SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
13D
(Rule
13d-101)
INFORMATION
TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO
§ 240.13d-1(a) AND AMENDMENTS THERETO FILED
PURSUANT
TO § 240.13d-2(a)
Under
the Securities Exchange Act of 1934
(Amendment
No. 1)*
Lan Airlines
S.A.
(Name of
Issuer)
Shares of Common Stock
without par value
(Title of
Class of Securities)
N/A
(CUSIP
Number)
Carlos Vallette
Gudenschwager
Costa Verde Aeronáutica
S.A.
Presidente Riesco 5711,
Suite 1604, Las Condes, Santiago, Chile
Tel:
+56-2-337-1350
José María Eyzaguirre
Baeza
Claro &
Cía.
Av. Apoquindo 3721, 13th
floor, Las Condes, Santiago, Chile
Tel:
+56-2-367-3000
(Name,
Address and Telephone Number of Person
Authorized
to Receive Notices and Communications)
January 18,
2011
(Date of
Event Which Requires Filing of this Statement)If the filing person has previously
filed a statement on Schedule 13G to report the acquisition that is the subject
of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e),
240.13d-1(f) or 240.13d-1(g), check the following box: ¨
Note: Schedules
filed in paper format shall include a signed original and five copies of the
schedule, including all exhibits. See Rule 240.13d-7 for other parties to whom
copies are to be sent.
* The
remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The
information required on the remainder of this cover page shall not be deemed to
be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934
("Act") or otherwise subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act (however, see the
Notes).
|
CUSIP No.
N/A
|
13D
|
Page 2 of 68 Pages
|
|
1
|
NAMES
OF REPORTING PERSONS
Costa
Verde Aeronáutica S.A.
|
|||
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
o
(b)
x
|
||
|
3
|
SEC
USE ONLY
|
|||
|
4
|
SOURCE
OF FUNDS
WC;
OO
|
|||
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or
2(e) o
|
|||
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Republic
of Chile
|
|||
|
NUMBER
OF
SHARES
|
7
|
SOLE
VOTING POWER
0
|
||
|
BENEFICIALLY
OWNED
BY
|
8
|
SHARED
VOTING POWER
115,399,502
|
||
|
EACH
REPORTING
PERSON
|
9
|
SOLE
DISPOSITIVE POWER
0
|
||
|
WITH
|
10
|
SHARED
DISPOSITIVE POWER
115,399,502
|
||
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
115,399,502
|
|||
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
|
|||
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.1%
|
|||
|
14
|
TYPE
OF REPORTING PERSON
CO
|
|||
2
|
CUSIP No.
N/A
|
13D
|
Page 3 of 68 Pages
|
|
1
|
NAMES
OF REPORTING PERSONS
Inversiones
Mineras del Cantábrico S.A.
|
|||
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
o
(b)
x
|
||
|
3
|
SEC
USE ONLY
|
|||
|
4
|
SOURCE
OF FUNDS
WC;
OO
|
|||
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or
2(e) o
|
|||
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Republic
of Chile
|
|||
|
NUMBER
OF
SHARES
|
7
|
SOLE
VOTING POWER
0
|
||
|
BENEFICIALLY
OWNED
BY
|
8
|
SHARED
VOTING POWER
115,399,502
|
||
|
EACH
REPORTING
PERSON
|
9
|
SOLE
DISPOSITIVE POWER
0
|
||
|
WITH
|
10
|
SHARED
DISPOSITIVE POWER
115,399,502
|
||
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
115,399,502
|
|||
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
|
|||
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.1%
|
|||
|
14
|
TYPE
OF REPORTING PERSON
CO
|
|||
3
|
CUSIP No.
N/A
|
13D
|
Page 4 of 68 Pages
|
|
1
|
NAMES
OF REPORTING PERSONS
Inversiones
Costa Verde Limitada y Compañía en Comandita por
Acciones
|
|||
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
o
(b)
x
|
||
|
3
|
SEC
USE ONLY
|
|||
|
4
|
SOURCE
OF FUNDS
WC;
OO
|
|||
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or
2(e) o
|
|||
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Republic
of Chile
|
|||
|
NUMBER
OF
SHARES
|
7
|
SOLE
VOTING POWER
0
|
||
|
BENEFICIALLY
OWNED
BY
|
8
|
SHARED
VOTING POWER
115,399,502
|
||
|
EACH
REPORTING
PERSON
|
9
|
SOLE
DISPOSITIVE POWER
0
|
||
|
WITH
|
10
|
SHARED
DISPOSITIVE POWER
115,399,502
|
||
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
115,399,502
|
|||
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
|
|||
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.1%
|
|||
|
14
|
TYPE
OF REPORTING PERSON
CO
|
|||
4
|
CUSIP No.
N/A
|
13D
|
Page 5 of 68 Pages
|
|
1
|
NAMES
OF REPORTING PERSONS
Inversiones
Costa Verde Limitada
|
|||
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
o
(b)
x
|
||
|
3
|
SEC
USE ONLY
|
|||
|
4
|
SOURCE
OF FUNDS
WC;
OO
|
|||
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or
2(e) o
|
|||
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Republic
of Chile
|
|||
|
NUMBER
OF
SHARES
|
7
|
SOLE
VOTING POWER
0
|
||
|
BENEFICIALLY
OWNED
BY
|
8
|
SHARED
VOTING POWER
115,399,502
|
||
|
EACH
REPORTING
PERSON
|
9
|
SOLE
DISPOSITIVE POWER
0
|
||
|
WITH
|
10
|
SHARED
DISPOSITIVE POWER
115,399,502
|
||
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
115,399,502
|
|||
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
|
|||
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.1%
|
|||
|
14
|
TYPE
OF REPORTING PERSON
CO
|
|||
5
|
CUSIP No.
N/A
|
13D
|
Page 6 of 68 Pages
|
|
1
|
NAMES
OF REPORTING PERSONS
Inversiones
Costa Verde Aeronáutica
Limitada
|
|||
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
o
(b)
x
|
||
|
3
|
SEC
USE ONLY
|
|||
|
4
|
SOURCE
OF FUNDS
WC;
OO
|
|||
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or
2(e) o
|
|||
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Republic
of Chile
|
|||
|
NUMBER
OF
SHARES
|
7
|
SOLE
VOTING POWER
0
|
||
|
BENEFICIALLY
OWNED
BY
|
8
|
SHARED
VOTING POWER
115,399,502
|
||
|
EACH
REPORTING
PERSON
|
9
|
SOLE
DISPOSITIVE POWER
0
|
||
|
WITH
|
10
|
SHARED
DISPOSITIVE POWER
115,399,502
|
||
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
115,399,502
|
|||
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
|
|||
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.1%
|
|||
|
14
|
TYPE
OF REPORTING PERSON
CO
|
|||
6
|
CUSIP No.
N/A
|
13D
|
Page 7 of 68 Pages
|
|
1
|
NAMES
OF REPORTING PERSONS
Inmobiliaria
e Inversiones La Espasa
Limitada
|
|||
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
o
(b)
x
|
||
|
3
|
SEC
USE ONLY
|
|||
|
4
|
SOURCE
OF FUNDS
WC;
OO
|
|||
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or
2(e) o
|
|||
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Republic
of Chile
|
|||
|
NUMBER
OF
SHARES
|
7
|
SOLE
VOTING POWER
0
|
||
|
BENEFICIALLY
OWNED
BY
|
8
|
SHARED
VOTING POWER
115,399,502
|
||
|
EACH
REPORTING
PERSON
|
9
|
SOLE
DISPOSITIVE POWER
0
|
||
|
WITH
|
10
|
SHARED
DISPOSITIVE POWER
115,399,502
|
||
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
115,399,502
|
|||
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
|
|||
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.1%
|
|||
|
14
|
TYPE
OF REPORTING PERSON
CO
|
|||
7
|
CUSIP No.
N/A
|
13D
|
Page 8 of 68 Pages
|
|
1
|
NAMES
OF REPORTING PERSONS
Inmobiliaria
e Inversiones Caravia
Limitada
|
|||
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
o
(b)
x
|
||
|
3
|
SEC
USE ONLY
|
|||
|
4
|
SOURCE
OF FUNDS
WC;
OO
|
|||
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or
2(e) o
|
|||
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Republic
of Chile
|
|||
|
NUMBER
OF
SHARES
|
7
|
SOLE
VOTING POWER
0
|
||
|
BENEFICIALLY
OWNED
BY
|
8
|
SHARED
VOTING POWER
115,399,502
|
||
|
EACH
REPORTING
PERSON
|
9
|
SOLE
DISPOSITIVE POWER
0
|
||
|
WITH
|
10
|
SHARED
DISPOSITIVE POWER
115,399,502
|
||
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
115,399,502
|
|||
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
|
|||
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.1%
|
|||
|
14
|
TYPE
OF REPORTING PERSON
CO
|
|||
8
|
CUSIP No.
N/A
|
13D
|
Page 9 of 68 Pages
|
|
1
|
NAMES
OF REPORTING PERSONS
Inmobiliaria
e Inversiones Puerto
Claro S.A.
|
|||
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
o
(b)
x
|
||
|
3
|
SEC
USE ONLY
|
|||
|
4
|
SOURCE
OF FUNDS
WC;
OO
|
|||
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or
2(e) o
|
|||
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Republic
of Chile
|
|||
|
NUMBER
OF
SHARES
|
7
|
SOLE
VOTING POWER
0
|
||
|
BENEFICIALLY
OWNED
BY
|
8
|
SHARED
VOTING POWER
115,399,502
|
||
|
EACH
REPORTING
PERSON
|
9
|
SOLE
DISPOSITIVE POWER
0
|
||
|
WITH
|
10
|
SHARED
DISPOSITIVE POWER
115,399,502
|
||
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
115,399,502
|
|||
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
|
|||
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.1%
|
|||
|
14
|
TYPE
OF REPORTING PERSON
CO
|
|||
9
|
CUSIP No.
N/A
|
13D
|
Page 10 of 68 Pages
|
|
1
|
NAMES
OF REPORTING PERSONS
Inmobiliaria
e Inversiones Priesca
Limitada
|
|||
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
o
(b)
x
|
||
|
3
|
SEC
USE ONLY
|
|||
|
4
|
SOURCE
OF FUNDS
WC;
OO
|
|||
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or
2(e) o
|
|||
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Republic
of Chile
|
|||
|
NUMBER
OF
SHARES
|
7
|
SOLE
VOTING POWER
0
|
||
|
BENEFICIALLY
OWNED
BY
|
8
|
SHARED
VOTING POWER
115,399,502
|
||
|
EACH
REPORTING
PERSON
|
9
|
SOLE
DISPOSITIVE POWER
0
|
||
|
WITH
|
10
|
SHARED
DISPOSITIVE POWER
115,399,502
|
||
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
115,399,502
|
|||
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
|
|||
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.1%
|
|||
|
14
|
TYPE
OF REPORTING PERSON
CO
|
|||
10
|
CUSIP No.
N/A
|
13D
|
Page 11 of 68 Pages
|
|
1
|
NAMES
OF REPORTING PERSONS
Inmobiliaria
e Inversiones El Fano
Limitada
|
|||
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
o
(b)
x
|
||
|
3
|
SEC
USE ONLY
|
|||
|
4
|
SOURCE
OF FUNDS
WC;
OO
|
|||
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or
2(e) o
|
|||
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Republic
of Chile
|
|||
|
NUMBER
OF
SHARES
|
7
|
SOLE
VOTING POWER
0
|
||
|
BENEFICIALLY
OWNED
BY
|
8
|
SHARED
VOTING POWER
115,399,502
|
||
|
EACH
REPORTING
PERSON
|
9
|
SOLE
DISPOSITIVE POWER
0
|
||
|
WITH
|
10
|
SHARED
DISPOSITIVE POWER
115,399,502
|
||
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
115,399,502
|
|||
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
|
|||
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.1%
|
|||
|
14
|
TYPE
OF REPORTING PERSON
CO
|
|||
11
|
CUSIP No.
N/A
|
13D
|
Page 12 of 68 Pages
|
|
1
|
NAMES
OF REPORTING PERSONS
South
Andean Investments (Chile)
S.A.
|
|||
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
o
(b)
x
|
||
|
3
|
SEC
USE ONLY
|
|||
|
4
|
SOURCE
OF FUNDS
WC;
OO
|
|||
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or
2(e) o
|
|||
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Republic
of Chile
|
|||
|
NUMBER
OF
SHARES
|
7
|
SOLE
VOTING POWER
0
|
||
|
BENEFICIALLY
OWNED
BY
|
8
|
SHARED
VOTING POWER
115,399,502
|
||
|
EACH
REPORTING
PERSON
|
9
|
SOLE
DISPOSITIVE POWER
0
|
||
|
WITH
|
10
|
SHARED
DISPOSITIVE POWER
115,399,502
|
||
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
115,399,502
|
|||
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
|
|||
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.1%
|
|||
|
14
|
TYPE
OF REPORTING PERSON
CO
|
|||
12
|
CUSIP No.
N/A
|
13D
|
Page 13 of 68 Pages
|
|
1
|
NAMES
OF REPORTING PERSONS
Isidora
Cueto Cazes y Compañía
Limitada
|
|||
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
o
(b)
x
|
||
|
3
|
SEC
USE ONLY
|
|||
|
4
|
SOURCE
OF FUNDS
WC;
OO
|
|||
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or
2(e) o
|
|||
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Republic
of Chile
|
|||
|
NUMBER
OF
SHARES
|
7
|
SOLE
VOTING POWER
0
|
||
|
BENEFICIALLY
OWNED
BY
|
8
|
SHARED
VOTING POWER
115,399,502
|
||
|
EACH
REPORTING
PERSON
|
9
|
SOLE
DISPOSITIVE POWER
0
|
||
|
WITH
|
10
|
SHARED
DISPOSITIVE POWER
115,399,502
|
||
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
115,399,502
|
|||
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
|
|||
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.1%
|
|||
|
14
|
TYPE
OF REPORTING PERSON
CO
|
|||
13
|
CUSIP No.
N/A
|
13D
|
Page 14 of 68 Pages
|
|
1
|
NAMES
OF REPORTING PERSONS
Juan
José Cueto
Plaza
|
|||
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
o
(b)
x
|
||
|
3
|
SEC
USE ONLY
|
|||
|
4
|
SOURCE
OF FUNDS
PF;
OO
|
|||
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or
2(e) x
|
|||
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Republic
of Chile
|
|||
|
NUMBER
OF
SHARES
|
7
|
SOLE
VOTING POWER
0
|
||
|
BENEFICIALLY
OWNED
BY
|
8
|
SHARED
VOTING POWER
115,399,502
|
||
|
EACH
REPORTING
PERSON
|
9
|
SOLE
DISPOSITIVE POWER
0
|
||
|
WITH
|
10
|
SHARED
DISPOSITIVE POWER
115,399,502
|
||
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
115,399,502
|
|||
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
|
|||
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.1%
|
|||
|
14
|
TYPE
OF REPORTING PERSON
IN
|
|||
14
|
CUSIP No.
N/A
|
13D
|
Page 15 of 68 Pages
|
|
1
|
NAMES
OF REPORTING PERSONS
Ignacio
Javier Cueto
Plaza
|
|||
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
o
(b)
x
|
||
|
3
|
SEC
USE ONLY
|
|||
|
4
|
SOURCE
OF FUNDS
PF;
OO
|
|||
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or
2(e) o
|
|||
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Republic
of Chile
|
|||
|
NUMBER
OF
SHARES
|
7
|
SOLE
VOTING POWER
0
|
||
|
BENEFICIALLY
OWNED
BY
|
8
|
SHARED
VOTING POWER
115,399,502
|
||
|
EACH
REPORTING
PERSON
|
9
|
SOLE
DISPOSITIVE POWER
0
|
||
|
WITH
|
10
|
SHARED
DISPOSITIVE POWER
115,399,502
|
||
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
115,399,502
|
|||
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
|
|||
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.1%
|
|||
|
14
|
TYPE
OF REPORTING PERSON
IN
|
|||
15
|
CUSIP No.
N/A
|
13D
|
Page 16 of 68 Pages
|
|
1
|
NAMES
OF REPORTING PERSONS
Enrique
Miguel Cueto
Plaza
|
|||
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
o
(b)
x
|
||
|
3
|
SEC
USE ONLY
|
|||
|
4
|
SOURCE
OF FUNDS
PF;
OO
|
|||
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or
2(e) o
|
|||
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Republic
of Chile
|
|||
|
NUMBER
OF
SHARES
|
7
|
SOLE
VOTING POWER
0
|
||
|
BENEFICIALLY
OWNED
BY
|
8
|
SHARED
VOTING POWER
115,399,502
|
||
|
EACH
REPORTING
PERSON
|
9
|
SOLE
DISPOSITIVE POWER
0
|
||
|
WITH
|
10
|
SHARED
DISPOSITIVE POWER
115,399,502
|
||
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
115,399,502
|
|||
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
|
|||
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.1%
|
|||
|
14
|
TYPE
OF REPORTING PERSON
IN
|
|||
16
|
CUSIP No.
N/A
|
13D
|
Page 17 of 68 Pages
|
|
1
|
NAMES
OF REPORTING PERSONS
María
Esperanza Cueto
Plaza
|
|||
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
o
(b)
x
|
||
|
3
|
SEC
USE ONLY
|
|||
|
4
|
SOURCE
OF FUNDS
PF;
OO
|
|||
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or
2(e) o
|
|||
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Republic
of Chile
|
|||
|
NUMBER
OF
SHARES
|
7
|
SOLE
VOTING POWER
0
|
||
|
BENEFICIALLY
OWNED
BY
|
8
|
SHARED
VOTING POWER
115,399,502
|
||
|
EACH
REPORTING
PERSON
|
9
|
SOLE
DISPOSITIVE POWER
0
|
||
|
WITH
|
10
|
SHARED
DISPOSITIVE POWER
115,399,502
|
||
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
115,399,502
|
|||
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
|
|||
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.1%
|
|||
|
14
|
TYPE
OF REPORTING PERSON
IN
|
|||
17
|
CUSIP No.
N/A
|
13D
|
Page 18 of 68 Pages
|
|
1
|
NAMES
OF REPORTING PERSONS
Isidora
Cueto
Cazes
|
|||
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
o
(b)
x
|
||
|
3
|
SEC
USE ONLY
|
|||
|
4
|
SOURCE
OF FUNDS
PF;
OO
|
|||
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or
2(e) o
|
|||
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Republic
of Chile
|
|||
|
NUMBER
OF
SHARES
|
7
|
SOLE
VOTING POWER
0
|
||
|
BENEFICIALLY
OWNED
BY
|
8
|
SHARED
VOTING POWER
115,399,502
|
||
|
EACH
REPORTING
PERSON
|
9
|
SOLE
DISPOSITIVE POWER
0
|
||
|
WITH
|
10
|
SHARED
DISPOSITIVE POWER
115,399,502
|
||
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
115,399,502
|
|||
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
|
|||
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.1%
|
|||
|
14
|
TYPE
OF REPORTING PERSON
IN
|
|||
18
|
CUSIP No.
N/A
|
13D
|
Page 19 of 68 Pages
|
|
1
|
NAMES
OF REPORTING PERSONS
Felipe
Jaime Cueto
Ruiz-Tagle
|
|||
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
o
(b)
x
|
||
|
3
|
SEC
USE ONLY
|
|||
|
4
|
SOURCE
OF FUNDS
PF;
OO
|
|||
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or
2(e) o
|
|||
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Republic
of Chile
|
|||
|
NUMBER
OF
SHARES
|
7
|
SOLE
VOTING POWER
0
|
||
|
BENEFICIALLY
OWNED
BY
|
8
|
SHARED
VOTING POWER
115,399,502
|
||
|
EACH
REPORTING
PERSON
|
9
|
SOLE
DISPOSITIVE POWER
0
|
||
|
WITH
|
10
|
SHARED
DISPOSITIVE POWER
115,399,502
|
||
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
115,399,502
|
|||
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
|
|||
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.1%
|
|||
|
14
|
TYPE
OF REPORTING PERSON
IN
|
|||
19
|
CUSIP No.
N/A
|
13D
|
Page 20 of 68 Pages
|
|
1
|
NAMES
OF REPORTING PERSONS
María
Emilia Cueto Ruiz-Tagle
|
|||
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
o
(b)
x
|
||
|
3
|
SEC
USE ONLY
|
|||
|
4
|
SOURCE
OF FUNDS
PF;
OO
|
|||
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or
2(e) o
|
|||
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Republic
of Chile
|
|||
|
NUMBER
OF
SHARES
|
7
|
SOLE
VOTING POWER
0
|
||
|
BENEFICIALLY
OWNED
BY
|
8
|
SHARED
VOTING POWER
115,399,502
|
||
|
EACH
REPORTING
PERSON
|
9
|
SOLE
DISPOSITIVE POWER
0
|
||
|
WITH
|
10
|
SHARED
DISPOSITIVE POWER
115,399,502
|
||
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
115,399,502
|
|||
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
|
|||
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.1%
|
|||
|
14
|
TYPE
OF REPORTING PERSON
IN
|
|||
20
|
CUSIP No.
N/A
|
13D
|
Page 21 of 68 Pages
|
|
1
|
NAMES
OF REPORTING PERSONS
Andrea
Raquel Cueto Ventura
|
|||
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
o
(b)
x
|
||
|
3
|
SEC
USE ONLY
|
|||
|
4
|
SOURCE
OF FUNDS
PF;
OO
|
|||
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or
2(e) o
|
|||
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Republic
of Chile
|
|||
|
NUMBER
OF
SHARES
|
7
|
SOLE
VOTING POWER
0
|
||
|
BENEFICIALLY
OWNED
BY
|
8
|
SHARED
VOTING POWER
115,399,502
|
||
|
EACH
REPORTING
PERSON
|
9
|
SOLE
DISPOSITIVE POWER
0
|
||
|
WITH
|
10
|
SHARED
DISPOSITIVE POWER
115,399,502
|
||
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
115,399,502
|
|||
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
|
|||
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.1%
|
|||
|
14
|
TYPE
OF REPORTING PERSON
IN
|
|||
21
|
CUSIP No.
N/A
|
13D
|
Page 22 of 68 Pages
|
|
1
|
NAMES
OF REPORTING PERSONS
Daniela
Esperanza Cueto Ventura
|
|||
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
o
(b)
x
|
||
|
3
|
SEC
USE ONLY
|
|||
|
4
|
SOURCE
OF FUNDS
PF;
OO
|
|||
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or
2(e) o
|
|||
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Republic
of Chile
|
|||
|
NUMBER
OF
SHARES
|
7
|
SOLE
VOTING POWER
0
|
||
|
BENEFICIALLY
OWNED
BY
|
8
|
SHARED
VOTING POWER
115,399,502
|
||
|
EACH
REPORTING
PERSON
|
9
|
SOLE
DISPOSITIVE POWER
0
|
||
|
WITH
|
10
|
SHARED
DISPOSITIVE POWER
115,399,502
|
||
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
115,399,502
|
|||
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
|
|||
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.1%
|
|||
|
14
|
TYPE
OF REPORTING PERSON
IN
|
|||
22
|
CUSIP No.
N/A
|
13D
|
Page 23 of 68 Pages
|
|
1
|
NAMES
OF REPORTING PERSONS
Valentina
Sara Cueto Ventura
|
|||
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
o
(b)
x
|
||
|
3
|
SEC
USE ONLY
|
|||
|
4
|
SOURCE
OF FUNDS
PF;
OO
|
|||
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or
2(e) o
|
|||
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Republic
of Chile
|
|||
|
NUMBER
OF
SHARES
|
7
|
SOLE
VOTING POWER
0
|
||
|
BENEFICIALLY
OWNED
BY
|
8
|
SHARED
VOTING POWER
115,399,502
|
||
|
EACH
REPORTING
PERSON
|
9
|
SOLE
DISPOSITIVE POWER
0
|
||
|
WITH
|
10
|
SHARED
DISPOSITIVE POWER
115,399,502
|
||
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
115,399,502
|
|||
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
|
|||
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.1%
|
|||
|
14
|
TYPE
OF REPORTING PERSON
IN
|
|||
23
|
CUSIP No.
N/A
|
13D
|
Page 24 of 68 Pages
|
|
1
|
NAMES
OF REPORTING PERSONS
Alejandra
Sonia Cueto Ventura
|
|||
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
o
(b)
x
|
||
|
3
|
SEC
USE ONLY
|
|||
|
4
|
SOURCE
OF FUNDS
PF;
OO
|
|||
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or
2(e) o
|
|||
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Republic
of Chile
|
|||
|
NUMBER
OF
SHARES
|
7
|
SOLE
VOTING POWER
0
|
||
|
BENEFICIALLY
OWNED
BY
|
8
|
SHARED
VOTING POWER
115,399,502
|
||
|
EACH
REPORTING
PERSON
|
9
|
SOLE
DISPOSITIVE POWER
0
|
||
|
WITH
|
10
|
SHARED
DISPOSITIVE POWER
115,399,502
|
||
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
115,399,502
|
|||
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
|
|||
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.1%
|
|||
|
14
|
TYPE
OF REPORTING PERSON
IN
|
|||
24
|
CUSIP No.
N/A
|
13D
|
Page 25 of 68 Pages
|
|
1
|
NAMES
OF REPORTING PERSONS
Francisca
María Cueto Ventura
|
|||
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
o
(b)
x
|
||
|
3
|
SEC
USE ONLY
|
|||
|
4
|
SOURCE
OF FUNDS
PF;
OO
|
|||
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or
2(e) o
|
|||
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Republic
of Chile
|
|||
|
NUMBER
OF
SHARES
|
7
|
SOLE
VOTING POWER
0
|
||
|
BENEFICIALLY
OWNED
BY
|
8
|
SHARED
VOTING POWER
115,399,502
|
||
|
EACH
REPORTING
PERSON
|
9
|
SOLE
DISPOSITIVE POWER
0
|
||
|
WITH
|
10
|
SHARED
DISPOSITIVE POWER
115,399,502
|
||
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
115,399,502
|
|||
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
|
|||
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.1%
|
|||
|
14
|
TYPE
OF REPORTING PERSON
IN
|
|||
25
|
CUSIP No.
N/A
|
13D
|
Page 26 of 68 Pages
|
|
1
|
NAMES
OF REPORTING PERSONS
Juan
José Cueto Ventura
|
|||
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
o
(b)
x
|
||
|
3
|
SEC
USE ONLY
|
|||
|
4
|
SOURCE
OF FUNDS
PF;
OO
|
|||
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or
2(e) o
|
|||
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Republic
of Chile
|
|||
|
NUMBER
OF
SHARES
|
7
|
SOLE
VOTING POWER
0
|
||
|
BENEFICIALLY
OWNED
BY
|
8
|
SHARED
VOTING POWER
115,399,502
|
||
|
EACH
REPORTING
PERSON
|
9
|
SOLE
DISPOSITIVE POWER
0
|
||
|
WITH
|
10
|
SHARED
DISPOSITIVE POWER
115,399,502
|
||
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
115,399,502
|
|||
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
|
|||
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.1%
|
|||
|
14
|
TYPE
OF REPORTING PERSON
IN
|
|||
26
|
CUSIP No.
N/A
|
13D
|
Page 27 of 68 Pages
|
|
1
|
NAMES
OF REPORTING PERSONS
Pedro
Cueto Sarquis
|
|||
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
o
(b)
x
|
||
|
3
|
SEC
USE ONLY
|
|||
|
4
|
SOURCE
OF FUNDS
PF;
OO
|
|||
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or
2(e) o
|
|||
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Republic
of Chile
|
|||
|
NUMBER
OF
SHARES
|
7
|
SOLE
VOTING POWER
0
|
||
|
BENEFICIALLY
OWNED
BY
|
8
|
SHARED
VOTING POWER
115,399,502
|
||
|
EACH
REPORTING
PERSON
|
9
|
SOLE
DISPOSITIVE POWER
0
|
||
|
WITH
|
10
|
SHARED
DISPOSITIVE POWER
115,399,502
|
||
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
115,399,502
|
|||
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
|
|||
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.1%
|
|||
|
14
|
TYPE
OF REPORTING PERSON
IN
|
|||
27
|
CUSIP No.
N/A
|
13D
|
Page 28 of 68 Pages
|
|
1
|
NAMES
OF REPORTING PERSONS
Juan
Cueto Sarquis
|
|||
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
o
(b)
x
|
||
|
3
|
SEC
USE ONLY
|
|||
|
4
|
SOURCE
OF FUNDS
WC;
OO
|
|||
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or
2(e) o
|
|||
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Republic
of Chile
|
|||
|
NUMBER
OF
SHARES
|
7
|
SOLE
VOTING POWER
0
|
||
|
BENEFICIALLY
OWNED
BY
|
8
|
SHARED
VOTING POWER
115,399,502
|
||
|
EACH
REPORTING
PERSON
|
9
|
SOLE
DISPOSITIVE POWER
0
|
||
|
WITH
|
10
|
SHARED
DISPOSITIVE POWER
115,399,502
|
||
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
115,399,502
|
|||
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
|
|||
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.1%
|
|||
|
14
|
TYPE
OF REPORTING PERSON
IN
|
|||
28
|
CUSIP No.
N/A
|
13D
|
Page 29 of 68 Pages
|
|
1
|
NAMES
OF REPORTING PERSONS
Antonia
Cueto Sarquis
|
|||
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
o
(b)
x
|
||
|
3
|
SEC
USE ONLY
|
|||
|
4
|
SOURCE
OF FUNDS
PF;
OO
|
|||
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or
2(e) o
|
|||
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Republic
of Chile
|
|||
|
NUMBER
OF
SHARES
|
7
|
SOLE
VOTING POWER
0
|
||
|
BENEFICIALLY
OWNED
BY
|
8
|
SHARED
VOTING POWER
115,399,502
|
||
|
EACH
REPORTING
PERSON
|
9
|
SOLE
DISPOSITIVE POWER
0
|
||
|
WITH
|
10
|
SHARED
DISPOSITIVE POWER
115,399,502
|
||
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
115,399,502
|
|||
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
|
|||
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.1%
|
|||
|
14
|
TYPE
OF REPORTING PERSON
IN
|
|||
29
|
CUSIP No.
N/A
|
13D
|
Page 30 of 68 Pages
|
|
1
|
NAMES
OF REPORTING PERSONS
Manuela
Cueto Sarquis
|
|||
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
o
(b)
x
|
||
|
3
|
SEC
USE ONLY
|
|||
|
4
|
SOURCE
OF FUNDS
PF;
OO
|
|||
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or
2(e) o
|
|||
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Republic
of Chile
|
|||
|
NUMBER
OF
SHARES
|
7
|
SOLE
VOTING POWER
0
|
||
|
BENEFICIALLY
OWNED
BY
|
8
|
SHARED
VOTING POWER
115,399,502
|
||
|
EACH
REPORTING
PERSON
|
9
|
SOLE
DISPOSITIVE POWER
0
|
||
|
WITH
|
10
|
SHARED
DISPOSITIVE POWER
115,399,502
|
||
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
115,399,502
|
|||
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
|
|||
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.1%
|
|||
|
14
|
TYPE
OF REPORTING PERSON
IN
|
|||
30
|
CUSIP No.
N/A
|
13D
|
Page 31 of 68 Pages
|
|
1
|
NAMES
OF REPORTING PERSONS
Fernanda
Cueto Délano
|
|||
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
o
(b)
x
|
||
|
3
|
SEC
USE ONLY
|
|||
|
4
|
SOURCE
OF FUNDS
PF;
OO
|
|||
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or
2(e) o
|
|||
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Republic
of Chile
|
|||
|
NUMBER
OF
SHARES
|
7
|
SOLE
VOTING POWER
0
|
||
|
BENEFICIALLY
OWNED
BY
|
8
|
SHARED
VOTING POWER
115,399,502
|
||
|
EACH
REPORTING
PERSON
|
9
|
SOLE
DISPOSITIVE POWER
0
|
||
|
WITH
|
10
|
SHARED
DISPOSITIVE POWER
115,399,502
|
||
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
115,399,502
|
|||
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
|
|||
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.1%
|
|||
|
14
|
TYPE
OF REPORTING PERSON
IN
|
|||
31
|
CUSIP No.
N/A
|
13D
|
Page 32 of 68 Pages
|
|
1
|
NAMES
OF REPORTING PERSONS
Ignacio
Cueto Délano
|
|||
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
o
(b)
x
|
||
|
3
|
SEC
USE ONLY
|
|||
|
4
|
SOURCE
OF FUNDS
PF;
OO
|
|||
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or
2(e) o
|
|||
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Republic
of Chile
|
|||
|
NUMBER
OF
SHARES
|
7
|
SOLE
VOTING POWER
0
|
||
|
BENEFICIALLY
OWNED
BY
|
8
|
SHARED
VOTING POWER
115,399,502
|
||
|
EACH
REPORTING
PERSON
|
9
|
SOLE
DISPOSITIVE POWER
0
|
||
|
WITH
|
10
|
SHARED
DISPOSITIVE POWER
115,399,502
|
||
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
115,399,502
|
|||
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
|
|||
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.1%
|
|||
|
14
|
TYPE
OF REPORTING PERSON
IN
|
|||
32
|
CUSIP No.
N/A
|
13D
|
Page 33 of 68 Pages
|
|
1
|
NAMES
OF REPORTING PERSONS
Javier
Cueto Délano
|
|||
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
o
(b)
x
|
||
|
3
|
SEC
USE ONLY
|
|||
|
4
|
SOURCE
OF FUNDS
PF;
OO
|
|||
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or
2(e) o
|
|||
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Republic
of Chile
|
|||
|
NUMBER
OF
SHARES
|
7
|
SOLE
VOTING POWER
0
|
||
|
BENEFICIALLY
OWNED
BY
|
8
|
SHARED
VOTING POWER
115,399,502
|
||
|
EACH
REPORTING
PERSON
|
9
|
SOLE
DISPOSITIVE POWER
0
|
||
|
WITH
|
10
|
SHARED
DISPOSITIVE POWER
115,399,502
|
||
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
115,399,502
|
|||
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
|
|||
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.1%
|
|||
|
14
|
TYPE
OF REPORTING PERSON
IN
|
|||
33
|
CUSIP No.
N/A
|
13D
|
Page 34 of 68 Pages
|
|
1
|
NAMES
OF REPORTING PERSONS
Pablo
Cueto Délano
|
|||
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
o
(b)
x
|
||
|
3
|
SEC
USE ONLY
|
|||
|
4
|
SOURCE
OF FUNDS
PF;
OO
|
|||
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or
2(e) o
|
|||
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Republic
of Chile
|
|||
|
NUMBER
OF
SHARES
|
7
|
SOLE
VOTING POWER
0
|
||
|
BENEFICIALLY
OWNED
BY
|
8
|
SHARED
VOTING POWER
115,399,502
|
||
|
EACH
REPORTING
PERSON
|
9
|
SOLE
DISPOSITIVE POWER
0
|
||
|
WITH
|
10
|
SHARED
DISPOSITIVE POWER
115,399,502
|
||
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
115,399,502
|
|||
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
|
|||
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.1%
|
|||
|
14
|
TYPE
OF REPORTING PERSON
IN
|
|||
34
|
CUSIP No.
N/A
|
13D
|
Page 35 of 68 Pages
|
|
1
|
NAMES
OF REPORTING PERSONS
José
Cueto Délano
|
|||
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
o
(b)
x
|
||
|
3
|
SEC
USE ONLY
|
|||
|
4
|
SOURCE
OF FUNDS
PF;
OO
|
|||
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or
2(e) o
|
|||
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Republic
of Chile
|
|||
|
NUMBER
OF
SHARES
|
7
|
SOLE
VOTING POWER
0
|
||
|
BENEFICIALLY
OWNED
BY
|
8
|
SHARED
VOTING POWER
115,399,502
|
||
|
EACH
REPORTING
PERSON
|
9
|
SOLE
DISPOSITIVE POWER
0
|
||
|
WITH
|
10
|
SHARED
DISPOSITIVE POWER
115,399,502
|
||
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
115,399,502
|
|||
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
|
|||
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.1%
|
|||
|
14
|
TYPE
OF REPORTING PERSON
IN
|
|||
35
|
CUSIP No.
N/A
|
13D
|
Page 36 of 68 Pages
|
|
1
|
NAMES
OF REPORTING PERSONS
Nieves
Isabel Alcaíno Cueto
|
|||
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
o
(b)
x
|
||
|
3
|
SEC
USE ONLY
|
|||
|
4
|
SOURCE
OF FUNDS
PF;
OO
|
|||
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or
2(e) o
|
|||
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Republic
of Chile
|
|||
|
NUMBER
OF
SHARES
|
7
|
SOLE
VOTING POWER
0
|
||
|
BENEFICIALLY
OWNED
BY
|
8
|
SHARED
VOTING POWER
115,399,502
|
||
|
EACH
REPORTING
PERSON
|
9
|
SOLE
DISPOSITIVE POWER
0
|
||
|
WITH
|
10
|
SHARED
DISPOSITIVE POWER
115,399,502
|
||
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
115,399,502
|
|||
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
|
|||
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.1%
|
|||
|
14
|
TYPE
OF REPORTING PERSON
IN
|
|||
36
|
CUSIP No.
N/A
|
13D
|
Page 37 of 68 Pages
|
|
1
|
NAMES
OF REPORTING PERSONS
María
Elisa Alcaíno Cueto
|
|||
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
o
(b)
x
|
||
|
3
|
SEC
USE ONLY
|
|||
|
4
|
SOURCE
OF FUNDS
PF;
OO
|
|||
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or
2(e) o
|
|||
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Republic
of Chile
|
|||
|
NUMBER
OF
SHARES
|
7
|
SOLE
VOTING POWER
0
|
||
|
BENEFICIALLY
OWNED
BY
|
8
|
SHARED
VOTING POWER
115,399,502
|
||
|
EACH
REPORTING
PERSON
|
9
|
SOLE
DISPOSITIVE POWER
0
|
||
|
WITH
|
10
|
SHARED
DISPOSITIVE POWER
115,399,502
|
||
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
115,399,502
|
|||
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
|
|||
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.1%
|
|||
|
14
|
TYPE
OF REPORTING PERSON
IN
|
|||
37
|
CUSIP No.
N/A
|
13D
|
Page 38 of 68 Pages
|
|
1
|
NAMES
OF REPORTING PERSONS
María
Esperanza Alcaíno Cueto
|
|||
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
o
(b)
x
|
||
|
3
|
SEC
USE ONLY
|
|||
|
4
|
SOURCE
OF FUNDS
PF;
OO
|
|||
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or
2(e) o
|
|||
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Republic
of Chile
|
|||
|
NUMBER
OF
SHARES
|
7
|
SOLE
VOTING POWER
0
|
||
|
BENEFICIALLY
OWNED
BY
|
8
|
SHARED
VOTING POWER
115,399,502
|
||
|
EACH
REPORTING
PERSON
|
9
|
SOLE
DISPOSITIVE POWER
0
|
||
|
WITH
|
10
|
SHARED
DISPOSITIVE POWER
115,399,502
|
||
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
115,399,502
|
|||
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
|
|||
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.1%
|
|||
|
14
|
TYPE
OF REPORTING PERSON
IN
|
|||
38
|
CUSIP No.
N/A
|
13D
|
Page 39 of 68 Pages
|
This Amendment No. 1 amends and
supplements the information set forth in the Schedule 13D filed by the Reporting
Persons (as defined below) with the United States Securities and Exchange
Commission on March 19, 2010 (the “Schedule 13D”). All capitalized
terms contained herein but not otherwise defined shall have the meanings given
to such terms in the Schedule 13D.
Item
1. Security and Issuer.
Item 1 of the Schedule 13D is hereby
amended and restated in its entirety as follows:
This Schedule 13D relates to the shares
of common stock, without par value (“LAN common stock”),
of Lan Airlines S.A. (“LAN”). The
address of the principal executive offices of LAN is Presidente Riesco 5711,
Suite 1604, Las Condes, Santiago, Chile.
Item
2. Identity and Background.
Item 2 of the Schedule 13D is hereby
amended and restated in its entirety as follows:
(a) This
Schedule 13D is being filed by Juan José Cueto Plaza, Ignacio Javier Cueto
Plaza, Enrique Miguel Cueto Plaza, María Esperanza Cueto Plaza, Isidora Cueto
Cazes, Felipe Jaime Cueto Ruiz-Tagle, María Emilia Cueto Ruiz- Tagle, Andrea
Raquel Cueto Ventura, Daniela Esperanza Cueto Ventura, Valentina Sara Cueto
Ventura, Alejandra Sonia Cueto Ventura, Francisca María Cueto Ventura, Juan José
Cueto Ventura, Manuela Cueto Sarquis, Pedro Cueto Sarquis, Juan Cueto Sarquis,
Antonia Cueto Sarquis, Fernanda Cueto Délano, Ignacio Cueto Délano, Javier Cueto
Délano, Pablo Cueto Délano, José Cueto Délano, Nieves Isabel Alcaíno Cueto,
María Elisa Alcaíno Cueto and María Esperanza Alcaíno Cueto (such individuals
collectively, the “Cueto Family”), Costa
Verde Aeronáutica S.A. (“Costa Verde
Aeronáutica”), Inversiones Mineras del Cantábrico S.A. (“Mineras del
Cantábrico”), Inversiones Costa Verde Limitada y Compañía en Comandita
por Acciones (“Costa
Verde Ltda. CPA”), Inversiones Costa Verde Limitada (“Costa Verde Ltda.”),
Inversiones Costa Verde Aeronáutica Limitada (“Inversiones CVA”),
Inmobiliaria e Inversiones La Espasa Limitada (“La Espasa”),
Inmobiliaria e Inversiones Caravia Limitada (“Caravia”),
Inmobiliaria e Inversiones Puerto Claro S.A. (“Puerto Claro”),
Inmobiliaria e Inversiones Priesca Limitada (“Priesca”),
Inmobiliaria e Inversiones El Fano Limitada (“El Fano”), South
Andean Investments (Chile) S.A. (“South Andean”), and
Isidora Cueto Cazes y Compañía Limitada (“Isidora Cueto Cazes y Cía
Ltda.”, and collectively with Costa Verde Ltda. CPA, Costa Verde Ltda.,
Inversiones CVA, Mineras del Cantábrico, Costa Verde Aeronáutica, La Espasa,
Caravia, Puerto Claro, Priesca, El Fano and South Andean, the “Holding Affiliates”
and together with the Cueto Family, the "Reporting
Persons"). The members of the Cueto Family, collectively, directly
and indirectly beneficially own a majority of the outstanding voting and equity
securities of the Holding Affiliates. The Reporting Persons are making
this single joint filing because, under the facts and circumstances described in
Items 2, 4, 5 and 6, they may be deemed to constitute a "group" within the
meaning of Section 13(d)(3) of the Act. As a result, each member
of the Cueto Family may be deemed to share beneficial ownership of all of the
shares of LAN common stock beneficially owned by the Reporting Persons. The
agreement among the Reporting Persons to file this Schedule 13D jointly in
accordance with Rule 13d-1(k) of the Act is attached hereto as Exhibit 99.1.
Neither the filing of this Schedule 13D nor any of its contents shall be deemed
to constitute an admission that any Reporting Person or any of its affiliates is
the beneficial owner of any Shares beneficially owned by any other Reporting
Persons for purposes of Section 13(d) of the Act or for any other
purpose.
(b) The
principal business and principal office address for the Holding Affiliates is:
Presidente Riesco 5711, Suite 1604, Las Condes, Santiago, Chile. The
principal business address for each member of the Cueto Family is: Presidente
Riesco 5711, Suite 1604, Las Condes, Santiago, Chile.
(c) The
principal business of the Holding Affiliates is to make investments in various
entities. The principal occupation or employment of each of the members of
the Cueto Family is set forth in Schedule I attached
hereto.
39
|
CUSIP No.
N/A
|
13D
|
Page 40 of 68 Pages
|
(d) The
executive officers and directors of the Holding Affiliates are set forth in
Schedule II-1 through Schedule II-11 (collectively, “Schedule II”)
attached hereto. None of the Reporting Persons, nor, to the best of their
knowledge, any of the directors or executive officers listed in Schedule II
attached hereto has, during the last five years, been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors).
(e) Except
as described below, none of the Reporting Persons, nor, to the best of their
knowledge, any of the directors or executive officers listed in Schedule II
attached hereto has, during the last five years, been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and as
a result of such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violation with
respect to such laws.
On
July 6, 2007, the Superintendencia de Valores y
Seguros (“SVS”) fined Juan José
Cueto Plaza 1,620 UF (approximately US$58,000) in connection with the purchase
of shares of LAN common stock that he carried out through Mineras del Cantábrico
on July 24, 2006. The SVS considered that such purchase had breached an
obligation not to acquire shares of LAN common stock until the financial
statements of the company became publicly available, in alleged violation of
Article 165, paragraph 1 of Law No.18,045 of October 22, 1981. The SVS ruled
that, although Mr. Cueto Plaza had not used any privileged information, LAN’s
financial statements should be considered to be privileged information per se, and thus, created a
duty to abstain from trading the securities prior to the disclosure of the
financial statements. Juan José Cueto Plaza filed a claim challenging the fine
levied by the SVS before the 27° Civil Court of Santiago, which in
turn rejected his claim on January 8, 2009. Subsequently, Juan José Cueto Plaza
filed an appeal of this judgment before the Santiago Court of Appeals, which was
rejected on March 8, 2010. Finally, on March 19, 2010, Juan José Cueto Plaza
filed a Recurso de Casación en
la Forma and a Recurso de Casación en el Fondo against the judgment
before the Chilean Supreme Court. A final decision is
pending.
(f) Each
member of the Cueto Family is a Chilean citizen.
Costa Verde Aeronáutica, is a sociedad anónima organized
under the laws of the Republic of Chile (“Chile”). Inversiones
CVA and Mineras del Cantábrico, collectively, have a majority interest in Costa
Verde Aeronáutica.
Mineras del Cantábrico, is a sociedad anónima organized
under the laws of Chile. Its shareholders are Juan José Cueto Plaza, Ignacio
Javier Cueto Plaza, Enrique Miguel Cueto Plaza, María Esperanza Cueto Plaza,
Isidora Cueto Cazes, Felipe Jaime Cueto Ruiz-Tagle, María Emilia Cueto
Ruiz-Tagle, Andrea Raquel Cueto Ventura, Daniela Esperanza Cueto Ventura,
Valentina Sara Cueto Ventura, Alejandra Sonia Cueto Ventura, Francisca María
Cueto Ventura, Juan José Cueto Ventura, Manuela Cueto Sarquis, Pedro Cueto
Sarquis, Juan Cueto Sarquis, Antonia Cueto Sarquis, Fernanda Cueto Délano,
Ignacio Cueto Délano, Javier Cueto Délano, Pablo Cueto Délano, José Cueto
Délano, Nieves Isabel Alcaíno Cueto, María Elisa Alcaíno Cueto and María
Esperanza Alcaíno Cueto.
40
|
CUSIP No.
N/A
|
13D
|
Page 41 of 68 Pages
|
Costa Verde Ltda. CPA, is a sociedad de responsabilidad limitada
y comandita por acciones organized under the laws of Chile. La
Espasa, Caravia, Puerto Claro, Priesca, El Fano and South Andean have a majority
interest in Costa Verde Ltda. CPA and its general partner is Costa Verde
Ltda. Juan José Cueto Plaza, Ignacio Javier Cueto Plaza and Enrique
Miguel Cueto Plaza, collectively, have control of Costa Verde Ltda. CPA through
their respective ownership of interests in Caravia, Priesca, El Fano and Costa
Verde Ltda, as applicable.
Costa Verde Ltda. is a sociedad de responsabilidad
limitada organized under the laws of Chile. Juan José Cueto Plaza,
Ignacio Javier Cueto Plaza and Enrique Miguel Cueto Plaza have a majority
interest in Costa Verde Ltda.
Inversiones CVA is a sociedad de responsabilidad limitada
organized under the laws of Chile. Caravia, Priesca and El
Fano, collectively, have a majority interest in Inversiones CVA.
La Espasa is a sociedad de responsabilidad
limitada organized under the laws of Chile. María Esperanza Cueto Plaza
has a majority interest in La Espasa.
Caravia is a sociedad de responsabilidad
limitada organized under the laws of Chile. Juan José Cueto Plaza has a
majority interest in Caravia.
Puerto Claro is a sociedad anónima organized
under the laws of Chile. Isidora Cueto Cazes y Cia. Ltda. has a majority
interest in Puerto Claro.
Priesca is a sociedad de responsabilidad
limitada organized under the laws of Chile. Ignacio Javier Cueto Plaza
has a majority interest in Priesca.
El Fano is a sociedad de responsabilidad
limitada organized under the laws of Chile. Enrique Miguel Cueto Plaza
has a majority interest in El Fano.
South Andean is a sociedad anónima organized
under the laws of Chile. Its shareholders are Juan José Cueto Plaza, Ignacio
Javier Cueto Plaza, Enrique Miguel Cueto Plaza, María Esperanza Cueto Plaza,
Isidora Cueto Cazes, Felipe Jaime Cueto Ruiz-Tagle, María Emilia Cueto
Ruiz-Tagle, Andrea Raquel Cueto Ventura, Daniela Esperanza Cueto Ventura,
Valentina Sara Cueto Ventura, Alejandra Sonia Cueto Ventura, Francisca María
Cueto Ventura, Juan José Cueto Ventura, Pedro Cueto Sarquis, Juan Cueto Sarquis,
Antonia Cueto Sarquis, Manuela Cueto Sarquis, Fernanda Cueto Délano, Ignacio
Cueto Délano, Javier Cueto Délano, Pablo Cueto Délano, José Cueto Délano, Nieves
Isabel Alcaíno Cueto, María Elisa Alcaíno Cueto and María Esperanza Alcaíno
Cueto.
Isidora Cueto Cazes y Cía Ltda. is a
sociedad de responsabilidad
limitada organized under the laws of Chile. Isidora Cueto Cazes, Felipe
Jaime Cueto Ruiz-Tagle and María Emilia Cueto Ruiz-Tagle have a majority
interest in Isidora Cueto Cazes y Cía Ltda.
41
|
CUSIP No.
N/A
|
13D
|
Page 42 of 68 Pages
|
Item
3. Source and Amount of Funds or Other Consideration.
Item 3 of
the Schedule 13D is hereby supplemented by adding the
following:
As
further described in Item 6 below, on December 24, 2010 Costa Verde Ltda. CPA
sold 770,342,208 shares of common stock of Costa Verde Aeronáutica, representing
approximately 99.73% of Costa Verde Aeronáutica’s outstanding shares
(collectively, the “CVA Shares”), to
Inversiones CVA for a purchase price of CLP$1,300 per CVA Share and a total
purchase price of CLP$1,001,444,864,000. Inversiones CVA
funded the purchase price for the CVA Shares in part using intercompany loans in
the amount of CLP$291,468,687,304 from each of its shareholders Priesca, Caravia
and El Fano, and funded the remainder of the purchase price using capital
contributions in equal amounts from each of Priesca, Caravia and El
Fano. The sale of the CVA Shares was conducted through an auction
under the rules of the Bolsa de Comercio de Santiago (the “Santiago Stock
Exchange”).
Item
4. Purpose of Transaction.
Item 4 of
the Schedule 13D is hereby supplemented by adding the
following:
On January 18, 2011, Costa Verde
Aeronáutica and Mineras del Cantábrico (collectively, the “LAN Controlling
Shareholders”) and LAN entered into an Implementation Agreement and
Exchange Offer Agreement (collectively, the “Transaction
Agreements”) with TAM S.A. (“TAM”), TAM
Empreendimentos e Participações S.A. (“TEP”) and Maria
Cláudia Oliveira Amaro, Maurício Rolim Amaro, Noemy Almeida Oliveira Amaro and
João Francisco Amaro (collectively, the “Amaro Family”), which
set forth the terms and conditions of a proposed business combination of LAN and
TAM.
On the terms and subject to the
conditions set forth in the Transaction Agreements, all or substantially all of
the outstanding voting common shares of TAM will be acquired by a new Chilean
corporation (“Holdco
1”) and substantially all of the outstanding non-voting preferred shares
of TAM will be acquired by LAN through a series of transactions and corporate
restructurings described below. If these transactions and corporate
restructurings are successfully completed:
42
|
CUSIP No.
N/A
|
13D
|
Page 43 of 68 Pages
|
|
|
·
|
The
Amaro Family will create and wholly own a new Chilean corporation (“TEP
Chile”);
|
|
|
·
|
TEP
Chile will acquire and hold at least 80% of the voting stock of Holdco
1(which voting stock will have no economic rights in Holdco 1 other than
nominal dividend rights);
|
|
|
·
|
LAN
will acquire no more than 20% of the voting stock of Holdco
1;
|
|
|
·
|
LAN
will acquire and hold 100% of the non-voting stock of Holdco 1 (which
non-voting stock will have substantially all of the economic rights in
Holdco 1);
|
|
|
·
|
Holdco
1 will acquire and hold all or substantially all of the voting common
shares of TAM;
|
|
|
·
|
LAN
will acquire and hold all or substantially all of the non-voting preferred
shares of TAM; and
|
|
|
·
|
LAN,
TAM, TEP Chile, Holdco 1 and the LAN Controlling Shareholders will enter
into the various shareholder agreements referred to below relating to the
holding of shares in, and the governance of, and relationships between,
LAN, Holdco 1, TAM and their respective
subsidiaries.
|
Pursuant to the Transaction Agreements,
the parties will form a new Chilean corporation (“Holdco 2”) that will
launch a delisting exchange offer pursuant to which all holders of voting common
shares of TAM and non-voting preferred shares of TAM (in each case other than
the Amaro Family) may tender such shares of TAM in exchange for shares of LAN
common stock (the “Exchange
Offer”). The exchange ratio will be 0.9 shares of LAN common
stock per TAM share (whether voting common shares or non-voting preferred
shares).
Simultaneously with the consummation of
the Exchange Offer:
|
|
·
|
The
Amaro Family will contribute to TEP Chile all of the voting common shares
of TAM and non-voting preferred shares of TAM beneficially owned
collectively by the Amaro Family;
|
|
|
·
|
TEP
Chile will contribute all of the voting ordinary shares of TAM it receives
from the Amaro Family to Holdco 1 in exchange for voting and non-voting
shares of Holdco 1;
|
|
|
·
|
TEP
Chile will contribute (i) all of the non-voting shares of Holdco 1, up to
20% of the voting shares of Holdco 1, and all of the non-voting preferred
shares of TAM to a new Chilean corporation (“Sister Holdco”)
in exchange for all of the shares of Sister Holdco (other than one share
held by a nominee of TEP Chile);
and
|
|
|
·
|
Holdco
2 and Sister Holdco will merge with and into LAN (collectively, the “Mergers”).
|
Following
the consummation of these transactions and the Mergers, both the Amaro Family
and the shareholders of TAM that tender their TAM shares in the Exchange Offer
will receive shares of LAN common stock (in the form of such shares or Brazilian
Depositary Receipts (“BDRs”) or American
Depositary Receipts (“ADRs”) representing
such shares) at the exchange ratio of 0.9 of a share of LAN common stock per TAM
share (whether voting common shares or non-voting preferred
shares).
43
|
CUSIP No.
N/A
|
13D
|
Page 44 of 68 Pages
|
The commencement of the Exchange Offer
is subject to certain conditions set forth in the Transaction Agreements,
including regulatory approvals, approval by the shareholders of LAN and the
condition that no more than 2.5% of the holders of shares of LAN common stock
shall have exercised their appraisal rights under Chilean law. The consummation
of the Exchange Offer is also subject to certain conditions set forth in the
Transaction Agreements, including minimum tender conditions sufficient under
Brazilian law to permit (i) the delisting of TAM stock from the BM&FBovespa
(“Bovespa”),
and (ii) a statutory squeeze-out under Brazilian law of all TAM shares that do
not accept the Exchange Offer, in each case after consummation of the Mergers.
In general, the delisting condition requires the tender of at least 66 2/3% of
the outstanding shares not owned by the Amaro Family and certain other insiders
and the squeeze out condition requires that LAN acquire an aggregate of more
than 95% of the outstanding TAM shares from the Amaro Family and pursuant to the
Exchange Offer. The Exchange Offer will be registered under the U.S. Securities
Act of 1933, as amended, and holders of ADRs representing TAM shares are
expected to be able to cause the ADR depositary to tender their underlying TAM
shares into the Exchange Offer.
Following the consummation of the
Mergers:
|
|
·
|
the
shares of LAN common stock will be listed in Brazil on the Bovespa in the
form of BDRs;
|
|
|
·
|
the
shares of LAN common stock will continue to be listed in Chile on the
Santiago Stock Exchange and in the United States on the New York Stock
Exchange (“NYSE”) in the
form of ADRs;
|
|
|
·
|
subject
to satisfaction of the delisting condition described above, all TAM shares
(whether voting common shares or non-voting preferred shares) will no
longer be listed in Brazil on the Bovespa or in the United States on the
NYSE in the form of ADRs; and
|
|
|
·
|
LAN’s
name will be changed to “LATAM Airlines Group
S.A.”
|
As an inducement to the other parties
to enter into the Transaction Agreements, the LAN Controlling Shareholders
agreed, until the earlier of termination of the Transaction Agreements and the
effective time of the Mergers, to vote their shares of LAN common stock in favor
of the approval of the Mergers, the proposed change of LAN’s name and the other
transactions contemplated by the Transaction Agreements and against any
alternative transaction proposal relating to LAN and any transaction that would
reasonably be expected to result in a breach by LAN of the Transaction
Agreements. The Transaction Agreements also restrict transfers of the
shares of LAN common stock beneficially owned by the Reporting Persons, except
for certain permitted transfers to affiliates as long as the transferor
continues to be, and the transferee agrees to become, bound by the terms of the
Transaction Agreements.
As a condition to the commencement of
the Exchange Offer, the Transaction Agreements also require the parties to enter
into shareholders agreements that will govern relations among LAN, TAM, TEP
Chile, Holdco 1, their respective subsidiaries and the LAN Controlling
Shareholders, including with respect to board representation, and voting and
disposition of shares of, LAN and Holdco 1, TAM and its
subsidiaries. These shareholder agreements will become effective only
upon consummation of the Mergers.
44
|
CUSIP No.
N/A
|
13D
|
Page 45 of 68 Pages
|
The shareholders agreement to be
entered into among the LAN Controlling Shareholders and TEP Chile (the “Control Group Shareholders
Agreement”) provides, among other things, the following:
|
|
·
|
Until
such time as TEP Chile sells any of its shares of LAN common stock, the
LAN Controlling Shareholders agree to vote their shares of LAN common
stock to elect to the LAN board of directors (the “LAN Board”) any
individual designated by TEP Chile unless TEP Chile beneficially owns
enough shares of LAN common stock to elect two directors to the LAN
Board;
|
|
|
·
|
The
parties agree to vote their shares of LAN common stock to assist the other
parties in removing and replacing the directors such other parties elected
to the LAN Board;
|
|
|
·
|
The
parties agree to consult with one another and use their good faith efforts
to reach an agreement and act jointly on all actions (other than actions
requiring supermajority approval under Chilean law) to be taken by the LAN
Board or the LAN shareholders; and
|
|
|
·
|
If,
after good faith efforts to reach an agreement with respect to any action
that requires supermajority approval under Chilean law and a mediation
period, the parties do not reach such an agreement then TEP Chile agrees
to vote its shares on such supermajority matter as directed by the LAN
Controlling Shareholders (each, a “Directed
Vote”).
|
The shareholders agreement to be
entered into between LAN and TEP Chile (the “LAN-TEP Shareholders
Agreement”) provides, among other things, as follows:
|
|
·
|
Maurício
Rolim Amaro will be the Chairman of the LAN Board for the two years
following the Effective Time;
|
|
|
·
|
Enrique
Miguel Cueto Plaza will remain as chief executive officer,
and Ignacio Javier Cueto Plaza will remain as the president and
chief operating officer, of LAN;
and
|
|
|
·
|
the LAN Board will establish a
strategy committee, a leadership committee, a finance committee and
a
brand, product and frequent flyer program committee to review, discuss and make
recommendations to the LAN Board and at least one director selected by TEP
Chile will serve on each committee of the LAN
Board.
|
If the holders of all of the
outstanding TAM shares (other than the Amaro Family) tender their shares in the
Exchange Offer and there are no new issuances of shares of LAN or TAM other than
pursuant to the Transaction Agreements, then after consummation of the Mergers
the issued and outstanding shares of LAN will be distributed approximately as
follows (which is reflected in the structure chart attached as Exhibit 99.9
hereto):
45
|
CUSIP No.
N/A
|
13D
|
Page 46 of 68 Pages
|
|
|
·
|
LAN
Controlling Shareholders – 24.07%
|
|
|
·
|
Other
existing shareholders of LAN –
46.60%;
|
|
|
·
|
TEP
Chile – 13.67%; and
|
|
|
·
|
Other
existing holders of TAM shares –
15.65%.
|
LAN, TEP Chile and Holdco 1 will also
enter into a shareholders agreement (the “Holdco 1 Shareholders
Agreement”) and LAN, TEP Chile, Holdco 1 and TAM will enter into a
shareholders agreement (the “TAM Shareholders
Agreement”) relating to the governance of Holdco 1 and TAM, respectively.
These shareholder agreements generally provide for identical boards of directors
and the same chief executive officer (“CEO”) at Holdco 1 and
TAM, with LAN appointing two directors and TEP Chile appointing four directors
(including the chairman of the board of directors). The Control Group
Shareholders Agreements provides that the persons elected by or on behalf of the
LAN Controlling Shareholders or TEP to the LAN Board must also serve on the
Holdco 1 and TAM Boards. There are certain actions specified in these
shareholder agreements that require supermajority approval by the board of
directors and/or shareholders of the relevant company, which effectively require
the approval of LAN and TEP Chile before the specified actions can be taken.
These supermajority actions include, among others, dissolution, liquidation,
winding up, transformation, merger, or spin-off of the company, issuance or
reduction of capital, change of the company’s purpose, and transactions with
related parties or in excess of certain defined thresholds. Marco Bologna,
currently the CEO of TAM, will be the initial CEO of Holdco 1 and TAM and any
successor CEO will be selected by LAN from three candidates proposed by TEP
Chile. The initial chief financial officer (“CFO”) of TAM will be
jointly selected by LAN and TEP Chile and any successor CFO will be selected by
TEP Chile from three candidates proposed by LAN. The initial chief operating
officer and chief commercial officer of TAM will be jointly selected and
recommended to the TAM board of directors by the TAM CEO and TAM CFO and
approved by such board of directors. These shareholder agreements also regulate
the composition of the boards of directors of subsidiaries of TAM.
Copies of the Transaction Agreements,
the Control Group Shareholders Agreement, the LAN-TEP Shareholders Agreement,
the Holdco 1 Shareholders Agreement and the TAM Shareholders Agreement
(collectively, the “TAM Agreements”) are
attached hereto as Exhibits 99.3 through Exhibit 99.8, and each TAM Agreement is
incorporated herein by reference. The summaries of the TAM Agreements
contained in this Schedule are qualified in their entirety by reference to the
full versions of the TAM Agreements attached as exhibits hereto.
Except as
set forth above, none of the Reporting Persons has any plan or proposal which
relates to or would result in any of the transactions described in subparagraphs
(a) through (j) of Item 4 of Schedule 13D, although the Reporting Persons
reserve the right to do so.
As
further described in Item 6 below, on December 24, 2010 the Reporting Persons
completed a reorganization of the holding structure of Costa Verde Aeronáutica
through the sale of the CVA Shares by Costa Verde Ltda. CPA to Inversiones
CVA. No change in control occurred as a result of this restructuring
as Enrique Miguel Cueto Plaza, Juan José Cueto Plaza and Ignacio Javier Cueto
Plaza continue to jointly control Costa Verde Aeronáutica and LAN indirectly
through their indirect ownership of the CVA Shares. The
reorganization was intended to simplify the holding structure of Costa Verde
Aeronáutica to facilitate the control of Costa Verde Aeronáutica and
LAN by Enrique Miguel Cueto Plaza, Juan José Cueto Plaza and Ignacio Javier
Cueto Plaza and the relationship between Costa Verde Aeronáutica, Mineras del
Cantábrico and TEP Chile in respect of the governance of LAN should the proposed
business combination of LAN and TAM contemplated in the Transaction Agreements
be completed.
46
|
CUSIP No.
N/A
|
13D
|
Page 47 of 68 Pages
|
Item
5. Interest in Securities of the Issuer.
Items
5(a) and 5(b) of the Schedule 13D are hereby amended and restated in their
entirety as follows:
|
(a)
|
The
Reporting Persons may be deemed to be a group within the meaning of
Section 13(d)(3) of the Act consisting of the Reporting Persons as a
result of the facts and circumstances described in Items 2, 4, 5 and 6 of
this Schedule 13D. The Reporting Persons as a group may be deemed
beneficially to own 115,399,502 shares of LAN common stock, representing
approximately 34.1% of the outstanding shares of LAN common stock (based
on 338,790,909 shares of LAN common stock outstanding as of December 31,
2009 as set forth in LAN’s Report of Results for Year 2009 and Fourth
Quarter of 2009). Neither the filing of this Schedule 13D nor any of
its contents shall be deemed to constitute an admission that any Reporting
Person or any of its affiliates is the beneficial owner of any shares of
LAN common stock beneficially owned by any other Reporting Persons for
purposes of Section 13(d) of the Act or for any other
purpose.
|
|
(b)
|
Decisions
with respect to the voting and disposition of the shares of LAN common
stock beneficially owned by the Reporting Persons are governed by the
organizational documents and other governing documents applicable to the
Holding Affiliates (collectively, the “Holdings
Instruments”). Pursuant to the Holdings Instruments, the
Reporting Persons share the power to vote or to direct the vote and to
dispose or to direct the disposition of the 115,399,502 shares of LAN
common stock that are directly or indirectly beneficially owned by
them.
|
Item
6. Contracts, Arrangements, Understandings or Relationships with Respect to
Securities of the Issuer.
The first paragraph of Item 6 of the Schedule
13D is hereby amended and restated in its entirety as follows:
Items 2,
4 and 5 disclose certain relationships among the Reporting Persons and between
the Reporting Persons and certain other persons with respect to the shares of
LAN common stock, which disclosures are hereby incorporated by reference into
this Item 6 in their entirety. Other than the TAM Agreements and the Holdings
Instruments and as described in Item 4 above, this Item 6 and Item 7 below,
there are no contracts, arrangements or understandings among the Reporting
Persons and between the Reporting Persons and any other person with respect to
securities of LAN. The members of the Cueto Family are related as follows:
Messrs. Juan José Cueto Plaza, Ignacio Javier Cueto Plaza, Enrique Miguel Cueto
Plaza and Ms. María Esperanza Cueto Plaza are siblings, and Isidora Cueto Cazes,
Felipe Jaime Cueto Ruiz-Tagle, María Emilia Cueto Ruiz-Tagle, being siblings
among themselves, are their nieces and nephew. Mr. Enrique Miguel Cueto Plaza is
the father of Andrea Raquel Cueto Ventura, Daniela Esperanza Cueto Ventura,
Valentina Sara Cueto Ventura, Alejandra Sonia Cueto Ventura, Francisca María
Cueto Ventura and Juan José Cueto Ventura. Mr. Juan José Cueto Plaza is the
father of Manuela Cueto Sarquis, Pedro Cueto Sarquis, Juan Cueto Sarquis and
Antonia Cueto Sarquis. Mr. Ignacio Javier Cueto Plaza is the father of Fernanda
Cueto Délano, Ignacio Cueto Délano, Javier Cueto Délano, Pablo Cueto Délano,
José Cueto Délano. Ms. María Esperanza Cueto Plaza is the mother of Nieves
Isabel Alcaíno Cueto, María Elisa Alcaíno Cueto and María Esperanza Alcaíno
Cueto. The Holding Affiliates are directly and indirectly beneficially owned by
the members of the Cueto Family, collectively. As discussed above under Item
5(b), decisions with respect to the voting and disposition of the shares of LAN
common stock beneficially owned by the Reporting Persons are governed by the
Holdings Instruments. Pursuant to the Holdings Instruments, the
Reporting Persons share the power to vote or to direct the vote and to dispose
or to direct the disposition of the shares of LAN common stock that are directly
or indirectly beneficially owned by them.
47
|
CUSIP No.
N/A
|
13D
|
Page 48 of 68 Pages
|
The last
paragraph of Item 6
of the Schedule 13D is hereby amended and restated in its entirety as
follows:
Joint
Filing Agreement
Pursuant
to Rule 13d-1(k) promulgated under the Act, the Reporting Persons have
entered into a Joint Filing Agreement with respect to the joint filing of the
Schedule 13D and any amendment or amendments thereto. The Joint Filing
Agreement is attached hereto as Exhibit 99.1 and incorporated herein by
reference. The foregoing summary of the Joint Filing Agreement is
qualified in its entirety by reference to the Joint Filing
Agreement.
Item 6 of
the Schedule 13D is hereby supplemented by adding the following at the end
thereof:
Restructuring
On December 24, 2010, Costa Verde Ltda.
CPA sold the CVA Shares to Inversiones CVA for a purchase price of CLP$1,300 per
CVA Share and a total purchase price
of CLP$1,001,444,864,000. The sale of the CVA Shares was
conducted through an auction under the rules of the Santiago Stock
Exchange. As discussed above under Item 2, each of El Fano,
Priesca and Caravia hold shares representing 33% of Inversiones CVA’s
outstanding shares and the remaining 1% of Inversiones CVA’s outstanding shares
are owned by Costa Verde Ltda. CPA, which holds .09% of such shares, and Costa
Verde Ltda., which holds the remaining 0.1% of such
shares. Enrique Miguel Cueto Plaza, Juan José Cueto Plaza and
Ignacio Javier Cueto Plaza, collectively, own a majority interest in Inversiones
CVA indirectly through their respective ownership of interests in Caravia,
Priesca, El Fano and Costa Verde Ltda., as applicable, and will continue to
jointly control Costa Verde Aeronáutica and LAN indirectly through their
indirect ownership of the CVA Shares. The reorganization was intended
to simplify the holding structure of Costa Verde Aeronáutica so as to facilitate
the control of Costa Verde Aeronáutica and LAN by Enrique Miguel
Cueto Plaza, Juan José Cueto Plaza and Ignacio Javier Cueto Plaza and the
relationship between Costa Verde Aeronáutica, Mineras del Cantábrico and TEP in
respect of the governance of the LAN should the proposed business combination of
LAN and TAM described in Item 4 be consummated. As of the date
hereof, Costa Verde Aeronáutica is the owner of 107,575,407 shares of LAN common
stock representing approximately 31.75% of the outstanding shares of LAN common
stock.
Transaction
Agreements
Pursuant to the Transaction Agreements,
the parties have agreed not to, and to cause their respective affiliates and
representatives not to, directly or indirectly, (i) solicit, initiate or
encourage any inquiries or the making or consummation of any proposal or offer
that constitutes, or is reasonably likely to lead to, an Alternative Proposal
with respect to LAN (in the case of LAN and the LAN Controlling Shareholders) or
TAM (in the case of TEP and the Amaro Family), (ii) engage in, continue or
otherwise participate in any discussions or negotiations regarding, or provide
to any person any non-public information or data in connection with, or
otherwise cooperate in any way with, any such Alternative Proposal,
(iii) waive, terminate, modify or fail to enforce any provision of any
“standstill” or similar obligation of any person, (iv) enter into any
binding or non-binding contract with respect to any such Alternative Proposal or
(v) otherwise knowingly facilitate any effort or attempt to make any such
Alternative Proposal. The term “Alternative Proposal”
is generally defined in the Transaction Agreements to mean, with respect to LAN
or TAM, as applicable, any of the following actions or any proposal or offer by
any person or group relating to, or that could reasonably be expected to lead
to, any of the following: (i) any direct or indirect acquisition, lease,
license or outsourcing, in one transaction or a series of related transactions,
of any assets, services or businesses of such person or any of its subsidiaries
collectively representing more than 25% of the fair market value of the total
assets of such person or collectively generating or contributing 25% or more of
the total consolidated revenues or operating income of such person during the
last fiscal year, (ii) any tender offer or exchange offer that, if
consummated, would result in any person or group beneficially owning any equity
securities of such person, or (iii) any business combination,
recapitalization, issuance or amendment of securities, liquidation, dissolution,
joint venture, share exchange or similar transaction involving such person or
any of its subsidiaries.
Control Group Shareholders
Agreement
Pursuant to the Control Group
Shareholders Agreement, the LAN Controlling Shareholders and TEP Chile are
subject to certain restrictions on sales, transfers and pledges of the shares of
LAN common stock and (in the case of TEP Chile only) the voting shares of Holdco
1 beneficially owned by them. Except for a limited amount of shares
of LAN common stock, neither the LAN Controlling Shareholders nor TEP Chile may
sell any of its shares of LAN common stock and TEP Chile may not sell its voting
shares of Holdco 1 until the third anniversary of the consummation of the
Mergers. Thereafter, sales of shares of LAN common stock by either party are
permitted, subject to (i) certain limitations on the volume and frequency of
sales and (ii) in the case of TEP Chile only, certain minimum ownership
requirements. After the tenth anniversary of the consummation of the Mergers,
TEP Chile may sell all of its shares of LAN common stock and voting shares of
Holdco 1 as a block, subject to (x) approval of the transferee by the LAN Board,
(y) the condition that the sale not have a material adverse effect on LAN’s and
Holdco 1’s ownership of TAM and its subsidiaries or the ability of TAM and its
subsidiaries to operate their airline businesses worldwide (an “Adverse Effect”) and
(z) a right of first offer in favor of the LAN Controlling Shareholders
(collectively, the “Block Sale
Provisions”). The LAN Controlling Shareholders have agreed to transfer
any voting shares of Holdco 1 acquired pursuant to such right of first offer to
LAN for the same consideration paid for such shares. The Block Sale Provisions
will also apply to any transfer by TEP Chile of shares of LAN common stock or
voting shares of Holdco 1 beneficially owned by it after the third anniversary
of the consummation of the Mergers if Release Event (as described below) occurs
or if TEP Chile is required to make two or more Directed Votes during any
twenty-four month period at two meetings (consecutive or not) of the
shareholders of LAN held at least twelve months apart and LAN has not yet fully
exercised its conversion option described below. A Release Event will occur if
(i) a capital increase of LAN occurs, (ii) TEP Chile does not fully exercise the
preemptive rights granted to it under applicable Law in Chile with respect to
such capital increase in respect of all of its restricted shares of LAN common
stock, and (iii) after such capital increase is completed, the individual
designated by TEP Chile for election to the LAN Board with the assistance of the
LAN Controlling Shareholders is not elected to the LAN Board. There are
exceptions to these restrictions on transfer for certain pledges of LAN common
stock made by the parties and for transfers to affiliates, in each case under
certain limited circumstances. LAN has the unilateral right to convert its
shares of non-voting stock of Holdco 1 into shares of voting stock of Holdco 1
to the maximum extent allowed under law and to increase its representation on
the TAM and Holdco 1 boards if and when permitted in accordance with foreign
ownership control laws in Brazil and other applicable laws. If on or
after the tenth anniversary of the consummation of the Mergers, LAN fully
converts all of its shares of non-voting stock of Holdco 1 into shares of voting
stock of Holdco 1 as permitted by Brazilian law and other applicable laws, then
it has the right to purchase all of the voting shares of Holdco 1 held by the
Amaro Family for an amount equal to their then current tax basis in such shares
and any costs incurred by them to effect such sale (the “Sale
Consideration”). If LAN does not timely exercise its right to
purchase these shares or if, after the tenth anniversary of the consummation of
the Mergers, LAN has the right under applicable Law in Brazil and other
applicable Law to fully convert all the shares of non-voting stock of Holdco 1
beneficially owned by it into shares of voting stock of Holdco 1 and such
conversion would not have an Adverse Effect but LAN has not fully exercised such
right within a specified period, then the Amaro Family will have the right to
put their shares of voting stock of Holdco 1 to LAN for an amount equal to the
Sale Consideration.
48
|
CUSIP No.
N/A
|
13D
|
Page 49 of 68 Pages
|
Item
7. Material to Be Filed as Exhibits.
|
Exhibit
99.1.
|
Joint
Filing Agreement, dated January 21, 2011, by and among the Reporting
Persons.
|
|
|
Exhibit
99.2.
|
Power
of Attorney, dated January 21, 2011, by Ignacio Javier Cueto Plaza,
Enrique Miguel Cueto Plaza, María Esperanza Cueto Plaza, Isidora Cueto
Cazes, Felipe Jaime Cueto Ruiz-Tagle, María Emilia Cueto Ruiz- Tagle,
Andrea Raquel Cueto Ventura, Daniela Esperanza Cueto Ventura, Valentina
Sara Cueto Ventura, Alejandra Sonia Cueto Ventura, Francisca María Cueto
Ventura, Juan José Cueto Ventura, Manuela Cueto Sarquis, Pedro Cueto
Sarquis, Juan Cueto Sarquis, Antonia Cueto Sarquis, Fernanda Cueto Délano,
Ignacio Cueto Délano, Javier Cueto Délano, Pablo Cueto Délano, José Cueto
Délano, Nieves Isabel Alcaíno Cueto, María Elisa Alcaíno Cueto, María
Esperanza Alcaíno Cueto, Inversiones Mineras del Cantábrico S.A., Costa
Verde Aeronáutica S.A., Inversiones Costa Verde Limitada y Compañía
en Comandita por Acciones, Inversiones Costa Verde Limitada, Inversiones
Costa Verde Aeronáutica Limitada, Inmobiliaria e Inversiones La Espasa
Limitada, Inmobiliaria e Inversiones Caravia Limitada, Inmobiliaria e
Inversiones Puerto Claro S.A., Inmobiliaria e Inversiones Priesca
Limitada, Inmobiliaria e Inversiones El Fano Limitada, South Andean
Investments (Chile) S.A. and Isidora Cueto Cazes y Compañía
Limitada.
|
|
|
Exhibit
99.3
|
Implementation
Agreement, dated as of January 18, 2011, among Lan Airlines S.A., Costa
Verde Aeronáutica S.A., Inversiones Mineras del Cantábrico S.A., TAM
S.A., TAM Empreendimentos e Participações S.A. and Maria Cláudia Oliveira
Amaro, Maurício Rolim Amaro, Noemy Almeida Oliveira Amaro and João
Francisco Amaro,
|
|
|
Exhibit
99.4
|
Exchange
Offer Agreement, dated as of January 18, 2011, among Lan Airlines S.A.,
Costa Verde Aeronáutica S.A., Inversiones Mineras del Cantábrico
S.A., TAM S.A., TAM Empreendimentos e Participações S.A. and Maria Cláudia
Oliveira Amaro, Maurício Rolim Amaro, Noemy Almeida Oliveira Amaro and
João Francisco Amaro,
|
|
|
Exhibit
99.5
|
Form
of Control Group Shareholders Agreement to be entered into among Costa
Verde Aeronáutica S.A., Inversiones Mineras del Cantábrico S.A. and
TEP Chile S.A.
|
|
|
Exhibit
99.6
|
Form
of LAN-TEP Shareholders Agreement to be entered into between Lan Airlines
S.A. and TEP Chile S.A.
|
|
|
Exhibit
99.7
|
Form
of Holdco 1 Shareholders Agreement to be entered into among Lan Airlines
S.A., TEP Chile S.A. and [Holdco 1]
|
|
|
Exhibit
99.8
|
Form
of TAM Shareholders Agreement to be entered into among Lan Airlines S.A.,
TEP Chile S.A., [Holdco 1] and TAM S.A.
|
|
|
Exhibit
99.9
|
Organizational
Structure Chart
|
49
|
CUSIP No.
N/A
|
13D
|
Page 50 of 68 Pages
|
SIGNATURE
After
reasonable inquiry and to the best of our knowledge and belief, I certify that
the information set forth in this statement is true, complete and
correct.
|
JUAN
JOSÉ CUETO PLAZA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
January
21, 2011
|
IGNACIO
JAVIER CUETO PLAZA
|
||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
ENRIQUE
MIGUEL CUETO PLAZA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name:
Juan José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
MARÍA
ESPERANZA CUETO PLAZA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
ISIDORA
CUETO CAZES
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
FELIPE
JAIME CUETO RUIZ-TAGLE
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
MARÍA
EMILIA CUETO RUIZ-TAGLE
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
50
|
CUSIP No.
N/A
|
13D
|
Page 51 of 68 Pages
|
|
ANDREA
RAQUEL CUETO VENTURA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
DANIELA
ESPERANZA CUETO VENTURA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
VALENTINA
SARA CUETO VENTURA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
ALEJANDRA
SONIA CUETO VENTURA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
FRANCISCA
MARÍA CUETO VENTURA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
JUAN
JOSÉ CUETO VENTURA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
MANUELA
CUETO SARQUIS
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
PEDRO
CUETO SARQUIS
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
51
|
CUSIP No.
N/A
|
13D
|
Page 52 of 68 Pages
|
|
JUAN
CUETO SARQUIS
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
ANTONIA
CUETO SARQUIS
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
FERNANDA
CUETO DÉLANO
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
IGNACIO
CUETO DÉLANO
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
JAVIER
CUETO DÉLANO
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
PABLO
CUETO DÉLANO
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
JOSÉ
CUETO DÉLANO
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
NIEVES
ISABEL ALCAÍNO CUETO
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
52
|
CUSIP No.
N/A
|
13D
|
Page 53 of 68 Pages
|
|
MARÍA
ELISA ALCAÍNO CUETO
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
MARÍA
ESPERANZA ALCAÍNO CUETO
|
|||
|
January
21, 2011
|
By:
|
/s/ Juan
José Cueto Plaza
|
|
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
INVERSIONES
MINERAS DEL CANTABRICO S.A.
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
January
21, 2011
|
COSTA
VERDE AERONÁUTICA S.A.
|
||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
January
21, 2011
|
INVERSIONES
COSTA VERDE LIMITADA Y COMPAÑÍA EN COMANDITA POR
ACCIONES
|
||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
INVERSIONES
COSTA VERDE LIMITADA
|
|||
|
January
21, 2011
|
By:
|
/s/ Juan
José Cueto Plaza
|
|
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
53
|
CUSIP No.
N/A
|
13D
|
Page 54 of 68 Pages
|
|
INVERSIONES
COSTA VERDE AERONÁUTICA LIMITADA
|
|||
|
January
21, 2011
|
By:
|
/s/ Juan
José Cueto Plaza
|
|
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
January
21, 2011
|
INMOBILIARIA E INVERSIONES LA ESPASA LIMITADA | ||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
INMOBILIARIA
E INVERSIONES CARAVIA LIMITADA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
INMOBILIARIA
E INVERSIONES PUERTO CLARO S.A.
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
INMOBILIARIA
E INVERSIONES PRIESCA LIMITADA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
INMOBILIARIA
E INVERSIONES EL FANO LIMITADA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
SOUTH
ANDEAN INVESTMENTS (CHILE) S.A.
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
ISIDORA
CUETO CAZES Y COMPAÑIA LIMITADA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
54
|
CUSIP No.
N/A
|
13D
|
Page 55 of 68 Pages
|
Index of Exhibits
|
Exhibit
99.1.
|
Joint
Filing Agreement, dated January 21, 2011, by and among the Reporting
Persons.
|
|
|
Exhibit
99.2.
|
Power
of Attorney, dated January 21, 2011, by Ignacio Javier Cueto Plaza,
Enrique Miguel Cueto Plaza, María Esperanza Cueto Plaza, Isidora Cueto
Cazes, Felipe Jaime Cueto Ruiz-Tagle, María Emilia Cueto Ruiz- Tagle,
Andrea Raquel Cueto Ventura, Daniela Esperanza Cueto Ventura, Valentina
Sara Cueto Ventura, Alejandra Sonia Cueto Ventura, Francisca María Cueto
Ventura, Juan José Cueto Ventura, Manuela Cueto Sarquis, Pedro Cueto
Sarquis, Juan Cueto Sarquis, Antonia Cueto Sarquis, Fernanda Cueto Délano,
Ignacio Cueto Délano, Javier Cueto Délano, Pablo Cueto Délano, José Cueto
Délano, Nieves Isabel Alcaíno Cueto, María Elisa Alcaíno Cueto, María
Esperanza Alcaíno Cueto, Inversiones Mineras del Cantábrico S.A., Costa
Verde Aeronáutica S.A., Inversiones Costa Verde Limitada y Compañía
en Comandita por Acciones, Inversiones Costa Verde Limitada, Inversiones
Costa Verde Aeronáutica Limitada, Inmobiliaria e Inversiones La Espasa
Limitada, Inmobiliaria e Inversiones Caravia Limitada, Inmobiliaria e
Inversiones Puerto Claro S.A., Inmobiliaria e Inversiones Priesca
Limitada, Inmobiliaria e Inversiones El Fano Limitada, South Andean
Investments (Chile) S.A. and Isidora Cueto Cazes y Compañía
Limitada.
|
|
|
Exhibit
99.3
|
Implementation
Agreement, dated as of January 18, 2011, among Lan Airlines S.A., Costa
Verde Aeronáutica S.A., Inversiones Mineras del Cantábrico S.A., TAM
S.A., TAM Empreendimentos e Participações S.A. and Maria Cláudia Oliveira
Amaro, Maurício Rolim Amaro, Noemy Almeida Oliveira Amaro and João
Francisco Amaro,
|
|
|
Exhibit
99.4
|
Exchange
Offer Agreement, dated as of January 18, 2011, among Lan Airlines S.A.,
Costa Verde Aeronáutica S.A., Inversiones Mineras del Cantábrico
S.A., TAM S.A., TAM Empreendimentos e Participações S.A. and Maria Cláudia
Oliveira Amaro, Maurício Rolim Amaro, Noemy Almeida Oliveira Amaro and
João Francisco Amaro,
|
|
|
Exhibit
99.5
|
Form
of Control Group Shareholders Agreement to be entered into among Costa
Verde Aeronáutica S.A., Inversiones Mineras del Cantábrico S.A. and
TEP Chile S.A.
|
|
|
Exhibit
99.6
|
Form
of LAN-TEP Shareholders Agreement proposed to be entered into between Lan
Airlines S.A. and TEP Chile S.A.
|
|
|
Exhibit
99.7
|
Form
of Holdco 1 Shareholders Agreement to be entered into among Lan Airlines
S.A., TEP Chile S.A. and [Holdco 1]
|
|
|
Exhibit
99.8
|
Form
of TAM Shareholders Agreement to be entered into among Lan Airlines S.A.,
TEP Chile S.A., [Holdco 1] and TAM S.A.
|
|
|
Exhibit
99.9
|
Organizational
Structure Chart
|
55
|
CUSIP No.
N/A
|
13D
|
Page 56 of 68 Pages
|
SCHEDULE
I
THE
CUETO FAMILY
All of
the individuals listed below are citizens of Chile.
|
Name
|
Principal
Occupation
|
|
Juan
José Cueto Plaza
|
Director
of Lan Airlines S.A.
Director
of Costa Verde Aeronáutica S.A.
Director
of Minera Michilla S.A.
|
|
Ìgnacio
Javier Cueto Plaza
|
Chief
Executive Officer of Lan Airlines S.A.
|
|
Enrique
Miguel Cueto Plaza
|
Executive
Vice President of Lan Airlines S.A.
|
|
María
Esperanza Cueto Plaza
|
Director
of Prodemu
President
of Comunidad Mujer
|
|
Isidora
Cueto Cazes
|
Student
|
|
Felipe
Jaime Cueto Ruiz- Tagle
|
Student
|
|
María
Emilia Cueto Ruiz- Tagle
|
Student
|
|
Andrea
Raquel Cueto Ventura
|
Student
|
|
Daniela
Esperanza Cueto Ventura
|
Student
|
|
Valentina
Sara Cueto Ventura
|
Student
|
|
Alejandra
Sonia Cueto Ventura
|
Student
|
|
Francisca
María Cueto Ventura
|
Student
|
|
Juan
José Cueto Ventura
|
Student
|
|
Manuela
Cueto Sarquis
|
Student
|
|
Pedro
Cueto Sarquis
|
Student
|
|
Juan
Cueto Sarquis
|
Student
|
|
Antonia
Cueto Sarquis
|
Student
|
|
Fernanda
Cueto Délano
|
Student
|
|
Ignacio
Cueto Délano
|
Student
|
|
Javier
Cueto Délano
|
Student
|
|
Pablo
Cueto Délano
|
Student
|
|
José
Cueto Délano
|
Student
|
|
Nieves
Isabel Alcaíno Cueto
|
Student
|
|
María
Elisa Alcaíno Cueto
|
Student
|
|
María
Esperanza Alcaíno Cueto
|
Student
|
56
|
CUSIP No.
N/A
|
13D
|
Page 57 of 68 Pages
|
SCHEDULE
II-1
Costa
Verde Aeronáutica S.A.
Presidente
Riesco 5711, Suite 1604, Las Condes, Santiago, Chile
All of
the individuals listed below are citizens of Chile.
|
Name
and Position
|
Principal
Occupation
|
|
Directors
|
|
|
Hernán
Morales Valdés
|
Lawyer
and general counsel of Costa Verde
Aeronáutica S.A.
|
|
Juan
José Cueto Plaza
|
Director
of Lan Airlines S.A.
Director
of Costa Verde Aeronáutica S.A.
Director
of Minera Michilla S.A.
|
|
Juan
José Cueto Sierra
|
Director
of Lan Airlines S.A.
Director
of Costa Verde Aeronáutica S.A.
|
|
Matias
Herrera Rahilly
|
Degree
in Business Administration
|
|
Luis
Alberto Ortega Muñoz
|
Public
Accountant
|
|
Executive
Officer
|
|
|
Carlos
Vallette Gudenschwager
|
Chief
Executive Officer
|
57
|
CUSIP No.
N/A
|
13D
|
Page 58 of 68 Pages
|
SCHEDULE II-
2
Inversiones
Mineras del Cantábrico S.A.
Presidente
Riesco 5711, Suite 1604, Las Condes, Santiago, Chile
All of
the individuals listed below are citizens of Chile.
|
Name
and Position
|
Principal
Occupation
|
|
Directors
|
|
|
Juan
José Cueto Plaza
|
Director
of Lan Airlines S.A.
Director
of Costa Verde Aeronáutica S.A.
Director
of Minera Michilla S.A.
|
|
Juan
José Cueto Sierra
|
Director
of Lan Airlines S.A.
Director
of Costa Verde Aeronáutica S.A.
|
|
Matias
Herrera Rahilly
|
Degree
in Business Administration
|
|
Francisco
Javier Ovalle Fuenzalida
|
Degree
in Business Administration.
|
|
Hernán
Morales Valdés
|
Lawyer
and general counsel of Costa Verde
Aeronáutica S.A.
|
|
Executive
Officer
|
|
|
Carlos
Vallette Gudenschwager
|
Chief
Executive Officer
|
58
|
CUSIP No.
N/A
|
13D
|
Page 59 of 68 Pages
|
SCHEDULE II-
3
Inversiones
Costa Verde Limitada y Compañía en Comandita por Acciones
Presidente
Riesco 5711, Suite 1604, Las Condes, Santiago, Chile
This is a
limited partnership managed by its general partner, Inversiones Costa Verde
Limitada.
59
|
CUSIP No.
N/A
|
13D
|
Page 60 of 68 Pages
|
SCHEDULE II-
4
Inversiones
Costa Verde Limitada
Presidente
Riesco 5711, Suite 1604, Las Condes, Santiago, Chile
All of
the individuals listed below are citizens of Chile.
|
Name
and Position
|
Principal
Occupation
|
|
Managers
|
|
|
Juan
José Cueto Plaza
|
Director
of Lan Airlines S.A.
Director
of Costa Verde Aeronáutica S.A.
Director
of Minera Michilla S.A.
|
|
Enrique
Miguel Cueto Plaza
|
Executive
Vice President of Lan Airlines S.A.
|
|
Ignacio
Javier Cueto Plaza
|
Chief
Executive Officer of Lan Airlines
S.A.
|
60
|
CUSIP No.
N/A
|
13D
|
Page 61 of 68 Pages
|
Inversiones
Costa Verde Aeronáutica Limitada
Presidente
Riesco 5711, Suite 1604, Las Condes, Santiago, Chile
All of
the individuals listed below are citizens of Chile.
|
Name
and Position
|
Principal
Occupation
|
|
Managers
|
|
|
Juan
José Cueto Plaza
|
Director
of Lan Airlines S.A.
Director
of Costa Verde Aeronáutica S.A.
Director
of Minera Michilla S.A.
|
|
Enrique
Miguel Cueto Plaza
|
Executive
Vice President of Lan Airlines S.A.
|
|
Ignacio
Javier Cueto Plaza
|
Chief
Executive Officer of Lan Airlines
S.A.
|
61
|
CUSIP No.
N/A
|
13D
|
Page 62 of 68 Pages
|
SCHEDULE II-
5
Inmobiliaria
e Inversiones La Espasa Limitada
Presidente
Riesco 5711, Suite 1604, Las Condes, Santiago, Chile
All of
the individuals listed below are citizens of Chile.
|
Name
and Position
|
Principal
Occupation
|
|
Directors
|
|
|
María
Esperanza Cueto Plaza
|
Director
of Prodemu
President
of Comunidad Mujer
|
|
Juan
José Cueto Plaza
|
Director
of Lan Airlines S.A.
Director
of Costa Verde Aeronáutica S.A.
Director
of Minera Michilla S.A.
|
|
Enrique
Miguel Cueto Plaza
|
Executive
Vice President of Lan Airlines
S.A.
|
62
|
CUSIP No.
N/A
|
13D
|
Page 63 of 68 Pages
|
SCHEDULE II-
6
Inmobiliaria
e Inversiones Caravia Limitada
Presidente
Riesco 5711, Suite 1604, Las Condes, Santiago, Chile
All of
the individuals listed below are citizens of Chile.
|
Name
and Position
|
Principal
Occupation
|
|
Managers
|
|
|
Juan
José Cueto Plaza
|
Director
of Lan Airlines S.A.
Director
of Costa Verde Aeronáutica S.A.
Director
of Minera Michilla S.A.
|
|
Enrique
Miguel Cueto Plaza
|
Executive
Vice President of Lan Airlines S.A.
|
|
Ignacio
Javier Cueto Plaza
|
Chief
Executive Officer of Lan Airlines
S.A.
|
63
|
CUSIP No.
N/A
|
13D
|
Page 64 of 68 Pages
|
SCHEDULE II-
7
Inmobiliaria
e Inversiones Puerto Claro S.A.
Presidente
Riesco 5711, Suite 1604, Las Condes, Santiago, Chile
All of
the individuals listed below are citizens of Chile.
|
Name
and Position
|
Principal
Occupation
|
|
Directors
|
|
|
Juan
José Cueto Plaza
|
Director
of Lan Airlines S.A.
Director
of Costa Verde Aeronáutica S.A.
Director
of Minera Michilla S.A.
|
|
Enrique
Miguel Cueto Plaza
|
Executive
Vice President of Lan Airlines S.A.
|
|
Ignacio
Javier Cueto Plaza
|
Chief
Executive Officer of Lan Airlines S.A.
|
|
Executive
Officer
|
|
|
Juan
José Cueto Plaza
|
Chief
Executive Officer
|
64
|
CUSIP No.
N/A
|
13D
|
Page 65 of 68 Pages
|
SCHEDULE II-
8
Inmobiliaria
e Inversiones Priesca Limitada
Presidente
Riesco 5711, Suite 1604, Las Condes, Santiago, Chile
All of
the individuals listed below are citizens of Chile.
|
Name
and Position
|
Principal
Occupation
|
|
Managers
|
|
|
Juan
José Cueto Plaza
|
Director
of Lan Airlines S.A.
Director
of Costa Verde Aeronáutica S.A.
Director
of Minera Michilla S.A.
|
|
Enrique
Miguel Cueto Plaza
|
Executive
Vice President of Lan Airlines S.A.
|
|
Ignacio
Javier Cueto Plaza
|
Chief
Executive Officer of Lan Airlines
S.A.
|
65
|
CUSIP No.
N/A
|
13D
|
Page 66 of 68 Pages
|
SCHEDULE II-
9
Inmobiliaria
e Inversiones El Fano Limitada
Presidente
Riesco 5711, Suite 1604, Las Condes, Santiago, Chile
All of
the individuals listed below are citizens of Chile.
|
Name
and Position
|
Principal
Occupation
|
|
Managers
|
|
|
Juan
José Cueto Plaza
|
Director
of Lan Airlines S.A.
Director
of Costa Verde Aeronáutica S.A.
Director
of Minera Michilla S.A.
|
|
Enrique
Miguel Cueto Plaza
|
Executive
Vice President of Lan Airlines S.A.
|
|
Ignacio
Javier Cueto Plaza
|
Chief
Executive Officer of Lan Airlines
S.A.
|
66
|
CUSIP No.
N/A
|
13D
|
Page 67 of 68 Pages
|
SCHEDULE II-
10
South
Andean Investments (Chile) S.A.
Presidente
Riesco 5711, Suite 1604, Las Condes, Santiago, Chile
All of
the individuals listed below are citizens of Chile.
|
Name
and Position
|
Principal
Occupation
|
|
Directors
|
|
|
José
María Eyzaguirre García de la Huerta
|
Partner
at Claro & Cía., a law firm.
|
|
José
María Eyzaguirre Baeza
|
Partner
at Claro & Cía., a law firm.
|
|
Sebastián
Eyzaguirre Baeza
|
Partner
at Claro & Cía., a law firm.
|
|
Executive
Officer
|
|
|
Sebastián
Eyzaguirre Baeza
|
Chief
Executive Officer
|
67
|
CUSIP No.
N/A
|
13D
|
Page 68 of 68 Pages
|
SCHEDULE II-
11
Isidora
Cueto Cazes y Compañía Limitada
Presidente
Riesco 5711, Suite 1604, Las Condes, Santiago, Chile
All of
the individuals listed below are citizens of Chile.
|
Name
and Position
|
Principal
Occupation
|
|
Managers
|
|
|
Juan
José Cueto Plaza
|
Director
of Lan Airlines S.A.
Director
of Costa Verde Aeronáutica S.A.
Director
of Minera Michilla S.A.
|
|
Enrique
Miguel Cueto Plaza
|
Executive
Vice President of Lan Airlines S.A.
|
|
Ignacio
Javier Cueto Plaza
|
Chief
Executive Officer of Lan Airlines
S.A.
|
68
Exhibit
99.1
JOINT FILING
AGREEMENT
THIS JOINT FILING AGREEMENT (the “Agreement”) is made
and entered into as of this 21st day of January, 2011 by and among Juan José
Cueto Plaza, Ignacio Javier Cueto Plaza, Enrique Miguel Cueto Plaza, María
Esperanza Cueto Plaza, Isidora Cueto Cazes, Felipe Jaime Cueto Ruiz-Tagle, María
Emilia Cueto Ruiz- Tagle, Andrea Raquel Cueto Ventura, Daniela Esperanza Cueto
Ventura, Valentina Sara Cueto Ventura, Alejandra Sonia Cueto Ventura, Francisca
María Cueto Ventura, Juan José Cueto Ventura, Manuela Cueto Sarquis, Pedro Cueto
Sarquis, Juan Cueto Sarquis, Antonia Cueto Sarquis, Fernanda Cueto Délano,
Ignacio Cueto Délano, Javier Cueto Délano, Pablo Cueto Délano, José Cueto
Délano, Nieves Isabel Alcaíno Cueto, María Elisa Alcaíno Cueto, María Esperanza
Alcaíno Cueto, Inversiones Mineras del Cantábrico S.A., Costa Verde
Aeronáutica S.A., Inversiones Costa Verde Limitada y Compañía en Comandita
por Acciones, Inversiones Costa Verde Limitada, Inversiones Costa Verde
Aeronáutica Limitada, Inmobiliaria e Inversiones La Espasa Limitada,
Inmobiliaria e Inversiones Caravia Limitada, Inmobiliaria e Inversiones Puerto
Claro S.A., Inmobiliaria e Inversiones Priesca Limitada, Inmobiliaria e
Inversiones El Fano Limitada, South Andean Investments (Chile) S.A. and Isidora
Cueto Cazes y Compañía Limitada.
The parties to this Agreement hereby
agree to prepare jointly and file timely (or otherwise to deliver as
appropriate) all filings on schedules 13D and 13G, and any amendments thereto
(“13D and 13G
Filings”) required to be filed by them pursuant to sections 13(d) and
13(g) under the Securities Exchange Act of 1934, as amended, with respect to
their respective ownership of shares of LAN common stock and other securities
representing, or convertible into, such shares. Each party to this
Agreement further agrees and covenants to the other parties that it will fully
cooperate with such other parties in the preparation and timely filing (and
other delivery) of all 13D and 13G Filings.
IN WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the date first set forth above.
[Signature pages
follow]
|
JUAN
JOSÉ CUETO PLAZA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
IGNACIO
JAVIER CUETO PLAZA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
ENRIQUE
MIGUEL CUETO PLAZA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
MARÍA
ESPERANZA CUETO PLAZA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
ISIDORA
CUETO CAZES
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
FELIPE
JAIME CUETO RUIZ-TAGLE
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
MARÍA
EMILIA CUETO RUIZ-TAGLE
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
ANDREA
RAQUEL CUETO VENTURA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
DANIELA
ESPERANZA CUETO VENTURA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
VALENTINA
SARA CUETO VENTURA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
ALEJANDRA
SONIA CUETO VENTURA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
FRANCISCA
MARÍA CUETO VENTURA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
JUAN
JOSÉ CUETO VENTURA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
MANUELA
CUETO SARQUIS
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
PEDRO
CUETO SARQUIS
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
JUAN
CUETO SARQUIS
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
ANTONIA
CUETO SARQUIS
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
FERNANDA
CUETO DÉLANO
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
IGNACIO
CUETO DÉLANO
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
JAVIER
CUETO DÉLANO
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
PABLO
CUETO DÉLANO
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
JOSÉ
CUETO DÉLANO
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
NIEVES
ISABEL ALCAÍNO CUETO
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
MARÍA
ELISA ALCAÍNO CUETO
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
MARÍA
ESPERANZA ALCAÍNO CUETO
|
|||
|
January
21, 2011
|
By:
|
/s/ Juan
José Cueto Plaza
|
|
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Attorney-in-fact
|
|||
|
INVERSIONES
MINERAS DEL CANTABRICO S.A.
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
January
21, 2011
|
COSTA
VERDE AERONÁUTICA S.A.
|
||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
January
21, 2011
|
INVERSIONES
COSTA VERDE LIMITADA Y
|
||
|
COMPAÑÍA
EN COMANDITA POR ACCIONES
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
INVERSIONES
COSTA VERDE LIMITADA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
INVERSIONES
COSTA VERDE AERONÁUTICA
LIMITADA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
INMOBILIARIA
E INVERSIONES CARAVIA
LIMITADA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
INMOBILIARIA
E INVERSIONES PUERTO
CLARO S.A.
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
INMOBILIARIA
E INVERSIONES PRIESCA
LIMITADA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
INMOBILIARIA
E INVERSIONES EL FANO
LIMITADA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
SOUTH
ANDEAN INVESTMENTS (CHILE) S.A.
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
ISIDORA
CUETO CAZES Y COMPAÑIA LIMITADA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
Exhibit
99.2
POWER OF
ATTORNEY
Ignacio Javier Cueto Plaza, Enrique
Miguel Cueto Plaza, María Esperanza Cueto Plaza, Isidora Cueto Cazes, Felipe
Jaime Cueto Ruiz-Tagle, María Emilia Cueto Ruiz- Tagle, Andrea Raquel Cueto
Ventura, Daniela Esperanza Cueto Ventura, Valentina Sara Cueto Ventura,
Alejandra Sonia Cueto Ventura, Francisca María Cueto Ventura, Juan José Cueto
Ventura, Manuela Cueto Sarquis, Pedro Cueto Sarquis, Juan Cueto Sarquis, Antonia
Cueto Sarquis, Fernanda Cueto Délano, Ignacio Cueto Délano, Javier Cueto Délano,
Pablo Cueto Délano, José Cueto Délano, Nieves Isabel Alcaíno Cueto, María Elisa
Alcaíno Cueto, María Esperanza Alcaíno Cueto, Inversiones Mineras del Cantábrico
S.A., Costa Verde Aeronáutica S.A., Inversiones Costa Verde Limitada y Compañía
en Comandita por Acciones, Inversiones Costa Verde Limitada, Inversiones Costa
Verde Aeronáutica Limitada, Inmobiliaria e Inversiones La Espasa Limitada,
Inmobiliaria e Inversiones Caravia Limitada, Inmobiliaria e Inversiones Puerto
Claro S.A., Inmobiliaria e Inversiones Priesca Limitada, Inmobiliaria e
Inversiones El Fano Limitada, South Andean Investments (Chile) S.A. and Isidora
Cueto Cazes y Compañía Limitada (collectively the “Cueto Group”) each
hereby constitute and appoint Juan José Cueto Plaza (the “Attorney-in-Fact”) as
legal representative to execute for and on behalf of the Cueto Group, all
Schedules 13D and 13G under the Securities Exchange Act of 1934, as amended, and
any and all amendments thereto, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the United States Securities
and Exchange Commission and relevant stock exchanges (individually, each a
"Filing"),
hereby granting unto said Attorney-in-Fact full power and authority to do and
perform any and all acts and things requisite as fully to all intents and
purposes as each of the members of the Cueto Group might or could do in person,
hereby ratifying and confirming all that said Attorney-in-Fact may lawfully do
or cause to be done by virtue hereof.
The undersigned acknowledges that the
Attorney-in-Fact, in serving in such capacity at the request of the undersigned,
is not assuming any of the undersigned's responsibilities to comply with Section
13 of the Securities Exchange Act of 1934.
The powers hereby conferred upon the
Attorney-in-Fact shall continue in force until notice of the revocation of this
Power of Attorney has been received by the Attorney-in-Fact.
IN WITNESS WHEREOF, the undersigned
has hereunto subscribed this Power of Attorney this 21st day of January,
2011.
[Signature pages
follow]
|
IGNACIO
JAVIER CUETO PLAZA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
ENRIQUE
MIGUEL CUETO PLAZA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
MARÍA
ESPERANZA CUETO PLAZA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
ISIDORA
CUETO CAZES
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
FELIPE
JAIME CUETO RUIZ-TAGLE
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
MARÍA
EMILIA CUETO RUIZ-TAGLE
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
ANDREA
RAQUEL CUETO VENTURA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
DANIELA
ESPERANZA CUETO VENTURA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
VALENTINA
SARA CUETO VENTURA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
ALEJANDRA
SONIA CUETO VENTURA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
FRANCISCA
MARÍA CUETO VENTURA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
JUAN
JOSÉ CUETO VENTURA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
MANUELA
CUETO SARQUIS
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
PEDRO
CUETO SARQUIS
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
JUAN
CUETO SARQUIS
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
ANTONIA
CUETO SARQUIS
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
FERNANDA
CUETO DÉLANO
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
IGNACIO
CUETO DÉLANO
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
JAVIER
CUETO DÉLANO
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
PABLO
CUETO DÉLANO
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
JOSÉ
CUETO DÉLANO
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
NIEVES
ISABEL ALCAÍNO CUETO
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
MARÍA
ELISA ALCAÍNO CUETO
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
MARÍA
ESPERANZA ALCAÍNO CUETO
|
|||
|
January
21, 2011
|
By:
|
/s/ Juan
José Cueto Plaza
|
|
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
INVERSIONES
MINERAS DEL CANTABRICO S.A.
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
COSTA
VERDE AERONÁUTICA S.A.
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
INVERSIONES
COSTA VERDE LIMITADA Y
COMPAÑÍA
EN COMANDITA POR ACCIONES
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
INVERSIONES
COSTA VERDE LIMITADA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
INVERSIONES
COSTA VERDE AERONÁUTICA
LIMITADA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
INMOBILIARIA
E INVERSIONES LA ESPASA
LIMITADA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
INMOBILIARIA
E INVERSIONES CARAVIA
LIMITADA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
January
21, 2011
|
INMOBILIARIA
E INVERSIONES PUERTO
CLARO S.A.
|
||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
INMOBILIARIA
E INVERSIONES PRIESCA
LIMITADA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
INMOBILIARIA
E INVERSIONES EL FANO
LIMITADA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
SOUTH
ANDEAN INVESTMENTS (CHILE) S.A.
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
|
ISIDORA
CUETO CAZES Y COMPAÑIA LIMITADA
|
|||
|
January
21, 2011
|
|||
|
By:
|
/s/ Juan
José Cueto Plaza
|
||
|
Name: Juan
José Cueto Plaza
|
|||
|
Title: Legal
Representative
|
|||
Exhibit
99.3
EXECUTION
VERSION
|
|
IMPLEMENTATION
AGREEMENT
by
and among
LAN
AIRLINES S.A.,
TAM
S.A.,
COSTA
VERDE AERONÁUTICA S.A.,
INVERSIONES
MINERAS DEL CANTÁBRICO S.A.,
NOEMY
ALMEIDA OLIVEIRA AMARO,
MARIA
CLÁUDIA OLIVEIRA AMARO,
MAURÍCIO
ROLIM AMARO,
JOÃO
FRANCISCO AMARO
and
TAM
EMPREENDIMENTOS E PARTICIPAÇÕES S.A.
Dated
as of January 18, 2011
|
|
TABLE OF
CONTENTS
|
Page
|
||
|
ARTICLE I
|
||
|
THE TRANSACTION
|
||
|
SECTION 1.01.
|
ANAC
|
4
|
|
SECTION 1.02.
|
The Transaction
|
4
|
|
SECTION 1.03.
|
Transaction Recommendations
|
6
|
|
SECTION 1.04.
|
Incorporation of TEP Chile, Holdco 1, Holdco 2 and
Sister Holdco
|
6
|
|
SECTION 1.05.
|
Subscription for and Issuance of Holdco 1 Stock,
Holdco 2 Stock and Sister Holdco Stock
|
7
|
|
SECTION 1.06.
|
Limitations on Actions
|
8
|
|
SECTION 1.07.
|
LAN and TAM Board Meetings
|
8
|
|
SECTION 1.08.
|
Execution and Delivery of Shareholders
Agreements
|
9
|
|
SECTION 1.09.
|
Shareholder Meetings
|
9
|
|
SECTION 1.10.
|
LAN and TAM Board Meetings
|
12
|
|
SECTION 1.11.
|
Commencement of the Exchange
Offer
|
12
|
|
SECTION 1.12.
|
Condition Notices; Subscription Payments;
Leilão
|
13
|
|
SECTION 1.13.
|
Consummation of Exchange
Offer
|
13
|
|
SECTION 1.14.
|
LAN Merger Board Meeting
|
14
|
|
SECTION 1.15.
|
Consummation of Mergers
|
14
|
|
SECTION 1.16.
|
Directors
|
15
|
|
SECTION 1.17.
|
Statutory Squeeze Out
|
16
|
|
ARTICLE II
|
||
|
EFFECT OF THE MERGERS
|
||
|
SECTION 2.01.
|
Conversion and Cancellation of
Securities
|
16
|
|
SECTION 2.02.
|
Treatment of TAM Stock
Options
|
17
|
|
SECTION 2.03.
|
Payment of Merger Consideration; Deposit with
Exchange Agent
|
17
|
|
SECTION 2.04.
|
Stock Transfer Books
|
17
|
|
SECTION 2.05.
|
Fractional Shares
|
17
|
|
SECTION 2.06.
|
Withholding
|
18
|
|
SECTION 2.07.
|
Value of TAM Stock
|
18
|
|
ARTICLE III
|
||
|
COVENANTS
|
||
|
SECTION 3.01.
|
Conduct of Business Pending the
Mergers
|
18
|
|
SECTION 3.02.
|
No Solicitation
|
24
|
|
SECTION 3.03.
|
Public Announcements
|
25
|
-i-
|
SECTION 3.04.
|
Stockholder Actions
|
25
|
|
ARTICLE IV
|
||
|
TERMINATION, AMENDMENT AND
WAIVER
|
||
|
SECTION 4.01.
|
Termination
|
25
|
|
SECTION 4.02.
|
Effect of Termination
|
27
|
|
SECTION 4.03.
|
Amendment
|
29
|
|
SECTION 4.04.
|
Extension; Waiver
|
29
|
|
ARTICLE V
|
||
|
GENERAL PROVISIONS
|
||
|
SECTION 5.01.
|
Nonsurvival
|
29
|
|
SECTION 5.02.
|
Fees and Expenses
|
29
|
|
SECTION 5.03.
|
Notices
|
30
|
|
SECTION 5.04.
|
Definitions
|
32
|
|
SECTION 5.05.
|
Interpretation
|
38
|
|
SECTION 5.06.
|
Consents and Approvals
|
38
|
|
SECTION 5.07.
|
Counterparts
|
38
|
|
SECTION 5.08.
|
No Third-Party
Beneficiaries
|
39
|
|
SECTION 5.09.
|
Governing Law
|
39
|
|
SECTION 5.10.
|
Assignment
|
39
|
|
SECTION 5.11.
|
Specific Enforcement; Consent to
Jurisdiction
|
39
|
|
SECTION 5.12.
|
Waiver of Jury Trial
|
40
|
|
SECTION 5.13.
|
Obligations of LAN and of
TAM
|
40
|
|
SECTION 5.14.
|
Language; Portuguese
Translation
|
41
|
|
Exhibit 1
|
Ownership
Structure Chart Upon Completion of Transaction Steps
|
|
Exhibit 2
|
TAM
Shareholders Agreement
|
|
Exhibit 3
|
Holdco
1 Shareholders Agreement
|
|
Exhibit 4
|
LATAM/TEP
Shareholders Agreement
|
|
Exhibit 5
|
Control
Group Shareholders Agreement
|
|
LAN
Disclosure Schedules
|
|
|
TAM
Disclosure Schedules
|
|
|
Schedule
1.12
|
Conditions
to Tender
|
|
Schedule
5.04(u)
|
LAN
Material Contracts
|
|
Schedule
5.04(v)
|
LAN
Stock Options
|
|
Schedule
5.04(ii)
|
TAM
Material Contracts
|
|
Schedule
5.04(jj)
|
TAM
Stock Options
|
-ii-
INDEX OF DEFINED
TERMS
|
Page
|
|
|
Action
|
32
|
|
Affiliate
|
32
|
|
Agreed
Courts
|
39
|
|
Agreed
Issues
|
39
|
|
Agreement
|
1
|
|
Airline
Regulatory Entities
|
32
|
|
Alternative
Proposal
|
24
|
|
Amaro
Family
|
1
|
|
ANAC
|
1
|
|
ANAC
Approval
|
4
|
|
Antitrust
Law
|
32
|
|
Appraisal
Event
|
25
|
|
Appraisal
QuestionedMeeting
|
10
|
|
Appraisal
Report
|
10
|
|
Appraiser
|
9
|
|
Appraiser
List
|
9
|
|
beneficial
ownership
|
32
|
|
Benefit
Plans
|
32
|
|
Board
Transaction Recommendations
|
6
|
|
Bovespa
|
10
|
|
Brazilian
Law
|
16
|
|
business
day
|
33
|
|
By-laws
|
33
|
|
Calculation
Agent
|
35
|
|
Chilean
Corporate Law
|
12
|
|
Chilean
Law
|
6
|
|
Commencement
Date
|
33
|
|
Competing
Proposal
|
28
|
|
Contract
|
33
|
|
Control
|
33
|
|
Control
Group Shareholders Agreement
|
9
|
|
Convertible
Securities
|
33
|
|
CVM
|
37
|
|
CVM
I 361
|
2
|
|
Designated
LIBOR Page
|
35
|
|
Disclosure
Schedule
|
18
|
|
Dividend
Rights
|
6
|
|
Edital
|
5
|
|
Effective
Time
|
15
|
|
Eligible
Shares
|
18
|
|
Employees
|
21
|
|
Equity
Securities
|
33
|
|
Exchange
Agent
|
17
|
|
Exchange
Fund
|
17
|
|
Exchange
Offer
|
2
|
|
Free
Float Shares
|
10
|
|
Governmental
Entity
|
33
|
|
Holdco
1
|
2
|
|
Holdco
1 Non-Voting Stock
|
2
|
|
Holdco
1 Ordinary Shares
|
7
|
|
Holdco
1 Shareholders Agreement
|
9
|
|
Holdco
1 Stock
|
2
|
|
Holdco
1 Voting Stock
|
2
|
|
Holdco
2
|
2
|
|
Holdco
2 Exchange Ratio
|
14
|
|
Holdco
2 Merger
|
14
|
|
Holdco
2 Merger Matters
|
11
|
|
Holdco
2 Shareholders Meeting
|
11
|
|
Holdco
2 Stock
|
7
|
|
Holdco
Subscriptions
|
8
|
|
IFRS
|
22
|
|
Indebtedness
|
33
|
|
Initial
Capital Increase
|
15
|
|
Intellectual
Property
|
34
|
|
Key
Personnel
|
34
|
|
LAN
|
1
|
|
LAN
ADRs
|
14
|
|
LAN
Aircraft Contracts
|
34
|
|
LAN
BDRs
|
14
|
|
LAN
Board
|
6
|
|
LAN
Board Merger Recommendation
|
8
|
|
LAN
Board Recommendations
|
8
|
|
LAN
Board Transaction Recommendation
|
6
|
|
LAN
Common Stock
|
2
|
|
LAN
Condition Notice
|
12
|
|
LAN
Controlling Shareholders
|
1
|
-iii-
|
LAN
Financial Reporting Documents
|
34
|
|
LAN
Material Adverse Effect
|
34
|
|
LAN
Material Contract
|
35
|
|
LAN
Recommendation Change
|
26
|
|
LAN
Reimbursable Expenses
|
27
|
|
LAN
Shareholders Meeting
|
9
|
|
LAN
Stock Options
|
35
|
|
LAN
Stock Plans
|
35
|
|
LAN
Termination Fee
|
27
|
|
LATAM/TEP
Shareholders Agreement
|
9
|
|
Law
|
35
|
|
Leilão
|
5
|
|
Leilão Date
|
12
|
|
LIBOR
|
35
|
|
Licenses
|
36
|
|
Lien
|
36
|
|
Limited
Voting Rights
|
7
|
|
Master
Agreement
|
37
|
|
Merger
Consideration
|
16
|
|
Mergers
|
15
|
|
Minimum
Condition Notice
|
12
|
|
Name
Change
|
8
|
|
Non-Tendered
Shares
|
16
|
|
Order
|
36
|
|
Ordinary
TEP Shares
|
1
|
|
Outside
Date
|
25
|
|
Party
|
18
|
|
Person
|
36
|
|
Preferred
TEP Shares
|
1
|
|
Quotation
Day
|
36
|
|
Ratification
of Understanding
|
4
|
|
Relevant
Parent Entity
|
24
|
|
Representatives
|
23
|
|
Requisite
Holdco 2 Shareholder Approval
|
11
|
|
Requisite
LAN Shareholder Approval
|
10
|
|
Requisite
Shareholder Approvals
|
11
|
|
Requisite
Sister Holdco Shareholder Approval
|
11
|
|
Requisite
TAM Shareholder Approval
|
10
|
|
Restraining
Orders
|
Schedule
1.06(a)
|
|
SEC
|
34
|
|
Selected
Appraiser
|
10
|
|
Shareholders
Agreements
|
9
|
|
Sister
Holdco
|
7
|
|
Sister
Holdco Exchange Ratio
|
15
|
|
Sister
Holdco Merger
|
15
|
|
Sister
Holdco Merger Matters
|
11
|
|
Sister
Holdco Shareholders Meeting
|
11
|
|
Sister
Holdco Stock
|
7
|
|
Slots
|
36
|
|
SSE
|
16
|
|
Subscriptions
|
13
|
|
Subsidiary
|
36
|
|
Swap
Contract
|
36
|
|
TAM
|
1
|
|
TAM
ADRs
|
14
|
|
TAM
Aircraft Contracts
|
37
|
|
TAM
Board
|
6
|
|
TAM
Board Exchange Offer Recommendation
|
12
|
|
TAM
Board Recommendations
|
12
|
|
TAM
Board Transaction Recommendation
|
6
|
|
TAM
Direct Controlling Shareholder
|
1
|
|
TAM
Financial Reporting Documents
|
37
|
|
TAM
Material Contract
|
37
|
|
TAM
Ordinary Stock
|
1
|
|
TAM
Preferred Stock
|
1
|
|
TAM
Recommendation Change
|
26
|
|
TAM
Reimbursable Expenses
|
27
|
|
TAM
Shareholders Agreement
|
9
|
|
TAM
Shareholders Meeting
|
10
|
|
TAM
Stock
|
1
|
|
TAM
Stock Options
|
37
|
|
TAM
Stock Plans
|
37
|
|
TAM
Termination Fee
|
27
|
|
Tax
|
37
|
|
TEP
Chile
|
1
|
|
TEP
Chile Stock
|
6
|
|
TEP
Chile Subscription
|
13
|
|
TEP
Condition Notice
|
13
|
|
TEP
Holdco 1 Non-Voting Shares
|
8
|
-iv-
|
TEP
Restructuring
|
2
|
|
TEP
Shares
|
1
|
|
Transaction
Steps
|
4
|
|
U.S.
Exchange Act
|
37
|
|
Withdrawal
Deadline
|
12
|
-v-
IMPLEMENTATION
AGREEMENT
IMPLEMENTATION
AGREEMENT, dated as of January 18, 2011 (the “Agreement”),
among LAN AIRLINES S.A., a Chilean corporation (“LAN”),
COSTA VERDE AERONÁUTICA S.A. and INVERSIONES MINERAS DEL CANTÁBRICO S.A.,
Chilean corporations that are the controlling shareholders of LAN under the Law
of Chile (collectively, the “LAN Controlling
Shareholders”), TAM S.A., a Brazilian corporation (“TAM”),
Noemy Almeida Oliveira Amaro, Maria Cláudia Oliveira Amaro, Maurício Rolim Amaro
and João Francisco Amaro, all of whom are Brazilian citizens and residents and
who, collectively, are the only shareholders of the TAM Direct Controlling
Shareholder under the Law of Brazil (all such individuals, collectively, the
“Amaro
Family”), and TAM
EMPREENDIMENTOS E PARTICIPAÇÕES S.A., a Brazilian corporation that is the direct
controlling shareholder of TAM under the Law of Brazil (the “TAM
Direct Controlling Shareholder”).
WHEREAS,
the board of directors of each of LAN and TAM has approved the combination of
the two companies on and subject to the terms and conditions set forth in this
Agreement;
WHEREAS,
if (but only if) the Agência Nacional de Aviação Civil of Brazil (“ANAC”)
has approved without any conditions not acceptable to the parties (i) the direct
transfer by the TAM Direct Controlling Shareholder to the Amaro Family of all of
the shares of ordinary stock, without par value (“TAM
Ordinary Stock”), of TAM beneficially owned by the TAM Direct Controlling
Shareholder (the “Ordinary
TEP Shares”) (which represents 85.3457% of the outstanding shares of TAM
Ordinary Stock), (ii) the direct transfer by the TAM Direct Controlling
Shareholder to the Amaro Family of all of the shares of non-voting preferred
stock, without par value (the “TAM
Preferred Stock” and, collectively with the TAM Ordinary Stock, the
“TAM
Stock”), of TAM beneficially owned by the TAM Direct Controlling
Shareholder (the “Preferred
TEP Shares” and, collectively with the Ordinary TEP Shares, the “TEP
Shares”) (which represents 25.0873% of the outstanding shares of TAM
Preferred Stock), (iii) the direct transfer by the Amaro Family to a new
Chilean holding company, TEP Chile S.A. (“TEP
Chile”) of all of
the TEP Shares, (iv) the direct transfers by TEP Chile of the Ordinary TEP
Shares to Holdco 1 and the Preferred TEP Shares to Sister Holdco, (v) the direct
transfers by the other holders of shares of TAM Ordinary Stock to Holdco 2
pursuant to the Exchange Offer, subsequently to LAN pursuant to the Mergers and
finally to Holdco 1 through the contribution by LAN and (vi) the direct
transfers by the other holders of shares of TAM Preferred Stock to Holdco 2
pursuant to the Exchange Offer and subsequently to LAN pursuant to the Mergers,
which direct transfers will result in the indirect transfers of shares of TAM
Linhas Aéreas S.A., Pantanal Linhas Aéreas S.A. and TAM Milor Táxi Aéreo,
Representações, Marcas e Patentes S.A., such transfers will be effected as
described below;
WHEREAS,
after the date of this Agreement and prior to the time at which the TEP Chile
Subscription is made and paid pursuant to Section 1.12, the Amaro Family will
implement a capital reduction of the TAM Direct Controlling Shareholder,
pursuant to which the TAM Direct Controlling Shareholder will transfer all of
the TEP Shares to the members of the Amaro Family pro rata in accordance with
their relative equity ownership of the TAM Direct Controlling Shareholder
(“TEP
Restructuring”);
WHEREAS,
after the TEP Restructuring and after the TEP Chile Subscription is made
pursuant to Section 1.12, the Amaro Family will contribute all of the TEP Shares
to TEP Chile and TEP Chile will contribute all of the Ordinary TEP Shares to a
new Chilean holding company (“Holdco
1”) in exchange for 100% (other than two shares issued to LAN) of the
non-voting stock, no par value (the “Holdco 1
Non-Voting Stock”), of Holdco 1, and (ii) Holdco 1 and its nominee will
incorporate a new Chilean company (“Holdco
2”), and the parties agree that the value of the TEP Shares so
contributed shall be the net asset value of such TEP Shares as of the date of
their contribution;
WHEREAS,
after the consummation of the Mergers, the Amaro Family will collectively own
100% of the outstanding shares of TEP Chile, TEP Chile will own at least 80% of
the voting stock, no par value (the “Holdco 1
Voting Stock,” and collectively with the Holdco 1 Non-Voting Stock,
“Holdco 1
Stock”), of Holdco 1 and LAN will own 100% of the shares of Holdco 1
Non-Voting Stock and no more than 20% of the shares of Holdco 1 Voting
Stock;
WHEREAS,
Holdco 2 will make a delisting exchange offer (the “Exchange
Offer”), pursuant to the terms and conditions of the CVM Instruction
361/2002, as amended from time to time, without taking into consideration the
amendments to such instruction brought by CVM Instruction 487/2010 and later
amendments (the “CVM I
361”), for all of the outstanding shares of TAM Stock other than the TEP
Shares;
WHEREAS,
as a result of the Exchange Offer and the Mergers, LAN will acquire
substantially all of the remaining outstanding shares of TAM Stock from the
holders who elect to participate in the Exchange Offer and will issue shares of
common stock, no par value (the “LAN
Common Stock”), of LAN to such holders and TEP Chile at the same time and
at the same exchange ratio;
WHEREAS,
after consummation of the foregoing transactions and assuming (only for purposes
of calculating the ownership percentages shown below) that (i) all holders of
shares of TAM Stock (other than the TEP Shares) fully participate in the
Exchange Offer, (ii) none of the holders of the outstanding shares of LAN Common
Stock exercise their appraisal rights (derecho a retiro) under the
Law of Chile in respect of the Mergers and (iii) the only shares of LAN Common
Stock and TAM Stock that will be outstanding after the consummation of the
Mergers are the shares issued in the Mergers and the shares which are subscribed
and fully paid for as of the date of the Agreement (which excludes any shares
issuable upon future exercises of stock options):
|
|
(a)
|
Holdco 1
will own 100% of the shares of TAM Ordinary
Stock;
|
-2-
|
|
(b)
|
the
Amaro Family collectively will own 100% of the shares of TEP
Chile;
|
|
|
(c)
|
TEP
Chile will own 80% of the shares of Holdco 1 Voting
Stock;
|
|
|
(d)
|
LAN
will own 100% of the shares of Holdco 1 Non-Voting Stock, 20% of the
shares of Holdco 1 Voting Stock and 100% of the shares of TAM Preferred
Stock; and
|
|
|
(e)
|
the
Amaro Family collectively will own 13.67% of the outstanding shares of LAN
Common Stock through TEP Chile and the other TAM shareholders will own
15.65% of the outstanding shares of LAN Common
Stock;
|
WHEREAS, in connection with the
foregoing transactions, LAN, TEP Chile, Holdco 1 and TAM will enter into a
shareholder agreement that will set forth their agreements with respect to the
governance of, and relationships between, TAM and its subsidiaries;
WHEREAS,
in connection with the foregoing transactions, LAN, TEP Chile and Holdco 1
will enter into a shareholder agreement that will set forth their agreements
with respect to the governance of Holdco 1;
WHEREAS,
in connection with the foregoing transactions, LAN and TEP Chile will enter into
a shareholder agreement that will set forth their agreements with respect to the
governance of, and relationships between, LAN, Holdco 1 and their respective
Subsidiaries;
WHEREAS,
in connection with the foregoing transactions, the LAN Controlling Shareholders,
as the continuing controlling shareholders of LAN under the Law of Chile, desire
to make certain concessions to TEP Chile and the Amaro Family by entering into a
shareholder agreement with TEP Chile that will set forth their agreements with
respect to the governance of LAN, the voting, sale and transfer of their shares
of LAN Common Stock and TEP Chile’s shares of Holdco 1 Voting Stock and certain
other matters; and
WHEREAS,
the board of directors of each of LAN, TAM, the LAN Controlling Shareholders and
the TAM Direct Controlling Shareholder have approved this Agreement and the
transactions contemplated hereby upon the terms and subject to the conditions
set forth in this Agreement.
NOW,
THEREFORE, in consideration of the premises and the covenants and agreements
contained in this Agreement, and subject to the conditions set forth herein and
those relating to the Exchange Offer, the parties hereto agree as
follows:
-3-
ARTICLE
I
THE
TRANSACTION
SECTION
1.01. ANAC. On
October 20, 2010, the parties hereto submitted to ANAC an application for ANAC’s
approval of: (i) the direct transfers by the TAM Direct Controlling Shareholder
of the TEP Shares to the Amaro Family, (ii) the direct transfer by the
Amaro Family of the TEP Shares to TEP Chile, (iii) the direct transfer by
TEP Chile of the Ordinary TEP Shares to Holdco 1 and the Preferred TEP Shares to
Sister Holdco, (iv) the direct transfers by the other holders of TAM Ordinary
Stock to Holdco 2 pursuant to the Exchange Offer, subsequently to LAN pursuant
to the Mergers and finally to Holdco 1 through the contribution by LAN and
(v) the direct transfers by the other holders of TAM Preferred Stock to
Holdco 2 pursuant to the Exchange Offer and subsequently to LAN pursuant to the
Mergers (the “ANAC
Approval”), together with a Private Instrument of Ratification of
Understanding, dated as of October 12, 2010 and as amended as of December 13,
2010, among the parties (the “Ratification
of Understanding”). Promptly following the date hereof, the
parties will amend the Ratification of Understanding to request that ANAC also
approve the (i) direct transfers by the TAM Direct Controlling Shareholder of
the TEP Shares to the Amaro Family and (ii) the direct transfer by the
Amaro Family of the TEP Shares to TEP Chile. The parties
acknowledge and agree that they will take no actions to implement any of the
transactions contemplated by this Agreement (other than the actions described in
Sections 1.03 and 1.04) unless and until the ANAC Approval has been received or
ANAC has expressly approved the taking of such actions prior to receipt of the
ANAC Approval.
SECTION
1.02. The
Transaction. Upon
the terms and subject to the conditions set forth in this Agreement and those
relating to the Exchange Offer and in accordance with applicable Law, the
parties shall take or cause to be taken the following actions (the “Transaction
Steps”) in substantially the order listed below; provided, however, that notwithstanding
the foregoing none of such steps (other than the actions described in Sections
1.03 and 1.04) shall be taken prior to receipt of the ANAC Approval without the
prior consent of ANAC. Upon completion of the Transaction Steps, and
assuming (only for purposes of calculating the ownership percentages shown
therein) that (i) all holders of shares of TAM Stock (other than the TEP Shares)
fully participate in the Exchange Offer, (ii) none of the holders of the
outstanding shares of LAN Common Stock exercise their appraisal rights (derecho a retiro) under
Chilean Law in respect of the Mergers and (iii) the only shares of LAN Common
Stock and TAM Stock that will be outstanding after the consummation of the
Mergers are the shares issued in the Mergers and the shares which are subscribed
and fully paid for as of the date of the Agreement (which excludes any shares
issuable upon future exercises of stock options), the ownership of LAN,
Holdco 1 and TAM will be as set forth in the ownership structure chart
attached as Exhibit 1
hereto.
-4-
|
|
(a)
|
Make
and publicly announce the Board Transaction
Recommendations
|
|
|
(b)
|
Incorporate
TEP Chile, Holdco 1, Holdco 2 and Sister
Holdco
|
|
|
(c)
|
Implement
the TEP Restructuring
|
|
|
(d)
|
Subscribe
for and issue Holdco 1 Stock, Holdco 2 Stock and Sister Holdco
Stock
|
|
|
(e)
|
LAN’s
board of directors meets to recommend that the LAN shareholders vote to
approve the Mergers and change of LAN’s
name
|
|
|
(f)
|
TAM’s
board of directors meets to approve a list of appraisal entities to be
submitted to TAM’s shareholders
|
|
|
(g)
|
Prior
to the calling of the shareholder meeting of LAN, execute and deliver the
Shareholders Agreements
|
|
|
(h)
|
Shareholder
meeting of LAN to approve the Mergers and change LAN’s
name
|
|
|
(i)
|
Shareholder
meeting of TAM to select the appraisal
entity
|
|
|
(j)
|
Shareholder
meetings of Holdco 2 and Sister Holdco to approve the Mergers and
related matters
|
|
|
(k)
|
LAN’s
board of directors conditionally approves the issuance of the LAN Common
Stock issuable in the Mergers
|
|
|
(l)
|
TAM’s
board of directors meets to recommend that the TAM shareholders tender
their shares into the Exchange
Offer
|
|
|
(m)
|
Commence
the Exchange Offer
|
|
|
(n)
|
Delivery
of the LAN Condition Notice, delivery of the TEP Condition Notice,
subscribe for, issue and pay for the TEP Chile Stock and pay the Holdco
Subscriptions
|
|
|
(o)
|
Consummate
the Exchange Offer by completing the auction (leilão) (the “Leilão”)
established in the edital relating to the
Exchange Offer (the “Edital”)
|
|
|
(p)
|
LAN’s
board of directors approves the issuance of the LAN Common Stock issuable
in the Mergers
|
-5-
|
|
(q)
|
Consummate
the Mergers
|
|
|
(r)
|
Settle
the purchases made in the Exchange Offer with the Merger
Consideration
|
|
|
(s)
|
Change
LAN’s name to “LATAM Airlines Group
S.A.”
|
|
|
(t)
|
Statutory
squeeze out
|
|
|
(u)
|
Delist
TAM Stock and TAM ADRs
|
SECTION
1.03. Transaction
Recommendations. On
or prior to the execution and delivery of this Agreement, the board of directors
of LAN (the “LAN
Board”) shall have unanimously recommended the transactions contemplated
by this Agreement to its shareholders (the “LAN Board
Transaction Recommendation”). On or prior to the execution and
delivery of this Agreement, the board of directors of TAM (the “TAM
Board”) shall have recommended the Exchange Offer to its shareholders
(the “TAM Board
Transaction Recommendation” and, collectively with
the LAN Board Transaction Recommendation, the “Board
Transaction Recommendations”). Promptly after the execution
and delivery of this Agreement, each of LAN and TAM shall publicly announce its
Board Transaction Recommendation.
SECTION
1.04. Incorporation of TEP Chile,
Holdco 1,
Holdco 2 and Sister Holdco.
(a) The
Amaro Family shall incorporate TEP Chile as a new sociedad anónima corporation
in Chile, whose only class of capital stock will be ordinary stock, no par value
(the “TEP Chile
Stock”), of TEP Chile.
(b) At
the time TEP Chile is incorporated, (i) each of Maria Cláudia Oliveira Amaro,
Maurício Rolim Amaro, Noemy Almeida Oliveira Amaro and João Francisco Amaro
shall subscribe and pay for one share of TEP Chile Stock for nominal
consideration, and (ii) the other 72,837,860 authorized shares of TEP Chile
Stock shall remain available for subscription and payment.
(c) TEP
Chile and LAN shall incorporate Holdco 1 as a new sociedad anónima corporation
in Chile. Holdco 1 will be authorized to issue only the
following two classes of capital stock:
(i) Holdco
1 Voting Stock, which shall have the exclusive right to vote on, approve or
consent to all matters that are subject to any vote of, approval by or consent
from the shareholders of Holdco 1 under the applicable Law of Chile (“Chilean
Law”) or otherwise (other than the Limited Voting Rights) and which shall
have no economic rights other than the right to receive a nominal dividend
(collectively, the “Dividend
Rights”); and
-6-
(ii) Holdco
1 Non-Voting Stock, which shall have the exclusive right to receive all
dividends, distributions or other amounts payable by Holdco 1 in respect of
any shares of its capital stock (including a preference to be repaid in
connection with any liquidation, capital reduction, winding up, recapitalization
or reorganization) other than the Dividend Rights and which shall have no right
to vote on, approve or consent to any matter that is subject to any vote of,
approval by or consent from the shareholders of Holdco 1 under Chilean Law
or otherwise other than the rights to vote on, approve or consent to matters
requiring the approval of the holders of shares of Holdco 1 Non-Voting Stock
under Chilean Law or otherwise (collectively, the “Limited
Voting Rights”).
(d) Holdco 1
and its nominee shall incorporate Holdco 2 as a new sociedad anónima corporation
in Chile, whose only class of capital stock will be ordinary stock, no par value
(the “Holdco 2
Stock”), of Holdco 2. Holdco 2 shall be authorized
to issue all of the shares potentially issuable pursuant to the Exchange Offer
based on an exchange ratio of one share of Holdco 2 Stock for each share of
TAM Stock.
(e) TEP
Chile and its nominee shall incorporate a new sociedad anónima corporation
in Chile (“Sister
Holdco”), whose only class of capital stock shall be ordinary stock, no
par value (the “Sister
Holdco Stock”), of Sister Holdco.
(f) On
or prior to the time at which the TEP Chile Subscription is made and paid
pursuant to Section 1.12, the TAM Direct Controlling Shareholder and the Amaro
Family shall cause the TEP Restructuring to occur.
SECTION
1.05. Subscription for and
Issuance of Holdco 1 Stock, Holdco 2 Stock and Sister Holdco
Stock.
(a) At
the time Holdco 1 is incorporated, (i) TEP Chile shall subscribe and pay for
1,000 shares of Holdco 1 Voting Stock (collectively, the “Holdco 1
Ordinary Shares”) for nominal consideration, (ii) LAN will subscribe and
pay for two shares of Holdco 1 Non-Voting Stock for nominal consideration, and
(iii) the other 47,652,705 authorized shares of Holdco 1 Non-Voting Stock shall
remain available for subscription and payment.
(b) At
the time Holdco 2 is incorporated, (i) Holdco 1 shall subscribe and pay for
one share of Holdco 2 Stock for nominal consideration, (ii) a nominee of
Holdco 1 shall subscribe and pay for one share of Holdco 2 Stock for
nominal consideration, and (iii) the other 85,557,560 authorized shares of
Holdco 2 Stock shall remain available for subscription and payment pursuant to
the Exchange Offer.
(c) At
the time Sister Holdco is incorporated, (i) TEP Chile shall subscribe and pay
for one share of Sister Holdco Stock for nominal consideration, (ii) a nominee
of TEP Chile shall subscribe and pay for one share of Sister Holdco Stock for
nominal consideration, and (iii) the other 72,837,860 authorized shares of
Sister Holdco Stock shall remain available for subscription and
payment.
-7-
(d) Immediately
after Holdco 1 and Sister Holdco are incorporated, TEP Chile shall subscribe for
(i) 47,652,705 shares of Holdco 1 Non-Voting Stock (the “TEP
Holdco 1 Non-Voting Shares”) in exchange for all of the Ordinary TEP
Shares, (ii) 72,837,860 shares of Sister Holdco Stock in exchange for 62 Holdco
1 Ordinary Shares, all of the TEP Holdco 1 Non-Voting Shares and all of the
Preferred TEP Shares (the subscriptions described in this Section 1.05(d) are
collectively referred to herein as, the “Holdco
Subscriptions”); provided, however, that
notwithstanding the foregoing the Holdco Subscriptions shall be payable only if
and when TEP Chile receives the TEP Shares pursuant to Section 1.12 and
following such payment TEP Chile will retain 938 Holdco 1 Ordinary
Shares.
(e) The
shares of Holdco 1 Non-Voting Stock subscribed and paid for by LAN pursuant to
Section 1.05(a)(ii) and subscribed for by TEP Chile pursuant to Section
1.05(d)(i) shall collectively represent all of the issued and outstanding shares
of Holdco 1 Non-Voting Stock immediately prior to the consummation of the
Mergers.
(f) The
shares of Sister Holdco Stock subscribed and paid for by TEP Chile and its
nominee pursuant to Section 1.05(c)(i) and (ii) and subscribed for by TEP
Chile pursuant to Section 1.05(d)(ii) shall be equal in number to the TEP Shares
plus two shares and shall collectively represent all of the issued and
outstanding shares of Sister Holdco Stock immediately prior to the consummation
of the Mergers.
SECTION
1.06. Limitations on
Actions. The TAM
Direct Controlling Shareholder and the Amaro Family shall take, and shall cause
the nominees referred to in this Article I to take, all necessary action to
ensure that prior to the consummation of the Mergers none of Holdco 1,
Holdco 2 or Sister Holdco will have any assets or liabilities other than
those expressly provided for in this Article I and will take no actions other
than the actions expressly provided for in this Article I or incidental to
such actions or their formation.
SECTION
1.07. LAN and TAM Board
Meetings.
(a) Prior
to the LAN Shareholders Meeting, LAN shall cause a special meeting of the LAN
Board to be called and held in accordance with applicable Law and the By-laws of
LAN and at such duly called and held meeting the LAN Board shall, by resolutions
duly adopted at such meeting, recommend that the holders of shares of LAN Common
Stock vote to approve the Mergers, the change of LAN’s name to “LATAM Airlines
Group S.A.” (the “Name
Change”) and the other transactions contemplated by this Agreement (the
“LAN Board
Merger Recommendation,” and together with the LAN Board Transaction
Recommendation, the “LAN Board
Recommendations”) and LAN shall publicly announce the LAN Board Merger
Recommendation.
-8-
(b) Prior
to the TAM Shareholders Meeting, TAM shall cause a special meeting of the TAM
Board to be called and held in accordance with applicable Law and the TAM
By-laws and at such duly called and held meeting the TAM Board shall, by
resolutions duly adopted at such meeting, approve a list of three independent
specialized companies experienced in valuing companies with similar size and
operations to TAM (each, an “Appraiser,”
and such list, the “Appraiser
List”) to be submitted to holders of the Free Float Shares at the TAM
Shareholders Meeting.
SECTION
1.08. Execution and Delivery of
Shareholders Agreements. Prior
to the calling of the LAN Shareholders Meeting referred to in
Section 1.09:
(a) LAN,
TEP Chile, Holdco 1 and TAM will enter into a shareholder agreement with respect
to the holding of TAM Stock and the governance, management and operations of TAM
and its subsidiaries in the form of Exhibit 2
hereto (the “TAM
Shareholders Agreement”), which will become effective
only upon the consummation of the Mergers.
(b) LAN,
TEP Chile and Holdco 1 will enter into a shareholder agreement with respect to
the holding of Holdco 1 Stock and the governance, management and operations of
Holdco 1 in the form of Exhibit 3
hereto (the “Holdco 1
Shareholders Agreement”), which will become effective
only upon the consummation of the Mergers.
(c) LAN
and TEP Chile will enter into a shareholder agreement with respect to the
governance of LAN, Holdco 1 and their respective Subsidiaries in the form of
Exhibit 4
hereto (the “LATAM/TEP
Shareholders Agreement”), which will become effective
only upon the consummation of the Mergers.
(d) The
LAN Controlling Shareholders and TEP Chile will enter into a shareholder
agreement with respect to the governance of LAN, the voting, sale and transfer
of their shares of LAN Common Stock and TEP Chile’s shares of Holdco 1 Voting
Stock and certain other matters in the form of Exhibit 5
hereto (the “Control
Group Shareholders Agreement” and, collectively with the TAM Shareholders
Agreement, the Holdco 1 Shareholders Agreement and the LATAM/TEP Shareholders
Agreement, the “Shareholders
Agreements”), which will become effective only upon the consummation of
the Mergers.
SECTION
1.09. Shareholder
Meetings. Prior
to the commencement of the Exchange Offer:
(a) LAN
shall, acting through the LAN Board and in accordance with applicable Law and
LAN’s By-laws, (i) take all action necessary to establish a record date
for, duly call, give notice of, convene and hold a meeting of its shareholders
for the purpose of voting to approve the Mergers, the Name Change and the other
transactions contemplated hereby (the “LAN
Shareholders Meeting”), (ii) cause such vote to be taken and
completed and (iii) include the LAN Board Recommendations in the materials
distributed to the holders of LAN Common Stock in connection with the LAN
Shareholders Meeting. Under Chilean Law and LAN’s By-laws, the
Mergers must be approved by the holders of at least two-thirds of the
outstanding shares of LAN Common Stock (the “Requisite
LAN Shareholder Approval”). The Requisite LAN Shareholder
Approval shall be expressly conditioned upon, and will become effective only
upon, the consummation of the Mergers.
-9-
(b) TAM
shall, acting through the TAM Board and in accordance with applicable Law and
TAM’s By-laws, take all action necessary to establish a record date for, duly
call, give notice of, convene and hold a meeting of its shareholders solely for
the purpose of voting to select an Appraiser from the Appraiser List to prepare
the appraisal report to determine the economic value of TAM and LAN (the “Appraisal
Report”) in accordance with the terms of TAM’s By-laws and the rules of
the BM&FBovespa (the “Bovespa”
and, such shareholders meeting and any shareholders meeting called subsequently
for the same purpose as provided below, the “TAM
Shareholders Meeting”); provided, however, that the foregoing
shall not be deemed to require TAM to cause such vote to select an Appraiser to
be completed or to select any particular Appraiser. Under TAM’s
By-laws and the rules of the Bovespa the quorum for the first calling of the TAM
Shareholders Meeting requires the presence in person or by proxy of holders of
shares of TAM Stock (other than the TAM Direct Controlling Shareholder, the
Amaro Family, their respective Affiliates and TAM and its Subsidiaries)
(collectively, the “Free
Float Shares”) representing at least 20% of the outstanding shares of TAM
Stock. Under TAM’s By-laws and the rules of the Bovespa, the
selection of an Appraiser is the exclusive responsibility of the holders of the
Free Float Shares, and any Appraiser so selected must be approved by a majority
of the votes cast by the holders of the Free Float Shares present in person or
by proxy at the TAM Shareholders Meeting at which the requisite quorum is
present (the “Requisite
TAM Shareholder Approval,” and any Appraiser so selected, the “Selected
Appraiser”). If a quorum is not present at the first calling
of the TAM Shareholders Meeting, then TAM shall call additional meetings of its
shareholders solely for the same purpose until a quorum is established, and
under TAM’s By-laws and the rules of the Bovespa the quorum for any such
subsequently called meeting shall require the presence in person or by proxy of
any holder of at least one Free Float Share. If at any duly called
and held TAM Shareholders Meeting at which a quorum is present the vote of the
holders of the Free Float Shares to select an Appraiser is taken and completed
but the Requisite TAM Shareholder Approval is not obtained, then TAM shall call
additional meetings of its shareholders solely for the same purpose until the
Requisite TAM Shareholder Approval is obtained. Notwithstanding
anything in this Agreement to the contrary, in no event shall TAM be required to
call more than five shareholder meetings within a period of five
months. If after the Selected Appraiser has issued the Appraisal
Report the holders of Free Float Shares exercise their right under Brazilian Law
to request that TAM call a special meeting of the shareholders of TAM to vote
upon whether or not to request a new Appraisal Report and to appoint a new
Appraiser to prepare a new Appraisal Report (the “Appraisal
Questioned Meeting”), then TAM shall, acting through the TAM Board and in
accordance with applicable Law and TAM’s By-laws, take all action necessary to
establish a record date for, duly call, give notice of, convene and hold the
Appraisal Questioned Meeting no later than 45 days after such election is
made. If the holders of Free Float Shares vote to request a new
Appraisal Report and to appoint a new Appraiser at the Appraisal Questioned
Meeting, then such new Appraiser shall be deemed to be the Selected Appraiser
and its new Appraisal Report shall be deemed to be the Appraisal Report for all
purposes of this Agreement other than this sentence and the immediately
preceding sentence.
-10-
(c) The
Amaro Family shall cause Holdco 2, acting through its board of directors
and in accordance with applicable Law and Holdco 2’s By-laws, to (i) take
all action necessary to establish a record date for, duly call, give notice of,
convene and hold a special meeting of the shareholders of Holdco 2 (the
“Holdco 2
Shareholders Meeting”) for the purpose of voting to approve (i) the
Holdco 2 Merger and the other transactions contemplated hereby,
(ii) the relevant audited financial statements and appraisal report and
(iii) the By-laws of the surviving corporation of the Holdco 2 Merger
(collectively, the “Holdco 2
Merger Matters”). Under Chilean Law and Holdco 2’s
By-laws, the Holdco 2 Merger Matters must be approved by the holders of at
least two-thirds of the outstanding shares of Holdco 2 Stock (the “Requisite
Holdco 2 Shareholder Approval”). The Requisite Holdco 2
Shareholder Approval shall be expressly conditioned upon, and will become
effective only upon, the consummation of the Mergers.
(d) The
Amaro Family shall cause Sister Holdco, acting through its board of directors
and in accordance with applicable Law and Sister Holdco’s By-laws, to take all
action necessary to establish a record date for, duly call, give notice of,
convene and hold a special meeting of the shareholders of Sister Holdco (the
“Sister
Holdco Shareholders Meeting”) for the purpose of voting to approve
(i) the Sister Holdco Merger and the other transactions contemplated
hereby, (ii) the relevant audited financial statements and appraisal report
and (iii) the By-laws of the surviving corporation of the Sister Holdco Merger
(collectively, the “Sister
Holdco Merger Matters”). Under Chilean Law and Sister Holdco’s
By-laws, the Sister Holdco Merger Matters must be approved by the holders of at
least two-thirds of the outstanding shares of Sister Holdco Stock (the “Requisite
Sister Holdco Shareholder Approval” and, collectively with the Requisite
LAN Shareholder Approval, the Requisite TAM Shareholder Approval and the
Requisite Holdco 2 Shareholder Approval, the “Requisite
Shareholder Approvals”). The Requisite Sister Holdco
Shareholder Approval shall be expressly conditioned upon, and will become
effective only upon, the consummation of the Mergers.
(e) Each
of the LAN Shareholders Meeting, the Holdco 2 Shareholders Meeting and the
Sister Holdco Shareholders Meeting shall occur on the same day.
-11-
SECTION
1.10. LAN and TAM Board
Meetings.
(a) Prior
to the commencement of the Exchange Offer, LAN shall cause a special meeting of
the LAN Board to be called and held in accordance with applicable Law and the
By-laws of LAN and at such duly called and held meeting the LAN Board shall, by
resolutions duly adopted at such meeting, approve the issuance of the shares of
LAN Common Stock issuable pursuant to the Mergers, which approval shall be
expressly conditioned upon, and will become effective only upon, the
consummation of the Exchange Offer.
(b) Prior
to the commencement of the Exchange Offer, TAM shall cause a special meeting of
the TAM Board to be called and held in accordance with applicable Law and the
TAM By-laws and at such duly called and held meeting the TAM Board shall, by
resolutions duly adopted at such meeting, recommend that the holders of shares
of TAM Stock tender and sell such shares in the Exchange Offer (the “TAM Board
Exchange Offer Recommendation” and, collectively with the TAM Board
Transaction Recommendation, the “TAM Board
Recommendations”), and promptly after such meeting TAM shall publicly
announce the TAM Board Exchange Offer Recommendation.
SECTION
1.11. Commencement of the Exchange
Offer. Subject
to the satisfaction or waiver of the conditions relating to the commencement of
the Exchange Offer (which shall include the satisfaction of the Appraisal
Condition (as defined in the Exchange Offer) and the Requisite Shareholder
Approvals having been obtained and recorded and published in accordance with Law
No. 18,046 of Chilean Corporations (the “Chilean
Corporate Law”) and any other applicable Laws), Holdco 2 will
commence the Exchange Offer in accordance with the terms of this Agreement and
as otherwise agreed among the parties.
-12-
SECTION
1.12. Condition Notices;
Subscription Payments; Leilão. The
last time at which the holders of shares of TAM Stock shall be able to withdraw
their acceptance to tender their shares of TAM Stock into the Exchange Offer
will be 12:00p.m., São Paulo, Brazil time (the “Withdrawal
Deadline”), on the date on which the Leilão will occur as specified
in the Edital, as such date may be changed from time to time in accordance with
Brazilian Law (the “Leilão
Date”). At 2:00 p.m., São Paulo, Brazil time, on the Leilão
Date, the Bovespa shall inform LAN, Holdco 2 and the Amaro Family whether or not
the Minimum Conditions (as defined in the Exchange Offer) have been satisfied
(the “Minimum
Condition Notice”). Promptly after receiving the Minimum
Condition Notice but in no event later than 2:10 p.m., São Paulo, Brazil time,
on the Leilão Date LAN shall deliver to the Amaro Family a written notice
stating whether or not all of the conditions to the consummation of the Exchange
Offer (other than the conditions relating to the consummation of the TEP Chile
Subscription) have been satisfied or irrevocably waived by LAN (the “LAN Condition
Notice”). If the LAN Condition Notice states that all such
conditions have been so satisfied or waived, then promptly after they receive
the LAN Condition Notice but in no event later than 2:20 p.m., São Paulo, Brazil
time, on the Leilão Date the Amaro Family shall deliver to LAN a written notice
stating whether or not all of the conditions set forth in Schedule 1.12 and the
mutual conditions to the consummation of the Exchange Offer have been satisfied
or irrevocably waived by the them (the “TEP Condition
Notice”). If the TEP Condition Notice states that all such
conditions have been so satisfied or waived, then (i) promptly after they
have delivered the TEP Condition Notice to LAN but in no event later than 2:30
p.m., São Paulo, Brazil time, on the Leilão Date (A) the Amaro Family,
collectively, shall subscribe for 72,837,860 shares of TEP Chile Stock in
exchange for all of the TEP Shares (the “TEP Chile
Subscription” and, collectively with the Holdco Subscriptions, the “Subscriptions”),
such Subscriptions to be made in such proportions so that immediately after the
TEP Chile Subscription is paid the percentage equity ownership of each member of
the Amaro Family in TEP Chile shall be the same as the percentage equity
ownership that such member has in the TAM Direct Controlling Shareholder as of
the date hereof, and pay the TEP Chile Subscription by delivering the TEP Shares
to TEP Chile, and (B) TEP Chile shall pay the Holdco Subscriptions by
delivering all of the Ordinary TEP Shares to Holdco 1 and the 62 Holdco 1
Ordinary Shares, all of the TEP Holdco 1 Non-Voting Shares and all of the
Preferred TEP Shares to Sister Holdco and (ii) promptly after all such payments
have been made but in no event later than 2:40 p.m., São Paulo, Brazil time, on
the Leilão Date, LAN and the Amaro Family shall issue a press release announcing
that all of the conditions to the Exchange Offer have been satisfied or
irrevocably waived. The LAN Condition Notice shall be conclusive and binding
upon LAN for all purposes of this Agreement and the TEP Condition Notice shall
be conclusive and binding upon the Amaro Family for all purposes of this
Agreement and the TEP Chile Subscription. Notwithstanding the
foregoing, if the Leilão commences at any time other than 3:00 p.m., São Paulo,
Brazil time, on the Leilão Date, then each of the times specified above in this
Section 1.12 (except for the Withdrawal Deadline) shall be adjusted by the same
amount that the actual time of the commencement of the Leilão differs from 3:00
p.m., São Paulo, Brazil time. If (x) either the LAN Condition Notice
or the TEP Condition Notice does not state that all of the conditions it is
required to address have been satisfied or irrevocably waived or (y) the TEP
Chile Subscription or any of the payments required pursuant to the Subscriptions
are not made in full when required by this Section 1.12, then the Leilão shall
not occur and the Exchange Offer shall expire without the purchase of any shares
of TAM Stock.
SECTION
1.13. Consummation of Exchange
Offer. If
(i) each of the LAN Condition Notice and the TEP Condition Notice states that
all of the conditions it is required to address have been satisfied or
irrevocably waived and (ii) the TEP Chile Subscription and all of the payments
required pursuant to the Subscriptions have been made in full when required by
Section 1.12, then the Leilão shall commence at 3:00 p.m., São Paulo, Brazil
time (or such other time as the Bovespa may determine) on the Leilão Date, and
Holdco 2 will consummate the Exchange Offer on the Leilão Date in
accordance with the terms and conditions of the Exchange Offer. For
all purposes of this Agreement, the consummation of the Exchange Offer shall be
deemed to be the purchases of TAM Stock pursuant to the Leilão. Such
purchases will be settled on the third business day following the Leilão Date in
accordance with the applicable procedures of Bovespa.
-13-
SECTION
1.14. LAN Merger Board
Meeting. As
soon as practicable (but in no event later than two business days) following the
consummation of the Exchange Offer, LAN shall cause a special meeting of the LAN
Board to be called and held in accordance with applicable Law and the By-laws of
LAN and at such duly called and held meeting the LAN Board shall, by resolutions
duly adopted at such meeting, approve the issuance of the shares of LAN Common
Stock issuable pursuant to the Mergers.
SECTION
1.15. Consummation of
Mergers. If
(but only if) the Exchange Offer is consummated, then after such consummation
and prior to the settlement of the purchases made pursuant to the Exchange
Offer:
(a) Holdco 2
will merge with and into LAN (the “Holdco 2
Merger”) and the separate corporate existence of Holdco 2 shall
thereupon cease. LAN shall be the surviving corporation of the
Holdco 2 Merger and the separate corporate existence of LAN, with all its
rights, privileges, powers and franchises, shall continue unaffected by the
Holdco 2 Merger. The Holdco 2 Merger shall have the effects
specified in the Chilean Corporate Law. Pursuant to the Holdco 2
Merger, each share of Holdco 2 Stock (including those issuable pursuant to
the settlement of the purchases made pursuant to the Leilão) shall be converted
into 0.90 of a share of LAN Common Stock (the “Holdco
2 Exchange
Ratio”). Holders of American Depositary Receipts representing
shares of TAM Preferred Stock (“TAM
ADRs”) that are tendered and sold in the Exchange Offer shall receive the
shares of LAN Common Stock issuable to them pursuant to the Holdco 2 Merger
in the form of American Depositary Receipts representing such shares (“LAN
ADRs”) issued pursuant to the Deposit Agreement, dated as of
March 25, 2003, among LAN, The Bank of New York, as Depositary, and the
record holders and beneficial owners of LAN ADRs from time to
time. Holders of shares of TAM Stock registered under Resolution 2689
of January 26, 2000 enacted by the Brazilian National Monetary Council that are
tendered and sold in the Exchange Offer shall receive the shares of LAN Common
Stock issuable to them pursuant to the Holdco 2 Merger in the form of LAN
BDRs or LAN ADRs, as permitted by applicable Law. In the case of the
holders of all other shares of TAM Stock tendered and sold in the Exchange
Offer, such holders shall receive the shares of LAN Common Stock issuable to
them pursuant to the Holdco 2 Merger in the form of Brazilian Depositary
Receipts representing such shares (“LAN
BDRs”) to be issued pursuant to a deposit agreement in customary form
among LAN, a depositary agent to be selected by LAN and reasonably acceptable to
TAM, and the holders of LAN BDRs from time to time. LAN shall pay or
cause to be paid all deposit fees and other expenses payable in connection with
the issuance of such LAN ADRs and LAN BDRs. Immediately after the
consummation of the Holdco 2 Merger, LAN will contribute any shares of TAM
Ordinary Stock beneficially owned by Holdco 2 immediately prior to such
merger with and into LAN, to Holdco 1 in exchange for new shares of Holdco
1 Non-Voting Stock on a one-for-one basis. After such contribution, LAN will
increase its ownership percentage of the outstanding shares of Holdco 1 Voting
Stock by converting shares of Holdco 1 Non-Voting Stock into Holdco 1 Voting
Stock to (A) 100% minus (B) 80% divided by the percentage of the outstanding
shares of TAM Ordinary Stock owned by Holdco 1 determined on a primary basis
after giving effect to such contribution.
-14-
(b) Sister
Holdco will merge with and into LAN (the “Sister
Holdco Merger” and, collectively with the Holdco 2 Merger, the
“Mergers”)
and the separate corporate existence of Sister Holdco shall thereupon
cease. LAN shall be the surviving corporation of the Sister Holdco
Merger and the separate corporate existence of LAN, with all its rights,
privileges, powers and franchises, shall continue unaffected by the Sister
Holdco Merger. The Sister Holdco Merger shall have the effects
specified in the Chilean Corporate Law. Pursuant to the Sister Holdco
Merger, each share of Sister Holdco Stock will be converted into 0.90 of a share
of LAN Common Stock (the “Sister
Holdco Exchange Ratio”). LAN shall pay or cause to be paid all
deposit fees and other expenses payable in connection with the issuance of such
LAN BDRs.
(c) When
the shareholders of LAN approve the Mergers, the share capital of LAN shall be
increased by an aggregate amount equal to the sum of the share capital of Holdco
2 and the share capital of Sister Holdco at such time (the “Initial
Capital Increase”). After the consummation of the Mergers, the share
capital of LAN shall be increased by the amount by which the net asset value of
the shares of TAM Stock determined pursuant to Section 2.07 exceeds, or
decreased by the amount by which such net asset value is less than, the Initial
Capital Increase. The time at which the Mergers become effective is
referred to herein as the “Effective
Time.”
SECTION
1.16. Directors. As
soon as practicable following the date of this Agreement, LAN and the Amaro
Family shall discuss in good faith and agree upon the individuals who shall be
directors of LAN, Holdco 1, TAM and their Subsidiaries as of the Effective
Time. The parties shall take all necessary action to ensure that
immediately following, and on the same day as, the Effective Time, the
individuals selected for election to the board of directors of LAN,
Holdco 1, TAM and their Subsidiaries by each of LAN and TEP Chile pursuant
to the Holdco 1 Shareholders Agreement, by each of LAN and TEP Chile pursuant to
the TAM Shareholders Agreement and by each of the LAN Controlling Shareholders
and TEP Chile pursuant to the Control Group Shareholders Agreement shall be the
directors of LAN, Holdco 1, TAM and their Subsidiaries; provided, however, that
notwithstanding the foregoing if any such individual is unwilling or unable to
serve in such capacity, then he or she shall be replaced, directly or
indirectly, by LAN, the LAN Controlling Shareholders or TEP Chile, as the case
may be, if it is entitled pursuant to the Holdco 1 Shareholders Agreement, the
TAM Shareholders Agreement and/or the Control Group Shareholders Agreement to
elect or select for election, as applicable, to the relevant board of directors
the individual who was so unwilling or unable to serve.
-15-
SECTION
1.17. Statutory Squeeze
Out. After
the consummation of the Exchange Offer, if it is permitted to do so under the
applicable Law of Brazil (“Brazilian
Law”), LAN (as the surviving corporation of the Holdco 2 Merger)
shall effect a statutory squeeze out of any holders of shares of TAM Stock
(other than the TEP Shares) that did not accept the Exchange Offer (the “Non-Tendered
Shares”). In this statutory squeeze out, the holders of
Non-Tendered Shares shall have the right to receive cash in an amount equal to
the product of (i) the number of shares of LAN Common Stock that it would
have received pursuant to the Exchange Offer in respect of such Non-Tendered
Shares (assuming it could have received fractional Exchange Offer Equivalent
Shares) (as to each such holder, its “Exchange
Offer Equivalent Shares”) and (ii) the closing price of the LAN Common
Stock on the Santiago Stock Exchange (“SSE”)
on the day on which the Exchange Offer is consummated. After the squeeze out of
all of the remaining shares of TAM Ordinary Stock, LAN will increase its
ownership percentage of the outstanding shares of Holdco 1 Voting Stock to 20%
by converting shares of Holdco 1 Non-Voting Stock into shares of Holdco 1 Voting
Stock.
ARTICLE
II
EFFECT
OF THE MERGERS
SECTION
2.01. Conversion and Cancellation
of Securities. At
the Effective Time, by virtue of the Mergers and without any action on the part
of the holder of any shares of the capital stock of LAN, Holdco 2 or Sister
Holdco:
(a) Conversion of Holdco 2
Stock. Each share of Holdco 2 Stock issued and
outstanding immediately prior to the Effective Time shall cease to be issued and
outstanding, shall be cancelled and retired, shall cease to exist and shall be
converted into the right to receive a fraction of a validly issued, fully paid
and non-assessable share of LAN Common Stock equal to the Holdco 2 Exchange
Ratio.
(b) Conversion of Sister Holdco
Stock. Each share of Sister Holdco Stock issued and
outstanding immediately prior to the Effective Time shall cease to be issued and
outstanding, shall be cancelled and retired, shall cease to exist and shall be
converted into the right to receive a fraction of a validly issued, fully paid
and non-assessable share of LAN Common Stock equal to the Sister Holdco Exchange
Ratio.
(c) Merger Consideration.
The shares of LAN Common Stock issuable as a result of the Mergers together with
the amount of any cash in lieu of fractional shares of LAN Common Stock payable
pursuant to Section 2.05 are collectively referred to herein as the “Merger
Consideration.” All shares of LAN Common Stock to be issued
pursuant to the Mergers shall be deemed issued and outstanding as of the
Effective Time.
-16-
SECTION
2.02. Treatment of TAM Stock
Options. On or
prior to the Commencement Date, TAM and the TAM Board, as applicable, shall
adopt any resolutions and take any actions necessary to ensure that (a) from and
after the Effective Time each TAM Stock Option outstanding immediately prior to
the Effective Time, whether vested or unvested, shall be exercisable only when
vested and only for an amount in cash equal to the product of (i) the total
number of shares of TAM Stock in respect of which such TAM Stock Option is
exercisable and (ii) the amount (if any) by which (x) the product of
the Holdco 2 Exchange Ratio and the closing price per share of the LAN Common
Stock on the SSE on the last business day prior to the date on which such TAM
Stock Option was exercised exceeds (y) the exercise price per share of TAM Stock
under such TAM Stock Option less any applicable Taxes required to be withheld
with respect to such payment, and (b) none of execution, delivery or performance
of this Agreement or the consummation of the Mergers or any other transactions
contemplated by this Agreement shall, directly or indirectly, cause or result in
any acceleration of the vesting of any TAM Stock Options, whether prior to, on
or after the Effective Time.
SECTION
2.03. Payment of Merger
Consideration; Deposit with Exchange Agent. Prior
to the Effective Time, LAN will appoint an exchange agent reasonably acceptable
to TAM (the “Exchange
Agent”) and deposit or cause to be deposited with the Exchange Agent, for
the benefit of the holders of Holdco 2 Stock and Sister Holdco Stock,
certificates or, at LAN’s option, evidence of shares in book entry form,
representing shares of LAN Common Stock in such denominations as the Exchange
Agent may reasonably specify, including any cash to be paid in lieu of
fractional shares of LAN Common Stock pursuant to Section 2.05. Such
certificates or evidence of book-entry form, as the case may be, for shares of
LAN Common Stock and such cash are hereinafter referred to collectively as the
“Exchange
Fund.” The Exchange Agent shall invest any cash deposited with
the Exchange Agent by LAN as directed by LAN; provided that no such
investment or losses thereon shall affect the cash payable to holders of
Holdco 2 Stock or Sister Holdco Stock in lieu of fractional shares of LAN
Common Stock pursuant to Section 2.05, and LAN shall promptly provide additional
funds to the Exchange Agent for the benefit of holders of shares of
Holdco 2 Stock and Sister Holdco Stock entitled to receive such amounts
equal to the amount of any such losses. Any interest or income
produced by such investments shall not be deemed part of the Exchange Fund and
shall be payable to LAN.
SECTION
2.04. Stock Transfer
Books. At
the Effective Time, the stock transfer books of each of Holdco 2 and Sister
Holdco shall be closed and thereafter there shall be no further registration of
transfers of any shares of the capital stock of such companies that were
outstanding immediately prior to the Effective Time.
SECTION
2.05. Fractional
Shares. Notwithstanding
anything in this Agreement
to the contrary, no certificates or scrip representing fractional shares of LAN
Common Stock shall be issued in the Mergers or pursuant to the statutory squeeze
out and such fractional shares will not entitle the owner thereof to vote or to
any rights of a shareholder of LAN. In lieu of such fractional
shares, LAN shall pay each holder thereof an amount in cash in U.S. Dollars
equal to the product of (a) the fractional shares of LAN Common Stock to
which such holder would otherwise be entitled after taking into account all
shares of Holdco 2 Stock or Sister Holdco Stock owned of record by such
holder immediately prior to the Effective Time (collectively as to each record
holder, its “Eligible
Shares”) and (b) the closing price of the shares of LAN Common Stock
on the SSE on the last trading day immediately preceding the Effective Time (as
reported in www.bolsadesantiago.com or, if not reported therein, by another
authoritative source).
-17-
SECTION
2.06. Withholding. Each
of LAN and the Exchange Agent shall be entitled to deduct and withhold from the
consideration otherwise payable in cash pursuant to this
Agreement to any holder of Eligible Shares such amounts as it is required to
deduct and withhold with respect to the making of such payment under applicable
Tax Law. To the extent that amounts are so withheld by LAN or the
Exchange Agent with respect to any Eligible Shares, such withheld amounts shall
be remitted to the applicable Governmental Entity and shall be treated for all
purposes of this Agreement as having been paid to the holder of such Eligible
Shares in respect of which such deduction and withholding was made by LAN or the
Exchange Agent.
SECTION
2.07. Value of TAM
Stock. The
parties agree that the monetary value of the subscriptions and payments for the
shares of TEP Chile Stock, Holdco 1 Stock, Holdco 2 Stock and Sister Holdco
Stock pursuant to each of the Subscriptions shall be equivalent to the net asset
value of the shares contributed as payment for such subscription when
such payment is made.
ARTICLE
III
COVENANTS
SECTION
3.01. Conduct of Business Pending
the Mergers. Each
of LAN and TAM is sometimes referred to in this Article III as a “Party.” During
the period from the date of this Agreement until the Effective Time, except as
specifically set forth in Schedule 3.01 hereto with respect to such Party (to
the extent such Schedule relates to a Party, its “Disclosure
Schedule”), as consented to in writing in advance by the other Party or
as otherwise expressly required by this Agreement or required by applicable Law,
each Party shall, and shall cause each of its Subsidiaries to, carry on its
business in the ordinary course consistent with past practice and, to the extent
consistent therewith, use its commercially reasonable efforts to preserve intact
its current business organizations, keep available the services of its current
officers, employees and consultants and maintain all Licenses necessary for it
and its Subsidiaries to own, lease or operate their properties, rights and other
assets and to carry on their business and operations conducted at the date of
this Agreement and its existing relationships and goodwill with its employees,
customers, suppliers, licensors, licensees, strategic partners and any other
Person with whom it conducts business. Notwithstanding and without
limiting the generality of the foregoing, during the period from the date of
this Agreement until the Effective Time, except as otherwise set forth in
Section 3.01 of such Party’s Disclosure Schedule or as otherwise expressly
required pursuant to this Agreement or by applicable Law, each Party shall not,
and shall not permit any of its Subsidiaries to, directly or indirectly, without
the other Party’s prior written consent:
-18-
(a) (i) make,
declare or pay any dividend, or make any other distribution (whether in cash,
stock or property), on or in respect of any of its Equity Securities, other than
(A) dividends or distributions paid or made by a direct or indirect wholly
owned Subsidiary of such Party to such Party or another direct or indirect
wholly owned Subsidiary of such Party and (B) regular dividends paid to
such Party’s shareholders in accordance with the dividend policy approved at the
last regular meeting of its shareholders in an amount not to exceed 50% (in the
case of LAN) and 25% (in the case of TAM) of such Party’s net income for the
year in respect of which the dividends are paid, (ii) adjust, split,
combine, subdivide or reclassify any of its Equity Securities or issue or
authorize the issuance of any other securities in respect of, in lieu of or in
substitution for its Equity Securities or (iii) purchase, redeem or
otherwise acquire any Equity Securities or Convertible Securities of such Party
or any of its Subsidiaries or any other securities thereof or any rights,
warrants or options to acquire any such shares or other securities, except for
any such purchases, redemptions or other acquisitions (A) required by the
terms of the TAM Stock Plans or LAN Stock Plans (as applicable) or
(B) required by the terms of any plans, arrangements or Contracts existing
on the date of this Agreement between such Party or any of its Subsidiaries, on
the one hand, and any director or employee of such Party or any of its
Subsidiaries, on the other hand, if (but only if) complete and accurate copies
of which have been provided to the other Party prior to the date of this
Agreement (for this purpose each Party shall be deemed to have provided to the
other Party copies of all documents made available to the other Party at least
three business days prior to the date of this Agreement by inclusion in the
electronic data room used by the Parties in connection with the transactions
contemplated by this Agreement);
(b) issue,
deliver, sell, grant, pledge or otherwise encumber or subject to any Lien any
Equity Securities or Convertible Securities of such Party or any of its
Subsidiaries, or any “phantom” stock, “phantom” stock rights, stock option,
stock purchase or appreciation rights or stock-based performance units relating
to or permitting the purchase of any such Equity Securities or Convertible
Securities, including pursuant to Contracts as in effect on the date of this
Agreement, other than any (i) issuance of Equity Securities of such Party
upon the exercise of TAM Stock Options or LAN Stock Options (as applicable)
outstanding as of the date of this Agreement and in accordance with their terms
and the TAM Stock Plans or LAN Stock Plans (as applicable) as in effect on the
date of this Agreement or (ii) issuances of Equity Securities or
Convertible Securities by any direct or indirect wholly owned Subsidiary of such
Party to such Party or any other direct or indirect wholly owned Subsidiary of
such Party;
(c) except
as otherwise expressly contemplated in this Agreement, amend such Party’s
By-laws in any way or amend any of the TAM Subsidiary By-laws or LAN Subsidiary
By-laws (as applicable) in any way that is or would reasonably be expected to be
materially adverse to such Party and its Subsidiaries, taken as a
whole;
-19-
(d) other
than in the ordinary course of business consistent with past practice, directly
or indirectly make, or agree to directly or indirectly make, any acquisition or
investment either by merger, consolidation, purchase of stock or securities,
contributions to capital, property transfers, or by purchase of any property or
assets of any other Person, or make any capital expenditures, in each case other
than (i) investments in existing wholly owned Subsidiaries of such Party,
(ii) acquisitions of, or improvements to, assets used in the operations of
such Party and its Subsidiaries in the ordinary course of business,
(iii) short-term investments of cash in marketable securities in the
ordinary course of business, (iv) capital expenditures disclosed in such
Party’s capital plans for 2010 and 2011 provided to the other Party prior to the
date of this Agreement (provided that such Party
shall be permitted to reallocate all or any portion of any capital expenditures
set forth in its 2010 capital plan to its 2011 capital plan and, without
duplication, all or any portion of any capital expenditures set forth in its
2011 capital plan to its 2010 capital plan) plus capital expenditures (other
than with respect to the purchase or lease of aircraft or engines) in any year
that do not in the aggregate exceed 10% of the aggregate amount set forth in the
capital budget set forth in Section (d) of such Party’s Disclosure Schedule in
respect of such year, and (v) acquisitions of properties or assets that are
not material to such Party and its Subsidiaries, taken as a whole;
(e) sell,
lease, assign, license, grant, extend, amend, subject to Liens, waive or modify
any material rights in or to, cancel, abandon or allow to lapse, or otherwise
transfer or dispose of, or agree to take or permit any such action, all or any
part of its assets, rights (including, in the case of TAM, the Multiplus S.A.
brand name) or properties (including Equity Securities or Convertible Securities
of any Subsidiary of such Party or any Indebtedness of others owed to such Party
or any of its Subsidiaries) which are material, individually or in the
aggregate, to such Party and its Subsidiaries, taken as a whole, other than
(i) internal reorganizations or consolidations involving only such Party
and one or more of its existing wholly owned Subsidiaries that would not present
a material risk of any material delay in the receipt of any regulatory approval
required in connection with the consummation of the transactions contemplated
hereby, (ii) dispositions disclosed in such Party’s Disclosure Schedule,
(iii) any Liens securing Indebtedness permitted pursuant to this Agreement,
dispositions of surplus aircraft, engines, flight simulators and terminations of
leases relating to surplus aircraft and engines (including mainline and regional
aircraft) consistent with past practice, and (iv) other dispositions of
assets, properties or rights if the fair market value of the total consideration
received therefrom does not exceed in the aggregate the amount set forth in
Section (e) of such Party’s Disclosure Schedule;
(f) incur
any Indebtedness, or make any loan or advance other than (i) Indebtedness
incurred in the ordinary course of business consistent with past practice (it
being agreed that any financing (including any sale-leaseback transaction) of
aircraft or equipment used in the operations of such Party or its Subsidiaries
(including engines, spare parts, simulators, technology, gates, routes, Slots,
tangible property and ground equipment) and any renewal or refinancing of any
such financing shall be deemed to be in the ordinary course; provided that any such
financing is entered into on terms reflecting prevailing market conditions at
that time), (ii) Indebtedness that does not exceed $10 million in the
aggregate, (iii) refinancings, prepayments, repurchases and redemptions in
the ordinary course of business consistent with past practice of any
Indebtedness outstanding as of the date of this Agreement or permitted to be
incurred under this Agreement, (iv) employee loans or advances made in the
ordinary course of business consistent with past practice not to exceed $5
million individually or $10 million in the aggregate in any 12-month period, or
(v) loans or advances made solely among such Party and any of its wholly
owned Subsidiaries or solely among wholly owned Subsidiaries of such
Party;
-20-
(g) settle
or compromise any Action other than settlements or compromises of Actions where
the amount paid (less the amount reserved for such matters by such Party) in
settlement or compromise, in each case, does not exceed the amount set forth in
Section (g) of such Party’s Disclosure Schedule;
(h) other
than in the ordinary course of business, (i) enter into any Contract which
if it existed on the date of this Agreement would have been a TAM Material
Contract or LAN Material Contract (as applicable), (ii) terminate, amend,
supplement or modify in any material respect any TAM Material Contract or LAN
Material Contract (as applicable) or rights or obligations thereunder or
(iii) waive, release, cancel, convey, encumber or otherwise transfer any
material rights or claims thereunder;
(i)
make any material changes to the policies or work rules
applicable to any group of employees or labor union;
(j)
except as required (x) by applicable Law or
(y) by any Benefit Plan specifically listed on Section (j) of such Party’s
Disclosure Schedule, (i) adopt, enter into, terminate, modify, amend or
grant any waiver or consent in respect of any material Benefit Plan or, other
than with respect to the hiring of any Person whose annual compensation
(including target bonus payments) does not exceed $500,000, any other Benefit
Plan, Contract, plan or policy involving such Party or any of its Subsidiaries
and any current or former employee, independent consultant, officers or
directors of such Party or any of its Subsidiaries (collectively as to such
Party, its “Employees”),
except in the ordinary course of business consistent with past practice with
respect to Employees who are not Key Personnel, (ii) grant any severance or
termination payment to any Employee or increase the compensation of any Employee
except for increases in compensation of Employees who are not Key Personnel made
in the ordinary course of business consistent with past practice,
(iii) remove any existing restrictions in any Benefit Plans or awards made
thereunder, (iv) take any action to fund or in any other way secure the
payment of compensation or benefits (including in respect of TAM Stock Options
or LAN Stock Options (as applicable)) under any Benefit Plan, (v) take any
action to accelerate the vesting or payment of any compensation or benefit
(including in respect of TAM Stock Options or LAN Stock Options (as applicable))
under any Benefit Plan or awards made thereunder, (vi) except as required
by any Benefit Plan as in effect as of the date of this Agreement and except for
normal payments, awards and increases in the ordinary course of business
consistent with past practice, increase in any manner the compensation or fringe
benefits of any Employee or pay any amount or benefit (including in respect of
TAM Stock Options or LAN Stock Options (as applicable)) not required by any
Benefit Plan as in effect as of the date of this Agreement or (vii) grant
any retention, stay, transaction or similar bonuses, payments or rights to any
Employee;
-21-
(k) (i) except
as required by applicable Law, the International Financial Reporting Standards
issued by the International Accounting Standards Board (“IFRS”)
or regulatory guidelines, make any material change in its accounting methods,
principles or practices, (ii) make or change any material Tax election,
settle or compromise any material Tax liability, amend any material Tax return,
change any material method of Tax accounting, enter into any material closing
agreement with respect to any Tax or surrender any right to claim a material Tax
refund, or (iii) replace or change its current independent
auditors;
(l)
enter into (i) any new line of business
that is material to such Party and its Subsidiaries, taken as a whole, or
(ii) any agreement or arrangements that would be required to be disclosed
by such Party pursuant to Item 404 of Regulation S-K promulgated under the U.S.
Securities Act of 1933, as amended (including the rules and regulations
promulgated thereunder);
(m) adopt
a plan of complete or partial liquidation or resolutions providing for or
authorizing such a liquidation or a dissolution or any restructuring,
recapitalization or reorganization;
(n) enter
into, amend or otherwise become bound by any Contract if (i) such Contract
would, after the Effective Time, restrict or limit the ability of LAN, TAM or
any of their respective Subsidiaries to engage in any business or line of
business in any manner, with any other Person or in any geographic area;
(ii) such Contract would reasonably be expected to prevent or materially
impede, interfere with, hinder or delay the commencement of the Exchange Offer
or the consummation the Exchange Offer, the Mergers or the other transactions
contemplated by this Agreement or to adversely affect in a material respect the
expected benefits (taken as a whole) of the Exchange Offer and the Mergers; or
(iii) the consummation of the Exchange Offer, the Mergers or any of the other
transactions contemplated hereby would conflict with, or result in any violation
or breach of, or default (with or without notice, lapse of time or both) under,
or result in any termination or modification of or acceleration under, or any
change in any right, obligation or benefit under, or result in any Lien on any
property or assets of such Party or any of its Subsidiaries under, any
provisions of such Contract;
(o) take
or fail to take any action for the purpose of preventing or delaying, or that
would reasonably be expected to prevent or delay, the satisfaction of any of the
conditions to the commencement of the Exchange Offer or the consummation of the
Exchange Offer, the Mergers or the other transactions contemplated by this
Agreement, including any action that would reasonably be expected to prevent or
delay the ability of the parties hereto to obtain any required approval, consent
or other authorization of or from any Airline Regulatory Entities or other
Governmental Entity;
-22-
(p) cancel,
terminate or amend any binding financing commitment to fund the acquisition by
such Party or any of its Subsidiaries of the aircraft covered under any TAM
Aircraft Contract or LAN Aircraft Contract (as applicable) unless, in the case
of any cancellation or termination of such financing commitment, (i) it is
replaced by another financing with substantially equivalent (or more favorable)
terms and in an amount not less than the amount of such commitment or
(ii) in return therefor, such Party and/or its Subsidiaries receives
equivalent value from the manufacturer of the applicable aircraft;
(q) enter
into (i) any aircraft purchase agreement, engine purchase agreement or
engine maintenance agreement that involves or is reasonably expected to involve
aggregate payments by or to such Party or any of its Subsidiaries in excess of
$25 million in any twelve-month period or (ii) any amendment to an existing
aircraft purchase agreement, engine purchase agreement or engine maintenance
agreement that is material to such agreement;
(r)
enter into, amend or otherwise become
bound by, cancel or terminate any (i) alliance or brand alliance agreement, (ii)
code sharing agreement, (iii) frequent flyer participation agreement, (iv)
capacity purchase or similar agreement, (v) cooperation, joint venture, profit
or revenue sharing agreement, (vi) special prorate agreement or
(vii) interlining agreement with any Person; or
(s) authorize
any of, or commit, resolve, propose or agree to take any of, the foregoing
actions.
Notwithstanding
the foregoing limitations, the parties intend that each Party and its
Subsidiaries shall at all times prior to the Effective Time conduct their
business in compliance with all applicable Antitrust Laws, and the limitations
set forth in this Section 3.01 are not intended to, and shall not be
interpreted as, contravening any applicable Antitrust Laws.
-23-
SECTION
3.02. No
Solicitation. (a) Each
of the parties to this Agreement agrees that it will not, and it will cause each
of its Subsidiaries, each of its and their directors, officers, employees,
Affiliates, financial advisors, attorneys, accountants or other advisors, agents
and representatives and each of the individuals who ultimately beneficially own
it (collectively as to each party, its “Representatives”)
not to, directly or indirectly, (i) solicit, initiate or encourage any
inquiries or the making or consummation of any proposal or offer that
constitutes, or is reasonably likely to lead to, an Alternative Proposal with
respect to its Relevant Parent Entity, (ii) engage in, continue or
otherwise participate in any discussions or negotiations regarding, or provide
to any Person any non-public information or data in connection with, or
otherwise cooperate in any way with, any such Alternative Proposal,
(iii) waive, terminate, modify or fail to enforce any provision of any
“standstill” or similar obligation of any Person, (iv) enter into any
binding or non-binding Contract with respect to any such Alternative Proposal or
(v) otherwise knowingly facilitate any effort or attempt to make any such
Alternative Proposal. Each party shall notify its Representatives of
the restrictions imposed by the preceding sentence and instruct them to comply
with those restrictions, and any failure by any of them to so comply will be a
breach of this Agreement by such party. Each party shall, and shall
cause its Representatives to, immediately cease and cause to be terminated all
existing activities, discussions or negotiations with any Person conducted prior
to the date of this Agreement with respect to any Alternative Proposal relating
to its Relevant Parent Entity and request the prompt return or destruction of
all confidential information previously furnished in connection
therewith.
The term
“Alternative
Proposal” means, with respect to each Relevant Parent Entity, any of the
following actions or any proposal or offer (including any proposal or offer to
or from any Representative of any party) by any Person or group (as defined in
Rule 13d-3 or 13d-5 promulgated under the U.S. Exchange Act) relating to,
or that could reasonably be expected to lead to, any of the following:
(i) any direct or indirect acquisition, purchase, lease, license or
outsourcing, in one transaction or a series of related transactions, of any
assets (including Equity Securities of any Subsidiary of such Relevant Parent
Entity), rights, properties, services or businesses of such Relevant Parent
Entity or any of its Subsidiaries collectively representing more than 25% of the
fair market value of the Relevant Parent Entity’s total assets or collectively
generating or contributing 25% or more of the Relevant Parent Entity’s total
consolidated revenues or operating income during the last fiscal year,
(ii) any tender offer or exchange offer that, if consummated, would result
in any Person or group beneficially owning any Equity Securities of such
Relevant Parent Entity, or (iii) any merger, consolidation, business
combination, recapitalization, issuance or amendment of securities, liquidation,
dissolution, joint venture, share exchange or similar transaction involving such
Relevant Parent Entity or any of its Subsidiaries.
The term
“Relevant
Parent Entity” means (i) with respect to TAM, the TAM Direct Controlling
Shareholder and the Amaro Family, TAM, and (ii) with respect to LAN and the LAN
Controlling Shareholders, LAN.
(b) In
addition to the foregoing obligations, each party agrees that it shall (i) as
promptly as practicable (and in any event within 24 hours after receipt) advise
the other parties orally and in writing of the receipt of any Alternative
Proposal relating to its Relevant Parent Entity, the material terms and
conditions of such Alternative Proposal (including any changes thereto) and the
identity of the Person making such Alternative Proposal, (ii) keep the other
parties fully informed in all material respects of the status and details
(including any changes to the terms) of such Alternative Proposal and
(iii) provide to the other parties as soon as practicable after receipt or
delivery thereof copies of all correspondence and other written material sent or
provided to it, such Relevant Parent Entity or any of their Representatives from
any Person that describes any of the terms or conditions of such Alternative
Proposal.
-24-
(c) Nothing
contained in this Section 3.02 shall prohibit any Relevant Parent Entity
from complying with its disclosure obligations under any applicable
Law.
SECTION
3.03. Public
Announcements. Each
party shall consult with the other parties before issuing, and give each other
party the opportunity to review and comment upon, any press release or other
public statements with respect to the transactions contemplated by this
Agreement, including the Exchange Offer and Mergers, and shall not issue any
such press release or make any such public statement prior to such consultation,
except as such party may reasonably conclude is required by applicable Law,
court process or by obligations pursuant to any listing agreement with, or rules
of, any national securities exchange or national securities quotation system on
which such party’s securities are listed or quoted. The parties agree
that the initial press release to be issued with respect to the execution and
delivery of this Agreement shall be in the form heretofore agreed to by the
parties.
SECTION
3.04. Stockholder
Actions. Each
Relevant Parent Entity shall give the other the opportunity to participate in
the defense or settlement of any stockholder Action against such Relevant Parent
Entity and/or its directors or officers relating to the transactions
contemplated by this Agreement, and no such settlement shall be agreed to
without the other Relevant Parent Entity’s prior written consent.
ARTICLE
IV
TERMINATION,
AMENDMENT AND WAIVER
SECTION
4.01. Termination. This
Agreement shall terminate and the Mergers shall be abandoned automatically
if and when (i) the Exchange Offer expires in accordance with its terms or
is revoked with the permission of the CVM, in each case without the purchase of
any shares of TAM Stock or (ii) the product of 0.9 and the high end of the range
of economic value of LAN per share of LAN Common Stock as determined by the
Appraiser at any time is less than the low end of the range of economic value of
TAM per share of TAM Stock as determined by the Appraiser at such time (an
“Appraisal
Event”). In addition, this Agreement may be terminated and the
Exchange Offer and the Mergers may be abandoned at any time prior to the
commencement of the Exchange Offer, whether before or after receipt of any
Requisite Shareholder Approvals:
(a) by
mutual written consent of LAN and the Amaro Family;
(b) by
either LAN or the Amaro Family:
(i) if
the ANAC Approval has not been obtained or for any other reason the Exchange
Offer shall not have commenced on or before December 30, 2011 (the “Outside
Date”); or
(ii) if
the vote of the holders of LAN Common Stock at the LAN Shareholders Meeting to
approve the Mergers and the other transactions contemplated hereby shall have
been taken and completed and the Requisite LAN Shareholder Approval shall not
have been obtained;
-25-
provided, however, that the right to
terminate this Agreement under this Section 4.01(b) or Section 4.01(e) shall not
be available to any party whose breach of a covenant in this Agreement has been
a principal cause of the failure of the Exchange Offer to commence by the
Outside Date or the failure of the condition giving rise to such termination
right, as applicable;
(c) by
LAN, if (i) the TAM Board fails to make and publicly announce the TAM Board
Transaction Recommendation promptly after the date of this Agreement or the TAM
Board Exchange Offer Recommendation prior to the first TAM Shareholders Meeting,
(ii) the TAM Board or any committee thereof (x) withholds, withdraws or modifies
or qualifies in any manner adverse to LAN either of the TAM Board
Recommendations, (y) approves, adopts, or recommends any Alternative Proposal,
or (z) makes, causes to be made or resolves to make or cause to be made any
public statement proposing or announcing an intention to take any of the
foregoing actions (collectively, a “TAM
Recommendation Change”) or (iii) the TAM Board shall have failed to
publicly reaffirm the TAM Board Recommendations as promptly as practicable (but
in any event within two business days) after receipt of a written request by LAN
to provide such reaffirmation, and in either such case all of the directors
designated for election to the TAM Board by the TAM Direct Controlling
Shareholder and/or the Amaro Family did not vote against the TAM Recommendation
Change or in favor of reaffirming the TAM Board Recommendations;
(d) by
the Amaro Family, if (i) the LAN Board fails to make the LAN Board Transaction
Recommendation promptly after the date of this Agreement or the LAN Board Merger
Recommendation on or prior to the LAN Shareholder Meeting, (ii) the LAN Board or
any committee thereof (x) withholds, withdraws or modifies or qualifies in any
manner adverse to TAM either of the LAN Board Recommendations, (y) approves,
adopts, or recommends any Alternative Proposal, or (z) makes, causes to be made
or resolves to make or cause to be made any public statement proposing or
announcing an intention to take any of the foregoing actions (collectively, a
“LAN
Recommendation Change”) or (iii) the LAN Board shall have failed to
publicly reaffirm the LAN Board Recommendations as promptly as practicable (but
in any event within two business days) after receipt of a written request by TAM
to provide such reaffirmation, and in either such case all of the directors
designated for election to the LAN Board by the LAN Controlling Shareholders did
not vote against the LAN Recommendation Change or in favor of reaffirming the
LAN Board Recommendations; or
(e) by
either LAN or the Amaro Family if TAM has called five TAM Shareholders Meetings
pursuant to Section 1.09(b) and a quorum has not been present at any such
meeting or if a quorum was present and the vote of the holders of the Free Float
Shares at the TAM Shareholders Meeting to select an Appraiser shall have been
taken and completed but the Requisite TAM Shareholder Approval shall not have
been obtained.
-26-
SECTION
4.02. Effect of
Termination. (a) In
the event of termination of this Agreement by either LAN or the Amaro Family as
provided in Section 4.01, this Agreement shall forthwith become void and
have no effect, without any liability or obligation on the part of LAN, TAM or
any other party hereto under this Agreement, other than Section 4.01, this
Section 4.02, Section 4.04 and Article V, which provisions shall
survive such termination. Notwithstanding the foregoing or any
termination or anything to the contrary in this Agreement, no party to this
Agreement shall be relieved or released from liability for damages of any kind
(whether or not communicated or contemplated at the time of execution of this
Agreement), including consequential damages and including as damages any value
lost by shareholders of LAN or TAM, as the case may be, based on the
consideration that would otherwise have been paid and the benefits that would
otherwise have accrued to such shareholders, which arise out of or result from
any deliberate breach of any covenant of this Agreement. No party
claiming that any such breach has occurred will have any duty or otherwise be
obligated to mitigate any such damages. For purposes of this
Section 4.02, a “deliberate” breach of any covenant of a party shall be
deemed to have occurred only if such party or its Representatives took the
action or failed to take the action that constituted a breach with actual
knowledge that the action so taken or omitted to be taken constituted a breach
of such covenant.
(b) In
the event that this Agreement is terminated by LAN pursuant to
Section 4.01(c), then TAM shall pay LAN a fee equal to $200 million
(the “TAM
Termination Fee”) by wire transfer of same-day funds no later than the
second business day following the date of such termination and shall reimburse
LAN for all documented out-of-pocket expenses incurred by it or any of its
Subsidiaries in connection with this Agreement and the transactions contemplated
hereby up to a maximum amount of $25 million (collectively, the “LAN
Reimbursable Expenses”) by wire transfer of same-day funds no later than
the second business day after TAM receives the documentation
therefor.
(c) In
the event that this Agreement is terminated by the Amaro Family pursuant to
Section 4.01(d), then LAN shall pay TAM a fee equal to $200 million
(the “LAN
Termination Fee”) by wire transfer of same-day funds no later than the
second business day following the date of such termination and shall reimburse
TAM for all documented out-of-pocket expenses incurred by it or any of its
Subsidiaries in connection with this Agreement and the transactions contemplated
hereby up to a maximum amount of $25 million
(collectively, the “TAM
Reimbursable Expenses”) by wire transfer of same-day funds no later than
the second business day after LAN receives the documentation
therefor.
(d) In
the event that any Person shall have made an Alternative Proposal with respect
to TAM or LAN (any Alternative Proposal with respect to TAM or LAN, a “Competing
Proposal”) to any party hereto or any Representative of any party hereto,
a Competing Proposal by any Person shall have become publicly known or any
Person shall have publicly announced an intention (whether or not conditional)
to make a Competing Proposal and thereafter:
-27-
(i) (A) this
Agreement is terminated by either LAN or the Amaro Family pursuant to
Section 4.01(b)(ii) or Section 4.01(e) or automatically terminates
pursuant to the first sentence of Section 4.01 solely because either of the
Minimum Conditions (as defined in the terms of the Exchange Offer) is not
satisfied or because an Appraisal Event occurs and (B) at any time prior to
the date that is 12 months after the date of any such termination, TAM or
any of its Subsidiaries consummates any transaction with such Person or any of
its Affiliates that constitutes a Competing Proposal, enters into any binding or
non-binding Contract with such Person or any of its Affiliates providing for a
transaction that constitutes a Competing Proposal or the TAM Board approves or
recommends to its shareholders or does not oppose any Competing Proposal made by
such Person or any of its Affiliates (in each case regardless of whether such
Competing Proposal was made or announced or became publicly known before or
after termination of this Agreement), then TAM shall pay to LAN, by wire
transfer of same-day funds, the TAM Termination Fee on the date of the first to
occur of the event(s) referred to above in clause (B) of this
Section 4.02(d)(i) and shall reimburse LAN for all of the LAN Reimbursable
Expenses by wire transfer of same-day funds no later than the second business
day after TAM receives the documentation therefor.
(ii) (A) this
Agreement is terminated by either LAN or the Amaro Family pursuant to
Section 4.01(b)(ii) or Section 4.01(e) or automatically terminates
pursuant to the first sentence of Section 4.01 solely because either of the
Minimum Conditions (as defined in the terms of the Exchange Offer) is not
satisfied or because an Appraisal Event occurs and (B) at any time prior to
the date that is 12 months after the date of any such termination, LAN or
any of its Subsidiaries consummates any transaction with such Person or any of
its Affiliates that constitutes a Competing Proposal, enters into any binding or
non-binding Contract with such Person or any of its Affiliates providing for a
transaction that constitutes a Competing Proposal or the LAN Board approves or
recommends to its shareholders or does not oppose any Competing Proposal made by
such Person or any of its Affiliates (in each case regardless of whether such
Competing Proposal was made, announced or became publicly known before or after
termination of this Agreement), then LAN shall pay to TAM, by wire transfer of
same-day funds, the LAN Termination Fee on the date of the first to occur of the
event(s) referred to above in clause (B) of this Section 4.02(d)(ii)
and shall reimburse TAM for all of the TAM Reimbursable Expenses by wire
transfer of same-day funds no later than the second business day after LAN
receives the documentation therefor.
-28-
(e) TAM
and LAN acknowledge and agree that the agreements contained in
Section 4.02(b), Section 4.02(c) and Section 4.02(d) are an
integral part of the transactions contemplated by this Agreement, and that,
without these agreements, neither party would enter into this Agreement;
accordingly if any party fails promptly to pay the amount due pursuant to any
such Section and, in order to obtain such payment, the other party commences a
suit that results in a judgment against such party for all or a portion of the
TAM Termination Fee or the LAN Termination Fee, as applicable, such party shall
pay to the other party its costs and expenses (including reasonable attorneys’
fees and expenses) in connection with such suit, together with interest on the
amount of the TAM Termination Fee or the LAN Termination Fee, as applicable,
accruing from the date such payment was required to be made pursuant to Section
4.02 until the date of payment at the six-month LIBOR rate in effect on the date
such payment was required to be made
plus 3%. The right to receive the fees and expenses payable pursuant
to Section 4.02(b), Section 4.02(c) and Section 4.02(d) shall be
in addition to, and not in lieu of, any other remedies a party may have at law
or in equity with respect to breaches of this Agreement by the other
party.
SECTION
4.03. Amendment. This
Agreement may be amended by the parties hereto at any time prior to the
commencement of the Exchange Offer but only by an instrument in writing signed
by all of the parties hereto.
SECTION
4.04. Extension;
Waiver. At
any time prior to the Effective Time, the parties may (but shall not be under
any obligation to) (a) extend the time for the performance of any of the
obligations or other acts of the other parties or (b) waive compliance with
any of the agreements of the other parties or any of the conditions for its
benefit contained herein, in each case to the extent permitted by applicable
Law. Any agreement on the part of a party to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed by
such party. The failure of any party to this Agreement to assert any
of its rights under this Agreement or applicable Law shall not constitute a
waiver of such rights and, except as otherwise expressly provided in this
Agreement, no single or partial exercise by any party to this Agreement of any
of its rights under this Agreement shall preclude any other or further exercise
of such rights or any other rights under this Agreement or applicable
Law.
ARTICLE
V
GENERAL
PROVISIONS
SECTION
5.01. Nonsurvival. None
of the covenants contained in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Effective Time; provided, however, that notwithstanding
the foregoing, this Article V and the covenants and agreements of the
parties in Article I and Article II to the extent they contemplate
performance after the Effective Time shall survive the Effective
Time.
SECTION
5.02. Fees and
Expenses. Except
as provided in Section 4.02, all fees and expenses incurred in connection
with this Agreement, the Exchange Offer, the Mergers and the other transactions
contemplated by this Agreement shall be paid by the party incurring such fees or
expenses, whether or not the Exchange Offer is commenced or the Exchange Offer
and the Mergers are consummated.
-29-
SECTION
5.03. Notices. Except
for notices that are specifically required by the terms of this Agreement to be
delivered orally, all notices, requests, claims, demands, instructions and other
communications or documents given hereunder shall be in writing and shall be
delivered personally or sent by registered or certified mail (postage prepaid),
facsimile or overnight courier to the parties at the following addresses (or at
such other address for a party as shall be specified by like
notice):
If to LAN
or the LAN Controlling Shareholders, to:
Claro y
Cia.
Apoquindo
3721, piso 13,
Santiago,
Chile
Attention: José
María Eyzaguirre B.
Fax: +562
3673003
jmeyzaguirre@claro.cl
with
copies (which shall not constitute notice) to:
Sullivan
& Cromwell LLP
125 Broad
Street
New York,
NY 10004
United
States of America
Attention: Sergio
Galvis and Duncan McCurrach
Fax: +1
212-558-3588
galviss@sullcrom.com
mccurrachd@sullcrom.com
If to TAM
to:
TAM
S.A.
Av.
Jurandir, 856, Lote 4
04072-000
São Paulo
– SP
Brasil
Attention:
Marco Antonio Bologna
Fax: +55
(11) 5582-9879
marco.bologna@tam.com.br
-30-
with a
copy (which shall not constitute notice) to:
Turci
Advogados
Rua Dr.
Renato Paes de Barros, 778
-1◦ andar
– cj.12
04530-0001
São Paulo
– SP
Brasil
Attention:
Flavia Turci
Fax: +55
11 2177 2197
turci@turci.com
Clifford
Chance US LLP
31 West
52nd Street
New York,
NY 10019
Attention:
Sarah Jones and Anand Saha
Fax: +1
212 878 8375
Sarah.Jones@CliffordChance.com
Anand.Saha@CliffordChance.com
If to the
TAM Direct Controlling Shareholder or the Amaro Family to:
Turci
Advogados
Rua Dr.
Renato Paes de Barros, 778
-1◦ andar
– cj.12
04530-0001
São Paulo
– SP
Brasil
Attention:
Flavia Turci
Fax: +55
11 2177 2197
turci@turci.com
with a
copy (which shall not constitute notice) to:
Clifford
Chance US LLP
31 West
52nd Street
New York,
NY 10019
Attention:
Sarah Jones and Anand Saha
Fax: +1
212 878 8375
Sarah.Jones@CliffordChance.com
Anand.Saha@CliffordChance.com
-31-
Any
notice, request, claim, instruction or other communication or document given as
provided above shall be deemed given to the receiving party (i) if delivered
personally, upon actual receipt, (ii) if sent by registered or certified mail,
three business days after deposit in the mail, (iii) if sent by facsimile, upon
confirmation of successful transmission if within one business day after such
facsimile has been sent such notice, request, claim, instruction or other
communication or document is also given by one of the other methods described
above and (iv) if sent by overnight courier, on the next business day after
deposit with the overnight courier.
SECTION
5.04. Definitions. For
the purposes of this Agreement, the following terms shall have the meanings
assigned below:
(a) “Action”
means actions, suits, claims, allegations, hearings, proceedings, arbitrations,
mediations, audits, inquiries or investigations (whether civil, criminal,
administrative or otherwise).
(b) “Affiliate”
shall have the meaning assigned to such term in Rule 12b-2 promulgated under the
U.S. Exchange Act.
(c) “Airline
Regulatory Entities” means ANAC, the Dirección General de Aeronáutica
Civil, the Junta de Aeronáutica Civil, the U.S. Federal Aviation Administration,
the U.S. Department of Transportation, the Federal Communications Commission and
the U.S. Department of Homeland Security, including the U.S. Transportation
Security Administration.
(d) “Antitrust
Law” means any statutes, rules, regulations, orders, decrees,
administrative and judicial doctrines and other Laws that are designed or
intended to prohibit, restrict or regulate actions having the purpose or effect
of monopolization or restraint of trade or lessening of competition through
mergers, acquisitions, business combinations or similar
transactions.
(e) “beneficial
ownership” (and its correlative phrases) shall have the meanings assigned
to such phrases in Rule 13d-3 promulgated under the U.S. Exchange
Act.
(f) “Benefit
Plans” means all employee benefit plans and all profit-sharing plans,
stock purchase, stock option, stock appreciation right, restricted stock,
restricted stock unit, severance, employment, change-in-control, fringe benefit,
collective bargaining, bonus, incentive, deferred compensation, employee loan
and all other employee benefit plans, agreements, programs, policies or other
arrangements maintained for the benefit of any current or former employee,
independent consultant, officer or director of TAM or LAN, as the case may be,
or any of its Subsidiaries by TAM or LAN, as the case may be, or any of its
Subsidiaries or by any trade or business, whether or not incorporated, which
together with TAM or LAN, as the case may be.
-32-
(g) “business
day” means any day that is not a Saturday, Sunday or a day on which
banking institutions are required or authorized by law or executive order to be
closed in Santiago, Chile, São Paulo, Brazil or New York,
New York.
(h) “By-laws”
means the by-laws or comparable organizational documents of a
company.
(i) “Commencement
Date” means the date and time at which the Edital relating to the
Exchange Offer is published in Brazil in accordance with Brazilian Law, which is
the date and time at which the Exchange Offer shall commence.
(j) “Contract”
means any loan, credit agreement, bond, debenture, note, mortgage, indenture,
lease, supply agreement, license agreement, development agreement or other
contract, agreement, obligation, commitment or instrument.
(k) “Control” (and its correlative
terms) shall have the meanings assigned to such terms in Rule 12b-2
promulgated under the U.S. Exchange Act.
(l) “Convertible
Securities” means, with respect to any Person, any securities, options,
warrants or other rights of, or granted by, such Person or any of its Affiliates
that are, directly or indirectly, convertible into, or exercisable or
exchangeable for, any Equity Securities of such Person or any of its
Affiliates.
(m) “Equity
Securities” means, with respect to any Person, any capital stock of, or
other equity interests in such Person.
(n) “Governmental
Entity” means any governmental, quasi-governmental or regulatory
authority, body, department, commission, board, bureau, agency, division, court,
organized securities exchange or other legislative, executive or judicial
governmental entity or instrumentality of any country, nation, republic,
federation or similar entity or any state, county, parish or municipality,
jurisdiction or other political subdivision thereof.
(o) “Indebtedness”
means, with respect to any Person, without duplication, (i) all obligations of
such Person for borrowed money, or with respect to deposits or advances of any
kind to such Person, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (iii) all aircraft operating leases of
such Person, (iv) all capitalized lease obligations of such Person, (v) all
guarantees and arrangements having the economic effect of a guarantee of such
Person of any Indebtedness described in clauses (i) through (iv) above of any
other Person, (vi) all obligations or undertakings of such Person to maintain or
cause to be maintained the financial position or covenants of others or to
purchase the obligations or property of others and (vii) indebtedness in
respect of Swap Contracts designed to hedge against interest rates, foreign
exchange rates or commodities pricing risks incurred in the ordinary course of
business and not for speculative purposes.
-33-
(p) “Intellectual
Property” means, collectively, all (i) trademarks, service marks,
brand names, certification marks, collective marks, d/b/as, internet domain
names, logos, symbols, trade dress, assumed names, fictitious names, trade names
and other indicia of origin, all applications and registrations for the
foregoing, and all goodwill associated therewith and symbolized thereby,
including all renewals of same; (ii) inventions and discoveries, whether
patentable or not, and all patents, registrations, invention disclosures and
applications therefor, including divisionals, continuations,
continuations-in-part and renewal applications, and including renewals,
extensions and reissues; (iii) trade secrets and confidential information and
know-how, including confidential processes, schematics, business methods,
formulae, drawings, prototypes, models, designs, customer lists and supplier
lists; (iv) all rights in published and unpublished works of authorship, whether
copyrightable or not (including computer software and databases (including
source code, object code and all related documentation)), and other compilations
of information, copyrights therein and thereto, and registrations and
applications therefor, and all renewals, extensions, restorations and reversions
thereof; (v) moral rights, rights of publicity and rights of privacy; and (vi)
all other intellectual property or proprietary rights.
(q) “Key
Personnel” means any director, officer or other employee of TAM or any
Subsidiary of TAM with an annual base compensation in excess of
$250,000.
(r) “LAN
Aircraft Contracts” means all Contracts (other than (x) existing aircraft
leases or (y) Contracts that may be terminated or canceled by LAN or any of its
Subsidiaries without incurring any penalty or other material liability except
for the forfeiture of any previously made prepayment or deposit) pursuant to
which LAN or any of its Subsidiaries has a binding obligation to purchase or
lease aircraft.
(s) “LAN
Financial Reporting Documents” means all reports, schedules, forms,
statements, certifications and other documents (including exhibits and other
information incorporated therein) with or to, as applicable, the Superintendencia de Valores
y Seguros or the U.S. Securities and Exchange Commission (the “SEC”)
that were required to be so filed or furnished by LAN since December 31,
2006 and any documents so filed or furnished during such period by LAN on a
voluntary basis.
-34-
(t) “LAN
Material Adverse Effect” means any change, effect, occurrence or
circumstance which, individually or in the aggregate, (i) has had or would
reasonably be expected to have a material adverse effect on the business,
financial condition, results of operations, assets or liabilities of LAN and its
Subsidiaries, taken as a whole, other than (x) any such change, effect,
occurrence or circumstance to the extent resulting from (A) any changes
after the date of this Agreement in general economic or financial market
conditions, (B) any changes after the date of this Agreement generally
affecting the industries in which LAN and its Subsidiaries operate,
(C) changes after the date of this Agreement in IFRS or the interpretation
thereof, (D) geopolitical conditions, the outbreak of a pandemic or other
widespread health crisis, the outbreak or escalation of hostilities, any acts of
war, sabotage or terrorism, or any escalation or worsening of any such acts of
war, sabotage or terrorism threatened or underway as of the date of this
Agreement or (E) any hurricane, tornado, flood, earthquake, volcanic
eruption or natural disaster; provided, however, that the foregoing
clauses (A), (B), (D) and (E) shall not apply to the extent that any such
change, effect, occurrence or circumstance disproportionately impacts LAN and
its Subsidiaries compared to other participants in the industries in which LAN
and its Subsidiaries participate, or (y) any failure, in and of itself, of
LAN to meet any internal or analyst projections, forecasts or estimates of
revenue or earnings or any decrease in the market price or trading volume of the
shares of LAN Common Stock (it being understood, however, that the exception in
this clause (y) shall not apply to the underlying causes of any such failure or
decrease or prevent any of such underlying causes from being taken into account
in determining whether a LAN Material Adverse Effect has occurred); or
(ii) impairs or would reasonably be expected to impair in any material
respect the ability of LAN to consummate the transactions contemplated by this
Agreement or to perform its obligations hereunder on a timely
basis.
(u) “LAN
Material Contract” means any Contract described on Schedule
5.04(u).
(v) “LAN Stock
Options” means all of the outstanding options to purchase LAN Common
Stock (whether vested or unvested, exercisable or unexercisable) issued under
the stock option plans listed on Schedule 5.04(v) (“LAN Stock
Plans”).
(w) “Law”
means any statute, common law, ordinance, rule, regulation, agency requirement
or Order of, or issued, promulgated or entered into by or with, any Governmental
Entity.
(x) “LIBOR”
means (i) the rate of interest per annum determined on the basis of the rate for
deposits in U.S. Dollars for a period equal to six months (or the closest period
if such period is not available) which appears on the Reuters Page LIBOR01, or
its successor page, at approximately 11:00 a.m. (London time) (the “Designated
LIBOR Page”) two business days prior to the Quotation Day (rounded to the
nearest 1/100th of 1%); or (ii) (if the rate referred to in subparagraph
(a) is not available) the arithmetic mean of the rate per annum at which
deposits in U.S. Dollars would be quoted by three major banks in New York City
selected by BTG Pactual, the calculation agent (the “Calculation
Agent” ), to first class banks in the London interbank market (rounded to
the nearest 1/100th of 1%) at approximately 11:00 a.m. (London time) two (2)
business days prior to the Quotation Day for a period equal to six months (or
the closest period if such period is not available); provided that if less than
two of these banks provide a quotation as mentioned above, then the Calculation
Agent will compute LIBOR based on the last available LIBOR rate published on the
Designated LIBOR Page, as determined by the Calculation Agent in its sole
discretion.
-35-
(y) “Licenses”
means all approvals, authorizations, registrations, certifications, filings,
franchises, licenses, consents, variances, concessions, exemptions, orders,
notices, permits, operating certificates, Slots and air service designations of,
with or granted by all Governmental Entities and third parties, including all
licenses, certificates and permits from all Governmental Entities to act as an
air carrier, as applicable.
(z)
“Lien”
means all pledges, liens, charges, encumbrances or security interests of any
kind or nature whatsoever.
(aa) “Order”
means any order, decision, writ, injunction, decree, judgment, legal or
arbitration award, stipulation, license, permit or agreement issued, promulgated
or entered into by or with (or settlement or consent agreement subject to) any
Governmental Entity.
(bb) “Person”
means any natural person, firm, corporation, partnership, company, limited
liability company, joint venture, association, trust, unincorporated
organization, Governmental Entity or other entity.
(cc) “Quotation
Day” means, in relation to any period for which an interest rate is to be
determined pursuant to this Agreement, two business days before the first day of
that period, unless market practice differs in the London interbank market, in
which case the Quotation Day for that currency and interest rate will be
determined by the Calculation Agent in accordance with market practice in the
London interbank market.
(dd) “Slots”
means all takeoff and landing slots, operating authorizations from any
Governmental Entity and other similar designated takeoff and landing
rights.
(ee) “Subsidiary”
means, with respect to any Person, any other Person (whether or not
incorporated) as to which such Person and/or any one or more of its other
Subsidiaries, directly or indirectly, (i) own a majority of the general partner
interests in such other Person, (ii) own a majority of the outstanding
securities of, or other equity interests in, such other Person which by their
terms has ordinary voting power to elect the members of the board of directors
(or comparable governing body) of such other Person, or (iii) otherwise have the
right to elect or appoint a majority of such members.
-36-
(ff) “Swap
Contract” means (a) any and all interest rate swap transactions,
basis swaps, credit derivative transactions, forward rate transactions,
commodity swaps, commodity options, forward commodity contracts, equity or
equity index swaps or options, bond or bond price or bond index swaps or options
or forward bond or forward bond price or forward bond index transactions,
interest rate options, forward foreign exchange transactions, cap transactions,
floor transactions, collar transactions, currency swap transactions,
cross-currency rate swap transactions, currency options, spot contracts, or any
other similar transactions or any combination of any of the foregoing (including
any options to enter into any of the foregoing), whether or not any such
transaction is governed by or subject to any master agreement, and (b) any
and all transactions of any kind, and the related confirmations, which are
subject to the terms and conditions of, or governed by, any form of master
agreement published by the International Swaps and Derivatives Association,
Inc., any International Foreign Exchange Master Agreement, or any other master
agreement (any such master agreement, together with any related schedules, a
“Master
Agreement”), including any such obligations or liabilities under any
Master Agreement.
(gg) “TAM
Aircraft Contracts” means all Contracts (other than (x) existing aircraft
leases or (y) Contracts that may be terminated or canceled by TAM or any of its
Subsidiaries without incurring any penalty or other material liability except
for the forfeiture of any previously made prepayment or deposit) pursuant to
which TAM or any of its Subsidiaries has a binding obligation to purchase or
lease aircraft.
(hh) “TAM
Financial Reporting Documents” means all reports, schedules, forms,
statements, certifications and other documents (including exhibits and other
information incorporated therein) with or to, as applicable, the Comissão de Valores
Mobiliários (the “CVM”)
or the SEC that were required to be so filed or furnished by TAM since
December 31, 2006 and any documents so filed or furnished during such
period by TAM on a voluntary basis.
(ii) “TAM
Material Contract” means any Contract described on Schedule
5.04(ii).
(jj) “TAM Stock
Options” means all of the outstanding options to purchase shares of
capital stock of TAM (whether vested or unvested, exercisable or unexercisable)
issued under the stock option plans listed on Schedule 5.04(jj) (“TAM Stock
Plans”).
(kk) “Tax”
means any and all taxes, charges, fees, levies or other assessments, including
income, gross receipts, excise, real or personal property, sales, withholding,
social security, occupation, use, service, service use, value added, license,
net worth, payroll, franchise, transfer and recording taxes, fees and charges,
imposed by any taxing authority (whether domestic or foreign including any
state, local or foreign government or any subdivision or taxing agency thereof),
whether computed on a separate, consolidated, unitary, combined or any other
basis; and such term shall include any interest, penalties or additional amounts
attributable to, or imposed upon, or with respect to, any such taxes, charges,
fees, levies or other assessments.
(ll) “U.S.
Exchange Act” shall mean the U.S. Securities Exchange Act of
1934.
-37-
SECTION
5.05. Interpretation. When
a reference is made in this Agreement to an Article, a Section, Exhibit or
Schedule, such reference shall be to an Article of, a Section of, or
an Exhibit or Schedule to this Agreement unless otherwise
indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words
“include,” “includes” or “including” are used in this Agreement, they shall be
deemed to be followed by the words “without limitation.” The words
“hereof,” “herein” and “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. References to “this Agreement” shall
include Schedule 3.01 and the Exhibits and Schedules to this Agreement, all
of which are incorporated herein and made a part of this
Agreement. All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein. The definitions
contained in this Agreement are applicable to the singular as well as the plural
forms of such terms and to the masculine as well as to the feminine and neuter
genders of such term. Any Contract, instrument or Law defined or
referred to herein or in any Contract or instrument that is referred to herein
means such Contract, instrument or Law as from time to time amended, modified or
supplemented, including (in the case of Contracts or instruments) by waiver or
consent and (in the case of Laws) by succession of comparable successor Laws and
references to all attachments thereto and instruments incorporated
therein. References to a Person are also to its permitted successors
and assigns. Except as otherwise expressly provided herein,
references to “parties” in this Agreement refers to the parties to this
Agreement. Except as otherwise expressly provided herein, all
remedies provided herein shall be in addition to any other remedies they may
otherwise have under applicable Law. Any reference in this Agreement
to a “day” or a number of “days” (without the explicit qualification of
“business”) shall be interpreted as a reference to a calendar day or number of
calendar days. This Agreement is the product of negotiation by the
parties having the assistance of counsel and other advisers, and the parties and
their counsel and other advisers have participated jointly in negotiating and
drafting this Agreement. If an ambiguity or a question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provision of this
Agreement.
SECTION
5.06. Consents and
Approvals. For
any matter under this Agreement requiring the consent or approval of any party
to be valid and binding on the parties hereto, such consent or approval must be
in writing and signed by such party.
SECTION
5.07. Counterparts. This
Agreement may be executed in one or more counterparts (including by facsimile),
each of which shall be considered an original instrument and all of which shall
together constitute the same agreement. This Agreement shall become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other parties.
-38-
SECTION
5.08. No Third-Party
Beneficiaries. Except
as otherwise expressly stated herein, the parties hereby agree that the
agreements and covenants set forth herein are solely for the benefit of the
other parties in accordance with, and subject to the terms of, this Agreement
and that this Agreement is not intended to, and does not, confer upon any Person
other than the parties any rights or remedies hereunder, including the right to
rely upon the representations and warranties set forth herein. The parties
hereto hereby agree that their respective covenants set forth herein are solely
for the benefit of the other parties hereto in accordance with, and subject to
the terms of, this Agreement and that this Agreement is not intended to, and
does not, confer upon any Person other than the parties hereto any rights or
remedies hereunder.
SECTION
5.09. Governing
Law. THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES
THEREOF; PROVIDED, HOWEVER,
THAT NOTWITHSTANDING THE FOREGOING THE AUTHORIZATION AND EXECUTION OF
THIS AGREEMENT BY EACH PARTY SHALL BE GOVERNED BY THE LAWS OF ITS JURISDICTION
OF INCORPORATION.
SECTION
5.10. Assignment. Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned, in whole or in part, by operation of Law or otherwise by any of the
parties hereto without the prior written consent of the other parties, and any
purported assignment without such consent shall be null and
void. Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of, and be enforceable by, the parties and
their respective successors, heirs and permitted assigns.
SECTION
5.11. Specific Enforcement;
Consent to Jurisdiction. The
parties agree that irreparable damage would occur and that the parties would not
have any adequate remedy at law in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall
be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions of this
Agreement, this being in addition to any other remedy to which they are entitled
at law or in equity, without the necessity of proving the inadequacy of monetary
damages or of posting bond or other undertaking, as a remedy and to obtain
injunctive relief against any breach or threatened breach hereof. In
the event that any action is brought in equity to enforce the provisions of this
Agreement, no party hereto shall allege, and each party hereto waives the
defense or counterclaim that there is an adequate remedy at Law. Each
of the parties hereto hereby irrevocably consents and submits itself to the
personal jurisdiction of the courts of the State of New York and the federal
courts of the United States of America located in the Borough of Manhattan, The
City of New York (collectively, the “Agreed
Courts”) solely in respect of the interpretation and enforcement of the
provisions of this Agreement, and the documents referred to herein and the
transactions contemplated by this Agreement (collectively, the “Agreed
Issues”), waives, and agrees not to assert, as a defense in any action,
suit or proceeding in an Agreed Court with respect to the Agreed Issues that
such party is not subject thereto or that such action, suit or proceeding may
not be brought or is not maintainable in such Agreed Court or that the venue
thereof may not be appropriate or that this Agreement or any such document may
not be enforced in or by such Agreed Court, and the parties hereto irrevocably
agree that all claims with respect to any action, suit or proceeding with
respect to the Agreed Issues shall be heard and determined only in an Agreed
Court. The parties hereby consent to and grant to each Agreed Court
jurisdiction over the Person of such parties and, to the extent permitted by
Law, over the subject matter of any dispute with respect to the Agreed Issues
and agree that mailing of process or other papers in connection with any such
action or proceeding in the manner provided in Section 5.03 or in such other
manner as may be permitted by Law shall be valid and sufficient service
thereof.
-39-
SECTION
5.12. Waiver of Jury
Trial. EACH
PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS
AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE
EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO (I) CERTIFIES THAT IT
HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER AND MADE IT VOLUNTARILY AND THAT
NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY
ACTION, SUIT OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER AND (II)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS
IN THIS SECTION 5.12.
SECTION
5.13. Obligations of LAN and of
TAM. Whenever
this Agreement requires a Subsidiary of LAN to take any action, such requirement
shall be deemed to include an undertaking on the part of LAN to cause such
Subsidiary to take such action. Whenever this Agreement requires the
Amaro Family or any Subsidiary of TAM, the TAM Direct Controlling Shareholder or
TEP Chile to take any action, such requirement shall be deemed to include an
undertaking on the part of each member of the Amaro Family, the TAM Controlling
Shareholder and TAM to cause such action to be
taken.
-40-
SECTION
5.14. Language; Portuguese
Translation. A
sworn Portuguese translation of this Agreement will be prepared by a tradutor
juramentado. Such translation and no other may be filed with,
or furnished to, any applicable Governmental Entity and public registries in
Brazil or used in any proceeding in Brazil. For all purposes, the
English language version of this Agreement shall be the only binding agreement
between the parties hereto and shall control if there is any conflict between it
and the Portuguese translation.
[Remainder of Page Intentionally Left
Blank]
-41-
IN
WITNESS WHEREOF, LAN, LAN Controlling Shareholders, TAM Direct Controlling
Shareholder, the Amaro Family and TAM have caused this Agreement to be signed by
their respective officers hereunto duly authorized, all as of the date first
written above.
|
LAN
AIRLINES S.A.
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
|
TAM
S.A.
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
|
COSTA
VERDE AERONÁUTICA S.A.
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
|
INVERSIONES
MINERAS DEL
CANTÁBRICO
S.A.
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
|
TAM
EMPREENDIMENTOS E
PARTICIPAÇÕES
S.A.
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
|
NOEMY
ALMEIDA OLIVEIRA
AMARO
|
||
-42-
|
MARIA
CLÁUDIA OLIVEIRA AMARO
|
||
|
MAURÍCIO
ROLIM AMARO
|
||
|
JOÃO
FRANCISCO
AMARO
|
||
-43-
Exhibit
1
Ownership
Structure Chart Upon Completion of Transaction Steps
1-1
Exhibit
2
TAM
Shareholders Agreement
2-1
Exhibit
3
Holdco 1
Shareholders Agreement
-2-
Exhibit
4
LATAM/TEP
Shareholders Agreement
-3-
Exhibit
5
Control
Group Shareholders Agreement
3-1
Schedule
1.12
Conditions to
Subscription
(i)
Governmental
Consents. Since the Commencement Date, none of the consents,
approvals, authorizations or other actions or non-actions required to be
received or obtained from any Governmental Entity in order to commence or
consummate the Exchange Offer, the Mergers or the other transactions
contemplated by this Agreement or in connection therewith and that were
conditions to the commencement of the Exchange Offer shall have been revoked or
amended, modified or supplemented subsequent to the Commencement Date in any way
that could reasonably be expected to materially impede or interfere with, delay,
postpone or materially and adversely affect the consummation of the transactions
contemplated by this Agreement.
(ii) No Injunctions or
Restraints. Since the Commencement Date, no court or other
Governmental Entity of competent jurisdiction shall have enacted, issued,
promulgated, enforced or entered any Law or Order or taken any other action
(whether temporary, preliminary or permanent) that is in effect and
(i) makes illegal, restrains, enjoins or otherwise prohibits the
commencement of the Exchange Offer or the consummation of the Exchange Offer,
the Mergers or the other transactions contemplated by this Agreement and the
Implementation Agreement on the terms contemplated hereby and thereby or (ii)
limits or impairs the ability of LAN, the TAM Direct Controlling Shareholder,
TEP Chile and/or the Amaro Family to jointly (A) own or operate all or any
material portion of the assets of TAM and its Subsidiaries or (B) exercise full
ownership rights with respect to equity interests in Holdco 1, TAM and its
Subsidiaries in a manner consistent with the terms of the LATAM-TEP Shareholders
Agreement, the Holdco 1 Shareholders Agreement and the TAM Shareholders
Agreement (collectively, “Restraining
Orders”).
(iii) No
Litigation. No Action commenced since the Commencement Date by
any Governmental Entity or other Person seeking (i) a Restraining Order or (ii)
to limit or impair the ability of LAN and the Amaro Family to jointly (A) own or
operate all or any material portion of the assets of TAM and its Subsidiaries or
(B) exercise all the rights and receive all the benefits of full ownership of
each of Holdco 1, TAM and its Subsidiaries in a manner consistent with the terms
of the LATAM-TEP Shareholders Agreement, the Holdco 1 Shareholders
Agreement and the TAM Shareholders Agreement other than any such Action by any
Person other than a Governmental Entity that could not reasonably be expected to
succeed on its merits, shall remain pending.
(iv) Business
Continuity. None of the following actions, events or
circumstances shall have occurred after the Commencement Date (or prior thereto
if no executive officer of TAM had actual knowledge of any such action, event or
circumstance as of the Commencement Date) that, individually or in the
aggregate, have had an adverse effect on the businesses, revenues, operations or
financial condition of LAN and its Subsidiaries in any material
respect:
3-1
(A) Any
change in, or termination of, any Licenses that are currently held by LAN or any
of its Subsidiaries and used to conduct air domestic or international cargo or
passenger transport services or any such Governmental Entity or other Person
shall have threatened or taken any action seeking any such change or
termination;
(B) Any
loss of 10% or more of the total takeoff and landing scheduled operations of LAN
and its Subsidiaries to operate at any of the following
airports: Arturo Merino Benitez International Airport of Santiago de
Chile and the Jorge Chavez International Airport of Lima, Perú;
(C) Any
loss of 15% or more of the permits or air traffic rights held by LAN and its
Subsidiaries to operate to the United States of America;
(D)
Any termination or expiration of
any aeronautical insurance policy that currently covers LAN or any of its
Subsidiaries unless such policy is reinstated or replaced by a substantially
equivalent policy within 24 hours of such termination or
expiration;
(E) Any
initiation of any inquiry or investigation of LAN or any of its Subsidiaries by
any Airline Regulatory Entity relating to safety issues that could be expected
to result in the total or partial revocation of any License currently held by
LAN or any of its Subsidiaries or to be detrimental to the public image of
LAN;
(F) Any
event that occurs at Arturo Merino Benitez International Airport of Santiago de
Chile or the Jorge Chavez International Airport of Lima, Perú and
that (1) prevents LAN and its Subsidiaries from operating at least 50% of their
normally scheduled flights from such airport during the period from the date on
which such event occurs to the expiration of the Exchange Offer or (2) if such
period is less than 30 days, could be expected to prevent such percentage of
such flights during the 30-day period commencing on the date on which such event
occurs;
(G) Any
inability of Chile or Perú to adequately and safely control its airspace through
its air traffic control system that (1) prevents LAN and its Subsidiaries from
being able to conduct their normal operations during the period through the
expiration of the Exchange Offer or (2) if such period is less than 30 days,
could be expected to prevent such normal operations for a period of at least 30
days;
(H) Any
aircraft accident that involves any loss of life or the total loss of any
aircraft;
(I)
Any issuance of any Law or
Order:
(1) fixing
or otherwise regulating international passenger airline fares affecting 15% or
more of the revenues of the international operations of LAN and its
Subsidiaries;
-2-
(2) challenging,
restricting, limiting or impairing the ability of Holdco 2 to make or consummate
the Exchange Offer; LAN to consummate the Mergers; Holdco 2, LAN or Holdco 1 to
own, hold or exercise the rights inherent in TAM Stock; or LAN and the TAM
Direct Controlling Shareholder, TEP Chile and/or the Amaro Family to jointly own
or operate all or any material portion of the assets of TAM and its Subsidiaries
or exercise all the rights and receive all the benefits of full ownership of
each of Holdco 1, TAM and its Subsidiaries in a manner consistent with the terms
of the LATAM-TEP Shareholders Agreement, the Holdco 1 Shareholders
Agreement and the TAM Shareholders Agreement;
(3) providing
for any expropriation or confiscation of any assets of LAN or any of its
Subsidiaries or limiting the ability of LAN or any of its Subsidiaries to freely
dispose of any of their assets;
(4) suspending,
restricting or limiting the ability to engage in currency exchange transactions
in Chile or by Chilean corporations or residents or changing the current
regulations relating to the transfer of funds into or out of Chile;
or
(5) changing
the current regulations applicable to the capital markets in Brazil or Chile or
increasing any taxes or tax rates that adversely impacts the shareholders who
tender into, or the consummation by Holdco 2 of, the Exchange
Offer;
(J) Any
natural disaster or similar event that causes damage to any infrastructure or
airspace used by, or any industry affecting, LAN or any of its Subsidiaries or
any assets used by LAN or any of its Subsidiaries in the ordinary course of
business; or
(K) Any
other event that (1) prevents LAN and its Subsidiaries from operating at least
50% of their regularly scheduled flights during the period from the date on
which such event occurs to the expiration of the Exchange Offer or (2) if such
period is less than 30 days, could be expected to prevent such percentage of
such flights during the 30-day period commencing on the date on which such event
occurs.
(v) No Default Under Relevant
Agreements. Since the Commencement Date, there shall not have
occurred any default in the performance or breach, or any event that with
notice, lapse of time or both would result in such a default or breach, by LAN
or any of its Subsidiaries contained in any Contract to which any of them is a
party under which the aggregate consideration provided or received, or to be
provided or received, is greater than US$10,000,000 that continues to exist, in
each case after giving effect to any waivers granted by any other party to such
Contract and regardless of whether or not any event of default, acceleration or
other enforcement action shall have been declared or taken by any such other
party.
-3-
(vi) No Market
Disruptions. Since the Commencement Date, there shall have
been no (i) general suspension of, or limitation on trading in securities on,
the SSE, the Bovespa or the NYSE (other than a shortening of trading hours or
any coordinated trading halt triggered solely as a result of a specified
increase or decrease in a market index), (ii) declaration of a banking
moratorium or any suspension of payments in respect of banks in Chile, the
European Union or the United States, or (iii) commencement of a war or armed
hostilities or airline industry events, which, in the case of clauses (ii) and
(iii), could reasonably be expected to have a LAN Material Adverse
Effect.
-4-
Schedule
5.04(u)
LAN Material
Contracts
Any
contract, (i) that is a “material contract” (as defined in Item 601(b)(10) of
Regulation S-K of the SEC) to be performed after the date of this Agreement that
has not been filed as such in a LAN Financial Reporting Document prior to the
date of this Agreement; (ii) that limits or purports to limit in any material
respect any type or line of business in which LAN or any of its Subsidiaries
(whether before or after the consummation of the Mergers) may engage or any
manner or locations in which any of them may so engage in any business; (iii)
that is a(n) (A) alliance or other brand alliance agreement, (B) code sharing
agreement, (C) frequent flyer participation agreement, (D) capacity purchase or
similar agreement, (E) cooperation, joint venture, partnership, profit or
revenue sharing agreement, (F) special prorate agreement or (G) interlining
agreement with any air carrier (including all material amendments to each of the
foregoing agreements), in each case that is material to the business, financial
condition, results of operations or prospects of LAN and its Subsidiaries, taken
as a whole; (iv) pursuant to which any Indebtedness of LAN or any of its
Subsidiaries in excess of $50 million is outstanding or may be incurred that has
not been filed in a LAN Financial Reporting Document prior to the date of this
Agreement; (v) that involves or could reasonably be expected to involve
aggregate payments by or to LAN and/or its Subsidiaries in excess of $30 million
in any twelve-month period, except for any Contract that may be canceled without
penalty or termination payments by LAN and/or its Subsidiaries upon notice of 60
days or less; (vi) any aircraft purchase agreement, engine purchase agreement or
engine maintenance agreement that involves or is reasonably expected to involve
aggregate payments by or to LAN or any of its Subsidiaries in excess of $30
million in any twelve-month period; or (vii) pursuant to which it is licensed to
use Intellectual Property of a third party that is material to the operation of
its business, or licenses to a third party rights in the Intellectual Property
it owns.
Schedule
5.04(v)
LAN Stock
Options
Schedule
5.04(ii)
TAM Material
Contracts
Any
contract (i) that is a “material contract” (as defined in Item 601(b)(10) of
Regulation S-K of the SEC) to be performed after the date of this Agreement that
has not been filed as such in a TAM Financial Reporting Document prior to the
date of this Agreement; (ii) that limits or purports to limit in any material
respect any type or line of business in which TAM or any of its Subsidiaries
(whether before or after the consummation of the Mergers) may engage or any
manner or locations in which any of them may so engage in any business; (iii)
that is a(n) (A) alliance or other brand alliance agreement, (B) code sharing
agreement, (C) frequent flyer participation agreement, (D) capacity purchase or
similar agreement, (E) cooperation, joint venture, partnership, profit or
revenue sharing agreement, (F) special prorate agreement or (G) interlining
agreement with any air carrier (including all material amendments to each of the
foregoing agreements), in each case that is material to the business, financial
condition, results of operations or prospects of TAM and its Subsidiaries, taken
as a whole; (iv) pursuant to which any Indebtedness of TAM or any of its
Subsidiaries in excess of $50 million is outstanding or may be incurred that has
not been filed in a TAM Financial Reporting Document prior to the date of this
Agreement; (v) that involves or could reasonably be expected to involve
aggregate payments by or to TAM and/or its Subsidiaries in excess of $30 million
in any twelve-month period, except for any contract that may be canceled without
penalty or termination payments by TAM and/or its Subsidiaries upon notice of 60
days or less; (vi) any aircraft purchase agreement, engine purchase agreement or
engine maintenance agreement that involves or is reasonably expected to involve
aggregate payments by or to TAM or any of its Subsidiaries in excess of $30
million in any twelve-month period; or (vii) pursuant to which it is licensed to
use Intellectual Property of a third party that is material to the operation of
its business, or licenses to a third party rights in the Intellectual Property
it owns.
Schedule
5.04(jj)
TAM Stock
Options
Exhibit
99.4
EXECUTION
VERSION
EXCHANGE
OFFER AGREEMENT
by
and among
LAN
AIRLINES S.A.,
COSTA
VERDE AERONÁUTICA S.A.,
INVERSIONES
MINERAS DEL CANTÁBRICO S.A.,
TAM
S.A.,
NOEMY
ALMEIDA OLIVEIRA AMARO,
MARIA
CLÁUDIA OLIVEIRA AMARO,
MAURÍCIO
ROLIM AMARO,
JOÃO
FRANCISCO AMARO
and
TAM
EMPREENDIMENTOS E PARTICIPAÇÕES S.A.
Dated
as of January 18, 2011
TABLE OF
CONTENTS
|
Page
|
||
|
ARTICLE
I
|
||
|
THE
EXCHANGE OFFER
|
||
|
SECTION
1.01.
|
ANAC
Approval
|
4
|
|
SECTION
1.02.
|
Pre-Commencement
Closing
|
4
|
|
SECTION
1.03.
|
Commencement
|
5
|
|
SECTION
1.04.
|
Filings
and Actions
|
5
|
|
SECTION
1.05.
|
Terms
and Conditions
|
8
|
|
SECTION
1.06.
|
Extensions
and Amendments
|
9
|
|
SECTION
1.07.
|
By-laws
|
9
|
|
SECTION
1.08.
|
Listing
and Delisting
|
9
|
|
ARTICLE
II
|
||
|
REPRESENTATIONS
AND WARRANTIES OF TAM
|
||
|
SECTION
2.01.
|
Organization,
Standing and Corporate Power; Subsidiaries
|
10
|
|
SECTION
2.02.
|
By-laws
|
11
|
|
SECTION
2.03.
|
Capitalization
|
11
|
|
SECTION
2.04.
|
Authority
|
12
|
|
SECTION
2.05.
|
No
Conflict; Required Filings and Consents
|
13
|
|
SECTION
2.06.
|
TAM
Financial Reporting Documents; Financial Statements; No Undisclosed
Liabilities
|
14
|
|
SECTION
2.07.
|
Absence
of Certain Changes or Events
|
17
|
|
SECTION
2.08.
|
Litigation
|
17
|
|
SECTION
2.09.
|
Material
Contracts
|
18
|
|
SECTION
2.10.
|
Licenses;
Compliance with Laws
|
19
|
|
SECTION
2.11.
|
Environmental
Matters
|
21
|
|
SECTION
2.12.
|
Labor
and Employment Matters
|
22
|
|
SECTION
2.13.
|
Aircraft
|
22
|
|
SECTION
2.14.
|
TAM
Slots and Operating Rights
|
24
|
|
SECTION
2.15.
|
Major
TAM Airports
|
24
|
|
SECTION
2.16.
|
Employee
Benefits
|
25
|
|
SECTION
2.17.
|
Taxes
|
26
|
|
SECTION
2.18.
|
Intellectual
Property
|
27
|
|
SECTION
2.19.
|
Information
Supplied
|
29
|
|
SECTION
2.20.
|
Voting
Requirements
|
29
|
|
SECTION
2.21.
|
Affiliate
Transactions
|
29
|
|
SECTION
2.22.
|
Brokers
and Other Advisors
|
29
|
-i-
|
SECTION
2.23.
|
Fairness
Opinion
|
30
|
|
ARTICLE
III
|
||
|
REPRESENTATIONS
AND WARRANTIES OF LAN
|
||
|
SECTION
3.01.
|
Organization,
Standing and Corporate Power; Subsidiaries
|
30
|
|
SECTION
3.02.
|
By-laws
|
31
|
|
SECTION
3.03.
|
Capitalization
|
31
|
|
SECTION
3.04.
|
Authority
|
33
|
|
SECTION
3.05.
|
No
Conflict; Required Filings and Consents
|
33
|
|
SECTION
3.06.
|
LAN
Financial Reporting Documents; Financial Statements; No Undisclosed
Liabilities
|
34
|
|
SECTION
3.07.
|
Absence
of Certain Changes or Events
|
37
|
|
SECTION
3.08.
|
Litigation
|
38
|
|
SECTION
3.09.
|
Material
Contracts
|
38
|
|
SECTION
3.10.
|
Licenses;
Compliance with Laws
|
39
|
|
SECTION
3.11.
|
Environmental
Matters
|
41
|
|
SECTION
3.12.
|
Labor
and Employment Matters
|
41
|
|
SECTION
3.13.
|
Aircraft
|
42
|
|
SECTION
3.14.
|
LAN
Slots and Operating Rights
|
44
|
|
SECTION
3.15.
|
Major
LAN Airports
|
44
|
|
SECTION
3.16.
|
Employee
Benefits
|
44
|
|
SECTION
3.17.
|
Taxes
|
45
|
|
SECTION
3.18.
|
Intellectual
Property
|
46
|
|
SECTION
3.19.
|
Information
Supplied
|
47
|
|
SECTION
3.20.
|
Voting
Requirements
|
48
|
|
SECTION
3.21.
|
Affiliate
Transactions
|
48
|
|
SECTION
3.22.
|
Brokers
and Other Advisors
|
48
|
|
SECTION
3.23.
|
Fairness
Opinion
|
48
|
|
ARTICLE
IV
|
||
|
REPRESENTATIONS
AND WARRANTIES OF THE CONTROLLING SHAREHOLDERS
|
||
|
SECTION
4.01.
|
Organization;
Ownership
|
49
|
|
SECTION
4.02.
|
Authority
|
50
|
|
SECTION
4.03.
|
No
Conflict; Required Filings and Consents
|
50
|
|
SECTION
4.04.
|
No
Successor Liability
|
50
|
|
SECTION
4.05.
|
Litigation
|
51
|
-ii-
|
ARTICLE
V
|
||
|
ADDITIONAL
AGREEMENTS
|
||
|
SECTION
5.01.
|
Access
to Information; Confidentiality
|
51
|
|
SECTION
5.02.
|
Further
Action; Efforts
|
53
|
|
SECTION
5.03.
|
Advice
of Changes
|
55
|
|
SECTION
5.04.
|
Covenants
of the Controlling Shareholders
|
56
|
|
ARTICLE
VI
|
||
|
CONDITIONS
TO THE COMMENCEMENT OF THE EXCHANGE OFFER
|
||
|
SECTION
6.01.
|
Mutual
Conditions to the Commencement of the Exchange Offer
|
59
|
|
SECTION
6.02.
|
LAN’s
Conditions to the Commencement of the Exchange Offe
|
61
|
|
SECTION
6.03.
|
Amaro
Family’s Conditions to the Commencement of the Exchange
Offer
|
62
|
|
SECTION
6.04.
|
Commencement
of the Exchange Offer
|
64
|
|
ARTICLE
VII
|
||
|
CONDITIONS
TO THE CONSUMMATION OF THE EXCHANGE OFFER
|
||
|
SECTION
7.01.
|
Conditions
to the Consummation of the Exchange Offer
|
64
|
|
SECTION
7.02.
|
Mutual
Conditions to the Consummation of the Exchange Offer
|
64
|
|
SECTION
7.03.
|
LAN
Conditions to the Consummation of the Exchange Offer
|
65
|
|
ARTICLE
VIII
|
||
|
TERMINATION,
AMENDMENT AND WAIVER
|
||
|
SECTION
8.01.
|
Termination
|
68
|
|
SECTION
8.02.
|
Effect
of Termination
|
70
|
|
SECTION
8.03.
|
Amendment
|
70
|
|
SECTION
8.04.
|
Extension;
Waiver
|
70
|
|
SECTION
8.05.
|
Indemnification.
|
71
|
|
ARTICLE
IX
|
||
|
GENERAL
PROVISIONS
|
||
|
SECTION
9.01.
|
Survival
|
72
|
|
SECTION
9.02.
|
Fees
and Expenses
|
72
|
-iii-
|
SECTION
9.03.
|
Notices
|
73
|
|
SECTION
9.04.
|
Definitions
|
75
|
|
SECTION
9.05.
|
Interpretation
|
79
|
|
SECTION
9.06.
|
Consents
and Approvals
|
80
|
|
SECTION
9.07.
|
Counterparts
|
80
|
|
SECTION
9.08.
|
Entire
Agreement; No Third-Party Beneficiaries
|
80
|
|
SECTION
9.09.
|
Governing
Law
|
81
|
|
SECTION
9.10.
|
Assignment
|
81
|
|
SECTION
9.11.
|
Specific
Enforcement; Consent to Jurisdiction
|
81
|
|
SECTION
9.12.
|
Waiver
of Jury Trial
|
82
|
|
SECTION
9.13.
|
Severability
|
82
|
|
SECTION
9.14.
|
Obligations
of LAN and of TAM
|
82
|
|
SECTION
9.15.
|
Language;
Portuguese Translation
|
82
|
|
Exhibit 1
|
–
|
By-laws
of TAM as of the Effective Time
|
|
Exhibit 2
|
–
|
By-laws
of Holdco 1
|
|
Exhibit 3
|
–
|
By-laws
of Sister Holdco
|
|
Exhibit 4
|
–
|
By-laws
of Holdco 2
|
|
Exhibit 5
|
–
|
Current
By-laws of TAM
|
|
Exhibit 6
|
–
|
Current
By-laws of
LAN
|
-iv-
INDEX OF DEFINED
TERMS
|
Page
|
|
|
Actions
|
17
|
|
Adverse
Actions
|
60
|
|
Affiliate
|
75
|
|
Agreed
Courts
|
81
|
|
Agreed
Issues
|
81
|
|
Agreement
|
1
|
|
Airline
Affiliate
|
75
|
|
Amaro
Family
|
1
|
|
ANAC
|
1
|
|
ANAC
Approval
|
4
|
|
Antitrust
Law
|
75
|
|
Appraisal
Condition
|
61
|
|
beneficial
ownership
|
75
|
|
Bovespa
|
5
|
|
Brazilian
Aeronautical Code
|
13
|
|
Brazilian
Exchange Offer Documents
|
6
|
|
business
day
|
75
|
|
Chilean
Corporate Law
|
59
|
|
Chilean
Law
|
3
|
|
Commencement
Date
|
5
|
|
Condition
Date
|
4
|
|
Confidential
Information
|
52
|
|
Consents
|
53
|
|
Contract
|
13
|
|
Control
|
75
|
|
Control
Group Shareholders Agreement
|
3
|
|
Convertible
Securities
|
75
|
|
Corrupt
Practices Laws
|
20
|
|
CVM
|
5
|
|
CVM
I 361
|
2
|
|
CVM
I 480
|
5
|
|
Delisting
Condition
|
64
|
|
Depositary
|
4
|
|
DGAC
|
13
|
|
DHS
|
13
|
|
Disclosing
Party
|
53
|
|
Distribution
Date
|
29
|
|
DOT
|
13
|
|
Edital
|
5,
8
|
|
Effective
Time
|
8
|
|
Eligible
TAM Shares
|
5
|
|
Environmental
Laws
|
21
|
|
Equity
Securities
|
76
|
|
Exchange
Offer
|
2
|
|
Exchange
Offer Conditions
|
8
|
|
executive
officer
|
70
|
|
FAA
|
13
|
|
FCC
|
13
|
|
Form
F-4
|
6
|
|
Free
Float Shares
|
5
|
|
Governmental
Entity
|
13
|
|
Hazardous
Materials
|
21
|
|
Holdco
1
|
2
|
|
Holdco
1 Non-Voting Stock
|
2
|
|
Holdco
1 Shareholders Agreement
|
3
|
|
Holdco
1 Stock
|
2
|
|
Holdco
1 Voting Stock
|
2
|
|
Holdco
2
|
2
|
|
Holdco
2 Stock
|
5
|
|
IASB
|
15
|
|
IATA
|
21
|
|
IFRS
|
15
|
|
Implementation
Agreement
|
1
|
|
Indebtedness
|
76
|
|
Indemnified
Party
|
71
|
|
Indemnifying
Party
|
71
|
|
Intellectual
Property
|
76
|
|
IT
Assets
|
76
|
|
JAC
|
13
|
|
Key
Personnel
|
76
|
|
Knowledge
|
76
|
|
LAN
|
1
|
|
LAN
Aircraft
|
42
|
|
LAN
Aircraft Contracts
|
42
|
|
LAN
Airline Regulatory Entities
|
34
|
|
LAN
BDRs
|
6
|
-v-
|
LAN
Benefit Plans
|
44
|
|
LAN
Board
|
33
|
|
LAN
By-laws
|
31
|
|
LAN
Capitalization Date
|
31
|
|
LAN
Common Stock
|
2
|
|
LAN
Condition Notice
|
56
|
|
LAN
Contract Flight Agreements
|
43
|
|
LAN
Controlling Shareholders
|
1
|
|
LAN
Controlling Shareholders Disclosure Schedule
|
49
|
|
LAN
Disclosure Schedule
|
30
|
|
LAN
Employees
|
44
|
|
LAN
Financial Reporting Documents
|
34
|
|
LAN
Indemnified Parties
|
71
|
|
LAN
Licenses
|
39
|
|
LAN
Material Adverse Effect
|
77
|
|
LAN
Material Contract
|
38
|
|
LAN
Slots
|
43
|
|
LAN
Stock Exchanges
|
34
|
|
LAN
Stock Options
|
31
|
|
LAN
Stock Plans
|
31
|
|
LAN
Stock-Based Awards
|
32
|
|
LAN
Subsidiary By-laws
|
31
|
|
LATAM/TEP
Shareholders Agreement
|
3
|
|
Law
|
77
|
|
Leilão
|
8
|
|
Leilão
Date
|
56
|
|
Licenses
|
19
|
|
Liens
|
10
|
|
Losses
|
71
|
|
Major
LAN Airport
|
44
|
|
Major
TAM Airport
|
24
|
|
Master
Agreement
|
78
|
|
Mergers
|
2
|
|
Minimum
Condition Notice
|
56
|
|
Minimum
Conditions
|
65
|
|
Minimum
Tender Condition
|
65
|
|
NYSE
|
7
|
|
Offer
to Exchange/Prospectus
|
29
|
|
Order
|
77
|
|
Ordinary
TEP Shares
|
1
|
|
Outside
Date
|
69
|
|
Parent
|
51
|
|
Person
|
77
|
|
Pre-Commencement
Closing
|
4
|
|
Pre-Commencement
Closing Date
|
4
|
|
Preferred
TEP Shares
|
1
|
|
Ratification
of Understanding
|
4
|
|
Receiving
Party
|
53
|
|
Regulatory
Documents
|
7
|
|
Regulatory
Entities
|
7
|
|
Release
|
21
|
|
Relevant
Agreements
|
68
|
|
Relevant
Parent Entity
|
56
|
|
Representatives
|
52
|
|
Required
Listings
|
9
|
|
Requisite
LAN Shareholder Approval
|
33
|
|
Restraining
Orders
|
60
|
|
Sarbanes-Oxley
Act
|
15
|
|
Schedule
14D-9
|
7
|
|
Schedule
TO
|
7
|
|
SEC
|
6
|
|
Securities
Registry
|
5
|
|
Sister
Holdco
|
2
|
|
Slots
|
24
|
|
SSE
|
5
|
|
Subscriptions
|
57
|
|
Subsidiary
|
77
|
|
SVS
|
5
|
|
Swap
Contract
|
78
|
|
TAM
|
1
|
|
TAM
ADRs
|
4
|
|
TAM
Aircraft
|
22
|
|
TAM
Aircraft Contracts
|
22
|
|
TAM
Airline Regulatory Entities
|
14
|
|
TAM
Benefit Plans
|
25
|
|
TAM
Board
|
12
|
|
TAM
By-laws
|
11
|
|
TAM
Capitalization Date
|
11
|
|
TAM
Contract Flight Agreements
|
23
|
|
TAM
Direct Controlling Shareholder
|
1
|
|
TAM
Direct Controlling Shareholder Disclosure Schedule
|
48
|
|
TAM
Disclosure Schedule
|
10
|
|
TAM
Employees
|
25
|
-vi-
|
TAM
Financial Reporting Documents
|
14
|
|
TAM
Licenses
|
19
|
|
TAM
Material Adverse Effect
|
78
|
|
TAM
Material Contract
|
18
|
|
TAM
Ordinary Stock
|
1
|
|
TAM
Preferred Stock
|
1
|
|
TAM
Shareholders Agreement
|
3
|
|
TAM
Slots
|
24
|
|
TAM
Stock
|
1
|
|
TAM
Stock Exchanges
|
14
|
|
TAM
Stock Plans
|
11
|
|
TAM
Stock-Based Awards
|
11
|
|
TAM
Subsidiary By-laws
|
11
|
|
Tax
|
27
|
|
Tax
Return
|
27
|
|
TEP
Chile
|
1
|
|
TEP
Chile Subscription
|
57
|
|
TEP
Condition Notice
|
57
|
|
TEP
Indemnified Parties
|
71
|
|
TEP
Restructuring
|
2
|
|
TEP
Shares
|
1
|
|
Third
Party
|
71
|
|
Transaction
Agreements
|
79
|
|
TSA
|
13
|
|
U.S.
Exchange Act
|
6
|
|
U.S.
Exchange Offer Documents
|
7
|
|
U.S.
Offering Documents
|
6
|
|
U.S.
Securities Act
|
6
|
|
U.S.
Securities Laws
|
6
|
|
U.S.
Shareholders
|
5
|
|
Withdrawal
Deadline
|
56
|
-vii-
EXCHANGE
OFFER AGREEMENT
EXCHANGE
OFFER AGREEMENT, dated as of January 18, 2011 (the “Agreement”),
among LAN AIRLINES S.A., a Chilean corporation (“LAN”),
COSTA VERDE AERONÁUTICA S.A. and INVERSIONES MINERAS DEL CANTÁBRICO S.A.,
Chilean corporations that are the controlling shareholders of LAN under the Law
of Chile (collectively, the “LAN Controlling
Shareholders”), TAM S.A., a Brazilian corporation (“TAM”),
Noemy Almeida Oliveira Amaro, Maria Cláudia Oliveira Amaro, Maurício Rolim Amaro
and João Francisco Amaro, all of whom are Brazilian citizens and residents and
who, collectively, are the only shareholders of the TAM Direct Controlling
Shareholder under the Law of Brazil (all such individuals, collectively, the
“Amaro
Family”) and TAM
EMPREENDIMENTOS E PARTICIPAÇÕES S.A., a Brazilian corporation that is the
controlling shareholder of TAM under the Law of Brazil (the “TAM
Direct Controlling Shareholder”).
WHEREAS,
the board of directors of each of LAN and TAM has approved the combination of
the two companies on and subject to the terms and conditions set forth in this
Agreement and an implementation agreement being entered into by the parties to
this Agreement at the same time as this Agreement (the “Implementation
Agreement”);
WHEREAS,
if (but only if) the Agência Nacional de Aviação Civil of Brazil (“ANAC”)
has approved without any conditions not acceptable to the parties (i) the direct
transfer by the TAM Direct Controlling Shareholder to the Amaro Family of all of
the shares of ordinary stock, without par value (“TAM
Ordinary Stock”), of TAM beneficially owned by the TAM Direct Controlling
Shareholder (the “Ordinary
TEP Shares”) (which represents 85.3457% of the outstanding shares of TAM
Ordinary Stock), (ii) the direct transfer by the TAM Direct Controlling
Shareholder to the Amaro Family of all of the shares of non-voting preferred
stock, without par value (the “TAM
Preferred Stock” and, collectively with the TAM Ordinary Stock, the
“TAM
Stock”), of TAM beneficially owned by the TAM Direct Controlling
Shareholder (the “Preferred
TEP Shares” and, collectively with the Ordinary TEP Shares, the “TEP
Shares”) (which represents 25.0873% of the outstanding shares of TAM
Preferred Stock), (iii) the direct transfer by the Amaro Family to a new Chilean
holding company, TEP Chile S.A. (“TEP
Chile”), of all
of the TEP Shares, (iv) the direct transfers by TEP Chile of the Ordinary TEP
Shares to Holdco 1 and the Preferred TEP Shares to Sister Holdco, (v) the direct
transfers by the other holders of shares of TAM Ordinary Stock to Holdco 2
pursuant to the Exchange Offer, subsequently to LAN pursuant to the Mergers and
finally to Holdco 1 through the contribution by LAN and (vi) the direct
transfers by the other holders of shares of TAM Preferred Stock to Holdco 2
pursuant to the Exchange Offer and subsequently to LAN pursuant to the Mergers,
which direct transfers will result in the indirect transfers of shares of TAM
Linhas Aéreas S.A., Pantanal Linhas Aéreas S.A. and TAM Milor Táxi Aéreo,
Representações, Marcas e Patentes S.A., such transfers will be effected as
described below;
WHEREAS,
after the date of this Agreement and prior to the time at which the TEP Chile
Subscription is made and paid pursuant to Section 5.04(b), the Amaro
Family will implement a capital reduction of the TAM Direct Controlling
Shareholder, pursuant to which the TAM Direct Controlling Shareholder will
transfer all of the TEP Shares to the members of the Amaro Family pro rata in
accordance with their relative equity ownership of the TAM Direct Controlling
Shareholder (“TEP
Restructuring”);
WHEREAS,
after the TEP Restructuring and after the TEP Chile Subscription is made
pursuant to Section 5.04(b), the Amaro Family will contribute all of
the TEP Shares to TEP Chile and TEP Chile will contribute all of the Ordinary
TEP Shares to a new Chilean holding company (“Holdco
1”) in exchange for 100% (other than two shares issued to LAN) of the
non-voting stock, no par value (the “Holdco 1
Non-Voting Stock”), of Holdco 1, and (ii) Holdco 1 and its nominee will
incorporate a new Chilean company (“Holdco
2”), and the parties agree that the value of the TEP Shares so
contributed shall be the net asset value of such TEP Shares as of the date of
their contribution;
WHEREAS,
after the consummation of the Mergers, the Amaro Family will collectively own
100% of the outstanding shares of TEP Chile, TEP Chile will own at least 80% of
the voting stock, no par value (the “Holdco 1
Voting Stock,” and collectively with the Holdco 1 Non-Voting Stock,
“Holdco 1
Stock”), of Holdco 1, and LAN will own 100% of the shares of Holdco 1
Non-Voting Stock and no more than 20% of the shares of Holdco 1 Voting
Stock;
WHEREAS,
Holdco 2 will make a delisting exchange offer (the “Exchange
Offer”) pursuant to the terms and conditions of the CVM Instruction
361/2002, as amended from time to time, without taking into consideration the
amendments to such instruction brought by CVM Instruction 487/2010 and later
amendments (the “CVM I
361”) for all of the outstanding shares of TAM Stock other than the TEP
Shares pursuant to the terms and conditions set forth in this
Agreement;
WHEREAS,
simultaneously with the consummation of the Exchange Offer, Holdco 2 and
another newly formed Chilean company (“Sister
Holdco”) will merge with and into LAN (collectively, the “Mergers”)
pursuant to the Implementation Agreement;
WHEREAS,
as a result of the Exchange Offer and the Mergers, LAN will acquire
substantially all of the remaining outstanding shares of TAM Stock from the
holders who elect to participate in the Exchange Offer and will issue shares of
common stock, no par value (the “LAN
Common Stock”), of LAN to such holders and to TEP Chile at the same time
and at the same exchange ratio;
WHEREAS,
after consummation of the foregoing transactions and assuming (only for the
purposes of calculating the ownership percentages shown below) that (i) all
holders of shares of TAM Stock (other than the TEP Shares) fully participate in
the Exchange Offer, (ii) none of the holders of the outstanding shares of LAN
Common Stock exercise their appraisal rights (derecho a retiro) under the
Law of Chile in respect of the Mergers and (iii) the only shares of LAN Common
Stock and TAM Stock that will be outstanding after the consummation of the
Mergers are the shares issued in the Mergers and the shares which are subscribed
and fully paid for as of the date of the Agreement (which excludes any shares
issuable upon future exercises of stock options):
-2-
|
|
(a)
|
Holdco 1
will own 100% of the shares of TAM Ordinary
Stock;
|
|
|
(b)
|
the
Amaro Family collectively will own 100% of the shares of TEP
Chile;
|
|
|
(c)
|
TEP
Chile will own 80% of the shares of Holdco 1 Voting
Stock;
|
|
|
(d)
|
LAN
will own 100% of shares of Holdco 1 Non-Voting Stock, 20% of shares of the
Holdco 1 Voting Stock and 100% of the shares of TAM Preferred Stock;
and
|
|
|
(e)
|
the
Amaro Family collectively will own 13.67% of the outstanding shares of LAN
Common Stock through TEP Chile and the other TAM shareholders will own
15.65% of the outstanding shares of LAN Common
Stock;
|
WHEREAS,
in connection with the foregoing transactions, LAN, TEP Chile, Holdco 1 and TAM
will enter into a shareholder agreement (the “TAM
Shareholders Agreement”) that will set forth their agreements with
respect to the governance of, management and relationships between, TAM and its
subsidiaries;
WHEREAS,
in connection with the foregoing transactions, LAN, TEP Chile and Holdco 1 will
enter into a shareholder agreement, dated the date hereof (the “Holdco 1
Shareholders Agreement”), to set forth their agreement with respect to
the governance of Holdco 1;
WHEREAS,
in connection with the foregoing transactions, LAN and TEP Chile will enter into
a shareholder agreement (the “LATAM/TEP
Shareholders Agreement”) that will set forth their agreements with
respect to the governance of, and relationships between, LAN, Holdco 1 and their
respective Subsidiaries;
WHEREAS,
in connection with the foregoing transactions, the LAN Controlling Shareholders,
as the continuing controlling shareholders of LAN under the Law of Chile (“Chilean
Law”), desire to make certain concessions to TEP Chile and the Amaro
Family by entering into a shareholder agreement with TEP Chile (the “Control
Group Shareholders Agreement”) that will set forth their agreements with
respect to the governance of LAN, the voting, sale and transfer of their shares
of LAN Common Stock and TEP Chile’s shares of Holdco 1 Voting Stock and certain
other matters; and
WHEREAS,
the board of directors of each of LAN, TAM, the LAN Controlling Shareholders and
the TAM Direct Controlling Shareholder have approved this Agreement and the
Implementation Agreement and the transactions contemplated hereby and thereby
upon the terms and subject to the conditions set forth in this Agreement and the
Implementation Agreement.
-3-
NOW,
THEREFORE, in consideration of the premises and the representations, warranties,
covenants and agreements contained in this Agreement and the Implementation
Agreement, and subject to the conditions set forth herein, the parties hereto
agree as follows:
ARTICLE
I
THE
EXCHANGE OFFER
SECTION
1.01. ANAC
Approval.
On October 20, 2010, the parties hereto submitted to ANAC an application for
ANAC’s approval of: (i) the direct transfer by TEP Chile of the Ordinary TEP
Shares to Holdco 1 and the Preferred TEP Shares to Sister Holdco, (ii) the
direct transfers by the other holders of TAM Ordinary Stock to Holdco 2 pursuant
to the Exchange Offer, subsequently to LAN pursuant to the Mergers and finally
to Holdco 1 through the contribution by LAN and (iii) the direct transfers by
the other holders of TAM Preferred Stock to Holdco 2 pursuant to the Exchange
Offer and subsequently to LAN pursuant to the Mergers (the “ANAC
Approval”), together with a Private Instrument of Ratification of
Understanding, dated as of October 12, 2010 and as amended as of December 13,
2010, among the parties (the “Ratification
of Understanding”). Promptly following the date hereof, the parties
will amend the Ratification of Understanding to request that ANAC also approve
the (i) direct transfers by the TAM Direct Controlling Shareholder of the TEP
Shares to the Amaro Family and (ii) the direct transfer by the Amaro Family
of the TEP Shares to TEP Chile. The parties acknowledge and agree that
they will take no actions to implement any of the transactions contemplated by
this Agreement unless and until the ANAC Approval has been received or ANAC has
expressly approved the taking of such actions prior to receipt of the ANAC
Approval.
SECTION
1.02. Pre-Commencement
Closing.
Unless otherwise agreed in writing by LAN and the TAM Direct Controlling
Shareholder and the Amaro Family, a meeting (the “Pre-Commencement
Closing”) shall take place at the offices of Pinheiro Neto Advogados
located at Rua Hungria, 1.100 São Paulo, SP, Brasil at 9:00 A.M., São Paulo
time, on the first business day (the “Pre-Commencement
Closing Date”) following the first day on which all of the conditions set
forth in Article VI are satisfied or waived in accordance with this
Agreement (other than any such conditions that by their nature are to be
satisfied at the Pre-Commencement Closing, but subject to the satisfaction or
waiver of those conditions) (the “Condition
Date”).
-4-
SECTION
1.03. Commencement.
As promptly as practicable on the first business day after the Pre-Commencement
Closing Date, Holdco 2 will make a delisting tender offer in the form of
the Exchange Offer to acquire (i) all of the outstanding shares of TAM
Preferred Stock other than the Preferred TEP Shares (including those represented
by American Depositary Receipts (“TAM
ADRs”) issued pursuant to the Deposit Agreement, dated as of March 9,
2006, among TAM, JPMorgan Chase Bank, N.A., as Depositary (the “Depositary”),
and the holders of TAM ADRs from time to time), and (ii) all of the
outstanding shares of TAM Ordinary Stock other than the Ordinary TEP Shares (the
shares of TAM Stock described in clauses (i) and (ii) are collectively
referred to herein as the “Eligible
TAM Shares” and the Eligible TAM Shares not beneficially owned by the TAM
Direct Controlling Shareholder and/or the Amaro Family, any of their Affiliates,
TAM or any of its Subsidiaries are referred to herein as, the “Free
Float Shares”), in each case for the same number of shares of ordinary
stock, no par value (“Holdco 2
Stock”), of Holdco 2. The Exchange Offer shall commence when
the Edital relating
thereto (the “Edital”)
is published in Brazil in accordance with Brazilian Law (the date and time at
which such publication occurs is referred to herein as the “Commencement
Date”). In connection with the Exchange Offer, TAM shall promptly
furnish or cause to be furnished to Holdco 2 and LAN (x) a list of the
names and addresses of the record holders and beneficial owners of Free Float
Shares located in the United States and the record holders and beneficial owners
of TAM ADRs (collectively, the “U.S.
Shareholders”), in each case as of the most recent practicable date, as
well as mailing labels containing such names and addresses, and (y) security
position lists, computer files and any other information identifying such record
holders and beneficial owners as of the most recent practicable date which TAM,
its transfer agent or the Depositary have in their possession or control or can
obtain without unreasonable effort or expense. TAM will furnish or cause
to be furnished to Holdco 2 and LAN such additional information (including
updates of the items provided pursuant to the preceding sentence) and such other
assistance as Holdco 2 or LAN may reasonably request in communicating the
Exchange Offer and the Mergers to the record holders and beneficial owners of
the Eligible TAM Shares.
SECTION
1.04. Filings and
Actions.
(a) Chilean Filings and
Actions. Only to the extent required by the CVM, prior to the
Commencement Date, the TAM Direct Controlling Shareholder and the Amaro Family
shall cause Holdco 2 to (i) (A) register as an issuer in the
Securities Registry (the “Securities
Registry”) of the Superintendencia de Valores
y Seguros (the “SVS”),
(B) register a sufficient number of shares of Holdco 2 Stock as
securities subject to oferta
pública in the Securities Registry and with the Santiago Stock Exchange
(the “SSE”)
and (C) obtain waivers of any applicable preemptive rights, in each case in
order to consummate the Exchange Offer on the terms contemplated in this
Agreement, and (ii) file and submit all disclosures with the SVS and the
SSE that are required under applicable Law in connection with the Exchange
Offer, including Norma de
Carácter General Nº 30 of the SVS and the rules and regulations of
the SSE.
(b) Brazilian Filings and
Actions.
(i) Prior
to the Commencement Date, LAN shall (A) file with the Comissão de Valores
Mobiliários (the “CVM”)
and the BM&FBovespa (the “Bovespa”),
under the terms of CVM Instruction 480/2009 (“CVM I
480”), a draft form of its Formulário de Referência and a request to
register LAN as a publicly traded company (companhia estrangeira com valores
mobiliários negociados em mercados regulamentados); (B) apply for
the registration of a Level II BDR Program under the terms of CVM I 480 and
CVM Instruction 332, as amended; and (C) apply with the Bovespa to list the
Brazilian Depositary Receipts (“LAN
BDRs”) to be issued pursuant to a deposit agreement in customary form to
be entered into among LAN, the depositary agent and the holders of LAN BDRs from
time to time.
-5-
(ii) Prior
to the Commencement Date, Holdco 2 shall file with the CVM, under the terms of
CVM Instruction I 361, a Tender Offer Statement with respect to TAM’s delisting
procedure and the exchange of the shares of Holdco 2 Stock and LAN BDRs pursuant
to the Exchange Offer and the Mergers, which shall include an Offer to
Exchange/Prospectus as well as any other documents required to be included
therein under applicable Law pursuant to which the Exchange Offer will be made,
together with any supplements or amendments thereto that may be requested by the
CVM or the Bovespa (the “Brazilian
Exchange Offer Documents”).
(iii) The
TAM Direct Controlling Shareholder and the each of the members of the Amaro
Family agrees to take, and to cause TEP Chile, Holdco 1, Holdco 2 and Sister
Holdco, as applicable, to take, to the extent required under Brazilian Law, any
action required by any Governmental Entity or the Bovespa in order to implement
and consummate the Exchange Offer, the Mergers or any of the other transactions
contemplated by this Agreement and the Implementation Agreement.
(c) U.S. Filings and
Actions.
(i) Prior
to the Commencement Date, (A) LAN, TAM, the TAM Direct Controlling
Shareholder and the Amaro Family and Holdco 2 shall prepare, and LAN and
Holdco 2 shall file with the U.S. Securities and Exchange Commission (the “SEC”),
pursuant to and in accordance with the U.S. Securities Act of 1933, as amended
(including the rules and regulations promulgated thereunder, the “U.S.
Securities Act”), and the U.S. Securities Exchange Act of 1934, as
amended (including the rules and regulations promulgated thereunder, the “U.S.
Exchange Act” and, collectively with the U.S. Securities Act, the “U.S.
Securities Laws”), a registration statement on Form F-4 with respect to
the Exchange Offer and the Mergers and the offer and sale (as defined under the
U.S. Securities Act) of shares of Holdco 2 Stock and shares of LAN Common Stock
pursuant thereto (as amended and supplemented from time to time, the “Form
F-4”), which shall include an Offer to Exchange/Prospectus and a related
letter of transmittal and summary advertisement (as amended or supplemented from
time to time, the “U.S.
Offering Documents”); and (B) LAN and Holdco 2 shall cause the
U.S. Offering Documents to be disseminated to the U.S. Shareholders as and to
the extent required by the U.S. Securities Laws. Each of LAN, TAM, the TAM
Direct Controlling Shareholder and the Amaro Family and Holdco 2 shall use
all reasonable efforts to have the Form F-4 declared effective under the U.S.
Securities Act as promptly as practicable after such filing and to cause the
Offer to Exchange/Prospectus and the related letter of transmittal included in
the Form F-4 to be mailed to the U.S. Shareholders as promptly as
practicable after the Commencement Date. Each of LAN, TAM, the TAM Direct
Controlling Shareholder, the Amaro Family and Holdco 2 shall also take any
action required to be taken under any applicable state securities Law in
connection with the issuance of shares of Holdco 2 Stock pursuant to the
Exchange Offer and shares of LAN Common Stock pursuant to the Mergers, and each
of LAN, TAM, the TAM Direct Controlling Shareholder, the Amaro Family and
Holdco 2 shall furnish all information as may be reasonably requested by
the other parties in connection with any such action, the Form F-4 or the Offer
to Exchange/Prospectus. LAN and Holdco 2 shall notify each other party
promptly after it shall become aware that (A) the Form F-4 has been
declared effective by the SEC, and (B) any stop order has been issued by
the SEC with respect to the Form F-4 or the qualification of the offer and sale
(as defined under the U.S. Securities Act) of the shares of Holdco 2 Stock
or shares of LAN Common Stock pursuant to the Exchange Offer or the Mergers has
been suspended in any jurisdiction.
-6-
(ii) On
the Commencement Date, LAN and Holdco 2 shall file with the SEC, pursuant
to and in accordance with Rule 14d-3 and Regulation M-A promulgated under the
U.S. Exchange Act, a Tender Offer Statement on Schedule TO (as amended and
supplemented from time to time, the “Schedule
TO”) with respect to the Exchange Offer (the Schedule TO, Form F-4 and
the U.S. Offering Documents, together with any supplements or amendments
thereto, the “U.S.
Exchange Offer Documents”). TAM hereby consents to the inclusion in
the U.S. Exchange Offer Documents of the TAM Board Recommendations.
(iii) On
the Commencement Date, TAM shall file with the SEC a Tender Offer
Solicitation/Recommendation Statement on Schedule 14D-9 with respect to the
Exchange Offer containing the TAM Board Recommendations (together with all
amendments, supplements and exhibits thereto, the “Schedule
14D-9”) and shall cause the Schedule 14D-9 to be disseminated to the U.S.
Shareholders with the U.S. Offering Documents, in each case in a manner that
complies with Rule 14d-9 under the U.S. Exchange Act and other applicable U.S.
Securities Laws.
(d) Further Action.
All of the written documents filed with, or submitted to, ANAC, the SVS, the
SSE, the CVM, the Bovespa, the New York Stock Exchange, Inc. (the “NYSE”),
the SEC or any other Governmental Entity pursuant to the securities laws of any
jurisdiction by any party hereto in connection with the Exchange Offer or the
Mergers (such written documents, together with any amendments or supplements
thereto, are collectively referred to herein the “Regulatory
Documents” and the entities with which the Regulatory Documents are filed
or to which they are submitted are collectively referred to herein as the “Regulatory
Entities”) shall comply in all material respects with applicable Law of
the jurisdiction in which they are filed or submitted. Each of LAN, TAM,
the TAM Direct Controlling Shareholder, the Amaro Family and Holdco 2 agrees to
use all reasonable efforts to respond promptly to comments or inquiries from any
Regulatory Entity or its staff with respect to any Regulatory Documents it filed
with or submitted to such Regulatory Entity, and to promptly correct any
information provided by it for inclusion in any Regulatory Document if and to
the extent that such information shall contain any untrue statement of any
material fact, omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading or shall
otherwise become false or misleading in any material respect or otherwise
require amendment under applicable Law. Each of LAN, TAM, the TAM Direct
Controlling Shareholder, the Amaro Family and Holdco 2 shall take all steps
necessary to amend or supplement all Regulatory Documents filed or submitted by
it and to cause all such Regulatory Documents so amended or supplemented to be
filed with the relevant Regulatory Entity and to be disseminated to the holders
of Eligible TAM Shares, in each case as and to the extent required by applicable
Law. Each of TAM, the TAM Direct Controlling Shareholder, the Amaro Family
and LAN and their respective counsels shall be given reasonable opportunity to
review and comment on each Regulatory Document (including any amendments or
supplements thereto) before it is filed with or submitted to the relevant
Regulatory Entity or disseminated to the holders of Eligible TAM Shares.
Each of LAN, Holdco 2, TAM, the TAM Direct Controlling Shareholder, the Amaro
Family and their respective counsels shall provide the others with copies of any
written comments, and shall inform them of any oral comments, that it or its
counsel receives from any Regulatory Entity or its staff with respect to any
Regulatory Document promptly after the receipt of such comments and shall give
the other parties a reasonable opportunity to review and comment on any written
or oral responses to such comments before they are filed with or submitted to
such Regulatory Entity. Without limiting the foregoing, the parties hereby
acknowledge and agree that all Regulatory Documents filed with or submitted to
any Regulatory Entity or its staff shall be in form and substance reasonably
acceptable to each of LAN, TAM, the TAM Direct Controlling Shareholder and the
Amaro Family before they are filed with or submitted to such Regulatory Entity
or its staff.
-7-
SECTION
1.05. Terms and
Conditions.
The terms and conditions of the Exchange Offer shall comply with applicable
Law. The consummation of the Exchange Offer will be subject only to the
conditions set forth in Article VII (the “Exchange
Offer Conditions”), including the Minimum Conditions. For all
purposes of this Agreement, the consummation of the Exchange Offer shall be
deemed to be the purchases of TAM Stock pursuant to the auction (leilão) (the “Leilão”)
established in the edital relating to the
Exchange Offer (the “Edital”).
In order to accept the Exchange Offer, the holders of Eligible TAM Shares will
have to tender and not withdraw their shares in accordance with the requirements
of the Exchange Offer. If the Exchange Offer is required to be consummated
pursuant to Section 5.04(b), then the Amaro Family will cause Holdco 2 to
purchase and pay (with shares of LAN Common Stock issuable in the Mergers) for
all of the Eligible TAM Shares validly tendered and not withdrawn pursuant to
the Exchange Offer that Holdco 2 is obligated to purchase pursuant to the
terms of the Exchange Offer on the Expiration Date. Whenever
this Agreement requires the TAM Direct Controlling Shareholder, TEP Chile,
Holdco 2 or Sister Holdco to take any action, such requirement shall be
deemed to include an undertaking on the part of the Amaro Family or the TAM
Direct Controlling Shareholder, as applicable, to cause them to take such
action. The time at which the Mergers become effective is referred to
herein as the “Effective
Time.”
-8-
SECTION
1.06. Extensions and
Amendments.
Subject to the parties’ right to cause Holdco 2 to request permission from
the CVM to extend the expiration time for the Exchange Offer or to revoke the
Exchange Offer as provided below, the Exchange Offer shall initially expire on
the date provided in the Edital. If all of the Exchange Offer Conditions
are not satisfied at, or waived by the parties entitled to grant such waivers as
provided in Article VII prior to, any then scheduled expiration time for the
Exchange Offer, then LAN or the Amaro Family (but only if they are so entitled
to grant a waiver of any unsatisfied or unwaived conditions) may, from time to
time in its or their sole discretion, cause Holdco 2 to request permission
from the CVM to extend the expiration time for the Exchange Offer in maximum
increments of 30 days to no later than 28 days after the Commencement
Date. If both LAN and the Amaro Family agree to request a modification to
the terms and conditions of the Exchange Offer or revocation of the Exchange
Offer, the Amaro Family shall cause Holdco 2 to request permission from the
CVM to modify the terms and conditions of the Exchange Offer or to revoke the
Exchange Offer; provided, however, that the Amaro
Family shall not unreasonably withhold or delay their agreement to request any
such amendment that is not adverse to the Amaro Family or the holders of
Eligible TAM Shares. LAN and the Amaro Family shall cause Holdco 2 to
request permission from the CVM to revoke the Exchange Offer if this Agreement
and the Implementation Agreement terminate in accordance with their
terms.
SECTION
1.07. By-laws.
The parties shall take all necessary action so that immediately
following the Effective Time, the by-laws of TAM shall be amended so that they
will be in the form attached hereto as Exhibit 1
and the by-laws of Holdco 1, Sister Holdco and Holdco 2 shall be in
the forms attached hereto as Exhibits 2,
3
and 4,
respectively.
SECTION
1.08. Listing and
Delisting.
LAN shall use its commercially reasonable efforts to cause the following
listings to be approved as soon as practicable, and to cause such listings to
become effective, no later than the Commencement Date: (i) LAN BDRs representing
the shares of LAN Common Stock to be issued in the Mergers to be approved for
listing on the Bovespa, (ii) LAN ADRs representing shares of LAN Common Stock to
be issued in the Mergers to be approved for listing on the New York Stock
Exchange, Inc., subject to notice of issuance, and (iii) the shares of LAN
Common Stock to be issued in the Mergers to be approved for listing on the SSE
(collectively with each other and any other listings required by any
Governmental Entity, the “Required
Listings”). Each of TAM and the Amaro Family shall use its or their
commercially reasonable efforts to cause (i) each of the TAM Ordinary Stock and
TAM Preferred Stock to be delisted from the Bovespa, in each case if the
Delisting Condition was satisfied with respect to such class of TAM Stock, and
(ii) the TAM ADRs to be delisted from the NYSE and deregistered under the U.S.
Exchange Act, in each case as soon as practicable following the Effective
Time.
-9-
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF TAM
Except as
set forth in the TAM Financial Reporting Documents filed with the SEC or the
CVM, as the case may be, and made publicly available after December 31,
2009 and prior to the date of this Agreement (excluding, in each case, any
disclosures set forth in any risk factor section or in any other section to the
extent that they are forward-looking statements or cautionary, predictive or
forward-looking in nature) or in the corresponding sections or subsections of
the disclosure letter delivered by TAM to LAN not less than 24 hours prior
to entering into this Agreement (the “TAM
Disclosure Schedule”) (it being agreed that (i) the disclosure of any
fact or item in any section or subsection of the TAM Disclosure Schedule whose
relevance to any other section or subsection of this Agreement is reasonably
apparent from the face of such disclosure shall also be deemed to be disclosed
in the section or subsection of the TAM Disclosure Schedule that corresponds to
such other section or subsection of this Agreement and (ii) the exclusion
with respect to the TAM Financial Reporting Documents shall not apply to
Section 2.03, Section 2.06(a) or Section 2.06(b)), TAM hereby
represents and warrants to LAN as follows:
SECTION
2.01. Organization, Standing and
Corporate Power; Subsidiaries.
(a) Each of TAM and its Subsidiaries has been duly organized and is validly
existing and (with respect to jurisdictions that recognize such concept) in good
standing under the Law of the jurisdiction of its incorporation or organization,
as the case may be, and has all requisite power and authority and possesses all
governmental licenses, permits, authorizations and approvals necessary to enable
it to own, lease or otherwise hold and use its properties, rights and other
assets and to carry on its business and operations as currently conducted, other
than any such failures to have such power, authority, governmental licenses,
permits, authorizations or approvals or any such failures of Subsidiaries of TAM
to be duly organized, validly existing or in good standing that, individually or
in the aggregate, have not had and would not reasonably be expected to have a
TAM Material Adverse Effect. Each of TAM and its Subsidiaries is duly
qualified or licensed to do business and (with respect to jurisdictions that
recognize such concept) is in good standing in each jurisdiction in which the
nature of its business or operations or its ownership, leasing, holding or use
of its properties, rights or other assets makes such qualification, licensing or
good standing necessary, other than any such failures to be so qualified,
licensed or in good standing that, individually or in the aggregate, have not
had and would not reasonably be expected to have a TAM Material Adverse
Effect. Each of TAM’s Airline Affiliates is an air carrier duly authorized
to act as such by the Governmental Entity of competent jurisdiction with which
it holds its operating authority.
(b) Section 2.01(b)
of the TAM Disclosure Schedule lists, as of the date of this Agreement, each of
TAM’s “significant subsidiaries,” as such term is defined in Section 1-02
of Regulation S-X promulgated by the SEC. All of the Equity Securities and
Convertible Securities of each Subsidiary of TAM are owned of record and
beneficially, directly or indirectly, by TAM. All the issued and
outstanding Equity Securities of each Subsidiary of TAM have been validly issued
and are fully paid and nonassessable and are owned of record and beneficially,
directly or indirectly, by TAM free and clear of all pledges, liens, charges,
encumbrances or security interests of any kind or nature whatsoever
(collectively, “Liens”),
and free of any restriction on the right to vote, sell or otherwise dispose of
such Equity Securities. Except for the Equity Securities of the
Subsidiaries of TAM, TAM does not own, directly or indirectly, any Equity
Securities or Convertible Securities of any Person.
-10-
SECTION
2.02. By-laws.
TAM has made available to LAN prior to the date of this Agreement a complete and
accurate copy of the by-laws of TAM (the “TAM
By-laws”) in the form attached as Exhibit 5
and the by-laws or comparable organizational documents of each of TAM’s
“significant subsidiaries,” as such term is defined in Section 1-02 of
Regulation S-X promulgated by the SEC (collectively, the “TAM
Subsidiary By-laws”), in each case as amended to the date of this
Agreement. Each of the TAM By-laws and the TAM Subsidiary By-laws is in
full force and effect and no other organizational documents are applicable to,
or binding upon, TAM or any Subsidiary of TAM.
SECTION
2.03. Capitalization.
(a) The authorized capital stock of TAM is R$
1,200,000,000. At the close of business on January 11, 2011 (the “TAM
Capitalization Date”):
(i) 55,816,683
shares of TAM Ordinary Stock were issued and outstanding and no shares of TAM
Ordinary Stock were held by TAM in its treasury; and
(ii) 100,390,098
shares of TAM Preferred Stock were issued and outstanding and 223,176 shares of
TAM Preferred Stock were held by TAM in its treasury.
(b) Section 2.03(a)
of the TAM Disclosure Schedule contains a correct and complete list as of the
date of this Agreement of all of the outstanding TAM Stock Options issued under
the TAM stock option plan (the “TAM Stock
Plans”), including the date of grant, vesting terms, term, number of
shares of TAM Preferred Stock issuable upon exercise and the exercise price per
share of TAM Preferred Stock.
(c) Except
as set forth above in Section 2.03(a), at the close of business on the TAM
Capitalization Date, no Equity Securities or Convertible Securities of TAM were
issued, reserved for issuance or outstanding. At the close of business on
the TAM Capitalization Date, (i) no shares of TAM Stock were owned by any
Subsidiary of TAM and (ii) there were no outstanding stock options, stock
appreciation rights, “phantom” stock rights, performance units, rights to
receive shares of TAM Stock or any other Equity Securities of TAM on a deferred
basis or other rights that are linked to the value of the shares of TAM Stock or
any other Equity Securities of TAM (collectively, “TAM
Stock-Based Awards”) other than the TAM Stock Options specified in
Section 2.03(a). All outstanding shares of TAM Stock are, and all
shares of TAM Preferred Stock which may be issued pursuant to the TAM Stock
Options will be, when issued in accordance with the terms thereof, duly
authorized, validly issued, fully paid and nonassessable and not subject to
preemptive rights. There are no bonds, debentures, notes or other
Indebtedness of TAM having the right to vote (or convertible into, or
exercisable or exchangeable for, securities having the right to vote) with the
shareholders of TAM on any matters. Except as set forth above in
Section 2.03(a) and for issuances of shares of TAM Preferred Stock issuable
pursuant to the TAM Stock Options specified in Section 2.03(a) or as
may otherwise be permitted under the Implementation Agreement, (x) there
are not issued, reserved for issuance or outstanding (A) any Equity
Securities of TAM or any of its Subsidiaries, (B) any Convertible
Securities of TAM or any of its Subsidiaries, (C) any obligations of TAM or
any of its Subsidiaries to issue any Equity Securities or Convertible Securities
of TAM or any of its Subsidiaries or (D) any TAM Stock-Based Awards and
(y) there are not any outstanding obligations of TAM or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any Equity Securities or
Convertible Securities of TAM or any of its Subsidiaries or to issue, deliver or
sell, or cause to be issued, delivered or sold, any such securities, and neither
TAM nor any of its Subsidiaries is a party to any voting Contract with respect
to the voting of any such securities.
-11-
(d) Each
TAM Stock Option was properly accounted for on the books and records of TAM and
qualifies for the tax and accounting treatment afforded thereto in TAM’s Tax
Returns and financial statements, respectively. Each grant of TAM Stock
Options was made in accordance with the terms of the applicable TAM Stock Plan
and any applicable Law and regulatory rules or requirements and has a grant date
identical to the date on which it was actually granted or awarded by TAM’s board
of directors (the “TAM
Board”) or the compensation committee thereof. The per share
exercise price of each TAM Stock Option was determined in accordance with the
applicable TAM Stock Plan.
SECTION
2.04. Authority.
TAM has all requisite corporate power and authority to execute, deliver and
perform this Agreement and the other Transaction Agreements to which it is a
party and to consummate the transactions contemplated hereby and thereby; provided, however, that TAM shall not
have the power and authority to consummate the Mergers unless the Requisite TAM
Shareholder Approval is obtained. The execution, delivery and performance
of this Agreement and such other Transaction Agreements by TAM and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on the part of TAM (other than the
Requisite TAM Shareholder Approval), and no other corporate proceedings on the
part of TAM or its shareholders (other than the Requisite TAM Shareholder
Approval) are necessary to authorize this Agreement and such other Transaction
Agreements or to consummate the transactions contemplated hereby and
thereby. This Agreement and the other Transaction Agreements to which TAM
is a party have been duly executed and delivered by TAM and constitute legal,
valid and binding obligations of TAM, enforceable against TAM in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent transfer, moratorium,
reorganization or similar Law of general applicability relating to or affecting
the rights of creditors and to the availability of equitable remedies
(regardless of whether such enforceability is considered in a proceeding in
equity or at Law). The TAM Board has unanimously, by resolutions duly
adopted at a meeting duly called and held, approved this Agreement and the other
Transaction Agreements, the Exchange Offer and the other transactions
contemplated hereby and thereby and recommended the Exchange Offer to the
holders of the Free Float Shares, which resolutions have not as of the date of
this Agreement been subsequently rescinded, modified or withdrawn in any way,
and prior to the Commencement Date will recommend that they tender their shares
of TAM Stock into the Exchange Offer.
-12-
SECTION
2.05. No Conflict; Required
Filings and Consents.
(a) The execution
and delivery of this Agreement and the other Transaction Agreements to which TAM
is a party by TAM do not, and the performance of this Agreement and the other
Transaction Agreements by TAM and consummation of the transactions
contemplated hereby and thereby will not, conflict with, or result in any
violation or breach of, or default (with or without notice, lapse of time or
both) under, or result in any termination or modification of or acceleration
under, or any change in any right, obligation or benefit under, or result in any
Lien on any property or assets of TAM or any of its Subsidiaries pursuant to
(i) the TAM By-laws or any TAM Subsidiary By-laws, (ii) any loan,
credit agreement, bond, debenture, note, mortgage, indenture, lease, supply
agreement, license agreement, development agreement or other contract,
agreement, obligation, commitment or instrument (each, a “Contract”)
to which TAM or any of its Subsidiaries is a party or by which any of them or
any of their respective properties, rights or other assets is bound or subject
or (iii) assuming the consents, approvals, filings and other matters
referred to in Section 2.05(b) are duly obtained or made, any Law or
Order applicable to TAM, any of its Subsidiaries or their respective properties,
rights or other assets, other than, in the case of clause (ii), any such
conflicts, violations, breaches, defaults, terminations, modifications,
accelerations, changes or Liens that, individually or in the aggregate, would
not reasonably be expected to have a TAM Material Adverse Effect.
(b) The
execution, delivery and performance of this Agreement and the other Transaction
Agreements to which TAM is a party by TAM, the consummation of the transactions
contemplated hereby and thereby and the continuing operation of the businesses
of TAM and its Subsidiaries after the Effective Time do not and will not require
any consent, approval, order, authorization or permit of, action by, filing or
registration with or notification to any governmental, quasi-governmental or
regulatory authority, body, department, commission, board, bureau, agency,
division, court, organized securities exchange or other legislative, executive
or judicial governmental entity or instrumentality of any country, nation,
republic, federation or similar entity or any state, county, parish or
municipality, jurisdiction or other political subdivision thereof (each, a
“Governmental
Entity”), other than (i) any application, filing or submission required
to be made and any consent, approval, authorization or authority required to be
made or obtained under Law 7,565/86, as amended (the “Brazilian
Aeronautical Code”), the Chilean Aeronautical Code, Title 49 of the U.S.
Code or under any regulation, rule, order, notice or policy of ANAC, Dirección
General de Aeronáutica Civil (the “DGAC”),
the Junta de Aeronáutica Civil (the “JAC”),
the U.S. Federal Aviation Administration (the “FAA”),
the U.S. Department of Transportation (the “DOT”),
the Federal Communications Commission (the “FCC”)
and the U.S. Department of Homeland Security (the “DHS”),
including the U.S. Transportation Security Administration (the “TSA”)
and any similar Governmental Entity in the E.U., (ii) the filing of the Schedule
TO, the Form F-4 and the other Exchange Offer Documents and the Schedule 14D-9
with the SEC, the declaration of effectiveness of the Form F-4 by the SEC, and
the filing with the SEC of such reports under, and such other compliance with,
the U.S. Securities Laws in connection with the Exchange Offer and Mergers,
(iii) the filing of the Formulário de Referência of
LAN with the CVM, the Brazilian Exchange Offer Documents with the CVM and the
Level II BDR Program for the LAN BDRs with the CVM and the Bovespa, and the
filings with the SVS and the SSE in connection with the Exchange Offer and the
Mergers, (iv) any notices, filings or approvals under the competition, merger
control, antitrust or similar Law listed in Section 2.05(b) of the TAM
Disclosure Schedule, (v) such filings and approvals as are required to be made
or obtained under the securities or “blue sky” laws of various states of the
United States in connection with the Exchange Offer and Mergers, (vi) any
consent, approval, order, authorization, authority, transfer, waiver,
disclaimer, registration, declaration or filing required to be made or obtained
from any other Governmental Entity that regulates any aspect of airline
operations or business, including environmental (e.g., noise, air emissions and
water quality), aircraft, air traffic control and airport communications,
agricultural, export/import, immigration and customs (collectively with the
Governmental Entities referred to in clause (i) above, the “TAM
Airline Regulatory Entities”), (vii) any filings required under the rules
and regulations of Bovespa or the NYSE (NYSE and Bovespa collectively, the
“TAM Stock
Exchanges”), and (viii) such other consents, approvals, orders,
authorizations, permits, actions, notifications, registrations, declarations and
filings which, if not obtained or made, individually or in the aggregate, would
not reasonably be expected to have a TAM Material Adverse Effect.
-13-
SECTION
2.06. TAM Financial Reporting
Documents; Financial Statements; No Undisclosed Liabilities.
(a) TAM has filed or furnished, as applicable, on a timely basis, all
reports, schedules, forms, statements, certifications and other documents
(including exhibits and other information incorporated therein) with or to, as
applicable, the CVM or the SEC that were required to be so filed or furnished by
TAM since December 31, 2006 (such documents, together with any documents so
filed or furnished during such period by TAM on a voluntary basis, the “TAM
Financial Reporting Documents”). On the date on which it was filed
with or furnished to the CVM or the SEC, as the case may be, each TAM Financial
Reporting Document so filed or furnished prior to the date of this Agreement
complied in all material respects with the applicable requirements of the U.S.
Securities Laws or other applicable securities Laws and on the date on which it
will be filed with or furnished to the CVM or the SEC, as the case may be, each
TAM Financial Reporting Document so filed or furnished on or after the date of
this Agreement will comply in all material respects with such
requirements. On the date on which it was filed with or furnished to the
CVM or the SEC, as the case may be, no TAM Financial Reporting Document so filed
or furnished prior to the date of this Agreement contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. On the date
on which it will be filed with or furnished to the CVM or the SEC, as the case
may be, no TAM Financial Reporting Document so filed or furnished on or after
the date of this Agreement will contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. Since December 31, 2006, TAM
has complied in all material respects with all applicable requirements of the
U.S. Securities Laws or other applicable securities Law including the
Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley
Act”), and the rules and regulations thereunder with respect thereto, and
the TAM Stock Exchanges.
-14-
(b) Each
of the consolidated statements of financial position included in or incorporated
by reference into the TAM Financial Reporting Documents fairly presents, or in
the case of TAM Financial Reporting Documents filed with or furnished to the CVM
or the SEC, as the case may be, on or after the date of this Agreement, will
fairly present, in each case in all material respects, the consolidated
financial position of TAM as of its date and each consolidated income statement,
consolidated cash flow statement, consolidated statement of changes in equity,
consolidated statement of comprehensive income (loss) included in or
incorporated by reference in the TAM Financial Reporting Documents fairly
presents, or in the case of TAM Financial Reporting Documents filed with or
furnished to the CVM or the SEC, as the case may be, on or after the date of
this Agreement, will fairly present, in each case in all material respects, the
results of their operations, cash flows, changes in equity and comprehensive
income, respectively, for the periods covered thereby (subject, in the case of
unaudited statements, to notes and normal year-end audit adjustments that will
not be material in amount or effect), and each of the foregoing financial
statements was prepared or, in the case of TAM Financial Reporting Documents
filed with or furnished to the CVM or the SEC, as the case may be, on or after
the date of this Agreement, will be prepared, in accordance with International
Financial Reporting Standards (“IFRS”)
as issued by the International Accounting Standards Board (“IASB”)
applied on a consistent basis. To TAM’s Knowledge, there is no applicable
accounting rule, consensus or pronouncement that has been adopted by the CVM or
the SEC, as the case may be, the IASB or any similar body as of, but is not in
effect as of, the date of this Agreement that, if implemented, would reasonably
be expected to have a TAM Material Adverse Effect (it being agreed that for
purposes of this Section 2.06(b), effects resulting from or arising in
connection with the matters set forth in clause (c) of the definition of
the term “TAM Material Adverse Effect” shall not be excluded in determining
whether a TAM Material Adverse Effect would reasonably be expected to
occur).
(c) Each
of TAM and its Subsidiaries has timely filed all submissions, reports,
registrations, schedules, forms, statements and other documents, together with
any amendments required to be made with respect thereto, that they were required
to file since December 31, 2006 with the CVM, any TAM Stock Exchange, any
TAM Airline Regulatory Entity and any other non-U.S. Governmental Entity, and
has paid all fees and assessments due and payable in connection therewith, in
each case other than any failures to file such reports, registrations,
schedules, forms, statements or other documents, or to pay such fees and
assessments, that individually or in the aggregate, have not had and would not
reasonably be expected to have a TAM Material Adverse Effect.
-15-
(d) Neither
TAM nor any of its Subsidiaries has any liability or obligation of any nature
(whether accrued, absolute, contingent or otherwise), other than those
(i) reflected, reserved for or disclosed in the most recent balance sheet
of TAM included in TAM’s Annual Report on Form 20-F for the year ended
December 31, 2009, as filed with the SEC prior to the date of this
Agreement, (ii) incurred in the ordinary course of business consistent with
past practice since December 31, 2009, (iii) incurred pursuant to the
transactions contemplated in this Agreement or the Implementation Agreement, or
(iv) that, individually or in the aggregate, have not had and would not
reasonably be expected to have a TAM Material Adverse Effect. Neither TAM
nor any of its Subsidiaries is a party to, or has any commitment to become a
party to, any joint venture, off-balance sheet partnership or any similar
Contract or arrangement (including any Contract or arrangement relating to any
transaction or relationship between or among TAM and any of its Subsidiaries, on
the one hand, and any unconsolidated Affiliate, including any structured
finance, special purpose or limited purpose entity or Person, on the other hand,
or any “off-balance sheet arrangement” (as defined in Item 303(a) of
Regulation S-K of the SEC)), where the result, purpose or intended effect of
such Contract or arrangement is to avoid disclosure of any material transaction
involving, or material liabilities of, TAM or any of its Subsidiaries in the
financial statements of TAM or any of its Subsidiaries or the TAM Financial
Reporting Documents. None of TAM’s Subsidiaries are, or have at any time
since January 1, 2006 been, subject to the reporting requirements of
Section 13(a) or 15(d) of the U.S. Exchange Act.
(e) TAM
and its Subsidiaries maintain disclosure controls and procedures required by
Rule 13a-15 or 15d-15 under the U.S. Exchange Act. Such disclosure
controls and procedures are effective to ensure that information required to be
disclosed by TAM is recorded and reported on a timely basis to the individuals
responsible for the preparation of TAM’s filings with the SEC and other public
disclosure documents. TAM and its Subsidiaries maintain internal control
over financial reporting (as defined in Rule 13a-15 or 15d-15, as applicable,
under the U.S. Exchange Act). Such internal control over financial
reporting is effective in providing reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with IFRS and includes policies and
procedures that (i) pertain to the maintenance of records that in
reasonable detail accurately and fairly reflect the transactions and
dispositions of the assets of TAM and its consolidated Subsidiaries, (ii)
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with IFRS, and that
receipts and expenditures of TAM and its consolidated Subsidiaries are being
made only in accordance with authorizations of management and directors of TAM
and its consolidated Subsidiaries, and (iii) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition,
use or disposition of the assets of TAM and its consolidated Subsidiaries that
could have a material effect on its financial statements. TAM has
disclosed, based on its most recent evaluation prior to the date of this
Agreement, to TAM’s auditors and the audit committee of TAM’s board of directors
(A) any significant deficiencies or material weaknesses in the design or
operation of its internal controls over financial reporting that are reasonably
likely to adversely affect TAM’s ability to record, process, summarize and
report financial information and (B) any fraud, whether or not material, that
involves management or other employees who have a significant role in TAM’s
internal control over financial reporting. TAM has made available to LAN
(i) a summary of any such disclosure made by management to TAM’s auditors and
audit committee since January 1, 2006 and (ii) any communication since
January 1, 2006 made by management or TAM’s auditors to the audit committee
required or contemplated by listing standards of the TAM Stock Exchanges, the
audit committee’s charter or professional standards of the IASB or Public
Company Accounting Oversight Board.
-16-
(f) Since
December 31, 2006, no material complaints from any source regarding
accounting, internal controls or auditing matters, and no concerns from
employees of TAM or any of its Subsidiaries regarding questionable accounting or
auditing matters, have been received by TAM or any of its Subsidiaries.
TAM has made available to LAN a summary of all material complaints or concerns
relating to other matters made since December 31, 2006 through TAM’s
whistle-blower hot-line or equivalent system for receipt of employee concerns
regarding possible violations of Law. No attorney representing TAM or any
of its Subsidiaries, whether or not employed by TAM or any of its Subsidiaries,
has reported evidence of a violation of securities Laws, breach of fiduciary
duty or similar violation by TAM or any of its officers, directors, employees or
agents to TAM’s chief legal officer, the audit committee (or other committee
designated for the purpose) of the board of directors of TAM or the board of
directors of TAM pursuant to the rules adopted pursuant to Section 307 of the
Sarbanes-Oxley Act or any TAM policy contemplating such reporting, including in
instances not required by those rules.
SECTION
2.07. Absence of Certain Changes
or Events.
(i) Since December 31, 2009, there has not been any change in the
business, results of operations, financial condition, assets or liabilities of
TAM and its Subsidiaries, taken as a whole, or any other change, event,
condition, development or occurrence (including any adverse change or
development with respect to any such matters that existed on or prior to
December 31, 2009) that, individually or in the aggregate, has had or would
reasonably be expected to have a TAM Material Adverse Effect and (ii) since
December 31, 2009, (A) each of TAM and its Subsidiaries has conducted
its business in the ordinary course consistent with past practice and
(B) neither TAM nor any of its Subsidiaries has taken any action which, if
taken after the date of this Agreement, would require the consent of LAN under
the Implementation Agreement.
SECTION
2.08. Litigation.
Except for any such matters that, individually or in the aggregate, have not had
and would not reasonably be expected to have a TAM Material Adverse
Effect: (a) there are no actions, suits, claims, allegations,
hearings, proceedings, arbitrations, mediations, audits, inquiries or
investigations (whether civil, criminal, administrative or otherwise)
(collectively, “Actions”)
pending or, to the Knowledge of TAM, threatened against TAM or any of its
Subsidiaries, (b) neither TAM nor any of its Subsidiaries nor any of their
respective properties, rights or assets is subject to, or bound by, any Order,
and (c) there are no inquiries or investigations by any Governmental Entity
or any whistle-blower complaints pending or, to the Knowledge of TAM, threatened
against TAM or any of its Subsidiaries.
-17-
SECTION
2.09. Material
Contracts.
(a) As of the date of this Agreement, neither TAM nor any of its
Subsidiaries is a party to or bound by any Contract (i) that is a “material
contract” (as defined in Item 601(b)(10) of Regulation S-K of the SEC) to
be performed after the date of this Agreement that has not been filed as such in
a TAM Financial Reporting Document prior to the date of this Agreement;
(ii) that limits or purports to limit in any material respect any type or
line of business in which TAM or any of its Subsidiaries (including, after
giving effect to the Mergers, LAN or any of its Subsidiaries) may engage or any
manner or locations in which any of them may so engage in any business; (iii)
that is a(n) (A) alliance or other brand alliance agreement, (B) code sharing
agreement, (C) frequent flyer participation agreement, (D) capacity purchase or
similar agreement, (E) cooperation, joint venture, partnership, profit or
revenue sharing agreement, (F) special prorate agreement or (G) interlining
agreement with any air carrier (including all material amendments to each of the
foregoing agreements), in each case that is material to the business, financial
condition, results of operations or prospects of TAM and its Subsidiaries, taken
as a whole; (iv) pursuant to which any Indebtedness of TAM or any of its
Subsidiaries in excess of $50 million is outstanding or may be incurred that has
not been filed in a TAM Financial Reporting Document prior to the date of this
Agreement; (v) that involves or could reasonably be expected to involve
aggregate payments by or to TAM and/or its Subsidiaries in excess of $30 million
in any twelve-month period, except for any Contract that may be canceled without
penalty or termination payments by TAM and/or its Subsidiaries upon notice of 60
days or less; (vi) any aircraft purchase agreement, engine purchase agreement or
engine maintenance agreement that involves or is reasonably expected to involve
aggregate payments by or to TAM or any of its Subsidiaries in excess of $30
million in any twelve-month period; or (vii) pursuant to which it is licensed to
use Intellectual Property of a third party that is material to the operation of
its business, or licenses to a third party rights in the Intellectual Property
it owns. Each such Contract described in clauses (i) through
(vii) (whether or not disclosed in the TAM Disclosure Schedule) is referred
to herein as a “TAM
Material Contract.”
(b) Each
TAM Material Contract is, and after the consummation of the transactions
contemplated by this Agreement and the Implementation Agreement will continue to
be, a valid and binding obligation of TAM and its Subsidiaries (to the extent
they are parties thereto or bound thereby) enforceable against TAM and, to TAM’s
Knowledge, each other party thereto in accordance with its terms and is in full
force and effect, and each of TAM and each of its Subsidiaries (to the extent
they are party thereto or bound thereby) and, to TAM’s Knowledge, each other
party thereto has performed in all material respects all obligations required to
be performed by it under each TAM Material Contract. Neither TAM nor any
of its Subsidiaries has received notice, nor does it have Knowledge, of any
material violation or default in respect of any material obligation under (or
any condition which with the passage of time or the giving of notice or both
would result in such a violation or default), or any intention to cancel,
terminate, change the scope of rights and obligations under or not to renew, any
TAM Material Contract.
-18-
(c) Section 2.09(c)
of the TAM Disclosure Schedule sets forth a true and complete list of all
(i) alliance or brand alliance agreements, (ii) code sharing
agreements, (iii) frequent flyer participation agreements,
(iv) capacity purchase or similar agreements, (v) cooperation, joint
venture, partnership, profit or revenue sharing agreements, (vi) special
prorate agreements and (vii) interlining agreements with any air carrier to
which TAM or any of its Subsidiaries is a party or is otherwise
bound.
SECTION
2.10. Licenses; Compliance with
Laws.
(a) Section 2.10(a) of the TAM Disclosure Schedule sets forth a
true and complete list of all of its (i) operating certificates, including
the issuing Governmental Entity, date of issuance and date of expiration, and
(ii) air traffic rights, including the issuing Governmental Entity, date of
issuance and date of expiration, for both scheduled and non-scheduled operations
of each of TAM and its Subsidiaries in effect as of the date of this
Agreement.
(b) Each
of TAM and its Subsidiaries has in effect all approvals, authorizations,
registrations, certifications, filings, franchises, licenses, consents,
variances, concessions, exemptions, orders, notices, permits, operating
certificates, Slots and air service designations of, with or granted by all
Governmental Entities and third parties including all licenses, certificates and
permits from all Governmental Entities to act as an air carrier, as applicable
(collectively, “Licenses”)
necessary for it to own, lease or operate its properties, rights and other
assets and to carry on its business and operations as currently conducted
(collectively, the “TAM
Licenses”). Each of TAM and its Subsidiaries is, and since
December 31, 2006 has been, in compliance with (i) its obligations under
each TAM License applicable to it and (ii) the rules and regulations of the
Governmental Entity which issued such TAM License, in each case other than any
failures to be in such compliance that, individually or in the aggregate, have
not had and would not reasonably be expected to have a TAM Material Adverse
Effect. There is not pending nor, to TAM’s Knowledge, threatened by or
before any Governmental Entity any material proceeding, notice of violation,
order of forfeiture or complaint or investigation against TAM or any of its
Subsidiaries relating to any TAM License, other than any such proceedings,
notices, orders, complaints or investigations that, individually or in the
aggregate, have not had and would not reasonably be expected to have a TAM
Material Adverse Effect. No action of any Governmental Entity in granting
any TAM License has been reversed, stayed, enjoined, annulled or suspended, and
there is not pending or, to TAM’s Knowledge, threatened, any material
application, petition, objection or other pleading with any Governmental Entity
that challenges or questions the validity of, or any rights of the holder under,
any TAM License, in each case other than any such action, application, petition,
objection or pleading that, individually or in the aggregate, has not had and
would not reasonably be expected to have a TAM Material Adverse Effect.
The consummation of the Exchange Offer and/or Mergers will not cause, and there
is no basis for, any revocation, modification, cancelation or transfer of any
TAM Licenses that, individually or in the aggregate, would reasonably be
expected to have a TAM Material Adverse Effect.
-19-
(c) Except
for those matters that, individually or in the aggregate, have not had and would
not reasonably be expected to have a TAM Material Adverse Effect, (i) each
of TAM and its Subsidiaries is, and since December 31, 2006 has been, in
compliance with all applicable Law and Orders and all applicable operating
certificates, air carrier obligations, airworthiness directives, aviation
regulations and other rules, regulations, directives, orders and policies of any
TAM Airline Regulatory Entity applicable to it, its properties, rights or other
assets or its businesses or operations and (ii) to TAM’s Knowledge, none of
the officers, directors, or agents (in their capacity as such) of TAM or any of
its Subsidiaries is, or since December 31, 2006 has been, in violation of
any Law applicable to its properties, rights or other assets or its businesses
or operations relating to (A) the use of corporate funds for political
activity or for the purpose of obtaining or retaining business,
(B) payments to government officials from corporate funds, or
(C) bribes, rebates, payoffs, influence payments, kickbacks or the
provision of similar benefits. No investigation or review by any
Governmental Entity with respect to TAM or any of its Subsidiaries is pending
or, to TAM’s Knowledge, threatened, nor has any Governmental Entity indicated an
intention to conduct the same, other than any such investigations or reviews
that, individually or in the aggregate, have not had and would not reasonably be
expected to have a TAM Material Adverse Effect.
(d) Each
of TAM and its Subsidiaries is, and since December 31, 2006 has been, in
compliance in all material respects with the U.S. Foreign Corrupt Practices Act
and all other applicable non-U.S. Laws concerning bribery or corrupt payments
(collectively, “Corrupt
Practices Laws”). Since December 31, 2006, (i) neither TAM nor
any of its Subsidiaries has made any voluntary disclosure of any actual or
alleged violation or breach of any Corrupt Practices Law, (ii) no Governmental
Entity has notified TAM or any of its Subsidiaries in writing of any actual or
alleged violation or breach of any Corrupt Practices Law, (iii) to the Knowledge
of TAM, neither TAM nor any of its Subsidiaries has undergone or is undergoing
any audit, review, inspection, investigation, survey or examination of records,
in each case conducted by a Governmental Entity and relating to TAM’s or any of
its Subsidiary’s compliance with any Corrupt Practices Law and there is no basis
for any such audit, review, inspection, investigation, survey or examination of
records, (iv) neither TAM nor any of its Subsidiaries has been or is now
under any administrative, civil or criminal charge or indictment or, to the
Knowledge of TAM, investigation alleging noncompliance with any Corrupt
Practices Law nor, to the Knowledge of TAM, is there any basis for any such
charge, indictment or investigation, and (v) neither TAM nor any of its
Subsidiaries has been or is now a party to any administrative or civil
litigation or proceeding alleging noncompliance with any Corrupt Practices Law
nor, to the Knowledge of TAM, is there any basis for any such
Action.
-20-
SECTION
2.11. Environmental
Matters.
(a) Except for those matters that, individually or in the aggregate,
have not had and would not reasonably be expected to have a TAM Material Adverse
Effect: (i) TAM and its Subsidiaries have complied at all times
with all applicable Environmental Laws; (ii) there have been no Releases of
Hazardous Materials and Hazardous Materials are not otherwise present in, on,
under, from or affecting any properties or facilities currently or formerly
owned, leased or operated by TAM, any of its Subsidiaries or any predecessor of
any of them; provided,
however, that TAM may
handle and transport dangerous goods as detailed in, and in accordance with,
International Air Transport Association’s (“IATA”)
Dangerous Goods Regulations; (iii) neither TAM nor any of its Subsidiaries
nor, to the Knowledge of TAM, any other Person whose conduct could result in
liability to TAM or any of its Subsidiaries has Released any Hazardous Materials
at any other location; (iv) neither TAM nor any of its Subsidiaries nor, to
the Knowledge of TAM, any predecessor of any of them is subject to Order of or
with any Governmental Entity or any indemnity obligation or other Contract with
any other Person relating to obligations or liabilities under Environmental Laws
or concerning Hazardous Materials; (v) neither TAM nor any of its
Subsidiaries has received any claim, notice or complaint, or is subject to any
proceeding, relating to noncompliance with or liability under Environmental Laws
or to Hazardous Materials, and no such matter has been threatened to the
Knowledge of TAM; (vi) to the best knowledge of TAM, there are no other
circumstances or conditions involving TAM or any of its Subsidiaries that could
reasonably be expected to result in any claim, liability, investigation, cost or
restriction on the ownership, use, or transfer of any property pursuant to any
Environmental Law; and (vii) TAM has delivered to LAN copies of all
environmental reports, studies, assessments, sampling data, analyses, memoranda
and other environmental information in its possession relating to TAM or its
Subsidiaries or their respective current and former properties, facilities or
operations.
(b) For
the purposes of this Agreement, the following terms shall have the meanings
assigned below:
(i) “Environmental
Laws” means any federal, state, local or foreign statute, Law or Order
relating to: (A) the protection, investigation or restoration of the
environment, health, safety, or natural resources, (B) the handling, use,
presence, disposal, release or threatened release of any Hazardous Materials or
(C) noise, odor, indoor air, employee exposure, wetlands, pollution,
contamination or any injury or threat of injury to Persons or property relating
to any Hazardous Materials.
(ii) “Hazardous
Materials” means (A) petroleum, petroleum products and by-products,
asbestos and asbestos-containing materials, urea formaldehyde foam insulation,
electronic, medical or infectious wastes, polychlorinated biphenyls, radon gas,
mold, radioactive substances, chlorofluorocarbons and all other ozone-depleting
substances and (B) any other chemical, material, substance, waste,
pollutant, contaminant or any dangerous goods generally that could result in
liability under, or that is prohibited, limited or regulated by or pursuant to,
any Environmental Law.
(iii) “Release”
means any spilling, leaking, pumping, pouring, emitting, placing, emptying,
discharging, injecting, escaping, leaching, dumping, disposing or arranging for
disposal or migrating into or through the environment or any natural or man-made
structure.
-21-
SECTION
2.12. Labor and Employment
Matters.
TAM and its Subsidiaries have complied in all material respects with all
applicable labor, social security and health and safety Law in connection with
all of the employees of TAM and its Subsidiaries. The salaries and other
compensation payable to the senior management and other employees of TAM and all
of its Subsidiaries have been and are currently being paid in accordance with
applicable Laws and all Contracts with any employees of TAM or any of its
Subsidiaries. As of the date of this Agreement, Section 2.12 of the
TAM Disclosure Schedule sets forth a true and complete list of collective
bargaining or other labor union Contracts applicable to any employees of TAM or
any of its Subsidiaries. Since December 31, 2006, there have been no
strikes, work stoppages or lockouts by or with respect to any employee of TAM or
any of its Subsidiaries, other than any such strikes, work stoppages or lockouts
that, individually or in the aggregate, have not had and would not reasonably be
expected to have a TAM Material Adverse Effect. Neither TAM nor any of its
Subsidiaries has breached or otherwise failed to comply with any provision of
any collective bargaining or other labor union Contract applicable to any
employees of TAM or any of its Subsidiaries, and there are no written
grievances or written complaints outstanding or, to TAM’s Knowledge, threatened
against TAM or any of its Subsidiaries under any such Contract other than any
such breaches, failures to comply, grievances or complaints that, individually
or in the aggregate, have not had and would not reasonably be expected to have a
TAM Material Adverse Effect. TAM has made available to LAN and its
Representatives true and complete copies of all Contracts set forth in
Section 2.12 of the TAM Disclosure Schedule, including all amendments
applicable to such Contracts. There are no illegal labor practice
complaints or other material labor Actions pending against TAM or any of its
Subsidiaries and, to TAM’s Knowledge, no circumstances exist that could be the
legitimate basis of such complaint or Action except for any complaints or
Actions that, individually or in the aggregate, have not had and would not
reasonably be expected to have a TAM Material Adverse Effect.
SECTION
2.13. Aircraft.
(a) Section 2.13(a)(i) of the TAM Disclosure Schedule sets forth a true and
complete list of (i) all aircraft operated under the operating certificate of
TAM or any of its Subsidiaries and (ii) all aircraft owned or leased by TAM or
any of its Subsidiaries, in each case as of October 15, 2010 (collectively, the
“TAM
Aircraft”), including a description of the type and manufacturer serial
number of each such aircraft. Section 2.13(a)(ii) of the TAM
Disclosure Schedule sets forth a true and complete list, as of the date of this
Agreement, containing all Contracts (other than (x) existing aircraft leases or
(y) Contracts that may be terminated or canceled by TAM or any of its
Subsidiaries without incurring any penalty or other material liability except
for the forfeiture of any previously made prepayment or deposit) pursuant to
which TAM or any of its Subsidiaries has a binding obligation to purchase or
lease aircraft (collectively, regardless of whether they are listed in the TAM
Disclosure Schedule, the “TAM
Aircraft Contracts”), including for each TAM Aircraft Contract the
manufacturer and model of all aircraft subject thereto, the nature of the
purchase or lease obligation (e.g., firm commitment,
subject to reconfirmation or otherwise) and the anticipated year of delivery of
each aircraft thereunder. Except as identified in writing by TAM to LAN
prior to the date of this Agreement, TAM has delivered or made available to LAN
redacted (as to pricing and other commercially sensitive terms) copies of all
TAM Aircraft Contracts, including all amendments, modifications and supplements
thereto.
-22-
(b) Except
for any such matters that, individually or in the aggregate, have not had and
would not reasonably be expected to have a TAM Material Adverse
Effect:
(i) each
TAM Aircraft has a validly issued, current individual aircraft Certificate of
Airworthiness and Nationality issued by ANAC and, if required by applicable Law,
operation specifications approved by the FAA and the competent department of
Paraguay with respect to such TAM Aircraft and all requirements for the
effectiveness of each such certificate and operation specifications have been
satisfied;
(ii)
other than any grounded TAM Aircraft, each TAM
Aircraft’s structure, systems and components are functioning in accordance with
their respective intended uses as set forth in any applicable TAM Airline
Regulatory Entity, manufacturer or otherwise contractually approved maintenance
program (or are in the process of repair or maintenance), including any
applicable manuals, technical standard orders or parts manufacturing approval
certificates, and all grounded TAM Aircraft are being stored in accordance with
any applicable TAM Airline Regulatory Entity, manufacturer or otherwise
contractually approved maintenance program;
(iii) all
deferred maintenance items and temporary repairs with respect to each such TAM
Aircraft have been or will be made materially in accordance with any applicable
TAM Airline Regulatory Entity, manufacturer or otherwise contractually approved
maintenance programs;
(iv) each
TAM Aircraft is properly registered on the aircraft registry of each applicable
TAM Airline Regulatory Entity;
(v) neither
TAM nor any of its Subsidiaries is a party to any interchange or pooling
agreements with respect to its TAM Aircraft, except for interchange or pooling
agreements among TAM’s Subsidiaries, other than parts pooling agreements entered
into in the ordinary course of business; and
(vi) neither
TAM nor any of its Subsidiaries has retained any maintenance obligations with
respect to any TAM Aircraft that has been leased by TAM or any of its
Subsidiaries to a third-party lessee.
(c) Section 2.13(c)(i)
of the TAM Disclosure Schedule sets forth a true and complete list, as of
October 15, 2010, of all aircraft operated pursuant to a capacity purchase or
prorate agreement (collectively, and regardless of whether they are listed in
the TAM Disclosure Schedule, the “TAM
Contract Flight Agreements”), including a description of the operator,
type and number of each such aircraft and any minimum utilization requirements
applicable to such aircraft. Section 2.13(c)(ii) of the TAM
Disclosure Schedule sets forth a true and complete list, as of the date of this
Agreement, containing all TAM Contract Flight Agreements. Except as
identified in writing by TAM to LAN prior to the date of this Agreement, TAM has
delivered or made available to LAN redacted (as to pricing and other
commercially sensitive terms) copies of all TAM Contract Flight Agreements,
including all amendments thereto.
-23-
(d) Except
for any such matters that, individually or in the aggregate, have not had and
would not reasonably be expected to have a TAM Material Adverse Effect, to TAM’s
Knowledge, as of the date of this Agreement there is no ongoing strike, work
stoppage or lockout by or with respect to any employee of any counterparty to a
TAM Contract Flight Agreement.
SECTION
2.14. TAM Slots and Operating
Rights.
Section 2.14 of the TAM Disclosure Schedule sets forth a true, correct and
complete list of all takeoff and landing slots, operating authorizations from
any Governmental Entity and other similar designated takeoff and landing rights
(collectively, “Slots”)
used or held by TAM or any of its Subsidiaries (collectively, the “TAM
Slots”) on the date of this Agreement at any domestic or international
airport and such list indicates any TAM Slots that have been permanently
allocated to another air carrier and in which TAM and its Subsidiaries hold only
temporary use rights. Except for any such matters that, individually or in
the aggregate, have not had and would not reasonably be expected to have a TAM
Material Adverse Effect, (a) each of TAM and its Subsidiaries has complied in
all material respects with the requirements of all of the rules and regulations
issued by any Governmental Entity and all Laws relating to the TAM Slots, (b)
neither TAM nor any of its Subsidiaries has received any notice of any proposed
withdrawal of any TAM Slots by any Governmental Entity, (c)(i) the TAM Slots
have not been designated for the provision of essential air service under the
regulations of the FAA, were not acquired pursuant to 14 C.F.R. Section 93.219
and have not been designated for international operations, as more fully
detailed in 14 C.F.R. Section 93.217 and (ii) to the extent covered by 14 C.F.R.
Section 93.227 or any order, notice or requirement of the FAA or any other
Governmental Entity, TAM and its Subsidiaries have used the TAM Slots (or the
TAM Slots have been used by other operators) either at least 80% of the maximum
amount that each TAM Slot could have been used during each full reporting period
(as described in 14 C.F.R. Section 93.227(i) or any such order, notice or
requirement) or such greater or lesser amount of minimum usage as may have been
required to protect such TAM Slot’s authorization from termination or withdrawal
under regulations or waivers established by any Governmental Entity or airport
authority, (d) all reports required by any Governmental Entity relating to the
TAM Slots have been filed in a timely manner and (e) neither TAM nor any of its
Subsidiaries has agreed to any future TAM Slot slide, TAM Slot trade (except for
seasonal swaps), TAM Slot purchase, TAM Slot sale, TAM Slot exchange, TAM Slot
lease or TAM Slot transfer of any of the TAM Slots that has not been consummated
or otherwise reflected on Section 2.14 of the TAM Disclosure
Schedule.
SECTION
2.15. Major TAM
Airports.
As of the date of this Agreement, no airport authority at International Airport
of São Paulo – Guarulhos, Congonhas Airport – São Paulo or Santos Dumont Airport
(each such airport, a “Major TAM
Airport”) has taken or, to TAM’s Knowledge, threatened to take any action
that would reasonably be expected to materially interfere with the ability of
TAM and its Subsidiaries to conduct their respective operations at any Major TAM
Airport in the same manner as currently conducted in all material
respects.
-24-
SECTION
2.16. Employee
Benefits.
(a) Section 2.16(a) of the TAM Disclosure Schedule sets
forth a list of all employee benefit plans and all profit-sharing plans, stock
purchase, stock option, stock appreciation right, restricted stock, restricted
stock unit, severance, employment, change-in-control, fringe benefit, collective
bargaining, bonus, incentive, deferred compensation, employee loan and all other
employee benefit plans, agreements, programs, policies or other arrangements
maintained for the benefit of any current or former employee, independent
consultant, officer or director of TAM or any of its Subsidiaries (collectively,
“TAM
Employees”) by TAM or its Subsidiaries or by any trade or business,
whether or not incorporated (such plans, “TAM
Benefit Plans”). True and complete copies of all TAM Benefit Plans
listed in Section 2.16(a) of the TAM Disclosure Schedule, including any
trust instruments, insurance contracts, the most recent actuarial report and,
with respect to any employee stock ownership plan, loan agreements forming a
part of any TAM Benefit Plans, and all amendments thereto have been made
available or provided to LAN. All the obligations with respect to the TAM
Benefit Plans granted to TAM Employees have been timely paid, and TAM and its
Subsidiaries are not in default of any material obligations under the TAM
Benefit Plans. All benefits are being administered, in all material
aspects, in accordance with their respective terms, and also comply, in all
material aspects, with the provisions of applicable Law, as well as with
IFRS. There are no pending issues or Actions against TAM and its
Subsidiaries involving these benefits, except for routine indemnity claims in
respect of the benefits up to the date of execution of this
Agreement.
(b) With
respect to each TAM Benefit Plan: (i) no disputes are pending or
threatened and (ii) neither TAM nor any of its Subsidiaries has incurred
any current or projected liability in respect of post-employment or
post-retirement health, medical or life insurance benefits for current, former
or retired TAM Employees.
(c) To
the extent required by applicable Law or IFRS, all contributions required to be
made under each TAM Benefit Plan, as of the date hereof, have been timely made
and all obligations in respect of each TAM Benefit Plan have been properly
accrued and reflected in the TAM Financial Reporting Documents. There has
been no amendment to, announcement by TAM or any of its Subsidiaries relating
to, or change in employee participation or coverage under, any TAM Benefit Plan
which would increase materially the expense of maintaining such plan above the
level of the expense incurred therefor for the most recent fiscal year. No
TAM Benefit Plan exists that, as a result of the execution of this Agreement or
the transactions contemplated by this Agreement (whether alone or in connection
with any subsequent event(s)), could reasonably be expected to (i) entitle
any TAM Employee to severance pay or any increase in severance pay upon any
termination of employment after the date of this Agreement, (ii) accelerate
the time of payment or vesting or result in any payment or funding (through a
grantor trust or otherwise) of compensation, benefits or awards (including TAM
Stock-Based Awards) under, increase the amount payable or result in any other
material obligation pursuant to, any of the TAM Benefit Plans, (iii) limit
or restrict the right of TAM or, after the consummation of the transactions
contemplated hereby, LAN to merge, amend or terminate any of the Benefit Plans
or (iv) cause TAM to record additional compensation expense on its income
statement with respect to any outstanding stock option or other equity-based
award.
-25-
SECTION
2.17. Taxes.
(a) Each of TAM and its Subsidiaries has (i) timely filed all
material Tax Returns required to be filed by any of them (taking into account
applicable extensions) and all such Tax Returns were true, correct and complete
in all material respects when filed, (ii) timely paid or accrued (in
accordance with Brazilian Law) all material Taxes for all Tax periods whether or
not shown to be due on such Tax Returns, and (iii) withheld from its
employees, creditors or other third parties and, to the extent required to be
paid, have timely paid to the appropriate Governmental Entities or set aside in
an account for such purpose proper and accurate amounts in compliance with all
Tax withholding provisions (including income, social security and employment Tax
withholding for all types of compensation).
(b) TAM
has made available to LAN true and correct copies of the Corporate Economic and
Tax Information Statement (DIPJ) and related Tax Returns filed by TAM and its
Subsidiaries for each of the three most recent fiscal years.
(c) There
are no pending, and neither TAM nor any Subsidiary has received written notice
of any, material national, local or foreign Tax audits or examinations of TAM or
its Subsidiaries. No material deficiency for any Taxes has been proposed,
asserted or assessed against TAM or any Subsidiary that has not been resolved
and paid in full.
(d) There
are no outstanding waivers to extend the statutory period of limitations
applicable to the assessment of any material Taxes or material Tax deficiencies
against TAM or any of its Subsidiaries.
(e) Neither
TAM nor any of its Subsidiaries is a party to any agreement providing for the
allocation or sharing of Taxes.
(f) No
rulings (autos de
infração) have been entered into or issued by any Tax authority with
respect to TAM or any of its Affiliates.
(g) There
are no material Liens for Taxes upon the assets, properties or rights of TAM or
any of its Subsidiaries that are not provided for in the TAM Financial Reporting
Documents, except Liens for Taxes not yet due and payable and Liens for Taxes
that are being contested in good faith, which contest, if determined adversely
to TAM, would not individually or in the aggregate have or reasonably be
expected to have a TAM Material Adverse Effect.
(h) Neither
TAM nor any of its Subsidiaries has been a member of an affiliated group filing
a consolidated Corporate Economic and Tax Information Statement (other than a
group in common with LAN), or has any liability for Taxes of any Person (other
than TAM or its Subsidiaries), as a transferee or successor, by contract or
otherwise.
-26-
(i) There
are no pending obligations or any non-compliance by TAM with respect to any tax
installment programs or tax amnesties of TAM or any of its
Subsidiaries.
(j) Section 2.17(j)
of the TAM Disclosure Schedule sets forth a current list of each partnership,
joint venture and limited liability company in which TAM beneficially owns a
material interest.
(k) For
the purposes of this Agreement, the following terms shall have the meanings
assigned below:
(i) “Tax”
means any and all taxes, charges, fees, levies or other assessments, including
income, gross receipts, excise, real or personal property, sales, withholding,
social security, occupation, use, service, service use, value added, license,
net worth, payroll, franchise, transfer and recording taxes, fees and charges,
imposed by the Federal Revenue Office (FRO) or any other taxing authority
(whether domestic or foreign, including any state, local or foreign government
or any subdivision or taxing agency thereof), whether computed on a separate,
consolidated, unitary, combined or any other basis, and such term shall include
any interest, penalties or additional amounts attributable to, or imposed upon,
or with respect to, any such taxes, charges, fees, levies or other
assessments.
(ii) “Tax
Return” means any report, return, document, declaration or other
information or filing (including any attachments or schedules thereto and any
amendments thereof) required to be supplied to any Person, Governmental Entity
or jurisdiction (foreign or domestic) with respect to Taxes.
SECTION
2.18. Intellectual
Property.
(a) Section 2.18(a) of the TAM Disclosure Schedule sets forth a
true and complete list of all Intellectual Property owned by TAM or its
Subsidiaries as of the date of this Agreement that is currently registered with
or subject to a pending application for registration before any Governmental
Entity or internet domain name registrar. All of such Intellectual
Property is owned exclusively by TAM or any of its Subsidiaries free and clear
of any Liens, is subsisting and, to the Knowledge of TAM, is valid and
enforceable, and is not subject to any outstanding order, judgment, decree or
agreement adversely affecting TAM’s or any of its Subsidiaries’ use of, or its
rights to, such Intellectual Property, except in the case of any Liens, failures
to be subsisting, valid and enforceable, or any order, judgment, decree or
agreement that, individually or in the aggregate, have not had and would not
reasonably be expected to have a TAM Material Adverse Effect.
(b) TAM
and its Subsidiaries own or hold exclusive or non-exclusive licenses in or have
sufficient rights to use all Intellectual Property used in their business as
presently conducted, all of which rights shall survive unchanged the
consummation of the transactions contemplated by this Agreement.
-27-
(c) TAM
and its Subsidiaries, as a result of the acquisition by its Subsidiary TAM Milor
Táxi Aéreo, Representações, Marcas e Patentes S.A., exclusively owns all
rights, title and interest in and to the “TAM” name and trademark and all
goodwill associated therewith, free and clear of any Liens, all of which rights
are subsisting and, to the Knowledge of TAM, valid and enforceable, and are not
subject to any outstanding order, judgment, decree or agreement adversely
affecting TAM’s or its Subsidiaries’ use thereof, or its rights
thereto.
(d) TAM
and its Subsidiaries have not granted any licenses or other rights to third
parties to use their Intellectual Property other than non-exclusive licenses
granted in the ordinary course of business pursuant to standard terms which have
been previously provided to LAN. Consummation of the transactions
contemplated by this Agreement will not create any license under or Liens on any
Intellectual Property owned by TAM or its Subsidiaries.
(e) To
the Knowledge of TAM, the conduct of business as currently conducted by TAM and
its Subsidiaries does not infringe, misappropriate or otherwise violate the
Intellectual Property rights of any Person, and since December 31, 2006
there has been no such claim, action or proceeding asserted or, to TAM’s
Knowledge, threatened against TAM or any of its Subsidiaries or any Person
seeking indemnity therefor from TAM or any of its Subsidiaries, in each case
other than any such matters that, individually or in the aggregate, have not had
and would not reasonably be expected to have a TAM Material Adverse
Effect. There is no claim, action or proceeding pending or, to the
Knowledge of TAM, threatened against TAM or any of its Subsidiaries or any
indemnitee thereof concerning the ownership, validity, registerability,
enforceability, infringement, use or licensed right to use any Intellectual
Property rights claimed to be owned by TAM or any of its Subsidiaries or used or
alleged to be used in the business of TAM or any of its Subsidiaries other than
any such claims, actions or proceedings that, individually or in the aggregate,
have not had and would not reasonably be expected to have a TAM Material Adverse
Effect. To the Knowledge of TAM, no Person is infringing, misappropriating
or otherwise violating in any material manner the Intellectual Property rights
owned by TAM or any of its Subsidiaries.
(f) The
IT Assets used by TAM and its Subsidiaries in the operation of their respective
businesses (i) perform sufficiently as required by TAM and its Subsidiaries for
the operation of their respective businesses as currently conducted and
(ii) since December 31, 2008 have not malfunctioned or failed, other
than any such failures to operate and perform or any such malfunctions or
failures that, individually or in the aggregate, have not had and would not
reasonably be expected to have a TAM Material Adverse Effect. Since
December 31, 2006, TAM and its Subsidiaries have maintained backup and
disaster recovery technologies that is reasonable and consistent with industry
practices in all material respects.
-28-
SECTION
2.19. Information
Supplied.
None of the information supplied or to be supplied by or on behalf of TAM or any
of its Subsidiaries specifically for inclusion or incorporation by reference
into (i) the Form F-4 will, at the time the Form F-4 is filed with the SEC
and at the time it becomes effective under the U.S. Securities Act, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading
or (ii) the Schedule TO or the offer to exchange/prospectus included in the
Form F-4 (as amended or supplemented from time to time, the “Offer to
Exchange/Prospectus”) or the Brazilian Exchange Offer Documents will, at
the date on which the Offer to Exchange/Prospectus and the Brazilian Exchange
Offer Documents are first distributed to the holders of Free Float Shares (the
“Distribution
Date”), contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they are
made, not misleading. The Offer to Exchange/Prospectus and the Brazilian
Exchange Offer Documents will, on the Distribution Date, comply as to form in
all material respects with the requirements of applicable Law; provided, however, that the
foregoing representation and warranty shall not apply with respect to any
information supplied by or on behalf of LAN or any of its Subsidiaries which is
contained or incorporated by reference into the Offer to Exchange/Prospectus or
the Brazilian Exchange Offer Documents.
SECTION
2.20. Voting
Requirements.
The Requisite TAM Shareholder Approval is the only vote of the holders of any
class or series of capital stock of TAM necessary to approve the transactions
contemplated by this Agreement and the other Transaction Agreements other than
any additional vote that may be required by the CVM or the Bovespa. The
Requisite Sister Holdco Shareholder Approval is the only vote of the holders of
any class or series of capital stock of Sister Holdco necessary to approve the
Mergers and the other transactions contemplated by this Agreement and the other
Transaction Agreements other than any additional vote that may be required by
the SVS. The Requisite Holdco 2 Shareholder Approval is the only vote
of the holders of any class or series of capital stock of Holdco 2
necessary to approve the Mergers and the other transactions contemplated by this
Agreement and the other Transaction Agreements other than any additional vote
that may be required by SVS.
SECTION
2.21. Affiliate
Transactions.
There are no transactions, Contracts, arrangements, commitments or
understandings between TAM or any of its Subsidiaries, on the one hand, and any
of their Affiliates (other than TAM or any of its Subsidiaries), on the other
hand, that would be required to be disclosed by TAM under Item 404 of Regulation
S-K under the Securities Act.
SECTION
2.22. Brokers and Other
Advisors.
No broker, investment banker, financial advisor or other Person (other than BTG
Pactual) is entitled to any broker’s, finder’s, financial advisor’s or other
similar fee or commission in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of TAM or any of its
Subsidiaries. TAM has shown to LAN complete and accurate copies of all
Contracts under which any such fees or expenses are payable and all
indemnification and other Contracts related to the engagement of the Persons to
whom such fees are payable.
-29-
SECTION
2.23. Fairness
Opinion.
Prior to the execution of this Agreement, the TAM Board received the oral
opinion (which was subsequently confirmed in writing) of BTG Pactual to the
effect that, as of the date thereof and based upon and subject to the matters
and limitations set forth in such written opinion, each of the Holdco 2 Exchange
Ratio and the Sister Holdco Exchange Ratio is fair from a financial point of
view to TAM. Such opinion has not been amended or rescinded as of the date
of this Agreement. TAM shall deliver to LAN a copy of the
written opinion of BTG Pactual for informational purposes only promptly
following receipt thereof.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF LAN
Except as
set forth in the LAN Financial Reporting Documents filed with the SEC or the
SVS, as the case may be, and made publicly available after December 31,
2009 and prior to the date of this Agreement (excluding, in each case, any
disclosures set forth in any risk factor section or in any other section to the
extent that they are forward-looking statements or cautionary, predictive or
forward-looking in nature) or in the corresponding sections or subsections of
the disclosure letter delivered by LAN to TAM not less than 24 hours prior
to entering into this Agreement (the “LAN
Disclosure Schedule”) (it being agreed that (i) the disclosure of any
fact or item in any section or subsection of the LAN Disclosure Schedule whose
relevance to any other section or subsection of this Agreement is reasonably
apparent from the face of such disclosure shall also be deemed to be disclosed
in the section or subsection of the LAN Disclosure Schedule that corresponds to
such other section or subsection of this Agreement and (ii) the exclusion
with respect to the LAN Financial Reporting Documents shall not apply to
Section 3.03, Section 3.06(a) or Section 3.06(b)), LAN hereby
represents and warrants to TAM as follows:
SECTION
3.01. Organization, Standing and
Corporate Power; Subsidiaries.
(a) Each of LAN and its Subsidiaries has been duly organized and is validly
existing and (with respect to jurisdictions that recognize such concept) in good
standing under the Laws of the jurisdiction of its incorporation or
organization, as the case may be, and has all requisite power and authority and
possesses all governmental licenses, permits, authorizations and approvals
necessary to enable it to own, lease or otherwise hold and use its properties,
rights and other assets and to carry on its business and operations as currently
conducted, other than any such failures to have such power, authority,
governmental licenses, permits, authorizations or approvals or any such failures
of Subsidiaries of LAN to be duly organized, validly existing or in good
standing, that, individually or in the aggregate, have not had and would not
reasonably be expected to have a LAN Material Adverse Effect. Each of LAN
and its Subsidiaries is duly qualified or licensed to do business and (with
respect to jurisdictions that recognize such concept) is in good standing in
each jurisdiction in which the nature of its business or operations or its
ownership, leasing, holding or use of its properties, rights or other assets
makes such qualification, licensing or good standing necessary, other than any
such failures to be so qualified, licensed or in good standing that,
individually or in the aggregate, have not had and would not reasonably be
expected to have a LAN Material Adverse Effect. Each of LAN and its
Airline Affiliates is an air carrier duly authorized to act as such by the
Governmental Entity of competent jurisdiction with which it holds its operating
authority.
-30-
(b) Section 3.01(b)
of the LAN Disclosure Schedule lists, as of the date of this Agreement, each of
LAN’s “significant subsidiaries,” as such term is defined in Section 1-02
of Regulation S-X promulgated by the SEC. All of the Equity Securities and
Convertible Securities of each Subsidiary of LAN are owned of record and
beneficially, directly or indirectly, by LAN. All the issued and
outstanding Equity Securities of each Subsidiary of LAN have been validly issued
and are fully paid and nonassessable and are owned of record and beneficially,
directly or indirectly, by LAN free and clear of all Liens and free of any
restriction on the right to vote, sell or otherwise dispose of such Equity
Securities. Except for the Equity Securities of the Subsidiaries of LAN,
LAN does not own, directly or indirectly, any Equity Securities or Convertible
Securities of any Person.
SECTION
3.02. By-laws.
LAN has made available to TAM, prior to the date of this Agreement, a complete
and accurate copy of the by-laws of LAN (the “LAN
By-laws”) in the form attached as Exhibit 6
and the by-laws or comparable organizational documents of each of LAN’s
“significant subsidiaries,” as such term is defined in Section 1-02 of
Regulation S-X promulgated by the SEC (collectively, the “LAN
Subsidiary By-laws”), in each case as amended to the date of this
Agreement. Each of the LAN By-laws and the LAN Subsidiary By-laws is in
full force and effect and no other organizational documents are applicable to,
or binding upon, LAN or any Subsidiary of LAN.
SECTION
3.03. Capitalization.
(a) The authorized capital stock of LAN consists of 341 million
shares of LAN Common Stock. At the close of business on January 18, 2011
(the “LAN
Capitalization Date”):
(i) 338,790,909
shares of LAN Common Stock were issued and outstanding and no shares of LAN
Common Stock were held by LAN in its treasury; and
(ii) 2,209,091
shares of LAN Common Stock were reserved and available for issuance pursuant to
outstanding options to purchase LAN Common Stock (whether vested or unvested,
exercisable or unexercisable) (collectively, the “LAN Stock
Options”).
Section 3.03(a)
of the LAN Disclosure Schedule contains a correct and complete list as of the
date of this Agreement of all of the outstanding LAN Stock Options issued under
a resolution passed by the board of directors of LAN on November 5, 2009 (the
“LAN Stock
Plans”), including the date of grant, vesting terms, term, number of
shares of LAN Common Stock issuable upon exercise and the exercise price per
share of LAN Common Stock.
-31-
(b) Except
as set forth above in Section 3.03(a), at the close of business on the LAN
Capitalization Date, no Equity Securities or Convertible Securities of LAN were
issued, reserved for issuance or outstanding. At the close of business on
the LAN Capitalization Date, (i) no shares of LAN Common Stock were owned
by any Subsidiary of LAN and (ii) there were no outstanding stock options,
stock appreciation rights, “phantom” stock rights, performance units, rights to
receive shares of LAN Common Stock or any other Equity Securities of LAN on a
deferred basis or other rights that are linked to the value of the shares of LAN
Common Stock or any other Equity Securities of LAN (collectively, “LAN
Stock-Based Awards”) other than the LAN Stock Options specified in
Section 3.03(a). All outstanding shares of LAN Common Stock are, and
all shares of LAN Common Stock which may be issued pursuant to the LAN Stock
Options will be, when issued in accordance with the terms thereof, duly
authorized, validly issued, fully paid and nonassessable and not subject to
preemptive rights. There are no bonds, debentures, notes or other
Indebtedness of LAN having the right to vote (or convertible into, or
exercisable or exchangeable for, securities having the right to vote) with the
shareholders of LAN on any matters. Except as set forth above in
Section 3.03(a) and for issuances of shares of LAN Common Stock issuable
pursuant to the LAN Stock Options specified in Section 3.03(a) or as may
otherwise be permitted under the Implementation Agreement, (x) there are
not issued, reserved for issuance or outstanding (A) any Equity Securities
of LAN or any of its Subsidiaries, (B) any Convertible Securities of LAN or
any of its Subsidiaries, (C) any obligations of LAN or any of its
Subsidiaries to issue any Equity Securities or Convertible Securities of LAN or
any of its Subsidiaries or (D) any LAN Stock-Based Awards and
(y) there are not any outstanding obligations of LAN or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any Equity Securities or
Convertible Securities of LAN or any of its Subsidiaries or to issue, deliver or
sell, or cause to be issued, delivered or sold, any such securities, and neither
LAN nor any of its Subsidiaries is a party to any voting Contract with respect
to the voting of any such securities.
(c) Each
LAN Stock Option was properly accounted for on the books and records of LAN and
qualifies for the Tax and accounting treatment afforded thereto in LAN’s Tax
Returns and financial statements, respectively. Each grant of LAN Stock
Options was made in accordance with the terms of the applicable LAN Stock Plan
and any applicable Law and regulatory rules or requirements and has a grant date
identical to the date on which it was actually granted or awarded by LAN’s board
of directors or the compensation committee thereof. The per share exercise
price of each LAN Stock Option was determined in accordance with the applicable
LAN Stock Plan.
-32-
SECTION
3.04. Authority.
LAN has all requisite corporate power and authority to execute, deliver and
perform this Agreement and the other Transaction Agreements to which it is a
party and to consummate the transactions contemplated hereby and thereby; provided, however, that LAN shall not
have the power and authority to consummate the Mergers unless and until the
holders of at least two-thirds of the outstanding shares of LAN Common Stock
vote to approve the Mergers and the other transactions contemplated by this
Agreement at a duly called and held meeting of the shareholders of LAN (such
approval, the “Requisite
LAN Shareholder Approval”). The execution, delivery and performance
of this Agreement and such other Transaction Agreements by LAN and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on the part of LAN other than the
Requisite LAN Shareholder Approval and no other corporate proceedings on the
part of LAN or its shareholders other than the Requisite LAN Shareholder
Approval are necessary to authorize this Agreement and such other Transaction
Agreements or to consummate the transactions contemplated hereby and
thereby. This Agreement and the other Transaction Agreements to which LAN
is a party have been duly executed and delivered by LAN and constitute legal,
valid and binding obligations of LAN, enforceable against LAN in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent transfer, moratorium,
reorganization or similar Law of general applicability relating to or affecting
the rights of creditors and to the availability of equitable remedies
(regardless of whether such enforceability is considered in a proceeding in
equity or at Law). The board of directors of LAN (the “LAN
Board”) has unanimously, by resolutions duly adopted at a meeting duly
called and held, approved this Agreement, the other Transaction Agreements, the
Mergers and the other transactions contemplated by this Agreement and the other
Transaction Agreements subject to receipt of the Requisite LAN Shareholder
Approval, which resolutions have not as of the date of this Agreement been
subsequently rescinded, modified or withdrawn in any way.
SECTION
3.05. No Conflict; Required
Filings and Consents.
(a) The execution and delivery of this Agreement and the other
Transaction Agreements to which LAN is a party by LAN do not, and the
performance of this Agreement and the other Transaction Agreements by LAN and
consummation of the transactions contemplated by this Agreement and the other
Transaction Agreements will not, conflict with, or result in any violation or
breach of, or default (with or without notice, lapse of time or both) under, or
result in any termination or modification of or acceleration under, or any
change in any right, obligation or benefit under, or result in any Lien on any
property or assets of LAN or any of its Subsidiaries pursuant to, (i) the
LAN By-laws or any LAN Subsidiary By-laws, (ii) any Contract to which LAN
or any of its Subsidiaries is a party or by which any of them or any of their
respective properties, rights or other assets is bound or subject or
(iii) assuming the consents, approvals, filings and other matters referred
to in Section 3.05(b) are duly obtained or made, any Law or Order
applicable to LAN, any of its Subsidiaries or their respective properties,
rights or other assets, other than, in the case of clause (ii), any such
conflicts, violations, breaches, defaults, terminations, modifications,
accelerations, changes or Liens that, individually or in the aggregate, would
not reasonably be expected to have a LAN Material Adverse Effect.
-33-
(b) The
execution, delivery and performance of this Agreement and and the other
Transaction Agreements to which LAN is a party by LAN, the consummation of the
transactions contemplated hereby and thereby and the continuing operation of the
businesses of LAN and its Subsidiaries after the Effective Time do not and will
not require any consent, approval, order, authorization or permit of, action by,
filing or registration with or notification to any Governmental Entity other
than (i) any application, filing or submission required to be made and any
consent, approval, authorization or authority required to be made or obtained
under the Brazilian Aeronautical Code, the Chilean Aeronautical Code,
Title 49 of the U.S. Code or under any regulation, rule, order, notice or
policy of ANAC, DGAC, JAC, the FAA, the DOT, the FCC and the DHS, including the
TSA, and any similar Governmental Authority in the E.U., (ii) the filing of the
Schedule TO, the Form F-4 and the other Exchange Offer Documents and the
Schedule 14D-9 with the SEC, the declaration of effectiveness of the Form F-4 by
the SEC, and the filing with the SEC of such reports under, and such other
compliance with, the U.S. Securities Laws in connection with the Exchange Offer
and Mergers, (iii) the filing of the Formulário de Referência of
LAN with the CVM, the Brazilian Exchange Offer Documents with the CVM, the Level
II BDR Program for the LAN BDRs with the CVM and the Bovespa and the filings
with the SVS and the SSE in connection with the Exchange Offer and the Mergers,
(iv) any notices, filings or approvals under the competition, merger control,
antitrust or similar Law listed in Section 3.05(b) of the LAN Disclosure
Schedule, (v) such filings and approvals as are required to be made or obtained
under the securities or “blue sky” laws of various states of the United States
in connection with the Exchange Offer and Mergers, (vi) any consent, approval,
order, authorization, authority, transfer, waiver, disclaimer, registration,
declaration or filing required to be made or obtained from any other
Governmental Entity that regulates any aspect of airline operations or business,
including environmental (e.g., noise, air emissions
and water quality), aircraft, air traffic control and airport communications,
agricultural, export/import, immigration and customs (collectively with the
Governmental Entities referred to in clause (i) above, the “LAN
Airline Regulatory Entities”), (vii) any filings required under the rules
and regulations of the SSE or the NYSE (together with the SSE, the “LAN Stock
Exchanges”) or the Bovespa and (viii) such other consents,
approvals, orders, authorizations, permits, actions, notifications,
registrations, declarations and filings which, if not obtained or made,
individually or in the aggregate, would not reasonably be expected to have a LAN
Material Adverse Effect.
SECTION
3.06. LAN Financial Reporting
Documents; Financial Statements; No Undisclosed Liabilities.
(a) LAN has filed or furnished, as applicable, on a timely basis, all
reports, schedules, forms, statements, certifications and other documents
(including exhibits and other information incorporated therein) with or to, as
applicable, the SVS or the SEC that were required to be so filed or furnished by
LAN since December 31, 2006 (such documents, together with any documents so
filed or furnished during such period by LAN on a voluntary basis, the “LAN
Financial Reporting Documents”). On the date on which it was filed
with or furnished to the SVS or the SEC, as the case may be, each LAN Financial
Reporting Document so filed or furnished prior to the date of this Agreement
complied in all material respects with the applicable requirements of the U.S.
Securities Laws or other applicable securities Laws, and on the date on which it
will be filed with or furnished to the SVS or the SEC, as the case may be, each
LAN Financial Reporting Document so filed or furnished on or after the date of
this Agreement will comply in all material respects with such
requirements. On the date on which it was filed with or furnished to the
SVS or the SEC, as the case may be, no LAN Financial Reporting Document so filed
or furnished prior to the date of this Agreement contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. On the date
on which it will be filed with or furnished to the SVS or the SEC, as the case
may be, no LAN Financial Reporting Document so filed or furnished on or after
the date of this Agreement will contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. Since December 31, 2006, LAN
has complied in all material respects with all applicable requirements of the
U.S. Securities Laws or other applicable securities Law, including the
Sarbanes-Oxley Act, and the rules and regulations thereunder with respect
thereto, and the LAN Stock Exchanges.
-34-
(b) Each
of the consolidated statements of financial position included in or incorporated
by reference into the LAN Financial Reporting Documents fairly presents, or in
the case of LAN Financial Reporting Documents filed with or furnished to the SVS
or the SEC, as the case may be, on or after the date of this Agreement, will
fairly present, in each case in all material respects, the consolidated
financial position of LAN as of its date and each consolidated statement of
income by function, consolidated statement of comprehensive income by function,
statement of changes in net equity and consolidated statement of net cash flows,
included in or incorporated by reference in the LAN Financial Reporting
Documents fairly presents, or in the case of LAN Financial Reporting Documents
filed with or furnished to the SVS or the SEC, as the case may be, on or after
the date of this Agreement, will fairly present, in each case in all material
respects, the results of their operations, comprehensive income by function,
changes in net equity and net cash flows, respectively, for the periods covered
thereby (subject, in the case of unaudited statements, to notes and normal
year-end audit adjustments that will not be material in amount or effect), and
each of the foregoing financial statements was prepared or, in the case of LAN
Financial Reporting Documents filed with or furnished to the SVS or the SEC, as
the case may be, on or after the date of this Agreement other than those
prepared under the generally acceptable accounting principles in Chile and those
reconciled to the generally acceptable accounting principles in the United
States until December 31, 2008, will be prepared, in accordance with IFRS
as issued by the IASB applied on a consistent basis. To LAN’s Knowledge,
there is no applicable accounting rule, consensus or pronouncement that has been
adopted by the SVS or the SEC, as the case may be, the IASB or any similar body
as of, but is not in effect as of, the date of this Agreement that, if
implemented, would reasonably be expected to have a LAN Material Adverse Effect
(it being agreed that for purposes of this Section 3.06(b), effects
resulting from or arising in connection with the matters set forth in
clause (c) of the definition of the term “LAN Material Adverse Effect”
shall not be excluded in determining whether a LAN Material Adverse Effect would
reasonably be expected to occur).
-35-
(c) Each
of LAN and its Subsidiaries has timely filed all submissions, reports,
registrations, schedules, forms, statements and other documents, together with
any amendments required to be made with respect thereto, that they were required
to file since December 31, 2006 with the SVS, any LAN Stock Exchange, any
LAN Airline Regulatory Entity and any other non-U.S. Governmental Entity, and
has paid all fees and assessments due and payable in connection therewith, in
each case, other than any failures to file such reports, registrations,
schedules, forms, statements or other documents, or to pay such fees and
assessments, that individually or in the aggregate, have not had and would not
reasonably be expected to have a LAN Material Adverse Effect.
(d) Neither
LAN nor any of its Subsidiaries has any liability or obligation of any nature
(whether accrued, absolute, contingent or otherwise), other than those
(i) reflected, reserved for or disclosed in the most recent balance sheet
of LAN included in LAN’s Annual Report on Form 20-F for the year ended
December 31, 2009, as filed with the SEC prior to the date of this
Agreement, (ii) incurred in the ordinary course of business consistent with
past practice since December 31, 2009, (iii) incurred pursuant to the
transactions contemplated in this Agreement or the Implementation Agreement, or
(iv) that, individually or in the aggregate, have not had and would not
reasonably be expected to have a LAN Material Adverse Effect. Neither LAN
nor any of its Subsidiaries is a party to, or has any commitment to become a
party to, any joint venture, off-balance sheet partnership or any similar
Contract or arrangement (including any Contract or arrangement relating to any
transaction or relationship between or among LAN and any of its Subsidiaries, on
the one hand, and any unconsolidated Affiliate, including any structured
finance, special purpose or limited purpose entity or Person, on the other hand,
or any “off-balance sheet arrangement” (as defined in Item 303(a) of
Regulation S-K of the SEC)), where the result, purpose or intended effect of
such Contract or arrangement is to avoid disclosure of any material transaction
involving, or material liabilities of, LAN or any of its Subsidiaries in the
financial statements of LAN or any of its Subsidiaries or the LAN Financial
Reporting Documents. None of LAN’s Subsidiaries are, or have at any time
since January 1, 2006 been, subject to the reporting requirements of
Section 13(a) or 15(d) of the U.S. Exchange Act.
-36-
(e) LAN
and its Subsidiaries maintain disclosure controls and procedures required by
Rule 13a-15 or 15d-15 under the U.S. Exchange Act. Such disclosure
controls and procedures are effective to ensure that information required to be
disclosed by LAN is recorded and reported on a timely basis to the individuals
responsible for the preparation of LAN’s filings with the SEC and other public
disclosure documents. LAN and its Subsidiaries maintain internal control
over financial reporting (as defined in Rule 13a-15 or 15d-15, as applicable,
under the U.S. Exchange Act). Such internal control over financial
reporting is effective in providing reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with IFRS and includes policies and
procedures that (i) pertain to the maintenance of records that in
reasonable detail accurately and fairly reflect the transactions and
dispositions of the assets of LAN and its consolidated Subsidiaries, (ii)
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with IFRS, and that
receipts and expenditures of LAN and its consolidated Subsidiaries are being
made only in accordance with authorizations of management and directors of LAN
and its consolidated Subsidiaries, and (iii) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition,
use or disposition of the assets of LAN and its consolidated Subsidiaries that
could have a material effect on its financial statements. LAN has
disclosed, based on its most recent evaluation prior to the date of this
Agreement, to LAN’s auditors and the audit committee of LAN’s board of directors
(A) any significant deficiencies or material weaknesses in the design or
operation of its internal controls over financial reporting that are reasonably
likely to adversely affect LAN’s ability to record, process, summarize and
report financial information and (B) any fraud, whether or not material, that
involves management or other employees who have a significant role in LAN’s
internal control over financial reporting. LAN has made available to TAM
(i) a summary of any such disclosure made by management to LAN’s auditors and
audit committee since January 1, 2006 and (ii) any communication since
January 1, 2006 made by management or LAN’s auditors to the audit committee
required or contemplated by listing standards of the LAN Stock Exchanges, the
audit committee’s charter or professional standards of the IASB or Public
Company Accounting Oversight Board.
(f) Since
December 31, 2006, no material complaints from any source regarding
accounting, internal controls or auditing matters, and no concerns from
employees of LAN or any of its Subsidiaries regarding questionable accounting or
auditing matters, have been received by LAN or any of its Subsidiaries.
LAN has made available to TAM a summary of all material complaints or concerns
relating to other matters made since December 31, 2006 through LAN’s
whistleblower hot-line or equivalent system for receipt of employee concerns
regarding possible violations of Law. No attorney representing LAN or any
of its Subsidiaries, whether or not employed by LAN or any of its Subsidiaries,
has reported evidence of a violation of securities Laws, breach of fiduciary
duty or similar violation by LAN or any of its officers, directors, employees or
agents to LAN’s chief legal officer, the audit committee (or other committee
designated for the purpose) of the board of directors of LAN or the board of
directors of LAN pursuant to the rules adopted pursuant to Section 307 of the
Sarbanes-Oxley Act or any LAN policy contemplating such reporting, including in
instances not required by those rules.
SECTION
3.07. Absence of Certain Changes
or Events.
(i) Since December 31, 2009, there has not been any change in the
business, results of operations, financial condition, assets or liabilities of
LAN and its Subsidiaries, taken as a whole, or any other change, event,
condition, development or occurrence (including any adverse change or
development with respect to any such matters that existed on or prior to
December 31, 2009) that, individually or in the aggregate, has had or would
reasonably be expected to have a LAN Material Adverse Effect and (ii) since
December 31, 2009, (A) each of LAN and its Subsidiaries has conducted
its business in the ordinary course consistent with past practice and
(B) neither LAN nor any of its Subsidiaries has taken any action which, if
taken after the date of this Agreement, would require the consent of TAM under
the Implementation Agreement.
-37-
SECTION
3.08. Litigation.
Except for any such matters that, individually or in the aggregate, have not had
and would not reasonably be expected to have a LAN Material Adverse
Effect: (a) there are no Actions pending or, to the Knowledge of
LAN, threatened against LAN or any of its Subsidiaries, (b) neither LAN nor
any of its Subsidiaries nor any of their respective properties, rights or assets
is subject to, or bound by, any Order, and (c) there are no inquiries or
investigations by any Governmental Entity or any whistle-blower complaints
pending or, to the Knowledge of LAN, threatened against LAN or any of its
Subsidiaries.
SECTION
3.09. Material
Contracts.
(a) As of the date of this Agreement, neither LAN nor any of its
Subsidiaries is a party to or bound by any Contract (i) that is a “material
contract” (as defined in Item 601(b)(10) of Regulation S-K of the SEC) to
be performed after the date of this Agreement that has not been filed as such in
a LAN Financial Reporting Document prior to the date of this Agreement;
(ii) that limits or purports to limit in any material respect any type or
line of business in which LAN or any of its Subsidiaries (including, after
giving effect to the Mergers, TAM or any of its Subsidiaries) may engage or any
manner or locations in which any of them may so engage in any business;
(iii) that is a(n) (A) alliance or other brand alliance agreement, (B) code
sharing agreement, (C) frequent flyer participation agreement, (D) capacity
purchase or similar agreement, (E) cooperation, joint venture, partnership,
profit or revenue sharing agreement, (F) special prorate agreement or (G)
interlining agreement with any air carrier (including all material
amendments to each of the foregoing agreements), in each case that is material
to the business, financial condition, results of operations or prospects of LAN
and its Subsidiaries, taken as a whole; (iv) pursuant to which any Indebtedness
of LAN or any of its Subsidiaries in excess of $50 million is outstanding or may
be incurred that has not been filed in a LAN Financial Reporting Document prior
to the date of this Agreement; (v) that involves or could reasonably be
expected to involve aggregate payments by or to LAN and/or its Subsidiaries in
excess of $30 million in any twelve-month period, except for any Contract that
may be canceled without penalty or termination payments by LAN and/or its
Subsidiaries upon notice of 60 days or less; (vi) any aircraft purchase
agreement, engine purchase agreement or engine maintenance agreement that
involves or is reasonably expected to involve aggregate payments by or to LAN or
any of its Subsidiaries in excess of $30 million in any twelve-month period; or
(vii) pursuant to which it is licensed to use Intellectual Property of a third
party that is material to the operation of its business, or licenses to a third
party rights in the Intellectual Property it owns. Each such Contract
described in clauses (i) through (vii) (whether or not disclosed in the LAN
Disclosure Schedule) is referred to herein as a “LAN
Material Contract.”
-38-
(b) Each
LAN Material Contract is, and after the consummation of the transactions
contemplated by this Agreement and the Implementation Agreement will continue to
be, a valid and binding obligation of LAN and its Subsidiaries (to the extent
they are parties thereto or bound thereby) enforceable against LAN and, to LAN’s
Knowledge, each other party thereto in accordance with its terms and is in full
force and effect, and each of LAN and its Subsidiaries (to the extent they are
party thereto or bound thereby) and, to LAN’s Knowledge, each other party
thereto has performed in all material respects all obligations required to be
performed by it under each LAN Material Contract. Neither LAN nor any of
its Subsidiaries has received notice, nor does it have Knowledge, of any
material violation or default in respect of any material obligation under (or
any condition which with the passage of time or the giving of notice or both
would result in such a violation or default), or any intention to cancel,
terminate, change the scope of rights and obligations under or not to renew, any
LAN Material Contract.
(c) Section 3.09(c)
of the LAN Disclosure Schedule sets forth a true and complete list of all (i)
alliance or brand alliance agreements, (ii) code sharing agreements,
(iii) frequent flyer participation agreements, (iv) capacity purchase
or similar agreements, (v) cooperation, joint venture, partnership, profit
or revenue sharing agreements, (vi) special prorate agreements and
(vii) interlining agreements with any air carrier to which LAN or any of
its Subsidiaries is a party or is otherwise bound.
SECTION
3.10. Licenses; Compliance with
Laws.
(a) Section 3.10(a) of the LAN Disclosure Schedule sets forth a
true and complete list of all of its (i) operating certificates, including
the issuing Governmental Entity, date of issuance and date of expiration, and
(ii) air traffic rights, including the issuing Governmental Entity, date of
issuance and date of expiration, for both scheduled and non-scheduled operations
of each of LAN and its Subsidiaries in effect as of the date of this
Agreement.
(b) Each
of LAN and its Subsidiaries has in effect all Licenses necessary for it to own,
lease or operate its properties, rights and other assets and to carry on its
business and operations as currently conducted (collectively, the “LAN
Licenses”). Each of LAN and its Subsidiaries is, and since
December 31, 2006 has been, in compliance with (i) its obligations
under each LAN License applicable to it and (ii) the rules and regulations of
the Governmental Entity which issued such LAN License, in each case other than
any failures to be in such compliance that, individually or in the aggregate,
have not had and would not reasonably be expected to have a LAN Material Adverse
Effect. There is not pending nor, to LAN’s Knowledge, threatened by or
before any Governmental Entity any material proceeding, notice of violation,
order of forfeiture or complaint or investigation against LAN or any of its
Subsidiaries relating to any LAN License, other than any such proceedings,
notices, orders, complaints or investigations that, individually or in the
aggregate, have not had and would not reasonably be expected to have a LAN
Material Adverse Effect. No action of any Governmental Entity in granting
any LAN License has been reversed, stayed, enjoined, annulled or suspended, and
there is not pending or, to LAN’s Knowledge, threatened, any material
application, petition, objection or other pleading with any Governmental Entity
that challenges or questions the validity of, or any rights of the holder under,
any LAN License, in each case other than any such action, application, petition,
objection or pleading that, individually or in the aggregate, has not had and
would not reasonably be expected to have a LAN Material Adverse Effect.
The consummation of the Exchange Offer and/or Mergers will not cause, and there
is no basis for, any revocation, modification, cancelation or transfer of any
LAN Licenses that, individually or in the aggregate, would reasonably be
expected to have a LAN Material Adverse Effect.
-39-
(c) Except
for those matters that, individually or in the aggregate, have not had and would
not reasonably be expected to have a LAN Material Adverse Effect, (i) each
of LAN and its Subsidiaries is, and since December 31, 2006 has been, in
compliance with all applicable Laws and Orders and all applicable operating
certificates, air carrier obligations, airworthiness directives, aviation
regulations and other rules, regulations, directives, orders and policies of any
LAN Airline Regulatory Entity applicable to it, its properties, rights or other
assets or its businesses or operations and (ii) to LAN’s Knowledge, none of
the officers, directors, or agents (in their capacity as such) of LAN or any of
its Subsidiaries is, or since December 31, 2006 has been, in violation of
any Law applicable to its properties, rights or other assets or its businesses
or operations relating to (A) the use of corporate funds for political
activity or for the purpose of obtaining or retaining business,
(B) payments to government officials from corporate funds, or
(C) bribes, rebates, payoffs, influence payments, kickbacks or the
provision of similar benefits. No investigation or review by any
Governmental Entity with respect to LAN or any of its Subsidiaries is pending
or, to LAN’s Knowledge, threatened, nor has any Governmental Entity indicated an
intention to conduct the same, other than any such investigations or reviews
that, individually or in the aggregate, have not had and would not reasonably be
expected to have a LAN Material Adverse Effect.
(d) Each
of LAN and its Subsidiaries is, and since December 31, 2006 has been, in
compliance in all material respects with all applicable Corrupt Practices
Laws. Since December 31, 2006, (i) neither LAN nor any of its
Subsidiaries has made any voluntary disclosure of any actual or alleged
violation or breach of any Corrupt Practices Law, (ii) no Governmental
Entity has notified LAN or any of its Subsidiaries in writing of any actual or
alleged violation or breach of any Corrupt Practices Law, (iii) to the Knowledge
of LAN, neither LAN nor any of its Subsidiaries has undergone or is undergoing
any audit, review, inspection, investigation, survey or examination of records,
in each case conducted by a Governmental Entity and relating to LAN’s or any of
its Subsidiary’s compliance with any Corrupt Practices Law and there is no basis
for any such audit, review, inspection, investigation, survey or examination of
records, (iv) neither LAN nor any of its Subsidiaries has been or is now under
any administrative, civil or criminal charge or indictment or, to the Knowledge
of LAN, investigation alleging noncompliance with any Corrupt Practices Law nor,
to the Knowledge of LAN, is there any basis for any such charge, indictment or
investigation, and (v) neither LAN nor any of its Subsidiaries has been or is
now a party to any administrative or civil litigation or proceeding alleging
noncompliance with any Corrupt Practices Law nor, to the Knowledge of LAN, is
there any basis for any such Action.
-40-
SECTION
3.11. Environmental
Matters.
Except for those matters that, individually or in the aggregate, have not had
and would not reasonably be expected to have a LAN Material Adverse
Effect: (i) LAN and its Subsidiaries have complied at all times
with all applicable Environmental Laws; (ii) there have been no Releases of
Hazardous Materials and Hazardous Materials are not otherwise present in, on,
under, from or affecting any properties or facilities currently or formerly
owned, leased or operated by LAN, any of its Subsidiaries or any predecessor of
any of them; provided,
however, that LAN may
handle and transport dangerous goods as detailed in, and in accordance with,
IATA’s Dangerous Goods Regulations; (iii) neither LAN nor any of its
Subsidiaries nor, to the Knowledge of LAN, any other Person whose conduct could
result in liability to LAN or any of its Subsidiaries has Released any Hazardous
Materials at any other location; (iv) neither LAN nor any of its
Subsidiaries nor, to the Knowledge of LAN, any predecessor of any of them is
subject to Order of or with any Governmental Entity or any indemnity obligation
or other Contract with any other Person relating to obligations or liabilities
under Environmental Laws or concerning Hazardous Materials; (v) neither LAN
nor any of its Subsidiaries has received any claim, notice or complaint, or is
subject to any proceeding, relating to noncompliance with or liability under
Environmental Laws or to Hazardous Materials, and no such matter has been
threatened to the Knowledge of LAN; (vi) to the best Knowledge of LAN, there are
no other circumstances or conditions involving LAN or any of its Subsidiaries
that could reasonably be expected to result in any claim, liability,
investigation, cost or restriction on the ownership, use, or transfer of any
property pursuant to any Environmental Law; and (vii) LAN has delivered to TAM
copies of all environmental reports, studies, assessments, sampling data,
analyses, memoranda and other environmental information in its possession
relating to LAN or its Subsidiaries or their respective current and former
properties, facilities or operations.
SECTION
3.12. Labor and Employment
Matters.
LAN and its Subsidiaries have complied in all material respects with all
applicable labor, social security and health and safety Law in connection with
all of the employees of LAN and its Subsidiaries. The salaries and other
compensation payable to the senior management and other employees of LAN and all
of its Subsidiaries have been and are currently being paid in accordance with
applicable Laws. As of the date of this Agreement, Section 3.12 of
the LAN Disclosure Schedule sets forth a true and complete list of collective
bargaining or other labor union Contracts applicable to any employees of LAN or
any of its Subsidiaries. Since December 31, 2006, there have been no
strikes, work stoppages or lockouts by or with respect to any employee of LAN or
any of its Subsidiaries, other than any such strikes, work stoppages or lockouts
that, individually or in the aggregate, have not had and would not reasonably be
expected to have a LAN Material Adverse Effect. Neither LAN nor any of its
Subsidiaries has breached or otherwise failed to comply with any provision of
any collective bargaining or other labor union Contract applicable to any
employees of LAN or any of its Subsidiaries, and there are no written grievances
or written complaints outstanding or, to LAN’s Knowledge, threatened against LAN
or any of its Subsidiaries under any such Contract other than any such breaches,
failures to comply, grievances or complaints that, individually or in the
aggregate, have not had and would not reasonably be expected to have a LAN
Material Adverse Effect. LAN has made available to TAM and its
Representatives true and complete copies of all Contracts set forth in
Section 3.12 of the LAN Disclosure Schedule, including all amendments
applicable to such Contracts. There are no illegal labor practice
complaints or other material labor Actions pending against LAN or any of its
Subsidiaries and, to LAN’s Knowledge, no circumstances exist that could be the
legitimate basis of such complaint or Action except for any complaints or
Actions that, individually or in the aggregate, have not had and would not
reasonably be expected to have a LAN Material Adverse Effect.
-41-
SECTION
3.13. Aircraft.
(a) Section 3.13(a)(i) of the LAN Disclosure Schedule sets forth
a true and complete list of (i) all aircraft operated under the operating
certificate of LAN or any of its Subsidiaries and (ii) all aircraft owned or
leased by LAN or any of its Subsidiaries, in each case as of October 15, 2010
(collectively, the “LAN
Aircraft”), including a description of the type and manufacturer serial
number of each such aircraft. Section 3.13(a)(ii) of the LAN
Disclosure Schedule sets forth a true and complete list, as of the date of this
Agreement, containing all Contracts (other than (x) existing aircraft leases or
(y) Contracts that may be terminated or canceled by LAN or any of its
Subsidiaries without incurring any penalty or other material liability except
for the forfeiture of any previously made prepayment or deposit) pursuant to
which LAN or any of its Subsidiaries has a binding obligation to purchase or
lease aircraft (collectively, regardless of whether they are listed in the LAN
Disclosure Schedule, the “LAN
Aircraft Contracts”), including, for each LAN Aircraft Contract, the
manufacturer and model of all aircraft subject thereto, the nature of the
purchase or lease obligation (e.g., firm commitment,
subject to reconfirmation or otherwise) and the anticipated year of delivery of
each aircraft thereunder. Except as identified in writing by LAN to TAM
prior to the date of this Agreement, LAN has delivered or made available to TAM
redacted (as to pricing and other commercially sensitive terms) copies of all
LAN Aircraft Contracts, including all amendments, modifications and supplements
thereto.
(b) Except
for any such matters that, individually or in the aggregate, have not had and
would not reasonably be expected to have a LAN Material Adverse
Effect:
(i) each
LAN Aircraft has a validly issued, current individual aircraft Certificate of
Airworthiness issued by the FAA, DGAC and a comparable certificate from any
other LAN Airline Regulatory Entity, with respect to such LAN Aircraft and all
requirements for the effectiveness of each such certificate of airworthiness
have been satisfied;
(ii) other
than any grounded LAN Aircraft, each LAN Aircraft’s structure, systems and
components are functioning in accordance with their respective intended uses as
set forth in any applicable LAN Airline Regulatory Entity, manufacturer or
otherwise contractually approved maintenance program (or are in the process of
repair or maintenance), including any applicable manuals, technical standard
orders or parts manufacturing approval certificates, and all grounded LAN
Aircraft are being stored in accordance with any applicable LAN Airline
Regulatory Entity, manufacturer or otherwise contractually approved maintenance
program;
(iii) all
deferred maintenance items and temporary repairs with respect to each such LAN
Aircraft have been or will be made materially in accordance with any applicable
LAN Airline Regulatory Entity, manufacturer or otherwise contractually approved
maintenance programs;
-42-
(iv) each
LAN Aircraft is properly registered on the aircraft registry of each applicable
LAN Airline Regulatory Entity;
(v) neither
LAN nor any of its Subsidiaries is a party to any interchange or pooling
agreements with respect to its LAN Aircraft, except for interchange or pooling
agreements among LAN’s Subsidiaries and Florida West International, Inc., other
than parts pooling agreements entered into in the ordinary course of business;
and
(vi) neither
LAN nor any of its Subsidiaries has retained any maintenance obligations with
respect to any LAN Aircraft that has been leased by LAN or any of its
Subsidiaries to a third-party lessee.
(c) Section 3.13(c)(i)
of the LAN Disclosure Schedule sets forth a true and complete list, as of
October 15, 2010, of all aircraft operated pursuant to a capacity purchase or
prorate agreement (collectively, and regardless of whether they are listed in
the LAN Disclosure Schedule, the “LAN
Contract Flight Agreements”), including a description of the operator,
type and number of each such aircraft and any minimum utilization requirements
applicable to such aircraft. Section 3.13(c)(ii) of the LAN
Disclosure Schedule sets forth a true and complete list, as of the date of this
Agreement, containing all LAN Contract Flight Agreements. Except as
identified in writing by LAN to TAM prior to the date of this Agreement, LAN has
delivered or made available to TAM redacted (as to pricing and other
commercially sensitive terms) copies of all LAN Contract Flight Agreements,
including all amendments thereto.
(d) Except
for any such matters that, individually or in the aggregate, have not had and
would not reasonably be expected to have a LAN Material Adverse Effect, to LAN’s
Knowledge, as of the date of this Agreement there is no ongoing strike, work
stoppage or lockout by or with respect to any employee of any counterparty to a
LAN Contract Flight Agreement.
-43-
SECTION
3.14. LAN Slots and Operating
Rights. Section 3.14 of the LAN Disclosure Schedule sets
forth a true, correct and complete list of all Slots used or held by LAN or any
of its Subsidiaries (collectively, the “LAN
Slots”) on the date of this Agreement at any domestic or international
airport and such list indicates any LAN Slots that have been permanently
allocated to another air carrier and in which LAN and its Subsidiaries hold only
temporary use rights. Except for any such matters that, individually
or in the aggregate, have not had and would not reasonably be expected to have a
LAN Material Adverse Effect, (a) each of LAN and its Subsidiaries has complied
in all material respects with the requirements of all of the rules and
regulations issued by any Governmental Entity and all Laws relating to the LAN
Slots, (b) neither LAN nor any of its Subsidiaries has received any notice of
any proposed withdrawal of any LAN Slots by any Governmental Entity, (c)(i) the
LAN Slots have not been designated for the provision of essential air service
under the regulations of the FAA, were not acquired pursuant to 14 C.F.R.
Section 93.219 and have not been designated for international operations, as
more fully detailed in 14 C.F.R. Section 93.217 and (ii) to the extent
covered by 14 C.F.R. Section 93.227 or any order, notice or requirement of the
FAA or any other Governmental Entity, LAN and its Subsidiaries have used the LAN
Slots (or the LAN Slots have been used by other operators) either at least 80%
of the maximum amount that each LAN Slot could have been used during each full
reporting period (as described in 14 C.F.R. Section 93.227(i) or any such order,
notice or requirement) or such greater or lesser amount of minimum usage as may
have been required to protect such LAN Slot’s authorization from termination or
withdrawal under regulations or waivers established by any Governmental Entity
or airport authority, (d) all reports required by any Governmental Entity
relating to the LAN Slots have been filed in a timely manner and (e) neither LAN
nor any of its Subsidiaries has agreed to any future LAN Slot slide, LAN Slot
trade (except for seasonal swaps), LAN Slot purchase, LAN Slot sale, LAN Slot
exchange, LAN Slot lease or LAN Slot transfer of any of the LAN Slots that has
not been consummated or otherwise reflected on Section 3.14 of the LAN
Disclosure Schedule.
SECTION
3.16. Employee Benefits.
(a) Section 3.16(a) of the LAN Disclosure Schedule sets
forth a list of all employee benefit plans and all profit-sharing plans, stock
purchase, stock option, stock appreciation right, restricted stock, restricted
stock unit, severance, employment, change-in-control, fringe benefit, collective
bargaining, bonus, incentive, deferred compensation, employee loan and all other
employee benefit plans, agreements, programs, policies or other arrangements
maintained for the benefit of any current or former employee, independent
consultant, officer or director of LAN or any of its Subsidiaries (collectively,
“LAN
Employees”) by LAN or its Subsidiaries or by any trade or business,
whether or not incorporated (such plans, “LAN
Benefit Plans”). True and complete copies of all LAN Benefit
Plans listed in Section 3.16(a) of the LAN Disclosure Schedule, including
any trust instruments, insurance contracts, the most recent actuarial report
and, with respect to any employee stock ownership plan, loan agreements forming
a part of any LAN Benefit Plans, and all amendments thereto have been made
available or provided to TAM. All the obligations with respect to the
LAN Benefit Plans granted to LAN Employees have been timely paid, and LAN and
its Subsidiaries are not in default of any material obligations under the LAN
Benefit Plans. All benefits are being administered, in all material
respects, in accordance with their respective terms, and also comply, in all
material respects, with the provisions of applicable Law, as well as with
IFRS. There are no pending issues or Actions against LAN and its
Subsidiaries involving these benefits, except for routine indemnity claims in
respect of the benefits up to the date of execution of this
Agreement.
-44-
(b) With
respect to each LAN Benefit Plan: (i) no disputes are
pending or threatened, and (ii) neither LAN nor any of its Subsidiaries has
incurred any current or projected liability in respect of post-employment or
post-retirement health, medical or life insurance benefits for current, former
or retired LAN Employees.
(c) To
the extent required by applicable Law or IFRS, all contributions required to be
made under each LAN Benefit Plan, as of the date hereof, have been timely made
and all obligations in respect of each LAN Benefit Plan have been properly
accrued and reflected in the LAN Financial Reporting Documents. There
has been no amendment to, announcement by LAN or any of its Subsidiaries
relating to, or change in employee participation or coverage under, any LAN
Benefit Plan which would increase materially the expense of maintaining such
plan above the level of the expense incurred therefor for the most recent fiscal
year.
(d) No
LAN Benefit Plan exists that, as a result of the execution of this Agreement or
the transactions contemplated by this Agreement (whether alone or in connection
with any subsequent event(s)), could reasonably be expected to (i) entitle
any LAN Employee to severance pay or any increase in severance pay upon any
termination of employment after the date of this Agreement, (ii) accelerate
the time of payment or vesting or result in any payment or funding (through a
grantor trust or otherwise) of compensation, benefits or awards (including LAN
Stock-Based Awards) under, increase the amount payable or result in any other
material obligation pursuant to, any of the LAN Benefit Plans, (iii) limit
or restrict the right of LAN to merge, amend or terminate any of the LAN Benefit
Plans, or (iv) cause LAN to record additional compensation expense on its
income statement with respect to any outstanding stock option or other
equity-based award.
SECTION
3.17. Taxes. (a) Each
of LAN and its Subsidiaries has (i) timely filed all material Tax Returns
required to be filed by any of them (taking into account applicable extensions)
and all such Tax Returns were true, correct and complete in all material
respects when filed, (ii) timely paid or accrued (in accordance with
Chilean Law) all material Taxes for all Tax periods whether or not shown to be
due on such Tax Returns, and (iii) withheld from its employees, creditors
or other third parties and, to the extent required to be paid, have timely paid
to the appropriate Governmental Entities or set aside in an account for such
purpose proper and accurate amounts in compliance with all Tax withholding
provisions (including income, social security and employment Tax withholding for
all types of compensation).
(b) LAN
has made available to TAM true and correct copies of the Annual Income Tax
Statement (Formulario N° 22) and related Tax Returns filed by LAN and its
Subsidiaries for each of the three most recent fiscal years.
-45-
(c) There
are no pending, and neither LAN nor any Subsidiary has received written notice
of any, material national, local or foreign Tax audits or examinations of LAN or
its Subsidiaries. No material deficiency for any Taxes has been
proposed, asserted or assessed against LAN or any Subsidiary that has not been
resolved and paid in full.
(d) There
are no outstanding waivers to extend the statutory period of limitations
applicable to the assessment of any material Taxes or material Tax deficiencies
against LAN or any of its Subsidiaries.
(e) Neither
LAN nor any of its Subsidiaries is a party to any agreement providing for the
allocation or sharing of Taxes.
(f)
No rulings have been
entered into or issued by any Tax authority with respect to LAN or any of its
Affiliates.
(g) There
are no material Liens for Taxes upon the assets, properties or rights of LAN or
any of its Subsidiaries that are not provided for in the LAN Financial Reporting
Documents, except Liens for Taxes not yet due and payable and Liens for Taxes
that are being contested in good faith, which contest, if determined adversely
to LAN, would not individually or in the aggregate have or reasonably be
expected to have a LAN Material Adverse Effect.
(h) Section 3.17(h)
of the LAN Disclosure Schedule sets forth a current list of each partnership,
joint venture and limited liability company in which LAN beneficially owns a
material interest.
SECTION
3.18. Intellectual
Property. (a) Section 3.18(a) of the LAN
Disclosure Schedule sets forth a true and complete list of all Intellectual
Property owned by LAN or its Subsidiaries as of the date of this Agreement that
is currently registered with or subject to a pending application for
registration before any Governmental Entity or internet domain name
registrar. All of such Intellectual Property is owned exclusively by
LAN or any of its Subsidiaries free and clear of any Liens, is subsisting and,
to the Knowledge of LAN, is valid and enforceable, and is not subject to any
outstanding order, judgment, decree or agreement adversely affecting LAN’s or
any of its Subsidiaries’ use of, or its rights to, such Intellectual Property,
except in the case of any Liens, failures to be subsisting, valid and
enforceable, or any order, judgment, decree or agreement that, individually or
in the aggregate, have not had and would not reasonably be expected to have a
LAN Material Adverse Effect.
(b) LAN
and its Subsidiaries own or hold exclusive or non-exclusive licenses in or have
sufficient rights to use all Intellectual Property used in their business as
presently conducted, all of which rights shall survive unchanged the
consummation of the transactions contemplated by this
Agreement.
-46-
(c) LAN
and its Subsidiaries have not granted any licenses or other rights to third
parties to use their Intellectual Property other than non-exclusive licenses
granted in the ordinary course of business pursuant to standard terms which have
been previously provided to TAM. Consummation of the Transactions
contemplated by this Agreement will not create any license under or Liens on any
Intellectual Property owned by LAN and its Subsidiaries.
(d) To
the Knowledge of LAN, the conduct of business as currently conducted by LAN and
its Subsidiaries does not infringe, misappropriate or otherwise violate the
Intellectual Property rights of any Person, and since December 31, 2006
there has been no such claim, action or proceeding asserted or, to LAN’s
Knowledge, threatened against LAN or any of its Subsidiaries or Person seeking
indemnity, therefor from TAM or any of its Subsidiaries, in each case other than
any such matters that, individually or in the aggregate, have not had and would
not reasonably be expected to have a LAN Material Adverse
Effect. There is no claim, action or proceeding pending or, to the
Knowledge of LAN, threatened against LAN or any of its Subsidiaries or any
indemnitee thereof concerning the ownership, validity, registerability,
enforceability, infringement, use or licensed right to use any Intellectual
Property rights claimed to be owned by LAN or any of its Subsidiaries or used or
alleged to be used in the business of LAN or any of its Subsidiaries other than
any such claims, actions or proceedings that, individually or in the aggregate,
have not had and would not reasonably be expected to have a LAN Material Adverse
Effect. To the Knowledge of LAN, no Person is infringing, misappropriating or
otherwise violating in any material manner the Intellectual Property rights
owned by LAN or any of its Subsidiaries.
(e) The
IT Assets used by LAN and its Subsidiaries in the operations of their respective
businesses (i) perform sufficiently as required by LAN and its Subsidiaries for
the operation of their respective businesses as currently conducted and (ii)
since December 31, 2008 have not malfunctioned or failed, other than any
such failures to operate and perform or any such malfunctions or failures that,
individually or in the aggregate, have not had and would not reasonably be
expected to have a LAN Material Adverse Effect. Since
December 31, 2006, LAN and its Subsidiaries have maintained backup and
disaster recovery technologies that are reasonable and consistent with industry
practices in all material respects.
SECTION
3.19. Information
Supplied. None of the information supplied or to be supplied
by or on behalf of LAN or any of its Subsidiaries specifically for inclusion or
incorporation by reference into (i) the Form F-4 will, at the time the Form
F-4 is filed with the SEC and at the time it becomes effective under the U.S.
Securities Act, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading or (ii) the Schedule TO, the Offer to
Exchange/Prospectus or the Brazilian Exchange Offer Documents will, at the
Distribution Date, contain any untrue statement of a material fact or omit to
state any material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they are made, not
misleading. The Offer to Exchange/Prospectus and the Brazilian
Exchange Offer Documents will, on the Distribution Date, comply as to
form in all material respects with the requirements of applicable Law; provided, however, that the foregoing
representation and warranty shall not apply with respect to any information
supplied by or on behalf of TAM or any of its Subsidiaries or the TAM Direct
Controlling Shareholder or the Amaro Family which is contained or incorporated
by reference into the Offer to Exchange/Prospectus or the Brazilian Exchange
Offer Documents.
-47-
SECTION
3.20. Voting
Requirements. Requisite LAN Shareholder Approval is the only
vote of the holders of any class or series of capital stock of LAN necessary to
approve the Mergers and the other transactions contemplated by this Agreement
and the other Transaction Agreements other than any additional vote that may be
required by the SVS.
SECTION
3.21. Affiliate
Transactions. There are no transactions, Contracts,
arrangements, commitments or understandings between LAN or any of its
Subsidiaries, on the one hand, and any of their Affiliates (other than LAN or
any of its Subsidiaries), on the other hand, that would be required to be
disclosed by LAN under Item 404 of Regulation S-K under the Securities
Act.
SECTION
3.22. Brokers and Other
Advisors. No broker, investment banker, financial advisor or
other Person (other than J.P. Morgan Securities LLC) is entitled to any
broker’s, finder’s, financial advisor’s or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of LAN. LAN has shown to TAM
complete and accurate copies of all Contracts under which any such fees or
expenses are payable and all indemnification and other Contracts related to the
engagement of the Persons to whom such fees are payable.
SECTION
3.23. Fairness
Opinion. Prior to the execution of this Agreement, the LAN
Board received the oral opinion (which was subsequently confirmed in writing) of
J.P. Morgan Securities LLC to the effect that, as of the date thereof and based
upon and subject to the matters and limitations set forth in such written
opinion, each of the Holdco 2 Exchange Ratio and the Sister Holdco Exchange
Ratio is fair from a financial point of view to LAN. Such opinion has
not been amended or rescinded as of the date of this Agreement. LAN
shall deliver to TAM a copy of the written opinion of J.P. Morgan Securities LLC
for informational purposes only promptly following receipt
thereof.
-48-
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF THE CONTROLLING SHAREHOLDERS
Except as
set forth in the disclosure letter delivered by each of (i) the LAN
Controlling Shareholders and (ii) the TAM Direct Controlling Shareholder
and the Amaro Family (in the case of the TAM Direct Controlling Shareholder and
the Amaro Family, the “TAM
Direct Controlling Shareholder Disclosure Schedule,” and in the case of
the LAN Controlling Shareholders, the “LAN
Controlling Shareholders Disclosure Schedule”) (it being agreed that the
disclosure of any fact or item in any section or subsection of the TAM Direct
Controlling Shareholder Disclosure Schedule or the LAN Controlling Shareholders
Disclosure Schedule, as the case may be, whose relevance to any other section or
subsection of this Agreement is reasonably apparent from the face of such
disclosure shall also be deemed to be disclosed in the section or subsection of
the TAM Direct Controlling Shareholder Disclosure Schedule or the LAN
Controlling Shareholders Disclosure Schedule, as the case may be, that
corresponds to such other section or subsection of this
Agreement). The TAM Direct Controlling Shareholder and each of the
members of the Amaro Family hereby represent and warrant to LAN and the LAN
Controlling Shareholders on behalf of each of them and TEP Chile, as applicable,
and each LAN Controlling Shareholder hereby represents and warrants to TAM, the
TAM Direct Controlling Shareholder and the Amaro Family, as
follows:
SECTION
4.01. Organization;
Ownership. In the case of the LAN Controlling Shareholders and
the TAM Direct Controlling Shareholder only, it has been duly organized and is
validly existing and (with respect to jurisdictions that recognize such concept)
in good standing under the Law of the jurisdiction of its incorporation or
organization, and in the case of TEP Chile only, it will be duly organized and
validly existing and (with respect to jurisdictions that recognize such concept)
in good standing under the Law of the jurisdiction of its incorporation or
organization as of the Commencement Date and as of the Leilao
Date. In the case of the TAM Direct Controlling Shareholder only, as
of the date of this Agreement, it is the sole record and beneficial owner of
44,883,754 shares of TAM Ordinary Stock and 24,768,755 shares of TAM Preferred
Stock and it has the sole power to vote and sell such shares, in each case free
and clear of all Liens. In the case of the Amaro Family only, after
the TEP Restructuring and prior to the payment of the TEP Chile Subscription,
they will be the sole record and beneficial owners of 47,652,705 shares of TAM
Ordinary Stock and 25,185,155 shares of TAM Preferred Stock and they will have
the sole power to vote and sell such shares, in each case free and clear of all
Liens, and after the payment of the TEP Chile Subscription, they will be the
sole record and beneficial owners of 100% shares of TEP Chile Stock and they
will have the sole power to vote and sell such shares, in each case free and
clear of all Liens. In the case of TEP Chile, following the payment
of the TEP Chile Subscription and immediately prior to the payment of the Holdco
Subscriptions, it will be the sole record and beneficial owner of 47,652,705
shares of TAM Ordinary Stock and 25,185,155 shares of TAM Preferred Stock and it
will have the sole power to vote and sell such shares, in each case free and
clear of all Liens. In the case of the LAN Controlling Shareholders
only, they and their respective Affiliates collectively are the sole record and
beneficial owners of 115,399,502 shares of LAN Common Stock, and they
collectively have the sole power to vote and sell such shares, in each case free
and clear of all Liens.
-49-
SECTION
4.02. Authority. In
the case of the TAM Direct Controlling Shareholder and the LAN Controlling
Shareholders only, it has or, in the case of TEP Chile, will have all requisite
corporate power and authority to execute, deliver and perform each of the
Transaction Agreements to which it is a party. In the case of the
members of the Amaro Family only, each of them has all requisite power and
authority to execute, deliver and perform each of the Transaction Agreements to
which he or she is a party. In the case of the TAM Direct Controlling
Shareholder, TEP Chile and the LAN Controlling Shareholders only, the
execution, delivery and performance by it of the Transaction Agreements to which
it is a party have been, or, in the case of TEP Chile, will be duly authorized
by all necessary corporate action by it, and no other corporate proceedings by
it or its shareholders are necessary to authorize the execution, delivery,
performance of such agreements. All of the Transaction Agreements to
which it is a party have been or, in the case of TEP Chile, will be duly
executed and delivered by it and do constitute or, in the case of TEP Chile,
will constitute legal, valid and binding obligations of it, enforceable against
it in accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, moratorium, reorganization or similar Law of general applicability
relating to or affecting the rights of creditors and to the availability of
equitable remedies (regardless of whether such enforceability is considered in a
proceeding in equity or at Law).
SECTION
4.03. No Conflict; Required
Filings and Consents. (a) The execution, delivery
and performance by it of the Transaction Agreements to which it is a party do
not and will not conflict with, or result in any violation or breach of, or
default (with or without notice or lapse of time, or both) under, or result in
any termination or modification of or acceleration under, or any change in any
right, obligation or benefit under, or result in any Lien on the property or
assets of it or any of its Subsidiaries or on any property or assets of TAM, LAN
or any of their respective Subsidiaries pursuant to, (i) in the case of the
TAM Direct Controlling Shareholder, TEP Chile and the LAN Controlling
Shareholders only, its by-laws, (ii) any Contract to which it is a party or
by which it or any of its properties, rights or other assets is bound or subject
or (iii) assuming the consents, approvals, filings and other matters
referred to in Sections 2.05(b) and 3.05(b) are duly obtained or made, any
Law or Order applicable to it or any of its properties, rights or other assets,
other than, in the case of clause (ii), any such conflicts, violations,
breaches, defaults, terminations, modifications, accelerations, changes or Liens
that, individually or in the aggregate, would not reasonably be expected to have
a material adverse effect on its ability to perform its obligations under any of
such agreements.
(b) The
execution, delivery and performance by it of the Transaction Agreements to which
it is a party do not and will not require any consent, approval, order,
authorization or permit of, action by, filing or registration with or
notification to, any Governmental Entity other than those described in Section
2.05(b) and Section 3.05(b).
SECTION
4.04. No Successor
Liability. In the case of the TAM Direct Controlling
Shareholder, TEP Chile and the Amaro Family only, Holdco 1 will not acquire
as a result of the distribution by the TAM Direct Controlling Shareholder of the
TEP Shares to the Amaro Family or the contribution by the Amaro Family of TEP
Shares to TEP Chile and the contribution by TEP Chile of the TEP Shares to
Holdco 1 any debt, liability or obligation of any nature of any of the TAM
Direct Controlling Shareholder, the Amaro Family or TEP Chile, whether known or
unknown, asserted or unasserted, determined or determinable, whether accrued,
absolute, contingent or otherwise, and whether due or to become
due.
-50-
SECTION
4.05. Litigation. There
are no Actions pending or, to its Knowledge, threatened against it that would
reasonably be expected to prevent it from performing its obligations under the
Transaction Agreements to which it is a party.
ARTICLE
V
ADDITIONAL
AGREEMENTS
SECTION
5.01. Access to Information;
Confidentiality. (a) To the extent permitted by
applicable Law, each of LAN and TAM (each, a “Parent”)
shall afford to the other Parent and its officers, employees, accountants,
counsel, financial advisors and other advisors reasonable access (including for
the purpose of planning for post-merger integration activities and transition
planning) during normal business hours and upon reasonable prior notice to such
Parent until the earlier of the consummation of the Exchange Offer and the
termination of this Agreement pursuant to Section 8.01 to all of the
properties, books, Contracts, commitments, Key Personnel and records of such
Parent as the other Parent may from time to time reasonably request, but only to
the extent that such access does not unreasonably interfere with the business or
operations of such Parent or any of its Subsidiaries, and, during such period,
such Parent shall furnish promptly to the other Parent all information
concerning the business, properties and Key Personnel of such Parent as the
other Parent may reasonably request; provided, however, that no access or
information pursuant to this Section 5.01 shall affect or be deemed to
modify any representation or warranty made or deemed made by such Parent in this
Agreement; and, provided, further, that no Parent
shall be required to (or to cause any of its Subsidiaries to) so confer, afford
such access or furnish such copies or other information to the extent that doing
so would violate applicable Law or any Contract or obligation of confidentiality
owing to a third-party or result in the loss of attorney-client privilege if, in
the case of any such Contract or confidentiality obligation, such Parent shall
have used its reasonable best efforts to have obtained the consent of such
third-party to such access, copies or information. If any of the
information or material furnished pursuant to this Section 5.01 includes
materials or information subject to the attorney-client privilege, work product
doctrine or any other applicable privilege concerning pending or threatened
Actions, each Parent understands and agrees that the parties to this Agreement
have a commonality of interest with respect to such matters and it is the
desire, intention and mutual understanding of the parties that the sharing of
such material or information is not intended to, and shall not, waive or
diminish in any way the confidentiality of such material or information or its
continued protection under the attorney-client privilege, work product doctrine
or other applicable privilege. All such information provided by a
Parent that is entitled to protection under the attorney-client privilege, work
product doctrine or other applicable privilege shall remain entitled to such
protection under these privileges, this Agreement, and under the joint defense
doctrine. If, notwithstanding the foregoing, disclosure of certain
information would result in the loss of attorney-client privilege or violate
applicable Law or any Contract or obligation of confidentiality owing to a
third-party, the Parents will use commercially reasonable efforts to make
appropriate substitute disclosure arrangements.
-51-
(b) Each
party agrees to, and shall cause its Subsidiaries and their respective
directors, officers, employees, Affiliates (including the individuals who
ultimately beneficially own such party), financial advisors, attorneys,
accountants and other advisors or representatives (as to each party, its “Representatives”)
to, treat and hold as confidential (and not disclose or provide access to any
Person) any and all confidential or proprietary information, knowledge and data
relating to any Disclosing Party or any of its Affiliates or their business and
affairs (collectively, “Confidential
Information”) by using the same degree of care, but no less than a
reasonable standard of care, to prevent the unauthorized use, dissemination or
disclosure of Confidential Information as it and its Affiliates use with respect
to their own Confidential Information, unless the Disclosing Party provides its
prior written consent to such use or disclosure and except as otherwise
permitted in this Section 5.01(b). The parties hereby
acknowledge and agree that the information provided or made available to any
party pursuant to Sections 2.22, 3.22 and 5.01(a) shall be deemed to be
“Confidential Information” for purposes of this
Section 5.01(b). Notwithstanding the foregoing, in the event
that a Receiving Party or any of its Representatives becomes legally compelled
by Order or is required by Law to disclose any Confidential Information,
disclosure in compliance with this Section 5.01(b) shall be permitted and,
to the extent reasonably practicable and permitted by applicable Law, the
Receiving Party agrees to, and shall cause its Representatives to, (i) provide
the Disclosing Party with reasonable written notice of such requirement so that
the Disclosing Party may seek a protective order or other remedy, (ii) in the
event that such protective order or other remedy is not obtained, furnish only
that portion of such Confidential Information which is legally required to be
provided and exercise its reasonable best efforts to obtain assurances that
confidential treatment will be afforded to such Confidential Information and
(iii) use commercially reasonable efforts to promptly furnish to the Disclosing
Party a copy (in whatever form or medium) of such Confidential Information that
it intends to furnish or has furnished; provided, however, that the foregoing
shall not apply to any information (A) that at the time of disclosure, is
available publicly or becomes publicly available through no act or omission of
the party owing a duty of confidentiality, or becomes available on a
non-confidential basis from a source other than the party owing a duty of
confidentiality, so long as such source is not known by such party to be bound
by a confidentiality agreement with or other obligations of secrecy to the other
party, (B) that is developed independently by the Receiving Party without
the use of Confidential Information or (C) that is disclosed to any
Representatives of the Receiving Party to whom such disclosure is necessary or
desirable in the conduct of the business of the Receiving Party if such Persons
are informed by the Receiving Party of the confidential nature of such
Confidential Information and are directed by the Receiving Party to comply with
the provisions of this Section 5.01(b) (it being agreed that a Receiving Party
shall be responsible for any breach of this Section 5.01(b) by its
Representatives). Each party agrees and acknowledges that remedies at
Law for any breach of their obligations under this Section 5.01(b) are
inadequate and that in addition thereto the Disclosing Party shall be entitled
to seek equitable relief, including injunction and specific performance, in the
event of any such breach. For purposes of this Section
5.01(b), the term “Receiving
Party” means the party to whom Confidential Information is furnished,
disclosed or shown or otherwise made available by or on behalf of another party
hereto, which disclosing party is referred to as the “Disclosing
Party.”
-52-
SECTION
5.02. Further Action;
Efforts. (a) Subject to the terms and conditions of this
Agreement and the Implementation Agreement, each party shall use its reasonable
best efforts to take, or cause to be taken, all actions and to use its
reasonable best efforts to do, or cause to be done, and assist and cooperate
with the other parties in doing, all things reasonably necessary, proper or
advisable under this Agreement, the Implementation Agreement and applicable Law
to satisfy the conditions to the commencement of the Exchange Offer and the
conditions to the consummation of the Exchange Offer, and to consummate as soon
as reasonably practicable the Exchange Offer, the Mergers and the other
transactions contemplated by this Agreement and the Implementation Agreement in
accordance with the terms hereof and thereof. Without limitation of
the foregoing, promptly after the execution and delivery of this Agreement LAN
and the TAM Direct Controlling Shareholder and/or the Amaro Family shall meet
jointly with CVM to discuss the contents of the Edital and shall use their
commercially reasonable effort to obtain CVM’s consent to the inclusion of the
Exchange Offer Conditions therein. Without limitation of the
foregoing, whenever this Agreement or the Implementation Agreement requires the
TAM Direct Controlling Shareholder or the Amaro Family, as applicable, TEP Chile
or the LAN Controlling Shareholders to take any action, such requirement shall
be deemed to include an undertaking on the part of the individuals who
ultimately beneficially own the TAM Direct Controlling Shareholder, TEP Chile or
the LAN Controlling Shareholders, as the case may be, to cause them to take such
action.
(b) In
connection with and without limiting the foregoing, each party shall provide, or
cause to be provided, all necessary notices, applications, requests and
information to, and enter into discussions with, each Governmental Entity or
third-party from whom any consent, approval, authorization or other action or
non-action is required to be obtained in order to commence the Exchange Offer or
consummate the Exchange Offer, the Mergers or the other transactions
contemplated by this Agreement or the Implementation Agreement or in connection
therewith (collectively, the “Consents”),
use its commercially reasonable efforts to obtain all such Consents and to
eliminate each and every other impediment that may be asserted by any
Governmental Entity or other Person with respect to the Exchange Offer and the
Mergers, in each case so as to enable the Exchange Offer and the Mergers to
occur as soon as reasonably practicable. Each party shall use
reasonable efforts to obtain the consent of any third party to a Contract that
would otherwise be breached by any covenant, representation or warranty or any
other obligation of this Agreement.
-53-
(c) In
connection with and without limiting the generality of the foregoing, each party
shall (i) make or cause to be made, in consultation and cooperation with the
other parties and as promptly as practicable after receipt of ANAC Approval, all
necessary and appropriate registrations, declarations, notices and filings
relating to the Exchange Offer, the Mergers and the other transactions
contemplated by this Agreement and the Implementation Agreement with the
relevant Governmental Entities under all applicable Antitrust Laws; (ii) use its
reasonable best efforts to furnish to the other parties all assistance,
cooperation and information required for any such registration, declaration,
notice or filing and in order to achieve the effects set forth in Section
5.02(b); (iii) give the other parties reasonable prior notice of any such
registration, declaration, notice or filing and, to the extent reasonably
practicable, of any communication with any Governmental Entity regarding the
Exchange Offer, the Mergers or the other transactions contemplated hereby or by
the Implementation Agreement (including with respect to any of the actions
referred to in Section 5.02(b)), and permit the other parties to review and
discuss in advance, and consider in good faith the views of, and secure the
participation of, the other parties in connection with, any such registration,
declaration, notice, filing or communication; (iv) respond as promptly as
practicable under the circumstances to any inquiries received from any
Governmental Entity regarding the Exchange Offer, the Mergers or the other
transactions contemplated hereby or by the Implementation Agreement; (v) unless
prohibited by applicable Law or by the applicable Governmental Entity, (A) to
the extent reasonably practicable, not participate in or attend any meeting, or
engage in any substantive conversation with any Governmental Entity regarding
the Exchange Offer, the Mergers or the other transactions contemplated hereby or
by the Implementation Agreement (including with respect to any of the actions
referred to in Section 5.02(b)) without the other parties, (B) to the
extent reasonably practicable, give the other parties reasonable prior notice of
any such meeting or conversation, (C) in the event one party is prohibited by
applicable Law or by the applicable Governmental Entity from participating or
attending any such meeting or engaging in any such conversation, keep the other
parties reasonably apprised with respect thereto, (D) cooperate in the filing of
any substantive memoranda, white papers, filings, correspondence or other
written communications explaining or defending this Agreement, the
Implementation Agreement, the Exchange Offer, the Mergers or the other
transactions contemplated hereby and thereby, articulating any regulatory or
competitive argument, and/or responding to requests or objections made by any
Governmental Entity, and (E) furnish the other parties with copies of all
correspondence, filings and communications (and memoranda setting forth the
substance thereof) between it and its Representatives, on the one hand, and any
Governmental Entity or members of any Governmental Entity’s staff, on the other
hand, with respect to this Agreement, the Implementation Agreement, the Exchange
Offer, the Mergers or the other transactions contemplated hereby and
thereby.
(d) In
the event that any Action is instituted (or threatened to be instituted) by a
Governmental Entity or private party challenging any transaction contemplated by
this Agreement or the Implementation Agreement, each party shall
(i) cooperate in all respects with the other parties and use its respective
reasonable best efforts to contest and resist any such Action and to have
vacated, lifted, reversed or overturned any decree, judgment, injunction or
other Order, whether temporary, preliminary or permanent, that is in effect and
that prohibits, prevents or restricts consummation of the transactions
contemplated by this Agreement and/or so as to permit such consummation by the
fifth business day before the Outside Date, and (ii) at its cost and
expense, defend any such Actions against it or its Affiliates in connection with
the transactions contemplated by this Agreement and the Implementation
Agreement.
-54-
(e) Notwithstanding
anything in this Section 5.02 to the contrary, nothing in this Section 5.02 or
otherwise in this Agreement or the Implementation Agreement shall require, or be
construed to require, either Parent or any of its Affiliates to (i) (A) sell,
lease, license, transfer, dispose of, divest or otherwise encumber, or to hold
separate pending any such action or (B) proffer, propose, negotiate, offer to
effect or consent, commit or agree to any sale, divestiture, lease, licensing,
transfer, disposal, divestment or other encumbrance of, or to hold separate, in
each case before or after the Effective Time, any assets, licenses, operations,
rights, product lines, businesses or interest of either Parent or any of its
Affiliates or (ii) take or agree to take any other action, or agree or consent
to any limitations or restrictions on freedom of actions with respect to, or its
ability to own, retain or make changes in, any assets, licenses, operations,
rights, product lines, businesses or interests of either Parent or any of its
Affiliates or LAN’s ability to receive and exercise full voting, economic and
ownership rights with respect to its interests in Holdco 1, TAM and its
Subsidiaries, subject only to the rights of TEP Chile in respect of its shares
of Holdco 1 Voting Stock and under the LATAM/TEP Shareholders Agreement, the
Holdco 1 Shareholders Agreement and the TAM Shareholders
Agreement.
SECTION
5.03. Advice of
Changes. Each of the parties hereto shall each promptly advise
the other parties orally and in writing if (i) any representation or
warranty made by it contained in this Agreement becomes untrue or inaccurate in
a manner that would or would be reasonably expected to result in the failure of
the condition set forth in Section 6.02(a) or Section 6.03(a),
(ii) it fails to comply with or satisfy in any material respect any
covenant, condition or agreement to be complied with or satisfied by it under
this Agreement or the Implementation Agreement, (iii) any of the conditions set
forth in (a) Section 7.02 other than the Delisting Condition (in the case of LAN
and the Amaro Family), (b) Schedule 1.12 of the Implementation Agreement (in the
case of LAN only), or (c) Section 7.03 other than the Minimum Tender Condition
(in the case of the Amaro Family only) fails or ceases to be satisfied or (iv)
an Appraisal Event occurs; provided, however, that no such
notification shall affect the representations, warranties, covenants or
agreements of the parties (or remedies with respect thereto) or the conditions
to the obligations of the parties under this Agreement. This
Section 5.03 shall not constitute a covenant or agreement for purposes of
Section 6.02(b) or 6.03(b).
-55-
SECTION
5.04. Covenants of the Controlling
Shareholders.
(a) Agreements to
Vote. Except as otherwise provided in this Agreement, each of
the LAN Controlling Shareholders agrees that it will, and the Amaro Family
agrees that it will cause TEP Chile to, from and after the date of this
Agreement and until the earlier of the Effective Time and the termination of
this Agreement pursuant to Section 8.01, attend each meeting of the shareholders
of its Relevant Parent Entity in person or by proxy and vote or cause to be
voted all shares of capital stock of its Relevant Parent Entity beneficially
owned by it on the record date for such meeting (i) in the case of the LAN
Controlling Shareholders only, in favor of the approval of the Mergers, the Name
Change and the other transactions contemplated by the Implementation Agreement,
(ii) against any action, agreement or transaction submitted for approval of the
shareholders of its Relevant Parent Entity that would reasonably be expected to
result in a breach of any covenant, representation or warranty or any other
obligation or agreement of its Relevant Parent Entity, and (iii) against any
Alternative Proposal relating to its Relevant Parent Entity. The term
“Relevant
Parent Entity” means (i) with respect to TAM, the Amaro Family, TEP Chile
and the TAM Direct Controlling Shareholder, TAM, and (ii) with respect to LAN
and the LAN Controlling Shareholders, LAN. The Amaro Family agrees
that they will cause TEP Chile to attend the Sister Holdco Shareholders Meeting
in person or by proxy and to vote the shares of Sister Holdco Stock they
beneficially own in favor of the approval of the Sister Holdco Merger Matters.
The Amaro Family agrees that they will cause TEP Chile to cause Holdco 1 to
attend the Holdco 2 Shareholders Meeting in person or by proxy and to vote the
shares of Holdco 2 Stock they beneficially own in favor of the approval of the
Holdco 2 Merger Matters.
-56-
(b) Condition Notices;
Subscription Payments; Leilão. The last time at which the
holders of shares of TAM Stock shall be able to withdraw their acceptance to
tender their shares of TAM Stock into the Exchange Offer will be 12:00 p.m., São
Paulo, Brazil time (the “Withdrawal
Deadline”), on the date on which the Leilão will occur as specified
in the Edital, as such date may be changed from time to time in accordance with
Brazilian Law (the “Leilão
Date”). Prior to 2:00 p.m., São Paulo, Brazil time, on
the Leilão Date, each of LAN and the Amaro Family shall cause one of its
representatives who is authorized on its behalf to waive the conditions set
forth in Section 7.02 (in the case of both LAN and the Amaro Family), Section
7.03 (in the case of LAN only) or Schedule 1.12 of the Implementation Agreement
(in the case of the Amaro Family) to be present at the offices of the Bovespa
for purposes of informing the Bovespa as to whether the mutual conditions to the
consummation of the Exchange Offer set forth in Section 7.02 (in the case of
both LAN and the Amaro Family), Section 7.03 (in the case of LAN only) and
Schedule 1.12 of the Implementation Agreement (in the case of the Amaro Family)
have been satisfied or waived in accordance with this Agreement. At
2:00 p.m., São Paulo, Brazil time, on the Leilão Date, the Bovespa shall inform
LAN, Holdco 2 and the Amaro Family whether or not the Minimum Conditions have
been satisfied (the “Minimum
Condition Notice”). Promptly after receiving the Minimum
Condition Notice but in no event later than 2:10 p.m., São Paulo, Brazil time,
on the Leilão Date LAN shall deliver to the Amaro Family a written notice
stating whether or not all of the conditions to the consummation of the Exchange
Offer (other than the conditions in Section 7.03(h)) have been satisfied or
irrevocably waived by LAN (the “LAN Condition
Notice”). If the LAN Condition Notice states that all such
conditions have been so satisfied or waived, then promptly after they receive
the LAN Condition Notice but in no event later than 2:20 p.m., São Paulo, Brazil
time, on the Leilão Date the Amaro Family shall deliver to LAN a written notice
stating whether or not all of the conditions to the consummation of the Exchange
Offer set forth in Section 7.02 and all of the conditions set forth in Schedule
1.12 to the Implementation Agreement have been satisfied or irrevocably waived
by them (the “TEP Condition
Notice”). If the TEP Condition Notice states that all such
conditions have been so satisfied or waived, then (i) promptly after they have
delivered the TEP Condition Notice to LAN but in no event later than 2:30 p.m.,
São Paulo, Brazil time, on the Leilão Date (A) the Amaro Family shall
subscribe for 72.837.860 shares of TEP Chile Stock in exchange for all of the
TEP Shares (the “TEP Chile
Subscription” and, collectively with the Holdco Subscriptions, the “Subscriptions”),
such Subscriptions to be made in such proportions so that immediately after the
TEP Chile Subscription is paid the percentage equity ownership of each member of
the Amaro Family in TEP Chile shall be the same as the percentage equity
ownership that such member has in the TAM Direct Controlling Shareholder as of
the date hereof and pay the TEP Chile Subscription by delivering the TEP Shares
to TEP Chile, and (B) TEP Chile shall pay the Holdco Subscriptions by
delivering all of the Ordinary TEP Shares to Holdco 1 and the 62 Holdco 1
Ordinary Shares, all of the TEP Holdco 1 Non-Voting Shares and all of the
Preferred TEP Shares to Sister Holdco and (ii) promptly after all such payments
have been made but in no event later than 2:40 p.m., São Paulo, Brazil time, on
the Leilão Date, LAN and the Amaro Family shall issue a press release announcing
that all of the conditions to the Exchange Offer have been satisfied or
irrevocably waived. The LAN Condition Notice shall be conclusive and binding
upon LAN for all purposes of this Agreement and the TEP Condition Notice shall
be conclusive and binding upon the Amaro Family for all purposes of this
Agreement and the TEP Chile Subscription. If (x) each of the LAN
Condition Notice and the TEP Condition Notice states that all of the conditions
it is required to address have been satisfied or irrevocably waived and (y) the
TEP Chile Subscription and all of the payments required pursuant to the
Subscriptions have been made in full when required by this Section 5.04(b), then
the Leilão shall commence at 3:00 p.m., São Paulo, Brazil time (or such other
time as the Bovespa may determine), on the Leilão Date, and Holdco 2 will
consummate the Exchange Offer on the Leilão Date in accordance with the terms
and conditions of the Exchange Offer. For all purposes of this
Agreement, the consummation of the Exchange Offer shall be deemed to be the
purchases of TAM Stock pursuant to the Leilão. Notwithstanding the
foregoing, if the Leilão commences at any time other than 3:00 p.m., São Paulo,
Brazil time, on the Leilão Date, then each of the times specified above in this
Section 5.04(b) (except for the Withdrawal Deadline) shall be adjusted by the
same amount that the actual time of the commencement of the Leilão differs from
3:00 p.m., São Paulo, Brazil time. If (x) either the LAN Condition
Notice or the TEP Condition Notice does not state that all of the conditions it
is required to address have been satisfied or irrevocably waived or (y) the TEP
Chile Subscription or any of the payments required pursuant to the Subscriptions
are not made in full when required by this Section 5.04(b), the Leilão shall not
occur and the Exchange Offer shall expire without the purchase of any shares of
TAM Stock.
-57-
(c) Restrictions on
Transfers. Except as otherwise expressly provided in this
Agreement, from and after the date of this Agreement and until the earlier of
the Effective Time and the termination of this Agreement pursuant to Section
8.01, none of LAN Controlling Shareholders, the TAM Direct Controlling
Shareholder, the Amaro Family or TEP Chile shall Transfer or permit the Transfer
of any shares of the capital stock of its Relevant Parent Entity, the TAM Direct
Controlling Shareholder, TEP Chile, Holdco 1, Holdco 2 or Sister Holdco that it
beneficially owns or enter into any Contract, arrangement or understanding with
respect to any such Transfer (whether by actual disposition or effective
economic disposition due to hedging, cash settlement or otherwise); provided however, that the LAN
Controlling Shareholders, the TAM Direct Controlling Shareholder, the Amaro
Family and TEP Chile may Transfer all or any portion of their shares of capital
stock of its Relevant Parent Entity to (i) any of their direct or indirect
wholly owned Subsidiaries, (ii) any Person wholly-owned by Enrique, Juan José
and/or Ignacio Cueto (in the case of the LAN Controlling Shareholders) or (iii)
any Person that has no direct or indirect owners other than Maria Cláudia
Oliveira Amaro, Maurício Rolim Amaro, Noemy Almeida Oliveira Amaro and/or João
Francisco Amaro and that is directly or indirectly majority owned and controlled
by Maria Cláudia Oliveira Amaro and Maurício Rolim Amaro (in the case of the
Amaro Family, the TAM Direct Controlling Shareholder or TEP Chile) and that each
of the LAN Controlling Shareholders, the TAM Direct Controlling Shareholder, TEP
Chile and the Amaro Family may Transfer a percentage of any shares of the
capital stock of its Relevant Parent Entity, TEP Chile, Holdco 1, Holdco 2 or
Sister Holdco that it beneficially owns to each of Enrique, Juan José and
Ignacio Cueto (in the case of the LAN Controlling Shareholders) or Maria Cláudia
Oliveira Amaro, Maurício Rolim Amaro, Noemy Almeida Oliveira Amaro and João
Francisco Amaro (in the case of the TAM Direct Controlling Shareholder and TEP
Chile) or to any Person wholly owned by any such individual equal to the
percentage of such capital stock that such individual indirectly owns through
his or her ownership of shares in the LAN Controlling Shareholders (in the case
of Enrique, Juan José and Ignacio Cueto) or the TAM Direct Controlling
Shareholder or TEP Chile (in the case of Maria Cláudia Oliveira Amaro, Maurício
Rolim Amaro, Noemy Almeida Oliveira Amaro and João Francisco Amaro); provided further that the LAN
Controlling Shareholders, the TAM Direct Controlling Shareholder and the Amaro
Family shall continue to be bound by the terms of this Agreement for all
purposes following any such Transfer and any transferee of shares Transferred
pursuant to this Section 5.04(c) shall agree to be bound by all the terms and
conditions of this Section 5.04 by executing and delivering to the parties
hereto a joinder agreement so providing in form and substance reasonably
acceptable to such parties.
(d) No Inconsistent
Agreements. Each of the LAN Controlling Shareholders hereby
covenants and agrees that, and each of the TAM Direct Controlling Shareholder
and the members of the Amaro Family hereby covenants and agrees on its or their
behalf and on behalf of TEP Chile that, except for actions contemplated by this
Section 5.04 taken in furtherance of this Agreement, it (i) has not entered
into, and shall not enter into at any time while this Agreement remains in
effect, any voting agreement, voting trust or any other agreement, arrangement
or obligations (whether or not legally binding) with respect to any of the
shares of capital stock of its Relevant Parent Entity, the TAM Direct
Controlling Shareholder, TEP Chile, Holdco 1, Holdco 2 or Sister Holdco that it
beneficially owns and (ii) has not granted, and shall not grant at any time
while this Agreement remains in effect, a proxy, a consent or power of attorney
with respect to any such shares.
-58-
(e) Further
Assurances. Each of the LAN Controlling Shareholders, the TAM
Direct Controlling Shareholder and the Amaro Family (i) shall use reasonable
best efforts to take or cause to be taken all actions, and do or cause to be
done all things, reasonably necessary, proper or advisable on their part under
this Agreement and applicable Law to consummate the transactions contemplated by
this Agreement and the other Transaction Agreements as promptly as reasonably
practicable and (ii) shall not, and they shall cause their respective
Representatives not to, take any action that could be reasonably expected to
materially impede or interfere with, delay, postpone or materially and adversely
affect the consummation of the transactions contemplated by this Agreement and
the other Transaction Agreements.
ARTICLE
VI
CONDITIONS
TO THE COMMENCEMENT OF THE EXCHANGE OFFER
SECTION
6.01. Mutual Conditions to the
Commencement of the Exchange Offer. Holdco 2 shall not
commence the Exchange Offer unless and until all of the conditions set forth in
this Section 6.01 are satisfied or waived in writing by LAN and the Amaro
Family.
(a) Requisite Shareholder
Approval. The Requisite LAN Shareholder Approval shall have
been obtained and recorded and published in accordance with Law No. 18,046
of Chilean Corporations (the “Chilean
Corporate Law”) and the Requisite TAM Shareholder Approval shall have
been obtained and recorded and published in accordance with Brazilian
Law.
(b) Governmental
Consents. All of the Consents from Governmental Entities set
forth on Schedule 6.01(b) shall have been obtained and all other Consents from
Governmental Entities shall have been obtained other than those which the
failure to obtain, individually or in the aggregate, would not reasonably be
expected to have a TAM Material Adverse Effect or LAN Material Adverse Effect or
to result in criminal or civil sanctions against any party hereto, any Affiliate
of any such party or any director or employee of any of the
foregoing.
(c) No Injunctions or
Restraints. No court or other Governmental Entity of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
Law or Order or taken any other action (whether temporary, preliminary or
permanent) that is in effect and (i) makes illegal, restrains, enjoins or
otherwise prohibits the commencement of the Exchange Offer or the consummation
of the Exchange Offer, the Mergers or the other transactions contemplated by
this Agreement and the Implementation Agreement on the terms contemplated hereby
and thereby or (ii) limits or impairs the ability of LAN and the TAM Direct
Controlling Shareholder, TEP Chile and/or the Amaro Family to jointly (A) own or
operate all or any material portion of the assets of TAM and its Subsidiaries or
(B) exercise full ownership rights with respect to equity interests in Holdco 1,
TAM and its Subsidiaries in a manner consistent with the terms of the TAM
Shareholders Agreement, the Holdco 1 Shareholders Agreement and/or the LATAM/TEP
Shareholders Agreement, as applicable (collectively, “Restraining
Orders”); provided,
however, that notwithstanding the foregoing the occurrence of the
Appraisal Condition shall not cause this condition not to be
satisfied.
-59-
(d) No
Litigation. There shall not be pending any Action commenced by
any Governmental Entity or other Person seeking (i) a Restraining Order or
(ii) to limit or impair the ability of LAN and the TAM Direct Controlling
Shareholder, TEP Chile and/or the Amaro Family to jointly (A) own or
operate all or any material portion of the assets of TAM and its Subsidiaries or
(B) exercise all the rights and receive all the benefits of full ownership
of each of Holdco 1, TAM and its Subsidiaries in a manner consistent with the
terms of the LATAM-TEP Shareholders Agreement, Holdco 1 Shareholders
Agreement and the TAM Shareholders Agreement other than any such Action by any
Person other than a Governmental Entity that could not reasonably be expected to
succeed on its merits (collectively, “Adverse
Actions”).
(e) LAN BDRs. CVM shall
have granted the registrations of LAN and the LAN BDRs described in clauses (A)
and (B) of Section 1.04(b)(i).
(f) Required
Listings. Each of the Required Listings shall have been
approved by the CVM, the NYSE and the SSE, as applicable, and under the terms of
such approval shall become effective no later than the Effective
Time.
(g) Form
F-4. The Form F-4 shall have been declared effective by the
SEC under the U.S. Securities Act. No stop order suspending the
effectiveness of the Form F-4 shall have been issued by the SEC, and no
proceeding for that purpose shall have been initiated or threatened by the
SEC.
(h) Completion of
Pre-Commencement Transaction Steps. Each of the Transaction
Steps described in Section 1.01, and Sections 1.03 through 1.10 of the
Implementation Agreement shall have been taken and completed; provided, however, that,
notwithstanding the foregoing, no party whose failure to take any action that it
is required to be taken pursuant to the Implementation Agreement caused the
failure of any such Transaction Step to be taken shall be entitled to the
benefit of the condition in respect of such Transaction Step (treating each of
(x) LAN and the LAN Controlling Shareholders, collectively, and
(y) TAM, the TAM Direct Controlling Shareholder and the Amaro Family,
collectively, as a single party for purposes of this Section
6.01(h)).
(i) Appraisal
Condition. The product of 0.9 and the high end of the range of
economic value of LAN per share of LAN Common Stock most recently determined by
the Appraiser shall be greater than or equal to the low end of the range of
economic value of TAM per share of TAM Stock determined by the Appraiser at the
same time and, if such determinations are made in the Appraisal Report, the
Appraisal Report has not been replaced by a new Appraisal Report by a new
Appraiser at the request of the holders of the outstanding Free Float Shares in
accordance with Brazilian Law (the “Appraisal
Condition”).
-60-
SECTION
6.02. LAN’s Conditions to the
Commencement of the Exchange Offer. Holdco 2
shall not commence the Exchange Offer unless and until all of the conditions set
forth in this Section 6.02 are satisfied or waived in writing by
LAN.
(a) Representations and
Warranties. The representations and warranties of TAM
contained in Section 2.03(a), Section 2.03(b) and in clause (i)
of Section 2.07 of this Agreement shall have been true and correct on the
date of this Agreement and shall be true and correct on the Condition Date as
though made on and as of the Condition Date (except to the extent that any such
representation and warranty expressly relates to a specified earlier date, in
which case such representation and warranty need only be true and correct as of
such specified earlier date), except for any failures of any representations and
warranties in Section 2.03(a) or Section 2.03(b) that, individually or
in the aggregate, are de
minimis in nature and amount. All other representations and
warranties of TAM contained in this Agreement shall have been true and correct
on the date of this Agreement and shall be true and correct on the Condition
Date as though made on and as of the Condition Date (except to the extent any
such representations and warranties expressly relate to a specified earlier
date, in which case such representation and warranty need only be true and
correct as of such specified earlier date) in each case without giving effect to
any TAM Material Adverse Effect or any other materiality exception,
qualification or limitation contained therein, other than any failures of such
representations and warranties to be so true and correct to the extent that such
failures and the underlying causes thereof, individually or in the aggregate,
have not had and would not reasonably be expected to have a TAM Material Adverse
Effect. LAN shall have received a certificate signed on behalf of TAM
by the chief executive officer of TAM to such effect. The
representations and warranties of the TAM Direct Controlling Shareholder and the
Amaro Family set forth in Article IV shall have been true and correct on
the date of this Agreement and shall be true and correct on the Condition Date
as though made on and as of the Condition Date.
(b) Performance of
Obligations. TAM shall have performed in all material respects
all obligations it is required to perform under this Agreement and the
Implementation Agreement on or prior to the Condition Date, and LAN shall have
received a certificate signed on behalf of TAM by the chief executive officer of
TAM to such effect. The TAM Direct Controlling Shareholder and the
Amaro Family shall have performed in all material respects all obligations it is
required to perform under this Agreement and the Implementation Agreement on or
prior to the Condition Date.
(c) No MAE. No
change, event, circumstance or development shall have occurred since
December 31, 2009 (including any adverse change or development with respect
to any such matters that occurred or existed on or prior to such date) that,
individually or in the aggregate, has had or would reasonably be expected to
have a TAM Material Adverse Effect.
-61-
(d) No Market
Disruptions. Since the date of this Agreement, there shall
have been no (i) general suspension of, or limitation on trading in
securities on, the SSE, the Bovespa or the NYSE (other than a shortening of
trading hours or any coordinated trading halt triggered solely as a result of a
specified increase or decrease in a market index), (ii) declaration of a
banking moratorium or any suspension of payments in respect of banks in Chile,
Brazil or the United States, or (iii) commencement of a war or armed
hostilities or airline industry events which, in the case of clauses (ii)
and (iii), could reasonably be expected to have a TAM Material Adverse
Effect.
(e) Requisite Shareholder
Approvals. All of the Requisite Shareholder Approvals (other
than the Requisite LAN Shareholder Approval and the Requisite TAM Shareholder
Approval) shall have been obtained and recorded and published in accordance with
the Chilean Corporate Law or other applicable Law.
(f)
Appraisal. The
holders of not more than 2.5% of the outstanding shares of LAN Common Stock
shall have exercised their appraisal rights (derecho a retiro) under
Chilean Law with respect to the Mergers.
(g) Shareholders
Agreements. TEP Chile S.A. shall have duly executed and/or
delivered to LAN copies of the TAM Shareholders Agreement, Holdco 1 Shareholders
Agreement, the LATAM/TEP Shareholders Agreement and the Control Group
Shareholders Agreement. Holdco 1 shall have duly executed and/or
delivered to LAN copies of the Holdco 1 Shareholders Agreement and the TAM
Shareholders Agreement. TAM shall have duly executed and/or delivered
to LAN a copy of the TAM Shareholders Agreement. The LAN Controlling
Shareholders shall have duly executed and/or delivered to LAN a copy of the
Control Group Shareholders Agreement.
(h) Other Conditions. CVM
shall have approved the inclusion in the Edital of all of the conditions set
forth in Section 7.03, and none of the events described in paragraphs (f) and
(g) of Section 7.03 shall have occurred since the date of this Agreement
(without giving effect to any references to the Commencement Date contained
therein).
SECTION
6.03. Amaro Family’s Conditions to
the Commencement of the Exchange Offer. Holdco 2 shall
not commence the Exchange Offer unless and until all of the conditions set forth
in this Section 6.03 are satisfied or waived in writing by the Amaro
Family.
-62-
(a) Representations and
Warranties. The representations and warranties of LAN
contained in Section 3.03(a), Section 3.03(b) and in clause (i)
of Section 3.07 of this Agreement shall have been true and correct on the
date of this Agreement and shall be true and correct on the Condition Date as
though made on and as of the Condition Date (except to the extent that any such
representation and warranty expressly relates to a specified earlier date, in
which case such representation and warranty need only be true and correct as of
such specified earlier date), except for any failures of any representations and
warranties in Section 3.03(a) or Section 3.03(b) that, individually or
in the aggregate, are de
minimis in nature and amount. All other representations and
warranties of LAN contained in this Agreement shall have been true and correct
on the date of this Agreement and shall be true and correct on the Condition
Date as though made on and as of the Condition Date (except to the extent any
such representations and warranties expressly relate to a specified earlier
date, in which case such representation and warranty need only be true and
correct as of such specified earlier date), in each case without giving effect
to any LAN Material Adverse Effect or any other materiality exception,
qualification or limitation contained therein, other than any failures of such
representations and warranties to be so true and correct to the extent that such
failures and the underlying causes thereof, individually or in the aggregate,
have not had and would not reasonably be expected to have a LAN Material Adverse
Effect. TAM shall have received a certificate signed on behalf of LAN
by the chief executive officer of LAN to such effect. The
representations and warranties of the LAN Controlling Shareholders set forth in
Article IV shall have been true and correct on the date of this Agreement
and shall be true and correct on the Condition Date as though made on and as of
the Condition Date.
(b) Performance of
Obligations. LAN shall have performed in all material respects
all obligations it is required to perform under this Agreement or the
Implementation Agreement on or prior to the Condition Date, and TAM shall have
received a certificate signed on behalf of LAN by the chief executive officer of
LAN to such effect. The LAN Controlling Shareholders shall have
performed in all material respects all obligations they are required by this
Agreement or the Implementation Agreement to perform on or prior to the
Condition Date.
(c) No MAE. No
change, event, circumstance or development shall have occurred since
December 31, 2009 (including any adverse change or development with respect
to any such matters that occurred or existed on or prior to such date) that,
individually or in the aggregate, has had or would reasonably be expected to
have a LAN Material Adverse Effect.
(d) No Market
Disruptions. Since the date of this Agreement there shall have
been no (i) general suspension of, or limitation on trading in securities
on, the SSE, the Bovespa or the NYSE (other than a shortening of trading hours
or any coordinated trading halt triggered solely as a result of a specified
increase or decrease in a market index), (ii) declaration of a banking
moratorium or any suspension of payments in respect of banks in Chile, Brazil or
the United States, or (iii) commencement of a war or armed hostilities or
airline industry events which, in the case of clauses (ii) and (iii), could
reasonably be expected to have a LAN Material Adverse Effect.
(e) Shareholders
Agreements. LAN shall have duly executed and/or delivered to
the Amaro Family copies of the Holdco 1 Shareholders Agreement, the TAM
Shareholders Agreement and the LATAM/TEP Shareholders Agreement. The
LAN Controlling Shareholders shall have duly executed and/or delivered to the
Amaro Family a copy of the Control Group Shareholders
Agreement.
-63-
(f)
Other Conditions.
None of the events described in Schedule 1.12 of the Implementation Agreement
shall have occurred since the date of this Agreement (without giving effect to
any references to the Commencement Date contained therein).
SECTION
6.04. Commencement of the Exchange
Offer. If all of the conditions set forth in this Article VI
are satisfied or waived in accordance with the requirements of this Article,
then Holdco 2 shall commence the Exchange Offer.
ARTICLE
VII
CONDITIONS
TO THE CONSUMMATION OF THE EXCHANGE OFFER
SECTION
7.01. Conditions to the
Consummation of the Exchange Offer. The only conditions to the
consummation of the Exchange Offer shall be the conditions set forth in Section
7.02 and Section 7.03. Holdco 2 shall not be obligated to, and shall
not, purchase or pay for any of the Eligible TAM Shares validly tendered and not
withdrawn pursuant to the Exchange Offer unless all of such conditions are
satisfied or waived by Holdco 2. Holdco 2 shall only waive the
conditions set forth in the Section 7.02 and 7.03 in accordance with the
requirements set forth in Section 7.02 and Section 7.03 below (as
applicable).
SECTION
7.02. Mutual Conditions to the
Consummation of the Exchange Offer. Holdco 2 shall only waive
a condition to the consummation of the Exchange Offer set forth in this Section
7.02 if such condition has been waived by LAN in the LAN Condition Notice and by
the Amaro Family in the TEP Condition Notice, and Holdco 2 shall promptly waive
all such conditions that have been so waived by LAN and the Amaro
Family.
(a) Required
Listings. Since the Commencement Date, none of the Bovespa,
the NYSE or the SSE shall have revoked or suspended its approval of any of its
Required Listings and under the terms of each such approval the relevant
Required Listing shall become effective no later than the Effective
Time.
(b) Form
F-4. Since the Commencement Date, no stop order suspending the
effectiveness of the Form F-4 shall have been issued by the SEC and no
proceeding for that purpose shall have been initiated or threatened by the
SEC.
(c) Delisting
Condition. The number of Free Float Shares that are validly
tendered into and not withdrawn from, or that otherwise approve, the Exchange
Offer shall be at least equal to the number of Free Float Shares required to
permit the delisting of each of the TAM Ordinary Stock and the TAM Preferred
Stock from the Bovespa under the rules of the CVM and Brazilian Law (the “Delisting
Condition”).
(d) Appraisal. Since
the Commencement Date, no Appraisal Event shall have occurred, the holders of
the Free Float Shares shall not have requested a new Appraisal Report and a new
Appraiser in accordance with Brazilian Law and the holders of the outstanding
Free Float Shares shall no longer have the right to select a new Appraiser and
to cause the Appraisal Report to be replaced with a new Appraisal
Report.
-64-
SECTION
7.03. LAN Conditions to the
Consummation of the Exchange Offer. Holdco 2 shall only waive a condition
to the consummation of the Exchange Offer set forth in this Section 7.03 if such
condition has been waived by LAN in the LAN Condition Notice, and Holdco 2 shall
promptly waive all such conditions that have been so waived by LAN.
(a) Minimum Tender
Condition. The number of Eligible TAM Shares that are validly
tendered into and not withdrawn from the Exchange Offer shall be at least equal
to the number of Eligible TAM Shares that need to be acquired so that, if Holdco
2 or LAN owned the TEP Shares, it would have the right and ability to effect a
statutory squeeze-out under Brazilian Law of all Eligible TAM Shares that do not
accept the Exchange Offer and the Amaro Family shall have stated in the
Subscription Condition Notice that all of the conditions set forth in Schedule
1.12 of the Implementation Agreement have been satisfied or irrevocably waived
by the Amaro Family (the “Minimum
Tender Condition” and, together with the Delisting Condition, the “Minimum
Conditions”).
(b) Governmental
Consents. Since the Commencement Date, none of the Consents
received or obtained from Governmental Entities that were a condition to the
commencement of the Exchange Offer shall have been revoked or amended, modified
or supplemented in any way that could reasonably be expected to materially
impede or interfere with, delay, postpone or materially and adversely affect the
consummation of the transactions contemplated by this Agreement or the
Implementation Agreement.
(c) No Injunctions or
Restraints. Since the Commencement Date, no court or other
Governmental Entity of competent jurisdiction shall have enacted, issued,
promulgated, enforced or entered any Restraining Order.
(d) No
Litigation. No Adverse Action commenced since the Commencement
Date shall remain pending.
(e) Business
Continuity. None of the following actions, events or
circumstances shall have occurred since the Commencement Date (or prior thereto
if no executive officer of LAN had actual knowledge of any such action, event or
circumstance as of the Commencement Date) that, individually or in the
aggregate, have had an adverse effect on the businesses, revenues, operations or
financial condition of TAM and its Subsidiaries in any material
respect:
(i) Any
change in, or termination of, any License from any Governmental Entity or other
Person that are currently held by TAM or any of its Subsidiaries and used to
conduct air domestic or international cargo or passenger transport services or any such Governmental
Entity or other Person shall have threatened or taken any action seeking any
such change or termination;
-65-
(ii) Any
loss of 5% or more of the total number of Slots currently granted to TAM and its
Subsidiaries at Congonhas Airport – São Paulo, or any loss of 10% or more of the
total takeoff and landing scheduled operations of TAM and its Subsidiaries at
any of the following airports: the International Airport of São Paulo -
Guarulhos, Santos Dumont Airport, International Airport of Rio de Janeiro –
Antônio Carlos Jobim, International Airport Juscelino Kubitschek
(Brasília) and International Airport Salgado Filho (Porto
Alegre);
(iii) Any
loss of 15% or more of the permits or air traffic rights held by TAM and its
Subsidiaries to operate in any country in the European Union;
(iv) Any
termination or expiration of any aeronautical insurance policy that currently
covers TAM or any of its Subsidiaries unless such policy is reinstated or
replaced by a substantially equivalent policy within 24 hours of such
termination or expiration;
(v) Any
initiation of any inquiry or investigation of TAM or any of its Subsidiaries by
any Airline Regulatory Entity relating to safety issues that could be expected
to result in the total or partial revocation of any License currently held by
TAM or any of its Subsidiaries or to be detrimental to the public image of
TAM;
(vi) Any
event that occurs at the International Airport of São Paulo – Guarulhos,
Congonhas Airport – São Paulo or Santos Dumont Airport and that (1) prevents TAM
and its Subsidiaries from operating at least 50% of their normally scheduled
flights from such airport during the period from the date on which such event
occurs to the expiration of the Exchange Offer or (2) if such period is less
than 30 days, could be expected to prevent such percentage of such flights
during the 30-day period commencing on the date on which such event
occurs;
(vii) Any
inability of Brazil to adequately and safely control its airspace through its
air traffic control system that (1) prevents TAM and its Subsidiaries from being
able to conduct their normal operations during the period through the expiration
of the Exchange Offer or (2) if such period is less than 30 days, could be
expected to prevent such normal operations for a period of at least 30
days;
(viii) Any
aircraft accident that involves any loss of life or the total loss of any
aircraft;
-66-
(ix) Any
issuance of any Law or Order:
|
|
(A)
|
fixing
or otherwise regulating domestic Brazilian passenger airline
fares;
|
|
|
(B)
|
challenging,
restricting, limiting or impairing the ability of Holdco 2 to make or
consummate the Exchange Offer; LAN to consummate the Mergers; Holdco 2,
LAN or Holdco 1 to own, hold or exercise the rights inherent in their
shares of TAM Stock; or LAN and the TAM Direct Controlling Shareholder,
TEP Chile and/or the Amaro Family to jointly own or operate all or any
material portion of the assets of TAM and its Subsidiaries or exercise all
the rights and receive all the benefits of full ownership of each of
Holdco 1, TAM and its Subsidiaries in a manner consistent with the terms
of the LATAM-TEP Shareholders Agreement, the Holdco 1 Shareholders
Agreement and the TAM Shareholders
Agreement;
|
|
|
(C)
|
providing
for any expropriation or confiscation of any assets of TAM or any of its
Subsidiaries or limiting the ability of TAM or any of its Subsidiaries to
freely dispose of any of their
assets;
|
|
|
(D)
|
suspending,
restricting or limiting the ability to engage in currency exchange
transactions in Brazil or by Brazilian corporations or residents or
changing the current regulations relating to the transfer of funds into or
out of Brazil; or
|
|
|
(E)
|
changing
the current regulations applicable to the capital markets in Brazil or
Chile or increasing any taxes or tax rates that adversely impacts the
shareholders of TAM who tender into, or the consummation by Holdco 2 of,
the Exchange Offer;
|
(x) Any
natural disaster or similar event that causes damage to any infrastructure or
airspace used by, or any industry affecting, TAM or any of its Subsidiaries or
any assets used by TAM or any of its Subsidiaries in the ordinary course of
business; or
(xi) Any
other event that (1) prevents TAM and its Subsidiaries from operating at least
50% of their regular scheduled flights during the period from the date on which
such event occurs to the expiration of the Exchange Offer or (2) if such period
is less than 30 days, could be expected to prevent such percentage of such
flights during the 30-day period commencing on the date on which such event
occurs.
-67-
(f) No Default Under Relevant
Agreements. Since the Commencement Date, there shall not have occurred
any default in the performance or breach, or any event that with notice, lapse
of time or both would result in such a default or breach, by TAM or any of its
Subsidiaries of any covenant or agreement contained in any Contract to which any
of them is a party under which the aggregate consideration provided or received,
or to be provided or received, is greater than US$10,000,000 (collectively,
“Relevant
Agreements”) that continues to exist, in each case after giving effect to
any waivers granted by any other party to such Contract and regardless of
whether or not any event of default, acceleration or other enforcement action
shall have been declared or taken by any such other party.
(g) No Market
Disruptions. Since the Commencement Date, there shall have
been no (i) general suspension of, or limitation on trading in securities on,
the SSE, the Bovespa or the NYSE (other than a shortening of trading hours or
any coordinated trading halt triggered solely as a result of a specified
increase or decrease in a market index), (ii) declaration of a banking
moratorium or any suspension of payments in respect of banks in Brazil, the
United States or the European Union, or (iii) commencement of a war or armed
hostilities or airline industry events, which, in the case of clauses (ii) and
(iii), could reasonably be expected to have a TAM Material Adverse
Effect.
(h) Subscriptions. The
Subscriptions shall have been fully paid in each case in accordance with Section
5.04(b) of this Agreement.
ARTICLE
VIII
TERMINATION,
AMENDMENT AND WAIVER
SECTION
8.01. Termination. This
Agreement shall terminate automatically if and when: (i) the Exchange Offer
expires in accordance with its terms or is revoked with the permission of the
CVM, in each case without the purchase of any shares of TAM Stock or (ii) the
Implementation Agreement is terminated in accordance with its terms or the terms
of this Agreement. In addition to the circumstances provided in
Section 4.01 of the Implementation Agreement, the Implementation Agreement may
be terminated and the Exchange Offer and the Mergers may be abandoned at any
time prior to the commencement of the Exchange Offer, whether before or after
receipt of any Requisite Shareholder Approvals:
(a) by
either LAN or the Amaro Family:
-68-
(i) if
the ANAC Approval has not been obtained or for any other reason the Exchange
Offer shall not have commenced on or before December 31, 2011 (as it may be
extended as set forth below, the “Outside
Date”); provided, however, that if the
condition set forth in Section 6.01(b) shall not have been satisfied on or
before December 31, 2011 and/or the condition set forth in Section 6.01(d) is
not satisfied on December 31, 2011, then, if all other conditions to
commencement of the Exchange Offer (other than conditions that by their nature
are to be satisfied at the Pre-Commencement Closing) set forth in Article VI
shall have been satisfied the Outside Date may be extended until June 30, 2012
at the election of the Amaro Family or LAN by written notice to the other
party;
(ii) if
any Governmental Entity of competent jurisdiction has refused to grant any
Consent described in Section 6.01(b) (other than any Consent required from CVM
with respect to the inclusion in the Edital of any of the conditions set forth
in Section 7.03) and such refusal has become final and nonappealable or any
Governmental Entity of competent jurisdiction shall have enacted, issued,
promulgated, enforced or entered any Restraining Order that has become final and
nonappealable, in each case that would give rise to the failure of a condition
set forth in Section 6.01(b) or Section 6.01(c);
provided, however, that the right to
terminate the Implementation Agreement under this Section 8.01(a) shall not be
available to any party whose material breach of a representation, warranty or
covenant in this Agreement or the Implementation Agreement has been a principal
cause of the failure of the Exchange Offer to commence by the Outside Date or
the failure of the condition giving rise to such termination right, as
applicable;
(b) by
LAN, if TAM, the TAM Direct Controlling Shareholder or the Amaro Family shall
have breached or failed to perform any of their representations, warranties,
covenants or agreements set forth in this Agreement or the Implementation
Agreement or any of such representations and warranties shall have become untrue
as of any date subsequent to the date of this Agreement, which breach or failure
to perform or untruth (i) would give rise to the failure of a condition set
forth in Section 6.02(a) or 6.02(b) (assuming, in the case of any untruth, that
such subsequent date was the Condition Date) and (ii) is not capable of being
cured or, if capable of being cured, shall not have been cured by TAM, the TAM
Direct Controlling Shareholder or the Amaro Family, as applicable, by the
earlier of (A) the day before the Outside Date and (B) the 30th calendar day
following receipt of written notice of such breach or failure to perform from
LAN;
(c) by
the Amaro Family, if LAN or the LAN Controlling Shareholders shall have breached
or failed to perform any of their representations, warranties, covenants or
agreements set forth in this Agreement or the Implementation Agreement or any of
such representations and warranties shall have become untrue as of any date
subsequent to the date of this Agreement, which breach or failure to perform (i)
would give rise to the failure of a condition set forth in Section 6.03(a) or
6.03(b) (assuming, in the case of any untruth, that such subsequent date was the
Condition Date) and (ii) is not capable of being cured or, if capable of being
cured, shall not have been cured by LAN by the earlier of (A) the day before the
Outside Date and (B) the 30th calendar day following receipt of written notice
of such breach or failure to perform from TAM or the Amaro Family;
and
-69-
(d) by
LAN prior to the commencement of the Exchange Offer if CVM shall have refused to
grant its Consent to the inclusion in the Edital of any of the conditions set
forth in Section 7.03.
SECTION
8.02. Effect of
Termination. In
the event of termination of this Agreement as provided in Section 8.01,
this Agreement shall forthwith become void and have no effect, without any
liability or obligation on the part of LAN, TAM or any other party hereto under
this Agreement, other than the provisions of Sections 2.22 and 3.22, the
second and third sentences of Section 5.01(a), Section 5.01(b),
Section 8.01, this Section 8.02, Section 8.04, Section 8.05 and
Article IX, which provisions shall survive such
termination. Notwithstanding the foregoing or any termination or
anything to the contrary in this Agreement, no party to this Agreement shall be
relieved or released from liability for damages of any kind (whether or not
communicated or contemplated at the time of execution of this Agreement),
including consequential damages and including as damages any value lost by
shareholders of LAN or TAM, as the case may be, based on the consideration that
would otherwise have been paid and the benefits that would otherwise have
accrued to such shareholders, which arise out of or result from any
(i) knowing breach of any of the representations and warranties in this
Agreement or (ii) deliberate breach of any covenant of this
Agreement. No party claiming that any such breach has occurred will
have any duty or otherwise be obligated to mitigate any such
damages. For purposes of this Section 8.02, (i) a “knowing”
breach of a representation and warranty of a party shall be deemed to have
occurred only if an executive officer of such party had actual knowledge of such
breach as of the date of this Agreement or would have had such actual knowledge
if such individual had made a reasonable investigation and (ii) a
“deliberate” breach of any covenant of a party shall be deemed to have occurred
only if such party or its Representatives took or failed to take an action
constituting a breach with actual knowledge that the action so taken or omitted
to be taken constituted a breach of such covenant. For purposes of
this Agreement, an “executive
officer” shall have the meaning given to the term “officer” in
Rule 16a-1(f) promulgated under the U.S. Exchange Act.
SECTION
8.03. Amendment. This
Agreement may be amended by the parties hereto at any time prior to the
commencement of the Exchange Offer but only by an instrument in writing signed
by all of the parties hereto.
SECTION
8.04. Extension;
Waiver. At
any time prior to the Effective Time, the parties may (but shall not be under
any obligation to) (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) waive any inaccuracies in
the representations and warranties of the other parties contained herein or in
any document delivered pursuant hereto or (c) waive compliance with any of the
agreements of the other parties or any of the conditions for its benefit
contained herein, in each case to the extent permitted by applicable
Law. Any agreement on the part of a party to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed by
such party. The failure of any party to this Agreement to assert any
of its rights under this Agreement or applicable Law shall not constitute a
waiver of such rights and, except as otherwise expressly provided in this
Agreement, no single or partial exercise by any party to this Agreement of any
of its rights under this Agreement shall preclude any other or further exercise
of such rights or any other rights under this Agreement or applicable
Law.
-70-
SECTION
8.05. Indemnification.
(a) Indemnification by
LAN. LAN shall indemnify and defend and hold the TAM Direct
Controlling Shareholder, its Affiliates and their respective directors,
officers, employees and shareholders (collectively, the “TEP
Indemnified Parties”) harmless from and against any and all any damages,
losses, charges, liabilities, claims, demands, actions, suits, proceedings,
payments, judgments, settlements, assessments, deficiencies, taxes, interest,
penalties, and costs and expenses (including reasonable attorneys’ fees and
disbursement) (collectively, “Losses”)
incurred by any TEP Indemnified Party (whether or not involving a claim by any
Person other than a party hereto or an Affiliate of such a party (each, a “Third
Party ”) arising out of or resulting from (i) the failure of the Exchange
Offer to be consummated solely as a result of any failure by LAN to confirm in
the LAN Condition Notice that any condition to the consummation of the Exchange
Offer set forth in Section 7.03 (other than the Minimum Tender Condition) was
satisfied if (but only if) such condition was in fact satisfied or (ii) any
failure of the Exchange Offer to be consummated after the Amaro Family has paid
for the TEP Chile Subscription as required by Section
5.04(b).
(b) Indemnification by the TAM
Controlling Shareholders. The TAM Direct Controlling
Shareholder and the members of the Amaro Family, jointly and severally, shall
indemnify and defend and hold LAN, its Affiliates and their respective
directors, officers, employees and shareholders (collectively, the “LAN
Indemnified Parties”) harmless from and against any and all Losses
incurred by any LAN Indemnified Party (whether or not involving a claim by a
Third Party) arising out of or resulting from any failure by the Amaro Family to
state in the TEP Condition Notice that any condition set forth in Schedule 1.12
of the Implementation Agreement was satisfied if (but only if) such condition
was in fact satisfied.
-71-
(c) Third Party
Claims. If any claim or action by a Third Party is made in
writing against a TEP Indemnified Party or a LAN Indemnified Party (each, an
“Indemnified
Party”) for which
indemnification is provided under this Agreement and such Indemnified Party
intends to seek such indemnity, then such Indemnified Party shall promptly
notify the party from whom indemnification may be sought hereunder (the “Indemnifying
Party”) in
writing of such claim or action; provided, however, that any failure by
such Indemnified Party to give such notice promptly will not relieve the
Indemnifying Party of any of its indemnification obligations hereunder except to
the extent that the Indemnifying Party is actually prejudiced by such
failure. In case any such action shall be brought against any
Indemnified Party, the Indemnifying Party shall be entitled to participate
therein or, at its election, to assume the defense thereof with counsel
reasonably satisfactory to the Indemnified Party; provided, however, that the
Indemnifying Party shall not have the right to assume the defense of any claim
of a Third Party to the extent (a) the claim relates to any actual or alleged
criminal proceeding, action, indictment, allegation or investigation, (b) seeks
an injunction or equitable relief against the Indemnified Party or (c) upon
petition by the Indemnified Party, the appropriate court rules that the
Indemnifying Party has failed or is failing to prosecute or defend such
claim. After notice from the Indemnifying Party to the Indemnified
Party of its election so to assume the defense thereof, the Indemnifying Party
shall not be liable to the Indemnified Party under this Section 8.05 for any
legal expenses of other counsel or any other expenses subsequently incurred by
the Indemnified Party in connection with the defense thereof (other than
reasonable costs of investigation) unless the representation of the Indemnified
Party by counsel provided by the Indemnifying Party would be inappropriate due
to actual or potential conflicting interests between the Indemnified Party and
the Indemnifying Party, including situations in which there are one or more
material legal defenses available to the Indemnified Party that are not
available to the Indemnifying Party; provided, however, that
notwithstanding the foregoing the Indemnifying Party shall not at any time, in
connection with any one such action or separate but substantially similar
actions arising out of the same general allegations, be liable for the fees and
expenses of more than one separate set of counsel for all Indemnified Parties,
except to the extent that local counsel, in addition to their regular counsel,
is reasonably required in order to effectively defend against such
action. No indemnification shall be available in respect of any
settlement of any action or claim effected by an Indemnified Party without the
prior written consent of the Indemnifying Party. If the Indemnifying
Party shall have assumed the defense of a third-party claim, the Indemnifying
Party shall not enter into any settlement of or otherwise compromise or
discharge such claim without the Indemnified Party’s prior written consent
unless such settlement, compromise or discharge irrevocably releases the
Indemnified Party from all liabilities and obligations with respect to such
claim and does not impose any injunctive or other equitable relief against the
Indemnified Party.
ARTICLE
IX
GENERAL
PROVISIONS
SECTION
9.01. Survival. None
of the representations, warranties or covenants contained in this Agreement or
in any instrument delivered pursuant to this Agreement shall survive the
Effective Time; provided, however, that notwithstanding
the foregoing, this Article IX and the covenants and agreements of the parties
in the last sentence of Section 1.08 shall survive the Effective
Time.
SECTION
9.02. Fees and
Expenses. Except
as provided in Section 8.02, all fees and expenses incurred in connection
with this Agreement, the Implementation Agreement, the Mergers and the other
transactions contemplated hereby and thereby shall be paid by the party
incurring such fees or expenses, whether or not the Exchange Offer is commenced
or the Exchange Offer and the Mergers are consummated, except that expenses
incurred in connection with the printing and mailing of the Offer to
Exchange/Prospectus and the filing fee for the Form F-4 shall be shared
equally by LAN, on the one hand, and the TAM Direct Controlling Shareholder and
the Amaro Family, on the other hand.
-72-
SECTION
9.03. Notices. Except
for notices that are specifically required by the terms of this Agreement to be
delivered orally, all notices, requests, claims, demands, instructions and other
communications or documents given hereunder shall be in writing and shall be
delivered personally or sent by registered or certified mail (postage prepaid),
facsimile or overnight courier to the parties at the following addresses (or at
such other address for a party as shall be specified by like
notice):
If to LAN
or the LAN Controlling Shareholders, to:
Claro y
Cia.
Apoquindo
3721, piso 13,
Santiago,
Chile
Attention:
José María Eyzaguirre B.
Fax: +562
3673003
jmeyzaguirre@claro.cl
with
copies (which shall not constitute notice) to:
Sullivan
& Cromwell LLP
125 Broad
Street
New York,
NY 10004
United
States of America
Attention:
Sergio Galvis and Duncan McCurrach
Fax: +1
212-558-3588
galviss@sullcrom.com
mccurrachd@sullcrom.com
If to TAM
to:
TAM
S.A.
Av.
Jurandir, 856, Lote 4
04072-000
São Paulo
– SP
Brasil
Attention:
Marco Antonio Bologna
Fax: +55
(11) 5582-9879
marco.bologna@tam.com.br
with a
copy (which shall not constitute notice) to:
-73-
Turci
Advogados
Rua Dr.
Renato Paes de Barros, 778
-1◦ andar
– cj.12
04530-0001
São Paulo
– SP
Brasil
Attention:
Flavia Turci
Fax: +55
11 2177 2197
turci@turci.com
Clifford
Chance US LLP
31 West
52nd Street
New York,
NY 10019
Attention:
Sarah Jones and Anand Saha
Fax: +1
212 878 8375
Sarah.Jones@CliffordChance.com
Anand.Saha@CliffordChance.com
If to the
TAM Direct Controlling Shareholder or the Amaro Family to:
Turci
Advogados
Rua Dr.
Renato Paes de Barros, 778
-1◦ andar
– cj.12
04530-0001
São Paulo
– SP
Brasil
Attention:
Flavia Turci
Fax: +55
11 2177 2197
turci@turci.com
with a
copy (which shall not constitute notice) to:
Clifford
Chance US LLP
31 West
52nd Street
New York,
NY 10019
Attention:
Sarah Jones and Anand Saha
Fax: +1
212 878 8375
Sarah.Jones@CliffordChance.com
Anand.Saha@CliffordChance.com
Any
notice, request, claim, instruction or other communication or document given as
provided above shall be deemed given to the receiving party (i) if delivered
personally, upon actual receipt, (ii) if sent by registered or certified mail,
three business days after deposit in the mail, (iii) if sent by facsimile, upon
confirmation of successful transmission if within one business day after such
facsimile has been sent such notice, request, claim, instruction or other
communication or document is also given by one of the other methods described
above and (iv) if sent by overnight courier, on the next business day after
deposit with the overnight courier.
-74-
SECTION
9.04. Definitions. For
the purposes of this Agreement, the following terms shall have the meanings
assigned below. In addition, all capitalized terms used but not
defined herein that are defined in the Implementation Agreement shall have the
meanings assigned to such terms in the Implementation Agreement.
(a) “Affiliate”
shall have the meaning assigned to such term in Rule 12b-2 promulgated under the
U.S. Exchange Act.
(b) “Airline
Affiliate” means, with respect to either LAN or TAM, (i) any of its
Subsidiaries that operates scheduled air services, (ii) any airline with
which it maintains a franchise agreement permitting that airline to operate air
services for the own account of that airline with its own aircraft, but in LAN’s
or TAM’s livery, as the case may be, and subject to certain service standards,
and (iii) any airline that operates scheduled airline services under the
IATA designator code of such airline or that of TAM, in TAM’s livery and under
TAM’s service standards, or in the case of LAN, in LAN’s livery and under LAN’s
service standards, as applicable, with respect to which LAN or TAM, as
applicable, demonstrates that it currently and continually exercises a
substantial influence in the direction of its management and
policies.
(c) “Antitrust
Law” means any statutes, rules, regulations, orders, decrees,
administrative and judicial doctrines and other Laws that are designed or
intended to prohibit, restrict or regulate actions having the purpose or effect
of monopolization or restraint of trade or lessening of competition through
mergers, acquisitions, business combinations or similar
transactions.
(d) “beneficial
ownership” (and its correlative phrases) shall have the meanings assigned
to such phrases in Rule 13d-3 promulgated under the U.S. Exchange
Act.
(e) “business
day” means any day that is not a Saturday, Sunday or a day on which
banking institutions are required or authorized by law or executive order to be
closed in Santiago, Chile, São Paulo, Brazil or New York, New York.
(f) “Control” (and its correlative
terms) shall have the meanings assigned to such terms in Rule 12b-2
promulgated under the U.S. Exchange Act.
(g) “Convertible
Securities” means, with respect to any Person, any securities, options,
warrants or other rights of, or granted by, such Person or any of its Affiliates
that are, directly or indirectly, convertible into, or exercisable or
exchangeable for, any Equity Securities of such Person or any of its
Affiliates.
-75-
(h) “Equity
Securities” means, with respect to any Person, any capital stock of, or
other equity interests in such Person.
(i) “Indebtedness”
means, with respect to any Person, without duplication, (i) all obligations of
such Person for borrowed money, or with respect to deposits or advances of any
kind to such Person, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (iii) all aircraft operating leases of
such Person, (iv) all capitalized lease obligations of such Person, (v) all
guarantees and arrangements having the economic effect of a guarantee of such
Person of any Indebtedness described in clauses (i) through (iv) above of any
other Person, (vi) all obligations or undertakings of such Person to maintain or
cause to be maintained the financial position or covenants of others or to
purchase the obligations or property of others and (vii) indebtedness in
respect of Swap Contracts designed to hedge against interest rates, foreign
exchange rates or commodities pricing risks incurred in the ordinary course of
business and not for speculative purposes.
(j) “Intellectual
Property” means, collectively, all (i) trademarks, service marks,
brand names, certification marks, collective marks, d/b/as, internet domain
names, logos, symbols, trade dress, assumed names, fictitious names, trade names
and other indicia of origin, all applications and registrations for the
foregoing, and all goodwill associated therewith and symbolized thereby,
including all renewals of same; (ii) inventions and discoveries, whether
patentable or not, and all patents, registrations, invention disclosures and
applications therefor, including divisionals, continuations,
continuations-in-part and renewal applications, and including renewals,
extensions and reissues; (iii) trade secrets and confidential information and
know-how, including confidential processes, schematics, business methods,
formulae, drawings, prototypes, models, designs, customer lists and supplier
lists; (iv) all rights in published and unpublished works of authorship, whether
copyrightable or not (including computer software and databases (including
source code, object code and all related documentation)), and other compilations
of information, copyrights therein and thereto, and registrations and
applications therefor, and all renewals, extensions, restorations and reversions
thereof; (v) moral rights, rights of publicity and rights of privacy; and (vi)
all other intellectual property or proprietary rights.
(k) “IT
Assets” means all computer software and databases (including source code,
object code and all related documentation), computers, firmware, middleware,
servers, workstations, routers, hubs, switches, data communications lines and
all other information technology equipment and elements and all associated
documentation.
(l) “Key
Personnel” means any director, officer or other employee of TAM or any
Subsidiary of TAM with annual base compensation in excess of
$250,000.
(m) “Knowledge”
means, with respect to any matter in question, with respect to TAM, the actual
knowledge of any of the executive officers of TAM and such actual knowledge as
they would have had if they had made a reasonable inquiry and, with respect to
LAN, the actual knowledge of any of the executive officers of LAN and such
actual knowledge as they would have had if they had made a reasonable
inquiry.
-76-
(n) “LAN
Material Adverse Effect” means any change, effect, occurrence or
circumstance which, individually or in the aggregate, (i) has had or would
reasonably be expected to have a material adverse effect on the business,
financial condition, results of operations, assets or liabilities of LAN and its
Subsidiaries, taken as a whole, other than (x) any such change, effect,
occurrence or circumstance to the extent resulting from (A) any changes
after the date of this Agreement in general economic or financial market
conditions, (B) any changes after the date of this Agreement generally
affecting the industries in which LAN and its Subsidiaries operate,
(C) changes after the date of this Agreement in IFRS or the interpretation
thereof, (D) geopolitical conditions, the outbreak of a pandemic or other
widespread health crisis, the outbreak or escalation of hostilities, any acts of
war, sabotage or terrorism, or any escalation or worsening of any such acts of
war, sabotage or terrorism threatened or underway as of the date of this
Agreement or (E) any hurricane, tornado, flood, earthquake, volcanic
eruption or natural disaster; provided, however, that the foregoing
clauses (A), (B), (D) and (E) shall not apply to the extent that any such
change, effect, occurrence or circumstance disproportionately impacts LAN and
its Subsidiaries compared to other participants in the industries in which LAN
and its Subsidiaries participate, or (y) any failure, in and of itself, of
LAN to meet any internal or analyst projections, forecasts or estimates of
revenue or earnings or any decrease in the market price or trading volume of the
shares of LAN Common Stock (it being understood, however, that the exception in
this clause (y) shall not apply to the underlying causes of any such failure or
decrease or prevent any of such underlying causes from being taken into account
in determining whether a LAN Material Adverse Effect has occurred); or
(ii) impairs or would reasonably be expected to impair in any material
respect the ability of LAN to consummate the transactions contemplated by this
Agreement or the Implementation Agreement or to perform its obligations
hereunder or thereunder on a timely basis.
(o) “Law”
means any statute, common law, ordinance, rule, regulation, agency requirement
or Order of, or issued, promulgated or entered into by or with, any Governmental
Entity.
(p) “Order”
means any order, decision, writ, injunction, decree, judgment, legal or
arbitration award, stipulation, license, permit or agreement issued, promulgated
or entered into by or with (or settlement or consent agreement subject to) any
Governmental Entity.
(q) “Person”
means any natural person, firm, corporation, partnership, company, limited
liability company, joint venture, association, trust, unincorporated
organization, Governmental Entity or other entity.
-77-
(r) “Subsidiary”
means, with respect to any Person, any other Person (whether or not
incorporated) as to which such Person and/or any one or more of its other
Subsidiaries, directly or indirectly, (i) own a majority of the general partner
interests in such other Person, (ii) own a majority of the outstanding
securities of, or other equity interests in, such other Person which by their
terms has ordinary voting power to elect the members of the board of directors
(or comparable governing body) of such other Person, or (iii) otherwise have the
right to elect or appoint a majority of such members.
(s) “Swap
Contract” means (a) any and all interest rate swap transactions,
basis swaps, credit derivative transactions, forward rate transactions,
commodity swaps, commodity options, forward commodity contracts, equity or
equity index swaps or options, bond or bond price or bond index swaps or options
or forward bond or forward bond price or forward bond index transactions,
interest rate options, forward foreign exchange transactions, cap transactions,
floor transactions, collar transactions, currency swap transactions,
cross-currency rate swap transactions, currency options, spot contracts, or any
other similar transactions or any combination of any of the foregoing (including
any options to enter into any of the foregoing), whether or not any such
transaction is governed by or subject to any master agreement, and (b) any
and all transactions of any kind, and the related confirmations, which are
subject to the terms and conditions of, or governed by, any form of master
agreement published by the International Swaps and Derivatives Association,
Inc., any International Foreign Exchange Master Agreement, or any other master
agreement (any such master agreement, together with any related schedules, a
“Master
Agreement”), including any such obligations or liabilities under any
Master Agreement.
(t) “TAM
Material Adverse Effect” means any change, effect, occurrence or
circumstance which, individually or in the aggregate, (i) has had or would
reasonably be expected to have a material adverse effect on the business,
financial condition, results of operations, assets or liabilities of TAM and its
Subsidiaries, taken as a whole, other than (x) any such change, effect,
occurrence or circumstance to the extent resulting from (A) any changes
after the date of this Agreement in general economic or financial market
conditions, (B) any changes after the date of this Agreement generally
affecting the industries in which TAM and its Subsidiaries operate,
(C) changes after the date of this Agreement in IFRS or the interpretation
thereof, (D) geopolitical conditions, the outbreak of a pandemic or other
widespread health crisis, the outbreak or escalation of hostilities, any acts of
war, sabotage or terrorism, or any escalation or worsening of any such acts of
war, sabotage or terrorism threatened or underway as of the date of this
Agreement or (E) any hurricane, tornado, flood, earthquake, volcanic
eruption or natural disaster; provided, however, that the foregoing
clauses (A), (B), (D) and (E) shall not apply to the extent that any such
change, effect, occurrence or circumstance disproportionately impacts TAM and/or
its Subsidiaries compared to other participants in the industries in which TAM
and its Subsidiaries participate, or (y) any failure, in and of itself, of
TAM to meet any internal or analyst projections, forecasts or estimates of
revenue or earnings or any decrease in the market price or trading volume of the
shares of TAM Preferred Stock (it being understood, however, that the exception
in this clause (y) shall not apply to the underlying causes of any such
failure or decrease or prevent any of such underlying causes from being taken
into account in determining whether a TAM Material Adverse Effect has occurred);
or (ii) impairs or would reasonably be expected to impair in any material
respect the ability of TAM to consummate the transactions contemplated by this
Agreement or the Implementation Agreement or to perform its obligations
hereunder or thereunder on a timely basis.
-78-
(u) “Transaction
Agreements” means this Agreement and the Implementation Agreement, the
Control Group Shareholders Agreement, the LATAM-TEP Shareholders Agreement, the
Holdco 1 Shareholders Agreement and the TAM Shareholders Agreement.
Any terms
not defined in this Section 9.04 or otherwise in this Agreement shall have
the meanings given to such terms in the Implementation Agreement.
SECTION
9.05. Interpretation. When
a reference is made in this Agreement to an Article, a Section, Exhibit or
Schedule, such reference shall be to an Article of, a Section of, or
an Exhibit or Schedule to this Agreement unless otherwise
indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words
“include,” “includes” or “including” are used in this Agreement, they shall be
deemed to be followed by the words “without limitation.” The words
“hereof,” “herein” and “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. References to “this Agreement” shall
include the TAM Disclosure Schedule and the LAN Disclosure Schedule and the
Exhibits and Schedules to this Agreement, all of which are incorporated herein
and made a part of this Agreement. Except as otherwise expressly
provided herein, references to “parties” in this Agreement refers to the parties
to this Agreement. All terms defined in this Agreement shall have the
defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein. The
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such term. Any Contract, instrument or
Law defined or referred to herein or in any Contract or instrument that is
referred to herein means such Contract, instrument or Law as from time to time
amended, modified or supplemented, including (in the case of Contracts or
instruments) by waiver or consent and (in the case of Laws) by succession of
comparable successor Laws and references to all attachments thereto and
instruments incorporated therein. References to a Person are also to
its permitted successors and assigns. Any reference in this Agreement
to a “day” or a number of “days” (without the explicit qualification of
“business”) shall be interpreted as a reference to a calendar day or number of
calendar days. Except as otherwise expressly provided herein, all
remedies provided herein shall be in addition to any other remedies they may
otherwise have under applicable Law. This Agreement is the product of
negotiation by the parties having the assistance of counsel and other advisers,
and the parties and their counsel and other advisers have participated jointly
in negotiating and drafting this Agreement. If an ambiguity or a
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any
provision of this Agreement.
-79-
SECTION
9.06. Consents and
Approvals. For
any matter under this Agreement requiring the consent or approval of any party
to be valid and binding on the parties hereto, such consent or approval must be
in writing and signed by such party.
SECTION
9.07. Counterparts. This
Agreement may be executed in one or more counterparts (including by facsimile),
each of which shall be considered an original instrument and all of which shall
together constitute the same agreement. This Agreement shall become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other parties.
SECTION
9.08. Entire Agreement; No
Third-Party Beneficiaries. (a) Notwithstanding
anything in this Agreement or in the other Transaction Agreements to the
contrary or the placement of any provisions in, or the allocation of any
provisions between, this Agreement and the other Transaction Agreements,
including the Exhibits and Schedules hereto and thereto, constitute the entire
agreement, and supersede all prior agreements, understandings, representations
and warranties, both written and oral, among the parties with respect to the
subject matter of this Agreement and the other Transaction
Agreements.
(b) Except
for the provisions of Section 8.05 relating to LAN Indemnified Parties and TAM
Indemnified Parties, the parties hereto hereby agree that their respective
representations, warranties and covenants set forth herein are solely for the
benefit of the other parties hereto in accordance with, and subject to the terms
of, this Agreement and the other Transaction Agreements and that neither this
Agreement nor any other Transaction Agreement is intended to, or does, confer
upon any Person other than the parties hereto and thereto any rights or remedies
hereunder or thereunder, including the right to rely upon the representations
and warranties set forth herein. The representations and warranties in this
Agreement are the product of negotiations among the parties hereto, and are for
the sole benefit of the parties hereto. Any inaccuracies in such
representations and warranties are subject to waiver by the parties hereto in
accordance with Section 8.04 without notice or liability to any other
Person. In some instances, the representations and warranties in this
Agreement may represent an allocation among the parties hereto of risks
associated with particular matters regardless of the knowledge of any of the
parties hereto. Consequently, Persons other than the parties hereto
may not rely upon the representations and warranties in this Agreement as
characterizations of actual facts or circumstances as of the date of this
Agreement or as of any other date.
SECTION
9.09. Governing
Law. THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES
THEREOF; PROVIDED, HOWEVER,
THAT NOTWITHSTANDING THE FOREGOING THE AUTHORIZATION AND EXECUTION OF
THIS AGREEMENT BY EACH PARTY SHALL BE GOVERNED BY THE LAWS OF ITS JURISDICTION
OF INCORPORATION.
-80-
SECTION
9.10. Assignment. Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned, in whole or in part, by operation of Law or otherwise by any of the
parties hereto without the prior written consent of the other parties, and any
purported assignment without such consent shall be null and
void. Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of, and be enforceable by, the parties and
their respective successors and permitted assigns.
SECTION
9.11. Specific Enforcement;
Consent to Jurisdiction. The
parties agree that irreparable damage would occur and that the parties would not
have any adequate remedy at law in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall
be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions of this
Agreement, this being in addition to any other remedy to which they are entitled
at law or in equity, without the necessity of proving the inadequacy of monetary
damages or of posting bond or other undertaking, as a remedy and to obtain
injunctive relief against any breach or threatened breach hereof. In
the event that any action is brought in equity to enforce the provisions of this
Agreement, no party hereto shall allege, and each party hereto waives the
defense or counterclaim that there is an adequate remedy at Law. Each
of the parties hereto hereby irrevocably consents and submits itself to the
personal jurisdiction of the courts of the State of New York and the federal
courts of the United States of America located in the Borough of Manhattan, The
City of New York (collectively, the “Agreed
Courts”) solely in respect of the interpretation and enforcement of the
provisions of this Agreement and the Implementation Agreement, the documents
referred to herein and the transactions contemplated by this Agreement and the
Implementation Agreement (collectively, the “Agreed
Issues”), waives, and agrees not to assert, as a defense in any action,
suit or proceeding in an Agreed Court with respect to the Agreed Issues that
such party is not subject thereto or that such action, suit or proceeding may
not be brought or is not maintainable in such Agreed Court or that the venue
thereof may not be appropriate or that this Agreement or any such document may
not be enforced in or by such Agreed Court, and the parties hereto irrevocably
agree that all claims with respect to any action, suit or proceeding with
respect to the Agreed Issues shall be heard and determined only in an Agreed
Court. The parties hereby consent to and grant to each Agreed Court
jurisdiction over the Person of such parties and, to the extent permitted by
Law, over the subject matter of any dispute with respect to the Agreed Issues
and agree that mailing of process or other papers in connection with any such
action or proceeding in the manner provided in Section 9.03 or in such other
manner as may be permitted by Law shall be valid and sufficient service
thereof.
-81-
SECTION
9.12. Waiver of Jury
Trial. EACH
PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS
AGREEMENT OR THE IMPLEMENTATION AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND
DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR OTHER
PROCEEDING ARISING OUT OF THIS AGREEMENT OR THE IMPLEMENTATION AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY HERETO
(I) CERTIFIES THAT IT HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER AND
MADE IT VOLUNTARILY AND THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT,
IN THE EVENT OF ANY ACTION, SUIT OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (II) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER
AND CERTIFICATIONS IN THIS SECTION 9.12.
SECTION
9.13. Severability. The
provisions of this Agreement and the Implementation Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions of this Agreement
or the Implementation Agreement. If any provision of this Agreement
or the Implementation Agreement, or the application of such provision to any
Person or any circumstance, is invalid or unenforceable, (a) a suitable and
equitable provision shall be substituted therefor in order to carry out, so far
as may be valid and enforceable, the intent and purpose of such invalid or
unenforceable provision and (b) the remainder of this Agreement and the
Implementation Agreement and the application of such provision to other Persons
or circumstances shall not be affected by such invalidity or unenforceability,
nor shall such invalidity or unenforceability affect the validity or
enforceability of such provision, or the application of such provision, in any
other jurisdiction.
SECTION
9.14. Obligations of LAN and of
TAM. Whenever
this Agreement requires a Subsidiary of LAN to take any action, such requirement
shall be deemed to include an undertaking on the part of LAN to cause such
Subsidiary to take such action. Whenever this Agreement requires a
Subsidiary of TAM to take any action, such requirement shall be deemed to
include an undertaking on the part of TAM to cause such Subsidiary to take such
action.
SECTION
9.15. Language; Portuguese
Translation. A
sworn Portuguese translation of this Agreement will be prepared by a tradutor
juramentado. Such translation and no other may be filed with,
or furnished to, any applicable Governmental Entity and public registries in
Brazil or used in any proceeding in Brazil. For all purposes, the
English language version of this Agreement shall be the only binding agreement
between the parties hereto and shall control if there is any conflict between it
and the Portuguese translation.
[Remainder of Page Intentionally Left
Blank]
-82-
IN
WITNESS WHEREOF, each of the parties have caused this Agreement to be signed by
their respective officers hereunto duly authorized, all as of the date first
written above.
|
LAN
AIRLINES S.A.
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
COSTA
VERDE AERONÁUTICA S.A.
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
INVERSIONES
MINERAS DEL
CANTÁBRICO
S.A.
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
TAM
S.A.
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
NOEMY
ALMEIDA OLIVEIRA AMARO
|
|
|
MARIA
CLÁUDIA OLIVEIRA AMARO
|
|
|
MAURÍCIO
ROLIM AMARO
|
|
|
JOÃO
FRANCISCO
AMARO
|
|
-83-
|
TAM
EMPREENDIMENTOS E
PARTICIPAÇÕES
S.A.
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
NOEMY
ALMEIDA OLIVEIRA AMARO
|
|
|
MARIA
CLÁUDIA OLIVEIRA AMARO
|
|
|
MAURÍCIO
ROLIM AMARO
|
|
|
JOÃO
FRANCISCO
AMARO
|
|
-84-
Exhibit 1
By-laws of TAM as of the
Effective Time
Exhibit 2
By-laws of
Holdco 1
Exhibit 3
By-laws of Sister
Holdco
Exhibit 4
By-laws of
Holdco 2
Exhibit 5
Current By-laws of
TAM
Exhibit 6
Current By-laws of
LAN
Exhibit
99.5
FORM OF
EXECUTION VERSION
SHAREHOLDERS
AGREEMENT
Among
COSTA
VERDE AERONÁUTICA S.A.,
INVERSIONES
MINERAS DEL CANTÁBRICO S.A.
and
TEP
CHILE S.A.
Dated
as of ______, 2011
TABLE OF
CONTENTS
|
Page
|
||
|
ARTICLE I
|
||
|
SCOPE OF AGREEMENT
|
||
|
SECTION
1.01
|
Scope of Agreement
|
2
|
|
SECTION 1.02
|
Effectiveness
|
3
|
|
ARTICLE
II
|
||
|
GOVERNANCE
|
||
|
SECTION
2.01
|
Composition of the LATAM
Board
|
3
|
|
SECTION 2.02
|
Meetings of the LATAM Board
|
4
|
|
SECTION 2.03
|
Shareholder Votes on Non-Supermajority
Actions
|
4
|
|
SECTION 2.04
|
Supermajority Matters
|
5
|
|
ARTICLE III
|
||
|
TRANSFER
RESTRICTIONS
|
||
|
SECTION
3.01
|
Restrictions on Transfers
|
6
|
|
SECTION 3.02
|
TEP Permitted Transfers
|
7
|
|
SECTION 3.03
|
LATAM Controlling Shareholders Permitted
Transfers
|
9
|
|
SECTION 3.04
|
Additional Permitted
Transfers
|
10
|
|
SECTION 3.05
|
Right of First Offer
|
11
|
|
SECTION 3.06
|
Additional Requirements
|
13
|
|
SECTION 3.07
|
Assignment of Rights
|
13
|
|
ARTICLE IV
|
||
|
GENERAL PROVISIONS
|
||
|
SECTION
4.01
|
Term of Agreement
|
13
|
|
SECTION 4.02
|
Fees and Expenses
|
13
|
|
SECTION 4.03
|
Governing Law
|
14
|
|
SECTION 4.04
|
Definitions
|
14
|
|
SECTION 4.05
|
Severability
|
16
|
|
SECTION 4.06
|
Amendment; Waiver
|
16
|
|
SECTION 4.07
|
Assignment
|
17
|
i
|
SECTION 4.08
|
Entire Agreement; No Third Party
Beneficiaries
|
17
|
|
SECTION 4.09
|
Notices
|
17
|
|
SECTION 4.10
|
Specific Enforcement; Consent to Jurisdiction
|
19
|
|
SECTION 4.11
|
WAIVER OF JURY TRIAL
|
19
|
|
SECTION 4.12
|
Counterparts
|
19
|
|
SECTION 4.13
|
Interpretation
|
20
|
|
SECTION 4.14
|
Relationship of
Shareholders
|
20
|
|
SECTION 4.15
|
Filing Requirement
|
20
|
Exhibit A
– Organizational Structure of
the LATAM Group
ii
INDEX OF DEFINED
TERMS
|
Page
|
|
|
Acceptance
Notice
|
12
|
|
Adverse
Effect
|
8
|
|
Affiliate
|
14
|
|
Affiliate
Transfer
|
10
|
|
Agreed
Courts
|
19
|
|
Agreed
Issues
|
19
|
|
Agreement
|
1
|
|
Amaro
Family
|
1
|
|
beneficial
ownership
|
14
|
|
Block
Sale
|
8
|
|
Board
Pre-Meeting
|
4
|
|
business
day
|
15
|
|
By-laws
|
15
|
|
Chilean
Corporate Law
|
4
|
|
Convertible
Securities
|
15
|
|
CVA
|
1
|
|
Dividend
Rights
|
15
|
|
Effective
Time
|
3
|
|
Equity
Securities
|
15
|
|
Exchange
Act
|
15
|
|
Exchange
Offer
|
1
|
|
Exchange
Offer Agreement
|
1
|
|
Exempted
Shares
|
6
|
|
Forced
Vote Sale
|
9
|
|
Forced
Vote Sale Period
|
9
|
|
Full
Ownership Trigger Date
|
8
|
|
Governmental
Entity
|
15
|
|
Holdco
1
|
1
|
|
Holdco
1 Non-Voting Stock
|
15
|
|
Holdco
1 Shareholders Agreement
|
2
|
|
Holdco
1 Voting Stock
|
15
|
|
IMDC
|
1
|
|
Implementation
Agreement
|
1
|
|
Institutional
Lender
|
16
|
|
LATAM
|
1
|
|
LATAM
Board
|
3
|
|
LATAM
Common Stock
|
1
|
|
LATAM
Controlling Shareholder Directed Action
|
6
|
|
LATAM
Controlling Shareholder Directors
|
3
|
|
LATAM
Controlling Shareholders
|
1
|
|
LATAM-TEP
Shareholders Agreement
|
2
|
|
Law
|
16
|
|
Limited
Voting Rights
|
15
|
|
Mediation
Period
|
5
|
|
Mergers
|
1
|
|
Non-Selling
Shareholder
|
12
|
|
Offer
Notice
|
12
|
|
Offer
Period
|
12
|
|
Order
|
16
|
|
Ownership
Control Sale
|
8
|
|
Partial
Sale
|
7
|
|
Person
|
16
|
|
Prohibited
Transfer
|
13
|
|
Proposed
Purchase Price
|
12
|
|
Purchaser
|
13
|
|
Release
Event
|
9
|
|
Restricted
Common Stock
|
16
|
|
Restricted
Shares
|
16
|
|
ROFO
Right
|
12
|
|
Sale
Period
|
12
|
|
Second
Meeting Date
|
9
|
|
Selling
Shareholder
|
12
|
|
Shareholder
Pre-Meeting
|
4
|
|
Shareholders
|
1
|
|
Shareholders
|
16
|
|
Shareholders Agreements
|
2
|
|
Subject
Securities
|
12
|
|
Subject
Shares
|
3
|
|
Subsidiary
|
16
|
|
Supermajority
Action
|
4
|
|
TAM
|
1
|
|
TAM
Shareholders Agreement
|
2
|
|
Tenth
Anniversary
|
7
|
|
TEP
|
1
|
|
TEP
Directors
|
3
|
|
TEP
Parent
|
1
|
|
Third
Anniversary
|
7
|
|
Transfer
|
6
|
|
Voting
Securities
|
17
|
|
Whole
Block Sale
|
11
|
iii
SHAREHOLDERS
AGREEMENT, dated as of [●], 2011 (this “Agreement”),
among COSTA VERDE AERONÁUTICA S.A., a company organized under the Law of Chile
(“CVA”),
INVERSIONES MINERAS DEL CANTÁBRICO S.A., a company organized under the Law of
Chile (“IMDC,”
and together with CVA, the “LATAM
Controlling Shareholders”), and TEP CHILE S.A., a company organized under
the Law of Chile (“TEP,”
and together with the LATAM Controlling Shareholders, the “Shareholders”).
WITNESSETH
WHEREAS,
as of the date of this Agreement Maria Cláudia Oliveira Amaro, Maurício Rolim
Amaro, Noemy Almeida Oliveira Amaro and João Francisco Amaro (the “Amaro
Family”) collectively own 100% of the outstanding shares of
TEP;
WHEREAS,
the LATAM Controlling Shareholders are the controlling shareholders of LATAM
Airlines S.A., a company organized under the Law of Chile (“LATAM”),
and currently collectively own [·] shares of the common
stock, no par value (the “LATAM
Common Stock”), of LATAM;
WHEREAS,
as of the date of this Agreement TAM Empreendimentos e Participações S.A., a
company organized under the Law of Brazil (“TEP
Parent”), is the controlling shareholder of TAM S.A., a company organized
under the Law of Brazil (“TAM”),
and currently owns ordinary shares and preferred shares of TAM representing
[·]% of the total
voting power of the capital stock of TAM currently issued and
outstanding;
WHEREAS,
LATAM, TAM, the LATAM Controlling Shareholders, TEP Parent and the Amaro Family
have entered into an Implementation Agreement, dated as of January 18, 2011 (the
“Implementation
Agreement”), and an Exchange Offer Agreement, dated as of January 18,
2011 (the “Exchange
Offer Agreement”), pursuant to which the outstanding shares of capital
stock of TAM will be acquired by LATAM and [Holdco 1], a newly formed company to
be organized under the Law of Chile (“Holdco
1”), pursuant to the contribution transaction, the delisting exchange
offer (the “Exchange
Offer”) and the mergers described therein (the “Mergers”)
in exchange for shares of LATAM Common Stock;
WHEREAS,
after the Mergers, TEP will own at least 80% of the Holdco 1 Voting Stock and
LATAM will own 100% of the Holdco 1 Non-Voting Stock, no more than 20% of the
Holdco 1 Voting Stock and 100% of the preferred shares of TAM;
WHEREAS,
immediately following the consummation of the transactions contemplated by the
Implementation Agreement and the Exchange Offer Agreement and assuming (only for
purposes of calculating the ownership percentages set forth therein) (i) none of
the holders of the outstanding shares of LATAM Common Stock exercise their
appraisal rights (derecho a
retiro) under the Law of Chile in respect of the Mergers, (ii) all TAM
shareholders other than TEP fully participate in the Exchange Offer and (iii)
the only shares of LATAM Common Stock and shares of TAM that will be outstanding
after such consummation are the shares issued in Mergers and the shares which
are subscribed and fully paid for as of the date of the Implementation Agreement
(which excludes any shares issuable upon future exercises of stock options) and,
the ownership structure of LATAM, Holdco 1, TAM and their Subsidiaries will
be as set forth in Exhibit A hereto;
WHEREAS,
the LATAM Controlling Shareholders, as the continuing controlling shareholders
of LATAM under the Law of Chile, desire to make the concessions to TEP and the
Amaro Family provided herein, and the LATAM Controlling Shareholders and TEP
desire to enter into this Agreement to set forth their agreements with respect
to the governance of LATAM, the voting of their shares of LATAM Common Stock,
the sale and transfer of their Restricted Shares and certain other
matters;
WHEREAS,
concurrently with the execution and delivery of this Agreement, LATAM, TEP, TAM
and Holdco 1 are entering into a shareholders agreement, dated the date hereof
(the “TAM
Shareholders Agreement”), to set forth their agreement with respect to
the governance, management and operation of TAM and its
Subsidiaries;
WHEREAS,
concurrently with the execution and delivery of this Agreement, LATAM, TEP and
Holdco 1 are entering into a shareholders agreement, dated the date hereof (the
“Holdco 1
Shareholders Agreement”), to set forth their agreement with respect to
the governance, management and operation of Holdco 1;
WHEREAS,
concurrently with the execution and delivery of this Agreement, LATAM and TEP
are entering into a shareholders agreement, dated the date hereof (the “LATAM-TEP
Shareholders Agreement,” and together with this Agreement, the TAM
Shareholders Agreement and the Holdco 1 Shareholders Agreement, the “Shareholders
Agreements”), to set forth their agreement with respect to the
governance, management and operation of, and the relationship among, LATAM,
Holdco 1, TAM and their respective Subsidiaries; and
WHEREAS,
the execution and delivery of this Agreement and the other Shareholders
Agreements are conditions to the commencement of the Exchange Offer and
consummation of the Mergers.
NOW,
THEREFORE, in consideration of the representations and warranties, covenants and
agreements contained herein and in the Implementation Agreement and the Exchange
Offer Agreement and for other good and valuable consideration, the receipt of
which is hereby acknowledged, the Shareholders hereby agree as
follows:
ARTICLE
I
SCOPE
OF AGREEMENT
SECTION
1.01 Scope of
Agreement. The
Shareholders desire to set forth in this Agreement certain terms and conditions
upon which they have agreed to hold their Restricted Shares and their agreements
with respect to the governance, control and operation of LATAM, Holdco 1, TAM
and their respective Subsidiaries. All actions required to be taken
or performed under this Agreement shall be taken or performed in accordance with
applicable Law. The Shareholders agree that the specific provisions
of this Agreement shall not be limited by any inconsistent or conflicting
provisions of the By-laws and accordingly, as between parties, such specific
provisions shall prevail over such provisions of the By-laws.
2
SECTION
1.02 Effectiveness. This
Agreement shall become effective only if, and at that time at which, Holdco 1
becomes a holder of at least 80% of the outstanding ordinary shares of TAM (the
“Effective
Time”).
ARTICLE
II
GOVERNANCE
SECTION
2.01 Composition of the
LATAM
Board. (a)
The LATAM Controlling Shareholders and TEP each agree to exercise or cause to be
exercised all voting rights in respect of all shares of LATAM Common Stock
beneficially owned by it (as to each Shareholder at any time, its “Subject
Shares”), and to use its commercially reasonable efforts to cause the
LATAM Controlling Shareholder Directors (in the case of the LATAM Controlling
Shareholders) or the TEP Directors (in the case of TEP) to take all actions
within their power that are necessary or appropriate to:
(i) in
the case of TEP, assist in the removal and replacement of the directors elected
to the board of directors of LATAM (the “LATAM
Board”) by the LATAM Controlling Shareholders through the vote of their
Subject Shares (the “LATAM
Controlling Shareholder Directors”);
(ii) in
the case of the LATAM Controlling Shareholders, assist in the removal and
replacement of the director(s) elected to the LATAM Board by TEP through the
vote of its Subject Shares and, if applicable, the director elected to the LATAM
Board by the vote of the LATAM Controlling Shareholders pursuant to Section
2.01(b) (the “TEP
Directors”);
(iii) maintain
the size of the LATAM Board at a total of nine directors; and
(iv) maintain
the quorum required for action by the LATAM Board at a majority of the total
number of directors of the LATAM Board.
(b) Until
such time as TEP consummates any Partial Sale, unless TEP beneficially owns
enough shares of LATAM Common Stock to elect two directors to the LATAM Board by
voting such shares, the LATAM Controlling Shareholders agree to vote their
Subject Shares for the election to the LATAM Board of any individual designated
by TEP in a written notice delivered to the LATAM Controlling Shareholders no
later than thirty days prior to the relevant election date.
3
(c) Until
the Full Ownership Trigger Date, TEP will take all necessary action to ensure
that at all times when any individual is a TEP Director, such individual will
also be a member of the board of directors of each of Holdco 1 and
TAM.
SECTION
2.02 Meetings of the LATAM
Board. Prior
to each meeting of the LATAM Board, the LATAM Controlling Shareholders and TEP
shall convene a meeting (each, a “Board
Pre-Meeting”) to consult with each other and use their good faith efforts
to reach agreement on all matters to come before the LATAM Board at such meeting
(including the matters set forth in Article 56 of the Chilean Corporations Act
(the “Chilean
Corporate Law”) No. 18.046) other than any action that would
require the approval of two-thirds of the shareholders of LATAM under
Article 67 of the Chilean Corporate Law (each, a “Supermajority
Action”) and shall record their agreement, if any, on each such matter in
the minutes of such Board Pre-Meeting. Unless otherwise agreed
between the LATAM Controlling Shareholders and TEP, each Board Pre-Meeting shall
be held on the third business day prior to any regular meeting of the LATAM
Board and on the business day prior to any special meeting of the LATAM
Board. If the LATAM Controlling Shareholders and TEP cannot reach
agreement on any such matter prior to such meeting of the LATAM Board, then such
matter shall be resolved by the LATAM Board at such meeting. Nothing
in this Section 2.02 shall be construed to prevent the LATAM Controlling
Shareholder Directors or the TEP Directors from participating in any meeting of
the LATAM Board or voting or participating in any such meeting.
SECTION
2.03 Shareholder
Votes on
Non-Supermajority Actions. Prior
to each meeting of the shareholders of LATAM, the LATAM Controlling Shareholders
and TEP shall convene a meeting (each, a “Shareholder
Pre-Meeting”) to discuss and agree upon all matters to be submitted to a
vote of the shareholders of LATAM other than any Supermajority Action and shall
record their agreement, if any, on any such matter in the minutes of such
Shareholder Pre-Meeting. At each meeting of the shareholders of
LATAM, each of the LATAM Controlling Shareholders and TEP shall vote or cause to
be voted all of their Subject Shares in the same manner as a block on all
matters submitted to a vote of the shareholders of LATAM other than a
Supermajority Action and in favor of any such matter that has been approved by
the LATAM Controlling Shareholder Directors and the TEP Directors (if any) or,
in the absence of such approval, in accordance with the proposal of the LATAM
Board to the shareholders of LATAM (without regard to the views or positions of
the LATAM Controlling Shareholder Directors or any TEP
Directors). Unless otherwise agreed between the Shareholders, each
Shareholder Pre-Meeting shall be held on the third business day prior to any
regular meeting of the shareholders of LATAM and on the business day prior to
any special meeting of the shareholders of LATAM. If any shareholder
of LATAM other than any Shareholder requests that any matter other than a
Supermajority Action be submitted to a vote of the shareholders of LATAM at any
meeting of the shareholders of LATAM, then the LATAM Controlling Shareholders
shall cause the LATAM Controlling Shareholder Directors, and TEP shall cause the
TEP Directors, to request that the LATAM Board consider such matter and make a
proposal to the shareholders of LATAM with respect to such matter prior to such
shareholder meeting.
4
SECTION
2.04 Supermajority
Matters. The
LATAM Controlling Shareholders and TEP shall not vote on or take any action, and
shall instruct the LATAM Controlling Shareholder Directors, in the case of the
LATAM Controlling Shareholders, and the TEP Directors, in the case of TEP, not
to vote on or take any action, in respect of any Supermajority Action except in
compliance with this Section 2.04. With respect to any proposed
Supermajority Action, each of the LATAM Controlling Shareholders and TEP shall
consult with each other, shall give due consideration to all views expressed by
the other with respect to such Supermajority Action and shall use their good
faith efforts to agree upon whether or not to approve any such Supermajority
Action. If, notwithstanding the foregoing, the LATAM Controlling
Shareholders and TEP cannot reach an agreement with respect to such
Supermajority Action, then the LATAM Controlling Shareholders, on the one hand,
and TEP, on the other hand, will each appoint a senior representative thereof
who will negotiate in good faith with the senior representative appointed by the
other for a period of 30 days, which initial period may be extended for one
additional 30-day period by either the LATAM Controlling Shareholders or TEP by
delivering a written notice to the other (such period, as it may be extended or
shortened pursuant to this Section 2.04 or by mutual agreement of the
Shareholders, the “Mediation
Period”). If a special meeting of the shareholders of LATAM
has been called to vote on a Supermajority Action other than as a result of any
action by a Shareholder or any LATAM Controlling Shareholder Director or TEP
Director, the LATAM Controlling Shareholders shall cause the LATAM Controlling
Shareholder Directors, and TEP shall cause the TEP Directors, to try to convince
the LATAM Board to call such meeting of shareholders of LATAM so that there will
be sufficient time for a thirty-day Mediation Period prior to such shareholders
meeting unless such directors’ fiduciary duties require that such shareholders
meeting be held earlier. Notwithstanding the foregoing, if a special
meeting of the shareholders of LATAM has been called to vote on a Supermajority
Action other than as a result of any action by a Shareholder or any LATAM
Controlling Shareholder Director or TEP Director and such special meeting will
occur prior to the date when the Mediation Period would otherwise end, then the
Mediation Period shall end on the second business day prior to the date on which
such special meeting will be held. During the Mediation Period the
senior representatives selected by the LATAM Controlling Shareholders and TEP
shall meet with a mediator jointly selected by them, together with any relevant
experts and advisors that they agree to retain and include in the mediation
process, in an attempt to resolve their disagreement with respect to such
Supermajority Action. The fees and expenses of each mediator, expert
or advisor shall be shared equally between the LATAM Controlling Shareholders,
on the one hand, and TEP, on the other hand. Each senior
representative shall give due consideration to the positions, views and
arguments of the other senior representative and shall negotiate in good faith
with the other senior representative in an attempt to reach a mutually
acceptable position or alternative with respect to such Supermajority
Action. If the Shareholders’ disagreement with respect to such
Supermajority Action remains unresolved after the Mediation Period, then each of
the LATAM Controlling Shareholders and TEP will vote or cause to be voted all of
their Subject Shares with respect to such Supermajority Action as directed by
the LATAM Controlling Shareholders to TEP in writing prior to the relevant
shareholder meeting (each, a “LATAM
Controlling Shareholder Directed Action”). The LATAM
Controlling Shareholders will vote or cause to be voted all of their Subject
Shares to approve, and will cause the LATAM Controlling Shareholder Directors to
approve and implement, and TEP will vote or cause to be voted all of its Subject
Shares to approve, and will cause the TEP Directors to approve and implement,
each Supermajority Action that has been approved by agreement of the LATAM
Controlling Shareholders and TEP or, in the case of a LATAM Controlling
Shareholder Directed Action, as directed by the LATAM Controlling
Shareholders. Unless otherwise agreed between the Shareholders, no
Shareholder will vote or cause to be voted any of its Subject Shares to approve
any amendment to the By-laws that would require any action, other than any
Supermajority Action, to be approved by the holders of shares constituting more
than a simple majority of the issued and outstanding shares of LATAM Common
Stock at a duly called meeting of the shareholders of LATAM at which a quorum is
present and acting throughout.
5
ARTICLE
III
TRANSFER
RESTRICTIONS
SECTION
3.01 Restrictions on
Transfers. No Shareholder
will, or will permit any of its Affiliates (including the ultimate beneficial
owners of such Shareholder) to, directly or indirectly, by operation of law or
otherwise, sell, exchange, transfer, convey, assign, mortgage, pledge, encumber
or otherwise dispose of any direct or indirect interest in, or beneficial
ownership of (each, a “Transfer”),
all or any portion of such Shareholder’s Restricted Shares to any Person except
in compliance with this Article III. The LATAM Controlling
Shareholders and TEP each shall have the right, exercisable at any time or from
time to time by written notice delivered to the other Shareholder(s), to exempt
from the provisions of this Article III all or any portion of its shares of
Restricted Common Stock not to exceed [·] shares1 (any such shares so
exempted by a Shareholder at any time, its “Exempted
Shares”). Except pursuant to Section 3.04 or as otherwise
expressly provided herein, prior to the Third Anniversary, no Shareholder will,
or will permit any of its Affiliates (including the ultimate beneficial owners
of such Shareholder) to, directly or indirectly, Transfer all or any portion of
its Restricted Shares to any Person, unless the other Shareholder(s) has or have
given its or prior written consent to such Transfer. On and after the
Third Anniversary, the Shareholders shall have the right to Transfer, or to
permit any of its Affiliates (including the ultimate beneficial owners of such
Shareholder) to Transfer, their Restricted Shares only pursuant to and in
compliance with the terms of Sections 3.02, 3.03 and 3.04. Any
Transfer made other than in compliance with the terms of this Article III
shall be null and void and of no force or effect. The Shareholders
shall be entitled to specific performance (to the extent permitted by applicable
Law) of their rights under this Article III, in addition to any other legal and
equitable remedies to which they may be entitled under applicable
Law.
|
1
|
Insert
the number of shares of LATAM Common Stock which, if they were Exempted
Shares of TEP, would make TEP’s Restricted Common Stock represent 12.5% of
the outstanding shares of LATAM Common Stock determined on a fully diluted
basis immediately after the Effective
Time.
|
6
SECTION
3.02 TEP Permitted
Transfers.
(a) Sales Prior to the Tenth
Anniversary. On and after the third anniversary of the
Effective Time (the “Third
Anniversary”) and prior to the tenth anniversary of the Effective Time
(the “Tenth
Anniversary”), TEP shall have the right to sell or transfer its shares of
Restricted Common Stock to any Person (each, a “Partial
Sale”) if (but only if) such Partial Sale complies with all of the
requirements set forth in this Section 3.02(a).
(i) No
Partial Sale shall be permitted if the number of shares of Restricted Common
Stock of TEP immediately after such Partial Sale would be less than 10% of the
total number of shares of LATAM Common Stock then issued and
outstanding.
(ii) Each
Partial Sale shall be subject to the rights of first offer pursuant to Section
3.05.
(iii) No
Partial Sale of more than 2% of the total number of shares of LATAM Common Stock
then issued and outstanding shall be permitted.
(iv) No
Partial Sale shall be permitted if TEP has sold or transferred any of its shares
of Restricted Common Stock in the twelve-month period ending on the date on
which such Partial Sale would otherwise be consummated.
(b) Partial Sales After the
Tenth Anniversary. On and after the Tenth Anniversary, TEP
shall have the right to make a Partial Sale if (but only if) such Partial Sale
complies with all of the requirements set forth in this Section
3.02(b).
(i) No
Partial Sale shall be permitted if the number of shares of Restricted Common
Stock of TEP immediately after such Partial Sale would be less than 5% of the
total number of shares of LATAM Common Stock then issued and
outstanding.
(ii) Each
Partial Sale shall be subject to the rights of first offer pursuant to Section
3.05.
(iii) No
Partial Sale shall be permitted if TEP has sold or transferred any of its shares
of Restricted Common Stock in the twelve-month period ending on the date on
which such Partial Sale would otherwise be consummated.
(c) Block Shares
Sales. (i) On and after the Tenth Anniversary and prior to the
Full Ownership Trigger Date, TEP may sell or transfer all (but not less than
all) of its Restricted Shares (other than any shares of Restricted Common Stock
of TEP that could be sold in the future pursuant to Section 3.02(b)) to any
Person in a single block sale (a “Block
Sale”) if (but only if) such Block Sale complies with all of the
requirements set forth in this Section 3.02(c)(i).
(A) A
Block Sale must include all of the shares of Holdco 1 Voting Stock beneficially
owned by TEP.
(B) Prior
to a Block Sale, the Person to whom such Restricted Shares are to be sold or
transferred shall have been approved by a resolution duly adopted by the LATAM
Board as a buyer of the shares of Holdco 1 Voting Stock beneficially owned by
TEP; it being agreed that the LATAM Board shall grant such approval without
unreasonable delay unless it has a bona fide business objection to such Person
being the transferee of such shares or if a Transfer of such shares to such
Person would, in the reasonable determination of the LATAM Board, be
inconsistent with applicable Law in Brazil.
7
(C) No
Block Sale shall be permitted if it would have a material adverse effect on the
ability of (x) LATAM or Holdco 1 to own, or to receive the full benefits of
ownership of, TAM and its Subsidiaries or (y) TAM or its Subsidiaries to operate
their airline businesses worldwide (each, an “Adverse
Effect”).
(D) A
Block Sale shall be subject to the rights of first offer pursuant to Section
3.05.
The LATAM
Controlling Shareholders agree for the benefit of LATAM (who shall be a
third-party beneficiary of this sentence) that if they acquire any shares of
Holdco 1 Voting Stock pursuant to Section 3.05 in connection with a Block Sale,
then they will transfer such shares to LATAM or to any nominee of LATAM
immediately following the sale or transfer of such shares to them by TEP for the
same consideration as the LATAM Controlling Shareholders paid to TEP in respect
of such shares.
(ii) On
and after the Tenth Anniversary and after the first date on which LATAM would be
permitted under applicable Law in Brazil and other applicable Law to fully
convert all of the shares of Holdco 1 Non-Voting Stock beneficially owned by
LATAM and its Affiliates into shares of Holdco 1 Voting Stock and such
conversion would not have any Adverse Effect (the “Full
Ownership Trigger Date”), then TEP may sell or transfer all or any
portion of its shares of Restricted Common Stock (each, an “Ownership
Control Sale”) if (but only if) such Ownership Control Sale complies with
all of the requirements set forth in this Section 3.02(c)(ii).
(A) No
Ownership Control Sale shall include any shares of Holdco 1 Voting Stock
beneficially owned by TEP.
(B) Each
Ownership Control Sale shall be subject to the rights of first offer pursuant to
Section 3.05.
(C) No
Ownership Control Sale shall be permitted if TEP has sold or transferred any
shares of Restricted Common Stock in the twelve-month period ending on the date
on which such Ownership Control Sale would otherwise be
consummated.
8
(d) Forced Vote
Sales. On and after the Third Anniversary, if during any
twenty-four month period TEP is required to vote its Subject Shares with respect
to one or more LATAM Controlling Shareholder Directed Actions at two meetings
(consecutive or not) of the shareholders of LATAM held at least twelve months
apart, then after the second such shareholder meeting TEP shall have the right
to sell or transfer all (but not less than all) of its Restricted Shares (each,
a “Forced
Vote Sale”) if (i) TEP delivers a written notice to LATAM within 30 days
after the date on which such second meeting was held that it intends to make a
Forced Vote Sale (the “Second
Meeting Date”), (ii) such Forced Vote Sale complies with the requirements
of Section 3.02(c)(i) or Section 3.02(c)(ii), as applicable, but without giving
effect to the phrase “On and after the Tenth Anniversary and” at the beginning
of such sections and (iii) such Forced Vote Sale is completed within eighteen
months after the Second Meeting Date (such period, as it may be extended
pursuant to this Section 3.02(d), the “Forced
Vote Sale Period”); provided that if TEP has made
a bona fide and reasonably diligent effort to complete a Forced Vote Sale within
the Forced Vote Sale Period but has been unable to do so, then the Forced Vote
Sale Period shall be extended for twelve months. If a Forced Vote
Sale is not completed within the Forced Vote Sale Period, then thereafter this
Section 3.02(d) shall only apply with respect to votes taken on LATAM
Controlling Shareholder Directed Actions after such date.
(e) Release Event
Sales. If a Release Event occurs and TEP has not sold or
transferred any of its Restricted Shares prior to such Release Event, then at
any time after such Release Event TEP shall have the right to sell or transfer
all (but not less than all) of its Restricted Shares; provided, however, that if
the sale or transfer occurs prior to the Full Ownership Trigger Date it must
comply with the requirements of Section 3.02(c)(i) or Section 3.02(c)(ii),
as applicable, but without giving effect to the phrase “On and after the Tenth
Anniversary and,” at the beginning of such sections. A “Release
Event” shall be deemed to have occurred only if and when each of the
following events shall have occurred: (i) a capital increase (as defined under
the Law of Chile) in LATAM is completed after the Effective Time, (ii) TEP does
not fully exercise the preemptive rights granted to it under applicable Law in
Chile with respect to such capital increase in respect of all of its shares of
Restricted Common Stock, and (iii) after such capital increase is completed, the
individual designated by TEP for election to the LATAM Board with the assistance
of the LATAM Controlling Shareholders pursuant to Section 2.01(b) is not elected
to the LATAM Board.
SECTION
3.03 LATAM Controlling
Shareholders Permitted Transfers.
(a) Sales Prior to the Tenth
Anniversary. On and after the Third Anniversary and prior to
the Tenth Anniversary, the LATAM Controlling Shareholders shall have the right
to sell or transfer their shares of Restricted Common Stock if (but only if) any
such sale or transfer complies with all of the requirements set forth in this
Section 3.03(a).
(i) Such
sale or transfer shall be subject to the rights of first offer pursuant to
Section 3.05; provided,
however, that
notwithstanding the foregoing such rights of first offer shall not apply from
and after the first date on which the shares of Restricted Common Stock of TEP
represent less than 10% of the total number of shares of LATAM Common Stock then
issued and outstanding.
(ii) No
such sale or transfer shall be permitted if the LATAM Controlling Shareholders
have sold or transferred any shares of Restricted Common Stock in the
twelve-month period ending on the date on which such sale or transfer would
otherwise be consummated.
9
(iii) No
such sale or transfer of more than 2% of the total number of shares of LATAM
Common Stock then issued and outstanding shall be permitted.
(b) Sales After the Tenth
Anniversary. On and after the Tenth Anniversary, the LATAM
Controlling Shareholders may sell or transfer any of their shares of Restricted
Common Stock; provided,
however, that
notwithstanding the foregoing (i) each such sale or transfer shall be subject to
the rights of first offer pursuant to Section 3.05 until the first date on which
the shares of Restricted Common Stock of TEP represent less than 10% of the
total number of shares of LATAM Common Stock then issued and outstanding and
(ii) the LATAM Controlling Shareholders shall not sell or transfer any of their
shares of Restricted Common Stock if they have sold any shares of Restricted
Common Stock in the twelve-month period ending on the date in which such sale or
transfer would otherwise be consummated.
SECTION
3.04 Additional Permitted
Transfers. Notwithstanding
anything in this Article III to the contrary, each Shareholder may pledge
or grant a security interest in all or any portion of its shares of Restricted
Common Stock to an Institutional Lender to secure a loan made in whole or in
part to that Shareholder in order to (i) finance the acquisition of Equity
Securities of LATAM or (ii) refinance any loan made to such Shareholder that is
outstanding as of the date of this Agreement, and any Transfer of shares of
Restricted Common Stock pursuant to any such pledge or security interest in
effect as of the Effective Time shall be deemed to be a permitted Transfer under
this Section 3.04. In addition, the LATAM Controlling Shareholders
and TEP may Transfer all or a portion of their shares of Restricted Common Stock
to (i) any of their direct or indirect wholly-owned Subsidiaries, (ii) to any
entity wholly-owned by Enrique, Juan José and/or Ignacio Cueto (in the case of
the LATAM Controlling Shareholders) or (iii) any entity that has no direct or
indirect owners other than Maria Cláudia Oliveira Amaro, Maurício Rolim Amaro,
Noemy Almeida Oliveira Amaro and/or João Francisco Amaro and that is directly or
indirectly majority owned and controlled by Maria Cláudia Oliveira Amaro and
Maurício Rolim Amaro (each, an “Affiliate
Transfer”); provided that the LATAM
Controlling Shareholders and TEP shall continue to be bound by the terms of this
Agreement for all purposes following such Transfer. In addition, each
of the LATAM Controlling Shareholders and TEP may Transfer a percentage of its
shares of Restricted Common Stock to each of Enrique, Juan José and Ignacio
Cueto (in the case of the LATAM Controlling Shareholders) or Maria Cláudia
Oliveira Amaro, Maurício Rolim Amaro, Noemy Almeida Oliveira Amaro and João
Francisco Amaro (in the case of TEP) or to any Person wholly owned by any such
individual equal to the percentage of its Restricted Common Stock that such
individual indirectly owns through his or her ownership of shares in the LATAM
Controlling Shareholders (in the case of Enrique, Juan José and Ignacio Cueto)
or TEP (in the case of Maria Cláudia Oliveira Amaro, Maurício Rolim Amaro, Noemy
Almeida Oliveira Amaro and João Francisco Amaro); provided that following any
such transfer of Restricted Common Stock by the LATAM Controlling Shareholders,
all references to the LATAM Controlling Shareholders shall deemed to refer
collectively to the LATAM Controlling Shareholders and the transferee of such
Restricted Common Stock and the LATAM Controlling Shareholders and such
transferee shall be jointly and severally liable for all obligations of the
LATAM Controlling Shareholders under this Agreement; provided further that following any
such transfer of Restricted Common Stock by TEP, all references to TEP shall
deemed to refer collectively to TEP and the transferee of such Restricted Common
Stock and TEP and such transferee shall be jointly and severally liable for all
obligations of TEP under this Agreement. In addition, each
Shareholder may issue its Equity Securities if (i) the net proceeds of such
issuance is used solely to purchase Equity Securities of LATAM and pay related
expenses or to refinance any loan made to such Shareholder that is outstanding
as of the date of this Agreement, (ii) immediately after such issuance the
beneficial owners of Equity Securities of such Shareholder as of the date of
this Agreement collectively own a majority of the outstanding Equity Securities
of such Shareholder that are entitled to vote generally in the election of
directors of such Shareholder and control such Shareholder, and (iii) in the
case of TEP, immediately after such issuance Maria Cláudia Oliveira Amaro and
Maurício Rolim Amaro collectively control TEP and collectively own a majority of
the outstanding Equity Securities of TEP that are entitled to vote generally in
the election of directors of TEP and such issuance is permitted under Brazilian
Law (including those relating to foreign ownership and control of Brazilian
airlines) and would not have an Adverse Effect. In addition, TEP may
issue its Equity Securities regardless of the use of the proceeds thereof if
immediately prior to such issuance the subscriber of those Equity Securities is
a holder of shares issued by TEP and immediately after such issuance TEP remains
majority-owned and controlled by Maria Cláudia Oliveira Amaro and Maurício Rolim
Amaro. No Transfer made in accordance with this Section 3.04 shall
require the consent of any Shareholder, shall be subject to any rights of first
offer in favor of any other Shareholder pursuant to Section 3.05 or shall be
counted for purposes of determining whether Transfers by any Shareholder in any
12-month period have exceeded the limitations set forth in
Sections 3.02(a)(iii) and (iv), 3.02(b)(iii) and 3.03(a)(ii) and (iii) and
3.03(b).
10
SECTION
3.05 Right of First Offer.
(a) If
a Shareholder elects to sell or transfer all or any portion of its shares of
Restricted Common Stock as permitted by the applicable provisions of
Section 3.02 or 3.03, such sale or transfer (and, in the case of a sale or
transfer pursuant to Section 3.02(c)(i), Section 3.02(d) or Section 3.02(e)
(each, a “Whole
Block Sale”), the related sale or transfer of shares of Holdco 1 Voting
Stock) shall be subject to the right of first offer provided in this Section
3.05 except to the extent that Section 3.02 or 3.03 expressly provides that such
right of first offer shall not apply to such sale or transfer. Unless
the context otherwise requires, each Shareholder and its Affiliates shall be
deemed to be a single Shareholder for purposes of this Section
3.05. The Shareholder electing to make any such sale or transfer (the
“Selling
Shareholder”) shall give written notice thereof (each, an “Offer
Notice”) to the other Shareholder (the “Non-Selling
Shareholder”), which notice shall set forth the number of shares of
Restricted Common Stock (and, if applicable, shares of Holdco 1 Voting Stock)
proposed to be sold or transferred (collectively, the “Subject
Securities”), a single price in cash that Selling Shareholder is willing
to accept for the Subject Securities (the “Proposed
Purchase Price,” of which an amount equal to the Non-Selling
Shareholder’s then current tax basis in such shares and any costs that it is
required to incur to effect such sale shall be allocated to any Holdco 1 Voting
Stock included in the Subject Securities) and any other material terms and
conditions of the proposed sale or transfer. The Non-Selling
Shareholder shall have the right to purchase the Subject Securities at the
Proposed Purchase Price and on the other terms and conditions set forth in the
Offer Notice (“ROFO
Right”). The Non-Selling Shareholder may exercise its ROFO
Right in whole but not in part by delivering written notice of such election
(each, an “Acceptance
Notice”) to the Selling Shareholder within 30 days after the date on
which it received the Offer Notice (the “Offer
Period”). If the Non-Selling Shareholder does not deliver an
Acceptance Notice to the Selling Shareholder by the end of the Offer Period, it
will no longer be able to exercise its ROFO Right with respect to the Subject
Securities. For all sales or transfers pursuant to Section 3.02
(other than Sections 3.02(a) and (b)), the Non-Selling Shareholder shall
have the right (but not the obligation) to assign its ROFO Rights in whole or in
part to any Person; provided, however, that,
notwithstanding the foregoing, in the case of a Whole Block Sale the LATAM
Controlling Shareholders may only assign its ROFO Rights to a Person approved in
advance by the LATAM Board and whose purchase would not have an Adverse
Effect. If the Non-Selling Shareholder elects to assign any ROFO
Right pursuant to this Section 3.05(a) to any Person, then the Non-Selling
Shareholder shall describe such assignment in its Acceptance Notice, including
the identity of the assignee and the Subject Securities that are the subject of
the assignment, and the Selling Shareholder shall sell or transfer such Subject
Securities to such assignee in lieu of the Non-Selling Shareholder.
11
(b) If
the Non-Selling Shareholder (i) does not deliver an Acceptance Notice during the
Offer Period or (ii) delivers an Acceptance Notice during the Offer Period in
which it (and/or any assignee) elects to purchase less than all of the Subject
Securities, then the Selling Shareholder shall have the right to market and sell
all of the Subject Securities to a third party for an all-cash purchase price no
less than the Proposed Purchase Price and on terms and conditions no more
favorable to the purchaser than those contained in the Offer Notice during the
90-day period commencing on the day immediately following, in the case of clause
(i), the last day of the Offer Period or, in the case of clause (ii), the date
on which such Acceptance Notice was delivered (such period, the “Sale
Period”). If the Subject Securities are not sold during the
Sale Period or if Selling Shareholder seeks to reduce the sale price below the
Proposed Purchase Price or to offer other sale terms and conditions that are
more favorable to the purchaser than those contained in the Offer Notice, all of
the provisions of this Section 3.05 shall again apply with respect to any sale
or transfer of such Subject Securities.
(c) If
the Non-Selling Shareholder delivers an Acceptance Notice to the Selling
Shareholder during the Offer Period in which it (and/or any assignee) elects to
purchase all of the Subject Securities, then there shall be deemed a valid,
legally binding and enforceable agreement between the Selling Shareholder, on
the one hand, and the Non-Selling Shareholder (and/or any such assignee) (each,
a “Purchaser”),
on the other hand, for the sale or transfer of the Subject Securities for the
Proposed Purchase Price and on the other terms and conditions set forth in the
Offer Notice. The closing of any such sale or transfer shall take
place at 10 a.m., New York time, on the later of (A) the 30th business day
after the day on which such Acceptance Notice was received by Selling
Shareholder and (B) the first date on which all of the consents, approvals or
authorizations required by Law from any Governmental Entity for such sale or
transfer are obtained at the principal office of LATAM or on such other date or
at such other place as may be agreed to between the Selling Shareholder and the
Purchaser(s), and the following provisions shall apply:
12
(i) the
Selling Shareholder shall execute such instruments of transfer as are
customarily executed and reasonably requested to evidence and consummate the
sale or transfer of the Subject Securities to each Purchaser; and
(ii) each
party shall bear its own legal fees and expenses in connection with such sale or
transfer.
SECTION
3.06 Additional
Requirements. Each
Shareholder agrees that it will not Transfer any of its Restricted Shares if
such Transfer would violate any applicable Law (each, a “Prohibited
Transfer”). If and to the extent permitted by applicable Law,
LATAM and Holdco 1, as applicable, may refuse to register any Prohibited
Transfer, and each Shareholder hereby waives any rights it may have in the
future to object to or challenge any such refusal in respect of any Transfer
that is determined to be a Prohibited Transfer by a final and non-appealable
order of a court of competent jurisdiction.
SECTION
3.07 Assignment of
Rights. Any
transferee of Restricted Shares Transferred pursuant to Sections 3.02(c),
(d) or (e) or Section 3.04 shall execute a counterpart to this Agreement
agreeing to be bound by all the terms and conditions hereof. Except
for Affiliate Transfers made pursuant to Section 3.04 or as otherwise
contemplated in this Article III, no Shareholder shall have the right to
assign any of its rights under this Agreement to any permitted transferee of
such Shareholder’s Restricted Shares.
ARTICLE
IV
GENERAL
PROVISIONS
SECTION
4.01 Term of
Agreement. Except
as otherwise provided under applicable Law, this Agreement shall continue in
effect as to each Shareholder until (i) it is terminated as to such Shareholder
by the written consent of all Shareholders or (ii) the first day on which such
Shareholder and its Affiliates no longer beneficially own any shares of LATAM
Common Stock, whichever is sooner to occur. The termination of this
Agreement as to any Shareholder shall not affect any of the rights and
obligations of the other Shareholders, hereunder, if any, with respect to each
other. In the event this Agreement terminates as to any Shareholder,
thereafter such Shareholder shall have no further liability to the other
Shareholders or to any of their respective shareholders, directors, officers,
employees or other Affiliates and such other Shareholders shall have no further
liability to such Shareholder, in each case solely in respect of this Agreement;
provided, however, that the foregoing
shall not apply to any provisions hereof that expressly survive the termination
of this Agreement (including Section 4.02); and provided, further, that nothing herein
shall relieve any Shareholder of any liability for any breach of this Agreement
that occurred prior to such termination.
SECTION
4.02 Fees and
Expenses. All
fees and expenses incurred in connection with this Agreement shall be paid by
the Shareholder incurring such fees or expenses. The provisions of
this Section 4.02 shall survive any termination of this
Agreement.
13
SECTION
4.03 Governing
Law. THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES THEREOF;
PROVIDED, HOWEVER, THAT
NOTWITHSTANDING THE FOREGOING THE AUTHORIZATION AND EXECUTION OF THIS AGREEMENT
BY EACH PARTY SHALL BE GOVERNED BY THE LAW OF ITS JURISDICTION OF
INCORPORATION.
SECTION
4.04 Definitions. For
the purposes of this Agreement, the following terms shall have the meanings
assigned below:
(a) “Affiliate”
shall have the meaning assigned to such term in Rule 12b-2 under the Exchange
Act; provided, however,
that for all purposes of this Agreement (i) neither LATAM, Holdco 1,
TAM nor any of their respective Subsidiaries shall be deemed to be an Affiliate
of any Shareholder and (ii) no Shareholder shall be deemed to be an
Affiliate of any other Shareholder or any of its Affiliates solely by reason of
this Agreement.
(b) “beneficial
ownership” (and its correlative phrases) shall have the meanings assigned
to such phrases in Rule 13d-3 promulgated under the U.S. Exchange Act; provided, however that, notwithstanding
the foregoing, for all purposes of this Agreement a Shareholder shall be deemed
to beneficially own all Restricted Shares beneficially owned by it and its
Affiliates.
(c) “business
day” shall mean any day that is not a Saturday, Sunday or a day on which
banking institutions are required or authorized by Law or executive order to be
closed in Santiago, Chile or São Paulo, Brazil.
(d) “By-laws”
means the By-laws of LATAM in effect as of the date hereof, as they may be
amended from time to time.
(e) “Convertible
Securities” means, with respect to any Person, any securities, options,
warrants or other rights of, or granted by, such Person or any of its Affiliates
that are, directly or indirectly, convertible into, or exercisable or
exchangeable for, any Equity Securities of such Person or any of its
Affiliates.
(f) “Equity
Securities” means, with respect to any Person, any capital stock of, or
other equity interests in, such Person.
(g) “Exchange
Act” shall mean the Securities Exchange Act of 1934, as
amended.
(h) “Governmental
Entity” means any governmental, quasi-governmental or regulatory
authority, body, department, commission, board, bureau, agency, division, court,
organized securities exchange or other legislative, executive or judicial
governmental entity or instrumentality of any country, nation, republic,
federation or similar entity or any state, county, parish or municipality,
jurisdiction or other political subdivision thereof.
14
(i) “Holdco 1
Non-Voting Stock” shall mean the non-voting stock, no par value, of
Holdco 1, which, pursuant to the by-laws of Holdco 1, shall have the
exclusive right to receive all dividends, distributions or other amounts payable
by Holdco 1 in respect of any shares of its capital stock (including a
preference to be paid in connection with any liquidation, capital reduction,
winding up, recapitalization or reorganization) other than the Dividend Rights
and which shall have no right to vote on, approve or consent to any matter that
is subject to any vote of, approval by or consent from the shareholders of
Holdco 1 under the Law of Chile or otherwise other than the rights to vote
on, approve or consent to matters requiring the approval of the holders of
shares of Holdco 1 Non-Voting Stock under the Law of Chile or otherwise
(collectively, the “Limited
Voting Rights”).
(a) “Holdco 1
Voting Stock” shall mean the voting stock, no par value, of Holdco 1,
which, pursuant to the by-laws of Holdco 1, shall have the exclusive right
to vote on, approve or consent to all matters that are subject to any vote of,
approval by or consent from the shareholders of Holdco 1 under the Law of
Chile or otherwise (other than the Limited Voting Rights) and which shall have
no economic rights other than the right to receive a nominal dividend
(collectively, “Dividend
Rights”).
(j) “Institutional
Lender” means any savings bank, savings and loan association, commercial
bank or trust company, insurance company subject to regulation by any
Governmental Entity, merchant or investment bank or any other entity generally
viewed as an institutional lender.
(k) “Law”
means any statute, common law, ordinance, rule, regulation, agency requirement
or Order of, or issued, promulgated or entered into by or with, any Governmental
Entity.
(l) “Order”
means any order, decision, writ, injunction, decree, judgment, legal or
arbitration award, stipulation, license, permit or agreement issued, promulgated
or entered into by or with (or settlement or consent agreement subject to) any
Governmental Entity.
(m) “Person”
means any natural person, firm, corporation, partnership, company, limited
liability company, joint venture, association, trust, unincorporated
organization, Governmental Entity or other entity.
(n) “Restricted
Common Stock” means, with respect to any Shareholder at any time, all
shares of LATAM Common Stock that were beneficially owned by such Shareholder
immediately after the Effective Time and that are beneficially owned by, and not
Exempted Shares of, such Shareholder at such time.
15
(o) “Restricted
Shares” means (i) with respect to the LATAM Controlling Shareholders at
any time, all of their shares of Restricted Common Stock at such time and (ii)
with respect to TEP at any time, all of its shares of Restricted Common Stock at
such time and all shares of Holdco 1 Voting Stock beneficially owned by it at
such time, including all Equity Securities or Convertible Securities issued in
respect of, in exchange for or upon reclassification of such shares of
Restricted Common Stock or Holdco 1 Voting Stock pursuant to any dividend,
distribution, share exchange, reclassification, recapitalization, consolidation,
merger, stock split, reverse stock split or otherwise.
(p) “Shareholders”
initially shall have the meaning set forth in the Preamble to this Agreement and
after any Transfer of shares of Restricted Common Stock by any Shareholder to
any Person pursuant to Sections 3.02(c), (d) or (e) or any Affiliate
Transfer pursuant to Section 3.04 shall mean the non-transferring Shareholder,
the transferring Shareholder and any Person to whom such Transfer was made and
who became a party to this Agreement as required by this Agreement.
(q) “Subsidiary”
means, with respect to any Person, (i) a corporation in which such Person,
together with its Subsidiaries, beneficially owns Voting Securities of such
corporation which entitle them, collectively, to cast more than 50% of all the
votes entitled to be cast by the holders of all Voting Securities of such
corporation then outstanding in a general election of directors of such
corporation or (ii) any Person that is not a corporation in which such Person,
and/or one or more other Subsidiaries of such Person, directly or indirectly,
has a majority equity or voting interest or the power to direct the policies,
management and affairs thereof.
(r) “Voting
Securities” means, with respect to any Person, any securities or other
equity or ownership interests in such Person which are entitled to vote
generally in the election of directors of such Person (or, if such Person is not
a corporation, the individuals who perform a similar function for such
Person).
SECTION
4.05 Severability. The
provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity or
enforceability of the other provisions of this Agreement. If any
provision of this Agreement, or the application of such provision to any Person
or any circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other Persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application of
such provision, in any other jurisdiction.
SECTION
4.06 Amendment;
Waiver. This
Agreement may be amended and any performance, term or condition waived in whole
or in part only by a writing signed by all Shareholders affected by the
amendment (in the case of an amendment) or by the Shareholder against whom the
waiver is to be effective (in the case of a waiver). No failure or
delay by any Shareholder in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any singular partial exercise of
such right, power or privilege preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. Waiver by any
Shareholder of any breach or failure to comply with any provision of this
Agreement by another Shareholder shall not be construed as, nor shall
constitute, a continuing waiver of such provisions, or a waiver of any other
breach of or failure to comply with any other provisions of this
Agreement.
16
SECTION
4.07 Assignment. Subject
to Article III of this Agreement, neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned, in whole or in part, by
operation of Law or otherwise by any Shareholder without the prior written
consent of the other Shareholders, and any purported assignment without such
consent shall be null and void and of no force or effect. Subject to
the preceding sentence, this Agreement will be binding upon, inure to the
benefit of, and be enforceable by, the Shareholders and their respective
successors and permitted assigns.
SECTION
4.08 Entire Agreement; No Third
Party Beneficiaries. This
Agreement, the other Shareholders Agreements, the Implementation Agreement and
the Exchange Offer Agreement, including the Exhibits and Schedules hereto and
thereto, constitute the entire agreement, and supersede all prior agreements and
understandings, both written and oral, among the Shareholders with respect to
the subject matter hereof and thereof. Except as otherwise expressly
stated herein, the Shareholders hereby agree that the agreements and covenants
set forth herein are solely for the benefit of the other Shareholders in
accordance with, and subject to the terms of, this Agreement and that this
Agreement is not intended to, and does not, confer upon any Person other than
the Shareholders any rights or remedies hereunder, including the right to rely
upon the representations and warranties set forth herein.
SECTION
4.09 Notices. All
notices, requests, claims, demands, instructions and other communications or
documents given hereunder shall be in writing and shall be delivered personally
or sent by registered or certified mail (postage prepaid), facsimile or
overnight courier to the Shareholders at the following addresses (or at such
other address for a Shareholder as shall be specified by like
notice):
If to the
LATAM Controlling Shareholders, to:
Claro y
Cia
Apoquindo
3721, piso 13,
Santiago,
Chile
Attention:
José María Eyzaguirre B.
Fax: +562
3673003
jmeyzaguirre@claro.cl
with
copies (which shall not constitute notice) to:
Sullivan
& Cromwell LLP
125 Broad
Street
New York,
NY 10004
United
States of America
17
Attention:
Sergio Galvis and Duncan McCurrach
Fax: +1
212-558-3588
galviss@sullcrom.com
mccurrachd@sullcrom.com
If to TEP
to:
Turci
Advogados
Rua Dr.
Renato Paes de Barros, 778
-1◦ andar
– cj.12
04530-0001
São Paulo
– SP
Brasil
Attention:
Flavia Turci
Fax: +55
11 2177 2197
turci@turci.com
with a
copy (which shall not constitute notice) to:
Clifford
Chance US LLP
31 West
52nd Street
New York,
NY 10019
Attention:
Sarah Jones and Anand Saha
Fax: +1
212 878 8375
Sarah.Jones@CliffordChance.com
Anand.Saha@CliffordChance.com
Any
notice, request, claim, instruction or other communication or document given as
provided above shall be deemed given to the receiving party (i) if delivered
personally, upon actual receipt, (ii) if sent by registered or certified mail,
three business days after deposit in the mail, (iii) if sent by facsimile, upon
confirmation of successful transmission if within one business day after such
facsimile has been sent such notice, request, claim, instruction or other
communication or document is also given by one of the other methods described
above and (iv) if sent by overnight courier, on the next business day after
deposit with the overnight courier.
18
SECTION
4.10 Specific Enforcement;
Consent to Jurisdiction. The
Shareholders agree that irreparable damage would occur and that the Shareholders
would not have any adequate remedy at Law in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed
that the Shareholders shall be entitled to an injunction or injunctions to
prevent breaches of this Agreement and to enforce specifically the terms and
provisions of this Agreement, this being in addition to any other remedy to
which they are entitled at Law or in equity, without the necessity of proving
the inadequacy of monetary damages or of posting bond or other undertaking, as a
remedy and to obtain injunctive relief against any breach or threatened breach
hereof. In the event that any action is brought in equity to enforce
the provisions of this Agreement, no Shareholder shall allege, and each
Shareholder waives the defense or counterclaim that there is an adequate remedy
at Law. Each of the Shareholders hereby irrevocably consents and
submits itself to the personal jurisdiction of the courts of the State of New
York and the federal courts of the United States of America located in the
Borough of Manhattan, The City of New York (collectively, the “Agreed
Courts”) solely in respect of the interpretation and enforcement of the
provisions of this Agreement, and the documents referred to herein and the
transactions contemplated by this Agreement (collectively, the “Agreed
Issues”), waives, and agrees not to assert, as a defense in any action,
suit or proceeding in an Agreed Court with respect to the Agreed Issues that
such Shareholder is not subject thereto or that such action, suit or proceeding
may not be brought or is not maintainable in such Agreed Court or that the venue
thereof may not be appropriate or that this Agreement or any such document may
not be enforced in or by such Agreed Court, and the Shareholders irrevocably
agree that all claims with respect to any action, suit or proceeding with
respect to the Agreed Issues shall be heard and determined only in an Agreed
Court. The Shareholders hereby consent to and grant to each Agreed
Court jurisdiction over the Person of such Shareholders and, to the extent
permitted by Law, over the subject matter of any dispute with respect to the
Agreed Issues and agree that mailing of process or other papers in connection
with any such action or proceeding in the manner provided in Section 4.09 or in
such other manner as may be permitted by Law shall be valid and sufficient
service thereof.
SECTION
4.11 WAIVER OF JURY
TRIAL. EACH
PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS
AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE
EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO (I) CERTIFIES
THAT IT HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER AND MADE IT VOLUNTARILY
AND THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF ANY ACTION, SUIT OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER
AND (II) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND
CERTIFICATIONS IN THIS SECTION 4.11.
SECTION
4.12 Counterparts. This
Agreement may be executed in one or more counterparts (including by facsimile),
each of which shall be considered an original instrument and all of which shall
together constitute the same agreement. This Agreement shall become
effective when one or more counterparts have been signed by each of the
Shareholders and delivered to the other Shareholders.
19
SECTION
4.13 Interpretation. When
a reference is made in this Agreement to an Article, a Section, Exhibit or
Schedule, such reference shall be to an Article of, a Section of, or
an Exhibit or Schedule to this Agreement unless otherwise
indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words
“include,” “includes” or “including” are used in this Agreement, they shall be
deemed to be followed by the words “without limitation.” The words
“hereof,” “herein” and “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. All terms defined in this Agreement
shall have the defined meanings when used in any certificate or other document
made or delivered pursuant hereto unless otherwise defined
therein. The definitions contained in this Agreement are applicable
to the singular as well as the plural forms of such terms and to the masculine
as well as to the feminine and neuter genders of such terms. Any
contract, instrument or Law defined or referred to herein or in any contract or
instrument that is referred to herein means such contract, instrument or Law as
from time to time amended, modified or supplemented, including (in the case of
contracts or instruments) by waiver or consent and (in the case of Laws) by
succession of comparable successor Law and references to all attachments thereto
and instruments incorporated therein. References to a Person are also
to its permitted successors and assigns. Except as otherwise
expressly provided herein, all remedies provided herein shall be in addition to
any other remedies that the Shareholders may otherwise have under applicable
Law. Any reference in this Agreement to a “day” or a number of “days”
(without the explicit qualification of “business”) shall be interpreted as a
reference to a calendar day or number of calendar days. This
Agreement is the product of negotiation between the Shareholders having the
assistance of counsel and other advisers, and between the Shareholders and their
counsel and other advisers having participated jointly in negotiating and
drafting this Agreement. If an ambiguity or a question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
between the Shareholders, and no presumption or burden of proof shall arise
favoring or disfavoring any Shareholder by virtue of the authorship of any
provision of this Agreement.
SECTION
4.14 Relationship of
Shareholders.
Nothing herein is intended to constitute the Shareholders as members of any
partnership, joint venture, association, syndicate, or other entity, or shall be
deemed to confer on any of them any express, implied, or apparent authority to
incur any obligation or liability on behalf of another Shareholder or any
obligation to assume any obligation or responsibility of any other Shareholder,
except as otherwise expressly provided herein. Notwithstanding the
foregoing, the LATAM Controlling Shareholders shall be treated as a single
Shareholder for all purposes of this Agreement.
SECTION 4.15 Filing
Requirement. A
copy of this Agreement shall be filed at the headquarters of LATAM and Holdco 1
for all purposes of applicable Law.
20
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized as of the date
first above written.
|
COSTA
VERDE AERONÁUTICA S.A.
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
|
INVERSIONES
MINERAS DEL CANTÁBRICO S.A.
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
|
TEP
CHILE S.A.
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
Exhibit
A
Ownership
Structure of the LATAM Group
Exhibit
99.6
|
FORM
OF EXECUTION VERSION
|
SHAREHOLDERS
AGREEMENT
Between
LAN
AIRLINES S.A.
and
TEP
CHILE S.A.
Dated
as of [•], 2011
TABLE
OF CONTENTS
|
Page
|
||
|
ARTICLE
I
|
||
|
GOVERNANCE
|
||
|
SECTION
1.01
|
Scope
of the Agreement
|
3
|
|
SECTION
1.02
|
Composition
of the LATAM Board
|
3
|
|
SECTION
1.03
|
Chairman
of LATAM Board
|
3
|
|
SECTION
1.04
|
LATAM
Committees
|
3
|
|
SECTION
1.05
|
Roles
of the LATAM CEO, the LATAM COO and the TAM CEO
|
4
|
|
SECTION
1.06
|
Recommendations
to Shareholders of LATAM
|
6
|
|
SECTION
1.07
|
Other
Key Executives of the LATAM Group
|
6
|
|
SECTION
1.08
|
Group
Structure
|
7
|
|
SECTION
1.09
|
Further
Action; Efforts
|
7
|
|
ARTICLE
II
|
||
|
GENERAL
PROVISIONS
|
||
|
SECTION
2.01
|
Term
of Agreement
|
7
|
|
SECTION
2.02
|
Fees
and Expenses
|
7
|
|
SECTION
2.03
|
Governing
Law
|
7
|
|
SECTION
2.04
|
Definitions
|
7
|
|
SECTION
2.05
|
Severability
|
9
|
|
SECTION
2.06
|
Amendment;
Waiver
|
9
|
|
SECTION
2.07
|
Assignment
|
9
|
|
SECTION
2.08
|
Entire
Agreement; No Third-Party Beneficiaries
|
10
|
|
SECTION
2.09
|
Notices
|
10
|
|
SECTION
2.10
|
Specific
Enforcement; Consent to Jurisdiction
|
11
|
|
SECTION
2.11
|
WAIVER
OF JURY TRIAL
|
12
|
|
SECTION
2.12
|
Counterparts
|
12
|
|
SECTION
2.13
|
Interpretation
|
13
|
|
SECTION
2.14
|
Filing
Requirement.
|
13
|
Exhibit
A
LATAM Group Ownership Structure and Organizational
Structure
i
INDEX OF DEFINED
TERMS
|
Page
|
|
|
Affiliate
|
7
|
|
Agreed
Courts
|
11
|
|
Agreed
Issues
|
11
|
|
Agreement
|
1
|
|
Amaro
Family
|
1
|
|
beneficial
ownership
|
8
|
|
business
day
|
8
|
|
Control
|
8
|
|
Control
Group Shareholders Agreement
|
2
|
|
CVA
|
1
|
|
Departure
|
3
|
|
Effective
Time
|
3
|
|
Exchange
Offer
|
1
|
|
Exchange
Offer Agreement
|
1
|
|
Governmental
Entity
|
8
|
|
Holdco
1
|
1
|
|
Holdco
1 Board
|
3
|
|
Holdco
1 Group
|
5
|
|
Holdco
1 Group Boards
|
3
|
|
Holdco
1 Shareholders Agreement
|
2
|
|
IMDC
|
1
|
|
Implementation
Agreement
|
1
|
|
LATAM
|
1
|
|
LATAM
Board
|
3
|
|
LATAM
Board Committee
|
3
|
|
LATAM
CEO
|
4
|
|
LATAM
Chairman
|
3
|
|
LATAM
Common Stock
|
1
|
|
LATAM
Controlling Shareholders
|
1
|
|
LATAM
COO
|
5
|
|
LATAM
Group
|
2
|
|
Law
|
8
|
|
Mergers
|
1
|
|
Order
|
8
|
|
Organizational
Documents
|
8
|
|
Parties
|
1
|
|
Person
|
8
|
|
Second
Anniversary
|
3
|
|
Shareholders
|
1
|
|
Shareholders
Agreements
|
2
|
|
Subsidiary
|
8
|
|
Supermajority
Action
|
6
|
|
TAM
|
1
|
|
TAM
Board
|
3
|
|
TAM
CEO
|
6
|
|
TAM
Shareholders Agreement
|
2
|
|
TEP
|
1
|
|
TEP
Director
|
3
|
|
TEP
Parent
|
1
|
|
Transaction
Agreements
|
9
|
|
U.S.
Exchange Act
|
9
|
|
Voting
Securities
|
9
|
ii
SHAREHOLDERS
AGREEMENT, dated as of ________, 2011 (this “Agreement”),
between LAN AIRLINES S.A., a company organized under the Law of Chile (“LATAM”),
and TEP Chile S.A., a company organized under the Law of Chile (“TEP” and
together with LATAM, the “Shareholders”
or the “Parties”).
WITNESSETH
WHEREAS,
as of the date of this Agreement Maria Cláudia Oliveira Amaro, Maurício Rolim
Amaro, Noemy Almeida Oliveira Amaro and João Francisco Amaro (all such
individuals, collectively, the “Amaro
Family”)
collectively own 100% of the outstanding shares of TEP;
WHEREAS,
as of the date of this Agreement TAM Empreendimentos e Participações S.A., a
company organized under the Law of Brazil (“TEP
Parent”), is the controlling shareholder of TAM S.A., a company organized
under the Law of Brazil (“TAM”),
under the Law of Brazil and currently owns, directly or indirectly, ordinary
shares and preferred shares of TAM, which collectively constitute [•]% of the
issued and outstanding shares of capital stock of TAM and [•]% of the total
voting power of such capital stock;
WHEREAS,
LATAM, TAM, Costa Verde Aeronáutica S.A., a company organized under the Law of
Chile (“CVA”),
Inversiones Mineras del Cantábrico S.A., a company organized under the Law of
Chile (“IMDC”
and, together with CVA, the “LATAM
Controlling Shareholders”), TEP Parent and the Amaro
Family have entered into an Implementation Agreement, dated as of
January 18, 2011 (the “Implementation
Agreement”), and an Exchange Offer Agreement, dated as of January 18,
2011 (the “Exchange
Offer Agreement”), pursuant to which the outstanding shares of capital
stock of TAM will be acquired by LATAM and [Holdco 1], a newly formed company to
be organized under the Law of Chile (“Holdco
1”), pursuant to the contribution transaction, delisting exchange offer
(the “Exchange
Offer”) and the mergers described therein (collectively, the “Mergers”)
in exchange for shares of common stock, no par value (the “LATAM
Common Stock”), of LATAM;
WHEREAS,
after the Mergers, TEP will own at least 80% of the outstanding voting shares of
Holdco 1 and LATAM will own 100% of the outstanding non-voting shares of Holdco
1, no more than 20% of the outstanding voting shares of Holdco 1 and 100% of the
outstanding preferred shares of TAM;
WHEREAS,
immediately following the consummation of the transactions contemplated by the
Implementation Agreement and the Exchange Offer Agreement and assuming (only for
purposes of calculating the ownership percentages set forth therein) (i) all TAM
shareholders other than TEP fully participate in the Exchange Offer, (ii) none
of the holders of the outstanding shares of LATAM Common Stock exercise their
appraisal rights (derecho a
retiro) under the Law of Chile in respect of the Mergers and (iii) the
only shares of LATAM Common Stock and shares of TAM that will be outstanding
after such consummation are the shares issued in the Mergers and the shares
which are subscribed and fully paid for as of the date of the Implementation
Agreement (which excludes any shares issuable upon future exercises of stock
options), the ownership structure of LATAM, Holdco 1, TAM and their respective
Subsidiaries will be as set forth in Exhibit
A hereto;
WHEREAS,
the Parties desire to enter into this Agreement to set forth their agreements
with respect to governance, management and operation of, and the relationship
among, LATAM, Holdco 1, TAM and their respective Subsidiaries (collectively, the
“LATAM
Group”) and certain other matters;
WHEREAS,
concurrently with the execution and delivery of this Agreement, LATAM, TEP, TAM
and Holdco 1 are entering into a shareholders agreement, dated the date hereof
(the “TAM
Shareholders Agreement”), to set forth their agreement with respect to
the governance, management and operation of TAM and its
Subsidiaries;
WHEREAS,
concurrently with the execution and delivery of this Agreement, LATAM, TEP and
Holdco 1 are entering into a shareholders agreement, dated the date hereof (the
“Holdco 1
Shareholders Agreement”), to set forth their agreement with respect to
the governance, management and operation of Holdco 1;
WHEREAS,
contemporaneously with the execution and delivery of this Agreement, TEP and the
LATAM Controlling Shareholders are entering into a shareholders agreement, dated
the date hereof (the “Control
Group Shareholders Agreement,” and collectively with this Agreement, the
TAM Shareholders Agreement and the Holdco 1 Shareholders Agreement, the “Shareholders
Agreements”), pursuant to which the LATAM Controlling Shareholders, as
the continuing controlling shareholders of LATAM under the Law of Chile, will
make the concessions described therein to TEP;
WHEREAS,
the execution and delivery of this Agreement and the other Shareholders
Agreements are conditions to the commencement of the Exchange Offer and
consummation of the Mergers; and
WHEREAS,
LATAM has determined and declared that the execution and delivery of this
Agreement is in the best interests of LATAM, and the execution, delivery and
performance of this Agreement by LATAM have been duly authorized by the LATAM
Board and all other necessary corporate action on the part of
LATAM.
NOW,
THEREFORE, in consideration of the representations and warranties, covenants and
agreements contained herein and in the Implementation Agreement and the Exchange
Offer Agreement, and for other good and valuable consideration, the receipt of
which is hereby acknowledged, the Parties agree as follows:
2
ARTICLE
I
GOVERNANCE
SECTION
1.01 Scope of the
Agreement; Effective
Time. The Parties desire to set forth in this Agreement, their
agreements with respect to governance, management and operation of, and the
relationship among, LATAM and the other members of the LATAM Group and certain
other matters. In the event of any inconsistency or conflict between the
provisions of this Agreement and the Organizational Documents of Holdco 1,
TAM or any of their Subsidiaries, this Agreement shall control and the Parties
shall use their commercially reasonable efforts to amend any such Organizational
Documents to conform to the provisions of this Agreement and to exercise their
rights under such Organizational Documents to give effect to such
provisions. The Parties agree that the specific provisions of this
Agreement shall not be limited by any inconsistent or conflicting provisions of
the by-laws of LATAM and accordingly, as between parties, such specific
provisions shall prevail over such provisions of the by-laws of LATAM.
This Agreement shall become effective only if, and at that time at which, Holdco
1 becomes a holder of at least 80% of the outstanding ordinary shares of TAM
(the “Effective
Time”). All actions required to be taken or performed under this
Agreement shall be taken or performed in accordance with applicable
Law.
SECTION
1.02 Composition of the LATAM
Board.
TEP agrees that it will take all necessary action to ensure that at all times
any individual who is a member of the board of directors of LATAM (the “LATAM
Board”) and who was elected by it or designated to the LATAM Controlling
Shareholders by it for such election and elected by it and/or the LATAM
Controlling Shareholders (each, a “TEP
Director”) shall also be a member of the board of directors of each of
Holdco 1 and TAM. In the event of any vacancy on the board of directors of
Holdco 1 (the “Holdco 1
Board”) or the board of directors of TAM (the “TAM
Board” and, together with the Holdco 1 Board, the “Holdco 1
Group Boards”)”)
resulting from the resignation, incapacity, retirement, death or removal (each,
a “Departure”)
of any member of such Holdco 1 Group Board who is a TEP Director, TEP shall
cause such TEP Director to resign from the LATAM Board within five calendar days
after the occurrence of such Departure, and the LATAM Board shall replace such
TEP Director with an individual designated by TEP who shall serve on the LATAM
Board until the next annual meeting of the shareholders of LATAM.
SECTION
1.03 Chairman of LATAM
Board.
Until the second anniversary of the Effective Time (the “Second
Anniversary”), the chairman of the LATAM Board (the “LATAM
Chairman”) shall be Maurício Rolim Amaro. If there is a Departure
of the LATAM Chairman prior to the Second Anniversary, then the LATAM Board
shall appoint another TEP Director selected by TEP to serve as the LATAM
Chairman. On and after the Second Anniversary, the LATAM Board shall
appoint any of its members as the LATAM Chairman from time to time in accordance
with the Organizational Documents of LATAM.
SECTION
1.04 LATAM
Committees.
(a) Promptly following the Effective Time, the LATAM Board shall
establish the following four committees to review, discuss and make
recommendations to the LATAM Board (each, a “LATAM
Board Committee”):
(i) A
Strategy Committee, which shall focus on (A) corporate strategy (e.g., vision, mission, business
portfolio and relative priorities/resource allocation, mergers, acquisitions and
divestures); (B) current strategic issues (e.g., global crisis and
short-term capacity strategy, acquisitions of direct competitors, etc.); and (C)
the three-year plans and budgets for the main business units and functional
areas and high-level competitive strategy reviews;
3
(ii) a
Leadership Committee, which shall focus on (A) culture and values; (B) people
policies; (C) high-level organizational structure; (D) appointment of the
chief executive officer (Vice
Presidente Ejecutivo) of LATAM (the “LATAM
CEO”) and his or her other reports; (E) corporate compensation philosophy
(e.g., role of variable
compensations, scope of stock option/grant program, etc.); (F) compensation
structures and levels for the LATAM CEO and other key executives; (G) annual
variable compensation structure and targets for the LATAM CEO and other key
executives; (H) succession or contingency planning for the LATAM CEO; and (I)
performance assessment of the LATAM CEO;
(iii) a
Finance Committee, which shall focus on (A) financial policies and strategy; (B)
capital structure; (C) monitoring policy compliance; (D) tax optimization
strategy; and (E) the quality and reliability of financial information;
and
(iv) a
Brand, Product and Frequent Flyer Program Committee, which shall focus on
(A) brands strategies and brand building initiatives for the corporate and
main business unit brands (e.g., imaging, key messages and
brand voice); (B) the main characteristics of products and services for each of
the main business units; (C) Frequent Flyer Program strategy and key program
features; and (D) regular audit of brand performance.
(b) Each
of the LATAM Board Committees shall be comprised of two or more members of the
LATAM Board, at least one of whom shall be a TEP Director at all times when TEP
is entitled to elect, and elects, at least one TEP Director. No LATAM
Board Committee shall have authority to approve any matters required to be
approved by the LATAM Board pursuant to the Organizational Documents of LATAM or
under applicable Law, which approval authority shall rest solely with the LATAM
Board, unless and to the extent such authority is expressly delegated by it as
permitted by applicable Law.
SECTION
1.05 Roles of the LATAM CEO, the
LATAM COO and the TAM CEO.
(a) LATAM CEO. The
LATAM CEO shall be Enrique Cueto as of the Effective Time. After any
departure of the LATAM CEO and receipt of the recommendation of the Leadership
Committee, the LATAM Board shall appoint a new LATAM CEO in accordance with the
Organizational Documents of LATAM. The LATAM CEO will be the highest
ranked officer of the LATAM Group and shall report directly to the LATAM
Board. The LATAM CEO shall have general supervision, direction and control
of the business of the LATAM Group; provided that the LATAM COO
and the TAM CEO shall have the responsibilities set forth in Sections 1.05(b)
and (c), respectively. The LATAM CEO shall carry out all orders and
resolutions of the LATAM Board. Without limitation of the foregoing, the
LATAM CEO shall have the following responsibilities:
4
(i) conducting
the day-to-day management of the LATAM Group;
(ii) leading
LATAM’s efforts to combine LATAM and its Subsidiaries and TAM and its
Subsidiaries and to achieve synergies among them;
(iii) defining
and proposing strategies for the LATAM Group and ensuring due execution of
business plans;
(iv) ensuring
performance of the LATAM Group executive teams;
(v) together
with the LATAM Chairman and the chief financial officer of LATAM representing
the LATAM Group before all major external stakeholders, all Governmental
Entities, the International Air Transport Association (IATA), alliances and
investors; and
(vi) serving
as a senior participant in all business unit and function committees of the
LATAM Group.
(b) LATAM COO. The
president and chief operating officer (Gerente General) of LATAM
(the “LATAM
COO”) shall be Ignacio Cueto as of the Effective Time. After any
Departure of the LATAM COO, a new LATAM COO shall be appointed by the LATAM
CEO. The LATAM COO shall report directly to the LATAM CEO and shall have
general supervision, direction and control of the passenger and cargo operations
of the LATAM Group, excluding those conducted by (x) Holdco 1, TAM and their
Subsidiaries, excluding the international passenger business of the LATAM Group
(collectively, the “Holdco 1
Group”) and (y) the international passenger business of the LATAM
Group. Without limitation of the foregoing, the LATAM COO shall have the
following responsibilities:
(i) conducting
the day-to-day management of all cargo operations and operations of the LATAM
Group;
(ii) together
with the TAM CEO, recommending a candidate to the LATAM CEO to serve as the head
of the international passenger business of the LATAM Group (including both long
haul and regional operations), who shall report jointly to the LATAM
COO and the TAM CEO;
(iii) coordinating
between cargo and international;
(iv) together
with the TAM CEO and the LATAM CEO, implementing the integration of LATAM and
its Subsidiaries and TAM and its Subsidiaries; and
5
(v) serving
as a senior participant in all business unit and function committees of the
LATAM Group.
(c) TAM CEO. As of
the Effective Time, Marco Bologna will be the chief executive officer (Diretor Presidente) of the
Holdco 1 Group (the “TAM
CEO”). The TAM CEO shall have general supervision, direction and
control of the business and operations of Holdco 1 Group and shall carry out all
orders and resolutions of the Holdco 1 Board and the TAM Board. Without
limitation of the foregoing, the TAM CEO shall have the following
responsibilities:
(i) conducting
the day-to-day management of the Holdco 1 Group;
(ii) serving
as the company officer of the Holdco 1 Group and as the representative of the
LATAM Group before all Governmental Entities in Brazil, including the Brazilian
government and National Civil Aviation Agency of Brazil (Agência Nacional de
Aviação, or ANAC);
(iii) together
with the LATAM COO, recommending a candidate to the LATAM CEO for appointment as
the head of international passenger business of the LATAM Group (including both
long haul and regional operations), who shall report jointly to the LATAM COO
and the TAM CEO;
(iv) together
with the LATAM CEO and the LATAM COO, implementing the integration of LATAM and
its Subsidiaries and TAM and its Subsidiaries; and
(v) serving
as a senior participant in all business unit and function committees of the
LATAM Group.
SECTION
1.06 Recommendations to
Shareholders of LATAM.
If (a) TEP and the LATAM Controlling Shareholders cannot reach agreement on any
matter to be submitted to a vote of the shareholders of LATAM at any meeting of
the shareholders of LATAM (other than an action that would require the approval
of two-thirds of the shareholders of LATAM under Article 67 of the Chilean
Corporations Act (Ley Sobre
Sociedades Anónimas) (each, a “Supermajority
Action”) prior to such meeting
of the shareholders of LATAM or (b) any shareholder of LATAM (other than TEP and
the LATAM Controlling Shareholders) requests that any matter other than a
Supermajority Action be submitted to a vote of the shareholders of LATAM at any
meeting of the shareholders of LATAM, then, in either such case, upon written
request of TEP or the LATAM Controlling Shareholders (which shall be third-party
beneficiaries for purposes of this Section 1.06), the LATAM Board will consider
and make a proposal to the shareholders of LATAM with respect to such matter
prior to such shareholder meeting.
SECTION
1.07 Other Key Executives of the
LATAM Group.
The key executives of the LATAM Group (excluding the LATAM CEO and those in the
Holdco 1 Group) shall be appointed by, and shall report, directly or indirectly,
to the LATAM CEO. In making such appointments, the LATAM CEO shall be
guided by the following principles: (a) alignment with the strongest
performing leader, i.e., the best of breed;
(b) maximization of synergy value capture; (c) conforming to local
regulations and culture; and (d) simplest and easiest execution.
6
SECTION
1.08 Group
Structure.
The organizational structure of the LATAM Group shall be in substantially the
form set forth in Exhibit
A attached hereto, as it may be amended or modified by the Parties from
time to time.
SECTION
1.09 Further Action;
Efforts.
For the benefit of TEP, LATAM agrees to take all necessary action to implement
the agreements with respect to the management and governance of LATAM set forth
in Sections 1.03 through 1.08.
ARTICLE
II
GENERAL
PROVISIONS
SECTION
2.01 Term of
Agreement.
Except as otherwise provided under applicable Law, this Agreement shall continue
in effect as to each of the Parties until (i) it is terminated as to any Party
by the written consent of all the Parties or (ii) with respect to any
Shareholder, the first day on which such Shareholder no longer beneficially owns
any shares of LATAM Common Stock, whichever is sooner to occur. The
termination of this Agreement as to any Shareholder shall not affect any of the
rights and obligations of any of the other Parties with respect to each
other. In the event that this Agreement terminates as to any Shareholder,
thereafter such Shareholder shall have no further liability to the other Parties
or to any of their respective shareholders, directors, officers, employees or
other Affiliates and such other Parties shall have no further liability to such
Shareholder, in each case solely in respect of this Agreement; provided, however, that the foregoing
shall not apply to any provisions hereof that expressly survive the termination
of this Agreement (including Section 2.02); and provided, further, that nothing herein
shall relieve any Party of any liability for any breach of this Agreement that
occurred prior to such termination.
SECTION
2.02 Fees and
Expenses.
All fees and expenses incurred in connection with this Agreement shall be paid
by the Party incurring such fees or expenses. The provisions of this
Section 2.02 shall survive any termination of this Agreement.
SECTION
2.03 Governing
Law.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES
THEREOF; PROVIDED, HOWEVER, THAT NOTWITHSTANDING
THE FOREGOING THE AUTHORIZATION AND EXECUTION OF THIS AGREEMENT BY EACH PARTY
SHALL BE GOVERNED BY THE LAW OF ITS JURISDICTION OF INCORPORATION.
SECTION
2.04 Definitions.
For the purposes of this Agreement, the following terms shall have the meanings
assigned below:
(a)
“Affiliate”
shall have the meaning assigned to such term in Rule 12b-2 under the U.S.
Exchange Act; provided,
however, that no
Shareholder shall be deemed to be an Affiliate of any other Shareholder or any
of its Affiliates solely by reason of this Agreement.
7
(b) “beneficial
ownership” (and its correlative phrases) shall have the meanings assigned
to such phrases in Rule 13d-3 promulgated under the U.S. Exchange Act (without
taking into account any rights of such Person or any of its Affiliates under
Section 2.04 hereof) if the references to “within 60 days” in Rule
13d-3(d)(1)(i) were omitted. For all purposes of this Agreement, a
Shareholder shall be deemed to beneficially own all shares of LATAM Common Stock
beneficially owned by it and its Affiliates, including the beneficial owners of
such Shareholder.
(c) “business
day” shall mean any day that is not a Saturday, Sunday or a day on which
banking institutions are required or authorized by Law or executive order to be
closed in Santiago, Chile or São Paulo, Brazil.
(d)
“Control” (and its correlative
terms) shall have the meanings assigned to such terms in Rule 12b-2
promulgated under the U.S. Exchange Act.
(e) “Governmental
Entity” means any governmental, quasi-governmental or regulatory
authority, body, department, commission, board, bureau, agency, division, court,
organized securities exchange or other legislative, executive or judicial
governmental entity or instrumentality of any country, nation, republic,
federation or similar entity or any state, county, parish or municipality,
jurisdiction or other political subdivision thereof.
(f) “Law”
means any statute, common law, ordinance, rule, regulation, agency requirement
or Order of, or issued, promulgated or entered into by or with, any Governmental
Entity.
(g) “Order”
means any order, decision, writ, injunction, decree, judgment, legal or
arbitration award, stipulation, license, permit or agreement issued, promulgated
or entered into by or with (or settlement or consent agreement subject to) any
Governmental Entity.
(h) “Organizational
Documents” shall mean (i) with respect to Holdco 1, this Agreement, the
Holdco 1 Shareholders Agreement and the by-laws of Holdco 1, (ii) with
respect to LATAM, this Agreement, the Control Group Shareholders Agreement and
the by-laws or other comparable governing documents of LATAM and (iii) with
respect to TAM and its Subsidiaries, this Agreement, the TAM Shareholders
Agreement, the Holdco 1 Shareholders Agreements and the by-laws or other
comparable governing documents of such Persons.
(i) “Person”
means any natural person, firm, corporation, partnership, company, limited
liability company, joint venture, association, trust, unincorporated
organization, Governmental Entity or other entity.
8
(j)
“Subsidiary”
means, with respect to any Person, (i) a corporation in which such Person,
together with its Subsidiaries, beneficially owns Voting Securities of such
corporation which entitle them, collectively, to cast more than 50% of all the
votes entitled to be cast by the holders of all Voting Securities of such
corporation then outstanding in a general election of directors of such
corporation or (ii) any Person that is not a corporation in which such Person,
and/or one or more other Subsidiaries of such Person, directly or indirectly,
has a majority equity or voting interest or the power to direct the policies,
management and affairs thereof.
(k) “Transaction
Agreements” means this Agreement, the Implementation Agreement, the
Exchange Offer Agreement and the other Shareholders Agreements.
(l) “U.S.
Exchange Act” shall mean the U.S. Securities Exchange Act of
1934.
(m) “Voting
Securities” means, with respect to any Person, any securities or other
equity or ownership interests in such Person which are entitled to vote
generally in the election of directors of such Person (or, if such Person is not
a corporation, the individuals who perform a similar function for such
Person).
SECTION
2.05 Severability.
The provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity or
enforceability of the other provisions of this Agreement. If any provision
of this Agreement, or the application of such provision to any Person or any
circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other Persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application of
such provision, in any other jurisdiction.
SECTION
2.06 Amendment;
Waiver.
This Agreement may be amended and any performance, term or condition waived in
whole or in part only by a writing signed by all Parties affected by the
amendment (in the case of an amendment) or by the Party against whom the waiver
is to be effective (in the case of a waiver). No failure or delay by any
Party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any singular partial exercise of such right, power or
privilege preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. Waiver by any Party of any breach or
failure to comply with any provision of this Agreement by another Party shall
not be construed as, nor shall constitute, a continuing waiver of such
provisions, or a waiver of any other breach of or failure to comply with any
other provisions of this Agreement.
SECTION
2.07 Assignment.
Subject to the provisions of the Holdco 1 Shareholders Agreement and the Control
Group Shareholders Agreement, neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned, in whole or in part, by
operation of Law or otherwise by any of the Parties without the prior written
consent of the other Parties, and any purported assignment without such consent
shall be null and void and of no force or effect. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of, and be
enforceable by, the Parties and their respective successors and permitted
assigns.
9
SECTION
2.08 Entire Agreement; No
Third-Party Beneficiaries.
(a) This
Agreement and the other Transaction Agreements, including the Exhibits and
Schedules hereto and thereto, constitute the entire agreement, and supersede all
prior agreements and understandings, both written and oral, among the Parties
with respect to the subject matter hereof and thereof.
(b) Except
as otherwise expressly stated herein, the Parties hereby agree that the
agreements and covenants set forth herein are solely for the benefit of the
other Parties in accordance with, and subject to the terms of, this Agreement
and that this Agreement is not intended to, and does not, confer upon any Person
other than the Parties any rights or remedies hereunder, including the right to
rely upon the representations and warranties set forth herein.
SECTION
2.09 Notices.
All notices, requests, claims, demands, instructions and other communications or
documents given hereunder shall be in writing and shall be delivered personally
or sent by registered or certified mail (postage prepaid), facsimile or
overnight courier to the Parties at the following addresses (or at such other
address for a Party as shall be specified by like notice):
If to
LATAM, to:
Claro y
Cia.
Apoquindo
3721, piso 13,
Santiago,
Chile
Attention:
José María Eyzaguirre B.
Fax: +56
2 367 3003
jmeyzaguirre@claro.cl
with
copies (which shall not constitute notice) to:
Sullivan
& Cromwell LLP
125 Broad
Street
New York,
NY 10004
United
States of America
Attention:
Sergio Galvis and Duncan McCurrach
Fax: +1
212 558 3588
galviss@sullcrom.com
mccurrachd@sullcrom.com
10
If to TEP
to:
Turci
Advogados
Rua Dr.
Renato Paes de Barros, 778
-1◦ andar
– cj.12
04530-0001
São Paulo
– SP
Brasil
Attention:
Flavia Turci
Fax: +55
11 2177 2197
turci@turci.com
with a
copy (which shall not constitute notice) to:
Clifford
Chance US LLP
31 West
52nd Street
New York,
NY 10019
Attention:
Sarah Jones and Anand Saha
Fax: +1
212 878 8375
Sarah.Jones@CliffordChance.com
Anand.Saha@CliffordChance.com
Any
notice, request, claim, instruction or other communication or document given as
provided above shall be deemed given to the receiving party (i) if delivered
personally, upon actual receipt, (ii) if sent by registered or certified mail,
three business days after deposit in the mail, (iii) if sent by facsimile, upon
confirmation of successful transmission if within one business day after such
facsimile has been sent such notice, request, claim, instruction or other
communication or document is also given by one of the other methods described
above and (iv) if sent by overnight courier, on the next business day after
deposit with the overnight courier.
SECTION
2.10 Specific Enforcement;
Consent to Jurisdiction.
The Parties agree that irreparable damage would occur and that the Parties would
not have any adequate remedy at Law in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the Parties shall
be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions of this
Agreement, this being in addition to any other remedy to which they are entitled
at Law or in equity, without the necessity of proving the inadequacy of monetary
damages or of posting bond or other undertaking, as a remedy and to obtain
injunctive relief against any breach or threatened breach hereof. In the
event that any Action is brought in equity to enforce the provisions of this
Agreement, no Party shall allege, and each Party waives the defense or
counterclaim that there is an adequate remedy at Law. Each of the Parties
hereby irrevocably consents and submits itself to the personal jurisdiction of
the courts of the State of New York and the federal courts of the United States
of America located in the Borough of Manhattan, The City of New York
(collectively, the “Agreed
Courts”) solely in respect of the interpretation and enforcement of the
provisions of this Agreement, and the documents referred to herein and the
transactions contemplated by this Agreement (collectively, the “Agreed
Issues”), waives, and agrees not to assert, as a defense in any Action,
suit or proceeding in an Agreed Court with respect to the Agreed Issues that
such Party is not subject thereto or that such Action, suit or proceeding may
not be brought or is not maintainable in such Agreed Court or that the venue
thereof may not be appropriate or that this Agreement or any such document may
not be enforced in or by such Agreed Court, and the Parties irrevocably agree
that all claims with respect to any Action, suit or proceeding with respect to
the Agreed Issues shall be heard and determined only in an Agreed Court.
The Parties hereby consent to and grant to each Agreed Court jurisdiction over
the Person of such parties and, to the extent permitted by Law, over the subject
matter of any dispute with respect to the Agreed Issues and agree that mailing
of process or other papers in connection with any such Action or proceeding in
the manner provided in Section 2.09 or in such other manner as may be permitted
by Law shall be valid and sufficient service thereof.
11
SECTION
2.11 WAIVER OF JURY
TRIAL.
EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER
THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO
(I) CERTIFIES THAT IT HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER AND
MADE IT VOLUNTARILY AND THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT,
IN THE EVENT OF ANY ACTION, SUIT OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (II) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER
AND CERTIFICATIONS IN THIS SECTION 2.11.
SECTION
2.12 Counterparts.
This Agreement may be executed in one or more counterparts (including by
facsimile), each of which shall be considered an original instrument and all of
which shall together constitute the same agreement. This Agreement shall
become effective when one or more counterparts have been signed by each of the
Parties and delivered to the other Parties.
12
SECTION
2.13 Interpretation.
When a reference is made in this Agreement to an Article, Section, Exhibit or
Schedule, such reference shall be to an Article of, a Section of, or an Exhibit
or Schedule to this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words “include,” “includes” or “including” are
used in this Agreement, they shall be deemed to be followed by the words
“without limitation”. The words “hereof,” “herein” and “hereunder” and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement. All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein. The definitions
contained in this Agreement are applicable to the singular as well as the plural
forms of such terms and to the masculine as well as to the feminine and neuter
genders of such terms. Any contract, instrument or Law defined or referred
to herein or in any contract or instrument that is referred to herein means such
contract, instrument or Law as from time to time amended, modified or
supplemented, including (in the case of contracts or instruments) by waiver or
consent and (in the case of Laws) by succession of comparable successor Law and
references to all attachments thereto and instruments incorporated
therein. References to a Person are also to its permitted successors and
assigns. Except as otherwise expressly provided herein, all remedies
provided herein shall be in addition to any other remedies that the Parties may
otherwise have under applicable Law. Any reference in this Agreement to a
“day” or a number of “days” (without the explicit qualification of “business”)
shall be interpreted as a reference to a calendar day or number of calendar
days. This Agreement is the product of negotiation by the Parties having
the assistance of counsel and other advisers, and the Parties and their counsel
and other advisers having participated jointly in negotiating and drafting this
Agreement. If an ambiguity or a question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the Parties,
and no presumption or burden of proof shall arise favoring or disfavoring any
Party by virtue of the authorship of any provision of this
Agreement.
SECTION
2.14 Filing
Requirement. A
copy of this Agreement shall be filed at the headquarters of LATAM for all
purposes of applicable Law.
13
IN
WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed by
their respective officers thereunto duly authorized as of the date first above
written.
|
LAN
AIRLINES S.A.
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
|
TEP
CHILE S.A.
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
EXHIBIT
A
LATAM
Group Ownership Structure and Organizational Structure
A-1
Exhibit
99.7
FORM OF
EXECUTION VERSION
|
|
|
SHAREHOLDERS
AGREEMENT
Among
LAN
AIRLINES S.A.,
TEP
CHILE S.A.,
and
[HOLDCO
1]
Dated
as of ______, 2011
|
|
|
TABLE
OF CONTENTS
|
Page
|
||
|
ARTICLE
I
|
||
|
GOVERNANCE
OF HOLDCO 1
|
||
|
Section
1.01
|
Scope
of the Agreement
|
2
|
|
Section
1.02
|
Formation
of Holdco 1
|
2
|
|
Section
1.03
|
Role
and Composition of the Holdco 1 Board
|
2
|
|
Section
1.04
|
Removal
and Vacancies
|
2
|
|
Section
1.05
|
Enabling
Provisions
|
3
|
|
Section
1.06
|
Holdco
1 Chairman
|
4
|
|
Section
1.07
|
Meetings
of the Holdco 1 Board
|
4
|
|
Section
1.08
|
Quorum
|
4
|
|
Section
1.09
|
Holdco
1 Board Voting Requirements
|
5
|
|
Section
1.10
|
Board
Supermajority Matters
|
5
|
|
Section
1.11
|
Shareholder
Required Vote
|
6
|
|
Section
1.12
|
Shareholder
Supermajority Matters
|
6
|
|
Section
1.13
|
Required
Actions
|
7
|
|
Section
1.14
|
Management
of Holdco 1
|
7
|
|
ARTICLE
II
|
||
|
ACCOUNTING,
BOOKS AND RECORDS
|
||
|
Section
2.01
|
Fiscal
Year
|
8
|
|
Section
2.02
|
Accountants
|
8
|
|
Section
2.03
|
Books
and Records
|
8
|
|
Section
2.04
|
Access
to Information, Audit and Inspection
|
9
|
|
Section
2.05
|
Annual
Budget and Business Plan
|
9
|
|
ARTICLE
III
|
||
|
TRANSFERS
AND CONVERSION OF STOCK
|
||
|
Section
3.01
|
Restrictions
on Certain Transfers
|
10
|
|
Section
3.02
|
Ownership
Control Events
|
12
|
|
ARTICLE
IV
|
||
|
GENERAL
PROVISIONS
|
||
|
Section
4.01
|
Term
of Agreement
|
13
|
|
Section
4.02
|
Fees
and Expenses
|
13
|
|
Section
4.03
|
Governing
Law
|
13
|
|
Section
4.04
|
Definitions
|
13
|
|
Section
4.05
|
Severability
|
16
|
|
Section
4.06
|
Amendment;
Waiver
|
16
|
|
Section
4.07
|
Assignment
|
17
|
|
Section
4.08
|
No
Third-Party Beneficiaries
|
17
|
|
Section
4.09
|
After-Acquired
Holdco 1 Voting Stock
|
17
|
|
Section
4.10
|
Notices
|
17
|
|
Section
4.11
|
Specific
Enforcement; Consent to Jurisdiction
|
19
|
|
Section
4.12
|
WAIVER
OF JURY TRIAL
|
19
|
|
Section
4.13
|
Counterparts
|
19
|
|
Section
4.14
|
Interpretation
|
20
|
|
Section
4.15
|
Filing
Requirement.
|
20
|
|
Exhibit A
|
LATAM
Group Ownership Structure and Organizational Structure
|
|
|
Exhibit B
|
By-laws
of Holdco
1
|
|
iii
INDEX OF DEFINED
TERMS
|
Page
|
|
|
Accountants
|
8
|
|
Actions
|
14
|
|
Adverse
Effect
|
10
|
|
Affiliate
|
14
|
|
Agreed
Courts
|
19
|
|
Agreed
Issues
|
19
|
|
Agreement
|
1
|
|
beneficial
ownership
|
14
|
|
Block
Sale
|
10
|
|
Board
Supermajority Matter
|
5
|
|
business
day
|
14
|
|
Call
Option
|
13
|
|
contract
|
14
|
|
Control
|
14
|
|
Control
Group Shareholders Agreement
|
14
|
|
Conversion
Option
|
12
|
|
Convertible
Securities
|
14
|
|
Director
Election Notice
|
12
|
|
Director
Representatives
|
2
|
|
Dividend
Rights
|
15
|
|
Effective
Time
|
2
|
|
Equity
Securities
|
14
|
|
Fiscal
Year
|
8
|
|
Forced
Vote Sale
|
11
|
|
Forced
Vote Sale Period
|
11
|
|
Full
Conversion Date
|
10
|
|
Full
Ownership Conversion Date
|
12
|
|
Governmental
Entity
|
14
|
|
Holdco
1
|
1
|
|
Holdco
1 Board
|
2
|
|
Holdco
1 By-Laws
|
2
|
|
Holdco
1 CEO
|
7
|
|
Holdco
1 Chairman
|
4
|
|
Holdco
1 Non-Voting Stock
|
15
|
|
Holdco
1 Plans
|
9
|
|
Holdco
1 Stock
|
1
|
|
Holdco
1 Voting Stock
|
15
|
|
IFRS
|
8
|
|
LATAM
|
1
|
|
LATAM
Board
|
1
|
|
LATAM
Common Stock
|
11
|
|
LATAM
Restricted Shares
|
11
|
|
LATAM
Shares
|
10
|
|
Law
|
15
|
|
Limited
Voting Rights
|
15
|
|
Order
|
15
|
|
Organizational
Documents
|
15
|
|
Ownership
Notice
|
12
|
|
Parties
|
1
|
|
Person
|
15
|
|
Related
Party
|
15
|
|
Release
Event
|
11
|
|
Representatives
|
16
|
|
Second
Meeting Date
|
11
|
|
Shareholder
Supermajority Matter
|
6
|
|
Shareholders
|
1
|
|
Subsidiary
|
16
|
|
Supermajority
Board Vote
|
5
|
|
Supermajority
Shareholder Vote
|
6
|
|
TAM
|
1
|
|
TAM
Board
|
2
|
|
TAM
Chairman
|
3
|
|
TAM
Ordinary Stock
|
1
|
|
TAM
Preferred Stock
|
1
|
|
TAM
Stock
|
1
|
|
Tax
Return
|
9
|
|
Tenth
Anniversary
|
10
|
|
TEP
|
1
|
|
Transfer
|
10
|
|
U.S.
Exchange Act
|
16
|
|
Voting
Securities
|
16
|
iv
SHAREHOLDERS
AGREEMENT, dated as of ________, 2011 (this “Agreement”),
among LAN AIRLINES S.A., a company organized under the Law of Chile (“LATAM”),
TEP Chile S.A., a company organized under the Law of Chile (“TEP” and
together with LATAM, the “Shareholders”),
and [HOLDCO1], a company organized under the Law of Chile (“Holdco 1”
and, together with the Shareholders, the “Parties”).
WITNESSETH
WHEREAS,
as of the date of this Agreement Maria Cláudia Amaro, Maurício Amaro, Noemy
Amaro and João Francisco Amaro collectively own 100% of the outstanding shares
of TEP;
WHEREAS,
TAM Empreendimentos E Participações S.A., a Brazilian corporation, is the
controlling shareholder of TAM S.A., a company organized under the Law of Brazil
(“TAM”),
under the Law of Brazil and currently owns, directly or indirectly, shares of
the ordinary stock, no par value (the “TAM
Ordinary Stock”), of TAM and shares of the non-voting preferred stock, no
par value (the “TAM
Preferred Stock” and, together with the TAM Ordinary Stock, the “TAM
Stock”), of TAM, which collectively constitute [•]% of the issued and
outstanding shares of capital stock of TAM and [•]% of the total voting power of
such capital stock;
WHEREAS,
as of the Effective Time, TEP will own at least 80% of the outstanding shares of
Holdco 1 Voting Stock and LATAM will own 100% of the outstanding shares of
Holdco 1 Non-Voting Stock, no more than 20% of the outstanding shares of Holdco
1 Voting Stock and 100% of the outstanding TAM Preferred Stock, as reflected in
the ownership structure chart attached as Exhibit A
hereto;
WHEREAS,
TEP, as the continuing controlling shareholder of TAM under the Law of Brazil as
of the Effective Time by virtue of its indirect ownership of at least 80% of the
issued and outstanding shares of Holdco 1 Voting Stock and Holdco 1’s ownership
of at least 85.3457% of the issued and outstanding shares of TAM Ordinary Stock,
desires to make the concessions to LATAM provided herein, and the Parties desire
to enter into this Agreement to set forth the terms and conditions upon which
they have agreed to hold their shares of Holdco 1 Voting Stock and Holdco 1
Non-Voting Stock (collectively, the “Holdco 1
Stock”), including with respect to the disposition and voting thereof, as
well as their agreements with respect to governance, management and operation
of, and the relationship among, Holdco 1 and its Subsidiaries and certain other
matters; and
WHEREAS,
LATAM has determined and declared that the execution and delivery of this
Agreement is in the best interests of LATAM, and the execution, delivery and
performance of this Agreement by LATAM have been duly authorized by the board of
directors of LATAM (the “LATAM
Board”) and all other necessary corporate action on the part of
LATAM.
NOW,
THEREFORE, in consideration of the representations and warranties, covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt of which is hereby acknowledged, the Parties agree as
follows:
ARTICLE
I
GOVERNANCE
OF HOLDCO 1
SECTION
1.01 Scope of the
Agreement; Effective
Time. The Parties desire to set forth in this Agreement certain
terms and conditions upon which they have agreed to hold their shares of
Holdco 1 Stock, including with respect to disposition and voting thereof,
as well as their agreements with respect to governance, management and operation
of, and the relationship among, Holdco 1 and its Subsidiaries and certain other
matters. In the event of any inconsistency or conflict between the
provisions of this Agreement and the other Organizational Documents of
Holdco 1 or any of its Subsidiaries, this Agreement shall control and the
Parties shall use their commercially reasonable efforts to amend any such
Organizational Documents to conform to the provisions of this Agreement and to
exercise their rights under such Organizational Documents to give effect to such
provisions. This Agreement shall become effective only if, and at that
time at which, Holdco 1 becomes a holder of at least 80% of the outstanding
shares of TAM Ordinary Stock (the “Effective
Time”). All actions required to be taken or performed under this
Agreement shall be taken or performed in accordance with applicable
Law.
SECTION
1.02 Formation of Holdco
1.
Prior to the date of this Agreement, TEP and LATAM incorporated Holdco 1 as
a closed sociedad
anónima under the Law of Chile with the by-laws in the form attached as
Exhibit
B hereto (the “Holdco 1
By-Laws”) for the sole purpose of owning the shares of TAM Ordinary Stock
to be contributed by TEP. From and after the Effective Time, the parties
agree that all acquisitions of TAM Ordinary Stock by any member of the LATAM
Group shall be made by Holdco 1.
SECTION
1.03 Role and Composition of the
Holdco 1 Board.
The business and affairs of Holdco 1 shall be managed under the direction of the
board of directors of Holdco 1 (the “Holdco 1
Board”) in accordance with the applicable provisions of the
Organizational Documents of Holdco 1. At all times, the Holdco 1
Board shall be comprised of the same number of directors as the number of
directors that then comprise the board of directors of TAM (the “TAM
Board”) and the directors of Holdco 1 shall be the same individuals that
then are directors of TAM. The Holdco 1 Board shall be comprised of six
directors and initially LATAM shall have the right to elect two individuals to
the Holdco 1 Board and TEP shall have the right to elect four individuals to the
Holdco 1 Board. Whenever LATAM or TEP so elects or appoints any individual as a
director of Holdco 1, it will select, and Holdco 1 will elect or appoint, the
same individual as a director of TAM. Each person so elected by LATAM or
TEP as a director of Holdco 1 is referred to herein as one of such Shareholder’s
“Director
Representatives”). The term of office for the directors of the
Holdco 1 Board shall be two years.
SECTION
1.04 Removal and
Vacancies.
In the event of any vacancy on the Holdco 1 Board resulting from the
resignation, incapacity, retirement, death or removal of any Director
Representative of any Shareholder, such Shareholder shall have the right to
designate another individual to replace such Director Representative on the
Holdco 1 Board. In such event, the Shareholders shall cause their Director
Representatives to request that the Holdco 1 Chairman call a special meeting of
the Holdco 1 Board in order to appoint such designee to the Holdco 1 Board and
to serve until the next annual meeting of the shareholders of Holdco 1 and at
such meeting shall cause their Director Representatives to make such
appointment. At the same time, LATAM and TEP shall cause their Director
Representatives in their capacity as directors of TAM to request that the
chairman of the TAM Board (the “TAM
Chairman”) call a special meeting of the shareholders of TAM to elect
such designee to the TAM Board and Holdco 1 shall elect such designee to the TAM
Board to serve until the next annual meeting of the shareholders of TAM.
If at any time any Director Representative of any Shareholder ceases to be a
member of the TAM Board, such Shareholder shall promptly cause him or her to
resign or to be removed from the Holdco 1 Board and the Shareholders will
replace such Director Representative on the Holdco 1 Board pursuant to the
foregoing procedures.
2
SECTION
1.05 Enabling
Provisions.
(a) Each
Shareholder agrees that it shall vote, or cause to be voted or execute written
consents for, as the case may be, all shares of Holdco 1 Voting Stock
beneficially owned by it, and each Party shall take all other action reasonably
necessary (including by causing Holdco 1 or TAM to call a special meeting of
shareholders or the Holdco 1 Chairman or the TAM Chairman to call a special
meeting of the Holdco 1 Board or the TAM Board, as applicable) so as to give
effect to the agreements with respect to representation on the Holdco 1 Board
and the TAM Board contained in this Article I and to ensure that the other
Organizational Documents of Holdco 1 and TAM (i) facilitate, enable and do not
at any time conflict with any provision of this Agreement and (ii) permit each
Shareholder to receive the full benefits to which each Shareholder is entitled
under this Agreement. Each Party further agrees that it shall not take any
action directly as a shareholder of Holdco 1 or TAM, indirectly through any
of its Director Representatives as members of the Holdco 1 Board or the TAM
Board, or otherwise that would contravene or frustrate the implementation of
these agreements, and that it shall cause all of its Director Representatives as
members of the Holdco 1 Board or the TAM Board to act at all times in conformity
with, and to take such action as may reasonably be required of and available to
them to ensure the fulfillment of, the terms of this Agreement and the other
Organizational Documents of Holdco 1 and TAM. Holdco 1 agrees not to
take, or to cause or permit TAM to take, any action that would conflict with or
subvert the operation or enforcement of any provision of this Agreement or that
would impede any Shareholder’s ability to receive the full benefits to which
such Shareholder is entitled under this Agreement.
(b) Each
Shareholder shall cause any and all shares of Holdco 1 Voting Stock beneficially
owned by it and entitled to vote at any meeting of shareholders of Holdco 1 to
be present in person or represented by proxy at all annual and special meetings
of shareholders of Holdco 1 to the extent necessary so that all shares of Holdco
1 Voting Stock beneficially owned by it shall be counted as present for the
purpose of determining the presence of a quorum at such meeting. Each
Shareholder further agrees to execute from time to time in the future any
document or documents required by Law to keep the agreements contained in this
Section 1.05 in full force and effect at all times throughout the term of this
Agreement. Each Shareholder agrees that it will take all necessary actions
(including amending the Holdco 1 By-Laws) to effect and implement any stock
splits or reverse stock splits of the Holdco 1 Non-Voting Stock at such times
and in such proportions as any holder thereof shall request if (but only if)
such split is necessary or advisable to permit or preserve the ability of TAM or
any of its Subsidiaries to conduct operations in any market
worldwide.
3
SECTION
1.06 Holdco 1
Chairman.
For so long as TEP is entitled to elect at least one director to the Holdco 1
Board, TEP shall have the right to designate from time to time one of its
Director Representatives to serve as chairman of the Holdco 1 Board (the “Holdco 1
Chairman”), who at all times shall be the same individual who is then
serving as the TAM Chairman. After such designation, each Shareholder
shall cause its Director Representatives to cause the Holdco 1 Board
to appoint such Director Representative as the Holdco 1 Chairman in accordance
with the Organizational Documents of Holdco 1. Each time an individual is so
appointed as the Holdco 1 Chairman, LATAM and TEP shall cause their Director
Representatives in their capacity as directors of TAM, and Holdco 1 shall cause
the directors of TAM, to appoint the same individual as the TAM Chairman in
accordance with the Organizational Documents of TAM (as defined in the TAM
Shareholders Agreement). As of the Effective Time and for a minimum period
of two years, the Holdco 1 Chairman shall be Maria Cláudia Oliveira Amaro.
In no event shall the Holdco 1 Chairman have a casting vote with respect to any
matter before the Holdco 1 Board.
SECTION
1.07 Meetings of the Holdco 1
Board.
(a) Regular
meetings of the Holdco 1 Board shall be held on a monthly basis, and each
regular monthly meeting of the Holdco 1 Board shall occur on the same day as,
and promptly before the regular monthly meeting of the TAM Board and within
three business days after the regular monthly meeting of the board of directors
of LATAM.
(b) Special
meetings of the Holdco 1 Board may be called by the Holdco 1 Chairman on not
less than 48 hours’ notice to each director of the Holdco 1 Board, and such
meetings shall be called by the Holdco 1 Chairman with like notice and like
manner promptly after receipt of a written request for a special meeting of the
Holdco 1 Board by any one director of the Holdco 1 Board; provided, however, that
notwithstanding the foregoing a special meeting of the Holdco 1 Board may be so
called on any shorter notice permitted by applicable Law if necessary or
desirable in the particular circumstances.
(c) The
Holdco 1 By-Laws shall provide that the directors of the Holdco 1 Board shall be
permitted to participate in, and shall be deemed to be present at, any meeting
of the Holdco 1 Board using teleconference or any other means pursuant to which
all the directors participating in such meeting can speak to and hear one
another.
SECTION
1.08 Quorum.
The quorum for any meeting of the Holdco 1 Board to be validly held shall be
five directors of Holdco 1.
4
SECTION
1.09 Holdco 1 Board Voting
Requirements.
Each director of the Holdco 1 Board shall have one vote on all matters before
the Holdco 1 Board. Any action by the Holdco 1 Board concerning a Board
Supermajority Matter as well as any other action required by applicable Law or
this Agreement to be approved by directors constituting more than a simple
majority of the Holdco 1 Board must be approved by the affirmative vote of five
directors of Holdco 1 at a duly called meeting of the Holdco 1 Board at which a
quorum is present and acting throughout (each, a “Supermajority
Board Vote”). All actions by the Holdco 1 Board other than with
respect to Board Supermajority Matters must be approved by the affirmative vote
of a simple majority of the directors of the Holdco 1 Board at a duly called
meeting of the Holdco 1 Board at which a quorum is present and acting
throughout.
SECTION
1.10 Board Supermajority
Matters.
Notwithstanding any provision of this Agreement or the other Organizational
Documents of Holdco 1 to the contrary and without prejudice to any statutory
limitations requiring additional shareholder approvals, Holdco 1 shall not
engage in or take, directly or indirectly, any of the following actions (each, a
“Board
Supermajority Matter”) unless approved by a Supermajority Board
Vote:
(i)
to create (including by the acquisition of shares), dispose of
or admit new shareholders to any Subsidiary of Holdco 1;
(ii)
to approve or effect the acquisition, disposal,
modification or encumbrance of (a) any Equity Securities or Convertible
Securities in TAM, or (b) any other asset with a value greater than
US$15,000,000;
(iii)
to approve investments in any assets not related to the corporate
purpose of Holdco 1;
(iv)
to execute any kind of agreement or to enter into
any kind of transaction in an amount greater than US$15,000,000 or that may
cause a material impact to Holdco 1 and/or its results;
(v)
to terminate, modify or waive any rights or claims of
Holdco 1 under contracts or other arrangements in any amount greater than
US$15,000,000, or that may cause a material impact to Holdco 1 and/or its
results;
(vi)
to commence, participate in, compromise or settle
any material action with respect to any litigation, judicial, administrative or
arbitration proceeding relating to Holdco 1 in an amount greater than
US$15,000,000 or that could reasonably be expected to cause a material impact to
Holdco 1 and/or its results;
(vii)
to approve the execution, amendment, termination or
ratification of acts or agreements with Related Parties;
(viii)
to approve any financial statements of Holdco 1 or any
amendments thereto or to any dividend, accounting or tax policy or principles of
Holdco 1;
(ix)
to approve the grant of any kind of security
interest or guarantee to secure obligations of third parties (including Related
Parties);
5
(x)
to appoint any executive other than the Holdco 1 CEO;
and
(xi)
to approve any vote to be cast by Holdco 1, in its capacity as
the holder of shares of TAM Ordinary Stock, in any shareholders meeting of TAM,
including any vote relating to any appointment or removal of any director of TAM
or any TAM Shareholder Supermajority Matter (as defined in the TAM Shareholders
Agreement).
SECTION
1.11 Shareholder Required
Vote.
Any action by the shareholders of Holdco 1 concerning a Shareholder
Supermajority Matter as well as any other action required by applicable Law or
this Agreement to be approved by more than a simple majority of the holders of
the then issued and outstanding shares of Holdco 1 Voting Stock must be approved
by the affirmative vote of the holders of shares representing at least 95% of
the total number of shares of Holdco 1 Voting Stock then issued and outstanding
at a duly called meeting of the shareholders of Holdco 1 at which a quorum is
present and acting throughout (each, a “Supermajority
Shareholder Vote”). All actions other than Shareholder
Supermajority Matters must be approved by the affirmative vote of the holders of
shares constituting a simple majority of the issued and outstanding shares of
Holdco 1 Voting Stock at a duly called meeting of the shareholders of Holdco 1
at which a quorum is present and acting throughout.
SECTION
1.12 Shareholder Supermajority
Matters.
Notwithstanding any provision of this Agreement or the Organizational Documents
of Holdco 1 to the contrary, Holdco 1 shall not engage in or take,
directly or indirectly, any of the following actions (each, a “Shareholder
Supermajority Matter”) unless approved by a Supermajority Shareholder
Vote:
(i)
to approve any amendments to the by-laws of Holdco
1 in respect to the following matters: (A) the corporate purpose, (B) the
corporate capital, (C) the rights inherent to each class of shares and to the
shareholders of Holdco 1, (D) the attributions of the shareholders
regular meeting or any limitation to attributions of the Holdco 1 Board,
(E) increase or decrease of the number of directors and officers, (F)
dividends or other distributions, (G) the term of Holdco 1, (H) any change
in the Fiscal Year of Holdco 1 and (I) the change of the headquarters of Holdco
1;
(ii)
to approve the dissolution,
liquidation and winding-up of Holdco 1;
(iii)
to approve the transformation, merger, spin-up, or
any kind of corporate reorganization of Holdco 1;
(iv)
to approve mechanisms for paying or
making, or to approve, declare or pay, any dividends or other kinds of
distributions to the shareholders of Holdco 1;
(v)
to approve the issuance, redemption, purchase or
amortization of any Equity Securities or Convertible Securities of Holdco
1;
6
(vi)
to approve the disposal by sale, encumbrance or otherwise
of 50% or more of the assets, including or not the liabilities, of Holdco
1, as determined by the balance sheet of the previous year, or to approve a plan
contemplating the disposal by sale, encumbrance or otherwise of 50% or more of
the assets of Holdco 1;
(vii)
to approve the disposal by sale, encumbrance or
otherwise of 50% or more of the assets of a Subsidiary of Holdco 1 representing
at least 20% of the assets of Holdco 1, or to approve the disposal by sale,
encumbrance or otherwise of the Equity Securities of such Subsidiary of Holdco 1
which has the effect of making Holdco 1 lose control over it;
(viii)
to approve the grant of any security interest or guarantee to secure
obligations of third parties (including Related Parties) in excess of 50% of the
assets of Holdco 1;
(ix)
to approve the execution, amendment, termination
or ratification of acts or agreements with Related Parties, exclusively in the
cases that a statutory limitation requires that these matters be approved by the
shareholders; and
(x)
to appoint or remove the
Accountants.
SECTION
1.13 Required
Actions.
Each of Holdco 1 and each of its Subsidiaries shall exercise all rights it has
as a shareholder of each of its respective Subsidiaries in an effort to cause
such Subsidiary to comply with the requirements of this Agreement; provided, however, that the foregoing
sentence shall not be construed to require Holdco 1 or any of its Subsidiaries
to take, and in exercising such rights none of them will take, any action that
would cause any director of each such respective Subsidiary to breach his or her
fiduciary duties. In selecting the candidates that TEP will
propose pursuant to Section 2.02 of the TAM Shareholders Agreement, TEP shall be
guided by the following principles: (a) alignment with the strongest
performing leader, i.e., the best of breed;
(b) maximization of synergy value capture; (c) conforming to local
regulations and culture; and (d) simplest and easiest execution.
SECTION
1.14 Management of Holdco
1.
The day-to-day business and affairs of Holdco 1 shall be managed by the chief
executive officer of Holdco 1 (the “Holdco 1
CEO”) under the oversight of the Holdco 1 Board. At all times the
individual serving as the Holdco 1 CEO shall be the same individual that is then
serving as the Chief Executive Officer of TAM pursuant to Section 2.02 of the
TAM Shareholders Agreement. The term of office of the Holdco 1 CEO shall
be two years.
7
ARTICLE
II
ACCOUNTING,
BOOKS AND RECORDS
SECTION
2.01 Fiscal
Year.
Unless and until changed by an amendment of the Holdco 1 By-Laws, the fiscal
year of Holdco 1 shall end on December 31 in each year (the “Fiscal
Year”) and Holdco 1, LATAM and TEP shall take, Holdco 1 shall cause the
directors of TAM to take and LATAM and TEP shall cause their Director
Representatives acting in their capacity as directors of TAM to take all
necessary action to ensure that the fiscal years of TAM and each of its
Subsidiaries are at all times identical to the Fiscal Year.
SECTION
2.02 Accountants.
Unless and until removed or changed by Supermajority Shareholder Vote, the
independent public accountants for Holdco 1 shall be PricewaterhouseCoopers LLP
(the “Accountants”)
and Holdco 1, LATAM and TEP shall take, Holdco 1 shall cause the directors of
TAM to take and LATAM and TEP shall cause their Director Representatives acting
in their capacity as directors of TAM to take, all necessary action to ensure
that the Accountants are at all times the independent public accountants of TAM
and each of its Subsidiaries.
SECTION
2.03 Books and
Records.
(a) Holdco 1
shall keep, and shall cause its Subsidiaries to keep, in all material respects,
at their respective principal offices, full, complete and accurate books and
records with respect to the business and affairs of Holdco 1 and its
Subsidiaries. The books and records shall be maintained in a manner that
provides Shareholders with sufficient information so as to permit (i) the
preparation of consolidated financial statements for TAM and its Subsidiaries
and financial statements for Multiplus S.A. on a stand-alone basis, in each case
in accordance with IFRS, (ii) the Shareholders to account for their interests in
Holdco 1 and its Subsidiaries in their respective financial statements in
accordance with International Financial Reporting Standards issued by the
International Accounting Standards Board (“IFRS”),
and (iii) the preparation of all required tax returns of Holdco 1, TAM and
its Subsidiaries and of the Shareholders.
(b) Holdco 1
shall, as and when reasonably requested by any Shareholder, prepare and furnish
(or cause to be prepared and furnished) to such Shareholder, at the expense of
Holdco 1, such financial and other data concerning the business and affairs
of Holdco 1 and its Subsidiaries as may be reasonably required by such
Shareholder for tax, accounting, reporting, oversight, or other legitimate
business purposes of such Shareholder, such information to be prepared on the
basis and in the format that such Shareholder may reasonably request in order to
meet the requirements of its accounting, tax and oversight and reporting systems
or the requirements of Law.
(c) Holdco 1
shall, and shall cause its Subsidiaries to, retain for not less than ten years
and for such longer period as required by Law, all of their respective books and
records (including the books and records of predecessor businesses, including
those relating to periods prior to the Effective Time).
8
SECTION
2.04 Access to Information, Audit
and Inspection.
(a) Each
Shareholder and its Representatives shall have (and Holdco 1 shall cause
its Subsidiaries to provide such Shareholder and its Representatives with) full
access at reasonable times and during normal business hours to all books and
records for Holdco 1 and its Subsidiaries and their respective businesses
(including those books and records pertaining to periods prior to the Effective
Time), including the right to examine and audit any of such books and records
and to make copies and extracts therefrom. Each Shareholder shall bear all
expenses incurred by it and its Representatives in making any such examination
on its behalf. Holdco 1 shall, and shall cause each of its
Subsidiaries to, make arrangements for each Shareholder and its Representatives
to have prompt access at reasonable times and during normal business hours to
its officers, directors and employees to discuss the business and affairs of
Holdco 1 and its Subsidiaries and the books and records pertaining
thereto. The provisions of this Section 2.04(a) shall survive any
termination of this Agreement and shall continue to apply to Holdco 1 and its
Subsidiaries and be enforceable by a Shareholder regardless of whether such
Shareholder ceases to beneficially own any shares of Holdco 1 Voting Stock but
only to the extent that such books and records and such access to officers,
directors and other employees are reasonably requested by a Shareholder in
connection with any pending Action involving such Shareholder or any of its
Affiliates insofar as such matter relates to the business or affairs of
Holdco 1 and its Subsidiaries (including any matters relating to the
business and affairs of any predecessor businesses, including matters relating
to periods prior to the Effective Time).
(b) Holdco 1
shall provide each Shareholder with copies of each completed annual tax return
required by Law to be filed by Holdco 1 or any of its Subsidiaries (each, a
“Tax
Return”) at least twenty business days prior to the due date (including
any extensions of such due date) of the filing of such Tax Return, and each
Shareholder may review any such Tax Return prior to its filing with the
appropriate Governmental Entity. Holdco 1 shall consult with the
Shareholders and negotiate in good faith to resolve any issues arising as a
result of the Shareholders’ review of any such Tax Return. The
Shareholders and Holdco 1 and its Subsidiaries shall use all reasonable
good faith efforts to resolve any issue in dispute as promptly as practicable
but in any event prior to the due date for the filing of any such Tax
Return. In the event that an issue resulting from the review by a
Shareholder of any such Tax Return remains in dispute as of the due date for the
filing of such Tax Return, such Tax Return shall be filed with the appropriate
Governmental Entity in accordance with the recommendation of the
Accountants.
SECTION
2.05 Annual Budget and Business
Plan.
The
annual budget and business plan for the current Fiscal Year and the business
plan for the next five Fiscal Years of Holdco 1 (collectively, the “Holdco 1
Plans”) at all times shall be identical to the annual budget and business
plan and the five-year business plan for the next five fiscal years then in
effect for TAM and its Subsidiaries. The Holdco 1 Board shall cause Holdco
1 and its Subsidiaries to operate in accordance with, and the officers and
employees of Holdco 1 and its Subsidiaries to implement, the Holdco 1 Plans and
shall conduct, or cause to be conducted, the business of Holdco 1 and its
Subsidiaries in accordance with any such Holdco 1 Plans.
9
ARTICLE
III
TRANSFERS
AND CONVERSION OF STOCK
SECTION
3.01 Restrictions on Certain
Transfers.
No holder of any shares of Holdco 1 Voting Stock (other than LATAM) will, or
will permit any of its Affiliates (including the ultimate beneficial owners of
such holder) to, directly or indirectly, by operation of law or otherwise, sell,
exchange, transfer, convey, assign, mortgage, pledge, encumber or otherwise
dispose of any direct or indirect interest in or beneficial ownership of (each,
a “Transfer”)
all or any portion of the shares of Holdco 1 Voting Stock beneficially owned by
it to any Person except in compliance with this Section 3.01. Any
Transfer made other than in compliance with the terms of this Section 3.01 shall
be null and void and of no force or effect. LATAM shall be entitled to
specific performance (to the extent permitted by Law) of its rights under this
Section 3.01, in addition to any other legal and equitable remedies to which it
may be entitled under Law. Without limitation of the foregoing, TEP shall
not vote its shares of Holdco 1 Voting Stock, or take any other action, in
support of any Transfer by Holdco 1 of any Equity Securities or any
Convertible Securities issued by it or by any of TAM or its Subsidiaries without
the prior written consent of LATAM.
(a) Block Sales. On
and after the tenth anniversary of the Effective Time (the “Tenth
Anniversary”) and prior to the first date on which LATAM would be
permitted under applicable Law in Brazil and other applicable Law to fully
convert all of the shares of Holdco 1 Non-Voting Stock beneficially owned by
LATAM and its Affiliates into shares of Holdco 1 Voting Stock and such
conversion would not have any Adverse Effect (the “Full
Conversion Date”), TEP may sell or transfer all (but not less than all)
of its shares of Holdco 1 Voting Stock to any Person in a single block sale (a
“Block
Sale”) if (but only if) such Block Sale complies with all of the
requirements set forth in this Section 3.01(a).
(i) A
Block Sale must include all of the shares of LATAM Common Stock that TEP is
contractually obligated to transfer along with its shares of Holdco 1 Voting
Stock (collectively, “LATAM
Shares”) in such Block Sale.
(ii) Prior
to a Block Sale, the Person to whom such shares are to be sold or transferred
has been approved by a resolution duly adopted by the LATAM Board as a buyer of
such shares of Holdco 1 Voting Stock; it being agreed that the LATAM Board shall
grant such approval without unreasonable delay unless it has a bona fide
business objection to such Person being the transferee of such shares or if a
transfer of such shares to such Person would, in the reasonable determination of
the LATAM Board, be inconsistent with applicable Law in Brazil.
(iii) No
Block Sale shall be permitted if it would have a material adverse effect on the
ability of (x) LATAM or Holdco 1 to own, or to receive the full benefits of
ownership of, TAM and its Subsidiaries or (y) TAM or its Subsidiaries to operate
their airline businesses worldwide (each, an “Adverse
Effect”).
10
(b) Forced Vote
Sales. On and after the third anniversary of the Effective Time, if
during any twenty-four month period TEP is required to vote its shares of common
stock, no par value (the “LATAM
Common Stock”), of LATAM as directed by the LATAM Controlling
Shareholders at two meetings (consecutive or not) of the shareholders of LATAM
held at least twelve months apart, then after the second such shareholder
meeting TEP shall have the right to sell or transfer all (but not less than all)
of its shares of Holdco 1 Voting Stock together with its LATAM Shares (each, a
“Forced
Vote Sale”) if (i) TEP delivers a written notice to LATAM within 30 days
after the date on which such second meeting was held that it intends to make a
Forced Vote Sale (the “Second
Meeting Date”), (ii) if such Forced Vote Sale is made prior to the Full
Conversion Date it complies with the requirements of Section 3.01(a), but
without giving effect to the phrase “On and after the Tenth Anniversary and” at
the beginning of such section and (iii) such Forced Vote Sale is completed
within eighteen months after the Second Meeting Date (such period, as it may be
extended pursuant to this Section 3.01(b), the “Forced
Vote Sale Period”); provided that if TEP has made
a bona fide and reasonably diligent effort to complete a Forced Vote Sale within
the Forced Vote Sale Period but has been unable to do so, then the Forced Vote
Sale Period shall be extended for twelve months. If a Forced Vote Sale is
not completed within the Forced Vote Sale Period, then this Section 3.01(b)
shall only apply with respect to instances that TEP is required to vote its
LATAM Shares as directed by the LATAM Controlling Shareholders after such
date.
(c) Release Event
Sales. If a Release Event occurs and prior to such Release Event
TEP has not sold or transferred any shares of Holdco 1 Voting Stock and/or any
shares of LATAM Common Stock that were (i) beneficially owned by TEP immediately
after the Effective Time and (ii) not exempted from the provisions of Article
III of the Control Group Shareholders Agreement at the time of such sale or
transfer (collectively, “LATAM
Restricted Shares”), then at any time after such Release Event, TEP shall
have the right to sell or transfer all (but not less than all) of its shares of
Holdco 1 Voting Stock together with its LATAM Restricted Shares; provided, however, that if
the sale or transfer occurs prior to the Full Conversion Date it must comply
with the requirements of Section 3.01(a) but without giving effect to the phrase
“On and after the Tenth Anniversary and,” at the beginning of such
section. A “Release
Event” shall be deemed to have occurred only if and when each of the
following events shall have occurred: (i) a capital increase (as defined under
the Law of Chile) in LATAM is completed after the Effective Time, (ii) TEP does
not fully exercise the preemptive rights granted to it under applicable Law in
Chile with respect to such capital increase in respect of all of its LATAM
Restricted Shares, (iii) after such capital increase is completed, the
individual designated by TEP for election to the LATAM Board with the assistance
of the LATAM Controlling Shareholders is not elected to such board.
(d) LATAM
Transfers. LATAM shall not sell or transfer any shares of TAM Stock
to any Person (other than an Affiliate of LATAM) at any time when TEP owns any
shares of Holdco 1 Voting Stock; provided, however, that,
notwithstanding the foregoing LATAM will have the right to effect such a sale or
transfer if LATAM (or its assignee) acquires all the shares of Holdco 1 Voting
Stock beneficially owned by TEP for an amount equal to TEP’s then current tax
basis in such shares and any costs TEP is required to incur to effect such sale
or transfer at the same time as such sale or transfer. TEP hereby irrevocably
grants LATAM the assignable right to purchase all of the shares of Holdco 1
Voting Stock beneficially owned by TEP in connection with any sale pursuant to
the proviso in the immediately preceding sentence.
11
SECTION
3.02 Ownership Control
Events.
If at any time LATAM is permitted
under the Law of Brazil and other applicable Law to beneficially own a greater
percentage of the issued and outstanding shares of Holdco 1 Voting Stock than it
currently beneficially owns, then LATAM shall have the right, exercisable in its
sole discretion, in whole or in part, at any time or from time to time, to
convert the shares of Holdco 1 Non-Voting Stock beneficially owned by it into
shares of Holdco 1 Voting Stock on a 1:1 basis or at another conversion ratio
agreed to by LATAM and TEP in writing prior to such conversion, in each case to
the maximum extent allowable under applicable Law (the “Conversion
Option”) by providing written notice of such election to TEP and
Holdco 1 (each, an “Ownership
Notice”); provided, however, that
notwithstanding the foregoing LATAM may exercise the Conversion Option only if
and to the extent that the consummation of such exercise would not have any
Adverse Effect. If at any time LATAM is permitted under applicable Law to
have more than two Director Representatives on the Holdco 1 Board, then LATAM
shall have the right, exercisable in its sole discretion, in whole or in part,
at any time or from time to time, to appoint additional Director Representatives
to the Holdco 1 Board in accordance with Section 1.03 by providing written
notice of such election to TEP and Holdco 1 (each, a “Director
Election Notice”); provided, however, that
notwithstanding the foregoing LATAM shall not have the right to deliver any
Director Election Notice that would result in it appointing half or a majority
of the members of any Holdco 1 Board unless at such time LATAM is permitted
under applicable Law in Brazil and other applicable Law to own a majority of the
outstanding shares of Holdco 1 Voting Stock. Promptly following delivery
of any Ownership Notice or Director Election Notice to TEP and Holdco 1,
each of Holdco 1 and TEP shall cooperate with LATAM and shall take or cause
to be taken all actions (including by calling a special meeting of shareholders
of Holdco 1 to remove all the directors of the Holdco 1 and to relect such
directors and elect the additional individuals designated by LATAM to the Holdco
1 Board), and do or cause to be done all things, reasonably necessary, proper or
advisable on its part under the Organizational Documents of Holdco 1 and
applicable Law to permit LATAM to increase its representation on the Holdco 1
Board and/or to convert such shares of Holdco 1 Non-Voting Stock into shares of
Holdco 1 Voting Stock pursuant to this Section 3.02. Without limitation of
the foregoing, TEP agrees to cause one or more of its Director Representatives
to resign from each Holdco 1 Board promptly following request therefor from
LATAM in order to effectuate the purpose of this Section 3.02. LATAM and
Holdco 1 shall take all necessary action to ensure that at the same time that
any individuals are added or removed from the Holdco 1 Board as a result of this
Section 3.02 the same individuals are added or removed from the TAM Board.
On and after the Tenth Anniversary and after LATAM has fully converted all of
the shares of Holdco 1 Non-Voting Stock beneficially owned by it into shares of
Holdco 1 Voting Stock as permitted by applicable Law in Brazil and other
applicable Law (the “Full
Ownership Conversion Date”), then LATAM shall have the right to purchase
all of the shares of Holdco 1 Voting Stock held by all holders of such shares
for an amount equal to TEP’s then current tax basis in such shares and any costs
TEP is required to incur to effect such sale (the “Call
Option”). If LATAM does not exercise the Call Option within 30 days
following the occurrence of the Full Ownership Conversion Date or if, after the
Tenth Anniversary, LATAM has the right under applicable Law in Brazil and other
applicable Law to fully convert all the shares of Holdco 1 Non-Voting Stock
beneficially owned by it into shares of Holdco 1 Voting Stock, such conversion
would not have an Adverse Effect and LATAM has not fully exercised such right
within 30 days after the first date on which LATAM has such right, then each of
the holders of the shares of Holdco 1 Voting Stock shall have the right to put
its shares to LATAM for an amount equal to its then current tax basis in such
shares and any costs that it is required to incur to effect such
sale.
12
ARTICLE
IV
GENERAL
PROVISIONS
SECTION
4.01 Term of
Agreement.
Except as otherwise provided under applicable Law, this Agreement shall continue
in effect as to each of the Parties until (i) it is terminated as to any Party
by the written consent of all the Parties or (ii) with respect to any
Shareholder, the first day on which such Shareholder no longer beneficially owns
any shares of Holdco 1 Voting Stock, whichever is sooner to occur. This
Agreement shall not terminate solely due to any dissolution, liquidation or
winding up of Holdco 1. The termination of this Agreement as to any
Shareholder shall not affect any of the rights and obligations of any of the
other Parties with respect to each other. In the event that this Agreement
terminates as to any Shareholder, thereafter such Shareholder shall have no
further liability to the other Parties or to any of their respective
shareholders, directors, officers, employees or other Affiliates and such other
Parties shall have no further liability to such Shareholder, in each case solely
in respect of this Agreement; provided, however, that the foregoing
shall not apply to any provisions hereof that expressly survive the termination
of this Agreement (including Sections 2.04 and 4.02); and provided, further, that nothing herein
shall relieve any Party of any liability for any breach of this Agreement that
occurred prior to such termination.
SECTION
4.02 Fees and
Expenses.
All fees and expenses incurred in connection with this Agreement shall be paid
by the Party incurring such fees or expenses. The provisions of this
Section 4.02 shall survive any termination of this Agreement.
SECTION
4.03 Governing
Law.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES
THEREOF; PROVIDED, HOWEVER, THAT NOTWITHSTANDING
THE FOREGOING THE AUTHORIZATION AND EXECUTION OF THIS AGREEMENT BY EACH PARTY
SHALL BE GOVERNED BY THE LAW OF ITS JURISDICTION OF INCORPORATION.
SECTION
4.04 Definitions.
For the purposes of this Agreement, the following terms shall have the meanings
assigned below:
13
(a) “Actions”
means any actions, suits, claims, allegations, hearings, proceedings,
arbitrations, mediations, audits, inquiries or investigations (whether civil,
criminal, administrative or otherwise).
(b) “Affiliate”
shall have the meaning assigned to such term in Rule 12b-2 under the U.S.
Exchange Act; provided,
however, that (i) no
Shareholder shall be deemed to be an Affiliate of any other Shareholder or any
of its Affiliates solely by reason of this Agreement and (ii) the restrictions
on Transfers in Article III shall apply to the holders of shares of Holdco 1
Voting Stock and their Affiliates, including the ultimate beneficial owners of
such holders.
(c) “beneficial
ownership” (and its correlative phrases) shall have the meanings assigned
to such phrases in Rule 13d-3 promulgated under the U.S. Exchange Act (without
taking into account any rights of such Person or any of its Affiliates under
Section 1.05 hereof) if the references to “within 60 days” in Rule
13d-3(d)(1)(i) were omitted. For all purposes of this Agreement, a
Shareholder shall be deemed to beneficially own all shares of LATAM Common Stock
and Holdco 1 Voting Stock beneficially owned by it and its Affiliates, including
the beneficial owners of such Shareholder.
(d) “business
day” shall mean any day that is not a Saturday, Sunday or a day on which
banking institutions are required or authorized by Law or executive order to be
closed in Santiago, Chile or São Paulo, Brazil.
(e) “contract”
shall mean any loan, credit agreement, bond, debenture, note, mortgage,
indenture, lease, supply agreement, license agreement, development agreement or
other contract, agreement, obligation, commitment or instrument or other legally
binding arrangement or understanding, whether written or oral.
(f) “Control” (and its correlative
terms) shall have the meanings assigned to such terms in Rule 12b-2
promulgated under the U.S. Exchange Act.
(g) “Control
Group Shareholders Agreement ” means the shareholders agreement, dated as
of the date hereof, among the LATAM Controlling Shareholders and TEP
Chile.
(h) “Convertible
Securities” means, with respect to any Person, any securities, options,
warrants or other rights of, or granted by, such Person or any of its Affiliates
that are, directly or indirectly, convertible into, or exercisable or
exchangeable for, any Equity Securities of such Person or any of its
Affiliates.
(i) “Equity
Securities” means, with respect to any Person, any capital stock of, or
other equity interests in such Person.
(j)
“Governmental
Entity” means any governmental, quasi-governmental or regulatory
authority, body, department, commission, board, bureau, agency, division, court,
organized securities exchange or other legislative, executive or judicial
governmental entity or instrumentality of any country, nation, republic,
federation or similar entity or any state, county, parish or municipality,
jurisdiction or other political subdivision thereof.
14
(k) “Holdco 1
Non-Voting Stock” shall mean the non-voting stock, no par value, of
Holdco 1, which, pursuant to the Holdco 1 By-Laws, shall have the exclusive
right to receive all dividends, distributions or other amounts payable by
Holdco 1 in respect of any shares of its capital stock (including a
preference to be paid in connection with any liquidation, capital reduction,
winding up, recapitalization or reorganization) other than the Dividend Rights
and which shall have no right to vote on, approve or consent to any matter that
is subject to any vote of, approval by or consent from the shareholders of
Holdco 1 under the Law of Chile or otherwise other than the rights to vote
on, approve or consent to matters requiring the approval of the holders of
shares of Holdco 1 Non-Voting Stock under the Law of Chile or otherwise
(collectively, the “Limited
Voting Rights”).
(l) “Holdco 1
Voting Stock” shall mean the voting stock, no par value, of Holdco 1,
which, pursuant to the Holdco 1 By-Laws, shall have the exclusive right to
vote on, approve or consent to all matters that are subject to any vote of,
approval by or consent from the shareholders of Holdco 1 under the Law of
Chile or otherwise (other than the Limited Voting Rights) and which shall have
no economic rights other than the right to receive a nominal dividend
(collectively, “Dividend
Rights”).
(m) “Law”
means any statute, common law, ordinance, rule, regulation, agency requirement
or Order of, or issued, promulgated or entered into by or with, any Governmental
Entity.
(n) “Order”
means any order, decision, writ, injunction, decree, judgment, legal or
arbitration award, stipulation, license, permit or agreement issued, promulgated
or entered into by or with (or settlement or consent agreement subject to) any
Governmental Entity.
(o) “Organizational
Documents” shall mean (i) with respect to Holdco 1, this Agreement, the
TAM Shareholders Agreement and the Holdco 1 By-Laws and (ii) with
respect to TAM and its Subsidiaries, this Agreement and the TAM Shareholders
Agreement and the by-laws or other comparable governing documents of such
Persons.
(p) “Person”
means any natural person, firm, corporation, partnership, company, limited
liability company, joint venture, association, trust, unincorporated
organization, Governmental Entity or other entity.
(q) “Related
Party” means (a) any Person that, individually or jointly with
other(s), directly or indirectly (i) controls Holdco 1 or any of its
Subsidiaries; (ii) is controlled by Holdco 1 or any of its Subsidiaries; or
(iii) is controlled by any Person that controls, individually or jointly with
other(s), Holdco 1 or any of its Subsidiaries; (b) any successor of the
controlling shareholder of Holdco 1 or any of its Subsidiaries, in the event of
dissolution, capital decrease by the delivery of shares to shareholders,
spin-off and any other corporate transaction; and (c) any board member, officer
or manager of the companies mentioned above.
15
(r)
“Representatives,”
with respect to any Person, shall mean the directors, officers, employees,
auditors, accountants, legal counsel, financial advisors and other agents or
representatives of or to such Person and its Subsidiaries.
(s) “Subsidiary”
means, with respect to any Person, (i) a corporation in which such Person,
together with its Subsidiaries, beneficially owns Voting Securities of such
corporation which entitle them, collectively, to cast more than 50% of all the
votes entitled to be cast by the holders of all Voting Securities of such
corporation then outstanding in a general election of directors of such
corporation or (ii) any Person that is not a corporation in which such Person,
and/or one or more other Subsidiaries of such Person, directly or indirectly,
has a majority equity or voting interest or the power to direct the policies,
management and affairs thereof.
(t)
“U.S.
Exchange Act” shall mean the U.S. Securities Exchange Act of
1934.
(u) “Voting
Securities” means, with respect to any Person, any securities or other
equity or ownership interests in such Person which are entitled to vote
generally in the election of directors of such Person (or, if such Person is not
a corporation, the individuals who perform a similar function for such
Person).
SECTION
4.05 Severability.
The provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity or
enforceability of the other provisions of this Agreement. If any provision
of this Agreement, or the application of such provision to any Person or any
circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other Persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application of
such provision, in any other jurisdiction.
SECTION
4.06 Amendment;
Waiver.
This Agreement may be amended and any performance, term or condition waived in
whole or in part only by a writing signed by all Parties affected by the
amendment (in the case of an amendment) or by the Party against whom the waiver
is to be effective (in the case of a waiver). No failure or delay by any
Party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any singular partial exercise of such right, power or
privilege preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. Waiver by any Party of any breach or
failure to comply with any provision of this Agreement by another Party shall
not be construed as, nor shall constitute, a continuing waiver of such
provisions, or a waiver of any other breach of or failure to comply with any
other provisions of this Agreement.
16
SECTION
4.07 Assignment.
Subject to the provisions of Section 3.01 and the Control Group Shareholders
Agreement, neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned, in whole or in part, by operation of
Law or otherwise by any of the Parties without the prior written consent of the
other Parties, and any purported assignment without such consent shall be null
and void and of no force or effect. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of, and be enforceable
by, the Parties and their respective successors and permitted
assigns.
SECTION
4.08 No Third-Party
Beneficiaries.
Except as otherwise expressly stated herein, the Parties hereby agree that the
agreements and covenants set forth herein are solely for the benefit of the
other Parties in accordance with, and subject to the terms of, this Agreement
and that this Agreement is not intended to, and does not, confer upon any Person
other than the Parties any rights or remedies hereunder, including the right to
rely upon the representations and warranties set forth herein.
SECTION
4.09 After-Acquired Holdco 1
Voting Stock.
All of the provisions of this Agreement shall apply to all shares of Holdco 1
Voting Stock now owned by any Shareholder and to all shares of Holdco 1 Voting
Stock which may be issued or transferred hereafter to any Shareholder in
consequence of any additional issuance, purchase, exchange, or reclassification
of shares, corporate reorganization, or any other form of recapitalization, or
consolidation, merger, amalgamation or share split, or share dividend, or which
are acquired by any Shareholder in any other manner.
SECTION
4.10 Notices.
All notices, requests, claims, demands, instructions and other communications or
documents given hereunder shall be in writing and shall be delivered personally
or sent by registered or certified mail (postage prepaid), facsimile or
overnight courier to the Parties at the following addresses (or at such other
address for a Party as shall be specified by like notice):
If to
LATAM, to:
Claro y
Cia.
Apoquindo
3721, piso 13,
Santiago,
Chile
Attention:
José María Eyzaguirre B.
Fax: +56
2 367 3003
jmeyzaguirre@claro.cl
17
with
copies (which shall not constitute notice) to:
Sullivan
& Cromwell LLP
125 Broad
Street
New York,
NY 10004
United
States of America
Attention:
Sergio Galvis and Duncan McCurrach
Fax: +1
212 558 3588
galviss@sullcrom.com
mccurrachd@sullcrom.com
If to
Holdco 1 or TEP to:
Turci
Advogados
Rua Dr.
Renato Paes de Barros, 778
-1◦ andar
– cj.12
04530-0001
São Paulo
– SP
Brasil
Attention:
Flavia Turci
Fax: +55
11 2177 2197
turci@turci.com
with a
copy (which shall not constitute notice) to:
Clifford
Chance US LLP
31 West
52nd Street
New York,
NY 10019
Attention:
Sarah Jones and Anand Saha
Fax: +1
212 878 8375
Sarah.Jones@CliffordChance.com
Anand.Saha@CliffordChance.com
Any
notice, request, claim, instruction or other communication or document given as
provided above shall be deemed given to the receiving party (i) if delivered
personally, upon actual receipt, (ii) if sent by registered or certified mail,
three business days after deposit in the mail, (iii) if sent by facsimile, upon
confirmation of successful transmission if within one business day after such
facsimile has been sent such notice, request, claim, instruction or other
communication or document is also given by one of the other methods described
above and (iv) if sent by overnight courier, on the next business day after
deposit with the overnight courier.
18
SECTION
4.11 Specific Enforcement;
Consent to Jurisdiction.
The Parties agree that irreparable damage would occur and that the Parties would
not have any adequate remedy at Law in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the Parties shall
be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions of this
Agreement, this being in addition to any other remedy to which they are entitled
at Law or in equity, without the necessity of proving the inadequacy of monetary
damages or of posting bond or other undertaking, as a remedy and to obtain
injunctive relief against any breach or threatened breach hereof. In the
event that any Action is brought in equity to enforce the provisions of this
Agreement, no Party shall allege, and each Party waives the defense or
counterclaim that there is an adequate remedy at Law. Each of the Parties
hereby irrevocably consents and submits itself to the personal jurisdiction of
the courts of the State of New York and the federal courts of the United States
of America located in the Borough of Manhattan, The City of New York
(collectively, the “Agreed
Courts”) solely in respect of the interpretation and enforcement of the
provisions of this Agreement, and the documents referred to herein and the
transactions contemplated by this Agreement (collectively, the “Agreed
Issues”), waives, and agrees not to assert, as a defense in any Action,
suit or proceeding in an Agreed Court with respect to the Agreed Issues that
such Party is not subject thereto or that such Action, suit or proceeding may
not be brought or is not maintainable in such Agreed Court or that the venue
thereof may not be appropriate or that this Agreement or any such document may
not be enforced in or by such Agreed Court, and the Parties irrevocably agree
that all claims with respect to any Action, suit or proceeding with respect to
the Agreed Issues shall be heard and determined only in an Agreed Court.
The Parties hereby consent to and grant to each Agreed Court jurisdiction over
the Person of such parties and, to the extent permitted by Law, over the subject
matter of any dispute with respect to the Agreed Issues and agree that mailing
of process or other papers in connection with any such Action or proceeding in
the manner provided in Section 4.10 or in such other manner as may be permitted
by Law shall be valid and sufficient service thereof.
SECTION
4.12 WAIVER OF JURY
TRIAL.
EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER
THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO
(I) CERTIFIES THAT IT HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER AND
MADE IT VOLUNTARILY AND THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT,
IN THE EVENT OF ANY ACTION, SUIT OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (II) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER
AND CERTIFICATIONS IN THIS SECTION 4.12.
SECTION
4.13 Counterparts.
This Agreement may be executed in one or more counterparts (including by
facsimile), each of which shall be considered an original instrument and all of
which shall together constitute the same agreement. This Agreement shall
become effective when one or more counterparts have been signed by each of the
Parties and delivered to the other Parties.
19
SECTION
4.14 Interpretation.
When a reference is made in this Agreement to an Article, Section, Exhibit or
Schedule, such reference shall be to an Article of, a Section of, or an Exhibit
or Schedule to this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words “include,” “includes” or “including” are
used in this Agreement, they shall be deemed to be followed by the words
“without limitation”. The words “hereof,” “herein” and “hereunder” and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement. All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein. The definitions
contained in this Agreement are applicable to the singular as well as the plural
forms of such terms and to the masculine as well as to the feminine and neuter
genders of such terms. Any contract, instrument or Law defined or referred
to herein or in any contract or instrument that is referred to herein means such
contract, instrument or Law as from time to time amended, modified or
supplemented, including (in the case of contracts or instruments) by waiver or
consent and (in the case of Laws) by succession of comparable successor Law and
references to all attachments thereto and instruments incorporated
therein. References to a Person are also to its permitted successors and
assigns. Except as otherwise expressly provided herein, all remedies
provided herein shall be in addition to any other remedies that the Parties may
otherwise have under applicable Law. Any reference in this Agreement to a
“day” or a number of “days” (without the explicit qualification of “business”)
shall be interpreted as a reference to a calendar day or number of calendar
days. This Agreement is the product of negotiation by the Parties having
the assistance of counsel and other advisers, and the Parties and their counsel
and other advisers having participated jointly in negotiating and drafting this
Agreement. If an ambiguity or a question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the Parties,
and no presumption or burden of proof shall arise favoring or disfavoring any
Party by virtue of the authorship of any provision of this
Agreement.
SECTION
4.15 Filing
Requirement. A
copy of this Agreement shall be filed at the headquarters of LATAM and Holdco 1
for all purposes of applicable Law.
20
IN
WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed by
their respective officers thereunto duly authorized as of the date first above
written.
|
LAN
AIRLINES S.A.
|
||
|
By:
|
|
|
|
Name:
|
||
|
Title:
|
||
|
[HOLDCO
1]
|
||
|
By:
|
|
|
|
Name:
|
||
|
Title:
|
||
|
TEP
CHILE S.A.
|
||
|
By:
|
|
|
|
Name:
|
||
|
Title:
|
||
EXHIBIT
A
LATAM Group Ownership
Structure and Organizational Structure
EXHIBIT
B
By-laws of Holdco
1
Exhibit
99.8
FORM OF
EXECUTION VERSION
|
|
SHAREHOLDERS
AGREEMENT
Among
LAN
AIRLINES S.A.,
TAM
S.A.,
TEP
CHILE S.A.
and
[HOLDCO
1]
Dated
as of ______, 2011
|
|
TABLE
OF CONTENTS
|
Page
|
|||
|
ARTICLE
I
|
|||
|
GOVERNANCE
OF TAM
|
|||
|
SECTION
1.01
|
Scope of the Agreement
|
1
|
|
|
SECTION
1.02
|
Role and Composition of the TAM
Board
|
2
|
|
|
SECTION
1.03
|
Removal and Vacancies
|
2
|
|
|
SECTION
1.04
|
Enabling Provisions
|
3
|
|
|
SECTION
1.05
|
TAM Chairman
|
3
|
|
|
SECTION
1.06
|
Meetings of the TAM Board
|
3
|
|
|
SECTION
1.07
|
Quorum
|
4
|
|
|
SECTION
1.08
|
TAM Board Voting
Requirements
|
4
|
|
|
SECTION
1.09
|
Board Supermajority Matters
|
4
|
|
|
SECTION
1.10
|
Shareholder Required Vote
|
6
|
|
|
SECTION
1.11
|
Shareholder Supermajority
Matters
|
6
|
|
|
SECTION
1.12
|
TAM Subsidiaries
|
7
|
|
|
SECTION
1.13
|
Required Actions
|
7
|
|
|
ARTICLE
II
|
|||
|
TAM
GROUP DIRETORIA
|
|||
|
SECTION
2.01
|
Role of Management
|
8
|
|
|
SECTION
2.02
|
TAM Chief Executive Officer
|
8
|
|
|
SECTION
2.03
|
TAM Chief Financial Officer
|
9
|
|
|
SECTION
2.04
|
Other
Members of the TAM Diretoria
|
9
|
|
|
SECTION
2.05
|
TAM Linhas Aereas S.A.
|
9
|
|
|
ARTICLE
III
|
|||
|
ACCOUNTING,
BOOKS AND RECORDS
|
|||
|
SECTION
3.01
|
Fiscal Year
|
10
|
|
|
SECTION
3.02
|
Accountants
|
10
|
|
|
SECTION
3.03
|
Financial Statements
|
10
|
|
|
SECTION
3.04
|
Books and Records
|
10
|
|
|
SECTION
3.05
|
Access to Information, Audit and
Inspection
|
11
|
|
|
SECTION
3.06
|
Annual Budget and Business
Plan
|
12
|
|
|
ARTICLE
IV
|
|||
|
GENERAL
PROVISIONS
|
|||
|
SECTION
4.01
|
Term of Agreement
|
13
|
|
- i
- -
|
SECTION
4.02
|
Fees and Expenses
|
13
|
|
|
SECTION
4.03
|
Governing Law
|
13
|
|
|
SECTION
4.04
|
Definitions
|
13
|
|
|
SECTION
4.05
|
Severability
|
16
|
|
|
SECTION
4.06
|
Amendment; Waiver
|
16
|
|
|
SECTION
4.07
|
Assignment
|
16
|
|
|
SECTION
4.08
|
No Third-Party
Beneficiaries
|
16
|
|
|
SECTION
4.09
|
Notices
|
16
|
|
|
SECTION
4.10
|
Specific Enforcement; Consent to
Jurisdiction
|
18
|
|
|
SECTION
4.11
|
WAIVER OF JURY TRIAL
|
18
|
|
|
SECTION
4.12
|
Counterparts
|
19
|
|
|
SECTION
4.13
|
Interpretation
|
19
|
|
|
SECTION
4.14
|
Filing Requirement.
|
19
|
|
|
Schedule
4.06
|
Annual
Budget and Business Plan Requirements
|
INDEX OF DEFINED
TERMS
|
Page
|
||
|
Accountants
|
10
|
|
|
Actions
|
13
|
|
|
Affiliate
|
13
|
|
|
Agreed
Courts
|
18
|
|
|
Agreed
Issues
|
18
|
|
|
Agreement
|
1
|
|
|
Airline
Subsidiaries
|
7
|
|
|
Annual
Budget and Business Plan
|
12
|
|
|
Approved
Plans
|
4
|
|
|
beneficial
ownership
|
14
|
|
|
board
member
|
14
|
|
|
Board
Representative Election Notice
|
2
|
|
|
Board
Representatives
|
2
|
|
|
Board
Supermajority Matter
|
4
|
|
|
business
day
|
14
|
|
|
contract
|
14
|
|
|
Control
|
14
|
|
|
Convertible
Securities
|
14
|
|
|
Departure
|
2
|
|
|
Effective
Time
|
2
|
|
|
Equity
Securities
|
14
|
|
|
Fiscal
Year
|
10
|
|
|
Foreign
Ownership Control Laws
|
14
|
|
|
Governmental
Entity
|
14
|
|
|
Holdco
1
|
1
|
|
|
IFRS
|
10
|
|
|
LATAM
|
1
|
|
|
LATAM
Group
|
14
|
|
|
Law
|
14
|
|
|
Majority
Board Vote
|
4
|
|
|
Multi-Year
Business Plan
|
12
|
|
|
Order
|
15
|
|
|
Organizational
Documents
|
15
|
|
|
Parties
|
1
|
|
|
Person
|
15
|
|
|
Related
Party
|
15
|
|
|
Representatives
|
15
|
|
|
Shareholder
Supermajority Matter
|
6
|
|
|
Shareholders
|
1
|
|
|
Subsidiary
|
15
|
|
|
Supermajority
Board Vote
|
4
|
|
|
Supermajority
Shareholder Vote
|
6
|
|
|
TAM
|
1
|
|
|
TAM
Board
|
2
|
|
|
TAM
CCO
|
9
|
|
|
TAM
CEO
|
8
|
|
|
TAM
CFO
|
9
|
|
|
TAM
Chairman
|
3
|
|
|
TAM
Company
|
4
|
|
|
TAM
COO
|
9
|
|
|
TAM
Diretoria
|
8
|
|
|
TAM
Group
|
8
|
|
|
TAM
Ordinary Stock
|
1
|
|
|
TAM
Preferred Stock
|
1
|
|
|
TAM
Stock
|
1
|
|
|
Tax
Return
|
11
|
|
|
TEP
|
1
|
|
|
U.S.
Exchange Act
|
15
|
|
|
Voting
Securities
|
|
15
|
SHAREHOLDERS
AGREEMENT, dated as of ________, 2011 (this “Agreement”),
among LAN AIRLINES S.A., a company organized under the Law of Chile (“LATAM”),
[HOLDCO1], a company organized under the Law of Chile (“Holdco 1”
and, together with LATAM, the “Shareholders”),
TEP Chile S.A., a company organized under the Law of Chile (“TEP”), and TAM S.A., a company
organized under the Law of Brazil (“TAM”
and, together with the Shareholders and TEP, the “Parties”).
WITNESSETH
WHEREAS,
as of the Effective Time (as defined below), Holdco 1 will own 100%
of the shares of ordinary stock, no par value (the “TAM
Ordinary Stock”), of TAM and LATAM will own 100% of the shares of the
non-voting preferred stock, no par value (the “TAM
Preferred Stock” and, together with the TAM Ordinary Stock, the “TAM
Stock”), of TAM, which collectively will constitute all of the issued and
outstanding shares of capital stock of TAM;
WHEREAS,
as of the Effective Time, TEP and LATAM collectively will own 100% of the
outstanding voting shares of Holdco 1;
WHEREAS,
the Parties desire to enter into this Agreement to set forth the terms and
conditions upon which they have agreed to hold their shares of TAM Stock,
including with respect to the voting thereof, as well as their agreements with
respect to governance, management and operation of TAM and its Subsidiaries and
certain other matters; and
WHEREAS,
each of LATAM and Holdco 1 has determined and declared that the execution and
delivery of this Agreement is in its best interests, and the execution, delivery
and performance of this Agreement by it have been duly authorized by its board
of directors and all other necessary corporate action on the part of
it.
NOW,
THEREFORE, in consideration of the covenants and agreements contained herein and
for other good and valuable consideration, the receipt of which is hereby
acknowledged, the Parties agree as follows:
ARTICLE
I
GOVERNANCE
OF TAM
SECTION
1.01 Scope of the
Agreement;
Effective Time. The Parties desire to set forth in this Agreement
certain terms and conditions upon which the shares of TAM Stock will be held,
including with respect to the voting thereof, as well as their agreements with
respect to governance, management and operation of TAM and its Subsidiaries and
certain other matters. In the event of any inconsistency or conflict
between the provisions of this Agreement and the other Organizational Documents
of TAM or any of its Subsidiaries, this Agreement shall control and the Parties
shall use their commercially reasonable efforts to amend any such Organizational
Documents to conform to the provisions of this Agreement and to exercise their
rights under such Organizational Documents to give effect to such
provisions. This Agreement shall become effective only if, and at that
time at which, Holdco 1 becomes a holder of at least 80% of the outstanding
shares of TAM Ordinary Stock (the “Effective
Time”). All actions required to be taken or performed under this
Agreement shall be taken or performed in accordance with applicable
Law.
SECTION
1.02 Role and Composition of the
TAM
Board. The business and affairs of TAM shall be managed under the
direction of the board of directors of TAM (the “TAM
Board”) in accordance with the applicable provisions of the
Organizational Documents of TAM. The TAM Board shall be comprised of six
board members to be elected by Holdco 1. Holdco 1 agrees to elect two
individuals selected by LATAM and four individuals selected by TEP as the six
board members of TAM (each person so selected by LATAM or TEP is referred to
herein as one of their “Board
Representatives”). The term of office for the board members of TAM
shall be two years. If at any time LATAM is permitted under applicable Law
to select more than two Board Representatives on the TAM Board, then LATAM shall
have the right, exercisable in its sole discretion, in whole or in part, at any
time or from time to time, to cause Holdco 1 to elect additional Board
Representatives to the TAM Board by providing written notice of such election to
Holdco 1 (each, a “Board
Representative Election Notice”); provided, however, that notwithstanding
the foregoing LATAM shall not have the right to deliver any Board Representative
Election Notice that would result in it selecting half or a majority of the
members of the TAM Board unless at such time LATAM is permitted under applicable
Law in Brazil and other applicable Law to own a majority of the outstanding
voting shares of Holdco 1. Promptly following delivery of any Board
Representative Election Notice to Holdco 1, Holdco 1 shall cooperate with LATAM
and shall take or cause to be taken all actions (including by calling a special
meeting of shareholders of TAM to elect the additional individuals selected by
LATAM for election to the TAM Board), and do or cause to be done all things
reasonably necessary, proper or advisable on its part under the other
Organizational Documents of TAM and applicable Law to permit LATAM to increase
its representation on the TAM Board pursuant to this Section 1.02. Without
limitation of the foregoing, Holdco 1 agrees to cause one or more of TEP’s Board
Representatives to resign from the TAM Board promptly following request therefor
from LATAM in order to effectuate the purpose of this Section 1.02.
SECTION
1.03 Removal and
Vacancies. In the event
of any vacancy on the TAM Board resulting from the resignation, incapacity,
retirement, death or removal (each, a “Departure”)
of any Board Representative of LATAM or TEP, such party shall have the right to
select another individual to replace such Board Representative on the TAM
Board. In such event, Holdco 1 shall cause a special meeting of the
shareholders of TAM to be held to elect such replacement to the TAM Board and at
such meeting shall elect such replacement to the TAM Board to serve until the
next annual meeting of the shareholders of TAM. If at any time any Board
Representative of LATAM or TEP ceases to be a board member of Holdco 1, Holdco 1
shall promptly cause him or her to resign or to be removed from the TAM Board
and Holdco 1 will replace such Board Representative on the TAM Board pursuant to
the foregoing procedures.
– 2
–
SECTION
1.04 Enabling
Provisions.
(a) Holdco
1 agrees that it shall vote, or cause to be voted or execute written consents
for, as the case may be, all shares of TAM Ordinary Stock beneficially owned by
it, and shall take all other action reasonably necessary (including by causing
TAM to call a special meeting of shareholders or the TAM Chairman to call a
special meeting of the TAM Board, as applicable) so as to give effect to the
agreements with respect to representation on the TAM Board contained in this
Article I and to ensure that the by-laws of TAM (i) facilitate, enable and do
not at any time conflict with any provision of this Agreement and (ii) permit
each of LATAM and TEP to receive the full benefits to which it is entitled under
this Agreement. Holdco 1 further agrees that it shall not take any action
directly as a shareholder of TAM, and each of LATAM and TEP agree it shall not
take any action indirectly through any of its Board Representatives, or
otherwise that would contravene or frustrate the implementation of these
agreements. Each of LATAM and TEP shall cause all of its Board Representatives,
and Holdco 1 shall cause each board member of TAM, to act at all times in
conformity with, and to take such action as may reasonably be required of and
available to them to ensure the fulfillment of, the terms of this Agreement and
the by-laws of TAM. TAM agrees not to take any action that would conflict
with or subvert the operation or enforcement of any provision of this Agreement
or that would impede any party’s ability to receive the full benefits to which
such party is entitled under this Agreement.
(b) Holdco
1 shall cause any and all shares of TAM Ordinary Stock beneficially owned by it
and entitled to vote at any meeting of shareholders of TAM to be present in
person or represented by proxy at all annual and special meetings of
shareholders of TAM to the extent necessary so that all shares of TAM Ordinary
Stock beneficially owned by it shall be counted as present for the purpose of
determining the presence of a quorum at such meeting. Each party agrees to
execute from time to time in the future any document or documents required by
Law to keep the agreements contained in this Section 1.04 in full force and
effect at all times throughout the term of this Agreement.
SECTION
1.05 TAM Chairman.
For so long as TEP is entitled to select at least one individual to be elected
as a board member of TAM, TEP shall have the right to designate from time to
time one of its Board Representatives to serve as the chairman of the TAM Board
(the “TAM
Chairman”). After any such designation, Holdco 1 shall cause the
TAM Board to appoint such Board Representative as the TAM Chairman in accordance
with the Organizational Documents of TAM. From and after the Effective
Time until the second anniversary of the Effective Time, the TAM Chairman shall
be Maria Cláudia Oliveira Amaro. In no event shall the TAM Chairman have a
casting vote with respect to any matter before the TAM Board.
SECTION
1.06 Meetings of the TAM
Board. Regular meetings of the TAM Board shall be held on a monthly
basis. Special meetings of the TAM Board may be called by the TAM Chairman
on not less than 48 hours’ notice to each board member of TAM, and such meetings
shall be called by the TAM Chairman with like notice and like manner promptly
after receipt of a written request for a special meeting of the TAM Board by any
one board member of TAM; provided, however, that
notwithstanding the foregoing a special meeting of the TAM Board may be so
called on any shorter notice permitted by applicable Law if necessary or
desirable in the particular circumstances.
– 3
–
SECTION
1.07 Quorum. The
quorum for any meeting of the TAM Board to be validly held shall be five board
members of TAM.
SECTION
1.08 TAM Board Voting
Requirements. Each board member of TAM shall have one vote on all
matters before the TAM Board. Any action by the TAM Board concerning a
Board Supermajority Matter as well as any other action required by applicable
Law or this Agreement to be approved by board members of TAM constituting more
than a simple majority of the board members of TAM must be approved by the
affirmative vote of five board members of TAM at a duly called meeting of the
TAM Board at which a quorum is present and acting throughout (each, a “Supermajority
Board Vote”). All actions by the TAM Board other than with respect
to Board Supermajority Matters must be approved by the affirmative vote of a
simple majority of the board members of TAM at a duly called meeting of the TAM
Board at which a quorum is present and acting throughout (each, a “Majority
Board Vote”).
SECTION
1.09 Board Supermajority
Matters. Notwithstanding any provision of this Agreement or the
other Organizational Documents of TAM or any of its Subsidiaries to the
contrary, neither TAM nor any of its Subsidiaries shall, and TAM shall not
permit any of its Subsidiaries to, engage in or take, directly or indirectly,
any of the following actions (each, a “Board
Supermajority Matter”), unless approved by a Supermajority Board
Vote:
(i) to
approve the Annual Budget and Business Plan and the Multi-Year Business Plan as
well as any amendment to any of the foregoing (collectively, to the extent so
approved, the “Approved
Plans”);
(ii) take
any action or agree to take any action that, individually or in the aggregate,
causes or is reasonably likely to cause any capital, operating or other
expense of TAM or any of its Subsidiaries (TAM and each such Subsidiary, a
“TAM
Company”) to be greater than (A) with respect to any action that would
affect the profit and loss statement, the lesser of 1% of revenue or 10% of
profit as set forth in the Approved Plans then in effect or (B) with respect to
any action that affects the cash flow statement, the lesser of 2% of assets or
10% of cash and cash equivalents (as defined by IFRS) as set forth in the
Approved Plans then in effect;
(iii) to
create (including by the acquisition of shares), dispose of or admit new
shareholders to any Subsidiary of any TAM Company, except to the extent
expressly contemplated in the Approved Plans then in effect;
(iv) to
approve the acquisition, disposal, modification or encumbrance by any TAM
Company of (a) any Equity Securities or Convertible Securities of any TAM
Company or any other companies, consortia, joint ventures or group of companies,
or (b) any other asset with a value greater than US$15,000,000, in each case
except to the extent expressly contemplated in the Approved Plans then in
effect;
– 4
–
(v) to
approve investments in any assets not related to the corporate purpose of any
TAM Company, except to the extent expressly contemplated in the Approved Plans
then in effect;
(vi) to
execute any kind of agreement or to enter into any kind of transaction in an
amount greater than US$15,000,000, or that may cause a material impact to any
TAM Company and/or its results, except to the extent expressly contemplated in
the Approved Plans then in effect;
(vii) to
execute any kind of agreement or to enter into any kind of transaction,
agreement or arrangement related to revenue or profit sharing agreements and any
other agreement for the implementation of joint ventures or business
collaborations, alliance memberships, codesharing agreements or other
arrangements of such nature whatsoever, except to the extent expressly
contemplated in the Approved Plans then in effect;
(viii) to
terminate, modify or waive any rights or claims of any TAM Company under
contracts or other arrangements in any amount greater than US$15,000,000, or
that may cause a material impact to any TAM Company and/or its results, except
to the extent expressly contemplated in the Approved Plans then in
effect;
(ix) to
commence, participate in, compromise or settle any material action with respect
to any litigation, judicial, administrative or arbitration proceeding relating
to any TAM Company, in an amount greater than US$15,000,000 or that could
reasonably be expected to cause a material impact to any TAM Company and/or its
results, except to the extent expressly contemplated in the Approved Plans then
in effect;
(x) to
approve the execution, amendment, termination or ratification of acts or
agreements with Related Parties, except to the extent expressly contemplated in
the Approved Plans then in effect;
(xi) to
approve the financial statements of any TAM Company or any amendments thereto or
any dividend, accounting and tax policy or principles of any TAM Company, as
well as the appointment and removal of the Accountants;
(xii) to
approve the grant of any kind of security interest or guarantees to secure
obligations of third parties (including Related Parties);
(xiii) to
appoint any executive other than the TAM Diretoria or to re-elect the
then current TAM CEO or TAM CFO; and
(xiv) approve
any vote to be cast by any TAM Company in the shareholders meetings, quotaholder
meetings and board meetings of its Subsidiaries, including approval of any of
the matters set forth in Section 1.11 involving any Subsidiary of TAM (being any
reference to TAM thereunder applicable to the respective TAM
Company).
– 5
–
SECTION
1.10 Shareholder Required
Vote. Any action by the shareholders of TAM concerning a
Shareholder Supermajority Matter as well as any other action required by
applicable Law or this Agreement to be approved by more than a simple majority
of the holders of the then issued and outstanding shares of TAM Ordinary Stock
or TAM Stock must be approved by the affirmative vote of the holders of shares
representing at least 85% of the total number of shares of TAM Ordinary Stock or
TAM Stock, as the case may be, then issued and outstanding at a duly called
meeting of the shareholders of TAM at which a quorum is present and acting
(each, a “Supermajority
Shareholder Vote”). All actions other than Shareholder
Supermajority Matters must be approved by the affirmative vote of the holders of
shares constituting a simple majority of the issued and outstanding shares of
TAM Ordinary Stock at a duly called meeting of the shareholders of TAM at which
a quorum is present and acting throughout.
SECTION
1.11 Shareholder Supermajority
Matters. Notwithstanding any provision of this Agreement or the
Organizational Documents of TAM or any of its Subsidiaries to the contrary,
neither TAM nor any of its Subsidiaries shall, and TAM shall not permit any of
its Subsidiaries to, engage in or take, directly or indirectly, any of the
following actions unless approved by a Supermajority Shareholder Vote (each, a
“Shareholder
Supermajority Matter”):
(i) to
approve any amendments to the by-laws of any TAM Company in respect of the
following matters: (A) the corporate purpose, (B) the corporate capital,
(C) the rights inherent to each class of shares and to the shareholders of
any TAM Company, (D) the attributions of the shareholders regular meetings or
any limitation to attributions of the board of directors of any TAM Company, (E)
increase or decrease in the number of board members and officers of any TAM
Company, (F) the term of any TAM Company, (G) the change of the corporate
headquarters of any TAM Company, (H) preemptive rights, (I) the
composition, attributions and liabilities of the management of any TAM Company,
and (J) dividends and other distributions;
(ii) to
approve the dissolution, liquidation and winding up of TAM;
(iii) to
approve the transformation, merger, spin-up, or any kind of corporate
reorganization of TAM;
(iv) to
pay or distribute dividends or any other kind of distributions, including
interest on capital, to the shareholders of TAM; and
(v) to
approve the issuance, redemption or amortization of any debt securities, Equity
Securities or Convertible Securities into shares of TAM.
– 6
–
SECTION
1.12 TAM
Subsidiaries.
(a) Airline
Subsidiaries. With respect to each Subsidiary of TAM that is
subject to the Foreign Ownership Control Laws (collectively, “Airline
Subsidiaries”), all provisions relating to the governance and operations
of such Subsidiary shall be identical to the provisions contained herein
relating to the governance and operations of TAM, including, in the case of any
such Subsidiaries that are managed by a board of directors, the provisions
governing the composition and operation of such boards of directors (excluding
those provisions relating to the dates for and frequency of meetings and actions
requiring a Supermajority Board Vote or a Supermajority Shareholder
Vote).
(b) Other
Subsidiaries. Except as otherwise specified in this Section
1.12(b), with respect to each Subsidiary of TAM other than an Airline
Subsidiary, the provisions relating to the governance and operations of such
Subsidiary shall be identical to the provisions contained herein relating to the
governance and operations of TAM, including, in the case of any such
Subsidiaries that are managed by a board of directors, the provisions governing
the composition and operation of such boards of directors (excluding those
provisions relating to the dates for and frequency of meetings and actions
requiring a Supermajority Board Vote or a Supermajority Shareholder Vote).
With respect to any such Subsidiaries that are wholly-owned by TAM, the board of
directors of any such Subsidiary shall be comprised of an equal number of board
members of such Subsidiary selected by each of LATAM and TEP and all actions of
the board of directors of any such Subsidiary must be approved by the
affirmative vote of a majority of the board members of such Subsidiary thereof
at a duly called meeting of such board of directors at which a quorum is present
and acting throughout. With respect to any such Subsidiary that is not
wholly owned by TAM, each of LATAM and TEP shall have the right to elect an
equal number of board members of any such Subsidiary (unless TAM and/or its
Subsidiaries have the right to elect an odd number of board members of such
Subsidiary, in which case LATAM shall have the right to select the last board
member), and the board members elected to any such Subsidiary shall not take any
action unless and until all of such board members selected by LATAM and TEP have
been elected and agree to take such action.
(c) Notwithstanding
the foregoing provisions of this Section 1.12, if any requirement in clause (a)
or (b) in this Section 1.12 would conflict with applicable Law as it applies to
any Subsidiary of TAM or materially limit the business or operations of any such
Subsidiary, then the Shareholders shall discuss and agree how to modify such
requirements in respect of such Subsidiary in order to comply with Law or avoid
such material limitation.
SECTION
1.13 Required
Actions. Each of TAM and each of its Subsidiaries shall exercise
all rights it has as a shareholder of each of its respective Subsidiaries in an
effort to cause such Subsidiary to comply with the requirements of this
Agreement; provided,
however, that the
foregoing sentence shall not be construed to require TAM or any of its
Subsidiaries to take, and in exercising such rights none of them will take, any
action that would cause any board member of each such respective Subsidiary to
breach his or her fiduciary duties.
– 7
–
ARTICLE
II
TAM
GROUP DIRETORIA
SECTION
2.01 Role of
Management.
(a) Management of
TAM. The day-to-day business and affairs of TAM shall be
managed by the TAM Diretoria (as defined below)
under the oversight of the TAM Board. The Diretoria of TAM shall be
comprised of the TAM CEO, the TAM CFO, the TAM COO and the TAM CCO
(collectively, the “TAM
Diretoria”).
The term of office for each of the members of the TAM Diretoria shall be two
years.
SECTION
2.02 TAM Chief Executive
Officer. As of the Effective Time, Marco Bologna will be the chief
executive officer (Diretor
Presidente) of TAM and its Subsidiaries (collectively, the “TAM
Group”, and such chief executive officer, the “TAM
CEO”). The TAM CEO shall have general supervision, direction and
control of the business and operations of the TAM Group and shall carry out all
orders and resolutions of the TAM Board. Without limitation of the
foregoing, the TAM CEO shall have the following responsibilities:
(i) conducting
the day-to-day management of the TAM Group;
(ii) serving
as the company officer of the TAM Group and as the representative of the LATAM
Group before all Governmental Entities in Brazil, including the Brazilian
government and National Civil Aviation Agency of Brazil (Agência Nacional de
Aviação, or ANAC);
(iii) together
with the chief executive officer (Vice Presidente Ejecutivo) of
LATAM and the chief operating officer (Gerente General) of LATAM,
implementing the integration of LATAM and its Subsidiaries and TAM and its
Subsidiaries; and
(iv) serving
as a senior participant in all business unit and function committees of the
LATAM Group.
The term
of the TAM CEO shall be two years. Subject to Section 1.09(xiii), the
TAM CEO shall be reelected at the end of his or her current term unless a
Departure of the TAM CEO occurs prior to the end of such current term. In
the case of any election other than a re-election of the then current TAM CEO,
TEP shall recommend to LATAM in writing three potential candidates for
appointment by the TAM Board as the TAM CEO. Any potential candidates for
the office of the TAM CEO shall be recommended by, or shall have received a
favorable evaluation from, one of the three then-leading executive search
companies in Brazil. Prior to the next regular meeting of the TAM Board,
LATAM shall notify TEP and Holdco 1 in writing of its selection of one
individual from among the list of three potential candidates provided by TEP for
appointment as the TAM CEO, and promptly thereafter TEP and LATAM shall each
cause their respective Board Representatives, and Holdco 1 shall cause the board
members of TAM, to approve the candidate as the next TAM CEO.
– 8
–
SECTION
2.03 TAM Chief Financial
Officer. The TAM CFO shall be in charge of all financial matters
pertaining to TAM and its Subsidiaries and shall have such other duties as may
be determined, from time to time, by the TAM Board or the TAM CEO. The TAM
CFO shall report directly to the TAM CEO. Prior to the Effective Time,
LATAM and TEP shall agree upon the individual to serve as the initial chief
financial officer of TAM (the “TAM
CFO”). The term of the TAM CFO shall be two years. Subject to
Section 1.09(xiii), the TAM CFO shall be reelected at the end of his or her
current term unless a Departure of the TAM CFO occurs prior to the end of such
current term. In the case of any election other than the re-election of
the then current TAM CFO, LATAM shall recommend to TEP in writing three
potential candidates for appointment by the TAM Board as the TAM CFO. Any
potential candidates for the office of the TAM CFO shall be recommended by, or
shall have received a favorable evaluation from, one of the three then-leading
executive search companies in Brazil and in selecting such candidates, LATAM
shall be guided by the following principles: (a) alignment with the
strongest performing leader, i.e., the best of breed;
(b) maximization of synergy value capture; (c) conforming to local
regulations and culture; and (d) simplest and easiest execution. Prior to
the next regular meeting of the TAM Board, TEP shall notify Holdco 1 and LATAM
in writing of its selection of one individual from among the list of three
potential candidates provided by LATAM for appointment as the TAM CFO, and
promptly thereafter each of LATAM and TEP shall each cause their respective
Board Representatives, and Holdco 1 shall cause the board members of TAM, to
vote to approve the candidate as the next TAM CFO.
SECTION
2.04 Other Members of the TAM
Diretoria.
Prior to the Effective Time, LATAM and TEP shall agree upon the individuals to
serve as the initial chief operating officer of TAM (“TAM
COO”) and the chief commercial officer of TAM (“TAM
CCO”). From and after the Effective Time, potential candidates for
offices of each of the TAM COO and TAM CCO shall be jointly selected and
recommended to the TAM Board by the TAM CEO and the TAM CFO and shall be
approved by a Majority Board Vote of the TAM Board. LATAM and TEP each
agrees to cause their respective Board Representatives, and Holdco 1 agrees to
cause the board members of TAM, to act through the relevant governing body to
vote to approve the candidates for the offices of TAM COO and TAM CCO selected
jointly by the TAM CEO and the TAM CFO.
SECTION
2.05 TAM Linhas Aereas
S.A.
The Diretoria of
TAM Linhas Aereas S.A. shall be comprised of the same individuals who comprise
the TAM Diretoria and
two other officers who shall be selected and appointed in accordance with
Section 2.04, mutatis
mutandis.
– 9
–
ARTICLE
III
ACCOUNTING,
BOOKS AND RECORDS
SECTION
3.01 Fiscal Year.
The fiscal year of TAM and its Subsidiaries shall end on December 31 in each
year (the “Fiscal
Year”).
SECTION
3.02 Accountants.
Unless and until removed or changed by Supermajority Board Vote, the independent
public accountants for the TAM Group shall be PricewaterhouseCoopers LLP (the
“Accountants”).
SECTION
3.03 Financial
Statements. From and after the Effective Time, TAM shall prepare
and deliver (or cause to be prepared and delivered) to each Shareholder the
following financial reports with respect to TAM and its Subsidiaries on a
consolidated basis and for Multiplus S.A. on a stand-alone basis:
(i) within
five business days after the end of each calendar month, monthly management
reports in a format approved by the TAM Board;
(ii) within
ten business days after the end of any of the first three fiscal quarters of
each Fiscal Year, an unaudited balance sheet as of the end of such fiscal
quarter and the related unaudited statements of operations, changes in
stockholders’ equity and cash flows for the fiscal quarter then ended and for
the period from the beginning of the then-current Fiscal Year to the end of such
fiscal quarter, in each case with comparative statements for the prior Fiscal
Year; and
(iii) within
thirty business days after the end of each Fiscal Year, an annual report,
including (x) a balance sheet as of the end of such Fiscal Year and the related
consolidated statements of operations, changes in stockholders’ equity and cash
flows for the Fiscal Year then-ended and audited in accordance with
International Financial Reporting Standards issued by the International
Accounting Standards Board (“IFRS”)
or such other accounting principles as the TAM Board may approve, in each case
with comparative statements for the prior Fiscal Year, and (y) a discussion of
the implementation of the Approved Plans as it relates to business strategy,
achievement of basic goals, revenues, expenses, executive compensation, capital
expenditures, financing, insurance, cash flows, appointment of agents or
advisers and strategic alliances.
SECTION
3.04 Books and
Records.
(a) TAM
shall keep, and shall cause each of its Subsidiaries to keep, in all material
respects, at their respective principal offices, full, complete and accurate
books and records with respect to the business and affairs of the TAM
Group. The books and records shall be maintained in a manner that provides
Shareholders with sufficient information so as to permit (i) the preparation of
consolidated financial statements for TAM and its Subsidiaries and financial
statements for Multiplus S.A. on a stand-alone basis, in each case in accordance
with IFRS, (ii) the Shareholders to account for their interests
in TAM and its Subsidiaries in their respective financial statements
in accordance with IFRS, and (iii) the preparation of all required tax returns
of TAM and its Subsidiaries and of the Shareholders.
– 10
–
(b) TAM
shall, as and when reasonably requested by any Shareholder, prepare and furnish
(or cause to be prepared and furnished) to such Shareholder, at the expense of
TAM, such financial and other data concerning the business and affairs of the
TAM Group as may be reasonably required by such Shareholder for tax, accounting,
reporting, oversight, or other legitimate business purposes of such Shareholder,
such information to be prepared on the basis and in the format that such
Shareholder may reasonably request in order to meet the requirements of its
accounting, tax and oversight and reporting systems or the requirements of
Law.
(c) TAM
shall, and shall cause each of its Subsidiaries to, retain for not less than ten
years and for such longer period as required by Law, all of their respective
books and records (including the books and records of predecessor businesses,
including those relating to periods prior to the Effective Time).
SECTION
3.05 Access to Information, Audit
and Inspection.
(a) Each
Shareholder and its Representatives shall have (and TAM shall cause its
Subsidiaries to provide such Shareholder and its Representatives with) full
access at reasonable times and during normal business hours to all books and
records for the TAM Group and their respective businesses (including those books
and records pertaining to periods prior to the Effective Time), including the
right to examine and audit any of such books and records and to make copies and
extracts therefrom. Each Shareholder shall bear all expenses incurred by
it and its Representatives in making any such examination on its behalf.
TAM shall, and shall cause each of its Subsidiaries to, make arrangements for
each Shareholder and its Representatives to have prompt access at reasonable
times and during normal business hours to its officers, board members and
employees to discuss the business and affairs of the TAM Group and the books and
records pertaining thereto. The provisions of this Section 3.05(a) shall
survive any termination of this Agreement and shall continue to apply to TAM and
its Subsidiaries and be enforceable by any Shareholder regardless of whether
such Shareholder ceases to beneficially own any shares of TAM Stock but only to
the extent that such books and records and such access to officers, board
members and other employees are reasonably requested by a Shareholder in
connection with any pending Action involving such Shareholder or any of its
Affiliates insofar as such matter relates to the business or affairs of TAM and
its Subsidiaries (including any matters relating to the business and affairs of
any predecessor businesses, including matters relating to periods prior to the
Effective Time).
– 11
–
(b) TAM
shall provide each Shareholder with copies of each completed annual tax return
required by Law to be filed by TAM or any of its Subsidiaries (each, a “Tax
Return”) at least twenty business days prior to the due date (including
any extensions of such due date) of the filing of such Tax Return, and each
Shareholder may review any such Tax Return prior to its filing with the
appropriate Governmental Entity. TAM shall consult with the Shareholders
and negotiate in good faith to resolve any issues arising as a result of the
Shareholders’ review of any such Tax Return. The Shareholders and TAM and
its Subsidiaries shall use all reasonable good faith efforts to resolve any
issue in dispute as promptly as practicable but in any event prior to the due
date for the filing of any such Tax Return. In the event that an issue
resulting from the review by a Shareholder of any such Tax Return remains in
dispute as of the due date for the filing of such Tax Return, such Tax Return
shall be filed with the appropriate Governmental Entity in accordance with the
recommendation of the Accountants.
SECTION
3.06 Annual Budget and Business
Plan.
(a) On
or prior to October 31st of each
calendar year, the TAM CEO and the TAM CFO shall prepare or cause to be
prepared, and shall submit for approval of the TAM Board, (i) a proposed
annual budget and business plan (each, an “Annual
Budget and Business Plan”) for the upcoming Fiscal Year and (ii) a
proposed five-year business plan for the next five Fiscal Years (each, a “Multi-Year
Business Plan”), in each case for TAM and its Subsidiaries on a
consolidated basis and for Multiplus S.A. on a stand-alone basis. Each of
the proposed Annual Budget and Business Plan and Multi-Year Business Plan shall
include all of the applicable items set forth in Schedule 3.06 and be in a
format acceptable to the TAM Board.
(b) The
TAM Board shall convene a meeting within fifteen business days after receipt of
the proposed Annual Budget and Business Plan and Multi-Year Business Plan for
the upcoming Fiscal Year from the TAM CEO to discuss whether and to what extent
to approve each of the foregoing for the upcoming Fiscal Year. If all or
any portion of any of the proposed Annual Budget and Business Plan or Multi-Year
Business Plan is not approved in all respects by a Supermajority Board Vote of
the TAM Board at any such meeting of the TAM Board or any adjournment thereof,
the TAM Chairman shall notify the TAM CEO in reasonable detail of the TAM
Board’s objections to the proposed Annual Budget and Business Plan and/or
Multi-Year Business Plan, as the case may be, and within thirty days following
the TAM CEO’s receipt of such notice, the TAM CEO and the TAM CFO shall
collaborate with two board members of TAM, one selected by TEP and another
selected by LATAM, to modify such Annual Budget and Business Plan and/or
Multi-Year Business Plan to address the comments and concerns of the TAM
Board. Within ten business days after receipt of any revised Annual Budget
and Business Plan and/or Multi-Year Business Plan from the TAM CEO, the TAM
Board shall convene a second meeting to discuss whether or not to approve the
same. If the TAM Board does not approve the adoption of any such proposed
Annual Budget and Business Plan and/or Multi-Year Business Plan in its entirety
because of disagreement on one or more line items set forth in the proposed
Annual Budget and Business Plan and/or Multi-Year Business Plan, as the case may
be, then the Multi-Year Business Plan for the current Fiscal Year shall be
deemed adopted as the Annual Budget and Business Plan for the upcoming Fiscal
Year.
(c) The
TAM Board shall cause TAM and its Subsidiaries to operate in accordance with,
and the officers and employees of TAM and its Subsidiaries to implement, any
Annual Budget and Business Plan and Multi-Year Business Plan for the
then-upcoming Fiscal Year approved by a Supermajority Board Vote of the TAM
Board and shall conduct, or cause to be conducted, the business of TAM and its
Subsidiaries in accordance with any such Annual Budget and Business Plan and/or
Multi-Year Business Plan, as the case may be.
– 12
–
ARTICLE
IV
GENERAL
PROVISIONS
SECTION
4.01 Term of
Agreement. Except as otherwise provided under applicable Law, this
Agreement shall continue in effect as to each of the Parties until (i) it is
terminated as to any Party by the written consent of all the Parties or (ii)
with respect to any Shareholder, the first day on which such Shareholder no
longer beneficially owns any shares of TAM Stock, whichever is sooner to
occur. The termination of this Agreement as to any Shareholder shall not
affect any of the rights and obligations of any of the other Parties with
respect to each other. In the event that this Agreement terminates as to
any Shareholder, thereafter such Shareholder shall have no further liability to
the other Parties or to any of their respective shareholders, board members,
officers, employees or other Affiliates and such other Parties shall have no
further liability to such Shareholder, in each case solely in respect of this
Agreement; provided,
however, that the
foregoing shall not apply to any provisions hereof that expressly survive the
termination of this Agreement (including Sections 3.05 and 4.02); and provided, further, that nothing herein
shall relieve any Party of any liability for any breach of this Agreement that
occurred prior to such termination.
SECTION
4.02 Fees and
Expenses. All fees and expenses incurred in connection with this
Agreement shall be paid by the Party incurring such fees or expenses. The
provisions of this Section 4.02 shall survive any termination of this
Agreement.
SECTION
4.03 Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES
THEREOF; PROVIDED, HOWEVER, THAT NOTWITHSTANDING
THE FOREGOING THE AUTHORIZATION AND EXECUTION OF THIS AGREEMENT BY EACH PARTY
SHALL BE GOVERNED BY THE LAW OF ITS JURISDICTION OF INCORPORATION.
SECTION
4.04 Definitions.
For the purposes of this Agreement, the following terms shall have the meanings
assigned below:
(a) “Actions”
means any actions, suits, claims, allegations, hearings, proceedings,
arbitrations, mediations, audits, inquiries or investigations (whether civil,
criminal, administrative or otherwise).
(b) “Affiliate”
shall have the meaning assigned to such term in Rule 12b-2 under the U.S.
Exchange Act; provided,
however, that no
Shareholder shall be deemed to be an Affiliate of any other Shareholder or any
of its Affiliates solely by reason of this Agreement.
– 13
–
(c) “beneficial
ownership” (and its correlative phrases) shall have the meanings assigned
to such phrases in Rule 13d-3 promulgated under the U.S. Exchange Act (without
taking into account any rights of such Person or any of its Affiliates under
Section 1.04 hereof) if the references to “within 60 days” in Rule
13d-3(d)(1)(i) were omitted.
(d) “board
member” shall mean, with respect to any Person, any member of the board
of directors (or comparable governing body) of such Person.
(e) “business
day” shall mean any day that is not a Saturday, Sunday or a day on which
banking institutions are required or authorized by Law or executive order to be
closed in Santiago, Chile or São Paulo, Brazil.
(f) “contract”
shall mean any loan, credit agreement, bond, debenture, note, mortgage,
indenture, lease, supply agreement, license agreement, development agreement or
other contract, agreement, obligation, commitment or instrument or other legally
binding arrangement or understanding, whether written or oral.
(g) “Control” (and its correlative
terms) shall have the meanings assigned to such terms in Rule 12b-2
promulgated under the U.S. Exchange Act.
(h) “Convertible
Securities” means, with respect to any Person, any securities, options,
warrants or other rights of, or granted by, such Person or any of its Affiliates
that are, directly or indirectly, convertible into, or exercisable or
exchangeable for, any Equity Securities of such Person or any of its
Affiliates.
(i)
“Equity
Securities” means, with respect to any Person, any capital stock of, or
other equity interests in such Person.
(j)
“Foreign
Ownership Control Laws” shall mean any Law of Brazil or of any other
applicable jurisdiction that establishes limitations on equity ownership or
control by foreign nationals in respect of a Brazilian carrier or a foreign
airline which is a subsidiary of a Brazilian carrier.
(k) “Governmental
Entity” means any governmental, quasi-governmental or regulatory
authority, body, department, commission, board, bureau, agency, division, court,
organized securities exchange or other legislative, executive or judicial
governmental entity or instrumentality of any country, nation, republic,
federation or similar entity or any state, county, parish or municipality,
jurisdiction or other political subdivision thereof.
(l)
“LATAM
Group” means LATAM, Holdco 1, TAM and their respective
Subsidiaries.
(m) “Law”
means any statute, common law, ordinance, rule, regulation, agency requirement
or Order of, or issued, promulgated or entered into by or with, any Governmental
Entity.
– 14
–
(n) “Order”
means any order, decision, writ, injunction, decree, judgment, legal or
arbitration award, stipulation, license, permit or agreement issued, promulgated
or entered into by or with (or settlement or consent agreement subject to) any
Governmental Entity.
(o) “Organizational
Documents” shall mean, with respect to TAM and its Subsidiaries, this
Agreement and the by-laws or other comparable governing documents of such
Persons.
(p) “Person”
means any natural person, firm, corporation, partnership, company, limited
liability company, joint venture, association, trust, unincorporated
organization, Governmental Entity or other entity.
(q) “Related
Party” means (a) any Person that, individually or jointly with
other(s), directly or indirectly (i) controls TAM or any of its Subsidiaries;
(ii) is controlled by TAM or any of its Subsidiaries; or (iii) is controlled by
any Person that controls, individually or jointly with other(s), TAM or any of
its Subsidiaries; (b) any successor of the controlling shareholder of TAM or any
of its Subsidiaries, in the event of dissolution, capital decrease by the
delivery of shares to shareholders, spin-off and any other corporate
transaction; and (c) any board member, officer or manager of the companies
mentioned above.
(r) “Representatives,”
with respect to any Person, shall mean the board members, officers, employees,
auditors, accountants, legal counsel, financial advisors and other agents or
representatives of or to such Person and its Subsidiaries.
(s) “Subsidiary”
means, with respect to any Person, (i) a corporation in which such Person,
together with its Subsidiaries, beneficially owns Voting Securities of such
corporation which entitle them, collectively, to cast more than 50% of all the
votes entitled to be cast by the holders of all Voting Securities of such
corporation then outstanding in a general election of board members of such
corporation or (ii) any Person that is not a corporation in which such Person,
and/or one or more other Subsidiaries of such Person, directly or indirectly,
has a majority equity or voting interest or the power to direct the policies,
management and affairs thereof.
(t)
“U.S.
Exchange Act” shall mean the U.S. Securities Exchange Act of
1934.
(u) “Voting
Securities” means, with respect to any Person, any securities or other
equity or ownership interests in such Person which are entitled to vote
generally in the election of board members of such Person (or, if such Person is
not a corporation, the individuals who perform a similar function for such
Person).
– 15
–
SECTION
4.05 Severability.
The provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity or
enforceability of the other provisions of this Agreement. If any provision
of this Agreement, or the application of such provision to any Person or any
circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other Persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application of
such provision, in any other jurisdiction.
SECTION
4.06 Amendment;
Waiver. This Agreement may be amended and any performance, term or
condition waived in whole or in part only by a writing signed by all Parties
affected by the amendment (in the case of an amendment) or by the Party against
whom the waiver is to be effective (in the case of a waiver). No failure
or delay by any Party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any singular partial exercise of
such right, power or privilege preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. Waiver by any Party
of any breach or failure to comply with any provision of this Agreement by
another Party shall not be construed as, nor shall constitute, a continuing
waiver of such provisions, or a waiver of any other breach of or failure to
comply with any other provisions of this Agreement.
SECTION
4.07 Assignment.
Neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned, in whole or in part, by operation of Law or otherwise by any
of the Parties without the prior written consent of the other Parties, and any
purported assignment without such consent shall be null and void and of no force
or effect. Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of, and be enforceable by, the Parties and
their respective successors and permitted assigns.
SECTION
4.08 No Third-Party
Beneficiaries. Except as otherwise expressly stated herein, the
Parties hereby agree that the agreements and covenants set forth herein are
solely for the benefit of the other Parties in accordance with, and subject to
the terms of, this Agreement and that this Agreement is not intended to, and
does not, confer upon any Person other than the Parties any rights or remedies
hereunder, including the right to rely upon the representations and warranties
set forth herein.
SECTION
4.09 Notices. All
notices, requests, claims, demands, instructions and other communications or
documents given hereunder shall be in writing and shall be delivered personally
or sent by registered or certified mail (postage prepaid), facsimile or
overnight courier to the Parties at the following addresses (or at such other
address for a Party as shall be specified by like notice):
– 16
–
If to
LATAM, to:
Claro y
Cia.
Apoquindo
3721, piso 13,
Santiago,
Chile
Attention:
José María Eyzaguirre B.
Fax: +56
2 367 3003
jmeyzaguirre@claro.cl
with
copies (which shall not constitute notice) to:
Sullivan
& Cromwell LLP
125 Broad
Street
New York,
NY 10004
United
States of America
Attention:
Sergio Galvis and Duncan McCurrach
Fax: +1
212 558 3588
galviss@sullcrom.com
mccurrachd@sullcrom.com
If to TAM
or Holdco 1 to:
Turci
Advogados
Rua Dr.
Renato Paes de Barros, 778
-1◦ andar
– cj.12
04530-0001
São Paulo
– SP
Brasil
Attention:
Flavia Turci
Fax: +55
11 2177 2197
turci@turci.com
with a
copy (which shall not constitute notice) to:
Clifford
Chance US LLP
31 West
52nd Street
New York,
NY 10019
Attention:
Sarah Jones and Anand Saha
Fax: +1
212 878 8375
Sarah.Jones@CliffordChance.com
Anand.Saha@CliffordChance.com
Any
notice, request, claim, instruction or other communication or document given as
provided above shall be deemed given to the receiving party (i) if delivered
personally, upon actual receipt, (ii) if sent by registered or certified mail,
three business days after deposit in the mail, (iii) if sent by facsimile, upon
confirmation of successful transmission if within one business day after such
facsimile has been sent such notice, request, claim, instruction or other
communication or document is also given by one of the other methods described
above and (iv) if sent by overnight courier, on the next business day after
deposit with the overnight courier.
– 17
–
SECTION
4.10 Specific Enforcement;
Consent to Jurisdiction. The Parties agree that irreparable damage
would occur and that the Parties would not have any adequate remedy at Law in
the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the Parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement, this being in addition to any other
remedy to which they are entitled at Law or in equity, without the necessity of
proving the inadequacy of monetary damages or of posting bond or other
undertaking, as a remedy and to obtain injunctive relief against any breach or
threatened breach hereof. In the event that any Action is brought in
equity to enforce the provisions of this Agreement, no Party shall allege, and
each Party waives the defense or counterclaim that there is an adequate remedy
at Law. Each of the Parties hereby irrevocably consents and submits itself
to the personal jurisdiction of the courts of the State of New York and the
federal courts of the United States of America located in the Borough of
Manhattan, The City of New York (collectively, the “Agreed
Courts”) solely in respect of the interpretation and enforcement of the
provisions of this Agreement, and the documents referred to herein and the
transactions contemplated by this Agreement (collectively, the “Agreed
Issues”), waives, and agrees not to assert, as a defense in any Action,
suit or proceeding in an Agreed Court with respect to the Agreed Issues that
such Party is not subject thereto or that such Action, suit or proceeding may
not be brought or is not maintainable in such Agreed Court or that the venue
thereof may not be appropriate or that this Agreement or any such document may
not be enforced in or by such Agreed Court, and the Parties irrevocably agree
that all claims with respect to any Action, suit or proceeding with respect to
the Agreed Issues shall be heard and determined only in an Agreed Court.
The Parties hereby consent to and grant to each Agreed Court jurisdiction over
the Person of such parties and, to the extent permitted by Law, over the subject
matter of any dispute with respect to the Agreed Issues and agree that mailing
of process or other papers in connection with any such Action or proceeding in
the manner provided in Section 4.09 or in such other manner as may be permitted
by Law shall be valid and sufficient service thereof.
SECTION
4.11 WAIVER OF JURY
TRIAL. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY
WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND
DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR OTHER
PROCEEDING ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY. EACH PARTY HERETO (I) CERTIFIES THAT IT HAS CONSIDERED THE
IMPLICATIONS OF THIS WAIVER AND MADE IT VOLUNTARILY AND THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY ACTION, SUIT OR PROCEEDING,
SEEK TO ENFORCE THE FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT IT AND THE
OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG
OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS
SECTION 4.11.
– 18
–
SECTION
4.12 Counterparts.
This Agreement may be executed in one or more counterparts (including by
facsimile), each of which shall be considered an original instrument and all of
which shall together constitute the same agreement. This Agreement shall
become effective when one or more counterparts have been signed by each of the
Parties and delivered to the other Parties.
SECTION
4.14 Filing
Requirement. A copy of this Agreement shall be filed at the
headquarters of TAM for all purposes of applicable Law.
– 19
–
IN
WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed by
their respective officers thereunto duly authorized as of the date first above
written.
|
LAN
AIRLINES S.A.
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
|
TAM
S.A.
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
|
TEP
CHILE S. A.
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
|
[HOLDCO
1]
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
Exhibit
99.9
ORGANIZATIONAL
STRUCTURE CHART
