<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 333-26649
------------------------
NEXTEL INTERNATIONAL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
WASHINGTON 91-167-1412
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1191 SECOND AVENUE, SUITE 1600, SEATTLE, WA 98101
(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code: (206) 749-8000
------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate the number of shares outstanding of each of issuer's classes of
common stock as of the latest practicable date:
<TABLE>
<CAPTION>
NUMBER OF SHARES OUTSTANDING
TITLE OF CLASS ON MAY 1, 1998
-------------- --------------
<S> <C>
Common Stock, no par value 36,500,000
</TABLE>
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<PAGE> 2
NEXTEL INTERNATIONAL, INC.
INDEX
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
PART I FINANCIAL INFORMATION.
Item 1. Financial Statements--Unaudited................... 3
Condensed Consolidated Balance Sheets--As of March 31,
1998 and December 31, 1997............................ 3
Condensed Consolidated Statements of Operations--For
the Three Months Ended March 31, 1998 and 1997........ 4
Condensed Consolidated Statement of Stockholders'
Equity--For the Three Months Ended March 31, 1998..... 5
Condensed Consolidated Statements of Cash Flows--For
the Three Months Ended March 31, 1998 and 1997........ 6
Notes to Condensed Consolidated Interim Financial
Statements............................................ 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.................... 11
PART II OTHER INFORMATION.
Item 1. Legal Proceedings................................. 17
Item 2. Changes in Securities............................. 17
Item 4. Submissions of Matters to a Vote of Security
Holders................................................ 17
Item 6. Exhibits and Reports on Form 8-K.................. 18
</TABLE>
2
<PAGE> 3
PART I
ITEM 1. FINANCIAL STATEMENTS -- UNAUDITED.
NEXTEL INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 1998 AND DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)
UNAUDITED
<TABLE>
<CAPTION>
1998 1997
---------- ----------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents (of which $104,540 is
restricted as of March 31, 1998)...................... $ 463,380 $ 159,790
Marketable securities.................................. 5,236 128,560
Accounts receivable, less allowance for doubtful
accounts of $2,112 and $1,003......................... 6,162 3,838
Subscriber equipment inventory......................... 12,728 1,749
Prepaid and other...................................... 31,176 15,884
---------- ----------
Total current assets.............................. 518,682 309,821
PROPERTY, PLANT AND EQUIPMENT, net of accumulated
depreciation of $4,156 and $1,992......................... 266,196 136,210
INVESTMENT IN UNCONSOLIDATED SUBSIDIARIES, at cost less
equity in net losses of $1,313 and $7,526................. 81,045 106,489
INTANGIBLE ASSETS, net of accumulated amortization of
$21,729 and $14,664....................................... 593,455 526,000
INVESTMENTS AND OTHER ASSETS................................ 167,380 44,518
---------- ----------
$1,626,758 $1,123,038
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable, accrued expenses and other........... $ 74,501 $ 76,048
Due to parent.......................................... -- 8,254
Notes payable and current portion of long-term debt.... 2,345 2,211
---------- ----------
Total current liabilities......................... 76,846 86,513
LONG-TERM DEBT.............................................. 1,026,387 597,809
DEFERRED INCOME TAXES....................................... 125,829 120,777
---------- ----------
Total liabilities...................................... 1,229,062 805,099
---------- ----------
MINORITY INTEREST........................................... 28,309 21,910
STOCKHOLDERS' EQUITY:
Series A exchangeable redeemable preferred stock (1,250
shares authorized, $10.00 par value, 988.86 shares
issued and outstanding)............................... 98,886 --
Series B redeemable preferred stock (2,500 shares
authorized, $10.00 par value, no shares issued and
outstanding).......................................... -- --
Common stock (73,000,000 shares authorized, no par
value, 36,500,000 shares issued and outstanding)...... 395,428 395,428
Accumulated deficit.................................... (131,258) (102,689)
Unrealized gain on investments......................... 9,801 3,290
Cumulative translation adjustment...................... (3,470) --
---------- ----------
Total stockholders' equity........................ 369,387 296,029
---------- ----------
$1,626,758 $1,123,038
========== ==========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
<PAGE> 4
NEXTEL INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
1998 1997
---------- ----------
<S> <C> <C>
REVENUES
Radio service revenue.................................. $ 6,138 $ 1,180
Equipment sales and maintenance........................ 2,420 280
---------- ----------
8,558 1,460
---------- ----------
OPERATING EXPENSES
Cost of radio service revenue.......................... 2,499 593
Cost of equipment sales and maintenance................ 1,053 165
Selling, general and administrative.................... 15,227 4,051
Depreciation and amortization.......................... 9,192 2,581
---------- ----------
27,971 7,390
---------- ----------
OPERATING LOSS.............................................. (19,413) (5,930)
---------- ----------
OTHER INCOME (EXPENSE)
Interest income........................................ 4,324 2,798
Interest expense....................................... (18,968) (5,591)
Loss from equity method investments.................... (1,314) (1,867)
Other, net............................................. 1,198 (157)
Minority interest...................................... 1,230 437
---------- ----------
(13,530) (4,380)
---------- ----------
LOSS BEFORE INCOME TAX BENEFIT.............................. (32,943) (10,310)
INCOME TAX BENEFIT.......................................... 4,374 499
---------- ----------
NET LOSS.................................................... $ (28,569) $ (9,811)
---------- ----------
NET LOSS PER COMMON SHARE, BASIC AND DILUTED................ $ (0.78) $ (0.27)
========== ==========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING........ 36,500,000 36,500,000
========== ==========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
4
<PAGE> 5
NEXTEL INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 1998
(DOLLARS IN THOUSANDS)
UNAUDITED
<TABLE>
<CAPTION>
SERIES A SERIES B
PREFERRED STOCK PREFERRED STOCK COMMON STOCK
----------------- --------------- --------------------- ACCUMULATED
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT DEFICIT
------ -------- ------ ------ ---------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, January 1, 1998......... -- -- -- -- 36,500,000 $395,428 $(102,689)
Issuance of Series A
preferred stock........... 988.86 $98,886 -- -- -- -- --
Unrealized gain on
investments............... -- -- -- -- -- -- --
Cumulative translation
adjustment................ -- -- -- -- -- -- --
Net loss.................... -- -- -- -- -- -- (28,569)
------ ------- -- -- ---------- -------- ---------
BALANCE, March 31, 1998.......... 988.86 $98,886 36,500,000 $395,428 $(131,258)
====== ======= == == ========== ======== =========
<CAPTION>
ACCUMULATED OTHER
COMPREHENSIVE INCOME
-------------------------
UNREALIZED CUMULATIVE
GAIN ON TRANSLATION
INVESTMENTS ADJUSTMENT TOTAL
----------- ----------- --------
<S> <C> <C> <C>
BALANCE, January 1, 1998......... $3,290 -- $296,029
Issuance of Series A
preferred stock........... -- -- 98,886
Unrealized gain on
investments............... 6,511 -- 6,511
Cumulative translation
adjustment................ -- $(3,470) (3,470)
Net loss.................... -- -- (28,569)
------ ------- --------
BALANCE, March 31, 1998.......... $9,801 $(3,470) $369,387
====== ======= ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
5
<PAGE> 6
NEXTEL INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(DOLLARS IN THOUSANDS)
UNAUDITED
<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss............................................... $(28,569) $ (9,811)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization..................... 9,192 2,581
Interest accretion on long-term debt, net of
capitalization.................................. 17,256 4,849
Loss from equity method investments............... 1,314 1,867
Deferred income taxes............................. (8,549) (548)
Minority interest................................. (1,230) (437)
Change in current assets and liabilities:
Accounts receivable.......................... (847) 236
Subscriber equipment inventory............... (7,895) 243
Prepaid and other............................ (13,784) (2,149)
Accounts payable, accrued expenses and
other...................................... 9,743 399
Other........................................ (3,431) 2,299
-------- --------
Net cash used in operating activities.................. (26,800) (471)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures................................... (87,296) (6,193)
Purchase of marketable securities...................... (3,994) --
Proceeds from sale of marketable securities............ 126,018 --
Issuance of notes receivable........................... -- (2,144)
Business acquisitions, net of cash acquired............ (66,625) --
Investments in unconsolidated subsidiaries............. (37,774) (26,916)
Other.................................................. -- (2,498)
-------- --------
Net cash used in investing activities.................. (69,671) (37,751)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments to parent, net.............................. (8,254) (23,556)
Capital contributions from parent...................... -- 6,366
Capital contributions from minority stockholders....... 4,016 --
Proceeds from issuance of preferred stock.............. 8,254 --
Proceeds from issuance of warrants..................... -- 14,800
Net proceeds from issuance of long-term debt........... 396,772 467,578
Repayment of long-term debt............................ (727) --
-------- --------
Net cash provided by financing activities.............. 400,061 465,188
-------- --------
INCREASE IN CASH AND CASH EQUIVALENTS....................... 303,590 426,966
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD.............. 159,790 53,029
-------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD.................... $463,380 $479,995
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest................................. $ 1,008 $ --
======== ========
Cash paid for income taxes............................. $ 1,685 $ --
======== ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
6
<PAGE> 7
NEXTEL INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
UNAUDITED
NOTE 1 BASIS OF PRESENTATION
The condensed consolidated interim financial statements of Nextel
International, Inc. and subsidiaries ("Nextel International" or the "Company"),
an indirect wholly owned subsidiary of Nextel Communications, Inc. ("Nextel
Communications"), included herein have been prepared by the Company without
audit, pursuant to the rules and regulations of the Securities and Exchange
Commission (the "Commission") and reflect all adjustments that are, in the
opinion of management, necessary for a fair statement of the results for the
interim periods. All adjustments made were normal recurring accruals.
The interim financial statements should be read in conjunction with the
consolidated financial statements and notes thereto included in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1997.
Operating results for the interim periods are not necessarily indicative of
results for an entire year.
The accounts of the Company's consolidated foreign subsidiaries and foreign
subsidiaries accounted for under the equity method are presented utilizing
accounts as of a date one month earlier than the accounts of the Company and its
U.S. subsidiaries to ensure timely reporting of consolidated results.
Certain prior period amounts have been reclassified to conform with the
current presentation.
SUPPLEMENTAL CASH FLOW INFORMATION: In March 1998, a wholly owned
subsidiary of Nextel Communications transferred to the Company 6,777,778 Class D
Shares of Clearnet Communications Inc. ("Clearnet") with a fair value of $90.6
million in exchange for 906.32 shares of the Company's Series A Exchangeable
Redeemable Preferred Stock, $10 par value per share (the "Series A Preferred
Stock"). See Note 3.
RESTRICTED CASH AND CASH EQUIVALENTS: As of March 31, 1998, approximately
$104.5 million of cash and cash equivalents was restricted for use as equity
investments under certain of the Company's financing agreements and as equipment
purchases under certain infrastructure purchase contracts.
COMPREHENSIVE INCOME: Effective January 1, 1998, the Company adopted
Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive
Income," ("SFAS 130") that establishes new rules for the reporting and display
of comprehensive income and its components. Adoption of SFAS 130 requires
unrealized gains or losses on the Company's available-for-sale securities and
foreign currency translation adjustments be included in other comprehensive
income. The components of comprehensive income, net of related tax, are as
follows (dollars in thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-------------------
1998 1997
-------- --------
<S> <C> <C>
Net loss.................................................... $(28,569) $ (9,811)
Other comprehensive income:
Unrealized gain (loss) on investments, net of tax......... 6,511 (1,685)
Foreign currency translation adjustments.................. (3,470) --
-------- --------
$(25,528) $(11,496)
======== ========
</TABLE>
NOTE 2 SIGNIFICANT TRANSACTIONS
NEXTEL BRAZIL: On January 30, 1997, Nextel Communications purchased 81% of
the issued and outstanding capital stock of Wireless Ventures of Brazil, Inc.
("WVB") from Telcom Ventures, Inc. and affiliates (collectively "Telcom
Ventures") in exchange for $186.3 million in Nextel Communications Class A
7
<PAGE> 8
NEXTEL INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 2 SIGNIFICANT TRANSACTIONS -- (CONTINUED)
Common Stock. Nextel Communications' investment in WVB was simultaneously
contributed to the Company, and WVB changed its name to McCaw International
(Brazil), Ltd. ("Nextel Brazil").
MCS: On September 26, 1997, Nextel S.A., a subsidiary of Nextel Brazil
that is the indirect holder of substantially all of Nextel Brazil's specialized
mobile radio channels and related operating assets in Brazil, acquired 49% of
the capital stock of MCS Radio Telefonia, Ltda. ("MCS"), an indirect wholly
owned subsidiary of Motorola, Inc. ("Motorola"), an option to purchase the
remaining 51% of the capital stock of MCS upon receipt of the approval of the
applicable Brazilian regulatory authorities, and certain assets of MCS. Upon the
approval of the Brazilian regulatory authorities, the option for the remaining
51% will be exercisable for approximately $3.2 million. In exchange, Motorola,
through a wholly owned subsidiary, acquired 5% of the outstanding capital stock
of Nextel S.A. Immediately subsequent to the acquisition, the Company, through
its 81% equity interest in Nextel Brazil and Nextel Brazil's 95% equity interest
in Nextel S.A., held a 77% equity interest in Nextel S.A.
NEXTEL MEXICO: During the year ended December 31, 1997, through a series
of transactions, the Company increased its equity interest in Comunicaciones
Nextel de Mexico S.A., de C.V. ("Nextel Mexico") from 30.1% to 100% for
consideration equal to approximately $132.2 million.
NEXTEL ARGENTINA: On May 6, 1997, the Company contributed its 100%
ownership interest in Nextel Argentina S.R.L. ("Nextel Argentina") into Nextel
International (Argentina), Ltd. (the "Argentina Joint Venture"), a joint venture
between the Company and Wireless Ventures of Argentina, L.L.C. ("WVA"). WVA's
contribution included all of the outstanding common stock of a paging company
and two companies that own SMR licenses in Argentina (collectively the "WVA
Entities"). During 1997, Nextel Argentina and the WVA Entities were merged, with
Nextel Argentina being the surviving entity (the merged entities are herein
collectively referred to as "Nextel Argentina" subsequent to the formation of
the Argentina Joint Venture). The Company had a 50% voting interest, shared
equally in the profits and losses of the Argentina Joint Venture, and accounted
for its investment in the Argentina Joint Venture under the equity method of
accounting.
On January 30, 1998, the Company acquired the remaining 50% interest in the
Argentina Joint Venture from WVA for a purchase price of $46 million in cash. As
a result of the purchase, the Company increased its effective ownership interest
in Nextel Argentina from 50% to 100%. The acquisition is accounted for as a
purchase and, accordingly, the Company consolidated the accounts of Nextel
Argentina commencing February 1, 1998. The carrying value of the Company's
investment in Nextel Argentina as of January 30, 1998 approximated $63.0 million
and was allocated to the net assets acquired based on their preliminary
estimated fair values, including licenses and goodwill, which are being
amortized over their estimated useful lives of 20 years.
NEXTEL PERU: On January 29, 1998, the Company acquired a 70.1% interest in
Valorcom S.A. ("Nextel Peru"), a Peruvian wireless telecommunications company,
for $27.9 million, of which $7.2 million had been paid through March 31, 1998.
The remaining balance of $20.7 million is to be paid in the form of capital
contributions, which the Company expects will be made prior to July 30, 1998.
Nextel Peru, through its subsidiaries, holds licenses to operate 138 SMR
channels in the greater Lima area. Motorola, through an indirect wholly owned
subsidiary, holds a 19.9% interest in Nextel Peru. The acquisition is accounted
for as a purchase and, accordingly, the Company consolidated the accounts of
Nextel Peru commencing February 1, 1998. The purchase price was allocated to the
net assets acquired based on their preliminary estimated fair values, including
licenses and goodwill, which are being amortized over their estimated useful
lives of 20 years. Nextel Peru's historical operations are insignificant
relative to the results of the Company.
8
<PAGE> 9
NEXTEL INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 2 SIGNIFICANT TRANSACTIONS -- (CONTINUED)
NEXTEL PHILIPPINES: In February 1998, the Company reached an agreement in
principle with the three groups of local shareholders of Infocom Communications
Network, Inc. ("Nextel Philippines"), including the Gotesco group (the "Gotesco
Group" and together with the other local shareholders, the "Philippines
Shareholders"), and consummated such agreements in April 1998 (the "Philippines
Partner Agreements"). Pursuant to the Philippines Partner Agreements (i) the
Nextel Philippines corporate governance arrangements were restructured to give
the Company increased minority shareholder rights; (ii) the Company purchased
existing shareholder loans of the Philippines Shareholders totaling
approximately $19.6 million, which loans, bear interest at 18% per annum and are
convertible into equity of Nextel Philippines; (iii) the Company may, at its
option, fund Nextel Philippines' future capital needs, currently estimated to be
$50 million for 1998, pursuant to loans that, at the option of the Company, may
be converted into equity of Nextel Philippines; (iv) the Gotesco Group has the
right to put its 20% interest to the Company for approximately $9.4 million,
beginning in January 1999 (the "Gotesco Put"); and (v) the Company has the right
to call the Gotesco Group's 20% interest for approximately $11.6 million, if the
Gotesco Group does not exercise the Gotesco Put. The ability of the Company to
convert shareholders loans into equity, satisfy the Gotesco Put or call the
Gotesco Group's 20% interest is subject to applicable Philippines foreign
ownership rules.
J-COM: On March 17, 1998, the Company purchased a 21% equity interest in
J-Com Co., Ltd., a digital SMR provider in Japan ("J-Com"), for a purchase price
of Y77.2 million (approximately $593,000) (the "Japan Acquisition"). The Company
also provided a shareholder loan of Y4.1 billion (approximately $31.5 million)
to J-Com. J-Com has a contractual right to provide service in Japan under a
sublicense covering more than 125 million people. DJSMR Business Partnership, a
Japanese partnership in which an affiliate of Motorola is the majority partner,
holds a 49% equity interest in J-Com. J-Com's historical operations are
insignificant relative to the results of the Company. The Company's investment
in J-Com is accounted for under the equity method.
PRO FORMA INFORMATION: The following summarized pro forma (unaudited)
information assumes the Nextel Brazil, MCS, Nextel Mexico and Nextel Argentina
transactions had occurred on January 1, 1997 (dollars in thousands, except for
share data).
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31,
1997
------------
<S> <C>
Revenues.................................................... $ 5,880
==========
Net loss.................................................... $ (15,090)
==========
Net loss per share.......................................... $ (0.41)
==========
Weighted average shares outstanding......................... 36,500,000
==========
</TABLE>
The above amounts consolidate the historical results of Nextel Brazil, MCS,
Nextel Mexico and Nextel Argentina prior to the acquisitions and reflect
adjustments for the recognition of the minority ownership interests and the
amortization of licenses and goodwill. Pro forma information for the three
months ended March 31, 1998 does not differ materially from historical results.
The pro forma information is not necessarily indicative of the results that
would actually have occurred had the transactions been consummated on the date
indicated, nor is it necessarily indicative of future operating results of the
Company.
9
<PAGE> 10
NEXTEL INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 2 SIGNIFICANT TRANSACTIONS -- (CONTINUED)
NOTE 3 FINANCING ARRANGEMENTS
MARCH 1998 OFFERING: On March 12, 1998, the Company completed a private
placement offering (the "March 1998 Offering") of its 12 1/8% Senior Discount
Notes due 2008 (the "March 1998 Notes"). The March 1998 Offering generated
aggregate net proceeds to the Company of approximately $387 million. The March
1998 Notes are noncallable for five years and require no cash interest payments
for the first five years.
ISSUANCE OF PREFERRED STOCK: On March 12, 1998, in connection with the
March 1998 Offering, a wholly owned subsidiary of Nextel Communications
transferred to the Company 6,777,778 Class D Shares of Clearnet in exchange for
906.32 shares of the Company's Series A Preferred Stock. As a result of such
transaction (the "Clearnet Transaction"), the Company currently owns 583,104
Class A Shares and 7,790,741 Class D Shares of Clearnet (each Class D Share is
convertible at the option of the holder into one Class A Share). Additionally,
the Company issued 82.54 shares of Series A Preferred Stock to a wholly owned
subsidiary of Nextel Communications for consideration of $8,254,000.
The Series A Preferred Stock was issued at an original liquidation
preference of $100,000 per share and thereafter the liquidation preference on
the Series A Preferred Stock accretes at an annual rate equal to 13.625%. At
March 31, 1998, the accreted liquidation preference on the Series A Preferred
Stock totaled $99,597,000. Except as required by law, the holders of the Series
A Preferred Stock are not entitled to receive dividends or other distributions.
The Company has the right at any time to redeem the Series A Preferred Stock in
full (or with the consent of the holder of the affected shares of Series A
Preferred Stock, in part) at a redemption price equal to 100% of the accreted
liquidation preference thereof on the redemption date and under certain
circumstances, the holders of the Series A Preferred Stock have the right to
exchange the Series A Preferred Stock for shares of the Company's Series B
Redeemable Preferred Stock, par value $10.00 per share (the "Series B Preferred
Stock"), having a liquidation preference equal to the accreted liquidation
preference of the Series A Preferred Stock so exchanged.
The Series B Preferred Stock to be issued in exchange for shares of Series
A Preferred Stock will have an initial annual dividend rate equal to 13.625%,
increasing to 18.00% as of March 13, 2010. The Series B Preferred Stock will
have terms substantially similar to those of the Series A Preferred Stock,
except for the right to elect one director to the Company's Board of Directors
and the accrual of cumulative dividends payable quarterly in cash. In addition,
the Company may not issue shares of Series B Preferred Stock, except in exchange
for shares of Series A Preferred Stock, without the consent of the holders of a
majority of the outstanding shares of Series A Preferred Stock and Series B
Preferred Stock, voting together as a class.
ARGENTINA CREDIT FACILITY: As of February 27, 1998, Nextel Argentina
entered into an $83 million senior secured credit facility (the "Argentina
Credit Facility") with The Chase Manhattan Bank. Borrowings under the Argentina
Credit Facility are subject to finalizing certain security arrangements as well
as the satisfaction or waiver of certain other conditions. Loans under the
Argentina Credit Facility will bear interest at a rate equal to either (i) the
ABR plus 2.75% (ABR is the highest of the prime rate, the base CD rate plus 1%
and the federal funds rate plus 0.5%) or (ii) the Eurodollar rate plus 3.75%
(the Eurodollar rate is the LIBO rate multiplied by the statutory reserve rate).
The loans under the Argentina Credit Facility will be repaid in quarterly
installments beginning September 30, 2000 and ending March 31, 2003. As of March
31, 1998, no amounts had been borrowed under the Argentina Credit Facility.
10
<PAGE> 11
<PAGE> 12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
OVERVIEW
The following discussion of the condensed consolidated financial condition
and results of operations of Nextel International, Inc. ("Nextel International"
or the "Company"), an indirectly wholly owned subsidiary of Nextel
Communications, Inc. ("Nextel Communications"), for the three-month periods
ended March 31, 1998 and 1997 should be read in conjunction with the Company's
condensed consolidated financial statements and notes thereto appearing
elsewhere in Part I of this report and the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1997 ("1997 Form 10-K").
Nextel International, through its operating subsidiaries, provides wireless
communications services in five of the largest cities in Latin America and three
of the largest cities in Asia. The Company's markets cover approximately 373
million people, approximately 131 million of which are in Latin America. Nextel
International is the largest specialized mobile radio ("SMR") service provider
in Brazil and Mexico, and holds the largest SMR channel position in Argentina.
The Company's strategy is focused on using its leading analog dispatch or
SMR channel positions in its principal markets, together with Nextel
Communications' experience and supplier relationships, to upgrade its services
from analog dispatch to digital enhanced specialized mobile radio ("ESMR")
services. The Company intends to use digital "iDEN(TM)" (integrated Digital
Enhanced Network) technology developed by Motorola, Inc. ("Motorola") to provide
its ESMR services. The Company currently plans to launch ESMR commercial service
in Sao Paulo, Buenos Aires and Rio de Janeiro during the second quarter of 1998
and Mexico City and Manila during the third quarter of 1998. The timing of the
Company's currently planned launch schedule depends on a number of factors, some
of which are beyond the Company's control. See 1997 Form 10-K, Part I, Item 1,
"The Company's Operations and Investments."
The Company owns majority controlling interests in wireless communications
services companies in Brazil, Mexico, Argentina and Peru and owns equity
interests and actively participates in the management of wireless communications
services companies in the Philippines and Japan. In addition, the Company owns
an approximately 15% equity interest in Clearnet Communications Inc., a Canadian
wireless communications services company ("Clearnet"), and has a contractual
right through its Chinese joint venture to receive 12.1% of the profits
generated by a Global System for Mobile communications ("GSM") network in
Shanghai, China (the "Shanghai GSM System"). The wireless communications
services companies that the Company owns or has interests in and the right to
receive profits in the Shanghai GSM System are referred to herein as the
"Operating Companies." The Company does not actively participate in the
management or in formulation of the business plans or policies of Clearnet or
the Shanghai GSM System and considers them passive investments.
FISCAL QUARTER TRANSACTIONS AND DEVELOPMENTS
ARGENTINA. On January 30, 1998, the Company acquired the remaining 50%
equity interest in the holding company for Nextel Argentina S.R.L. ("Nextel
Argentina," formerly McCaw Argentina S.A.) for $46 million (the "Argentina
Acquisition").
ARGENTINA CREDIT FACILITY. As of February 27, 1998, Nextel Argentina
entered into an $83 million senior secured credit facility (the "Argentina
Credit Facility") with The Chase Manhattan Bank. Borrowings under the Argentina
Credit Facility are subject to finalizing certain security arrangements as well
as the satisfaction or waiver of certain other conditions. Loans under the
Argentina Credit Facility will bear interest at a rate equal to either (i) the
ABR plus 2.75% (ABR is the highest of the prime rate, the base CD rate plus 1%
and the federal funds rate plus 0.5%) or (ii) the Eurodollar rate plus 3.75%
(the Eurodollar rate is the LIBO rate multiplied by the statutory reserve rate).
The loans under the Argentina Credit Facility will be repaid in quarterly
installments beginning September 30, 2000 and ending March 31, 2003.
PERU. On January 29, 1998, the Company purchased 70.1% of the common
equity of Valorcom S.A., a Peruvian company ("Nextel Peru"), for $27.9 million
(the "Peru Acquisition"), $23.8 million of which will represent new capital to
be contributed to Nextel Peru to finance the expansion, upgrade and operation of
its
11
<PAGE> 13
wireless services business. As of March 31, 1998, the Company had paid $7.2
million to Nextel Peru, and the remaining $20.7 million will be paid in the form
of capital contributions, which the Company expects will be made prior to July
30, 1998. Nextel Peru, through its subsidiaries, currently offers analog SMR
services in the greater Lima area, and holds licenses covering 138 SMR channels.
Nextel Peru currently plans to upgrade its SMR network and offer ESMR services
in the greater Lima area in 1999.
PHILIPPINES. In February 1998, the Company reached an agreement in
principle with the three groups of local shareholders of Infocom Communications
Network, Inc. ("Nextel Philippines"), including the Gotesco group (the "Gotesco
Group" and together with the other local shareholders, the "Philippines
Shareholders"), and consummated such agreements in April 1998 (the "Philippines
Partner Agreements"). Pursuant to the Philippines Partner Agreements (i) the
Nextel Philippines corporate governance arrangements were restructured to give
the Company increased minority shareholder rights; (ii) the Company purchased
existing shareholder loans of the Philippines Shareholders totaling
approximately $19.6 million, which loans, bear interest at 18% per annum and are
convertible into equity of Nextel Philippines; (iii) the Company may, at its
option, fund Nextel Philippines' future capital needs, currently estimated to be
$50 million for 1998, pursuant to loans that, at the option of the Company, may
be converted into equity of Nextel Philippines; (iv) the Gotesco Group has the
right to put its 20% interest to the Company for approximately $9.4 million,
beginning in January 1999 (the "Gotesco Put"); and (v) the Company has the right
to call the Gotesco Group's 20% interest for approximately $11.6 million, if the
Gotesco Group does not exercise the Gotesco Put. The ability of the Company to
convert shareholders loans into equity, satisfy the Gotesco Put or call the
Gotesco Group's 20% interest is subject to applicable Philippines foreign
ownership rules.
MARCH 1998 OFFERING. On March 12, 1998, the Company completed a private
placement offering (the "March 1998 Offering") of its 12 1/8% Senior Discount
Notes due 2008 (the "March 1998 Notes"). The March 1998 Offering generated
aggregate net proceeds to the Company of approximately $387 million. The March
1998 Notes are noncallable for five years and require no cash interest payments
for the first five years. The March 1998 Offering is part of the Company's
financing plan designed to meet expected funding requirements that are estimated
to total approximately $810 million during fiscal year 1998 (the "1998 Plan").
See 1997 Form 10-K, Part I, Item 1, "Business -- 1998 Plan" and 1997 Form 10-K,
Part II, Item 7, "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Liquidity and Capital Resources."
The March 1998 Notes were sold pursuant to an exemption from registration
under the Securities Act of 1933, as amended (the "Securities Act"). The March
1998 Notes, therefore, are not registered under the Securities Act and may not
be offered or sold in the United States absent registration or an applicable
exemption from such registration requirements. In connection with the issuance
of the March 1998 Notes, the Company agreed to use its best efforts to
consummate an exchange offer (the "Exchange Offer") pursuant to which the March
1998 Notes would be exchanged for substantially identical securities (the
"Exchange Notes") issued pursuant to an effective registration statement or to
cause resales of the March 1998 Notes to be registered under the Securities Act
pursuant to an effective shelf registration statement. If one of such events
does not occur on or prior to September 12, 1998, the per annum interest rate on
the March 1998 Notes will increase by 0.5%, which will be payable in cash on
each interest payment date, until (i) the date that the Exchange Offer is
consummated, (ii) such time as the Company causes a shelf registration statement
with respect to resales of the March 1998 Notes to become effective under the
Securities Act or (iii) the date that the March 1998 Notes become freely
tradeable without registration under the Securities Act, at which time, in any
such case, the per annum interest rate with respect to the March 1998 Notes
shall return to 12 1/8%.
ISSUANCE OF PREFERRED STOCK. On March 12, 1998, in connection with the
March 1998 Offering, a wholly owned subsidiary of Nextel Communications
transferred to the Company 6,777,778 Class D Shares of Clearnet in exchange for
906.32 shares of the Company's Series A Exchangeable Redeemable Preferred Stock,
par value $10.00 per share (the "Series A Preferred Stock"). As a result of such
transaction (the "Clearnet Transaction"), the Company currently owns 583,104
Class A Shares and 7,790,741 Class D Shares of Clearnet (each Class D Share is
convertible at the option of the holder into one Class A Share). Additionally,
the Company issued 82.54 shares Series A Preferred Stock to a wholly owned
subsidiary of Nextel Communications for consideration of $8,254,000.
12
<PAGE> 14
The Series A Preferred Stock was issued at an original liquidation
preference of $100,000 per share and thereafter the liquidation preference on
the Series A Preferred Stock accretes at an annual rate equal to 13.625%. Except
as required by law, the holders of the Series A Preferred Stock are not entitled
to receive dividends or other distributions. The Company has the right at any
time to redeem the Series A Preferred Stock in full (or with the consent of the
holder of the affected shares of Series A Preferred Stock, in part) at a
redemption price equal to 100% of the accreted liquidation preference thereof on
the redemption date and under certain circumstances, the holders of the Series A
Preferred Stock have the right to exchange the Series A Preferred Stock for
shares of the Company's Series B Redeemable Preferred Stock, par value $10.00
per share (the "Series B Preferred Stock") having a liquidation preference equal
to the accreted liquidation preference of the Series A Preferred Stock so
exchanged.
The Series B Preferred Stock to be issued in exchange for shares of Series
A Preferred Stock will have an initial annual dividend rate equal to 13.625%,
increasing to 18.00% as of March 13, 2010. The Series B Preferred Stock will
have terms substantially similar to those of the Series A Preferred Stock,
except for the right to elect one director to the Company's Board of Directors
and the accrual of cumulative dividends payable quarterly in cash. In addition,
the Company may not issue shares of Series B Preferred Stock, except in exchange
for shares of Series A Preferred Stock, without the consent of the holders of a
majority of the outstanding shares of Series A Preferred Stock and Series B
Preferred Stock, voting together as a class.
JAPAN. On March 17, 1998, the Company purchased a 21% equity interest in
J-Com Co., Ltd., a digital SMR provider in Japan ("J-Com"), for a purchase price
of Y77.2 million (approximately $593,000) (the "Japan Acquisition"). The Company
also provided a shareholder loan of Y4.1 billion (approximately $31.5 million)
to J-Com. J-Com has a contractual right to provide service in Japan under a
sublicense covering more than 125 million people. DJSMR Business Partnership, a
Japanese partnership in which an affiliate of Motorola is the majority partner,
holds a 49% equity interest in J-Com. The remaining equity interests in J-Com
are held by Nichimen Corporation, an investment firm (which holds a 25% equity
interest), and ORIX Corporation, a leasing firm (which holds a 5% equity
interest).
RESULTS OF OPERATIONS
Three Months Ended March 31, 1998 vs. Three Months Ended March 31, 1997
Revenues increased $7.1 million to $8.6 million for the three months ended
March 31, 1998 from $1.5 million for the three months ended March 31, 1997.
Costs and expenses related to revenues increased $2.8 million to $3.6 million
for the three months ended March 31, 1998, compared to $0.8 million for the
three months ended March 31, 1997. The increases were primarily attributable to
the acquisition of majority interests in Comunicaciones Nextel de Mexico, S.A.
de C.V. ("Nextel Mexico"), MCS Radio Telefonia, Ltd. ("MCS"), and Nextel
Argentina S.R.L. ("Nextel Argentina") in August 1997, September 1997 and January
1998, respectively (collectively, the "Purchase Transactions"). Subsequent to
the Purchase Transactions, the results of Nextel Mexico, MCS and Nextel
Argentina are being included in the Company's consolidated financial statements.
For the three months ended March 31, 1997, substantially all of the revenues and
costs and expenses related to revenues result from the two months of SMR
operations of McCaw International (Brazil), Ltd. ("Nextel Brazil") included in
the Company's consolidated financial statements.
Selling, general and administrative expenses increased $11.1 million to
$15.2 million for the three months ended March 31, 1998, compared to $4.1
million for the three months ended March 31, 1997. The increase is primarily
attributable to the effect of the Purchase Transactions as well as increased
costs at Nextel Brazil necessary to support the launch of ESMR commercial
service, including sales, marketing and administrative support costs.
Depreciation and amortization expense increased $6.6 million to $9.2
million for the three months ended March 31, 1998, compared to $2.6 million for
the three months ended March 31, 1997. The increase is primarily attributable to
the effect of the Purchase Transactions.
Interest income increased $1.5 million to $4.3 million for the three months
ended March 31, 1998, compared to $2.8 million for the three months ended March
31, 1997. The increase was primarily attributable
13
<PAGE> 15
to income recognized on the investment of the then-remaining net proceeds from
the Company's offering and issuance in March 1997 of units consisting of senior
discount notes due 2007 (the "March 1997 Notes") and detachable warrants to
purchase up to 1% of the Company's outstanding common stock (the "March 1997
Offering"). See "-- Liquidity and Capital Resources."
Interest expense increased $13.4 million to $19.0 million for the three
months ended March 31, 1998, compared to $5.6 million for the three months ended
March 31, 1997. The increase is primarily attributable to interest expense
associated with the March 1997 Notes.
Loss from equity method investments decreased $0.6 million to $1.3 million
for the three months ended March 31, 1998, compared to $1.9 million for the
three months ended March 31, 1997. The decrease was primarily attributable to
the effect of the Purchase Transactions. As of March 31, 1998, the only
Operating Companies being accounted for under the equity method are Nextel
Philippines and J-Com.
Other income totaling $1.2 million for the three months ended March 31,
1998 is primarily comprised of foreign currency transaction gains in Mexico
partially offset by foreign currency transaction losses in Brazil.
Minority interest increased $0.8 million to $1.2 million for the three
months ended March 31, 1998, compared to $0.4 million for the three months ended
March 31, 1997. The increase is primarily attributable to the increase in both
the net loss and minority ownership interest of Nextel Brazil.
Income tax benefit increased $3.9 million to $4.4 million for the three
months ended March 31, 1998, compared to $0.5 million for the three months ended
March 31, 1997. The increase is primarily attributable to the effect of the
Purchase Transactions as well as increased tax net operating losses in Brazil.
LIQUIDITY AND CAPITAL RESOURCES
The Company has incurred historical net losses of approximately $131.3
million from inception through March 31, 1998. These losses resulted from
operating expenses required to support the development of the Company's wireless
communications networks, other start-up costs and the fact that through March
31, 1998 only $21.6 million of consolidated revenues had been recorded. The
Company expects to continue to incur increasing losses and negative operating
cash flows as it continues to build out and upgrade its existing wireless
communications networks.
Through March 31, 1998, funds necessary to finance the Company's activities
have been provided to the Company primarily by its parent, which is an
unrestricted subsidiary of Nextel Communications, in the form of equity
contributions and from the net proceeds of the March 1997 Offering and the March
1998 Offering and to a lesser extent from vendor financing, including the
existing secured equipment financing facilities obtained from Motorola. Nextel
Communications is not obligated to provide any additional funding to the
Company.
Net cash used by operating activities for the three months ended March 31,
1998 was approximately $26.8 million. Net cash used by investing activities for
the three months ended March 31, 1998 was approximately $69.7 million. Net cash
provided by financing activities for the three months ended March 31, 1998 was
approximately $400.1 million. Working capital as of March 31, 1998 increased to
$441.8 million compared to $223.3 million at December 31, 1997. The cash used by
investing activities primarily represented investments in the Operating
Companies to fund the build-out of the Company's ESMR networks, to fund the
Company's initial investment in Nextel Peru and J-Com and to acquire the
remaining 50% interest in Nextel Argentina. The cash provided by financing
activities and the increase in working capital are primarily a result of the
Company receiving approximately $387 million of net proceeds from the March 1998
Offering. As a result of the above activities, cash and cash equivalents
increased approximately $303.6 million during the three months ended March 31,
1998.
As described in the 1997 Form 10-K, the Company currently estimates its
funding requirements for fiscal year 1998 to be approximately $810 million.
These amounts consist primarily of the purchase of switches and other equipment,
the acquisition of cell sites, the cost of constructing the network, loading
subscribers, the acquisition of licenses and investments and funding of
operating losses. The Company currently estimates that
14
<PAGE> 16
approximately $227 million of such requirements will be related to expenditures
in Brazil, $161 million in Argentina, $152 million in Mexico, $29 million in
Peru and $74 million in the Philippines. See 1997 Form 10-K, Part I, Item 1,
"Business -- 1998 Plan."
In November 1996, Nextel Communications, the Company and Motorola entered
into a binding memorandum of understanding regarding the provision of equipment
financing by Motorola, including the Motorola Financings (the "Motorola MOU").
In June 1997 and October 1997, pursuant to the Motorola MOU, the Company and
Motorola entered into definitive agreements for financing the purchase of up to
$14.7 million and $125 million of equipment and related services by Nextel
Philippines (the "Philippines Motorola Financing") and Nextel Brazil (the
"Brazil Motorola Financing"), respectively. The existing secured equipment
financing facilities obtained from Motorola under the Motorola MOU and any
additional financing arrangements obtained from Motorola under the Motorola MOU
are referred to herein collectively as the "Motorola Financings." The terms and
conditions of the Motorola MOU, the Philippines Motorola Financing and the
Brazil Motorola Financing are described in the 1997 Form 10-K.
As of March 31, 1998, all of the $14.7 million available under the
Philippine Motorola Financing had been borrowed and approximately $58.6 million
had been borrowed under the Brazil Motorola Financing, with the remaining $66.4
million available for future borrowings. As of March 31, 1998, $83 million of
the Argentina Credit Facility was available for future borrowing.
The Company believes that the net proceeds from the March 1998 Offering,
together with available cash, cash equivalents and marketable securities and
borrowings expected to be available under the existing Motorola Financings and
the Argentina Credit Facility, will be sufficient to fund the Company's current
operations, including the planned expansion of its existing operations but
excluding any optional additional funding of Nextel Philippines' capital needs
by the Company pursuant to the Philippines Partner Agreements, during fiscal
year 1998; however, there can be no assurance that such funds will be
sufficient. If, among other things, the Company's plans change, its assumptions
regarding its funding needs associated with the further build-out, expansion and
enhancement of its ESMR network at the Operating Company level prove to be
inaccurate, the other shareholders in certain of the Operating Companies do not
fund their expected capital requirements, it consummates acquisitions or
investments in addition to those currently contemplated or at higher prices than
currently contemplated, it increases its existing equity ownership interests in
certain of the Operating Companies beyond those currently contemplated
increases, it experiences growth in its business or subscriber base greater than
that which was anticipated in developing the 1998 Plan, it experiences
unanticipated costs or competitive pressures, the Operating Companies are unable
to access funds under the existing Motorola Financings and/or the Argentina
Credit Facility, or the net proceeds from the March 1998 Offering together with
any other funds available to the Company and the Operating Companies or any
other borrowings otherwise prove to be insufficient to meet cash needs through
1998, the Company may be required to seek additional capital sooner than
currently anticipated. The availability of borrowings under the existing
Motorola Financings and under the Argentina Credit Facility are subject to the
satisfaction or waiver of certain conditions. The Company will also require
significant additional capital in years subsequent to 1998 to fund the further
build-out, expansion and enhancement of its ESMR networks, to fund operating
losses and for other purposes. To the extent the Company's then existing
financing sources are insufficient to meet such needs, the Company may seek to
raise such additional capital from public or private equity or debt sources.
There can be no assurance that the Company will be able to raise such capital on
satisfactory terms, if at all. Additionally, the Company and the certain of the
Operating Companies may incur indebtedness only in compliance with the terms of
covenants contained in the indentures governing the March 1997 Notes and the
March 1998 Notes. See "-- Forward-Looking Statements."
In the future, the Company may consider obtaining financing from various
sources, including vendor financing provided by equipment suppliers (including
the Motorola Financings), project financing from commercial banks and
international agencies such as International Finance Corporation and Overseas
Private Investment Corporation, bank lines of credit and sales of equity and
debt issued by the Operating Companies and/or the Company. To the extent the
Company issues debt, its leverage and debt service obligations will increase.
There can be no assurance that the Company will be able to raise such capital on
satisfactory terms, if at all.
15
<PAGE> 17
The Company owns 100% of Nextel Mexico and Nextel Argentina, 81% of Nextel
Brazil (or approximately 77% of Nextel S.A.) and 70.1% of Nextel Peru. The
Company's other assets consist of minority ownership interests in Nextel
Philippines and J-Com, passive minority investment stakes in the Shanghai GSM
System and Clearnet and as of March 31, 1998, cash, cash equivalents and
marketable securities of approximately $468.6 million consisting primarily of
net cash proceeds remaining from the March 1997 Offering and the March 1998
Offering. Even though the Company participates in the management of the
Operating Companies (except in Shanghai and Canada) and has certain contractual
rights designed to protect its interests as a minority shareholder, it cannot
control the outcome of matters submitted to the shareholders of the Operating
Companies in which it has less than a majority interest. In addition, the
Company may be unable to access the cash flow of its affiliated companies
because (i) it does not have the requisite control to cause such entities to pay
dividends and (ii) substantially all of such entities are parties to or expected
to become parties to vendor financing or other borrowing agreements that
severely restrict the payment of dividends, and such entities are likely to
continue to be subject to such restrictions and prohibitions for the foreseeable
future. The existing Motorola Financings and the Argentina Credit Facility
restrict the payment of dividends to the Company by the Operating Companies that
have debt outstanding thereunder. Any future vendor or bank financings are
likely to include similar covenants restricting the payment of dividends. See
1997 Form 10-K, Part I, Item 1, "Business -- Risk Factors -- Substantial
Indebtedness; Ability to Service Debt; Refinancing Risks."
FORWARD-LOOKING STATEMENTS
"SAFE HARBOR" STATEMENTS UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995. A number of the matters and subject areas discussed in the foregoing
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" that are not historical or current facts deal with potential future
circumstances and developments. The discussion of such matters and subject areas
is qualified by the inherent risks and uncertainties surrounding future
expectations generally, and also may differ materially from the Company's actual
future experience involving any one or more of such matters and subject areas.
The Company has attempted to identify, in context, certain of the factors that
it currently believes may cause actual future experience and results to differ
from the Company's current expectations regarding the relevant matter or subject
area. The operations and results of the Company's business also may be subject
to the effect of other risks and uncertainties in addition to the relevant
qualifying factors identified in the 1997 Form 10-K, Part I, Item 1,
"Business -- Risk Factors," including, but not limited to, general economic
conditions in Latin America and Asia, as a result of the recent Asian economic
crisis, the market segments that the Company is targeting for SMR and ESMR
commercial services, future legislation or regulation by governmental entities
in the markets in which the Operating Companies conduct their business, the
availability of adequate quantities of system infrastructure and subscriber
equipment and components to meet the Company's service and deployment and
marketing plans and customer demand, access to sufficient debt and equity
financing to meet the Company's operating and financial needs, the successful
deployment of the iDEN technology, the ability to achieve market penetration and
average subscriber revenue levels sufficient to provide financial viability to
the Company's wireless communications business, the Company's ability to
accomplish required scale-up of its billing, customer care and similar
administrative support timely and successfully to keep pace with anticipated
customer growth and increased system usage, the quality and price of similar or
comparable wireless communications services offered or to be offered by the
Company's competitors, including providers of cellular and personal
communications services, other wireless communications services or
telecommunications generally and other risks and uncertainties described from
time to time in the Company's reports filed with the Securities and Exchange
Commission.
16
<PAGE> 18
PART II
ITEM 1. LEGAL PROCEEDINGS.
The Company is not currently involved in any material legal proceedings.
ITEM 2. CHANGES IN SECURITIES.
(a) Not applicable.
(b) Not applicable.
(c) Recent sales of unregistered equity securities. The Company effected
the following sales of equity securities that were not registered under
the Securities Act during the fiscal quarter ended March 31, 1998.
(i) On March 12, 1998, in connection with the March 1998 Offering, the
Company sold (A) 906.32 shares of its Series A Preferred Stock in
exchange for 6,777,778 Class D Shares of Clearnet and (B) 82.54
shares of its Series A Preferred Stock in exchange for $8,254,000.
Each of the foregoing transactions was effected pursuant to the
exemption from registration under Section 4(2) of the Securities
Act.
(d) Not applicable.
ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The following matters were submitted to a vote and approved by the
Company's sole shareholder during the quarter ended March 31, 1998:
(a) On January 5, 1998, by written consent in lieu of a special
meeting of shareholders, the Company's sole shareholder approved the
Company's 1997 Stock Option Plan.
(b) On January 30, 1998, by written consent in lieu of an annual
meeting of shareholders, the Company's sole shareholder reelected all of
the Company's incumbent directors.
(c) On March 11, 1998, by written consent in lieu of a special meeting
of shareholders, the Company's sole shareholder approved an amendment to
the Company's articles of incorporation to (i) increase the authorized
share capital of the Company from 73,000,000 to 73,003,750 shares, divided
into three classes of stock, and (ii) create the Company's Series A
Preferred Stock and Series B Preferred Stock.
17
<PAGE> 19
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) List of Exhibits.
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT DESCRIPTION
- ----------- -------------------
<S> <C>
3.1 Restated Articles of Incorporation of the Company (filed on
March 31, 1998 with the 1997 Form 10-K and incorporated
herein by reference).
4.1 Indenture, dated as of March 12, 1998, between the Company
and the Bank of New York.
4.2 Form of Note (included in Exhibit 4.1).
4.3 Registration Rights Agreement, dated March 9, 1998, between
the Company and the Placement Agents named therein.
10.1 Credit Agreement, dated as of February 27, 1998, among
Nextel Argentina S.R.L., the Lenders named therein and The
Chase Manhattan Bank as Administrative Agent.
10.2 Stock Purchase Agreement, dated as of January 29, 1998 by
and among Nextel International (Peru), LLC, Motorola
International Development Corporation, Oscar Benalcazar Coz,
the Company and Valorcom S.A.
10.3 Shareholders Agreement, dated as of January 29, 1998, by and
among Valorcom S.A., Nextel International (Peru), LLC,
Motorola International Development Corporation and Oscar
Benalcazar Coz.
10.4 Share Purchase Agreement, dated as of January 7, 1998 by and
among the Company, Nextel International (Delaware), Ltd.,
Nextel International (Holdings), Ltd., Telcom Ventures, LLC,
Wireless Ventures of Argentina, L.L.C. and Nextel
International (Argentina), Ltd.
10.5 Stock Purchase Agreement, dated as of March 17, 1998 by and
among Nextel International (Japan), Ltd., Nippon Motorola
Ltd. and J-Com Co., Ltd.
10.6 Credit Agreement, dated as of March 17, 1998, between J-Com
Co., Ltd. and Nextel International (Japan), Ltd.
10.7 Memorandum, dated as of March 17, 1998, among J-Com Co.,
Ltd. and the shareholders named therein.
27* Financial Data Schedule.
</TABLE>
- ---------------
* Submitted only with the electronic filing of this document with the Commission
pursuant to Regulation S-T under the Securities Act.
(b) Reports on Form 8-K.
The Company filed the following Current Reports on Form 8-K during the
quarter ended March 31, 1998:
(i) Current Report on Form 8-K, dated and filed with the Commission on
March 2, 1998, reporting certain recent events and developments
and financial results for the fiscal year ended December 31, 1997.
(ii) Current Report on Form 8-K, dated and filed with the Commission
on March 17, 1998, reporting the consummation of the March 1998
Offering.
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<PAGE> 20
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.
NEXTEL INTERNATIONAL, INC.
BY: /s/ DAVID E. ROSTOV
------------------------------------
David E. Rostov
Vice President and
Chief Financial Officer
May 14, 1998
19
<PAGE> 21
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT DESCRIPTION
- ----------- -------------------
<C> <S>
3.1 Restated Articles of Incorporation of the Company (filed on
March 31, 1998 with the 1997 Form 10-K and incorporated
herein by reference).
4.1 Indenture, dated as of March 12, 1998, between the Company
and the Bank of New York.
4.2 Form of Note (included in Exhibit 4.1).
4.3 Registration Rights Agreement, dated March 9, 1998, between
the Company and the Placement Agents named therein.
10.1 Credit Agreement, dated as of February 27, 1998, among
Nextel Argentina S.R.L., the Lenders named therein and The
Chase Manhattan Bank as Administrative Agent.
10.2 Stock Purchase Agreement, dated as of January 29, 1998 by
and among Nextel International (Peru), LLC, Motorola
International Development Corporation, Oscar Benalcazar Coz,
the Company and Valorcom S.A.
10.3 Shareholders Agreement, dated as of January 29, 1998, by and
among Valorcom S.A., Nextel International (Peru), LLC,
Motorola International Development Corporation and Oscar
Benalcazar Coz.
10.4 Share Purchase Agreement, dated as of January 7, 1998 by and
among the Company, Nextel International (Delaware), Ltd.,
Nextel International (Holdings), Ltd., Telcom Ventures, LLC,
Wireless Ventures of Argentina, L.L.C. and Nextel
International (Argentina), Ltd.
10.5 Stock Purchase Agreement, dated as of March 17, 1998 by and
among Nextel International (Japan), Ltd., Nippon Motorola
Ltd. and J-Com Co., Ltd.
10.6 Credit Agreement, dated as of March 17, 1998, between J-Com
Co., Ltd. and Nextel International (Japan), Ltd.
10.7 Memorandum, dated as of March 17, 1998, among J-Com Co.,
Ltd. and the shareholders named therein.
27* Financial Data Schedule.
</TABLE>
- ---------------
* Submitted only with the electronic filing of this document with the Commission
pursuant to Regulation S-T under the Securities Act of 1933, as amended.
20
<PAGE> 1
EXHIBIT 4.1
NEXTEL INTERNATIONAL, INC.,
as Issuer
and
THE BANK OF NEW YORK
Indenture
Dated as of March 12, 1998
12 1/8% Senior Discount Notes due 2008
<PAGE> 2
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
TIA Sections Indenture Sections
<S> <C>
Section 310(a)(1)............................................ 7.10
(a)(2)............................................ 7.10
(b)............................................... 7.08
Section 313(c)............................................... 7.06; 10.02
Section 314(a)............................................... 4.17; 10.02
(a)(4)............................................ 4.16; 10.02
(c)(1)............................................ 10.03
(c)(2)............................................ 10.03
(e)............................................... 10.04
Section 315(b)............................................... 7.05; 10.02
Section 316(a)(1)(A)......................................... 6.05
(a)(1)(B)......................................... 6.04
(b)............................................... 6.07
Section 317(a)(1)............................................ 6.08
(a)(2)............................................ 6.09
Section 318(a)............................................... 10.01
(c)............................................... 10.01
</TABLE>
Note: The Cross-Reference Table shall not for any purpose be deemed to be a part
of the Indenture.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
RECITALS OF THE COMPANY.................................................... 1
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions................................................. 2
SECTION 1.02. Incorporation by Reference of Trust Indenture Act...........25
SECTION 1.03. Rules of Construction.......................................25
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating.............................................26
SECTION 2.02. Restrictive Legends.........................................27
SECTION 2.03. Execution, Authentication and Denominations.................30
SECTION 2.04. Registrar and Paying Agent..................................30
SECTION 2.05. Paying Agent to Hold Money in Trust.........................31
SECTION 2.06. Transfer and Exchange.......................................32
SECTION 2.07. Book-Entry Provisions for Global Notes......................33
SECTION 2.08. Special Transfer Provisions.................................34
SECTION 2.09. Replacement Notes...........................................38
SECTION 2.10. Outstanding Notes...........................................38
SECTION 2.11. Temporary Notes.............................................39
SECTION 2.12. Cancellation................................................39
SECTION 2.13. CUSIP Numbers...............................................40
SECTION 2.14. Defaulted Interest..........................................40
SECTION 2.15. Issuance of Additional Notes................................40
ARTICLE THREE
REDEMPTION
SECTION 3.01. Right of Redemption.........................................40
SECTION 3.02. Notices to Trustee..........................................41
SECTION 3.03. Selection of Notes to Be Redeemed...........................41
SECTION 3.04. Notice of Redemption........................................42
SECTION 3.05. Effect of Notice of Redemption..............................43
</TABLE>
- -----------
Note: The Table of Contents shall not for any purposes be deemed to be a part of
the Indenture.
<PAGE> 4
<TABLE>
<S> <C>
SECTION 3.06. Deposit of Redemption Price.................................43
SECTION 3.07. Payment of Notes Called for Redemption......................43
SECTION 3.08. Notes Redeemed in Part......................................43
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes............................................44
SECTION 4.02. Maintenance of Office or Agency.............................44
SECTION 4.03. Limitation on Indebtedness..................................45
SECTION 4.04. Limitation on Restricted Payments...........................47
SECTION 4.05. Limitation on Dividend and Other Payment Restrictions
Affecting Restricted .............................50
SECTION 4.06. Limitation on the Issuance and Sale of Capital Stock of
Restricted .......................................52
SECTION 4.07. Limitation on Issuances of Guarantees by Restricted Group
Members...........................................52
SECTION 4.08. Limitation on Transactions with Shareholders and
Affiliates........................................53
SECTION 4.09. Limitation on Liens.........................................54
SECTION 4.10. Limitation on Asset Sales...................................55
SECTION 4.11. Repurchase of Notes upon a Change of Control................56
SECTION 4.12. Existence...................................................57
SECTION 4.13. Payment of Taxes and Other Claims...........................57
SECTION 4.14. Maintenance of Properties and Insurance.....................57
SECTION 4.15. Notice of Defaults..........................................58
SECTION 4.16. Compliance Certificates.....................................58
SECTION 4.17. Commission Reports and Reports to Holders...................59
SECTION 4.18. Waiver of Stay, Extension or Usury Laws.....................59
SECTION 4.19. Limitation on Sale-Leaseback Transactions...................59
SECTION 4.20. Calculation of Original Issue Discount......................60
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. When Company May Merge, Etc.................................60
SECTION 5.02. Successor Substituted.......................................61
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default...........................................62
SECTION 6.02. Acceleration................................................64
SECTION 6.03. Other Remedies..............................................64
</TABLE>
<PAGE> 5
<TABLE>
<S> <C>
SECTION 6.04. Waiver of Past Defaults.....................................64
SECTION 6.05. Control by Majority.........................................65
SECTION 6.06. Limitation on Suits.........................................65
SECTION 6.07. Rights of Holders to Receive Payment........................66
SECTION 6.08. Collection Suit by Trustee..................................66
SECTION 6.09. Trustee May File Proofs of Claim............................66
SECTION 6.10. Priorities..................................................67
SECTION 6.11. Undertaking for Costs.......................................67
SECTION 6.12. Restoration of Rights and Remedies..........................67
SECTION 6.13. Rights and Remedies Cumulative..............................68
SECTION 6.14. Delay or Omission Not Waiver................................68
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. General.....................................................68
SECTION 7.02. Certain Rights of Trustee...................................68
SECTION 7.03. Individual Rights of Trustee................................69
SECTION 7.04. Trustee's Disclaimer........................................70
SECTION 7.05. Notice of Default...........................................70
SECTION 7.06. Reports by Trustee to Holders...............................70
SECTION 7.07. Compensation and Indemnity..................................70
SECTION 7.08. Replacement of Trustee......................................71
SECTION 7.09. Successor Trustee by Merger, Etc............................72
SECTION 7.10. Eligibility.................................................72
SECTION 7.11. Money Held in Trust.........................................72
SECTION 7.12. Withholding Taxes...........................................72
ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01. Termination of Company's Obligations........................73
SECTION 8.02. Defeasance and Discharge of Indenture.......................74
SECTION 8.03. Defeasance of Certain Obligations...........................76
SECTION 8.04. Application of Trust Money; Miscellaneous...................78
SECTION 8.05. Repayment to Company........................................78
SECTION 8.06. Reinstatement...............................................78
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders..................................79
SECTION 9.02. With Consent of Holders.....................................79
</TABLE>
<PAGE> 6
<TABLE>
<S> <C>
SECTION 9.03. Revocation and Effect of Consent............................81
SECTION 9.04. Notation on or Exchange of Notes............................81
SECTION 9.05. Trustee to Sign Amendments, Etc.............................82
SECTION 9.06. Conformity with Trust Indenture Act.........................82
ARTICLE TEN
MISCELLANEOUS
SECTION 10.01. Trust Indenture Act of 1939................................82
SECTION 10.02. Notices....................................................82
SECTION 10.03. Certificate and Opinion as to Conditions Precedent.........83
SECTION 10.04. Statements Required in Certificate or Opinion..............83
SECTION 10.05. Rules by Trustee, Paying Agent or Registrar................84
SECTION 10.06. Payment Date Other Than a Business Day.....................84
SECTION 10.07. Governing Law..............................................84
SECTION 10.08. No Adverse Interpretation of Other Agreements..............84
SECTION 10.09. No Recourse Against Others.................................85
SECTION 10.10. Successors.................................................85
SECTION 10.11. Duplicate Originals........................................85
SECTION 10.12. Separability...............................................85
SECTION 10.13. Table of Contents, Headings, Etc...........................85
SECTION 10.14. Right of First Opportunity Agreement.......................85
EXHIBIT A Form of Note....................................................A-1
EXHIBIT B Form of Certificate.............................................B-1
EXHIBIT C Form of Certificate to be Delivered in Connection with
Transfers to Non-QIB Accredited Investors.....................C-1
EXHIBIT D Form of Certificate to be Delivered in Connection with
Transfers Pursuant to Regulation S............................D-1
</TABLE>
<PAGE> 7
INDENTURE, dated as of March 12, 1998, between NEXTEL
INTERNATIONAL, INC., a Washington corporation, (the "Company"), and THE BANK OF
NEW YORK, a New York banking corporation, (the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance initially of up to $730,000,000
aggregate principal amount at maturity of the Company's 12 1/8% Senior Discount
Notes due 2008 (the "Notes") issuable as provided in this Indenture. The Notes
will become freely transferable upon the consummation of an exchange offer for
the Notes or upon the effectiveness of a shelf registration statement with
respect to the Notes. All things necessary to make this Indenture a valid
agreement of the Company, in accordance with its terms, have been done, and the
Company has done all things necessary to make the Notes, when executed by the
Company and authenticated and delivered by the Trustee hereunder and duly issued
by the Company, the valid obligations of the Company as hereinafter provided.
This Indenture is subject to, and shall be governed by, the
provisions of the Trust Indenture Act of 1939, as amended, that are required to
be a part of and to govern indentures qualified under the Trust Indenture Act of
1939, as amended.
AND THIS INDENTURE FURTHER WITNESSETH
For and in consideration of the premises and the purchase of
the Notes by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders, as follows.
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions
"Accreted Value" is defined to mean, for any Specified Date, the amount
calculated pursuant to (i), (ii), (iii) or (iv) for each $1,000 principal amount
at maturity of Notes:
(i) if the Specified Date occurs on one or more of the
following dates (each a "Semi-Annual Accrual Date"), the Accreted Value
will equal the amount set forth below for such Semi-Annual Accrual
Date:
SEMI-ANNUAL ACCRETED
<PAGE> 8
<TABLE>
<CAPTION>
ACCRUAL DATE VALUE
<S> <C>
April 15, 1998 $ 555.11
October 15, 1998 $ 588.76
April 15, 1999 $ 624.46
October 15, 1999 $ 662.31
April 15, 2000 $ 702.47
October 15, 2000 $ 745.05
April 15, 2001 $ 790.22
October 15, 2001 $ 838.13
April 15, 2002 $ 888.94
October 15, 2002 $ 942.84
April 15, 2003 $1,000.00
</TABLE>
(ii) if the Specified Date occurs before the first Semi-Annual
Accrual Date, the Accreted Value will equal the sum of (a) $549.15 and
(b) an amount equal to the product of (1) the Accreted Value for the
first Semi-Annual Accrual Date less $549.15 multiplied by (2) a
fraction, the numerator of which is the number of days from the issue
date of the Notes to the Specified Date, using a 360-day year of twelve
30-day months, and the denominator of which is the number of days
elapsed from the issue date of the Notes to the first Semi-Annual
Accrual Date, using a 360-day year of twelve 30-day months;
(iii) if the Specified Date occurs between two Semi-Annual
Accrual Dates, the Accreted Value will equal the sum of (a) the
Accreted Value for the Semi-Annual Accrual Date immediately preceding
such Specified Date and (b) an amount equal to the product of (1) the
Accreted Value for the immediately following Semi-Annual Accrual Date
less the Accreted Value for the immediately preceding Semi-Annual
Accrual Date multiplied by (2) a fraction, the numerator of which is
the number of days from the immediately preceding Semi-Annual Accrual
Date to the Specified Date, using a 360-day year of twelve 30-day
months, and the denominator of which is 180; or
(iv) if the Specified Date occurs after the last Semi-Annual
Accrual Date, the Accreted Value will equal $1,000.
"Acquired Indebtedness" means Indebtedness of a Person existing at the
time such Person becomes a Restricted Group Member or assumed in connection with
an Asset Acquisition by a Restricted Group Member and not Incurred in connection
with, or in anticipation of, such Person becoming a Restricted Group Member or
such Asset Acquisition; provided that Indebtedness of such Person which is
redeemed, defeased, retired or otherwise repaid at the time of or immediately
upon consummation of the transactions by which such Person becomes a Restricted
Group Member or such Asset Acquisition shall not be Acquired Indebtedness.
<PAGE> 9
3
"Adjusted Consolidated Net Income" means, for any period, the aggregate
net income (or loss) of the Company and its Restricted Group Members for such
period determined in conformity with GAAP; provided that the following items
shall be excluded in computing Adjusted Consolidated Net Income (without
duplication): (i) the net income (or loss) of any Unrestricted Subsidiary or
Unrestricted Affiliate, except (x) with respect to net income, to the extent of
the amount of dividends or other distributions actually paid to the Company or
any Restricted Group Member by such Unrestricted Subsidiary or Unrestricted
Affiliate during such period, and (y) with respect to net losses, to the extent
of the amount of cash contributed by the Company or any Restricted Group Member
to such Unrestricted Subsidiary or Unrestricted Affiliate during such period;
(ii) solely for the purposes of calculating the amount of Restricted Payments
that may be made pursuant to clause (C) of the first paragraph of Section 4.04
(and in such case, except to the extent includable pursuant to clause (i)
above), the net income (or loss) of any Person accrued prior to the date it
becomes a Restricted Group Member or is merged into or consolidated with the
Company or any Restricted Group Member or all or substantially all of the
property and assets of such Person are acquired by the Company or any Restricted
Group Member; (iii) the net income of any Restricted Group Member to the extent
that the declaration or payment of dividends or similar distributions by such
Restricted Group Member of such net income is not at the time permitted by the
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to such
Restricted Group Member; provided, in the case of restrictions imposed in
connection with outstanding Indebtedness, that the amount of net income excluded
during any period shall not exceed the aggregate amount of such Indebtedness
that would need to be repaid to enable such Restricted Group Member to declare
and pay dividends or similar distributions of such net income; (iv) any gains or
losses (on an after-tax basis) attributable to Asset Sales; (v) except for
purposes of calculating the amount of Restricted Payments that may be made
pursuant to clause (C) of the first paragraph of Section 4.04, any amount paid
or accrued as dividends on Preferred Stock of the Company or any Restricted
Group Member owned by Persons other than the Company and any Restricted Group
Member; (vi) all extraordinary gains and extraordinary losses; and (vii) to the
extent not otherwise excluded in accordance with GAAP, the net income (or loss)
of any Restricted Group Member in an amount that corresponds to the percentage
ownership interest in the income of such Restricted Group Member not owned on
the last day of such period, directly or indirectly, by the Company.
"Adjusted Consolidated Net Tangible Assets" means the total amount of
assets of the Company and its Restricted Group Members (less applicable
depreciation, amortization and other valuation reserves), except to the extent
resulting from write-ups of capital assets (excluding write-ups in connection
with accounting for acquisitions in conformity with GAAP), after deducting
therefrom (i) all current liabilities of the Company and its Restricted Group
Members (excluding intercompany items) and (ii) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangibles other than radio frequency
<PAGE> 10
4
licenses, all as set forth on the most recent quarterly or annual consolidated
balance sheet of the Company and its Restricted Group Members, prepared in
conformity with GAAP and filed with the Commission pursuant to Section 4.17;
provided that Adjusted Consolidated Net Tangible Assets shall be reduced (to the
extent not otherwise reduced in accordance with GAAP) by an amount that
corresponds to the percentage ownership interest in the assets of each
Restricted Group Member not owned on the date of determination, directly or
indirectly, by the Company.
"Affiliate" means, as applied to any Person, any other Person directly
or indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agent" means any Registrar, Paying Agent, authenticating agent or
co-Registrar.
"Agent Members" has the meaning provided in Section 2.07(a).
"Asset Acquisition" means (i) an investment by the Company or any
Restricted Group Member in any other Person pursuant to which such Person shall
become a Restricted Group Member or shall be merged into or consolidated with
the Company or any Restricted Group Member; provided that such Person's primary
business is related, ancillary or complementary to the businesses of the Company
and its Restricted Group Members on the date of such investment or (ii) an
acquisition by the Company or any Restricted Group Member of the property and
assets of any Person other than the Company or any Restricted Group Member that
constitute substantially all of a division or line of business of such Person;
provided that the property and assets acquired are related, ancillary or
complementary to the businesses of the Company and its Restricted Group Members
on the date of such acquisition.
"Asset Disposition" means the sale or other disposition by the Company
or any Restricted Group Member (other than to the Company or another Restricted
Group Member) of (i) all or substantially all of the Capital Stock of any
Restricted Group Member or (ii) all or substantially all of the assets that
constitute a division or line of business of the Company or any Restricted Group
Member.
"Asset Sale" means any sale, transfer or other disposition (including
by way of merger, consolidation or sale-leaseback transaction) in one
transaction or a series of related transactions by the Company or any Restricted
Group Member to any Person other than the Company or any Restricted Group Member
of (i) all or any of the Capital Stock of any Restricted Group Member, (ii) all
or substantially all of the property and assets of an operating unit or business
of the
<PAGE> 11
5
Company or any Restricted Group Member or (iii) any other property and assets of
the Company or any Restricted Group Member outside the ordinary course of
business of the Company or such Restricted Group Member and, in the case of any
of the foregoing clauses (i) through (iii), that is not governed by the
provisions of Article Five; provided that "Asset Sale" shall not include (a)
sales or other dispositions of inventory, receivables and other current assets,
(b) sales or other dispositions of assets for consideration at least equal to
the fair market value of the assets sold or disposed of, provided that the
consideration received would satisfy clause (B) of Section 4.10, (c) sales or
other dispositions of obsolete equipment, (d) sales or other dispositions of the
Capital Stock of an Unrestricted Subsidiary or an Unrestricted Affiliate or (e)
sales or other distributions of assets with a fair market value (as certified in
an officers' certificate) not in excess of $1 million.
"Average Life" means, at any date of determination with respect to any
debt security, the quotient obtained by dividing (i) the sum of the products of
(a) the number of years from such date of determination to the dates of each
successive scheduled principal payment of such debt security and (b) the amount
of such principal payment by (ii) the sum of all such principal payments.
"Board of Directors" means the Board of Directors of the Company or any
committee of such Board of Directors duly authorized to act under this
Indenture.
"Board Resolution" means a copy of a resolution, certified by the
Secretary of the Company to have been duly adopted by the Board of Directors and
to be in full force and effect on the date of such certification, and delivered
to the Trustee.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in The City of New York, or in the city of the Corporate
Trust Office of the Trustee, are authorized by law to close.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) in equity of such Person, whether now outstanding or
issued after the Closing Date, including, without limitation, all Common Stock
and Preferred Stock.
"Capitalized Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) of which the discounted present value
of the rental obligations of such Person as lessee, in conformity with GAAP, is
required to be capitalized on the balance sheet of such Person; and "Capitalized
Lease Obligations" means the discounted present value of the rental obligations
under such lease.
"Change of Control" means such time as (i) (a) prior to the occurrence
of a Public
<PAGE> 12
6
Market, a "person" or "group" (within the meaning of Section 13(d) or 14(d)(2)
of the Exchange Act) becomes the ultimate "beneficial owner" (as defined in Rule
13d-3 of the Exchange Act) of Voting Stock representing a greater percentage of
the total voting power of the Voting Stock of the Company, on a fully diluted
basis, than is held by the Existing Stockholders and their Affiliates on such
date and (b) after the occurrence of a Public Market, a "person" or "group"
(within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) becomes
the ultimate "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act) of more than 35% of the total voting power of the Voting Stock of the
Company on a fully diluted basis and such ownership is greater than the amount
of voting power of the Voting Stock, on a fully diluted basis, held by the
Existing Stockholders and their Affiliates on such date; or (ii) individuals who
on the Closing Date constitute the Board of Directors (together with any new
directors whose election by the Board of Directors or whose nomination for
election by the Company's stockholders was approved by a vote of at least
two-thirds of the members of the Board of Directors then in office who either
were members of the Board of Directors on the Closing Date or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the members of the Board of Directors then in office.
"Clearnet Transaction" means the transfer to the Company by Nextel of
securities representing a 15.7% equity interest in Clearnet Communications Inc.
in exchange for shares of Series A Preferred Stock.
"Closing Date" means the date on which the Notes are originally issued
under this Indenture.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the TIA, then the body performing such duties at
such time.
"Common Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's common stock, whether now outstanding or
issued after the date of this Indenture, including, without limitation, all
series and classes of such common stock.
"Company" means the party named as such in the first paragraph of this
Indenture until a successor replaces it pursuant to Article Five of this
Indenture and thereafter means the successor.
"Company Order" means a written request or order signed in the name of
the Company (i) by its Chairman, a Vice Chairman, its President or a Vice
President and (ii) by its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary and delivered to the Trustee;
<PAGE> 13
7
provided, however, that such written request or order may be signed by any two
of the officers or directors listed in clause (i) above in lieu of being signed
by one of such officers or directors listed in such clause (i) and one of the
officers listed in clause (ii) above.
"Consolidated EBITDA" means, for any period, the sum of the amounts for
such period of (i) Adjusted Consolidated Net Income, (ii) Consolidated Interest
Expense, to the extent such amount was deducted in calculating Adjusted
Consolidated Net Income, (iii) income taxes, to the extent such amount was
deducted in calculating Adjusted Consolidated Net Income (other than income
taxes (either positive or negative) attributable to extraordinary and
non-recurring gains or losses or sales of assets), (iv) depreciation expense as
determined in conformity with GAAP, to the extent such amount was deducted in
calculating Adjusted Consolidated Net Income, (v) amortization expense as
determined in conformity with GAAP, to the extent such amount was deducted in
calculating Adjusted Consolidated Net Income, and (vi) all other non-cash items
to the extent reducing Adjusted Consolidated Net Income (other than items that
will require cash payments and for which an accrual or reserve is, or is
required by GAAP to be, made), less all non-cash items to the extent increasing
Adjusted Consolidated Net Income, as determined in conformity with GAAP.
"Consolidated Interest Expense" means, for any period, the aggregate
amount of interest in respect of Indebtedness (including, without limitation,
amortization of original issue discount on any Indebtedness and the interest
portion of any deferred payment obligation, calculated in accordance with the
effective interest method of accounting; all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing; the net costs associated with Interest Rate Agreements; and interest
in respect of any Indebtedness that is Guaranteed or secured by the Company or
any Restricted Group Member) and all but the principal component of rentals in
respect of Capitalized Lease Obligations paid, accrued or scheduled to be paid
or to be accrued by the Company and its Restricted Group Members during such
period; excluding, however, (i) any amount of such interest of any Restricted
Group Member if the net income of such Restricted Group Member is excluded in
the calculation of Adjusted Consolidated Net Income pursuant to clause (iii) or
(vii) of the definition thereof (but only in the same proportion as the net
income of such Restricted Group Member is excluded from the calculation of
Adjusted Consolidated Net Income pursuant to clause (iii) or (vii) of the
definition thereof) and (ii) any premiums, fees and expenses (and any
amortization thereof) payable in connection with the offering of the Notes, all
as determined (without taking into account Unrestricted Subsidiaries or
Unrestricted Affiliates) in conformity with GAAP.
"Consolidated Leverage Ratio" means, on any Transaction Date, the ratio
of (i) the aggregate amount (determined as set forth in the definition of
"Indebtedness") of Indebtedness of the Company and its Restricted Group Members
as at such Transaction Date to (ii) the aggregate amount of Consolidated EBITDA
for the latest fiscal quarter for which financial statements of the Company have
been filed with the Commission pursuant to Section 4.17 (such fiscal quarter
<PAGE> 14
8
being the "One Quarter Period"), multiplied by four; provided that (A) pro forma
effect shall be given to (x) any Indebtedness Incurred from the beginning of the
One Quarter Period through the Transaction Date (the "Reference Period"), to the
extent such Indebtedness is outstanding on the Transaction Date and (y) any
Indebtedness that was outstanding during such Reference Period but that is not
outstanding or is to be repaid on the Transaction Date; (B) pro forma effect
shall be given to Asset Dispositions and Asset Acquisitions (including giving
pro forma effect to the application of proceeds of any Asset Disposition) that
occur during such Reference Period, as if they had occurred and such proceeds
had been applied on the first day of such Reference Period; and (C) pro forma
effect shall be given to asset dispositions and asset acquisitions (including
giving pro forma effect to the application of proceeds of any asset disposition)
that have been made by any Person that has become a Restricted Group Member or
has been merged with or into the Company or any Restricted Group Member during
such Reference Period and that would have constituted Asset Dispositions or
Asset Acquisitions had such transactions occurred when such Person was a
Restricted Group Member as if such asset dispositions or asset acquisitions were
Asset Dispositions or Asset Acquisitions that occurred on the first day of such
Reference Period; provided that to the extent that clause (B) or (C) of this
sentence requires that pro forma effect be given to an Asset Acquisition or
Asset Disposition, such pro forma calculation shall be based upon the full
fiscal quarter immediately preceding the Transaction Date of the Person, or
division or line of business of the Person, that is acquired or disposed of for
which financial information is available, multiplied by four.
"Consolidated Net Worth" means, at any date of determination,
stockholders' equity as set forth on the most recently available quarterly or
annual consolidated balance sheet of the Company and its Restricted Group
Members (which shall be as of a date not more than 90 days prior to the date of
such computation, and which shall not take into account Unrestricted
Subsidiaries or Unrestricted Affiliates), less any amounts attributable to
Redeemable Stock or any equity security convertible into or exchangeable for
Indebtedness, the cost of treasury stock and the principal amount of any
promissory notes receivable from the sale of the Capital Stock of the Company or
any Restricted Group Member, each item to be determined in conformity with GAAP.
"Corporate Trust Office" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date of this Indenture,
located at 101 Barclay Street, 21 West, New York, New York 10286, Attention:
Corporate Trust Trustee Administration.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement.
"Default" means any event that is, or after notice or passage of time
or both would be, an Event of Default.
<PAGE> 15
9
"Depositary" shall mean The Depository Trust Company, its nominees, and
their respective successors.
"Event of Default" has the meaning provided in Section 6.01.
"Excess Proceeds" has the meaning provided in Section 4.10.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means any securities of the Company containing terms
identical to the Notes (except that such Exchange Notes shall be registered
under the Securities Act) that are issued and exchanged for the Notes pursuant
to the Registration Rights Agreement and this Indenture.
"Existing Stockholders" means Craig O. McCaw and Nextel.
"fair market value" means the price that would be paid in an
arm's-length transaction between an informed and willing seller under no
compulsion to sell and an informed and willing buyer under no compulsion to buy,
as determined in good faith by the Board of Directors, whose determination shall
be conclusive if evidenced by a Board Resolution; provided that for purposes of
clause (viii) of the second paragraph of Section 4.03, (x) the fair market value
of any security registered under the Exchange Act shall be the average of the
closing prices, regular way, of such security for the 20 consecutive trading
days immediately preceding the capital contribution or sale of Capital Stock and
(y) in the event the aggregate fair market value of any other property received
by the Company exceeds $10 million, the fair market value of such property shall
be determined by a nationally recognized investment banking firm and set forth
in their written opinion which shall be delivered to the Trustee.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Closing Date, including, without
limitation, those set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as approved by a significant segment
of the accounting profession. Except as specifically provided, all ratios and
computations contained or referred to in this Indenture shall be computed in
conformity with GAAP applied on a consistent basis, except that calculations
made for purposes of determining compliance with the terms of the covenants and
with other provisions of this Indenture shall be made without giving effect to
the amortization of any expenses incurred in connection with the offering of the
Notes.
"Global Notes" has the meaning provided in Section 2.01.
<PAGE> 16
10
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing 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 of
such other Person (whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or services
(unless such purchase arrangements are on arm's-length terms and are entered
into in the ordinary course of such Person's business), to take-or-pay, or to
maintain financial statement conditions or otherwise) or (ii) entered into for
purposes 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 "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of business. The
term "Guarantee" used as a verb has a corresponding meaning.
"Guaranteed Indebtedness" has the meaning provided in Section 4.07.
"Holder" or "Noteholder" means the registered holder of any Note.
"Incur" means, with respect to any Indebtedness, to incur, create,
issue, assume, Guarantee or otherwise become liable for or with respect to, or
become responsible for, the payment of, contingently or otherwise, such
Indebtedness, including an "Incurrence" of Indebtedness by reason of a Person
becoming a Restricted Group Member; provided that neither the accrual of
interest nor the accretion of original issue discount shall be considered an
Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person at any date of
determination (without duplication), (i) all indebtedness of such Person for
borrowed money, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all obligations of such
Person in respect of letters of credit or other similar instruments (including
reimbursement obligations with respect thereto, but excluding obligations
(including reimbursement obligations) with respect to (x) letters of credit
(including trade letters of credit) securing obligations (other than obligations
described in (i) or (ii) above or (v), (vi) or (vii) below) entered into in the
ordinary course of business of such Person to the extent such letters of credit
are not drawn upon or, if drawn upon, to the extent such drawing is reimbursed
no later than the third Business Day following receipt by such Person of a
demand for reimbursement and (y) letters of credit secured by cash collateral,
to the extent secured thereby), (iv) all obligations of such Person to pay the
deferred and unpaid purchase price of property or services, which purchase price
is due more than six months after the date of placing such property in service
or taking delivery and title thereto or the completion of such services, except
Trade Payables, (v) all obligations of such Person as lessee under Capitalized
Leases, (vi) all Indebtedness of other Persons secured by a Lien on any asset of
such Person, whether or not such Indebtedness is assumed by such Person;
<PAGE> 17
11
provided that the amount of such Indebtedness shall be the lesser of (A) the
fair market value of such asset at such date of determination and (B) the amount
of such Indebtedness, (vii) all Indebtedness of other Persons Guaranteed by such
Person to the extent such Indebtedness is Guaranteed by such Person and (viii)
to the extent not otherwise included in this definition, obligations under
Currency Agreements and Interest Rate Agreements. The amount of Indebtedness of
any Person at any date shall be the outstanding balance at such date of all
unconditional obligations as described above and, with respect to contingent
obligations, the maximum liability upon the occurrence of the contingency giving
rise to the obligation, provided (A) that the amount outstanding at any time of
any Indebtedness issued with original issue discount is the face amount of such
Indebtedness less the unamortized portion of the original issue discount of such
Indebtedness at the time of its issuance as determined in conformity with GAAP,
(B) that the amount of Indebtedness at any time of any Restricted Group Member
shall be reduced by an amount that corresponds to the percentage ownership
interest in the assets of such Restricted Group Member not owned on the date of
determination, directly or indirectly, by the Company, (C) money borrowed at the
time of the Incurrence of any Indebtedness in order to pre-fund the payment of
interest on such Indebtedness shall be deemed not to be "Indebtedness" and (D)
that Indebtedness shall not include any liability for federal, state, local or
other taxes.
"Indenture" means this Indenture as originally executed or as it may be
amended or supplemented from time to time by one or more indentures supplemental
to this Indenture entered into pursuant to the applicable provisions of this
Indenture.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"Interest Payment Date" means each semiannual interest payment date on
April 15 and October 15, of each year, commencing October 15, 2003.
"Interest Rate Agreement" means any interest rate protection agreement,
interest rate future agreement, interest rate option agreement, interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement,
interest rate hedge agreement or other similar agreement or arrangement.
"Investment" in any Person means any direct or indirect advance, loan
or other extension of credit (including, without limitation, by way of Guarantee
or similar arrangement; but excluding advances to customers in the ordinary
course of business that are, in conformity with GAAP, recorded as accounts
receivable on the balance sheet of the Company or its Restricted Group Members)
or capital contribution to (by means of any transfer of cash or other property
to others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, bonds, notes,
debentures or other similar instruments issued by, such Person and shall include
(i) the designation of a Restricted Subsidiary of the Company as an
<PAGE> 18
12
Unrestricted Subsidiary, (ii) the designation of a Restricted Affiliate as an
Unrestricted Affiliate and (iii) the fair market value of the Capital Stock (or
any other Investment), held by the Company or any Restricted Group Member, of
(or in) any Person that has ceased to be a Restricted Group Member, including
without limitation, by reason of any transaction permitted by clause (iii) of
Section 4.06 or an Investment ceasing to be a Permitted Investment pursuant to
clause (ii)(y) of the definition of "Permitted Investment"; provided that the
fair market value of the Investment remaining in any Person that has ceased to
be a Restricted Group Member shall not exceed (x) the value of the aggregate
amount of Investments previously made in such Person valued at the time such
Investments were made less (y) the net reduction of such Investments. For
purposes of the definition of "Unrestricted Affiliate" and "Unrestricted
Subsidiary" and Section 4.04, (i) "Investment" shall include the fair market
value of the assets (net of liabilities (other than liabilities to the Company
or any of its Subsidiaries)) of any Restricted Group Member at the time that
such Restricted Group Member is designated an Unrestricted Subsidiary or
Unrestricted Affiliate, (ii) the fair market value of the assets (net of
liabilities (other than liabilities to the Company or any of its Subsidiaries))
of any Unrestricted Subsidiary or Unrestricted Affiliate at the time that such
Unrestricted Subsidiary or Unrestricted Affiliate is designated a Restricted
Subsidiary or Restricted Affiliate shall be considered a reduction in
outstanding Investments and (iii) any property transferred to or from an
Unrestricted Subsidiary or Unrestricted Affiliate shall be valued at its fair
market value at the time of such transfer; provided that the amount of any
Investment made by a Restricted Group Member shall be reduced by an amount that
corresponds to the percentage ownership interest in the assets of such
Restricted Group Member not owned on the date of determination, directly or
indirectly, by the Company.
"Involuntary Event" has the meaning specified in the definition of
"Permitted Investments."
"Lien" means any mortgage, pledge, security interest, encumbrance, lien
or charge of any kind (including, without limitation, any conditional sale or
other title retention agreement or lease in the nature thereof or any agreement
to give any security interest); provided that the amount of assets of a
Restricted Group Member subject to a Lien shall be reduced by an amount that
corresponds to the percentage ownership interest in the assets of such
Restricted Group Member not owned on the date of determination, directly or
indirectly, by the Company.
"Minority Owned Affiliate," of any specified Person, means any other
Person in which an Investment in the Capital Stock of such Person has been made
by such specified Person other than a direct or indirect Subsidiary of such
specified Person.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Motorola Credit Agreement" means any credit agreement, loan or other
similar
<PAGE> 19
13
agreement entered into pursuant to the Motorola Vendor Financing Template
Memorandum of Understanding, together with all other agreements, instruments and
documents executed or delivered pursuant thereto or in connection therewith, as
such agreements, instruments or documents may be amended, supplemented,
extended, renewed, replaced or otherwise modified from time to time.
"Net Cash Proceeds" means, (a) with respect to any Asset Sale, the
proceeds of such Asset Sale in the form of cash or cash equivalents, including
payments in respect of deferred payment obligations (to the extent corresponding
to the principal, but not interest, component thereof) when received in the form
of cash or cash equivalents (except to the extent such obligations are financed
or sold with recourse to the Company or any Restricted Group Member) and
proceeds from the conversion of other property received when converted to cash
or cash equivalents, net of (i) brokerage commissions and other fees and
expenses (including fees and expenses of counsel and investment bankers) related
to such Asset Sale, (ii) provisions for all taxes (whether or not such taxes
will actually be paid or are payable) as a result of such Asset Sale without
regard to the consolidated results of operations of the Company and its
Restricted Group Members, taken as a whole, (iii) payments made to repay
Indebtedness or any other obligation outstanding at the time of such Asset Sale
that either (A) is secured by a Lien on the property or assets sold or (B) is
required to be paid as a result of such sale and (iv) appropriate amounts to be
provided by the Company or any Restricted Group Member as a reserve against any
liabilities associated with such Asset Sale, including, without limitation,
pension and other post-employment benefit liabilities, liabilities related to
environmental matters and liabilities under any indemnification obligations
associated with such Asset Sale, all as determined in conformity with GAAP;
provided that with respect to any Asset Sale by a Restricted Group Member, Net
Cash Proceeds shall be reduced by an amount that corresponds to the percentage
ownership interest in the assets of such Restricted Group Member not owned on
the date of such Asset Sale, directly or indirectly, by the Company; and (b)
with respect to any capital contribution or issuance or sale of Capital Stock,
the proceeds of such capital contribution or issuance or sale in the form of
cash or cash equivalents, including payments in respect of deferred payment
obligations (to the extent corresponding to the principal, but not interest,
component thereof) when received in the form of cash or cash equivalents (except
to the extent such obligations are financed or sold with recourse to the Company
or any Restricted Group Member) and proceeds from the conversion of other
property received when converted to cash or cash equivalents, net of attorney's
fees, accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees incurred in connection with
such capital contribution or issuance or sale and net of taxes paid or payable
as a result thereof.
"Nextel" means Nextel Communications, Inc.
"Non-Compete Agreement" means the Right of First Opportunity Agreement,
dated March 6, 1997, as amended, between the Company and Nextel.
<PAGE> 20
14
"Non-Compete Notice" has the meaning provided in Section 10.14.
"Non-U.S. Person" means a person who is not a U.S. person, as defined
in Regulation S.
"Note Register" has the meaning provided in Section 2.04.
"Notes" means any of the securities, as defined in the first paragraph
of the recitals hereof, that are authenticated and delivered under this
Indenture. For all purposes of this Indenture, the term "Notes" shall include
the Notes initially issued on the Closing Date, any Exchange Notes to be issued
and exchanged for any Notes pursuant to the Registration Rights Agreement and
this Indenture and any other Notes issued after the Closing Date under this
Indenture. For purposes of this Indenture, all Notes shall vote together as one
series of Notes under this Indenture.
"Offer to Purchase" means an offer to purchase Notes by the Company
from the Holders commenced by mailing a notice to the Trustee and each Holder
stating: (i) the covenant pursuant to which the offer is being made and that all
Notes validly tendered will be accepted for payment on a pro rata basis; (ii)
the purchase price and the date of purchase (which shall be a Business Day no
earlier than 30 days nor later than 60 days from the date such notice is mailed)
(the "Payment Date"); (iii) that any Note not tendered will continue to accrue
interest (or amortize original issue discount, as the case may be) pursuant to
its terms; (iv) that, unless the Company defaults in the payment of the purchase
price, any Note accepted for payment pursuant to the Offer to Purchase shall
cease to accrue interest (or amortize original issue discount, as the case may
be) on and after the Payment Date; (v) that Holders electing to have a Note
purchased pursuant to the Offer to Purchase will be required to surrender the
Note, together with the form entitled "Option of the Holder to Elect Purchase"
on the reverse side of the Note completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the Business Day
immediately preceding the Payment Date; (vi) that Holders will be entitled to
withdraw their election if the Paying Agent receives, not later than the close
of business on the third Business Day immediately preceding the Payment Date, a
telegram, facsimile transmission or letter setting forth the name of such
Holder, the principal amount of Notes delivered for purchase and a statement
that such Holder is withdrawing his election to have such Notes purchased; and
(vii) that Holders whose Notes are being purchased only in part will be issued
new Notes equal in principal amount to the unpurchased portion of the Notes
surrendered; provided that each Note purchased and each new Note issued shall be
in a principal amount at maturity of $1,000 or integral multiples thereof. On
the Payment Date, the Company shall (i) accept for payment on a pro rata basis
Notes or portions thereof tendered pursuant to an Offer to Purchase; (ii)
deposit with the Paying Agent money sufficient to pay the purchase price of all
Notes or portions thereof so accepted; and (iii) deliver, or cause to be
delivered, to the Trustee all Notes or portions thereof so accepted together
with an Officers' Certificate specifying the Notes
<PAGE> 21
15
or portions thereof accepted for payment by the Company. The Paying Agent shall
promptly mail to the Holders of Notes so accepted payment in an amount equal to
the purchase price, and the Trustee shall promptly authenticate and mail to such
Holders a new Note equal in principal amount to any unpurchased portion of the
Note surrendered; provided that each Note purchased and each new Note issued
shall be in a principal amount at maturity of $1,000 or integral multiples
thereof. The Company will publicly announce the results of an Offer to Purchase
as soon as practicable after the Payment Date. The Trustee shall act as the
Paying Agent for an Offer to Purchase. The Company will comply with Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws and regulations are applicable, in the event that the
Company is required to repurchase Notes pursuant to an Offer to Purchase.
"Officer" means, with respect to the Company, (i) the Chairman of the
Board, the President, any Vice President, the Chief Financial Officer, and (ii)
the Treasurer or any Assistant Treasurer, or the Secretary or any Assistant
Secretary.
"Officers' Certificate" means a certificate signed by one Officer
listed in clause (i) of the definition thereof and one Officer listed in clause
(ii) of the definition thereof. Each Officers' Certificate (other than
certificates provided pursuant to TIA Section 314(a)(4)) shall include the
statements provided for in TIA Section 314(e).
"Offshore Global Note" has the meaning provided in Section 2.01.
"Offshore Physical Notes" has the meaning provided in Section 2.01.
"Opinion of Counsel" means a written opinion signed by legal counsel
who may be an employee of or counsel to the Company. Each such Opinion of
Counsel shall include the statements provided for in TIA Section 314(e).
"Overhead Services Agreement" means the Overhead Services Agreement,
dated as of March 3, 1997, between the Company and Nextel.
"Paying Agent" has the meaning provided in Section 2.04, except that,
for the purposes of Article Eight, the Paying Agent shall not be the Company or
a Subsidiary of the Company or an Affiliate of any of them. The term "Paying
Agent" includes any additional Paying Agent.
"Permitted Investment" means (i) an Investment in the Company or a
Restricted Subsidiary of the Company or a Person which will, upon the making of
such Investment, become a Restricted Subsidiary of the Company or be merged or
consolidated with or into or transfer or convey all or substantially all its
assets to, the Company or a Restricted Subsidiary of the Company; provided that
such Person's primary business is related, ancillary or complementary to
<PAGE> 22
16
the businesses of the Company and its Restricted Subsidiaries on the date of
such Investment; (ii) an Investment by the Company or a Restricted Group Member
in a Restricted Affiliate or a Person which will, upon the making of such
Investment, become a Restricted Affiliate or be merged or consolidated with or
into or transfer or convey all or substantially all its assets to, a Restricted
Affiliate; provided that (x) such Person's primary business is related,
ancillary or complementary to the businesses of the Company and its Restricted
Group Members on the date of such Investment and (y) any such Investment shall
cease to be a Permitted Investment in the event such Restricted Affiliate shall
cease to be a Restricted Affiliate or shall cease to observe any of the
provisions of the covenants that are applicable to such Restricted Affiliate,
provided that in the event such Restricted Affiliate ceases to be a Restricted
Affiliate or such Restricted Affiliate ceases to observe any of the provisions
of the covenants applicable to it solely as a result of circumstances,
developments or conditions beyond the control of the Company (such failure to be
a Restricted Affiliate or failure to observe a covenant as a result of any such
circumstance, development or condition, being an "Involuntary Event") any such
Investment previously made in such Restricted Affiliate will not cease to be a
Permitted Investment unless such Involuntary Event continues for 90 days; (iii)
an Investment by a Restricted Affiliate in a Restricted Subsidiary of such
Restricted Affiliate or a Person which will, upon the making of such Investment,
become a Restricted Subsidiary of such Restricted Affiliate or be merged or
consolidated with or into or transfer or convey all or substantially all its
assets to, such Restricted Affiliate or a Restricted Subsidiary of such
Restricted Affiliate; provided that such Person's primary business is related,
ancillary or complementary to the businesses of the Company and its Restricted
Group Members on the date of such Investment; (iv) Temporary Cash Investments;
(v) payroll, travel and similar advances to cover matters that are expected at
the time of such advances ultimately to be treated as expenses in accordance
with GAAP; and (vi) stock, obligations or securities received in satisfaction of
judgments or as part of or in connection with the bankruptcy, winding up or
liquidation of a Person, except if such stock, obligations or securities are
received in consideration for an Investment made in such Person in connection
with or anticipation of such bankruptcy, winding up or liquidation.
"Permitted Liens" means (i) Liens for taxes, assessments, governmental
charges or claims that are being contested in good faith by appropriate legal
proceedings promptly instituted and diligently conducted and for which a reserve
or other appropriate provision, if any, as shall be required in conformity with
GAAP shall have been made; (ii) statutory and common law Liens of landlords and
carriers, warehousemen, mechanics, suppliers, materialmen, repairmen or other
similar Liens arising in the ordinary course of business and with respect to
amounts not yet delinquent or being contested in good faith by appropriate legal
proceedings promptly instituted and diligently conducted and for which a reserve
or other appropriate provision, if any, as shall be required in conformity with
GAAP shall have been made; (iii) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation, unemployment
insurance and other types of social security; (iv) Liens incurred or deposits
made to secure the performance of tenders, bids, leases, statutory or regulatory
obligations, bankers'
<PAGE> 23
17
acceptances, surety and appeal bonds, government contracts, performance and
return-of-money bonds and other obligations of a similar nature incurred in the
ordinary course of business (exclusive of obligations for the payment of
borrowed money); (v) easements, rights-of-way, municipal and zoning ordinances
and similar charges, encumbrances, title defects or other irregularities that do
not materially interfere with the ordinary course of business of the Company or
any Restricted Group Member; (vi) Liens (including extensions and renewals
thereof) upon real or personal property acquired after the Closing Date;
provided that (a) such Lien is created solely for the purpose of securing
Indebtedness Incurred, in accordance with Section 4.03, (1) to finance the cost
(including the cost of design, development, construction, improvement,
installation or integration) of the item of property or assets subject thereto
and such Lien is created prior to, at the time of or within six months after the
later of the acquisition, the completion of construction or the commencement of
full operation of such property or (2) to refinance any Indebtedness previously
so secured, (b) the principal amount of the Indebtedness secured by such Lien
does not exceed 100% of such cost and (c) any such Lien shall not extend to or
cover any property or assets other than such item of property or assets and any
improvements on such item; (vii) leases or subleases granted to others that do
not materially interfere with the ordinary course of business of the Company and
its Restricted Group Members, taken as a whole; (viii) Liens encumbering
property or assets under construction arising from progress or partial payments
by a customer of the Company or its Restricted Group Members relating to such
property or assets; (ix) any interest or title of a lessor in the property
subject to any Capitalized Lease or operating lease; (x) Liens arising from
filing Uniform Commercial Code financing statements (or substantially equivalent
filings outside the United States) regarding leases; (xi) Liens on property of,
or on shares of Capital Stock or Indebtedness of, any Person existing at the
time such Person becomes, or becomes a part of, any Restricted Group Member;
provided that such Liens do not extend to or cover any property or assets of the
Company or any Restricted Group Member other than the property or assets
acquired; (xii) Liens in favor of the Company or any Restricted Group Member;
(xiii) Liens arising from the rendering of a final judgment or order against the
Company or any Restricted Group Member that does not give rise to an Event of
Default; (xiv) Liens securing reimbursement obligations with respect to letters
of credit that encumber documents and other property relating to such letters of
credit and the products and proceeds thereof; (xv) Liens in favor of customs and
revenue authorities arising as a matter of law to secure payment of customs
duties in connection with the importation of goods; (xvi) Liens encumbering
customary initial deposits and margin deposits, and other Liens that are either
within the general parameters customary in the industry and incurred in the
ordinary course of business, in each case, securing Indebtedness under Interest
Rate Agreements and Currency Agreements and forward contracts, options, future
contracts, futures options or similar agreements or arrangements designed solely
to protect the Company or any of its Restricted Group Members from fluctuations
in interest rates, currencies or the price of commodities; (xvii) Liens arising
out of conditional sale, title retention, consignment or similar arrangements
for the sale of goods entered into by the Company or any Restricted Group Member
in the ordinary course of business in accordance with the past
<PAGE> 24
18
practices of the Company and its Restricted Group Members prior to the Closing
Date; (xviii) Liens on or sales of receivables; (xix) Liens on the Capital Stock
of Unrestricted Subsidiaries and Unrestricted Affiliates; and (xx) Liens
securing Indebtedness in an amount not to exceed at any one time outstanding 10%
of Adjusted Consolidated Net Tangible Assets.
"Person" means an individual, a corporation, a partnership, a limited
liability company, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"Physical Notes" has the meaning provided in Section 2.01.
"Preferred Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such Person's preferred or preference stock,
whether now outstanding or issued after the date of this Indenture, including,
without limitation, all series and classes of such preferred or preference
stock.
"principal" of a debt security, including the Notes, means the
principal amount due on the Stated Maturity as shown on such debt security.
"Private Placement Legend" means the legend initially set forth on the
Notes in the form set forth in Section 2.02.
"Public Equity Offering" means an underwritten primary public offering
of Common Stock of the Company pursuant to an effective registration statement
under the Securities Act.
A "Public Market" shall be deemed to exist if (i) a Public Equity
Offering has been consummated and (ii) at least 15% of the total issued and
outstanding Common Stock of the Company has been distributed by means of an
effective registration statement under the Securities Act or sales pursuant to
Rule 144 under the Securities Act.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Redeemable Stock" means any class or series of Capital Stock of any
Person that by its terms or otherwise is (i) required to be redeemed prior to
the Stated Maturity of the Notes, (ii) redeemable at the option of the holder of
such class or series of Capital Stock at any time prior to the Stated Maturity
of the Notes or (iii) convertible into or exchangeable for Capital Stock
referred to in clause (i) or (ii) above or Indebtedness having a scheduled
maturity prior to the Stated Maturity of the Notes; provided that any Capital
Stock that would not constitute Redeemable Stock but for provisions thereof
giving holders thereof the right to require such Person to repurchase or redeem
such Capital Stock upon the occurrence of an "asset sale" or "change of control"
occurring prior to the Stated Maturity of the Notes shall not constitute
Redeemable Stock if the "asset sale" or
<PAGE> 25
19
"change of control" provisions applicable to such Capital Stock are no more
favorable to the holders of such Capital Stock than the provisions contained in
Section 4.10 and Section 4.11 and such Capital Stock specifically provides that
such Person will not repurchase or redeem any such stock pursuant to such
provision prior to the Company's repurchase of such Notes as are required to be
repurchased pursuant to Section 4.10 and Section 4.11.
"Redemption Date", when used with respect to any Note to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any Note to be redeemed,
means the price at which such Note is to be redeemed pursuant to this Indenture.
"Registrar" has the meaning provided in Section 2.04.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated March 9, 1998, among the Company and Morgan Stanley & Co.
Incorporated, Chase Securities Inc. and Goldman, Sachs & Co. and certain
permitted assigns specified therein.
"Registration Statement" means the Registration Statement as defined
and described in the Registration Rights Agreement.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the April 1 or October 1 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act.
"Repurchase Offer" has the meaning specified in the Warrant Agreement,
dated as of March 6, 1997, between the Company and The Bank of New York.
"Required Consent" means, except as otherwise expressly provided in
this Indenture with respect to matters requiring the consent of each Holder of
Notes affected thereby, (i) the consent of Holders of not less than a majority
in aggregate principal amount at Stated Maturity of the outstanding Notes for
any action to (x) direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any power conferred upon
such Trustee, or (y) consent to or waive, on behalf of the Holders of all the
Notes, any past default and its consequences, and (ii) with respect to all other
actions requiring the consent of Holders of the Notes, the consent of either (x)
a majority in aggregate principal amount at Stated Maturity of the outstanding
Notes or (y) a majority in aggregate principal amount at Stated Maturity of (I)
the
<PAGE> 26
20
Notes and (II) any other issue of unsubordinated, unsecured notes issued by
the Company, if such notes or the indenture pursuant to which such notes were
issued both (A) require the consent of the holders of such notes to such action
and (B) provide that the holders thereof will vote with the Holders of the Notes
with respect to such action.
"Responsible Officer", when used with respect to the Trustee, means any
vice president, any assistant vice president, any assistant secretary, any
assistant treasurer, any trust officer or assistant trust officer, the
controller or any assistant controller or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his or her
knowledge of and familiarity with the particular subject.
"Restricted Affiliate" means any direct or indirect Minority Owned
Affiliate of the Company or a Restricted Subsidiary of the Company that has been
designated by the Board of Directors as a Restricted Affiliate based on a
determination by the Board of Directors that the Company has, directly or
indirectly, the requisite control over such Minority Owned Affiliate to prevent
it from Incurring Indebtedness, or taking any other action at any time, in
contravention of any of the provisions of this Indenture that are applicable to
Restricted Affiliates; provided that immediately after giving effect to such
designation (x) the Liens and Indebtedness of such Minority Owned Affiliate
outstanding immediately after such designation would, if Incurred at such time,
have been permitted to be Incurred for all purposes of this Indenture and (y) no
Default or Event of Default shall have occurred and be continuing. The Company
will be required to deliver an Officers' Certificate to the Trustee upon
designating any Minority Owned Affiliate as a Restricted Affiliate.
"Restricted Group Members" means collectively, each Restricted
Subsidiary of the Company, each Restricted Affiliate and each Restricted
Subsidiary of a Restricted Affiliate.
"Restricted Payments" has the meaning provided in Section 4.04.
"Restricted Subsidiary" means any Subsidiary other than an Unrestricted
Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Series A Preferred Stock" means the Series A Redeemable Exchangeable
Preferred Stock, par value $10.00 per share, of the Company.
"Shelf Registration Statement" means the Shelf Registration Statement
as defined in the
<PAGE> 27
21
Registration Rights Agreement.
"Significant Group Member" means, at any date of determination, any
Restricted Group Member that, together with its Restricted Subsidiaries and
Restricted Affiliates, (i) for the most recent fiscal year of the Company,
accounted for more than 10% of the consolidated revenues of the Company and its
Restricted Group Members or (ii) as of the end of such fiscal year, was the
owner of more than 10% of the consolidated assets of the Company and its
Restricted Group Members, all as set forth on the most recently available
consolidated financial statements of the Company for such fiscal year.
"S&P" means Standard & Poor's Ratings Services and its successors.
"Specified Date" means any Redemption Date, any Change of Control
Payment Date, Excess Proceeds Payment Date or any date on which the Notes first
become due and payable after an Event of Default.
"Stated Maturity" means, (i) with respect to any debt security, the
date specified in such debt security as the fixed date on which the final
installment of principal of such debt security is due and payable and (ii) with
respect to any scheduled installment of principal of or interest on any debt
security, the date specified in such debt security as the fixed date on which
such installment is due and payable.
"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the voting power
of the outstanding Voting Stock is owned, directly or indirectly, by such Person
and one or more other Subsidiaries of such Person.
"Temporary Cash Investment" means any of the following: (i) direct
obligations of the United States of America or any agency thereof or obligations
fully and unconditionally guaranteed by the United States of America or any
agency thereof, (ii) time deposit accounts, certificates of deposit and money
market deposits maturing within 180 days of the date of acquisition thereof
issued by a bank or trust company which is organized under the laws of the
United States of America, any state thereof or any foreign country recognized by
the United States, and which bank or trust company has capital, surplus and
undivided profits aggregating in excess of $50 million (or the foreign currency
equivalent thereof) and has outstanding debt which is rated "A" (or such similar
equivalent rating) or higher by at least one nationally recognized statistical
rating organization (as defined in Rule 436 under the Securities Act) or any
money-market fund sponsored by a registered broker dealer or mutual fund
distributor, (iii) repurchase obligations with a term of not more than 30 days
for underlying securities of the types described in clause (i) above entered
into with a bank meeting the qualifications described in clause (ii) above, (iv)
commercial paper, maturing not more than 90 days after the date of acquisition,
issued by a corporation (other than an Affiliate of the Company) organized and
in existence
<PAGE> 28
22
under the laws of the United States of America, any state thereof or any foreign
country recognized by the United States of America with a rating at the time as
of which any investment therein is made of "P-1" (or higher) according to
Moody's or "A-1" (or higher) according to S&P, and (v) securities with
maturities of six months or less from the date of acquisition issued or fully
and unconditionally guaranteed by any state, commonwealth or territory of the
United States of America, or by any political subdivision or taxing authority
thereof, and rated at least "A" by S&P or Moody's.
"TIA" or "Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended (15 U.S. Code ss.ss. 77aaa-77bbb), as in effect on the date this
Indenture was executed, except as provided in Section 9.06.
"Trade Payables" means, with respect to any Person, any accounts
payable or any other indebtedness or monetary obligation to trade creditors
created, assumed or Guaranteed by such Person or any of its Subsidiaries arising
in the ordinary course of business in connection with the acquisition of goods
or services.
"Transaction Date" means, with respect to the Incurrence of any
Indebtedness by the Company or any Restricted Group Member, the date such
Indebtedness is to be Incurred and, with respect to any Restricted Payment, the
date such Restricted Payment is to be made.
"Trustee" means the party named as such in the first paragraph of this
Indenture until a successor replaces it in accordance with the provisions of
Article Seven of this Indenture and thereafter means such successor.
"United States Bankruptcy Code" means the Bankruptcy Reform Act of
1978, as amended and as codified in Title 11 of the United States Code, as
amended from time to time hereafter, or any successor federal bankruptcy law.
"U.S. Global Note" has the meaning provided in Section 2.01.
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof at any time prior
to the Stated Maturity of the Notes, and shall also include a depository receipt
issued by a bank or trust company as custodian with respect to any such U.S.
Government Obligation or a specific payment of interest on or principal of any
such U.S. Government Obligation held by such custodian for the account of the
holder of a depository receipt; provided that (except as required by law) such
custodian is not
<PAGE> 29
23
authorized to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of the
U.S. Government Obligation or the specific payment of interest on or principal
of the U.S. Government Obligation evidenced by such depository receipt.
"U.S. Physical Notes" has the meaning provided in Section 2.01.
"Unrestricted Affiliate" means any Minority Owned Affiliate of the
Company other than a Restricted Affiliate. The Board of Directors may designate
any Restricted Affiliate to be an Unrestricted Affiliate unless such Minority
Owned Affiliate owns any Capital Stock of, or owns or holds any Lien on any
property of, the Company or any Restricted Group Member; provided that (A) any
Guarantee by the Company or any Restricted Group Member of any Indebtedness of
the Minority Owned Affiliate being so designated shall be deemed an "Incurrence"
of such Indebtedness and an "Investment" by the Company or such Restricted Group
Member (or both, if applicable) at the time of such designation; (B) either (I)
the Minority Owned Affiliate to be so designated has total assets of $1,000 or
less or (II) if such Minority Owned Affiliate has assets greater than $1,000,
such designation would be permitted under Section 4.04 and (C) if applicable,
the Incurrence of Indebtedness and the Investment referred to in clause (A) of
this proviso would be permitted under Section 4.03 and Section 4.04. Any such
designation by the Board of Directors shall be evidenced to the Trustee by
promptly filing with the Trustee a copy of the Board Resolution giving effect to
such designation and an Officers' Certificate certifying that such designation
complied with the foregoing provisions.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that
at the time of determination shall be designated an Unrestricted Subsidiary by
the Board of Directors in the manner provided below and (ii) any Subsidiary of
an Unrestricted Subsidiary. The Board of Directors may designate any Restricted
Subsidiary (including any newly acquired or newly formed Subsidiary of the
Company) to be an Unrestricted Subsidiary unless such Subsidiary owns any
Capital Stock of, or owns or holds any Lien on any property of, the Company or
any Restricted Subsidiary; provided that (A) any Guarantee by the Company or any
Restricted Subsidiary of any Indebtedness of the Subsidiary being so designated
shall be deemed an "Incurrence" of such Indebtedness and an "Investment" by the
Company or such Restricted Subsidiary (or both, if applicable) at the time of
such designation; (B) either (I) the Subsidiary to be so designated has total
assets of $1,000 or less or (II) if such Subsidiary has assets greater than
$1,000, such designation would be permitted under Section 4.04 and (C) if
applicable, the Incurrence of Indebtedness and the Investment referred to in
clause (A) of this proviso would be permitted under Section 4.03 and Section
4.04. The Board of Directors may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary; provided that immediately after giving effect to such
designation (x) the Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately after such designation would, if Incurred at such time,
have been permitted to be Incurred for all purposes of this Indenture and (y) no
Default or Event of Default
<PAGE> 30
24
shall have occurred and be continuing. Any such designation by the Board of
Directors shall be evidenced to the Trustee by promptly filing with the Trustee
a copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing provisions.
"Voting Stock" means with respect to any Person, Capital Stock of any
class or kind ordinarily having the power to vote for the election of directors,
managers or other voting members of the governing body of such Person.
"Warrants" means warrants issued pursuant to the Warrant Agreement,
dated as of March 6, 1997, between the Company and The Bank of New York.
"Wholly Owned" means, with respect to any Subsidiary of any Person, the
ownership of all of the outstanding Capital Stock of such Subsidiary (other than
any director's qualifying shares or Investments by foreign nationals mandated by
applicable law) by such Person or one or more Wholly Owned Subsidiaries of such
Person.
SECTION 1.02 Incorporation by Reference of Trust Indenture
Act. Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"indenture notes" means the Notes;
"indenture note holder" means a Holder or a Noteholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee; and
"obligor" on the indenture securities means the Company or any
other obligor on the Notes.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by a rule of the
Commission and not otherwise defined herein have the meanings assigned to them
therein.
SECTION 1.03 Rules of Construction. Unless the context
otherwise requires:
(i) a term has the meaning assigned to it;
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25
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and words in
the plural include the singular;
(v) provisions apply to successive events and transactions;
(vi) "herein," "hereof" and other words of similar import
refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision;
(vii) all ratios and computations based on GAAP contained in
this Indenture shall be computed in accordance with the definition of
GAAP set forth in Section 1.01; and
(viii) all references to Sections or Articles refer to
Sections or Articles of this Indenture unless otherwise indicated.
ARTICLE TWO
THE NOTES
SECTION 2.01 Form and Dining. The Notes and the Trustee's
certificate of authentication shall be substantially in the form annexed hereto
as Exhibit A with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture. The Notes may
have notations, legends or endorsements required by law, stock exchange or
securities depository agreements to which the Company is subject or usage. The
Company shall approve the form of the Notes and any notation, legend or
endorsement on the Notes. Each Note shall be dated the date of its
authentication.
The terms and provisions contained in the form of the Notes
annexed hereto as Exhibit A shall constitute, and are hereby expressly made, a
part of this Indenture. To the extent applicable, the Company and the Trustee,
by their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
Notes offered and sold in reliance on Rule 144A shall be
issued initially in the form of one or more permanent global Notes in registered
form, substantially in the form set forth in Exhibit A (collectively, the "U.S.
Global Notes"), deposited with the Trustee, as custodian for the Depositary,
duly executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of the U.S. Global Notes may from time
to
<PAGE> 32
26
time be increased or decreased by adjustments made on the records of the
Trustee, as custodian for the Depositary or its nominee, as hereinafter
provided.
Notes offered and sold in offshore transactions in reliance on
Regulation S shall be issued initially in the form of one or more permanent
global Notes in registered form substantially in the form set forth in Exhibit A
(the "Offshore Global Notes") deposited with the Trustee, as custodian for the
Depositary, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount at maturity of the Offshore
Global Notes may from time to time be increased or decreased by adjustments made
on the records of the Trustee, as custodian for the Depositary or its nominee,
as hereinafter provided.
Notes offered and sold in reliance on Regulation D under the
Securities Act shall be issued in the form of permanent certificated Notes in
registered form in substantially the form set forth in Exhibit A (the "U.S.
Physical Notes"). Notes issued pursuant to Section 2.07 in exchange for
interests in the Offshore Global Note shall be in the form of permanent
certificated Notes in registered form substantially in the form set forth in
Exhibit A (the "Offshore Physical Notes").
The Offshore Physical Notes and U.S. Physical Notes are
sometimes collectively herein referred to as the "Physical Notes". The U.S.
Global Notes and the Offshore Global Notes are sometimes collectively referred
to herein as the "Global Notes".
The definitive Notes shall be typed, printed, lithographed or
engraved or produced by any combination of these methods or may be produced in
any other manner permitted by the rules of any securities exchange on which the
Notes may be listed, all as determined by the Officers executing such Notes, as
evidenced by their execution of such Notes.
SECTION 2.02. Restrictive Legends. Unless and until a Note is
exchanged for an Exchange Note or sold in connection with an effective
Registration Statement pursuant to the Registration Rights Agreement, (i) each
U.S. Global Note and each U.S. Physical Note shall bear the legend, set forth
below on the face thereof and (ii) each Offshore Physical Note and each Offshore
Global Note shall bear the legend set forth below on the face thereof until at
least the 41st day after the Closing Date and receipt by the Company and the
Trustee of a certificate substantially in the form of Exhibit B hereto:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE.
BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS
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27
DEFINED IN RULE 144A UNDER THE SECURITIES ACT), OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2),
(3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL
ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S
UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT, WITHIN THE TIME
PERIOD REFERRED TO IN RULE 144(k) UNDER THE SECURITIES ACT, RESELL OR
OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO NEXTEL INTERNATIONAL, INC.
(THE "COMPANY") OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED
INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF
WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS
IN RESPECT OF AN AGGREGATE ACCRETED VALUE AT THE TIME OF TRANSFER OF
NOTES OF LESS THAN $100,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT,
(D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION
FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON
TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT
OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN THE
TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE
BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH
TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. IF THE PROPOSED
TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST,
PRIOR TO SUCH TRANSFER, FURNISH TO EACH OF THE TRUSTEE AND THE COMPANY
SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF
THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE
TERMS "OFFSHORE TRANSACTION", "UNITED STATES" AND "U.S. PERSON" HAVE
THE MEANINGS GIVEN TO THEM BY REGULATION S
<PAGE> 34
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UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING
THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN
VIOLATION OF THE FOREGOING RESTRICTIONS.
Each Global Note, whether or not an Exchange Note, shall also bear the
following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY OR SUCH OTHER REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN SECTION 2.08 OF THE INDENTURE.
SECTION 2.03. Execution, Authentication and Denominations. The
Notes shall be executed by two Officers of the Company. The signature of any of
these Officers on the Notes may be by facsimile or manual signature in the name
and on behalf of the Company.
If an Officer whose signature is on a Note no longer holds
that office at the time the Trustee or authenticating agent authenticates the
Note, the Note shall be valid nevertheless.
A Note shall not be valid until the Trustee or authenticating
agent manually signs the certificate of authentication on the Note. The
signature shall be conclusive evidence that the Note has been authenticated
under this Indenture.
<PAGE> 35
29
At any time and from time to time after the execution of this
Indenture, the Trustee or an authenticating agent shall upon receipt of a
Company Order authenticate for original issue Notes in the aggregate principal
amount specified in such Company Order; provided that the Trustee shall be
entitled to receive an Officers' Certificate and an Opinion of Counsel of the
Company in connection with such authentication of Notes. Such Company Order
shall specify the amount of Notes to be authenticated and the date on which the
original issue of Notes is to be authenticated and in case of an issuance of
Notes pursuant to Section 2.15, shall certify that such issuance is in
compliance with Article Four.
The Trustee may appoint an authenticating agent to
authenticate Notes. An authenticating agent may authenticate Notes whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such authenticating agent. An authenticating
agent has the same rights as an Agent to deal with the Company or an Affiliate
of the Company.
The Notes shall be issuable only in registered form without
coupons and only in denominations of $1,000 in principal amount at maturity and
any integral multiple of $1,000 in excess thereof.
SECTION 2.04. Registrar and Paying Agent. The Company shall
maintain an office or agency where Notes may be presented for registration of
transfer or for exchange (the "Registrar"), an office or agency where Notes may
be presented for payment (the "Paying Agent") and an office or agency where
notices and demands to or upon the Company in respect of the Notes and this
Indenture may be served, which shall be in the Borough of Manhattan, The City of
New York. The Company shall cause the Registrar to keep a register of the Notes
and of their transfer and exchange (the "Note Register"). The Company may have
one or more co-Registrars and one or more additional Paying Agents.
The Company shall enter into an appropriate agency agreement
with any Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall give
prompt written notice to the Trustee of the name and address of any such Agent
and any change in the address of such Agent. If the Company fails to maintain a
Registrar, Paying Agent and/or agent for service of notices and demands, the
Trustee shall act as such Registrar, Paying Agent and/or agent for service of
notices and demands. The Company may remove any Agent upon written notice to
such Agent and the Trustee; provided that no such removal shall become effective
until (i) the acceptance of an appointment by a successor Agent to such Agent as
evidenced by an appropriate agency agreement entered into by the Company and
such successor Agent and delivered to the Trustee or (ii) notification to the
Trustee that the Trustee shall serve as such Agent until the appointment of a
successor Agent in accordance with clause (i) of this proviso. The Company, any
Subsidiary of the Company, or any Affiliate of any of them may act as Paying
Agent, Registrar or co-Registrar, and/or agent for service of notice and
demands.
<PAGE> 36
30
The Company initially appoints the Trustee as Registrar,
Paying Agent, authenticating agent and agent for service of notice and demands.
If, at any time, the Trustee is not the Registrar, the Registrar shall make
available to the Trustee on or before each Interest Payment Date and at such
other times as the Trustee may reasonably request, the names and addresses of
the Holders as they appear in the Note Register.
SECTION 2.05. Paying Agent to Hold Money in Trust. Not later
than each due date of the principal, premium, if any, and interest on any Notes,
the Company shall deposit with the Paying Agent money in immediately available
funds sufficient to pay such principal, premium, if any, and interest so
becoming due. The Company shall require each Paying Agent other than the Trustee
to agree in writing that such Paying Agent shall hold in trust for the benefit
of the Holders or the Trustee all money held by the Paying Agent for the payment
of principal of, premium, if any, and interest on the Notes (whether such money
has been paid to it by the Company or any other obligor on the Notes), and such
Paying Agent shall promptly notify the Trustee of any default by the Company (or
any other obligor on the Notes) in making any such payment. The Company at any
time may require a Paying Agent to pay all money held by it to the Trustee and
account for any funds disbursed, and the Trustee may at any time during the
continuance of any payment default, upon written request to a Paying Agent,
require such Paying Agent to pay all money held by it to the Trustee and to
account for any funds disbursed. Upon doing so, the Paying Agent shall have no
further liability for the money so paid over to the Trustee. If the Company or
any Subsidiary of the Company or any Affiliate of any of them acts as Paying
Agent, it will, on or before each due date of any principal of, premium, if any,
or interest on the Notes, segregate and hold in a separate trust fund for the
benefit of the Holders a sum of money sufficient to pay such principal, premium,
if any, or interest so becoming due until such sum of money shall be paid to
such Holders or otherwise disposed of as provided in this Indenture, and will
promptly notify the Trustee of its action or failure to act.
SECTION 2.06. Transfer and Exchange. The Notes are issuable
only in registered form. A Holder may transfer a Note only by written
application to the Registrar stating the name of the proposed transferee and
otherwise complying with the terms of this Indenture. No such transfer shall be
effected until, and such transferee shall succeed to the rights of a Holder only
upon, final acceptance and registration of the transfer by the Registrar in the
Note Register. Prior to the registration of any transfer by a Holder as provided
herein, the Company, the Trustee, and any agent of the Company shall treat the
person in whose name the Note is registered as the owner thereof for all
purposes whether or not the Note shall be overdue, and neither the Company, the
Trustee, nor any such agent shall be affected by notice to the contrary.
Furthermore, any Holder of a Global Note shall, by acceptance of such Global
Note, agree that transfers of beneficial interests in such Global Note may be
effected only through a book entry system maintained by the Holder of such
Global Note (or its agent) and that ownership of a beneficial interest in the
Note shall be required to be reflected in a book entry.
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31
When Notes are presented to the Registrar or a co-Registrar with a request to
register the transfer or to exchange them for an equal principal amount of Notes
of other authorized denominations (including an exchange of Notes for Exchange
Notes), the Registrar shall register the transfer or make the exchange as
requested if its requirements for such transactions are met; provided that no
exchanges of Notes for Exchange Notes shall occur until a Registration Statement
shall have been declared effective by the Commission and that any Notes that are
exchanged for Exchange Notes shall be cancelled by the Trustee. To permit
registrations of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Notes at the Registrar's request. No service charge
shall be made for any registration of transfer or exchange or redemption of the
Notes, but the Company may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
(other than any such transfer taxes or other similar governmental charge payable
upon exchanges pursuant to Section 2.11, 3.08 or 9.04).
The Registrar shall not be required (i) to issue, register the
transfer of or exchange any Note during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Notes selected for redemption under Section 3.03 and ending at the close of
business on the day of such mailing, or (ii) to register the transfer of or
exchange any Note so selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part.
SECTION 2.07. Book-Entry Provisions for Global Notes. (a) The
U.S. Global Note and Offshore Global Note initially shall (i) be registered in
the name of the Depositary for such Global Notes or the nominee of such
Depositary, (ii) be delivered to the Trustee as custodian for such Depositary
and (iii) bear legends as set forth in Section 2.02.
Members of, or participants in, the Depositary ("Agent
Members") shall have no rights under this Indenture with respect to any Global
Note held on their behalf by the Depositary, or the Trustee as its custodian, or
under the Global Note, and the Depositary may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the absolute owner of
such Global Note for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by the Depositary or impair, as between the
Depositary and its Agent Members, the operation of customary practices governing
the exercise of the rights of a holder of any Note.
(b) Transfers of a Global Note shall be limited to transfers
of such Global Note in whole, but not in part, to the Depositary, its successors
or their respective nominees. Interests of beneficial owners in a Global Note
may be transferred in accordance with the rules and procedures of the Depositary
and the provisions of Section 2.08. In addition, U.S. Physical Notes and
Offshore Physical Notes shall be transferred to all beneficial owners in
exchange for
<PAGE> 38
32
their beneficial interests in the U.S. Global Note or the Offshore Global Note,
respectively, if (i) the Depositary notifies the Company that it is unwilling or
unable to continue as Depositary for the U.S. Global Note or the Offshore Global
Note, as the case may be, and a successor depositary is not appointed by the
Company within 90 days of such notice, (ii) an Event of Default has occurred and
is continuing and the Registrar has received a request therefor from the
Depositary or (iii) in accordance with the rules and procedures of the
Depositary and the provisions of Section 2.08.
(c) Any beneficial interest in one of the Global Notes that is
transferred to a person who takes delivery in the form of an interest in the
other Global Note will, upon transfer, cease to be an interest in such Global
Note and become an interest in the other Global Note and, accordingly, will
thereafter be subject to all transfer restrictions, if any, and other procedures
applicable to beneficial interests in such other Global Note for as long as it
remains such an interest.
(d) In connection with any transfer of a portion of the
beneficial interests in the U.S. Global Note or Offshore Global Note to
beneficial owners pursuant to paragraph (b) of this Section, the Registrar shall
reflect on its books and records the date and a decrease in the principal amount
of the U.S. Global Note or Offshore Global Note in an amount equal to the
principal amount of the beneficial interest in the U.S. Global Note or Offshore
Global Note to be transferred, and the Company shall execute, and the Trustee
shall authenticate and deliver, one or more U.S. Physical Notes or Offshore
Physical Notes, as the case may be, of like tenor and amount.
(e) In connection with the transfer of the entire U.S. Global
Note or Offshore Global Note to beneficial owners pursuant to paragraph (b) of
this Section, the U.S. Global Note or Offshore Global Note, as the case may be,
shall be deemed to be surrendered to the Trustee for cancellation, and the
Company shall execute, and the Trustee shall authenticate and deliver, to each
beneficial owner identified by the Depositary in exchange for its beneficial
interest in the U.S. Global Note or Offshore Global Note, as the case may be, an
equal aggregate principal amount of U.S. Physical Notes or Offshore Physical
Notes, as the case may be, of authorized denominations.
(f) Any U.S. Physical Note delivered in exchange for an
interest in the U.S. Global Note pursuant to paragraph (b), (d) or (e) of this
Section shall, except as otherwise provided by paragraph (e) of Section 2.08,
bear the legend regarding transfer restrictions applicable to the U.S. Physical
Note set forth in Section 2.02.
(g) Any Offshore Physical Note delivered in exchange for an
interest in the Offshore Global Note pursuant to paragraph (b), (d) or (e) of
this Section shall, except as otherwise provided by paragraph (e) of Section
2.08, bear the legend regarding transfer
<PAGE> 39
33
restrictions applicable to the Offshore Physical Note set forth in Section 2.02.
(h) The registered holder of a Global Note may grant proxies
and otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Notes.
SECTION 2.08. Special Transfer Provisions. Unless and until a
Note is exchanged for an Exchange Note or sold in connection with an effective
Registration Statement pursuant to the Registration Rights Agreement, the
following provisions shall apply:
(a) Transfers to Non-QIB Institutional Accredited Investors.
The following provisions shall apply with respect to the registration of any
proposed transfer of a Note to any Institutional Accredited Investor which is
not a QIB (excluding Non-U.S. Persons):
(i) The Registrar shall register the transfer of any Note,
whether or not such Note bears the Private Placement Legend, if (x) the
requested transfer is after the time period referred to in Rule 144(k)
under the Securities Act or (y) the proposed transferee has delivered
to the Registrar (A) a certificate substantially in the form of Exhibit
C hereto and (B) if the aggregate Accreted Value of the Notes at the
time of transfer is less than $100,000, an opinion of counsel
acceptable to the Company that such transfer is in compliance with the
Securities Act.
(ii) If the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Note, upon receipt by the
Registrar of (x) the documents, if any, required by paragraph (i) and
(y) instructions given in accordance with the Depositary's and the
Registrar's procedures, the Registrar shall reflect on its books and
records the date and a decrease in the principal amount at maturity of
the U.S. Global Note in an amount equal to the principal amount at
maturity of the beneficial interest in the U.S. Global Note to be
transferred, and the Company shall execute, and the Trustee shall
authenticate and deliver, one or more U.S. Physical Certificates of
like tenor and amount.
(b) Transfers to QIBs. The following provisions shall apply
with respect to the registration of any proposed transfer of a U.S. Physical
Note, an interest in the U.S. Global Note or an interest in an Offshore Global
Note prior to the removal of the Private Placement Legend to a QIB (excluding
Non-U.S.
Persons):
(i) If the Note to be transferred consists of (x) either (A)
an interest in an Offshore Global Note prior to the removal of the
Private Placement Legend or (B) U.S. Physical Notes, the Registrar
shall register the transfer if such transfer is being made by a
proposed transferor who has checked the box provided for on the form of
Note stating, or
<PAGE> 40
34
has otherwise advised the Company and the Registrar in writing, that
the sale has been made in compliance with the provisions of Rule 144A
to a transferee who has signed the certification provided for on the
form of Note stating, or has otherwise advised the Company and the
Registrar in writing, that it is purchasing the Note for its own
account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a QIB within
the meaning of Rule 144A, and is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has received
such information regarding the Company as it has requested pursuant to
Rule 144A or has determined not to request such information and that it
is aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from registration
provided by Rule 144A or (y) an interest in the U.S. Global Note, the
transfer of such interest may be effected only through the book entry
system maintained by the Depositary.
(ii) If the proposed transferee is an Agent Member, and the
Note to be transferred consists of U.S. Physical Notes, upon receipt by
the Registrar of the documents referred to in clause (i) and
instructions given in accordance with the Depositary's and the
Registrar's procedures, the Registrar shall reflect on its books and
records the date and an increase in the principal amount at maturity of
the U.S. Global Note in an amount equal to the principal amount at
maturity of the U.S. Physical Notes, to be transferred, and the Trustee
shall cancel the U.S. Physical Note so transferred.
(c) Transfers of Interests in the Offshore Global Note or
Offshore Physical Notes. The following provisions shall apply with respect to
registration of any proposed transfer of interests in the Offshore Global Note
or Offshore Physical Notes:
(i) prior to the removal of the Private Placement Legend from
a Offshore Global Note or Offshore Physical Note pursuant to Section
2.02, the Registrar shall refuse to register such transfer unless such
transfer complies with Section 2.08(b) or Section 2.08(d), as the case
may be; and
(ii) after such removal, the Registrar shall register the
transfer of any such Note without requiring any additional
certification.
(d) Transfers to Non-U.S. Persons at Any Time. The following
provisions shall apply with respect to any transfer of a Note to a Non-U.S.
Person:
(i) The Registrar shall register any proposed transfer to any
Non-U.S. Person if the Note to be transferred is a U.S. Physical Note
or an interest in the U.S. Global Note, upon receipt of a certificate
substantially in the form of Exhibit D from the proposed transferor.
<PAGE> 41
35
(ii) (a) If the proposed transferor is an Agent Member holding
a beneficial interest in the U.S. Global Note, upon receipt by the
Registrar of (x) the documents, if any, required by paragraph (i) and
(y) instructions in accordance with the Depositary's and the
Registrar's procedures, the Registrar shall reflect on its books and
records the date and a decrease in the principal amount at maturity of
the U.S. Global Note in an amount equal to the principal amount at
maturity of the beneficial interest in the U.S. Global Note to be
transferred, and (b) if the proposed transferee is an Agent Member,
upon receipt by the Registrar of instructions given in accordance with
the Depositary's and the Registrar's procedures, the Registrar shall
reflect on its books and records the date and an increase in the
principal amount at maturity of the Offshore Global Note in an amount
equal to the principal amount at maturity of the U.S. Physical Notes or
the U.S. Global Note, as the case may be, to be transferred, and the
Trustee shall cancel the Physical Note, if any, so transferred or
decrease the amount of the U.S. Global Note.
(e) Private Placement Legend. Upon the transfer, exchange or
replacement of Notes not bearing the Private Placement Legend, the Registrar
shall deliver Notes that do not bear the Private Placement Legend. Upon the
transfer, exchange or replacement of Notes bearing the Private Placement Legend,
the Registrar shall deliver only Notes that bear the Private Placement Legend
unless either (i) the circumstances contemplated by paragraphs (a)(i)(x) or
(c)(ii) of this Section 2.08 exist or (ii) there is delivered to the Registrar
an Opinion of Counsel reasonably satisfactory to the Company and the Trustee to
the effect that neither such legend nor the related restrictions on transfer are
required in order to maintain compliance with the provisions of the Securities
Act.
(g) General. By its acceptance of any Note bearing the Private
Placement Legend, each Holder of such a Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private Placement
Legend and agrees that it will transfer such Note only as provided in this
Indenture. The Registrar shall not register a transfer of any Note unless such
transfer complies with the restrictions on transfer of such Note set forth in
this Indenture. In connection with any transfer of Notes, each Holder agrees by
its acceptance of the Notes to furnish the Registrar or the Company such
certifications, legal opinions or other information as either of them may
reasonably require to confirm that such transfer is being made pursuant to an
exemption from, or a transaction not subject to, the registration requirements
of the Securities Act; provided that the Registrar shall not be required to
determine (but may rely on a determination made by the Company with respect to)
the sufficiency of any such certifications, legal opinions or other information.
The Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 2.07 or this Section
2.08. The Company shall have the right to inspect and make copies of all such
letters, notices or other written communications
<PAGE> 42
36
at any reasonable time upon the giving of reasonable written notice to the
Registrar.
SECTION 2.09. Replacement Notes. If a mutilated Note is
surrendered to the Trustee or if the Holder claims that the Note has been lost,
destroyed or wrongfully taken, the Company shall issue and the Trustee shall
authenticate a replacement Note of like tenor and amount and bearing a number
not contemporaneously outstanding; provided that the requirements of this
Section 2.09 are met. If required by the Trustee or the Company, an indemnity
bond must be furnished that is sufficient in the judgment of both the Trustee
and the Company to protect the Company, the Trustee or any Agent from any loss
that any of them may suffer if a Note is replaced. The Company may charge such
Holder for its expenses and the expenses of the Trustee in replacing a Note. In
case any such mutilated, lost, destroyed or wrongfully taken Note has become or
is about to become due and payable, the Company in its discretion may pay such
Note instead of issuing a new Note in replacement thereof.
Every replacement Note is an additional obligation of the
Company and shall be entitled to the benefits of this Indenture.
SECTION 2.10. Outstanding Notes. Notes outstanding at any time
are all Notes that have been authenticated by the Trustee except for those
cancelled by it, those delivered to it for cancellation and those described in
this Section 2.10 as not outstanding.
If a Note is paid pursuant to Section 2.09, it ceases to be
outstanding. If a Note is replaced pursuant to Section 2.09, it ceases to be
outstanding unless and until the Trustee and the Company receive proof
satisfactory to them that the replaced Note is held by a bona fide purchaser.
If the Paying Agent (other than the Company or an Affiliate of
the Company) holds on the maturity date money sufficient to pay Notes payable on
that date, then on and after that date such Notes cease to be outstanding and
interest on them shall cease to accrue.
A Note does not cease to be outstanding because the Company or
one of its Affiliates holds such Note, provided, however, that, in determining
whether the Holders of the requisite principal amount of the outstanding Notes
have given any request, demand, authorization, direction, notice, consent or
waiver hereunder, Notes owned by the Company or any other obligor upon the Notes
or any Affiliate of the Company or of such other obligor shall be disregarded
and deemed not to be outstanding, except that, in determining whether the
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Notes which a
Responsible Officer of the Trustee knows to be so owned shall be so disregarded.
Notes so owned which have been pledged in good faith may be regarded as
outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Notes and that the pledgee is not
the Company or any other obligor upon the Notes or any Affiliate of the Company
or of such other obligor.
<PAGE> 43
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SECTION 2.11. Temporary Notes. Until definitive Notes are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Notes. Temporary Notes shall be substantially in the form of
definitive Notes but may have insertions, substitutions, omissions and other
variations determined to be appropriate by the Officers executing the temporary
Notes, as evidenced by their execution of such temporary Notes. If temporary
Notes are issued, the Company will cause definitive Notes to be prepared without
unreasonable delay. After the preparation of definitive Notes, the temporary
Notes shall be exchangeable for definitive Notes upon surrender of the temporary
Notes at the office or agency of the Company designated for such purpose
pursuant to Section 4.02, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Notes the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor a like principal
amount of definitive Notes of authorized denominations. Until so exchanged, the
temporary Notes shall be entitled to the same benefits under this Indenture as
definitive Notes.
SECTION 2.12. Cancellation. The Company at any time may
deliver to the Trustee for cancellation any Notes previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee for cancellation any Notes previously
authenticated hereunder which the Company has not issued and sold. The Registrar
and the Paying Agent shall forward to the Trustee any Notes surrendered to them
for transfer, exchange or payment. The Trustee shall cancel all Notes
surrendered for transfer, exchange, payment or cancellation in accordance with
its normal procedure.
SECTION 2.13. CUSIP Numbers. The Company in issuing the Notes
may use "CUSIP," "CINS" or "ISIN" numbers (if then generally in use), and the
Trustee shall use CUSIP, CINS or ISIN numbers, as the case may be, in notices of
redemption or exchange as a convenience to Holders; provided that any such
notice shall state that no representation is made as to the correctness of such
numbers either as printed on the Notes or as contained in any notice of
redemption or exchange and that reliance may be placed only on the other
identification numbers printed on the Notes. The Company shall promptly notify
the Trustee of any change in any of such numbers.
SECTION 2.14. Defaulted Interest. If the Company defaults in
a payment of interest on the Notes, it shall pay, or shall deposit with the
Paying Agent money in immediately available funds sufficient to pay the
defaulted interest, plus (to the extent lawful) any interest payable on the
defaulted interest, to the Persons who are Holders on a subsequent special
record date. A special record date, as used in this Section 2.14 with respect to
the payment of any defaulted interest, shall mean the 15th day next preceding
the date fixed by the Company for the payment of defaulted interest, whether or
not such day is a Business Day. At least 15 days before the subsequent special
record date, the Company shall mail to each Holder and to the
<PAGE> 44
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Trustee a notice that states the subsequent special record date, the payment
date and the amount of defaulted interest to be paid.
SECTION 2.15. Issuance of Additional Notes. The Company may,
subject to Article Four of this Indenture, issue additional Notes under this
Indenture. The Notes issued on the Closing Date and any additional Notes
subsequently issued shall be treated as a single class for all purposes under
this Indenture. In addition, any other issue of unsubordinated, unsecured notes
shall vote together with the Notes as a single class to the extent provided in
the definition of "Required Consents."
ARTICLE THREE
REDEMPTION
SECTION 3.01. Right of Redemption. (a) The Notes may be
redeemed, at the Company's option, in whole or in part, at any time or from time
to time, on or after April 15, 2003 and prior to maturity, upon not less than 30
nor more than 60 days' prior notice mailed by first class mail to each Holder's
last address as it appears in the Note Register, at the following Redemption
Prices (expressed in percentages of principal amount at maturity), plus accrued
and unpaid interest, if any, to the Redemption Date (subject to the right of
Holders of record on the relevant Regular Record Date that is on or prior to the
Redemption Date to receive interest due on an Interest Payment Date), if
redeemed during the 12-month period commencing April 15, of the years set forth
below:
<TABLE>
<CAPTION>
Redemption
Year Price
-------- ------------
<S> <C>
2003 106.063%
2004 104.042%
2005 102.021%
2006 and thereafter 100.000%
</TABLE>
(b) In addition, at any time prior to April 15, 2001, the
Company may redeem up to 35% of the principal amount at maturity of the Notes
with the Net Cash Proceeds of one or more sales by the Company of its Capital
Stock (other than Redeemable Stock), at any time as a whole or from time to time
in part, at a Redemption Price (expressed as a percentage of Accreted Value on
the Redemption Date) of 112.125%, plus accrued and unpaid interest, if any, to
the Redemption Date (subject to the right of Holders of record on the relevant
Regular Record Date that is on or prior to the Redemption Date to receive
interest due on an Interest Payment Date); provided that at least $474,500,000
aggregate principal amount at maturity of Notes remains outstanding after each
such redemption and notice of such redemption is mailed to Holders of the Notes
within 60 days after the consummation of such sale or sales.
<PAGE> 45
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SECTION 3.02. Notice to Trustee. If the Company elects to
redeem Notes pursuant to Section 3.01(a) or 3.01(b), it shall notify the Trustee
in writing of the Redemption Date and the principal amount of Notes to be
redeemed.
The Company shall give each notice provided for in this
Section 3.02 in an Officers' Certificate at least 45 days before the Redemption
Date (unless a shorter period shall be satisfactory to the Trustee).
SECTION 3.03. Selection of Notes to Be Redeemed. If less than
all of the Notes are to be redeemed at any time, the Trustee shall select the
Notes to be redeemed in compliance with the requirements, as certified to it by
the Company, of the principal national securities exchange, if any, on which the
Notes are listed or, if the Notes are not listed on a national securities
exchange, by lot or by such other method as the Trustee in its sole discretion
shall deem fair and appropriate; provided that no Notes of $1,000 in principal
amount at maturity or less shall be redeemed in part.
The Trustee shall make the selection from the Notes
outstanding and not previously called for redemption. Notes in denominations of
$1,000 in principal amount at maturity may only be redeemed in whole. The
Trustee may select for redemption portions (equal to $1,000 in principal amount
at maturity or any integral multiple thereof) of Notes that have denominations
larger than $1,000 in principal amount at maturity. Provisions of this Indenture
that apply to Notes called for redemption also apply to portions of Notes called
for redemption. The Trustee shall notify the Company and the Registrar promptly
in writing of the Notes or portions of Notes to be called for redemption.
SECTION 3.04. Notice of Redemption. With respect to any
redemption of Notes pursuant to Section 3.01(a) or 3.01(b), at least 30 days but
not more than 60 days before a Redemption Date, the Company shall mail a notice
of redemption by first class mail to each Holder whose Notes are to be redeemed.
The notice shall identify the Notes (including CUSIP, CINS or
ISIN number(s)) to be redeemed and shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the name and address of the Paying Agent;
(iv) that Notes called for redemption must be surrendered
to the Paying Agent in order to collect the Redemption Price;
<PAGE> 46
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(v) that, unless the Company defaults in making the redemption
payment, interest on Notes called for redemption ceases to accrue on
and after the Redemption Date and the only remaining right of the
Holders is to receive payment of the Redemption Price plus accrued
interest to the Redemption Date upon surrender of the Notes to the
Paying Agent;
(vi) that, if any Note is being redeemed in part, the portion
of the principal amount (equal to $1,000 in principal amount at
maturity or any integral multiple thereof) of such Note to be redeemed
and that, on and after the Redemption Date, upon surrender of such
Note, a new Note or Notes in principal amount at maturity equal to the
unredeemed portion thereof will be reissued; and
(vii) that, if any Note contains a CUSIP, CINS or ISIN number
as provided in Section 2.13, no representation is being made as to the
correctness of the CUSIP, CINS or ISIN number either as printed on the
Notes or as contained in the notice of redemption and that reliance may
be placed only on the other identification numbers printed on the
Notes.
At the Company's request (which request may be revoked by the
Company at any time prior to the time at which the Trustee shall have given such
notice to the Holders), made in writing to the Trustee at least 30 days (or such
shorter period as shall be satisfactory to the Trustee) before a Redemption
Date, the Trustee shall give the notice of redemption in the name and at the
expense of the Company. If, however, the Company gives such notice to the
Holders, the Company shall concurrently deliver to the Trustee an Officers'
Certificate stating that such notice has been given.
SECTION 3.05. Effect of Notice of Redemption. Once notice of
redemption is mailed, Notes called for redemption become due and payable on the
Redemption Date and at the Redemption Price. Upon surrender of any Notes to the
Paying Agent, such Notes shall be paid at the Redemption Price, plus accrued
interest, if any, to the Redemption Date.
Notice of redemption shall be deemed to be given when mailed,
whether or not the Holder receives the notice. In any event, failure to give
such notice, or any defect therein, shall not affect the validity of the
proceedings for the redemption of Notes held by Holders to whom such notice was
properly given.
SECTION 3.06. Deposit of Redemption Price. On or prior to any
Redemption Date, the Company shall deposit with the Paying Agent (or, if the
Company is acting as its own Paying Agent, shall segregate and hold in trust as
provided in Section 2.05) money sufficient to pay the Redemption Price of and
accrued interest on all Notes to be redeemed on that date other
<PAGE> 47
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than Notes or portions thereof called for redemption on that date that have been
delivered by the Company to the Trustee for cancellation.
SECTION 3.07. Payment of Notes Called for Redemption. If
notice of redemption has been given in the manner provided above, the Notes or
portion of Notes specified in such notice to be redeemed shall become due and
payable on the Redemption Date at the Redemption Price stated therein, together
with accrued interest to such Redemption Date, and on and after such date
(unless the Company shall default in the payment of such Notes at the Redemption
Price and accrued interest to the Redemption Date, in which case the principal,
until paid, shall bear interest from the Redemption Date at the rate prescribed
in the Notes), such Notes shall cease to accrue interest. Upon surrender of any
Note for redemption in accordance with a notice of redemption, such Note shall
be paid and redeemed by the Company at the Redemption Price, together with
accrued interest, if any, to the Redemption Date; provided that installments of
interest whose Stated Maturity is on or prior to the Redemption Date shall be
payable to the Holders registered as such at the close of business on the
relevant Regular Record Date.
SECTION 3.08. Notes Redeemed in Part. Upon surrender of any
Note that is redeemed in part, the Company shall execute and the Trustee shall
authenticate and deliver to the Holder a new Note equal in principal amount to
the unredeemed portion of such surrendered Note.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes. The Company shall pay the
principal of, premium, if any, and interest on the Notes on the dates and in the
manner provided in the Notes and this Indenture. An installment of principal,
premium, if any, or interest shall be considered paid on the date due if the
Trustee or Paying Agent (other than the Company, a Subsidiary of the Company, or
any Affiliate of any of them) holds on that date money designated for and
sufficient to pay the installment. If the Company or any Subsidiary of the
Company or any Affiliate of any of them, acts as Paying Agent, an installment of
principal, premium, if any, or interest shall be considered paid on the due date
if the entity acting as Paying Agent complies with the last sentence of Section
2.05. As provided in Section 6.09, upon any bankruptcy or reorganization
procedure relative to the Company, the Trustee shall serve as the Paying Agent
and conversion agent, if any, for the Notes.
The Company shall pay interest on overdue principal, premium,
if any, and interest on overdue installments of interest, to the extent lawful,
at the rate per annum specified in the Notes.
<PAGE> 48
42
SECTION 4.02. Maintenance of Office or Agency. The Company
will maintain in the Borough of Manhattan, The City of New York an office or
agency where Notes may be surrendered for registration of transfer or exchange
or for presentation for payment and where notices and demands to or upon the
Company in respect of the Notes and this Indenture may be served. The Company
will give prompt written notice to the Trustee of the location, and any change
in the location, of such office or agency. If at any time the Company shall fail
to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the address of the Trustee set forth in Section
10.02.
The Company may also from time to time designate one or more
other offices or agencies where the Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
provided that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York for such purposes. The Company will give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
The Company hereby initially designates the Corporate Trust
Office of the Trustee, located in the Borough of Manhattan, The City of New
York, as such office of the Company in accordance with Section 2.04.
SECTION 4.03. Limitation on Indebtedness. (a) The Company will
not, and will not permit any Restricted Group Member to, Incur any Indebtedness
(other than the Notes and Indebtedness existing on the Closing Date); provided
that the Company may Incur Indebtedness, and any Restricted Group Member may
Incur Acquired Indebtedness, if, after giving effect to the Incurrence of such
Indebtedness and the receipt and application of the proceeds therefrom, the
Consolidated Leverage Ratio would be less than 9 to 1, for Indebtedness Incurred
on or prior to December 31, 1999, or 7 to 1, for Indebtedness Incurred
thereafter.
Notwithstanding the foregoing, the Company and any Restricted Group
Member (except as specified below) may Incur each and all of the following:
(i) Indebtedness outstanding at any time in an aggregate
principal amount not to exceed $100 million, less any amount of such
Indebtedness permanently repaid as provided under Section 4.10;
(ii) Indebtedness (A) to the Company evidenced by an
unsubordinated promissory note or (B) to any Restricted Group Member;
provided that any event which results in any such Restricted Group
Member ceasing to be a Restricted Group Member or any subsequent
transfer of such Indebtedness (other than to the Company or another
Restricted Group Member) shall be deemed, in each case, to constitute
an Incurrence of such Indebtedness not permitted by this clause (ii);
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43
(iii) Indebtedness of the Company or any Restricted Group
Member issued in exchange for, or the net proceeds of which are used to
refinance or refund, then outstanding Indebtedness of the same Person
(other than Indebtedness Incurred under clause (i), (ii), (iv) or (vi)
of this paragraph) or any refinancings thereof in an amount not to
exceed the amount so refinanced or refunded (plus premiums, accrued
interest, fees and expenses); provided that Indebtedness the proceeds
of which are used to refinance or refund the Notes or Indebtedness that
is pari passu with, or subordinated in right of payment to, the Notes
shall only be permitted under this clause (iii) if (A) in case the
Notes are refinanced in part or the Indebtedness to be refinanced is
pari passu with the Notes, such new Indebtedness, by its terms or by
the terms of any agreement or instrument pursuant to which such new
Indebtedness is outstanding, is expressly made pari passu with, or
subordinate in right of payment to, the remaining Notes, (B) in case
the Indebtedness to be refinanced is subordinated in right of payment
to the Notes, such new Indebtedness, by its terms or by the terms of
any agreement or instrument pursuant to which such new Indebtedness is
issued or remains outstanding, is expressly made subordinate in right
of payment to the Notes at least to the extent that the Indebtedness to
be refinanced is subordinated to the Notes and (C) such new
Indebtedness, determined as of the date of Incurrence of such new
Indebtedness, does not mature prior to the Stated Maturity of the
Indebtedness to be refinanced or refunded, and the Average Life of such
new Indebtedness is at least equal to the remaining Average Life of the
Indebtedness to be refinanced or refunded;
(iv) Indebtedness (A) in respect of performance, surety or
appeal bonds provided in the ordinary course of business, (B) under
Currency Agreements and Interest Rate Agreements; provided that such
agreements (a) are designed solely to protect the Company or its
Restricted Group Members against fluctuations in foreign currency
exchange rates or interest rates and (b) do not increase the
Indebtedness of the obligor outstanding at any time other than as a
result of fluctuations in foreign currency exchange rates or interest
rates or by reason of fees, indemnities and compensation payable
thereunder; and (C) arising from agreements providing for
indemnification, adjustment of purchase price or similar obligations,
or from Guarantees or letters of credit, surety bonds or performance
bonds securing any obligations of the Company or any Restricted Group
Member pursuant to such agreements, in any case Incurred in connection
with the disposition of any business, assets or Restricted Group Member
(other than Guarantees of Indebtedness Incurred by any Person acquiring
all or any portion of such business, assets or Restricted Group Member
for the purpose of financing such acquisition), in a principal amount
not to exceed the gross proceeds actually received by the Company or
any Restricted Group Member in connection with such disposition;
<PAGE> 50
44
(v) Indebtedness of the Company, to the extent the net
proceeds thereof are promptly (A) used to purchase Notes tendered in
an Offer to Purchase made as a result of a Change in Control or (B)
deposited to defease the Notes as set forth in Article VIII;
(vi) Guarantees of the Notes and Guarantees of Indebtedness
of the Company by any Restricted Group Member provided the Guarantee of
such Indebtedness is permitted by and made in accordance with Section
4.07;
(vii) Indebtedness Incurred to finance the cost (including
the cost of design, development, construction, improvement,
installation or integration and all import duties) of
telecommunications network assets, equipment or inventory acquired by
the Company or a Restricted Group Member after the Closing Date; and
(viii) Indebtedness of the Company not to exceed, at any one
time outstanding, two times, or Indebtedness of a Restricted Group
Member not to exceed at any one time outstanding, one times (x) the Net
Cash Proceeds received by the Company after the Closing Date from
contributions of capital or the issuance and sale of its Capital Stock
(other than Redeemable Stock) to a Person that is not a Subsidiary of
the Company or a Restricted Affiliate, to the extent such Net Cash
Proceeds have not been used pursuant to clause (C)(2) of the first
paragraph of Section 4.04 to make a Restricted Payment and (y) 80% of
the fair market value of property other than cash received by the
Company after the Closing Date from contributions of capital or the
issuance and sale of its Capital Stock (other than Redeemable Stock) to
a Person that is not a Subsidiary of the Company or a Restricted
Affiliate.
Notwithstanding the foregoing, the securities transferred to
the Company as part of the Clearnet Transaction will be deemed received by the
Company after the Closing Date.
(b) Notwithstanding any other provision of this Section 4.03,
the maximum amount of Indebtedness that the Company or a Restricted Group Member
may Incur pursuant to this Section 4.03 shall not be deemed to be exceeded, with
respect to any outstanding Indebtedness due solely to the result of fluctuations
in the exchange rates of currencies.
(c) For purposes of determining any particular amount of
Indebtedness under this Section 4.03, (1) Guarantees of, Liens securing or
obligations with respect to letters of credit supporting Indebtedness otherwise
included in the determination of such particular amount shall not be included
and (2) any Liens granted pursuant to the equal and ratable provisions referred
to in Section 4.09 shall not be treated as Indebtedness. For purposes of
determining compliance with this Section 4.03, in the event that an item of
Indebtedness meets the criteria of more than one of the types of Indebtedness
described in the above clauses, the Company, in its sole discretion, shall
classify such item of Indebtedness and only be required to include the amount
and type of such Indebtedness in one of such clauses.
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SECTION 4.04. Limitation on Restricted Payments. The Company
will not, and will not permit any Restricted Group Member to, directly or
indirectly, (i) declare or pay any dividend or make any distribution on or with
respect to its Capital Stock (other than (x) dividends or distributions payable
solely in shares of its Capital Stock (other than Redeemable Stock) or in
options, warrants or other rights to acquire shares of such Capital Stock and
(y) pro rata dividends or distributions on Capital Stock of Restricted Group
Members held by Persons other than the Company or other Restricted Group
Members, provided that the Company or any other Restricted Group Members holding
shares of Capital Stock of such dividend or distribution paying Restricted Group
Member shall receive such pro rata dividends or distributions as may be due to
such other Restricted Group Members or the Company at or prior to the payment of
such pro rata dividends or distributions to such other Persons) held by Persons
other than the Company or any Restricted Group Member, (ii) purchase, redeem,
retire or otherwise acquire for value any shares of Capital Stock of (A) the
Company or an Unrestricted Subsidiary (including options, warrants or other
rights to acquire such shares of Capital Stock) held by any Person or (B) a
Restricted Group Member (including options, warrants or other rights to acquire
such shares of Capital Stock) held by any Affiliate of the Company (other than a
Restricted Group Member) or any holder (or any Affiliate of such holder) of 5%
or more of the Capital Stock of the Company, (iii) make any voluntary or
optional principal payment, or voluntary or optional redemption, repurchase,
defeasance, or other acquisition or retirement for value, of Indebtedness of the
Company that is subordinated in right of payment to the Notes (other than the
purchase, repurchase or the acquisition of Indebtedness in anticipation of
satisfying a sinking fund obligation, principal installment or final maturity,
in any case due within one year of the date of acquisition) or (iv) make any
Investment, other than a Permitted Investment, in any Person (such payments or
any other actions described in clauses (i) through (iv) being collectively
"Restricted Payments") if, at the time of, and after giving effect to, the
proposed Restricted Payment: (A) a Default or Event of Default shall have
occurred and be continuing, (B) except with respect to Investments, the Company
could not Incur at least $1.00 of Indebtedness under the first paragraph of
Section 4.03 or (C) the aggregate amount of all Restricted Payments (the amount,
if other than in cash, to be determined in good faith by the Board of Directors,
whose determination shall be conclusive and evidenced by a Board Resolution)
made after the Closing Date shall exceed the sum of (1) 50% of the aggregate
amount of the Adjusted Consolidated Net Income (or, if the Adjusted Consolidated
Net Income is a loss, minus 100% of the amount of such loss) (determined by
excluding income resulting from transfers of assets by the Company or a
Restricted Group Member to an Unrestricted Subsidiary or Unrestricted Affiliate)
accrued on a cumulative basis during the period (taken as one accounting period)
beginning on the first day of the fiscal quarter immediately following the
Closing Date and ending on the last day of the last fiscal quarter preceding the
Transaction Date for which reports have been filed pursuant to Section 4.17 plus
(2) the aggregate Net Cash Proceeds received by the Company after the Closing
Date from the issuance and sale permitted by this Indenture of its Capital Stock
(other than Redeemable Stock) to a Person who is not a Subsidiary or Restricted
Affiliate of the
<PAGE> 52
46
Company (except to the extent such Net Cash Proceeds are used
to Incur Indebtedness outstanding pursuant to clause (viii) of the second
paragraph of Section 4.03) or from the issuance to a Person who is not a
Subsidiary or Restricted Affiliate of the Company of any options, warrants or
other rights to acquire Capital Stock of the Company (in each case, exclusive of
any Redeemable Stock or any options, warrants or other rights that are
redeemable at the option of the holder, or are required to be redeemed, prior to
the Stated Maturity of the Notes) plus (3) an amount equal to the net reduction
in Investments (other than reductions in Permitted Investments or reductions in
Investments made pursuant to clause (ix) of the following paragraph) in any
Person resulting from payments of interest on Indebtedness, dividends,
repayments of loans or advances, or other transfers of assets, in each case to
the Company or any Restricted Group Member or from the Net Cash Proceeds from
the sale of any such Investment (except, in each case, to the extent any such
payment or proceeds are included in Adjusted Consolidated Net Income), or from
redesignations of Unrestricted Subsidiaries as Restricted Subsidiaries of the
Company or a Restricted Affiliate or from redesignations of Unrestricted
Affiliates as Restricted Affiliates (valued in each case as provided in the
definition of "Investments"), not to exceed, in each case, the amount of
Investments previously made by the Company or any Restricted Group Member in
such Person, Unrestricted Subsidiary or Unrestricted Affiliate.
The foregoing provision shall not be violated by reason of:
(i) the payment of any dividend within 60 days after the
date of declaration thereof if, at said date of declaration, such
payment would comply with the foregoing paragraph;
(ii) the redemption, repurchase, defeasance or other
acquisition or retirement for value of Indebtedness that is
subordinated in right of payment to the Notes including premium, if
any, and accrued and unpaid interest, with the proceeds of, or in
exchange for, Indebtedness Incurred under clause (iii) of the second
paragraph of part (a) of Section 4.03;
(iii) the repurchase, redemption or other acquisition of
Capital Stock of the Company (or options, warrants or other rights to
acquire such Capital Stock) in exchange for, or out of the proceeds of
a substantially concurrent offering of, shares of Capital Stock (other
than Redeemable Stock) of the Company;
(iv) the making of any principal payment or the repurchase,
redemption, retirement, defeasance or other acquisition for value of
Indebtedness of the Company which is subordinated in right of payment
to the Notes in exchange for, or out of the proceeds of, a
substantially concurrent offering of, shares of the Capital Stock of
the Company (other than Redeemable Stock);
<PAGE> 53
47
(v) the declaration or payment of dividends on the Common
Stock of the Company following a Public Equity Offering of such Common
Stock, of up to 6% per annum of the Net Cash Proceeds received by the
Company in such Public Equity Offering;
(vi) payments or distributions, to dissenting stockholders
pursuant to applicable law, pursuant to or in connection with a
consolidation, merger or transfer of assets that complies with the
provisions of this Indenture applicable to mergers, consolidations and
transfers of all or substantially all of the property and assets of the
Company;
(vii) Investments acquired as a capital contribution to the
Company or in exchange for Capital Stock (other than Redeemable Stock)
of the Company or Capital Stock of Nextel or any of its subsidiaries
(other than the Company and its Subsidiaries);
(viii) the repurchase, redemption or other acquisition for
value of Capital Stock of the Company to the extent necessary to
prevent the loss or secure the renewal or reinstatement of any license
or franchise held by the Company or any of its Subsidiaries from any
governmental agency;
(ix) Investments in an aggregate amount not to exceed $30
million, plus reductions in such Investments (except to the extent any
such reduction is included in Adjusted Consolidated Net Income) not to
exceed the amount of the Investments previously made;
(x) Investments in a Person which has ceased to be a
Restricted Affiliate or ceases to observe any of the provisions of the
covenants applicable to it as a result of an Involuntary Event;
provided (I) such Investment is made with the proceeds of a
substantially concurrent capital contribution to, or sale of Capital
Stock (other than Redeemable Stock) of, the Company and (II) after such
Investment such Involuntary Event shall no longer continue and such
person shall be a Restricted Affiliate; or
(xi) repurchases of Warrants pursuant to a Repurchase Offer;
provided that, except in the case of clauses (i) and (iii), no Default or Event
of Default shall have occurred and be continuing or occur as a consequence of
the actions or payments set forth therein, other than with respect to clause
(x), a Default or Event of Default that will cease to exist substantially
contemporaneously with such Investment.
<PAGE> 54
48
Each Restricted Payment permitted pursuant to the preceding
paragraph (other than the Restricted Payment referred to in clause (ii) thereof
and an exchange of Capital Stock for Capital Stock or Indebtedness referred to
in clause (iii) or (iv) thereof), and the Net Cash Proceeds from any issuance of
Capital Stock referred to in clauses (iii) and (iv), shall be included in
calculating whether the conditions of clause (C) of the first paragraph of this
Section 4.04 have been met with respect to any subsequent Restricted Payments.
SECTION 4.05. Limitation on Dividend and Other Payment
Restrictions Affecting Restricted Group Members. The Company will not, and will
not permit any Restricted Group Member to, create or otherwise cause or suffer
to exist or become effective any consensual encumbrance or restriction of any
kind on the ability of any Restricted Group Member to (i) pay dividends or make
any other distributions permitted by applicable law on any Capital Stock of such
Restricted Group Member owned by the Company or any other Restricted Group
Member, (ii) pay any Indebtedness owed to the Company or any other Restricted
Group Member, (iii) make loans or advances to the Company or any other
Restricted Group Member or (iv) transfer any of its property or assets to the
Company or any other Restricted Group Member.
The foregoing provisions shall not restrict any encumbrances
or restrictions:
(i) existing on the Closing Date in this Indenture or any
other agreements in effect on the Closing Date, and any extensions,
refinancings, renewals or replacements of such agreements; provided
that the encumbrances and restrictions in any such extensions,
refinancings, renewals or replacements are no less favorable in any
material respect to the Holders than those encumbrances or restrictions
that are then in effect and that are being extended, refinanced,
renewed or replaced;
(ii) existing under or by reason of applicable law;
(iii) existing with respect to any Person or the property or
assets of such Person acquired by the Company or any Restricted Group
Member, existing at the time of such acquisition and not incurred in
contemplation thereof, which encumbrances or restrictions are not
applicable to any Person or the property or assets of any Person other
than such Person or the property or assets of such Person so acquired;
(iv) in the case of clause (iv) of the first paragraph of
this Section 4.05, (A) that restrict in a customary manner the
subletting, assignment or transfer of any property or asset that is a
lease, license, conveyance or contract or similar property or asset,
(B) existing by virtue of any transfer of, agreement to transfer,
option or right with respect to, or Lien on, any property or assets of
the Company or any Restricted Group Member not otherwise prohibited by
this Indenture or (C) arising or agreed to in the ordinary course of
business, not relating to any Indebtedness, and that do not,
individually or in the aggregate, detract from the value of property or
assets of the Company or any Restricted
<PAGE> 55
49
Group Member in any manner material to the Company or any Restricted
Group Member;
(v) with respect to a Restricted Group Member and imposed
pursuant to an agreement that has been entered into for the sale or
disposition of all or substantially all of the Capital Stock of, or
property and assets of, such Restricted Group Member;
(vi) contained in the terms of any Indebtedness or any
agreement pursuant to which such Indebtedness was issued if the
encumbrance or restriction applies only in the event of a default with
respect to a financial covenant contained in such Indebtedness or
agreement, is not materially more disadvantageous to the Holders of the
Notes than is customary in comparable financings (as determined by the
Company) and the Company determines that any such encumbrance or
restriction will not materially affect the Company's ability to make
principal or interest payments on the Notes;
(vii) contained in any stockholders or similar agreement, so
long as such encumbrance or restriction is not materially more
disadvantageous to the Holders of the Notes than the encumbrances and
restrictions contained in comparable agreements entered into in the
past by the Company or a Restricted Group Member; or
(viii) contained in any agreement entered into after the
Closing Date, so long as such encumbrance or restriction is not
materially more disadvantageous to the Holders of the Notes than the
encumbrances and restrictions contained in the Motorola Credit
Agreement.
Nothing contained in this Section 4.05 shall prevent the Company or any
Restricted Group Member from (1) creating, incurring, assuming or suffering to
exist any Liens otherwise permitted in Section 4.09 or (2) restricting the sale
or other disposition of property or assets of the Company or any Restricted
Group Member that secure Indebtedness of the Company or any Restricted Group
Member.
SECTION 4.06. Limitation on the Issuance and Sale of Capital
Stock of Restricted Group Members. The Company will not sell, and will not
permit any Restricted Group Member, directly or indirectly, to issue or sell,
any shares of Capital Stock of a Restricted Group Member (including options,
warrants or other rights to purchase shares of such Capital Stock) except (i) to
the Company or a Wholly Owned Restricted Subsidiary of the Company; (ii)
issuances of director's qualifying shares or sales to foreign nationals of
shares of Capital Stock of a foreign Restricted Group Member, to the extent
required by applicable law; (iii) if, immediately after giving effect to such
issuance or sale, such Restricted Group Member would no longer constitute a
Restricted Group Member, provided any Investment in such Person remaining after
giving effect to such issuance or sale would have been permitted to be made
under Section 4.04,
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if made on the date of such issuance or sale; and (iv) issuances or sales of
Common Stock (including options, warrants or other rights to purchase Common
Stock) of a Restricted Group Member, provided the Net Cash Proceeds, if any, of
such sale are applied in accordance with clause (A) or (B) of Section 4.10.
SECTION 4.07. Limitation on Issuances of Guarantees by
Restricted Group Members. The Company will not permit any Restricted Group
Member, directly or indirectly, to Guarantee any Indebtedness of the Company
which is pari passu with or subordinate in right of payment to the Notes
("Guaranteed Indebtedness"), unless (i) such Restricted Group Member
simultaneously executes and delivers a supplemental indenture to this Indenture
providing for a Guarantee (a "Subsidiary Guarantee") of payment of the Notes by
such Restricted Group Member and (ii) such Restricted Group Member waives and
will not in any manner whatsoever claim or take the benefit or advantage of, any
rights of reimbursement, indemnity or subrogation or any other rights against
the Company or any other Restricted Group Member as a result of any payment by
such Restricted Group Member under its Subsidiary Guarantee; provided that this
paragraph shall not be applicable to (x) any Guarantee of any Restricted Group
Member that existed at the time such Person became a Restricted Group Member and
was not Incurred in connection with, or in contemplation of, such Person
becoming a Restricted Group Member or (y) any Guarantee of any Restricted Group
Member of Indebtedness Incurred (I) under a revolving credit, vendor financing
or working capital facility pursuant to clause (i) of the second paragraph of
Section 4.03 or (II) pursuant to clause (vii) of the second paragraph of Section
4.03. If the Guaranteed Indebtedness is (A) pari passu with the Notes, then the
Guarantee of such Guaranteed Indebtedness shall be pari passu with, or
subordinated to, the Subsidiary Guarantee or (B) subordinated to the Notes, then
the Guarantee of such Guaranteed Indebtedness shall be subordinated to the
Subsidiary Guarantee at least to the extent that the Guaranteed Indebtedness is
subordinated to the Notes.
Notwithstanding the foregoing, any Subsidiary Guarantee by a
Restricted Group Member may provide by its terms that it shall be automatically
and unconditionally released and discharged upon (i) any sale, exchange or
transfer, to any Person not an Affiliate of the Company, of all of the Company's
and each Restricted Group Member's Capital Stock in, or all or substantially all
the assets of, such Restricted Group Member (which sale, exchange or transfer is
not prohibited by this Indenture) or (ii) the release or discharge of the
Guarantee which resulted in the creation of such Subsidiary Guarantee, except a
discharge or release by or as a result of payment under such Guarantee.
SECTION 4.08. Limitation on Transactions with Shareholders and
Affiliates. The Company will not, and will not permit any Restricted Group
Member to, directly or indirectly, enter into, renew or extend any transaction
(including, without limitation, the purchase, sale, lease or exchange of
property or assets, or the rendering of any service) with any holder (or any
Person known by the Company to be an Affiliate of such holder) of 5% or more of
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any class of Capital Stock of the Company or with any Affiliate of the Company
or any Restricted Group Member, except upon fair and reasonable terms no less
favorable to the Company or such Restricted Group Member than could be obtained,
at the time of such transaction or, if such transaction is pursuant to a written
agreement, at the time of the execution of the agreement providing therefor, in
a comparable arm's-length transaction with a Person that is not such a holder or
an Affiliate.
The foregoing limitation does not limit, and shall not apply
to:
(i) transactions (A) approved by a majority of the
disinterested members of the Board of Directors of the Company or (B)
for which the Company or a Restricted Group Member delivers to the
Trustee a written opinion of a nationally recognized investment banking
firm stating that the transaction is fair to the Company or such
Restricted Group Member from a financial point of view;
(ii) any transaction solely between the Company and any of
its Wholly Owned Restricted Subsidiaries or solely between Wholly Owned
Restricted Subsidiaries of the Company;
(iii) the payment of reasonable and customary regular fees to
directors of the Company who are not employees of the Company;
(iv) any payments or other transactions pursuant to any
tax-sharing agreement between the Company and any other Person with
which the Company files a consolidated tax return or with which the
Company is part of a consolidated group for tax purposes;
(v) any Restricted Payments not prohibited by Section 4.04;
(vi) any payments or other transactions pursuant to the
Overhead Services Agreement as in effect on the Closing Date; or
(vii) any transaction or series of related transactions
involving consideration or payments of less than $5 million.
Notwithstanding the foregoing, any transaction covered by the first paragraph of
this Section 4.08 and not covered by clauses (ii) through (v) of this paragraph,
the aggregate amount of which exceeds $10 million in value, must be approved or
determined to be fair in the manner provided for in clause (i)(A) or (B) above.
SECTION 4.09. Limitation on Liens. The Company will not, and
will not permit any Restricted Group Member to, create, incur, assume or suffer
to exist any Lien on any of its
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52
assets or properties of any character, or any shares of Capital Stock or
Indebtedness of any Restricted Group Member, without making effective provision
for all of the Notes and all other amounts due under this Indenture to be
directly secured equally and ratably with (or, if the obligation or liability to
be secured by such Lien is subordinated in right of payment to the Notes, prior
to) the obligation or liability secured by such Lien.
The foregoing limitation does not apply to:
(i) Liens existing on the Closing Date;
(ii) Liens granted after the Closing Date on any assets or
Capital Stock of the Company or its Restricted Group Members created in
favor or for the benefit of the Holders;
(iii) Liens with respect to the assets of a Restricted Group
Member granted by such Restricted Group Member to the Company or
another Restricted Group Member to secure Indebtedness owing to the
Company or such other Restricted Group Member;
(iv) Liens securing Indebtedness which is Incurred to
refinance secured Indebtedness which is permitted to be Incurred under
clause (iii) of the second paragraph of Section 4.03; provided that
such Liens do not extend to or cover any property or assets of the
Company or any Restricted Group Member other than the property or
assets securing the Indebtedness being refinanced;
(v) Liens securing Indebtedness Incurred under clause (i) or
clause (vii) of the second paragraph of Section 4.03; or
(vi) Permitted Liens.
SECTION 4.10. Limitation on Asset Sales. The Company will not,
and will not permit any Restricted Group Member to, consummate any Asset Sale,
unless (i) the consideration received by the Company or such Restricted Group
Member is at least equal to the fair market value of the assets sold or disposed
of and (ii) at least 75% of the consideration received consists of cash or
Temporary Cash Investments or the assumption of Indebtedness of the Company or
any Restricted Group Member relating to such assets, provided that the Company
or such Restricted Group Member is irrevocably released and discharged from such
Indebtedness. In the event and to the extent that the Net Cash Proceeds received
by the Company or any Restricted Group Member from one or more Asset Sales
occurring on or after the Closing Date in any period of 12 consecutive months
exceed $5 million, then the Company shall or shall cause the relevant Restricted
Group Member to (i) within twelve months after the date Net Cash Proceeds so
received exceed $5 million (A) apply an amount equal to such excess Net Cash
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53
Proceeds to permanently repay unsubordinated Indebtedness of the Company or any
Restricted Group Member providing a Subsidiary Guarantee pursuant to Section
4.07 or Indebtedness of any other Restricted Group Member, in each case owing to
a Person other than the Company or any Restricted Group Member, provided that in
the event Indebtedness of a Restricted Group Member is repaid, only the
Company's pro rata portion (determined as provided in the definition of
"Indebtedness") of such repaid Indebtedness shall be deemed to have been repaid
in accordance with this clause (A), or (B) invest an equal amount, or the amount
not so applied pursuant to clause (A) (or enter into a definitive agreement
committing to so invest within twelve months after the date of such agreement),
in property or assets (other than current assets) of a nature or type or that
are used in a business (or in a company having property and assets of a nature
or type, or engaged in a business) similar or related to the nature or type of
the property and assets of, or the business of, the Company and its Restricted
Group Members existing on the date of such investment and (ii) apply (no later
than the end of the twelve-month period referred to in clause (i)) such excess
Net Cash Proceeds (to the extent not applied pursuant to clause (i)) as provided
in the last paragraph of this Section 4.10. The amount of such excess Net Cash
Proceeds required to be applied (or to be committed to be applied) during such
twelve-month period as set forth in clause (i) of the preceding sentence and not
applied as so required by the end of such period shall constitute "Excess
Proceeds."
Notwithstanding the foregoing, to the extent that any or all
of the Net Cash Proceeds of any Asset Sale of assets based outside the United
States are prohibited or delayed by applicable local law from being repatriated
to the United States and such Net Cash Proceeds are not actually applied in
accordance with the foregoing paragraph, the Company shall not be required to
apply the portion of such Net Cash Proceeds so affected but may permit the
applicable Restricted Group Members to retain such portion of the Net Cash
Proceeds so long, but only so long, as the applicable local law will not permit
repatriation to the United States (the Company hereby agreeing to cause the
applicable Restricted Group Member to promptly take all actions required by the
applicable local law to permit such repatriation) and once such repatriation of
any such affected Net Cash Proceeds is permitted under the applicable local law,
such repatriation will be immediately effected and such repatriated Net Cash
Proceeds will be applied in the manner set forth in this covenant as if the
Asset Sale had occurred on such date; provided that to the extent that the
Company has determined in good faith that repatriation of any or all of the Net
Cash Proceeds of such Asset Sale would have a material adverse tax cost
consequence, the Net Cash Proceeds so affected may be retained by the applicable
Restricted Group Member for so long as such material adverse tax cost event
would continue.
If, as of the first day of any calendar month, the aggregate
amount of Excess Proceeds not theretofore subject to an Offer to Purchase
pursuant to this Section 4.10 totals at least $5 million, the Company must
commence, not later than the fifteenth Business Day of such month, and
consummate an Offer to Purchase from the Holders on a pro rata basis an
aggregate Accreted Value of Notes on the relevant Payment Date equal to the
Excess Proceeds on such
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date, at a purchase price equal to 101% of the Accreted Value of the Notes on
the relevant Payment Date, plus, in each case, accrued interest (if any) to the
Payment Date.
SECTION 4.11. Repurchase of Notes upon a Change of Control.
The Company must commence, within 30 days of the occurrence of a Change of
Control, and consummate an Offer to Purchase for all Notes then outstanding, at
a purchase price equal to 101% of the Accreted Value thereof on the relevant
Payment Date, plus accrued interest (if any) to the Payment Date.
SECTION 4.12. Existence. Subject to Articles Four and Five of
this Indenture, the Company will do or cause to be done all things necessary to
preserve and keep in full force and effect its existence and the existence of
each Restricted Group Member in accordance with the respective organizational
documents of the Company and each Restricted Group Member and the rights
(whether pursuant to charter, partnership certificate, agreement, statute or
otherwise), material licenses and franchises of the Company and each Restricted
Group Member; provided that the Company shall not be required to preserve any
such right, license or franchise, or the existence of any Restricted Group
Member, if the maintenance or preservation thereof is no longer desirable in the
conduct of the business of the Company and its Restricted Group Members taken as
a whole.
SECTION 4.13. Payment of Taxes and Other Claims. The Company
will pay or discharge and shall cause each of its Restricted Group Members to
pay or discharge, or cause to be paid or discharged, before the same shall
become delinquent (i) all material taxes, assessments and governmental charges
levied or imposed upon (a) the Company or any such Restricted Group Member, (b)
the income or profits of any such Restricted Group Member which is a corporation
or (c) the property of the Company or any such Restricted Group Members and (ii)
all material lawful claims for labor, materials and supplies that, if unpaid,
might by law become a lien upon the property of the Company or any such
Restricted Group Member; provided that the Company shall not be required to pay
or discharge, or cause to be paid or discharged, any such tax, assessment,
charge or claim the amount, applicability or validity of which is being
contested in good faith by appropriate proceedings and for which adequate
reserves have been established.
SECTION 4.14. Maintenance of Properties and Insurance. The
Company will cause all properties used or useful in the conduct of its business
or the business of any of its Restricted Group Members, to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly conducted at all times; provided that nothing in this
Section 4.14 shall prevent the Company or any such Restricted Group Member from
discontinuing the use, operation or
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maintenance of any of such properties or disposing of any of them, if such
discontinuance or disposal is, in the judgment of the Company, desirable in the
conduct of the business of the Company or such Restricted Group Member.
The Company will provide or cause to be provided, for itself
and its Restricted Group Members, insurance (including appropriate
self-insurance) against loss or damage of the kinds customarily insured against
by corporations similarly situated and owning like properties, with reputable
insurers or with the government of the United States of America, or an agency or
instrumentality thereof, in such amounts, with such deductibles and by such
methods as shall be customary for corporations similarly situated in the
industry in which the Company or such Restricted Group Member, as the case may
be, is then conducting business.
SECTION 4.15. Notice of Defaults. In the event that the
Company becomes aware of any Default or Event of Default the Company, promptly
after it becomes aware thereof, will give written notice thereof to the Trustee.
SECTION 4.16. Compliance Certificates. (a) The Company shall
deliver to the Trustee, within 45 days after the end of each fiscal quarter (90
days after the end of the last fiscal quarter of each year), an Officers'
Certificate stating whether or not the signers know of any Default or Event of
Default that occurred during such fiscal quarter. In the case of the Officers'
Certificate delivered within 90 days of the end of the Company's fiscal year,
such certificate shall contain a certification from the principal executive
officer, principal financial officer or principal accounting officer that a
review has been conducted of the activities of the Company and its Restricted
Group Members and the Company's and its Restricted Group Members' performance
under this Indenture and that, to the knowledge of such Officers, the Company
has complied with all conditions and covenants under this Indenture. For
purposes of this Section 4.16, such compliance shall be determined without
regard to any period of grace or requirement of notice provided under this
Indenture. If they do know of such a Default or Event of Default, the
certificate shall describe any such Default or Event of Default and its status.
The first certificate to be delivered pursuant to this Section 4.16(a) shall be
for the first fiscal quarter beginning after the execution of this Indenture.
(b) So long as (and to the extent) not prohibited by the then
current recommendations of the American Institute of Certified Public
Accountants, the Company shall deliver to the Trustee, within 90 days after the
end of the Company's fiscal year, a certificate signed by the Company's
independent certified public accountants stating (i) that their audit
examination has included a review of the terms of this Indenture and the Notes
as they relate to accounting matters, (ii) that they have read the most recent
Officers' Certificate delivered to the Trustee pursuant to paragraph (a) of this
Section 4.16 and (iii) whether, in connection with their audit examination,
anything came to their attention that caused them to believe that the Company
was not in compliance with any of the terms, covenants, provisions or conditions
of Article Four
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and Section 5.01 of this Indenture as they pertain to accounting matters and, if
any Default or Event of Default has come to their attention, specifying the
nature and period of existence thereof; provided that such independent certified
public accountants shall not be liable in respect of such statement by reason of
any failure to obtain knowledge of any such Default or Event of Default that
would not be disclosed in the course of an audit examination conducted in
accordance with generally accepted auditing standards in effect at the date of
such examination.
(c) Within 90 days of the end of each of the Company's fiscal
years, the Company shall deliver to the Trustee a list of all Significant Group
Members. The Trustee shall have no duty with respect to any such list except to
keep it on file and available for inspection by the Holders.
SECTION 4.17. Commission Reports and Reports to Holders.
Whether or not the Company is required to file reports with the Commission, for
so long as any Notes are outstanding the Company shall file with the Commission
all such reports and other information as it would be required to file with the
Commission by Sections 13(a) or 15(d) under the Securities Exchange Act of 1934
if it were subject thereto. The Company shall supply the Trustee and each Holder
or shall supply to the Trustee for forwarding to each such Holder, without cost
to such Holder, copies of such reports and other information. Delivery of such
reports, information and documents to the Trustee is for informational purposes
only and the Trustee's receipt of such shall not constitute constructive notice
of any information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers'
Certificates). The Company also shall comply with the other provisions of TIA
Section 314(a).
SECTION 4.18. Waiver of Stay, Extension or Usury Laws. The
Company covenants (to the extent that it may lawfully do so) that it will not at
any time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or other law
that would prohibit or forgive the Company from paying all or any portion of the
principal of, premium, if any, or interest on the Notes as contemplated herein,
wherever enacted, now or at any time hereafter in force, or that may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) the Company hereby expressly waives all benefit or advantage of
any such law and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
SECTION 4.19. Limitation on Sale-Leaseback Transactions. The
Company will not, and will not permit any Restricted Group Member to, enter into
any sale-leaseback transaction involving any of its assets or properties whether
now owned or hereafter acquired,
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whereby the Company or a Restricted Group Member sells or transfers such assets
or properties and then or thereafter leases such assets or properties or any
part thereof or any other assets or properties which the Company or such
Restricted Group Member, as the case may be, intends to use for substantially
the same purpose or purposes as the assets or properties sold or transferred.
The foregoing restriction does not apply to any sale-leaseback
transaction if:
(i) the lease is for a period, including renewal rights,
of not in excess of three years;
(ii) the lease secures or relates to industrial revenue or
pollution control bonds;
(iii) the transaction is solely between the Company and any
Wholly Owned Restricted Subsidiary of the Company or solely between
Wholly Owned Restricted Subsidiaries of the Company; or
(iv) the Company or such Restricted Group Member, within
twelve months after the sale or transfer of any assets or properties is
completed, applies an amount not less than the net proceeds received
from such sale in accordance with clause (A) or (B) of the first
paragraph of Section 4.10.
SECTION 4.20. Calculation of Original Issue Discount. The
Company shall file with the Trustee promptly at the end of each calendar year
(i) a written notice specifying the amount of original issue discount (including
daily rates and accrual periods) accrued on outstanding Notes as of the end of
such year and (ii) such other specific information relating to such original
issue discount as may then be relevant under the Internal Revenue Code of 1986,
as amended from time to time.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. When Company May Merger, Etc. The Company shall
not consolidate with, merge with or into, or sell, convey, transfer, lease or
otherwise dispose of all or substantially all of its property and assets (as an
entirety or substantially an entirety in one transaction or a series of related
transactions) to, any Person or permit any Person to merge with or into the
Company unless:
(i) the Company shall be the continuing Person, or the
Person (if other than the Company) formed by such consolidation or into
which the Company is merged or that acquired or leased such property
and assets of the Company shall expressly assume, by a
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supplemental indenture, executed and delivered to the Trustee, all of
the obligations of the Company on all of the Notes and under this
Indenture;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) immediately after giving effect to such transaction on a
pro forma basis, the Company or any Person becoming the successor
obligor of the Notes shall have a Consolidated Net Worth equal to or
greater than the Consolidated Net Worth of the Company immediately
prior to such transaction;
(iv) immediately after giving effect to such transaction on a
pro forma basis the Company, or any Person becoming the successor
obligor of the Notes, as the case may be, shall have a Consolidated
Leverage Ratio not greater than 110% of the Consolidated Leverage Ratio
of the Company immediately prior to the transaction; and
(v) the Company delivers to the Trustee an Officers'
Certificate (attaching the arithmetic computations (which the Trustee
shall have no obligation whatsoever to verify) to demonstrate
compliance with clauses (iii) and (iv)) and Opinion of Counsel, in each
case stating that such consolidation, merger or transfer and such
supplemental indenture complies with this provision, that all
conditions precedent provided for herein relating to such transaction
have been complied with and, in the event that the continuing Person is
organized under the laws of any jurisdiction other than the United
States of America or any jurisdiction thereof, that the indenture and
the Notes constitute legal, valid and binding obligations of the
continuing Person, enforceable in accordance with their terms;
provided, however, that clauses (iii) and (iv) above do not apply if, in the
good faith determination of the Board of Directors of the Company, whose
determination shall be evidenced by a Board Resolution, the principal purpose of
such transaction is to change the state of incorporation of the Company; and
provided further that any such transaction shall not have as one of its purposes
the evasion of the foregoing limitations.
SECTION 5.02. Successor Substituted. Upon any consolidation or
merger, or any sale, conveyance, transfer, lease or other disposition of all or
substantially all of the property and assets of the Company in accordance with
Section 5.01 of this Indenture, the successor Person formed by such
consolidation or into which the Company is merged or to which such sale,
conveyance, transfer, lease or other disposition is made shall succeed to, and
be substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Person had been named
as the Company herein and thereafter the predecessor corporation shall be
relieved of all obligations and covenants under this Indenture and the Notes;
provided that the Company shall not be released from its obligation to pay the
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principal of, premium, if any, or interest on the Notes in the case of a lease
of all or substantially all of its property and assets.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default. An "Event of Default" shall
occur with respect to the Notes if:
(a) the Company defaults in the payment of principal of (or
premium, if any, on) any Note when the same becomes due and payable at
maturity, upon acceleration, redemption or otherwise;
(b) the Company defaults in the payment of interest on any
Note when the same becomes due and payable, and such default continues
for a period of 30 days;
(c) the Company defaults in the performance or breach of the
provisions of Article Five or the failure to make or consummate an
Offer to Purchase in accordance with Section 4.10 or Section 4.11;
provided that a default or breach of Section 4.10 arising from an
Involuntary Event shall not constitute an Event of Default unless such
Involuntary Event continues for 90 days;
(d) the Company defaults in the performance of or breaches any
other covenant or agreement of the Company in this Indenture or under
the Notes (other than a default specified in clause (a), (b) or (c)
above) and such default or breach continues for a period of 60
consecutive days after written notice by the Trustee or the Holders of
25% or more in aggregate principal amount at maturity of the Notes,
provided that a default or breach of a covenant or agreement arising
from a Restricted Affiliate ceasing to observe any covenant applicable
to it resulting from an Involuntary Event shall not constitute an Event
of Default unless such Involuntary Event continues for 90 days;
(e) there occurs with respect to any issue or issues of
Indebtedness of the Company or any Significant Group Member having an
outstanding principal amount of $5 million or more in the aggregate for
all such issues of all such Persons, whether such Indebtedness now
exists or shall hereafter be created, (I) an event of default that has
caused the holder thereof to declare such Indebtedness to be due and
payable prior to its Stated Maturity and such Indebtedness has not been
discharged in full or such acceleration has not been rescinded or
annulled within 30 days of such acceleration and/or (II) the failure to
make a principal payment at the final (but not any interim) fixed
maturity and such defaulted payment shall not have been made, waived or
extended
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within 30 days of such payment default; provided that an acceleration
or payment default arising from an Involuntary Event shall not
constitute an Event of Default unless such Involuntary Event continues
for 90 days;
(f) any final judgment or order (not covered by insurance) for
the payment of money in excess of $5 million in the aggregate for all
such final judgments or orders against all such Persons (treating any
deductibles, self-insurance or retention as not so covered) shall be
rendered against the Company or any Significant Group Member and shall
not be paid or discharged, and there shall be any period of 30
consecutive days following entry of the final judgment or order that
causes the aggregate amount for all such final judgments or orders
outstanding and not paid or discharged against all such Persons to
exceed $5 million during which a stay of enforcement of such final
judgment or order, by reason of a pending appeal or otherwise, shall
not be in effect; provided that a final judgment or order arising from
an Involuntary Event shall not constitute an Event of Default unless
such Involuntary Event continues for 90 days;
(g) a court having jurisdiction in the premises enters a
decree or order for (A) relief in respect of the Company or any
Significant Group Member in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect,
(B) appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of the Company or any
Significant Group Member or for all or substantially all of the
property and assets of the Company or any Significant Group Member or
(C) the winding up or liquidation of the affairs of the Company or any
Significant Group Member and, in each case, such decree or order shall
remain unstayed and in effect for a period of 60 consecutive days; or
(h) the Company or any Significant Group Member (A) commences
a voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consents to the entry of an
order for relief in an involuntary case under any such law, (B)
consents to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Company or any Significant Group Member or for all or
substantially all of the property and assets of the Company or any
Significant Group Member or (C) effects any general assignment for the
benefit of creditors.
SECTION 6.02. Acceleration. If an Event of Default (other than
an Event of Default specified in clause (g) or (h) above that occurs with
respect to the Company) occurs and is continuing under this Indenture, the
Trustee or the Holders of at least 25% in aggregate principal amount at maturity
of the Notes, then outstanding, by written notice to the Company (and to the
Trustee if such notice is given by the Holders), may, and the Trustee at the
request of such Holders shall, declare the Accreted Value of, premium, if any,
and accrued interest on the
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Notes to be immediately due and payable. Upon a declaration of acceleration,
such Accreted Value of, premium, if any, and accrued interest shall be
immediately due and payable. In the event of a declaration of acceleration
because an Event of Default set forth in clause (e) above has occurred and is
continuing, such declaration of acceleration shall be automatically rescinded
and annulled if the event of default triggering such Event of Default pursuant
to clause (e) shall be remedied or cured by the Company or the relevant
Significant Group Member or waived by the holders of the relevant Indebtedness
within 60 days after the declaration of acceleration with respect thereto. If an
Event of Default specified in clause (g) or (h) above occurs with respect to the
Company, the Accreted Value of, premium, if any, and accrued interest on the
Notes then outstanding shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder.
At any time after such a declaration of acceleration, but
before a judgment or decree for the payment of the money due has been obtained
by the Trustee, the Holders of at least a majority in principal amount of the
outstanding Notes by written notice to the Company and to the Trustee, may waive
all past Defaults and rescind and annul such declaration of acceleration and its
consequences if (i) all existing Events of Default, other than the non-payment
of the principal of, premium, if any, and accrued interest on the Notes that
have become due solely by such declaration of acceleration, have been cured or
waived and (ii) the rescission would not conflict with any judgment or decree of
a court of competent jurisdiction.
SECTION 6.03. Other Remedies. If an Event of Default occurs
and is continuing, the Trustee may pursue any available remedy by proceeding at
law or in equity to collect the payment of principal of, premium, if any, or
interest on the Notes or to enforce the performance of any provision of the
Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Notes or does not produce any of them in the proceeding.
SECTION 6.04. Waiver of Past Defaults. Subject to Sections
6.02, 6.07 and 9.02, the Holders, by the Required Consent, by written notice to
the Company and the Trustee, may waive an existing Default or Event of Default
and its consequences, except a Default in the payment of principal of, premium,
if any, or interest on any Note as specified in clause (a) or (b) of Section
6.01 or in respect of a covenant or provision of this Indenture which cannot be
modified or amended without the consent of the holder of each outstanding Note
affected. Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereto.
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SECTION 6.05. Control by Majority. The Holders, by the
Required Consent, may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture, that may involve the
Trustee in personal liability, or that the Trustee determines in good faith may
be unduly prejudicial to the rights of Holders of Notes not joining in the
giving of such direction and may take any other action it deems proper that is
not inconsistent with any such direction received from Holders of Notes.
SECTION 6.06. Limitation on Suits. A Holder may not institute
any proceeding, judicial or otherwise, with respect to this Indenture or the
Notes, or for the appointment of a receiver or trustee, or for any other remedy
hereunder unless:
(i) such Holder has previously given the Trustee written
notice of a continuing Event of Default;
(ii) the Holders of at least 25% in aggregate principal
amount at maturity of outstanding Notes shall have made a written
request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(iii) such Holder or Holders have offered the Trustee
indemnity reasonably satisfactory to the Trustee against any costs,
liabilities or expenses to be incurred in compliance with such request;
(iv) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of indemnity and has
failed to institute any such proceeding; and
(v) during such 60-day period, the Holders of a majority in
aggregate principal amount at maturity of the outstanding Notes do not
give the Trustee a direction that is inconsistent with such written
request.
For purposes of Section 6.05 of this Indenture and this
Section 6.06, the Trustee shall comply with TIA Section 316(a) in making any
determination of whether the Holders of the required aggregate principal amount
of outstanding Notes have concurred in any request or direction of the Trustee
to pursue any remedy available to the Trustee or the Holders with respect to
this Indenture or the Notes or otherwise under the law.
A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over such other Holder.
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SECTION 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder
of a Note to receive payment of the principal of, premium, if any, or interest
on, such Note or to bring suit for the enforcement of any such payment, on or
after the due date expressed in the Notes, shall not be impaired or affected
without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of
Default in payment of principal, premium or interest specified in clause (a),
(b) or (c) of Section 6.01 occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
or any other obligor of the Notes for the whole amount of principal, premium, if
any, and accrued interest remaining unpaid, together with interest on overdue
principal, premium, if any, and, to the extent that payment of such interest is
lawful, interest on overdue installments of interest, in each case at the rate
specified in the Notes, and such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee
may file such proofs of claim and other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07) and the Holders allowed in any judicial proceedings relative to
the Company (or any other obligor of the Notes), its creditors or its property
and shall be entitled and empowered to collect and receive any monies,
securities or other property payable or deliverable upon conversion or exchange
of the Notes or upon any such claims and to distribute the same, and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agent and counsel, and any other
amounts due the Trustee under Section 7.07. Nothing herein contained shall be
deemed to empower the Trustee to authorize or consent to, or accept or adopt on
behalf of any Holder, any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 6.10. Priorities. If the Trustee collects any money
pursuant to this Article Six, it shall pay out the money in the following order:
First: to the Trustee for all amounts due under Section 7.07;
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Second: to Holders for amounts then due and unpaid for
principal of, premium, if any, and interest on the Notes in respect of
which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Notes for principal, premium, if any,
and interest, respectively; and
Third: to the Company or any other obligors of the Notes, as
their interests may appear, or as a court of competent jurisdiction may
direct.
The Trustee, upon prior written notice to the Company, may fix
a record date and payment date for any payment to Holders pursuant to this
Section 6.10.
SECTION 6.11. Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court may
require any party litigant in such suit to file an undertaking to pay the costs
of the suit, and the court may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit having due regard to the
merits and good faith of the claims or defenses made by the party litigant. This
Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07 of this Indenture, or a suit by Holders of more than
10% in principal amount of the outstanding Notes.
SECTION 6.12. Restoration of Rights and Remedies. If the
Trustee or any Holder has instituted any proceeding to enforce any right or
remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Trustee or to
such Holder, then, and in every such case, subject to any determination in such
proceeding, the Company, the Trustee and the Holders shall be restored severally
and respectively to their former positions hereunder and thereafter all rights
and remedies of the Company, Trustee and the Holders shall continue as though no
such proceeding had been instituted.
SECTION 6.13. Rights and Remedies Cumulative. Except as
otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or wrongfully taken Notes in Section 2.09, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 6.14. Delay or Omission Not Waiver. No delay or
omission of the Trustee or of any Holder to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an
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acquiescence therein. Every right and remedy given by this Article Six or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. General. The duties and responsibilities of the
Trustee shall be as provided by the TIA and as set forth herein. Notwithstanding
the foregoing, no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it. Whether or not therein expressly so provided,
every provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject to the
provisions of this Article Seven.
SECTION 7.02. Certain Rights of Trustee. Subject to TIA
Sections 315(a) through (d):
(i) the Trustee may conclusively rely and shall be protected
in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document believed by it to be genuine and to have
been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document;
(ii) before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel, which shall
conform to Section 10.04. The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on such
certificate or opinion;
(iii) the Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent
appointed with due care;
(iv) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities that might be incurred by it in
compliance with such request or direction;
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(v) the Trustee shall not be liable for any action it takes
or omits to take in good faith that it believes to be authorized or
within its rights or powers or for any action it takes or omits to take
in accordance with the direction of the Holders of a majority in
principal amount at maturity of the outstanding Notes relating to the
time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Indenture; provided that the Trustee's
conduct does not constitute gross negligence or bad faith;
(vi) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a making be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officers'
Certificate; and
(vii) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company personally or by agent or
attorney.
SECTION 7.03. Individual Rights of Trustee. The Trustee, in
its individual or any other capacity, may become the owner or pledgee of Notes
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not the Trustee. Any Agent may do the same with like
rights. However, the Trustee is subject to TIA Sections 310(b) and 311.
SECTION 7.04. Trustee's Disclaimer. The Trustee (i)
makes no representation as to the validity or adequacy of this Indenture or the
Notes, (ii) shall not be accountable for the Company's use or application of the
proceeds from the Notes and (iii) shall not be responsible for any statement in
the Notes other than its certificate of authentication.
SECTION 7.05. Notice of Default. If any Default or any Event
of Default occurs and is continuing and if such Default or Event of Default is
known to the Trustee, the Trustee shall mail to each Holder in the manner and to
the extent provided in TIA Section 313(c) notice of the Default or Event of
Default within 45 days after it occurs, unless such Default or Event of Default
has been cured; provided, however, that, except in the case of a default in the
payment of the principal of, premium, if any, or interest on any Note, the
Trustee shall be protected in withholding such notice if and so long as the
board of directors, the
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executive committee or a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determine that the withholding of such
notice is in the interest of the Holders.
SECTION 7.06. Reports by Trustee to Holders. Within 60 days
after each March 1, beginning with March 1, 1999, the Trustee shall mail to each
Holder as provided in TIA Section 313(c) a brief report dated as of such March
1, if required by TIA Section 313(a).
SECTION 7.07. Compensation and Indemnity. The Company shall
pay to the Trustee such compensation as shall be agreed upon in writing for its
services. The compensation of the Trustee shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee upon request for all reasonable out-of-pocket expenses and advances
incurred or made by the Trustee. Such expenses shall include the reasonable
compensation and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee for, and hold it
harmless against, any loss or liability or expense, including taxes (other than
taxes based upon, measured by or determined by the income of the Trustee)
incurred by it without negligence or bad faith on its part in connection with
the acceptance or administration of this Indenture and its duties under this
Indenture and the Notes, including the costs and expenses of defending itself
against any claim or liability and of complying with any process served upon it
or any of its officers in connection with the exercise or performance of any of
its powers or duties under this Indenture and the Notes.
To secure the Company's payment obligations in this Section
7.07, the Trustee shall have a lien prior to the Notes on all money or property
held or collected by the Trustee, in its capacity as Trustee, except money or
property held in trust to pay principal of, premium, if any, and interest on
particular Notes.
If the Trustee incurs expenses or renders services after the
occurrence of an Event of Default specified in clause (g) or (h) of Section
6.01, the expenses and the compensation for the services will be intended to
constitute expenses of administration under Title 11 of the United States
Bankruptcy Code or any applicable federal or state law for the relief of
debtors.
The provisions of this Section shall survive the termination
of this Indenture.
SECTION 7.08. Replacement of Trustee. A resignation or removal
of the Trustee and appointment of a successor Trustee shall become effective
only upon the successor Trustee's acceptance of appointment as provided in this
Section 7.08.
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The Trustee may resign at any time by so notifying the Company
in writing at least 30 days prior to the date of the proposed resignation. The
Holders of a majority in principal amount of the outstanding Notes may remove
the Trustee by so notifying the Trustee in writing and may appoint a successor
Trustee with the consent of the Company. The Company may at any time prior to
the occurrence and continuation of an Event of Default remove the Trustee, by
Company Order given at least 30 days prior to the date of the proposed removal.
If the Trustee resigns or is removed, or if a vacancy exists
in the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company. If
the successor Trustee does not deliver its written acceptance required by the
next succeeding paragraph of this Section 7.08 within 30 days after the retiring
Trustee resigns or is removed, the retiring Trustee, the Company or the Holders
of a majority in principal amount of the outstanding Notes may petition, at the
expense of the Company, any court of competent jurisdiction for the appointment
of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after the
delivery of such written acceptance, subject to the lien provided in Section
7.07, (i) the retiring Trustee shall transfer all property held by it as Trustee
to the successor Trustee, (ii) the resignation or removal of the retiring
Trustee shall become effective and (iii) the successor Trustee shall have all
the rights, powers and duties of the Trustee under this Indenture. A successor
Trustee shall mail notice of its succession to each Holder.
If the Trustee is no longer eligible under Section 7.10, any
Holder who satisfies the requirements of TIA Section 310(b) may petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
The Company shall give notice of any resignation and any
removal of the Trustee and each appointment of a successor Trustee to all
Holders. Each notice shall include the name of the successor Trustee and the
address of its Corporate Trust Office.
Notwithstanding replacement of the Trustee pursuant to this
Section 7.08, the Company's obligation under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, Etc. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business to, another corporation or national banking
association, the resulting, surviving or transferee corporation or national
banking association without any further act shall be the successor Trustee with
the same effect as if the successor Trustee had been named as the Trustee
herein.
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SECTION 7.10. Eligibility. This Indenture shall always have a
Trustee who satisfies the requirements of TIA Section 310(a)(1). The Trustee
shall have a combined capital and surplus of at least $25,000,000 as set forth
in its most recent published annual report of condition.
SECTION 7.11. Money Held in Trust. The Trustee shall not be
liable for interest on any money received by it except as the Trustee may agree
in writing with the Company. Money held in trust by the Trustee need not be
segregated from other funds except to the extent required by law and except for
money held in trust under Article Eight of this Indenture.
SECTION 7.12. Withholding Taxes. The Trustee, as agent for the
Company, shall exclude and withhold from each payment of principal and interest
and other amounts due hereunder or under the Notes any and all withholding taxes
applicable thereto as required by law. The Trustee agrees to act as such
withholding agent and, in connection therewith, whenever any present or future
taxes or similar charges are required to be withheld with respect to any amounts
payable in respect of the Notes, to withhold such amounts and timely pay the
same to the appropriate authority in the name of and on behalf of the holders of
the Notes, that it will file any necessary withholding tax returns or statements
when due. The Company or the Trustee shall, as promptly as possible after the
payment of the taxes described above, deliver to each holder of a Note
appropriate documentation showing the payment thereof, together with such
additional documentary evidence as such holders may reasonably request from time
to time.
ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01. Termination of Company's Obligations. Except as
otherwise provided in this Section 8.01, the Company may terminate its
obligations under the Notes and this Indenture if:
(i) all Notes previously authenticated and delivered (other
than destroyed, lost or stolen Notes that have been replaced or Notes
that are paid pursuant to Section 4.01 or Notes for whose payment money
or securities have theretofore been held in trust and thereafter repaid
to the Company, as provided in Section 8.05) have been delivered to the
Trustee for cancellation and the Company has paid all sums payable by
it hereunder; or
(ii) (A) the Notes mature within one year or all of them are
to be called for redemption within one year under arrangements
satisfactory to the Trustee for giving the notice of redemption, (B)
the Company irrevocably deposits in trust with the Trustee during such
one-year period, under the terms of an irrevocable trust agreement in
form and substance satisfactory to the Trustee, as trust funds solely
for the benefit of the
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Holders for that purpose, money or U.S. Government Obligations
sufficient (in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee), without consideration of any
reinvestment of any interest thereon, to pay principal, premium, if,
any, and interest on the Notes to maturity or redemption, as the case
may be, and to pay all other sums payable by it hereunder, (C) no
Default or Event of Default with respect to the Notes shall have
occurred and be continuing on the date of such deposit, (D) such
deposit will not result in a breach or violation of, or constitute a
default under, this Indenture or any other agreement or instrument to
which the Company is a party or by which it is bound and (E) the
Company has delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, in each case stating that all conditions precedent
provided for herein relating to the satisfaction and discharge of this
Indenture have been complied with.
With respect to the foregoing clause (i), the Company's
obligations under Section 7.07 shall survive. With respect to the foregoing
clause (ii), the Company's obligations in Sections 2.02, 2.03, 2.04, 2.05, 2.06,
2.07, 2.08, 2.09, 2.14, 4.01, 4.02, 7.07, 7.08, 8.04, 8.05 and 8.06 shall
survive until the Notes are no longer outstanding. Thereafter, only the
Company's obligations in Sections 7.07, 8.05 and 8.06 shall survive. After any
such irrevocable deposit, the Trustee upon request shall acknowledge in writing
the discharge of the Company's obligations under the Notes and this Indenture
except for those surviving obligations specified above.
SECTION 8.02. Defeasance and Discharge of Indenture. The
Company will be deemed to have paid and will be discharged from any and all
obligations in respect of the Notes on the 123rd day after the date of the
deposit referred to in clause (A) of this Section 8.02, and the provisions of
this Indenture will no longer be in effect with respect to the Notes, and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same, except as to (i) rights of registration of transfer and
exchange, (ii) substitution of apparently mutilated, defaced, destroyed, lost or
stolen Notes, (iii) rights of Holders to receive payments of principal thereof
and interest thereon, (iv) the Company's obligations under Section 4.02, (v) the
rights, obligations and immunities of the Trustee hereunder and (vi) the rights
of the Holders as beneficiaries of this Indenture with respect to the property
so deposited with the Trustee payable to all or any of them; provided that the
following conditions shall have been satisfied:
(A) with reference to this Section 8.02, the Company has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee (or another trustee satisfying the requirements of Section 7.10
of this Indenture) and conveyed all right, title and interest for the
benefit of the Holders, under the terms of an irrevocable trust
agreement in form and substance satisfactory to the Trustee as trust
funds in trust, specifically pledged to the Trustee for the benefit of
the Holders as security for payment of the principal of, premium, if
any, and interest, if any, on the Notes, and dedicated
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solely to, the benefit of the Holders, in and to (1) money in an
amount, (2) U.S. Government Obligations that, through the payment of
interest, premium, if any, and principal in respect thereof in
accordance with their terms, will provide, not later than one day
before the due date of any payment referred to in this clause (A),
money in an amount or (3) a combination thereof in an amount
sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge, without
consideration of the reinvestment of such interest and after payment of
all federal, state and local taxes or other charges and assessments in
respect thereof payable by the Trustee, the principal of, premium, if
any, and accrued interest on the outstanding Notes at the Stated
Maturity of such principal or interest; provided that the Trustee shall
have been irrevocably instructed to apply such money or the proceeds of
such U.S. Government Obligations to the payment of such principal,
premium, if any, and interest with respect to the Notes;
(B) such deposit will not result in a breach or violation of,
or constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(C) immediately after giving effect to such deposit on a pro
forma basis, no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or during the period ending on
the 123rd day after such date of deposit;
(D) the Company shall have delivered to the Trustee (1) either
(x) a ruling directed to the Trustee received from the Internal Revenue
Service to the effect that the Holders will not recognize income, gain
or loss for federal income tax purposes as a result of the Company's
exercise of its option under this Section 8.02 and will be subject to
federal income tax on the same amount and in the same manner and at the
same times as would have been the case if such option had not been
exercised or (y) an Opinion of Counsel to the same effect as the ruling
described in clause (x) above accompanied by a ruling to that effect
published by the Internal Revenue Service, unless there has been a
change in the applicable federal income tax law since the date of this
Indenture such that a ruling from the Internal Revenue Service is no
longer required and (2) an Opinion of Counsel to the effect that (x)
the creation of the defeasance trust does not violate the Investment
Company Act of 1940 and (y) after the passage of 123 days following the
deposit (except, with respect to any trust funds for the account of any
Holder who may be deemed to be an "insider" for purposes of the United
States Bankruptcy Code, after one year following the deposit), the
trust funds will not be subject to the effect of Section 547 of the
United States Bankruptcy Code or Section 15 of the New York Debtor and
Creditor Law in a case commenced by or against the Company under either
such statute, and either (I) the trust funds will no longer remain the
property of the Company (and therefore will not be subject to the
effect of any applicable bankruptcy, insolvency,
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reorganization or similar laws affecting creditors' rights generally)
or (II) if a court were to rule under any such law in any case or
proceeding that the trust funds remained property of the Company, (a)
assuming such trust funds remained in the possession of the Trustee
prior to such court ruling to the extent not paid to the Holders, the
Trustee will hold, for the benefit of the Holders, a valid and
perfected security interest in such trust funds that is not avoidable
in bankruptcy or otherwise except for the effect of Section 552(b) of
the United States Bankruptcy Code on interest on the trust funds
accruing after the commencement of a case under such statute and (b)
the Holders will be entitled to receive adequate protection of their
interests in such trust funds if such trust funds are used in such case
or proceeding;
(E) if the Notes are then listed on a national securities
exchange, the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that such deposit defeasance and discharge will
not cause the Notes to be delisted; and
(F) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 8.02 have been complied with.
Notwithstanding the foregoing, prior to the end of the 123-day
(or one year) period referred to in clause (D)(2)(y) of this Section 8.02, none
of the Company's obligations under this Indenture shall be discharged.
Subsequent to the end of such 123-day (or one year) period with respect to this
Section 8.02, the Company's obligations in Sections 2.02, 2.03, 2.04, 2.05,
2.06, 2.07, 2.08, 2.09, 2.14, 4.01, 4.02, 7.07, 7.08, 8.05 and 8.06 shall
survive until the Notes are no longer outstanding. Thereafter, only the
Company's obligations in Sections 7.07, 8.05 and 8.06 shall survive. If and when
a ruling from the Internal Revenue Service or an Opinion of Counsel referred to
in clause (D)(1) of this Section 8.02 is able to be provided specifically
without regard to, and not in reliance upon, the continuance of the Company's
obligations under Section 4.01, then the Company's obligations under such
Section 4.01 shall cease upon delivery to the Trustee of such ruling or Opinion
of Counsel and compliance with the other conditions precedent provided for
herein relating to the defeasance contemplated by this Section 8.02.
After any such irrevocable deposit, the Trustee upon request
shall acknowledge in writing the discharge of the Company's obligations under
the Notes and this Indenture except for those surviving obligations in the
immediately preceding paragraph.
SECTION 8.03. Defeasance of Certain Obligations. The Company
may omit to comply with any term, provision or condition set forth in clauses
(iii) and (iv) under Section 5.01 and Sections 4.03 through 4.17 and Section
4.19, clauses (c) and (d) under Section 6.01 with respect to such clauses (iii)
and (iv) under Section 5.01 and Sections 4.03 through 4.17 and
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Section 4.19, and clauses (e) and (f) under Section 6.01 shall be deemed
not to be Events of Default, in each case with respect to the outstanding
Notes if:
(i) with reference to this Section 8.03, the Company has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee (or another trustee satisfying the requirements of Section
7.10) and conveyed all right, title and interest to the Trustee for the
benefit of the Holders, under the terms of an irrevocable trust
agreement in form and substance satisfactory to the Trustee as trust
funds in trust, specifically pledged to the Trustee for the benefit of
the Holders as security for payment of the principal of, premium, if
any, and interest, if any, on the Notes, and dedicated solely to, the
benefit of the Holders, in and to (A) money in an amount, (B) U.S.
Government Obligations that, through the payment of interest and
principal in respect thereof in accordance with their terms, will
provide, not later than one day before the due date of any payment
referred to in this clause (i), money in an amount or (C) a combination
thereof in an amount sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge, without consideration of the reinvestment of such interest
and after payment of all federal, state and local taxes or other
charges and assessments in respect thereof payable by the Trustee, the
principal of, premium, if any, and interest on the outstanding Notes on
the Stated Maturity of such principal or interest; provided that the
Trustee shall have been irrevocably instructed to apply such money or
the proceeds of such U.S. Government Obligations to the payment of such
principal, premium, if any, and interest with respect to the Notes;
(ii) such deposit will not result in a breach or violation
of, or constitute a default under, this Indenture or any other
agreement or instrument to which the Company is a party or by which it
is bound;
(iii) no Default or Event of Default shall have occurred and
be continuing on the date of such deposit;
(iv) the Company has delivered to the Trustee an Opinion of
Counsel to the effect that (A) the creation of the defeasance trust
does not violate the Investment Company Act of 1940, (B) the Holders
have a valid first-priority security interest in the trust funds, (C)
the Holders will not recognize income, gain or loss for federal income
tax purposes as a result of such deposit and defeasance of certain
obligations and will be subject to federal income tax on the same
amount and in the same manner and at the same times as would have been
the case if such deposit and defeasance had not occurred and (D) after
the passage of 123 days following the deposit (except, with respect to
any trust funds for the account of any Holder who may be deemed to be
an "insider" for purposes of the United States Bankruptcy Code, after
one year following the deposit), the trust funds will not be subject to
the effect of Section 547 of the United States Bankruptcy
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Code or Section 15 of the New York Debtor and Creditor Law in a case
commenced by or against the Company under either such statute, and
either (1) the trust funds will no longer remain the property of the
Company (and therefore will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally) or (2) if a court were to rule
under any such law in any case or proceeding that the trust funds
remained property of the Company, (x) assuming such trust funds
remained in the possession of the Trustee prior to such court ruling to
the extent not paid to the Holders, the Trustee will hold, for the
benefit of the Holders, a valid and perfected security interest in such
trust funds that is not avoidable in bankruptcy or otherwise (except
for the effect of Section 552(b) of the United States Bankruptcy Code
on interest on the trust funds accruing after the commencement of a
case under such statute), (y) the Holders will be entitled to receive
adequate protection of their interests in such trust funds if such
trust funds are used in such case or proceeding and (z) no property,
rights in property or other interests granted to the Trustee or the
Holders in exchange for, or with respect to, such trust funds will be
subject to any prior rights of holders of other Indebtedness of the
Company or any of its Subsidiaries;
(v) if the Notes are then listed on a national securities
exchange, the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that such deposit defeasance and discharge will
not cause the Notes to be delisted; and
(vi) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 8.03 have been complied with.
SECTION 8.04. Application of Trust Money; Miscellaneous.
Subject to Section 8.06, the Trustee or Paying Agent shall hold in trust money
or U.S. Government Obligations deposited with it pursuant to Section 8.01, 8.02
or 8.03, as the case may be, and shall apply the deposited money and the money
from U.S. Government Obligations in accordance with the Notes and this Indenture
to the payment of principal of, premium, if any, and interest on the Notes; but
such money need not be segregated from other funds except to the extent required
by law. The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 8.01, 8.02 or 8.03 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of outstanding Notes.
SECTION 8.05. Repayment to Company. Subject to Sections 7.07,
8.01, 8.02 and 8.03, the Trustee and the Paying Agent shall promptly pay to the
Company upon request set forth in an Officers' Certificate any excess money held
by them at any time and thereupon shall be relieved from all liability with
respect to such money. The Trustee and the Paying Agent shall pay to the Company
upon written request any money held by them for the payment of principal,
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premium, if any, or interest that remains unclaimed for two years; provided that
the Trustee or such Paying Agent before being required to make any payment may
cause to be published at the expense of the Company once in a newspaper of
general circulation in the City of New York or mail to each Holder entitled to
such money at such Holder's address (as set forth in the Note Register) notice
that such money remains unclaimed and that after a date specified therein (which
shall be at least 30 days from the date of such publication or mailing) any
unclaimed balance of such money then remaining will be repaid to the Company.
After payment to the Company, Holders entitled to such money must look to the
Company for payment as general creditors unless an applicable law designates
another Person, and all liability of the Trustee and such Paying Agent with
respect to such money shall cease.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance with
Section 8.01, 8.02 or 8.03, as the case may be, by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.01, 8.02 or
8.03, as the case may be, until such time as the Trustee or Paying Agent is
permitted to apply all such money or U.S. Government Obligations in accordance
with Section 8.01, 8.02 or 8.03, as the case may be; provided that, if the
Company has made any payment of principal of, premium, if any, or interest on
any Notes because of the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money or U.S. Government Obligations held by the Trustee or Paying
Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders. The Company, when
authorized by a resolution of its Board of Directors, and the Trustee may amend
or supplement this Indenture or the Notes without notice to or the consent of
any Holder:
(1) to cure any ambiguity, defect or inconsistency in this
Indenture; provided that such amendments or supplements shall not
adversely affect the interests of the Holders in any material respect;
(2) to comply with Article Five;
(3) to comply with any requirements of the Commission in
connection with the qualification of this Indenture under the TIA;
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(4) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee; or
(5) to make any change that, in the good faith opinion of the
Board of Directors as evidenced by a Board Resolution, does not
materially and adversely affect the rights of any Holder.
SECTION 9.02. With Consent of Holders. Subject to Sections
6.04 and 6.07 and without prior notice to the Holders, the Company, when
authorized by its Board of Directors (as evidenced by a Board Resolution), and
the Trustee may amend this Indenture and the Notes with the Required Consent.
Notwithstanding the provisions of this Section 9.02, without
the consent of each Holder affected, an amendment or waiver, including a waiver
pursuant to Section 6.04, may not:
(i) change the Stated Maturity of the principal of, or any
installment of interest on, any Note,
(ii) reduce the Accreted Value of, or premium, if any, or
interest on, any Note,
(iii) change the place or currency of payment of principal
of, or premium, if any, or interest on, any Note or adversely affect
any right of repayment at the option of any Holder of any Note,
(iv) impair the right to institute suit for the enforcement
of any payment on or after the Stated Maturity (or, in the case of a
redemption, on or after the Redemption Date) of any Note,
(v) reduce the above-stated percentage of outstanding Notes
the consent of whose Holders is necessary to modify or amend this
Indenture,
(vi) waive a Default in the payment of principal of,
premium, if any, or interest on the Notes,
(vii) modify any of the provisions of this Section 9.02,
except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each outstanding Note affected thereby or
(viii) reduce the percentage or aggregate principal amount at
maturity of outstanding Notes the consent of whose Holders is necessary
for waiver of compliance with certain provisions of this Indenture or
for waiver of certain defaults.
It shall not be necessary for the consent of the Holders under
this Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
<PAGE> 83
77
After an amendment, supplement or waiver under this Section
9.02 becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. The Company will
mail supplemental indentures to Holders upon request. Any failure of the Company
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture or waiver.
SECTION 9.03. Revocation and Effect of Consent. Until an
amendment or waiver becomes effective, a consent to it by a Holder is a
continuing consent by the Holder and every subsequent Holder of a Note or
portion of a Note that evidences the same debt as the Note of the consenting
Holder, even if notation of the consent is not made on any Note. However, any
such Holder or subsequent Holder may revoke the consent as to its Note or
portion of its Note. Such revocation shall be effective only if the Trustee
receives the notice of revocation before the date the amendment, supplement or
waiver becomes effective. An amendment, supplement or waiver shall become
effective on receipt by the Trustee of written consents from the Holders of the
requisite percentage in principal amount of the outstanding Notes.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders entitled to consent to any
amendment, supplement or waiver. If a record date is fixed, then,
notwithstanding the last two sentences of the immediately preceding paragraph,
those persons who were Holders at such record date (or their duly designated
proxies) and only those persons shall be entitled to consent to such amendment,
supplement or waiver or to revoke any consent previously given, whether or not
such persons continue to be Holders after such record date. No such consent
shall be valid or effective for more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it
shall bind every Holder unless it is of the type described in any of clauses (i)
through (viii) of Section 9.02. In case of an amendment or waiver of the type
described in clauses (i) through (viii) of Section 9.02, the amendment or waiver
shall bind each Holder who has consented to it and every subsequent Holder of a
Note that evidences the same indebtedness as the Note of the consenting Holder.
SECTION 9.04. Notation on or Exchange of Notes. If an
amendment, supplement or waiver changes the terms of a Note, the Trustee may
require the Holder to deliver it to the Trustee. The Trustee may place an
appropriate notation on the Note about the changed terms and return it to the
Holder and the Trustee may place an appropriate notation on any Note thereafter
authenticated. Alternatively, if the Company or the Trustee so determines, the
Company in exchange for the Note shall issue and the Trustee shall authenticate
a new Note that reflects the changed terms.
<PAGE> 84
78
SECTION 9.05. Trustee to Sign Amendments, Etc. The Trustee
shall be entitled to receive, and shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of any amendment, supplement or
waiver authorized pursuant to this Article Nine is authorized or permitted by
this Indenture. Subject to the preceding sentence, the Trustee shall sign such
amendment, supplement or waiver if the same does not adversely affect the rights
of the Trustee. The Trustee may, but shall not be obligated to, execute any such
amendment, supplement or waiver that affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 9.06. Conformity with Trust Indenture Act. Every
supplemental indenture executed pursuant to this Article Nine shall conform to
the requirements of the TIA as then in effect.
ARTICLE TEN
MISCELLANEOUS
SECTION 10.01. Trust Indenture Act of 1939. Prior to the
effectiveness of the Registration Statement, this Indenture shall incorporate
and be governed by the provisions of the TIA that are required to be part of and
to govern indentures qualified under the TIA. After the effectiveness of the
Registration Statement, this Indenture shall be subject to the provisions of the
TIA that are required to be a part of this Indenture and shall, to the extent
applicable, be governed by such provisions.
SECTION 10.02. Notices. Any notice or communication shall be
sufficiently given if in writing and delivered in person or mailed by first
class mail addressed as follows:
if to the Company:
Nextel International, Inc.
1191 Second Avenue, Suite 1600
Seattle, Washington 98101
Attention: President
if to the Trustee:
The Bank of New York
101 Barclay Street
21 West
New York, New York 10286
Attention: Corporate Trust Trustee Administration
<PAGE> 85
79
The Company or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Holder shall be mailed
to such Holder at such person's address as it appears on the Note Register by
first class mail and shall be sufficiently given to such person if so mailed
within the time prescribed. Copies of any such communication or notice to a
Holder shall also be mailed to the Trustee and each Agent at the same time.
Failure to mail a notice or communication to a Holder or any
defect in it shall not affect its sufficiency with respect to other Holders.
Except for a notice to the Trustee, which is deemed given only when received,
and except as otherwise provided in this Indenture, if a notice or communication
is mailed in the manner provided in this Section 10.02, it is duly given,
whether or not the addressee receives it.
Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.
SECTION 10.03. Certificate and Opinion as to Conditions
Precedent. Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(i) an Officers' Certificate stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(ii) an Opinion of Counsel stating that, in the opinion of
such Counsel, all such conditions precedent have been complied with.
SECTION 10.04. Statements Required in Certificate of Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
<PAGE> 86
80
(i) a statement that each person signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statement or opinion
contained in such certificate or opinion is based;
(iii) a statement that, in the opinion of each such person, he
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(iv) a statement as to whether or not, in the opinion of each
such person, such condition or covenant has been complied with;
provided, however, that, with respect to matters of fact, an Opinion of
Counsel may rely on an Officers' Certificate or certificates of public
officials.
SECTION 10.05. Rules by Trustee, Paying Agent or Registrar.
The Trustee may make reasonable rules for action by or at a meeting of Holders.
The Paying Agent or Registrar may make reasonable rules for its functions.
SECTION 10.06. Payment Date Other Than a Business Day. If an
Interest Payment Date, Redemption Date, Payment Date, Stated Maturity or date of
maturity of any Note shall not be a Business Day, then payment of principal of,
premium, if any, or interest on such Note, as the case may be, need not be made
on such date, but may be made on the next succeeding Business Day with the same
force and effect as if made on the Interest Payment Date, Payment Date, or
Redemption Date, or at the Stated Maturity or date of maturity of such Note;
provided that no interest shall accrue for the period from and after such
Interest Payment Date, Payment Date, Redemption Date, Stated Maturity or date of
maturity, as the case may be.
SECTION 10.07. Governing Law. The laws of the State of New
York shall govern this Indenture and the Notes. The Trustee, the Company and the
Holders agree to submit to the jurisdiction of the courts of the State of New
York in any action or proceeding arising out of or relating to this Indenture or
the Notes.
SECTION 10.08. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or any Subsidiary of the Company. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
<PAGE> 87
81
SECTION 10.09. No Recourse Against Others. No recourse for the
payment of the principal of, premium, if any, or interest on any of the Notes,
or for any claim based thereon or otherwise in respect thereof, and no recourse
under or upon any obligation, covenant or agreement of the Company contained in
this Indenture, or in any of the Notes, or because of the creation of any
Indebtedness represented thereby, shall be had against any incorporator or
against any past, present or future partner, shareholder, other equityholder,
officer, director, employee or controlling person, as such, of the Company or of
any successor Person, either directly or through the Company or any successor
Person, whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being expressly
understood that all such liability is hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issue of the Notes.
SECTION 10.10. Successors. All agreements of the Company in
this Indenture and the Notes shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successor.
SECTION 10.11. Duplicate Originals. The parties may sign any
number of copies of this Indenture. Each signed copy shall be an original, but
all of them together represent the same agreement.
SECTION 10.12. Separability. In case any provision in this
Indenture or in the Notes shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 10.13. Table of Contents, Headings, Etc. The Table of
Contents, Cross-Reference Table and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not to
be considered a part hereof and shall in no way modify or restrict any of the
terms and provisions hereof.
SECTION 10.14. Non-Compete Agreement. The Company agrees not
to amend the Non-Compete Agreement in any respect material and adverse to the
Holders of the Notes. If the Company proposes to amend the Non-Compete
Agreement, it shall notify the Trustee in writing 30 days prior to the
effectiveness of such amendment of such proposal to amend and such notice shall
include a written copy of the contents of such proposed amendment (the
"Non-Compete Notice").
Within five days of receipt of a Non-Compete Notice, the Trustee shall
give written notice to the Holders of the Non-Compete Notice. Such notice by the
Trustee shall include a copy of the Non-Compete Notice.
<PAGE> 88
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, all as of the date first written above.
NEXTEL INTERNATIONAL, INC.
By: /s/ KEITH GRINSTEIN
-------------------------------
Name: Keith Grinstein
Title: President
THE BANK OF NEW YORK
By: /s/ MARY JANE MORRISSEY
-------------------------------
Name: Mary Jane Morrissey
Title: Vice President
<PAGE> 89
EXHIBIT A
[FACE OF NOTE]
NEXTEL INTERNATIONAL, INC.
12_% Senior Discount Note Due 2008
[CUSIP] [CINS] __________
No. $_________
The following information is supplied for purposes of Sections
1273 and 1275 of the Internal Revenue Code:
Issue Date: March 12, 1998 Original issue discount under
Section 1273 of the Internal
Yield to maturity for period Revenue Code (for each $1,000
from Issue Date to April 15, principal amount): $1,663.35
2008: 12.125%, compounded
semi-annually on April 15 and Issue Price (for each $1,000
October 15, commencing April principal amount): $549.15
15, 1998 (computed without
giving effect to the
additional payments of
interest in the event the
issuer fails to commence the
exchange offer or cause the
registration statement to be
declared effective, each as
described on the reverse
hereof)
NEXTEL INTERNATIONAL, INC., a Washington corporation (the
"Company", which term includes any successor under the Indenture hereinafter
referred to), for value received, promises to pay to ________________________ ,
or its registered assigns, the principal sum of ________________ ($_________ )
on April 15, 2008.
Interest Payment Dates: April 15 and October 15, commencing
October 15, 2003.
Regular Record Dates: April 1 and October 1.
Reference is hereby made to the further provisions of this Note
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
<PAGE> 90
IN WITNESS WHEREOF, the Company has caused this Note to be
signed manually or by facsimile by its duly authorized officers.
NEXTEL INTERNATIONAL, INC.
By:
----------------------------
Name:
Title:
By:
----------------------------
Name:
Title:
(Trustee's Certificate of Authentication)
This is one of the 12_% Senior Discount Notes due 2008 described
in the within-mentioned Indenture.
Date: THE BANK OF NEW YORK,
as Trustee
By:
----------------------------
Authorized Signatory
<PAGE> 91
A-4
[REVERSE SIDE OF NOTE]
NEXTEL INTERNATIONAL, INC.
12_% Senior Discount Note due 2008
1. Principal and Interest.
The Company will pay the principal of this Note on April 15,
2008.
The Company promises to pay interest on the principal amount
of this Note on each Interest Payment Date, as set forth below, at the rate per
annum shown above.
Interest will be payable semiannually (to the holders of
record of the Notes at the close of business on the April 1 or October 1
immediately preceding the Interest Payment Date) on each Interest Payment Date,
commencing October 15, 2003; provided that no interest shall accrue on the
principal amount of this Note prior to April 15, 2003 and no interest shall be
paid on this Note prior to October 15, 2003, except as provided in the next
paragraph.
If an exchange offer registered under the Securities Act is
not consummated and a shelf registration statement under the Securities Act with
respect to resales of the Notes is not declared effective by the Commission, on
or before September 12, 1998 in accordance with the terms of the Registration
Rights Agreement dated March 9, 1998 among the Company and Morgan Stanley & Co.
Incorporated, Chase Securities Inc. and Goldman, Sachs & Co., interest (in
addition to the accrual of original issue discount during the period ending
April 15, 2003 and in addition to the interest otherwise due on the Notes after
such date) will accrue, at a rate of 0.5% per annum of the Accreted Value of the
Notes on the preceding Semi-Annual Accrual Date, from September 12, 1998, and be
payable in cash, semi-annually in arrears, commencing October 15, 1998, until
(i) the exchange offer is consummated, (ii) the shelf registration statement is
declared effective or (iii) the date that the Notes become freely tradeable
without registration under the Securities Act, provided that upon the request of
any Holder of the Notes, the Company will deliver to such Holder certificates
evidencing such Holder's Notes without the legends restricting the transfer
thereof. The Holder of this Note is entitled to the benefits of such
Registration Rights Agreement.
From and after April 15, 2003, interest on the Notes will
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from April 15, 2003; provided that, if there is no
existing default in the payment of interest and this Note is authenticated
between a Regular Record Date referred to on the face hereof and the next
<PAGE> 92
A-5
succeeding Interest Payment Date, interest shall accrue from such Interest
Payment Date. Interest will be computed on the basis of a 360-day year of twelve
30-day months.
The Company shall pay interest on overdue principal and
premium, if any, and interest on overdue installments of interest, to the extent
lawful, at a rate per annum that is 2% in excess of the rate otherwise payable.
2. Method of Payment.
The Company will pay interest (except defaulted interest) on
the principal amount of the Notes as provided above on each April 15 and October
15 to the persons who are Holders (as reflected in the Note Register at the
close of business on such April 1 and October 1 immediately preceding the
Interest Payment Date), in each case, even if the Note is cancelled on
registration of transfer or registration of exchange after such record date;
provided that, with respect to the payment of principal, the Company will make
payment to the Holder that surrenders this Note to a Paying Agent on or after
April 15, 2008.
The Company will pay principal, premium, if any, and as
provided above, interest in money of the United States that at the time of
payment is legal tender for payment of public and private debts. However, the
Company may pay principal, premium, if any, and interest by its check payable in
such money. It may mail an interest check to a Holder's registered address (as
reflected in the Note Register). If a payment date is a date other than a
Business Day at a place of payment, payment may be made at that place on the
next succeeding day that is a Business Day and no interest shall accrue for the
intervening period.
3. Paying Agent and Registrar.
Initially, the Trustee will act as authenticating agent,
Paying Agent and Registrar. The Company may change any authenticating agent,
Paying Agent or Registrar without notice. The Company, any Subsidiary or any
Affiliate of any of them may act as Paying Agent, Registrar or co-Registrar.
4. Indenture; Limitations.
The Company issued the Notes under an Indenture dated as of
March 12, 1998 (the "Indenture"), between the Company and The Bank of New York
(the "Trustee"). Capitalized terms herein are used as defined in the Indenture
unless otherwise indicated. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act. The Notes are subject to all such terms, and Holders are referred
to the Indenture and the Trust Indenture Act for a statement of all such terms.
To the extent permitted by applicable law, in the event of any inconsistency
between the terms of this Note and the terms of the Indenture, the terms of the
Indenture shall control.
<PAGE> 93
A-6
The Notes are general unsecured obligations of the Company.
5. Redemption.
The Notes will be redeemable, at the Company's option, in
whole or in part, at any time on or after April 15, 2003 and prior to maturity,
upon not less than 30 nor more than 60 days' prior notice mailed by first-class
mail to each Holder's last address as it appears in the Note Register, at the
following Redemption Prices (expressed in percentages of their principal amount
at maturity), plus accrued and unpaid interest, if any, to the Redemption Date
(subject to the right of Holders of record on the relevant Regular Record Date
to receive interest due on an Interest Payment Date that is on or prior to the
Redemption Date) if redeemed during the 12-month period commencing on April 15
of the applicable year set forth below:
<TABLE>
<CAPTION>
Redemption
Year Price
---- ----------
<S> <C>
2003 106.063%
2004 104.042%
2005 102.021%
2006 and thereafter 100.000%
</TABLE>
In addition, at any time prior to April 15, 2001, the Company
may redeem up to 35% of the principal amount at maturity of the Notes with the
Net Cash Proceeds of one or more sales by the Company of its Capital Stock
(other than Redeemable Stock) at any time as a whole or from time to time in
part, at a Redemption Price (expressed as a percentage of Accreted Value on the
Redemption Date) of 112.125%, plus accrued and unpaid interest, if any, to the
Redemption Date (subject to the right of Holders of record on the relevant
Regular Record Date to receive interest due on an Interest Payment Date);
provided that at least $474,500,000 aggregate principal amount at maturity of
Notes remains outstanding after each such redemption and notice of such
redemption is mailed to Holders of the Notes within 60 days after the
consummation of such sale or sales.
Notice of any optional redemption will be mailed at least 30
days but not more than 60 days before the Redemption Date to each Holder of
Notes to be redeemed at his last address as it appears in the Note Register.
Notes in original denominations larger than $1,000 may be redeemed in part. On
and after the Redemption Date, interest ceases to accrue and the original issue
discount ceases to accrete on Notes or portions of Notes called for redemption,
unless the Company defaults in the payment of the Redemption Price.
<PAGE> 94
A-7
6. Repurchase upon Change in Control.
Upon the occurrence of any Change of Control, each Holder
shall have the right to require the repurchase of its Notes by the Company in
cash pursuant to the offer described in the Indenture at a purchase price equal
to 101% of the Accreted Value thereof plus accrued and unpaid interest, if any,
to the date of purchase (the "Change of Control Payment").
A notice of such Change of Control will be mailed within 30
days after any Change of Control occurs to each Holder at his last address as it
appears in the Note Register. Notes in original denominations larger than $1,000
may be sold to the Company in part. On and after the Change of Control Payment
Date, interest ceases to accrue and the original issue discount ceases to
accrete on Notes or portions of Notes surrendered for purchase by the Company,
unless the Company defaults in the payment of the Change of Control Payment.
7. Denominations; Transfer; Exchange.
The Notes are in registered form without coupons in
denominations of $1,000 of principal amount at maturity and multiples of $1,000
in excess thereof. A Holder may register the transfer or exchange of Notes in
accordance with the Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and to pay
any taxes and fees required by law or permitted by the Indenture. The Registrar
need not register the transfer or exchange of any Notes selected for redemption.
Also, it need not register the transfer or exchange of any Notes for a period of
15 days before the mailing of a notice of redemption of Notes to be redeemed is
made.
8. Persons Deemed Owners.
A Holder shall be treated as the owner of a Note for all
purposes.
9. Unclaimed Money.
If money for the payment of principal, premium, if any, or
interest remains unclaimed for two years, the Trustee and the Paying Agent will
pay the money back to the Company at its written request. After that, Holders
entitled to the money must look to the Company for payment, unless an abandoned
property law designates another Person, and all liability of the Trustee and
such Paying Agent with respect to such money shall cease.
10. Discharge Prior to Redemption or Maturity.
If the Company deposits with the Trustee money or U.S.
Government Obligations sufficient to pay the then outstanding principal of,
premium, if any, and accrued interest on the Notes (a) to redemption or
maturity, the Company will be discharged from the Indenture and the
<PAGE> 95
A-8
Notes, except in certain circumstances for certain sections thereof, and (b) to
the Stated Maturity, the Company will be discharged from certain covenants set
forth in the Indenture.
11. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Notes may
be amended or supplemented with the Required Consent, and any existing default
or compliance with any provision may be waived with the consent of the Holders
of at least a majority in principal amount of the Notes then outstanding.
Without notice to or the consent of any Holder, the parties thereto may amend or
supplement the Indenture or the Notes to, among other things, cure any
ambiguity, defect or inconsistency and make any change that does not materially
and adversely affect the rights of any Holder.
"Required Consent" means, except as otherwise expressly
provided in this Indenture with respect to matters requiring the consent of each
Holder of Notes affected thereby, (i) the consent of Holders of not less than a
majority in aggregate principal amount at Stated Maturity of the outstanding
Notes for any action to (x) direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any power
conferred upon such Trustee, or (y) consent to or waive, on behalf of the
Holders of all the Notes, any past default and its consequences, and (ii) with
respect to all other actions requiring the consent of Holders of the Notes, the
consent of either (x) a majority in aggregate principal amount at Stated
Maturity of the outstanding Notes or (y) a majority in aggregate principal
amount at Stated Maturity of (I) the Notes and (II) any other issue of
unsubordinated, unsecured notes issued by the Company, if such notes or the
indenture pursuant to which such notes were issued both (A) require the consent
of the holders of such notes to such action and (B) provide that the holders
thereof will vote with the Holders of the Notes with respect to such action.
12. Restrictive Covenants.
The Indenture imposes certain limitations on the ability of
the Company and its Restricted Group Members, among other things, to Incur
additional Indebtedness, make Restricted Payments, use the proceeds from Asset
Sales, engage in transactions with Affiliates or merge, consolidate or transfer
substantially all of its assets. Within 45 days after the end of each fiscal
quarter (90 days after the end of the last fiscal quarter of each year), the
Company must report to the Trustee on compliance with such limitations.
13. Successor Persons.
When a successor person or other entity assumes all the
obligations of its predecessor under the Notes and the Indenture, the
predecessor person will be released from those obligations.
<PAGE> 96
A-9
14. Defaults and Remedies.
The following events constitute "Events of Default" under the
Indenture: (a) default in the payment of principal of (or premium, if any, on)
any Note when the same becomes due and payable at maturity, upon acceleration,
redemption or otherwise; (b) default in the payment of interest on any Note when
the same becomes due and payable, and such default continues for a period of 30
days; (c) default in the performance or breach of the provisions of Article Five
or the failure to make or consummate an Offer to Purchase in accordance with
Section 4.10 or Section 4.11; provided that a default or breach of Section 4.10
arising from an Involuntary Event shall not constitute an Event of Default
unless such Involuntary Event continues for 90 days; (d) the Company defaults in
the performance of or breaches any other covenant or agreement of the Company in
this Indenture or under the Notes (other than a default specified in clause (a),
(b) or (c) above) and such default or breach continues for a period of 60
consecutive days after written notice by the Trustee or the Holders of 25% or
more in aggregate principal amount at maturity of the Notes, provided that a
default or breach of a covenant or agreement arising from a Restricted Affiliate
ceasing to observe any covenant applicable to it resulting from an Involuntary
Event shall not constitute an Event of Default unless such Involuntary Event
continues for 90 days; (e) there occurs with respect to any issue or issues of
Indebtedness of the Company or any Significant Group Member having an
outstanding principal amount of $5 million or more in the aggregate for all such
issues of all such Persons, whether such Indebtedness now exists or shall
hereafter be created, (I) an event of default that has caused the holder thereof
to declare such Indebtedness to be due and payable prior to its Stated Maturity
and such Indebtedness has not been discharged in full or such acceleration has
not been rescinded or annulled within 30 days of such acceleration and/or (II)
the failure to make a principal payment at the final (but not any interim) fixed
maturity and such defaulted payment shall not have been made, waived or extended
within 30 days of such payment default; provided that an acceleration or payment
default arising from an Involuntary Event shall not constitute an Event of
Default unless such Involuntary Event continues for 90 days; (f) any final
judgment or order (not covered by insurance) for the payment of money in excess
of $5 million in the aggregate for all such final judgments or orders against
all such Persons (treating any deductibles, self-insurance or retention as not
so covered) shall be rendered against the Company or any Significant Group
Member and shall not be paid or discharged, and there shall be any period of 30
consecutive days following entry of the final judgment or order that causes the
aggregate amount for all such final judgments or orders outstanding and not paid
or discharged against all such Persons to exceed $5 million during which a stay
of enforcement of such final judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; provided that a final judgment or order
arising from an Involuntary Event shall not constitute an Event of Default
unless such Involuntary Event continues for 90 days; (g) a court having
jurisdiction in the premises enters a decree or order for (A) relief in respect
of the Company or any Significant Group Member in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, (B) appointment
<PAGE> 97
A-10
of a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Company or any Significant Group Member or for all or
substantially all of the property and assets of the Company or any Significant
Group Member or (C) the winding up or liquidation of the affairs of the Company
or any Significant Group Member and, in each case, such decree or order shall
remain unstayed and in effect for a period of 60 consecutive days; or (h) the
Company or any Significant Group Member (A) commences a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or consents to the entry of an order for relief in an involuntary case
under any such law, (B) consents to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Company or any Significant Group Member or for all or
substantially all of the property and assets of the Company or any Significant
Group Member or (C) effects any general assignment for the benefit of creditors.
If an Event of Default, as defined in the Indenture, occurs
and is continuing, the Trustee or the Holders of at least 25% in principal
amount of the Notes may declare all the Notes to be due and payable. If a
bankruptcy or insolvency default with respect to the Company occurs and is
continuing, the Notes automatically become due and payable. Holders may not
enforce the Indenture or the Notes except as provided in the Indenture. The
Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Notes. Subject to certain limitations, Holders of at least a
majority in principal amount of the Notes then outstanding may direct the
Trustee in its exercise of any trust or power.
15. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any
other capacity, may make loans to, accept deposits from and perform services for
the Company or its Affiliates and may otherwise deal with the Company or its
Affiliates as if it were not the Trustee.
16. No Recourse Against Others.
No incorporator or any past, present or future partner,
shareholder, other equity holder, officer, director, employee or controlling
person as such, of the Company or of any successor Person shall have any
liability for any obligations of the Company under the Notes or the Indenture or
for any claim based on, in respect of or by reason of, such obligations or their
creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Notes.
17. Authentication.
This Note shall not be valid until the Trustee or
authenticating agent signs the certificate of authentication on the other side
of this Note.
<PAGE> 98
A-11
18. Abbreviations.
Customary abbreviations may be used in the name of a Holder or
an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors
Act).
The Company will furnish to any Holder upon written request
and without charge a copy of the Indenture. Requests may be made to Nextel
International, Inc., 1191 Second Avenue, Suite 1600, Seattle, Washington 98101,
Attention: President.
<PAGE> 99
A-12
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby
sell(s), assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
__________________________________________________________________________
Please print or typewrite name and address including zip code of assignee
__________________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing ___________________ attorney to transfer said Note on the books
of the Company with full power of substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL NOTES OTHER THAN EXCHANGE NOTES,
UNLEGENDED OFFSHORE GLOBAL NOTES AND
UNLEGENDED OFFSHORE PHYSICAL NOTES]
In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date the shelf registration statement with
respect to resales of the Notes is declared effective or (ii) the end of the
period referred to in Rule 144(k) under the Securities Act, the undersigned
confirms that without utilizing any general solicitation or general advertising
that:
[Check One]
[ ] (a) this Note is being transferred in compliance with the exemption
from registration under the Securities Act of 1933, as amended,
provided by Rule 144A thereunder.
or
[ ] (b) this Note is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Note and the Indenture.
<PAGE> 100
A-13
If none of the foregoing boxes is checked, the Trustee or other Registrar shall
not be obligated to register this Note in the name of any Person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.08 of the Indenture shall have
been satisfied.
Date:
---------------------- ---------------------------------------------
NOTICE: The signature to this
assignment must correspond with the
name as written upon the face of the
within-mentioned instrument in every
particular, without alteration or
any change whatsoever.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated:
---------------------- ---------------------------------------------
NOTICE: To be executed by an executive
officer
<PAGE> 101
A-14
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company
pursuant to Section 4.10 or Section 4.11 of the Indenture, check the Box: |_|
If you wish to have a portion of this Note purchased by the
Company pursuant to Section 4.10 or Section 4.11 of the Indenture, state the
amount (in principal amount at maturity): $ .
-------------------
Date:
----------------
Your Signature:
-----------------------------------------------------------------
(Sign exactly as your name appears on the other side of this
Note)
Signature Guarantee:
------------------------------
<PAGE> 102
EXHIBIT B
Form of Certificate
,
----------- ---
The Bank of New York
101 Barclay Street
21 West
New York, New York 10286
Attention: Corporate Trust Trustee Administration
Nextel International, Inc.
1191 Second Avenue, Suite 1600
Seattle, Washington 98101
Attention: President
Re: Nextel International, Inc. (the "Company")
12_% Senior Discount Notes
due 2008 (the "Notes")
Dear Sirs:
This letter relates to U.S. $ principal amount at maturity
of Notes represented by a Note (the "Legended Note") which bears a legend
outlining restrictions upon transfer of such Legended Note. Pursuant to Section
2.01 of the Indenture (the "Indenture") dated as of March 12, 1998 relating to
the Notes, we hereby certify that we are (or we will hold such securities on
behalf of) a person outside the United States to whom the Notes could be
transferred in accordance with Rule 904 of Regulation S promulgated under the
U.S. Securities Act of 1933, as amended. Accordingly, you are hereby requested
to exchange the legended certificate for an unlegended certificate representing
an identical principal amount at maturity of Notes, all in the manner provided
for in the Indenture.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Terms used in this certificate have
the meanings set forth in Regulation S.
Very truly yours,
[Name of Holder]
By:
------------------------
Authorized Signature
<PAGE> 103
EXHIBIT C
Form of Certificate to Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
,
----------- ---
The Bank of New York
101 Barclay Street
21 West
New York, NY 10286
Attention: Corporate Trust Trustee Administration
Nextel International, Inc.
1191 Second Avenue, Suite 1600
Seattle, Washington 98101
Re: Nextel International, Inc. (the "Company")
12_% Senior Discount Notes due 2008 (the "Notes")
Dear Sirs:
In connection with our proposed purchase of $__________________
aggregate principal amount at maturity of the Notes, we confirm that:
1. We understand that any subsequent transfer of the Notes is
subject to certain restrictions and conditions set forth in the Indenture dated
as of March 12, 1998, relating to the Notes (the "Indenture") and the
undersigned agrees to be bound by, and not to resell, pledge or otherwise
transfer the Notes except in compliance with, such restrictions and conditions
and the Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not
been registered under the Securities Act, and that the Notes may not be offered
or sold except as permitted in the following sentence. We agree, on our own
behalf and on behalf of any accounts for which we are
<PAGE> 104
C-2
acting as hereinafter stated, that if we should sell any Notes, we will do so
only (A) to the Company or any subsidiary thereof, (B) in accordance with Rule
144A under the Securities Act to a "qualified institutional buyer" (as defined
therein), (C) to an institutional "accredited investor" (as defined below) that,
prior to such transfer, furnishes (or has furnished on its behalf by a U.S.
broker-dealer) to you and to the Company a signed letter substantially in the
form of this letter, (D) outside the United States in accordance with Rule 904
of Regulation S under the Securities Act, (E) pursuant to the exemption from
registration provided by Rule 144 under the Securities Act, or (F) pursuant to
an effective registration statement under the Securities Act, and we further
agree to provide to any person purchasing any of the Notes from us a notice
advising such purchaser that resales of the Notes are restricted as stated
herein.
3. We understand that, on any proposed resale of any Notes, we
will be required to furnish to you and the Company such certifications, legal
opinions and other information as you and the Company may reasonably require to
confirm that the proposed sale complies with the foregoing restrictions. We
further understand that the Notes purchased by us will bear a legend to the
foregoing effect.
4. We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Notes, and
we and any accounts for which we are acting are each able to bear the economic
risk of our or its investment.
5. We are acquiring the Notes purchased by us for our own
account or for one or more accounts (each of which is an institutional
"accredited investor") as to each of which we exercise sole investment
discretion.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By:
-------------------------------------
Authorized Signature
<PAGE> 105
EXHIBIT D
Form of Certificate to Be Delivered
in Connection with Transfers
Pursuant to Regulation S
,
----------- ---
The Bank of New York
101 Barclay Street
21 West
New York, New York 10286
Attention: Corporate Trust Trustee Administration
Nextel International, Inc.
1191 Second Avenue, Suite 1600
Seattle, Washington 98101
Re: Nextel International, Inc. (the "Company")
12% Senior Discount Notes due 2008 (the "Notes")
Dear Sirs:
In connection with our proposed sale of U.S.$_________ aggregate
principal amount at maturity of the Notes, we confirm that such sale has been
effected pursuant to and in accordance with Regulation S under the Securities
Act of 1933, as amended, and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the
United States;
(2) at the time the buy order was originated, the transferee was
outside the United States or we and any person acting on our behalf reasonably
believed that the transferee was outside the United States;
<PAGE> 106
D-2
(3) no directed selling efforts have been made by us in the
United States in contravention of the requirements of Rule 903(b) or Rule 904(b)
of Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the U.S. Securities Act of 1933.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Terms used in this certificate have
the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
-------------------------------------
Authorized Signature
<PAGE> 1
EXHIBIT 4.3
- --------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
Dated March 9, 1998
between
NEXTEL INTERNATIONAL, INC.
and
MORGAN STANLEY & CO. INCORPORATED
CHASE SECURITIES INC.
GOLDMAN, SACHS & CO.
- --------------------------------------------------------------------------------
<PAGE> 2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made
and entered into March 9, 1998, between NEXTEL INTERNATIONAL, INC., a Washington
corporation (the "Company"), and MORGAN STANLEY & CO. INCORPORATED, CHASE
SECURITIES INC. and GOLDMAN, SACHS & CO. (the "Placement Agents").
This Agreement is made pursuant to the Placement Agreement
dated the date hereof, between the Company and the Placement Agents (the
"Placement Agreement"), which provides for the sale by the Company to the
Placement Agents of $730,000,000 aggregate principal amount at maturity
($400,879,500 initial accreted value) of its 12 1/8% Senior Discount Notes due
2008 (the "Securities") to be issued pursuant to the Indenture (as defined
below). In order to induce the Placement Agents to enter into the Placement
Agreement, the Company has agreed to provide to the Placement Agents and their
direct and indirect transferees the registration rights with respect to the
Securities set forth in this Agreement. The execution of this Agreement is a
condition to the closing under the Placement Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions.
As used in this Agreement, the following capitalized defined
terms shall have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended
from time to time.
"1934 Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
"Accreted Value" shall have the meaning set forth in the
Indenture.
"Closing Date" shall mean the Closing Date as defined in the
Placement Agreement.
"Company" shall have the meaning set forth in the preamble to
this Agreement and shall also include the Company's successors.
"Exchange Offer" shall mean the exchange offer by the Company
of Exchange Securities for Registrable Securities pursuant to Section
2(a) hereof.
<PAGE> 3
2
"Exchange Offer Registration" shall mean a registration under
the 1933 Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange
offer registration statement on Form S-4 (or, if applicable, on another
appropriate form) and all amendments and supplements to such
registration statement, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by
reference therein.
"Exchange Securities" shall mean securities issued by the
Company under the Indenture containing terms identical to the
Securities (except that (i) interest thereon shall accrue from the last
date on which interest was paid on the Securities or, if no such
interest has been paid, from April 15, 2003 and (ii) the Exchange
Securities will not contain restrictions on transfer) and to be offered
to Holders of Securities in exchange for Securities pursuant to the
Exchange Offer.
"Holder" shall mean the Placement Agents, for so long as they
own any Registrable Securities, and each of their successors, assigns
and direct and indirect transferees who become registered owners of
Registrable Securities under the Indenture; provided that for purposes
of Sections 4 and 5 of this Agreement, the term "Holder" shall include
Participating Broker-Dealers (as defined in Section 4(a)).
"Indenture" shall mean the Indenture relating to the
Securities to be dated as of March __, 1998 between the Company and The
Bank of New York, as trustee, and as the same may be amended from time
to time in accordance with the terms thereof.
"Majority Holders" shall mean the Holders of a majority of the
aggregate principal amount at maturity of outstanding Registrable
Securities; provided that whenever the consent or approval of Holders
of a specified percentage of Registrable Securities is required
hereunder, Registrable Securities held by the Company or any of its
affiliates (as such term is defined in Rule 405 under the 1933 Act)
(other than the Placement Agents or subsequent holders of Registrable
Securities if such subsequent holders are deemed to be such affiliates
solely by reason of their holding of such Registrable Securities) shall
not be counted in determining whether such consent or approval was
given by the Holders of such required percentage or amount.
"Person" shall mean an individual, partnership, limited
liability company, corporation, trust or unincorporated organization,
or a government or agency or political subdivision thereof.
"Placement Agents" shall have the meaning set forth in the
preamble to this Agreement.
<PAGE> 4
3
"Placement Agreement" shall have the meaning set forth in the
preamble to this Agreement.
"Prospectus" shall mean the prospectus included in a
Registration Statement, including any preliminary prospectus, and any
such prospectus as amended or supplemented by any prospectus
supplement, including a prospectus supplement with respect to the terms
of the offering of any portion of the Registrable Securities covered by
a Shelf Registration Statement, and by all other amendments and
supplements to such prospectus, and in each case including all material
incorporated by reference therein.
"Registrable Securities" shall mean the Securities; provided,
however, that the Securities shall cease to be Registrable Securities
(i) except in the case of the Placement Agents to the extent of any
unsold allotment and Participating Broker Dealers (as defined in
Section 4) to the extent set forth in Section 4(a), upon the expiration
date of the Exchange Offer, (ii) when a Shelf Registration Statement
with respect to such Securities shall have been declared effective
under the 1933 Act and such Securities shall have been disposed of
pursuant to such Registration Statement, (iii) when such Securities
have become freely tradeable under Rule 144(k) (or any similar
provision then in force, but not Rule 144A) without registration under
the 1933 Act, provided that, upon request of any Holder, the Company
will deliver to such Holder certificates evidencing such Holder's
Securities without the legends restricting the transfer thereof or (iv)
when such Securities shall have ceased to be outstanding.
"Registration Expenses" shall mean any and all expenses
incident to performance of or compliance by the Company with this
Agreement, including without limitation: (i) all SEC, stock exchange or
National Association of Securities Dealers, Inc. registration and
filing fees, (ii) all fees and expenses incurred in connection with
compliance with state securities or blue sky laws (including reasonable
fees and disbursements of counsel for any underwriters or Holders in
connection with blue sky qualification of any of the Exchange
Securities or Registrable Securities), (iii) all expenses of any
Persons in preparing or assisting in preparing, word processing,
printing and distributing any Registration Statement, any Prospectus,
any amendments or supplements thereto, any underwriting agreements,
securities sales agreements and other documents relating to the
performance of and compliance with this Agreement, (iv) all rating
agency fees, (v) all fees and disbursements relating to the
qualification of the Indenture under applicable securities laws, (vi)
the fees and disbursements of the Trustee and its counsel, (vii) the
fees and disbursements of counsel for the Company and, in the case of a
Shelf Registration Statement, the reasonable fees and disbursements of
one counsel for the Holders (which counsel shall be selected by the
Majority Holders and which counsel may
<PAGE> 5
4
also be counsel for the Placement Agents) and (viii) the fees and
disbursements of the independent public accountants of the Company,
including the expenses of any special audits or "cold comfort" letters
required by or incident to such performance and compliance, but
excluding fees and expenses of counsel to the underwriters (other than
reasonable fees and expenses set forth in clause (ii) above) or the
Holders and underwriting discounts and commissions and transfer taxes,
if any, relating to the sale or disposition of Registrable Securities
by a Holder.
"Registration Statement" shall mean any registration statement
of the Company that covers any of the Exchange Securities or
Registrable Securities pursuant to the provisions of this Agreement and
all amendments and supplements to any such Registration Statement,
including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.
"SEC" shall mean the Securities and Exchange Commission.
"Semi-Annual Accrual Date" shall have the meaning set forth in
the Indenture.
"Shelf Registration" shall mean a registration effected
pursuant to Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf"
registration statement of the Company pursuant to the provisions of
Section 2(b) of this Agreement which covers all of the Registrable
Securities (but no other securities unless approved by the Holders
whose Registrable Securities are covered by such Shelf Registration
Statement) on an appropriate form under Rule 415 under the 1933 Act, or
any similar rule that may be adopted by the SEC, and all amendments and
supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein,
all exhibits thereto and all material incorporated by reference
therein.
"Trustee" shall mean the trustee with respect to the
Securities under the Indenture.
"Underwritten Registration" or "Underwritten Offering" shall
mean a registration in which Registrable Securities are sold to an
Underwriter (as hereinafter defined) for reoffering to the public.
2. Registration Under the 1933 Act.
(a) To the extent not prohibited by any applicable law or
applicable interpretation of the Staff of the SEC, the Company shall use its
best efforts to cause to be filed
<PAGE> 6
5
an Exchange Offer Registration Statement covering the offer by the Company to
the Holders to exchange all of the Registrable Securities for Exchange
Securities and to have such Registration Statement remain effective until the
closing of the Exchange Offer. The Company shall commence the Exchange Offer
promptly after the Exchange Offer Registration Statement has been declared
effective by the SEC and use its best efforts to have the Exchange Offer
consummated not later than 60 days after such effective date. The Company shall
commence the Exchange Offer by mailing the related exchange offer Prospectus and
accompanying documents to each Holder stating, in addition to such other
disclosures as are required by applicable law:
(i) that the Exchange Offer is being made pursuant to this
Registration Rights Agreement and that all Registrable Securities
validly tendered will be accepted for exchange;
(ii) the dates of acceptance for exchange (which shall be a
period of at least 20 business days from the date such notice is
mailed) (the "Exchange Dates");
(iii) that any Registrable Security not tendered will remain
outstanding and continue to accrete in value until April 15, 2003 and
thereafter will accrue interest in accordance with the terms of the
Securities, but will not retain any rights under this Registration
Rights Agreement;
(iv) that Holders electing to have Registrable Securities
exchanged pursuant to the Exchange Offer will be required to surrender
such Registrable Security, together with the enclosed letters of
transmittal, to the institution and at the address specified in the
notice prior to the close of business on the last Exchange Date; and
(v) that Holders will be entitled to withdraw their election,
not later than the close of business on the last Exchange Date, by
sending to the institution and at the address specified in the notice a
telegram, telex, facsimile transmission or letter setting forth the
name of such Holder, the principal amount at maturity of Registrable
Securities delivered for exchange and a statement that such Holder is
withdrawing his election to have such Securities exchanged.
As soon as practicable after the last Exchange Date, the
Company shall:
(i) accept for exchange Registrable Securities or portions
thereof tendered and not validly withdrawn pursuant to the Exchange
Offer; and
(ii) deliver, or cause to be delivered, to the Trustee for
cancellation all Registrable Securities or portions thereof so accepted
for exchange by the Company and issue, and cause the Trustee to
promptly authenticate and mail to each Holder, Exchange
<PAGE> 7
6
Securities equal in principal amount at maturity to the principal
amount at maturity of the Registrable Securities surrendered by such
Holder.
The Company shall use its best efforts to complete the Exchange Offer as
provided above and shall comply with the applicable requirements of the 1933
Act, the 1934 Act and other applicable laws and regulations in connection with
the Exchange Offer. The Company shall inform the Placement Agents, if requested
by the Placement Agents, of the names and addresses of the Holders to whom the
Exchange Offer is made, and the Placement Agents shall have the right, subject
to applicable law, to contact such Holders and otherwise facilitate the tender
of Registrable Securities in the Exchange Offer.
(b) In the event that (i) the Company determines that the
Exchange Offer Registration provided for in Section 2(a) above is not available
or may not be consummated as soon as practicable after the last Exchange Date
because it would violate applicable law or the applicable interpretations of the
Staff of the SEC, (ii) the Exchange Offer is not for any other reason
consummated by September 12, 1998 or (iii) the Exchange Offer has been completed
and in the opinion of counsel for the Placement Agents a Registration Statement
must be filed and a Prospectus must be delivered by a Placement Agent in
connection with any offering or sale by such Placement Agent of Registrable
Securities held by them that constitute an unsold allotment, the Company shall
use its best efforts to cause to be filed as soon as practicable after such
determination, date or receipt of such opinion of counsel by the Company, as the
case may be, a Shelf Registration Statement providing for the sale by the
Holders of all of the Registrable Securities (other than Registrable Securities
of any Holder that is or becomes an affiliate (as defined in the 1933 Act and
the rules and regulations promulgated thereunder) of the Company) and to have
such Shelf Registration Statement declared effective by the SEC. In the event
the Company is required to file a Shelf Registration Statement solely as a
result of the matters referred to in clause (iii) of the preceding sentence, in
addition to its obligations under the foregoing Section 2(a), the Company shall
use its best efforts to file as soon as practicable after delivery of such
opinion of counsel and use its best efforts to have declared effective by the
SEC a Shelf Registration Statement (which may be a combined Registration
Statement with the Exchange Offer Registration Statement) with respect to offers
and sales of Registrable Securities held by such Placement Agent as part of its
original unsold allotment after completion of the Exchange Offer. The Placement
Agents shall sell out their unsold allotments before making sales of any other
Registrable Securities and shall notify the Company upon the sale of all of
their unsold allotments. The Company agrees to use its best efforts to keep the
Shelf Registration Statement continuously effective until the expiration of the
period referred to in Rule 144(k) with respect to all Registrable Securities
covered by the Shelf Registration Statement or such shorter period that will
terminate when all of the Registrable Securities covered by the Shelf
Registration Statement have been sold pursuant to the Shelf Registration
Statement. The Company further agrees to supplement or amend the Shelf
Registration Statement if required by the rules, regulations or instructions
applicable to the registration form
<PAGE> 8
7
used by the Company for such Shelf Registration Statement or by the 1933 Act or
by any other rules and regulations thereunder for shelf registration or if
reasonably requested by a Holder with respect to information relating to such
Holder, and to use its best efforts to cause any such amendment to become
effective and such Shelf Registration Statement to become usable as soon as
thereafter practicable. The Company agrees to furnish to the Holders of
Registrable Securities copies of any such supplement or amendment promptly after
its being used or filed with the SEC.
(c) The Company shall pay all Registration Expenses in
connection with the registration pursuant to Section 2(a) and Section 2(b). Each
Holder shall pay all underwriting discounts and commissions and transfer taxes,
if any, relating to the sale or disposition of such Holder's Registrable
Securities pursuant to the Shelf Registration Statement.
(d) An Exchange Offer Registration Statement pursuant to
Section 2(a) hereof or a Shelf Registration Statement pursuant to Section 2(b)
hereof will not be deemed to have become effective unless it has been declared
effective by the SEC; provided, however, that, if, after it has been declared
effective, the offering of Registrable Securities pursuant to a Shelf
Registration Statement is interfered with by any stop order, injunction or other
order or requirement of the SEC or any other governmental agency or court, such
Registration Statement will be deemed not to have become effective during the
period of such interference until the offering of Registrable Securities
pursuant to such Registration Statement may legally resume. As provided for in
the Indenture, in the event that the Exchange Offer is not consummated and the
Shelf Registration Statement is not declared effective on or prior to September
12, 1998, interest (in addition to the accrual of original issue discount during
the period ending April 15, 2003 and in addition to the interest otherwise due
on the Securities (and the Exchange Securities) after such date) will accrue, at
a rate of 0.5% per annum of the Accreted Value of the Securities on the
preceding Semi-Annual Accrual Date, from September 12, 1998 and be payable in
cash, semi-annually in arrears, commencing October 15, 1998 until (i) the
Exchange Offer is consummated, (ii) a Shelf Registration Statement is declared
effective or (iii) the date that the Securities become freely tradeable, without
registration under the 1933 Act; provided that, upon the request of any Holder
of the Securities, the Company will deliver to such Holder certificates
evidencing such Holder's Securities without the legends restricting the transfer
thereof.
(e) Without limiting the remedies available to the Placement
Agents and the Holders, the Company acknowledges that any failure by the Company
to comply with its obligations under Section 2(a) and Section 2(b) hereof may
result in material irreparable injury to the Placement Agents or the Holders for
which there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of any such
failure, the Placement Agents or any Holder may obtain such relief as may be
required to specifically enforce the Company's obligations under Section 2(a)
and Section 2(b) hereof.
<PAGE> 9
8
3. Registration Procedures.
In connection with the obligations of the Company with respect
to the Registration Statements pursuant to Section 2(a) and Section 2(b) hereof,
the Company shall as expeditiously as possible:
(a) prepare and file with the SEC a Registration Statement on
the appropriate form under the 1933 Act, which form (x) shall be
selected by the Company and (y) shall, in the case of a Shelf
Registration, be available for the sale of the Registrable Securities
by the selling Holders thereof and (z) shall comply as to form in all
material respects with the requirements of the applicable form and
include all financial statements required by the SEC to be filed
therewith, and use its best efforts to cause such Registration
Statement to become effective and remain effective in accordance with
Section 2 hereof;
(b) prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be
necessary to keep such Registration Statement effective for the
applicable period and cause each Prospectus to be supplemented by any
required prospectus supplement and, as so supplemented, to be filed
pursuant to Rule 424 under the 1933 Act; to keep each Prospectus
current during the period described under Section 4(3) and Rule 174
under the 1933 Act that is applicable to transactions by brokers or
dealers with respect to the Registrable Securities or Exchange
Securities;
(c) in the case of a Shelf Registration, furnish to each
Holder of Registrable Securities, to counsel for the Placement Agents,
to counsel for the Holders and to each Underwriter of an Underwritten
Offering of Registrable Securities, if any, without charge, as many
copies of each Prospectus, including each preliminary Prospectus, and
any amendment or supplement thereto and such other documents as such
Holder or Underwriter may reasonably request, in order to facilitate
the public sale or other disposition of the Registrable Securities; and
the Company consents to the use of such Prospectus and any amendment or
supplement thereto in accordance with applicable law by each of the
selling Holders of Registrable Securities and any such Underwriters in
connection with the offering and sale of the Registrable Securities
covered by and in the manner described in such Prospectus or any
amendment or supplement thereto in accordance with applicable law;
(d) use its reasonable best efforts to register or qualify the
Registrable Securities under all applicable state securities or "blue
sky" laws of such jurisdictions as any Holder of Registrable Securities
covered by a Registration Statement shall reasonably request in writing
by the time the applicable Registration Statement is declared effective
by the SEC, to cooperate with such Holders in connection with any
filings required to be made with the National Association of Securities
Dealers, Inc. and do any and all other
<PAGE> 10
9
acts and things which may be reasonably necessary or advisable to
enable such Holder to consummate the disposition in each such
jurisdiction of such Registrable Securities owned by such Holder;
provided, however, that the Company shall not be required to (i)
qualify as a foreign corporation or as a broker or dealer in securities
in any jurisdiction where it would not otherwise be required to qualify
but for this Section 3(d), (ii) file any general consent to service of
process or (iii) subject itself to taxation in any such jurisdiction if
it is not so subject;
(e) in the case of a Shelf Registration, notify each Holder of
Registrable Securities, counsel for the Holders and counsel for the
Placement Agents promptly and, if requested by any such Holder or
counsel, confirm such advice in writing (i) when such Registration
Statement has become effective and when any post-effective amendment
thereto has been filed and becomes effective, (ii) of any request by
the SEC or any state securities authority for amendments and
supplements to such Registration Statement and Prospectus or for
additional information after such Registration Statement has become
effective, (iii) of the issuance by the SEC or any state securities
authority of any stop order suspending the effectiveness of such
Registration Statement or the initiation of any proceedings for that
purpose, (iv) if, between the effective date of such Registration
Statement and the closing of any sale of Registrable Securities covered
thereby, the representations and warranties of the Company contained in
any underwriting agreement, securities sales agreement or other similar
agreement, if any, relating to the offering cease to be true and
correct in all material respects or if the Company receives any
notification with respect to the suspension of the qualification of the
Registrable Securities for sale in any jurisdiction or the initiation
of any proceeding for such purpose, (v) of the happening of any event
during the period a Shelf Registration Statement is effective which
makes any statement in such Shelf Registration Statement or the related
Prospectus untrue in any material respect or which requires the making
of any changes in such Shelf Registration Statement or Prospectus in
order to make the statements therein not misleading and (vi) of any
determination by the Company that a post-effective amendment to such
Registration Statement would be appropriate;
(f) make every reasonable effort to obtain the withdrawal of
any order suspending the effectiveness of a Registration Statement at
the earliest possible moment and provide immediate notice to each
Holder of the withdrawal of any such order;
(g) in the case of a Shelf Registration, furnish to each
Holder of Registrable Securities, without charge, at least one
conformed copy of each Registration Statement and any post-effective
amendment thereto (without documents incorporated therein by reference
or exhibits thereto, unless requested);
(h) in the case of a Shelf Registration, cooperate with the
selling Holders of
<PAGE> 11
10
Registrable Securities to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold
and not bearing any restrictive legends and enable such Registrable
Securities to be in such denominations (consistent with the provisions
of the Indenture) and registered in such names as the selling Holders
may reasonably request at least one business day prior to the closing
of any sale of Registrable Securities;
(i) in the case of a Shelf Registration, upon the occurrence
of any event contemplated by Section 3(e)(v) or (vi) hereof, use its
best efforts to prepare and file with the SEC a supplement or
post-effective amendment to a Registration Statement or the related
Prospectus or any document incorporated therein by reference or file
any other required document so that, as thereafter delivered to the
purchasers of the Registrable Securities, such Prospectus will not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Company
agrees to notify the Holders to suspend use of the Prospectus as
promptly as practicable after the occurrence of such an event, and the
Holders hereby agree to suspend use of the Prospectus upon receipt of
such notice until the Company has amended or supplemented the
Prospectus to correct such misstatement or omission;
(j) a reasonable time prior to the filing of any Registration
Statement, any Prospectus, any amendment to a Registration Statement or
amendment or supplement to a Prospectus or any document which is to be
incorporated by reference into a Registration Statement (other than
filings pursuant to the 1934 Act) or a Prospectus after initial filing
of a Registration Statement, provide copies of such document to the
Placement Agents and their counsel (and, in the case of a Shelf
Registration Statement, the Holders and their counsel) and make such of
the representatives of the Company as shall be reasonably requested by
the Placement Agents or their counsel (and, in the case of a Shelf
Registration Statement, the Holders or their counsel) available for
discussion of such document, and shall not at any time file or make any
amendment to the Registration Statement, any Prospectus or any
amendment of or supplement to a Registration Statement or a Prospectus
or any document which is to be incorporated by reference into a
Registration Statement (other than filings pursuant to the 1934 Act) or
a Prospectus, of which the Placement Agents and their counsel (and, in
the case of a Shelf Registration Statement, the Holders and their
counsel) shall not have previously been advised and furnished a copy or
to which the Placement Agents or their counsel (and, in the case of a
Shelf Registration Statement, the Holders or their counsel) shall
reasonably object;
(k) obtain a CUSIP number for all Exchange Securities or
Registrable Securities, as the case may be, not later than the
effective date of a Registration Statement;
<PAGE> 12
11
(l) cause the Indenture to be qualified under the Trust
Indenture Act of 1939, as amended (the "TIA"), in connection with the
registration of the Exchange Securities or Registrable Securities, as
the case may be, cooperate with the Trustee and the Holders to effect
such changes to the Indenture as may be required for the Indenture to
be so qualified in accordance with the terms of the TIA and execute,
and use its reasonable best efforts to cause the Trustee to execute,
all documents as may be required to effect such changes and all other
forms and documents required to be filed with the SEC to enable the
Indenture to be so qualified in a timely manner;
(m) in the case of a Shelf Registration, make available for
inspection by a representative of the Holders of the Registrable
Securities, any Underwriter participating in any disposition pursuant
to such Shelf Registration Statement, and attorneys and accountants
designated by the Holders, at reasonable times and in a reasonable
manner, all financial and other records, pertinent documents and
properties of the Company, and cause the respective officers, directors
and employees of the Company to supply all information reasonably
requested by any such representative, Underwriter, attorney or
accountant in connection with a Shelf Registration Statement; provided,
however, that such persons shall first agree in writing with the
Company that any information that is reasonably and in good faith
designated by the Company in writing as confidential at the time of
delivery of such information shall be kept confidential by such
persons, unless and to the extent that disclosure of such information
is required by law or such information becomes generally available to
the public other than as a result of a disclosure of failure to
safeguard such information by such person;
(n) if reasonably requested by any Holder of Registrable
Securities covered by a Registration Statement in order to accurately
reflect information regarding such Holder or such Holder's plan of
distribution as required by such Registration Statement, (i) promptly
incorporate in a Prospectus supplement or post-effective amendment such
required information with respect to such Holder as such Holder
reasonably requests to be included therein and (ii) make all required
filings of such Prospectus supplement or such post-effective amendment
as soon as the Company has received notification of the matters to be
incorporated in such filing; and
(o) in the case of a Shelf Registration, use its reasonable
best efforts to enter into such customary agreements and take all such
other actions in connection therewith (including those requested by the
Holders of a majority of the Registrable Securities being sold) in
order to expedite or facilitate the disposition of such Registrable
Securities including, but not limited to, an Underwritten Offering and
in such connection, (i) to the extent possible, make such
representations and warranties to the Holders and any Underwriters of
such Registrable Securities with respect to the business of the Company
<PAGE> 13
12
and its subsidiaries, the Registration Statement, Prospectus and
documents incorporated by reference or deemed incorporated by
reference, if any, in each case, in form, substance and scope as are
customarily made by issuers to underwriters in Underwritten Offerings
(but in no event more onerous to the Company than those contained in
the Placement Agreement), and confirm the same if and when requested,
(ii) obtain opinions of counsel to the Company (which counsel and
opinions, in form, scope and substance, shall be reasonably
satisfactory to the Holders and such Underwriters and their respective
counsel) addressed to each selling Holder and Underwriter of
Registrable Securities, covering the matters customarily covered in
opinions requested in Underwritten Offerings (but in no event more
onerous to the Company than those opinions required in the Placement
Agreement), (iii) obtain "cold comfort" letters from the independent
certified public accountants of the Company (and, if necessary, any
other certified public accountant of any subsidiary of the Company, or
of any business acquired by the Company for which financial statements
and financial data are or are required to be included in the
Registration Statement) addressed to each selling Holder and
Underwriter of Registrable Securities, such letters to be in customary
form and covering matters of the type customarily covered in "cold
comfort" letters in connection with Underwritten Offerings, and (iv)
deliver such documents and certificates as may be reasonably requested
by the Holders of a majority in principal amount at maturity of the
Registrable Securities being sold or the Underwriters, and which are
customarily delivered in Underwritten Offerings, to evidence the
continued validity of the representations and warranties of the Company
made pursuant to clause (i) above and to evidence compliance with any
customary conditions contained in an underwriting agreement.
In the case of a Shelf Registration Statement, the Company may
require each Holder of Registrable Securities to furnish to the Company such
information regarding the Holder and the proposed distribution by such Holder of
such Registrable Securities as the Company may from time to time reasonably
request in writing.
In the case of a Shelf Registration Statement, each Holder
agrees that, upon receipt of any notice from the Company of the happening of any
event of the kind described in Section 3(e)(v) or (vi) hereof, such Holder will
forthwith discontinue disposition of Registrable Securities pursuant to a
Registration Statement until such Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 3(i) hereof, and, if
so directed by the Company, such Holder will deliver to the Company (at its
expense) all copies in its possession, other than permanent file copies then in
such Holder's possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice. The Company may suspend the
disposition of Registrable Securities pursuant to a Shelf Registration Statement
for an aggregate of 120 days during any 365 day period. If the Company shall
suspend the disposition of Registrable Securities pursuant to a Shelf
Registration Statement for more than an aggregate of 60 days during any 365 day
period, then the Company shall pay each Holder of
<PAGE> 14
13
Registrable Securities that are registered pursuant to the Shelf Registration
Statement and have not been sold pursuant thereto an illiquidity fee in an
amount equal to 0.5% (calculated at an annual rate for the actual number of days
of suspension in excess of 60 days in such 365 day period) of the Accreted Value
as of the most recent Semi-Annual Accrual Date of such Registrable Securities
held by such Holder.
The Holders of Registrable Securities covered by a Shelf
Registration Statement who desire to do so may sell such Registrable Securities
in an Underwritten Offering. In any such Underwritten Offering, the investment
banker or investment bankers and manager or managers (the "Underwriters") that
will administer the offering will be selected by the Majority Holders of the
Registrable Securities included in such offering.
4. Participation of Broker-Dealers in Exchange Offer.
(a) The Staff of the SEC has taken the position that any
broker-dealer that receives Exchange Securities for its own account in the
Exchange Offer in exchange for Securities that were acquired by such
broker-dealer as a result of market-making or other trading activities (a
"Participating Broker-Dealer"), may be deemed to be an "underwriter" within the
meaning of the 1933 Act and must deliver a prospectus meeting the requirements
of the 1933 Act in connection with any resale of such Exchange Securities.
The Company understands that it is the Staff's position that
if the Prospectus contained in the Exchange Offer Registration Statement
includes a plan of distribution containing a statement to the above effect and
the means by which Participating Broker-Dealers may resell the Exchange
Securities, without naming the Participating Broker-Dealers or specifying the
amount of Exchange Securities owned by them, such Prospectus may be delivered by
Participating Broker-Dealers to satisfy their prospectus delivery obligation
under the 1933 Act in connection with resales of Exchange Securities for their
own accounts, so long as the Prospectus otherwise meets the requirements of the
1933 Act.
(b) In light of the above, notwithstanding the other
provisions of this Agreement, the Company agrees that the provisions of this
Agreement as they relate to a Shelf Registration shall also apply to an Exchange
Offer Registration to the extent, and with such reasonable modifications thereto
as may be, reasonably requested by the Placement Agents or by one or more
Participating Broker-Dealers, in each case as provided in clause (ii) below, in
order to expedite or facilitate the disposition of any Exchange Securities by
Participating Broker-Dealers consistent with the positions of the Staff recited
in Section 4(a) above; provided that:
(i) the Company shall not be required to amend or supplement
the Prospectus contained in the Exchange Offer Registration Statement,
as would otherwise be contemplated by Section 3(i), for a period
exceeding 90 days after the last Exchange Date
<PAGE> 15
14
(as such period may be extended pursuant to the penultimate paragraph
of Section 3 of this Agreement) and Participating Broker-Dealers shall
not be authorized by the Company to deliver and shall not deliver such
Prospectus after such period in connection with the resales
contemplated by this Section 4;
(ii) the application of the Shelf Registration procedures set
forth in Section 3 of this Agreement to an Exchange Offer Registration,
to the extent not required by the positions of the Staff of the SEC or
the 1933 Act and the rules and regulations thereunder, will be in
conformity with the reasonable request to the Company by the Placement
Agents or with the reasonable request in writing to the Company by one
or more broker-dealers who certify to the Placement Agents and the
Company in writing that they anticipate that they will be Participating
Broker-Dealers; and provided further that, in connection with such
application of the Shelf Registration procedures set forth in Section 3
to an Exchange Offer Registration, the Company shall be obligated (x)
to deal only with one entity representing the Participating
Broker-Dealers, which shall be Morgan Stanley & Co. Incorporated unless
it elects not to act as such representative and (y) to cause to be
delivered only one, if any, "cold comfort" letter with respect to the
Prospectus in the form existing on the last Exchange Date and with
respect to each subsequent amendment or supplement, if any, effected
during the period specified in clause (i) above; and
(iii) on a weekly basis, the representative of the
Participating Broker-Dealers shall confirm with the Company that the
Registration Statement is available.
(c) The Placement Agents shall have no liability to the
Company or any Holder with respect to any request that it may make pursuant to
Section 4(b) above.
5. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless the
Placement Agents, each Holder and each person, if any, who controls any
Placement Agent or any Holder within the meaning of either Section 15 of the
1933 Act or Section 20 of the 1934 Act, or is under common control with, or is
controlled by, any Placement Agent or any Holder, from and against all losses,
claims, damages and liabilities (including, without limitation, any legal or
other expenses reasonably incurred by the Placement Agents, any Holder or any
such controlling or affiliated person in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement (or any amendment thereto) pursuant to which Exchange Securities or
Registrable Securities were registered under the 1933 Act, including all
documents incorporated therein by reference, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, or caused by any
untrue statement or alleged untrue statement of a material fact contained in any
<PAGE> 16
15
Prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact necessary to make the statements
therein in light of the circumstances under which they were made not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission based
upon information relating to the Placement Agents or any Holder furnished to the
Company in writing by the Placement Agents or any selling Holder expressly for
use therein, provided that the foregoing indemnity agreement shall (i) not inure
to the benefit of any Holder or any person controlling such Holder, with respect
to any sale or disposition of the Registrable Securities by such Holder in
violation of the penultimate paragraph of Section 3 of this Agreement and (ii)
with respect to any preliminary Prospectus, not inure to the benefit of any
Placement Agent from whom the person asserting any such losses, claims, damages
or liabilities purchased Securities; or any person controlling such Placement
Agent, if a copy of the final Prospectus (as then amended or supplemented, if
the Company shall have furnished any amendments or supplements thereto) was not
sent or given by or on behalf of such Placement Agent to such person, if
required by law to have been delivered at or prior to the written confirmation
of the sale of the Securities to such person, and if the final Prospectus (as so
amended or supplemented) would have cured the defect giving rise to such losses,
claims, damages or liabilities, unless such failure is the result of
noncompliance by the Company to furnish copies of the final Prospectus, any
documents incorporated by reference therein and any supplements and amendments
thereto as such Placement Agent has reasonably requested. In connection with any
Underwritten Offering permitted by Section 3, the Company will also indemnify
the Underwriters, if any, their officers and directors and each Person who
controls such Persons (within the meaning of the Securities Act and the Exchange
Act) to the same extent as provided above with respect to the indemnification of
the Holders, if requested in connection with any Registration Statement.
(b) Each Holder agrees, severally and not jointly, to
indemnify and hold harmless the Company, the Placement Agents and the other
selling Holders, and each of their respective directors, officers who sign the
Registration Statement and each person, if any, who controls the Company, any
Placement Agent and any other selling Holder within the meaning of either
Section 15 of the 1933 Act or Section 20 of the 1934 Act to the same extent as
the foregoing indemnity from the Company to the Placement Agents and the
Holders, but only with reference to information relating to such Holder
furnished to the Company in writing by such Holder expressly for use in any
Registration Statement (or any amendment thereto) or any Prospectus (or any
amendment or supplement thereto).
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either paragraph (a) or paragraph (b) above,
such person (the "indemnified party") shall promptly notify the person against
whom such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
<PAGE> 17
16
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the reasonable fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such counsel or
(ii) the named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and representation
of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for (a) the reasonable fees and
expenses of more than one separate firm (in addition to any local counsel) for
the Placement Agents and all persons, if any, who control any Placement Agent
within the meaning of either Section 15 of the 1933 Act or Section 20 of the
1934 Act, (b) the reasonable fees and expenses of more than one separate firm
(in addition to any local counsel) for the Company, its directors and officers
who sign the Registration Statement and each person, if any, who controls the
Company within the meaning of either such Section and (c) the fees and expenses
of more than one separate firm (in addition to any local counsel) for all
Holders and all persons, if any, who control any Holders within the meaning of
either such Section, and that all such fees and expenses shall be reimbursed as
they are incurred. In such case involving the Placement Agents and persons who
control the Placement Agent, such firm shall be designated in writing by Morgan
Stanley & Co. Incorporated. In such case involving the Holders and such persons
who control Holders, such firm shall be designated in writing by the Majority
Holders. In all other cases, such firm shall be designated by the Company. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent but, if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for reasonable fees and expenses of counsel as
contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement having
been entered into and (iii) such indemnifying party shall not have reimbursed
the indemnified party for such fees and expenses of counsel in accordance with
such request prior to the date of such settlement. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which such
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding; provided that such unconditional
release
<PAGE> 18
17
may be subject to a parallel release of a claimant or plaintiff by such
indemnified party from all liability in respect of claims or counterclaims
asserted by such indemnified party.
(d) If the indemnification provided for in paragraph (a) or
paragraph (b) of this Section 5 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities in such proportion as is appropriate to reflect the relative fault
of the indemnifying party or parties on the one hand and of the indemnified
party or parties on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative fault of the
Company and the Holders shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Holders and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Holders' respective obligations to contribute
pursuant to this Section 5(d) are several in proportion to the respective
principal amount at maturity of Registrable Securities of such Holder that were
registered pursuant to a Registration Statement.
(e) The Company and each Holder agree that it would not be
just or equitable if contribution pursuant to this Section 5 were determined by
pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in paragraph (d) above. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in paragraph (d) above shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 5, no Holder shall be required to indemnify or
contribute any amount in excess of the amount by which the total price at which
Registrable Securities were sold by such Holder exceeds the amount of any
damages that such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the 1933 Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The remedies provided for in this
Section 5 are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.
The indemnity and contribution provisions contained in this
Section 5 shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of the Placement Agents, any Holder or any person controlling any Placement
Agent or any Holder, or by or on behalf of the Company, its officers
<PAGE> 19
18
or directors or any person controlling the Company, (iii) acceptance of any of
the Exchange Securities and (iv) any sale of Registrable Securities pursuant to
a Shelf Registration Statement.
6. Miscellaneous.
(a) No Inconsistent Agreements. The Company has not entered
into, and on or after the date of this Agreement will not enter into, any
agreement which is inconsistent with the rights granted to the Holders of
Registrable Securities in this Agreement or otherwise conflicts with the
provisions hereof. The rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted to the holders of
the Company's other issued and outstanding securities under any such agreements.
(b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of Holders
of at least a majority in aggregate principal amount at maturity of the
outstanding Registrable Securities affected by such amendment, modification,
supplement, waiver or consent; provided, however, that no amendment,
modification, supplement, waiver or consent to any departure from the provisions
of Section 5 hereof shall be effective as against any Holder of Registrable
Securities unless consented to in writing by such Holder.
(c) Notices. All notices and other communications provided
for or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such Holder to
the Company by means of a notice given in accordance with the provisions of this
Section 6(c), which address initially is, with respect to the Placement Agents,
the address set forth in the Placement Agreement; and (ii) if to the Company,
initially at the Company's address set forth in the Placement Agreement and
thereafter at such other address, notice of which is given in accordance with
the provisions of this Section 6(c).
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied; and
on the next business day if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands, or other communications
shall be concurrently delivered by the person giving the same to the Trustee, at
the address specified in the Indenture.
<PAGE> 20
19
(d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of each
of the parties, including, without limitation and without the need for an
express assignment, subsequent Holders; provided that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of Registrable
Securities in violation of the terms of the Placement Agreement. If any
transferee of any Holder shall acquire Registrable Securities, in any manner,
whether by operation of law or otherwise, such Registrable Securities shall be
held subject to all of the terms of this Agreement, and by taking and holding
such Registrable Securities such person shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Agreement and such person shall be entitled to receive the benefits hereof. The
Placement Agents (in their capacity as Placement Agents) shall have no liability
or obligation to the Company with respect to any failure by a Holder to comply
with, or any breach by any Holder of, any of the obligations of such Holder
under this Agreement.
(e) Purchases and Sales of Securities. The Company shall not,
and shall use its best efforts to cause its affiliates (as defined in Rule 405
under the 1933 Act) not to, purchase and then resell or otherwise transfer any
Securities.
(f) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company, on the one
hand, and the Placement Agents, on the other hand, and each Holder shall have
the right to enforce such agreements directly to the extent it deems such
enforcement necessary or advisable to protect its rights or the rights of
Holders hereunder.
(g) Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
<PAGE> 21
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
NEXTEL INTERNATIONAL, INC.
By /s/ KEITH D. GRINSTEIN
---------------------------------------
Name: Keith D. Grinstein
Title: President
Confirmed and accepted as of
the date first above written:
MORGAN STANLEY & CO. INCORPORATED
CHASE SECURITIES INC.
GOLDMAN, SACHS & CO.
By: MORGAN STANLEY & CO. INCORPORATED
By /s/ JONATHAN MORPHETT
--------------------------
Name: Jonathan Morphett
Title: Principal
<PAGE> 1
EXHIBIT 10.1
EXECUTION COUNTERPART
=============================================
CREDIT AGREEMENT
dated as of
February 27, 1998
between
NEXTEL ARGENTINA S.R.L.
(formerly McCaw Argentina S.A.),
The SUBSIDIARY GUARANTORS Party Hereto,
The LENDERS Party Hereto
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
--------------------
U.S. $83,000,000
--------------------
=============================================
<PAGE> 2
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS 1
SECTION 1.01. Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Classification of Loans and Borrowings. . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 1.03. Terms Generally. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 1.04. Accounting Terms; GAAP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE II THE CREDITS 26
SECTION 2.01. The Commitments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 2.02. Loans and Borrowings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 2.03. Requests for Borrowings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 2.04. Letters of Credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 2.05. Funding of Borrowings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 2.06. Interest Elections. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 2.07. Termination and Reduction of the Commitments. . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 2.08. Repayment of Loans; Evidence of Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 2.09. Prepayment of Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 2.10. Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 2.11. Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 2.12. Alternate Rate of Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 2.13. Increased Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 2.14. Break Funding Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 2.15. Argentine Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 2.16. Payments Generally; Pro Rata Treatment; Sharing of Set-offs. . . . . . . . . . . . . . . . . 51
SECTION 2.17. Mitigation Obligations; Replacement of Lenders. . . . . . . . . . . . . . . . . . . . . . . . 54
ARTICLE III GUARANTEE 55
SECTION 3.01. The Guarantee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 3.02. Obligations Unconditional. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 3.03. Reinstatement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 3.04. Subrogation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 3.05. Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 3.06. Instrument for the Payment of Money. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 3.07. Continuing Guarantee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 3.08. Rights of Contribution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 3.09. General Limitation on Guarantee Obligations. . . . . . . . . . . . . . . . . . . . . . . . . 58
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ARTICLE IV REPRESENTATIONS AND WARRANTIES 58
SECTION 4.01. Organization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 4.02. Authorization; Enforceability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 4.03. Governmental Approvals; No Conflicts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 4.04. Legal Form. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 4.05. Financial Condition; No Material Adverse Change. . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 4.06. Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 4.07. Litigation and Environmental Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 4.08. Compliance with Laws and Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 4.09. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 4.10. Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 4.11. Material Agreements and Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 4.12. Subsidiaries, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 4.13. Security Interests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 4.14. Ranking. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 4.15. Commercial Activity; Absence of Immunity. . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 4.16. Use of Credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 4.17. Real Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 4.18. Vendor Contract. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
ARTICLE V CONDITIONS 65
SECTION 5.01. Closing Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 5.02. Each Credit Event. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
ARTICLE VI AFFIRMATIVE COVENANTS 70
SECTION 6.01. Financial Statements and Other Information. . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 6.02. Notices of Material Events. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 6.03. Existence; Conduct of Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 6.04. Payment of Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 6.05. Maintenance of Properties; Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 6.06. Books and Records; Inspection Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 6.07. Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 6.08. Use of Proceeds and Letters of Credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 6.09. Certain Obligations Respecting Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 6.10. Governmental Approvals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 6.11. Certain Additional Collateral Security. . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
ARTICLE VII NEGATIVE COVENANTS 78
SECTION 7.01. Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 7.02. Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 7.03. Fundamental Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
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SECTION 7.04. Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 7.05. Restricted Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 7.06. Transactions with Affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 7.07. Restrictive Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 7.08. Certain Financial Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 7.09. Modifications of Certain Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
SECTION 7.10. Fiscal Year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
SECTION 7.11. Limitation on Optional Payments and Modifications of Debt Instruments. . . . . . . . . . . . 88
ARTICLE VIII EVENTS OF DEFAULT 89
ARTICLE IX THE ADMINISTRATIVE AGENT 93
ARTICLE X MISCELLANEOUS 95
SECTION 10.01. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
SECTION 10.02. Waivers; Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
SECTION 10.03. Expenses; Indemnity; Damage Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
SECTION 10.04. Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
SECTION 10.05. Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
SECTION 10.06. Counterparts; Integration; Effectiveness. . . . . . . . . . . . . . . . . . . . . . . . . . 103
SECTION 10.07. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
SECTION 10.08. Right of Setoff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
SECTION 10.09. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
SECTION 10.10. Jurisdiction, Service of Process and Venue. . . . . . . . . . . . . . . . . . . . . . . . . 104
SECTION 10.11. WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
SECTION 10.12. No Immunity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
SECTION 10.13. Judgment Currency; Foreign Exchange. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
SECTION 10.14. Use of English Language. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
SECTION 10.15. Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
SECTION 10.16. Treatment of Certain Information; Confidentiality. . . . . . . . . . . . . . . . . . . . . . 107
SCHEDULE I - Commitments
SCHEDULE II - Government Approvals and Licenses
SCHEDULE III - Indebtedness
SCHEDULE IV - Material Agreements and Liens
SCHEDULE V - Restrictive Agreements
SCHEDULE VI - Litigation and Environmental Matters
SCHEDULE VII - Subsidiaries and Investments
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EXHIBIT A - Form of Borrowing Request
EXHIBIT B - Form of Assignment and Acceptance
EXHIBIT C-1 - - Form of Parent Pledge Agreement
EXHIBIT C-2 - - Form of Undertaking and Security Agreement
EXHIBIT D-1 - - Form of Capital Subscription Agreement
EXHIBIT D-2 - - Form of Consent and Agreement
EXHIBIT E - Form of Opinion of Special New York Counsel to the Relevant Parties
EXHIBIT F - Form of Opinion of Special Argentine Counsel to the Borrower
EXHIBIT G - Form of Opinion of Special Argentine Counsel to Chase
EXHIBIT H - Form of Opinion of Special New York Counsel to Chase
EXHIBIT I - Form of Guarantee Assumption Agreement
EXHIBIT J - Form of Process Agent Acceptance
</TABLE>
iv
<PAGE> 6
CREDIT AGREEMENT dated as of February 27, 1998, between NEXTEL
ARGENTINA S.R.L. (formerly McCaw Argentina S.A.), the SUBSIDIARY GUARANTORS
party hereto, the LENDERS party hereto and THE CHASE MANHATTAN BANK, as
Administrative Agent.
The Borrower (as hereinafter defined) has requested that the
Lenders (as so defined) extend credit (by means of loans and letters of credit)
to it in an aggregate principal amount not exceeding U.S. $83,000,000 at any
one time outstanding (which amount may, in the circumstances herein provided be
increased to U.S. $150,000,000), the proceeds of such extensions of credit to
be used (a) in the case of Tranche A1 Loans, Tranche A2 Loans and Incremental
Facility Loans (as so defined), to finance the import of capital goods by the
Borrower into Argentina and (b) in the case of Tranche B1 Loans, Tranche B2
Loans and Incremental Facility Loans (as so defined), to finance capital
expenditures related to the development, expansion and upgrade of the
Borrower's network system, to finance permitted spectrum acquisitions by the
Borrower, and to finance the general working capital needs of the Borrower and
its subsidiaries. The Lenders are prepared to extend such credit upon the
terms and conditions hereof and, accordingly, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement,
the following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate.
"Adjusted LIBO Rate" means, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means The Chase Manhattan Bank, in its
capacity as administrative agent for the Lenders hereunder.
Credit Agreement
<PAGE> 7
-2-
"Administrative Questionnaire" means an Administrative
Questionnaire in a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the Person
specified.
"Alternate Base Rate" means, for any day, a rate per annum
equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Base
CD Rate in effect on such day plus 1% and (c) the Federal Funds Effective Rate
in effect on such day plus 1/2 of 1%. Any change in the Alternate Base Rate
due to a change in the Prime Rate, the Base CD Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate,
respectively.
"Applicable Margin" means (a) 3.75% per annum in the case of
Eurodollar Loans and (b) 2.75% per annum in the case of ABR Loans.
"Applicable Percentage" means (a) with respect to any Tranche
A2 Lender for purposes of Section 2.04, the percentage of the total Tranche A2
Commitments represented by such Lender's Tranche A2 Commitment, (b) with
respect to any Tranche B2 Lender for purposes of Section 2.04, the percentage
of the total Tranche B2 Commitments represented by such Lender's Tranche B2
Commitment and (c) with respect to any Lender in respect of any indemnity claim
under Section 10.03(c) arising out of an action or omission of the
Administrative Agent under this Agreement, the percentage of the total
Commitments or Loans of all Classes hereunder represented by the aggregate
amount of such Lender's Commitment or Loans of all Classes hereunder.
"Argentina" means the Republic of Argentina.
"Argentine Taxes" means any and all Taxes imposed by Argentina
or any taxing authority thereof or therein, other than Excluded Taxes and Other
Taxes.
"Assessment Rate" means, for any day, the annual assessment
rate in effect on such day that is payable by a member of the Bank Insurance
Fund classified as "well-capitalized" and within supervisory subgroup "B" (or a
comparable successor risk classification) within the meaning of 12 C.F.R. Part
327 (or any successor provision) to the Federal Deposit Insurance Corporation
for insurance by such Corporation of time deposits made in U.S. Dollars at the
offices of such member in the United States; provided that if, as a result of
any change in any law, rule or regulation, it is no longer possible to
determine the Assessment
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<PAGE> 8
- 3 -
Rate as aforesaid, then the Assessment Rate shall be such annual rate as shall
be determined by the Administrative Agent to be representative of the cost of
such insurance to the Lenders.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 10.04), and accepted by the Administrative
Agent, in the form of Exhibit B or any other form approved by the
Administrative Agent.
"Availability Period" means the period from and including the
Closing Date to and including the Commitment Termination Date.
"Average Life to Maturity" means, as at any date of
determination with respect to any Indebtedness, the quotient obtained by
dividing (a) the sum of the products of (i) the number of years from such date
of determination to the date or dates of each successive principal payment of
such Indebtedness multiplied by (ii) the amount of each such principal payment
by (b) the sum of all such principal payments.
"Base Case Projections" means the base case projections,
including the quarterly projections through December 31, 2000, agreed between
the Borrower and the Lenders.
"Base CD Rate" means the sum of (a) the Three-Month Secondary
CD Rate multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
"Board" means the Board of Governors of the Federal Reserve
System of the United States of America.
"Borrower" means Nextel Argentina S.R.L., an Argentine
sociedad de responsabilidad limitada.
"Borrowing" means Loans of the same Class and Type, made,
converted or continued on the same date and, in the case of Eurodollar Loans,
as to which a single Interest Period is in effect.
"Borrowing Request" means a request by the Borrower for a
Borrowing in accordance with Section 2.03 substantially in the form of Exhibit
A.
"Business Day" means any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to remain closed; provided that, when used in connection with a
Eurodollar Loan, the term "Business Day" shall
Credit Agreement
<PAGE> 9
- 4 -
also exclude any day on which banks are not open for dealings in U.S. Dollar
deposits in the London interbank market.
"Capital Expenditures" means, for any period, the sum of (a)
expenditures (including the aggregate amount of Capital Lease Obligations
incurred during such period and the aggregate amount used to purchase handsets
for use in rental or leasing programs) made by the Borrower or any of its
Subsidiaries to acquire or construct fixed assets, plant and equipment
(including renewals, improvements and replacements, but excluding repairs)
during such period computed in accordance with GAAP plus (b) the value of
equipment contributed during such period directly or indirectly through the
Parent by the Parent Shareholder to the Borrower in respect of its Capital
Stock during such period as contemplated in the definition of "Equity Capital"
in this Section 1.01 (and, for purposes hereof, the amount of the "Capital
Expenditure" arising upon such contribution shall be deemed to be equal to the
value of such equipment so contributed as provided in the last sentence of such
definition of "Equity Capital").
"Capital Lease" means, with respect to any Person, any lease
of (or other arrangement conveying the right to use) real or personal property,
or a combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Capital Lease Obligations" of any Person means the
obligations of such Person to pay rent or other amounts under any Capital
Leases.
"Capital Stock" means, as to any Person, any and all shares,
quotas, interests, rights to purchase, warrants, options, participations or
other equivalents or interest in (however designated) the common or preferred
equity or equity or preference share capital of such Person, each of which
shall be nonredeemable.
"Capital Subscription Agreement" means a Capital Subscription
Agreement, substantially in the form of Exhibit D-1, pursuant to which the
Parent Shareholder agrees to capitalize the Parent and the Parent agrees to
capitalize the Borrower, in each case by investing in the equity capital of the
Parent and the Borrower, as applicable.
"Cayman Islands Pledge Agreement" means a Cayman Islands
Pledge Agreement between the holder or holders of all of the issued and
outstanding shares of Capital Stock of the Parent and the Administrative Agent,
pursuant to which such holders shall pledge such shares of Capital Stock under
the law of the Cayman Islands (and under such other laws as shall be
appropriate in each case in a manner and pursuant to documentation satisfactory
to the
Credit Agreement
<PAGE> 10
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Administrative Agent), in each case in form and substance satisfactory to the
Administrative Agent.
"Change in Law" means (a) the adoption by any relevant
Governmental Authority of any law, decree, rule or regulation after the date of
this Agreement, (b) any change in any law, decree, rule or regulation or in the
interpretation or application thereof by any relevant Governmental Authority
after the date of this Agreement or (c) compliance by any Lender or the Issuing
Lender (or, for purposes of Section 2.13(b), by any lending office of such
Lender or by such Lender's or the Issuing Lender's holding company, if any)
with any request, guideline or directive (whether or not having the force of
law) of any Governmental Authority charged with the interpretation or
administration thereof made or issued after the date of this Agreement.
"Change of Control" means that the Parent Shareholder shall
fail to own directly or indirectly at least 51% of the fully diluted economic
equity interests in the Borrower and to have the right directly or indirectly
to vote a majority of the quotas of capital of the Borrower and appoint a
majority of the managers or administrators of the Borrower.
"Chase" means The Chase Manhattan Bank, a New York banking
corporation.
"Class" when used in reference to any Loan, Borrowing or
Letter of Credit, refers to whether such Loan, or the Loans comprising such
Borrowing, are Tranche A1 Loans, Tranche A2 Loans, Tranche B1 Loans, Tranche B2
Loans or Incremental Facility Loans, or whether such Letter of Credit is a
Tranche A2 Letter of Credit or a Tranche B2 Letter of Credit and, when used in
reference to any Commitment, refers to whether such Commitment is a Tranche A1
Commitment, Tranche A2 Commitment, Tranche B1 Commitment, Tranche B2 Commitment
or Incremental Facility Commitment.
"Closing Date" means the date on which the conditions
specified in Section 5.01 are satisfied (or waived in accordance with Section
10.02).
"Commitment" means a Tranche A1 Commitment, Tranche A2
Commitment, Tranche B1 Commitment, Tranche B2 Commitment or Incremental
Facility Commitment, or any combination thereof (as the context requires).
"Commitment Termination Date" means the Quarterly Date falling
on or nearest to March 31, 2000.
"Consent and Agreement" means a Consent and Agreement,
substantially in the form of Exhibit D-2, pursuant to which the Parent
Shareholder and the Parent consent to the
Credit Agreement
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collateral assignment by the Parent and the Borrower to the Administrative
Agent of their respective rights under the Capital Subscription Agreement
"Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. "Controlling" and "Controlled" have meanings correlative thereto.
"Covered Property" means, collectively, the Licenses, all
contract rights (including rights relating to the Borrower's network system),
all material undertakings (including insurance policies), all equipment,
machinery, facilities, tangible personal property, inventory, real estate and
shares of capital stock or other ownership interests in Subsidiaries (other
than Excepted Property).
"Default" means any event or condition which constitutes an
Event of Default or which upon notice, lapse of time or both would, unless
cured or waived, become an Event of Default.
"Disposition" means any sale, assignment, transfer or other
disposition of any property (whether now owned or hereafter acquired) by the
Borrower or any of its Subsidiaries to any other Person. The term Dispose has
a meaning correlative thereto.
"Disposition Investment" means, with respect to any
Disposition, any promissory notes or other evidences of indebtedness or
Investments received by the Borrower or any of its Subsidiaries in connection
with such Disposition.
"EBITDA" means for any period, the sum, for the Borrower and
its Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), of the following: (a) net income (calculated before
taxes, Interest Expense, extraordinary and unusual items and income or loss
attributable to equity in affiliates) for such period plus (b) depreciation and
amortization (to the extent deducted in determining net income) for such
period.
"Environmental Laws" means all statutes, laws, rules,
regulations, codes, ordinances, orders, decrees, judgments, injunctions,
notices or binding agreements issued, promulgated or entered into by or with,
any Argentine Governmental Authority (or any other Governmental Authority
having jurisdiction over the business, operations or properties of the Borrower
or any of its Subsidiaries), relating in any way to the environment,
preservation or reclamation of natural resources, the management, release or
threatened release of any Hazardous Substance or to health and safety matters.
Credit Agreement
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"Environmental Liability" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower or any
Subsidiary directly or indirectly resulting from or based upon (a) violation of
any Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Substances, (c) exposure to any
Hazardous Substance, (d) the release or threatened release of any Hazardous
Substances into the environment or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.
"Equity Capital" means (i) the amount of cash consideration
paid to the Borrower in exchange for newly- issued Capital Stock of the
Borrower, (ii) the amount of any irrevocable contribution of cash to the
Borrower in respect of its Capital Stock made by any then-existing equityholder
and (iii) the value of equipment contributed directly or indirectly through the
Parent by the Parent Shareholder to the Borrower, in respect of its Capital
Stock, so long as such equipment is newly manufactured and has been purchased
by the Parent Shareholder from third party vendor(s), not an Affiliate, within
30 days prior to the date of delivery of such equipment to the Borrower. For
purposes hereof, the value of any equipment contributed to the Borrower as
contemplated by the foregoing clause (iii) shall be valued at the purchase
price therefor reflected on the invoice of the respective vendor.
"Equity Rights" means, with respect to any Person, any
subscriptions, options, warrants, commitments, preemptive rights or agreements
of any kind (including any shareholders' or voting trust agreements) for the
issuance, sale, registration or voting of, or securities convertible into, any
additional shares of capital stock or quotas of any class, or partnership or
other ownership interests of any type in, such Person.
"Eurodollar", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are
bearing interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in
Article VIII.
"Excepted Property" means, as to any Person, (a) all
equipment, machinery and tangible personal property of such Person that is not
identified by serial numbers or similar identifying marks and (b) all desks,
personal computers and miscellaneous office supplies whether or not identified
by serial numbers or similar identifying marks.
Credit Agreement
<PAGE> 13
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"Excess Cash Flow" means, for any fiscal year, (a) EBITDA for
such fiscal year minus (b) the sum of (i) Capital Expenditures made during such
fiscal year (except for any such Capital Expenditures to the extent financed
with the proceeds of Indebtedness, or Capital Lease Obligations, incurred
pursuant to Section 7.01 during such fiscal year) plus (ii) all regularly
scheduled payments of principal of Indebtedness (including, without limitation,
the principal component of any payments in respect of Capital Lease
Obligations) made during such fiscal year plus (iii) all Interest Expense for
such fiscal year plus (iv) the aggregate amount of taxes paid or payable in
respect of the income or profit of the Borrower and its Subsidiaries for such
fiscal year plus (iv) the aggregate amount by which Working Capital shall
increase (or minus the aggregate amount by which Working Capital shall
decrease) from the beginning of such fiscal year to the end of such fiscal
year.
"Excluded Taxes" means, with respect to the Administrative
Agent, the Issuing Lender, any Lender, or any other recipient of any payment to
be made by or on account of any obligation of the Borrower hereunder, (a)
income or franchise taxes imposed on (or measured by) its net income by the
jurisdiction under the laws of which such recipient is organized or in which
its principal office is located or, in the case of any Lender, in which its
applicable lending office is located, (b) any tax similar to the branch profits
taxes imposed by the United States of America that is imposed by Argentina and
(c) in the case of a Foreign Lender (other than an assignee pursuant to a
request by the Borrower under Section 2.17(b)), any withholding tax that is
imposed on amounts payable to such Foreign Lender at a rate that does not
exceed the rate imposed at the time such Foreign Lender becomes a party to this
Agreement or is attributable to such Foreign Lender's failure to comply with
Section 2.15(c), except to the extent that such Foreign Lender's assignor (if
any) was entitled, at the time of assignment, to receive additional amounts
from the Borrower with respect to such withholding tax pursuant to Section
2.15(a).
"Federal Funds Effective Rate" means, for any day, the
weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for
such day for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
"Financial Officer" means the chief financial officer,
principal accounting officer, treasurer or controller of the Borrower.
Credit Agreement
<PAGE> 14
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"Foreign Lender" means any Lender that is organized under the
laws of a jurisdiction other than Argentina.
"Funded Indebtedness" means, for any Person, any Indebtedness
of such Person of the type referred to in clauses (a) through (e) (inclusive)
and (h) of the definition of "Indebtedness" in this Section 1.01 (and any
Guarantees by such Person of any Funded Indebtedness of others).
"GAAP" means generally accepted accounting principles in
effect from time to time in the United States of America.
"Governmental Authority" means the government of the United
States of America, Argentina, any other nation or any political subdivision
thereof, whether state or local, and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity (including any federal or
other association of or with which any such nation may be a member or
associated) exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having
the economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided, that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.
"Guarantee Assumption Agreement" means a Guarantee Assumption
Agreement substantially in the form of Exhibit I by an entity that, pursuant to
Section 6.09(a) is required to become a "Subsidiary Guarantor" hereunder in
favor of the Administrative Agent.
"Guaranteed Obligations" has the meaning assigned to such term
in Section 3.01.
Credit Agreement
<PAGE> 15
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"Hazardous Substances" means any toxic, radioactive, caustic
or otherwise hazardous substance, including petroleum, its derivatives,
by-products and other hydrocarbons, including natural gas, or like substances,
each of which is subject to regulation under any Environmental Laws.
"Hedging Agreement" means any interest rate protection
agreement, foreign currency exchange agreement, commodity price protection
agreement or other interest or currency exchange rate or commodity price
hedging arrangement.
"Incremental Facility Commitment" of any Series means, with
respect to each Lender, the commitment, if any, of such Lender to make
Incremental Facility Loans of such Series, as such commitment may be (a)
reduced from time to time pursuant to Section 2.07 or 2.09(b) and (b) reduced
or increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 10.04. The amount of each Lender's Incremental Facility
Commitment of any Series shall be determined in accordance with the provisions
of Section 2.01(e). The aggregate amount of the Incremental Facility
Commitments of all Series shall not exceed U.S. $50,000,000.
"Incremental Facility Lenders" means, in respect of any series
of Incremental Facility Loans, a Lender with an Incremental Facility Commitment
of such Series or, if the Incremental Facility Commitments of such Series have
terminated or expired, a Lender with Incremental Facility Loans of such Series.
"Incremental Facility Loans" means the Loans described in
Section 2.01(e) which may be ABR Loans and/or Eurodollar Loans.
"Indebtedness" of any Person means, without duplication, (a)
all obligations of such Person for borrowed money or with respect to deposits
or advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid (excluding current accounts
payable and trade accounts payable incurred in the ordinary course of business
but including any of the foregoing arising pursuant to vendor financing
arrangements or the like), (d) all obligations of such Person under conditional
sale or other title retention agreements relating to property acquired by such
Person, (e) all obligations of such Person in respect of the deferred purchase
price of property or services (excluding current accounts payable and trade
accounts payable incurred in the ordinary course of business but including any
of the foregoing arising pursuant to vendor financing arrangements or the
like), (f) all Indebtedness of others secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien on property owned or acquired by such Person, whether or
Credit Agreement
<PAGE> 16
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not the Indebtedness secured thereby has been assumed, (g) all Guarantees by
such Person of Indebtedness of others, (h) all Capital Lease Obligations of
such Person, (i) all obligations, contingent or otherwise, of such Person as an
account party in respect of letters of credit and letters of guaranty and (j)
all obligations, contingent or otherwise, of such Person in respect of bankers'
acceptances. The Indebtedness of any Person shall include the Indebtedness of
any other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person's ownership interest in or other relationship with such entity, except
to the extent the terms of such Indebtedness provide that such Person is not
liable therefor.
"Information Memorandum" means the Confidential Information
Memorandum dated January 1998 prepared in connection with the syndication of
the facilities contemplated by this Agreement.
"Interconnection Agreement" means an Interconnection Agreement
with an Argentine carrier acceptable to the Required Lenders, sufficient for
the initial build-out of the Borrower's network system to the levels
contemplated by the Base Case Projections, and otherwise in form and substance
satisfactory to the Required Lenders.
"Interest Coverage Ratio" means, as at any date of
determination thereof, the ratio of (a) the product of EBITDA for the fiscal
quarter ending on or most recently ended prior to such date times four to (b)
Interest Expense for the period of four fiscal quarters ending on such date.
"Interest Election Request" means a request by the Borrower to
convert or continue a Borrowing in accordance with Section 2.06.
"Interest Expense" means, for any period, the sum, for the
Borrower and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following: (a) all interest and
fees in respect of Indebtedness (including the interest component of any
payments in respect of Capital Lease Obligations) accrued or capitalized during
such period, but excluding any interest not required to be paid in cash during
such period plus (b) the net amount payable (or minus the net amount
receivable) under Hedging Agreements during such period (whether or not
actually paid or received during such period).
"Interest Payment Date" means (a) with respect to any ABR
Loan, each Quarterly Date and (b) with respect to any Eurodollar Loan, the last
day of the Interest Period applicable to the Borrowing of which such Loan is a
part and, in the case of a Eurodollar Borrowing with an Interest Period of more
than three months' duration, each day prior to the last day of such
Credit Agreement
<PAGE> 17
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Interest Period that occurs at intervals of three months' duration after the
first day of such Interest Period.
"Interest Period" means, with respect to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing and ending on
the numerically corresponding day in the calendar month that is one, two, three
or six months thereafter, as the Borrower may elect; provided, that (i) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day, (ii) any
Interest Period that commences on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period and (iii) if any Interest
Period commences before the Readjustment Date and would otherwise end
thereafter, such Interest Period shall end on the Readjustment Date, provided
that in no event shall any such Interest Period have a duration of less than
one month. For purposes hereof, the date of a Borrowing initially shall be the
date on which such Borrowing is made and thereafter shall be the effective date
of the most recent conversion or continuation of such Borrowing.
"Investment" means, for any Person: (a) the acquisition
(whether for cash, property, services or securities or otherwise) of capital
stock, quotas, bonds, notes, debentures, partnership or other ownership
interests or other securities of any other Person or any agreement to make any
such acquisition (including any "short sale" or any sale of any securities at a
time when such securities are not owned by the Person entering into such sale);
(b) the making of any deposit with, or advance, loan or other extension of
credit to, any other Person (including the purchase of property from another
Person subject to an understanding or agreement, contingent or otherwise, to
resell such property to such Person), but excluding any such advance, loan or
extension of credit having a term not exceeding 90 days arising in connection
with the sale of inventory or supplies or the providing of services by such
Person in the ordinary course of business; (c) the entering into of any
Guarantee of, or other contingent obligation with respect to, Indebtedness or
other liability of any other Person and (without duplication) any amount
committed to be advanced, lent or extended to such Person; or (d) the entering
into of any Hedging Agreement.
"Issuing Lender" means Chase, in its capacity as the issuer of
Letters of Credit hereunder, and its successors in such capacity as provided in
Section 2.04(j).
"LC Disbursement" means, as applicable, a Tranche A2 LC
Disbursement or a Tranche B2 LC Disbursement.
Credit Agreement
<PAGE> 18
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"LC Exposure" means, collectively, the Tranche A2 LC Exposure
and the Tranche B2 LC Exposure.
"Lenders" means the Persons listed on Schedule I and any other
Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto
pursuant to an Assignment and Acceptance.
"Letter of Credit" means, collectively, the Tranche A2 Letters
of Credit and the Tranche B2 Letters of Credit.
"Letter of Credit Documents" means, with respect to any Letter
of Credit, collectively, any application therefor and any other agreements,
instruments, guarantees or other documents (whether general in application or
applicable only to such Letter of Credit) governing or providing for (a) the
rights and obligations of the parties concerned or at risk with respect to such
Letter of Credit or (b) any collateral security for any of such obligations,
each as the same may be modified and supplemented and in effect from time to
time.
"Leverage Ratio" means, as at any date, the ratio of (a)
aggregate outstanding principal amount of all Funded Indebtedness of the
Borrower and its Subsidiaries (determined on a consolidated basis, without
duplication, in accordance with GAAP) on such date to (b) the product of EBITDA
for the fiscal quarter ending on or most recently ended prior to such date
times four.
"LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, the rate appearing on Page 3750 of the Dow Jones
Markets Service (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to U.S. Dollar deposits in
the London interbank market) at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period, as the rate
for U.S. Dollar deposits with a maturity comparable to such Interest Period.
In the event that such rate is not available at such time for any reason, then
the LIBO Rate with respect to such Eurodollar Borrowing for such Interest
Period shall be the rate at which U.S. Dollar deposits of U.S. $5,000,000 and
for a maturity comparable to such Interest Period are offered by the principal
London office of the Administrative Agent in immediately available funds in the
London interbank market at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period.
Credit Agreement
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"Licenses" means each license, concession, permit, consent,
authorization, registration or approval at any time necessary to enable the
Borrower to comply with any of its obligations under this Agreement and each
license described in Schedule II.
"Lien" means, with respect to any asset, (a) any mortgage,
deed of trust, lien, pledge, hypothecation, encumbrance, charge or security
interest in, on or of such asset, (b) the interest of a vendor or a lessor
under any conditional sale agreement, capital lease or title retention
agreement (or any financing lease having substantially the same economic effect
as any of the foregoing) relating to such asset and (c) in the case of
securities, any purchase option, call or similar right of a third party with
respect to such securities.
"Loan Documents" means, collectively, this Agreement, the
Letter of Credit Documents, the Security Documents and the Capital Subscription
Agreement.
"Loans" means the loans made by the Lenders to the Borrower
pursuant to this Agreement.
"Margin Stock" means "margin stock" within the meaning of
Regulations G, T, U and X of the Board.
"Material Adverse Effect" means any event, development or
circumstance that has had, or could reasonably be expected to have, a material
adverse effect on (a) the business, assets, property, condition, financial or
otherwise, or prospects of the Borrower and its Subsidiaries taken as a whole,
(b) the ability of the Borrower to perform any of its obligations under this
Agreement or any of the other Loan Documents to which it is a party, (c) the
validity or enforceability of any of the Loan Documents or the rights and
remedies of the Administrative Agent and the Lenders thereunder or (d) the
economic, political or regulatory environment in Argentina affecting the
business, operations, properties or prospects of the Borrower and its
subsidiaries.
"Maturity Date" means that Quarterly Date falling on or
nearest to March 31, 2003.
"Moody's" means Moody's Investors Service, Inc.
"Mortgages" means, collectively, each mortgage or other
similar instrument from time to time executed by any of the Obligors in favor
of the Administrative Agent and the Lenders (or in favor of Chase
individually), as provided in Section 6.11, covering the real property
identified in the Real Property Certificate, or any other real property
acquired by the
Credit Agreement
<PAGE> 20
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Obligors after the date hereof as shall be required to be subjected to a Lien
in favor of the Administrative Agent pursuant to Section 6.11(a).
"Net Cash Payments" means, with respect to any Disposition,
the aggregate amount of all cash payments received by the Borrower or the
Subsidiaries directly or indirectly in connection with such Disposition,
whether at the time of such Disposition or after such Disposition under
deferred payment arrangements or Investments entered into or received in
connection with such Disposition (including Disposition Investments); provided
that
(a) Net Cash Payments shall be net of (i) the amount of any
legal, title and recording tax expenses, commissions and other fees
and expenses payable by the Borrower or any of its Subsidiaries in
connection with such Disposition and (ii) any Federal, state and local
income or other taxes estimated to be payable by the Borrower or any
of its Subsidiaries as a result of such Disposition, but only to the
extent that on the date of such Disposition the Borrower delivers a
certificate of a Financial Officer setting forth a calculation of the
amount of such estimated taxes and delivers an amount of such Net Cash
Payments equal to such estimated taxes to the Administrative Agent
until such payment of taxes is in fact made, it being understood that
to the extent the amount so deposited is not applied to such payment
of taxes by March 15 of the year immediately following the fiscal year
in which such Disposition shall have occurred, the remaining balance
shall be treated as "Net Cash Payments" for purposes of this Agreement
and shall be applied in accordance with the provisions of Section
2.09(b)(iii) (and, in the event the Borrower shall elect, pursuant to
Section 2.09(b)(iii) to reinvest such remaining balance into
replacement assets, the twelve-month period provided for in Section
2.09(b)(iii) shall be measured from such March 15), and
(b) Net Cash Payments shall be net of any repayments by the
Borrower or any of its Subsidiaries of Indebtedness to the extent that
(i) such Indebtedness is secured by a Lien on the property that is the
subject of such Disposition and the transferee of (or holder of a Lien
on) such property requires that such Indebtedness be repaid as a
condition to the purchase of such property or (ii) such Indebtedness
requires that it be repaid as a condition to such Disposition.
"Non-Material Subsidiary" means, as at any date, any
Subsidiary of the Borrower that, individually and together with all other
Non-Material Subsidiaries, has consolidated assets with a book value of less
than 5% of the book value of the total consolidated assets of the Borrower and
all of its Subsidiaries (determined on the date of the most recent balance
sheet required to have been provided to the Lenders pursuant to Section 6.01).
Credit Agreement
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"Obligor" means the Borrower and each Subsidiary Guarantor.
"Other Taxes" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, sales or value added
taxes or charges or similar levies arising from any payment made under any Loan
Document or from the execution, delivery or enforcement of, or otherwise with
respect to, any Loan Document.
"Paging Business" means the business consisting of owning and
utilizing one or more paging licenses and the assets, receivables and payables
associated therewith.
"Parent" means Nextel International (Argentina), Ltd., a
Cayman Islands company.
"Parent Pledge Agreements" means, collectively, (a) a Pledge
Agreement (Prenda de Cuotas) substantially in the form of Exhibit C-1 between
the Parent, Nextel International (Holdings) Ltd. and the Administrative Agent
and (b) such other pledge agreements as shall from time to time be executed and
delivered by the Parent or any other holder of quotas of capital of the
Borrower pursuant to Section 6.11(a).
"Parent Shareholder" means Nextel International, Inc., a
Washington corporation.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or
are being contested in compliance with Section 6.04;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the
ordinary course of business and securing obligations that are not
overdue by more than 30 days or are being contested in compliance with
Section 6.04;
(c) pledges and deposits made in the ordinary course of
business in compliance with workers' compensation, unemployment
insurance and other social security laws or regulations;
(d) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature, in each case
in the ordinary course of business;
Credit Agreement
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(e) judgment liens in respect of judgments that do not
constitute an Event of Default under clause (k) of Article VIII; and
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the
ordinary course of business that do not secure any monetary
obligations and do not materially detract from the value of the
affected property or interfere with the ordinary conduct of business
of the Borrower or any Subsidiary;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of
and interest on which are unconditionally guaranteed by, the United
States of America (or by any agency thereof to the extent such
obligations are backed by the full faith and credit of the United
States of America), in each case maturing within one year from the
date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days
from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from S&P or from
Moody's;
(c) investments in certificates of deposit, banker's
acceptances and time deposits maturing within 180 days from the date
of acquisition thereof issued or guaranteed by or placed with, and
money market deposit accounts issued or offered by, any domestic
office of any commercial bank organized under the laws of the United
States of America or any State thereof which has a combined capital
and surplus and undivided profits of not less than U.S. $250,000,000;
(d) fully collateralized repurchase agreements with a term of
not more than 30 days for securities described in clause (a) of this
definition and entered into with a financial institution satisfying
the criteria described in clause (c) of this definition;
(e) obligations maturing or capable of redemption by the
holder not more than 12 months after the date of acquisition and
issued or guaranteed by (i) any entity which has one of the two
highest ratings for short- term obligations from a credit rating
agency of international standing or (ii) Argentina;
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(f) demand deposits, time deposits, certificates of deposit
or other obligations (including acceptances) maturing or capable of
redemption by the holder not more than 12 months after the date of
acquisition which are issued, accepted or guaranteed by an Argentine
banking institution having capital funds and reserves of not less than
U.S. $250,000,000 and deposits in which are classified in the highest
investment category granted by a rating agency of international
standing, provided that, deposits in or investments with any one such
bank shall not at one time exceed U.S. $5,000,000 and with all such
banks shall not at one time exceed U.S. $20,000,000; and
(g) money market funds that are classified in the highest
investment category granted by a rating agency of international
standing and are managed or administered by an Argentine banking
institution having capital funds and reserves of not less than U.S.
$250,000,000 (or that is a Subsidiary of a Lender).
"Person" means any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity.
"Prime Rate" means the rate of interest per annum publicly
announced from time to time by The Chase Manhattan Bank as its prime rate in
effect at its principal office in New York City; each change in the Prime Rate
shall be effective from and including the date such change is publicly
announced as being effective.
"Principal Payment Dates" means the Quarterly Dates falling on
or nearest to March, June, September and December of each year, commencing with
September 30, 2000 through and including March 31, 2003.
"Process Agent" has the meaning assigned to such term in
Section 10.10(b).
"Process Agent Acceptance" means a letter from the Process
Agent to the Administrative Agent, substantially in the form of Exhibit J.
"Quarterly Dates" means the last Business Day of March, June,
September, December in each year, the first of which shall be the first such
day after the date hereof.
"Readjustment Date" has the meaning assigned to such term in
Section 2.02(e)(iii).
"Real Property Certificate" has the meaning assigned to such
term in Section 5.01(u).
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"Register" has the meaning set forth in Section 10.04.
"Related Parties" means, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees,
agents, advisors and managers of such Person and such Person's Affiliates.
"Relevant Party" means the Borrower, the Parent, the Parent
Shareholder or any of their Subsidiaries.
"Required Lenders" means, at any time, Lenders having Tranche
A1 Loans, Tranche A2 Exposures, Tranche B1 Loans, Tranche B2 Exposures,
Incremental Facility Loans and unused Commitments representing more than 50% of
the sum of the total outstanding Tranche A1 Loans, Tranche A2 Exposures,
outstanding Tranche B1 Loans, Tranche B2 Exposures, Incremental Facility Loans
and unused Commitments at such time. The "Required Lenders" of a particular
Class of Loans means Lenders having Tranche A1 Loans, Tranche A2 Exposures,
Tranche B1 Loans, Tranche B2 Exposures, Incremental Facility Loans and unused
Commitments, as applicable, of such Class representing more than 50% of the sum
of the total Tranche A1 Loans, Tranche A2 Exposures, Tranche B1 Loans, Tranche
B2 Exposures, Incremental Facility Loans and unused Commitments, as applicable,
at such time.
"Restricted Payment" means any dividend or other distribution
(whether in cash, securities or other property) with respect to any shares of
any class or quotas of capital of the Borrower or any of its Subsidiaries, or
any payment (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any such quotas of
capital of the Borrower or any option, warrant or other right to acquire any
such quotas of capital of the Borrower.
"S&P" means Standard & Poor's Ratings Group.
"Security Agreements" means, collectively, (a) the
assignments, security agreements and similar instruments executed and delivered
on the Closing Date pursuant to Section 5.01(h) covering personal property of
the Obligors and (b) such additional assignments, security agreements and
similar instruments from time to time executed by any of the Obligors pursuant
to Section 6.11(b).
"Security Documents" means, collectively, the Parent Pledge
Agreement, the Undertaking and Security Agreement, the Cayman Islands Pledge
Agreement, the Security Agreements, the Mortgages, the Consent and Agreement
and all instruments required hereby or thereby to be filed with respect to the
Liens created pursuant thereto.
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"Series" has the meaning set forth in Section 2.01(c).
"Statutory Reserve Rate" means a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board to which the Administrative Agent is
subject (a) with respect to the Base CD Rate, for new negotiable nonpersonal
time deposits in U.S. Dollars of over U.S. $100,000 with maturities
approximately equal to three months and (b) with respect to the Adjusted LIBO
Rate, for eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of the Board). Such reserve percentages shall
include those imposed pursuant to such Regulation D. Eurodollar Loans shall be
deemed to constitute eurocurrency funding and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Lender under such Regulation D
or any comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"Subscribers" means, as at any date, the number of digital
handsets (including car phones) in use by customers of the Borrower and its
Subsidiaries subscribing to, and paying for, SRCE service (Servicio
Radioelectrico de Concentracion de Enlaces) provided by the Borrower or any of
its Subsidiaries, so long as such customers have been subscribing to such
service for a period of not less than 30 days as of such date (but excluding
any such customer to the extent the accounts receivable generated by operation
of such unit are more than 90 days past due as of such date).
"Subsidiary" means, with respect to any Person (the "parent")
at any date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership,
association or other entity (a) of which securities or other ownership
interests representing more than 50% of the equity or more than 50% of the
ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, controlled or held,
or (b) that is, as of such date, otherwise Controlled, by the parent or one or
more subsidiaries of the parent or by the parent and one or more subsidiaries
of the parent. Unless otherwise specified, "Subsidiary" means a subsidiary of
the Borrower.
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"Subsidiary Guarantor" means each Subsidiary of the Borrower
that becomes a "Subsidiary Guarantor" after the date hereof pursuant to Section
6.09(a).
"Taxes" means any and all present or future taxes, levies,
imposts, duties, deductions, charges, value added taxes or withholdings imposed
by any Governmental Authority.
"Term Commitment" means, collectively, the Tranche A1
Commitments, Tranche A2 Commitments, Tranche B1 Commitments and Tranche B2
Commitments.
"Term Loans" means, collectively, the Tranche A1 Loans,
Tranche A2 Loans, Tranche B1 Loans and Tranche B2 Loans.
"Three-Month Secondary CD Rate" means, for any day, the
secondary market rate for three-month certificates of deposit reported as being
in effect on such day (or, if such day is not a Business Day, the next
preceding Business Day) by the Board through the public information telephone
line of the Federal Reserve Bank of New York (which rate will, under the
current practices of the Board, be published in Federal Reserve Statistical
Release H.15(519) during the week following such day) or, if such rate is not
so reported on such day or such next preceding Business Day, the average of the
secondary market quotations for three-month certificates of deposit of major
money center banks in New York City received at approximately 10:00 a.m., New
York City time, on such day (or, if such day is not a Business Day, on the next
preceding Business Day) by the Administrative Agent from three negotiable
certificate of deposit dealers of recognized standing selected by it.
"Tranche A1 Commitment" means, with respect to each Lender,
the commitment, if any, of such Lender to make a Tranche A1 Loan hereunder,
expressed as an amount representing the maximum principal amount of the Tranche
A1 Loan to be made by such Lender hereunder, as such commitment may be (a)
reduced from time to time pursuant to Section 2.02(e), 2.07 or 2.09(b) and (b)
reduced or increased from time to time pursuant to assignments by or to such
Lender pursuant to Section 10.04. The initial amount of each Lender's Tranche
A1 Commitment is set forth on Schedule I, or in the Assignment and Acceptance
pursuant to which such Lender shall have assumed its Term Commitment, as
applicable. The original aggregate principal amount of the Tranche A1
Commitments is U.S. $15,000,000.
"Tranche A1 Lender" means a Lender with a Tranche A1
Commitment or, if the Tranche A1 Commitments have terminated or expired, an
outstanding Tranche A1 Loan.
"Tranche A1 Loan" means the Loans made pursuant to Section
2.01(a) which may be ABR Loans and/or Eurodollar Loans.
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"Tranche A2 Commitment" means, with respect to each Lender,
the commitment, if any, of such Lender to make one or more Tranche A2 Loans and
to acquire participations in Letters of Credit hereunder during the
Availability Period, expressed as an amount representing the maximum aggregate
principal amount of the Tranche A2 Loans and Tranche A2 LC Exposures, as the
case may be, to be made by such Lender hereunder, as such commitment may be (a)
reduced from time to time pursuant to Section 2.07 or 2.09(b), (b) increased
pursuant to Section 2.02(e) and (c) reduced or increased from time to time
pursuant to assignments by or to such Lender pursuant to Section 10.04. The
initial amount of each Lender's Tranche A2 Commitment is set forth on Schedule
I, or in the Assignment and Acceptance pursuant to which such Lender shall have
assumed its Term Commitment, as applicable. The original aggregate principal
amount of the Tranche A2 Commitments is U.S. $26,500,000.
"Tranche A2 Exposure" means, with respect to any Lender at any
time, the sum of the outstanding principal amount of such Lender's Tranche A2
Loans and its Tranche A2 LC Exposure at such time.
"Tranche A2 LC Disbursement" means a payment made by the
Issuing Lender pursuant to a Tranche A2 Letter of Credit.
"Tranche A2 LC Exposure" means, at any time, the sum of (a)
the aggregate undrawn amount of all outstanding Tranche A2 Letters of Credit at
such time plus (b) the aggregate amount of all Tranche A2 LC Disbursements that
have not yet been reimbursed by or on behalf of the Borrower at such time. The
Tranche A2 LC Exposure of any Lender at any time shall be its Applicable
Percentage of the total Tranche A2 LC Exposure at such time.
"Tranche A2 Lender" means a Lender with a Tranche A2
Commitment or, if the Tranche A2 Commitments have terminated or expired, a
Lender with Tranche A2 Exposure.
"Tranche A2 Letter of Credit" means any letter of credit
issued pursuant to this Agreement that, at the request of the Borrower, is to
constitute a "Tranche A2 Letter of Credit" hereunder.
"Tranche A2 Loan" means the Loans made pursuant to Section
2.01(b) which may be ABR Loans and/or Eurodollar Loans.
"Tranche B1 Commitment" means, with respect to each Lender,
the commitment, if any, of such Lender to make a Tranche B1 Loan hereunder,
expressed as an amount
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representing the maximum principal amount of the Tranche B1 Loan to be made by
such Lender hereunder, as such commitment may be (a) reduced from time to time
pursuant to Section 2.02(e), 2.07 or 2.09(b) and (b) reduced or increased from
time to time pursuant to assignments by or to such Lender pursuant to Section
10.04. The initial amount of each Lender's Tranche B1 Commitment is set forth
on Schedule I, or in the Assignment and Acceptance pursuant to which such
Lender shall have assumed its Term Commitment, as applicable. The original
aggregate principal amount of the Tranche B1 Commitments is U.S. $15,000,000.
"Tranche B1 Lender" means a Lender with a Tranche B1
Commitment or, if the Tranche B1 Commitments have terminated or expired, an
outstanding Tranche B1 Loan.
"Tranche B2 Commitment" means, with respect to each Lender,
the commitment, if any, of such Lender to make one or more Tranche B2 Loans and
to acquire participations in Letters of Credit hereunder during the
Availability Period, expressed as an amount representing the maximum aggregate
principal amount of the Tranche B2 Loans and Tranche B2 LC Exposures, as the
case may be, to be made by such Lender hereunder, as such commitment may be (a)
reduced from time to time pursuant to Section 2.07 or 2.09(b), (b) increased
pursuant to Section 2.02(e) and (c) reduced or increased from time to time
pursuant to assignments by or to such Lender pursuant to Section 10.04. The
initial amount of each Lender's Tranche B2 Commitment is set forth on Schedule
I, or in the Assignment and Acceptance pursuant to which such Lender shall have
assumed its Term Commitment, as applicable. The original aggregate principal
amount of the Tranche B2 Commitments is U.S. $26,500,000.
"Tranche B1 Loan" means the Loans made pursuant to Section
2.01(c) which may be ABR Loans and/or Eurodollar Loans.
"Tranche B2 Exposure" means, with respect to any Lender at any
time, the sum of the outstanding principal amount of such Lender's Tranche B2
Loans and its Tranche B2 LC Exposure at such time.
"Tranche B2 LC Disbursement" means a payment made by the
Issuing Lender pursuant to a Tranche B2 Letter of Credit.
"Tranche B2 LC Exposure" means, at any time, the sum of (a)
the aggregate undrawn amount of all outstanding Tranche B2 Letters of Credit at
such time plus (b) the aggregate amount of all Tranche B2 LC Disbursements that
have not yet been reimbursed by or on behalf of the Borrower at such time. The
Tranche B2 LC Exposure of any Lender at any time shall be its Applicable
Percentage of the total Tranche B2 LC Exposure at such time.
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"Tranche B2 Lender" means a Lender with a Tranche B2
Commitment or, if the Tranche B2 Commitments have terminated or expired, a
Lender with Tranche B2 Exposure.
"Tranche B2 Letter of Credit" means any letter of credit
issued pursuant to this Agreement that, at the request of the Borrower, is to
constitute a "Tranche B2 Letter of Credit" hereunder.
"Tranche B2 Loan" means the Loans made pursuant to Section
2.01(d) which may be ABR Loans and/or Eurodollar Loans.
"Transactions" means the execution, delivery and performance
by the Borrower of this Agreement and the other Loan Documents, the borrowing
of Loans, the use of the proceeds thereof and the issuance of Letters of Credit
hereunder.
"Type", when used in reference to any Loan or Borrowing,
refers to whether the rate of interest on such Loan, or on the Loans comprising
such Borrowing, is determined by reference to the Adjusted LIBO Rate or the
Alternate Base Rate.
"Undertaking and Security Agreement" means an Undertaking and
Security Agreement substantially in the form of Exhibit C-2 between the Parent,
the Borrower and the Administrative Agent.
"U.S. Dollars" or "U.S. $" refers to lawful money of the
United States of America.
"Vendor Contract" means, collectively, the Integrated Dispatch
Enhanced Network ("iDEN") Equipment Purchase Agreement and the Integrated
Dispatch Enhanced Network ("iDEN") Installation and Optimization Agreement,
each executed as of May 26, 1997 between Motorola, Inc., a Delaware
corporation, by and through its iDEN Infrastructure Group and the Borrower, and
including in each case any replacements thereof.
"Working Capital" means, as at any date, (a) the aggregate
amount of inventory, accounts receivable and prepaid expenses of the Borrower
and its Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP) minus (b) current accrued expenses and accounts payable
of the Borrower and its Subsidiaries (determined on a consolidated basis
without duplication in accordance with GAAP).
SECTION 1.02. Classification of Loans and Borrowings. For
purposes of this Agreement, Loans may be classified and referred to by Class
(e.g., a "Tranche A1 Loan") or by
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Type (e.g., a "Eurodollar Loan") or by Class and Type (e.g., a "Eurodollar
Tranche A1 Loan"); each Series of Incremental Facility Loans shall be deemed a
separate Class of Loans hereunder. Borrowings also may be classified and
referred to by Class (e.g., a "Tranche A1 Borrowing") or by Type (e.g., a
"Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar Tranche A1
Borrowing"); each Series of Incremental Facility Borrowings and Incremental
Facility Commitments shall be deemed a separate Borrowing and Commitment
hereunder.
SECTION 1.03. Terms Generally. The definitions of terms
herein shall apply equally to the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase
"without limitation". The word "will" shall be construed to have the same
meaning and effect as the word "shall". Unless the context requires otherwise
(a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument
or other document as from time to time amended, supplemented or otherwise
modified (subject to any restrictions on such amendments, supplements or
modifications set forth herein), (b) any reference herein to any Person shall
be construed to include such Person's successors and assigns, (c) the words
"herein", "hereof" and "hereunder", and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (d) all references herein to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, this Agreement and (e) the words "asset" and "property" shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have
been withdrawn or such provision amended in accordance herewith.
Credit Agreement
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ARTICLE II
THE CREDITS
SECTION 2.01. The Commitments.
(a) Tranche A1 Loans. Subject to the terms and conditions
set forth herein, each Tranche A1 Lender agrees to make up to three term loans
to the Borrower during the period commencing on the Closing Date and ending on
the date 60 days thereafter in an aggregate principal amount that will not
result in (i) the outstanding principal amount of such Lender's Tranche A1
Loans exceeding such Lender's Tranche A1 Commitment or (ii) the total
outstanding principal amount of Tranche A1 Loans exceeding the total Tranche A1
Commitments. Amounts prepaid in respect of Tranche A1 Loans may not be
reborrowed.
(b) Tranche A2 Loans. Subject to the terms and conditions
set forth herein, each Tranche A2 Lender agrees to make one or more term loans
to the Borrower during the Availability Period in an aggregate principal amount
that will not result in (i) such Lender's Tranche A2 Exposure exceeding such
Lender's Tranche A2 Commitment or (ii) the total Tranche A2 Exposures exceeding
the total Tranche A2 Commitments. Amounts repaid in respect of Tranche A2
Loans may not be reborrowed.
(c) Tranche B1 Loans. Subject to the terms and conditions
set forth herein, each Tranche B1 Lender agrees to make up to three term loans
to the Borrower during the period commencing on the Closing Date and ending on
the date 60 days thereafter in a principal amount that will not result in (i)
the outstanding principal amount of such lender's Tranche B1 Loans exceeding
such Lender's Tranche B1 Commitment or (ii) the total outstanding principal
amount of Tranche B1 Loans exceeding the total Tranche B1 Commitments. Amounts
repair in respect of Tranche B1 Loans may not be reborrowed.
(d) Tranche B2 Loans. Subject to the terms and conditions
set forth herein, each Tranche B2 Lender agrees to make one or more term loans
to the Borrower during the Availability Period in an aggregate principal amount
that will not result in (i) such Lender's Tranche B2 Exposure exceeding such
Lender's Tranche B2 Commitment or (ii) the total Tranche B2 Exposures exceeding
the total Tranche B2 Commitments. Amounts repaid in respect of Tranche B2
Loans may not be reborrowed.
(e) Incremental Facility Loans. In addition to Borrowings of
Term Loans, at any time and from time to time during the Availability Period
the Borrower may request that the
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Lenders offer to enter into commitments to make additional term loans to the
Borrower hereunder provided such loans are matched, on a one-to-one basis, with
additional capital invested by the Parent Shareholder in the Parent, and by the
Parent in the Borrower, in excess of the amount by which the Parent Shareholder
and the Parent have agreed, as at such date, to capitalize the Parent and the
Borrower, respectively, pursuant to the Capital Subscription Agreement. Each
such commitment of any Lender shall not be less than U.S. $5,000,000 and not
greater than U.S. $50,000,000. In the event that one or more of the Lenders
offer, in their sole discretion, to enter into such commitments, and such
Lenders and the Borrower agree as to the amount of such commitments that shall
be allocated to the respective Lenders making such offers, and the fees (if
any) to be payable by the Borrower in connection therewith, such Lenders shall
become obligated to make Incremental Facility Loans under this Agreement in an
amount equal to the amount of their Incremental Facility Commitments.
The Incremental Facility Loans to be made pursuant to any such
agreement between the Borrower and one or more Lenders in response to any
request by the Borrower shall be deemed to be a separate "Series" of
Incremental Facility Loans for all purposes of this Agreement. Anything herein
to the contrary notwithstanding, (i) the minimum aggregate principal amount of
Incremental Facility Commitments entered into pursuant to any such request
shall be U.S. $10,000,000 and (ii) the aggregate principal amount of all
Commitments and Borrowings of Incremental Facility Loans shall not exceed U.S.
$50,000,000.
Following agreement by the Borrower and one or more of the
Lenders as provided above, subject to the terms and conditions set forth
herein, each Incremental Facility Lender of any Series agrees to make
Incremental Facility Loans of such Series to the Borrower from time to time, in
an aggregate principal amount up to but not exceeding the amount of the
Incremental Facility Commitment of such Series of such Incremental Facility
Lender. Amounts repaid in respect of Incremental Facility Loans may not be
reborrowed.
(f) Aggregate Borrowings. Notwithstanding the foregoing,
(i) until execution by the Borrower of the Interconnection
Agreement, no Borrowing may be made to the extent that such Borrowing,
together with all then-outstanding Loans, shall exceed an aggregate
amount of U.S. $35,000,000,
(ii) from and after execution of the Interconnection
Agreement until the later of (A) the date of completion of the
interconnection contemplated by the Interconnection Agreement and (B)
the date upon which the Administrative Agent shall have received
evidence satisfactory to it of the creation of a valid, perfected and
enforceable first priority Lien in favor of the Administrative
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Agent for the benefit of the Administrative Agent and the Lenders in
all of the right, title and interest of the Borrower in, to and under
the Interconnection Agreement as collateral security for the payment
of the principal of and interest on the Loans, and all other amounts
payable, hereunder, together with a favorable legal opinion of
Argentine counsel to the Borrower in form and substance satisfactory
to the Administrative Agent, no Borrowing may be made to the extent
that such Borrowing, together with all then-outstanding Loans shall
exceed an aggregate amount of U.S. $45,000,000, and
(iii) no Tranche A2 Borrowing or Tranche B2 Borrowing may be
made until the Tranche A1 Commitments and Tranche B1 Commitments have
been used in full or terminated.
SECTION 2.02. Loans and Borrowings.
(a) Obligation of Lenders. Each Loan shall be made as part
of a Borrowing consisting of Loans of the same Class and Type made by the
Lenders ratably in accordance with their respective Commitments of the
applicable Class. The failure of any Lender to make any Loan required to be
made by it shall not relieve any other Lender of its obligations hereunder;
provided that the Commitments of the Lenders are several and no Lender shall be
responsible for any other Lender's failure to make Loans as required.
(b) Type of Loans. Subject to Section 2.12, each Borrowing
shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower
may request in accordance herewith. Each Lender at its option may make any
Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such
Lender to make such Loan; provided that any exercise of such option shall not
affect the obligation of the Borrower to repay such Loan in accordance with the
terms of this Agreement.
(c) Minimum Amounts. At the commencement of each Interest
Period for any Eurodollar Borrowing, such Borrowing shall be in an aggregate
amount of U.S. $5,000,000 or a larger multiple of U.S. $1,000,000. At the time
that each ABR Borrowing is made, such Borrowing shall be in an aggregate amount
equal to U.S. $1,000,000 or a larger multiple of U.S. $500,000; provided that
an ABR Borrowing of either Class may be in an aggregate amount that is equal to
the entire unused balance of the total Commitments of the such Class.
Borrowings of more than one Type and Class may be outstanding at the same time;
provided that there shall not at any time be more than a total of ten
Eurodollar Borrowings outstanding.
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Anything herein to the contrary notwithstanding, the aggregate
amount of the initial Borrowing hereunder (which shall in any event occur on
the Closing Date) shall be at least U.S. $16,000,000.
(d) Conversion or Continuation of Eurodollar Loans. The
Borrower shall be entitled to request, or to elect to convert to or continue as
a Eurodollar Borrowing, any Eurodollar Borrowing, provided that the Borrower
shall not be entitled to request, or to elect to convert to or continue as a
Eurodollar Borrowing: (i) any Borrowing of any Class if the Interest Period
requested with respect thereto would end after the Maturity Date; or (ii) any
Loan of any Class if the Interest Period therefor would commence before and end
after any Principal Payment Date unless, after giving effect thereto, the
aggregate principal amount of the Loans of such Class having Interest Periods
that end after such Principal Payment Date shall be equal to or less than the
aggregate principal amount of the Loans of such Class permitted to be
outstanding after giving effect to the payments of principal required to be
made on such Principal Payment Date.
(e) Reallocation and Increase of Term Commitments.
(i) Reallocation of Tranche A1 or B1 Commitments. At any
time and from time to time on or before the date 60 days after the Closing
Date, the Borrower may, by irrevocable notice to the Administrative Agent
(which shall promptly notify the Lenders), elect to reallocate all or any
portion of the Tranche A1 Commitments and Tranche B1 Commitments to the Tranche
A2 Commitments and Tranche B2 Commitments, respectively, to the extent such
Tranche A1 Commitments and Tranche B1 Commitments have not been used on or
prior to the proposed reallocation date contemplated in such notice; provided
that (A) each such notice shall specify a reallocation date (which shall be a
Business Day) on or prior to the date 60 days after the Closing Date and each
such notice shall be given at least three Business Days before the relevant
reallocation date, (B) each such reallocation of Tranche A1 Commitments and
Tranche B1 Commitments shall be made only to the Tranche A2 Commitments and
Tranche B2 Commitments, respectively, of the respective Lenders holding Tranche
A1 Commitments or Tranche B1 Commitments (as the case may be) immediately prior
to such reallocation on such reallocation date and (C) each such reallocation
(determined as to all Lenders so affected) shall be in a minimum aggregate
amount of U.S. $5,000,000 or a larger multiple of U.S. $1,000,000. On such
reallocation date, each Lender's Tranche A2 Commitment and Tranche B2
Commitment shall automatically be increased by the amount (if any) of Tranche
A1 Commitment and Tranche B1 Commitment, respectively, held by it on such
reallocation date and reallocated in accordance with such notice.
(ii) Reallocation of Tranche A2 or B2 Commitments. At any
time and from time to time on or before the Commitment Termination Date the
Borrower may, by irrevocable notice
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to the Administrative Agent (which shall promptly notify the Lenders), elect to
reallocate a portion of the unused Tranche A2 Commitments to the Tranche B2
Commitments (including any amounts reallocated to Tranche A2 Commitments and
Tranche B2 Commitments pursuant to clause (i) above) and vice versa, so long as
(A) the aggregate amount of all of the Term Commitments shall not in any case
exceed U.S. $83,000,000 and (B) any such reallocations shall be in an aggregate
amount of U.S. $5,000,000 or a larger multiple of U.S. $1,000,000. Each such
notice from the Borrower shall specify the effective date of the relevant
reallocation (which shall be a Business Day at least five Business Days after
receipt of such notice) and upon any such effective date, each Lender's Tranche
A2 Commitment and Tranche B2 Commitment shall automatically be increased or
decreased as necessary so that each Lender holds a pro rata share of the
Tranche A2 Commitments and the Tranche B2 Commitments as reallocated in
accordance with such notice.
(iii) Increase of Tranche A2 or Tranche B2 Commitments. If
on the date (the "Readjustment Date") that is 90 days after the date hereof
(or, such earlier date as shall be set forth in a notice by the Borrower to the
Administrative Agent in writing), any one or more financial institutions shall
agree to provide additional Tranche A2 Commitments and/or Tranche B2
Commitments hereunder, which additional Tranche A2 Commitments and Tranche B2
Commitments shall in no event exceed U.S. $17,000,000 in the aggregate, then:
(A) by signing an amendment to this Agreement
between such financial institutions and the Administrative
Agent setting forth in an amended Schedule I hereto the
Tranche A2 Commitments and the Tranche B2 Commitments of all
the Lenders hereunder after giving effect to the additional
Commitments of such financial institutions, and providing for
each such financial institution to become a party hereto as a
"Lender" hereunder, each such financial institution shall
automatically and without any further action be deemed to have
become a "Lender" under this Agreement;
(B) the Commitments of each Lender (including any
new Lender as provided above) shall be as set forth in said
amended Schedule I;
(C) on the Readjustment Date, the Borrower shall
borrow such Loans as shall be necessary, and the Lenders
(including any such new Lender) shall make such Loans and such
other adjustments among themselves as shall be necessary, so
that the Loans of the Lenders of each Class are held hereunder
ratably in accordance with the Commitments of the Lenders of
such Class (and for purposes hereof, such Loans shall, to the
extent necessary, be made without regard to the provisions of
Section 2.16(c) hereof);
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(D) on the Readjustment Date, the Borrower shall pay
any "break funding" costs payable under Section 2.14 in
connection with any adjustments contemplated by clause (C)
above; and
(E) the Borrower shall, at its expense, make such
filings and take such actions as necessary (or as requested by
the Administrative Agent) to amend the Security Documents and
any filings made in connection therewith so that after giving
effect thereto all the Lenders shall be ratably secured
thereunder, except any Security Documents or related filings
made in connection with real or tangible personal property
located in Argentina but outside of the Federal Capital.
SECTION 2.03. Requests for Borrowings. To request a
Borrowing, the Borrower shall notify the Administrative Agent of such request
by telephone (a) in the case of a Eurodollar Borrowing, not later than 11:00
a.m., New York City time, three Business Days before the date of the proposed
Borrowing or (b) in the case of an ABR Borrowing, not later than 11:00 a.m.,
New York City time, one Business Day before the date of the proposed Borrowing.
Each such telephonic borrowing request shall be irrevocable and shall be
confirmed promptly by hand delivery or telecopy to the Administrative Agent of
a written Borrowing Request. Each such telephonic and written Borrowing
Request shall specify the following information in compliance with Section
2.02:
(i) whether the requested Borrowing is to be a Tranche A1
Borrowing, a Tranche A2 Borrowing, Tranche B1 Borrowing, a Tranche B2
Borrowing or an Incremental Facility Borrowing (including, if
applicable, the respective Series of Incremental Facility Loans to
which such Borrowing relates);
(ii) the aggregate amount of the requested Borrowing;
(iii) the date of such Borrowing, which shall be a Business
Day;
(iv) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
(v) in the case of a Eurodollar Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period
contemplated by the definition of the term "Interest Period"; and
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(vi) the location and number of the Borrower's account to
which funds are to be disbursed, which shall comply with the
requirements of Section 2.05.
If no election as to the Type of Borrowing is specified or if no Interest
Period is specified with respect to any requested Eurodollar Borrowing, then
the Borrower shall be deemed to have selected a Eurodollar Borrowing with an
Interest Period of one month's duration. Promptly following receipt of a
Borrowing Request in accordance with this Section, the Administrative Agent
shall advise each Lender of the details thereof and of the amount of such
Lender's Loan to be made as part of the requested Borrowing.
SECTION 2.04. Letters of Credit.
(a) General. Subject to the terms and conditions set forth
herein, in addition to the Tranche A2 and Tranche B2 Loans provided for in
Section 2.01, the Borrower may request the Issuing Lender to issue, at any time
and from time to time during the Availability Period, Tranche A2 or Tranche B2
Letters of Credit for its own account in such form as is acceptable to the
Issuing Lender in its reasonable determination. Tranche A2 Letters of Credit
issued hereunder shall constitute utilization of the Tranche A2 Commitments and
Tranche B2 Letters of Credit issued hereunder shall constitute utilization of
the Tranche B2 Commitments.
(b) Notice of Issuance, Amendment, Renewal or Extension. To
request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), the Borrower shall hand deliver
or telecopy (or transmit by electronic communication, if arrangements for doing
so have been approved by the Issuing Lender) to the Issuing Lender and the
Administrative Agent (reasonably in advance of the requested date of issuance,
amendment, renewal or extension) a notice requesting the issuance of a Letter
of Credit, or identifying the Letter of Credit to be amended, renewed or
extended, and specifying the Class of Letter of Credit to be issued, the date
of issuance, amendment, renewal or extension (which shall be a Business Day),
the date on which such Letter of Credit is to expire (which shall comply with
paragraph (d) of this Section), the amount of such Letter of Credit, the name
and address of the beneficiary thereof and such other information as shall be
necessary to prepare, amend, renew or extend such Letter of Credit. If
requested by the Issuing Lender, the Borrower also shall submit a letter of
credit application on the Issuing Lender's standard form in connection with any
request for a Letter of Credit. In the event of any inconsistency between the
terms and conditions of this Agreement and the terms and conditions of any form
of letter of credit application or other agreement submitted by the Borrower
to, or entered into by the Borrower with, the Issuing Lender relating to any
Letter of Credit, the terms and conditions of this Agreement shall control.
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(c) Limitations on Amounts. A Letter of Credit shall be
issued, amended, renewed or extended only if (and upon issuance, amendment,
renewal or extension of each Letter of Credit the Borrower shall be deemed to
represent and warrant that), after giving effect to such issuance, amendment,
renewal or extension (i) the aggregate LC Exposure of all the Lenders
(determined for these purposes without giving effect to the participations
therein of the Lenders pursuant to paragraph (e) of this Section) shall not
exceed U.S. $30,000,000, (ii) the sum of the aggregate Tranche A2 LC Exposure
of all the Tranche A2 Lenders and the Tranche A2 Loans shall not exceed the
aggregate amount of the Tranche A2 Commitments and (iii) the sum of the
aggregate Tranche B2 LC Exposure of all the Tranche B2 Lenders and the Tranche
B2 Loans shall not exceed the aggregate amount of the Tranche B2 Commitments.
(d) Expiration Date. Each Letter of Credit shall expire at
or prior to the close of business on the earlier of (i) the date twelve months
after the date of the issuance of such Letter of Credit (or, in the case of any
renewal or extension thereof, twelve months after the then-current expiration
date of such Letter of Credit, so long as such renewal or extension occurs
within three months of such then-current expiration date) and (ii) the date
that is five Business Days prior to the Commitment Termination Date.
(e) Participations. By the issuance of a Letter of Credit
(or an amendment to a Letter of Credit increasing the amount thereof) of any
Class by the Issuing Lender, and without any further action on the part of the
Issuing Lender or the Lenders, the Issuing Lender hereby grants to each Lender
of the respective Class, and each such Lender hereby acquires from the Issuing
Lender, a participation in such Letter of Credit equal to such Lender's
Applicable Percentage of the aggregate amount available to be drawn under such
Letter of Credit. Each Lender acknowledges and agrees that its obligation to
acquire participations pursuant to this paragraph in respect of Letters of
Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made
without any offset, abatement, withholding or reduction whatsoever.
In consideration and in furtherance of the foregoing, each
Lender hereby absolutely and unconditionally agrees to pay to the
Administrative Agent, for the account of the Issuing Lender, such Lender's
Applicable Percentage of each LC Disbursement made by the Issuing Lender and
not reimbursed by the Borrower on the date due as provided in paragraph (e) of
this Section, or of any reimbursement payment required to be refunded to the
Borrower for any reason. Each such payment shall be made in the same manner as
provided in Section 2.05 with respect to Loans made by such Lender (and Section
2.05 shall apply, mutatis mutandis, to the payment obligations of the Lenders),
and the Administrative Agent shall promptly pay to the
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Issuing Lender the amounts so received by it from the Lenders. Promptly
following receipt by the Administrative Agent of any payment from the Borrower
pursuant to the next following paragraph, the Administrative Agent shall
distribute such payment to the Issuing Lender or, to the extent that the
Lenders have made payments pursuant to this paragraph to reimburse the Issuing
Lender, then to such Lenders and the Issuing Lender as their interests may
appear. Any payment made by a Lender pursuant to this paragraph to reimburse
the Issuing Lender for any LC Disbursement shall not constitute a Loan and
shall not relieve the Borrower of its obligation to reimburse such LC
Disbursement.
(f) Reimbursement. If the Issuing Lender shall make any LC
Disbursement in respect of a Letter of Credit, the Borrower shall reimburse the
Issuing Lender in respect of such LC Disbursement by paying to the
Administrative Agent an amount equal to such LC Disbursement not later than
12:00 noon, New York City time, on the Business Day immediately following the
day that the Borrower receives notice from the Administrative Agent of such LC
Disbursement.
If the Borrower fails to make such payment when due (or to
cause payment thereof to be made when due with the proceeds of a Borrowing
hereunder), the Administrative Agent shall notify each Tranche A2 Lender and
Tranche B2 Lender, as applicable, of the applicable LC Disbursement, the
payment then due from the Borrower in respect thereof and such Lender's
Applicable Percentage thereof.
(g) Obligations Absolute. The Borrower's obligation to
reimburse LC Disbursements as provided in paragraph (f) of this Section shall
be absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of
any Letter of Credit, or any term or provision therein, (ii) any draft or other
document presented under a Letter of Credit proving to be forged, fraudulent or
invalid in any respect or any statement therein being untrue or inaccurate in
any respect, (iii) payment by the Issuing Lender under a Letter of Credit
against presentation of a draft or other document that does not comply strictly
with the terms of such Letter of Credit, and (iv) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section, constitute a legal or equitable
discharge of the Borrower's obligations hereunder.
Neither the Administrative Agent, the Lenders nor the Issuing
Lender, nor any of their Related Parties, shall have any liability or
responsibility by reason of or in connection with the issuance or transfer of
any Letter of Credit by the Issuing Lender or any payment or failure to make
any payment thereunder (irrespective of any of the circumstances referred to in
the preceding sentence), or any error, omission, interruption, loss or delay in
transmission or
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delivery of any draft, notice or other communication under or relating to any
Letter of Credit (including any document required to make a drawing
thereunder), any error in interpretation of technical terms or any consequence
arising from causes beyond the control of the Issuing Lender; provided that the
foregoing shall not be construed to excuse the Issuing Lender from liability to
the Borrower to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by the Borrower to the
extent permitted by applicable law) suffered by the Borrower that are caused by
the Issuing Lender's gross negligence or willful misconduct when determining
whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof. The parties hereto expressly agree that:
(i) the Issuing Lender may accept documents that appear on
their face to be in substantial compliance with the terms of a Letter
of Credit without responsibility for further investigation, regardless
of any notice or information to the contrary, and may make payment
upon presentation of documents that appear on their face to be in
substantial compliance with the terms of such Letter of Credit;
(ii) the Issuing Lender shall have the right, in its sole
discretion, to decline to accept such documents, and to decline to
make such payment, if such documents are not in strict compliance with
the terms of such Letter of Credit; and
(iii) this sentence shall establish the standard of care to
be exercised by the Issuing Lender when determining whether drafts and
other documents presented under a Letter of Credit comply with the
terms thereof (and the parties hereto hereby waive, to the extent
permitted by applicable law, any standard of care inconsistent with
the foregoing).
(h) Disbursement Procedures. The Issuing Lender shall,
within a reasonable time following its receipt thereof, examine all documents
purporting to represent a demand for payment under a Letter of Credit. The
Issuing Lender shall promptly after such examination notify the Administrative
Agent and the Borrower by telephone (confirmed by telecopy) of such demand for
payment and whether the Issuing Lender has made or will make an LC Disbursement
thereunder; provided that any failure to give or delay in giving such notice
shall not relieve the Borrower of its obligation to reimburse the Issuing
Lender and the Lenders with respect to any such LC Disbursement.
(i) Interim Interest. If the Issuing Lender shall make any
LC Disbursement, then, unless the Borrower shall reimburse such LC Disbursement
in full on the date such LC Disbursement is made, the unpaid amount thereof
shall bear interest, for each day from and including the date such LC
Disbursement is made to but excluding the date that the Borrower
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reimburses such LC Disbursement, at the rate per annum then applicable to ABR
Loans; provided that, if the Borrower fails to reimburse such LC Disbursement
when due pursuant to paragraph (f) of this Section, then Section 2.11(c) shall
apply. Interest accrued pursuant to this paragraph shall be for the account of
the Issuing Lender, except that interest accrued on and after the date of
payment by any Lender pursuant to paragraph (f) of this Section to reimburse
the Issuing Lender shall be for the account of such Lender to the extent of
such payment.
(j) Replacement of the Issuing Lender. The Issuing Lender
may be replaced at any time by written agreement among the Borrower, the
Administrative Agent, the replaced Issuing Lender and the successor Issuing
Lender. The Administrative Agent shall notify the Lenders of any such
replacement of the Issuing Lender. At the time any such replacement shall
become effective, the Borrower shall pay all unpaid fees accrued for the
account of the replaced Issuing Lender pursuant to Section 2.10(b). From and
after the effective date of any such replacement, (i) the successor Issuing
Lender shall have all the rights and obligations of the replaced Issuing Lender
under this Agreement with respect to Letters of Credit to be issued thereafter
and (ii) references herein to the term "Issuing Lender" shall be deemed to
refer to such successor or to any previous Issuing Lender, or to such successor
and all previous Issuing Lenders, as the context shall require. After the
replacement of an Issuing Lender hereunder, the replaced Issuing Lender shall
remain a party hereto and shall continue to have all the rights and obligations
of an Issuing Lender under this Agreement with respect to Letters of Credit
issued by it prior to such replacement, but shall not be required to issue
additional Letters of Credit.
(k) Cash Collateralization. If either (i) an Event of
Default shall occur and be continuing and the Borrower receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Lenders with LC Exposure representing more than 50% of
the total LC Exposure) demanding the deposit of cash collateral pursuant to
this paragraph, or (ii) the Borrower shall be required to provide cover for LC
Exposure pursuant to Section 2.09(b), the Borrower shall immediately deposit in
an account with the Administrative Agent, in the name of the Administrative
Agent and for the benefit of the Lenders, in the case of an Event of Default,
an amount in cash equal to the LC Exposure as of such date plus any accrued and
unpaid interest thereon, and, in the case of cover pursuant to Section 2.09(b),
the amount required under Section 2.09(b); provided that the obligation to
deposit such cash collateral shall become effective immediately, and such
deposit shall become immediately due and payable, without demand or other
notice of any kind, upon the occurrence of any Event of Default with respect to
the Borrower described in clause (h) or (i) of Article VIII. Such deposit
shall be held by the Administrative Agent in a segregated collateral account as
collateral in the first instance for the LC Exposure under this Agreement and
thereafter for the payment of the other obligations of the Borrower hereunder,
and for these purposes the Borrower hereby grants a security interest to the
Administrative Agent for the
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benefit of the Lenders in such collateral account and in any financial assets
(as defined in the Uniform Commercial Code) or other property held therein.
SECTION 2.05. Funding of Borrowings.
(a) Funding by Lenders. Each Lender shall make each Loan to
be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 12:00 noon, New York City time, to the account
of the Administrative Agent most recently designated by it for such purpose by
notice to the Lenders. The Administrative Agent will make such Loans available
to the Borrower by promptly crediting the amounts so received, in like funds,
to an account of the Borrower maintained with the Administrative Agent in New
York City and designated by the Borrower in the applicable Borrowing Request.
(b) Presumption by Administrative Agent. Unless the
Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing that such Lender will not make available to the
Administrative Agent such Lender's share of such Borrowing, the Administrative
Agent may assume that such Lender has made such share available on such date in
accordance with paragraph (a) of this Section and may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. In such
event, if a Lender has not in fact made its share of the applicable Borrowing
available to the Administrative Agent, then the applicable Lender and the
Borrower severally agree to pay to the Administrative Agent forthwith on demand
such corresponding amount with interest thereon, for each day from and
including the date such amount is made available to the Borrower to but
excluding the date of payment to the Administrative Agent, at (i) in the case
of such Lender, the Federal Funds Effective Rate or (ii) in the case of the
Borrower, the interest rate applicable to ABR Loans. If such Lender pays such
amount to the Administrative Agent, then such amount shall constitute such
Lender's Loan included in such Borrowing.
SECTION 2.06. Interest Elections.
(a) Elections by Borrower. Each Borrowing initially shall be
of the Type specified in the applicable Borrowing Request and, in the case of a
Eurodollar Borrowing, shall have an initial Interest Period as specified in
such Borrowing Request. Thereafter, the Borrower may elect to convert such
Borrowing to a different Type or to continue such Borrowing and, in the case of
a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in
this Section. The Borrower may elect different options with respect to
different portions of the affected Borrowing, in which case each such portion
shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing.
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(b) Notice of Elections. To make an election pursuant to
this Section, the Borrower shall notify the Administrative Agent of such
election by telephone by the time that a Borrowing Request would be required
under Section 2.03 if the Borrower were requesting a Borrowing of the Type
resulting from such election to be made on the effective date of such election.
Each such telephonic Interest Election Request shall be irrevocable and shall
be confirmed promptly by hand delivery or telecopy to the Administrative Agent
of a written Interest Election Request in a form approved by the Administrative
Agent and signed by the Borrower.
(c) Information in Election Notices. Each telephonic and
written Interest Election Request shall specify the following information in
compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request
applies (including, if applicable, the respective Series of
Incremental Facility Loans to which such Interest Election Request
relates) and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to
each resulting Borrowing (in which case the information to be
specified pursuant to clauses (iii) and (iv) of this paragraph shall
be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing,
the Interest Period to be applicable thereto after giving effect to
such election, which shall be a period contemplated by the definition
of the term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Notice by Administrative Agent to Lenders. Promptly
following receipt of an Interest Election Request, the Administrative Agent
shall advise each Lender of the details thereof and of such Lender's portion of
each resulting Borrowing.
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(e) Presumption if no Notice. If the Borrower fails to
deliver a timely Interest Election Request with respect to a Eurodollar
Borrowing prior to the end of the Interest Period applicable thereto, then,
unless such Borrowing is repaid as provided herein, at the end of such Interest
Period such Borrowing shall be continued as a Eurodollar Borrowing with an
Interest Period of one month's duration. Notwithstanding any contrary
provision hereof, if an Event of Default has occurred and is continuing and the
Administrative Agent, at the request of the Required Lenders, so notifies the
Borrower, then, so long as an Event of Default is continuing (i) no outstanding
Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii)
unless repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing
at the end of the Interest Period applicable thereto.
SECTION 2.07. Termination and Reduction of the Commitments.
(a) Scheduled Termination. Unless previously terminated, (i)
the Tranche A1 Commitments and the Tranche B1 Commitments shall terminate at
5:00 p.m., New York City time, on the date 60 days after the Closing Date and
(ii) all Tranche A2 Commitments, Tranche B2 Commitments and Incremental
Facility Commitments shall terminate at 5:00 p.m., New York City time, on the
Commitment Termination Date.
(b) Voluntary Termination or Reduction. The Borrower may at
any time terminate, or from time to time reduce, the Commitments of any Class
(including the Commitments of any Series of Incremental Facility Loans);
provided that each reduction of the Commitments of any Class pursuant to this
Section shall be in an amount that is U.S. $5,000,000 or a larger multiple of
U.S. $1,000,000.
(c) Notice of Termination or Reduction. The Borrower shall
notify the Administrative Agent of any election to terminate or reduce the
Commitments under paragraph (b) of this Section at least three Business Days
prior to the effective date of such termination or reduction, specifying such
election and the effective date thereof. Promptly following receipt of any
notice, the Administrative Agent shall advise the Lenders of the contents
thereof. Each notice delivered by the Borrower pursuant to this Section shall
be irrevocable.
(d) Effect of Termination or Reduction. Any termination or
reduction of the Commitments of any Class shall be permanent. Each reduction
of the Commitments of any Class shall be made ratably among the Lenders in
accordance with their respective Commitments of such Class.
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SECTION 2.08. Repayment of Loans; Evidence of Debt.
(a) Repayment. The Borrower hereby unconditionally promises
to pay the Loans outstanding hereunder to the Administrative Agent for the
account of each Lender the outstanding principal amount of each Loan of each
Class of such Lender on each Principal Payment Date, the first nine
installments of which shall be in an amount equal to 1/18 of the aggregate
principal amount of the Loans of such Class and the final installment of which
shall be in an amount equal to the then-outstanding balance.
(b) Manner of Payment. Prior to any repayment or prepayment
of any Borrowings of any Class hereunder, the Borrower shall select the
Borrowing or Borrowings of such Class to be paid and shall notify the
Administrative Agent by telephone (confirmed by telecopy) of such selection not
later than 11:00 a.m., New York City time, (i) in the case of a repayment or
prepayment of a Eurodollar Borrowing, three Business Days before the scheduled
date of such payment and (ii) in the case of a repayment or prepayment of an
ABR Borrowing, one Business Day before the scheduled date of such payment;
provided that each payment of Borrowings of any Class shall be applied to pay
any outstanding ABR Borrowings of such Class before any other Borrowings of
such Class. If the Borrower fails to make a timely selection of the Borrowing
or Borrowings to be repaid or prepaid, such payment shall be applied, first, to
pay any outstanding ABR Borrowings of the applicable Class and, second, to
other Borrowings of such Class in the order of the remaining duration of their
respective Interest Periods (the Borrowing with the shortest remaining Interest
Period to be paid first). Each payment of a Borrowing shall be applied ratably
to the Loans included in such Borrowing.
(c) Maintenance of Loan Accounts by Lenders. Each Lender
shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrower to such Lender resulting from each
Loan made by such Lender, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder.
(d) Maintenance of Loan Accounts by Administrative Agent.
The Administrative Agent shall maintain accounts in which it shall record (i)
the amount of each Loan made hereunder, the Class and Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender's share thereof.
(e) Effect of Loan Accounts. The entries made in the
accounts maintained pursuant to paragraph (c) or (d) of this Section shall be
prima facie evidence of the existence and amounts of the obligations recorded
therein; provided that the failure of any Lender or the
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Administrative Agent to maintain such accounts or any error therein shall not
in any manner affect the obligation of the Borrower to repay the Loans in
accordance with the terms of this Agreement.
(f) Promissory Notes. Any Lender may request that Loans of
any Class made by it be evidenced by a promissory note. In such event, the
Borrower shall prepare, execute and deliver to such Lender a promissory note
payable to the order of such Lender (or, if requested by such Lender, to such
Lender and its registered assigns) in the form of a pagare under the laws of
Argentina and otherwise in a form approved by the Administrative Agent.
Thereafter, the Loans evidenced by such promissory note and interest thereon
shall at all times (including after assignment pursuant to Section 10.04) be
represented by one or more promissory notes in such form payable to the order
of the payee named therein (or, if such promissory note is a registered note,
to such payee and its registered assigns).
SECTION 2.09. Prepayment of Loans.
(a) Optional Prepayments. The Borrower shall have the right
at any time and from time to time to prepay any Borrowing in whole or in part,
subject to the requirements of this Section, provided that the aggregate
principal amount of any prepayment on any date pursuant to this paragraph shall
be at least equal to U.S. $5,000,000 with respect to Eurodollar Borrowings and
U.S. $1,000,000 with respect to ABR Borrowings. Prepayments under this
paragraph (a) shall be made without penalty or premium (other than as provided
in Section 2.14) and shall be applied ratably to the Loans of each Class, and
to the installments thereof in the inverse order of maturity. Amounts prepaid
in respect of any Loans may not be reborrowed.
(b) Mandatory Prepayments. The Borrower will make
prepayments of the Loans (and reduce the Commitments) hereunder as follows:
(i) Excess Cash Flow. Not later than the date 90 days after
the end of each fiscal year of the Borrower, commencing with the
fiscal year of the Borrower ending December 31, 2000, the Borrower
shall prepay the Loans (and/or provide cover for LC Exposure as
specified in Section 2.04(k)), in an aggregate amount equal to the
excess of (x) 50% of Excess Cash Flow for such fiscal year over (y)
the aggregate amount of prepayments of Loans made during such fiscal
year pursuant to Section 2.09(a). The Borrower shall be entitled to
reduce any mandatory prepayment otherwise required pursuant to this
Section 2.09(b)(i) with respect to any fiscal year by the aggregate
amount of any voluntary prepayments made pursuant to Section 2.09(a)
prior to the last day of the 90-day period immediately following the
end of such fiscal year (or, if earlier, the date upon which such
mandatory prepayment under this Section 2.09(b)(i) is in fact made),
provided that the amount of such voluntary prepayments so made during
such period shall, in any
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subsequent fiscal year, be deemed to have been made pursuant to this
Section 2.09(b)(i) rather than pursuant to Section 2.09(a), and thus
shall not be included in the foregoing clause (y) to reduce the amount
of any mandatory prepayment of Loans required under this Section
2.09(b)(i) with respect to the fiscal year in which such voluntary
prepayments were made.
(ii) Change of Control. In the event that any Change of
Control shall occur, the Borrower shall immediately prepay in full the
Loans (and/or provide cover for LC Exposure as specified in Section
2.04(k)), and the Commitments shall immediately terminate.
(iii) Sale of Assets. Without limiting the obligation of the
Borrower to obtain the consent of the Required Lenders to any
Disposition not otherwise permitted under this Agreement, the Borrower
agrees, on or prior to the occurrence of any Disposition under Section
7.03(a)(v)(z), to deliver to the Administrative Agent a statement
certified by a Financial Officer, in form and detail reasonably
satisfactory to the Administrative Agent, of the estimated amount of
the Net Cash Payments of such Disposition that will (on the date of
such Disposition) be received in cash and, the Borrower will prepay
the Loans hereunder (and provide cover for LC Exposure as specified in
clause (iv) of this Section 2.09), and the Commitments hereunder shall
be subject to automatic reduction, as follows:
(w) upon the date of such Disposition, in an
aggregate amount equal to 100% of such estimated amount of the
Net Cash Payments, to the extent received in cash on the date
of such Disposition; and
(x) thereafter, quarterly, on the date of the
delivery by the Borrower to the Administrative Agent pursuant
to Section 6.01(b) of the financial statements for each
quarterly fiscal period or (if earlier) the date 45 days after
the end of such quarterly fiscal period, to the extent the
Borrower or any of its Subsidiaries shall receive Net Cash
Payments during such quarterly fiscal period in cash under
deferred payment arrangements or Disposition Investments
entered into or received in connection with any Disposition,
an amount equal to (A) 100% of the aggregate amount of such
Net Cash Payments minus (B) any transaction expenses
associated with Dispositions and not previously deducted in
the determination of Net Cash Payments plus (or minus, as the
case may be) (C) any other adjustment received or paid by the
Borrower or any Subsidiary pursuant to the respective
agreements giving rise to Dispositions and not previously
taken into account in the determination of the Net Cash
Payments of Dispositions.
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Notwithstanding the foregoing, the Borrower shall not be
required to make a prepayment (or provide cover), and the Commitments
shall not be subject to reduction, pursuant to this Section
2.09(b)(iii) with respect to the Net Cash Payments from any
Disposition in the event that the Borrower certifies to the
Administrative Agent at the time a prepayment or reduction of
Commitments is required to be made under the foregoing clauses (w) or
(x) that it intends to reinvest such Net Cash Payments into
replacement assets useful in the business of the Borrower and its
Subsidiaries, so long as
(y) such Net Cash Payments are delivered to the
Administrative Agent to be held by it as additional collateral
security for the Loans, in which event the Administrative
Agent need not release such Net Cash Payments except upon
presentation of evidence reasonably satisfactory to it that
such Net Cash Payments are to be so reinvested in compliance
with the provisions of this Agreement; provided that (without
the consent of the Required Lenders) the Administrative Agent
shall not be obligated to release such monies for application
to a reinvestment transaction at any time after the occurrence
and during the continuance of any Event of Default; and
(z) the Net Cash Payments from any Disposition are
in fact so reinvested within twelve months of such Disposition
(it being understood that, in the event Net Cash Payments from
more than one Disposition are delivered to the Administrative
Agent, such Net Cash Payments shall be deemed to be released
in the same order in which such Dispositions occurred and,
accordingly, any such Net Cash Payments so held for more than
twelve months shall be forthwith applied to the prepayment of
Loans (and cover for LC Exposure) and reductions of
Commitments as provided in clause (iv) of this Section
2.09(b)).
The Borrower hereby (i) grants a security interest in favor of the
Administrative Agent for the benefit of the Lenders in all of its
right, title and interest in the Net Cash Payments and any Permitted
Investments made with the proceeds thereof (as provided below) and
(ii) agrees to instruct all Persons obligated in respect of all
Dispositions under this paragraph to make all payments in respect
thereof either (A) directly to the Administrative Agent by instructing
that such payments be remitted to a post office box which shall be in
the name and under the control of the Administrative Agent as
collateral security for the Loans or (B) to one or more other banks in
the United States of America (by instructing that such payments be
remitted to a post office box which shall be in the name and under the
control of the Administrative Agent) under arrangements, in form and
substance satisfactory to the Administrative Agent pursuant to which
the
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Borrower shall have irrevocably instructed such other bank (and such
other bank shall have agreed) to remit all proceeds of such payments
directly to the Administrative Agent to be held by it as collateral
security for the Loans. In addition to the foregoing, the Borrower
agrees that if any Net Cash Payments shall be received by it, it shall
as promptly as possible remit such Net Cash Payments to the
Administrative Agent. Until so deposited, all such proceeds shall be
held in trust by the Borrower for and as the property of the
Administrative Agent and shall not be commingled with any other funds
or property of the Borrower.
Net Cash Payments so held by the Administrative Agent shall be
invested from time to time in such Permitted Investments of the type
described in clauses (a) through (d) of the definition thereof as the
Borrower (or, after the occurrence and during the continuance of a
Default, the Administrative Agent) shall determine, which Permitted
Investments shall be held in the name and be under the control of the
Administrative Agent. At any time following the occurrence and during
the continuance of an Event of Default, the Administrative Agent may
(and, if instructed by the Required Lenders shall) in its (or their)
discretion apply or cause to be applied (subject to collection) the
balance from time to time outstanding to the credit of any accounts in
which the Administrative Agent holds Net Cash Payments and/or elect to
liquidate any such Permitted Investments and to apply or cause to be
applied the proceeds thereof in the manner specified in clause (iv)
below.
(iv) Application. Upon each required reduction of
Commitments and prepayment of Loans (and cover for LC Exposure)
pursuant to this Section 2.09(b), the respective Commitments of each
Class shall be reduced, and (if the Commitments of such Class have
terminated) the respective Loans of each Class shall be prepaid,
ratably in accordance with the respective then-outstanding aggregate
amounts of such Commitments or Loans, and to the installments thereof
in the inverse order of maturity. Each such prepayment of Loans shall
be made without penalty or premium, other than as provided in Section
2.14.
(c) Notices, Etc. The Borrower shall notify the
Administrative Agent by telephone (confirmed by telecopy) of any prepayment
hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later
than 11:00 a.m., New York City time, three Business Days before the date of
prepayment and (ii) in the case of prepayment of an ABR Borrowing, not later
than 11:00 a.m., New York City time, one Business Day before the date of
prepayment. Each such notice shall be irrevocable and shall specify the
prepayment date and the principal amount of each Borrowing or portion thereof
to be prepaid. Promptly following receipt of any such notice relating to a
Borrowing, the Administrative Agent shall advise the Lenders of the contents
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thereof. Each partial prepayment of any Eurodollar Borrowing shall be in an
aggregate principal amount at least equal to U.S. $5,000,000; and each partial
prepayment of any ABR Borrowing shall be in an aggregate principal amount at
least equal to U.S. $1,000,000. Each prepayment of a Borrowing shall be
applied ratably to the Loans included in the prepaid Borrowing. Prepayments
shall be accompanied by accrued interest to the extent required by Section
2.11.
SECTION 2.10. Fees.
(a) Commitment Fee. The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee, which
shall accrue at a rate per annum equal to 1/2 of 1% on the average daily unused
amount of each Term Commitment of such Lender for the period from and including
the date hereof to, but not including, the earlier of the date such Term
Commitment terminates and the Commitment Termination Date. Accrued commitment
fees shall be payable, in arrears, on each Quarterly Date and on the earlier of
the date the relevant Commitment terminates and the Commitment Termination
Date, as applicable, commencing on the first such date to occur after the date
hereof. All commitment fees shall be computed on the basis of a year of 360
days and shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). For purposes of computing commitment
fees with respect to the Tranche A2 Commitments and the Tranche B2 Commitments,
the Term Commitment of a Lender of such Class shall be deemed to be used to the
extent of the outstanding LC Exposure of such Lender of such Class.
(b) Letter of Credit Fees. The Borrower agrees to pay (i) to
the Administrative Agent for the account of each Lender a participation fee
with respect to its participations in Letters of Credit, which shall accrue at
a rate per annum equal to the Applicable Margin then in effect with respect to
Eurodollar Loans on the average daily amount of such Lender's LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the Closing Date to, but excluding, the
later of the date on which such Lender's Commitment terminates and the date on
which such Lender ceases to have any LC Exposure, and (ii) to the Issuing
Lender a fronting fee, which shall accrue at the rate of 1/4 of 1% per annum on
the average daily amount of the LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Closing Date to but excluding the later of the date of
termination of the Commitments and the date on which there ceases to be any LC
Exposure, as well as the Issuing Lender's standard fees with respect to the
administration, issuance, amendment, negotiation, renewal or extension of any
Letter of Credit or processing of drawings thereunder. Participation fees and
fronting fees accrued through and including each Quarterly Date shall be
payable on the third Business Day following such Quarterly Date, commencing on
the first such date to occur after the Closing Date; provided that all such
fees shall be payable on the date on which the Commitments
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terminate and any such fees accruing after the date on which the Commitments
terminate shall be payable on demand. Any other fees payable to the Issuing
Lender pursuant to this paragraph shall be payable within 10 days after demand.
All participation fees and fronting fees shall be computed on the basis of a
year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).
(c) Administrative Agent Fees. The Borrower agrees to pay to
the Administrative Agent, for its own account, fees payable in the amounts and
at the times separately agreed upon between the Borrower and the Administrative
Agent.
(d) Payment of Fees. All fees payable hereunder shall be
paid on the dates due, in immediately available funds, to the Administrative
Agent (or to the Issuing Lender, in the case of fees payable to it) for
distribution, in the case of facility fees and participation fees, to the
Lenders entitled thereto. Fees paid shall not be refundable under any
circumstances.
SECTION 2.11. Interest.
(a) ABR Borrowings. The Loans comprising each ABR Borrowing
shall bear interest at a rate per annum equal to the Alternate Base Rate plus
the Applicable Margin.
(b) Eurodollar Borrowings. The Loans comprising each
Eurodollar Borrowing shall bear interest at a rate per annum equal to the
Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus
the Applicable Margin.
(c) Default Interest. Notwithstanding the foregoing, if any
principal of or interest on any Loan or any fee or other amount payable by the
Borrower hereunder is not paid when due, whether at stated maturity, upon
acceleration, by mandatory prepayment or otherwise, such overdue amount shall
bear interest, after as well as before judgment, at a rate per annum equal to
(i) in the case of overdue principal of any Loan, 2% plus the rate otherwise
applicable to such Loan as provided above or (ii) in the case of any other
amount, 2% plus the rate applicable to ABR Loans as provided in paragraph (a)
of this Section.
(d) Payment of Interest. Accrued interest on each Loan shall
be payable in arrears on each Interest Payment Date for such Loan; provided
that (i) interest accrued pursuant to paragraph (c) of this Section shall be
payable on demand, (ii) in the event of any repayment or prepayment of any
Loan, accrued interest on the principal amount repaid or prepaid shall be
payable on the date of such repayment or prepayment and (iii) in the event of
any conversion of any Eurodollar Borrowing prior to the end of the current
Interest Period therefor, accrued interest on such Borrowing shall be payable
on the effective date of such conversion.
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(e) Computation. All interest hereunder shall be computed on
the basis of a year of 360 days, except that interest computed by reference to
the Alternate Base Rate at times when the Alternate Base Rate is based on the
Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in
a leap year), and in each case shall be payable for the actual number of days
elapsed (including the first day but excluding the last day). The applicable
Alternate Base Rate or Eurodollar Rate shall be determined by the
Administrative Agent, and such determination shall be conclusive absent
manifest error.
SECTION 2.12. Alternate Rate of Interest. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and
reasonable means do not exist for ascertaining the Adjusted LIBO Rate
for such Interest Period; or
(b) if such Borrowing is of a particular Class of Loans
(including of a particular Series of Incremental Facility Loans), the
Administrative Agent is advised by the Required Lenders of such Class
that the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such
Interest Period will not adequately and fairly reflect the cost to
such Lenders of making or maintaining their Loans included in such
Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
relevant Lenders by telephone or telecopy as promptly as practicable thereafter
and, until the Administrative Agent notifies the Borrower and such Lenders that
the circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.
SECTION 2.13. Increased Costs.
(a) Increased Costs Generally. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender (except any such
reserve requirement reflected in the Adjusted LIBO Rate) or the
Issuing Lender; or
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(ii) impose on any Lender or the Issuing Lender or the London
interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or
participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lenders of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Lender of participating in, issuing or maintaining any Letter of Credit
or to reduce the amount of any sum received or receivable by such Lender or the
Issuing Lender hereunder (whether of principal, interest or otherwise), then
the Borrower will pay to such Lender or the Issuing Lender, as the case may be,
such additional amount or amounts as will compensate such Lender or the Issuing
Lender, as the case may be, for such additional costs incurred or reduction
suffered.
(b) Capital Requirements. If any Lender or the Issuing
Lender determines that any Change in Law regarding capital requirements has or
would have the effect of reducing the rate of return on such Lender's or the
Issuing Lender's capital or on the capital of such Lender's or the Issuing
Lender's holding company, if any, as a consequence of this Agreement or the
Loans made by, or participations in Letters of Credit held by, such Lender, or
the Letters of Credit issued by the Issuing Lender, to a level below that which
such Lender or the Issuing Lender or such Lender's or the Issuing Lender's
holding company could have achieved but for such Change in Law (taking into
consideration such Lender's or the Issuing Lender's policies and the policies
of such Lender's or the Issuing Lender's holding company with respect to
capital adequacy), then from time to time the Borrower will pay to such Lender
or the Issuing Lender, as the case may be, such additional amount or amounts as
will compensate such Lender or the Issuing Lender or such Lender's or the
Issuing Lender's holding company for any such reduction suffered.
(c) Certificates from Lenders. A certificate of a Lender or
the Issuing Lender setting forth the amount or amounts necessary to compensate
such Lender or the Issuing Lender or its holding company, as the case may be,
as specified in paragraph (a) or (b) of this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender or the Issuing Lender, as the case may be, the amount shown as due
on any such certificate within 10 days after receipt thereof.
(d) Delay in Requests. Failure or delay on the part of any
Lender or the Issuing Lender to demand compensation pursuant to this Section
shall not constitute a waiver of such Lender's or the Issuing Lender's right to
demand such compensation; provided that the Borrower shall not be required to
compensate a Lender or the Issuing Lender pursuant to this Section for any
increased costs or reductions incurred more than six months prior to the date
that such
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Lender or the Issuing Lender, as the case may be, notifies the Borrower of the
Change in Law giving rise to such increased costs or reductions and of such
Lender's or the Issuing Lender's intention to claim compensation therefor;
provided further that, if the Change in Law giving rise to such increased costs
or reductions is retroactive, then the six-month period referred to above shall
be extended to include the period of retroactive effect thereof.
SECTION 2.14. Break Funding Payments. In the event of (a)
the payment of any principal of any Eurodollar Loan other than on the last day
of an Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Loan on the date specified in any notice delivered
pursuant hereto, or (d) the assignment of any Eurodollar Loan other than on the
last day of the Interest Period applicable thereto as a result of a request by
the Borrower pursuant to Section 2.17, then, in any such event, the Borrower
shall compensate each Lender for the loss, cost and expense attributable to
such event. In the case of a Eurodollar Loan, the loss to any Lender
attributable to any such event shall be deemed to include an amount determined
by such Lender to be equal to the excess, if any, of (i) the amount of interest
that such Lender would pay for a deposit equal to the principal amount of such
Loan for the period from the date of such payment, conversion, failure or
assignment to the last day of the then current Interest Period for such Loan
(or, in the case of a failure to borrow, convert or continue, the duration of
the Interest Period that would have resulted from such borrowing, conversion or
continuation) if the interest rate payable on such deposit were equal to the
Adjusted LIBO Rate for such Interest Period, over (ii) the amount of interest
that such Lender would earn on such principal amount for such period if such
Lender were to invest such principal amount for such period at the interest
rate that would be bid by such Lender (or an affiliate of such Lender) for U.S.
Dollar deposits from other banks in the eurodollar market at the commencement
of such period. A certificate of any Lender setting forth any amount or
amounts that such Lender is entitled to receive pursuant to this Section shall
be delivered to the Borrower and shall be conclusive absent manifest error.
The Borrower shall pay such Lender the amount shown as due on any such
certificate within 10 days after receipt thereof.
SECTION 2.15. Argentine Taxes.
(a) Payments by Borrower. The Borrower will pay all Taxes
applicable to it, without charge to or offset against any amount due to the
Administrative Agent or any Lender. The Borrower will pay all Taxes applicable
to it prior to the date on which penalties attach thereto, except (i) any such
Taxes (other than Argentine Taxes imposed on or in respect of any amount
payable by the Borrower hereunder) the payment of which is being contested in
good faith and by proper proceedings and against which adequate reserves are
being maintained, so
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long as no claim for such Taxes is made on the Administrative Agent or any
Lender or (ii) to the extent that the failure to do so could not reasonably be
expected to result in a Material Adverse Effect.
(b) Payments Made Free of Argentine Taxes. All payments on
account of the principal of and interest on the Loans, fees and all other
amounts payable hereunder by the Borrower to or for the account of the
Administrative Agent or any Lender, including, without limitation, amounts
payable under this Section, shall be made free and clear of and without
reduction or liability for Argentine Taxes or Other Taxes.
(c) Gross-up. In the event that the Borrower is required to
deduct or withhold Argentine Taxes from any amounts payable on, under or in
respect of this Agreement or the Loans made to the Borrower, the Borrower shall
(to the fullest extent permitted by applicable law) promptly pay the Person
entitled to such amount such additional amounts as may be required, after any
deduction or withholding of Argentine Taxes, to enable such Person to receive
from the Borrower on the due date thereof, an amount equal to the full amount
stated to be payable to such Person under this Agreement. Each Lender shall
provide to the Borrower such forms or certificates as the Borrower may
reasonably request to establish such Lender's entitlement to any exemption from
or reduction of Argentine Taxes, but no Lender shall be required to provide any
form or certificate if it determines in its discretion that the provision of
such form or certificate could adversely affect it or it is not legally
entitled to provide such form or certificate.
(d) Other Taxes. The Borrower shall pay all Other Taxes to
the relevant Governmental Authority, except taxes imposed on the gross revenues
of any Lender, which shall be paid by such Lender.
(e) Indemnification by Borrower. The Borrower shall
indemnify the Administrative Agent and each Lender against, and reimburse the
Administrative Agent and each Lender on demand for, any Argentine Taxes or
Other Taxes and any loss, liability, claim or expense, including interest,
penalties and legal fees, that the Administrative Agent or such Lender may
incur at any time arising out of or in connection with any failure of the
Borrower to make any payment of Argentine Taxes when due. A certificate as to
the amount of such payment or liability delivered to the Borrower by such
indemnified person shall be conclusive absent manifest error.
(f) Tax Receipts. The Borrower shall furnish to the
Administrative Agent, together with sufficient certified copies for
distribution to each Lender requesting the same (identifying the Lenders that
have so requested), original official tax receipts (or certified copies
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thereof) in respect of each payment of Argentine Taxes required pursuant to
this Section 2.15 (other than clause (a)) made by the Borrower or such other
information, documents and receipts that the Administrative Agent or such
Lender may reasonably require to establish to its satisfaction that full and
timely payment has been made of all such Argentine Taxes required to be paid
under this Section within 30 days after the date such payment is made.
SECTION 2.16. Payments Generally; Pro Rata Treatment; Sharing
of Set-offs.
(a) Payments by Borrower. The Borrower shall make each
payment required to be made by it hereunder (whether of principal, interest,
fees or reimbursement of LC Disbursements, or under Section 2.13, 2.14 or 2.15,
or otherwise) or under any other Loan Document (except to the extent otherwise
provided therein) prior to 12:00 noon, New York City time, on the date when
due, in immediately available funds, without set-off or counterclaim. Any
amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 270 Park Avenue,
New York, New York, except as otherwise expressly provided in the relevant Loan
Document, and except payments to be made directly to the Issuing Lender as
expressly provided herein and except that payments pursuant to Sections 2.13,
2.14, 2.15 and 9.03 shall be made directly to the Persons entitled thereto.
The Administrative Agent shall distribute any such payments received by it for
the account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension. All payments
hereunder or under any other Loan Document (except to the extent otherwise
provided therein) shall be made in U.S. Dollars.
(b) Application if Payments Insufficient. If at any time
insufficient funds are received by and available to the Administrative Agent to
pay fully all amounts of principal, unreimbursed LC Disbursements, interest and
fees then due hereunder, such funds shall be applied (i) first, to pay interest
and fees then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of interest and fees then due to such parties, and
(ii) second, to pay principal and unreimbursed LC Disbursements then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal and unreimbursed LC Disbursements then due to such
parties.
(c) Pro Rata Treatment. Except to the extent otherwise
provided herein: (i) each Borrowing of a particular Class shall be made from
the relevant Lenders, each payment of commitment fee under Section 2.10 in
respect of Commitments of a particular Class shall be
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made for account of the relevant Lenders, and each termination or reduction of
the amount of the Commitments of a particular Class under Section 2.07 shall be
applied to the respective Commitments of such Class of the relevant Lenders,
pro rata according to the amounts of their respective Commitments of such
Class; (ii) Borrowings of any Class shall be allocated pro rata among the
relevant Lenders according to the amounts of their respective Commitments of
such Class (in the case of the making of Loans) or their respective Loans of
such Class; (iii) each payment or prepayment of principal of Loans of any Class
by the Borrower shall be made for account of the relevant Lenders pro rata in
accordance with the respective unpaid principal amounts of the Loans of such
Class held by them; and (iv) each payment of interest on Loans of any Class by
the Borrower shall be made for account of the relevant Lenders pro rata in
accordance with the amounts of interest on such Loans then due and payable to
the respective Lenders.
(d) Sharing of Payments by Lenders. If any Lender shall, by
exercising any right of set-off, counterclaim, foreclosure or otherwise, obtain
payment in respect of any principal of or interest on any of its Loans or
participations in LC Disbursements resulting in such Lender receiving payment
of a greater proportion of the aggregate amount of its Loans and participations
in LC Disbursements and accrued interest thereon then due than the proportion
received by any other Lender, then the Lender receiving such greater proportion
shall purchase (for cash at face value) participations in the Loans and
participations in LC Disbursements of other Lenders to the extent necessary so
that the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans and participations in LC Disbursements; provided that
(i) if any such participations are purchased and all or any portion of the
payment giving rise thereto is recovered, such participations shall be
rescinded and the purchase price restored to the extent of such recovery,
without interest, and (ii) the provisions of this paragraph shall not be
construed to apply to any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by
a Lender as consideration for the assignment of or sale of a participation in
any of its Loans or participations in LC Disbursements to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). Without limiting
the generality of the foregoing, Chase hereby agrees that, if as a result of
any foreclosure by it upon collateral security held by it in its individual
capacity (and not as Administrative Agent hereunder) pursuant to the Security
Documents, it shall obtain payment in respect of any principal of or interest
on any of its Loans or participations in LC Disbursements, it will, as provided
above, purchase (for cash at face value) participations in the Loans and
participations in LC Disbursements of the other Lenders to the extent necessary
so that the benefit of all such payments received by Chase shall be shared by
the Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans and participations in LC
Disbursements as provided above.
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The Borrower consents to the provisions of the foregoing
paragraph and agrees, to the extent it may effectively do so under applicable
law, that any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation.
(e) Presumptions of Payments. Unless the Administrative
Agent shall have received notice from the Borrower prior to the date on which
any payment is due to the Administrative Agent for the account of the Lenders
or the Issuing Lender hereunder that the Borrower will not make such payment,
the Administrative Agent may assume that the Borrower has made such payment on
such date in accordance herewith and may, in reliance upon such assumption,
distribute to the Lenders or the Issuing Lender, as the case may be, the amount
due. In such event, if the Borrower has not in fact made such payment, then
each of the Lenders or the Issuing Lender, as the case may be, severally agrees
to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender or the Issuing Lender with interest thereon, for
each day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the Federal Funds
Effective Rate.
(f) Certain Deductions by Administrative Agent. If any
Lender shall fail to make any payment required to be made by it pursuant to
Section 2.04(e) or (f), 2.05(b) or 2.16(e), then the Administrative Agent may,
in its discretion (notwithstanding any contrary provision hereof), apply any
amounts thereafter received by the Administrative Agent for the account of such
Lender to satisfy such Lender's obligations under such Sections until all such
unsatisfied obligations are fully paid.
SECTION 2.17. Mitigation Obligations; Replacement of Lenders.
(a) Designation of Different Lending Office. If any Lender
requests compensation under Section 2.13, or if the Borrower is required to pay
any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.15, then such Lender shall use
reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder
to another of its offices, branches or affiliates, if, in the judgment of such
Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 2.13 or 2.15, as the case may be, in the future and
(ii) would not subject such Lender to any unreimbursed cost or expense and
would not otherwise be disadvantageous to such Lender. The Borrower hereby
agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
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(b) Replacement of Lenders. If any Lender requests
compensation under Section 2.13, or if the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account
of any Lender pursuant to Section 2.15, or if any Lender defaults in its
obligation to fund Loans hereunder, then the Borrower may, at its sole expense
and effort, upon notice to such Lender and the Administrative Agent, require
such Lender to assign and delegate, without recourse (in accordance with and
subject to the restrictions contained in Section 10.04), all its interests,
rights and obligations under this Agreement to an assignee that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts
such assignment); provided that (i) the Borrower shall have received the prior
written consent of the Administrative Agent, which consent shall not
unreasonably be withheld, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans and participations in LC
Disbursements, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Borrower (in the case of all
other amounts) and (iii) in the case of any such assignment resulting from a
claim for compensation under Section 2.13 or payments required to be made
pursuant to Section 2.15, such assignment will result in a reduction in such
compensation or payments. A Lender shall not be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling the Borrower to require such
assignment and delegation cease to apply.
ARTICLE III
GUARANTEE
SECTION 3.01. The Guarantee. The Subsidiary Guarantors
hereby jointly and severally guarantee to each Lender and the Administrative
Agent and their respective successors and assigns the prompt payment in full
when due (whether at stated maturity, by acceleration or otherwise) of the
principal of and interest on the Loans made by the Lenders to the Borrower and
all other amounts from time to time owing to the Lenders or the Administrative
Agent by the Borrower under this Agreement and by any Obligor under any of the
other Loan Documents, in each case strictly in accordance with the terms
thereof (such obligations being herein collectively called the "Guaranteed
Obligations"). The Subsidiary Guarantors hereby further jointly and severally
agree that if the Borrower shall fail to pay in full when due (whether at
stated maturity, by acceleration or otherwise) any of the Guaranteed
Obligations, the Subsidiary Guarantors will promptly pay the same, without any
demand or notice whatsoever, and that in the case of any extension of time of
payment or renewal of any of the Guaranteed Obligations, the same will be
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promptly paid in full when due (whether at extended maturity, by acceleration
or otherwise) in accordance with the terms of such extension or renewal.
SECTION 3.02. Obligations Unconditional. The obligations of
the Subsidiary Guarantors under Section 3.01 are absolute and unconditional,
joint and several, irrespective of the value, genuineness, validity, regularity
or enforceability of the obligations of the Borrower under this Agreement or
any other agreement or instrument referred to herein or therein, or any
substitution, release or exchange of any other guarantee of or security for any
of the Guaranteed Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of this Section that the obligations of the
Subsidiary Guarantors hereunder shall be absolute and unconditional, joint and
several, under any and all circumstances. Without limiting the generality of
the foregoing, it is agreed that the occurrence of any one or more of the
following shall not alter or impair the liability of the Subsidiary Guarantors
hereunder, which shall remain absolute and unconditional as described above:
(i) at any time or from time to time, without notice to the
Subsidiary Guarantors, the time for any performance of or compliance
with any of the Guaranteed Obligations shall be extended, or such
performance or compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions of
this Agreement or any other agreement or instrument referred to herein
shall be done or omitted;
(iii) the maturity of any of the Guaranteed Obligations shall
be accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under this
Agreement or any other agreement or instrument referred to herein shall
be waived or any other guarantee of any of the Guaranteed Obligations
or any security therefor shall be released or exchanged in whole or in
part or otherwise dealt with; or
(iv) any lien or security interest granted to, or in favor of,
the Administrative Agent or any Lender or Lenders as security for any
of the Guaranteed Obligations shall fail to be perfected.
The Subsidiary Guarantors hereby expressly waive diligence, presentment, demand
of payment, protest and all notices whatsoever, and any requirement that the
Administrative Agent or any Lender exhaust any right, power or remedy or
proceed against the Borrower under this
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Agreement or any other agreement or instrument referred to herein, or against
any other Person under any other guarantee of, or security for, any of the
Guaranteed Obligations.
SECTION 3.03. Reinstatement. The obligations of the
Subsidiary Guarantors under this Article shall be automatically reinstated if
and to the extent that for any reason any payment by or on behalf of the
Borrower in respect of the Guaranteed Obligations is rescinded or must be
otherwise restored by any holder of any of the Guaranteed Obligations, whether
as a result of any proceedings in bankruptcy or reorganization or otherwise,
and the Subsidiary Guarantors jointly and severally agree that they will
indemnify the Administrative Agent and each Lender on demand for all reasonable
costs and expenses (including fees of counsel) incurred by the Administrative
Agent or such Lender in connection with such rescission or restoration,
including any such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.
SECTION 3.04. Subrogation. The Subsidiary Guarantors hereby
jointly and severally agree that until the payment and satisfaction in full of
all Guaranteed Obligations and the expiration and termination of the
Commitments of the Lenders under this Agreement they shall not exercise any
right or remedy arising by reason of any performance by them of their guarantee
in Section 3.01, whether by subrogation or otherwise, against the Borrower or
any other guarantor of any of the Guaranteed Obligations or any security for
any of the Guaranteed Obligations.
SECTION 3.05. Remedies. The Subsidiary Guarantors jointly
and severally agree that, as between the Subsidiary Guarantors and the Lenders,
the obligations of the Borrower under this Agreement may be declared to be
forthwith due and payable as provided in Article VIII (and shall be deemed to
have become automatically due and payable in the circumstances provided in
Article VIII) for purposes of Section 3.01 notwithstanding any stay, injunction
or other prohibition preventing such declaration (or such obligations from
becoming automatically due and payable) as against the Borrower and that, in
the event of such declaration (or such obligations being deemed to have become
automatically due and payable), such obligations (whether or not due and
payable by the Borrower) shall forthwith become due and payable by the
Subsidiary Guarantors for purposes of Section 3.01.
SECTION 3.06. Instrument for the Payment of Money. Each
Subsidiary Guarantor hereby acknowledges that the guarantee in this Article
constitutes an instrument for the payment of money, and consents and agrees
that any Lender or the Administrative Agent, at its sole option, in the event
of a dispute by such Subsidiary Guarantor in the payment of any
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moneys due hereunder, shall have the right to bring motion-action under New
York CPLR Section 3213.
SECTION 3.07. Continuing Guarantee. The guarantee in this
Article is a continuing guarantee, and shall apply to all Guaranteed
Obligations whenever arising.
SECTION 3.08. Rights of Contribution. The Subsidiary
Guarantors hereby agree, as between themselves, that if any Subsidiary
Guarantor shall become an Excess Funding Guarantor (as defined below) by reason
of the payment by such Subsidiary Guarantor of any Guaranteed Obligations, each
other Subsidiary Guarantor shall, on demand of such Excess Funding Guarantor
(but subject to the next sentence), pay to such Excess Funding Guarantor an
amount equal to such Subsidiary Guarantor's Pro Rata Share (as defined below
and determined, for this purpose, without reference to the properties, debts
and liabilities of such Excess Funding Guarantor) of the Excess Payment (as
defined below) in respect of such Guaranteed Obligations. The payment
obligation of a Subsidiary Guarantor to any Excess Funding Guarantor under this
Section shall be subordinate and subject in right of payment to the prior
payment in full of the obligations of such Subsidiary Guarantor under the other
provisions of this Article and such Excess Funding Guarantor shall not exercise
any right or remedy with respect to such excess until payment and satisfaction
in full of all of such obligations.
For purposes of this Section, (i) "Excess Funding Guarantor"
means, in respect of any Guaranteed Obligations, a Subsidiary Guarantor that
has paid an amount in excess of its Pro Rata Share of such Guaranteed
Obligations, (ii) "Excess Payment" means, in respect of any Guaranteed
Obligations, the amount paid by an Excess Funding Guarantor in excess of its
Pro Rata Share of such Guaranteed Obligations and (iii) "Pro Rata Share" means,
for any Subsidiary Guarantor, the ratio (expressed as a percentage) of (x) the
amount by which the aggregate present fair saleable value of all properties of
such Subsidiary Guarantor (excluding any shares of stock or quotas of any other
Subsidiary Guarantor) exceeds the amount of all the debts and liabilities of
such Subsidiary Guarantor (including contingent, subordinated, unmatured and
unliquidated liabilities, but excluding the obligations of such Subsidiary
Guarantor hereunder and any obligations of any other Subsidiary Guarantor that
have been Guaranteed by such Subsidiary Guarantor) to (y) the amount by which
the aggregate fair saleable value of all properties of all of the Subsidiary
Guarantors exceeds the amount of all the debts and liabilities (including
contingent, subordinated, unmatured and unliquidated liabilities, but excluding
the obligations of the Borrower and the Subsidiary Guarantors hereunder and
under the other Loan Documents) of all of the Subsidiary Guarantors, determined
(A) with respect to any Subsidiary Guarantor that is a party hereto on the
Closing Date, as of the Closing Date, and (B) with respect to any other
Subsidiary Guarantor, as of the date such Subsidiary Guarantor becomes a
Subsidiary Guarantor hereunder.
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SECTION 3.09. General Limitation on Guarantee Obligations.
In any action or proceeding involving any state corporate law, or any state or
Federal bankruptcy, insolvency, reorganization or other law affecting the
rights of creditors generally, if the obligations of any Subsidiary Guarantor
under Section 3.01 would otherwise, taking into account the provisions of
Section 3.08, be held or determined to be void, invalid or unenforceable, or
subordinated to the claims of any other creditors, on account of the amount of
its liability under Section 3.01, then, notwithstanding any other provision
hereof to the contrary, the amount of such liability shall, without any further
action by such Subsidiary Guarantor, any Lender, the Administrative Agent or
any other Person, be automatically limited and reduced to the highest amount
that is valid and enforceable and not subordinated to the claims of other
creditors as determined in such action or proceeding.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
SECTION 4.01. Organization. Each of the Borrower and its
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and as proposed to be
conducted and, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, is qualified to do business in, and is in good standing in, every
jurisdiction where failure to be so qualified would have a Material Adverse
Effect.
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SECTION 4.02. Authorization; Enforceability. The
Transactions are within each Obligor's corporate or other powers and have been
duly authorized by all necessary corporate and, if required, by all necessary
shareholder action. This Agreement has been duly executed and delivered by
each Obligor and constitutes, and each of the other Loan Documents to which it
is a party when executed and delivered by such Obligor will constitute, a
legal, valid and binding obligation of such Obligor, enforceable against each
Obligor in accordance with its terms, except as such enforceability may be
limited by (a) bankruptcy, insolvency, reorganization, moratorium or similar
laws of general applicability affecting the enforcement of creditors' rights
and (b) the application of general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
SECTION 4.03. Governmental Approvals; No Conflicts. The
Transactions (a) do not require any consent or approval (including any exchange
control approval) of, registration or filing with, or any other action by, any
Governmental Authority (including the Central Bank of Argentina), except for
such as have been obtained or made and are in full force and effect and are
listed on Schedule II, (b) will not violate any applicable law or regulation
(including regulations of the Central Bank of Argentina) or the charter,
by-laws or other organizational documents of the Borrower or any of its
Subsidiaries or any order of any Governmental Authority and (c) will not
violate or result in a default under any indenture, agreement or other
instrument binding upon the Borrower or any of its Subsidiaries or their
respective assets, or give rise to a right thereunder to require any payment to
be made by any such Person.
SECTION 4.04. Legal Form. Each of the Loan Documents is in
proper legal form under the law of Argentina for the enforcement thereof
against the Borrower under such law, and if each of the Loan Documents were
stated to be governed by such law, they would constitute legal, valid and
binding obligations of the Borrower under such law, enforceable in accordance
with their respective terms. All formalities required in Argentina for the
validity and enforceability of each of the Loan Documents (including any
necessary registration, recording or filing with any court or other authority
in Argentina) have been accomplished, and no Taxes are required to be paid to
Argentina, or any political subdivision thereof or therein, and no notarization
is required, for the validity and enforceability thereof, except that (i) if
the Loan Documents are enforced before the courts of the City of Buenos Aires,
the payment of a court tax of 3% on the amount of the claim is required to be
made in accordance with Article 2 of Law No. 23,898 and (ii) a translation of
the Loan Documents into Spanish (to the extent not already written in Spanish)
by a sworn translator is required for enforcement thereof in Argentina and
pursuant to Law No. 24,573 and its regulatory decree No. 1021/95, certain
obligatory mediation procedures must be exhausted prior to the initiation of
lawsuits in Argentina, with the exception, among others, of bankruptcy and
executory proceedings, which executory proceedings include
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the enforcement of foreign judgments, in which case mediation procedures remain
optional for the plaintiff. Subject to the foregoing, any judgment against the
Borrower of a State or Federal court of or in the State of New York which
satisfies the requirements of Articles 517 through 519 of Law 17.454, as
amended by Law 22.434 (National Code of Civil and Commercial Procedures) is
capable of being enforced in the courts of Argentina.
SECTION 4.05. Financial Condition; No Material Adverse Change.
(a) The Borrower has heretofore furnished to the Lenders the
consolidated balance sheet and statements of income, stockholders' equity and
cash flows of the Borrower and its Subsidiaries (i) as of and for the fiscal
year ended December 31, 1997, certified by the chief financial officer of the
Borrower. Such financial statements above present fairly, in all material
respects, the financial position and results of operations and cash flows of
the Borrower and its Subsidiaries as of such dates and for such periods in
accordance with GAAP, subject to year-end audit adjustments and the absence of
footnotes in the case of the statements referred to in clause (ii) of the first
sentence of this paragraph. None of the Borrower or any of its Subsidiaries
has on the date hereof any material contingent liabilities, liabilities for
taxes, unusual forward or long-term commitment or unrealized or anticipated
losses from any unfavorable commitments, except as referred to or reflected or
provided for in said financial statements as at said dates.
(b) Since December 31, 1997, there has been no material
adverse change in the business, assets, operations, prospects or condition,
financial or otherwise, of the Borrower and its Subsidiaries, taken as a whole.
SECTION 4.06. Properties.
(a) Each of the Borrower and its Subsidiaries has good title
to, or valid leasehold interests in, all its property material to its business,
subject only to Liens permitted by Section 7.02 and except for minor defects in
title that do not interfere with its ability to conduct its business as
currently conducted or to utilize such properties for their intended purposes.
(b) Each of the Borrower and its Subsidiaries owns, or is
licensed to use, all trademarks, tradenames, copyrights, patents and other
intellectual property material to its business, and the use thereof by the
Borrower and its Subsidiaries does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
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SECTION 4.07. Litigation and Environmental Matters.
(a) There are no actions, suits or proceedings by or before
any arbitrator or Governmental Authority now pending against or, to the
knowledge of the Borrower, threatened against or affecting the Borrower or any
of its Subsidiaries (i) as to which there is a reasonable possibility of an
adverse determination and that, if adversely determined, could reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect (other than as set forth in Schedule VI) or (ii) that involve this
Agreement or the Transactions.
(b) Except as set forth in Schedule VI and except with
respect to any other matters that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, neither the
Borrower nor any of its Subsidiaries (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law, (ii) has become subject to
any Environmental Liability, (iii) has received notice of any claim with
respect to any Environmental Liability or (iv) knows of any basis for any
Environmental Liability.
(c) Since the date of this Agreement, there has been no
change in the status of the matters set forth in Schedule VI that, individually
or in the aggregate, has resulted in, or materially increased the likelihood
of, a Material Adverse Effect.
SECTION 4.08. Compliance with Laws and Agreements. Each of
the Borrower and its Subsidiaries is in compliance with all laws, regulations
and orders of any Governmental Authority applicable to it or its property and
all indentures, agreements and other instruments binding upon it or its
property, except where the failure to do so, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect. No
Default has occurred and is continuing.
SECTION 4.09. Taxes. Each of the Borrower and its
Subsidiaries has timely filed or caused to be filed all Tax returns and reports
required to have been filed and has paid or caused to be paid all Taxes
required to have been paid by it, except (a) Taxes that are being contested in
good faith by appropriate proceedings and for which such Person has set aside
on its books adequate reserves or (b) to the extent that the failure to do so
could not reasonably be expected to result in a Material Adverse Effect.
SECTION 4.10. Disclosure. The Borrower has disclosed to the
Lenders all agreements, instruments and corporate or other restrictions to
which it or any of its Subsidiaries is subject, and all other matters known to
it, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect. None of the reports, financial
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statements, certificates or other information furnished by or on behalf of the
Obligors to the Lenders in connection with the negotiation of this Agreement
and the other Loan Documents or delivered hereunder or thereunder (as modified
or supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, with respect to projected financial
information, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.
SECTION 4.11. Material Agreements and Liens.
(a) Part A of Schedule IV is a complete and correct list of
each credit agreement, loan agreement, indenture, purchase agreement,
guarantee, letter of credit or other arrangement providing for or otherwise
relating to any Indebtedness or any extension of credit (or commitment for any
extension of credit) to, or guarantee by, the Borrower or any of its
Subsidiaries outstanding on the date hereof, and the aggregate principal or
face amount outstanding or that may become outstanding under each such
arrangement is correctly described in Part A of Schedule IV.
(b) Part B of Schedule IV is a complete and correct list of
each Lien securing Indebtedness of any Person outstanding on the date hereof
covering any property of the Borrower or any of its Subsidiaries, and the
aggregate Indebtedness secured (or that may be secured) by each such Lien and
the property covered by each such Lien is correctly described in Part B of
Schedule IV.
SECTION 4.12. Subsidiaries, Etc.
(a) Set forth in Part A of Schedule VII is a complete and
correct list of all of the Subsidiaries of the Borrower as of the date hereof,
together with, for each such Subsidiary, (i) the jurisdiction of organization
of such Subsidiary, (ii) each Person holding ownership interests in such
Subsidiary and (iii) the nature of the ownership interests held by each such
Person and the percentage of ownership of such Subsidiary represented by such
ownership interests. Except as disclosed in Part A of Schedule VII, (x) the
Borrower and its Subsidiaries owns, free and clear of Liens (other than Liens
created pursuant to the Security Documents), and has the unencumbered right to
vote, all outstanding ownership interests in each Person shown to be held by it
in Part A of Schedule VII, (y) all of the issued and outstanding capital stock
or quotas of capital of each such Person organized as a corporation is validly
issued, fully paid and nonassessable and (z) there are no outstanding Equity
Rights with respect to such Person.
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(b) Set forth in Part B of Schedule VII is a complete and
correct list of all Investments (other than Investments disclosed in Part A of
Schedule VII) held by the Borrower or any of its Subsidiaries in any Person on
the date hereof and, for each such Investment, (x) the identity of the Person
or Persons holding such Investment and (y) the nature of such Investment.
Except as disclosed in Part B of Schedule VII, each of the Borrower and its
Subsidiaries owns, free and clear of all Liens (other than Liens created
pursuant to the Security Documents), all such Investments.
(c) None of the Subsidiaries of the Borrower is, on the date
hereof, subject to any indenture, agreement, instrument or other arrangement of
the type described in Section 7.07.
SECTION 4.13. Security Interests. Each of the Security
Documents is effective to create on the Closing Date (and, in the case of any
Security Document executed and delivered after the Closing Date, is effective
to create on such date of execution and delivery), in favor of the
Administrative Agent for the benefit of the Administrative Agent and the
Lenders (or in the case of real or tangible personal property located in
Argentina but outside the Federal Capital of Buenos Aires, in favor of Chase),
a valid perfected and enforceable first priority Lien under the law of
Argentina, in all of the right, title and interest of each Obligor in, to and
under the Covered Property of such Obligor, subjected to the Lien of such
Security Document as collateral security for the payment of the principal of
and interest on the Loans, and all other amounts payable, hereunder.
SECTION 4.14. Ranking. This Agreement and the other Loan
Documents and the obligations evidenced hereby and thereby are and will at all
times be direct and unconditional general obligations of the Borrower, and rank
and will at all times rank in right of payment and otherwise at least pari
passu with all other unsecured Indebtedness of the Borrower, whether now
existing or hereafter outstanding.
SECTION 4.15. Commercial Activity; Absence of Immunity. Each
of the Borrower and its Subsidiaries is subject to civil and commercial law
with respect to its obligations under this Agreement and each of the other Loan
Documents to which it is a party. The execution, delivery and performance by
the Obligors of this Agreement and each of the other Loan Documents to which it
is a party constitute private and commercial acts rather than public or
governmental acts. Neither the Borrower or its Subsidiaries, nor any of their
respective properties or revenues, is entitled to any right of immunity in any
jurisdiction from suit, court jurisdiction, judgment, attachment (whether
before or after judgment), set-off or execution of a judgment or from any other
legal process or remedy relating to the obligations of the Obligors under this
Agreement or any of the other Loan Documents to which it is a party.
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SECTION 4.16. Use of Credit. Neither the Borrower nor any of
its Subsidiaries is engaged principally, or as one of its important activities,
in the business of extending credit for the purpose, whether immediate,
incidental or ultimate, of buying or carrying Margin Stock.
SECTION 4.17. Real Property. Set forth on the Real Property
Certificate is a list of all of the real property interests of the Borrower and
its Subsidiaries on the date hereof, indicating in each case whether the
respective property is owned or leased, the identity of the owner or lessee and
the location of the respective property. All such leases necessary for the
conduct of the business of the Borrower and its Subsidiaries are valid and
subsisting and are in full force and effect, except for such failures to be
valid, subsisting and in full force and effect as would not, individually or in
the aggregate, have a Material Adverse Effect.
SECTION 4.18. Vendor Contract. The Borrower has heretofore
delivered to the Administrative Agent a true and complete copy of the Vendor
Contract and any amendments thereto.
ARTICLE V
CONDITIONS
SECTION 5.01. Closing Date. The obligations of the Lenders
to make Loans and of the Issuing Lender to issue Letters of Credit hereunder is
subject to the Administrative Agent having received each of the following
documents, each of which shall be satisfactory to the Administrative Agent (and
to the extent specified below, to each Lender) in form and substance (or such
condition shall have been waived in accordance with Section 10.02):
(a) Executed Counterparts. From each party hereto either (i)
a counterpart of this Agreement signed on behalf of such party or (ii)
written evidence satisfactory to the Administrative Agent (which may
include telecopy transmission of a signed signature page of this
Agreement) that such party has signed a counterpart of this Agreement,
and to the extent requested pursuant to Section 2.08(f), promissory
notes.
(b) Opinion of Special New York Counsel to the Relevant
Parties. A favorable written opinion (addressed to the Administrative
Agent and the Lenders and dated the Closing Date) of Jones, Day,
Reavis & Pogue, special New York counsel for the Relevant Parties,
substantially in the form of Exhibit E, and covering such other
matters relating to the Relevant Parties, this Agreement or the
Transactions as the Required
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Lenders shall reasonably request (it being understood that portions of
such opinion may be given by inside general counsel for one or more of
the Relevant Parties). Each Obligor hereby requests such counsel to
deliver such opinion.
(c) Opinions of Argentine Counsel. A favorable written
opinion (addressed to the Administrative Agent and the Lenders and
dated the Closing Date) of each of (i) M. & M. Bomchil, special
Argentine counsel for the Borrower, substantially in the form of
Exhibit F and (ii) Perez Alati, Grondona, Benites, Arntsen & Martinez
de Hoz, special Argentine counsel for Chase, substantially in the form
of Exhibit G and, in each case, covering such other matters relating
to the Borrower, this Agreement or the Transactions as the Required
Lenders shall reasonably request. The Borrower hereby requests such
counsel to deliver such opinion to the Lenders.
(d) Opinion of Cayman Islands Counsel to the Parent. A
favorable written opinion (addressed to the Administrative Agent and
the Lenders and dated the Closing Date) of Maples and Calder, special
Cayman Islands counsel for the Parent, covering such matters relating
to the Parent, this Agreement or the Transactions as the Required
Lenders shall reasonably request.
(e) Opinion of Special New York Counsel to Chase. An
opinion, dated the Closing Date, of Milbank, Tweed, Hadley & McCloy,
special New York counsel to Chase, substantially in the form of
Exhibit H (and Chase hereby instructs such counsel to deliver such
opinion to the Lenders).
(f) Organizational Documents. Such documents and
certificates as the Administrative Agent or its counsel may reasonably
request relating to the organization, existence and good standing of
the Relevant Parties, the authorization of the Transactions and any
other legal matters relating to the Relevant Parties, this Agreement
or the Transactions, all in form and substance satisfactory to the
Administrative Agent and to special New York counsel to Chase,
including, without limitation, partners' and managers' resolutions of
the Borrower approving the Transactions.
(g) Officer's Certificate. A certificate, dated the Closing
Date and signed by the President, a Vice President or a Financial
Officer of the Borrower, confirming compliance with the conditions set
forth in the lettered clauses of the first sentence of Section 5.02.
(h) Obligor Security Documents. Assignments, security
agreements, mortgages and similar instruments executed and delivered
by each Obligor in favor of the Administrative Agent for the benefit
of the Administrative Agent and the Lenders (except
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for any of the foregoing covering real or tangible personal property
located in Argentina but outside of the Federal Capital of Buenos
Aires, which shall be in favor of Chase alone) covering all Covered
Property of the Obligors, in each case subject to Section 6.11 and in
form and substance satisfactory to the Administrative Agent and
special Argentine counsel to Chase. In addition, each Obligor shall
have taken such other action as the Administrative Agent shall have
requested in order to perfect the Liens created pursuant to such
Security Documents.
(i) Parent Pledge Agreement. The Parent Pledge Agreement,
duly executed and delivered by the Parent, Nextel International
(Holdings) Ltd. and the Administrative Agent, together with evidence
of (A) registration thereof with the Inspeccion General de Justicia,
(B) an annotation of the Contrato Social of the Borrower to reflect
the pledge of quotas and registration thereof with the Inspeccion
General de Justicia and (C) entries made in the Register of Mortgages
and Charges of the Parent in respect of the Lien created by the Parent
Pledge Agreement in accordance with Section 53 of the Companies Law
(1995 Revision) of the Cayman Islands.
(j) Undertaking and Security Agreement. The Undertaking and
Security Agreement duly executed and delivered by the Parent, the
Borrower and the Administrative Agent, together with such notification
to the counterparties to the agreements included in the "Collateral"
thereunder, and such Uniform Commercial Code financing statements, as
the Administrative Agent shall reasonably request.
(k) Cayman Islands Pledge Agreement. The Cayman Islands
Pledge Agreement duly executed and delivered by the holder or holders
of all of the issued and outstanding shares of Capital Stock of the
Parent, and by the Administrative Agent together with evidence that
such actions and documents shall have been taken or executed and
delivered as the Administrative Agent shall have requested in order to
perfect the security interest created thereby as a valid first and
prior perfected security interest in the Collateral thereunder.
(l) Capital Subscription Agreement. The Capital Subscription
Agreement, duly executed and delivered by the Parent Shareholder, the
Parent and the Borrower and the Consent and Agreement, duly executed
and delivered by the Parent Shareholder, the Parent, the Borrower and
the Administrative Agent.
(m) Equity Capital. Evidence that the Borrower shall have,
as of the Closing Date, not less than U.S. $98,000,000 (or its
equivalent) of Equity Capital.
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(n) Governmental Approvals. (i) Certified copies of all
governmental approvals necessary or, in the discretion of the
Administrative Agent, advisable in connection with this Agreement and
the transactions contemplated hereby and the continuing operations of
the Borrower and its Subsidiaries, (ii) evidence that all such
approvals are in full force and effect and (iii) evidence of payment
(or satisfactory arrangements for payment) of all license and other
governmental fees.
(o) Material Agreements. Certified copies of the Vendor
Contract, the Interconnection Agreement and the Licenses obtained from
the Government of Argentina.
(p) Base Case Projections. Certified copies of the Base Case
Projections.
(q) Sufficiency of Funds. Evidence that the amounts
available hereunder and under the Capital Subscription Agreement are
sufficient to meet the ongoing working capital needs of the Borrower
and its Subsidiaries following the consummation of the transactions
contemplated hereby.
(r) Purchase from Telcom Ventures, LLC. Evidence that the
Parent Shareholder, directly or indirectly through a wholly owned
Subsidiary of the Parent Shareholder, shall have purchased all of the
capital stock of the Parent held by Telcom Ventures, LLC such that the
Parent Shareholder, through its wholly owned Subsidiary, shall own
100% of the share capital of the Parent, which evidence shall include
certified copies of the relevant documentation in connection
therewith, each of which shall be in form and substance satisfactory
to the Administrative Agent.
(s) Process Agent Acceptance. A Process Agent Acceptance,
duly executed and delivered by the Process Agent, in substantially the
form of Exhibit J.
(t) Conversion; Merger, Etc. Evidence that (i) the Borrower
has been duly converted and registered as a sociedad de
responsabilidad limitada under Argentine law with the Inspeccion
General de Justicia, (ii) the managers of the Borrower have ratified
the obligations of the Borrower under this Agreement and each of the
other Loan Documents to which it is a party on or after the
effectiveness of the registration referred to above, (iii) the merger
of Buenos Aires Trunking S.R.L., Airlink S.R.L. and Communications
Services S.R.L. into the Borrower has been effected and registered
with the Inspeccion General de Justicia (together with copies of the
relevant merger documents) and (iv) all right, title and interest in
and to the tangible and intangible assets
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in which the Borrower purports to grant a Lien pursuant to the
Security Documents has been transferred to the Borrower.
(u) Real Estate Certificate. A certificate duly executed and
delivered by the Borrower identifying all the real property interests
of the Borrower and its Subsidiaries on the Closing Date, setting
forth in each case whether the respective property is owned or leased,
the identity of the owner or lessee and the location of the respective
property and otherwise in form and substance satisfactory to the
Lenders (the "Real Estate Certificate").
(v) Other Documents. Such other documents as the
Administrative Agent or any Lender or special New York counsel to
Chase may reasonably request.
The obligation of any Lender to make its initial extension of
credit hereunder is also subject to the payment by the Borrower of such fees as
the Borrower shall have agreed to pay to any Lender or the Administrative Agent
in connection herewith, including the reasonable fees and expenses of Milbank,
Tweed, Hadley & McCloy, special New York counsel to Chase and Perez Alati,
Grondona, Benites, Arntsen & Martinez de Hoz, special Argentine counsel to
Chase, in connection with the negotiation, preparation, execution and delivery
of this Agreement and the other Loan Documents and the extensions of credit
hereunder (subject to Section 10.03(a) and to the extent that statements for
such fees and expenses have been delivered to the Borrower).
The Administrative Agent shall notify the Borrower and the
Lenders of the Closing Date, and such notice shall be conclusive and binding.
Notwithstanding the foregoing, the obligations of the Lenders to make Loans and
of the Issuing Lender to issue Letters of Credit hereunder shall not become
effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 10.02) on or prior to 5:00 p.m., New York City time, on May
31, 1998 (and, in the event such conditions are not so satisfied or waived, the
Commitments shall terminate at such time).
SECTION 5.02. Each Credit Event. The obligation of each
Lender to make a Loan on the occasion of any Borrowing, and of the Issuing
Lender to issue, amend, renew or extend any Letter of Credit, is subject to the
satisfaction of the following conditions:
(a) the representations and warranties of each Obligor set
forth in this Agreement and of each Relevant Party in the other Loan
Documents shall be true and correct on and as of the date of such
Borrowing or the date of issuance, amendment, renewal or extension of
such Letter of Credit, as applicable (or, if such representation or
warranty is
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given as to a specific date, such representation or warranty shall
have been true and correct as of such specific date); and
(b) at the time of and immediately after giving effect to
such Borrowing or the issuance, amendment, renewal or extension of
such Letter of Credit, as applicable, no Default shall have occurred
and be continuing.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter
of Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in the preceding
sentence.
ARTICLE VI
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall
have been paid in full and all Letters of Credit shall have expired or
terminated and all LC Disbursements shall have been reimbursed, the Borrower
covenants and agrees with the Lenders that:
SECTION 6.01. Financial Statements and Other Information.
The Borrower will furnish to the Administrative Agent and each Lender:
(a) within 90 days after the end of each fiscal year of the
Borrower, the audited consolidated balance sheet and related
statements of operations, stockholders' equity and cash flows of the
Borrower and its Subsidiaries as of the end of and for such year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all reported on by Deloitte & Touche LLP or other
independent public accountants of recognized national standing (without
a "going concern" or like qualification or exception and without any
qualification or exception as to the scope of such audit) to the effect
that such consolidated financial statements present fairly in all
material respects the financial condition and results of operations of
the Borrower and its Subsidiaries on a consolidated basis in accordance
with GAAP consistently applied;
(b) within 45 days after the end of each fiscal quarter of
each fiscal year of the Borrower, the consolidated balance sheet and
related statements of operations, stockholders' equity and cash flows
of the Borrower and its Subsidiaries as of the end of
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and for such fiscal quarter and the then elapsed portion of the fiscal
year, setting forth in each case in comparative form the figures for
(or, in the case of the balance sheet, as of the end of) the
corresponding period or periods of the previous fiscal year, all
certified by a Financial Officer of the Borrower as presenting fairly
in all material respects the financial condition and results of
operations of the Borrower and its Subsidiaries on a consolidated basis
in accordance with GAAP consistently applied, subject to normal
year-end audit adjustments and the absence of footnotes;
(c) concurrently with any delivery of financial statements
under clause (a) or (b) of this Section, a certificate of a Financial
Officer of the Borrower certifying as to whether a Default has
occurred and, if a Default has occurred, specifying the details
thereof and any action taken or proposed to be taken with respect
thereto;
(d) concurrently with any delivery of financial statements
under clause (a) of this Section, a certificate of the accounting firm
that reported on such financial statements stating whether they
obtained knowledge during the course of their examination of such
financial statements of any Default arising as a result of a failure
of the Borrower to observe or perform any covenant, condition or
agreement contained in Article VII (which certificate may be limited
to the extent required by accounting rules or guidelines);
(e) concurrently with any delivery of financial statements
under clause (b) of this Section, a certificate of the Borrower
setting forth in reasonable detail the aggregate cumulative historic
cost of all Covered Property located within the Federal Capital of
Buenos Aires and within the rest of Argentina, such historic cost to
be determined, for each such geographic area, on a cumulative basis
from the date of formation of the Borrower, or any predecessor,
through the last day of the fiscal quarter covered by such statements;
(f) within 30 days after the beginning of each fiscal year of
the Borrower, financial projections for the Borrower and its
Subsidiaries for such fiscal year, prepared with such detail as
requested by the Administrative Agent; and
(g) promptly following any request therefor, such other
information regarding the operations, business affairs and financial
condition of the Borrower or any of its Subsidiaries, or compliance
with the terms of this Agreement and the other Loan Documents, as the
Administrative Agent or any Lender may reasonably request.
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SECTION 6.02. Notices of Material Events. The Borrower (for
itself and on behalf of the Parent) will furnish to the Administrative Agent
(which shall provide a copy thereof to each Lender) prompt written notice of
the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority
against or affecting the Parent or any of its Affiliates (including
the Borrower) that, if adversely determined, could reasonably be
expected to result in a Material Adverse Effect;
(c) the assertion of any environmental matter by any Person
against, or with respect to the activities of, the Borrower or any of
its Subsidiaries and any alleged violation of or non-compliance with
any Environmental Laws or any permits, licenses or authorizations,
other than any environmental matter or alleged violation that, if
adversely determined, would not (either individually or in the
aggregate) have a Material Adverse Effect; and
(d) any other development that results in, or could
reasonably be expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth
the details of the event or development requiring such notice and any action
taken or proposed to be taken with respect thereto.
SECTION 6.03. Existence; Conduct of Business. The Borrower
will, and will cause each of its Subsidiaries to cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of its business (including, without limitation, taking all
actions to satisfy completion deadlines (if any) under its licenses); provided
that the foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 7.03.
Without limiting the generality of the foregoing, the Borrower
will take such action from time to time as shall be necessary in order to (a)
complete the development, expansion and upgrade of its network system as
contemplated in the Information Memorandum, and to operate such system in the
manner contemplated by the Information Memorandum, (b) enforce the Vendor
Contract in accordance with their respective terms and (c) comply with the
terms and conditions of the Interconnection Agreement.
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SECTION 6.04. Payment of Obligations. The Borrower will, and
will cause each of its Subsidiaries to, pay its obligations, including Tax
liabilities, that, if not paid, could result in a Material Adverse Effect
before the same shall become delinquent or in default, except where (a) the
validity or amount thereof is being contested in good faith by appropriate
proceedings, (b) the Borrower or such Subsidiary has set aside on its books
adequate reserves with respect thereto in accordance with GAAP and (c) the
failure to make payment pending such contest could not reasonably be expected
to result in a Material Adverse Effect.
SECTION 6.05. Maintenance of Properties; Insurance. The
Borrower will, and will cause each of its Subsidiaries to, (a) keep and
maintain all property material to the conduct of its business in good working
order and condition, ordinary wear and tear excepted, and (b) maintain, with
financially sound and reputable insurance companies, insurance in such amounts
and against such risks as are customarily maintained by companies engaged in
the same or similar businesses operating in the same or similar locations.
SECTION 6.06. Books and Records; Inspection Rights. The
Borrower will, and will cause each of its Subsidiaries to, keep proper books of
record and account in which full, true and correct entries are made of all
dealings and transactions in relation to its business and activities. The
Borrower will, and will cause each of its Subsidiaries to, permit any
representatives designated by the Administrative Agent or any Lender, upon
reasonable prior notice, to visit and inspect its properties, to examine and
make extracts from its books and records, and to discuss its affairs, finances
and condition with its officers and independent accountants, all at such
reasonable times and as often as reasonably requested.
SECTION 6.07. Compliance with Laws. The Borrower will, and
will cause each of its Subsidiaries to, comply in all material respects with
all laws, rules, regulations and orders of any Governmental Authority
applicable to it or its property and each of its contractual obligations,
including without limitation, Environmental Laws.
SECTION 6.08. Use of Proceeds and Letters of Credit.
(a) Tranche A1 Loans and Tranche A2 Loans. The proceeds of
the Tranche A1 Loans and the Tranche A2 Loans will be used solely to finance
the import of capital goods into Argentina.
(b) Tranche B1 Loans and Tranche B2 Loans. The proceeds of
the Tranche B1 Loans and the Tranche B2 Loans will be used solely to finance
capital expenditures related to the development, expansion and upgrade of the
Borrower's network systems, to finance acquisitions
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of spectrum not prohibited hereunder, to finance the import of capital goods
into Argentina, and to finance the general working capital needs of the
Borrower and its Subsidiaries.
(c) Incremental Facility Loans. The proceeds of Incremental
Facility Loans will be used for any purpose to which the proceeds of Tranche A1
Loans, Tranche A2 Loans, Tranche B1 Loans or Tranche B2 Loans may be applied.
(d) Margin Regulations. No part of the proceeds of any Loan
will be used, whether directly or indirectly, for any purpose that entails a
violation of any of the Regulations of the Board, including Regulations G, U
and X.
SECTION 6.09. Certain Obligations Respecting Subsidiaries.
(a) Subsidiary Guarantors. The Borrower will take such
action, and will cause each of its Subsidiaries to take such action, from time
to time as shall be necessary to ensure that all Subsidiaries of the Borrower
(other than Non-Material Subsidiaries) are "Subsidiary Guarantors" hereunder
(including payment of fees to any Subsidiary Guarantors organized in Argentina
as consideration for becoming a Subsidiary Guarantor hereunder). Without
limiting the generality of the foregoing, in the event that the Borrower or any
of its Subsidiaries shall form or acquire any Person that shall constitute a
Subsidiary (other than a Non-Material Subsidiary) hereunder, the Borrower and
its Subsidiaries will cause such new Subsidiary to:
(i) become a "Subsidiary Guarantor" hereunder, and a
"Securing Party" under the Security Documents pursuant to a Guarantee
Assumption Agreement;
(ii) cause such Subsidiary to take such action (including
delivering such shares of stock and Security Documents) as shall be
necessary to create and perfect valid, perfected and enforceable first
priority Liens on substantially all of the Covered Property of such
new Subsidiary as collateral security for the obligations of such new
Subsidiary under its Guarantee Assumption Agreement; and
(iii) deliver such proof of corporate action, incumbency of
officers, opinions of counsel and other documents as is consistent
with those delivered by each Obligor pursuant to Section 5.01 on the
Closing Date or as the Administrative Agent shall have requested.
(b) Ownership of Subsidiaries. The Borrower will, and will
cause each of its Subsidiaries to, take such action from time to time as shall
be necessary to ensure that each of its Subsidiaries is a wholly owned
Subsidiary (or a 99% owned Subsidiary in the case of
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Subsidiaries organized under the laws of Argentina). In the event that any
additional shares of stock or quotas, as applicable, shall be issued by any
Subsidiary, the respective Obligor agrees forthwith to deliver to the
Administrative Agent pursuant to the Security Agreements the certificates
evidencing such shares of stock, accompanied by undated stock powers executed
in blank (if applicable) or (in the case of quotas) to register such additional
quotas with the Inspeccion General de Justicia, and to take such other action
as the Administrative Agent shall request to perfect the security interest
created therein pursuant to the Security Agreements.
SECTION 6.10. Governmental Approvals. The Borrower agrees
that it will promptly obtain, or cause to be obtained, from time to time at its
own expense all such governmental licenses, authorizations, consents, permits
and approvals as may be required for the Parent, the Borrower and the other
Obligors to (a) comply with their respective obligations, and preserve its
rights under, each of the Loan Documents and (b) maintain the existence,
priority and perfection of the Liens purported to be created under the Security
Documents.
SECTION 6.11. Certain Additional Collateral Security.
(a) Collateral Security from the Parent. In the event that
the Borrower shall at any time issue any additional quotas of its capital to
any Person (including any new third-party investor), the Borrower will cause
the holder of such quotas to execute and deliver to the Administrative Agent
such pledge agreements and other instruments as shall be necessary in order
that the Administrative Agent and the Lenders hold a valid, perfected and
enforceable first priority Lien on all of such quotas (including, evidence of
registration thereof with the Inspeccion General de Justicia) and otherwise in
form and substance satisfactory to the Administrative Agent, together with such
opinions of counsel and other evidence of authority as it may reasonably
require in connection therewith.
(b) Further Assurances. Without affecting the obligations of
the Borrower under any provision prohibiting such action hereunder, the
Borrower will, and will cause each of its Subsidiaries to, take such action
from time to time (including making appropriate filings and registrations and
executing and delivering such assignments, security agreements and other
instruments) as shall be requested by the Administrative Agent to create, in
favor of the Administrative Agent and each of the Lenders (except in the case
of real and tangible personal property located in Argentina but outside of the
Federal Capital of Buenos Aires, which shall be in favor of Chase alone),
perfected security interests and Liens in all of the Covered Property of the
Borrower and each of its Subsidiaries. Without limiting the generality of the
foregoing:
(i) from time to time, if the Borrower or any of its
Subsidiaries shall obtain any real property interest, including
improvements, after the Closing Date, then the Borrower
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will or, as applicable, will cause the respective Subsidiary holding
such real property interest, to execute and deliver in favor of the
Administrative Agent and the Lenders (or, in the case of any real or
tangible personal property located in Argentina but not in the Federal
Capital of Buenos Aires, in favor of Chase) a mortgage, assignment in
trust or guarantee, or other instrument (as appropriate for the
jurisdiction in which such respective real property is situated)
pursuant to which such Obligor will create a Lien upon such real
property interest (and improvements) in favor of the Administrative
Agent and the Lenders (or Chase, as the case may be) as collateral
security for the obligations of such Obligor under this Agreement or,
as applicable, under the respective Subsidiary Guarantee Agreement to
which such Obligor is a party, and will deliver such opinions of
counsel, landlords or lessors consents, notices and title insurance
policies and evidence of such registrations and filings as the
Administrative Agent shall reasonably request in connection therewith;
provided that if the Borrower or any of its Subsidiaries shall obtain
any real property interest in Argentina, including improvements, after
the Closing Date which, together with all real property interests then
subject to a security interest in favor of Chase, have an aggregate
fair market value of U.S. $5,000,000 or more (or shall make
improvements upon any existing real property interest in Argentina
resulting in the fair market value of such interest together with such
improvements being equal to an aggregate amount of U.S. $5,000,000 or
more), then (i) the mortgages, pledges or other instruments required
to be delivered above (if any) shall be created in favor of the
Administrative Agent and each Lender instead of Chase and (ii) the
Borrower will or, as applicable, will cause the respective Subsidiary
holding each real or tangible personal property interest then subject
to a security interest in favor of Chase to (A) execute and deliver
such amendments to the then existing mortgages in favor of Chase as
necessary to change the named secured party thereof to the
Administrative Agent and each Lender, which amendments shall be in
form and substance satisfactory to the Administrative Agent and its
counsel and (B) deliver such opinions of counsel, landlords or lessors
consents, notices and title insurance policies and evidence of such
registrations, filings and payment of stamp or filing taxes as the
Administrative Agent shall reasonably request in connection therewith
and take such other actions as reasonably requested by the
Administrative Agent in order to give effect to such amendments;
(ii) no later than March 31 and September 30 of each calendar
year, the Borrower will or, as applicable, will cause the respective
Subsidiary holding Covered Property (other than real property) owned
by the Borrower or any of its Subsidiaries and not then subject to a
security interest in favor of the Administrative Agent and the
Lenders, to execute and deliver in favor of the Administrative Agent
and the Lenders (or, in the case of any such property located in
Argentina but not in the Federal Capital of Buenos Aires, in favor of
Chase) a chattel mortgage, pledge agreement or other instrument (as
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appropriate for the jurisdiction in which such respective Covered
Property is situated) pursuant to which such Obligor will create a
perfected security interest and Lien upon which Covered Property
interest in favor of the Administrative Agent for the benefit of the
Administrative Agent and the Lenders (or, as applicable, in favor of
Chase) as collateral security for the obligations of such Obligor
under this Agreement or, as applicable, under the respective
Subsidiary Guarantee Agreement to which such Obligor is a party, and
will deliver such opinions of counsel and evidence of such
registrations, filings and other actions as the Administrative Agent
shall reasonably request in connection therewith;
(iii) from time to time, the Borrower will or, as
applicable, will cause the respective Subsidiary holding any real or
tangible personal property interest then subject to a security
interest in favor of Chase individually (i.e not in its capacity as
Administrative Agent) to (A) execute and deliver such amendments to
the then existing mortgages, pledges and other instruments in favor of
Chase as necessary to change the named secured party thereof to the
Administrative Agent and each Lender then party to this Agreement,
which amendments shall be in form and substance satisfactory to the
Administrative Agent and its counsel and (B) deliver to the
Administrative Agent such evidence of such registrations, filings and
payment of stamp or filing taxes as the Administrative Agent shall
reasonably request in connection therewith and take such other actions
as reasonably requested by the Administrative Agent in order to give
effect to such amendments, provided that none of the Obligors shall be
required to take any such action unless either (1) the historic cost
of the Covered Property then subject to a security interest in favor
of Chase in its individual capacity exceeds either (x) 20% of the
aggregate historic cost of all of the Covered Property subject to the
Liens of the Security Documents or (y) 75% of Chase's then outstanding
Loans, or (2) the Required Lenders request that such amendments be
made; and
(iv) from time to time, the Borrower will or, as
applicable, will cause the respective Subsidiary holding any real or
tangible personal property interest then subject to a security
interest in favor of the Administrative Agent and each Lender to (A)
execute and deliver such amendments to the then existing mortgages,
pledges and other instruments in favor of the Administrative Agent and
each Lender as necessary to change the named secured parties thereof
to reflect each Lender then party to this Agreement, which amendments
shall be in form and substance satisfactory to the Administrative
Agent and its counsel and (B) deliver to the Administrative Agent such
evidence of such registrations, filings and payment of stamp or filing
taxes as the Administrative Agent shall reasonably request in
connection therewith and take such other actions as reasonably
requested by the Administrative Agent in order to give effect to such
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amendments, provided that none of the Obligors shall be required to
take any such action unless either (1) the Administrative Agent has
notified the Borrower that the syndication Commitments under this
Agreement has been completed, or (2) the Required Lenders request that
such amendments be made.
ARTICLE VII
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the
principal of and interest on each Loan and all fees payable hereunder have been
paid in full and all Letters of Credit have expired or terminated and all LC
Disbursements shall have been reimbursed, the Borrower covenants and agrees
with the Lenders that:
SECTION 7.01. Indebtedness. The Borrower will not, nor will
it permit any of its Subsidiaries to, create, incur, assume or permit to exist
any Indebtedness, except:
(a) Indebtedness created hereunder, including Indebtedness in
respect of Incremental Facility Loans;
(b) Indebtedness existing on the date hereof and set forth in
Part A of Schedule III (excluding, however, following the making of
the initial Loans hereunder, the Indebtedness to be repaid with the
proceeds of such Loans, as indicated on Schedule II), and any
extension, renewal or refinancing thereof, provided that (i) any such
extension, renewal or replacement does not increase the principal
amount being financed thereby, (ii) the Average Life to Maturity of
the Indebtedness so extended, renewed or refinanced shall not be
shorter than the Average Life to Maturity of the Indebtedness being
extended, renewed or refinanced, (iii) at the time of such extension,
renewal or refinancing, and after giving effect thereto, no Default
shall have occurred and be continuing and (iv) the terms and
conditions of such Indebtedness as so extended, renewed or refinanced
(other than in respect of the rate of interest, which shall not be so
restricted) are no less favorable to the Borrower, the Lenders and the
Administrative Agent than the terms and conditions of this Agreement
and the other Loan Documents;
(c) Indebtedness of any Subsidiary to the Borrower or any
other Subsidiary;
(d) Guarantees by the Borrower of Indebtedness of any
Subsidiary and by any Subsidiary of Indebtedness of the Borrower or
any other Subsidiary;
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(e) Indebtedness of the Borrower or any Subsidiary incurred
to finance the acquisition, construction or improvement of any fixed
or capital assets, including Capital Lease Obligations and any
Indebtedness assumed in connection with the acquisition of any such
assets or secured by a Lien on any such assets prior to the
acquisition thereof, and extensions, renewals and replacements of any
such Indebtedness that do not increase the outstanding principal
amount thereof; provided that (i) such Indebtedness is incurred prior
to or within 90 days after such acquisition or the completion of such
construction or improvement and (ii) the aggregate principal amount of
Indebtedness permitted by this clause (e) shall not exceed U.S.
$10,000,000 at any time outstanding; and
(f) other Indebtedness in an aggregate principal amount not
exceeding U.S. $7,500,000 at any time outstanding; provided that the
aggregate principal amount of Indebtedness of the Borrower's
Non-Material Subsidiaries permitted by this clause (f) shall not
exceed U.S. $2,000,000 at any time outstanding.
SECTION 7.02. Liens. The Borrower will not, nor will it
permit any of its Subsidiaries to, create, incur, assume or permit to exist any
Lien on any tangible or intangible property or asset now owned or hereafter
acquired by it, or assign or sell any income or revenues or rights in respect
of any thereof, except:
(a) Liens created pursuant to the Security Documents;
(b) Permitted Encumbrances;
(c) any Lien on any property or asset of the Borrower or any
of its Subsidiaries existing on the date hereof and set forth in Part
B of Schedule IV (excluding, however, following the making of the
initial Loans hereunder, Liens securing Indebtedness to be repaid with
the proceeds of such Loans, as indicated on Schedule IV); provided
that (i) no such Lien shall extend to any other property or asset of
the Borrower or any of its Subsidiaries and (ii) any such Lien shall
secure only those obligations which it secures on the date hereof (and
any extensions, renewals or refinancings thereof that comply with the
requirements of Section 7.01(b)); and
(d) Liens on fixed or capital assets acquired, constructed or
improved by the Borrower or any Subsidiary; provided that (i) such
security interests secure Indebtedness permitted by clause (e) of
Section 7.01, (ii) such security interests and the Indebtedness
secured thereby are incurred prior to or within 90 days after such
acquisition or the completion of such construction or improvement,
(iii) the Indebtedness secured thereby
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does not exceed the cost of acquiring, constructing or improving such
fixed or capital assets and (iv) such security interests shall not
apply to any other property or assets of the Borrower or any
Subsidiary.
SECTION 7.03. Fundamental Changes; Lines of Business.
(a) Fundamental Changes. The Borrower will not, nor will it
permit any of its Subsidiaries to, merge into or consolidate with any other
Person, or permit any other Person to merge into or consolidate with it, or
sell, transfer, lease or otherwise Dispose of (in one transaction or in a
series of transactions) any of its assets, or any of the capital stock (or
quotas, as the case may be) of any of its Subsidiaries (in each case, whether
now owned or hereafter acquired), or liquidate or dissolve, except that, if at
the time thereof and immediately after giving effect thereto no Default shall
have occurred and be continuing
(i) any Subsidiary may merge into the Borrower in a
transaction in which the Borrower is the surviving corporation,
provided that if any such merger shall be between a Subsidiary
Guarantor and a Subsidiary not a Subsidiary Guarantor, and such
Subsidiary Guarantor is not the continuing or surviving corporation,
then the continuing or surviving corporation shall have assumed all of
the obligations of such Subsidiary Guarantor hereunder and under the
other Loan Documents,
(ii) any Subsidiary may merge into any Subsidiary in a
transaction in which the surviving entity is a Subsidiary,
(iii) any Subsidiary may Dispose of its assets to the
Borrower or to another Subsidiary,
(iv) the Borrower or any of its Subsidiaries may Dispose of
assets relating to any Paging Business (or the capital stock or
quotas, as the case may be, of any of its Subsidiaries that owns such
assets), and
(v) the Borrower and its Subsidiaries (x) may Dispose of
inventory and equipment in the ordinary course of business, (y) may
Dispose of worn-out or obsolete inventory, equipment and other
property no longer used or useful in its business, so long as the
aggregate amount thereof Disposed of in any single fiscal year shall
not exceed U.S. $3,000,000 and (z) may otherwise Dispose of inventory,
equipment and other property, provided that, in the case of this
clause (z), (A) at least 85% of the consideration therefor is in the
form of cash, (B) the Net Cash Payments thereof are applied to the
prepayments of the Loans and reduction of the Commitments to the
extent
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required under Section 2.09(b)(iii) and (C) the aggregate fair market
value of all such assets Disposed of by the Borrower and its
Subsidiaries after the Closing Date shall not exceed U.S. $10,000,000.
(b) Lines of Business. The Borrower will not, nor will it
permit any of its Subsidiaries to, engage to any material extent in any
business other than businesses of the type conducted, or contemplated to be
conducted in the Information Memorandum, by the Borrower and its Subsidiaries
on the date of execution of this Agreement and businesses reasonably related
thereto.
SECTION 7.04. Investments. The Borrower will not, nor will
it permit any of its Subsidiaries to, make or permit to remain outstanding any
Investments except:
(a) Investments outstanding on the date hereof and identified
in Part B of Schedule VII;
(b) operating deposit accounts with banks;
(c) Permitted Investments and Disposition Investments
received in connection with any Disposition permitted under Section
7.03(a)(v)(z), so long as each such Disposition Investment shall have
been delivered to the Administrative Agent to be held as collateral
security by the Administrative Agent pursuant to the Security
Documents;
(d) Investments by the Borrower and its Subsidiaries in the
Borrower and its Subsidiaries;
(e) Hedging Agreements entered into in the ordinary course of
the Borrower's financial planning and not for speculative purposes;
(f) Investments to finance acquisitions of spectrum not
prohibited under this Agreement, provided that such Investments in
excess of U.S. $2,000,000 in the aggregate shall require the prior
written consent of the Required Lenders except to the extent any such
Investment is made pursuant to a purchase of capital stock of the
holder of the spectrum and investments are made in the Equity Capital
of the Borrower pursuant to the Capital Subscription Agreement in an
aggregate amount equal to the portion of the purchase price thereof in
excess of U.S. $2,000,000 (it being understood that such investments
in the Equity Capital of the Borrower are in addition to the amounts
of Equity Capital required pursuant to Section 7.08(f)); and
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<PAGE> 86
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(g) additional Investments up to but not exceeding U.S.
$3,000,000 in the aggregate; provided that Investments in excess of
U.S. $3,000,000 in the aggregate shall require the prior written
consent of the Required Lenders except to the extent investments are
made in the Equity Capital of the Borrower pursuant to the Capital
Subscription Agreement in an aggregate amount equal to the portion of
the additional Investment in excess of U.S. $3,000,000 (it being
understood that such investments in the Equity Capital of the Borrower
are in addition to the amounts of Equity Capital required pursuant to
Section 7.08(f)).
SECTION 7.05. Restricted Payments. The Borrower will not,
nor will it permit any of its Subsidiaries to, declare or make, or agree to pay
or make, directly or indirectly, any Restricted Payment, except that (A) the
Borrower may declare and pay dividends with respect to its quotas payable
solely in additional quotas, and (B) the Borrower may make Restricted Payments
pursuant to and in accordance with stock option plans or other benefit plans
for management or employees of the Borrower and its Subsidiaries, so long as
the aggregate amount of Restricted Payments under this clause (B) shall not
exceed U.S. $5,000,000 in the aggregate during the term of this Agreement.
Nothing herein shall be deemed to prohibit the payment of
dividends by any Subsidiary of the Borrower to the Borrower or to any other
Subsidiary of the Borrower.
SECTION 7.06. Transactions with Affiliates. The Borrower
will not, nor will it permit any of its Subsidiaries to, sell, lease or
otherwise transfer any property or assets to, or purchase, lease or otherwise
acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except (a) transactions in the
ordinary course of business at prices and on terms and conditions not less
favorable to the Borrower or such Subsidiary than could be obtained on an
arm's-length basis from unrelated third parties, (b) transactions between or
among the Borrower and its wholly-owned Subsidiaries not involving any other
Affiliate and (c) any Restricted Payment permitted by Section 7.05.
SECTION 7.07. Restrictive Agreements. The Borrower will not,
and will not permit any of its Subsidiaries to, directly or indirectly, enter
into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon (a) the ability of the
Borrower or any Subsidiary to create, incur or permit to exist any Lien upon
any of its property or assets, or (b) the ability of any Subsidiary to pay
dividends or other distributions with respect to any shares of its capital
stock or quotas or to make or repay loans or advances to the Borrower or any
Subsidiary or to Guarantee Indebtedness of the Borrower or any Subsidiary;
provided that (i) the foregoing shall not apply to restrictions and conditions
imposed by law or by this Agreement, (ii) the foregoing shall not apply to
restrictions and conditions existing on the
Credit Agreement
<PAGE> 87
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date hereof identified on Schedule V (but shall apply to any extension or
renewal of, or any amendment or modification expanding the scope of, any such
restriction or condition), (iii) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating to the sale of a
Subsidiary pending such sale, provided such restrictions and conditions apply
only to the Subsidiary that is to be sold and such sale is permitted hereunder,
(iv) clause (a) of the foregoing shall not apply to restrictions or conditions
imposed by any agreement relating to secured Indebtedness permitted by this
Agreement if such restrictions or conditions apply only to the property or
assets securing such Indebtedness and (v) clause (a) of the foregoing shall not
apply to customary provisions in leases and other contracts restricting the
assignment thereof.
SECTION 7.08. Certain Financial Covenants.
(a) Leverage Ratio. The Borrower will not permit the
Leverage Ratio to exceed the following respective ratios at any time during the
following respective periods:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
From April 1, 1999
through June 30, 1999 8.20 to 1
From July 1, 1999
through September 30, 1999 5.00 to 1
From October 1, 1999
through December 31, 1999 4.00 to 1
From January 1, 2000
and at all times thereafter 3.50 to 1
</TABLE>
(b) Interest Coverage Ratio. The Borrower will not permit
the Interest Coverage Ratio to be less than the following respective ratios at
any time during the following respective periods:
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<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
From April 1, 1999
through June 30, 1999 0.90 to 1
From July 1, 1999
through September 30, 1999 1.50 to 1
From October 1, 1999
through December 31, 1999 1.90 to 1
From January 1, 2000
through March 31, 2000 2.40 to 1
From April 1, 2000
through June 30, 2000 2.75 to 1
From July 1, 2000
and at all times thereafter 3.00 to 1
</TABLE>
(c) Capital Expenditures. Unless and until the Leverage
Ratio shall have been less than 6.00 to 1 for a period of at least two
consecutive fiscal quarters, the Borrower will not permit the aggregate amount
of Capital Expenditures by the Borrower and its Subsidiaries to exceed the
following respective amounts for the following respective periods:
<TABLE>
<CAPTION>
Period Amount
------ ------
<S> <C>
From the Closing Date
through December 31, 1998 U.S. $106,000,000
From January 1, 1999
through December 31, 1999 U.S. $42,000,000
</TABLE>
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<TABLE>
<S> <C>
From January 1, 2000
through December 31, 2000 U.S. $18,750,000
From January 1, 2001
through December 31, 2001 U.S. $18,750,000
From January 1, 2002
through December 31, 2002 U.S. $35,000,000
From January 1, 2003
through December 31, 2003 U.S. $35,000,000
From January 1, 2004
through December 31, 2004 U.S. $35,000,000
From January 1, 2005
through December 31, 2005 U.S. $35,000,000
From January 1, 2006
and at all times thereafter U.S. $35,000,000
</TABLE>
provided that the Borrower may permit the aggregate amount of Capital
Expenditures to exceed the respective amounts set forth above to the extent
that investments are made in the Equity Capital of the Borrower pursuant to the
Capital Subscription Agreement in an aggregate amount equal to such excess
amounts (it being understood that such investments in the Equity Capital of the
Borrower are in addition to the amounts of Equity Capital required pursuant to
Section 7.08(f)). If the aggregate amount of Capital Expenditures for any
fiscal year set forth in the schedule above shall be less than the amount set
forth opposite such period in the schedule above, then the shortfall shall be
added to the amount of Capital Expenditures permitted for the immediately
succeeding (but not any other) period and, for purposes hereof, the amount of
Capital Expenditures made during any period shall be deemed to have been made
first from the amount of any carryover from any previous fiscal year and last
from the permitted amount set forth in the schedule above.
(d) Minimum Subscribers. Unless and until at any time after
June 30, 1999 the Leverage Ratio shall have been less than 9.00 to 1 for a
period of at least two consecutive quarters, the Borrower will not permit the
aggregate number of Subscribers to be less than the following respective
numbers for the following respective periods:
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<TABLE>
<CAPTION>
Period Subscribers
------ -----------
<S> <C>
From July 1, 1998
through September 30, 1998 18,750
From October 1, 1998
through December 31, 1998 27,500
From January 1, 1999
through March 31, 1999 39,000
From April 1, 1999
through June 30, 1999 49,000
From July 1, 1999
through September 30, 1999 60,080
From October 1, 1999
through December 31, 1999 72,000
From January 1, 2000
through March 31, 2000 82,000
From April 1, 2000
through June 30, 2000 97,000
From July 1, 2000
through September 30, 2000 112,000
From October 1, 2000
through December 31, 2000 128,000
From January 1, 2001
and at all times thereafter 160,000
</TABLE>
(e) Minimum Revenues. Unless and until at any time after
June 30, 1999 the Leverage Ratio shall have been less than 9.00 to 1 for a
period of at least two consecutive quarters, the Borrower will not permit the
aggregate amount of the revenues of the Borrower and its Subsidiaries from the
operation of its network system for any period of four consecutive fiscal
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quarters ending during the following respective periods to be less than the
following respective amounts:
<TABLE>
<CAPTION>
Period Amount
------ ------
<S> <C>
From July 1, 1998
through September 30, 1998 U.S. $ 7,750,000
From October 1, 1998
through December 31, 1998 U.S. $ 14,500,000
From January 1, 1999
through March 31, 1999 U.S. $ 21,500,000
From April 1, 1999
through June 30, 1999 U.S. $ 30,500,000
From July 1, 1999
through September 30, 1999 U.S. $ 39,500,000
From October 1, 1999
through December 31, 1999 U.S. $ 50,000,000
From January 1, 2000
through March 31, 2000 U.S. $ 60,000,000
From April 1, 2000
through June 30, 2000 U.S. $ 71,500,000
From July 1, 2000
through September 30, 2000 U.S. $ 83,500,000
From October 1, 2000
through December 31, 2000 U.S. $ 96,500,000
From January 1, 2001
and at all times thereafter U.S. $150,000,000
</TABLE>
(f) Equity Contributions. By each of the dates set forth
below, as more particularly provided in Section 2 of the Capital Subscription
Agreement, the Parent shall have
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made investments in the Equity Capital of the Borrower in a cumulative amount
at least equal to the amount as set forth below opposite such dates (such
amounts being assumed to be inclusive of the amount of Equity Capital required
on the Closing Date pursuant to Section 5.01(m)):
<TABLE>
<CAPTION>
Date Amount
---- ------
<S> <C>
June 30, 1998 U.S. $115,500,000
December 31, 1998 U.S. $133,000,000
June 30, 1999 U.S. $140,500,000
December 31, 1999 U.S. $148,000,000
</TABLE>
SECTION 7.09. Modifications of Certain Documents. The
Borrower will not, nor will it permit any of its Subsidiaries to, consent to
any modification, supplement or waiver of any of the provisions of (a) the
Licenses or the Vendor Contract or (after the execution and delivery thereof)
the Interconnection Agreement in a manner that is materially adverse to the
Lenders or (b) the Capital Subscription Agreement without the prior written
consent of the Administrative Agent (with the approval of the Required
Lenders).
SECTION 7.10. Fiscal Year. The Borrower will not, nor will
it permit any of its Subsidiaries to change its fiscal year end from what it is
on the date hereof.
SECTION 7.11. Limitation on Optional Payments and
Modifications of Debt Instruments. The Borrower will not, nor will it permit
any of its Subsidiaries to make any optional payment or prepayment on or
redemption, defeasance or purchase of any Indebtedness (other than Indebtedness
under this Agreement), including without limitation, any Subordinated Debt, or
amend, modify or change, or consent or agree to any amendment, modification or
change to any of the terms relating to the payment or prepayment of principal
of or interest on, any such Indebtedness, other than any amendment,
modification or change which would extend the maturity or reduce the amount of
any payment of principal thereof or which would reduce the rate or extend the
date for payment of interest thereon.
Credit Agreement
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ARTICLE VIII
EVENTS OF DEFAULT
If any of the following events ("Events of Default") shall
occur:
(a) the Borrower shall fail to pay any principal of any Loan
or any reimbursement obligation in respect of any LC Disbursement when
and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan
or any fee or any other amount (other than an amount referred to in
clause (a) of this Article) payable under this Agreement or under any
other Loan Document, when and as the same shall become due and
payable, and such failure shall continue unremedied for a period of
five or more days;
(c) any representation or warranty made or deemed made by or
on behalf of any Relevant Party in or in connection with this
Agreement or any other Loan Document or any amendment or modification
hereof or thereof, or in any report, certificate, financial statement
or other document furnished pursuant to or in connection with this
Agreement or any other Loan Document or any amendment or modification
hereof or thereof, shall prove to have been incorrect in any material
respect when made or deemed made;
(d) the Borrower shall fail to observe or perform any
covenant, condition or agreement contained in Section 6.02, 6.03 (with
respect to the Borrower's existence), 6.08 or 6.09 or in Article VII;
(e) any Relevant Party shall fail to observe or perform any
covenant, condition or agreement contained in this Agreement (other
than those specified in clause (a), (b) or (d) of this Article) or any
other Loan Document and such failure shall continue unremedied for a
period of 30 or more days after notice thereof from the Administrative
Agent (given at the request of any Lender) to the Borrower;
(f) any Relevant Party shall fail to make any payment
(whether of principal or interest and regardless of amount) in respect
of any of its other Indebtedness (or
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obligations in respect of one or more Hedging Agreements) in an
aggregate principal amount exceeding U.S. $3,000,000, when and as the
same shall become due and payable;
(g) any event or condition occurs that results in any such
other Indebtedness (or obligations in respect of one or more Hedging
Agreements) becoming due prior to its scheduled maturity or that
enables or permits (with or without the giving of notice, the lapse of
time or both) the holder or holders of any such other Indebtedness or
obligations or any trustee or agent on its or their behalf to cause
any such other Indebtedness or obligations to become due, or to
require the prepayment, repurchase, redemption or defeasance thereof,
prior to its scheduled maturity; provided that this clause (g) shall
not apply to secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such
Indebtedness;
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of any Relevant Party or its
debts, or of a substantial part of its assets, under any Federal,
state or foreign bankruptcy, insolvency, receivership or similar law
now or hereafter in effect or (ii) the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for
such Relevant Party or for a substantial part of its assets, and, in
any such case, such proceeding or petition shall continue undismissed,
or an order or decree approving or ordering any of the foregoing shall
be entered and continue unstayed and in effect, for a period of 90 or
more days;
(i) any Relevant Party shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or
other relief under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect,
(ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in clause (h)
of this Article, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar
official for any Relevant Party or for a substantial part of its
assets, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general
assignment for the benefit of creditors or (vi) take any action for
the purpose of effecting any of the foregoing;
(j) any Relevant Party shall become unable, admit in writing
its inability or fail generally to pay its debts as they become due;
(k) one or more judgments for the payment of money in an
aggregate amount in excess of U.S. $3,000,000 shall be rendered
against any Relevant Party or any
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combination thereof and the same shall remain undischarged for a
period of 30 consecutive days during which execution shall not be
effectively stayed, or any action shall be legally taken by a judgment
creditor to attach or levy upon any assets of any Relevant Party to
enforce any such judgment;
(l) a reasonable basis shall exist for the assertion against
the Borrower or any of its Subsidiaries, or any predecessor in
interest of the Borrower or any of its Subsidiaries or Affiliates, of
(or there shall have been asserted against the Borrower or any of its
Subsidiaries) any claims or liabilities, whether accrued, absolute or
contingent, based on or arising from the generation, storage,
transport, handling or disposal of Hazardous Substances by the
Borrower or any of its Subsidiaries, Affiliates or predecessors that,
in the judgment of the Required Lenders, are reasonably likely to be
determined adversely to the Borrower or any of its Subsidiaries, and
the amount thereof (either individually or in the aggregate) is
reasonably likely to have a Material Adverse Effect (insofar as such
amount is payable by the Borrower or any of its Subsidiaries but after
deducting any portion thereof that is reasonably expected to be paid
by other creditworthy Persons jointly and severally liable therefor);
(m) the Liens created by the Security Documents shall at any
time not constitute a valid and perfected Lien on the collateral
intended to be covered thereby (to the extent perfection by filing,
registration, recordation or possession is required herein or therein)
in favor of the Administrative Agent (or in the case of real or
tangible personal property located in Argentina but outside the
Federal Capital of Buenos Aires, in favor of Chase), free and clear of
all other Liens (other than Liens permitted under Section 7.02 or
under the respective Security Documents), or, except for expiration in
accordance with its terms, any of the Security Documents or any
guarantee under this Agreement shall for whatever reason be terminated
or cease to be in full force and effect, or the enforceability thereof
shall be contested by any Obligor;
(n) any Governmental Authority shall take any action to
condemn, seize, nationalize or appropriate any substantial portion of
the property of the Borrower (either with or without payment of
compensation) or shall take any action that, in the reasonable opinion
of the Lenders, that materially restricts or limits the ability of the
Borrower to conduct its business in accordance with its business plan
or materially adversely affects the ability of the Borrower to perform
its obligations under the Loan Documents; or the Borrower shall be
prevented from exercising normal control over all or a substantial
part of its property (and the same shall continue for 30 or more
days);
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(o) any License shall be revoked, modified, canceled or
expire by its terms and not renewed, if the effect thereof,
individually or in the aggregate, is in the judgment of the Required
Lenders reasonably likely to have a Material Adverse Effect; or the
Government of Argentina, or any agency or political subdivision
thereof, shall promulgate or declare effective any law, rule or
regulation that, in the opinion of the Required Lenders, is reasonably
likely to have a Material Adverse Effect;
(p) a Material Adverse Effect on the ability of the Borrower
to provide interconnection service pursuant to the Interconnection
Agreement shall occur and be continuing for a period of more than 45
consecutive days, or the enforceability of the Interconnection
Agreement shall be contested and such contest is reasonably likely to
result in a Material Adverse Effect;
(q) Argentina or any competent authority thereof shall (i)
declare a moratorium on the payment of indebtedness by Argentina or
any governmental agency or authority thereof or corporations therein
or (ii) impose material restrictions on the ability to convert
Argentine pesos to U.S. Dollars or to transfer U.S. Dollars outside
of Argentina; or
(r) the Parent Shareholder or the Parent shall default in the
performance of their obligations contained in the Capital Subscription
Agreement (unless, in the case of such default by the Parent, the
Parent Shareholder contributes the defaulted amount to the Borrower
within 10 days of such default);
then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either
or both of the following actions, at the same or different times: (i) terminate
the Commitments, and thereupon the Commitments shall terminate immediately, and
(ii) declare the Loans then outstanding to be due and payable in whole (or in
part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the principal of
the Loans so declared to be due and payable, together with accrued interest
thereon and all fees and other obligations of the Borrower hereunder, shall
become due and payable immediately, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower; and
in case of any event with respect to the Borrower described in clause (h) or
(i) of this Article, the Commitments shall automatically terminate and the
principal of the Loans then outstanding, together with accrued interest thereon
and all fees and other obligations of the Borrower hereunder, shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower.
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ARTICLE IX
THE ADMINISTRATIVE AGENT
Each of the Lenders and the Issuing Lender hereby irrevocably
appoints the Administrative Agent as its agent hereunder and under the other
Loan Documents and authorizes the Administrative Agent to take such actions on
its behalf and to exercise such powers as are delegated to the Administrative
Agent by the terms hereof or thereof, together with such actions and powers as
are reasonably incidental thereto.
The Person serving as the Administrative Agent hereunder shall
have the same rights and powers in its capacity as a Lender as any other Lender
and may exercise the same as though it were not the Administrative Agent, and
such Person and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrower or any Subsidiary or
other Affiliate thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or
obligations except those expressly set forth herein and in the other Loan
Documents. Without limiting the generality of the foregoing, (a) the
Administrative Agent shall not be subject to any fiduciary or other implied
duties, regardless of whether a Default has occurred and is continuing, (b) the
Administrative Agent shall not have any duty to take any discretionary action
or exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby or by the other Loan Documents that the
Administrative Agent is required to exercise in writing by the Required
Lenders, and (c) except as expressly set forth herein and in the other Loan
Documents, the Administrative Agent shall not have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to
the Borrower or any of its Subsidiaries that is communicated to or obtained by
the bank serving as Administrative Agent or any of its Affiliates in any
capacity. The Administrative Agent shall not be liable for any action taken or
not taken by it with the consent or at the request of the Required Lenders or
in the absence of its own gross negligence or willful misconduct. The
Administrative Agent shall be deemed not to have knowledge of any Default
unless and until written notice thereof is given to the Administrative Agent by
the Borrower or a Lender, and the Administrative Agent shall not be responsible
for or have any duty to ascertain or inquire into (i) any statement, warranty
or representation made in or in connection with this Agreement or any other
Loan Document, (ii) the contents of any certificate, report or other document
delivered hereunder or thereunder or in connection herewith or therewith, (iii)
the performance or observance of any of the covenants, agreements or other
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terms or conditions set forth herein or therein, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article V or elsewhere herein or
therein, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by
telephone or telex and believed by it to be made by the proper Person, and
shall not incur any liability for relying thereon. The Administrative Agent
may consult with legal counsel (who may be counsel for the Borrower),
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this paragraph, the Administrative Agent
may resign at any time by notifying the Lenders, the Issuing Lender and the
Borrower. Upon any such resignation, the Required Lenders shall have the
right, in consultation with the Borrower, to appoint a successor. If no
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Administrative
Agent gives notice of its resignation, then the retiring Administrative Agent
may, on behalf of the Lenders and the Issuing Lender, appoint a successor
Administrative Agent which shall be a bank of international recognition with an
office in New York, New York, or an Affiliate of any such bank. Upon the
acceptance of its appointment as Administrative Agent hereunder by a successor,
such successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. The fees payable by the Borrower to a successor Administrative
Agent shall be the same as those payable to its predecessor unless otherwise
agreed between the Borrower and such successor. After the Administrative
Agent's resignation hereunder, the provisions of this Article and Section 10.03
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and
without reliance upon the Administrative Agent or any other Lender and based on
such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
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information as it shall from time to time deem appropriate, continue to make
its own decisions in taking or not taking action under or based upon this
Agreement, any other Loan Document or any related agreement or any document
furnished hereunder or thereunder.
Except as otherwise provided in Section 10.02(b) with respect
to this Agreement, the Administrative Agent may, with the prior consent of the
Required Lenders (but not otherwise), consent to any modification, supplement
or waiver under any of the Loan Documents, provided that, without the prior
consent of each Lender, neither the Administrative Agent nor Chase shall
(except as provided herein or in the Security Documents) release any collateral
or otherwise terminate any Lien under any Security Document providing for
collateral security, agree to additional obligations being secured by such
collateral security (unless the Lien for such additional obligations shall be
junior to the Lien in favor of the other obligations secured by such Security
Document, in which event the Administrative Agent may consent to such junior
Lien provided that it obtains the consent of the Required Lenders thereto),
alter the relative priorities of the obligations entitled to the benefits of
the Liens created under the Security Documents or release any guarantor under
any Security Document from its guarantee obligations thereunder, except that no
such consent shall be required, and the Administrative Agent (or Chase, in the
case of real property located in Argentina) is hereby authorized, to release
any Lien covering property (and to release any such guarantor) that is the
subject of either a Disposition permitted hereunder or a Disposition to which
the Required Lenders have consented.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Notices. Except in the case of notices and
other communications expressly permitted to be given by telephone, all notices
and other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telex or telecopy, as follows:
(a) if to the Borrower, to Nextel Argentina S.R.L., Av.
Cordoba 3012 C.P. 1187 Buenos Aires, Argentina, Attention: Managing
Director, Telephone: 54.1.962.6560, Facsimile: 54.1.961.2279; with a
copy to Nextel International, Inc., Suite 1600, 1191 Second Avenue,
Seattle, Washington 98101, U.S.A., Attention: David Rostov, Chief
Financial Officer, (Telephone No. (206) 749-8390, Telecopy No. (206)
749-8384.
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(b) if to the Administrative Agent, to The Chase Manhattan
Bank, 1 Chase Manhattan Plaza, 8th Floor, New York, New York 10081,
Attention Loan and Agency Services Group (Telecopy No. (212)
552-5658), with a copy to The Chase Manhattan Bank, 270 Park Avenue,
New York, New York 10017, Attention of Mr. Sandy McLane (Telecopy No.
(212) 270-1204);
(c) if to the Issuing Lender, to it at The Chase Manhattan
Bank, 1 Chase Manhattan Plaza, 8th Floor, New York, New York 10081,
Attention Loan and Agency Services Group (Telecopy No. (212)
552-5658); with a copy to The Chase Manhattan Bank, 270 Park Avenue,
New York, New York 10017, Attention of Mr. Sandy McLane (Telecopy No.
(212) 270-1204);
(d) if to a Lender, to it at its address (or telex or
telecopy number) set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and
other communications hereunder by notice to the other parties hereto (which
notice, in the case of any such change by a Lender, shall be given by such
Lender to the borrower and the Administrative Agent). All notices and other
communications given to any party hereto in accordance with the provisions of
this Agreement shall be deemed to have been given on the date of receipt.
SECTION 10.02. Waivers; Amendments.
(a) No Deemed Waivers; Remedies Cumulative. No failure or
delay by the Administrative Agent, the Issuing Lender or any Lender in
exercising any right or power hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent, the
Issuing Lender and the Lenders hereunder are cumulative and are not exclusive
of any rights or remedies that they would otherwise have. No waiver of any
provision of this Agreement or consent to any departure by the Borrower
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent, any Lender or the
Issuing Lender may have had notice or knowledge of such Default at the time.
(b) Amendments. Neither this Agreement nor any provision
hereof may be waived, amended or modified except pursuant to an agreement or
agreements in writing entered
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into by the Borrower and the Required Lenders or by the Borrower and the
Administrative Agent with the consent of the Required Lenders; provided that
no such agreement shall (i) increase any Commitment of any Lender, or extend
the date or decrease the amount of any scheduled reduction thereof pursuant to
Section 2.07, without the written consent of such Lender, (ii) reduce the
principal amount of any Loan or LC Disbursement or reduce the rate of interest
thereon, or reduce any fees payable hereunder, without the written consent of
each Lender affected thereby, (iii) postpone the scheduled date of payment of
the principal amount of any Loan or LC Disbursement, or any interest thereon,
or any fees payable hereunder, or reduce the amount of, waive or excuse any
such payment, or postpone the scheduled date of expiration of any Commitment,
without the written consent of each Lender affected thereby, (iv) change
Section 2.16(b), (c) or (d) in a manner that would alter the pro rata sharing
of payments required thereby, without the written consent of each Lender, (v)
change any of the provisions of this Section or the definition of the term
"Required Lenders" or any other provision hereof specifying the number or
percentage of Lenders required to waive, amend or modify any rights hereunder
or make any determination or grant any consent hereunder, without the written
consent of each Lender or (vi) release any Subsidiary Guarantor from any of its
guarantee obligations under Article III without the written consent of each
Lender; and provided further that no such agreement shall amend, modify or
otherwise affect the rights or duties of the Administrative Agent or the
Issuing Lender hereunder without the prior written consent of the
Administrative Agent or the Issuing Lender, as the case may be.
Notwithstanding the foregoing, any increase of Commitments
contemplated under Section 2.02(e)(iii) shall require only the written consent
of the Administrative Agent and any institution that is becoming a "Lender" as
contemplated thereby.
In addition, as provided in the Capital Subscription
Agreement, the Equity Holders under and as defined therein have certain rights
to consent to amendments to this Agreement.
SECTION 10.03. Expenses; Indemnity; Damage Waiver.
(a) Costs and Expenses. The Borrower shall pay (i) all
reasonable out-of-pocket expenses incurred by the Administrative Agent,
including the reasonable fees, charges and disbursements of counsel for Chase,
in connection with the syndication of the credit facilities provided for
herein, the preparation, execution, delivery and administration of this
Agreement and the other Loan Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), it being understood that
the portion of such fees, disbursements and other charges of counsel to be so
reimbursed by the Borrower shall be limited to U.S. $200,000, and
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the portion of all other expenses to be reimbursed by the Borrower shall be
limited to U.S. $50,000, (ii) all out-of-pocket expenses incurred by the
Issuing Lender in connection with the issuance, amendment, renewal or extension
of any Letter of Credit or any demand for payment thereunder, (iii) all
out-of-pocket expenses incurred by the Administrative Agent, the Issuing Lender
or any Lender, including the fees, charges and disbursements of any counsel for
the Administrative Agent, the Issuing Lender or any Lender, in connection with
the enforcement or protection of its rights in connection with this Agreement
and the other Loan Documents, including its rights under this Section, or in
connection with the Loans made or Letters of Credit issued hereunder, including
in connection with any workout, restructuring or negotiations in respect
thereof and (iv) all transfer, stamp, documentary or other similar taxes,
assessments or charges levied by any governmental or revenue authority in
respect of this Agreement or any other Loan Document or any other document
(including any court tax or other tax required to be made in connection with
any enforcement proceedings in Argentina in accordance with Article 2 of Law
No. 23,898 or otherwise) referred to herein or therein and all costs, expenses,
taxes, assessments and other charges incurred in connection with any filing,
registration, recording or perfection of any security interest contemplated by
any Security Document or any other document referred to therein.
(b) Indemnification by Borrower. The Borrower shall
indemnify the Administrative Agent, the Issuing Lender and each Lender, and
each Related Party of any of the foregoing Persons (each such Person being
called an "Indemnitee") against, and to hold each Indemnitee harmless from, any
and all losses, claims, damages, liabilities and related expenses, including
the fees, charges and disbursements of any counsel for any Indemnitee, incurred
by or asserted against any Indemnitee arising out of, in connection with, or as
a result of (i) the execution or delivery of this Agreement or any agreement or
instrument contemplated hereby, the performance by the parties hereto of their
respective obligations hereunder or the consummation of the Transactions or any
other transactions contemplated hereby, (ii) any Loan or Letter of Credit or
the use of the proceeds therefrom (including any refusal by the Issuing Lender
to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit) or (iii) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is
a party thereto; provided that such indemnity shall not, as to any Indemnitee,
be available to the extent that such losses, claims, damages, liabilities or
related expenses resulted from the gross negligence or willful misconduct of
such Indemnitee.
(c) Reimbursement by Lenders. To the extent that the
Borrower fails to pay any amount required to be paid by it to the
Administrative Agent or the Issuing Lender under paragraph (a) or (b) of this
Section, each Lender severally agrees to pay to the Administrative
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Agent or the Issuing Lender, as the case may be, such Lender's Applicable
Percentage (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount; provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the
Administrative Agent or the Issuing Lender in its capacity as such.
(d) Waiver of Consequential Damages, Etc.. To the extent
permitted by applicable law, the Borrower shall assert, and hereby waives, any
claim against any Indemnitee, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual
damages) arising out of, in connection with, or as a result of, this Agreement
or any agreement or instrument contemplated hereby, the Transactions, any Loan
or Letter of Credit or the use of the proceeds thereof.
(e) Payments. All amounts due under this Section shall be
payable promptly after written demand therefor.
SECTION 10.04. Successors and Assigns.
(a) Assignments Generally. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that the Borrower
may not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Lender (and any attempted assignment
or transfer by the Borrower without such consent shall be null and void).
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby and, to the extent expressly contemplated hereby, the
Related Parties of each of the Administrative Agent, the Issuing Lender and the
Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
(b) Assignments by Lenders. Any Lender may assign to one or
more assignees all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitments and the Loans at the
time owing to it); provided that:
(i) except in the case of an assignment to a Lender or an
Affiliate of a Lender, each of the Borrower and the Administrative
Agent (and, in the case of an assignment of all or a portion of a
Commitment or any Lender's obligations in respect of its LC Exposure,
the Issuing Lender) must give their prior written consent to such
assignment (which consent shall not be unreasonably withheld),
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(ii) except in the case of an assignment to a Lender or an
Affiliate of a Lender or an assignment of the entire remaining amount
of the assigning Lender's Commitment(s), the amount of the
Commitment(s) of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect
to such assignment is delivered to the Administrative Agent) shall not
be less than U.S. $2,500,000 unless each of the Borrower and the
Administrative Agent otherwise consent,
(iii) (A) each partial assignment of the Loans or Commitments
of any Class shall be made as an assignment of a proportionate part of
all the assigning Lender's rights and obligations under this Agreement
in respect of such Class, (B) no partial assignment of a Tranche A1
Commitment or a Tranche B1 Commitment may be made prior to the date 60
days after the Closing Date without a simultaneous assignment of a
proportionate part of the assigning Lender's Tranche A2 Commitment and
Tranche B2 Commitment, respectively, and (C) each partial assignment
of a Tranche A2 Commitment or a Tranche B2 Commitment shall be made as
an assignment of a proportionate part of the assigning Lender's
Tranche B2 Commitment and Tranche A2 Commitment, respectively,
(iv) the parties to each assignment shall execute and deliver
to the Administrative Agent an Assignment and Acceptance, together
with a processing and recordation fee of U.S. $3,500, and
(v) the assignee, if it shall not be a Lender, shall deliver
to the Administrative Agent an Administrative Questionnaire;
provided further that any consent of the Borrower otherwise required under this
paragraph shall not be required if an Event of Default under clause (h) or (i)
of Article VIII has occurred and is continuing. Upon acceptance and recording
pursuant to paragraph (d) of this Section, from and after the effective date
specified in each Assignment and Acceptance, the assignee thereunder shall be a
party hereto and, to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all of the assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to
the benefits of Sections 2.13, 2.14, 2.15 and 10.03). Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does
not comply with this paragraph shall be treated for purposes of this Agreement
as a sale by such Lender of a participation in such rights and obligations in
accordance with paragraph (e) of this Section.
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(c) Maintenance of Register by Administrative Agent. The
Administrative Agent, acting for this purpose as an agent of the Borrower,
shall maintain at one of its offices in The City of New York a copy of each
Assignment and Acceptance delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitments of, and principal
amount of the Loans and LC Disbursements owing to, each Lender pursuant to the
terms hereof from time to time (the "Register"). The entries in the Register
shall be conclusive, and the Borrower, the Administrative Agent, the Issuing
Lender and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower, the Issuing Lender and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.
(d) Effectiveness of Assignments. Upon its receipt of a duly
completed Assignment and Acceptance executed by an assigning Lender and an
assignee, the assignee's completed Administrative Questionnaire (unless the
assignee shall already be a Lender hereunder), the processing and recordation
fee referred to in paragraph (b) of this Section and any written consent to
such assignment required by paragraph (b) of this Section, the Administrative
Agent shall accept such Assignment and Acceptance and record the information
contained therein in the Register. No assignment shall be effective for
purposes of this Agreement unless it has been recorded in the Register as
provided in this paragraph.
(e) Participations. Any Lender may, without the consent of
the Borrower, the Administrative Agent or the Issuing Lender, sell
participations to one or more banks or other entities (a "Participant") in all
or a portion of such Lender's rights and obligations under this Agreement and
the other Loan Documents (including all or a portion of its Commitments and the
Loans owing to it); provided that (i) such Lender's obligations under this
Agreement and the other Loan Documents shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations and (iii) the Borrower, the Administrative Agent, the
Issuing Lender and the other Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
this Agreement and the other Loan Documents. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and the other Loan
Documents and to approve any amendment, modification or waiver of any provision
of this Agreement or any other Loan Document; provided that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the
first proviso to Section 10.02(b) that affects such Participant. Subject to
paragraph (f) of this Section, the Borrower agrees that each Participant shall
be entitled to the benefits of Sections 2.13, 2.14
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and 2.15 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this Section.
(f) Limitations on Rights of Participants. A Participant
shall not be entitled to receive any greater payment under Section 2.13 or 2.15
than the applicable Lender would have been entitled to receive with respect to
the participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Borrower's prior written
consent.
(g) Pledges. Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any such pledge or assignment to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment
of a security interest shall release a Lender from any of its obligations
hereunder or substitute any such assignee for such Lender as a party hereto.
(h) No Assignments to Borrower or Affiliates. Anything in
this Section to the contrary notwithstanding, no Lender may assign or
participate any interest in any Loan or LC Exposure held by it hereunder to the
Borrower or any of its Affiliates or Subsidiaries without the prior consent of
each Lender.
SECTION 10.05. Survival. All covenants, agreements,
representations and warranties made by the Borrower herein and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement shall be considered to have been relied upon by the other
parties hereto and shall survive the execution and delivery of this Agreement
and the making of any Loans and issuance of any Letters of Credit, regardless
of any investigation made by any such other party or on its behalf and
notwithstanding that the Administrative Agent, the Issuing Lender or any Lender
may have had notice or knowledge of any Default or incorrect representation or
warranty at the time any credit is extended hereunder, and shall continue in
full force and effect as long as the principal of or any accrued interest on
any Loan or any fee or any other amount payable under this Agreement is
outstanding and unpaid or any Letter of Credit is outstanding and so long as
the Commitments have not expired or terminated. The provisions of Sections
2.13, 2.14, 2.15, 3.03 and 10.03 and Article IX shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination
of the Letters of Credit and the Commitments or the termination of this
Agreement or any provision hereof.
SECTION 10.06. Counterparts; Integration; Effectiveness.
This Agreement may be executed in counterparts (and by different parties hereto
on different counterparts), each of which shall constitute an original, but all
of which when taken together shall constitute a single
Credit Agreement
<PAGE> 107
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contract. This Agreement and any separate letter agreements with respect to
fees payable to the Administrative Agent constitute the entire contract among
the parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, oral or written, relating to the
subject matter hereof. Except as provided in Section 5.01, this Agreement
shall become effective when it shall have been executed by the Administrative
Agent and when the Administrative Agent shall have received counterparts hereof
which, when taken together, bear the signatures of each of the other parties
hereto, and thereafter shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. Delivery of an
executed counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.
SECTION 10.07. Severability. Any provision of this Agreement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular
provision in a particular jurisdiction shall not invalidate such provision in
any other jurisdiction.
SECTION 10.08. Right of Setoff. If an Event of Default shall
have occurred and be continuing, each 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 Lender
to or for the credit or the account of the Borrower against any of and all the
obligations of the Borrower now or hereafter existing under this Agreement held
by such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement and although such obligations may be unmatured.
The rights of each Lender under this Section are in addition to other rights
and remedies (including other rights of setoff) which such Lender may have.
SECTION 10.09. Governing Law. This Agreement shall be
construed in accordance with and governed by the law of the State of New York.
SECTION 10.10. Jurisdiction, Service of Process and Venue.
(a) Submission to Jurisdiction. Each party hereto hereby
agrees that any suit, action or proceeding with respect to this Agreement, the
other Loan Documents or any judgment entered by any court in respect thereof
may be brought in the United States 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, 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
Credit Agreement
<PAGE> 108
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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.
(b) Process Agent. The Borrower 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, presently
located at 1633 Broadway, New York, New York 10019, U.S.A. (the "Process
Agent"), and the Borrower 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 the Borrower
shall not impair or affect the validity of such service or of any judgment
based thereon. The Borrower hereby further irrevocably consents to the service
of process in any suit, action or proceeding in such courts by the mailing
thereof by the Administrative Agent or any Lender by registered or certified
mail, postage prepaid, at its address set forth beneath its signature hereto.
(c) Other Service. Nothing herein shall in any way be deemed
to limit the ability of the Administrative Agent or any Lender to serve any
such writs, process or summonses in any other manner permitted by applicable
law or to obtain jurisdiction over the Borrower in such other jurisdictions,
and in such manner, as may be permitted by applicable law.
(d) Venue. The Borrower 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 Loan Document brought in the Supreme Court of the State of New York,
County of New York or in the United States District Court for the Southern
District of New York, 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.
(e) Excepcion de Arraigo. Each of the Borrower and the
Subsidiary Guarantors hereby irrevocably waives, to the fullest extent now or
hereafter permitted under the laws of Argentina or other relevant jurisdiction,
the right to demand that the Administrative Agent or any Lender post a
performance bond or guarantee (excepcion de arraigo) in any action or
proceeding initiated against the Borrower and/or its Subsidiaries in Argentina
in connection with this Agreement or the transactions contemplated hereby.
Credit Agreement
<PAGE> 109
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SECTION 10.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO
HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT
MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 10.12. No Immunity. To the extent that the Borrower
may be or become entitled, in any jurisdiction in which judicial proceedings
may at any time be commenced with respect to this Agreement or any other Loan
Document, to claim for itself or its properties or revenues any immunity from
suit, court jurisdiction, attachment prior to judgment, attachment in aid of
execution of a judgment, execution of a judgment or from any other legal
process or remedy relating to its obligations under this Agreement or any other
Loan Document, and to the extent that in any such jurisdiction there may be
attributed such an immunity (whether or not claimed), the Borrower hereby
irrevocably agrees not to claim and hereby irrevocably waives such immunity to
the fullest extent permitted by the laws of such jurisdiction.
SECTION 10.13. Judgment Currency; Foreign Exchange.
(a) Judgement Currency. This is an international loan
transaction in which the specification of U.S. Dollars and payment in New York
City is of the essence, and the obligations of the Borrower under this
Agreement to make payment to (or for the account of) a Lender in U.S. Dollars
shall not be discharged or satisfied by any tender or recovery pursuant to any
judgment expressed in or converted into any other currency or in another place
except to the extent that such tender or recovery results in the effective
receipt by such Lender in New York City of the full amount of U.S. Dollars
payable to such Lender under this Agreement. If for the purpose of obtaining
judgment in any court it is necessary to convert a sum due hereunder in U.S.
Dollars into another currency (in this Section called the "judgment currency"),
the rate of exchange that shall be applied shall be that at which in accordance
with normal banking procedures the Administrative Agent could purchase such
U.S. Dollars at the principal office of the Administrative Agent in New York
City with the judgment currency on the Business Day
Credit Agreement
<PAGE> 110
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next preceding the day on which such judgment is rendered. The obligation of
the Borrower in respect of any such sum due from it to the Administrative Agent
or any Lender hereunder or under any other Loan Document (in this Section
called an "Entitled Person") shall, notwithstanding the rate of exchange
actually applied in rendering such judgment, be discharged only to the extent
that on the Business Day following receipt by such Entitled Person of any sum
adjudged to be due hereunder in the judgment currency such Entitled Person may
in accordance with normal banking procedures purchase and transfer U.S. Dollars
to New York City with the amount of the judgment currency so adjudged to be
due; and the Borrower hereby, as a separate obligation and notwithstanding any
such judgment, agrees to indemnify such Entitled Person against, and to pay
such Entitled Person on demand, in U.S. Dollars, the amount (if any) by which
the sum originally due to such Entitled Person in U.S. Dollars hereunder
exceeds the amount of the U.S. Dollars so purchased and transferred.
(b) Bonos Externos. The Borrower agrees that in the event of
any restriction or prohibition on the convertibility or transferability of
foreign exchange in the Argentine foreign exchange market, it will, at its own
expense, pay all amounts due hereunder in Dollars through (i) the sale of Bonos
Externos of Argentina or of any other public or private bond issued in Dollars
in Argentina or (ii) any other legal mechanism for the acquisition of Dollars
in any exchange market. All costs, including any taxes, relative to such
operations to obtain Dollars will be borne by the Borrower.
SECTION 10.14. Use of English Language. This Agreement has
been negotiated and executed in the English language. All certificates,
reports, notices and other documents and communications given or delivered
pursuant to this Agreement (including any modifications or supplements hereto)
shall be in the English language, or accompanied by a certified English
translation thereof. Except in the case of laws or official communications of
Argentina, in the case of any document originally issued in a language other
than English, the English language version of any such document shall for
purposes of this Agreement, and absent manifest error, control the meaning of
the matters set forth therein.
SECTION 10.15. Headings. Article and Section headings and
the Table of Contents used herein are for convenience of reference only, are
not part of this Agreement and shall not affect the construction of, or be
taken into consideration in interpreting, this Agreement.
SECTION 10.16. Treatment of Certain Information;
Confidentiality.
Credit Agreement
<PAGE> 111
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(a) Treatment of Certain Information. The Borrower
acknowledges that from time to time financial advisory, investment banking and
other services may be offered or provided to the Borrower or one or more of its
Subsidiaries (in connection with this Agreement or otherwise) by any Lender or
by one or more subsidiaries or affiliates of such Lender and the Borrower
hereby authorizes each Lender to share any information delivered to such Lender
by the Borrower and its Subsidiaries pursuant to this Agreement, or in
connection with the decision of such Lender to enter into this Agreement, to
any such subsidiary or affiliate, it being understood that any such subsidiary
or affiliate receiving such information shall be bound by the provisions of
paragraph (b) of this Section as if it were a Lender hereunder. Such
authorization shall survive the repayment of the Loans, the expiration or
termination of the Letters of Credit and the Commitments or the termination of
this Agreement or any provision hereof.
(b) Confidentiality. Each of the Administrative Agent, the
Issuing Lender and the Lenders agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (i) to
its and its Affiliates' directors, officers, managers, employees and agents,
including accountants, legal counsel and other advisors (it being understood
that the Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such Information
confidential), (ii) to the extent requested by any regulatory authority, (iii)
to the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (iv) to any other party to this Agreement, (v) in
connection with the exercise of any remedies hereunder or under any other Loan
Document or any suit, action or proceeding relating to this Agreement or any
other Loan Document or the enforcement of rights hereunder or thereunder, (vi)
subject to an agreement containing provisions substantially the same as those
of this paragraph, to any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Agreement, (vii) with the consent of the Borrower or (viii) to the extent such
Information (A) becomes publicly available other than as a result of a breach
of this paragraph or (B) becomes available to the Administrative Agent, the
Issuing Lender or any Lender on a nonconfidential basis from a source other
than the Borrower. For the purposes of this paragraph, "Information" means all
information received from the Borrower relating to the Borrower or its
business, other than any such information that is available to the
Administrative Agent, the Issuing Lender or any Lender on a nonconfidential
basis prior to disclosure by the Borrower; provided that, in the case of
information received from the Borrower after the date hereof, such information
is clearly identified at the time of delivery as confidential. Any Person
required to maintain the confidentiality of Information as provided in this
Section shall be considered to have complied with its obligation to do so if
such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
Credit Agreement
<PAGE> 112
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
NEXTEL ARGENTINA S.R.L.
By /s/ WILLIAM S. ROBERTS
----------------------------------
Name: William S. Roberts
Title: President
LENDERS
THE CHASE MANHATTAN BANK,
individually and as Administrative
Agent
By /s/ ROBERT ANASTASIO
----------------------------------
Name: Robert Anastasio
Title: Vice President
CREDIT SUISSE FIRST BOSTON
By /s/ TODD C. MORGAN
----------------------------------
Name: Todd C. Morgan
Title: Director
By
----------------------------------
Name:
Title:
BERLINER HANDELS UND FRANKFURTER BANK
By /s/ HEIDIMARIE SKOR
----------------------------------
Name: Heidimarie Skor
Title: Vice President
Credit Agreement
<PAGE> 1
EXHIBIT 10.2
STOCK PURCHASE AGREEMENT
BY AND AMONG
NEXTEL INTERNATIONAL (PERU), LLC,
MOTOROLA INTERNATIONAL DEVELOPMENT CORPORATION,
OSCAR BENALCAZAR COZ,
NEXTEL INTERNATIONAL, INC.
AND
VALORCOM S.A.
DATED AS OF JANUARY 29, 1998
PERU STOCK PURCHASE AGREEMENT
<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
----
<S> <C> <C>
ARTICLE I - DEFINITIONS..................................................................................2
1.1 Defined Terms...............................................................................2
1.2 Other Definitional Matters..................................................................6
ARTICLE II - SALE AND PURCHASE...........................................................................6
2.1 Sale and Purchase...........................................................................6
2.2 Closing.....................................................................................9
2.3 Post Closing Adjustments...................................................................10
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF
MOTOROLA, BENALCAZAR AND THE JVC........................................................................13
3.1 Organization, Good Standing, Etc...........................................................13
3.2 Authorization, Due Execution and Binding Effect............................................14
3.3 No Approvals or Notices Required; No Conflicts With Instruments............................14
3.4 Concessions, Licenses, Permissions, Permits, Authorizations, Etc...........................14
3.5 Capitalization of the JVC and Ownership of the JVC Capital Stock...........................15
3.6 Capitalization of the JVC Subsidiaries and Ownership of the Capital
Stock of the JVC Subsidiaries..................................................................15
3.7 Financial Statements.......................................................................16
3.8 Absence of Certain Changes.................................................................16
3.9 Liabilities................................................................................18
3.10 Intercompany Transactions.................................................................18
3.11 Taxes.....................................................................................18
3.12 JVC Assets................................................................................18
3.13 Channels..................................................................................19
3.14 Contracts.................................................................................20
3.15 Claims and Legal Proceedings..............................................................20
3.16 Labor Matters.............................................................................21
3.17 Customers.................................................................................22
3.18 Applicable Laws...........................................................................22
3.19 Insurance.................................................................................23
3.20 Trademarks................................................................................23
3.21 Compliance With Environmental Laws........................................................23
3.22 Brokerage.................................................................................24
ARTICLE IV - ADDITIONAL REPRESENTATIONS AND WARRANTIES
OF MOTOROLA.............................................................................................24
4.1 Organization, Good Standing, Etc...........................................................24
4.2 Authorization, Due Execution and Binding Effect............................................24
4.3 No Approvals or Notices Required; No Conflicts With Instruments............................25
4.4 Peruvian SMR Services......................................................................25
ARTICLE V - ADDITIONAL REPRESENTATIONS AND WARRANTIES
OF BENALCAZAR...........................................................................................25
5.1 Citizenship; Residency.....................................................................25
5.2 Authorization, Due Execution and Binding Effect............................................25
</TABLE>
PERU STOCK PURCHASE AGREEMENT
-i-
<PAGE> 3
<TABLE>
<S> <C> <C>
5.3 No Approvals or Notices Required; No Conflicts With Instruments............................26
5.4 Peruvian SMR Services......................................................................26
ARTICLE VI - REPRESENTATIONS AND WARRANTIES OF NEXTEL...................................................26
6.1 Organization, Good Standing, Etc...........................................................26
6.2 Authorization, Due Execution and Binding Effect............................................27
6.3 No Approvals or Notices Required; No Conflicts With Instruments............................27
6.4 Brokerage..................................................................................27
6.5 Peruvian SMR Services......................................................................27
ARTICLE VII - FURTHER AGREEMENTS........................................................................28
7.1 Schedules..................................................................................28
7.2 Access.....................................................................................28
7.3 Management Information.....................................................................28
7.4 Advice of Claims...........................................................................29
7.5 Conduct of the Business....................................................................29
7.6 Compliance With Laws.......................................................................30
7.7 No Transfers...............................................................................30
7.8 Mastercom Name.............................................................................30
7.9 Capital Increase...........................................................................30
7.10 Nextel International Guarantee............................................................31
7.11 Other Cooperation.........................................................................31
ARTICLE VIII - CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH
PARTY...................................................................................................31
8.1 Accuracy of Representations and Warranties.................................................31
8.2 Performance of Agreement...................................................................31
8.3 Approvals and Consents.....................................................................32
8.4 Officers' Certificates.....................................................................32
8.5 Shareholders Agreement.....................................................................32
8.6 Registration Rights Agreement..............................................................32
8.7 Legal Proceedings..........................................................................32
8.8 Business Plan..............................................................................32
8.9 Division of Master Communications..........................................................32
8.10 Confidentiality, Noncompetition and Proprietary Information
Agreements.....................................................................................33
8.11 Opinion of Counsel........................................................................33
8.12 Title.....................................................................................33
8.13 Documentation Relating to the Concessions.................................................33
8.14 Third Party Consents......................................................................33
8.15 Pledge Agreements.........................................................................34
8.16 Legal Stability Agreements................................................................34
ARTICLE IX - ADDITIONAL CONDITIONS PRECEDENT TO
OBLIGATIONS OF NEXTEL...................................................................................34
9.1 Affiliate Transactions.....................................................................34
9.2 Employees, Consultants, Directors and Attorney-in-Fact of the JVC..........................34
ARTICLE X - INDEMNIFICATION AND SURVIVAL OF WARRANTIES..................................................35
10.1 Indemnification by Motorola...............................................................35
</TABLE>
PERU STOCK PURCHASE AGREEMENT
-ii-
<PAGE> 4
<TABLE>
<S> <C> <C>
10.2 Indemnification by Benalcazar.............................................................35
10.3 Indemnification by Nextel.................................................................36
10.4 Indemnification by Benalcazar of Motorola.................................................36
10.5 Secondary Indemnification by Motorola of Benalcazar.......................................36
10.6 Procedure.................................................................................37
10.7 Survival..................................................................................37
10.8 Security for Secondary Indemnification Rights.............................................38
ARTICLE XI - TERMINATION................................................................................38
11.1 Termination...............................................................................38
11.2 Effect of Termination.....................................................................39
ARTICLE XII - GENERAL...................................................................................39
12.1 Expenses..................................................................................39
12.2 Amendment.................................................................................39
12.3 Headings..................................................................................39
12.4 Applicable Law............................................................................40
12.5 Parties in Interest.......................................................................40
12.6 Dispute Resolution........................................................................40
12.7 Waivers...................................................................................41
12.8 Notices...................................................................................41
12.9 Entire Understanding......................................................................42
12.10 Counterparts.............................................................................43
</TABLE>
PERU STOCK PURCHASE AGREEMENT
-iii-
<PAGE> 5
SCHEDULES
<TABLE>
<CAPTION>
<S> <C>
3.1 Organization
3.3 JVC and JVC Subsidiaries Approvals and Conflicts
3.4 Additional Payments and Fees
3.5 Capitalization of the JVC
3.6 Capitalization of the JVC Subsidiaries
3.8 Certain Changes or Events
3.9 Undisclosed Material Liabilities
3.10 Intercompany Balances
3.11 Payments
3.12(a) Leases
3.12(b) Real Property
3.12(d) Liens
3.13 The Channels
3.14 Contracts
3.15 Claims and Legal Proceedings
3.16 Labor Matters
3.17 Customers
3.18 Applicable Laws
3.20 Intellectual Property
4.3 Motorola Approvals and Conflicts
5.3 Benalcazar Approvals and Conflicts
6.3 Nextel Approvals and Conflicts
</TABLE>
PERU STOCK PURCHASE AGREEMENT
-iv-
<PAGE> 6
<TABLE>
<CAPTION>
EXHIBITS
<S> <C>
2.1(b)(vi) Payment Schedule
2.1(b)(vii) Form of Usufruct
2.1(d) By-laws of the JVC (in Spanish and English)
3.7 Financial Statements
8.4 Form of Officers' Certificate
8.5 Form of Shareholders Agreement
8.6 Form of Registration Rights Agreement
8.10 Form of Confidentiality, Noncompetition and Proprietary Information Agreement
8.11 Form of Opinions of Counsel to Motorola, Benalcazar and the JVC
8.15 Form of Pledge Agreement
8.16 Form of Legal Stability Agreement
9.1A Form of Tower Site Lease
9.1B Form of Sales Agency Agreement
9.1C Form of Maintenance Agreement
</TABLE>
PERU STOCK PURCHASE AGREEMENT
-v-
<PAGE> 7
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made as of January
29, 1998 by and among NEXTEL INTERNATIONAL (PERU), LLC ("Nextel"), a Cayman
Islands limited liability company and indirectly wholly owned subsidiary of
Nextel International, Inc., a Washington corporation ("Nextel International"),
MOTOROLA INTERNATIONAL DEVELOPMENT CORPORATION, a Delaware corporation
("Motorola"), OSCAR BENALCAZAR COZ, a Peruvian citizen ("Benalcazar"), NEXTEL
INTERNATIONAL, INC. and VALORCOM S.A., a Peruvian corporation (to be renamed
Nextel del Peru S.A.) (the "JVC").
RECITALS
A. Immediately prior to the transactions described in this Stock
Purchase Agreement, the capital stock of the JVC is 2,000 shares of common stock
(the "JVC Common Stock"), represented by 2,000 shares of S/.1.00 each. Motorola
has subscribed for and purchased 1019 shares of the JVC Common Stock,
representing 51%, less one share, of the outstanding shares of the JVC Common
Stock. Manuel Diego Aramburu Yzaga has subscribed for and purchased one share of
the JVC Common Stock. Benalcazar has subscribed for and purchased 980 shares of
the JVC Common Stock, representing 49% of the outstanding shares of the JVC
Common Stock.
B. Each of Motorola, Benalcazar and Nextel desire to subscribe and pay
for newly issued shares of the JVC Common Stock, in each case for the
consideration and on the terms and conditions provided in this Agreement, such
that after such issuances, subscriptions and payments, the JVC Common Stock
shall be owned as follows:
<TABLE>
<S> <C>
Nextel 70.05%
Motorola 19.95%
Benalcazar 10%
</TABLE>
C. The JVC desires to purchase from Benalcazar and Benalcazar desires
to sell to the JVC (i) 64.4% of the shares of Master Communications S.A., a
Peruvian corporation ("Master Communications"), it being understood that all
references herein to Master Communications shall mean such entity following the
division referred to in Section 8.9 hereof, and (ii) 64.4% of the shares of
General Radio S.A., a Peruvian corporation ("General Radio").
D. Following consummation of the transactions set forth in this
Agreement, the JVC shall, indirectly through its direct and indirect
wholly-owned subsidiaries, Dualcom S.R. Ltda., a Peruvian limited liability
company ("Dualcom"), General Radio, Master Communications, Mastercom Trunking
S.A., a Peruvian corporation and wholly owned subsidiary of Master
Communications ("Mastercom Trunking"), and Radionet S.A., Peruvian corporation
("Radionet" and together with Dualcom, General Radio, Master Communications and
Mastercom Trunking, the "JVC Subsidiaries"), hold concession contracts granted
by the Republic of Peru ("Peru") authorizing the installation and operation of
SMR services listed in Schedule 3.13 and a license
<PAGE> 8
to use the SMR channels listed on Schedule 3.13 in certain cities in Peru (the
"Channels") and own certain other assets in Peru.
E. The parties hereto wish to install, own and operate SMR and enhanced
SMR ("ESMR") equipment and provide SMR services and ESMR services utilizing iDEN
technology in Peru through the JVC and the JVC Subsidiaries.
AGREEMENT
In consideration of the mutual promises contained herein, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINED TERMS
As used in this Agreement, the following terms shall have the following
meanings:
"Accountants" has the meaning set forth in Section 2.3(d).
"Adjusted Motorola Net Rental Radio Expenditures" has the meaning set
forth in Section 2.3(f)(ii).
"Affiliate" of any Person (the "Subject") means any other Person which,
directly or indirectly, Controls or is Controlled by or is under common Control
with the Subject. For purposes of this Agreement, the JVC and the JVC
Subsidiaries shall not be deemed an Affiliate of any of the other parties
hereto.
"Agreement" has the meaning set forth in the introductory paragraph.
"Applied Channels" has the meaning set forth in Section 3.13.
"Benalcazar" has the meaning set forth in the introductory paragraph,
and shall include any heir or personal representative.
"Benalcazar Net Rental Radio Expenditures" has the meaning set forth in
Section 2.3(f)(i).
"Benalcazar Pledge Agreement" has the meaning set forth in Section
10.8.
"Business" means the business and activities conducted and proposed to
be conducted by the JVC and the JVC Subsidiaries, including but not limited to,
directly or indirectly, installing, owning and operating SMR services, as of the
date hereof.
- 2 -
<PAGE> 9
"Business Day" means any day other than a Saturday, a Sunday or a day
on which commercial banks in New York or Lima, Peru are authorized to close.
"Business Plan" has the meaning set forth in Section 8.8.
"Capital Increase" has the meaning set forth in Section 2.1(b).
"Channels" has the meaning set forth in the Recitals.
"Closing" has the meaning set forth in Section 2.2(a).
"Closing Balance Sheet" has the meaning set forth in Section 2.3(a)(i)
"Closing Date" has the meaning set forth in Section 2.2(a).
"Closing Indebtedness" has the meaning set forth in Section 2.3(a)(i)
"Concessions" has the meaning set forth in Section 3.4.
"Control" (including, with correlative meanings, the terms "Controlled
by" and "under common Control with"), as used with respect to any Person, means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or by contract or otherwise; provided that any
Person which together with its Affiliates owns more shares of a given company
than any other shareholder of such company (together with its Affiliates) shall
be deemed to Control such company.
"Damages" has the meaning set forth in Section 10.1.
"Disagreeing Party" has the meaning set forth in Section 2.3(a)(iii)
"Dualcom" has the meaning set forth in the Recitals.
"ESMR" has the meaning set forth in the Recitals.
"Financial Statements" has the meaning set forth in Section 3.7.
"ForEx Rate" has the meaning set forth in Section 2.1(b).
"General Radio" has the meaning set forth in the Recitals.
"ICC" has the meaning set forth in Section 12.6.
"iDEN" shall mean Motorola's proprietary integrated Digital Enhanced
Network.
"Indemnifying Party" has the meaning set forth in Section 10.6.
"Indemnitee" has the meaning set forth in Section 10.6.
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"JVC" has the meaning set forth in the introductory paragraph, and
shall include any successor corporations.
"JVC Assets" has the meaning set forth in Section 3.3.
"JVC Common Stock" has the meaning set forth in the Recitals.
"JVC Personal Property" has the meaning set forth in Section 3.12(a).
"JVC Subsidiaries" has the meaning set forth in the Recitals.
"knowledge" with respect to any Person means, with respect to the
existence or absence of a fact, matter, event or circumstance, the actual
knowledge of such Person, or if such Person is not an individual, the actual
knowledge of any director or officer of such Person or any Affiliate thereof.
"Legal Stability Agreements" means the Legal Stability Agreements
between Peru and each of the JVC, Nextel and Motorola substantially in the form
of Exhibit 8.16.
"Lien" means, with respect to any property or asset, any mortgage,
lien, pledge, deed of trust, usufruct, charge, security interest, encumbrance or
other adverse claim of any kind with respect to such property or asset.
"Master Communications" has the meaning set forth in the Recitals.
"Mastercom Trunking" has the meaning set forth in the Recitals.
"Motorola" has the meaning set forth in the introductory paragraph, and
shall include any successor corporations.
"Motorola Net Rental Radio Expenditures" has the meaning set forth in
Section 2.3(f)(i).
"Motorola Pledge Agreement" has the meaning set forth in Section 10.8.
"MTC" means the Ministry of Transport, Communications, Housing and
Construction of Peru or any successor regulatory body of the Peruvian government
responsible for oversight of the telecommunications industry in Peru.
"Net Rental Radio Expenditures" means cash expenditures on rental radio
inventory purchased less revenue realized on rental radio inventory, all during
the relevant period and as reviewed by Deloitte & Touche, LLP.
"Nextel" has the meaning set forth in the introductory paragraph, and
shall include any successor thereto or assignee thereof.
"Nextel International" has the meaning set forth in the introductory
paragraph, and shall include any successor corporations.
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"OSIPTEL" means the Supervisory Entity of Private Investment in
Telecommunications, or any successor regulatory entity of the Peruvian
government.
"Permitted Liens" has the meaning set forth in Section 3.12(d).
"Person" means any individual, partnership, limited liability company,
joint-stock company, firm, corporation, association, unincorporated
organization, joint venture, trust or other entity.
"Peru" has the meaning set forth in the Recitals.
"Pledge Agreements" has the meaning set forth in Section 10.8.
"Radionet" has the meaning set forth in the Recitals.
"Registration Rights Agreement" means the Registration Rights Agreement
to be entered into by the JVC, Motorola, Benalcazar and Nextel in substantially
the form attached hereto as Exhibit 8.6.
"Reserved Channels" has the meaning set forth in Section 3.13.
"Shareholders Agreement" means the Shareholders Agreement to be entered
into by the JVC, Nextel, Nextel International, Motorola and Benalcazar in
substantially the form attached hereto as Exhibit 8.5.
"SMR" means specialized mobile radio ("servicio troncalizado").
"Tax" and "Taxes" mean any and all net income, gross income, gross
receipts, sales, use, ad valorem, transfer, franchise, profits, license,
withholding, payroll, employment, excise, estimated, stamp, occupation, premium,
property, customs duty, import and other tax, fee, contribution, assessment, or
similar charge of any kind whatsoever, together with interest and penalties,
additions to the tax, and additional amounts imposed in connection with such tax
by any Tax Authority, whether U.S., Peruvian or other.
"Tax Authority" has the meaning set forth in Section 3.11.
"Tax Returns" means all returns (including information returns),
reports, estimates, elections, declarations, statements, forms, requests for
extensions of time, and other documents (including any schedule, exhibit, or any
other attachment to such documents) relating to or required to be filed with any
Tax Authority or any other Person pursuant to any federal, state or local law,
whether U.S., Peruvian or otherwise.
"Transaction Agreements" means this Agreement, the Shareholders
Agreement, the Registration Rights Agreement and the Pledge Agreements.
"U.S. GAAP" means U.S. generally accepted accounting principles.
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1.2 OTHER DEFINITIONAL MATTERS
(a) The words "this Agreement," "hereby," "herein," "hereof,"
"hereunder" and words of similar import refer to this Agreement as a whole and
not to any particular provisions of this Agreement, and the words "Article,"
"Section," "Schedule," "Exhibit" and like references are to this Agreement
unless otherwise specified.
(b) Singular and plural forms, as the case may be, of terms defined
herein have correlative meanings.
(c) Any defined term which relates to a document includes within its
definition any amendments, modifications, renewals, restatements, extensions,
supplements or substitutions which may heretofore have been or which may
hereafter be executed in accordance with the terms thereof and as may be
permitted by this Agreement.
(d) All references to "$" or "dollars" are to the legal tender currency
of the United States of America. All references to "S/." or "Nuevos Soles" are
to the legal tender currency of Peru.
ARTICLE II
SALE AND PURCHASE
2.1 SALE AND PURCHASE
In reliance on the representations, warranties and covenants contained
herein and subject to the terms and conditions hereof, simultaneously on the
Closing Date (unless a different date is specified):
(a) Transfer of JVC Common Stock. In consideration for the transactions
contemplated hereby, Motorola, Benalcazar and Manuel Diego Aramburu Yzaga agree
to make the following transfers:
(i) To Nextel. On or prior to the Closing Date, Motorola shall
transfer 620 shares of JVC Common Stock to Nextel, Manuel Diego Aramburu Yzaga
shall transfer one share of JVC Common Stock to Nextel, and Benalcazar shall
transfer 780 shares of JVC Common Stock to Nextel.
(ii) Waiver of Rights of First Refusal. Motorola, Benalcazar
or Manuel Diego Aramburu Yzaga, as the case may be, shall cause any Person who
may have rights of first refusal in connection with the sales and purchases
contemplated by clause 2.1(a)(i) above to have waived such rights.
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(b) Capital Increase. The JVC's shareholders shall approve an increase
in its capital stock for the Nuevos Soles equivalent (calculated at the Banco
Credito del Peru exchange rate for the sale of U.S. dollars as of the Closing
Date (the "ForEx Rate") of $39,800,000, effective upon the earlier of the
effectiveness of the Legal Stability Agreements and the six-month anniversary of
the Closing Date (the "Capital Increase"), which shall be subscribed and paid
for as follows:
(i) Motorola shall transfer or cause to be transferred to the
JVC 2,777,374 participaciones sociales (including certain
participaciones sociales that have been authorized but not yet formally
issued) representing all but one of the outstanding participaciones
sociales of the capital stock of Dualcom and 6,074,665 shares
(including certain shares that have been authorized but not yet
formally issued) representing all but one of the outstanding shares of
the capital stock of Radionet (such participaciones sociales of Dualcom
and shares of Radionet having an agreed upon aggregate valuation of the
Nuevos Soles equivalent (calculated at the ForEx Rate) of $4,816,000)
and the Nuevos Soles equivalent (calculated at the ForEx Rate) of
$3,144,000 in cash, and in exchange therefor the JVC shall issue
Motorola two promissory notes and each of Manuel Diego Aramburu Yzaga
and Manuel Aramburu Yrigoyen one promissory note, such four promissory
notes being in the aggregate amount of $7,960,000, automatically
convertible into shares of JVC Common Stock such that Motorola shall
own 19.95% of the capital stock of the JVC on a fully diluted basis
upon the earlier of effectiveness of the Legal Stability Agreements and
the six-month anniversary of the Closing Date; provided, that the
parties acknowledge that because certain of the participaciones
sociales of Dualcom and certain of the shares of Radionet are in the
process of being registered with the Public Registry in Peru, the
formal issuance of such participaciones sociales of Dualcom and such
shares of Radionet and the subsequent transfer thereof to the JVC shall
not be completed until immediately following such registration.
(ii) Motorola shall transfer to Radionet one participacion
social of Dualcom and shall transfer to General Radio one share of
Radionet.
(iii) Benalcazar shall transfer or cause to be transferred to
the JVC 7,889 shares representing 35.6% of the outstanding shares of
the capital stock of General Radio, less one share, and 234,888 shares
representing 35.6% of the outstanding shares of the capital stock of
Master Communications, less one share (such shares of General Radio and
Master Communications having an agreed upon valuation of the Nuevos
Soles equivalent (calculated at the ForEx Rate) of $3,980,000), and in
exchange therefor the JVC shall issue Benalcazar a promissory note in
the amount of $3,980,000 automatically convertible into shares of JVC
Common Stock such that Benalcazar shall own 10.00% of the capital stock
of the JVC on a fully diluted basis upon the earlier of effectiveness
of the Legal Stability Agreements and the six-month anniversary of the
Closing Date; in addition, Benalcazar shall transfer or cause to be
transferred to Master Communications all shares of Mastercom Trunking,
less one, that are not already owned by Master Communications.
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(iv) Benalcazar shall transfer to Radionet one share of each
of General Radio, Master Communications and Mastercom Trunking.
(v) Nextel shall transfer or cause to be transferred to the
JVC an aggregate of the Nuevos Soles equivalent (calculated at the
ForEx Rate) of $27,860,000 in cash (payable in installments in
accordance with Section 2.1(b)(vi)), and in exchange therefor the JVC
shall issue Nextel from time to time upon receipt of each installment
payment promissory notes in an aggregate amount of up to $27,860,000
automatically convertible into shares of JVC Common Stock such that,
taking into account all promissory notes issued pursuant to this clause
(v) and all additional payments required to be made pursuant to Exhibit
2.1(b)(vi), Nextel shall own 70.05% of the capital stock of the JVC on
a fully diluted basis upon the earlier of effectiveness of the Legal
Stability Agreements and the six-month anniversary of the Closing Date.
(vi) Nextel shall subscribe for one hundred percent of the
capital contribution set forth in Section 2.1(b)(v) but shall pay to
the JVC such cash on the payment schedule attached hereto as Exhibit
2.1(b)(vi); provided, however, that Nextel shall make such cash
payments prior to the dates set forth in such exhibit if the JVC
requires cash earlier, as determined by the Board of Directors of the
JVC.
(vii) Each of Radionet and General Radio agrees to set in
usufruct all shares or participaciones sociales of the JVC Subsidiaries
held by it, as applicable, in the form attached hereto as Exhibit
2.1(b)(vii) and agrees to execute the appropriate public deeds or such
other documents for the registration thereof with the relevant Public
Registry or Shareholder Registry, as the case may be.
(viii) If because of fluctuations in foreign exchange rates,
the sum of Nextel's payments to the JVC in accordance with Exhibit
2.1(b)(vi), after converting such amounts into Nuevos Soles, and the
payments and stock transfers made by Motorola and Benalcazar pursuant
to this Section 2.1(b) (such sum being referred to as the "Contributed
Capital") is greater than the authorized capital of the JVC after
giving effect to the Capital Increase, each of the parties hereto
agrees to authorize an increase in the capital of the JVC to cover such
excess and to issue without additional consideration such new share
capital of the JVC to Nextel, Motorola and Benalcazar such that after
such issuance, their relative ownership of the JVC shall be identical
to the relative ownership set forth in Section 2.1(a). If because of
fluctuations in foreign exchange rates, the Contributed Capital is less
than the authorized capital of the JVC after giving effect to the
Capital Increase, each of Motorola and Benalcazar agree, on a pro rata
basis, to transfer without additional consideration shares of Common
Stock of the JVC to Nextel such that after such transfer the relative
ownership of the JVC shall be identical to the relative ownership set
forth in Section 2.1(a).
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<PAGE> 15
(c) Sale and Purchase.
(i) Purchase by the JVC of shares of General Radio and Master
Communications. Benalcazar shall sell, deliver, transfer and convey to the JVC
14,273 shares representing 64.4% of the outstanding shares of the capital stock
of General Radio and 424,911 shares representing 64.4% of the outstanding shares
of the capital stock of Master Communications, and the JVC shall pay Benalcazar
$7,204,000 in full consideration for such shares and in full consideration for
the transfer by Benalcazar or any other shareholder of Mastercom Trunking of
shares of Mastercom Trunking to Master Communications. Immediately following
such sale, the JVC shall own all but one share of the outstanding capital stock
of General Radio and all but one share of the outstanding capital stock of
Master Communications, which in turn owns 100% of the outstanding capital stock
of Mastercom Trunking, less one share.
(ii) Waiver of Rights of First Refusal. Benalcazar shall cause
any Person who may have rights of first refusal in connection with each of the
sales and purchases contemplated by clause (i) above to have waived such rights
to the satisfaction of the other parties hereto.
(d) JVC Corporate Governance. On or prior to the Closing Date,
Motorola, Nextel and Benalcazar shall cause the JVC to amend its By-laws to be
substantially in the Spanish language version of the form attached hereto as
Exhibit 2.1(d), to be filed with the competent commercial registry, and such
amended By-laws shall be the By-laws of the JVC after the Closing Date and, to
the extent possible, the Shareholders' Agreement substantially in the form
attached hereto as Exhibit 8.5.
(e) Taxes. Benalcazar shall pay any and all Taxes relating to the
income to Benalcazar resulting from the sale by Benalcazar of shares of the
capital stock of Master Communications and General Radio to the JVC.
2.2 CLOSING
(a) The closing of the transactions contemplated by Section 2.1 (the
"Closing") shall take place on January 29, 1998 or on another date mutually
agreed by the parties, following satisfaction or waiver of the conditions to the
Closing set forth in Articles IX and X (the "Closing Date") at the offices of
Nextel International in Seattle, Washington or at such other place or time as
the parties hereto may agree.
(b) On or promptly after the Closing Date:
(i) Nextel, Motorola and Benalcazar shall pay to the JVC the
amounts referred to in Section 2.1(b);
(ii) The JVC shall deliver to Benalcazar the cash purchase
price referred to in Section 2.1(c) in accordance with the written instructions
of Benalcazar delivered to the parties hereto at least two business days prior
to Closing;
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(iii) The JVC shall: (A) register or cause the transfers
referred to in Section 2.1(a) to be registered in the JVC's stock registry and
transfer book and (B) issue and deliver to Nextel, Motorola and Benalcazar the
promissory notes referred to in Section 2.1(b);
(iv) Benalcazar shall (A) duly register or cause due
registration of the sales and transfers referred to above in General Radio's,
Master Communications' and Mastercom Trunking's stock registry and transfer
books; and (B) duly issue or cause due issuance of the share certificates
representing such sales and transfers;
(v) Motorola shall (A) duly register or cause due registration
of the transfers referred to above in Radionet's and Dualcom's stock registry
and transfer books; and (B) duly issue or cause due issuance of the share
certificates for Radionet representing such transfers;
(vi) Benalcazar, Nextel and Motorola shall hold a unanimous
shareholders assembly of the JVC in order to approve the Capital Increase and
the amended and restated by-laws of the JVC;
(vii) The JVC shall execute a public deed of by-laws amendment
and shall cause such public deed to be filed at the Public Registries of Lima;
(viii) Each of Motorola, Benalcazar and the JVC shall enter
into the Pledge Agreements in the forms attached hereto as Exhibit 8.15;
(ix) Each of Benalcazar, Motorola and Nextel shall endorse and
deliver any promissory notes issued pursuant to Section 2.1(b) to the JVC for
purposes of subscribing and paying for the Capital Increase; and
(x) Each of Radionet and General Radio shall set in usufruct
all shares or participaciones sociales of the JVC Subsidiaries held by it, as
applicable, in the form attached hereto as Exhibit 2.1(b)(vii), and Dualcom
shall execute the appropriate public deeds for the registration thereof with the
relevant Public Registry.
(c) Promptly after the later to occur of the effectiveness of the Legal
Stability Agreements and the six-month anniversary of the Closing Date, the JVC
shall execute a public deed of capital increase with respect to the Capital
Increase and shall cause such public deed to be filed at the Public Registries
of Lima, and promptly after due registration of the Capital Increase with the
Public Registries of Lima, the JVC shall issue share certificates representing
the new shares referred to in Section 2.1(b).
2.3 POST-CLOSING ADJUSTMENTS
(a) Closing Balance Sheet
(i) As promptly as practicable, but no later than 30 days
after the Closing Date, the JVC shall cause Deloitte & Touche LLP to provide to
Nextel, Motorola and Benalcazar a statement (the "Closing Balance Sheet") as to
whether the JVC and the JVC Subsidiaries, taken
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as a whole, had a net current account deficit (current assets less current
liabilities) or long-term liabilities, after taking into account appropriate
reserves against current assets of the JVC and the JVC Subsidiaries, taken as a
whole, (together, "Closing Indebtedness") as of the Closing Date, together with
detailed support with respect to the JVC and each JVC Subsidiary for such
calculation.
(ii) To the extent that the Closing Balance Sheet indicates
that there is Closing Indebtedness, Motorola shall be liable to pay to the JVC
any such Closing Indebtedness that relates to Radionet and Dualcom and
Benalcazar shall be liable to pay to the JVC any such Closing Indebtedness that
relates to Master Communications, Mastercom Trunking and General Radio; provided
that Motorola and Benalcazar shall each be jointly and severally liable to pay
to the JVC any such Closing Indebtedness, which repayments shall be made in cash
within 20 days of the JVC's delivery of the Closing Balance Sheet; provided that
any Closing Indebtedness that is being disputed in accordance with Sections
2.3(a)(iii) and (iv) need not be repaid until settlement of such dispute, but
only to the extent of such dispute. Any such repayments shall be increased to
offset any taxes due as a result of such repayment.
(iii) If any of Nextel, Motorola or Benalcazar disagrees with
Deloitte & Touche LLP's calculation of the Closing Indebtedness (the
"Disagreeing Party"), the Disagreeing Party may, within 15 days of the delivery
of the Closing Balance Sheet, deliver a notice to the JVC disagreeing with such
calculation and setting forth its calculation. Any such notice of disagreement
shall specify those items or amounts as to which the Disagreeing Party
disagrees, and such party shall be deemed to have agreed with all other items
and amounts contained in the Closing Balance Sheet and the calculation of the
Closing Indebtedness delivered pursuant to Section 2.3(a)(ii).
(iv) If a notice of disagreement shall be delivered by the
Disagreeing Party pursuant to Section 2.3(a)(iii), the Disagreeing Party and the
JVC shall, during the 15 days following such delivery, use their best efforts to
reach agreement on the disputed items or amounts in order to determine, as may
be required, the amount of the Closing Indebtedness, which amount shall be
between the amount shown in the JVC's calculations delivered pursuant to Section
2.3(a)(ii) and the amount shown in the Disagreeing Party's calculation delivered
pursuant to Section 2.3(a)(iii). If, during such period, the Disagreeing Party
and the JVC are unable to reach such agreement, they shall promptly thereafter
cause an independent accounting firm of internationally recognized standing
reasonably satisfactory to the Disagreeing Party and the JVC (which shall not
have any material relationship with any such entities or any of their Affiliates
(the "Accountants")), promptly to review this Agreement and the disputed items
or amounts for the purpose of calculating the Closing Indebtedness. The JVC,
Motorola and Benalcazar shall provide all detailed documentation necessary to
support the computation underlying the JVC's calculation of the Closing
Indebtedness. In making such calculation, the Accountants shall consider only
those items or amounts in the Closing Balance Sheet or the JVC's calculation of
the Closing Indebtedness as to which the Disagreeing Party has disagreed. The
Accountants shall deliver to all parties, as promptly as practicable, a report
setting forth such calculation. Such report shall be final and binding upon all
parties. The cost of such review and report shall be borne (i) by the
Disagreeing Party, if the difference between the Closing
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Indebtedness and the Disagreeing Party's calculation of the Closing Indebtedness
delivered pursuant to Section 2.3(a)(iii) is greater than the difference between
the Closing Indebtedness and the JVC's calculation of the Closing Indebtedness
delivered pursuant to Section 2.3(a)(ii), (ii) by the JVC if the first such
difference is less than the second such difference, and (iii) otherwise equally
by the Disagreeing Party, on the one hand and by the JVC, on the other hand.
(v) The JVC, Motorola and Benalcazar each agree that they
will, and agree to cause their respective independent accountants, and the JVC
Subsidiaries to, cooperate and assist in the Accountants' review of the Closing
Balance Sheet and the Closing Indebtedness, including, without limitation, the
making available to the extent necessary of books, records, work papers and
personnel.
(b) Net Rental Radio Expenditures Adjustment.
(i) No later than 20 days after the Closing Date, each of
Motorola and Benalcazar shall provide written notice to the other parties hereto
of Net Rental Radio Expenditures made by the JVC Subsidiaries from October 10,
1997 through the Closing Date; provided, however, that Motorola shall provide
notice of the Net Rental Radio Expenditures only as to Radionet and Dualcom (the
"Motorola Net Rental Radio Expenditures") and Benalcazar shall provide notice of
the Net Rental Radio Expenditures only as to General Radio, Master
Communications and Mastercom Trunking (the "Benalcazar Net Rental Radio
Expenditures"). Failure to provide such notice shall result in the applicable
Net Rental Radio Expenditures amount being deemed to be zero.
(ii) The Motorola Net Rental Radio Expenditures and the
Benalcazar Net Rental Radio Expenditures shall be deemed to be additional
capital contributions of Motorola and Benalcazar, respectively, to the JVC. Each
of Nextel, Motorola (as required) and Benalcazar (as required) agree to make an
additional capital contribution to the JVC based on the following ownership
percentages: Nextel, 70.05%; Motorola, 19.95%; and Benalcazar, 10%. Such
additional capital contribution amounts shall be calculated by establishing a
baseline capital contribution amount by dividing the Motorola Net Rental Radio
Expenditures by two (the "Adjusted Motorola Net Rental Radio Expenditures") and
taking the higher of the Adjusted Motorola Net Rental Radio Expenditures and the
Benalcazar Net Rental Radio Expenditures. If the Benalcazar Net Rental Radio
Expenditures is higher, each other party shall make an additional capital
contribution (based on the foregoing percentages) such that the Benalcazar Net
Rental Radio Expenditures shall equal 10% of the total additional capital
contribution amount (including the Benalcazar Net Rental Radio Expenditures). If
the Adjusted Motorola Net Capital Contribution is higher, each other party shall
make an additional capital contribution (based on the foregoing percentages)
such that the Motorola Net Rental Radio Expenditures shall equal 19.95% of the
total additional capital contribution amount (including the Motorola Net Rental
Radio Expenditures).
(iii) As promptly as practicable, but no later than 30 days
after the Closing Date, the JVC shall cause Deloitte & Touche LLP to review the
calculations of Motorola Net
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<PAGE> 19
Rental Radio Expenditures and Benalcazar Net Rental Radio Expenditures and to
provide a statement reflecting such calculations. Such additional capital
contributions shall be made in cash within 20 days of the delivery by Deloitte &
Touche LLP of the statement required by the preceding sentence, except that the
Motorola Net Rental Radio Expenditures and the Benalcazar Net Rental Radio
Expenditures shall constitute part of the additional capital contribution of
Motorola and Benalcazar, respectively.
(iv) Such additional capital contributions shall be promptly
converted into shares of JVC Common Stock and the JVC shall issue share
certificates to the Shareholders therefor.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF MOTOROLA AND BENALCAZAR
To induce Nextel, Motorola and Benalcazar to enter into and perform
their respective obligations under this Agreement, except as set forth on the
schedules attached hereto, Motorola represents and warrants to Nextel and
Benalcazar and Benalcazar represents and warrants to Nextel and Motorola as of
the date hereof and as of the Closing Date (which representations and warranties
shall survive the Closing as provided in Section 10.7) all as follows in this
Article III; provided, however, that to the extent such representations and
warranties are made as to Motorola, such representations and warranties shall be
deemed to be made solely by Motorola and to the extent such representations and
warranties are made as to Benalcazar, such representations and warranties shall
be deemed to be made solely by Benalcazar; provided, further, that to the extent
such representations and warranties are made as to the JVC Subsidiaries, such
representations and warranties shall be deemed to be made only as to Dualcom and
Radionet to the extent made by Motorola and such representations and warranties
shall be deemed to be made only as to Master Communications, Master Trunking and
General Radio to the extent made by Benalcazar; provided, further, that to the
extent that such representations are made as to Master Communications, such
representations and warranties shall be made only as of the Closing Date and not
as of the date hereof.
3.1 ORGANIZATION, GOOD STANDING, ETC.
Each of the JVC and each of the JVC Subsidiaries is a corporation duly
organized and validly existing under the laws of Peru. The JVC and the JVC
Subsidiaries have all corporate or limited liability company power and authority
required to own, operate and lease, except as set forth in Schedule 3.1, their
respective properties and assets and to carry on their respective businesses as
now conducted, except where such failure to have corporate or limited liability
company power and authority could not reasonably be expected to have a material
adverse effect on the JVC and the JVC Subsidiaries, taken as a whole. Neither
the JVC nor the JVC Subsidiaries are doing business outside of Peru. Immediately
following the consummation of the transactions set forth in this Agreement, the
JVC shall own, directly or indirectly, 100%, less one share, of the capital
stock of each of the JVC Subsidiaries free and clear of any Lien and any other
limitation or restriction (including any restriction on the right to vote, sell
or otherwise dispose of such capital stock).
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3.2 AUTHORIZATION, DUE EXECUTION AND BINDING EFFECT
Except as specifically contemplated in this Agreement to occur on or
after the Closing Date, all corporate action on the part of the JVC necessary to
authorize and perform the Transaction Agreements and the transactions
contemplated hereby and thereby has been taken. The Transaction Agreements have
been duly executed and delivered by the JVC and are legal, valid and binding
obligations of the JVC enforceable in accordance with their respective terms.
3.3 NO APPROVALS OR NOTICES REQUIRED; NO CONFLICTS WITH INSTRUMENTS
Except as listed on Schedule 3.3 and except where a violation could not
reasonably be expected to have a material adverse effect on the JVC and the JVC
Subsidiaries, taken as a whole, the execution, delivery and performance of the
Transaction Agreements by the JVC and the consummation of the transactions
contemplated hereby and thereby, including, but not limited to, the issuance of
shares of the JVC Common Stock, do not and will not (a) violate the By-laws or
other organizational documents of the JVC or the JVC Subsidiaries, (b)
constitute a violation (with or without the giving of notice or lapse of time,
or both) of any law, rule, regulation, judgment, injunction, order or decree
applicable to the JVC or the JVC Subsidiaries, (c) require any consent, approval
or authorization of any Person, governmental authority or other organization or
entity, (d) result in a default under, an acceleration or termination of, or the
creation in any party of the right to accelerate, terminate, modify or cancel,
or in any other way materially affect the rights of the JVC or the JVC
Subsidiaries under, any material agreement, lease, note or other restriction,
encumbrance, obligation or liability to which the JVC or the JVC Subsidiaries
are a party or by which the JVC or the JVC Subsidiaries are bound or to which
the assets (whether real or personal, tangible or intangible) of the JVC and the
JVC Subsidiaries (the "JVC Assets") are subject, (e) result in the creation or
imposition of any Lien on any of the JVC Assets or (f) have any adverse effect
on any of the Concessions (as defined below), including but not limited to the
interconnect rights set forth in the Concessions, licenses or other SMR rights
of the JVC or the JVC Subsidiaries. The JVC has provided or made available to
Nextel true and complete copies of all corporate and organizational documents of
the JVC and the JVC Subsidiaries, and there has been no change to any such
documents since the date such documents were provided except as described on
Schedule 3.3.
3.4 CONCESSIONS, LICENSES, PERMISSIONS, PERMITS, AUTHORIZATIONS, ETC.
Each of the JVC Subsidiaries (other than Master Communications) has
entered into concession contracts (the "Concessions") with Peru to install and
operate SMR services and, except as set forth on Schedule 3.4, has obtained all
currently required material governmental approvals, authorizations, licenses,
orders, permissions, registrations and permits of all agencies, whether local or
national, including, but not limited to, all approvals, authorizations,
licenses, orders, permissions, registrations and permits currently required for
installing, using and operating the Channels. The JVC Subsidiaries are not in
default of any of their obligations under the terms of their respective
Concessions (including but not limited to any required buildout or loading
dates), and all such Concessions are valid and in force, except as set forth on
Schedule 3.4 and where the failure to have any such valid Concession in force
could not,
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individually or in the aggregate, reasonably be expected to have a material
adverse effect on the JVC and the JVC Subsidiaries, taken as a whole. Except as
listed on Schedule 3.4, as of the date hereof no additional payments or fees of
any kind are required to be paid to governmental authorities to conduct the
Business as presently conducted. Except as listed on Schedule 3.4, as of the
date hereof all tax obligations generally applicable to the Concessions and
other payments or fees required to be paid to governmental authorities to
conduct the Business have been paid in a timely manner.
3.5 CAPITALIZATION OF THE JVC AND OWNERSHIP OF THE JVC CAPITAL STOCK
As of the date hereof and immediately prior to Closing, there are 2,000
authorized, issued and outstanding shares of S/.1.00 each of the JVC Common
Stock. Motorola, Manuel Diego Aramburu Yzaga and Benalcazar are the record and
legal owners of the JVC Common Stock owned by them, as disclosed on Schedule
3.5, free and clear of any Lien and any other limitation or restriction
(including any restriction on the right to vote, sell or otherwise dispose of
any such capital stock). All outstanding shares of the JVC Common Stock have
been duly authorized and validly issued and are fully paid and non-assessable.
Except as described on Schedule 3.5 or as otherwise contemplated by this
Agreement, there are no outstanding (a) shares of JVC Common Stock or other
voting securities of the JVC, (b) securities of the JVC convertible into or
exchangeable for shares of JVC Common Stock or other voting securities of the
JVC, or (c) options or other rights or obligations to acquire from the JVC, or
other obligations of the JVC to issue, any shares of JVC Common Stock, voting
securities or securities convertible into or exchangeable for shares of JVC
Common Stock or voting securities of the JVC. Schedule 3.5 contains a true and
complete list of the jurisdiction of organization, type of entity,
capitalization and voting rights of the JVC. Immediately prior to Closing, the
JVC has no subsidiaries and at Closing the JVC will have no subsidiaries other
than the JVC Subsidiaries and, except for the JVC Subsidiaries, will not own or
have any option or right to acquire more than 5% of the equity securities of any
Person.
3.6 CAPITALIZATION OF THE JVC SUBSIDIARIES AND OWNERSHIP OF THE CAPITAL
STOCK OF THE JVC SUBSIDIARIES
Schedule 3.6 sets forth, as of the date hereof, the number of
authorized, issued and outstanding shares of the capital stock and
participaciones sociales, as applicable, of each of the JVC Subsidiaries.
Immediately prior to the Closing, Motorola is the record and legal owner
directly and through Mr. Manuel Diego Aramburu Yzaga and Mr. Manuel Aramburu
Yrigoyen of 100% of the capital stock of Radionet and the record and legal owner
directly and through Mr. Manuel Diego Aramburu Yzaga and Mr. Manuel Aramburu
Yrigoyen of 100% of the participaciones sociales of Dualcom. Immediately prior
to the Closing, Benalcazar is the record and legal owner directly and through
Mr. Juan Manuel Benalcazar Tabja and Mr. Javier Sanchez Benalcazar of 100% of
the capital stock of Master Communications, the record and legal owner directly
and through Mr. Guy Figueroa Takoen and Ms. Beatriz Sebastiani Pozu of 100% of
the capital stock of General Radio. Immediately prior to the Closing, Master
Communications is the record and legal owner, directly and through Mr. Juan
Manuel Benalcazar and Mr. Javier Sanchez Benalcazar of 100% of the capital stock
of Mastercom Trunking. All outstanding shares
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of the capital stock of the JVC Subsidiaries have been duly authorized and
validly issued and are fully paid and non-assessable. Except as described on
Schedule 3.6 or as otherwise contemplated by this Agreement, there are no
outstanding (a) shares of capital stock of the JVC Subsidiaries or other voting
securities of the JVC Subsidiaries, (b) securities of the JVC Subsidiaries
convertible into or exchangeable for shares of capital stock of the JVC
Subsidiaries or other voting securities of the JVC Subsidiaries, or (c) options
or other rights or obligations to acquire from the JVC Subsidiaries, or other
obligations of the JVC Subsidiaries to issue, any shares of capital stock of the
JVC Subsidiaries, voting securities or securities convertible into or
exchangeable for shares of capital stock of the JVC Subsidiaries or voting
securities of the JVC Subsidiaries. Schedule 3.6 contains a true and complete
list of the jurisdiction of organization, type of entity, attorney-in-fact (if
any), delegate manager (if any), capitalization and voting rights of the JVC
Subsidiaries. Except for Master Communications' ownership of Mastercom Trunking,
none of the JVC Subsidiaries has any subsidiaries and none of the JVC
Subsidiaries owns or has any option or right to acquire more than 5% of the
equity securities of any Person.
3.7 FINANCIAL STATEMENTS
Motorola has previously delivered to Nextel balance sheets and income
statements of Dualcom and Radionet as of and for the ten months ended October
31, 1997 and Benalcazar has previously delivered to Nextel balance sheets and
income statements of (i) General Radio as of and for the ten months ended
October 31, 1997 and (ii) Master Communications as of and for the year-to-date
period ended November 19, 1997 and for the year ended December 31, 1996
(collectively, the "Financial Statements"). The Financial Statements present
fairly the financial position and results of operations of the JVC Subsidiaries
as of the dates and for the periods indicated therein; provided, however, that
the Financial Statements may be subject to normal year-end adjustments of a type
consistent with prior years and do not include footnotes. The Financial
Statements are attached as Exhibit 3.7. All Financial Statements for Master
Communications are pro forma taking into account the division of Master
Communications referenced in Section 8.9.
3.8 ABSENCE OF CERTAIN CHANGES
Since October 31, 1997 (except with respect to Master Communications,
since November 19, 1997), except as contemplated by this Agreement, and except
as listed on Schedule 3.8, the Business has been conducted in the ordinary
course consistent with past practices and there has not been:
(a) any declaration, setting aside or payment of any dividend or other
distribution, whether in cash or securities, with respect to any shares of the
JVC Common Stock, or any repurchase, redemption or other acquisition by
Motorola, Benalcazar or the JVC of any outstanding shares of JVC Common Stock or
other securities of, or other ownership interests in, the JVC;
(b) any amendment of any material term of any outstanding security of
the JVC or the JVC Subsidiaries;
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(c) any incurrence, assumption or guarantee by the JVC or the JVC
Subsidiaries of any indebtedness for borrowed money;
(d) any creation or assumption by the JVC or the JVC Subsidiaries of
any Lien on any material asset other than in the ordinary course of business
consistent with past practices;
(e) any making of any loan, advance or capital contributions to or
investment in any Person by the JVC or the JVC Subsidiaries;
(f) any damage, destruction or other casualty loss (whether or not
covered by insurance) affecting the Business or the JVC Assets that,
individually or in the aggregate, has had or could reasonably be expected to
have a material adverse effect on the Business;
(g) any transaction or commitment made, or any contract or agreement
entered into, by Motorola (or an Affiliate thereof), Benalcazar (or an Affiliate
thereof) or the JVC relating to the JVC Assets or the Business (including the
acquisition or disposition of any assets) or any relinquishment by Motorola,
Benalcazar, the JVC or the JVC Subsidiaries of any contract or other right, in
either case, material to the JVC and the JVC Subsidiaries, taken as a whole,
other than transactions and commitments in the ordinary course of business
consistent with past practices or contemplated by this Agreement;
(h) any change in any method of accounting or accounting practice by
the JVC or the JVC Subsidiaries;
(i) any (i) employment, deferred compensation, severance, retirement or
other similar agreement entered into by the JVC or the JVC Subsidiaries with any
director, officer or employee thereof or consultant thereto (or any amendment to
any such existing agreement), (ii) grant of any severance or termination pay to
any director, officer or employee of or consultant to the JVC or the JVC
Subsidiaries or (iii) change in compensation or other benefits payable to any
director, officer or employee of or consultant to the JVC or the JVC
Subsidiaries pursuant to any severance or retirement plans or policies thereof;
or
(j) any labor dispute, other than routine individual grievances, or any
activity or proceeding by a labor union or representative thereof to organize
any employees of the JVC or the JVC Subsidiaries, which employees were not
subject to a collective bargaining agreement as of October 31, 1997, or any
lockouts, strikes, slowdowns, work stoppages or threats thereof by or with
respect to any employees of the JVC or the JVC Subsidiaries.
3.9 LIABILITIES
There are no long-term liabilities of the JVC or the JVC Subsidiaries
of any kind whatsoever, whether accrued, contingent, absolute, determined,
determinable or otherwise, that are required by U.S. GAAP to be reflected in a
balance sheet or in the notes thereto, and there is no existing condition,
situation or set of circumstances that is reasonably likely to result in such a
liability, other than liabilities disclosed on Schedule 3.9. Except as disclosed
on Schedule 3.9,
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none of the liabilities of the JVC or the JVC Subsidiaries are past due, and all
such liabilities were incurred in the ordinary course of business on terms
consistent with past practice.
3.10 INTERCOMPANY TRANSACTIONS
Except as disclosed on Schedule 3.10, there are no intercompany
balances, and there are no and, there have not been any intercompany
transactions, between Motorola, Benalcazar or any Affiliate thereof, on the one
hand, and the JVC or the JVC Subsidiaries, on the other hand.
3.11 TAXES
The JVC and the JVC Subsidiaries and any predecessor of the foregoing
have accurately prepared in all material respects and duly filed with the
appropriate Peruvian national, regional, departmental, provincial, local and
foreign taxing authorities (the "Tax Authorities") all tax returns, information
returns and reports that are, individually and in the aggregate, material and
are required to be filed on or before the date hereof with respect to the JVC
and the JVC Subsidiaries, and, except as disclosed on Schedule 3.11, have paid
in full or made adequate provision for the payment of all material Taxes. Except
as disclosed on Schedule 3.11, neither the JVC nor the JVC Subsidiaries is
delinquent in the payment of any material Taxes owed by it, and no deficiencies
have been assessed or threatened with respect to any Taxes owed by it. Neither
the JVC nor any of the JVC Subsidiaries has requested or received from any Tax
Authorities any extensions or tolling arrangements with respect to any Taxes or
is subject to any open or threatened audits by any Tax Authorities.
3.12 JVC ASSETS
(a) Motorola and Benalcazar, as applicable, have delivered or made
available to Nextel true and complete copies of all material leases, subleases,
rental agreements, contracts of sale or licenses of any portion of the personal
property owned, leased or rented by the JVC Subsidiaries as of the date hereof
(the "JVC Personal Property"). Immediately following consummation of the
transactions set forth in this Agreement, the JVC, through its ownership of the
JVC Subsidiaries, will have legal ownership of or other legal rights to use all
property used in the conduct of the Business as presently conducted. Schedule
3.12(a) lists all owned JVC Personal Property and all leased or rented JVC
Personal Property with a monthly lease or rental payment (or annual lease
payment pro-rated on a monthly basis) in excess of the Nuevos Soles equivalent
of $5,000.
(b) Except as listed on Schedule 3.12(b), none of the JVC or the JVC
Subsidiaries owns, leases or uses any material real property.
(c) Each material lease, license, rental agreement, contract of sale or
other agreement to which any of the JVC Assets are subject is valid and in good
standing in all material respects; the JVC and the JVC Subsidiaries have
performed all material obligations imposed upon them thereunder, and neither the
JVC, the JVC Subsidiaries nor, to the knowledge of Motorola or Benalcazar, any
other party thereto is in material default thereunder in any material respect,
nor is there any event that with or without the giving of notice or lapse of
time, or both, would
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constitute a material default thereunder by the JVC, the JVC Subsidiaries or any
other party thereto. None of the JVC or the JVC Subsidiaries has received
notice, and none of the JVC or the JVC Subsidiaries is otherwise aware, that any
party to any such lease, license, rental agreement, contract of sale or other
agreement intends to cancel, terminate or refuse to renew the same or to
exercise or decline to exercise any option or other right thereunder. None of
the JVC Assets are subject to any lease, license, contract of sale or other
agreement that is reasonably likely to have a material adverse effect upon the
business, properties or financial condition of the JVC and the JVC Subsidiaries,
taken as a whole.
(d) Except as listed on Schedule 3.12(d), the JVC Assets are free and
clear of all Liens other than landlord's Liens, Liens for taxes not yet due or
other immaterial Liens arising in the ordinary course of business (collectively,
"Permitted Liens") and, other than leased JVC Assets, the JVC or the JVC
Subsidiaries have good and marketable title thereto. Except as set forth on
Schedule 3.12(d), the JVC or the JVC Subsidiaries have valid leasehold interests
in all leased JVC Assets.
(e) No Person has any right of first refusal or option to acquire any
interest in the JVC Assets or any part thereof, and none of the JVC or the JVC
Subsidiaries have sold or contracted to sell the JVC Assets or any part thereof
or interest therein other than as set forth herein.
3.13 CHANNELS
The JVC Subsidiaries hold Concessions for the Channels, as listed on
Schedule 3.13. The JVC has provided or made available to Nextel a true and
complete copy of each Concession. Schedule 3.13 sets forth the Concession
pursuant to which each Channel was granted, the geographic location of such
Channel, the number of such Channel, the dates of grant and expiration of the
Concession with respect to such Channel, any required buildout or loading dates,
and the status thereof, with respect to such Channel, the number of subscribers
using the Channels in such location as of October 31, 1997, and, to the extent
known, the nature of any frequency interference with the use of such Channel and
any Channel blockage by third parties with respect to the use of such Channel.
Schedule 3.13 additionally lists all such information with respect to any
channels for which any of the JVC Subsidiaries have applied for but not yet
received a concession (the "Applied Channels") and any channels which have been
reserved to any of the JVC Subsidiaries in accordance with the terms of their
respective concessions (the "Reserved Channels"). Except as set forth on
Schedule 3.13, all commercially reasonable action that is necessary to preserve
the rights to any Concessions, Channels, Applied Channels or Reserved Channels
has been taken or is being taken.
The JVC Subsidiaries have the legal right to interconnect the Channels
to the public service networks (which as of the date hereof include, but are not
limited to, the public telephone and public cellular networks) in Peru to the
extent provided in each Concession and under Peruvian law. Except as listed in
Schedule 3.13, the JVC Subsidiaries have not entered into any agreement or
understanding with respect to the interconnection of the Channels to the public
telephone and public cellular networks in Peru nor have they initiated or
conducted negotiations
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to such effect. To the knowledge of Motorola and Benalcazar, no action has been
taken or threatened to be taken by the MTC, OSIPTEL or any other third party
that could reasonably be expected to interfere with the interconnection rights
of any of the JVC Subsidiaries.
3.14 CONTRACTS
The JVC has provided or made available to Nextel a true and complete
copy of all material contracts to which Motorola or Benalcazar (to the extent
such contract relates to the Business) or the JVC or the JVC Subsidiaries are a
party, including, without limitation, security agreements, conditional sale
agreements and instruments relating to the borrowing of money. Schedule 3.14
lists all such contracts. All such contracts are valid and enforceable and in
full force and effect except where the failure to be so could not reasonably be
expected to have a material adverse effect on the JVC and the JVC Subsidiaries
taken as a whole. Motorola, Benalcazar, the JVC and the JVC Subsidiaries, as the
case may be, have performed all material obligations imposed upon it or them
thereunder, and there are not, under any of such contracts, any defaults or
events of default on the part of Motorola, Benalcazar, the JVC or the JVC
Subsidiaries, as the case may be, or to the knowledge of Motorola or Benalcazar,
any other party thereto, that could be reasonably expected to materially
adversely affect the business, assets, financial condition or business prospects
of the JVC and the JVC Subsidiaries, taken as a whole. None of Motorola,
Benalcazar, the JVC or the JVC Subsidiaries has received notice, and none of
Motorola, Benalcazar, the JVC or the JVC Subsidiaries is otherwise aware, that
any party to any such contract intends to cancel, terminate or refuse to renew
such contract or to exercise or decline to exercise any option or right
thereunder.
3.15 CLAIMS AND LEGAL PROCEEDINGS
Except as described on Schedule 3.15, there are no claims, actions,
suits, arbitrations, proceedings or investigations pending or to the knowledge
of Motorola or Benalcazar, threatened relating to the Business, before or by any
governmental or nongovernmental department, commission, board, bureau, agency,
instrumentality or any other Person. To the knowledge of Motorola or Benalcazar,
except as described on Schedule 3.15, there is no existing or pending
legislative or regulatory or existing, pending or threatened judicial action by
any national, regional, departmental, provincial or local entity in Peru that
could reasonably be construed or expected to deny or materially hinder the right
of the JVC or the JVC Subsidiaries to use the Channels for their intended
purpose under the applicable Concession or the ability of the JVC or the JVC
Subsidiaries to interconnect to the public telephone or public cellular network,
to reuse the same frequency in each licensee's geographic area or to employ the
iDEN technology in the Channels. There are no outstanding or unsatisfied
judgments, orders, decrees or stipulations to which Motorola, Benalcazar, the
JVC or the JVC Subsidiaries is a party that involve the transactions
contemplated hereby or that could, individually or in the aggregate, reasonably
be expected to have a material adverse effect upon the business, assets, or
financial condition or business prospects of the JVC and the JVC Subsidiaries,
taken as a whole.
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3.16 LABOR MATTERS
(a) Except as set forth on Schedule 3.16, there are no material
disputes, employee grievances, disciplinary actions or legal actions pending or
to the knowledge of Motorola or Benalcazar threatened between the JVC or the JVC
Subsidiaries and any of its current or former employees or independent
contractors and no basis for any such claims under Peruvian law. Except as set
forth on Schedule 3.16, the JVC and the JVC Subsidiaries have complied in all
material respects with all provisions of all applicable laws in Peru relating to
the employment of labor and have no liability for any arrears of wages, profit
sharing, compensation for termination of services, vacations, pension fund
payments, social security payments or taxes or penalties for failure to comply
with any such laws, including but not limited to in connection with work
performed by independent contractors. There are no organizational efforts
presently being made or threatened by or on behalf of any labor union with
respect to any of the employees of the JVC or the JVC Subsidiaries.
(b) Except as specifically set forth on Schedule 3.16, none of the JVC
or the JVC Subsidiaries is a party to any:
(i) management, employment or other contract providing for the
employment or rendition of executive services;
(ii) employment contract that is not terminable without penalty by
the JVC or the JVC Subsidiaries on 30 days' notice;
(iii) bonus, incentive, deferred compensation, severance pay,
pension, profit-sharing, retirement, stock purchase, stock option, employee
benefit or similar plan, agreement or arrangement;
(iv) collective bargaining agreement or other agreement with any
labor union or other employee organization (and no such agreement is currently
being requested by, or is under discussion by management with, any group of
employees or others); or
(v) other employment contract or other compensation agreement or
arrangement, oral or written, affecting or relating to current or former
employees of the JVC or the JVC Subsidiaries.
(c) All such contracts and other agreements and arrangements set forth
on Schedule 3.16 are valid and in full force and effect, the JVC and the JVC
Subsidiaries have performed all material obligations imposed upon them
thereunder, and there are, under any of such contracts, agreements or
arrangements, no defaults or events of default by the JVC, the JVC Subsidiaries
or any other party thereto that could be reasonably expected to materially
adversely affect the business, assets, financial condition or business prospects
of the JVC and the JVC Subsidiaries, taken as a whole, or that could reasonably
be expected to materially adversely affect the relationship of the JVC or the
JVC Subsidiaries or their Affiliates with any employee of the JVC or the JVC
Subsidiaries. Other than as set forth on Schedule 3.16, no employee of the JVC
or the JVC Subsidiaries has entered into an employment contract, and no bonus or
other
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compensation of any kind is due to any such employee other than as required by
Peruvian labor law.
(d) From October 31, 1997 to and including the Closing Date, none of
the JVC or the JVC Subsidiaries has made any loans to any of its officers or
employees or any of the officers or employees of the JVC, the JVC Subsidiaries
or their Affiliates.
3.17 CUSTOMERS
Except as described on Schedule 3.17, none of Motorola, Benalcazar, the
JVC or the JVC Subsidiaries has received any customer complaints or expressions
of customer dissatisfaction, in writing or orally, of a material nature
concerning the service provided by the JVC or the JVC Subsidiaries.
3.18 APPLICABLE LAWS
Motorola and Benalcazar have complied, and are in compliance, with the
U.S. Foreign Corrupt Practices Act with respect to the Business, and the JVC and
the JVC Subsidiaries have complied, and are in compliance, with the U.S. Foreign
Corrupt Practices Act. Except where noncompliance could not, individually or in
the aggregate, reasonably be expected to have a material adverse effect on the
JVC and the JVC Subsidiaries, taken as a whole, and except to the extent
provided on Schedules 3.13 and 3.18, Motorola, Benalcazar, the JVC and the JVC
Subsidiaries have complied, and are in compliance, with all other presently
existing local and national laws, rules, ordinances, decrees and orders in
connection with the operation of the Business as currently conducted or in the
case of the JVC and the JVC Subsidiaries applicable to their owned or leased
properties. None of Motorola, Benalcazar, the JVC or the JVC Subsidiaries has
reasonably been put on notice of any action or omission which could be deemed an
unasserted present or past unremedied failure by Motorola, Benalcazar, the JVC
or the JVC Subsidiaries, as the case may be, to comply with any such laws,
rules, ordinances, decrees and orders, other than actions or omissions which
such entity reasonably believes are not failures to comply. None of Motorola,
Benalcazar, the JVC or the JVC Subsidiaries or any of their Affiliates has used
any funds or given anything of value, directly or indirectly, for contributions,
payments, gifts or entertainment or made any expenditures, directly or
indirectly, to any government official, political party or candidate for
political office to influence such Person or entity in the discharge of his, her
or its official duties. Each of the JVC and the JVC Subsidiaries have financial
controls and accounting books and records reasonably designed to ensure that
such books and records accurately reflect corporate transactions and the
disposition of assets to the extent relating to the JVC or the JVC Subsidiaries.
None of Motorola, Benalcazar, the JVC or the JVC Subsidiaries has accepted or
received any unlawful contributions, payments, gifts or expenditures in
connection with the operation of the Business.
3.19 INSURANCE
The JVC has provided or made available to Nextel true and complete
copies of all insurance policies relating to the JVC, the JVC Subsidiaries and
the JVC Assets in effect as of the date hereof.
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3.20 TRADEMARKS
(a) The applicable JVC Subsidiaries own, or have full and unrestricted
rights within Peru (to the extent available under Peruvian law) to all material
trademarks now used by such JVC Subsidiaries as set forth on Schedule 3.20.
(b) Where registration of the intellectual property listed above is
necessary in order to have full and unrestricted rights to such intellectual
property, such intellectual property has been duly registered with the proper
authorities in Peru.
(c) A true and complete list of (i) trademark registrations and
applications therefor to which the JVC or the JVC Subsidiaries are a party or
that are used in the operation of the Business and (ii) any interference actions
or adverse claims made or, to the knowledge of Motorola or Benalcazar,
threatened in respect thereof and any claims made or, to the knowledge of
Motorola or Benalcazar, threatened for alleged infringement thereof are set
forth on Schedule 3.20. The JVC and the JVC Subsidiaries, in their operations,
do not, to the knowledge of Motorola or Benalcazar, infringe any valid trademark
of any other Person. Except as set forth on Schedule 3.20, all agreements listed
on Schedule 3.20 are valid and enforceable, the JVC and the JVC Subsidiaries
have performed all material obligations imposed upon them thereunder, and
neither the JVC, the JVC Subsidiaries nor, to the knowledge of Motorola or
Benalcazar, any other party thereto is in default thereunder in any material
respect, nor is there any event that with the giving of notice or lapse of time,
or both, would constitute a material default thereunder by the JVC, the JVC
Subsidiaries or, to the knowledge of Motorola or Benalcazar, any other party
thereto. The JVC and the JVC Subsidiaries have not received notice that any
party to any such agreement intends to cancel, terminate or refuse to renew the
same or to exercise or decline to exercise any option or other right thereunder.
None of the JVC and the JVC Subsidiaries has entered into any agreement to
indemnify any Person against any claim or charge of infringement of any
trademarks.
3.21 COMPLIANCE WITH ENVIRONMENTAL LAWS
None of Motorola, Benalcazar, the JVC or any of the JVC Subsidiaries
or, to the knowledge of Motorola or Benalcazar, other Person (including, without
limitation, any previous owner, lessee, sublessor or sublessee) has generated,
handled, used, manufactured, processed, distributed in commerce, transported,
treated, stored, disposed of, or released (or arranged for the transportation,
treatment, storage, disposal or release of) petroleum, petroleum products,
hazardous waste, hazardous chemicals or substances, toxic chemicals, chemical
substances or mixtures, pollutants or contaminants on, at or from any assets or
properties owned, leased, subleased or used by the JVC or any of the JVC
Subsidiaries in the operation of the Business or on, at or from any real
property to which any of the above-listed substances from the above-listed
assets or properties were transported, or at or on which they were treated or
disposed, in a manner that could reasonably be expected to subject the JVC, any
of the JVC Subsidiaries or any shareholder of the JVC to any material liability
under any provision of law in existence on or prior to the Closing Date.
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3.22 BROKERAGE
None of Motorola, Benalcazar, the JVC or the JVC Subsidiaries has
retained any broker or finder in connection with the transactions contemplated
by this Agreement. Any brokerage or finder's fee due to any broker or finder in
violation of the foregoing representation shall be paid by Motorola or
Benalcazar, as the case may be.
ARTICLE IV
ADDITIONAL REPRESENTATIONS AND WARRANTIES OF MOTOROLA
To induce Nextel, Benalcazar and the JVC to enter into this Agreement,
Motorola represents and warrants to Nextel, Benalcazar and the JVC as of the
date hereof and as of the Closing Date (which representations and warranties
shall survive the Closing as provided in Section 10.7) all as follows in this
Article IV.
4.1 ORGANIZATION, GOOD STANDING, ETC.
Motorola is a corporation duly organized and validly existing under the
laws of the state of Delaware. Motorola has all requisite power and authority to
own, operate and lease its properties and assets and to carry on its business as
now conducted except where such failure to have corporate power and authority
could not reasonably be expected to have a material adverse effect on Motorola.
4.2 AUTHORIZATION, DUE EXECUTION AND BINDING EFFECT
All corporate action on the part of Motorola necessary to authorize and
perform the Transaction Agreements and the transactions contemplated hereby and
thereby has been taken. The Transaction Agreements have been duly executed and
delivered by Motorola and are legal, valid and binding obligations of Motorola,
enforceable in accordance with their respective terms.
4.3 NO APPROVALS OR NOTICES REQUIRED; NO CONFLICTS WITH INSTRUMENTS
The execution, delivery and performance of the Transaction Agreements
by Motorola and the consummation of the transactions contemplated hereby and
thereby do not and will not (a) violate the corporate charter or other
organizational documents of Motorola, (b) constitute a violation (with or
without the giving of notice or lapse of time, or both) of any law, rule,
regulation, judgment, injunction, order or decree applicable to Motorola, (c)
except as set forth on Schedule 4.3, require any consent, approval or
authorization of any Person, governmental authority or other organization or
entity or (d) result in a default under, an acceleration or termination of, or
the creation in any party of the right to accelerate, terminate, modify or
cancel, or in any other way materially affect the rights of Motorola under, any
material agreement, lease, note or other restriction, encumbrance, obligation or
liability to which Motorola is a party or by which Motorola is bound or to which
the assets (whether real or personal, tangible or intangible) of Motorola are
subject.
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4.4 PERUVIAN SMR SERVICES
Except for the JVC and the JVC Subsidiaries, neither Motorola nor any
of its Affiliates have any other interests, direct or indirect, contingent or
pending, in concessions, channels or frequencies licensed for use to provide SMR
service in Peru.
ARTICLE V
ADDITIONAL REPRESENTATIONS AND WARRANTIES OF BENALCAZAR
To induce Nextel, Motorola and the JVC to enter into this Agreement,
Benalcazar represents and warrants to Nextel, Motorola and the JVC as of the
date hereof and as of the Closing Date (which representations and warranties
shall survive the Closing as provided in Section 10.7) all as follows in this
Article V.
5.1 CITIZENSHIP; RESIDENCY
Benalcazar is a citizen and resident of Peru and has the legal capacity
to enter into this Agreement and the other Transaction Agreements.
5.2 DUE EXECUTION AND BINDING EFFECT
All action on the part of Benalcazar necessary to perform the
Transaction Agreements and the transactions contemplated hereby and thereby,
including without limitation any consent or authorization of Benalcazar's spouse
required by Peruvian law, has been taken. The Transaction Agreements have
been duly executed and delivered by Benalcazar and are legal, valid and binding
obligations of Benalcazar, enforceable in accordance with their respective
terms.
5.3 NO APPROVALS OR NOTICES REQUIRED; NO CONFLICTS WITH INSTRUMENTS
The execution, delivery and performance of the Transaction Agreements
by Benalcazar and the consummation of the transactions contemplated hereby and
thereby do not and will not (a) constitute a violation (with or without the
giving of notice or lapse of time, or both) of any law, rule, regulation,
judgment, injunction, order or decree applicable to Benalcazar, (b) except as
set forth on Schedule 5.3, require any consent, approval or authorization of any
Person, governmental authority or other organization or entity or (c) result in
a default under, an acceleration or termination of, or the creation in any party
of the right to accelerate, terminate, modify or cancel, or in any other way
materially affect the rights of Benalcazar under, any material agreement, lease,
note or other restriction, encumbrance, obligation or liability to which
Benalcazar is a party or by which Benalcazar is bound or to which the assets
(whether real or personal, tangible or intangible) of Benalcazar are subject.
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5.4 PERUVIAN SMR SERVICES
Except for the JVC and the JVC Subsidiaries, neither Benalcazar nor any
of his Affiliates have any other interests, direct or indirect, contingent or
pending, in concessions, channels or frequencies licensed for use to provide SMR
service in Peru.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF NEXTEL
To induce Motorola, Benalcazar and the JVC to enter into this
Agreement, each of Nextel and Nextel International, respectively, represents and
warrants to Motorola, Benalcazar and the JVC as of the date hereof and as of the
Closing Date (which representations and warranties shall survive the Closing as
provided in Section 10.7) all as follows in this Article VI.
6.1 ORGANIZATION, GOOD STANDING, ETC.
Nextel is a limited life company duly organized and validly existing
under the laws of the Cayman Islands. Nextel International is a corporation duly
organized and validly existing under the laws of the State of Washington. Each
of Nextel and Nextel International has all requisite power and authority to own,
operate and lease its properties and assets and to carry on its business as now
conducted except where such failure to have corporate power and authority could
not reasonably be expected to have a material adverse effect on Nextel or Nextel
International.
6.2 AUTHORIZATION, DUE EXECUTION AND BINDING EFFECT
All corporate action on the part of Nextel and Nextel International
necessary to authorize and perform the Transaction Agreements and the
transactions contemplated hereby and thereby has been taken. The Transaction
Agreements have been duly executed and delivered by Nextel and Nextel
International and are legal, valid and binding obligations of Nextel and Nextel
International, enforceable in accordance with their respective terms.
6.3 NO APPROVALS OR NOTICES REQUIRED; NO CONFLICTS WITH INSTRUMENTS
The execution, delivery and performance of the Transaction Agreements
by Nextel and Nextel International and the consummation of the transactions
contemplated hereby and thereby do not and will not (a) violate the corporate
charter or other organizational documents of Nextel or Nextel International, (b)
constitute a violation (with or without the giving of notice or lapse of time,
or both) of any law, rule, regulation, judgment, injunction, order or decree
applicable to Nextel or Nextel International, (c) except as set forth on
Schedule 6.3, require any consent, approval or authorization of any Person,
governmental authority or other organization or entity or (d) result in a
default under, an acceleration or termination of, or the creation in any party
of the right to accelerate, terminate, modify or cancel, or in any other way
materially affect the rights of Nextel or Nextel International under, any
material agreement, lease, note or other restriction, encumbrance, obligation or
liability to which Nextel or Nextel International is a party or by
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which Nextel or Nextel International is bound or to which the assets (whether
real or personal, tangible or intangible) of Nextel or Nextel International are
subject.
6.4 BROKERAGE
Neither Nextel nor Nextel International has retained any broker or
finder in connection with the transactions contemplated by this Agreement. Any
brokerage or finder's fee due to any broker or finder in violation of the
foregoing representation shall be paid by Nextel.
6.5 PERUVIAN SMR SERVICES
None of Nextel, Nextel International or any of their Affiliates have
any interests, direct or indirect, contingent or pending, in concessions,
channels or frequencies licensed for use to provide SMR service in Peru.
ARTICLE VII
FURTHER AGREEMENTS
Each of the parties hereto agrees to perform and observe the following
agreements applicable to it:
7.1 SCHEDULES
(a) All representations and warranties herein by Motorola, Benalcazar
or Nextel shall apply to any exhibits, schedules and certificates attached to
this Agreement delivered by Motorola, Benalcazar or Nextel, as the case may be,
or any officer thereof, and each such certificate shall be deemed to be a
representation by Motorola, Benalcazar or Nextel, as the case may be, as to the
matters set forth therein.
(b) On or prior to the Closing Date, Motorola, Benalcazar or Nextel may
deliver to the other parties hereto one or more Schedules to this Agreement that
are revised and updated to reflect changes to the operations or condition of
Motorola, Benalcazar, Nextel or the JVC or the JVC Subsidiaries, as the case may
be, between the date hereof and the Closing Date. The delivery of any such
revised Schedule shall not affect the rights of the parties hereto under Article
VIII or IX, as the case may be, but if the Closing shall occur, the revised
Schedules shall be deemed to supersede the Schedules delivered herewith, but
only with respect to the representations and warranties given as of the Closing
Date.
7.2 ACCESS
From the date of this Agreement to and including the Closing Date,
Motorola, Benalcazar and the JVC shall (and shall cause each of the JVC
Subsidiaries to) grant Nextel, Motorola and Benalcazar and their agents,
employees, accountants and attorneys reasonable access during normal business
hours to, and the opportunity to examine and make copies of, all of the books,
records, documents, instruments and papers of Motorola, Benalcazar, the JVC and
the JVC Subsidiaries relating to the Business, and the right to inspect all of
their operations, properties
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and assets relating to the Business at any reasonable time and provide any
authorizations necessary to examine the status of the Concessions with the MTC.
7.3 MANAGEMENT INFORMATION
From the date of this Agreement to and including the Closing Date,
Motorola, Benalcazar and the JVC shall (and shall cause the JVC Subsidiaries to)
provide to Nextel all material information specifically requested by Nextel
regarding the operation of the Business during such period.
7.4 ADVICE OF CLAIMS
From the date of this Agreement to and including the Closing Date,
Motorola, Benalcazar and the JVC shall (and shall cause the JVC Subsidiaries to)
promptly advise Nextel, Motorola and Benalcazar in writing if it has notice or
knowledge of the commencement or threat of any claims, litigation or proceedings
against or affecting the JVC or the JVC Subsidiaries or any rulings, decrees or
other material developments in any claim, action or suit described on Schedule
3.15 or arising after the date hereof.
7.5 CONDUCT OF THE BUSINESS
(a) From the date hereof until the Closing Date, each of Motorola,
Benalcazar and the JVC shall (and shall cause the JVC Subsidiaries to) conduct
the Business in the ordinary course consistent with past practices and use its
best efforts to preserve intact the business organizations and relationships
with third parties and to keep available the services of the present employees
of the Business. Without limiting the generality of the foregoing, from the date
hereof until the Closing Date, each of Motorola, Benalcazar and the JVC will
ensure that the JVC and the JVC Subsidiaries shall not:
(i) except for capital expenditures approved by the parties in
accordance with Section 2.3(b), acquire assets from any other Person having a
value individually or in the aggregate in excess of $50,000;
(ii) sell, lease, license or otherwise dispose of any JVC Assets
except in the ordinary course consistent with past practices;
(iii) issue any additional shares of capital stock;
(iv) make any payments of dividends or other distributions with
respect to its capital stock;
(v) directly or indirectly, take any action or fail to take any
action that could result in the loss of the benefit of any Concession or
Channel, or that may affect any rights of the JVC Subsidiaries with respect to
any Applied Channels or Reserved Channels; or
(vi) agree or commit to do any of the foregoing.
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(b) Each of Motorola, Benalcazar and the JVC shall (and shall cause the
JVC Subsidiaries to) to the best of their respective abilities (i) preserve and
protect the right of the JVC and the JVC Subsidiaries to use all the Channels as
currently intended, including for use with iDEN technology, and (ii) take action
to satisfy all applicable build-out and loading requirements. Each of Motorola,
Benalcazar and the JVC shall immediately notify the other parties hereto if the
right of the JVC or the JVC Subsidiaries to use any of the Channels will not be
protected or preserved or if applicable build-out or loading requirements may
not be met.
(c) Each of Motorola, Benalcazar and the JVC shall not (and shall cause
the JVC Subsidiaries not to) (i) take or agree or commit to take any action that
would make any representation or warranty of Motorola or Benalcazar,
respectively, hereunder inaccurate in any respect at, or as of any time prior
to, the Closing Date or (ii) omit or agree or commit to omit to take any
commercially reasonable action necessary to prevent any such representation or
warranty from being inaccurate in any respect at any such time.
7.6 COMPLIANCE WITH LAWS
Each of Motorola, Benalcazar, Nextel and the JVC agrees that it and any
director, officer, agent, employee or other Person acting on its behalf or on
behalf of the JVC or the JVC Subsidiaries (i) will not be involved in the
offering, paying or giving of anything of value, either directly or indirectly,
to a government official, political party or candidate for political office to
influence such Person or entity in the discharge of his, her or its official
duties, (ii) will not engage in any such unlawful conduct during the time of
carrying out their duties, (iii) will maintain accounting books and records in
reasonable detail and institute internal controls to ensure that such books and
records accurately reflect corporate transactions and the disposition of assets
to the extent relating to the JVC or the JVC Subsidiaries and (iv) will not,
directly or indirectly, take any action or fail to take any commercially
reasonable action in each case that could result in the loss of the benefits of
any Concession. Each of Motorola and Benalcazar further agrees that it will
cause the JVC and the JVC Subsidiaries to comply with the preceding sentence.
7.7 NO TRANSFERS
Each of Motorola and Benalcazar hereby agrees that it will not (and it
will not permit any of its Affiliates to), prior to the Closing Date, sell,
assign, transfer, pledge, hypothecate, mortgage, set in usufruct, encumber or
otherwise dispose of all or any part of any the JVC Common Stock or other
securities of the JVC convertible into the JVC Common Stock without the prior
written consent of Nextel.
7.8 MASTERCOM NAME
Benalcazar consents on his behalf and on behalf of his Affiliates to
the use of the name "Mastercom" in the corporate name of Mastercom Trunking S.A.
and the use of the name "Mastercom" in connection with the business of the JVC
and the JVC Subsidiaries. Benalcazar and the JVC will enter into a payment-free
license agreement reasonably satisfactory to the JVC
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relating to the JVC's use of the name "Mastercom" as soon as reasonably
practicable following Closing.
7.9 CAPITAL INCREASE
Each of the JVC, Motorola, Benalcazar and Nextel hereby agrees to
execute and deliver all documents necessary to authorize, subscribe and pay for
the Capital Increase, including without limitation minutes of the meeting of
shareholders at which the Capital Increase was authorized.
7.10 NEXTEL INTERNATIONAL GUARANTEE
As partial consideration for the issuance of shares of JVC Common Stock
to Nextel hereunder, if Nextel shall have defaulted in the payment when due of
any amount required to be paid by Nextel under this Agreement, and such default
shall remain uncured 10 days following written notice by any other party hereto,
then Nextel International shall within five days after delivery of written
notice by such other party pay the amount not so paid.
7.11 OTHER COOPERATION
All parties hereto shall fully cooperate with the other parties hereto
and their legal counsel and accountants in connection with, any other steps
reasonably required to be taken as part of the obligations of the parties under
this Agreement and any of the other Transaction Agreements or to promptly
satisfy the conditions precedent hereunder.
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH PARTY
The obligations of each party to perform and observe the covenants,
agreements and conditions hereof to be performed and observed by it on or before
the Closing Date shall be subject to the satisfaction of the following
conditions, any of which may be expressly waived in writing by such party:
8.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES
The representations and warranties of the other parties contained
herein (including applicable Schedules hereto) shall have been true in all
material respects when made and shall be true in all material respects on and as
of the Closing Date with the same force and effect as though made on and as of
such date, except as affected by transactions contemplated hereby and except to
the extent that any such representations and warranties shall have been made as
of a specified date, in which case such representations and warranties shall
have been true as of the specified date.
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8.2 PERFORMANCE OF AGREEMENT
Each of the other parties shall have performed in all material respects
all obligations and agreements and complied in all material respects with all
covenants and conditions contained in this Agreement to be performed and
complied with it on or before the Closing Date.
8.3 APPROVALS AND CONSENTS
All material approvals and consents listed on Schedules 3.3, 4.3, 5.3,
6.3 and 7.3 and required for the other parties to perform their obligations
hereunder shall have been obtained on or before the Closing Date and shall
remain in effect as of the Closing Date.
8.4 OFFICERS' CERTIFICATES
At the Closing Date, each party shall have received certificates from a
Vice President and the Secretary or Assistant Secretary of each of the other
corporate parties and from Benalcazar dated as of such date, in substantially
the form attached as Exhibit 8.4, certifying that (a) all the conditions set
forth in this Article VIII applicable to such party have been fulfilled and (b)
the representations and warranties of such party, herein are true and correct in
all material respects as of the Closing Date.
8.5 SHAREHOLDERS AGREEMENT
Each of the other parties shall have entered into the Shareholders
Agreement in the form of Exhibit 8.5 on or before the Closing Date.
8.6 REGISTRATION RIGHTS AGREEMENT
Each of the other parties shall have entered into the Registration
Rights Agreement in the form of Exhibit 8.6 on or before the Closing Date.
8.7 LEGAL PROCEEDINGS
On the Closing Date, no law, regulation, administrative ruling or order
of any court or administrative agency of competent jurisdiction shall be in
effect that enjoins, restrains or prohibits consummation of this Agreement, and
no litigation, investigation or administrative proceeding shall be reasonably
likely to enjoin, restrain or prohibit consummation of this Agreement.
8.8 BUSINESS PLAN
Each party shall have agreed upon and approved a three-year business
plan related to the Business (the "Business Plan").
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8.9 DIVISION OF MASTER COMMUNICATIONS
Benalcazar shall have caused the division of Master Communications such
that following such division the sole assets of Master Communications shall be
100% of the capital stock of Mastercom Trunking, less one share, and the assets
listed in Schedule 3.12(a). Benalcazar shall have delivered the public deed
evidencing such division, inscribed by the Public Register, to the other parties
hereto.
8.10 CONFIDENTIALITY, NONCOMPETITION AND PROPRIETARY INFORMATION AGREEMENTS
On or before the Closing Date, all high-level officers, directors and
employees of the JVC and the JVC Subsidiaries shall have entered into
confidentiality agreements, noncompetition agreements and proprietary
information agreements relating to SMR services and operations in Peru
substantially in the form attached hereto as Exhibit 8.10.
8.11 OPINIONS OF COUNSEL
On or before the Closing Date: (a) Nextel and Benalcazar shall have
received opinions of counsel to (i) Motorola in the United States and Peru and
(ii) the JVC in Peru, and (b) Nextel and Motorola shall have received opinions
of counsel to (i) Benalcazar in Peru and (ii) the JVC in Peru, each of which
shall be substantially in the form attached hereto as Exhibit 8.11.
8.12 TITLE
To the extent any Liens exist on the JVC Assets, Motorola and/or
Benalcazar, as applicable shall have caused the JVC or the JVC Subsidiaries to
have obtained the release of all Liens on the JVC Assets, other than Permitted
Liens, on or before the Closing Date.
8.13 DOCUMENTATION RELATING TO THE CONCESSIONS
Nextel, Motorola and Benalcazar, as applicable, shall have received a
true and complete copy of each document granting the Concession with respect to
each Channel.
8.14 THIRD PARTY CONSENTS
Benalcazar shall have caused each other Person who is a shareholder of
Master Communications and General Radio to have executed such documents as shall
be necessary or desirable to cause the transfer of the capital stock of such
entities to the JVC and to have waived any and all preemptive rights or other
rights to acquire shares of the capital stock of such entities. Benalcazar shall
have caused each other Person who is a shareholder of Mastercom Trunking to have
executed such documents as shall be necessary or desirable to cause the transfer
of the capital stock of Mastercom Trunking to Master Communications and to have
waived any and all preemptive rights or other rights to acquire shares of the
capital stock of Mastercom Trunking. Motorola shall have caused each other
Person who is a shareholder of Dualcom and Radionet to have executed such
documents as shall be necessary or desirable to cause the transfer of the
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capital stock of such entities to the JVC and to have waived any and all
preemptive rights or other rights to acquire shares of the capital stock of such
entities.
8.15 PLEDGE AGREEMENTS
Each of Motorola, Benalcazar and the JVC shall have entered into the
Pledge Agreements in the form of Exhibit 8.15 on or before the Closing Date.
8.16 LEGAL STABILITY AGREEMENTS
Each of Nextel, Motorola and the JVC shall have applied for a Legal
Stability Agreement with Peru in the form of Exhibit 8.16 on or before the
Closing Date.
ARTICLE IX
ADDITIONAL CONDITIONS PRECEDENT TO OBLIGATIONS OF NEXTEL
The obligations of Nextel to perform and observe the covenants,
agreements and conditions hereof to be performed and observed by it on or before
the Closing Date shall be subject to the satisfaction of the following
conditions, any of which may be expressly waived in writing by it:
9.1 AFFILIATE TRANSACTIONS
All loans and other transactions between Motorola or Benalcazar and
their respective Affiliates, on the one hand, and the JVC or the JVC
Subsidiaries, on the other hand, shall have been terminated on or prior to the
Closing Date, except for the tower site lease, sales agency agreement and
maintenance agreement between the JVC or the JVC Subsidiaries and Grupo
Mastercom S.A., the forms of which are attached hereto as Exhibit 9.1A, Exhibit
9.1B and Exhibit 9.1C, respectively.
9.2 EMPLOYEES, CONSULTANTS, DIRECTORS AND ATTORNEY-IN-FACT OF THE JVC
All employees, consultants, directors and attorneys-in-fact of the JVC
designated by Nextel for resignation or removal shall have resigned or have been
removed from their respective positions.
ARTICLE X
INDEMNIFICATION AND SURVIVAL OF WARRANTIES
10.1 INDEMNIFICATION BY MOTOROLA
Motorola irrevocably and unconditionally agrees to indemnify and hold
harmless, on an after-tax basis, Nextel, Benalcazar (except in Benalcazar's case
with respect to clause (a)(ii) below), and their respective successors and
permitted assigns, and the officers, directors, Affiliates, employees,
Controlling Persons and agents of the foregoing, and to hold each such
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party harmless against and in respect of any and all losses, damages, costs and
expenses, including, subject to the provisions of Section 10.6, reasonable
attorneys' fees ("Damages") incurred by any such party directly as a result of
(a) the breach of any of the representations or warranties (i) made in this
Agreement by Motorola or (ii) made in Article III of this Agreement by
Benalcazar (subject to Motorola's secondary right to indemnification provided in
Section 10.4 hereto), (b) the breach by Motorola or the JVC of any covenants or
undertaking contained herein or in any other exhibit, schedule or amendment
hereto, or in any officers' certificate or other certificate delivered to the
other parties hereto at or in connection with the Closing (c) the termination or
resignation of any current or former employee of Dualcom or Radionet during the
90 days following the Closing Date or (d) the failure of Radionet or Dualcom to
have properly filed any amendments or modifications to their respective Minimum
Expansion Plans or the failure of Radionet or Dualcom to have properly paid
their respective annual Canons as required by the MTC, which failure directly
results in Damages to any indemnified party; provided that Motorola's liability
under this Section 10.1(d) shall not exceed $16,000,000.
10.2 PRIMARY INDEMNIFICATION BY BENALCAZAR
Benalcazar irrevocably and unconditionally agrees to indemnify and hold
harmless, on an after-tax basis, Nextel, Motorola (except in Motorola's case
with respect to clause (a)(ii) below), and their respective successors and
permitted assigns, and the officers, directors, Affiliates, employees,
Controlling Persons and agents of the foregoing, and to hold each such party
harmless against and in respect of any and all Damages incurred by any such
party directly as a result of (a) the breach of any of the representations or
warranties (i) made in this Agreement by Benalcazar or (ii) made in Article III
of this Agreement by Motorola (subject to Benalcazar's secondary right to
indemnification provided in Section 10.5 hereto), (b) the breach by Benalcazar
or the JVC of any covenants or undertaking contained herein or in any other
exhibit, schedule or amendment hereto, or in any officers' certificate or other
certificate delivered to the other parties hereto at or in connection with the
Closing or (c) the termination or resignation of any current or former employee
of General Radio, Master Communications or Mastercom Trunking during the 90 days
following the Closing Date or (d) the failure of General Radio, Master
Communications or Mastercom Trunking to have properly filed or any amendments of
modifications to their respective Minimum Expansion Plans or the failure of
General Radio, Master Communications or Mastercom Trunking to have properly paid
their respective annual Canons as required by the MTC, which failure directly
results in Damages to any indemnified party; provided that Benalcazar's
liability under this Section 10.2(d) shall not exceed $16,000,000.
10.3 INDEMNIFICATION BY NEXTEL
Nextel irrevocably and unconditionally agrees to indemnify and hold
harmless, on an after-tax basis, Motorola, Benalcazar, and their respective
successors and permitted assigns, and the officers, directors, Affiliates,
employees, Controlling Persons and agents of the foregoing, and to hold each
such party harmless against and in respect of any and all Damages incurred by
such party directly as a result of (a) the breach of any of the representations
or warranties made in this Agreement by Nextel, or (b) the breach by Nextel of
any covenant or undertaking contained
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herein, in any other exhibit, schedule or amendment hereto, or in any officers'
certificate or other certificates delivered to Motorola at or in connection with
the Closing.
10.4 SECONDARY INDEMNIFICATION BY BENALCAZAR OF MOTOROLA
Benalcazar irrevocably and unconditionally agrees to indemnify and hold
harmless, on an after-tax basis, Motorola, and its respective successors and
permitted assigns, and the officers, directors, Affiliates, employees,
Controlling Persons and agents of the foregoing, and to hold each such party
harmless against and in respect of any and all Damages incurred by any such
party directly or indirectly as a result of the breach of any of the
representations or warranties made in this Agreement by Benalcazar for which a
claim is made against Motorola pursuant to its indemnification obligations set
forth in Section 10.1 hereof or pursuant to the failure of Benalcazar to make
any payment required to be made pursuant to Section 2.3 with respect to General
Radio, Master Communications or Mastercom Trunking. The parties hereto
acknowledge that this secondary indemnification is being granted by Benalcazar
as a result of Motorola's agreement to indemnify Nextel for breaches of
representations and warranties made in Article III of this Agreement by
Benalcazar. The parties hereto further acknowledge that this secondary
indemnification obligation of Benalcazar shall be secured by a pledge of certain
of Benalcazar's shares of the JVC Common Stock, as further described in Section
10.8.
10.5 SECONDARY INDEMNIFICATION BY MOTOROLA OF BENALCAZAR
Motorola irrevocably and unconditionally agrees to indemnify and hold
harmless, on an after-tax basis, Benalcazar, and his respective heirs and
permitted assigns, and the Affiliates and agents of the foregoing, and to hold
each such party harmless against and in respect of any and all Damages, incurred
by any such party directly or indirectly as a result of the breach of any of the
representations or warranties made in this Agreement by Motorola for which a
claim is made against Benalcazar pursuant to its indemnification obligations set
forth in Section 10.2 hereof or pursuant to the failure of Motorola to make any
payment required to be made pursuant to Section 2.3 with respect to Dualcom or
Radionet. The parties hereto acknowledge that this secondary indemnification is
being granted by Motorola as a result of Benalcazar's agreement to indemnify
Nextel for breaches of representations and warranties made in Article III of
this Agreement by Motorola. The parties hereto further acknowledge that this
secondary indemnification obligation of Motorola shall be secured by a pledge of
certain of Motorola's shares of the JVC Common Stock, as further described in
Section 10.8
10.6 PROCEDURE
With respect to the claims made by third parties (which for purposes of
the indemnification pursuant to Sections 10.4 and 10.5 shall include Nextel), if
Nextel, Benalcazar or Motorola is threatened with any claim, or any such claim
is presented to or any action or proceeding commenced, that may give rise to the
right of indemnification hereunder, Nextel, Benalcazar or Motorola, as the case
may be (the "Indemnitee"), will give written notice thereof promptly (and in no
event later than the last survival date of the representation and warranty for
the breach of which indemnification is sought) to the party or parties bearing
the indemnification obligation (the "Indemnifying Party"); provided, however,
that the failure to give notice in
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accordance with this Section 10.6 shall not prevent enforcement hereunder if
such failure is not prejudicial to the Indemnifying Party. The Indemnifying
Party shall have the right to participate in the defense of such claim, action
or proceeding, and, to the extent the Indemnifying Party so desires, jointly
with any other Indemnifying Party similarly notified, to assume the defense
thereof with counsel mutually satisfactory to such parties and the Indemnitee,
in which case every Indemnitee shall have the right to participate through
counsel of its own choosing (and whose fees and expenses shall by paid by such
Indemnitee). If the Indemnifying Party and the Indemnitee agree upon mutually
satisfactory counsel to assume the defense, the Indemnifying Party shall assume
the obligation to pay such counsel's fees and expenses and shall no longer
assume the obligation to pay the Indemnitee's attorneys' fees and expenses. If
the Indemnifying Party undertakes to compromise or defend any such liability,
the Indemnifying Party shall so notify the Indemnitee in writing promptly of its
intention to do so, and the Indemnitee shall cooperate with the Indemnifying
Party and its counsel in the compromising of or the defending against any such
liabilities or claims, at the expense of the Indemnifying Party. Such
cooperation shall include, but shall not be limited to, the provision to the
Indemnifying Party of reasonable access to the Indemnitee's business records,
research, documents and employees as they relate to the defense of any
indemnified claim. In response to a bona fide settlement offer, the Indemnifying
Party may settle the monetary portion of an indemnifiable matter without the
consent of the Indemnitee provided that such settlement (i) includes as an
unconditional term thereof the giving by the plaintiff or claimant to the
Indemnitee of a release from all liability in respect of such claim or
litigation, (ii) provides that the Indemnitee does not admit any guilt or fault
with respect to the subject matter of such claim or litigation, and (iii) does
not involve injunctive or other equitable relief.
10.7 SURVIVAL
The covenants, agreements, representations and warranties made by the
parties in or pursuant to this Agreement shall survive until the second
anniversary of the Closing, except as otherwise set forth herein. The
representations and warranties made by Motorola and Benalcazar in Sections 3.4
and 3.11 shall survive until the expiration of the relevant statute of
limitation under Peruvian law. The agreements contained in this Article X shall
survive until the second anniversary of the Closing (except with respect to the
agreements contained in the preceding sentence which shall survive until the
expiration of the relevant statute of limitation); provided that any claim for
indemnification asserted in accordance with the provisions of this Agreement
prior to the relevant expiration date shall survive until it is resolved.
10.8 SECURITY FOR SECONDARY INDEMNIFICATION RIGHTS
(a) Subject to any pledge to a third-party lender as required by the
Shareholders Agreement, Benalcazar shall pledge, as collateral security for the
obligations of Benalcazar to indemnify Motorola pursuant to this Agreement, to
Motorola all of his shares of the JVC Common Stock by executing that certain
Pledge Agreement, dated of even date herewith, by and among the JVC, as agent,
Benalcazar and Motorola (the "Benalcazar Pledge Agreement").
- 36 -
<PAGE> 43
(b) Subject to any pledge to a third-party lender as required by the
Shareholders Agreement, Motorola shall pledge, as collateral security for the
obligations of Motorola to indemnify Benalcazar pursuant to this Agreement, to
Benalcazar one half of its shares of the JVC Common Stock by executing that
certain Pledge Agreement, dated of even date herewith, by and among the JVC, as
agent, Benalcazar and Motorola (the "Motorola Pledge Agreement" and together
with the Benalcazar Pledge Agreement, the "Pledge Agreements").
(c) The Pledge Agreements shall remain in full force and effect until
the second anniversary of the Closing, provided, however, that if any claim for
indemnification is pending at the end of such term the applicable Pledge
Agreement shall remain in full force and effect until such claim is resolved.
(d) Each of Motorola and Benalcazar agree to subordinate their
interests under the applicable Pledge Agreement in connection with any third
party debt financing of the JVC.
ARTICLE XI
TERMINATION
11.1 TERMINATION
This Agreement may be terminated and the transactions contemplated
hereby may be abandoned at any time prior to the Closing Date:
(a) by mutual written consent duly authorized by Nextel, Benalcazar,
Motorola and the JVC; or
(b) by any of Nextel, Benalcazar, Motorola or the JVC if the Closing
shall not have occurred by January 29, 1998; provided, however, that the right
to terminate this Agreement under this Section 11.1(b) shall not be available to
any party whose failure to fulfill any obligation under this Agreement has been
the cause of or resulted in the failure of the transactions contemplated hereby
to occur on or before such date; or
(c) by any of Nextel, Benalcazar, Motorola or the JVC if a court of
competent jurisdiction or governmental authority shall have issued a
nonappealable final order, decree or ruling or taken any other action, in each
case having the effect of permanently restraining, enjoining or otherwise
prohibiting the transactions contemplated hereby; or
(d) by any party hereto upon a breach of any representation, warranty,
covenant or agreement on the part of any other party hereto set forth in this
Agreement (other than a breach which is also a breach by the party purporting to
terminate this Agreement) such that the conditions set forth in Section 8.1 or
8.2 would not be satisfied and such breach shall not have been remedied within
ten days following receipt of notice of such breach from the party seeking to
terminate this Agreement; or
- 37 -
<PAGE> 44
(e) by any party hereto if any representation or warranty of any other
party hereto in this Agreement shall have become untrue such that the conditions
set forth in Article VIII or IX, as the case may be, cannot reasonably be
expected to be satisfied by the date set forth in Section 11.1(b).
11.2 EFFECT OF TERMINATION
In the event of any termination pursuant to this Article XI (other than
pursuant to Section 11.1(a) or (b)): (a) written notice setting forth the
reasons therefor shall forthwith be given by the terminating party to the other
parties hereto, and (b) no party shall have any liability to the other parties
of any nature whatsoever due to such termination, except for damages resulting
from a willful breach by any party.
ARTICLE XII
GENERAL
12.1 EXPENSES
Regardless of whether the transactions contemplated by this Agreement
are consummated, each of Nextel, Motorola and Benalcazar shall pay its own fees,
costs and expenses, incident to the negotiation, preparation and carrying out of
this Agreement.
12.2 AMENDMENT
The parties hereto may amend, modify or supplement this Agreement at
any time, but only in a written amendment duly executed on behalf of each of the
parties.
12.3 HEADINGS
The headings preceding the text of Sections of this Agreement are for
convenience only and shall not be deemed parts thereof.
12.4 APPLICABLE LAW
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware, as applied to contracts
executed and to be fully performed in such state.
12.5 PARTIES IN INTEREST
All of the terms and provisions of this Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective successors and
permitted assigns of the parties hereto, whether herein so expressed or not.
This Agreement shall not be assigned by any party hereto in whole or in part
without the prior written consent of the other parties hereto; provided,
however, that any party may at any time, without the consent of the other
parties, assign all or part of its right, title and interest in, to and under
this Agreement and the documents, agreements
- 38 -
<PAGE> 45
and supporting papers delivered in connection herewith to any Affiliate of such
party that agrees in writing to be bound by the provisions hereof; provided that
the parties hereto shall retain all liabilities under this Agreement unless
otherwise agreed by all of the parties hereto.
12.6 DISPUTE RESOLUTION.
(a) Arbitration. All disputes arising out of or in connection with this
Agreement or the performance hereof shall be resolved by submission to binding
arbitration under the Rules for Arbitration of the International Chamber of
Commerce (the "ICC").
(b) Notice of Demand for Arbitration. Notice of demand for arbitration
shall be filed in writing with the other parties and with the ICC. In no event
shall the demand for arbitration be made after the date when the applicable
statute of limitations would bar institution of a legal or equitable proceeding
based on such claim, dispute or other matter in question.
(c) Arbitration Proceedings. Unless the parties agree otherwise, the
arbitration hearing shall be conducted in Miami, Florida, United States, in the
English language, before a panel of three arbitrators, one selected by each of
the parties to the dispute and the third selected by mutual agreement of the
parties, and failing their agreement, pursuant to the rules of the ICC. The
arbitrators shall not be empowered to grant exemplary or punitive damages. Upon
the request of a party, the arbitrators' written decision shall include an
explanation of the factual and legal grounds for the decision.
(d) Motions to Reconsider. Within fifteen days of receipt of the
arbitrators' decision, a party may file with the arbitrators and serve on the
other parties a written motion to reconsider. The arbitrators may request the
non-moving or responding party to file a written response within ten days after
receipt of that request, and the arbitrators thereupon will reconsider the
issues raised by the motion and response (if any) and either confirm or alter
their decision, which will then be final, binding and conclusive upon the
parties. The costs of such a motion for reconsideration, including attorneys'
fees, will be awarded against the moving party if it does not prevail.
(e) Finality. The decision rendered by the arbitrators shall be final,
and judgment may be entered upon it in accordance with applicable law in any
court having jurisdiction thereof.
(f) Consolidation, Joinder and Third Party Claim. Any arbitration
arising out of or related to this Agreement or any other agreements between the
parties or their Affiliates relating to the wireless telecommunications business
in Peru may, upon demand of a party, include by consolidation, joinder or
third-party claims any other party involved in a common question of law or fact
whose presence is required if complete relief is to be accorded in arbitration
or who is alleged to be liable to a party for all or part of a claim in the
arbitration. Each party agrees that the others may join it as a party to any
litigation or arbitration involving such party's alleged fault.
- 39 -
<PAGE> 46
12.7 WAIVERS
Any terms, covenants, representations, warranties or agreements of any
party hereto may be waived at any time by an instrument in writing executed by
the party for whose benefit such terms exist. The failure of any party at any
time or times to require performance of any provisions hereof shall in no manner
affect its right at a later time to enforce the same. No waiver by any party of
any condition or breach of any terms, covenants, representations, warranties or
agreements contained in this Agreement shall be effective unless in writing, and
no waiver in any one or more instances shall be deemed to be a further or
continuing waiver of any other condition or any breach of any other terms,
covenants, representations, warranties or agreements.
12.8 NOTICES
Any notice or demand desired or required to be given hereunder shall be
in writing and deemed given when personally delivered or deposited in the mail,
postage prepaid, sent certified or registered, or when delivered by facsimile,
and addressed as respectively set forth below, or to such other address as any
party shall have previously designated by such a notice. Any notice so delivered
personally or by facsimile, transmission confirmed, shall be deemed to be
received on the date of delivery and any notice so mailed shall be deemed to be
received three days after the date on which it was mailed.
Notices to the parties shall be sent as follows:
(a) To Nextel or Nextel International:
Nextel International, Inc.
1191 Second Avenue, Suite 1600
Seattle, WA 98101
Attention: General Counsel
Fax: (206) 749-8384
with a copy to:
Venture Law Group
4750 Carillon Point
Kirkland, WA 98033
Attention: Craig E. Sherman
Fax: (206) 739-8750
File #: 15799-014
- 40 -
<PAGE> 47
(b) To Motorola:
Motorola International Development Corporation
c/o Motorola, Inc.
1301 E. Algonquin Road
Schaumburg, Illinois 60196-1078
Attention: John Bonadurer III and DeWayne Youngberg
Fax: (847) 576-9179
with a copy to:
Motorola, Inc. General Counsel
Fax: (847) 576-3628
(c) To Benalcazar:
Oscar Benalcazar Coz
c/o Mastercom S.A.
Av. Arequipa 3908, Miraflores
Lima, Peru
Fax: 011-51-1-442-9483
(d) To the JVC:
Valorcom S.A.
c/o Nextel International, Inc.
1191 Second Avenue, Suite 1600
Seattle, WA 98101
Attention: General Counsel
Fax: (206) 749-8384
12.9 ENTIRE UNDERSTANDING
The terms set forth in this Agreement and the other Transaction
Agreements are intended by the parties as a final, complete and exclusive
expression of the terms of their agreement and may not be contradicted,
explained or supplemented by evidence of any prior agreement, any
contemporaneous oral agreement or any consistent additional terms.
12.10 COUNTERPARTS
This Agreement may be executed simultaneously in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[Signature page follows.]
- 41 -
<PAGE> 48
IN WITNESS WHEREOF, the parties hereto have entered into and signed
this Agreement as of the date and year first above written.
VALORCOM S.A.
By /s/ RICHARD KAMPA
--------------------------------
Its GENERAL MANAGER
-------------------------------
NEXTEL INTERNATIONAL (PERU), LLC
By /s/ BRIAN A. VINCENT
--------------------------------
Its VICE PRESIDENT
-------------------------------
MOTOROLA INTERNATIONAL
DEVELOPMENT CORPORATION
By /s/ JAMES L. OSBORN
--------------------------------
Its ATTORNEY-IN-FACT
-------------------------------
/s/ OSCAR BENALCAZAR COZ
----------------------------------
OSCAR BENALCAZAR COZ
NEXTEL INTERNATIONAL, INC.
By /s/ BRIAN A. VINCENT
--------------------------------
Its VICE PRESIDENT
-------------------------------
[SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT]
<PAGE> 49
EXHIBIT 2.1(b)(v)
PAYMENT SCHEDULE
(all figures in thousands)
<TABLE>
<CAPTION>
Party Closing ("C") C + 30 days C+60 days C+90 days C+120 days C+150 days C+170* days
- ----- ------------- ----------- --------- --------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Nextel $6,965 $2,117 $481 $2,301 $7,579 $4,268 $4,149
</TABLE>
*It is estimated that this amount will fund the JVC's operations through 170
days following Closing and it is anticipated that additional capital calls will
be required as of this date (or sooner if the JVC's burn rate exceeds current
estimates).
Nextel shall make such payments to the JVC within fifteen days of the day
indicated above.
<PAGE> 1
EXHIBIT 10.3
SHAREHOLDERS AGREEMENT
BY AND AMONG
VALORCOM S.A.,
NEXTEL INTERNATIONAL (PERU), LLC,
MOTOROLA INTERNATIONAL DEVELOPMENT CORPORATION,
OSCAR BENALCAZAR COZ
AND
NEXTEL INTERNATIONAL, INC.
DATED AS OF JANUARY 29, 1998
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitional Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2. Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.1 Election and Removal of Members of Board of Directors . . . . . . . . . . . . . . . . 5
2.2 Board Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.3 Board Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.4 Shareholder Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.5 Affiliate Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.6 By-laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.7 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.8 Changes in Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3. Transferability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.1 Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.2 Right of First Refusal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.3 Tag-Along Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.4 Drag-Along Rights of Nextel . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.5 No Other Transfer Effective . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.6 Transfer of Capital Stock of Subsidiaries . . . . . . . . . . . . . . . . . . . . . 14
4. Preemptive Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5. Capital Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.1 Notice of Capital Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.2 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.3 Failure to Make Capital Contributions . . . . . . . . . . . . . . . . . . . . . . . 15
5.4 Call Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.5 Exceptions from Call . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.6 Guarantees; Pledges of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6. Call by Shareholders and the Company upon Breach . . . . . . . . . . . . . . . . . . . . . . . 18
7. Acquisition of ESMR Infrastructure Equipment . . . . . . . . . . . . . . . . . . . . . . . . . 19
8. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9. Noncompetition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
10. NII Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
12. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
13. Regulatory Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
14. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
14.1 Specific Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
14.2 Delivery of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
14.3 Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
14.4 Environmental Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
14.5 Employment Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
14.6 Quality Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
PERU SHAREHOLDERS AGREEMENT
<PAGE> 3
<TABLE>
<S> <C>
14.7 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
14.8 Entire Agreement; Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . 25
14.9 Governing Law; Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . 25
14.10 Dispute Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
14.11 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
14.12 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
14.13 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
14.14 Nextel's Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . 26
14.15 Government Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
</TABLE>
PERU SHAREHOLDERS AGREEMENT
-2-
<PAGE> 4
VALORCOM S.A.
SHAREHOLDERS AGREEMENT
THIS SHAREHOLDERS AGREEMENT (this "AGREEMENT") is made as of January
29, 1998, by and among VALORCOM S.A., a Peruvian corporation (to be renamed
NEXTEL del PERU S.A.) (the "COMPANY"), and the Persons listed as Shareholders
on Exhibit I attached hereto, as amended from time to time, including as of the
date hereof NEXTEL INTERNATIONAL (PERU), LLC, a Cayman Islands limited life
company (including any successor thereto, "NEXTEL"), MOTOROLA INTERNATIONAL
DEVELOPMENT CORPORATION, a Delaware corporation, ("MOTOROLA") and OSCAR
BENALCAZAR COZ, a Peruvian citizen ("BENALCAZAR") (collectively, the
"SHAREHOLDERS" and, individually, a "SHAREHOLDER"), and NEXTEL INTERNATIONAL,
INC., a Washington corporation and indirect owner of 100% of the capital stock
of Nextel ("NII").
RECITALS
A. The Company was formed as a corporation under the laws of
Peru, effective November 18, 1997.
B. The outstanding Shares are held as follows:
<TABLE>
<CAPTION>
Shareholder Percentage
----------- ----------
<S> <C>
Nextel 70.05%
Motorola 19.95%
Benalcazar 10.00%
</TABLE>
C. The Shareholders and the Company desire to enter into this
Agreement to provide for Nextel's day-to-day operational control of the Company
and its subsidiaries and the transferability of the shares of Common Stock of
the Company, S/.1.00 each (the "SHARES").
AGREEMENT
NOW, THEREFORE, for good and valuable consideration the receipt and
sufficiency of which are acknowledged and to further the interests of the
Company and its present and future Shareholders, the parties agree as follows:
1. DEFINITIONS.
1.1 DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings:
"AFFILIATE" of any Person (the "SUBJECT") means any
other Person which, directly or indirectly, Controls or is Controlled by or is
under common Control with the Subject. Notwithstanding the foregoing, unless
otherwise set forth herein the Company
PERU SHAREHOLDERS AGREEMENT
<PAGE> 5
shall be deemed not to be an Affiliate of any Shareholder of the Company for
purposes of this Agreement.
"AGREEMENT" has the meaning set forth in the
introductory paragraph.
"APPRAISED FAIR MARKET VALUE" means the price that
an unrelated third party would pay if it were to acquire all outstanding Shares
(including all outstanding vested options at the stated exercise price thereof)
in an arm's-length transaction (assuming that the Shares were being sold in a
manner designed to attract all possible participants and taking into
consideration a control premium or a minority discount, as appropriate) as
determined by the appraisal procedures set forth in Section 2.2(c).
"BENALCAZAR" has the meaning set forth in the
introductory paragraph.
"BOARD" means the Board of Directors of the Company.
"BREACH NOTICE" has the meaning set forth in Section
6(a).
"BREACHING SHAREHOLDER" has the meaning set forth in
Section 6(a).
"BREACHING SHAREHOLDER'S SHARES" has the meaning set
forth in Section 6(a).
"BUSINESS DAY" means any day other than a Saturday,
Sunday or a day on which commercial banks in New York, New York or Lima, Peru
are authorized to close.
"BUSINESS PLAN" has the meaning set forth in Section
2.2(a)(ii).
"BUYER" has the meaning set forth in Section 3.4(a).
"CALL PRICE" has the meaning set forth in Section
5.3(d).
"CALL RIGHT" has the meaning set forth in Section
5.3(d).
"CALLING SHAREHOLDER" has the meaning set forth in
Section 5.4(a).
"COMPANY" has the meaning set forth in the
introductory paragraph.
"CONFIDENTIALITY AGREEMENT" has the meaning set froth
in the Stock Purchase Agreement.
"CONFIRMATION DATE" has the meaning set forth in
Section 6(a).
"CONTROL" (including, with correlative meanings, the
terms "Controlled by" and "under common Control with"), as used with respect to
any Person,
PERU SHAREHOLDERS AGREEMENT
-2-
<PAGE> 6
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through
the ownership of voting securities or by contract or otherwise; provided that
any Shareholder which together with its Affiliates owns more Shares than any
other Shareholder (together with its Affiliates) shall be deemed to Control the
Company.
"CONTRIBUTED CAPITAL" has the meaning set forth in
Section 2.8.
"DEFAULTING SHAREHOLDER" has the meaning set forth in
Section 5.3.
"DIRECTOR" means a member of the Board.
"DISPUTING SHAREHOLDER" has the meaning set forth in
Section 2.2(c).
"ESMR" means enhanced SMR.
"ESMR EQUIPMENT" has the meaning set forth in Section
7(a).
"EXERCISING SHAREHOLDER" has the meaning set forth in
Section 5.3(c).
"FIRST APPRAISER" has the meaning set forth in
Section 2.2(c).
"FREE CASH FLOW" means the sum of net income and
depreciation and amortization of the Company, less (i) capital expenditures and
(ii) changes in working capital, all in accordance with U.S. GAAP.
"ICC" has the meaning set forth in Section 14.10(a).
"INFLATION INDEX" has the meaning set forth in
Section 2.2(b).
"MINORITY SHAREHOLDER" means any Shareholder that
does not Control the Company.
"MOTOROLA" has the meaning set forth in the
introductory paragraph.
"MOTOROLA NOTICE" has the meaning set forth in
Section 7(c).
"NEXTEL" has the meaning set forth in the
introductory paragraph.
"NII" has the meaning set forth in the Recitals.
"NONBREACHING SHAREHOLDER" has the meaning set forth
in Section 6(a).
"NONDEFAULTING SHAREHOLDERS" has the meaning set
forth in Section 5.3(c).
PERU SHAREHOLDERS AGREEMENT
-3-
<PAGE> 7
"NOTICE" has the meaning set forth in Section 5.3(c).
"OBJECTING SHAREHOLDER" has the meaning set forth in
Section 2.2(b).
"OFFER" has the meaning set forth in Section 3.2(b).
"OFFERED SHARES" has the meaning set forth in Section
3.2(b).
"OFFEREE" has the meaning set forth in Section
3.2(b).
"PAYMENT DATE" has the meaning set forth in Section
5.1.
"PERSON" means any individual, partnership, limited
liability company, joint-stock company, firm, corporation, association,
unincorporated organization, joint venture, trust or other entity.
"PERUVIAN GAAP" has the meaning set forth in Section
14.2(a).
"PLEDGE AGREEMENTS" has the meaning set forth in the
Stock Purchase Agreement.
"PROPOSED SHARES" has the meaning set forth in
Section 3.3(b).
"REGISTRATION RIGHTS AGREEMENT" has the meaning set
forth in the Stock Purchase Agreement.
"SALE" has the meaning set forth in Section 3.4(a).
"SECOND APPRAISER" has the meaning set forth in
Section 2.2(c).
"SELLING SHAREHOLDER" has the meaning set forth in
Section 3.1(a).
"SHAREHOLDER" has the meaning set forth in the
introductory paragraph.
"SHARES" has the meaning set forth in the Recitals.
"SMR" means specialized mobile radio ("servicio
troncalizado").
"STOCK PURCHASE AGREEMENT" means the Stock Purchase
Agreement dated as of January 29, 1998 by and among Nextel, MIDC, Benalcazar
and the Company.
"SUCCESSOR SHAREHOLDER" has the meaning set forth in
Section 3.1(c).
"TAG-ALONG OFFER" has the meaning set forth in
Section 3.3(a).
"TAG-ALONG SHARES" has the meaning set forth in
Section 3.3(a).
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"THIRD APPRAISER" has the meaning set forth in
Section 2.2(c).
"TRANSACTION AGREEMENTS" means this Agreement, the
Stock Purchase Agreement, the Registration Rights Agreement and the Pledge
Agreements.
"TRANSFER" has the meaning set forth in Section
3.1(a).
"U.S. GAAP" means U.S. generally accepted accounting
principles.
1.2 OTHER DEFINITIONAL MATTERS.
(a) The words "this Agreement," "hereby,"
"herein," "hereof," "hereunder" and words of similar import refer to this
Agreement as a whole and not to any particular provisions of this Agreement,
and the words "Article," "Section," "Schedule," "Exhibit" and like references
are to this Agreement unless otherwise specified.
(b) Singular and plural forms, as the case may
be, of terms defined herein have correlative meanings.
(c) Any defined term which relates to a document
includes within its definition any amendments, modifications, renewals,
restatements, extensions, supplements or substitutions which may heretofore
have been or which may hereafter be executed in accordance with the terms
thereof and as may be permitted by this Agreement.
(d) All references to "$" or "dollars" are to the
legal tender currency of the United States of America. All references to
"Nuevos Soles" are to the legal tender currency of Peru.
2. CORPORATE GOVERNANCE.
2.1 ELECTION AND REMOVAL OF MEMBERS OF BOARD OF DIRECTORS.
(a) The Board shall be composed of seven
Directors. In elections of Directors, the Shareholders shall vote for the
election of a list of candidates, whom the Company's Shareholders shall take
all necessary steps to nominate, as set forth below:
(i) so long as Nextel Controls the
Company, Nextel shall designate five candidates for election to the Board;
provided that if Nextel Controls the Company and owns at any time 60.05% or
less of the outstanding Shares, Nextel shall designate four candidates for
election to the Board,
(ii) so long as it owns 10% or more of
the outstanding Shares, each of Motorola, Benalcazar and any other Shareholder
owning 10% or more of the outstanding Shares, other than Nextel, shall
designate one candidate for election to the Board; provided that if Motorola
owns 29.95% or more of the outstanding Shares and no Shareholder other than
Nextel or Benalcazar owns 10% or more of the outstanding Shares, Motorola may
designate an additional candidate for election to the Board. If at any time
any
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Shareholder shall own less than 10% of the outstanding Shares, such Shareholder
shall cause the resignation of the Director who was designated for election by
such Shareholder, and the Shareholders shall elect a new Director, designated
for election by vote of a majority of the Shares owned by the Minority
Shareholders, to fill the resulting vacancy.
(b) Each Shareholder shall have the right to
remove any or all of the Directors designated for election by it at any time
and from time to time. If the Director who has been requested to resign by the
Shareholder that designated him or her refuses or fails to tender resignation
to the Company, then all of the Shareholders shall take appropriate action to
remove such Director from his or her office in accordance with the provisions
of the By-laws. If a Director designated for election by a Shareholder shall
be removed by such Shareholder or shall die or otherwise become incapable of
serving as a Director, then such Shareholder may designate a candidate for
election to fill the resulting vacancy.
2.2 BOARD APPROVALS.
(a) The following actions shall require the
approval at least five Directors (including each Director or Directors
designated for election by each Shareholder owning, individually or together
with its Affiliates, 19% or more of the outstanding Shares):
(i) participate in the selection of
senior management and approve (which approval shall not be unreasonably
withheld) such selection and the establishment of compensation for the members
of senior management (the Board shall give due consideration to any expatriate
employee of any Shareholder who is nominated for appointment to the senior
management team by any of the Shareholders);
(ii) adopt any three-year business plan
and budget, including any three-year budget for capital expenditures and
expenses, and any amendments thereto (collectively, the "BUSINESS PLAN"); the
initial Business Plan is attached hereto as Exhibit II and by their signature
hereto, each Shareholder hereby approves such Business Plan; and
(iii) approve any expenditures for any
year that would cause Free Cash Flow for such year to be more than 15% less
than that shown in the Business Plan then in effect;
provided, however, if at the expiration of any Business Plan, such Directors
shall not have agreed to a new Business Plan, the previous Business Plan shall
remain in effect for an additional six-month period while such Directors seek
to agree to a new Business Plan. At the end of such additional six-month
period, if such Directors still have not agreed to a new Business Plan, then
the Shareholders (other than the Minority Shareholder or Shareholders that
designated for election the Director or Directors that have not approved the
new Business Plan (each, an "OBJECTING SHAREHOLDER")) shall have the right to
purchase all, but not less than all, of the Objecting Shareholder's Shares at a
price equal to the Appraised Fair Market Value (as set forth below) of such
Shares (determined as of the end of such additional six- month period) owned by
the Objecting Shareholder upon ten days notice to
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the Objecting Shareholder. Any such purchase shall be on a pro rata basis
based on the number of Shares owned by the Shareholders electing to exercise
such purchase right. If payment is required under any guarantees provided by
the Objecting Shareholder pursuant to Section 5.6, the Shareholders electing to
exercise their purchase rights hereunder shall severally, based on the number
of Shares acquired by each purchasing Shareholder, indemnify the Objecting
Shareholder for up to 50% of any amounts paid by the Objecting Shareholder
under such guarantees.
(b) During the period that any new Business Plan
is being negotiated, each Director and each Shareholder shall be deemed to have
consented to, and each Shareholder will make, any capital contributions to the
Company to the minimum extent necessary to fund operating expenses, including
but not limited to working capital and capital expenditures, during such fiscal
year in an amount not to exceed 105%, increased to reflect the annual inflation
rate based on the Peruvian index of wholesale prices as determined by the INEI
(Indice de Precios al por Mayor) (the "INFLATION INDEX"), of the Company's
operating expenses shown in the approved Business Plan for the preceding fiscal
year (or if there was no approved Business Plan for the preceding fiscal year,
in an amount not to exceed the amount of operating expenses for the last full
fiscal year with an approved Business Plan, multiplied by 105% per annum,
increased to reflect the annual inflation rate based on the Inflation Index,
for each year since the date of such fiscal year). The Company shall provide a
draft Business Plan to the Shareholders at least three months prior to
expiration of the preceding Business Plan.
(c) "APPRAISED FAIR MARKET VALUE" shall be
determined in accordance with the following procedures:
(i) The Company shall select an
investment banking firm of recognized international standing (the "FIRST
APPRAISER"), which shall appraise the Appraised Fair Market Value and deliver
its appraisal to the Company and the Shareholders within 60 days of its
engagement. In reaching its determination of Appraised Fair Market Value, such
appraiser shall take into account the amount of financial leverage in the
Company's capital structure and shall consider whatever factors deemed
relevant, including actual and projected earnings, the price to earnings ratio,
the debt to equity ratio, the market value to book value ratio and the market
value to cash flow ratio of companies in the same industry in comparable
markets that are deemed reasonably comparable for this purpose.
(ii) If any Shareholder or Shareholders
having an interest therein shall disagree with the Appraised Fair Market Value
determined by such appraiser (a "DISPUTING SHAREHOLDER"), then the Disputing
Shareholder (or Shareholders acting jointly) shall have the right to appoint an
additional investment banking firm of recognized international standing (the
"SECOND APPRAISER"). If the Disputing Shareholder or Shareholders do not
engage a Second Appraiser within 30 days of the First Appraiser's delivery of
its appraisal, the First Appraiser's appraisal shall be the Appraised Fair
Market Value. If the Disputing Shareholder or Shareholders engage a Second
Appraiser, the Second Appraiser will appraise the Appraised Fair Market Value,
and deliver its appraisal to the
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Company and the Shareholders within 60 days of its engagement. If the
difference between the two appraisals is less than 10% of the lower appraised
value, then the Appraised Fair Market Value shall be the average of the two
appraisals.
(iii) If the difference is greater than or
equal to 10% of the lower appraised value and the Disputing Shareholder and the
Company cannot reach an agreement within ten (10) days, the two appraisers
shall engage a third independent investment banking firm of recognized
international standing (the "THIRD APPRAISER"), which shall appraise the
Appraised Fair Market Value within 60 days of its engagement. The Appraised
Fair Market Value shall be the average of the two of the three appraised values
which are closest in absolute U.S. dollars.
(iv) All appraisals of Appraised Fair
Market Value shall be as of the date of notice of exercise of the right. The
expenses of the First Appraiser shall be borne by the Company. Any investment
banking firm selected as an appraiser shall have no business, financial or
other relationship with any Shareholder unless consented to by each party in
interest. The expenses of the Second Appraiser, if any, shall be borne by the
Disputing Shareholder or Shareholders; and the expenses of the Third Appraiser,
if any, shall be borne equally by the Company and the Disputing Shareholder or
Shareholders.
2.3 BOARD MEETINGS. The Board shall meet at least once
each quarter. If any Director acts in violation of this Agreement, all the
Shareholders hereby agree to vote to remove such Director and the Shareholder
who designated such Director shall designate a replacement Director.
2.4 SHAREHOLDER MEETINGS. At all meetings of the
Shareholders, the parties hereto hereby agree to vote their respective Shares
in accordance with the provisions of this Agreement. Any Shareholder which
together with its Affiliates owns at least 19% of the outstanding Shares may
request that any of the actions approved by the Board of Directors in
accordance with Section 2.2 be ratified by a special Shareholder meeting;
provided that the approval by any Shareholder of any matter referred to in
Section 2.2(a)(i) shall not be unreasonably withheld. Upon receiving such
request in writing, the Company shall cause a special Shareholder meeting to be
held a soon as practically possible.
2.5 AFFILIATE TRANSACTIONS. All agreements between the
Company and its Affiliates (including for purposes of this Section 2.5
Shareholders and their Affiliates) will be entered into on such terms and
conditions as the Company would obtain in a disinterested, third party
transaction and must be approved by a majority of the Directors not designated
for election by the relevant Affiliate of the Company; provided that the
Director or Directors representing such Affiliate may participate in any
meetings at which such approval is considered; provided further that any such
Director or Directors will leave such meeting during discussion of such
approval if requested by a majority of the remaining Directors.
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2.6 BY-LAWS.
(a) The Shareholders hereby agree to amend the
By-laws within 45 days of the date hereof in order for the By-laws to comply
with both this Agreement and the recently amended Peruvian corporate law and
each Shareholder hereby agrees to take all action necessary to adopt such
amended By-laws. The By-laws shall reflect to the extent legally possible
under Peruvian corporate law all terms and conditions related to the Company
under this Agreement. In case of any discrepancy between the text of this
Agreement and the Company's By-laws, this Agreement shall prevail as between
the parties.
(b) So long as any Shareholder has satisfied its
obligations to make capital contributions to the Company, the Shareholders
shall not amend the By-laws in any manner that would have a material adverse
effect on the rights of such Shareholder without the consent of such
Shareholder, except as contemplated by Section 2.6(a).
2.7 SUBSIDIARIES. The Company and each Shareholder
hereby agree to use their best efforts to ensure that the Company's
subsidiaries comply with the provisions set forth herein.
2.8 CHANGES IN CAPITAL. Notwithstanding any other
provision of this Agreement to the contrary, if because of fluctuations in
foreign exchange rates, the sum of Nextel's payments to the Company in
accordance with Section 2.1(b)(vi) and Exhibit 2.1(b)(vi) of the Stock Purchase
Agreement, after converting such amounts into Nuevos Soles, and the payments
and capital contributions made by Motorola and Benalcazar pursuant to this
Section 2.1(b) (such sum being referred to as the "CONTRIBUTED CAPITAL") is
greater than the authorized capital of the Company after giving effect to the
Capital Increase (as defined in the Stock Purchase Agreement), each of the
parties hereto agrees to authorize an increase in the capital of the Company to
cover such excess and to issue without additional consideration such new share
capital of the Company to Nextel, Motorola and Benalcazar such that after such
issuance, their relative ownership of the Company is identical to the relative
ownership set forth on Exhibit I hereto. Notwithstanding any other provision
of this Agreement to the contrary, if because of fluctuations in foreign
exchange rates, the Contributed Capital is less than the authorized capital of
the Company after giving effect to the Capital Increase, each of Motorola and
Benalcazar agree, on a pro rata basis, to transfer without additional
consideration shares of Common Stock of the Company to Nextel such that after
such transfer the relative ownership of the Company is identical to the
relative ownership set forth on Exhibit I hereto.
3. TRANSFERABILITY.
3.1 TRANSFERS.
(a) A Shareholder may sell, assign, transfer,
pledge, hypothecate, mortgage, encumber, contribute to any Person, set in
usufruct or otherwise transfer to any Person (collectively, "TRANSFER,"
including, with correlative meanings, the terms "Transferring" and
"Transferred") all or any part of the Shares or other securities of the
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Company convertible into or exercisable for Shares only if (i) such Transfer is
the grant of a security interest to secure a bona fide third party financing
for the benefit of the Company or as contemplated by the Stock Purchase
Agreement, or (ii) such Transfer is to an Affiliate of such Shareholder or
(iii) the Shareholder proposing such a Transfer (the "SELLING SHAREHOLDER") has
complied with the provisions of this Agreement, including without limitation,
Section 3. A reference to these restrictions on transfer shall be noted on the
corporate charter, share registry and share certificates of the Company.
(b) If any Shareholder Transfers all or any part
of its Shares to an Affiliate, the transferor Shareholder shall remain
responsible to the other Shareholders for all of its duties and obligations
hereunder and hereby guarantees the performance by its transferee of all of
such transferor Shareholder's duties and obligations hereunder. If an
Affiliate to which Shares have been Transferred ceases to be an Affiliate of
such Shareholder, then such Affiliate shall, upon or prior to ceasing to be an
Affiliate, transfer such Shares back to the Shareholder from which it acquired
the Shares or to another Affiliate of such Shareholder.
(c) If, in accordance with the provisions of this
Agreement, a Shareholder Transfers its Shares to a transferee other than a
Shareholder (the "SUCCESSOR SHAREHOLDER"), the admission of the Successor
Shareholder as a shareholder of the Company shall be conditioned upon the
receipt by the Company of the following: (i) the Successor Shareholder's
agreement in writing to be bound by all of the terms of this Agreement,
assuming the rights, duties and obligations of the transferor Shareholder
hereunder and (ii) such other documents or instruments as may be required in
order to effect its admission as a Shareholder under this Agreement and
applicable law. Upon such Transfer, the transferor Shareholder shall cease to
be a Shareholder of the Company and shall have no further obligations
hereunder, except as set forth in Section 3.1(b).
(d) Notwithstanding the provisions of this
Article 3, in no event shall a Transfer be permitted to any Person who is
prohibited by law or regulation from being a participant in the Business.
(e) NII agrees that this Article 3 shall apply,
mutatis mutandis, to the Transfer of equity securities of Nextel as if such
securities were Shares and NII shall take all actions necessary to cause its
direct and indirect subsidiaries to comply with the provisions of this
Agreement in connection with any such Transfer.
(f) Notwithstanding any other provision of this
Article 3, during the six-month period beginning on the date hereof, Nextel or
its Affiliates may Transfer up to 20% of the outstanding Shares (the "AVAILABLE
SHARES") to any third party that is based in Peru and that is reasonably
acceptable to both Nextel and Motorola (a "NEW PERUVIAN PARTNER"), and such
Transfer shall not be subject to the restrictions set forth in this Article 3.
(g) Subject to Section 3.1(h), notwithstanding
any other provision of this Article 3, to the extent that a New Peruvian
Partner does not purchase all of the
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Available Shares during the six-month period beginning on the date hereof,
Nextel or its Affiliates may, by written notice delivered to Motorola within 30
days following the six-month anniversary of the date hereof, sell to Motorola
or its Affiliates, and Motorola or its Affiliates shall purchase from Nextel,
up to one-half of the Available Shares not purchased by a New Peruvian Partner
at a price payable in dollars equal to the aggregate consideration (taking into
account both cash payments and obligations to make future cash payments) paid
by Nextel for the Shares to be purchased by Motorola pursuant to the Stock
Purchase Agreement (the "ADDITIONAL MOTOROLA SHARES") plus an additional amount
per Share calculated by multiplying each Carried Payment (as defined below) by
7% per annum, calculated from the date such Carried Payment was made until the
date of payment by Motorola. "CARRIED PAYMENT" shall mean the amount of each
cash payment made by Nextel or its Affiliates pursuant to Section 2.1(b)(v) of
the Stock Purchase Agreement multiplied by a fraction, the numerator of which
is the number of Additional Motorola Shares and the denominator of which is the
number of Shares outstanding following registration of the Capital Increase (as
defined in the Stock Purchase Agreement). Any Transfer to Motorola pursuant to
this Section 3.1(g) shall not be subject to the restrictions set forth in this
Article 3.
(h) Notwithstanding Section 3.1(g), if Motorola
introduces to Nextel a third party based in Peru that agrees in writing to
purchase any or all of the Additional Motorola Shares at a price per share
equal to or greater than the price per share that Motorola is obligated to pay
pursuant to Section 3.1(g) and Nextel unreasonably refuses to Transfer such
Additional Motorola Shares to such third party, then Motorola's obligation to
purchase Additional Motorola Shares shall be reduced by 50% of the number of
Additional Motorola Shares that such third party agreed in writing to purchase.
3.2 RIGHT OF FIRST REFUSAL.
(a) TRANSFERS BY SHAREHOLDER. Except as
otherwise provided in this Agreement, no Shareholder may Transfer any interest,
direct or indirect, in all or any part of the Shares owned by such Shareholder,
unless (i) the Selling Shareholder shall have made an offer to sell such Shares
to the other Shareholders and the Company as provided in this Section 3.2 and
(ii) such offer shall not have been accepted in the manner described in this
Section 3.2. No Shareholder having beneficial ownership of less than 5% of the
Shares at the time of any proposed Transfer by any other Shareholder shall have
rights of first refusal as provided in this Section 3.2.
(b) OFFER BY SELLING SHAREHOLDER. The offer
referred to in Section 3.2(a) shall consist of a written offer (the "OFFER") to
the other Shareholders entitled to rights of first refusal (the "OFFEREES") and
to the Company to sell the Shares proposed to be Transferred (the "OFFERED
SHARES"). The Offer shall set forth (a) a statement of intention to effect a
Transfer, (b) the number and class of Offered Shares, (c) the terms and
conditions of the proposed Transfer, including (i) the purchase price and terms
of payment for the Offered Shares and (ii) the identity and beneficial
ownership of the third party or parties
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having made a bona fide offer to purchase the Offered Shares on such terms and
conditions, and (d) the desired closing date of the transaction.
(c) ACCEPTANCE OF OFFER. Within 30 days after
its receipt of the Offer, each Offeree may, at its option, accept the Offer as
to all or less than all of the Offered Shares by giving irrevocable written
notice to the Selling Shareholder, the Company and the other Shareholders prior
to the expiration of such 30-day period.
(d) PRO RATA PORTION. To the extent that more
than one Offeree shall have elected to purchase Offered Shares pursuant to
Section 3.2(c), each such Offeree may purchase up to its pro rata portion of
such Offered Shares as determined in accordance with this Section 3.2(d). Each
Offeree's pro rata portion of the Offered Shares is that proportion of the
Offered Shares as the number of Shares held by such Offeree bears to the
aggregate number of Shares held by such Offeree and all other Offerees who have
exercised their rights of first refusal under this Section 3.2. If the
Offerees shall not have offered to purchase all the Offered Shares, the Company
may elect to redeem or purchase any remaining Offered Shares by written notice
to the Selling Shareholder and the Offerees within ten (10) days after the
expiration of the 30-day period set forth in Section 3.2(c).
(e) CLOSING. If the Offer is accepted as to the
Offered Shares, the parties shall use their best efforts to complete the
closing of such purchase within 30 days after acceptance of the Offer. If,
after expiration of such 30-day period, the closing of such purchase of Offered
Shares shall not have occurred (unless closing is subject only to receipt of
required governmental or regulatory approvals) through no fault of the Selling
Shareholder, then the Selling Shareholder may treat the Offer as having been
rejected in its entirety. If the Offer is not accepted as to all the Offered
Shares as provided in this Section 3.2, or is deemed to be rejected as set
forth in the previous sentence, the Selling Shareholder may for a period of 60
days after such nonacceptance or deemed rejection Transfer the Offered Shares
to the third party or parties designated in the Offer and on the terms and
conditions specified in the Offer. A proposed Transfer after the expiration of
such 60-day period or on any other terms shall again be subject to the rights
of first refusal and other provisions of this Section 3.
3.3 TAG-ALONG RIGHTS.
(a) TRANSFERS BY NEXTEL. Except as otherwise
provided in this Agreement, neither Nextel nor any Affiliate of Nextel may
Transfer all or any part of the Shares owned by Nextel such that Nextel and its
Affiliates would no longer Control the Company unless (a) Nextel or such
Affiliate shall have sent to each Minority Shareholder a written offer (the
"TAG-ALONG OFFER") to include in such Transfer any or all of such Minority
Shareholder's Shares (the "TAG-ALONG SHARES") at the same price and on the same
terms as Nextel or such Affiliate shall Transfer its Shares and (b) such offer
shall not have been accepted in the manner described in this Section 3.3. The
Minority Shareholders shall not be entitled to the rights of first refusal set
forth in Section 3.2 with respect to the Shares proposed to be Transferred by
Nextel and its Affiliates pursuant to this Section 3.3.
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(b) TAG-ALONG OFFER. The Tag-Along Offer shall
consist of a written offer to the Minority Shareholders to include the
Tag-Along Shares in the Shares proposed to be Transferred (the "PROPOSED
SHARES"). The Tag- Along Offer shall set forth (a) a statement of intention to
effect such a Transfer, (b) the number and class of Proposed Shares, (c) the
terms and conditions of the proposed Transfer, including (i) the purchase price
and terms of payment for the Proposed Shares and (ii) the identity and
beneficial ownership of the party or parties having made a bona fide offer to
purchase the Proposed Shares on such terms and conditions, and (d) the desired
closing date of the transaction.
(c) ACCEPTANCE OF TAG-ALONG OFFER. Within 30
days after its receipt of the Tag-Along Offer, each Minority Shareholder may,
at its option, accept the Tag-Along Offer as to any or all of such Minority
Shareholder's Tag-Along Shares by giving irrevocable written notice to Nextel,
the Company and the other Shareholders prior to the expiration of such 30-day
period. Any Tag-Along Shares to be Transferred by Minority Shareholders shall
be substituted for an equal number of Proposed Shares; provided, however, that
if the number of Tag-Along Shares exceeds the number of Proposed Shares and the
purchaser of such Proposed Shares is unwilling to purchase such excess
Tag-Along Shares, the Tag-Along Shares of each Shareholder shall be reduced pro
rata. Each Shareholder's pro rata portion of the Tag-Along Shares is that
proportion of the Tag-Along Shares as the number of Shares held by such
Shareholder bears to the aggregate number of Shares held by such Shareholder
and all other Shareholders who have elected to participate in the Tag-Along
Offer pursuant to this Section 3.3. If the purchaser of the Proposed Shares
elects to purchase all of the Tag-Along Shares and the Proposed Shares, Nextel
may participate in such Transfer.
(d) CLOSING. Nextel and those Minority
Shareholders having accepted the Tag-Along Offer shall use their best efforts
to complete the closing of any such Transfer within 30 days after the end of
the 30-day offering period. If Nextel and the Minority Shareholders shall fail
to complete such Transfer within such 30-day closing period (unless closing is
delayed due to the need for required governmental or regulatory approvals), or
if Nextel and the Minority Shareholders propose to effect a Transfer on
different terms than those permitted by the Tag- Along Offer pursuant to
Section 3.3(b), then any proposed Transfer shall again be subject to all the
Transfer restrictions set forth in this Section 3.
3.4 DRAG-ALONG RIGHTS OF NEXTEL.
(a) RIGHT TO REQUIRE SALE OF MINORITY
SHAREHOLDERS' SHARES. Notwithstanding the other provisions of this Section 3,
if Nextel and its Affiliates seek to effect a transaction involving a bona fide
sale of all of the outstanding Shares, including their entire interest in the
Company, to an unrelated third party or parties (a "BUYER"), whether by sale of
shares, sale of all or substantially all assets, merger or otherwise (a
"SALE"), all of the Minority Shareholders will, upon notice from Nextel after
compliance with the provisions of this Section 3.4, take all commercially
reasonable actions required to assist in effecting such Sale, including,
without limitation, (i) Transferring or agreeing to
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Transfer all, but not less than all, the Shares owned by them at a price equal
to that at which Nextel is Transferring Shares and otherwise on identical terms
and (ii) voting in favor of a transaction that results in such a Transfer. In
exercising its drag-along rights, Nextel will comply with its fiduciary duties
under Peruvian law as the majority shareholder of the Company and will ensure
that the Directors designated by it comply with their fiduciary duties under
Peruvian law.
(b) PROCEDURE. Nextel shall give written notice
to the Board and the Minority Shareholders of Nextel's intent to effect a Sale.
If the Company or Nextel becomes aware of an unsolicited proposal to purchase
all of the outstanding Shares that the Company or Nextel believes may be
acceptable to the Board and the Shareholders or if the Company or if Nextel
intends to solicit such a proposal, then the Company or Nextel, as the case may
be, shall promptly provide notice to the Board of such event and discuss such
event with the Board. Nextel may for a period beginning ten days after such
notice and ending 180 days after such notice seek to effect a Sale of the
Company to a Buyer. If such Sale shall not have closed within such 170-day
period (unless closing is delayed due to the need for required governmental or
regulatory approval), any proposed Transfer shall again be subject to all the
Transfer restrictions set forth in this Section 3.
3.5 NO OTHER TRANSFER EFFECTIVE. Except as provided in
this Section 3, no Transfer of any right, title or interest in the Shares shall
be effective, and the Company shall not record or recognize any such Transfer,
until there has been compliance with the provisions of this Agreement. If no
Offer or Tag-Along Offer is made as herein required, the Shareholders may
nevertheless exercise their rights hereunder as to the Shares subject to any
proposed Transfer, and they may do so at any time, including after the
purported Transfer of the Shares, prior to six months following such
Shareholder's obtaining knowledge of the defect in such purported Transfer.
3.6 TRANSFER OF CAPITAL STOCK OF SUBSIDIARIES . The
Company shall not Transfer or permit the Transfer of any shares of capital
stock of any of its subsidiaries to any Person other than the Company or any of
its wholly owned subsidiaries without the prior written consent of each holder
of 15% or more of the Company's capital stock.
4. PREEMPTIVE RIGHTS. Each Shareholder shall have preemptive
rights with respect to the subscription of capital increases by the Company as
provided by Peruvian law in effect on the date of this Agreement. Except for a
failure by a Shareholder to make a capital contribution as required by Section
5, failure by a Shareholder to exercise its preemptive rights shall not
constitute an event of default under or a breach of this Agreement, but shall
result in dilution of the ownership percentage of such Shareholder. Except for
a failure by a Shareholder to make a capital contribution as required by
Section 5, failure by a Shareholder to exercise its preemptive rights with
respect to an issuance of securities shall not act as a waiver of such
Shareholder's right to exercise its preemptive rights for subsequent issuances.
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5. CAPITAL CONTRIBUTIONS.
5.1 NOTICE OF CAPITAL CONTRIBUTIONS. Each Shareholder
shall make cash capital contributions in the form of equity to the Company on
or before any date (a "PAYMENT DATE") upon written notice delivered to such
Shareholder at least ten (10) Business Days prior to such Payment Date;
provided that (a) the Company shall not make any capital calls until the
initial capital of the Company provided by Nextel shall have been used to meet
the capital requirements of the Company and (b) Nextel may make its capital
contribution (other than the initial capital contribution) in the form of
assets (valued at the invoiced cost plus direct associated out-of-pocket
expenses incurred by Nextel to acquire such assets) if the acquisition of such
assets by the Company has been provided for in the Business Plan or has
otherwise been approved by the Board (including at least one Director
designated for election by a Minority Shareholder). Such notice shall set
forth the aggregate amount of the capital contributions required as of such
date, as well as each Shareholder's required capital contribution. Each
Shareholder's capital contribution shall be made pro rata based on such
Shareholder's percentage ownership of the Company on the date of such notice.
5.2 TAXES. Each Shareholder's capital contribution (and
each component thereof) shall be made free of all withholding with respect to
taxes of any nature, and if any Shareholder is required by applicable law to
make any such withholding with respect to any such contribution, such
Shareholder's capital contribution shall be increased, if necessary, so that
after making all required withholdings, the Company shall receive an amount
equal to the amount it would have received had such withholdings not been made.
5.3 FAILURE TO MAKE CAPITAL CONTRIBUTIONS. If any
Shareholder fails to make its required capital contribution by the Payment Date
(a "DEFAULTING SHAREHOLDER"), then:
(a) DILUTION. Subject to Section 5.5, such
Shareholder's interests in dividends and other cash or noncash distributions by
the Company and in voting shall be diluted and shall thereafter be
proportionate to its respective shareholdings in the Company, based on the
paid-in capital contributed by the Shareholders to the Company (as set forth
below).
(b) RESIGNATION OF BOARD MEMBERS. The Director
(or Directors) nominated by such Shareholder, if any, shall resign and the
Shareholders shall elect a new Director (or Directors), designated for election
by vote of a majority of the Shares owned by the Minority Shareholders who are
not Defaulting Shareholders, to fill the resulting vacancy (or vacancies).
(c) CAPITAL CONTRIBUTION BY NONDEFAULTING
SHAREHOLDERS. The General Manager of the Company shall promptly notify the
other Shareholders (the "NONDEFAULTING SHAREHOLDERS") no later than the day
following the Payment Date (the "NOTICE") of the failure by the Defaulting
Shareholder to make the required capital contribution and of the right of the
Nondefaulting Shareholders to elect to make the capital
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contribution and to exercise their call rights. Any Shareholder may within
eight days following delivery of the Notice notify the Company of its
willingness to make all or any part of a capital contribution required to be
made by the Defaulting Shareholder (each, an "EXERCISING SHAREHOLDER"). To the
extent more than one Exercising Shareholder shall have elected to make all or
any part of such capital contribution, each Exercising Shareholder's pro rata
portion of such capital contribution is that percentage of such capital
contribution equal to the number of Shares held by such Exercising Shareholder
divided by the aggregate number of Shares held by such Exercising Shareholder
and all other Exercising Shareholders. If all the other Shareholders do not
subscribe and pay for their pro rata portion of the Shares to be subscribed by
the Defaulting Shareholder within such eight days following delivery of the
Notice, the Company shall be entitled to offer to a third party the right to
subscribe to any Shares not issued to Shareholders during a period not to
exceed six months from the Payment Date.
(d) CALL ON DEFAULTING SHAREHOLDER. In
accordance with Section 5.4 and subject to Section 5.5, the Nondefaulting
Shareholders and the Company shall have the right (the "CALL RIGHT") to
purchase and redeem, respectively, any or all of the Shares owned by the
Defaulting Shareholder at the following price (the "CALL PRICE"):
(i) if the Payment Date was prior to the
second anniversary of the date hereof, the Call Price shall be equal to the
total paid-in capital of the Defaulting Shareholder; and
(ii) if the Payment Date was on or after
the second anniversary of the date hereof, the Call Price shall be equal to 75%
of the Appraised Fair Market Value of the Shares that are owned by the
Defaulting Shareholder as of the Payment Date.
For purposes of this Agreement, the total
paid-in capital of Motorola for the Shares owned by it as of the date hereof
shall be $7,960,000, the total paid-in capital of Benalcazar for the Shares
owned by him as of the date hereof shall be $3,980,000, and the total paid-in
capital of Nextel for the Shares owned by it as of the date hereof shall be
$27,860,000.
5.4 CALL PROCEDURES.
(a) If the Nondefaulting Shareholders shall
exercise their rights pursuant to Section 5.3(d), the Nondefaulting
Shareholders shall be entitled to purchase any or all of the Shares owned by
the Defaulting Shareholder (each Nondefaulting Shareholder electing to purchase
the Defaulting Shareholder's Shares shall be referred to as a "CALLING
SHAREHOLDER"). To the extent more than one Calling Shareholder elects to
purchase such Shares, each Calling Shareholder's pro rata portion of such
Defaulting Shareholder's Shares is that percentage of such Shares equal to the
number of Shares held by such Calling Shareholder divided by the aggregate
number of Shares held by such Calling Shareholder and all other Calling
Shareholders; provided that if the Calling Shareholders do not elect to
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purchase all of the Defaulting Shareholder's Shares, the Company may elect to
redeem or purchase all remaining such Shares.
(b) Each Nondefaulting Shareholders desiring to
exercise its Call Right must give written notice to the General Manager of the
Company within 10 days of delivery of the Notice of the maximum number of
Shares that it is willing to purchase from the Defaulting Shareholder. Failure
by a Nondefaulting Shareholder to deliver its notice within 10 days following
delivery of the Notice shall constitute a waiver by such Nondefaulting
Shareholder of its Call Right. If any Calling Shareholder shall fail to
consummate the exercise of its Call Right within 30 days of the notice required
by the first sentence of this paragraph, the remaining Calling Shareholders
shall have an additional 10 days from the expiration of such 30-day period to
complete the purchase of all Shares owned by the Defaulting Shareholder, pro
rata in accordance with Section 5.4(a).
(c) A Nondefaulting Shareholder shall not be
deemed to be a Defaulting Shareholder or otherwise subject to Section 5.3(d)
because it does not elect to exercise its Call Right.
(d) A Defaulting Shareholder whose Shares have
been acquired following the exercise of the Call Right shall not be subject to
any other claim or remedy from another Shareholder as a result of such
Defaulting Shareholder's failure to make a required Shareholder Contribution.
(e) If payment is required under any guarantees
provided by the Defaulting Shareholder pursuant to Section 5.6, the Calling
Shareholders shall severally, based on the number of Shares acquired by each
Calling Shareholder, indemnify the Defaulting Shareholder for up to 50% of any
amounts paid by the Defaulting Shareholder under such guarantees.
5.5 EXCEPTIONS FROM CALL. If the Free Cash Flow during
any of the following calendar years is less than the amount for such year set
forth in the table below, then during such year none of the Shareholders shall
be subject to any of the remedies provided to the other Shareholders in Section
5.3(d) for its failure to make capital contributions.
<TABLE>
<S> <C>
1998 (US$64,209,597)
1999 (US$38,982,207)
2000 (US$1,549,328)
</TABLE>
5.6 GUARANTEES; PLEDGES OF SHARES. If Nextel or the
Company or any of its subsidiaries shall enter into a financing arrangement for
the exclusive benefit of the Company or any of its subsidiaries, then (a) each
Shareholder and each of their Affiliates shall take all actions necessary as
may be required to permit the Company to obtain such financing and, if required
by the lender, shall guarantee a portion of such financing, pro rata in
accordance with such Shareholder's Share ownership of the Company, such
guarantee to be reasonably satisfactory in all respects to the lender, and (b)
if Nextel and its Affiliates
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shall have agreed to pledge the Shares owned by them, each Minority Shareholder
and each of their Affiliates shall simultaneously pledge the Shares owned by it
on the same terms and conditions as Nextel and its Affiliates and, if
necessary, execute a power of attorney over such Shares in favor of the lender
or such other entity as the lender may designate in order to comply with the
requirements for the delivery of the Shares by the debtor to the lender or such
other entity as the lender may designate in guarantee of such financing
arrangement. Any pledge by a Shareholder pursuant to this Section 5.6 shall be
senior to and have priority over any pledge of Shares by one Shareholder to
another Shareholder, and each Shareholder agrees to execute any intercreditor
or subordination agreement required to effect such subordination.
6. CALL BY SHAREHOLDERS AND THE COMPANY UPON BREACH.
(a) If any Shareholder (a "BREACHING
SHAREHOLDER") materially breaches any provision of this Agreement, the Company
or any other Shareholder (each a "NONBREACHING SHAREHOLDERS") may send written
notice to each of the parties hereto of such breach (the "BREACH NOTICE"). If
the Breaching Shareholder does not cure such breach within 30 days of delivery
of the Breach Notice (the earlier of the expiration of such 30-day period and
the date the Breaching Shareholder notifies the Company it will not cure such
breach shall be referred to as the "CONFIRMATION DATE"), the Nonbreaching
Shareholders shall have the right to purchase any or all Shares owned by the
Breaching Shareholder (the "BREACHING SHAREHOLDER'S SHARES") at the following
price:
(i) if the date of breach was prior to
the second anniversary of the date hereof, the price shall be equal to the
total paid-in capital of the Breaching Shareholder; and
(ii) if the date of breach was on or
after the second anniversary of the date hereof, the price shall be equal to
75% of the Appraised Fair Market Value.
(b) Each Nonbreaching Shareholder shall be
entitled to purchase all or less than all of the Breaching Shareholder's
Shares. To the extent that more than one Nonbreaching Shareholder shall have
elected to purchase the Breaching Shares, each such Nonbreaching Shareholder
may purchase up to its pro rata portion of such Breaching Shareholder's Shares
as determined in accordance with this Section 6(b). Each Nonbreaching
Shareholder's pro rata portion of the Breaching Shareholder's Shares is that
proportion of the Breaching Shareholder's Shares as the number of Shares held
by such Nonbreaching Shareholder bears to the aggregate number of Shares held
by such Nonbreaching Shareholder and all other Nonbreaching Shareholders who
have exercised their right to purchase Breaching Shareholder's Shares under
this Section 6. If the Nonbreaching Shareholders shall not have offered to
purchase all the Breaching Shareholder's Shares within 15 days of the
Confirmation Date, the Company shall have ten days to elect to redeem or
purchase any remaining Breaching Shareholder's Shares. The
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closing(s) of the sales of Breaching Shareholder's Shares under this Section 6
shall take place within 30 days of the Confirmation Date.
7. ACQUISITION OF ESMR INFRASTRUCTURE EQUIPMENT. If the Company
intends to acquire infrastructure equipment, whether by purchase or lease, and
Motorola and its Affiliates in the aggregate own at least 19% of the Shares,
the Company will take the following actions:
(a) The Company will acquire ESMR infrastructure
equipment (excluding handsets or any analog SMR equipment) (the "ESMR
EQUIPMENT") from Motorola, Inc. or its Affiliates, provided such equipment is
competitive in terms of technology, price and delivery, taken as a whole, as
determined by the Board in accordance with this Section 7. The Director(s)
designated by Motorola may participate in any Board meetings at which such ESMR
Equipment acquisition is considered; provided, however, that any such
Director(s) will leave such meeting during discussion of such acquisition if
requested by a majority of the remaining Directors.
(b) The Board, by the vote of at least a majority of the
Directors (excluding the Director designated for election by Motorola), shall
decide whether the ESMR Equipment offered by Motorola, Inc. or its Affiliates
satisfies the requirements set forth in Section 7(a). If the Board does not
determine in the manner set forth in this Section 7(b) that the ESMR Equipment
offered by Motorola, Inc. or its Affiliates satisfies such requirements, the
Board shall, by the vote of a majority of the Directors, appoint a third party
to resolve whether the proposal submitted by Motorola, Inc. or its Affiliates
for the supply of the ESMR Equipment satisfies such requirements, which third
party shall be an internationally recognized engineering firm generally
regarded as experienced with respect to matters involving telecommunications
infrastructure and shall have no material relationship with any Shareholder or
any competitors of Motorola or its Affiliates which manufacture
telecommunications infrastructure equipment.
(c) If (i) ESMR Equipment is acquired by the Company from
a Person other than from Motorola, Inc. or its Affiliates and (ii) the third
party referred to in Section 7(b) above determines that the ESMR Equipment
offered by Motorola, Inc. or its Affiliates satisfies the requirements set
forth in Section 7(a), Motorola shall have the right to cause the Company to
acquire the Shares (including any shareholder loans by Motorola and its
Affiliates, which shall be converted into Shares at the Appraised Fair Market
Value) then held by Motorola and its Affiliates at the Appraised Fair Market
Value of such Shares as of the date of delivery of notice to the Company. Each
Shareholder hereby agrees to approve any action required to permit the Company
to carry out its obligations pursuant to this Section 7(c). If Motorola elects
to exercise such right, Motorola shall give written notice (the "MOTOROLA
NOTICE") to the Company no later than 30 days following the date of the
decision that the ESMR Equipment satisfied the requirements set forth in
Section 7(a). The transfer of such Shares and payment of the sales price shall
take place no later than 60 days from the date of the Motorola Notice.
Following receipt of the Motorola Notice by the Company, the Company and the
Shareholders shall use their best efforts to cause any
PERU SHAREHOLDERS AGREEMENT
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guarantees previously provided by Motorola or its Affiliates pursuant to
Section 5.6 hereof to be released. If such guarantees are not so released, the
Company hereby agrees that if payment is required pursuant to such guarantees,
the Company shall indemnify Motorola and its Affiliates for any amounts
actually paid by Motorola and its Affiliates under such guarantees. If
Motorola shall not have delivered the Motorola Notice within the time period
specified in this Section 7(c), Motorola will be deemed to have waived its
right pursuant to this Section 7(c) to have the Company acquire the Shares held
by Motorola and its Affiliates, but such right shall continue for all future
purchases.
8. COMPLIANCE WITH LAWS. Each Shareholder represents, warrants
and covenants that neither it nor any director, officer, agent, employee or
other Person acting on its behalf or on behalf of any Affiliate of it,
including in each case the Company, in connection with activities of the
Company (a) has been or will be involved in the offering, paying or giving of
anything of value, either directly or indirectly, to a government official,
political party or candidate for political office intended to influence such
Person in the discharge of his, her or its official duties or (b) has engaged
or will engage in any such unlawful conduct during the time of carrying out its
respective duties. The Company shall maintain accounting books and records in
reasonable detail and institute and maintain internal controls to ensure that
such books and records accurately reflect corporate transactions and the
disposition of assets. In addition, subject to the approval of all
Shareholders, the Company shall adopt a code of conduct, using Motorola's code
of conduct as a reference.
9. NONCOMPETITION. Each Shareholder agrees that, until one year
following termination of this Agreement with respect to such Shareholder,
neither such Shareholder nor any Affiliate of such Shareholder (except that in
the case of Nextel, only Persons directly or indirectly Controlled by Nextel
Communications, Inc. shall be deemed Affiliates of Nextel) shall in any way, by
action or inaction, directly or indirectly, for itself or for the benefit of
any other Person, own, manage, operate, join, Control or participate in the
ownership, management, operation or Control of any Person that competes with
the Company or any Affiliate thereof, or agrees to do any of the foregoing, in
the business of SMR or ESMR anywhere in Peru; provided that nothing contained
herein shall prevent any Shareholder or its Affiliates from selling or
financing the sale of equipment used in the business of SMR or ESMR in Peru to
third parties.
10. NII GUARANTEE. NII shall be responsible to the Shareholders
for all of Nextel's duties and obligations hereunder and hereby guarantees the
performance by Nextel of all of Nextel's duties and obligations hereunder. If
Nextel shall have defaulted in the payment when due of any amount required to
be paid by Nextel under this Agreement, and such default shall remain uncured
10 days following written notice by the Company or any other Shareholder, then
NII shall within five days after delivery of written notice by such other
Shareholder pay the amount not so paid.
PERU SHAREHOLDERS AGREEMENT
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11. CONFIDENTIALITY.
(a) DEFINITION OF CONFIDENTIAL INFORMATION.
"Confidential Information" means any oral, written, graphic or machine-readable
information including, but not limited to, that which relates to patents,
patent applications, research, product plans, products, developments,
inventions, processes, designs, drawings, engineering, formulae, markets,
software, hardware configuration, computer programs, cellular, SMR or ESMR
network design, algorithms, regulatory information, business plans, agreements
with third parties, services, customers, marketing or finances of the
disclosing party, which Confidential Information is designated in writing to be
confidential or proprietary, or if given orally, is confirmed in writing as
having been disclosed as confidential or proprietary within a reasonable time
(not to exceed thirty (30) days) after the oral disclosure.
(b) NONDISCLOSURE OF CONFIDENTIAL INFORMATION.
(i) Each of the Company and the Shareholders
agree not to use any Confidential Information disclosed to it by any other
Shareholder or the Company for its own use or for any purpose other than in
connection with and for the benefit of the business of the Company. No
Shareholder shall disclose or permit disclosure of any Confidential Information
of the other Shareholders or the Company to third parties or to employees of
the party receiving Confidential Information, other than directors, officers,
employees, consultants and agents who are required to have the information in
order to carry out the business of the Company. Each party agrees that it
shall take all reasonable measures to protect the secrecy of and avoid
disclosure or use of Confidential Information of the other parties in order to
prevent it from falling into the public domain or the possession of persons
other than those persons authorized under this Agreement to have any such
information. Such measures shall include, but not be limited to, the highest
degree of care that the receiving party utilizes to protect its own
Confidential Information of a similar nature, which shall be no less than
reasonable care. Each party agrees to notify the other parties in writing of
any actual or suspected misuse, misappropriation or unauthorized disclosure of
Confidential Information of the disclosing party which may come to its
attention.
(ii) Exceptions. Notwithstanding the above,
neither party shall have liability to the other with regard to any Confidential
Information of the other which the receiving party can prove:
(A) was in the public domain at the time
it was disclosed or has entered the public domain through no fault of the
receiving party;
(B) was known to the receiving party,
without restriction, at the time of disclosure, as demonstrated by files in
existence at the time of disclosure;
(C) is disclosed with the prior written
approval of the disclosing party;
PERU SHAREHOLDERS AGREEMENT
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(D) becomes known to the receiving
party, without restriction, from a source other than the disclosing party
without breach of this Agreement by the receiving party and otherwise not in
violation of the disclosing party's rights; or
(E) is disclosed pursuant to the order
or requirement of a court, administrative agency, or other governmental body;
provided, however, that the receiving party shall provide prompt notice of such
court order or requirement to the disclosing party to enable the disclosing
party to seek a protective order or otherwise prevent or restrict such
disclosure.
(c) RETURN OF MATERIALS. Any materials or documents that
have been furnished by one party to any other party hereto in connection with
the Company shall be promptly returned by the receiving party, accompanied by
all copies of such documentation, within ten (10) days after (a) such party is
no longer a Shareholder or (b) the written request of the disclosing party.
(d) TERM. The foregoing commitments of each party shall
survive any termination of the relationship between the parties, and shall
continue for a period terminating one year following the date such party,
including its Affiliates, is no longer a Shareholder.
12. TERMINATION.
(a) This Agreement shall lapse and be of no further force
or effect upon the first of the following to occur:
(i) MERGER, SALE OR LIQUIDATION. The merger of
the Company with any other company as a result of which securities representing
all or substantially all of the voting power of the Company are held by Persons
that had less than a majority interest, directly or indirectly, in such
securities prior to such merger, or of the sale of all or substantially all of
the assets of the Company, or of its liquidation, or the appointment by a
creditor's assembly of (i) a new administration which supersedes the
administration appointed by the Shareholders and takes Control of the Company,
or (ii) the appointment of an entity (or individual) which shall be in charge
of its liquidation pursued under Peruvian insolvency laws (which is currently
regulated by Legislative Decree 845, Ley de Reorganizacion Patrimonial).
(ii) AGREEMENT OF SHAREHOLDERS. The written
agreement of holders of not less than 99% of the Shares to the termination of
this Agreement.
(iii) INITIAL PUBLIC OFFERING. An initial offering
of Shares to the public in Peru or the United States after the consummation of
which at least 50% of the then outstanding Shares are held by the public.
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(b) With respect to any individual Shareholder, this
Agreement shall lapse and be of no further force at such time as such
Shareholder and its Affiliates no longer own or control any Shares.
13. REGULATORY COOPERATION.
The parties hereto will cooperate to take any actions necessary for
the Company to obtain any regulatory approval or filings required or desirable
for the implementation of the iDEN service.
14. MISCELLANEOUS.
14.1 SPECIFIC ENFORCEMENT. Each Shareholder expressly
agrees that the Company and the other Shareholders will be irreparably damaged
if this Agreement is not specifically enforced. Upon a breach or threatened
breach of the terms, covenants and/or conditions of this Agreement by any
Shareholder, each of the Company and the other Shareholders shall, in addition
to all other remedies, be entitled to a temporary or permanent injunction,
without showing any actual damage, and/or a decree for specific performance or
other equitable relief to prevent violation of any provision of this Agreement.
14.2 DELIVERY OF INFORMATION. In addition to any
mandatory shareholders' information rights provided by Peruvian law, the
Company shall deliver to each Shareholder holding at least 5% of the
outstanding Shares:
(a) as soon as practicable, but in any event
within 80 days after the end of each fiscal year of the Company, an income
statement for such fiscal year, a balance sheet of the Company as of the end of
such year and a statement of cash flows for such year, such financial
statements to be prepared in two forms, one in accordance with Peruvian
generally accepted accounting principles ("PERUVIAN GAAP") and one in
accordance with U.S. GAAP, audited by independent certified public accountants
of internationally recognized standing selected by the Company, and
(b) as soon as practicable, but in any event
within 60 days after the end of each of the first three fiscal quarters, an
income statement for such fiscal quarter, a balance sheet of the Company as of
the end of such quarter and a statement of cash flows for such quarter, such
financial statements to be prepared in two forms, one in accordance with
Peruvian GAAP and one in accordance with U.S. GAAP, and any other operating
information provided to the Board.
14.3 INSPECTION. In addition to any mandatory
shareholders' information rights provided by Peruvian law, the Company shall
permit each Shareholder owning at least 19% of the Shares at such Shareholder's
expense to visit and inspect the Company's properties, to audit its books of
accounts and records and to make copies and extracts therefrom, and to discuss
the Company's business prospects, affairs, finances and accounts with its
officers, all at such reasonable times as may be requested by such Shareholder
and for purposes reasonably related to the business of the Company, but no more
than once in
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any fiscal year and only so long as such examination does not impose any undue
burden or expense on the Company.
14.4 ENVIRONMENTAL POLICY. The Company shall adopt an
environmental policy which complies with applicable Peruvian laws.
14.5 EMPLOYMENT POLICIES. The Company shall use
commercially reasonable efforts to deal directly with its employees, without
any intermediary parties, and will use commercially reasonable efforts to adopt
such personnel policies and practices as appropriate in order to reasonably
achieve such results. The Company shall seek to develop personnel practices
that fairly reward employees for services rendered in a manner consistent with
common business practice in Peru.
14.6 QUALITY REPORTING. The Company shall employ
commercially reasonable efforts to adopt quality reporting processes consistent
with Motorola's practices in its Worldwide Network Services Division joint
ventures.
14.7 NOTICES. Notices given hereunder shall be deemed to
have been duly given on the date of personal delivery, on the date of facsimile
transmittal (provided the address or confirms receipt of any facsimile by the
addressee), three days after delivery by overnight courier or three days after
mailing if mailed by certified or registered mail, return receipt requested,
postage prepaid, to the party being notified at his, her or its address
specified on the applicable signature page or such other address of which the
addressee may subsequently notify the other parties in writing.
14.8 ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS. This
Agreement, the Stock Purchase Agreement, the Registration Rights Agreement, the
Usufruct Agreements and the Pledge Agreements and their respective schedules
and exhibits constitute the entire and only agreement of the parties with
respect to the subject matter hereof, and neither this Agreement nor any
provision hereof may be waived, modified, amended or terminated except by a
written agreement signed by the Company and holders of 99% of the Shares. No
waiver of any breach or default hereunder shall be considered valid unless in
writing, and no such waiver shall be deemed a waiver of any subsequent breach
or default of the same or similar nature.
14.9 GOVERNING LAW; SUCCESSORS AND ASSIGNS. This
Agreement shall for all purposes be governed by and construed in accordance
with the laws of the State of Delaware, U.S.A. and shall be binding upon the
heirs, personal representatives, executors, administrators, successors and
permitted assigns of the parties.
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14.10 DISPUTE RESOLUTION.
(a) ARBITRATION. All disputes arising out of or
in connection with this Agreement or the performance hereof shall be resolved
by submission to binding arbitration under the Rules for Arbitration of the
International Chamber of Commerce (the "ICC").
(b) NOTICE OF DEMAND FOR ARBITRATION. Notice of
demand for arbitration shall be filed in writing with the other party and with
the ICC. In no event shall the demand for arbitration be made after the date
when the applicable statute of limitations would bar institution of a legal or
equitable proceeding based on such claim, dispute or other matter in question.
(c) ARBITRATION PROCEEDINGS. Unless the parties
agree otherwise, the arbitration hearing shall be conducted in Miami, Florida,
United States, in the English language, before a panel of three arbitrators,
one selected by each of the Shareholders involved in the arbitration proceeding
and the third selected by mutual agreement of such parties, and failing their
agreement, pursuant to the rules of the ICC. The arbitrators shall not be
empowered to grant exemplary or punitive damages. Upon the request of either
party, the arbitrators' written decision shall include an explanation of the
factual and legal grounds for the decision.
(d) MOTIONS TO RECONSIDER. Within fifteen days
of receipt of the arbitrators' decision, either party may file with the
arbitrators and serve on the other party a written motion to reconsider. The
arbitrators may request the non-moving or responding party to file a written
response within ten days after receipt of that request, and the arbitrators
thereupon will reconsider the issues raised by the motion and response (if any)
and either confirm or alter their decision, which will then be final, binding
and conclusive upon the parties. The costs of such a motion for
reconsideration, including attorneys' fees, will be awarded against the moving
party if it does not prevail.
(e) FINALITY. The decision rendered by the
arbitrators shall be final, and judgment may be entered upon it in accordance
with applicable law in any court having jurisdiction thereof.
(f) CONSOLIDATION, JOINDER AND THIRD PARTY CLAIM.
Any arbitration arising out of or related to this Agreement or any other
agreements between the parties or their Affiliates relating to the wireless
telecommunications business in Peru may, upon demand of either party, include
by consolidation, joinder or third-party claims any other party involved in a
common question of law or fact whose presence is required if complete relief is
to be accorded in arbitration or who is alleged to be liable to a party for all
or part of a claim in the arbitration. Each party agrees that the other
parties may join it as a party to any litigation or arbitration involving the
alleged fault of such party.
14.11 HEADINGS. The headings of the sections of this
Agreement are for convenience of reference only and shall not affect the
interpretation of this Agreement.
PERU SHAREHOLDERS AGREEMENT
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<PAGE> 29
14.12 COUNTERPARTS. This Agreement may be executed in one
or more counterparts, which together shall constitute one and the same
instrument. Facsimile signatures shall have the same legal effect as original
signatures.
14.13 SEVERABILITY. If any provision of this Agreement
shall be held to be illegal, invalid or unenforceable, such illegality,
invalidity or unenforceability shall attach only to such provision and shall
not in any manner affect or render illegal, invalid or unenforceable any other
provision of this Agreement, and this Agreement shall be carried out as if any
such illegal, invalid or unenforceable provision were not contained herein.
14.14 NEXTEL'S INTELLECTUAL PROPERTY. The Parties
acknowledge that the name "Nextel" is or will be a registered trade name and
trademark of Nextel Communications, Inc. If Nextel ceases to be a Shareholder,
the Company shall immediately change its name to another name that does not
include "Nextel" or any modification thereof.
14.15 GOVERNMENT FILINGS. From time to time, the Company
shall execute and cause to be filed, and the Shareholders agree to execute,
such certificates, filings and documents in such jurisdictions as may be
necessary or appropriate in connection with the conduct of the Business.
[Signature page follows]
PERU SHAREHOLDERS AGREEMENT
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<PAGE> 30
IN WITNESS WHEREOF, this Agreement has been executed as of the date
and year first above written.
THE COMPANY:
VALORCOM S.A.
By /s/ BRIAN A. VINCENT
-----------------------------------------
Its DIRECTOR
-----------------------------------------
Address: c/o Nextel International, Inc.
1191 Second Avenue, Suite 1600
Seattle, WA 98101
Facsimile number: (206) 749-8384
NEXTEL INTERNATIONAL, INC.
By /s/ BRIAN A. VINCENT
-----------------------------------------
Its VICE PRESIDENT
-----------------------------------------
Address: 1191 Second Avenue, Suite 1600
Seattle, WA 98101
Facsimile number: (206) 749-8384
THE SHAREHOLDERS:
NEXTEL INTERNATIONAL (PERU), LLC
By /s/ BRIAN A. VINCENT
-----------------------------------------
Its VICE PRESIDENT
-----------------------------------------
Address: c/o Nextel International, Inc.
1191 Second Avenue, Suite 1600
Seattle, WA 98101
Facsimile number: (206) 749-8384
MOTOROLA INTERNATIONAL DEVELOPMENT CORPORATION
By /s/ JAMES L. OSBORN
-----------------------------------------
Its ATTORNEY-IN-FACT
-----------------------------------------
Address: c/o Motorola, Inc.
1301 E. Algonquin Road
Schaumburg, Illinois 60196-1078
Facsimile number: (847) 576-9179
[SIGNATURE PAGE TO SHAREHOLDERS AGREEMENT]
<PAGE> 31
/s/ OSCAR BENALCAZAR COZ
-----------------------------------------
OSCAR BENALCAZAR COZ
Address: c/o Mastercom S.A.
Av. Arequipa 3908, Miraflores
Lima, Peru
Facsimile number: 011-51-1-442-9483
[SIGNATURE PAGE TO SHAREHOLDERS AGREEMENT]
<PAGE> 32
Exhibit I
SCHEDULE OF SHAREHOLDERS
<TABLE>
<CAPTION>
SHAREHOLDER PERCENTAGE
- ----------- ----------
<S> <C>
Nextel International (Peru), LLC 70.05%
Motorola International Development Corporation 19.95%
Oscar Benalcazar Coz 10%
</TABLE>
<PAGE> 1
EXHIBIT 10.4
SHARE PURCHASE AGREEMENT
BY AND AMONG
NEXTEL INTERNATIONAL, INC.,
NEXTEL INTERNATIONAL (DELAWARE), LTD.,
NEXTEL INTERNATIONAL (HOLDINGS), LTD.,
TELCOM VENTURES, LLC,
WIRELESS VENTURES OF ARGENTINA, L.L.C.
AND
NEXTEL INTERNATIONAL (ARGENTINA), LTD.
DATED AS OF JANUARY 7, 1998
<PAGE> 2
SHARE PURCHASE AGREEMENT
THIS SHARE PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of this 7th day of January, 1998 by and among NEXTEL INTERNATIONAL,
INC., a Washington corporation formerly known as McCaw International, Ltd.
("Nextel"), NEXTEL INTERNATIONAL (DELAWARE), LTD., a Delaware corporation
formerly known as McCaw International (Delaware), Ltd. and wholly owned
subsidiary of Nextel ("Nextel Delaware"), NEXTEL INTERNATIONAL (HOLDINGS), LTD.,
a Cayman Islands company formerly known as McCaw International (Holdings), Ltd.
and a wholly owned subsidiary of Nextel Delaware ("Buyer"), (each of Nextel,
Nextel Delaware and Buyer being referred to collectively as the "Nextel
Parties"), TELCOM VENTURES, LLC, a Delaware limited liability company
("Telcom"), WIRELESS VENTURES OF ARGENTINA, L.L.C., a Delaware limited liability
company and 99% owned subsidiary of Telcom ("Seller"), and NEXTEL INTERNATIONAL
(ARGENTINA), LTD., a Cayman Islands company formerly known as McCaw
International (Argentina), Ltd. (the "JVC").
RECITALS
A. Buyer, certain Affiliates (as defined below) thereof, Telcom and
Seller entered into the Joint Venture Agreement dated as of October 28, 1996, as
amended by Amendment No. 1 thereto dated as of April 25, 1997 (together, the
"Joint Venture Agreement"), whereby each of Buyer and Seller acquired 50%
ownership of the JVC.
B. Buyer, Seller and the JVC entered into the Members Agreement dated
as of May 6, 1997 (the "Members Agreement") in order to set forth certain
understandings with respect to the management of the JVC.
C. Seller desires to sell and Buyer desires to purchase all of the
shares in the share capital of the JVC owned by Seller for the consideration and
on the terms and conditions provided for in this Agreement.
D. Seller owns 50% of one quota of Nextel Argentina S.R.L., an
Argentine limitada ("Nextel Argentina S.R.L."), and 50% of one quota of each of
Buenos Aires Trunking S.R.L., an Argentina limitada ("BATSA"), Communication
Services S.R.L., an Argentina limitada ("CSSA"), and AirLink S.R.L., an
Argentina limitada ("AirLink" and together with Nextel Argentina S.R.L., BATSA
and CSSA, the "JVC Subsidiaries"), and Seller desires to sell and Buyer desires
to purchase such ownership interests in the JVC Subsidiaries for the
consideration and on the terms and conditions provided for in this Agreement.
BATSA, CSSA and AirLink are in the process of merging with and into Nextel
Argentina S.R.L. and registration of such merger (the "Merger") is pending
before the Public Registry of Commerce of the city of Buenos Aires, Argentina
(the "Registry").
NOW, THEREFORE, in consideration of the mutual benefits to be derived
from this Agreement and the representations, warranties, covenants and
agreements hereinafter contained,
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<PAGE> 3
and subject to the satisfaction of the terms and conditions of this Agreement,
the parties hereby represent, warrant, covenant and agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the following terms
shall have the following meanings:
"Affiliate" of a Person means any Person which directly or
indirectly Controls, is under common Control with, or is Controlled by, such
Person. For the purposes of this Agreement, neither the JVC nor the JVC
Subsidiaries shall be considered an Affiliate of Seller, Telcom or any of the
Nextel Parties.
"Control" (including, with correlative meanings, the terms
"Controlled by" and "under common Control with"), when used with respect to any
Person or Affiliate, means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities or by contract or otherwise.
"Person" means any individual, partnership, limited liability
company, joint-stock company, firm, corporation, association, unincorporated
organization, joint venture, trust or other entity.
1.2 OTHER DEFINITIONAL MATTERS.
(a) The words "this Agreement," "hereby," "herein," "hereof,"
"hereunder" and words of similar import refer to this Agreement as a whole and
not to any particular provisions of this Agreement, and the words "Article,"
"Section," "Schedule" and "Exhibit" and like references are to this Agreement
unless otherwise specified.
(b) Singular and plural forms, as the case may be, of terms defined
herein have correlative meanings.
(c) Any defined term which relates to a document includes within
its definition any amendments, modifications, renewals, restatements,
extensions, supplements or substitutions which may heretofore have been or which
may hereafter be executed in accordance with the terms thereof and as may be
permitted by this Agreement.
ARTICLE II
SALE AND PURCHASE
2.1 SALE AND PURCHASE OF SHARES. In reliance on the representations,
warranties and covenants contained herein and subject to the terms and
conditions hereof, on the Closing Date (as defined below):
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<PAGE> 4
(a) Seller will sell, convey, transfer and deliver to Buyer, and
Buyer will purchase from Seller, 20,898,600 shares in the share capital of the
JVC, representing all of the shares in the share capital of the JVC owned by
Seller (the "Shares").
(b) Buyer agrees to pay, or have paid, to Seller an aggregate
purchase price of US$46,000,000 for the Shares, less a deduction of US$49,502
representing the net amount due under Section 2.3 of the Joint Venture Agreement
(the "Purchase Price"). On or before the Closing Date, the Purchase Price shall
be paid via a wire transfer of immediately available funds to an account
designated in writing by Seller at least three business days prior to the
Closing Date.
(c) Seller will sell, convey, transfer and deliver to Buyer, and
Buyer will purchase from Seller, the 50% ownership interest that Seller owns in
the one quota of each of the JVC Subsidiaries representing the entire equity
interest of each JVC Subsidiary owned by Seller; provided, however, if the
Merger has been duly registered with the Registry, Seller will sell, convey
transfer and deliver to Buyer, and Buyer will purchase from Seller, all of the
quotas of Nextel Argentina S.R.L. then held by Seller.
2.2 CLOSING. The closing of the transactions contemplated hereby (the
"Closing") shall take place on a date within seven business days following
satisfaction or waiver of the conditions set forth in Article VII and Article
VIII (the "Closing Date") at the offices of Nextel International, Inc., 1191
Second Avenue, Suite 1600, Seattle, Washington, or at such other place or time
as Seller and Buyer may agree.
2.3 POST-CLOSING CHARTER DOCUMENTS. Buyer shall cause the Memorandum
and Articles of Association of the JVC to be amended on or before the Closing
Date in the form set forth in Exhibit 8.8. The JVC shall duly register the sale
and transfer of the Shares on its Register of Members. Each JVC Subsidiary
shall, and the quotaholders of each JVC Subsidiary shall cause such JVC
Subsidiary to, amend the articles of incorporation of such JVC Subsidiary to
reflect the transactions contemplated by Section 2.1(c).
2.4 FAILURE TO CLOSE. If the Closing shall not take place by January
31, 1998, this Agreement shall terminate and no party hereto shall have any
further obligations hereunder, except for damages resulting from a willful
breach by such party. In addition, if the Closing shall not take place by
January 31, 1998, Seller or its Affiliates shall have the right to purchase, on
or before February 13, 1998, 50% of any shares in the share capital of the JVC
issued by the JVC between December 12, 1997 and February 13, 1998 at a price
equal to the price paid by the acquiror of such shares, such that immediately
after such purchase by Seller, its ownership interest in the JVC shall represent
a 50% ownership interest in the share capital of the JVC; provided, however,
Seller shall not have such right in the event that the Closing did not occur as
the result of a material breach of this Agreement by Seller or Telcom.
2.5 WAIVER OF PREEMPTIVE RIGHTS. All parties hereto hereby waive any
and all preemptive rights or other rights to acquire share capital in the JVC or
the JVC Subsidiaries contained in the Members Agreement or the Articles of
Association of the Company (the "Articles") that they may have as a result of
the transactions contemplated hereby.
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<PAGE> 5
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
To induce Buyer to enter into and perform this Agreement, Seller
represents and warrants to Buyer as of the date hereof and as of the Closing
Date (which representations and warranties shall survive the Closing as provided
in Section 10.5) all as follows in this Article III.
3.1 AUTHORITY; EXECUTION AND DELIVERY. Seller has full power and
authority to enter into this Agreement and to sell the Shares in accordance with
the terms of this Agreement so as to vest in Buyer legal and valid title to the
Shares, free and clear of all claims, liens, pledges, options, charges, security
interests, mortgages, deeds of trust, encumbrances or rights of any third party
of any nature whatsoever (collectively, "Liens") and to consummate the
transactions contemplated by this Agreement in accordance with its terms. This
Agreement has been duly executed and delivered by Seller and constitutes the
legal, valid and binding obligation of Seller, enforceable against Seller in
accordance with its terms.
3.2 ORGANIZATION, GOOD STANDING, ETC. Seller is duly organized and
validly existing under the laws of the State of Delaware. Seller has all
corporate power and authority required to own, operate and lease its properties
and assets and to carry on its business as now conducted except where such
failure to have corporate power and authority would not have a material adverse
effect on Seller.
3.3 OWNERSHIP OF SHARES. Seller is the lawful owner of, and has
marketable title to, the Shares, free and clear of all Liens. The transfer and
sale of the Shares is not subject to any right of first refusal or offer, right
of co-sale or other right restricting or otherwise encumbering the Shares except
pursuant to the Members Agreement or the Articles. Upon payment for, and
delivery of, the Shares in accordance with the terms of this Agreement and the
register of such transfer in the Registry of Members of the JVC, good and
marketable title to the Shares, free and clear of any Liens, will be transferred
to, and vested in, the Buyer.
3.4 CONSENTS, NO CONFLICTS, ETC. Except pursuant to the Members
Agreement or the Articles, neither the execution and delivery of this Agreement,
the consummation of the transactions contemplated by this Agreement, nor
compliance with any of the provisions of this Agreement will (with or without
the giving of notice or the passage of time) (i) violate, conflict with, result
in a breach of, constitute a default under, or result in the creation of any
Liens upon the Shares pursuant to any of the terms, conditions or provisions of
(x) the certificate of incorporation, bylaws or other organizational documents
of Seller, or (y) any note, bond, mortgage, indenture, deed of trust, lease,
license, agreement, or any other instrument or obligation to which Seller is a
party, or by which Seller or any of its assets or properties may be bound or
affected, (ii) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Seller or any of its assets or properties of which
Seller should reasonably have knowledge, or (iii) require the consent, approval,
permission or other authorization of or by or qualification with any court,
arbitrator or governmental, administrative or self-regulatory authority or any
other Person of which Seller should reasonably have knowledge.
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<PAGE> 6
3.5 NO OTHER AGREEMENTS. Seller does not have any legal obligation,
absolute or contingent, to any other Person to sell, convey, transfer, pledge,
hypothecate or deliver any or all of the Shares or to enter into any agreement
with respect to the foregoing.
3.6 NO LIABILITIES. Neither the JVC nor any of the JVC Subsidiaries
have any outstanding liabilities or obligations to Seller, Telcom or any of
their Affiliates (excluding for this purpose, LCC International, Inc. and its
subsidiaries) and none of Seller, Telcom or their Affiliates (excluding for this
purpose, LCC International, Inc. and its subsidiaries) have any outstanding
liabilities or obligations to the JVC or any of the JVC Subsidiaries.
3.7 BROKERAGE. Seller has not retained any broker or finder in
connection with the transactions contemplated by this Agreement. Any brokerage
or finder's fee due to any broker or finder in violation of the foregoing
representation shall be paid by Seller.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
To induce Seller to enter into and perform this Agreement, Buyer
represents and warrants to Seller as of the date hereof and as of the Closing
Date (which representations and warranties shall survive the Closing as provided
in Section 10.5) all as follows in this Article IV.
4.1 ORGANIZATION, GOOD STANDING, ETC. Buyer is duly incorporated and
validly existing under the laws of the Cayman Islands. Buyer has all corporate
power and authority required to own, operate and lease its properties and assets
and to carry on its business as now conducted except where such failure to have
corporate power and authority would not have a material adverse effect on Buyer.
4.2 AUTHORITY; EXECUTION AND DELIVERY. Buyer has full power and
authority to enter into this Agreement, to purchase the Shares in accordance
with the terms of this Agreement and to consummate the transactions contemplated
by this Agreement in accordance with its terms. This Agreement has been duly
executed and delivered by the Buyer and constitutes the legal, valid and binding
obligation of the Buyer, enforceable against Buyer in accordance with its terms.
4.3 CONSENTS, NO CONFLICTS, ETC. Neither the execution and delivery of
this Agreement, the consummation of the transactions contemplated by this
Agreement, nor compliance with any of the provisions of this Agreement will
(with or without the giving of notice or the passage of time) (i) violate,
conflict with, result in a breach of, or constitute a default pursuant to any of
the terms, conditions or provisions of (x) the memorandum or articles of
association of Buyer, or (y) any note, bond, mortgage, indenture, deed of trust,
or material lease, license or agreement or any other material instrument or
obligation to which Buyer is a party or by which Buyer or any of its assets or
properties may be bound or affected, (ii) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to Buyer or any of its assets or
properties of which Buyer should reasonably have knowledge or (iii) require the
consent, approval, permission or other authorization of or by or filing or
qualification with any
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<PAGE> 7
court, arbitrator or governmental, administrative, or self-regulatory authority
or any other person or entity of which Buyer should reasonably have knowledge.
4.4 BROKERAGE. Buyer has not retained any broker or finder in
connection with the transactions contemplated by this Agreement. Any brokerage
or finder's fee due to any broker or finder in violation of the foregoing
representation shall be paid by Buyer.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE JVC
To induce Seller to enter into and perform this Agreement, the JVC
represents and warrants to Seller as of the date hereof and as of the Closing
Date (which representations and warranties shall survive the Closing as provided
in Section 10.5) all as follows in this Article V.
5.1 NO LIABILITIES. To the best of its knowledge, neither the JVC nor
any of the JVC Subsidiaries have any outstanding liabilities or obligations to
Seller, Telcom or any of their Affiliates (excluding for this purpose, LCC
International, Inc. and its subsidiaries) and none of Seller, Telcom or their
Affiliates (excluding for this purpose, LCC International, Inc. and its
subsidiaries) have any outstanding liabilities or obligations to the JVC or any
of the JVC Subsidiaries.
ARTICLE VI
FURTHER AGREEMENTS
Each of the parties hereto agrees to perform and observe the following
agreements applicable to it:
6.1 SCHEDULES.
(a) All representations and warranties herein shall apply to any
exhibits, schedules and certificates delivered by Buyer or any officer thereof
to Seller, and each such certificate shall be deemed to be a representation by
Buyer as to the matters set forth therein. All representations and warranties
herein shall apply to any exhibits, schedules and certificates delivered by
Seller or any officer thereof to Buyer, and each such certificate shall be
deemed to be a representation by Seller as to the matters set forth therein.
(b) On or prior to the Closing Date, Buyer may deliver to Seller
and Seller may deliver to Buyer one or more Schedules to this Agreement that
have been revised and updated to reflect changes to the operations or condition
of Buyer or Seller, as the case may be, between the date hereof and the Closing.
The delivery of any such revised Schedule shall not affect the rights of any
party under Articles VII and VIII, but if the Closing shall occur, the revised
Schedules shall be deemed to supersede the Schedules delivered herewith, but
only with respect to the representations and warranties given as of the Closing
Date.
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<PAGE> 8
6.2 RESIGNATION OF THE JVC DIRECTORS. At the Closing, Seller shall
cause the resignation of Rajendra Singh, Neera Singh, Rahul Prakash and any
alternate directors appointed by Seller from the Board of Directors of the JVC.
6.3 JOINT VENTURE AGREEMENT. The parties hereto acknowledge and agree
that, effective upon the Closing and the payment of the Purchase Price, neither
Buyer, Seller nor any other party shall have any liability, claim, or obligation
to reimburse or indemnify arising under Section 2.3 of the Joint Venture
Agreement. The parties acknowledge and agree that, except as contemplated by the
preceding sentence, the rights and obligations of the parties to the Joint
Venture Agreement contained in Article VIII thereof shall continue to be of full
force and effect and shall in no way be affected by the provisions of this
Agreement.
6.4 MEMBERS AGREEMENT. Seller, Buyer and the JVC hereby agree that the
Members Agreement will automatically be terminated and of no further force and
effect as of the Closing Date.
6.5 TERMINATION OF AGENCY AGREEMENT. The JVC, Buyer and Seller hereby
agree that the Agency Agreement (the "Agency Agreement") dated as of May 6, 1997
by and between the JVC, Buyer and Seller shall automatically be terminated and
of no further force and effect as of the Closing Date.
6.6 CONFIDENTIALITY. The Confidentiality Agreement among Telcom,
Wireless Ventures of Brazil, Inc., Seller and Nextel dated as of October 28,
1996 shall remain in full force and effect in accordance with its terms and
shall apply to all documents and information supplied in connection herewith.
6.7 ASSIGNMENT OF RIGHTS IN CAPITAL CONTRIBUTIONS. Each of Seller and
Telcom hereby agrees to assign to the JVC all rights, if any, it has to any
capital contributions made to the JVC Subsidiaries.
6.8 CERTAIN RENTED EQUIPMENT. Prior to the Closing Date, Buyer shall
advise Telcom whether the JVC wishes to retain the spectrum analyzer and related
equipment that has been rented by Telcom from Electro Rent Corporation (the
"Lessor") on behalf of the JVC Subsidiaries (the "Rented Equipment"). If the JVC
wishes to continue to use the Rented Equipment, the Buyer and Telcom shall
arrange for the transfer of the rental arrangement for the Rental Equipment from
Telcom to Buyer by the 30th day following the Closing. If the parties are unable
to arrange for such transfer by such date or if Buyer does not advise Telcom by
the Closing that the JVC wishes to continue to use the Rented Equipment, at the
request of Telcom, Buyer shall cause the Rented Equipment to be delivered to
Telcom (or its designee) at a location to be designated by Telcom in Buenos
Aires, Argentina.
6.9 OTHER COOPERATION. All parties will promptly take, and fully
cooperate with the other parties and their legal counsel and accountants in
connection with, any steps reasonably required to be taken as part of the
obligations of the parties under this Agreement or to promptly satisfy the
conditions precedent hereunder. Nextel shall cause Buyer to comply with all of
its agreements and obligations hereunder.
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<PAGE> 9
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
The obligations of Seller to perform and observe the covenants,
agreements and conditions hereof to be performed and observed by it at or before
the Closing Date shall be subject to the satisfaction of the following
conditions, any of which may be expressly waived by Seller.
7.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Buyer contained in Article IV (including applicable Schedules
hereto) shall have been true in all material respects when made and shall be
true in all material respects on and as of the Closing Date with the same force
and effect as though made on and as of such date, except as affected by
transactions contemplated hereby and except to the extent that such
representations and warranties shall have been made as of a specified date, in
which case such representations and warranties shall have been true as of the
specified date.
7.2 PERFORMANCE OF AGREEMENT. Buyer shall have performed in all
material respects all obligations and agreements and complied in all material
respects with all covenants and conditions contained in this Agreement to be
performed and complied with by it at or prior to the Closing Date.
7.3 APPROVALS AND CONSENTS. All approvals and consents from third
parties listed on Schedule 4.3, if any, shall have been obtained.
7.4 LEGAL PROCEEDINGS. No law, regulation, administrative ruling or
order of any court or administrative agency of competent jurisdiction shall be
in effect that enjoins, restrains or prohibits consummation of this Agreement,
and no litigation, investigation or administrative proceeding reasonably likely
to enjoin, restrain or prohibit consummation of this Agreement shall be pending.
7.5 BUYER OFFICERS' CERTIFICATES. Seller shall have received a
certificate from a Vice President of Nextel, dated the Closing Date, in
substantially the form attached hereto as Exhibit 7.5, certifying that (a) the
conditions set forth in this Article VII have been fulfilled and (b) the
representations and warranties of Buyer herein are true and correct in all
material respects as of the Closing Date.
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
The obligations of Buyer to perform and observe the covenants,
agreements and conditions hereof to be performed and observed by Buyer at or
before the Closing Date shall be subject to the satisfaction of the following
conditions, any of which may be expressly waived in writing by Buyer.
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<PAGE> 10
8.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Seller contained in Article III (including applicable
Schedules thereto) shall have been true in all material respects when made and
shall be true in all material respects on and as of the Closing Date with the
same force and effect as though made on and as of such date, except as affected
by transactions contemplated hereby and except to the extent that such
representations and warranties are made as of a specified date, in which case
such representations and warranties shall be true as of the specified date.
8.2 PERFORMANCE OF AGREEMENT. Seller shall have performed in all
material respects all obligations and agreements and complied in all material
respects with all covenants and conditions contained in this Agreement to be
performed and complied with by it at or prior to the Closing Date.
8.3 SHARE CERTIFICATES. On the Closing Date, Seller shall have
delivered to Buyer all certificates in Seller's possession evidencing the
Shares, free and clear of any Liens, duly endorsed in blank for transfer or
accompanied by stock powers duly executed in blank and with all requisite
documentary or stock transfer tax stamps affixed.
8.4 TRANSFER TAXES. In addition to payment of documentary or stock
transfer taxes provided for in Section 8.3 hereof, Seller shall be responsible
for the payment of any other documentary, transfer, sales, use, gains or other
similar taxes applicable to the transactions contemplated by this Agreement and,
on the Closing Date, Seller shall have delivered to Buyer evidence of payment of
any such taxes legally required to be paid prior to the transfer of the Shares.
8.5 APPROVALS AND CONSENTS. All material approvals and consents from
third parties listed on Schedule 3.4, if any, shall have been obtained.
8.6 LEGAL PROCEEDINGS. No law, regulation, administrative ruling or
order of any court or administrative agency of competent jurisdiction shall be
in effect that enjoins, restrains or prohibits consummation of this Agreement,
and no litigation, investigation or administrative proceeding reasonably likely
to enjoin, restrain or prohibit consummation of this Agreement shall be pending.
8.7 SELLER'S OFFICERS' CERTIFICATE. Buyer shall have received a
certificate from Seller, dated the Closing Date, in substantially the form
attached hereto as Exhibit 8.7, certifying that (a) the conditions set forth in
Sections 8.1, 8.2, 8.3, 8.4, 8.5, 8.6 (to its knowledge), 8.9 and 8.10 have been
fulfilled and (b) the representations and warranties of Seller herein are true
and correct as of the Closing Date.
8.8 AMENDMENT OF MEMORANDUM AND ARTICLES OF ASSOCIATION. The Memorandum
and Articles of Association of the JVC shall have been amended and restated in
the form attached hereto as Exhibit 8.8.
8.9 RESIGNATION OF DIRECTORS. Rajendra Singh, Neera Singh and Rahul
Prakash shall have resigned as Directors of the JVC effective as of the Closing
and any alternate Directors of
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<PAGE> 11
the JVC appointed by Seller or its Directors shall have resigned effective as of
the Closing, and Seller shall not have nominated any replacements to such
positions.
8.10 TERMINATION OF POWERS OF ATTORNEY. All powers of attorney, if
any, granted by Seller or its Affiliates with respect to any of the JVC
Subsidiaries shall have been terminated effective as of the Closing.
ARTICLE IX
NONCOMPETITION
Each of Telcom and Seller agrees that, until three years following the
Closing Date, neither such party nor any Affiliate Controlled by such party
shall in any way, by action or inaction, directly or indirectly, for itself or
for the benefit of any other Person, own, manage, operate, join, Control or
participate in the ownership, management, operation or Control of any Person
that competes with the Company or any Affiliate thereof, or agrees to do any of
the foregoing, in the business of paging, specialized mobile radio or enhanced
specialized mobile radio in Argentina, other than wireless radio engineering,
design or program management services and the manufacture and sale of related
software and hardware products.
ARTICLE X
INDEMNIFICATION AND SURVIVAL OF WARRANTIES
10.1 INDEMNIFICATION BY SELLER AND TELCOM. Seller and Telcom agree to
jointly and severally indemnify and hold harmless, on an after-tax basis, Buyer,
its successors and permitted assigns, and the officers, directors, Affiliates,
employees, Controlling Persons and agents of the foregoing and to hold each such
party harmless against and in respect of any and all losses, damages, costs and
expenses, including attorneys' fees ("Damages"), incurred by such party by
reason of (a) the breach of any of the representations or warranties made in
this Agreement by Seller or Telcom, (b) the breach of any covenant contained
herein by Seller or Telcom, (c) the breach of undertakings of Seller or Telcom
in any other document, supplement, instrument, agreement, letter, amendment or
assignment executed in connection herewith, or in any certificate delivered to
Buyer at or in connection with the Closing, or (d) the failure of Seller or
Telcom or any of their Affiliates to fulfill their respective obligations under
the U.S.$200,000.00 Note owing to Conevial relating to indebtedness incurred by
WVA prior to the closing of the Joint Venture Agreement or the U.S.$125,204.00
Note to Ericsson LM Telephone Co. or its Affiliates relating to the purchase of
equipment by WVA prior to the closing of the Joint Venture Agreement; provided
that, except with respect to clause (d) above, Seller and Telcom shall not be
obligated to make any payments under this Section 10.1 unless and until the
amount of Damages exceeds US$100,000.00.
10.2 INDEMNIFICATION BY BUYER AND NEXTEL. Buyer and Nextel agree to
jointly and severally indemnify and hold harmless, on an after-tax basis,
Seller, its successors and permitted assigns, and the officers, Directors,
Affiliates, employees, Controlling Persons and agents of the foregoing and to
hold each such party harmless against and in respect of any and all damages
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<PAGE> 12
incurred by such party by reason of (a) the breach of any of the representations
or warranties made in this Agreement by Buyer, (b) the breach of any covenant
contained herein by Buyer or Nextel, or (c) the breach of undertakings of Buyer
or Nextel in any other document, supplement, instrument, agreement, letter,
amendment or assignment executed in connection herewith or in any certificate
delivered to Seller at or in connection with the Closing; provided that Buyer
shall not be obligated to make any payments under this Section 10.2 unless and
until the amount of damages exceeds US$100,000.00.
10.3 TIME OF REPRESENTATIONS. For purposes of the indemnification made
in this Article X, all representations and warranties shall be deemed to have
been made on and as of the Closing Date, except to the extent that such
representations and warranties are expressly made as of a specified date, in
which case such representations and warranties shall be true as of the specified
date.
10.4 PROCEDURE. With respect to the claims made by third parties, if
a party entitled to indemnification is threatened with any claim, or any claim
is presented to or any action or proceeding is commenced against such party,
that may give rise to the right of indemnification hereunder, Buyer or Seller,
as the case may be (the "Indemnitee"), will give written notice thereof promptly
(and in no event later than the last survival date of the representation and
warranty for the breach of which indemnification is sought) to the party from
which indemnification is sought (the "Indemnifying Party"); provided that the
failure to give notice in accordance with this Section 10.4 shall not prevent
enforcement hereunder if such failure is not prejudicial to the Indemnifying
Party. The Indemnifying Party shall have the right to participate in the defense
of such claim, action or proceeding, and, to the extent the Indemnifying Party
so desires, jointly with any other Indemnifying Party similarly notified, to
assume the defense thereof with counsel mutually satisfactory to such parties
and the Indemnitee. If the Indemnifying Party and the Indemnitee agree upon
mutually satisfactory counsel to assume the defense, the Indemnifying Party
shall assume the expense of such counsel's fees and shall no longer assume the
expense of the Indemnitee's attorneys' fees. In the event the Indemnifying Party
undertakes to compromise or defend any such liability, the Indemnifying Party
shall so notify the Indemnitee in writing promptly of its intention to do so,
and the Indemnitee shall cooperate with the Indemnifying Party and its counsel
in the compromising of or the defending against any such liabilities or claims,
at the expense of the Indemnifying Party. Such cooperation shall include, but
shall not be limited to, the provision to the Indemnifying Party of reasonable
access to the Indemnitee's business records, research, documents and employees
as they relate to the defense of any indemnified claim. In response to a bona
fide settlement offer, the Indemnifying Party may settle the monetary portion of
an indemnifiable matter that he has duly elected to contest without the consent
of the Indemnitee unless such settlement has an adverse effect upon the
Indemnitee, in which case such matters shall be settled only with the consent of
the Indemnitee; provided, however, that the Indemnifying Party shall not have
the right to agree to a settlement involving injunctive or other equitable
relief without obtaining the prior written consent of the Indemnitee. In the
event the Indemnitee declines to consent to the monetary settlement described in
the preceding sentence, then the Indemnitee shall have no right to
indemnification beyond, and the Indemnifying Party shall have no obligation to
pay damages and attorneys' fees hereunder in excess of, the amount of the
proposed settlement.
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<PAGE> 13
10.5 SURVIVAL. The covenants, agreements, representations and
warranties made by the parties in or pursuant to this Agreement shall survive
the Closing Date for one year except as otherwise set forth herein. Any claim
for indemnification asserted in accordance with the provisions of this Agreement
prior to the relevant expiration date shall survive until it is resolved.
ARTICLE XI
TERMINATION
11.1 TERMINATION. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Closing Date:
(a) by mutual written consent;
(b) if the Closing does not occur on or before January 31, 1998;
(c) by either Seller or Buyer if a court of competent
jurisdiction or governmental authority shall have issued a nonappealable final
order, decree or ruling or taken any other action, in each case having the
effect of permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated hereby;
(d) by Seller upon a breach of any representation, warranty,
covenant or agreement on the part of Buyer set forth in this Agreement such that
the conditions set forth in Section 7.1 or 7.2 would not be satisfied; or by
Buyer upon a breach of any representation, warranty, covenant or agreement on
the part of Seller set forth in this Agreement such that the conditions set
forth in Section 8.1 or 8.2 would not be satisfied; or
(e) by Seller if any representation or warranty of Buyer shall
have become untrue such that the conditions set forth in Article VII cannot
reasonably be expected to be satisfied; or by or Buyer if any representation or
warranty of Seller shall have become untrue such that the conditions set forth
in Article VIII cannot reasonably be expected to be satisfied.
11.2 EFFECT OF TERMINATION. In the event of any termination pursuant
to this Article XI (other than pursuant to Section 11.1(a), written notice
setting forth the reasons therefor shall forthwith be given by the terminating
party to the other party hereto, and neither party shall have any liability to
the other party of any nature whatsoever due to such termination, except for
damages resulting from a willful breach.
ARTICLE XII
GENERAL
12.1 EXPENSES. Regardless of whether the transactions contemplated by
this Agreement are consummated, Seller shall pay its own fees, costs and
expenses, and Buyer shall pay its own fees, costs and expenses, incident to the
negotiation, preparation and carrying out of this Agreement.
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<PAGE> 14
12.2 AMENDMENT. The parties may amend, modify or supplement this
Agreement at any time, but only in a written amendment duly executed on behalf
of each of the parties.
12.3 HEADINGS. The headings preceding the text of Sections of this
Agreement are for convenience only and shall not be deemed parts thereof.
12.4 APPLICABLE LAW; ENFORCEMENT. This Agreement shall be governed by
and construed and enforced in accordance with the laws of the State of Delaware,
as applied to contracts executed and to be fully performed in such state. Each
of the parties hereto (a) consents to submit itself to the personal jurisdiction
of any federal court located in the Commonwealth of Virginia or any Virginia
state court if any dispute arises out of this Agreement (b) agrees that it will
not attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court and (c) agrees that it will not bring any
action relating to this Agreement or any of the transactions contemplated by
this Agreement in any court other than a federal court sitting in the
Commonwealth of Virginia or a Virginia state court.
12.5 PARTIES IN INTEREST. All the terms and provisions of this
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and permitted assigns of the parties hereto,
whether herein so expressed or not. This Agreement shall not be assigned by any
party hereto in whole or in part without the prior written consent of the other
parties hereto; provided, however, that Buyer may at any time assign all or part
of its right, title and interest in, to and under this Agreement and the
documents, agreements and supporting papers delivered in connection herewith to
any Affiliate of Buyer; provided further that any such assignment shall not
relieve Buyer or Nextel of any obligations hereunder.
12.6 WAIVERS. Any terms, covenants, representations, warranties or
agreements of any party hereto may be waived at any time by an instrument in
writing executed by the party for whose benefit such terms exist. The failure of
any party at any time or times to require performance of any provisions hereof
shall in no manner affect its right at a later time to enforce the same. No
waiver by any party of any condition or breach of any terms, covenants,
representations, warranties or agreements contained in this Agreement shall be
effective unless in writing, and no waiver in any one or more instances shall be
deemed to be a further or continuing waiver of any other condition or any breach
of any other terms, covenants, representations, warranties or agreements.
12.7 NOTICES. Any notice or demand desired or required to be given
hereunder shall be in writing and deemed given when personally delivered or
deposited in the mail, postage prepaid, sent certified or registered, or when
delivered by facsimile, and addressed as respectively set forth below, or to
such other address as any party shall have previously designated by such a
notice. Any notice so delivered personally or by facsimile, transmission
confirmed, shall be deemed to be received on the date of delivery and any notice
so mailed shall be deemed to be received three days after the date on which it
was mailed.
Notices to the parties shall be sent as follows:
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<PAGE> 15
(a) To Nextel Parties and the JVC:
Nextel International, Inc.
1191 Second Avenue, Suite 1600
Seattle, WA 98101
Attention: General Counsel
Fax: (206) 749-8384
with a copy to:
Venture Law Group
4750 Carillon Point
Kirkland, WA 98033
Attention: Craig E. Sherman
Fax: (425) 739-8709
File #: 15799-0007
To Telcom or Seller:
Telcom Ventures, LLC
211 North Union Street, Suite 300
Alexandria, VA 22314
Attention: President and General Counsel
Fax: (703) 706-3801
with a copy to:
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, NY 10019
Attention: William J. Phillips
Fax: (212) 259-6333
12.8 PUBLIC DISCLOSURE. No party to this Agreement shall issue any
press releases or make any public announcements of any of the transactions
contemplated by this Agreement except that each party hereto shall be permitted
to make such disclosures to the public or governmental authorities as their
respective counsel shall deem necessary to maintain compliance with, or prevent
violation of, applicable laws or regulations or to comply with an order of a
court of competent jurisdiction.
12.9 COUNTERPARTS. This Agreement may be executed simultaneously in
any number of counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
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<PAGE> 16
12.10 ENTIRE UNDERSTANDING. The terms set forth in this Agreement are
intended by the parties as a final, complete and exclusive expression of the
terms of its agreement and may not be contradicted, explained or supplemented by
evidence of any prior agreement, any contemporaneous oral agreement or any
consistent additional terms.
[Signature page follows.]
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<PAGE> 17
IN WITNESS WHEREOF, the parties hereto have entered into and signed
this Agreement as of the date and year first above written.
NEXTEL INTERNATIONAL, INC.
By /s/ HENG-PIN KIANG
------------------------------
Its SENIOR VICE PRESIDENT
---------------------------
NEXTEL INTERNATIONAL
(DELAWARE), LTD.
By /s/ HENG-PIN-KIANG
------------------------------
Its VICE PRESIDENT
---------------------------
NEXTEL INTERNATIONAL
(HOLDINGS), LTD.
By /s/ HENG-PIN-KIANG
------------------------------
Its VICE PRESIDENT
---------------------------
TELCOM VENTURES, LLC
By /s/ RAHUL PRAKASH
------------------------------
Its
---------------------------
WIRELESS VENTURES OF
ARGENTINA, L.L.C.
By /s/ RAHUL PRAKASH
------------------------------
Its
---------------------------
NEXTEL INTERNATIONAL
(ARGENTINA), LTD.
By /s/ HENG-PIN-KIANG
------------------------------
Its VICE PRESIDENT
---------------------------
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<PAGE> 1
EXHIBIT 10.5
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") dated as of March 17,
1998 by and among Nextel International (Japan), Ltd., a Delaware corporation
("Nextel Japan"), Nippon Motorola Ltd., a company organized under the laws of
Japan ("NML"), and J-Com Co., Ltd., a joint stock company organized under the
laws of (the "Company"). The parties hereto may be referred to herein
individually as a "Party" or collectively as the "Parties," as the case may
require.
W I T N E S S E T H:
WHEREAS, NML is the owner of 1,544 shares of common stock, par value
50,000 Yen per share of the Company (the "Shares"), which represents 21% of the
issued and outstanding shares of capital stock of the Company; and
WHEREAS, NML desires to sell, and Nextel Japan desires to purchase the
Shares subject to the terms and conditions contained in this Agreement.
NOW, THEREFORE, IT IS AGREED:
ARTICLE I
SALE OF STOCK
1.1 Sale of Stock. Subject to the terms and conditions herein stated,
NML agrees to sell, assign, transfer and deliver to Nextel Japan on the Closing
Date (as hereinafter defined), and Nextel Japan agrees to purchase from NML on
the Closing Date 1,544 shares of the common stock of the Company. The
certificates representing the Shares shall be duly endorsed in blank, or
accompanied by stock powers duly executed in blank, by NML.
1.2 Price. In full consideration for the purchase by Purchaser of the
Shares, Purchaser shall pay to NML on the Closing Date an aggregate of Yen
77,200,000 in immediately available funds.
1.3 Closing. The sale referred to in Section 4.1 shall take place at
10:00 A.M. at the offices of the Company, 20-1, Minami-Azabu 3-chome, Minato-ku,
Tokyo 106, Japan on March __, 1998, or at such other time and date as the
Parties hereto shall by written instrument designate. Such time and date are
herein referred to as the "Closing Date."
<PAGE> 2
ARTICLE II
REPRESENTATIONS OF NML
NML represents and warrants to Nextel Japan as follows:
2.1 Ownership of Shares. NML has good and marketable title to the
Shares, free and clear of all liens, claims, encumbrances and restrictions
except as set forth in that certain Shareholders' Agreement dated December 15,
1997 (the "Shareholders Agreement") by and among the Company, NML, DJSMR
Business Partnership ("DJSMR"), Nichimen Corporation ("Nichimen") and ORIX
Corporation ("ORIX").
2.2 Existence and Good Standing of NML: Power and Authority. NML is a
corporation duly organized, validly existing and in good standing under the laws
of Japan. NML has the corporate power and authority to make, execute deliver and
perform this Agreement, and this Agreement has been duly authorized and approved
by all required corporate action of NML, and has been duly executed and
delivered by NML and is enforceable against NML in accordance with its terms.
2.3 Shareholders' Agreement. The representations and warranties of NML
set forth in Article XVII of the Shareholders' Agreement are true and correct as
of the date hereof and shall be true and correct as of the Closing Date as
though made on and as of such dates, except to the extent that any such
representation or warranty expressly relates to an earlier date.
ARTICLE III
REPRESENTATIONS OF THE COMPANY
The Company represents and warrants to Nextel Japan as follows:
3.1 Capital Stock. The Company has an authorized capitalization
consisting of 14,400 shares of common stock, 50,000 Yen par value per share, of
which 7,350 shares are issued and outstanding.
3.2 Existence and Good Standing of the Company: Power and Authority.
The Company is a corporation duly organized, validly existing and in good
standing under the laws of Japan. The Company has the corporate power and
authority to make, execute deliver and perform this Agreement, and this
Agreement has been duly authorized and approved by all required corporate action
of the Company, and has been duly executed and delivered by the Company and is
enforceable against the Company in accordance with its terms.
3.3 Shareholders' Agreement. The representations and warranties of the
Company set forth in Article XVII of the Shareholders' Agreement are true and
correct as of the date hereof and shall be true and correct as of the Closing
Date as though made on and as of such dates, except to the extent that any such
representation or warranty expressly relates to an earlier date.
2
<PAGE> 3
ARTICLE IV
REPRESENTATIONS OF NEXTEL JAPAN
Nextel Japan represents and warrants to NML and the Company as follows:
4.1 Existence and Good Standing of Nextel Japan: Power and Authority.
Nextel Japan is a corporation duly organized, validly existing and in good
standing under the laws of Delaware. Nextel Japan has the corporate power and
authority to make, execute, deliver and perform this Agreement, and this
Agreement has been duly authorized and approved by all required corporate action
of Nextel Japan, and has been duly executed and delivered by Nextel Japan and is
enforceable against Nextel Japan in accordance with its terms.
4.2 Shareholders' Agreement. The representations and warranties of the
Shareholders set forth in Article XVII of the Shareholders' Agreement are true
and correct as to Nextel Japan as of the date hereof and shall be true and
correct as of the Closing Date as though made on and as of such dates.
ARTICLE V
CONDITIONS TO NEXTEL JAPAN'S OBLIGATIONS
The purchase of the Shares by Nextel Japan on the Closing Date is
conditioned upon satisfaction, on or prior to such date, of the following
conditions:
5.1 Truth of Representations and Warranties. The representations and
warranties of NML and the Company contained in this Agreement shall be true and
correct on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of such date.
5.2 No Litigation Threatened. No action or proceedings shall have been
instituted before a court or other governmental body or by any public authority
to restrain or prohibit any of the transactions contemplated hereby.
5.3 Approvals. All filings with and notices to, and all
authorizations, licenses, permits, consents and approvals of, any governmental
or regulatory authority or any third party, if any, necessary to permit the
consummation of the transactions contemplated by this Agreement shall have been
duly made or received.
5.4 Shareholders' Agreement Amendment. The Company, NML, DJSMR,
Nichimen and ORIX shall have duly executed and delivered the Memorandum, which
amends the Shareholders' Agreement, substantially in the form of Exhibit A
hereto.
5.5 Voting Agreement. DJSMR and Nextel Japan shall have duly executed
and delivered a side letter agreement with respect to the appointment of the
director to be jointly
3
<PAGE> 4
designated by DJSMR and Nextel Japan, substantially in the form of Exhibit B
hereto.
5.6 Proceedings. All proceedings to be taken in connection with the
transactions contemplated by this Agreement and the offer letter dated November
7, 1997 and all documents incident thereto shall be satisfactory in form and
substance to Nextel Japan and its counsel, and Nextel Japan shall have received
copies of all such documents and other evidences as it or its counsel may
reasonably request in order to establish the consummation of such transactions
and the taking of all proceedings in connection therewith.
ARTICLE VI
CONDITIONS TO NML'S OBLIGATIONS
The sale of the Shares by NML on the Closing Date is conditioned upon
satisfactions, on or prior to such date, of the following conditions:
6.1 Truth of Representations and Warranties. The representations and
warranties of Nextel Japan contained in this Agreement shall be true and correct
on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of such date.
6.2 No Litigation Threatened. No action or proceedings shall have been
instituted before a court or other governmental body or by any public authority
to restrain or prohibit any of the transactions contemplated hereby
6.3 Approvals. All filings with and notices to, and all
authorizations, licenses, permits, consents and approvals of, any governmental
or regulatory authority or any third party, if any necessary to permit the
consummation of the transactions contemplated by this Agreement shall have been
duly made or received.
6.4 Agreement to be Bound by Shareholders' Agreement. Nextel Japan
shall have duly executed and delivered a side letter agreement pursuant to which
it agrees to comply with and be bound by the terms and conditions of the
Shareholders' Agreement, substantially in the form of Exhibit C hereto.
6.5 Proceedings. All proceedings to be taken in connection with the
transactions contemplated by this Agreement and the offer letter dated November
7, 1997 and all documents incident thereto shall be satisfactory in form and
substance to NML and its counsel, and NML shall have received copies of all such
documents and other evidences as it or its counsel may reasonably request in
order to establish the consummation of such transactions and the taking of all
proceedings in connection therewith, including, without limitation, the letter
agreement regarding equipment guarantees substantially in the form of Exhibit D
hereto.
4
<PAGE> 5
ARTICLE VII
MISCELLANEOUS
7.1 Expenses. The Parties hereto shall pay all of their own expenses
relating to the transactions contemplated by this Agreement, including, without
limitation, the fees and expenses of their respective legal counsel and
financial advisers.
7.2 Governing Law. The interpretation and construction of this
Agreement, and all matters relating hereto, shall be governed by the laws of
Japan without regard to its conflict of laws doctrine.
7.3 Mediation; Litigation. All disputes under this Agreement shall be
settled in accordance with the procedures set forth in the Shareholders'
Agreement.
7.4 Captions. The Article and Section captions used herein are for
reference purposes only, and shall not in any way affect the meaning or
interpretation of this Agreement.
7.5 Publicity. Except as otherwise required by applicable law or
regulation, none of the Parties hereto shall issue any press release or make any
other public statement, in each case relating to, connected with or arising out
of this Agreement or the matters contained herein, without obtaining the prior
written approval of Nextel Japan and NML to the contents and the manner of
presentation and publication thereof.
7.6 Notices. All notices, requests, demands or other communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered or when received if notice is given by facsimile or within five days
after deposited in the mails, postage prepaid, addressed as follows or to such
other address as shall have been designated in writing by the Party to receive
notice:
If to NML, to:
Nippon Motorola Ltd.
20-1, Minami-Azabu 3-chome
Minato-ku, Tokyo 106
Japan
Attention: Law Department
Fax No.: 813-3440-0270
If to Nextel Japan, to:
Nextel International (Japan), Ltd.
c/o Nextel International, Inc.
1191 Second Avenue, Suite 1600
Seattle, WA 98101-2933
Attention: General Counsel
Fax No.: 206-749-8384
5
<PAGE> 6
7.7 Parties in Interest. This Agreement may not be transferred,
assigned, pledged or hypothecated by any Party hereto. This Agreement shall be
binding upon and shall inure to the benefit of the Parties hereto and their
respective heirs, executors, administrators, successors and assigns.
7.8 Counterparts. This Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one instrument.
7.9 Entire Agreement. This Agreement, including the other documents
referred to herein which form a part hereof, (a) constitutes the entire
agreement and supersedes all other prior agreements and understandings, both
written and oral, among the Parties, with respect to the subject matter hereof;
(b) is not intended to confer upon any person not a party hereto any rights or
remedies hereunder; and (c) shall not be assigned by operation of law or
otherwise.
7.10 Amendments. This Agreement may not be changed orally, but only by
an agreement in writing signed by each of the Parties.
7.11 Severability. In case any provision in this Agreement shall be
held invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof will not in any way be
affected or impaired thereby.
7.12 Termination of Agreement. All Parties hereto agree to use their
reasonable best efforts to fulfill the requirements of Article V and VI as soon
as practicable. If any precondition to the completion of the transactions
contemplated hereby is not fulfilled on or prior to March 31, 1998, this
Agreement shall be null and void and have no further effect.
IN WITNESS WHEREOF, the parties have caused this Memorandum to be
signed on its behalf by its duly authorized representative as of the date first
set forth above.
NEXTEL INTERNATIONAL (JAPAN), LTD.
By: /s/ BRIAN VINCENT
----------------------------------
Name: Brian Vincent
--------------------------------
Title: Vice President
-------------------------------
NIPPON MOTOROLA LTD.
By: /s/ ISAMU KURU
----------------------------------
Name: Isamu Kuru
6
<PAGE> 7
Title: President and Representative Director
J-COM CO., LTD.
By: /s/ RON LANDENBERG
----------------------------------
Name: Ron Landenberg
Title: Representative Director and President
7
<PAGE> 8
EXHIBIT A
MEMORANDUM
This MEMORANDUM is made and entered into as of March __, 1998 by and
among J-COM Co., Ltd., a joint stock company organized under the laws of Japan
(the "Company"), DJSMR Business Partnership, a partnership organized under the
laws of Japan ("DJSMR Partnership"), Nippon Motorola Ltd., a company organized
under the laws of Japan and a wholly-owned subsidiary of Motorola, Inc. ("NML"),
Nichimen Corporation, a company organized under the laws of Japan ("Nichimen")
and ORIX Corporation, a company organized under the laws of Japan ("ORIX").
WHEREAS, the parties hereto entered into a certain Shareholders'
Agreement regarding the Company on December 15, 1997, as amended (the
"Shareholders' Agreement");
WHEREAS, Nextel International (Japan), Ltd. ("Nextel Japan") has
expressed its desire to become a Shareholder in accordance with the terms of the
Shareholders' Agreement, replacing NML as a Shareholder thereunder; and
WHEREAS, in order for Nextel Japan to be able to become a Shareholder
under the Shareholders' Agreement certain terms of the Shareholders' Agreement
must be modified to satisfy certain of Nextel International, Inc.'s indenture
requirements, as set forth in this Memorandum.
NOW THEREFORE, in consideration of the mutual covenants,
representations and warranties and subject to the terms and conditions contained
herein, the parties hereto agree as follows:
Section 1. Definitions. Unless otherwise defined herein, capitalized
terms used herein without definition shall have the same meanings as set forth
in the Shareholders' Agreement.
Section 2. Limitation on Restricted Payments. Notwithstanding anything to the
contrary in the Shareholders' Agreement, the affirmative votes of six (6) of the
Directors shall be required for any investment individually or in the aggregate
with all other investments to be made simultaneously in excess of 3,000,000,000
Yen, other than the following by the Company:
(a) direct obligations of the United States of America or any agency
thereof or obligations fully and unconditionally guaranteed by the
United States of America or any agency thereof;
(b) time deposit accounts, certificates of deposit and money market
deposits
<PAGE> 9
maturing within 180 days of the date of acquisition thereof issued by a
bank or trust company which is organized under the laws of the United
States of America, any state thereof or any foreign country recognized
by the United States, and which bank or trust company has capital,
surplus and undivided profits aggregating in excess of U.S. $50 million
(or the foreign currency equivalent thereof) and has outstanding debt
which is rated "A" (or such similar equivalent rating) or higher by at
least one internationally recognized statistical rating organization
(provided such internationally recognized statistical rating
organization's "A" rating is substantially similar to the "A" rating of
at least one U.S. nationally recognized statistical rating
organization) or any money-market fund sponsored by a registered broker
dealer or mutual fund distributor;
(c) repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clause (a) above
entered into with a bank meeting the qualifications described in clause
(b) above;
(d) commercial paper, maturing not more than 90 days after the date of
acquisition, issued by a corporation (other than an Affiliate of one of
the Shareholders) organized and in existence under the laws of the
United States of America, any state thereof or any foreign country
recognized by the United States of America with a rating at the time as
of which any investment therein is made of "P-1" (or higher)" according
to Moody's Investor Service, Inc. or its successors ("Moody's") or
"A-1" (or higher) according to Standard & Poor's Ratings Services or
its successors ("S&P"); and
(e) securities with maturities of six months or less from the date of
acquisition issued or fully and unconditionally guaranteed by any
state, commonwealth or territory of the United States of America, or by
any political subdivision or taxing authority thereof, and rated at
least "A" by S&P or Moody's.
For purposes hereof, "investment" shall mean, as to any Person, any advance,
loan or other extension of credit or capital contribution to such Person or any
purchase or acquisition of capital stock, bonds, notes, debentures or other
similar instruments issued by such Person.
Section 3. Restrictions on Dividends. Notwithstanding anything to the contrary
in the Shareholders' Agreement, the payment of dividends by the Company to the
Shareholders shall be decided at a meeting of Shareholders by the affirmative
vote of a majority of the outstanding Shares, and the payment of interim
dividends by the Company to the Shareholders shall be decided at a Board of
Directors meeting by the affirmative vote of a majority of the Directors;
provided, however, that the payment of dividends or interim dividends by the
Company to the Shareholders shall require the affirmative vote of two-thirds of
the outstanding Shares at a meeting of Shareholders or of six (6) of the
Directors at a Board of Directors meeting, respectively, in the event any of the
Initial Loans, the Initial Leases, the Nippon Motorola Loan or any other loans
to the Company from the Shareholders remain outstanding.
9
<PAGE> 10
Section 4. Limitations on Indebtedness and Liens. Notwithstanding anything to
the contrary in the Shareholders' Agreement, the Company shall notify Nextel
Japan whenever the Company intends to incur any Indebtedness or create any Liens
other than those of which the affirmative vote of six (6) or more Directors is
required under Section 5.5 (iv), (v), (vi) or (xvi) of the Shareholders'
Agreement, as soon as possible prior to the incurrence of such Indebtedness or
the creation of such Liens. Notwithstanding anything to the contrary in the
Shareholders' Agreement, the term "Indebtedness" shall also include (a)
obligations in respect of letters of credit or other similar instruments
(including reimbursement obligations with respect thereto, but excluding
obligations with respect to (i) letters of credit securing obligations entered
into in the ordinary course of business to the extent such letters of credit are
not drawn upon or, if drawn upon, to the extent such drawing is reimbursed no
later than three business days following such demand and (ii) letters of credit
secured by cash collateral to the extent secured thereby, (b) obligations in
respect of the deferred and unpaid purchase price of property or services due
more than six months after the date such property is delivered or such service
is completed, (c) obligations in respect of capitalized leases, and (d)
obligations in respect of foreign exchange contracts, currency swap agreements,
interest rate protection agreements, interest rate future agreements, interest
rate option agreements, interest rate swap agreements, interest rate cap
agreements, interest rate collar agreements, interest rate hedge agreements or
other similar agreements or arrangements.
Section 5. Limitations on Sale-Leaseback Transactions. Notwithstanding
anything to the contrary in the Shareholders' Agreement, the affirmative votes
of six (6) of the Directors shall be required for any sale-leaseback transaction
by the Company if the term of the lease is for three years or greater; provided
that this restriction does not apply to such lease agreements and agreements
related thereto (including debt assumption agreements and assignments regarding
the contractor agreements) that have been approved in the Annual Business Plan.
Section 6. Conditions for the Amendments. The above amendments and
modifications to the Shareholders' Agreement shall be effective only to the
extent that Nextel Japan is a Shareholder of the Company and Nextel
International, Inc.'s indenture requirements require such modifications in order
to avoid default thereunder.
Section 7. Consent. By execution hereof, each of the parties hereto gives
its consent to have Nextel Japan become a Shareholder under the Shareholders'
Agreement in place of NML.
Section 8. No Other Change. Unless expressly stated herein, the terms and
conditions of the Shareholders' Agreement shall remain unchanged. All references
to the Shareholders' Agreement shall mean the Shareholders' Agreement as amended
and modified by this Memorandum.
Section 9. Counterparts. This Memorandum may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original,
10
<PAGE> 11
but all such counterparts shall together constitute but one and the same
document.
Section 10. Governing Law. The laws of Japan shall apply to this Memorandum.
This Memorandum and the obligations of the parties hereto are subject to all
applicable laws, rules, court decisions, orders and regulations of Japanese
governmental authorities having jurisdiction; and in the event of conflict, said
laws, rules court decisions, orders and regulations of governmental authorities
having jurisdiction shall control.
Section 11. Language. This Memorandum has been made both in Japanese and
English and both the Japanese and English versions shall be originals, provided
that the Japanese version shall control.
IN WITNESS WHEREOF, the parties have caused this Memorandum to be
signed on its behalf by its duly authorized representative as of the date first
set forth above.
J-COM CO., LTD.
By:
----------------------------------
Name: Ron Landenberg
Title: Representative Director and President
DJSMR BUSINESS PARTNERSHIP
By: Nippon Motorola Ltd.
Executive Partner
By:
----------------------------------
Name: Stephen E. Shanck
Title: General Manager
Land Mobile Products Division
NIPPON MOTOROLA LTD.
By:
----------------------------------
Name: Isamu Kuru
Title: President and Representative Director
11
<PAGE> 12
NICHIMEN CORPORATION
By:
----------------------------------
Name: Tadashi Takahashi
Title: Managing Director
Senior General Manager
Plant & Project Division
ORIX CORPORATION
By:
----------------------------------
Name: Tsutomu Matsuzaki
Title: Deputy General Manager
Computer Communications Department
12
<PAGE> 13
EXHIBIT B
LETTER REGARDING DIRECTOR ELECTION
March __, 1998
Nextel International (Japan), Ltd.
1191 Second Avenue, Suite 1600
Seattle, WA 98101-2933
Re: J-Com Co., Ltd.
Ladies and Gentlemen:
Reference is made to the Shareholders' Agreement dated December 15,
1997 (the "Shareholders' Agreement") by and among J-Com Co., Ltd., a joint stock
company organized under the laws of Japan (the "Company"), DJSMR Business
Partnership, a partnership organized under the laws of Japan ("DJSMR"), Nippon
Motorola Ltd., a company organized under the laws of Japan ("NML"), Nichimen
Corporation, a company organized under the laws of Japan and ORIX Corporation, a
company organized under the laws of Japan.
On the date hereof, NML is selling all of its interest in the Company
to Nextel International (Japan), Ltd., a Delaware corporation ("Nextel Japan")
pursuant to that certain Stock Purchase Agreement by and among NML, Nextel Japan
and the Company (the "Stock Purchase Agreement") and NML has agreed to be bound
by the Shareholders' Agreement as a Shareholder thereunder. This letter is
delivered pursuant to Section 5.5 of the Stock Purchase Agreement.
Pursuant to the terms of Section 5.1 of the Shareholders' Agreement,
following consummation of the Stock Purchase Agreement, in addition to the
members of the Board of Directors of the Company that each party will be
entitled to designate pursuant to the Shareholders Agreement, DJSMR and Nextel
Japan will be entitled to designate together one member of the Board of
Directors of the Company (the "Joint Designee") upon mutual consultation in good
faith. DJSMR hereby agrees to allow Nextel Japan to designate such Joint
Designee, which Joint Designee shall be subject to the approval by DJSMR which
will not be unreasonably withheld.
In addition, DJSMR and NML agree to nominate and support a Nextel Japan
representative to the JAMTA Board of Counselors and to support a Nextel Japan
nominee for the
13
<PAGE> 14
next available seat on the JAMTA Board of Directors.
Please acknowledge your agreement with the foregoing by executing this
letter in the space indicated below.
Very truly yours,
DJSMR BUSINESS PARTNERSHIP
By: Nippon Motorola Ltd.
Executive Partner
By:
----------------------------------
Name: Stephen E. Shanck
Title: General Manager
Land Mobile Products Division
Acknowledged and agreed to:
NIPPON MOTOROLA LTD.
By:
----------------------------------
Name: Stephen E. Shanck
Title: General Manager
Land Mobile Products Division
NEXTEL INTERNATIONAL (JAPAN), LTD.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
14
<PAGE> 15
EXHIBIT C
LETTER REGARDING SHAREHOLDERS' AGREEMENT
March __, 1998
To: DJSMR Business Partnership
Nichimen Corporation
ORIX Corporation
Re: J-Com Co., Ltd.
Ladies and Gentlemen:
We are pleased to inform you that on the date hereof Nextel
International (Japan), Ltd. ("Nextel Japan") and Nippon Motorola Ltd. ("NML")
entered into that certain Stock Purchase Agreement (the "Stock Purchase
Agreement") whereby Nextel Japan has acquired the 1,544 shares (the "Shares") of
J-COM Co., Ltd. (the "Company") previously owned by NML. This letter is being
delivered pursuant to Section 6.4 of the Stock Purchase Agreement
The purpose of this letter is to inform the existing Shareholders of
the Company of Nextel Japan's agreement to comply with and be bound by the terms
of the Shareholders' Agreement dated December 15, 1997 among the Company, DJSMR
Business Partnership, NML, Nichimen Corporation and ORIX Corporation, as amended
(the "Shareholders' Agreement").
Nextel Japan hereby assumes all of the rights, duties and obligations
of a Shareholder (as defined in the Shareholders' Agreement) of the Company
under the Shareholders' Agreement and acknowledges and agrees from and after the
date hereof and so long as it owns any of the Shares that it shall comply with
and be bound by all of the terms and conditions of the Shareholders' Agreement.
In addition, Nextel International, Inc., a Delaware corporation ("NII")
hereby agrees that it shall be responsible to the Company and the Shareholders
for all of Nextel Japan's duties and obligations under the Shareholders'
Agreement and guarantees the performance by Nextel Japan of all of Nextel
Japan's duties and obligations under the Shareholders' Agreement. If Nextel
Japan shall have defaulted in the payment when due of any amount required to be
paid by Nextel Japan under the Shareholders' Agreement, and such default shall
remain uncured ten days following written notice by J-Com or any other
Shareholder, then NII shall within five days after delivery of written notice
pay the amount not so paid.
15
<PAGE> 16
NII agrees that the restrictions on the Transfer (as such terms is
defined in the Shareholders' Agreement) of Shares (as defined in the
Shareholders' Agreement) set forth in the Shareholders' Agreement shall apply,
mutatis mutandis, to the transfer of equity securities of Nextel Japan as if
such securities were Shares and NII shall take all actions necessary to cause
its direct and indirect subsidiaries to comply with the provision of the
Shareholders' Agreement in connection with any such Transfer.
Very truly yours,
NEXTEL INTERNATIONAL (JAPAN), LTD.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
NEXTEL INTERNATIONAL, INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
16
<PAGE> 17
EXHIBIT D
LETTER REGARDING GUARANTEES
March __, 1998
Nextel International, Inc.
1191 Second Avenue, Suite 1600
Seattle, WA 98101-2933
Re: J-Com Co., Ltd.
Ladies and Gentlemen:
Reference is made to the Shareholders' Agreement dated December 15,
1997, as amended (the "Shareholders' Agreement") by and among J-Com Co., Ltd., a
joint stock company organized under the laws of Japan (the "Company"), DJSMR
Business Partnership, a partnership organized under the laws of Japan ("DJSMR"),
Nippon Motorola Ltd., a company organized under the laws of Japan ("NML"),
Nichimen Corporation, a company organized under the laws of Japan and ORIX
Corporation, a company organized under the laws of Japan. Reference is also made
to that certain offer letter and related J-Com Ltd Investment Term Sheet dated
November 7, 1997 (the "Offer Letter").
On the date hereof, NML is selling all of its interest in the Company
to Nextel International (Japan), Ltd., a Delaware corporation ("Nextel Japan")
pursuant to that certain Stock Purchase Agreement by and among NML, NII and the
Company (the "Stock Purchase Agreement") and NML has agreed to be bound by the
Shareholders' Agreement as a Shareholder thereunder. This letter is delivered
pursuant to Section 6.5 of the Stock Purchase Agreement.
Nextel Japan hereby acknowledges and agrees that, as contemplated in
the Offer Letter, in the event that the guarantee of any of the Shareholders (as
defined in the Shareholders' Agreement) is required in connection with the
leasing of equipment by the Company, Nextel Japan, as a Shareholder, will make
such guarantee concurrently with the other Shareholders (other than DJSMR) pro
rata based on two times its equity percentage. Nextel Japan acknowledges and
agrees that such agreement is made in partial consideration for the purchase of
the shares of the Company from NML pursuant to the Stock Purchase Agreement. In
addition, Nextel International, Inc., a Delaware corporation, hereby guarantees
the performance by Nextel Japan of all of Nextel Japan's duties and obligations
hereunder.
Please acknowledge your agreement with the foregoing by executing this
letter in the space indicated below.
Very truly yours,
17
<PAGE> 18
NIPPON MOTOROLA LTD.
By:
----------------------------------
Name: Isamu Kuru
Title: President and Representative Director
Acknowledged and agreed to:
NEXTEL INTERNATIONAL (JAPAN), LTD.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
NEXTEL INTERNATIONAL, INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
18
<PAGE> 1
EXHIBIT 10.6
================================================================================
CREDIT AGREEMENT
DATED MARCH 17, 1998
BETWEEN
J-COM CO., LTD.
AND
NEXTEL INTERNATIONAL (JAPAN), LTD.
================================================================================
<PAGE> 2
CREDIT AGREEMENT
Dated March 17, 1998
This Credit Agreement dated March 17, 1998 (herein called this "Agreement")
is entered into between J-COM CO., LTD., a Japanese corporation (herein called
the "Borrower"), and Nextel International (Japan), Ltd., a Delaware corporation
(herein called the "Lender").
RECITALS
1. The Lender and certain other parties are parties to a Shareholders'
Agreement dated as of December 15, 1997 (herein, as amended, modified or
supplemented, the "Shareholders' Agreement"; the Lender and all other parties
which may be parties thereto (other than the Borrower and Nippon Motorola
Ltd.), herein collectively called the "Shareholders"), pursuant to which the
Lender agreed to be a shareholder of the Borrower.
2. As a condition to becoming a Shareholder, the Lender has agreed to
make the loan described herein.
SECTION 1 LOAN AND CONDITIONS.
SECTION 1.1 Loan. Subject to the terms and conditions of this Agreement,
the Lender hereby to lend to the Borrower the principal amount of Yen
4,100,000,000 (the "Loan").
SECTION 1.2 Borrowing Procedure. The Lender shall disburse the Loan to
the Borrower on the date, and to the account of the Borrower, specified by the
Borrower, provided that no Default or Event of Default then exists.
SECTION 1.3 Recordation of Payments. The date and amount of each
repayment of principal of the Loan received by the Lender shall be recorded by
the Lender in its records. The aggregate unpaid principal amount so recorded
shall be rebuttable presumptive evidence of the principal amount owing and
unpaid. The failure to so record or any error in so recording any such amount
shall not, however, limit or otherwise affect the obligations of the Borrower
hereunder to repay the principal amount of the Loan together with all interest
accruing thereon.
SECTION 1.4 Due Date Extension. If any payment of principal or interest
falls due on a Saturday, Sunday or other day which is not a business day of the
Lender, then such due date shall be extended to the next following business day
of the Lender, and additional interest shall accrue and be payable for the
period of such extension.
Page 1
<PAGE> 3
SECTION 2 REPAYMENTS; INTEREST.
SECTION 2.1 Repayments of Principal. The Borrower shall repay the
outstanding amount under the Loan in accordance with the repayment schedule
attached hereto as EXHIBIT A.
SECTION 2.2 Interest Payments. Interest shall accrue on the average
outstanding principal balance for each fiscal quarter and be payable on the 5th
business day after the end of each fiscal quarter; provided, however, that the
interest to be accrued for the final period (i.e., from and including April 1,
2005 to and including May 30, 2005) shall be payable on June 1, 2005 together
with the then outstanding principal.
SECTION 2.3 Interest. The unpaid principal amount from time to time
outstanding shall bear interest at the rate of 3.8 percent per annum. Interest
shall be computed for the actual number of days elapsed on the basis of a year
consisting of 365 days.
SECTION 2.4 Overdue Interest. In the event that the Borrower fails to pay
on the due date any of the principal of the Loan hereunder, then the Borrower
shall pay an overdue interest on such unpaid principal amount from the due date
to the date of actual payment; provided, however, that if the Borrower pays such
unpaid principal amount within five days of the due date, then the overdue
interest shall not be imposed but the interest shall accrue at the rate provided
in Section 2.3. The overdue interest under this section shall be calculated at
the rate of (a) the Long Term Prime Rate, quoted by The Industrial Bank of Japan
on the due date, plus two percent (2%) per annum or (b) [the interest rate to be
provided in Section 2.3 plus one half percent (0.5%)] per annum, whichever is
higher.
SECTION 3 COVENANTS.
So long as any amount of principal or interest under this Agreement shall
remain unpaid or outstanding, the Borrower will:
SECTION 3.1 Maintenance of Records. Keep adequate records and books of
account, in which complete entries will be made in accordance with general
accepted accounting principles consistently applied, reflecting all financial
transactions of the Borrower.
SECTION 3.2 Compliance with Laws. Comply in all material respects with
applicable laws, rules, regulations, and orders, such compliance to include,
without limitation, paying before the same become delinquent all taxes,
assessments, and governmental charges imposed upon it or upon its property.
Page 2
<PAGE> 4
SECTION 3.3 Reporting Requirements. Furnish to the Lender:
(a) Annual financial statements. As soon as available and in any event
within ninety (90) days after the end of each fiscal year of the Borrower, a
balance sheet of the Borrower as of the end of such fiscal year and a statement
of income and retained earnings of the Borrower for such fiscal year and a
statement of cash flows of the Borrower for such fiscal year, all in reasonable
detail and stating in comparative form the respective figures for the
corresponding date and period in the prior fiscal year and all prepared in
accordance with Japanese generally accepted accounting principles consistently
applied and accompanied by a compilation report thereon acceptable to the Lender
by independent accountants selected by the Borrower and acceptable to the
Lender;
(b) Notice of Defaults and Events of Default. As soon as possible and in
any event within fifteen (15) days after the occurrence of each Default or
Event of Default, a written notice setting forth the details of such Default or
Event of Default and the action which is proposed to be taken by the Borrower
with respect thereto; and
(c) General Information. Such other information respecting the condition or
operations, financial or otherwise of the Borrower furnished to any other
lender or as the Lender may from time to time reasonably request.
SECTION 4 CONDITIONS OF LENDING.
SECTION 4.1 Conditions. This Agreement shall become effective on
March 17, 1998 (the "Closing Date") provided that (except to the extent waived
in writing by the Lender) the Lender shall have received the following, duly
executed and dated as of a date and in form and substance satisfactory to the
Lender:
(a) a copy of a resolution of the Borrower approving the borrowing
hereunder, certified by the Representative Director; and
(b) a certificate of the Representative Director of the Borrower to the
effect that no Default or Event of Default exists.
SECTION 5 EVENTS OF DEFAULT AND THEIR EFFECT.
SECTION 5.1 Events of Default. Each of the following events shall
constitute an "Event of Default" hereunder:
(a) the Borrower shall fail to pay when due any principal of, or interest
on, the Loans, and such failure shall continue for five (5) business days,
whether such failure to pay either of the foregoing is by reason of the
provisions of Section 5 or otherwise; or
(b) the Borrower shall fail to perform or observe any of the terms,
covenants or agreements contained in this Agreement other than items included
in (a) above and if such failure shall remain unremedied for a period of thirty
(30) days after written notice thereof shall have been given to the Borrower by
the Lender;
Kanto/Credit Agmt.-.10 Page 3
<PAGE> 5
provided that if the Borrower commences in good faith during such thirty (30)
days to diligently attempt to cure such failure, the Borrower may, at the
Lender's option, be permitted such additional reasonable period of time in
which to cure such failure; or
(c) an event of default occurs and is continuing under any mortgage,
indenture or instrument under which there may be issued or by which there may
be secured or evidenced any Indebtedness of the Borrower (or the payment of
which is guaranteed by the Borrower), whether such Indebtedness or guarantee
now exists or shall be created hereafter and the result of such event of
default is the acceleration of such Indebtedness; provided that such
acceleration has not been rescinded, waived or cured; or
(d) the Borrower shall generally fail to pay its debts as such debts
become due, shall admit in writing its inability to pay its debts generally, or
shall make a general assignment for the benefit of its creditors; or any
proceeding shall be instituted by or against the Borrower seeking to adjudicate
it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its debts
under any law relating to bankruptcy, insolvency, reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee or other similar official for it or for any substantial part
of its property and, in the case of any such proceeding instituted against it
(but not instituted by it), either such proceeding shall remain undismissed or
unstayed for a period of sixty (60) days or any of the actions sought in such
proceeding (including, without limitation, the entry of an order for relief
against it or the appointment of a receiver, trustee, custodian or other similar
official for it or for any substantial part of its property) shall occur; or the
Borrower shall take any action to authorize any of the actions set forth above
in this Section 5.1(d); or
(e) there remains unpaid and unstayed pending appeals for more than sixty
(60) consecutive days, one or more judgments or decrees against the Borrower or
any guarantor of any of this Agreement involving an aggregate liability in
excess of Yen one hundred million (other than a money judgment covered by
insurance, but only if the insurer has admitted, in writing, liability with
respect to such judgment).
SECTION 5.2 Remedies.
(a) If an Event of Default (other than an Event of Default specified in
Section 5.1(d)) occurs and is continuing, the Lender may, by three (3) days'
prior written notice, to the Borrower (the "Default Notice"), declare the
then-outstanding principal amount and accrued interest on the Loan to be
immediately due and payable. If an Event of Default specified in Section 5.1(d)
occurs, the then outstanding principal amount and accrued interest on the Loan
shall ipso facto become and be immediately due and payable without any
declaration or other action on the part of the Lender. The Lender by notice to
the Borrower may rescind any acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default hereunder have been cured or waived except nonpayment of
principal or interest that has become due solely because of the acceleration.
Kanto/Credit Agmt.-.10 Page 4
<PAGE> 6
SECTION 6 CERTAIN DEFINITIONS.
When used herein, the following terms, whether or not
underscored elsewhere in this Agreement, shall have the following
meanings:
"Agreement" - see the Preamble.
"Borrower" - see the Preamble.
"Closing Date" - see Section 4.1.
"Default" shall mean any event which, but for the giving of
notice or lapse of time or both, would constitute an Event of
Default.
"Default Notice" - see Section 5.2.
"Event of Default" - see Section 5.1.
"Indebtedness" shall mean: (a) all obligations of the Borrower
for borrowed money, including, but not limited to, all such obligations
evidenced by bonds, debentures, notes or other similar instruments; (b)
all letters of credit, whether or not drawn, and banker's acceptances
issued for the account of the Borrower; (c) all obligations which have
been or should be, in accordance with generally accepted accounting
principles, recorded as capitalized leases on the Borrower's financial
statements; (d) all other items (exclusive of negative goodwill) which,
in accordance with generally accepted accounting principles, would be
included as liabilities on the liability side of the balance sheet of
the Borrower; and (e) whether or not so included as liabilities in
accordance with generally accepted accounting principles, all
obligations of the Borrower to pay the deferred purchase price of
property or services.
"Lender" - see the Preamble.
"Loan" - see Section 1.1.
"Shareholders" - see Recital 1.
"Shareholders' Agreement" - see Recital 1.
SECTION 7 GENERAL.
SECTION 7.1 Optional Prepayment. The Borrower may prepay the
Loan without penalty in whole or in part at any time and from time to
time prior to maturity with the consent of the Lender, which consent
shall not be unreasonably withheld; provided that such prepayments
shall be made ratably with all other Shareholders who have made loans
to the Borrower.
SECTION 7.2 Amendments, Etc. No amendment or waiver of any
provision of the Agreement, nor consent to any departure by the
Borrower therefrom, shall in any event be effective unless the same
shall be in writing and
Page 5
<PAGE> 7
signed by the Lender unless otherwise provided herein, and then such
waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given.
SECTION 7.3 Governing Law. This Agreement shall be governed
by, and construed in accordance with, the internal laws of Japan.
SECTION 7.4 Waiver. The Borrower hereby agrees to pay all
costs of collection when incurred, including attorneys' fees (which
costs may be added to the amount due under the Loans) and to perform
and comply with each of the terms, covenants and provisions contained
in this Agreement on the part of the Borrower to be observed or
performed. No extension of time for payment of the Loan, or any
installment thereof, and no alteration, amendment or waiver of any
provision of this Agreement by agreement between the Lender and any
other person or party shall release, discharge, modify, change or
affect the liability of the Borrower under this Agreement.
SECTION 7.5 Notices. All notices and other communications
provided to any party hereto under this Agreement shall be in writing
or by telex or by facsimile and addressed or delivered to it at its
address set forth:
To the Borrower:
J-Com Co. Ltd.
20-1, Minami-Azabu 3-chome
Minato-ku
Tokyo 106, Japan
Attention: Ron Landenberg, Representative Director
and President
Fax No.: 03-3440-1822
To the Lender:
Nextel International (Japan), Ltd.
C/O Nextel International, Inc.
1191 Second Avenue, Suite 1600,
Seattle, WA 98101
Attention: General Counsel
Fax No.: 206-749-8384
or at such other address as may be designated by such party from time
to time in a notice complying as to delivery with the terms of this
Section to the other parties. Any notice, if mailed and properly
addressed with postage prepaid, shall be deemed given when received;
any notice if transmitted by telex or facsimile, shall be deemed given
when transmitted (answerback confirmed in the case of telexes
and receipt confirmed in the case of facsimiles).
SECTION 7.6 Severability. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating
Page 6
<PAGE> 8
the remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction.
SECTION 7.7 Binding Effect; Successors and Assigns. This Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and assigns; provided, however, that the Borrower
may not assign or transfer its rights or obligations hereunder without the
prior written consent of the Lender; provided, further that unless an Event of
Default has occurred and is continuing, the Lender may not assign its rights
hereunder without the prior written consent of the Borrower.
IN WITNESS WHEREOF, each of the parties hereto have caused this
Agreement to be signed in its name by its duly authorized officer.
J-COM CO., LTD.
/s/ RON LANDENBERG
----------------------------------
By: Ron Landenberg
Title: Representative Director and President
Nextel International (Japan), Ltd.
/s/ BRIAN VINCENT
----------------------------------
By: Brian Vincent
Title: Vice President
Page 7
<PAGE> 9
EXHIBIT A
REPAYMENT SCHEDULE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Due Date Amount of Principle Repayment
- --------------------------------------------------------------------------------
<S> <C>
June 1, 2003 1,545,700,000 yen
- --------------------------------------------------------------------------------
June 1, 2004 1,631,800,000 yen
- --------------------------------------------------------------------------------
June 1, 2005 922,500,000 yen
- --------------------------------------------------------------------------------
</TABLE>
<PAGE> 1
EXHIBIT 10.7
MEMORANDUM
This MEMORANDUM is made and entered into as of March 11, 1998 by and
among J-COM Co., Ltd., a joint stock company organized under the laws of Japan
(the "Company"), DJSMR Business Partnership, a partnership organized under the
laws of Japan ("DJSMR Partnership"), Nippon Motorola Ltd., a company organized
under the laws of Japan and a wholly- owned subsidiary of Motorola, Inc.
("NML"), Nichimen Corporation, a company organized under the laws of Japan
("Nichimen") and ORIX Corporation, a company organized under the laws of Japan
("ORIX").
WHEREAS, the parties hereto entered into a certain Shareholders'
Agreement regarding the Company on December 15, 1997, as amended (the
"Shareholders' Agreement");
WHEREAS, Nextel International (Japan), Ltd. ("Nextel Japan") has
expressed its desire to become a Shareholder in accordance with the terms of
the Shareholders' Agreement, replacing NML as a Shareholder thereunder; and
WHEREAS, in order for Nextel Japan to be able to become a Shareholder
under the Shareholders' Agreement certain terms of the Shareholders' Agreement
must be modified to satisfy certain of Nextel International, Inc.'s indenture
requirements, as set forth in this Memorandum.
NOW THEREFORE, in consideration of the mutual covenants,
representations and warranties and subject to the terms and conditions
contained herein, the parties hereto agree as follows:
Section 1. Definitions. Unless otherwise defined herein, capitalized
terms used herein without definition shall have the same meanings as set forth
in the Shareholders' Agreement.
Section 2. Limitation on Restricted Payments. Notwithstanding anything to
the contrary in the Shareholders' Agreement, the affirmative votes of six (6)
of the Directors shall be required for any investment individually or in the
aggregate with all other investments to be made simultaneously in excess of
3,000,000,000 Yen, other than the following by the Company:
(a) direct obligations of the United States of America or any agency
thereof or obligations fully and unconditionally guaranteed by the
United States of America or any agency thereof;
(b) time deposit accounts, certificates of deposit and money market
deposits maturing within 180 days of the date of acquisition thereof
issued by a bank or trust company which is organized under the laws of
the United States of America,
<PAGE> 2
any state thereof or any foreign country recognized by the United
States, and which bank or trust company has capital, surplus and
undivided profits aggregating in excess of U.S. $50 million (or the
foreign currency equivalent thereof) and has outstanding debt which is
rated "A" (or such similar equivalent rating) or higher by at least
one internationally recognized statistical rating organization
(provided such internationally recognized statistical rating
organization's "A" rating is substantially similar to the "A" rating
of at least one U.S. nationally recognized statistical rating
organization) or any money-market fund sponsored by a registered
broker dealer or mutual fund distributor;
(c) repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clause (a) above
entered into with a bank meeting the qualifications described in
clause (b) above;
(d) commercial paper, maturing not more than 90 days after the date of
acquisition, issued by a corporation (other than an Affiliate of one
of the Shareholders) organized and in existence under the laws of the
United States of America, any state thereof or any foreign country
recognized by the United States of America with a rating at the time
as of which any investment therein is made of "P-1" (or higher)"
according to Moody's Investor Service, Inc. or its successors
("Moody's") or "A-1" (or higher) according to Standard & Poor's
Ratings Services or its successors ("S&P"); and
(e) securities with maturities of six months or less from the date of
acquisition issued or fully and unconditionally guaranteed by any
state, commonwealth or territory of the United States of America, or
by any political subdivision or taxing authority thereof, and rated at
least "A" by S&P or Moody's.
For purposes hereof, "investment" shall mean, as to any Person, any advance,
loan or other extension of credit or capital contribution to such Person or any
purchase or acquisition of capital stock, bonds, notes, debentures or other
similar instruments issued by such Person.
Section 3. Restrictions on Dividends. Notwithstanding anything to the
contrary in the Shareholders' Agreement, the payment of dividends by the
Company to the Shareholders shall be decided at a meeting of Shareholders by
the affirmative vote of a majority of the outstanding Shares, and the payment
of interim dividends by the Company to the Shareholders shall be decided at a
Board of Directors meeting by the affirmative vote of a majority of the
Directors; provided, however, that the payment of dividends or interim
dividends by the Company to the Shareholders shall require the affirmative vote
of two-thirds of the outstanding Shares at a meeting of Shareholders or of six
(6) of the Directors at a Board of Directors meeting, respectively, in the
event any of the Initial Loans, the Initial Leases, the Nippon Motorola Loan or
any other loans to the Company from the Shareholders remain outstanding.
2
<PAGE> 3
Section 4. Limitations on Indebtedness and Liens. Notwithstanding
anything to the contrary in the Shareholders' Agreement, the Company shall
notify Nextel Japan whenever the Company intends to incur any Indebtedness or
create any Liens other than those of which the affirmative vote of six (6) or
more Directors is required under Section 5.5 (iv), (v), (vi) or (xvi) of the
Shareholders' Agreement, as soon as possible prior to the incurrence of such
Indebtedness or the creation of such Liens. Notwithstanding anything to the
contrary in the Shareholders' Agreement, the term "Indebtedness" shall also
include (a) obligations in respect of letters of credit or other similar
instruments (including reimbursement obligations with respect thereto, but
excluding obligations with respect to (i) letters of credit securing
obligations entered into in the ordinary course of business to the extent such
letters of credit are not drawn upon or, if drawn upon, to the extent such
drawing is reimbursed no later than three business days following such demand
and (ii) letters of credit secured by cash collateral to the extent secured
thereby, (b) obligations in respect of the deferred and unpaid purchase price
of property or services due more than six months after the date such property
is delivered or such service is completed, (c) obligations in respect of
capitalized leases, and (d) obligations in respect of foreign exchange
contracts, currency swap agreements, interest rate protection agreements,
interest rate future agreements, interest rate option agreements, interest rate
swap agreements, interest rate cap agreements, interest rate collar agreements,
interest rate hedge agreements or other similar agreements or arrangements.
Section 5. Limitations on Sale-Leaseback Transactions. Notwithstanding
anything to the contrary in the Shareholders' Agreement, the affirmative votes
of six (6) of the Directors shall be required for any sale-leaseback
transaction by the Company if the term of the lease is for three years or
greater; provided that this restriction does not apply to such lease agreement
and agreements related thereto (including debt assumption agreements and
assignment agreements regarding the contractor agreements) that have been
approved in the Annual Business Plan.
Section 6. Conditions for the Amendments. The above amendments and
modifications to the Shareholders' Agreement shall be effective only to the
extent that Nextel Japan is a Shareholder of the Company and Nextel
International, Inc.'s indenture requirements require such modifications in
order to avoid default thereunder.
Section 7. Consent. By execution hereof, each of the parties hereto
gives its consent to have Nextel Japan become a Shareholder under the
Shareholders' Agreement in place of NML.
Section 8. No Other Change. Unless expressly stated herein, the terms
and conditions of the Shareholders' Agreement shall remain unchanged. All
references to the Shareholders' Agreement shall mean the Shareholders'
Agreement as amended and modified by this Memorandum.
Section 9. Counterparts. This Memorandum may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute but
one and the same document.
3
<PAGE> 4
Section 10. Governing Law. The laws of Japan shall apply to this
Memorandum. This Memorandum and the obligations of the parties hereto are
subject to all applicable laws, rules, court decisions, orders and regulations
of Japanese governmental authorities having jurisdiction; and in the event of
conflict, said laws, rules court decisions, orders and regulations of
governmental authorities having jurisdiction shall control.
Section 11. Language. This Memorandum has been made both in Japanese and
English and both the Japanese and English versions shall be originals, provided
that the Japanese version shall control.
IN WITNESS WHEREOF, the parties have caused this Memorandum to be
signed on its behalf by its duly authorized representative as of the date first
set forth above.
J-COM CO., LTD.
By: /s/ RON LANDENBERG
----------------------------------------------
Name: Ron Landenberg
Title: Representative Director and President
DJSMR BUSINESS PARTNERSHIP
By: Nippon Motorola Ltd.
Executive Partner
By: /s/ STEPHEN E. SHANCK
----------------------------------------------
Name: Stephen E. Shanck
Title: General Manager
Land Mobile Products Division
NIPPON MOTOROLA LTD.
By: /s/ ISAMU KURU
----------------------------------------------
Name: Isamu Kuru
Title: President and Representative Director
4
<PAGE> 5
NICHIMEN CORPORATION
By: /s/ TADASHI TAKAHASHI
----------------------------------------------
Name: Tadashi Takahashi
Title: Managing Director
Senior General Manager
Plant & Project Division
ORIX CORPORATION
By: /s/ TSUTOMU MATSUZAKI
----------------------------------------------
Name: Tsutomu Matsuzaki
Title: Deputy General Manager
Computer Communications Department
5
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