Exhibit 10.54
AMENDED AND RESTATED
COMMON AGREEMENT
AMONG
PEGASO COMUNICACIONES Y SISTEMAS, S.A. DE C.V.
PEGASO PCS, S.A., DE C.V.
PEGASO TELECOMUNICACIONES, S.A. DE C.V.
PEGASO RECURSOS HUMANOS, S.A. DE C.V.
PEGASO FINANZAS, S.A. DE C.V.
PEGASO FINCO I, S.A. DE C.V.
AND
BANCO NACIONAL DE MEXICO, S.A., GRUPO FINANCIERO BANAMEX
AS COLLATERAL AGENT,
CITIBANK, N.A.
AS INTERCREDITOR AGENT,
CITIBANK INTERNATIONAL PLC,
AS ALCATEL ADMINISTRATIVE AGENT,
ABN AMRO BANK N.V.,
AS QUALCOMM ADMINISTRATIVE AGENT
AND
ELECTRO BANQUE
AS FACILITY 2 ADMINISTRATIVE AGENT
DATED AS OF SEPTEMBER 10, 2002
TABLE OF CONTENTS
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ARTICLE I Definitions And Principles Of Construction................................................. 2
1.01 Definitions.............................................................................. 2
1.02 Principles of Construction............................................................... 2
1.03 Conflicts................................................................................ 3
ARTICLE II Credit Facilities......................................................................... 3
2.01 Indebtedness Subject to this Agreement................................................... 3
2.02 Senior Indebtedness Pari Passu........................................................... 3
2.03 Pro Rata Payment of Obligations.......................................................... 3
2.04 Additional Senior Indebtedness........................................................... 3
2.05 Prepayments.............................................................................. 5
2.06 Payments................................................................................. 7
2.07 Swap Agreements as Senior Indebtedness................................................... 7
ARTICLE III Conditions Precedent..................................................................... 8
3.01 Conditions Precedent to Initial Disbursement............................................. 8
3.02 Conditions Precedent to All Disbursements................................................ 14
3.03 No Waiver................................................................................ 15
3.04 Delivery of Certificates, Etc............................................................ 15
3.05 Beneficiaries of Conditions to Disbursements............................................. 15
ARTICLE IV Representations And Warranties............................................................ 16
4.01 Corporate Status......................................................................... 16
4.02 Corporate Power and Authority............................................................ 16
4.03 Valid and Binding Obligation............................................................. 16
4.04 No Violation............................................................................. 17
4.05 Permits.................................................................................. 17
4.06 Financial Statements; Financial Condition; Undisclosed Liabilities; Etc.................. 17
4.07 Litigation; Labor Disputes............................................................... 18
4.08 Tax Returns and Payments................................................................. 18
4.09 Capitalization........................................................................... 19
4.10 Subsidiaries, Mortgage and Minimum Assets................................................ 19
4.11 Compliance with Applicable Law........................................................... 20
4.12 Property Rights.......................................................................... 20
4.13 Single-Purpose........................................................................... 20
4.14 Fees and Enforcement..................................................................... 20
4.15 Foreign Exchange Approvals............................................................... 21
4.16 Liens.................................................................................... 21
4.17 Title; Security Documents................................................................ 21
4.18 Transaction Documents.................................................................... 22
4.19 Certain Ancillary Services............................................................... 22
4.20 Environmental Matters.................................................................... 22
4.21 Investment Company Act................................................................... 23
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4.22 True and Complete Disclosure............................................................. 23
4.23 No Additional Fees....................................................................... 23
4.24 Use of Proceeds.......................................................................... 23
4.25 Insurance................................................................................ 24
4.26 Private Activities....................................................................... 24
4.27 No Subordination......................................................................... 24
4.28 Licenses................................................................................. 24
4.29 [Intentionally Omitted].................................................................. 24
4.30 Employee Benefit Plans; Employment Matters............................................... 24
4.31 [Intentionally Omitted].................................................................. 25
4.32 Indebtedness............................................................................. 25
ARTICLE V Affirmative Covenants...................................................................... 26
5.01 Information Covenants.................................................................... 26
5.02 Books, Records and Inspections; Accounting and Audit Matters............................. 29
5.03 Maintenance of Property and Insurance.................................................... 30
5.04 Corporate Franchises and System Permits; Enforcement of Transaction Documents............ 30
5.05 Compliance with Applicable Law........................................................... 31
5.06 Use of Proceeds.......................................................................... 31
5.07 Taxes; Proper Legal Form................................................................. 31
5.08 Credit Agreements........................................................................ 31
5.09 Additional Documents; Filings and Recordings............................................. 31
5.10 Condemnation Event; Casualty Event....................................................... 33
5.11 Application of Equity Contributions...................................................... 34
5.12 Translations............................................................................. 35
5.13 New Subsidiaries......................................................................... 35
5.14 Other Properties Subject to Liens; After-Acquired Property............................... 35
5.15 [Intentionally Omitted].................................................................. 36
5.16 [Intentionally Omitted].................................................................. 36
5.17 [Intentionally Omitted].................................................................. 36
5.18 Payment of Certain Fees.................................................................. 36
5.19 Consents, Approvals...................................................................... 36
5.20 Maintenance of Licenses.................................................................. 36
5.21 Site Acquisition......................................................................... 37
5.22 Minimum Assets........................................................................... 37
5.23 [Intentionally Omitted].................................................................. 37
5.24 Subordinated Loans....................................................................... 38
ARTICLE VI Negative Covenants........................................................................ 38
6.01 Liens.................................................................................... 38
6.02 Consolidation; Merger; Sale of Assets.................................................... 40
6.03 Restricted Payments...................................................................... 42
6.04 Indebtedness............................................................................. 43
6.05 Subsidiaries............................................................................. 45
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6.06 Advances, Investments and Loans.......................................................... 45
6.07 Affiliate Transactions................................................................... 45
6.08 No Other Business........................................................................ 46
6.09 EBITDA Test.............................................................................. 46
6.10 Leverage Ratios.......................................................................... 46
6.11 Limitation on Issuance of Stock.......................................................... 47
6.12 Prepayments.............................................................................. 47
6.13 Modifications of Certain Documents and Agreements........................................ 47
6.14 Abandonment of The System................................................................ 47
6.15 Hazardous Substances..................................................................... 47
6.16 Immunity................................................................................. 47
6.17 Regulations.............................................................................. 47
6.18 Investment Company Act................................................................... 47
6.19 Disputes................................................................................. 47
6.20 Collateral Outside Mexico................................................................ 48
ARTICLE VII Events Of Default........................................................................ 48
7.01 Payments................................................................................. 48
7.02 Representations.......................................................................... 48
7.03 Covenants................................................................................ 49
7.04 Default Under Other Agreements........................................................... 49
7.05 Involuntary Bankruptcy, Etc.............................................................. 50
7.06 Voluntary Bankruptcy, Etc................................................................ 50
7.07 Analogous Proceedings.................................................................... 50
7.08 Attachment of Collateral................................................................. 50
7.09 Financing Agreements..................................................................... 50
7.10 Expropriation............................................................................ 51
7.11 Monetary Restrictions.................................................................... 51
7.12 Judgments................................................................................ 51
7.13 Licenses and Permits..................................................................... 51
7.14 Change of Control........................................................................ 51
7.15 Other Senior Indebtedness................................................................ 51
7.16 Mortgage................................................................................. 52
7.17 Remedies................................................................................. 52
ARTICLE VIII Miscellaneous........................................................................... 52
8.01 Payment of Expenses, Etc................................................................. 52
8.02 Right of Setoff.......................................................................... 54
8.03 Notices.................................................................................. 54
8.04 Benefit of Agreement..................................................................... 55
8.05 No Waiver; Remedies Cumulative........................................................... 55
8.06 Severability............................................................................. 55
8.07 Counterparts............................................................................. 56
8.08 Effectiveness............................................................................ 56
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8.09 Survival................................................................................. 56
8.10 Currency of Payment...................................................................... 56
8.11 Judgment Currency........................................................................ 56
8.12 Evidence of Debt......................................................................... 57
8.13 English Language......................................................................... 57
8.14 Entire Agreement......................................................................... 57
8.15 Waiver of Sovereign Immunity............................................................. 57
8.16 Reinstatement............................................................................ 58
8.17 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL................... 58
8.18 Calculations; Computations............................................................... 59
8.19 No Third-Party Beneficiaries............................................................. 60
8.20 Amendments............................................................................... 60
8.21 Confidentiality.......................................................................... 60
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Amended and Restated Common Agreement
THIS AMENDED AND RESTATED COMMON AGREEMENT, dated as of
September 10, 2002 (this "Agreement"), among PEGASO COMUNICACIONES Y SISTEMAS,
S.A. DE C.V., a sociedad anonima de capital variable organized under the laws of
Mexico (the "Company" or the "Borrower"), PEGASO TELECOMUNICACIONES, S.A. DE
C.V., a sociedad anonima de capital variable organized under the laws of Mexico
("Holdings"), PEGASO PCS, S.A. DE C.V., a sociedad anonima de capital variable
organized under the laws of Mexico ("Pegaso PCS"), PEGASO RECURSOS HUMANOS, S.A.
DE C.V., a sociedad anonima de capital variable organized under the laws of
Mexico ("Personnel Co."), PEGASO FINANZAS, S.A. DE C.V., a sociedad anonima de
capital variable organized under the laws of Mexico ("Finanzas"), PEGASO FINCO
I, S.A. DE C.V., a sociedad anonima de capital variable organized under the laws
of Mexico ("Finco"), CITIBANK, N.A., a national banking organization under the
laws of the United States of America, acting through its branch located in New
York, New York, in its capacity as Intercreditor Agent (the "Intercreditor
Agent"), on behalf of the Senior Lenders, BANCO NACIONAL DE MEXICO, S.A., GRUPO
FINANCIERO BANAMEX, a national banking organization under the laws of the United
Mexican States, in its capacity as Collateral Agent (the "Collateral Agent"),
CITIBANK INTERNATIONAL PLC, a corporation organized under the laws of England,
in its capacity as Alcatel Administrative Agent (the "Alcatel Administrative
Agent"), on behalf of the Alcatel Lenders, and ABN AMRO BANK N.V., a Netherlands
banking organization in its capacity as Qualcomm Administrative Agent (the
"Qualcomm Administrative Agent") on behalf of the Qualcomm Lenders, ELECTRO
BANQUE, a corporation organized under the laws of France, in its capacity as
Facility 2 Administrative Agent (the "Facility 2 Administrative Agent") and the
other Senior Lenders executing this Agreement from time to time as contemplated
by Article 2 hereof, amends and restates the Existing Common Agreement (as
defined herein).
WITNESSETH:
WHEREAS, the members of the Borrower Group and the Agents are
parties to a Common Agreement, dated as of December 15, 1998 (as further amended
as of May 27, 1999 and October 10, 2001, the "Existing Common Agreement"); and
WHEREAS, Holdings has entered into the Stock Purchase
Agreement, dated as of April 26, 2002 (the "Stock Purchase Agreement"), by and
among Holdings, its Sponsors, Telefonica Moviles, S.A. ("TEM") and others
parties named therein, pursuant to which TEM shall purchase from certain of the
Sponsors all of the Capital Stock of Holdings owned by such Sponsors in
accordance with the terms and conditions of the Stock Purchase Agreement; and
WHEREAS, the members of the Borrower Group have requested
certain amendments to the Existing Common Agreement and the Credit Agreements in
accordance with the transactions contemplated in the Stock Purchase Agreement;
and
WHEREAS, the Secured Parties are willing to amend and restate
the Existing Common Agreement on the terms and condition hereof.
NOW, THEREFORE, in consideration of the foregoing premises and
the covenants and agreements contained herein and in the other Financing
Agreements, the parties hereto agree as follows:
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ARTICLE I
DEFINITIONS AND PRINCIPLES OF CONSTRUCTION
1.01 Definitions. For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise requires,
capitalized terms used in this Agreement, its appendices, schedules and exhibits
have the meanings given to such terms in Appendix A.
1.02 Principles of Construction. In this Agreement and the
other Financing Agreements and the appendices, exhibits and schedules hereto or
thereto (unless otherwise provided therein):
(a) The meanings set forth for defined terms in Appendix
A or in any Financing Agreement shall be equally applicable to both the singular
and plural forms of the terms defined and the masculine, feminine or neuter
gender shall include all genders.
(b) All references in any Financing Agreement to clauses,
sections, appendices, schedules and exhibits are to clauses, sections,
appendices, schedules and exhibits in or to such Financing Agreement unless
otherwise specified therein.
(c) The words "hereof," "herein" and "hereunder" and
words of similar import when used in a Financing Agreement shall refer to such
Financing Agreement as a whole and not to any particular provision of such
Financing Agreement.
(d) References in any Financing Agreement to any statute,
decree, regulation or other Applicable Law shall be construed as a reference to
such statute, law, decree, regulation or other Applicable Law as re-enacted,
redesignated, amended or extended from time to time, except as otherwise
provided in such Financing Agreement.
(e) References in any Financing Agreement to any
Transaction Document or any other document or agreement shall be deemed to
include references to such Transaction Document or such other document or
agreement as amended, varied, supplemented or replaced from time to time in
accordance with the terms of such Transaction Document, document or agreement
and this Agreement and to include any appendices, schedules, exhibits,
clarification letters, side letters and disclosure letters executed in
connection therewith.
(f) References to any Person or Persons shall be
construed as a reference to any successors or assigns of such Person or Persons
to the extent permitted under the Financing Agreements and, in the case of any
Governmental Authority, any Person succeeding to its functions and capacities.
(g) The table of contents and the headings of the several
sections and subsections of this Agreement or any Financing Agreement are
intended for convenience only and shall not in any way affect the meaning or
construction of any provision therein.
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(h) References to the words "include" or "including"
shall be deemed to be followed by "without limitation" or "but not limited to",
whether or not they are followed by such phrases or words of similar import.
(i) References to a number of days shall refer to
calendar days unless Business Days are otherwise specified.
(j) References to "the Borrower Group," to a "member of
the Borrower Group" or to "members of the Borrower Group" shall mean each member
of the Borrower Group agreeing, representing or otherwise acting on a joint and
several basis.
1.03 Conflicts. In the case of any conflict between the
terms of this Agreement and the terms of any Credit Agreement, the terms of such
Credit Agreement, as between the Company and the Senior Lenders party thereto,
shall control.
ARTICLE II
CREDIT FACILITIES
2.01 Indebtedness Subject to this Agreement. All Senior
Indebtedness shall be entitled to the benefits of and subject to the obligations
set forth in this Agreement and shall be entitled to the liens, charges,
collateral assignments and security interests granted by or pursuant to the
Security Documents.
2.02 Senior Indebtedness Pari Passu. All Senior
Indebtedness shall rank pari passu without any preference among Senior
Indebtedness by reason of date of incurrence or otherwise.
2.03 Pro Rata Payment of Obligations. Except as otherwise
provided in this Agreement, (a) each prepayment to a Senior Lender in respect of
the Senior Indebtedness, and (b) on and after the occurrence of an Event of
Default and the delivery of a Remedies Instruction as described in the
Intercreditor Agreement, each payment to a Senior Lender in respect of the
Senior Indebtedness, shall be on a Pro Rata Payment basis in accordance with the
respective interest, fees, commissions, indemnities, principal and other amounts
due to all of the Senior Lenders on the date of such payment or prepayment.
2.04 Additional Senior Indebtedness. From time to time the
Company may, subject to the terms hereof, designate additional indebtedness of
and commitments to lend to the Company made by financial institutions or vendors
of telecommunications equipment as Senior Indebtedness, and upon satisfaction of
each of the following conditions precedent such designated indebtedness and
commitments, for all purposes of this Agreement, shall be Senior Indebtedness
secured by the collateral subject to the Security Documents and entitled to the
benefits of this Agreement ("Additional Senior Indebtedness"):
(a) Subject to the terms and conditions of this Section
2.04, the lenders of such Additional Senior Indebtedness (or an agent or
fiduciary representing such lenders) (the "Additional Senior Indebtedness
Lender") shall have executed and delivered to the Collateral Agent an agreement
in which each such lender agrees to be bound as a Senior Lender by all of
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the terms and conditions of this Agreement, the Collateral Agency Agreement and
the Intercreditor Agreement as if it were a party hereto and thereto.
(b) The Company shall have furnished to the Collateral
Agent and to each of the Alcatel Administrative Agent and the Qualcomm
Administrative Agent a term sheet describing the terms and conditions of the
proposed Additional Senior Indebtedness, a summary describing any and all
representations, warranties, affirmative covenants, negative covenants, events
of default and other non-financial terms which are to be imposed in connection
with the making of such Additional Senior Indebtedness and which are potentially
more restrictive on the Borrower Group than the provisions of this Agreement
(the "Further Provisions"), and as soon as practicable, drafts of the proposed
Credit Agreement and each of the other documents related thereto. Within 10
Business Days after the receipt of such term sheet and drafts of the Further
Provisions, the Alcatel Administrative Agent and the Qualcomm Administrative
Agent shall notify the Company, the Additional Senior Indebtedness Lender, the
Collateral Agent and each other such Administrative Agent whether they (acting
on behalf of, and at the instructions of, the Senior Lenders under their
respective Credit Agreements) agree to amend or supplement the provisions of
this Agreement to allow such Further Provisions to be incorporated herein; and,
if either of them (on behalf of the Senior Lenders under their respective Credit
Agreements) so agree, pursuant to the sole and absolute discretion of such
Senior Lenders, this Agreement shall be amended to include such Further
Provisions and each party hereto shall execute and deliver an amendment
implementing such Further Provisions, which amendment shall be in form
reasonably satisfactory to each such party; provided, that in no event shall any
Administrative Agent or the Collateral Agent be obligated to waive or modify any
provision of the Financing Agreements relating to the Collateral. If neither of
such Administrative Agents agrees to include such Further Provisions in this
Agreement, such Further Provisions may be included in the Credit Agreement under
which such Additional Senior Indebtedness is to be incurred and an "event of
default" thereunder shall constitute an Event of Default hereunder as set forth
in Section 7.15. Any and all Further Provisions related to any particular
Additional Senior Indebtedness, which Further Provisions were included in this
Agreement pursuant to this Section 2.04(b), shall terminate, and this Agreement
shall be amended to delete such Further Provisions, upon the full repayment or
refinancing of all of the obligations under such Additional Senior Indebtedness;
provided, however, that such Further Provisions shall remain in this Agreement
for the term hereof for the benefit of all Senior Lenders if, during the period
that such Further Provisions were in effect, (i) all or a portion of the Senior
Indebtedness under either of the Alcatel Credit Agreement or the Qualcomm Credit
Agreement was syndicated or participated without credit support from Alcatel or
its Affiliates or Qualcomm or its Affiliates, as applicable (the "Non-Recourse
Sold Amount") or (ii) credit support from Alcatel or its Affiliates or Qualcomm
or its Affiliates shall have been withdrawn with respect to all or a portion of
the commitments or obligations previously sold under the respective Credit
Agreement (the "Non-Recourse Withdrawal Amount"), such that the aggregate amount
of the Non-Recourse Sold Amount and the Non-Recourse Withdrawal Amount under
either Credit Agreement shall equal twenty five percent (25%) or more of the
initial Commitments under the applicable Credit Agreement; provided further,
that no Further Provisions shall terminate as described above to the extent such
Further Provisions are included within the instruments or agreements pursuant to
which such related Additional Senior Indebtedness is refinanced. Each of
Qualcomm and Alcatel shall be permitted to exercise their rights under this
Section 2.04(b) any number of times so long as Qualcomm or Alcatel, as the case
may be, shall be a Senior Lender providing
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financing hereunder or a guarantor providing credit support therefor, in either
case, involving an aggregate amount equal to at least twenty five percent (25%)
percent of the Commitments or Loans under its respective Credit Agreement. It is
understood and agreed that for purposes hereof, the Commitment of Alcatel shall
include the commitment under the Alcatel Commitment Letter.
(c) Any and all liens, collateral assignments, security
interests and charges which are to be given by the Borrower Group or their
shareholders in connection with such Additional Senior Indebtedness ("Additional
Collateral") shall be granted to the Collateral Agent (and the Security
Documents shall be amended or supplemented accordingly, or further security
documents shall be executed and delivered by the Borrower Group to grant such
Additional Collateral to the Collateral Agent), so that, following the issuance
of such Additional Senior Indebtedness, all of the Senior Indebtedness will be
secured on a pari passu basis.
(d) Each member of the Borrower Group shall execute and
deliver a Guaranty Agreement in favor of the Additional Senior Indebtedness
Lender in such a manner that the Additional Senior Indebtedness is guaranteed
thereunder to the same extent as the other Senior Indebtedness at the time
outstanding is guaranteed; provided, however, that, the Company may arrange for
a guaranty or guarantees of such Additional Senior Indebtedness from a third
party or parties, other than other members of the Borrower Group (a "Third Party
Guarantor") without providing for a similar guaranty or guarantees of other
Senior Indebtedness, so long as (i) any representations, warranties, covenants
or defaults included in any reimbursement or similar agreement between any
member of the Borrower Group and the Third Party Guarantor shall constitute
Further Provisions for purposes of clause (b) of this Section 2.04, and (ii) no
collateral or other security may be given to such Third Party Guarantor by any
member of the Borrower Group other than in respect of subrogation rights, if
any, which such Third Party Guarantor may have in the Collateral and the
Security Documents, if and to the extent that it makes payments under such
guaranty.
(e) At least five days prior to the issuance of the
Additional Senior Indebtedness, the Borrower Group shall have delivered to each
Administrative Agent a certificate (i) describing such Additional Senior
Indebtedness, (ii) stating that no Default or Event of Default has occurred and
is then continuing hereunder after giving full effect to the incurrence of such
Additional Senior Indebtedness, and (iii) stating that, following such issuance,
the Borrower Group will be in compliance with the provisions of this Section
2.04 and with the provisions of Section 6.04(d).
(f) All of the conditions precedent to the Initial
Disbursement under the applicable Credit Agreement for such proposed Additional
Senior Indebtedness shall have been satisfied or waived pursuant to the terms of
such Credit Agreement.
2.05 Prepayments.
(a) Prepayments of Senior Indebtedness shall be permitted
to the extent expressly provided in the applicable Credit Agreement and subject
to the limitations provided below.
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(b) Any prepayment of the principal amounts of any Senior
Indebtedness (other than (i) a prepayment of Non-Vendor Financing, (ii) a
prepayment of vendor financing from financing provided or supported by an export
credit agency, or (iii) a prepayment made under a revolving credit or similar
facility, including a voluntary prepayment of a Loan the proceeds of which were
used for the payment of VAT, provided that the lender's commitment thereunder is
not permanently reduced at the time of such prepayment) shall be accompanied by
a prepayment, on a Pro Rata Payment basis, of the principal amounts of all other
Senior Indebtedness then outstanding, (which prepayments shall be made
simultaneously unless any such Senior Indebtedness does not permit such
prepayment at such time or would otherwise require a prepayment or break-funding
penalty, in which case such prepayment amounts, at the option of the Company,
may be deposited with the applicable Administrative Agent, invested in Permitted
Investments, and applied to the prepayment of such Senior Indebtedness on the
first date permitted or as to which no prepayment or break-funding penalty would
be imposed) which prepayment (unless the option described in the foregoing
parenthetical shall be exercised) shall be accompanied by the full payment of
any prepayment premium, break-funding amounts or other amounts due and payable
under the applicable Credit Agreement in connection with such prepayment;
provided, that (x) no such prepayment of any other Senior Indebtedness shall be
required if the Senior Lenders holding such Senior Indebtedness agree to waive
such prepayment or if the Credit Agreement governing such Senior Indebtedness
does not permit such prepayment and (y) the amount of the Senior Indebtedness
which would be so prepaid (but for the foregoing clause (x)) shall not be
applied to the other Senior Indebtedness then outstanding.
(c) Any prepayment of principal on any Senior
Indebtedness as described in Section 2.05(b) shall be accompanied in each case
with the full payment of all accrued and unpaid interest on such Senior
Indebtedness to the extent required under the applicable Credit Agreement.
(d) Subject to Section 2.05(b), any prepayment of any
Senior Indebtedness which is made from the proceeds of other Indebtedness
("Refinancing Indebtedness") may be made on a non-Pro Rata Payment basis between
or among Senior Indebtedness; provided, however, that the documentation under
which such Refinancing Indebtedness (other than Refinancing Indebtedness
provided or supported by an export credit agency) is issued shall provide that
Senior Indebtedness may be prepaid by the Company on a non-Pro-Rata Payment
basis to the same extent as is set forth in this Section 2.05.
(e) Anything to the contrary notwithstanding, the parties
hereto acknowledge and agree that any mandatory prepayment of Senior
Indebtedness made pursuant to Section 3.2(f) of the Qualcomm Credit Agreement
shall: (i) be deemed a permitted prepayment for purposes of this Section 2.05;
(ii) not be subject to any of the qualifications or restrictions set forth in
this Section 2.05 or Section 2.01 of the Intercreditor Agreement, including,
without limitation, the qualification that requires a prepayment, on a Pro Rata
Payment basis, of the principal amounts of all other Senior Indebtedness
outstanding; (iii) be deemed an amount not subject to sharing pursuant to
Section 2.03 of the Intercreditor Agreement; and (iv) not be subject to the
provisions of Section 2.03.
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2.06 Payments.
(a) On each Payment Date, the Company shall make the
scheduled principal repayments of Senior Indebtedness due on such Payment Date
except to the extent that such repayments have been prepaid. Principal of the
Senior Indebtedness shall be payable in accordance with the applicable Credit
Agreement on the terms and conditions set forth therein. If two or more Credit
Agreements set forth the same Payment Date at any one time, and the Company
shall not have sufficient funds on such date to make full payment of the Senior
Indebtedness amounts due on such date under the applicable Credit Agreements,
then the Company shall make payments to the Senior Lenders under such Credit
Agreements on a Pro Rata Payment basis (determined without regard to clause (z)
of the proviso of the definition of "Pro Rata Payment") in respect of the
amounts due on such date.
(b) On each Payment Date, the Company shall pay accrued
and unpaid interest on the unpaid principal amount of the Senior Indebtedness
outstanding under each Credit Agreement in accordance with the terms of the
applicable Credit Agreement.
(c) All payments due under any Credit Agreement shall be
made by the Company pursuant to the terms of the applicable Credit Agreement, in
Dollars, as required under the applicable Credit Agreement, and in immediately
available funds. Subject to the provisions of the Collateral Agency Agreement
and Intercreditor Agreement, the relevant Administrative Agent shall apply each
payment with respect thereto received by it in accordance with such Credit
Agreement.
(d) If at any time at which any Obligations are payable
to a Senior Lender such Senior Lender receives insufficient funds pursuant to
the applicable Credit Agreement to pay in full all Obligations payable to such
Senior Lender at such time, the funds so received by such Senior Lender at such
time shall be deemed to be applied as follows:
(i) FIRST, to interest (including post-default
interest) on the Senior Indebtedness held by such Senior Lender;
(ii) SECOND, to principal of the Senior
Indebtedness held by such Senior Lender; and
(iii) THIRD, to fees, commissions, indemnities,
expenses and all amounts (other than principal of and interest on the
Senior Indebtedness) payable to such Senior Lender.
2.07 Swap Agreements as Senior Indebtedness. Subject to
any other restrictions otherwise contained in this Agreement, the Company may
enter into interest rate and Peso-Dollar currency swap agreements (including
collars, caps and similar derivative arrangements) through the execution of an
agreement, (a "Swap Agreement") with an Eligible Swap Counterparty; provided,
however, that all interest rate swap agreements shall be bona fide hedges of
floating rate exposure for a fixed rate obligation, shall have at any time a
notional amount not greater than the Company's floating rate Indebtedness
outstanding at such time, and cover a period not exceeding four years from any
date of determination; provided, further, that all currency swap agreements
shall be bona fide hedges for a term not exceeding four years and
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for the purchase of Dollars or Pesos with notional amounts in the aggregate not
exceeding an amount equal to 33.0% of the outstanding Senior Indebtedness. The
Company may incur obligations under the Swap Agreement without regard to any
limitations imposed under Section 2.04 or Section 6.04. The obligations of the
Company under any such Swap Agreement may, upon notice by the Company to the
Collateral Agent, be secured by the Collateral on a pro-rata basis to the same
extent as would be the case if such obligations of the Company under such Swap
Agreement were deemed to be Additional Senior Indebtedness hereunder, in which
event the Security Documents shall be amended to the extent necessary to provide
for such pro-rata treatment of the swap counterparty in respect of such
Collateral; provided, however, that in such event (i) no member of the Borrower
Group shall, if the swap counterparty is secured as aforesaid, grant to such
swap counterparty any other Lien upon the property or assets of the Borrower
Group, (ii) the amount secured by the Collateral, as described in the preceding
sentence, shall be the amount owed from time to time by the Company under the
Swap Agreement, and (iii) the swap counterparty, in its capacity as such, shall
not otherwise be, or be deemed to be, a Senior Lender hereunder and shall have
no voting rights with respect to any matter described herein or in the other
Financing Agreements. Upon delivery of the notice to the Collateral Agent as
aforesaid, accompanied by a certificate of the Chief Finance Officer of the
Company stating that no Default or Event of Default has occurred and is then
continuing, the Collateral Agent shall amend or supplement the Security
Documents to implement the provisions of this Section 2.07.
ARTICLE III
CONDITIONS PRECEDENT
3.01 Conditions Precedent to Initial Disbursement. Subject
to Section 3.05, the obligation of a group of Senior Lenders under a particular
Credit Agreement to make an Initial Disbursement shall be subject to the
satisfaction or waiver by each such Senior Lender of the conditions set forth
below:
(a) System Agreements. The Administrative Agents and the
Relevant Parties shall have received a true and complete copy of each System
Agreement (other than the Vendor Agreements) and all supplements, clarifications
or amendments thereto, all of which shall be in form and substance satisfactory
to such Administrative Agents (acting on behalf of, and at the instructions of,
the Senior Lenders under their respective Credit Agreements) and Relevant
Parties and certified as of the Initial Disbursement Date by an Authorized
Officer of the Company with respect to the following matters: (A) such System
Agreement is a true, complete and correct copy of such System Agreement, (B)
such System Agreement is in full force and effect, (C) since the date of
execution thereof, such System Agreement has not been amended, modified,
clarified or supplemented, nor has any waiver been granted thereunder, except
for those amendments, modifications, clarifications, supplements or waivers,
certified copies of which have been delivered to the Administrative Agents
pursuant to (A) above, and (D) no party to any System Agreement is or, but for
the passage of time, giving of notice, fulfillment of any condition or any
combination thereof would be, in breach of any obligation thereunder (provided
that the certification of the Company's Authorized Officer as to the matters set
forth in this clause (D) may be made to the knowledge of such Authorized Officer
with respect to Persons that are not members of the Borrower Group).
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Amended and Restated Common Agreement
(b) Financing Agreements. Each Financing Agreement
required to be executed and delivered on or prior to the Initial Disbursement
Date (i) shall have been executed and delivered, and (ii) shall be in full force
and effect.
(c) Security Interests. (i) All security interests
intended to be created pursuant to the Security Documents shall have been
created and, where appropriate, registered or other action taken to create a
security interest and Lien over the relevant asset or property in favor of the
Collateral Agent, for the benefit of the Senior Lenders, (ii) all fees and
duties shall have been paid in connection with such registration and (iii) all
such security interests shall (except as otherwise provided in any opinion of
counsel accepted pursuant to paragraph (f) below) be valid and enforceable and
constitute first priority perfected security interests, and be enforceable
against the members of the Borrower Group and any subsequent lien or (including
a judgment lien or), holder of a fixed or floating charge, or transferee for or
not for value, in bulk, by operation of law, for the benefit of creditors, or
otherwise, subject in any such case only to Permitted Liens described in Section
6.01. In addition to the above, the Collateral Agent shall have received (w)
evidence issued by the Public Registry of Commerce of the Federal District of
Mexico that the Original Mortgage has been recorded in its books and records,
(x) if then available, evidence issued by the Telecommunications Registry of
Mexico that the Original Mortgage has been recorded in its books and records,
(y) a copy of the second testimony of the public deed evidencing the execution
and delivery of Amendment No. 1 to the Mortgage, together with a certificate of
the relevant Public Notary that the first testimony of such public deed has been
presented for, and accepted for, registration at the Public Registry of Commerce
of the Federal District of Mexico and the Telecommunications Registry of Mexico,
and (z) if then available, evidence issued by each such Registry that Amendment
No. 1 to the Mortgage has been recorded in its books and records.
(d) Process Agents. The Administrative Agents and the
Relevant Parties shall have received evidence that (i) each of the Company,
Holdings and each other Guarantor shall have duly and irrevocably appointed an
agent for service of process in New York, (ii) such agent shall have accepted
such appointment and (iii) all fees scheduled to accrue to each such agent for
service of process through and including the date following seven years after
the Initial Disbursement Date shall have been paid in full.
(e) Insurance.
(i) The Borrower Group shall have obtained the
insurance described in Schedule 5.03 on the terms and conditions set
forth therein and from financially sound and reputable insurers and
reinsurers and meeting the criteria set forth in Schedule 5.03, and
shall have provided to the Administrative Agents and the Relevant
Parties a certificate of an Authorized Officer of the Company to that
effect. The evidence required to be delivered by the Company pursuant
to this clause (i) or clause (ii) below shall confirm that all premiums
due and payable as of the Initial Disbursement Date have been paid and
no insurance premiums are overdue. The Administrative Agents and the
Relevant Parties shall have received evidence that each insurance
policy referred to in Schedule 5.03 has named the Collateral Agent, for
the benefit of the Secured Parties, as a co-beneficiary or co-payee
under such policy together with the Company (or other member of the
Borrower Group), as their respective interests may appear.
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Amended and Restated Common Agreement
(ii) The Insurance Consultant shall have provided
the Administrative Agents and the Relevant Parties with a report in
form and substance acceptable to the Administrative Agents and the
Relevant Parties which shall confirm the matters set forth in clause
(i) above, indicate that such insurance and reinsurance is effective
and provides adequate coverage for the System and the Business and
cover such other matters as any Administrative Agent may have
reasonably requested.
(f) Opinions of Counsel. The Administrative Agents and
the Relevant Parties shall have received the following legal opinions in the
English language addressed to each Senior Lender, each Agent and each Relevant
Party:
(i) the opinion of White & Case LLP, special New
York counsel to the Borrower Group, substantially to the effect set
forth in Appendix B-1;
(ii) the opinion of White & Case, S.C., Mexican
counsel to the Borrower Group, substantially to the effect set forth in
Appendix B-2.
(g) Corporate Documents. The Administrative Agents and
the Relevant Parties shall have received for each member of the Borrower Group,
Charter Documents, good standing certificates (to the extent applicable to such
Person and available in such Person's jurisdiction of formation), incumbency
certificates and resolutions in each case certified by the appropriate officers
of such Person. Such resolutions shall, in each case, approve such Person's
participation in the transactions contemplated by this Agreement and the
applicable Credit Agreement, and the granting of Liens in connection therewith,
and shall authorize the execution, delivery and performance by such Person of
the Financing Agreements to which such Person is a party.
(h) Pledges of Stock.
(A) (i) The Pledge Agreement executed on October
31, 1998 by and among Holdings, the Company, Pegaso PCS and Qualcomm in order to
create a pledge on the shares issued by Pegaso PCS and Personnel Co. (the
"PCS/Recursos Pledge Agreement") shall have been amended in form satisfactory to
the Administrative Agents and the Relevant Parties to include the Collateral
Agent, acting on behalf of and for the benefit of the Secured Parties, as
beneficiary of such agreement and (ii) the Pledge Agreement executed on October
31, 1998 by and among Holdings, Pegaso PCS and Qualcomm in order to create a
pledge on the shares issued by the Company (the "Sistemas Pledge Agreement")
shall have been amended in form satisfactory to the Administrative Agents and
the Relevant Parties to include the Collateral Agent, acting on behalf of and
for the benefit of the Secured Parties, as beneficiary of such agreement.
(B) Each of the Sponsors shall have executed and
delivered the Sponsors Negative Pledge Agreement which shall effectively
prohibit the granting of any Lien over any such Capital Stock by any such
Sponsor.
(i) Business Plan. The Administrative Agents and the
Relevant Parties shall have received (1) a copy of the Original Business Plan;
and (2) a copy of the Final Business
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Amended and Restated Common Agreement
Plan, certified by an Authorized Officer of the Company as having been approved
by the Board of Directors of Holdings.
(j) Stamp Duties; Taxes; Etc. The Administrative Agents
and the Relevant Parties shall have received evidence satisfactory to them that
all required stamp duties, registration fees, filing costs and other charges in
connection with the execution, delivery, filing and/or perfection of any
Transaction Document required to be stamped, registered or filed have been paid
in full or an appropriate exemption therefrom shall have been obtained, except
to the extent that the Company has provided the Administrative Agents and the
Relevant Parties with assurances satisfactory to them that such duties, fees,
costs and charges will be paid in full with the proceeds of the Initial
Disbursement.
(k) Consents, Amendments, Assignments and
Acknowledgments. All consents, amendments, assignments, acknowledgments,
documents or other evidence or information (including the Consents) necessary or
desirable in connection with the System, the Collateral and the assignment as
security of the System Agreements to the Collateral Agent (including all
approvals of any Governmental Authority or any third party) shall have been duly
obtained, executed and delivered, including, without limitation, consents
relating to the Vendor Agreements, the Operator Agreement and the GTE Operator
Agreement.
(l) System Compliance. The System shall be in compliance
in all respects with all Applicable Laws as in effect upon the Closing Date and
the Administrative Agents and the Relevant Parties shall have received a
certificate to such effect from an Authorized Officer of the Company.
(m) Financial Statements. The Administrative Agents and
the Relevant Parties shall have received the most recent financial statements of
the Borrower Group (on a consolidated basis), together with a certificate from
the Chief Financial Officer of Holdings, stating that no material adverse change
in the consolidated assets, liabilities, operations or financial condition of
the Borrower Group has occurred from those set forth in the financial statements
provided pursuant to this clause (m), except as otherwise provided (which
exceptions shall also be in form and substance satisfactory to each
Administrative Agent) in any such certificate with respect to such financial
statements.
(n) Authorization to Independent Accountant. The Chief
Financial Officer of Holdings shall have authorized the Independent Accountant
in writing to communicate directly with the Relevant Parties, the Alcatel
Administrative Agent and the Qualcomm Administrative Agent (provided that such
authorization shall provide that no such communications shall occur with the
Independent Accountant unless and until such Relevant Party or such Agent has,
prior thereto, notified such Chief Financial Officer of Holdings that it intends
to so communicate with the Independent Accountant, and requests that such
officer so notify such Independent Accountant) and shall have furnished such
Administrative Agents and the Relevant Parties with a copy of such
authorization, which authorization shall be irrevocable until all Obligations
have been fully and finally paid.
(o) Fees and Expenses. The Company (or other members of
the Borrower Group) shall have paid all fees and expenses due to any Secured
Party (including all reasonable
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Amended and Restated Common Agreement
fees and expenses of legal counsel for any of the foregoing to the extent the
Company (or another member of the Borrower Group) is obligated to pay such
expenses), on or before the Closing Date, or arrangements satisfactory to such
Secured Party, shall have been made for the payment of such fees and expenses
from the proceeds of the Initial Disbursement.
(p) Initial Credit Facility Conditions Precedent. All of
the conditions set forth in each of Article 6 of the Alcatel Credit Agreement
and Section 4 of the Qualcomm Credit Agreement, shall have been satisfied or
waived in accordance with the terms of each such agreement.
(q) Existing Equity. The Administrative Agents shall have
received evidence that not later than the Closing Date that (i) the paid-in
equity (in the form of equity cash contributions made by the Existing
Shareholders and the New Shareholders of Holdings in consideration for Capital
Stock issued by Holdings to such shareholders) was not less than the aggregate
amount of $300,000,000 as of the date or dates contributed, (ii) not less than
99% of such cash has been contributed by Holdings to the Company as equity, and
(iii) the remainder of such cash, if any, has been contributed by Holdings to
either or both of Pegaso PCS and/or Personnel Co. as equity.
(r) Equity Commitments. The Administrative Agents and the
Relevant Parties shall have received evidence of irrevocable cash Equity
Commitments by the Original Mexican Shareholders in the aggregate amount of (i)
$50,000,000 to be contributed, delivered and paid not later than July 31, 1999
and (ii) $50,000,000 to be contributed, delivered and paid not later than August
30, 2000; there shall have been no default under any such Equity Commitments;
there shall have been no bankruptcy, insolvency or similar proceedings commenced
or initiated by or against any Original Mexican Shareholder making such Equity
Commitment; and each Sponsor, Holdings and the Company shall have executed an
Assignment Agreement with respect to such Equity Commitments in form and
substance satisfactory to the Required Voting Parties.
(s) Licenses and License Fee. The Licenses shall be in
full force and effect; such Licenses shall provide all of the Permits required
to operate the System in accordance with the Original Business Plan, and in
those geographical areas referred to in the Original Business Plan; and all
fees, costs and expenses payable in connection with the granting or maintaining
of such Licenses (including any VAT taxes or charges relating thereto) shall
have been paid in full from Existing Equity.
(t) Minimum Assets; Mortgaged Property. The
Administrative Agents and the Relevant Parties shall have received (i) a
certificate of an Authorized Officer of the Company to the effect that (A) the
Company owns, both legally and beneficially, title to the Minimum Assets, and
(B) all such Minimum Assets are subject to the Lien created by the Security
Documents, and (ii) an undertaking by Holdings, and Holdings hereby undertakes,
that Holdings holds and will continue to hold as its only assets the Capital
Stock of the Company, Pegaso PCS and Personnel Co, the rights to receive equity
as provided in the Equity Commitments (and with all debt or other obligations
owing from any such entity to Holdings having been contributed to such entity as
additional capital) and the assets referred to in the parenthetical in Section
6.04(h)(C).
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Amended and Restated Common Agreement
(u) Various Consents and Approvals. The Administrative
Agents and the Relevant Parties shall have received all Permits, material
consents, approvals and releases of all appropriate Governmental Authorities and
all other third parties in connection with the transactions contemplated by the
Transaction Documents, including (without limitation) all required consents,
authorizations, approvals or releases from contractual counterparties of members
of the Borrower Group required to be obtained to permit the Lien of the
Collateral Agent, acting for the benefit of the Secured Parties, in the
Collateral.
(v) Supplement to Alcatel Commitment Letter. The Company
shall have received a supplemental letter updating and confirming the terms of
the Alcatel Commitment Letter and the conditions for effectiveness. Such
supplemental letter shall be dated no earlier than five Business Days prior to
the date of the Existing Common Agreement and accurately reflect the terms and
conditions of the commitment under the Alcatel Commitment Letter as of such
date, and the Administrative Agents shall have received a fully-executed copy
thereof, the substance of which shall be reasonably satisfactory to the Qualcomm
Administrative Agent.
(w) Guaranty Trust Agreement and Related Documents and
Approvals. Holdings shall deliver to the Administrative Agents and the Relevant
Parties the Guaranty Trust Agreement duly executed and delivered by each of the
parties thereto, together with evidence in writing that the Secretaria de
Comunicaciones y Transportes have approved the Guaranty Trust Agreement and all
appropriate documentation and instruments, which documentation and instruments
shall have been duly executed, in order to effectively transfer title to the
trustee thereunder, for the benefit of the Collateral Agent, of all of the
Capital Stock in the Company, Pegaso PCS and Personnel Co. as held by Holdings
on the Closing Date, which Capital Stock shall (except to the extent described
in the last sentence of this Section 3.01(w)), constitute 100% of the issued and
outstanding Capital Stock of each of the Company, Pegaso PCS and Personnel Co.
The transfer by Holdings of its title to the Capital Stock of the Company,
Pegaso PCS and Personnel Co., as applicable, to the trustee under such Guaranty
Trust Agreement shall have been registered in the shareholders' registry book of
the Company, Pegaso PCS and Personnel Co., respectively. Concurrently therewith,
the parties to the PCS/Recursos Pledge Agreement and the Sistemas Pledge
Agreement will amend said agreements to provide that said agreements only create
a pledge on the single share of each of Pegaso PCS, Personnel Co. and the
Company not owned by Holdings but which is owned by another member of the
Borrower Group.
(x) [Intentionally omitted].
(y) Clarification Writ. The Company shall have filed or
have caused to be filed with the Ministry of Telecommunications of Mexico a
clarification writ with respect to the writ filed on November 30, 1998, and the
said Ministry shall have issued an order, to the effect that (i) Pegaso PCS is
authorized to act on behalf of the Company under the Pegaso PCS Services
Agreement as a "comisionista," not as a "comercializadora" and (ii) all accounts
receivable derived from the exploitation and use of the Licenses are the
property of the Company, not Pegaso PCS.
(z) Post-Closing Agreement. The Company and each other
member of the Borrower Group shall have executed and delivered a post-closing
agreement (the "Post-Closing Agreement") dated as of the date of the Existing
Common Agreement in form and substance
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Amended and Restated Common Agreement
satisfactory to the Administrative Agents and the Relevant Parties with respect
to the satisfaction of certain of the closing conditions contained herein or in
the Credit Agreements within a specified period of time after the Closing Date.
Prior to the SPA Closing Date, an Initial Disbursement occurred under each of
the Qualcomm Credit Agreement, the Alcatel Credit Agreement and the Facility 2
Credit Agreement.
3.02 Conditions Precedent to All Disbursements. Subject to
Section 3.05, the obligation of any Senior Lender to make any Disbursement
(including the Initial Disbursement) shall be subject to the satisfaction or
waiver in accordance with the terms of the relevant Credit Agreement, prior to
and concurrently with each such Disbursement, of each of the conditions set
forth below:
(a) Notice of Borrowing. The Company shall have delivered
to the applicable Administrative Agent and the Relevant Parties a notice of
borrowing from an Authorized Officer of the Company if and to the extent
required as a precondition to the Disbursement of a Loan in the applicable
Credit Agreement.
(b) No Default; Representations and Warranties.
Immediately before and after giving effect to such Disbursement:
(i) no Default or Event of Default shall have
occurred and be continuing (other than Defaults or Events of Defaults
covered under a valid forbearance agreement); and
(ii) all representations and warranties made by
each member of the Borrower Group, each Guarantor and each Sponsor in
each of the Financing Agreements to which such Person is a party
(except, as to any Agent or Senior Lender, any Credit Agreement other
than the Credit Agreement by and among such Person, such Agent and such
Senior Lender), shall be true, complete and correct in all material
respects with the same force and effect as though such representations
and warranties had been made on and as of the date of such
Disbursement, except for any representations and warranties herein or
in any Financing Agreement which expressly relate only to an earlier
date or which fails to be true solely as a result of Defaults or Events
of Defaults covered under a valid forbearance agreement.
(c) Credit Agreement Conditions Precedent. In the case of
a Disbursement under any Credit Agreement, the additional conditions precedent
(if any) to such Disbursement set forth in such Credit Agreement shall have been
satisfied or waived by the applicable Senior Lenders on or before the date of
such Disbursement.
(d) Fees and Expenses. The Borrower Group shall have paid
or made arrangements for payment (including, to the extent permitted,
arrangement for payment out of Disbursements) of all fees, expenses and other
charges then payable by it hereunder or under any other Financing Agreement in a
manner satisfactory to the relevant payee.
(e) Reconocimiento de Adeudo. In connection with
Disbursements made under any Credit Agreement on or after the SPA Closing Date,
the Company shall deliver a new
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Amended and Restated Common Agreement
or amended reconocimiento de adeudo in respect of each such Disbursement in form
and substance satisfactory to the applicable Administrative Agent for filing or
registration in all places necessary or advisable in Mexico. To the extent a new
reconocimiento de adeudo is executed and delivered, such new reconocimiento de
adeudo shall contain a statement to the effect that the prior reconocimiento de
adeudo superseded by the new reconocimiento de adeudo is no longer in force and
effect.
3.03 No Waiver.
(a) Subject to Section 3.05, no course of dealing or
waiver by any Senior Lender or any Agent in connection with any condition of
Disbursement under this Agreement or any Credit Agreement shall impair any
right, power or remedy of any such Senior Lender or Agent with respect to any
other condition of Disbursement, or be construed to be a waiver of any such
other condition; nor shall the action of any Senior Lender or any Agent in
respect of any Disbursement affect or impair any right, power or remedy of any
Senior Lender or the Collateral Agent in respect of any other Disbursement.
(b) Subject to Section 3.05, unless otherwise notified to
the Company by a Senior Lender or the Collateral Agent and without prejudice to
the generality of Section 3.03(a), the right of any Senior Lender or any Agent
to require compliance with any condition under this Agreement or relevant Credit
Agreement which may be waived in accordance with the provisions of such
applicable Credit Agreement is expressly preserved for the purpose of any
subsequent Disbursement.
3.04 Delivery of Certificates, Etc. All of the
certificates, legal opinions, communications, notices and other documents and
papers referred to in Sections 3.01 or 3.02 to be delivered thereunder, unless
otherwise specified, shall be delivered in sufficient counterparts for
distribution to each of the Senior Lenders and, unless otherwise specified,
shall be in form and substance reasonably satisfactory to the Agent receiving
the same. Notwithstanding the foregoing, all of the certificates, legal
opinions, communications, notices and other documents and papers referred to in
Sections 3.01 and 3.02 shall be addressed to each Senior Lender.
3.05 Beneficiaries of Conditions to Disbursements.
Notwithstanding any other provision of this Article 3, any waiver of the
conditions precedent (i) to the Initial Disbursement or any subsequent
Disbursement under the Alcatel Credit Agreement must be waived by each Senior
Lender under the Alcatel Credit Agreement, but no Senior Lender under any other
Credit Agreement shall have any right or benefits thereto or any such waiver
rights thereunder, (ii) to the Initial Disbursement or any subsequent
Disbursement under the Qualcomm Credit Agreement must be waived by each Senior
Lender under the Qualcomm Credit Agreement, but no Senior Lender under any other
Credit Agreement shall have any right or benefit thereto or any such waiver
rights thereunder, and (iii) to the Initial Disbursement and any subsequent
Disbursement under any Credit Facility relating to Additional Senior
Indebtedness must be waived by the Senior Lender (or all or such percentage of
the Senior Lenders) as provided in such Credit Agreement, but no Senior Lender
under the Alcatel Credit Facility, no Senior Lender under the Qualcomm Credit
Agreement and no Senior Lender under any other Additional Senior Indebtedness
then outstanding shall have any right or benefits thereto or any such waiver
rights thereunder.
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Amended and Restated Common Agreement
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Each member of the Borrower Group, jointly and severally,
makes the representations and warranties contained in this Article 4 for the
benefit of each Senior Lender, each Agent and each Relevant Party. Each such
representation and warranty shall be deemed made for the benefit of any Senior
Lender at the times (and only the times) and to the extent (and only to the
extent) specified in the Credit Agreement to which such Senior Lender is party.
The representations and warranties contained herein shall survive the execution
and delivery of this Agreement. To the extent that any schedule referred to in
this Article 4 shall need to be updated in order to permit such representation
to be true and correct when made or deemed made, the Company or other member of
the Borrower Group shall provide the Agents with such updated schedule in
writing prior to the date such representation is made or deemed made and shall
request approval of such updated schedule in accordance with the provisions of
the Intercreditor Agreement. Unless any such schedule is updated and approved in
accordance with the provisions of the Intercreditor Agreement, no change to any
existing schedule shall be deemed to have been made.
4.01 Corporate Status. Each member of the Borrower Group
(i) is a sociedad anonima de capital variable duly organized, validly existing
and in good standing under the laws of Mexico, (ii) is duly authorized to do
business in Mexico and in each other jurisdiction where the character of its
properties or the nature of its activities makes such qualification necessary
(except for any authorization the absence of which does not constitute a
Material Adverse Effect) and (iii) has the requisite power and authority to (a)
own or possess all of its property and assets, (b) transact the business in
which it is engaged or proposes to be engaged (including the Business), (c)
incur and guarantee Indebtedness and create Liens, (d) execute, deliver and
perform its obligations under the Transaction Documents to which it is a party
and (e) do all things to be done by it in respect of the construction,
maintenance and operation of the System and to consummate the transactions
contemplated by this Agreement and the other Transaction Documents.
4.02 Corporate Power and Authority. Each member of the
Borrower Group has taken all corporate action necessary to authorize the
execution, delivery and performance by it of each of such Transaction Documents
as have been executed and delivered by such member as of each date this
representation and warranty is made or deemed made. Each member of the Borrower
Group has, or in the case of the Transaction Documents other than this Agreement
and future Credit Agreements by the Initial Disbursement Date will have, duly
executed and delivered each of the Transaction Documents to which it is a party.
4.03 Valid and Binding Obligation. This Agreement, when
executed and delivered by the members of the Borrower Group on or before the
date this representation is made or deemed made constitutes or, in the case of
each other Transaction Document to which it is a party, when executed and
delivered by it, will constitute, the legal, valid and binding obligation of
such member enforceable in accordance with its terms, except as the
enforceability thereof may be limited by (i) applicable bankruptcy, insolvency
and other similar laws affecting
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Amended and Restated Common Agreement
creditors' rights generally and (ii) general equitable principles regardless of
whether the issue of enforceability is considered in a proceeding in equity or
at law.
4.04 No Violation. None of the execution and delivery by
any member of the Borrower Group of this Agreement and the other Transaction
Documents to which it is party, the consummation of the transactions
contemplated hereby and thereby or compliance with the terms and provisions
hereof and thereof does or will (i) contravene or violate its Charter Documents
or any Applicable Law, (ii) contravene or result in any breach or constitute any
default under any order, writ, injunction, judgment or decree of any court or
other tribunal or Governmental Authority or (iii) contravene or result in any
breach or constitute any default under, or result in or require the creation of
any Lien upon any of its revenues, properties or assets under any agreement or
instrument to which it is a party or by which it or any of its revenues,
properties or assets may be bound, except for Permitted Liens or (iv) require
any permit, consent or approval of any Person other than any such permits,
consents or approvals which have been obtained and are in full force and effect;
provided, however, that (a) with respect to the System Agreements, the above
representation shall apply only to the extent that any such contravention,
violation or breach would result in a Material Adverse Effect, and (b) it is
understood that any remedial action taken under the Security Documents, to the
extent that it results or would result, directly or indirectly, in a transfer of
the Licenses to a party other than the Company, may require certain
authorizations, consents or approvals by Governmental Authorities under the
Mexican Telecommunications Law. Solely for purposes of this Section 4.04, the
term "Applicable Law" shall be deemed to be limited to those Applicable Laws in
effect on the date such representation is made.
4.05 Permits. All authorizations, consents and permits
necessary under Applicable Law in connection with (i) the due execution and
delivery of, and performance by each member of the Borrower Group of its
obligations under each Transaction Document to which it is a party in effect or
required to be in effect as of each date this representation is made or deemed
made, (ii) the grant by the members of the Borrower Group of the Liens pursuant
to the Security Documents and the validity, enforceability and perfection
thereof and the exercise by the Collateral Agent of rights and remedies
thereunder, and (iii) the care, custody, control, construction, development and
operation of the System as contemplated by the Business Plan which are required
to be obtained on or prior to the date this representation is made or deemed
made (other than, in the case of this clause (iii), such consents,
authorizations and permits the absence of which would not constitute a Material
Adverse Effect), in each case have been obtained by such members (hereinafter,
collectively the "Permits"). Each of such Permits has been duly obtained or
made, is validly issued, is in full force and effect, and is held in the name of
the Person identified in such Permit and is free from any condition or
requirement compliance with which would constitute a Material Adverse Effect or
which the applicable member of the Borrower Group does not reasonably expect to
be able to satisfy.
4.06 Financial Statements; Financial Condition;
Undisclosed Liabilities; Etc.
(a) Each of the financial statements of the Borrower
Group delivered pursuant to Sections 3.01(m) and 5.01(a) is true, complete and
correct in all material respects as of the date of such statements and fairly
presents the financial condition, results of operations and cash
17
Amended and Restated Common Agreement
flows as of the date thereof. Such financial statements have been prepared in
accordance with GAAP on a consistent basis except as may otherwise be noted
therein.
(b) Except as fully reflected in (i) the financial
statements referred to in Section 3.01(m), (ii) the contingent liabilities set
forth on Schedule 4.06 and (iii) the obligations set forth in the Transaction
Documents, there was, as of the Closing Date, no liability or obligation with
respect to any member of the Borrower Group of any nature whatsoever (whether
absolute, accrued, contingent or otherwise and whether or not due) for the
period to which such respective financial statements relate which, either
individually or in the aggregate, constitutes a Material Adverse Effect. As of
the Closing Date, no member of the Borrower Group knows of any reasonable basis
for the assertion against any such member of any liability or obligation of any
nature whatsoever (whether absolute, accrued, contingent or otherwise and
whether or not due) for such relevant period that is not (x) fully reflected in
the financial statements referred to in Section 3.01(m), (y) set forth in
Schedule 4.06 or (z) an obligation set forth in or contemplated by the
Transaction Documents, which either individually or in the aggregate,
constitutes a Material Adverse Effect.
(c) Since the date of the last financial statements of
the Borrower Group submitted in accordance with Section 5.01(a), there has been
no material adverse change in the condition (financial or otherwise) or
operations of the Borrower Group (taken as a whole), except for the operating
losses contemplated by the most recent Business Plan submitted pursuant to
Section 5.01(d).
4.07 Litigation; Labor Disputes.
(a) No member of the Borrower Group is in default with
respect to any order of any court, arbitrator, administrative agency or other
Governmental Authority, other than any order that is the subject of a Good Faith
Contest or other order the default under which, or the non-compliance with
which, would not result in a Material Adverse Effect. There is no injunction,
writ, or preliminary restraining order of any nature issued by an arbitrator,
court or other Governmental Authority directing that any of the transactions
provided for in any of the Financing Agreements not be consummated as herein or
therein provided. There is no action, suit, investigation or proceeding
(including any appeal by any Person of a Permit) by or before any court,
arbitrator, administrative agency or other Governmental Authority pending or, to
the best knowledge of each member of the Borrower Group, threatened against or
affecting any member of the Borrower Group (or any of such party's properties,
revenues or assets) which constitutes a Material Adverse Effect.
(b) There are no strikes, slowdowns or work stoppages by
the employees of any member of the Borrower Group, on-going, or, to the best
knowledge of each such member, currently threatened, which constitute a Material
Adverse Effect.
4.08 Tax Returns and Payments.
(a) Each member of the Borrower Group has filed all
income tax and other material tax returns required by Applicable Law to be filed
by it and has paid all Taxes and assessments payable by it which have become due
other than those subject to a Good Faith
18
Amended and Restated Common Agreement
Contest. Each member of the Borrower Group has paid or has provided reserves
adequate in the reasonable judgment of the management of Holdings and consistent
with GAAP for the payment of all income or other Taxes imposed on it by the
Government of Mexico for all prior Fiscal Years and accrued for the current
Fiscal Year to the date hereof.
(b) Except for those items set forth in Schedule 4.08, no
withholding Taxes are payable by the Company or any other member of the Borrower
Group, (under Applicable Law in existence as of the SPA Closing Date), to any
Mexican Governmental Authority in connection with any amounts payable by the
Company or any other such member under or in respect of the Financing Agreements
as in effect as of the SPA Closing Date.
4.09 Capitalization. Schedule 4.09 sets forth the
capitalization of Holdings and each other member of the Borrower Group as of the
SPA Closing Date, including (i) authorized capital, (ii) the number of shares
issued and outstanding and (iii) the shareholders and number of shares and
advances held by each such shareholder. All of the issued and outstanding shares
of Holdings (other than treasury stock held by Holdings) and each other member
of the Borrower Group are duly and validly issued and non-assessable and fully
paid. As of the SPA Closing Date, neither Holdings nor any other member of the
Borrower Group has outstanding (a) any securities convertible into or
exchangeable for its share capital or (b) any rights to subscribe for or to
purchase, or any option for the purchase of, or any agreement, arrangement or
understanding providing for the issuance (contingent or otherwise) of, or any
call, commitment or claims of any character relating to, or any rights or claims
that restrict the transfer of, its share capital.
4.10 Subsidiaries, Mortgage and Minimum Assets.
(a) Holdings is the legal and beneficial owner of 100% of
the Capital Stock of each of (i) the Company, (ii) Pegaso PCS, (iii) Personnel
Co., (iv) Finanzas and (v) Finco (the "Applicable Shares"). As of the SPA
Closing Date, Holdings does not own any Capital Stock in any Person other than
as set forth in the preceding sentence. There are no Liens of any kind on any of
the Applicable Shares other than Permitted Liens, nor are there any restrictions
on transfers of such Applicable Shares, nor are there any agreements of any kind
relating to the voting of, or disposition of, such Applicable Shares (except as
described in the proviso to Section 4.04(iv)). As of the SPA Closing Date, each
of the Company, Pegaso PCS, Personnel Co., Finanzas and Finco has no
Subsidiaries and does not otherwise control any voting stock or any ownership
interest in any other Person. All of the Capital Stock of each Subsidiary of
Holdings or of any other member of the Borrower Group acquired after the date of
this Agreement has been pledged by the relevant party to the Collateral Agent
for the benefit of the Secured Parties as required by Section 5.14.
Notwithstanding the other provisions of this Section 4.10(a), it is recognized
that a single share of each of Pegaso PCS, Personnel Co., the Company, Finanzas
and Finco is not owned by Holdings, but is owned by another member of the
Borrower Group.
(b) As of the SPA Closing Date, the Sponsors,
collectively, own 100% of the Capital Stock of Holdings (the "Holdings Shares").
As of the SPA Closing Date, there are no liens of any kind on the Holdings
Shares other than Permitted Liens, nor (except for such agreements or
restrictions as are set forth in the Shareholders Agreement, in the form in
existence on the SPA Closing Date, and as otherwise described in the proviso to
Section 4.04
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Amended and Restated Common Agreement
(iv)) are there any restrictions on transfer of the Holdings Shares, nor are
there any agreements of any kind relating to the voting of, or disposition of,
such Holdings Shares, other than as set forth in the Shareholders Agreement.
(c) The Company is the legal and beneficial owner of all
of the properties, assets and contract rights which are specifically described
in the Mortgage as being the subject of the Lien created by the Mortgage. The
Mortgage has the effect of creating, in favor of the Collateral Agent, for the
benefit of the Senior Lenders, a perfected and first priority Lien on all
property, assets and contract rights owned from time to time by the Company
(including property acquired by the Company after the date of execution,
delivery and recording of the Mortgage). Such properties, assets and contract
rights, at the time this representation is made or deemed made, constitute
Minimum Assets.
(d) As of the SPA Closing Date, Schedule 4.10(d) lists
for each of the Company and the other members of the Borrower Group, each of the
bank, securities and deposit accounts maintained by such member of the Borrower
Group, the name of the institution where such account is maintained, the address
of such institution and the balance maintained in such account.
4.11 Compliance with Applicable Law. Each member of the
Borrower Group is in compliance in all respects with all Applicable Law
(including Environmental Law), except to the extent that such failure to be in
compliance would not constitute a Material Adverse Effect.
4.12 Property Rights. Each member of the Borrower Group
owns, has a license to use or otherwise has the right to use, free and clear of
any pending or threatened Liens (other than Permitted Liens), all property
rights (real, personal and mixed, tangible and intangible) including all
patents, patent applications, trademarks, permits, service marks, names, trade
secrets, proprietary information and knowledge, technology, computer programs,
databases, copyrights, licenses, franchises and formulas, or rights with respect
thereto, and has obtained assignments of all leases and other rights of whatever
nature, in each case, that are material to the care, custody, control,
construction, development, operation and maintenance of the System or the
conduct of the Business by the Borrower Group as contemplated by the Business
Plan, without any conflict with the rights of others as of the date such
property rights are necessary to operate and maintain the System and the
Business.
4.13 Single-Purpose. The Borrower Group (taken as a whole)
has not engaged in any business other than the care, custody, control,
development, construction, operation, maintenance and financing of the System
and the conduct of the Business; provided, that it is recognized that Personnel
Co. is authorized to provide human resource and similar services, and may
provide such services, to unrelated third parties to the extent consistent with
the Original Business Plan.
4.14 Fees and Enforcement.
(a) Except for the fees and Taxes set forth on Schedule
4.14 that have been paid in full or will have been paid in full by the date of
any Disbursement requested hereunder or
20
Amended and Restated Common Agreement
with the proceeds of such Disbursement, no fees or Taxes are required to be paid
for the legality, validity or enforceability of the Financing Agreements.
(b) This Agreement and each of such Financing Agreements
executed and delivered as of the date this representation is made or deemed made
are each in proper legal form under (i) the Applicable Law of Mexico and (ii)
the respective governing laws selected in such Transaction Documents, for the
enforcement thereof in such jurisdiction.
4.15 Foreign Exchange Approvals. All requisite foreign
exchange control approvals and other similar authorizations, if any, required
under Applicable Law to be issued by any Mexican Governmental Authority to
assure (i) the ability of the Borrower Group to receive, and the ability of any
other party to make to the Borrower Group, any and all payments in the currency
or currencies contemplated by the Financing Agreements, (ii) the ability of the
Borrower Group to maintain Dollar accounts outside Mexico and to transfer
amounts from and into Mexico as necessary to meet its obligations under the
Financing Agreements, in accordance with their respective terms, and (iii) the
ability of the Borrower Group to use Dollars as necessary to perform all of its
obligations under the Financing Agreements, in accordance with their respective
terms, including the making of all payments contemplated in the Financing
Agreements, have been duly and validly obtained and are in full force and
effect. Other than those restrictions or requirements for which appropriate
waivers, authorizations and/or approvals have been received, there are no
further restrictions or requirements under Applicable Law which limit the
availability or transfer of foreign exchange, or the conversion to a foreign
exchange, for the purpose of (a) the performance by the Borrower Group of their
obligations under this Agreement or any other Financing Agreement or (b)
repatriating the proceeds of enforcement of the Obligations or the Collateral to
the Collateral Agent.
4.16 Liens. Except for Permitted Liens, there are no Liens
securing any Indebtedness or other obligations of any Person covering any
present or future revenues, properties or assets or share capital of any member
of the Borrower Group other than on the capital stock of Holdings. No Liens
securing any Indebtedness or other obligations of any Person cover the capital
stock of Holdings held by any Sponsor except as permitted under the Sponsor
Negative Pledge Agreement. No member of the Borrower Group has outstanding any
Lien or obligation to create any Lien on or with respect to any of its
properties, revenues or assets, other than Permitted Liens.
4.17 Title; Security Documents.
(a) Each member of the Borrower Group holds good and
legal title to all property, assets and revenues on which it purports to grant
Liens pursuant to the Security Documents (including, with respect to the
Mortgage, any and all property, assets and revenues specifically identified
therein), in all cases free and clear of all Liens other than Permitted Liens.
(b) The provisions of the Security Documents are
effective to create in favor of the Secured Parties a legal, valid and
enforceable first priority Lien on all of the property, assets and revenues
described therein (including, with respect to the Mortgage, any and all
property, assets and revenues specifically identified therein) to the extent a
security interest may be created therein under Applicable Law and all necessary
and appropriate recordings,
21
registrations and filings have been made in all appropriate public offices, and
all other necessary and appropriate action has been taken so that each such
Security Document creates an effective Lien with respect to the property,
assets, contract rights and revenues covered thereby to the extent a security
interest may be created therein under Applicable Law, prior and superior to all
other Liens except for Permitted Liens, and consents to the creation,
effectiveness, priority and enforcement of such Liens have been obtained from
each of the parties to the Transaction Documents and the relevant Governmental
Authorities, other than as described in the proviso to Section 4.04(iv).
4.18 Transaction Documents. The Collateral Agent and each
Administrative Agent have received a true, complete and correct copy of each of
the Transaction Documents in effect as of the date this representation is made
or deemed made. Each such Transaction Document is in full force and effect and
has not been amended, modified or terminated, except as previously disclosed in
writing to the Collateral Agent and each Administrative Agent and in accordance
with the terms hereof.
4.19 Certain Ancillary Services. Except where the failure
to obtain the services referred to below would not constitute a Material Adverse
Effect, all utility services, facilities and other services that can reasonably
be expected to be necessary for the care, custody, control, construction,
operation and maintenance of the System, are, or will be when needed, available
to the Borrower Group to the extent necessary or desirable, and arrangements in
respect thereof have been made.
4.20 Environmental Matters.
(a) Except as set forth on Schedule 4.20 (i) no member of
the Borrower Group is now in violation of any Environmental Law which violation
constitutes a Material Adverse Effect, (ii) no member of the Borrower Group, nor
to the best knowledge of any member of the Borrower Group, any third party, has
used, released, discharged, generated, manufactured, produced, stored, or
disposed of in, on, under, or about the System or any real property owned or
leased by an member of the Borrower Group or transported thereto or therefrom,
any Hazardous Material in a manner that could reasonably be expected to subject
any member of the Borrower Group to any material liability which would
constitute a Material Adverse Effect, or subject any Senior Lender or any Agent
to any liability, under any Environmental Law, and (iii) to the best knowledge
of each member of the Borrower Group, there are no Hazardous Materials used,
stored, or present at, on or near the System or any real property owned or
leased by any member of the Borrower Group in violation of Applicable Law which
would constitute a Material Adverse Effect.
(b) Except as set forth in Schedule 4.07, there is no
proceeding, and to the best knowledge of each member of the Borrower Group, no
investigation or inquiry, by any Governmental Authority or any non-governmental
third party with respect to the presence or release of Hazardous Materials in,
on, from or to the System or any real property owned or leased by any member of
the Borrower Group which would constitute a Material Adverse Effect.
22
Amended and Restated Common Agreement
4.21 Investment Company Act. The Company is not an
"investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940.
4.22 True and Complete Disclosure. (a) All factual
information (taken as a whole), including the Business Plan, furnished by or on
behalf of any member of the Borrower Group in writing to or for the benefit of
any particular Senior Lender (referred to herein as a "Relevant Lender," which
term includes the Collateral Agent or the applicable Administrative Agent under
the Credit Agreement to which such Relevant Lender is a party) was true and
accurate in all material respects (i) in the case of the Original Business Plan,
as of December 15, 1998, and (ii) with respect to all other factual information
(including updates of the Business Plan), on the dates as of which such
information was furnished, and was not incomplete by omitting to state any
material fact necessary to make such information (taken as a whole) not
misleading in any material respect at such time in light of the circumstances
under which such information was furnished; provided, however, that, except as
otherwise expressly set forth in this Agreement, the sole representation of each
member of the Borrower Group with respect to projections, estimates or other
expressions of view as to future circumstances shall be that such projections,
estimates or other expressions of view as to future circumstances (i) were
prepared in good faith, (ii) fairly present in all material respects the
Borrower Group's expectations as to the matters covered thereby as of their
respective date(s) of delivery (or, in the case of the Original Business Plan,
as of December 15, 1998) (it being understood that assumptions utilized therein
were believed by the Borrower Group in good faith to be reasonable in light of
conditions existing at the time of preparation thereof, but that actual results
may vary from the projected results contained therein), (iii) were based on
reasonable assumptions as to all factual and legal matters material to the
estimates therein (including interest rates and costs) as of their respective
date(s) of delivery (or, in the case of the Original Business Plan, as of
December 15, 1998), and (iv) were in all material respects consistent with the
provisions of the Transaction Documents as of their respective date(s) of
delivery (or, in the case of the Original Business Plan, as of December 15,
1998). There are no statements, assumptions or conclusions in the Business Plan,
as of the date of delivery thereof, which are based upon or include information
known as such delivery date to any member of the Borrower Group to be misleading
or which fail to take into account material information regarding the matters
reported therein. As of the SPA Closing Date there are in existence no
documents, agreements or other information which have not been disclosed to the
Relevant Lender in writing which are material in the context of the Transaction
Documents or which have the effect of varying any of the Transaction Documents.
4.23 No Additional Fees. Other than as set forth in
Schedule 4.23, as of the SPA Closing Date, no member of the Borrower Group has
paid nor become obligated to pay any fee or commission to any broker, finder or
intermediary for or on account of arranging the financing of the transactions
contemplated by the Transaction Documents.
4.24 Use of Proceeds. No part of the proceeds of any
Senior Indebtedness will be used for the purpose, whether immediate, incidental
or ultimate, of buying or carrying any "margin stock" (as defined in Regulation
U) or to extend credit to others for such purpose. No part of the proceeds of
any Senior Indebtedness will be used, whether directly or indirectly, and
whether immediately, incidentally or ultimately, for any purpose which entails a
violation of, or which is inconsistent with Regulations T, U or X promulgated by
the Board of Governors of the
23
Amended and Restated Common Agreement
Federal Reserve System (12 C.F.R. Sections 220, 221 and 224, respectively). The
Company has used and shall continue to use the proceeds of all Disbursements in
accordance with the terms and conditions of all applicable Financing Agreements.
4.25 Insurance. All insurance policies required to be
maintained pursuant to the terms of this Agreement are in full force and effect,
and all premiums due and payable have been paid.
4.26 Private Activities. The transactions contemplated by
the Transaction Documents constitute private commercial activities (rather than
governmental or public activities).
4.27 No Subordination. The obligations of each Guarantor
under the Guaranty and the Company under the Credit Agreements or under any
other contracts or instruments executed by Guarantors or the Company in
connection therewith and herewith (i) are not subordinated in right of payment
to any other obligation of the Company or such Guarantors and (ii) will at all
times rank prior to or pari passu in right of payment with all present and
future unsecured Indebtedness of any Guarantor or the Company, as applicable,
except in either case, to the extent provided by Applicable Law.
4.28 Licenses. The Licenses are in full force and effect;
and the Company holds legal, valid, binding and enforceable title to the
Licenses free of any Liens other than Permitted Liens and free of any conditions
other than those set forth in the Licenses. The Licenses are sufficient
(together with other authorizations, consents and permits which have been
received, or are reasonably anticipated to be received on a timely basis, by one
or more members of the Borrower Group) to grant to the Company the legal power
and authority to operate and maintain the System and conduct the Business in
accordance with the Business Plan. Other than as may be set forth in Schedule
4.28, as of the SPA Closing Date, there has been no notice given by any
Governmental Authority that brings into question the validity or effectiveness
of the Licenses, nor is there any litigation (or to the best knowledge of each
member of the Borrower Group, threatened litigation) relating in any way to the
Licenses which, in either case, if decided adversely, would have the effect of
causing an Event of Default under Section 7.13.
4.29 [Intentionally Omitted].
4.30 Employee Benefit Plans; Employment Matters.
(a) Employee Benefits.
(i) Each employee benefit plan of any member of
the Borrower Group, if any, has been maintained, operated and
administered in accordance with its terms and with Applicable Law, and
all notices, filing and disclosures required by such terms or law have
been timely made, except when the failure to maintain, operate, or
administer, or to notify, file or disclose, would not have a Material
Adverse Effect. No proceeding with respect to the administration or the
investment of the assets of any employee benefit plan (other than
routine claims for benefits) that would have a Material Adverse Effect
or create Liens (other than Permitted Liens) is pending or threatened.
24
Amended and Restated Common Agreement
(ii) All obligations of the Borrower Group for
payments with respect to any and all mandatory and additional employee
benefit plans including, but not limited to, all Instituto Mexicano del
Seguro Social (Mexican Social Security Institute), Instituto del Fondo
Nacional para la Vivienda de los Trabajadores (National Worker's
Housing Fund Institute), and accrued payroll taxes payments for their
respective employees have been timely paid and properly reported in the
financial statements required to be delivered under Section 5.01(a) in
accordance with GAAP except where the failure to make such payments
would not have a Material Adverse Effect or create any Lien (other than
Permitted Liens).
(iii) As of the SPA Closing Date, the Borrower
Group has no liability for retiree benefits.
(b) Employment Practices. The Borrower Group has complied
in all respects with all Applicable Laws, rules and regulations with respect to
employment practices including, but not limited to, applicable health and safety
regulations and there is no charge or complaint alleging any material violation
of such laws, rules or regulations against any member of the Borrower Group
pending or threatened, or before any federal or local labor board, tribunal or
Comision Nacional del Sistema de Ahorro para el Retiro (National Savings and
Retirement System Commission), except where the failure to comply with such laws
would not have a Material Adverse Effect.
(c) Labor Matters. There is no labor strike, request for
representation, slowdown or stoppage actually pending or, to the knowledge of
any member of the Borrower Group, threatened against or affecting it which would
have a Material Adverse Effect.
(d) Filings. Each member of the Borrower Group has filed
all forms, reports, statements, provider agreements benefit plan descriptions,
payer agreements, beneficiary materials and other documents (including, without
limitation, those related to employee benefit plans) required to be filed by it
with any Governmental Authority, including without limitation state and federal
insurance and health regulatory authorities except where the failure to file
would have a Material Adverse Effect or create a Lien.
4.31 [Intentionally Omitted].
4.32 Indebtedness. As of the SPA Closing Date, Schedule
4.32 is a complete and correct list of all Indebtedness, credit agreements,
indentures, purchase agreements, guaranties, capital leases and other
investments, agreements and arrangements presently in effect providing for or
relating to extensions of credit (including agreements and arrangements for the
issuance of letters of credit or for acceptance financing, but not including
nondelinquent trade credit providing for payment within ninety (90) days of
invoice) involving $1,000,000 or more in respect of which each member of the
Borrower Group is in any manner directly or contingently obligated. The maximum
principal or face amounts of the credits in question, which are outstanding and
which can be outstanding, are correctly stated, and all Liens of any nature
given or agreed to be given as security therefor are correctly described or
indicated in such Schedule.
25
Amended and Restated Common Agreement
ARTICLE V
AFFIRMATIVE COVENANTS
Each member of the Borrower Group covenants and agrees,
jointly and severally, that until the Commitments have been terminated and all
Obligations in connection with the Senior Indebtedness are paid in full (unless
waived in writing in accordance with the Intercreditor Agreement):
5.01 Information Covenants. The Company shall furnish to
each Administrative Agent and to each Relevant Party:
(a) Financial Statements.
(i) Annual Financial Statements of the Borrower
Group. As soon as available, but in any event within 120 days after the
close of each Fiscal Year, a consolidated balance sheet of the Borrower
Group as at the end of such Fiscal Year with the related audited
statements of income and retained earnings and statements of cash flows
for such Fiscal Year, in each case setting forth comparative combined
figures for the prior Fiscal Year and certified by the Independent
Accountant, which certification shall state that all such statements
are in agreement with the Borrower Group's books of account and are
prepared in accordance with GAAP on a consistent basis and reconciled
to U.S. GAAP.
(ii) Quarterly Financial Statements. As soon as
available and in any event within 45 days after the close of each of
the first three quarterly accounting periods in each Fiscal Year, the
combined balance sheet of the Borrower Group, as at the end of such
quarterly period and the related unaudited combined statements of
income and of cash flows for such quarterly period and for the portion
of the Fiscal Year ended at the end of such quarterly period, and in
each case setting forth comparative combined figures for the related
quarterly period in the prior Fiscal Year and the figures for such
portion of the Fiscal Year ended at the end of such quarterly period,
all of which shall be certified by the chief finance officer or
controller of Holdings as fairly presenting the financial condition and
results of operations of the Borrower Group and as having been prepared
in accordance with GAAP on a consistent basis and reconciled to U.S.
GAAP, subject to changes resulting from audit and normal year-end audit
adjustments.
(b) Independent Accountant's Report. At the time of
delivery of the financial statements provided for in Section 5.01(a), a report
of the Independent Accountant (x) stating that in the course of its regular
audit conducted in accordance with GAAP of the financial statements of the
Borrower Group as described under this Section 5.01, the Independent Accountant
obtained no knowledge of a Default or Event of Default which has occurred, or if
in the opinion of the Independent Accountant such Default or Event of Default
has occurred, a statement as to the nature thereof and (y) certifying that,
based on such financial statements and its review of the terms hereof, the
Borrower Group was in compliance with Sections 5.02(a), 6.03, 6.04, 6.06, 6.09
and 6.10 as of the end of the relevant Fiscal Year or, as the case may be,
detailing any non-compliance therewith.
26
Amended and Restated Common Agreement
(c) Management Letters. Promptly after receipt thereof,
by any member of the Borrower Group, a copy of any management letter or other
similar communication received by any such member from the Independent
Accountant in relation to the financial, accounting and other systems,
management or accounts of any such member.
(d) Business Plan. Not less frequently than annually,
commencing not later than December 15, 1999, an updated Business Plan in the
form approved by the Board of Directors of Holdings, which shall be based on (i)
facts and circumstances existing as of the date of submission, and (ii) with
respect to future events and performance, assumptions believed by the Borrower
Group to be reasonable under the circumstances as of such date of submission.
Each updated Business Plan shall contain, at a minimum, (i) a description of the
Borrower Group's plans in connection with the roll-out of the System, (ii) the
number of subscribers to the System as of the date of such updated Business Plan
for each year thereafter through the final maturity date of any Senior
Indebtedness then outstanding, (iii) a pro-forma income statement (including
EBITDA) for the year in which the up-dated Business Plan is submitted and each
year thereafter through the final maturity date of any Senior Indebtedness then
outstanding, (iv) a debt service coverage table for the then current year and
each year thereafter through the final maturity date of any Senior Indebtedness
then outstanding, (v) at least the same amount of information as was contained
in the Original Business Plan, and (vi) a description of all major assumptions
which were used in connection with the preparation of such up-dated Business
Plan; provided, that for purposes of the updated Business Plan to be furnished
in calendar year 2002, the updated Business Plan shall be furnished no later
than December 15, 2002. During the 30-day period following the submission of the
updated Business Plan, the Borrower Group will make available the Chief Finance
Officer of Holdings and any other officer of the Borrower Group reasonably
requested by any Administrative Agent to report on, and answer questions with
respect to, such updated Business Plan at such times as such Agent(s) may
reasonably request.
(e) Officers' Certificates. At the time of the delivery
of the financial statements provided for in Section 5.01(a), a certificate of an
Authorized Officer of each member of the Borrower Group to the effect that,
based upon such Authorized Officer's review of the terms hereof and the other
Financing Agreements and the financial condition of each member of the Borrower
Group during the relevant accounting period and, to the best of such officer's
knowledge, (i) such member of the Borrower Group is in compliance with all of
its obligations under the terms of the Financing Agreements the non-performance
of which would constitute a Material Adverse Effect (such certificate to set
forth in reasonable detail the calculations necessary to demonstrate compliance
with the financial covenants contained in Section 6.09 and 6.10 (as
applicable)), and (ii) no Default or Event of Default has occurred and is
continuing, or, if any Default or Event of Default has occurred and is
continuing, specifying the nature and extent thereof and what action the
Borrower Group is taking or proposes to take in response thereto.
(f) Notice of Certain Occurrences, Etc. (i) Promptly, but
in all cases within five Business Days after any Responsible Officer of any
member of the Borrower Group obtains knowledge thereof, written notice of any
event which constitutes a Default or Event of Default, specifying the nature of
such Default or Event of Default and any steps the Borrower Group is taking and
proposes to take to remedy the same and (ii) promptly, and in any event within
five
27
Amended and Restated Common Agreement
Business Days, after any senior officer of any member of the Borrower Group
obtains knowledge thereof, notice of:
(A) any litigation, arbitration or governmental
proceeding pending or threatened in writing (1) against any member of the
Borrower Group (x) involving a claim or claims in excess of $1,000,000
individually or $2,000,000 in the aggregate or (y) which, if decided adversely
to such member or members, would constitute a Material Adverse Effect, or (2)
with respect to any Financing Agreement;
(B) any proceeding or legislation by any
Governmental Authority to acquire compulsorily all or any portion of the
Collateral or all or any portion of the business or assets of any member of the
Borrower Group (whether or not constituting an "Event of Default" hereunder);
(C) any change in the Authorized Officers of the
Company or other member of the Borrower Group, giving certified specimen
signatures of any new officer so appointed and, if requested by an
Administrative Agent, reasonably satisfactory evidence of the authority of such
new officer;
(D) any notice relating to a material dispute
received or initiated by any member of the Borrower Group under any of the
Licenses;
(E) any Lien (other than a Permitted Lien) being
granted or established or becoming enforceable over any portion of the
Collateral;
(F) any one or more events, conditions or
circumstances (including any event of force majeure or any on going or
threatened strike, slowdown or work stoppage by the employees of any member of
the Borrower Group) known by a senior officer of any member of the Borrower
Group to exist or to have occurred or in the reasonable judgment of such officer
are expected or imminent that, in any case, constitute a Material Adverse
Effect;
(G) any notice received by any member of the
Borrower Group purporting to cancel or materially alter in an adverse manner the
terms of any insurance contract (including any notification of any premium
increase in excess of 20% over the prior premium payable for such insurance
contract); and
(H) any (i) fact, circumstance, condition or
occurrence that results in noncompliance with any Environmental Law and
constitutes a Material Adverse Effect and (ii) pending or, to the best knowledge
of any member of the Borrower Group, threatened (in writing) Environmental Claim
against any such member which could result in a Material Adverse Effect.
(g) Governmental Reports. Within 30 days after the date
on which any such report is submitted, a copy of any material report required to
be filed by any member of the Borrower Group with any Governmental Authority
with respect to an environmental aspect of the System.
(h) Information with Respect to Amendment, Waiver or
Consent. In connection with any proposed amendment, waiver or consent in respect
of any of the provisions
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Amended and Restated Common Agreement
hereof or of any other Transaction Document for which the approval of any Agent
or any Senior Lender is required, sufficient information (including a narrative
description of the effect thereof), sufficiently far in advance of the date a
decision is required, to enable such Agent or the Senior Lenders to make an
informed and considered decision with respect thereto (provided that such
information shall be required to be delivered only to those Agents and Senior
Lenders the consent of which is required).
(i) Notice of Termination of Vendor Agreements, etc.
Promptly, and in any event within three Business Days after any Responsible
Officer of the Company obtains knowledge thereof, notice of (y) the termination
of either of the Alcatel Procurement Agreement or the Qualcomm Procurement
Agreements and (z) any change in the ownership of Holdings of which it has
knowledge. Each notice pursuant to this subsection shall specify the nature
thereof, the period of existence thereof and what action, if any, the Borrower
Group proposes to take with respect thereto.
(j) [Intentionally Omitted]
(k) Other Information. Promptly upon transmission
thereof, (i) copies of any filings and registrations with, and reports to, the
United States Securities and Exchange Commission or any comparable Mexican
Governmental Authority by Holdings, (ii) copies of all financial statements,
proxy statements, notices and reports as Holdings shall send generally to public
shareholders and (iii) with reasonable promptness, such other information or
documents (financial or otherwise) as any Secured Party may reasonably request
from time to time (provided that such information shall be required to be
delivered only to the Secured Party or Parties requesting such information).
5.02 Books, Records and Inspections; Accounting and Audit
Matters.
(a) Each member of the Borrower Group will maintain
adequate management information and cost control systems and will keep proper
books of record and account adequate to reflect fairly the financial condition
and results of operations of the Borrower Group (taken as a whole) and all
dealings and transactions related to its business in which full, true and
correct entries shall be made in conformity with GAAP, consistently applied.
(b) Each member of the Borrower Group will permit, upon
reasonable notice from any Secured Party or a Relevant Party and during normal
business hours, such Administrative Agent or Relevant Party, as the case may be,
and the officers and designated representatives of such Person to visit and
inspect any of the properties of such member, and to examine and make copies of
the books of record and account and documents of such member and discuss the
affairs and accounts of the Borrower Group with, and be advised as to the same
by, their officers, all at such reasonable times and intervals and to such
reasonable extent as such Administrative Agent or Relevant Party may request.
(c) The Chief Finance Officer of Holdings shall authorize
the Independent Accountant (whose fees and expenses shall be for the account of
the Borrower Group) to communicate directly with the Relevant Parties, the
Alcatel Administrative Agent and the
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Amended and Restated Common Agreement
Qualcomm Administrative Agent, at reasonable times regarding the accounts and
operations of the Borrower Group, subject to the same precondition as is
described in Section 3.01(n).
(d) In the event that the Borrower Group wishes to
replace the existing Independent Accountant for any reason, the Borrower Group
shall provide (i) the Collateral Agent with written notice of its rationale
therefor and (ii) the name of the alternative firm of independent public
accountants to serve as the Independent Accountant, which firm shall be
internationally recognized.
5.03 Maintenance of Property and Insurance.
(a) Each member of the Borrower Group will keep all
property necessary to its business in good working order and condition in
accordance with generally accepted practices, standards and requirements; and
shall, from time to time, in respect of its properties and equipment, make all
necessary and proper repairs, renewals, replacements, extensions, additions,
betterments and improvements thereto, to the extent and in the manner useful or
customary for companies in similar businesses.
(b) Each member of the Borrower Group will keep its
present and future properties and Business insured as required by and in
accordance with the terms and provisions described in Schedule 5.03.
5.04 Corporate Franchises and System Permits; Enforcement
of Transaction Documents. The Borrower Group will:
(a) take, or cause to be taken, all actions necessary to
obtain in a timely manner all authorizations, consents and permits for which the
Borrower Group is responsible, and will promptly make, or cause to be made, all
required filings with governmental or similar authorities in Mexico, in each
case, to preserve, renew and keep in full force and effect (i) the existence as
a sociedad anonima de capital variable in good standing under the laws of Mexico
of each such member, (ii) its qualification to do business in Mexico and (iii)
(except to the extent the absence of which would not constitute a Material
Adverse Effect) its material rights, franchises, licenses, contracts, powers,
privileges and patents necessary for the construction, development, operation
and maintenance of the System, the conduct of the Business, and the performance
of its obligations under the Transaction Documents;
(b) obtain and maintain, or cause to be obtained and
maintained in full force and effect (or where appropriate, renew), (i) all
consents, authorizations and permits for which the Borrower Group is
responsible, licenses and patents, trademarks (and other intellectual property)
necessary or desirable for the care, custody, control, construction,
development, operation and maintenance of the System as contemplated by the
Business Plan (other than such consents, authorizations and permits the absence
of which would not constitute a Material Adverse Effect), and (ii) all consents,
authorizations and permits necessary for the conversion to Dollars of all Peso
amounts which are required to be converted by the Financing Agreements and for
the remittance to the United States in Dollars of any amounts paid or payable in
Dollars, as applicable, to the Senior Lenders in connection with any Financing
Agreement or Security Document or the transactions contemplated thereby; and
30
Amended and Restated Common Agreement
(c) preserve and maintain good and marketable title to
its properties and assets subject to no Liens other than Permitted Liens.
5.05 Compliance with Applicable Law. Each member of the
Borrower Group will comply in all respects with all Applicable Law applicable to
it or to the System except to the extent that the failure to so comply would not
constitute a Material Adverse Effect.
5.06 Use of Proceeds. The Company shall use the proceeds
of all Disbursements only for the purposes set forth in the applicable Credit
Agreement.
5.07 Taxes; Proper Legal Form. Each member of the Borrower
Group shall pay or arrange for payment on or prior to the date when due of all
present and future (i) Taxes imposed on it and (ii) claims, levies or
liabilities (including claims for labor, services, materials and supplies) for
sums which have become due and payable and which have become or, if unpaid,
would become a Lien (other than a Permitted Lien) upon the property of the
Borrower Group (or any part thereof) or otherwise would constitute a Material
Adverse Effect; provided, however, that no member of the Borrower Group shall be
required to pay any amount otherwise payable pursuant to either clause (i) or
(ii), if such amount is the subject of a Good Faith Contest. Each member of the
Borrower Group will promptly pay or cause to be paid any valid, final judgment
enforcing any such Taxes or other claims, levies or liabilities of any member of
the Borrower Group, and shall cause the same to be satisfied of record. Each
member of the Borrower Group shall take all such further action within its
control required to ensure that each of the Transaction Documents is in proper
legal form under the laws of Mexico or under the respective governing laws
selected in such Transaction Documents, for the enforcement thereof in such
jurisdictions without any further action on the part of any Agent or any other
Person.
5.08 Credit Agreements. Each member of the Borrower Group
will diligently perform each of its obligations under each of the Credit
Agreements.
5.09 Additional Documents; Filings and Recordings.
(a) Each member of the Borrower Group shall, at its own
expense, take all actions that have been or shall be reasonably requested by the
Collateral Agent, or that such member knows are, necessary to establish,
maintain, protect, perfect and continue the perfection of the first priority
security interests of the Collateral Agent for the benefit of the Secured
Parties created by the Security Documents and shall furnish timely notice of the
necessity of any such action, together with such instruments, in execution form,
and such other information as may be required to enable the Collateral Agent to
effect any such action. Without limiting the generality of the foregoing, each
member of the Borrower Group shall, at its own expense, (i) execute or cause to
be executed and shall file or cause to be filed or register or cause to be
registered such financing statements, continuation statements, fixture filings
and mortgages or deeds of trust in all places necessary or advisable (in the
opinion of counsel for the Collateral Agent), to establish, maintain and perfect
such security interests, (ii) discharge all other Liens (other than Permitted
Liens) or other legal and valid claims adversely affecting the rights of the
Collateral Agent and/or the other Secured Parties in the Collateral, (iii)
deliver or publish all notices to third parties that may be required to
establish or maintain the validity, perfection or priority of any Lien created
pursuant to the Security Documents, and (iv) file or cause to be filed or
register or
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Amended and Restated Common Agreement
cause to be registered the Mortgage at the Public Registry of Commerce and/or
the Public Registry of Property in each locality where the Borrower owns any
real property in Mexico, including any real property acquired by the Borrower
after the Closing Date.
(b) Each member of the Borrower Group will do everything
necessary in the judgment of the Collateral Agent, (including filing,
registering and recording all necessary documents and paying all fees, taxes,
levies, imposts and expenses in connection therewith) to (A) create security
arrangements, including, if applicable, the establishment of a pledge or the
perfection of any Lien or, as applicable, the enforceability of a Lien as
against any member of the Borrower Group and any subsequent Lien or (including a
judgment lien or), holder of a fixed or floating charge, or transferee for or
not for value, in bulk, by operation of law, or otherwise, in each case granted,
with respect to future assets in accordance with the requirements of Mexican law
and New York law, (B) maintain the security and pledges created by the Security
Documents in full force and effect at all times (including, as applicable, the
priority thereof) and (C) preserve and protect the Collateral and protect and
enforce its rights and title, and the rights and title of the Collateral Agent,
for the benefit of the Secured Parties, to the security created by the Security
Documents. Furthermore, any member of the Borrower Group shall cause to be
delivered to the Intercreditor Agent such opinions of counsel and other related
documents as may be reasonably requested by the Collateral Agent, to assure
compliance with this Section 5.09.
(c) Upon assignments of Loans, in whole, from time to
time, the Collateral Agent or the applicable Administrative Agent, as the case
may be, shall deliver to the Company for execution by the Company and each other
member of the Borrower Group, as applicable, a Note or the Note(s), as the case
may be, payable to the order of the assignee of such Loan which evidence(s) the
Loan so assigned and a new reconocimiento de adeudo or an amendment to the then
current reconocimiento de adeudo, as the respective Agent may request,
reflecting the assignment of such Loan and the assignee of such Loan. The
Company and each other member of the Borrower Group, as applicable, shall
execute and deliver the new Note(s) and the new or amended reconocimiento de
adeudo, as the case may be, to the Collateral Agent or the applicable
Administrative Agent, as the case may be, within five (5) Business Days after
receipt thereof by the Company. Concurrently with the delivery by the Company of
the executed new Note(s) and the new or amended reconocimiento de adeudo, as the
case may be, the Collateral Agent or the applicable Administrative Agent, as the
case may be, shall deliver to the Company the existing Note(s) of the assigning
Lender for cancellation. To the extent a new reconocimiento de adeudo is
executed and delivered, such new reconocimiento de adeudo shall contain a
statement to the effect that the prior reconocimiento de adeudo superseded by
the new reconocimiento de adeudo is no longer in force and effect.
(d) Upon assignments of Loans, in part, from time to
time, the Collateral Agent or the applicable Administrative Agent, as the case
may be, shall deliver to the Company for execution by the Company and each other
member of the Borrower Group, as applicable, (A) one or more Notes payable to
the order of each assignee of such Loan which evidences the portion of such Loan
so assigned and a Note payable to the order of the assignor of such Loan which
evidences the portion of such Loan not so assigned, provided that the aggregate
principal amount of such Notes shall be equal to the outstanding principal
amount of such Loan prior to such assignment, and (B) a new or amended
reconocimiento de adeudo, as the respective Agent may request, reflecting the
assignment of such Loan, the assignor of such Loan and each
32
Amended and Restated Common Agreement
assignee of such Loan. The Company and each other member of the Borrower Group,
as applicable, shall execute and deliver the new Notes and the new or amended
reconocimiento de adeudo, as the case may be, to the Collateral Agent or the
applicable Administrative Agent, as the case may be, within five (5) Business
Days after receipt thereof by the Company. Concurrently with the delivery by the
Company of the executed new Notes and the new or amended reconocimiento de
adeudo, the Collateral Agent or the applicable Administrative Agent, as the case
may be, shall deliver to the Company the existing Note(s) of the assigning
Lender for cancellation. To the extent a new reconocimiento de adeudo is
executed and delivered, such new reconocimiento de adeudo shall contain a
statement to the effect that the prior reconocimiento de adeudo superseded by
the new reconocimiento de adeudo is no longer in force and effect.
(e) At the request of the applicable Administrative
Agent, the Company shall from time to time execute and deliver to such
Administrative Agent within five (5) Business Days after receipt thereof by the
Company an acknowledgment of assignments of Loans. The Company hereby expressly
acknowledges that all assignments of Loans will be notarized in any country in
which such Administrative Agent deems convenient or appropriate, including
Mexico, and, to the extent necessary or convenient, have an apostille affixed
thereto, and to the extent necessary or convenient, will be filed or registered
in all places necessary or advisable in Mexico. The Company hereby agrees to use
its best efforts in cooperating with the relevant Administrative Agent in order
to complete the process described in this Section 5.09(e), for which it shall
execute and/or deliver all documents reasonably requested by such applicable
Administrative Agent.
5.10 Condemnation Event; Casualty Event. If any Casualty
Event or Condemnation Event shall occur with respect to the System or any
material part thereof, the Borrower Group shall (i) promptly upon discovery or
receipt of notice of any occurrence thereof provide written notice thereof to
the Agents and the Relevant Parties, (ii) diligently pursue all its rights to
compensation against all relevant insurers, reinsurers and/or Governmental
Authorities, as applicable, in respect of such event, (iii) not, without the
written consent of the Collateral Agent compromise or settle any claim with
respect thereto if the amount of any such claim (either individually or in the
aggregate) exceeds $25,000,000, and (iv) if the amount of Loss Proceeds exceeds
$50,000,000 immediately pay or apply all such Loss Proceeds stemming from such
event to the Collateral Agent for deposit into a separate escrow account to be
maintained by the Collateral Agent for the benefit of the Secured Parties (the
"Loss Proceeds Escrow Account") and to the extent that any Loss Proceeds are
less than the minimum required for deposit into the Loss Proceeds Escrow
Account, the Borrower Group shall not be obligated to make such deposit, but
shall be required to apply such Loss Proceeds, as soon as may be practicable, to
either (a) the prepayment of all Senior Indebtedness then outstanding on a Pro
Rata Payment basis, or (b) the repairing, rebuilding, reconstructing or
re-equipment of the System. Amounts on deposit in the Loss Proceeds Escrow
Account shall be disbursed to or for the credit of the Company for the purpose
of repair, reconstruction or re-equipment of the System which has been damaged
or destroyed or condemned, upon satisfaction of conditions to such disbursement
which shall be set forth in an agreement (the "Loss Escrow Agreement") which
shall be executed and delivered by the Collateral Agent and each member of the
Borrower Group as soon as may be practicable following the deposit to the Loss
Proceeds Escrow Account, which Loss Escrow Agreement shall be in form and
substance reasonably satisfactory to the Required Voting Parties as set forth
33
Amended and Restated Common Agreement
in the Intercreditor Agreement. If the conditions set forth in the Loss Escrow
Agreement cannot be satisfied or if the Company otherwise elects, then all of
the Loss Proceeds shall be disbursed from the Loss Proceeds Escrow Account and
applied to the prepayment of Senior Indebtedness then outstanding on a Pro Rata
Payment basis. Each member of the Borrower Group consents to the participation
of the Collateral Agent in any proceedings regarding a Casualty Event or
Condemnation Event, and each such member shall from time to time deliver to the
Collateral Agent all documents and instruments requested by it in connection
with such participation. If and to the extent that any Senior Indebtedness then
outstanding does not permit the prepayment thereof at such time or under such
circumstances as are described in this Section 5.10, or any Senior Lender
notifies the Company and each Administrative Agent that it does not desire any
such prepayment from such amounts, then any prepayment referred to in this
Section 5.10 shall be applied on a Pro Rata Payment basis as if such Senior
Indebtedness was not then outstanding. Any prepayment of Senior Indebtedness
made in accordance with this Section 5.10 shall be made simultaneously with the
prepayment of other Senior Indebtedness (other than as set forth in the
preceding sentence), provided that if such prepayment of any such Senior
Indebtedness would require a prepayment or break-funding penalty, such
prepayment amounts may, at the option of the Company, be deposited with the
applicable Administrative Agent, invested in Permitted Investments, and applied
to the prepayment of such Senior Indebtedness on the first date as to which no
prepayment or break-funding penalty would be imposed.
5.11 Application of Equity Contributions. Holdings shall,
immediately upon receipt of cash or other funds or assets (i) representing any
cash contributions made by the shareholders of Holdings in consideration for
Capital Stock issued by Holdings (other than with respect to the cash
contribution contemplated by Section 2.2 of the Contribution Agreement),
including any proceeds received by Holdings pursuant to a Qualified Public
Offering, or (ii) received as the proceeds of any Indebtedness issued by
Holdings (other than the proceeds of Indebtedness which, is required by the
Person furnishing or underwriting such Indebtedness, to be held in a reserve or
similar account by Holdings for payment of principal or interest on such
Indebtedness and other than the proceeds of any Subordinated Loan that are lent
to the Company in accordance with Section 5.24 hereof), or (iii) representing
any other cash, liquid investments or other assets (other than stock held by
Holdings in its subsidiaries), contribute no less than 85% of such cash or other
funds or assets (collectively, the "Cash Proceeds") to the Company as equity
contributions (subject to Section 6.03 hereof) and contribute the remainder, if
any, of such Cash Proceeds (the "Remaining Cash Proceeds") to Pegaso PCS,
Personnel Co., Finanzas or Finco as equity contributions (subject to Section
6.03 hereof), solely in the event that such Remaining Cash Proceeds are
necessary (and only up to the amount required) in order to permit Pegaso PCS,
Personnel Co., Finanzas or Finco, as the case may be, to comply with Applicable
Law requirements regarding minimum capitalization rules, and only to the extent
that such Remaining Cash Proceeds are required to avoid a mandatory dissolution
or liquidation of such entity. Any amount of the Remaining Cash Proceeds not
required to be contributed to Pegaso PCS, Personnel Co., Finanzas or Finco in
order to comply with the minimum capitalization rules and to avoid a mandatory
dissolution or liquidation of such entity shall be contributed to the Company as
an equity contribution in accordance with clause (iii) of this Section 5.11.
Other than with respect to a Qualified Public Offering, Holdings shall ensure
that each new shareholder of Holdings, as a precondition to its contribution of
equity, execute and deliver the Sponsor Negative Pledge Agreement and in take
all actions required by such agreement with respect to the shares of such
shareholder.
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Amended and Restated Common Agreement
5.12 Translations. If any Transaction Document, notice,
certificate, instrument, communication or other document required to be
delivered to any Person pursuant to this Agreement is not originally executed,
delivered or given in English (regardless of whether such requirement arises
before or after the Initial Disbursement Date), the Borrower Group shall, upon
written request of any Agent or Relevant Party entitled to receive the same,
concurrently with the delivery of such Transaction Document, notice,
certificate, instrument or other document, additionally and at the Company's
expense, provide to such Person a certified English translation thereof. Subject
to Section 8.13, if any Transaction Document, notice, certificate, instrument,
communication or other document required to be delivered to any Person pursuant
to this Agreement is not originally delivered in Spanish, and a Spanish
translation thereof shall be necessary or appropriate, in the reasonable
judgment of any Secured Party, under Mexican law or in connection with the
administration or enforcement of any of the Financing Agreements, then any
Secured Party may, or upon the request of any Secured Party the Company shall,
obtain a certified Spanish translation thereof at the Company's expense for the
benefit of the Secured Parties.
5.13 New Subsidiaries. In the event that Holdings or any
other member of the Borrower Group (or any New Subsidiary, as defined below)
forms, purchases or acquires (whether for consideration or otherwise) any
Subsidiary other than those Persons which are, as of December 15, 1998, members
of the Borrower Group (a "New Subsidiary"), then the member of the Borrower
Group which has so formed, acquired or purchased such New Subsidiary shall (at
its own expense), within 30 days of the date of such formation, acquisition or
purchase, deliver to the Agents and the Relevant Parties the following documents
(which shall be in form and substance reasonably acceptable to the Agents): (A)
a guaranty by the New Subsidiary of all of the Obligations, substantially in the
form of the Pegaso Guaranty Agreement delivered by the Guarantors as of December
15, 1998, (B) a trust agreement (substantially in the form of the Guaranty Trust
Agreement) entered into by the member of the Borrower Group which is the parent
company of such New Subsidiary, as settlor, which has the effect of transferring
title to 100% of the Capital Stock of such New Subsidiary to the trustee under
such trust agreement, (C) an instrument in writing, executed and delivered by
the New Subsidiary, pursuant to which such New Subsidiary becomes a member of
the Borrower Group and subject to this Agreement and (to the extent appropriate)
the other Financing Agreements, (D) such security documents as shall (in the
opinion of the Administrative Agents) be necessary to grant to the Collateral
Agent a first priority and perfected Lien on all of the assets, contract rights,
intangibles and revenues of the New Subsidiary, and (E) opinions of counsel,
reasonably acceptable to the Administrative Agents, as to the validity and
enforceability of such foregoing agreements.
5.14 Other Properties Subject to Liens; After-Acquired
Property.
(a) Within 30 days of the purchase or acquisition by the
Company of any property (including, without limitation, Capital Stock of any
other Person), asset, contract or other right, or intangible which is not then
subject to a Lien granted by the Security Documents (collectively,
"After-Acquired Property"), the Company shall so notify the Administrative
Agents, the Relevant Parties and the Collateral Agent in Writing and shall
deliver to the Collateral Agent (at the expense of such member) such agreements,
instruments and other documents (including amendments to the Mortgage or other
Security Documents) as shall be deemed necessary or appropriate, in the
reasonable opinion of the Collateral Agent, to grant a
35
Amended and Restated Common Agreement
first priority and perfected Lien on such After-Acquired Property to the
Collateral Agent, subject to no Liens other than Permitted Liens.
(b) Without limiting the generality of the foregoing and
except as expressly provided in the Post-Closing Agreement, the Company shall,
within 30 days of entering into any Material Agreement, (i) execute an
Assignment Agreement in favor of the Collateral Agent, for the benefit of the
Senior Lenders, collaterally assigning all of the Company's rights under such
material agreement and (ii) obtain the consent of any contractual counterparties
necessary or desirable, in form and substance reasonably satisfactory to the
Administrative Agents, to permit such collateral assignment.
(c) As provided in Section 2.04, any and all property,
assets, contract or other rights or intangibles which are granted to any Senior
Lender in connection with the issuance of Additional Senior Indebtedness shall
be granted to the Collateral Agent and held for the benefit of all of the Senior
Lenders as security for all of the Obligations as provided in the Intercreditor
Agreement.
5.15 [Intentionally Omitted]
5.16 [Intentionally Omitted]
5.17 [Intentionally Omitted]
5.18 Payment of Certain Fees. The Borrower Group shall pay
all of the reasonable and customary fees and expenses (including up-front and
on-going fees and expenses) of (i) the Collateral Agent, (ii) the Intercreditor
Agent, (iii) the trustee under the Guaranty Trust Agreement, in each case upon
receipt of invoices from such parties, and (iv) the notary in connection with
any amendments to the Mortgage.
5.19 Consents, Approvals. The Borrower Group shall, from
time to time, obtain all material governmental and third party consents,
approvals, Permits and licenses required to be obtained by such time in
connection with the transactions contemplated by the Alcatel Procurement
Agreement, the Qualcomm Procurement Agreements and the Financing Agreements and
such consents, approvals and licenses shall be kept in effect so long as
required, including, without limitation, (i) any required consent of any
Governmental Authority required to be obtained to permit the assignment for
security purposes of the Licenses and all additional licenses granted to any
member of the Borrower Group and (ii) all required consents from contractual
counterparties of the Borrower Group required to be obtained to permit the due
and proper assignment to the Collateral Agent of the Collateral.
5.20 Maintenance of Licenses.
(i) The Company shall take any and all action
necessary to maintain the Licenses in compliance with Applicable Law,
except to the extent that the failure to do so would not constitute an
Event of Default under Section 7.13.
(ii) The Company shall not sell, assign, transfer
or partition the Licenses other than as permitted by Section 6.02(e) or
as otherwise required by any
36
Amended and Restated Common Agreement
Governmental Authority in connection with the transactions contemplated
by the Stock Purchase Agreement or the Contribution Agreement.
(iii) The Company shall not take any action which
would violate any federal, state, national, provincial or local
statute, rule regulation or order relating to the Licenses if such
violation would constitute a Material Adverse Effect.
(iv) The Company shall not materially modify or
amend the Licenses if such modification or amendment would result in
the Licenses not covering at least Region 9, and either Region 4 or
Region 6 (as such Regions are defined in the Joint Venture Agreement)
or the number of Covered Pops covered by the Licenses, as so modified
or amended, would not exceed 33,000,000 Pops.
(v) The Company shall enter into all
interconnection agreements required under or by the Licenses, if any.
(vi) The Company shall not take any action which
would violate any License or any agreement relating to the Licenses if
such action would result in an Event of Default under Section 7.13.
(vii) The Company shall not (other than as
contemplated by the Security Documents) pledge as collateral the
Licenses, nor subject the Licenses to any claim, Lien, security
interest or other encumbrance.
Provided; however, that nothing in this Section 5.20 shall
limit the ability of the Company to sell or dispose of assets, including a
portion of the Licenses to the extent expressly permitted in Section 6.02(e).
5.21 Site Acquisition.
(a) In connection with site acquisition for the placement
or installation of Intelligent Base Station Controllers ("BSCs"), Base Station
Transceivers ("BTSs"), Mobile Switching Centers ("MSCs") or other infrastructure
equipment, the Company shall enter into a Site Lease with minor modifications as
shall be reasonably necessary to negotiate with particular landlords; and
(b) concurrently with entering into any lease of real
property in connection with the placement or installation of BSCs, BTSs, MSCs or
other infrastructure equipment, whether or not in the form of a Site Lease, the
Company shall deliver to the Collateral Agent (i) a copy of such lease and (ii)
if the lessor of such real property is party to a lending arrangement with
respect to such real property, a nondisturbance agreement, duly executed by the
lessor's lender in form suitable for recordation, or, in the case of each item
(a) or (b) of this Section 5.21, other documentation reasonably satisfactory to
the Collateral Agent.
5.22 Minimum Assets. The Company shall at all times own,
legally and beneficially, title to the Minimum Assets.
5.23 [Intentionally Omitted].
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Amended and Restated Common Agreement
5.24 Subordinated Loans. Each member of the Borrower Group
other than the Company shall, upon the receipt of any proceeds of a Subordinated
Loan, make a loan to the Company in the principal amount of such Subordinated
Loan received by it on the date that it receives such Subordinated Loan.
ARTICLE VI
NEGATIVE COVENANTS
Each member of the Borrower Group covenants and agrees,
jointly and severally, that, until the Commitments have been terminated and all
Obligations in connection with the Senior Indebtedness are paid in full (unless
waived in writing in accordance with the Intercreditor Agreement):
6.01 Liens. Each member of the Borrower Group will not,
and will not agree to, create, incur, assume or suffer to exist any Lien upon or
with respect to any of its property, revenues or assets (real, personal or
mixed, tangible or intangible) whether now owned or hereafter acquired or sell
any such property or assets subject to an understanding or agreement, contingent
or otherwise, to repurchase such property or assets (including sales of accounts
receivable or notes with recourse to such Person) or assign any right to receive
income; provided that the provisions of this Section 6.01 shall not prevent the
creation, incurrence, assumption or existence of the following Liens, rights or
trusts (each, a "Permitted Lien"):
(i) Liens created by any of the Security
Documents or the other Financing Agreements, or otherwise in favor of
the Collateral Agent for the benefit of the Senior Lenders in
connection with the transactions contemplated by this Agreement;
(ii) Liens in respect of property, revenues or
assets of a member of the Borrower Group imposed by Applicable Law,
which were incurred in the ordinary course of business, do not secure
Indebtedness and do not arise as a consequence of any default by a
member of the Borrower Group in connection with any Transaction
Document or any obligation owed to any Person, and (x) which do not in
the aggregate materially detract from the value of such property or
assets or materially impair the use thereof in the operation of the
Business of the Borrower Group or (y) which are the subject of a Good
Faith Contest by appropriate proceedings, which proceedings have the
effect of preventing the forfeiture or sale of the property or asset
subject to such Lien;
(iii) Liens for taxes, assessments and other
governmental charges or requirements which are not then due or which
are subject to a Good Faith Contest;
(iv) Liens in respect of judgments or awards
against a member of the Borrower Group which are subject to a Good
Faith Contest but only to the extent, for an amount and for a period
not resulting in an Event of Default under Section 7.12;
(v) Liens created pursuant to Capital Leases
permitted by Section 6.04(c);
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Amended and Restated Common Agreement
(vi) Liens incurred or deposits made in the
ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to secure
the performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, performance and
return-of-money bonds and other similar obligations incurred in the
ordinary course of business (exclusive of obligations in respect of the
payment for borrowed money);
(vii) leases, subleases or licenses granted to
others not interfering in any material respect with the Business;
(viii) easements, rights-of-way, restrictions,
minor defects or irregularities in title and other similar charges or
encumbrances not interfering in any material respect with the ordinary
conduct of the Business;
(ix) any interest or title of a lessor under any
lease permitted by this Agreement and Liens arising from financing
statements regarding leases permitted by this Agreement;
(x) purchase money Liens securing payables
arising from the purchase by any member of the Borrower Group of any
equipment or goods in the normal course of business, provided that such
payables do not constitute Indebtedness;
(xi) Liens arising pursuant to purchase money
mortgages or security interests securing Indebtedness not constituting
Senior Indebtedness or High Yield Debt representing the purchase price
of assets acquired by any member of the Borrower Group after the SPA
Closing Date, provided that any such Liens attach only to the asset so
acquired and that all Indebtedness secured by Liens created pursuant to
this clause (xi) is permitted by this Article 6;
(xii) Liens on property (other than Capital Stock)
of any Person that becomes a member of the Borrower Group after the SPA
Closing Date, provided that such Liens are in existence at the time
such Person becomes a member of the Borrower Group, were not created in
anticipation thereof and do not attach to any property of any other
member of the Borrower Group;
(xiii) Liens on wireless telecommunication handsets
granted in favor of a holder of Indebtedness, provided that (a) such
Indebtedness was incurred for the purpose of, and the proceeds thereof
were expended for, the payment for such handsets, and (b) such
Indebtedness does not constitute Additional Senior Indebtedness;
(xiv) with respect to the incurrence of High Yield
Debt, the Lien described in the parenthetical in Section 6.04(h)(C);
(xv) Liens (other than Liens elsewhere described
in this Section 6.01), provided that (A) the aggregate amount of the
Indebtedness secured by such Liens does not at any time exceed the
greater of (a) $10,000,000, or (b) one percent (1%) of the aggregate of
the Consolidated Debt and the Consolidated Paid-In Equity at the time
of the incurrence of such Indebtedness, and (B) such Liens do not
encumber any of the
39
Amended and Restated Common Agreement
following assets or properties: (a) the Licenses, (b) any assets or
equipment furnished under the Vendor Agreements, (c) any intellectual
property rights, (d) any accounts receivable or proceeds thereof
related to the Business, or (e) any real estate; provided further, that
this clause (xv) shall not apply to permit any Liens by New
Subsidiaries; and
6.02 Consolidation; Merger; Sale of Assets. Except as
contemplated by the Contribution Agreement, no member of the Borrower Group will
wind up, liquidate or dissolve its affairs, or enter into any transaction of
merger or consolidation, sell or otherwise dispose of all or any part of its
property or assets (other than sales and other dispositions (including asset
swaps and similar transactions) when no Event of Default exists to the extent
such sale or disposition is in the ordinary course of business) or purchase,
lease or otherwise acquire all or any part of the property or assets of any
Person (other than purchases or acquisitions of inventory, leases, materials and
equipment in the ordinary course of business) or agree to do any of the
foregoing at any future time, except that the following shall be permitted:
(a) any Subsidiary of a member of the Borrower Group
(other than the Company) may be merged or consolidated with or into, or be
liquidated into, another member of the Borrower Group (so long as a member of
the Borrower Group is the surviving corporation), or all or any part of its
business, properties and assets may be conveyed, leased, sold or transferred to
a member of the Borrower Group, in each case to the extent that (i) no detriment
results in the operation of the Business, (ii) there is no detriment to the
security interests and Liens created pursuant to the Security Documents, and
(iii) the Company continues to own, both legally and beneficially, the Minimum
Assets;
(b) Capital Expenditures; provided that such Capital
Expenditures do not exceed $100,000,000 in calendar year 2002, $350,000,000 in
calendar year 2003, $400,000,000 in calendar year 2004, $400,000,000 in calendar
year 2005, $150,000,000 in calendar year 2006, $100,000,000 in calendar year
2007 and $100,000,000 in calendar year 2008; provided that if any portion of
such permitted Capital Expenditure is not made within the designated period,
such unused amount shall be available (and permitted) to be made as Capital
Expenditures in ensuing periods;
(c) each member of the Borrower Group may lease (as
lessee) real or personal property in the ordinary course of business (so long as
such lease does not create a Capitalized Lease Obligation not otherwise
permitted by Section 6.04(c));
(d) licenses or sublicenses by members of the Borrower
Group of intellectual property in the ordinary course of business of such
members, provided, that such licenses or sublicenses shall not interfere with
the Business and that for purposes of this Section 6.02(d), the term
"intellectual property" shall not include the trademarks, trade names or logos
that are the subject of Section 7.1 of the Shareholders Agreement, as amended or
restated;
(e) sales of Licenses (or portions thereof) at fair
market value, provided that (i) following such sale or sales, the Company
continues to own the Licenses that permit it to maintain a minimum 10 MHz
spectrum in the 1900 MHz band in each of Regions 1 through 9 (as defined in the
Joint Venture Agreement) and (ii) to the extent the amount of the net proceeds
of such sale or sales exceeds the aggregate amount of (A) Capital Expenditures
of the Company
40
Amended and Restated Common Agreement
(whether or not financed) plus (B) all amounts paid in connection with
acquisitions permitted under clause (g) below, in each case, during the period
from the date of receipt of such net proceeds by the Company through and
including the date that is 180 days thereafter, such excess shall be applied to
the prepayment of outstanding Senior Indebtedness on a Pro Rata Payment basis as
soon as may be practicable following the end of such 180-day period; provided,
however, that any sale, assignment, transfer, partition or other disposition of
any License (or portion thereof) that is required by any Governmental Authority
in connection with the transactions contemplated by the Stock Purchase Agreement
or the Contribution Agreement that is made at fair market value and that permits
the Company to maintain a minimum 10 MHz spectrum in the 1900 MHz band in each
of Regions 1 through 9 (as defined in the Joint Venture Agreement) (the
"Required License Sale") shall be deemed permitted by this Section 6.02, and the
Borrower Group shall not be required to comply with the provisions of Section
6.02(e)(i) and (ii) above with respect to such Required License Sale, provided
that to the extent the amount of the net proceeds of such Required License Sale
exceeds the aggregate amount of Capital Expenditures for the four quarterly
accounting periods prior to the quarterly accounting period in which the closing
of such Required License Sale occurred, such excess shall be applied to the
prepayment of outstanding Senior Indebtedness on a Pro Rata Payment basis within
15 days after the end of the quarterly accounting period in which the closing of
such Required License Sale occurred;
(f) sales or dispositions of assets (other than the
Licenses or portions thereof) provided, that to the extent the amount of the net
proceeds of such sale or sales exceeds the aggregate amount of (A) Capital
Expenditures of the Company (whether or not financed) plus (B) all amounts paid
in connection with acquisitions permitted under clause (g) below, in each case,
during the period from the date of receipt of such net proceeds by the Company
through and including the date that is 180 days thereafter, such excess shall be
applied to the prepayment of outstanding Senior Indebtedness on a Pro Rata
Payment basis as soon as may be practicable following the end of such 180-day
period; and
(g) other than with respect to New Subsidiaries, the
acquisitions of additional telecommunications businesses and assets in Mexico,
provided that the aggregate acquisition price of all such businesses and assets
does not exceed $50,000,000.
In connection with the sale or disposition of any License (or
portion thereof) or any other asset or property of a member of the Borrower
Group which is permitted under this Section 6.02 and which is then subject to a
Lien created by the Security Documents, the Collateral Agent shall execute such
documents of release as shall be reasonably requested by the Borrower Group in
order to release such Licenses (or portions thereof) or such other asset or
property from the Lien created by the Security Documents. If and to the extent
that any Senior Indebtedness then outstanding does not permit the prepayment
thereof at such time or under such circumstances as are described in clause (e)
or clause (f) of this Section 6.02, or any Senior Lender notifies the Company
and each Administrative Agent that it does not desire any such prepayment from
such sources, then any prepayment referred to in such clauses shall be applied
on a Pro Rata Payment basis as if such Senior Indebtedness was not then
outstanding. Any prepayment of Senior Indebtedness made in accordance with this
Section 6.02 shall be made simultaneously with the prepayment of other Senior
Indebtedness (other than as set forth in the preceding sentence), provided that
if such prepayment of any such Senior Indebtedness would
41
Amended and Restated Common Agreement
require a prepayment or break-funding penalty, such prepayment amounts may, at
the option of the Company, be deposited with the applicable Administrative
Agent, invested in Permitted Investments, and applied to the prepayment of such
Senior Indebtedness on the first date as to which no prepayment or break-funding
penalty would be imposed.
6.03 Restricted Payments. No member of the Borrower Group
will declare or pay any dividends (other than dividends payable solely in
Capital Stock of such Person) or return any capital to, its stockholders or
authorize or make any other distribution, payment or delivery of property or
cash to its stockholders as such, or redeem, retire, purchase, or otherwise
acquire, directly or indirectly, for consideration, any shares of any class of
its own Capital Stock now or hereafter outstanding (or any warrants for or
options or stock appreciation rights in respect of any of such shares), or set
aside any funds for any of the foregoing purposes, or permit any of its
Subsidiaries to purchase or otherwise acquire for consideration any shares of
any class of the Capital Stock of any other member of the Borrower Group or any
other Subsidiary, as the case may be, now or hereafter outstanding (or any
options or warrants or stock appreciation rights issued by such Person with
respect to its capital stock) (all of the foregoing "Dividends"), except that
(A) any Subsidiary of the Company, Pegaso PCS, Personnel Co., Finanzas or Finco
may pay Dividends to the Company, Pegaso PCS, Personnel Co., Finanzas or Finco,
as applicable, (B) each of the Company, Pegaso PCS, Personnel Co., Finanzas or
Finco may pay cash Dividends to Holdings to the extent, but only to the extent,
that Holdings needs all of such Dividends within five Business Days following
the payment of such Dividend to pay (i) normal, reasonable and customary
administrative costs incurred in the ordinary course of its business, (ii) Taxes
paid in cash related to the Business on behalf of the Borrower Group, (iii) to
the extent that no Default or Event of Default exists at the time such Dividend
is paid and the Company reasonably believes that it has, or will have on each of
the next following Payment Dates applicable to each tranche of Senior
Indebtedness, cash or Permitted Investments equal to the debt service coming due
on such Payment Dates, interest on, and (subject to Section 6.04(h)(B))
regularly scheduled principal coming due on, High Yield Debt (issued by
Holdings) within such five Business Day-period (and any Dividends not so
utilized within such five Business Day-period shall be returned to the
appropriate Subsidiary of Holdings) and (iv) to the extent no Default or Event
of Default exists at the time of such payment, dividends by Holdings which are
permitted to be paid pursuant to clause (C) below, and (C) at any time during
any fiscal year, Holdings may pay Dividends to its shareholders provided that,
(1) the Cash Flow Test shall be satisfied as of the date of such Dividend
payment, (2) the EBITDA Test shall be less than or equal to 4.0 to 1 as of the
date of such Dividend payment; provided, that for purposes of this Section 6.03
the components of the EBITDA Test shall be calculated as follows: (x)
Consolidated Debt, cash and Permitted Investments shall be measured as of the
date of such Dividend payment and (y) EBITDA shall be measured based on the two
preceding fiscal quarters most recently ended, and (3) simultaneously with any
such Dividend payment, there shall be paid to the holders of Senior
Indebtedness, as a prepayment of the principal amount of such Senior
Indebtedness then outstanding and on a Pro Rata Payment basis, an amount equal
to such Dividend multiplied by the ratio (expressed as a percentage of not less
than 100%) which (i) the total principal amount of Senior Indebtedness
outstanding on the date of such prepayment bears to (ii) the total Consolidated
Paid-In Equity as of such date, both calculated in a manner consistent with the
provisions of Section 6.10. If and to the extent that any Senior Indebtedness
then outstanding does not permit the prepayment thereof at such time or under
such circumstances as are described in this Section 6.03, or any Senior Lender
notifies the Company and each
42
Amended and Restated Common Agreement
Administrative Agent that it does not desire any such prepayment from such
sources, then any prepayment referred to in this Section 6.03 shall be applied
on a Pro Rata Payment basis as if such Senior Indebtedness was not then
outstanding. Any prepayment of Senior Indebtedness made in accordance with this
Section 6.03 shall be made simultaneously with the prepayment of other Senior
Indebtedness (other than as set forth in the preceding sentence), provided that
if such prepayment of any such Senior Indebtedness would require a prepayment or
break-funding penalty, such prepayment amounts may, at the option of the
Company, be deposited with the applicable Administrative Agent, invested in
Permitted Investments, and applied to the prepayment of such Senior Indebtedness
on the first date as to which no prepayment or break-funding penalty would be
imposed.
6.04 Indebtedness. No member of the Borrower Group will
contract, create, incur, assume or suffer to exist any Indebtedness, except the
following ("Permitted Indebtedness"):
(a) subject to Section 6.09 or Section 6.10 (whichever is
then applicable), Indebtedness incurred pursuant to the Alcatel Credit
Agreement, the Qualcomm Credit Agreement and the Facility 2 Credit Agreement;
(b) Indebtedness owing by any member of the Borrower
Group to another member of the Borrower Group so long as (i) not otherwise
restricted by this Agreement, and (ii) any payment of such debt (whether
principal, interest or otherwise) is specifically subordinated to the Senior
Indebtedness and is not secured in any form; provided, however, that no loan or
advance may be made by the Company to any other member of the Borrower Group if
(A) an Event of Default has occurred and is then continuing or (B) the total
amount so loaned or advanced by the Company and then outstanding exceeds an
amount equal to 1% of the Consolidated Paid-In Equity;
(c) Capitalized Lease Obligations of a member of the
Borrower Group not constituting Senior Indebtedness and Indebtedness incurred
pursuant to purchase money mortgages or security interests permitted by Section
6.01(xi), provided that the aggregate of such Capitalized Lease Obligations
under all Capitalized Leases entered into after the SPA Closing Date plus the
principal amount of all Indebtedness secured by such purchase money mortgages or
security interests shall not exceed at any time outstanding $25,000,000;
(d) Additional Senior Indebtedness as provided in Section
2.04, provided that (i) after the incurrence thereof the Leverage Ratio and the
Senior Leverage Ratio set forth in Section 6.10 or the EBITDA Test set forth in
Section 6.09 (whichever is then applicable) shall be satisfied as of the last
day of the last fiscal quarter last ended for which financial statements have
been delivered in accordance with Section 5.01(a), on a pro forma basis as if
such Additional Senior Indebtedness and any other Indebtedness which was
incurred after such last day was incurred and outstanding on such last day and
any Indebtedness which was repaid after such last day was not outstanding on
such last day, and (ii) the weighted average life of such Additional Senior
Indebtedness is not shorter than the shorter of (A) 4.3 years or (B) the
remaining weighted average life of the Indebtedness under the Alcatel Credit
Agreement and the Qualcomm Credit Agreement outstanding immediately prior to the
issuance of such Additional Senior Indebtedness;
43
Amended and Restated Common Agreement
(e) other Indebtedness outstanding prior to, and to
remain outstanding after, December 15, 1998 to the extent specified in Schedule
6.04;
(f) Contingent Obligations of any of the Borrower Group
arising with respect to customary indemnification obligations incurred in
connection with permitted asset dispositions;
(g) unsecured Indebtedness of the Company taking the form
of a working capital revolving credit facility, provided that (A) the principal
amount of such Indebtedness does not at any time exceed $75,000,000, and (B)
after the incurrence thereof the EBITDA Test set forth in Section 6.09 or the
Leverage Ratio and the Senior Leverage Ratio set forth in Section 6.10
(whichever is then applicable) shall be satisfied on the last day of the last
fiscal quarter last ended for which financial statements have been delivered in
accordance with Section 5.01(a), on a pro forma basis as if such unsecured
Indebtedness and any other Indebtedness which was incurred since such last day
was incurred and outstanding on such last day and any Indebtedness which was
paid after such last day was not outstanding on such last day;
(h) Indebtedness incurred by any member of Borrower
Group, other than New Subsidiaries, not otherwise described in this Section 6.04
("High Yield Debt"), provided that (A) the proceeds of such High Yield Debt are
intended to be applied (and are applied) to System Costs, to operating expenses
of the Business, or to cover required debt service payments on Senior
Indebtedness, (B) no principal installments of such High Yield Debt are
scheduled to be due and payable (or are otherwise required to be paid by
Holdings) prior to January 15, 2009, (C) such High Yield Debt is not subject to
any Lien on any property or assets of any member of the Borrower Group (other
than any reserve or similar fund established in connection therewith which is
funded from the proceeds thereof and which is to be used to pay interest or
principal on such High Yield Debt), (D) following the issuance of such High
Yield Debt, the EBITDA Test set forth in Section 6.09 or the Leverage Ratio and
the Senior Leverage Ratio set forth in Section 6.10 (whichever is then
applicable) shall be satisfied as of the last day of the last fiscal quarter
last ended for which financial statements have been delivered in accordance with
Section 5.01(a), on a pro-forma basis as if such High Yield Debt and any other
Indebtedness which was incurred since such last day were issued and outstanding
on such last day and any Indebtedness which was paid after such last day was not
outstanding on such last day, and (E) such High Yield Debt is issued by Holdings
and is not guaranteed by any other member of the Borrower Group;
(i) Indebtedness incurred in connection with the
financing of wireless telecommunication handsets, subject to the restrictions
contained in Section 6.01 (xiii);
(j) Contingent Obligations not otherwise permitted under
this Section 6.04 to the extent not exceeding in the aggregate at any time
outstanding $10,000,000;
(k) Subordinated Loans;
(l) Obligations in respect of Swap Agreements as
described in Section 2.07;
(m) with respect to all New Subsidiaries, Indebtedness
not exceeding the aggregate principal amount of $10,000,000 outstanding at any
one time; provided, that no category of Permitted Indebtedness under this
Section 6.04, other than this clause (m), shall
44
Amended and Restated Common Agreement
apply to permit the incurrence of Indebtedness by New Subsidiaries; provided,
further, in any event, any guaranty by any New Subsidiary pursuant to Section
5.13 hereof shall be permitted and shall not apply to reduce the maximum
allowable amount under this clause (m); and
(n) the Bridge Loan Indebtedness and the Guaranties by
the members of the Borrower Group, other than the Borrower, of the Bridge Loan
Indebtedness.
6.05 Subsidiaries. No member of the Borrower Group will
establish, create or acquire any Subsidiary except Wholly-owned Subsidiaries
which are established, formed or purchased in accordance with the restrictions
and limitations set forth in Section 5.13. The assets owned by any such
Subsidiary shall not cause the Borrower Group to breach its representation made
in Section 4.10(c) hereof (e.g. Minimum Assets).
6.06 Advances, Investments and Loans. No member of the
Borrower Group will lend money or credit or make advances to any Person, or
purchase or acquire any stock, obligations or securities of, or any other
interest in, or make any capital contribution to any Person, except:
(a) any member of the Borrower Group may invest in
Permitted Investments;
(b) any member of the Borrower Group may acquire and hold
receivables owing to them, if created or acquired in the ordinary course of
business and payable or dischargeable in accordance with customary trade terms;
(c) any member of the Borrower Group may incur
intercompany Indebtedness to the extent permitted pursuant to Section 6.04(b);
(d) any member of the Borrower Group may acquire and own
investments (including debt obligations) received in connection with the
bankruptcy or reorganization of suppliers and customers and in settlement of
delinquent obligations of, and other disputes with, customers and suppliers
arising in the ordinary course of business;
(e) any member of the Borrower Group may make investments
in any other member of the Borrower Group provided that such investment does not
cause a breach of any representation or covenant hereunder;
(f) any member of the Borrower Group may make loans and
advances to officers and employees of the Borrower Group (but not to any
shareholders or non-employee directors of a member of the Borrower Group),
provided that any such loan or advance is made in the ordinary course of
business and in an aggregate principal amount not to exceed $5,000,000 (or the
Peso Equivalent thereof) at any time outstanding; and
(g) any member of the Borrower Group may make
acquisitions permitted by Section 6.02 (g).
6.07 Affiliate Transactions. Each member of the Borrower
Group will not, and will not permit any Subsidiary to, enter into any
transactions or series of transactions whether or not in the ordinary course of
business, with any Affiliate other than on terms and conditions
45
Amended and Restated Common Agreement
substantially as favorable to such member of the Borrower Group or such
Subsidiary as would be obtainable by such member of the Borrower Group or such
Subsidiary at the time in a comparable arm's-length transactions with a Person
other than an Affiliate, provided that the foregoing restrictions shall not
apply to (i) transactions solely among the members of the Borrower Group, (ii)
employment arrangements entered into in the ordinary course of business with
officers of such member, (iii) customary fees paid to members of the Board of
Directors of Holdings, and (iv) the obligations of Holdings to issue stock
options in connection with the Bridge Loan Facility.
6.08 No Other Business. No member of the Borrower Group
will undertake any business other than the Business and activities reasonably
incidental thereto.
6.09 EBITDA Test. From and after the Trigger Date, the
Borrower Group will not permit the EBITDA Test to be more than the following
ratios for the following dates (when calculating Consolidated Debt less cash and
Permitted Investments) and quarterly and annual periods (when calculating
EBITDA) ending on such dates:
PERIOD PERIOD ENDING ON EBITDA TEST RATIO
Quarterly March 31, June 30,
September 30 and
December 31, 2006 12:1
Quarterly March 31, June 30,
September 30 and
December 31, 2007 8:1
Annual December 31, 2008 and
each December 31
thereafter 6:1
Quarterly March 31, June 30, and
September 30, 2008
and thereafter 6:1
All calculations made for purposes of determining compliance with this financial
covenant shall be based on financial statements reconciled to U.S. GAAP;
provided, that for purposes of this Section 6.09, Consolidated Debt and
Permitted Investments shall be calculated in Dollars on the date of any
determination.
6.10 Leverage Ratios. At all times prior to the Trigger
Date, the Borrower Group will not permit (a) the Leverage Ratio to exceed 1.5 to
1.0 and (b) the Senior Leverage Ratio to exceed 1.0 to 1.0. All calculations
made for purposes of determining compliance with this financial covenant shall
be based on financial statements reconciled to U.S. GAAP; provided, that for
purposes of this Section 6.10, Consolidated Paid-In Equity shall be calculated
in Dollars on the date of contribution or dates of contribution of such
Consolidated Paid-In Equity, and Consolidated Debt, Consolidated Senior Debt and
Permitted Investments shall be calculated in Dollars on the date of any
determination.
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Amended and Restated Common Agreement
6.11 Limitation on Issuance of Stock. No member of the
Borrower Group (other than Holdings) will, nor will it permit, any of its
Subsidiaries, directly or indirectly, to, issue any shares of its capital stock
or other securities (or warrants, rights or options to acquire shares or other
equity securities), except (i) in favor of Holdings or another member of the
Borrower Group that is the parent company, (ii) for replacements of then
outstanding shares of Capital Stock, (iii) for stock splits, stock dividends and
similar issuances which do not decrease the percentage ownership of the Borrower
Group in any class of the Capital Stock of such other members or such
Subsidiary, and (iv) for issuances by newly created or acquired Subsidiaries in
accordance with Section 5.13.
6.12 Prepayments. So long as the Company shall have any
Senior Indebtedness outstanding, the Company shall not prepay any principal of
High Yield Debt or pay or prepay any principal or interest in respect of
Subordinated Loans.
6.13 Modifications of Certain Documents and Agreements. No
member of the Borrower Group shall amend or modify any of its Charter Documents
or change its Fiscal Year without the prior written consent of the Required
Voting Parties, except for any modifications to its Charter Documents that are
not materially adverse to any Secured Party.
6.14 Abandonment of The System. No member of the Borrower
Group shall (i) abandon the System, (ii) agree to abandon the System or (iii)
make any public declaration or statement regarding its intention to abandon the
System.
6.15 Hazardous Substances. No member of the Borrower Group
shall release, emit or discharge into the environment any Hazardous Materials in
violation of any Environmental Law to the extent that any such release, emission
or discharge would constitute a Material Adverse Effect. No member of the
Borrower Group will exercise care, custody or control over the System or any
real property owned or leased by any member of the Borrower Group in any manner
that would pose a major or unreasonable hazard to the environment, health or
safety.
6.16 Immunity. In any proceedings in Mexico or elsewhere
in connection with any of the Financing Agreements to which a member of the
Borrower Group is a party, no such member shall claim for itself or any of its
assets immunity from suit, execution, attachment or other legal process.
6.17 Regulations. No member of the Borrower Group shall
directly or indirectly apply any part of the proceeds of any Loan or other
revenues to the purchasing or carrying of margin stock within the meaning of
Regulation T, U or X of the Federal Reserve Board, or any regulations,
interpretations or rulings thereunder.
6.18 Investment Company Act. No member of the Borrower
Group shall take (or permit any other Person to take) any action which could
reasonably result in such member falling within the definition of an "investment
company" or a company "controlled" by an "investment company," under the
Investment Company Act of 1940.
6.19 Disputes. No member of the Borrower Group will agree,
authorize or otherwise consent to any proposed settlement, resolution or
compromise of any litigation,
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arbitration or other dispute with any Person which is an Affiliate, unless such
settlement, resolution or compromise is made on terms similar to those which
would apply if such Person were not an Affiliate.
6.20 Collateral Outside Mexico. None of the members of the
Borrower Group will permit any asset constituting Collateral (including but not
limited to bank, securities and deposit accounts but excluding such bank,
securities and deposit accounts which are the subject of control agreements or
other perfection mechanisms under Applicable Law satisfactory to the Collateral
Agent) to be located or maintained in any jurisdiction other than Mexico unless
(i) the applicable member of the Borrower Group shall have notified the
Collateral Agent thereof reasonably in advance of any such assets being
transferred or located outside Mexico and (ii) the Collateral Agent shall be
reasonably satisfied that (A) the laws of the jurisdiction in which such assets
are to be located adequately protect the interests of the Secured Parties and
the Bridge Lender in such Collateral, (B) the security interests in such
Collateral granted under the applicable Security Document will continue to be
adequately protected and perfected, (C) there are not any material risks
relating to the political or economic stability of the jurisdiction in which
such Collateral is to be located or maintained or the Person that will possess
such Collateral in such jurisdiction, (D) the portion of the Collateral located
in such jurisdiction is within acceptable limits in the reasonable discretion of
the Relevant Parties and (E) the location of such Collateral in such
jurisdiction is not otherwise materially disadvantageous to the Secured Parties
and the Bridge Lender. The applicable member of the Borrower Group shall deliver
to the Secured Parties and the Bridge Lender, with a copy to the Agents, such
legal opinions and other documentation as the Collateral Agent shall reasonably
request in connection with its consideration or approval of any proposed
transfer or location of Collateral outside Mexico.
ARTICLE VII
EVENTS OF DEFAULT
Each of the specified events set forth in Sections 7.01
through 7.16 shall constitute an "Event of Default":
7.01 Payments. A failure by one or more members of the
Borrower Group to pay (whether by scheduled maturity, required prepayment, by
acceleration or otherwise) any principal of any Senior Indebtedness, any
interest on any Senior Indebtedness, any other amounts owing hereunder or under
any other Financing Agreement or any other amounts constituting Obligations
within three Business Days after such principal, interest or other amount first
becomes due.
7.02 Representations. Any representation or warranty made
by any Sponsor, Guarantor, or any member of the Borrower Group herein or in any
other Financing Agreement or any representation, warranty or statement in any
certificate, financial statement or other document furnished to any Secured
Party by or on behalf of the Borrower Group hereunder or under any other
Financing Agreement shall prove to have been false or misleading in any material
respect as of the time made, deemed made, confirmed or furnished; provided,
however, that no Event of Default shall occur pursuant to this Section 7.02 if
the false or misleading representation, warranty or statement can be eliminated
or otherwise cured within 30 days after
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any responsible officer of the Borrower Group receives notice or has knowledge
thereof such that the applicable representation, warranty or statement is no
longer false or misleading in any material respect.
7.03 Covenants.
(a) A member of the Borrower Group shall default in the
due performance or observance by it of any term, covenant or agreement contained
in Section 5.13 or Article 6.
(b) Any member of the Borrower Group shall default in the
due performance or observance by it of any term, covenant or agreement contained
herein or in any other Financing Agreement (except as otherwise provided in
Section 7.01 and paragraph (a) of this Section 7.03), and such default shall
continue unremedied for a period of 30 days after the date on which written
notice thereof shall have been received by a member of the Borrower Group from
the Collateral Agent; provided, that if (A) any such default under this Section
7.03(b) does not involve the payment of money and cannot be cured within such
30-day period, (B) such failure is in fact susceptible of cure, (C) no other
independent Default or Event of Default has occurred and is continuing, (D) the
Borrower Group is proceeding with diligence and in good faith to cure such
failure, (E) the existence of such failure does not constitute a Material
Adverse Effect and (F) the Collateral Agent shall have received an officer's
certificate signed by an Authorized Officer of the Company to the effect of
clauses (A), (B), (C), (D) and (E) above and describing all action the Borrower
Group is taking to cure such failure, such 30-day cure period shall be extended
by up to an additional 60 days as shall be necessary for the Borrower Group to
diligently cure such failure.
7.04 Default Under Other Agreements.
(a) Any member of the Borrower Group defaults for a
period beyond the applicable grace period in the payment of any principal,
interest or other amount due under any agreement evidencing, securing or
creating any Indebtedness of such member (including swap or similar derivative
agreements) in excess (individually or in the aggregate) of $15,000,000.
(b) Any member of the Borrower Group shall default in the
observance or performance of any agreement or condition relating to any
Indebtedness the principal amount of which (individually or in the aggregate)
exceeds $25,000,000, or any other event or condition shall have occurred
thereunder, the effect of which default or other event or condition is to cause,
or to permit the holder or holders of such Indebtedness (or a trustee acting on
behalf of such holders) to cause any such Indebtedness to become due prior to
its stated maturity; or any such Indebtedness of any member of the Borrower
Group shall be declared due and payable prior to the stated maturity thereof.
(c) Any member of the Borrower Group shall (i) default
for a period beyond the applicable grace period, if any, in the payment of any
principal, interest or other amount due under the Bridge Loan Indebtedness or
(ii) default in the observance or performance of any agreement or condition
relating to the Bridge Loan Indebtedness, or any other event or condition shall
have occurred thereunder, the effect of which default or other event or
condition is to cause,
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or permit the holder or holders of such Bridge Loan Indebtedness to cause, any
such Bridge Loan Indebtedness to become due prior to its stated maturity.
7.05 Involuntary Bankruptcy, Etc. An involuntary
proceeding shall have been commenced against any member of the Borrower Group or
seeking that such Person be wound up or liquidated, adjudging such Person
bankrupt or insolvent or seeking reorganization, arrangement, adjustment or
composition of or in respect of such Person under any Applicable Law or seeking
the appointment of a receiver, liquidator, sindico, interventor, assignee,
trustee, sequestrator (or other similar official) of such Person or of any
substantial part of its property or other assets, or the winding up or
liquidation of its affairs and such proceeding continues undismissed for 60
days.
7.06 Voluntary Bankruptcy, Etc. The institution by any
member of the Borrower Group of proceedings to be adjudicated bankrupt or
insolvent, or the consent by it to the institution of bankruptcy or insolvency
proceedings against it; or the filing by it of a petition or answer or consent
seeking reorganization or debt relief under any Applicable Law or to the
appointment of a receiver, liquidator, sindico, interventor, assignee, trustee,
sequestrator (or other similar official) of any such Person or of any
substantial part of its property; or the making by it of an assignment for the
benefit of creditors generally; or the admission by it in writing of its
inability to pay its debts generally as they become due; or any other event
shall have occurred which under any Applicable Law would have an effect
analogous to any of those events listed above in this Section 7.06 with respect
to any such Person; or any action is taken by any such Person for the purpose of
effecting any of the foregoing.
7.07 Analogous Proceedings. There occurs, in relation to
any member of the Borrower Group, in any country or territory in which any of
them carries on business or to the jurisdiction of whose courts any part of
their assets is subject, any event which in that country or territory
corresponds with, or has an effect equivalent or similar to, any of those
mentioned in Section 7.05 or 7.06.
7.08 Attachment of Collateral. Any Person other than the
Collateral Agent for the benefit of the Secured Parties or a Senior Lender
attaches or institutes proceedings to attach all or any part of the Collateral,
and any attachment or any judgment Lien against any such Collateral (i) remains
unlifted, unstayed or undischarged for a period of 30 days or (ii) is upheld in
a final nonappealable judgment of a court of competent jurisdiction.
7.09 Financing Agreements.
(a) This Agreement or any of the Financing Agreements or
any material provision hereof or thereof is or becomes invalid, illegal or
unenforceable or the Company or any Guarantor shall have repudiated or disavowed
or taken any action to challenge the validity or enforceability of such
agreement.
(b) Any of the Security Documents, once executed and
delivered, shall fail to provide the Liens, security interests, rights, titles,
interests, remedies, powers or privileges intended to be created thereby
(including the priority intended to be created thereby), or such Lien shall fail
to have the priority contemplated therefor in such Security Documents, or any
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such Security Document shall cease to be in full force and effect, or the
validity thereof or the applicability thereof to any obligations purported to be
secured or guaranteed thereby or any part thereof, shall be disaffirmed in
writing by or on behalf of a member of the Borrower Group or any other party
thereto.
7.10 Expropriation. There shall have occurred any act or
series of acts attributable to a Mexican Governmental Authority which (i) in the
reasonable judgment of the Required Voting Parties has the effect of depriving
the Senior Lenders of their fundamental rights as creditors in respect of this
Agreement (including rights under the security interests granted under the
Security Documents), or (ii) confiscates, expropriates or nationalizes the
ownership or control of all or any substantial part of the System or other
assets of a member of the Borrower Group and such act or series of acts
continues uncured for 120 days or more.
7.11 Monetary Restrictions. Any law, order, decree or
regulation shall impose any restriction on (i) the lawful transfer of Dollars by
the Borrower Group from Mexico to the Collateral Agent (and from the Collateral
Agent to any other Person or locale whether within or outside of Mexico), or
(ii) the conversion of (a) Dollars to Pesos or (b) Pesos to Dollars and which
restriction constitutes a Material Adverse Effect.
7.12 Judgments. One or more judgments or decrees shall be
entered against one or more members of the Borrower Group and such judgments or
decrees shall not be vacated, discharged or stayed or bonded pending appeal for
any period of 60 consecutive days, and the aggregate amount of all such
judgments and decrees outstanding at any time (except to the extent any
applicable insurer(s) shall have acknowledged liability therefor) would
constitute a Material Adverse Effect.
7.13 Licenses and Permits. The Borrower Group shall fail
to obtain, renew, maintain or comply in all material respects with the Licenses
(or any portion thereof); or any License (or any portion thereof) shall be
rescinded, terminated, suspended, modified or withheld or shall be determined to
be invalid or shall cease to be in full force and effect; or any proceedings
shall be commenced by or before any Governmental Authority for the purpose of
rescinding, terminating, suspending, modifying or withholding any such License
(or any portion thereof) and such proceeding is not dismissed within 60 days;
and as a result of such failure, rescission, determination of invalidity,
termination, suspension, modification, withholding, cessation or commencement
the valid, enforceable and effective Licenses then owned by the Company (a) fail
to cover all of Region 9, and either all of Region 4 or all of Region 6 (as such
Regions are defined in the Joint Venture Agreement) or (b) result in Covered
Pops being less than 33,000,000 Pops.
7.14 Change of Control. A Change of Control shall have
occurred and be continuing.
7.15 Other Senior Indebtedness. An "event of default"
shall have occurred and be continuing under (and as defined in the documentation
relating to) any Credit Agreement relating to Senior Indebtedness, including any
Senior Indebtedness which is described in Section 2.04.
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7.16 Mortgage. The Company shall fail to deliver to the
Collateral Agent within forty five (45) days after the filing of Amendment No. 1
to the Mortgage, the first testimony of the public deed evidencing the execution
and delivery of Amendment No. 1 to the Mortgage, duly recorded at the Public
Registry of Commerce of the Federal District of Mexico; or the Company shall
fail to deliver to the Collateral Agent (i) within ninety (90) days after filing
of the Mortgage, the first testimony of the public deed evidencing the execution
and delivery of the Mortgage, duly recorded at the Telecommunications Registry
of Mexico and (ii) within ninety (90) days after filing of Amendment No. 1 to
the Mortgage, the first testimony of the public deed evidencing the execution
and delivery of Amendment No. 1 to the Mortgage, duly recorded at the
Telecommunications Registry of Mexico.
7.17 Remedies. Subject to the provisions of the
Intercreditor Agreement and the Collateral Agency Agreement, upon the occurrence
and during the continuation of an Event of Default, the Secured Parties may,
without further notice of default, presentment or demand for payment, protest or
notice of non-payment or dishonor, or other motion or demands of any kind, all
such notices and demands being waived (to the extent permitted by Applicable
Law), exercise any or all rights and remedies at law or in equity (in any
combination or order that the Secured Parties may elect) and, without limitation
or prejudice to the foregoing, the Secured Parties may:
(a) unless otherwise provided in the applicable Credit
Agreement, refuse, and they shall not be obligated, to make any Disbursements
and/or may suspend or terminate their Commitments;
(b) declare and make all sums of accrued and outstanding
principal and accrued but unpaid interest remaining under the Credit Agreements
and Credit Facilities, and any other Senior Indebtedness, including unpaid fees,
costs and charges, immediately due and payable, provided that in the event of an
Event of Default occurring under Section 7.05, 7.06 or 7.07 (in each case in
respect of a member of the Borrower Group), all such amounts shall become
immediately due and payable without reference to the Credit Agreements or any
other Financing Agreement and without further notice, demand or act of any
Secured Party;
(c) set off and apply all monies on deposit with any
Secured Party to the satisfaction of the Obligations under all of the Financing
Agreements and otherwise in accordance with the terms of any such applicable
document; and
(d) exercise any and all rights and remedies available to
them under any of the Security Documents or any of the other Financing
Agreements or as otherwise permitted by Applicable Law.
ARTICLE VIII
MISCELLANEOUS
8.01 Payment of Expenses, Etc.
(a) Without limiting any amounts agreed to be paid by the
Borrower Group under the applicable Credit Agreements, each member of the
Borrower Group shall, jointly and severally, whether or not the transactions
herein contemplated are consummated, pay: (i) all
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reasonable out-of-pocket costs and expenses of each of the Collateral Agent and
the Intercreditor Agent (including all commissions, charges, costs and expenses
for the conversion of currencies and all other reasonable costs, charges and
expenses (including all reasonable fees and expenses of the legal counsel,
consultants and advisors for any of the foregoing)) made, paid, suffered or
incurred in connection with (A) any amendment or modification to, or the
protection or preservation of any right or claim under, or consent or waiver in
connection with, this Agreement or any other Transaction Document, any such
other document or instrument related hereto or thereto, or any Collateral, (B)
the authentication, registration, translation and recordation (where
appropriate) and the delivery of the evidences of indebtedness relating to the
Loans and the Disbursements thereof and (C) the administration and enforcement
(including with respect to a work out) of this Agreement, the other Transaction
Documents and any other documents and instruments referred to herein or therein
(including the reasonable fees and disbursements of one common Mexican counsel
and one common United States counsel for the Collateral Agent and the
Intercreditor Agent upon the occurrence and during the continuation of an Event
of Default, (ii) the fees of the Insurance Consultant retained pursuant to the
Financing Agreements, and (iii) the expenses set forth in Section 3.06 and
Section 6.03 (a) (iv) of the Intercreditor Agreement.
(b) Each member of the Borrower Group shall, whether or
not the transactions herein contemplated are consummated, jointly or severally,
indemnify each of the Secured Parties and their respective officers, directors,
employees, representatives, attorneys and agents (each an "Indemnified Party"
and, collectively, the "Indemnified Parties") from and hold each of them
harmless against any and all liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, suits, costs, expenses and disbursements
incurred by any of them as a result of, or arising out of, or in any way related
to, or by reason of, any investigation, litigation or other proceeding or
inquiry (whether or not such Indemnified Party is a party thereto) related to
the entering into and/or performance of any Transaction Document or the
disbursement of, or use of the proceeds of, any Senior Indebtedness or the
consummation of any transactions contemplated herein or in any Transaction
Document, including the reasonable fees and disbursements of counsel selected by
such Indemnified Party incurred in connection with any such investigation,
litigation or other proceeding or in connection with enforcing the provisions of
this Section 8.01(b) (but excluding any such liabilities, obligations, losses,
damages, penalties, claims, actions, judgments, suits, costs, expenses and
disbursements to the extent incurred by reason of the gross negligence or
willful misconduct of the Person to be indemnified or its officers, directors,
employees, representatives, attorneys or agents, as the case may be, as
determined pursuant to a final, nonappealable judgment by a court of competent
jurisdiction).
(c) Without limitation to the provisions of Section
8.01(b) above, each member of the Borrower Group agrees to defend, protect,
indemnify and hold harmless each Indemnified Party from and hold each of them
harmless against any and all liabilities (including removal and remedial
actions), obligations, losses, damages, penalties, claims, actions, judgments,
suits, costs, expenses and disbursements (including reasonable attorneys' and
consultants' fees and disbursements) imposed on or asserted against any such
Persons directly or indirectly based on, or arising or resulting from (i) the
actual or alleged presence of Hazardous Materials on, under or at the System or
any real property owned or leased by any member of the Borrower Group, (ii) any
Environmental Claim relating to any member of the Borrower Group or the System
or any real property owned or leased by any member of the Borrower Group, or
(iii) the exercise of any Indemnified Party's rights under any of the provisions
of this Section
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8.01, but excluding any matter based solely on the gross negligence or willful
misconduct of any such Indemnified Party, as the case may be, as determined
pursuant to a final, nonappealable judgment by a court of competent
jurisdiction.
(d) To the extent that the undertaking in the preceding
paragraphs of this Section 8.01 may be unenforceable because it is violative of
any law or public policy, the Borrower Group will contribute the maximum portion
that it is permitted to pay and satisfy under Applicable Law to the payment and
satisfaction of such undertakings.
(e) All sums paid and costs incurred by any Indemnified
Party with respect to any matter indemnified hereunder shall bear interest at
the default rate applicable to their respective Credit Facility from the date
any member of the Borrower Group receives notice thereof from such Indemnified
Party, until reimbursed by the Borrower Group, and all such sums and costs shall
be added to the debt and be secured by the Security Documents and shall be
immediately due and payable on demand. Each such Indemnified Party shall
promptly notify the Company in a timely manner of any such amounts payable by
the Borrower Group hereunder, provided that any failure to provide such notice
shall not affect the Borrower Group's obligations under this Section 8.01.
(f) Each Indemnified Party pursuant to Section 8.01(b)
and (c) above, within 10 days after the receipt by it of notice of the
commencement of any action for which indemnity may be sought by it, or by any
Person controlling it, from the Borrower Group on account of the agreements
contained in this Section 8.01, shall notify the Company in writing of the
commencement thereof, but the failure of such Indemnified Party to so notify the
Company of any such action shall not release the Borrower Group from any
liability which it may have to such Indemnified Party.
8.02 Right of Setoff. Subject to the terms of the
Intercreditor Agreement, upon the occurrence and during the continuance of any
Event of Default, each Senior Lender is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by such Senior Lender to
or for the credit or the account of any member of the Borrower Group against any
and all of the obligations of the Borrower Group now or hereafter existing under
the applicable Credit Agreement and, if applicable, the corresponding Note held
by such Senior Lender, irrespective of whether or not such Senior Lender shall
have made any demand under the applicable Credit Agreement or Note, and without
presentment, protest or other notice of any kind to any member of the Borrower
Group, all of which are hereby expressly waived and although such obligations
may be unmatured.
8.03 Notices.
(a) Except as otherwise expressly provided herein or in
any Financing Agreement, all notices and other communications provided for
hereunder or thereunder shall be (i) in writing (including telex or telecopier)
and (ii) telexed, telecopied or sent by overnight courier (if for inland
delivery) or international courier (if for overseas delivery) to a party hereto
(with a copy to the Relevant Party) or to a Relevant Party at its address and
contact number
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Amended and Restated Common Agreement
specified in Schedule 8.03, or at such other address and contact number as is
designated by such party in a written notice to the other parties hereto.
(b) All such notices and communications shall be
effective (i) if sent by telex, when sent (with the correct answer back), (ii)
if sent by telecopier, when sent (on receipt of confirmation) and (iii) if sent
by courier, (x) one Business Day after deposit with an overnight courier if for
inland delivery and (y) three days after deposit with an international courier
if for overseas delivery.
8.04 Benefit of Agreement. This Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto; provided, however, no member of the Borrower
Group may assign or transfer any of its rights or obligations hereunder without
the prior written consent of each of the Senior Lenders. Any Senior Lender may
transfer, assign or grant its rights hereunder in connection with an assignment
or transfer of all or any part of its interest in its Senior Indebtedness in
accordance with the provisions of the applicable Credit Agreement, provided that
any such assignee has agreed to be bound by the terms of the Financing
Agreements, including the Intercreditor Agreement. Notwithstanding anything to
the contrary contained in any Financing Agreement (including this Agreement),
the Senior Lenders under each respective Credit Agreement shall be entitled to
appoint a successor administrative agent in accordance with the terms of such
Credit Agreement upon the resignation or removal of their Administrative Agent
without any consent of or notice to any other Secured Party, and upon such
appointment becoming effective in accordance with such terms, such successor
shall be deemed to be the "Administrative Agent" of such Senior Lenders for all
purposes of this Agreement and the other Financing Agreements. Each of the
Relevant Parties shall be deemed a third party beneficiary to this Agreement to
the extent that it is to receive any document, instrument, notification or other
paper as provided herein.
8.05 No Waiver; Remedies Cumulative. No failure or delay
on the part of the Collateral Agent, any other Agent, or any Senior Lender in
exercising any right, power or privilege hereunder or under any other Financing
Agreement and no course of dealing between any member of the Borrower Group, or
any of its Affiliates, on the one hand, and the Collateral Agent, any other
Agent and the Senior Lenders, on the other hand, shall impair any such right,
power or privilege or operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder or under any other
Financing Agreement preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder. The
rights, powers and remedies herein or in any other Financing Agreement expressly
provided are cumulative and not exclusive of any rights, powers or remedies
which any party thereto would otherwise have. No notice to or demand on a member
of the Borrower Group in any case shall entitle such member (or any other
member) to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Collateral Agent, any
other Agent, or any Senior Lender to any other or further action in any
circumstances without notice or demand.
8.06 Severability. Any provision of any Financing
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of prohibition or
unenforceability, but that shall not invalidate the remaining provisions of such
Financing Agreement or affect such provision in any other jurisdiction.
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8.07 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which, when executed and delivered, shall be effective for
purposes of binding the parties hereto, but all of which shall together
constitute one and the same instrument. A set of counterparts executed by all
the parties hereto shall be lodged with each of the parties hereto.
8.08 Effectiveness. This Agreement shall become effective
as of September 10, 2002, concurrently with the effectiveness of Amendment No. 6
to the Qualcomm Credit Agreement, Amendment No. 4 to the Alcatel Credit
Agreement and Amendment No. 2 to the Facility 2 Credit Agreement. Any Credit
Agreement shall become effective pursuant to its terms (except for this
Agreement having become effective, if that is a condition of effectiveness of
any of such agreement).
8.09 Survival. All indemnities set forth herein, including
in Section 8.01, shall survive the execution and delivery of this Agreement and
the making and repayment of the Senior Indebtedness.
8.10 Currency of Payment. The obligation of the Company
and the Borrower Group to pay in Dollars those amounts of the sums specified to
be due in Dollars, under this Agreement or the respective Financing Agreements
(the "Financing Agreement Currency") shall not be deemed to have been novated,
discharged or satisfied by any tender of (or recovery under judgment expressed
in) any currency other than the Financing Agreement Currency, except to the
extent to which such tender (or recovery) shall result in the effective payment
of such aggregate amount in the applicable Financing Agreement Currency at the
place where such payment is to be made and, accordingly, the amount (if any) by
which any such tender (or recovery) shall fall short of such amount shall be and
remain due to the Senior Lenders as a separate Obligation, unaffected by
judgment having been obtained (if such is the case) for any other amounts due in
respect of this Agreement or the Financing Agreements.
8.11 Judgment Currency.
(a) The obligations of the Borrower Group hereunder and
under the other Financing Agreements to make payments in Dollars (the
"Obligation Currency"), shall not be discharged or satisfied by any tender or
recovery pursuant to any judgment expressed in or converted into any currency
other than the Obligation Currency, except to the extent that such tender or
recovery results in the effective receipt by the respective Secured Party of the
full amount of the Obligation Currency expressed to be payable to such Secured
Party under this Agreement or the other Transaction Documents. If for the
purpose of obtaining or enforcing judgment against the Company in any court or
in any jurisdiction, it becomes necessary to convert into or from any currency
other than the Obligation Currency (such other currency being hereinafter
referred to as the "Judgment Currency") an amount due in the Obligation
Currency, the conversion shall be made at the Peso Equivalent, in the case of
Pesos, and in the case of other currencies, the rate of exchange (as quoted by
the Intercreditor Agent or if the Intercreditor Agent fails to quote a rate of
exchange on such currency, by a known dealer in such currency designated by the
Intercreditor Agent) determined, in each case, as of the day on which the
judgment is given (such Business Day being hereinafter referred to as the
"Judgment Currency Conversion Date").
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Amended and Restated Common Agreement
(b) If there is a change in the rate of exchange
prevailing between the Judgment Currency Conversion Date and the date of actual
payment of the amount due, the Borrower Group covenants to pay, or cause to be
paid, such additional amounts, if any (but in any event not a lesser amount), as
may be necessary to ensure that the amount paid in the Judgment Currency, when
converted at the rate of exchange prevailing on the date of payment, will
produce the amount of the Obligation Currency which could have been purchased
with the amount of Judgment Currency stipulated in the judgment or judicial
award at the rate of exchange prevailing on the Judgment Currency Conversion
Date.
(c) For purposes of determining the Peso Equivalent or
rate of exchange under this Section 8.11, such amounts shall include any premium
and costs payable in connection with the purchase of the Obligation Currency.
8.12 Evidence of Debt.
(a) Each Senior Lender shall maintain, or cause to be
maintained, in accordance with its usual practice, internal records evidencing
the amounts from time to time lent by and owing to it under its respective
Financing Agreement and each of the payments from time to time made in respect
thereof.
(b) Except as otherwise provided in any Financing
Agreement, in any legal action or proceeding arising out of or in connection
with any Financing Agreement or any other Transaction Document, the entries made
in the internal records maintained by each of the Senior Lenders pursuant to
clause (a) above shall be prima facie evidence of the existence and amount of
obligations of the Borrower Group as therein recorded.
8.13 English Language. This Agreement is made in the
English language. One Spanish language translation of this Agreement prepared at
the Company's expense by an official public interpreter and approved by Mexican
counsel to the Company and Mexican counsel to the Senior Lenders under the
Alcatel Credit Agreement and the Qualcomm Credit Agreement shall be the agreed
Spanish language translation hereof for all purposes. Such translation and no
other may be filed in one or more public registries in Mexico or used in any
proceeding in Mexico. For all purposes, the English language version hereof
shall be the original instrument and in all cases of conflict between the
English and the Spanish versions, the English version shall control.
8.14 Entire Agreement. This Agreement (including the
exhibits, schedules and appendices attached hereto), including the documents
referred to herein, embodies the entire agreement and understanding of the
parties hereto and supersedes all prior agreements and understandings of the
parties hereto relating to the subject matter herein contained.
8.15 Waiver of Sovereign Immunity. Each member of the
Borrower Group acknowledges and agrees that the activities contemplated by the
provisions of the Financing Agreements are commercial in nature rather than
governmental or public, and therefore acknowledges and agrees that to the extent
that it or any of its properties or assets has or hereafter may acquire any
rights to immunity from setoff, legal proceedings arising out of or relating to
the Financing Agreements, attachment prior to judgment, other attachment or
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Amended and Restated Common Agreement
execution of judgment on any grounds of sovereignty or otherwise (whether under
the laws of Mexico or any other jurisdiction), such member hereby irrevocably
waives such right to immunity in respect of itself and its properties and assets
in respect of its obligations arising under or relating to this Agreement or any
other Financing Agreement. Each member of the Borrower Group, in respect of
itself, its process agents, and its properties and revenues, expressly and
irrevocably waives any such right of immunity which may now or hereafter exist
(including any immunity from any legal process, from the jurisdiction of any
court or from any execution or attachment in aid of execution prior to judgment
or otherwise) or claim thereto which may now or hereafter exist, and agrees not
to assert any such right or claim in any such action or proceeding, whether in
the United States or otherwise.
8.16 Reinstatement. This Agreement shall continue to be
effective or be reinstated, as the case may be, if at any time payment and
performance of the obligations of the Company or the Borrower Group hereunder,
or any part thereof, is, pursuant to Applicable Law, rescinded or reduced in
amount, or must otherwise be restored or returned by the Collateral Agent or any
Secured Party. In the event that any payment or any part thereof is so
rescinded, reduced, restored or returned, such obligations shall be reinstated
and deemed reduced only by such amount paid and not so rescinded, restored or
returned.
8.17 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE;
WAIVER OF JURY TRIAL.
(a) This Agreement shall be governed by, and construed in
accordance with, the law of the State of New York, United States, without
reference to principles of conflicts of law (other than Section 5-1401 of the
General Obligations Laws of the State of New York); provided, however, that in
connection with any legal action or proceeding (other than an action to enforce
a judgment obtained in another jurisdiction) brought in respect to this
Agreement in the courts of Mexico or any political subdivision thereof, this
Agreement shall be deemed to be an instrument made under the laws of Mexico and
for such purposes shall be governed by, and construed in accordance with, the
laws of the Federal District of Mexico.
(b) Each party hereto hereby agrees that any suit, action
or proceeding with respect to this Agreement or any judgment entered by any
court in respect thereof may be brought in the United States of America District
Court for the Southern District of New York, in the Supreme Court of the State
of New York sitting in New York County (including its Appellate Division), or in
any other appellate court in the State of New York or the competent courts of
the Federal District of Mexico, as the party commencing such suit, action or
proceeding may elect in its sole discretion; and each party hereto hereby
irrevocably submits to the jurisdiction of such courts for the purpose of any
such suit, action, proceeding or judgment. Each party hereto further submits,
for the purpose of any such suit, action, proceeding or judgment brought or
rendered against it, to the appropriate courts of the jurisdiction of its
domicile. Each member of the Borrower Group hereby waives any rights to a
specific jurisdiction it may have by virtue of its present or any future
domicile, or otherwise.
(c) Each member of the Borrower Group hereby agrees that
service of all writs, process and summonses in any such suit, action or
proceeding brought in the State of New York may be made upon CT Corporation
System, presently located at 111 Eighth Avenue, New
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Amended and Restated Common Agreement
York, New York 10011, U.S.A. (the "Process Agent"), and each member of the
Borrower Group hereby confirms and agrees that the Process Agent has been duly
and irrevocably appointed as its agent and true and lawful attorney-in-fact in
its name, place and stead to accept such service of any and all such writs,
process and summonses, and agrees that the failure of the Process Agent to give
any notice of any such service of process to such member of the Borrower Group
shall not impair or affect the validity of such service or of any judgment based
thereon. Each member of the Borrower Group hereby further irrevocably consents
to the service of process in any suit, action or proceeding in said courts by
the mailing thereof by any Secured Party by registered or certified mail,
postage prepaid, at its address set forth beneath its signature hereto.
(d) Nothing herein shall in any way be deemed to limit
the ability of the Secured Parties to serve any such writs, process or summonses
in any other manner permitted by applicable law or to obtain jurisdiction over
any member of the Borrower Group in such other jurisdictions, and in such
manner, as may be permitted by applicable law.
(e) Each member of the Borrower Group hereby irrevocably
waives any objection that it may now or hereafter have to the laying of the
venue of any suit, action or proceeding arising out of or relating to this
Agreement or any other Financing Agreement brought in the Supreme Court of the
State of New York, County of New York, or in the United States of America
District Court for the Southern District of New York or the competent courts of
the Federal District of Mexico, and hereby further irrevocably waives any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum.
(f) The Borrower Group hereby agrees to cause the Process
Agent to execute and deliver to each Agent a letter from the Process Agent to
each such Agent confirming Process Agent's acceptance of the appointment by the
members of Borrower Group.
(g) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO ANY OF THE FINANCING AGREEMENTS OR THE TRANSACTIONS
CONTEMPLATED THEREBY.
8.18 Calculations; Computations. The financial statements
to be furnished to the Agents, to the Relevant Parties and/or the Senior Lenders
pursuant hereto shall be made and prepared in accordance with GAAP consistently
applied throughout the periods involved (except as set forth in the notes
thereto); provided that (x) except as otherwise specifically provided herein,
all computations of determining compliance with Sections 6.09 and 6.10,
including definitions used therein, except to the extent otherwise set forth
therein, shall utilize accounting principles and policies in effect on December
15, 1998, (y) in the event GAAP shall be modified from that in effect on
December 15, 1998, the Borrower Group shall be entitled to utilize GAAP, as so
modified, for purposes of such computations to the extent that (i) the Company
gives each Administrative Agent 30 days' prior written notice of such proposed
modification and (ii) prior thereto the Company and such Administrative Agents
shall have agreed upon adjustments, if any, to such definitions and/or such
Sections the sole purpose of which shall be to give effect to such proposed
change (it being understood and agreed that to the extent that the Company and
such Administrative Agent cannot agree on appropriate adjustments to such
definition and/or Sections (or that no adjustments are necessary), the proposed
change will not be utilized for the
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Amended and Restated Common Agreement
purposes of computations under such definition and/or Sections) and (z) if at
any time such computations utilize accounting principles different from those
utilized in the financial statements furnished pursuant to Section 5.01(a), such
financial statements shall be accompanied by reconciliation worksheets.
8.19 No Third-Party Beneficiaries. The covenants contained
herein are made solely for the benefit of the parties hereto (and the Senior
Lenders), and successors and assigns of such parties as specified herein, and
shall not be construed as having been intended to benefit any third party not a
party to this Agreement, except as expressly set forth in Section 8.04 or
otherwise herein.
8.20 Amendments.
(a) Any provision of this Agreement may be amended,
modified, supplemented or waived only by an instrument in writing signed by each
member of the Borrower Group, the Administrative Agents, the Collateral Agent
and the Intercreditor Agent (with the Administrative Agents, Collateral Agent
and Intercreditor Agent acting pursuant to the provisions of the Intercreditor
Agreement).
(b) Notwithstanding anything in the Intercreditor
Agreement to the contrary and only with respect to the following terms set forth
therein, any amendment or modification thereof which would extend the time
periods or decrease any Voting Party Percentage set forth in the definition of
"Initiating Voting Parties" or which would increase the Voting Party Percentage
applicable to clauses (iii) and (iv) of the definition of "Required Voting
Parties," shall be signed by each member of the Borrower Group; provided
however, that neither the foregoing nor any provision of the Intercreditor
Agreement shall in any way restrict the ability of the parties to the
Intercreditor Agreement or the Senior Lenders from entering into additional
agreements among themselves as to how such Persons will vote in connection with
any issue arising under the Financing Agreements notwithstanding the fact that
such additional agreements would have the practical effect of making such
amendment or modification.
8.21 Confidentiality. Subject to the right of each Senior
Lender to assign or sell a participation in any Loans held by it or in its
commitment and to furnish information in connection therewith, the Senior
Lenders shall hold all nonpublic information obtained pursuant to the
requirements of this Agreement which has been identified as such by any member
of the Borrower Group in accordance with its customary procedure for handling
confidential information of this nature and in accordance with safe and sound
banking practices and in any event may make disclosure to its Affiliates,
employees, auditors, advisors, or counsel or as reasonably required by any bona
fide transferee or participant in connection with the contemplated transfer of
any Loans or participation therein (so long as such transferee or participant
agrees to be bound by the provisions of this Section 8.21) or as required or
requested by any governmental agency or representative thereof or pursuant to
legal process, provided that, unless specifically prohibited by Applicable Law
or court order, each Senior Lender shall notify the Company of any request by
any governmental agency or representative thereof (other than any such request
in connection with an examination of the financial condition of such Senior
Lender by such governmental agency) for disclosure of any such nonpublic
information prior to disclosure of such information, and provided further that
in no event shall any Senior Lender be
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Amended and Restated Common Agreement
obligated or required to return any materials furnished by any member of the
Borrower Group. The Business Plan, as it is updated from time to time and
furnished in accordance with Section 5.01(d) hereof, shall constitute nonpublic
information of the Borrower Group and be subject to the provisions of this
Section 8.21 regardless of whether such updated Business Plan has been
identified as such by any member of the Borrower Group.
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Amended and Restated Common Agreement
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and acknowledged by their respective officers or
representatives hereunto duly authorized, as of the date first above written.
PEGASO COMUNICACIONES Y SISTEMAS, S.A. DE C.V.
By:
Name:________________________________________
Title:_______________________________________
PEGASO TELECOMUNICACIONES, S.A. DE C.V.
By:___________________________________________________
Name:________________________________________
Title:_______________________________________
PEGASO PCS, S.A. DE C.V.
By:___________________________________________________
Name:________________________________________
Title:_______________________________________
PEGASO RECURSOS HUMANOS, S.A. DE C.V.
By:___________________________________________________
Name:________________________________________
Title:_______________________________________
PEGASO FINANZAS, S.A. DE C.V.
By:___________________________________________________
Name:________________________________________
Title:_______________________________________
S-1
Amended and Restated Common Agreement
PEGASO FINCO I, S.A. DE C.V.
By:___________________________________________________
Name:________________________________________
Title:_______________________________________
CITIBANK, N.A., as Intercreditor Agent
By:___________________________________________________
Name:________________________________________
Title:_______________________________________
S-2
Amended and Restated Common Agreement
BANCO NACIONAL DE MEXICO, S.A., Grupo Financiero Banamex, as Collateral Agent
By:___________________________________________________
Name:________________________________________
Title:_______________________________________
CITIBANK INTERNATIONAL PLC, as Alcatel Administrative Agent
By:___________________________________________________
Name:________________________________________
Title:_______________________________________
ABN AMRO BANK N.V., as Qualcomm Administrative Agent
By: _____________________________________________
Name:________________________________________
Title:_______________________________________
By: _____________________________________________
Name:________________________________________
Title:_______________________________________
ELECTRO BANQUE, as Facility 2 Administrative Agent
By:___________________________________________________
Name:________________________________________
Title:_______________________________________
By:___________________________________________________
Name:________________________________________
Title:_______________________________________
S-3
Amended and Restated Common Agreement
APPENDIX A TO COMMON AGREEMENT
DEFINED TERMS.
As used in any Financing Agreement (as defined below), including the
Common Agreement, the following terms shall have the following meanings, except
to the extent otherwise defined in such Financing Agreement:
"Acceptable Financial Institution" shall mean a bank or trust company
with a combined capital plus surplus of at least $500,000,000 and whose
long-term senior unsecured debt is rated "A" or higher by S&P or "A2" or higher
by Moody's.
"Additional Financing Facility Credit Agreement" shall mean the credit
agreement dated as of May 31, 2002, between the Borrower Group and Qualcomm.
"Additional Senior Indebtedness" shall have the meaning set forth in
Section 2.04. Any Alcatel Loans made under or pursuant to the Alcatel Commitment
Letter (or any credit or similar agreement in connection therewith) constitute
Additional Senior Indebtedness, but shall be permitted as provided in Section
6.04(a) without compliance with the provisions of Section 6.04(d).
"Additional Senior Indebtedness Lenders" shall have the meaning set
forth in Section 2.04.
"Additional Senior Indebtedness Loans" shall mean, collectively, all of
the loans and notes made pursuant to the documentation relating to or evidencing
the Additional Senior Indebtedness.
"Administrative Agent" shall mean (i) with respect to the Alcatel
Credit Agreement, the Alcatel Administrative Agent, or any successor
Administrative Agent appointed pursuant to Section 10.08 of the Alcatel Credit
Agreement, (ii) with respect to the Qualcomm Credit Agreement, the Qualcomm
Administrative Agent, or any successor Administrative Agent appointed pursuant
to Section 10.8 of the Qualcomm Credit Agreement, (iii) with respect to the
Facility 2 Credit Agreement, the Facility 2 Administrative Agent, or any
successor Administrative Agent appointed pursuant to Section 10.08 of the
Facility 2 Credit Agreement, and (iv) with respect to any Additional Senior
Indebtedness, the administrative agent (or, in the case of notes, bonds or other
debt securities, the trustee, fiscal agent or comparable fiduciary) appointed
pursuant to the documentation evidencing such Additional Senior Indebtedness, or
any successor administrative agent appointed pursuant to the applicable section
of such documentation.
"Affiliate" shall mean, with respect to a specified Person, any other
Person which directly or indirectly controls, or is under common control with,
such Person. As used in this definition, "control" (including, with its
correlative meanings, "controlled by" and "under common control with") shall
mean possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise), provided
that, in any event, any Person which owns directly or indirectly 10% or more of
the securities having ordinary voting power for the
election of directors or other governing body of a corporation or 10% or more of
the partnership or other ownership interests of any other Person will be deemed
to control such corporation or other Person. Notwithstanding the foregoing, (i)
no individual shall be deemed to be an Affiliate of a Person solely by reason of
his or her being a director, committee member, officer or employee of such
person and (ii) each member of the Borrower Group and each of their respective
Affiliates shall be deemed to be an Affiliate of each other member of the
Borrower Group.
"Agents" shall mean, collectively, the Intercreditor Agent, the
Collateral Agent and the Administrative Agents.
"Alcatel" shall mean Alcatel, a corporation duly incorporated under the
laws of France.
"Alcatel Administrative Agent" shall mean Citibank International plc,
in its capacity as Administrative Agent under the Alcatel Credit Agreement.
"Alcatel Commitment Letter" shall mean the commitment letter dated as
of October 28, 1998, from Electro Banque to, and accepted by, the Company
relating to Facility 2 (as therein defined and described), as supplemented,
updated and confirmed pursuant to Section 3.01(v).
"Alcatel Costs" shall mean all of the amounts (other than value-added
taxes) due and payable by the Company or other members of the Borrower Group to
or for the account of Alcatel Indetel under the provisions of the Alcatel
Procurement Agreement, and including the repayment of any bridge or similar loan
(and interest thereon) made by Citibank, N.A., London Branch to the Company and
guaranteed by Alcatel, the proceeds of which were used to pay the foregoing
costs.
"Alcatel Credit Agreement" shall mean the Credit Agreement, dated as of
December 15, 1998, among the Company, the Alcatel Lenders referred to therein
and the Alcatel Administrative Agent.
"Alcatel Guaranty" shall mean the Amended and Restated Corporate
Guaranty, dated as of August 8, 2002, between Alcatel and the Alcatel
Administrative Agent pursuant to which Alcatel has guaranteed the payment
obligations of the Company under the Alcatel Credit Agreement as therein
provided.
"Alcatel Indetel" shall mean Alcatel Indetel Industria de
Telecomunicacion S.A. de C.V., a sociedad anonima de capital variable under the
laws of Mexico.
"Alcatel Lenders" shall mean the Persons from time to time making or
carrying Loans and Commitments to the Company under the Alcatel Credit Agreement
or under the Facility 2 Credit Agreement.
"Alcatel Loans" shall mean, collectively, all of the loans made under
the Alcatel Credit Agreement and all of the loans made under the Facility 2
Credit Agreement.
2
"Alcatel Procurement Agreement" shall mean the Agreement for Services,
Procurement, and Construction, with an effective date of October 21, 1998,
between the Company and Alcatel Indetel.
"Alcatel Qualified Costs" shall mean (a) all of the Alcatel Costs other
than (i) the cost of the towers to be delivered by Alcatel Indetel under the
Alcatel Procurement Agreement and (ii) the cost of the shelters to be delivered
by Alcatel Indetel under the Alcatel Procurement Agreement. For the avoidance of
doubt, the term "Alcatel Qualified Costs" shall not include interest on any
Indebtedness, whether capitalized or otherwise (other than the interest referred
to in the definition of Alcatel Costs) nor any VAT costs paid in connection with
services rendered, or equipment or other property furnished, under the Alcatel
Procurement Agreement.
"Amended and Restated Interim Funding Agreement" shall mean the credit
agreement, dated as of May 26, 2002, made among the Borrower Group, Qualcomm and
Electro Banque, and consented and agreed to and acknowledged by the other
parties thereto.
"Applicable Currency Exchange Rate" shall mean, as of any date of
determination, the rate of exchange (net of all fees and commissions) then
applicable to (i) the conversion of Dollars to Pesos or, (ii) the conversion of
Pesos to Dollars, as the context may require. The applicable rate of exchange
shall be the most favorable rate quoted by the Intercreditor Agent at 11:00 a.m.
(Mexico City time) on the applicable date of determination (or, if no such
quotations shall be available on such date, on the date closest to such date of
determination).
"Applicable Law" shall mean any constitution, statute, law, rule,
regulation, ordinance, judgment, order, decree, Permit, or any published
directive, guideline, requirement or other governmental restriction which has
the force of law, or any determination by, or interpretation of any of the
foregoing by, any judicial authority, binding on a given Person whether in
effect as of December 15, 1998 or as of any date thereafter, including all
applicable Environmental Laws.
"Applicable Shares" shall have the meaning set forth in Section 4.10.
"Assignment Agreements" shall mean the Assignment Agreements as
referred to in the Post-Closing Agreement (appropriately completed) pursuant to
which (i) the Company has collaterally assigned to the Collateral Agent all of
its rights under the Pegaso PCS Services Agreement, the Vendor Agreements, and
the Interconnection Agreements, and (ii) Pegaso PCS has collaterally assigned to
the Collateral Agent all of its rights under the Personnel Co. Services
Agreement and the Site Leases.
"Authorized Officer" shall mean, with respect to any Person, the Chief
Executive Officer, Chief Operating Officer, Chief Finance Officer and Deputy
Finance Officer or equivalent officers of such Person and, with respect to the
Company, shall include any officer or representative holding any of the
foregoing positions (or their equivalent) whose name appears on a certificate of
incumbency delivered concurrently with the execution of this Agreement, as such
certificate of incumbency may be amended from time to time to identify names of
the individuals then holding such offices or the names of such representatives
and the capacity in which they are acting.
3
"Blockage Notice" shall have the meaning given to such term in the
Second Intercreditor Agreement.
"Blockage Period" means a period of time beginning on the date a
Blockage Notice is actually delivered (or deemed delivered pursuant to Section 6
of the Second Intercreditor Agreement) without reference to the date on which
the issuer of such Blockage Notice had knowledge of the Event of Default (as
such term is defined in the Second Intercreditor Agreement) or event of default
under the Vendor Financing Documents (as such term is defined in the Second
Intercreditor Agreement), as applicable, giving rise to such Blockage Notice,
and terminating on the earlier to occur of: (a) the date which is sixty (60)
days following such delivery date (or deemed delivery date); (b) the date such
Blockage Notice is terminated, suspended, revoked or cancelled; (c) the time
such Event of Default (as such term is defined in the Second Intercreditor
Agreement) shall have been waived in writing by the Intercreditor Agent acting
in accordance with the Intercreditor Agreement of 1998; and (d) the date that
such Event of Default (as such term is defined in the Second Intercreditor
Agreement) is cured, if such Event of Default (as such term is defined in the
Second Intercreditor Agreement) is permitted to be cured under the Bridge Loan
Agreement and such Event of Default (as such term is defined in the Second
Intercreditor Agreement) is cured within the appropriate cure period.
"Borrower" or "Company" shall mean Pegaso Comunicaciones y Sistemas,
S.A. de C.V., a sociedad anonima de capital variable under the laws of Mexico.
"Borrower Group" shall mean (i) the Company, (ii) Holdings, (iii)
Pegaso PCS, (iv) Personnel Co. (v) the respective Subsidiaries of each of the
foregoing in existence as of December 15, 1998, (vi) Finanzas, (vii) Finco and
(viii) any Subsidiary of any of the foregoing which is formed, established,
purchased or acquired after December 15, 1998 as described in Section 5.13. Any
reference to a "member" or to a "member of the Borrower Group" shall mean one or
more of the Persons described in clause (i) through (viii) of this definition.
"Bridge Agent" has the meaning assigned to such term in the fifth
WHEREAS of the Second Intercreditor Agreement.
"Bridge Claims" means all present and future claims of the Bridge
Secured Parties against the Borrower or any other member of the Borrower Group
for the payment of money, including all claims for principal and interest
(including interest accruing after the commencement of a bankruptcy or
insolvency proceeding by or against Borrower or any other member of the Borrower
Group), or for reimbursement in connection with amounts paid under letters of
credit, or for reimbursement of fees, costs or expenses, or otherwise, whether
fixed or contingent, matured or unmatured, liquidated or unliquidated, and
whether arising under contract, in tort or otherwise, in each case arising under
the Bridge Financing Documents (as such term is defined in the Second
Intercreditor Agreement).
"Bridge Event of Default" shall mean a default or event of default
under the Bridge Loan Agreement.
4
"Bridge Financing Agreements" shall mean the Bridge Loan Agreement, the
promissory notes executed in connection with the Bridge Loan Agreement, the
Second Intercreditor Agreement, the Collateral Agency Agreement and the Bridge
Security Documents.
"Bridge Loan Agreement" shall mean that Bridge Loan Agreement dated as
of May 27, 1999 among the Borrower Group, Qualcomm, the other lenders from time
to time party thereto, and Citibank, N.A., as administrative agent, as the same
may be modified, amended, supplemented or restated from time to time.
"Bridge Lenders" shall have the meaning given to such term in the
Second Intercreditor Agreement.
"Bridge Loan Facility" shall mean the financing provided under and
pursuant to the Bridge Loan Agreement.
"Bridge Loan Indebtedness" shall mean all Indebtedness under and
pursuant to the Bridge Loan Agreement.
"Bridge Secured Parties" means the Bridge Lenders.
"Bridge Security Documents" means those documents the Bridge Secured
Parties and the Borrower Group shall execute to secure the Bridge Claims by the
Common Collateral.
"Business" shall mean the business of installing and operating
telecommunications networks, providing data, value added services and any other
telecommunication services now available or that may be available in the future
to customers through the Licenses, the provision of internet related activities
and electronic commerce services (whether on line or through sales outlets) and
any business ancillary to the foregoing.
"Business Day" shall mean (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which shall be
in the City of New York, in the Federal District of Mexico or in the City of
London a legal holiday or a day on which banking institutions are authorized by
law or other governmental actions to close and (ii) with respect to any
determination of the Eurodollar Rate, any day which is a Business Day described
in clause (i) and which is also a day for trading by and between banks in U.S.
Dollar deposits in the interbank Eurodollar market.
"Business Plan" shall mean the Final Business Plan, as updated from
time to time as provided in Section 5.01(d).
"Capital Expenditures" shall mean, with respect to any Person for any
period, expenditures that are capitalized in accordance with U.S. GAAP and, for
purposes of this definition, expenditures made during such period for equipment
and services financed under sale/leaseback arrangements or under an operating
lease.
"Capital Lease" as applied to any Person, shall mean any lease of any
property (whether real personal or mixed) by that Person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of such Person.
5
"Capital Stock" of any Person shall mean any and all shares, interest,
rights to purchase, warrants, options, participations or other equivalents of or
interest in (however designated) the common or preferred equity or equity or
preference share capital of such Person, including, without limitation,
partnership interests.
"Capitalized Lease Obligations" shall mean all obligations under
Capital Leases of any Person in each case taken at the amount thereof accounted
for as liabilities in accordance with GAAP.
"Cash Flow Test" shall mean, for any date or any particular calculation
period, that (A) EBITDA for the two consecutive fiscal quarters ending on the
date of the last financial statements delivered in accordance with Section
5.01(a) multiplied by a factor of two (2), is at least equal to (B) the total
regularly scheduled principal and interest on Indebtedness outstanding on the
date of such calculation (other than Indebtedness described in clauses (g), (k)
and (l) of Section 6.04) to become due during the twelve-month period commencing
on the date of such financial statements; provided, that for purposes of the
calculation in clause (B), the pro forma interest shall be based on the amount
of principal Indebtedness outstanding and the interest rates existing on the
date of determination and it shall be assumed that principal amounts will be
repaid as scheduled.
"Cash Proceeds" shall have the meaning set forth in Section 5.11.
"Casualty Event" shall mean an event which causes all or a portion of
the System to be damaged, destroyed or rendered unfit for normal use for any
reason whatsoever.
"Change of Control" shall mean (i) the failure at any time and for any
reason of TEM to (A) hold beneficial ownership (within the meaning of Rule 13d-3
of the Securities and Exchange Commission under the Securities Exchange Act of
1934), directly or indirectly, of voting Capital Stock of NewCo representing at
least 51% of the combined voting power of all Capital Stock of NewCo, or (B)
have the ability to appoint a majority of the board of directors of NewCo, or
(ii) the failure of Holdings to own all of the Capital Stock of each of the
other members of the Borrower Group (other than one share of such Capital Stock
which is owned, and shall continue to be owned by another member of the Borrower
Group).
"Charter Documents" shall mean, with respect to any Person, the
articles of incorporation, by-laws, partnership agreements or such other
documents or instruments which are required to be registered or lodged in the
place of incorporation or organization of such Person and which establish the
legal existence of such Person. With respect to Holdings, the term "Charter
Documents" shall also include the Joint Venture Agreement.
"Closing Date" shall mean December 15, 1998.
"COFETEL" shall mean Comision Federal de Telecomunicaciones de Mexico.
"Collateral" shall mean the security for the Senior Indebtedness,
including: (i) all property, assets (including cash, investments and accounts
receivable held from time to time by the Company) and contract rights (including
rights to intellectual property), whether now owned or hereafter acquired, of
the Company which are described (either specifically or generally) in
6
the Mortgage, (ii) all property, assets and rights of any member of the Borrower
Group which is made subject to a Lien as required by Section 5.14, (iii) the
rights of the Sponsors and Holdings and the other members of the Borrower Group
which are collaterally assigned pursuant to the Assignment Agreements, (iv) the
Capital Stock of the Company, Pegaso PCS, Personnel Co., Finco and Finanzas
which will be pledged to the Secured Parties pursuant to the PCS/Recursos Pledge
Agreement, Sistemas Pledge Agreements, Finco Pledge Agreement and Finanzas
Pledge Agreement or transferred to the trustee under the Guaranty Trust
Agreement, (v) the Capital Stock of any New Subsidiary, which will be pledged to
the Secured Parties pursuant to a pledge agreement substantially similar to the
above-referenced pledge agreements or transferred to the trustee under the
Guaranty Trust Agreement (vi) any and all security provided by any member of the
Borrower Group in connection with any Additional Senior Indebtedness as provided
in Section 2.04(c), and (vii) all proceeds and revenues of the foregoing.
"Collateral Agent" shall mean Banco Nacional de Mexico, S.A., Grupo
Financiero Banamex, as successor to Citibank Mexico, S.A., Grupo Financiero
Citibank, or any successor designated as collateral agent pursuant to Article 2
of the Collateral Agency Agreement.
"Collateral Agency Agreement" shall mean the Amended and Restated
Collateral Agency Agreement, dated as of September 10, 2002, among the
Collateral Agent, the Intercreditor Agent, the Administrative Agents and the
Company.
"Commitments" shall mean, collectively, (i) the commitment of the
Senior Lenders to make Loans under the Alcatel Credit Agreement, (ii) the
commitment of the Senior Lenders to make Loans under the Qualcomm Credit
Agreement, (iii) the commitment of Electro Banque to make Loans under the
Facility 2 Credit Agreement and (iv) the commitment of the Senior Lenders to
make Loans under any credit or similar agreement evidencing Additional Senior
Indebtedness.
"Commitment Fees" shall mean (i) in the case of the Alcatel Credit
Agreement, the fees payable by the Company under Section 2.03 thereof, (ii) in
the case of the Qualcomm Credit Agreement, the fees payable by the Company under
Section 2.1 thereof, (iii) in the case of the Alcatel Commitment Letter, the
fees payable by the Company in consideration thereof, (iv) in the case of the
Facility 2 Credit Agreement, the fees payable by the Company under Section 2.03
thereof and (v) in the case of any Additional Senior Indebtedness, those fees
specified therein which are payable to the Senior Lenders thereunder in
consideration for the Commitments made by such Senior Lenders thereunder.
"Common Collateral" means the Collateral (as such term is defined in
the Second Intercreditor Agreement), excluding for purposes of the Bridge
Claims, the Assignment Agreements and Consents.
"Common Agreement" shall mean the Amended and Restated Common
Agreement, dated as of September 10, 2002 among the members of the Borrower
Group and the Agents.
"Condemnation Event" shall mean any compulsory transfer or taking, or
transfer under threat of compulsory transfer or taking, of all or any part of
the System by any Governmental Authority.
7
"Consents" shall mean, collectively, each consent and agreement, as
referred to in the Post-Closing Agreement, from (i) each Vendor, (ii) Personnel
Co., with respect to the assignment of the Personnel Co. Services Agreement, and
Pegaso PCS, with respect to the assignment of the Pegaso PCS Services Agreement,
and (iii) each additional consent and agreement required to be delivered
pursuant to Section 5.04(b)(ii).
"Consolidated Debt" shall mean, as of any date of determination, the
aggregate amount of all Indebtedness of each member of the Borrower Group on a
combined basis, as shown on the balance sheet, or as would be shown on the
balance sheet, as of the date of determination, determined in accordance with
GAAP, plus (without duplication) any Indebtedness for borrowed money of any
other Person which has been (directly or indirectly) guaranteed by a member of
the Borrower Group or any other Contingent Obligation of a member of the
Borrower Group; provided, however, that for purposes of the EBITDA Test and the
Leverage Ratio, the term "Consolidated Debt" shall exclude the aggregate
principal amount of any Subordinated Loans outstanding as of such date of
determination.
"Consolidated Senior Debt" shall mean, as of any date of determination,
the aggregate amount of the Senior Indebtedness.
"Consolidated Paid-In Equity " shall mean, as of any date of
determination, and without duplication, the sum of (a) the aggregate amount of
equity capital which has been contributed in cash, as of such date of
determination, to Holdings by the Sponsors less any Dividends paid to the
Sponsors in accordance with Section 6.03 prior to such date of calculation, and
(b) the aggregate principal amount of Subordinated Loans outstanding as of such
date of determination.
"Contingent Obligations" shall mean as to any Person any obligation of
such Person Guaranteeing or intending to Guarantee any Indebtedness ("primary
obligations") of any other Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of such
Person, whether or not contingent, (a) to purchase any such primary obligation
or any property constituting direct or indirect security therefor, (b) to
advance or supply funds (i) for the purchase or payment of any such primary
obligation or (ii) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary
obligor, (c) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation or (d) otherwise
to assure, indemnify or hold harmless the owner of such primary obligation
against loss in respect thereof (other than indemnity obligations arising in the
ordinary course of business), provided, however, that the term Contingent
Obligation shall not include endorsements of instruments for deposit or
collection in the ordinary course of business. The amount of any Contingent
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Contingent Obligation
is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to perform
thereunder) as determined in good faith.
"Contribution Agreement" shall mean the Contribution Agreement, dated
as of April 26, 2002, by and among TEM and Alejandro Burillo Azcarraga, Carmela
Azcarraga Milmo and Scotiabank Inverlat, S.A., Institucion de Banca Multiple,
Grupo Financiero Scotiabank Inverlat.
8
"Covered Pops" shall mean, as of any date of determination, Pops for
those geographical areas as to which (a) the Company has the right under valid,
enforceable and effective Licenses owned by the Company to provide PCS and WLL
services, and (b) the Company has, as of such date of determination, constructed
or intends to construct facilities to provide such services.
"Credit Agreements" shall mean, collectively, (i) the Alcatel Credit
Agreement, (ii) the Qualcomm Credit Agreement, (iii) the Facility 2 Credit
Agreement and (iv) any and all credit or similar agreements evidencing any
Additional Senior Indebtedness.
"Credit Facilities" shall mean the credit facilities made available to
the Company under the Credit Agreements.
"Default" shall mean any event, act or condition which, with the giving
of notice, lapse of time, fulfillment of any condition or any combination
thereof, would become an Event of Default.
"Disbursement" shall mean any disbursement to or for the benefit of the
Company by any Senior Lender of the proceeds of Senior Indebtedness.
"Dividends" shall have the meaning provided in Section 6.03.
"Dollars" or "$" shall mean the lawful currency of the United States.
"EBITDA" shall mean, for any period of calculation, the total earnings
of the Borrower Group before interest, Taxes, depreciation and amortization
during such period of calculation, calculated in accordance with GAAP
eliminating (i) any net income or gain (or net loss), net of any tax effect,
during such period from any extraordinary items as defined according to GAAP,
(ii) any interest income, (iii) gains or losses on the sale of assets (other
than the sale of inventory in the ordinary course of business), (iv) any
extraordinary non-cash items deducted from or included in the calculation of
pre-tax net income (other than items which will require cash payments and for
which an accrual or reserve is, or is required by GAAP to be, made) and (v) the
EBITDA of any Subsidiaries or other assets disposed of or discontinued during
such period.
"EBITDA Test" shall mean, for any annual or quarterly period of
calculation ending on a specified date, the ratio (i) of the Consolidated Debt
of the Borrower Group outstanding on such date (other than Subordinated Loans)
less cash and Permitted Investments in excess of $5,000,000 held by the Borrower
Group on such date to (ii)(x) the EBITDA for the two consecutive fiscal quarters
last ended on or prior to such date for which financial statements have been
delivered in accordance with Section 5.01(a) multiplied by (y) 2.
"Eligible Swap Counterparty" shall mean a swap counterparty that (i)
has a long-term Dollar denominated debt rating of at least "A," as determined by
both S&P and Moody's, (ii) shall, at the time of execution of the Swap
Agreement, already be a Senior Lender hereunder, (iii) shall be Banamex,
Bancomer, S.A., or Banco Santander, or (iv) shall otherwise be acceptable to
Required Voting Parties.
"Environmental Claims" shall mean, with respect to any Person, any
notice, claim, administrative, regulatory or judicial action, suit, judgment,
demand or other communication
9
(whether written or oral) by any other Person alleging or asserting such
Person's liability for investigatory costs, cleanup costs, governmental response
costs, damages to natural resources or other property of such Person, personal
injuries, fines or penalties arising out of, based on or resulting from (i) the
presence, use, or release into the environment of any Hazardous Material at any
location, whether or not owned by such Person or (ii) any fact, circumstance,
condition or occurrence forming the basis of any violation, or alleged
violation, of any Environmental Law. The term "Environmental Claim" shall
include, (a) any and all claims by Governmental Authorities for enforcement,
cleanup, removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law and (b) any and all claims by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials or arising from alleged
injury or threat of injury to health, safety or the environment.
"Environmental Law" shall mean any statute, law, rule, regulation,
ordinance, code or policy having the force of law, in each case, applicable to
any member of the Borrower Group or the System now or hereafter in effect and in
each case as amended, and any applicable judicial or administrative
interpretation thereof, including any judicial or administrative order, decree
or judgment, relating to any Environmental Matter.
"Environmental Matter" shall mean any:
(a) release, emission, entry or introduction of any Hazardous
Materials into the air, including the ambient air;
(b) discharge, release or entry of any Hazardous Materials into
water, including into any river, watercourse, lake, or pond (whether natural or
artificial or above ground or which joins or flows into any such water outlet
above ground), or reservoir, or the surface of the river bed or of other land
supporting such waters, ground waters, sewer or the sea;
(c) deposit, disposal, keeping, treatment, importation,
exportation, production, transportation, handling, processing, carrying,
manufacture, collection, sorting or presence of any Hazardous Materials;
(d) nuisance, noise, defective premises, health and safety and
work, industrial illness, industrial injury due to environmental factors,
environmental health problems (including without limitation, asbestosis or other
illness or injury caused by exposure to asbestos) which is regulated by
Applicable Law;
(e) conservation, preservation or protection of the natural
resources environment which is regulated by Applicable Law; or
(f) other matter whatsoever directly affecting the environment or
any part of it which is regulated by Applicable Law.
"Equity Commitments" shall mean the commitments of the Original Mexican
Shareholders as set forth in Article III of the Joint Venture Agreement and in
resolutions adopted at various shareholder meetings pursuant to which such
Persons have become obligated to
10
contribute specified amounts of equity capital to Holdings on or prior to the
dates specified therein in consideration for Capital Stock to be issued by
Holdings.
"Event of Default" shall have the meaning set forth in Article 7.
"Existing Common Agreement" shall mean the Common Agreement, dated as
of December 15, 1998 (as further amended as of May 27, 1999 and October 10,
2001), among the members of the Borrower Group and the Agents.
"Existing Equity" shall mean the equity capital contributed to Holdings
by the Existing Shareholders and the New Shareholders (in consideration for
Capital Stock of Holdings issued to such shareholders) prior to December 15,
1998, in the aggregate amount of $300,000,000.
"Existing Shareholders" shall have the meaning set forth in the Joint
Venture Agreement.
"Facility 2 Administrative Agent" shall mean Electro Banque, as
administrative agent under the Facility 2 Credit Agreement.
"Facility 2 Credit Agreement" shall mean the Credit Agreement, dated as
of October 10, 2001 by and among the Company, the Facility 2 Administrative
Agent and the lenders from time to time party thereto.
"Final Business Plan" shall mean the Business Plan approved by the
Board of Directors of Holdings and delivered to the Administrative Agents and
the Relevant Parties.
"Financing Agreements" shall mean, collectively, the following
agreements and instruments: (i) the Common Agreement, (ii) the Alcatel Credit
Agreement, (iii) the Qualcomm Credit Agreement, (iv) the Alcatel Commitment
Letter and any credit or similar agreements executed as contemplated therein,
(v) the Facility 2 Credit Agreement, (vi) the Notes, (vii) any and all credit or
similar agreements evidencing Additional Senior Indebtedness, (viii) each of the
Guaranty Agreements, (ix) the Security Documents, (x) the Intercreditor
Agreement, (xi) the Collateral Agency Agreement, and (xii) the Second
Intercreditor Agreement.
"Finanzas" shall mean Pegaso Finanzas, S.A. de C.V., a sociedad anonima
de capital variable under the laws of Mexico.
"Finanzas Pledge Agreement" shall mean the Pledge Agreement dated as of
October 10, 2001, among Holdings, Pegaso PCS and the Collateral Agent pursuant
to which each of Holdings and Pegaso PCS pledged to the Collateral Agent the
shares in Finanzas held by each.
"Finco" shall mean Pegaso Finco I, S.A. de C.V., a sociedad anonima de
capital variable under the laws of Mexico.
"Finco Pledge Agreement" shall mean the Pledge Agreement dated as of
October 10, 2001, among Holdings, Pegaso PCS and the Collateral Agent pursuant
to which each of Holdings and Pegaso PCS pledged to the Collateral Agent the
shares in Finco held by each.
11
"Fiscal Year" shall mean the accounting year of the Company or the
Borrower Group, as the case may be, commencing each year on January 1 and ending
on December 31 or such other period agreed between the Company or the Borrower
Group, as the case may be, and the Intercreditor Agent.
"Frequency Band Concessions" shall mean the Concessions for the Use,
Development and Operation of Radio-electric Spectrum Frequency Bands to Provide
Fixed or Mobile Wireless Access Services issued by the Secretariat of
Communications of Transport in favor of, and held by, the Company by means of
its decision dated May 8, 1998 for the bands of frequencies of the radioelectric
spectrum in order to render wireless access services and more fully described in
the Joint Venture Agreement, including Exhibit A thereto.
"Further Provisions" shall have the meaning set forth in Section
2.04(b).
"GAAP " shall mean generally accepted accounting principles in Mexico
as in effect on the date of this Agreement, it being understood and agreed that
determinations in accordance with GAAP (i) for purposes of Articles 5 and 6 of
this Agreement, including defined terms as used therein, are subject (to the
extent provided therein) to Section 8.18 and shall include U.S. GAAP
reconciliations, and (ii) for the purposes of any other Section, to the extent
that GAAP is limited, qualified or modified in any such particular Section of
this Agreement, such determinations are subject to such limitations,
qualifications or modifications as are set forth in such Section (but only as
applied to such Section).
"Good Faith Contest" shall mean, with respect to the payment of Taxes
or any other claims or liabilities by any Person, the satisfaction of each of
the following conditions: (i) the validity or amount thereof is being diligently
contested in good faith by such Person by appropriate proceedings timely
instituted, (ii) during the period of such contest, the enforcement of any
contested item is effectively stayed, and (iii) such contest and any resultant
failure to pay or discharge the claimed or assessed amount is not reasonably
likely to have a Material Adverse Effect.
"Government of Mexico" shall mean the Government of Mexico, including
any instrumentality, subdivision, authority, agency, ministry or statutory or
legal entity or person (whether autonomous or not) thereof, including any
successors thereof, whether lawful or not.
"Governmental Authority" shall mean any national, state, county, city,
town, village, municipal or other local government department, commission,
board, bureau, agency, authority or instrumentality of the United States, Mexico
or any other national authority or any political subdivision of any thereof, and
any Person exercising executive, legislative, judicial, regulatory
administrative functions of or pertaining to any of the foregoing entities,
having jurisdiction over the Person or matters in question.
"GTE" shall mean GTE Data Services Mexico, S.A. de C.V., a sociedad
anonima de capital variable under the laws of Mexico.
"GTE Deferred Fee" shall mean the portion of the fee payable to Leap
Wireless Mexico pursuant to the Operator Agreement, the payment of which is
deferred in connection with a possible investment by GTE Corporation, or any of
its affiliates, in Borrower.
12
"GTE Operator Agreement" shall mean the "GTE Operator Agreement," as
referred to in the Post-Closing Agreement, between Leap Wireless Mexico and GTE.
"Guarantors" shall mean (i) Pegaso PCS, (ii) Personnel Co., (iii)
Holdings, (iv) Finanzas, (v) Finco and (vi) any other Subsidiary of a member of
the Borrower Group executing a Guaranty Agreement as required by Section 5.13.
"Guaranty" by any Person shall mean any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing in any manner any
Indebtedness of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for the purpose of assuring in any
other manner the obligee of such Indebtedness of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or in part);
provided that the term "Guaranty" shall not include (x) endorsements for
collection or deposit in the ordinary course of business, or (y) indemnity or
hold harmless provisions included in contracts entered into in the ordinary
course of business. The term "Guaranty" or "Guaranteed" used as a verb has a
correlative meaning.
"Guaranty Agreements" shall mean any agreement by which a Guarantor
Guarantees the obligations of the Company under any of the Credit Agreements,
including, without limitation, the Pegaso Guaranty Agreement.
"Guaranty Trust Agreement" shall mean the Irrevocable Administration
and Guaranty Trust Agreement pursuant to which Holdings will transfer title to
100% of the Capital Stock of the Company, Pegaso PCS, and Personnel Co. to the
trustee thereunder for the benefit of the Secured Parties represented by the
Collateral Agent.
"Hacienda" shall mean the Secretaria de Hacienda y Credito Publico
(Ministry of Finance and Public Credit) of Mexico.
"Hazardous Materials" shall mean (i) any chemicals, materials or
substances defined as or included in the definition "hazardous substances,"
"hazardous wastes," "hazardous materials," "extremely hazardous wastes,"
"restricted hazardous wasted," "toxic substances," "toxic pollutants,"
"contaminants" or "pollutants," or words of similar import, under any applicable
Environmental Law and (ii) any other chemical, material or substance, in each
case to the extent exposure to the same is prohibited, limited or regulated by
any Environmental Law by reason of its hazardous nature.
"High Yield Debt " shall have the meaning set forth in Section 6.04(h).
"Holdings" shall mean Pegaso Telecomunicaciones, S.A. de C.V., a
sociedad anonima de capital variable under the laws of Mexico.
"Holdings Shares" shall have the meaning set forth in Section 4.10.
13
"Indebtedness" shall mean, as to any Person, without duplication, (i)
all indebtedness (including principal, interest, fees and charges) of such
Person for borrowed money, (ii) all obligations of such Person for the deferred
purchase price of property or services, other than the GTE Deferred Fee and
trade accounts payable arising, and accrued expenses incurred, in the ordinary
course of business so long as such trade accounts payable are payable (and have
been paid) within 90 days of the date the respective goods are delivered or the
respective services are rendered, (iii) all obligations of such Person evidenced
by bonds, debentures, notes or similar instruments, (iv) the currently available
amount of all letters of credit issued for the account of such Person and all
outstanding reimbursement obligations with respect to such letters of credit,
(v) all liabilities secured by any Lien on any property owned by such Person,
(vi) any Guaranty of Indebtedness by such Person, (vii) all obligations under
trade or bankers' acceptances, (viii) Capitalized Lease Obligations, (ix) all
net obligations under agreements providing for swaps, ceiling rates, ceiling and
floor rates, contingent participation or other hedging mechanisms with respect
to the payment of interest or the convertibility of currency, (x) all
obligations under any conditional sale agreement or other title retention
agreement and (xi) all Contingent Obligations of such Person.
"Indemnified Parties" shall have the meaning set forth in Section
8.01(b).
"Independent Accountant" shall mean PricewaterhouseCoopers or any
replacement therefor of international recognized standing appointed by the
Borrower Group.
"Initial Disbursement" shall mean, with respect to any tranche of
Senior Indebtedness, the first Disbursement to occur on or after the Closing
Date to or for the benefit of the Company by one or more of the Senior Lenders
of the proceeds of such tranche of Senior Indebtedness under a Credit Agreement
to which it is a party.
"Initial Disbursement Date" shall mean the date on which the Initial
Disbursement is made.
"Insurance Consultant" shall mean AON Risk Services, or any replacement
therefor of international recognized standing appointed by the Intercreditor
Agent after consultation with the Company.
"Insurance Contracts" shall mean the insurance policies required to be
obtained by the Company or any other member of the Borrower Group pursuant to
any Financing Agreement.
"Interconnection Agreements" shall mean, collectively, (i) that certain
Interconnection Agreement dated as of November 26, 1998 between the Company and
TelMex, and (ii) that certain Interconnection Agreement dated as of November 26,
1998 between the Company and TelNor.
"Intercreditor Agent" shall mean Citibank, N.A., or any successor
intercreditor agent designated pursuant to the Intercreditor Agreement.
"Intercreditor Agreement" shall mean the Amended and Restated
Intercreditor Agreement, dated as of September 10, 2002, among the Intercreditor
Agent, the Collateral Agent and the Administrative Agents.
14
"Interest Expense" shall mean, for any period, determined on a
consolidated basis for the Borrower Group, the sum (without duplication) of (a)
interest expense on Indebtedness, including (i) fees, (ii) payments under any
interest rate protection agreements or other hedging agreements, (iii) the
interest portion of any deferred payment obligations, (iv) all fees and charges
owed with respect to letters of credit or performance or other bonds, (v) all
accrued or capitalized interest, (vi) any amortization of debt discount and
(vii) all but the principal component of Capital Lease payments and (b)
dividends declared or paid pursuant to this Agreement. "Investment Company Act
of 1940" shall mean the U.S. Investment Company Act of 1940, as amended and the
rules and regulations promulgated thereunder.
"Joint Venture Agreement" shall mean the Joint Venture Agreement
entered into as of July 16, 1998 by and among the Existing Shareholders, Leap
Mexico, Holdings and the New Shareholders, in the form delivered to the
Collateral Agent prior to December 15, 1998.
"Judgment Currency" shall have the meaning set forth in Section 8.11.
"Judgment Currency Conversion Date" shall have the meaning set forth in
Section 8.11.
"Leap" shall mean Leap Wireless International, Inc., a corporation
under the laws of Delaware.
"Leap Mexico" shall mean Leap PCS Mexico, Inc., a corporation under the
laws of California, formerly called Qualcomm PCS Mexico, Inc.
"Leap Wireless Mexico" shall mean Leap Wireless Mexico, a corporation
under the laws of Mexico.
"Leases" shall mean all leases of real property in which Pegaso PCS is
the lessee, including any and all leases entered into for the purpose of placing
components of the System.
"Leverage Ratio" shall mean, as of any date of determination, the ratio
of (i) Consolidated Debt as of such date, less cash and Permitted Investments in
excess of $5,000,000 held by the Borrower Group on such date, to (ii)
Consolidated Paid-In Equity as of such date.
"Licenses" shall mean the Frequency Band Concessions and the
Telecommunication Networks Concession and any other licenses acquired by the
Company in connection with telecommunications services and products in Mexico.
"Lien" shall mean any security interest, mortgage, pledge, assignment
by way of security, charge, lease, easement, servitude, deposit arrangement,
encumbrance, lien (statutory or other), preference, priority or other security
agreement of any kind or nature whatsoever including, without limitation, (i)
any conditional sale or other title retention agreement, any financing or
similar statement or notice filed under any recording or notice statute, and any
lease having substantially the same effect as any of the foregoing, and (ii) any
designation (except as
15
contemplated by this Agreement, or any Credit Agreement) of loss payees or
beneficiaries or any similar arrangement under any Insurance Contract.
"Loans" shall mean, as the context shall indicate, either one or all of
(i) the Alcatel Loans, (ii) the Qualcomm Loans, or (iii) the Additional Senior
Indebtedness Loans.
"Loss Proceeds" any and all amounts received by any member of the
Borrower Group (i) under insurance policies maintained by or for the benefit of
such member, or (ii) from any Governmental Authority as a result of a
Condemnation Event.
"Material Adverse Effect" shall mean an event, circumstance, occurrence
or condition which has caused or could reasonably be expected to cause, as of
any date of determination, a material and adverse effect on (i) the business,
assets, liabilities, operations or financial condition of the Borrower Group
(taken as a whole), (ii) the ability of the Borrower Group (taken as a whole) to
perform its (or their) material obligations under the Financing Agreements
(including its (or their) ability to pay its (or their) Obligations under the
Financing Agreements as such obligations become due, (iii) the validity or
enforceability of any of the Financing Agreements (including the ability of any
Secured Party to enforce any of its remedies under any Financing Agreement), or
(iv) the validity, priority or enforceability of the Secured Parties' security
interest in the Collateral.
"Material Agreement" shall mean (i) any operator agreement or
replacement operator agreement, (ii) any equipment or services procurement
agreement (other than the Qualcomm Procurement Agreement or the Alcatel
Procurement Agreement) pursuant to which the aggregate payments are expected to
exceed $10,000,000, and (iii) any interconnection agreement, the absence of
which would be reasonably likely to reduce the Company's gross revenues by more
than ten percent (10%) of gross revenues projected over the twelve months
following the date upon which the agreement was entered.
"Mexico" shall mean the United Mexican States.
"Minimum Assets" shall mean those assets of the Borrower Group (a)
which constitute not less than 85% of the value of all assets of the Borrower
Group (valued on the same basis as such assets are carried on the books of each
member of the Borrower Group on a consolidated basis), (b) which are necessary
to carry on the Business of the Borrower Group in substantially the same manner
as is then being carried out by the Borrower Group, and (c) the legal and
beneficial ownership of which is required to be maintained in the name of the
Company by Section 4.10 and to be subject to the Mortgage as provided in Section
4.10. For the avoidance of doubt, the term Minimum Assets shall include all
Licenses, all accounts receivable, and all real estate, fixtures and personal
and intellectual property (including customer lists, billing and other records
of the Borrower Group and computer software.
"Moody's" shall mean Moody's Investors Service, Inc. or any successor
thereto.
"Mortgage" shall mean the mortgage, dated as of October 30, 1998 (the
"Original Mortgage"), as amended by Amendment No. 1 dated as of December 15,
1998 ("Amendment No. 1 to the Mortgage") and Amendment No. 2 dated as of October
23, 2001, established under
16
the Telecommunications Law, pursuant to which the Company has granted a Lien in
favor of the Collateral Agent over all of its properties and assets, including,
without limitation, (i) all components of the System, (ii) the Licenses, (iii)
all accounts receivable of the Company (including all amounts owed from time to
time by subscribers of the System), (iv) all cash and securities owned by the
Company, and (v) the Company's rights in, to and under the Vendor Agreements,
the Operator Agreement, the Pegaso PCS Services Agreement and any other contract
to which the Company is a party.
"New Shareholders" shall have the meaning set forth in the Joint
Venture Agreement.
"New Subsidiary" shall have the meaning set forth in Section 5.13.
"NewCo" shall mean Comunicaciones del Milenio, S.A. de C.V., a sociedad
anonima de capital variable under the laws of Mexico.
"Non-Vendor Financing" shall mean financing other than (i) the
financing provided under the Qualcomm Credit Agreement, the Alcatel Credit
Agreement and the Facility2 Credit Agreement, and (ii) other financing provided
by Persons to directly finance the purchase of equipment and services, which
when taken together with similar financing provided by such Person and its
Affiliates exceeds $5,000,000 in amount outstanding; provided, that this
definition of "Non-Vendor Financing" shall include, without limitation, the
Bridge Loan Facility, the Amended and Restated Interim Funding Agreement, and
the Additional Financing Facility Credit Agreement.
"Note" shall mean any promissory note issued by the Company pursuant to
a Credit Agreement.
"Obligation Currency" shall have the meaning ascribed thereto in
Section 8.11.
"Obligations" shall mean all obligations of members of the Borrower
Group now existing or hereinafter arising, direct or indirect, absolute or
contingent, due or to become due, under any of the Financing Agreements,
including (and without duplication) (i) the principal of and interest on the
Loans and other Senior Indebtedness and all other obligations, advances, debts
and liabilities of members of the Borrower Group, including indemnities,
Commitment Fees and other fees and interest incurred under, arising out of or in
connection with the Credit Agreements or any other Financing Agreement (whether
or not evidenced by any note, bond or other instrument and whether or not for
the payment of money), (ii) any and all sums advanced by the Collateral Agent,
in order to preserve the Collateral or preserve its security interest in the
Collateral and (iii) in the event of any proceeding for the collection or
enforcement of the Obligations, after an Event of Default shall have occurred
and be continuing and unwaived, the expenses of retaking, holding, preparing for
sale or lease, selling or otherwise disposing of or realizing on the Collateral,
or of any exercise by the Collateral Agent of its rights under the Security
Documents, together with reasonable attorneys' fees and court costs.
"Operator Agreement" shall mean the "Operator Agreement," as referred
to in the Post-Closing Agreement, between the Company and Leap Wireless Mexico,
which agreement shall provide for operation of the System.
17
"Original Business Plan" shall mean the business plan, upon which the
management, officers and directors of the Borrower Group are relying to operate
the Business as of December 15, 1998, and which has been delivered to the
Administrative Agents and the Relevant Parties prior to December 15, 1998.
"Original Mexican Shareholders" shall mean Pegaso Comunicaciones y
Servicios, S.A. de C.V., Corporativo del Valle de Mexico, S.A. de C.V. and
Alejandro Burillo Azcarraga.
"Overnight Eurodollar Rate" shall mean the Eurodollar Rate determined
daily for an Interest Period of one day (or if longer the shortest period for
which an interest rate is quoted).
"Payment Date" shall mean the date on which any interest or principal
payments are to be made on any Senior Indebtedness pursuant to any Credit
Agreement.
"PCS/Recursos Pledge Agreement" shall have the meaning set forth in
Section 3.01(h).
"Pegaso Guaranty Agreement" shall mean the Guaranty Agreement dated as
of December 15, 1998 as executed by each of the Guarantors in favor of the
Collateral Agent for the benefit and on behalf of the Senior Lenders.
"Pegaso PCS" shall mean Pegaso PCS, S.A. de C.V., a sociedad anonima de
capital variable under the laws of Mexico.
"Pegaso PCS Services Agreement" shall mean the Services Agreement,
dated as of December 15, 1998 between Pegaso PCS and the Company.
"Permit" shall have the meaning set forth in Section 4.05.
"Permitted Indebtedness" shall have the meaning set forth in Section
6.04.
"Permitted Investments" of any Person shall mean (A) (i) obligations
issued or Guaranteed as to principal and interest by the United States or any
agency thereof whose obligations are backed by the full faith and credit of the
United States, as applicable, and in either case, which mature no later than one
year after the date of acquisition, (ii) certificates of deposit or other
interest-bearing obligations, maturing no later than six months after the date
of acquisition, of any Acceptable Financial Institution, (iii) commercial paper
and other corporate debt securities rated, on the date of purchase, "A-1" or
"P-1" (as applicable) by S&P or Moody's, respectively, or higher for securities
with original maturities of six months or less, (iv) repurchase agreements with
respect to any of the foregoing obligations or securities, maturing no later
than one year after the date of acquisition, with any bank of the type referred
to in clause (ii) above, (v) participations in 28-day auction-rate tax-exempt
funds rated, on the date of purchase, "AA" or "Aa2" by S&P or Moody's (as
applicable) or higher, (vi) any mutual funds comprising investments referred to
in clauses (i) through (v) above, and (vii) any other investments approved by
the Collateral Agent; provided, however, in order for any investment described
above, which has been rated both by S&P and Moody's, to qualify as a Permitted
Investment, such investment must have received at least the minimum rating
specified above from each such rating institution, and (B) investments in any of
the following, denominated in Pesos: (i) obligations with a maturity of six
months or less which are direct obligations of Mexico or of entities
representing
18
the full faith and credit of Mexico, or obligations which are unconditionally
guaranteed by Mexico; (ii) obligations with a maturity of six months or less of
Mexican commercial banks of recognized stature, supervised by the Mexican
National Banking and Securities Commission, with a capital and surplus of at
least $250,000,000; provided, that the aggregate investments of the Borrower
Group in Mexican commercial banks other than Banamex, Bancomer, S.A., or Banco
Santander will not exceed $5,000,000 at any time; (iii) commercial paper of
Mexican corporations with a maturity of six months or less and rated at least
"A3" by Calificadora de Valores S.A. de C.V.; provided, that the aggregate
amount invested under this clause (iii) shall not exceed $2,500,000 at any time,
and (iv) repurchase agreements with maturities of not more than 90 days related
to any of the obligations described in clause (i), (ii) or (iii) above, and that
are collateralized by such obligations with any Mexican commercial bank which
meets the criteria outlined in clause (ii) above; provided, that the aggregate
amount invested under this clause (iv) shall not exceed $2,500,000 at any time;
provided further that the aggregate amount invested in all investments in this
clause (B) shall not exceed the amount equal to the Company's average monthly
operating expenses for the preceding six months.
"Permitted Lien" shall have the meaning set forth in Section 6.01.
"Person" shall mean any individual, corporation, partnership
(including, without limitation, association), limited liability company, joint
stock company, trust, unincorporated organization or government or political
subdivision thereof.
"Personnel Co." shall mean Pegaso Recursos Humanos, S.A. de C.V., a
sociedad anonima de capital variable under the laws of Mexico.
"Personnel Co. Services Agreement" shall mean the Services Agreement,
dated as of December 15, 1998, between Pegaso PCS and Personnel Co., pursuant to
which Personnel Co. will provide certain services to Pegaso PCS.
"Pesos" or "Ps." shall mean the lawful currency of Mexico.
"Peso Equivalent" shall mean, with respect to any monetary amount in
Pesos, at any time for the determination thereof, the amount of Dollars obtained
or obtainable by converting the amount of Pesos involved in such computation
into Dollars at the Applicable Currency Exchange Rate against delivery of Pesos
at approximately 11:00 A.M. (Mexico City time) on the date of determination
thereof.
"Pops" shall mean population, as based on specific population estimates
of geographic areas as determined in accordance with those population estimates
provided by COFETEL in connection with the bidding for and award of the
Licenses.
"Post-Closing Agreement" shall have the meaning set forth in Section
3.01(z).
"Pro Rata Payment" shall mean a payment to a Senior Lender on any
Payment Date in which (a) interest paid to such Senior Lender on such Payment
Date bears the same proportion to the total interest payments made to all Senior
Lenders on such Payment Date as (i) the total Obligations for interest due to
such Senior Lender on such Payment Date bears to (ii) the total Obligations for
interest due to all Senior Lenders on such Payment Date, (b) principal paid or
19
prepaid to such Senior Lender on such Payment Date bears the same proportion to
the total principal payments or prepayments made to all Senior Lenders on such
Payment Date as (i) the total Obligations for principal due to such Senior
Lender on such Payment Date bears to (ii) the total Obligations for principal
due to all Senior Lenders on such Payment Date and (c) fees, commissions,
indemnities and all amounts other than interest and principal paid to such
Senior Lender on such Payment Date bears the same proportion to the total fees,
commissions, indemnities and such other amounts paid to all Senior Lenders on
such Payment Date as (i) the total Obligations for fees, commissions,
indemnities and such other amounts due to such Senior Lender on such Payment
Date bears to (ii) the total Obligations for fees, commission, indemnities and
such other amounts due to all Senior Lenders on such Payment Date; provided,
that, unless otherwise provided in this Agreement, (x) all Commitment Fees shall
be paid in full when due; no such fees shall be paid on a Pro Rata Payment basis
or included in any Pro Rata Payment calculation, (y) any prepayment premiums or
break-funding amounts shall be paid in full at the time of prepayment; no such
amounts shall be paid on a Pro Rata Payment basis or included in any Pro Rata
Payment calculation, and (z) any prepayment of a Loan the proceeds of which were
used for the payment of VAT shall not be paid on a Pro Rata Payment basis and
any such Loans shall not be included in any Pro Rata Payment calculation.
"Qualcomm" shall mean QUALCOMM, Incorporated, a corporation under the
laws of Delaware.
"Qualcomm Administrative Agent" shall mean ABN AMRO Bank N.V., in its
capacity as Administrative Agent under the Qualcomm Credit Agreement.
"Qualcomm Costs" shall mean the cost of all equipment and services
delivered to the Company under the Qualcomm Procurement Agreements, plus brokers
fees, export credit insurance premiums, transportation costs and import duties
payable in connection therewith but in no event including any Subscriber Units
(as defined in the Qualcomm Equipment Agreement).
"Qualcomm Credit Agreement" shall mean the Amended and Restated Credit
Agreement dated as of December 15, 1998, between the Company, the Qualcomm
Lenders referred to therein and the Qualcomm Administrative Agent.
"Qualcomm Lenders" shall mean the financial institutions and other
entities making Loans and Commitments under the Qualcomm Credit Agreement;
provided, that such term shall refer to such Persons only in their capacities as
lenders under the Qualcomm Credit Agreement and not in their capacities as
equipment suppliers or otherwise.
"Qualcomm Loans" shall mean all of the loans made under the Qualcomm
Credit Agreement
"Qualcomm Procurement Agreements" shall mean collectively, (i) the
Equipment Purchase Agreement dated as of June 10, 1998 between the Company (by
assignment or otherwise) and Ericsson Wireless Communications Inc. (by
assignment), as amended, and (ii) the Services Agreement dated as of June 10,
1998 between Ericsson Telecom S.A. de C.V. (by assignment) and the Company (by
assignment or otherwise), as amended
20
"Qualified Public Offering" shall mean a public offering of common
stock of Holdings, (i) in which the offering is made by Holdings and the
proceeds are to used by Holdings in its Business, (ii) the amount received by
Holdings (net of commissions, discounts and expenses) is not less than
$75,000,000, and (iii) such offering results in the common stock (or depository
receipts with respect thereto) of Holdings being listed on a national securities
market in the United States or in the European Economic Union.
"Rating Agencies" shall mean, collectively, S&P, Moody's and any other
internationally recognized statistical ratings organization approved by the
Collateral Agent.
"Relevant Lender" shall have the meaning given to that term in Section
4.22.
"Relevant Parties" shall mean (i) so long as the Alcatel Guaranty shall
remain in effect, Alcatel, (ii) with respect to loans made in accordance with
the Alcatel Commitment Letter that are subject to credit support from a third
party, such third party, and (iii) if and to the extent that Qualcomm (or any
Subsidiary of Qualcomm) shall guarantee the obligations of the Company under the
Qualcomm Credit Agreement, and for so long as such guaranty shall remain in
effect, Qualcomm or such Subsidiary of Qualcomm.
"Remaining Cash Proceeds" shall have the meaning set forth in Section
5.11.
"Required License Sale" shall have the meaning set forth in Section
6.02(e).
"Required Pops" shall mean Covered Pops (a) covering the entire
population of Regions 9, 4 and 6 (as such regions are defined in Exhibit A to
the Joint Venture Agreement), and (b) covering at least 33 million Pops.
"Required Voting Parties" shall have the meaning given to that term in
the Intercreditor Agreement.
"Responsible Officer" shall mean, with respect to any member of the
Borrower Group, the President, Chief Executive Officer, Chief Financial Officer,
Chief Operating Officer or General Counsel of such member, or any Person having
a similar function.
"S&P" shall mean Standard & Poor's Ratings Group, a division of The
McGraw-Hill Companies, Inc., or any successor thereto.
"Second Intercreditor Agreement" shall mean that certain Intercreditor
Agreement, dated as of October 10, 2001, among the Secured Parties and Qualcomm,
as Bridge Lender under the Bridge Loan Agreement.
"Secured Parties" shall mean, collectively, (i) the Senior Lenders and
(ii) the Agents.
"Security Documents" shall mean, collectively, the Mortgage, the
PCS/Recursos Pledge Agreement, the Sistemas Pledge Agreement, the Finco Pledge
Agreement, the Finanzas Pledge Agreement, the Guaranty Trust Agreement, the
Sponsors Negative Pledge Agreement, the Assignment Agreements, the Guaranty
Agreements, the Consents, any documents or instruments executed in accordance
with Section 2.04(c), Section 5.13(A), Section 5.13(B), Section 5.13(D)
21
and Section 5.14(a) and (b), and any filings, registrations, recordings or
similar instruments or documents necessary or required by the Collateral Agent
or any other Secured Party to record, perfect or otherwise evidence a security
interest in the Collateral.
"Senior Leverage Ratio" shall mean, as of any date of determination,
the ratio of (i) Consolidated Senior Debt as of such date, less cash and
Permitted Investments in excess of $5,000,000 held by the Borrower Group on such
date, to (ii) Consolidated Paid-In Equity as of such date.
"Senior Indebtedness" shall mean, collectively, the Obligations under
the Alcatel Loans, the Obligations under the Qualcomm Loans and the Obligations
under any Additional Senior Indebtedness.
"Senior Lenders" shall mean, collectively, the Alcatel Lenders, the
Qualcomm Lenders and the lenders providing funds under any Additional Senior
Indebtedness; provided, however, that with respect to, and to the extent of, any
Obligations paid by Alcatel under the Alcatel Guaranty, Alcatel shall be deemed
the Senior Lender as described in the Alcatel Guaranty.
"Services Agreements" shall mean, collectively, the Personnel Co.
Services Agreement and Pegaso PCS Services Agreement.
"Shareholders Agreement" shall mean the Shareholders' Agreement, dated
as of September 10, 2002, by and among NewCo, TEM and Alejandro Burillo
Azcarraga, Carmela Azcarraga Milmo and Scotiabank Inverlat, S.A., Institucion de
Banca Multiple, Grupo Financiero Scotiabank Inverlat.
"Sistemas Pledge Agreement" shall have the meaning set forth in Section
3.01(h).
"Site Lease" shall mean a Site Lease Agreement, substantially in the
form of Exhibit A to the Common Agreement; provided, however, that with respect
to any Site Lease Agreement which has not yet been forwarded to a potential
lessor on or before the Amendment Effective Date, such Site Lease Agreement
shall reflect appropriate changes to reflect the ownership of the Company in
assets located at the leased sites.
"SPA Closing Date" shall mean September 10, 2002.
"Sponsors" shall mean collectively all of the shareholders of Holdings.
"Sponsors Negative Pledge Agreement" shall mean the Negative Pledge
Agreement, dated as of December 15, 1998, pursuant to which each of the Sponsors
has agreed not to grant a Lien to any third party on the Capital Stock of
Holdings held by such Sponsor.
"Stock Purchase Agreement" shall mean the Stock Purchase Agreement,
dated as of April 26, 2002, by and among Holdings, its Sponsors, TEM and others
parties named therein, pursuant to which TEM shall purchase from certain of the
Sponsors all of the Capital Stock of Holdings owned by such Sponsors in
accordance with the terms and conditions of the Stock Purchase Agreement.
22
"Subordinated Loans" shall mean unsecured loans or other advances made
to Holdings, Finanzas or Finco by NewCo or the shareholders of NewCo or any
Affiliate of any such shareholder, or which are made by third parties and are
guaranteed directly or indirectly by such shareholder or Affiliate, which (i)
are subordinated in right of payment to all other Indebtedness of the Borrower
Group, (ii) do not require that any payment of principal or interest be made
(whether at scheduled maturity, by acceleration or otherwise) until the date
which is one year following the latest final maturity date for any Senior
Indebtedness then outstanding, (iii) are not guaranteed by any other member of
the Borrower Group, (iv) are the subject of an instrument executed by such
shareholder or Affiliate or third party and deposited with the Intercreditor
Agent pursuant to which such Person acknowledges that it shall receive no
payment or amount or other consideration (other than as permitted by Section
6.12) in respect of such Subordinated Loan until all Senior Indebtedness has
been paid in full, and (v) by the terms of the instrument executed to evidence
such loans, requires that such loans are to be funded as loans to the Company on
the same day that such loans are made to Holdings, Finanzas or Finco, as the
case may be.
"Subsidiary" shall mean, for any Person, any other Person (whether now
existing or hereafter organized) for which at least a majority of the securities
or other ownership interests having ordinary voting power for the election of
directors or other managers are at the time owned or controlled by such first
Person or one or more Subsidiaries of such first Person or any combination
thereof.
"System" shall mean the wireless broadband PCS system to be constructed
and rolled out by the Borrower Group pursuant to the Business Plan.
"System Agreements" shall mean, collectively, the Vendor Agreements,
the Services Agreements, the Site Leases, the Interconnection Agreements and the
Licenses.
"System Costs" shall mean all costs incurred by the Company or other
members of the Borrower Group in connection with the care, custody, control,
construction, development and financing of the System, in all cases as and to
the extent set forth in the Business Plan, including (without duplication or
limitation):
(i) amounts payable under the Vendor Agreements (other than indemnities, if
any);
(ii) interest, fees, expenses and withholding taxes payable under the Credit
Facilities, in each case prior to the date on which the System is completed in
accordance with the Business Plan;
(iii) costs and expenses of legal, engineering, accounting, construction
management and other advisors or consultants incurred in connection with the
System and the Business prior to the date on which the System is completed in
accordance with the Business Plan;
(iv) fees, commissions and expenses payable to the Secured Parties at the
Initial Disbursement Date for each Facility;
(v) construction insurance premiums for coverage obtained prior to the date
on which the System is completed in accordance with the Business Plan;
23
(vii) the Company's labor costs; and
(viii) value-added taxes and import duties payable by the Company in Mexico
with respect to equipment and material imported by or on behalf of the Company.
"Taxes" shall mean all taxes of every kind (including without
limitation, gross and net income, gross and net receipts, capital gains, excess
profits and minimum taxes, taxes on tax preferences, capital, net worth,
franchise, sales, use value-added, stamp, documentary, excise, property and
other similar taxes), charges and withholdings, levies, imposts, duties, fees
and deductions imposed by any government or political subdivision thereof,
quasi-governmental authority or taxing jurisdiction or authority, together with
all interest, additions to tax, penalties and similar add-ons payable with
respect thereto.
"Tax Return" means any return, declaration, report, claim for refund or
information return or statement relating to Taxes or any amendment thereto, and
including any schedule or attachment thereto.
"Telecommunication Law" shall mean the Mexican General Means of
Communications Law
"Telecommunication Networks Concession" shall mean the license granted
on June 23, 1998 by the Secretariat of Communications of Transport in favor of,
and held by, the Company to install, operate and exploit a public
telecommunications network.
"TelMex" shall mean Telefonos de Mexico, S.A. de C.V.
"TelNor" shall mean Telefonos del Noroeste, S.A. de C.V.
"TEM" shall mean Telefonica Moviles, S.A., a company organized under
the laws of the Kingdom of Spain.
"Transaction Documents" shall mean, collectively, the System Agreements
and the Financing Agreements.
"Transfer" shall mean any sale, assignment or other transfer,
regardless of whether carried out directly or indirectly.
"Trigger Date" shall mean the date on which the Company delivers to the
Administrative Agents and the Relevant Parties financial statements for the
Borrower Group for the fiscal quarter ended March 31, 2006 in accordance with
Section 5.01(a).
"United States" or "U.S." shall mean the United States of America.
"U.S. GAAP" means generally accepted accounting principles in the
United States.
"VAT" shall mean Mexican impuesto al valor agregado (value-added
taxes).
24
"Vendor" shall mean each Person (other than the Company) which is a
party to a Vendor Agreement.
"Vendor Agreements" shall mean collectively (i) the Alcatel Procurement
Agreement; and (ii) the Qualcomm Procurement Agreements.
"Voting Party" shall have the meaning set forth in the Intercreditor
Agreement.
"Wholly-owned" when used in respect of any Subsidiary, shall mean that
the parent company of such Subsidiary owns all of the Capital Stock of such
Subsidiary, other than any minimal shares which are required by Mexican (or
other) Applicable Law to be owned by another Person.
"Wireless Services" shall mean PCS (Personal Communications Services)
and/or WLL (wireless local loop) services.
"Written" or "in writing" shall mean any form of written communication
or a communication by means of telex, facsimile transmission, telegraph or
cable.
25