U.S. Dollars that may be so purchased for any reasons falls short of the amount originally due, the Borrower shall pay such additional amounts, in U.S. Dollars, as may be necessary to compensate for such a shortfall.  Any obligation of the Borrower not discharged by such payment shall be due as a separate and independent obligation and, until discharged as provided herein, shall continue in full force and effect.

(k)           The Borrower acknowledges that the Bank may have and may in the future have investment and commercial banking, trust and other relationships with other companies in respect of which the Borrower may have conflicting interests regarding the transactions described herein and

 

  

19

  

 

otherwise.  The Borrower acknowledges that the Bank may perform its functions in connection with such fiduciary or other relationships without regard to its relationship with the Borrower hereunder.  The Bank will not use confidential information obtained from Borrower by virtue of the transactions contemplated by this Note or its other relationships with the Borrower in connection with the performance by the Bank of services for other companies, and the Bank will not furnish any such information to other companies.  The Borrower also acknowledges that the Bank has no obligation to use in connection with the transactions contemplated by this Note, or to furnish to the Borrower, confidential information obtained from other companies.

(l)           The Borrower hereby agrees to indemnify, protect, save and keep harmless the Bank, its officers, directors, shareholders, employees, affiliates, successors, assigns, agents and servants (each, an “Indemnified Party”) from and against, and to pay to the Bank promptly upon demand the amount of, any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses or disbursements of any kind or nature whatsoever that may be imposed on, incurred by or asserted against any Indemnified Party in any way relating to or arising out of this Note or any action taken or omitted by such Indemnified Party under this Note, provided, however, that the Borrower shall not be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from such Indemnified Party’s gross negligence or willful misconduct as found in a final, non-appealable judgment by a court of competent jurisdiction.

(m)           All payments made under this Notes shall be made in Dollars (the “Agreement Currency”), and, if for any reason any payment made hereunder is made in a currency (the “Other Currency”) other than the applicable Agreement Currency, then to the extent that the payment actually received by the Bank, when converted into the applicable Agreement Currency at the Rate of Exchange (as defined below) on the date of payment (or, if conversion on such date is not practicable, as soon thereafter as it is practicable for the Bank to purchase the applicable Agreement Currency) falls short of the amount due under the terms of this Note or any Loan Document, the Borrower shall, as a separate and independent obligation of the Borrower, indemnify the Bank and hold the Bank harmless from and against the amount of such shortfall.  As used in this Section, the term “Rate of Exchange” means the rate at which the Bank is able on the relevant date to purchase the applicable Agreement Currency with the Other Currency and shall include any premiums and costs of exchange payable in connection with the purchase of or conversion into, the applicable Agreement Currency.

(n)           The Bank hereby notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub.L. 107-56 (signed into law October 26, 2001)) (the “Act”), the Bank is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow the Bank to identify the Borrower in accordance with the Act.  The Borrower shall, promptly following a request by the Bank, provide all documentation and other information that the Bank requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the Act.

(o)           The agreements in this Section 12 shall survive the termination of the Commitment and the repayment, satisfaction or discharge of all the other obligations and liabilities of the Borrower under Note.

  

20

  

 

IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed by its duly authorized officer as of the day and year first above written.

 

 

	
TIM Celular S.A.

	 
	 	 
	 	 
	 	 	 	 
	By:	
/s/ Bruno Mendes Fontes

	 
	 	Name: 	
Bruno Mendes Fontes

	 
	 	Title: 	
Finanças – Cash Management

	 
	 	Place and Date: 	 	 

 

 

	By:	

/s/ Rodrigo G. Galvão

	 
	 	Name: 	
    Rodrigo G. Galvão

	 
	 	Title: 	
TIM - Finanças & Tesouraria

	 
	 	Place and Date: 	 	 

 

WITNESSES:

 

 

	/s/ Bruno de Abreu e Lima Bordin 	 	 	 
	Name:	
Bruno de Abreu e Lima Bordin

	 	Name: 	 	 
	Id.: 	
Finanças & Tesouraria

	 	Id.:	 	 

 

 

  

21

  

 

EXHIBIT A

 

 

FORM OF BRAZILIAN PROMISSORY NOTE

 

NOTA PROMISSÓRIA

 

 

Valor: US$ 119.817.876,83 (cento e dezenove milhões, oitocentos e dezessete mil, oitocentos e setenta e seis Dólares Norte-Americanos e ointenta e três centavos)

 

 

Vencimento: à vista

 

 

Praça de Pagamento: São Paulo, Estado de São Paulo, Brasil

 

No dia do vencimento acima indicado, pagaremos por esta única via de NOTA PROMISSÓRIA, de forma irrevogável e incondicional, ao Bank of America, N.A. (“BANA”), ou à ordem, a quantia em Reais equivalente a US$ 119.817.876,83 (cento e dezenove milhões, oitocentos e dezessete mil, oitocentos e setenta e seis Dólares Norte-Americanos e oitenta e três centavos),apurada pela taxa média de venda de dólares dos Estados Unidos da América no mercado de câmbio, divulgada pelo Banco Central do Brasil, via SISBACEN, para transações PTAX Código 800, código de moeda 220, Opção 5, taxa essa referente ao dia útil imediatamente anterior ao do efetivo pagamento deste título, ou qualquer outra taxa de câmbio que venha, por medida do Banco Central do Brasil, a substituir a referida taxa de câmbio.

Esta nota promissória será regida e constituída de acordo com as leis da República Federativa do Brasil. O pagamento desta nota promissória deverá ser feito na Comarca da Cidade de São Paulo, Estado de São Paulo, Brasil Fica eleito o foro da Comarca da Cidade de São Paulo, Estado de São Paulo, Brasil.

 

 

	 	Lugar e Data:	 

 

TIM CELULAR S.A, EMITENTE:

CNPJ/MF: 04.206.050/0001-80

Endereço: Av. Giovanni Gronchi, 7143, São Paulo/SP, 05724-005

 

 

	 	 	 
	
Nome:

	 	
Nome:

	
Cargo:

	 	
Cargo:

A emitente expressamente concorda que a apresentação para pagamento à vista desta nota promissória poderá ser feita até 20 de setembro de 2017, de acordo com o estabelecido no Decreto n°. 57,663/66 e Código Civil.

 

 

22Exhibit 4.2

 

 

 

MASTER LOAN AGREEMENT Reference number TIMLALT is entered into as of June 20, 2013 (the “Effective Date”)

 

BETWEEN

 

	
(1)

	
CISCO SYSTEMS CAPITAL CORPORATION, a Nevada corporation, having its registered office at 170 West Tasman Drive, San Jose, CA 95134-1706, United States of America (“Lender”); and

 

	
(2)

	
TIM CELULAR S/A, a limited liability company organized and existing under the laws of the Federative Republic of Brazil, having its address and principal place of business at Avenida Giovanni Granchi, nE 7.143, in the city of São Paulo, State of São Paulo, Brazil, with commercial license number (Tax Payer Register) CNPJ 04.206.050/001-80 (“Borrower”)

 

Background

This Master Loan Agreement (this “Master”) sets out the framework under which the Lender Is prepared to make loans from time to time to the Borrower to finance IT-Solutions.

 

	
1.

	
Interpretation

Interpretation rules and definitions appear in Clause 14.

 

	
2.

	
Structure

If the Borrower wishes to borrow from the Lender the parties will discuss the potential terms and the Lender shall prepare the form of Facility Agreement for execution. The Facility Agreement will set out the commercial terms for the line of credit that the Lender is prepared to extend. The execution of this Master or any Facility Agreement does not oblige the lender to lend to the Borrower, neither obliges the Borrower to borrow from the Lender or pay any kind of commitment fee or break-funding cost. The Borrower shall request individual Loans under a Facility Agreement by submitting a Request for Borrowing.

 

	
3.

	
Facility and Loans

3.1.    Facility Limit and Purpose  Subject to the provisions of this Master, the aggregate principal amount available to the Borrower is the Facility Limit set out in the relevant Facility Agreement.  The Borrower shall use the proceeds of a Facility only to finance its purchase of IT-Solutions, excluding any value added or other applicable sales tax, from an Authorized Supplier.  The Lender is not bound to monitor or verify the application of any amount borrowed pursuant to a Facility Agreement.

 

3.2.    Third Party Mix  The amount of Third Party Products or Third Party Services, which may be financed under a Facility shall not in aggregate exceed the Third Party Limit for that Facility at any time.

 

3.3.    Conditions Precedent for Request for Borrowing  To obtain a Loan under a Facility the Borrower shall submit a Request for Borrowing.  A Request for Borrowing must be:

 

(a)    relate to an Order placed within the Availability Period.

 

(b)    duly completed and signed by the Borrower’s authorized signatories and received by the Lender not later than fourteenth (14) Business Days before the proposed Drawdown Date;

 

(c)    accompanied by (i) copies of the Invoices or list of Invoices and Authorised Supplier certificate referred to in the Section 5 of the Request for Borrowing, and (ii) for the financing of any Third Party Products or any Third Party Services, an excel spreadsheet in the form set out in Schedule D specifying the total amount of Third Party Product or Third Party Services to be financed and showing the ratio (by invoice value) of Third Party Products or Third Party Services to Cisco Products or Cisco Services. For avoidance of any doubt, Lender shall support and engage its best efforts to, together with Borrower, obtain all the relevant information set forth in the clause;

 

(d)    for an amount which is at least equal to the Minimum Drawdown Amount or the undrawn balance of the Facility;

 

(e)    the number of Loans would not exceed the Maximum Drawdown Number as a result of the requested Loan being made;

 

  

1

  

 

(f)    have a proposed Drawdown Date falling within the Funding Period; and

 

(g)    for an amount which if aggregated with all other Loans made or pending under that Facility would not cause the Facility Limit to be exceeded.

 

3.4.    Conditions Precedent for each Loan  The making of each Loan is subject to the following conditions precedent:

 

(a)    any Security Document relating to the Loan has been duly executed and is in full force and effect as at the date on which the Loan is to be made;

 

(b)    no Event of Default or Potential Event of Default has occurred or will occur as a result of the Loan being made;

 

(c)    all representations and warranties made by the Borrower or any Security Provider in or in connection with the Finance Documents shall be true and correct as at the Drawdown Date with reference to the facts and circumstances then subsisting;

 

(d)    the Borrower has paid all amounts when they become due and payable under any loan agreement signed between the Lender and the Borrower under this Master Agreement;

 

(e)    the Lender has received the Promissory Note in an amount equivalent to 100% (one hundred percent) of the Loan, in substantially the form set forth as Schedule E; and

 

(f)    the Lender has received the documents and evidence referred to in Schedule B (Documentary Conditions Precedent) and has found them to be satisfactory in form and substance.

 

3.5.    Promissory Notes  The Borrower shall deliver to the lender prior to the proposed Drawdown Date a Promissory Note In an amount equivalent to 100% (One Hundred per cent) of the relevant Loan, payable to the order of the Lender in the form set forth in Schedule E hereto with the blank spaces appropriately completed.  The Promissory Note shall be kept by the Lender until full completion of all obligations stated herein and therein.

 

3.6.    Application of each Loan  The entire principal amount of the Loan shall be paid by the Borrower to the Authorized Supplier indicated by the Borrower to the Lender.  Within 90 (Ninety) days after the lender has disbursed the Loan, the Borrower shall present evidence satisfactory to the Lender that the funds of the Loan have been property received by the Authorized Supplier referred to in Section 5 of the Bequest for Borrowing, in connection with the Equipment described in the Invoices attached to the Request for Borrowing.  Should the Borrower fail to present such evidence for any reason, the Borrower shall immediately prepay the portion of the unpaid amount together with accrued Interest thereon and a penalty fee in the amount of 1% of this unpaid amount.

 

3.7.    Cancellation  Any part of a Facility undrawn at the end of the Funding Period or at any time when the credit approval for the Borrower has been withdrawn, cancelled or has expired, shall be cancelled.

 

3.8.    Request for Borrowing Irrevocable.  A Request for Borrowing once given shall be Irrevocable and the Borrower shall be bound to draw the relevant Loan.

 

	
4.

	
Payment Terms

4.1.    Payment Dates  The Borrower shall repay each Loan to the Lender by successive installments, plus applicable Interest in the amounts and in the frequency, as set out in the relevant Request for Borrowing.  Time of payment of amounts due under each Loan shall be of the essence.

 

4.2.    Default Interest  The Borrower shall pay on demand Default Interest on any amount of a Loan, any Interest (to the extent permitted by applicable law) or any other amount payable under the Finance Documents which is not paid in full when due (whether on the relevant Payment Date, by acceleration or otherwise), before and after judgment and to the extent permitted by law.

 

4.3.    Application of Payments  If any amount received by the Lender in respect of sums due from the Borrower is less than the full amount due, the Lender shall apply the amount received in the following order of priority:  (i) expenses and fees owing to the Lender; (ii) Default Interest; (iii) Interest, (iv) principal; and (v) other sums.

 

4.4.    No Set-Off

 

(a)    except for the withholding tax on Interest which shall be deduct by the Borrower from the Interest payment, all payments made by the Borrower shall be unconditional, made in full and without set-off, counterclaim or, to the extent permitted by applicable law, other defense, including (without limitation) any deduction or set-off arising out of or in connection with the purchase of any goods, software licenses or services (including Services) from any Authorised Supplier, or any intellectual property right;

 

 

  

2

  

(b)    The Borrower acknowledges that

 

(i)    its rights and obligations under each Loan are separate from its rights and obligations under any Services Agreement or any purchase agreement for Products;

 

(ii)    even though the Lender has “Cisco” as part of its name, the Lender does not have any special qualifications or expertise to advise on the condition, suitability, performance, operation or fitness for any purpose of the IT-Solutions and that the Lender’s only role is as a provider of finance; and

 

(c)    a repayment under a Loan shall not be deemed to be a waiver of any right or claim that the Borrower may have against a manufacturer or any Authorised Supplier.

 

4.5.    Currency Indemnity  All payments under a Facility Agreement shall be made in United States Dollars.  If any sum due from the Borrower under or in connection with a Facility Agreement has to be converted from United States Dollars into another currency, the Borrower shall as an independent obligation, within three (3) Business Days of demand, indemnify the Lender against any cost, loss or liability arising out of or as a result of the conversion to ensure the Lender receives the United States Dollars amount owed to it.

 

4.6.    Payment Instructions  Payments to the Lender by the Borrower under a Finance Document to which it is a party shall be made to the following account of the Lender by wire transfer of immediately available funds and received by not later than 12:00 noon (New York Time) on the due date of the payment:

 

Bank Name:  Bank of America, NA

 

ABA Number:  

 

Account number:  

 

Account Name:  Cisco Systems Capital Corp. (LOAN)

 

Reference:  TIM CELULAR S/A

 

4.7.    Payments Due on Non-Business Days  Whenever any payment under a Facility Agreement shall be stated to be due, or whenever any Payment Date or any other date would occur, on a day other than a Business Day, then such payment shall be made, and such Payment Date or other date shall occur, on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of Interest.

 

4.8.    Voluntary Prepayment  The Borrower may prepay all or part of a Loan without any break funding costs provided that the Borrower shall have given to the Lender not less than thirty (30) days’ prior written notice specifying the amount to be prepaid and the date of prepayment.  Any prepayment shall reduce the amount of the remaining repayment installments in inverse order of maturity.  Amounts prepaid may not be reborrowed.

 

4.9.    Mandatory Prepayment  If any Loan relates to the financing of Services and the relevant Services Agreement is terminated prior to its stated maturity for any reason, the Borrower shall prepay such Loan, plus all accrued and unpaid Interest on such Loan, within seven (7) days’ following the date of termination of the relevant Services Agreement.  Any such prepayment shall reduce the amount of the remaining repayment installments in inverse order of maturity.  Amounts prepaid may not be reborrowed.

 

	
5.

	
Increased Costs

The Borrower shall, from time to time on demand by the Lender, pay to the Lender such amounts as the Lender may certify as being required to compensate the Lender for complying with any present or future law, regulation or requirement or request of any governmental authority which has the effect of increasing the cost to the Lender of providing or funding the Facility or reducing the Lender’s effective return in relations to the Facility.  In this case, the Lender shall notify the Borrower at least 60 (sixty) days before the cost increasing.

 

	
6.

	
Representations and Warranties

The Borrower acknowledges that the Lender has entered into this Master and enters into each Finance Document in reliance upon the following representations and warranties.  The Borrower represents and warrants to the Lender that

 

(a)    the Borrower is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, and has all requisite power and authority to own its assets and carry on its business and to execute, deliver and perform its obligations under each Finance Document to which it is a party;

 

(b)    all authorizations, approvals and consents (internal or external) required in connection with the entry into, performance, validity and enforceability of each Finance Document to which it is a party and the transactions contemplated by it have been obtained and are in full force and effect;

 

(c)    the execution, delivery and performance by the Borrower of each Finance Document to which it is a party do not and will not (i) contravene the terms of

 

  

3

  

its constitutional documents; or (ii) result in a breach of or constitute a default under any material lease, loan, instrument, contract or other agreement to which it is a party or by which it or its properties may be bound or affected; or (iii) violate any provision of any law, rule, regulation, order, judgment, decree or the like binding on or affecting it;

 

(d)    each Finance Document to which it is a party constitutes the legal, valid and binding obligations of the Borrower, enforceable against it in accordance with its terms;

 

(e)    no action, suit, proceeding or dispute against the Borrower is presently taking place or pending or, to its knowledge, threatened nor is there subsisting any judgment or award given against the Borrower which, in either case, might have a Material Adverse Effect;

 

(f)    the Borrower is not in default under any law, regulation, judgment, order, authorization, agreement or obligation applicable to it or any of its assets, the consequences of which default might have a Material Adverse Effect;

 

(g)    no Event of Default or Potential Event of Default has occurred and is continuing;

 

(h)    the obligations of the Borrower hereunder and under a Facility Agreement will constitute direct, general and unconditional obligations of the Borrower ranking at least pari passu in all respects with all of its other unsecured and unsubordinated obligations, with the exception of any indebtedness ranking senior solely by operation of law (and not by agreement);

 

(i)    except as may be disclosed on the Facility Agreement or in writing to the Lender in any Request for Borrowing, there is no tax, levy, impost, duty, fee, assessment or other governmental charge, or any deduction or withholding, imposed by any governmental agency or authority either (i) on or by virtue of the execution or delivery of any Finance Document or (ii) on any payment to be made by the Borrower pursuant to any Loan;

 

(j)    In any proceedings taken in the jurisdiction of its incorporation in relation to any of the Finance Documents, it will not be entitled to claim for itself or any of its assets immunity from suit, execution, attachment or other legal process;

 

(k)    its execution of any of the Finance Documents, constitutes, and its exercise of its rights and performance of its obligations under any of the Finance Documents, will constitute, private and commercial acts done and performed for private and commercial purposes;

 

(n)    all financial statements of the Borrower delivered to the Lender are complete and correct and fairly present the financial condition of the Borrower and its subsidiaries as at the times and for the periods covered by such statements, in each case in accordance with the Accounting Principles, consistently applied, subject, in the case of any unaudited financial statements, to normal year-end adjustments and any absence of notes.

 

The Borrower undertakes with the Lender that the representations and warranties set out in this Clause 6 will be true and accurate, and the Borrower shall be deemed to repeat such representations and warranties, on each date a Request for Borrowing is delivered, on each Drawdown Date and on each Payment Date, and so long as any sum is or may become payable under any Facility Agreement in each case with reference to the facts and circumstances subsisting from time to time.

 

	
7.

	
Undertakings

7.1.    Positive Undertakings  The Borrower undertakes to the Lender that throughout the Term and so long as any sum is or may become payable under any Facility Agreement the Borrower will

 

(a)    promptly inform the Lender of the occurrence of any Event of Default or Potential Event of Default;

 

(b)    maintain in full force and effect all such authorisations and consents as are referred to In Clause 6(b), and take immediate steps to obtain and thereafter maintain in full force and effect any additional authorisatlons which may become necessary or advisable, and comply with all conditions of each such authorisation;

 

(c)    ensure that its obligations under any Facility Agremeent at all times rank at least pari passu in all respects with all of its other unsecured and unsubordinated obligations, with the exception of any indebtedness ranking senior solely by operation of law (and not by agreement);

 

(d)    execute, acknowledge, deliver, file, translate, notarise, legalise and register at its own expense all such further agreements, instruments, certificates, documents and assurances and perform such acts as the law shall deem necessary or appropriate to give effect to the purposes of any Finance Document, and promptly provide the Lender with evidence of the foregoing satisfactory in form and substance to the Lender;

 

(e)    supply to the Lender, upon simple request of the Lender

 

  

4

  

 

(i)    as soon as they are available, but in any event within 180 days after the end of each financial year of the Borrower and any Security Provider, as applicable, copies of the relevant financial statements of the Borrower and any Security Provider in respect of such financial year audited and certified by a recognised firm of Independent auditors acceptable to the Lender;

 

(ii)    as soon as they are available, but in any event within 90 days after the end of each quarter of each financial year of the Borrower and any Security Provider, as applicable, copies of unaudited financial statements of the Borrower and any Security Provider, as applicable, prepared on a basis consistent with its audited financial statements, certified by a duly authorized financial officer of the Borrower or the relevant Security Provider, as applicable, to the effect that such financial statements show a true and fair view of the financial position of the Borrower or the relevant Security Provider, as applicable, as at the end of, and the results of its operations for, such financial quarter; and

 

(iii)    promptly on request, such other financial or other information relating to the Borrower or any Security Provider as the Lender may from time to time reasonably request;

 

7.2.    Negative Undertakings  The Borrower undertakes to the Lender that throughout the Term and so long as any sum is or may become payable under any Facility Agreement the Borrower will not

 

(a)    with the exception of any incorporation, merger, consolidation, division, transfer or reorganization occurring among companies within the Borrower’s economic group, the Borrower will not be Incorporated, or merge or transfer all or substantially all Its assets to another entity or as another entity if, by the time of such incorporation, merger, consolidation, division, transfer or reorganization, the resulting entity, survivor or transferee, after such action, (1) does not assume all the obligations stipulated in this Agreement and/or (2) has a materially weaker economic and financial condition than the Borrower, as appropriate and if applicable, prior to such merger, consolidation, division, transfer or reorganization. For purposes of item (2) of this section, “materially weaker economic and financial condition” means the resulting entity, survivor or transferee presents a ratio of the total net debt to EBITDA exceeding 4,0x (four times), based on its consolidated financial statements.

 

(b)    sell, transfer, lease or otherwise assign, deal with or dispose of all or any part of its business or assets (or agree to do any of the foregoing) whether by a single transaction or by a number of transactions whether related or not, except (i) for full commercial value and in the ordinary course of business, (ii) the replacement of obsolete or worn assets with assets of equal or greater value; (iii) within the Borrower’s economic group and (iv) other disposal for an aggregate consideration not exceeding 40% (forty per cent) of Borrower’s total assets (as stated in its most recent annual or quarterly financial statements disclosed).

 

(c)    materially change the nature or scope of its business; or

 

(l)    declare or pay any dividend above the minimum required by applicable law or make any other income distribution to its shareholders or repay any shareholders’ loans if an Event of Default or Prospective Event of Default has occurred and is continuing.

 

	
8.

	
Events of Default

8.1.    Defaults  Any of the following events shall constitute an “Event of Default”:

 

(a)    The Borrower falls to pay any sum payable under or pursuant to any Finance Document signed with the lender to which it is a party when due and not cured In 5 Business Days from the due date.

 

(b)    Any representation or warranty by the Borrower or any Security Provider under any Finance Document signed with the lender proves to have been incorrect in any material respect when made or deemed made.

 

(c)    The Borrower falls to comply with its obligations under Clause 7.1 (Positive Undertakings) or Clause 7.2 (Negative Undertakings).

 

(d)    The Borrower or any Security Provider falls to perform or comply with any of its non-financial obligations under any Finance Document (other than those which are the subject of Clauses 8.1(a) or (c)) and, in respect only of a failure which in the opinion of the Lender is not material and is capable of remedy, does not remedy such failure to the Lender’s satisfaction within twenty (20) days from the earlier of (i) the Borrower becoming aware of the relevant failure and (ii) receipt of written notice from the Lender.

 

(e)    Any Indebtedness of the Borrower which exceeds in aggregate US$ 150,000,000 (one hundred and fifty million United Stated Dollars) or its equivalent in other currencies becomes payable or capable of being declared payable before its originally stated maturity or is not paid within ten (10) days after the due date.

 

  

5

  

 

(f)    A creditor takes possession of all or any substantial part of the business or assets of the Borrower, or any execution, attachment or other legal process is enforced against all or any substantial part of the business or assets of the Borrower and is not discharged within fourteen (14) days.

 

(g)    Any step is taken towards the administration, winding-up, insolvency, bankruptcy, reorganisation or reconstruction of the Borrower or for the appointment of a liquidator, administrator, examiner, receiver, trustee or similar officer in respect of all or any substantial part of its business or assets.

 

(h)    The Borrower stops or suspends payments to its creditors or any class of its creditors, or is unable or under applicable law is deemed unable or admits its inability to pay its debts as they fall due, or seeks to enter into any composition or other arrangement with its creditors or any class of its creditors or commences any process for the relief of debtors, or is declared or becomes insolvent or bankrupt.

 

(i)    The Borrower ceases to carry on all or any substantial part of its business, or changes the nature or scope of its business to a material extent, or disposes of all or any substantial part of its business or assets, or proposes to do any of the foregoing which may constitute in a Material Adverse Effect.

 

(j)    Any law, regulation or order, or any change in any law or regulation, does or purports to vary, suspend, terminate or excuse performance by the Borrower or any Security Provider of any of its obligations under any Finance Document, or any Finance Document or any provision of any Finance Document ceases for any reason to be in full force and effect or becomes unenforceable, or the Borrower or any Security Provider disputes the validity or enforceability of or purports to terminate or repudiates any Finance Document, or it becomes unlawful or impossible for the Borrower or any Security Provider to perform any of its obligations under any Finance Document or for the Lender to exercise all or any of its rights, powers and remedies under any Finance Document.

 

8.2.    Consequences  If any Event of Default shall occur and be continuing, the Lender may, in its discretion

 

(a)    by notice to the Borrower, cancel the undrawn balance of all Facilities and declare the unpaid principal of all Loans, all Interest accrued and unpaid and all other amounts due under each Facility Agreement to be immediately due and payable, whereupon such amounts shall become immediately due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Borrower, provided that if an event described in Clauses 8.1(f), (g) or (h) above occurs, the result which would otherwise occur only upon giving of notice by the Lender to the Borrower as specified above shall occur automatically, without the giving of any such notice; and/or

 

(b)    instruct the relevant Authorised Supplier to withhold shipment (including partial shipments) of any order or to discontinue any Services, as applicable, or may, at its option, require the Borrower to pay cash in advance for further Services or shipments of Products.

 

	
9.

	
Fees, Costs and Expenses

The Borrower agrees to pay on demand all documented costs, fees and expenses of the Lender (including reasonable fees and disbursements of external legal counsel)

 

(a)    in connection with the preparation or any modification of any Finance Document and the negotiation, preparation and execution of any additional documentation required in connection with any Finance Document (including any requisite or desirable registrations, legalisations or filings), and any approval, consent or waiver to be made or given by the Lender pursuant to or in respect of any provision of any Finance Document, limited to a cap of US$ 10,000 (ten thousand United States Dollars) (“Cap”).  For any fees, cost and expenses above the Cap, approval must be given by the Borrower (each such consent not to be unreasonably withheld or delayed and, in the case of any delay of longer than 5 days by the Borrower in responding to any request for such consent, such consent shall be deemed given); and

 

(b)    in exercising any of its rights or powers under any Finance Document or in suing for or seeking to recover any sums due or otherwise preserving or enforcing its rights under any Finance Document or in defending any claims brought against it in respect of any Finance Document or in releasing any Security Document.

 

	
10.

	
Taxes

10.1.    Withholdings and deductions for Tax  Any and all payments by the Borrower under any Facility Agreement shall be made free and clear of and without deduction for any and all Taxes.  If the Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable under any Facility Agreement, (a) the sum payable shall be increased so that after making all required deductions (including deductions applicable to additional sums payable under this paragraph) the Lender will receive

 

  

6

  

an amount equal to the sum the Lender would have received had no such deductions been made, (b) the Borrower shall make such deductions, and (c) the Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law.  Within thirty (30) days of the Borrower’s payment of any Taxes, the Borrower shall furnish to the Lender the original or a certified copy of a receipt evidencing payment thereof.

 

10.1.1    Notwithstanding the above, the Borrower shall not be required to increase payments for the withholding tax on Interest if the Borrower presents after a simple request from the Lender an original or certified copy of a receipt evidencing payment thereof within thirty (30) days of payment of such withholding tax.

 

10.2.    Tax indemnity.  The Borrower shall indemnify the Lender within five (5) Business Days of demand for the full amount of Taxes (including, without limitation, any Taxes imposed by any jurisdiction on amounts payable under this paragraph) paid or payable by the Lender or any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally asserted.  Without prejudice to the survival of any other agreement contained in a Facility Agreement, the Borrower’s obligations contained in this Clause 10.2 shall survive the payment in full of the obligations giving rise to such Taxes and any termination or revocation of any Finance Document with respect thereto.

 

	
11.

	
Indemnity

The Borrower hereby agrees to indemnify the Lender within fifteen (15) Business Days of demand, from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs and expenses dully documented, including reasonable legal expenses, of whatsoever kind and nature, imposed on, incurred by or asserted against the Lender arising from or in connection with (other than solely by reason of default or gross negligence by the Lender):

 

(a)    the occurrence of any Event of Default, such costs and expenses shall include, without limitation, those incurred in connection with any workout or refinancing, or any bankruptcy, administration, insolvency, liquidation or similar proceedings;

 

(b)    acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorized

 

(c)    funding, or making arrangements to fund, or refinancing any Loan requested by the Borrower in a Request for Borrowing but not made by reason of the operation of any one or more of the provisions of the relevant Facility Agreement; or

 

(d)    a Loan (or part of a Loan) not being prepaid in accordance with the terms of the relevant Facility Agreement.

 

	
12.

	
Miscellaneous

12.1.    Products, Services and Licences  For the avoidance of doubt, this Master and each Facility Agreement does not constitute a licence for the use of software or other intellectual property.  The Lender makes no representations or warranties and accepts no liability whatsoever with respect to (a) any software or intellectual property of any third party (including patents, copyright or trademarks), (b) the validity or enforceability of any licence; or (c) the condition, suitability, performance, operation or fitness for any purpose of any IT-Solutions.

 

12.2.    Assignment  This Master and any Facility Agreement shall be binding on the Borrower and its successors and permitted assigns, and shall be binding upon and inure to the benefit of the Lender, and its successors and assigns.  The Borrower may not assign or transfer any of its rights or obligations under any of the Financial Documents.  The Lender shall be entitled to assign or transfer all or any of its rights and obligations under any Finance Document to any person just with the previous consent of the Borrower provided always that such assignment or transfer shall not be unreasonable withheld by the borrower and shall not materially affect the Borrower’s obligations. The Borrower shall enter into such documents as the Lender may reasonably stipulate in order to effect any such assignment or transfer.

 

12.3.    Confidentiality  The Borrower agrees that the Lender may disclose from time to time all Borrower information in its possession to the Lender’s legal counsel, agents and other professional advisors, and to its subsidiaries and affiliates, to any potential assignees or participants in the rights and/or obligations of the Lender under this Master or any Facility Agreement, to any underwriters or placement agents for any securities to be issued by the Lender or any of its subsidiaries or affiliates (or any transferee of any such subsidiaries or affiliates) and to any rating agency rating such securities and to their respective legal counsel, agents and other professional advisors, as well as too any third party in which the Lender has confidentiality undertaking. Furthermore, the Lender may disclose confidential information pursuant to a valid order issued by a court or government agency, provided that the Lender provides the Borrower prior written notice of such obligation.

 

  

7

  

 

12.4.    Amendments  Any amendment or waiver of any provision of any Finance Document and any waiver of any default under any Finance Document shall only be effective if made in writing and signed by or on behalf of the Lender and, in the case of an amendment, the Borrower.

 

12.5.    No Waiver, Approval  No single or partial exercise of any power under any Finance Document shall preclude any other or further exercise of such power or exercise of any other power.  No delay or omission on the part of the Lender in exercising any right under any Finance Document shall operate as a waiver of such right or any other right under such Finance Document.  Any consent or approval of the Lender required under or in connection with any Finance Document shall be in the sole and absolute discretion of the Lender and only be deemed obtained if provided by the Lender in writing.

 

12.6.    Entire Agreement  The Finance Documents constitute the entire obligations of the parties and supersede any previous expressions of intent or understandings in respect of the matters contemplated by them.

 

12.7.    Severability  If at any time any provision of any Finance Document is or becomes illegal, invalid or unenforceable in any respect under the law of any jurisdiction, the legality, validity and enforceability of such provision under the law of any other jurisdiction, and of the remaining provisions of such Finance Document, shall not be affected or impaired thereby.  Any illegal, invalid or unenforceable provision shall be replaced with a provision which comes as close as legally possible to the commercial intentions of the illegal, invalid or unenforceable provision.

 

12.8.    Notices  All notices, consents (if given) and other communications provided for under any Finance Document shall, unless otherwise stated in this Master, be in writing, and either (i) delivered by hand, or (ii) sent by courier service; or (iii) sent by mail, or (iv) sent by facsimile transmission, or (v) sent as an attachment to email.  All notices and other communications shall be mailed, sent or delivered to the addresses of the Lender and the Borrower set out below or at or to such other address, email address or facsimile number as shall be designated by any party by notice to the other party.  All such notices and formal communications shall be effective (i) if delivered by hand, when delivered; (ii) if sent by courier service, when delivered; (iii) if sent by mail, upon the earlier of the date of receipt or ten (10) Business Days after deposit in the mail, first class, postage prepaid; or (iv) if sent by facsimile transmission or email, when sent. Promptly upon any change of address, email address or fax number, each party shall notify the other party of such change.

 

Borrower’s details

 

	
Address for communications

	
:

	
Av das Americas 3434 – 

bloco 1 –

	  	  	
Barra da Tijuca

	  	  	
Rio de Janeiro – RJ – 

22640–102

	 	 	 
	
Telephone number

	
:

	
55 21 4009-3104

	 	 	 
	
Facsimile number

	
:

	
55 21 4109-3942

	 	 	 
	
For the attention of

	
:

	
Rodrigo Galvao

	 	 	 
	
Email address

	
:  

	rgalvao@timbrasil.com.br
	 	 	 
	
Lender’s details

	  	  
	 	 	 
	
Address for communications

	
:

	
9850 Double R. Blvd 1st Floor

	
 

	  	
Reno, NV 89521 

United States of America

	 	 	 
	
Telephone number

	
:

	
54 11 4341 0614

	 	 	 
	
Facsimile number

	
:

	
54 11 4341 0614

	 	 	 
	
For the attention of

	
:

	
Juan Beaudoin

	 	 	 
	
Email address

	
:

	
Jubeaudo@cisco.com

	 	 	 

12.9.    Calculations and Certificates  Any certification or determination by the Lender of a rate or amount under a Finance Document is, in the absence of manifest error, conclusive.  Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed in the relevant period (including the first day but excluding the last day) and a year of 360 days or, in any case where the practice in the relevant Interbank Market differs, in accordance with that market practice.  In any litigation or arbitration proceedings arising out of or in connection with any Finance Document, the entries made in the accounts maintained by the Lender are prima facie evidence of the matters to which they relate.

 

12.10.    Counterparts  This Master and any Facility Agreement may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of this Master or any Facility Agreement.

 

	
13.

	
Enforcement

13.1.    Governing Law and Jurisdiction  This Master, any Facility Agreement, any promissory note, any Request for Borrowing or any other document related to this Master shall be governed by the laws of the Federative Republic of Brazil. The Borrower submits to the non-exclusive jurisdiction of the City of São Paulo, State of São Paulo, Brazil courts.

 

  

8

  

 

13.2.    Remedies, Summary Proceedings  The Borrower hereby agrees that this Agreement and any Finance Document constitutes an extrajudicial execution instrument (“titulo executivo extrajudicial”) in accordance with the provisions of Article 585, II of the Brazilian Code of Civil Procedure, and that the Lender shall have the right, exercisable at its sole discretion, to institute legal proceedings against the Borrower for the collection of any amounts due under this Agreement through the summary proceedings (“execução”).

 

	
14.

	
Application, Interpretation and Definitions

14.1.    Loans  All the terms of this Master shall apply to each Facility as though set out in the relevant Facility Agreement.  Terms specific to a Facility Agreement shall be contained in that Facility Agreement and shall apply to each Facility made available under that Facility Agreement.  In the case of a conflict between the terms of this Master and a Facility Agreement, the terms of the Facility Agreement shall prevail.

 

14.2.    Interpretation  In this Master and in each Facility Agreement, unless the context requires otherwise,

 

(a)    the expressions “Borrower” and “Lender” shall, where the context permits, include their respective successors and permitted assigns and any persons deriving title under them; and

 

(b)    words importing the singular include the plural and vice versa; references to any Finance Document shall be construed as references to such document as the same may be amended or supplemented from time to time; references to Clauses and Schedules are to clauses of and schedules to this Master.  Clause headings are inserted for reference only and shall be ignored in construing any Finance Document.  References to years, months, quarters and the passage of time shall be construed in accordance with the Gregorian calendar.

 

14.3.    Definitions  In this Master and in each Facility Agreement, unless the context requires otherwise the following words shall have the following meanings:

 

“Authorised Supplier” means Cisco Systems Inc., Cisco Systems International B.V., Cisco International Limited or any affiliate of Cisco Systems Inc, or any reseller of Cisco Products or provider of Cisco Services authorized by Cisco Systems Inc and approved by the Lender.

 

“Availability Period” means the period commencing on the date of the relevant Facility Agreement and ending on the Availability Period End Date.

 

“Availability Period End Date” the earlier of (i) the date set out as such in the relevant Facility Agreement, and (ii) the date on which the Facility has been fully drawn, cancelled or terminated under the provisions of this Master and the relevant Facility Agreement.

 

“Bacen” means Banco Central do Brasil (the Central Bank of Brazil).

 

“Business Day” means a day (not being a Saturday, Sunday or public holiday) on which banks are open for general business in New York and[São Paulo and Rio de Janeiro.

 

“Cisco” means Cisco Systems Inc., Cisco Systems International B.V., Cisco International Limited or any affiliate of Cisco Systems Inc.

 

“Cisco Products” means networking and telecommunications equipment and other goods, spare parts, accessories, software and services (other than Services) manufactured, assembled, sold, licensed or provided by Cisco.

 

“Cisco Services” means services provided to the Borrower by Cisco pursuant to a Services Agreement.

 

“Default Interest” means default interest on any unpaid amount which shall accrue from the date such amount becomes due until the date such amount is paid in full at the Default Rate.

 

“Default Rate” means the lesser of (i) the rate set out as such in the relevant Facility Agreement or (ii) the highest lawful rate in the relevant jurisdiction.

 

“Drawdown Date” means, in respect of a Loan, the date on which that loan is made or to be made.

 

“Encumbrance” means any mortgage, charge, pledge, lien, encumbrance or any other arrangement having the effect of conferring security including any contractual right of set-off.

 

“Event of Default” has the meaning given to it in Clause 8.1 of this Master.

 

“EBITDA” means, for any period, consolidated income from operations before financial income (expenses) for such period (as reported on financial

 

  

9

  

statements of the Borrower in respect of such period) plus, without duplication and to the extent reflected as a charge in the calculation of such consolidated income from operations for such period, depreciation and amortization expense.

 

“Facility” means the loan facility described in the relevant Facility Agreement.

 

“Facility Agreement” means an agreement substantially in the form of Schedule A and executed by the Lender and the Borrower.

 

“Facility Limit” means the amount set out as such in the relevant Facility Agreement or such other amount approved by the Lender as the aggregate principal amount of the Facility available to the Borrower.

 

“Finance Document” means each of this Master, any Facility Agreement, any Request for Borrowing, any Security Document and any document which the Borrower and the Lender agree in writing shall be a Finance Document.

 

“Funding Period” means the period commencing on the date of the relevant Facility Agreement and ending on date falling 90 days after the Availability Period End Date.

 

“Guarantee” means, if applicable, a guarantee, surety document, indemnity and/or other security executed or to be executed by the Guarantor in favour of the Lender in relation to the obligations of the Borrower pursuant to any Finance Document, in such form as the lender may reasonably require.

 

“Guarantor” means, if applicable, the Guarantor set out in the relevant Facility Agreement.

 

“Indebtedness” means any obligation for the payment or repayment of money, whether present or future, actual or contingent, and whether incurred as principal or as surety or alone or jointly and/or severally with another.

 

“Interest” means, in respect of a loan, interest on the unpaid balance of principal, which shall accrue from the relevant Drawdown Date to the date of repayment of the principal in full, at (i) the lesser of the rate per annum set out in the relevant Facility Agreement or the rate otherwise agreed between the Borrower and the lender in writing, and (ii) the maximum rate allowable by law from time to time.

 

“Invoice” means an invoice approved by the Lender, which, unless agreed by the Lender otherwise in writing, must (i) be issued to the Borrower by an Authorised Supplier, in respect of IT-Solutions supplied to the Borrower by such Authorised Supplier; (ii) detail the relevant IT-Solutions by item, cost and serial numbers; (iii) be issued in US$ or in BRL; (iv) have an issue date which is not more than 180 (one hundred and eight) days prior to the date of the Request for Borrowing; and (v) be in English (or, if not in English, is accompanied by a certified English translation).

 

“IT-Solutions” means Products or Services, as applicable, subject of a Request for Borrowing and detailed in the Invoices submitted together with such Request for Borrowing.

 

“Loan” means the principal amount outstanding in respect of that Loan from time to time.

 

“Material Adverse Effect” means in relation to an Obligor, a material adverse effect on (i) the validity or enforceability of any Finance Document or the rights or remedies of the Lender under such Finance Document or (ii) if the Borrower presents a ratio of the total net debt to EBITDA exceeding 4,0x (four times), based on its consolidated audited financial statements.

 

“Maximum Drawdown Number” has the meaning given to it in the relevant Facility Agreement.

 

“Minimum Drawdown Amount” has the meaning given to it in the relevant Facility Agreement.

 

“Obligor” means the Borrower and each Security Provider, as applicable.

 

“Order” means an order for IT-Solutions approved by the Lender and placed by the Borrower with an Authorised Supplier.

 

“Payment Date” means, in respect of a Loan, each date on which an installment of principal, and/or interest, is to be paid pursuant to Clause 4.1 of this Master.

 

“Potential Event of Default” means any event or circumstance which, with the giving of notice, expiry of grace period or fulfilment of any other requirement, would be an Event of Default.

 

“Products” means Cisco Products and, if applicable, Third Party Products the subject of an Invoice, the acquisition of which has been or is to be financed under the Facility.

 

“Promissory Note” means any promissory note issued and executed by the Borrower in favor of the Lender and with aval of the Guarantor, if applicable, substantially in the form set forth as Schedule E.

 

  

10

  

 

“Request for Borrowing” means a request for borrowing under a Facility Agreement, submitted to the Lender by the Borrower substantially in the form set out in Schedule C.

 

“ROF” means the Registry of Financial Transactions of the Central Bank of Brazil.

 

“Security Document” means, in relation to the Facility, each Guarantee, if any, each Promissory Note and any other document to be executed at any time by any person as a guarantee or security for all or any part of the Borrower’s obligations under any Finance Document.

 

“Security Provider” means each Guarantor, if any, and any person other than the Borrower which has provided or subsequently provides a guarantee or other security for all or any part of the Borrower’s obligations under any Finance Document.

 

“Services Agreement” has the meaning given to it in the relevant Facility Agreement.

 

“Services” means Cisco Services and, if applicable, Third Party Services.

 

“Taxes” means all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto arising in connection with any Finance Document (including, but not limited to any present or future stamp or documentary taxes or charges or similar levies which arise from any payment made under any Finance Document or from the execution, delivery or registration of, or otherwise with respect to, any Finance Document), other than taxes imposed on the Lender’s net income, or franchise taxes imposed on the lender in lieu of income taxes, by the jurisdiction under the laws of which the Lender is organized or any political subdivision thereof.

 

“Term” has the meaning given to it in the relevant Facility Agreement and Request for Borrowing.

 

“Third Party Services” means non-competitive services provided to the Borrower by an Authorised Supplier pursuant to a Services Agreement.

 

“Third Party Products” means non-competitive third party networking and telecommunications equipment and other goods, spare parts, accessories and software (other than Services), ancillary to the Cisco Products.

 

“Third Party Limit” means the percentage set out in the relevant Facility Agreement expressing the ratio of Third Party Products and Third Party Services to all Products and Services by invoice value.

 

“United States Dollars”, “USD” and “US$” means the lawful currency of the United States of America.

 

	
15.

	
TIM standard clause

15.1.    Business Ethics.  The Lender shall (and shall cause all its personnel, subcontractors, consultants, agents or representatives to) comply with the United States Foreign Corrupt Practices Act (the “FCPA”), the TI’s code of ethics located at http://www.tim.com.br/rl, and any other anti-bribery or similar legislation in any jurisdiction where business or services will be conducted or performed pursuant to this Agreement.  The Lender shall not directly or indirectly pay, offer, promise or give anything of value (including any amounts paid or credited by The Borrower to the Lender) to any employee or official of a government, government controlled or owned enterprise or company, political party, candidate for political office, or to any other person while being aware of or having a belief that such money or item of value will be passed on to one of the above, to influence any act or decision by such person or by any government body for the purpose of obtaining, retaining or directing business to the Borrower.

 

 

 

  

11

  

SCHEDULE A

 

Form of Facility Agreement

 

FACILITY AGREEMENT Reference number [·] to Master Loan Agreement Reference No. TIMLALT (the “Master”), is entered into as of the date [Month] [Day), [Year] (the ‘‘Effective Date”)

 

BETWEEN

	
(1)

	
CISCO SYSTEMS CAPITAL CORPORATION, a Nevada corporation, having its registered office at 170 West Tasma Drive, San Jose, CA 95134-1706, United States of America (“Lender”); and

 

(2)           TIM CELULAR S/A a limited liability company organized and existing under the laws of the Federative Republic of Brazil, having its address and principal place of business at Avenida Giovanni Gronchi, nE 7.143, in the city of São Paulo, State of São Paulo, Brazil, with commercial license number (Tax Payer Register) CNPJ 04.206.050/0001-80 (“Borrower”).

 

OPERATIONAL

 

	
(A)

	
This agreement constitutes a facility agreement under the Master (the “Facility Agreement”).

 

	
(B)

	
The Lender agrees to grant to the Borrower the Facility described below to finance IT Solutions; and

 

	
(C)

	
Capitalised terms or expressions not defined herein have the same meanings set out in the Master.

 

FACILITY DETAILS

 

	
Availability Period End Date

	
:

	
[insert date]

	
Term

	
:

	
[insert Term]

	
Rate of Interest

	
:

	
[insert amount]

	
Default Rate:

	
:

	
[insert amount]

	
Facility Limit

	
:

	
[insert amount]

	
Third Party Limit

	
:

	
[insert amount] [Not applicable]

	
Minimum Drawdown Amount

	
:

	
[insert amount] [Not applicable]

	
Maximum Drawdown Number

	
:

	
[insert amount] [Not applicable]

	
Services Agreement

	
:

	
[insert name of agreement, name of parties to the agreement and date of the agreement; if agreement consists of, for instance, a master services agreement and a statement of work, refer to name of master agreement, name of parties to the master agreement and date of the master agreement together with details available to identify the statement of work] [Not applicable]

	
Legal name and address of Security Provider

	
:

	
[insert name and address] [Not applicable]

1.      Representations and Warranties

 

The Borrower acknowledges that the Lender has entered into this Facility Agreement in reliance upon the representations and warranties set out in Clause 6 of the Master and represents and warrants to the Lender on the date of this Facility Agreement as set out in Clause 6 of the Master.

 

In addition to the Clause 6 of the Master, the Borrower hereby confirms that the Bacen has approved the financial conditions of the Facility Agreement and attaches hereto a printout of the ROF approval of the Bacen.

 

2.      Additional Conditions Precedents

 

The Lender shall receive following documents and evidence, satisfactory to the lender in form and substance:

 

  

12

  

 

	
  

	
1.

	
a copy of the ROF

 

	
  

	
2.

	
[a copy of the executed Services Agreement and execution by the Borrower and the Authorised Supplier of an amendment to the relevant Services Agreement in the form of Appendix 2 hereto adding as an additional event of default (however described) that the relevant Authorised Supplier shall terminate the provision of services and/ or revoke any license to use software or other intellectual property under the Services Agreement upon notice from the Lender.]

 

3.      Condition Subsequent

 

Within thirty (30) days after the disbursement of a Loan hereunder, the Borrower shall present to the lender a printout of the Schedule of Payments related to the Loan issued by the Central Bank of Brazil, which must be in accordance with the terms and conditions agreed upon by the Parties.

 

THE PARTIES CONFIRM THAT THEY HAVE READ THIS FACILITY AGREEMENT AND THE MASTER AND AGREE TO BE BOUND BY THEM, EXECUTED BY THE PARTIES AND THE 2 (TWO) WITNESSES SIGNED HEREUNDER WITH ALL SIGNATURES DULY NOTARIZED ON THE DATE SET OUT BELOW

 

	
CISCO SYSTEMS CAPITAL CORPORATION

	  	
TIM CELULAR S/A

	 	 	 
	
(authorised signatory and company stamp)

	  	
(authorised signatory and company stamp)

 

	
Date:

	  	  	
Date:

	  
	
 

By:

	  	  	
By:

	
 

	
 

Name:

	  	  	
Name:

	
 

	
 

Title:

	  	  	
Title:

	
 

	  	  	  	  	  

 

 

	
Witnessed by:

	  	  	  
	
 

1.

	  	  	
2.

	  
	
 

Name:

	  	  	
Name:

	  
	
ID:

	  	  	
ID:

	  

 

  

13

  

Appendix 2 to Facility Agreement

 

Form of Amendment required in respect of Services financing

 

[to be typed on the letterhead of the services provider]

 

Re:           Facility Agreement Reference Number [          ] between Cisco Systems Capital Corporation (“Capital”) and [insert name] (“Borrower”) dated [insert date] with respect to the services agreement dated [insert date] (the “Services Agreement”) between the Borrower and [name of services provider] (“Services Provider”)

 

In consideration of the agreement of Capital to make a loan to the Borrower to satisfy the Borrower’s payment obligations under the Services Agreement (other than in respect of VAT), the Borrower and the Services Provider agree to hereby amend the Services Agreement by adding the following as an additional default, event of default or termination event (as applicable):

 

“In addition, any license rights, maintenance or other service Obligations provided by {Cisco System entity abbreviation} under this agreement shall immediately terminate upon written notice from { [Cisco Systems Capital Netherlands B.V] } (“Cisco Capital”) on the occurrence of an event of default (howsoever described) under the Facility Agreement between Cisco Capital and the Other party abbreviation pursuant to which Cisco Capital has financed amounts owing under this agreement.  Other party abbreviation acknowledges that on such termination it will immediately cease to use the services and/or software or other intellectual property and will deliver to {Cisco System entity abbreviation} all copies of any such software in electronic or other form, together with all documentation.”

 

Any terms not defined in this Amendment shall have the meaning stated in the Services Agreement. Except as modified by this Amendment, all terms and conditions of the Services Agreement shall remain in full force and effect.  In the event of a conflict between the terms and conditions of this Amendment and any terms and conditions of the Services Agreement, this Amendment will prevail with regard to the subject matter herein.

 

The parties have caused this Amendment to be duly executed.  Each party represents that its respective signatories whose signatures appear below have been and are on the date of signature duly authorized to execute this Amendment.

 

EXECUTED BY THE PARTIES and the 2 (two) witnesses signed hereunder with all signatures duly notarized on the date set out below.

 

	
CISCO SYSTEMS CAPITAL CORPORATION

	  	
TIM CELULAR S/A

	
(authorised signatory and company stamp)

	  	
(authorised signatory and company stamp)

 

	
 

By:

	  	  	
By:

	
 

	
 

Name:

	  	  	
Name:

	
 

	
 

Title:

	  	  	
Title:

	
 

	  	  	  	  	  

 

 

	
Witnessed by:

	  	  	  
	
 

1.

	  	  	
2.

	  
	
 

Name:

	  	  	
Name:

	  
	
ID:

	  	  	
ID:

	  

 

 

  

14

  

SCHEDULE B

 

Documentary Conditions Precedent

 

FACILITY AGREEMENT Reference Number [·] to Master Loan Agreement Reference No. TIMLALT

 

The following are the documents and evidence referred to in Clause 3.4(e).  Documents shall be supplied in such number of copies or counterparts as the Lender may require.  Copies required to be certified shall be certified in a manner satisfactory to the Lender by a director or other authorised officer of the Borrower or other party concerned.  The Lender shall receive the following documents and evidence, satisfactory to the Lender In form and substance:

 

Facility Agreement

 

1.           the Facility Agreement duly executed by all the parties and delivered to the Lender;

 

Constitutive Documents and Authorisations

 

2.           In relation to the Borrower, certified true copies of:

 

	
  

	
(a)

	
its constitutional documents;

 

	
  

	
(b)

	
a list of its directors/managers and officers;

 

	
  

	
(c)

	
its current commercial registration certificate and all other necessary authorisations for the operation of its business;

 

	
  

	
(d)

	
a copy of a resolution of its general assembly, its shareholders or its board of directors, as applicable:

 

	
  

	
(i)

	
approving the terms of, and the transactions contemplated by, this Master and any Security Document to which it is a party and resolving that it execute this Master and any Security Document to which it is a party;

 

	
  

	
(ii)

	
authorising a specified person or persons to execute this Master and any Security Document to which it is a party on its behalf; and

 

	
  

	
(iii)

	
authorising a specified person or persons, on its behalf, to sign and/or dispatch all documents and notices (including, if relevant, any drawdown notice and borrowing request) to be signed and/or dispatched by it under or in connection with this Master and any Security Document to which it is a party;

 

	
  

	
(e)

	
the specimen signature(s) of the person(s) referred to in (ii) and (iii) above;

 

	
  

	
(f)

	
a printout of the registration of the Facility Agreement in the ROF system of the Bacen, and such registration shall contain all documents and data normally requested by Bacen for registration of foreign currency loans, within five days of the registration;

 

	
  

	
(g)

	
copy of each and every valid and enforceable administrative contract celebrated with the government or any governmental entity that shall be relevant for the confirmation of the Borrower’s financial capacity (if applicable);

 

	
  

	
(h)

	
operating license and environmental license (if applicable)

 

3.           In relation to each Security Provider, certified true copies of:

 

	
  

	
(a)

	
its constitutional documents;

 

	
  

	
(b)

	
a list of its directors/managers and officers;

 

 

  

15

  

 

	
  

	
(c)

	
its current commercial registration certificate and all other necessary authorisations for the operation of its business;

 

	
  

	
(d)

	
a copy of a resolution of its general assembly, its shareholders or its board of directors, as applicable:

 

	
  

	
(i)

	
approving the terms of, and the transactions contemplated by, any Security Document to which it is a party and resolving that it execute any Security Document to which it is a party;

 

	
  

	
(ii)

	
authorising a specified person or persons to execute any Security Document to which it is a party on its behalf; and

 

	
  

	
(iii)

	
authorising a specified person or persons, on its behalf to sign and/or dispatch all documents and notices to be signed and/or dispatched by it under or in connection with any Security Document to which it is a party;

 

	
  

	
(e)

	
the specimen signature(s) of the person(s) referred to in (ii) and (iii) above;

 

Security Documents

 

4.           any Security Document duly executed by the relevant Security Provider and delivered to the Lender;

 

4.1.           a promissory note in an amount equivalent to 100% (One Hundred per cent) of the Loan, payable to the order of the Lender in the form set forth in Schedule E.

 

Miscellaneous

 

5.           any Additional Conditions Precedent set out in the Facility Agreement, if any; and

 

6.           a copy of any other authorisation or other document, opinion or assurance which the Lender considers to be necessary or desirable (if it has notified the Borrower accordingly) in connection with the entry into and performance of the transactions contemplated by the relevant Facility Agreement and any Security Document or for the validity and enforceability of the relevant Facility Agreement and any Security Document.

 

 

  

16

  

SCHEDULE C

 

Form of Request for Borrowing

 

Request for Borrowing Reference number [     ]

 

Cisco Systems Capital Corporation

9850 Double R Blvd.

Reno, NV 89521

Attn:           Loan Operations

Fax:           +1-775-789-5799

[Date]

 

Ladies and Gentlemen:

 

Request for Borrowing Reference number [     ] related to the USO [·] Facility Agreement Reference Number [     ]

 

We refer to the Facility Agreement Reference Number [     ] dated ___________1 between the Borrower and Cisco Systems Capital Corporation (the “Lender”).  Terms used In this Request for Borrowing have the same meaning as the Facility Agreement.

 

We hereby request a Loan upon the terms of the Master as follows:

 

	
1.

	
The Drawdown Date is ______________________________.

 

	
2.

	
The amount of the Loan is US$ ____________________________

 

	
3.

	
The applicable Interest rate is _________________________

 

	
4.

	
The Term of [each Loan shall be [·] ([·]) months commencing on the Drawdown Date of that Loan] or [the Facility shall be [·] ([·]) months commencing on the Drawdown Date of the first Loan].2

 

	
5.

	
This Loan shall be used by the Borrower to finance the costs which shall or have been incurred by the Borrower for payment made to the Authorized Supplier in respect of purchases of the Products on the Invoices listed Appendix A attached hereto.  The Borrower represents and warrants that (i) the enclosed Invoices shall or have been paid by the Borrower.  Evidence of such payment is also enclosed or shall have to be delivered by the Borrower to the Lender in accordance of the terms of Section 3.6 Application of each Loan of the Master Loan Agreement or (ii) the certificate signed by the relative Authorized Supplier, substantially in the form set forth as Appendix B, stating they have received payment for the invoices listed on Appendix A and all the information listed on Appendix A is correct.

 

	
6.

	
Details of the relevant Services Agreement:3

 

	
  

	
a.

	
Name of the Services Agreement: _______________________________.

 

	
  

	
b.

	
Name of the Parties: __________________________________________.

 

	
  

	
c.

	
Date of the Services Agreement/Statement of Work _____________.

 

 

1 Insert date

2 Insert agreed Term for Loan/Facility, as applicable, or delete if Term is set out in the Facility Agreement

3 Delete if no services are financed

 

  

17

  

 

	
7.

	
Payment Dates and Repayments [are as follows:] or [as described on Appendix B attached hereto.]

 

	
[Payment Date]

	
[Payment Amount]

(Principal and Interest)

	
[insert date]

	
[insert amount]

	
[insert date]

	
[insert amount]

	
[insert date]

	
[insert amount]

	
[insert date]

	
[insert amount]

 

The Borrower represents and warrants to the Lender on the date of this Request for Borrowing as set out in Clause 6 of the Master.  The Borrower further represents and warrants that the enclosed copies of the Invoices are true copies of the originals Invoices.

 

A spreadsheet specifying the total amount of those Invoices and showing the ratio (by invoice value) of Third Party Products or Third Party Services to all Products or Services is enclosed.4

 

Sincerely,

 

Authorised Signatory

 

TIM CELULAR S/A

 

 

Enclosures

Copies of Invoices or List of Invoices (Appendix A) and Certificate signed by the relative Authorized Supplier (Appendix B)

Copy of the evidence that the Invoices have been paid if already available.

Copy of Services Agreement and Amendment Agreement implementing Appendix 1 of the Facility Agreement5

Spreadsheet regarding Third Party Products or Third Party Services6

[Appendix B: Repayment Schedule]7

 

Accepted and agreed;

 

Cisco Systems capital Corporation

 

Date:

 

4 Delete if no Third Party Products or Third Party Services are financed

5 Delete if no Services are financed

6 Delete if no Third Party Products or Services are financed

7 Delete if not required

 

 

  

18

  

APPENDIX A TO THE REQUEST FOR BORROWING

 

List of Invoices

 

Form of Spreadsheet regarding Cisco and Third Party Products and/or Third Party Services

 

	
No.

	
Invoice #

	
Authorized Supplier

(Company Name)

	
Invoice Date

	
Invoice Amount

(R$)

	
Exchange Rate (USD/R$)

	
Invoice Amount

(USD)

	
Cisco Products and Cisco Services

	
Third Party Products and Third Party Services

	
1

	  	  	  	  	  	  	  	  
	
2

	  	  	  	  	  	  	  	  
	
3

	  	  	  	  	  	  	  	  
	
4

	  	  	  	  	  	  	  	  
	
5

	  	  	  	  	  	  	  	  
	
6

	  	  	  	  	  	  	  	  
	
7

	  	  	  	  	  	  	  	  
	
8

	  	  	  	  	  	  	  	  
	
9

	  	  	  	  	  	  	  	  
	
10

	  	  	  	  	  	  	  	  
	
11

	  	  	  	  	  	  	  	  
	
12

	  	  	  	  	  	  	  	  
	
13

	  	  	  	  	  	  	  	  
	
14

	  	  	  	  	  	  	  	  
	
15

	  	  	  	  	  	  	  	  
	
16

	  	  	  	  	  	  	  	  
	
17

	  	  	  	  	  	  	  	  
	
18

	  	  	  	  	  	  	  	  
	
19

	  	  	  	  	  	  	  	  
	
20

	  	  	  	  	  	  	  	  
	
21

	  	  	  	  	  	  	  	  
	
22

	  	  	  	  	  	  	  	  
	
23

	  	  	  	  	  	  	  	  
	
24

	  	  	  	  	  	  	  	  
	  	
Sum

	  	  	
–

	
0.00

	
0.00

	
0.00

	
0.00

	  	  	  	  	  	
0.00

	
0.00

	
0.00

	
0.00

	  	  	  	
Min. Cisco Products or Services

	
%

	
%

	
%

	  	  
	  	  	  	  	
Possible financing

	
0.00

	  	  	  
	  	  	  	  	
Possible Third Party Products or Services

	
0.00

	  	  	  
	  	  	  	  	
To add Third Party Products or Services

	
0.00

	  	  	  

 

  

19

  

 

APPENDIX B – Authorized Supplier Certificate

 

[DATE]

 

Cisco Systems Capital Corporation

9850 Double R Blvd., 1st Floor

Reno, NV 89521

United States of America

Attn: Loan Administration

 

RE: Payment of Invoices

 

To Whom It May Concern:

 

It is our understanding that Cisco Systems Capital Corporation has provided financing to TIM CELULAR S/A for the purchase of equipment on the invoices listed in Appendix A attached hereto.  We hereby confirm the following:

 

	
  

	
(i)

	
As of the date of this letter, [INSERT SUPPLIER NAME] has received 100% of the payments due and payable under all the invoices listed in Appendix A.

 

	
  

	
(ii)

	
All the information listed in Appendix A accurately reflects the information provided in the invoices listed on Appendix A.

 

Best regards,

 

	
[INSERT SUPPLIER NAME

 

	  
	
By:

	  	  
	
Name:

	  	  
	
Title:

	  	  

 

 

 

  

20

  

SCHEDULE E

 

Form of Promissory Note

 

PROMISSORY NOTE No. __

 

Value: US$___________________

 

(_______________ United States Dollars)

 

Issue Date: ___________________, 20[·][·]

 

FOR VALUE RECEIVED, the undersigned [·], a [limited liability company]/[corporation] organized and existing under the laws of the Federative Republic of Brazil, having its address and principal place of business at [·], in the city of [·], State of [·], Brazil, with commercial license number (Tax Payer Register) CNPJ/MF [·], HEREBY PROMISES TO PAY to the order of CISCO SYSTEMS CAPITAL CORPORATION, a Nevada corporation, having its registered office at 170 West Tasman Drive, San Jose, CA 95134-1706, United States of America (hereinafter referred to simply as the “Lender”), at the Lender’s first demand, upon presentation of this Promissory Note the principal sum of US$ [XXXXX] ([XXXXX] United States Dollars).

 

Payments hereunder shall be made in lawful money of the United States of America (in freely transferable United States dollars) to the Lender, at its account at [XXXXX], ABA no. [XXXXX], to account number [XXXXX] ref.“[XXXXX]”, on same day funds, free and clear of, and without deduction for, any and all present and future taxes, levies, imposts, charges and withholdings whatsoever imposed, assessed, levied, or collected by or for the account of the government or any country or any political subdivision or taxing authority thereof other than the taxes imposed on the income of the Lender by the United Stated of America, if any, or any political subdivision thereof.

 

The Borrower hereby waives presentment at maturity, demand and all notices whatsoever.  The non-exercise by the holder of any or its rights hereunder in any particular instance shall not constitute a waiver thereof in that or any subsequent Instance.

 

This Promissory Note is valid and may be presented up to ([·] years after its issue date).

 

	
[·]

	
Issuer (Emitente)

	
By: 

	 
	
Name: 

	 
	
Title:  

	 
	  	 
	
By:   

	 
	
Name: 

	 
	
Title: 

	 

 

 

  

21

  

SIGNATURE PAGE

 

THE PARTIES CONFIRM THAT THEY HAVE READ THIS MASTER LOAN AGREEMENT REFERENCE NUMBER TIMLALT AND AGREE TO BE BOUND BY IT.

 

EXECUTED BY THE PARTIES AND THE 2 (TWO) WITNESSES SIGNED HEREUNDER WITH ALL SIGNATURES DULY NOTARIZED ON THE DATE SET OUT BELOW

 

 

	
CISCO SYSTEMS CAPITAL CORPORATION

	  	
TIM CELULAR S/A

	
(authorised signatory and company stamp)

	  	
(authorised signatory and company stamp)

 

	
Date:

	  	  	
Date:

	  
	
 

By:

	  	  	
By:

	
/s/ Rodrigo G. Galvao

	
 

Name:

	  	  	
Name:

	
Rodrigo G. Galvao

	
 

Title:

	  	  	
Title:

	
TIM – Finanças & Testouraria

	  	  	  	  	  
	
By:

	  	  	
By:

	
/s/ Bruno Mandes Fontes

	
 

Name:

	  	  	
 

Name:

	
 

Bruno Mandes Fontes

	
 

Title:

	  	  	
 

Title:

	
 

Finanças -  Cash Management

	  	  	  	  	  
	
Witnessed by:

	  	  	  
	
 

1.

	  	  	
2.

	  
	
 

Name:

	  	  	
Name:

	  
	
 

ID:

	  	  	
ID:

	  

 

 

 

22

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00229-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00229-of-00352.parquet"}]]