EXHIBIT 2.1
REORGANIZATION AND TRANSFER AGREEMENT
AGREEMENT, made as of this 20th day of July, 2000 by and between TV
Filme, Inc., a Delaware corporation, with its principal office at c/o ITSA -
Intercontinental Telecomunicacoes, Ltda., SCS, Quadra 07-Bloco A, Ed. Executive
Tower, Sala 601, 70.300-911 Brasilia-DF, Brazil (the "Company"); and ITSA Ltd.,
a Cayman Islands corporation, with its principal office at c/o ITSA -
Intercontinental Telecomunicacoes, Ltda., SCS, Quadra 07-Bloco A, Ed. Executive
Tower, Sala 601, 70.300-911 Brasilia-DF, Brazil (the "Reorganized Company"),
each a Party and together the Parties.
W I T N E S S E T H :
WHEREAS, on January 26, 2000, the Company filed a voluntary
petition for relief under chapter 11 of the United States Bankruptcy Code, with
the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy
Court "), Case No. 00-342 (PJW) (the "Bankruptcy Case"); and
WHEREAS, pursuant to an Order dated April 10, 2000, the Bankruptcy
Court confirmed the Company's First Amended Plan of Reorganization dated
February 29, 2000 (the "Plan"), which Plan sets forth the terms of a
reorganization pursuant to which, among other things, the Reorganized Company
will be the successor to the Company and the Company will be dissolved (the
"Reorganization"). Capitalized terms not defined herein shall have the meanings
ascribed to such terms in the Plan. NOW, THEREFORE, in consideration of the
promises herein, and other valuable consideration, receipt of which is hereby
acknowledged, the Parties agree as follows:
1. On the Effective Date, by this Agreement title to all of the
assets of the Company are hereby transferred to the Reorganized Company (the
"Transfer"), including, without limitation, (i) the Company's shares of
ITSA-Intercontinental Telecomunicacoes Ltda., a Brazilian limitada ("ITSA"),
(ii) the Company's shares of TV Filme of Cayman Ltd., a Cayman Islands company
and wholly-owned subsidiary of the Company ("Old TVF Cayman"), (iii) the
Company's shares of Filme Sub Inc., a Delaware corporation and wholly-owned
subsidiary of the Company ("TVF Sub"), (iv) an intercompany note owed by ITSA to
the Company in the original principal amount of U.S.$140 million (the "ITSA
Note") (which amount shall be reduced to the New Note Amount and be represented
by the New Senior Notes) , and (v) any other assets of the Company (other than
the Claims Reserve discussed below, to the extent it is necessary to pay Allowed
Claims against the Company), and the Reorganized Company will be the successor
in interest to the Company in respect of such assets but will not assume any
liabilities of the Company, all of which shall be discharged as provided in the
Plan.
2. On the Effective Date, the Company will contribute as equity to
its subsidiary, ITSA, a portion of the ITSA Note which is equal to U.S.$105
million. The terms of the remaining amount (i.e., U.S.$35 million) due on the
ITSA Note will be amended and restated
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and New Senior Notes issued by ITSA in the principal amount of U.S.$35 million
will be assigned by the Reorganized Company to the holders of the Company's
Senior Notes.
3. The Reorganized Company has agreed to act as Disbursing Agent
pursuant to the terms of the Plan. On the Effective Date, the Company through
the Disbursing Agent will use the Claims Reserve to pay in full all Allowed
Claims of the Company, except to the extent the holders of Senior Notes have
agreed to restructure the indebtedness of the Company to such holders, pursuant
to the Plan.
4. In consideration for the Transfer, and in exchange for their
existing Senior Notes in the Company, on the Effective Date, the holders of
Senior Notes will receive a U.S.$25 million cash payment from the Claims Reserve
and their existing Senior Notes (in the aggregate principal amount of U.S.$140
million plus interest) will be converted into (i) New Senior Notes in the New
Note Amount (equal to the aggregate principal amount of U.S.$35 million) and
(ii) 80% of the new common stock of the Reorganized Company. In addition, on the
Effective Date, the Company will pay from the Claims Reserve a commitment fee,
totaling U.S.$500,000, in connection with the U.S.$10 million Exit Financing to
be provided to the Reorganized Company by the Specified Holders. The procedures
for the above-referenced distributions to holders of Senior Notes are set forth
in the Plan.
5. In partial consideration of the future services of certain
management employees of the Reorganized Company, on the Effective Date, Compex
Holdings, a newly-formed Cayman Islands corporation, will receive 15% of the new
common equity of the Reorganized Company.
6. In consideration for the Transfer, and in exchange for their
existing common stock in the Company, on the Effective Date, existing common
stockholders of TV Filme, Inc. will receive in the aggregate 5% of the new
common stock of the Reorganized Company. The procedures for such exchange of
stock are set forth in the Plan.
7. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants as follows:
(a) ORGANIZATION, STANDING AND QUALIFICATION. The Company is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware.
(b) AUTHORITY. The Company has all requisite corporate power
and authority to enter into this Agreement and to incur and perform the
obligations provided for herein and in the Plan and related Implementation
Documents, all of which have been duly authorized by all necessary and proper
corporate action.
(c) DUE EXECUTION; BINDING AGREEMENTS. This Agreement has been
duly executed and delivered by the Company. This Agreement constitutes the valid
and legally binding obligations of the Company, enforceable in accordance with
its terms.
8. REPRESENTATIONS AND WARRANTIES OF REORGANIZED COMPANY. The
Reorganized Company represents and warrants as follows:
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(a) ORGANIZATION, STANDING AND QUALIFICATION. The Reorganized
Company is a corporation duly incorporated, validly existing, and in good
standing under the laws of the Cayman Islands.
(b) AUTHORITY. The Reorganized Company has all requisite
corporate power and authority to enter into this Agreement and to incur and
perform the obligations provided for herein and in the Plan and related
Implementation Documents, all of which have been duly authorized by all
necessary and proper corporate action.
(c) DUE EXECUTION; BINDING AGREEMENTS. This Agreement has been
duly executed and delivered by the Reorganized Company. This Agreement
constitutes the valid and legally binding obligations of the Reorganized
Company, enforceable in accordance with its terms.
9. GOVERNING LAW AND SEVERABILITY. This Agreement shall be governed
by the internal laws of New York, without regard to principles of conflicts of
law.
10. BENEFIT. This Agreement shall be binding upon, and inure to the
benefit of, the parties hereto and their respective legal representatives,
successors and assigns.
11. NOTICES. Any notice required or permitted by this Agreement to
be given to either the Company or the Reorganized Company will be deemed to have
been received: (1) no later than 24 hours after transmission, if transmitted by
facsimile or electronic mail with confirmation of delivery; (2) two business
days, if sent by nationally recognized overnight courier service; or (3) five
business days after deposit in the mail, registered or certified, postage
prepaid.
In the case of the Company, send notice to:
c/o ITSA-Intercontinental Telecomunicacoes Ltda.
SCS, Quadra 07-Bloco A
Edificio ExecutiveTower, Sala 601
Brasilia-DF
70.300-911 BRAZIL
Attn: Hermano Studart Lins de Albuquerque
Fax: 011-55-61-323-5660
with a copy to:
Kelley Drye & Warren LLP
101 Park Avenue
New York, New York 10178
Attn: Mark I. Bane, Esq. and
Karen Ostad, Esq.
Fax: (212) 808-7897
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and
Kelley Drye & Warren LLP
Two Stamford Plaza
281 Tresser Boulevard
Stamford, CT 06901
Attn: John T. Capetta, Esq.
Fax: (203) 327-2669
In the case of the Reorganized Company, send notice to:
c/o ITSA-Intercontinental Telecomunicacoes Ltda.
SCS, Quadra 07-Bloco A
Edificio ExecutiveTower, Sala 601
Brasilia-DF
70.300-911 BRAZIL
Attn: Hermano Studart Lins de Albuquerque
Fax: 011-55-61-323-5660
with a copy to:
Maples & Calder
Ugland House
P.O. Box 309, South Church Street
Georgetown
Grand Cayman, Cayman Islands
BWI
Attn: Rebecca Steller, Esq.
Fax: (345) 949-8080
12. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement
as of the date set forth above.
TV FILME, INC.
By:/s/ Hermano Studart Lins de Albuquerque
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Name: Hermano Studart Lins de Albuquerque
Title: Chief Executive Officer
ITSA Ltd.
By:/s/ Hermano Studart Lins de Albuquerque
---------------------------------------
Name: Hermano Studart Lins de Albuquerque
Title: Chief Executive Officer
