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Exhibit 4.3.3.1(F)

 

TERM
SHEET FOR U.S. DOLLAR DENOMINATED UNSECURED LOAN FACILITY

This
Term Sheet reflects the main commercial terms and conditions incorporated in an
updated version of the judicial reorganization plan of the Oi Group (“Amended
RJ Plan”), which was originally filed with the 7th Business
Court of the Judicial District of the Capital of Rio de Janeiro, Brazil on
September 5th, 2016 (“Bankruptcy Court”), within the Oi
Group’s judicial reorganization proceeding pending before the Bankruptcy Court
under No 0203711-65.2016.8.19.0001.

 

PARTIES

	
  Borrower:

  	
  Oi S.A. – In judicial
  reorganization (“Oi”)”) or Telemar Norte Leste S.A. – In judicial
  reorganization (“Telemar”)

  
	
  Subsidiary Guarantors

  	
  Oi Móvel S.A. – Em Recuperação Judicial (“Oi Móvel”);
  Telemar Norte Leste S.A. – Em Recuperação Judicial (“Telemar”); Copart
  4 Participações S.A. – Em Recuperação Judicial (“Copart4”); Copart 5
  Participações S.A. – Em Recuperação Judicial (“Copart5”); Portugal
  Telecom International Finance BV – Em Recuperação Judicial (“PTIF”)
  and Oi Brasil Holdings Coöperatief U.A. – Em Recuperação Judicial (“Oi
  Coop”)

  
	
  Lenders:

  	
  [List of bondholders that will become lenders
  under the loan facility to be inserted]

  
	
  Administrative Agent:

  	
  [TBD] (together with the Lenders, the “Finance
  Parties” and each a “Finance Party”)

  
	
  Group:

  	
  The Borrower and all its Subsidiaries

  
	
  Restricted Subsidiaries:

  	
  All the direct and indirect subsidiaries of
  which the Borrower holds more than 50% of the equity or more than 50% of the
  voting power.

  

 

UNSECURED TERM
LOAN FACILITY

 

	
  Facility:

  	
  Single-tranche
  term loan facility

  
	
  Amount:

  	
  Principal
  amount of up to USD 500,000,000.00

  
	
  Final
  Maturity Date:

  	
  The
  15th day of the month falling on the 12th anniversary of the date
  of the facility agreement.

  
	
  Purpose:

  	
  The
  refinancing of certain outstanding amounts due under the Existing Bonds, in
  accordance with the approval and confirmation (homologação judicial)
  (the “Reorganization Plan Confirmation”) of the Borrower’s judicial
  reorganization plan (plano de recuperação judicial) (the “Reorganization
  Plan”) filed within the 7th Corporate Court of the Judicial District of
  the State Capital of Rio de Janeiro, Brazil (the “RJ”) on September
  27, 2017 to be approved in the creditors general meeting and confirmed by the
  RJ Court.

  
	
  Repayment:

  	
  6-year
  grace period for principal repayment, followed by repayment pro rata
  across all tranches in 12 semi-annual installments. The first amortization
  instalment is due on the 15th day of the month that is the 78th
  month following ratification of the Amended RJ Plan by the Bankruptcy Court
  and the remaining installments are due as follows:

  
	
    1st
    to the 12th semi-annual period

    	
    0%
    amortized per semi-annual period

    
	
    13th
    semi-annual period to 18th semi-annual period

    	
    4%
    amortized per semi-annual period

    
	
    19th
    semi-annual period to 23rd semi-annual period

    	
    12.66%
    amortized per semi-annual period

    
	
    24th
    semi-annual period

    	
    12,70%
    amortized per semi-annual period

    
	
   

  Provided
  that if any
  scheduled interest or principal payment date is not a business day, the
  payment will be made on the next succeeding business day. No interest will
  accrue as a result of this delay in payment.

  
	
  Voluntary
  Prepayment:

  	
  Loan
  may be prepaid in whole or in part on 30 days’ prior notice.  Any prepayment
  shall be made with accrued interest on the amount prepaid and without premium
  or penalty whatsoever.

  Any
  amount prepaid may not be redrawn and shall be applied against scheduled
  repayments in inverse chronological order.

  
	
  Guarantee:

  	
  Loan
  will be fully, jointly and severally guaranteed (the “Subsidiary Guarantee”),
  on a senior unsecured basis, by the Subsidiary Guarantors. Upon a
  Subsidiary Guarantor ceasing to be a member of the Group, it will be released
  at that time from its Subsidiary Guarantee.

  

 

	
   

  	
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PRICING

	
  Administrative
  Agent Fee:

  	
  As
  set out in an agency fee letter.

  
	
  Margin/Interest
  on Loans:

  	
  6%

  
	
  Interest
  Period for Loans:

  	
  6
  months or any other period agreed between the Borrower and the Lenders.

  
	
  Payment of Interest on Loans:

  	
  During
  the 6-year grace period interest shall accrue annually and be capitalized so
  as to form part of the principal outstanding at the end of each year.

  After
  the end of the 78th month following the ratification of the Amended RJ Plan
  by the Bankruptcy Court, interest shall accrue on the new principal
  outstanding amount and shall be paid on a semi-annual basis. Such cash-pay
  interest shall be payable on the 15th day of the month of each Interest
  Period.

  

 

 

	
   

  	
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OTHER TERMS

	

   Documentation:
	

   The Facility will be made available under a facility agreement (the “Agreement”) based on the current recommended form of single currency unsecured syndicated facility agreement of the LMA.  

	

   Prepayment and Cancellation:
	

   (a)   Illegality

   If, at any time, it is or will become unlawful for any Lender to make or obtain funding for any part of an advance or for any Finance Party to perform its obligations under the Agreement, the affected party shall, promptly after becoming aware of the same, deliver to the Borrower through the Administrative Agent a notice to that effect and its commitment shall be immediately cancelled and the Borrower shall repay all Loans of such Lender on the next repayment date.

   For the avoidance of doubt, the term “unlawful” shall include, without limitation, non-compliance with any rule or regulation imposed by a relevant governmental or regulatory authority in relation to applicable “know your customer” requirements, where such non-compliance is in respect of the Borrower or any permitted successor, transferee or assign thereof and is due to the Borrower’s failure to provide the documentation or other evidence required to satisfy such applicable “know your customer” requirements promptly following a request from the Administrative Agent under Clause [●] (“Know Your Customer” Checks)

   (b)   Increased Costs, Tax Gross Up and Tax Indemnity

   The Borrower may (at its discretion) give the Administrative Agent not less than 10 Business Days’ prior notice and cancel a Loan and prepay that relevant Lender that makes a claim under these provisions. 

   (c)   Excess Cashflow

   Within 150 days following the end of each financial year of Oi, commencing with the financial year ending on the 31 December following the date of the Agreement, the Borrower shall be required (i) to calculate the Cash Sweep Amount for such financial year based on Oi’s annual audited consolidated financial statements for such financial year and (ii) to use the Cash Sweep Amount to redeem a portion of the Loans and to redeem, repurchase or repay, as applicable, a portion of the Indebtedness of all of Oi’s other creditors  (together with the Loans, the “Reorganized Debt”) in accordance with Clause [●] of the Judicial Recovery Plan 

 

	

    
	

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   “Asset Sale” means any sale, conveyance, lease, transfer or other disposition (or series of related sales, leases, transfers or dispositions) by the Borrower or any Restricted Subsidiary, including any disposition by means of a merger, spin-off, consolidation or similar transaction (each referred to for the purposes of this definition as a “disposition”), of: 

(i)                  any shares of Capital Stock of the Borrower or any Restricted Subsidiary (other than directors’ qualifying shares or shares required by applicable law to be held by a Person other than the Borrower or a Restricted Subsidiary); 

(ii)                all or substantially all of the assets of any division or business operation of the Borrower or any Restricted Subsidiary; or 

(iii)              any other property or assets of the Borrower or any Restricted Subsidiary outside of the ordinary course of business of the Borrower or such member of the Group.

   Notwithstanding the foregoing, the following shall not be deemed to be Asset Sales:

(iv)              the disposal of any of the assets listed in Appendix 2;

(v)                a disposition by a member of the Group to the Borrower or by the Borrower to a member of the Group or between members of the Group;

 

	

    
	

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(vi)              the sale of property or equipment that, in the reasonable determination of the Borrower, has become worn out, obsolete, uneconomic or damaged or otherwise unsuitable for use in connection with the business of the Borrower or any member of the Group;

(vii)            the disposition of all or substantially all of the assets of the Borrower in a manner permitted pursuant to the Clause [●] (Merger);

(viii)          (i) dispositions of property to the extent that such property is exchanged for credit against the purchase price of similar replacement property that is promptly purchased, (ii) dispositions of property to the extent that the proceeds of such disposition are promptly applied to the purchase price of such replacement property (which replacement property is actually promptly purchased) and (iii) to the extent allowable under Section 1031 of the IRS Code, or any comparable or successor provision, any exchange of like property for use in a Permitted Business;

(ix)               an issuance of equity interests by a member of the Group to the Borrower or by the Borrower to a member of the Group;

(x)                 sales, leases, sub-leases or other dispositions of products, services, equipment, inventory, accounts receivable or other assets in the ordinary course of business;

(xi)               a Dividend Payment that does not violate the covenant described under Clause [?] (Restriction on Dividends);

 

	

    
	

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(xii)           a disposition to the Borrower or a member of the Group (other than a Receivables Subsidiary), including a Person that is or shall become a member of the Group immediately after the disposition;

(xiii)           sales of accounts receivable and related assets or an interest therein of the type specified in the definition of “Qualified Receivables Transaction” to a member of the Group;

(xiv)           dispositions in connection with a Lien permitted under the Clause 1.9 (Negative pledge);

(xv)             dispositions of receivables and related assets or interests in connection with the compromise, settlement or collection thereof in the ordinary course of business or in bankruptcy or similar proceedings and exclusive of factoring or similar arrangements;

(xvi)           foreclosures on assets, transfers of condemned property as a result of the exercise of eminent domain or similar policies (whether by deed in lieu of condemnation or otherwise) and transfers of properties that have been subject to a casualty to the respective insurer of such property as part of an insurance settlement;

(xvii)         any surrender or waiver of contractual rights or the settlement, release, surrender or waiver of contractual, tort, litigation or other claims of any kind;

(xviii)       the unwinding of any Hedging Obligations pursuant to its terms; 

 

	

    
	

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(xix)           the sale, transfer or other disposition of “non-core” assets acquired pursuant to an investment or acquisition permitted under the Agreement; provided that such assets are sold, transferred or otherwise disposed of within 6 months after the consummation of such acquisition or investment;

(xx)             any financing transaction with respect to property built or acquired by the Borrower or any member of the Group after the date of the Agreement, including sale and leaseback transactions and asset securitizations permitted by the Agreement;

(xxi)           sales, transfers and other dispositions of investments in joint ventures to the extent required by, or made pursuant to, customary buy/sell arrangements between the joint venture parties set forth in the joint venture agreements and similar binding arrangements;

(xxii)         sales or other dispositions of capacity or indefeasible rights of use in the Borrower’s or in any member of the Group’s telecommunications network in the ordinary course of business;

(xxiii)       a sale and leaseback transaction within one year of the acquisition of the relevant asset in the ordinary course of business;

(xxiv)       exchanges of telecommunications assets for other telecommunications assets where the fair market value of the telecommunications assets received is at least equal to the fair market value of the telecommunications assets disposed of or, if less, the difference is received in cash; 

 

	

    
	

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(xxv)         the licensing, sublicensing or grants of licenses to use the Borrower’s or any member of the Group’s trade secrets, know-how and other technology or intellectual property in the ordinary course of business to the extent that such license does not prohibit the licensor from using the patent, trade secret, know-how or technology any single transaction or series of related transactions that involves; 

(xxvi)       any transaction or series of related transactions made in accordance with the Reorganization Plan; or 

(xxvii)     any transaction or series of related transactions involving property or assets with a fair market value not in excess of 5% of the Consolidated Total Assets as of the end of the most recently completed full-year period for which the Oi’s published financial statements are available).

   “Cash Balance” shall have the meaning given to it in the Reorganization Plan.

   “Cash Sweep Amount” shall have the meaning given to it in the Reorganization Plan.

 “Minimum Cash Requirement,” shall have the meaning given to it in the Reorganization Plan.

   (d)   Voluntary Cancellation

   The Borrower may, by giving the Administrative Agent not less than 30 Business Days’ prior notice, cancel without any additional costs the whole or any part (and if in part being a minimum of USD 5,000,000 and in multiples of USD 500,000) of the Facility.

 

	

    
	

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   Representations:
	

   See Appendix 3 Part 1 (Representations & Warranties).

	

   Information Undertakings:
	

   See Appendix 3 Part 2 (Information Undertakings).

	

   General Undertakings:
	

   See Appendix 3 Part 3 (General Undertakings & Covenants).

	

   Events of Default:
	

   See Appendix 3 Part 4 (Events of Default).

	

   Majority Lenders:
	

   66 2/3% of Total Commitments.

	

   Assignments and Transfers by Lenders:
	

   Absent prior consent in writing from the Borrower, the Agreement, any claims thereunder and any legal, equitable or other economic interest therein shall not be transferred, assigned, contributed, conveyed, or otherwise alienated (in whole or in part), including but not limited to by way of sub-participation or discounting of such Agreement in a manner that would alter the ultimate beneficiary thereof, and no encumbrance or lien on, or other interest or right in, such Agreement may be granted or conveyed by any of the Lenders.

	

   Conditions Precedent:
	

   (a)   Creditors approval of the RJ Plan and confirmation by the RJ Court.

   (b)   Corporate authorizations customary for an Agreement of this nature.

	

   Miscellaneous Provisions:
	

   The Agreement will contain provisions relating to, among other things, default interest, market disruption, breakage costs, tax gross up and indemnities, increased costs, set-off and administration.

	

   Costs and Expenses:
	

   All reasonable and duly documented costs and expenses incurred by the Administrative Agent in connection with the preparation, negotiation, printing and execution of the Agreement and any other document referred to in it shall be paid by the Borrower following the date of the Agreement.

	

   Confidentiality:
	

   The Term Sheet and its content are intended for the exclusive use of the Lenders and shall not be disclosed by any Lender to any person other than the Lender's legal and financial advisors for the purposes of the proposed transaction unless the prior written consent of the Borrower is obtained.

 

	

    
	

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   Governing Law:
	

   English

	

   Governing Language:
	

   English

	

   Enforcement:
	

   English courts

	

   Definitions:
	

   Terms defined in the current recommended form of single currency unsecured syndicated facility agreement of the LMA have the same meaning in this Term Sheet unless given a different meaning in this Term Sheet

 

	

    
	

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Appendix 1       

Existing Bonds

1.             [TO COME]

 

 

 

	

    
	

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Appendix 2       

Permitted Assets

Direct or indirect disposal of the following assets: 

UNITEL S.A., an Angolan company with tax identification number 5410003144, registered before the Commercial Registry of Luanda under number 44/199, headquartered in Talatona, Sector 22, via C3, Edifício UNITEL, Luanda Sul, Angola.

BRASIL TELECOM CALL CENTER S.A., a corporation enrolled in the CNPJ/MF under No. 04.014.081/0001-30, registered before the Commercial Registry of the State of Goiás under NIRE 53 3 0000758-6, headquartered at Rodovia BR 153, Km 06, S/N, Bloco 03, Vila Redenção, in the City of Goiânia, State of Goiás, CEP74.845-090;

TIMOR TELECOM, S.A., corporation, collective entity No. 1014630, registered with the National Administration of Domestic Trade under No. 01847/MTCI/XI/2012, with its principal place of business at Rua Presidente Nicolau Lobato, Timor Plaza, 4o andar, in Dili, Timor Leste.

The formalization of the disposal of assets located at the addresses listed below is subject to prior verification regarding the lack of impediment or prohibition of an administrative or judicial nature:

BR 101 KM 205 (Barreiros/Almoxarifado), in the State of Santa Catarina and registered under enrollment No. 40564;

Av Madre Benvenuta, in the State of Santa Catarina and registered under enrollment No. 48391;

Rua Cel Genuino, in the State of Rio Grande do Sul and registered under enrollment Nos. 8.247, 24.697, 24.698, 24.699, 11.046, 11.047;

Av. Joaquim de Oliveira, in the State of Rio Grande do Sul and registered under enrollment No. 114.947;

Avenida Lauro Sodre no 3290, in the State of Rondônia and registered under enrollment No. 24743;

Rua Gabriel de Lara, in the State of Paraná and registered under enrollment No. 16059;

Rua Neo Alves Martins no 2263, in the State of Paraná and registered under enrollment No. 58948;

Travessa Teixeira de Freitas no 75 (Complexo Merces F), in the State of Paraná and registered under enrollment Nos. 36731, 36732, 36733, 36734, 36735, 36736, 36737, 36738, 36739, 36740 and 36741;

Avenida Teixeira de Freitas no 141 (Complexo Merces G), in the State of Paraná and registered under enrollment No. 15049;

Rua Visconde Nacar no 234 (Complexo Merces B), in the State of Paraná and registered under enrollment No. 26912;

Rua Visconde do Rio Branco no 397 (Complexo Merces A), in the State of Paraná and registered under enrollment No. 13940;

Avenida Goias, in the State of Goiás and registered under enrollment Nos. 42.041 and 42.042;

 

	

    
	

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Avenida Getulio Vargas S/N, in the State of Roraima and registered under enrollment Nos. 46.241, 46.242, 46.243 and 46.244;

Rua Sabino Vieira / Rua Chaves De Faria no 85/ R.S.L. Gonzaga no 275, in the State of Rio de Janeiro and registered under enrollment No. 55316;

Rua Dr. Miguel Vieira Ferreira (Rua Uranos 1139), in the State of Rio de Janeiro and registered under enrollment No. 51186;

Estr. Pau da Fome no 2716, in the State of Rio de Janeiro and registered under enrollment No. 105885;

Avenida Nossa Senhora de Copacabana n° 462 A, lj e, s/lj, in the State of Rio de Janeiro and registered under enrollment No. 67704;

Rua dos Limoeiros no 200, in the State of Rio de Janeiro and registered under enrollment No. 10409;

Camaragibe - Estrada de Aldeia - Km-125, in the State of Pernambuco and registered under enrollment No. 2503;

Rua do Principe no 156 e no 120, in the State of Pernambuco and registered under enrollment No. 24857;

Rua Itambe no 200, in the State of Minas Gerais and registered under enrollment No. 38227;

Rua Vitorio Nunes Da Motta no 220, Enseada do Suá in the State of Espírito Santo and registered under enrollment No. 52265;

Rua Silveira Martins, Cabula, no 355 in the State of Bahia and registered under enrollment No. 76908;

Rua Prof. Anfrisia Santiago no 212, in the State of Bahia and registered under enrollment No. 12798;

Avenida Getulio Vargas - BL. A, no 950, in the State of Amazonas and registered under enrollment No. 14610;

Rua Goias, S/N, Farol, in the State of Alagoas and registered under enrollment No. 75071.

Rua Zacarias da Silva, Lote 2 , Barra da Tijuca (Alvorada), in the City and State of Rio de Janeiro and registered under enrollment No. 381171;

Rua Senador Pompeu,119 - 5o andar, Centro, in the City and State of Rio de Janeiro and registered under enrollment No. 106766;

Rua Alexandre Mackenzie, no 75, Centro, in the City and State of Rio de Janeiro and registered under enrollment Nos. 274011, 274012, 274013, 274014, 274015, 274039, 274040, 274041, 274042;

Rua do Lavradio, no 71, Centro (Arcos), in the City and State of Rio de Janeiro and registered under enrollment No. 70149;

Rua Araribóia, no 140, São Francisco, in City of Niterói, State of Rio de Janeiro and registered under enrollment No. 10770;

Rua Assai, s/n, Jardim Pindorama, in City of São Félix do Araguaia, State of Mato Grosso and registered under enrollment No. 3825;

Rua Sena Madureira, 1070, in City of Fortaleza, State of Ceará and registered under enrollment No. 1409;

 

	

    
	

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Rua Manoel P. da Silva (Cap. Pereirinha, S/N), in City of Corumbá, State of Mato Grosso do Sul and registered under enrollment Nos. 24.969, 24.970, 24.971, 24.972 and 24.973;

Av Nicanor de Carvalho, no 10, in City of Corumbá, State of Mato Grosso do Sul and registered under enrollment No. 12295;

Pq. Triunfo de Cotegipe, S/N – João Dantas, in City of Alagoinhas, Estado da Bahia and registered under enrollment No. 775;

Estrada Velha do Amparo, KM 4, in City of Friburgo, State of Rio de Janeiro and registered under enrollment No. 5283;

Av. Prudente de Morais, no 757 B, Bairro Tirol, in City of Natal, State of Rio Grande do Norte and registered under enrollment No. 28639;

Av. Afonso Pena, no 583, in City of Manaus, State of Amazonas and registered under enrollment No. 7496;

Rua Leitão da Silva, no 2.159, Itararé (CONJED), in City of Vitória, State of Espírito Santos and registered under enrollment Nos. 46.977 and 46.978;

BLOCO C, QUADRA 02, SETOR COMERCIAL CENTRAL, Planaltina, in City of Brasília, Distrito Federal and registered under enrollment No. 801;

Rua Padre Pedro Pinto no1460, Venda Nova (ISFAP), in City of Belo Horizonte, State of Minas Gerais and registered under enrollment No. 4187;

Rua 2 De Setembro, no 733, Campo De Futebol, in City of Blumenau, State of Santa Catarina and registered under enrollment No. 598;

BR 116, KM 159 , Rua Cel Antônio Cordeiro, 3950, Altamira, in City of Russas, State of Ceará and registered under enrollment No. 180;

Rua Correa Vasques,69, Cidade Nova, in the City and State of Rio de Janeiro and registered under enrollment Nos. 40962, 40963, 40964, 40965, 40966, 40967, 40968, 40969, 40970, 40971, 40972, 41190; and

Rua Walter Ianni, Anel Rodoviário, KM 23,5 - Bairro Aarão Reis/São Gabriel (PUC MINAS), in City of Belo Horizonte, State of Minas Gerais and registered under enrollment No. 27601.

 

	

    
	

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Appendix 3

Part 1     
Representations & Warranties

Capitalized terms used below and not otherwise defined herein shall have the meanings ascribed to them in the current recommended form of single currency unsecured syndicated facility agreement of the LMA.

The Borrower will make each of the following representations on the date of the Agreement and of each Disbursement Date:

1.1          Status

(a)           It is a corporation, duly incorporated and validly existing under the law of its jurisdiction of incorporation.

(b)           It has the power to own its assets and carry on its business as it is being conducted.

(c)           It is not a FATCA FFI or a US Tax Obligor.

1.2          Binding obligations

The obligations expressed to be assumed by it under the Agreement are legal, valid and binding obligations of it, enforceable against it in accordance with the terms hereof, provided that such enforceability may be limited by insolvency laws or similar laws applicable to companies generally.

1.3          Power and authority

(a)           It has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, the Agreement and the transactions contemplated by the Agreement.

(b)           No limit on its powers will be exceeded as a result of the borrowing or giving of guarantees or indemnities contemplated by the Agreement.

1.4          Good title to assets

It has a good, valid and marketable title to, or valid leases or licences of, and all appropriate authorisations to use, the assets necessary to carry on its business as presently conducted.

1.5          Government Approvals

(a)           All consents, licences, approvals and authorisations of, or registrations, recordations or filings with any agency necessary for:

(i)            the execution and delivery of the Agreement by it,

(ii)           the performance of its obligations thereunder, and

(iii)         the observation by it of the terms and conditions thereof,

 

	

    
	

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have been duly effected, completed and/or obtained and are in full force and effect, including the electronic registration of the financial terms of the Agreement with the Central Bank of Brazil;

except for:

(A)               the registration of the schedules of payment within the Electronic Declaratory Registry – Module Registry of Financial Transactions (Registro Declaratório Eletrônico – Modulo Registro de Operações Financeiras) of the Data System of the Central Bank of Brazil – SISBACEN (the “ROF”) with the Central Bank of Brazil which will enable the Borrower to make remittances from Brazil in order to effect payment of scheduled principal and interest with respect to the Agreement and the fees, expenses, commissions and payments of any finance charge referred to in the Agreement that will not be paid on the date of the entrance of the funds into Brazil (the “Schedule of Payments”) (which the Borrower shall promptly effect after the entrance of the funds into Brazil),

(B)           the registration of any payment provided for in such ROF earlier than the due date thereof, and

(C)          any further special authorization from the Central Bank of Brazil, which will enable the Borrower to make remittances from Brazil to make payments contemplated in the Agreement not specifically covered by the ROF and the Schedule of Payments.

1.6          Execution of the Agreement

No provision, law, ordinance, decree, instruction or regulation of its country of incorporation, or any agency, department or instrumentality thereof, no provision of any charter, by-law or similar instrument of it and no provision of any mortgage, deed, contract, bond, undertaking or any agreement or other instrument binding on it or to which it or its assets are subject is or might be contravened by the execution, delivery, performance or observance of the terms and conditions of the Agreement which would be reasonably likely to have a material adverse effect.

1.7          Proper legal form

The Agreement is in proper legal form, and contains no provision which is contrary to Brazilian law, public policy, good morals, or the national sovereignty of, Brazil.

1.8          Non conflict with other obligations

The entry into and performance by it of, and the transactions contemplated by, the Agreement do not and will not conflict with:

(a)           any law or regulation applicable to it;

(b)           its constitutional documents; or

(c)           any agreement or instrument binding upon it or any of its assets.

1.9          Governing law and enforcement

 

	

    
	

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(a)           In any proceedings taken in its country of incorporation in relation to the Agreement, the choice of English law as the governing law hereof will be recognised and enforced in such country after compliance with such applicable procedural rules and other legal requirements in its country of incorporation to the extent that it does not contravene national sovereignty, good morals or public policy in Brazil.

(b)           Any arbitral award obtained in relation to the Agreement will be recognised and be enforceable by the courts of its jurisdiction of incorporation.

1.10        No immunity

In any proceedings taken in its country of incorporation or England, it will not be entitled to claim for itself or any of its asset immunity from set-off, suit, execution, attachment or other legal process except for the immunity provided under Brazilian law to property of the Borrower that is considered essential for the rendering of public services under any concession or authorization agreements or licenses (bens vinculados à concessão or bens reversíveis).

1.11        Admissibility in evidence

All acts, conditions and things required to be done to make the Agreement legal, valid, enforceable and admissible in evidence in its country of incorporation have been done, fulfilled and performed, provided that for the enforceability or admission in evidence of the Agreement before Brazilian courts:

(a)           the Agreement must be translated into Portuguese by a sworn translator; and

(b)           the following will apply:

(i)            the signatures of the parties signing the Agreement outside Brazil must be notarized by a notary public qualified as such under the laws of the place of signing and the signature of such notary public must be authenticated by a Brazilian consular officer at the competent Brazilian consulate in the timeframe set forth in the Agreement; and

(ii)           the Agreement must be registered with the Registry of Deeds and Documents (Registro de Títulos e Documentos) of the City of Rio de Janeiro, State of Rio de Janeiro, Federative Republic of Brazil.

1.12        Pari passu ranking

Its payment obligations under the Agreement will rank at least pari passu in right of payment with all other unsecured and unsubordinated obligations of it, save those claims which are preferred by any bankruptcy, insolvency, liquidation or other similar laws of general application and save to the extent any such other Indebtedness is effectively senior by reason of any Security permitted under Clause 1.4 (Negative pledge).

1.13        No filing of stamp taxes

Under the laws of the Borrower’s country of incorporation in force at the date thereof, it is not necessary that the Agreement be filed, recorded or enrolled with any court or other authority in such country or that any stamp, registration or similar tax be paid on or in relation to the Agreement other than payments in connection with (i) Brazilian agencies and the notarization 

and consularisation of the signatures of persons signing the Agreement outside Brazil, (ii) the registration of the Agreement before the Registry of Deeds and Documents (Registro de Títulos e Documentos) of the City of Rio de Janeiro, State of Rio de Janeiro, Federative Republic of Brazil and, and (iii) the registration of the financial terms and conditions in respect of the Facility with the Central Bank of Brazil under the ROF.

 

	

    
	

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1.14        Compliance with laws

It is conducting its business and operations in compliance with all relevant laws and regulations and all directives of any agency having the force of law applicable or relevant to it, the failure to be in compliance with which would be reasonably likely to have a material adverse effect.

1.15        Private and commercial acts

Its execution of the Agreement constitutes, and its exercise of its rights and performance of its obligations hereunder will constitute, private and commercial acts done and performed for private and commercial purposes.

1.16        No tax liabilities or disputes

Save as specifically disclosed to the Administrative Agent in writing, the Borrower has no unpaid tax liabilities which would be reasonably likely to have a material adverse effect save for those which it is contesting in good faith by appropriate proceedings and in respect of which adequate reserves have been established.

1.17        No misleading information

All written information supplied by the Borrower to any Lender in connection with the Agreement is true, complete and accurate in all material respects as at the date it was supplied and is not misleading in any material respect.  The Borrower makes no representation or warranty as to any expectations, projections or other forward-looking statements furnished to any Lender or the Administrative Agent or to the premises on which these expectations, projections or other forward-looking statements were based.  The Borrower undertakes no obligation to update any such information, unless required pursuant to the terms of the Agreement.

1.19        Environmental laws

(a)           It is in compliance with Clause 1.13 (Environmental compliance) and no circumstances have occurred which could be reasonably expected to have a material adverse effect in the future.

(b)           No Environmental Claim has been commenced or, to the best of its knowledge, is threatened against it where that claim has or is reasonably likely, if determined against it, to have a material adverse effect.

1.20        Taxation

(a)           It has filed or caused to be filed all Tax returns that are required to be filed by it and has paid or caused to be paid all Taxes shown to be due and payable by it on such returns or on any assessment received by it, except to the extent that any such Taxes are being diligently contested in good faith and by proper proceedings and as to which adequate 

reserves or provisions have been provided.  There is no action, suit, proceeding, investigation, audit, or claim now pending or, to the best knowledge of the Borrower, threatened by any authority regarding any Taxes relating to the Borrower, except to the extent that (i) any such Taxes, which could reasonably be expected to have a material adverse effect, are fully disclosed to the Lender in writing, (ii) any such Taxes are being diligently contested in good faith and by proper proceedings, (iii) adequate reserves or provisions have been provided for any such Taxes, and (iv) if adversely decided, any such Taxes could not reasonably be expected to have a material adverse effect.

 

	

    
	

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(b)           It is resident for Tax purposes only in Brazil.

1.21        Deduction of tax

[Other than in connection with [●], it]/[It] is not required to make any Tax Deduction (as defined in Clause [●] (Definitions)) from any payment it may make under any Finance Document, except for withholding tax as may be imposed on the remittance of payment of interest, fees, commissions and other expenses from Brazil under Brazilian law.

1.22        Application of FATCA

The Borrower shall ensure that the Borrower will not become a FATCA FFI or a US Tax Obligor.

1.23        Corrupt practices

The Borrower has not and none of its directors, officers, employees or agents has:

(a)           paid or received (or entered into any agreement under which it may be paid or receive) any unlawful commission, bribe, pay off or kickback, directly or indirectly, in connection with the Agreement; or

(b)           taken action to influence a procurement process or execution of an agreement, including engaging in collusive practices among bidders designed to establish bid prices at artificial, non-competitive levels,

or has otherwise engaged in Corrupt Practices.

1.24        No money laundering

The Borrower and all its branches and subsidiaries, in its home country and abroad, has the means and the internal procedures in place to detect and to intercept money-laundering channels or chains (involving the proceeds of terrorist activities, drug-trafficking, organized crime or others).

1.25        Foreign Assets Control Regulation

None of the execution, delivery and performance of the Agreement, nor its use of the proceeds thereunder, will violate the Trading with the Enemy Act, as amended, or any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto. 

 

	

    
	

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Part 2     
Information Undertakings

Capitalized terms used below and not otherwise defined herein shall have the meanings ascribed to them in the current recommended form of single currency unsecured syndicated facility agreement of the LMA.

	

   Annual Statements:
	

   The Borrower shall, no more than 30 days after such statements become publically available, but in any event within 150 days after the end of each of its financial years, deliver to the Administrative Agent in sufficient copies for the Finance Parties its financial statements (both consolidated and unconsolidated) for such financial year, prepared in accordance with Brazilian GAAP or IFRS and audited by recognized public auditors in Brazil.

	

   Quarterly Statements:
	

   The Borrower shall, no more than 30 days after such statements become publically available, but in any event within 60 days after the end of each of the Borrower’s first three financial quarters, deliver to the Administrative Agent in sufficient copies for the Finance Parties its unaudited financial statements (both consolidated and unconsolidated) for such financial quarter, prepared in accordance with Brazilian GAAP or IFRS.

	

   Requirements as to Financial Statements:
	

   The Borrower shall ensure that each set of financial statements delivered by it:

   (a)           unless otherwise stated, is prepared in accordance with IFRS and consistently applied, and for the annual statements includes the auditors’ report;

   (b)           discloses all the liabilities (contingent or otherwise) and all the unrealized or anticipated losses of the companies concerned, in accordance with IFRS; and

   (c)           is certified by an Authorized Signatory as giving a true and fair view of its financial condition as at the end of the period to which those financial statements relate and of the results of its operations during such period.

	

   Compliance Certificate:
	

   (a)           The Borrower must supply to the Administrative Agent a Compliance Certificate:

   (i)            with each of the audited annual financial statements delivered under the Agreement; and

   (ii)           with each of the quarterly financial statements relating to the first nine months of a financial year delivered under the Agreement.

   (b)           A Compliance Certificate must be signed by the Borrower’s treasurer (and/or one or two other Authorized Signatories acceptable to the Administrative Agent, as appropriate).

 

	

    
	

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   Other Financial Information:
	

   The Borrower shall from time to time on the reasonable request of the Administrative Agent furnish the Administrative Agent with such information about it and/or its business, management or financial condition as the Administrative Agent may reasonably require and which is materially relevant to the performance by the Borrower of any or all of its obligations under the Agreement, save to the extent such disclosure is not permitted by law.

	

   “Know Your Customer” Checks:
	

   In the event that a Finance Party is obliged to comply with “know your customer” or similar identification procedures the Borrower shall, in circumstances where the necessary information is not already publicly available, promptly upon the request of any Finance Party supply such documentation and other evidence as is reasonably requested.

	

   Information – Miscellaneous:
	

   (a)           If, at any time, the Borrower ceases to be a listed company, the Borrower shall, to the extent that it is not prevented from doing so by any applicable legal restrictions (including any judicial or administrative order, regulation or rule), supply to the Administrative Agent, promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against it, and which might, if adversely determined, have a material adverse effect.

   (b)           The Borrower shall promptly inform the Administrative Agent of the occurrence of any Default (and the steps, if any, being taken to remedy it).  The Borrower shall promptly inform the Administrative Agent when any such Default has been remedied, if applicable.  Upon receipt of a written request to that effect from the Administrative Agent, the Borrower shall confirm to the Administrative Agent that, save as previously notified to the Administrative Agent or as notified in such confirmation, no Default has occurred.

   (c)           The Borrower must promptly submit to any Finance Party on demand such information and documents as such Finance Party may reasonably request in order to comply with its obligations to prevent money laundering and to conduct on-going monitoring of the business relationship with the Borrower as it relates to the prevention of money laundering.

 

	

    
	

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   Notification of Default:
	

   The Borrower shall notify the Administrative Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence.

	

   Brazilian GAAP:
	

   As elected from time to time by the Borrower, the accounting principles prescribed by Brazilian Corporate Law, the rules and regulations issued by applicable regulators, including the Brazilian Securities Exchange Commission (Comissão de Valores Mobiliários), as well as the technical releases issued by the Brazilian Institute of Accountants (Instituto Brasileiro de Contadores), in accordance with IFRS as issued by the International Accounting Standards Board, in each case, as in effect from time to time.

    

 

	

    
	

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Part 3     

Restriction on dividends. 

Dividends shall be restricted in accordance with the terms of the Reorganization Plan.

 

 

 

 

	

    
	

   24exhibit_4333f.htm - Generated by SEC Publisher for SEC Filing

Exhibit 4.3.3.3(F)

 

DESCRIPTION OF THE NOTES

 

The
following is a description of certain provisions of the notes to be issued to
certain creditors of Oi S.A. (Oi S.A. or such of the other Obligors (as defined
below) to be mutually agreed, the “Issuer”) in connection with the
approval and confirmation (homologação judicial) (the “Reorganization Plan
Confirmation”) of the Issuer’s judicial reorganization plan (plano
de recuperação judicial) (the “Reorganization Plan”).

 

The
following information does not purport to be a complete description of the
notes and is subject and qualified in its entirety by reference to the
provisions of the notes and the Indenture (as defined below). The notes and the
Indenture, and not this description, control your rights as a noteholder.
Capitalized terms used in the following summary and not otherwise defined
herein shall have the meanings ascribed to them in the Indenture. 

 

General

 

Indenture

 

The
notes will be governed under the laws of the State of New York by an Indenture
(the “Indenture”), to be dated the date of initial issuance of
the notes (the “Issue Date”), between the Issuer, the other
Obligors and [TRUSTEE], as trustee, registrar, paying agent and transfer
agent. The Issuer will issue the notes under the Indenture.

 

Principal,
Maturity and Interest

 

The
notes will initially be issued in an aggregate principal amount set forth in
the Reorganization Plan and will mature on the seventh anniversary of the Issue
Date (the “Maturity Date”).  The principal amount of the notes
will be payable in full on the Maturity Date, unless repurchased or redeemed
earlier pursuant to the terms of the Indenture.

 

The
notes will be issued in fully registered form in denominations of US$130,000 and
integral multiples of US$1,000 in excess thereof.

 

At
the sole discretion of the Issuer, the notes will bear interest at:

 

(i)      For the first three
years:

 

a.       a fixed rate of
10.000% per annum payable in cash in a semi-annual basis (“Cash Interest”);
or

 

b.      a fixed rate of
12.000% per annum, of which 8.000% shall be Cash Interest and 4.000% shall be
by increasing the principal amount of the outstanding notes or by issuing
paid-in-kind notes (“PIK Interest” and such payment of PIK
Interest hereinafter referred as a “PIK Payment”).

 1

 

 

 

(ii)    For the fourth year
onwards a fixed rate of 10.000% per annum payable in cash in a semi-annual
basis.

 

Interest
on the notes shall accrue from the date of the Reorganization Plan Confirmation
until all required amounts due in respect thereof have been paid. Interest on the
notes will be paid in arrears on the First Interest Payment Date and every six
months thereafter (each such date, an “Interest Payment Date”). 
The first date on which interest on the notes shall be payable shall be the
fifth day of the month that is six months following the Issue Date (the “First
Interest Payment Date”).  Interest shall be paid on each Interest
Payment Date to the persons in whose name a note is registered at the close of
business, New York City time, on the date that is 15 days prior to the Interest
Payment Date (each, a “Record Date”). Interest on the notes will
be computed on the basis of a 360-day year of twelve 30-day months.

 

PIK Interest will be payable (x)
with respect to notes represented by one or more global notes registered in the
name of, or held by, DTC or its nominee on the relevant record date, by
increasing the principal amount of the outstanding global note by an amount
equal to the amount of PIK Interest for the applicable interest period (rounded
up to the nearest whole dollar) and (y) with respect to notes represented by
certificated notes, by issuing PIK notes in certificated form to the holders of
the  underlying notes in an aggregate principal amount equal to the amount of
PIK Interest for the applicable interest period (rounded up to the nearest
whole dollar), and the Trustee will authenticate and deliver such PIK notes in
certificated form for original issuance to the holders thereof on the relevant
record date, as shown by the records of the register of such holders. Following
an increase in the principal amount of the outstanding global notes as a result
of a PIK Payment, the global notes will bear interest on such increased
principal amount from and after the interest payment date in respect of which
such PIK Payment was made. Any PIK notes issued in certificated form will be
dated as of the applicable interest payment date and will bear interest from
and after such date. 

 

All notes issued pursuant to a
PIK Payment will mature on the same maturity date as the notes issued on the
Issue Date and will be governed by, and subject to the terms, provisions and
conditions of, the Indenture and shall have the same rights and benefits as the
notes issued on the Issue Date. Any certificated PIK notes will be issued with
the description “PIK” on the face of such PIK note.

 

Payments
of Principal and Interest

 

Payment
of the principal of the notes (other than the PIK Interest), together with
accrued and unpaid interest thereon, or payment upon redemption prior to
maturity, will be made only:

 

·       
following
the surrender of the notes at the office of the trustee or any other paying
agent; and

 

·       
to
the person in whose name the note is registered as of the close of business,
New York City time, on the Business Day prior to the due date for such payment.

 

 2

 

 

Payments of interest on a note (other than the PIK
Interest), other than the last payment of principal and interest or payment in
connection with a redemption of the notes prior to maturity, will be made on
each payment date to the person in whose name the note is registered at the
close of business, New York City time, on the relevant Record Date.

 

PIK
Interest will be paid by increasing the principal amount of the outstanding
global notes or by issuing PIK notes as set forth above under “—Principal,
Maturity and Interest.”

 

The
notes will initially be represented by two or more global notes. The principal
of and interest on the notes will be payable in U.S. dollars, or in such other
coin or currency of the United States of America as is legal tender for the
payment of public and private debts at the time of payment. Payments of
principal, premium, if any, and interest, and additional amounts, if any, in
respect of each note will be made, in the case of global notes, by a paying
agent by wire transfer of immediately available funds, or, in the case of
certificated non-global notes, by a paying agent by check and mailed to the
person entitled thereto at its registered address. If the notes are in
certificated form, upon written request from a holder of at least US$1.0
million in aggregate principal amount of notes to the specified office of any paying
agent, payment may be made by wire transfer to the account specified by such
holder. The Issuer will make payments of principal and premium, if any, upon
surrender of the relevant notes at the specified office of the trustee or any
of the paying agents.

 

If
any scheduled interest or principal payment date or any date for early
redemption of the notes is not a Business Day, the payment will be made on the
next succeeding Business Day. No interest on the notes will accrue as a result
of this delay in payment.

 

Subject
to applicable law, the trustee and the paying agents will pay to the Issuer
upon written request any monies held by them for the payment of principal or
interest that remains unclaimed for two years. Thereafter, noteholders entitled
to these monies must seek payment from the Issuer.

 

Joint
and Several Obligations

 

The
Issuer and any
other member of the Group that is subject to the Reorganization Plan
(collectively, the “Obligors”) will be fully, jointly and
severally liable for the full and punctual payment of principal, premium, if
any, interest, including any additional amounts, and any other amounts that may
become due and payable by us in respect of the Indenture and the notes. 

 

Redemption
and Repurchase

 

The
notes will not be redeemable prior to maturity.

 

 

Purchases
of Notes by the Issuer or any of its Subsidiaries or Affiliates

 

The
Issuer or any of its subsidiaries or affiliates may at any time purchase any
notes in the open market or otherwise at any price; provided that, in determining
whether noteholders holding any requisite principal
amount of notes have given any request, demand, authorization, direction,
notice, consent or waiver under the Indenture, notes owned by the Issuer or any
of its subsidiaries or affiliates shall be deemed not outstanding for purposes
thereof. All notes purchased by the Issuer or any of its subsidiaries or
affiliates may, at the option of the Issuer, continue to be outstanding or be
cancelled.

 3

 

 

 

Cancellation

 

Any
notes repurchased by the Issuer or any of its subsidiaries or affiliates may,
at the option of the Issuer, continue to be outstanding or be cancelled but may
not be reissued or resold to a non-affiliate of the Issuer.

 

Certain
Covenants

 

The Indenture will
contain restrictive covenants customary for an offering of high yield debt
securities to be mutually agreed, which covenants will (i) include without
limitation incurrence-based limitations on the incurrence of debt, the granting
of liens, the making of restricted payments (which shall be defined to be
dividends and/or distributions in respect of equity interests, repurchases or
redemptions of equity interests and repurchases, redemptions or other
acquisitions for value of contractually subordinated debt), the sale of assets,
maintenance of listing, the merger, consolidation or sale of substantially all
assets, the entry into transactions with affiliates and the incurrence of
dividend or other payment restrictions affecting certain subsidiaries and (ii)
will not include any financial maintenance covenants.  Such covenants
shall (a) be negotiated in good faith, (b) not conflict with, or violate the
provisions of, the Reorganization Plan, and (c) contain certain baskets,
thresholds and exceptions that are to be mutually agreed in light of the
operating results, including revenues and total assets, of the Group, and after
taking into account the operational and strategic requirements of the Group in
light of its size, industry, geographic locations, businesses, business practices
and operations and corresponding baskets, thresholds and exceptions contained
in the instruments executed with Class 3 creditors in connection with the
Reorganization Plan..

 

Payment
of Additional Amounts

 

Any
and all payments of principal, premium, if any, and interest in respect of the
notes shall be made without withholding or deduction for any taxes, duties,
assessments or governmental charges of whatsoever nature imposed, levied,
collected, withheld or assessed by Brazil, Japan or any other jurisdiction or
political subdivision thereof in which the Issuer is organized or is a resident
for tax purposes having power to tax or by the jurisdictions in which any
paying agents appointed by the Issuer are organized or the location where
payment is made, or any political subdivision or any authority thereof or
therein having power to tax (a “Relevant Jurisdiction”), unless such
withholding or deduction is required by law. In the event that any such
withholding or deduction is required, the Issuer shall pay such additional
amounts as additional interest, or additional amounts, as will result in the
receipt by the noteholders of such amounts as would have been received by them
if no such withholding or deduction had been required, except that no such
additional amounts shall be payable in respect of any note:

 4

 

 

 

(a)   
to
the extent that such taxes in respect of such note would not have been imposed
but for the existence of any current or former connection of the noteholder or
the beneficial owner of such note with the Relevant Jurisdiction other than the
mere holding of such note or the receipt of payments thereon or enforcement of
rights thereunder;

 

(b)  
in
respect of any estate, inheritance, gift, sales, transfer or personal property
taxes imposed with respect to such notes, except as otherwise provided in the
Indenture;

 

(c)   
to
the extent that such holder or the beneficial owner of such note would not be
liable or subject to such withholding or deduction of taxes but for the failure
to make a valid declaration of non-residence or other similar claim for
exemption if:

 

(i)      the making of such
declaration or claim is required or imposed by statute, treaty, regulation,
ruling or administrative practice of the relevant taxing authority as a
precondition to an exemption from, or reduction in, the relevant taxes; and

 

(ii)    at least 60 days prior
to the first payment date with respect to which the Issuer shall apply this
clause (c), the Issuer has notified the holders of notes in writing that they
shall be required to provide such declaration or claim;

 

(d)  
where
(in the case of a payment of principal, premium, if any, or interest on
redemption) the relevant note is surrendered for payment more than 30 days
after the Relevant Date except to the extent that the relevant holder would
have been entitled to such additional amounts if it had surrendered the
relevant note on the last day of such period of 30 days;

 

(e)   
any
tax, assessment or other governmental charge which would have been avoided by
such holder presenting the relevant note (if presentation is required) or
requesting that such payment be made to another paying agent in a member state
of the European Union;

 

(f)    
any
tax, assessment or other governmental charge which is payable other than by
deduction or withholding from payments of principal of, premium, if any, or
interest on a note;

 

(g)   
 with
respect to any withholding or deduction imposed on or in respect of any note
pursuant to Sections 1471-1474 of the United States Internal Revenue Code of
1986, as amended (the “Code”) (and any current and future regulations or
official interpretations thereof or any fiscal or regulatory legislation, rules
or practices adopted pursuant to any intergovernmental agreement entered into
in connection with the implementation of such Sections of the Code) (“FATCA”),
the laws of Brazil, Japan or any other jurisdiction implementing FATCA, or any
agreement between the Issuer and the United States or any authority thereof
entered into for FATCA purposes; or

 

(h)   
any
combination of the above.

 

 5

 

 

Any reference to principal, premium, if any, or
interest shall be deemed to include any additional amounts in respect of
principal premium, if any, or interest (as the case may be) which may be
payable under this section or under “—General—Payments of Principal and
Interest” above.

 

Substitution
of the Issuer

 

(a)               
Notwithstanding
any other provision contained in the Indenture, the Issuer may, without the
consent of the holders of the notes, be replaced and substituted by any Wholly
Owned Subsidiary of the Issuer as principal debtor (in such capacity, the “Substituted
Debtor”) in respect of the notes; provided that:

 

(i)                             
such
documents will be executed by the Substituted Debtor, the Issuer and the
trustee as may be necessary to give full effect to the substitution, including
a supplemental indenture whereby the Substituted Debtor assumes all of the
Issuer’s obligations under the Indenture and the notes (together, the “Issuer
Substitution Documents”) and pursuant to which the Issuer will
unconditionally and irrevocably guarantee (the “Guarantee”) the payment of all
sums payable under the Indenture and the notes by the Substituted Debtor as
such principal debtor and the covenants and events of default will continue to
apply to the Issuer in respect of the notes as if no such substitution had
occurred;

 

(ii)              if
the Substituted Debtor is organized in a jurisdiction other than Brazil, the
Issuer Substitution Documents will contain a provision (1) to ensure that each
noteholder has the benefit of a covenant in terms corresponding to the
obligations of the Issuer in respect of the payment of additional amounts (but
replacing references to Brazil with references to such other jurisdiction); and
(2) to indemnify and hold harmless each noteholder and beneficial owner of the
notes against all taxes or duties imposed by the jurisdiction in which the
substituted Debtor is organized and which arise by reason of a law or
regulation in effect or contemplated on the effective date of the substitution,
which may be incurred or levied against such holder or beneficial owner of the
notes as a result of the substitution and which would not have been so incurred
or levied had the substitution not been made, in each case, subject to similar
exceptions set forth under clauses (a) through (h) under “—Payment of
Additional Amounts” above,” mutatis mutandis;

 

(iii)                          
the
Issuer Substitution Documents will contain a provision that the Substituted
Debtor and the Issuer will indemnify and hold harmless each noteholder and
beneficial owner of the notes against all taxes or duties which are imposed on
such holder or beneficial owner of the notes by any political subdivision or
taxing authority of any country in which such holder or beneficial owner of the
notes resides or is subject to any such tax or duty and which would not have
been so imposed had the substitution not been made, taking into account any
present or future tax savings or tax benefit reasonably expected to be realized by such holder or such beneficial owner of the notes and subject to similar exceptions set forth under clauses (b) through (h) under “—Payment of Additional Amounts” above, mutatis mutandis; provided, that any holder or beneficial owner of such note making a claim with respect to such tax indemnity shall provide the Issuer with notice of such claim, along with supporting documentation, within four weeks of the announcement of the substitution of the Issuer as issuer;

 6

 

 

  

 

(iv)                          the Issuer will deliver, or cause the delivery, to the trustee of opinions from one or more internationally recognized counsel in the jurisdiction of organization of the Substituted Debtor, Brazil and New York as to the validity, legally binding effect and enforceability of the Issuer Substitution Documents and specified other legal matters, as well as an officer’s certificate as to compliance with the provisions described under this section;

 

(v)                            the Substituted Debtor shall have appointed a process agent in the Borough of Manhattan, The City of New York to receive service of process on its behalf in relation to any legal action or proceedings arising out of or in connection with the notes or the Issuer Substitution Documents;

 

(vi)                          no event of default will have occurred and be continuing;

 

(vii)                         a credit rating will continue to be assigned to the notes when the Substituted Debtor replaces and substitutes the Issuer in respect of the notes; 

 

(viii)                       the substitution will comply with all applicable requirements under the laws of the jurisdiction of organization of the Substituted Debtor, New York and Brazil; and 

 

(ix)                          the substitution will be concurrently consummated with respect to the other instruments issued under the Reorganization Plan.

 

(b)               Upon the execution of the Issuer Substitution Documents as referred to in clause (a)(i) above, the Substituted Debtor shall be deemed to be named in the notes as the principal debtor in place of the Issuer (or of any previous substitute under these provisions) and the notes shall thereupon be deemed to be amended to give effect to the substitution. Except as set forth above, the execution of the Issuer Substitution Documents shall operate to release the Issuer (or such previous substitute as aforesaid) from all of its obligations, other than its Guarantee, in respect of the notes and its obligation to indemnify the trustee under the Indenture.

 

7

 

 

  

(c)                The Substituted Debtor and the Issuer shall acknowledge in the Issuer Substitution Documents the right of every noteholder to the production of the Issuer Substitution Documents for the enforcement of any of the notes or the Issuer Substitution Documents.

 

(d)               The covenants set forth in the Indenture will continue to apply to the notes following the substitution of the Issuer.

 

(e)                Not later than 10 Business Days after the execution of the Issuer Substitution Documents, the Substituted Debtor will give notice thereof to the noteholders in accordance with the provisions described in this section.

 

Events of Default

 

The following events will each be an “Event of Default” under the terms of the Indenture:

 

(a)                The Issuer defaults in the payment of the principal or any related additional amounts, if any, of any note when the same becomes due and payable at maturity, upon acceleration or redemption, or otherwise;

 

(b)               The Issuer defaults in the payment of interest or any related additional amounts, if any, on any note when the same becomes due and payable, and the default continues for a period of 30 calendar days;

 

(c)                The Issuer, any of the other Obligors or certain other subsidiaries to be mutually agreed shall fail to perform, observe or comply with any covenant or agreement contained in the notes or Indenture and such failure (other than any failure to make any payment contemplated in clause (a) or (b) hereof) continues for a period of 60 calendar days after written notice to the Issuer by the trustee acting at the written direction of holders of 25% or more in aggregate principal amount of the notes, or to the Issuer and the trustee by the holders of 25% or more in aggregate principal amount of the notes;

 

(d)               (i) The acceleration of any Indebtedness of the Issuer, any of the other Obligors or certain other subsidiaries to be mutually agreed by reason of default, unless such acceleration is at the option of the Issuer, the other Obligors or any such subsidiary, as the case may be, or at the option of the holder of any such Indebtedness pursuant to any option to require the repurchase of such Indebtedness or (ii) the Issuer, any of the other Obligors or the relevant subsidiaries fails to pay any amount in respect of principal, interest or other amounts due in respect of any existing Indebtedness on the date required for such payment (in each case after giving effect to any applicable grace period); provided, however, that the aggregate amount of any such Indebtedness falling within (i) above and any relevant payments falling within (ii) above (as to which the time for payment has not been extended by the relevant obligees) equals or exceeds an amount to be mutually agreed by the Issuer and the noteholders;

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(e)                One or more final and nonappealable judgments or final decrees is entered against the Issuer, any of the other Obligors or certain other subsidiaries to be mutually agreed involving an aggregate liability (not yet paid or reimbursed by insurance) of an amount to be mutually agreed by the Issuer and the noteholders or more (or its equivalent in another currency), and all such judgments or decrees shall not have been vacated, discharged or stayed within 180 calendar days after the applicable judgment or decree is entered;

 

(f)                 The Issuer, any of the other Obligors or certain other subsidiaries to be mutually agreed shall commence a voluntary case or other proceeding seeking liquidation, judicial or extrajudicial reorganization or other relief with respect to itself or its Indebtedness under any bankruptcy, insolvency or other similar law now or hereafter in effect, or seek the appointment of a trustee, receiver, judicial administrator (administrador judicial), liquidator, custodian or other similar official of it or any substantial part of its property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment or conveyance for the benefit of creditors;

 

(g)                A court of competent jurisdiction enters an order or decree against the Issuer, any of the other Obligors or certain other subsidiaries to be mutually agreed for (i) liquidation, reorganization or other relief with respect to it or its Indebtedness under any bankruptcy, insolvency or other similar law now or hereafter in effect or (ii) the appointment of a trustee, receiver, judicial administrator (administrador judicial), liquidator, custodian or other similar official of it or any substantial part of its property; provided that such order or decree shall remain undismissed and unstayed for a period of 90 calendar days;

 

(h)                Any event occurs that under the laws of Brazil or any political subdivision thereof has substantially the same effect as any of the events referred to in any of clause (f) or (g);

 

(i)                  The Issuer, any of the other Obligors or certain other subsidiaries to be mutually agreed denies or disaffirms its obligations under the notes or the Indenture; or

 

(j)                 All or substantially all of the assets of the Issuer, any of the other Obligors or certain other subsidiaries to be mutually agreed shall be condemned, seized or otherwise appropriated, or custody of such assets shall be assumed by any governmental authority or court or any other Person purporting to act under the authority of the government of any jurisdiction, or the Issuer or the relevant subsidiaries shall be prevented from exercising normal control over all or substantially all of their assets for a period of 60 consecutive days or longer.

 

The trustee is not to be charged with knowledge of any default or event of default or knowledge of any cure of any default or event of default unless either (i) an authorized officer or agent of 

the trustee with direct responsibility for the administration of the Indenture has actual knowledge of such default or event of default or (ii) written notice of such default or event of default has been given to such authorized officer of the trustee by the Issuer or any holder of the notes. The trustee shall not be deemed to have any knowledge of an event of default specified in subsection (h) or (j) above unless it is notified, in writing, by holders of at least 25% in aggregate principal amount of the then outstanding notes.

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Remedies Upon Occurrence of an Event of Default

 

If an event of default occurs, and is continuing, the trustee shall, upon the request of noteholders holding not less than 25% in aggregate principal amount of the notes then outstanding, by written notice to the Issuer, declare the principal amount of all of the notes and all accrued interest thereon immediately due and payable; provided that if an event of default described in clause (f), (g), or (h) above occurs and is continuing, then and in each and every such case, the principal amount of all of the notes and all accrued interest thereon shall, without any notice to the Issuer or any other act by the trustee or any noteholder, become and be accelerated and immediately due and payable. Upon any such declaration of acceleration, the principal of the notes so accelerated and the interest accrued thereon and all other amounts payable with respect to the notes shall be immediately due and payable. If the event of default or events of default giving rise to any such declaration of acceleration shall be cured following such declaration, such declaration may be rescinded by noteholders holding a majority of the notes.

 

The noteholders holding at least a majority of the aggregate principal amount of the outstanding notes may direct the time, method and place of conducting any proceeding for any remedy available to the trustee or exercising any trust or power conferred on the trustee. However, the trustee may refuse to follow any direction that conflicts with law or the Indenture or that the trustee determines in good faith may involve the trustee in personal liability, or for which the trustee reasonably believes it will not be adequately secured or indemnified against the costs, expenses or liabilities, which might be incurred, or that may be unduly prejudicial to the rights of noteholders not taking part in such direction, and the trustee may take any other action it deems proper that is not inconsistent with any such direction received from noteholders. A noteholder may not pursue any remedy with respect to the Indenture or the notes directly against the Issuer or any other Obligor (without the trustee) unless:

 

(a)                the noteholder gives the trustee written notice of a continuing event of default;

 

(b)               noteholders holding not less than 25% in aggregate principal amount of outstanding notes make a written request to the trustee to pursue the remedy;

 

(c)                such noteholder or noteholders offer the trustee adequate security and/or indemnity satisfactory to the trustee against any costs, liability or expense;

 

(d)               the trustee does not comply with the request within 60 calendar days after receipt of the request and the offer of indemnity or security; and

 

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(e)                during such 60-calendar-day period, noteholders holding a majority in aggregate principal amount of the outstanding notes do not give the trustee a direction that is inconsistent with the request.

 

However, such limitations do not apply to the right of any noteholder to receive payment of the principal of, premium, if any, interest on or additional amounts related to such note or to bring suit for the enforcement of any such payment, on or after the due date expressed in the notes, which right shall not be impaired or affected without the consent of the noteholder.

 

Modification of the Indenture

 

The Issuer, the other Obligors and the trustee may, without the consent of the noteholders, amend, waive or supplement the Indenture for certain specific purposes, including, among other things, curing ambiguities, defects or inconsistencies, to conform the Indenture to this “Description of the Notes” or making any other provisions with respect to matters or questions arising under the Indenture, the notes or making any other change that will not materially and adversely affect the interest of the noteholders.

 

In addition, with certain exceptions, the Indenture may be modified by the Issuer, the Obligors and the trustee with the consent of the holders of a majority of the aggregate principal amount of the notes then outstanding. However, without the consent of each noteholder affected, no modification may (with respect to any notes held by non-consenting holders):

 

(a)                change the maturity of payment of principal of or any installment of interest on any note;

 

(b)               reduce the principal amount or the rate of interest, or change the method of computing the amount of principal or interest payable on any date;

 

(c)                change any place of payment where the principal of or interest on the notes is payable;

 

(d)               change the coin or currency in which the principal of or interest on the notes is payable;

 

(e)                impair the right of the noteholders to institute suit for the enforcement of any payment on or after the date due;

 

(f)                 reduce the percentage in principal amount of the outstanding notes, the consent of whose noteholders is required for any modification or the consent of whose noteholders is required for any waiver of compliance with certain provisions of the Indenture or certain defaults under the Indenture and their consequences provided for in the Indenture; 

 

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(g)                eliminate or modify in any manner an Obligor’s obligations with respect to the notes which adversely affects holders in any material respect, except as contemplated in the Indenture; or

 

(h)                change or modify the ranking of the notes that would have a material adverse effect on the noteholders.

 

In the event that consent is obtained from some of the noteholders but not from all of the noteholders with respect to any of these amendments or modifications, new notes with such modifications will be issued to those consenting noteholders. Such new notes shall have separate CUSIP numbers and ISINs from those notes held by the non-consenting noteholders.

 

Legal Defeasance and Covenant Defeasance

 

The Issuer may, at its option, elect to be discharged from the Issuer’s and the other Obligor’s obligations with respect to the notes (“legal defeasance”). In general, upon a legal defeasance, (a) the Issuer will be deemed to have paid and discharged the entire Indebtedness represented by the notes and to have satisfied all of the Issuer’s and the other Obligor’s obligations under the notes and the Indenture except for (i) the rights of the noteholders to receive payments in respect of the principal of and interest and additional amounts, if any, on the notes when the payments are due, (ii) certain provisions of the Indenture relating to ownership, registration and transfer of the notes, (iii) the covenant relating to the maintenance of an office or agency in New York and (iv) certain provisions relating to the rights, powers, trusts, duties, protections, indemnities and immunities of the trustee.

 

In addition, the Issuer may, at its option, and at any time, elect to be released with respect to the notes and the Indenture, as applicable, from the covenants described above under the heading “—Certain Covenants” (“covenant defeasance”). Following such covenant defeasance, the occurrence of a breach or violation of any such covenant with respect to the notes will not constitute an event of default under the Indenture, and certain other events (not including, among other things, non-payment or bankruptcy and insolvency events) described under “—Events of Default” also will not constitute events of default.

 

In order to exercise either legal defeasance or covenant defeasance, the Issuer will be required to satisfy, among other conditions, the following:

 

(a)    The Issuer must irrevocably deposit with the trustee, in trust, for the benefit of the noteholders, cash in U.S. dollars or U.S. government obligations, or a combination thereof, in amounts sufficient (in the opinion of an internationally recognized firm of independent public accountants or an internationally recognized investment bank) to pay and discharge the principal of and each installment of interest on the notes on the stated maturity of such principal or installment of interest in accordance with the terms of the Indenture and the notes;

 

(b)   in the case of a legal defeasance, the Issuer must deliver to the trustee an opinion of counsel stating that (i) the Issuer has received from, or there has been published by, the 

U.S. Internal Revenue Service a ruling or (ii) since the Issue Date there has been a change in the applicable U.S. federal income tax law or the interpretation thereof, in either case to the effect that, and based thereon, the opinion of counsel shall confirm that, the noteholders will not recognize gain or loss for U.S. federal income tax purposes as a result of such deposit, defeasance and discharge and will be subject to U.S. federal income tax on the same amount, in the same manner and at the same time as would have been the case if such deposit, defeasance and discharge had not occurred;

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(c)    in the case of a covenant defeasance, the Issuer must deliver to the trustee an opinion of counsel to the effect that the noteholders will not recognize gain or loss for U.S. federal income tax purposes as a result of such deposit and covenant defeasance and will be subject to U.S. federal income tax on the same amount, in the same manner and at the same time as would have been the case if such deposit and covenant defeasance had not occurred;

 

(d)   no default or event of default shall have occurred and be continuing and, in the case of a legal defeasance only, certain events of bankruptcy or insolvency, at any time during the period ending on the 121st calendar day after the date of such deposit (it being understood that this condition as it applies with respect to a legal defeasance shall not be deemed satisfied until the expiration of such period);

 

(e)    such legal defeasance or covenant defeasance shall not (i) cause the trustee to have a conflicting interest for the purposes of the Trust Indenture Act with respect to any securities of the Issuer or (ii) result in a breach or violation of, or constitute a default under, any other material agreement or instrument to which the Issuer is a party or by which it is bound (other than a default under the Indenture arising from the granting of Liens to secure any Indebtedness incurred in connection therewith); and

 

(f)     the Issuer shall have delivered to the trustee an officer’s certificate and an opinion of counsel stating that all conditions precedent required relating to either of legal defeasance or covenant defeasance, as the case may be, have been satisfied.

 

Satisfaction and Discharge

 

The Indenture will be discharged and will cease to be of further effect (except as to rights of registration of transfer or exchange of notes, which shall survive until all notes have been canceled) as to all outstanding notes will be released when either:

 

(1)   all the notes that have been authenticated and delivered (except lost, stolen or destroyed notes that have been replaced or paid and notes for whose payment money has been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from this trust) have been delivered to the trustee for cancellation; or

 

(2)   (a)  all notes that have not been delivered to the trustee for cancellation either (i) have become due and payable by reason of the mailing of a notice of redemption as described in “—Redemption” or otherwise or (ii) will become due and payable within 

one year, and in each of the foregoing cases the Issuer has irrevocably deposited or caused to be deposited with the trustee as trust funds in trust solely for the benefit of the holders of the notes cash in U.S. dollars or U.S. government obligations, or a combination thereof, in amounts sufficient (without reinvestment) to pay and discharge the entire Indebtedness (including all principal and accrued interest) on the notes not theretofore delivered to the trustee for cancellation to the date of maturity or redemption,

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(b)  the Issuer has paid or caused to be paid all other sums payable by the Issuer under the Indenture,

 

(c)  the Issuer has delivered irrevocable instructions to the trustee to apply the deposited money toward the payment of the notes at maturity or on the date of redemption, as the case may be, and

 

(d)  the holders of the notes have a valid, perfected, exclusive security interest in this trust.

 

In addition, the Issuer must deliver an officers’ certificate and an opinion of counsel to the trustee stating that all conditions precedent to satisfaction and discharge have been complied with.

 

Transfer and Exchange

 

A noteholder may transfer or exchange notes in accordance with the Indenture. The notes are subject to restrictions on transfer and may only be offered and sold in transactions exempt from or not subject to the registration requirements of the Securities Act. The registrar and the trustee may require a noteholder, among other things, to furnish appropriate endorsements and transfer documents (in addition to those required by the Indenture), and the Issuer may require a noteholder to pay any taxes and fees required by law or permitted by the Indenture. The Issuer is not required to transfer or exchange any note for a period of 15 days before the notes are to be redeemed for tax reasons. The registered noteholder will be treated as the owner of it for all purposes.

 

The Trustee

 

[TRUSTEE] will be the trustee under the Indenture. The Issuer may have normal banking relationships with [TRUSTEE] or any of its affiliates in the ordinary course of business. The address of the trustee is [ADDRESS].

 

The Paying Agent

 

[PAYING AGENT] will be the paying agent under the Indenture. The Issuer may have normal banking relationships with [PAYING AGENT] or any of its affiliates in the ordinary course of business. The address of the paying agent is [ADDRESS].

 

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Notices

 

For so long as notes in global form are outstanding, notices to be given to holders will be given to the depositary, in accordance with its applicable policies as in effect from time to time. If notes are issued in individual definitive form, notices to be given to holders will be deemed to have been given upon the mailing by first class mail, postage prepaid, of such notices to holders of the notes at their registered addresses as they appear in the trustee’s records. 

 

Governing Law

 

The Indenture and the notes will be governed by the laws of the State of New York.  

 

Jurisdiction

 

The Issuer and each other Obligor will consent to the non-exclusive jurisdiction of any court of the State of New York or any U.S. federal court sitting in the Borough of Manhattan in The City of New York, New York, United States, and any appellate court from any thereof. The Issuer and each other Obligor will appoint [National Corporate Research Ltd., 10 E. 40th Street, 10th Floor, New York, New York 10016], as its authorized agent upon which service of process may be served in any action or proceeding brought in any court of the State of New York or any U.S. federal court sitting in the Borough of Manhattan in The City of New York in connection with the Indenture or the notes.

 

Waiver of Immunities

 

To the extent that the Issuer or the other Obligors may in any jurisdiction claim for itself or its assets immunity from a suit, execution, attachment, whether in aid of execution, before judgment or otherwise, or other legal process in connection with and as set out in the Indenture and the notes and to the extent that in any jurisdiction there may be immunity attributed to the Issuer or the Issuer’s assets or the other Obligors or their assets, as the case may be, whether or not claimed, the Issuer or the other Obligors will irrevocably agree for the benefit of the noteholders not to claim, and irrevocably waive, the immunity to the full extent permitted by law except for the immunity provided under Brazilian law to property of the Issuer or of the other Obligors that is considered essential for the rendering of public services under any concession agreement, authorization or license (bens vinculados à concessão ou bens reversíveis), to the extent such immunity cannot be waived or contested.  For the avoidance of doubt, any changes on the legal and/or regulatory regime applicable to the public services rendered by the Issuer or by the other Obligors is hereby authorized, notwithstanding the impact that it may produce over the property of the Issuer or of the other Obligors that is considered essential for the rendering of public services under any concession agreement, authorization or license (bens vinculados à concessão ou bens reversíveis).

 

Currency Rate Indemnity

 

The Issuer and each other Obligor has agreed that, if a judgment or order made by any court for the payment of any amount, in respect of any notes is expressed in a currency other than U.S. 

dollars, the Issuer or the other Obligor, as the case may be, will indemnify the relevant noteholder against any deficiency arising from any variation in rates of exchange between the date as of which the denomination currency is notionally converted into the judgment currency for the purposes of the judgment or order and the date of actual payment. This indemnity will constitute a separate and independent obligation from the Issuer’s and each other Obligor’s other obligations under the Indenture will give rise to a separate and independent cause of action, will apply irrespective of any indulgence granted from time to time and will continue in full force and effect notwithstanding any judgment or order for a liquidated sum or sums in respect of amounts due under the Indenture or the notes.

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No personal liability of directors, officers, employees and stockholders

 

No director, officer, employee, incorporator or stockholder of the Issuer or the other Obligors will have any liability for any obligations of the Issuer or the other Obligors, as the case may be, under the notes, the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of notes by accepting a note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the notes. The waiver may not be effective to waive liabilities under applicable securities laws.

 

Certain Definitions

 

“Brazilian GAAP” means, as elected from time to time by the Issuer, (i) the accounting principles prescribed by Brazilian Corporate Law, the rules and regulations issued by applicable regulators, including the CVM, as well as the technical releases issued by the Brazilian Institute of Accountants (Instituto Brasileiro de Contadores), or (ii) International Financial Reporting Standards as issued by the International Accounting Standards Board, in each case, as in effect from time to time.

 

“Capitalized Lease Obligations” means, with respect to any Person, the obligations of such Person under a lease that are required to be classified and accounted for as a capitalized lease in accordance with Brazilian GAAP and the amount of Indebtedness represented by such obligations at any date shall be the capitalized amount of such obligations at such date, determined in accordance with Brazilian GAAP; and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be prepaid by the lessee without payment of a penalty.

 

“Capital Stock” means, with respect to any Person, any and all shares, interests (including partnership interests), rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) the equity of such Person, including each class of Preferred Stock, limited liability interests or partnership interests, but excluding any debt securities convertible into such equity.

 

“Default” means an event or condition the occurrence of which is, or with the lapse of time or the giving of notice or both would be, an Event of Default.

 

“Group” means the Issuer and all its Subsidiaries.

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“Hedging Obligations” of any Person means the obligations of such Person under any agreement relating to any swap, option, forward sale, forward purchase, index transaction, cap transaction, floor transaction, collar transaction or any other similar transaction, in each case, for purposes of hedging or capping against Brazilian inflation, interest rates, currency or commodities price fluctuations.

 

“Indebtedness” means, with respect to any Person, without duplication: 

(1)   whether being principal and/or interest of any present or future indebtedness of such Person:

(A)              in respect of borrowed money;

(B)              evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers’ acceptances (or, without duplication, reimbursement agreements in respect thereof);

(C)              representing the balanced deferred and unpaid of the purchase price of property (including Capitalized Lease Obligations), except (i) any such balance that constitutes a trade payable or similar obligation to a trade creditor, in each case accrued in the ordinary course of business and (ii) liabilities accrued in the ordinary course of business which purchase price is due more than twelve (12) months after the date of placing the property in service or taking delivery and title thereto; or

(D)              representing net obligations under any Hedging Obligations;

if and to the extent that any of the foregoing Indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with Brazilian GAAP or IFRS; 

(2)        to the extent not otherwise included, any obligation by such Person to be liable for, or to pay, as obligor, guarantor or otherwise, on the obligations of the type referred to in clause (1) of a third Person (whether or not such items would appear upon the balance sheet of such obligor or guarantor), other than by endorsement of negotiable instruments for collection in the ordinary course of business; and

(3)        to the extent not otherwise included, the obligations of the type referred to in clause (1) of a third Person secured by a Lien on any asset owned by such first Person, whether or not such Indebtedness is assumed by such first Person;

if and to the extent any of  the preceding items (other than letters of  credit and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with Brazilian GAAP or IFRS. 

Notwithstanding the foregoing, in connection with the purchase by the Issuer or any Restricted Subsidiary of any business, the term “Indebtedness” will exclude post-closing 

payment adjustments to which the seller may become entitled to the extent such payment is determined by a final closing balance sheet or such payment depends on the performance of such business after the closing; provided, however, that, at the time of closing, the amount of any such payment is not determinable and, to the extent such payment thereafter becomes fixed and determined, the amount is paid within 30 days thereafter. 

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For the avoidance of doubt, “Indebtedness” shall not include any obligations to any Person with respect to “Programa de Recuperação Fiscal—REFIS,” “Programa Especial de Parcelamento de Impostos—REFIS Estadual” and “Programa de Parcelamento Especial—PAES”, any other tax payment agreement entered into with any Brazilian governmental entity and/or any other payment agreement that is due to any creditor who, prior to the Reorganization Plan Confirmation, was not considered as Indebtedness in the calculation of Indebtedness of the Issuer.

“Issuer” means the party named as such in the introductory paragraph to this Indenture until a successor replaces it pursuant to this Indenture and thereafter means such successor.

 

“Lien” means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including, without limitation, any conditional sale or other title retention agreement or lease in the nature thereof or any agreement to give any security interest).

                    

“Person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof, or any other entity.

 

“Preferred Stock” means, with respect to any Person, Capital Stock of any class or classes (however designated) of such Person that has preferential rights over any other Capital Stock of such Person with respect to the payment of dividends or distributions, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person.

 

“Relevant Date” means whichever is the later of (i) the date on which the payment in question first becomes due and (ii) if the full amount payable has not been received by the trustee or a paying agent on or prior to such due date, the date on which (the full amount having been so received) notice to that effect has been given to the noteholders.

 

“Reorganization Plan” means [that certain judicial reorganization plan of the Issuer confirmed by the 7th Corporate Court of the Judicial District of the State Capital of Rio de Janeiro on [●], as may be amended or modified from time to time pursuant to its terms, establishing the terms and conditions for the restructuring of the debt of the Issuer and certain of its Wholly Owned Subsidiaries (the “RJ Debtors”), and providing for actions to be adopted by the RJ Debtors to overcome the financial distress of the RJ Debtors and ensure their continuity as going concerns, including, without limitation, (1) restructuring and balancing their liabilities; (2) actions during the judicial reorganization designed to obtain new funds; and (3) the potential sale of capital assets.]

 

“Restricted Subsidiary” means any Subsidiary of the Issuer that is subject to the Reorganization Plan.

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“Stated Maturity” means, with respect to any Indebtedness, the date specified in such Indebtedness as the fixed date on which the final payment of principal of such Indebtedness is due and payable, including, with respect to any principal amount which is then due and payable pursuant to any mandatory redemption provision, the date specified for the payment thereof (but excluding any provision providing for obligations to repay, redeem or repurchase any such Indebtedness upon the happening of any contingency unless such contingency has occurred).

 

“Subsidiary” means, with respect to any Person, any other corporation, limited liability company, partnership, association or other entity of which more than fifty percent (50%) of the outstanding Voting Stock is owned, directly or indirectly, by such Person and one or more Subsidiaries of such Person (or a combination thereof).

 

“Wholly Owned Subsidiary” means, with respect to any Person, any Restricted Subsidiary of which all the outstanding Capital Stock (other than, in the case of a Subsidiary not organized in the United States, directors’ qualifying shares or an immaterial amount of shares required to be owned by other Persons pursuant to applicable law) is owned by such Person or any other Person that satisfies this definition in respect of such Person.

 

“Voting Stock” means, with respect to any Person, securities of any class of Capital Stock of such Person then outstanding that is entitled (without regard to the occurrence of any contingency) to vote in the election of members of the board of directors (or equivalent governing body) of such Person, but excluding such classes of Capital Stock that are entitled, as a group in a separate election, to appoint one member of the board of directors of such Person as representative of the minority shareholders.

 

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